Beating Broke

Dell Pauses Employee Benefits to Cut Costs

May 25, 2020 By MelissaB Leave a Comment

As the COVID-19 crises continues around the world, the United States continues to see economic fallout. While restaurants, bars, gyms, and other service sector employees had to layoff employees during the early days of the pandemic, now, many white-collar employees are also feeling the pinch. Many universities have had to furlough employees, and recently, even the computer industry is taking significant cost cutting measures. Specifically, Dell pauses employee benefits to cut costs.

The Cuts Dell Is Making

Beginning June 1^st, Dell is making cuts to several of their many employee benefits.

Retirement Contributions

Dell will not be contributing to their employees’ retirement funds for at least the remainder of the fiscal year. (Dell’s current fiscal year ends on January 29, 2021.)

Dell typically matches the employees’ 4% retirement contribution the first year of employment, then bumps that amount to 5% the second year, and 6% the third year of employment or up to a $7,500 a year match.

However, in an effort to preserve cash, Dell will temporarily halt this benefit.

Internal Promotions and Raises

Dell Pauses Employment Benefits to Cut Costs — Photo by Headway on Unsplash

Also beginning June 1^st, Dell will temporarily stop internal promotions and raises. Once again, these actions are expected to last at least through the end of the fiscal year.

Employee Incentives

Dell has an internal employee incentive program where employees can earn “inspire points” that they also paused. With this program, employees receive commendations from bosses and colleagues and can use the points to buy gift cards and other items.

The Cuts Dell Has Not Had to Make

While Dell is signaling that they are proactively protecting their cash with these cuts, there are some significant measures they have chosen NOT to take.

No Furloughs

Unlike many companies, Dell is currently NOT furloughing employees. All employees have kept their jobs.

No Pay Cuts

Many companies and industries, such as higher education, have had to cut their employees’ pay. Thus far, Dell is avoiding that. While employees won’t be eligible for promotions or raises for at least the next seven months, they are not, so far, getting their pay reduced.

Employees Aren’t Alone

Dell pauses employee benefits to cut costs isn’t the first cost-cutting measure implemented by the company. Effective the second quarter, which began May 2, 2020, Dell Technologies CEO, Michael Dell, forfeited his base pay, estimated to be approximately $950,000 per year.

Dell and his wife also have donated $100 million to coronavirus relief.

Take Aways from Dell Pauses Employee Benefits to Cut Costs

Dell is just the latest of many white-collar companies that have faced decreased revenue thanks to the COVID-19 pandemic. As a result, Dell employees must make some sacrifices to keep the company in good financial standing.

If your company has not been affected yet, be prepared financially. Likely before this pandemic is over, your company (and your pay) will be affected. Take the time now to make your budget leaner. Also, now is a good time to forego unnecessary spending and funnel more money to your emergency fund.

As a nation, as a world, we will pass through this time of difficulty, but it likely won’t be as soon as we would like.

4 More Ways to Save on Medical Bills

May 18, 2020 By MelissaB Leave a Comment

Previously, we talked about four ways to save on medical bills. Most of those techniques involved ways to delay or forego medical expenditures. However, sometimes medical care is necessary, and in the case of a major injury or mental health crisis, the amount you spend on medical care can be large and sudden. When faced with large medical bills, you may feel discouraged and overwhelmed, but there are still 4 more ways to save on medical bills.

Offer to Pay Cash for a Discount

If your large medical expense is not the result of an emergency that requires immediate attention, you may be able to offer to pay cash for the procedure in exchange for a discount.

When a woman is planning to have a baby at a certain hospital or birthing center, she can often negotiate for this type of discount, for instance. By paying cash, she saves the hospital the trouble of going back and forth with insurance. Therefore, the hospital may gladly give a discount.

Negotiate with the Provider

Another option is to negotiate with the provider. Julie’s insurance didn’t cover psychologist appointments, so when her son needed therapy, she negotiated with the provider. While the rate to see a more experienced psychologist was $125 per hour, she was offered the chance to have her son see an intern for $50 per hour. The intern was supervised by one of the experienced psychologists. This helped Julie feel comfortable going this route.

Create a Payment Plan with the Provider

4 More Ways to Save on Medical Bills — Photo by H Shaw on Unsplash

If you are facing medical bills in the thousands or tens of thousands of dollars, make sure to not only negotiate with the provider, but also to ask to go on a payment plan. When my children had orthodontic work done, I paid a down payment and then took advantage of the orthodontist’s payment plan. I paid the same amount for 18 months, and the orthodontist charged me no interest.

Hospitals and other medical providers may offer you a similar type of payment plan. Many will provide these payment plans free of interest, while others do charge some interest. Make sure to get your payment plan in writing. If your financial situation changes, contact the medical provider so the arrangement can remain in good faith.

Seek Assistance

If you or a loved one is facing long-term medical expenses, research, research, research. You may find organizations that can help you pay for the services you need.

One of our children was diagnosed with high functioning autism a year ago. We have literally paid thousands of dollars out of pocket for services. However, even after spending that much money and seriously straining our budget, there were services like occupational and speech therapy that we could not afford. A friend told us about an organization that helps families like ours. We went through a lengthy application process and were approved. Now our child is receiving speech and occupational therapy at no charge to us.

Similarly, a family friend’s husband had a catastrophic stroke from which he’ll never recover. She found an organization that will help her pay for her husband’s long-term care. This is something she desperately needed because her husband will be institutionalized for the rest of his life.

High medical bills can be overwhelming. However, there are 4 more ways to save on medical bills that you can use to get the help you need and to reduce the amount that you need to pay.

Have you faced high medical bills? If so, what strategies did you use to remain financially solvent while paying your medical bill obligations?

Why We’ve Decided Not to Throw Extra Money at Our Debt Now

May 11, 2020 By MelissaB 1 Comment

Going into debt is a bit like gaining weight. It’s much easier to go into debt than to get out. But, when you’ve finally decided you want to break the debt cycle and live debt free, it takes a lot of time and effort, much more effort than it took to go into debt. Likewise, when you decide you want to be fit and healthy, you have to work much harder than you did to gain weight. With either situation, when you decide you want to make a healthier change, you want it to happen.right.now! That’s why so many people who want to be debt free decide to save only a $1,000 emergency fund and put the rest of their money on debt. We’ve tried that before, but there are several reasons why we’ve decided not to throw extra money at our debt now.

Get Off the Debt Repayment Roller Coaster

Why We've Decided Not to Throw Our Extra Money at Debt Now — Photo by Matt Bowden on Unsplash

With COVID-19, we’re living in unstable times. But honestly, even before the virus, a $1,000 emergency fund was never enough. My husband and I have been in debt most of our lives.

When we were first married, we had student loan debt, car loan debt, and credit card debt from our time in college. We followed financial gurus who said have a $1,000 emergency fund and put the rest of the money on debt.

Some months, we had phenomenal success and paid down a significant amount of our debt. But other months, because we were living so close to the edge with only a $1,000 emergency fund, we’d have the unexpected happen such as a $2,500 car repair. Our emergency fund would be wiped out, plus we’d go back into debt to finish paying for the unexpected.

Going back into debt a few thousand dollars when we were trying to pay down debt was depressing. Plus, we’d have to pause our debt repayment and start back over to rebuild the emergency fund.

We paid off the credit cards eventually, but a few years ago, we went back into credit card debt when three things happened one summer—our HVAC system died, our house had mold and had to be remediated, and our child had a medical issue that wasn’t completely covered by insurance.

Since then, we’ve been working to build a more substantial emergency fund AND pay down debt. No more debt repayment roller coaster for me. This time I vowed when we paid down our debt, it would stay gone. But for that to happen, we needed a bigger emergency fund.

The Economy Is Too Uncertain

Now that COVID-19 has hit, we’re not paying any extra on our debt. We’re funneling all of our extra money to our emergency fund with the goal of hitting a 6-month emergency fund.

Why?

No one knows for sure what the economic impact of this virus will be. I want to make sure my family has enough cushion to survive. That means creating an ample emergency fund.

Prepare for Potential Job Loss

We’ve been lucky that my husband hasn’t lost his job. He’s in the higher education field, which is being hit especially hard by this pandemic. He has to furlough for 39 days this upcoming year, which means we will essentially be losing two months of pay in the next 12 months. However, we’re grateful that he still has a job.

But what will happen next year?

There is a very real possibility his job could be in jeopardy next year, depending on how badly this year goes. We want to be prepared. Sure, it would be nice if we could get our debt load down, but right now, we’re just focusing on piling cash in the bank. We want an ample security net.

Much of the country is in the same predicament. If you work for or own a small business, how long can the business hold out? We’re already seeing some small businesses closing permanently, which means all of those employees will be looking for jobs.

I don’t want to advocate irresponsibility, but if you’ve lost your job and aren’t able to get a new one, you can always negotiate with your creditors or worst-case scenario, not pay your bills. However, if you don’t have money in the bank, you’re left without resources. Having a savings account in this situation always comes first.

Only Pay Down Debt After a 6 Month Emergency Fund Is Established

If you pause paying down your debt and only pay your minimum payments due, you can always change your plan later and pay more on your debts in a few months. That’s one of the major reasons why we’ve decided not to throw extra money at our debt now.

We’re going to save, and save, and save. If we, as a country, as a world, ride out this virus and it is no longer a threat, things can change. Let’s say my husband and I do save a six-month emergency fund. If, in another year or two, his job is stable, and the world is back to normal, we can change gears. Maybe we take three months’ worth of our emergency fund and throw it on our debt to pay it off. We can do that.

Final Thoughts

Though you may want to be debt free or carry a lower debt load, there are several good reasons to pause that goal. The main reason why we’ve decided not to throw extra money at our debt now is because having money in the bank is priceless, especially in the age of a pandemic.

We can later decide to take some of that large emergency fund and put the money on our debt. However, if we pay down our debt and stay with a $1,000 emergency fund, we’re extremely vulnerable financially to what may happen in the upcoming months. We intend to protect ourselves as well as we can from economic instability by saving as much as we can. There will be time later to aggressively pay down debt. We don’t believe now is that time.