Monthly Archives: October 2019

How Much is the NJ Health Insurance Penalty?

Although there are no longer Obamacare penalties at the Federal level starting 2019, the State of New Jersey has implemented its own penalties for 2019. What are some of the requirements, exemptions, and penalties regarding this new law?

Requirements: The law requires you to have minimum essential health coverage or qualify for an exemption of coverage. If you do not have coverage or qualify for an exemption, then you will incur a shared responsibility payment when you file your 2019 New Jersey tax return next year.

Exemptions: There is a list of over 20 exemptions, and some of them are as follows: income related, such as marketplace affordability and income below filing thresholds, gaps in coverage of less than two consecutive months, hardships, and group memberships, such as being a part of a health care sharing ministry.

Penalties: The minimum penalty is the greater of 2.5% of your household income or $695 for an individual taxpayer. This increases to a maximum of $15,060 for a family of two adults and three dependents with a household income greater than $400,001.

The penalties are steep so make sure that you are properly covered or are able to receive an exemption to the penalties. For those who are looking for non-traditional coverage options, health care sharing ministries such as Solidarity HealthShare or Christian Healthcare Ministries may prove to be good, low-cost options. However, make sure to perform your due diligence to make sure that these can be the right fit for you.

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The 3 Pillars

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A business has many moving parts that must all be coordinated to ensure smooth and profitable operations. Usually, there are aspects of a business that are either completely ignored or not given the time, energy and focus that they need. These moving parts can be broken down into 3 major areas: operations, marketing, and financial.

Operations: Most businesses focus all of their time and energy on the operations of their business, and with good reason. Without operations there would be no business. Aspects of operations that are usually overlooked are: developing and managing employees, delegation, scheduling, and technology. It’s easy to get lost in all of the details of delivering your product and service that improvements to your business get pushed aside for the sake of just getting through the day.

Marketing: Marketing is the promotion of your business and is the key to growth opportunities. This can include old-fashioned networking, social media and Internet marketing, and many other forms of getting the word out. There are even indirect ways of marketing your product or service based upon visual interactions and use of technology.

Financial: Financial matters are like a middle child that tends to get ignored. Anecdotally, I have yet to see a business that does not have either cash flow problems or tax issues if they ignore their finances. Practically speaking this is the least interesting aspect of running a business, which is probably why it is ignored. However, operations, marketing and financial are all thoroughly intertwined, and if you ignore the financial aspect of your business then it will negatively impact all of the others.

These three pillars create the foundation of a business, and by strengthening them you will create lasting success.

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What If Your Spouse Is Reckless with Money?

Did you take a financial compatibility test before you got married to your spouse? I am sure the answer is no and even if you did, people and circumstances can change over time. If one spouse is more cautious with spending and one is reckless, then this will not only cause tension, but the financially reckless spouse will most likely hurt or greatly strain your finances. It can also be a huge source of marital tensions. What should you do if you find yourself in this situation?

Here are some approaches, from rational, gentle approaches, to tougher, harder approaches, along with observations:

Communicate and work together: Hopefully, the remedy to your situation is as easy as communicating with each other to make sure that you are on the same page financially. If your finances are steadily strengthening, debts are decreasing or paid off, savings rates are sufficient, and charitable giving is charitable, then it doesn’t really matter if your spending seems reckless. However, when your income is growing and you are still struggling to pay for ordinary expenses, then it is time to have a talk. Both spouses should be aware of financial matters, savings goals, and limitations on spending. One can hope that this will solve the problem, but if not, then try again or move on to another approach.

Take charge and prioritize cash outflows: First, the more financially responsible spouse should be in charge of financial matters, including saving and paying bills. Next, the order of financial priorities needs to change, including saving first, preferably automatically, then paying bills and debts. This will cover your basic financial needs.

Cut off access: If the previous approaches still do not work, then you have to cut-off or greatly restrict access to funds and credit. I know, this sounds harsh and controlling, but it is not. If someone had a gambling addiction then you would do the same or you will find yourself homeless, which is not an exaggeration. Spending addictions are similar and you need to protect yourself and your family. If you are at this point then your spouse has issues with spending money.

Outside support: Financial decisions, views, and habits are very much driven by our emotions, our past experiences, and our attitudes about money. If you truly have a spending addiction, then seek the support and help of a professional that is experienced with these matters. I am not a psychologist or therapist, but anecdotally, it appears that reckless spending stems from several causes: seeking happiness by purchasing things (which is short-lived, possibly for mere minutes), the attitude that you deserve “things” (this is kind of related to the first cause), you do not care or think about finances (adults need to behave like adults), and lastly, you are just trying to sabotage your situation (it could be to get back at your spouse or because you do not feel you deserve financial security – again, seek therapy).

This can also happen with a business partner if you put them in place of the word spouse. It just won’t work.

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