There are a lot of things in the news these days, which you are no doubt aware of, but my budget and I are necessarily paying close attention to them, because none of them look like they
will mean that we will be paying less in the future.
First, these are the percentage increases, approved by the state Department of Financial Services, for health insurers for 2020 — a 6.3% increase for the Rochester-based Excellus, a 6.8% increase for MVP, based in Schenectady, and a 15% increase for United Health Care of New York. I have already booked that one into my budget for 2020.
On that same subject of health care costs, there is once again a bill in the New York State Legislature to establish a single-payer health insurance system in New York, which would require New Yorkers to give up any private health insurance and become part of the system. It is not scheduled for a vote this year, but the last time I did some research on a prior bill, it was reported by the Wall Street Journal that it would require $139 billion of state tax funding in 2022 — 156% more than the total projected tax revenue for that year. It does provide for an increase in capital gains taxes and a new payroll tax, so it will cost some of us more, which is not a surprise, and it is not clear that everyone’s health insurance costs will decrease. The arguments pro and con sound like those at the national level, so I am staying tuned.
Second, speaking of New York State, it seems that every day I am reading about some new program that is going to cost billions of dollars. This is not a political statement, it is a personal finance statement, because what I don’t hear along with those announcements is that we can afford this — because overall tax revenues are increasing, and/or, we have saved these billions of dollars because we have cut out this or that program, which has not worked. As a result, my budget and I are expecting to have to pay more taxes. Better to hope for the best, but plan for the worst.
Third, RG&E and NYSEG have filed requests with the New York State Public Service Commission to raise rates in 2020. NYSEG customers would see a 23.7 % increase for electrical delivery. This means the average customer would owe $10.17 more each month. RG&E is asking for a 5.4% rate increase for electrical delivery and 4% for natural gas delivery. I don’t know whether these rates will be approved, in whole, in part, or not at all, but we do know that recently our Monroe County water rates were increased, and it is seems more and more likely that it is just a question of time before our gas and electric rates will also increase. Take that, budget!
Fourth, we have talked about tariffs and the “trade war” with China in this column. But now it looks like that war is escalating and destined to last for much longer than everyone was hoping for. As a result, it is hard to believe that consumer prices on more goods will not increase even more. The Associated Press recently reported that the total of the existing and proposed tariffs could cost U.S. households over $1,000 per year on average. Then, as of this writing, it looks like there may be some new tariffs going into effect on certain European goods, so we may be fighting on two fronts. Take that, budget!
Last, the uncertainty because of these tariff wars and an overall slowdown in the global economy are causing the stock market to “rollercoaster.” I don’t know about you, but I have whiplash, even though I try not to listen every day, but it is impossible, because even NPR gives me the market news at least every hour. This could have a negative effect on the income stream for many retired Americans.
Of course, these are just the things that my budget and I are watching and planning for. For others, things like increasing child care and housing costs are also real budget issues.
On a different and final subject, although we have talked so much about college costs and student loan debt in this column, these problems are not getting better. Most college students are back to school this week, so I hope that every one of them has gone back to school with a Realistic Budget that they can stick to, which has limits on things like monthly entertainment and food. In addition, I hope that they are motivated to take advantage of free offerings on or off campus, and that they are determined to do some comparative shopping and find the best prices for things they will need to purchase.
If there is any doubt, it’s not too late to send them to mpnnow.com, search Ninfo, to read the columns on saving money at college, posted on August 21, 2016 (Students Can Plug Up Some Money Drains) and Sept. 2, 2018 (More Ways to Save Money at College), or you could photocopy and send them to them. It can’t hurt!
I also hope that they have gone off determined to graduate on time for whatever program they are enrolled in. In addition, if they have a credit card “for emergencies,” I hope that it is clear to everyone exactly what constitutes an emergency.
Last, I hope that if they are incurring student loan debt, they have researched the range of salaries for the first five years for the career they are working towards, and that they are making sure that their monthly student loan payment, when they graduate, will not be more than 10% to 15% of their estimated monthly salary.
They can have a wonderful but smart college experience without unnecessary debt, but it takes some focus in today’s culture.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo.