'Tis the season for medical bills. Here's how to prepare.
And more of the week's best financial advice
Here are three of the week's top pieces of financial advice, gathered from around the web:
It's the season for medical bills"Medical expenses are a burden whenever they hit, but a recent study found they're most common around this time of year," said Sarah Skidmore Sell at the Associated Press. One in six families makes a major medical payment in any given year, most occurring in the first few months, according to the JPMorgan Chase Institute. The average payment is $1,143, and it takes most households "more than a year to recover from the hit." To help cover costs, set up an emergency savings fund. "Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency." Make sure to read any bills you receive carefully — about half of medical bills contain errors, so you might be paying for treatments and services you didn't receive.
Switching to a single incomeAre you or your partner "dreaming of the day when you can stay home with the kids?" asked Maryalene LaPonsie at US News. If so, plan your finances carefully before making "the leap from being a dual-income to a single-income household." Couples should focus on paying off as much debt as possible before the transition, especially car loans and credit cards. "A mortgage may be worth keeping since current rates are so low and interest can be deducted on itemized returns." Retirement plans also need to be addressed, because even a nonworking spouse should be saving money for the future. Look into opening a spousal IRA for the nonworking partner. And before anyone quits a job, "sit down and create a realistic budget."
Where's my auto 401(k)?Automatically enrolling workers in company-backed 401(k) plans has been hailed as an effective way to get more Americans saving for retirement, said Dan Kadlec at Money. But so far, few workers have access to these schemes. The problem lies with the nation's small businesses, which employ about half of U.S. workers. Just 33 percent of companies with 25 to 49 workers, and 20 percent of firms with 10 to 24 employees, offer 401(k)-type plans, according to the U.S. Census Bureau. In contrast, 93 percent of companies with 10,000-plus employees offer these plans. What's more, only 12.1 percent of firms with fewer than 500 workers offer auto-enrollment 401(k) plans. "If we're counting on auto enrollment to solve the retirement savings crisis, we should probably find a way to hook in more small businesses."