Chris Treftlin – Shine at Home

Everywhere we turn prices are going up, and up, and up.  Over the next few editions of this series, I will be offering tips and strategies to help you save some money on your living expenses.

Let’s talk about Margaret.  She is 62.  All her friends and neighbors love her.  She has a couple of grandchildren, and she just lost her husband after a valiant fight with cancer.

 Here is Margaret’s reality. – Truth Bomb – income is $36,400 per year. (1)

 Her rent is $1,881 per month, or $22,572 per year.  Her phone, internet, and cable bundle comes in at $140.00 per month, or $1,680 per year.  She still drives so add insurance, fuel, and maintenance costs of $450 to $550 per month, or $5,500 to $6,600 per year.  Groceries for her run between $300 and $400 per month, or $3,600 to $4,800 per year. 

Medications are a different concern.  Without insurance coverage this can be an unmanageable expense.  For our purposes we will say that Margaret has minimal coverage.

So, you can see that Margaret is not making it.  She is not covering her expenses.  Some months she is ok, while others are very difficult.   This is too tight.  One may be satisfied with this expense and income situation by covering short falls with lines of credit or worse credit cards.  You shouldn’t be, and here’s why.  One thing goes up.  An important situation presents itself.  An emergency, and unforeseen circumstance and you are suddenly under water.  And that is exactly what is happening to people right now with the cost of fuel.  With the 15% to 20% price of gas increase Margaret’s budget goes deeper into the red.  Margaret simply cannot afford another 15% to 20%, nor can anyone else.

As I said earlier, we will attack these expenses and income numbers one line at a time over the next few articles and I will prove that a senior can make it financially, even in these challenging times.

Let’s go after the medication expense.  At 65 the Ontario Drug Benefit kicks in and she would have most of these expenses covered, but Margaret is 62 with a very average insurance plan.  Here is where she can see some significant savings on prescription drugs.  The Ontario Trillium Benefit may cover two-thirds (2/3) of the out-of-pocket costs for prescription drugs for Margarert under the following criteria.

Here’s how it works.  Go to the Ontario government link below:

Get help with high prescription drug costs | ontario.ca ,

 Or go to the local Service Ontario location.

Apply for the benefit and give yourself time for approval as there are reports that the process can be a little drawn out.  Be patient as the results are worth it.  In our scenario Margret pays $4,320 dollars a year out of pocket.  She managers her Type 2 Diabetes with two medications, her mild high blood pressure with one prescribe drug, and some high cholesterol.  All these issues are hereditary.

With her income at $36,400 her medication takes up almost 12% of her total income.  After she was approved for the Trillium Benefit, she pays her pharmacy the out of pocket upfront and submits her receipts every quarter.  After processing Margaret gets back the difference between the out-of-pocket expense and 4% of her income paid quarterly.  So, Margaret goes from paying 12% of her income to 4% of her income, or a two-thirds savings.

In real dollars that is a $2,864 dollar a year savings.  Which is a $238 dollar a month savings. 

So, in this scenario we have taken Margaret from a -$248 a with shortfall to -$10 shortfall just on the cost of medication. 

In future articles we are going to get our dear Margaret into a much, much better position through creative opportunities and options, by not settling for the status quo, and by using the courage we all have take on the issues that challenge us.

Looking forward to sharing with you.

1. Source – Wealthnorth.ca & fidelity.ca

Disclaimer – This information is for discussion purposes only and does not represent a guarantee of outcomes.  They reflect the knowledge and experience of the author and his best prediction of results based on known facts, programs, and strategies.  Individual findings may differ materially.