Wells Fargo - Beyond Today Blog

Rebounding from a financial setback

2013-05-20T14:00:00Z

Is there a silver lining to divorce? Maybe. According to a study from financial consulting firm Spectrem Group, 62% of high-income divorced women say they've financially benefited from the split - not from a large settlement (though I'm sure that's often the case) but because they've had to educate themselves about their finances, and take more control.

Unfortunately, that sort of education doesn't happen automatically - or overnight. Jenny says her divorce left her financially insecure because she had an expectation that she would be married forever - and that, during that time, her successful husband would take care of her financially. That didn't pan out, and she was left to rebuild. If you're in the same boat - or want to simply get a better grip on your finances so that you can participate more fully in your own financial life - what steps can you take?

Start educating yourself. Do it slowly, if it scares you. Pick one thing to target each month: This month, you'll call your utility bills and ask them to cut you a better deal. Next, you'll go over your credit card statements. By the end of the year, you'll be reading up on your investments and rebalancing. Think that's not likely? Women are actually fantastic investors - (a study from Ledbury Research has shown) better than men - because our inclination to buy and hold means we don't lose as much to commissions and fees. Our tendency to research the heck out of anything we want to purchase also helps when it comes to stocks and mutual funds.
Find someone to hold your hand. At least in the beginning, it pays to have an advisor. That could be a knowledgeable friend or family member, but even better, it can be a professional -- a financial advisor who can look over your situation and give you specific steps you need to take to get and stay on track. This support system will give you more confidence as you move forward, particularly as you go through the process of submerging yourself in your finances.
Accept mistakes. You will make them and that is okay - this is a marathon, not a sprint. The ultimate goal is a comfortable retirement - and, sure, maybe a vacation here and there - and a long time horizon bakes in the ability to recover from missteps. So if you realize that you've been paying $50 too much for your cell phone bill, or you overdraw an account, pick yourself up and move on. But first, recognize it as a learning experience. You'll never forget to read your bills or check your account balance again.
Look ahead. Everyone, not just women, should have some financial autonomy in his or her relationship. This is something that Jenny did right - she had her own, separate account, with money she was bringing in. Sure, it was just "play" money (her words) but she had access to money that was hers should she need it. And, as it turns out, she did.

Are you optimistic?

2013-05-15T14:00:00Z

Our first quarter 2013 Wells Fargo/ Gallup investor/ Retirement optimism index made a BIG jump from November 2012. Optimism is rising, the index is at +31 compared to -8 in 4th quarter 2012. The optimism was much higher for non-retirees who marked a +38 on the index compared to only +7 for retirees. During first quarter the stock market was also up, with the S&P posting a 10% increase. With all this optimism, did investors dramatically change their investment strategy? No, in fact 85% of them held the course and made no changes. Only 10% increased their allocation to stocks according to their index.

I am encouraged to see 85% did not make a knee jerk reaction to the stock market's rise in first quarter. History would tell us that chasing returns doesn't always bring great results. Personally, I have never had the crystal ball to know when to buy in and out of the market so I find it better to have professional do that for me. That may be simply by buying a target date fund that has a preset asset allocation, or it could be through some type of managed account. Clearly having put some thought into the right allocation for you is critical - the approach of staying the course depends on having a good starting point.

Either way, I find myself in that 85% group - who stayed the course. How about you, are you in the optimistic camp? Did you change your allocation this last quarter?

A second chance to fly

2013-05-13T14:00:00Z

Women are more financially independent than ever before: The majority - whether single, married or partnered - are their household's primary breadwinner, according to a Prudential survey. They make up close to half of the work force, and more than half of college graduates.

But there is an older generation that may just be discovering their financial independence for the first time. Mary's mother falls into that category: Married for many years, Mary says she was part of a generation that took care of her husband and the home first. It was only later, after Mary's dad passed away, that she was able to experience financial independence, even buying her very first car at age 76.

Many people reach this point and freeze - they don't know how to manage the money and household decisions on their own after so many years spent relying on someone else. Here's how to make the transition:

Start early. A solid 90% of women will have to manage their finances solo at some point in their lives. It's a function of many factors - namely, divorce, waiting longer to marry, and the fact that women tend to outlive men. Start planning for this change in advance by putting a foot in the family finances now. That means learning all of the log-in information for online accounts, what is owed and when those bills are due, how much you save and where you save it, how much you have available for retirement, and what your insurance coverage is. Sit down and shadow your partner if he (or she!) tends to manage this side of your lives alone.

Embrace it. Mary's mother found that taking charge of her own financial life - picking out and paying for that car all on her own - was empowering. Mary says she's become a "new, dynamic woman," one who has freedom and independence. Though her father is greatly missed, it's a good feeling. You may find yourself experiencing the same thing. Take the time to enjoy your newfound freedom, and pat yourself on the back for your accomplishments.

Take advantage. Mary's mom was finally able to purchase the car she wanted after all those years. What do you want? You'll quickly find that saving for a goal and making it happen is an immense feeling of accomplishment. Pick something small and work toward it - that momentum will give you the confidence to meet larger goals in the future, like retirement.

Get help. A major life change or milestone is a good opportunity to seek advice from a financial advisor. Even just a quick check up can give you the confidence you need to move forward on your own; a more long-term relationship can help ensure that you get and stay on track with periodic check-ins.

Don't be too independent. You need a team of people on your side as you go into the later stages of life. One might be the aforementioned financial advisor, but you'll also want someone or multiple people to serve as your financial and healthcare powers of attorney. These people are designated to make decisions for you if you are unable to make them for yourself, and you'll select them as part of a comprehensive estate-planning package, which also includes your will.

Cruise Control

2013-05-08T14:00:00Z

On a recent road trip, I was enjoying the cruise control option on the car. Set the speed and enjoy the scenery. Personally , that's what I like to do with my savings plan. If I can put my savings on autopilot, I am more likely to consistently contribute and not miss a beat. Yet one of the problems with cruise control is that the speed stays the same regardless of road conditions or speed limit changes. Similarly, we know that if someone is auto enrolled into their retirement plan at 3%- that's where they are likely to stay. In fact, for 401(k) plans with auto enrollment, the average contribution rate for new hires is just over 4% . This is lower than the average deferral rate of 7.3% for plans without automatic enrollment- but the catch is that in those cases less than 40% of new hires actually participate compared to over 85% when auto enrolled.

So - first get in the plan! Then if you start out at a low savings rate, make sure you don't sit there too long. You don't want to be that car going 30 mph in a 55 mph zone!

If your 401(k) plan offers an auto increase feature, sign up. Even better than cruise control, someone else can do the driving!

When it's time to make a change

2013-05-06T14:00:00Z

We've all daydreamed about a different life. A next step, or, as some call it, a reinvention. If you were to leave the job, business or career you're currently in, what would you do? Mary says she's always known she didn't want to retire running her business - she wanted an opportunity to try something else before retirement. But when you're comfortable - when business is going well or you don't mind going to work each day - it's difficult to pull the trigger.

Her car accident, which forced her out of work for four months at the start of the recession, pulled the trigger for her. It was a wake-up call and the motivation she needed to take a leap of faith and make a change. For her, that meant selling her company. For you, it might starting a company or simply changing jobs or even careers. How do you make the transition?

Take steps, not leaps. If you're thinking about making a huge change, particularly a risky one, like going back to school or starting your own business, you may want to start off slowly. Enrolling in a degree program might not seem too hazardous, but if you think about the toll it takes on your wallet, it's definitely not a decision you want to take lightly. Make sure that the change you're making fits into your life. That might mean taking one course to dip a toe in the water. For a business, it should mean saving up a large emergency cushion, doing all your due diligence, and keeping your day job while it gets off the ground.

Do your research. Talk to colleagues and friends about your plans, check out the classifieds to see what is out there, visit online discussion boards in your new career path. Reaching out to organizations that represent the field you're joining, and even universities that have relevant degree programs can be a huge boost - even if you're not interested in taking classes, the program's web site and collateral material can be a gold mine of information. Finally, consider finding a mentor who can guide you through the change. It's okay - smart even - to ask for help.

Talk to friends and family members. Your family should be on board with your transition, because it is going to have an impact on them. Your hours may change, your family contribution may change, your salary may change. Talking to friends helps because they may be going through similar movements - or they may know others who are.

Embrace your fear. This kind of leap is scary. That apprehension is completely normal, and in fact, it can be a great motivator. Financially speaking, though, it can help to have a financial advisor who can hold your hand and run the numbers to assure you that you're financially prepared and making the right decision. As Mary says, this reassurance can mean the world.

Remember your confidence. There will be times that you might waiver - the aforementioned fear sets in. So take yourself back to when you made the decision to start this process. Go over the reasons why. You know you're making the right choice for you and your family, but it doesn't hurt to refresh your memory every once in a while.

Does America Face a Savings Emergency?

2013-05-01T14:00:00Z

At a recent conference, one speaker quipped that there are three personal topics in conversation that folks don't dare cover: money and death. Who wants to admit they don't save enough or are deep in debt or that we all are speeding toward death?

How many of us want to admit that if we have money in our accounts that is not earmarked for something specific, that it takes no time to find a good way to spend it? And, why is it that when I go into Costco or BJ's with a list of 10 things and leave with 30 things and a bill over $300? And believe it or not, it is not my daughter begging for that book or new fashion statement hat, it is all me.

If we think back to the 1950's the average American saved 10% of their income . Is it because those bulk-purchase stores did not exist or it was just harder to write all those checks than to swipe cards? Since the 1950's, the US savings rate has dropped each decade to a place where we now hover around 3%. The downturn a few years back helped folks focus on reducing personal debt but the savings rate is still woefully low.

I know I save more than my parents, and I am seeking to instill savings in the next generation, but thinking about our country as a whole - what will we do when folks without pension plans retire and don't have enough money to live their remaining years? What if their kids can't care for them? I feel the American savings rate is a much larger issue than a personal one - this continued lack of savings could impact our next generations in ways we may not realize from an inability for older people to pay for healthcare to increase homelessness. How do you see the impact?

Why you have to talk about money

2013-04-29T14:00:00Z

Money is a tricky subject for a lot of people. Many of us, like Mary, were told from an early age that it's not something you talk about among friends, even relatives. This has a domino impact down the line - recent research from the UK found that one in seven couples don't talk about money. Mary and her ex-husband were one of them. After learning from her mother that money discussions were off the table, she buried her head in the sand during marriage and assumed her husband had the situation under control, only to find out later - too late - that they were thousands of dollars in debt.

This is just one reason why it's so important to talk about money; why both parties should be involved and knowledgeable about the finances in a relationship. There are many others. This week, we discuss them:

So you can set goals together. There is nothing more satisfying than reaching a goal, except perhaps reaching it with someone you love. If money is taboo in your relationship, you won't have this pleasure. You can't talk about where you want to be in retirement, and how you'll get there, or what you need to do to save for next year's vacation. You can't work together to pay down credit card debt, or save for an emergency. Successful partnerships discuss all of these things, and more. To get the ball rolling, pour a glass of wine, make a nice dinner, and then gently ease into the conversation by sharing your own hopes and dreams about your financial future. Repeat on a regular basis - at least once a month - to check in on where you stand.

Because one partner shouldn't shoulder the entire burden. Whenever money is involved, there will be bumps in the road. The handling of the finances is stressful, no matter how much money you have. If you don't share the chore, one person will be strained (Mary's ex-husband, who was trying to care for an aging aunt, racking up debt to make it happen and then hiding his tracks) and the other will be oblivious (Mary).

Because the unexpected might happen. Even if all goes smoothly, if one partner is happy being blissfully unaware and the other satisfied shouldering the burden, you never know what the future holds. According to OppenheimerFunds, nine in ten women will be solely responsible for their finances at some point in their lives, either because they never get married, marry late, get divorced or their spouse passes away before them. Both partners should have a firm grasp on how the family's finances work - when and how bills are paid, when and how savings contributions are made, how much debt you are carrying (if any).

Finally, talking about money is important outside of your relationship. When you need to see a financial advisor, and open up your bank accounts and budget. When you have children, and want to teach them good money habits. When you want to negotiate your salary at work, or a new vehicle on the car lot, or a credit card interest rate. Practice broaching the subject at home first.

Do you need a bit of a nudge?

2013-04-24T14:00:01Z

Meir Statman, a Behavioral finance professor at Santa Clara University was recently interviewed by Money Magazine about how well Americans are doing with retirement savings. Specifically, he proposed that many of us need more than a nudge, we need a shove. We've used the nudge approach in recent years by automatically enrolling employees in 401(k) plans- often at a starting level of 3% of salary. A good start but not enough to build an adequate nest egg. The shove he proposes would be to mandate savings at a specific level such as 8%. In a culture where choice is a given- and typically not just one option but many, a mandatory requirement might sound harsh. Yet we can look to other countries such as Australia where mandatory savings rate of 9% that will be increasing to 12% over the next decade.

So are you self sufficient with no need for a nudge or a shove? If so, are you on track to replace 80% of your pre-retirement income. Or are you someone who needs a nudge or a shove? Since we don't have this type of mandate in the U.S. , you will need to make sure that you give yourself a shove to get to a savings rate above 10%. If your employer sponsored retirement plan offers a way to automatically increase your savings rate on a regular basis, you can be on the right track by simply signing up for that.

How to divide and conquer with your siblings in the care of your parents.

2013-04-22T14:00:00Z

>Many years ago, when I was a reporter at Forbes magazine, a friend of mine started having issues with her older father. His health was failing. And because her mother had died fairly young, helping him manage fell to her and her two siblings. "How are you dealing?" I remember asking her. "We've got it covered," she told me. "One of my sisters is a doctor, so she handles medical issues. My other sister is an attorney, so she handles legal issues. And I work here, so the finances fall to me."

Wow, I thought. I hope if and when the time comes for my brothers and me, we can work it out so neatly. But the fact that one's a musician and the other works in television doesn't bode well.

More families - I figure - are more like mine than like my friends. So what's the best way to work it out? After all, the goal is two-fold: Help your parent (or parents as the case may be.) And do it in a way that you don't all hate each other in the morning. A few thoughts:

It's okay for one child to lead the charge. In many families one child is the one on whom most responsibility falls. Sometimes that has to do with geographic proximity. In others, it's a matter of the closeness (or lack thereof) of the particular parent/child bonds. The key when this happens is avoiding resentment between the siblings - which can emanate both from the one giving the care (who may be overworked and overtired) or those not giving it (who may feel as if their opinions aren't counted.)

Clearing the air is key to preserving sibling bonds. Open communication is important in presenting resentments and other negative feelings from building up. You may want to consider a quarterly conference to fill each other in on what's going on, during which time the siblings not providing care should always ask what they can do to alleviate the strain. And the one providing it should specifically ask for the help they need.

Be accepting about financial contributions. By now you've figured out that being raised by the same parents doesn't have much to do with ending up on equal financial footing. You may earn about the same as your siblings but still face different financial realities thanks to the number of kids in each family, the cost of living (wherever you each reside), responsibilities for in-laws, chronic illness, and a whole host of other line items. Result: If and when your older parents need financial help you'll want to be as non-judgmental as possible about whatever your siblings say they can and can't provide.

Get yourself help if no other help is forthcoming. If it turns out that you're on your own where your parent's care is concerned, understand that this can be like having a second full time job. It will be stressful. Take care of yourself by outsourcing what you can (housekeeping, perhaps?) and taking breaks (and bringing in coverage for yourself) more than occasionally. Try to think of it this way: You won't be much good to your parent if you're falling apart yourself.

When roles reverse

2013-04-17T14:00:03Z

Caring for aging parents is not a new topic, but it is becoming a much more consistent theme of our generation. Our family is now helping care financially for our two aging mothers and soon, folks like us will be in the majority.

A USA TODAY/ABC News/Gallup poll of baby boomers finds that 41% of people who have a living parent are providing care for them through financial help, personal care or both. A study by the AARP estimates that these folks spend an average 21 hours a week helping out. Of those who are not caring for an aging parent, 37% say they expect to do so in the future. About half say they're concerned about being able to provide such care.

In our family situation, we have gas cards for both of our moms to help with at least one wildly fluctuating cost. Each of our moms lives on a fixed income and not having to deal with the see-saw of gas prices helps each live within the confines of their fixed incomes. The responsibility of other major expenses, such as needing to change a roof, a major home repair or buying a car also lands on us.

This spring, my mother will need a new car so we have already started talking about options. Beyond the financial component of this, the emotions it drives are fascinating. I remember my parents establishing boundaries and level-setting me on the cost of things growing up. Now, I am the one setting (and resetting) expectations on car options for my mom. While awkward, it is important to make restrictions known to make sure my family is not stretched beyond our means while also trying to make mom happy with her new ride. This can be a very tough balance because we want the best for our parents, but we also want to save enough so the next generation can have a college fund for their education. Becoming a parent the first time is tough, but then becoming a parent to your parent offers a new set of interesting challenges.

How are you balancing the role reversals you are facing?

Caring for parents who don't think they need to be cared for

2013-04-15T14:00:00Z

How do you help someone who doesn't feel they need to be helped? That's a question that could be asked in any number of contexts: When thinking about a close friend who desperately needs to lose some weight. When trying to get through to a colleague who isn't taking care of her health. And often when considering the needs of older parents.

It happened in my family. My grandfather was stridently independent. He had lost his wife decades earlier, never remarried, and was proud at how well he took care of himself. When things started to slip through the cracks - bills, for instance, went unopened and unpaid - he wasn't willing to discuss the matter. In fact, he was 95 before he allowed my father (his only child) into his financial life to help.

Sometimes - as in Gina's family - the care needed revolves around health more than it does around finances. It can still be a tricky dance. Here are a few suggestions for making it a little easier:

Do what you have to do to start the conversation. Sometimes this is relatively simple. You gather your siblings and make a game plan for what you need to discuss. Chart out a convenient time and launch in. But I also understand that there are some parents that don't want to play ball. And there may be some of you who feel too uncomfortable to begin. In that case, it sometimes pays to bring in a third party - not a grown child but an advisor (lawyer, accountant, etc.) that the parent trusts to facilitate. It's important that your parent gets the feeling that you're not trying to wrest control, you're trying to a) understand what their wishes are and b) make sure that nothing slips through the cracks that would make their lives more difficult than necessary.

While you're there, get the details. Or at least make a list of the details you need to nail down, so you know what has to be followed up on. These include things like locations of accounts, contact information for important individuals (again, lawyer, accountant, etc.), and making sure that all of the crucial documents - will, living will, durable power of attorney for finances, healthcare proxy - have been executed and you know where they are.

Start considering a care plan. Once it becomes clear that your parents will need some help with their care, it becomes a question of how much help - and how much cost. If this is a world unfamiliar to you, hiring a geriatric care manager to help you figure out what's needed, what you can do yourself and what you can't is often a smart move. These consultants are familiar with what's available through local, state and federal governments as well as in your area and can help you navigate. You can find one at caremanager.org. The National Association of Area Agencies on Aging also can help you locate caregiving help.

A designation of note

2013-04-10T14:00:00Z

I know everyone has experienced seeing a business card with acronyms to note a person's professional designations, and some of those you may have not been entirely sure of the meaning. One of my favorites is the CLU designation for a Chartered Life Underwriter, because it offers many avenues for cocktail humor about getting a "CLU." Not all acronyms are created equally - for humor or in the decision-making process when selecting a financial advisor.

In 2009 a group of leaders at a firm then called Wachovia Securities, brainstormed ways to best serve LGBT families. That team approached the College of Financial Planning with an idea to create a special course and designation for financial advisors called the Accredited Domestic Partnership Advisor or ADPA certification . The College opened this designation only to that firm (now Wells Fargo Advisors) for a period of time, and since has opened the designation to other advisors from other firms. In 2010, 78 FAs received the designation, 68 in 2011 and thus far in 2012 53 have already completed the certification. That shows promise and terrific growth for an important program.

The ADPA certified advisors go through special instruction addressing unique planning needs of LGBT clients and unmarried heterosexual couples. There have been numerous revisions to the curriculum since so many laws and rules continue to change across the country. Advisors must already have achieved high levels of success and training to even enter this program by being a Certified Financial PlannerTM professional or CPA or similar level of designation.

The ADPA designation is a great one to remember for nontraditional couples seeking an advisor to ensure they understand unique needs from wealth transfer to gift taxes to adoption nuances. If you are in the market for an advisor, ask if they are ADPA certified.

The planning challenges of same sex couples

2013-04-08T14:00:01Z

From a financial perspective, being half of a same sex couple is a lot like being a single person in America. There are a number of moves you need to make to protect yourself and your partner, if you have one, including:

Write a will. If you're half of a heterosexual married couple and you die, the law makes sure everything passes to your spouse. In states that recognize same sex marriage, that may also be the case. But not in other states. Your belongings - if you don't have a will - will go to your kids, parents, grandparents and other relatives. If that's your intention, fine. If it's not, you need a will that spells out who you want to get what and, if you have children, who you want to care for them. Two-thirds of American adults don't have wills (a statistic that makes me angry every time I see it). It's time for that to change.

Check titles. When same-sex couples own property together, titles are an issue. If the title, say of a house, is in one person's name and that person dies, the other partner may lose the property in a probate challenge. One way to safeguard against that is to share the ownership with a Joint Tenants with Rights of Survivorship Agreement. If this is in place the other partner will receive the house. Unfortunately, estate taxes may kick in unless the surviving partner can prove he or she contributed up to half of the fair market value of the house. If this sounds like it will be a problem for you (i.e. you haven't contributed equally or you don't have a paper trail) talk with your accountant or tax advisor pronto.

Name healthcare/finance power of attorney. What happens if you're incapacitated and unable to handle your own money or make your own healthcare decisions? If you don't have powers of attorney designating your partner - or someone else of your choosing - as the person who is allowed to do this for you, it's an unfortunate crapshoot. These forms are part of the estate planning package you typically get along with a will. Make sure if you live in more than one state that you have forms for each.

Deal with 401(k)s, IRAs and other retirement accounts. Make sure you've named the proper beneficiaries (whomever you want to inherit) retirement accounts. Since 2010, non-spouses have been allowed to roll these inherited retirement accounts into their own accounts, then receive the money over their lifetimes rather than in a lump-sum. If you're the beneficiary of someone else's account this is something to keep in mind as well.

Look for the right help. If you need help with your money, make sure you find someone who understands what you're up against. The College for Financial Planning and Wells Fargo have worked together to educate money matters in wealth planning for domestic partners. You can find a planner who is also an Accredited Domestic Partnership Advisor at the website of the College for Financial Planning.

The urge to purge. Why simplifying feels good.

2013-04-01T13:00:10Z

Here's something you may not know about me: Every morning I make my bed. This is something I've been doing long before Gretchen Rubin revealed in The Happiness Project that it's one of those small things that actually can make us happier. For me, it amounts to a clean canvas, a clutter-free canvas, and that helps me get the day off to a better start.

I thought about that while talking to Gina and while re-reading the transcript of our conversation. What is it about a bigger environment (house, apartment, closet) full of stuff that pales in comparison (at least for some people) to a smaller environment with fewer belongings? And while we're on the subject, why does it feel so good to throw things out?

In my book, it's all about control. When you have less to manage - whether we're talking about fewer rooms, fewer files (computer or paper), even fewer employees - it's easier to feel that you're managing it well. That argues for taking a little bit of time to simplify to put yourself back in the driver's seat. There are a number of people who have their own complex methodologies for how to do this. Mine is relatively simple. But I'm sharing it here in the hope that you'll pipe up with some tips of your own.

Tackle one challenge at a time. The problem with starting a cleaning/simplification project is that it can quickly take on a life of its own. You clean a closet. It feels so good you tackle your dresser. Then move to your desk. Before you realize it, the entire day is gone. Start a clock and give yourself a limited amount of time. Then come back to it the next day and tackle another chunk. Doing it this way, I've found helps me stay rational. (I've been known to get overheated in my excitement to unload.) I like approaching it with a fresh eye.

Think about things you can do that will have lasting results. My husband has taken on the challenge - and it's more of a challenge than you might expect - of getting us off unwanted catalog mailing lists. He's been using a service called Catalog Choice to help, but you can also call a few each day and ask them to remove you. The less junk that comes in, the less that has to go out. Do the same for your email inbox. If you end up on the email list of a company because you made a purchase and you don't like having to hit delete on a daily basis, unsubscribe.

Be a little loose with the rules. My friend, fashion designer Kay Unger, once explained to me that the idea that you should throw an item of clothing out if you haven't worn it for a year or two is misguided. Some things will come back, she explained. Not necessarily the questionable fashions of the 1980s, but those leather items that are so in this year? We've seen them before and we'll see them again. Ditto statement necklaces. (Kay wears some that were her mother's.) If you spent a considerable amount on it and it looks good on you, store it in a basement closet. Then pull it out again in a few years before you decide to abandon it.

Negotiating with your doctor when you can't pay a bill

2013-03-25T14:00:10Z

It's okay to negotiate with your doctor. How do I know? Dr. Nancy Snyderman told me so - and if this top notch medical reporter and physician is not an excellent source on this, I don't know who is. But this is one of those challenges for which there is no script. Here's the low-down on how to start - and succeed:

Do your research. You wouldn't buy a car or a couch without sitting down in front of the computer and figuring out what other people are paying for the same item. You shouldn't buy a pricey healthcare procedure either. Specifically, you should be paying attention to what Medicare pays. As the largest health care plan going, Medicare typically pays the lowest possible rates and undercuts other insurers significantly. Finding these prices isn't all that tough. They're on Medicare's website. Go to hospitalcompare.hhs.gov to compare hospital costs by zip code. A menu will pop up that will allow you to compare costs for physicians, home health care and other items by zip codes as well. Use these prices to begin the conversation with your doctor's office or hospital.

Comparison shop. Just as hospitals pay different insurers different prices for the same procedures, different hospitals charge their patients different prices for the same or similar line items (from anesthesia to aspirin). If you live in a place where there's a choice of facilities and your care isn't of the emergency variety, price-checking hospitals and doctors is a smart move.

Don't wait until after you're treated. You're in a better position to negotiate if you do so upfront - i.e. before you receive the services. Ask what the cost is going to be and then attempt (using the information retrieved above) to negotiate a discount. Offering to pay cash upfront or shortly thereafter is a potent sweetener and can result in an even bigger discount.

Ask if a lower priced solution is available. Is the procedure you're about to have available as an outpatient rather than in a hospital? Are there other tests or treatments you could have that could accomplish the same result? Whether you're being prescribed medication or something more complicated, asking these questions can help you save.

Ask for a payment plan. Even if a discount isn't forthcoming (or a discount as large as you'd like) you can make it easier for yourself to deal with medical bills by asking for a payment plan. As Gina learned, doctors (and hospitals) agree to these all the time.