Skimm Money: BNPL, Health Insurance, And Student Loan Forgiveness

Eyes On

Buy Now, Pay Later

BNPL allows shoppers to split up the cost of a purchase into smaller payments. Klarna, Affirm, and Afterpay are just a few providers you may have seen on some of your fave retailers’ sites at checkout. The plans often come interest-free and without a hard credit pull, making them popular among millennials and Gen Zers. But while BNPL can make a high-priced item more accessible (hi, new MacBook), it’s still a short-term loan. So if you opt into BNPL, do it responsibly.

Your move:

• Assess your wants vs. needs. Make sure you know the difference and create a plan to pay off your BNPL purchases on time and in full. Hint: Adjust your monthly budget to make room for payments.

• Read the fine print. Some BNPL plans don’t charge interest. But they might charge late fees. Know the terms of your loan — especially when payments are due — to avoid paying more than you owe.

• Pay on time. According to a recent LendingTree survey, 42% of BNPL borrowers report making at least one late payment. Which can lead to fees (see above), making it harder to stay out of debt. 

• Consider your credit report. BNPL purchases aren’t included on your credit report RN. But the major credit bureaus want to change that. So missed payments could impact your ability to get a loan, like a mortgage, in the future.

Financial Goal Unlocked

The goal: Choose the right employer-sponsored health insurance plan.

A winning mindset:Picking the right health insurance plan can be a struggle, even if you're choosing one provided by your 9-to-5.Healthcare lingo can be confusing, and you typically only have a few weeks to get it all figured out. We Skimm’d what you need to know to make an informed decision for your health and your wallet. 

A winning strategy…

• Learn the lingo. There’s a lot of jargon when it comes to navigating your health insurance options. Here are the most common terms you need to know to pick the right plan for you.

• Consider your cal. If you go to the doctor a lot, you might want a plan with a low deductible (hint: the amount you have to pay before your insurance kicks in to help you out). If you rarely need to see a doctor, high deductible plans (aka HDHPs) usually come with lower monthly premiums which can save you $$$.

• Know your options. Different plans = different doctors and hospitals available to you. There are four main types: HMO, PPO, POS, and EPO. Here’s everything you need to know about them.

• Prep to pay. Your health insurance plan isn’t the only way to cover medical-related costs. If you have an HDHP, you may be eligible to save money in a tax-advantaged health savings account (HSA). Psst…there are also flexible spending accounts (FSAs).

• Look ahead. Planning to get married or grow your family soon? These are considered “life-changing events,” meaning you can change your plan. Note: Adding dependents can cause your premium to go up, so be ready for that. For babies, make sure that your plan covers everything you’ll need for prenatal, birth, and newborn care.

• Ask questions. If you have Qs about your options, contact your company’s HR team or your benefits provider ASAP to get As. 

theSkimm: An employer-sponsored health insurance plan is a major benefit. Picking the right one can help keep your healthcare costs as low as possible while also making sure you can get the care you need.

And Also…This

What’s going to cost a wing and a leg this year…

Thanksgiving dinner. The cost of the holiday meal will cost 20% more than it did last year, according to the American Farm Bureau Federation. But there’s a silver lining: Earlier this month, Aldi and Walmart announced that they’re offering discounts on many Thanksgiving items. Last-minute grocery runs for the win.

What’s in limbo…

Student loan forgiveness. Last week, a federal judge in Texas ruled the program a “complete usurpation” by the executive branch. The White House is appealing the decision, but resolving this could take a while. Meanwhile, student loan repayment is set to resume on January 1, 2023. Tweaks budget.

What has a surprisingly big price tag…

A tiny house. Airbnb’s co-founder is launching a new venture to add a tiny house to your backyard. The logic: It could solve the affordable housing crisis, and renting it out could give you extra spending money, like (ahem) Airbnb. But it won’t be cheap. A 430-square-foot unit starts at $289,000.

Where Gen Z prefers to shop…

Social media. A recent study by Deloitte found that 60% of Gen Zers plan to do their holiday shopping on apps like TikTok and Instagram. They might be onto something…scrolling and adding to cart > standing in line at the mall.

Tell Us How You Really Feel: Many of you told us that you applied for student loan forgiveness. So we want to know: How are you feeling about the block? Were you counting on student loan forgiveness? Tell us here. 

Last week, we asked you to share your personal finance book recs, and you delivered. Here are just a few we’re adding to our TBR pile… 

“‘The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke.’ It’s an amazingly insightful book by Elizabeth Warren and her daughter on how Americans are so accustomed to having both partners working that when one loses a job, their household spending is too high to cover on one income alone. Based off this book, my husband and I have committed to keeping our monthly ‘needs’ affordable enough to cover on either income, just to be safe.” — Claire B, Rocky Mount, NC

“‘Clever Girl Finance: Learn How Investing Works, Grow Your Money’ by Bola Sokunbi. As a woman who never grew up around transparent conversations about money and finance, it was a great way to segue into the finance world from someone who shared that experience and could break down concepts and explain things in a meaningful but impactful way.” — Bree D, Los Angeles, CA

“‘Get a Financial Life: Personal Finance in Your Twenties and Thirties’ by Beth Kobliner. This book includes everything you need to get organized and even ahead of the curve on your finances and investments. The chapters are easy to understand and even have a summary section at the end of each if you need a skim. Highly recommend.” — Victoria W, Knoxville, TN

Answers have been edited for length and clarity.