And on the 13th day of Christmas, returning those golden rings and partridges ....

Tis the season for rampant consumerism -- and with it, the joys of battling the Retail Industrial Complex. You may have noticed a spate of stories in the newspapers lately about "return fraud," the "growing" problem of retailers suffering losses through returns of stolen or used merchandise. While I don't have the expertise to opine about the magnitude of the problem, it's clear that increasingly sophisticated software options for tracking retail logistics means merchants with modernized systems are keeping better track of who is bringing items back, and how often.

The retail industry trade/lobbying group, the National Retail Federation, kicked off the season with a press release saying retailers will take a $3.5 billion hit during the holidays from return fraud (or, as the release calls it "this immoral, and often illegal, practice." But tell us how you really feel, NRF! Don't hold back!) . Like all loss estimates bandied about by organizations with a vested interest, that one should be taken with a grain of salt. The release also pulls out the eye-popping figure that 8.8 percent of holiday gifts are expected to be returned -- but then, it notes that typical return rates are 7.3 percent. A 1.5 percent jump post-holidays is lower than I'd anticipated, actually.

The NRF is also offering up a list of tips for "stress-free returns," with suggestions like "ask for a gift receipt" and "investigate return policies before you buy." Or you can save the retail hassle and go the regifting (or ebay -- I'll bet *their* sales have a big post-holiday spike) route.

The return-fraud flap may simply be the industry's way of grabbing cover for tightened return restrictions, but I do have sympathy for those dealing with impressively organized shoplifting rings. Speaking of eBay, CSO magazine (published by my former employer) had a fascinating article last year about how eBay is becoming the best stolen-goods fence ever created. For a more penetrating look at the return-fraud issue, go there.

Judge orders Treasury to take its money back to the drawing board

If a ruling made yesterday by a federal judge stands, we'll eventually have currency changes even more drastic than those ushered in earlier this year with the colorful bills. U.S. District Judge James Robertson ruled for the plaintiff in American Council of the Blind v. Paulson, Secretary of the Treasury, deciding that American paper currency violates the Rehabilitation Act because bills of different denominations can't be distinguished from each other by the visually impaired.

"Of the more than 180 countries that issue paper currency, only the United States prints bills that are identical in size and color in all their denominations," Robertson wrote. "More than 100 of the other issuers vary their bills in size according to denomination, and every other issuer includes at least some features that help the visually impaired."

The judge ordered officials to begin working on a remedy, but he also structured his decision to speed the inevitable appeal.

It sounds like a radical decision (and, indeed, I see some bloggers are already screaming about activist judging), but it strikes me as a sensible one. Why shouldn't we make bills easier to tell apart? There's no downside to doing so (except, I suppose, the cost of a redesign), and the benefits will be felt even beyond the visually impaired target audience. I've handed over the wrong bills to pay for things (and recieved the wrong bills back in change) when I wasn't paying close attention, and when David moved here from Australia (motto: "Our money is more colorful than a Pink Floyd laser show") the indistinguishability of American bills drove him nuts.

(By the way, thanks for all the kudos and good feedback on my op-ed yesterday. David is back in good health, so all is calm on that front.)

Birds and Bills hits the op-ed rounds

I have an op-ed in today's Baltimore Sun about my experiences with and criticisms of "consumer"-driven healthcare. Newspaper opinion pieces are like really long blog entries, done old-skool style. On paper. Crazy talk!

On overdrafts and automatic 401k deposits

My bank refunded my stolen money over the weekend, so I'm back in business. I will give my bank giant brownie points for one big customer-service selling point: No bounced-check fees. My account has a $1,000 overdraft. So long as I don't go past that $1k, my bank will process checks and debits without charging me any fees. (OK, I pay interest on the overdraft money I'm borrowing, but since I've always repaid overdrafts within days, this interest has never totaled more than a dollar.) I don't make a habit of overdrafting, but when stuff like this account hacking happens, my balance goes zooming into the red. Bounced-check fees are up a record high average of $27.40 per transaction, according to Bankrate's latest research. Not having to worry about incurring giant fees for every bounced transaction is a big relief.

In other tidbits, my company sent out a notice recently that in 2007, it will begin automatically enrolling non-participants in the 401k plan, deducting 3 percent from their paychecks for 401k contributions. (My company matches 50 percent of employees' contributions, up to 6 percent -- so, it'll effectively contribute 3 percent of your pay.) Those automatically enrolled can still opt out of contributing, but they'll need to file paperwork with JP Morgan confirming that they don't want to make 401k contributions.

I think this is a great move. I'm already contributing, so it won't affect me, but studies and anecdotal evidence consistently show that a number of people don't participate in 401ks not because they've thought through the decision and intentionally chosen to abstain, but simply because it's One More Thing to deal with. A recent Hewitt Associates study found that automatic enrollment boosts 401k participation rates from 68 percent to 90 percent. If companies didn't offer an opt-out option, I'd object, but since they do, I think it's a smart step to give people that extra nudge toward participation. I imagine automatic enrollment will be a growing trend.

Notaries and police reports -- the continuing joys of identity theft

My cheer that the thieves didn't entirely clean out my checking account proved premature. Another $700 went on Saturday -- after the card was supposedly cancelled. Arugh. The transactions seem to have come from an ATM in Quezon City. Fabulous.

I filed a police report, though I felt almost guilty adding to the NYPD workload with a crime they're not going to be able to do anything to solve. Financial identity-theft crimes are skyrocketing. While I waited to fill out the report, I chatted with a lady who was there to report a similar situation: someone had opened a DirecTV account in her name, and clearly had access to her Social Security number and other personal details. The detective who took my report said I was the seventh or eighth person that day reporting this type of crime.

It feels like the most effective way to stem crimes like the ATM scheme that keeps nailing me would be a national database overseen by a national agency, like the FBI. I'm 99% sure I got hit by a trapped ATM. If I did, then so did lots of others, but the only way to find the rogue ATM would be to cross-check the records of those hit recently. I would cheerfully turn over my bank records to an investigatory agency. (Sure, there's a risk in handing over my personal banking info -- but my account already leaks like a sieve. The chances of a bad cop stealing my info feel smaller than those of electronic thieves continuing to crack it.)

Since I doubt the police vigorously pursue these crimes, that leaves enforcement to the banks, which are the ones eating the losses. Big banks like Citibank already have the massive data access you'd need to cross-check the trails of victim -- I wonder to what extent that's already happening? The New York Times article I keep referring to about ATM fraud mentioned one crime ring that got caught after it began siphoning funds from 4,000 compromised accounts. It doesn't go into detail about how investigators cracked the case. That would be a fascinating piece ... if one has written one, I should check it out.

Once again, the most exasperating part of this process was making time to deal with all the paperwork like the police report. My bank also requires a notary to sign my dispute paperwork, so I spent an hour yesterday trudging around the Flatiron area looking for one. After stopping at two office-services shops and three banks, I finally found one available and willing. Arugh. That is my motto this week: Arugh.

Bank account hacked a-bloody-GAIN

I am some sort of lightning rod for financial identity theft.

Dedicated readers will recall my grousing last April when my American Express card got hacked and fraudulently used. I never lost the card; someone got hold of the numbers and used them. As I mentioned in April, that wasn't the first time I'd been through the theft rigmarole. It was the third -- first time with Amex, after two previous attacks on my NetBank check Visa/ATM card. Remember my oh-so-chipper post title? "At least it's less painful than having my debit card hacked."

My debit card got hacked this morning.

Logged on around 1pm to see if an expense check from my company had cleared, only to find a string of seven ATM withdrawals for $99.84 each, plus another for $19.97. None mine.

ARUGH.

I promptly called the bank to cancel, and that may have saved me a bit of money. The thieves got $718.85, but unlike the last two times this happened to my NetBank account, the account wasn't totally wiped out. The customer service person said the ATM withdrawals happened about an hour earlier, in quick succession. Seven successes, then the machine bounced the eight attempt. Maybe I got the account cancelled before the thief hit another ATM for round two.

So, tonight I'll be tromping over to my local police precinct office to file a report, and on Monday I have to tromp around near my office looking for a notary to sign my dispute forms to send my bank so they'll refund my money. Meanwhile, I have virtually no cash until NetBank gets my replacement card to me. Such fun this is.

This new attack is like the first on my NetBank account, three years or so ago -- someone got hold of my card number and my PIN, and made a duplicate card. (I still have my card. It wasn't lost. And, as before, no one -- not even my spouse -- knows my PIN.) Once again, the likeliest explanation is that I used a dodgy deli ATM with trapdoor software in it, capturing the information off cards as they're used. I know I should stick with bank ATMs, especially since this has now hit me twice. The spirit is willing, the flesh is weak. Since my bank has no ATM and I pay a fee every time I use one (no back-end fees to my bank, though), I usually just go with whatever shonky ATM is closest.

Can we please crack down on this crime, stat? I suppose I'm high risk -- I probably use an unregulated deli ATM six or seven times in an average month. But still, for this ATM-trapdoor problem to hit me twice in a matter of years seems to suggest it's a problem that's getting pretty rampant, at least in big cities like NYC.

HSA update

Well, I opted for the HSA, though I almost didn't at the last minute thanks to a loophole that makes it problematic if you have my precise, fairly unusual situation.

In my earlier post I mentioned that an HSA (health savings account) is logistically similar to an FSA (flexible spending account), with the big difference that money in your HSA doesn't disappear at the end of the year. If it's unspent, you keep it. Because of that distinction, the government doesn't want people double-dipping with an HSA/FSA combo: you can't set up an HSA, also fund an FSA, and then use the FSA money to cover your expenses, leaving your HSA savings untouched. That's a sensible restriction. If you have an HSA, you can only use an FSA for things the HSA isn't allowed to cover (which seems to be dental and vision expenses, primarily).

However, here is my particular weirdness, which only becomes an issue if you are a) married, b) don't share a health insurance plan with your spouse, and c) also have relatively separate finances. (See why I said this is a loophole that may only be a problem for me?) David and I each have separate, individual insurance through our separate employers. That's always been more cost-effective for us than sharing a plan. However, when you set up an FSA, you can use your FSA to pay for medical expenses for family members, even if those family members aren't sharing your health-insurance plan. So, this past year, I put a chunk of money in my FSA and used it to pay some of his medical expenses.

Opting for the HSA means the restrictions on what I can use my FSA for (vision and dental only) apply to everyone I would spend my FSA money on (at least, so saith my HR department). But my HSA, of course, can only be spent on me. Hence: no way for me to set up tax-free savings to pay for David's medical expenses in 2007.

The sensible thing, of course, is for him to set up an FSA and put into it however much I would have put into mine. It works out exactly the same to our overall income and spending as a couple. It's just a pain in the ass. Me having the FSA was an easy way for me to contribute an agreed-on amount to the medical costs, and meant I could do all the paperwork for reimbursements and such (which I have more tolerance for than David does). Having the FSA in David's name means we need to rebalance our finances in other areas to offset the whack that will take out of his paychecks, and means he's probably going to have to deal with more of the paperwork.

For that reason, I almost ditched the HSA and stuck with my old HMO + FSA system. However, it was making me unduly cranky to face down the prospect of once again spending a fair chunk each month for insurance that didn't actually pay for almost any of the services I actually consume. (With the HSA, the insurance still won't be paying. I will, unless something unlikely happens and I go past my deductible. But I pay less for the insurance, and I go in knowing what I'll be paying for.)

This is all more about psychology than actual dollars-and-cents calculations of what will save us money. I suspect that the HMO + FSA option would in the end have only cost me a few hundred more than my current HSA scheme, which isn't really enough money to justify the hours and angst I've devoted to thinking through all this. But part of the allure of the HSA is simply that I want to experiment with it. I still have a bad feeling it's the thin end of a nasty wedge, and I don't like the way it's portrayed as an option for insuring the uninsured but is actually a big savings/tax-sheltering opportunity for the well-off. But I figure a year of seeing what the HSA plan is like will give me a firmer foundation for spouting off about them.

And now, a consumerist interlude

This week the Washington Post profiled Goozex, a used video-game swapping service that aims to fetch gamers better value for their old games than they'd get selling them to retail used-games shops. It sounds like a good idea (gamers, check it out), but it's also a nice illustration of what I'm coming to think of as the yuppie subscription economy. (OK, I know "yuppies" is hopelessly '80s. What are we now? And if anyone suggests bobos, I break out the knives.)

I love the concept of libraries but am a poor user of them. Books are kind of a special case for me, since I choose to buy and hoard them, but for other media, the library concept is a great one -- borrow the things you don't feel compelled to own permanently. Like others in my peer group, though, I hate media-consumption deadlines. When I massively cleaned out my bedroom the summer before I first headed off for college, I found a few books that were overdue by years.

This is why I'm among the six million people subscribing to Netflix. I suspect I come out on the wrong end of this equation financially. I have the three-DVD plan and will go months at a time without sending anything back. I'm not paying for Netflix because it's cost effective. I'm paying for Netflix so I don't have to a) accumulate DVDs I'll only watch one or twice and don't want clogging up my living room, and b) don't have to remember what I owe the video store when.

Goozex seems tailored for people who are going to go through games rapidly. You get the freedom from return dates that comes with ownership, but you also get access to an exchange network so you can keep your media supply fresh. You're paying for the perk of your extended borrowing and access to new titles (you could make do for cheaper; some libraries will loan you older, less enticing video games for free these days), but you're not paying nearly as much as you would buying everything at new, retail price.

This kind of service seems very well suited to a certain demographic (ie: mine) that immerses in media and is willing to pay for convenience -- as iTunes demonstrates. I see them popping up all over. There's BooksFree.com and GameFly, and loads of others, I imagine.

***

On a separate moneyspending note, my friend Ryan has brought his blog Just What I Wanted out of hiatus for the holiday season. It's a neat source of unusual gift ideas, many very affordably priced. And, unlike so many of the gift guides you'll start seeing in glossy mags as the Giftmas season gets going, the blog is noncommercial. Ryan spotlights the products he finds intriguing. Go benefit from his good taste :)

Considered an HSA? You will.

Picture a home insurance sales brochure offering a rundown on various coverage options. One option is described this way:

You may benefit from this plan if:
- It's hard to remember the last time your home burned down.

... and yet, this is the pitch my health insurance company, Empire Blue Cross, is using to sell its Medical Savings Plan option (better known as a "health savings account," or HSA), which the brochure cheerfully touts as a good plan if "it's hard to remember the last time you went to the doctor."

I grew up in a family that always had good health insurance. My mom had cancer. I've always considered health insurance an absolute essential, just below "housing" on my list of "things you don't go without if there is any possible option." I am willing to pay pretty much any sane amount to stay insured. I consider myself the most conservative shopper possible for health insurance.

And yet, it looks like I'm about to wade into the big experiment known as HSAs -- ie, the preferred health-care option endorsed by Bush and rammed through Congress by fiscal conservatives as part of the recent Medicare bill. I am fairly boggled by this turn of events; I'd previously seen a few articles on HSAs (most notably in the Washington Post, which had a good feature on their risks and mixed benefits) and taken little notice, writing them off as something not applicable to me. Ha ha ha. If the health-care plan options for this year handed to me by my (large-ish) company are any indication, HSAs are going be applicable to everyone, pretty soon.

When you see HSAs mentioned in the media, the quick summary tends to be "minimal insurance in exchange for lower monthly carrying costs, with consumers responsible for higher deductibles and a bigger share of the costs of medical services they consume." The administration hails this as a way to address the crisis of skyrocketing health-care costs: if consumers bear more responsibility for saving for and paying the direct costs of their medical care, they'll become savvier consumers, the argument goes.

The big, oft-mentioned fallacy in this argument is that the health-care system isn't designed for a la carte shopping. Even if you're fortunate enough to be able to plan an expenditure in advance (hardly an option when you're in crisis and racing to the nearest hospital), providers are rarely set up to offer quotes. Good luck trying to find out in advance what a surgery will cost, what with all the many procedures and charges that get wrapped into the final bill. And then there's the biggest stumbling block: Insurers negotiate discount rates. The uninsured don't have access to those lower rates. One standing appointment David has costs us $80, after our insurer's negotiated discount. It would be $150 without the insurer rate. Same thing with a medication we have a standing prescription for. The "rack" rate is around $80; our insurer pays $10. This is a very consumer-unfriendly playing field.

But when I looked at the particular HSA plan being offered by my company, the reality turned out to be very different than what I'd expected. This isn't a "bare-bones coverage in return for higher consumer risk" plan. It's a tax dodge for the well-off, and (I suspect) a step toward softening resistance toward a fully "pay your own way" approach to medical services, akin to what happened when 401k supplanted pensions. The stomach-curdling, politically frustrating aspect of this, for me: Under this calculus, I'm well-off. This is a tax dodge that probably helps me -- and if the tax dodge weren't enough to get me to switch, my insurer (hi, Blue Cross) is breaking out the carrots and sticks to make the HSA plan more attractive than their other options.

The way HSAs work is that you pay a much lower monthly rate in exchange for carrying a high deductible (my HSA plan would cost $37 a month, less than half my HMO option and a third of my company's PPO plan cost). But the plan also features a savings component, where you contribute monthly payments to a tax-free account which you can use to cover medical expenses. The savings account seems to be akin to an FSA (Flexible Spending Account), with one huge difference. At the end of the year, you lose anything left in your FSA. Anything left in your HSA rolls over. Tax free. Indefinitely. If you change jobs, it goes with you, like a 401k. Once you save a certain amount in your HSA, you can even invest the money in mutual funds. Gains on those? Also tax free. The nominal theory is that people can use their HSAs to bank for the eventual medical costs they'll incur later in life. As with a 401k, if you start early, you can build a hefty balance over the years.

As Congressman Pete Stark wrote in a recent editorial, this isn't health policy, it's tax policy. HSAs allow those who can afford to fund them to the max to reduce their taxable income and take advantage of tax-free investment gains. Like 401ks, you can even withdraw from them for expenses other than the intended ones (ie, non-health-related expenses) if you pay a penalty fee.

Here's where things get really strange and scary. Tax benefits be damned; I still wouldn't glance twice at an HSA if it meant I bore a bigger risk if I became catastrophically ill. Perhaps my Blue Cross plan is unusual, but under the terms of my company's plan (I'm setting up a meeting with an HR rep to try to confirm I'm not going to trip on hidden fine print), I don't.

The articles I've found about HSAs tend to focus on the up-front deductible when emphasizing how HSAs can end up costing you more. To me, the far more important number is on the back end: the annual out-of-pocket max. What's the most I might be out, if very bad things happened?

My HSA has a PPO on the back end: Once I hit my deductible ($1,200 -- until I've spent that, my plan plays virtually nothing for medical care), it switches to essentially become a Blue Cross PPO plan. After I've hit the deductible, my plan picks up about 80% of in-network costs and 60% of out-of-network fees -- up to a $2,200 annual out-of-pocket max (which includes the deductible). If I hit the max, 100% of everything above it is covered. (Out-of-network charges have a separate, higher max, but there's still a cap.) As with Blue Cross's HMO and PPO plans, the HSA option has no lifetime max on what the plan will pay.

So, theoretically, I might pay more out-of-pocket under an HSA. If I incur $1,000 in covered medical expenses in a year, I pay. My insurer saves $1,000. But if I incur $100,000 of expenses, they still pay about $97,000 of them.

Why is this scary? Because HSAs are being touted as a Great Thing for Insurers, saving them from paying for all those services consumers frivolously run up and won't if they have higher deductibles and have to pay for them. Now, I have pretty much no expertise on the medical system and its Byzantine economics. But I'm very dubious that those are the costs crippling the system. It's the $20,000 hospital bill David & I ran up earlier this year, padded to the rafters with god knows what indecipherable charges, that makes health care terrifyingly expensive and inefficient -- not the $150 I drop every few years going to my allergist for a check-in.

But if I sign up for this HSA, I'm virtually opting out of funding my company's traditional health-care plans -- the whole idea of which is that risk gets spread around the group. I pay $1,000 in premiums, I don't get sick, my $1,000 defrays the cost of my colleague's cancer treatment. Under this HSA, the revenue my insurer gets from me drops drastically. I'll pay them less than half what I was paying under the HMO plan. My money goes into my HSA account, for me. I keep it. This strikes me as a terrible long-term health care strategy. "Personal responsibility" is dangerous enough when it comes to retirement planning. Are we going to say people should be wholly responsible for saving enough to cover their own, potentially catastrophic, health care costs as well?

Right now, under the terms of my Blue Cross 2007 HSA plan, I'm not responsible for catastrophic expenses. The PPO plan safeguard after I hit my deductible, and the out-of-pocket cap it includes, ensures that. But my insurer is suspiciously eager to get people into HSAs. One nasty shock when I changed jobs was discovering how unfriendly my new plan choices are, compared to the Cigna PPO my old job offered. (I've ranted before about the ways Blue Cross makes the PPO option very unattractive, to push people toward the HMO plan.) Blue Cross is doing even more this year to make its PPO option an unfriendly one. There are an assortment of little kickers, but here's the one that really gets me: If I go out of network for my annual physical, Blue Cross's PPO pays nothing until I hit my annual deductible ($750, for the PPO plan), after which it pays 60%. If I have the HSA plan and go out of network for my annual physical, it doesn't charge against the deductible ("to help ensure that you and your family get this important care") -- they'll pay 60% right off the bat. My out-of-network physical is one of the only expenses I can predict I'll incur next year. This is a decent incentive for me.

The plan also seems to work out in my favor even with the deductible. Premiums for my company's PPO plan would cost me $1,512 for 2007. Premiums for the HSA plan would cost me $444. My company contributes $250 if I elect an HSA; if I fully fund it up to my deductible, the total cost to me is $1,394. Less than I'd pay for the PPO -- and the coverage becomes the same, once I've gone through my deductible.

This feels to me like the thin end of the wedge. Like the early, massive payments offered to get homeowners to sell out to developers, so the developers can later force the last holdouts out with eminent domain and whatnot -- or the Wal-Mart effect in retail, where low prices offered to individuals camouflage the destruction wreaked on our collective economy. Right now, the Blue Cross HSA plan offers big incentives and little downsides. But in a few years? If HSAs catch on and they can get a critical mass switched over? Will the deductibles creep up? Will the out-of-pocket maxes rise and eventually vanish? Because, of course, everyone should be using those HSAs and saving for their healthcare costs, just like everyone knows you should save for retirement and it's your own fault if you were too short-sighted to fund your 401k ...

Ug. I hate feeling trapped. For the services I need, the HSA is the by far the smartest choice for me. But I feel like opting for it will make me one of those setting in motion a huge step backward in fixing our health-care mess.

Dialing for answers on credit card processing fees

A while back I grumped about the "$X minimum purchase" claims some merchants make (which are in violation of Visa & Mastercard contracts). My friend Matthew, proprietor of Roots & Grubs, went further and actually did some investigating to find out more about what processing small transactions actually costs merchants. It's a great, very informative post. Though I am dubious about this whole "making calls for information" thing. It sounds very un-bloglike, involving effort and journalism. Aiee!

(And hi! I'm alive again.)

Cookies can be very expensive

The Checkout blog today spotlights a bizarre practise I wouldn't have imagined existed: Marketers are using your cookies to play with price points for flexibly priced goods (magazine subscriptions, airline tickets, etc.)

Basically, the post explains how clearing your cookie cache can change the prices you're shown at online storefronts. Offering different shoppers different prices is a longstanding marketing tactic, but this is an impressively personalized level of targeting. Yick.

Why I'm never ever ever renting from Dollar again

Rental cars and medical bills: these are the two planets around which my financial life seems to orbit.

This weekend I stumbled across an unusual bit of consumer-unfriendliness I hadn't hit before. I had a rental reservation with Dollar, made through Travelocity. I scanned the fine print when I made the booking for the usual catches, but I can't swear I scoured every bit of it on every conceivable link -- though I did print the reservation and bring that along.

When I arrived to pick up my car, I was told the rate would be $55 a day higher than the one I had confirmed. What!? Why? Because I have a Brookyn zip code.

Yep. Dollar discriminates based on where you live.

Never mind that this car was being picked up in Manhattan and had no restrictions on where we could take it. Dollar wanted to charge me $110 more for my rental than they would if I lived on the other side of the bridge.

I argued with the counter person (nothing on my Travelocity printout mentioned this charge, though Dollar insists it's listed somewhere on the site), then called Dollar's customer service number and argued my way up the command chain there. No luck. I finally cancelled the reservation and made something of a scene, standing outside Dollar's office screaming into my cell phone that this was the worst customer service I had ever encountered from a car-rental company.

Now for the particularly spectacular bit of corporate stupidity. It was the Friday afternoon of Labor Day weekend, I was already behind schedule, and I now needed a last-minute car. Where did I end up getting one?

Thrifty.

Which is owned by the same parent company as Dollar. Thrifty, however, has no surcharge for Brooklyn residents. "I've never heard of anything like that," the Thrifty agent said when I made the new booking.

And it was $30 cheaper than my original Dollar rate. So, Dollar's parent company managed to both infuriate a customer and make less money on the transaction than they otherwise would have. Go corporate America!

But seriously, I am never ever ever booking with Dollar again, anywhere.

Squeaky wheels, ATTACK

"I'm an old Marine. I'm going to follow the chain of command. I can go until we hit God."

That quote is from Katrina survivor Leon Dupreire, explaining in a Washington Post article how he got Allstate to pay out a storm damage claim they initially denied. I'm tempted to plaster it across the box in which I amass bills and such. Unfortunately, it feels like squeaking loudly and persistently is what's too often required to get financial wheels greased.

I finally went back to New School this week to attempt to sort my financial aid yet again, and to resolve the issue of why my one remaining scholarship had dropped to half its initial amount. The result? A completely different story than I got in July -- it seems my scholarship that vanished shouldn't have after all, and only went away because the number of credits I'm taking was incorrectly calculated. Multiple times. Still no one can explain to me how these two scholarship amounts are determined. However, since this trip resulted in the full amount I officially sought being restored, I officially no longer have to care. This is my last year, the money is showing up on my financial aid balance sheet, and I'm declaring victory.

Learning to be organized and persistent in wrangling my college bills is proving far more educational than any of my actual classes. I want credits for it!

Quicken Medical vs SimoHealth: Billing software smackdown

I have an entitlement complex about software. The universe of applications is so vast these days, and the barriers to creating new ones so low, that I expect some clever programmer to have solved pretty much any problem I can dream up. So when I have a problem that seems ideally suited for a software solution, but can't find a good application, I get vexed. Vexed and cranky.

Right now, the gaping void vexing me is software for tracking medical expenses. I take a fairly laid-back approach to budget administration in general. I use PocketMoney on my Palm for day-to-day tracking of money flowing through my checking account. That's all. I have about six regular bills I pay each month in a batch when I get my mid-month paycheck, and it's easy enough for me to remember to do it. My bank information and my regular bills (cable, student loan, credit cards, etc) are all available online. My own personal budgeting approach doesn't demand a Quicken or Microsoft Money; I have little enough to track that I can keep it in my head, and I don't care about the detailed data like "how much did I spend on entertainment last month?" that such programs would offer.

However. I do care about that data mining when it comes to medical bills, now that we have so many. In past years, we've incurred one or two doctor co-pays annually; now we've got a dozen every two months, along with regular prescription costs. We've also got a stack of hospital bills -- one hospital stay, I've learned, can incur at least a half-dozen separate invoices, which show up sporadically.

Our medical paperwork is still not so out of control that a really good tracking system is mandatory -- I've been processing things manually, and everything that needs to get paid is getting paid. I have a good memory for what I've already taken care of, so we're not overpaying. But this is bringing out the information-freak in me. This time, I do want to data-mine the details and have lots of fancy spreadsheets I can run reports against to find out exactly what we're spending, what our insurance company is spending, etc.

Medical bills have lots of specialized wonky wrinkles, like the pile of EOB "this is not a bill" statements they bring in their wake that require tracking and reconciling against the actual, separately mailed billing invoices. The wonkiness means regular budgeting software isn't ideal. So surely some clever programmer has coded up a nifty program tailored for medical bills, right?

Read my first paragraph again. *Sob.*

I can find precisely one major commercial application: Quicken Medical Expense Manager. It's expensive -- $50 -- but if it were fabulous, I'd suck it up, pay, and be happy to find what I was after.

It's not fabulous. Quicken doesn't offer a free trial, so I can't offer a firsthand report, but I probably wouldn't download the trial even if there were one, because user reviews suggest it would break my computer. It seems Quicken Medical doesn't play well with the .Net framework changes in Windows XP SP2.

There's probably a workaround to the .Net issue, and I'd chase it if Quicken Medical had good feedback on its functionality, but it doesn't. The screenshots don't thrill me, and the reviews I've read paint it as an obviously version-1.0 product with a number of gaps and annoying details. I'm not inclined to pay $50 for software I won't love.

However, I'll settle for software I don't love if it's free. Much bashing on Google and Nexis turned up only one serious alternative to Quicken Medical: SimoHealth, a free desktop application from a start-up company funded by Steve Case's Revolution Health. It looks like Simo Software's vague plan is to sell its application to employers and insurers. The company seems pretty dormant at the moment, and I don't know if the application is being supported or maintained, but it's available for free at SimoHealth.com.

I spent about six hours last weekend entering our medical paperwork for the year into SimoHealth. This is not for the fainthearted. The software lacks modern niceties like import and entry-cloning tools; it feels like a version-1.0 GUI slapped over a spreadsheet backend. If you have the same appointment every week, you'll be entering all the details for it 52 times. I didn't run into any glaring bugs, but there were a number of rough edges. Most problematically for me, I couldn't find an obvious way to handle bills incurred over multiple visits but settled all at once. I kluged my way around it, but my solution is an ugly hack that wrecks the elegance I'm seeking from a software solution in the first place.

Still, at the end of my labors, I had data-mining opportunities my paper solution doesn't offer. I can use SimoHealth to quickly total what we've spent to date, and to parse that spending in a few different ways. Keeping it updated will be annoying, given the program's clunkiness, but for me, it's probably worth the pain.

I could do much of this myself in Excel, but I'm a UI snob, and even SimoHealth's basic interface is better than what I could throw together for myself in Excel. But it's a shame there isn't something better out there. (And if you've read this far and know of something better I've missed, please, speak up!) Sod privacy; I think most of us who deal with stacks of medical bills would welcome a Web 2.0ish (aiee, I can't believe I voluntarily typed that) online application for tracking and reconciling medical bills.

I and my entitlement complex look forward to the day when I can settle down at my PC with a bowl of soup, which I will enter in Meal Bandit, and catch up on my medical paperwork with Billing Bandit.

Illiquid assets

Business Week inspired much yelping in the blogosphere this week with a splashy cover relying on some incredibly dodgy math. "How This Kid Made $60 Million in 18 Months," touts the cover ... glossing over the small detail that the profiled digg founder hasn't "made" any major cash money from the site and that the $60 million is a plucked-from-the-vapor calculation based on some unnamed sources' estimates of digg's worth. (The site currently claims $3 million a year in revenue. Mature companies generally get acquired for a single-digit multiple of their annual revenue. Early-stage ventures with very bright prospects go for higher multiples, but still, this is some impressively bubble-era math Business Week is doing.)

Plenty of others have kicked and dismantled this article in better detail than I can, but what caught my attention about the story from a personal-finance perspective is how nicely the flap over it illustrates the difficulty of valuing illiquid assets. Not many of us own potentially million-dollar Web companies, but almost all of us have assets that are valuable but not easily valued.

Homes are the most obvious case: a house is worth only and as much as a buyer will pay for it. What makes an apartment that sold for $200,000 in 2001 "worth" $400,000 today? Only the complex magic of supply, demand, and all the real-estate-ecosystem forces acting to influence them.

But houses, at least, have established guides for estimating value short of actually selling them, including appraisals and the constant data flow of nearby home sales. There are lots of assets we pick up with even more opaque financial valuations.

For me and David, the big financial X is our book collection. One of the items on my 'I really will deal with this ... eventually ...' list is getting renters' insurance. If our apartment flooded or burned down, one of our biggest financial hits would be writing off or replacing the 2,000 to 3,000 books we cohabitate with. (I'm slowing cataloguing the collection over at LibraryThing.) The overwhelming majority of our books are very standard, easy-to-find items that could be replaced for less than $5 over on Abebooks. Our "collection" is hardly the sort of thing Nicholas Basbanes will one day lovingly chronicle.

Still, hoovering books at the rate we do means you're bound to sweep up a few valuable ones, both intentionally and serendipitously. But attaching a "valuation" to books -- or any other collectable with a secondhand sales market but little intrinsic value -- is a tricky business.

I end up thinking of three separate "valuations" for our books. First, there's the dollar figure of what it would cost to replace them. If my copy of the Codex Seraphinianus were destroyed, I'd need to budget a few hundred dollars to re-buy a similar one. I could go through every book in our library, figure out a reasonable replacement cost to re-purchase the book, and assign a "value" to our collection that way.

But that value would have little relation to the dollar figure our collection would bring in if it were sold, either piecemeal or as a whole. Every bookseller knows that the retail price of a book is a significant markup over its wholesale cost. Bog common books that cost me $1 to buy on Abe would fetch me only pennies if I tried to sell my copy. For 95% of our collection, the replacement cost "valuation" would be significantly higher than the dollar amount for which the books could actually be sold.

Which leads to the third "valuation" for our collection: the wildly variable "value" of the handful of genuinely scarce items. Here, the value is directly dependent on how much time you have to seek a buyer. If we had a financial catastrophe and I needed cash immediately, I could eBay our Codex for $100 or so and get that price fairly quickly. But if I wanted to get top dollar for our copy, I could probably hold out and eventually get at least $350 (it's a very nice copy of an in-demand edition) for it from a dealer or another collector. So what's a more accurate valuation for the book: the 'liquid' value for which it is immediately sellable, or the harder-to-realize, higher price an appraiser or collectors' guide would assign to it?

This is all fairly academic, since I'm not planning to sell of our books or stress about an appraisal for insurance. I'm sure that if I really cared, there are formal answers for how to value things. I just find it intriguing to have a portion of my 'wealth' tied up in something that can't sensibly be given a fixed financial value.

And hey, my valuation challenges are minor compared to what art collectors must go through.

Inflicting further pain on Time Inc

The Washington Post's Checkout blog picked up my Time subscription saga today, so here's an update: I eBay'd it. Paid $10, and didn't end up missing any issues after all. Looks like eBay will be my route for all future magazine subscriptions! And just in time. New York magazine has this crackheaded notion that it's going raise prices to $40 per year, up from the $15 I've been paying ...

(As someone who makes a living writing things for Big Publishing, I'm very sympathetic to publishers' need to turn a profit. But trying to pry high subscription rates out of loyal subscribers isn't the way to do it -- I imagine the sales departments, which bait advertisers with big circ numbers, scream in horror every time nasty renewal practices force churn.)

A medical catch-22

Lately my main financial occupation has been researching medical parity laws and investigating the likelihood of successfully challenging an insurance company's coverage caps.

I like my new job a lot, but as I've mentioned earlier, one area where it falls way short of my last job is on insurance. I'm now with Blue Cross/Blue Shield. I've always chosen PPO options for my insurance, even when it costs more, because I want the option of going out of network if I need to. I was prepared to choose the PPO option and pay more with Blue Cross -- until I realised that it not only carries a higher monthly premium than the EPO (that's fine), it pays less on in-network services. Unlike every other insurance plan I've had, Blue Cross doesn't cover all in-network medical costs (minus co-pays and deductibles). It pays 90 percent -- but if you're on the PPO plan (paying the higher monthly premiums), it only covers 80 percent of in-network services. The PPO plan also carries a higher deducible and an out-of-pocket maximum that's twice the EPO plan's maximum.

That is one hell of a stick Blue Cross is wielding to get you on the EPO plan.

Which I grudgingly elected. And now, of course, the doctor I want to see is out of network, meaning I'll be paying out of pocket for my visits. Even if I'd gone with the PPO plan, I probably still would be -- I don't think this routine stuff will exceed the PPO plan's deductible.

Meanwhile, David is separately insured through his company's plan, with Aetna. Overall, I suppose I can't gripe too much about Aetna. We've had annoying problems with bills being processed incorrectly, but that seems par for the course with medical paperwork. The overall coverage levels at Aetna are way better than mine through Blue Cross, and apparently better than industry average.

However. Like pretty much every insurer, Aetna caps outpatient visits for some conditions at 30 visits a year. After 30 visits, no more coverage -- it's like being completely uninsured.

This strikes me as a financially stupid approach, for both the insurer and the customer. Medical conditions requiring treatment don't magically disappear after a set number of treatment visits. If the condition gets worse, it could result in hospitalization -- and that's much, much more expensive for Aetna than continuing to pay for outpatient care would be. If a doctor is still saying the care is essential, then the insurance company should at least consider paying for it.

With insurer decisions to stop paying for treatment, you can appeal. It's a frustrating process with no guarantees, but the research I've done suggests that if you squeak loud enough and have the resources and persistence to jump through all the spiky hoops the insurers lay out, you stand a reasonable shot of getting what you're after.

But with these preset limits on coverage outpatient care, the insurers fall back on policy and flatly refuse to make exceptions. An appeal from the doctor handling our case was apparently rejected. A really well-done article in the Times Union newspaper last year found that no provider interviewed had ever heard of an insurance company making an exception.

I'm still going to file a written appeal with Aetna, even if it's fruitless, just to get a written response. I want papers I can hold in my hand while I continue yelping.

But what is really infuriating me about all this is the idea that we're paying $250 a month for medical coverage that is going to be utterly useless for the services we actually require for the rest of this year. Yes, if one of us breaks a leg, it'll come in handy again. Great. But for the care we actually need, we'll be paying out of pocket. Which would be much easier to afford if not for the whopping bill we pay each month for insurance.

Eternal vigilance, or, 'Why Stacy is cranky with Amex, New School and Aetna'

Sorry for the long patch again of radio silence -- it's been a month of travel and bureaucracy. I'm in one of those stretches right now where I feel like my sole purpose in life is to facilitate the movement of bits of paper.

This week, it's New School University I'm shuffling paper around for. I'm heading into my third and final year of finishing off a degree there. When I enrolled, New School kindly gave me two scholarships. I hadn't directly applied for these and had no idea exactly what they were for or how they worked, but the financial aid office told me they would be renewed each year automatically, so long as I didn't flunk out. Excellent.

Less kindly, New School has flubbed the renewal each year. The first time, I was willing to chalk it up as oversight. Twice makes me question the competence of the financial aid office.

When I got my financial statements last year, my scholarships weren't listed. Fortunately, the problem was easily solved: I fired off an email to the financial aid office, and got an email back the next day saying "whoops, we'll fix that." A day or so later, the scholarships showed up in the online financial system info. Yay. One was for half as much as it had been the previous year, but the other was for twice as much. Since the total amount worked out to what I was expecting, I shrugged and went with it.

This year, the scholarships once again failed to show up in the records. However, this time my email about it went unanswered. So I hauled myself in to the open office hours yesterday to attempt to straighten it. Scholarship 1, I was told, should show up every year -- it not doing so this time was an oversight, and oops, they'll fix that right away. Scholarship 2, however, the counselor said, is need-based, and since my FAFSA kicked up a higher "student contribution" amount this year, my scholarship died.

Grumble. No one told me it was need-based, I muttered. But, ok. At least I have an answer, and since I do make more now than I did in past years, I suppose I can't complain too strenuously.

But when I checked the records this morning, I saw that Scholarship 1 came through for the same amount it did last year -- which is half what it paid out the first year. Last year, I had Scholarship 2 balancing that out. Since Scholarship 2 is now gone, Scholarship 1's decrease is an issue. It looks like I'll be dragging back to the financial aid office. Grr.

Meanwhile, Amex has finally just resolved the last of the complications from my April credit-card-information-theft incident. Despite Amex's "we'll take care of contesting everything" assurances, several of the charges stuck, until I called and filed another round of protests. Two were take off my bill a month later, but Amex declined to reverse one charge -- the Domino's pizza order. Its denial letter said I had apparently authorized the charge, and included a signed receipt as proof. A receipt from Philly, which I was not anywhere near at the time, signed in handwriting that isn't mind. Grr. (This entry is bought to you by the word "Grr.")

So I called Amex again, protested again, and this time it worked. This week the Domino's charge finally came off my bill, and I got an "oops, sorry!" note in the snail mail.

I'm also hacking through piles of paperwork from the ongoing medical drama. That will be another entry. But the whole paperwork stack, and the frequency with which I find myself spending time sorting out overcharges and erroneous charges, suggests that people who don't do this end up paying a lot of fees they shouldn't have to. I wasn't always as organized as I am now about finances. ("Gibbering ball of denial" would more accurately describe me and my financial strategies for the first year or so I was out of college.)

Someone (exactly who seems to be controversial) famously said that "eternal vigilance is the price of liberty." It seems it's also the price of financial security.

On pennies and yuppie food stamps

A recent acknowledgement from the U.S. Mint that rising metal costs now mean it's more expensive to make a penny (manufacturing cost: about 1.2 cents) that to buy one have sparked a fresh wave of news articles about the imperiled penny and editorials calling for its death.

I don't have strong feelings either way on the fate of the penny. I do actually drag them around in my wallet and spend them, and don't see much about the weight of my wallet or my spending habits changing if they get exterminated. On a practical note, my Aussie partner David notes that when Australia off'd its pennies, no one really felt the loss. Cash transactions are rounded to the nearest five cents, and credit transactions continued to be calculated as they are now.

In other money matters, the recent wave of massive storms in the Northeast has rendered the $20 artistically inaccurate. The Washington Post reports that one of the storms' fatalities was one of the two elm trees pictured on the back of the bill, framing the White House. Frame your $20s and pennies now -- they're becomming historical artifacts!

Dropping to one paycheck

One of my friends posted today about how her family is making life work on a single income. The aspect of it that intrigued me the most is: plan. This is a terribly basic thing, but I still struggle to implement it in my daily financial life. The thing savings buys you isn't more stuff, it's flexibility. The value of have flexibility when you need it? Priceless.

Real estate: Buying doesn't always make sense

Greetings from Seattle. Another city, another free rental car upgrade -- National had no compacts in stock, so I ended up driving off with the same mid-size I had just declined to pay an upgrade charge for.

Someday I hope to acquire the skill of regular blogging. For now, I'll have to be sporadic -- sorry! But be assured that even if I go silent for a stretch, I'm not abandoning the ship.

I finished one of the house-buying books I mentioned earlier, June Fletcher's House Poor: Pumped-Up Prices, Rising Rates, and Mortgages on Steroids. My verdict: It's a clip job, but a pretty decent one. In the acknowledgments, Fletcher makes a comment about the project coming together very quickly. She's been covering real estate for two decades, lately for the Wall Street Journal, and my guess would be that a publisher approached her about striking while the market is hot and scraping together information from her articles for a quickie book.

Which means there's some definite filler in the already-fairly-slender (224 pages) book, like the "Going Global" section with snapshots of, say, buying conditions in Panama. I would guess that almost no one picking up this book is actually looking to buy in Panama, and people who are will need a lot more data (and more current data) than this offers.

For those at the earlier stages of considering real-estate purchases, though (like me!), House Poor has value. The main point I took away from the book -- and I think it's a pretty useful one -- is "don't fall for the line that everyone needs to buy, quick quick quick!" Fletcher has covered several complete real-estate boom-and-buy cycles, and she doesn't endorse the notion that buying an apartment/house is always a smart investment -- even for your primary residence. On a purely financial level, renting can be smarter in a number of circumstances.

For instance, one of her anecdotes concerns a couple that bought at the height of the last boom in D.C. -- and found, three years or so later, that they couldn't resell the house for enough to cover its mortgage. Over the last few years, with prices skyrocketing double-digit percentages each year, it's tempting to see real estate as the investment that just keeps giving. But booms always inspire that sense of frenzy -- and booms don't last indefinitely, no matter how much industry observers cry "but *this* time the fundamentals are different!"

Friends of mine in the D.C. area just had to sink five figures into a complete overhaul of the piping in a house they bought only a year or two ago. If your house is intended as your long-term primary residence, you sigh and grumble about those sorts of unexpected costs, but can take some comfort in recognizing that they'll be amortized over the lengthy time you spend in the dwelling. If this is a house you intend to unload in five years? If prices don't jump a *lot*, you may not recoup what you've paid for those unexpected fixes.

There are, of course, non-financial advantages to owning. I want to decorate and have the freedom to treat the place I live as *mine.* I'm willing to spend extra money for that psychological comfort. In NYC now and for the foreseeable future, buying costs a fair bit more than renting a comparable apartment. Even if I crunched numbers and discovered that the equity of owning a place didn't offset the costs -- that renting and investing would be a more financially advantageous option -- I would still buy, for the psychological reasons.

However, I likely wouldn't if I knew I'd be reselling in less than, say, a decade. Imagine a couple with part-time kid custody. They know that when the kids leave for college, they'll move to a smaller place in a better location. They're deciding whether to rent in the interim or buy a larger place that they will eventually sell and "trade in" for the smaller one. It isn't a given that this couple should buy. Depending on the relative costs of each option, and the likely appreciation in housing prices in their market, it may be wiser to rent, sock away difference each month between what they pay for rent and what they would have spent to buy, and use that cash pile -- rather than equity/appreciation from the house they would have bought -- to fund their eventual trade-up.

Fletcher kicks around such scenarios to make the point that buying real estate is a complicated calculation. That alone makes House Poor helpful and interesting. It's also a good basic reference for information on how things like interest-only loans, reverse amortization, PMI, and other logistical considerations work.

'The check cleared' doesn't mean what you think it does

Like many people these days, I deal with actual paper checks rarely. I write one a month for my rent, cash one perhaps every few months, and deal with all the rest of my financial matters (paycheck deposits, bill paying, etc) electronically.

Those electronic transactions come with elaborate consumer safeguards. As many times as I've had my accounts used fraudulently, I've never been personally libel for any of the losses. Not so with checks. If a check you deposit bounces, you eat the loss. Here's the not-so-well-known catch: A check can bounce long after the bank has cleared it and released the funds.

That's the foundation for a nasty scam that seems to be picking up steam. The Washington Post wrote about it recently in "Banks Honor Bogus Checks and Scam Victims Pay," and a friend got targeted this week through a resume he has posted on Monster.

Here's the basics of how it works. The scammer makes contact and arranges to send you checks, with the understanding that you'll cash a large check and then wire a percentage of it -- minus a generous fee/commission for you, of course -- back to him or another party. Online job boards seem to be a breeding ground for this. From the WashPost piece:

In February, about a year after Gaston had posted her résumé on a job-search Web site, she received an e-mail about a part-time opportunity: to work as a courier for money for an international charity that builds homes for people in disaster areas. Her assignment was to deposit local donations into her own bank account, wait for the checks to clear and then wire the money to another address. She was told she would be paid 7 percent of every donation check, with a guarantee of $500 the first week on the job.

The phishing email my friend received proposed a job as "transfer manager."

The task of the Transfer Manager is to process payments between our clients and our company via checks, bank wire transfers,Money Orders. ... It’s a commission based position. You will get about 8% of each processed payment.

The trick is that banks are required by law to clear checks within a day or two of deposit. That's too short a timeframe for them to actually pull funds from the check-writer's account and guarantee the transaction's authenticity. So, banks will clear funds and make them available in your account -- but if the check later proves fraudulent, the bank will return crying fraud and yank the money right back out of your account.

In the scam, it's too late at the point. The victim has already sent much of the 'cleared' cash back to the scammer, leaving them holding the bag for the loss.

Even certified checks are subject to this authenticity-verification delay. The only safe practise seems to be refusing checks from those you don't have a trusted relationship with. If you absolutely must take a check from an unknown party, don't release the funds for several weeks, until there's been plenty of time for the transfer to be proven genuine.

Materialism vs Experiences

When I was ten and first started paying attention to my allowance money, I resolved to only spend it on tangible things. A sandwich would disappear once it was eaten, so what was the point? I reasoned. I would keep my money for lasting objects.

Eighteen years later, my philosophy has basically done a complete turnaround.

I still spend plenty of money on things. I cheerfully describe both myself and my spouse David as materialists, because we are clutterrats who accumulate lots of things -- books lead the list, but we also round up souvenirs quite a bit when we travel, and have an assortment of collections. David must have three or four dozen baseball caps lurking in our single closet. Living in a tiny NYC apartment does curb the clutter instinct.

But a much larger percentage of our income now goes to 'experiences,' particularly travel. I bounce around a lot for work, but David and I also spend a pretty hefty sum visiting friends and new places. (Forty states down, ten to go ...) I also routinely drop more money that younger-me would ever have imagined sane to dine out. I like to cook, and do so at least a few times a week, but I also really like eating my way through NYC's abundance of excellent restaurants.

Every so often I mentally wrestle with this mindset. Is it really smart to spend so much of my income on ephemeral experiences? On the other hand, there isn't a lot (beyond books) in the way of material goods that I really covet -- and the experiences I've had shape who I am.

This idle musing was underlined when David presented me with my birthday present last night (6/6 -- I'm a devil baby!): A bottle of Grange, Australia's famed Very Best Wine. I nearly keeled over. On our last trip to David's homeland, we took the Penfolds tour, and for years I'd heard stories from David and other Aussies about the wonders of Grange. Our wine budget is set considerably below the Grange threshold, though, so I never really expected to try it anytime soon.

I drink $20 wines fairly routinely, and I've had occasion to try a few in the low-three-figures range, though almost never when I'm paying. (Ah, the perks of business dinners ...) But I've never before confronted a bottle of wine that costs in the range of what I used to get paid for a week's work when I started my career.

Part of me knows there's absolutely no way to financially justify spending that sort of money on a fleeting extravagance. And part of me says it's an experience I'll always remember.

Financial decisions are funny things. How we choose spend our money really does say a lot about who we are.

My annual wrangle with Time Inc.

A few habits from my childhood have proven impossible to shake off, and reading Time is one of them. My browser homepage is washingtonpost.com, which keeps me somewhat attuned to the daily news cycle, but I've never subscribed to a daily newspaper myself (though my parents had a WashPost subscription for as long as I can remember) -- I lack the time and discipline for that kind of reading. I rely on a weekly newsmagazine to make sure I don't miss anything huge. Time brand loyalty runs deep. Although it's gone through periods of being frustratingly fluffy, I've always stuck with the magazine. The idea of switching to Newsweek or U.S. News and World Report feels wrong on some sort of cellular level; my family is a Time family, and that's that.

Not that Time Inc. hasn't done its best to drive me away. My subscription has been running for close to ten years now, and I'm sufficiently addicted to the magazine that I don't want to have a gap between renewals. The sensible thing would be annual auto-renewal, right? Cheaper for them then trying to win my business afresh each year, and easier for me.

But why would a magazine publisher do the sensible thing when it can instead inflict pain and suffering on loyal subscribers?

Try the trick of eBaying your magazine subscriptions and you'll see that a year's worth of Time runs about $10. If I were frugal above all, I'd let the subscription die each year and eBay up a fresh one. But I'm sufficiently opposed to gapping my subscription that I'm willing to pay a bit more for a proper renewal.

I am not, however, willing to let Time Inc. blatantly hose me.

Go to time.com and click on subscribe, and you'll see a year's subscription priced at $29.95. That's been the subscription price for at least two or three years.

If I click on the Renew button and log in, what rate does it want to charge me? $49.84.

So, Time wants me to reward my customer loyalty by charging me $20 more than a new subscriber would pay. This, of course, makes my inner consumer advocate go RAAAAAR. The one year Time managed to sneak through one of those automatic renewals it routinely gets legally smacked for, I recall the rate being even higher, around the $60/year mark. (I called, screamed a lot, and got the charge reversed and the automatic renewal cancelled.)

Because the renewal disparity offends me so much, I started writing in to Time's customer service to complain about it. And discovered that if you complain about it, they go "oops, sorry!" ... and agree to bill you the lower rate.

So Time Inc. and I now have this annual Kabuki dance each June, as my subscription comes up for renewal. They invoice me for the higher cost, I write in a scathing email pointing out that their renewal rate is $20 higher than the new-subscriber rate, and two days later, they email back the form letter offering me the lower rate. From this year's installment:

Please understand that testing different rates is a common marketing practice. The offer you mention is targeting new subscribers. The offer enables potential customers to review the magazines at that low rate to decide if they would like to continue with a subscription. Because we value your business, we will be happy to extend your current subscription with that offer, if you like.

You may visit our website and renew your subscription from there. Or, if you prefer, you may return this e-mail with your full name, complete mailing address (including city, state, and zip code), and account number. Please include your order and billing instructions.

We apologize for any confusion and look forward to hearing from you!

Exceptional customer service is our number one priority.

The whole wrangle is annoying enough that I regard magazine renewals the way most people do the annual trip to the dentist. It's June? Oh, hell, time to go fight with Time again.

Please, Time Inc., can we have a cease fire? I will give you the thing every marketer dreams of, my credit card number and a standing annual-renewal order, if you will please just promise to do one simple thing: give me your lowest subscription rate. It's been ten years, and I think we're ready for that kind of commitment. It's time for us to break this cycle of dysfunction.

If not ... well, I don't want you to take this the wrong way, but ... that Newsweek does keep filling my mailbox with some alluring come-ons.

IRAs, 401ks, and other headache-inducing TLAs

I had the clever timing to start my new job just as my employer was switching 401k providers, from Scudder to JP Morgan. The various confusions meant that it's taken more than three months since I started for my 401k to be completely set up and functioning properly. So, last week I finally got around to going through my rollover forms from JP Morgan and contacting my old 401k provider, ING, about transferring funds from my old employer's plan to my new one.

ING, of course, doesn't like the idea of losing my money. The rep I spoke with first pitched the idea of leaving my existing 401k in place. Bzzt. I'd already ruled that idea out; if I need to borrow against my 401k, or even make a hardship withdrawl, that's a lot easier if the money is in my current employer's plan. The investment mix is pretty comparable at both ING and JP Morgan, so there's no edge there for ING.

Undaunted, the rep next pitched the idea of moving some of the money into an IRA at ING. It's "more flexible" than a 401k, he said. Hrm. This idea I had not considered. I've always kept all my retirement money in one 401k (I did a rollover the last time I changed jobs, five years ago) for simplicity. At some point I plan to look into a Roth IRA, but I hadn't seen any reason to check out a traditional one.

How is it more flexible? I asked. Er um, said the rep. He then offered to
"waive the fees, if that's daunting you." Fees? Grr. I don't like buying things by phone anyway, so I told them to just send my rollover forms and be done with it.

I then went skittering off to my usual information source, The Internets. However, there is not much to be found in the way of concrete details on ING's Rollover IRAs page. It looks like the main selling point is that you have a broader mix of investment options.

I'm pretty conservative with my retirement-stash investments (I'm a margarita-mix girl), and I value simplicity over penny-maximizing schemes that'll generate a .005% higher return. Anyone mucked around with rollover IRAs? Any reason I shouldn't stick with my plan to do a straight 401k-to-401k rollover and continue ignoring it all?

Back in business

Whoops, that was not intended to be a cliffhanger and long hiatus. Once again, the culprit was travel. SF & DC were lovely.

The credit reports I pulled were surprisingly accurate. It's a bit daunting to realise just how many credit lines I've had in my not-so-very-long consumer lifetime. Each report showed more than two dozen accounts -- credit cards, retail cards (usually opened for discounts, used once, and subsequently ignored), student loans, and other assorted bits. While I only actively use two credit-card accounts and my student loan lines, I apparently still have another fistful of still-living retail accounts.

Of all the dozens of accounts listed, though, all were recognizably mine. Yay no identity theft! The only inaccuracy I could find was the address listing on my Experian report, which was for an address I lived at five years ago. Weirdly, the report had both my subsequent and current addresses listed as "past" ones. Still, I doubt I'll bother correcting that. TransUnion had my correct current address. Both reports also listed as my employer the company I left about six years ago. *Shrug.*

It was interesting to see just how many inquires there were by marketers for my file -- each report contained about five pages of them. Discover apparently pings frequently. (Inquiries initiated by you, when you apply for new credit lines, are listed and treated separately. Too many of those inquires can be a red flag, since it can indicate a hunt for lots of new credit. Inquiries by marketers don't affect you credit score and profile at all.)

The report also showed, in the marketing-inquiries section, pulls by credit card companies for account-review purposes. Providian apparently grabs my report monthly. Amex picks it up only once a year or so. I wonder if that means Providian is more likely to pull the nasty trick I've heard about of yanking up your APR for missing *any* credit-card payment, not just one to them ...

Pulling my credit reports

As part of my house-buying daydreaming, I decided to do the annual credit-report pull -- now free, yay!

I did this last September, soon after it because available in New York, for David. That was tricky, since he has no credit cards in his name and has a very limited credit history in the U.S. None of the three credit-report vendors would give us online access to his reports. Each required a paper request. We filed those, and after a month or so got the reports for him from each place. (Tiny, two-page reports. Mine are like phone books.)

I'd thought I did the same for myself around that time, but I couldn't find the printouts I would have made in my files, so I decided to give it another go on Friday. The website is AnnualCreditReport.com.

First impression: This is elaborate. The site routes you in turn through each of the three reporting agencies. First up for me was TransUnion. In addition to expected stuff like my name, address and social security number, TransUnion wanted details on some of my accounts for identity verification. But credit reports are packed with dead accounts. It first rejected the number for my student loan notes and asked me instead to provide an alternative set of information verification data. Fine; I clicked the button to provide details on my revolving accounts. It came up with a list of a half-dozen accounts: three dead store accounts I probably still have open but no longer use, one long-closed card, and two current ones. I gave details on one current card. That checked out ok, but it asked for the account number for another. That too checked out -- but it wanted a third after that. I didn't have available the numbers for any of the store accounts or for the dead card. So I had to try a third verification method: Confirming old addresses. Fortunately, that one finally worked, and it gave me access.

TransUnion also wanted me to create a user name and password for returning to view the report within the next 30 days. More passwords to try to keep track of, whee. (I use CryptInfo on my Palm. It is invaluable.)

Experian was easier: It wanted me to answer a set of four verification questions, about the county I reside in, the street I used to live on, and two questions about my non-existent mortgage ('none of the above' was an option, and the correct one for me.) For return access, it wants me to keep track of the report number, rather than a password.

At Equifax, I bombed out -- it said records show I got my report from them on 9/2/05. Guess I did pull some in September after all. I'll have to hold off till the fall to pull that one.

So after all that to get the reports, how accurate were they? I'll get to that in my next update ...

Stocking my house-buying info bookshelf

Two of my close friends are in process of buying a house right now, the crazy kids. (An actual *house.* In New York City. Who knew such things existed?) This has gotten me thinking wistfully again about real estate. We're not in a position to buy anything now, and I doubt we will be for at least another year, but since I'm always information obsessive, what's to stop me getting started with some research?

Listening to these two go through the details of the buying process, it hit me how little I understood it all. Inspections? Title checks? Swarms of lawyers? Eeek! So, I asked for book suggestions. Home Buying for Dummies was enthusiastically recommended as a good overview. I'm also interested in the larger economic questions about the housing market -- how do you judge when it's the 'right' time for you to roll the dice on a purchase? The Washington Post's personal-finance columnist, Michelle Singletary, is pretty impressed by June Fletcher's House Poor: Pumped-Up Prices, Rising Rates, and Mortgages on Steroids, and makes a persuasive case for it. So I tossed that into my Amazon shopping basket as well.

I'm about 10 pages into House Poor right now. I'll report back when I've finished the books. Anyone else have recommendations?

'Don't Be Evil' investment strategies

It had to happen, I suppose. For years a handful of organizations have focused on advocating socially conscious investing, encouraging individuals and organizations to weed out of their investment portfolios those companies that perpetrate environmental, cultural and political ills. So what's a red-meat right-winger do to? Fight fire with fire (or money with money), of course, and launch a mutual fund pledged "to defend free enterprise from the Left’s use of capitalism against capitalism." Hence we have the Free Enterprise Action Fund, which Daniel Gross entertainingly smacks around in Slate today. It seems that fighting the Left's crimes against capitalism doesn't yet deliver better returns than the S&P 500.

Sort of in line with my last post: I've never been a fan of the line that a corporation's primary responsibility is to make money for its shareholders. There are things more important than absolute dollar returns, but it's become a business cliché for CEOs to spout off that their legal and fiduciary duty is to do whatever will make the most money for stockholders. Worse, this gets spun as some sort of democratic affirmation, because for public companies, anyone can be a shareholder and lots of everyday people are, thanks to mutual-fund-packed 401ks and pension plans. And, of course, we don't want to see bad things happen to corporate America and tank Grandma's pension, do we? Why, those nasty representatives in Congress considering an excess profits tax would just be snatching money from the millions of Americans with Exxon stock in their retirement plans!

Me to Congress: Please snatch money from my retirement plan. I have no idea what stocks are in the mutual-fund mix in my 401k, but personally, I'm perfectly ok with taking a hit there in return for tighter controls on the petroleum companies that are currently reporting annual profits surpassing the GDPs of most developing nations.

Someday soon I need to quit being lazy and explore options like Working Assets' range of financial products.

Why I'm not trying to maximize my money

Back from the road again -- travel and blogging just don't mix well for me. I see my post about keeping separate accounts with my spouse generated comments while I was gone. One point in particular caught my attention:

My wife and I used to operate the exact same system as you and I have to say the best financial decision I ever made was to change this round. ... Our savings rate has tripled since we started doing this and yet we haven't felt deprived. We have just stopped wasting money.

That makes sense to me. It also touches on one of the fundamental issues that got me started on thinking and blogging about personal finance: What do you prioritize over "more money"?

For me, it's a pretty long list. Heading it is "a lifestyle that means I can think about money as infrequently as possible." David and I would spend less if we had joint accounts and cleared purchases with each other. I'm absolutely certain of that. We would also spend more time wrangling with each other about finances. I'm willing to trade away a few hundred dollars a month in additional savings to spare us that stress. I'm also aware that the choice is a luxury I'm very fortunate to have.

Money, in the absolute sense, doesn't interest me. This is why I don't have any desire at all to be an "active" investor -- stocks, interest rates, esoteric investment vehicles and other moneymaking schemes don't seem like any fun to me. Paychecks from our day job are enough for me and David to live on and meet our (admittedly too minimal) savings goals; if I'm going to invest my free time in something, it had better entertain me, and monitoring investments would not.

I will be the token "I hate money" personal finance blogger :)

A very annoying form of rebate

David got a new cell phone and plan last month from Cingular which came with a $20 rebate. We did all the usual annoying rebate stuff, including waiting close to two months for the refund, which arrived Friday. But here's a twist: Instead of the check I expected, what arrived is a prepaid Visa card, preloaded with the $20 rebate.

I think that's pretty obnoxious, because it'll be hard to use all $20. The letter it came with suggests that if you want to use the card for a purchase of more than $20, you request that the merchant run the purchase twice, once for $20 and then once for the rest of the balance, paid with cash or another credit card/check. I've occasionally split bills in weird ways at restaurants, but I've never tried such a thing in retail shops, and I can't imagine it would get a terribly favorable response.

The poetically just thing to do, ofc, would be to use the prepaid card to pay $20 of David's next Cingular bill and force them to handle the split payment. We have the monthly bill set to automatically charge to our Amex. I wonder if it's worth wranging with Cingular customer service to skip the autobill next month and pay with the prepaid card.

Probably not.

Sigh.

What do you really need in your 'emergency' fund?

The question came up this week in a chat area I frequent: When do you declare your emergency fund full? Financial pundits like to throw around suggestions about 'have three/six/eight/a bazillion months of cash on hand,' but what are people really setting aside as a cushion?

Here's an article on the topic I like: The $0 emergency fund. The author's argument is that these days, with easy credit and all sorts of savings and investment options available to regular consumers, what you really need isn't cash but flexibility.

Jonathan Clements of The Wall Street Journal drew a lot of heat a few years ago when he confessed to keeping only a month's worth of expenses in his emergency fund. He wanted his money working for him in the markets, not disappearing inch by inch as taxes and inflation took their toll.

But Clements' view is shared by many financially sophisticated folks who would rather take more risk -- in stocks, in real estate, in their own businesses -- to get better returns. And that approach can be perfectly legitimate, as long as you can quickly get your hands on enough money when you need it.

This makes a lot of sense to me. A 'real' emergency -- a job loss, a medical crisis, draconian rent hikes, etc -- is something that throws your usual life into chaos. You can't effectively plan for such things. What you can do is give yourself as much flexibility as possible. Having lots of savings is a great cushion for all sorts of unexpected life events, but you don't really need all that much sitting in a basic checking account or stuffed under the mattress in $20 bills.

There are a number of savings/investment options that give you near-immediate accessibility to your money, like money-market accounts or straight stock-trading accounts. A level up, there are vehicles like short-term CDs. I just checked my bank's rates, and the rate difference between a 1-year CD and a 5-year CD is less than 0.10%. With so little incremental difference, there's no reason not to opt for the shorter duration and have your money more liquid.

The real decision point comes when you're considering tying up your funds in something difficult to quickly liquidate -- like real estate or a business venture. There, I think the 'flexibility' comes into play. The investment may eat up an uncomfortable share of your 'cash' savings, but: do you have other ways of tapping cash if you need to, like lots of available credit, a home-equity line, a 401k loan, and so on? So long as you *can* get three/six/eight/a bazillion months of available money if you need -- and everyone will have to come up with their own comfort-level number to fill in that blank -- it doesn't seem essential that the money actually be cash.

So what's my own emergency-fund strategy? I'm trying to save up about $5,000 to put in a money-market account, where I can grab it instantly if needed. I have a significant chunk of available credit -- enough to pay most of my living expenses for about six months, I think. And I have about an equal amount available for borrowing against on my 401k.

My next 'major' cash-immobilizing purchase will likely be a primary residence. If we eventually get there, I expect the down payment to devour any 'emergency fund' savings we've accrued, but I won't fret too much about it as long as we have credit levers we can pull if needed.

Our best marriage decision: not pooling accounts

The best thing David and I ever did for our marriage is maintain separate financial accounts.

Decisions like keeping your own name when you marry (I did that too) are very common, but I have no idea what percentage of couples don't merge their checking accounts. For us, it was an easy decision. We each make very similar salaries. We're also both alike in our habits: we fritter away a lot of money on perks like books, travel and dining out, but we're also reliable about not spending money we'll need for rent and bills and such.

We're also both prone to spending on things the other would consider stupid. David recently dropped something in the high-two, possibly three, figures for his 25th "Dark Side of the Moon" copy. (He insists this one is somehow different and special. The distinction escapes me.) I recently spent three figures on a handbag, for the first time. (David doesn't understand why I didn't spend $20 and buy one off the street. The distinction escapes him.) If such purchases were coming out of our money stash, we'd be at eachother's throats about them. But because his personal spending comes out of his account, it doesn't faze me, and vice versa.

We could accomplish something similar by pooling all our money and giving ourselves allowances, as the Make Love Not Debt pair recently discussed. For us, though, there's no pressing reason to go that route. We don't have any big savings targets we're trying to hit right now. (We probably should, like saving for an apartment downpayment, but we're not there yet.) We don't have any joint debt. We're pretty good at shifting our resources around as is sensible. When I was trying to pay off my credit-card debt, David carried my student-loan payments for years. On a day-to-day basis, whoever feels like they can spare the cash for groceries, dinner out, etc., is the one to pick up the check. For major expenses, like a vacation or a sudden cat trip to the vet, we generally charge it to the Amex (our closest thing to a shared account -- I'm the primary cardholder, but David is an authorized user and has his own card) and split it up at bill-paying time. For us, it's a surprisingly stress-free system.

None of our financial information is secret from each other, and when it comes to big savings pools, I think we both consider them 'ours' -- I may be the only one funding my 401k, but I fully expect it to be used on us both, and I regard it as a shared asset. But I like the independence of each of us having our own accounts, and being able to indulge our own spending idiosyncrasies. Having kids is the one thing I can think of that would derail this independent-finances approach. There, the expenses are so big and so shared it would be hard not to have a joint pool to draw from. But for us, I think not going the typical joint-checking route has spared us a lot of marital discord.

At least it's less painful than having my debit card hacked

Some researcher, somewhere, must have calculated the odds of having your credit-card information intercepted and used fraudulently. In the typical consumer lifespan, how many times is one statistically likely to hit the problem, on average?

I'm now on go-round #3.

Both times before, it's been my Netbank Visa/check card that got nailed. The first (I can't remember exactly when -- perhaps three years ago?) was the ugliest: someone got hold of both my card number and PIN, and made a dummy card that was used to withdraw about $1,200 from an ATM in Queens, the entirety of what was in my account. No one has my PIN, and I had my card on me the whole time this was going on. What probably happened was that my card got hit in an ATM skimming scam. I'm not completely oblivious and would likely have spotted a suspicious device, but a hot new trend in fraud is internally rigged ATMs -- and I do pretty regularly use the kind of non-bank ATMs in convenience stores and whatnot that are most susceptible to this. (Well, I did. I *try* to stick with bank ATMs now ... but I fall off the wagon a lot ...)

Clearing that up entailed filing a police report, along with all the fraud paperwork at my bank, and waiting several weeks for my money to be credited back. To NetBank's credit, they didn't hassle me too much about "they used your PIN, you must have given it out!" or anything.

About a year ago, my NetBank account got cleaned out again, though this time it was a case of more "classic" credit card fraud. One morning a blizzard of charges appeared for expensive, out-of-town purchases at stores like Staples and Foot Locker. Call NetBank, file fraud paperwork, replace card, wait several weeks for a refund, lather, rinse ...

Neither incident ended up costing me money that wasn't refunded (although I did probably spend $10 or so tracking down and faxing police forms to my bank and getting things notarized, the first time). The most painful part each time was waiting the week or so it took for my new bank card to arrive, during which stretch I had no access to cash. Ug.

So this Tuesday, I stagger home at 9:30pm from a long day spent mostly at a hospital ... and find 10 messages on the answering machine. Nine were from merchants or Amex calling to say "Hi! We want to verify this large, suspicious charge on your card!"

ARUGH.

I managed to ring back and connect to Amex's charge-verification unit about five minutes before it closed for the day. To Amex's credit, it seems like this is going to go about as smoothly as it can. They caught this early (a $500 online order from Nordstrom's was the first to set off their red-flags radar), proactively notified me, and it sounds like I don't have to file a pile of paperwork on this. They're taking care of contesting all the charges that came through on Tuesday from outside NYC, and of taking off the one suspicious charge I spotted that had already gone through. (Last Thursday, my Philly scamster apparently took the card for a trial run with a Domino's pizza order.) They also overnighted me a new card for free -- yay! It arrived Thursday.

(I initially thought that a particularly nice customer-service touch, that Amex was overnighting my card. If only my bank had done that ..., I thought. But then, on Thursday, I unexpectedly ended up putting several hundred dollars on my card -- and, lacking my Amex, I charged it to my backup Providian Visa. At which point it occurred to me that Amex has a strong self interest in getting me a new card as fast as physically possible. All those precious merchant transaction fees! Lost to a rival! Quelle horror!)

This time, the most painful part is going to be tracking down and changing all the things I have autobilling to my card. Grr.

So, three fraud-hacks in ... counts on fingers ... say about 10 years so far of active credit-using consumer life. Am I above average yet?