The end of my HSA

Whew.

Three days into a four-day break, my brain is finally starting to work again. Changing jobs without a day off in between was not one of my cleverest moves; I ended up leaving with an article still owed to old job (finally filed, yay!), scary amounts of information to absorb at new job, and all sorts of errands needing do be done in my scant free time. Like getting my first personal cell phone -- all my previous ones have been work cell phones. (That is a whole grumpy post unto itself.)

I'm now in the fun process of trying to wind up all my old work benefits accounts and start my new-job ones. It's amazing how much ends up being linked to a job: I've got to sort out my 401k, health care and mental health care coverage (separate providers from standard health care, at both old and new company), WageWorks commuter cash account (THANK GOD I will be free of WageWorks), ShareSave cash account, and my Health Savings Account.

Ah, my HSA.

My new company has amazing health care options. The cost is a flat percentage of my salary. To cover both me and David is 2% of my gross (just me would be a mere 1%)-- which ends up being only a bit more than I was paying at my old job to insure just me, and will save us more than $1,000 a year by letting us cancel his (more expensive) insurance. It also appears to be better coverage, even though it's the same provider I had before, Empire Blue Cross. Seems the new plan coughs up for more comprehensive coverage. Yay!

The new job also offers an HSA, but the cost is such a small fraction less than the traditional coverage that it isn't worth it. So, after one year of experimentation, I'm ending my voyage into these minimally charted health-care waters.

So how did it work out?

I opted for the HSA last year because its premiums were less than one-third what the premiums would have been for traditional insurance. My company's strange plan made it so that it was less expensive to do the HSA and go through the entire deductible than it would be to pay for regular premiums.

On that front, it was a success. My usual doctor is out of network (in fact, she's trying to quit taking insurance entirely), and I used HSA money to pay the bill for an annual checkup. Though I was technically paying "out of pocket," it was cash that would otherwise have gone toward higher premiums, so it was cheaper. In the end, I paid around $500 less for health care last year than I would have with the traditional plan. I also had no emergencies, though. That number would look different if I'd required anything beyond the usual routine stuff.

While the HSA saved me money, the politics of the thing (it's a tax shelter masquerading as a health-care policy) drive me nuts, so I'm quite happy to be saying goodbye to it and heading back to a traditional plan.

Which prompted the question: Uh oh, what do I do with the HSA balance? The entire idea of HSAs is that unlike FSAs, the balance doesn't "expire" at the end of the year -- you're supposed to accumulate funds, as you would in a 401k or other savings plan. An HSA also is intended to be portable. If you change jobs, you can keep it.

But since I'm not going to be funding the HSA any longer, I don't really want to drag around the $230 or so I have left in it and keep it long-term. I was procrastinating in figuring out how to kill the balance when Amex solved the problem for me: it's also ditching its HSA plan.

Seems the HealthPayPlus HSA business isn't working out for American Express, the provider of my plan, and it's sold its accounts on to ACS/Mellon. Amex sent me a packet of papers to fill out to transfer my account to Mellon, but at the bottom was some fine print noting that if I don't take action by Jan. 18, Amex will simply close my HSA and send a check for the balance.

Score one for procrastination! I love it when ignoring problems actually does make them go away.

This distribution has tax implications. Because HSA funds come out of paychecks pre-tax, I'll presumably have to pay taxes on the money I get in the check from Amex. The paperwork they sent goes into no detail on how that will work -- it simply says "contact your tax advisor for more information regarding the tax implications of this option."

I am my tax advisor, and I have no clue, so I'm going to rely on the tactic that has been working so well for me: ignoring it. Whatever happens, the dollar amount is so small I'm not particularly worried about getting hit with a tax bill.

New job ahoy

My sister is IMing "post to the blog about your job!," and since I've now pretty much spread the word internally and externally to all relevant corners, I can: another of the Big Changes I'm navigating right now is a move from my current magazine to a new one, where I'll be editing the Web site.

I'm excited about the switch for a bunch of reasons, but one especially cool aspect of the new gig is that it's with Time Inc. Readers with long memories may remember me writing about my annual wrangle with the company over my subscription cost for Time magazine. Let's see if being on staff makes it any easier for me to keep my subscription current! Pricing standoffs aside, Time Inc. has always been of my journalistic pantheons, along with the Washington Post Co., so it's pretty nifty to be headed there as a staffer.

Birds & Bills started two years ago as I was in the midst of a job change and working my way through all the bureaucracy of arranging health coverage, retirement plans, and other benefits elections. I'm once again working my way through the fine print and weighing choices, so expect a flurry of posts ...

(The post about divorce and finances is sparking lots of discussion; I'll try to expand on it later this week. In the meantime, happy Turkey day, everyone!)

Women, money and divorce

It's been an eventful fall here, with all sorts of big changes on the horizon (more details later this week -- I'm about to have a lot of finance blog fodder). One of them has been a really sad, frustrating change: One of my best friends is getting divorced.

It's painful on all fronts. I'm kind of stuck standing by helplessly, knowing there's not a lot I or anyone else can do to cushion the grief and misery that comes with losing the partner you've been with for more than a decade and had expected to be with for the rest of your life.

It's also been painful financially. I've had other friends go through major breakups and even divorces, but we're all young enough that these usually fell into the "starter marriage" camp: two people splitting who had little in the way of Major Complications, in the form of kids or significant assets. It's still an emotional wrench, but it at least clears one major hurdle to separation when you each have a job and don't have any big investments to wrangle about dividing.

This wasn't that. It's what previously, naively, seemed to me an almost antiquated kind of divorce: the kind where one partner's earning power so outstrips the other's that the financial imbalance creates its own big nasty complication. There are many other issues at play here, but what it boils down to is: because my friend jointly signed financial papers when they were married -- loans, the mortgage on their house, etc -- she's going to be on the hook for payments to maintain the lifestyle of a partner she is no longer with.

That is ... wow. Ouch.

I suppose this is no different than what men historically went through with alimony, watching part of their paychecks disappear to an ex-spouse they were no longer with and may not have remained on anything resembling amicable terms with. But it's a shock to me to see the same dynamic play out now, in an era in which I've grown accustomed to greater independence in marriage.

It's also a nasty wake-up call. I know marriage is a serious legal commitment. I know joint-signing financial obligations is a serious legal commitment. But it's sobering to see how much those decisions can bite you when things turn in an unexpected way with the person you're committing to and with. And I hate that in so many of the breakups I've seen this year, the women consistently get screwed.

It seems like this is the odd dark side of our relatively comparable earning power. I remember a smattering of divorces among my parents' friends -- a few, in particular, that were the classic cliché of Man Throwing Over Steadfast Wife for Shiny New One. In those cases, alimony and other financial obligations made sense: if one partner had no opportunity to have a career and was left stranded without one, then yes, the departing partner should still have obligations. And obviously, it's a whole different game when kids are involved, since there's no question that parents have responsibilities, financial and beyond, that persist even if their marriage does not.

But in the breakups among my friends, what I'm seeing is a trend of women left on the hook for obligations incurred by boyfriends or husbands who are simply failing to be fully functional, financially responsible adults. (I'm not saying that judgmentally. God knows I have been through periods of being Fiscally Unsound, and I'm fully aware that a lot of luck is involved with me being as relatively financially secure as I now am.) For example, many of my friends have co-signed loans for partners with weak credit -- and then, when the relationship dissolves, they're stuck with that obligation.

I don't know exactly where I'm going with this train of thought, or what the answer is. I suppose the flat reality is that divorce is messy and inevitably unfair, in any era or set of circumstances. But it has driven home the point that before you put yourself on the hook for any major financial obligation, to anyone, even your spouse, you need to think through all the worst-case-scenario ramifications and make a conscious decision about your willingness to risk them.

Getting scammed in Vegas

Or, "how I managed to (almost) lose money in the casino without so much as playing the slot machines."

I'm in Las Vegas this week covering a software conference. Vegas is, under the best of circumstances, not one of my favourite places, and for an assortment of reasons, this week is far from The Best of Circumstances. Feeling nauseous and mildly flu-like this morning, I decided to briefly escape the conference to hunt down some soup and hide with my book.

A minute or so after I sat down at The Noodle Shop (it sounded like a promising place for finding soup), another solo diner was seated at a table behind mine. Thirty seconds later, she was descending on mine.

"I don't want to eat alone!" she announced loudly. "Girls shouldn't eat alone! Can I sit with you?" she asked, as she sat down.

Well, ug. It had been a yucky morning. I was feeling sick. My brain was screaming "I'm an introvert in a cranky mood! No! Go away!"

But I am a polite introvert. So I sighed, forced a smile and said ok.

She proceeded to generally be loud, demanding and talkative. I said as little as I could get away with, trying to will the food to arrive fast so I could eat and escape, as she rattled on in a spacey way and I tried to melt into the carpet.

Here's where I should have twigged sooner something was up: She kept trying to involve me in her scene. Touching my arm. Trying to foist an appetizer on me, despite my strained insistence that no, really, I was feeling ill. Overall, creating the impression that we were actually dining together as a party.

And then, after the dishes arrived and she'd munched through most of hers, she stood up, announced she had an appointment, and walked out.

With me sitting there with a check.

Arugh. I was at that point so worn out and startled that it took me a full minute to realise what she'd engineered.

And then the feeling of stupidity set in. I live in New York. I have heard variants of almost every possible scam tried out on street corners and subways. I don't fall for them. But I'd managed to fall for this one.

Arugh.

My first inclination was to just pay the damn bill and be done with it. I'm traveling for work, most of my costs are being expensed, I could either find a way to write it off or just eat the $20.

But the principle of the thing annoyed me. I decided to see what would happen if I asked the waiter for a separate check. I think the restaurant staff saw what the woman had pulled, and the waiter brought me a check for just my side of the bill, quietly cleared away her side, and ignored it. I left a very nice tip.

So, in the end, the restaurant ate the loss, not me. But still. Just the kicker I needed for my Annoying Frustrating No Good Very Bad Day. And now I have learned the unpleasant way: If someone plants themselves at your table in a restaurant (especially in a place like Vegas), ask for separate checks straight off -- or fight down the polite impulses and tell them you intend to eat alone.

A really new spin on branch banking

By way of reader Laurie Amster-Burton comes this wacky news about ING Cafes: retail locations for my new sort-of bank, where they invite you to enjoy a cheap coffee, free Internet, and explore their financial products.

I had never heard of this before (thanks Laurie!), but there is apparently an ING Cafe in NYC. Clearly, a Birds & Bills field trip is required!

I'm actually on my way out of my brief financial relationship with ING. My first direct-deposit paycheck arrived safely at WaMu last Friday, so it looks like all systems are go to declare that my fully operational new bank. Getting the last of my money out of NetBank proved surprisingly painless, despite the whole scary FDIC-shutdown craziness: Since my funds were well below the $100,000 insurance cap, I was able to simply write myself a check for my account balance and cash it with WaMu. I left a ceremonial $1 in the account. I'm kind of curious to see how long ING will consider me a customer, with my $1 investment.

Wow

My bank went bankrupt.

I can't exactly claim I didn't see the writing on the wall, but still. It's a bit of a shock to go to your bank's website to check your account and instead find a shut-down notice from the FDIC.

This appears to be one of the largest bank failures (but not the very largest) in modern times. I'm digging around for references. This encyclopedia.com article has data charts suggesting that since 1980, only three banks with assets of over $1 billion have failed, none since 1992. Netbank had $2.3 billion on deposit.

What happened? The best I can suss out without prolonged digging is that Netbank made big bets on the mortgage business and suffered for it when the housing market began collapsing. Netbank's regulator, the Office of Thrift Supervision, put out a press release Friday attributing Netbank's heavy losses to "early payment defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls, and failed business strategies." Ouch.

I mused a few weeks ago that Netbank's announced purchase by EverBank didn't seem to be happening very quickly. I was a few days early -- three days after I posted that, Everbank cancelled the deal, saying Netbank was too distressed to meet closing conditions. Had I been paying attention to Netbank news, I might have noticed the Atlanta Journal-Constitution piece saying the next likely step would be an FDIC intervention.

Personally, I won't lose anything in this mess. The FDIC insures accounts up to $100,000, and I had far, far (far) less in my Netbank account even at peak usage. As mentioned here previously, I was in the process of moving to WaMu, since I didn't want to migrate to EverBank. Talk about lucky timing: I cancelled my direct deposit two weeks ago. It isn't yet active at WaMu, but the paycheck I got today (a live check) was the first in years not to go straight into my Netbank account.

I'm left with about $240 tied up in my Netbank account. ING is acquiring Netbank's insured deposits (for, literally, a penny on the dollar). I'm waiting to find out how that will work, but it may actually be remarkably painless. I'd initially assumed I'd have to wait for my account to transfer to ING's system and the reissuance of an ATM card, checking account number, etc etc, but the FDIC FAQ claims my debit card and checks will continue working without interruption. If that's so, then it seems ING is physically gaining access to Netbank's systems. In that case, I think I can write a check to myself for everything left in my Netbank account (once the website resurrects and I can find out how much that is), deposit it at WaMu, and be done with it.

Not everyone will be so lucky. Of Netbank's 104,000 customers, 1,500 had accounts exceeding insurance limits, totaling $109 million. The limits -- $100,000 per person -- sound hefty, but not when you look at them in terms of a life savings. The Pittsburg Post-Gazette had a scary, sad story about a retired local citizen who saw his $521,000 nest egg vanish in this year's other bank bankruptcy, the fall of Pittsburgh's Metropolitan Savings Bank.

RIP Netbank. I was a customer for eight years; this isn't how I thought our business relationship would end.

Kicking Mint.com's tires

For any who haven't heard of it yet, Mint.com is a site that aggregates all your financial accounts in one centralize portal.

I first came across Mint.com a few months ago, and had a lingering beta code I hadn't yet gotten around to using. I see they went public with a splash last week, winning the TechCrunch conference demothingie, and the resulting flood of blog attention reminded me that I should go give Mint a try. So I signed up last week (after the website crawled back from the lag-and-crash slashdot effect winning the conference had), imported a batch o' financial data, and started poking around.

Here's the disclosure part of my Mint tire-kicking: Mint initially popped up on my radar as a direct competitor to a fledgling personal-finance start-up I've been doing some consulting work for. I got involved because I liked the idea of a website that will let you centrally manage a zillion financial accounts and optimize your money management. Some months down the road, I found out about Mint and how it's also working toward that goal. Yeep.

So, I have a direct interest in not having Mint be the ultimate perfect site for managing finances. On the other hand, I also have a direct interest in finding a site that will do that (it's a service I really want, dammit!), and as a personal-finance blogger and journalist, I want to check out anything that pops up in the field.

I think this is a fairly objective rundown of my impressions after a few days of working with Mint, but -- you've been forewarned. I may be biased. One important caveat: I haven't seen the demos and feature set yet for the Mint competitor I'm working with. My consulting is on editorial stuff only. So, where I criticize Mint features, I'm not trying to cast aspersions on a gap Rival Site fills; I honestly have no idea whatsoever whether they'll do better at the areas I see as flawed or not. My criticisms are based solely on what areas of functionality I find lacking for the ways I, personally, would like to use a site like this.

First, The Good Parts

It looks great. Full credit to their design team. Look-and-feel is no small thing; people have come up with all kinds of blather about what makes an application "Web 2.0," but to me, the biggest change I've seen in modern Web apps is a realization that design matters. Ugly, kludgy things are frustrating to use; we put up with it for years because we wanted the functionality software offered, but now that it's clear good aesthetic appeal is possible in software and Web apps, there's no excuse.

Also, good design costs money. I find that I trust sites more if they've obviously put in the resources to make themselves attractive -- and if I'm going to hand over the keys to my financial kingdom to a website, I'd better trust it. Mint's design (and, while we're at it, their URL -- I'm sure snagging that was pricey) suggests that they're a serious venture with resources.

Mint's account import features are pretty painless. Pop in logins and passwords, click buttons and poof! It took me about 10 minutes to populate Mint with two checking accounts and three credit cards. Within 10 minutes, I had a pretty robust data set for Mint to start mining.

The snazziest thing Mint does is automatically categorize your spending and offer dashboard-like graphs and analytics. For me, this is a fun toy. For someone actually trying to stick to a defined budget in various categories, it could be a very helpful tracking tool. (As I've mentioned previously, I don't budget.)

The big advantage of having all my accounts centralized in one interface, for me, is the ability to get a quick, high-level overview of what's happening. Mint seems more geared toward financial analytics than management. I don't see tools for, say, making a payment on a card directly from the Mint interface, or for aggregating due dates so I can see what I owe next. But if I want to just glance over all my accounts, and make sure there's no giant unexpected spikes (since we all know how attractive financial thieves find my accounts), this is a great timesaver.

Also, I like Mint's data-centralizing approach. Lots of people probably use Quicken to do similar things to what Mint does. But Quicken is a desktop app, which limits its accessibility to one PC, and it requires either data entry or synchronization. If that works for you, great. I'm lazy. It doesn't work for me. Mint automatically retrieves data from all the accounts you give it access to. I can neglect it, come back weeks later, and not have to fight through data catch-up.

The Less Good Parts

Mint is in beta, and I'm a big believer in incremental development, so I don't expect every possible feature to be in the application now. But I don't know what the future development plans and priorities are, and as Mint stands right now, it strikes me as a one-trick pony.

Mint gives you a neat set of analytics about your spending: how your current monthly spending tracks against your past spending patterns, how your cash-vs-debt ratio is doing, and so on. In addition to giving users fancy graphs and widgets, Mint uses this information to look for savings opportunities: It compares your info against some sort of data set of other available financial products, and makes suggestions.

This is both really clever and really problematic.

Mint is a free service. Mint says it plans to stay free and make its money on referral commissions from the offers shown on its "ways to save" page. This implies Mint will never show me an offer on that page from a financial services company that isn't an affiliate or advertiser of Mint. It also means those offers may or may not really fit my individual financial needs.

Mint currently has two offers showing right now for me, which it claims would save me $4,202 annually. So let's take a look at those offers.

The first offer suggests I switch my American Express card for a Discover card. Doing so gets me away from American Express's usurious 30.34% interest rate and into a 0% rate at Discover, potentially saving me $1,688 annually in forecast interest charges based on my usage pattern. Mint's calculator also adds in $515 in estimated cash-back payments from Discover.

Here's the flaws in that savings logic: The 0 percent APR is, of course, a six-month introductory one. After that, Discover's website puts the average APR at up to 18.99%. That's better than Amex's, but still a long way from 0%.

Also, if I wanted a Discover card, I would already have one. I did some pretty careful comparison shopping before picking my Amex IN NYC card as my primary plastic. Discover would be accepted at far fewer places than my Amex; I couldn't use it as a universal card as I can with the Amex for (almost) all purchases. And my Amex racks up annual rewards equivalent or better than the $500 or so in annual cash back Discover is dangling

So, Discover isn't a good fit. The second offer, swapping my Time Warner cable/Internet and Verizon phone combo for a Time Warner "All the Best" package is slightly more intriguing, but that involves swapping my landline for a digital one, and that's a complicated headache I'm going to postpone thinking about.

Overall, though, my criticism stands: I don't like the blurry line between "savings optimization service" and "advertorial engine."

If the savings offers are basically advertising window dressing underwriting Mint's core service, fine; I can live with that. But I don't know that the core service -- centralized accounts and pretty graphs -- are compelling enough to make me a regular Mint user. If identifying financial product savings opportunities are part of what Mint sees as its core service, I think the product analysis needs to be expanded beyond only those advertisers will pay to serve up.

My other big Mint criticism: As it stands now, it doesn't really track your financial life comprehensively. Part of what I would like in a financial portal is an ability to get a sense of how my longer-range financial pieces fit together. Mint is good for lining up "day to day" accounts: checking, savings and credit cards. But what do I do with my 401k? My student loans? My HSA (health savings account)? Mint's service doesn't really seem geared toward dealing with those kinds of long-term, low-daily-activity accounts.

The Uncertain

Ye gods and fishies, this is getting long. I'll just briefly touch on two other issues, and save any future observations on Mint for another post:

-Security: The immediate, kneejerk reaction many people seem to have to Mint is that aggregating all your financial logins in one place is the height of security stupidity. "One hack away from being an atom-bomb of identity theft" is how one Consumerist commenter put it.

I think that's a misguided, or at least superficial, concern. I haven't done a security dissection, but Mint doesn't seem to allow any easy reverse-engineering of stored passwords. The site doesn't display any of my logins, passwords and account numbers. To transactionally do anything with any of those accounts, I have to go offsite and log in at the provider's webpage. If someone got hold of my Mint login and password, they could see all of my transactions and get a snapshot of my financial life, but it doesn't look like they could immediately then rip off my accounts and wreak havoc with them. Sure, a sophisticated hacker could probably make all sorts of trouble if they got into Mint's infrastructure, but frankly, hackers routinely get into and make all sorts of trouble with the infrastructure of all kinds of financial services companies. I don't see Mint as any riskier than, say, having my 401k, credit card and bank accounts accessible at those institutions' Web sites.

-The future: Mint is currently running on venture-capital funding. The VC exit strategy in the Web 1.0 boom was "IPO." The VC exit strategy in the Web 2.0 boom is "get acquired."

I'm skeptical (perhaps wrongly; I dunno, I'm not a VC and haven't seen Mint's pitch presentation) that Mint's affiliate referral scheme will ever deliver booming revenue. Unless the company plans to later change its business model to introduce additional revenue streams, the likely real plan for monetizing the service is to sell it off.

It's not a bad plan. Google, Yahoo, and other Web Goliaths like to snap up sparkly startups, and Mint has a very slick interface and targets a very sought-after user demographic. I will be very unsurprised if it gets acquired within a year.

But someone, at some point, is going to have to monetize Mint, most likely through advertising. And advertising, as Mint's current offers section shows, has inherent conflicts-of-interest with optimizing your financial planning.

P.S.: I know Mint isn't the only thing out there doing what it does; other competitors include Wesabe and Cake Financial. I intend to check out Wesabe soon; Cake I'll probably avoid because it's geared toward investors, and my only investment is my 401k. Anything else I should be watching? Let me know in comments ...

The banking bake-off winner: WaMu

Sorry for the hibernation. I wrapped up my mad travel jag ... and promptly got consumed by freelance projects. Bad blogger! I promise to talk more here again.

I did finally solve my new-bank selection dilemma (detailed in part 1 and part 2 of my "eek Netbank got sold!" drama). The winner was WaMu (are they still technically Washington Mutual?), which met all my "I refuse to pay fees of pretty much any kind" criteria.

On paper, at least. WaMu's documentation is frustratingly contradictory on whether or not it charges fees for using non-WaMu ATMs; I suspect it's a holdover from their old account structure. I'm anecdotally assured that the WaMu Free Checking account is indeed fee-free.

Converting bank accounts is a sloooow process. Unsurprisingly. I signed up at WaMu's website around Aug 19. It took 15 minutes. But confirming my initial-deposit transfer from NetBank took about a week. Then it was another week for my ATM card to arrive. My PIN, sent under separate cover, was a few days more. Finally, this week, my starter checks arrived. All up, about three weeks to gather the bits and pieces needed to start my migration.

Today I went to a WaMu branch and changed my PIN from the randomly generated one to my preferred PIN, and made my first check deposit. I also used a voided starter check to fill out new direct-deposit forms. My company says it'll take 21 days to get that moved. So, it looks like another month before I can really move my financial life out of NetBank and over to WaMu.

Going with WaMu was as much an emotional decision as a straight financial one. Other banks like the Schwab Investor Checking account offer more financially advantageous things, like higher interest rates and reimbursement for outside ATM fees. But ... I've never had a local bank. Ever since college, I've used Net banks. (At the time, I couldn't find a single local bank without monthly service fees for low balances, which I am adamantly, categorically opposed to.) The idea of going to a local branch to deal with any customer-service issues, as I did this morning to change my PIN, is kind of novel. And while Internet banks have always worked out well for me financially, the one problem I keep running into is them getting sold out from beneath me. I'm not sure how much I trust banks with too-good-to-last terms like Schwab's.

So, I'm giving the WaMu thing a try. Will report back on how it works out!

Tangentially: I meant to move faster on this, since NetBank's initial Everbank announcement said it would do the conversion by "late summer," and for convenience's sake, it seems best for me to get out before that happens. But it's now September, beyond what anyone can reasonably call "late summer" ... and my NetBank account seems to be chugging on. So I checked today to see if they had an update, and found a terse little message linked in tiny print from the front page: " When we announced our agreement with EverBank in May, we expected to first complete the sale of other bank investments to have the means necessary to meet the terms of the EverBank agreement. The sale of these investments is taking longer than originally anticipated."

Uh oh. And I see NetBank is getting Nasdaq nastygrams, too. Whatever is happening under the hood over there does not seem good.

Using Gmail tags for tax document tracking

I have a long post on mortgages and general financial implosion in the works, but I wanted to throw up a quickie first about a handy Gmail trick I'm making heavy use of. Last year was the first in which I itemized my taxes, and the first time I needed to have a record of charitable dominations -- which, er, I didn't have, because I didn't realise I'd be itemizing and able to deduct. Forewarned is forearmed and all that, so this year, I'm keeping track of what I donate.

But keeping track of lots of bits of paper is a pain. Fortunately, I've found that I don't have to. I don't know if my pattern is the common one, but almost every donation I make is at least originated online, and often fulfilled that way. Which means that every donation generates an e-mail trail, with a thank-you and receipt. I created a charity tag in gmail to archive the e-mailed receipts, and voila. Instant filing system for donation records. Come tax time, I can just click my "charity" tag and tally up my donations.

A great takedown of an atrocious health-care reform idea

I'm on the final stretch of my packed summer travel (hi from San Francisco, from the LinuxWorld press room), so my brain remains scattered. Tomorrow I'll chime in with thoughts on this week's "jumbo loans go boom" news, but I wanted to quickly drop in and point out a truly excellent article in today's Slate: "I Can Get It for You Retail," a dead-on critique of the health-care-reform plan backed by Rudy Giuliani and several other Republicans.

Dan Gross carefully dissects the fatal flaw in health care policy proposals that call for tax breaks and other incentives to encourage more people to buy individual health insurance: individual shopping is disastrously ill-suited to the economics of health insurance. "Economics of scale" is a familiar enough concept, and so is "collective bargaining." Unions exist (or, they did once upon a time ...) because workers realized that employees who are individually disposable gain power by acting as a bloc.

A cancer patient running up six-figure annual medical bills will never be a profitable customer. Companies, naturally, do whatever they can to offload unprofitable customers -- and when we, through the representatives we elect to govern, put legal constraints in place to limit the actions companies can take, they often take them anyway and gamble that they'll gain enough to outweigh the possible consequences of a lost lawsuit.

The only way to turn a cancer patient from an unprofitable client that insurers will fight to dump into a valuable customer is to bundle that patient in with a bunch of other customers and "sell" them to the insurer as a group. In my ideal system, we'd have single-payer universal coverage and treat the entire U.S. citizenry as one insured mass. In the current, barely-hanging-in-there system, we at least band people together into corporate blocs. Very helpful for me and David, who both work for sizable companies; not so helpful for the millions of people employed by small businesses -- or, even more precariously from an insurance perspective, employed by themselves. Broken as the current system is, breaking the blocs up still further and encouraging even more individual insurance would be a tremendous, destructive step backward.

B&B goes to BB&B

I just got back from a week away, my seventh flying-out-of-town trip in the past three months. The household neglect finally caught up: I crossed the apartment threshold last night and wondered what kind of animal sacrifices had been going on. Apparently the target gods rejected them all and left the slaughtered bits scattered across our living-room floor.

In despair, I cancelled my Monday evening plans and resolved to spend the night attacking the house with Pine-Sol, the dustbuster, bleach and maybe some healing crystals.

Causing me particular angst was the bathroom. Our shower curtain has long been a cleaning bane: no matter what I do to it, a week later, it's covered in a fine layer of mold and dirt. This time, the dirt looked so advanced I was pretty sure it was not just sentient but actively pursing MENSA membership.

This dirt was going to take me HOURS to fight back. I muttered dark curses and checked my supply of sponges and 409.

Then, I had a brainstorm: Our much-hated shower curtains are actually just liners. Cheap liners. The kind of cheap liners you can buy for $6 at a ritzy overpriced Manhattan homewares store (*cough* Bed Bath & Beyond *cough*) or probably for 99 cents apiece at any decent dollar shop.

Why was I going to spend two hours (seriously, that's what it took last time, to get them not even clean but relatively fit for exposure to guests) attacking with nasty chemicals liners I could just replace quite cheaply?

And so, tonight, instead of heading home early to clean, I made a Bed Bath & Beyond pilgrimage and bought new liners for $12. The environmentalist in me felt vaguely guilty for throwing out something I could have cleaned and reused. The pragmatist on me snipped that I probably wreaked more environmental havoc with the rental car I drove last week, and suggested I shut up and enjoy the quick, easy and cheap solution.

Our bathroom is now vastly improved and probably no longer a toxic threat to all surrounding life forms.

The moral of the story: Sometimes, you can solve your problems by throwing money at them.

Nasty change to FICO scoring model coming

I'm late on this news, which I just stumbled across: FICO 08, the next update to the FICO algorithm used to compute credit scores, will drop "authorized user" accounts from its scoring model. This is going to screw a number of people, including me and David.

I've written before about how FICO scores are calculated, and how one of the faster ways to build a credit history or repair a damaged one is to become an authorized user on a credit card owned by someone else with a strong credit history. Authorized user accounts are distinct from joint accounts because the authorized user has no legal responsibility for the account -- they're given a card and can use it, and the complete credit history for the card (for all users) is reported to credit agencies and goes on the authorized user's credit record, but only the primary cardholder is legally responsible for paying the balance. If you don't want or can't get your own credit card, but do want to establish a credit history, piggybacking on another person's account as an authorized user has been a nice quasi-loophole.

In my first FICO post, I noted, "Those 'fast credit repair' services that splash ads all over the Web are scammy. There's legally nothing any third party can do to change your score." Oops. Seems some agencies figured out that they could increase clients scores by listing them as authorized users on "rented" credit card accounts in good standing. An AP article on the practice cites InstantCreditBuilders.com as one such agency.

One this practice started drawing press, FICO's creator, Fair Isaac, clamped down. It announced in June that FICO 08, which begins rolling out to credit reporting agencies (Experian, Equifax and TransUnion) in September, won't factor in authorized user accounts.

This could seriously torpedo David's credit score. David, sensibly, doesn't want a credit card -- he'd rather only spend money he knows he has. But a few years ago, I realised this had left him with no credit record whatsoever, and therefore, a low score. (Since credit-granting agencies want to know what kind of a track record you have paying back debts, you have to actually use credit to generate a record and receive a high score. Using no credit at all can leave you with as low a credit score as someone who has a trail of late payments and other credit problems.) So I added him as an authorized user on two of my cards and presto, score.

I suppose I'll tackle this by calling Amex and seeing if David can be made a full joint user on my Amex, which had pretty much already turned into a joint account anyway. Still, I imagine this change could seriously ding the people "authorized user" status was intended for -- young adults tagging along on a parent's card and spouses who don't maintain their own credit cards.

Why all the banks are suddenly asking security questions

I've grumbled before about the security questions banks are increasingly introducing as part of their anti-phishing online security measures. So many popped up so quickly I figured there must be some kind of regulation driving the floor -- and sure enough, there is.

It turns out that in Oct. 2005, the Federal Financial Institutions Examination Council (FFIEC -- an interagency federal regulatory body) adopted a new guidance policy suggesting banks use "multi-factor authentication," which is industry jargon for "more than just an ID and password."

Genuine multi-factor authentication systems draw on at least two of three different authentication systems: information the user knows (a password, a PIN, the answer to a security question), something the user physically possesses (an ATM card, a password-generating key fob), and something the user is (biometric identifiers like fingerprints or retina scans). FFIEC's guidance doesn't tell banks what system to implement, but it calls single-factor authentication "inadequate for high-risk transactions."
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Security questions aren't true multi-factor authentication, because they rely on only one authentication axis, "information the user knows." The most pragmatic way to implement genuine multi-factor authentication for online transactions would be for banks to use geo-location tools or IP address locking to restrict account access to registered "home" machines. However, customers would understandably freak out about this -- travel and dynamic IP allocations would make it a nightmare. Issuing key fobs with dynamically changing passwords, a method some companies use to secure access to their internal networks, is another option, but also a complicated and costly one. I have financial accounts in at least eight places. Do I really want to try to keep track of eight password-generating gadgets? And do the banks want to spend zillions replacing them and fielding irate customer-service calls?

So, instead, banks are instead looking to comply with FFIEC's edicts with what the agency calls "layered security," which FFIEC considers sufficient to meet its requirements, even though it's not as strong as the multi-factor authentication it recommends. Banks were given until the end of 2006 to put systems in place, which is why so many went into place in such a short timeframe.

I appreciate that banks are making a genuine stab at protection by using esoteric questions for their verifications, but it's also getting massively frustrating. Today's rant was promoted by logging into my Providian credit card account and discovering that it now wants me to pick questions and give it answers. The problem is, I can't answer most of the questions it asks.

What was your favorite college year?

I have no idea, and how would I count college "years," since I took ten to finish my degree?

What was the last name of your first grade teacher?

I have absolutely no idea. I can barely remember the last name of my current boss.

What is your eldest child's middle name?

I don't have kids. David, does River (our eldest cat) have a middle name?

What is the middle name of your eldest sibling?

I don't have an older sibling. I suppose I can use this question and go with the middle name of my *only* sibling.

What were your wedding colors?

Wedding colors!?! They're kidding, right? People have wedding colors!?!

What is the first name of your grandfather (your mother's father)?

I have no idea -- all my maternal grandparents died before I was born, and my mom also isn't around to ask.

Sigh. I think I can scrape three questions out of these to answer, but just barely, and only by cheating (cats can count as kids, right?) and making up things I seriously hope I'll remember. This could get very annoying.

Today's GRR award winner: JetBlue

One of my first Birds & Bills posts was about how frequent flyer miles are a depreciating currency. The only motivation for airlines to make their frequent-flyer programs attractive is to please customers. Can anyone think of an industry worse at keep customers happy than airlines? With margins grim, fewer flights scheduled, and more flights flying at capacity than ever before, airlines have a financial disincentive to make those miles easy to redeem -- and the pain of redeeming them has long been a customer gripe. Blackout dates and small ticket allotments to miles-redeeming passengers are a chronic complaint.

So, really, I don't know why I expected any differently from JetBlue, except that I still sort of buy their marketing hype about trying to be a different kind of airline. About 18 months ago, I had a notably good customer-service experience with them: I was trying to fly to Boston (in December) the day a massive snowstorm hit. By 7:30pm, our 10am JetBlue flight was still grounded -- and I was officially no chance of making the 8pm dinner I was flying to Boston to attend. I opted to cancel my trip, and called JetBlue to see if I could get a refund. Which they gave, easily. Since my ticket was nonrefundable, I'd figured a credit for a future flight was the best I could hope for, so yay JetBlue.

This week, though, they are not dazzling me. Last year, I flew JetBlue a ton back and forth to the West Coast, and racked up enough points in their frequent flyer system for a free ticket (well, technically, two -- you get two one-ways, which can be used together or separately). JetBlue's frequent-flyer program is simpler than other airlines, but also stricter: you have one year to use points before they expire, and one year to use your free flight before it expires.

Actually using your free flight, however, is every bit as heinous as on other airlines. I don't know what kind of allotment JetBlue is giving per flight for points-redeemers, but it doesn't seem to be good. I've tried four times this year to use one of my free-flight segments -- most recently, for either a flight from Seattle to NYC anytime Sunday, August 12 or for a flight from Portland, Maine, to NYC anytime on Thursday, July 26. Both trips show plenty of flight availability -- multiple flights each day, still selling tickets -- when I search on JetBlue. When I search for award travel, though, it all dries up. Sorry, no flights available for booking. GRRR. What use are my points if I can't ever actually use them?

I finally, grumpily, used the points for the one flight from Portland to NYC that was available for award travel on Wednesday the 26th, a day earlier than I really wanted to book the flight. So, I did at least get my free ticket. But I am grumped about the limitations. It seems absurd that none of the four trips I tried to use the free ticket on worked out.

Which is why I think air-miles credit cards are for suckers. Air miles are one of the hardest-to-use, most-restrictive, most limited rewards systems going. In contrast, you never get the runaround trying to get your cash-back awards or redeem credit-card points for Amazon.com credit or restaurant gift certificates (my standard use of In NYC awards points). I'd rather pay cash for airline tickets and use my points for other, less fraught things.

When bad credit works to your advantage

Proper posting will resume sometime tomorrow, but until then, I thought I'd at least drop a quick line with a link to an article that amused me: "Some people can buy iPhone without 2-year contract"

It seems that if your credit rating is bad enough for you not to qualify for the two-year contract AT&T (aka Cingular) requires for the iPhone, they're still willing to take your money -- sans contract, as many cell-phone buyers would probably prefer. As Reuters put it:

The companies did not widely publicize that customers who do not pass its credit test have the option to pay for their service on a month-by-month basis, escaping what some consider a restrictive two-year plan.

If you don't qualify for the two-year plan, AT&T will offer you a prepaid plan. It's more expensive than service would be under a standard monthly contract, but it also doesn't have the nasty huge cancellation fees providers stick in those contracts.

I wonder if AT&T will let people with good credit go for the prepaid option, if they know about it and push for it ...

Just in case I'd forgotten about the necessity of that emergency fund

Anyone with an interest in the media landscape has probably seen the headlines about what a dire economic state the journalism industry is in.

Virtually every major newspaper has undergone drastic layoffs, longstanding chains are being sold and dismantled, and even the industry's pinnacles are under assault. A few years ago, most people would probably agree that the top four papers in the country were the New York Times, the Washington Post, the Wall Street Journal, and the LA Times. Since then, the Washington Post has been dinged (though not decimated) by downsizing, the LA Times has had its highly regarded top editorial management tossed out so the Tribune Company can have freer reign with its cost-cutting, and the WSJ is widely viewed as likely to be sold, either to Murdoch or whatever white knight can be found to keep it out of his hands.

Those white knights don't tend to work out too well. It's deeply sad to look at how many names in the newspaper industry, names that once represented great journalistic franchises, now stand for cautionary tales. The Philadelphia Inquirer. The Star-Tribune. The Baltimore Sun. The Santa Barbara News-Press. Reading Romenesko (the venerable blog tracking media-industry news) these days is like flipping through the obits.

And last week, I got a reminder that my little pocket of the media world isn't as immune as I'd thought. My magazine's parent company implemented a big restructuring. The dust settled with half my magazine's staff laid off, with the brunt of the cuts falling on our most senior and most experienced staff.

I'm still employed, but my job and daily work environment are a whole lot different than they were a week ago. It was also a reminder that mine is not a career to grow old in. Journalism eats its elders; skill and acclaim are no protection. One you've been around long enough to command a significant salary, you basically have a target painted on your forehead.

Which means I'd really better step up those savings. My only protection against catastrophe down the road is having enough savings so that my financial infrastructure isn't dependent on paychecks from a career that could easily collapse.

Auditioning new banks, part 2

Here's the list of what I've looked at and why I've scratched them off my list. Banks in italics are still in the running. WaMu has the lead right now.

(Sorry for the lag; the last entry wasn't meant to be a cliffhanger. Once again, travel had me brainfried and distracted.)

But first, a word of griping -- why do banks make their terms so damn hard to excavate? I mean, yes, I realize displaying all the fees you try to gouge out right up front is not a good sales tactic, but it's absurd that I can't find all the fine print on some sites after an hour of digging around. GRR.

• Bank of America: Charges fees for using outside ATMs
  
  
• Citibank: Charges fees for using outside ATMs
  
  
• Chase: Charges fees for using outside ATMs
  
  
• Charles Schwab Bank Investor Checking: Online banks don't make me nervous. However, investor-focused banks do make me nervous, since I'm very much not the target audience. I don't have and don't ever plan to have a brokerage account. (Any savings I eventually accumulate will have to live in money market accounts, CDs or, at the most adventurous, mutual funds. Among many other considerations, I'm a business journalist, and it's a deeply bad idea for business journalists to own stock.)
  
  On the other hand, Charles Schwab appears to be offering an insanely good deal: No monthly service fees, free online bill pay, free ATM use, and unlimited ATM fee rebates. That last term sounds so absurdly good I don't expect it to last long, but it'd be fun while it did.
  
  And, woah, I just clicked on their Bill Pay demo -- it looks like the interface is the same as NetBank's! I suppose I shouldn't be shocked; banking system software seems like a sensible thing for financial services providers to acquire from a third-party, which can sell it off to multiple places. But hmm, it would be nice to stick with a UI I already know and like.
  
  So, is anyone using Schwab? Is there any sticking point I'm missing? (Schwab is one of the worst offenders in the burying-the-fine-print camp -- their site doesn't offer much in the way of details. After much prying, I finally found their Schwab Bank Deposit Account Agreement, dated Sept. 2006, which I hope makes it current.) How do they handle overdraft? The Bank Deposit Account Agreement booklet makes reference to various things, including an Overdraft Credit Line, which is one of the things on my "would be nice" list.
  
  
• Commerce Bank: Is it bad of me to cross Commerce off my list solely because their website looks so 1999?
  
  
• EverBank: This is the bank that bought NetBank and will automatically inherit my account sometime this summer if I don't move it. Staying put would be the path of least resistance, and EverBank gets good reviews and has no ATM surcharges -- it even reimburses up to $6 per month. However. It charges a $4.95 monthly fee to use online bill pay if your average daily balance dips below $1,500, and as mentioned in my last post, no monthly fees is one of my sticking points. So it gets crossed off my list.
  
  
• ING Direct Electric Orange: ING gets bonus points for having the clearest disclosures I could find. Its FAQ is impressively detailed and forthright about detailing exactly what potential changes you could incur. It also clearly offers no-fee overdraft protection. However, it's off my list because it doesn't easily support paper check writing, and paper checks are still how I pay rent each month.
  
  
• TD Banknorth: Like Schwab, TD Banknorth appears to have crazy good terms -- its SimplyFree Checking says it has no minimum balance requirements, no monthly fees, free bill pay, and an ATM card that not only has no outside charges, it reimburses bank fees. Hmm. Anyone use them? Any catches?
  
  
• UmbrellaBank: Also reimburses ATM charges, up to $7.50 per statement cycle. It also has overdraft protection, one of my "would be nice" features. A definite possibility. The no-monthly-fee option is only available with recurring direct deposit, but that clause isn't a problem for me.
  
  
• Wachovia: Endorsed by my sister, but charges fees for using outside ATMs, so off my list it goes.
  
  
• WaMu: This is what I'm leaning toward. WaMu has ATMs near my apartment and my office, and it would be a novel and fun thing for me to actually have a local bank with local branches. Their free checking has no minimum balance and free online bill pay.
  
  The big question: Does WaMu charge for withdrawals from rival ATMs? Once again, their website totally fails to clearly address the issue. It loudly advertises "Free ATM cash withdrawals worldwide," with the fine-print clarification, "WaMu will not charge ATM fees for cash withdrawals, but non-refundable ATM operator fees and foreign currency exchange and transaction fees may apply."
  
  "WaMu will not charge ATM fees for cash withdrawals" implies that they, like, won't charge, but it also could have the unspoken coda "at our ATMs" -- and I can't find the finer fine print anywhere on their site. Kim and Catherine, two local friends, left comments on my earlier entry implying that they do get charged for outside ATM use.
  
  However, WaMu launched its Free Checking campaign last year, and it looks those terms began being offered for accounts opened after 3/06. So, it's seeming likely that anyone who opens an account after that date does indeed have free use of rival ATMs -- but WaMu might not have retroactively applied that to previously opened accounts.
  
  WaMu offers one NSF fund fee waiver each year; I can't tell if they offer overdraft lines of credit. But if the free ATM use thing pans out, I'm leaning the WaMu way.
  
  

So, it looks like the remaining contenders are Charles Schwab, TD Banknorth, Umbrella Bank and WaMu. Anyone had good or bad reports? Anything I should consider and missed, or fine-print nastiness I've missed with the contenders?

Auditioning new banks, part 1

Why is NYC banking so especially heinous?

When I went looking for a local bank back in 2001, I really couldn't find anything without a monthly fee for dipping below a set minimum. Things aren't quite that dire now -- 'free' checking is catching on, and I have a few local options -- but it's also pretty clear that banks operate here differently than they do in other places, even when they're national chains.

For example, check out Citibank's EZ checking. One of its features is "Five free uses of non-Citibank ATMs." But there's a little asterisks next to that, and the fine print notes, "Applies in all markets but CA, NV and the NYC area where it's $1.50 per withdrawal."

Why? Why is NYC different? Is it simply that the competitive landscape here lets banks get away with higher fees, or is there something strange in our local banking regulations?

(And yes, as the financial reporter, I should be the one answering that question. I'll get on it, but figured I would first throw it out there and see if anyone has any insight.)

I haven't picked a new bank account yet. I've been swamped this week and have only now started doing a serious comparison. (For those who missed it, see last week's post about how my beloved NetBank is going away.)

I've gotten a lot of suggestions in the comments. To keep things straight, and potentially help others in a similar situation, I'm going to list out the banks I've considered -- and why I've crossed them off the list.

First, a recap of what I'm looking for.

Things I consider non-negotiable

• No minimum balance required to avoid monthly fees
  
• Good online account management tools
  
• No-fee online bill pay
  
• No fees for writing paper checks
  
• NO FEES FOR USING OUTSIDE ATMs. This is something of a financial moral issue for me. I wish the charges were lower, but I don't get irate about ATM operators charging fees for non-customers using their ATMs. They're proving me a service; I'm willing to pay for it. I get furious, though, about banks charging their own customers fees for using ATMs other than theirs. That's just coercive, punitive and monopolistic.
  
  This is not a financially rational position for me to be a hardliner about. I probably spend $10-$15 in an average month on upfront ATM fees -- the $1.50-$2 per-transaction I get charged by the ATM operators for using their machines. (I pay nothing on the back-end. NetBank doesn't charge for using ATMs outside its network.) I could spend less by getting a bank with good ATM coverage and using its ATMs religiously.
  
  But. I have this fiscally irrational objection to paying routine monthly fees, or paying my bank for using another bank's ATM. In exchange for avoiding those fees, I'm willing to pay more actual cash money in upfront ATM usage fees.
  
  I don't pretend this is sane. However. It's something I am surprised to find myself caring about very strongly, so I'm sticking to my guns on it.
  

Things I would really like

• Overdraft line of credit. With NetBank, I have an overdraft credit line. If I overdraft, it transfers money from the credit line. There is no NSF charge or overdraft fee -- all I pay is interest on the funds that get transferred over. This is awesome. I try not to bounce checks, of course, but it's a very nice protection to have.
  
• Good options for a money market account with the same bank. I want to open one this year, once I, er, amass some savings. For that, I will care about interest rates.
  
  

Things I don't care about

• Interest. 0% is fine by me.
  
• ATM network coverage. It would be nifty to have ATMs around where I can get money with no fees whatsoever. However, that hasn't been the case for me for the past decade. I'm used to the pain of upfront fees and willing to continue paying them.
  

This is getting hugely long, so I'll continue it in the next post.

DAMMIT, NetBank got sold!

I'm finding this out quite late -- if they e-mailed anything to customers, I didn't see it, and since I don't read newspapers in Georgia (where NetBank is based), I didn't notice it in the news. But when I logged on today to check my paycheck deposit, I noticed a tiny note on NetBank.com's front page: "Great News! NetBank announces an agreement with EverBank. Learn more."

Nothing your bank considers "Great News!" is ever actually "Great News!" The "agreement" is "we've sold out, meet your new overlords!"

@%^@!$. I've been through this before. It sucks.

In 1996, I moved to New York for college and opened up an account with the Columbia University credit union. This was my first very-own bank account beyond the local one my parents opened for me in our hometown. In high school, I never had enough money to pay much attention to the details of my checking account; I basically dragged my paychecks over to the bank, cashed them, and rationed my cash. My Columbia account was the first I'd actually be using on a regular basis.

About two months in, I realised the university credit union wasn't going to work out for me. The union had very limited and sporadic hours. If I wanted details on what was happening in my account, I needed to find time to go over during their brief periods of availability and queue up for a printout. I suppose most people with more regular finances could have just eyed the mailed monthly statements, but I had a ) lots of deposits from casual jobs coming in, and b) a spend-it-down-to-the-last-nickel fiscal strategy, which could easily go awry if anything I didn't write down went into or out of my account. I was a broke student. Knowing exactly what was happening in my account, in real-time, was important.

So I began shopping for a new bank, one with online account access, a feature the credit union lacked. And I found Security First Network Bank, an Internet-banking pioneer.

SFNB had an office and actual branch location in Atlanta, but its primary existence was virtual. It had the features I was after: the online access (of course), and most importantly, checking accounts with no fees and no minimum-balance requirements. I signed up and transferred over my life savings (about $80, I think).

People I mentioned this to at the time seemed to find it dubious. "An Internet bank?" I was asked a lot. "Is that safe?" My take: It's FDIC-backed. I don't see why it's any less safe than any other bank.

And indeed, SFNB offered me a great banking experience. This was the first time I became an actual cheerleader for a financial-services provider. I loved my online access. I loved not being charged fees by my bank for using any ATM I wanted. I loved my free checking. And, after one particular incident, I really loved customer service.

I'd been with SFNB about two years -- sometime in my junior year of college -- when they sent out a notice about a change in their banking terms. Checking accounts would now no longer be wholly free for "casual" users: to keep free checking and avoid a monthly fee, you needed to either maintain a minimum daily average or have a paycheck direct deposit set up.

Hell. I was a student; I didn't have the money to meet minimums or a regular job offering direct deposit. My work-study and internship gigs all paid with checks. But I really didn't want to go hunting for a new bank again. So, I emailed SFNB customer service, politely complaining that they should offer a student account option with exceptions. 'Right now, I'm broke and don't have a job with direct-deposit options,' I argued. 'But in a few years, I'll graduate and be far less broke. Why not earn loyalty now by offering accounts with friendly terms for students, who will later grow up into nice lucrative customers for you?'

It worked. I got a personal email back (sadly, it's since been lost to the mists of time and email crashes) from a bank executive who said this was a good idea and they'd implement it right away. And they did! My account stayed free, and when I started working full-time, my direct-deposits went straight to my beloved SFNB account.

And then, in 2001 or so, I got a "Great News!" letter in the mail. SFNB was being sold off to Centura Bank. Then I got a big letter with Centura's banking terms. They were awful. Minimum balance requirements, heavy fees, and, stupidest of all, high fees for using non-Centura ATMs. Why stupid? Centura was a Southern bank, based somewhere in the Carolinas. It had no ATMs or branches anywhere within three states of me. What in the hell was I supposed to do, hop a plane to Raleigh every time I wanted to withdraw money? (I see I'm not the only customer who was pissed off about this. I just googled and came across an epinions rant.)

Centura pretty clearly had no interest in hanging onto SFNB customers outside its geographic zone, so I sadly went looking for a new bank. I went into branches of all the major NYC banks -- at the time, Banco Popular, Chase and Citibank -- to gather literature.

All the literature was depressing. I couldn't find a single local bank willing to offer me no-minimum-balance, no-fee checking.

So I once again turned to the Internet, and found NetBank. It met all my requirements: No minimums. Good online access tools. No fees for using third-party ATMs. I signed on.

And for six years, I've been a pretty happy customer. NetBank has lots of consumer-friendly frills, like no-fee overdraft protection. If I overdraft (which I've done once or twice by accident and several times when fraud wiped my account), I don't pay any bounce fees at all; I just pay interest on the loaned overdraft funds. (This has never added up to more than 50 cents). They've also been fairly good about dealing with my two cases of ATM hacking fraud; they refunded my money both times without any grousing about how if someone was using my PIN to withdraw cash I must have given them the number, which I've heard of other people getting grilled on by their bank.

So finding out that NetBank has been sold has me deeply, deeply cranky.

As with last time, it seems the acquiring bank has zero interest in replicating the terms that made their acquired bank so attractive to its customers. EverBank's big hook appears to be high interest rates -- but I don't care about interest on my checking account. I never keep money in there for long. I just care about free checking. And EverBank's "FreeNet" accounts? Not so much with the actually free thing. If you don't maintain a $1,500 average balance, Online Bill Pay costs $4.95 a month. There may be other fees; the website is very unclear. An "account fee schedule" section refers to a $7.95 monthly fee for accounts with an average balance below $800.

I admit I'm slightly irrational on this point. I *loathe* monthly-maintenance banking fees. $4.95 is not much. I'd spend it without thinking too hard for a snack or a magazine. I already spend more than that to bank each month, since I pay upfront ATM charges for using third-party ATMs (the fees charged by the ATMs' owners -- NetBank has no fees). But those surcharges feel slightly optional -- I'm the one choosing not to hunt down lower-fee ATMs. The idea of money being automatically sucked out of my account just because I'm not meeting balance minimums enrages me. And the principle of the thing matters enough to me to justify the pain of changing banks. (New checks, rerouting my direct deposits, changing all my stored account settings, no access to cash while the changes percolate .... arugh. I am pained just thinking about it.)

So. Hell. I need a new bank. Um, anyone like theirs? My absolute core requirements are "no minimum balance requirements to avoid monthly fees, good online account access, free online bill pay." I'd also strongly prefer a bank that doesn't charge for use of outside ATMs, and one that offers overdraft protection with no bounce fees. Beyond that, I'm flexible. And I really don't care in the slightest about interest rates. Zero percent is fine by me so long as my checking is free.

The personal finance writer who irritates me the most

I grew up in Maryland reading the Washington Post, and it remains my favorite newspaper. I like the insider-baseball political coverage, the local tone (obsessive Butterstick coverage!), and the editorial choices it makes -- our Style section kicks NYT @#!, our fashion writer won the Pulitzer, and our advice columnist was named best in the country by Time magazine.

Which makes it particularly frustrating that the Post's personal-finance columnist annoys the hell out of me.

I keep trying. Today, I thought I'd take a look at "Color of Money" columnist Michelle Singletary's latest live chat transcript. Live chats are another thing I love about the Post, and I figured that I'd surely find a few things in Singletary's chat to admire or blog about.

Instead I found myself gritting my teeth. Constantly.

Singletary's basic financial philosophy seems sound: She loathes debt, and advises people to a) avoid it at all costs, and b) do whatever it takes to get out of debt, if you've succumbed and run it up. In our debt-laden culture, a stern taskmaster sounding dire warnings about debt isn't a bad thing -- most people (including me) could do with less yielding to temptation and more buckling down and saving money.

What frustrates me about Singletary's writing is her absolutism. She views debt as essentially a moral sin (direct quote: "Debt is evil. Credit is evil. You may decide it was necessary but it is evil nonetheless."), and counsels debt elimination as the absolute top financial priority for anyone in debt, No Matter What. And, further, counsels that people in debt should not spend one dollar on anything but basic food, basic shelter and life-sustaining necessities until every penny of debt is gone.

Take an example from this chat. A student about to graduate law school wrote in to say that she and her husband have saved like crazy to pay off their debts, and in three months they'll be in the clear for everything except her law-school loans. Now that they're reaching that milestone and she's about to start working and bringing in money, she realizes "we will be able to afford occasional new outfits or shoes, and other little luxuries." She wrote in to ask advice on how to wean off the austerity budget without going nuts: "how to enjoy little things while still staying on track with savings and keeping debt gone?"

Singletary's reply: forget about it. "I say you should stay on the crash diet until you pay off the student loan debt," she answered.

Another chat attendee wrote in to protest the harshness of that advice: "You cannot ask someone to never plan for a vacation, a new outfit, or a dinner out for the five to ten to twenty years it might take to pay off law school loans, (which run into six figures). She asked a reasonable question. Please give her a reasonable answer."

Singletary doesn't back off an inch in her reply. "Yes I can and have asked plenty of people to forget about vacations and eating out and whatever when they have six-figure consumer debt like student loans. It if takes years well so be it. You are not entitled to vacations, new outfits, dinner or whatever if you have massive consumer debt.." To top it off, she's snide: "Well, when you want to do my job apply to the Post."

If Singletary's absolutism were confined to debt reduction, I'd probably shrug it off as an overly aggressive response to a drastic problem. There's no question that too much debt is a dire and too-widespread problem, and I don't doubt most people are better served by erring on the side of austerity over indulgence. But her "my way is the only way" attitude carries over into territories where I see a lot more gray area -- most notably, the question of whether married/domestic couples should have joint bank accounts.

Some of her pieces on the subject are sensible and restrained. "Joined in Marriage and Finances" wisely observes that sharing finances doesn't mean you can't still each spend separately, and, a sentiment I particularly appreciate, "It's not true that a marriage has to always be a 50-50 partnership. Sometimes it's 80-20 or 10-90 or 0-100." I wholeheartedly agree with her advice to "accept that the day you get married is the day you stop being financially independent."

But I'm not convinced that joint accounts are the only acceptable financial arrangement for married couples -- and Singletary refuses to acknowledge that choices other than hers can ever be acceptable.

A particularly vivid example of this came in a chat in late 2005 on financial advice for engaged couples. Singletary opposes pre-nuptial agreements with the same vehemence she opposes separate bank accounts. A chatter wrote in to detail his financial situation and ask, "Are there other facts or legal issues regarding pre-nups we should consider?" Singletary ignored that part of the question and focused on her belief that pre-nups are a bad idea ("a prenup in my opinion is a plan to fail"). When called on that by another question-asker later in the chat ("Isn't this forum for information sharing regardless of what you personally believe?"), she blew up, and as she often does, got defensive and attacked: "I know the answer but you can't make me give the answer. And this is a forum for information AND my opinions. That's why they pay me to be a COLUMNIST. Look if you want information on a pre-nup you got to talk to an attorney and you know that. My tip is don't get one. And if you NEED one you don't need to be getting married."

The blinders of her own personal beliefs always circumscribe the advice she offers. In the recent chat, the one that had me gritting my teeth, an older chatter wrote to ask for resources to help sort through the financials of combining two finances later in life, when both partners in the marriage have substantial assets and kids from past relationships. 'Join everything' was, once again, her answer, with no recognition of the situation's nuances.

But where I really lost it -- and fired up this blog post -- was when I saw her response to someone looking for guidance on helping a niece about to gradate college make smart choices about the financial basics (car for transportation, work-appropriate wardrobe, security deposit and basic furnishings for an apartment, and so on). The questioner had advised the niece that if she really, really needed to put things on credit cards, she also needed to have a plan mapped out for paying off the charges, preferably within a year.

Singletary's advice was starker: "She can sleep on a bunch of blankets until she can afford furniture (and not on credit). I did."

You know what, Singletary? That's a reasonable option to suggest, but it's not the only option. Thriftiness is a valuable character trait, but it can cross over into miserliness. Money isn't a valuable thing in and of itself; the only reason any of us need to care about it is because of what it can provide to enhance our quality of life. Taking care of the necessities and laying down a decent savings cushion needs to be a priority, but I don't think anyone is best-served by making it their sole, relentless focus. The about-to-graduate law student isn't "entitled" to an occasional dinner out or vacation, but she's not asking anyone to magically provide them; she's asking about balancing priorities so that she can enjoy a few indulgences while building a firm financial infrastructure.

Life is unpredictable, and there's no guarantees about later. Selling out your future to indulge now is a bad idea, but putting all your eggs in the "later" basket strikes me as an equally risky choice. What happens if the law student continues living in austerity, eating ramen noodles and passing on investing money in experiences she'd enjoy like a bit of travel or fine dining, only to get hit by a car the year before that student debt is paid down? Financial decisions are balancing acts. Balancing acts are, pretty much by definition, tricky and fraught. An absolutist stance makes decisions easier, but it doesn't guarantee an optimal outcome.

I believe the role of an advisor -- whether that's a newspaper columnist, a paid professional, or a friend offering a sympathetic ear -- is to help the questioner more clearly understand their options and the consequences of each potential choice. Once the issue is framed and discussed, the advisor should step back and let the questioner make their own choice. Personal experience and views can be helpful in the discussion ("here's what I did/would do"), but insisting that everyone make the same choices you have or would isn't advising. It's bullying.

Food spending, from $21 a week on up

One of my friends asked recently about food budgets: How much do you spend in an average week?

We're not frugal about food. I buy breakfast (yogurt, hummus, bagels, things along those lines) and lunch at the office most days, partially because going out to get food dislodges me from my desk. It'd be cheaper to bring food, but I'd miss the chance to munch at local places and get outdoors. I tend to actually eat at my desk, save the occasional sit-down lunch or voyage to the park. Lunchtime is good blogging time!

Anyway, buying food at the office tends to eat $40 or so a week (Manhattan pricing), and I'll usually spend another $120 or so each week on takeout or dinner out. Even cooking rarely "saves" me much; if I cook fish, I can easily drop $20 on it. For me, though, it's something I've consciously decided to spend a big chunk of my budget on. (I suspect I spend way less than most people in other areas, like on clothes -- most years, my clothing expenditure is probably in the three-digit range, an expense easily eclipsed by what I spend on food, books and travel.)

There are certainly ways to spend a lot less on food. There were times when we had to. When David first moved to the States, we spent a month or two with only my just-out-of-college salary. With a monthly take-home income of $1,652 (the number is seared in my brain), we had to cover $950 in monthly rent (a steal in Manhattan, but still daunting on an entry-level income) and several hundred more each month on bills and debt payments. It was one of the only times in my life I really had to confront issues of "we have $10 and three days till payday; what can we afford to eat?" (In college, where I had even less money, you could always reliably scrounge meals somewhere.) Hint: Rice with soy sauce and honey is cheap and filling!

This bubbled up to top of mind for me today because I came across a story about the Congressional "Food Stamp Challenge": Four Representatives agreed to try to live for the week with a $21 food budget, the amount the average food stamp recipient receives.

Now, $21 is probably less than most actual food-stamp recipients spend; my impression is that the program is designed to be an assist, not a sole nutritional support. I see debunkers have already blasted away at the $21 constraint as an artificially low one.

Still, this exercise is a great way to draw attention to the bind those with low wages often find themselves in, as they try to stretch paltry paychecks in impossible ways to cover the costs of modern necessities. Sure, it's a stunt, but I think politicians can use more exposure to the realities their constituents live with. If trying to live on a low budget drives the difficulty home in a way stacks of policy briefing books can't, I'm for it.

So how has life on a shoestring been treating the Representatives?

"No organic foods, no fresh vegetables, we were looking for the cheapest of everything," [Jim] McGovern [a Democrat from Massachusetts] said. "We got spaghetti and hamburger meat that was high in fat -- the fattiest meat on the shelf. I have high cholesterol and always try to get the leanest, but it's expensive. It's almost impossible to make healthy choices on a food stamp diet."

Tim Ryan, a Democrat from Ohio, aborted the challenge a day early and four pounds lighter.

Last Friday night, in New Hampshire to deliver a commencement speech, Ryan succumbed to a pork chop in the hotel restaurant because he feared he would otherwise be too weak to give the address.

Several participants blogged about their experiences. As Jim McGovern's wife Lisa posted:

For years before I had kids and especially when I was pregnant, people told me how hard it is and how tired you are. Everyone sort of says that and "knows" that -- it's just a no-brainier -- conventional wisdom -- common sense. And I thought I understood that too. Having kids is hard and tiring. Then I had kids. And those first few months gave me a whole new understanding of those words I had heard so many times. None of those words had adequately described it. And I don't have the words still. (Of course there is also the flip-side of love and joy which was unlike anything I had experienced either.) My point is, I learn things by experiencing them in a whole different way than I do by reading about or hearing them.

What do you 'owe' your parents?

Here's a fascinating kettle of worms: How much do your parents' financial lives affect your own, once you're an adult?

One half of the Make Love Not Debt blog team raised this issue in a post on Asian culture and finances. I'm as 'white middle-class suburban American' as you can get, with the usual financial dynamics attached to that -- money flows from the parents to the kids, until the kids are out of the nest and sometimes longer. There's no expectation or likelihood it will ever flow the other way, at least in my particular case, barring some kind of financial miracle or catastrophe. If I won the lottery, then sure, I'd kick back a fair chunk into sharing the wealth. If my dad (a single parent for the past decade) suddenly fell into disaster, I'd jump in and try to help.

But in the routine course of things, our financial lives are almost completely independent. When I budget out future priorities, I only have to worry about me and David; we don't need to account for supporting our parents, either wholly or in part. It's only in recent years, as my social circle broadened beyond the suburban-middle-class peers I grew up with, that I've realised how unusual that it.

More than half my friends expect to have significant financial obligations to their parents. In some cases, culture is the driver; the Asian cultural expectations MLND describes are ones I've seen at play in some of my friends' families. In college, several friends grumbled that the only "acceptable" choices for them were to be economics majors or pre-med. Their parents were willing to work themselves to the bone to send their kids to top schools; in return, they expected the children to pursue lucrative careers (medicine, law, or investment banking -- maybe computer programming, though that was definitely on the fringe), so that both they and their children could reap the financial and social rewards of that professional success.

In other cases, the obligation comes from class issues. Most of my friends are in a similar socioeconomic band to me: We have careers that pay way more than the average U.S. salary. (Although in NYC, "way more than U.S. average" can still mean living paycheck-to-paycheck. Journalism is not the career for those who dream of rolling in moneypiles.) For me, that keeps me pretty level with my parents' socioeconomic band. But for some of my friends, professional-middle-class is a step up. One very close friend quips about how she grew up in a trailer and was raised by a trucker. Her dad works way, way harder than I ever have -- but his financial situation is also more precarious than mine has ever been, or than his daughter's now is. Her parents don't have that nice retirement pension my Dad does. Which means the kids are going to inherit some of the responsibility for their parents' financial security as they age. Because what are the other options? It's not like her parents made bad decisions or gambled or drank away their financial stability. They poured what money they had into raising their kids.

You hear a lot of talk about financial planning for babies, and for the costs of raising kids. There's less talk about the complex calculus of how much you "owe" to your parents, and what a giant difference those obligations can make in financial lifecycle planning.

(Did I just write "lifecycle"? I've spent too much time in the jargon trenches this week.)

Equipping your kitchen from scratch for $200

I rarely go in for frugality on this blog or in daily life, but I had to link to a nifty article in this week's New York Times: "A No-Frills Kitchen Still Cooks" (found via Matthew's always entertaining and prolific food blog Roots & Grubs). I could quibble with some of Bittman's recommendations (no baking pan? I use my 8x8" one often for casseroles; the list seems geared toward someone who cooks on the stovetop but not in the oven), as I'm sure every reader can, but I really like the basic premise of 'practical ways to frugally equip a new household.'

I remember the sticker shock I felt when I left college for my first apartment in the late '90s. Not just for things like furniture, which you expect to spend up on, but for all the basic things we take for granted -- Windex, olive oil (I don't recommend using them in combination), bathroom towels, scissors, storage boxes and so on. I felt like I was running to the supermarket every hour to fling money at them for household essentials. So for new grads and others setting up house for the first time, tips like Bittman's seem essential. It's good graduation-season reading.

And on that note, off I go to my college commencement! YAAY no more classes! Now to spend the next three lifetimes working off my loans.

Resetting myths about resetting debt statutes of limitations

I've been a very remiss blogger lately, and the culprit is, as usual, travel. San Francisco this week, Vegas last, and a crunching work deadline on a feature piece in the midst -- I'm behind on everything, oy. But! The end of the insanity is in sight! And I have lots of financial thoughts scampering around in my head.

Starting with an update on the "repairing your financial sins" series about rebuilding damaged credit. The common word of caution to people thinking of repaying or resuming communication about old debts is "proceed with caution," because doing so can reportedly "reset" and restart the clock on the statute of limitations. Regular reader Karawynn linked in comments to a Consumerist article saying that's a myth, and that the statute of limitations runs from the date payment initially became delinquent, no matter what happens later. Their sources: a nonbinding opinion from the FTC ("because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a [credit reporting agency] to report a chargeoff") and a direct comment from a TransUnion spokesman, who said (paraphrased) 'paying the account after a delinquency has been reported by a credit grantor will not have the impact of "resetting" the item.'

However -- these comments relate only to what can legally happen on your credit report, not a) what can actually happen (in practice, unscrupulous debt collectors have been caught running all kinds of skeevy stuff up the flagpole to see what flies) and b) what payments do to reset the debt legally. By reinitiating activity on an old debt, you may bump it back into the active column and restart the statue of limitations for the debt's legal expiration (the point at which the creditor no longer has any legal right to pursue you for payment).

The key point to bear in mind is that a credit report is different from a legal accounting of your debts. Some creditors never report debts to credit agencies; that doesn't mean you don't legally owe the debt. Some statutes-of-limitations expire before the seven-year window used for tracking credit-report items; that doesn't mean those old delinquent debts can't continue to haunt your credit rating, even after you no longer legally owe anything on them.

It also explains why paying a delinquent debt doesn't remove it from your credit report, and may not do anything useful for you at all, from a credit-rating standpoint. (It can certainly be useful if it clears a debt you're still within the statute of limitations on and legally liable for.) Remember, the purpose of a credit report is to help credit-granting agencies judge how easy it will be to get money back from you. If you let a debt go delinquent, that makes you a pain for the creditors to deal with -- and even if you later get everything together and clear those delinquencies, there's still a legitimate red flag, since you did incur the delinquency in the first place.

On the other hand, credit reports and credit ratings do take recent history into account. A two-year-old delinquency will hurt you far less than a two-month-old one. As the problem ages, it becomes less harmful. And if you have recent problems, the best thing you can do is reach some sort of arrangement with your creditors before the account is charged off. (When that happens varies, but it's almost never less than 90 days or more than 365 days after the debt became delinquent.) Charge-offs are the really black smirches you want to avoid, and they're often preventable -- creditors will be pretty flexible about payment arrangements so long as you're active about negotiating with them.