Dusting off blog, tapping microphone ...

Hi all. Anyone still here?

Kind of funny that a financial crisis has left me with less to say here on my personal-finance blog ... because I spent so many hours at work dealing with facets of it that I forget to step back and think about its personal-finance ramifications. (Its smallbiz ramifications, I got that covered ... )

Since I'm a writer by trade, which is one step above theatre on the Professional Instability ladder, it took about three nanoseconds after the crisis hit in September for me to start seeing its ripple effects play out in my circle of friends. Literally about half have been laid off -- and one got fired for an innocuous online comment. It's nasty out there, and since this all started, my own personal mantra has been, "Wow. It's amazing we're still both drawing good paychecks ..."

Yes, the gods do laugh and smite when you say or think things along those lines. Just as unemployment rocketed toward record numbers last week, my spouse quit his job. Welcome to life on one paycheck. (... in a gradual sense. He's not actually stopping work till the end of February.)

Life On One Paycheck has always been one of my personal nightmares, right up there with nasty diseases, devastating natural disasters and the Cowboys winning the Superbowl. So, I was not wholly thrilled with this turn of events.

On the flip side, I understand and support his reasons for quitting -- and I almost put him in the same situation about two years ago, when an issue at work arose that had me close to walking out on the spot. I remember calling him up at his office and saying, "I hate to do this, but if this doesn't get resolved I need to leave. Like, today." He was most excellent about assuring me that if I did need to go, we'd be fine (fortunately, my office resolved the issue and I got to stay employed). So, I am drawing deep breaths, running the numbers, and figuring out how to make things work on one paycheck while David starts looking for a new gig.

We're actually really lucky, as these things go. We can afford, on just my salary, to cover our rent and monthly bills, and still have a bit of wiggle room. We're not in the situation we would have been in 10 years ago of "eek! economic Armageddon! sell plasma!"

.... which makes us way luckier than most. If we're smart, this'll be a useful test. If we can get by on one paycheck, why the hell aren't we? Do I or do I not want to afford an apartment downpayment before, say, retirement?

We have two months to get ready before the paychecks actually stop coming. I suspect planning for this will motivate me to write more.

Global economies always have silver linings

Monday: Dead cat bounce or the start of the recovery? As the cliche goes, Only Time Will Tell, but today doesn't make things look good.

Meanwhile, as I catch up on news and wrap my head around the Dow's latest yo-yo, David points out that the Aussie dollar is currently trading at 67c on the U.S. dollar. The amazing part of that: In June, it was at 95 cents. When I first visited David in Melbourne, in summer '99, the Aussie dollar was worth about 66 cents on the U.S. dollar -- and having the Aussie dollar worth so much less than the U.S. one made visiting him much easier.

Now, it's down 30% from where it was in June. That translates to a cost drop of as much as $1k for us for a standard two-week trip, depending on what happens with air fares. If this keeps up, maybe we can go visit his family next year after all!

Apocalypse now

I finally steeled myself up and did it. I logged on and checked my 401(k).

It's down about 30% since I last checked in early September, which translates to a five-figure loss. The astonishing thing is that a whole chunk of that came this week. I knew in my brain that the markets got totally crushed last week - the Dow lost 18%, its biggest decline ever on both a points and percentage basis. But actually seeing more than $10,000 in paper wealth wiped out from my own accounts drives it home in a very visceral way.

It reminded me of two things.

First: I think the only thing for me to do is clench my teeth and stay the course. I haven't moved any money around. I'm not trying to time the markets. I have at bare minimum 30 years to go before I'm going to "retire" (which is kind of astonishing; I've only been in existence for 30 years. The entire span of my life is quite a long stretch still to come), and even if it takes a decade or two for the market to make up these losses -- which it very well might -- all the economic theories still say I come out ahead.

Two: 401(k)s only work as retirement plans if you manage the double trick of a) shaking off losses when you're young and investing aggressively, and b) switching to conservative, status-quo-preserving investments when retirement is imminent.

At my age, pulling out of stock-market-linked investments would be a mistake, all the experts insist. But if I were 63, or even in my late-50's and envisioning retiring within the next several years, staying invested in the market would be equally mistaken. When your retirement accounts cross the line from "investments for a far-off day" to "savings you will soon need to convert to cash," switching from volatile market-linked investments to conservative, funds-conserving ones is essential. Ditch stocks, move into bonds and T-bills.

The Washington Post has a great article that touches on all sorts of "eek look what the market did to my 401(k)!!!!" issues: "Retirement Wreck"

It's both interesting and scary to be living through the era of a giant economic experiment about whether 401(k)s and self-directed retirement systems are a smart move or not. Personally, I'm of two minds. I like having my retirement finances decoupled from a complete dependence on my employer. On the other hand, I think there's a lot of merit to the point raised in the Washington Post piece, regarding a study suggesting that defined-benefit plans outperformed 401(k)s in the past decade: "Pensions are managed by professionals with financial education and access to sophisticated investment tools. Indeed, part of the problem with 401(k)s, economists and advisers said, is that too many workers make bad investment decisions."

I'm not an investment professional. I make my living as a business journalist, my college minor was economics, I write this personal-finance blog, and still, I don't consider myself any kind of investments expert. Expertise is a hard thing to develop, and I'm dubious about the notion that the expertise needed to successfully run a personal 401(k) and save enough for retirement is something every single adult should have.

Still, I'm reminding myself: My 401(k) is a long-term investment. Volatility is an inseparable element of upside. Breathe in, breathe out, and remember that economic theory says that what happens in a week, or a year, shouldn't matter when your investment timeframe is 30 years.

But just how bad is the current economic mess? Two things from the past week stick in my mind.

First: I've had three friends laid off in the last week. Companies, especially small ones and startups, are clamping down hard. I don't think this downturn is going to be short or shallow.

Second: Another friend has spent the week at the local hospital, the one 15 blocks away with an ER I know all too well. Her partner had a stroke. He's uninsured. He's 44. I have to believe he's going to recover and be OK, because I can't quite fathom a world in which he isn't.

This is a very unpleasant and scary reminder that "will I have enough money when I retire in 30+ years?" or even, as the issue is for so many people, "will I have enough cash to pull through right now?" is not the most terrible problem to have. Finances matter, a lot. But being alive matters more. Every moment you have to breathe and experience and be with those you love and do the things you care about is valuable. Use them.

Life after your bank fails

I don't normally double-dip and recycle my work writing on the blog, but right now the subjects I would have been covering here are being covered there, so I'm going to be lazy and link the piece I spent Friday pulling together: "Life after your bank fails"

Amusing factoid I couldn't fit into the already-long story: Chris Coulthrust, who had all of his business' funds at NetBank when it crashed, shares my deathtouch with banks. Like me, he left ING after it bought NetBank ... and moved his personal accounts to WaMu. We'll have to coordinate on what bank we want to kill off next.

Greetings, JPMorgan Chase overlords

Sigh. This feels so ... familiar. All I ask is one full year in which my accounts stay in the control of an actual bank, rather than the FDIC. One year. Is that so hard?

Avoiding a run on the bank

To clarify my post from Monday: I don't think the run-of-the-mill WaMu customer has anything to worry about, or should do anything in response to the bank's death spiral.

It seems fairly likely that WaMu will be acquired by another bank, rather than collapsing so thoroughly that it needs an FDIC takeover. Even if that worst-case-scenario came to pass, through, typical customers would barely notice.

When NetBank went bust in September, I never lost access to my money. I had a checking account at NetBank with a few hundred dollars in it. ATM access and debit-card use continued without any interruption; I could withdraw and spend money at all times. Checks I'd written both before and after the FSIC shutdown cleared just fine.

The only customer-facing service interruption was that the website went offline for two days, replaced by an FDIC shutdown notice. That notice specified the time period of the planned Web outage, and promised the site would be back up on Monday. You can see the notice in my post made at the time.

When a bank fails, the FDIC immediately posts a detailed FAQ for its customers. Here's Netbank's. Standard checking and savings accounts, like mine, have insurance up to $100,000; IRA funds have a separate, $250,000 insurance.

So, if WaMu went bust, anyone with less than $100,000 on deposit would be fully covered, and would almost certainly never lose access to their cash. The service interruptions, like the website going offline for two days, are blips, not catastrophes.

But WaMu insists it has the liquidity to stay in business (do they? we won't ever really know till it next reports earnings, crashes or gets bought), and reports keep coming in of behind-the-scenes scrambles to line up financing or a buyer.

This is annoying, because a new buyer usually brings new banking terms -- but again, not catastrophic. No one loses any cash. What I plan to do is wait and see who buys the bank, and what terms they plan to offer.

If I had more than $100,000 with WaMu, I think I'd move the uninsured cash out, just to be safe. But for anyone who has less, there's no reason to transfer any money and contribute to a potential run on the bank. Wait and see is the sanest, and easiest, approach.

it's the end of the world and I feel ... uh oh

Every financial news organization has broken out the big screamy photos and headlines today, as Wall Street institutions go down like dominos, the Dow cannonballs south, and veteran financial analysts are left making worrying comments about uncharted territory.

This level of global equity market inner workings is beyond me; one of the moments that really drove home for me how dire things could get was an offhand comment Fortune's deeply experienced columnist Allan Sloan wrote a few months ago in an analysis: "How can the Fed afford this largesse? Easy. Unlike a normal lender, the Fed can't run out of money - at least, I don't think it can."

Um, you're not totally sure? Uh oh.

Not being an investment banker, or an investor (not checking 401k. muttering through teeth "long-term returns, long-term returns ..."), I'm not immediately affected by any of this -- although living in NYC, I do have a few friends who work at places in the Wall Street orbit, who got pulled into emergency meetings today about how the sudden disappearance of a fair chunk of the Street knocks craters in their companies' revenue streams.

On the flip side, I also got IM'd by quite a few friends gleefully forecasting what low or nonexistent Wall Street bonuses this year will do to the local real-estate market, which is perennially driven into the stratosphere by big-spending financial-industry Masters of the Universe. One friend calculated that it would be worth the complete wipeout of his IRA if housing prices drop 10%.

But I suspect the economic Armageddon is about to hit home with a vengeance, because the next bank everyone expects to topple or get bought is WaMu. The bank I switched to after my last bank got shut down by the FDIC.

This time, I really might start stuffing money under a mattress.

I (heart heart heart) Amex

I rent cars a lot -- probably ten-to-12 times in a typical year. (Living in Brooklyn, I've never owned a car.)

I'm a klutz.

At some point, these two data points were bound to collide. Literally.

In July, they did. David and I rented a car for a day trip to Pennsylvania, to photograph a friend's wedding. The car pickup went smoothly. Traffic was good. My nifty and much beloved GPS got us to Bangor, Pennsylvania, with no trouble. We were early. We stopped to get lunch. We got a parking spot right bang outside the pizza parlor, and I managed to parallel park. Lunch was tasty. Birds were singing, the breeze was soft, the sky was blue, etc etc.

Then we went to pull out of the spot, and our day went to hell. I misjudged just how big the car I'd rented was, and pulled out of the spot in such a way that I managed to a) smack the hell out of the passenger-side mirror, which promptly fell into a dead-mirror slump, and b) totally annihilate the left taillight of the SUV parked in front of me.

@^&@%^$#%$#

To our credit, David and I didn't kill each other with blame and recriminations (him over my clumsy driving, me over his criticism of my clumsy driving). We Exhibited Teamwork and managed to stay rather calm throughout the afternoon, even through the "I can fix this with Krazy-Glue!" segment of the escapade, which is really better left unexplained. (A proper rendition of it requires many alcoholic drinks to cushion the horror. Note for future Krazy-Glue Experimenters: Did you know it's not recommended for use in 105° heat?)

Eventually accepting that both the sideview mirror and taillight were irrevocably smashed, I left a note for the SUV's driver and proceeded grumpily on to the wedding. (The bride, K, was gracefully sanguine about our ill-disguised crankiness and wish for a do-over of the entire day. The ceremony was beautiful and incredibly touching; I'm glad even the inevitable calamities that ensue when you throw together family, friends and Momentous Occasions didn't detract from the loveliness of the very happy occasion.) Driving back to NYC, mentally tallying the cost of fixing the rental car and the sideswiped SUV, I braced myself for our excursion to PA to cost $800 or so more than budgeted.

The next morning, returning the car, I sheepishly recounted my sad saga at the rental counter. "Something in the air today," the guy at the desk said. "You're the third one to come back with an accident this morning." Since it was 7:20am, I was pretty impressed.

As I always do, I'd rented the car on my In NYC Amex credit card. And as I always do, being cheap, I'd declined all additional insurance coverage.

In the back of my mind, I knew that my Amex, like many credit cards, came with some kind of rental-car protection. I'd never dug into the details -- and frankly, I assumed that in the event of an actual accident, I'd face some deductible or fine print that would render the Amex protections virtually worthless. The one previous time I'd had a rental-car issue (the hubcabs got stolen) and called Amex to ask about coverage, I'd been told that since I'd used a corporate card for the rental, sorry, I had no coverage, and would be eating the $40 for the hubcaps.

But on the off chance my Amex coverage could help get me out of my mess, I Googled for details on my Amex coverage -- and found actual, helpful info. In fact, what I found online suggested that my little smash-up would be 100% covered. No deductible. No cost. Completely, 100% covered.

Disbelieving, I rang the insurance customer-service number (1-800-338-1670) and asked about details of the card's coverage. "Fully covered," the saintly person on the other end of the line said. "You can file a claim online."

And so you can! And, wonder of wonders ... I did, the car-rental company sent an estimate straight to Amex, and Amex took care of the whole thing. After filing that online claim, I did not lift one finger further. Amex paid the $397 Thrifty charged for the damages, and the whole mess went away without any further intervention or expense on my part.

Wow.

I actually have warm, fuzzy feelings toward a credit-card conglomerate.

One of the things I'll have to figure out with my new Amex Blue card (grumble grumble) is whether or not it has the same rental-car coverage as my In NYC card does. I dearly hope so. I'm not planning to make a habit of smacking around rental cars, but it's pretty awesome to know that if I do, the damage is 100% covered. (Up to $50,000 or so cap -- which, since I don't rent Mercedes, is fine by me.)

Epilogue: The bill for the SUV's taillight totaled $47, since the person-I-hit had a husband willing to replace the light himself, and I only needed to cover the cost of the actual light. I remain amazed I got out of the whole thing with a total bill of $47. And I am never again in my entire life parallel parking.

Journalism, red in tooth and claw ...

When it comes to building a financial foundation, few things are more important than the career you choose. How's mine working out?

June 2007: Mass layoffs decimate the magazine I work at. I stay employed, mainly by being the youngest and cheapest in my beat area, but the casualties include all the editors and writers who I took the job to work with.

Dec 2007: I take a new job.

July 2008: Mass layoffs decimate the magazine I work at.

Because most of my job duties were for another unit within the company, I dodged the bullet; I'm still employed. But many of my friends are not, and I'm once again reminded that journalism is an incredibly shaky career field. I keep seeing incredibly skilled, dedicated journalists who have put decades of service into a publication unceremoniously tossed out when they reach the higher echelons of seniority -- and salary.

The larger problem is that the whole field of journalism is facing a business-model crisis. Advertising revenue is plunging sharply, with newspapers taking the worst hit but pretty much every kind of news publication everywhere feeling the pain. Worse, this isn't a cyclical trend. Advertising revenue probably won't ever come back to the levels we previously enjoyed; there are too many other ways for marketers to reach audiences now. From a civic-discourse-and-communications perspective, this is a good thing. From the keeping-professional-journalists-employed angle, it's not exactly a win.

Even more problematically, I don't think any news organization anywhere has figured out how to solve the fundamental capitalist-system dilemma that good journalism is expensive, while superficial "content providing" is cheaper, and almost always gives you better gross margins. Putting reporters on the ground in Iraq is costly. Blogging Brangelina rumours is not. Guess which one is usually going to make more money for a publisher? (Yes, savvy publications have figured out how to do good journalism without losing money. But you can still make more money doing other things -- and investors are generally motivated to do whatever is going to give them the highest possible return.)

I'm incredibly lucky, as far as my career goes. While many of the publications I've written for have folded, I've never been laid off. I'm well-paid, especially for journalism. And unlike last time my magazine went blooey, when I immediately knew it was time to start looking for the exit, this time I have a job in a newsroom I love working with editors and reporters who do fantastic journalism. There are a very small number of news outlets I would actually want to work for right now, and I'm at one of them. That rocks.

But I'm also increasingly aware that no matter how much I love it, journalism may not be a career I can sustain for the 30 or 40 more years I expect to be working. I've been at this fulltime for 10 years, and I'm on staff job #4. I keep dodging bullets, but at some point, the luck runs out.

Introducing PocketMint

So, particularly close observers of my blogroll may have noticed a new entry: PocketMint.

One of my laments about the personal-finance blogspace is that while there are zillions of blogs, there are relatively few blogs where the focus is as much on the writing as the numbers. My interest in personal finance tends toward the psychological and cultural- anthropology side: I've never been interested in money in and of itself. It's the power dynamics and social structures around money that interest me. Having money gives you a tremendous amount of influence over how your life unfolds. That's why the petty details of how money moves in people's actual lives interests me.

PocketMint proprietress Karawynn is quite pragmatic, but above all, she's a writer and a thinker, and when she told me "I'm considering starting a personal-finance blog," I said, "HOORAY!" Because I knew her blog would be another place I could regularly read articulate, nuanced takes on the financial details of daily life.

So hop on over for posts on teens and text-messaging insanity, the economics of fish fillets, and how to get a fee-free IRA. I'm very pleased PocketMint has arrived on the scene. Give her feedback so she'll keep writing :)

Thin envelopes, part II

The 401(k) nonsense was slightly perturbing, but it was the second thin envelope in today's mail that really distressed me.

American Express is discontinuing my credit card.

There's a certain irony to this arriving in the mail the same day Amex announced no good very bad quarterly earnings. I imagine that at some point in the past few months, pressured Amex executives decided to "rationalize" ("right-size?" what's our current jargon for "whack things"?) their product offerings. And clearly, my preferred product offering got rationalized right out of the portfolio.

I've blogged before about how and why I picked Amex's In NYC card as my default card. I've had it since December 2004 or so, and it's been perfect for me -- I use the reward points, I pay little to nothing in fees, I've used the various protections it's offered (oh boy, have I -- that's the happy-financial-services post Coming Soon), and all my infrequently problems have been resolved fairly easily. Plus, it's black, and occasionally gets mistaken for an actual Amex black card. It's fun!

But as of November 2008, saith this letter, my card is discontinued. It's being replaced with an Amex Blue card.

Amex is trying to make this painless, I guess. My points roll over. My balance and (I hope, I hope) transaction history presumably will too. I'm assured I'll be able to use "Membership Rewards Express," which has "more than 140 redemption partners."

But they probably won't be my redemption partners -- local restaurants, a nice local spa I routinely drag friends to with my points, and so on. (Ok, I just loaded up membershiprewards.com, and the featured partner of the moment is Olive Garden. I'm doomed.) Plus, I have the fun of knowing that in two weeks or so I'll get the new cardmember agreement and have to pour over the fine print to see how similar it actually is to my current card. I'm assured that "many" of the things I "like about [my] In NYC Credit Card" are available with Blue. "Many" != "exactly the same."

Adding to the joy: I think I have a Blue card already. In college, I had an Optima card. I zeroed out the balance but never cancelled the card, and at some point it seems to have morphed into a Blue card; it still shows up on my credit reports and I get mail every so often about my exciting Blue cardmember opportunities. What happens now if I end up with two Blue accounts? No clue.

This bites. I'm gonna sign offline and go sulk now. (Actually, I'm trying to cash in my points for a Jean Georges gift certificate first. Then sulking commences.) RIP, my beloved In NYC Amex.

(Oh, and the third thin envelope was junk mail. After the first two, that was a relief.)

Why I'm never opening my mailbox* again

Lest my blog seem to devolve into nothing but rants, I actually have a happy financial-services post in the works. But my train of thought on that was sadly disrupted by what I found in the mail today.

Thin envelopes. Three of them. Nothing else but three thin envelopes.

As we all learned back in the tense days of awaiting college-acceptance news, nothing good comes in thin envelopes.

Sure enough, my envelopes were lurking.

The first was from JPMorgan. Return service requested. "Important benefits information enclosed."

My financial life involves so many different accounts that I'm amazed I haven't overlapped yet on providers, but so far, each financial-services company remains attached to just one account. JPMorgan is the vendor for my old-job 401(k), the one that is mysteriously still vesting me nine months after I left.

This Lurking Thin Envelope from JPMorgan had just one page in it. The one-page letter opened: "This notice is to inform you about certain operational failures that occurred with respect to the [OldJob] 401(k) plan ..."

Operational Failures has to be one of the great euphemisms of our time.

The letter has three sections. A) The Operational Failures. B) The Correction Method. C) Comments. And what do they boil down to?

I have no earthly idea. My college minor was economics. I write and read words for a living. I spent 10 years as a beat reporter prying financial information out of swampy 10Ks. I have no idea what this letter is actually saying went wrong. It seems to involve "the timely remittance of certain deferral contributions" [deferred?, my internal editor inquirers] and "deferral contributions ... remitted to the Plan outside the statutory time frame required."

Ok. Having read the letter a half dozen times: It seems to be saying that from 1/1/2005 to 2/2/2007, contributions taken out of my paycheck were actually sent to JPMorgan later than they should have been.


It appears to be blaming this on OldJob's "outside payroll provider" (*cough* ADP *cough*), and indicating that "five participating employers" were affected.

Two things make this particularly amusing. One: This letter indicates the problem started in early 2005, but my OldJob didn't actually start using JPMorgan till early 2006. So, ok, the problem is definitely more widespread.

Two: I caught this. I started OldJob right around the time the company switched to JPMorgan. Since I didn't want to bother setting up a 401(k) with the old provider (Fidelity) only to move it within weeks, I waited till things were running with JPMorgan and simply opened my 401(k) account there. But four weeks or so after my first payroll deduction -- no 401(k). Six weeks in, contributions finally started showing up, but only for one paycheck's worth of contributions, not three. I was perturbed enough about this to call HR and ask if they knew what was up. I didn't want a month's worth of 401(k) contributions to vanish into the ether.

Just lag, they assured me. It'll catch up.

Not wanting to muck around with reconciling totals, I let it go, and trusted that 401(k)s were serious enough and regulated enough that no one would screw 'em up.

Oops/ha ha ha.

Anyway, the letter indicates that OldJob has "remitted to the Plan" all my "earnings for the applicable time period ... using the Department of Labor's Online Calculator under the Voluntary Fiduciary Correction Program."

Um, ok.

Fortunately, the last bit of the letter is designed for people like me who are going "er, I'm lost." It is a five-step guide on how to "view the amount that your individual 401(k) account has been credited." The steps are things like 1) go to site. 2) select plan. THIS, I can handle.

So, following the Five Steps, I find that for the period from 12/01/07 to 12/31/07, I was (under the DOL's VFC Online Calculator Calculations) shorted $1.86.

Having been made whole, I can now retire nanoseconds sooner!

(Okay, this is getting long, on to Part II for the second envelope, which bore far more catastrophic financial news.)

* Technically I don't have a mailbox. I have a table in the hallway where our landlords put our mail, after the mailman chucks it over the doorway gate. Maybe I can train the smarter of our two kittycats to fetch the mail so I don't have to risk these sorts of shocks again.

Standing outside the mortgage-meltdown blast zone

Newsrooms are most fun when something dramatic is happening, and this week, the rapid share-price plunge of Fannie Mae and Freddie Mac has kept things roiling. In classic run-on-the-bank fashion, what seems to have happened is that a Lehman analyst's report on Monday (and given how much Lehman is also teetering on the brink, there's irony in that) focused attention on underlying problems with the two mortgage giants that everyone knew were there but was trying to ignore. Result: Wall Street panic, and the potential of another giant government bailout being required.

I'm not a Wall Street reporter. I have only a pretty hazy idea what Fannie and Freddie do, and why it's so vital. I watch this as a consumer - one whose main personal concern is, does this housing meltdown help or hurt my ability to buy a place within the next few years?

We're in the NYC housing market, where none of the normal rules seem to apply. David and I have the ability to carry what would, anywhere else in the country, be a pretty hefty mortgage payment. What's kept us from buying are two things: down payments and prices.

A 10% downpayment on the absolute least I could imagine getting an apartment in our area for is still $30,000 - no small sum to save up. More realistically, we'd be looking at $45,000 minimum - for 10% down. If a place required 20%, as many co-ops do, you get into six figures, easily. We're not going to have that saved any time soon. I have no idea how one ever saves that kind of sum, frankly, outside a 401(k) or some such over decades.

The second hurdle: As mortgages became more accessible and lenders loaned ever-vaster sums, NYC's already stratospheric prices went through the roof. Costs in our neighborhood literally doubled in four years - a one-bedroom that went for $199,000 in 2002 would have priced at $350-$425k last year. In 2002, a $200k mortgage for an apartment would have been stretching it for me and David. By last year, when we could have handled it pretty easily, prices were twice as high - and once again unimaginably costly. And on it goes.

So - if the mortgage pain gets even worse, if Fannie or Freddie is drastically restructured, if mortgages become harder to get and people can't get easy access to vast sums, then housing prices, even in NYC, will have to come down. But how much will they come down? And if mortgages become less forgiving and harder to get, then people like me and David -- who won't have a 20% downpayment, and are buying in a jumbo-loan market -- are exactly the ones lenders won't want to be lending to.

Chicken, meet egg. For now, I guess I learn to love rent payments.

(also)

Posting here is intended to be way more frequent than, er, once in eight weeks. Back in November, I mentioned that I was starting a new job. A new job with a big, steep learning curve. It's the first time in a decade of journalism work that I've been primarily a manager and editor, rather than a beat reporter. I like the job quite a lot and I love the newsrooms I'm now in, but it's been eating 80% of my awake hours and 90% of my brain. I'm realising how much I miss writing and at least the minimal level of reporting involved in blogging, though, so. If I don't post here at least weekly, e-mail and kick me or something.

WaMu: No good VERY BAD fees

I may need a new bank. Again. GRR RAR GRUMP BOO HISS.

Back last year, when I was auditioning banks, I mentioned that my #1 absolute hard-and-fast requirement was no fees, especially for using third-party ATMs.

This is something I get irrationally cranky about. I think it's downright usurious for banks to charge their own customers back-end fees for using outside ATMs. (I'm OK with ATM operators charging front-end fees for using their machines, though I wish they were legally capped at something sensible. $1, maybe $1.50, fine. $3 and up? Sod off, Chase.) I scratched off my list every bank that charged such fees. I ended up with WaMu.

And for several months, all was fine ... until, in late April, what did I spy? A random $2 charge on my statement for "ATM BALANCE INQUIRY FEE - DOMESTIC."

Er um? This is WaMu, the company of "Start free and stay free," the company that advertises "free checks for life, free wire transfers, free ATMs, free online banking, free check safekeeping, no monthly fees." What is this balance inquiry fee nonsense?

Off went my cranky email to customer service. Back came their formulaic cut-and-pasted reply:

The fee for a balance inquiry at a non-Washington Mutual ATM is $2 per inquiry. Your previous statement period was March 11, 2008, to April 11, 2008. This $2 fee indicates one balance inquiry performed at a non-Washington Mutual ATM during that period.

ATM balance inquiry fees are charged for balance inquiries that are made at non-Washington Mutual ATMs. The fees collect during the statement period and will post as a single transaction at the end of the statement cycle. As a result, the balance inquiry fee may not post for up to a month after the balance inquiry was made. ...

In some cases, the ATM itself may initiate a balance inquiry to verify the balance in your account. In most cases, the ATM wont [sic] inform you of the balance inquiry. Because the balance inquiry doesnt generate a fee that is included in the withdrawal amount, the owner of the ATM isnt required to inform you of the balance inquiry.

(Yes, all lack of apostrophes are reproduced verbatim.)

The letter went on repetitively in this vein for several paragraphs, but the gist of it boils down to: We charge you $2 for balance inquiries (not withdrawls! withdrawls are free, because we are WaMu and market that to high heaven!) at non-WaMu ATMs. Even if you do not actually hit the buttons to inquiry after your balance, we may charge this fee anyway if the ATM decides to automatically ask what your balance is before giving you money. Because these are batch-processed and may not post till the end of the month, you have no real way of backtracking what ATM this came from and whether or not it's legit. Byebye!

At which point, of course, my blood pressure went off like Mount Vesuvius. I think I spent a full hour or two railing at David about this, who waited it out and then pointed out that I have to be one of the only "consumer advocate" types out there who can happily drop $22 for a single piece of sushi (er, we went to Bar Masa ...) and yet spend hours obsessing about a $2 fee. Which, ok, yes, point. But still.

I never, ever, ever inquire after balances at any ATM (my obsessive PocketMoney tracking means I always know to the penny what should be in my checking account), but I've been hit with this %^@$@$ $2 fee twice more. I'm toying with just how irate it makes me. On the one hand, even I realise that $6 is not worth the hell of going through changing banks. On the other hand, I deeply dislike the deceptiveness of the charge, and the general level of fee-grubbing sneakiness it indicates.

If this were my one and only problem with WaMu, I'd probably grit my teeth, write nasty blog posts, and stick it out. But I'm now on my third unrelated incident - in 10 months - that has me grumbling about my bank. Three times now (this weekend was the third) I've had debit charges come through improperly. Twice, a merchant charge ran through my account twice ($28 or so the first time, $50.50 this week); once, an ATM charged me $7 for a withdraw fee posted as a $2. David, who withdrew the same amount minutes later at the same exact ATM from his Citibank account, was charged $2.

Every time, I've clicked the "dispute charge" icon helpfully listed next to every item in my online account balance register. Every time, I've received a very clearly cut-and-pasted form letter which has been utterly unhelpful, blaming the merchant and saying to call WaMu if I need further assistance. Every time, calling has led me down a Kafkaesque chain of transfers which has ultimately resulted in me being told I need to take this up with the merchant, not WaMu.

I'm now trying to sort the latest charge, for $50.50, out with the merchant, who is being vastly more responsive and helpful than WaMu. It's entirely possible that the merchant, who I know and like and I also know has some kludgy low-tech systems in place, accidentally ran the charge twice. But in almost 10 years with NetBank and at least as long with Amex and various other credit-card companies, I've never had a double billing post to any other account. I am cursed with fraudulent charges, blessed without accidental ones. I have to assume there were some basic algorithms in place to catch likely double-billing attempts. (The same amount, from the same merchant, posted hours apart? Could it possibly be an error?) Systems WaMu lacks.

So. Much as I don't want to move accounts yet again, I'm eying WaMu very carefully and awaiting further annoyance.

Anyone out there have a bank that doesn't charge outside ATM fees (my admittedly irrational deepest financial loathing) that they actually like?

Why my credit card # gets stolen so often

So, in my post last month about my fifth run-in with fraudulent charges on a credit card (two different cards, not five on one), a number of commenters expressed shock that I could possibly be hit so many times. Typical response: "How can this be happening so often? I never had to deal with this situation."

Why do I get nailed so frequently? (First time was in maybe 2002? I'm averaging just under once a year, I think.) Here's my best guess:

-Two out of the five times, my ATM card got hacked: Someone made a fake card and physically withdrew cash from my checking account. This means they not only had the account number, they had my PIN -- which, as I think I've mentioned previously, absolutely no one else on Earth knows, not even my spouse. (I don't know his PIN, either. Neither of us withdraws cash from the others' checking account.)

In those cases, I strongly suspect I used a dodgy ATM. PINs have also been stolen from the systems of retailers that allow PIN-based debit transactions, but I do that very rarely. On the other hand, in the seven or so years I was with NetBank, I often used ATMs in random delis. I'm cautious about avoiding shoulder surfing, and techie enough to likely notice an obvious skimming device, but New York City has been home to several crime rings using internal skimmers and backdoor software on unrelated, "white label" ATMs -- the kind I used probably 60 times a year. I try to be disciplined about using bank ATMs, but ... I am weak. Especially when I was with NetBank and paid the upfront withdraw fee every time I needed cash (since NetBank had no NYC ATMs), I tended to simply use whatever was closest. Which means I probably got nailed on a corrupted ATM.

-On the other hand, three of the five fraud incidents I've had were "classic" cases, where someone only had my credit card number (not the physical card; every time, it's been in my possession the whole time I was being ripped off). So why did I get hit three times in 10 or so years, when other people go decades without ever getting nailed?

I have two theories. First, sheer statistical probability. I use my credit card constantly - literally, multiple times in an average day. I probably run 500 transactions a year through my primary card, my Amex. (I pay it off each month. I just prefer it to cash -- and hey, rewards points!) I don't know what "average" credit-card usage is, but my count has got to be on the high end. Simply by using my card so much, I'm increasing the opportunities for someone to steal the number.

Second: I go to restaurants a lot - the #1 place credit-card data gets stolen. Also, I live in NYC. If you want to set up shop stealing credit-card info, a big city with a police department unlikely to pay attention to small financial crimes is a pretty good place to do it.

So, in summary: I think I get hit so frequently through a combination of high exposure and just sheer bad luck. I can and should avoid shonky ATMs, but on the classic-fraud cases where my numbers get stolen, I simply don't think there's much I can do to prevent it.

Here's the real kicker: This week, as I finally got everything refunded from my Amex fraud, David got hit. On his Citibank debit card. To the tune of $1,000 or so in train tickets around Italy. It's the second time he's been hit (in the eight years he's had this bank account) -- and since it's not a credit card, this came straight out of his checking account. He's now waiting for the paperwork from Citibank to dispute the charges and start getting a refund processed.

Maybe we really should start stuffing our cash under a damn mattress.

The annual identity theft

Some people can't hang onto romantic partners for more than a few months. Me, I can't hang onto credit card numbers. Just once, I would like to have a card that actually hits its expiration date. Instead, I end up replacing my credit and ATM cards every year or so -- because the damn numbers get stolen. Repeatedly.

This time, I was so slammed at work I overlooked the problem for two days. At the end of March, an email popped up in my inbox, from American Express: "Alert: Possible Fraud Activity." The email listed a "possible suspicious charge": "On 03/31/08 for $24 at EQUIVA/SHELL POS."

Oh hell NOT AGAIN! my very tired and overcluttered-with-work brain yelped. Then my brain pulled a trick it doesn't usually do: it decided it was not equipped to deal with Yet Another Crisis, and it shunted the Amex email off to the darkest recesses of my mental filing cabinet. Figuring I'd deal with the Amex email Sometime Later, I instead forgot about it entirely. For two whole days. Until another friendly "Possible Fraud Alert" email popped up, and my brain grudgingly conceded that all right, there might be a situation here that should be dealt with. The brain then sulked off into a corner while I wearily picked up the phone to talk with Amex about what strange charges were hitting my card.

Half an hour later, it became clear that someone was having a fun time in Florida with my plastic. $220 or so in charges made it onto my statement; I gather there were more in the queue Amex caught before they posted. Sample highlight: $53.12 at a Fort Lauderdale McDonald's. I'm not sure which surprises me more - that McDonald's takes plastic (and Amex, even?), or that it's possible to spend $53 at McDonald's in one go.

Once again, this is a case of my numbers getting loose without my plastic ever leaving my possession: my card was safe in my wallet the whole time this nonsense was going down.

Once again, I'm going through the replacement dance. Amex cancelled my card and overnighted me a new one. I have at least five monthly payments that autobill to the card, and it's my one-click default payment method at half-a-dozen online retailers; I get to go spend a few hours changing all those settings. Le sigh. Only silver lining: When my ATM card gets hacked, I have to go file police reports. Amex does not require police reports.

Still. This is now Time #5 for me on the Financial Fraud Merry-Go-Round, the third just in the time I've been keeping Birds & Bills. (I see I managed to go all of 2007 without getting hit. Clearly some deity in charge of Giving Stacy Financial Grief was on sabbatical.) Anyone know what the Guinness Book record is?

Oh the irony

Amazon appears to have a new widget where it invites you to "Treat Yourself." It's like it's sitting there whispering "C'mon, whip out the plastic, do some impulse buying ... you know you want to ..."

So what book from my wish list (which I basically use to bookmark things) is it recommending I splurge and buy? Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders.

This is an odd little wrinkle

One of the posts I've been drafting in my head for a bit and need to research further is about whether it would be advantageous for me to roll my old 401(k) into an IRA, rather than rolling it straight into my new 401(k). But a bit of weirdness popped up today that has me wondering if I should just leave the thing exactly where it is.

My old company had a five-year vesting schedule for its 401(k) match: It vested 20 per year. I quit in December, after about 20 months of working there. My 401(k) was, of course, only 20 percent vested. I figured I'd be walking away from the other 80 percent of the company's match - not fun, but I wanted the new job, and $2k in unvested 401(k) money wasn't really a serious factor in my decision about whether or not I should leave.

Now, one of my friends mentioned that when she left one of her past jobs, her 401(k) kept vesting. Every year, another chuck moved into the vested category, and when she finally moved the funds years later, she got everything - even the stuff that technically should never have vested, because she left the company prematurely.

I asked about this at OldCompany HR before I left: I walk away from my unvested 401(k) funds, right? Their answer: yes, of course.

Ok. Then why, when I checked my balance today, had another 20 percent vested? (My two-year anniversary would have been sometime in February.)

Is this a workflow breakdown? Did news of my termination not make it over to OldCompany's 401(k) provider (JP Morgan)? Is this going to keep happening every year, if I leave the 401(k) where it is?

I could call and ask these questions, of course, but that seems like poking the hornet's nest. But. Hmm. If the money will never vest (which is, I'm pretty sure, what should be happening), I want to move the account. If it is going to keep vesting, I should leave it. And, er, hope I'm not screwing up anything legally or ethically by not alerting either OldCompany or JP Morgan what's going on.

(And yes, I'm aware that posting on a public blog is not exactly a way to keep things subtle. I'm posting because I'm not really trying to hide this, and also because I'm curious about how common this phantom vesting is.)

Green shopping bags

The supermarket where I drop giant chunks of my paycheck, Whole Foods (in both my old and my new offices, there's one right next to the subway I take home), announced last month that it will stop releasing plastic bags. Starting in April, shoppers can bring their own bags, buy a 99c reusable one, or opt for paper.

Cynically, I wonder if the move is also going save Whole Foods money on buying bags. I just searched their SEC filings, and nothing is disclosed there -- so if the switch to "paper or pay" is going to be cheaper for them, they're not saying.

Being your standard-issue urban-liberal lazy-green mild-environmentally-guilt-stricken type, I'd long tried to switch to reusable bags. However, I fast hit a snag: I am incredibly forgetful. I could be walking out the door with the express purpose of going to the store to buy groceries and still manage to forget to take along one of the half-dozen reusable bags I'd bought over the years. And for impulse buys, forget it. I was managing to bring a reusable bag on about one shopping trip every eight weeks.

Until I came across the perfect thing for me, at the Union Square holiday craft market in December: Envirosax. These bags roll up and close with a snap, so you can stuff them in a backpack or purse, and they unfold to impressively large size -- I've stuffed gigantic grocery loads into mine. I've been road-testing my Envirosack for two months now, and so far, all good. It's rugged, hasn't torn, washes easily when I spill stuff on it, and fits easily into my purse, so I actually have it with me most of the time. About the trickiest thing I've encountered was mastering the fold-and-reroll trick to packing the bag back up, but I got the hang of it after a few tries.

Envirosax are $8.50 each on their website; I got mine for $13 or so, which means if you find it at a retailer near you, expect markup. (On the other hand, no shipping charges for buying locally.)

I'm not sure if BYO Bags really count as a frugality tip; most of the markets I shop at give you a 5c discount for bringing a reusable bag, but at that rate it'll take about 260 shopping tricks before I can claim my bag paid for itself. I suspect this is like buying a hybrid car: you can tell yourself the lower gas costs are worth the higher upfront expense, but really, it's a wash. Except that it'll help appease your nagging inner Al Gore voice, which is all good.

Envirosax is, of course, not the only company touting easily transportable reusable bags. Baggu Bags is also making inroads. Their bags fold up into a pouch. (I would lose the pouch. And probably fight with the bag trying to get it folded correctly and stuffed back in. The best part of the Envirosack, for me, is that it's one piece; the snap-rollup tie is built in.) Know of others? Tout 'em here.

(As a reminder, Birds & Bills doesn't take advertising; any products mentioned are things I legitimately bought. No ethics were harmed in the making of this blogpost.)

Stimulating things

Since I'm editing and occasionally writing coverage of the stimulus deal, I suppose I ought to stay Switzerlandish in my commentary on it. So. Er. $600 rebates. Hooray, the economy is saved?

When my check arrives, I'm going to have to be one of those naughty consumers who socks it away into savings or paying down debt, since I've already done some premature economic stimulating.

A few weeks back I went to Seattle with my sister, who had never been there. In addition to visiting friends, we had two express purposes for the trip: eat at the planet's best sushi restaurant (I have been to sushi restaurants on Tokyo; this one still wins - how can it not, with that URL!?) and go see a gallery show by one of my favourite artists. My intention was just to look, of course. It had to be - most of his paintings are priced around what my college education cost. But ... the gallery had prints ... and I have this theory that art you love is one of those things you never regret purchasing ...

So, um. I have a print now. Yay! And my art budget for the entire year is officially blown. Good thing The Planet's Best Sushi is so reasonably priced.

Tax prep: Giving Tango a try

Longtime Birds & Bills readers will recall that I have absolutely no loyalty when it comes to tax prep -- I'll use whatever program is cheapest and at least minimally user friendly. I used TaxCut through college, switched to TaxAct for a few years, and gave TurboTax a spin last year.

This year, just as I was starting to idly troll through discounts and figure out what to use, David mentioned a Second Life promotion offering free codes to use H&R Block's tax software. I assumed he meant TaxCut, and said sure, if he can head over to H&R Block's island and snag me a code, I'd be thrilled to use it. (David plays Second Life. I just snark at it.)

The Second Life freebie promotion code (well, "freebie" in the sense that it cost 100 Linden dollars, which is about 12 cents in U.S. dollars) seems to have dried up, but David got one before it did. But it turned out it wasn't TaxCut H&R Block was pushing, it's Tango, an entirely new option. It's kind of the in-between product. For basic, no-nonsense tax prep software, there's TaxCut. Tango has a jazzier interface, a more informal presentation, and access to tax professionals 24/7 if you need it. And, of course, for the full-service option, H&R Block has its walk-in offices.

Tango's slicker approach comes with a steeper price tag: it's $70, vs. about $35 for TaxCut. What does the extra cash buy you? Aside from on-call tax advice if you need it, it's paying for attitude. The Tango website gives you a pretty good idea what you're in for: it has a blog, and sells its multiplatform approach with the line "windows, apples, penguins - we love u."

I can see the Tango approach being useful for young and intimidated tax filers, which seems to be the demographic it's aiming at. It definitely has the Web 2.0-vibe. I couldn't decide whether I felt amused or condescended to by the quippy little messages it pops up throughout the prep process. Filling out my personal information at the start generated a bubble on the side saying, "This is kind of like when your aunt asks you when you're going to have children at Thanksgiving, isn't it?"

Like all version-one products, Tango is breakable. Because my company partially funded my HSA, they ticked a little box in 12c on the W2 saying they had. Tango popped up a note saying that meant I needed to file Form 8889, which it does not support. End message. Er? So does that mean I can't use Tango at all? Does it mean I need to file the form separately myself, if I completed the process with Tango?

I suppose this would have been the time to test out Tango's on-call tax-prep help, but I opted to forge on and deal with the problem later. Which ended up being a sound decision, because when I finished and was ready to file and put in my little Second Life code ... it was invalid. I tried a few times. Still invalid. Arugh.

So, Plan B. TaxAct apparently missed me last year. It sent an email Jan. 30 offering 30 percent off if I came back. Back I went, to reenter all the information I had already plowed into Tango. Luckily, my taxes are fairly straightforward, despite the vast pile of forms I seem to have every year (this time, it was 11, not counting charity receipts - three W-2s, an overpayment form from NY state, an interest statement from my bank, tuition and student loan interest statements, and several 1099s). About an hour later, my taxes were done - and, shock of shocks, the discount thingie worked, as last year's TurboTax discount totally failed to. My state and federal return e-filing and prep cost a grand total of $11.90. And, I'll note, TaxAct had no problem with Form 8889.

Yay TaxAct! All done, rebate en route. (Yes, I loan the government money interest free every year. This is a deliberate calculation, because David and I are crap at saving. It is much better for us financially for us to not stress about it and instead get a giant wad back at the end of the year. Plus, when I freelance heavily as I did this year, I don't have to worry about owing money at the end; it just comes out of the refund cash we've already amassed.)

Last year's tax-time surprise was discovering that I itemize, something I assumed I'd never do until we had mortgage expenses to deduct. But our state and local taxes now exceed the standard deduction, so we itemize and deduct them. Living in NYC cost us around $11,000 in taxes this year. Ow. When I briefly whinged about it, David told me to shut up and calculate what the subway saves me on car expenses. Hrm. Point.

Anyway, this year's surprise was finding that I file a Schedule C. Possibly I have had to do this before, but I don't recall seeing it come up, and I'm pretty sure I've had other years where I filed my freelance 1099 income. But this time around, when I plugged 'em in, up came the "hi you run a business, tell us about it" forms. Now I too get bitten by that self-employment tax all my freelancer friends gripe about! Ok, my bite was all of $106, but. I sympathize, my comrades.

A rant about usurious long-distance pricing

I realise complaining about extortionate phone company pricing is like complaining about the sun rising each day, but -- ARUGH. I just got bit by pricing that has me very cranky at Verizon.

So, David is from Australia. At home, we have Verizon's international calling plan, where we pay $3 or whatnot a month and get a flat rate to call Australia of 14-cents-a-minute or thereabouts. Calling his mum's cell is slightly more expensive, 33 cents or so. Fine.

For Christmas, we went home to my Dad's. Dad has your standard no-frills Verizon package. I suggested David call his family to say hi, and told Dad we'd reimburse the cost. I figured it would be more than our discounted rate, but didn't think much about what it would actually be.

Just got the bill. 28 minute call. $105.56.

$3.77/minute.

Are they @^&%@^%@ kidding?

I am horked off, cranky as hell ... and realise I have no recourse. We made the call. I didn't ask about the rate. It is what it is. But RAR. Even more infuriatingly, there would have been no real way to find the rate in advance. I just spent half an hour banging on Verizon's website. If there's a way to find international calling costs, I can't excavate it. I eventually found a customer service number, and planned to call them and ask about the rate. Except they're closed weekends.

This sort of blatently abusive shit pisses me off. I am totally fine with paying a higher-per minute rate than I get under my discounted plan -- but I would like that rate to have some sane basis. It obviously does not cost Verzion $3 more per minute to provide me service. If I'd known that was the rate, I would have gone out and bought a damn prepaid card and saved $100 or so.

Grr. I guess there's nothing really I can do except remember from now on to never, ever, ever make an international call without a prepaid card, but does anyone know if there's a regulatory body I can at least send off a complaint at? BBB? FCC?

Sigh. I guess $100 is the price I pay to be reminded that phone companies are heinous bastions of usurious pricing that one must be ever-vigilant about.

Today's GRR award winner

I occasionally get unsolicited emails from people wanting to advertise on Birds & Bills. The site doesn't accept advertising, so while these emails are fruitless, they're generally slight mood-lifters -- it's reassuring to find out the site is on the radar and people read it, despite my woefully sporadic update schedule.

This week, though, I got an unsolicited pitch that had me reaching for the big spiky GRR bat. It's from a website called www.AboutYourMoney.co.uk. Let me let them speak for themselves.

We are currently seeking to put "sponsored reviews" of our website on the best financial blogs out there. We absolutely loved your blog so we wondered if we could write a feature review for it?

We would be doing the writing of course, so all you need to do is post it and get paid!

We'll pay you $65 for the privilege (paid by Paypal, straight after the blog post is up). This is dependent on the condition that the blog is not identified as a paid for review on your blog. We do not want you to disclose that in any way.

Blogs are not (generally; there are exceptions) journalism. Blogs are not and probably should not be held to the same standard as journalistic reports penned by staff writers. To my mind, they're more akin to piece written by topical freelancers, where conflicts-of-interest run rampant and all you can do is rely on everyone involved to exercise good judgment and be transparent about anything that should be disclosed.

But there is still a line between gray areas and straight-up unethical behavior. Undisclosed, paid commercial content masquerading as unbiased commentary is flat-out and unequivocally on the wrong side of it. Sadly, I see a few bloggers have taken the $65 bait. I'm putting this up in hopes it'll be found by anyone who comes across a post about
www.AboutYourMoney.co.uk and goes looking for info. Reputable sites don't need to resort to this kind of trickery.

(I might need to make GRR awards a tag. I see I have handed them out before.)

Never mind the deductible -- watch the back-end cap

This came in on the comments on my last HSA post:

One question: were there any hidden surprises? It always seems there's some hang-up with health insurance...

Don't I know it.

My year of HSAing was remarkably smooth, though it's hard to say whether that's because everything worked well or simply because I had no unexpected medical situations. Unlike 2006, 2007 was a totally routine year for me and my spouse: nothing but the usual doctors calls, our standard prescriptions, and an annual checkup. There wasn't (thank goodness) much opportunity for me to test out the insurance and trip over hidden catches.

The only surprise was how unexpectedly easy it was to push through the one claim I had. One of my HSA's little carrots was that it reimbursed 60 percent of the cost of my out-of-network annual physical -- before setting the deductible. No, I'm pretty sure this isn't common. It wasn't even something the PPO insurance with the same carrier offered. It was pretty clearly a "come try this nice HSA!" bribe.

So when I had my physical, I paid out of pocket, downloaded the "reimburse me" form, sent it off with the receipt ...and a few weeks later, received a check in the mail for the $160 I'd put in the claim for. It was startling. I don't recall ever actually getting a claim processed without some kind of catch and extended wrangle.

Overall, though, I think the best thing to keep in mind with an HSA and avoiding surprises is: watch the back-end costs, not the front-end ones. As I wrote when I first opted into the HSA:

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?

An HSA is, pretty much by definition, a low-premium, high-deductible option. If you have a medical situation, you will almost always pay more upfront than someone with traditional insurance would: You might be liable for $1,000 or so in costs before the insurance kicks in anything at all. That's a serious issue to consider when opting for an HSA: can you come up with the money, if you need to? Are you better off paying higher monthly premiums to avoid the potential shock of a big hit all at once, if something dire happens?

Frustrating as a sudden hit for $1,000 or more would be, few people would be catastrophically devastated by that. What would be devastating is a high out-of-pocket max payment: At what point does your insurance foot the whole bill?

My HSA had an out-of-pocket max of around $4,000/year, about the same as the carrier's traditional insurance carried. If I got hit by a bus and rang up $250,000 in hospital bills, I'd still be capped at $4k. I could live with that.

But if my HSA's out-of-pocket max had been an order of magnitude more than the traditional insurance's? Say, $40,000? I would never have done it.

Insurance companies can always argue the fine print, and you never really know how effective your coverage is until you have the unhappy situation of having to test it out. But you can minimize the chances of devastation by paying as much attention to the potential back-end costs as you do to the front-end deductible.

The gifting quandary

When I was a kid, Christmas was all about the presents. I mean, yes, the tree and decorations and family time were fun, but -- PRESENTS. I can still clearly remember the Christmas Eve I spent all night awake (I think I was eight or so? Maybe 10?) hoping like crazy that my parents had listened to my entreaties that I would be the most blissed-out kid in the universe if Santa coughed up a Petster robot cat. Happily, Santa did! Which only ramped up my campaign for a real kitty, but that's another story ...

The presents side of Christmas was still quite exciting when I was older but broke. In college and for my first few years out, I relied on Christmas to snag the kinds of indulgences I couldn't afford to buy myself and which my frugal Dad saved for the year's big holiday. My first digital camera was a Christmas gift, as was my iPod. I was always very grateful to be treated to such luxuries, and it made drafting Christmas lists (which my Dad always requests) easy.

But about four or five years ago, I stopped being broke. I'm hardly rolling in money, but I have enough cash flow now that if there's something I really want -- a book, a DVD, a not-stratospherically-priced electronic gizmo -- I just go get it.

This has rather complicated Christmas. There's very little in the way of material goods I actually want that I don't already have or can't easily get myself. (Within reason, I mean. The Big Purchase David and I really need to get organized about saving for, an apartment, is a bit out of Christmas list territory.)

More problematically, almost everyone I know is in the same boat.

Shopping for my Dad is the trickiest. He's the worst combination of traits, from a gift-giving perspective: well-off enough to procure anything gift-sized that he would want for himself, and a total minimalist. I clutter; I collect things. Dad does not. Extra things around my house are generally absorbed into the usual chaos. Extra things around Dad's house fester, drive him nuts, and eventually fall victim to a cleaning purge.

So what in the hell do you get for people who really don't need anything?

For most of my friends, I've taken the popular route through this problem: food or donations. There are very few people who won't appreciate interesting snacks or a meal out; buying birthday dinner has become a standard gift I give when the opportunity arises. I go the charity route for the holidays: I have a list of about 10 friends I make holiday donations on behalf of each year, and follow up with e-cards. (This year, my organizations were Heifer International, Donors Choose and Doctors Without Borders.) My favourite thing about doing donations is that it's a low-pressure gift, avoiding the awkward dance of "uh oh what if they get me something and I don't get them something or vice versa and ..." A charity donation is low-key and guaranteed to be useful.

But there will always be some people you have to get a physical thing for -- very close friends or family, spouse, and so on. And that is just tricky when people don't really need or want things.

I've basically resorted to three categories here: 1) things the person will love and didn't know existed; 2) things that are hard to find; and 3) art.

Category One is the obvious perfect thing for gifts. My sister managed to nail this one this year for me: she got me an AeroGrow indoor garden. I didn't know there was something that would let me grow herbs in a lightless NYC apartment. There is! I had no idea! Hooray!

Category Two is the tactic I usually take for David, who is a mediaphile who quests after all sorts of obscure things. One of my best holiday scores was probably the least expensive gift I've ever bought him: A D-Generation album he'd had when he was younger and never been able to find again. It took eight months of monitoring eBay Australia, but I found one -- for about $5.

Category Three is one I'm taking advantage of more and more frequently. Art is hard to buy for others -- tastes are tricky things to nail, and I only have about three people I'm confident enough of their likes and dislikes to chance it with. But it's also one of the surest ways to get something someone isn't expecting and will (hopefully) find intriguing. Etsy is fast becoming one of my go-to gift-shopping stops.

The only trouble with this approach is that it takes time. Which is why unexpected, hard-to-find or unique items make such great gifts -- they clearly illustrated that you thought ahead, considered your recipient's personality, and devoted time to the hunt. Knowing someone cares enough to do that is the best part.

But this year, sigh. My November and December vanished to job craziness; I literally had to schedule shopping windows weeks in advance. It was not one of my finest holiday gifting seasons.

But David seems happy with his wooden tennis racquet, my sister likes her autographed horse-race photo (the only gift I did manage a head-start on, and thank God the framer could do an incredibly quick turnaround), and my Dad liked the restaurant my sister found for his birthday (which falls the week before Christmas). Whew!