Birds & Bills

The house chronicles, part I

2011-04-10T23:04:00.001-04:00

I've been saying for months that I would write about the nitty-gritty of buying an NYC condo -- something I knew nothing about before we started. So here goes ...

Depending on when you start the clock, it took either eight years or eight hours for me to find the apartment we decided to sink our life savings into buying.

My spouse and I have been together for just over a decade, and I've had house itch for most of it. I like permanence, I like decorating, and I wanted to own. But we were caught in the Catch-22 of New York City real estate: Because it's expensive, down payments are stratospheric. During the boom years, when anyone with a pulse could get a minimal-money-down mortgage, the prices were out of our reach. When prices crashed, underwriting tightened. Saving 20% -- a six-figure sum -- seemed hopelessly impossible. (We are also crap at saving. We shouldn't be. But we are.)

When I went home to Maryland for Christmas at the end of 2009, a friend filled me in on the apartment he'd just bought in Baltimore with the help of an FHA loan. That meant a down payment of just 3.5%.

New York's housing market is unlike any other, so I assumed that option wouldn't be available here, but when I started Googling, it turned out it was. You can't get an FHA loan for co-ops (which account for a vast chunk of NYC real estate), but over the last decade the condo stock has increased a lot. And not only were those eligible for FHA loans, developers were actively pre-qualifying their buildings for them.

Because I'd had house itch, I'd idly window-shopped for apartments for years. I'd gone to a dozen or so open houses in my neighborhood, constantly scoured Brownstoner and Streeteasy, and even kept a list in my Palm of all the features I wanted in an apartment. After so many years together, David and I had a pretty good idea of what we needed and what we wanted.

My non-negotiable list: "Two bedrooms, a decent kitchen, a dishwasher, a washer/dryer somewhere in proximity, and no more than a 45-minute commute to midtown."

My 'this would be my magical unicorn apartment' list: "Two-bedroom two-bathroom duplex with a terrace or backyard, eat-in-kitchen, washer/dryer, short commute, good light and maybe a fireplace." (Remember, that was my 'ha ha yeah right' fantasy list.)

So when I decided to go shopping for an apartment we could get an FHA loan on, I had a reasonably solid idea of what I was after. Sunday is New York City's open-house day. On the first Sunday in January, I made a list of about a dozen places to check out, grabbed my camera, and set out into the freezing weather.

(I was on my own because David hates apartment-hunting. "Just tell me when you find something good" was his approach.)

The first places, all in and around the Park Slope/Prospect Heights border we were then living on, were not good. Park Slope is a neighborhood of brownstones, and all the condos on my list in the area were low-rise places in small developments. Great in theory, but it quickly became clear that almost everything in the area had the same drawback: Constrained layouts. Because the buildings were mostly brownstone-sized, the apartments tended to be long, railroad-style corridors.

That meant cramming things into odd places in odd ways. One apartment didn't have room for a full-sized stove -- it looked more like a built-in toaster. Another had a large finished basement where the bedrooms were, but a main floor that was maybe 50 square feet. The nadir of the afternoon was a "duplex" with no stairs -- it had a hardware-store ladder connecting the tiny storage-area-like top floor. When I asked the broker about the stairs, she said nope, the developer had no plans to add any. "The buyer is free to do that!" she answered cheerfully.

Discouraged, I stopped in next door at Chocolate Room for a hot chocolate and a reconsideration of my list. I'd tromped through all my candidates in Park Slope and Prospect Heights, the neighborhoods we'd hoped to stay in. I had about two hours left before the day's open houses ended.

There was one other neighborhood on my open-house list: Downtown Brooklyn, an area I'd only been a handful of times. It's just 10 minutes by subway from Park Slope, but of an entirely different character. Park Slope is trees and brownstones; Downtown Brooklyn is a commercial area only recently rezoned for residential development. That development has been of the mega-building variety: The area has about a dozen condo projects, most in buildings with hundreds of units.

But because there's so many condos, there's lots of open houses, and I had two buildings on my list of places to check out. One called The Belltel had an open house that ran till 3pm, so I started there.

... and liked it way more than I expected to. After looking at so many apartments jammed into Park Slope brownstones and brownstone-sized lots, it was a sea change to walk into a giant building with comparatively sprawling layouts. Belltel takes up most of a city block, and its apartments were wide and deep. Every single one had a washer/dryer -- an unimaginable luxury to me, after 10 years of trekking to laundromats. The building's Art Deco lobby was a giant step up from the utilitarian tenement entryways I was used to.

But what dazzled me the most was the space. I saw four or five apartments, most in the 1,000 to 1,200 square foot range, and all with at least two (and in some cases, three) bedrooms. The asking prices were slightly above our range, but only slightly, and I was pretty confident they weren't expecting to get the asking price. The apartments had hardwood floors, open kitchens with granite countertops, walk-in closets and even, in a few units, built-in wine fridges. I'm a wine fiend who has often fantasized about turning a closet into a wine cellar, so that perk definitely caught my eye. But I didn't let myself even consider it: I tried to keep my sights trained on the less-expensive, more-realistic units.

Before I sell this as NYC's Last Great Real Estate Steal, I'll note that Belltel has one giant red flag: Windows, or Lack Thereof.

The (landmarked) building is a converted New York Telephone headquarters. Built around 1930, it's big and deep and was never designed to be carved up into residential apartments. The layouts vary widely, and a few (pricey) floors near the top have more conventional apartment designs, but most of the lower floors are filled with clever architectural kludges. Many of the "two bedroom" and "three bedroom" layouts are technically studios (or, if you want to sound fancier about it, lofts), because the apartments have just one wall of windows, in the living room.

That's a love-it-or-hate-it thing. I definitely understand when apartment-shoppers check out the building and head right back out, muttering "are you kidding me!?" But it didn't really faze me. In our decade of NYC apartment surfing, Dave and I had mostly lived in basements and railroads; our current apartment didn't have a bedroom, so we slept in a breakfast nook three feed from the fridge. "Natural light" was a hypothetical concept to me.

Just to be sure I wasn't jumping at the first life preserver, I left the Belltel open house and tromped about three blocks north, through the intensifying snowstorm, over to another FHA-financing-available new condo, the Oro. This one has a worse location (farther from the subways, across traffic-clogged Flatbush Avenue), but amazing views. They cleverly put the sales office on the 21st floor, with fabulous views over the Manhattan Bridge. I was somewhat smitten.

But after half an hour of seeing what the more-affordable, lower-floor apartments were like, I'd sobered up. Walls of giant windows look amazing, but -- we have books. Vast numbers. We didn't need fabulous amazing unaffordable views, we needed walls for bookshelves.

Conventional house-hunting wisdom probably says you shouldn't pick a place the first day you look. But I've always been terrible at small decisions (I can spend an hour agonizing over a menu) and quick at big ones. I picked my career when I was in middle school and got engaged to David four months after I met him; so far, those impulse choices are working out just fine. Belltel felt like a place I could see us living in.

So, half frozen, I hopped the subway back home to Park Slope, took David out for dinner, and announced that I'd found an apartment we should buy.

Your greatest investment, and your greatest albatross

2011-01-31T23:19:00.001-05:00

Last year David and I pulled off a financial trick I thought we never would: Buying an apartment in New York City. There's a ton I learned along the way, and I've been meaning to write up the full story, as reference for those who are also taking the plunge and trying to decipher the cryptic process.

But there's a certain irony in finally starting to tell the story now. One of my closest friends called this afternoon to talk over a big financial decision: She's going to strategically default on her mortgage.

She and her partner bought their place right before prices peaked, at a time when they felt their only option was to buy a compromise "starter house" they didn't love or be priced out of home ownership forever. But right after they bought, prices started plunging -- and my friend lost her job.

With just one income and a significantly underwater house, they easily meet the guidelines for a loan modification, and my friend has applied for one, twice. But because they're still eking out the monthly payments and haven't gone late, the bank isn't interested in discussing a mod.

And my friend has had enough. Keeping up on the house payments means they have no money left for any kind of savings, including retirement savings; now, facing five-figure bills for needed maintenance and local housing market forecasts that suggest their house won't get back to the break-even point for another decade, she's decided to write off the sunk costs, let the bank come take its collateral, and move on.

Meanwhile, my best friend is also dealing with an albatross house -- one her soon-to-be-ex-husband fought to keep when they split, but couldn’t actually afford and promptly started missing payments on. Two years later, the foreclosure drama keeps dragging out.

I'm still thrilled beyond belief about my apartment, and this week I'll start posting the blow-by-blow tale of our 87-day warp-speed journey from making an offer to taking possession of the keys to our new home.

But my friends' stories are a sobering daily reminder of just how damn fraught the whole thing is.

Hello world!

2010-11-28T20:35:00.001-05:00

I went on inadvertent hiatus though the summer, while I intermittantly food blogged and readjusted to the tech beat's 27/7 news cycle. Today, to cap my four-day weekend (ok, technically, nine-day weekend. The spouse and I decamped to Las Vegas for T-Day, where I also food blogged-- there's a reason Mint.com's auto-budget feature tags "Restaurants" as my biggest monthly expense, easily dusting Shopping, Clothing and Entertainment. "Groceries" is a close second), I tackled the giant stack of "paperwork needing doing" that had accumulated on my desk. Most of which was financial.

Over the course of two hours, I ...

-Filled out forms that will hopefully qualify the spouse for an extended life insurance policy. Typically, we've each carried just what our employers spring for, which is generally one or two times our annual salary.

But now, we have a mortgage. Which is scary large. His open enrollment ended a month before mine, and I didn't speak up in time about having him up his insurance. But I had the option of adding coverage on him to mine. To cover us each for an amount about equal to about 70% of what we owe on the mortgage cost me about $11 a month. I decided to spring for it; now let's see if he passes the underwriting. He had surgery for a deviated septum three years ago, and has a monthly drug prescription -- which means I had to check "yes" on an annoying number of "do you have any physical condition that indicates you are mortal and could eventually die!?!?1?" boxes on the insurance form.

-Mailed a defunct Metrocard off to the MTA in hopes of a replacement. Just days after one of my writers had his constant-refilled card journey to the Transmit Museum in the Sky, mine demagnetized. I have no idea what caused it, and in almost a decade of buying Metrocards, this is the first time it's happened.

I checked with a gate agent who confirmed, yep, demagnetized. "Call the customer service number on the back of the card," she instructed. Problem: This all happened as I was headed out of town for the week.

I finally got a chance to call, and was instructed to mail the card in. Now, online accounts suggest that if you paid for the card with a credit card (I did), the customer service line can refund you the remaining days. Bzzzt. I called twice, and was instructed both times to mail it in. I finally did today; we'll see how that goes.

-Mailed in a prescription. I'm still really pissed off about the monopolistic PBM practices that are killing neighborhood drugstores. But it would currently cost me $1,080 a year to fill our recurring monthly 'script locally, because my drug plan slaps a huge co-pay on things not filled through their mail-order. Doing Medco mail-order costs $260 a year. We cratered.

-Downgraded my Netflix plan. I mostly use the streaming these days, so with my current 3-DVD plan set to soon jump to $20 a month, I took the opportunity to swap to the 1-DVD, $9.99/month plan.

-And finally, I poured a stiff drink and eyeballed my Verizon bill. Remember way back in May, when I blogged about opting for Verizon's $89.99/month Triple Play and having no confidence whatsoever that the bill would be correct? The bill wasn't correct. Our first bill was $203.96. The next was $115.98. And the next was $148.59. Then $128.36.

Every single month, the day after the bill arrived, I called Verizon customer service. Every single month, the agent went "wow, that's weird!," applied some seemingly random credit amount to get my bill back into sane territory, and assured me the problem was fixed. And every month, when the next bill arrived, it was for some random amount. Waterloo came in September, when a bill for $346.18 arrived.

Eventually, after many phone calls, we zeroed in on the problem: Verizon had never turned off my old address in its system. I was being charged for two different plans at two different addresses, even though they were showing as one, and interacting in totally random ways.

This month, my bill finally seems to have just the right set of charges and taxes. My $89.99 plan actually costs $126.10 with taxes and surcharges, which is around what I expected.

I just ran the numbers, and when you average out the grand total of what I've paid vs the number of months I've been in the new place, it comes out to a $12.56/month overcharge so far. But I'm too defeated to fight with Verizon for a refund. I'm just crossing my fingers my $126 bill is here to stay.

So that's the State of My Financial Life. And I'm back to blogging just in time for the holidays, when all attempts at budgeting will inevitably be blown to smithereens!

Where I'm writing this summer (not here)

2010-07-11T23:40:00.002-04:00

Posting has gotten light again, thanks to time-consuming other projects. I switched positions at work at the start of June (swapping off the smallbiz beat and onto tech coverage), which has been eating my brain, and I have two other writing gigs at the moment.

-On personal finance, you can find me weekly-ish at Make Love Not Debt. Recently I've chimed in why pet insurance is a rip-off, how money mixes dangerously with marriage, and why my cat no longer has teeth.

-I'm also foodblogging at the Red Hook CSA website. I've been tempted for years to join a CSA, but always lazed out because I a) wasn't sure I'd cook enough to justify it, and b) suspected I'd miss the pickup window frequently. But this year, my friend Amy lives blocks away from her neighborhood's CSA pickup spot, and offered to grab my share any week I couldn't make it.

So for $332.50, I got a 22-ish week share that gives me an assortment of veggies and a half-dozen eggs each week. That's about $15 a week. Is it paying off? At some point I'll crunch the numbers and figure it out, but for now, I'm swamped trying to keep up with the zombie hyssop and mountains of kale. The kale has already conquered the veggie drawer and sent out reconnaissance units to scout the cheese drawer for its territorial-expansion possibilities.

Which is a longwinded way of saying my PF brain will kick back in at some point, but in the meantime, hit those two sites if you miss my ramblings. My Twitter feed features occasional links to my postings around the Interwebs.

AT&T jams one up the iPad's jacksie

2010-06-02T22:11:00.003-04:00

We have what amounts to a religious war in our household: David is a Mac lover, I'm not.

There's irony in this, because I was a diehard Mac fan throughout my formative years. My Dad brought home an Apple IIG in 1989 or so, and for the next decade, I regarded those who didn't use Macs as vaguely inferior life forms.

Then, right around the time Apple seemed to be sputtering off into its grave, I succumbed to the ubiquity of Windows. (This did not stop me from plastering a "snail inside" decal on every Pentium PC I owned. I retained the sly snootiness of an Apple user.) Between office PCs, college computer lab PCs, my campus-job Windows laptop, and my own broke-student inability to afford a new Mac, I drifted off into Microsoftland.

And stayed there. When my job change two years ago brought with it a Mac desktop, I was the only magazine staffer to regard it as an actual work impediment. I fled whenever possibly to my alternate office 20 blocks north, in no small part because my desk there had a Windows machine and was the only place I could actually get work done. I couldn't help it; my brain now worked in c:\Windows\Desktop directories.

Meanwhile, David went full-bore in the other direction. For the first few years we were together, he used my backtop work laptop as his home PC. When I changed jobs, I bribed him to give it up by using my pay raise to buy him his first personal laptop. He chose a MacBook, and within less than 24 hours he was far more attached it to than me. "If I'd know it was this good, I would have skipped eating for a week and spent the money on this years ago!" was, I believe, a direct quote from him. I rolled my eyes.

But for many years now, he's been a Mac addict, with the iPod/iBook/iPhone combo, while I cling to my Windows desktop, archaic Samsung cell phone and Palm PDA. (Stop laughing. I cherish and coddle it. And am in deep, deep denial about it being the end-of-the-Palm-road when it dies.)

One reason I've resisted the siren call of Apple is that I don't like the company's closed tech ecosystem. The Apple experience works really well if you use its approved apps, on its approved hardware, to do approved create-and-consume things, on the network of its approved bandwidth provider. Wander off, and you get shooed back onto the path.

So I was pretty intrigued today to see AT&T make a subtle move with big ramifications: No more unlimited data plans for new iPhone or iPad buyers. Welcome to the world of metered billing.

Which, yes, will probably knock a few dollars of the bill of the average Apple gadget user, if they opt into a pricing tier reflecting the fairly casual data consumption most users have. Now. In 2010.

In a year? Or two? I don't see apps and devices using less bandwidth going forward. And once you're into the land of metered billing, you're not going back. Comcast, Time Warner, Verizon, and all the cable/broadband/etc providers that have been itching to ditch unlimited bandwidth in favor of metered data have got to be doing the dance of joy right now. AT&T fired the first shot over the bow; now the way is cleared for them to launch their own fusillades.

I don't think it'll happen immediately, and I think the upward pricing pressure will be gradual -- after all, no telecom wants to spook Congress into doing anything rash or regulatory -- but I think we're edging toward a future where bandwidth costs are charged by consumption, like electricity or water.

Meanwhile, back on the home front, David has recently discovered the streaming, addictive joys an MLB.tv subscription for his iPhone. Guess who plans to cling to his grandfathered, unlimited data plan for as long as physically possible?

The next lending crisis

2010-05-30T12:58:00.001-04:00

The New York Times had a good column this week spotlighting the dangers of student loans through one family's story: an undergrad NYU education that left $100,000 of loan debt in its wake.

Almost everyone I know has student-loan bills, which vary in severity from "enh, it's not that bad" to "holy god, that's more than rent." But there's one clear similarity in all our stories: No one knew what they were getting into.

It's the undergrad debts that make me wince the most. You take those loans on when you're 17 or 18, and I don't care how academically smart you are, I've yet to meet any college-bound 18-year-old able to make sound judgment calls about loans, debt, estimated paychecks and so on. How can you? At 18, you haven't had the experience of trying to line up all your bills and make them fit within the bounds of one fixed monthly income number -- and until you actually do that, month after month, it's all hazily theoretical.

You can sign on a dotted line saying "yes, I understand that if I take on this loan I'll owe $200 a month to repay it," but is $200 a lot or a little? To me at 18, who considered $20 a windfall, it would have sounded staggeringly huge -- but me at 18 (circa 1996) hadn't ever had a job paying more than $6 an hour. I had no framework at all for making adult financial decisions.

I guess this is where parents enter the equation, but at 18, you're supposed to start making your own decisions -- and what 18-year-old is going to listen to the parent who says "this expensive school you got into and want to go to? Sorry, you can't." You spend all of high school hearing that college will be exciting, life-shaping, career-door-opening and so on. The last thing you want to think about at that point is what's cheapest.

I basically got lucky. My parents scrapped together the cash and took on the debt themselves to pay for most of my trip through the pricey college I wanted to attend. I helpfully repaid them by dropping out right before my senior year. (Thanks, Dad, for not driving up to NYC and strangling me when I told you that ...) The consolation prize is that I dropped out because the college basically did what it was supposed to: Help me get a good, full-time, decent-paying job in the career field I wanted to pursue. I left to take the job.

My three years at Barnard resulted in loan debt of $11,000, which required monthly payments of around $90. That was manageable.

But five years later, after a few halfhearted stabs at night classes, I finally decided to go back and finish off my degree. And once again, I didn't want to make practical-and-affordable choices -- I wanted to do what I wanted. Which, this time, meant going to the school best set up to deal with working students. That turned out to be New School University -- which cost about five times more than I would have spent finishing my degree at Hunter or another state school.

Result: Three years after graduating from New School (much to my Dad's delight -- I finally got the BA!), I'm currently sitting on a student-loan balance of $21,664.59. I now pay $250 a month for my loans, and have been paying that for almost five years. I have ten more to go. If I'd done the less-expensive thing, I would instead have my loans fully paid off about two years from now.

Was it worth it? In my case, maybe -- I can afford the $250, and my previous efforts to finish the BA hadn't actually worked. If New School was what it took to get me through, it was probably a sensible thing.

But really, all it boils down to is that I got lucky. I don't even remember signing the loan papers for my first set of loans, for Barnard. I definitely didn't do it with any "this will cost me X dollars each month" idea of what I was obligating myself to. The second time, when I took on the New School loans -- this time, as a working adult, and even a personal-finance blogger -- I again didn't do any precise monthly cost forecasting. I just eyeballed the total sum and said "well, it looks manageable."

Which is why I get nervous every time friends of mine talks about going back to grad school. There are, for sure, financially responsible ways to do it. You can use savings, go somewhere very inexpensive, or pursue a degree that has a very clear payoff in your chosen career field.

But you can also spend a small fortune on a degree that's hard to monetize -- or, worse, trains you for a field with salary prospects that don't align. To pick on my own alma mater and career field: A journalism or creative-writing master's degree at Columbia will cost you about $40,000. A typical entry-level journalist or any-level fiction writer would be lucky to make $40,000 a year -- and managing a $350/month loan payment on a take-home salary just north of $2,000/month starts to get pretty restrictive.

I don't see any obvious solutions, but it's scary to see a whole generation of 20- and 30-somethings (and on into their 40-somethings) chained to massive debts right out of the starting gate.

Serial bank dating

2010-05-23T16:00:00.000-04:00

I always intended to come back to the story of how my attempts to abandon Chase are going, but kept getting distracted. So I wrote it up over at Make Love Not Debt: Taking a Break from Monogamy.

Meanwhile, as we prepare to pay our Very First Mortgage Payment, the kitty decided now would be a great time for a dental emergency. He's lost a tooth -- and unlike when five-year-kids do this and it's an exciting milestone, with five-year-old cats you end up feeling like a horrible, neglectful parent who didn't realise that your cat's teeth are dissolving. So poor Kea is getting hauled off to the vet tomorrow to have what's left of his teeth cleaned, and likely removed.

Because what we really needed right now was a random $500 bill. Sigh. At least he's cute.

Verizon for the fail

2010-05-09T17:35:00.001-04:00

The first time David and I moved apartments, back in 2000, it took us four months to get a working phone line.

The problem was a fight between Verizon and MCI. For reasons I happily no longer remember, we were caught in a giant wrangle between the two over whose job it was to physically hook up our line -- one company owned the wires in our area, the other had our account, and resolving the standoff took me more than two dozen phone calls and countless hours of battling through Inferno-like levels of "customer service." In retrospect, I can't believe I didn't just swear off landlines on the spot and go mobile, but the whole thing eventually got so Kafkaesque that I was determined to pry a phone line out of these companies just to prove that I could.

It was good foreshadowing. Ever since, pretty much every interaction I've had with Verizon has been fraught with errors and incompetence.

I was all set to join the modern world and scrap our landline in April in our move. We'd be just fine with Skype and mobile phones, I figured, and hey, it would save us $50-$70 a month. That's what it was costing us to have a dial tone and an occasional phone call to Australia. (I was paying $10 a month for an international calling plan that gave us sensible per-minute rates, since I learned the expensive way how bat@%^! the rack rates are for overseas calls.)

But then we found out our new building was wired for Verizon FIOS. That meant that instead of kicking Verizon to the curb and consolidating our communications bills with the cable company, we could instead give Time Warner the boot and go all-in with Verizon.

Like every other cable customer, I've watched my bills creep up over the years, from about $100 six years ago (for cable and cable-modem broadband Internet) to more than $160 this year. On the flip side, Verizon was touting its "triple play" cable/Internet/phone combo packages for $89.99 a month.

I knew our bill wouldn't really be $90 a month -- fees and taxes always seem to add another 50% to telecom bills -- but it still seemed worth investigating. So I rang up, asked many pointed questions about the plan ("Are there installation fees? Equipment fees? Fees for extra computers? Required blood sacrifices every fortnight, which you charge extra fees for missing?"), and signed on. The add-on fees I agreed to were an extra $5.99 a month for equipment rental (which really should be part of the standard cost quote, but whatever) and $10 a month more for a 300/minute overseas international calling bundle. So, total bill each month should be $106 -- plus, I figured, an extra $20-$40 for taxes.

On Friday, the first bill arrived: $203.96. <insert primal screams here>

It wasn't just that the bill was too high that irked me. It was that I would now have to slog through "customer service" to untangle the mess.

And it was indeed a total mess. Despite email records confirming my order of the triple-bundle-package thingie, Verizon ran my bill for each service individually. The amounts listed didn't even reconcile -- random charges and credits skittered all around the bill, making no sense on their own and, even better, not actually adding up to the listed grand total. Instead of even attempting to sort it out, I threw up my hands and called Verizon.

Where it took half an hour to fight through the automated prompts and connect with a live human being. Happily, once I finally landed one, he looked at my bill for about 30 seconds before agreeing that it was fubared.

Twenty minutes of hold music later, I had my bill "repaired" (in theory) and knocked down to $140.56. That seems to include two months of Internet charges (prepaying May), which doesn't make sense to me if this is supposedly a level-monthly-billing plan, but I'm not inclined to battle about it.

I'm also not convinced this whole thing is actually fixed. We'll see what shows up in next month's bill.

And since my bill has been screwed up literally every single time I've signed up for new services with Verizon, I've got to assume this isn't actually incompetence. It's a business strategy -- mess up the bills and see what percentage of customers notice.

Grr.

When Wall Street breaks

2010-05-06T23:54:00.003-04:00

During September 2008, I almost came to regard three-digit Dow swings as normal. But seeing them happen in seconds isn't normal, and 2:50 pm this afternoon was a pretty wild time to be in the middle of a financial newsroom. In a blink, you've got the Dow flinging itself from almost 11,000 to below 10,000, and stocks zipping crazily in both directions: Accenture (ACN) rocketing from $40 to 1 cent while Sotheby's (BID) zooms from $30 to $100,000.

And what was I doing this evening, after watching an afternoon of Wall Street chaos? Going to see Enron, which I got tickets to last month for David's birthday. Talk about timing. High finance explained with lasers and dinosaurs! Now I'm gonna be grumpy if we don't get to use lasers and dinosaurs tomorrow at work when we try to explain The Great Market Crash of 2:47 pm.

I see that the exchanges and market regulators are planning to void trades in 286 stocks from 2:40-3pm that swung more than 60% either way. That takes care of the wildly crazy prices, like Philip Morris plunging from $48 to $2 or EQIX flying from $95 to $999,999. But it leaves standing some of the trades that really hammered the Dow, like P&G falling 37% in seconds and 3M sinking 21% for a blink. Tomorrow's open should be dramatic.

Meanwhile, in financial news involving vastly smaller sums, I have a new outlet for some of my personal-finance writing: For the next few months, I'll be filing a weekly dispatch to Make Love Not Debt. It was one of the first pf blogs to catch my eye when I started Birds & Bills years ago; while I get pretty solipsistic in my ramblings here, MLND has always been finance and relationships. It'll be fun to shift my focus and think in that vein for a bit. Plus, like all journalists, I've realized the only sure way to get me to actually write is to hit me with a deadline. Generally one that's two or three days past.

So hop on over and check out my first MLND column, on the two-income pothole:

Keeping separate bank accounts with your spouse or similarly intertwined partner has a whole spate of logistical issues attached. How do you split the bills? How do you make sure none slip through the cracks? How closely do you track your partner's finances – and how do you ensure you'll have access in an emergency?
There's also the philosophical issues. Why are the accounts separate, and do you both have the same reasons, or at least understand and respect your partner's rationale if it's different?

I have to issue 1099s!?

2010-05-05T19:50:00.002-04:00

Funny I just wrote yesterday about how I don't hate taxes. Today, I'm less enamored with 'em. Or, at least, with the paperwork they entail.

I spent most of today working with my friend Neil to piece together a major and underreported story he stumbled on over the weekend: Tucked into the 2,000-page health care bill is a significant tax-code change. Gotta love how Congress tacks riders and stealth legislation into totally unrelated bills (like tossing "hey, bring your guns to national parks" into the credit card act).

From the story:

An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.

Beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year. The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.

"1099 tax form" sounds like an eyeball-glazing thing, but anyone who has ever freelanced knows what it is. Companies send out millions of them each year, to any individual they pay who isn't a salaried staffer. The vast bulk of the money I make comes from my day job, but every year I end up with a few stray 1099s for freelance articles.

Because I have freelance income, in the eyes of the IRS I'm running a small business. That means I file a Schedule C and -- the painful part -- pay self-employment taxes on my freelance income. (You know those Social Security and Medicare taxes you see deducted on your paycheck, which typically add up to 7.65% of your wages? What you're paying is actually only half the tax. Your employer pays the other half. Those who are self-employed get hit with both ends and cover the full 15.3%.)

Like all freelancers, I offset this pain by deducting anything I reasonably can. If I buy a new computer or phone line to use exclusively for work, I write it off as a business expense.

Starting in 2012, the health-care law requires businesses (that means us too, freelancers) to send 1099s not only to workers they pay for services, but to any entity they pay more than $600 to in a year. The example in Neil's story: If you buy an iMac, you have to send Apple a 1099 reporting what you paid for it.

As Neil quipped in response to my shocked "they're kidding, right!?" noises: "It's the Accountant Full Employment Act."

After we thrashed out as many details as possible -- which is not many, considering the IRS is a long way off from issuing guidance on how this will work -- I calmed down a small bit.

On the one hand, while I've received dozens of 1099s over the years, I've never issued one to other businesses. That sounds ... daunting. On the other hand, this is why tax software exists. I imagine Intuit's TurboTax team is doing the dance of joy over this looming tax change. By 2012, when the law actually kicks in, tax software packages should be well-equipped to fire off the millions -- or, as a CPA the Cato Institute talked with predicts, billions -- of new 1099s this will require.

Still. I see why activists are really, really tempted to just chuck the U.S. tax code and start over.

What your tax dollars buy

2010-05-04T21:30:00.000-04:00

Like everyone else who has to balance a household budget, I flinch every so often when I see how much of "my" paycheck is disappearing toward taxes. Between that and my retirement/health care/etc deductions, I actually take home less than 50% of my gross pay. That's pretty common.

... and then I read stuff like today's news about the Johnson & Johnson drug recalls, which are fast getting ugly. The FDA did some serious smacking of J&J, especially for its failure to take action fast when it became clear something was amiss:

In its report, the FDA said McNeil did not initiate "corrective and prevention action" after it had received 46 consumer complaints from June 2009 to April 2010 regarding foreign materials and black or dark specks in its drugs.

Reading such things reminds me afresh of why I am happy to hand over a chunk of earnings to taxes: Because unfettered capitalism is actually a pretty crappy way to run a society, and I don't especially want to worry that over-the-counter painkillers are going to kill me or a nearby toddler because it was cheaper for a company to cut corners and ignore problems. I want regulators cracking whips over those who process meat, hold savings accounts, build bridges, fly airplanes and so on.

Sure, the government could be a more efficient steward of our cash -- I like internal watchdogs and get very cranky when they're hamstrung or ignored -- but in general, I'm a big fan of this whole "pay for an infrastructure that keeps society running" deal. It was a pretty clever system for us human beings to invent.

Things you learn along the way

2010-04-29T22:26:00.004-04:00

At some point I will get my head together and start properly describing the real-estate adventure. Basically there's two things I learned along the way:

1) buying real estate is insanely complicated and involves an epic ton of paperwork and logistics; and

2) like having a kid, this is a really complicated and responsibility-fraught thing that anyone who wants to can manage, no matter how ill-prepared they are for the task. David and I knew nothing going in, right down to the basics of "ok, we want to make an offer ... um, how do we actually do that? E-mail the seller's broker and say 'hey, we'd like Apartment X, how do you feel about [insert made-up number here]?' Fax? Call? Send carrier pigeon?"

And yet, roughly 90 days after deciding we wanted to buy an apartment, we got to move into our newly owned condo.

Saturday is May 1, when we'd typically write our rent check. But one of the Things Everyone Apparently Knows But I Didn't is that when you take on a mortgage, you don't make a payment the first month. Because unlike rent, which you pay in advance at the beginning of the month, mortgage is collected in arrears, after it's owed. So because we closed in April (and at closing prepaid the interest the loan would accumulate in April), our first payment is due in June, to pay off the debt we incurred in May.

Practical upshot: A month in which we owe no mortgage or rent payment. Hooray!

Reality check: Like any new homeowner, we had a ton of stuff we had to buy to make the place functional. Including a couch, 7 chairs, a deck table, a bench, lamps, a bedside table, and roughly a dozen boxes of cleaning supplies. Our Amex bill for the month was about what the mortgage would run. So much for spare cash.

But hey, we did what the government hoped we'd do with the first-time homebuyer credit -- economically stimulated every retailer within a half-mile blast radius.

I guess it's real now

2010-04-15T22:33:00.003-04:00

Just as two of my friends are writing extolling the financial savvy of renting forever, we got our first "please to be sending the mortgage check on June 1, kthxbye*" _{[*'no really, please please send the check, we really need it']} letter from Bank of America.

So it's official ... we own now. Eeek/yay! I have economically stimulated half of Brooklyn's homewares shops, much to Amex's glee. We celebrated coughing up five figures at the closing table by immediately dropping almost as much again buying a couch, terrace table, chairs, groceries, and enough laundry detergent to last us eons, because I am celebrating having a washing machine for the first time in my adult life by doing approximately fourteen loads of laundry a day.

At some point the giddy euphoria will wear off and I will return to talking sensibly about finances. In fact, I'm gonna go take the edge off right now by wrapping up some day-job work and delving into corporate tax filings.

While listening to the background noise of my whirring washing machine.

$48,986.93

2010-03-31T23:31:00.003-04:00

... is what it costs to transfer one piece of residential real estate, the apartment David and I are buying tomorrow (if, *fingers crossed fingers crossed* the close doesn't get delayed again).

None of that sum is the down payment, or any piece of the actual sale price. It consists entirely of title costs, attorney fees, broker commissions, taxes, and every other bit of this transaction that some third-party is managing to carve a piece off. I knew going in that this was going to be pricey, but damn. I'm impressed. And boggled.

Happily, we're not on the hook for all of that cost (merely the vast bulk of it), and some we financed into the mortgage loan. But still. This is not some Donald Trumpian multimillion-dollar real estate deal. It's a standard-issue, six-figure home loan, one in which I fought hard at every step against junk fees and avoidable "extras" we could opt out of (I now speak fluent GFE, HUD-1, RESPA and TIRSA Rate Manual).

That is an impressive amount of price padding from what you see on the sticker.

Health care reform zero hour

2010-03-19T12:21:00.001-04:00

For someone who both a) cares a ton about healthcare reform, and b) works in a newsroom, I've been remarkably out of the loop on the whole Washington slog this past year.

Basically, I followed the details of some of the early proposals, but things were changing so quickly I lost the motivation to keep up. The best quote I've heard about Washington's legislative process came from an SBA spokesman last year, when my reporter pressed him for comment on stuff being talked about for inclusion in the not-yet-passed Recovery Act stimulus bill: "You don't give farm animals names if they're just going to get slaughtered. We're taking the same philosophy with these provisions."

That's how I came to view health reform: Call me when there's a bill about to go to the President to sign. Until then, everything in it is in quantum flux and not yet real.

So imagine my surprise when suddenly this week everything started moving super-fast and dominating the news and journalists began assembling for an all-day "this is it" coverageathon on Sunday. My reaction: Wait, what? What's happening? Is this going to be a really final bill?

Here's the best, clearest description I've seen (hat tip to Neil for the link) of the process now unfolding: from the Wall Street Journal, "Health-Care Bill's Final Act: A Look at Possible Scenarios." The gist: Yes, this is really it. By Monday, we could have new law.

What's in that law? That's what I'm trying to find out next. (It'll be what the Senate passed on Dec. 24, but I haven't delved into the details of that bill yet.)

How to celebrate the anniversary of screwing up your taxes: Do it again

2010-03-18T19:23:00.003-04:00

"We have a letter from the IRS saying we owe them money!" is not what you want to hear when you pick up the phone to answer a call from your spouse.

Ten years ago, the first year we were together, David and I managed to short the IRS to the tune of three grand and unexpectedly owe it all come April 15. The culprit was W-4 confusion: We both checked "married," not realizing that would set our withholdings as if we were each married *and* the family's only wage-earner. Throw together two salaries and a higher tax bracket and you have an expensive oops.

Since then, I've been pretty meticulous about the taxes, and we traditionally come in for a hefty refund. (Yes, intentionally -- we both would rather use the forced savings of overpaying the IRS than cut it close and end up owing. I realise that's financially foolish, but so far, the money I'm "losing" this way isn't enough for me to care.) This year's refund landed in my bank account just three days before David's panicky phone call.

It turns out what we owed money for was our 2008 taxes. "The income and payment information that we have on file does not match entries on your 2008 Form 1040," the letter sternly informed me.

"Calm down, wait till I get home, and I'll go through the records," I told David.

"Please give the IRS money so nothing bad will happen!!!" he replied. I admit, I shared a bit of the panic -- stiffing the IRS sounds like one of those things the federal government takes a very dim view of.

The form had one slightly reassuring line in it, though. "If this information is correct, you will owe $508," it said.

Okay. Suddenly owing $508 is no fun, but it's not like we were being told "cough up $10,000 and prepare for a stint in the debtors' gulag, and by the way, we're now gonna audit EVERY FORM YOU'VE EVER FILED WITH US, you untrustworthy tax-dodging leech."

The letter's "summary of proposed changes" showed two income payments unaccounted for on my 2008 taxes, but apparently very accounted for in documents the paying parties sent on to the IRS.

The first was $1,200 from Time Inc. for freelance work I did before I joined the staff, and for which I'd been paid on a 1099. When I went back in my records, I realised to my chagrin that the IRS was right. The work was done in late 2007 and paid in early 2008, and I'd totally forgotten about it by the time I filed my 2008 taxes -- which I did before the 1099 arrived in the mail. I hadn't included it. Note to self: Mint.com columnist Matthew might be on to something with his checklist manifesto.

The second entry in the IRS list was "taxable dividends" of ... $13. This came from the Sharesave account I cashed out just eight months after I started, because I left the company long before the shares vested. Apparently I made $13 in interest off it. I have no idea if that's true or not -- my dim recollection is that I got back exactly what I'd put in -- but since the taxes due on $13 are about what a cup of overpriced coffee costs, I had no interest whatsoever in digging out records or trying to fight that charge.

Happily, the penalties on stiffing the IRS -- at least for the three-figure amount I did -- are completely minor. The IRS says I owe $489 in taxes on the $1,213 I underreported, and $19 for a year's worth of interest. That's it. No "pay this draconian fine so you learn to never again shortchange the taxman" fees. I'd owe more interest and possibly some penalties if I didn't pay up straight away, but if I sent the check before March 31, I'd be back in Uncle Sam's good graces.

I cut the check that night. ("I will take this to the mailbox right this second," David said, sealing the envelope as he changed out the door.) The Treasury cashed it yesterday.

And I hope to never again be a tax scofflaw. I mean, I'm pretty sure the government (current debt: $12,644,040,577,175) kinda needs the cash.

The cost of dying

2010-03-06T22:03:00.002-05:00

Hello world. Sorry I've been so quiet; balancing apartment-buying (eeek) and work is brain-and-time consuming. The real-estate adventure has yielded a ton of blog material, but I feel like I need to sit on a fair bit of it until the closing contracts are actually signed and stuff can't suddenly go awry -- which it has been on a fairly regular schedule. So I'm stockpiling material and planning lots of updates in a month ...

Meanwhile, I wanted to drop in a link to one of the best magazines pieces I've read in years: "Lessons of a $618,616 Death," this week's BusinessWeek cover story. (The cover itself is also breathtaking, with its fade-to-white line "The End of Life." The whole package is a wonderful reminder of the unique ways design and writing can fuse together in print.)

Health care is a topic I frequently come back to in this blog. I can't think of any financial decision more urgent -- what wouldn't you pay when you life is at stake? I also can't think of any financial system more utterly broken in this country. You think the housing market got irrational during the last decade years? It's nothing compared to health-care spending.

Amanda Bennett and her reporting colleague, Charles Babcock, do an astonishing job illustrating both the micro- and macro-economic issues of our current health system. The story's eye-grabbing headline number, $618,616, is what it cost for a seven-year fight against the kidney cancer that in 2007 killed Bennett's husband, Terence Bryan Foley -- "father of our two teenagers, a Chinese historian who earned his PhD in his sixties, a man who played more than 15 musical instruments and spoke six languages, a San Francisco cable car conductor and sports photographer, an expert on dairy cattle and swine nutrition, film noir, and Dixieland jazz."

It's a vast number -- not to corporations and Fortune 500 CEOs, but to those of us who budget carefully each month to pull together rent or mortgage checks. "I think had he known the costs, Terence would have objected to spending an amount equivalent to the cost of vaccine for nearly a quarter million children in developing countries," Bennett writes. "That's how he would have thought about it."

It's a number with almost no basis in tangible costs. The list price on one chest scan was $3,232. Medicare pays less than $300 for that scan. UnitedHealthcare pays almost $2,600. Empire BlueCross pays $775. What does it actually cost? "The documents revealed an economic system in which the sellers don't set the prices and the buyers don't know what they are," Bennett reports. "Prices bear little relation to demand or how well goods and services work."

Was one life worth this investment? Bennett does a deft job illustrating how fraught and unanswerable that question is. "Who did the paying? The health insurance system depends on healthy people bearing the cost for sick ones like Terence," she writes. "Should you have had a voice in Terence's final days? Would I make the same decision with my money for your loved ones? These are things I think about now but can't answer."

And yet. The intensive medical intervention -- at a six-figure expense -- bought Terence some statistically improbable extra time. I'll leave it to Bennett to describe what those extra months meant to her family -- stop reading this, go read her article.

I have my own version of the story, which almost certainly colors my health-care views. My mother was diagnosed with cancer when I was 14, and died of it when I was 16. I'm almost 32 now, which means I've lived nearly as many years without her as I had with her -- but there still isn't a day I don't feel how strongly how who she was affects who I am (hi, pitch-black sense of humor and perfectionistic streak! Also, the financial geekery. I like reading SEC filings. There's no way that's not genetically influenced by my bookkeeper mom -- it's downright unnatural.) And four years ago, I spent most of a week haunting the ER and waiting rooms at our local hospital. It was a medical problem with a lingering aftermath, and a fresh reminder -- not that I needed one -- of how essential good health is to having a life you enjoy living. And how financially fraught trying to safeguard it can be.

Fixing our health-care system is a bogglingly complex undertaking. There's a thousand ways changes can go wrong, and just as many ways for those with vested financial interests to hijack improvement efforts. But there's also a giant cost to leaving things as they are. And even for those like me, like Bennett -- with top-quality health insurance and the financial resources to navigate the labyrinth -- it's a badly broken system.

We can't afford to maintain the status quo.

Notes from the trenches

2010-01-18T21:16:00.003-05:00

I'm now midstream on the buying-real-estate process. Almost every email I've sent in the past week begins with "EEK!"

The status: We made an offer. We haggled. The seller counter-offered not just a different dollar figure but an entirely different apartment. (It's a big building, about 250 units, of which a bit more than half are sold.) We liked the new (cheaper!) apartment much better and asked why we hadn't been shown it before. Answer: Because the asking price was vastly higher than the one on our original target. But since the square footage is a tad lower, the developer will take a lower price on it -- despite it having various other advantages that made it, to us at least, more attractive.

NYC real estate is insane.

Someday I will have a proper blow-by-blow, but here's what I've learned so far:

-NYC real estate is insane but the closing costs are off the planet. My whole real-estate quest started because I got envious of my friend's story of buying a Baltimore townhouse with an FHA loan and total cash costs of $4,500. My cash costs? We will be damn lucky to get out for $40,000. That includes 3.5% down and -- the really ouchie part -- NYC's smorgasboard of closing costs. Corcoran has a breakdown that seems accurate in my limited experience so far.

-If you're buying NYC real estate, do anything you can to get a CEMA (Consolidation, Extension and Modification) from the seller. I'm told they're more work for the banks and the lawyers, but they also save you vastly on the tax costs. Originating a new mortgage costs you almost 2% of the sale price in New York taxes. A CEMA transfers the seller's existing mortgage to you -- you only own taxes on the difference between their mortgage and your new one. We got a CEMA, and it's saving us a five-digit sum.

-On other hand, even with a CEMA you'll still get hit in New York with property transfer taxes. In our case, that also equals just under 2%, which has to be paid at close. Did I mention how much NYC real estate bites?

-If you're planning to tap investment or retirement accounts, start setting things up as early as you can. I'm pulling money from my IRA (Fidelity) and David's IRA (Vanguard).

When we went to transfer funds to cash in his IRA, we found that Vanguard didn't have proof of his taxpayer ID. That required sending in a W9. We're now waiting for it to process.

In my IRA, direct deposit of funds you're withdrawing requires activating a connection with your checking account. Fidelity claims that takes seven days, but I activated last Wednesday and my account says it won't be ready for transferring until this Friday. Then the actual transfer can take up to five days to process. I imagine I'll be paying the $15 fee to wire cash, which I could have saved if I'd set up the electronic account connection sooner.

Selling investments to move the money to cash also takes time. I did that too last Wednesday and am still waiting for my VWO trade to settle.

-If you can avoid an FHA loan, do it. It's pricey, costing 1.75% of the loan amount upfront (you can fold the cost into your loan, but you still have to pay it) and a monthly premium of up to 0.55% of the loan amount (calculated annually, paid monthly). It takes the place of PMI, which you don't pay on FHA loans. In our case, the premium adds $260 a month to our payments. If you have the money for a more substantial downpayment (we don't), you can avoid all this.

-EEK!

Hold breath, leap

2010-01-06T00:06:00.005-05:00

Last time I posted, I was consumed with changing bank accounts. (I'm trying Schwab now, btw. Will report back soon on it.) Life is odd in how damn fast it changes.

We're trying to buy an apartment.

I kind of don't want to say much in case I jinx it, but if this works -- or if it irrevocably doesn't -- I'll post all the gritty details. The short version: The annual lease on our apartment runs out Feb. 28, and we'd planned to move. I **loathe** moving, but after five years here, I can't pretend any longer that two people, two cats and 2,000 books fit into a glorified studio with one (ONE!) closet.

I grumpily started scoping out rentals. I pretty much assumed that these days, if you can't put up 20% for a downpayment (and in NYC, that means six figures), you're toast. But one of my friends recently bought a house (in Baltimore) with an FHA loan. And I'd been hearing about various Brooklyn condos getting FHA approval. So I did a bit of poking around -- and found, much to my shock, that it has suddenly become a somewhat viable option.

You lock yourself out of most listings if you need to go the FHA route. I'm told getting approval for single family houses is very hard (many still exceed the loan-size caps, even though they've been raised), and you flat out can't do a co-op, which is what vast swathes of the NYC apartment market are.

But there's a half-dozen high profile Brooklyn condo projects that now have the fast-track FHA approval. And there's one I'm really drawn to. And we found a unit in it that is really, really intriguing for us. And I spoke with the building's preferred lender, and he gave us the green light for a loan with his bank. (5.5% interest! at worst! he thinks maybe less!)

So after two days of incessantly banging on my HP 12-C to work out all possible fees, contingencies, etc ... we're about to ready to put in a bid.

EEK. This feels like jumping off the high diving board.

Chase's incredibly sleazy WaMu bait-and-switch

2009-12-12T14:28:00.003-05:00

Well, I need a new bank. Again.

As mentioned before, I have one hard-and-fast, possibly irrational demand for my bank accounts: No fee for using outside ATMs. I'll pay a fee to the ATM operator. I think the fees are obnoxiously high ($2 to spit out some cash? Really?), but I can at least recognize that the ATM owner is providing me with a service. For my own bank to charge me a fee for daring to venture outside its ATM network is punitive and controlling and it makes me wildly angry.

I realise that getting as wound up as I do about something that, at the outside, would cost me maybe $100 a year is unreasonable. I'll drop $100 for a dinner out without wincing. But. For whatever reason, this is my flash point. I do not want to do business with a bank that charges me for outside ATM withdrawls.

The last time I went bank shopping, WaMu won in large part because it didn't have outside ATM fees. That turned out to be not wholly true -- WaMu sneakily snuck in fees for checking your account balance at an outside ATM, even though withdrawing cash was free -- but I grouchily decided to let that stand.

When WaMu went down, this was my biggest and most immediate concern about getting rolled to Chase: ATM FEES, DO NOT WANT.

It took Chase nearly a year to actually force migrate me from the WaMu platform to their own, which finally happened in full in July. Chase sent out a giant, thick packet of diclosures about my new bank account. I, of course, skipped right to the ATM fees section, and found what seemed to be good news. For ex-WaMu customers, Chase was creating a new account, "Chase Free Extra Checking." Key difference between that and Chase's usual checking: No outside ATM fees.

I was pleasantly impressed. Chase seemed to be doing the right thing by its WamMu crowd. I carried on, relatively happy with my new bank.

Until this morning, when I went to balance my checkbook. And found, littered through my November transaction register, two $2 fees labeled "NON-CHASE ATM FEE-WITH"

What. the. hell!?

So, spitting bullets, I called Chase customer service. The rep explained that my account terms called for no fee for the first two non-Chase ATM withdrawls each month, and a $2 fee thereafter.

NO, I fired back. NOT TRUE. I have here this giant thick account disclosure paperwork stack which explicitly says no fees ever ...

While she put me on hold to go find an account specialist, I went Googling.

And found this blog post, with a warning in the comments about "IMPORTANT CHANGE TO NON-CHASE ATM FEES
FOR CHASE FREE EXTRA CHECKING"

Oh bugger.

Seems Chase snuck a pretty significant change in the account terms into the fine print of September statements. Here's the thing: Like almost everyone else on Earth these days, I have paperless statements. I don't read them. I scan my account register to reconcile things, but don't go reading fine print each month. And Chase never sent any kind of alert or special disclosure about "hey, we're changing the terms of your account, here's the explainer to read."

I pulled up the electronic version of my September statement, and sure enough, there's the ATM fee change notice. A whole TWO MONTHS after Chase helpfully assured me it wouldn't change fees. And the "two a month" bit is temporary -- starting 2/2/2010, all non-Chase ATM withdrawls are slapped with fees.

I'm pissed off and bank shopping.

It's not just the fee. It's the slimy way it was snuck through, and the lack of transparency, and the general sense I've always had from Chase that customer service is way, way down on their priority list, significantly below "pry every dollar we can from the marks we do business with." I always hated the way they treat credit-card customers. I shouldn't have expected them to treat banking customers any better.

So. Anyone have a bank they actually like? With no ATM fees. Because I am getting the hell out of Dodge, before Jamie Dimon's hordes figure out a way to slap a surcharge on customers for consuming oxygen or whatnot.

Must be love

2009-12-02T22:06:00.003-05:00

The spouse and I just had an epic, high-volume heated debate about federal financial regulation. Now that we've made up, I'm utterly amused by this. Perhaps this is a topic they should add to premarital counseling -- "What's your theory on housekeeping? Do you want kids? And how do you feel about the last five Treasury secretary appointments?"

Silicon bonanza

2009-11-07T22:09:00.001-05:00

Twenty years ago right about this month, my dad went out and bought our family's first personal computer. It was an Apple IIGS, and ours was the first family I knew of with our own computer. I recall it costing around $2,000.

My sister and I loved the new computer. It arrived just in time for me to hit middle school and start having papers to write, and I still can't fathom how anyone did that before electronic word processing. My family also had an electric typewriter, which I think I might have used to write precisely one school paper, but even then I had the sense that typewriter was more of an archaic novelty item than an actual functional tool.

The IIGS was eventually joined by a Mac (nominally bought for my Mom to use for her business, but Lisa and I mooched it frequently), and when I went off to college, I spent all my savings buying a Mac laptop. It had a 500MB hard drive and cost me about $1,000.

Not long after that, my sister got a first-generation iMac, and thus began our era of everyone in the family having their own PCs.

Since that first college Mac laptop, I've run through more computers than I can count. (In several cases, the line between what was 'mine' and what was my job's computer has been fuzzy -- starting my sophomore year of college, I had a school-issued laptop for my Residential Computer Assistant gig, which I basically used as my own personal machine as well as for work stuff.) But for the past decade, one split has been clear: I have my computers and David has his, and the two sets stay very separate.

Some of this comes down to preference. I like desktops, and by the end of college I'd made the switch from being an Apple fan to preferring Windows. (Yes yes, I know, this makes me an inferior human being. Trust me, there's nothing you can say on this that David hasn't already.) David strongly prefers Macs and laptops. So as soon as we had the spare cash, he went out and got his own MacBook.

This popped to the front of my mind right now because my current desktop has been showing signs of impending death for months. It's only the second desktop I've had since 2002, and I got about four years out of it, so I can't complain too much about having to upgrade. I took the early Windows 7 reviews (the general tenor seems to be "well ... it's waaay better than Vista ... and seems to be actually ok ...") as a sign that I should finally let go of Windows XP. So, sitting on my living room floor and waiting to be installed, is a new HP Pavilion desktop with Windows 7. Total cost: $544. Can't complain about how computer costs have fallen over the years.

But I'm curious: Are David & I now the aberration or the norm? Do most families share one computer, or does everyone (adults, at least, and probably older teens) have their own?

Also, I remain slightly boggled by just how damn much computing power we get to take advantage of these days. David's standard computing lineup consists of: MacBook, iPhone, iPod 60GB classic, BlackBerry, fancy Canon camerathingie I forget the details of.

My computing setup: Windows desktop at home, HP Mini netbook for travel, BlackBerry, cell phone (very primitive Samsung, but it does have a browser), Palm (Tungsten E2, and I remain in deep denial about Palms basically being discontinued), iPod nano and Bluetooth-equipped Canon PowerShot. And all of that together costs less than my family's first IIGS. Wow.

Paychecks -- YAY!

2009-09-29T22:52:00.002-04:00

One of my goals for 2010 is going to be "regain this mythic Work-Life Balance I hear talk of." But for the moment, I remain buried in gianter stacks of Things to Be Edited than I'd ever imagined existed. Possibly deciding "sure, I can manage 50 pieces for this upcoming big package!" was not one of my cleverest moments. (Caveat: I like my job better than any I've ever had, which is nifty. However, I wish I had 40-hour days in which to do said job.)

But while I've been toiling in the edit mines and not blogging, David returned to the working world. Six months after he quit his job, he's landed a new one.

Which changes our economic picture quite a lot.

We managed the one-job period better than I expected. Dropping to one income was always one of my personal nightmares, and it's been a happy surprise to find that we managed to pay our rent on time every month, cover the bills, and not slip into more credit-card debt than we can clear up in a month or two. This remotivates me to actually attempt some frugality and savings when we return to our usual two-paycheck state.

David's new job has two key features that make it very of-the-zeitgeist. First: It's a contract job. The general idea is that if both sides are still happy in a few months, it will convert into a standard salary-and-staff position. But he came in the door as a freelancer, and for the moment, the company prefers to keep it that way.

Which is fine by us, since we're covered on the only area of staff-vs-freelance job I don't want to live without: health insurance. My company has an absurdly good plan, and David switched onto mine as soon as I took this job. Paid time off, a 401(k), job security and other such luxuries would be nice, but as long as he's got health coverage and is getting steady paychecks, I can't get too fussed about 'em.

Second: David landed this job through personal networking, not a recruiter or job board. Personal networking of an especially oddball sort. He and a friend of his volunteer as Stats Dudes for the local roller-derby league. One of the skaters is a statistician. She and David got to chattering, and when an opening for a statistician came up at her company, he used the ref to get in the door. Ask me which of his many interests and hobbies would lead to a job, and I would never have guessed roller derby ...

We're still a few weeks away from actually getting that first check, and having to sort out freelancer taxes is going to be lots of fun. (I am suddenly very grateful for an excellent article a freelancer pitched me a few months back: "Freelancers: How to not screw up your taxes.") But we're at least tentatively back to full-operating-budget status.

And as the cliche goes -- David losing his job (in a roundabout way, since he quit) may have been, unexpectedly, the best thing to happen to us all year. He spent almost 10 years there, and many were good years, but things had gotten pretty rough. He needed new projects and challenges. Having a few months' break cheered him up astonishingly much, and he's really enjoying the new gig and the people he's meeting there. I thought quitting a job in the middle of a recession would be a horrendous mistake, but it seems to have led to much better things.

I like when life works out like that.

(Edited to add -- I've had this blog almost four years and never before made a "jobs" tag? How odd.)

My story of medial rationing

2009-08-24T17:27:00.002-04:00

Something that can't be said often enough or loudly enough during the ongoing heath-care reform debate: Most of the dire things protestors and reform critics are most anxious about are happening now.

Want to see a real death panel? Go before an organ transplant board. Scared of waiting two months for an appointment with your family doctor? In Boston, the average wait time is currently 63 days. Worried that scarce and expensive health care will be rationed? It already is. The only difference is that the decision-makers about who gets care and who doesn't are insurance companies, not government-backed organizations.

Three years ago, we had a health care scare in my family. David and I are among the medically lucky: We've always had plans provided by large, multinational employers with relatively deep pockets. An ambulance ride, a night in the ER, a week in the hospital, and prescription drug costs of around $120 a month were covered with fairly little fuss. Of the roughly $20,000 that emergency week cost, we paid only around $1,500 out of pocket.

But this health scare necessitated weekly follow-up visits, initially with more than one specialist. It happened literally in the very first week of the year -- after I'd made my health care elections and locked in my FSA contributions (then at $0, because we'd never before used much medical care). In the 52 weeks that followed, about 60 follow-up appointments were required.

These weren't optional. I had letters from three different doctors attesting to the extremity of the situation and the fact that, in their opinion, this was a potentially life-and-death situation.

But our medical plan capped outpatient visits at 30 a year. Somewhere in my filing cabinet I have a letter where the company explains that in this case, the medical necessity of the appointments was irrelevant. Having letters from doctors saying "left unsupervised, this could result in death" didn't matter at all. What mattered was that the fine print of my insurance plan said that beyond 30 visits a year, the company would not pay a penny, no matter what.

So we had a choice: Come up with $125 a week for these appointments, or take our chances without.

We're lucky. We were able to scrounge up the almost $4,000 a year that cost (on top of the $1,500 in out-of-pocket costs for Emergency Week, the $3,000 a year we already paid toward our work health-insurance plans, and the $500 we spent that year on prescription co-pays).

But if we hadn't been able to pay? No health care. If the result of that had been death, the insurance company would have had no liability, because in this case, it was completely within the terms of its agreement to entirely disregard the medical needs of its clients.

So when people drag out scare quotes about government health care rationing, I get extremely cranky. Doctors, drugs, hospital beds and the money to fund all of the above are limited. There is a reasonable debate to be had about how those resources should be allocated.

But let's not go into it pretending that we're not already making some brutal decisions about who gets care and who doesn't.

And if you're one of those who, like me, has a nice cushy corporate insurance plan, don't think you can't land in a situation where you're left without essential medical care.

Financial shocks

2009-08-18T22:15:00.002-04:00

Today's fun money stat: Your ATM is a drug dealer.

From the AP:

Chances are there's cocaine in your wallet. Researchers looked at 234 bank notes from 17 cities in the U.S. and found that 90 percent had small traces of the illegal drug.

Bills from larger cities, such as Baltimore, Boston and Detroit, were among those with the highest average cocaine levels. Salt Lake City had the lowest.

Not surprising on either the high- or low-end front -- glad to see my semi-hometown, Balmer, is representin'.

Also not surprising: The notice I got in the mail today from American Express today about their terms crackdown. In the face of growing defaults and next year's looming credit card reform laws, Amex, like most other credit-card companies, is looking to pry higher profits out of its remaining customer base. My APR is about to jump from about 11.5% (8.24% plus the prime rate) to 17.24%. If I'm late on a payment, it vaults to 27.24%.

I've never been late on this Amex, but I did go late on a Providian card payment about three years ago when I was traveling and lost track of dates. I'm usually careful, but I can't swear I will never for the rest of my life miss a deadline.

Should I do that, I'll also be whacked with a $39 late payment fee.

Meanwhile, Chase-- the bank with which I have a backup card that thankfully has no balance -- has yoinked minimum payments up sharply, in some cases more than doubling what people owe. Three guesses what happens when someone owes a larger monthly payment than they can afford to pay? Oh look, late fees and higher APRs!

I realize credit card debt is a problem people opt into, and bear responsibility for. But also -- arugh. This is gonna be ugly.

My next career move: Professional gambler

2009-08-11T22:34:00.001-04:00

Back in 1969(ish), my mom decided to invest in real estate.

Her much-older sister, who was of a generation that strongly believed in investing in Tangible Things, bought a summer house upstate. It was once part of a batch of cottages owned by a local hotel, which got sold off piecemeal as the 20th century progressed. Soon after her sister bought her house, the one ten feet away came up for sale. Family lore (I haven't cross-checked against property deeds or anything) has it that my mom bought the house for $6,000, and its furnishings for another $3,000. Thus did my family acquire a 700-square-foot house named Covehurst, more popularly known as "the decrepit shack in the Adirondacks."

(That sounds unfairly derogatory except to those who have actually seen the place. It was built around 100 years ago and, until recently, left untouched. Functional plumbing was an exciting and rare occurrence.)

Since we had a "summer house," my family trekked up to Brant Lake every summer. And promptly began casting about for entertainments. Our 30-year-old vintage Monopoly set, Lake George tourist traps, and outlet shopping will only take you so far on a family vacation. You eventually need new distractions.

Like gambling.

At some point, my family realized that Saratoga Springs was less than an hour away. My mom and dad had always enjoyed horse racing -- my dad has stories of the Triple Crown race he watched Secretariat run live, and win by 31 lengths. So we began making annual day trips to the Saratoga races. I'm pretty sure my sister and I started betting on horses before either of us had our first beer, which has to be a fairly novel and backward way of doing things these days.

This weekend, my family converged upstate, and I spent Friday watching the last seven races of the day at this year's Saratoga meet. I don't know enough about horses to handicap with any kind of "effective" gambling system, and I suspect that if I did, I wouldn't be successful any more often than I am now. If gambling were a science, lots more people would be rich. So I look over the stats, but I'm still susceptible to a catchy name.

Like "Economic Tsunami."

In the middle of an epic recession, is there any way I'm not betting on the horse named Economic Tsunami?

I picked another horse that looked good and laid down an exacta box and an across-the-board bet on Economic Tsunami.

Who came second! I can't recall exactly what I was holding, but I hit the exacta and a few other bets, and my $10 wager paid me back around $100.

That was the first of three exactas I hit, my new daily record. Since I only place $2 bets, I'll never win crazy money, but I walked in with a stake of $120 and left with $296.40 (advantage of a statistician spouse: you always end up knowing exactly what you won or lost), which was definitely my best day at the track to date.

And I owe it all to Economic Tsunami.

Crash bang $40

2009-07-17T00:04:00.002-04:00

One of my friends recounted yesterday the ironic tale of how trying to save $4.50 cost her $40. The gist: To save the cost of a round-trip subway ride, she borrowed her roommate's bike -- then inadvertently blew out a tire. Sometimes, the transit gods, they laugh and smite.

I had my own version of that this evening. For possibly the First Time Ever, I am aiming to stick to a weekly budget. This is not a budget in the traditional (and, from my admittedly spoiled viewpoint, impossibly restrictive) sense, with pre-assigned totals for each category of spending. This is simply a fixed weekly number I'm trying to stay in sight of.

So, in the pursuit of frugality, I decided to cook in this evening, even though David is out at a baseball game and that's usually my cue to go eat somewhere he hates. I stocked up massively at the Red Hook Fairway this weekend (aka, Supermarket Nirvana), so one quick trip through the supermarket in my office building's basement later, I had a $3.90 piece of wild sockeye salmon and all the ingredients I needed for dinner. Once home, I hacked up some cauliflower to caramelize, washed a few dishes, and set things to roasting.

And then, from the corner of my eye, saw a fast gray blur of leaping kitten and heard a gigantic crash of glass.

Ashley, who this week got big enough to leap onto the kitchen counter, had just had his first encounter with the dish rack. The blender lost.

My first thought was "!$%@$$@$! I will never keep us all from stepping on a glass shard." My second was "well, I never much liked that blender."

I'd be much crankier about this had I not been thinking idly for years about replacing my very inexpensive blender with something flashier -- or maybe even, dare to dream, with an actual food processor. I've wanted one for ages, and it wasn't the price that stopped me, it was the idea of surrendering counter space to a new gadget.

I'm off to Amazon in a bit to price food processors/blenders/combo gadgets (does the iPhone perform blender functions yet?), but I'm bemused that my adventure in frugal cooking in has likely necessitated the blowing of my brand-new weekly budget to finance a blender replacement. I know "accident" is a category we have to budget for, but is there anyone who doesn't get annoyed by the unexpected expenses they incur?

I guess I'll just go be grateful I don't own a car.

Pay your bill, lose your credit line

2009-07-14T22:57:00.001-04:00

It's a widely told story that credit-card companies are whacking credit lines left and right. Just like so many of the customers they serve, they relied too much on leverage during the boom years, and now they're trying to dig out from under the financial rubble.

But here's a twist I hadn't realized: Paying off your bill is a good way to get your card terminated.

My friend A. has been an American Express customer for most of this decade. She carried a balance on the card, but never once paid a bill late, and generally paid more than the minimum owed. Recently, she consolidated various bits of debt, and in one fell swoop paid off all of her credit cards.

The next day, most of them started rejecting charges.

A. was sort-of prepared for this. An ongoing divorce and consequent delinquent mortgage (for the house she moved out of that her ex-spouse can't afford to maintain) has done unpleasant things to her credit score, and she figured that if she paid off outstanding balances, her credit-card lenders might carpe diem and reduce her available credit lines.

So she called them right after she zeroed out the bills, starting with Amex. "Should I expect my credit limit to be reduced?" she asked. Nope, not at all, the Amex rep assured her. No signs of a review on her account, no red flags -- she was all set.

Less than 24 hours later, we stood in a store watching her card get declined. As A. rang Amex on her cell, the Army & Navy shop owner was on the store phone with Discover, A.'s backup card, which was also bouncing charges.

Several phone calls later, the story that emerged: A. had never been late on an Amex payment, but she had a habit of paying "too little" on the account, saith the rep. (What's too little? Who can say? Something between the minimum due and the full statement balance, it seems.) Something in the system flagged A. as a bad credit risk, so the moment her card balance hit $0, Amex took the opportunity to clamp down and close her account entirely. No notice, no warning.

And because the account had been closed, there was no possible way to resurrect it. If A. wanted a credit line with Amex (not bloody likely, at that point), she'd have to open a new account -- thereby hitting her credit score yet further, by closing out one of her oldest credit lines and simultaneously putting in a request for a new line.

This happened on two of her four credit lines. To Discover's credit, it didn't terminate the card. It just bounced attempted charges for a few days as a fraud protection measure, because the massive payment to zero out the card struck its anti-fraud algorithms as strange. (Are there fraudsters who pay down your credit cards? If so, hit me please!)

So, be warned: If you're considering paying off a card you would like to keep using, it might work in your favor to not let the card go to a zero balance. Keep a bit of a balance on it -- less than your statement balance, so you don't owe finance charges, but something north of $0 -- so that the account still has activity.

Otherwise, your credit-card lender may decide that any risk at all is one it doesn't currently want to run.

Travels with Frugal Ferret

2009-07-11T23:15:00.001-04:00

It's amazing how one week of vacation can bottleneck a whole month of my life.

I took the last week of June off. This meant frantic, 12-hour-day scrambling for the week before at work, to set things up for my absence, followed by frantic, 12-hour-day scrambling upon my return, to catch by up. Hence, no posting. Broken up by a week of no posting because I was doing some massive lounging about.

My vacation was a bit of a personal-finance odyssey. When we dropped down to a one-job family in March, the first thing to go was our travel budget. I refer to Australians as People Who Do Not Stay Put. Within nine years of moving here, David managed trips to all 50 states. (I'm still one short: Hawaii.) Usually, we squeeze in a summer road trip and several extended weekend trips. This year, we're not weekending anywhere we can't reach by BoltBus.

But I had a wedding I couldn't miss in Denver, and as long as I was schlepping most of the way across the country, it seemed a waste not to try to tack on a trip to Seattle. Crash space was on offer in both cities, so I could make the trip for only the cost of airfare.

I still didn't want to spend several hundred dollars out of pocket if I could avoid it, so I cast about for other options. Like credit-card reward points.

The points that mysteriously disappeared from my Amex card when it rolled from an In NYC card to a Blue card in January happily reappeared about six weeks later. Amex's Membership Rewards system lets you use points to "pay" for travel purchases -- like airline tickets.

The bad: The redemption rate is a bit worse than the '10,000 points = $100 rate' that seems to be the going rate for what credit-card rewards points optimally buy.

The good: Because you're using points to pay off Amex Travel, instead of using the airlines' frequent-flier programs, this kind of redemption doesn't seem to run into the rampant blackout dates and other restrictions that airlines slap on their programs. The flights I wanted were easy to book. In the end, I shelled out just under 43,000 points to pay for about $380 in air tickets.

Of course, then I managed to blow all my frugality cred by spending all the money I saved on airfare on various glutinous foodie fits, but I think that's a fair trade.

The other reason my vacation was personal-finance themed was that I stayed in Seattle with Karawynn of Pocket Mint, whose zeal for the frugality mission astounds and inspires me. My idea of cost-cutting is remembering to order a case of inexpensive wine in bulk every month or two so I won't be tempted to make one-off runs to the shop for pricier bottles to drink with dinner. Karawynn calculates the savings involved in making her own bread. ($1.20 per loaf. Now you know.)

While discussing the cost of Starbucks-vs-homebrewed coffee, we somehow established that $3 coffee is a favored extravagance of Wasteful Weasels. "Karawynn doesn't like Wasteful Weasels," her partner Jak said sadly, mouring a tad for the days when he would make a run out for fast, full-cream coffees instead of brewing his own (which taste better!) with rationed half-and-half.

And thus did Pocket Mint's proprietress acquire a nickname referenced frequently through the rest of my trip: Frugal Ferret.

(Frugal Ferret was particularly horrified when Jak and I emerged from Voodoo Doughnut with a box of five, though I'm not sure if that was more about the indulgence of dropping $15 on sugar or for the sheer calorific destruction we wreaked. Either way, the Triple Chocolate Penetration was worth it.)

My first foray into ETFs

2009-06-20T14:35:00.000-04:00

I finally managed to move my Fidelity IRA money out of cash reserves and into funds -- just in time for the market's first down week in a month. So much for market timing.

Anyway, back to our saga of my IRA allocation. Having picked Fidelity Spartan Total Market Index (FSTMX) for my U.S. stock market index, I next needed an international index fund. Turing again to my trusty Money magazine list, I saw a few Fidelity and Vanguard recommendations.

But I also saw this thing called "ETFs" -- with lower expense fees! I'd heard of ETFs (exchange-traded funds) before but had no real idea what they were, so I started Googling, and found a nice primer.

Basically, for my purposes, it seemed to boil down to this: An ETF would have a lower expense fee than a fund. However, an ETF trades like a stock, which means buying one incurs a commission. At Fidelity, for my IRA, that would be $19.99. This made me leery, so I went back to looking at regular-old index mutual funds.

Usually, for my international fund, I buy something that tracks a total international stock index. But this time, I decided to be a little adventurous. It seems reasonable to speculate that emerging markets will do better over the next decade or two than developed ones -- there's a whole lot of room for growth there. So I decided that I wanted the Vanguard Emerging Markets Stock Index (VEIEX). It seemed like buying that, since it's a non-Fidelity fund, would probably incur the $75 fee that so annoyed me earlier, but I decided to suck it up and buy it.

... except when I tried, I got a notice that the fund was closed to new investors. Er? I don't know if that's actually true, or if for some reason it wasn't compatible with my Fidelity IRA -- remember, Fidelity's whole interface has been confusing the hell out of me -- but it seemed like this wasn't going to happen.

But having gotten it into my head that VEIEX was the fund I wanted, it was now the fund I really, really wanted. And lo, Vanguard's Emerging Markets ETF (VWO) tracked the same thing. And I could definitely buy that ... so I did. Commission be damned.

Buying a mutual fund, I could specify how much I wanted to invest. For a stock, or in this case the ETF, I had to put in an order for a number of shares, and take my chances with precisely how much that would cost at open. So I worked out what half the remaining money in my IRA would be, divided by Friday's closing price (I was doing this on a weekend), and put in an order for a batch of shares.

Happily, at work the next day I spotted an article on the upcoming story budget about ETFs. It's posted here: "ETF investing done right." It backs up what I'd hazily worked out for myself: Because you pay a commission on each trade, ETFs don't make sense for things like active 401(k)s, where each week you're putting in money money and immediately investing it. But my IRA is basically a one-shot deal -- I'm sinking in this chunk of cash once, investing it once, and then basically leaving things alone. If I do add more to this IRA, it'll only happen once a year or so. For that kind of investment, an ETF can be a little bit better than a mutual fund -- though really, it strikes me as pretty close to being just 'half a dozen of one or six of the other.'

Tackling the IRA

2009-06-14T00:25:00.001-04:00

I finally sat down to allocate my Fidelity IRA balance. What a headache.

I knew I wanted to mimic my 401(k) allocation, which is pretty basic: 40% U.S. stock market index, 30% international stock index, 30% bond index.

In my 401(k) accounts, this has always been very easy to create. The provider generally only offers one or two choices available in each category, so I grab the one with the lowest fees (hence my allegiance to index funds). But with my IRA, I apparently had the whole universe of stocks, funds and exotic investment critters available to choose from. Aiee! Decision paralysis!

As a starting point, I typed "best index funds" into Google -- and the first result was a link back to my own company's site, for a list Money magazine apparently compiles annually of recommended mutual funds. Which is exactly the kind of thing I was after, hooray!

First step: Try to figure out what fees Fidelity is going to charge me for my purchases. Digging around in the "help" section on their "trade mutual funds" page, I found this in the FAQ:

Fidelity will charge a short-term redemption fee if you buy a non–Fidelity fund and sell it within 180 days. This would be in addition to any fees charged by the fund itself.

That was the only thing listed in their "fees" section aside from some boilerplate about purchase, expense and redemption fees, so I figured I was pretty much in the clear. I typed in a purchase order for a batch of VTSMX, Vanguard Total Stock Market Index.

.... and then hit a warning that this purchase would incur a $75 fee. Grump. Fidelity offered an alternative: check out their list of no-fee "similar" investments. I clicked to see that, and got a screenfull of 100+ funds that aren't at all the same as what I wanted. No index funds, many with higher management fees -- I bailed.

Back to the list. Also recommended by Money was FSTMX, Fidelity Spartan Total Market Index. That had a $10,000 minimum investment, which was a few hundred dollars more than investing exactly 40% of my portfolio would call for.

Still, I figured Fidelity probably wouldn't charge me fees for investing in their own funds and decided to take the plunge. So I filled out the clickieboxes and successfully put in my order. One purchase down, two to go.

Next, for my international index-fund order, we come to the story of "Stacy learns what the hell an ETF is." Tune in tomorrow ...

Leaps of faith

2009-06-12T23:26:00.002-04:00

I spend every day at work editing, assigning, vetting and too rarely writing about all the many ways being a small-business owner really bites it right now. The economy is belting the [redacted] out of almost everyone right now; being "your own boss" sounds peachy till you realise that then the one who's responsible for every single paycheck (and permit check and tax check and payroll check and expenses check and insurance check ...) is you. I'm a firm believer that the best way to "make a small fortune" is to take a larger fortune and use it to start a business.

And, as a moonlighting Muser on Personal Finance Matters, I'm aware that the #1 rule of investing is "don't invest what you aren't willing to lose."

So what's the first thing I did after David left his job earlier this year? Take a chunk of my scant available cash and sink it into investing in a small business. A restaurant. (BusinessWeek did a piece debunking the 'myth' of the high restaurant failure rate. Their cheery finding: It's not 90% of restaurants that fail! It's only 60%!)

I never intended to be a business "investor," and barring extraordinary circumstances, I doubt I will be again any time in the foreseeable. Some business journalists chafe against the professional stricture against buying stocks and making personal business investments; I always considered it something of a relief. Hooray, I have an excuse for never developing a "personal portfolio." I write a personal-finance blog because I'm philosophically fascinated by money, and the way how we get it and what we do with it cuts to the core of the individual choices each of us make. On a dollars-and-cents-and-actual-tangible-cash level, money bores me. Hence my laziness about allocating my IRA balance and my sanguine outlook on the giant suicide dive my 401k -- the only "savings" I have -- has taken in the past year. If I lost five figures in actual cash, I'd be a wreck. A five-figure loss in my 401k? Eh, it's supposed to be "long-term savings," right?, and so far, this whole "retirement savings" thing is just numbers on paper to me. I sock away the max my company matches every year, and have since I was 20 because it seems the sensible thing to do (free money? yes please!), but at no point has the "savings" in that account every felt tangible to me.

Which is a longwinded way of saying I can't see myself ever investing in a business because I've done a mathematical calculation and determined that doing so would work out in my financial favor. I invested in this one because the moment I heard it was being considered, I desperately wanted it to exist. I'm a pragmatist. I realise that most things require money to exist. So if I could move little financial bits around and help make this business real, in a tangible way? Hell yes.

Which is, I've realised after 18 months on the smallbiz beat, is the mentality entrepreneurs always have about their businesses. It's not a balance sheet. It's not a disembodied economic entity, or a way to generate cash. It's a service or a shop or a creation they passionately want to see made real.

As an editor, I genuinely admire the entrepreneurs who can take a step back and face bottom-line realities. As an employee, those are the business owners I want to work for. But as a writer, I'm more of a dreamer. I want to see amazing visions made real.

So when Chef Chris, who created one of the best meals I've ever had (and I'm a food lover; I've dragged David to recommended restaurants in 47 states so far) in a city I love, posted on his blog that he'd found a great space for a new restaurant and needed a few investors, I dove in. I'm a tiny, tiny stakeholder in this venture; financially, I'm a gnat among giraffes, and in terms of time invested, Chef Chris and Chef Paul and their crew are living this venture daily. I have every confidence they'll make it a success, and I'll get my money back with a profit, but I honestly don't care. Which is why I felt comfortable making the investment in the first place.

As a financial writer, the first piece of advice everyone (including me!) gives is "don't risk money you'll regret losing." I know the odds. I know investing in a new business right now seems bonkers. Running a small business in the best of times is murderously hard, and in a recession? Aiee.

But I also know I could lose every penny I've invested in this and wouldn't regret it, because I think this needs to exist, and the only thing I'd regret is if I'd not done everything I could to make that happen. Which is what the true-believer entrepreneurs I talk with for articles always say: They never really had a choice. They had to do this, had to start that business, because they needed to try. Some succeed, most fail, but everyone had to make the attempt and see the thing they'd envisioned made real.

So if you're in New Orleans, I recommend dropping by the Green Goddess. As a good journalist, I have to note that I have a financial conflict of interest in recommending it, but as this whole post was written to explain, I'm a fervent believer that you'll have a pretty amazing meal there.

I want a new acronym (or, Goodbye 401k, Hello IRA)

2009-06-10T21:52:00.002-04:00

Two days before last month's cat trauma hit and most of my organizational planning ground to a temporary halt, I did manage to do what I'd promised to: Convert two abandoned 401(k) accounts (one each for me and David) into IRAs. Total elapsed workflow time: two weeks.

I could have left the accounts alone, or rolled my old 401(k) into my new one, but I wanted IRAs because I'd learned that you can withdraw up to $10,000 from them penalty-free (you'll still owe taxes) for a first-time real-estate purchase, which we may want to do at some point.

Initially, I'd planned to pick a financial provider and consolidate as many accounts as possible in one place. Technically there's no reason I shouldn't do that -- each of our accounts is well under FDIC insurance limits, and they're all housed at big financial services companies that are pretty unlikely to fail or seriously screw up. Plus, most of the money in the accounts is invested in mutual funds, which ought to tangibly own the underlying securities. If the brokerage makes a mistake or rips off the money, there's SPIC protection. That's a lot of backup.

And yet, still. With everything that's gone on in recent months with financal debacles, it felt like diversification would be a good idea. On the unlikely chance something goes wrong, not having all our retirement money parked at one company feels like a wise move. Besides, with my financial-services track record, my provider collapsing or my money being sucked out by hacker thieves doesn't seem so farfetched.

So I opted to set up an IRA for David at Vanguard, where his 401(k) already was, and I moved my old JPMorgan 401(k) to an IRA at Fidelity, the company that houses my current 401(k).

Doing David's was super-straightforward. He'd never registered with Vanguard's website, so I signed up and created his account there. After you do that for the first time, the site won't let you move money for seven days. I waited out the week, then went through the site's wizard-like steps for rolling a 401(k) to an IRA and reallocating the balance. If you want to keep your allocations exactly as they were for your 401(k), you can do that with one click. In total, the whole thing took me about 20 minutes (plus the one-week wait).

Because I was doing a transfer, mine was trickier. Fidelity let me open a rollover IRA online. But to get the cash into the account, I had to call JPMorgan to arrange a termination and transfer.

Calling JPMorgan revealed the sad truth behind the phantom vesting I'd been accumulating each year. Sure enough, it happened because my old company never actually told JPMorgan I'd left. To move my 401(k), they had to go back to the company and confirm my termination date -- and once they'd done that, poof went my two years of extra vesting. Drat.

JPMorgan took a week to sort that out, and then my account was free for transfer. To clean out my balance, JPMorgan sent me a check, payable to Fidelity Management Trust Company. Because the check was made out to Fidelity, not me, it was for my full balance -- no tax withholding that I'd later have to try to claw back.

It was extremely weird getting a check in the mail totaling about six months of my after-tax pay. It's definitely the largest check of "mine" I've ever held. Even though the check was bank-paper and not cash, walking around with it for a day was disconcerting. Reluctant to drop it back in the mail, I took advantage of Fidelity's Investor Centers to deposit it in person -- Fidelity has a branch right in the building I occasionally work out of.

Setting up David's IRA investment choices was easy; Vanguard's allocation options looked just like those I was used to from funding and allocating 401(k) contributions. Fidelity's, not so much. The interface looks more like what I'd imagine a traditional brokerage interface looks like. Instead of picking from a small batch of preselected mutual-fund options, I need to tell it what stocks or funds I want my IRA money invested in.

In the face of all these choices, I keep freezing up. I haven't yet summoned the willpower to work out what to do next, so for the moment, I am being an extremely bad long-term investor and leaving the giant lump sum parked in a "Fidelity Cash Reserves" account.

Oh well, it's not like stocks have done anything dramatic in recent weeks, right?

Consumer lifehacking

2009-05-27T23:23:00.004-04:00

There's some irony in the fact that ever since David left his job, almost every blog post I've made here boils down to "and then we spent money on this ..." Still. In the last few months, I've been, for no exactly definable reason, somewhat fixated on my own non-tech version of lifehacking: let's change what is sub-optimal in our daily lives. If that requires throwing money at the problem, conduct cost/benefit analysis, then spend.

One item that flunked this analysis: Vacation. We'd hoped to spend two weeks this fall doing a Vegas-San Diego-Grand Canyon road trip. Barring David landing a job, that's unlikely to happen. Much as I want to go, I don't want to ring up more debt to do it.

But in the last week, I've flung substantial sums at upgrading the household. In descending order, priciest (by far) first, the major expenditures were:

-New mattress

-Kitten! I miss River. David wakes up about once a week in tears about his tux not being curled up in her usual spot at her side. The saving grace getting us through all the sadness has been having our other cat, Kea, around. Which was, the ruthless part of my mind acknowledges, part of why I went and got Kea a few years ago. If we ever lost one cat, I wanted a backup around -- not to replace, but to remind us that we can love other critters that also need homes.

So last Saturday, I wandered into Petco, handed over adoption-fee cash (and another $80 for a carrier -- I abandoned River's at the vet because I couldn't stand to come home with it empty) and wandered out with a KittyKind cat. Ashley is five months old, three pounds, mostly gray and totally psychotic. It's been so long since we had a baby kitten I'd forgotten how insane (and tiny!) they are.

-Keyboard. This was the cheapest expense - $50 - but an amazing life upgrade.

I type loudly. At work, it's not uncommon for people I'm interviewing by phone to comment on my rapid typing speed -- which means that with my phone headset at least a foot away from my keyboard, they can hear me banging on keys. At home, this has traditionally meant that as soon as I started typing something like email, David, lying several feet away on the couch, would complain about the headache I was giving him.

After months of hunting online for a "silent" keyboard, with little luck, we finally went one evening to Staples and had me bang on their keyboards. We left with a Microsoft Wireless Keyboard 1000. I was very dubious changing keyboards would make a difference in my typing volume. I was wrong. The minute I set it up at home, I could hear the difference -- muffled thuds instead of jackhammer clatter.

Keyboard: $50. Domestic harmony: Priceless.

Braving the mattress sales

2009-05-25T23:26:00.002-04:00

When I bought my first mattress almost ten years ago, the whole thing was blissfully simple. I was just out of college, broke, and trying to buy all the basics for an apartment on a budget near zero.

I called Sleepy's and asked, "What's your cheapest mattress?" "$400," said the phone salesman. "Ah," I said, honestly chagrined. "My budget maxes out at about $200." "We can do that." Me: "Er, what?" Him: "$200, we can do that. When do you want it delivered?"

In retrospect, there's every chance my $200 mattress is whatever they picked up that morning from customers disposing of old mattresses. I have no idea what brand it is. It has no features, unless you consider "coils, mostly functional," a feature. It's iridescent blue and designed to be flipped, which I gather is no longer the done thing.

But when you're 21 and coming off three years of dorm mattresses, anything feels fine, and I slept happily on this for almost a decade. Until a few months ago, when I noticed that I could distinctly feel a few of the coils through the increasingly thin fabric. I started making noises at David about replacing it at some soonish point.

Then River got sick, and had a few accidents on our bed. Nature's Miracle is indeed amazing stuff, but I'm pretty sure not even Jesus could pull off the miracle of fully de-stinking our mattress. Replacing it suddenly gained urgency.

This time around, I felt obligated to approach The Mattress Hunt a bit more methodically than I did last time. (David delegated the task to me, claiming that he could sleep on anything and fully trusted my judgment on the matter. Translation: He really hates shopping.) So I started looking up information on what mattresses cost and what newfangled breakthroughs these modern-day, no-flip mattresses contain.

And -- woah. I don't have a car, but I imagine car shopping feels similar. "Sticker price" appears to be a complete fiction. You have to choose among all sorts of competing technologies -- memory foam, latex, natural fiber or synthetic, seventyzillion coils or no coils at all -- the salespeople are full of dire warnings about the consequences of choosing wrong ("Do you want to wreck your body with discomfort for one third of every day???"), and the prices are steep. Never mind $200 -- should I be spending $500 of $5,000 on this thing?

This is where I reveal my bad-consumer side. When it comes to major purchases, I hate the decisionmaking stage. My friend Karawynn will pour over Consumer Reports and read every scrap of available research before investing in a major household object. I tend to do a bunch of basic research, then get fed up and pull the trigger in a fit of "I just want this over with." After months of thinking about buying a new PC, I got my current one by one night simply getting annoyed with my constantly crashing desktop, going on eBay, and buying the first thing with a reasonable-looking price and enough oompf to run my word processor and Web browser.

So for the mattress, I tried to get a handle on the basics. I read New York magazine's I Slept on 100 Mattresses. It scared me. Removable top layers? Too springy? Too quicksandy? How would I know? $3,395!? Eek!

Then I hit Slate's Going to the Mattress, which hit the other extreme. Stevenson's basic premise is, "It's just a mattress, they're all interchangeable, buy the cheapest." The article was written not long after I bought my $200 special; I'm not sure if mattress technology really has come a long way in the past decade or if I'm just very easily sucked in by marketing hyperbole, but the Slate piece felt like simpler advice for simpler times.

But it did have some invaluable tips, including this detail: "Mattress makers rename identical products for each different retail store. Different labels, exact same guts. Why? Obfuscation. It's hard to shop for the lowest price when you can't compare apples to apples."

Ah! That kept me from even trying to use Sleepy's "We beat anyone's price by 20%" coupon -- not much use if it's a "guarantee" impossible to collect on because no one else "happens" to stock the same models.

Since I did at least want to try before buying this time, I headed to Macy's yesterday. I'd originally planned to go to a Sleepy's store or other mattress shop, but my friend Amy, who is also mattress-hunting, insisted Macy's had a better selection and comparable prices. Macy's in Manhattan is perennially a zoo, but the one in downtown Brooklyn was pretty empty, even amid the Memorial Day sales.

After a few glances at the mattress sales tags, which featured minimal text and explanation, I ended up giving up entirely on trying to "shop" by feature -- latex? foam? coils? I had no idea which I wanted -- and just road-tested a few. And ... they mostly felt alike. I could feel some slight differences between styles, and could tell if I was on a "plush" or "firm" variation, but which did I prefer? No clue.

Thirty or so mattresses later, I was getting slightly dizzy from the constant vertical-to-horizontal variation and still had only vague leanings toward one or two mattresses. Tempurpedic I hated instantly -- it felt like it would swallow me -- and a few mattresses with "pillowtops" that could hide elephants also went into my "no way" pile. But beyond that ... I tried $5,000 mattresses and $500 mattresses, and they felt different but neither was clearly better. At least, not for me. I just couldn't tell in a few minutes of lying around how I'd feel on each after a night of sleeping.

I had two mattresses I kept gravitating toward, though whether that was a real preference or simply a burning desire to make some kind of choice, I honestly couldn't say.

One was a Sealy and one was a Simmons. I copied down all the sales specs and headed home for some attempts at comparative Googling. The Simmons was, shockingly, Googleable: "Simmons Beautyrest NxG 250" turned up in a few outlets, generally for a few hundred less than it was priced at Macy's. On the other hand -- even with sales, discounts, rebates and whatever else crammed in, it was still over $2,000. Which seemed excessive.

The other mattress I was eying was a Sealy "Loring Park" Euro Pillowtop Firm. The "Loring Park" part was clearly the retailer-specific branding mentioned in Slate. A pretty stupid branding, at that. "Loring Park"? Other variations on this model appear to be the "Candle Glow," "Hidden Meadow," and "Pecan Ridge." Pecan Ridge? Are they naming these things with Mad Libs?

The "Loring Park"'s most salient feature was its price tag: Nominally $1,099, but on "Memorial Day sale" for $999 plus an extra 10% off. (I use the scare quotes because I imagine the mattresses are always on some sort of "special" sale.) Since I only wanted a mattress, no box spring (we're upgrading the mattress, but our bed remains the $150 Ikea platform bought back in the original-apartment-furnishing whirlwind), I knew it would be a bit cheaper.

Even though I didn't buy a set, Macy's waived the delivery charge, and I got an additional 10% off by opening a Macy's card account. So, final tally, with taxes, no-boxspring, sales, etc all factored in: $700.

Which seems not too terrible for my first plunge into the horrors of mattress shopping. Now to find out how we like sleeping on this thing ...

The cost of a broken heart: $1,071.50

2009-05-08T23:14:00.001-04:00

It's a bit strange to say "three years ago I wrote," but it turns I've had the blog that long. Time goes fast. Life goes faster.

The day I moved into my first post-college apartment, I went to the animal shelter to get my first post-college cat. Ever since I was a kid, I've been a cat nut -- I spent about five years pestering my parents before they cracked and, right around my 11th birthday, let me get a cat. My dad and I went to the shelter and returned with Max, who slept on my bed every night until I headed off to college. Max stayed in Maryland when I moved to New York, but there was little question that as soon as I left the dorms and had pet-friendly accommodations, I'd be procuring a cat.

As soon as I got that apartment, I went and adopted River, who came home with me in October 1999, when she was about three months old. David moved in about a month later, and even though I had her first, River instantly decided she was his girl -- I often referred to myself as her Emergency Backup Human.

Three years ago I wrote about the financial cost of pets, including the inevitable whopping vet bills.

Monday, we noticed River was sniffling a bit, and she had an accident on our bed. I thought she had a bladder infection and maybe a cold. I called and made a vet appointment for Tuesday morning.

River had a panic attack on the way to the vet, and started panting in a way we'd never seen before. The vet seemed more worried about her panting than any of her other symptoms, which initially struck me as strange. Three hours and two X-rays later, the vet was proved right: What I'd thought was a cold was a massive tumor filling River's chest and pushing on all of her organs. By the end of the day, she couldn't breathe well without an oxygen tent.

Wednesday we found out it was lymphoma, inoperable and incurable. Only 48 hours after we realized our cat was sick, we had to say goodbye to our girl.

It cost just over $1,000 in vet medical bills to lose River. We would have paid any multiple of that to save her. As one of my friends said about two years ago on the night he lost his own cat -- "It's the price you pay. They're guaranteed to break your heart at some point."

David and I had River as long as we'd been together. We knew she'd be gone someday, but she was only nine, and we didn't expect it so soon. It's kind of a new milestone for us. Our family, without River.

Pets. One of the most expensive, devastating --and rewarding -- investments you can make. We've spent the last few days giving our younger cat a massive overdose of snuggling.

Shining light on financial monsters

2009-05-02T23:55:00.004-04:00

The thing about this recession is that I know almost no one unaffected. All around me, I've got friends who have been laid off, had their salaries cut, seen their hours pared back, or finished grad school just in time to hit an epically bad job market. My own household is down one job, with an income that's half of what we had a year ago.

My friend Rose recently put up a blog post I found fascinating: Talk about how financially screwed you are. I think it's great, because hearing so many stories helps dispel the thing that perpetuates financial problems. Shame.

When the numbers are awful, you don't want to look at them. After college, when I had a monthly income that fell a few hundred dollars short of what I'd need to pay rent, student loans, living expenses and the bare minimum on a credit card debt that felt insurmountable, I threw bills out unopened. Sure, paying things months late trashed my credit score and racked up late fees and yet more interest charges, but the whole thing felt so hopelessly out of control I psychologically couldn't cope.

Two things finally broke that cycle: 1) David, who had just moved in with me, said that he couldn't stand that approach, and if I couldn't deal with taming my finances, he'd do it for me. He called my credit card companies and dealt with all the logistics of figuring out the size of the problem. 2) David got a job just a month after arriving in the U.S., and suddenly our household income doubled. Step 1 was critical in getting a handle on the problem, but there was no way we could possibly have addressed the financial shortfall without more money.

With the economy at a standstill, most of us can't do anything right now on Step 2, Increase Household Income. But Step 1 is do-able. The first step toward getting rid of the monster lurking under the bed is looking at it. Without letting it make you feel ashamed or afraid or like a bad, horrible person for having a lurking monster -- because hey, recession? Right now, lurking financial monsters are fashionable! Everyone is having money problems! You have company!

(Financial Monsters are spikey and they drool. I also strongly suspect they are purple. The illustrative Financial Monster pictured above is borrowed with permission from Mac McRae's extremely awesome monster gallery.)

This isn't something you have to do alone. If you have a stack of credit card, student loan or medical bills that you aren't paying, or that you don't even know how much you owe on, or the rates are stratospheric but you can't stand the thought of calling to negotiate -- enlist a close friend. Other people's stacks of intimidating bureaucracy are so much less daunting than your own. Have a friend over -- someone with a penchant for organization is perfect -- pour a glass of wine, and dive in. Once you know the shape of the problem, it generally stops feeling like a scary vortex of failure and shame, and starts becoming manageable.

On that note, I'm buckling down tonight to finally sort out our chaotic mess of retirement accounts -- the goal is to turn our two abandoned 401(k)s into IRAs. And over at Rose's, there's a followup post about what people are doing to tackle their financial demons.

And if you're doing financial debugging, here's two past posts that may prove useful:

-Debt statute of limitations - what they are and how to use them, plus a debunking of the apparent myth that contacting a debt collector restarts the clock

-The simplest good investment strategy for your 401(k) (aka "why management fees matter")

Value my social graph

2009-04-27T22:45:00.002-04:00

When I hit Google tonight to search for something or other, the top "Google Promotion" link was something I'd never seen before: Google Profiles.

Naturally, I Googled it to see what it was. Some very quick-and-dirty research suggests it's not new -- I very quickly landed this reference from 2007. I clicked the Google Profiles link out of curiosity but probably wouldn't have given it a further thought, except for this line of text in the standard "give us your stats" solicitation:

"A little personality: Something I can't find using Google."

Sure, I can tell you something you can't easily Google using my relatively public legal name and Google.com. I play the cello extremely badly. (Though really dedicated Googlestalkers could even figure that out.) I have a totally excellent recipe for something resembling pan bagnat, which I can't spell without consulting a dictionary or other reference text, and which I made for dinner tonight but didn't start making till about 9pm, kicking off an extended debate with the spouse about what time "dinner" should traditionally occur at.

But I'm not going to tell Google Profiles any of that. Because I'm currently in the mood to be fairly guarded about who by and how my personal information gets monetized.

This is on my mind lately because I'm very, very suspicious of Facebook, which I cracked and joined last-yearish and check more often than I like (maybe twice a week) because it's where a lot of my friends have migrated for their social networking needs. I set up my own first-and-primary social networking profile in 2002, on a site that I still check daily but am grudgingly accepting is becoming passe. (Hint: It's the one popular with teenagers and geeks, and now owned by "a Russian media company.") My original site has the ethos, community and interface that most appeals to me, but it's fast losing its original core crowd -- at least among my demographic -- to Dreamwidth, and I can see it going to way of my beloved Palm pilot: eventually, I will be one of the only ones left clinging to the neglected ruins of this once-trailblazing technology.

Which leaves the nextgen upstarts like Facebook and Twitter, with the slick interfaces (ok, that one, not so much for Twitter) and nakedly commercial ambitions. I don't like Facebook. Never have, doubt I ever will. I don't like it because it feels like all Facebook really cares about is using widgets and memes to entice me to cough up details of my social interconnections, to help it fill out its Social Graph Theory of Everything so it can sell that info to whoever will give it a zillion-dollar valuation or IPO.

I don't think anyone has quite figured out the business model just yet, but someday, the social graph is going to be an incredibly valuable piece of marketable data. To lots of people, I suspect. I, personally, might not be that valuable a marketing target. But if you can figure out who I talk to, what I care about, what I'm doing right this minute, where I am, what I'm reading, or what I care about enough to write about, and do that for millions of people -- you have a very saleable data set. Right now, Facebook is the leading application. Everyone, especially Google, would love to toss out APIs and become the infrastructure.

And I don't wanna play. If I'm going to hand over all the details that create a map of me, that some corporate entity will aggregate and sell for a billion dollars at some point, I don't want to do it because someone said "throw a sheep!!! and shsssh we'll infer from that who you know well enough throw a sheep at!"

Some years ago, I heard estimates kicked around about the value of all the physical components in the human body. The estimates appear to range wildly, from $4.50 to $45 million. I wonder how long it'll be till we know precisely the value of a human mind, and all the monetizable social connections it sustains.

My own personal M&A frenzy

2009-04-21T22:50:00.002-04:00

Continuing my track record as an identity theft lightening rod, I got yet another of the "we've noticed some unusual charges on your account ..." calls this weekend. But this time, I was wholly innocent; my habit of using skanky ATMs bears no blame. The charges hit a card I haven't used for years. Seriously, how easy are these algorithms to crack?

I remain impressed that the credit-card companies are as good as they are at sussing out what transactions are fraudulent. In this case, I guess it wasn't so tricky -- a card unused for years is suddenly broken out for a wild shopping bonanza -- but full credit to Chase for catching this and calling me just hours after it started.

However, it did raise an interesting issue: The rep asked if I preferred to have another card issued or cancel the account. In past years, I don't recall that being a choice; the companies would do almost anything to keep you an active customer. Seems this account of mine (credit limit, $6,000ish) was a potential credit liability Chase didn't mind killing off.

Here's what made me decide to cancel the account: I didn't know at first which Chase account they company was calling about.

The piece of plastic in my wallet that I use most often is my Amex, my primary credit card. Beyond that, I have my bank-account debit card, a MasterCard. I also have (had) two backup cards, both Visas, which only ever get used if a place doesn't take Amex.

My oldest Visa -- the one that got hacked this weekend -- began life years ago as a Providian card. Then WaMu bought Providian, and suddenly I had a WaMu card. Around that time, I picked up a Chase Visa card, as a backup. My primary bank was Netbank, so my financial life was nicely diversified. Plastic tally: 1 Amex credit card, 1 Netbank debit card, 1 WaMu credit card, 1 Chase credit card.

Then Netbank met its unfortunate end, I went bank shopping, and I landed at WaMu. Plastic tally: 1 Amex credit card, 1 WaMu debit card, 1 WaMu credit card, 1 Chase credit card.

Then, of course, WaMu also went the firey-death-in-flames route, and Chase snapped up their charred remains. My plastic tally: 1 Amex credit card, 1 Chase debit card, 2 Chase credit cards.

Which is kind of absurd. I don't need both my backup credit cards to be with the same bank. So, despite mild pangs of regret about the potential FICO effects of reducing my total available credit and closing one of my older credit lines, I waved adios to the ProvidianChaseWaMu card.

But I'm left wondering -- with all the financial melting down, will we have more than one American bank left at the end? My forecast for next year: My plastic tally will all be Wells JPMorgan Sachs credit cards.

The insidious disenfranchisement of the local pharmacy

2009-04-07T22:04:00.003-04:00

I've lately discovered the joy of batching paperwork. Every Friday afternoon at work, I blast through incoming freelance bills and payment complications; doing it once, at a scheduled time, keeps me saner and makes it go faster than trying to field every query right as it comes in.

Similarly, I don't like dealing with bills and bureaucracy as they comes in. I'd rather stack it up and deal with a bunch of related paperwork at once. Tonight, I finally broke down and attempted to sort out accumulated medical paperwork.

First cranky sidenote: I have at least three (prescription, physical doctors, head doctors) and probably five (add vision and dental) separate medical providers, for one (1) company health care plan. Now, this company health care plan is by far the best I've ever been on and I'm wildly grateful to have coverage at all, so I'm not complaining strenuously, but it took me several rounds of Login Routlette to land on the right combination of website and user name to pull up the first bill I wanted to sort out.

Once I finally found the bill, the first bit was easy if a bit pricey for those of us suddenly on a fixed budget: an $84.11 ambulance bill. "Er?" I inquired of spouse.

In January, he fell on an icy sidewalk and whacked his head, hard enough to spook those nearby. "Hi from the ER!" is not the text message you really want to get right after you walk in the door at work. Happily, all was well; the ER docs took a look and pronounced him probably fine, I came home to keep an eye on him for the day, and three months later, all is good. But it turns out he got to the ER via a local ambulance, which happened to pass by moments after he fell, and which those nearby flagged down. (This is not quite as random as it sounds, since we're literally a 13-block, 1/2 mile ride straight up one street from the local hospital, and there always seem to be ambulances around this particular intersection.)

Want a case study in the unfair tilt insurance gives to health-care access? The rack rate for this 13-block ambulance trip was apparently $908.25. Our plan reimbursed the hospital for $694.82 of the cost, and negotiated a $136.23 discount. (So if you were uninsured, you'd pay $136.23 more for the identical service. No, this does not strike me as a sane way to run a health care system.) Our remaining copay was $77.20. Writing an unexpected check does not fill me with joy, but I'd much rather pay $77 and have a spouse who came through a potentially ghastly head injury with no problems than not pay it and have Later Complications, so I happily filled out the paperwork and moved on to the next hurdle.

Our medical plan uses Medco to fill prescriptions. Last year, Medco barraged us with info about how much we'd save filling prescriptions online instead of at retail. We have one prescription that need to be filled every month, at $40 per pop. Medco wanted us to know that if we instead ordered it online, we'd instead pay $60 for a 90-day supply, or $20 a month.

The tricky part: This prescription is for more than the (legally? medically? I've never been wholly clear) recommended dose. This is the dose that works, and my cursory troll of Google when this prescription got ramped up turned up ample evidence that this drug is widely prescribed in higher-than-guidelined doses, but every time this prescription goes to a new pharmacist, they refuse to fill it without calling the doctor to confirm that this is the intended and prescribed dose. Which can get be slightly frustrating when you're in a hurry, but is fine; pharmacists are supposed to be a check-and-balance against prescribing doctors.

So, Medco kept sending little alerts that we could save money filling this prescription by mail, but we chose to keep filling it at our local pharmacy. The pharmacist knows the prescribing doctor, the store is very conveniently located, and it's worth the extra $20 a month to us to fill it in person.

Until this December, when Medco's little "helpful alerts" turned into "urgent warnings": The company was switching from carrots to sticks. In 2009, if we chose to take a covered drug (and this one counts) to a retail pharmacy instead of using their mail-order system, they'd radically cut their subsidy. A drug that used to cost us $40 a month would now cost vastly more -- banging around on their online system, the closest thing I can get to a "how much?" answer is either $68/month or $300/month. Nifty.

So, Medco is essentially forcing us to switch to online ordering -- but for a drug quantity that their automated order systems will almost certainly reject, since I don't think they can legally dispense a full 90-day supply of what is actually the prescribed 90-day supply, and at the cost of cutting out our local pharmacist who actually knows this case and does a good job keeping tabs on it.

Guess what I'll be spending lunch break tomorrow on the phone with Medco wrangling about? Can we please replace this mess with a functional health-care system, stat?

Being frugal is expensive

2009-03-30T22:40:00.002-04:00

In preparation for David's last day of paid employment at the end of last month, we took stock and battened down the financial hatches. This somehow cost us about $1,600.

(Once again, we're all shocked that the two of us haven't managed to save an apartment downpayment yet, right?)

It started with us doing an overview of the disorganized house. "If we're going to be staying in more, we should neaten this place up," I said.

That required finding ways to relocate some of our ~~Vast Debris Stacks~~ collections onto shelves. I'd long thought we were at max shelf/wall space capacity, but David wrangled another two feet or so out of the wall closest to the door. So off we went to Gothic Cabinet Craft to procure a shelf to fill the exciting wall vacuum. $189 later and one very creative deployment of a rolling laundry cart later, we had a new shelf dragged home and three less piles of DVDs and CDs.

Then we decided that since we're going to be cooking more, we should do a full stockup run at the Red Hook Fairway. $211 got us enough staples to keep your average militia fed for a few seasons. (And 2 squab. "Because it's good for us to experiment a bit when we find unusual stuff at the store," I insisted. Verdict on experiment? I am fine with regarding squab as a once-in-a-lifetime experience.)

I thought we were financially clear. Then Elder Cat started having Intestinal Distress. All over our bed. Three times in one week. "Well, it's been a while since cat checkups, and we should get all this stuff sorted while we're wrapping up bills ..." I thought. $348 later, Elder Cat was sent home with antibiotics, which turned out to be unnecessary because the prospect of continued medical intervention immediately cured kitty of all ills.

And finally, a vicious round of fights with the bathroom scale convinced me that I am tragically not immune to the metabolic effects of aging, and can no longer remain in denial about this "exercise" thing I hear rumours about. However, past attempts at physical fitness have taught me that unless it's tennis, my natural slothful instincts will overrule all attempts at physical activity for its own boring, painful sake. The only way I was going to conquer my own self-sabotage was bribery. IE: Join the fancy gym right in the basement of my office and be able to exercise without even leaving the building. (Seriously, two blocks away and I wouldn't go. I know my limits, and in combination with my vast powers of procrastination, they are formidable.)

Like many companies, mine offers nice subsidies for using the nearby gym. However, thanks to bureaucratic wrinkles that keep my employment situation only slightly less complex than 2010 federal budget negotiations, the office I actually work out of each day isn't considered my "home" office -- that's 10 blocks away. So to use my basement gym, I have to pony up for a special all-access pass, which incurred a one-time payment of OhDearGod$.

After trying for two weeks to bargain, then moving on to the acceptance phase and grudgingly deciding to cough up the gym-access key money, I signed up. (Beginner Yoga left me almost immobilized for four days. Clearly, this fitness thing will be a gradual endeavor.)

Add in a handful of other odds-and-ends, and getting set up to run on a "scaled down" budget cost us almost as much as a month's rent. But, er, now, we're done with the expenses, I swear ...

And I've warned the other cat that if he starts coughing or showing signs of needing a pricey vet trip, he's being auctioned off on eBay.

What 'refundable tax credit' means

2009-02-17T23:01:00.001-05:00

One provision in today's stimulus bill that's attracting lots of attention is the $8,000 refundable tax credit for first-time homebuyers who purchase in 2009. But what does "refundable" actually mean? The confusion runs deep. Since most of us are doing our taxes right about now, it seems like a good time for a rundown on the often-slippery distinction between credits and deductions.

Here, in ascending order of usefulness, are the various ways the IRS lets you adjust your tax bill:

Tax deduction: Most items you "write off" on your taxes are deductions, which reduce the amount of your income that the IRS considers taxable. The actual cash you save depends on what tax bracket you fall into. A single person with $40,000 in income would, for 2008, fall into the 25% tax bracket and owe $4,981 in federal taxes for the year (saith Bankrate's tax calculator). But add a $1,000 deduction, and the tax drops to $4,731 -- $250, or 25% of the $1,000 that's been deducted.

Most deductions require you to itemize your return -- and about two-thirds of American tax filers don't itemize. Itemizing is only worth it if your deductions will exceed the standard deduction. Unless you have a mortgage, extremely high medical bills, or other major expenses, the standard deduction is a better deal.

I didn't expect to itemize my return until we eventually had a mortgage, but I was surprised two years ago when my tax software spat out an itemized return. One of the things you can deduct is state and local taxes, and in NYC, those get whomping -- they finally overwhelmed the standard deduction David and I would otherwise take. If you do venture into Itemizationland, it pays off to start tracking deductible things like charitable contributions and unreimbursed business expenses.

Adjustments to income: A handful of deductions are available even to those who don't itemize their returns -- which is a great deal, especially for students, at whom many of these deductions are aimed. Two common ones: You can deduct tuition expenses and student loan interest (subject to income caps).

Often called "above the line" deductions, these adjustments work out mathematically just like itemized deductions. For a single filer with income of $40,000, a $1,000 income adjustment will lead to a $250 savings.

Nonrefundable tax credits: A tax credit is better than a deduction. Instead of adjusting your income, a credit adjusts your actual tax bill, dollar-for-dollar. Mostly aimed at students and low-income filers, credits are powerful weapons that can take your tax liability all the way down to $0.

One popular tax credit is the Lifetime Learning Credit, which lets you deduct 20% of your educational expenses. If you had income of $40,000, a $4,981 tax bill, and a $1,000 Lifetime Learning Credit (for $5,000 in eligible expenses), you'd get to shave $1,000 straight off your tax bill, cutting it to $3,981.

Nonrefundable credits are only useful to those who make enough to owe tax. If you had income of just $4,000 instead of $40,000, you'd have earned less than the standard deduction and you'd owe no tax. If you also had tuition expenses, you wouldn't get any extra tax benefit -- you already owe nothing, so there's no tax bill for you to deduct them from.

Refundable tax credits: If credits are "powerful" weapons, refundable credits are nukes. These rare beasties can take your tax bill below $0 -- instead of you owing the IRS, Uncle Sam owes you.

One of the most common refundable tax credits is the Earned Income Credit, which works to boost income for low-wage workers by offering tax breaks. The credit will reduce your tax bill, but if it reduces it past $0, you still get the cash.

That's why the $8,000 homebuyer credit in the economic recovery act will have such a profound effect on the tax bills of those who qualify. That single person with $40,000 in income and a $4,981 tax bill -- add in an $8,000 homebuyer credit and their tax bill drops to -$3,019, meaning there's a nice check on the way. If, like most of us, you've already made tax payments through payroll withholding or other methods, you'll get what you're owed on the credit plus a full refund of what you've already paid.

The Finance Buff has a good explanation of how refundable-versus-nonrefundable credits work, and a list of various credits and which category they fall into.

Now, having written all that up, I'll go stare forlornly at my 2009 tax filing, which has none of those nice credits and deductions I got to play with in past years. Still, since it netted me a nice refund check that arrived a few days ago, I can't whinge too much.

Phantom vesting strikes again

2009-02-14T15:49:00.003-05:00

I left my old job in December 2007. The employer had a five-year vesting schedule for its 401(k) match, and since I'd worked at the job for just under two years, I assumed I'd be walking away from the unvested 80% of my match. Annoying, but them be the rules, and it was hardly incentive enough to turn down a new job I really wanted.

I didn't get around to organizing a rollover right away, though, and when I checked my 401(k) a few months later, I found that it was 40% vested. Even though I'd left the company, the extra 20% that would have vested on my two-year anniversary in February vested right on schedule.

One of my friends had previously mentioned that when she left IBM, her 401(k) kept vesting years later. Which made me wonder if the same thing was going to happen here. I mean, clearly, it shouldn't -- I'd even confirmed with HR before I left: I go, my vesting stops, right? Of course, said the HR rep.

And yet. This month would have marked my third full year with the company, if I'd stayed. And lo, when I logged on to check my 401(k) this morning, it's now 60% vested.

If this was just me, I'd assume something had gone seriously screwy. But since this is now the second time I've heard of this happening, I'm wondering how widespread it is. Are companies just routinely forgetting to tell their 401(k) vendors about employee terminations?

On a more practical note: I left the 401(k) alone this year as an experiment, to see if this would happen. If I wanted to absolutely maximize my returns, I guess I should leave it alone another two years and see if I can get the other 40% to vest. But since what remains unvested is now less than $1k, and there's still the chance my improperly-vested portion gets yanked back when I eventually do the rollover (I assume those forms will ask me what date I left), I'd rather go ahead and consolidate my accounts now.

Next step: Figure out if I should simply roll this over to my current 401(k) or if there's advantages to doing an IRA.

The case of the disappearing In NYC points

2009-02-09T15:47:00.000-05:00

When Amex discontinued my beloved In NYC card (*insert sniffling noises here*), all the mail they sent about the switchover to their Blue card emphasized that there would be minimal disruption. Similar terms, same card number, and the seamless transfer of my balance and my accumulated rewards points.

Oops. In practise, not so much.

I procrastinated as long as I could, but at the start of January I finally activated my Blue card and retired my old card. When I got the first statement, though, I noticed something a bit odd. My rewards points balance was 0. It should have been somewhere north of 30,000, since I'd had a whole bunch of unused points lingering.

At first, I figured it was probably a transfer glitch that would work itself out. But when weeks passed with no sign of my points reappearing, I finally bit the bullet and called American Express. The customer service rep had no idea what was up, but opened a dispute.

That was on Jan. 19. On Jan. 31, I got an email from Amex saying the dispute was being investigated: "You should expect to hear from us further once this investigation has been resolved. We try to resolve investigations in less than one month, but complex cases may require additional time."

The email also came with a link to Amex's inquiry center, where I can "check the status of your inquiry and learn more about our billing disputes process at any time." Oddly, when I log on, it shows no active inquiries on my account, and no closed ones within the past 12 months.

I casually mentioned my disappearing points to another friend who had an In NYC card -- and she said hers had gone poof, too. Has this happened to anyone else? I assumed this was a glitch unique to me, but if all the In NYC points have vanished, that's worth a phone call to Amex's PR department for comment on when they'll be resolving this ...

Introducing Shopping Pr0n

2009-02-08T15:31:00.003-05:00

One day last spring, work asked if I'd be willing to do a TV interview to promote a big project publishing that week. "Sure," I said. I was (briefly) a theatre major in college, and I'd done TV stuff before on occasion; public speaking holds no fear for me.

What did strike fear into my heart? Clothes. Specifically: Television clothes. My office is relatively relaxed, and I'd long gotten along with nothing more formal than business casual, even for job interviews. I didn't own a suit. Even if I had owned a suit, TV clothes are a whole other ballgame -- certain colors don't work, patterns are problematic ...

With about 48 hours to pull something together, there was only one obvious course of action: Ping Fashionista Friend to say HELP. Fashionista Friend has, aside from her generous nature with advice, two rare and incredibly useful skills: she's good at explaining, in basic terms, what works and why - and she's been through a range of about 10 dress sizes in her life. Unlike most fashion mavens, Fashionista Friend can make suitable recommendations for anyone size 2 to 20. (Her range probably extends beyond even that, but allow me my alliteration.) Also, when you ask for fashion advice, her first question is "give me your measurements," and her second is "what's your budget?" Because unlike most glossy fashion mags, she can adapt to the idea of dropping less than $1k per outfit.

Consulted by IM, Fashionista Friend was full of invaluable recommendations - pants suit, hitting "at or just below the hip," splash of colour underneath, "conservative, but not black," and absolutely no matter what, three buttons not two. Her tips were so specific that I managed to find a workable outfit in less than an hour of shopping. (You can judge the results for yourself ...)

So I was thrilled a few weeks back to hear that Fashionista Friend was launching a blog. Shopping Pr0n covers all sorts of topics, from plus-size fashion to bargain buys to straight-up luxury splurges.

Right now, I imagine most of us are cutting our clothing budgets to the bone. My personal weakness is handbags, and I'm on a purchasing moratorium. But in this kind of climate, I find reading sites like Shopping Pr0n even more valuable, because it helps me make smarter choices with the money I do spend. Now that we're heading into the crunch days of one paycheck - David's job ends at the end of February - I'm trying to make sure that we only spend on things that are exactly what we need. Shopping Pr0n is fun for window shopping, but I'm also relying on it to help me get my work wardrobe into shape.

In which I help bridge New York's budget shortfall

2009-02-03T21:08:00.003-05:00

This is one of the simplest tax years I've had in ages: one W-2 for me, one W-2 for David, some charity deductions (we don't have a mortgage, but we pay so much in state & local taxes that we do an itemized return anyway), and that's it. I had a 1098-E form for my student loan interest, but didn't get to deduct it this time around -- I seem to have capped out on that.

The 1098-E was a bit eye-opening. It reported that I've paid $1,407 in interest on my student loans this year. Considering that I paid about $2,600 total toward my loans this year, that sounded like a hell of a lot of interest. And my loans are at reasonable rates! I have two, one consolidated at 4.7% and one fixed about a point higher. So how on earth did I end up spending more than half my payments on interest when my rates are single digits?

... and then, with the help of my trusty 12C, I finally got it. What is, or should be, blazingly apparent to anyone who pays a mortgage. A single-digit percentage of a Giant!Sum is still a Large!Sum, and interest isn't a proportion of your payments. Whoever is loaning you the cash is making sure to get their interest payments first, in full and up front, each year on the total debt. The only way to make progress paying down the principal is to a) pay extra specifically toward it each month, or b) get the total due down to a small enough figure that your monthly payments equate to a significant chunk of it.

When I finally did that depressing math, I realized it'll be years before I make any significant headway paying down my student loan debts, unless I allocate extra cash to paying them down each month. (I've always rounded up just to make the budgeting simple and paid $20 or so extra each month, specifically marked on the online payment form as "allocate toward principal, not toward next month's payment," but clearly, that $20 isn't going very far.) Kids: When your parents gripe about ever-rising tuition costs, listen to them. I did my final year of undergraduate college credits 10 years after I did the first three -- and I had to borrow twice as much to cover that final year as I had left on my loans for all of the first three. Ow.

Still, since my loan rates are reasonable, I think saving for an apartment downpayment trumps paying down extra loan debt. So, it lives on with me, for about 8.5 more years.

Also new this year: We owed New York money. Back in college (the first time, lo that decade-plus ago), I remember ending up owing New York money every year. It wasn't much, usually $50 or so, but it was still irritating. I always took 0 allowances; how did I end up owing? New York just seems rigged like that. Thinking back on recent years, I have a vague recollection that my tuition and loan debts were all that got us from the owing-money territory and into refundland.

Fortunately, the Feds owe us way more than we owe New York (that whole 0-allowances thing), so doing taxes was still a happy experience overall. Still, I grumped a bit* when I read the quote this morning in Reuters from New York budget spokesman Jeffrey Gordon that, unlike California, New York "is not 'running on fumes' and revenues are coming in every day."

As I IM'd a friend: "Yes, revenues are coming in every day, and today, $151 of them came from me!"

*(I am generally ok with paying taxes in exchange for the happy civic things my tax cash buys. David is even more so. None of his tax-and-spend liberal sentiments were harmed in the making of this post.)

The Chase!Borg begins

2009-01-25T23:09:00.000-05:00

So, Chase bought out my ex-bank, WaMu, in September. Ever since, I've been waiting to see what will happen, integration-wise.

The first shot over the bow was a friendly one. Chase tweaked the ATM networks so that WaMu cardholders can use Chase ATMs without fees and vice versa. The networks weren't really integrated -- I can't deposit checks to my WaMu account at a Chase ATM -- but still, more no-fee ATMs? Works for me.

But Chase hasn't been very forthcoming with details on whether account terms will eventually change for WaMu cardholders. When I last went bank shopping, I actively chose not to go with Chase -- they charge back-end fees for using outside ATMs, a practise I loathe. Will that start happening as Chase integrates WaMu? No clue. I can't find anything in their disclosures that gets into it. A new notice on the WaMu.com frontpage notes that the name will change soon but "free checking will remain free." That's not a tremendously reassuring notice, since "free" in Bankese has a whole lot of wiggle room.

But the integration has started in another wing of the banking empire. For about four years I've had a Providan Visa card. Some years back, WaMu bought Providian. I paid off the balance on my Providian card long ago, and now only use it as my backup at places that don't take Amex and which don't take my debit Mastercard. But keeping the Providian card alive (and paying it off each month if I run a balance) gave me access to a neat perk: free TransUnion FICO scores each month. It's not a complete credit-history picture, but it's a helpful snapshot.

As of March 9, WaMu/Providian credit cards will become Chase cards. And Chase cards will not be offering the free FICO score fun. The notice about this on WaMu's site says Chase is "evaluating ways" to offer the FICO service, but I'm not holding my breath.

The other downside of this transition: I already have a Chase card. I only have three credit cards, and the Chase is my second backup -- if anything goes awry with the Providian and I really, really need a card, I have the Chase. I don't know how Chase is planning to handle this -- do I end up with two Chase accounts?

Chase, as noted before, does not thrill me. Their sales tactics lean on the pushy side. So the end result of this may be me retiring my backup cards and only using my Amex or my debit.

A sad farewell

2009-01-01T11:30:00.003-05:00

My new Amex Blue arrived in the mail last month, but I ignored it and kept using my beloved In NYC Amex. Finally, though, I accepted that it can't be put off any longer. The Blue must be activated. So, after one final "hello to 2009" Amex swipe at my corner deli this morning, I grudgingly got online and activated my Blue.

Sigh. The membership rewards choices leave me underwhelmed -- no more Oasis gift certificates, no more fully paid Blue Water Grill brunches ... instead, it looks like the best I can do is cash in for gift certificates to Bananna Republic. Maybe we can use some of it for Amex's travel site. We shall see.

Given our new imminent-one-income-Recessionomics, I'm mostly trying to figure out how to use the points to pay for things we'd otherwise be spending cash on. Bananna Republic gift certificates might work for that ... but I'm still trying to figure out if there's any way to use points for the HP Mini 1000 I'm coveting to replace my unusably ancient laptop ...

Dusting off blog, tapping microphone ...

2008-12-08T21:59:00.001-05:00

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

2008-10-15T22:36:00.003-04:00

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

2008-10-12T00:37:00.002-04:00

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

2008-09-28T13:19:00.004-04:00

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

2008-09-25T22:56:00.002-04:00

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

2008-09-17T10:33:00.001-04:00

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

2008-09-15T22:25:00.001-04:00

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

2008-09-07T22:27:00.002-04:00

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 ...

2008-09-06T23:01:00.001-04:00

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

2008-07-24T22:13:00.000-04:00

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

2008-07-21T23:25:00.003-04:00

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

2008-07-21T22:55:00.003-04:00

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

2008-07-11T12:25:00.002-04:00

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)

2008-07-08T21:44:00.003-04:00

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

2008-07-08T21:35:00.003-04:00

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

2008-05-31T23:13:00.001-04:00

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

2008-04-10T01:21:00.003-04:00

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

2008-03-05T21:28:00.002-05:00

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

2008-02-23T17:49:00.001-05:00

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

2008-02-17T13:06:00.001-05:00

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

2008-02-13T21:51:00.003-05:00

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

2008-02-10T23:55:00.000-05:00

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

2008-02-02T16:41:00.002-05:00

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

2008-01-22T22:18:00.000-05:00

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

2008-01-22T00:23:00.000-05:00

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

2008-01-01T16:29:00.000-05:00

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!

The end of my HSA

2007-12-31T17:51:00.000-05:00

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

2007-11-21T14:47:00.000-05:00

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

2007-11-19T17:10:00.000-05:00

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

2007-11-06T16:02:00.000-05:00

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

2007-10-15T17:05:00.000-04:00

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

2007-09-28T22:21:00.000-04:00

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

2007-09-24T12:31:00.000-04:00

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

2007-09-14T17:01:00.000-04:00

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

2007-08-21T18:40:00.000-04:00

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

2007-08-09T18:01:00.000-04:00

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

2007-07-30T21:30:00.000-04:00

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

2007-07-23T23:38:00.000-04:00

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

2007-07-18T13:52:00.000-04:00

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

2007-07-07T18:43:00.000-04:00

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

2007-07-05T17:01:00.001-04:00

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

2007-06-18T11:14:00.000-04:00

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

2007-06-13T23:00:00.000-04:00

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

2007-06-08T15:42:00.000-04:00

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!

2007-05-31T11:44:00.000-04:00

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

2007-05-27T18:20:00.000-04:00

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

2007-05-22T15:38:00.000-04:00

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?

2007-05-18T15:08:00.000-04:00

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.)