Saturday, December 12, 2009

Chase's incredibly sleazy WaMu bait-and-switch

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

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.

Wednesday, December 02, 2009

Must be love

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?"

Saturday, November 07, 2009

Silicon bonanza

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.

Tuesday, September 29, 2009

Paychecks -- YAY!

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.)

Monday, August 24, 2009

My story of medial rationing

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.

Tuesday, August 18, 2009

Financial shocks

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.

Tuesday, August 11, 2009

My next career move: Professional gambler

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.

Friday, July 17, 2009

*Crash* *bang* $40

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.

Tuesday, July 14, 2009

Pay your bill, lose your credit line

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.

Saturday, July 11, 2009

Travels with Frugal Ferret

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.)

Saturday, June 20, 2009

My first foray into ETFs

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.'

Sunday, June 14, 2009

Tackling the IRA

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 ...

Friday, June 12, 2009

Leaps of faith

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.

Wednesday, June 10, 2009

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

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?

Wednesday, May 27, 2009

Consumer lifehacking

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.

Monday, May 25, 2009

Braving the mattress sales

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 ...

Friday, May 08, 2009

The cost of a broken heart: $1,071.50

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.

Saturday, May 02, 2009

Shining light on financial monsters

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")

Monday, April 27, 2009

Value my social graph

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 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.

Tuesday, April 21, 2009

My own personal M&A frenzy

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.

Tuesday, April 07, 2009

The insidious disenfranchisement of the local pharmacy

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?

Monday, March 30, 2009

Being frugal is expensive

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.

Tuesday, February 17, 2009

What 'refundable tax credit' means

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.

Saturday, February 14, 2009

Phantom vesting strikes again

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.

Monday, February 09, 2009

The case of the disappearing In NYC points

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 ...

Sunday, February 08, 2009

Introducing Shopping Pr0n

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.

Tuesday, February 03, 2009

In which I help bridge New York's budget shortfall

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.)