*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.

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.)

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")

Oh the irony

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

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

Green shopping bags

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

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

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

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

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

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

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

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

A rant about usurious long-distance pricing

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

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

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

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

$3.77/minute.

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

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

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

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

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

B&B goes to BB&B

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

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

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

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

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

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

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

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

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

Today's GRR award winner: JetBlue

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

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

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

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

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

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

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

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

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

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

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

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

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

The personal finance writer who irritates me the most

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

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

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

Instead I found myself gritting my teeth. Constantly.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Food spending, from $21 a week on up

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

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

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

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

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

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

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

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

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

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

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

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

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

Equipping your kitchen from scratch for $200

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

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

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

Stalking the wild NetBank ATM

I'm traveling this week -- Seattle for fun, Santa Clara for work -- which means blogging will probably be light. But I just had a wacky personal-finance moment. I'm at the Santa Clara Convention Center (for EclipseCon) and stopped at one of the convention center ATMs to snag cash. While it was processing, it flashed a commercial. For NetBank. *Blink.* I'm used to thinking of my bank as this semi-obscure thing. My first thought was that running my NetBank card somehow triggered a NetBank ad, but then I noticed the ATM was NetBank-branded. I've never seen a NetBank ATM in the wild! As mentioned before, I'm used to sucking it up and paying ATM fees (on the front-end only, not the back) whenever I withdraw cash.

Yes yes, I realise this is a financially unwise move, but I really like my bank, and for a long stretch it just didn't have any in-network ATMs in NYC. It was "pay the fees or switch banks." Plus, I'm lazy, and relatively willing to pay the fees for the convenience of going to the very nearest ATM (rather than hunting for one associated with my bank) when I need cash. I think the fees should be a hell of a lot less, but that's a whole other blogpost.

But this NetBank ATM prompted me to go take a look and see where others might be hiding. It seems my little bank got big when I wasn't paying attention -- their website claims they operate the second-largest ATM network in the U.S. They even appear to have a few near-ish my office in Manhattan now! Who knew?

It was a slightly surreal feeling getting money out of the ATM ... and not paying a surcharge. ($2, on this ATM. Bad NetBank! Stop price gouging!) Now I want to go play with the free ATM again and again. It's like my own little slot machine.

The TurboTax vs TaxACT decision

Our last W-2 finally arrived yesterday, so I plunged right into doing the taxes. Much banging around online turned up no good reviews of the online tax software, grrr. I didn't even find many current reviews of the boxed versions, which surprised me. Isn't this a gimmie for every personal-finance beat writer at any publication of size? PC magazine had one of the only comprehensive bake-offs I could find.

I usually go with TaxACT, but I swore to look elsewhere after running into some minor hassles last year. One look at the prices of "elsewhere" nearly sent me running back. My Amex offered me a 25% discount on the federal-return cost with TurboTax ... but the savings that translates to is actually pretty small, especially since the more-expensive state return isn't discounted. Even with the discount, the total cost for TurboTax online for me will be about $48 -- versus $16 for TaxACT. Ow.

Still .... TaxACT was annoying me, and I'd never tried anything else. The reviewers all swear by TurboTax. Solely for the experience of taking the Cadillac out for a test drive, I decided to shell out and try it. (And hey, blog fodder.)

The interface was indeed a little smoother -- but I'm not sure the end result was any different. I didn't turn up any exciting new deductions I wouldn't have otherwise known about. Plus, TurboTax still had one of the more annoying features that irked me with TaxACT: if you need to go back and revisit something out of order, it's easy to get lost. While working on my state return, I clicked back to the federal return to check out a previously entered amount. That lost my place in the state return workflow, and I couldn't get back -- I had to click through all the fields I'd already entered, costing me an extra 20 minutes of work. Grr.

So, next year, I'll probably save the money and return to TaxACT.

For those allergic to paying full price for tax software, various deals abound. TurboTax has a 15% off deal to anyone paying with a Visa, Amex, MasterCard or Discover. Your financial services providers may have their own deals. My friend Fahmi reports that Fidelity offers TurboTax free to its customers, and PC World is making TaxACT free to subscribers. State Farm also offers TurboTax free for customers.

Meanwhile, if you have an adjusted gross income of $52,000 or less, you qualify for FreeFile -- a program 70 percent of taxpayers are supposedly eligible for. FreeFile deals have all kinds of odd qualification standards, but the IRS helpfully offers a wizard to guide you to an eligible program.

More from the tax trenches tomorrow ....

The real costs of minimum wage

Here in personal finance blogland, we tend to be consumed with optimizing investment strategies, big goals -- "save a million dollars"; "retire early"; or even simply "buy a house" -- and batches of financial exotica. Want to know about CD APYs? There's a whole blog devoted to it.

This is a good thing. Fiscal responsibility is good; fiscal education and control are very, very good. Money should be demystified so that people have the tools and information they need to decide how best to spend their paychecks.

But first, they need to have paychecks with enough money in them to actually spend.

Congress is in the midst of a much-publicized push to increase the minimum wage to $7.25 an hour. A number of publications are looking at how this will affect people earning the minimum. One of the best I've seen is the Washington Post's "Life at $7.25 an Hour," which deftly examines the local economy in Atchison, Kansas, through the eyes of the town's residents. At $7.25 an hour, you're not thinking about 401ks, CDs, real estate investment or money-market savings accounts. You're thinking about how to feed three people for two weeks on $70.

In New York, the minimum wage isn't anything close to a living wage. New York magazine's annual money issue (typical story tagline: "Sometimes being a billionaire can just be so complicated.") included a great piece this year on a security guard making $10 an hour. He does all the things you're "supposed" to do -- works hard, is reliable, supports his kids -- but none of that changes the cold fact that to live in New York with a biweekly paycheck of $676, you're going to make a lot of miserable compromises.

A few years ago I read Barbara Ehrenreich's Nickel and Dimed, and wrote up some thoughts in my booklog. The biggest thing that struck me is that what low-wage workers sacrifice aren't "luxuries," but basics, like health and privacy.

I don't have answers for any of this. Income disparity, and setting an income floor, is among the most daunting public policy issues out there.

But I try to always remember how incredibly lucky I am to have a salary that affords me the choices I have. I don't think I could manage with any kind of grace the life an overwhelming number of low-earning Americans have too few opportunities to escape.

My annual wrangle with Time Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

Exceptional customer service is our number one priority.

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

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

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

Rebuff the upselling, score perks anyway

I'm in Vegas this week for a software conference, and my company kindly shelled out for me to stay in style at the conference hotel, the
Venetian. (Motto: "More gilt per inch than Trump's most lurid imagined fantasyland!") When I checked in, the clerk promptly asked if I'd like to upgrade to a larger room. Larger!? Ha ha, no. The basic room is already bigger than my first NYC apartment. Next question: Would I like to upgrade to a room with a view of the Strip? Again, no.

Turns out the only rooms available at the moment all had Strip views -- so I got for free the "upgrade" I'd just declined to pay for. Rental car companies pull this scam all the time. I always book economy cars. (I'm short; I don't need legroom.) Inevitably, the first thing I'm asked when I arrive is "would you like to upgrade to a full-size?" Trick is, many car companies don't even bother actually stocking economy cars any more. More than half the time, when I turn down the full-size upgrade, I get a full-size car anyway for the economy price.

Insurance is another area where rental-car companies famously try to slip in lucrative, unnecessary add-ons. If you have your own auto insurance, you're generally covered for anything that happens with a rental car. If you don't have personal insurance, you still likely have some coverage on your credit card -- many offer policies that cover loss and damage, as my Amex does.

But here's something particularly insidious I hadn't known about before. Two weeks ago, I rented a car from Hertz for a quick day trip to Long Island. While filling out the forms, I noticed a small sign on the counter (very small) mentioning something legalistic about Hertz's optional CDW (collision damage waiver) covering damage beyond the insurance level mandated in NY. Googling turns up the info that New York requires rental car companies to cover collision damage on all rentals -- making Hertz's add-on CDW coverage in NYC even more ridiculous than usual.

Because the best price point is free

Another in my very infrequent frugality series: Microsoft is giving away completely free USB thumb drives. (Offer good in the U.S. only. Sorry, international readers!) Loaded with Microsoft propaganda, of course. Since they can be pretty useful devices, I figured I'd pass it along. My sister was quite astounded this weekend when I introduced her to her first flash drive, which we used to transfer MP3s between computers. (I was impressed -- her circa-1999 iMac had no problem with the drive and required no drivers.) Thumb drives seem to be the tech tchotchke of choice these days; I tend to get piles of them in press kits. Still, it's nice to have an alternative to small-capacity-and-breakable floppy disks!

(The answers to Microsoft's questions are '2' and true to all the rest.)

Frozen assets

Over the weekend, my sister and I were talking about financial matters. She said she'd come up with a way to control credit-card impulse spending: she froze her card.

I assumed she meant she'd had the issuer halt new purchases. No. She literally froze the card.



"When I want to buy something, I have to spend a few hours thawing the card," she said happily. "And then I usually decide it isn't worth it."

I think we should pass a bill requiring Congress to give this a try, as a deficit-reduction measure. And then pass another bill authorizing the construction of a really, really big freezer. I'm thinking we could repurpose West Virgina for the cause.

Tax bites

Miscellaneous tidbits ...

-I haven't filed a 1040EZ in years -- out joint income has usually been above the cap. This year, the cap is lifted to $100,000, which will put a lot more people into EZ eligibility. However, there are good reasons in some situations to go the more complex route. This Bankrate.com article does a nice job explaining the different 1040 options.

-The tuition deduction I mentioned yesterday is an adjustment to income. You can claim it even if you don't itemize your return (which I don't).

-I'm getting very fond of Bankrate.com. It has a nifty article laying out other income-adjustment deductions available to those who don't itemize. Traditional IRA contributions, student loan interest, money spent by educators on classroom supplies, and moving expenses are among the items you can use to adjust your income downward -- which, as I found out, can dramatically affect your tax bill. The Bankrate article is two years old, but the IRS's website has an index of explanatory documents on various income adjustments.

-My friend Fahmi points out that anyone with a brokerage or other financial services account should check out what deals are available through their provider for tax-prep services. Fidelity offers TurboTax discounts; I'm sure other firms have similar deals. For those who really, really don't want to pay for prep software, H&R Block's TaxCut will let you do both your state and federal return free if you take your refund on a prepaid Visa card. (If that link doesn't show the offer, go in through the IRS's FreeFile site. It's a semi-hidden/limited offer.)

-Note for freelancers: Companies are required to send 1099 forms to any contractor they've paid more than $600. The deadline for sending those out is Jan. 31, so watch your mailbox.

-I think this is my last year with TaxAct. The interface is pretty clunky and buggy -- with Firefox 1.5, using TaxAct's 'back' button to rewind to the previous screen consistently brought up a screen full of blank data fields. After a few minor heart attacks thinking I'd lost all my entered data, I caught on that it's actually a display bug: If you go back, then forward, you see the data. Weird. More annoyingly, when I tried to research questions about the tuition credit (like 'can I deduct tuition fees I'm paying with loans?'), the built-in question system generally had little to offer. Thankfully, a few minutes with Google and the IRS's website answered all my questions.

So, TurboTax/TaxCut users -- how do you like your interfaces?