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.

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.

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.

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 ...

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.

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.)

The Chase!Borg begins

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

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

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

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

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

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

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

A sad farewell

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

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

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

Dusting off blog, tapping microphone ...

Hi all. Anyone still here?

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

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

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

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

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

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

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

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

Global economies always have silver linings

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

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

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

Apocalypse now

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

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

It reminded me of two things.

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

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

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

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

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

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

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

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

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

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

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

Life after your bank fails

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

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

Greetings, JPMorgan Chase overlords

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

Avoiding a run on the bank

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I (heart heart heart) Amex

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

I'm a klutz.

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

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

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

@^&@%^$#%$#

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

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

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

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

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

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

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

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

Wow.

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

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

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

Journalism, red in tooth and claw ...

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

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

Dec 2007: I take a new job.

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

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

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

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

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

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

Introducing PocketMint

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

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

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

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

Thin envelopes, part II

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

American Express is discontinuing my credit card.

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

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

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

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

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

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

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

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

Why I'm never opening my mailbox* again

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

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

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

Sure enough, my envelopes were lurking.

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

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

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

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

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

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

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


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

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

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

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

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

Oops/ha ha ha.

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

Um, ok.

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

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

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

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

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