1. Surprise: TBTF Banks Will Screw You

    Way back in 2007, I penned a post in which I voiced my displeasure with folks who whine about overdraft fees. In the comments, I was called lots of names … “bank apologist” among the nicest of these.

    Thanks to the fine, upstanding management team at Bank of America, I now have the opportunity to make something crystal clear: The Too Big To Fail Banks (TBTF) banks will screw you any chance they get. This is not a new opinion for me; I’ve felt this way since long before I started this here money blog. I’m just reiterating it here, for those who aren’t paying attention.

    I absolutely felt this way when I wrote the overdraft-whiners post, too. The way I see it, the fact that these banks will hose you at every opportunity is a given. Thus, we as consumers and bank-users must do everything we can to NOT give them that opportunity. That includes knowing how much is in your checking account at any given time, and not executing transactions above that amount, and not giving the bank any reason at all to slap you with a $50 service fee. If you DO give the bank a reason to FeeSmack™ you, then don’t whine about it.

    It’s plain as day: The TBTF banks are in charge. Our government and our economic system require this, because debt is money, and debt underpins EVERYTHING. TBTF banks hold, service, issue, and securitize debt in enormous amounts, so they make the rules. You and I simply have to play by those rules.

    Now allow me, if you will, the opportunity to show just how far TBTF banks (Bank of America, in this case) will go to (1) bend their customers over a counter, and (2) make a buck:

    JDSupra Law News: BOA Senior Admits to Being Told to Lie

    If you have dealings not only with Bank of America, but with pretty much any bank that’s “regional or larger” in size, you really should take a moment to read the article. I’d say that Simone Gordan’s affidavit is a staggering admission, but really, it isn’t. Of course BOA reps were told to lie to customers. BOA was woefully unprepared for the various mortgage- and loan-modification programs which U.S. FedGov thrust upon them, and besides, by lying to customers, there was cash to be made.

    From the affidavit, as stated by Bank of America senior loan collector Gordan:

    Using the Bank of America computer systems I saw that hundreds of customers had made their required trial payments, sent the documents requested of them, but had not received permanent modifications. I also saw records showing that Bank of America employees have told people that documents had not been received when, in fact, the computer system showed that Bank of America had received the documents. This was consistent with the instructions my colleagues and I were given. We were told to lie to customers and claim that Bank of America had not received documents it had requested, and that it had not received trial payments (when in fact it had). We were told that admitting that the bank received documents would “open a can of worms” since the bank was required to underwrite a loan modification within 30 days of receiving those documents and it did not have sufficient underwriting staff to complete the underwriting in that time…. Site leaders regularly told us that the more we delayed the HAMP modification process, the more fees Bank of America would collect.

    Nice, huh? If you or I tried crap like this in our business dealings, we’d go to jail. But a TBTF bank does it, and they get paid.

    Are we clear on how this works yet?

    You must carry on your financial lives as if you are, well, prey.

    Because with TBTF banks, that is absolutely what you are.




     

     

  2. Darn Those Student Loans, Anyway

    If ever you wanted to know just how deep is the belief in consumption and big-ticket buying in this country, you need look no further:

    USA Today: Student Loan Loads Block Home, Car Purchases

    Amidst all the hand-ringing and “Someone must help our debt-ridden children be able to get more debt!” chants, you’ll run into this laser-sharp social commentary … emphasis mine:

    One interesting fact: The high cost of student debt is stopping many young consumers from buying big items, such as new cars, homes and furniture.

    Nearly 30,000 Americans commented to the federal consumer watchdog agency on the student debt issue, and many discussed day-to-day struggles.

    One borrower, Debra, told the CFPB, “I can’t buy a house because of my student loan. I have to rent.” Another borrower, Daria, said: “These loans are stunting my growth as a citizen. No car. No home.”

    Oh, the misery, the suffering, the ANGST these poor young souls must endure! They can’t go out and be Good Little Consumers straight out of college! All because of those big mean nasty student loans which they were forced to take on!

    (And, I might add, over a year later, yet again media voices are lamenting how student loans are keeping a lid on house prices.)




     

     

  3. And Now For An Important Message

    No, not really. I got nuthin’.




     

     

  4. Employers Turn Small Loans Into Savings

    Now here’s a PBS video which I think illustrates at once a horrific concept, and a fabulous one:

    PBS: Savings and Loans: Employer Plans Encourage Saving (~12 minutes)

    What’s horrific? People borrowing money from their employers. Now, if your employer’s a bank, then hey, fine, whatever; it’s what they do. When all hell blows up on them, taxpayers pick up the tab, and no one much gives a crap after a year or so. (Especially if the stock market is tagging record highs.)

    Outside of that, if your employer isn’t a bank or similar, then they shouldn’t be in the business of making loans. Just my opinion. That’s what banks, credit unions, pawn shops, check-advancers, and your neighborhood loan shark are for. Though of course it’s the employers’ money, and they can do with it what they want. (In the video, the employer is more “facilitating” the loans than they are “making” them. The loans are actually made by local credit unions, with interest rates in the 17 percent range.)

    In my modest personal experience, watching how these sorts of employer-as-lender policies are treated in workplaces, I’ve found that even when these loans turn out well, they tend to be used by the same folks again, and again, and again. Maybe I’m wrong, but I don’t think that’s the goal.

    The Part I Applaud

    In the video, we’re told that the employers in question made an interesting policy tweak: Loan payments are withheld directly from employees’ paychecks over time, and once the loans are paid back, the default option is for employees to continue having those same amounts withheld, but deposited into savings accounts so that they begin building savings. Employees can opt out of this “forced” Baby Step #1, of course, but most (we’re told) do not.

    This part of the plan, I adore.

    By the time the loan is paid back, I’d imagine that you as employee would have at least a decent chance of realizing that you really COULD live without that small chunk of your paycheck. It wasn’t so hard, was it? Lo and behold, the saving you thought you could NEVER EVER do turns out to be achievable — cold, hard cash in a bank account. When the next little emergency pops up, perhaps you’ve got it covered.

    (Though I’d argue that the peace of mind savings provides is probably worth as much as the actual money itself. And the less someone has experienced actual “saving,” the more important that peace of mind is.)

    Given the context that’s presented in the PBS video, I might be willing to revisit my “Employers shouldn’t be making loans” stance. I could see where both parties really could benefit from such an arrangement.




     

     

  5. We Learn Nothing

    Yes, it’s a current article:

    Herald Tribune: Admin Aims to Increase Loans for Homes

    From the story:

    President Barack Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

    In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

    I should probably just stop reading the news altogether. Everything I read just about sends me over the edge these days.

    We (deliberately) learn nothing.




     

     

  6. Get More Retirement Savings, Cuz Congress Wants It

    Couple of saving-related news stories which hit my inbox this afternoon:

    EBRI: 2013 Retirement Confidence Survey Results

    EBRI’s 2013 survey tells us that half of workers reported having $25k or less in total savings and investments (not counting home equity and any defined-benefit plans). Twenty-eight percent have less than $1,000.

    FA Mag: Congress May Act to Stem Outflows from 401k Plans

    That’s right, America: Not only do you not have jack squat in your retirement plan accounts, but what you do have, isn’t really yours, and won’t be until Congress says it’s okay for you to have it.

    Carry on.




     

     

  7. Money Duality: Using Quicken and YNAB 4

    Back in February, I began making myself do twice as much work when it comes to managing our money.

    Why would I do this?

    In short: Because, even after eleven updates, Quicken 2013 is an unmitigated disaster.

    Quicken: Can I Get Along Without It?

    Quicken 2013 has now gone through eleven updates, and it’s still craptastic. My beloved “What’s Left” report …

    In / Out / What's Left

    … doesn’t register certain savings transfers once they’re entered. (As long as they’re just scheduled transactions, they show up fine). It doesn’t count “Employer Contributions to 401k” as income, but does count them as outflows when they’re transferred to my 401k account. Say what?

    And though it’s been revamped, Quicken 2013’s budgeting feature is still useless: I literally cannot determine where I stand for the current month as regards “Actual” spending, as it doesn’t tally any of my income at all in its bottom-line numbers.

    Sure, the register and account views of Quicken are still good. But otherwise, this is Total. Software. Fail.

    I went so far as to start an entirely new Quicken datafile, too, to see if that cleared up any of the issues. The answer? It cleared up one big issue, which was having Scheduled Transactions vanish once I set them to enter into my account registers. (I used the clean datafile throughout the month of February, and no transactions disappeared during that time, or during my first March bill-paying session.)

    At this point, I’d reasonably say that I’m as frustrated with Quicken 2013 as I’ve ever been, with any software.

    However, after using Quicken for so many years, the question of “Can I get along without it?” isn’t an easy one to answer. I always said that if I ever decided to dump Quicken, it’d be for YNAB. This hasn’t changed now that YNAB 4 is out; my YNAB 4 review is absolutely glowing. It is a fantastic piece of software.

    But for tracking all sorts of accounts, from retirement to stock-trading to just plain asset-value accounts, YNAB 4 isn’t Quicken. And Quicken’s reporting abilities are second to none.

    Can I get along without those things? I don’t know.

    But I am going to use both programs for a while, and see how it goes.

    Doing It All Twice

    There’s no doubt about it: Doing everything twice is a pain in the butt. February proved that to me.

    Since I enter all transactions by hand — no bank downloads for me! — and reconcile all accounts when statements arrive, doing all our monthly money-work twice is no small task.

    I have lots of accounts which I track in Quicken for net-worth purposes, but didn’t add to YNAB. I like to see my accounts segregated into more than two groups; YNAB has only “Budget Accounts” and “Off-Budget Accounts,” whereas Quicken allows for “Banking,” “Investment,” “Property & Debt,” and “Separate” groupings.

    Thus, precise net-worth tracking in YNAB 4 is a non-starter. But that’s not really what it was built to do. It was built for budgeting supremacy …

    … and it delivers that in spades.

    And since Quicken’s “What’s Left” report — which I depended upon for budgeting purposes — is now blown to heck, I shall have to rely on YNAB for cash-flow planning.

    When used for that task, YNAB is a true joy to behold.

    At some point, I’ll have to decide what I’m willing to give up: vast account-tracking abilities (Quicken), or heavenly cash-flow planning (YNAB).

    Because I don’t think I can keep doing twice the work forever.




     

     

  8. Half Living Paycheck to Paycheck

    Fresh new survey data from Allstate’s “Life Tracks” unit suggests that about half of Americans have nothing left over after paying for essentials:

    Allstate: Americans Struggle to Save Despite Optimism

    I find it interesting that this “half of us live paycheck-to-paycheck” stat keeps reappearing in survey after survey in recent years. I’m thinking the figures are pretty valid, at this point.

    In the Allstate survey, conducted in December of 2012, 32 percent of college grads reported living paycheck-to-paycheck, while 48 percent of non-graduates reported the same.

    For those curious about credit-card debt, there were some interesting nuggets in that arena, too. From the article:

    • Forty-nine percent say they pay credit card debt; 43 percent mortgage payments; 36 percent car payments; 17 percent student loan payments; and 15 percent medical debts.
    • Among the half (51 percent) of Americans expecting a tax return, 45 percent intend to pay off debt with the money.
    • Sixty-five percent of Americans with credit card debt say their level of debt has increased or remained the same in the past year.
    • While a majority say their savings remains about the same (about 60 percent) in the past year, just 15 percent of Americans say their short-term emergency savings has increased, and 14 percent say their long-term savings and investment activity has increased.

    The fact that 65 percent said their debt levels have stayed the same or increased in the last year isn’t a surprise, given that 40 percent of respondents were “very confident about their ability to pay for a new car.” (That was in the survey, too.)

    What’s implied, of course, is that they’re confident in their ability to borrow for a new car.

    Debt, after all, makes the world go ’round.




     

     

  9. K-Cups: Best Prices Update

    Another year (plus) has passed since I last completed my survey of best prices on K-Cups. I had a little bit of free time this weekend, so I took up a bit of price-shopping and research. Scroll down a bit for the results.

    K-Cup Pricing: Some Boundaries

    When it comes to my K-Cup pricing surveys, I try to stick with retailers who are widely-known and very accessible. I don’t consider the impact of sales tax on pricing, since if you’re buying online, you ought to be paying your state’s use tax on those purchases since sales tax often isn’t collected.

    I omitted Sam’s Club from previous years’ lists because their selection has typically been very limited. This year, however, they’re in, since my local Sam’s Club had three varieties in stock when I visited. (One of which — Green Mountain’s Breakfast Blend — I happen to really enjoy. And yes, at $.50/cup, I picked up a box, as it represented a better price than the Green Mountain Cafe Express club pricing I usually get.)

    I include coupon prices for Bed Bath & Beyond because once you get on their mailing list, your mailbox will be perpetually stuffed with BBBY coupons.

    Lots of smaller online stores carry K-Cups, but of the ones I’ve seen, their per-cup prices become significantly higher than those below once shipping charges are tacked on. If one could find a free-shipping offer or two, and a desired flavor came on sale … well, who knows. Perhaps deals could be had, in that case.

    Best K-Cup Prices

    I was surprised to find that pricing hasn’t changed much, if at all, from the 2011 edition. Notably, Target’s prices for K-Cups have dropped by $1/box.

    I don’t drink Starbucks K-Cups, but I think their prices have risen. Where I could find them, Starbucks K-Cups boxes were smaller in count (16 K-Cups vs. 18 K-Cups for most others), and roughly $2 more per box ($12.98 to $14.98, depending on retailer) than other varieties.

    1. Sam’s Club $.4998/K-Cup
    2. Bed Bath & Beyond (w/Coupon for $5 Off of $15 or More) $.5272/K-Cup
    3. Bed Bath & Beyond (w/Coupon for 20% Off One Item) $.5329/K-Cup
    4. Green Mountain (w/Café Express Membership) $.5621/K-Cup
    5. Amazon.com (w/Prime and Subscribe & Save) (50ct.) $.5698/K-Cup
    6. Wal-Mart (Most Varieties / 18ct.) $.6100/K-Cup
    7. Target (Most Varieties / 18ct.) $.6106/K-Cup
    8. Amazon.com (w/Prime) (Most Varieties / 24ct.) $.6379/K-Cup
    9. Amazon.com (w/Super Saver Shipping) (Most Varieties / 24ct.) $.6379/K-Cup
    10. Bed Bath & Beyond (No Coupons) (Most Varieties / 18ct.) $.6661/K-Cup

    For the curious, the spreadsheet with the underlying data is available here.




     

     

  10. Quicken 2013: It Isn’t Good.

    I’m now about one month into my foray with Quicken 2013 Deluxe (upgraded from Quicken 2010 Deluxe), and the results are …uh … less than optimal.

    In other words, this program is a mess.

    In addition to the cash-flow-tracking problems mentioned earlier, I’m now having Recurring Bills VANISH ALTOGETHER when I click to enter them. My monthly cable bill, for example, when I clicked its ENTER button in the “Bills” tab … well, not only did it not appear in my register, it disappeared entirely from the bill list, too.

    Not good. Not good at all.

    I’ve spent years using Quicken, and generally defending it against detractors, but this is not acceptable. I’ve never once utilized Quicken’s transaction-download features, simply because of all the horror stories (former) Quicken users told, and in my mind I just blew these problems off. Entering all transactions by hand? No biggie. It’s what I’ve always done anyway.

    But to have a feature so basic as Recurring Bills blow up like this? On a Quicken release that’s been through 10 updates already? All while the folks at Intuit can’t come out with more crap features fast enough every year?

    Totally. Not. Acceptable.

    My Quicken use dates back to the mid-1990s, 3.5″ disk days.

    At this point, my continued support of Quicken is tenuous. At best.

    YNAB 4 is looking better and better.