Why? Why can’t any of the best-laid plans EVER go right, just once?
To cover my various expenses and bills while I was employed, I set up three “cookie jar” bank accounts, one to pool all incoming revenues, one for electronic fund transfers and the few checks to workmen I write, and one to hold my monthly credit-card budget. Paychecks came into the one for electronic fund transfers; a flat amount went out of that into the “pool,” and from there amounts needed for EFTs (utility and insurance payments), checks, and credit-card bills were disbursed to their respective cookie jars.
Complicated? You bet. But it worked.
The middle of last month, I went in to the credit union branch on the Main campus and sat down with one of the account managers to cancel those transfers, since incoming revenues will no longer cover those transfers and since I intend to simplify my banking by eliminating all these cookie jars and paying all bills out of the original EFT checking account. I swear to God, I watched her cancel those things! She confirmed it by showing me on her computer screen where all the scheduled transactions were CANCELED. No more. Dead transactions. Stiff parrots, one and all!
One of these transfers was triggered by the arrival of my ASU paycheck. However, the credit union can make only two such transactions in a month; in the two months of each year that PeopleSoft issued its bogus “extra” paycheck generated by ripping us off with bimonthly pay periods, I had to make the third transfer from the EFT account into the Pool account manually.
My last paycheck from GDU indeed arrived on one of those “extra” paydays. So, even if I hadn’t canceled the transfers, no transfer should have occurred when that check hit my account.
Moving forward with the simplification agenda, on December 31, after confirming that all my outgoing transactions had cleared, I moved all of the funds remaining in Pool and Credit Card Budget over to the EFT checking, planning to close the latter two accounts and two others, leaving only three accounts to have to reconcile each month (EFT, Tax & Insurance Savings, Emergency Savings). It seemed safe to do that, since no more automatic transfers would happen.
Wrong.
Early this morning, after I’d just turned out of bed and before even stumbling into the kitchen to brew a pot of coffee, I happened to look at my online account. God damn it!
They’d transferred $1522 out of the incoming account into Pool, $840 back to EFT, and $682.18, the entire amount remaining in Pool, to Money Market Checking. Meanwhile, despite American Express’s announcement that it received this month’s payment, the check I wrote to AMEX last week still hasn’t cleared. Fortunately, Money Market Checking has plenty to cover it, and fortunately, because I’ve been living below my means for these past many years, I had transferred $20,000 from all those cookie jars into that main “Pool” checking account, preparatory to sending most of it off to Stellar for investment. So the $1522 transfer barely dented that.
But because there are so many other automatic transfers scheduled (all of which should have been canceled) into so many other accounts, I had to sift through eight accounts to determine that these were the only three fuck-ups and no overdraft fees had been incurred. It took two hours to do that, to enter the errors and their fixes into Quicken, and to e-mail the credit union explaining what happened, what was supposed to happen, and what they need to do to fix it.
It’s now 11:30. I haven’t had breakfast. The dog hasn’t been fed. I haven’t written the post that I sat down to write in the first place. The newspaper is still sitting in the driveway (assuming no one has stolen it yet). I have a migraine that remains to be treated with a large dose of caffeine. Half my day is gone, after I’d intended to prune the roses (a half-day job) and write my 102 syllabi (another half-day job).
Wasting my time fixing someone else’s screw-ups seems to be the eternal story of my life. A friend in banking once remarked that mediocrity is the standard of the business world. She wasn’t kidding.
In another two weeks, I’m jumping Intuit’s ship, diving off the side of the SS Quicken into the cool waters of Excel.
Over the past five years as a program administrator, I’ve learned just enough about how Excel works to set up a spreadsheet to operate as a checkbook. Using very basic skills (indeed), I’ve figured out not only how to create a running balance but also how to make Excel reconcile a checkbook against a bank statement. None of this is rocket science. What’s new is realizing I can make a generic program like Excel or its open-source equivalents do all I need Quicken to do.
Because I don’t use Quicken for online banking, my needs for the program are pretty plain-vanilla: keep track of expenses and income, categorize them, create an annual tax report, and reconcile bank accounts. Quicken’s various planning calculators, especially the ones related to loans, come in handy, but similar calculators are all over the Internet.
Nor do I use Turbotax, Intuit’s companion to Quicken, billed as the answer to all your income-tax reporting problems.
Why, you ask, do I eschew Quicken’s whiz-bang online features? Simple: I don’t trust Intuit, a corporation that issues ever-more-bloated versions of its program each year and then forces consumers to buy them by jimmying the code to render data entered in “older” programs unreadable. I can’t say how much I resent that. Also, customer service is nonexistent. It’s a consumer-unfriendly product manufactured by a consumer-unfriendly corporation. There is no way I’m going to put my personal data online through that outfit’s tentacles.
I do my online banking directly with the credit union, thank you. Every financial institution that does business with me makes online transactions and statements readily available. All I need to do that is a reasonably secure browser, say…Firefox running on a Mac, for example.
My taxes are so complicated, there is no chance on God’s green earth I could do them myself, nor would I trust Turbotax to stuff all my square pegs into its round holes. Income has, over the years, derived from salary, contract work, limited partnerships, securities investments, nontaxable bonds, mutual funds, a 403(b), an annuity, a whole life policy, alimony, Social Security, unemployment insurance, sales of real estate, a C-corporation, a sole proprietorship, an S-corporation…it goes on and on. A vast array of laws and loopholes applies to these things, none of them even faintly comprehensible to the amateur.
It’s also very frustrating that Quicken data will convert from PC format to Mac format, but not back. This means that when the day comes that I no longer can afford Macintosh computers—and that day arrived on Tuesday, after I bought the MacBook—to continue using Quicken I will have to start completely anew, losing all historical data. Excel operates smoothly on both platforms, and so I can move between the PC and the Mac with no problem.
After Canning Day, my banking strategy will be much simplified. Instead of disbursing paychecks into various piggybanks (one to cover the monthly credit-card bills; one to “escrow” the annual property tax, homeowner’s insurance, and car insurance; one for monthly savings; one for monthly nondiscretionary bills; one to pool all income; one for the S-corporation; a joint checking account with M’hijito to handle the mortgage payments…and so on ad infinitum), all incoming money will go into one checking account, which will have a $10,000 cushion to back up the poverty-level wages I’ll be making. Most expenses will be paid from this account. The self-escrow account will stay in business, since the only way I can be sure to have enough to cover those breathtaking bills is to set aside $325 a month, every month. I will try to set something aside each month in a savings account to cover budget overruns and buy occasional indulgences like clothing. And of course the joint checking account will have to stay.
That will cut the number of credit-union accounts from eleven to four, not counting the redundant savings accounts, which sit dormant and so really don’t need to be reconciled anyway.
Further simplifying matters is the S-corporation itself. When The Copyeditor’s Desk was a sole proprietorship, I ran business income and expenses through my personal checking and credit-card accounts. This meant I had to run a category report for the tax lawyer. Now all tax-related items except the mortgage interest and medical costs will go through CE Desk’s dedicated checking account. This will make it very easy to run out a report: everything related to FaM and CE Desk is gathered in one account. Mortgage interest is reported on a yearly form from the lender. That leaves only one category, “medical,” in my personal accounts to report on…and that’s easy.
Reconciling an account against a bank statement is also pretty easy in Excel. Just translate the instructions on the back of your statement into Excel actions:
First check off all the cleared transactions in your checkbook spreadsheet; changing their font color makes it easy to spot uncleared entries. Then enter your current bank balance, subtract uncleared debits (checks and EFTs) and add uncleared credits (deposits). Click AutoSum (Σ) to total these figures. Next, enter your bank statement’s ending balance, add any deposits made after the ending date, and subtract uncleared debits. Click AutoSum again to tote up those figures. Now compare the two totals: if you haven’t missed entering anything, then the two should be the same. If they’re different, you’ve made a mistake and need to recheck the figures in your checkbook spreadsheet.
So, how will this work with day-to-day bank and credit-card transactions? It’s easy to track credits (deposits) and debits (checks and electronic payments) in an ordinary spreadsheet. However, because I charge all my grocery and other discretionary spending on credit cards, paying them off in full at the end of each month, the single payment to American Express or Visa doesn’t show what, specifically, that payment covered. In Quicken, this failing can be addressed with split transactions. Since I don’t know how to enter a Quicken-style split transaction in Excel (or even if that can be done), I believe one would need a separate spreadsheet to track credit-card charges. In my case, this represents no extra work: I already do that in Quicken, because I make too many charges each month to stuff into a single split transaction.
So, we first set up a spreadsheet for the checking account:
To explain how Excel builds the figures in the “Balance” column, in the “Cleared” column I’ve noted the commands I entered in “Balance.” For those who are even less conversant with Excel than I am, here’s what I did: Place the cursor in the target cell; type the = sign and then click on the cells you want Excel to total; after each cell, enter a + sign. In my first row, I’ve asked Excel to take the next cell under “Credit, “$10,000, and add it to the figure under “Debit,” which is blank, giving an opening balance of $10,000. That little green triangle on the opening balance is Excel complaining that no value appears in the second (“Debit”) cell. This is just whining—you can either ignore it or quiet the program down by entering a 0 in those blank cells.
This establishes the opening balance. To figure the running balance, remember that you have to include deposits as well as checks and electronic payments. So, I’ve gone to the second row, placed my cursor in the second cell under “Balance,” and asked Excel to take the previous figure under “credit” and add it to “debit” and then add these to the previous figure under “balance.” Because the debits are entered with minus signs (i.e., as negative numbers), using the + sign will cause Excel to subtract that figure from the series’ total. That is, you’re getting x + (-y) + (z).
(And yes, Virginia: that’s why we take algebra in high school or college!)
Now, to keep track of what that $800 paid to American Express was actually spent on, we have a second spreadsheet:
In this spreadsheet, I would like to know not only what specifically I’m diddling away money on, but also how much is left out of each month’s $800 credit-card spending budget. So under “credit” I enter the amount budgeted. This spreadsheet doesn’t represent a bank account and so never has to be reconciled. Consequently I can be a bit more casual here. I create the opening balance simply by copying the first make-believe “credit” into the “Balance” column. Now to make Excel do a running balance, all I have to do is ask it to subtract each debit from the preceding balance. I do this by entering an = sign in the first cell below the opening balance, then clicking on the first debit (notice that it also has a minus sign in front of it, making it a negative number), then entering a + sign, then clicking on the number right above, in the “Balance” column. This subtracted $86.50 from $800, showing $713.50 was left in the monthly budget. Now click on that “$713.50” cell, notice the little “knob” in the cell’s lower right-hand corner; grab that with the cursor and pull the cursor down the column. Every cell the cursor has swooped over will perform the same function as new values are entered in “credit” and “debit,” neatly keeping a running balance for you.
Nifty, eh?
Excel will default to show negative numbers in red, in parentheses—accountant-style. It also probably will default to give you plain-vanilla figures with only one decimal place, as it has done here. To adjust these formats to fit your taste, go to Format > cells and explore around…that’s about the only self-explanatory part of this program.
Come April, I’ll want to send a report on tax-related expenditures to my tax lawyer. It is possible to make Excel do reports, but I’ve never figured out how. The online “Help” manual is utterly incomprehensible to the English major’s mind, and the reports chapter in Excel for Dummies is also over my head. However, it’s easy to generate an English-major report by using the “sort” function. Here, I’m pasting entries from the check-register spreadsheet and entries from the credit-card spreadsheet into a single new spreadsheet and running a “sort” on them:
To sort a spreadsheet, highlight the data you want to sort and then go to Data > Sort. Here I’ve asked Excel to sort first by Category, then by Income, then by Expenses. The result appears above.
As I mentioned above, most tax-related transactions will now occur in the S-corporation. However, it develops that COBRA, Medicare, and long-term care premiums are tax-deductible, and of course these will be paid from personal checking. So I’ve created a category, TR, to flag tax-related items. Sorting the data first by categories gathers transactions by category. From there, it’s easy to tote up the expenses or income in each category. To arrive at $388.09 worth of tax-related transactions, I clicked in a cell next to where those transactions are grouped, and entered the = sign + each figure in the TR category.
In this sheet, as you can see, it’s also very easy, to arrive at a whole year’s income and expenses: just put your cursor in the cell at the bottom of “Income” or of “Expenses” and click the AutoSum icon (looks like a Greek letter Σ).
Excel is easier than it looks. Describing these maneuvers, even in plain English, makes them look harder than they are.
Credit-card lenders, as predicted, are using the new credit-card consumer protection law to upgrade their profits. For a round-up of the latest “improvements,” take a look at Karen’s post at Smart Spending. Some of them are enough to make you consider canceling your credit cards altogether.
Citibank, for example, has raised its interest rates to almost 30 percent! Think of that. And especially think of the tricky ways credit-card interest is applied, so as to soak you on new charges made after the interest kicks in.
Karen reports that Citi proposes to gouge an annual fee of $30 to $90 from customers who have the temerity to charge less than $2,400 a year.
It’ll be interesting to see what else develops on this front. Personally, I never carry cash. I charge most purchases on Costco’s American Express card because AMEX gives a nice cash kickback; the very few merchants who won’t accept American Express get paid with a Visa from Chase. Every month I pay off the charges in full. Neither of these worthy organizations charges a fee.
Yet.
The minute one of them does, though, the card gets canceled. IMHO, credit-card lenders already earn plenty of cash from my purchases, even though I never pay a penny of interest. For every card transaction, the merchant pays the card issuer a fee. The truth is, you and I and everyone else pay the fee: of course, the merchant’s cost is passed along to the customers. The card issuer’s contract forbids the merchant from offering a discount for cash purchases. This means that everyone, even people who never charge anything on a card, has to pay extra for every item in the store. In other words, Dear Reader, we’re all already paying for the privilege of living in a credit-card culture. Card issuers earn quite enough from usurious interest rates and nicking merchants—they don’t need to zing you’n’me with annual fees to make a nice profit.
Evidently I’m not alone in that opinion. Karen’s Smart Spending article notes that a third of credit card customers have canceled their cards, half of them specifically because of changes such as higher interest rates or new fees.
Ever ask yourself how you would get by without a credit card?
If you travel a lot, it could be a challenge: you really need a credit card to make plane and hotel reservations. But they’ll probably take a debit card. You lose some of the advantages of a credit card: deferral of the payment date and some element of recourse if the purchase doesn’t work out for one reason or another. Still, if you were determined not to pay the additional rip of an annual fee, it might be worth the inconvenience.
But otherwise, it’s not horribly difficult. You have four fine alternatives to the credit card, at least one of them guaranteed to keep your budget running in the black:
🙂 Fast
🙂 Universally accepted
🙂 No need to memorize PIN numbers
🙂 No paper trail: protects your privacy
🙂 Hassle-free: no fights with banks or credit-card issuers
🙂 Built-in spending limit: keeps you on budget
Cash: The Bad and the Ugly
🙁 Too easy to spend
🙁 No paper trail: hard to track spending, no proof of tax-deductible purchases
🙁 No recourse in dispute with merchant
🙁 Easy to lose or steal; no recourse to insurance if stolen
🙁 No good for Internet shopping or phone transactions
🙁 Bulky to carry around
🙁 Unsanitary
Checks: The Good
🙂 Relatively easy to use: no PIN needed
🙂 Most merchants accept them
🙂 Check register: easy to track spending
🙂 Hard to use if stolen; no $50 liability limit for ID theft
🙂 ID checks at register: added theft protection
🙂 Paper trail; unarguable proof of payment
Checks: The Bad and the Ugly
🙁 Easy to overdraw account: stiff overdraft fees
🙁 Checking account fees: Need to use credit union to avoid bank gouges
🙁 Time-consuming hassle at check-out
🙁 Bulky and heavy to carry around
🙁 No good for Internet or phone transactions
🙁 Paper trail: accessible to those you’d just as soon not have knowing your business
🙁 Can be forged by thieves who know what they’re doing
Debit Cards: The Good
🙂 Lightweight, easy to carry
🙂 Fast
🙂 Widely accepted
🙂 Good for Internet shopping, phone transactions
🙂 Paper trail: statements show purchasing record
Debit Cards: The Bad and the Ugly
🙁 Many nicks and gouges from bank fees
🙁 Also some merchants’ gouges
🙁 Merchant-instigated holds on bank accounts
🙁 Vulnerability to ID theft, armed robbery
🙁 Paper trail: little privacy from intrusive merchandisers and other uninvited observers
Merchant Purchasing Cards: The Good
🙂 Budgeting device: Limit monthly expenditures by limiting amounts on card
🙂 Fast
🙂 Easy
🙂 Lightweight, easy to carry
🙂 No fees
🙂 Relatively little hassle
Merchant Purchasing Cards: The Bad and the Ugly
🙁 Recurring inconvenience: Recharge as money runs out
🙁 Limited to specific merchants
🙁 Stealable: great windfall for thieves
🙁 Little use for Internet or phone shopping
🙁 Hard to track purchases
🙁 But easy for merchant to track your behavior: privacy issue
🙁 Various merchant scams and limitations
Each of these devices has its uses. Personally, I distrust debit cards—too many opportunities for banks and merchants to zing you with incomprehensible fees, too vulnerable to identity theft. If things come to such a pass that I decide to get rid of my credit cards, I think I’ll use merchant purchasing cards as “cash envelopes” for certain kinds of recurring purchases and then use real cash or checks for everything else:
• fresh food purchases • bargain meats • small incidentals
Cash:
• eating out • entertainment • very small incidentals
Checks:
• workmen • veterinarian • doctors’ copays • all goods not purchased at Costco or Safeway (such as clothing, linens, decorating items, prescriptions, etc.)
It’s interesting to contemplate, because abandoning credit cards would force me to rejigger my budget. Right now I budget a certain amount (it’s been $1,200; is about to drop to $1,000) for spending on all costs other than regular recurring monthly bills. Those costs are all put on the card. So, I use two debiting tools: automatic bill-paying and the credit card, each of which has its own sub-budget ($840 for monthly bills and monthly savings; $1,000 for all other spending).
If I dropped the cards, I’d have to budget for not two but four spending tools: automatic bill-paying, purchasing cards, cash, and checks. Drawback is an added layer of complication. However, the trade-off is that such a system mimics the cash “envelope” budgeting strategy, and it might be a great deal more effective at keeping one on budget.
Given a choice, we fossils would have preferred that the Cretaceous had lasted a while longer. All these little mammals running around—pesky things, and they make all sorts of nimble demands.
Last night I went to log on to my credit union accounts and instead got a message informing me that henceforth the CU will charge a fee to deliver paper statements to customers who have online access. To get statements free, we have to agree to accept e-statements.
Fine, I’ll figure this out later; leave me alone and let me get my chores done, thought I.
But nay…the only way you can move forward into your accounts is to click “accept” or “decline.” There’s no “I’ll think about it” choice. When I tried to back out, up popped an error message informing me that Safari no longer will suffice to navigate the CU’s site, and that I must have a new version of IE or (hang onto your hats, folks) Netscape.
Netscape? It went down in 2008.
So I sent a query. This morning comes this reply:
If you are using a MAC the only browser we support is Safari, versions 1.2 and 3.0. You must use this browser in order for all the options to work properly.
Huh? Safari 1.2?? I thought the last surviving copy resided at the Smithsonian. Safari 3.0? That came out…when? In the Mesozoic? I’m at 3.2.3, and a more recent update keeps bouncing at me like Cassie the Corgi with a ball, begging to be installed.
They say you can view your accounts with any old version of Safari, but you can’t perform the functions you may need.
Meanwhile, nothing said about the fact that you can’t proceed to your accounts without accepting or declining their “offer.”
Well, I guess we can say good-bye to the old-fashioned, customer-friendly service that is the specific reason some of us prefer credit unions to banks. Sic transit gloria mundi.
Well, after two days, almost two hours of dorking around at the credit union, and a quiet stress attack, finally I managed to get someone to take my $21,000.
At one point I thought maybe I should take it all out of the bank in dollar bills and sprinkle it around the floor of the credit union’s lobby. Let the janitor find a way to use it.
Lenders do not want you to pay off a loan. No. Bad. D-o-o-o-o-n’ttake our interest payments away!
Just before the flu struck, Shibu (doughty manager of the credit union branch on the Tempe campus) obtained the precise amount that would be owing as of last Tuesday and e-mailed clear, understandable, easy(-sounding…) instructions for how to pay off the Renovation Loan, which is actually a second mortgage on my house. He said any teller should be able to perform the transaction.
Then I got sick, in the middle of a vacation. So instead of schlepping to the main campus amid (chaotic!) commencement preparations, I decided to run over to the West campus, which also hosts one of the credit union’s branches. Since I had several other errands to run on the West side, this would work out OK.
So it seemed.
Teller took one look at Shibu’s instructions and said, “This is something our manager will have to do. I don’t know how to do it.”
Manager was in with someone else. She would, the teller thought, surely be free soon.
A half-hour later, I was still cooling my heels. The work I needed to do for a client was still waiting for me. The syllabi I’d promised to send to the chair of the department who proposes to hire me to teach three sections next fall were still waiting, yet to materialize even in draft form. The groceries remained to be purchased. The signature form for the locksmith was still to be delivered. My stomach was achingly empty. So, annoyed, I left.
The main campus’s branch is dead empty, the whole place having lapsed into a state of exhausted vacancy after last night’s 70,000-guest Presidential commencement bash. This, I imagine, should be easy.
I hand over Shibu’s written instructions to the teller. Fortunately, he’s in the offing.
She takes about 20 seconds to reach full flummoxhood. He has to come over and take her through the process, step by step. But even then, they make a couple of errors and have to back out and start over. Then they get mysterious error messages and have to figure a way around those.
This procedure took almost 45 minutes! Then it took another ten or fifteen minutes to make Shibu understand that I wanted the monthly automatic payment that had been going from checking to the loan now to go from checking to money-market savings. Think that finally got settled. I hope.
Now, you know, being an inveterate cheapskate I experience the act of forking over $21,422 as stressful, even when it’s 21 grand that I saved up precisely so I could fork it over. Just hate letting go of pretty little dollars…you have to prize my fingers loose from them. So 45 minutes of repeated efforts to hand over a chunk of dough felt like 45 minutes of waterboarding. At one point as I’m standing there watching them and trying to remind myself that it’s their problem, not mine, my little heart started to pound, the metallic flavor of adrenalin to flood the tongue, the ears to ring, the room to spin. Damn!
From there I had the pleasure of visiting the gynecologist, whose nurse noted that my blood pressure was a shade high.
No kidding?
At any rate, the loan is finally paid off. And good riddance. Shibu said it was accruing interest at about $3.50 a day. If one paid it down at a stately rate over its thirty-year term, one would end up paying out exactly twice the original loan amount. What with the extra $200 a month added to routine savings, plus the net teaching salary, plus what I expect to earn freelancing, by the time I exit GDU’s ivied halls the credit union will be holding about $24,000 in savings, more than replacing the amount I earned last year for the express purpose of the pay-off.
Gather Little by Little reports that he ran up against the six-withdrawal limit with an ING Direct savings account he was using as his “firewall.” The bank informed him that the next time he made more than six transfers out of that account in a month, the account would be closed.
Take that, you PF desperado!
Well, I must say, I was surprised, too. I thought this applied only to money market accounts. Withdrawals from money market savings and checking accounts are strictly limited. Turns out the Federal Reserve’s Regulation D applies to regular savings accounts, too. I cruised over to my credit union’s site to see what they had to say on this issue, and lo!
What constitutes a Regulation D transaction? Transfers or withdrawals by Online Banking or Telephone Banking, preauthorized withdrawals or transfers, and transfers to cover overdrafts. Unlimited withdrawals or transfers may be performed in person or at an ATM, institution fees may apply.
Interestingly, you can withdraw your little heart out if you physically go in to the bank, or, bizarrely enough, if you transfer or withdraw money through an ATM. ???? What the heck is the difference between an electronic transaction on an ATM and an electronic transaction done on your PC (except for the greater opportunity presented by ATMs to gouge customers)?
Oh, well. What it tells you is that there’s at least one advantage to using a brick-and-mortar institution: you can’t go in person to an online bank, but you can visit a credit union or bank that’s within driving distance.
