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Personal Finance

Credit Bureau Security Freeze: The (Mostly) Pros and (Few) Cons

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As you may recall, as the current identity theft drama materialized, a fraud specialist at Experian recommended placing a “security freeze” on my accounts at all three credit bureaus, Experian, Equifax, and TransUnion. Since she sounded like she knew what she was doing, I went ahead and did that.

And know what she was doing, she certainly did.

Yesterday, after having spent the entire day trying to reach a human at Social Security by way of rerouting my direct-deposited SS checks to the new credit-union account, I finally stumbled upon a live person, late in the afternoon. I’d tried to register myself with SS’s online site and failed, so called a “Help Line” tech — instead of the hour and fifteen-minute wait to reach a human at SS’s main phone number, it only took about ten minutes for this woman to surface.

She said the reason I couldn’t register online at Social Security is the security freezes I set up at the credit bureaus: The government’s site checks with credit bureaus before allowing just anyone to claim they’re you and get online as you.

I said, “So, now I’ve got to go to these bureaus and undo all these security freezes before I can get my check?”

Actually, I was so upset, so frustrated, and so scared that at least one and probably two or three checks are not gonna reach me that I started to cry.

She said no, she could manually enter credit union’s routing number and new account number, which she (purportedly) proceeded to do. Let’s hope she succeeded!

She then said having a credit-bureau security freeze is a good thing, because it goes a long way to prevent identity thieves from hacking into the Social Security Administration disguised as you, even if they have your SS number. Although it doesn’t protect you from all forms of identity theft, it goes far enough toward blocking credit-card and Social Security fraud that she suggested keeping it on the credit bureau accounts permanently.

Consumer’s Union, which has been among those lobbying for security freeze laws, points out that a security freeze costs you a one-time fee of just a few dollars or, in some cases, nothing — credit “monitoring” is an ongoing fee-based service — and it’s more effective because it proactively prevents anyone from opening an account without your permission. All credit  monitoring does is notify you after the barn door has been opened.

A security freeze is different from a fraud alert, which you can also establish with the credit bureaus. A fraud alert tells creditors that you have alerted the credit bureau of possible fraud but does not prevent them from viewing your records. A security freeze prevents prospective creditors, insurance companies, and employers running background checks from seeing your credit file unless you give your consent.

And that is a very, very large benefit when it comes to protecting your privacy! It’s huge.

The trade-off is a degree of inconvenience: for you to open a new credit instrument (such as a credit card, a car loan, or a mortgage), you have to go to all three credit-union sites and jump through the telephone punch-a-button hoops to enter a PIN and lift the freeze long enough to get your transaction through. Then you have to go back and punch buttons again to reinstate the security freeze.

This is not very difficult, though. And not difficult at all compared to the enormous hassle and grief occasioned by an identity theft. On average, most people have to spend 40 hours cleaning up the mess created when some crook opens a credit account in their names.

The credit freeze does not affect your credit score. You still can get your annual credit reports for free. Your existing creditors (and their collection agencies…) can still view your credit files. And the credit freeze does not stop nuisance “pre-approved” credit-card offers from showing up in the mail or by phone.

There are some kinds of fraud the credit freeze does not guard against. For example, the increasingly popular income tax fraud — whereby the hacker fills out a fake income tax return and has a tax refund sent to the address of his choice — is outside the purview of this device. Obviously, if someone steals your credit or debit card, he can rack up some bills (or, with a debit card, drain your bank account and credit reserve). But for anything where a credit search is required, this tool is very valuable.

The State of California has a law that gives you a right to put a security freeze on your credit records. The state’s Web page describing the security freeze is worth bookmarking — it not only explains the process and how to install a freeze, it gives you tools for recovering a PIN should you lose it.

Consumer’s Union recommends that you protect yourself with a security freeze if you’ve learned that your Social Security number has been compromised in a security breach, if your mail has been stolen, if you’ve already had an incident of identity theft, if you’re in the particularly vulnerable age group of 18 to 24, or if you have to carry around a card (like a Medicare card) bearing your SS number.

* * *

Arriving at this knowledge was a freaking nightmare, I’ll tellya. Yesterday devolved into a true day from Hell.

I showed up at the Social Security office in search of a live human right when they opened: 9 a.m. Three parking spots remained in the lot, and one of them was a disabled space. The line to get past the security guard was out the door.

Fortunately, I’d brought my computer so I could work on a client’s book. Took a number and sat in the only open seat that had a little room around it.

There was a reason for that: in front of me were two street people. The woman was high on some sort of drug — in the course of her endless droning conversation with her pal, she remarked that she was taking an extra-heavy dose of oxycodone. The man smelled bad.

Between this woman’s nonstop babbling and the guy’s stink, I couldn’t focus on my work. Finally another seat opened up across the room and I was able to dodge into it before another customer could beat me out.

So I sat there for an hour and a half!

To no avail: at 10:30 I had to leave to go to a real appointment. Thence to La Maya’s house for lunch. By then I was so rattled I carried a bottle of wine over there for a house gift…i.e., as the day’s drug of choice.

La Maya doesn’t drink much, but in due time La Bethulia showed up, fresh from a job interview that sounded extremely promising. So between the two of us we consumed about 4/5 of the bottle.

Back at the Funny Farm, the telephone awaited. After first trying to get through on the Social Security web page, I did have the luck to reach the CSR described above and, with any luck (please, God!!) got my checks routed to the new checking account.

Meanwhile, the magazine writing students had posted their final papers: 15 of those also awaited. Read papers until about 9:00 p.m., at which point I fell face-forward into the sack.

In all this flailing around, I forgot to plug in the lights I hung in the trees to try to protect them from the frost. So the lime tree will probably lose about a third of its canopy. Still…at 6 this morning, before sunrise, it wasn’t cold enough to destroy the oranges, I don’t think.

Thank heaven for small mercies.

🙄

This post was kindly included in the Carnival of Personal Finance at Money Life and More.

Identity Theft Aftermath…arggghhhhh!

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Or, one might say, gaaaaahhhhhhhhh!

“You may continue to hold, and a representative will be with you as soon as possible”…blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat …

Spent an hour chatting, in person, with the assistant manager at the credit union about the annoying community college district’s having blithely handed over every goddamn iota of my personal financial information to identity thieves. She knew whereof I spoke, in spades: incredibly, the District had sent her the same apocalyptic message I got, but she has never had anything to do with any of their colleges or with anything else related to their entity in her ENTIRE LIFE.

It begins to get hilarious.

Given the hard-copy message, whose credibility we cannot assess under the ridiculous circumstances, we decide that the most prudent course is to assume that the data has been hacked, rather than to take a chance on making the opposite assumption and regret it later. Since my accounts there only hold about 13 grand (the entire amount of my 2014 living expense needs), if money is siphoned off, then the CU (read “FDIC”) will cover it as long as I clue them within 60 days of an illegitimate transaction.

We confirm that it’s possible to create a new account for me within the credit union without my having to lift the security freezes now in place at all three major credit bureaus (Experian, Equifax, and TransUnion).

So, Assistant Manager Renée, a very nice lady and wondrously together, says that now that we’ve changed the account number, effectively closing my account and opening a new one in ONE swell foop, I need to call every merchant that engrosses money from my account automatically (that would be all the utility companies plus my long-term care insurer) and clue them to the new account number; and forthwith I must get ahold of Social Security and give them the new account number, since they deposit my Social Security payment digitally.

So first off I call Social Security. …blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat blat … “Your estimated time is…

“1 hour and 15 minutes“

Moving on…

• City of Phoenix Water Services: “We’ll send you a form.”

• Southwest Gas: “We’ll send you a form.”

• Salt River Project (electricity provider): CSR takes routing and account info but has a difficult time understanding that the credit union will post this month’s bill even though there’s no way SRP can get its act together in time to apply the new account number to this month’s bill. He thinks I’ll have to pay this month’s bill with a check.

• Metlife: HOLY mackerel! Straightaway I reach a human being and she has good sense. Or at least she seems to. She takes the new information and the old routing number and says all will proceed without a hitch. That’ll be the day, I think. Privately.

• Cox is paid a set figure through bill-pay. I’ll have to go into the new account and reset the bill-pay info.

And as for the accursed community college district, which caused this whole mess and which has shared my bank account information with the entire fucking universe: I told them to send whatever further paychecks they emanate by snail-mail. You can be sure that outfit will never get its corporate paws on another bank account number of mine.

This will add a significant new layer of hassle, since depositing snail-mail checks is a major pain in the proverbial ass. But it’s one helluva lot less of a pain than the present endless series of hoop-jumps.

Tomorrow I’ll have to DRIVE TO THE GODDAMN SOCIAL SECURITY OFFICE, be sure my stupid little pen-knife is NOT in my purse, trudge in there, wait around for half an hour or more, and then try to make a face-to-face CSR understand a) what’s happened, and b) what needs to happen.

By and large, however, experience suggests the face-to-face CSRs are a lot smarter and a lot more knowledgeable than the phone representatives, who routinely dispense incorrect information. That notwithstanding, however, based on the outcomes of past exploits it is reasonable to expect that I will miss at least one Social Security payment and so within a few weeks will end up back at that office doing battle again.

ogodogodogodogod it’s not good to know too much

Mass-Produced Identity Theft

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Hey. What’s a little identity theft when you can do it big-time? Why be a piker about it?

My beloved part-time, parsimonious employer, the Maricopa County Community College District, sent out a notice to a large number of its 8,000 employees and 2.4 million students to the effect that thanks to a couple of underpaid and under-competent IT workers in HR, a potentially vast amount of personal financial data has been breached. After dark on Friday evening, when of course it was too late for me to start calling financial institutions, I received a form letter from Chancellor Rufus Glasper reporting that “we determined that your…name, address, phone number, e-mail address, Social Security number, date of birth, financial and bank account information, certain demographical [sic] information, information related to your employment, education and training…may have been accessed.”

They’ve been emphasizing that this is a maybe situation.

But how did they find out about this? From the FBI, that’s how: last April, the feds found a website selling information kiped from the District’s HR records.

Did you catch that? Last April was seven months ago. They’ve known about a major data breach for seven months and are only just getting around to sharing this little tidbit of information.

So the only “maybe” about this is that “maybe” some of us will be able to protect ourselves by shutting down every bank and credit card account in our names and slapping iron bars around our credit bureau accounts.

They’ve hired some outfit called Kroll Advisory Solutions to do “continuous credit monitoring and enhanced identity theft consultation and restoration.” This company’s web page is inaccessible — apparently their servers have crashed, no doubt under the onslaught of tens of thousands of MCCD employees and students trying to get on. But when you call the phone number the District provided, the people you reach haven’t a clue. All they can tell you is that there “MAY” have been a breach. When asked exactly what their company does, they don’t have an answer. So that multimillion-dollar contract appears to be window dressing.

Holy cr@p.

Started making phone calls about 8:00 this morning and was on the phone — or on hold, or stumbling through interminable punch-a-button mazes — most of the day.

Fortunately, thanks to the PF blogging, I happened to have a number that would reach a human at Experian. It proved impossible to get past the robots at TransUnion and Equifax, but on the advice of Experian’s fraud expert, I managed to set up “security freezes” at all three credit bureaus.

A security freeze, as it was explained by to me, means that no credit reports can go out, no new credit cards can be opened, no nothin’ can happen without your going into the site, entering a PIN, and lifting the freeze, temporarily or permanently. This state of affairs can be left in place forever and aye, if you so please. Two of the credit bureaus gave me PINs over the phone, but one is sending it by snail-mail.

All Arizona college faculty and students are eligible to join my beloved credit union. Evidently every one of them was doing the same thing I was doing: frantically calling customer service. So, getting through by phone to a person there took over six hours. When I finally reached a CSR, she said they’re advising people to close their accounts and open new ones. That is going to create a monster hassle, since my bookkeeping includes a busy tangle of automatic deposits and payments. Including, of course, paycheck deposits from the college district.

I’ll be damned  if I want said district to have yet another bank account number for me. So tomorrow when I’m on the campus, I’m going over to HR and asking them to send my paychecks by snail-mail, thank you very much.

Off and on for the past couple of years, I’ve been thinking it would be good to move my money out of that credit union over to a different teachers’ credit union, which has a branch much nearer to my house. Right now every time I have to go up to my CU in person, it costs $3.00 to $3.60 in gasoline, since that branch is way to hell and gone out at the Great Desert University’s west campus, in a part of town where I have exactly zero other reason to venture. This other outfit’s branch is on my beaten path, making it possible to get banking chores done while I’m doing the grocery shopping.

Lacking all three credit-bureau PINs, though, that may not be possible. I sure don’t want to close the same bank accounts twice. So if I’m to move to a more conveniently located institution, I may have to wait on closing those accounts until after the third PIN shows up in the mail. Which, as usual, will be after dark.

This is infuriating. I don’t know what else to do… There doesn’t seem to be much else to do, other than bob around in the water like a sitting duck waiting for whatever’s coming to hit me upside the head. If ever there was good cause for a class action suit, this sure as hell is it.

If you have any other ideas for self-defense, lemme know.

Got Parents? Keep an Eye on Them!

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It is freaking amazing how vulnerable we old folks get to scams and sales pitches as we descend the steps toward the grave. Lissen up,  you young pups: if you have parents, it is sooo incumbent upon you to quietly keep an eye on whatever financial mischief they’re getting up to. If not to protect them (as most of them did for you when you were too dumb to know better), then to protect whatever assets you might inherit or to delay the day, as long as possible, that the old folks become dependent on you.

Here’s what brought on that outburst: Semi-Demi-Ex-Boyfriend called, all hepped up about having dropped something in excess of five grand on an improvement to his 35-year-old tract house in Sun City, a venue that most Boomers avoid like it was radioactive. While the house is ideal for a single person who doesn’t live there year-round, Zillow believes it to be worth $6500 less than he paid for it in 2004.

Here and there around Sun City, you’ll see old masonry houses that recently have been clad in stucco. Most of these get a layer of insulation under the new mud, which in theory should save on power bills.

Welp, one of SDXB’s neighbors decided to do this. Curious, SDXB stopped by to inquire, and that gave the contractor an opportunity to offer him a smokin’ deal if he would just sign on the dotted line before the guy moved his crew out of the area. So now he’s all excited because he expects this will increase the value of his hard tent (his term: a guy with terminal wanderlust, he wishes to spend his dotage in constant motion, using the place in Sun City as a place to camp out during the winter, when the weather’s livable). And it is true that the houses modernized with a layer of stucco do look a lot better than those with naked slumpblock walls.

So now he’s saying maybe he’ll sell the place, taking advantage of what he thinks will be spectacularly improved property value, and upgrade to a better place on the golf course.

Well. This sounds grand, until you think about it:

a) During the winter, it’s a rare day when you’ll turn on the heater. Today as we speak we’re in mid-November and it’s 73 degrees on my back porch. Last month my power bill was $66; this month it will be less. Ditto SDXB’s.

b) In addition to her house in Sun City, New Girlfriend owns a lovely home in Boulder, to which she repairs at the first sign of undue warmth. SDXB either goes up there with her or soon follows, every spring. She stays there until October. He spends most of the summer there, when he’s not hanging out with his relatives at the Hood River in Oregon or visiting boyhood friends in the Upper Peninsula of Michigan. Thus, when my  power bills run upward of $200, he has exactly no power bills. None. Nil. Zero. Zip.

c) The two of them have developed a love of ocean cruises. They are merrily squandering their kids’ inheritance on wonderful cruises, and having the time of their lives! In summers past, they’ve been all over the Caribbean, to say nothing of the trip to Italy. And just now he’s got NG persuaded that nothing will do but what they must head for the South Pacific. Thus, between the summer home in the high country and the constant peripatetic mode, they’re hardly ever there!

d) SDXB has taken his neighbor’s word for it. He’s done nothing to check this contractor out or to get competing bids. This is SO out of character that it defies belief.

Well. IMHO if you plan to spend the entire year in one of those hard tents and if you believe you’re going to live in it until you croak over, this stuccoing scheme may not be a bad idea. Although God only KNOWS how many years it will take to recover the cost if only utility bills are taken into consideration, SDXB’s slump-block home is fully painted. A new paint job, if it’s done with a decent grade of paint, will cost him two or three thousand bucks. Newer forms of stucco come dyed to the color you please and, in theory, never need to be painted. So assuming that’s true and assuming he lives, say, another 15 to 20 years, he could save as much in paint as he spends on mud. In that case, whatever savings he realizes on the air-conditioning (which could be non-negligible, should he ever break up with NG) would be gravy.

But as a practical matter, SDXB has no intention of EVER spending another summer here in the Valley of the We-D0-Mean Sun. So that leaves us with the question of

W

T

F

???

IMHO, this is a case where a competent family member — a son or a daughter, for example — needs to be on hand to keep an eye on big-ticket decisions for an aging parent.

Of course, none of us wants to give over our autonomy to the younger generation (or to anyone else, for that matter). And naturally, none of the young folk wants to have to take on the responsibility of riding herd on an increasing frail (and so increasingly annoying) parent. However…it must be recalled that, after all, those parents shouldered 18 years or so of responsibility for the pups. Or, less altruistically: our assets are their assets. Whatever we refrain from squandering will help to keep our kids in the middle class, to the extent that a middle class survives in this country.

So. Keep an eye on us old buzzards, you young thangs.

😉

.

 

What’s Your Least-Favorite Financial Task?

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Hereabouts, it’s not the budget. Not economizing through tight times. Not even paying the bills. My least-favorite financial task is scanning checks and depositing them electronically.

A close second — about neck-and-neck, come to think of it — is driving to the credit union to deposit checks. The only branch on this side of town is up at the Great Desert University’s west campus, about as far off my beaten track as possible. Literally, nothing calls me in that direction anymore, and I deeply resent having to burn gas and time to schlep a few checks up there. Hence: electronic deposit.

Two factors contribute to turning this task into an exercise in frustration. First is the exigencies of the credit union’s software system. Second is the endlessly annoying, ditzy HP ScanPro software.

To begin with, the CU demands that checks be scanned in black & white JPEGs, 200 to 300 dpi. NOT color, my scanner’s default (it likes to brag about its “millions of colors”! The CU’s system just hates that). Try to deposit a check accidentally scanned in “millions of colors,” and you’ll hang the credit union’s software. Nor does said program care for grayscale: a check scanned in grayscale is instantly rejected.

So this means you have to remember to fiddle with your software to persuade it to do a b/w scan. But that’s the least of your headaches.

To please the credit union, your check must be scanned JUST SO. The image has to be cropped to exactly the size of the check, with no border around it. And the image of the check’s backside has to be exactly the size of the front image. If it’s not, your deposit will be rejected.

This means you have to set the check on the scanner’s flatbed exactly straight. That is 100% straight straight. The scanner then copies the entire flatbed, and you have to crop the image to the edges of the check. The cropping tool, of course, appears as a rectangular box with right angles all the way around. Set the check on there cattywampus, and you get part of it cut off and part of it with the hated border.

The inside of the scanner’s cover is white, right? Ohhhhkkkaaayyyyy…. If your check is white or pale gray or pale beige, it’s extremely difficult to line up the edge of the cropping rectangle with the edge of the check’s image. Get that wrong, and the CU rejects your deposit because it thinks you’re trying to deposit a fake check, because the size of the front doesn’t match the size of the back.

The first time I rescanned a check four times and couldn’t get the goddamn software to accept a deposit, I called the CU and asked what was wrong with their software.

Nothing, their CSR said. “But here’s a suggestion: scan the check on a black background. Then it’ll be easier to see the check’s edges”

Black? Say what? Am I supposed to paint the inside of the scanner’s lid??????

Well, I had some black card stock from an art class I’d taken some years before.

Set a small piece of paper on a glass plate — dare you to get it straight in the first place! — and when you lay a black card over the top of it, what will it do? Scootch around, of course.

So, you have to tape the damn check to the damn piece of black paper.

And you have to get it straight. Really, really straight. And sometimes when you align it with the edges of the paper, the scanner fails to pick up the edges of the check.

How to do that? Well…scout up a white pencil and use it to draw rules on the damn piece of black paper, so that you can line up the check at right angles to the edges of the scanner glass. Like so…

BlackThingStarting to get time-consuming, eh? You ain’t seen nothin’ yet.

Okay, now you have your check and you have your annoying black background template sheet thing. Now you have to tape your check to the black sheet. Very, very carefully, because of course you’re going to have to take the tape off one side and turn the check over for a second scan, meaning you dare not rip the damn thing.

BUT…

One piece of tape will not suffice. If you tack the check to the black card with a single piece of tape, the check will…yes!…scootch when you set the card upside down on the scanner bed. No. The scanner software will NOT straighten the image. No. Not a chance. So, you have to affix two pieces of tape, very, very carefully, one to the check’s top edge and one to its bottom edge.

Now, at last, you have the thing in place and you tell HP ScanPro to run “New Scan.” Obediently, it does so, producing a kind of preview that you have to adjust as necessary before scanning to disk. It scans the entire flatbed, meaning you have to grab the cropping tool and reduce the image to fit the check’s image.

BUT…

For unfathomable reasons, if the cropping rectangle that comes up touches the left-hand margin of the flatbed image, HP Scanpro will not allow you to grab the left-hand corners or edge of the cropping rectangle!

This means that if it produces a rectangle that runs all the way from the left side to the right side, you have a little headache. No two rectangles, BTW, are ever the same size or shape. Sometimes ScanPro will produce a cropping rectangle that’s almost the size of the check; sometimes much smaller; sometimes horizontally wide enough to run from edge to edge of the black image but otherwise fairly normal; sometimes deeper than the check but not as wide; and on and on and on to infinity. Sometimes it throws two cropping boxes at you, and then you have to figure out which one will work and delete the other, in a process that is not obvious.

If you have the misfortune of finding a rectangle that spans the black image, then you have to TRY to grab the right-hand side, reduce the rectangle horizontally, then move the rectangle rightward to align with the right-hand edge of the check image, then grab the left-hand side of the rectangle and size horizontally. Then you can get around to sizing the thing vertically.

Very carefully.

Now you scan the thing.

HP ScanPro presents you with FIFTEEN CHOICES for what to do with this check.

The credit union, by the way, also has software that supposedly will scan your check. It will not work with FireFox; it will not work with a Mac. So you have no choice but to scan your check to disk and then upload it to the CU as a JPEG.

As it develops, the best of the 15 choices is to scan it to an Apple e-mail message. This works handily because Apple has the annoying quirk of insisting on inserting JPEG and PDF images into the body of an e-mail message. This actually shortens the increasingly aggravating process you’re enjoying, because you don’t have to open the e-mail and download an attachment: all you have to do is right-click on the image, which pops up automatically in ScanPro, and save to disk.

First, though, you have to check the image to be sure there’s no significant amount of border around the outside of the image — i.e., that you got it straight, and that you cropped it as tight as possible to the check’s border.

If there’s any border to speak of at any edge, or if the JPEG is not straight, you’ll have to go through all of the above to scan it over again. And, quite possibly, again.

And no,  you can not export the image to iPhoto and crop & straighten it there. If you upload the check’s JPEG image to the CU from iPhoto, it will be rejected faster than you can type FO*K! on your keyboard.

So, you finally get this right.

Now you have to trudge through the same process for the other side of the check, making sure that you place the back side on the flatbed in such a way that the endorsement will show on the right-hand side of the image.

By now, you’ve spent about as much time on this process as it would take to drive to the credit union. But presumably you’ve saved the amount of time required for a round trip, eh?

Well. Maybe not.

Why, you ask, don’t you just put the checks in an envelope and snail-mail them to the credit union?

Why, indeed. The last time I did that, some chucklehead there lost the goddamn checks! Yes. They lost a thousand dollars’ worth of checks from my clients!!!!!!!!! Weeks later, just as I sat down to call each one of those worthies and ask them to go to the time and expense of stopping payment on their checks and sending me new ones, the credit union finally managed to find the things.

And that is why, my children, we never send checks to the credit union by snail-mail.

Okay. Now it’s time to upload your images to the handy-dandy Deposit from Home program.

Including the hassle of signing in to the credit union (it often thinks my password is wrong and then I have to go to a special page to convince it otherwise), uploading one check takes SEVENTEEN STEPS PER SIDE!

Got that? You have to jump through those hoops twice for each check (less the two-step sign-in and the navigation to the Deposit-from-Home page): front side, back side. That’s a total of 31 hoop-jumps! Per check!

😆 😥 😆

By the time I’d managed to deposit the two checks that evinced the present rant — one from Medicare B and one from my Medigap insurer — I still had not paid their total toward the Mayo Clinic bill they were intended to defray. But I had killed about as much time as it would have taken to drive way to hell and gone to the West campus, deposit the checks, and then plod all the way back home.

Remaining to do: Exit Deposit-from-Home; boot up Bill-Pay; remit the total amount of the two checks to the Mayo electronically; print out a report proving I’d done the same; file the stack of paper from Medicare, the Medigap insurer, the Mayo, and the credit union.

The only thing this process saved was about a gallon of gasoline.

Et vous? Do you have a least-favorite financial chore?

This post was included in the October 24 edition of the Yakezie Carnival at Figuring Money Out.

One More Year…Until the Year Arrives

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Frugal Scholar writes about the latest budgetary convulsions in her state, recurring politico-fiscal nightmares that have already had baleful effects on higher education there. With one kid fresh out of college and the other on the brink of (parent-assisted) homeownership, the sails of the Good Ship Retirement have appeared on  the horizon. Though she says she’d like to teach several more years, FS reports that she’s fallen into the habit, particularly where optional expenditures are concerned, of asking herself “what would I do about this if I had only one more year before retirement?”

Good question, isn’t it? She finds it deflects impulse buys. But it’s also an interesting mind-set — maybe one that anyone of any age should engage.

What if we all kept in the back of our minds that we had OMY — One More Year — before we chose to or had to quit working?  What would that do for us?

Well, obviously, it would make us think twice about the various extravagances and flings we’re inclined to when we know that a steady income will replenish savings or pay off the credit card within a month or two or three. It might lead us to plan for the future more carefully: what kind of housing would we like to have, once we’re retired? And where? How much, realistically, is it going to cost us to live in retirement? If the projected retirement date were accelerated by x or y years, how much should we be saving now to accommodate such a change in plans? What kind of vehicle will we drive? How will we fill the free hours…maybe with volunteering? travel? a new job or enterprise? hobbies?

My dean gave me nine months’ notice, although I realized well before then that the university was unlikely to continue to keep our expensive research support office, what with the president saying he would pare back operations that did not contribute directly to the institution’s primary mission, teaching.

So what was the OMY effect on me, a person who actually knew she had only one more year of employment?

• Debt clearance. The number-one goal was to get rid of a $30,000 home-equity loan I’d taken out to renovate the house my son and I copurchased, to make it livable for him. It required me to take a second job, but I accomplished that.

• Budget reallocation and expense control. Believing I soon could be living under the Seventh Avenue Underpass, I started getting used to spending a lot less. Over the course of nine months, I cut the discretionary budget from $1,500 a month to $900, and aimed to get it down to $850. I got used to running the air conditioning a lot less during the summer and trained myself to tolerate uncomfortable temperatures inside the house.

• Food purchase habits. I began stockpiling nonperishable foods, such as canned goods, beans, and rice. Eventually I bought a freezer so I could store meats and frozen vegetables purchased on sale or in bulk.

• Cultivation of new income sources. I got my foot in the door at Heavenly Gardens Community College, so that a teaching gig of 3 & 3 + 1 — the maximum number of courses an adjunct could teach at the time — was waiting for me the minute I walked off the Great Desert University campus. Meanwhile, I ramped up The Copyeditor’s Desk so the contract editorial work was flowing in by the time the salaried job ended.

• Early Social Security draw. With retirement investments down by something over $200,000, my financial manager strongly advised me to delay drawing from savings as long as possible. Even though it was not in my interest to start Social Security before reaching so-called “full” retirement age, the piddly income from teaching and freelance editing was not enough to keep me in my home and put food on the table. So, I was forced to start taking Social Security two years before “full retirement age” and six years before I had planned to do so.

When one is laid off a job in one’s sixties, one is “fully” retired, no matter what some rule-making bureaucrat or affluent legislator imagines. I applied for job after job after job — everything that I was well qualified for, everything that I was even remotely qualified for, and everything I figured I could stand to do even though it was menial work. Believe it: no one is interested in hiring an elderly worker, especially not during a major recession.

• Postponed or canceled decisions about planned major purchases. Even at the time the job ended, my car was reaching its dotage. Normally I keep a car for 10 years or until it reaches 100,000 miles, whichever comes first; the Dog Chariot was 10 years old on the first day of my surprise retirement. I’m still driving the thing. It’s rounding on 14 years old now and has almost 120,000 miles on the odometer. I probably will run it into the ground before buying a new tank.

All of these OMY strategies cushioned the fall into permanent unemployment (which is, after all, what retirement really is).

And when one bounces off that trampoline into a brave new world, one finds that permanent unemployment is just another word for freedom. Today I can’t even imagine going back to a full-time job — perish the hideous thought!

It really is true, contrary to the warnings of ever so many financial advisors who want you to give them your money to invest, that you can live a lot more cheaply in retirement than you do while you’re working. With fewer external demands pushing up your expenses, it simply doesn’t cost very much to live well.

I’ve managed to stay in my home, despite increasing insurance and tax bills. My son and I have not defaulted on the downtown house (although, admittedly, for awhile it did look like we might have to). I don’t seem to be having any trouble keeping the place maintained. Gerardo is still employed. Various workmen still find jobs to do around the place, and none of them is being asked to go hungry. I still have a dog. I can still buy the clothing I need, whenever I feel so inclined (which isn’t often). I can still get a monthly haircut. And I can even go out to lunch or dinner occasionally.

Without the cost of a daily commute, without the need to buy and wear expensive dry-clean-only clothes, without  the five-day-a-week restaurant lunches, without the repair bills occasioned by the wear &  tear on your car, and without the many other expenses one invests in a career, you save a surprising amount of money. And one quickly becomes accustomed to buying more intelligently, to curbing extravagances, and to cutting waste — so quickly that these new habits are not perceived as significant hardship.

Thinking about your financial life as if you had only One More Year to go will not only help you to get your money affairs in order, it will smooth the way into a comfortable and happy retirement.