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Personal Finance

Convenience Cost?

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Is there such a thing as a “convenience cost,” or did I just make that term up? By it, I mean the minor cost of avoiding a minor hassle. Or, I suppose, a middling-large hassle.

Here’s a practical question attached to this fine philosophical matter:

Are you willing to spend a few cents a gallon more to avoid trudging several miles to get a better price at a different gas station in a different neighborhood? Do you do that regularly, or only when circumstances make you feel more reluctant than usual to have to drive around to get the best price?

This afternoon I have to traipse to the Mayo Clinic. At that time of day, it will be an hour’s drive each way: Two hours of doing battle on the cutthroat streets of Phoenix for the privilege of spending 15 minutes with my doctor in hopes that she can send me to the right specialist.

My car doesn’t have enough gas to get out to the far side of Scottsdale. And if you think prices at the local QT are exorbitant, you ain’t seen nuttin’ till you see how much a ritzy-titzy market like Scottsdale will bear. So I need to buy gas before heading out there.

Rationality suggests that I should drive down to the slum Costco that I normally habituate, because — given the emptiness of its customers’ pockets — that Costco sells the cheapest gas in town. While there, I could pick up the several items I need from that honored store.

This of course would require me not only to drive several miles in the opposite direction from the Mayo but also to get out of the car and walk across the parking lot, something I’m not fond of doing in that sketchy shopping center. The fewer trips I have to make there, the better: both because staying out of Costco means keeping more money in my own pocket and because it really isn’t the best of all possible shopping experiences.

Between here and the Mayo, only slightly out of my way, resides another Costco: a much more upscale Costco. They have more goods of the sort I covet, and one feels no need to pack heat while strolling from the car to the door. And… I have to get something for this weekend’s potluck. Lately I’ve found the Costco closest to me — the downscale Costco — rarely has anything very appealing. The last time I was there, they didn’t even have the standard Costco quinoa salad, to say nothing of decent bakery. Chances are good — very good, I’ll bet — that the Paradise Valley Costco will have a much better selection of bakery.

To be safe, I need to buy gas now; not drive all the way to the Mayo, halfway back, and another ten miles up to the fancy Costco and back.

There is a QT right around the corner. They extort stupefying amounts of money from their customers, because the station is on the only road that passes through the Dreamy Draw, carrying commuters from Moon Valley and points north down to their jobs in central and downtown Phoenix.

The Costco at Paradise Valley Mall also charges more for gas, because it’s conveniently close to Tatum Blvd, which bears commuters from North Phoenix and Scottsdale. But by the end of the day — around 5 p.m. — the lines will be out to the main drag, I will be tired and unhappy, and I surely will not feel like standing in line and pumping gas. And it’s questionable whether I can get all the way out to the Mayo and then up to that Costco on a quarter-tank of gas.

I’m thinking it may be worth the cost (four to eight cents a gallon) to fill up — or maybe partially fill up — at the nearby QT, so that I don’t have to drive down south to get gas now, nor take a chance that the amount in the tank will take me halfway to Payson and back with enough left over to get down to the cheaper Costco.

That way, I would have the option of not going to the nicer Costco on the way home from the doctor’s office (should one not happen to feel like shopping for anything by then), and I could be certain that the car wouldn’t run out of gas. And I wouldn’t have to pump gas late in the afternoon, when I will hate it even more than I normally hate it. Which is a lot.

So we have two choices:

  1. Drive to the dumpy Costco now, some miles south of the ‘hood and get gas for as much as eight cents a gallon less than it costs anywhere else.
  2. Whip around the corner to the overpriced QT, eat the gouge, and acquire at least enough gas to get to east Scottsdale and back…for a whole lot more than a fair price

I’m leaning toward the QT. The savings in time and aggravation would be worth paying a couple dollars more.

And that would be “convenience cost.”

$$$ and All: Clinging to Control

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Something there is about making a list to keep the onerou$ little ta$ks under control… That, of course, would mean the onerous bookkeeping tasks that, given the reins, you would ignore until the planet freezes over.

What’s about it is that there’s something ridiculously satisfying about checking off chores, one at a time, as DONE!

The mountain of money paper that comes into this house beggars belief (to say nothing of beggaring me).

  • Five bank accounts
  • Four investment accounts
  • Four health insurance policies (Medicare, Medigap, Part D, long-term care)
  • And bills coming from more directions than I can reckon

87 berjillion bills came in to make life a little more miserable this month:

  • Property tax: raised over $200
  • Car registration: almost $400
  • Painter’s bill: three thousand buckolas
  • $260 power bill: holy sh!t
  • $153 water bill: holy sh!!t
  • Gerardo: $120 for working himself and his underlings half to death…

So it goes.

You can see why I hate doing the bills.

On the other hand, paying off the loathèd car loan in a bull market was smart. Very, very smart. When times are good, my guys can crank the money (and yeah, they are guys: if there’s a lady financial manager among them, they’ve kept her hidden from me). After ponying up $3,000 for the painter and something over 16 grand to pay off that effing loan, total net worth is barely down a few thousand bucks.

How do they do that?

Oh well: I guess that’s what I pay them for.

So that was encouraging.

Also encouraging: I’d allowed about $800 for the Venza’s 2018 Arizona registration — really, registration rates here are just exorbitant. But not, as it develops, that exorbitant: the bill, which came this month with less than 30 days’ notice to pay up or be cited, was “only” $386. So that adds about $34 a month to this year’s budget allowance…nice. I guess. One meal out, anyway. 🙂

Next year the amount will be lower: Arizona’s registration bills drop as your car ages. Part and parcel of our bat-brained legislators’ astonishing stupidity: cars pollute more as they age, and so it would make sense to give people a break for buying newer, more fuel-efficient and less polluting vehicles and to whack them for hanging onto the stinking junkers. Here, we always go in the opposite direction of common sense.

So this is the most difficult of the set of tasks to do today. Others:

  • Clean pool, re-install Harvey the Hayward Pool Cleaner. Dive in after he breaks loose from his hose, rescue him from the bottom, reattach, fix, get him going again.
  • Haul trash to the alley. Pick up dog piles as part of this joy.
  • Finally get around to ensconcing the Blue Barrel in its new home, out of my way in the garage.
  • Organize completed client journals’ essays; confer with bidness partner on rest.
  • Call handyman to come rebuild patio roof.
  • Re-install dog safety pillows in back of car.

Now for a nap before having to spring back to life for choir rehearsal. And so, away…

Equifax Damage Control

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Topmost on the list of today’s chores: Call the accursed credit bureaus over the latest identity theft caper at Equifax. Fortunately, after previous exploits, I have phone numbers that go to humans.

Usually. Experian, first on the call list, has a special number to ask about the Equifax fiasco. They’re saying wait times are up to 30 minutes. And of course, they have loud, annoying Muzak to keep you alert and make your head hurt worse.

But in less than 30 minutes — by far — a living creature picked up the phone, one who sounded like she had a fair number of IQ points between the ears.

She said it’s an option to change one’s PIN, but clearly she had been coached not to dispense advice. But it seems pretty obvious that anyone who busted into your account is going to have your PIN and also will have all the information needed to change the PIN. So instead of adding that kind of hassle, possibly to no avail, I put a 90-day fraud alert on the account.

This seems to be the path of least resistance, for two reasons:

a) It means than ANY time anyone tries to create a new credit or bank account, you get a phone call to that effect; and
b) Experian shares the fraud warning with the other credit bureaus, meaning you don’t have to kill time in other punch-a-button phone mazes.

Since a fraud alert will let you know if anyone tries to use your information to acquire credit in your name, and since I already have a “freeze” on all my credit bureau accounts thanks to the vast Maricopa County Community College District hack, I think I’m going to let it go at that. Rather, I mean, than spending half the day navigating telephone punch-a-button mazes. It might be good to change bank account numbers again, but that is SUCH a huge hassle…it probably would be better to simply access credit union accounts online about once a week and check for any unauthorized transactions.

Understand: frequent bank account checks will have to become a permanent habit for everyone. Hackers know better than to use stolen information right away. They’ll often wait a year or more, by way of getting around various inconvenient alerts and hassles you’ve set up to foil them. Since these devices foil you, too, after awhile you’re likely to let them lapse.

The type of fraud alert that is shared among all three companies lasts only 90 days. You can get a seven-year fraud alert, but to do so you have to jump through hoops at all three companies, and you have to show that you’ve actually been a victim of an identity theft using your private information. Whether you can renew the 90-day thing or not, I cannot tell.

Another permanent habit: get used to filing your income tax returns at the earliest possible moment. One handy use for your stolen data is to file fraudulent tax returns in your name claiming large refunds — meaning you get no refund until you jump through hoop after hoop after migraine-building hoop to prove it wasn’t you.

Now…to find out how to sign on to a class action suit against those craven morons… Olson & Daines, an Oregon law firm, is already organizing one. You can go here to notify them that you’d like to join the class action. And if there’s ever been an event that demonstrates loud and clear why class action suits are valuable and should never be curtailed, this one is it. Equifax knew this hack was going on from May through July; they knew about it long enough for their top executives to get their money out of the firm’s stocks before the news hit the public media.

Without your permission, they collect data on you that is none of anyone’s business but yours — spying on you, really. Though this data, gathered in one place, renders you extremely vulnerable, they do nothing to encrypt it, and so naturally sooner or later some hacker steals it. Now you are screwed and the worst that happens to them is that their stock loses a few points…after their executives have pulled their money out.

With the government defanged — and if the right wing has anything to say about it, permanently enjoined from regulating business models like this — citizens have very little recourse other than through legal action.

Ain’t life in the 21st century grand?

Fun & Games with Equifax

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Amazing. A hundred and forty-three million people get all their private financial information stolen from Equifax, an organization that snoops into your business and accrues data about you without your permission — without encrypting said data. Adding to this latest entry in the Annals of the Floored and Flabbergasted, Equifax executives knew what was coming down the pike, so sold their stock in the company before the news hit the street.

So. If your personal information hasn’t already been stolen, chances are pretty good it’s gone now: 143 million is one in two Americans who may be a victim of this latest heist. What can you do?

You’re not helpless, interestingly enough: there are several strategies that will help protect against the effects of identity theft.

• Freeze your credit bureau accounts. You have to call all three credit bureaus to have each one apply a freeze. It ensures that no one — including you — can set up a new bank account, credit card, mortgage, or the like without your knowing about it.

This is probably the best move you can make. It does add some hassle to your life. Any time you want to take out a loan or open a new bank account, you have to un-freeze at least one account — usually Experian. This is made slightly less inconvenient by the fact that you can limit the period that it’s unfrozen, having it refreeze after x number of days. Which sounds good until you realize that you have no way of getting the people your dealing with off the dime: invariably, they don’t get around to asking for a credit report until after the un-frozen period ends.

• Monitor your credit card and bank account statements. You should be doing this anyway, but now that’s even more true. Check each statement promptly after it arrives for any transactions you don’t recognize, and if you suspect fraud, call the card issuer or bank immediately.

• Set up fraud monitoring on your accounts. Equifax proposes to give its victims a year of free fraud monitoring — conveniently, through its own subsidiary.

This is problematic. First, one year of monitoring ain’t much. If bad guys have your Social Security number, you don’t have a year-long problem: your problem is going to last the rest of your life. After that year, you’re going to have to pay for the privilege. And second, if you sign up for the service offered by Equifax, you have to give up your right to sue the bastards — or to be part of a class action suit.

There is some wrong-doing here: they knew about this on July 29, plenty of time for the higher-ups to unload stock. We proles didn’t learn that our personal data was on the way to the Dark Web until yesterday. So no: you do not want to forego your right to sue, and no: you do not want to agree to accept arbitration.

Paid identity fraud monitoring is probably unnecessary. You can accomplish the same thing for free or for very little by freezing your credit bureau accounts, keeping a sharp eye on your financial statements, and also checking the EOB (explanation of benefits) statements that come from your health insurer for any treatments you didn’t receive.

• For free, you can monitor your credit reports. By law, credit bureaus are required to give you one free credit report a year. Since three credit bureaus dominate the privacy-invasion landscape, you can arrange to stagger requests for reports, so that one comes in every four months, giving you a recurring view of activities reported to the credit bureaus.

The federal government has a free identity theft recovery program for people who believe they’ve been victimized. When you review the complicated, time-consuming steps required to respond to an attack on your identity, you realize exactly how serious this vast breach is. It is, in a word, a fiasco.

Here’s Why I’m Paying off a 2% Car Loan…

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...right now, without waiting.

And that is without taking into account any assessment of the clowns who have taken over the White House.

It’s easy enough to see that what goes up must come down. Capitalist economies have always been cyclical. That’s normal. But I think we’re looking at stupidity and foolhardiness that exceed normal, compounded by seditious collaboration with foreign parties who are not our friends, outright corruption, and the takeover of a national political party by ideologues who are so passionate they have taken leave of what little common sense and ethics they might once have had. Compounded, too, by a natural disaster from which this country will not soon recover.

The next economic crash is going to make the Great Recession look like…heh! A tea party. It may make the Great Depression look like a walk in the proverbial park, too. Many, many more of us are going to lose our jobs, and quite a few will never replace them — just as quite a few of us never replaced decently paying jobs and decent benefits after the Fall of the Bush Economy. You think we have a gig economy now? Wait’ll you see what’s coming up the road.

Most of what brought us the Great Recession is already back in place: and then some.

I believe we will see another major economic crash within the next three and a half years, if Trump stays in the White House through his first term. If he is impeached or if he resigns and is replaced with Mike Pence, that may slow things down a bit: then we can expect a major economic crash within the next seven and a half years.

This time, we can see it coming.

Anyone who lived through the Bush Recession would be a fool not to line things up and get prepared ASAP.

What to do to line things up?

• Number 1: Pay off debt, as fast as you can and to the extent that you can. Pay off the car loan, pay off the credit cards, pay off the mortgage if you can.

• Number 2: Do not assume any new debt! Do not buy a new car. Do not buy a new house. Certainly do not buy real estate at the present price point, which in many parts of the country is back in the “bubble” range. Do not charge anything on a credit card. If you can’t afford to pay for it in cash, don’t buy it.

• Number 3: Build a cash emergency fund. Build it as fast as you can. Pay yourself first by putting a set amount aside out of every paycheck. You should have enough in savings to cover at least six months’ worth of living expenses; preferably a year. Even better: two years’ worth.

• Number 4: Take care of routine health and dental care now, while you can afford it. If you are laid off your job, you’ll have about a snowball’s chance of getting health coverage that you can pay for.

• Number 5: Stock up on nonperishable food items. And while you’re at it…

• Number 6: Plant a vegetable garden.

• Number 7: Enhance your networking strategies. Join business groups and make yourself known to potential employers in your field. And while you’re at it, update your resume and keep it updated.

• Number 8: Start a side gig. Ideally, it should be one that could morph into a business that, combined with unemployment and a spouse’s income, can support you. Use the income from a side job to pay off debt and build cash savings.

Be prepared. If you’re not already prepared, better get that way soon…

Banner Image of the Day: Unemployed men outside a soup kitchen opened by Al Capone in Depression-era Chicago, Illinois, 1931. Public domain

How Can You Improve Your Credit Score?

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When your credit score isn’t where you want it to be, there are a couple of things that you can do about it. It is possible to repair bad credit, but it takes time. While there is no quick fix to repairing a damaged credit score, it is entirely possible to set up a credit management plan. Fly-by-night promises of repairing a credit score should be avoided. The best way to manage your credit is by behaving in a responsible fashion. Even before you can improve your score, it’s important to know what your credit score is.

This is your point of departure: check your credit reports at each of the three credit reporting agencies.

In the US, Federal law states that you are entitled to one free credit report from each agency per year. The three credit agencies include Equifax, TransUnion, and Experian. Once you know what your credit score is, you can take the necessary steps to correct it. When you have your credit report in hand, you should go through it with a fine-tooth comb to pick up on any anomalies, or inaccuracies. If you spot anything that is incorrect, report it immediately.

Making payments in a timely fashion is the first step toward repairing credit. Credit scores are calculated by adding up a number of factors. These include the percentage of available credit used (the lower the better), your payment history (consistent payments are best), the amount of new accounts you have opened up (the fewer the better), different types of credit available to you, and the length of your credit history (the longer the better).

Of all the factors that determine a credit score, your payment history is the most important. If you have a history of delinquency, start to make regular payments to avoid collections agencies from reporting you. Your FICO score will increase over time when you make regular payments. Many folks are unaware that they can contact creditors to work out more favourable repayment terms if it becomes difficult pay off a credit card. Credit counseling services will not adversely affect your credit score.

Should you open more accounts to improve your credit score or close unused accounts? When calculating credit scores, everything is done with ratios. Some people think that if you open additional lines of credit, you can increase your credit score by having a lower credit usage ratio. This could work against you. Much the same is true of closing unused lines of credit. FICO scores are carefully calculated, and intentional manipulation of ratios by opening/closing accounts will not always have the desired result.

The best way to manage debt is to pay it off. It is unwise to open multiple accounts at the same time, in the hopes of increasing your available lines of credit and boosting your credit score. Remember that the average age of your accounts will drop if you open multiple new accounts. This will cause your credit score to drop too.

Summary: Repairing Your Credit Score

Good credit scores allow you to enjoy favorable credit terms. Lenders often only consider one number when they are deciding about advancing a loan to you, and that’s your credit score. There are many advantages to a strong credit score, including lower interest rates, a high credit limit, being considered for top-paying positions, and being granted credit facilities for a mortgage or an automobile.

Since your credit score is comprised of five unique elements, it’s imperative to take the time to optimize each aspect of your credit score. You can check your credit score at any time, and it’s not much different to the credit scores that lenders will see when they run a search on you. Many banks and credit card companies offer complimentary credit reports to clients.

Banner image of the day: DepositPhotos, © ivelin