Tag: Personal Finance

The Receipt Conundrum

I’ve written about tracking personal expenses, and it really helps to have receipts when you pay in cash.  I use cash for most day to day purchases and I’ve discovered that most places will NOT give you a receipt when you pay in cash.  Which forces me to ASK for one so I can enter it into my expense tracker later.  I’m not quite sure why some businesses don’t give a receipt, maybe they are saving costs by not using the thermal receipt paper for cash paying customers.  A better answer may be this, what is being purchased is a consumable item and therefore a customer is not likely of returning said item, so no receipt.  Who knows.

Yet, when I go to a retailer that WANTS feedback (some really beg by giving longer and longer receipts), I get a receipt that is way longer than is needed.  Now, I do need the receipt for any potential item return purposes, but some of the length of these are crazy.  Who is really calling the 1-800 number or going to the website on these receipts?  I would guess that a very small fraction of people vs receipts given.  Another horrible practice is spreading the receipt vital data (stuff you need to keep for a return) among the survey/ads so you just can’t cut off the part you don’t need.

Also, some businesses sometimes think of receipts as advertising or up-selling (they likely get paid for it), then proceed to give you a receipt with a discount on a competitor item (never on the brand you purchased which can be annoying).  All this adds to the heft of the receipt or another piece of paper.

Lastly, when are the retailers ever going to get off the thermal paper receipt?  To me the thermal paper is delicate and any excessive heat or oil erases the information on the receipt (often I can’t find the date or amount when entering expenses after a week).  I don’t even know how bio-degradable the thermal paper is (something I need to learn).  Maybe it’s a strategy, if there is no receipt because the information disappeared (heat/oil/water), then retailers don’t have to worry about returns.

What happened to the days of a simple proof of purchase on regular paper?

– Dom

* Above photo is from herzogbr via Flickr:  http://www.flickr.com/photos/herzogbr / CC BY-NC-ND 2.0

Credit Card Fraud

Yesterday was a day of two firsts for me.

  1. I welcomed into this world my 1st daughter, a new bundle of joy to go with my two sons.
  2. My Discover credit card account was deactivated in the afternoon shortly after using the credit card to buy lunch.

I’m writing this post to inform users that they are not immune to credit card fraud, it can happen at any time and any place if you use your credit card for both in store purchases or internet purchases.

I also want you to know there are some steps you can take to HELP the credit card company identify when fraud occurs.  Most fraud that occurs is not your responsibility IF you notify the credit card company within a number of days when you recognize the charge.  For me, Discover knew enough about my habits that it detected the fraud for me.

In my particular case, yesterday, I paid for lunch with the credit card, then went to pay for dinner with the same card and was informed my card was “not denied” but that the transaction was not approved.  I used another card to pay for dinner.

When I got back to my computer, I tried logging on to the credit card website.  I could not, my log in was deactivated and I was directed to call a telephone number.  I also received a email telling me to call the credit card company, but did not receive a phone call or text.

When I called the number, it was to the credit card fraud department.  After a number of identity confirming questions, I was informed my account was deactivated due to suspected fraudulent charges.

I was then asked if I made a $600+ purchase at a major department store in Irving, TX.  I said no, I’ve been in NM all day and did not purchase anything from said department store.  I was asked about a second charge, if I made a $500+ purchase from a major home improvement store, again in Irving, TX.  I said no.  I mentioned the last couple charges I did make and a dinner I tried to pay for yesterday.  All charges were confirmed with an apology about the dinner.

I was then told my credit card was deactivated because of the two purchases, and that I will be receiving a new credit card and account number in the next 7 days.  We re-verified my physical address.  I’m glad Discover caught the fraud, but it means I have NO access to that credit line until I receive the new card and setup a new computer account.  Being that I have a new baby now, this is a minor inconvenience, but not as bad if I had to pay for the fraudulent purchases.

I inquired more about the charges, in particular I asked if the charges were made using a “magnetic swipe” or just the account number, name, address, and security code.  I asked so I could try and figure out where the source of my information came from.  I was informed that a “magnetic swipe” was used to make the purchases, which means someone went through the effort to make a physical duplicate credit card and possible ID to make the purchases.

I also don’t recall receiving any letters in the mail from a internet merchant indicating their systems were compromised and credit card numbers (along with addresses) were stolen, but I suspect this may have happened.  Companies are required by law to inform you if this is the case, but I’m sure most companies would try keep this quiet if they can.

I’d like to point out several things which I did to enable Discover to be proactive in disabling the account after fraud occurred:

  1. I used the credit card frequently enough for them to detect that I could not have possibly been in Irving, TX and Albuquerque, NM near the same time.  In addition, the types of purchases were not consistent with the location if I had been in TX (meaning why was there a major purchase at a home improvement store when I was away from home?).
  2. I setup and access my account on the credit card company website and check it often.
  3. I took the further steps of setting additional notification options, I selected to be informed of major purchases beyond $400 and to be notified by email of those major purchases.
  4. I use Quicken to manage my finances, and I check all accounts two times a week, so I would have noticed the fraud charges if Discover did not.  I’m really glad Discover caught this before I did.

Now that I have experienced a situation of credit card fraud, I am going to look into the following:

  1. Some credit cards, from their website, have the option to generate one time use (disposable) credit card numbers for internet purchases, although this can be a bit of a hassle for recurring charges, I plan on using disposable credit card numbers for internet purchases if it’s an option.
  2. When I traveled internationally, I told the credit card companies my travel plans (where I would be) and to possibly expect charges from those locations so I could use my line of credit while on travel.  I am going to ask the credit card companies if this can be done on a state by state basis.  I don’t want to make things overly complicated, but if I only travel in-frequently, it makes sense that “magnetic swipe” purchases be allowed outside my home state unless I explicitly say so.
  3. It was mentioned during the call that the credit reporting agencies would be informed of the changes (closed account and new one opened), I’m not sure of the impact of this on credit scores, but I’m going to investigate what the impact is.

Hope this writeup was useful, please comment if you have other experiences to add.

– Dom

* Above photo is from Stuart Dootson via Flickr:  http://www.flickr.com/photos/stuart-dootson/ / CC BY-NC-ND 2.0

Planet Money

Just a quick post to tell people about a National Public Radio (NPR) program that caught my ear over a year ago.  It’s called Planey Money and it has totally entertained, as well as, educated me on some of the current events in Finance and Economics.  I subscribe to the podcast and listen to the programs every week on my iPhone.  Here are some of the podcasts I found the most interesting:

Enjoy!

– Dom

Expense Tracking

Knowing what you spend is important to your personal financial health.  If you have looked at my Understanding your debt post you read about how I worked at getting my debt paid off using a spreadsheet to help me track the big picture on a month to month basis ultimately paying off credit card, car, & student loan debt.

At about the same time I created the spreadsheet, I started tracking very closely what I spent.  Back then I used a pencil and pocket sized pad of paper I carried with me.  As I paid cash for goods and services I wrote down the daily expenses as I incurred them and at the end of the day summarized the totals in a spreadsheet.  This was a very cumbersome and time consuming process.  There were times where I missed a expense because I did not get a receipt after paying cash (today I’m not sure why businesses don’t give you a receipt when you pay cash).

I looked around for a better solution back then (2004-5ish).  I did have a Palm Tungsten PDA, and found a expense tracker that helped me track and automatically sum expenses as I incurred them.  The only problem at the time, was I had a mobile phone and a PDA, carrying around 2 devices was problematic, I would at most times forget the PDA.

When the iPhone came out (I got the 2nd gen one), I realized this was device that allowed me to have software applications (expense tracking) along with the phone and a bunch of other future applications.  Yes, there was the Palm Treo, but for some reason I did not jump on that device at the time, maybe it was because I recently bought the Palm Tungsten and had a investment in it.  I moved to the iPhone with the expectation that a expense tracking application would soon be created based on a better user interface.

I now use my iPhone with a expense tracking application called iExpenseIt ($4.99 from the App Store).

I don’t use all the features of this software (like adding deposits and budgeting), all I use is the expense & reporting parts (the summary tables & pie charts are great).  I also only track cash & credit card purchases at the time I incur the expense.  I really like the feature to export a CSV file via WiFi or Email, this allows me to move the history to a spreadsheet for longer history retention.

What I have found, based on the data tracked, is that for my family of 4, we spend about the same amount on food from month to month.  If we eat more at home we spend more on groceries, if we eat out more we spend less on groceries.  By the way, eating will likely be your largest expense, it is for us.

I certainly wish I had a expense tracking application like this back in high school & college, it would have allowed me to understand where all my credit card debt came from (likely from a lot of pizza).  I may have had the opportunity to see my credit habits earlier and reign in my spending, something that took me so long to pay off.  My kids will certainly have expense tracking down by the time they hit high school.

I hope this post was useful and provides one example of what you can do to keep a grip on your personal financial situation.

– Dom

Understanding your debt

Today, I was cleaning up some old files in my archive and came across a Excel 2003 spreadsheet I had created years ago. The reason I created this spreadsheet was to get a big picture understanding of my whole debt situation and get it paid off. At the time, I had credit card debt, student loan debt, and a car loan. I’m making it freely available for anyone to use who has Excel or OpenOffice.org Calc (I’ve tested it, and it works).

This was back in 2003-2004. and I had finished grad school. Some of the classes we had were in finance and investments, understanding time value of money, corporate structure, and the stock markets. I was determined to be debt free and now had the understanding & motivation to do it. So I went to work on a excel spreadsheet that I could plug my debt numbers into to see how I progressed and when all this would be done.

I’m glad to say that I’m relatively debt free today (still got a mortgage), thanks in part to school and the spreadsheet that provided a easy feedback mechanism for seeing my overall progress.

I’ve listened to the personal finance people over the years and based on my experience it is best to pay off the debt with the lowest balance first. Most tell you to pay the highest interest rate first since it will ultimately save you more money. What I found is that paying the lowest balance first allows you to feel good about getting something paid off quickly, but more importantly you free up your time, energy, stress, and money that was devoted to that one bill. Thinking about one less bill is a huge load off the mind. This is why my strategy was to pay the lowest balance off first, then roll the previous payment to the next bill.

Ok, here are some details about the spreadsheet:

The changeable fields are in blue (the black are calculated fields, so are the other tabs in the spreadsheet), basically plug in the relevant info and the spreadsheet does the rest. It can handle payoffs up to 30 years which will allow for some most mortgages also. For the summation rows, a weighted average calculation is done to see big picture. For the date column, it lets you put in today’s date and the spreadsheet will tell you when this part will be paid off, this does not account for variable rates it assumes a fixed rate throughout the payment which is not too realistic since credit card rates change (loans generally do not). But, then again, you can update the spreadsheet as your rates change so you are constantly on top of your debt picture.  The way I used this, was to revisit the spreadsheet once a month when all the statements came in and adjust the values that changed, typically the date, balance, & APR.  It also allows the flexibility to add increased payments and see what the payoff results would be.  Lastly since all this information is local to my computer it stayed private.

Here is a quick video demo of the spreadsheet (best viewed at 720p fullscreen):

Here is the 20 entry 30 year Credit Card Loan Calculator spreadsheet for you to download: CCLC30YR20.xls

And if you don’t have Excel, here is where you can download OpenOffice Calc for free so you can use the spreadsheet.

I hope this is useful to others as it was useful to me. Enjoy.

– Dom

* The youtube video was created using Camtasia Studio 7 and a Plantronics .Audio 470 USB Stereo Headset.