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When Pinching Pennies Becomes Unethical
Tweet Share on Facebook February 12, 2008 Comment (6)For an upcoming article, I interviewed Alan Corey, author of A Million Bucks by 30: How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning 30. Corey tells quite an impressive story about racking up a million dollars in assets before his 30th birthday, which he did largely through smart real estate moves.
He emphasizes the often extreme ways he saves money, which include eating oodles of ramen noodles and taking advantage of free food at art gallery opening nights. I'm all for saving money, but some techniques struck me as, well, completely unethical. He says he reused the same popcorn bag for three months to get free refills, collected free cellphone minutes by claiming to have experienced dropped calls, and picked up umbrellas at lost and founds by claiming to have left his own behind.
Corey was happy to defend his use of such techniques. He says many restaurant owners want to get rid of the numerous umbrellas they have collected in their lost and found piles. He also says he would take the worst umbrella in the bunch and that he recommends returning it to the same or another lost and found. As for reusing the popcorn bag, he says the theater doesn't specify that the free refills are for only one showing. "I never felt like I was being secretive or deceiving, but creative," he says.
When I asked Patty Park, senior publicist for Random House, whether the publisher was endorsing such techniques, she said, "We're not saying his advice is for everyone...Readers are welcome to take or leave his tips as they wish," she says.
• Readers: Do Corey's techniques cross the line?
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My Experiment: Asking for a Better Deal
Tweet Share on Facebook February 11, 2008 Comment (10)If just asking a question could put money in your pocket, would you do it?
According to Linda Babcock and Sara Laschever, authors of the new book Ask For It: How Women Can Use the Power of Negotiation to Get What They Really Want, many women miss out on higher starting salaries, store savings, and other benefits because they fail to make simple requests.
The power of "asking for it," they say, can result in everyday lower prices, as well as a significant increase in lifetime earnings. In fact, Babcock recently told me that while she was out shopping for jewelry, she asked for a lower price and ended up making the purchase at a 20 percent discount.
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Credit Card Condoms?
Tweet Share on Facebook February 8, 2008 Comment (4)The idea is so disgusting that perhaps it will work: A new debt awareness campaign, sponsored by the Service Employees International Union and the League of Young Voters, compares "debt disease" to the sexually transmitted kind. The cure? Credit card condoms, of course. From the site:
Abstinence is the only surefire way to avoid catching Debt Disease. If you're concerned that you or your friends can't keep your credit card in your pocket, Credit Card Condoms could be helpful. Keep in mind: although Credit Card Condoms are 99.9% effective, they are only an aid for learning to live a debt-free lifestyle.
Debt disease is spreading quickly among college students, the campaign warns, and once you get it, you could have it for years. According to the site, 78 percent of college students have at least one credit card, and the average credit card debt for graduating seniors is $3,000. (You can see a U.S. News report on college debt trends here.)
To help get the word out, the campaign is holding a contest for the best public service announcement on the topic. The winner will get $5,000 for school expenses, and the video will be broadcast throughout the Internet. Sounds as though it could be viral.
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Seniors' Identity Theft Dilemma
Tweet Share on Facebook February 7, 2008 Comment (11)It sounds so simple: To help prevent identity theft, leave your Social Security card at home. That way, if your wallet gets stolen, the thief won't be able to set up accounts in your name.
That was the advice of Ed Farrell, associate director at Consumer Reports' National Research Center, when I interviewed him on camera recently.
But one astute reader, Sheri of Washington, took issue with that advice, because she says retirees with Medicare cards need to carry the cards with them in case of medical emergencies, and those cards contain Social Security numbers.
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Reader's Advice: Stop Buying Lattes
Tweet Share on Facebook February 6, 2008 Comment (9)When I suggested saving money by taking bubble baths instead of splurging on more expensive indulgences and hosting movie nights for friends instead of paying $10 for theater tickets, it unleashed a torrent of E-mails, many of which were critical about just how decadent Americans' spending habits have become.
"Since when did we become a society that needs common-sense advice spelled out for them?" wrote Stephen Johnson of Brandon, Miss. He says he and his wife own two cars, two motorcycles, and a home, all of which they pay for with their salaries, which adds up to around $5,500 a month, including his military pension and disability pay from his years in the Navy. He says they follow a basic rule: Live within their means.
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Dealing With Family, Friends, and Money
Tweet Share on Facebook February 5, 2008 Comment (9)If you've ever had a family member ask you for a loan or been asked to split the bill when all you got was a salad, then you are familiar with the awkwardness that can surround money and relationships. In Isn't It Their Turn to Pick Up the Check?, Jeanne Fleming and Leonard Schwarz offer strategies for dealing with the most cringe-inducing scenarios.
In addition to answering my questions below, Fleming and Schwarz offered to respond to readers' questions, which will be published in an upcoming Alpha Consumer post. As an extra incentive to share your own sticky situation, I will mail a copy of the book to the person who asks the most intriguing question. Send your questions to alphaconsumer@usnews.com or post them in the comments section below.
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Report: Online Dating's Bad for the Wallet
Tweet Share on Facebook February 4, 2008 Comment (2)Not only do you have to worry about your heart while making dates online, but now your wallet is at risk, too. The Better Business Bureau reports today that complaints about online dating services are on the rise.
The most common gripe? Poor matches. Consumers said they were set up with people who did not meet their criteria, including some who were already married or who smoked despite their request for a nonsmoker.
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The Art of Complaining
Tweet Share on Facebook February 2, 2008 Comment (11)Companies have over-charged me $1,100 during the past year. My health insurance provider rejected a $200 claim because it erroneously determined that I had visited an out-of-plan doctor. My flex spending administrator mistakenly said it would not pay for my $600 prescription eyeglasses. And my doctor performed an unnecessary diagnostic test, without asking or informing me, which landed a $300 bill in my mailbox.
Each year, millions of consumers are bombarded with these kinds of payment problems. One industry group estimates billing errors involving health insurance alone exceed $100 billion a year. It’s not just with healthcare. Consumers report that they often find mistakes on credit cards, cellphone bills, and government benefit checks. At the Social Security Administration, the inspector general found that between 1990 and 2006, over 90,000 Social Security recipients were underpaid a total of $120.4 million—some by as much as $25,000.
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Prevent Identity Theft
Tweet Share on Facebook February 1, 2008 Comment (4)At the Consumer Federation of America's conference this week, I spoke with Ed Farrell, associate director at Consumer Reports' National Research Center, about how to stop identity theft, and with Jean Ann Fox, director of financial services at CFA, about avoiding high-interest bank loans.
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Fight Poverty With Love
Tweet Share on Facebook February 1, 2008 Comment (2)A couple of interesting ideas have come into my in box over the past few days:
• James Q. Wilson, professor of public policy at Pepperdine University, argues that the next president of the United States should encourage marriage as a way of reducing poverty. "The new president should realize that poverty in the United States is primarily a problem confronting children and young unwed mothers," he writes. He says the Health and Human Services Department should launch a marriage-strengthening program. He doesn't mention anything about a government-run dating service.
• A new paper from Dan Black, professor at the University of Chicago's Harris School of Public Policy Studies (disclosure: my alma mater), to be published later this year in the Journal of Human Resources looks at the wage gap between well-educated men and women. Black found that, as a whole, well-educated women earn about 30 percent less than their male counterparts. But when looking only at men and women who speak English at home, a significant chunk (between 44 and 73 percent) of the wage gap can be explained by age, education, and major. When looking only at women with work experience similar to their male counterparts, the gap disappears even more.
But Black warns against jumping to the conclusion that wage discrimination has all but disappeared among the well educated. It's possible, for example, that women select fields that pay less because they expect discrimination in their original, higher-paying choices.
