Every month I’m going to start compiling all the cool personal finance links I find so I can share it with you all on the last day of each and every month. I’m going to do it much like Charles Kirk (thekirkreport.com) does his almost daily links, but add a little more commentary. (this month will be short since I only thought to do it recently, and next month will be short because we’ll be on our honeymoon for the first half of the month)

• The new $5 bill has all this crazy anti-counterfeit goodness!
• Check out this awesome interactive stock market history graph from Fortune.
• Reader’s Digest estimates that the government wastes $1 trillion each year and wants the same transparency of the government as we expect from private companies. I like it.
• Shhhh! Don’t tell anyone else but banks have been secretly borrowing billions from the Fed. Shhhh it’s a secret!
• Stanford will be tuition-free for students whose families earn under $100,000 annually. Room and board will be free if they earn under $60,000 annually, this is amazing.
• I’ve been reading a lot of freelancer blogs lately and this post about youth and entrepreneurship by Jarkko Laine is great. “The school system had taught me to get a job rather than build jobs.” Challenge your thinking and what you’re doing to see if you are on the right path for you or the right path for someone else. For many, high school prepared them for college and college prepared them for a job… but that may not be the right path for you.
• Great transcript of a recent Q&A with Warren Buffett at Emory and UT Austin. Great gems in there about a lot of things, including diversification, index funds, etc.
• This is unrelated to personal finance but still great, it’s 100 photographs that changed the world and starts off with a picture of Anne Frank.

That’s it for this month!

Reading this brief post on Alpha Consumer on money etiquette brought on a thought about a weekend several weeks ago with a bunch of friends. I spent part of Saturday afternoon at a local Baltimore bar called Lime drinking some margaritas with some of my friends, BS’ing about the week, and drinking some more margaritas. (That place has this thing called a Birdbath, three margaritas in one huge cup/bowl for $13… can’t beat it) Anyway, several hours later we go to split up the check and somehow the bill is short. Short by a lot. We eventually figured out that it was just that someone had left and misjudged their part of the bill and everything was settled later on, but it got me thinking about how splitting checks always seems to end badly 9 out of 10 times.

I’m a fan of splitting checks evenly as long as it’s reasonably equitable. If one person gets a rack of lamb and a bottle wine while another person gets a grilled cheese sandwich, then splitting the check evenly just isn’t going to be fair. However, in cases where it’s hard to gauge who got what (like at bars, which are exasperated by a larger crowd), I think splitting it evenly just makes it easier to take care of. Ultimately, if the difference is a few bucks, I would argue that most people are okay with overpaying a few dollars.

However, you almost never have the case where the inequity is so apparent. If there are two people and one person gets lamb and another gets a grilled cheese, I would hope the person with the rack of lamb wouldn’t be so obtuse that they would ask to split the check 50-50 (if they are, I recommend never eating with them because they obviously suck). It’s always something a little grayer, like 10 people and everyone is about the same and 1 person got there late (or something like that). In those cases, I think it’s fair for that one person to pipe up and say “Hey guys, I got here later and I only had one margarita, I think that should run me only about $x.xx.” Hopefully no one is looking for a free ride, it’s just a matter of simplicity.

What’s your take on this sticky wicket? Is the onus on the person who should pay less or on the person who obviously got the more expensive drink or meal? A little of both? I realize it’s one of those gray area type questions with no real answer but I’m curious what all of you think.

(Photo by tiny goat)

Pay day loan shops (and cash checking and other similar short term loan shops) are often singled out as places that prey on consumers in a tight spot. While I don’t dispute that, I want to point out other places that also prey on consumers in a tight spot that don’t often get the spotlight.

Pay Day Loans Are Bad

Don’t get me wrong, pay day loans are horrible products for consumers because of their high fees, high interest rates, and their propensity to become financial sinkholes. It’s the financial version of someone going in for a routine cavity filling and coming out with a lobotomy. You just need a little extra help to get you to the next pay day but end up paying for years. According to this warning by the FTC, they give an example in which “the cost of the initial loan is a $15 finance charge and 391 percent APR. If you roll-over the loan three times [42 calendar days], the finance charge would climb to $60 to borrow $100.” $15 to start and 391% APR is horrible but let’s compare to some of these other products.

Refund Anticipation Loans

Refund anticipation loans, tax rebate loans, assisted refund loans, etc. are horrible horrible, don’t ever get a refund anticipation loan. These products are often highlighted as preying on consumers but I felt they should be mentioned anyway. Given the fervor over pay day loans, you’d think a loan with a $30 activation fee, $20 check processing fee, and a 36% APR would get a little more heat than it does. $50 to start plus 36% APR on funds that are guaranteed (if the tax preparer does their job right) by the IRS… seems a little rougher than the pay day loans, which are loans on funds that are not guaranteed.

Bank Fees

According to Bankrate’s 2007 bank study, bank fees are on the rise. Big time. A bounced check will cost you $28.23, average ATM surcharge will run you $1.78, and the average monthly service fee on a checking account was $11.72 (don’t ever pay a fee for a checking account). You’d think that they were lending you money given those fee values! I can understand the headache of a bounced check but let’s get real here, bounced checks never come alone. In fact, considering banks withdraw the largest amounts first, you’re more likely to see multiple bounces than a single bounce.

Credit Card Fees

Again, credit card companies have come under heat too but it still bears highlighting that they’re practices are closer to pay day loans than they are to the Fed. If you make your payment late, most places will charge you somewhere between $20 and $30, with the bias towards $30. Interest rates? High, plus companies have been mailing out letters notifying people that their rates have gone up for no reason. I’ll leave it at that since the credit card industry does take a lot of heat for their practices.

So as you can see, pay day loans are horrible but there are a lot of other horrible and more mainstream products out there that simply don’t get the same exposure. Bouncing a check is like missing a payment which is like taking out a pay day loan, in terms of cost, but at least with a pay day loan you get something out of it (a horrible horrible loan!).

Right now we’re sitting on a two hour layover in Oakland, CA on our way to Hawaii for our honeymoon. Our trip thus far has taken us through Kansas City on Southwest and we were reminded once again why Southwest is easily my favorite airline. We were the only two people on the flight from Baltimore to Kansas City that would continue on to Oakland and we arrived ten minutes early so we had some time to chat with the flight crew. They asked us where we were going and my wife said we were flying onto Honolulu for our honeymoon. They said their congratulations and we thanked them, everyone smiling all around, and we thought nothing of it. A new flight crew came on board to help the first flight crew clean up and then we were on our way. About five minutes before we were to land in Oakland, the a member of the flight crew came on the PA and said “We wanted to congratulate two of our passengers who recently got married, everyone please give them a round of applause!” There was clapping all around, some more congratulations, and then one of the crew walked over and gave us a bottle of Korbel champagne!

Before you cynics out there chalk it up to something devious, you have to know one thing… you can’t actually buy champagne on board. This wasn’t someone just grabbing one of a million bottles and handing it to us in a nice gesture, this was far more than that. One of the Baltimore-to-Kansas City flight attendants had to have picked it up and passed it onto the new flight crew. That’s some serious customer service, I have never heard of anything like that.

So, in addition to fares that can’t be beat, a speedy seating policy (some might call it herding but I have absolutely no problem with it, you can’t expect great fares and to be coddled), great flight crew attitudes and company personality, you can add on a personal touch that you can’t get from many airlines, budget or otherwise.

So Southwest, that’s why we LUV’d you before and why we will continue to LUV you. And if there’s an executive out there, the crews were the ones on Flight 1945 out of Baltimore at 1:05PM and the crew on the continuation leg from Kansas City to Oakland, they deserve some serious kudos. Thanks!

(As a testament to technology, I’m writing about this from the Oakland terminal… the above said act just happened about an hour ago)

There was once a time when a handshake and a person’s word were all that was needed to formulate an agreement. If promises were broken, the only recourse was through thoughtful deliberation and six shooter. Okay, I’m just romanticizing the Wild West but I do think the point still holds true. Nowadays you see contracts here, signed documents there, notarize this page and initial there. When push comes to shove, contracts are scrutinized every which way and even English grammar comes under fire. However, when all is said and done, it ultimately comes back to building relationships, reaching an understanding and then putting it on paper.

When a friend rented out a part of their home to friend, he required the renter to sign a lease. I was a little surprised. Did he not trust the renter? I was naive and thought it was a matter of trust. However, looking back, I’ve realized it wasn’t about trust, it was about reaching an agreement. The contract was there to solidify the terms of their agreement, likely negotiated over a few emails and finalized over some beers, and act as a historical record in case there were any disputes. It wasn’t there to “force” someone into terms.

If it’s in writing, you can study it and ensure it’s accurate. While you can’t ensure completeness, you can at least be sure that whatever is written down (and agreed to) is true and accurate to the best of your knowledge. Maybe there was some miscommunication or some misunderstanding, that can be clarified once the agreement is put in writing and both sides can review it.

Unless you have a photographic mind and everyone believes your memory to such, you can’t remember the exact terms of something you agreed to a year ago (or five, or ten). Let’s be honest, do you remember the exact terms of any of your leases? You probably remember how much rent was, when it was due, how much your security deposit was, and what you needed to do to get it back. Was it due the 5th of the month or the 6th? Don’t remember? That’s okay, that’s what the lease is for! You can’t remember everything and you can’t trust your memory to be 100% every single moment. You also can’t force the other party to trust that you remember everything. If you have it down on paper, you’re far better off.

Unless you use an attorney to draft up your contract, any attorney will be able to find a way to nullify your agreement. I have no background in law, I only know a handful of lawyers, but I believe that any personally crafted legal document is probably not going to stand up against the carefully scrutiny of a trained lawyer. That being said, unless you’re willing to hire an attorney on retainer to review every agreement you make, it’s more important that you build up the relationship that is clarified by a contract instead of relying on a contract to force a relationship. Also, unless you’re willing to hire an attorney to tear apart an agreement you made, you need to stress the relationship and not the sheet(s) of paper.

Contracts don’t exist in a vacuum and people have long memories and big mouths. Let’s say you screw and swindle your way out of a contract because the language was ambiguous, people will remember that and likely tell other people. If you promised to pay someone $50 and renege, people will remember for a long long time. It may not manifest itself verbally but you can bet anything that it will manifest itself on some form or another.

Build the relationship, clarify with a contract, but leave the lawyers out of it. I want to leave on this note: The contract isn’t about trust and shouldn’t be about trust, it should be about the relationship and clarifying an agreement. If you don’t trust the other party, don’t bother with a contract unless you are willing to hire yourself a lawyer and they sure would love that!

(Photo by [phil h])

As many of you know, I recently got married to the love of my life (awwww!) and had a wonderful wedding and reception this past weekend. Everyone had a blast, we had a blast, and all in all I think the entire weekend went very very well considering the magnitude (both in size and importance!). Anyway, with a wedding comes gifts and some gave a gift in the form of a check.

Why is this worth mentioning? As you can probably tell from the title, the tricky part was in the fact that the checks were made out to my name and my wife’s name. That, in and of itself, is not big deal except they put it in my wife’s new (and, dare I say, better) name, which is not the name on our joint account. So, in the eyes of both the state and the bank, one of the person’s listed on the “Pay To The Order Of” line doesn’t actually exist. So, what were we to do? There are in fact two solutions.

Change Account Name

One solution is to change her name from her maiden name to her new (better) name and all we need for that is the marriage certificate. With the account name changed, she would simply sign the back of the checks in her new name and be done with it.

Double Endorse The Check

The other, far easier, solution would be for her to sign the check twice: first with her new name (name on the check), then with her old name (name on the account). While this struck me as a bit shady, it seemed to be the typical result. If the two names were in fact two different people, this is how we would’ve signed the checks to deposit them into the account. When she signed her new name, she was endorsing the check for deposit anywhere (you can write, “For Deposit Only” on the check to force it into an account your name only). It seemed tricky but the Bank of America tellers (two at two different branches) seemed to think that was business as usual and an accepted practice. Either way, no one will be disputing the deposits so it’s no big deal either way.

After those shenanigans, I needed to sign the check in order to deposit it. If a check has two names (with an “and” between them, rather than an “or”), both have to endorse the check before it can be cashed, deposited, etc.

I have an interesting “ethical” question for you all, especially given the fervor over the Costco return policy.

I recently purchased an Epson Home Cinema Projector that came with a $300 rebate and a free bulb rebate (worth nearly as much). One of the quirks about the rebate was that you had to mail it within thirty days, rather than the typical static time limit that was ignorant of when you purchased. As you can imagine, what happened was I got all excited with the projector and forgot to mail the rebate within the 30 day limit. I did exactly what the manufacturer wanted, I purchased the project at the “list price minus the rebate amount” in my mind but I actually paid full price. It’s been a while since I’ve made a $300 mistake like that, one that could be chalked up to carelessness and laziness rather than circumstances that were less within my control.

My solution to this was something that some may find unethical (or at least gray) but I didn’t see a problem with it. I purchased another Epson projector and then submitted that receipt with the other documentation (UPC code, serial number) so that I’d be compliant and the rebate was approved. The only cost to me was shipping the second project back via UPS Insured; it set me back around $60. All in all, the added hassle netted me $240 and a free bulb.

While I feel that was certainly in the gray area (submitting a receipt that didn’t technically match the UPC), I personally found that to be on the good side of the ethical line. I returned the project in exactly the same condition that it was sent to me and Amazon wasn’t out anything (maybe shipping fees) and I received a rebate I was rightfully entitled to (I did buy the projector, I just missed the 30 day window by a few days). And I was certainly on the good side if you consider how quickly rebate fulfillment companies are to screw the consumer at every opportunity!

What do you think?