Remember when someone actually needed to have your card before they could steal your data? With RFID, or radio frequency identification, all they need to be is near your card, with an $8 RFID reader, to get your information now! If you watch this episode of boing boing TV, you can watch as an $8 reader pulls your card’s details from you without actually having your card. What can you get? Card name, cardholder’s name, and expiration date (probably more, you can transmit about 2 kB of data) - or essentially everything off the face of your card.

If you remember back to physics class, electricity and magnetism are inter-related. A magnetic field around a conductive material will generate an electric charge. If you want to get real nostalgic, remember the right hand rule? Anyway, RFID works off that principle. The reader sends out a magnetic signal that generates a current in the RFID chip. The current powers the chip and gets it to send out a signal that the reader will detect. The signal is encrypted, that’s not the problem, the problem is that it can be decrypted by the reader, a reader you can buy for $8. The security flaw has nothing to do with RFID technology, the failure is in the implementation by the credit card industry.

The technology expert in the clip, Pablos Holman, does point this out by saying the decryption should happen back at a secure location rather than at the point of sale and I suspect this is a cost cutting measure on the credit card industry’s part. By decrypting at the POS, they get to reuse their systems (i.e. use RFID on the cheap) as-is rather than building a mechanism for decrypting the data somewhere down the data stream. I’m 99.9% sure that someone in the entire industry has thought of the scenario in which someone buys an $8 reader and starts stealing data but it’s cheaper to fix the fraud than develop a better system.

As to the concerns that you could walk into a Starbucks and steal everyone’s data with a reader augmented with a powerful antennae, that’s not 100% accurate because an RFID tag has a read range based on its frequency. Smart cards are said to use high-frequency tags, which have a read range of 3′ or less. So while you could activate every card in the room, you’d have to wander within 3′ of everyone (still easy, just not as easy as turning it on and standing there) to grab the data.

If you want to learn more about RFID, check out the Association for Automatic Identification and Mobility’s FAQ on RFID.

One of the tricky things about being “recently married” is that the missus was in name limbo. “Technically,” she’s my wife with my last name (that’s right!). “Legally,” she still retains her maiden name until she goes to the Social Security Administration to change her SS card name and the DMV or MVA to change her license name. So what happens when we get a check written out to her new name? Trickiness! Headaches! But not to fret, I’ll try to capture everything we’ve done so that it can be as painless as possible for all you newlyweds out there.

First, just to cover the check situation, she just needed to sign her new name (what the check was made out to) followed by her former name (the name on the account), to deposit the check. In reality, unless the issuer contests it, chances are anything reasonable would’ve worked.

Now, onto the name changes…

Marriage License

This is the linchpin of the whole name changing operation. Everything requires this and no names can be changed without the signed marriage license or certificate. The fact that it’s been issued is proof enough that the state recognizes the marriage and the signature is proof that the marriage went through, the document was never notarized, as is required of many legal documents, but having a notary there probably would’ve killed the mood.

Driver’s License

You’ll need to go to the DMV/MVA (whatever the place is called in your state) to make this name change request. In Maryland, you’ll need to go to a full service location with your marriage certificate and current license. Like every other trip to the DMV/MVA, I’d budget a healthy few hours and a few dollars to take care of this but somehow my wife was able to get in and out on a Tuesday morning in about half an hour (they run two different queues and the driver’s license queue was ridiculously short that day). The great thing about this step is that you are immediately issued a new license, there’s no need to wait around for one to be mailed to you.

Social Security Card

Changing your name on a Social Security Card is a bit trickier and the Social Security Administration provides this guidance, which is essentially you need to fill out a new application. You can mail in the application with the original or certified copies support documentation (proof of citizenship, legal name change, and proof of identity), but I would just go into an office rather than risking the mail. One gotcha here is that you need to bring proof of your old name too, so an expired Passport will do nicely.

Your Company HR

This step is crucial after you change your name with Social Security because your employer will be reporting Social Security payments. Depending on your company, this could be a pain or this could be a cinch. Either way, contact HR about changing your name and you will need, at most, the same documents you used for Social Security.

Passport

If your passport was issued within a year of the marriage, you’ll need to fill out a Name Change, Data Correction, and Limited Passport Book Replacement Form: DS-5504 and send it in with two Passport photos, a certified copy of your marriage certificate, and your old passport (and $60 if you want expedited service). If it was more than a year, you’ll unfortunately need to apply for a totally new Passport with Form DS-82 (and pay $60).

Online Accounts

Strangely enough, changing your name on online accounts turns out to be a bigger PITA than anything. For example, we are both members of Southwest’s Rapid Rewards Frequent Flyer program and for her to change her name, she needs to send the request in writing along with a photocopy of the marriage certificate and her driver’s license. At first I thought, “why the hassle?” until I realized it was all in the name of security, and rightfully so. I recommend starting this process as soon as you get the driver’s license because the processing time could be a few weeks.

After the wedding, I started taking a closer look at the tax numbers and incorrectly concluded that the only time someone would ever file as “married filing separately” would be if one partner earned a whole lot and one partner earned not as much. The logic was that the lower earner wouldn’t be subject to the same tax rates as the higher earner and thus the difference would overcome the different tax brackets. The only correct assumption I made was that the lower earner wouldn’t lose access to any tax advantaged accounts, like Roth IRAs, because they’d still be over the limits for those types of accounts. I already gave out my hypothesis and my result (I was wrong and am now clueless as to why anyone would file separately if both options were available) but here’s what I did.

Hypothesis: Married Filing Separately shares more of the lower tax brackets as Single filers but you lose practically all of the favorable tax benefits that Single filers enjoy. The benefit of filing separately is if you have a significant disparity in income with the sum total above many of the tax beneficial limits. (this hypothesis is proven wrong)

2008 Tax Brackets

(taken and amended from my 2008 tax bracket post)

Three Scenarios

What happens with a couple earning $100,000 with one earner taking in $80,000 and one earner taking in $20,000?

• Married Filing Jointly: $17,687.50
• Married Filing Separately: $16,772 + $2,197.5 = $18,969.50 (correction)

That’s a difference of $2,802.50 but both individuals lose access to a Roth IRA (among other significant benefits).

What about a couple earning $200,000 with one earner banking $120,000 and one banking $80,000 would pay (this doesn’t take into account deductions):

• Married Filing Jointly: $44,744
• Married Filing Separately: $28,964.50 + $16,772 = $45,736.50

What!? It’s more to file separately… maybe the disparity has to be greater. What if a couple earned $400,000 with one earner banking $320,000 and one banking $80,000?

• Married Filing Jointly: $58,787
• Married Filing Separately: $49,402.5 + $16,772 = $66,174.5

Two Potential Reasons to File Separately

So, I tried to do more research and discovered this great About.com article and according to William Perez, filing separately makes sense in two basic scenarios:

1. “Filing separate returns makes the most sense when one spouse owes a significant amount of money, but the other spouse could get a refund.”
2. “It also makes sense when one spouse is cheating on their taxes, and the other spouse doesn’t want to be involved.” (Nice!)

Let’s ignore scenario #2 because anyone who lets someone else knowingly cheat on taxes doesn’t really need to worry about their tax bill, they have bigger issues. With scenario 1, you have to be in such a small window, for both earners, such that the lower earner’s deductions will save them more than the higher earner loses by filing separately (as evidenced by our 80/20 example above). The 25% tax bracket starts at $32,550 for married filing separately but starts at $65,100 for married filing together! I suppose the numbers have to be in that range for this to make sense… but then you start giving up great benefits such as a Roth IRA, which is available if your total AGI is less than $156,000 when you file jointly but only $10,000 when you file separately! (plus, I don’t know if I’d classify someone earning $80,000 as someone who would owe a “significant amount of money,” hence my 120/80 and 320/80 examples)

Plus, if you read the article some more, there are so many headaches involved in filing separately (both have to take itemized or both take standard, state taxes are a pain in many states, etc.) that I can’t even imagine the strangely specific scenario in which filing separately truly makes both financial and psychological sense.

Why would you file separately if you could file jointly?

Hat tip to Ryan Waggoner for providing this Quicken post with some solid reasons for married filing jointly, the main financial reason happens to be in the blind spot of my analysis, itemized deductions.

If you read any other personal finance blogs, you probably have seen a lot of posts about this new type of savings called SmartyPig, run by West Bank. [Consumerism Commentary, Moolanomy, and Wise Bread, just to name a few] They bill themselves as a different kind of bank account and they’re sporting a pretty healthy 4.30% APY savings account, until you realize that they’re charging you some ridiculous fees!

Here are the fees from their Terms & Conditions:

Contributing funds to a public account via ACH, Electronic Check and Credit/Debit Card, a $4.95 processing fee per contribution will be charged to the purchaser.

Purchasing a physical or electronic gift card via ACH, Electronic Check and Credit/Debit Card, a $4.95 processing fee per card will be charged to the purchaser.

Unsuccessful attempt of transfer of funds, $25.00 per occurrence will be charged and debited to the customers ACH bank account.

Replacement of a lost, stolen or discarded SmartyPig MasterCard® Debit Card is $20.

Requesting funds on a check in lieu of placing funds from a Savings Goal on the SmartyPig MasterCard® Debit Card or Retail Gift Card will incur a $25 processing fee. To complete this transaction, the Primary Account Holder must contact SmartyPig Customer Support. Not available to minors. Waived when required by law.

Overdrawn accounts will be charged a $27 fee per overdrawn item

I’m not going to rehash the point and purpose behind SmartyPig, for that you can hit up one of the posts above, but to the untrained it eye it sounds a whole lot like you’re paying a lot for the opportunity ($5 each time someone contributes, how does that motivate saving?) to help someone save. Not only that, but the end product isn’t even an ACH deposit into the saver’s account, it’s a debit or gift card (minus $4.95)! (if you want an ACH transfer of funds, that’s $25 please)

This seems like a raw deal, is anyone else seeing this differently? (though do enter those contests for a free $100)

An article in LifeScience says that the key to happiness is to spend your money on others. It could be charitable donations to a worthy cause of choice or it could be buying gifts for friends and family members, but the warm and fuzzies lasted much longer if you spent the money on others than if you spent it on yourself. “New research reveals that when individuals dole out money for gifts for friends or charitable donations, they get a boost in happiness while those who spend on themselves get no such cheery lift.”

One of the teams involved in the experiments theorized why this was the case and had a few decent theories. One theory, one that I thought made the most sense, was that people spend a lot of money to make their lives seem more “meaningful, significant, and important,” and that giving away money is a much more effective way of doing that. If you impact someone else’s life in a positive way, that certainly gives you more meaning, significance, and importance than you did if you spent it on yourself.

What’s funny is that I said something similar my wife while we were on our honeymoon. I mentioned that it’s much easier for me to spend money on other people, such as gifts on her (which she smiled at and then hit me), than it is to spend on myself. If I want to buy a new bicycle, for example, I’ll spend way too long researching different bicycles, comparison shopping, and price searching before I’ll pull the trigger (I’m still “researching,” it’s been nearly a year).

Part of the reason is because I want a good deal but I also have to get over the fact that I’m buying something selfish that I could save for the future, either for my retirement, my future children, etc. However, last year we donated money to charity last year in relative blink of an eye (there was some research on Charity Navigator) and I attribute that to the lack of the “selfish” hurdle (the tax deduction helps too). Of course, the happiness (and heart-wrench, if that’s a word) from receiving letters from organizations like Operation Smile (it’s a charity my mom told me about and supports) and the kids that have benefited from its work do help as well.

As an extension of this, I bet that the same happiness effect would apply if you spent time volunteering rather than working on a particular day (or weekend). It’s not as quick as spending money, but perhaps the happiness effect would be more pronounced. Either way, the lessons seems to be that if you want to make your life a little brighter for a little longer, do something philanthropic today. You can always get that bicycle tomorrow (or the next day, or the next day).

I have a fantastically cheap and proven technique for you to cut your gasoline consumption and bill by 20%. That’s right folks, step right up and hear about how you can cut that bill one one-fifth! It sounds unbelievable but it doesn’t involve buying any gadget that you attach to your car or an additive that you’ll need to put into the fuel, it’s a time tested technique that I can guarantee will cut your gasoline bill by nearly 20%. You won’t even have to buy anything from some late night infomercial… do you know what I’m talking about? I’m talking about carpooling.

Before you run for the door or click to another site, consider this - if you carpool to work just one day a week, you can cut your gasoline consumption by one-fifth. On the day that you’re driving, you’ll probably use up a little more gasoline than your normal commute because you’ll need to pick someone up and the amount of weight your car is carrying has increased, but that’s in the noise… you’re saving tangible money here!

The point is that you don’t need to carpool every. single. day. Just one single solitary day of minor inconvenience. For me, I have class on Monday and Thursday night which means either my prospective carpool compatriots will need to conform to my schedule or I drive myself those days. Tuesdays and Wednesdays are wide open. I could easily carpool on those days as my schedule is more flexible. What about people who need to pick up kids after school around 2 or 3 pm? They just need to find other people at their office that can leave around 2 or 3 pm, or they work out their schedules in other ways. Ultimately, it’s about how much hassle are you willing to take on in order to save money on gas (you can calculate your savings if you know how much each mile costs to drive).

If you find several people at work who are willing to carpool, you leverage your one drive into multiple trips. You pick up two other people and now you’re talking about cutting your bill by 40%. Pick up three, now maybe you’re talking 60% of your gas bill erased in one fell swoop. But for now, try it just one day. One day a week or one day every other week, see how it integrates with your schedule and you might be pleasantly surprised.

Carpool just one day. Just one.

A few years ago, with my last car, I did a little calculation to help determine the “cost per mile.” I was doing quite a bit of driving back and forth from Baltimore to Pittsburgh, then Baltimore to New Jersey, to visit my girlfriend (now by wife, so I suppose it was worth it :)) and so this number was important for me to know. I also found that it helped make other decisions in my life easier because it gave me a very tangible cost associated with driving somewhere, such as to the gas station across town instead of the gas station on my route home.

The Calculation

The cost per mile can be broken up into three major categories and one catch-all:

• Gas: Clearly the dominant value in the calculation, gasoline is something that has to be based on actual costs rather than estimated costs. You can’t take the cost of gasoline, the EPA value for your car’s mileage, and figure out based on that. Ignoring the inaccuracy of EPA values, though they’ve made a push to make them more accurate, your car is probably not the standard car. You have crap in your trunk, your tires are probably not inflated perfectly every single drive, and your maintenance isn’t going to be perfect (get that 30,000 mile checkup exactly at 30,000 miles?). So, keep a log for five fill-ups, reset your B trip odometer, and calculate your gas cost per mile that way.
• Insurance: This value is easy, simply take your premium and divide by the number of miles you drive in a given year. The “rule of thumb” is around 15,000 miles a year, but if you have an especially long commute then you can increase that. You can always just throw in a guesstimate because what you use as your miles driven per year isn’t going to drastically affect this number. For example, if you pay $2,000 a year and you drive 15,000 miles, that’s 13.3 cents a mile. At 20,000 miles a year, it’s 10 cents a mile. Sure the difference is 33% but you’ll ultimately use this value for trips in the tens or hundreds of miles… meaning a difference of only 30 cents - $3.
• Tires: Depending on how expensive your tires are, you might want to go through with this calculation or just consider it part of the noise. I know tires say they can last 30,000 miles, but I believe most of my tires run only maybe 20,000 miles. Either way, this math should be pretty simple. Divide the cost of the tires by the mileage and add it to the running total you’ve been using.
• Everything Else: I always throw in an extra 3-5 cents to cover everything else, from windshield wiper blades to routine maintenance to oil changes. I figure that a $20 oil change put across 3,000 miles (I actually changed my own oil with synthetic but do it once every 10,000 miles) is small enough to be considered noise in the equation so I use the 3-5 cents catch-all value.

So, what’s the final number? The IRS business mileage deduction is 50.5 cents a mile, how close was your value to this one? When I did this calculation a few years ago, I found my value was close to the mileage deduction back then (it was 40-something cents) but that was before the spike in fuel prices. For comparison’s sake, my value for gasoline back then was 7 cents a mile based on a car that was running around ~32 miles to the gallon (Acura Integra and I was doing a significant amount of highway driving).

How do you use this number? Let’s say it’s 280 miles between my home in Maryland and my parent’s in New York. The tolls between Maryland and New York, I believe, are around $60 a round trip. Given the cost of fuel alone (7 cents a mile), the cost of the trip is over $100 compared to the cost of a Southwest flight that can be bought for $39 a round trip. So, driving alone would cost over a hundred dollars and nearly 5 hours - flying would cost ~$100 and 3 hours… it’s a no brainer and the math is facilitated by knowing the cost per mile.

Finally, your car’s cost per mile is only part of the story. In my drives to Pittsburgh or to New Jersey, tolls played an important role and often threw the entire equation out of whack. Back then, the toll for the Pennsylvania Turnpike was around $8 a round trip and nearly $50 a round trip to New Jersey. Another factor was time. I could take a $15 Chinatown bus from Baltimore to Grand Central in NYC, then jump on an Amtrak train out to New Jersey… but it would take me like 15 hours to make the trip and time is money! (and back then, that was time I could spend with my beautiful soon-to-be wife, and yes she reads this blog)

(Photo by an0nym0usmuse)