Funny Munny

No, not that... anything but that! Not another PERSONAL FINANCE BLOG! Oh the humanity!!!

28 February 2006

Forget April--February Is the Cruelest Month

I think February is the shortest month on purpose--it's simply not as likeable as the other months. April is nice because spring is in full bloom. July and August are warm, sunny, and a great time to take a vacation. Even December outranks February on the awesomeness scale because it throws in Christmas to help keep away the winter blues. But February, it's cold and miserable and the only holidays in it put the spotlight on groundhogs and greeting card companies. You'd think I would be thrilled that February usually ends after 28 days, but its abbreviated length just serves to make February the least favorite month not just for me but for my wallet as well.

To see why February earns the ire of my finances, consider how many monthly bills you pay. Things like gas, water, telephone, and electricity might come to mind. Of those four I just mentioned, which is most different from the others? You'll probably choose telephone if you participate in a fixed-price plan where usage doesn't impact the monthly charge. For all the others, your bill each month depends on how much gas, water, or electricity you crank into your home. These kinds of bills don't really care how long the billing period is; you'll pay the same amount per diem if you're billed once a month that you'd pay if you were billed weekly, yearly, or even hourly!

Those fixed monthly charges, however, usually don't take into account the length of a month. If your rent is due every month on the 1st, you'll pay the same regardless of whether the month is 30 or 31 days long. You'll obviously get the most benefit out of services that charge a flat monthly rate during months with 31 days. But February, geez! Not only do you miss out on the benefit of 31-day months, you lose another two days!

Let's consider a semi-hypothetical situation based loosely on my own finances. Say we have a person whose basic living expenses look like this during the month of April (a 30-day month):

There are plenty of other expenses this person will incur, but these will do for our purposes. For expenses, I included the equivalent per-diem charges calculated simply by dividing the monthly cost by 30. For income, since this person only works Monday through Friday, I calculated his income per diem based on a 22-day work month. You can see that, after basic expenses, this person has about $81 left for other purposes each of those 30 days.

Now let's consider a 28-day February with only 20 work days:

Assuming daily usage remains the same in February and April, this person will have slightly smaller gas, electric, water, and grocery bills. Since rent and telecommunication bills remain the same, their per-diem equivalent charge goes up almost four bucks over April's. When you take into account the slight hit to monthly income from those two missing work days, this person's discretionary income goes down $7.60 a day in February!

To keep this from becoming just another personal finance rant, I'll throw in some advice for dealing with the cruelty of February. Instead of counting your pennies monthly like I'm doing here, consider your income and expenses on an annualized basis. That way, lengths of months don't really matter to your income or expenses... unless you've got one of those crazy leap years. In that case, just take a cue from the groundhog and go back in your hole for six weeks.

27 February 2006

Super-Sizing My Commute: Only If I Can Use the Corporate Jet

While I was walking from the parking lot into my building at work this morning, I was thinking about how I really love my commute. Just six minutes is enough to get me and my MINI Cooper from our apartment to my workplace, and in the summer I might start walking or biking instead. Five months ago we lived a 90-minute car ride from where I work. Since a commute is a two-way deal, this meant I was on the road for three hours a day, four days a week (I work from home on Fridays, even now). To put it lightly, the commute took quite a toll on me. While my car is quite comfortable and the drive was mostly through country roads, three hours of my day were going to waste. So in October, I said "enough!" and we packed our bags--a lot of bags. The move was grueling, but I can say it was totally worth it. And even the higher rent that we pay now isn't enough to cancel out the bliss of having an extra eleven hours each week.

This morning, I get a call from my manager. He wants to see me. I never like these unscheduled calls, but they've never been about anything bad so far (just raises and promotions). Today's wasn't necessarily bad as it was simply my manager trying to find out who might be interested in working on another project at a location about 45 minutes away. My current manager just took over for my previous manager who is away on maternity leave, but he knows that I just moved to the area a few months ago primarily because I wanted an ultra-short commute. Our meeting was short, and rather than reject the offer outright, I hinted that I maybe possibly could be sort of interested a little I guess.

Even if I accepted an offer at the new location, it wouldn't start for a little while. My current project is beginning to wind down, and our team will soon transition to the next-generation version of the product. And as important as our team's role is on the current project, I have no doubt that they'd want all of us to continue working on the next. My manager suggested that some people may be transitioned to other projects anyway despite the fact that the next-generation project is ten times bigger than the current one, though I can't imagine anyone would forcibly reassign anyone on our team because we're already putting in tons of overtime on the older project while it's ramping down. I also know that if I went to my team leader and mentioned that forces above us are looking to relocate me, he would not be happy since we're going to need even more experienced man-power after transitioning to the next project.

But I have an icky taste in my mouth about this. Will I soon be facing a "relocate or re-employ somewhere else" scenario? Should I have flatly refused my manager's offer? Or should I have jumped at the opportunity ... without even knowing what the opportunity really is yet?

In the end, it all comes down to the commute. Is there anything that could convince me to trade this lovely hop-skip-and-a-jump drive to work for a butt-clenchingly painful one? Maybe...

Things I Might Take In Trade For A Much Longer Commute

  1. Interesting, enjoyable work. I like my current project, and the next-generation one will be even more challenging and exciting. But a new opportunity could be even more interesting, and I might find that I enjoy it even more than what I do now. A job I like is a pre-requisite that cannot be ignored, so this comes above all else.

  2. A hefty pay hike. A new assignment means the opportunity for a new salary. If I'm going to lose 90 extra minutes a day to driving, I expect bags with dollar signs on them to be sitting in the passenger seat to keep me company. But if this were the only incentive to relocate, how much of a raise would be enough to "buy" me? 10%? 20%? 10,000%? I doubt I'll know for sure until I see the offer.

  3. More telecommuting. It's quite fortunate that I still get to work from home on Fridays even after moving to within stone-throwing distance of my workplace. There are still mornings, however, that I'd rather not put on pants and just curl up on the sofa with my laptop and do my job from there. My current project is one that works very well with telecommuting. But what about this new project? Would I need to be in the office 40-60 hours a week? Could I work Fridays from home? Or would I be able to work even more from home--say, three or four days a week? Allowing me to do the majority of my time from home would help offset the extra commute on work-at-office days.

  4. Advancement opportunities. Staying put, I don't really need to worry about opportunities to grow and advance in the organization because this is the biggest location with the largest projects. The new location is smaller, but the project is newer and there may be some room to quickly climb the ladder. I don't think I'd get a promotion right off the bat since I just got one a few months ago, but if the long-term outlook is better than in my current location, I'd be more open to seeking those opportunities in another location.

  5. No other choice. In the two years I've been here, I don't think anyone in this location has been laid off. In fact, there's an impending talent crisis over the next decade as our baby-boomer senior staff members start retiring. There's even a special program for developing leadership skills in younger employees that I've been tapped to begin this year. On top of all that, we are transitioning to a larger project with a particular need for my set of skills. So I'm not worried about my continued employment with this company. That said, should the situation be presented to me as "move or be removed," I'll bear the heftier commute with a grin ... and keep my resume up-to-date.

23 February 2006

Ten Red Flags That Will Definitely Get Your Tax Return Audited

We've probably all read the lists of common red flags to watch out for when filling out your taxes that could trigger an IRS audit, but most of them are things you can't change. If you gave $100,000 to charity this year but only made $100,000, you must be one awesome guy or girl, and the IRS should reward you for that instead of drilling you for days like a cavity-riddled tooth.

What the IRS won't tell you about are the red flags that, no matter what else you do, will get you audited for sure. Now while I don't work for the IRS, I can still promise you that any one of the following is almost sure to get you flagged for an audit:

Love IRS Audits? Try These!

  1. Use creative media for your "paper" returns. While the IRS has strict guidelines for the weight, dirtiness, finish, porosity, gloss, and size of paper used for individuals printing their own tax forms, it does not go as far as to define "paper." The American Heritage Dictionary defines paper as "a material made of cellulose pulp, derived mainly from wood, rags, and certain grasses." Thus, according to the rules of the IRS, it would be perfectly acceptable to send in a tax return printed on a dirty old rag or even ground up marijuana. I also couldn't find any regulations on the color of forms filed with the IRS, so maybe give neon pink a try... or perhaps black ink printed on black paper!

  2. Deny your existence. The IRS can't tax someone who isn't there! So when you're counting exemptions, be sure to omit yourself, and don't state that someone else can claim you. In fact, just send in a blank return with your address but no name.

  3. Pay your tax bill in non-standard currency. Generally the IRS prefers United States dollars when you send them payment for taxes you owe at the end of the year. But at the same time, you prefer keeping your United States dollars in your Made in China pocket book. Keep in mind the purposes for which your tax dollars are used: feeding the poor, funding our military, protecting endangered species, etc. So instead of sending the IRS a check or paying by credit card, pay your taxes with coupons for free food (remember, one Jr. Frosty equals $1), spare ammunition you have sitting around the house, or any endangered red-speckled tree toads you may have stashed away in your closet. You'll save the government the hassle of converting that currency into services, so I'm sure they'll give you a break on your tax bill.

  4. Amend like there's no tomorrow. Some of you may be familiar with IRS Form 1040X--the form you send after you file a 1040 if you'd like to make a correction. You might file this if you forget some deductions or your filing status changes. Typically you'll wait for the 1040 to reach the IRS and be processed before sending in a 1040X. But that's no fun! Instead, start the year off with an amendment to a return you haven't yet filed. Then file the actual return. Then file another amended return. And then, just for kicks, become your own non-profit organization, file another amended return, and then file three more amended returns claiming each of the three children you forgot you gave birth to a few years ago.

  5. Your adjusted gross income: infinity. The IRS tax tables have one minor flaw: they only work on finite numbers. Indeed, how can you take 25% or 33% of a number you can't even see 100% of? Simply fill in your AGI as infinity, ask the IRS to compute your tax for you, and watch as their tax calculator enters an endless loop while determining your tax.

  6. Encode your tax return. Pretend that your 1040 is a top secret government document that could fall into enemy hands. When the form asks for dollar amounts, fill in something like "TRH,OAP." Then, in a separate correspondance, include the decipher key that reveals T=1, R=4, H=7, ... Alternately, use a number-to-number encoding so that a 5 really means 0 and an AGI of $507,291 translates as $4,671. And for you computer geeks out there, since your tax return is going into a computer anyway, save the IRS a step and compute your taxes due in binary. Then gripe when the IRS doesn't cut you a check for $10010110101110101.

  7. File your return ... UPSIDE DOWN!!! When you go to put your tax forms into their envelope, place the pages in upside down. The IRS computers will read everything backwards, so it'll see your AGI as your federal withholdings and vice versa. You'll instantly go from a tax bill of $2,000 to a refund of $20,000!

  8. One way to invite an audit: do it literally. Instead of filing a 1040 this year, break out some of that stationery you have left over from your wedding and compose the following note: "You are invited to attend the audit of Mr. and Mrs. INSERT NAME HERE at our home on April 15th. Refreshments will be provided. Bring your own receipts."

  9. Return the favor of fine print. The IRS wouldn't hesitate for a second to give you an extra 50 pages of instructions to read when filling out your tax return if it meant more revenue for them. You shouldn't hesitate to send some right back to them. Include the following text in the margins of your 1040 in tiny print: "By auditing this return, you agree to pay us the sum of one hundred million dollars, and there's no way in hell we're going to pay a single dime of taxes on that amount."

  10. Tell them where all your money's really coming from. On the line that asks for your occupation, simply write "MacGyver." Then attach your W-2s with duct tape.

And as an added bonus, should you attempt all of these activities in a single tax return, not only will you get an IRS audit, but you'll probably also receive a visit from some nice men in white jackets and a trip to a lovely room with padded walls. Just be sure to scream "I'm counting this as a medical deduction!" as they haul you away.


15 February 2006

Follow-Up to $1 Domain Sale, Or How to Make A Lot of People Hate Your Company

Yesterday I mentioned that would be holding a one-hour, $1 domain name sale. February 14th at 4pm EST came and went, and I'm willing to bet that very few people got their $1 domain names. Why? Because Dotster followed a fabulously evil formula to get some cheap advertising. I've written the formula in more general terms so that any evildoers out there can duplicate it.

  1. Sell an item for twice its price elsewhere. In Dotster's case, that item was a domain name registration. Dotster's regular price for one year of registration is about $15. Competitors like Yahoo!, GoDaddy, and RegisterFly regularly sell their domain registrations for half that or less.

  2. Advertise a drastic discount for a very limited time. Dotster announced it would sell all domain name registrations for $1 (a mere third of the cheapest normal price around) ... but only during a 60-minute window.

  3. Watch news of the sale spread across the internet, and even help it spread, too! News of the Dotster sale made most of the big deal sites as well as Digg and the most important and awesome blog in the entire world, Funny Munny.

  4. Do nothing else. Don't try to shore up your web server or request more bandwidth from your host. In fact, if you are your own web host, you should move your online storefront to a smaller server and cut the bandwidth a few minutes before the sale starts.

  5. Sit back, relax, and watch the server timeouts. If you did everything else correctly, you'll have thousands of people simultaneously connecting to a website meant for no more than two or three visitors an hour. Anyone who manages to get the front page to load will still have to struggle with a checkout process which you should have expanded from the usual two or three pages to ten or twenty pages. And just in case anyone should make it to the last page of checkout, recode the final Submit Order button so that it calls a script that doesn't exist.

Indeed, I have spoken to just one person who managed to complete the order process during Dotster's Hour of Evil. It took him the entire hour just to get through one domain registration.

Had Dotster been truly evil, it would have gone ahead and registered any domain names customers attempted to purchase during the sale hour. Then it could kindly offer to sell them the domains for the usual $15/year registration fee. Maybe Dotster was visited by the Ghost of E-Commerce Failures Future and had a change of heart.

Still, Dotster got a lot of advertising out of this ploy, and it won't take many domain name registrations to make up for the handful of $1 domains customers mananged to grab. I, however, won't be making any purchases from Dotster for one simple reason: you just have to wonder how reliable a web hosting company is that can't keep its own website up during heavy traffic.

14 February 2006

$1 Domain Name Registration

Via Digg, here's a great deal for anyone who's been holding out on registering a domain name. At 4pm EST today (about five minutes from when I'm writing this), will have a "happy hour" during which domain name registration will be on sale for just $1.

It might only be a few bucks saved off the usual Yahoo! and GoDaddy prices, but this is an especially useful deal if you're looking to pick up a whole bunch of domains at one time! How many domains can you register in just an hour?

read more | digg story


12 February 2006

Don't Be Afraid to Use Your Credit Card When Dining Out In A Group

How many times in your life have you gone out to a restaurant with a group of people--say, four or more--and when it comes time to pay the check, everyone throws some cash on the table. Whether everyone pays for their own food or the bill gets split evenly among everyone, a group meal typically results in a big pile of assorted bills.

If you're like me, you don't usually carry a lot of cash in your wallet. When you eat out alone or with one other person, you use your credit card, especially if it's a reward card that you pay off every month. But when you'll be going out with several friends or co-workers, you might make a quick trip to the ATM on the way so you can contribute to that pile of cash that inevitably forms at the end of the meal.

Of course, you could pay for your part of the meal with a credit card; but when everyone else is flashing the green stuff, you may feel compelled to do the same. Is it the peer pressure? Is it because of the stigma that comes with being a "credit card user?" Whatever the reason you might have to keep the credit card in your wallet, it's a bad one. With reward cards like the Citi Professional MasterCard that give 3% back on restaurant transactions and tons of other cards that offer 1% cash back on everything, paying cash at a restaurant is like paying extra sales tax. So forget what other people may think when you break out the plastic to pay for your food. (Oh, and watch out for people who might short-change the pot--there's one at every company.)

While you've got that credit card out, why not put everyone's bill on it? Just say you don't have the cash on you and offer to "simplify" things by using your reward credit card to pay the bill. If everyone agrees, pocket that pile of bills on the table and think to yourself that you'll be getting a percent back of the total bill.

Consider this example. Say you and nine of your friends go out to eat and the final bill is $100 including tip. If your part of the bill is $10 and you use a 3% cash back reward card, you'll make three bucks if you take the cash pile and put the whole thing on your card. In essence, you're getting 30% off your own meal. Heck, if you're really daring and don't embarrass easily, why not go from table to table at the restaurant offering the same service to unwitting cash-payers?

Now what do you think would happen if a bunch of personal finance bloggers got together at a restaurant? Once thing's for sure: you would be able to hear the sound of plastic hitting table from outer space.

07 February 2006

Inside My Wallet: Please Please Please Be A Million Dollars ... Dang

It's been a popular topic as of late, so I figure it might be amusing to explore the contents of my own wallet. Or, if not amusing, then at least incredibly boring.

In the billfold

  • $16 in cash. Two fives, six ones.

  • Receipts. Both for credit card purchases. One is for gasoline (thought I had lost this one). The other is for dinner last Saturday--Cheeburger Cheeburger; I ate the 20 oz. burger and got my picture up on the wall. I still feel it in my stomach.

In the card slots

  • Credit cards. I just keep my Citi Shell MasterCard and Bank of America Visa on me.

  • Club cards. Safeway and Giant at the front since they get used the most. Sam's Club and Super Fresh are in there, too. I'll probably ditch them both since there is no Super Fresh around where we moved and I don't intend to renew the Sam's Club membership.

  • Gift cards. I think all of them only have a few bucks left on them. Two for Target, one for Outback Steakhouse, and one for Bed Bath & Beyond. There's also a Dave & Buster's game card with a few bucks left on it.

  • Metro farecards. Two of them. Each has 30 cents left on it. They're from our recent day trip to Washington, D.C. They'll get used soon enough, I'm sure.

  • Movie theater cards. One for United Artists, the other for AMC. You're supposed to get free popcorns and drinks if you use them a bunch of times. I don't think we've ever gotten anything like that, but we rarely go to movie theaters anyway.

  • Insurance cards. Optimum Choice for medical, EyeMed for vision, and Delta Dental for toothy goodness. Had two cards for GEICO; one was expired so I just threw it away.

In the picture holders

  • Driver's license and change of address card. I look really angry in my license picture. Oh, maybe it was the three-hour wait!

  • Pictures of Tegan. Five of them, though I just noticed none of them are from the last few years. I've got the first one I ever took of her, another in her cute little blue swimsuit that's my favorite, two of her in dresses at various dances (one from before I even knew her) and the last of her wearing a blue wig. No wedding picture!!! I need to correct that!

I should note that I did clean out my wallet a few months ago. It was much worse back then--lots of little scraps of paper with outdated information, expired cards of all sorts, and even a picture of an ex-girlfriend (oops!).

It's probably also worth mentioning that I'm one of the few people I know who carries his wallet in his front pocket instead of the back. It's easier to secure that way (now pickpocketers just grope my butt) and I don't have to sit on it all day.

Maybe I'll take an inventory of Tegan's wallet. I just can't let her find out about it until I'm done!


04 February 2006

Tax Return Time: It's Like the Exact Opposite of Christmas

With all of the necessary W-2s and 1099s and NCC-1701-Ds finally in my documentation bucket, I sat down last night and this afternoon to set them all on fire. Then, with the documents that refused to burn, I did my federal and state tax returns. What follows is the sad tale of a young couple, some tax software, and three bottles of inexpensive wine.

Chapter The First: Preparations For Battle

The last of six needed tax documents arrived in the mail on Monday. It was my 1099-INT from Bank of America. At first, I wondered why they were sending me one since I had just opened accounts with them in November and had earned a total of 13 cents interest with them. "Don't forget that $50 account opening bonus," the 1099-INT politely reminded me. I told the 1099 where it could go, but it stayed on my desk instead.

The other documents had arrived in weeks previous and included...

  • My W-2. I elected to receive my W-2 electronically, so it was available online by mid-January. Just under $58,000 in wages. The federal government had already taken $10,000 of that, and Maryland snatched up $4,000.

  • Tegan's W-2. These arrived next-to-last. Since she had just started at the end of the year, her wages totaled just $1,300 and her taxes withheld were minimal.

  • ING Direct 1099. Yup, got a $50 bonus from them, too.

  • Wachovia 1099. I need to close these accounts sometime. They paid me just over $100 in interest. Had my deposits been in ING or Emigrant the entire year, that amount would have been about seven times higher.

  • Tegan's Tuition 1098-T. Say that three times fast. Tegan returned to school a couple weeks ago, but since her tuition was paid in December, we could count it in our 2005 tax credits. This 1098-T quickly became my favorite tax document.

Even though the majority of our savings were in Emigrant Direct, they only got to ED in November and December and didn't quite make the interest needed to generate a 1099.

Chapter The Second: Attack of the Federal Government

I had already downloaded the 2005 edition of the awesomest tax software in the world: TaxACT. While downloading TaxACT, I was aware that H&R Block's TaxCut software was also available for free download. I chose to stick with TaxACT because I had already used it in 2004 and 2003.

Even though I downloaded it back in December, I waited to install TaxACT until yesterday. The installation process was painless, and I had the program up and running in no time. To start, it asked some basic questions and queried me as to whether I had data from TaxACT 2004. I did, somewhere on a backup DVD, but since the only thing that hadn't changed from last year was my name and social security number, I decided to start fresh.

The TaxACT interface was unchanged from previous years, but there were many more annoying "upgrade to a more betterer version of TaxACT for $12" interludes between steps. While $12 would get me a Maryland tax return and e-file without any extra work, I declined each time is was offered because I wasn't about to pay for something I could do for free.

I entered our W-2s and 1099s and Tegan's 1098-T fairly quickly, though copying exact numbers from the paper forms was a bit tedious. With wages and interest, our adjusted gross income came to about $59,000. Some magical calculations later, I saw the first sign of my anticipated refund in the corner of TaxACT's window: $4,900. I kicked myself a few times for giving the government such a lovely interest-free loan and promised to update my W-4s soon. I took the Hope credit for Tegan's tuition which allowed me to credit all $700 right from the taxes we owed. So that $4,900 turned into $5,600 just like that. We can take the Hope credit one more time for 2006 and then we'll be stuck with that crappy Lifetime Learning credit that only takes 20% of her tuition away from our taxes.

TaxACT then freaked out a bit. It detected that it was out-of-date, closed itself down, downloaded the latest version, installed it ... and then stayed closed. Why it didn't do all this when I first started it, I don't know. I manually restarted the program and found that it hadn't discarded the data I just finished entering, so I continued from where I left off.

Unlike last year, TaxACT had the option built-in to e-file our Federal return for free. I did so and gave it our bank account number for direct deposit. TaxACT kindly told me I'd be getting a couple of e-mails in the next several days letting me know how things go and that I'd need to send in a paper 8453-OL (Tax Document Permitting the IRS to E-Molest You). TaxACT then tempted me with a preview of our Maryland tax return like it always does. I printed a copy of our 1040, backed up the Federal data, and told TaxACT to take a hike.

Time to complete, from installation to filing: about an hour.

The Final Chapter: Wishing I Lived in Florida

The reason I turned down that $12 TaxACT offer to handle my state return: Maryland's free iFile. Not content to begin with a pedestrian letter like "e," Maryland's iFile is a simple but thorough substitute for Form 502. Like every year, I had to try a few times to remember my password, but once I got it right, all my basic information from last year automatically appeared. Unfortunately most of the data was wrong wrong wrong, so I put in the new address, phone numbers, and wife. It then prompted me for our Federal adjusted gross income and data from our W-2s. A few minutes later, it spit out our taxes owed and told me we'd be getting back $400. A little better than the $5,600 I had given to Uncle Sam, I thought. But when I noticed that our county tax was almost 60% of our state tax amount, I almost cried. I guess that's why Montgomery County is so much nicer than Baltimore County; we pay more for it.

A few button-pushes and some direct deposit information later, the return was sent to some guy in Annapolis who probably makes $10 an hour to push a button granting refunds. I had some trouble printing out a copy of the Form 502 because the PDF version didn't want to download. Fortunately the "text" version wasn't just plain text and looked just like the real Form 502 in full HTML. I printed off a PDF copy of it and shoved it in a folder with the dozen or so other PDFs I had generated.

Time to iComplete: 30 minutes on the button.


So we have about $6,000 heading our way, and that $6,000 will soon be sitting in our just-opened HSBC savings account earning 4.80% until the end of April. Next on my tax to-do list is updating those W-4s so not quite so much is taken out this year. Granted, we'll be earning quite a bit more in interest this year and paying more in tuition, so I'll have to take all that into account.

That refund still irks me a bit. Some people might love getting a $6,000 tax refund; me, I see that as about $200 in interest we missed out on. I thought about making that $200 up by eating sticks and slugs for a few weeks, but then Tegan made a yummy cake and I forgot all about it. Even typing this right now isn't enough to remind me.

And I'll probably forget to update my W-4, too ... especially once I get to those three bottles of wine.