My Little Space on the Web!: April 2008 Archives

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April 14, 2008

A Banks Nightmare

Several years ago I decided to earn some extra money by becoming a Secret Shopper. I was retired and did not want the restrictions of a part time job so I thought becoming a Secret Shopper sounded like a nice change of pace. I found several companies who were hiring at that time and became a fairly regular shopper with one of them. Unlike what most people perceive, shopping does not have to be in a department store where you make a purchase and evaluate the service you received. This is how some secret shoppers work, but was not what I was expected to do.

My first few jobs were at fast food restaurants where I was expected to evaluate the food inside, the food at the drive-up and the rest rooms, along with the maintenance of the grounds. This required the completion of a very long form and the compensation for all of this work was exceptionally poor. After two fast food assignments, I knew this was not for me. I would not be returning to fast food shops until their pay increased dramatically.

Eventually, I contacted a company who had a different type of shopping requirement. They wanted people to shop financial institutions and ask specific questions about a variety of aspects of banking. The evaluations were of the service received from the greeter to the person who answered your questions and provided information regarding specific products. Each shop required I ask certain questions and record the answers I was given. I had to time how long it took to be welcomed in the bank and how long before I received attention from the person I needed to speak with. The most difficult part of the shop was that the form you had to complete required the names of the people you came in contact with and a description of them. Employees were supposed to be wearing badges with their names displayed, but some did not. It was hard to memorize the physical details of everyone who spoke with you without taking any notes. There were times when I would come in contact with as many as five people. A great deal of concentration was needed to match all of their names and descriptions while still carrying on conversations with them.

Bank shops were very interesting, paid well and you were able to visit several branches in one day, enabling you to receive a better rate of pay for your time invested.

One job was to inquire about checking accounts. You had to ask for interest rates, minimum balance requirements and specific charges relating to the accounts. You always had to provide a different name which was the part I really didn’t like. It’s hard to respond to a new name when someone addresses you that way. They also required that I leave a telephone number for follow-up. Although I didn’t like leaving a phone number (I left my cell number) and the false name, the rest of the shop was pleasant and easy to perform. I found that I could do several shops in an area and earn a very good salary.

Other shops had me inquiring regarding mortgages, investment of retirement funds, savings accounts, CD rates (both IRA and regular), car loans and home equity loans. All of these came with individual questions which had to be responded to by the bank employees while I was evaluating their responses and how they treated potential new customers. Several shops also required you to express displeasure with some information (such as rates) and record the reaction of the person you are speaking with.

The bank I was a shopper for was very specific regarding their requirements. I had to wear a watch and time how long it took someone to greet me upon entering the bank. I also had to comment on who was present when I entered the branch and available to assist me at that time. A specific person was supposed to greet me and, if not, someone else was expected to substitute for that person temporarily while asking me to wait for the information I was trying to obtain. The bank demanded a great deal from their employees and, in most cases, was not disappointed. I was very surprised at how quickly I was greeted when entering the bank lobby. Only twice was I disappointed in the service I received. This was out of approximately 25 visits and shows that the service provided by this organization is exceptional. I was very impressed with how they treated their customers and would eventually like to bring my financial business to this organization.

Posted by juliusp at 10:56 AM | Comments (0)

Insurance Costs are Insane

It is common knowledge that health insurance is one of the great problems in today’s world. Companies have stopped providing insurance for their employees. Some will still pay a portion of the premiums; others have completely turned the problem over to their employees. The bottom line is that we have more Americans without health insurance today than ever before. This is a disgraceful situation which our politicians have been ignoring. They talk about it regularly but never seem to arrive at any solutions. This is just one more area in which the government has failed the people.

Many people are going without health insurance and praying that they do not get ill. This is a very sad situation and people are not addressing the health symptoms they may be having because they know they cannot afford the tests necessary for an accurate diagnosis. It’s hard to believe that our country cannot resolve this situation in a satisfactory manner but, to date, they have not. The only area we have succeeded in resolving to some extent is health insurance for children. I live in Virginia and we do have a plan to cover children without health insurance. This is a wonderful thing but, unfortunately, it still leaves the parents with out any availability to health care.

One of the options available to people today is a high deductible policy. These policies are reasonably priced so they become more affordable than lower deductible policies. I recently carried a policy that had at $6,500 deductible. This will not work for everyone. I did not want to have this type of policy but there were very few alternatives when I was applying for health insurance. My husband and I were in relatively good health but the insurance companies did not want to offer us a health insurance policy at a reasonable rate. The only option available to us was this high deductible policy. The one advantage to this policy was that the premium was somewhat reasonable and it made us eligible for a Medical Savings Account which today is known as a Health Savings Account.

More banks are offering Health Savings Accounts today than ever before. The government created very stringent rules for this type of account and they are often subject to audits. The Health Savings Accounts available today offer a variety of options. To begin with these accounts allow you to deposit a specific amount of money, tax free, into your account each year. The amount allowed is a percentage of your annual deductible and you cannot exceed that amount. Since this money is tax-free, you are able to save considerably more than you could in an after-tax account. Unlike Flexible Savings Accounts, you do not have to use this money in a calendar year or risk forfeiting it. No such rules apply to a Health Savings Account so you are able to accumulate funds over a period of years and use them in your retirement years. This money can be used in retirement to pay Part B of Medicare, drug expenses, doctor co-pays, etc. Even today, all medical expenses, including over the counter drug purchases, are deductible from this account. Most accounts provide a debit card and, if requested, will furnish checks for payment of bills. There are some charges associated with the accounts but they are generally minimal.

I have recently signed up for an account that pays interest on my savings but does not offer other options. Some of the accounts available at this time are investment accounts which give account holders the choice of investing their funds in the stock market, bonds, or mutual funds if they so desire. If not, they can continue to maintain a savings account earning an interest rate that is comparable to others being offered at this time.

Some financial advisers are against investment accounts as they are not secure and this is money set aside for medical expenses. The flip side of this argument is that you can earn a larger return on your investment which will, eventually, give you additional funds towards your medical costs.

In 2006 the government passed the Pension Protection Act which included a change to Health Savings Accounts. This new law contained a provision giving Health Savings Account holders the right to a one-time transfer of IRA funds directly into their Health Savings Account. This transfer can only amount to a one-year deposit equivalent and can only occur once in a lifetime. This is an additional advantage given to people who are trying to balance their income and their health insurance needs. I have recently taken advantage of this new law and hope that it will help me meet unexpected health expenses in the future.

Posted by juliusp at 10:55 AM | Comments (0)

April 10, 2008

Finally Vacation Time Florida here we come

We recently decided to take a vacation to visit our friends who are now living in St. Petersburg, FL. They invited us last January and we accepted, but had not finalized the dates. We wanted to see when vacation time was available at work and when we could get reasonably priced flights for the trip.

Available dates were established at work and we began our investigation into airline costs and availability. We prefer to fly direct and checked some of the airlines who would accommodate our wishes. We eventually chose Jet Blue as they have a regular flight from our local airport directly to Tampa/St Petersburg. We have taken this flight before and been very happy with Jet Blue’s service. This trip, however, was not as pleasant as some of our earlier flights.

We had scheduled an early morning flight which dictated that we rise at 4 am and leave the house by 4:45 in order to allow sufficient time for our arrival at the airport and our check-in. Since airport security has increased so much over the last few years, it is necessary to plan extra time for this new ritual.

We arrived at the airport by 5:30am as planned and proceeded to check-in. This is when our plans fell apart. At check-in we were informed that our flight has been postponed. No reason was given but, having been here with other airlines in the past, I was quite certain that they did this because they did not have a full plane. I’ve had this happen numerous times before and it always irritates me. If they have not booked the majority of seats on a plane, they hold the passengers over for the next flight. The airline then only has to fly one plane and can cover the passengers booked for two separate flights. This is cost effective for them and irritating for the customers. This, however, is never the official reason for delay. They generally tell you that there were mechanical difficulties that need to be addressed before the flight took off.

The first delay was expected to be a one-hour delay. Sometime later there was an announcement that the delay may be for an additional hour. We decided to go have a relaxing breakfast at the airport while we waited for our plane. As were all the passengers scheduled for this flight, we were becoming frustrated and exhausted. After all, we had to get up in the middle of the night for this flight and now we are just sitting around at the airport.

We did have a nice breakfast and were pleasantly surprised when we returned to the terminal area to discover that our plane was at the gate and preparing for boarding. We were very anxious to board as a nice nap was what we now had planned for the trip. It was a good trip, we were able to sleep some, and finally arrived at our destination. Our friends had been notified of our delay but were now here to greet us upon our arrival.

Our time in St. Petersburg was very enjoyable. Our friends have a lovely condominium on the water and we enjoyed the facilities during our visit. They have beautiful walkways along the properties and docks. Fishing is available for the men while the ladies enjoy visiting poolside and lunching at the fine restaurant located on their property.
It was an exceptionally relaxing visit and just what we wanted for our time away from the office. Our friends showed us many of the local sights and every night we experienced a new restaurant for dinner. We were having a wonderful time and sad to see our short vacation coming to an end.

It was soon time for our return and we said goodbye to our hosts. They had done a great job of entertaining us and we promised to reciprocate when they visited us this summer. Since Florida is not very pleasant in the heat of summer, they will be spending some time with us in Virginia at our waterfront home. We always enjoy our summer company and get to show them the beautiful area we live in and some of the fine restaurants located nearby. I only hope our friends will have as good a time at our home as we had at theirs.

Our flight home was uneventful and we were feeling rejuvenated when we returned to our everyday lives. A break such as this is good for everyone and gives us a fresh perspective on things. Everyone needs to take a vacation and should take a few short ones each year. It helps if you have friends to visit and can hold the costs to a minimum.

Posted by juliusp at 10:54 AM | Comments (0)

April 08, 2008

Need Money Going to take from my home

Everyone has a general idea about mortgages and how they assist you in buying a home. One of the newest mortgage products being promoted by banks and finance companies, however, is geared to the older generation who already own their homes. This product is known as the reverse mortgage.

After my parents retired, they found it difficult to make ends meet on a combination of social security and a small pension my Dad had from his many years of employment. Inflation keeps raising prices and, although Social Security does provide inflation adjustments on an annual basis, they never really cover the increase in expenditures. Right now, just the price of oil is enough to knock any budget off kilter. Add to that all of the other prices which are raised in reaction to the oil price increases, and it becomes almost impossible to maintain your standard of living.

Mom and Dad clipped coupons, went to sales whenever possible, shopped during the specific days that Senior Citizens discounts were available, and used all types of creative ways to hold down expenses. They shopped for car and homeowner’s insurance, made certain their investments were getting the highest interest rates available, and even double checked on the fees charged by their bank in the hopes of saving some money. All of these efforts on their part did bring down their expenses somewhat, but never enough to allow them to relax about their finances. Vacations were out of the question and even small luxuries were to be avoided on their budget.

Dad was reading the newspaper one day when he saw an article about reverse mortgages. He was really excited, told Mom about it, and they then called me for my opinion. I, too, had read a few articles on the subject but had not investigated how these mortgages actually were handled and I had no idea of the costs involved. I then agreed to research this subject on behalf of my parents and report back to them on my findings. They were so excited that this might work for them that they called me two days later to see if I had gotten any information yet. I had to advise them that I had not started my inquiries but would plan on looking into everything the beginning of next week when I anticipated having some additional time.

I began my research by reading the article Dad had discovered in the newspaper. The newspaper referred me to a website which was particularly informative as to how these mortgages work. The homeowners complete an application after determining the amount they want to borrow to cover their needs. This amount can be paid to them in a lump sum or as a monthly income. Of course the sum cannot exceed a certain percentage of the value of their property. Also, any existing mortgage would have to paid off prior to income dispersal so that the bank providing the reverse mortgage will become the first lien holder on the property. One problem with this type of financing is that the upfront costs are extremely high. Another drawback is that you are spending your children’s inheritance. Of course, since you earned the money it is certainly your right to spend it and your children would most likely agree. I know I would rather see my parents enjoying themselves at this stage of their lives than constantly worrying about saving money and trying to make ends meet. Although they were not very wealthy throughout the years, they were able to afford special treats from time to time. A vacation, a new car and an occasional luxury item was attainable for them. Since retirement, this has not been possible and I would really enjoy seeing them relaxing and enjoying their retirement. They have worked hard all of their lives and certainly should be reaping the benefits of all of those years.

The reverse mortgage is designed to allow people to stay in their homes as they age. The money does not have to be repaid until my parents leave their home or die. Upon their death, their beneficiaries who inherit the home will assume the obligation to pay back the money advanced to my parents. I will, at that point, probably sell their home and reimburse the lender in accordance with the agreement signed by my parents.

A reverse mortgage is only recommended for people who plan to stay in their home for the rest of their lives. My parents definitely plan to stay in the family home and we, as a family, have thoroughly discussed the benefits and drawbacks of a reverse mortgage. We have come to the conclusion that it would be a good thing for our family and will make Mom and Dad’s lives much happier and enable them to truly enjoy the retirement they have so rightly earned.

Posted by juliusp at 10:53 AM | Comments (0)

April 03, 2008

Credit Card Rates=Credit Reports