Spending Smart: A Consumer's Guide to Saving Money and Making Good Financial Decisions

Spending Smart

A Consumer’s Guide to Saving Money and Making Good Financial Decisions

Copyright 2013 by the Chicago Tribune

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including copying, recording, or by any information storage and retrieval system, without express written permission from the publisher.

Chicago Tribune

Tony W. Hunter, Publisher

Gerould W. Kern, Editor

R. Bruce Dold, Editorial Page Editor

Bill Adee, Vice President/Digital

Jane Hirt, Managing Editor

Joycelyn Winnecke, Associate Editor

Peter Kendall, Deputy Managing Editor

Ebook edition 1.0 March 2013

ISBN-13 978-1-57284-452-0

Agate Digital is an imprint of Agate Publishing. Agate books are available in bulk at discount prices. For more information visit agatepublishing.com.

TABLE OF CONTENTS

ABOUT THIS BOOK

CONSUMER TIPS

Get your complaint heard

Find truth in the fine print

Give yourself some credit

A season to save

Tips for budgeting a burial

Dig deep for the right diamond

CONSUMER PROGRAMS

Loyalty programs or bust

Buybacks warrant caution

It pays to lay off the layaway

FREE OR NOT

You can get that at the library?

‘Free’ now comes in drips

FINANCIAL WISDOM

Finding joy in a simpler life

Living frugally the Amish way

Finding your financial harmony

Seven habits of highly successful spenders

Clark Howard: Spend small, live large

AUTOMOBILES

Don’t get taken for a ride

Know whether oil’s well

The lease you can do

Safe driver? Consider ‘telematics’

TRAVEL

Airfare tips that’ll never fly

Does an agent fly for you?

HEALTH/RECREATION

Take good care to save

A dose of tax-free savings

Buying a bike? Exercise savvy

Pedaling advice on used bikes

LIFE/DISABILITY INSURANCE

Life insurance: A premium consideration

Disability insurance primer

CELL PHONES

Sounding a frugal ring?

Seniors: New age tack for cell phones

HOME

Alarms should sound on deal

Giving your trash a purpose

Trimming landscaping costs

ENERGY/ENVIRONMENT

Gas-saving tips to fuel money savings

Law shedding light on bulbs

Put a charge into your battery savings

BANKING

Crowning a banking champ

ONLINE

Home goods click with shoppers

Bringing focus to corrective lenses

CONSUMER STUDIES

The price of forgoing logic

Adams shops around while Zuckerman buys

Quiz: Your money literacy

ABOUT THIS BOOK

This book is a collection of Spending Smart articles from 2010 through 2012 by Chicago Tribune consumer news reporter Gregory Karp. We chose columns that offered lasting advice. We included the date of publication for each column to give readers context on dated information, such as prices.

CONSUMER TIPS

Get your complaint heard

March 4, 2012

Ideally, consumer interaction with companies would always be calm and businesslike. But too often when problems arise from a purchase, those interactions become emotionally charged and quickly deteriorate into frustrated screams, curses and tears.

It becomes personal.

Some 56 percent of U.S. consumers admitted losing their temper with a customer service professional, according to the American Express 2011 Global Customer Service Barometer.

People feel like their voice isn’t being heard, that they have no ability to take on these big corporations, said Chicago Tribune consumer watchdog columnist Jon Yates, author of What’s Your Problem?: Cut through Red Tape, Challenge the System, and Get Your Money Back. Every time they get rejected or neglected, it does become personal. . . . Part of it is the frustration of actually getting through to a human being.

Here are a few of the most emotionally charged consumer topics and what to do about them.

Dialing a human

A survey by Consumer Reports found that 71 percent of respondents were extremely irritated when they couldn’t reach a human on the phone. Two-thirds said they hung up the phone without getting their issue resolved.

Perhaps nothing ticks off consumers quicker than the implication that their problem matters so little they should talk to a machine instead of a person.

But there are ways to navigate corporate phone trees or avoid them. Several websites, including gethuman.com and dialahuman.com, give advice on reaching specific companies, providing phone numbers and secret strategies to bypass their automated phone systems and get to real people. Lucyphone.com promises to place the call to a company for you, wait on hold and ring your phone when a live representative is on the line.

Phone systems vary, but common tactics for navigating a phone tree include staying silent and refusing to respond to the system’s voice prompts or, instead, start speaking gibberish.

The old trick of dialing zero for an operator doesn’t work today as well as it used to, Yates said.

Another strategy involves a bit of misdirection. Try funneling yourself into the departments for either new customers or bill collections. When you get through, ask to be transferred to the department you really want.

Similarly, conduct an Internet search to find a phone number for the company’s headquarters offices and call there. The hope is some bigwig can help you or at least you’ll be transferred directly to a customer service agent.

And if you reach an overseas call center and can’t understand a customer service agent, ask to be transferred to a U.S. call center. Many large companies have them.

Debt collectors

Owing money can be a source of guilt, embarrassment and frustration, which can lead to emotional confrontations with debt collectors. Collectors often use tactics that capitalize on raw emotions to get you to pay, said Linda Sherry, national priorities director for advocacy group Consumer Action.

These people earn money based on what they can get out of you, she said.

But you have rights. The collections business is governed by the federal Fair Debt Collection Practices Act. A collector cannot harass you by threatening you, cursing, lying or calling before 8 a.m. or after 9 p.m. unless you agree to it.

And collectors may not contact you at work if you tell them you’re not allowed to get calls there. They can’t say that you’ll be arrested if you don’t pay. Other than to get location information about you, a debt collector generally is not allowed to discuss your debt with anyone other than you, your spouse or your attorney. See more on the law at the FTC website, tinyurl.com/ftc-fdcpa.

And don’t pay debts you don’t owe. The FTC told recently of a scam involving collectors who try to harass people into paying debts they don’t owe. If you get such a call, ask for a written validation notice telling you how much you owe. A legitimate collector must provide it within five days. The notice must also include the creditor’s name and how to proceed if you dispute the debt.

If you have a problem with a collector, contact your state attorney general’s office (naag.org) and the Federal Trade Commission (ftc.gov). Sometimes you might need to hire an attorney, Sherry said.

Junk mail

Some consumers become infuriated at the unwanted junk mail that fills their mailboxes, both physical and electronic ones. But there are some ways to stop intrusive advertising. To halt prescreened offers of credit and insurance, begin online at optoutprescreen.com. To opt out permanently, you must return a signed form, which will be provided after you initiate the online request. You can also call 888-5-OPT-OUT.

To stop unwanted telemarketing calls, register your phone number on the National Do Not Call Registry at donotcall.gov or call 888-382-1222.

To stop unwanted junk mail for five years, contact the Direct Marketing Association’s Mail Preference Service at dmachoice.org or mail your request with a $1 processing fee to DMAchoice, Direct Marketing Association, P.O. Box 643, Carmel, NY 10512.

To cut down on email advertising, you can register at dmachoice.org to stop commercial email for six years from marketers that adhere to the group’s Email Preference Service. You can also check the bottom of unwanted emails for an unsubscribe option. However, it’s best to unsubscribe from only companies you have heard of, otherwise you’re just letting a spammer know that your email address goes to a real person.

When ordering online, look for a check box during virtual checkout that allows the retailer to send you marketing messages, and uncheck it. To complain about solicitations, go to the FTC’s website or call 877-FTC-HELP.

Contractors

If you do enough home repairs or home-improvement projects, you’ll likely run into contractor problems. Consumers get very upset because problems that arise involve your home. And you probably talked face-to-face with the contractor. If he or she wrongs you, it can feel like a personal affront.

You feel like you’ve been scammed by an individual rather than a big business. That hurts even more a lot of times, Yates said.

Again, preventing problems is key. Do that by getting three estimates, asking for recommendations and researching the contractor online through the Better Business Bureau (bbb.org), yelp.com or angieslist.com, which requires a subscription. Always hold back final payment, perhaps 10 to 25 percent of the total cost, until you’re satisfied.

If you’ve been wronged, threaten to write a negative online review at the previously mentioned websites, report the contractor to a state or local licensing agency, or take the contractor to small claims court. For detailed advice on dealing with contractors, see the FTC site: tinyurl.com/ftc-contractors.

Find truth in the fine print

Nov. 25, 2012

Mouse print: It’s the catch, the gotcha, the bait-and-switch.

It’s print advertising’s tiny type, fit for reading by mice, or a speed-talked disclaimer on TV or radio that often makes an advertised claim false or misleading.

FREE BOX OF CORN FLAKES . . . with purchase of a box at regular price.

Companies selling cable TV packages, cellphone service, restaurant food or just about any type of retail good or service might be guilty of it, said Edgar Dworsky, a former deputy attorney general in Massachusetts, who tracks such advertising fibs at MousePrint.org.

Companies like to put the happiest face on their claims, but they know if they really told the truth in the big print people would be less interested in the offer, said Dworsky, also founder and editor of ConsumerWorld.org.

Marketers think it’s OK to say almost anything in an ad as long as they reveal the truth with an asterisk, Dworsky said. A fair-advertising rule would be simple: The fine print can’t change the meaning of primary claim, Dworsky said. But unfortunately, I see advertising that does this every day.

Here are questions and answers about mouse print.

Q. Where am I likely to find mouse print?

A. It’s just all over map, Dworsky said. If they advertise, they probably have fine print. I can’t say one industry does it more than another.

Recent examples include Best Buy’s new policy to match online prices, which sounds great. Fine print reveals Best Buy will match prices of a few specified online retailers, only on certain categories of products and it will exclude some of the best sale days, such as Black Friday.

Others are T-Mobile’s unlimited nationwide 4G data service that comes with limitations, Excedrin pain reliever products marketed under three names but containing the same active ingredients and an Avis offer for $30 off your next Avis rental, which applies only to a weekly rental, fine print reveals.

The inside back cover of Consumer Reports magazine, in a section called Selling It, is another great source of mouse-print revelations. Examples include the Tiki Island King Windfighter torch, which claims it Stays Lit In The Wind. Yet, the fine print cautions, do not use in windy conditions.

A box of Royal brand instant pudding showed the flavor in big letters as pistachio with a picture of nuts in the green dessert. The fine-print ingredients reveal the nuts are diced almonds, the flavor artificial and green color from yellow and blue dyes.

A TV ad for Western Sky Financial offered loans of up to $5,000. The small print says, The APR for a typical loan of $5,000 is 116.73% with 84 monthly payments of $486.58. Notes Consumer Reports, so if you take $5,000 and pay the loan back over seven years, you’re out $35,872.29.

And be skeptical of sale prices. A 30 percent-off sale seems like a good deal, but you have to ask, 30 percent off of what? Sometimes, it’s off a full retail price the retailer never charges.

Q. What can I do to protect myself against mouse print?

A. Simple: Read the fine print and be skeptical of claims that seem too good to be true.

The consumer just has to be watchful and understand that most broad claims are going to have some type of limitation, footnote or disclaimer, Dworsky said.

That’s not always easy in electronic media. You almost have to have a TV set with freeze-frame capability, so you can read the fine print when it goes by so quickly, he said.

Q. Does the government monitor false advertising?

A. Yes. But there are limits to how much the Federal Trade Commission or state attorney general offices can do.

The FTC has been clear that advertisers cannot use fine print to contradict other statements in an ad or to clear up misimpressions the ad would otherwise leave, according to the FTC’s Division of Advertising Practice.

It has used the example of an ad for a diet product that claims Lose 10 pounds in one week without dieting, with a fine-print statement Diet and exercise required. The mouse print is insufficient to remedy the deceptive claim in the ad, the FTC advises in a guide for small businesses.

The