Smart Spending Blog - MSN Money

Forgiven debt really is income

2009-09-30T20:02:00Z

This guest post comes from Frank Curmudgeon at Bad Money Advice.

There was a pretty good post over at Wise Bread the other day on how if a credit card company forgives some of what you owe, what was forgiven is income you have to pay taxes on.

On the one hand, this is a point worth repeating because it seems to surprise most people. On the other hand, the post neglects to mention an important exception, and, moreover, feeds into the belief that this is an irrational fluke of the tax code. It isn't. It makes sense.

You owe Credit Card Corporation (CCC) $5,000. Realizing you are unlikely to pay them back in full, and now regretting lending you the money to begin with, CCC agrees to settle the debt for $2,000 cash. You sell your PEZ dispenser collection on eBay and send them a check.

You are $3,000 better off than you were before the deal. You went from owing $5,000 and having $2,000 in PEZ dispensers, a net position of negative $3,000, to being flat. If it had been the other way around, if you had had $5,000 in PEZ dispensers and swapped them to clear a $2,000 debt, you would have undoubtedly complained about losing $3,000.

What is more, and I think this is a key point as far as the IRS is concerned, CCC will book a loss of $3,000 that will reduce their income for the quarter. To the IRS, there is a sort of Newtonian law of conservation of gains and losses. If a person or company is booking a loss, then somewhere somebody else must be booking the equal and opposite gain. If CCC took a loss, you need to take a gain.

Are there exceptions to this? Of course. In fact, there are lots of them. Three of the more significant ones are debts discharged in bankruptcy, debts forgiven while you are insolvent, and forgiven home loans. (Details of other exceptions can be found here (.pdf file).)

The exception for bankruptcy is, I think, based on practicality rather than any logical principle. A person unable to pay his debts is unlikely to be able to pay the government additional taxes. An extension of this idea is that debts forgiven while you are insolvent, as the IRS defines it, are excluded from income. As I wrote a few months ago, this is an exception that probably applies to many people with forgiven credit card debt and yet is not widely known and rarely mentioned in such places as blogs. So, many people pay more to Uncle Sam on forgiven debt than they need to.

Debt secured by your house -- a mortgage or home-equity loan -- that is forgiven is also excluded from income. This exception is relatively new -- it was enacted in 2007 -- and, you may be surprised to hear, actually makes sense and makes the tax code more consistent.

Imagine you were to buy an asset or investment other than a home with borrowed money, let's say a dry cleaners for $500,000 (with $400K borrowed). After a few years you realize the business just isn't working out. The dry cleaners is now worth only $300K. The lender agrees to a short sale, that is, you will sell for $300K, give that amount to the lender, and they will forgive the rest of the loan.

Under this scenario, you would get a gain of $100K from the forgiven loan, but you also have a $200K loss from selling the business. That nets out to a loss of $100K, which is, in fact, what you were really out on the deal.

The problem is that until 2007, if you did this with a house rather than a dry cleaners you would end up with a $100K taxable gain. Losses on houses cannot be taken off your income for tax purposes. (No whining: Gains on houses up to $500K for a couple aren't taxed at all.) With no offsetting loss to declare against the forgiven loan, you would wind up paying taxes on the $100K, even though you actually lost money on the house. Excluding forgiven home debt fixes this problem.

I'm not sure why the fact that forgiven debt is generally considered taxable income is surprising to so many. Perhaps the psychology is that if you know you can't pay the $5,000 to CCC, when they give in and accept $2,000 you don't think of them doing anything other than acknowledging the obvious. The $2,000 was about all you were ever going to pay them, so getting them to agree doesn't seem like a gain to you. Alas, it is.

As I said when I last discussed this topic, this is a murky area even by the obscure standards of the IRS code. If this is a more than academic question in your life, seek the assistance of a pro.

Related reading at Bad Money Advice:

Secured and unsecured debt

Why are Roth IRAs so confusing?

If taxes were going up

Charity telemarketers can be annoying

2009-09-30T17:03:00Z

Has a charity ever pushed and annoyed you to the point that you've cut them off?

When do you draw the line at giving? When they've hired a telemarketing company that pesters you, or if they send you too much mail?

"FMF" of Free Money Finance raised the question in a recent post called "Off my giving list." He stopped giving to a group he had generously supported because a telemarketer who called his house wouldn't take no for an answer.

"FMF" was on the treadmill when he took the call and calmly explained his family's approach to giving: "Any organizations that call us are asked to send us the details of what they are requesting in the mail. Then we can look over the information and take time to decide whether or not to give -- nice and logical like."

Bing: Telemarketing scams

But she pressed on -- repeatedly. It proved costly. "I reiterate what I just told her and she says (again) that she understands and we end the call. But that's not the only thing that's ending. My support for this organization is ending as well."

Some readers thought this was overkill; one even called him a jerk. But many made some observations, including:

Many charitable organizations contract with telemarketers, and some pay a substantial price, getting only 10% or 15% of the money that's raised. Look into what percentage of your gift would actually support the charity's work before you cut a check. Mrs. Micah explained how.
Often giving once to an organization will subject you to repeated calls, even if you tell the outfit to put you on its do-not-call list. (Charities are exempt from the federal Do Not Call list.)
Telemarketing is often a tough and thankless job. "We were taught to keep pushing to get the sale, asking for lower and lower amounts until we couldn't even get a $5 donation," reader George said. "We were taught to do this regardless of what the person on the other end said."
If a telemarketer behaves inappropriately, you should let the charity know.
Don't give your credit card number over the phone unless it's an organization you regularly deal with -- and the solicitor can prove it by, say, reciting your history of giving. Or, better yet, ask the caller to mail you payment information.
Hold your ground, and don't give in to guilt. That reminds us of another solicitation device: When a charity mails you free address labels or personalized notepads or other useful stuff, do you automatically send a contribution? (We have a lifetime supply of address labels, and we give the maps of the world from Doctors Without Borders to our neighbor's kid to distribute at the local Boys & Girls Club.)

Trent Hamm at our partner blog The Simple Dollar agreed with FMF's decision to cut the charity off. "I do the same thing. If a telemarketer from a charity interrupts me, I cease giving to them," he wrote. "I am a charitable person, but I value my family time and I don't want it intruded on by some ham-fisted telemarketer."

We think FMF was rather harsh. Here's what we do: We immediatelyy and politely decline to talk to anyone who calls soliciting money, unless it's an organization we regularly support. (Be careful. There are many scammers out there.) If we're interested in giving, we ask them to mail us a follow-up.

Related reading:

How much should you give?

The donations charities need most

Give and grow rich with charitable deductions

The 100 most useful sites on the Internet

5 incorrect assumptions of job seekers

2009-09-30T13:12:00Z

This post comes from Julie Rains at partner blog Wise Bread.

Many people are job hunting these days. I have worked with job seekers for many years and have found that these five common assumptions frequently derail a job search.

Being open to anything will increase my chances of landing a job. The search ought to have a focus: You should be targeting opportunities in a certain discipline or function; or you should identify the strengths you'd like to leverage and then uncover positions that match those strengths. The résumé should convey that focus; otherwise, you can't differentiate yourself from other candidates because you're not really great at anything but rather average at many things.

Bing: Write a better résumé

Hiring managers don't want to spend training and payroll dollars on a so-so candidate, especially in an environment where money is an extremely limited resource and a more qualified candidate is sure to surface soon.

However, it is true that job seekers need to be flexible when pursuing a new position. Depending on your current situation and long-term goals, you should be open to opportunities in a new industry, a smaller rather than larger company (or vice versa), and even a change of locale.

And, it's also true that job seekers snag jobs that are not perfectly in sync with their original targets. In these cases, here's what the hiring manager is thinking:

Tap into skills that the job seeker didn't realize were valuable (for example, a client of mine who was seeking a sales position was selected by a state agency for a position requiring client advocacy capabilities, which she possessed from years of volunteering in a similar role).
Hire "fresh" talent with no preconceived notions of how to approach a new market, reach a different kind of customer, etc.
Recruit people with a certain background because past, similar hires have been successful.

No one could possibly possess all of the qualifications required by the employer. I've seen job postings that seem to be an impossible-to-get wish list created by an optimistic hiring manager. For example, a sourcing position might list the following requirements (this is a partial list of requirements taken from an online job board posting):

MBA.
Experience in supply chain management, purchasing, and contract negotiation.
Working knowledge of SAP.
Professional designations, such as a CPM (certified purchasing manager).
Fluency in Mandarin Chinese.

Stay focused on pursuing opportunities that match your qualifications. Build and leverage your professional network. At the same time, consider boosting your skills through classes at the community college or volunteer experience.

So, while it's true that the perfect candidate may not appear for many job postings (or, more likely the company is required to advertise for an opening that is probably going to be filled by an internal candidate who does have these credentials), going for multiple long shots is probably not going to increase your chances at winning a fantastic job.

I can elaborate during the interview rather than including valuable information on the résumé. The defense of the extremely brief résumé is often that hiring managers won't read a long one. But there needs to be enough information to allow the reader to judge whether the candidate has minimum qualifications and enough talent and proven experience to contribute to the hiring organization. Otherwise, the sought-after interview will never happen.

Even if a résumé is two (or even three) pages, a well-designed format that allows quick scanning for critical information can get the document placed in the "maybe" pile for further evaluation. Compelling accomplishments and deeper-than-average descriptions of position duties may actually aid the screening and selection process, ultimately saving time for the hiring manager.

Certain topics, though -- for example, why you left a job after a couple of months -- are best discussed in the interview rather than detailed on the résumé.

The people who will hire me will understand my résumé. It's true that hiring managers will often have a better, more complete grasp of the industry and discipline-specific lingo that's on your résumé than your neighbor or even your best friend.

But the résumé will most likely be screened by a recruiter or human resources manager who may not have expertise in your field; and possibly scrutinized by higher-level staff and potential co-workers who may participate in the selection process. So, using understandable language is important to communicating your qualifications to as many people as possible (see my post on online job boards for ways to identify common terms and keywords). To appeal to a broader audience, mention collaborative abilities and team contributions; and emphasize accomplishments that not only helped your department improve but also boosted the company's overall performance.

A hiring decision will be made in a reasonable time frame. One of the most common mistakes is to assume that a hiring decision will be made according to a reasonable timeline and therefore (here's the dangerous part) you should wait before pursuing other opportunities. If you are happily employed and really want a particular position and no other position, then it is reasonable to wait until you learn of the decision. But very often, hiring decisions are delayed for long periods of time for reasons such as:

The position hasn't been officially approved by the corporate office.
Economic conditions and the company's needs have changed since recruitment began.
No great candidates have emerged with interest in the position.
The hiring process requires multiple levels of approval and rounds of interviewing.
Decision makers have been traveling on business for a few months.

Even when hiring managers provide a timeline to a candidate, they very often don't adhere to the schedule. And, in some cases, they choose a candidate but are not able to extend an offer.

Some job seekers seem to have a fear of having to make a difficult choice among more than one employer. But the savvy seeker keeps pursuing any and every opportunity, and even leverages salary negotiations by getting multiple offers. (See "How to play the post-interview waiting game" for more insights.)

What do you think? Have you reversed your assumptions since starting a search?

Related reading at Wise Bread:

How to turn your talent into multiple streams of income

The informational interview: What not to say and more

How to answer 23 of the most common interview questions

Shorts, TVs, media players, laptops

2009-09-30T12:48:00Z

Here are today's hot deals from dealnews.com.

Cabela's men's Caddie cargo shorts for $2.88. Shipping adds $5.95, or opt for free ship-to-store. Even with shipping, that's $27 off list and the lowest total price we could find.

Samsung 1080p LCD HDTVs from $869 after coupon. Plus, each set receives free shipping. With savings of up to $410, each television is at the lowest total price we could find.

Western Digital WD TV Live HD media player for $119.99. With free shipping, that's the lowest total price we could find by $8.

Refurbished Apple MacBook Intel Core 2 Duo 2.16GHz 13.3-inch wide-screen notebook for $559.99. With $18 for shipping, that's $22 under our mention from a week ago and the lowest total price we've seen for this model.

Oakley women's Fate sunglasses for $19. With $3.91 for shipping, that's $61 under list and the lowest total price we could find.

A year of food for $800

2009-09-29T21:59:00Z

A whole year's worth of food for one person for only $799.99? And that's after a $200 discount. Is this too good to be true, or should we order?

Well, there is one small catch. The offer is for 78 one-gallon cans of dehydrated and freeze-dried food, plus a wheat grinder. Now, that's an emergency fund you can eat.

Actually, the ad exposed us to a movement we weren't very familiar with. Called "food storage," it's about amassing enough food on hand to survive common disasters like earthquakes and hurricanes, or "economic crisis" or for "religious reasons," according to a Web site called Food Storage Made Easy.

While most people would consider enough food for a few days or a few weeks to be a sufficient emergency supply, these folks think in terms of a complete year.

And no worries about this stuff going bad. The online ad at Costco for the Shelf Reliance THRIVE $799.99 offer says, "With over 4,700 servings and many foods with a shelf life of up to 20 years, this package will give you variety, nutrition, and peace of mind." Shelf Reliance is not the only company that sells packages like this.

Bing: More about food-storage supplies

We're not going to run out and buy a year's supply of food with a 10- to 20-year shelf life. But being prepared for a short-term emergency is always a good idea. So we've learned a few things from the food-storage advocates:

Don't forget water. Plus, food-storage cookbook author Vicki Tate writes at Backwoods Home Magazine, "Make sure you add cooking oil, shortening, baking powder, soda, yeast, and powdered eggs. You can't cook even the most basic recipes without these items." Spices help prevent food boredom.
Keep some fun foods like pudding or candy, Vicki says. Grains and beans can get really old.
If you don't buy the No. 10 cans, store your supplies in food-storage containers. "If you are using plastic buckets, make sure they are lined with a food-grade plastic liner available from companies that carry packaging supplies," Vicki advises.
Learn how to cook what you've stored. You don't want to wait until after the tornado hits to familiarize yourself with the wheat grinder.

Does having a year's worth of food sound a bit alarmist to you? Another company that sells large supplies of freeze-dried and dehydrated food warns at its Web site, YourFoodStorage.com, that up to 2 billion people might get swine flu worldwide.

It also says, "We will NEVER sell you food storage that is left over from the Y2K days!"

Related reading:

The emergency fund you can eat

10 bulk-buying bargains

Becoming a savvy shopper

Worst dollar-store purchases

2009-09-29T17:48:00Z

We're all for dollar stores. They can provide savings, many people agree. At last count, 55% of about 423,000 people who have participated in an MSN Money online poll said they sometimes shop at dollar stores, and 36% said they frequently do. (Another 3% chose "I'd never set foot in one.")

But there are some products "rutgerskevin" of The Red Stapler Chronicles recommends you avoid, via his post called "The 10 dumbest things to buy at a dollar store." First on his list are home pregnancy tests.

Find on Bing: Dollar stores thriving in recession

Pregnancy test from the dollar store? That's a product you'd want to spend more on for a result you can trust. "I almost bought this just to see what it looked like, but the girlfriend vetoed this idea in disgust," Kevin said.

That gets to a point about dollar-store shopping. Some items, like gift wrap and shampoo, are perfectly fine as well as a bargain. But others are not. Dollar store batteries are often the carbon-zinc kind and will wear out quicker. Electrical cords and similar products may not be adequately tested for safety. Also, the MSN Money slide show "Dollar-store deals and duds" says, "Jewelry and vinyl lunchboxes have been recalled from dollar stores as dangerous sources of lead."

Other samples from Kevin's recommendations of dollar-store products to avoid:

Pens. He bought co-workers 10-packs of dollar-store pens, which didn't work or quickly broke. One leaked on a co-worker's shirt. "I was mortified!!" Kevin wrote (in mock horror).
Vitamins. They could be sugar pills, Kevin wrote. MSN Money said, "Several years ago, Consumer Reports found that half of the dollar-store brands it studied contained less of the vitamins than the labels indicated and didn't dissolve properly when ingested." Contrary to what you might expect, the U.S. Food and Drug Administration does not tightly control these products.
Any kind of paste, including toothpaste and treatments for rashes. MSN Money added: "In 2007, the Food and Drug Administration warned consumers that many brands of toothpaste found at dollar stores carried diethylene glycol, a poisonous chemical found in antifreeze."
Tampons. Considering the risk of toxic shock syndrome, we'd have to agree. You want to be absolutely confident about the materials they're made from.
Perishable food. Kevin found a box of fruit bars that was dated 2002. Maybe still safe to eat. "However, all signs pointed to this product being on various stores' shelves for seven years," Kevin observed.

Kevin's bonus tip: "If they spell the name of the product incorrectly, I would not put it in your mouth. Just some words to live by."

See more dollar-store duds in the videos at the bottom of this post.

Related reading:

Dollar stores: Where the deals are

The dollar food pantry

5 retailers thriving in the recession

Money lessons from classic movies

2009-09-29T13:48:00Z

This post comes from Jim Wang at partner blog Bargaineering.

Movies today can rely on special effects, monster marketing efforts, and a few pretty faces (*cough* "Transformers 2" *cough*). In the 1980s and early '90s, movies had to rely on the story and the acting to achieve success.

Out of that era, which coincided with my childhood, came a lot of classic movies that teach powerful lessons about how to deal with your money, how to approach your career, and how to find success in both.

Bing: Top classic movies

I thought it would be fun to pick out five lessons from just five movies from that era (one of them is from 2000, but no fancy special effects there).

Be careful whom you trust. Rocky is one of the iconic film franchises of my generation and there is a powerful financial lesson to be learned in the fifth film. If you remember, it's in "Rocky V" that you learn of the health effects of fighting the Russian machine, Ivan Drago. You also learn of Rocky's financial woes when he discovers that Paulie, his wife Adrian's brother, signed over power of attorney to Rocky's accountant. The accountant then proceeds to lose all of Rocky's money flipping real estate.

The lesson here is that you have to be extremely careful whom you trust, especially when it comes to your money. As you acquire more money, you put it into the hands of mutual fund managers, financial advisers and other "experts." You have to carefully vet them and I believe you should never sign over power of attorney.

Fake it until you make it. In "The Secret of My Success," Michael J. Fox plays Brantley Foster, a laid-off financial analyst who sneaks into a new job as a mailroom clerk at his uncle's company. From there, he finds out that most of the executives are making terrible decisions and starts to fake being an executive. The movie is a classic and the iconic scenes include Fox changing from the casual wear of the clerk to the suit of the executive while in an elevator.

The lesson here is that sometimes you need to fake it until you make it. Some use the adage "Dress for the job you want, not the job you have." In the end, the message is the same: If you behave as if you belong somewhere, then you do. In the end, what's the difference between pretending and being? Nothing, really. (I don't advocate deception or lying though. I believe that crosses the line.)

All we need is the right opportunity. "Trading Places" is an awesome movie and one of my favorites. In "Trading Places," two commodity traders, Mortimer and Randolph Duke, decide to conduct a little social experiment. They want to know if the rich and successful are that way because they started rich and whether a common street criminal could achieve the same given the same starting point. So they take Eddie Murphy's character, street hustler Billy Ray Valentine, and have him swap places with Dan Aykroyd's character, a successful broker.

Life isn't fair, but sometimes two rich guys decide to make a bet and give you the keys to the kingdom to see what you'll do with them. The lesson here is that you should always be working hard, whether it's trading orange futures or street hustling, so that you can take advantage when an opportunity presents itself.

Keep emotions in check. "Bull Durham" is one of the most well-known baseball movies in history. It involves veteran catcher Crash Davis, played by Kevin Costner, and a powerful rookie pitcher named Nuke LaLoosh, played by Tim Robbins. Crash is brought to the minor league team to try to mold and shape the promising Nuke. In their first meeting, which is in a bar, they almost come to blows as Crash taunts the hot-tempered Nuke.

The lesson here is that you need to keep your emotions in check. Had Nuke struck Crash, he could've broken his hand, ended his minor league career, and never achieved the success he would get to enjoy later. With finances and your career, you need to keep a level head. When making stock investments, don't let your emotions make decisions for you.

Don't do anything illegal. "Boiler Room" isn't quite a classic movie but it does have a powerful lesson to tell. It follows the story of Seth Davis, a college dropout who is running an underground casino in his house. He eventually gets a job at a brokerage, where he's paid to get rich investors to buy into penny stocks his firm is pumping and dumping.

At first he doesn't realize how the scheme works and that what he's doing is illegal. He sees only the lavish lifestyles the more senior brokers are living. Eventually he realizes he's just scamming people of their hard-earned savings.

There are two lessons in this movie. The first is that you shouldn't let greed overcome your decision-making process. The allure of a hot penny stock is like the siren song of Peisinoe, Aglaope and Thelxiepeia; it can make you do some crazy things.

The second lesson is that you shouldn't ever do anything illegal.

Related reading at Bargaineering:

7 steps to improve your credit score

FHA mortgage loan requirements

2010 federal tax brackets

Security cameras, wallets, mouses, watches

2009-09-29T13:34:00Z

Here are today's hot deals from dealnews.com.

Q-See professional dome color security video camera for $34.99 with free shipping. That's a $9 drop from our February mention and the lowest total price we could find.

Joe by Joseph Abboud men's leather Passcase wallet for $16.99. With free shipping, it's the lowest total price we could find for this wallet by $2.

USB finger optical mouse for $4.99 with free shipping. That's the lowest total price we could find by $2.

Nautica men's NSR 01 chronograph watch for $82.98 with free shipping. That's tied with our July mention and is the lowest total price we could find by $45.

Samsung Memoir T929 smart phone for T-Mobile for $49.99. With free shipping, that's $50 under our mention from earlier this month and the lowest total price we've ever seen for this phone.

Why his kid will drive a beater

2009-09-28T23:42:00Z

The first car owned by Paul Van Lierop, the FiscalGeek, was a 1977 AMC Gremlin, presented to him for his 16^th birthday. The year was 1989. If cars are a personal statement, it was a disaster.

"'Wayne's World' had not come out," Paul wrote. "AMC Gremlins, Pacers or Hornets were definitely not cool. I was actually laughed at by scores of kids the day I drove it into the parking lot of our high school."

Why would he now insist that his own kids' first cars will be equally used and unhip? He listed seven good reasons in a post called "Why my kids will drive a piece of crap." It's a fun read and also prompted many readers to reminisce about their first vehicles.

(Ours was an ancient VW Bug we bought for $500 when we finished grad school.)

Among Paul's seven reasons:

A crappy car builds character. Paul said, "Snap materialism in the bud right at the age of 16 just by the gift of a Ford Fiesta, a K-car, or a Terdcel."
It puts that sense of entitlement people have in proper perspective. Maybe that old car truly is good enough.
The kid learns new skills, like car maintenance and repair. This car will need fixing.

Paul anticipated a backlash from parental types who buy their kids only the newest and safest models. His response: Plenty of older cars are safe too.

But what if it breaks down? "We don't want Jimmy or Cindy stuck by the side of the road at night," he can hear them say. "Give them a prepaid cell phone and a AAA card. Done."

Related reading:

Bing: Safe cars for teenagers

Should you buy your kid a car?

Cut the cost of insuring your teen driver

Make your car last 250,000 miles

Cause of death? Lack of insurance

2009-09-28T20:59:00Z

A new Harvard study estimates that nearly 45,000 Americans die each year because they don't have health insurance -- and that's after other factors like income and unhealthy behaviors are taken into account.

"Deaths associated with lack of health insurance now exceed those caused by many common killers such as kidney disease," an article by the Cambridge Health Alliance reports.

The study says the uninsured have a 40% higher risk of death than people who have private health insurance -- like the insurance you get through your job. Or, to put it another way, a person dies because of a lack of insurance every 12 minutes.

Of course, some people neglect their health. But many, we suspect, don't see a doctor because they're afraid of the cost. Doctor visits and tests can add up to an intimidating amount, even if you're uninsured but have a good income. A CNN story put a human face on some of these avoidable deaths -- a freelance cameraman, a self-employed mother of two, and a 25-year-old woman who worked in a movie theater.

So we had to wonder: Have you put off visits to the doctor because of financial considerations?

Overall, 15.4% of Americans don't have health insurance. The study breaks it down state by state, (.pdf file). For example:

In Texas, where just under 30% of people lacked insurance in 2005, annual deaths attributed to being uninsured was 4,675.
Here in Montana, the percentage of uninsured was 19.4%, and 147 people paid the ultimate price.
In Florida, where 26% were uninsured, the death toll attributed to lack of insurance was 3,925.

Also consider that the number of deaths blamed on lack of insurance is 2.5 times higher than it was in 2002, due to several factors. The study found that:

More people are uninsured. The U.S. Census said 46.3 million people were uninsured last year -- and since then millions of people have lost jobs.
The safety net for the uninsured has larger holes, as nonprofit hospitals and clinics have closed.
The quality of care for those with insurance has improved. "We doctors have many new ways to prevent deaths from hypertension, diabetes, and heart disease -- but only if patients can get into our offices and afford their medications," Dr. Andrew Wilper, lead author of the study, said.

"We're losing more Americans every day because of inaction ... than drunk driving and homicide combined," Dr. David Himmelstein, a co-author of the study, told Reuters. Himmelstein and his wife, study co-author Dr. Steffie Woolhandler, founded Physicians for a National Health Program.

Related reading:

A survival guide for the uninsured

It's not health care reform unless ...

How to fix health care

Look abroad for cheaper health care

Survey: Driving while texting should be illegal

2009-09-28T18:26:00Z

This post comes from James Limbach at partner site ConsumerAffairs.com.

The vast majority of U.S. drivers believes handheld texting while driving is very dangerous and should be banned nationwide, according to a new survey.

The survey, conducted by Penn, Schoen & Berland Associates on behalf of the Ford Motor Co., found that 86% of U.S. drivers believe handheld texting while driving is "very dangerous" and 93% support a nationwide ban on it.

Bing: Which states ban driving while texting?

At the same time, only 42% of those asked think drivers would stop texting behind the wheel if the practice were banned. However, more than 75% say there would be more compliance if hands-free or voice-activated technologies were widely available.

"Research shows that activity that draws drivers' eyes away from the road for an extended period while driving, such as text messaging, substantially increases the risk of accidents," said Jim Vondale, director of Ford's Automotive Safety Office. "That is why we support a nationwide ban on handheld texting while driving and why Ford has developed hands-free and voice-activated technologies to allow drivers to remain connected, but to do so while keeping their hands on the wheel and their eyes on the road."

Ford last week endorsed a proposed nationwide ban on handheld texting introduced by Sen. Charles Schumer and Rep. Carolyn McCarthy, both New York Democrats.

The survey shows that 67% of drivers said they believe voice-activated technology is a safe alternative to texting, and 76% said it would be an appealing feature in a car.

The survey results come as the U.S. Department of Transportation is scheduled to host a summit on driver distraction in Washington, D.C.

According to the survey, there is confusion among drivers over existing state laws prohibiting handheld cell phone use and/or texting while driving. A total of 18 states have enacted such bans, but nearly 40% of drivers in those states indicated they were unaware of the ban.

Research on driving solutions

According to an NHTSA-sponsored 100-car study conducted by Virginia Tech Transportation Institute, driver inattention that may involve looking away from the road for more than a few seconds is a factor in nearly 80% of accidents.

"A growing number of drivers are using handheld wireless communications and music-playing devices while driving," said Louis Tijerina, Ford senior technical specialist. "Research clearly shows that manual operation of those devices that takes the driver's eyes from the road for an extended period of time creates the kind of distraction that causes accidents."

In addition, said Jeff Greenberg, senior technical leader for Ford Research & Advanced Engineering, "Our studies show that teens are much more willing to take risks while driving, such as manually dialing on a mobile phone in situations that demand greater attention."

Related reading at ConsumerAffairs.com:

New insight into cell phone use and driving distraction

Feds withheld data on cell phone dangers

Cell phone conversations district drivers, study finds

Boss, can I work from home?

2009-09-28T16:34:00Z

This guest post comes from David Weliver at Money Under 30.

For today's information workers, offices don't make sense. Why commute in rush-hour traffic to sit in a cube and write, research, and make phone calls -- all things you could do anywhere? For many workers, ending -- or at least reducing -- daily treks to the office may be as simple as asking their employer. Especially in challenging economic times when employers can't always offer raises, companies may actually see telecommuting as an affordable way to keep employees happy.

Bing: The worst commutes

If you have ever considered telecommuting but don't know how to approach your manager about working from home, here's a look at things to consider before requesting a telecommuting arrangement and a way to propose working remotely to your manager in the best possible way.

Is working from home a good idea?

Even in a recession, younger workers "still value work-life balance above all else when listing top characteristics of an ideal entry-level employer, placing it well above other factors such as salary and meaningful work," according to a BusinessWeek survey.

The ability to work from home certainly helps with work-life balance. But as great as working from home sounds when you're stuck in gridlocked traffic or smelling your officemate's leftover fish tacos, there are drawbacks. When you work from home, you:

Give up social interaction with co-workers.
Lose visibility with management.
Must become extremely self-disciplined.
Blur the line between work and home.

Employees who work from home -- either by choice or because their employers require it -- risk being passed over for promotions. According to a report on executives' opinions on telecommuting:

More than 60% of global executives surveyed by the Korn/Ferry International subsidiary believe telecommuters are less likely to advance in their careers in comparison to traditional office workers. Interestingly, though, 78% of those execs feel telecommuters are either equally or more productive than those who work in offices.

What's more, remote workers may also find themselves working at odd hours; answering e-mails at 10 p.m. or picking up the phone when it rings after 5 p.m.

Given the downside to telecommuting, working from home isn't for everybody. If your career plans involve moving up the corporate ladder as fast as possible, it's best to stay in the office where you'll be in front of managers all the time. Are you terrible at managing your time? Another sign you should probably stay office-bound. If, however, you spend the majority of your workday online or on the phone and still like the idea of working remotely, it's time to make your dream a reality.

Selling your boss on the idea

Before you approach your manager about telecommuting, you need to put yourself in his/her shoes. Even better, put yourself in his/her manager's shoes. As you begin to ponder that, write down the answers to the following questions:

Why do you want to work from home? Obviously it's not because you want to slack off, but if you don't give your boss a better reason, that's what he/she might assume. Are you trying to mitigate the stress and cost of a horrendous commute? Do you want to spend more time with a young child? Best yet, do you feel you can be more productive working at home -- without the distractions of meetings and office gossip?

What's in it for your boss -- and the company? Whenever you want something from your employer (be it a raise, a promotion, or a flexible work schedule), you had better be able to offer something of value in return. You shouldn't approach your boss about working from home unless you believe your contributions to your employer are valued. You should also be able to explain how working from home will enable you to deliver even more value -- you'll be more focused, more productive, and less distracted at home.

How will your boss manage you? Many managers' big fear about letting an employee work from home is losing control. How will your boss know you are being productive? To alleviate the concern, suggest clear ways for your boss to measure your performance working from home. Perhaps you'll set weekly goals and report back on what you accomplished.

How can you compromise? Unless your company is cramped for office space or actively promoting telecommuting, don't expect your boss to say "Great idea! Start tomorrow!" when you ask to work remotely. He or she will probably say "No" or "I'll have to think about it." So be ready with some compromises. See if your manager will let you try out working from home one or two days a week, for example. Or, offer to sacrifice your next pay raise (a great bargaining chip if you're a great employee and the company is tightening its belt in the economy; they'll want to keep you happy, but would love the opportunity to do it without paying you more).

Sample work-from-home proposal

Complete this propsoal, schedule a face-to-face meeting with your manager to bring up the idea, and then e-mail this proposal as a follow-up.

As we have discussed, I continue to make tremendous contributions to [your company name] by [describe your contributions]. In fact, just last month I [give a specific example of something really great you did].

I believe I can be even more productive and deliver even more value to our company with the opportunity to telecommute. Because my position requires work that is solely online or on the phone, I can perform my job with fewer distractions and even more productively from my home office.

Telecommuting will improve my work-life balance and job satisfaction and will hopefully contribute to a long and successful tenure here.

If you will consider my request for telecommuting privileges, I am confident we can establish clear and actionable goals and reporting mechanisms that will allow you and me to work even more productively together.

Thank you for considering my request. I look forward to discussing the possibility further.

I know dozens of former co-workers who have used these tactics to successfully arrange full- and part-time work-from-home privileges -- even four-day workweeks. If you're interested in working from home, I hope they work for you.

What do you think? Did you go from working in an office to working from home full or part time? How did it happen? What other strategies would you recommend for somebody dreaming of working from home?

Related reading at Money Under 30:

10 easy ways to simplify your finances

No credit history? Prepare for an uphill climb to auto, home financing

What percentage of your income should you spend on mortgage payments?

Facing a financial crisis

2009-09-28T13:23:00Z

This post comes from J.D. Roth at partner blog Get Rich Slowly.

An anonymous GRS reader submitted a question last week that hits close to home:

I have a family member who this past year has been in serious financial trouble. He is one of the most ambitious and intelligent people I know and I would have never imagined him getting in this kind of trouble. His ambition may have been his downfall as he keeps shooting for the stars and has fallen short on some of his business ideas, which may have put him in a more vulnerable position when the economy turned south.

He is now living in debt and struggling to put food on the table for his wife and four young boys. He has had to live on credit cards for several months and they are all maxed out. I have never seen firsthand anyone in this much trouble.

My question to you is: When faced with job loss and depleted savings, how can you avoid going into credit red? To what lengths would you go to avoid living on credit cards and missing payments on just about everything? In the situation, is credit rating even worth anything?

As I say, this situation hits close to home. Last year, I wrote about my little brother, Tony. (I say "little brother," but he's 36 now.) Tony's family got caught up in the mortgage mess, buying a home in Bend, Ore., at the height of the bubble -- and before their home in Portland, Ore., had sold. Six months earlier and things would have been fine. But things weren't fine. They couldn't sell either house. The market went to hell and they lost both homes to foreclosure.

Tony now faces circumstances similar to those described in the question above. He's learning that there's no easy solution to a family financial crisis. His father-in-law recommends "earning your way out of the problem." That's a fine theory, but not always practical. Tony and his wife work hard, but they're able to earn only so much. I think that he -- and people in similar situations -- should also:

Cut spending to the bare minimum. This can be difficult. It can be tough to shift from normal spending to frugality, especially if you're accustomed to middle-class luxuries and a middle-class lifestyle. But when facing a financial crisis, it's imperative to reduce spending as much as possible and as soon as possible. You must stop the bleeding before you can treat the wound, before it can heal.
Consider drastic measures. Sometimes it's not enough to stop the bleeding. To stretch the metaphor, sometimes you need to amputate. If you're in a financial crisis, you may have to take drastic action, maybe even selling a car -- or your home. Most people are unwilling to consider steps like these, which only leads them further into debt. These folks need to ...
Be brutally honest. It's easy to say, "I'm in trouble now, but it's only for a month or two. I'll keep doing things as normal by using my credit cards." If you find yourself in a financial crisis, try to take an objective look at your situation. Get outside advice from friends and family. Be willing to listen to what they tell you. Sometimes others are better able than we are to see the slack in our budgets.
Avoid touching retirement savings. When faced with financial peril, it's easy to look at the large sums sitting in your retirement accounts and think they'll provide the life preserver you need. In nearly every instance, though, you're merely postponing the pain. Your retirement savings are there to provide for you when you're no longer able to provide for yourself. They're not an emergency fund.

I'm sure that other Get Rich Slowly readers have family members in similar situations. Perhaps you're even struggling yourself (or have done so in the past). Based on your experience, what advice can you offer other folks who are struggling in this economy? What can be done to avoid sinking deeper and deeper into debt?

And as an ancillary question, what can we do to help family members in need? What should we do? I've told Kris that if Tony and his family find themselves in danger of living on the street, we'll make room for them in our house. But what about before that? At what point do I loan him money? (Or gift him money?) Or should I just be here to offer advice when he needs it?

Related reading at Get Rich Slowly:

Free e-book: The Get Rich Slowly guide to Roth IRAs

Drama in real life: Foreclosure!

Kansas or bust: Considering the cost of living

Jackets, movies, pressure suits, watches

2009-09-28T11:44:00Z

Here are today's hot deals from dealnews.com.

New Balance men's 8103 Convertible jacket for $26.99. With free shipping via coupon code JNBOFREESHIP, it's the lowest total price we could find by $64.

Blu-ray disc movies for $4.99. Shipping adds $2.49, or opt for in-store pickup. That puts most titles at or near the lowest total prices we could find.

Six Six One pressure suit for $104.99 plus $7.44 for shipping. Coupon code 2X9-1-YEL9U cuts it to $89.97. That ties our mention from two weeks ago as the lowest total price we've seen.

Dolce & Gabbana men's time chronograph watch for $86. With free shipping, it's $15 under our mention from July and the lowest total price we could find by $99.

Roundhouse Kick Range T-shirt for $7.99. With $1.99 for shipping, it's the lowest total price we could find for this Chuck Norris-inspired shirt.

When to keep the truth to yourself

2009-09-25T22:28:00Z

This guest post comes from "vh" at Funny about Money.

Why, when we're confronted, do we tend to blurt out the truth, even when it works to our disadvantage to do so? Chaucer had it right when he said that "truth is the highest thing that Man may keep." Sometimes we should keep it to ourselves.

Asked in the right way, we'll often reveal private, sensitive information that's strictly none of anyone's business, that's valuable to people trying to manipulate us into buying products and services, and that can be used to pester or even harass us. Warranty cards with long lists of personal questions are especially egregious: What about your favorite sporting event and the magazines you read is needed to guarantee a flashlight's performance? And how often do you give your phone number to companies that have no need to know it?

When my mother was young, back in the Early Pleistocene, she worked for the telephone company. Long-distance phone tolls were a pricey, moneymaking item, and people would try all sorts of scams to rip off a free call, ranging from disallowing calls they actually made to charging calls to someone else's phone number. My mother's job was to investigate claims of fraudulent charges. To get started, she would telephone the number that a customer said didn't belong on a bill. When someone picked up the receiver, she would say she was calling from Pacific Bell and then quickly ask who called that number on thus-and-such a day at thus-and-such a time.

Incredibly, she said, about 90% of people would blurt out the truth. When you're asked a question you don't expect, point-blank, you're likely to answer accurately even if the answer works against you.

In a general way, ethical people tell the truth. On the other hand, those who commit petty larcenies like stealing from the phone company are not ethical -- and so why should they, by impulse, speak truthfully? It's a deep-seated instinct, one that in the marketplace is too often used against us. Information we share for no other reason than that some stranger asks us is routinely sold to other merchandisers.

The other day when I went to get a flu shot at a grocery store clinic, I was asked (among other things) for my e-mail address and telephone number. I left the e-mail address blank, figuring that if they pressed me I'd say I don't have a computer or give them my junk gmail address. But under the mild stress of having to get a shot (I really do dislike injections of all kinds), I completely spaced the fake phone number I normally use in some circumstances. Well, actually, it occurred to me that if something was wrong with the vaccine they might need to call, so gave my office number.

I immediately regretted it. An exception to the national Do Not Call law allows companies that you do business with and all their subsidiaries to pester you with phone solicitation. So now I can expect nuisance phone calls not only from Dr. Mollen's health care enterprise, but from any other company even vaguely related to it.

OK, I'm not advocating that we should routinely lie. However, I think when marketers try to extract private information for which they have no use other than to sell it or to sell something to you, you're well within your rights to refuse to share it. And when pressed, to respond with disinformation. For example, I have a phony telephone number printed on my checks. No law says you have to tell a merchandiser the truth, nor is there any need for a retailer to have your phone number for no other reason than that you paid for a product with a check. If the check bounces, the bank will come after you.

Similarly, my Safeway club card bears my dog's name and the telephone number of Safeway's corporate offices.

Some retailers will themselves lie when you ask not to have a phone number used for solicitation. The first time I bought an appliance at Sears, the salesman asked for my number so the installer could call to make an appointment. I specifically stated that I did not wish to receive sales calls, and he specifically stated that my number would not be used for phone solicitation. He said he was entering a do-not-call note in the database. Within days, I was getting nuisance sales pitches from Sears. Requests that they take me off their list were ignored. It took weeks to get them to quit badgering me, and they did only after I complained to a state consumer protection agency and the Better Business Bureau.

Big Brother is watching you, but unlike Orwell's nightmare vision, he ain't the government. Big Brother is the corporate shadow government, the one that follows your every step on video cameras and keeps tabs on every magazine you subscribe to, every prescription you buy, how much you earn and where you earn it, and every deep breath you take. You're well within your rights to protect your privacy. Remember, with the exception of some financial institutions, the courts, and the IRS, no law requires you to answer a nosy question.

Related reading at Funny about Money:

Living within your means is good for the economy

How much financial help to give a family member?

Recession ‘over': Will you spend more now?