The Wesabe blog

Before Jason and I started Wesabe, I talked for a while about starting a company called GripeJuice, which would be a “call-center tool for the other side of the phone” — that is, a tool you could use as a consumer to keep track of your interactions with customer service centers. Basically, it would be a web site where you could go and create a log of customer service calls you make, and record those calls so that you could play them back later. Whenever I’ve had a big dispute with a utility company like the phone company, I’ve always found that keeping a log makes it much easier to get a resolution. “I’ve called you six times and sat on the line for over two hours trying to get this resolved. Isn’t that costing you money?” When things get really bad, sending a log like this can add a lot of weight to a written complaint. I also thought that aggregating which customer service centers did the best for people would be great — if I could see that Sprint hangs up on its customers more than any other cell phone company, say, that would really matter in my decision to use them. (Yes, Sprint has hung up on me more than once, and refused to do jack about it when I’ve complained.)

I decided not to start GripeJuice because I was very excited about Wesabe, and because I thought there were some potential problems with the GripeJuice idea. (Now, I use that analysis as part of my talks for entrepreneurs, because it’s great to have a real decision to explain evaluating an idea.) Nonetheless, I thought there were a lot of great things about the idea, too, and have wished such a service existed.

Fortunately, three Stanford grads have come up with a very similar idea, and have implemented most of what I wanted to do, and things I never thought of. Their site is called 321-CALL-LOG (found via The Consumerist), and it looks like they’ve done a fantastic job making this a real service. Here’s their report on Sprint, for instance, which doesn’t yet show any data, but does show what they’re tracking: number of calls, length of calls, customer’s rating of the call, and how often Sprint disconnected the call. They also provide you with information about getting through the company’s phone tree (like gethuman.com), and a way to create email logs, too. They’ll notarize your logs, so if you’re in a legal dispute, you can have very authoritative records as evidence.

I’m really happy to see the service appear. They’re currently in beta, but I’d love to hear from anyone who has given it a try. I’ll probably use it the next time I have to deal with a call center. If you do, remember to start off the call by telling the call center employee, “For quality customer service, this call may be recorded.”

It’s getting towards tax time (here in the U.S.). Great news, huh? Not so much.

Getting organized for tax time can be a huge pain, so we’ve done what we can to make it easier. If you use an accountant, you can already export your Wesabe data in Excel format (using our CSV export under “Manage your Account”). Every accountant I’ve met supports Excel import. But what if you use a tax preparation program, like Intuit’s TurboTax or H & R Block’s TaxCut?

Both of those programs support an import format called TXF, or Tax Exchange Format. We’ve added a TXF export tool to Wesabe, so that you can export your tax-related tags into either program (or any other tax program that supports TXF). We’ve done this by allowing you to assign each tag you want to export to the IRS Form and Schedule where you want it to appear. In either program, you’ll be prompted to import your data as you go through the interview process. You can find the tax export feature by going to the Accounts tab and clicking on “Tax Export” in the left-hand column.

Please let us know how this works for you — after launching it, we came up with a bunch of ideas for improving it in tax years to come, but we want to hear from you. Each year, we’ll make taxes as easy as possible — and if we could get rid of them altogether for you, we’d do that, too.

Since we’ve gotten a bunch of questions about USAA, particularly about eligibility and its Deposit@Home service, I got in touch with one of the people from USAA who’d commented on an earlier post. Katie Spring is the VP, Public Communications for USAA, and she was kind enough to write up some answers to questions I’ve heard abut USAA. You’ll see that not all of the answers are complete, nor will they satisfy all the people who have asked me about the bank, but I thought they would still be well worth posting. USAA continues to win awards for customer service, and that’s worth paying some attention to. I’ll list my questions with Katie’s answers.

Who is eligible for USAA banking? Did the requirements for USAA Federal Savings Bank recently change, and if so, what is behind the change? What does USAA recommend for people who are not eligible to join? Do you plan to make banking available to more people over time?

“USAA is committed to providing financial security to members of the military and their families. We offer financial planning, insurance, banking, investments, and life insurance. We strive to offer the most competitive prices and the best service — period. Regarding membership in USAA…as you know, we serve a niche market – members of the military and their families. By focusing on this group we can provide the very best service and offerings. If you or your parents served in the military, you’re likely eligible for USAA. And since membership is passed through generations, if your parents had USAA, you’re eligible, too (even if they – or you – didn’t serve). Readers can take less than a minute to check out if they’re eligible to join USAA by visiting usaa.com – it’s very quick and easy.”

What’s driving Deposit@Home, the UPS Store deal, and so on? Are these services primarily used by members stationed overseas, or are they used extensively within the US as well? What has been the reaction to the Deposit@Home service?

“You asked about Deposit@Home. Have you ever had a paper check and thought it was inconvenient to deposit? Well, now USAA members can take those checks, go to usaa.com, scan the check, and your account will be credited in about one minute. Yes, one minute. Try it. Just void the check when you’re done – you don’t need to send it to us – since you’re our member, we trust you!”

It seems like remote accounts (where the account holder does not have a local branch office) are going to become a lot easier to use because of Internet banking — are there other things we can expect to see to make remote banking more convenient? (For instance, one question I get is how to deal with cash deposits for USAA accounts. Have you thought about partnering with Western Union or a similar service to accept cash deposits remotely?)

[No direct answer on this one, but later in the email she mentioned one thing worth noting:]

“Later this year, we’ll roll out our mobile banking program, which will allow members to access accounts from their cell phones and elect to receive cell phone alerts regarding the status of their accounts.”

Was the UPS Store service not used, or was it removed for other reasons? (Assuming I have it right that the service is no longer offered.)

“Regarding QuickPost – the service that allowed members to make deposits at UPS stores – that’s been discontinued and replaced with this even more convenient Deposit@Home.”

What about USAA’s business makes it different than other banks? Do you believe that it’s simply a matter of investing more in better customer service representatives, or does your membership structure enable you to offer a level of service that would be impractical otherwise?

“What makes USAA different from other banks? For starters – it’s more than just a bank. USAA is the only financial partner that’s a true one-stop-shop, where we look at you and your family’s WHOLE financial picture and give you free, objective advice about everything from budgeting to planning for your retirement. While some folks remember us as an auto insurer, today we are much, much more.”

I very much appreciate Katie’s answers — while I didn’t get every question answered, I’m glad to have something definitive on some of these points at least. Since cash deposits remain the most frequent question I get, hopefully my Western Union suggestion will make it to the product developers!

I’ve had a number of people tell me they’re not interested in using Wesabe, but do I know of a tool that….? And I say, yes, Wesabe does that. They think of Wesabe as the web site we provide, when we think of Wesabe as anything we do to help people take control of their money. Seems like it would be worth getting a few of these capabilities into the Brain of Google here on a Sunday night.

1. You can use Wesabe to convert QIF, OFC, OFX, or QFX (all of which are data formats which your bank or credit card might provide for download) to XML, CSV, or Excel format. First, import your data into Wesabe, then click on your username at the top of any page, then click “Manage your Account.” You’ll see links to download your data in the format you want. (As I’ve said before, we’re going to keep expanding this part of Wesabe until we import and export every format we can.)
2. You can use Wesabe to convert your bank’s MC/NOT VRY HELPFL 0028472-39 (er, “not very helpful”) names for your expenses to names you can clearly read and use. Some people prefer to track their expenses in Excel or Google Spreadsheet, rather than in a personal finance tool or site. By cleaning the data with Wesabe’s community editing — where any user who edits a merchant name helps every Wesabe user who shops at the same merchant — you can remove a lot of the work you’d have to do cleaning that data by hand in a spreadsheet. (The steps for doing this are the same as converting file formats in #1 above.)
3. You can use Wesabe to find out how much you can expect to spend at a business. For instance, if you want to try out a new auto shop, you can look up the average amount Wesabe users spend at that shop, and compare it to the average price at other auto shops in your area. You can even use this to build a budget, when you’re estimating new expenses. You can find a Wesabe report on a business by typing the business name into the search box at the top of any page, and hitting the search “Wesabe” button. Note that you don’t need to upload your own data in order to use our search engine. (This capability just got a lot better, since Coda spent several weeks improving our search engine recently.)

We love it when you use the Wesabe site. But we think we’ll do much better giving you whatever tools you need to manage and control your money than we would by trying to lock you into any particular program, interface, approach, or philosophy. Feel free to let us know what more we can do — even if all you want is a way to clean up your data or research businesses or tips. Come on in; we want to help.

The ever-useful Red Tape Chronicles on MSNBC.com has a great story on trying to track down the “Service Fees” that show up on bank statements everywhere, every month:

The other day, colleague Andy Gallagher showed me his fee-laden Wachovia checking account statement, his blood boiling from unintelligible fees. But it was the “more info” thing that really stuck in his craw. You can see why by looking at the graphic below.

“What’s this for? I have no idea,” he said, pointing to the $3 fee on the screen. Seeing the swelling veins in his neck, I set out to find “more info.”

Bank fees are a powerful source of revenue for America’s financial institutions, and one of consumers’ top headaches. If it feels like the bank fee noose has closed tighter around your neck in recent years, it has. The Federal Deposit Insurance Corp. says the nation’s largest banks now generate 44 percent of their revenues from fees. Estimates of how much that amounts to vary between $30 billion and $50 billion a year, but it’s clear banks are rolling in money they take from customers, often without explaining themselves very well.

This is absolutely a huge problem for every consumer. The idea of banks charging fees where they won’t even tell you what they mean is, as far as I’m concerned, reason enough to leave that bank. Of course, they will tell you what it means — they just won’t make it easy for you to know:

Andy had the same question so many other American consumers find themselves asking every day: What the #%$& is this fee for? The Wachovia Web site provided no answer. Despite its lofty promise, there was no “more info.”

But Jim Baum, a Wachovia spokesman, did find “more info” for me. The service fee represents a recurring fee Andy is charged every month for the type of account he has, called a “simplified checking account.” Baum recommended that Andy upgrade to another, free account. I said that wasn’t the point.

“Why isn’t there ‘more info’ where the site promises ‘more info?’” I asked. […]

In the meantime, another Wachovia spokesman, Matt Wadley, pointed out, correctly, that the bank does have a 24-hour hot line customers can call with questions like mine.

Mr. Wadley is correct that you can call your bank to ask about a fee. When I recently called Washington Mutual about a fee listed on my bank account after an ATM transaction, though, they told me that they had no way of knowing the cause of the fee, and that I’d have to go to the branch where the transaction took place. When I did, that branch told me I’d have to go to the branch where my account was housed. So the process I had to take to track down a fee was:

1. Go to WaMu.com and see that the fee had happened.
2. Call WaMu’s 800 number and ask about the fee.
3. Go to the branch where the ATM was and ask about the fee.
4. Go to the branch where my account was opened and ask about the fee.

(I’ll talk more about this experience next week — it was, to say the least, instructive.) Why do they make it so difficult to track down these fees? The answer is breakage — the more steps they put in your path to request a fee reversal, the less likely you are to follow through. They don’t want to make it impossible, since that would be bad press; they just want to make it onerous, as onerous as needed to maximize fee revenue.

Every time you are told you need to make another call or complete another step, you should think, “This is designed to create breakage. They’re trying to get me to give up.” Then, don’t give up. Banks put this many steps in front of you specifically when it’s worth your while. When you give up, their revenue increases.

I’m glad the Red Tape Chronicles dug into these fees. As you saw, when they dug in, there was a free account alternative available. Look for these small monthly charges, call your bank, and say, “I don’t want to pay this fee. How do I do that?” If the answer is that the fee is required, change banks. (See also “A TOTALLY AWESOME economics paper” for more on this.)

Via Consumerist, here’s a great list of 35 most outrageous fees (and how to avoid them) from Money Magazine. Definitely worth checking out. If you haven’t already read it, be sure to check out our two-step primer on taking advantage of companies that charge these fees. “Fee Free” is a Wesabe rallying call…

The big news in gifts over the past few years has been gift cards, credit card-like gift certificates, often tied to a particular retailer. One survey, via Payments News, has it that gift cards have passed traditional gifts in the preferences of U.S. consumers:

Picking out just the right gift for oneself proved an important feature of gift cards among consumers according to the Blackhawk Network survey, with 88 percent of respondents stating “I can get what I want” as the number one reason they like receiving gift cards.

Similarly, 73 percent of gift givers stated their primary reason for purchasing gift cards as “I want the person receiving the gift to get what he or she wants.”

Other reasons consumers choose gift cards include eliminating worry about getting the wrong item (52 percent), the convenience of not having to find a specific gift (40 percent) and sticking to a budget (26 percent), according to the survey.

That all sounds great, right? There’s a little hitch, though: according to this Associated Press article (via kottke), consumers will buy but not use $4.8 billion dollars’ worth of gift cards this year:

Shoppers across America have millions of gift cards tucked away in envelopes, drawers and wallets. And some of the nation’s largest retailers are profiting as a result. […]

About 6 percent, or $4.8 billion, of this year’s gift cards will go unused, estimated Laura Lane, vice president of unclaimed property services for Keane Co., a compliance and risk management consulting firm.

Consumer Reports put the figure even higher, estimating that 19 percent of those who received cards last year had not used them because the cards were lost or expired.

“It can add up to significant dollars,” Lane said. “I think the message to consumers is: use it or regift it.”

Even if you do use the cards eventually, they can carry (that’s right, our old friend) hidden fees and penalties, especially if you don’t use them within the first year. This earlier AP article has a decent summary of things to look out for; and Mouse Print (via Consumerist) has a great roundup on fees for Wells Fargo-issued gift cards.

This New York Times article from last year offers another solution: it lists ways to trade in gift cards for cash. Some of the sites mentioned in the Times article:

• Cardavenue
• Swapagift.com
• Gift Cards Again
• CertificateSwap

Don’t let that money go to waste! Focus on buying people things they actually want. If you decide you want to get a gift card, maybe one from a bank or credit card company would be a better choice, since then at least it’s not tied to a specific store, and can be used anywhere they would normally use a credit card. Better yet, if you’re not sure what to get someone, donate that money to a charity on their behalf, rather than donating it to a retailer in the form of a gift card they may not use.

USAA, which I’ve raved about in the past, has a very interesting new product offering called “Depost@Home”: a way to deposit checks over the Internet, using a scanner. Zoinks! From their press release:

Starting today, home banking takes on a whole new meaning for members of USAA Federal Savings Bank (”USAA”). USAA is now the largest nationwide bank to offer an easy-to-use, secure new service that enables its customers to deposit checks into their bank accounts using a scanner and an Internet connection….USAA bank customers simply scan, click, and confirm. They can access their money faster than ever before….Deposits received before 8 p.m. Central on a business day are credited that same day.

Uh, wow! I know this has been done before in more limited form, but I think it’s an incredible sign of where Internet banking is going. Some more coverage of the launch:

• Payments News: USAA Launches Deposit@Home Remote Deposit Service
• NetBanker 2.0: USAA first to offer nationwide remote deposit capture for consumers

As I mentioned earlier, I’m trying to get in touch with someone at USAA to talk to them about their change in eligibility requirements for banking accounts. If anyone has a contact or could introduce me to Mike Luby, I’d be most appreciative. I get a huge amount of interest in USAA through our support address, and I’d like to be able to give people the correct information on the bank.

One of the things we do on Wesabe is try to build tools to help people reach their goals. (The company’s code name was “InReach” — bring your goals in reach, and a pun on enrich — and we would have gone with that name if it had been available. Somehow I couldn’t talk anyone into the idea of inrea.ch — “too del.icio.us,” they said.) The goals section has lit up this week, and it’s been great to see how many people are sharing ideas for reaching goals.

So what are people working towards? Here’s the current top ten list:

1. Pay Off My Credit Cards (207 people, 5 discussions, 0 tips)
2. Save Up An Emergency Fund (134 people, 1 discussion, 8 tips)
3. Lower Spending (118 people, 2 discussions, 0 tips)
4. Buy A House (89 people, 6 discussions, 1 tip)
5. Spend Money With Green Values In Mind (42 people, 6 discussions, 5 tips)
6. Stop Paying Late Fees, Overlimit Fees, Nonsufficient Funds Fees, ATM Fees, And Any Other Fees I Can Find! (41 people, 4 discussions, 3 tips)
7. Contribute To My IRA (39 people, 0 discussions, 0 tips)
8. Make Wesabe Better (33 people, 11 discussions, 2 tips)
9. Buy A MacBook Pro (29 people, 7 discussions, 2 tips)
10. Don’t Panic About Money (20 people, 0 discussions, 8 tips)

(”Make Wesabe Better” isn’t really a financial goal, but we like using the site’s features to help talk about improving the site. The discussions in that goal are great, too — people are doing a lot to help us improve the site already.)

Wesabe user Community Pal wrote up an absolutely amazing post about how he and his wife paid off their credit cards:

My life was immensely better after paying off credit card debt. It has been almost 2 years since my wife and I tore up the last one. It still feels incredibly wonderful!!

I’m not exactly sure how we ended up there, but I remember reviewing our finances and realizing that things were pretty bad. We were newly married with a baby on the way and a nice, comfortable house. It suddenly it dawned on me that it probably wasn’t a good sign that we had just paid our mortgage with a cash advance from our Platinum Card.

The craziest part about it, was that I had a fantastic job, but we spent all of the income (plus our credit) on things that were not necessary. It wasn’t that we lived a “jet-set” life style, it’s just that we didn’t have any savings, or a budget. […]

I almost feel stupid writing this, but after getting married and having a child, I’d say paying off (and swearing off) our credit card debt was the most joyful moment of my life. I felt so incredibly liberated. I actually started sleeping well. I lost weight. My skin even improved. My marraige improved DRAMATICALLY.

There’s a lot more in the post, including a ton of tips for how they were able to do it. What I see in this post is exactly what I hear from so many people: that money was a huge stress for them; that their stress was not tied to low income, but instead to feeling out of control of their spending; and (speaking with my own bias here) that they had to dig their way out of it on their own with makeshift tools. It’s fantastic that they were able to do it, and the post has great advice for anyone in a bad place with money. Hopefully what we build in Wesabe will replace the makeshift tools they had to use with community support like this, and easier, more automatic, more effective tools.

Thanks to Community Pal for the post, and to everyone who’s dug into the goals section.

Wesabe is a young company, so I’ve been using COBRA from my last employer to keep myself in health insurance. That’s often the most expensive possible option, though — with dental and vision, my PPO plan was $465 a month — so I decided to look through what other options I could find.

After asking around a bunch, I decided to go with Blue Cross, where I’ve had insurance before. They haven’t been great, but they’ve been better than Aetna, by previous provider. The options were interesting. I’ve always heard the personal finance mantra of, “Go with a high deductible, you’ll save yourself money!” I didn’t realize just how much money I’d save by following that advice. I eventually decided to go with a $1,500 deductible, which, compared to the $250 deductible I had before, will in all likelihood save me between $200 and $1,000 over the next year. If the worst happens and I max out the amount I could possibly spend on health costs with this insurance plan, it’s still only about $100 more than I would spend with a low deductible plan.

I put together a spreadsheet comparing the four PPO plans from Blue Cross California, which vary primarily in the amount of the deductible ($500, $1,000, $1,500, or $2,500). I’ve posted my spreadsheet on Google Spreadsheets, so you can see the different plans and how they compare to each other. The big unknown, of course, is how much I’ll have to spend on health costs over the next year. So, I listed three scenarios to see how much I would spend under each of the four plans:

1. The good life: how much would each plan cost me if I had no health expenses?
2. A moderately bad year: how about if I had $2,500 in expenses?
3. Hit by a bus: finally, what if I had a big disaster, and had $25,000 in expenses?

I chose these because they are good inflection points — if something happens that incurs more than $25,000 in expenses, under these plans, my costs wouldn’t change (at least until I hit the maximum insurance amount). At the bottom of the chart, you can see how each plan compares to the others for each of these three scenarios.

How does my $1,500-deductible plan compare to the $500-deductible plan? In “the good life” scenario, by taking the higher deductible, I’ll save $888 over the next year. If I have a “moderately bad year,” I’ll still save $118 over the year. Things only work out worse for me if I get “hit by a bus” — but even in that case, I only lose $112.

I could save even more in the first two scenarios by taking the even higher $2,500 deductible, which I’ll probably do next year if I have a little more saved up. And with the savings I get by taking a higher deductible now, that will be a lot easier.

I was feeling pretty good about this math, and having run the numbers to my benefit, but the insurance company had the last laugh: because I’m allergic to cats, they tacked on 25% more for my premium. No, your eyes don’t deceive you — I carry an inhaler I use once or twice a year, and I got stuck with a 25% price increase as a result. They must have a “figured out the high deductible trick” strike team that looks for ways to get back at you for getting around their price structure. Bah! Still, if they applied the same surcharge on the low-deductible plan, I’m still saving over $1,000 a year in the best case.

Health insurance is pretty nasty to figure out in the U.S. If you’re looking for insurance, I’d strongly suggest you take a look at my spreadsheet and run the numbers for your own options. (You can copy my spreadsheet using Google Spreadsheet’s “File -> Copy” command, and then modify it for the plans and prices relevant to you.)