March 22, 2018

Your Money: Seeking Your College Application Essays About Money

Credit Ian Thomas Jansen-Lonnquist for The New York Times

Did you apply for college this year and write an undergraduate application essay about money, work, social class or related topics? If so, I’d like to see it.

I write the personal finance column for The New York Times, and since 2013 I’ve been collecting as many essays like this as I can find each spring and publishing a handful of great ones in early May. You can read a selection of essays from 2017 here.

What qualifies? A description of your job at McDonald’s is welcome, as are musings on what it’s like to have no earthly idea what you want to be when you grow up. We’ve published stories about the struggles of families who are poor and disquisitions on towns where parents can cover for their children’s recklessness with their cash and connections. Reckoning with wealth (yours or that of others) is welcome, as are all attempts to wrestle with its absence and the impact of that.

Please submit your essays to us by Wednesday, April 25, using the form on this page. We’ll publish a few of them during the first weekend in May and pay the writers our normal freelance rate.

Also, anyone who wants to send in a bit of multimedia to go with the essay is welcome to do so below. Videos, Instagram Stories or Snapchat stories are all fine. If you are submitting a story from either Instagram or Snapchat, please download it and send it as a video file.

Not including multimedia will not hurt your chances, but we’re open to the possibility that anything else you might want to include besides your words could bring your relationship with money to life.

Seeking Your College Application Essays About Money

By submitting to us, you are promising that the content is original, does not plagiarize from anyone or infringe a copyright or trademark, does not violate anyone’s rights and is not libelous or otherwise unlawful or misleading. You are agreeing that we can use your submission in all manner and media of The New York Times and that we shall have the right to authorize third parties to do so. And you agree to our Terms of Service.

Thank you for your submission.


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Sketch Guy: Resistance Is Futile. To Change Habits, Try Replacement Instead.

Credit Carl Richards

Let’s play a little game. Clear your mind. Go ahead, clear it.

O.K., now, as soon as you finish reading this sentence, try not to picture a white bear.


O.K., let’s try again. On the count of three. One … two …

White bear! Dang it!

If you’re having trouble with this, don’t worry. You’re not alone. The harder people try not to think of something, the more they end up thinking about it. Ironic, no?

It turns out this experience has a name. It’s called the ironic process theory, and it almost guarantees that your efforts to change bad habits by resisting those habits will fail. Research shows that “thought suppression has counterproductive effects on behaviors.” If you’ve ever desperately told yourself not to scratch that mosquito bite or buy another cactus on Amazon, I’m sure this comes as no surprise.

This inconvenient little bit of neuroscience has bothered me ever since I came across a famous Carl Jung quote: “What you resist not only persists but will grow in size.” If resisting a behavior I want to change is not only ineffective but harmful, then what should I do instead?


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One trick is to pull a little bait and switch on your own brain. It goes like this: When the urge comes to do the counterproductive thing, don’t resist. Instead, replace.

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Wealth Matters: How to Invest With a Conscience (and Still Make Money)

Although great progress has been made with mutual funds, exchange-traded funds and private investment opportunities, the short answer is, it can be hard for any investor, particularly for those who hew to an exacting standard.

But that challenge has seemingly increased interest in impact investing, which can be difficult to achieve if a solid return is the goal. It is also hard to measure, given the differing definitions of impact investing.

Gone are the simple days when investing with a conscience meant excluding alcohol, tobacco and firearms from a portfolio. Today’s impact investors want their investments to align with a more rigorous standard of good while achieving a maximum return.

Impact investing can be hard for any investor, particularly for those with strict standards. “I haven’t found across-the-board, great impact opportunities,” Ms. Case said. Credit Kevin Wolf/Associated Press Images for a Billion + Change

Here are some tips that even the most committed impact investor should consider.

Do Your Homework

Ms. Case said she started trying to move one portfolio to full impact investments about two and a half years ago.

“I created a portfolio and let the wealth advisers run it while I was out talking about impact investing,” Ms. Case said. After one of her quarterly meetings, she said, she realized she was invested in companies that did not match her criteria.


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So she created a screening process to find only the impact investments she wanted, like companies with diverse boards solving 21st-century problems like alternative energy.

“It’s taken longer, and it’s been harder to do,” she said.

This does not come as a complete surprise to Douglas M. Cohen, managing director at Athena Capital Advisors. Mr. Cohen said that not all the options for impact investing had good track records.

Kristin Hull, the founder, chief executive and chief investment officer of Nia Impact Capital, took a different approach to this challenge. In 2007, when her family set up a foundation after the sale of her father’s trading firm to Goldman Sachs, she decided to invest only in companies that were looking to have an impact on the world and had women in positions of leadership.

She has continued this approach as she expanded her firm into advising other investors. She said one fund, which is small at $20 million, was up more than 37 percent last year — or 17 percentage points higher than the Standard Poor’s 500-stock index in the same period.

“We’re just focusing on those companies that are playing their part in an inclusive and sustainable economy,” she said.

Define Your Priorities

One of the challenges of measuring “impact investment” the way someone would measure automobile investments or oil and gas investments is the variety of ways to interpret the term.

“Everyone has a different definition of impact investments,” Mr. Cohen said. “Some people say no fossil fuels, and that’s their negative screen. Others say, ‘I understand these companies are going to exist, but I want to find the one that is doing it the best.’”

Ms. Case said she needed three things to assess an impact investment: intention to have impact, measurement of results and transparency.


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Erika Karp, founder and chief executive of Cornerstone Capital Group and a friend of Ms. Case’s, said the two defined impact investing differently.

“All investments have impact,” Ms. Karp said. “Jean has spent years as more of a purist than I am. She wants measurement that is more precise. I believe it’s more diffuse.”

A screening process that is too narrow can also increase the risk because clients may wind up investing in new companies or first-time funds without track records, Mr. Cohen said.

For instance, one of his clients wanted to invest only in hedge funds and private equity funds that were led by a woman, he said. What the firm came up with were funds that it would not approve for all clients because of their risk. But he suggested a slight change to the client: Loosen the criteria to focus on companies with one to two women on the senior investment team.

“That was the essence of what we were trying to get to,” Mr. Cohen said.

Fill the Gaps

Amit Bouri, chief executive of the Global Impact Investing Network, said the three most robust areas for impact investing were private debt, private equity and real assets, like land or rental properties. And those areas work for the most affluent investors who can afford to have their money tied up in less-liquid investments.

But, Mr. Bouri said, “there are gaps in the market” when it comes to big, publicly traded companies. “If you’re trying to have large-cap public equity exposure, it’s hard to invest in Fortune 500 companies and identify them as impact.”

Instead, he said, with big companies, investors may need to apply a “better than the rest” approach. With this metric, for instance, the oil and gas giant ExxonMobil fares well relative to its peers because it has a diverse board.

Andrew Lee, head of impact investing and private markets at UBS Wealth Management, said measuring impact returns could be complicated when judging new companies against existing companies that are trying to make changes.


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“While there are sets of metrics by sector that are accepted, it is difficult to aggregate across the portfolio,” he said. “You have to keep it by sector.”

Grade on a Curve

The individual trade-offs in impact investing make it difficult to create a general index like the S.P. 500 to track, although several providers have tried.

R. Paul Herman, chief executive of Human Impact Profit Investor, or HIP Investor, has developed a measurement framework for impact investments that is not unlike that of a college chemistry course. The HIP Investor Ratings provide what amounts to an actual grade and also a grade on a curve.

Mr. Herman said a good raw score for a fund was in the range of 55 to 60 in terms of its impact on society. And the relative score allows an investor to see how that fund performs against similar funds.

Companies use the measurement to gauge their investments. STOK, an architecture and engineering firm, wanted its 401(k) offerings to align with its progressive values as a company, so it asked Mr. Herman to rate its fund with HIP Investor Ratings.

Ms. Karp said investors who focused on smaller-scale investments could be purer in their measurements, but her goal was to invest trillions of dollars to affect big change.

“One of the things Cornerstone believes is, to really have impact on the world, we need to move trillions of dollars,” she said. “To do that, you need to evolve the standard of what is the discipline of impact investing.”

One solution, Ms. Karp said, would be to consider impact measurements in all investments as part of sound investing.


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Set Your Expectations

Setting expectations is crucial in the selection and measurement of impact investments because the manager will otherwise fail to deliver what the client wants.

“I think it’s important to lay things out up front,” Ms. Karp said. “There should be no excuses.”

The HIP ratings include the fund’s returns as another factor in actual and adjusted grades for companies. Most of the fund returns in the STOK 401(k) plan, for example, are from the middle to upper end of the HIP range.

And Mr. Bouri said his network had developed themes that people could invest in, like clean energy and affordable housing.

Still, to increase the power of impact investments, all investors are going to need to consider investments in that light.

“It cannot be a do-gooder thing,” Ms. Case said. “We don’t want to have diversity because it’s a box we check. We want to have diversity because we’ll be a stronger economy in America and around the world.”

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Your Money: Teachers and Annuities: A Questionable Match and Hard Products to Shed

Mr. Frailich, 32, is the son of a Minnesota stockbroker, but he wasn’t thinking about the details of his retirement plan when he took his first job as a Teach for America educator in Mississippi. As he moved from there to Brooklyn and then to New Orleans, he was just glad to be saving something for later and getting some matching contributions. “I didn’t know I had an annuity,” he said. “I was just glad that I was putting away 10 percent of my salary.”

At age 26, as the human resources director for a charter school here, he woke up to the fact that he and his colleagues had money in some problematic annuities — financial products that may promise a particular return but often limit your ability to sell them and come with very high fees. Local sales representatives who were independent agents had helped set up the school’s plan. Mr. Frailich found employees in their 20s with fixed-rate annuities earning just 3 percent, hardly enough to secure a comfortable retirement.

Kristin Foght, a teacher, with her husband Michael and sons Declan and Jackson. Her effort to move her retirement savings away from Voya Financial required name-change forms, spousal consent forms, notarizations, a letter of acceptance from the company receiving the money, and innumerable faxes. Credit Edmund D. Fountain for The New York Times

Because of prohibitively high costs, his school did not participate in the state’s teacher pension plan, so the 403(b) plan was all that was offered to him and his colleagues.

Moreover, many states, including Louisiana, have pension funds that are badly underfunded, and keep pushing off what seem like inevitable benefit cuts or income tax hikes to cover the shortfall. Some younger teachers, especially those who are not sure they will make a 40-year career in education, approach them with wariness.

Mr. Frailich realized his colleagues needed the ability to invest directly in mutual funds in their retirement plan, the way most people with for-profit employers can. That would give them a chance at higher returns. To do that, however, those colleagues needed entirely new accounts — on top of the annuities in their original accounts, which came with penalties if you sold them before several years had gone by.

“In the process of making things better, I also had to make them more complex,” Mr. Frailich said. After he left the school, another administrator made further adjustments, leaving some veteran teachers there with five or six separate 403(b) accounts.

Now, years later, some of his former colleagues (some of whom have become clients) are having a hard time getting out of the old 403(b)’s and into one consolidated account that would be simpler and cheaper. Some of the problem appears to be sloppiness on the part of Voya Financial, the company that controls the old accounts.


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One teacher, Katie Harvey, recently discovered that Voya had her first name wrong, her birthday wrong and her email wrong. Changing all of that required printing out a form and sending Voya a copy of her identification by mail.

Another teacher, Sara Wilson, had been trying for four months to extract her accounts from Voya, but still hadn’t managed to finish when I spoke to her this week, even with the help of other local financial advisers. “It’s been very entertaining to listen in on the calls,” she said. “The girl is saying words to me that I don’t understand. And my adviser keeps saying ‘Do you expect my client to understand this?’”

Kristin Foght, who also teaches in the area, tried to move her accounts away from Voya without any expert help. She began in August. There were name-change forms, since she got married along the way. Then spousal consent forms. Then demands for notarization. Then requests for a letter of acceptance from the company that would be receiving the funds. Then a requirement to fax the forms. “They kept telling me that they were not getting the fax,” she said. “And I kept saying ‘Nobody faxes anymore besides you guys!’”

Mr. Frailich, with his son Elijah, and Ms. Harvey. She discovered that Voya Financial, a company handling retirement accounts, had incorrect information for her first name, birthday and email. Credit Edmund D. Fountain for The New York Times

At one point, the letters of acceptance expired. So she found herself driving 20 minutes with her 2-year-old in the car to an after-hours notary. But what really pushed her over the edge, she said, was when a Voya supervisor said she was transferring forms to a third-party administrator and then failed to do so. A month later, Ms. Foght said, that same person told her that the wrong page had been notarized, and Ms. Foght would have to begin again.

So why were these teachers in low-rate annuities in the first place, instead of simple and cheap index funds, and were those annuities appropriate? Voya would not answer that question, but one of the original independent sales representatives, Delinda Duncan, who no longer sells Voya’s annuities, did. “Teachers are very conservative in Louisiana,” she said. “It’s a little different than in other parts of the country.”

She added that in many instances there were variable annuities available that did allow people to participate in the growth of the stock market.

As for the service issues these teachers encountered, Voya examined Ms. Wilson’s and Ms. Foght’s situations and expressed contrition. “We acknowledge that, in both cases, we did not meet the high service standards that we deliver on a consistent and reliable basis to our five million retirement plan customers,” the company said in an emailed statement. “Our culture is centered on continuous improvement, and we will be reviewing the opportunities here to help avoid future processing delays. The transactions for both customers are now complete and rollover checks have been issued.”

Mr. Frailich spent eight hours extracting his own Voya accounts, an experience he described as “brutal.” And while he used to harbor ill will for Ms. Duncan and her mother, who sold products with her, he no longer does. “People get caught up in a sales culture selling things that maybe they don’t understand,” he said. “I believe they thought they were doing a good thing.”


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The 403(b) plans are much better for many educators in New Orleans now, and many teachers are able to invest in simple index funds. But Mr. Frailich remains unhappy with Voya and its attempt to profit from teachers who he believes would be better off in simpler, cheaper investments.

He said that he understands that Voya has to answer to regulators and lawyers. But it would not be hard, he said, for the company to create a simple website for people like his clients who want to move their money — one with correct forms and electronic signatures that do not require faxes.

“You could just push a button,” he said. “But if an institution has an incentive to hold on to your money, they are going to hold on to your money.”

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Why the Tax Law Might Make Your Car Payments Go Up


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The United States just started another epic borrowing binge. And if you borrow money — through a credit card, a mortgage or an auto loan — you could end up paying the price.


March 16, 2018

As the economy slowly recovered from the Great Recession over the past decade, the United States government borrowed trillions of dollars at some of the lowest interest rates on record.

Thanks in part to the recently enacted tax cuts, another borrowing binge is getting underway: This fiscal year, the Treasury Department is expected to bring in $955 billion in bond sales, an 84 percent increase from last year.

The price this time around will probably be steeper — both for the government, and quite possibly for you.

Economists and analysts warn that, as the economy has improved — unemployment is low, wages are rising — the government’s need for more money is likely to push interest rates higher. That will make it more expensive for companies and consumers to get loans and potentially will hurt the economy.

It is a phenomenon that economists call “crowding out.” Large-scale government borrowing sucks up the supply of available funds, driving up financing costs for just about everyone else.

And there are signs it’s already playing out.

The United States, already a giant borrower, will need more money

The tax cuts that President Trump signed into law in December will decrease the amount of money the federal government brings in by an estimated $1.5 trillion by 2027. There are no plans to reduce government spending by that much. In fact, the budget passed last month increases spending by hundreds of billions of dollars.

That means that deficits — the difference between how much money the government collects and how much money it spends — will inevitably grow.

In 2018 alone, the conventional estimates show that the new tax law is expected to expand the deficit by roughly $136 billion. (Some tax-cut supporters argue the deficit won’t be quite so large because lower taxes will stimulate the economy and eventually increase revenues.)

The government has to borrow that money from somebody

During and after the Great Recession, borrowing was easy for the United States government.

Its bonds were considered one of the safest places in the world to stash your money. They were exactly what organizations with cash to safeguard — jittery governments, insurance companies, retirees, hedge funds, banks, mutual funds, pension funds — were looking for.

And because these groups were desperate for safety, they were generally willing to accept low rates of return on their investment. That’s why interest rates were low.

It wasn’t only savers who were buying government bonds. So was the Federal Reserve, as part of its effort to resuscitate the moribund economy. The Fed’s bond buying also helped keep interest rates low.

Now all that is changing.

Because the economy has largely recovered, the Fed is reducing the amount of government bonds that it holds. Corporations, banks and households are spending their money or investing it in riskier assets — with bigger potential payoffs — rather than stockpiling it. And, amid optimism about the economy’s prospects, more consumers and institutions are looking to borrow money themselves, rather than park their cash in safe havens like government bonds.

So the government has fewer places from which to borrow money. In essence, the government is competing with individuals and companies to borrow money from a limited source of lenders.

As a result, interest rates rise on government debt

Intensifying competition for investment funds is good news for savers and other lenders who can demand higher interest rates.

But it’s bad news for borrowers who have to pay those higher rates.

The process is now playing out in some normally sleepy corners of the world’s financial markets, such as those for short-term debt, known as the money markets.

This year, the Treasury is expected to borrow more than $490 billion in the short-term debt markets. That’s more than three times the amount it borrowed last year, according to estimates from Deutsche Bank.

But there is only so much appetite to buy this short-term debt. As a result, interest rates are rising. The yield on the benchmark three-month Treasury bill, for example, has more than doubled over the past year to over 1.7 percent, according to Bloomberg data.

That has led to higher interest rates for corporate borrowers — and ultimately for people financing purchases

You probably don’t give much thought to the yield on the three-month Treasury bill. But it serves as the basis for a range of other interest rates, including rates on a type of short-term corporate debt called commercial paper.

Companies — including the finance arms of carmakers like Toyota and Ford — can borrow billions of dollars by issuing such debt, which are part of a mix of funds they use for loans to customers and car dealerships.

It now costs a relatively low-risk company about 1.9 percent to borrow money using commercial paper that matures in 90 days, up from less than 1.6 percent at the start of the year, according to Bloomberg data.

That increase makes it more expensive for the companies to operate. And it’s at least part of the reason interest rates for new cars, trucks and S.U.V.s have been ticking higher. In February, they rose above 5 percent, their highest level in eight years.

Granted, a car loan with a 5 percent rate isn’t terribly expensive by historical standards. But rising rates make it harder for people to afford cars.

Roughly 80 percent of all new vehicles are financed with loans or leases in the United States. As a result, the higher interest rates could put a damper on auto sales — and thus on the broader economy.

“A lot of consumers are having to eat the cost in the form of higher down payments or higher monthly payments,” said Jessica Caldwell, an analyst at, an automotive research firm.


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Your Money Adviser: How Saving Some of Your Tax Refund Could Win You a Cash Prize

Participants agree to deposit all or part of their refunds in a savings or retirement account, or to buy savings bonds. In exchange, they qualify for the chance to win cash prizes. Because many people use part of their refund to pay bills or credit card debt, Mr. Gilmore said, the minimum amount that Save Your Refund participants must agree to save is just $50.

To be eligible for the prizes, participants must first file I.R.S. Form 8888 with their federal income tax return. The form allows the splitting of a refund via direct deposit into two or more separate accounts. (It also allows for part of the refund to come in the form of a paper check.)

To qualify for the $100 prize drawings, tax filers must then submit a Save Your Refund entry form, copies of which are available online and at most Volunteer Income Tax Assistance program sites. Each week during tax season, 10 participants will be randomly selected to receive $100.

Each participant can also submit an additional entry for a shot at two $10,000 grand prizes to be awarded after the tax-filing deadline on April 17. (The deadline is two days later than usual this year for several reasons, including a local holiday in Washington.)

Mr. Gilmore said the “prize-linked” approach was one way to motivate people to increase savings, which otherwise can seem like a dreary chore. “It’s a way to use prizes to make savings feel more fun and exciting, and less stressful,” he said. Some research suggests that the potential to earn cash prizes can motivate people to save more.

So far this year, 2,295 people participating in the Save Your Refund campaign have arranged to save just over $1.9 million, an average of about $880 each, said Lindsay Ferguson, outreach coordinator with America Saves.

Here are some questions and answers about saving:

How do I buy savings bonds with my tax return?

You can buy up to $5,000 in Series I savings bonds with your tax refund by indicating the amount you want to purchase on I.R.S. Form 8888. The tax-time bond purchase option is now the only way to buy paper savings bonds, which some people prefer when giving bonds as gifts. You can also buy bonds in digital form, if you prefer.


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What kind of interest rates are savings accounts currently paying?

Rates for basic savings accounts have been anemic for years, but that may change as the Federal Reserve proceeds with its plans to raise benchmark rates. Online banks typically offer annual percentage rates of 1.5 percent or more — hardly earth-shattering, but better than the paltry rates offered by big brick-and-mortar banks.

Rates on certificates of deposit are higher, depending on the amount deposited and the term chosen.

How can I track my income tax refund?

The I.R.S. suggests using its online “Where’s my refund?” tool, or its IRS2Go smartphone app.

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After Equifax Breach, Credit Freeze Provision Comes at a Price

The new legislation might do more harm than good, Mr. Litt said. For example, it could stop states from requiring that all credit reports be frozen by default — an arrangement that would put consumers in control of who gains access to their data. As it stands, consumers must contact each of the three bureaus — Equifax, Experian and TransUnion — to initiate a freeze. Likewise, they must also contact the bureaus to lift the freeze, which is necessary when applying for a loan or, say, car insurance.

There are also several states where a freeze blocks not just lenders but also insurers and employers from access to your credit files. “Those states would be overridden because this law would only extend to credit checks” from lenders, Mr. Litt added.

Consumers have little choice but to work with Equifax and its peers. Banks and other financial services firms feed consumers’ personal data to the bureaus, which keep files on more than 200 million people. That data is then crunched to calculate personal credit scores.

There is no way to opt out of this system. Mortgage providers, credit card companies, mobile phone providers and others won’t do business with you until they check your credit report at one or all of the big bureaus. If you freeze your file, these companies cannot get to it — and if they cannot get to it, they won’t issue credit. That protects you if thieves obtain your personal information and try to open accounts in your name.

The Consumer Data Industry Association, the credit bureaus’ trade group, did not oppose the language in the Senate bill. The big bureaus do not break out how much they collect in fees for initiating and lifting credit freezes, the association said.

“Consumers in every state will be protected by a strong federal law under this bill,” Francis Creighton, president and chief executive officer of the association, said in a statement.

But consumer advocates do not believe it goes far enough. They would like a law that gave regulators — such as the Federal Trade Commission or the Consumer Financial Protection Bureau — the power to oversee data security at the big credit bureaus, which could include inspections and penalties for poor practices or digital breaches. Senator Elizabeth Warren, Democrat of Massachusetts, introduced one such bill this year.


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Such an approach would be proactive, rather than the currently reactive way of doing things, said Chi Chi Wu, a staff attorney at the National Consumer Law Center.

“The fundamental premise is you want a regulator to supervise for data security at the credit bureaus and not just, ‘We can take enforcement action after you messed up,” Ms. Wu said. “That is a different way of regulating than suing them after they’ve lost everyone’s data.”

Another bill, introduced by Senator Jack Reed, Democrat of Rhode Island, would essentially freeze credit reports by default. Anna Laitin, director of financial policy for Consumers Union, said that bill would “stop identity thieves in their tracks by freezing access to credit files unless the consumer gives their consent.”

The current bill’s free freeze provision was viewed as a bargaining chip — a little goody for consumers — in legislation that would roll back some of the banking regulations that were established after the financial crisis a decade ago. But there was also at least one nugget that would be good for the bureaus: A provision to provide free credit monitoring to active-duty members of the military would strip them of the right to take the agencies to court should something go wrong.

It remains to be seen if the House will pass the legislation, which means free credit freezes aren’t guaranteed just yet. If the bill does not move ahead, states will be free to consider their own changes. Some states, for example, are considering legislation that would let consumers place a credit freeze at all three agencies by making a request at just one, Ms. Laitin said.

“State lawmakers pioneered credit freeze protection and have been quicker to take action compared to Congress,” she said. “They should be allowed to continue to innovate so that consumers can more easily protect themselves from identity theft fraud.”

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Field Notes: Money-Saving Tips for Wedding Guests

Since many weddings take place in beautiful locations, turn witnessing “I dos” into a relaxing getaway. Ms. Rago recommends that guests include weddings in their overall travel budgets. Ask the hotel to extend the room block rate to your days beyond the celebration to make additional nights on the property more affordable. If you’re attending with friends, look into reserving a villa or private home. Many resorts offer rental properties, and online sites such as, and have listings at a variety of prices.

If a flight is involved, Ms. Rago suggests shopping early, but not necessarily booking right way. “Educate yourself as to how many airlines and flights” serve a particular destination, she said. “If you play the game, you can find a flight for so much less.” She also says to book with points, frequent flier miles or, if numerous weddings are on the calendar, consider an airline credit card where you often receive points for signing up. To save on ground transportation, organize similar landing times with other attendees so vehicles can be shared to the hotel.


Attire can be a hang-up for guests. Men have it easier, Mr. Leaver said, since they can buy a suit or tuxedo and wear it to numerous events with different accessories. Purchase a few bow ties, pocket squares, socks and cuff links from affordable brands such as the Tie Bar and SuitSupply to keep the look fresh.

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For women, the idea of wearing the same dress with another pair of shoes and bag doesn’t go over so well. Instead, renting clothes can be a huge savings. Maureen Sullivan of Rent the Runway in New York said that nearly one million guests came to the clothing rental site last year looking for an outfit for a wedding.

“Guests can rent the perfect look, save money by not investing in something they will push to the back of their closet and not wear again,” she said. The company also offers accessories, like jewelry and clutches, as well as a wedding concierge to help guests find an appropriate outfit for any dress code.


Gifts also add up, especially since the average guest spends about $100 for each item from the registry, according to, a wedding planning and registry company in New York. Jennifer Spector, the director of brand at, said couples typically add items with low, medium and high prices to their registry. Guests should set a budget, she said, and look for personalized items in that range.

Guests should also consider going in on larger, more substantial gifts with other guests. Some registries offer group gifting options for big-ticket items like honeymoons, furniture, expensive kitchen appliances and down payments for homes. This is possible even with the simplest registry, too. It’s perfectly O.K. to split the cost of an item with another guest or two.

How about not giving a gift off the registry? Ms. Spector and Mr. Leaver agree something small and personal is another way to go, especially if you’re shelling out the dough to attend. “Guests need to realize that gifting is not about the money,” Ms. Spector said. “Writing a nice note and sending them a picture frame — that’s a really personal gift.”

The same goes for guests who check “no” on the RSVP card. “Still send a gift,” Mr. Leaver said. “It is the way to express your gratitude for being invited. It’s not about the value. It’s about the thought and the meaning.”

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Your Money Adviser: Interest on Home Equity Loans Is Still Deductible, but With a Big Caveat

The I.R.S. also noted that the new law sets a lower dollar limit on mortgages over all that qualify for the interest deduction. Beginning this year, taxpayers may deduct interest on just $750,000 in home loans. The limit applies to the combined total of loans used to buy, build or improve the taxpayer’s main home and second home.

To illustrate, the I.R.S. provided several examples, including this one:

Say that in January 2018, a taxpayer took out a $500,000 mortgage to buy a home valued at $800,000. Then, the next month, the taxpayer took out a $250,000 home equity loan to build an addition on the home. “Because the total amount of both loans does not exceed $750,000,” the I.R.S. said, “all of the interest paid on the loans is deductible.” But if the taxpayer used the loan for “personal” expenses, like paying off student loans or credit cards, the interest would not be deductible.

Often, homeowners borrow against their home equity because the interest rates are typically lower than other types of credit. A home equity loan works like a traditional second mortgage: It’s borrowed at a fixed rate for a specific period. A home equity line of credit is more complex: Borrowers can draw on it as needed over an initial draw period — typically 10 years — during which interest rates fluctuate. After that, the balance typically converts to a fixed-rate loan.

A recent survey done for TD Bank, an active home equity lender, found that renovations are the top use for home equity lines of credit (32 percent), followed by emergency funds (14 percent) and education expenses (12 percent).

Mike Kinane, head of consumer lending at TD Bank, said the bank saw “a bit of a slowdown” in applications, and a slight increase in borrowers paying off larger lines of credit, before the I.R.S. clarification. But, he said, home equity remains an option for homeowners to borrow large amounts of money at competitive rates. “It still is, and will continue to be, a great borrowing tool for consumers,” he said.

Here are some questions and answers about home equity debt:

Do the new rules on deducting interest paid on home equity loans apply to my 2017 taxes?

No. The rules apply to the return you will file next year, for 2018, said Cari Weston, director of tax practice and ethics for the American Institute of Certified Public Accountants. Interest on home equity loans or lines of credit you paid in 2017 is generally deductible on the return you file this year, regardless of how you used the loan. But, she said, the interest may not be deductible on next year’s tax return — depending how you spent the money.

Can I still use home equity loans to pay student loans or credit card bills?

Yes. You can use all or part of the loan for personal expenses. You just can’t take the interest deduction on the amount used for those purposes, Ms. Weston said.

How should I document that the money borrowed was used for eligible purposes?

It may be that the I.R.S. will create a new form to go with the interest deduction, on which taxpayers will state the purpose of the loan, said Patrick Colabella, an associate professor of accounting and taxation at St. John’s University. Regardless, it’s advisable to keep records and receipts for your home improvement project, he said, should you ever need to justify the interest deduction to the I.R.S.

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Your Money: One State’s Quest to Introduce Long-Term Care Benefits

Given that states help pay for Medicaid, legislators are increasingly worried about the growing number of older residents, many of whom don’t even have enough money saved for a comfortable retirement, let alone nursing home bills that can sometimes top $100,000 per year.

A coalition of groups in Washington State saw the generational tidal wave crashing, and they got the ear of two state representatives in particular. The mother-in-law of one, Laurie Jinkins, a Democrat, is 92, has dementia and just qualified for Medicaid.

The father of the other, Norm Johnson, a Republican, used up much of his savings paying for in-home aides for Mr. Johnson’s mother. The elder Mr. Johnson spent so much on care for his wife that by the time he required care of his own, he, too, wound up on Medicaid.

So Ms. Jinkins and Mr. Johnson sponsored a bill calling for a payroll tax on state residents of 0.49 percent, or $22.30 a month on average. (Washington has no state income tax but does have a statewide sales tax.) People who paid into the system over a certain number of years would ultimately become eligible to access the $100-per-day benefit if they could not complete three or more activities of daily living, like dressing or bathing.

They could then take that $100 and put it toward in-home care, adult day care, nursing home fees or similar expenses. After 365 days, they would exhaust the benefit. At that point, Medicaid would still be an option.

Why would a member of the typically tax-averse Republican Party support such a measure? After all, people are supposed to save for their old age, and they can buy long-term care insurance to protect themselves, too.

Mr. Johnson, a former teacher, school counselor and principal, drew on his own life to answer the question.


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“We had five sons in my family,” he said. “There is no way we could afford long-term care insurance and raising five kids and paying for a house and school.”

He knows that younger adults might resent the idea of elected officials reaching deeper into citizens’ pockets to pay for benefits that are probably decades away for them. But he said that his experience had afforded him some perspective.

“You never think you’re going to get old,” he said. “But guess what? I didn’t think that either when I had kids at home, and now I will be 80 in July.”

The way Ms. Jinkins and Mr. Johnson tell it, AARP was supportive until suddenly it was not. “The two people who represent AARP here, neither one had darkened my door,” Mr. Johnson said. “And then the last day, they threw a wrench into things.”

When I contacted AARP, I was told that the group had a number of concerns with the bill and had been expressing them all along. Perhaps the thorniest one involved the question of who qualified as a caregiver and how he or she would become eligible to collect to benefit.

Eligibility is not in dispute in licensed adult day care centers or nursing homes. But many people prefer to stay in their own homes as long as they can, and in some parts of Washington there are not enough licensed in-home caregivers. That means family members pitch in, often sacrificing their own wages to do so.

Everyone in the coalition that supported the bill wanted the people who need care to be able to use the $100-a-day benefit to pay relatives. But not everyone is qualified to provide care, especially if doing so requires lifting a person or treating certain conditions.

Would a spouse have to take a 75-hour class at a cost of hundreds of dollars to qualify as a caregiver? If so, was that too much to ask? How best to train a novice? Could family members train for, say, only 15 hours just to learn the specific skills they needed to help a relative? And if in-person training was required, who would care for an ailing spouse in the meantime?


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“The bill needed too much work, and we had too many questions and not enough answers,” said Cathy MacCaul, AARP’s advocacy director in Washington.

Without those answers, AARP would not support the bill as written. And without its support, and with emails arriving from AARP members encouraging “no” votes, lawmakers chose not to move the bill to a full vote.

The State Legislature met in a short session this year. Next year, its session will be longer, allowing more time for negotiation. All sides vow to redouble their efforts in the meantime. But the episode is a reminder of just how slowly new financial benefits creep across the country, hopping from state to state as new legislation is passed.

Hawaii offers some help to certain caregivers, but the Washington bill would establish the first payroll tax where the proceeds go to long-term care more broadly. It could be the difference between some families spending nearly all of their money and ending up on Medicaid or having something left after an older person’s death.

But precisely because it would affect so many people, it’s not going to happen very quickly. “Could we all have dropped everything in our lives and answered all these questions sooner?” asked Doug Shadel, AARP’s state director in Washington. “Maybe. But we’re inventing a new social system to fix a difficult social problem.”

He also offered an olive branch of sorts.

“These two legislators, I know they are frustrated, but I think they showed a lot of courage putting this forward as a bipartisan effort,” he said. “I think they’re going to be seen as pioneers going forward.”

Correction: March 9, 2018

Because of an editing error, a picture caption with an earlier version of this article misstated the surname of a Washington State representative who was a sponsor of legislation to create a payroll tax to cover long-term care costs. She is Laurie Jinkins, not Jenkins.

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