Seven Money Rules to Break
William J. Lynott

        If I have come to relish one part of my hard-won fiscal education over all others, it's the discovery that some rules are made to be broken.
        Don't get me wrong. I'm not talking about the rules that most of us try to live by: the Golden Rule, not breaking in line at the supermarket, coming to a full stop at stop signs. Those rules hold potential benefits for everyone.
        The rules I'm talking about are the ones imposed by commercial enterprises that benefit no one except the people who attempt to impose them. Rules like that survive because so many of us are intimidated when we are told, "You can't do that. It's against our rules."
        If you're inclined to slink away when you hear such admonitions, read on and suffer no more. Here are a few examples of the rules I love to break. I daresay that once you get the hang of it, you'll enjoy breaking them too

Rule #1: You Break It, You Bought It
        A few years ago while browsing in a gift shop, I was startled to hear the sound of glass crashing to the floor. A frisky youngster had accidentally knocked a glass vase to the floor where it shattered like, well, glass. The storeowner sternly pointed to a sign on the wall that read, "You break it, you bought it."
         "I'm sorry," he told the distraught customer, "but you owe me $49.95." With hands trembling, she pawed through her purse and came up with fifty dollars.
        In fact, this mother should have held on to her money, for the truth is that she was not obligated to pay. Accidents in a retail store are a part of the cost of doing business and breakage that isn't covered by insurance is a legitimate tax deduction. Storeowners can try to shift financial responsibility to customers, but courts are unlikely to recognize such a rule.
        So, If you accidentally break something while shopping, remember that you have no obligation to pay. I suggest you offer your earnest apologies while keeping your hand firmly fixed on your wallet.
        f you feel responsible for your bumbling and want to pay to ease your conscience, fine. But ask for evidence of the items total cost to the retailer, not its selling price. To allow the store to generate a profit from your accident would disqualify you from membership in the Rule Breaker's Hall of Fame.

Rule #2: If You Miss a CD Grace Period, Tough Luck
        Banks are especially skilled at intimidating the acquiescent. Recently, I allowed a bank to automatically rollover a CD. As a good customer, I assumed I would be given the best available interest rate C the one anyone walking in off the street would get. By the time I discovered the horrendously poor rate the bank had applied, the grace period for making changes had expired.
        When I called the bank, a customer service representative said nothing could be done. The renewal had taken effect and the money couldn't be withdrawn without my paying a penalty.
        As a confirmed rule breaker, I didn't accept this answer and asked to speak with a manager. He never even mentioned this "rule." Within minutes, a change was made granting me a "promotional" rate almost 50% higher than the one I had been given.
        There was a lesson here for me about putting my faith in the bank. The fact that the adjustment was made so easily left me thinking I had caught the bank with its fingers in my cookie jar.

Rule #3: Your Insurance Agent Knows Best
        Insurance companies are also imaginative creators of rules. Take the "dwelling coverage on your homeowner's insurance. That's what the company will pay you if your home burns down. You won't find much information in your policy about how this figure, and the premium you pay for coverage, is computed.
        But that doesn't mean that you should let them get away with all of their "rules." Take the matter of your homeowner's insurance.
        Chances are the "limit of liability" on your homeowner's policy has been creeping up gradually over the years. That figure -- the limit of liability -- is what the company will pay you if your home burns to the ground.
        An inquiry about this to your insurance agent may well bring you an answer similar to the one my agent offered me: "It's all done automatically. It works the same for everyone."
        When my next premium notice arrived, my interest in the subject was renewed. There it was, another substantial increase in my limit of liability and, of course, in my premium. I called my agent again and explained that the new coverage was, in my opinion, considerably more than the home would bring if I sold it. He, in turn, explained to me that if my home burned down, the company would pay me this full amount to cover the cost of rebuilding, which would be more than it would cost to buy an existing home.
        This may sound logical, but the bottom line is that I was still insuring my home for more than its actual worth and paying higher premiums than necessary to replace it if it were lost.
        When I said this to my agent, allowed that an adjustment could be made and lowered my coverage right on the telephone to the market value of my home. My premium was reduced on the spot by $80 per year.
        Yes, I know. If my home burns down, I'll only get fair market value for it. But as it happens, that's fine with me. If your home is insured for more than its market value, you may want to have a talk with your insurance agent, too.

Rule #4: Return This Warranty Card or Else
        Remember that warranty card that came with the last household appliance you bought? Did you think you would lose your warranty coverage if you failed to fill out and return it? That's what the manufacturers hope you'll think. The truth is your warranty coverage remains the same whether you return the card or not.
        The real reason manufacturers use these forms is to gather marketing data about consumers: age and income bracket, how they heard about the product, where they shop, and so on.
        So, the next time you instructed to "fill out and return this card," you've found another rule to break.
        Keep in mind, though, that the manufacturers do need your name and address to contact you in the event of a recall. That's why I usually do return these cards, but with only my name, address, model and serial number filled in.

Rule #5: Social Security Number Required
        You've probably been hearing about the new crime of stolen identity. That's when a scam artist obtains enough information about you to make credit purchases in your name - even commit crimes for which the police may come looking for you. And what's the easiest way for a criminal to obtain that information? By getting his or her hands on your Social Security number.
        hat's why you should refuse to divulge your number to anyone except government agencies or banks or other institutions that manage your money and must report to the IRS. Do not provide it to anyone else. If you withhold it when applying for credit and you are rejected, be sure to ask why you have been turned down. Federal law requires that you be told the reason.
        It is not illegal for credit issuers to request this number or to reject you for failing to provide it. But you want to know if this is what happened. If it is, take your business elsewhere. If you give in to this demand, the risk is all yours.

Rule #6. Contractors Get Paid Up Front
        Not all questionable rules are imposed by big companies. Contractors such as housepainters, carpenters and remodelers have one of their own: Pay one-third of the cost of the project upon signing of the contract.
        Not me. After a few painful experiences, I learned that once a contractor has your money, it's too easy for him to get sidetracked by a bigger, more profitable job and put yours on hold. So now I have my own rule: I'll pay the one-third, but only after the materials are delivered and the job is started.
        I've never had a contractor refuse to do business with me once I politely explained the reason for my rule. He can still delay the start date for the project, but at least he isn't enjoying my money while he does.

Rule #7: Just Sign on the Dotted Line
        Another great place for finding breakable rules is in contracts. You should never sign ANY contract without reading it carefully.
        What's that you say? You rarely if ever get involved with signing contracts. Oh yes you do.
        ust about everything you affix your signature to these days is a contract. Whether it's called a lease, a bill of sale, or a rental agreement, it's a legal contract. Once you sign it, you are obligated to abide by its terms, even if you didn't understand them, and even if the terms are "unfair."
        Once you get into the habit of reading contracts before you sign them, you'll find lots of provisions that you don't like. When you call attention to them, you may be told: "That's our standard contract, we can't change it."
        Don't believe it.
        Leases are a good example. If you're a desirable tenant, the landlord may agree to reasonable changes in the terms of a lease. Instead of renting a house "as is," for example, you might get the landlord to make certain improvements. If the landlord refuses to eliminate clauses you find unreasonable, you would be wise to find another house to rent. It's better than signing a lease that would keep you awake nights worrying.
        The time to examine a contract for questionable clauses is not when you get home and settle in to read it after you've signed it. Read it thoroughly before you sign.         A friend of mine who leases cars for his business says he has never signed a lease without making at least one change in the wording or scratching out at least one phrase.
        Try it. You'll like it.

from Family Circle, May 2002 & Reader's Digest August 2002
Copyright (c) 2002 by William J. Lynott

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