September 30, 2008

A New World Thanks To The Money Terrorists

I’ve been the Treasurer for my kids’ school… this being my fifth year.

Some of you have been reading me since I was approached to take the job, four years ago. I was taken back by their choice, my being a mathematician/engineer and not a business type… at all. In college I didn’t take one business class.

Not one.

Not economics. Nothing.

Business is boring to me and my interest in it is less than 0. It is not possible for someone to be any less interested in business than I am.

Truly.

And here I was being asked to take on this job for the school. It was supposed to be a two year stint.

I’m on my third term.

I’ve made mistakes and I never realized what a big job it was and has since become.

I now have a loose understanding of accounting, have learned an accounting software package, know the people at the bank on a first name basis, and completely understand the inner workings of all the school’s fundraisers, including the one I always swore I’d never get involved with… the big carnival that is HUGE with three days of light, motion and sound.

You all have read me as I’ve fought going into a catatonic state every year, coming off that sucker. I like peace and quiet. I like to read.

Working a huge carnival complete with carnival workers and big named rides, and HUGE MEGA sound, let alone running a portion of it, was never on my list of things to do before I die. Having Deputy protection including being guarded by an assault rifle last year, realizing gang members were at the event, was also never on my list.

Oh but that’s a whole other story. Not sure I ever blogged that bit… some stuff I try to keep more quiet.

I’ve seen so much in the last four years. I signed up for two more years… I will turn this over at the end of my 3rd term. I obviously have not sucked too badly or they’d not have asked me to stay on.

Obviously I’ve not hated it too much or I would not have continually said yes.

Then again, I could be a masochist… there is that.

In the last four years, the school got blown away by two hurricanes, the home and school ran out of money and I had to ask the Parish priest for a loan, the diocese had some priests embezzling HUGE sums of money, enacting (and rightfully so) an audit every summer that includes my books (scared the crap out of me the first year… because I’m a stupid engineer and not an accountant), the economy peaked and we made record numbers in our carnival, the economy tanked and our other fundraisers disappeared from lack of ability of our parents to support it… leaving us with the carnival alone, and…

… then last night I had the realization that all of our funds may not be insured by the FDIC.

And *I* am the one that it came to. *I* am the one that realized, ‘OH shit…’ and showed up first thing in the morning in our Principal’s office saying, ‘Umm… well… funny thought came to me last night…”

To see his eyebrows shoot up and realize… “whoa”.

And so I spent today at the bank, trying to understand how we were covered and how we were not if they fail (they’re a steady bank with a good rating) and realizing that I need to find another bank for extra funds on those rare occasions that happen right after a fundraiser, before the money is spent down, when our cash on hand will exceed what the FDIC covers.

And now I’m researching banks. For their solidity. Or solvency. Or… their lack of potential to lose it all in the next few months.

And I think to myself, ‘Wow… how far I have come…” for a girl who frickin’ hates business and is bored to tears with it and would rather have a wrench in her hand than a checkbook…

And bail out or not, this whole thing still sucks and I still think they should let everyone fail.

All of ‘em. A pox on all of ‘em, if for nothing else, than for making this mathematician/engineering geek have to learn about business.

The long week continues…

And FYI, if you are a business, you can’t just add beneficiaries or open another account in a bank to increase your insurance. You actually have to open another account… in another bank.

This should make my accounting job interesting…

Posted by Boudicca at September 30, 2008 07:39 PM | TrackBack
Comments

Had a similar conversation with a bank for a client - learned new things I did.

Posted by: oddybobo at September 30, 2008 09:16 PM

As pissed as I am... I'm trying to be reflective as well. This is a learning experience. I'm getting a better understanding, although still muddied, of how things work.

I'm learning about banks... and how I should pay attention to where I'm banking and what the limits are. They are there for a reason... not to gloss over.

Its kind of interesting, which is shocking to hear me say it, but hopefully in the end, we will all learn something from it and be better off in teh long run.

I have hope...

Posted by: Bou at September 30, 2008 09:25 PM

Yes, we have been looking at our own bank here for our personal accounts because we use a small local bank. We found out something interesting, even though we weren't exactly looking for it...

Massachusetts passed a law a long time ago. Any bank that is headquartered in the state not only has FDIC insurance, but also a private insurance called DIF. So, if you're a depositor in a bank and it goes belly up AND you have more money in your account than is covered by FDIC - the DIF insurance covers the rest.

Now there are a couple things I haven't found out... first is there on overage limit - in other words is it limited to something like $100,000 over the FDIC? What happens if a bunch of banks go down at once? That kind of thing. Apparently the DIF hasn't had to pay out in MA since 1958... but it's interesting to know it's there. (even better if it's there, you need it, AND they pay - heh).

If you want to check online there's a website that ranks banks and credit unions:

http://www.bauerfinancial.com/home.html

Hit the side bar "bank star ratings" and look for banks you're interested in using. They tell you how they rate them (has to do with cash on hand, that type of thing). It's a bit kludgy because sometimes you have to find the state where the bank is headquartered. But have a look. It might make you feel better if you can find a good rating for the banks you want to use.

Posted by: Teresa at September 30, 2008 10:15 PM

Part of the problem is that the school legal entity is effectively only one person, so you can't do the tricks of Husband Account, Wife Account, etc. A second account for the school is just like a second Wife account, it provides no protection. That's why you have to have the school entity's second account in a different bank.

The fun part is that even if the school has money separately in checking, savings, and money market in one bank ... they are all treated as though they are in one account for "insurance" purposes.

Posted by: The Thomas at September 30, 2008 11:22 PM

I chose waitressing instead. Screw them all.

Posted by: Kea at September 30, 2008 11:51 PM

Nope, I don't think you mentioned the gang members...

We feel pretty secure at our bank, as it's one of the big ones that insists on gobbling up others... but nothing is written in stone right now.

Posted by: pam at October 1, 2008 06:43 AM


You are entitled to "feel" the way you do, but here is a good story that, in fairly plain english, explains why we should hope that no banks, or investment houses on wall street, should fail.

http://www.nytimes.com/2008/10/01/business/economy/01leonhardt.html?_r=1&ref=business&oref=slogin

History can, and sometimes does, repeat itself...

Posted by: Flam at October 1, 2008 09:52 AM

Thank you, Teresa, for the info (Couldn't post the word l*i*n*k because of the comment cops)! I was happy to discover my c.u. is 5-star.

Posted by: Mrs. Who at October 1, 2008 01:33 PM

Flam- No, I know we can't. I already knew that. But in my world... I'm sick of all of this. In my world, let them fail.

But this is reality, and I fully understand the implications... and I have a future for my children that I'm trying to get started.

Mrs. Who and Teresa- I used that one, but also Bankrate.com. I spent about 2 hours on line looking at banks... the FDIC site had both bauer and bank rate.

The key is... today begins a new quarter... so, that means we can see where the bank stands this past quarter instead of in June, which I suspect will make a big difference. I don't think that anyone thought that Wamu would fail in June... but maybe I'd jut not heard it.

Posted by: Bou at October 1, 2008 03:19 PM

Many of the big banks like WaMu are the ones in trouble. It's where lots of the smaller banks didn't have the "lending power" to get into such hot water. Heh.

Although I think BB&T is not a tiny bank and they were livid about the bailout plan because they had been fiscally prudent. So, it basically depends on how they were managed I think. And you are very right to have a look after the quarter results are in. I'm sure that will change many rankings.

Posted by: Teresa at October 1, 2008 06:35 PM

Dear accounting expert,
If they "go under" do they shred my records? I don't so much have a problem with the bailout but, if it means I get screwed twice, well, that 3 times too many...

Volunteers are the most underpaid people on the planet. It's wrong. They're usually the most deserving.

Posted by: RedNeck at October 1, 2008 09:13 PM

They cant be terrorists. Everybody know that here in America we blow up terrorists, these guys we bail out. The Logic just isnt there.

Posted by: Web at October 2, 2008 06:37 AM