Today brought one of my semiannual extra paychecks. I get paid biweekly, and I pay my monthly expenses from two paychecks, which means that twice a year, I get a paycheck that doesn't have the monthly bites (rent, utilities, Metrocard, Netflix, et cetera) taken out of it. This one is very much needed with the holidays approaching. I'm sending what would have been my rent money ($300 per paycheck) right into my ING savings account. Other allocations will pay for me to get a haircut before I start going to parties (and a dress and a pair of shoes in which to go to them) and flesh out my gift fund. While I feel like I'm spending quite a bit on the holidays (and I am), the timeliness of this extra paycheck is much appreciated, and ensures that the holidays won't set me back in the scheme of things. And of course, it's tremendously satisfying to see my savings number move from $1,900 to $2,200. I've actively saved $700 in the past two and a half months--that feels great, and it's almost the equivalent of a full paycheck.
Thursday, November 30, 2006
Dress For Success
In this post, No Credit Needed asks personal finance bloggers to talk about their favorite charities.
A favorite charity of mine is Dress for Success. It combines a lot of things I think are important: encouraging financial self-sufficiency in lower-income women, a focus on the real power of clothing & appearance in a way that feels almost academic in nature, and shopping.
Dress for Success helps women who have been out of the workforce for an extended period of time or never in it at all. Participants are referred by social services agencies--they can't just walk in off the street. (This is both a positive point and a negative one for me--I understand why it needs to work this way, and it makes sure that services go to the people who will reap their maximum benefit, but it's a shame that those services aren't accessible to anyone who wants and needs them.) Dress for Success deals with that most ephemeral of job qualifications: the First Impression. Women with little disposable cash often can't afford the things that go into that first impression: haircuts and haircare, braces, tooth whitening (or, in some cases, extensive cosmetic dentistry), skincare, makeup, professional shoes, and, perhaps most importantly, a quality suit. When they walk into the interviewers' offices, they make an immediate impression of other (alterity, the academics would say) that is, shall we say, not particularly conducive to coming out on top in the interview process. Not someone who belongs at this company, the interviewer mentally notes. Who is she kidding? It's a slightly creepy facet of American financial instinct that we are less inclined to give money to people who look like they need it. I've noticed this just based on the way I'm dressed--it's way easier to negotiate a deal if you're not in sweats. (A good friend of mine and I used to get all dolled up for our junk-store shopping trips, and found it paid off big-time.) The point is that I can hide my lack of experience in a college degree, shiny hair, and an expensive smile, while a woman who hasn't had my advantages (like parents willing and able to pay for orthodontics) sits in her interviewer's office feeling exposed as someone who doesn't belong. The interview is more likely to think that she is slovenly (thus, that she won't be meticulous in her work) and she is more likely to project a lack of confidence. Welcome to social immobility.
Women at Dress for Success don't just get professional makeovers. The organization also gives them interview coaching, resume editing, and training in a limited set of job skills (mostly computer competency). The idea is not only to improve their skills, but to give them confidence enough to compete on a more level playing field with candidates who've had more advantages in life. With a professional-level job comes a shot at financial self-sufficiency.
Dress for Success accepts donations of very gently used business clothing as well as cash, and they appraise clothing generously for tax purposes. They know the value of a good suit.
In December, I will be making two donations: one to my (deeply underfunded) high school, and one to Dress for Success. I also hope to volunteer with Dress for Success in the upcoming year.
Wednesday, November 29, 2006
Holiday Shopping
I just thought I'd slip my $.02 into the large pot of holiday finance tips. A few notes on how I do my holiday shopping. I love giving gifts, and these are some of the principles that guide me.
1) I sometimes buy things without a recipient in mind.
If I come upon a really sweet deal, I'll take it. There will always be someone whom I've forgotten or whose gift could use augmentation. This morning I bought a set of iPod speakers for $7 including shipping. I'll give it to one of my friends or I'll bring it to my office and listen to music when I stay late. One caveat on this tip: it works best if done in advance. That allows you to consider who your recipient will be and/or how the gift will fit into a gift theme, if it won't be your only gift to that person (I'm big on little gift packages).
2) I rely on gift cards.
I get a few gift cards a year from family friends who don't know me that well. Unless they're at stores where I regularly shop, I try to apply them to things I need anyway or save them to buy gifts. My Urban Outfitters gift card from last Christmas will buy my boyfriend an awesome blazer for this Christmas. A Virgin gift card will also come in handy, though I'm not yet sure just how.
3) I plan ahead.
Seems to contradict #1, but doesn't. I don't just mean "have a price ceiling for each gift recipient," because that's obvious. But the earlier you start shopping, the less the possibility of overpaying on and/or missing the mark with a last-minute gift. I start thinking about where I should be looking for different people's gifts early, which allows me to set up online alerts for good deals I can incorporate as I go.
4) I use eBay.
I remember looking around the library one early December afternoon last year and noticing that approximately a third of the kids "studying" were actually buying gifts on eBay. You have three options here: find it cheap, find it handmade, or find it ironic. If you know what you want to get someone, there's a chance you'll find it cheaper on eBay than retail. Alternately, if you're not quite sure what you want but you know that you want something unique, eBay offers the chance to browse people's craft items. I bought my sister a crocheted cloche last year that she wears regularly. On the third hand, if you think it would be really funny to present your college roommate with a set of commemorative stadium ashtrays, eBay is also the place to go.
5) I scour craft fairs and secondhand shops.
Local craft fairs and internet craft clearinghouses (like Etsy) are a great place to find good gifts. Though you'll find a lot of expensive stuff, there's also a great opportunity to pick up unique gifts for very little money. Some of the things I've found good bets: handmade jewelry (a mixed bag, because it can also be exorbitant, but check out this awesome ring for $10), handmade notebooks or stationary, and handmade bags (like these two). This offers the assurance that no one will give a gift like yours, reminds your recipient that you think she's unique, and offers the satisfaction of supporting independent artists. Junk shops are also great for jewelry and knickknacks--one of my most successful presents to date was a doublefaced genuine brass Victorian hand mirror that I picked up in a junk shop in Portland* for about $15. Be careful with vintage clothing because of size and shape differences--I only risk it as a gift if I know the recipient's figure quite well, like, practically to the measurements.
6) I make baskets.
The whole is often greater than the sum of its parts. Putting together a bath basket for someone who needs personal relaxation time, for example, is often a big hit: include bath bubbles or oil, a candle, a homemade mix CD, a shortish book (poetry works well if your recipient likes it, and either new or used books are fine, but inscribe it if it's new), and some plate-free finger-food sweet thing (homemade a plus), and you've effectively given someone a very lovely afternoon or two. Similarly, variations on the "hostess jar" theme work well, too: a Mason jar with homemade mocha mix accompanied by a mug, for example, is a thoughtful present to an acquaintance, and doesn't cost you more than $10.
7) I bundle.
Again, "the whole is often greater than the sum of its parts." When I'm giving one person several small things, I like the things to have a theme. Not only does this demonstrate your thoughtfulness, it makes the gift seem more like a larger, unified present than a handful of little things.
In general, the best gift is something the recipient loves but wouldn't have bought himself or herself. That's always my gift goal as I embark on my holiday shopping.
*Portland has absolutely the most amazing junk stores in the world. Portlanders: hit up lower Hawthorne and Store II. (Also, obviously, the Alberta arts district)
Clothes for English majors!
It totally, completely, 100% makes my day that two Google search strings have brought people here, and they are
Dont major in English
and
clothes for English majors (I am, in fact, the first search result for this string, ahead of Dartmouth's paper, which offers an article that is, in fact, directly on point--this totally delights me.)
I want to talk to the people who visited this blog because of these searches, particularly the clothing one. In my opinion, English majors are by and large well-dressed. You get a few of the "Clothing is SUPERFICIAL. I read BOOKS. Books are DEEP" types, but on the whole, most English majors are pretty style-savvy, tending to be interested in doing interesting things with their clothing and often into thrifting. Perhaps it is the transference of minute focus on issues of literary style, that is, an understanding both analytical and affective of presentation.
Dear clothes for English majors searcher,
Email me! Let's talk about English-major style!
Somewhat premature holiday greetings,
English Major
Credit Card Update
After a little bit of searching personal finance blogs, I came upon a couple of articles that noted that most companies' automatic card increase links don't trigger a hard credit pull, so I tried that. I requested a $200 increase, and by 8 this morning had been notified that I got a $100 increase, to a total limit of $500. Pretty good, considering I've had the card for two months. I think I'll also be applying for an American Express Blue card. That should get me set for credit--I don't see much of a reason to have more than one Visa (it's a Chase Freedom) and one American Express, and I like both cards. Neither has an annual fee and both have pretty good rewards programs, so that works for me.
On commentors' advice, I'll pay the $5.95 shipping charge just to clear the proverbial deck. My concern was that paying it would reduce my leverage with the company, or my drive to have the charge reversed, or both, but given that I'm already in touch with customer service, I think it'll be okay. I'll schedule a payment today for tomorrow. Thanks for your advice!
ING Increases APY
I logged on to my ING savings account this morning and noted happily that the APY has increased from 4.4% to 4.5%. I'm pretty settled at ING--I haven't moved, and wouldn't, for a higher APY at Emigrant or Citi or any of the others--but I'll still take a rate increase, and happily, if they're handing them out. It's nice also that ING is increasing its rate just when other online savings accounts are decreasing their rates. To me, it signals (perhaps irrationally) that ING is a good long-term prospect.
Tuesday, November 28, 2006
Credit Card Tidbits
Two things about credit cards:
1) I like the balance on my credit card's web interface to read $0.00. Right now it reads $5.95. The outstanding balance is a shipping charge for a product that was supposed to have been refunded. I'm in contact with customer service--perhaps I've improved at dealing with customer service; I've certainly been persistent--and the rest of the charge has been credited, but not that $5.95 yet. My billing cycle ends today. I'm not actually sure what happens if I leave that $5.95 (as well as today's online shopping charge, which I can't pay yet as it hasn't registered yet) unpaid. Am I immediately charged finance charges? I'm not so interested, unsurprisingly, in being immediately charged finance charges. Much as I mentioned in my post about the Roth, it boggles my mind how much it's the pragmatic details of these things that are elusive.
2) My credit limit on my only card is $400. That's kind of embarassing, somehow. It also means that if I want to keep my debt utilization ratio to under 1/3, which I do, I can't actually put more than $134 on the card. (I'm actually not entirely sure if that's true, because I'm not sure if Chase gauges my debt utilization by the balance at the end of the month (that would be zero) or by the accumulated charges over the course of the statement period. I've definitely put about $300 on the card this month, all told--of course, I also schedule full payment as soon as I make a charge, in slightly neurotic fashion. The point is, it would be good to have a higher credit limit, just so I could feel sure. And the Chase card web interface has a quick-and-easy "increase credit limit" page, in which you can request a higher limit. I'm not sure if that triggers a hard credit inquiry--I don't want a ding in my credit score, especially if they're not going to bump my limit up. Probably I should just wait until I've had the card longer than two months.
Cyber Monday
Today isn't Monday, and "Cyber Monday" is kind of made up. But there really do seem to be some good sales on online shopping. I just combined a 30% off "Customer Appreciation" sale (yesterday and today) with a "$50 off orders of $150 or more" coupon to end up getting a dress, a blazer, a pair of jeans and two bras for $105 ($117 less than the items' total full price). The best part is that I already had $100 in my virtual envelope for clothing, so it's not even an unanticipated splurge. It's really nice not to feel guilty about shopping, and if I've had the money earmarked for that purpose, I don't.
My next clothing purchase will be a dress for holiday parties (my parents' Christmas Eve cocktail party, the company party, &c.), a pair of shoes for ditto, and a new pair of boots. And hopefully, because I'll be earmarking money for that purchase in advance, I won't feel guilty then, either. Definitely a point in good budgeting's favor.
If you're a plus size or shopping for someone who is, check it out, and don't forget the extra coupons.
Monday, November 27, 2006
401k
In January, I'll become eligible for my employer's 401k plan. The match is dollar-for-dollar, up to $1,500. That's about 6.5% of my salary, but much less than that of more senior employees' (which gives me pause, somehow, given that my company is employee-owned).
I think, then, that instead of contributing $100 per pay period, I will contribute enough to get the full match (about $60 per pay period) and divert the rest into a Roth IRA. This means that before January I will need to find a place to open a Roth and set up automatic contributions, lest I derail my savings-allocation plans. I hadn't thought I'd be opening a Roth until after I hit my ING savings goal, so this will require a whole new bunch of research.
It's amazing to me the extent to which what I (we?) don't know is the pragmatic elements of finance. It is very easy to realize that saving is good, and almost as easy to discern one's options for savings vehicles. It is, however, almost impossible to find out how to open a Roth, say. Really what I want is a step-by-step set of instructions, along the lines of:
Step One: Consider X, Y, and Z when choosing which company to use for your Roth [even the concept of a Roth being with a specific firm is a little hazy]. Here are the major options: A, B, and C.
Step Two: Go to www.whateverwebsite.com.
Step Two: Click "Open a Roth IRA."
Step Three: This is the information you will need to provide.
Step Four: Set up automatic transfers.
Step Five: Here is how you maintain your account, that is, what you should keep your eye on and how you should conduct business with your chosen company.
Because this is the part that I do not for the life of me know how to do. Any and all pragmatic instructions are very much welcome; in their absence, I will begin my usual internet-combing.
Tuesday, November 21, 2006
Languishing At Work
It's 6:46, I'm still at work, with 35 pages of reading left to go. At least I'm not missing out on boyfriend-time, because he's out at a volunteer orientation (actually, this is a personal finance decision too--if he volunteers for RightRides, they buy him a ZipCar membership, which means we can drive when it suits our financial needs: to do big, stocking-up rounds of grocery shopping or to visit a museum outside the city instead of paying for train tickets, &c.). But all day I've been getting through the day going, "I'll just get done and get out of here and get some ice cream and go home and watch a NetFlix movie." I'm tired enough that going out of my way to get the ice cream is unappealing, and it's late enough that the grocery store downstairs from our apartment will be closed. I've just saved myself $5, and if I bring my lunch to work again tomorrow, I'll have done a little something towards making up for my hideous weekend spending.
The Diet Coke Factor
Reading around personal finance blogs, it seems that even the most financially aware people still have sacred cows, things they're willing to spend money on no matter how many bloggers multiply the cost out by days or weeks or months or years and promise that if they only cut out This One Thing, they could retire significantly better-off. For some people, the thing they'll defend is bottled water; for others, smartphone upgrades. For me, it's--well, too many things. Diet Coke, and taxis, and buying lunch out--all sorts of things, really. What is it for you?
My point really is that as long as we aren't defending all of these spending choices, maintaining a few less-than-optimal expenses seems, to me, pretty much fine. Not as frugal as some choose to be with their lives, certainly, but I think the people who are very frugal generally derive some kind of enjoyment from the frugality itself that rivals the enjoyment that I get out of not sweating buying a Diet Coke. At some point, one just says "different strokes for different folks." It's a matter of priorities, you know? If I suddenly decide I want a plasma-screen TV (or really any TV--I don't have one), I'd have a hell of a lot more urgency about cutting out the aspartame fix. The same would be true if I suddenly had to tighten my financial belt dramatically. But neither is the case, and so at this point I pretty much say "What's the big deal?" Perhaps I am confirming the stereotypes of apathetic twentysomethings in doing so, but it's also possible that I'm just somewhere in the middle of the spectrum that stretches between Very Very Frugal and Devil-May-Care Spendthrift. I still may challenge myself to go a month without buying it in the near future, and see what that does to my monthly finances, but the point is that as long as it's just this relatively small slice of my money (or anyone's money) we're talking about, I think saying, Well, actually, I am going to spend it on Diet Coke is not a totally insupportable choice.
Monday, November 20, 2006
Personal Finance Grammar And Usage!
The English major in me notes this common personal finance usage error. Please permit a short exploratory detour, in which I will embody the stereotype of English majors as nit-picky grammar Nazis.
Wrong: Keeping up with the Jones. Gramamtically, here, you're trying to keep up with one person, like the Dude in The Big Lebowski: The Jones. Alternately, you are trying to keep up with several people named Jone. The Jone family.
Wrong: Keeping up with the Jones'. This suggest keeping up with something that belongs to more than one Jone, as if you are running behind the Jone family car.
Wrong: Keeping up with the Joneses'. Now we have the family name right, but still, we are trailing the car down the driveway, or perhaps cat-sitting for a rambunctious cat. The possessive is unnecessary.
Right: Keeping up with the Joneses. This implies striving for consumptive parity with more than one person named Jones. The Jones family. Thus, the Joneses. Properly pluralized and without needless apostrophes. Lovely.
Want a personal finance application? Proper grammar and usage make you sound smart. When you sound smart, you come off better on the job or in an interview. Then the money comes rolling in.
Now the word "Jones" looks funny to me across the board.
My Weekend Spending Has Run Amok
The last several weekends I've spent way more than is necessary and/or reasonable. Let's see if I can break down this weekend.
Saturday:
$0, other than groceries. I stayed in and napped and read and had some alone time while my boyfriend went out with a friend. It was nice.
Sunday:
1) Feeling virtuous after a) spending nothing the day before, and b) cleaning the bathroom, and also running quite late, I decided that it would be fine to "spend" the $20 my boyfriend owed me for groceries on a cab downtown for a friend's poetry reading. The reading started late, meaning the cab was unnecessary anyway. Boo.
2) There was supposed to be free chai at the reading, but it turned out to be a myth, and the pressure to order was quite intense. I went in on two pots of chai for five people: $5, my portion covered by my boyfriend (hang on, this is a theme)
3) Went to my parents' apartment to do a test-run of Thanksgiving pies. Expected to find them in, or to find something we could make into dinner. Found neither. Ordered in sushi, $25.
4) Got a call from my parents: out for my uncle's birthday, at a country-western bar featuring a singer they've been raving about since they returned from Texas recently. Starts in ten minutes, hurry. Cab: $8, covered by my boyfriend out of the money he owed me for sushi minus the money I owed him for tea (sensing a theme?). Thankfully, my dad bought my first beer and my aunt bought my second.
5) Since I still had to do the pies, back to my parents' after drinks & a long set. This means waking up late and taking a cab to work (withdrew money from an out-of-network ATM: $3 in fees, $8 for cabfare). It also means I didn't pack lunch despite buying groceries on Saturday to do just that. Lunch: a predicted $10.
Appalling total: $66, plus the $32 I now have in my wallet. I hate cash, mostly because I blow through it so easily.
Boo.
Things for future attention: I have the sense that this you-owe-me-I-owe-you business with the boyfriend is serving neither of us, financially. It's fake money--it doesn't quite feel like one is spending it on either end, either incurring the debt or trading something else to pay it off. It's a bad idea. I'm not quite sure what I plan to do about it--should we pay each other in cash, or just scrupulously avoid covering each other's debts, or what? (Aaaargh!)
Planning. Planning will help me avoid these things. As will leaving time for public transportation and not always running late. Basically, cabs are my "latte factor." Cabs and Diet Coke. The point is, though, with better planning, about $48 of the onerous $66 would have been unnecessary. Planning.
Saturday, November 18, 2006
Grocery Shopping
I'm still trying to work out this grocery-shopping thing.
My boyfriend and I did a round of shopping today—really the first full round since I moved in a month and a half ago, the first shopping that wasn't just, you know, pasta, chicken, a can of soup...i.e., the first round that was planned. We went reasonably far abroad to shop—our local grocery store, just downstairs, is really lacking (this is an unfortunate fact of living in a neighborhood in which we can afford the rent), especially where produce is concerned.
Overwhelmed by the presence of fresh produce, we spent $86. For not that much food (not even a week's worth of groceries, because of the whole Thanksgiving thing). I mean, it doesn't break my budget, but clearly I need to work on my grocery-shopping skills.
Reasonable, if unpredicted, factors accounting for the high cost:
1) We're still laying in staples, like flour, vanilla, spices, &c. We probably spent about $25 on just that stuff.
2) I bought enough ingredients to do a big batch of macaroni & cheese for freezing.
Things that are just errors:
1) Grabbing stuff not on the list. Avocadoes, Leibniz biscuits, bagels & cream cheese, three cans of the hard-to-find soup I used to eat as a kid...nowhere on the list. (But very tasty.)
2) Too much cheese. It's expensive! We bought feta for couscous salad, chevre for baby-spinach-walnut-cranberry-apple-deliciousness salad, mozzarella for burritos, and a brick of white cheddar for macaroni & cheese.
3) Really, we just do not have the means for fancy butter, no matter how immeasurably it improves sauces (which it does).
So I think for next time I'll be a little more careful in my planning, and set a modest goal of only spending $70. It'll be more food next time, but less pantry-stocking. So that's my benchmark.
Friday, November 17, 2006
A Room of One's Own: Or, In Defense of the English Major
Some things are more important than money.
Scratch that. A lot of things are more important than money.
Here's the thing, though: money plays a supporting role in well-nigh everything. In A Room of One's Own, Virginia Woolf takes a crack at explaining why so few canonical works have been written by women. Her explanation? Money and time. Historically, women's literacy has lagged men's. Historically, women have not had money of their own. Historically, women's work has been domestic, and has thus infringed upon their ability to claim private time. The book's title comes from its author's assertion that what one needs to be a writer is an income (note: this is "an income" in the now-outdated British sense, meaning interest on a principal that is never touched) and a room of one's own. So we have money (an income) and what money buys (private time away from work--we might think of this in a contemporary sense as the money not to have to work, or the money to pay a nanny, or both).
So far be it from me to say that money is unnecessary to what my college calls in its promotional materials "the life of the mind." It's simply not true, and many of the life-of-the-mind-living too often forget that.
On the other hand, there are things I wouldn't ever sacrifice for money, and my education is one of them. So is the education of any children I may have. It's absolutely my top priority, just like my education was my parents'. It breaks my little heart to see personal finance blogs advising "send your kids to community college--they can transfer to a state school for graduation," and "don't major in English." There may well be people who choose their college majors based on the kind of salary they'll earn after graduation, but I don't know any of them, and frankly, I don't think I want to. A close college friend who was an Economics major studied it because she found it fascinating. She wrote a thesis on historical preservation and now works at an urban planning firm, making a little more than I do. Could she have made more money at a think tank? Yes. But she's doing what she wants to be doing. Study things because you find them fascinating--welcome to the world of intellectual curiosity. Don't study things because you can put up with them and they'll let you buy a big house.
I understand that I speak from a place of privilege, that my "and the paycheck be damned!" approach is absolutely unfeasible for many people. Too many people. But as much as I want to learn to manage my money, as much as I want to make it take me as far as possible, I wouldn't ever give up my "life of the mind" for double the pay. I turned down a job at $32,500 to take this one, which pays $30,000 and double the satisfaction. I couldn't live my life doing something that didn't interest me and reward me.
And really my point is that there are things you don't cut corners on. They're different for different people. I have a friend who buys pretty much everything used, including her clothes and her furniture, but will shell out $25 per pound for custom-blended loose-leaf teas. It matters to her. And if your child is interested in something, loves something, wants more than just a big paycheck--education is one of those things. It's not about what an employer will think upon seeing "Vassar" or "Wesleyan" on your resume (despite the fact that the names of non-Ivy institutions are often more important than one might think). It's about the way in which a good education changes its recipient's life, and his mind.
There are qualitative differences between small, private schools and large state schools. Not just in terms of a student's ability to coast (though really, economically, wouldn't the model be "the school that provides the biggest return for the least amount of effort is the best"?), but in terms of the degree to which academics insinuate themselves into everyday life, the extent to which they are really the raison d'etre. One might theoretically argue that one purchases, for the extra money, far more hours of academics at a liberal-arts school than at a state school or community college. One also purchases individual attention from professors who will act as mentors and networking hubs. One purchases, in many but not all cases, higher academic standards that will give your child the maximum value for your educational buck.
It's also about what we call "cultural capital." It means that the child whom you send to a liberal-arts English (or history, or sociology, or anthropology, or other "what will you do with that degree?") department gains knowledge that elevates her social status and thus expands her income horizons as well as her intellectual ones. It means that she can impress people at dinner parties, people who might give her jobs or grants or introduce her to people who will give her jobs or grants. We speak of "cultured" people. "Culture" as an acquisition is almost entirely dependent upon curriculum (or extraordinary environmental [not aesthetic] sensitivity, as in the case of your Jimmy Gatzes and other nobility-impersonators)--we learn to form our opinions and we learn the things (not just existing facts of the field, but methodology and style) that shape their formation.
We disciples of the humanities don't like to think of our fields this way. But the truth is, "knowledge is power" isn't just a rah-rah afterschool special of a phrase. It's also, in a very profound sense, true, and we can expand it thusly: "knowledge is money."
So, depending on what you consider "valuable," there may be an argument on purely economic reasons for the English major. Me, I just like reading books, but I recognize that my English education has provided a few completely invaluable income-earning abilities. I have the name of my college behind me, which may not be as recognizable as "Harvard" ("the H-bomb," to those in the know), but is recognizable to academics and those who follow academics--the first question in my job interview here was, "Oh, do you know [Professor X]?" I did. I never took a class with him, but at a small liberal-arts college, you know everyone. Another question? "So, what are you reading right now?" (Answer: Special Topics in Calamity Physics, and despite the fact that several major book reviews have given it raves, here are my problems with it...) I am not just more articulate because of my English degree, I am better able to navigate the minefields of aesthetics that permeate fields from publishing to advertising to product development. And? I've read a lot of great books, and I know why metonymy makes the world go 'round.
This is quite garbled (probably, then, it doesn't display my degree to its best advantage), but it can be summarized thusly:
1) What shall it profit a man, if he shall gain the whole world and lose his own soul?
2) An English (or, generally, liberal-arts) education is really far more tangibly valuable than many people think.
Thursday, November 16, 2006
Quandary
Following directly from the themes of my last post:
My parents have offered to contribute $500 to my monthly budget. Consider that I take home about $890 every two weeks, and this would increase that by more than a third. I could join a gym and have sushi every now and again. But I've prided myself on beginning a more independent part of my life and on not being a burden on them as my father retires. I initially turned it down. My father was hurt, and said something along the lines of, "I just want you to have some fun. You're 23. Life's too short." I felt guilty.
Do I take it, take a reduced amount, or turn it down?
Tuesday, November 14, 2006
On Privilege
Today, I came upon this amazing post by TiredButHappy. In my recent reading of personal finance blogs, I've met so many people who've built their own financial lives from scratch. Almost everyone has student loan payments to factor into their monthly budgets, even the ones free from credit-card debt payments (often on debt incurred on college expenses). This is true of many of my friends, as well, but it's not true for me. My parents paid for all four years of my private education (and private elementary school before I got into a fancy public high school). They didn't qualify for financial aid, and they didn't just pay my tuition and fees--they paid for rent, groceries, books, even the odd beer here and there. When I worked in college, I pocketed the entire paycheck, free and clear. I didn't live high, or anything--my rent was cheap and I shopped at Safeway, not Whole Foods, and at secondhand clothing stores--but I was still going to the movies sometimes, buying clothes, buying cocktails and occasional concert tickets and late-night sodas and all the rest. I often felt guilty as I watched my roommate argue with herself over asking her dad for rent money or a friend put a car repair on her credit card. I knew I had it easy. And at graduation, my generous aunt sent a check for $2,000 that covered the broker's fee and security deposits on my new apartment--not a penny of that money came out of my own pocket. My great-aunt's savings bonds and my parents' gift of money from the sale of assets in my name let me live through the summer while job-hunting in a leisurely way that let me find the job I really wanted, as opposed to the first one I could get. In short, this September was really the beginning of my adult financial life. So many people have had to begin so much younger, responsible for their own living costs, or responsible for enormous educational debts--I have had the luxury of not thinking about any of that.
I have had it easy. The first time I realized the extent to which my privilege provides a substantive financial advantage was when I decided to buy a 1-year CD with the money I'd saved from my paychecks in school. A friend with whom I discussed it brought up lack of liquidity as a concern, and I realized with a start that that's not really a concern for me. If I had, say, a medical emergency while my money was tied up in a CD, my parents would cover the cost. They might not even want me to pay them back when my money was freed up, but they certainly wouldn't charge interest. My money could earn a higher interest rate without any significant drawbacks. That's a real advantage, a quantifiable one, one as tangible as the fact that I can save the money that I would otherwise have to put towards student loan payments--or I can spend it. There's more flex in my budget and in my life.
I guess what I want to say is that I am grateful for the gifts given me, the opportunities and advantages, and I am positively in awe of the people who've done it for themselves, from scratch. Single Ma just blows me away--she's fought singlehandedly (no pun intended!) for every one of her financial and personal achievements, all the while retaining her principles and priorities. Her daughter is mighty lucky--I can't imagine getting a greater gift from a parent than that kind of determined love and dedication.
I'll never be able to give myself all the credit for any financial success I achieve, and I guess in some ways I'm grateful I don't have to. That's why my parents worked hard all their lives (especially my dad, who's a second-generation immigrant who grew up in a Brooklyn tenement)--so I wouldn't have to think about the cost of my dream college or worry about student loan payments, or take a job I didn't like. It's why self-made personal finance bloggers work and save and strive--to better their own lives and the lives of their children. The children who have been given these gifts should not regret them. I don't mean that we shouldn't consider the impact of our privilege on our lives, and on our culture. But the gifts given us were meant--the gifts given me were meant, and lovingly. I can't turn them down--I couldn't even if I wanted to, and I don't. I can, however, be grateful for the help I've received, and be responsible morally as well as financially in the ways I use my money. I can give my parents a daughter they can be proud of, and I can try to give something back to my society, and, if I have children, I can give them the very best of all the important things--books, and experience, and education, and principles.
Goooooooooal!
For this week's Festival of Under 30 Finances (and my very first Festival or Carnival of any kind!), Tired But Happy asks,
When you talk about your financial goals with people who are over 30 (your parents, coworkers, other bloggers, etc), how do they react?
Well, here's the thing: I don't know what my financial goals are, really. That makes everything a little more complicated. I know what my immediate financial goals are (contribute to 401k, push ING savings account to $4,000), but I don't have a well-defined sense of what I want from my money in the long-term. And one doesn't go around all, "So, I want to save $4,000—you?"
But I do occasionally talk to my parents and to their (our) friends about money, and this question actually brings out a fairly interesting quirk of my financial background: there's a sense that money "shouldn't be" important. I sometimes feel like I'm doing something tacky by, say, knowing the difference between a traditional and a Roth IRA. My parents are both impressed by my knowledge and attempts at responsibility and, it often seems, faintly regretful that I need to know these things. While my parents' friends are often similarly impressed by my new job, they often tell me, "Oh, you shouldn't worry about it" when anything financial comes up. In one sense, they're right—my life goals don't really have anything to do with money, per se, and it wouldn't kill me to, say, have taken a job in a bookstore back in Portland and lived paycheck-to-paycheck for awhile. Sometimes I feel a little square for having taken a Real Job, moved in with my boyfriend, and bought business-casual clothing. My friends are teaching English in France, they are working as special-education teachers or going to graduate school, they are working several part-time jobs to support their real passions, and me? I'm just a 9-5er, soon to be contributing to a 401k, building a savings for some undefined goal. On the other hand, I'm not particularly keen on the idea that I shouldn't know about money. Of course I should! It may not be my passion, but it's a fact of life, and if I want to spend my life doing things that I love, I'm going to need to know how to live on what I make. Because nothing I want to do is going to pay me a million dollars to do it. If I just keep on keepin' on doing what I like, I'm unlikely to ever pull a six-figure salary (it's not impossible—I could be the next Cornel West or Judith Butler, or I could claw my way all the way up the editorial ladder at my current company—but it's unlikely, speaking purely in terms of statistics). And while I don't want to be overly worried about money (one of the luxuries of living well is not being obsessed with money), I think the way to avoid excessive worry is a healthy bit of knowledge.
I guess in short—I do a fair bit of rambling, don't I?—knowing anything more than nothing about money generally gives the over-30 folks of my acquaintance the sense that I'm some sort of low-grade child prodigy. And a child prodigy is impressive, but also a freak.
I don't talk about money with my co-workers (or, not the ones over 30, anyway), but I look forward to talking to other bloggers about my financial goals. My blog is so new that I've not really done that yet, either, but I hope it can help get some perspective on these things. Surely, bloggers must be the answer.
Monday, November 13, 2006
Lifestyle
On my way out (yes, out--hang on! that's the point!) for lunch today, I ran into a co-worker in the lobby. She's the latest hire before me, and a really nice girl. Point is, though, we had the following exchange:
Her: You going out for lunch?
Me: I just thought I'd grab a sandwich at the deli.
Her: Me too. (Here, she waved her own cup of soup and half-sandwich at me. We looked ruefully at each other.)
We're the same age (23) and make the same amount of money ($30,000). And we both eat out 3-4 days a week. Given our similarly slim financial profiles, why are we both violating that Commandment of Personal Finance, Eat Out Less?
Well, I can't speak for her, but I also can't help but notice that I only used $40 of my $100 grocery budget this pay period, and that includes some dubious "grocery" items like premade sandwiches. Of course, at the same time, I'm running way over my "discretionary, mostly eating out" budget. I've been working a 9-5 job two months, and I'm exhausted when I get home. I can manage the energy required to make pasta or a stir-fry, but nothing interesting, or even particularly healthful. I eat a nice meal at my parents' apartment a couple times a week. I just can't get into a cheerful, grown-up routine of making dinner, packing leftovers, and grocery shopping regularly. Hopefully, I'll adjust to my schedule enough to consider more home-cooking possibilities, but until then, I'm thinking the thing to do is to realign my expectations so that they suit my actual life. It seems I'm not the only one who struggles with this sort of thing, anyway.
I think when next I do my budget, I'll rebalance the food part--bump up the "eating out" section and move the "grocery" number down. That way, at least I'll be working with my actual habits.
Saturday, November 11, 2006
On Personal Finance Blogs
So, I've posted three times already and I've been commenting on other people's posts with uncharacteristically eager and exclam-filled comments and in some way I'm just very glad to have this particular outlet.
See, when I started working in September I realized that I was going to have to do something about my lack of money knowledge ("financial literacy," if you will). I knew how to make a budget—this is something I actually enjoy, because I kind of love playing number games with myself—but not much else. It was a pretty big life change for me—I was lucky enough that I'd never paid my rent with money I'd earned (that is, "not my parents' money") before. I was excited, and also freaked out, especially when money that seemed like a lot to me seemed to slip away very quickly.
I started reading about personal finance on the internet quite accidentally—my work computer used to be set to MSN as its homepage, and one day I clicked on "Money" and was kind of hooked. Over the next couple of weeks, I probably read the site's entire archive through, including an article about personal finance blogs. And then I was really hooked, because people were writing about money as it functions in their lives, not as an abstract principle. I think that's fascinating and cool, and I learned more from the blog reading I did than in all the MSN Money and Kiplinger's browsing. The great thing about listening to actual people talk about their financial lives is that you get to hear what they base their decisions on, the things that are factors that aren't "supposed" to be, the idiosyncratic ways in which people think that aren't taken into account by yet another article about paying down debt. I like that there are lots of different kinds of people making decisions in lots of different ways about lots of different things. I can say that I've gravitated towards more personal blogs written by younger people with non-astronomical salaries, but really, I find it all interesting. I'm not sure all my goals are the same as everyone else's, but that only makes it, somehow, more interesting.
And so I guess all the over-eagerness comes from this idea that I have a ton to learn from these people, many of whom I think are great aside from being educational, and that just maybe, someone has something to learn from me, and that watching me try to figure out my financial life and goals and principles will be helpful. I want to contribute!
Friday, November 10, 2006
Credit Card Terror
I think it is possible that I have some sort of credit card phobia.
Here's the funny thing: I've eagerly used, and, too often, overused, my dad's credit card on which I'm an authorized signer. Clothes, books (school and otherwise), groceries when I was running low on cash for the month, restaurant meals, Starbucks, et cetera, et cetera. It functioned as sort of an extension of my monthly budget in college and as spending money in high school. We've had some fights about it over the years.
It's all well and good when it comes to my dad's card. But when it comes to my own credit? I'm terrified of using my card. I really don't think it's about being freer with other people's money than my own—I think it's about a sort of sense that he's a grown-up and knows how to handle a credit card and I'm not and don't.
It even took me several months after graduation to decide to apply for my own card. I was approved, with absolutely no thanks to myself and all thanks to my dad's great credit, for a $400-limit Chase Freedom Visa. No annual fee, cash back or points, sounds great. The thing is, though, that I basically refuse to use it. I'm so used to my debit card. You can't go into debt on your debit card (even though they're only one letter apart). You can't spend more money than you have—at least, not by a substantial margin.
I stand at counters debating in my head, "debit or credit?" I usually decide "debit," even though I'm spending money I've budgeted for this very purpose—i.e. money I have—and even though on the few (3, to date, I think) occasions on which I do use my card, I schedule an electronic payment for the full balance the next day. It seems silly—I'm passing up rewards—but I just have some weirdly innate resistance to using my own credit. It scares me.
As money problems go, I suppose this isn't a big one—certainly better than credit-card debt—but it is a little, you know, weird. Perhaps it's all got something to do with my abiding belief that I'm not a grown-up and can't really handle my money, like somehow, I will magically acquire credit-card debt just by owning one, tiny, blue, innocuous-looking slab of plastic. Credit card debt is so devastating (this has become even clearer to me as I've started reading personal finance blogs), and, it seems, so easy to get into. I've been lucky enough to avoid it thus far, and I hope to continue giving it a wide berth. But I should still probably get comfortable with my credit card, right?
What I Got
As a starting point, here's a rundown of my worldly assets:
1) Checking account (student checking at Bank of America)
I still have my student checking account, opened while I was, indeed, a student. Apparently I can keep it for five years, and while it's not that different than their regular MyAccess checking, it's free with direct deposit, and I like the web interface, so I'm a fan. The balance is $294.86, as of right this second.
2) "Holding pen" savings (regular savings at Bank of America)
I use this account to set aside large chunks of money I need for monthly expenses—mostly rent and bills—so I know what's what. I also use it for my Keep the Change deposits (this is the Bank of America service that rounds your debit purchases up and deposits the difference in savings, with a match). It's free with $25 monthly autotransfer—I either absorb the transfer, incorporate it as part of my biweekly "holding pen" amount, or just transfer it back. The balance is currently $377.74, which is $20 more than my budgeting software thinks it is.
3) CD ($1,000 Bank of America 1-year CD)
This CD consists of my savings from my on-campus job senior year. The CD purchase was ill-advised, definitely a bad move on my part. The rate is only 3.21%—I just didn't know I could do far better elsewhere. I'm keeping it because the penalties for an early redemption are significant enough to make it worth it. It matures in August, and will be worth something like $1,035. The current balance is $1,005.37.
4) Real savings (ING Direct)
I'm not yet sure what I'm really saving for in this account—emergency fund? travel fund? grad school?—but I'm contributing $100 per pay period to an ING account for whatever it is. This allocation will change when I become eligible for my employer's 401k plan in January, but I'll cross that bridge when I come to it. I opened this account with $1,500 of graduation money, and I want to see it hit $4,000 by this coming September. The current balance is $1,906.53.
5) Gift fund (ING Direct)
Pretty self-explanatory. I'll probably clear it out for the holidays—I like giving presents. I'm contributing $20 per pay period, but $100 in the extra pay periods (one of which is coming up this month). The current balance is $60.03.
That's all the money I have in the world. Every penny. Now you know.
First Post
For the past month or so, I've been reading personal finance blogs, where much is made over the lack of earning potential attached to an English degree.
I am the proud possessor of an English degree from a private liberal-arts college. I graduated in May. I began my current job (entry-level publishing) in September with a net worth, if it's even worth calling that, of $2,500. My pie-in-the-sky goal is to triple that by this coming September. That doesn't seem like very much at all, but in true entry-level (and English major) form, I don't make a whole lot of money.
Perhaps more importantly, I don't know very much at all about money. This is partially because I come from a family with plenty of it, and partially because I have had a tendency to blindly decide that it should not be a factor in my decisions. I'd like to make informed decisions about my money, so as to be able to do as much as possible with my life.
I am starting this blog to participate in some of the interesting discussions on personal finance blogs and to share my own fumbling attempts to attain financial literacy.
So, welcome to An English Major's Money.
