Friday, March 30, 2007

Frugal Gourmet

We did a great round of grocery shopping on Tuesday evening--$86, and totally a full week-and-a-half's worth of groceries. One particularly good move was the purchase of three pounds of chicken breasts, which I pounded thin; marinated in yogurt, mustard, and herbs; and pan-grilled in bulk. These have provided the core of three very delicious sandwiches so far (with more to come), and have cut my work-lunch food costs almost to zero over the past few days. I'm hoping I can get through the entirety of next week's work lunches on this chicken--I'll do a couple more sandwiches (I did a chicken pesto on baguette with baby spinach, and a chicken with cheddar cheese, onion, and baby spinach--I'm thinking I'll try something with thin slices of Fuji apple for next week, and maybe something with some Parmesan ends we've got sitting around), and I think I'll make a big batch of couscous salad with chicken (I add feta cheese, red onion, tomato, cucumber, Kalamata olives, and some oil and vinegar to couscous just like it's a Greek salad) and take that a couple of times. Maybe a pasta with chicken and pesto?

I'm really enjoying making and eating these lunches, actually. I find, perhaps counterintuitively, that putting more effort into them makes me more likely to want to spend the time making the lunch. I like thinking up new and creative ideas, and I don't feel like I'm eating the same thing every day even if the core ingredient is the same. It feels like I'm doing something nice for myself, and with spring starting to peek over the horizon, I can look forward to being able to take my lunch out to Bryant Park and have a little escape from the workday.

I may be too sick of chicken to repeat this next time I go shopping--then again, I might not. Either way, I'm hoping to continue developing the habit of packing tasty, healthy lunches for myself. It makes me happy, and it saves me money.


Tuesday, March 27, 2007

The Emergency Fund, Reconsidered

So, after receiving my most recent paycheck, I transfered $60 above and beyond my normal savings allocation into the ING account that holds the Mini-E, my little emergency fund, to bring the total balance to $1,000. Saving this $1,000 was not a goal I initially had for this year, but recently, it's become pretty important to me--I think I'm reevaluating my thinking on the emergency fund (I see that Wanda's been doing some thinking on the same topic, which is part of what led me to verbalize that reevaluation).

See, it's the emergency part that seems unlikely to me. I have health insurance. I'm employable. I'm totally lacking any financial dependents (including cars). The likelihood that there would be an actual emergency that would exceed my current financial preparation is pretty small--I talked about that in the earlier post on this subject.

Two things, though, present good arguments for fleshing out my emergency fund anyway:

1) I really, really don't want to increase my reliance on my parents, even temporarily. I like having my own life.

2) While I am unlikely to experience a financially demanding emergency, I am extremely likely to experience a financially demanding life change.

Number two is the important one here. I don't really know what I'm doing with my life. I regularly think about leaving New York in favor of the small city in which I went to college. Grad school, of course, is a big (and expensive) likelihood. The point is, though, that I want to have the freedom to pick up and go wherever it is I decide to go, or do whatever it is that I decide to do, or both. I don't want to have to ask my parents' permission. I don't really want to have to ask anyone's permission.

So I think I may be amping up my goals for this savings pot (more dicussion to follow on that, probably), but changing its stated purpose: it's not so much the Emergency Fund as the Freedom Fund.


Thursday, March 22, 2007

The Raise, Examined

Today's is the first paycheck that reflects my recent $2,000 raise. My take-home pay is about $48 higher. This works out perfectly, actually, because my previous pay allocations left $2 unallocated, and now I have a nice round $50 to distribute. Here's how I'm distributing that $50:

I'm adding $25 is being added to my allocation for savings.
I'm adding $10 to my allocation for giving.
I'm adding $10 to my allocation for unexpected expenses.
I'm adding $5 to my allocation for entertainment.

I'm now giving 4.8% of my gross and 7% of my take-home pay. I'm saving 4% of my gross and 5.9% of my take-home, aside from my Roth and 401(k). My 401(k) contribution, which stays constant at 7% of my gross, has increased by about $6.

So those are the numbers.

For something completely non-numerical but far more interesting, check out today's post by Madame X, which is really, seriously, awesome. It focuses on the way your financial life interacts with your sense of self.


Joint Life, Separate Taxes

I live with my boyfriend. We live our lives together in a lot of ways, and a lot of our choices affect each other. Our lives are merged financially to some extent: we have to coordinate to write the rent checks. He pays the bills for electricity and internet service; I pay the Netflix bill; we have to check in regularly and make sure everyone (including our third roommate) is paying his or her fair share. We go grocery shopping together, but also seperately; we take taxis together; we go to the movies together; all these things have financial ramifications and require us to work out a sort of policy on our financial interactions.

But this is one I don't think I'd anticipated: taxes. We file separately, of course, but while my taxes are easy-peasy (one W-2, a couple of 1099s, free e-file, done), K's taxes are a huge pain in the ass. He's a freelancer, and so he's got way more paperwork than I do, an entirely different vocabulary in which to discuss his finances (technically, he's a "sole proprietorship"), the self-employment tax, quarterly estimates, and the absence of witholding to deal with. Complicated. Also—let us be frank—he is just less organized than I am about these sorts of things.

So, while I'd filed my taxes and received my return by the beginning of February, K has yet to begin working on his. For probably a month and a half, I have been bugging him about this, making myself a nuisance with my anxiety.

I'm fully aware that I've been being intrusive, and I hate bugging him, but his inaction on stuff like this just brings up this tremendous, inchaote fear in me. I'm afraid that he will miss the filing deadline, and afraid that he will end up owing the government $10,000 that he doesn't have. It's some big, instinctive, disorder thing. It wigs me out.

Well, thanks to the kind help of another New York freelancer, I found an accountant who could help, and she and K have an appointment tomorrow, and I get to sigh a big sigh of relief. After I sigh the big sigh of relief, though, I have to consider whether I'd be so freaked out about the filing thing if we didn't live together—how much more intertwined does it make our lives feel? I'm thinking kind of a lot.

And I guess it's real that money is a big part of a relationship when you start living your lives together. You have to be able to set and pusue goals together, and make joint decisions without killing each other, and that kind of thing. But because we're not married, or planning to get married, it's a different deal—there's a sense that we're separate in our finances because we're separate in our lives, regardless of the fact that we buy groceries and housewares together and cook together and share chores and all the rest of it. I don't feel like it's okay for me to ask him to change the way he conducts his financial life unless it actively affects me (i.e., the fact that he hadn't done his taxes was going to give me a heart attack)—and because our futures are so up in the air, I can't really say that his future affects me.

It's an odd position to be in. I really don't have any conclusions about it—I'm just thinking out loud—but it's interesting that it manifests itself in money, that you can see it there.


Wednesday, March 21, 2007

Losing Interest, Keeping a Cushion

The balance in my checking account is $802.47. Why is that remarkable? Well, because tomorrow is payday, and instead of being broke as the proverbial joke, I have very nearly the equivalent of my full, biweekly take-home pay in my checking account.

Where does it come from? Well, mostly it comes from "envelopes" of money that aren't used on a weekly basis, but rather in large spurts, notably the envelopes for clothing and haircuts. Half of the money I'll need to pay my rent is there, too, plus some money for household bills (though those have just come in, actually).

It feels sort of silly to be losing the interest on that much money, but at the same time, I like having a cushion in my checking account (not so much because I'm afraid of overdrafts as that it's nice to have a sort of transient emergency fund). I like being able to buy shoes (as I did yesterday on my way home from work--just $20 cheapies at Payless, but I'm hoping they might match my dress for K's sister's wedding) without having to transfer money from one account to another, and waiting for it to clear, and all that slow, irritating jazz. So I guess I've decided by default that it's worth it to me. I can't really justify it logically, though, other than with the "do what works for you" maxim.

(There's also the peril of getting too attached to that money--I do kind of dread what it'll do to my net worth when I decide I need a haircut and a new spring wardrobe, immediately.)


Friday, March 16, 2007

I Hate Float

Is it weird that I hate float? Apparently, most people count on float in their finances, like, they can write a check knowing that it will take time to clear, and in that time, they'll have the money to draw it on. Not me. I would rather eliminate float entirely; I'd rather have everything be absolutely instantaneous. Not being able to see where my money is makes me crazy--I hate the limbo of "it's been debited from my checking account, but isn't in my Roth yet," or, on the other side of the coin, "it's showing up as part of my ING balance, but hasn't yet been debited from my checking account." I find these situations truly frustrating; they upset my sense of order.

Right now, I'm waiting for a $40 check I wrote K for my half of the Bed, Bath & Beyond gift card-overflow to debit. He deposited it early this week, but it's still hanging out in the ether, causing a problematic margin between what I think I actually have and what my checking account says I have. Similarly, a check I wrote him for my share of a utility bill was deposited last Friday--I was there--but only just cleared my account today.

Aside from the fact that I really like the calculations Bank of America's My Portfolio feature does to be right, and not thrown off by double-counting or invisibility, float makes it really easy to get confused. I don't know how anyone functioned before debit cards and internet banking, honestly. I would have torn my hair out.

Update: Well, this is timely: an article about decreasing float by scanning checks.


Thursday, March 15, 2007

Is Financial Savvy Compatible with a Creative Lifestyle?

I was having brunch with a friend, recently--an old friend who's currently pursuing a career in theater and also working a couple of part-time jobs to support herself. She's been living with her parents to save money, and living frugally on top of that, and she's done a great job of it--she has enough to get herself a two-year Master's degree at a theater program she's been looking at. She's not sure that's how she wants to spend the money, but it is there.

Anyway, we were catching up, not having seen each other for a few weeks, and she mentioned that one of her jobs was in jeopardy since she's the most junior staff member at a sole proprietorship the owner of which took a serious hit in the stock fumble at the end of February.

"Me, too," I said, casually. "I mean, percentage-wise. Not in terms of, like, actual dollar amounts."

She stared at me like I had two heads. "You have money in the stock market?"

Perhaps my assumptions have been somewhat changed during my personal finance education kick, but I was sort of surprised. I said, "Of course."

We were, briefly, like two ships passing in the night.

But, see, this is totally what I mean about young, creatively-inclined people and money. We don't learn to manage our money because we have this ridiculous idea that people like us--people who listen to indie music and have liberal-arts degrees and want to make art--don't focus on money. This is dumb. It's dumb because we, of all people, need to be profoundly careful about managing our finances--if you want to be able to pursue a markedly un-lucrative life, you'd better be able to make the most of what you have, is how my reasoning goes. She's got a hefty savings sitting in the bank--I'd bet in a passbook savings account earning less than 1%. It would be really easy for her to open up the exact same Roth that I have: internet access, low fees, one target fund, done. Why doesn't she do it?

It's not venal to want to get your financial house in order. It doesn't make you some Wall Street moron, some stuffy Young Republican with briefcase and slicked-back hair. Financial disorganization isn't necessarily a demonstration of your free spirit, your unworldliness--mostly, it's just willful blindness. I do not know what I want to do with my life, but I do know that I want to have as many options as possible. I don't want to have to suck it up and take an office job I hate because my retirement savings are scrawny. I always want to have the freedom to pursue what I really want to do--and making smart financial decisions when I'm young is a good early step towards that opportunity.


Wednesday, March 14, 2007

Net Worth in Context

Like Nick, I believe that there's more to measuring your finances than net worth. My net worth is around $13,000. That's not a lot, but what if we compare my net worth as a 23-year-old to a net worth of $75,000 belonging to a 56-year-old? Who's better off? I am, right? Then again, what if you compare my net worth to, say, Wanda's? If I recall correctly, we have about the same amount of money invested (2 years' worth of Roth contributions), and though I've got a nascent 401(k) into the bargain and she's got a little student loan debt, she's got a job lined up for after graduation, replete with a salary that may bump her over the Roth contribution limit, whereas I make a salary at the very bottom of the 25% bracket and am considering going back to graduate school (for a doctorate in English literature) in the near future. Who's better off? I'd put my money on Wanda.

The point here is not just to beat my favorite dead horse about personal finance being personal, but also to point out that a single number can't really sum up the factors that affect our financial lives, chiefly opportunity. Being an American citizen, a native English speaker, a college graduate, a holder of a business degree, a holder of a PhD, a holder of substantial reserves of time over which to reap the gains offered by compound interest...there's no way to quantify those things. They don't turn up in our net worth calculations. But they certainly do affect our senses of well-being, both financial and otherwise.


Monday, March 12, 2007


So, I got one of those "You're pre-approved!" credit card solicitations in the mail this weekend, which isn't all that unusual, except that this one was for a card I wanted, American Express Blue. I'd actually applied for the Blue card some months ago, feeling like I should really have more than one kind of card (my current card is a Chase Freedom Visa), but copped out on the application when American Express wanted me to hold while they called my bank to verify something or other.

Anyway, I filled that sucker out and dropped it in a mailbox before I realized that I wasn't entirely sure that this was Blue Cash, and not just another rewards program. Oops! Although actually, no big deal--I could just switch my Chase Freedom card over from points to cash back, and still have the security of having two cards.


House-Proud on a Budget?

K and I took a field trip to Bed Bath & Beyond yesterday. I'd given him a $100 gift card for his birthday, which actually is sort of meaningless, in a here-I'll-pay-for-something-we'd-buy-together-anyway kind of way (but hey, I also threw him a great party!), and given a recent improvement in the clutter situation, we were feeling motivated to do some creative storage thinking.

Well, we weren't actually all that creative, but we did get some stuff we need: three under-bed storage bins and canisters for dry ingredients to free up cupboard space (also a second mixing bowl, a sifter, a whisk, a draining board, and a loaf pan). We spent about $80 above the gift certificate. An unbudgeted expense, but not a huge one. No big deal.

Here's the real problem: the more I spend on home stuff, the more I want to spend on home stuff. Our apartment is pretty spare (in the design-intensity sense, not in the not-a-lot-of-stuff sense), and we've lived in it just fine. Nevertheless, as soon as I waltz into a home-improvement store, suddenly, I want to do everything I've thought about. I want some mounted shelving, and an over-the-toilet unit for the bathroom so I don't have to keep my makeup under the sink, and a dresser (or other shelving) so that my closet isn't so chaotic. I think about what our bedroom could look like (awesome) versus what it does look like (imposingly cluttered), and I want to make the dream a reality. But not only is it not really my highest priority in terms of where I put my energy, it's also really expensive. Especially for a place I probably won't live very long.

I guess the thing to do is take it one project at a time. Once we've decluttered some more and gotten some things stored under the bed, we can think about hanging some of the decorative elements we have sitting around (we've already got 'em, so all we need is hardware for hanging heavy things, for one particularly heavy wall piece). Maybe then we can think about mounting shelves. If we just take it one piece at a time, hold off on buying until we're ready to do the work, and do some careful bargain-shopping, I think we can avoid dramatic overspending. That doesn't mean there won't be money involved, but at least that way we won't be wasting it.


Friday, March 09, 2007

Cashflow Commentary

It's been a pretty quiet week for me, financially speaking (other than the raise, but that doesn't kick in until my next paycheck). Most of my time has been spent doing things that don't cost money (both of my volunteer projects began in full force this week, which partially explains the slow posting schedule). Tomorrow, however, is going to be one of those dammit-I-spent-$50 kinds of days: I have a brunch date and will be joining a friend at a bar to celebrate his birthday. At least dinner parties are free (when you're not the one throwing them and already have a bottle of wine you can bring). I'm just hoping that I can talk myself into the laborious Village-to-East Harlem subway journey late at night after a few drinks and save (well, forego spending) $20 that way.

Anyway, I really liked this post that NCN did about the details of his money management over the course of a month, and I thought I'd share my own strategy.

I budget on a biweekly basis, so, the night before my paycheck direct deposits in my checking account, I enter a pay in Budget, which distributes the alloted amounts amongst the "envelopes" that represent my various budget items. That's how I keep track of how much money I have available in various categories. I have my automated transfers to ING accounts set a couple of days early, so the debits usually hit the day my paycheck is deposited: $20 goes to my gift fund (which I just tapped for the first time this year to buy K's sister's wedding present), and $25 goes to my mini-E fund. The only monthly bill I pay (other than rent) is the one for our Netflix account; it debits my checking account monthly, and when it does, I deduct that $26 from the corresponding envelope in Budget.

I enter my expenses into Budget on a daily basis. I usually round up to the nearest dollar, for simplicity's sake.

About halfway through the two-week pay period, I check in with how I'm doing. If it looks like I'm coming in safely under budget, I'll generally try to find an extra $25 or $50 to push over to my mini-E fund. I'll skim this amount out of various envelopes in small increments, and make the transfer. Other than this skimming, I let money accumulate in the envelopes I don't spend from on a weekly basis, like my clothing and haircut envelopes. I don't earn interest on this money (about $400 right now), but it does serve as a big cushion in my checking account, and it saves me the hassle of transfering things in and out constantly. Because of this cushion, I guess you could say that I don't "live paycheck to paycheck," even though it feels like I do when I'm trying to stretch my budgeted amounts in particular categories until the end of the pay period.

If, at the end of the pay period, I have extra money lying around (or I feel like skimming more out of the less-active envelopes), I send it to my mini-E fund. (Soon I'll begin splitting my transfers between the mini-E and my travel fund.)

Lather, rinse, repeat.

How do you manage your cashflow?


Tuesday, March 06, 2007

I Got a Raise!

So, I need to give more feedback, provide more follow-up updates, and...they think I'm great, are going to try to put me in charge of a revised edition, and are giving me a 6.66% raise, effective immediately.


It'll probably work out to about $50 more per paycheck. I have no idea what I'll use it for, though. I'll probably add half of it to my savings allocation and parcel the rest out to various spending categories.

I should add, though, that the real reason I feel awesome right now is that this meeting made me feel better about my job than I have in quite awhile. Both my bosses focused on things I bring to the job that I really value, like the care I take with reading manuscripts, and I'm excited about taking on a book of my own. I guess I really am one of those people who begins to check out when not challenged and who comes to life when offered exciting stuff to tackle.


Cross Your Fingers For Me

In less than half an hour, I'm meeting with the two editors for whom I work for a six-months-in performance review-style chat. Given my characteristically all-or-nothing thinking, I think they're either going to give me a raise (a little one) or fire me.

Cross your fingers for the raise and not the firing.


Sunday, March 04, 2007

Developing Savings Momentum

Here's a counterintuitive-but-true thing about my savings habits: I save faster when I'm closer to my goal. Getting my tax refund direct deposited to my "Mini-E" savings account at ING put me at $733.08, a scant $276.92 from the $1,000 goal, and I've been throwing money at it ever since. Last pay period, I found an extra $41.92 (in addition to my normal $25 automatic deposit). This pay period, the account has already gobbled up an extra $48.04 (the amounts are odd because I like round numbers, and I always deposit an amount that brings the total account balance to a multiple of $25—I know, it's a little Rain Man, but it works for me). And just today, I set up another extra transfer, for $25. It's sort of like the impulse to buy, this impulse to save—it really has remarkably little to do with my desire to attain the actual goals I'm saving for (because "have $1,000 to keep around in case of emergency in addition to the $1,000 I already keep in a CD in case of emergency," frankly, isn't a particularly exciting goal in the sense of actually attaining it), and lots to do with my desire to beat the system I've set up for myself—to move on to the next savings goal and get going on that. When the goal is close, I get itchy about the possibility of meeting it, and soon.

What this makes me wonder, of course, is should I be setting goals in smaller increments? I think of my savings goals in "units" of $1,000. I say I'll save $1,000 for emergencies, $1,000 for travel, $1,000 for cetera. If I thought of my goals in units of, say, $500, would that momentum kick in faster?


Thursday, March 01, 2007

Stock-Market Lemonade

My buy order at Vanguard went through yesterday. I got $1,000 worth of shares at $22.66/share, which is cheaper than all but the first price at which I bought Vanguard's 2050 target fund. The impact isn't too big--over 40 years, the difference between buying at $22.66 and $22.77 (the highest price at which I've bought) won't be much--but still, it offers some sort of psychological boost, a feeling of maybe making lemonade after having been given lemons.