Thursday, May 31, 2007

Frugal Food Day 1

Not a great success today in the frugal-food department, but abject failure was staved off. Yes, I brought breakfast and lunch from home, but skimped in the departments of "varied" and "delicious" (not to mention "not so full of sodium it's liable to make your arteries implode"). Breakfast was the usual, which (as I mentioned) doesn't bother me, but I put off preparing lunch last night and didn't have time this morning: I grabbed some carrots & hummus and (here's the gross part, coming up) a Cup Noodles. That's right: ramen. And right after Trent said he was pleased not to hear about ramen, too!

Anyway, I got lucky: there's an office party for a departing colleague this afternoon, and the carrots and hummus will tide me over until I can munch on some free cheese, crackers, and fruit. The ramen will remain on my shelf, a salty reminder to make time to pack my damn lunch.

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Retirement Milestone!

My 401(k) contribution for this month just hit my Fidelity account, which brings my retirement investments solidly over $10,000. For some reason, that feels like a big deal.

If I just left this $10,500 in my retirement accounts for 48 years without touching it or adding to it ('til I'm 71) and earned an ROI of 9%, I'd have $672,000! Granted, inflation would have eaten away a substantial portion of that money's buying power, but nevertheless--that's not chump change.

Not that I'd consider halting my investment, though--full speed ahead!

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Wednesday, May 30, 2007

A Week of Frugal Food

I felt really strained in my food budget this past couple of weeks. Yesterday, my boyfriend and I went grocery shopping, and I had to put the balance on my credit card not just for the rewards but because all the money in my checking account is earmarked for other things--payday is tomorrow (don't worry, my credit card bill gets paid off like clockwork; this will just come directly from tomorrow's paycheck's budget). In fact, I often feel strained in my food budget.

I think I'd like to see if I could lower the pressure on the food budget for the next couple of weeks by having a very frugal week. I'm going to try to bring breakfast and lunch to work every day between now and next Thursday. In doing this, I'm going to try really hard to pack interesting, varied meals (especially for lunch--I have a stock breakfast that I like; it's hearty, healthy, and delicious, and I don't mind eating it every day). This will probably mean I need to do a little more shopping, and will definitely mean I will need to devote some extra time and energy to planning and cooking. I'm hoping it'll be worth it for delicious, frugal lunches.

So here begins the experiment--I'll keep you updated.

For starters, here's the recipe for my favorite breakfast:
Raspberry-granola parfait
Start with a (reusable) plastic container with around a 1.5-cup capacity.
Cover the bottom with a layer of frozen raspberries (they can certainly be fresh, but frozen are cheaper and have the added benefit of keeping the yogurt cold for transport--I really hate warmed-over yogurt).
Add about 3/4-1 cup of plain yogurt. I like lowfat (not nonfat--it's too runny), and I particularly like Trader Joe's 2% Greek yogurt, but it is more expensive than their regular organic.
If you want, you can slice half a banana over the yogurt. I only do this when I have time, but it is extra-tasty.
Top the container off with granola (I use TJ's lowfat vanilla almond--it's tasty and full of fiber--but you can use the one you like best).
Snap the lid on tight, stick in your bag, go.

I buy TJ's frozen raspberries (not the organic kind) for $1.89, TJ's Greek or organic yogurt (both $2.79, but the organic makes 5-6 servings, while the Greek only makes 3), and TJ's granola for less than $3 (I forget the price even though I buy it constantly). Anyway, if you get the cheaper yogurt, this clocks in around $1.28 per serving (no bananas); with the Greek, it's still doable at $1.75. Cheaper than buying one for $4 at Pret a Manger? You bet.

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Tuesday, May 29, 2007

Bookswap a Go!

My boss just asked me to swap for a book for a colleague's personal use in a course she's taking. That means my compunctions about swapping for the Oxford Companion are out the window, and I won't have to pay for it.

Score.

[By the way, I realize that I haven't explained this: "book swaps" are the methods used by publishing companies to obtain competitors' books. I email an editorial assistant at whatever company and tell them what I want, and they either request something in exchange or bank the favor for later. The point is, the book I get will cost me no money, but it will cost my employer money. Of course, so do the books that my employer offers as a perk.]

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Living on Living Stipends?

Most of the graduate departments I've looked at guarantee financial aid to PhD students that includes a stipend for living expenses as well as full coverage of tuition and fees. That's great--it makes the PhD a relatively inexpensive degree (except, perhaps, for opportunity costs). Problem is, the living stipend figures I've seen are very small, generally in the $14K to $18K range. Before taxes. That doesn't look to me like enough to live on, let alone enough to save on.

Can any of my readers who are or have been grad students (especially in the humanities) tell me a little about income as a grad student? Does the living expenses stipend actually cover the cost of living? Does the department offer additional work, or do you look elsewhere for employment above and beyond your stipend?

I'm hoping to figure out how much I can expect to make per year. My expectations on that point will help shape the financial steps I take in 2008--yes, I know that's a long ways away, but, like the Scouts, I'm a big fan of being prepared.

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Monday, May 28, 2007

June Goals

Following Krystal's lead, I thought I'd lay out some specific goals for June.

Finances:
1. Add $175 to my Freedom Fund balance. This is $75 over my autodrafts, and would bring the balance of the Freedom Fund ING account to over $2,200, which would set me up to hit $2,500 by the end of August.
2. Add $50 to my Travel Fund balance, to bring it to over $1,150. This is just my autodrafts, so it's a pretty low bar.
3. Cashflow purchase of the Oxford Companion to English Literature. I'd like to find this book, a resource for the Lit GRE, on one of the discount sites for a price that I can manage to cashflow from June's pay.
4. Buy sandals and Feist's new album. Planned spending is something I need to work on—I tend to nickel and dime myself out of things I want.

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Friday, May 25, 2007

Freedom Fund Adjustments

I'm bumping the goal for the Freedom Fund up to $5,000, from $4,500. This is partly because I have a round-number fetish. It's also partly because I'm not totally confident that $1,500 per month quite covers expenses.

My current balance is $1,850 in the ING Freedom Fund account, with about $1,030 coming in when my despis├ęd Bank of America CD matures in August—by the end of this month, it should be $1,950. To be on track to save the extra $500, the balance in the ING account needs to be about $2,335 by the end of August (not counting the CD). I don't think that will be a problem: it means saving about $130 per month during June, July, and August. I've been saving more than that anyway—I've been making at least one extra $50 payment per month lately, and I don't anticipate a problem continuing to do that. If I did that every month through August—contributed $150 a month—I'd have a balance of $2,400, not including interest. Just to set the bar a little higher, I think the goal for the end of August is $2,500.

My hope here is that I can hit the $5,000 mark by the end of the year (again, this assumes that my beloved and generous aunt continues her tradition of $500 checks to her nieces and nephew at Christmas). Then I can let the Freedom Fund percolate while I focus on other savings goals.

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Grad School Admissions Process Cost Projections

So, I'm getting pretty serious about applying to grad school this cycle, which means I need to get pretty serious about paying for applying to grad school.

A quick breakdown of some estimated costs follows.

-Princeton Review Literature subject test study guide: $20 (bought it two days ago, from my "unexpected expenses" line item)
-Kaplan prep course for GRE general: $1,149 (parentally subsidized or no go--if the latter, there will be general GRE prep materials at a cost of about $100)
-GRE general registration: $130
Other study materials for the subject test: some are free through work (because we publish them), but some I'll need to either buy (eBay, half.com) or swap for through work (it's an established procedure, but I'm a little dubious about the ethics involved in swapping company books for books I want personally, even though others seem to do it). I'm estimating $50.
-GRE subject test registration: $130
-GRE score reports: $17 per school (God, BITE me, ETS), with four reports included in the test fee. If I estimate I'm applying to 8 schools, and that I know what 4 of them are by the time I take my GREs, that'll come out to $64. There's also a $6 fee for getting your subject test scores early by phone, and I predict I won't be able to resist that. Bring it up to $70. Note, too, that I'm not sure whether or not I'll have to double that number to include the subject test reports or if they're included. My guess, informed by prior experience with ETS, would be the former, so bring it on up to $140.
-Application fees: around $50-$80 per school. Estimating high, I come up with an appalling number: $640.
-Transcript requests: my undergrad charges $3 per transcript. Again using the eight-schools estimate: $24.
-Postage. There are a lot of pre-stamped envelopes here. For example, each of my three recommenders will get stamped envelopes to send their recommendations to each of my 8 schools. That's about $10 right there. I'll spend money on sending things to schools, too, and then consider that there'll probably be a disaster or two requiring Fed-Ex. I'll say $40.

The grand total? A whopping $1,174. Not including the prep course.

Yuck.

Okay, so say we estimate I bring an extra $200 a month (after taxes) on my freelance job. If I do that every month between now and December, I should make enough to cover the whole grad school process without touching my savings. Nevertheless, I am not going to enjoy shelling out all that money I could have saved, and I kind of think ETS should be indicted for racketeering.

(Princeton Review has a page on the cost breakdowns of applications processes here if you're trying to predict costs on an application process that's not a PhD in English.)

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Tuesday, May 22, 2007

Stasis

So, the money thing is just kind of puttering along. I'm on track to meet my Freedom Fund savings goal for the end of August ($2,000) by the beginning of June, which is nice. I may or may not have an extra $25 or $50 to save at the end of this pay period, but it'll be fine either way. One thing I am noticing is that with summer's advent comes increasing difficulty with keeping myself within the bounds of my budget. There are a couple of things I need--like a pair of sandals--but mostly there are suddenly just more things I want than ever: cold drinks and summer-blockbuster movie tickets (I recommend Black Book, which is not being marketed as a summer blockbuster because it is subtitled, but is basically a big, thrilling war melodrama) and lots and lots of fresh berries and iced coffees and restaurant dinners at the tables set up on the sidewalks and all sorts of things. The problem with a lot of these things is that they are that most insidious of money drains, the Little Things That Add Up, so I am going to have to remain vigilant.

The real-life thing is in a bit of flux. If I'm applying to grad school this time around for real, I probably want to stick it out in my current job until then, just so as not to add the stress of a job change. Problem is, though, that while I work here I rely on my current income (plus the freelance gig) to get me through the grad school application process, which is an expensive one. I may have to ask my parents to help out with that a bit, much as I hate that prospect.

In a way, this is a nice place to be. I feel like I don't have to work too hard at money right now--I still have to put in the effort at not spending too much of it and saving enough of it, but mostly, it's sort of on autopilot: 401(k) contributions and savings autodrafts and accounting systems are all humming along nicely, which leaves me free energy to deal with the more important questions in my actual, as opposed to financial, life.

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Monday, May 21, 2007

Ask An Expert!

I'm not an expert in personal finance; I'm just figuring it out for myself. But you know who is an expert? Each of the authors of a personal finance guide for "modern girls," who've agreed to answer questions over at Well-Heeled, one of my very favorite personal finance blogs.

If you have any questions you haven't been able to find answers to, here's where you can go to ask the experts!

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Thursday, May 17, 2007

When It Rains, It Pours

...except, in a good way.

I got an email today from my alma mater's Director of Career Services, explaining that an alumnus who's a successful author is looking for a few people to work three days at the end of the month at a book event he's doing in New York. And he's offering $25/hour. Am I interested?

Of course I'm interested--problematically, though, I have this "job" thing. The woman who contacted me (I don't know why she picked me, but I'm not looking any gift horses in the mouth) provided the alumnus's email address, so I shot him a quick note explaining my interest and the restrictions on my time. Hopefully, he'll need someone in the evenings and on Saturday, and won't mind that I can't work days.

Even better, the alum is a career & grad school admissions coach, and would be a great contact. (I snuck a reference to my own grad school ambitions into the email I sent.)

With this extra cash (this potential inflow, and also the freelance job through work) I plan to cashflow my grad school application expenses (study guides, test fees, transcript fees, application fees, and postage six ways from Sunday). That way, I won't have to ask my parents for money and I won't have to dip into my savings.

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Wednesday, May 16, 2007

More Frugal Lunches

I recall people enjoying the last post I did with a couple of frugal recipes, so I thought I'd post the recipe I've been enjoying for lunches this week. I really like this lunch because of the intensity of its flavors: there's a certain luxury to big, bright flavors that's often difficult to achieve in low-cost recipes.

Mediterranean Couscous Salad
Couscous, you may have noticed, is really cheap. Especially if you buy it in bulk. Which I do. So, you start with about two cups of couscous, which you prepare in the normal way (that is, boil the same amount of water as you have couscous, pour couscous in, cover and remove from heat, fluff periodically). Say this costs a dollar.
Chop up a big red onion and a tomato or two. You can also add some cucumber. (This part cost me less than $2, but I skipped the cucumber this time.)
If you like these things, crumble in some feta cheese (I bought a block for less than $2) and some pitted olives (I like Kalamata, and am willing to lay out the ~$3-4 for them).
Also optional: tossing in some chunks of grilled chicken. (Say, $4 worth.)

You toss all of the extras into the couscous, dollop with olive oil & vinegar (wine vinegar is best), add salt and pepper to taste, and put it in the fridge. It's really, really easy, in addition to being cheap. And in addition to both of those things, it's also tasty.

So far, I've gotten two meals out of this, and expect to get two or three more. If the super-deluxe version (with cheese, olives, and chicken) costs $13 to prepare (the full batch), that's about $3 per meal. Keep in mind, too, that you basically don't need anything else to go with this (though an apple makes a nice side dish): it's a full meal in and of itself, which makes it really easy and convenient.

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What I Wish I'd Known About Money When I Graduated

It's that time of year, and it means that I'm no longer the most recent class of college graduates (this eliminates some of the power of the "but I just got out of college!" excuse, alas).

So I'm thinking about the financial mistakes I made as I tried to set up my life, and the things that I learned from them. Here are some things I blew:

1. I put money in a CD.
It seemed like a really good idea to me to put $1,000 of my hard-earned campus-job money into a CD the summer after graduation, to ensure that I'd still have it a year later. And I do, so, points for that. However, I really botched the interest rate, because I bought the CD through my bank, and the interest rate on a CD at a brick-and-mortar bank is not only lower than you can get on a CD through an online bank, it's lower than the interest rate I earn on my liquid savings at ING. No good. Check out Bankrate for the latest rates.

2. I was reluctant to put my money in an online bank.
It took me a long time to be willing to dip my toes into the world of online banking, and that cost me a better interest rate on that aforementioned thousand bucks. It's not that scary, really, though, and the interest rate is great. We're the internet generation: go for it.

3. I set up my housing from far away and by proxy.
I was in touch with my boyfriend by phone as he and our current roommate hunted for an apartment--and it was profoundly logistically difficult. In addition to the money I spent having things notarized and FedExing them (both of which would have been unnecessary had I been proximate), I ended up overpaying my portion of the initial costs (broker's fee, first/last, deposit, &c.). Technically, this just means that the guys I live with owe me money, but actually, I never expect to see that thousand bucks again. This would never have happened if I'd been there to write the check myself, as opposed to having to ask my father to access an account on my behalf and send a check.

...and here are some things I did a good job of:

1. Taking it slow on the startup costs.
Though getting into my apartment blew a big chunk of money, I did a good job of minimizing the cost of starting my life as a grownup. I bought some work clothes & shoes, but kept it minimal. I took hand-me-down kitchenware and asked for housewares for Christmas and my birthday. I limited my initial furniture outlay to a bedframe (bought from Overstock.com, split with my boyfriend) and a couch (bought at Macy's home sale, split three ways). K and I have only just gotten around to putting up shelves, and we are just now planning on going shopping for a dresser (actually, that one I'd recommend you do right away). We use a dining-room table that K inherited from a previous roommate and mismatched chairs. And our friends still think our apartment is great. You don't have to leap into grown-up-dom with a living room set and color-coordinated everything and a credit card bill to match.

2. Making friends with my Roth IRA.
This is such a good account for young people, and I think everyone should have one. It's especially valuable for those new grads who start out in hourly jobs, or other jobs without benefits (including not-for-profit jobs where there's no employer match in the 403b). I'm really pleased that I prioritized contributing to my Roth, and I'd advise that everyone do so, even if it's only a few bucks a month (indeed, there are companies that will let you open the Roth with very low or no minimums).

3. Starting off on the right foot.
It's way, way, way easier to learn to live on a smaller amount of money than it is to start out living on your full salary and then trying to start saving. I saved from my very first paycheck, which helped mitigate the feelings of deprivation. (Subsequent increases in saving and giving have been far more noticeable.)

4. Being eager to learn.
The best thing, hands down, that I did for my finances after graduation was devote myself to learning how they work. That's why this blog exists. The prospect of opening a retirement account, say, is really, really daunting--even just the logistics of it. The how and where remain mysteries even after you grasp the why. Again: the internet is great for this stuff. I pretty much just read everything I could get my hands on, and now I know enough about the basics of financial planning that I pretty much feel comfortable making my financial choices.

I think that last one is really the most important--if you're trying to learn and figure things out, you probably won't make the worst decision even if you don't make the best. The easiest way to botch your finances is to ignore them, so a little effort goes a long way.

Good luck, class of '07!

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Tuesday, May 15, 2007

How Much is a Deal Worth?

Towards the end of my time in Berlin, I went to a concert with some friends, at the Passionskirche in Prenzlauer Berg. The band was the Kings of Convenience, a sweet Norwegian indie-pop duo. The opener was this woman whose voice sounded really familiar--a friend figured out that she does the dreamy, looping vocal on Broken Social Scene's (awesome) song, "Anthems for a 17-Year-Old Girl." Anyway, she was amazing--I bought her CD from her after the show, and it's been one of my favorite albums ever since.

Now this woman is pretty famous. She's Feist, and she's remained one of my favorite musicians. Her first major album, Let It Die, is totally brilliant. I skipped her next effort, Open Season, which is basically remixes of Let It Die singles, but now she's come out with a new original album. I've heard some of the songs already (search for her on YouTube, her videos are great, and "1 2 3 4" is from the new album), and I know I want to buy it.

The other day, it was staring me in the face at a Starbucks counter. It even had a sticker offering two free iTunes downloads with purchase. I was, quietly, appalled--there's a sort of possessive feeling to loving an artist whom nobody knows, and when that artist gets famous there's ambivalence--on the one hand, I think she's great! I want her to succeed! And on the other hand...well, Starbucks. It's such a symbol of mass consumption, and it seems to imply that she's appealing because she's bland rather than because she's awesome. On the other hand, is buying it at Virgin any less mass-consumption tinged? They don't call it "Megastore" for nothing, you know. (Maybe I'll trek down to my real favorite record store, Other Music, and buy it there, just to really make it count.) (Clearly, this doesn't matter all that much.)

Anyway, I didn't buy it. I know that I'm going to buy it, and in not buying it at Starbucks I'll forfeit the "two free downloads!" perk, which is a great one, but I just couldn't bring myself to do it. I can't be The Girl Who Buys Music At Starbucks (though apparently I don't have a problem with being The Girl Who Liked That Band Before That Band Was Cool).

I'm just totally fascinated by my overwhelming reluctance to go for the better deal here. Evidently, not buying my CDs at Starbucks seems to be worth $2 per album to me.

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Monday, May 14, 2007

Weekend Spending

So, the good news is that I found this amazing bar in my neighborhood on Friday, with live salsa music and a patio and mojitos made with cane syrup and homegrown-tasting mint, and the other good news is that I sat there with my boyfriend and a friend from college who was briefly in town before leaving for Africa today and another friend from college who's just gotten home from a year of teaching in France and we toasted our bright academic prospects (we were all three of us English majors in the same graduating class who have our eyes on the Ph.D. prize) over shots of Cuervo and everything smelled wonderful and I could feel the summer coming, and the future too.

The bad news is that I spent $35 on drinks. Three mojitos and the aforementioned Cuervo shot came to $28, and then I picked up a drink for the friend-back-from-France (with K), and then tip...and then no money left. I had to turn down three social opportunities because I had basically zero discretionary dollars left after that. I skipped a friend's going-away party on Saturday partly because I was tired and partly because I was grumpy at the prospect of going out and not being able to drink, and I turned down a last-minute trip to Atlantic City for a friend's birthday on the same night because duh, no money, and I skipped tea with the back-from-France friend on Sunday because, um, still broke.

In general, I think I prefer to do more and drink less on each occasion, but nevertheless, I had a really lovely time on Friday, and it is nice to just go out and get tipsy with friends sometimes. I just really, really don't have the means to be out and about and spending money constantly. And sometimes that bugs, but it's a reality, and I'd rather face it and try to work around it than put $60 worth of entertainment costs on a credit card every weekend.

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This American Life: Getting and Spending

I spent some time over the weekend perusing the archives of This American Life, and stumbled on an old episode that focuses on money: "Getting and Spending". It's a free listen, and I recommend you check it out. A trader gets rich off the Chernobyl disaster, a suburban dad turns to robbing local stores to pay his son's medical bills, and John Hodgman "goes rogue" in the Mall of America.

Best of all, though, is the segment about "that guy" syndrome—the ways in which our purchases or conscious non-purchases group us. Is this exclusively a contemporary phenomenon? Sometimes it really does seem to have overrun the way we define ourselves.

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Friday, May 11, 2007

Slush Funds

I picked up the opportunity to make some extra cash today--I grabbed a freelance job through work, reading the slush pile at $12/hour. First of all, I would--and have, though not here--read the slush pile for free. I love the slush pile. I love the idea that there might be a diamond amongst the rubble. I love that it's trade projects in addition to college projects. Most of all, I love formulating opinions about things, and that is totally what this job is.

I also love the idea of bringing home, say, an extra $150 a month. Yay!

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Thursday, May 10, 2007

What I Want to Be When I Grow Up

All this talk of job satisfaction around the blogosphere makes me think about what I want to be when I grow up.

Some days I really want to be a stay-at-home mom, with a gift box and a deep freezer and a crockpot. On these days I want to make lunches in brown bags and stock from scratch. I want to shop yard sales and drive carpools and swap recipes with the other moms.

Other days I want to be an MBA, sleek and besuited and bountifully compensated. I want to buy an apartment and a beautiful dining room table for that apartment. I want to invest like a busy investing bee and have millions of dollars. And then I want to quit and write a novel or something.

Yesterday I looked at jobs on Idealist.org. There's a position open at one of the organizations I tutor with, and I thought about applying for it. The organization is badly run at present, which is both a concern and a challenge. I thought about how the problems I solve at my current job mostly involve bureaucracy and overnight shipping and formatting things and how the problems in that job would involve far more interesting things, like making a volunteer program work well. I thought about being able to walk to work in the morning, and never having to take the rush-hour train. I thought, too, about the fact that I'd be able to negotiate a new starting salary, one which even from a non-profit would almost undoubtedly be higher than my current salary. I thought about my vague plans to go to grad school, and what that timeframe might be like, and how much of a chance it would give me to try the new job (for which I think I'm a strong candidate, actually).

I don't like my job that much. I just...don't. It's not challenging and it's not interesting. I have one project that I'm invested in, and that's it. But I've built so many plans on top of the platform of this job that it's difficult to seriously contemplate leaving before those plans are completed--before I've saved the amount of money I want to save this year, for example. And I hate, hate, hate the thought of using up the emergency fund I've worked so hard to build.

But the other name for my emergency fund is the Freedom Fund, and the whole idea is to let me do things that are good for me even if they cost money.

So I think I am on borrowed time at this job. Ideally, some new and fascinating job will pop up around September, when I'll reach the one-year-served mark and can respectably quit. But should I be worried about when I can respecably quit? Shouldn't I be more worried about the way I feel of a Thursday afternoon (to wit, drained, bored, and frustrated)?

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The $300 Kitchen

For the recent or soon-to-be college grad in your life, this handy article from the Times lays out a plan for purchasing the necessities of a well-equipped kitchen for $300.

I contend that with a bit of savvy, patience and a willingness to forgo steel-handle knives, copper pots and other extravagant items, $200 can equip a basic kitchen that will be adequate for just about any task, and $300 can equip one quite well.

The key point? Restaurant supply stores. Every city has one, and if it's good enough for the pros, it's good enough for the beginning home cook.

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Wednesday, May 09, 2007

My Financial Foe: Planning, or the Lack Thereof

I don't know what I'm going to be doing on Friday evening.

When I was in college, I had a standing Friday-afternoon coffee date with one of my closest friends. We met in the parking lot at four, got into her car, and went to our favorite coffeehouse, where we got coffee drinks and snacks and/or dessert, had a nice, long, leisurely chat for a few hours (it's that kind of coffeehouse), and then each went home and crashed after the long week.

The closest thing I have to that now is a tentative Friday-evenings-are-best-for-me arrangement with a friend from college who's living in the city now. My friends and I don't usually plan in advance, and certainly never at a longer range than a week away. It's a cell phone-based, flying-by-the-seat-of-our-pants kind of thing, where a friend and I are having dinner (which we arranged by email that afternoon at work) and she'll call someone or I'll call someone and they'll say, "Oh, I'm at this bar with a couple of friends, come join us," and we go off to meet them.

The thing is, aside from the fact that I often wish I knew what I was doing just for curiosity's sake, not knowing what my plans are makes it really difficult to budget for these kinds of expenses. It makes it difficult to know how much money I'm going to spend on eating and drinking out, on cabs, and even on groceries (how many meals do I need to plan for?). There's a special kind of paralysis induced by lack of planning, and I encounter it often.

Yesterday, to combat this plan-vacuum, I sent out an email to some friends proposing a weekend plan. I got a really enthusiastic response, even from the people who can't come, and so now I have a plan for Saturday. I'll probably spend Friday afternoon with a friend who's in town for the weekend, and Sunday with a school friend who just came back from nearly a year in France (initially, the idea was to have High Tea at the Harlem Tea Room, but it will kind of depend on how far I can make my eating-out budget stretch). The follow-up emails sparked by this initial email has gone a long way toward helping me figure out what my weekends will look like until the end of the month.

So if you have the same problem that I tend to, from this experience I'd certainly say that I advise taking a little initiative. Try organizing an event (mine is just a potluck picnic with board games in Central Park), or even just sending out an email to all the people you'd like to spend time with that says, "Hey, I'd like to plan to spend some time with you--when is a good time for you?" It facilitates planning ahead, and that makes it easier to budget for your plans.

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Monday, May 07, 2007

Financial Literacy

I don't know why it took me so long to find this, but Bankrate.com is running a year-long financial literacy-o-rama. It's great, a very accessible and thorough look at the basics of financial planning and money management. A very good primer, excellent for beginners--I think, when it's finished, this will be something young people can refer to as a way to get acquainted with lots of basic concepts of personal finance.

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Saturday, May 05, 2007

Haircut!

I spent very nearly $200 on my hair today, including tips and product, and I'm not sorry. My hair is adorable. I have a choppy layered bob and shiny, happy curls.

On the more frugal end, I think what I'll do is pick up a hair scissor and trim my scraggly split ends myself for a bit in order to extend the length of the cut, because while, as previously mentioned, I'm not sorry for spending $200 on my hair, I don't want to do it every day.

(I'll also be sending the excess in the "haircut" envelope to savings & starting fresh on that envelope.)

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Friday, May 04, 2007

What's the Point of Points?

I checked my credit card statement the other day, and realized that I have quite a few rewards points--enough to get a $25 gift card to various stores and nearly enough for an assortment of small appliances. What I don't know, really, is how I handle these points. Part of me is just like, "eh, get another Starbucks gift card and get yourself a few iced lattes over the coming summer months." Another part of me is like, "No! Save up the 50,000 points for a round-trip ticket to Europe!" A third part of me is like, "Hey, if you save these points until, say, November, they could take care of a chunk of your Christmas shopping."

No decision has been reached. How do you handle your rewards points?

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Thursday, May 03, 2007

Aaargh.

I really just shouldn't try to change the template. I deleted everything, because I'm dumb, and I have to reconstruct from scratch (if I miss your link, let me know). Please bear with me.

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The Kids Are Alright

This article on the savings habits of young adults (25 and under) is, how shall we say? Ah yes: DUMB. It is dumb.

Why is it dumb? Let's examine!

1. The author is shocked--shocked!--he is clutching his pearls!--that only 4% of workers 25 and under max out their 401(k)s. Do you know why that is the case, Paul J. Lim of U.S. News and World Report? It is because for a majority of workers 25 and younger (hey look! MSN says that "the median income for families headed by people aged 20 to 29 was just under $28,000 in 2004"), maxing out a 401(k) would involve cutting their after-tax income in half or nearly in half. Paul J. Lim, if I maxed out my 401(k), I would be making $17,000/year before taxes. I pay $7,200/year in rent alone. That is why I am not maxing it out. Seriously, even at a 15% savings rate, you'd have to be making $100K to max out your 401(k). How many 25-and-under folks make that kind of money? Around 4%, you think? Less? As we Gen Y-ers are so fond of saying, DUH.

2. DUH, too, to the only-19%-of-young-workers-fund-an-IRA thing. Consider that most 401(k)-eligible folks who do not contribute to a 401(k) are not likely to contribute to an IRA. Then consider that of the percentage that do contribute to their 401(k)s, many will exhaust their capacity to save before exhausting the employer match, and nearly all will do so before exhausting the contribution limit. There's also a lot of really dodgy language in here, but it looks to me that we're only talking about full-time employees and their IRA savings tendencies, so is it actually that shocking that only 1 in 5 employees age 25 and under has sufficient capacity to save and is sufficiently on top of things to divide her retirement savings between her 401(k) and her IRA? No. It is not that surprising.

3. I particularly like the graphic of the tattooed, soul-patched hip-football-jersey-wearin' youngster that accompanies the article. He is scratching his head in confusion, people. Gosh darn it, U.S. News and World Report, young people never have reasons for our financial decisions! It's just that we're baffled by pieces of paper! In fact, we've almost never seen a real, live piece of paper. What's a "letter"? Is that like an email that you carve into a stone tablet and send by Pony Express?

4. Since we've established that young people tend to be in low tax brackets, how about considering that tax breaks are of substantially less value to us? Not no value, mind you, but less. (Hence the whole point of the Roth.) In the example about medical FSAs, I wouldn't at all be surprised if the margin of error incurred in young people's estimates of their medical expenses were equal to or greater than the tax break, and that money's nonrecoverable. There's also the question of how much hassle it's worth to save forty bucks a year in tax breaks, given young people's lower overall medical costs. I don't use my medical FSA for this reason.

5. Consider what that there are other financially responsible things young people can do with their money. We can save cash for an emergency fund or a down payment on a house. We can pay down student loan debt or consumer debt. These things are all contributors to a strong financial foundation.

Please don't misunderstand me. I would of course encourage all young people to save aggressively, and to do it in the best vehicles available--youth is a great financial opportunity. But do I blame my fellow Manhattan-living, little money-making coworkers for not contributing to their 401(k)s (let alone Roth IRAs and medical FSAs)? Am I surprised that they might find it difficult to do so? Not at all. It's hard. I think there are two main obstacles to utilizing these savings vehicles:

1. We don't have that much money to begin with. It's difficult to give up 10% of your paycheck just to see a 401(k) balance growing in what feels like a pitifully slow fashion. My 8% contribution with dollar-for-dollar match (up to $1,500) will bring me to around a quarter of the maximum contribution level.

2. There is a veil of impenetrability that surrounds savings vehicles. I continue to suspect that these things are made to seem difficult on purpose, when in reality they are not that difficult (email HR person, fill out form, dump contribution in target fund, done). Nevertheless, young people feel baffled by the whole prospect--I certainly did--and there is a serious dearth of accessible information.

I'm just saying, we are not financial morons because we're not all plugged into 401(k)s and Roths. These aren't particularly meaningful statistics, and alarmism about the financial habits of people who by and large have only been working for 2-3 years is patently unwarranted. We're young, we're poor, we're working on it. Chill out.

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Wednesday, May 02, 2007

Silver Spoon

So this is the money topic really on my mind of late: inheritance.

My parents are going to their house in Umbria for about four months (my father is beginning to really enjoy his retirement), and as a precaution (they're anxious about spending all that time on another continent) have sent me and my sister a catalogue of what they call "the important papers"—all of the account statements and deeds and bonds and whatnot—as well as a list of valuable items in the apartment. It doesn't even have any numbers in it, and nevertheless, it's the most I've ever known about my parents' financial situation.

I've spent much of my life without any real knowledge about my parents' finances. I didn't really realize that my family had a lot of money compared to many families until I entered a public (test-in) school in 7th grade, and even then, it took awhile to get the necessary shot of perspective, partially because both of my parents are pretty anxious about money management (in separate and complementary ways). By the time I realized they were going to pay all of my college costs out of pocket, I had a pretty good handle on that, like, "okay, got some money." Nevertheless, I've had no idea if "some money" is like, "travel the world in retirement" or like "leave a sizeable estate," and from this catalogue of assets, I'm beginning to think it's the latter (though I couldn't say for sure).

I'm self-conscious talking about this, the growing sense that there's probably a substantial amount of money coming to me. It's just a weird idea. Not that I'm not grateful or glad, it's just...weird, kind of, possibly because thinking about it involves contending with the issue of my parents' mortality, which is actually pretty hard to think about in a real way (especially because my parents are older than most people with children my age). It's also weird because I've never really considered the possibility, and because there's this whole weirdness that surrounds inherited money, like I'll automatically turn into a dissolute trust-fund baby, all Sarah Michelle Gellar in Cruel Intentions, or like the kids at my sister's private school who'd never taken the subway because they'd always been driven to school in chauffeured cars.

And then there's the little devil that sits on my shoulder going, well, you don't need to save for a down payment if you're just going to inherit enough money to buy a house outright. That little bugger needs squashing, because yes, you could think that way, but it would mean working around a very uncertain timetable, and I like having more control over my life than that.

See, I'm spoiled, relatively speaking. I've been given all manner of luxuries, really, and sometimes I catch myself thinking that those luxuries are universally expected, and I have to give myself a quick slap on the wrist. But I'm not that spoiled. I have a work ethic, a serious one, and a driving sense of ambition, and a demanding conscience. Those are all things my parents have encouraged in me. I manage money sensibly. What reason is there to feel ashamed that at some point in my life, I may receive a substantial sum of money I didn't earn? There's no reason to think I'll blow it on a stable of glorious Marc Jacobs bags, because I'm just not that kind of girl. There's every reason to think that I'll use it intelligently for the benefit of my family and community, because I am that kind of girl.

And isn't this the goal of careful money management, of working hard and saving hard? Isn't the whole point to provide your descendants with more choices, more freedom, more opportunities? That's certainly how my parents have always thought of their money-management goals, and it looks like they may have achieved those goals.

So whence the weirdness?

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Tuesday, May 01, 2007

Eating In

As so often happens around Monday before payday, I am out of money for the week. Yesterday, I packed a couple of hard-boiled eggs for breakfast and yogurt and granola for lunch (I also keep dried apple slices in my desk drawer for snacking), but I wasn't sure what I was going to do about dinner--just wasn't that confident that I had enough food in the house to make it to payday without going grocery shopping (which, of course, wouldn't actually be that big a deal, in that there's money in my checking account). But lo and behold! When I looked in the fridge and the freezer and the cupboards, though...there were shrimp gyoza and artichoke tortellini and milk and granola and peanut butter and a bagel and chive-and-onion cream cheese and grapes and apples and mozzarella cheese and soup. That is to say...certainly enough to eat for two days. In fact, I don't doubt that I'll make it through the week on all that food (given, that is, that I'm being treated to lunch twice and dinner once).

I wonder how I forgot about it and how I can not forget about it in future, because I think the sense that "there's nothing there" is one of the things that causes me to not bother to pack lunch in the morning, or pick something up on my way home instead of cooking. Maybe more specific meal planning is called for, as opposed to the kind of shopping I do, which is based around "What would I like to have in the house?"

I tell you, the arts of domestic economy are criminally undervalued.

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April Net Worth

I worked out my net worth update for April this morning (it's posted at NetWorthIQ). It saw quite a jump, which I didn't expect, given the money I spent on clothes (about $335). Granted, I did work pretty hard to get some extra money into the Freedom Fund, but I think the increase is really attributable to growth in my retirement accounts.

I'm still not really sure if this is a metric that works for me--there are so many contingencies and variables. Overall, the trajectory does seem to be right, but when I add it up, I just end up poking lots of holes in the result. It's still useful for a rough comparison, I suppose.

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