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!
Wednesday, May 16, 2007
What I Wish I'd Known About Money When I Graduated
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.
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.
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.
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!
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)?
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.
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.
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.
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.)
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?
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.
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.
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?
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.
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.
Sunday, April 29, 2007
Have You Met Miss Jones?
I had brunch with my friend M this morning, and had a run-in with that pesky keeping-up-with-the-proverbial-Joneses thing.
M is glamorous. She just is. She's a teeny, spritely Texan with a pointy nose and a pixie haircut, all-but-engaged to a boy who's about to start a 100k job with Goldman Sachs. She's a temp at a not-for-profit staffing organization, and probably makes the same amount of money I do (albeit with no benefits), but she's not saving anything (she told me) and she just borrowed money from her father (who has plenty of it), so she has more spending money than I do. You can see that difference, too. And though generally I don't do this whole trip, this morning it made me feel bad about myself. I just suddenly felt a distaste for the tightness of my budget and the scrupulousness with which I have to plan and live in order to stick within it.
So I ordered a mimosa at brunch when she ordered one. (She actually ordered three, over the course of the meal. I stuck with one.) One of the things I've always liked about M is her frankness about liking money, which makes it ironic that I wasn't able to say, frankly, "I'm going to skip the mimosa; I can't afford it."
Five bucks for a teeny (and none-too-strong) mimosa, for no reason. I do love a mimosa, but I didn't enjoy this one.
And here's the kicker: she told me that recently she "spent way too much money at M.A.C.," and was invited to the launch of their new product line. She knows I love M.A.C. makeup, so would I like to come? Eeurgh. I said yes, but I may have to call her and cancel, because my chances of getting out of a M.A.C. store in M's company without blowing thirty bucks are slim. And I do not have thirty bucks to blow. Not even on a wonderful new lipstick. Not even on wonderful M.A.C. foundation, even though I do need a new foundation.
See? This is why I shouldn't go.
Friday, April 27, 2007
Expenses Ahoy!
Tucking $3 in an envelope with a form just to see my own undergrad transcript (for the first time) makes me realize how expensive the grad school application process is going to be. Application fees are $50-$80 per school, and that doesn't count all the shipping expenses (like all those self-addressed stamped envelopes for my professors' recommendations), let alone the GRE prep course tuition.
Eesh.
Anyway, I'm going to chill out for the next week a little. I could push really hard and squeeze an extra $50 or so out to put in the Freedom Fund...but frankly, I'd rather have a little leeway and a social life.
Thursday, April 26, 2007
The Game of Life (or, Give Me Your Tired, Your Poor...)
The other day, I played a game of Life--you know, that oddly elaborate board game whose goal seems to be to retire to "Millionaire Estates," and which no one seems to really win?--with the girl I tutor. She's eleven. She struggles with English literacy, and both of her parents are Ecuadorean immigrants who support family in Ecuador. As we played, I tried to explain, in a scattershot fashion, a few basic financial concepts--that when you borrow money, you have to pay back more than you originally got; what insurance is and why people buy it; that people take out loans to pay for college.
I don't think it was very helpful. She didn't seem to understand why I was trying to explain these things to her. Part of the problem, I think, is when you're growing up in a household of illegal immigrants, your financial examples are necessarily different. My tutee's parents can't open bank accounts, let alone invest their money, so a lot of the concepts of institutionalized finance as I understand them are foreign and incomprehensible to her.
I've been thinking about it and can't come up with any answers. This kind of stuff is crucial to success in "mainstream" America: it's part of the lever by which people improve their children's lives so they can improve their children's lives, and so on. My father is the son of immigrants--albeit legal immigrants who came through Ellis Island--who worked and fought to get their kids out of the Brooklyn tenements by sending them to college. But college is more expensive now, and harder to get into, and when the financial opportunities for illegal immigrants are so restricted, how do they better their lives and their children's lives?
This made me, as we say in the theory-and-criticism biz, check my privilege. All this personal finance stuff, my ability to improve my situation, is contingent upon opportunities I've had (and have) and opportunities my parents have had, and opportunities my parents' parents have had, and so on. Now we as a country refuse to extend that opportunity to new Americans. Give me your tired, your poor, your huddled masses yearning to breathe free doesn't seem to apply anymore.
What do we do about this? I don't at all mean that it's ever easy for immigrant families, that success ever comes for them without years and years of hard work, but my father's parents were never hobbled by their status as immigrants in the way my tutee's parents are. My father's father was free to open a business, to hire employees and travel internationally as it grew, to save his money as he saw fit. He didn't have to live "off the grid." He didn't have to fear deportation. He could teach his children to work hard with confidence that their country would reward them for it. My tutee's parents can't do any of that.
It's just discouraging, you know? I believe so fervently, so passionately, in the old patriotic notion of America as Land of Opportunity, and now that notion is so dented and battered and tarnished.
It's pretty extraordinary, the extent to which money and personal finance participate in the broader picture. All this from a board game.
Wednesday, April 25, 2007
How I Got a $10 Starbucks Card for Free
I'm a member of MyPoints.com, which is one of those online shopping rewards sites. As far as those sites go, it doesn't hold a candle to Fatwallet (of which I'm not actually a member), but here's what it does do: it lets you sign up to earn points by reading what's basically spam. They send me two or three emails a day. I click a link and earn 5 points per email. And then, several months but basically zero effort later, I cash in my points for free Starbucks. I could have gotten something more useful, but I figure hey, as long as it's free, get the luxury.
If you're interested, I'll send you a referral (which earns us both points), but one caveat: don't do this if you're susceptible to ads. I don't even load the images on my webmail, and I close the windows before the linked pages fully load, so I've never bought something I wouldn't have otherwise bought (in fact, the only thing I've ever bought through MyPoints is a dress from Nordstrom's site). Nevertheless, they're sending you ads, and if that'll throw a monkey wrench in your routine, skip it.
Dave Ramsey, How (And Why) Do I Love Thee?
I love Dave Ramsey. I do. I love him.
This might sound strange, given that Dave Ramsey is pretty much my antithesis: a good ol' boy from Tennessee who assumes that everyone in the whole entire world is straight and Christian (occasionally he mentions Jews, but mostly only to affirm that Jews, like Christians, believe in tithing). He inveighs against the evils of pot-smoking (you'll never be a success if you smoke pot, even moderately) and cohabitation. Occasionally he mentions that New York City is "a very different culture" and not somewhere he'd care to live. He calls the IRS "the KGB" and complains regularly about the "unfair tax burden" shouldered by the rich, which is oh, so perilously close to the "goddamn socialist Congress and its liberal wealth redistribution!" thing.
So why do I love him so much?
Basically, because he gives incredibly accessible advice that prioritizes people over money. One of his regular answers is "You don't have a money problem, you have a [marriage/career/personal] problem," which typifies his belief that most serious financial problems are manifestations of nonfinancial problems (or, as he says, "debt it just a symptom"). He takes a holistic approach to debt reduction, focusing on behavioral change rather than on math tricks. People argue against his Debt Snowball technique of paying your debts in order of balance, smallest to largest, because it loses a little money in interest rates, but Dave argues that no debt reduction technique saves you money if you don't do it and that his plan is designed to provide periodic positive reinforcement. At the end of each show, he reminds his listeners that "the only way to true financial peace is to walk daily with the Prince of Peace, Christ Jesus." If you substitute, say, "live a good life" for the religious bit, you lose the wordplay but gain an aphorism with which I'm totally, completely, 100% on board.
He also focuses on the bigger picture: the ultimate goal of his financial program is "changing your family tree." While many people who affect a similar down-home common-sense demeanor argue against financial help for children over 18 and even against paying for your children's education, Dave prioritizes saving for college and advocates "being a blessing" to family members (those who are managing money well, at least) with the knowledge that providing your children with college educations free of debt puts them in a position to provide more abundantly for themselves and their own children. That, and his stated opinion that payday lenders "oppress the poor" hint, at least in my head, at an ideology that recognizes the socioeconomic role of debt and consumerism and that embraces opportunity as well as the oft-abused doctrine of personal responsibility.
I also find him charming, just as a human. I like that he doesn't talk down to anyone. I like that he's blunt but compassionate, that he manages to bond with people over having done dumb things without making anybody feel that doing dumb things makes them dumb people. I like his instinctive ability to find the real issue. I think he's totally brilliant at transfering people's focus, making achieving financial success a goal in and of itself, an exciting thing worth focusing on, something for which one sacrifices gladly.
Ultimately, I think he just does good things: I think he empowers people to live fulfilling lives and improve their children's prospects. I think he encourages people to consider their values and focus on the important things without using "there are more important things than money" as a way to undermine themselves. Even though we're really different, Dave Ramsey and I, what I really agree with is his perspective on money.
Tuesday, April 24, 2007
Savings Projections
By my calculations, I should have 3 months' worth of expenses (which I estimate at $1500/month) in my ING Freedom Fund by the end of this calendar year.
The current balance is $1,300.
I also have a CD at Bank of America, which will be rolled into the Freedom Fund when it matures at the end of August. By then, it will be worth about $1,030. (Running total: $2,330)
I have two "extra paycheck" months still to come. Each will allow me to save $300 above what I usually do, for a total of $600. (Running total: $2,930)
I have 18 paychecks left this year. If I save $50 from each of them in the Freedom Fund, that adds $900. (Running total: $3,830)
Hopefully, my beloved and generous aunt continues the tradition of $500 gifts to her nieces and nephew at Christmas. (Running total: $4,330)
I can definitely find $170 over the course of the year above and beyond my normal savings. I'm pretty sure I can't come up with $670, so if my aunt's gift changes this year, I may fall just short of the mark, but I should be able to make it to $4,000.
That's pretty serious savings, actually. $3,000 (the amount I'd be saving out of this year's earned income) is about 9.7% of my projected pre-tax W-2 income for this year. Disregarding my Roth (which, in this scenario we should, since it's mostly money I didn't earn and it's all money I didn't earn this year), consider that I also save 8% of my (pre-tax) salary in my 401(k). A 17.7% savings rate? I'm no slouch.
My newfound enthusiasm for the Freedom Fund leaves me neglecting my travel fund, though. Its current allotment of $25 per pay period will bring it to $1,500 at the end of the year, substantially short of the $2,000 goal. I'll either have to resign myself to prioritizing the Freedom Fund to the detriment of the travel fund, or find some way to step it up a little.
Monday, April 23, 2007
Gen Y-ers Like Our Brands Simple
This survey by a marketing group found that "Gen Y-ers" (those born after 1978, in this arbitrary definition) prefer brands that are simple and straightforward. And I have to say, the brands on that list with which I'm familiar are my preferred brands. In fact, they list all of the national brands about which I feel actively positive, including the top three: Apple, Trader Joe's, and JetBlue (further down the list are other brands I like, including Ben & Jerry's, Whole Foods, Target, and Converse). The only brand on the list I actively dislike is American Apparel, which I loathe for its skeezy sex ads (and for its skeezy CEO) (not to mention its inability to conceive of women over a size 10). I'm not that familiar with Red Stripe beer, but I admit I do find the "Hooray, beer!" ads charming, and for pretty much the reasons the survey describes: the branding isn't too elaborate or aspirational; it's just beer (hooray, beer!) without any bells and whistles. None of the classic advertising "You'll sleep with this hot babe and earn the respect of your peers if you drink our nasty beer!" gambits.
This is really interesting to me. What is it that attracts me (and my generation) to these companies? For me, there's a certain transparency to all of them--the "qualities" of the brand (i.e. the way the brand characterizes itself) are associated with the qualities (and quality) of its products, and none of them are known for terrible customer service or complicated corporate procedure. Some of them are also explicitly "in touch with the youth"--i.e. Ben & Jerry's new Colbert Report-themed flavor and the weirdo lower-cased ramblings on Vitamin Water bottles--and that counts for something, too. Mostly, though, I really do think all of these companies sell good products, generally maintain higher-than-average levels of corporate responsibility, and don't gussy it up too much.
I wonder if this apparent preference will drive future trends in branding and corporate policy--if it does, I'm cautiously optimistic that the effects will be positive ones.
Wednesday, April 18, 2007
When Target Funds Miss Their Mark
This article from CNN Money, When Target Funds Miss Their Mark, piqued my interest, but really just comes down to two caveats about target funds:
1) Cost ratios can be high, and
2) The structure of the fund can obscure your view of your holdings.
I've yet to see a really substantial argument against target funds (per se, rather than a general "funds with high costs are bad, and some target funds have high costs" kind of argument) for young, single investors. My own slight hesitation about target funds, I think, came from a sense that investing should be complicated, like the stock market won't make me money unless I have to sweat and strain and read Kiplinger's. I'm delighted to be done with that idea, and very pleased with my target funds, both of which have rebounded from the late-February hiccup nicely. My Vanguard fund (their 2050 target) has returned about 4.7% for the year to date.
Tuesday, April 17, 2007
Spending Spurt
I wouldn't call it a "spree," really, but...I'm in the process of spending the money piled up in my vanity-related virtual envelopes. Yesterday, I ordered a denim blazer & a pair of jeans for $80 (each nearly 75% off) and made a hair appointment for a cut and color at the expensive curly hair salon. The shopping won't stop there--I've already got my eye on two more tops and a dress, and I definitely need a big fat belt and a couple of light cardigans. I do have the money--it's just hanging out in my checking account, doing nothing--and I have it for a reason, and the reason is this, right here: to buy stuff with.
Nevertheless, I find it difficult to avoid little twinges of guilt: I could have saved that money. (Maybe after I do this spending, I'll hold off on contributing to these envelopes again for a couple of paychecks and save that money instead.) I don't, however, feel so guilty that I'm not excited about new clothes and a new haircut.
Monday, April 16, 2007
Subletting: Just a Thought
My parents will be away for the entire summer. A friend of mine is housesitting for them, and plans to sublet her room (okay, "space," since she doesn't really have walls yet) while she stays in my parents' apartment. I wonder just a teeny, tiny bit if K and I couldn't do similarly: pack up a bit, stay in my parents' apartment with the friend for a month (or two), and pocket the sublet money.
It seems a) troublesome, b) risky, in the stranger-in-my-house way, and c) like a boundary issue I may not want to deal with, but...on the other hand...a month or two of rent reimbursed. It's kind of tempting.
Frugal Challenge: $5/day
So, I sent an extra $50 to my Freedom Fund the other day, leaving me about $15 to live on until Thursday, when I get paid. I've actually got more than $1,000 in my checking account, so the stakes are low if I need to go over that a little, but I've only got (about) $15 budgeted to live on until Thursday. I don't anticipate that being too hard--I'll have to buy lunch today, since I spent last night at my parents' (it was pouring) and didn't get to pack anything, but other than drinks to go with packed lunches tomorrow and Wednesday, I don't anticipate any further expenses. I have food in the house (two mangoes, a couple of bananas, peanut butter, some canned soup, some pasta and turkey meatballs...that should do it), a Metrocard in my wallet, and no expensive outings planned.
I'm glad to be getting a move on towards my savings goals--I've put $150 above and beyond my automated transactions into this account over the past month--but it does always feel a little pinched when I do it like this. Luckily, my deadline's not far away.
Friday, April 13, 2007
Meme: Five Obsessions
Madame X tagged me to list five obsessions. I'll roll with that, and tag five more people when I'm done. Are you tagged? Read on! Do you not care? Read no further!
1. Semiotics
Or, what anthropologist Clifford Geertz calls "deep play." I believe that everything has a meaning--or, more specifically, meanings, layers and nuances and vagaries of meaning, and I can't stop trying to figure out the meanings of things: ads, institutional bylaws, slang, movies, Louis Vuitton knockoffs, Facebook.com, logos, social interactions, and perhaps most especially, aesthetics. I am compulsively analytical, a cultural critic by training and inclination. I should note, here, my one semiotic blind spot: it is cars. I don't know what they mean, what a Volvo means versus a Lexus, a station wagon versus an SUV. I am always confusing the brands. It makes me crazy. Luckily, I have a good friend who is like a car-semiotics savant, so I call her when I'm frustrated.
2. The Future
You might think the fact that I have no idea what I want to do with my life would stop me from envisioning future-life scenarios: me in a cozy cottage with a cat, drafting an article for peer review; me as an expat in Berlin; me riding trains in Thailand; me as the millenial Susan Sontag, presiding over a dinner party full of witty people and beautiful food. You would be wrong.
3. Progress and Planning
We tell ourselves stories in order to live, and my stories are mostly about trajectories. I want always to be moving forward, improving in some way. I want to have improved. I want to make lists and timelines. I want to know when things will happen. Here is the downside: sometimes I begin wanting time to pass so that I can see my plans come to fruition. I just want the next two weeks to disappear so that I can meet that savings goal, or whatever. It's not a good thing, really. Sometimes my planning is helpful, and sometimes it's just obsessive.
4. Getting the Music Just Right
I have a tendency to play single albums, or even single songs, on repeat for days on end. Frequent offenders: The Notwist's Neon Golden, Belle and Sebastian's The Life Pursuit, Gillian Welch's "I Dreamed a Highway" and "Revelator," (or that whole album, which is Time (The Revelator)) Yo La Tengo's "You Can Have it All," Terry Allen's Juarez. I am, however, often equally obsessive about matching songs perfectly to moods, or weather, or events--there are certain times in my life that cry out for certain music. If I am in my parents' kitchen making a big holiday meal with flour all over my shirt and not listening to one of like four specific albums, something is missing.
5. Other People
I am pathologically nosy. It's why I love the internet. I want to know all about other people, their nooks and crannies and secrets, what music they love and why, who their first kisses were with and how they felt, what they do all day. Do not leave me alone with your diary. I will read it. I have no shame.
Bonus!
6. Words
I get lines of poems in my head the way other people get snatches of songs. Then I walk around reciting them over and over. For two days, I have been saying in my head, you must change your life, which is the last line of a Rilke poem titled, approximately, "On an Archaic Torso of Apollo" (or something like that). Alternately, when people are being melodramatic, my head starts quoting Roethke: The day's on fire! I know the purity of pure despair! (there's a linebreak somewhere in there, but it doesn't matter in my head so much). When I am happy, or feeling fierce about the world, the last words of Ulysses sometimes pop up: and yes i said yes i will Yes.
You're tagged:
S/100/30
Him and/or Her of Make Love Not Debt
Gradgal at Getting Out Grad
SF Money Musings
Wanda of Well-Heeled
Salary Expectations: Academia
Today I stumbled on some data about salary scales in academia. The average salary for full professors in general English lit fields clocks in at $73,673. For associate professors, that figure drops to $56,868, and for assistant professors, $47,405. We won't even talk about adjunct jobs, i.e., the job you do not want but might take anyway.
This money is enough money, in an objective sense. It is a lot of money. It is more money than most people make, and it can be augmented by lots of things. A professor at my undergrad institution is an ancillary author for one of my current company's textbooks; another is a food critic for the local alternative weekly (his reviews were pretty much like his teaching, which is to say, insufferable).
If I teach at a top-tier school, I might make six figures, but only after several lean years as a grad student and more not-quite-so-lean-but-don't-go-planning-any-grand-trips years moving up through the professorial ranks. It's hard to say how long that would take: tenure-track jobs are hard to come by.
One of the reasons salaries aren't higher in academia is that there isn't really competition--you get your PhD in English literature, you're pretty much stuck with academia as a field, you know? Tenure-track jobs get fewer and farther between, and I have to say, the prospect of hawking my intellectual wares at MLA conferences is an off-putting one. Nevertheless, the prospect of being a professor is a lovely one--I think often that how you feel about what you do is determined not by its mission statement, but by what you do all day, and what you do all day as a professor is read and think and talk to people. I'm good at those things, and I love them.
Suffice to say, I have made no firm decision about my future. Some days I want to go get an MBA and make a million dollars a year.
Thursday, April 12, 2007
Famous Last Words?
So...I've done one of those things you're not supposed to do.
I've added K as an authorized user on one of my credit cards--the Chase Freedom Visa, with a $1,000 limit--prompted by the fact that he applied for a credit card last night and was turned down for lack of sufficient credit history. "Lack of sufficient credit history," in his case, means "no credit history." Which is great, in that he's reached the ripe old age of 29 without ever having credit card debt, and also slightly problematic, in that at some point he might be interested in buying a house or something.
So I've added him as an authorized user. We've agreed that when Chase sends the card, we'll just cut it up, so he won't actually be charging anything on my account--I'll just be donating my credit history on this account, basically. Hopefully, he should be able to qualify for a card of his own within a few months, and then I can remove him as an authorized user without too many adverse consequences.
I know these are famous last words, but it does, actually, seem pretty foolproof.
Wednesday, April 11, 2007
The Complexities of Anti-Consumerism
I picked up some groceries at (New York's only) Trader Joe's last night and took them home on the subway. I was sitting next to a pretty young woman, probably no older than I am, with a beautiful little daughter who was probably three or so. You know how you can tell that some kids are going to grow up to be stunning? You could tell with this girl.
The mother was well-dressed, in boots, a nice pair of jeans, and a blazer. Her bag was a so-so Vuitton knockoff--the material was shiny in that Canal-Street kind of way. Her hair was chemically processed--it looked to me like Japanese straightening, not corner-beauty-shop lye straightening. Her little girl was dressed well, too, and tastefully--not in that miniature-adult way that children, especially girls, sometimes are--in pink sneakers, jeans, and a quilted coat. The daughter was clearly very bright: she was engaged and articulate throughout the subway ride in a way that made me associate her with the kids who win the leadership scholarships from the foundation at which I tutor.
The mother was holding a little pink bag on her lap. The plastic that had held the tag was still attached to the zipper. She asked her daughter, "Do you like the new bookbag I got you?" The girl was looking at something and didn't respond. The mother asked again, nudging her, and the girl looked up, flashed a huge smile, and kissed her mother on the cheek. "Yes, Mommy!"
Consumerism issues, an observer might say. The mother is clearly trying to maintain an image of having more money than she does (i.e. the knockoff bag) and trying to win her daughter's affection with material objects.
But.
Consider that this is a young black single mother (she was telling her daughter, quietly, that they were going "to Daddy's house," and when she counted the stops for her daughter, it was clear that the destination was pretty deep in the Bronx). Consider the stereotypes with which she has to contend. Consider what she feels when people look at her and her beautiful, precocious child and glaze over in that "God, not another young black single mother" way that she has learned to recognize. It differentiates her, this image that costs money to project. The money that she spends on clothing and on her daughter's sneakers, on aspirational handbags, buys her some peace on the subway, buys her, maybe, freedom from the weight of each judgment levied by the glances of strangers, conscious or otherwise.
It seemed clear to me, sitting next to her, that this woman understood in an instinctive way the class-coding of consumer goods, that by sheer force of will and strategic spending she planned to change her social identity and her daughter's, that she was determined that no one would ever look at her or at her daughter and sneer. Her meticulousness in other ways--the carefully-packed snacks, the stop-counting--seemed to bear this out.
People do sneer. People really do look at other people and think, "Oh no, not another one," and imagine squalid apartments and corner drug deals and absent fathers. We all do it. I am doing it here, in some way. I'm not sure it matters whether the tone of our imaginings is compassionate or revolted. It is terrifying to know that other people can claim your life in this way, that they feel entitled to have opinions about you. The weight of these collective imaginings really does affect the people on whose shoulders it presses down. There are consequences, real ones.
I can imagine this woman's efforts paying off. I can imagine her spending everything she has to keep her daughter in nice clothes and green vegetables. I can imagine her daughter getting a scholarship to a good college, getting a lucrative job, paying for her mother's retirement. There is some way in which we fulfill the prophecies of our sneakers and mittens and freezers. Is it a coincidence that this determined, meticulous, anxious woman has a smart, beautiful daughter whose shining future visibly unfurls before her?
I don't think it can be. I think the bill of goods this woman has purchased includes not only the pink sneakers and bookbag but a set of behaviors that is rewarded. This is how class functions. You can give a child a different class identity than yours--I've seen it done, for many of the first-generation American kids with whom I went to high school. They went off to Yale and Amherst and Dartmouth and then into the Peace Corps and finance firms and law school, and they do take for granted what they've been given, in the way that we all do, the way in which it's what they've always known and had, and it is hard to understand on a visceral level what giving it meant to their parents. It is hard for me to understand what giving me Keds and riding lessons and an American Girl doll and dance classes and a private education and trips to Europe means to my father. There is a gulf there, much as, perhaps, there will be between the mother and daughter on the train when the daughter grows up and does not understand, really, what it is to be afraid of the way people look at her.
So I don't think we can really tell this woman, with authority, that she shouldn't be spending so much money on clothes, or toys, or her hair. I think we have to remember that things have meaning--real meaning, a meaning that changes people and lives and, ultimately, the world. At the very least, I think we need to recognize on a visceral level that it takes a strength of character that I cannot even comprehend to stare back at the staring strangers and know that you are still a person, your own, unclaimable, regardless of what they have thought about your hair and your clothes and your parenting--about you--that it is not weakness to want them to stop so much as it is unfathomable strength to bear everything they unknowingly communicate.
I think this deserves more consideration than the phrase "keeping up with the Joneses" can provide, much as the woman on the train deserves more consideration than the dismissiveness of a statistical, appraising glance.
Tuesday, April 10, 2007
Frugal Weddings
I mentioned yesterday that K's sister's wedding was really lovely. It was. It was also a really good demonstration of the ways in which some selective frugality can make a wedding more a wonderful, albeit expensive, party than utter financial armageddon.
Some of the ways K's sister saved money:
-She bought her dress and shoes off the rack, for a total of less than $200 (she also looked totally adorable).
-She bought a white cardigan (off the rack) and used an embroidery kit her then-fiance had given her to embroider wedding-themed tattoo imagery on it. So cute! She wore it when she got cold (which was often. It was chilly).
-She made her own veil, a little beaded '30s-style number--out of, she confided, a tacky novelty wedding thong! She transported it in a hatbox that she decoupaged herself.
-She had a friend do her makeup, and another friend, a stylist, do her hair. (Again, both were really well done, and naturally, these contributions were the friends' gifts.)
-The same friend that did her makeup sang during the processional at the chapel.
-She did all of the flower arrangements herself, including her own bouquet.
-The bridesmaids weren't asked to buy new dresses, just to show up in the same color (black).
-She and her fiance negotiated a special package price with the (professional) photographer she hired based on minimizing the amount of photo editing the photographer would do and maximizing the amount that she and her now-husband (who does web design) would do themselves.
-The couple made the favors--framed family photos from both families, including pictures from both sets of parents' weddings--themselves.
In addition to these frugalities, the newlyweds are using gifts of money for two smart purposes: 1) to pay for the honeymoon, and 2) to contribute to their savings for a down payment on a condo.
What I think is really amazing here is not just that the couple (especially the bride) strategically tapped their own (substantial) creative resources and those of their friends, but also that they did it in a way that really made the wedding beautiful and intimate and memorable. Instead of considering these DIY elements sacrifices, they considered them a way to make their wedding both more personal and more communal--not to mention more playful. I think that's totally the right way to do DIY with something like this: do yourself what you can do well, recruit qualified help, pay for the rest.
P.S. For whoever found me by searching "curly haircut recommendations Portland," the salon you want is Dirty Little Secret, on NE MLK. Ask for Chai or Aimee. A cut is $40 plus tip, which to this New Yorker seems like a totally brilliant bargain.
Monday, April 09, 2007
Wedding Weekend Spending
I had a lovely trip. K's sister was very happy and very beautiful and very friendly and got (very) married. It was a lovely ceremony, a great party, and a fun chance to meet K's extended family.
I spent $100, mostly on transportation and food. Some of this spending was unnecessary, because K's parents, in addition to their various benevolences, also handed K and his brother each a wad of cash, so we did all of our beautifying (I had an amazing, amazing pedicure, with sugar scrub and paraffin and a nice lady making jokes, and of the $65 plus tip it cost, I did not pay a dime) and most of our cab-taking and food-eating at no cost to ourselves. Nevertheless, one doesn't want to be a freeloader, and it seemed only fair that after K's parents' cash covered my pedicure, I should cover some of our shared expenses. So my spending went something like this:
$20 for airport transportation and snacks on Thursday
$20 for a cab to the salon on Friday
$20 for dinner on Friday
$20 for miscellany: toothbrushes (we both forgot them--oops), hairbands, Starbucks
$20 for dinner (yes, the hated airport food purchase)
We could have spent less (that is, we could have done without cash from K's parents) had we given up a few things (beauty treatments--I got the wonderful pedicure; K got a manicure! And a much-needed haircut!--and Starbucks) or inconvenienced ourselves a bit by coordinating our transportation better and being willing to spend the time looking for parking in parking-poor areas (and by getting food before we got to O'Hare). I think K's parents knew that, but wanted us to have as nice a weekend as possible. I really appreciate that, and we really did have a wonderful time, so hopefully they got their money's worth. (And, of course, I'll be sending a thank-you note and a little gift.)
Anyway, I'm dispensing with the allocated-but-unspent $40 thus:
I'm sending $20 over to ING savings, to even up my numbers (my love of round numbers is a real savings motivator).
I'm hanging on to $20 for unexpected expenses for this week.
Friday, April 06, 2007
Hello From Chicago
Where I mostly, really, am not thinking at all about money, except to wonder if the friends-and-family discount at K's sister-in-law-to-be's sister's salon would enable me to get my nails and eyebrows done after all. K's parents have kindly put us up in a hotel room, lent us a car, and picked us up at the airport bearing sandwiches and water.
I'll probably decline to spring for too much beautification (maybe a pedicure—my shoes are open-toe), but it's all a nice reminder that the point of money is a means to an end rather than an end in and of itself.
Thursday, April 05, 2007
Absorbing Costs & Playing Musical Accounts
Immediately upon returning home last night, I entered the paycheck for today into Budget and began rejiggering my virtual envelopes to cover the Metrocard expense, figuring it was better to account for it in some way than to wait for my FSA reimbursement check in a state of confusion. I covered the expense pretty easily--a leftover $20 from the previous pay period, this paycheck's $40 "unexpected expenses" allocation, $16 worth of skimming, done.
Then I set out to find some money for the trip this weekend, my eBay plan having been an abysmal failure. I figure I need money for getting to the airport today (bus), getting home on Sunday (cab, probably), for covering the (relatively few) meals that won't be related to wedding festivities, and...for anything else that might come up. After assembling that sum (mostly, I co-opted this week's contributions to the clothing and haircut envelopes), I packed, put some airport snacks together (the hell I'm paying $12 for a disgusting sandwich), and spent some time catching up with my Internetting.
Then K came home. He'd thought to stop and get the mail, and there--lo and behold--was my FSA reimbursement check.
Hmm.
What I decided to do is this: I'll deposit the check into my Bank of America savings account, the one that holds my Keep the Change transfers and that will now hold the $100 float fund. I'll transfer the balance over $100 to my savings account over at ING.
I'll withdraw $120 of the $140 I put together for the trip from my checking account today. Hopefully, I'll come in under--but if I do, I'll need to figure out whether to "reimburse" my spending envelopes or to use it as an opportunity to save.
I'll update on this when I return--probably not before, though we can certainly hope that the hotel room K's parents have kindly gotten for us comes fully equipped with internet access.
Wednesday, April 04, 2007
FSA Follies
Oh, man, I did like eight things wrong when buying my new monthly MetroCard this morning. (Okay, three.)
First, I swiped my debit card before actually entering what I wanted to buy. No harm no foul, but still, wrong!
Then, after selecting a monthly unlimited card, I swiped my debit card again. My debit card. The whole point of having a credit card is so that I can float transactions like this, things that I don't have the actual cash for since they're FSA expenses. So: wrong!
Then, after paying with my debit card, the machine asks me if I want a receipt. I tell it no, because it's not like I need to submit a receipt for reimbursement or anything. Wrong!
I think I can get reimbursement with a transaction report from my checking account--it's clearly labeled MTA, and there's really only one kind of thing you can buy from the MTA, and that one thing is reimbursable--but nevertheless, watch and learn: a full night of sleep really does work wonders.
Tuesday, April 03, 2007
March Net Worth
I've updated my net worth chart at NetWorthIQ: it shows my net worth having increased by $426, or 3.7%. Most of that is attributable to my 401(k) contribution, which is about $330 for the month, including employer match.
This time I counted an outstanding check as a miscellaneous debt, which I think I didn't do last time. I'm also beign inconsistent because I'm not counting my (outstanding) rent check as a debt, but...I'm pretty much just following my own eccentric-but-functional accounting system, so, I don't really know.
Frankly, I'm still trying to figure out if this is a useful way to think about my financial life. I still haven't come to a conclusion.
Is there a reason you do or don't calculate your net worth?
Money in Context: Notes from a Dinner Party
1. There are three people under 30 and four people over 50 sitting around my parents' dinner table; it is Passover; we are a motley mix of Jews, half-Jews, half-Jews-half-Catholics, lapsed Catholics, practicing Catholics, and one lone nondenominational Protestant turned self-identified heretic, who has made the brisket and kugel and laid the seder table (my mother). We are talking about the pretty brownstones in Harlem. K mentions that if it were enough, he'd cash out his Roth for a down payment. M, a guest of the over-50 persuasion, says, "That's what I have, a Roth." M looks over at K and says, "You know, I don't mean to be condescending, but if you've got a Roth at your age, you're doing great."
K says, "I'm older than I look."
After guessing K's age correctly, M proceeds to explain that he never thought seriously about retirement until he was nearly forty.
C pipes up, "Well, we can't exactly count on Social Security, you know?"
This fact is universally acknowledged by all.
2. P and M had been together since I was a kid. P worked with my dad, and they were close. I've socialized, traveled, and in various other ways grown up with P and M--they've been a kind and loving presence in my life for nearly 15 years. In September, P, who was only 56, died suddenly of a heart attack. This loss hit a lot of people very hard--P had more friends than almost anyone I've ever met--but of course, it has been devastating to M, who held him as he died on the couch of their country home, waiting for the ambulance.
Here's where the money comes in: P and M are both men, which means that M has just been hit with an enormous tax bill upon inheriting, among other things, P's half of their beloved country home in Pennsylvania in which together they hosted parties, fixed up couples, offered acting coaching to their friends' children, and worked tirelessly on a particularly beautiful garden.
It's unconscionable, that right after this sudden and tragic loss, M has to contend with these exorbitant tax consequences in order to keep a home in which he's spent happy time with his partner for years. It makes me furious, and sad, and it underlines the need for recognition of gay partnerships.
Monday, April 02, 2007
Things I Currently Want but Have No Concrete Plans to Buy
-A cold brewing system for making summer iced coffees.
-A set of pitchers (for coffee concentrate & sugar water, for making summer iced coffees).
-A fancy pipe (for smoking tobacco products only). I saw this really beautiful one with a long, thin, curved stem...cobalt blue glass...pretty!
-A million sundresses.
-Two pairs of boots, one each in black and brown.
-Tons and tons of sandals.
-This one really pretty bolero cardigan.
-A manicure, a pedicure, an eyebrow wax, and a lower-leg wax (I will, reluctantly, do it my own self--I actually do a good job of doing my own eyebrows and nails, but I hate putting in the time).
-A plane ticket to [the small city in which I went to college].
-A windowbox herb garden.
-A cigarette case.
-Sushi and sorbet every day from now until October.
-An ice cream machine for making my own sorbet.
-The Lives of Others on DVD.
I will be buying some clothing for the spring, soon, and I'm looking into getting the cold-brewing system cheap on eBay, but most of these are things I just won't buy, because I can't afford 'em and can live without 'em. That's the ultimate bottom line of any budget: can't afford it? Then don't buy it. I think we do sometimes gloss over that part of financial responsibility: it's not all bargain-hunting and resourcefulness--there are things you just have to give up, sometimes.
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
Pre-Approved
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.
Yay!
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 investing...et 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.
