Here's a question that's been much on my mind lately: should I ask my parents to write me a check so I can max out my Roth IRA?
Before you start in about my sense of entitlement, consider two things:
1) They did so last year, and expressed their wish to do so again this year.
2) I live well within my own means--I do not need this money, but wouldn't be able to save this much on my own.
As commenters have mentioned, this is really more a "wealth transfer" scenario (i.e. by funneling money into my Roth in small increments, my parents are giving me money that will turn into lots of money without anyone having to pay taxes on it) than a "financial support" scenario. Nevertheless, my parents are making a lot of important financial decisions now, in the wake of my dad's retirement, and I don't want to ask them for something they're unable to give. Then again, if they'd said they wanted to do this, is it really unreasonable to say, "Hey, guys, did you still want to do this?" Or do I take their silence as their answer?
(I really don't like asking my parents for money, in case you haven't noticed.)
Tuesday, March 04, 2008
Should I Ask?
Friday, February 22, 2008
Birthday Spend-o-Rama!
So, we're in the thick of the K's Thirtieth Birthday Extravaganza over here, and so far, it's going really well--we did the just-us incredibly-expensive-and-delicious-dinner-and-really-good-play part of the plan last night, and are heading into the weekend group-celebrating-with-lots-of-people-and-really-big-cake part.
All I can say is, really, that I don't regret spending the money. Not just because of the extraordinary sushi and the weirdly miraculous green tea--it smelled more than tasted like green tea--it tasted like, I don't know, ancient water from underground springs or something--but mostly because sometimes you just have to spoil other people. And a thirtieth birthday is one of those times, I think. One of the things that the spending of money does well, in and of itself, is announce the momentousness of something. And a thirtieth birthday is momentous, and K likes momentousness, and so the money is well spent.
Thursday, February 21, 2008
"I Can't; I Can't Afford It"
So, just last night, I was having some post-work coffee-and-bitching with a dear friend (and colleague! how lucky am I?), when K called to ask if I wanted to go to this event we'd discussed the night before. He'd been invited via Facebook by a friend. Organ music and silent films (concurrently) at St. Bart's. I like organ music and silent films okay, but I like churches a lot, and just the night before that, we'd been talking about how I'd like to relinquish some of my social-planning responsibilities (and he said something along the lines of "Well, sometimes I want to invite you to do something but I know you won't want to spend the money," which, eek!) so the whole thing seemed ideal.
We walked over there, and found ourselves facing a friendly woman who told us, "It's $10 a ticket." Whoa. Not in the plan. I figured Facebook+no mention of cost=free. I figured wrong! And I'd brought along my friend based on the figuring, too. K saw my face drop, and offered to treat me, which I accepted. I offered to split the cost of my friend's ticket with her, but she turned me down--I felt guilty (though granted, I had just bought her tea).
Now, Krystal was mulling over just these kinds of situations the other day. I agree that sometimes I feel like I'm hinting, "Pay for me, pay for me," which really, I'm not. If I'm not prepared to pay for something, I'm prepared to give up doing it--though obviously, as in this case, I'm willing to accept a gift if it's offered. And the fact that K views my budgetary tightness as a damper on our shared social life is disturbing to me, too--although in this particular case, it wasn't a question of having the money but wanting to go out on Saturday, but was a question of seriously, every penny I have is earmarked for his birthday this weekend.
I'm young and living in New York, and I want to enjoy that. But I also want to be able to have a savings that can be a real cushion for me, something that ultimately makes my life easier. I'm looking forward to loosening up a bit at the end of this year, when presumably I'll have my $10,000 Freedom Fund all saved up, but perhaps I should make some compromises before then, too. Or perhaps I just need to involve K more in my planning, so that I can take into consideration the stuff he'd like us to do. The problem there is that while I like to know what's going on two days in advance or more, he likes to fly by the seat of his pants. Maybe we can make some compromises.
In general, I don't feel like my finances put a big damper on my social life, mostly because most of my friends are in similar financial positions to mine. I didn't feel bad this weekend saying, "I can't; I can't afford it" when some friends (one visiting from out of town) said they were planning on going to a play that night. We'd been hanging out all day, and you don't talk during a play, anyway, so I didn't have a problem bowing out--and actually, they ended up not going, and not because of me, so we got to keep on hanging out. And these past couple of weeks are sort of a special case, because I've been so tight so as to be able to blow a big amount of money for the next few days: fancy dinners, theater tickets, birthday cakes from beloved local bakeries, etc.
Nevertheless, I think this issue needs a bit more thought and attention. I'm going to have my eye on this.
Tuesday, February 12, 2008
Family Money
Madame X's post about her family and social circle's levels of wealth made me want to elaborate on my earlier post about my aunt.
Let me start by saying that I do not understand how money works in my extended family. Each little family pocket seems to differ from all the others except for the fact that they share a general sense of confusion, of not really knowing what the deal is with their money, how it shapes their lives and their interactions with each other. Some of this stems from the difference between financial status and class. Some of it stems from family dynamics. I'm not sure where the rest of it comes from.
It's such a weird, knotty little problem. I was chatting with my mother recently, and she was mentioning how strange money is for her and her siblings--how differently they've ended up feeling about the money they have or don't have. Because of when they were born, who they married, what careers they pursued, they've ended up in very different socioeconomic places. Similarly, my dad's life is really different than his brothers' lives were, partially because he was born much later, by which time his family had a little more financial comfort.
It's been passed down to subsequent generations. My sister, my (mother's-side) cousins and I all started out at the same private school, but we've ended up in very different places, too--my sister and I know that our nuclear family "has more money" than our cousins', but they always seem to have more money to spend than we do, on cigarettes and drinks and taxis and spring break trips. (But we went to private colleges; they went to state schools.) My (father's-side) cousins, too, have diverged, from our family and from each other, and sometimes, like at my cousin's son's bar mitzvah, that divergence is starkly foregrounded. My mother says one cousin resents that her sister bought her a house. My mother says her brother's children feel that they were brought up with a false sense of how much money their family had, and it was a shock to find out it was less than they thought. My father says that since he's retired, the big shots from his old industry don't return his calls anymore. My father says his brother's children stopped talking to his other brother's children because of a sweatsuit and a will.
A couple of weeks ago, I was served legal papers pertaining to a lawsuit over the assets of my grandfather's estate. I have read them and failed to understand them in a really profound way, but I know that ultimately they signify that my mother and her brother and her sister feel that they have been cheated by the people whose job it was to look out for their interest in their father's artistic reputation. Perhaps because much of my family is involved in the arts, there is more aesthetics in our wrangling than there is in other families'; perhaps not.
I think sometimes that the reason we pretend that money is no issue in the face of family is because if we start thinking about how big an issue money is, it clouds everything over and makes us feel very much alone.
It works similarly with friends: most of my friends are in relatively similar situations to mine at present. We're mostly scrabbling for cheap apartments, for health insurance, for the money we need to start our adult lives. A few live substantially above that level: I ran into a friend on the subway recently--I had Trader Joe's bags and my hair in a sloppy ponytail; he was wearing a Paul Smith suit. And of course, some people's limited means are mitigated by their family's assistance (as mine are, to some extent). But aside from the few bankers and the many grad students of my acquaintance, my friends and I are living at about the same level--we haven't begun to differentiate ourselves yet, really. Yet. Yet.
My field of academic interest is reasonably closely related to this--I'm interested in canon formation, in aesthetic taste, in reading practices--in how class and money and economic history have shaped the more ethereal realms of our lives. Including how we relate to our families; including who our friends are. I may very well be thinking about these problems for the rest of my life, and I still don't know if I'll ever be satisfied with my conclusions.
Sunday, February 10, 2008
Discretionary Spending Budget for This Week: $0
I went to see Sweeney Todd tonight with K and a friend. Afterwards, we strolled over to Veniero's for coffee and desserts. It was a nice night, and cost me $24. I don't have any more discretionary money to spend until next Saturday, when I will spend $20 or less on brunch with a friend who's coming on an impromptu visit from the West Coast. I have plenty of money for food, and money for my laundry, and money for my Netflix autodraft, but no money at all for anything else. I mean, I have money—it's not like my checking account balance is $48 or anything—but I don't have money to spend.
This is essentially fine. I have enough for the necessities, and I can certainly socialize—just, at home. I have a bottle of wine and lots of tea and some beer and some frozen gingersnap dough in my house; I could easily have a friend over for a nice afternoon of chatting and Scrabble. I should actually make a couple of dates to do just that over the next couple of weeks, so that I don't feel like my inability to spend money is isolating me. That's a very good plan, actually, and I can think of several people I don't see enough whom I could invite over for such an afternoon. Ah, planning, light of my life, fire of my loins, etc., etc. It may not quite trip off the tongue, but it does wonders for the sanity. And the budget.
Friday, February 08, 2008
Breathe, EM, Breathe
I'm in a state of high financial anxiety right now. There are a lot of expenses piling up, and a lot of balls in the air, and I feel like I'm about to let them all come crashing down in a heap. Here's the breakdown:
1) My taxes
Problem: I owe money, somewhere in the neighborhood of $175-$200
Solution: Don't file right now. This will give me some time to save up the money. I'll file in March or April.
2) My medical visits
Problem: I'll owe $300 at the end of the month for two medical visits my insurance may or may not cover. I was hoping that the check from a previous insurance claim would cover this, but when I called the insurance company today to check on its status, I got the old "We have no record of receiving that claim, Ma'am" business.
Solution: Unclear. I have two options: 1) dip into savings, or 2) ask my mom to cover the bill. She would, but I'm not sure I want to ask. Alternately, 3) I can work up a ton of hours on my office freelance project before I hand it over to someone else and hope that I can come out of that with $300. Then if the claim money comes in, I can use it to cover the tax bill. This is the best option, I think, especially since things are a little light at work this week, and I have some extra time.
3) My MetroCard reimbursements
Problem: I filed a claim for reimbursement a little late, and wasn't sure if it would get through in time. It didn't. At the end of this month, the grace period will start on those charges, and if they're not paid by the end of it, I'll pay finance charges. I've never paid finance charges. I don't want to start now.
Solution: Actually, I should be able to wait on this one. Because Chase applies payments to old charges first (even if in my head I'm paying for something specific), as long as I get the reimbursement check at the beginning of next month as I should, I'll just pay the two MetroCards off with that. I put in a call to the company about the claim status--just to make sure they received that claim--and was assured that it will be processed at the end of this month. They're a very reliable company, so, not too many worries there.
4) K's birthday
Problem: It's expensive to treat someone as well as I want to treat K for his 30th birthday. I'm not going into specifics, because baby, I know you read this.
Solution: Live very frugally for the next two or three weeks and splurge on the birthday weekend. Problematically, though, I have a dear friend flying into New York for an impromptu visit next weekend. I promised her brunch, but I think for the rest of the weekend we can do the old "walk around, go to cheap-or-free museums, have drinks at my apartment instead of at a bar" routine familiar to 24-year-olds the world over.
5) Valentine's day
Problem: We want to do something nice, but at the same time: K's birthday!
Solution: Cook a nice dinner in. My dad said he'd buy me the ingredients for my special ricotta cheesecake if I'd make him one, too. Which I'm happy to do. Then I think I'll do some kind of salad and shrimp scampi as an entree--delicious, and the ingredients aren't too expensive.
6) The GRE in Literature in English
Problem: With all the financial worrying I'm doing, I'm not in a good headspace for studying.
Solution: BREATHE. CHILL. STUDY.
Monday, January 28, 2008
It's Going to Get Better
...does anyone else have to tell themselves that, sometimes?
Today I left my house, squinted against the winter sun, checked out the sale posters on my grocery store on my way to the subway, and realized that I had forgotten the bag I'd packed. It had my lunch in it, and the manuscript I'm working on, and the box of Trader Joe's instant cranberry oatmeal (a new staple of mine, and oh, so delicious and healthy and easy), so I needed it. I went back. I got the bag. I left again, squinted again, checked the sale posters again.
And I was suddenly overcome by a sort of exhaustion. It's tiring to have to try so hard all the time, to scrimp and pinch and worry. I know that I'm doing it so that I won't have to scrimp and pinch and worry so much later. I know that I'm laying a foundation. I know that at the end of this year, when I have $10,000 in the bank, I can lighten up a little bit, have an extra drink when I'm out to dinner, buy the new lunchbox I want, go to the movies. And in the meantime, I comparison-shop, use old tupperware, wear the same four dresses over and over again to work. I think it's evident how hard I'm squeezing my paycheck; a $50 Starbucks card turned up in my mailbox last week, signed "Your Secret Admirer" in my mom's handwriting. (Aww, mom. Thanks.)
But it's exhausting. I bumped my 401(k) contribution up a point, from 7% to 8%--with the new match, I can get about 12% of my salary in there this year, and I want to make sure I get the full match. But the switch to the Roth 401(k) and the increased contribution have eaten up my raise entirely--my last paycheck, I actually took home $5 less than usual. Where was the money I was going to use to join a gym? Not a penny of it to be found.
And I've got a couple upcoming financial commitments--things I very much want and/or need to do, but which cost money, and not spare change, either--to take care of, and no clear sense of how I'm going to take care of them, short of pulling money out of savings, which means more scrimping and pinching, cutting even closer to the bone. The prospect is a glum one.
But it is going to get better, easier. Once I've got that $10,000 saved, I can let up a bit. I'll bump up my 401(k) contributions and stop trying to squeeze an extra $25 in savings out of every paycheck--instead, I'll open an ING sub-account for short-term savings, for when I want a lunchbox or a dress or a plane ticket, and automate a modest contribution to that out of every paycheck. I'll begin to think idly about the idea of saving for a down payment, sure, but that's a ways off. I always want to be living below my means, but right now I'm living pretty far below my means, and ultimately, I'd like to decrease that distance a little, give myself a little more slack.
And I'm working hard now so that I can do that. That's what I tell myself. It's going to get better.
Thursday, November 08, 2007
Another Plane Ticket
So, at the last minute I decided I wanted to to go with K to his family's for Thanksgiving. Not that I had the money for a plane ticket or anything.
We're flying on Thanksgiving, so we actually got a pretty good deal on the ticket: $224 apiece. (Flying on Thanksgiving also means that I can hang out at my parents' Wednesday night, bake a couple of apple pies for their dinner, and get to take part in the pre-Thanksgiving prep, which is actually, I think, my favorite part.) Nevertheless, not an insignificant chunk of money to come up with at a moment's notice.
My dad had offered to buy me this plane ticket too, if I decided to go, but come on, I can't let my dad buy me everything. (That sounds flippant, but I actually do feel pretty strongly about the need to set a few financial boundaries with my parents, because it's easy to accept that kind of help and start counting on it and/or let it set up a not-so-appetizing relationship dynamic.)
I can actually scrape up all the necessary cash from what's currently in my checking account--I'm just going to have to spend a little less in France, and I won't be able to save my clothing allocations from my next couple of paychecks (I need a dress for Christmas parties!). But I think that $400 (about 270 Euro) should cover food & spending money for six days in France, if I'm careful. Any gift shopping I want to do can come out of my gift fund (i.e., go on my credit card to be paid out of my gift fund when I get back). Besides, I get paid the Thursday I'm there, so it's not the end of the world if I need another $50 or something. The only think I think I might really have to give up is a taxi home on the return trip--which isn't the end of the world, just irritating.
Thursday, October 18, 2007
Towards Success: A Few Notes
Over at the always-excellent Get Rich Slowly, J.D. is running a contest for a Nintendo Wii: tell him about your financial success story. This has me thinking about sucess, financial and otherwise, and about the way I've changed as I've focused on getting my financial life in order.
In one sense, any "success" I've had is not particularly compelling. I haven't had all that many obstacles to overcome. I'm a privileged kid who graduated from a great school with no debt because my parents paid my way. And now I live in New York on $32,000. Boo hoo. I can hear the world's tiniest violin playing just for me.
In another sense, though, I'm very cognizant of the ways in which I've changed as I've begun to focus on money and hone my financial skills, and I think the vast majority of changes are for the better. (I do think there's a tendency of my money management style to validate and even, perhaps, feed my soupçon of control-freakery.) Like most decisions, my decision to focus on money management and getting my financial life in line was a series of slow behavioral changes, a process in which I developed new habits and jettisoned old ones.
For example: taxi-taking. When I started my job, about two months before I started this blog, I took a ton of taxis. I often took taxis to work. Now? The last time I took a cab was Labor Day. It was pouring rain, and K and I were loaded down with a week and a half's worth of groceries and our bags from the bar mitzvah trip. Before that? I don't think I can remember. More and more, I'm allocating my biweekly $30 for taxis elsewhere at the beginning of the pay period, working on the knowledge that I just don't take taxis that frequently anymore. But I barely even noticed the change. (BTW, for the curious: a big part of it, I think, was chilling out with how often I wore high heels. Another big part was reframing the choice: I choose to save $10 and spend 10 minutes.)
More than any one habit, though, I feel like my focus on finance has reminded me that I'm responsible for my own life, for my own behavior and choices. I think a lot of people think of this in the framework of "being responsible for things is a burden," but for me, it's been incredibly freeing. It's great to feel like good choices and hard work will pay off, that I can make my life into what I want it to be. And that's how all this makes me feel.
Thursday, October 11, 2007
On Excess
This weekend, my parents, K and I flew down to Boca Raton to attend my second cousin's bar mitzvah. (A bar mitzvah, or bat mitzvah for girls, is a ceremony held the first time a Jewish boy is called to the Torah, typically at age 13. Like a Catholic confirmation ceremony, it symbolizes an entry into an adult faith. The bar mitzvah is now responsible for his own actions and his own life, spiritual and otherwise.)
A bit of background information: my cousin, mother of the new bar mitzvah, was a department head at a major New York financial concern, accumulated all the money she could handle, and left the company and the city to adopt children and get married (in that order). She bought herself a house in Florida, near her parents, and then bought one for her sister and brother-in-law for good measure. She's a lovely, talented, generous woman. With a ton of money.
Perhaps we shouldn't have been surprised that the bar mitzvah party she threw her oldest son was as elaborate as it was--my other cousin's husband, at brunch the day after, assured us archly that "for Florida, that was tasteful," that he had dropped his son off at a bar mitzvah that had gladiators in real chariots pulled by real horses standing outside the gates--but I have to say, I was surprised. And a little shocked.
There were cocktails and hors d'oeuvres to start, along with a magician and a video karaoke booth for the kids, and then we moved into the "grand ballroom" (note, please, that these amenities are built into the synagogue), where we find a cover band, hired crowd-riling dancers, an emcee, three videographers, two photographers, video screens playing slideshows of family photos, the bar mitzvah boy's name emblazoned hugely in lights, and four-foot rotating centerpieces on every table. Not to speak of the long, dormant buffet and the seared beef and cucumber salad appetizers already laid out at the adults' place settings.
Now, I've been to some big bar and bat mitzvahs. I have. Between the ages of 12 and 14, I probably went to 25, and some of them were big things, and some of them had hired dancers, and some of them had bands and some had centerpieces (though I don't think any of them had centerpieces like these centerpieces), but as I can recall, none of them had all of those things.
Then there was a brunch the next day, smaller, more intimate, but still probably fifty people at my cousin's house. Under her twenty-foot ceilings sprawled a catered buffet spread, hired omelet-makers making omelets to order at her beautiful stainless stove, and a guy in uniform working an espresso machine and a wet bar, giving out his business card for pet parties.
Now, my own bat mitzvah party was at my parents' apartment. We cleared out the furniture, hired a DJ and a fortune teller, and had a catered buffet. Guests took photos with disposable cameras, and my mom and I made an album of the photos afterwards. I had all my relatives, a few friends from my old school, a few friends from my new school, and a few friends from my Hebrew school class. I had a really wonderful time. It wasn't an inexpensive party, but I can't imagine my parents spent as much as many parents at the time did (let alone anything like what was spent on last weekend's extravaganza), and it wasn't as lavish, somehow.
What I like about the way we did my bat mitzvah is that it was somehow suited to the tone of the day. My memories of my bat mitzvah are dominated by the events of the ceremony: being up on the bima, chanting my Torah and Haftorah portions, my rabbi and my parents making speeches about me. Most of all I remember my sister, who was nine, saying the nicest thing about me that anyone has ever said, before or since. The party is a total blur. I don't remember a damn thing. But I like the idea that my family and my friends walked from the synagogue to my parents' house and celebrated with us in our home. It feels intimate, which seems appropriate.
The bar or bat mitzvah ceremony is about coming into responsibility for one's life. It's the beginning of agency. For this reason, young people preparing for their ceremonies traditionally do a tzedakah, or social service, project (my cousin was no exception), to demonstrate their commitment to their spiritual and social obligations. To couple such a ceremony with such a lavish party, a thing so unmoored from day-to-day life, seems strange to me, seems like insufficient attention is being paid to the meaning of the ceremony itself--its message about responsibility for oneself and for others.
But, like my cousin's husband reminded me, it's Florida. And the parties are given by the parents, really, and the parents are subject, perhaps more than their children, to an awareness of social norms. That awareness is hard to buck--my own aversion to a party of this magnitude is as much about finding it sort of overwhelming and a bit tacky (both related to my own, different sense of social norms) as it is about the cognitive dissonance between the occasion and its celebration. I don't know if that cognitive dissonance would be as strong for someone who didn't find the party itself outside the realm of their experience.
On the other hand, is it even reasonable for such a party to be within the realm of people's normal experience? Especially thirteen-year-olds' experience? What call is there for this kind of thing? It's not that I'm against luxury. I'm definitely not. But this party does not represent the kind of luxury I like. Maybe if it's your kind of luxury, this feels the way that a nice trip or a great dinner feels to me--something that you give yourself because you can, but wouldn't do every day.
I keep chewing on this thing without coming to a conclusion. I don't know what to make of it. I don't know that I can figure out what to make of it, really, other than concluding that it's not my kind of thing, and that says something about the kind of person I am, but more different than better. The whole thing just kind of blew my mind a bit.
Tuesday, October 09, 2007
My Mom's Money: Gender, the Generation Gap, and Personal Finance
On Sunday night, after returning from the bar mitzvah, I put in some time helping my mom with her identity theft mess. I was pretty shocked to learn that she hadn't yet pulled her credit reports or placed fraud victim alerts on them. She had canceled the compromised card, signed up with a credit monitoring service, and begun wrangling with the companies that had charged the canceled card, so it wasn't an issue of being unwilling to put in the effort--she just didn't know what to do. I directed her to AnnualCreditReport.com, and in helping her verify herself to receive her reports, discovered that she didn't know what bank held her and my dad's second mortgage, or what the monthly payment was. She guessed the highest range the question offered as an option; when I asked my dad, it was within the lowest.
I also told her that she has to be really vigilant about her bills and statements for the next few months (at least), and my dad started in on how she never checks them over. Now, my dad's not exactly a financial paragon himself in many ways, but I never thought my mother was this clueless about her financial life. She's a gifted thrift-store shopper with a M.A. in arts administration, which means she's done half the coursework for a management degree (she did tell me that she almost failed her accounting class, though). But mostly, I just didn't think she was that kind of woman--the kind who can can just say, "Oh, my husband is taking care of it," and that's the end of that. That's certainly not the kind of woman she raised me to be.
I wonder if this is the way she always lived, or if her money-management muscles began to atrophy after marrying my dad. I know she worked a bunch of crappy jobs and lived very cheap when she was a young college dropout living in New York, and I know that she ran all the finances for her art gallery herself. Then again, I also know that the gallery went under. My mom comes from a family with a lot of money and a lot of (serious) problems, and I don't know if she got parental support or not--I could see it making sense either way. So I can't really say if these are skills she let lapse or skills she never developed to begin with.
But either way, it's weird for me because it's just not the kind of person I thought my mom was. I think of my mother as brave and independent and sort of unusual for her time--I think of her dropping out of her Seven Sisters college and moving to New York to go to Factory parties, or of her work bringing new technology into the curricula of the poorest New York City schools, or the way she talked her way into an MA program at an Ivy League school without a BA (she still doesn't have one, but she has two Masters degrees). And it's strange, because this is such a normal (if kind of unfortunate) thing for married women of my mother's generation, this learned helplessness thing, but it's not something I ever associated with my mom. I guess I always assumed she was an equal partner in my parents' finances. And it's not that she doesn't bring skills and attributes to my parents' financial table--because she certainly does (I can vouch for that myself; I've transfered the communications about my medical billing from my dad to my mom, and it's gone much more smoothly)--it's just that I always assumed she was as familiar with the big picture of their finances as my dad. And she's not. And that's weird to me.
Wednesday, September 19, 2007
Impatience
Over at The Simple Dollar, Trent has managed to articulate exactly what I feel about my financial goals.
I'm impatient. I'm so impatient. I'm lucky enough not to have any debt, but I positively champ at the bit about meeting my savings goals. There are so many things I want to save for: right now it's the emergency/freedom fund, and then I'll want to focus on the travel fund, and after that there'll be a down payment fund of (it seems to me) colossal proportions to tackle. Sometimes I feel so jealous of people like Wanda who can put away thousands of dollars a month, rather than hundreds (and not very many hundreds, at that), because I feel like those people must not have to endure the waiting that I do, the plodding and continuing to plod, the putting one leaden $25 foot in front of the other.
What do I do to stave off impatience?
I break down my goals into mini-goals. Stuff like my monthly savings goals keeps me focused on where my priorities are and gives me the satisfaction of setting and achieving a goal more immediately, rather than always having to be looking at the big, "final" number at the end of December.
I engage my financial goals on a daily basis. This helps me remember that every choice I make with money contributes to meeting my savings goals. When I feel actively connected to my goals, rather than like I'm just sort of passively waiting for them to occur, I'm less bothered by the background noise of impatience.
Mostly, though, I push harder. The last few days of a pay period are always a contest between me and myself to see if I can squeeze another $25 into my savings account. Frequently, I can. And the more often I win that battle, the closer my goal gets. This drive has already led me to bump up the goal for my Freedom Fund twice this year.
Tuesday, September 18, 2007
Disposable Income
For the first time since last November or December, K has to watch what he's spending. The long-term contract he's been working on has come to an end, and other than a paycheck that he thinks (!) he's owed, he's got no money coming in for the next few weeks. He has another job scheduled to start in two weeks, though, at a pretty fat weekly salary, and is confident in his options for work after that, so he's not panicking, but he is going to have to watch himself more than he usually does for a little bit. He returned the iPhone he bought; there's an extra $400, right there (though he spent about the same amount yesterday on the new pair of glasses he's been needing for months and months and finally had a chance to buy). He means to save money for these sorts of inevitabilities--the couple of weeks one spends between jobs as a freelancer--but for whatever reason (believe me, I wish I knew what it is), he doesn't. He's not going to be delinquent on rent or be unable to feed himself or anything, but he's going to have to make conscious decisions about money for awhile.
This morning, leaving the house, I said, "I'm jealous that you get to sleep late." He responded, "I'm jealous that you get to make money."
I wonder if this will change his future outlook. I'm optimistic that it might, I suppose, but then again, he's had these periods before and not altered his behavior afterwards. He knows my help (budgeting & setting up savings accounts & whatnot) is available if he wants it, though, and I'd be super-thrilled if he'd take me up on it. Otherwise, I'm staying out of it and not getting too pushy.
Wednesday, August 15, 2007
Reimbursement Aftermath
So, part of my recent insurance reimbursement claim was processed, but, mysteriously, not the other part. They were sent together, in the same envelope. Curious. I called up about it today, and was told by a very helpful rep to fax him a copy of my previous claim directly, which I did. I'm also submitting another set of bills today. I'm frankly not sure if the reimbursements will cover my outlay--and there'll be a whole complicated parental thing if they don't, and I don't want to deal with that at all, so I'm just hoping very hard that they do.
I had a recent debacle with my dad and a bill--a very tiny, dinky, stupid bill--where he'd said he'd pay it and then I'd sign over the reimbursement check to him, only he didn't pay it, and they were sending the mail to my parents' apartment, and my parents are on vacation, and--well, you get the idea. I paid them a couple of days after they said they were going to send it (all $100 of it) to collections, but I sent a letter explaining the circumstances, so hopefully my credit won't get dinged. The point is, though, I'd like to separate my finances, even the medical stuff like this, from my parents' as much as possible. I wonder if there's a new system we could set up to minimize their involvement--ideally, of course, I'd find someone who could bill my insurance directly, but the chances of finding such a person in the field I need are slim to none, and so it seems that for the moment there will have to be some parental assistance.
All this just as I start having trouble with the ball of my left foot and being told I should see a podiatrist. On that score, though, I've done a good job--found someone who takes my insurance, so I can just pay the co-pay myself, and not deal with anyone else (except, you know, the medical billing office & insurance company), and called right up and made an appointment. I know y'all think that's remedial life skills, but I'm pretty proud of myself. And looking forward to future medical billing running smoothly.
Friday, August 10, 2007
No News Is Good News
So, all I heard on NPR this morning was about how the stock market has tanked lately, is currently tanking, and will continue to tank in the predictable future. I think it's interesting that I care about this, and that it means something to me--K, toweling off, told me that when people used to talk about "stock market crashes" when he was a kid, he pictured a literal crash, like, someone crashing their car into a machine vital to the success of the national economy and breaking it, and I was thinking about how people talk about things without really having a sense of what they mean sometimes, especially as kids. You know "stock market loses a whole bunch of money" is a thing that people talk about, but you don't really know what that is, or why it matters, or have any stake in it at all. But you talk about it anyway, because it's a thing that people talk about.
It can still be that way as an adult, and I'm not discounting the influence of What People Talk About, but it was interesting this morning to feel like I sort of understood what was going on and why it matters, that it means something to me, it affects my life and my behavior and my plans. I kind of don't want to check the balances on my retirement accounts, but I know that I'll just keep plugging along, investing dutifully through my 401(k) and letting my Roth ride out the storm, which will pass, certainly, by the time I am seventy years old and ready to retire from whatever it is that I've ended up doing with my life.
Wednesday, July 18, 2007
Frugality Cycles
ISPF writes something that rings very true to me--she's talking about the idea of "cycles" of frugality. She does a very nice little graphic of what one could call a "frugality wave"--it's like a sine curve, where the line is one's actual expenditure and the x-axis is one's average expenditure. I feel like I've been in a high, even extreme section of the frugality cycle recently, saving more than 25% of my take-home pay, and now I find myself chafing a little, wanting a little more room, a little more income of which to dispose towards pleasurable ends.
Here's the reason this doesn't worry me: like ISPF, I cycle within a fairly narrow range--for me, the amplitude is no more than $100 or so. I'm never not saving anything at all (we're talking cash here, not retirement--obviously, because that's a paycheck deduction), and I'm certainly never spending more than I make. I also don't think the high point of my spending is excessive, though I may have to keep an eye on that end if the pattern remains the same and my salary increases.
For the moment, though, I'm happy to look at this the way ISPF does: it's just a natural fluctuation, and as long as the extremes aren't too extreme, it's nothing to worry about.
Tuesday, July 10, 2007
Unusual Financial Planning
I have a friend (no, this is not a "Doctor, my friend has an itch" situation), a smart, ambitious, beautiful, Ivy-educated friend, who is going about her retirement planning in a highly unusual manner. My friend has a solid job, at which she makes somewhere in the low 40s. She plans to pursue graduate study. She likes living well, but has no illusions that her preferred field will provide for her lavishly--it should provide for her well, especially since she's good at it, but it's not hedge funds.
Also, she is having an affair with an extremely wealthy older executive. From whom she receives money on a monthly basis. A large amount of money. She doesn't use this money to buy designer clothes, or eat out daily, or get regular facials. She invests it. We haven't talked about the details of her investment, but her expectation is that this money will provide for her in retirement and perhaps contribute to the endowment of a not-for-profit she hopes to start. If she continues to receive this amount of money on a monthly basis for, say, two years, invests it, and sits on it until her mid-60s, she'll have something in the neighborhood of 7.5 million dollars, less taxes (her investments are in taxable accounts). And that, indeed, seems to be her plan. This means that she'll never have to save for retirement out of her salary, and she'll still end up with quite a lavish savings.
Aside from the tax consequences--Is someone paying gift tax? I would think investing money of indeterminate provenance would be a big fat red AUDIT! flag--I kind of think this is brilliant. I'm jealous of the incredible speed with which her investments grow. That sounds way better than my slow and methodical plodding.
I know that there are emotional consequences to these kinds of arrangements, and that some people (including some of my friends) find the whole situation sketchy, and not without reason, but I think it's hard to deny that my friend is being extremely smart here.
Madame X recently did a post on personal finance for mobsters. I'm intrigued by the way these unusual situations lead to unusual financial planning--I think it's another case in which talking about money is a way of talking about people. Any other tales of "extenuating circumstances" finance?
Tuesday, July 03, 2007
The American Dream On Credit
Overheard in my office:
"I'm living the American Dream: I'm living beyond my means!"
The speaker was joking, but it still spazzed me out. She and another office friend and I were talking about credit card debt--she made fun of me for my tendency to pay off individual charges on my card right after I make them (admittedly, this is overkill), and we made fun of her for her contention that paying something on her debt every two weeks means she doesn't pay any finance charges (they have to issue another statement, she says, which prevents interest from accruing--that can't possibly be true, right?).
This is all in good humor, and I would never seriously try to preach to her about financial responsibility. It's just not my place, and clearly, she's not in a place to start thinking about that right now. And you know, I guess that's fine: people come to things when they're ready, and she's not.
I think our mutual teasing conveys a kind of mutual respect, somehow, and that does seem to me to have something to do with the American Dream.
Wednesday, June 20, 2007
Here's a New One: Inter-Salary Etiquette and Lunch
My friend A is a first-year analyst at one of the big financial firms here in New York. I haven't seen him in a long time, both for some social reasons and because, you know, first-year analyst. He sent me an email the other day proposing that we get some lunch, given that we both work in Midtown. I agreed that we should get some lunch. Here's the problem: where will we get the lunch? I can't imagine that A, who makes three or four times what I do, is undertaking any frugal food initiatives in his (sparse) spare time. My guess would be that he would be inclined to go out for lunch. I'm not at all concerned about telling him I'd rather meet somewhere outside where we can just sit down and have a chat and eat whatever we please (i.e., I'll be able to bring my lunch), and I'm not concerned about him sussing out my salary, but I am concerned that any mention of my reasons would sound like hinting around that he should buy me lunch, which I absolutely do not think he should.
It's different to say to a friend who makes just about what I do, "Dude, let's brown-bag it and meet in the park; I can't afford to buy lunch today" than it is to say the same thing to a friend who makes far, far more. I don't want to induce any kind of guilt, and I really don't want to seem moochy.
This is a new one for me, because most of my friends do make pretty much what I do--or at least they have budget restrictions. That might be the problem here--assuming that because he makes (what is by my standards) a ton of money, he doesn't have budget restrictions or financial goals. Then again, I don't want to insult him by assuming he does. I don't really know what to do. I guess I'll just continue to do what I've done, which is avoid all mention of my reasons but make the suggestion anyway.
They always say that money can come between friends, but I guess this is the first time I've really encountered this kind of awkward situation about money with a friend. I hope it's not an omen of things to come.
Thursday, June 14, 2007
Frugal Food Wrap-Up: How to Eat for Fun and Profit
I feel like I learned so much from my frugal food experiment of the last two weeks, I don't even know where to start wrapping it up!
The benefits of this project were substantial: I managed to save enough money to successfully cashflow a purchase I wouldn't have been able to afford (out of my last paycheck) otherwise, without even reducing my savings allocations (I ended up tranfering about $50 out of my eating-out and work-lunch envelopes, as opposed to needing to transfer money in, so I'd say in terms of concrete savings: at least $75 over the past two weeks). I saved myself time and energy during some frantic days. I (mostly) ate tasty, satisfying, nutritious food.
What are the keys to frugal food success?
You have to know how many meals you're going to need to pack, so you need to know where you're going to be. Part of the reason this experiment worked out well for me is that my time is suddenly very regimented, which makes planning easy. You also need to decide in advance what you're going to eat over the next unit of time (whatever unit you grocery-shop for: for me, that's a week). A grocery list derived from a meal plan that takes your schedule into account is the ideal of efficiency and frugality here. That's not to say that you can't do it if you can't hit that mark--what I'd do is guess how many meals you're going to want to pack, plan that number of meals, and do your shopping based on that plan. You can always tweak the plan--it's still a crucial starting point.
It's way easier to fill a container from a big bowl in the refrigerator than it is to make something from scratch in the morning. Batch-cooking is essential--I do it mostly on the weekends, and only rarely do any actual cooking during the week. So yes, this does absorb time--but for me, it was rquite pleasant time. I'd hook up my computer in the kitchen and listen to an episode or two of "This American Life" while I cooked.
It's essential that you pack food that travels well. A banana or an apple is easier than strawberries or grapes (I bought grapes on my last shopping trip, but have never packed them--because I'd need to put them in a container). Another one of the troubles I've had is having to stuff everything in my regular bag--I think that, if I really do keep packing my own food this often, I'll have to buy some kind of lunchbox or lunch bag. I need the purse space!
Don't forget to pack snacks! My favorites this week were things that were pre-packaged, like cups of applesauce or individually wrapped string cheeses, but it's also quite easy to take carrots and hummus, or some cut fruit. And I keep dried apples, dried cranberries, and some trail mix in my desk drawer at my office. That way if I need a snack and I haven't packed one, there's something tasty and nutritious to munch, and I don't have to spend my money at the vending machine.
This might be the most important at all--I really do feel like the key to my success in this experiment was looking at it as a challenge. I got interested in it from a problem-solving perspective and from an aesthetic perspective. I started looking for recipes that would suit my specific needs, and ended up sort of rediscovering my enthusiasm for cooking. That's part of why it was so important to me to focus on packing delicious, healthy food--I felt like I was doing something wonderful and enjoyable and nurturing for myself (not just sacrificing to save money) and for that, I was willing to put in the time and effort. It's weird to say about an experiment in frugality, but this felt really luxurious to me--when I was packing up this morning, I looked at the food I had in my hands, and realized that that was what I'd be eating today, and it was all really good. It was pretty, and tasted good, and was nourishing, and I was pleased about that, and proud. Plus, I thought about how I wouldn't have to stand on any lines or think about going to an ATM or replan my whole week of discretionary spending based on my lunch choice, which was just such a relief.
In conclusion, planning and packing your own meals is awesome. It's healthy and it saves money, but the most important and most genuine thing I have to say about it is this: it's really fun. I encourage you all to try your own frugal food challenges.
Some of my regular readers seemed really interested in continuing to see updates on the frugal food situation. I'm happy to provide those, but I think I may bump them down to weekly updates--from now on, I'll check in of a Thursday or Friday and do a quick update on how I'm doing on this front. I'll continue doing frugal recipe posts, too--so watch for those! And most of all, thanks for all your support with my experiment!
