I thought I'd give calculating my net worth on a monthly basis a shot...sort of just for the hell of it. It's not a very difficult calculation, given that I don't have money in very many places, and they're all aggregated in Bank of America's My Portfolio feature (my favorite financial tool ever). It's also not a very exact calculation, given all of the things it doesn't take into account--that I've written checks for $685 that haven't cleared my checking account yet, or that almost half of my existing cash savings are savings specifically for the purpose of spending, et cetera. Nevertheless, it might turn out to be an interesting metric.
So...let's take a look.
Cash
Bank of America accounts (checking, "float fund"/Keep the Change savings, and CD): $2,575.53
ING accounts (Mini-E, travel fund, gift fund): $2,880.56
Investments
401(k): $643.22
Roth IRA: $6,970.99
Liabilities
Chase Freedom credit card: $56.57
Total: $13,013.73
NetworthIQ gives me this little graph, which isn't actually very helpful since it just maps the trajectory between $0 and where I am now, but hopefully it will get more helpful and interesting as I continue to update.
Wednesday, February 28, 2007
February Net Worth Update
Tuesday, February 27, 2007
Ouch: Experiencing Volatility
So, like pretty much everyone else's (I started hearing "the stock market is crashing" conversations in the office hallways around 3:30), my investments took a pretty substantial hit today. My Roth went from about $7,190 this morning to exactly $6,970.90 as of this second. That is, as of right now, I've lost money in the stock market—only about $30, but nevertheless: there's less money in that account right now than I initially put into it. My 401(k) took less of a hit (in absolute terms—it actually lost about the same percentage, which hovers slightly above 3%), and is only about $2 below my contribution levels, but that freaks me out less because it's not all my money (that is, I put in something like $162; it's currently at $320, so I'm still winning, pretty much).
That's scary. That's an obvious thing to say, "it's scary to lose money," but it's also, you know, true. I totally knew, intellectually, that this happens, but it'd never actually happened yet (in my lengthy two months of being invested in stocks). It's not my favorite part of investing, so far.
So, what does one do with volatility? Obviously, you can't panic and liquidate your investment—that's dumb, and it makes permanent a loss that almost definitely wouldn't be if you left the money in there (penalties aside). Actually, I just placed an order with Vanguard to invest the final $1,000 to max out my 2007 contributions (that money had been sitting in my travel fund—I'll just start saving to there, instead of to the Roth, after I make my $1,000 Mini-E goal). Given that the price of Vanguard 2050 is currently lower than it was when I first bought it, I figure it's a pretty good deal. Nevertheless, that might be dumb, too—I think there's something about this visceral-experience-of-volatility thing that seems to demand action, demand not just change but change with a theory behind it, something that offers the illusion of control. That's pretty much what I gave in to, I guess, even though it might turn out to be a good move. This CNN Money article, "Survive a Market Drop—And Make it Work for You" could cut either way on my decision—it notes both that "people who pay close attention to news updates actually earn lower returns than people who seldom follow the news" (my guess would be because they tend to make impulsive decisions like this) and that "a down market can be a great time to buy solid investments at bargain prices."
Since after this, my Roth will be maxed out for 2007, I can't do this "it's low—buy!" thing again, and I'll just have to take the next ten months' worth of volatility with a long-term investor's world-weary shrug. And I can do that—because, like I said earlier, what other options are there? Sell? Not likely. But it is stressful, in a real way—that's my lesson for today, and I think it's a valuable one.
Reluctant to Spend?
It seems I'm reluctant to make big purchases.
I have $250 in my "virtual envelope" for clothing, and $190 in the one for haircuts. So why haven't I ordered the two pairs of boots I've been wanting and booked the salon appointment my hair so desperately needs? I've just been putting it off.
I have no problem making little incidental purchases (a cab here, a few iTunes downloads there...). It's not like those don't add up: I budget $45 per paycheck for cabs and (non-Netflix) entertainment, and when you add the biweekly $70 for eating out...it's not like I'm a tightwad. But somehow, making big purchases scares me, and I postpone pulling the metaphorical trigger even when I have the money and know that spending it won't hurt my ability to achieve my goals. It's like once I see a bit sum, I'm reluctant to give up the opportunity to exceed my savings goals. This is one reason I give away the money I budget for charitable giving on a scrupulously at-least-monthly basis: I can give $50 or $100, but it would definitely be harder to give $150 or $200 at a go--it would feel like giving up more, even though the financial reality would be the same.
So is this a useful check on my spending, a counterproductive distraction, or just a quirk?
Friday, February 23, 2007
An Open Letter
K, darling, heart of my heart, thank you for taking care of me while I've been sick, and also, would you please cash that check I wrote you? It's making my accounting all wonky.
Love,
English Major
Thursday, February 22, 2007
Bright Lights, Big City, Ridiculous Real Estate Market
Some months ago, doing jury duty, I ran into the mother of some old friends, who now sells apartments in Manhattan. She urged me to buy young, and assured me there were still apartments "under $400,000." On my way home last night, I stopped at a real estate storefront and looked at the photos of beautiful apartments—none of which had price tags under 340K, and that was for a teeny studio. Granted, that was a high-end sort of place, but nevertheless—real estate prices in New York are astronomical. How can anyone under 30 afford to buy at those kinds of prices? I would like to buy young, and it's not like I want to buy a SoHo loft or anything, but how does one even begin to come up with a down payment of that size making less than, say, 100K?
I know we're a city of renters—but is it actually impossible to buy in New York before you've really, truly "made it"?
(I wonder, also, how much this contributes to gentrification—it's easier to push out a community of renters than one of owners, and the pushed-out people benefit less.)
Tuesday, February 20, 2007
Barriers
I'm in a pretty slow time, financially: there's not much to do at the moment (I'm not complaining). The one thing I need to not let off my financial radar is filing for FSA reimbursement by the end of this week. If I file for reimbursement by the 24th, I should be reimbursed in a timely enough fashion that I shouldn't have to lay out any of my own money for next month's Metrocard. Nevertheless, I'm concerned about my ability to do so. Here's the barrier: I don't know where the forms are. My HR rep explained thusly: "They're right outside my old office." Of course, I wasn't here before she moved offices, so...I have no idea where that is, and I'm embarassed to ask. Yep: that's the barrier. That's it. I'm embarassed that I haven't been here long enough to know where someone's old office is, and reluctant to ask yet another question that underlines that fact.
It's amazing how something as insignificant as that can get between a girl and the $76 she needs to get around the city, but it can. Hm.
Friday, February 16, 2007
Too Sick To Blog
The title pretty much says it all: I'm under the weather. I should be back on my bloggin' feet by Sunday.
In the meantime, review the excellent submissions in the recent edition of the Carnival of Ethics, Values and Personal Finance. There's a ton of good stuff there.
Thursday, February 15, 2007
Carnival of Ethics, Values, & Personal Finance #3
Welcome to the third carnival of ethics, values and personal finance! In case you're new to this carnival, it highlights articles that address the intersection of ethical issues and personal finance—a remarkably broad category. I've grouped the articles into two major categories and pulled a sample sentence or two.
I picked a few personal favorites; I also omitted quite a few submissions, ones I didn't think were sufficiently relevant to the topic at hand. If your article didn't make the cut, never fear: it's an opportunity for you to consider how your beliefs affect your financial choices, write about it, and submit to the next edition of the Carnival, hosted by ISPF.
Press on, gentle reader, for a smorgasbord of articles to pique your interest and provoke your intellect.
First, the editor's picks.
Penny Nickel, of Money & Values (and the founder of this carnival!), examines Salary Negotiations and the Gender Gap. This rings a bell for me personally: despite having a higher offer on the table from another organization, I failed to negotiate my salary when I accepted my current job.
One part of the problem which I've been reading about lately is the difference in starting salaries between men and women—and specifically, the impact of negotiating salary offers (or failing to do so). There are huge gender differences here.
Well-Heeled's Wanda considers the trend of shifting financial risk onto individuals in Risky Business. Wanda brings up a core issue I'd really urge everyone to consider: do we allow individuals to flourish or founder based on their individual levels of financial resources and acumen, or do we try to make sure that everyone has basic needs met?
I’m conflicted on how I feel about this risk shift. Are the greater potential rewards worth the heightened insecurity that comes as part of the package?
Dennis presents A Walk with my Old Man posted at A Pile of Coins. It's a chestnut, but it's worth a reminder: Whatever you're up to, never forget to be with those beloved ones, sometimes they can give so much of value, way beyond finances...
Sarah Winfrey takes a look at a different kind of return on investment in Share the love! Invest in Microlending posted at Wisebread Finance.
What seems to us to be a small amount of money can dramatically change the life of a poor person and their family.
Ethics and Values in the Corporate World and Workplace
ISPF of Grad Money [Matters] examines an instinctive reaction to a friend doing manual labor in her workplace: Your boss wants you to do...WHAT?
I have no clue when this “it’s not my job” mentality got into me, but it can’t be good!
Leon Gettler presents Only 25 per cent of top schools teach ethics posted at Sox First.
A study has found that only one in four of the world's top 50 global MBA programs required students to study as ethics as a stand-alone course.
Dennis Mickley at Free Fudgie explains why he passed up a lucrative career for an option he finds more exciting in An Introduction.
Initially, I was dabbling with being a lawyer, and being creative on the side but I decided on writing, and forsaking a traditional career path to dance with the great unknown of independent creativity (and extreme poverty).
Charles H. Green talks about Trust, Democracy and Capitalism at Trusted Advisor.
But a nation whose laws of financial fine-tuning are opaque, written by those with a bias toward more concentration of wealth, and even then brazenly violated, is not a nation whose capitalist system is any longer built on trust.
Personal and Interpersonal Values and Money
The Silicon Valley Blogger of The Digerati Life reports on the extremely frugal lifestyle of adherents to The Compact in Borrow, Barter, Buy Used: Espousing the Frugal Lifestyle.
It sounds like it started as a dare. Or a challenge, if you will. It turned into a full blown economic boycott sealed by a casual pact and governed only by conscience.
Over at Queercents, Nina wants to know, WWYD: Revealing How Much Money You Make.
If someone asks how much you make, do you tell them? Does your answer change if the question is posed from a friend vs. a family member?
Another Queercents blogger, John, considers what to do when an interest in fitness conflicts with a dedication to work (and lucrative overtime hours) in WWYD: Keeping Up with Fitness and a Demanding Work Schedule.
Considering how important fitness is to me, should I find some way to cut back on work?
TC at Investments & Loans gives some pragmatic tips for those who value Simple Living: Best Buys for DIYs.
These postings are especially for our minimalist, sustainability and saving conscious readers.
And, uh, I wrote this thing about the chicken-or-egg intersection of lifestyle and financial choices: Frugal Pleasure.
It's the power of peer pressure used for good.
Wednesday, February 14, 2007
I'm Going To Buy Coupons on eBay: Yes, Really
Today I bid $1 for 20 coupons on eBay. Yup. Really.
It sounds really silly--paying for coupons on the internet?--but given that for $2 (including shipping, which is probably heftily marked up because what does it require to "ship" coupons other than, you know, an envelope?) I can save $20, it's actually a pretty darn good deal. The coupons are $1 off two bottles of Suave hair care products, and I go through a lot of Suave Naturals conditioner--probably 2 bottles a month. Paying $2 for them instead of $3...it's pretty hard to argue with that.
Mostly, I really do think coupons encourage you to buy products you wouldn't otherwise buy, plus, they're a ton of hassle, so I don't bother. But something like this, where I use the product consistently and in substantial volume, and can just get the relevant coupons? To me, that's a winner. If there's a single product you use consistently, I'd recommend doing a quick search--maybe you, too, can buy coupons off the internet and save a few bucks.
Float Fund Update
I got the $25 reimbursement check from the accounting department today, and I'll be putting it into my Bank of America savings account (the one I really only use to hold my Keep the Change transfers) to start up my float fund. I just need a little $100 cushion to cover the initial outlay on these kinds of expenses. I'll submit the request for reimbursement for the Metrocard by the 24th, and should get the check from my FSA in time to buy the next one (I think this one expires on the 3rd), but I can always put it on my credit card to buy myself a week or so.
I just think once I get into the rhythm of the outlay-reimbursement cycle, it'll be so much easier. It just hit me all at once, and suddenly everything felt very, very tight. The float fund is intended to prevent that happening again in future.
Tuesday, February 13, 2007
Relatively Inexpensive Valentine's Day Recipe #2: Chocolate-Covered Strawberries
This one's so easy it's practically cheating.
Like last time, start with the chocolate. This time, meltability is key--chocolate chips are probably your best bet (go for a brand with a high cocoa solids percentage, like Ghirardelli). Get the kind of chocolate you like best--dark, milk, even white works, though it's tougher to melt (it breaks easily). Melt the chips in a double-boiler (or, do it like I do it, in a metal bowl over boiling water). You can add a smidge of some flavoring agent if you like (liqueur, cinnamon, chili powder, some kind of extract) without compromising the chocolate's ability to set, but personally, I think this tastes great plain.
While you're melting the chocolate (stirring thoroughly), slap a sheet of wax paper (or foil) over a cookie sheet and wash the strawberries (a pint works great for two). Once the chocolate is thoroughly melted and the strawberries are drained (you can dry 'em in a dishcloth if you need to hurry), start dipping: you can do it with your fingers, a skewer, or a fork, but it's pretty self-explanatory: dunk the strawberry in the chocolate and plunk it down on the wax-papered cookie sheet. Let them set up at room temperature, but once they're set, you can refrigerate them.
If you want to get really fancy, you can add some dribbles of white chocolate (melt it, let it set slightly, spoon it into a plastic bag, and cut a teeny hole in the corner for a cheap and easy piping bag), or you can place a conversation heart on each strawberry before the chocolate sets.
I know strawberries are expensive this time of year, but there's no way the basic version of this recipe will run you more than $8 or $9.
Eat with a partner. Feed each other, drink champagne, have a grand old time.
The Dignified Quarter: A Frugal Anecdote
When I was in high school, before New York instituted a citywide museum pass for high school students, my art teachers used to send their classes to the Met to do special assignments. These assignments would usually require at least two visits to the museum: time spent finding a painting, or two paintings to compare, then sketching time, then research time in the archives. We used to try to get out of these assignments by complaining that it cost too much to go to the Met over and over again (obviously, this excuse went out the window when the city started doling out free passes). One teacher in particular was not impressed with our reasoning. The Met has a suggested donation, not an admissions fee. "Pay the dignified quarter," she would say, nonplussed.
What's the dignified quarter?
"You pay a quarter," Ms. S would explain, "and you look dignified."
(I still do this, though now it's more like a dignified $1-$5.)
Don't Forget to Submit!
The next Carnival of Ethics, Values, and Personal Finance will go up here on Thursday. Don't forget to submit!
P.S. Don't forget to submit something that is actually related to ethics and/or values. That part's kinda important.
Monday, February 12, 2007
Relatively Inexpensive Valentine's Day Recipe #1: Hot Chocolate
If hot chocolate doesn't sound like a dessert to you, you've probably been drinking powdered cocoa, not real drinking chocolate. A mug of real hot chocolate with an artisan marshmallow or homemade whipped cream is a fabulous treat that can be made at home quickly and relatively inexpensively.
First, get yourself some chocolate. To make two servings, you want about four ounces of good chocolate, semisweet or dark. The larger the percentage of cocoa solids, the better. You can also use Ghirardelli semisweet chocolate chips; they melt easily and taste great. Once the chocolate is melted, add a cinnamon stick to simmer (or a dash of ground cinnamon), a pinch of salt, and, if you're feeling adventurous, a pinch of chili powder. Then dilute the chocolate with heavy cream (or regular old milk, if you prefer slightly less richness), slowly, stirring thoroughly. If you like, you can add amaretto, rum, curacao, or brandy to taste. Top with whipped cream (if you buy cream for the recipe, reserving a half-cup or so and whipping it with powdered sugar to taste and a teaspoonful of rum is delicious and cost-effective) or marshmallow.
If you only have to buy chocolate, cream, and either powdered sugar or marshmallows, this recipe should cost you under $10. I'd advise skipping the booze if it's not already in the pantry, but that's up to you.
Best enjoyed while cuddled up to a significant other or under a blanket. This is a great recipe for girls-only anti-love Valentines Day movie marathons, too, since it's cozy, comforting, can be expanded easily to serve as many people as your heart desires, and doesn't carry too much Valentiney baggage.
Refund Madness
My federal and state refunds hit my ING account this weekend. The federal government forked over the expected $430, but New York State adjusted the $270 calculated by the program I used to e-file to $90. It's kind of disappointing, but there's not much I can do about it (and hey, $520 may not be $700, but it's still $520) so I won't be banging my head against that particular wall. Anyway, this brings the balance of my Mini-E ING account to $722.32. Given the current lack of slack in my budget, I'll be sticking with the existing automated transaction (a meager $50 per month) for the next couple of pay periods, until I can boost the balance to the $1,000 goal. Then I'll begin piling up the last thousand dollars for my 2007 Roth contribution.
Three cheers for e-filing and direct deposit.
Thursday, February 08, 2007
Young People and Retirement Calculators
Here's my gripe about retirement calculators: they don't seem to take life changes into account. You enter your income and the amount you save monthly, or you enter your income and the percentage of it you save monthly. Sometimes the calculator asks you about your yearly raises in terms of a percentage, as if your income will increase steadily and you will continue to save at a steady percent rate until retirement. More complicated calculators may be able to take into account two or more separate retirement accounts, but those tend to ask a whole lot of questions for which I have no answers, like the amount of equity in my home (uh...zero?). Some take inflation into account, some don't. But none that I've yet found take life into account, really. No job changes, no major salary bumps--just a straight upward trajectory.
I guess what I'm really complaining about is that none of these calculators can give me a number, a be-all, end-all kind of number that will tell me what I will need to retire and whether or not I can meet that goal, thus offering me some stamp of security. That's pretty silly--they're internet calculators, of course they can't predict that sort of thing.
In lieu of the set-in-stone security we might like to have, I guess all we can do is our best: start early, save as much as possible, and hope for the best.
Why You Should Have a Giving Plan: An Anecdotal Look
Here's a reason I'm glad I budget for charitable giving in every paycheck: a coworker of mine was killed last weekend under truly awful circumstances. As the past several posts have mentioned, my budget is stretched pretty tight right now. Nevertheless, I got paid today, and I've got my 5% allocated to charitable giving. That allocation means that I can write a check for the collection that the company is taking up to benefit my late coworker's young son. The total sum is being matched by the company, which doubles the power of every dollar, and doubles the regret I'd have if I couldn't afford to give anything.
I'm just very glad not to be in the position of being unable to help. The man who died was one of my favorite people in this building, consistently kind and friendly to me from the day I started working here. I'd hate to be unable to do this small thing for his family.
Wednesday, February 07, 2007
How could I forget eBay?
I just sat up very straight in my chair and had a Eureka! moment: eBay! I have a bunch of things I've been putting off selling, and it's time to get moving. I need to make sure I have my digital camera dock, but I'm going to go home tonight and do a little rampage through my Stuff to see exactly what I can (and should, because space is always needed) get rid of. I can do the listings on Sunday evening.
This is reassuring, since I was unsure where I was going to come up with the time to take on new stuff right away, given that both of my volunteer projects are about to kick into high gear.
I'm going to shoot to finance the approximately $150-$200 that I still need for the Chicago trip in early April with eBay sales. Let's see if I can do it.
If It's Broke, Fix It
So, I realized that what I need to do about my current state of cash-strappedness is to pull a page from Dave Ramsey's playbook and do a budget specific to the next couple of weeks. Dave advocates a monthly budget, but the important concept here is that he advocates budgeting with a specific time period in mind, not just an abstract set of allocations. (This means that your February budget will specifically take into account expenses for Valentine's Day, as opposed to generic "entertainment" budget allocations.)
Here's how I'll be applying those principles:
I want a new pair of boots, badly (actually, I'm planning on buying the same pair in both black and brown). Do I need a new pair of boots within the next two weeks? Well, no. The boots can wait. So I won't be budgeting any money for clothes for this pay period. Instead, I'll be putting the $50 I would have put towards the boots towards the Metrocard. The only problem with the specific-budgeting thing is that it requires more advance planning than I usually can manage, but I do know that with all of the friends in town (I've just learned that another good friend, who's been teaching in France, will be in town next week), and the Valentine's Day, and the rapid approach of K's birthday (the 21st), I need to not cut back on the socializing budget. But clothes aren't a necessity right now, so that money is definitely getting reallocated.
I do still want to earn some extra money, though--it would be great if I could finance the Chicago trip without dipping into my existing budget,which is doable if I find some new source of income, even a small one. The suggestions in the comments are great--I'll let you know what I decide to pursue.
Tuesday, February 06, 2007
Broke!
You know what I am right now? Broke. B-r-o-k-e. Having to scrounge up cash for my plane ticket didn't help, and this coming paycheck I'll also have to scrounge up cash to pay off the $76 I put on my credit card for the Metrocard, and on top of that I realized that my initial belief that March was a three-paycheck month which would take care of the money for the trip for K's sister's wedding was an entirely false one, and that I'll need to come up with that money some other way. On top of all of this, a good friend from college is in town this week, and I don't want to miss out on chances to see her as much as possible because my disposable cash-o-meter hovers somewhere perilously close to $0.
You know what would help me out? Extra cash, which I do not know how to find. Perhaps I will send resumes to some of the private high schools advertising tutoring services--a qualified tutor, which I am, can turn quite a buck in the college admission-hungry Manhattan market, but then again, it's not quite the season. It is, in fact, the exact opposite of "quite the season," given that the season has just passed. I don't know how to market the skills I've got (writing, editing, tutoring), so I'm going to have to hope that focus group pans out and provides me with a super-helpful $200.
I am not optimistic.
