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Monday, December 24, 2007

"Non-baller"

This is the first year I've ever made "big" New Years Eve plans. I'm going to my future home of LA and a friend from my semester abroad is coming with two other of her friends. I opted out of the original plan, Las Vegas, because I didn't want to spend that much money. In LA, we can stay with my boyfriend (crowded, but free!) and save a ton of money on lodging.

I knew when I signed up for this that this particular friends isn't afraid to spend money. Still, it wasn't a big issue, and we spent a lot of time together on study abroad. She usually just would spend in line with whatever I was, and one night drunkenly confessed "It is good when I hang out with you and E, because I spend less money. You two are my non-baller friend!" I didn't take it as an insult, though some might! Anyway, sometimes it stinks being the frugal one, but at the same time, I won't change my values based on peer pressure. And frankly, when we were still in college, I simply couldn't afford to.

Anyway, I recently got a message that we were considering going to a fancy club on new years at $150 + fees to buy tickets to get in. It does include all drinks and honestly is probably what a lot of "trendy" clubs are going to run in LA. But there is no way that I'm spending $200 for one night! I wouldn't be sad if we went somewhere less trendy for New Years (some are free cover, or $50), because I think the most fun part is just going to be hanging out together. If they want to celebrity sight, we can do that on less expensive nights!

She also has been requesting my presence at a fancy steakhouse for dinner. I do love food and don't mind spending a little on deliciousness. However, I don't even really care for steak, and it just doesn't make sense to me. I won't hesitate going out for delicious sushi now and then, but to spend so much on something I don't even love just is silly.

At the same time, there is a small part of me that wishes I could live a life of excess and spend the money. Really, I *could* afford it. It wouldn't put me into debt or wreck my savings. But I just don't value a trendy club enough to spend that kind of money for it. I'm not opposed to spending money (though $150 would be painful for anything) but it has to be something that is a little more in line with what I think is important. A night of fun is important, but we could have almost as much fun somewhere else.

Thursday, December 20, 2007

Failed attempt to save $700

I'm relocating to Los Angeles in January, and my company will pay for up to 2 weeks of "temporary housing" at a hotel while I find an apartment. I originally got a move in date for my new (expensive) apartment of January 15th, and I decided to push it to February 1st in order to save half a months rent. Unfortunately, the apartment complex did not like my plan. I wasn't even able to negotiate an extra week! I'm really bummed out about this, because it is essentially $700 out of my pocket and into theirs. Perhaps I should have been more pushy and tried harder. I still don't think they would have budged.... Completely lame!

I am feeling nervous about the ammout of money flowing OUT lately and I really wanted to save that $700....

Wednesday, December 19, 2007

Christmas shopping... for myself?

I went out and about today and completed the majority of my Christmas shopping. I picked out a really cute sweater/shrug and tank top for my sister and bought one in another color for myself as well. I usually never pay full price for my clothes from stores like Express, and I feel horribly guilty about it. Anyway, I went back the store and returned one sweater, but with the idea that I'd come back and buy it with the coupon they awarded me (which isn't valid until tomorrow).

Now I'm having doubts. First, I really should return the tank top because it is over priced, even for a gift. Second, I shouldn't buy myself a set. Should I? If I buy myself a set, it'll cost $135 for both of us, so about $68 each. Or I could spend $80 total (what I currently have spent) and not buy myself one. Though the "gift" budget was only supposed to be $50 for sisters. Or I could spend $105 and get two sweaters but only one tank top.

I obviously do not need the sweater. I recently got to buy some clothes from H&M using a gift card I received for my birthday. On the other hand, I rarely buy myself new clothes, and when I do I don't buy anything over $30 usually. I think in my head, "I deserve this! I got a big bonus this year and haven't spent any of it on myself." Which is true. . . But that doesn't mean I need to buy this. Perhaps I would get more enjoyment out of saving the $68. Or spending it on something else. I am going on a nice new years vacation where plenty of spending will happen. I also have a hair appointment tomorrow, which usually runs me about $110 (including tip) if I don't get my eyebrows waxed...

I think I'm going to punch in my numbers for December spending so far, and from there decide if I should keep it or not...

Do any of you agonize so much over an $80 purchase??

Monday, December 17, 2007

Evaluating job offers

I'm relocating from an inexpensive Midwestern city to Los Angeles. I have received two very similar job offers.

The first offer came in at $65k with a relocation package that included a $2000 tax assisted lump sum. I thought the offer was a little low, so I negotiated $67k and a $3k signing bonus. The pay includes up to 7% in 40k matching/contributions by the company and 12.5 days of vacation the first year. Bonuses were not explicitly mentioned, but I would imagine they do some kind of incentive bonus.

The second offer came in at $69k with a very similar relocation package (except $1000 non tax assisted lump sum rather than the $2000), a $3k signing bonus, and 10 days of vacation the first year. They also explicitly mentioned sick leave, at 8/hrs a month. They match up to 6% of 401k contributions, and have some sort of pension plan. I assume you have to work there some minimum amount of years to be vested in the pension. They mentioned bonuses when i was on-site, which this year was "ten days of pay."

My current job will be paying about $58k as of next year. I get 15 days of vacation per a year, and sick leave is not really an issues. You are encouraged to make up any hours that you are sick, but it is not an absolute requirement. I get 6% in a 401k match. I also got a 9% bonus this year.

All things considered, my current job is really the best financial deal, taking the cost of living into consideration. The pay increase is nearly a 20% raise. However, my rent is going to MORE than double, and I will be paying an extra $9,600 a year in rent. That practically wipes out the entire raise! The vacation is better, the bonus is better, and I would most certainly get promoted to "Grade 2" next year. I'm not sure how long it will take me at my next company.

However, the whole point of the job search is to relocate. So, which of the other two is the better offer?

Despite the extra relocation money from the first company (and the extra 2.5 days of vacation) the hard salary numbers will be what my future salary will be based off of. I think the second offer is better, though I'm going to miss that extra week of vacation. Is vacation negotiable? The second offer is only slightly better, but the job itself is more appealing, which really seals the deal.

My next thought is, should I negotiate the second offer? Am I worth more? I don't want to come across as arrogant to the company--I'm not even two years out of school, and I didn't go to a fancy big name engineering school. But if I am worth more than what they offered, I don't want to sell myself short. I don't know. I think it is a fair offer. I liked the company a lot. But the boyfriend insists it doesn't hurt to ask. Thoughts?

Sunday, December 16, 2007

Tis the season... to donate half of your income?

Many people talk a lot about giving to charity, especially this time of the year. I personally do not give a very large percentage of my income to charity. When friends or acquaintances are requesting donations for a cause, I always donate something. Other than that, I must admit to being a bit miserly, something I would like to change. (Or more honestly, something I say I'd like to change, but haven't made any real progress on changing.)

I was reading a celebrity gossip magazine (and I'm not ashamed to admit it!) this evening, and came across an article about people or families who gave away over 50% of their income or net worth. The featured people were not anyone special: a woman who made just $16k last year, a man who earns $200k and gives away a whopping $162,000 of it, and another woman who inherited over half a million only to give it away. Check out Bolder Giving to read about more people who are extremely generous. Their mission " is to inspire us to give at our full potential by providing remarkable role models and practical support."

I am not giving to my full potential. It isn't though I'm spending selfishly, I just have other goals that I'm putting ahead of charity. Building up my emergency fund. Paying off student loans. However, these goals aren't mutually exclusive to giving to charity. In my defense, I volunteer about 1 hour a week at Big Brothers Big isters. Still, I feel that I could give more. So, what am I going to do about it? I will start small, and donate 1% (minimum) of my income next year. To those who tithe (or those who are simply more generous than I), a mere percent may seem laughable, but it is more than I contributed this year. It is a start, right?

Friday, December 14, 2007

Peek at my 2008 plan

Here is my sketched out plan for 2008. I'm moving to an expensive city, but I took the difference of the salary and the rent increase, and I'm coming out a little ahead. Of course, there are other factors.... Anyway, savings are blue, if you can see the different colors.


This doesn't include a signing bonus or any leftover relocation perks, but those will just go automatically into savings and other initial costs of starting over (apartment deposit, etc.)

I'm not sure if I really will only spend 200 on groceries and 100 on restaurants, but I'm sure going to make an effort. I also have to start paying my own car insurance and secure renters insurance. I have no idea what the cost for those will be, but I allowed 100/month. I have $200 of unbudgeted money monthly, and $100 for entertainment--I really spend very little on entertainment currently, so we'll see.

Ah, I love planning. Or perhaps I'm really just procrastinating on finishing up my take home final for my graduate class.

Thursday, December 13, 2007

Unethical

I accepted a job for January 2008 back in early September. This may come as a surprise to anyone who noted that I was in Los Angeles last weekend interviewing for a (different) job.

To my credit, I did stop applying for jobs when I accepted my first offer. Company A just moved very quickly, while Company B moved very slowly. I sought advice of those in industry (an experienced mentor) and others who love me (parents) and was told that I should go on the second interview, and really, do what was best for me. If nothing else, I could use the weekend to find an apartment.

I have not received the formal offer from Company B, but notification that HR is putting something together. I anticipate it will be similar to the other offer--at least as good, maybe slightly better.

Here is the thing: I want to work for Company B significantly more. I met a lot of great people and liked the atmosphere a lot more. However, I have committed to Company A with a start date of late January.

I do know it is unethical to back out of my first offer, but I think I will do it anyway. I will allow myself this mistake in my career, and will never do anything like this again. I will keep myself out of this position. It is a bad place to be in. At the same time, I have to do what is truly best for me. If the company lost a contract tomorrow, they wouldn't feel bad about calling me up and saying "Never mind, you aren't hired". Still. It is not something I am proud of. I just want to say, I'm not asking advice over whether or not to do this, just HOW to handle it.

I'm drafting a letter of "resignation" (or rather, "renege-ation"). For the sake of getting the information to them as quickly as possible I probably will man up (woman-up?) and call them, as unpleasant as that may be. Ok, let's be realistic--I probably will send them an email? I will also send a formal letter (I think). I don't know how to handle this situation, because it is not the types of situations I usually get myself in.

Please offer any suggestions on how to handle this. Here is my first draft:
With great apologies and regret, it is necessary to inform you that I will not be starting employment with Company A this January 2008. I understand that backing out of my commitment is disrespectful to you, and I have wasted the time of you and your company. I am truly sorry for this and will not make this mistake again with any company.

I do not wish to start my career with Company A only to leave for something that is better fit after a short period of time, and waste more of your time invested in me as an employee. With this in mind that I have chosen a different path. My choice was not for monetary reasons, but simply I felt that the job was a better fit for me. Of course, I stopped applying for jobs at the time of my acceptance, however the process moved very slowly with the second company and I'm only now finalizing my decision. I understand that accepting an offer that I was not entirely confident in was a poor choice on my part. I should have, at the very least, requested more time to consider all my options, before making a commitment that I could not keep. Again, I sincerely apologize for the inconvenience I have caused for you.

Thank you for the time you have already spent on me as a candidate and for your gracious offer of employment. I can not apologize enough for backing out of my commitment.

Sincerely,
Me

Planning for 2008

I was hoping to wait until 2008 to talk about my goals and plans for 2008. However, I'm a planner to the extreme and I can't help myself from starting now.

There are a lot of unknowns in the first part of next year. I'm moving to a new city with expensive rent. While I have one job offer, I'm waiting on the one that I want more (tomorrow? Very soon!) so I'm not sure what my salary will be. Still, no matter what, there are some goals I can set right away, and adjust as needed.

First, I want to max out my Roth IRA again. That is about $415 a month of post tax money to be directed into savings immediately. In my first year and a half of working, I've already saved about $20k in retirement accounts. As my salary increases, I'll be able to contribute more each year. I think I'm on track to have a comfortable retirement. I have a vague idea of retiring early, but still am not ready to make a plan for that goal.

In that same vein, I want to contribute at least 10% to my 401k. This is pretty painless and will get me a full match of (probably) 6% total from my company. Based on my first job offer, that will mean I'll save about $15000 in 2008 for retirement. If I feel that I can afford it, this will be increased, with a stretch goal of 15% towards 401k.

I also want to pay a little extra to my student loan account. My goal is only going to be $1000 extra this year. I'm required to pay about $1500. In 2007 my goal was $4000 total. This is really cheap money so paying it off is more for the mental benefits. That means my month payment will increase to $215, though I'll likely pay it in chunks rather than automatically every month. If any of my goals are faltering, this will be the first to go, as it is the least cost effective.

Next, I want to continue (but decrease) to auto-contributions to my emergency fund, and really turn it into an emergency fund. I have a general purpose high yield savings account which is my efund, but I don't treat it as an efund. It's just a savings account with a continually increasing balance. I think contributing $50/week to this account will be sufficient. I pretty much grew it to 10k from scratch this year, so it is a big decrease. I'm excited to have a base fund so I can focus on other goals.

Now... the "boring" goals are out of the way!

For my fun goals, I want to add $25/week to my "travel" fund. If I have extra money, I'll increase this amount, but it is a start. I have a travel fund earmarked, but it has had really stagnant growth. I also want to start saving up for a newer car. My car has about 75k miles on it and will last another couple years... but I need to start building up some money to purchase my next one. I want to pay for my next car in cash, and I will be spending at least 10k, maybe more. If my budget works out, I'd like to save $100/week for this, giving me just over 5k by the end of the year.

So that is it! These goals will be tweaked once I'm settled into my new apartment, new city, and new job.

In unrelated news, they are announcing who replaces my current manager at work today. I hope they promote from within the group and that Bryan is it. I think that he would have the job if he wanted it, but I'm not sure he is interested in management.

Wednesday, December 12, 2007

To Do: "Quit Job"

This was not only the most satisfying thing to put on my to do list, but also the most satisfying to check off!

Actually, I really like my job. They don't discriminate based on age and experience--if you are good, you will be given good tasks and responsibility. In my short time there (1.5 years), I was able to be recognized as a "high performer" and given a key role on my team. Which is really great--you don't have people forcing you to "pay your dues". If you can do the task, your dues are considered paid and you are thrown in there. There are several young employees (under 30) that have really big leadership roles in our group, and I don't think I am too far behind. Besides that, I have gotten to work on challenging and rewarding projects and like my coworkers.

I'm resigning because I'm relocating to Los Angeles (for personal reasons) and the branch in that area really doesn't do any interesting work. I was very nervous about putting in my notice, until my manager informed us all that he had been promoted and would be moving to a branch in Texas. That made it easier for me. I set up a meeting with my manager, which I titled "Short Discussion", which I assume made it obvious what it was about. I don't usually schedule meetings with my manager, and a vague title usually means the employee is quitting. He said he knew when he got the invite.

So, I resigned, effective January 11th. I gave them about a month's notice, which maybe is more than "standard" but I felt it was appropriate, considering we get a week and a half off for Christmas.

Today my manager presented me with the idea of working remotely from Los Angeles, with a salary differential for cost of living figured in. I was really surprised by the idea, and felt it showed they really appreciate my work. Ultimately, it probably won't work out. I don't think I'd do well working in isolation. At this point in my career it is best for me to be surrounded by really brilliant people and learn as much as possible from them. Not to mention, how would I meet new people if I worked alone? I expressed my concerns, and really, I don't think it would be best for the company either. He was fine with that, but said he just had to discuss it with me.

Tomorrow, we can tell the rest of my team.

Tuesday, December 11, 2007

My Credit Cards

This blog has been exceptionally quiet (it never really is all that happening over here anyway) this week. Not only did I send my laptop in for repair (under warranty still), but I was out of town from Wednesday night until late Sunday night (I got to bed at 1:30 am). Perhaps more to come on that "vacation" later. I actually have a lot of potential topics stored up in my mind. For now, I want to talk about my credit cards.

At work, we are all chipping in for a going away present for my manager. My coworker is collecting five dollars from us all, and complained that none of the "young people" had cash. I asked her if she could just accept credit, but no such luck. Not even Visa.

One of my two primary credit cards is a Chase Freedom Visa card. One reason I chose this card was because it was a "Visa Signature" card, and any electronics I buy automatically have a doubled warranty. Sweet. Another cool perk is that any rental car I rent with it will automatically get CDW coverage, which will come in handy when I rent a car over New Years. The cash back bonus is alright, but I really don't spend that much for it to be exciting.

What has annoyed me about this card is the constant mailings encouraging me to sign up for costly services. More than once a month I get an envelope from them to sign up for some "Credit Protection Plan". In case I ever fall on hard times, this service will allow me to suspend payments for some period of time. Or something like that. Every time I call them for any reason, they push this service. It costs something like $0.89 per a $100 balance, so it isn't much, but still. They also said if you don't "carry a balance" it is free. After questioning this further, I learned that it wasn't exactly true. You can't just pay your balance every time you get a statement, you have to pay your balance BEFORE the statement is calculated for it to be free. Anyway, it is annoying. I don't want it. I don't need it. I have an emergency fund of almost 10k (yay, go me!) and know how to manage my money. Yesterday I opened some "check" that I deposit, which will enroll me in some $90/year service. I'm not sure what the service is, only that I don't need it.

My other card is a Discover Open Road card. Discover seems to have has a bad reputation, but I think they are great. The cash back program is solid (and you can pick what one best suites your life). They also let you choose your credit card design from a HUGE selection. Not that it is REALLY important, but where else will give me a flamingo pink credit card with an "S" monogrammed on it? Love it! Of course, you really can't get by with only a Discover card. While most places accept it, there are still a few who do not. Also, I opened a second Discover card once (to use a 0% balance transfer offer) and they made a huge headache about closing it. The first time I tried my call was simply "dropped" (I personally think they hung up on me because then the customer service rep gets to count it as a customer that was not lost), and the second time I had to argue for several minutes about why I wanted to just close it. Anyway, other than that, Discover has been very nice to me since I first got their card as a college student.

Credit cards have always been a helpful tool for me. I've never been late on a payment and never been charged a fee. I typically get a couple hundred dollars in cash back bonuses each year, and they are very convenient. Still, on principle, I think credit card companies stink. They charge outrageous rates and push to sell useless services.

Saturday, December 1, 2007

November Goal Results, future goal plans

I am not excited about this post, and considered not writing it. However, I need to be accountable to myself, so here are my results for November

  • Resume tracking of spending! I didn't do this, and filled in the second half of November today. There is a $44 charge at Target that I can't remember what I bought. I think it was a mix of clothes and groceries. This is why I need to track as I spend!
  • Limit groceries to $30/week or less and restaurants to $75 total I just barely met the restaurant goal, and only spent 100 on groceries. Of course, I spent a several days with my family for thanksgiving (food provided) so that made it easier.
  • Study for and do well on midterm for my grad class. I did pretty well. I could have done better, but I scored well enough to be satisfied.
December is a hard month to set goals for. I know I'm taking a vacation at the very end of the month, which will involve extra going out/eating out costs. I have to do a lot of shopping, so the "gifts" category of my budget will be large this month. Then in January I'm moving cross country, and I have no idea how things will shake out there. In light of this information, I don't think I'm going to do month goals until February. There are too many unknowns to think about, and I don't think my goals could be very accurate. I just will track my spending and be sensible in spending. And also, to find a place to live in my new city. Still, that really isn't a goal, but an absolute necessity!

Friday, November 30, 2007

November Net Worth

This month was quite unimpressive--an increase of just $132! There are a few reasons I have to explain this. I was sure I'd hit the 10k mark, but I missed... by four dollars!
  • Of course, the stock market uneasiness. Between me and my company, we contributed about $1000 this month, yet the overall balance increased by just $300.
  • Also, there was a slight student loan mess. I was charged some back interest which was capitalized into the loan (not by my choice!), which increased the balance by about $350. I paid some, and ended up owing $51 more than I owed this time a month ago.
  • Last, there was spending. I took two trips to visit my family, at about $100 in gas a pop. I bought my plane ticket for the holidays for another $400 or so. I also went through some personal issues and indulged in a teeny bit of retail therapy.
Next month should be great for my net worth. Even though there will be Christmas shopping, just as much driving, and a new years vacation, I get two paychecks along with a bonus equivalent to about another two paychecks.

I'm also apartment hunting and I'll probably need to come up with a hefty security deposit.... The following month will be interesting with the cross country move, but it seems my future company is covering just about everything, so that is grand.

Tuesday, November 27, 2007

Breach

I have a confession. I did something very wrong. I crossed a line I should not have. I feel guilty, but at the same time, slightly relieved at what I found. I'll start with some background on why I did it before I get into what it is I did.

I mentioned before we had some financial issues when I was growing up, namely a chapter 13 bankruptcy that ruled my parents life as they made large monthly payments for 5 (or seven?) years. My life wasn't too disrupted and it qualified me for federal grants for college, but it still left me anxious about my parents financial situation, and probably greatly affected how I feel about my own.

A couple months ago I discovered some financial missteps my father had made, yet again. I truly think that this incident has finally made him realize that he needs to take control of his finances. But when I first heard about it, I was upset and nervous. My mom does fine with money, but I still worry about my parents having enough in their old age. Heck, sometimes I worry about them having enough right now.

So I did something wrong. I went online and pulled a free annual credit report for myself, and then.... I pulled one for my dad. It was really a stroke of luck that I was even able to do this. Of course I have my parents social security numbers (I needed them to list them as beneficiaries on my 401k), but they also have a few qualifying questions about where a recent loan is from and the amount of the payments. I made some educated guesses, and guessed right, and suddenly all of the information was right there on my screen. Wow.

The report itself was sort of spotty. Some missed payments, and even some accounts marked as "charge-off". I had to Google that to learn that is when you still owe a company money, but they never expect you to pay it, so they charge it off to balance their books. A few accounts noted as settled as part of the Chapter 13 bankruptcy, and many were simply closed. What comforted me was the fact that I didn't see credit cards with huge (or any) balances, I didn't find a thousands of dollars worth of loans owed. Sure it showed past problems, but no current problems.

Still, I shouldn't have done it. While I may have a good financial head on my shoulders, it is crossing the line to pull his report without his permission or knowledge. that is my anxious controlling side and I gave into it. I should have been an adult and gathered the courage to talk about it with my parents, but I took the cowards way out. I snooped. It was wrong. Still, I'm relieved at what I found.

Year end performance review


Many people fret about asking for their first raise at work. My company is fairly large and structured with raises, so I didn't have the issue of how to begin the process.

Performance reviews are given in October. Prior to the review, each employee is required to fill out a self review, stating accomplishments and noting how we met our "goals" of the performance review. This year we also had to name 3 coworkers that we wanted to fill out evaluations for us, and we also filled out at least 3 reviews of others (I did five!). Our managers then compile the information into an overall "score card", and we are given an overall rating of 1 to 3 in two categories. They roughly are "what you do" and "how you do it", but they have some HR-type names. HR imposes rules that disallow managers from rating everyone too high or too low.

The process is structured, and seems very fair. Good raises don't just go to those who gather up the courage to ask. They go to those who can list accomplishments, whose peers speak highly of their work, and who's manager is impressed with them.

My review went really well, I was rated a 3 and a 2.9 in the two categories, and my manager talked about getting me into some leadership classes in the coming year. I was hoping to be promoted to the next grade, but I do not have the 2 years of full time experience that they generally require. So I wasn't. I received a great review this year, yet still got "only" a 4.5% raise. It isn't bad, but it isn't great. I really need to get moved up to the next pay grade level in order to get a larger raise, which would probably happen next year.

The best advice I heard about reviews was to step up your level of effort a bit for the two months before the review. People's memories are short, and that is what they will remember. I didn't do this. However, not long before my review I was in a meeting with my manager (along with about 7 others) and was speaking up and questioning why we were doing something, if it was "value added" (no I didn't use that jargony word!). In my review, he specifically commented that he had noticed that I was speaking up and expressing my opinions and questioning the process when necessary. I didn't do it to impress him, but I don't have a lot of direct interaction with my manager, so this probably helped give me a slight boost.

Unfortunately (or fortunately, perhaps) there is nothing that takes the place of solid hard work. If people are requesting you to work on projects, leaving you good feedback, and entrusting you with responsibility, you should make sure your manager knows it. But if they aren't, no amount of effort on a self evaluation review will make a difference. Perhaps some clever wording and bragging can separate those in the middle a bit, but they can't separate the good from the great.

Saturday, November 24, 2007

New cars

My mom wants to buy a new car. A mini-cooper convertible. From now on, I will bite my tongue every time she talks about it, as I will when she ultimately (probably) buys it. She does not tell me what to do with my money, and it is certainly not my place to tell her what to do with hers. I've heard she says she has plenty saved for retirement (but how much is plenty?) so if she really can afford a new car, then good for her.

My older sister encourages me to buy a new car every so often. I graduated about a year and a half ago, and it seems to be the thing to do. "You can afford the payments. You are a single person making plenty of money." This is true, I can. Still, I don't yet feel financially secure enough to spend that kind of money, and I don't want to finance it. Not yet, at least. It isn't as though I'm sitting on a bunch of money. My net worth is only just creeping up to 10k (and creeping so slowly with the volatile market!), and purchasing a car would plummet it down into negative numbers. Besides, my car works just fine, and it should work just fine for several more years if I want it to.

Maybe I'm more cautious than she is, but she is also married to a very nice young man whose grandparents happen to have set aside a pile of money sitting in investments for their use. It isn't that they are wasteful of that money, but I think having a giant fund to fall back on gives you a little more confidence in purchasing. Maybe once I have some sort of fund to fall back on, I'd feel more comfortable in purchasing a newer car.

Monday, November 19, 2007

Retail Therapy

I've run into some personal issues and wound up driving to visit my family this past weekend. I didn't blink twice at paying for the gas (even at the ever rising price) because I really wanted to be with them for a couple days.

Among other things, my sister suggested some retail therapy. Not only that, but she performed some herself, giving me some new pajama's and a nice little present. And really, it did help, maybe more than material items should. It is just nice to get a present. Thoughtful.

I'm not that much of a shopper, but I do believe in retail therapy. Why is it that new things make us happy? But since I also believe in frugality and not shopping senselessly, I think I'll just purchase things that I need anyway (lightbulbs, mascara...) then try to buy some Christmas presents. And maybe a small luxury for myself....

Thursday, November 15, 2007

Using my budget

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

Tuesday, November 13, 2007

Dead Cat Bounce

Paints a horrible picture, doesn't it? You may have known what this phrase means for a long time, and if not, you may have heard it today. On the radio on the way home, the newsman reported that stocks had a recovery today, "deaceased feline or otherwise." It took me a minute to understand what he was talking about.

A dead cat bounce is when stock prices jump up after a significant decline, only to continue to fall again after the recovery. Supposedly it comes from the idea that even a dead cat will bounce, if it falls far enough down. Well that's an unpleasant thought!

Why do these bounces occur? Wikipedia suggests that there are at least two factors coming into play. Some investors might have standing orders to buy certain stocks if they fall below a certain level. Other investors might speculate that it is the bottom of the market, so they buy hoping to make a profit.

The only way to tell the difference between a dead cat bounce and a recovery from the bottom is hindsight. So what do you think? I'd love to think that today represented a recovery, but in reality I think we haven't seen the bottom yet.

I found a little note at the end of the Wikipedia entry amusing: "More recently, the term has been used colloquially during extended drinking binges to describe the apparent recovery of individuals previously thought "out-of-commission", only for them to quickly return to sleep, vomit etc." Ah, college.

By the way, thank me for not including an image with this post!

Year end bonus will help with goals!

My year and bonus is based on many factors about how the company performs. The base rate for non-senior engineers is 5.5%, and we can earn from 0 to 200% of that. This year the company did well and we earned 170%. That means I will get a check for over 9% of my salary! This is the first year that I was employed for the full fiscal year, so my first year getting such a generous check. My manager, I think, has a base rate of at least 10%, so he'll be getting a huge bonus.

I was counting on this bonus, and I will need it if I have any hope of meeting my year end savings goals. I'm kicking butt on my investing goals, but my savings isn't growing the way I wish it was. I still need:
  • 2k payback for student loans
  • 2.1k stashed in HYSA
I can definitely make it, but it is a bit dependent on my relocation situation. I have no idea what the costs will be, but I probably will have to pay rent in two places for January, and come up with a significant deposit. My current apartment had a $100 deposit, so even if I do get it all back... that really just isn't going to do much. I'll take that in consideration when I figure if I met my goals or not.

I have 3 paychecks plus this bonus to do it in. I also have to buy Christmas presents, gas for a road trip home, and come up with around $500 in spending money for my New Years vacation. Yikes! It's going to be close!

Saturday, November 10, 2007

Would you go a year without buying anything new? How about 10 years?

Perhaps, being someone interested in personal finance, you heard of the group of San Fransisco professionals who committed not to buy anything new in the year 2006. Or maybe you've heard a recent segment on NPR's Marketplace Money about another family, essentially doing that same thing for 2007.

It sounds very noble and anti-consumerism. It is admirable. I couldn't make that commitment, and I'm impressed that they can. But what I found most intriguing about the story was the following comment on the Marketplace Confessional, a section of the website where listener's can anonymously state their opinions about the show:
There was a segment about not buying anything new for a year. What is the big deal? I have not purchased anything new for almost 10 years. I am low income and have shopped at the second hand stores for years. My toaster, pots, pans, clothes have all come from these type of stores. Where I live we have a senior center that has a thrift store. If you take the time look you can find almost anything. Clothing is 25 cents per item or $1.00 per bag. There are many bargains to be had at thrift stores.

It made me remember how lucky many of us are. I can challenge myself to spend less and less, but I do it out of choice, not of necessity. Sure, I do it to fund retirement and to prepare for an emergency, or to pay off my student loan a little early. But if I'm feeling extravagant, I can buy a latte from Starbucks and it doesn't mean that I won't be eating dinner. I save money and buy things on the cheap because I want to, not because I have to. It is a blessing to have the choice.

I need to go through my apartment before I move and be sure to donate any unneeded quality used items to the second hand store so someone else can use them. Because they choose to or because the have to.

Friday, November 9, 2007

My first taste of Mint

Typically, I track my daily spending in an excel sheet. I use Yodlee to view my net worth and to verify my excel tracking. I update my net worth monthly in NetworthIQ. So when I heard about the new personal finance tool, Mint, I wondered what it could do for me that my other tools weren't.

I decided to find out. The first thing I noticed is that the website had a striking interface. It was quite aesthetically pleasing and very clean. I easily added all my accounts, but was surprised to realize that I couldn't include my 401k or Roth. As I became more familiar with what the site was trying to do--help you analyze your spending--I can see why they don't include it. But I'm still disappointed they don't! After it loaded my data, I could see all of my transactions for the past 2 months.
I think some of the "shopping" was groceries (Target). The "No Category" stuff was ATM transactions, and in the future, I'd want to note exactly where that cash went. It is pretty neat, even though Yodlee has an uglier version of the same chart. Also, I could click on these categories, and they would be broken down into even more well defined categories. I wish it included a piece for savings, but it seems like it only tracks what you spend.

Honestly, I am not yet overly impressed with Mint so far. It is sort of like Yodlee, but with a cleaner interface and less features. I am going to continue using it, and perhaps as it matures, it will grow into something more useful to me. (It is still in beta, and they have promised to rol out more features over the next few months. )

Tuesday, November 6, 2007

Wells Fargo's Response

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:
According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

Monday, November 5, 2007

Some newer ways to search for cheap flights

I've bought a lot of plane tickets this year. Well, five (and one more maybe in the works!), which is a lot to me. I would guess that plane tickets were my largest discresionary spending this year, and the previous year as well. I don't live in a major metropolitan area, so my flights always have a connection through a hub, and I haven't paid anything less $300 this year!

The usual methods
My usual method is to search ALL of the popular sites, and travelbuddy.com or travelzoo.com have useful ways to automate that. It might be overkill, since expedia or travelocity typically will turn up the lowest fares, but I don't want to miss anything. I particularly like those sites because of the ability to search a few days before and after your desired travel dates. (If you are a student, studentuniverse.com and sta.com are musts. Other sites won't find those deals.) Once I find the best deal, I look at what airline it is on, then go directly to the airlines site and search there. It is often the same price (or $5 cheaper), and it is always better to buy direct from the airline. If you miss your flight and bought a ticket through hotwire, you are basically out of luck.

I tried out Yapta
I heard about Yapta.com, and was intrigued with the idea of tagging trips and being emailed when the price drops. I tried to use it, but was ultimately disaapointed. First, it doesn't work with Firefox yet. I hate having to open up explorer just for that. Second, it doesn't work on Student Universe, where I get a lot of good deals. Most annoyingly, you are only able to tag exact flights with exact airlilnes, you can't just enter your dates for a general flight. It really didn't work out too well for me for searching for flights, but if you had already purchased a flight and wanted to try to get a voucher when the price drops, then it makes a lot of sense. I haven't been able to do that yet.

Farecast is another nice tool
A new favorite is FareCast. I did a search for my holdiay flight, and it came up with a total of $401. Now, that is a few dollars higher than the other sites, so it must add its own fees or something. Still, the airlines it lists as the lowest price agree with what I found. I would alwyas do a new search on expedia or somewhere else to verify, but it seems to have the right idea. For popular routes it predicts if the price will go up or down, and shows you a price history. It told me with 80% confidence that the prices will drop in the next 7 days. I waited a few days, and prices held steady, and the availablity of times to fly for the lowest price shrunk. I think it was a little off due to the holiday season. In general it seems like a good tool, but I'd be wary of predictions around the holiday season.

Using RSS on my iGoogle page
What I am liking the most about Farecast is that I can easily use the RSS feed and add it to my iGoogle homepage. I'm one click away from repeating the whole search. I think it will also show up if it does go down. Great! Unfortunately the RSS also only works for "popular" routes, and it is unlikely that most of my searches will be those routes.

Another nice iGoogle gadget is the Expedia fare calander. This would be the ultimate tool if it offered more airport choices. If I think I might want to fly to Chicago from Portland sometime in the next month, I could add this little guy to my iGoogle homepage, and see what the prices would be for almost date in the month. Thanks to this gadget, I have the option to fly to the city where I will be working next year and do some apartment hunting right after Thanksgiving, and at about $220, it will be the cheapest ticket I've purchased all year!



These tools are still a bit limited, but it a huge improvement from the days of travel agents and paper tickets. What I really want is a gadget that I can tag certain dates between two cities, and have an RSS feed when they drop. Farecast does this, but only for popular destinations. Does anyone know of a tool that will do this for all routes?

Sunday, November 4, 2007

Save $125 by sharing my "Biometrics"

My company came out with a new policy this year. We are required to either take a online personal health assessment and fill in data from our "biometrics" (cholesterol, triglycerides, etc.), or pay an extra $125 (per person) in health care premiums. They offered several sessions at work where they would take them for free, and the numbers were self reported.

Being young and relatively healthy, I wasn't opposed to the idea. Some of my middle aged co-workers were much more wary. Wasn't this a little bit too "Big Brother" for the USA? One could speculate where they are going with this approach. Next year, they might require those who have high cholesterol to reduce it, or else pay $125. Get your BMI within the healthy range, or else pay $125. Commit to exercise three times a week, or else pay $125.

If they do charge more for people who refuse to make an active commitment to improving bad health, is it fair? No one seems to dispute smokers surcharges anymore. The difference is that some of this is genetics, and can't be helped. I have naturally high cholesterol, and while I can improve it with diet and exercise, 2/3 of the number is made up by genetics. I would hate to be charged extra for something I have little control over.

The premise of the approach makes me a bit uneasy. However,it also seems like, done the right way, it might be something that will help alleviate health care costs for the country as a whole. You can't force people to chose healthy lifestyles, but one way to persuade people is to hit them where they will notice--their pocketbooks. If you could lower your premiums by improving your health, or having a legitimate reason why you can not improve, would you? Doesn't it seem fair that taking care of yourself would lower your premiums?

One immediate benefit of the program was that some people were made aware of their health status. This was particularly helpful for us young people who hadn't had our blood work done yet, but also for those who are a little afraid of the doctor. Sometimes seeing the numbers is enough to make a small difference.

I'm leaving my company shortly, so I won't know how this all will play out long term. Still, I wouldn't be surprised to see this trend continue in my future employer.

Friday, November 2, 2007

Unhappy with Wells Fargo (again)

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

Why college textbooks are a rip off

My freshman year of college, I believe I spent about $500 on college text books. Looking back, it was a foolish mistake, but I didn't know better at the time.

My first mistake was that I assumed that when a class said a text was required, they meant it. This turned out to be not true. Sometimes it was, sometimes it wasn't. Second, I bought books too late and there were no used ones left. Third, I didn't check the internet to compare prices.

Really, I think the college textbook industry is a huge rip off. If you've ever taken a class that recently switched from, say, edition 5 to edition 6, you may have noticed that the differences in the editions was primarily in the problem sets. Some texts may have major updates, but for the most part, the facts stay the same. Often times, the problems aren't even completely different, just altered in a minor way. How frustrating.

Not all professors played the game. One professor said that a text was required, but we could get any standard text relating to Control Systems we wanted. He pointed us to Amazon. He taught primarily from his lecture notes (and a text wasn't truly necessary), saving me about $100 that semester.

Also, why are we only given the option of hardcover texts? My boyfriend insists he loves hardcovers because they last longer (whatever). Shouldn't I have the option to easily purchase softcover to save some money? I did a semester in Hong Kong, and their book store didn't contain a single hardcover text for class. Not only that, but many of the students didn't buy the text anyway, as the professor often scanned the necessary material for the students. While that may violate some sort of copyright laws, not offering the softcover versions to US students seems unfair. In fact, I brought the two texts I bought (for a reasonable price!) in Hong Kong and sold them on Amazon in the US. I probably made a small profit, even though I priced them lower than the similar hardcover versions. Abebooks.com often offers softcover "international" versions of college texts. I used one from there for one of my graduate classes last semester.

At the end of the semester, the college bookstore offers to buy back your textbooks from you. This is another rip off. They try to tell you that buying and selling your books through the book store is "good for the college" because they donate money to various student groups. I'd much rather that they offer me a fair price for my books! If I can sell it for $70 on Amazon, and the bookstore will sell it for $90 in the store next fall, why on earth would I give it to them for $45?

I would speculate that this scam of the textbook industry trickles down to high school and elementary school, but since the books are provided for "free" (with tax money), people aren't as aware of it. I went to a private school and we had to buy our own textbooks. Rather than the bookstore running a scam to make profits off of used books, each family would put an envelop with a price inside the book they were offering to sell. The students formed a big line (I think you got a place according to a raffle number) and you would pick the books you wanted to buy. You'd pay the amount listed on the envelope, which was later given to the parent. Unless a class was switching editions, you could come out about even every year.

In later years of college, you could sometimes do a similar thing with classmates a semester ahead of you. These days, with facebook and other social networking sites hooking up buyers and sellers more easily, I wonder if anyone still shops at the bookstore.

Thursday, November 1, 2007

Frugality by way of procrastination

I bought some great black work shoes last week. Somehow, I fell in love with these Oxford Booties (left) by Marc Jacobs (that'll teach me to read fashion magazines). And no, I don't buy Marc Jacobs. Nor do I know what exactly I'd wear those with! I settled for a much cheaper pair of more workable (though less lovely) black booties (right). I still feel slightly like a supermodel in them, since they have 3 inch heels (and I'm already on the tall side).


What is my point? The black work shoes that I was replacing were purchased three years ago, and I wore them very regularly. In fact, they were falling apart, and should have been replaced a year ago. Can you see the missing piece on the bottom of the heel? How about the way that the toe is peeling off? They are SO trashed and unclassy! Why didn't I replace them sooner? In part, it was because I never saw any boots that struck my fancy and seemed worth paying the price for. Mostly, it was because I kept putting off buying them, thinking I'd feel like shopping for them in the following month. And my work isn't the type of place where anyone would care.

I also was intending on purchasing a beautiful white peacoat from Amazon.com. I probably looked at it at least 10 times over the last few months. But I never made the purchase. Tonight, I fully intended on sealing the deal and the coat has vanished from the internet. It looks like I'll just do without a white peacoat, unless I see something I love elsewhere.

These are a few cases where procrastinating has saved me money. Some other examples?
  • I hate doing laundry, so I make my clothes work for as long as possible. Do you really NEED to wash sweaters each time you wear them? I don't think so. Is this gross?
  • If I need to go grocery shopping and don't feel like it, I'll scrounge my fridge and eat whatever I have. I've been known to survive on cereal for several days
  • In order to save on toothpaste, I don't always brush. Just kidding, that definitely is gross!
Of course, this only works for some examples. If I'm too lazy to grocery shop and there seriously is nothing in the apartment, I just might grab some take out to please my stomach. Procrastination definitely is NOT a virtue.... but every now and then, it isn't as evil as people make it out to be.

November Goals

  • Resume tracking of spending!
  • Limit groceries to $30/week or less and restaurants to $75 total
  • Study for and do well on midterm for my grad class

Pathetic as it is, that is all I am going to do for goals. I have to buy Christmas presents starting this month, so I don't think I'll be able to save as much as I would love to.

In better news, my company announced it's profits for last quarter, and it looks like my year end incentive bonus might be about $3000 after taxes, and should arrive in very early December. That could be the final kick I'll need to meet my goal for 10k in my high yeild savings and 4k in student loan repayment!

Tuesday, October 30, 2007

Cosigning 23k of loans for my sister

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

October Goal Results

How did I do in October on meeting my financial goals?
  • Continue 401k and Roth contributions: Yes, but I'm considering reducing 401k back to 12% to flow extra into my savings. Most of my net worth increase is getting tied up in retirement accounts, and I need a little more in savings.
  • Limit groceries to $30/wk and restaurants to $75: Well, I didn't track my spending this month.... Ooops... But I would venture a guess that this is true
  • Contribute $400 to student loan payback account: I only contributed 300.
  • Contribute $1000 to HYSA: I don't think this happened either....
  • Finish writing post about student loans I volunteered to do for for Get Rich Slowly: Done

I really did quite poorly this month.... I need to set more realistic goals. I keep setting the bar too high, and then failing! I think that is better than setting the bar too low and always meeting them, but there has to be a happy medium!

To make myself feel better, here are some things that I did do in October:

  • Found a new job in California and negotiated salary
  • Had a performance review in my current job and was rated a 3-3 (it's a scale of 1 to 3 on two scales so 3-3 is the best)
  • Booked my ticket for the holidays, convinced my friends to meet in a city where we can have free lodging
  • Did decent on my graduate class midterm
  • Bought much needed new black work shoes (I'm stretching here!)

Obviously, my first goal for next month is to resume tracking of my spending. I'll have to think about the other ones.

Saturday, October 27, 2007

The high cost of coastal living

I spoke recently about how I got a job offer in California, making roughly 11k/yr more than I make in the Midwest. My company here pays pretty well for new graduates because there is a high demand for them. Even though they are located in a low cost of living area, starting salaries are not much lower than in high cost of living areas. Anyway, this raise will net me an extra $916 a month, which we will call $650 after taxes (optimistically?).

I've been doing a little math to see how this move will affect me. The biggest increase in monthly spending will undoubtedly be rent. I currently pay $575 for a small but relatively nice one bedroom apartment. I'm hoping to find something for $1000 (or less, but that seems unlikely) in California, probably equally small and not as nice. I'm secretly hoping that I'll have a roommate (my boyfriend) move in after several months, but this isn't something that has been discussed enough to count on, so I'm running the numbers without factoring that in. That is $425 per a month extra in expenses! That destroys a huge chunk of my "raise", making it an increase of a puny 2.7k/yr!

I will be able to take public transportation, but I doubt that'll save me any money since I currently live a 4 minute drive from my company and don't drive often. I suppose, one nice thing about a higher salary is that the company match of my 401k will be of a larger amount. If I want to go home, it'll cost me $300 for a plane ticket rather than $80 for a couple tanks of gas.

Luckily, the initial costs of relocating won't be too much of a burden on me. Not only do they give me $2000 for miscellaneous moving costs, they will pack and move my stuff, reimburse me for mileage and lodging and meals for the drive out there. With all of that, there still might be a bit of a hit to my savings, but not nearly as drastic as it could be.

I'm not making this move for financial reasons. It is for personal reasons, and for a desire to live in a big city, the dream of California living. But the impact to my finances is still there, and I hope that it won't slow my progress too far.

Thursday, October 25, 2007

Financial Disaster (not me)

My parents took out a $15,000 HELOC loan sometime last year in order to make some updates and repairs on their house in preparation to sell it. I thought it was sort of a bad idea and thought they should just save up some cash and pay for it as they go. At least for part of it. I think I bit my tongue, because it isn't really my place to offer unsolicited 'advice' and judge the actions of my parents. I did suggest that while they were waiting to spend it, they put it into a high yield savings account rather than a normal account, but beyond that, I stifled my opinions.

My dad has a bit of a sordid financial past and has difficulty managing money, so my mom was the only one with access to the account. But the repairs didn't happen. My dad kept putting it off, and putting it off, and I was wondering what the hold up was.

Apparently, my mom used the same PIN that my dad uses for several of his accounts. He was borrowing money from the account to pay some other bills (and I still am confused as to what bills these are). He finally told my mom, and then went to Alaska (I know, bizarre) because there was a lot of work for him there making a lot of money in a short amount of time. In fact, he's been there less than a month and has paid back whatever he took (I'm not sure how much it was).

I finally found out today, from my sister. My dad was supposed to tell me himself, but he didn't. I understand him not wanting to tell me, but it makes me think I need to change my attitude. I don't want to be judgmental (though it can be hard to hold back at times), I want to be helpful.

It's hard to offer suggestions to your parents. Suggestions that seem so obvious to me. For example, if you can't pay your bills then you don't get to go on vacation to the Bahamas. (Yes, the really are going. Though the trip was planned before this came to head, and they NEVER go on vacation, it still seems extravagant.) Or, open a Roth IRA and make contributions automatic. Cut up your credit cards if you can't manage them. Track your spending, at least for a few months, just to see what is going on. These are the basics!

Secretly, I considered pulling their credit report without their knowledge. I know their SSN's. There generally are some security questions that I'm sure I couldn't answer, but besides that, it's just a horrible and evil idea. It just isn't my place, even though I want it to be.

Someday, they won't be able to work. What do they have saved? Is it enough? How would my dad ever manage his finances without my mom watching over? Is it too late for him to learn? These are things that I worry about. Maybe that is why I have a personal finance blog--so no one ever has to worry these things about me.

Tuesday, October 23, 2007

Personal side of Federal Student Aid

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.

Monday, October 22, 2007

Say few sentences for an extra $5000!

This is a money making trick that doesn't work except in a very special circumstance--negotiating a job offer.

I'm in the process of relocating to California, primarily for personal reasons. I had an interview last week and received the official offer today. My current salary in a low cost of living midwestern city is about 56k. I was offered 65k to move to California (plus relocation costs!). I was excited to get the offer, but I immediately asked if that was negotiable. I had anticipated an offer in the 70-75k range. (Some random cost of living calculator states: To maintain the same standard of living, your salary of $56,000 in XXXX should increase to $103,122 in XXXXX, California. I think that is a bit high, and certainly less than I would expect them to offer me, but at least, a point of reference.)

The HR rep seemed surprised (which surprised me!), and said something like "Well, it is a 15% percent increase, but if you have justification, I can talk to the hiring manager."

Luckily, I wasn't negotiating for the sake of negotiating--I had my reasons ready to go:
  • The position is typically entry level, I have 1.5 years of directly related experience and am on the verge of a raise/promotion at the end of the year
  • I am 1/3 of the way done with my Masters Degree
  • I already have my security clearance (something that costs them several thousand to get!)
  • The cost of living is significantly different
The HR lady then called the hiring manager, and then called me back about 10 minutes later. She only could offer me an increase of salary to 67k, but they would throw in a 3k signing bonus. She reminded me that performance reviews happen early in the year, and that there would be tuition reimbursement.

The offer is much more attractive. I got enough money to fully fund a 2008 Roth IRA, just by listing a few reasons.

I have a phone interview tomorrow with another company for a different type of position. I think that the offer I already have seems like a more appealing job, but I want to see what this other position really entails.

This is the first time I've negotiated salary, and I'm quite proud of myself!

Saturday, October 20, 2007

Long Term Plans

I haven't written a post at all this month. I thought I would have more time for this, but I haven't been making it a priority. I just finished writing an extensive entry on student loans for JD at Get Rich Slowly. It was very rewarding, and reminded me of why I started this blog in the first place.

I still am not sure if I will meet my year end money goals. If I don't, I'm not incredibly worried, because I still made a TON of progress this year. Since I graduated in May 2006, I've mostly been setting up the foundation of a good financial future. I am still in the beginning stages, and I've started to think about what might come next. Long term goals have eluded me, but once the foundation is built, I want to have a plan for what do to next.

First, I would like to max out my 401k. This year my personal contributions will be roughly $8,000, far short of the allowed $15,500. Next year, I should be relocated to a higher cost of living area. Ironically, I believe that will allow me to save more of my income, because I plan to leave the percentages the same. This also will mean my employer match will be higher. Still, it may take a couple years before maxing out my 401k and my Roth concurrently is possible.

Second, I'd like to start saving for a house downpayment. This is very much a long term goal. I don't expect to be purchasing for five years, maybe more. Someday though, I would like a house, and I would like to be prepared for it.

Last, I'd like to start out a non-retirement investment account. This won't be for "play" money, but for building wealth that I can access before I reach retirement age.

I can't make much progress on these goals while still building an efund, paying student loans, and saving up for a car, but it is nice to look and see what is on the horizon.

Sasha

Monday, October 15, 2007

Was I poor?

Throughout my life, my sense of where I fit in financially has teeter tottered.

The early years
When I was young, we lived in a trailer court. Am I embarrassed of this? It depends. Some people really do look down on it, so I don't advertise that fact until I know a bit about a person's perspectives. As I get older, it seems to matter less.

I remember two things about the trailer court. First, I remember playing in our yard. We lived on a dead end street at the end of the lot, and my Dad was allowed to use whatever land he wanted to mow. So we had a huge yard with a homemade swing set, a sandbox, and a nice hill for our slip and slide. I remember the day my dad mowed his name in huge letters in the yard. We were delighted.

The other thing I remember is when a naked man was running through the trailer park. I don't specifically remember seeing him, I don't remember why he was running, why he was naked. But I do remember my dad taking him inside our trailer, giving him a shirt and some pants, and helping him on his way. He worked at a golf course and gave my dad free rounds after that.

When I was in third grade, we moved to the house my parents live in now. It is a big house, probably bigger than we needed, in a new development. They did a lot of the work themselves (my dad and his friends). For the rest of grade school and jr. high, I never felt that I lived in a somewhere "less" than my friends.

High school
I transfered to a private high school in ninth grade, and the insecurities were back. We had enough money, but definitely less than my classmates. I didn't have a nice car. Our house was less impressive than many others. Several of my classmates had pools (a big luxury in a northern midwest state!), everyone shopped at Abercrombie, and people had a lot of nice stuff.

Still, my parents didn't seem to deprive us. I almost wish they did, for their sake. We did have crappy cars, but were allowed to buy brand name clothes. My parents paid for a trip to Germany, not to mention the tuition for school (though there was a discount because my dad did some electrical work for them). Even though we had less than others, we still had enough.

The scary years
During this time, my dad borrowed a healthy sum of money to start his own electrical business. I still am not clear on the details, but it didn't work out as well as planned. There were some issues with him not getting paid for a large job, some issues with the person who lent him the money, and... well, starting a small business is hard. I'm not sure it was planned out very well. It was hard times, but I wasn't aware of it until a little later on. It ended with my parents working with someone to file a Chapter 13 bankruptcy. They got to keep their possessions, but had to pay a lot of money back to the creditors. I think the payments were something like 3000 a month for 5 or 7 years. My dad became responsible for those payments, and my mom paid the rest of the bills.

Surprisingly, I don't remember there being major cutbacks in my life. We continued to drive falling apart cars, but everything else seemed to go stay the same. Still, it was a scary time for me. Every so often, my dad would fall behind on the payments, and someone would come to our house with a certified letter. I must have opened one once, because I somehow knew they said something like "pay now, or we will be forced to reconsider this repayment plan." More than once, I cried about this, even once I was in college and not relying on them. I was scared for their sake and couldn't understand how they could have let this happen.

But they made it through, making their last payment sometime last year. It actually helped me out a lot, surprisingly. Because they were paying so much money towards the debt, I was able to qualify for actual GRANTS for my college for several years. Free money that I never had to pay back!! So, if you can't help your kids pay for college, consider going bankrupt right as they are entering. (No seriously, don't.)

The split
During college, you start to separate from your parents both emotionally and financially. They generously helped me get a decent car (about 3k from them and 1k from me), paid my car insurance and repairs, health insurance and helped out with some minor expenses on occasion. After living on my own for several years, they let me stay at home rent from for a few semesters so I could save money. But for everything else, I was on my own.

After graduation, the difference was even more marked. I'm completely financially independent from them. Now, I feel very "rich", even though I only have about 8k net worth. The feeling comes from knowing I'm doing the right things with my money and knowing my future looks bright. To me, feeling poor means being scared about money. I don't think I'll ever feel "poor" again.

As for my parents, they are doing pretty well these days, I think. I worry about their retirement. The bankruptcy involved an IRA rollover (I know this only because it affected my financial aid), and I know my dad has no retirement accounts as of today. He does have a pension plan through his union, but he also hasn't worked for the union regularly for about 10 years! I asked him about it, cautiously, and he said his house was his retirement. I commented I wasn't sure about that plan, but let the subject drop. I would assume my mom is still contributing to some sort of retirement plan, but I'm not sure of it. I hope to bring it up with them one of these days, but it is a hard step to take.

I don't think I was ever poor in the true sense of the word, but I don't feel that I was exceptionally privileged either.

Friday, September 28, 2007

October Goals

This months goals are pretty basic, nothing fancy, but will still require some good hard savings.

1. Continue 401k and Roth contributions

2. Limit groceries to $30/wk and restaurants to $75

3. Contribute $400 to student loan payback account

4. Contribute $1000 to HYSA

5. Finish writing post about student loans I volunteered to do for for Get Rich Slowly.

September Goals Results:

September Goal Results
  • Continue 13% 401k and 100 to Roth IRA
I actually upped it to 15%. Why? Because it is money I can't touch, and I really want it to grow.
  • Replenish travel fund with $100 (and likely, drain it again to buy a ticket to LA for october)
I did contribute 50 to it, then bought my plane ticket.

  • Contribute 450 to student loan payback account
I was able to contribute 500.

  • Contribute 875 to HYSA (275 more than autodeposits... slighlty cheating since i expect some of that to come out of todays paycheck)
Well. I am certain this didn't happen. There has been a change in the way I use my HYSA, but the balance has only increased by about $200. Ouch. It was a big spending month, unfortunately.
  • Spend less than 100 on restaurants and less than 30/week on grocery.
YAY, this one I managed. Restaurant was about 90, and grocery was right on track. I'm going to move restaurants down even more next month.
  • Finish and send in grad school application, stay up to date in class
Grad school application has been submitted, I'm a little behind in class, but will but up to date by Monday.

I really wasn't that sucessful this month. I had some unplanned spending (new camera, car repairs) and some expensive planned spending (plane ticket) and bought some clothes at Gap Outlet. On the plus side, I sold about $100 worth of book (mainly, a $70 textbook) on Amazon, so that balanced things a teeny bit. But still, let's hope for a much better October!

Monday, September 24, 2007

Extra money

I sold a few things that were only cluttering my life on Amazon and earned almost $40 (after fees). Not too impressive, but then again, $40 I didn't have before! I also sold some clothes to a consignment shop, but they only took 4 things and paid me $20. Again, it is money I didn't have before, even though the amount isn't all that impressive.

It is fun earning extra money, even though it is on things I once paid much more for.

In downfalls, I spent about $100 at Gap outlet this past weekend, not to mention a few birthday gifts I had to purchase. Still, my net worth is growing each month, so I'm doing something right.

I increased my 401k contributions from 13% to 15%, with the understanding I probably won't meet my savings goals for my regular accounts. Depending on the year end bonus, which I hope to be around 3k after taxes. It might be wishful thinking, but that would really be a good boost to close out the year.

My current task is figuring out auto insurance... I'm being kicked off my parents plan!

Wednesday, September 19, 2007

Hobbies

As briefly mentioned in my last post, I signed up for a photography class, once a week for 2 hours for the next 8 weeks. My $200 point and shoot camera is most likely the least expensive in the class. If I ever get seriously into photography, I will need an SLR, but I specifically chose a nice pocket sized camera because once I'm done with the class, it'll fit best into my life. The class only cost $60, quite a bargain.

The guy standing next to me told me I will be able to buy myself a nice new camera with my Christmas bonus. My savings goals have been derailed by some unexpected expenses, so it is unlikely I will splurge on a $500-$700 camera, especially since I'm really just an amateur.

There is nothing wrong with spending that much on a beloved hobby, but I was shocked at the number of people with really NICE cameras and no idea how to use them. The instructor asked if we knew how to control the fstops, and a lady with one of the nicest cameras claimed she had no idea. Wow.

Between work and graduate classes, I don't have that much time for hobbies. My most expensive "hobby" is traveling, but I don't spend time doing it regularly, so it may not qualify as a hobby. Perhaps it is simply a passion. I also enjoy writing and personal finance, two very frugal hobbies! I enjoy reading, which can be frugal when I don't insist on owning the books.

I also claim that cooking is a hobby, but I can be quite a wreck at it! I tried to make instant oatlmeal (with flaxseed, perhaps that was the issue?) in the microwave, walked away, and came back to find this:
What a way to start a day. (But, I did eat what was left in the bowl, and it was just fine.)

Tuesday, September 18, 2007

The price of carelessness (and vacation)

I went on a long weekend to visit a friend this past weekend. We didn't do any major vacations this year, so I am enjoying several little vacations. Spending money on travel is something that usually doesn't pain me, as friends and new places are something I value highly. The trip was pretty inexpensive, considering plane tickets out of my city are rarely less than $300. After that, the costs were minimal.

Cost of vacation:
$309 - plane ticket
$5 "breakfast" at airport (is potato chips and iced tea really breakfast?)
$11 lunch for me and friend
$15 a rather disappointing sushi dinner.
$9 brunch at a really cute organic restaurant
$10 magazines at the airport (Hmmm, sort of regret this one!)
$5 for Pride and Prejudice (A good deal for a book, and one I want to read anyway)
$5 lunch at airport
$20 parking (could have asked a friend, but the convience was worth it to me)

That is a total of $384, which is not bad at all. Our activities were mostly outdoorsy free things, so that was inexpensive, plus that is also more enjoyable to me.

The cost of carelessness
The previous summary neglects to mention the fact that I left my digital camera on the airplane. I tried to chase it down, but I am now certain it is lost into the abyss. It was a nice camera--a Kodak Easy Share Z740, with 10x optical zoom --but at the same time, I sort of hated it. It was too bulky to easily fit into my purse and sort of embarassing to bring out in social settings. It was a gift from my parents, and while it took amazing pictures while I was abroad last year, I did want a smaller one. Still, I would have waited. And kept this one for more professional shots. Looking online, it sells new for $279, which is painful to know. I'm not even counting the 1G memory card that was inside of it.

I also recently started a photography class, so waiting to buy a camera was sort of out of the question. It was Monday, I needed one by Tuesday at 7:00. I did some research and quickly determined I wanted a canon SD850, a subcompact which sells for about $350 in local stores and just over $300 online. I also looked at the SD750, SD1000, and some in their A series (not as small). I ended up settling for the SD1000, at $250 in local stores. I didn't think I could wait for shipping, but at 5:27 pm, I noticed that amazon.com said if I bought it in the next 3 minutes, I could have it the next day. Even with shipping, the total was only $225, and I didn't have to pay the sales tax I would have at Target or Best Buy. I had about 20 seconds to think about it, so I did it. I then found a 2G SD card for $18, which is on the way (slowly, due to free shipping)

In summary:
Cost of vacation - $389
Cost of carelessness - $243

And the vacation money was much much much more fun to spend. Ug.

My next major expense is yet another plane ticket... It looks like it will be $315 for me to fly to Los Angeles to visit the boyfriend for a long birthday weekend in October, so I estimate about 400 total, but I might be low-balling it. I'm going to do better with the airport purchases by planning ahead, and maybe have a friend to drive me to the airport (though $5/day really is a bargain).

After that, I would like to say, no more vacations for months (they eat into my savings goals), but then it is Christmas season (present time), and we are considering new years in Las Vegas. After THAT, no vacations for quite some time!

Monday, December 24, 2007

"Non-baller"

This is the first year I've ever made "big" New Years Eve plans. I'm going to my future home of LA and a friend from my semester abroad is coming with two other of her friends. I opted out of the original plan, Las Vegas, because I didn't want to spend that much money. In LA, we can stay with my boyfriend (crowded, but free!) and save a ton of money on lodging.

I knew when I signed up for this that this particular friends isn't afraid to spend money. Still, it wasn't a big issue, and we spent a lot of time together on study abroad. She usually just would spend in line with whatever I was, and one night drunkenly confessed "It is good when I hang out with you and E, because I spend less money. You two are my non-baller friend!" I didn't take it as an insult, though some might! Anyway, sometimes it stinks being the frugal one, but at the same time, I won't change my values based on peer pressure. And frankly, when we were still in college, I simply couldn't afford to.

Anyway, I recently got a message that we were considering going to a fancy club on new years at $150 + fees to buy tickets to get in. It does include all drinks and honestly is probably what a lot of "trendy" clubs are going to run in LA. But there is no way that I'm spending $200 for one night! I wouldn't be sad if we went somewhere less trendy for New Years (some are free cover, or $50), because I think the most fun part is just going to be hanging out together. If they want to celebrity sight, we can do that on less expensive nights!

She also has been requesting my presence at a fancy steakhouse for dinner. I do love food and don't mind spending a little on deliciousness. However, I don't even really care for steak, and it just doesn't make sense to me. I won't hesitate going out for delicious sushi now and then, but to spend so much on something I don't even love just is silly.

At the same time, there is a small part of me that wishes I could live a life of excess and spend the money. Really, I *could* afford it. It wouldn't put me into debt or wreck my savings. But I just don't value a trendy club enough to spend that kind of money for it. I'm not opposed to spending money (though $150 would be painful for anything) but it has to be something that is a little more in line with what I think is important. A night of fun is important, but we could have almost as much fun somewhere else.

Thursday, December 20, 2007

Failed attempt to save $700

I'm relocating to Los Angeles in January, and my company will pay for up to 2 weeks of "temporary housing" at a hotel while I find an apartment. I originally got a move in date for my new (expensive) apartment of January 15th, and I decided to push it to February 1st in order to save half a months rent. Unfortunately, the apartment complex did not like my plan. I wasn't even able to negotiate an extra week! I'm really bummed out about this, because it is essentially $700 out of my pocket and into theirs. Perhaps I should have been more pushy and tried harder. I still don't think they would have budged.... Completely lame!

I am feeling nervous about the ammout of money flowing OUT lately and I really wanted to save that $700....

Wednesday, December 19, 2007

Christmas shopping... for myself?

I went out and about today and completed the majority of my Christmas shopping. I picked out a really cute sweater/shrug and tank top for my sister and bought one in another color for myself as well. I usually never pay full price for my clothes from stores like Express, and I feel horribly guilty about it. Anyway, I went back the store and returned one sweater, but with the idea that I'd come back and buy it with the coupon they awarded me (which isn't valid until tomorrow).

Now I'm having doubts. First, I really should return the tank top because it is over priced, even for a gift. Second, I shouldn't buy myself a set. Should I? If I buy myself a set, it'll cost $135 for both of us, so about $68 each. Or I could spend $80 total (what I currently have spent) and not buy myself one. Though the "gift" budget was only supposed to be $50 for sisters. Or I could spend $105 and get two sweaters but only one tank top.

I obviously do not need the sweater. I recently got to buy some clothes from H&M using a gift card I received for my birthday. On the other hand, I rarely buy myself new clothes, and when I do I don't buy anything over $30 usually. I think in my head, "I deserve this! I got a big bonus this year and haven't spent any of it on myself." Which is true. . . But that doesn't mean I need to buy this. Perhaps I would get more enjoyment out of saving the $68. Or spending it on something else. I am going on a nice new years vacation where plenty of spending will happen. I also have a hair appointment tomorrow, which usually runs me about $110 (including tip) if I don't get my eyebrows waxed...

I think I'm going to punch in my numbers for December spending so far, and from there decide if I should keep it or not...

Do any of you agonize so much over an $80 purchase??

Monday, December 17, 2007

Evaluating job offers

I'm relocating from an inexpensive Midwestern city to Los Angeles. I have received two very similar job offers.

The first offer came in at $65k with a relocation package that included a $2000 tax assisted lump sum. I thought the offer was a little low, so I negotiated $67k and a $3k signing bonus. The pay includes up to 7% in 40k matching/contributions by the company and 12.5 days of vacation the first year. Bonuses were not explicitly mentioned, but I would imagine they do some kind of incentive bonus.

The second offer came in at $69k with a very similar relocation package (except $1000 non tax assisted lump sum rather than the $2000), a $3k signing bonus, and 10 days of vacation the first year. They also explicitly mentioned sick leave, at 8/hrs a month. They match up to 6% of 401k contributions, and have some sort of pension plan. I assume you have to work there some minimum amount of years to be vested in the pension. They mentioned bonuses when i was on-site, which this year was "ten days of pay."

My current job will be paying about $58k as of next year. I get 15 days of vacation per a year, and sick leave is not really an issues. You are encouraged to make up any hours that you are sick, but it is not an absolute requirement. I get 6% in a 401k match. I also got a 9% bonus this year.

All things considered, my current job is really the best financial deal, taking the cost of living into consideration. The pay increase is nearly a 20% raise. However, my rent is going to MORE than double, and I will be paying an extra $9,600 a year in rent. That practically wipes out the entire raise! The vacation is better, the bonus is better, and I would most certainly get promoted to "Grade 2" next year. I'm not sure how long it will take me at my next company.

However, the whole point of the job search is to relocate. So, which of the other two is the better offer?

Despite the extra relocation money from the first company (and the extra 2.5 days of vacation) the hard salary numbers will be what my future salary will be based off of. I think the second offer is better, though I'm going to miss that extra week of vacation. Is vacation negotiable? The second offer is only slightly better, but the job itself is more appealing, which really seals the deal.

My next thought is, should I negotiate the second offer? Am I worth more? I don't want to come across as arrogant to the company--I'm not even two years out of school, and I didn't go to a fancy big name engineering school. But if I am worth more than what they offered, I don't want to sell myself short. I don't know. I think it is a fair offer. I liked the company a lot. But the boyfriend insists it doesn't hurt to ask. Thoughts?

Sunday, December 16, 2007

Tis the season... to donate half of your income?

Many people talk a lot about giving to charity, especially this time of the year. I personally do not give a very large percentage of my income to charity. When friends or acquaintances are requesting donations for a cause, I always donate something. Other than that, I must admit to being a bit miserly, something I would like to change. (Or more honestly, something I say I'd like to change, but haven't made any real progress on changing.)

I was reading a celebrity gossip magazine (and I'm not ashamed to admit it!) this evening, and came across an article about people or families who gave away over 50% of their income or net worth. The featured people were not anyone special: a woman who made just $16k last year, a man who earns $200k and gives away a whopping $162,000 of it, and another woman who inherited over half a million only to give it away. Check out Bolder Giving to read about more people who are extremely generous. Their mission " is to inspire us to give at our full potential by providing remarkable role models and practical support."

I am not giving to my full potential. It isn't though I'm spending selfishly, I just have other goals that I'm putting ahead of charity. Building up my emergency fund. Paying off student loans. However, these goals aren't mutually exclusive to giving to charity. In my defense, I volunteer about 1 hour a week at Big Brothers Big isters. Still, I feel that I could give more. So, what am I going to do about it? I will start small, and donate 1% (minimum) of my income next year. To those who tithe (or those who are simply more generous than I), a mere percent may seem laughable, but it is more than I contributed this year. It is a start, right?

Friday, December 14, 2007

Peek at my 2008 plan

Here is my sketched out plan for 2008. I'm moving to an expensive city, but I took the difference of the salary and the rent increase, and I'm coming out a little ahead. Of course, there are other factors.... Anyway, savings are blue, if you can see the different colors.


This doesn't include a signing bonus or any leftover relocation perks, but those will just go automatically into savings and other initial costs of starting over (apartment deposit, etc.)

I'm not sure if I really will only spend 200 on groceries and 100 on restaurants, but I'm sure going to make an effort. I also have to start paying my own car insurance and secure renters insurance. I have no idea what the cost for those will be, but I allowed 100/month. I have $200 of unbudgeted money monthly, and $100 for entertainment--I really spend very little on entertainment currently, so we'll see.

Ah, I love planning. Or perhaps I'm really just procrastinating on finishing up my take home final for my graduate class.

Thursday, December 13, 2007

Unethical

I accepted a job for January 2008 back in early September. This may come as a surprise to anyone who noted that I was in Los Angeles last weekend interviewing for a (different) job.

To my credit, I did stop applying for jobs when I accepted my first offer. Company A just moved very quickly, while Company B moved very slowly. I sought advice of those in industry (an experienced mentor) and others who love me (parents) and was told that I should go on the second interview, and really, do what was best for me. If nothing else, I could use the weekend to find an apartment.

I have not received the formal offer from Company B, but notification that HR is putting something together. I anticipate it will be similar to the other offer--at least as good, maybe slightly better.

Here is the thing: I want to work for Company B significantly more. I met a lot of great people and liked the atmosphere a lot more. However, I have committed to Company A with a start date of late January.

I do know it is unethical to back out of my first offer, but I think I will do it anyway. I will allow myself this mistake in my career, and will never do anything like this again. I will keep myself out of this position. It is a bad place to be in. At the same time, I have to do what is truly best for me. If the company lost a contract tomorrow, they wouldn't feel bad about calling me up and saying "Never mind, you aren't hired". Still. It is not something I am proud of. I just want to say, I'm not asking advice over whether or not to do this, just HOW to handle it.

I'm drafting a letter of "resignation" (or rather, "renege-ation"). For the sake of getting the information to them as quickly as possible I probably will man up (woman-up?) and call them, as unpleasant as that may be. Ok, let's be realistic--I probably will send them an email? I will also send a formal letter (I think). I don't know how to handle this situation, because it is not the types of situations I usually get myself in.

Please offer any suggestions on how to handle this. Here is my first draft:
With great apologies and regret, it is necessary to inform you that I will not be starting employment with Company A this January 2008. I understand that backing out of my commitment is disrespectful to you, and I have wasted the time of you and your company. I am truly sorry for this and will not make this mistake again with any company.

I do not wish to start my career with Company A only to leave for something that is better fit after a short period of time, and waste more of your time invested in me as an employee. With this in mind that I have chosen a different path. My choice was not for monetary reasons, but simply I felt that the job was a better fit for me. Of course, I stopped applying for jobs at the time of my acceptance, however the process moved very slowly with the second company and I'm only now finalizing my decision. I understand that accepting an offer that I was not entirely confident in was a poor choice on my part. I should have, at the very least, requested more time to consider all my options, before making a commitment that I could not keep. Again, I sincerely apologize for the inconvenience I have caused for you.

Thank you for the time you have already spent on me as a candidate and for your gracious offer of employment. I can not apologize enough for backing out of my commitment.

Sincerely,
Me

Planning for 2008

I was hoping to wait until 2008 to talk about my goals and plans for 2008. However, I'm a planner to the extreme and I can't help myself from starting now.

There are a lot of unknowns in the first part of next year. I'm moving to a new city with expensive rent. While I have one job offer, I'm waiting on the one that I want more (tomorrow? Very soon!) so I'm not sure what my salary will be. Still, no matter what, there are some goals I can set right away, and adjust as needed.

First, I want to max out my Roth IRA again. That is about $415 a month of post tax money to be directed into savings immediately. In my first year and a half of working, I've already saved about $20k in retirement accounts. As my salary increases, I'll be able to contribute more each year. I think I'm on track to have a comfortable retirement. I have a vague idea of retiring early, but still am not ready to make a plan for that goal.

In that same vein, I want to contribute at least 10% to my 401k. This is pretty painless and will get me a full match of (probably) 6% total from my company. Based on my first job offer, that will mean I'll save about $15000 in 2008 for retirement. If I feel that I can afford it, this will be increased, with a stretch goal of 15% towards 401k.

I also want to pay a little extra to my student loan account. My goal is only going to be $1000 extra this year. I'm required to pay about $1500. In 2007 my goal was $4000 total. This is really cheap money so paying it off is more for the mental benefits. That means my month payment will increase to $215, though I'll likely pay it in chunks rather than automatically every month. If any of my goals are faltering, this will be the first to go, as it is the least cost effective.

Next, I want to continue (but decrease) to auto-contributions to my emergency fund, and really turn it into an emergency fund. I have a general purpose high yield savings account which is my efund, but I don't treat it as an efund. It's just a savings account with a continually increasing balance. I think contributing $50/week to this account will be sufficient. I pretty much grew it to 10k from scratch this year, so it is a big decrease. I'm excited to have a base fund so I can focus on other goals.

Now... the "boring" goals are out of the way!

For my fun goals, I want to add $25/week to my "travel" fund. If I have extra money, I'll increase this amount, but it is a start. I have a travel fund earmarked, but it has had really stagnant growth. I also want to start saving up for a newer car. My car has about 75k miles on it and will last another couple years... but I need to start building up some money to purchase my next one. I want to pay for my next car in cash, and I will be spending at least 10k, maybe more. If my budget works out, I'd like to save $100/week for this, giving me just over 5k by the end of the year.

So that is it! These goals will be tweaked once I'm settled into my new apartment, new city, and new job.

In unrelated news, they are announcing who replaces my current manager at work today. I hope they promote from within the group and that Bryan is it. I think that he would have the job if he wanted it, but I'm not sure he is interested in management.

Wednesday, December 12, 2007

To Do: "Quit Job"

This was not only the most satisfying thing to put on my to do list, but also the most satisfying to check off!

Actually, I really like my job. They don't discriminate based on age and experience--if you are good, you will be given good tasks and responsibility. In my short time there (1.5 years), I was able to be recognized as a "high performer" and given a key role on my team. Which is really great--you don't have people forcing you to "pay your dues". If you can do the task, your dues are considered paid and you are thrown in there. There are several young employees (under 30) that have really big leadership roles in our group, and I don't think I am too far behind. Besides that, I have gotten to work on challenging and rewarding projects and like my coworkers.

I'm resigning because I'm relocating to Los Angeles (for personal reasons) and the branch in that area really doesn't do any interesting work. I was very nervous about putting in my notice, until my manager informed us all that he had been promoted and would be moving to a branch in Texas. That made it easier for me. I set up a meeting with my manager, which I titled "Short Discussion", which I assume made it obvious what it was about. I don't usually schedule meetings with my manager, and a vague title usually means the employee is quitting. He said he knew when he got the invite.

So, I resigned, effective January 11th. I gave them about a month's notice, which maybe is more than "standard" but I felt it was appropriate, considering we get a week and a half off for Christmas.

Today my manager presented me with the idea of working remotely from Los Angeles, with a salary differential for cost of living figured in. I was really surprised by the idea, and felt it showed they really appreciate my work. Ultimately, it probably won't work out. I don't think I'd do well working in isolation. At this point in my career it is best for me to be surrounded by really brilliant people and learn as much as possible from them. Not to mention, how would I meet new people if I worked alone? I expressed my concerns, and really, I don't think it would be best for the company either. He was fine with that, but said he just had to discuss it with me.

Tomorrow, we can tell the rest of my team.

Tuesday, December 11, 2007

My Credit Cards

This blog has been exceptionally quiet (it never really is all that happening over here anyway) this week. Not only did I send my laptop in for repair (under warranty still), but I was out of town from Wednesday night until late Sunday night (I got to bed at 1:30 am). Perhaps more to come on that "vacation" later. I actually have a lot of potential topics stored up in my mind. For now, I want to talk about my credit cards.

At work, we are all chipping in for a going away present for my manager. My coworker is collecting five dollars from us all, and complained that none of the "young people" had cash. I asked her if she could just accept credit, but no such luck. Not even Visa.

One of my two primary credit cards is a Chase Freedom Visa card. One reason I chose this card was because it was a "Visa Signature" card, and any electronics I buy automatically have a doubled warranty. Sweet. Another cool perk is that any rental car I rent with it will automatically get CDW coverage, which will come in handy when I rent a car over New Years. The cash back bonus is alright, but I really don't spend that much for it to be exciting.

What has annoyed me about this card is the constant mailings encouraging me to sign up for costly services. More than once a month I get an envelope from them to sign up for some "Credit Protection Plan". In case I ever fall on hard times, this service will allow me to suspend payments for some period of time. Or something like that. Every time I call them for any reason, they push this service. It costs something like $0.89 per a $100 balance, so it isn't much, but still. They also said if you don't "carry a balance" it is free. After questioning this further, I learned that it wasn't exactly true. You can't just pay your balance every time you get a statement, you have to pay your balance BEFORE the statement is calculated for it to be free. Anyway, it is annoying. I don't want it. I don't need it. I have an emergency fund of almost 10k (yay, go me!) and know how to manage my money. Yesterday I opened some "check" that I deposit, which will enroll me in some $90/year service. I'm not sure what the service is, only that I don't need it.

My other card is a Discover Open Road card. Discover seems to have has a bad reputation, but I think they are great. The cash back program is solid (and you can pick what one best suites your life). They also let you choose your credit card design from a HUGE selection. Not that it is REALLY important, but where else will give me a flamingo pink credit card with an "S" monogrammed on it? Love it! Of course, you really can't get by with only a Discover card. While most places accept it, there are still a few who do not. Also, I opened a second Discover card once (to use a 0% balance transfer offer) and they made a huge headache about closing it. The first time I tried my call was simply "dropped" (I personally think they hung up on me because then the customer service rep gets to count it as a customer that was not lost), and the second time I had to argue for several minutes about why I wanted to just close it. Anyway, other than that, Discover has been very nice to me since I first got their card as a college student.

Credit cards have always been a helpful tool for me. I've never been late on a payment and never been charged a fee. I typically get a couple hundred dollars in cash back bonuses each year, and they are very convenient. Still, on principle, I think credit card companies stink. They charge outrageous rates and push to sell useless services.

Saturday, December 1, 2007

November Goal Results, future goal plans

I am not excited about this post, and considered not writing it. However, I need to be accountable to myself, so here are my results for November

  • Resume tracking of spending! I didn't do this, and filled in the second half of November today. There is a $44 charge at Target that I can't remember what I bought. I think it was a mix of clothes and groceries. This is why I need to track as I spend!
  • Limit groceries to $30/week or less and restaurants to $75 total I just barely met the restaurant goal, and only spent 100 on groceries. Of course, I spent a several days with my family for thanksgiving (food provided) so that made it easier.
  • Study for and do well on midterm for my grad class. I did pretty well. I could have done better, but I scored well enough to be satisfied.
December is a hard month to set goals for. I know I'm taking a vacation at the very end of the month, which will involve extra going out/eating out costs. I have to do a lot of shopping, so the "gifts" category of my budget will be large this month. Then in January I'm moving cross country, and I have no idea how things will shake out there. In light of this information, I don't think I'm going to do month goals until February. There are too many unknowns to think about, and I don't think my goals could be very accurate. I just will track my spending and be sensible in spending. And also, to find a place to live in my new city. Still, that really isn't a goal, but an absolute necessity!

Friday, November 30, 2007

November Net Worth

This month was quite unimpressive--an increase of just $132! There are a few reasons I have to explain this. I was sure I'd hit the 10k mark, but I missed... by four dollars!
  • Of course, the stock market uneasiness. Between me and my company, we contributed about $1000 this month, yet the overall balance increased by just $300.
  • Also, there was a slight student loan mess. I was charged some back interest which was capitalized into the loan (not by my choice!), which increased the balance by about $350. I paid some, and ended up owing $51 more than I owed this time a month ago.
  • Last, there was spending. I took two trips to visit my family, at about $100 in gas a pop. I bought my plane ticket for the holidays for another $400 or so. I also went through some personal issues and indulged in a teeny bit of retail therapy.
Next month should be great for my net worth. Even though there will be Christmas shopping, just as much driving, and a new years vacation, I get two paychecks along with a bonus equivalent to about another two paychecks.

I'm also apartment hunting and I'll probably need to come up with a hefty security deposit.... The following month will be interesting with the cross country move, but it seems my future company is covering just about everything, so that is grand.

Tuesday, November 27, 2007

Breach

I have a confession. I did something very wrong. I crossed a line I should not have. I feel guilty, but at the same time, slightly relieved at what I found. I'll start with some background on why I did it before I get into what it is I did.

I mentioned before we had some financial issues when I was growing up, namely a chapter 13 bankruptcy that ruled my parents life as they made large monthly payments for 5 (or seven?) years. My life wasn't too disrupted and it qualified me for federal grants for college, but it still left me anxious about my parents financial situation, and probably greatly affected how I feel about my own.

A couple months ago I discovered some financial missteps my father had made, yet again. I truly think that this incident has finally made him realize that he needs to take control of his finances. But when I first heard about it, I was upset and nervous. My mom does fine with money, but I still worry about my parents having enough in their old age. Heck, sometimes I worry about them having enough right now.

So I did something wrong. I went online and pulled a free annual credit report for myself, and then.... I pulled one for my dad. It was really a stroke of luck that I was even able to do this. Of course I have my parents social security numbers (I needed them to list them as beneficiaries on my 401k), but they also have a few qualifying questions about where a recent loan is from and the amount of the payments. I made some educated guesses, and guessed right, and suddenly all of the information was right there on my screen. Wow.

The report itself was sort of spotty. Some missed payments, and even some accounts marked as "charge-off". I had to Google that to learn that is when you still owe a company money, but they never expect you to pay it, so they charge it off to balance their books. A few accounts noted as settled as part of the Chapter 13 bankruptcy, and many were simply closed. What comforted me was the fact that I didn't see credit cards with huge (or any) balances, I didn't find a thousands of dollars worth of loans owed. Sure it showed past problems, but no current problems.

Still, I shouldn't have done it. While I may have a good financial head on my shoulders, it is crossing the line to pull his report without his permission or knowledge. that is my anxious controlling side and I gave into it. I should have been an adult and gathered the courage to talk about it with my parents, but I took the cowards way out. I snooped. It was wrong. Still, I'm relieved at what I found.

Year end performance review


Many people fret about asking for their first raise at work. My company is fairly large and structured with raises, so I didn't have the issue of how to begin the process.

Performance reviews are given in October. Prior to the review, each employee is required to fill out a self review, stating accomplishments and noting how we met our "goals" of the performance review. This year we also had to name 3 coworkers that we wanted to fill out evaluations for us, and we also filled out at least 3 reviews of others (I did five!). Our managers then compile the information into an overall "score card", and we are given an overall rating of 1 to 3 in two categories. They roughly are "what you do" and "how you do it", but they have some HR-type names. HR imposes rules that disallow managers from rating everyone too high or too low.

The process is structured, and seems very fair. Good raises don't just go to those who gather up the courage to ask. They go to those who can list accomplishments, whose peers speak highly of their work, and who's manager is impressed with them.

My review went really well, I was rated a 3 and a 2.9 in the two categories, and my manager talked about getting me into some leadership classes in the coming year. I was hoping to be promoted to the next grade, but I do not have the 2 years of full time experience that they generally require. So I wasn't. I received a great review this year, yet still got "only" a 4.5% raise. It isn't bad, but it isn't great. I really need to get moved up to the next pay grade level in order to get a larger raise, which would probably happen next year.

The best advice I heard about reviews was to step up your level of effort a bit for the two months before the review. People's memories are short, and that is what they will remember. I didn't do this. However, not long before my review I was in a meeting with my manager (along with about 7 others) and was speaking up and questioning why we were doing something, if it was "value added" (no I didn't use that jargony word!). In my review, he specifically commented that he had noticed that I was speaking up and expressing my opinions and questioning the process when necessary. I didn't do it to impress him, but I don't have a lot of direct interaction with my manager, so this probably helped give me a slight boost.

Unfortunately (or fortunately, perhaps) there is nothing that takes the place of solid hard work. If people are requesting you to work on projects, leaving you good feedback, and entrusting you with responsibility, you should make sure your manager knows it. But if they aren't, no amount of effort on a self evaluation review will make a difference. Perhaps some clever wording and bragging can separate those in the middle a bit, but they can't separate the good from the great.

Saturday, November 24, 2007

New cars

My mom wants to buy a new car. A mini-cooper convertible. From now on, I will bite my tongue every time she talks about it, as I will when she ultimately (probably) buys it. She does not tell me what to do with my money, and it is certainly not my place to tell her what to do with hers. I've heard she says she has plenty saved for retirement (but how much is plenty?) so if she really can afford a new car, then good for her.

My older sister encourages me to buy a new car every so often. I graduated about a year and a half ago, and it seems to be the thing to do. "You can afford the payments. You are a single person making plenty of money." This is true, I can. Still, I don't yet feel financially secure enough to spend that kind of money, and I don't want to finance it. Not yet, at least. It isn't as though I'm sitting on a bunch of money. My net worth is only just creeping up to 10k (and creeping so slowly with the volatile market!), and purchasing a car would plummet it down into negative numbers. Besides, my car works just fine, and it should work just fine for several more years if I want it to.

Maybe I'm more cautious than she is, but she is also married to a very nice young man whose grandparents happen to have set aside a pile of money sitting in investments for their use. It isn't that they are wasteful of that money, but I think having a giant fund to fall back on gives you a little more confidence in purchasing. Maybe once I have some sort of fund to fall back on, I'd feel more comfortable in purchasing a newer car.

Monday, November 19, 2007

Retail Therapy

I've run into some personal issues and wound up driving to visit my family this past weekend. I didn't blink twice at paying for the gas (even at the ever rising price) because I really wanted to be with them for a couple days.

Among other things, my sister suggested some retail therapy. Not only that, but she performed some herself, giving me some new pajama's and a nice little present. And really, it did help, maybe more than material items should. It is just nice to get a present. Thoughtful.

I'm not that much of a shopper, but I do believe in retail therapy. Why is it that new things make us happy? But since I also believe in frugality and not shopping senselessly, I think I'll just purchase things that I need anyway (lightbulbs, mascara...) then try to buy some Christmas presents. And maybe a small luxury for myself....

Thursday, November 15, 2007

Using my budget

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

Tuesday, November 13, 2007

Dead Cat Bounce

Paints a horrible picture, doesn't it? You may have known what this phrase means for a long time, and if not, you may have heard it today. On the radio on the way home, the newsman reported that stocks had a recovery today, "deaceased feline or otherwise." It took me a minute to understand what he was talking about.

A dead cat bounce is when stock prices jump up after a significant decline, only to continue to fall again after the recovery. Supposedly it comes from the idea that even a dead cat will bounce, if it falls far enough down. Well that's an unpleasant thought!

Why do these bounces occur? Wikipedia suggests that there are at least two factors coming into play. Some investors might have standing orders to buy certain stocks if they fall below a certain level. Other investors might speculate that it is the bottom of the market, so they buy hoping to make a profit.

The only way to tell the difference between a dead cat bounce and a recovery from the bottom is hindsight. So what do you think? I'd love to think that today represented a recovery, but in reality I think we haven't seen the bottom yet.

I found a little note at the end of the Wikipedia entry amusing: "More recently, the term has been used colloquially during extended drinking binges to describe the apparent recovery of individuals previously thought "out-of-commission", only for them to quickly return to sleep, vomit etc." Ah, college.

By the way, thank me for not including an image with this post!

Year end bonus will help with goals!

My year and bonus is based on many factors about how the company performs. The base rate for non-senior engineers is 5.5%, and we can earn from 0 to 200% of that. This year the company did well and we earned 170%. That means I will get a check for over 9% of my salary! This is the first year that I was employed for the full fiscal year, so my first year getting such a generous check. My manager, I think, has a base rate of at least 10%, so he'll be getting a huge bonus.

I was counting on this bonus, and I will need it if I have any hope of meeting my year end savings goals. I'm kicking butt on my investing goals, but my savings isn't growing the way I wish it was. I still need:
  • 2k payback for student loans
  • 2.1k stashed in HYSA
I can definitely make it, but it is a bit dependent on my relocation situation. I have no idea what the costs will be, but I probably will have to pay rent in two places for January, and come up with a significant deposit. My current apartment had a $100 deposit, so even if I do get it all back... that really just isn't going to do much. I'll take that in consideration when I figure if I met my goals or not.

I have 3 paychecks plus this bonus to do it in. I also have to buy Christmas presents, gas for a road trip home, and come up with around $500 in spending money for my New Years vacation. Yikes! It's going to be close!

Saturday, November 10, 2007

Would you go a year without buying anything new? How about 10 years?

Perhaps, being someone interested in personal finance, you heard of the group of San Fransisco professionals who committed not to buy anything new in the year 2006. Or maybe you've heard a recent segment on NPR's Marketplace Money about another family, essentially doing that same thing for 2007.

It sounds very noble and anti-consumerism. It is admirable. I couldn't make that commitment, and I'm impressed that they can. But what I found most intriguing about the story was the following comment on the Marketplace Confessional, a section of the website where listener's can anonymously state their opinions about the show:
There was a segment about not buying anything new for a year. What is the big deal? I have not purchased anything new for almost 10 years. I am low income and have shopped at the second hand stores for years. My toaster, pots, pans, clothes have all come from these type of stores. Where I live we have a senior center that has a thrift store. If you take the time look you can find almost anything. Clothing is 25 cents per item or $1.00 per bag. There are many bargains to be had at thrift stores.

It made me remember how lucky many of us are. I can challenge myself to spend less and less, but I do it out of choice, not of necessity. Sure, I do it to fund retirement and to prepare for an emergency, or to pay off my student loan a little early. But if I'm feeling extravagant, I can buy a latte from Starbucks and it doesn't mean that I won't be eating dinner. I save money and buy things on the cheap because I want to, not because I have to. It is a blessing to have the choice.

I need to go through my apartment before I move and be sure to donate any unneeded quality used items to the second hand store so someone else can use them. Because they choose to or because the have to.

Friday, November 9, 2007

My first taste of Mint

Typically, I track my daily spending in an excel sheet. I use Yodlee to view my net worth and to verify my excel tracking. I update my net worth monthly in NetworthIQ. So when I heard about the new personal finance tool, Mint, I wondered what it could do for me that my other tools weren't.

I decided to find out. The first thing I noticed is that the website had a striking interface. It was quite aesthetically pleasing and very clean. I easily added all my accounts, but was surprised to realize that I couldn't include my 401k or Roth. As I became more familiar with what the site was trying to do--help you analyze your spending--I can see why they don't include it. But I'm still disappointed they don't! After it loaded my data, I could see all of my transactions for the past 2 months.
I think some of the "shopping" was groceries (Target). The "No Category" stuff was ATM transactions, and in the future, I'd want to note exactly where that cash went. It is pretty neat, even though Yodlee has an uglier version of the same chart. Also, I could click on these categories, and they would be broken down into even more well defined categories. I wish it included a piece for savings, but it seems like it only tracks what you spend.

Honestly, I am not yet overly impressed with Mint so far. It is sort of like Yodlee, but with a cleaner interface and less features. I am going to continue using it, and perhaps as it matures, it will grow into something more useful to me. (It is still in beta, and they have promised to rol out more features over the next few months. )

Tuesday, November 6, 2007

Wells Fargo's Response

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:
According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

Monday, November 5, 2007

Some newer ways to search for cheap flights

I've bought a lot of plane tickets this year. Well, five (and one more maybe in the works!), which is a lot to me. I would guess that plane tickets were my largest discresionary spending this year, and the previous year as well. I don't live in a major metropolitan area, so my flights always have a connection through a hub, and I haven't paid anything less $300 this year!

The usual methods
My usual method is to search ALL of the popular sites, and travelbuddy.com or travelzoo.com have useful ways to automate that. It might be overkill, since expedia or travelocity typically will turn up the lowest fares, but I don't want to miss anything. I particularly like those sites because of the ability to search a few days before and after your desired travel dates. (If you are a student, studentuniverse.com and sta.com are musts. Other sites won't find those deals.) Once I find the best deal, I look at what airline it is on, then go directly to the airlines site and search there. It is often the same price (or $5 cheaper), and it is always better to buy direct from the airline. If you miss your flight and bought a ticket through hotwire, you are basically out of luck.

I tried out Yapta
I heard about Yapta.com, and was intrigued with the idea of tagging trips and being emailed when the price drops. I tried to use it, but was ultimately disaapointed. First, it doesn't work with Firefox yet. I hate having to open up explorer just for that. Second, it doesn't work on Student Universe, where I get a lot of good deals. Most annoyingly, you are only able to tag exact flights with exact airlilnes, you can't just enter your dates for a general flight. It really didn't work out too well for me for searching for flights, but if you had already purchased a flight and wanted to try to get a voucher when the price drops, then it makes a lot of sense. I haven't been able to do that yet.

Farecast is another nice tool
A new favorite is FareCast. I did a search for my holdiay flight, and it came up with a total of $401. Now, that is a few dollars higher than the other sites, so it must add its own fees or something. Still, the airlines it lists as the lowest price agree with what I found. I would alwyas do a new search on expedia or somewhere else to verify, but it seems to have the right idea. For popular routes it predicts if the price will go up or down, and shows you a price history. It told me with 80% confidence that the prices will drop in the next 7 days. I waited a few days, and prices held steady, and the availablity of times to fly for the lowest price shrunk. I think it was a little off due to the holiday season. In general it seems like a good tool, but I'd be wary of predictions around the holiday season.

Using RSS on my iGoogle page
What I am liking the most about Farecast is that I can easily use the RSS feed and add it to my iGoogle homepage. I'm one click away from repeating the whole search. I think it will also show up if it does go down. Great! Unfortunately the RSS also only works for "popular" routes, and it is unlikely that most of my searches will be those routes.

Another nice iGoogle gadget is the Expedia fare calander. This would be the ultimate tool if it offered more airport choices. If I think I might want to fly to Chicago from Portland sometime in the next month, I could add this little guy to my iGoogle homepage, and see what the prices would be for almost date in the month. Thanks to this gadget, I have the option to fly to the city where I will be working next year and do some apartment hunting right after Thanksgiving, and at about $220, it will be the cheapest ticket I've purchased all year!



These tools are still a bit limited, but it a huge improvement from the days of travel agents and paper tickets. What I really want is a gadget that I can tag certain dates between two cities, and have an RSS feed when they drop. Farecast does this, but only for popular destinations. Does anyone know of a tool that will do this for all routes?

Sunday, November 4, 2007

Save $125 by sharing my "Biometrics"

My company came out with a new policy this year. We are required to either take a online personal health assessment and fill in data from our "biometrics" (cholesterol, triglycerides, etc.), or pay an extra $125 (per person) in health care premiums. They offered several sessions at work where they would take them for free, and the numbers were self reported.

Being young and relatively healthy, I wasn't opposed to the idea. Some of my middle aged co-workers were much more wary. Wasn't this a little bit too "Big Brother" for the USA? One could speculate where they are going with this approach. Next year, they might require those who have high cholesterol to reduce it, or else pay $125. Get your BMI within the healthy range, or else pay $125. Commit to exercise three times a week, or else pay $125.

If they do charge more for people who refuse to make an active commitment to improving bad health, is it fair? No one seems to dispute smokers surcharges anymore. The difference is that some of this is genetics, and can't be helped. I have naturally high cholesterol, and while I can improve it with diet and exercise, 2/3 of the number is made up by genetics. I would hate to be charged extra for something I have little control over.

The premise of the approach makes me a bit uneasy. However,it also seems like, done the right way, it might be something that will help alleviate health care costs for the country as a whole. You can't force people to chose healthy lifestyles, but one way to persuade people is to hit them where they will notice--their pocketbooks. If you could lower your premiums by improving your health, or having a legitimate reason why you can not improve, would you? Doesn't it seem fair that taking care of yourself would lower your premiums?

One immediate benefit of the program was that some people were made aware of their health status. This was particularly helpful for us young people who hadn't had our blood work done yet, but also for those who are a little afraid of the doctor. Sometimes seeing the numbers is enough to make a small difference.

I'm leaving my company shortly, so I won't know how this all will play out long term. Still, I wouldn't be surprised to see this trend continue in my future employer.

Friday, November 2, 2007

Unhappy with Wells Fargo (again)

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

Why college textbooks are a rip off

My freshman year of college, I believe I spent about $500 on college text books. Looking back, it was a foolish mistake, but I didn't know better at the time.

My first mistake was that I assumed that when a class said a text was required, they meant it. This turned out to be not true. Sometimes it was, sometimes it wasn't. Second, I bought books too late and there were no used ones left. Third, I didn't check the internet to compare prices.

Really, I think the college textbook industry is a huge rip off. If you've ever taken a class that recently switched from, say, edition 5 to edition 6, you may have noticed that the differences in the editions was primarily in the problem sets. Some texts may have major updates, but for the most part, the facts stay the same. Often times, the problems aren't even completely different, just altered in a minor way. How frustrating.

Not all professors played the game. One professor said that a text was required, but we could get any standard text relating to Control Systems we wanted. He pointed us to Amazon. He taught primarily from his lecture notes (and a text wasn't truly necessary), saving me about $100 that semester.

Also, why are we only given the option of hardcover texts? My boyfriend insists he loves hardcovers because they last longer (whatever). Shouldn't I have the option to easily purchase softcover to save some money? I did a semester in Hong Kong, and their book store didn't contain a single hardcover text for class. Not only that, but many of the students didn't buy the text anyway, as the professor often scanned the necessary material for the students. While that may violate some sort of copyright laws, not offering the softcover versions to US students seems unfair. In fact, I brought the two texts I bought (for a reasonable price!) in Hong Kong and sold them on Amazon in the US. I probably made a small profit, even though I priced them lower than the similar hardcover versions. Abebooks.com often offers softcover "international" versions of college texts. I used one from there for one of my graduate classes last semester.

At the end of the semester, the college bookstore offers to buy back your textbooks from you. This is another rip off. They try to tell you that buying and selling your books through the book store is "good for the college" because they donate money to various student groups. I'd much rather that they offer me a fair price for my books! If I can sell it for $70 on Amazon, and the bookstore will sell it for $90 in the store next fall, why on earth would I give it to them for $45?

I would speculate that this scam of the textbook industry trickles down to high school and elementary school, but since the books are provided for "free" (with tax money), people aren't as aware of it. I went to a private school and we had to buy our own textbooks. Rather than the bookstore running a scam to make profits off of used books, each family would put an envelop with a price inside the book they were offering to sell. The students formed a big line (I think you got a place according to a raffle number) and you would pick the books you wanted to buy. You'd pay the amount listed on the envelope, which was later given to the parent. Unless a class was switching editions, you could come out about even every year.

In later years of college, you could sometimes do a similar thing with classmates a semester ahead of you. These days, with facebook and other social networking sites hooking up buyers and sellers more easily, I wonder if anyone still shops at the bookstore.

Thursday, November 1, 2007

Frugality by way of procrastination

I bought some great black work shoes last week. Somehow, I fell in love with these Oxford Booties (left) by Marc Jacobs (that'll teach me to read fashion magazines). And no, I don't buy Marc Jacobs. Nor do I know what exactly I'd wear those with! I settled for a much cheaper pair of more workable (though less lovely) black booties (right). I still feel slightly like a supermodel in them, since they have 3 inch heels (and I'm already on the tall side).


What is my point? The black work shoes that I was replacing were purchased three years ago, and I wore them very regularly. In fact, they were falling apart, and should have been replaced a year ago. Can you see the missing piece on the bottom of the heel? How about the way that the toe is peeling off? They are SO trashed and unclassy! Why didn't I replace them sooner? In part, it was because I never saw any boots that struck my fancy and seemed worth paying the price for. Mostly, it was because I kept putting off buying them, thinking I'd feel like shopping for them in the following month. And my work isn't the type of place where anyone would care.

I also was intending on purchasing a beautiful white peacoat from Amazon.com. I probably looked at it at least 10 times over the last few months. But I never made the purchase. Tonight, I fully intended on sealing the deal and the coat has vanished from the internet. It looks like I'll just do without a white peacoat, unless I see something I love elsewhere.

These are a few cases where procrastinating has saved me money. Some other examples?
  • I hate doing laundry, so I make my clothes work for as long as possible. Do you really NEED to wash sweaters each time you wear them? I don't think so. Is this gross?
  • If I need to go grocery shopping and don't feel like it, I'll scrounge my fridge and eat whatever I have. I've been known to survive on cereal for several days
  • In order to save on toothpaste, I don't always brush. Just kidding, that definitely is gross!
Of course, this only works for some examples. If I'm too lazy to grocery shop and there seriously is nothing in the apartment, I just might grab some take out to please my stomach. Procrastination definitely is NOT a virtue.... but every now and then, it isn't as evil as people make it out to be.

November Goals

  • Resume tracking of spending!
  • Limit groceries to $30/week or less and restaurants to $75 total
  • Study for and do well on midterm for my grad class

Pathetic as it is, that is all I am going to do for goals. I have to buy Christmas presents starting this month, so I don't think I'll be able to save as much as I would love to.

In better news, my company announced it's profits for last quarter, and it looks like my year end incentive bonus might be about $3000 after taxes, and should arrive in very early December. That could be the final kick I'll need to meet my goal for 10k in my high yeild savings and 4k in student loan repayment!

Tuesday, October 30, 2007

Cosigning 23k of loans for my sister

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

October Goal Results

How did I do in October on meeting my financial goals?
  • Continue 401k and Roth contributions: Yes, but I'm considering reducing 401k back to 12% to flow extra into my savings. Most of my net worth increase is getting tied up in retirement accounts, and I need a little more in savings.
  • Limit groceries to $30/wk and restaurants to $75: Well, I didn't track my spending this month.... Ooops... But I would venture a guess that this is true
  • Contribute $400 to student loan payback account: I only contributed 300.
  • Contribute $1000 to HYSA: I don't think this happened either....
  • Finish writing post about student loans I volunteered to do for for Get Rich Slowly: Done

I really did quite poorly this month.... I need to set more realistic goals. I keep setting the bar too high, and then failing! I think that is better than setting the bar too low and always meeting them, but there has to be a happy medium!

To make myself feel better, here are some things that I did do in October:

  • Found a new job in California and negotiated salary
  • Had a performance review in my current job and was rated a 3-3 (it's a scale of 1 to 3 on two scales so 3-3 is the best)
  • Booked my ticket for the holidays, convinced my friends to meet in a city where we can have free lodging
  • Did decent on my graduate class midterm
  • Bought much needed new black work shoes (I'm stretching here!)

Obviously, my first goal for next month is to resume tracking of my spending. I'll have to think about the other ones.

Saturday, October 27, 2007

The high cost of coastal living

I spoke recently about how I got a job offer in California, making roughly 11k/yr more than I make in the Midwest. My company here pays pretty well for new graduates because there is a high demand for them. Even though they are located in a low cost of living area, starting salaries are not much lower than in high cost of living areas. Anyway, this raise will net me an extra $916 a month, which we will call $650 after taxes (optimistically?).

I've been doing a little math to see how this move will affect me. The biggest increase in monthly spending will undoubtedly be rent. I currently pay $575 for a small but relatively nice one bedroom apartment. I'm hoping to find something for $1000 (or less, but that seems unlikely) in California, probably equally small and not as nice. I'm secretly hoping that I'll have a roommate (my boyfriend) move in after several months, but this isn't something that has been discussed enough to count on, so I'm running the numbers without factoring that in. That is $425 per a month extra in expenses! That destroys a huge chunk of my "raise", making it an increase of a puny 2.7k/yr!

I will be able to take public transportation, but I doubt that'll save me any money since I currently live a 4 minute drive from my company and don't drive often. I suppose, one nice thing about a higher salary is that the company match of my 401k will be of a larger amount. If I want to go home, it'll cost me $300 for a plane ticket rather than $80 for a couple tanks of gas.

Luckily, the initial costs of relocating won't be too much of a burden on me. Not only do they give me $2000 for miscellaneous moving costs, they will pack and move my stuff, reimburse me for mileage and lodging and meals for the drive out there. With all of that, there still might be a bit of a hit to my savings, but not nearly as drastic as it could be.

I'm not making this move for financial reasons. It is for personal reasons, and for a desire to live in a big city, the dream of California living. But the impact to my finances is still there, and I hope that it won't slow my progress too far.

Thursday, October 25, 2007

Financial Disaster (not me)

My parents took out a $15,000 HELOC loan sometime last year in order to make some updates and repairs on their house in preparation to sell it. I thought it was sort of a bad idea and thought they should just save up some cash and pay for it as they go. At least for part of it. I think I bit my tongue, because it isn't really my place to offer unsolicited 'advice' and judge the actions of my parents. I did suggest that while they were waiting to spend it, they put it into a high yield savings account rather than a normal account, but beyond that, I stifled my opinions.

My dad has a bit of a sordid financial past and has difficulty managing money, so my mom was the only one with access to the account. But the repairs didn't happen. My dad kept putting it off, and putting it off, and I was wondering what the hold up was.

Apparently, my mom used the same PIN that my dad uses for several of his accounts. He was borrowing money from the account to pay some other bills (and I still am confused as to what bills these are). He finally told my mom, and then went to Alaska (I know, bizarre) because there was a lot of work for him there making a lot of money in a short amount of time. In fact, he's been there less than a month and has paid back whatever he took (I'm not sure how much it was).

I finally found out today, from my sister. My dad was supposed to tell me himself, but he didn't. I understand him not wanting to tell me, but it makes me think I need to change my attitude. I don't want to be judgmental (though it can be hard to hold back at times), I want to be helpful.

It's hard to offer suggestions to your parents. Suggestions that seem so obvious to me. For example, if you can't pay your bills then you don't get to go on vacation to the Bahamas. (Yes, the really are going. Though the trip was planned before this came to head, and they NEVER go on vacation, it still seems extravagant.) Or, open a Roth IRA and make contributions automatic. Cut up your credit cards if you can't manage them. Track your spending, at least for a few months, just to see what is going on. These are the basics!

Secretly, I considered pulling their credit report without their knowledge. I know their SSN's. There generally are some security questions that I'm sure I couldn't answer, but besides that, it's just a horrible and evil idea. It just isn't my place, even though I want it to be.

Someday, they won't be able to work. What do they have saved? Is it enough? How would my dad ever manage his finances without my mom watching over? Is it too late for him to learn? These are things that I worry about. Maybe that is why I have a personal finance blog--so no one ever has to worry these things about me.

Tuesday, October 23, 2007

Personal side of Federal Student Aid

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.

Monday, October 22, 2007

Say few sentences for an extra $5000!

This is a money making trick that doesn't work except in a very special circumstance--negotiating a job offer.

I'm in the process of relocating to California, primarily for personal reasons. I had an interview last week and received the official offer today. My current salary in a low cost of living midwestern city is about 56k. I was offered 65k to move to California (plus relocation costs!). I was excited to get the offer, but I immediately asked if that was negotiable. I had anticipated an offer in the 70-75k range. (Some random cost of living calculator states: To maintain the same standard of living, your salary of $56,000 in XXXX should increase to $103,122 in XXXXX, California. I think that is a bit high, and certainly less than I would expect them to offer me, but at least, a point of reference.)

The HR rep seemed surprised (which surprised me!), and said something like "Well, it is a 15% percent increase, but if you have justification, I can talk to the hiring manager."

Luckily, I wasn't negotiating for the sake of negotiating--I had my reasons ready to go:
  • The position is typically entry level, I have 1.5 years of directly related experience and am on the verge of a raise/promotion at the end of the year
  • I am 1/3 of the way done with my Masters Degree
  • I already have my security clearance (something that costs them several thousand to get!)
  • The cost of living is significantly different
The HR lady then called the hiring manager, and then called me back about 10 minutes later. She only could offer me an increase of salary to 67k, but they would throw in a 3k signing bonus. She reminded me that performance reviews happen early in the year, and that there would be tuition reimbursement.

The offer is much more attractive. I got enough money to fully fund a 2008 Roth IRA, just by listing a few reasons.

I have a phone interview tomorrow with another company for a different type of position. I think that the offer I already have seems like a more appealing job, but I want to see what this other position really entails.

This is the first time I've negotiated salary, and I'm quite proud of myself!

Saturday, October 20, 2007

Long Term Plans

I haven't written a post at all this month. I thought I would have more time for this, but I haven't been making it a priority. I just finished writing an extensive entry on student loans for JD at Get Rich Slowly. It was very rewarding, and reminded me of why I started this blog in the first place.

I still am not sure if I will meet my year end money goals. If I don't, I'm not incredibly worried, because I still made a TON of progress this year. Since I graduated in May 2006, I've mostly been setting up the foundation of a good financial future. I am still in the beginning stages, and I've started to think about what might come next. Long term goals have eluded me, but once the foundation is built, I want to have a plan for what do to next.

First, I would like to max out my 401k. This year my personal contributions will be roughly $8,000, far short of the allowed $15,500. Next year, I should be relocated to a higher cost of living area. Ironically, I believe that will allow me to save more of my income, because I plan to leave the percentages the same. This also will mean my employer match will be higher. Still, it may take a couple years before maxing out my 401k and my Roth concurrently is possible.

Second, I'd like to start saving for a house downpayment. This is very much a long term goal. I don't expect to be purchasing for five years, maybe more. Someday though, I would like a house, and I would like to be prepared for it.

Last, I'd like to start out a non-retirement investment account. This won't be for "play" money, but for building wealth that I can access before I reach retirement age.

I can't make much progress on these goals while still building an efund, paying student loans, and saving up for a car, but it is nice to look and see what is on the horizon.

Sasha

Monday, October 15, 2007

Was I poor?

Throughout my life, my sense of where I fit in financially has teeter tottered.

The early years
When I was young, we lived in a trailer court. Am I embarrassed of this? It depends. Some people really do look down on it, so I don't advertise that fact until I know a bit about a person's perspectives. As I get older, it seems to matter less.

I remember two things about the trailer court. First, I remember playing in our yard. We lived on a dead end street at the end of the lot, and my Dad was allowed to use whatever land he wanted to mow. So we had a huge yard with a homemade swing set, a sandbox, and a nice hill for our slip and slide. I remember the day my dad mowed his name in huge letters in the yard. We were delighted.

The other thing I remember is when a naked man was running through the trailer park. I don't specifically remember seeing him, I don't remember why he was running, why he was naked. But I do remember my dad taking him inside our trailer, giving him a shirt and some pants, and helping him on his way. He worked at a golf course and gave my dad free rounds after that.

When I was in third grade, we moved to the house my parents live in now. It is a big house, probably bigger than we needed, in a new development. They did a lot of the work themselves (my dad and his friends). For the rest of grade school and jr. high, I never felt that I lived in a somewhere "less" than my friends.

High school
I transfered to a private high school in ninth grade, and the insecurities were back. We had enough money, but definitely less than my classmates. I didn't have a nice car. Our house was less impressive than many others. Several of my classmates had pools (a big luxury in a northern midwest state!), everyone shopped at Abercrombie, and people had a lot of nice stuff.

Still, my parents didn't seem to deprive us. I almost wish they did, for their sake. We did have crappy cars, but were allowed to buy brand name clothes. My parents paid for a trip to Germany, not to mention the tuition for school (though there was a discount because my dad did some electrical work for them). Even though we had less than others, we still had enough.

The scary years
During this time, my dad borrowed a healthy sum of money to start his own electrical business. I still am not clear on the details, but it didn't work out as well as planned. There were some issues with him not getting paid for a large job, some issues with the person who lent him the money, and... well, starting a small business is hard. I'm not sure it was planned out very well. It was hard times, but I wasn't aware of it until a little later on. It ended with my parents working with someone to file a Chapter 13 bankruptcy. They got to keep their possessions, but had to pay a lot of money back to the creditors. I think the payments were something like 3000 a month for 5 or 7 years. My dad became responsible for those payments, and my mom paid the rest of the bills.

Surprisingly, I don't remember there being major cutbacks in my life. We continued to drive falling apart cars, but everything else seemed to go stay the same. Still, it was a scary time for me. Every so often, my dad would fall behind on the payments, and someone would come to our house with a certified letter. I must have opened one once, because I somehow knew they said something like "pay now, or we will be forced to reconsider this repayment plan." More than once, I cried about this, even once I was in college and not relying on them. I was scared for their sake and couldn't understand how they could have let this happen.

But they made it through, making their last payment sometime last year. It actually helped me out a lot, surprisingly. Because they were paying so much money towards the debt, I was able to qualify for actual GRANTS for my college for several years. Free money that I never had to pay back!! So, if you can't help your kids pay for college, consider going bankrupt right as they are entering. (No seriously, don't.)

The split
During college, you start to separate from your parents both emotionally and financially. They generously helped me get a decent car (about 3k from them and 1k from me), paid my car insurance and repairs, health insurance and helped out with some minor expenses on occasion. After living on my own for several years, they let me stay at home rent from for a few semesters so I could save money. But for everything else, I was on my own.

After graduation, the difference was even more marked. I'm completely financially independent from them. Now, I feel very "rich", even though I only have about 8k net worth. The feeling comes from knowing I'm doing the right things with my money and knowing my future looks bright. To me, feeling poor means being scared about money. I don't think I'll ever feel "poor" again.

As for my parents, they are doing pretty well these days, I think. I worry about their retirement. The bankruptcy involved an IRA rollover (I know this only because it affected my financial aid), and I know my dad has no retirement accounts as of today. He does have a pension plan through his union, but he also hasn't worked for the union regularly for about 10 years! I asked him about it, cautiously, and he said his house was his retirement. I commented I wasn't sure about that plan, but let the subject drop. I would assume my mom is still contributing to some sort of retirement plan, but I'm not sure of it. I hope to bring it up with them one of these days, but it is a hard step to take.

I don't think I was ever poor in the true sense of the word, but I don't feel that I was exceptionally privileged either.

Friday, September 28, 2007

October Goals

This months goals are pretty basic, nothing fancy, but will still require some good hard savings.

1. Continue 401k and Roth contributions

2. Limit groceries to $30/wk and restaurants to $75

3. Contribute $400 to student loan payback account

4. Contribute $1000 to HYSA

5. Finish writing post about student loans I volunteered to do for for Get Rich Slowly.

September Goals Results:

September Goal Results
  • Continue 13% 401k and 100 to Roth IRA
I actually upped it to 15%. Why? Because it is money I can't touch, and I really want it to grow.
  • Replenish travel fund with $100 (and likely, drain it again to buy a ticket to LA for october)
I did contribute 50 to it, then bought my plane ticket.

  • Contribute 450 to student loan payback account
I was able to contribute 500.

  • Contribute 875 to HYSA (275 more than autodeposits... slighlty cheating since i expect some of that to come out of todays paycheck)
Well. I am certain this didn't happen. There has been a change in the way I use my HYSA, but the balance has only increased by about $200. Ouch. It was a big spending month, unfortunately.
  • Spend less than 100 on restaurants and less than 30/week on grocery.
YAY, this one I managed. Restaurant was about 90, and grocery was right on track. I'm going to move restaurants down even more next month.
  • Finish and send in grad school application, stay up to date in class
Grad school application has been submitted, I'm a little behind in class, but will but up to date by Monday.

I really wasn't that sucessful this month. I had some unplanned spending (new camera, car repairs) and some expensive planned spending (plane ticket) and bought some clothes at Gap Outlet. On the plus side, I sold about $100 worth of book (mainly, a $70 textbook) on Amazon, so that balanced things a teeny bit. But still, let's hope for a much better October!

Monday, September 24, 2007

Extra money

I sold a few things that were only cluttering my life on Amazon and earned almost $40 (after fees). Not too impressive, but then again, $40 I didn't have before! I also sold some clothes to a consignment shop, but they only took 4 things and paid me $20. Again, it is money I didn't have before, even though the amount isn't all that impressive.

It is fun earning extra money, even though it is on things I once paid much more for.

In downfalls, I spent about $100 at Gap outlet this past weekend, not to mention a few birthday gifts I had to purchase. Still, my net worth is growing each month, so I'm doing something right.

I increased my 401k contributions from 13% to 15%, with the understanding I probably won't meet my savings goals for my regular accounts. Depending on the year end bonus, which I hope to be around 3k after taxes. It might be wishful thinking, but that would really be a good boost to close out the year.

My current task is figuring out auto insurance... I'm being kicked off my parents plan!

Wednesday, September 19, 2007

Hobbies

As briefly mentioned in my last post, I signed up for a photography class, once a week for 2 hours for the next 8 weeks. My $200 point and shoot camera is most likely the least expensive in the class. If I ever get seriously into photography, I will need an SLR, but I specifically chose a nice pocket sized camera because once I'm done with the class, it'll fit best into my life. The class only cost $60, quite a bargain.

The guy standing next to me told me I will be able to buy myself a nice new camera with my Christmas bonus. My savings goals have been derailed by some unexpected expenses, so it is unlikely I will splurge on a $500-$700 camera, especially since I'm really just an amateur.

There is nothing wrong with spending that much on a beloved hobby, but I was shocked at the number of people with really NICE cameras and no idea how to use them. The instructor asked if we knew how to control the fstops, and a lady with one of the nicest cameras claimed she had no idea. Wow.

Between work and graduate classes, I don't have that much time for hobbies. My most expensive "hobby" is traveling, but I don't spend time doing it regularly, so it may not qualify as a hobby. Perhaps it is simply a passion. I also enjoy writing and personal finance, two very frugal hobbies! I enjoy reading, which can be frugal when I don't insist on owning the books.

I also claim that cooking is a hobby, but I can be quite a wreck at it! I tried to make instant oatlmeal (with flaxseed, perhaps that was the issue?) in the microwave, walked away, and came back to find this:
What a way to start a day. (But, I did eat what was left in the bowl, and it was just fine.)

Tuesday, September 18, 2007

The price of carelessness (and vacation)

I went on a long weekend to visit a friend this past weekend. We didn't do any major vacations this year, so I am enjoying several little vacations. Spending money on travel is something that usually doesn't pain me, as friends and new places are something I value highly. The trip was pretty inexpensive, considering plane tickets out of my city are rarely less than $300. After that, the costs were minimal.

Cost of vacation:
$309 - plane ticket
$5 "breakfast" at airport (is potato chips and iced tea really breakfast?)
$11 lunch for me and friend
$15 a rather disappointing sushi dinner.
$9 brunch at a really cute organic restaurant
$10 magazines at the airport (Hmmm, sort of regret this one!)
$5 for Pride and Prejudice (A good deal for a book, and one I want to read anyway)
$5 lunch at airport
$20 parking (could have asked a friend, but the convience was worth it to me)

That is a total of $384, which is not bad at all. Our activities were mostly outdoorsy free things, so that was inexpensive, plus that is also more enjoyable to me.

The cost of carelessness
The previous summary neglects to mention the fact that I left my digital camera on the airplane. I tried to chase it down, but I am now certain it is lost into the abyss. It was a nice camera--a Kodak Easy Share Z740, with 10x optical zoom --but at the same time, I sort of hated it. It was too bulky to easily fit into my purse and sort of embarassing to bring out in social settings. It was a gift from my parents, and while it took amazing pictures while I was abroad last year, I did want a smaller one. Still, I would have waited. And kept this one for more professional shots. Looking online, it sells new for $279, which is painful to know. I'm not even counting the 1G memory card that was inside of it.

I also recently started a photography class, so waiting to buy a camera was sort of out of the question. It was Monday, I needed one by Tuesday at 7:00. I did some research and quickly determined I wanted a canon SD850, a subcompact which sells for about $350 in local stores and just over $300 online. I also looked at the SD750, SD1000, and some in their A series (not as small). I ended up settling for the SD1000, at $250 in local stores. I didn't think I could wait for shipping, but at 5:27 pm, I noticed that amazon.com said if I bought it in the next 3 minutes, I could have it the next day. Even with shipping, the total was only $225, and I didn't have to pay the sales tax I would have at Target or Best Buy. I had about 20 seconds to think about it, so I did it. I then found a 2G SD card for $18, which is on the way (slowly, due to free shipping)

In summary:
Cost of vacation - $389
Cost of carelessness - $243

And the vacation money was much much much more fun to spend. Ug.

My next major expense is yet another plane ticket... It looks like it will be $315 for me to fly to Los Angeles to visit the boyfriend for a long birthday weekend in October, so I estimate about 400 total, but I might be low-balling it. I'm going to do better with the airport purchases by planning ahead, and maybe have a friend to drive me to the airport (though $5/day really is a bargain).

After that, I would like to say, no more vacations for months (they eat into my savings goals), but then it is Christmas season (present time), and we are considering new years in Las Vegas. After THAT, no vacations for quite some time!

Monday, December 24, 2007

"Non-baller"

This is the first year I've ever made "big" New Years Eve plans. I'm going to my future home of LA and a friend from my semester abroad is coming with two other of her friends. I opted out of the original plan, Las Vegas, because I didn't want to spend that much money. In LA, we can stay with my boyfriend (crowded, but free!) and save a ton of money on lodging.

I knew when I signed up for this that this particular friends isn't afraid to spend money. Still, it wasn't a big issue, and we spent a lot of time together on study abroad. She usually just would spend in line with whatever I was, and one night drunkenly confessed "It is good when I hang out with you and E, because I spend less money. You two are my non-baller friend!" I didn't take it as an insult, though some might! Anyway, sometimes it stinks being the frugal one, but at the same time, I won't change my values based on peer pressure. And frankly, when we were still in college, I simply couldn't afford to.

Anyway, I recently got a message that we were considering going to a fancy club on new years at $150 + fees to buy tickets to get in. It does include all drinks and honestly is probably what a lot of "trendy" clubs are going to run in LA. But there is no way that I'm spending $200 for one night! I wouldn't be sad if we went somewhere less trendy for New Years (some are free cover, or $50), because I think the most fun part is just going to be hanging out together. If they want to celebrity sight, we can do that on less expensive nights!

She also has been requesting my presence at a fancy steakhouse for dinner. I do love food and don't mind spending a little on deliciousness. However, I don't even really care for steak, and it just doesn't make sense to me. I won't hesitate going out for delicious sushi now and then, but to spend so much on something I don't even love just is silly.

At the same time, there is a small part of me that wishes I could live a life of excess and spend the money. Really, I *could* afford it. It wouldn't put me into debt or wreck my savings. But I just don't value a trendy club enough to spend that kind of money for it. I'm not opposed to spending money (though $150 would be painful for anything) but it has to be something that is a little more in line with what I think is important. A night of fun is important, but we could have almost as much fun somewhere else.

Thursday, December 20, 2007

Failed attempt to save $700

I'm relocating to Los Angeles in January, and my company will pay for up to 2 weeks of "temporary housing" at a hotel while I find an apartment. I originally got a move in date for my new (expensive) apartment of January 15th, and I decided to push it to February 1st in order to save half a months rent. Unfortunately, the apartment complex did not like my plan. I wasn't even able to negotiate an extra week! I'm really bummed out about this, because it is essentially $700 out of my pocket and into theirs. Perhaps I should have been more pushy and tried harder. I still don't think they would have budged.... Completely lame!

I am feeling nervous about the ammout of money flowing OUT lately and I really wanted to save that $700....

Wednesday, December 19, 2007

Christmas shopping... for myself?

I went out and about today and completed the majority of my Christmas shopping. I picked out a really cute sweater/shrug and tank top for my sister and bought one in another color for myself as well. I usually never pay full price for my clothes from stores like Express, and I feel horribly guilty about it. Anyway, I went back the store and returned one sweater, but with the idea that I'd come back and buy it with the coupon they awarded me (which isn't valid until tomorrow).

Now I'm having doubts. First, I really should return the tank top because it is over priced, even for a gift. Second, I shouldn't buy myself a set. Should I? If I buy myself a set, it'll cost $135 for both of us, so about $68 each. Or I could spend $80 total (what I currently have spent) and not buy myself one. Though the "gift" budget was only supposed to be $50 for sisters. Or I could spend $105 and get two sweaters but only one tank top.

I obviously do not need the sweater. I recently got to buy some clothes from H&M using a gift card I received for my birthday. On the other hand, I rarely buy myself new clothes, and when I do I don't buy anything over $30 usually. I think in my head, "I deserve this! I got a big bonus this year and haven't spent any of it on myself." Which is true. . . But that doesn't mean I need to buy this. Perhaps I would get more enjoyment out of saving the $68. Or spending it on something else. I am going on a nice new years vacation where plenty of spending will happen. I also have a hair appointment tomorrow, which usually runs me about $110 (including tip) if I don't get my eyebrows waxed...

I think I'm going to punch in my numbers for December spending so far, and from there decide if I should keep it or not...

Do any of you agonize so much over an $80 purchase??

Monday, December 17, 2007

Evaluating job offers

I'm relocating from an inexpensive Midwestern city to Los Angeles. I have received two very similar job offers.

The first offer came in at $65k with a relocation package that included a $2000 tax assisted lump sum. I thought the offer was a little low, so I negotiated $67k and a $3k signing bonus. The pay includes up to 7% in 40k matching/contributions by the company and 12.5 days of vacation the first year. Bonuses were not explicitly mentioned, but I would imagine they do some kind of incentive bonus.

The second offer came in at $69k with a very similar relocation package (except $1000 non tax assisted lump sum rather than the $2000), a $3k signing bonus, and 10 days of vacation the first year. They also explicitly mentioned sick leave, at 8/hrs a month. They match up to 6% of 401k contributions, and have some sort of pension plan. I assume you have to work there some minimum amount of years to be vested in the pension. They mentioned bonuses when i was on-site, which this year was "ten days of pay."

My current job will be paying about $58k as of next year. I get 15 days of vacation per a year, and sick leave is not really an issues. You are encouraged to make up any hours that you are sick, but it is not an absolute requirement. I get 6% in a 401k match. I also got a 9% bonus this year.

All things considered, my current job is really the best financial deal, taking the cost of living into consideration. The pay increase is nearly a 20% raise. However, my rent is going to MORE than double, and I will be paying an extra $9,600 a year in rent. That practically wipes out the entire raise! The vacation is better, the bonus is better, and I would most certainly get promoted to "Grade 2" next year. I'm not sure how long it will take me at my next company.

However, the whole point of the job search is to relocate. So, which of the other two is the better offer?

Despite the extra relocation money from the first company (and the extra 2.5 days of vacation) the hard salary numbers will be what my future salary will be based off of. I think the second offer is better, though I'm going to miss that extra week of vacation. Is vacation negotiable? The second offer is only slightly better, but the job itself is more appealing, which really seals the deal.

My next thought is, should I negotiate the second offer? Am I worth more? I don't want to come across as arrogant to the company--I'm not even two years out of school, and I didn't go to a fancy big name engineering school. But if I am worth more than what they offered, I don't want to sell myself short. I don't know. I think it is a fair offer. I liked the company a lot. But the boyfriend insists it doesn't hurt to ask. Thoughts?

Sunday, December 16, 2007

Tis the season... to donate half of your income?

Many people talk a lot about giving to charity, especially this time of the year. I personally do not give a very large percentage of my income to charity. When friends or acquaintances are requesting donations for a cause, I always donate something. Other than that, I must admit to being a bit miserly, something I would like to change. (Or more honestly, something I say I'd like to change, but haven't made any real progress on changing.)

I was reading a celebrity gossip magazine (and I'm not ashamed to admit it!) this evening, and came across an article about people or families who gave away over 50% of their income or net worth. The featured people were not anyone special: a woman who made just $16k last year, a man who earns $200k and gives away a whopping $162,000 of it, and another woman who inherited over half a million only to give it away. Check out Bolder Giving to read about more people who are extremely generous. Their mission " is to inspire us to give at our full potential by providing remarkable role models and practical support."

I am not giving to my full potential. It isn't though I'm spending selfishly, I just have other goals that I'm putting ahead of charity. Building up my emergency fund. Paying off student loans. However, these goals aren't mutually exclusive to giving to charity. In my defense, I volunteer about 1 hour a week at Big Brothers Big isters. Still, I feel that I could give more. So, what am I going to do about it? I will start small, and donate 1% (minimum) of my income next year. To those who tithe (or those who are simply more generous than I), a mere percent may seem laughable, but it is more than I contributed this year. It is a start, right?

Friday, December 14, 2007

Peek at my 2008 plan

Here is my sketched out plan for 2008. I'm moving to an expensive city, but I took the difference of the salary and the rent increase, and I'm coming out a little ahead. Of course, there are other factors.... Anyway, savings are blue, if you can see the different colors.


This doesn't include a signing bonus or any leftover relocation perks, but those will just go automatically into savings and other initial costs of starting over (apartment deposit, etc.)

I'm not sure if I really will only spend 200 on groceries and 100 on restaurants, but I'm sure going to make an effort. I also have to start paying my own car insurance and secure renters insurance. I have no idea what the cost for those will be, but I allowed 100/month. I have $200 of unbudgeted money monthly, and $100 for entertainment--I really spend very little on entertainment currently, so we'll see.

Ah, I love planning. Or perhaps I'm really just procrastinating on finishing up my take home final for my graduate class.

Thursday, December 13, 2007

Unethical

I accepted a job for January 2008 back in early September. This may come as a surprise to anyone who noted that I was in Los Angeles last weekend interviewing for a (different) job.

To my credit, I did stop applying for jobs when I accepted my first offer. Company A just moved very quickly, while Company B moved very slowly. I sought advice of those in industry (an experienced mentor) and others who love me (parents) and was told that I should go on the second interview, and really, do what was best for me. If nothing else, I could use the weekend to find an apartment.

I have not received the formal offer from Company B, but notification that HR is putting something together. I anticipate it will be similar to the other offer--at least as good, maybe slightly better.

Here is the thing: I want to work for Company B significantly more. I met a lot of great people and liked the atmosphere a lot more. However, I have committed to Company A with a start date of late January.

I do know it is unethical to back out of my first offer, but I think I will do it anyway. I will allow myself this mistake in my career, and will never do anything like this again. I will keep myself out of this position. It is a bad place to be in. At the same time, I have to do what is truly best for me. If the company lost a contract tomorrow, they wouldn't feel bad about calling me up and saying "Never mind, you aren't hired". Still. It is not something I am proud of. I just want to say, I'm not asking advice over whether or not to do this, just HOW to handle it.

I'm drafting a letter of "resignation" (or rather, "renege-ation"). For the sake of getting the information to them as quickly as possible I probably will man up (woman-up?) and call them, as unpleasant as that may be. Ok, let's be realistic--I probably will send them an email? I will also send a formal letter (I think). I don't know how to handle this situation, because it is not the types of situations I usually get myself in.

Please offer any suggestions on how to handle this. Here is my first draft:
With great apologies and regret, it is necessary to inform you that I will not be starting employment with Company A this January 2008. I understand that backing out of my commitment is disrespectful to you, and I have wasted the time of you and your company. I am truly sorry for this and will not make this mistake again with any company.

I do not wish to start my career with Company A only to leave for something that is better fit after a short period of time, and waste more of your time invested in me as an employee. With this in mind that I have chosen a different path. My choice was not for monetary reasons, but simply I felt that the job was a better fit for me. Of course, I stopped applying for jobs at the time of my acceptance, however the process moved very slowly with the second company and I'm only now finalizing my decision. I understand that accepting an offer that I was not entirely confident in was a poor choice on my part. I should have, at the very least, requested more time to consider all my options, before making a commitment that I could not keep. Again, I sincerely apologize for the inconvenience I have caused for you.

Thank you for the time you have already spent on me as a candidate and for your gracious offer of employment. I can not apologize enough for backing out of my commitment.

Sincerely,
Me

Planning for 2008

I was hoping to wait until 2008 to talk about my goals and plans for 2008. However, I'm a planner to the extreme and I can't help myself from starting now.

There are a lot of unknowns in the first part of next year. I'm moving to a new city with expensive rent. While I have one job offer, I'm waiting on the one that I want more (tomorrow? Very soon!) so I'm not sure what my salary will be. Still, no matter what, there are some goals I can set right away, and adjust as needed.

First, I want to max out my Roth IRA again. That is about $415 a month of post tax money to be directed into savings immediately. In my first year and a half of working, I've already saved about $20k in retirement accounts. As my salary increases, I'll be able to contribute more each year. I think I'm on track to have a comfortable retirement. I have a vague idea of retiring early, but still am not ready to make a plan for that goal.

In that same vein, I want to contribute at least 10% to my 401k. This is pretty painless and will get me a full match of (probably) 6% total from my company. Based on my first job offer, that will mean I'll save about $15000 in 2008 for retirement. If I feel that I can afford it, this will be increased, with a stretch goal of 15% towards 401k.

I also want to pay a little extra to my student loan account. My goal is only going to be $1000 extra this year. I'm required to pay about $1500. In 2007 my goal was $4000 total. This is really cheap money so paying it off is more for the mental benefits. That means my month payment will increase to $215, though I'll likely pay it in chunks rather than automatically every month. If any of my goals are faltering, this will be the first to go, as it is the least cost effective.

Next, I want to continue (but decrease) to auto-contributions to my emergency fund, and really turn it into an emergency fund. I have a general purpose high yield savings account which is my efund, but I don't treat it as an efund. It's just a savings account with a continually increasing balance. I think contributing $50/week to this account will be sufficient. I pretty much grew it to 10k from scratch this year, so it is a big decrease. I'm excited to have a base fund so I can focus on other goals.

Now... the "boring" goals are out of the way!

For my fun goals, I want to add $25/week to my "travel" fund. If I have extra money, I'll increase this amount, but it is a start. I have a travel fund earmarked, but it has had really stagnant growth. I also want to start saving up for a newer car. My car has about 75k miles on it and will last another couple years... but I need to start building up some money to purchase my next one. I want to pay for my next car in cash, and I will be spending at least 10k, maybe more. If my budget works out, I'd like to save $100/week for this, giving me just over 5k by the end of the year.

So that is it! These goals will be tweaked once I'm settled into my new apartment, new city, and new job.

In unrelated news, they are announcing who replaces my current manager at work today. I hope they promote from within the group and that Bryan is it. I think that he would have the job if he wanted it, but I'm not sure he is interested in management.

Wednesday, December 12, 2007

To Do: "Quit Job"

This was not only the most satisfying thing to put on my to do list, but also the most satisfying to check off!

Actually, I really like my job. They don't discriminate based on age and experience--if you are good, you will be given good tasks and responsibility. In my short time there (1.5 years), I was able to be recognized as a "high performer" and given a key role on my team. Which is really great--you don't have people forcing you to "pay your dues". If you can do the task, your dues are considered paid and you are thrown in there. There are several young employees (under 30) that have really big leadership roles in our group, and I don't think I am too far behind. Besides that, I have gotten to work on challenging and rewarding projects and like my coworkers.

I'm resigning because I'm relocating to Los Angeles (for personal reasons) and the branch in that area really doesn't do any interesting work. I was very nervous about putting in my notice, until my manager informed us all that he had been promoted and would be moving to a branch in Texas. That made it easier for me. I set up a meeting with my manager, which I titled "Short Discussion", which I assume made it obvious what it was about. I don't usually schedule meetings with my manager, and a vague title usually means the employee is quitting. He said he knew when he got the invite.

So, I resigned, effective January 11th. I gave them about a month's notice, which maybe is more than "standard" but I felt it was appropriate, considering we get a week and a half off for Christmas.

Today my manager presented me with the idea of working remotely from Los Angeles, with a salary differential for cost of living figured in. I was really surprised by the idea, and felt it showed they really appreciate my work. Ultimately, it probably won't work out. I don't think I'd do well working in isolation. At this point in my career it is best for me to be surrounded by really brilliant people and learn as much as possible from them. Not to mention, how would I meet new people if I worked alone? I expressed my concerns, and really, I don't think it would be best for the company either. He was fine with that, but said he just had to discuss it with me.

Tomorrow, we can tell the rest of my team.

Tuesday, December 11, 2007

My Credit Cards

This blog has been exceptionally quiet (it never really is all that happening over here anyway) this week. Not only did I send my laptop in for repair (under warranty still), but I was out of town from Wednesday night until late Sunday night (I got to bed at 1:30 am). Perhaps more to come on that "vacation" later. I actually have a lot of potential topics stored up in my mind. For now, I want to talk about my credit cards.

At work, we are all chipping in for a going away present for my manager. My coworker is collecting five dollars from us all, and complained that none of the "young people" had cash. I asked her if she could just accept credit, but no such luck. Not even Visa.

One of my two primary credit cards is a Chase Freedom Visa card. One reason I chose this card was because it was a "Visa Signature" card, and any electronics I buy automatically have a doubled warranty. Sweet. Another cool perk is that any rental car I rent with it will automatically get CDW coverage, which will come in handy when I rent a car over New Years. The cash back bonus is alright, but I really don't spend that much for it to be exciting.

What has annoyed me about this card is the constant mailings encouraging me to sign up for costly services. More than once a month I get an envelope from them to sign up for some "Credit Protection Plan". In case I ever fall on hard times, this service will allow me to suspend payments for some period of time. Or something like that. Every time I call them for any reason, they push this service. It costs something like $0.89 per a $100 balance, so it isn't much, but still. They also said if you don't "carry a balance" it is free. After questioning this further, I learned that it wasn't exactly true. You can't just pay your balance every time you get a statement, you have to pay your balance BEFORE the statement is calculated for it to be free. Anyway, it is annoying. I don't want it. I don't need it. I have an emergency fund of almost 10k (yay, go me!) and know how to manage my money. Yesterday I opened some "check" that I deposit, which will enroll me in some $90/year service. I'm not sure what the service is, only that I don't need it.

My other card is a Discover Open Road card. Discover seems to have has a bad reputation, but I think they are great. The cash back program is solid (and you can pick what one best suites your life). They also let you choose your credit card design from a HUGE selection. Not that it is REALLY important, but where else will give me a flamingo pink credit card with an "S" monogrammed on it? Love it! Of course, you really can't get by with only a Discover card. While most places accept it, there are still a few who do not. Also, I opened a second Discover card once (to use a 0% balance transfer offer) and they made a huge headache about closing it. The first time I tried my call was simply "dropped" (I personally think they hung up on me because then the customer service rep gets to count it as a customer that was not lost), and the second time I had to argue for several minutes about why I wanted to just close it. Anyway, other than that, Discover has been very nice to me since I first got their card as a college student.

Credit cards have always been a helpful tool for me. I've never been late on a payment and never been charged a fee. I typically get a couple hundred dollars in cash back bonuses each year, and they are very convenient. Still, on principle, I think credit card companies stink. They charge outrageous rates and push to sell useless services.

Saturday, December 1, 2007

November Goal Results, future goal plans

I am not excited about this post, and considered not writing it. However, I need to be accountable to myself, so here are my results for November

  • Resume tracking of spending! I didn't do this, and filled in the second half of November today. There is a $44 charge at Target that I can't remember what I bought. I think it was a mix of clothes and groceries. This is why I need to track as I spend!
  • Limit groceries to $30/week or less and restaurants to $75 total I just barely met the restaurant goal, and only spent 100 on groceries. Of course, I spent a several days with my family for thanksgiving (food provided) so that made it easier.
  • Study for and do well on midterm for my grad class. I did pretty well. I could have done better, but I scored well enough to be satisfied.
December is a hard month to set goals for. I know I'm taking a vacation at the very end of the month, which will involve extra going out/eating out costs. I have to do a lot of shopping, so the "gifts" category of my budget will be large this month. Then in January I'm moving cross country, and I have no idea how things will shake out there. In light of this information, I don't think I'm going to do month goals until February. There are too many unknowns to think about, and I don't think my goals could be very accurate. I just will track my spending and be sensible in spending. And also, to find a place to live in my new city. Still, that really isn't a goal, but an absolute necessity!

Friday, November 30, 2007

November Net Worth

This month was quite unimpressive--an increase of just $132! There are a few reasons I have to explain this. I was sure I'd hit the 10k mark, but I missed... by four dollars!
  • Of course, the stock market uneasiness. Between me and my company, we contributed about $1000 this month, yet the overall balance increased by just $300.
  • Also, there was a slight student loan mess. I was charged some back interest which was capitalized into the loan (not by my choice!), which increased the balance by about $350. I paid some, and ended up owing $51 more than I owed this time a month ago.
  • Last, there was spending. I took two trips to visit my family, at about $100 in gas a pop. I bought my plane ticket for the holidays for another $400 or so. I also went through some personal issues and indulged in a teeny bit of retail therapy.
Next month should be great for my net worth. Even though there will be Christmas shopping, just as much driving, and a new years vacation, I get two paychecks along with a bonus equivalent to about another two paychecks.

I'm also apartment hunting and I'll probably need to come up with a hefty security deposit.... The following month will be interesting with the cross country move, but it seems my future company is covering just about everything, so that is grand.

Tuesday, November 27, 2007

Breach

I have a confession. I did something very wrong. I crossed a line I should not have. I feel guilty, but at the same time, slightly relieved at what I found. I'll start with some background on why I did it before I get into what it is I did.

I mentioned before we had some financial issues when I was growing up, namely a chapter 13 bankruptcy that ruled my parents life as they made large monthly payments for 5 (or seven?) years. My life wasn't too disrupted and it qualified me for federal grants for college, but it still left me anxious about my parents financial situation, and probably greatly affected how I feel about my own.

A couple months ago I discovered some financial missteps my father had made, yet again. I truly think that this incident has finally made him realize that he needs to take control of his finances. But when I first heard about it, I was upset and nervous. My mom does fine with money, but I still worry about my parents having enough in their old age. Heck, sometimes I worry about them having enough right now.

So I did something wrong. I went online and pulled a free annual credit report for myself, and then.... I pulled one for my dad. It was really a stroke of luck that I was even able to do this. Of course I have my parents social security numbers (I needed them to list them as beneficiaries on my 401k), but they also have a few qualifying questions about where a recent loan is from and the amount of the payments. I made some educated guesses, and guessed right, and suddenly all of the information was right there on my screen. Wow.

The report itself was sort of spotty. Some missed payments, and even some accounts marked as "charge-off". I had to Google that to learn that is when you still owe a company money, but they never expect you to pay it, so they charge it off to balance their books. A few accounts noted as settled as part of the Chapter 13 bankruptcy, and many were simply closed. What comforted me was the fact that I didn't see credit cards with huge (or any) balances, I didn't find a thousands of dollars worth of loans owed. Sure it showed past problems, but no current problems.

Still, I shouldn't have done it. While I may have a good financial head on my shoulders, it is crossing the line to pull his report without his permission or knowledge. that is my anxious controlling side and I gave into it. I should have been an adult and gathered the courage to talk about it with my parents, but I took the cowards way out. I snooped. It was wrong. Still, I'm relieved at what I found.

Year end performance review


Many people fret about asking for their first raise at work. My company is fairly large and structured with raises, so I didn't have the issue of how to begin the process.

Performance reviews are given in October. Prior to the review, each employee is required to fill out a self review, stating accomplishments and noting how we met our "goals" of the performance review. This year we also had to name 3 coworkers that we wanted to fill out evaluations for us, and we also filled out at least 3 reviews of others (I did five!). Our managers then compile the information into an overall "score card", and we are given an overall rating of 1 to 3 in two categories. They roughly are "what you do" and "how you do it", but they have some HR-type names. HR imposes rules that disallow managers from rating everyone too high or too low.

The process is structured, and seems very fair. Good raises don't just go to those who gather up the courage to ask. They go to those who can list accomplishments, whose peers speak highly of their work, and who's manager is impressed with them.

My review went really well, I was rated a 3 and a 2.9 in the two categories, and my manager talked about getting me into some leadership classes in the coming year. I was hoping to be promoted to the next grade, but I do not have the 2 years of full time experience that they generally require. So I wasn't. I received a great review this year, yet still got "only" a 4.5% raise. It isn't bad, but it isn't great. I really need to get moved up to the next pay grade level in order to get a larger raise, which would probably happen next year.

The best advice I heard about reviews was to step up your level of effort a bit for the two months before the review. People's memories are short, and that is what they will remember. I didn't do this. However, not long before my review I was in a meeting with my manager (along with about 7 others) and was speaking up and questioning why we were doing something, if it was "value added" (no I didn't use that jargony word!). In my review, he specifically commented that he had noticed that I was speaking up and expressing my opinions and questioning the process when necessary. I didn't do it to impress him, but I don't have a lot of direct interaction with my manager, so this probably helped give me a slight boost.

Unfortunately (or fortunately, perhaps) there is nothing that takes the place of solid hard work. If people are requesting you to work on projects, leaving you good feedback, and entrusting you with responsibility, you should make sure your manager knows it. But if they aren't, no amount of effort on a self evaluation review will make a difference. Perhaps some clever wording and bragging can separate those in the middle a bit, but they can't separate the good from the great.

Saturday, November 24, 2007

New cars

My mom wants to buy a new car. A mini-cooper convertible. From now on, I will bite my tongue every time she talks about it, as I will when she ultimately (probably) buys it. She does not tell me what to do with my money, and it is certainly not my place to tell her what to do with hers. I've heard she says she has plenty saved for retirement (but how much is plenty?) so if she really can afford a new car, then good for her.

My older sister encourages me to buy a new car every so often. I graduated about a year and a half ago, and it seems to be the thing to do. "You can afford the payments. You are a single person making plenty of money." This is true, I can. Still, I don't yet feel financially secure enough to spend that kind of money, and I don't want to finance it. Not yet, at least. It isn't as though I'm sitting on a bunch of money. My net worth is only just creeping up to 10k (and creeping so slowly with the volatile market!), and purchasing a car would plummet it down into negative numbers. Besides, my car works just fine, and it should work just fine for several more years if I want it to.

Maybe I'm more cautious than she is, but she is also married to a very nice young man whose grandparents happen to have set aside a pile of money sitting in investments for their use. It isn't that they are wasteful of that money, but I think having a giant fund to fall back on gives you a little more confidence in purchasing. Maybe once I have some sort of fund to fall back on, I'd feel more comfortable in purchasing a newer car.

Monday, November 19, 2007

Retail Therapy

I've run into some personal issues and wound up driving to visit my family this past weekend. I didn't blink twice at paying for the gas (even at the ever rising price) because I really wanted to be with them for a couple days.

Among other things, my sister suggested some retail therapy. Not only that, but she performed some herself, giving me some new pajama's and a nice little present. And really, it did help, maybe more than material items should. It is just nice to get a present. Thoughtful.

I'm not that much of a shopper, but I do believe in retail therapy. Why is it that new things make us happy? But since I also believe in frugality and not shopping senselessly, I think I'll just purchase things that I need anyway (lightbulbs, mascara...) then try to buy some Christmas presents. And maybe a small luxury for myself....

Thursday, November 15, 2007

Using my budget

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

Tuesday, November 13, 2007

Dead Cat Bounce

Paints a horrible picture, doesn't it? You may have known what this phrase means for a long time, and if not, you may have heard it today. On the radio on the way home, the newsman reported that stocks had a recovery today, "deaceased feline or otherwise." It took me a minute to understand what he was talking about.

A dead cat bounce is when stock prices jump up after a significant decline, only to continue to fall again after the recovery. Supposedly it comes from the idea that even a dead cat will bounce, if it falls far enough down. Well that's an unpleasant thought!

Why do these bounces occur? Wikipedia suggests that there are at least two factors coming into play. Some investors might have standing orders to buy certain stocks if they fall below a certain level. Other investors might speculate that it is the bottom of the market, so they buy hoping to make a profit.

The only way to tell the difference between a dead cat bounce and a recovery from the bottom is hindsight. So what do you think? I'd love to think that today represented a recovery, but in reality I think we haven't seen the bottom yet.

I found a little note at the end of the Wikipedia entry amusing: "More recently, the term has been used colloquially during extended drinking binges to describe the apparent recovery of individuals previously thought "out-of-commission", only for them to quickly return to sleep, vomit etc." Ah, college.

By the way, thank me for not including an image with this post!

Year end bonus will help with goals!

My year and bonus is based on many factors about how the company performs. The base rate for non-senior engineers is 5.5%, and we can earn from 0 to 200% of that. This year the company did well and we earned 170%. That means I will get a check for over 9% of my salary! This is the first year that I was employed for the full fiscal year, so my first year getting such a generous check. My manager, I think, has a base rate of at least 10%, so he'll be getting a huge bonus.

I was counting on this bonus, and I will need it if I have any hope of meeting my year end savings goals. I'm kicking butt on my investing goals, but my savings isn't growing the way I wish it was. I still need:
  • 2k payback for student loans
  • 2.1k stashed in HYSA
I can definitely make it, but it is a bit dependent on my relocation situation. I have no idea what the costs will be, but I probably will have to pay rent in two places for January, and come up with a significant deposit. My current apartment had a $100 deposit, so even if I do get it all back... that really just isn't going to do much. I'll take that in consideration when I figure if I met my goals or not.

I have 3 paychecks plus this bonus to do it in. I also have to buy Christmas presents, gas for a road trip home, and come up with around $500 in spending money for my New Years vacation. Yikes! It's going to be close!

Saturday, November 10, 2007

Would you go a year without buying anything new? How about 10 years?

Perhaps, being someone interested in personal finance, you heard of the group of San Fransisco professionals who committed not to buy anything new in the year 2006. Or maybe you've heard a recent segment on NPR's Marketplace Money about another family, essentially doing that same thing for 2007.

It sounds very noble and anti-consumerism. It is admirable. I couldn't make that commitment, and I'm impressed that they can. But what I found most intriguing about the story was the following comment on the Marketplace Confessional, a section of the website where listener's can anonymously state their opinions about the show:
There was a segment about not buying anything new for a year. What is the big deal? I have not purchased anything new for almost 10 years. I am low income and have shopped at the second hand stores for years. My toaster, pots, pans, clothes have all come from these type of stores. Where I live we have a senior center that has a thrift store. If you take the time look you can find almost anything. Clothing is 25 cents per item or $1.00 per bag. There are many bargains to be had at thrift stores.

It made me remember how lucky many of us are. I can challenge myself to spend less and less, but I do it out of choice, not of necessity. Sure, I do it to fund retirement and to prepare for an emergency, or to pay off my student loan a little early. But if I'm feeling extravagant, I can buy a latte from Starbucks and it doesn't mean that I won't be eating dinner. I save money and buy things on the cheap because I want to, not because I have to. It is a blessing to have the choice.

I need to go through my apartment before I move and be sure to donate any unneeded quality used items to the second hand store so someone else can use them. Because they choose to or because the have to.

Friday, November 9, 2007

My first taste of Mint

Typically, I track my daily spending in an excel sheet. I use Yodlee to view my net worth and to verify my excel tracking. I update my net worth monthly in NetworthIQ. So when I heard about the new personal finance tool, Mint, I wondered what it could do for me that my other tools weren't.

I decided to find out. The first thing I noticed is that the website had a striking interface. It was quite aesthetically pleasing and very clean. I easily added all my accounts, but was surprised to realize that I couldn't include my 401k or Roth. As I became more familiar with what the site was trying to do--help you analyze your spending--I can see why they don't include it. But I'm still disappointed they don't! After it loaded my data, I could see all of my transactions for the past 2 months.
I think some of the "shopping" was groceries (Target). The "No Category" stuff was ATM transactions, and in the future, I'd want to note exactly where that cash went. It is pretty neat, even though Yodlee has an uglier version of the same chart. Also, I could click on these categories, and they would be broken down into even more well defined categories. I wish it included a piece for savings, but it seems like it only tracks what you spend.

Honestly, I am not yet overly impressed with Mint so far. It is sort of like Yodlee, but with a cleaner interface and less features. I am going to continue using it, and perhaps as it matures, it will grow into something more useful to me. (It is still in beta, and they have promised to rol out more features over the next few months. )

Tuesday, November 6, 2007

Wells Fargo's Response

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:
According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

Monday, November 5, 2007

Some newer ways to search for cheap flights

I've bought a lot of plane tickets this year. Well, five (and one more maybe in the works!), which is a lot to me. I would guess that plane tickets were my largest discresionary spending this year, and the previous year as well. I don't live in a major metropolitan area, so my flights always have a connection through a hub, and I haven't paid anything less $300 this year!

The usual methods
My usual method is to search ALL of the popular sites, and travelbuddy.com or travelzoo.com have useful ways to automate that. It might be overkill, since expedia or travelocity typically will turn up the lowest fares, but I don't want to miss anything. I particularly like those sites because of the ability to search a few days before and after your desired travel dates. (If you are a student, studentuniverse.com and sta.com are musts. Other sites won't find those deals.) Once I find the best deal, I look at what airline it is on, then go directly to the airlines site and search there. It is often the same price (or $5 cheaper), and it is always better to buy direct from the airline. If you miss your flight and bought a ticket through hotwire, you are basically out of luck.

I tried out Yapta
I heard about Yapta.com, and was intrigued with the idea of tagging trips and being emailed when the price drops. I tried to use it, but was ultimately disaapointed. First, it doesn't work with Firefox yet. I hate having to open up explorer just for that. Second, it doesn't work on Student Universe, where I get a lot of good deals. Most annoyingly, you are only able to tag exact flights with exact airlilnes, you can't just enter your dates for a general flight. It really didn't work out too well for me for searching for flights, but if you had already purchased a flight and wanted to try to get a voucher when the price drops, then it makes a lot of sense. I haven't been able to do that yet.

Farecast is another nice tool
A new favorite is FareCast. I did a search for my holdiay flight, and it came up with a total of $401. Now, that is a few dollars higher than the other sites, so it must add its own fees or something. Still, the airlines it lists as the lowest price agree with what I found. I would alwyas do a new search on expedia or somewhere else to verify, but it seems to have the right idea. For popular routes it predicts if the price will go up or down, and shows you a price history. It told me with 80% confidence that the prices will drop in the next 7 days. I waited a few days, and prices held steady, and the availablity of times to fly for the lowest price shrunk. I think it was a little off due to the holiday season. In general it seems like a good tool, but I'd be wary of predictions around the holiday season.

Using RSS on my iGoogle page
What I am liking the most about Farecast is that I can easily use the RSS feed and add it to my iGoogle homepage. I'm one click away from repeating the whole search. I think it will also show up if it does go down. Great! Unfortunately the RSS also only works for "popular" routes, and it is unlikely that most of my searches will be those routes.

Another nice iGoogle gadget is the Expedia fare calander. This would be the ultimate tool if it offered more airport choices. If I think I might want to fly to Chicago from Portland sometime in the next month, I could add this little guy to my iGoogle homepage, and see what the prices would be for almost date in the month. Thanks to this gadget, I have the option to fly to the city where I will be working next year and do some apartment hunting right after Thanksgiving, and at about $220, it will be the cheapest ticket I've purchased all year!



These tools are still a bit limited, but it a huge improvement from the days of travel agents and paper tickets. What I really want is a gadget that I can tag certain dates between two cities, and have an RSS feed when they drop. Farecast does this, but only for popular destinations. Does anyone know of a tool that will do this for all routes?

Sunday, November 4, 2007

Save $125 by sharing my "Biometrics"

My company came out with a new policy this year. We are required to either take a online personal health assessment and fill in data from our "biometrics" (cholesterol, triglycerides, etc.), or pay an extra $125 (per person) in health care premiums. They offered several sessions at work where they would take them for free, and the numbers were self reported.

Being young and relatively healthy, I wasn't opposed to the idea. Some of my middle aged co-workers were much more wary. Wasn't this a little bit too "Big Brother" for the USA? One could speculate where they are going with this approach. Next year, they might require those who have high cholesterol to reduce it, or else pay $125. Get your BMI within the healthy range, or else pay $125. Commit to exercise three times a week, or else pay $125.

If they do charge more for people who refuse to make an active commitment to improving bad health, is it fair? No one seems to dispute smokers surcharges anymore. The difference is that some of this is genetics, and can't be helped. I have naturally high cholesterol, and while I can improve it with diet and exercise, 2/3 of the number is made up by genetics. I would hate to be charged extra for something I have little control over.

The premise of the approach makes me a bit uneasy. However,it also seems like, done the right way, it might be something that will help alleviate health care costs for the country as a whole. You can't force people to chose healthy lifestyles, but one way to persuade people is to hit them where they will notice--their pocketbooks. If you could lower your premiums by improving your health, or having a legitimate reason why you can not improve, would you? Doesn't it seem fair that taking care of yourself would lower your premiums?

One immediate benefit of the program was that some people were made aware of their health status. This was particularly helpful for us young people who hadn't had our blood work done yet, but also for those who are a little afraid of the doctor. Sometimes seeing the numbers is enough to make a small difference.

I'm leaving my company shortly, so I won't know how this all will play out long term. Still, I wouldn't be surprised to see this trend continue in my future employer.

Friday, November 2, 2007

Unhappy with Wells Fargo (again)

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

Why college textbooks are a rip off

My freshman year of college, I believe I spent about $500 on college text books. Looking back, it was a foolish mistake, but I didn't know better at the time.

My first mistake was that I assumed that when a class said a text was required, they meant it. This turned out to be not true. Sometimes it was, sometimes it wasn't. Second, I bought books too late and there were no used ones left. Third, I didn't check the internet to compare prices.

Really, I think the college textbook industry is a huge rip off. If you've ever taken a class that recently switched from, say, edition 5 to edition 6, you may have noticed that the differences in the editions was primarily in the problem sets. Some texts may have major updates, but for the most part, the facts stay the same. Often times, the problems aren't even completely different, just altered in a minor way. How frustrating.

Not all professors played the game. One professor said that a text was required, but we could get any standard text relating to Control Systems we wanted. He pointed us to Amazon. He taught primarily from his lecture notes (and a text wasn't truly necessary), saving me about $100 that semester.

Also, why are we only given the option of hardcover texts? My boyfriend insists he loves hardcovers because they last longer (whatever). Shouldn't I have the option to easily purchase softcover to save some money? I did a semester in Hong Kong, and their book store didn't contain a single hardcover text for class. Not only that, but many of the students didn't buy the text anyway, as the professor often scanned the necessary material for the students. While that may violate some sort of copyright laws, not offering the softcover versions to US students seems unfair. In fact, I brought the two texts I bought (for a reasonable price!) in Hong Kong and sold them on Amazon in the US. I probably made a small profit, even though I priced them lower than the similar hardcover versions. Abebooks.com often offers softcover "international" versions of college texts. I used one from there for one of my graduate classes last semester.

At the end of the semester, the college bookstore offers to buy back your textbooks from you. This is another rip off. They try to tell you that buying and selling your books through the book store is "good for the college" because they donate money to various student groups. I'd much rather that they offer me a fair price for my books! If I can sell it for $70 on Amazon, and the bookstore will sell it for $90 in the store next fall, why on earth would I give it to them for $45?

I would speculate that this scam of the textbook industry trickles down to high school and elementary school, but since the books are provided for "free" (with tax money), people aren't as aware of it. I went to a private school and we had to buy our own textbooks. Rather than the bookstore running a scam to make profits off of used books, each family would put an envelop with a price inside the book they were offering to sell. The students formed a big line (I think you got a place according to a raffle number) and you would pick the books you wanted to buy. You'd pay the amount listed on the envelope, which was later given to the parent. Unless a class was switching editions, you could come out about even every year.

In later years of college, you could sometimes do a similar thing with classmates a semester ahead of you. These days, with facebook and other social networking sites hooking up buyers and sellers more easily, I wonder if anyone still shops at the bookstore.

Thursday, November 1, 2007

Frugality by way of procrastination

I bought some great black work shoes last week. Somehow, I fell in love with these Oxford Booties (left) by Marc Jacobs (that'll teach me to read fashion magazines). And no, I don't buy Marc Jacobs. Nor do I know what exactly I'd wear those with! I settled for a much cheaper pair of more workable (though less lovely) black booties (right). I still feel slightly like a supermodel in them, since they have 3 inch heels (and I'm already on the tall side).


What is my point? The black work shoes that I was replacing were purchased three years ago, and I wore them very regularly. In fact, they were falling apart, and should have been replaced a year ago. Can you see the missing piece on the bottom of the heel? How about the way that the toe is peeling off? They are SO trashed and unclassy! Why didn't I replace them sooner? In part, it was because I never saw any boots that struck my fancy and seemed worth paying the price for. Mostly, it was because I kept putting off buying them, thinking I'd feel like shopping for them in the following month. And my work isn't the type of place where anyone would care.

I also was intending on purchasing a beautiful white peacoat from Amazon.com. I probably looked at it at least 10 times over the last few months. But I never made the purchase. Tonight, I fully intended on sealing the deal and the coat has vanished from the internet. It looks like I'll just do without a white peacoat, unless I see something I love elsewhere.

These are a few cases where procrastinating has saved me money. Some other examples?
  • I hate doing laundry, so I make my clothes work for as long as possible. Do you really NEED to wash sweaters each time you wear them? I don't think so. Is this gross?
  • If I need to go grocery shopping and don't feel like it, I'll scrounge my fridge and eat whatever I have. I've been known to survive on cereal for several days
  • In order to save on toothpaste, I don't always brush. Just kidding, that definitely is gross!
Of course, this only works for some examples. If I'm too lazy to grocery shop and there seriously is nothing in the apartment, I just might grab some take out to please my stomach. Procrastination definitely is NOT a virtue.... but every now and then, it isn't as evil as people make it out to be.

November Goals

  • Resume tracking of spending!
  • Limit groceries to $30/week or less and restaurants to $75 total
  • Study for and do well on midterm for my grad class

Pathetic as it is, that is all I am going to do for goals. I have to buy Christmas presents starting this month, so I don't think I'll be able to save as much as I would love to.

In better news, my company announced it's profits for last quarter, and it looks like my year end incentive bonus might be about $3000 after taxes, and should arrive in very early December. That could be the final kick I'll need to meet my goal for 10k in my high yeild savings and 4k in student loan repayment!

Tuesday, October 30, 2007

Cosigning 23k of loans for my sister

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

October Goal Results

How did I do in October on meeting my financial goals?
  • Continue 401k and Roth contributions: Yes, but I'm considering reducing 401k back to 12% to flow extra into my savings. Most of my net worth increase is getting tied up in retirement accounts, and I need a little more in savings.
  • Limit groceries to $30/wk and restaurants to $75: Well, I didn't track my spending this month.... Ooops... But I would venture a guess that this is true
  • Contribute $400 to student loan payback account: I only contributed 300.
  • Contribute $1000 to HYSA: I don't think this happened either....
  • Finish writing post about student loans I volunteered to do for for Get Rich Slowly: Done

I really did quite poorly this month.... I need to set more realistic goals. I keep setting the bar too high, and then failing! I think that is better than setting the bar too low and always meeting them, but there has to be a happy medium!

To make myself feel better, here are some things that I did do in October:

  • Found a new job in California and negotiated salary
  • Had a performance review in my current job and was rated a 3-3 (it's a scale of 1 to 3 on two scales so 3-3 is the best)
  • Booked my ticket for the holidays, convinced my friends to meet in a city where we can have free lodging
  • Did decent on my graduate class midterm
  • Bought much needed new black work shoes (I'm stretching here!)

Obviously, my first goal for next month is to resume tracking of my spending. I'll have to think about the other ones.

Saturday, October 27, 2007

The high cost of coastal living

I spoke recently about how I got a job offer in California, making roughly 11k/yr more than I make in the Midwest. My company here pays pretty well for new graduates because there is a high demand for them. Even though they are located in a low cost of living area, starting salaries are not much lower than in high cost of living areas. Anyway, this raise will net me an extra $916 a month, which we will call $650 after taxes (optimistically?).

I've been doing a little math to see how this move will affect me. The biggest increase in monthly spending will undoubtedly be rent. I currently pay $575 for a small but relatively nice one bedroom apartment. I'm hoping to find something for $1000 (or less, but that seems unlikely) in California, probably equally small and not as nice. I'm secretly hoping that I'll have a roommate (my boyfriend) move in after several months, but this isn't something that has been discussed enough to count on, so I'm running the numbers without factoring that in. That is $425 per a month extra in expenses! That destroys a huge chunk of my "raise", making it an increase of a puny 2.7k/yr!

I will be able to take public transportation, but I doubt that'll save me any money since I currently live a 4 minute drive from my company and don't drive often. I suppose, one nice thing about a higher salary is that the company match of my 401k will be of a larger amount. If I want to go home, it'll cost me $300 for a plane ticket rather than $80 for a couple tanks of gas.

Luckily, the initial costs of relocating won't be too much of a burden on me. Not only do they give me $2000 for miscellaneous moving costs, they will pack and move my stuff, reimburse me for mileage and lodging and meals for the drive out there. With all of that, there still might be a bit of a hit to my savings, but not nearly as drastic as it could be.

I'm not making this move for financial reasons. It is for personal reasons, and for a desire to live in a big city, the dream of California living. But the impact to my finances is still there, and I hope that it won't slow my progress too far.

Thursday, October 25, 2007

Financial Disaster (not me)

My parents took out a $15,000 HELOC loan sometime last year in order to make some updates and repairs on their house in preparation to sell it. I thought it was sort of a bad idea and thought they should just save up some cash and pay for it as they go. At least for part of it. I think I bit my tongue, because it isn't really my place to offer unsolicited 'advice' and judge the actions of my parents. I did suggest that while they were waiting to spend it, they put it into a high yield savings account rather than a normal account, but beyond that, I stifled my opinions.

My dad has a bit of a sordid financial past and has difficulty managing money, so my mom was the only one with access to the account. But the repairs didn't happen. My dad kept putting it off, and putting it off, and I was wondering what the hold up was.

Apparently, my mom used the same PIN that my dad uses for several of his accounts. He was borrowing money from the account to pay some other bills (and I still am confused as to what bills these are). He finally told my mom, and then went to Alaska (I know, bizarre) because there was a lot of work for him there making a lot of money in a short amount of time. In fact, he's been there less than a month and has paid back whatever he took (I'm not sure how much it was).

I finally found out today, from my sister. My dad was supposed to tell me himself, but he didn't. I understand him not wanting to tell me, but it makes me think I need to change my attitude. I don't want to be judgmental (though it can be hard to hold back at times), I want to be helpful.

It's hard to offer suggestions to your parents. Suggestions that seem so obvious to me. For example, if you can't pay your bills then you don't get to go on vacation to the Bahamas. (Yes, the really are going. Though the trip was planned before this came to head, and they NEVER go on vacation, it still seems extravagant.) Or, open a Roth IRA and make contributions automatic. Cut up your credit cards if you can't manage them. Track your spending, at least for a few months, just to see what is going on. These are the basics!

Secretly, I considered pulling their credit report without their knowledge. I know their SSN's. There generally are some security questions that I'm sure I couldn't answer, but besides that, it's just a horrible and evil idea. It just isn't my place, even though I want it to be.

Someday, they won't be able to work. What do they have saved? Is it enough? How would my dad ever manage his finances without my mom watching over? Is it too late for him to learn? These are things that I worry about. Maybe that is why I have a personal finance blog--so no one ever has to worry these things about me.

Tuesday, October 23, 2007

Personal side of Federal Student Aid

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.

Monday, October 22, 2007

Say few sentences for an extra $5000!

This is a money making trick that doesn't work except in a very special circumstance--negotiating a job offer.

I'm in the process of relocating to California, primarily for personal reasons. I had an interview last week and received the official offer today. My current salary in a low cost of living midwestern city is about 56k. I was offered 65k to move to California (plus relocation costs!). I was excited to get the offer, but I immediately asked if that was negotiable. I had anticipated an offer in the 70-75k range. (Some random cost of living calculator states: To maintain the same standard of living, your salary of $56,000 in XXXX should increase to $103,122 in XXXXX, California. I think that is a bit high, and certainly less than I would expect them to offer me, but at least, a point of reference.)

The HR rep seemed surprised (which surprised me!), and said something like "Well, it is a 15% percent increase, but if you have justification, I can talk to the hiring manager."

Luckily, I wasn't negotiating for the sake of negotiating--I had my reasons ready to go:
  • The position is typically entry level, I have 1.5 years of directly related experience and am on the verge of a raise/promotion at the end of the year
  • I am 1/3 of the way done with my Masters Degree
  • I already have my security clearance (something that costs them several thousand to get!)
  • The cost of living is significantly different
The HR lady then called the hiring manager, and then called me back about 10 minutes later. She only could offer me an increase of salary to 67k, but they would throw in a 3k signing bonus. She reminded me that performance reviews happen early in the year, and that there would be tuition reimbursement.

The offer is much more attractive. I got enough money to fully fund a 2008 Roth IRA, just by listing a few reasons.

I have a phone interview tomorrow with another company for a different type of position. I think that the offer I already have seems like a more appealing job, but I want to see what this other position really entails.

This is the first time I've negotiated salary, and I'm quite proud of myself!

Saturday, October 20, 2007

Long Term Plans

I haven't written a post at all this month. I thought I would have more time for this, but I haven't been making it a priority. I just finished writing an extensive entry on student loans for JD at Get Rich Slowly. It was very rewarding, and reminded me of why I started this blog in the first place.

I still am not sure if I will meet my year end money goals. If I don't, I'm not incredibly worried, because I still made a TON of progress this year. Since I graduated in May 2006, I've mostly been setting up the foundation of a good financial future. I am still in the beginning stages, and I've started to think about what might come next. Long term goals have eluded me, but once the foundation is built, I want to have a plan for what do to next.

First, I would like to max out my 401k. This year my personal contributions will be roughly $8,000, far short of the allowed $15,500. Next year, I should be relocated to a higher cost of living area. Ironically, I believe that will allow me to save more of my income, because I plan to leave the percentages the same. This also will mean my employer match will be higher. Still, it may take a couple years before maxing out my 401k and my Roth concurrently is possible.

Second, I'd like to start saving for a house downpayment. This is very much a long term goal. I don't expect to be purchasing for five years, maybe more. Someday though, I would like a house, and I would like to be prepared for it.

Last, I'd like to start out a non-retirement investment account. This won't be for "play" money, but for building wealth that I can access before I reach retirement age.

I can't make much progress on these goals while still building an efund, paying student loans, and saving up for a car, but it is nice to look and see what is on the horizon.

Sasha

Monday, October 15, 2007

Was I poor?

Throughout my life, my sense of where I fit in financially has teeter tottered.

The early years
When I was young, we lived in a trailer court. Am I embarrassed of this? It depends. Some people really do look down on it, so I don't advertise that fact until I know a bit about a person's perspectives. As I get older, it seems to matter less.

I remember two things about the trailer court. First, I remember playing in our yard. We lived on a dead end street at the end of the lot, and my Dad was allowed to use whatever land he wanted to mow. So we had a huge yard with a homemade swing set, a sandbox, and a nice hill for our slip and slide. I remember the day my dad mowed his name in huge letters in the yard. We were delighted.

The other thing I remember is when a naked man was running through the trailer park. I don't specifically remember seeing him, I don't remember why he was running, why he was naked. But I do remember my dad taking him inside our trailer, giving him a shirt and some pants, and helping him on his way. He worked at a golf course and gave my dad free rounds after that.

When I was in third grade, we moved to the house my parents live in now. It is a big house, probably bigger than we needed, in a new development. They did a lot of the work themselves (my dad and his friends). For the rest of grade school and jr. high, I never felt that I lived in a somewhere "less" than my friends.

High school
I transfered to a private high school in ninth grade, and the insecurities were back. We had enough money, but definitely less than my classmates. I didn't have a nice car. Our house was less impressive than many others. Several of my classmates had pools (a big luxury in a northern midwest state!), everyone shopped at Abercrombie, and people had a lot of nice stuff.

Still, my parents didn't seem to deprive us. I almost wish they did, for their sake. We did have crappy cars, but were allowed to buy brand name clothes. My parents paid for a trip to Germany, not to mention the tuition for school (though there was a discount because my dad did some electrical work for them). Even though we had less than others, we still had enough.

The scary years
During this time, my dad borrowed a healthy sum of money to start his own electrical business. I still am not clear on the details, but it didn't work out as well as planned. There were some issues with him not getting paid for a large job, some issues with the person who lent him the money, and... well, starting a small business is hard. I'm not sure it was planned out very well. It was hard times, but I wasn't aware of it until a little later on. It ended with my parents working with someone to file a Chapter 13 bankruptcy. They got to keep their possessions, but had to pay a lot of money back to the creditors. I think the payments were something like 3000 a month for 5 or 7 years. My dad became responsible for those payments, and my mom paid the rest of the bills.

Surprisingly, I don't remember there being major cutbacks in my life. We continued to drive falling apart cars, but everything else seemed to go stay the same. Still, it was a scary time for me. Every so often, my dad would fall behind on the payments, and someone would come to our house with a certified letter. I must have opened one once, because I somehow knew they said something like "pay now, or we will be forced to reconsider this repayment plan." More than once, I cried about this, even once I was in college and not relying on them. I was scared for their sake and couldn't understand how they could have let this happen.

But they made it through, making their last payment sometime last year. It actually helped me out a lot, surprisingly. Because they were paying so much money towards the debt, I was able to qualify for actual GRANTS for my college for several years. Free money that I never had to pay back!! So, if you can't help your kids pay for college, consider going bankrupt right as they are entering. (No seriously, don't.)

The split
During college, you start to separate from your parents both emotionally and financially. They generously helped me get a decent car (about 3k from them and 1k from me), paid my car insurance and repairs, health insurance and helped out with some minor expenses on occasion. After living on my own for several years, they let me stay at home rent from for a few semesters so I could save money. But for everything else, I was on my own.

After graduation, the difference was even more marked. I'm completely financially independent from them. Now, I feel very "rich", even though I only have about 8k net worth. The feeling comes from knowing I'm doing the right things with my money and knowing my future looks bright. To me, feeling poor means being scared about money. I don't think I'll ever feel "poor" again.

As for my parents, they are doing pretty well these days, I think. I worry about their retirement. The bankruptcy involved an IRA rollover (I know this only because it affected my financial aid), and I know my dad has no retirement accounts as of today. He does have a pension plan through his union, but he also hasn't worked for the union regularly for about 10 years! I asked him about it, cautiously, and he said his house was his retirement. I commented I wasn't sure about that plan, but let the subject drop. I would assume my mom is still contributing to some sort of retirement plan, but I'm not sure of it. I hope to bring it up with them one of these days, but it is a hard step to take.

I don't think I was ever poor in the true sense of the word, but I don't feel that I was exceptionally privileged either.

Friday, September 28, 2007

October Goals

This months goals are pretty basic, nothing fancy, but will still require some good hard savings.

1. Continue 401k and Roth contributions

2. Limit groceries to $30/wk and restaurants to $75

3. Contribute $400 to student loan payback account

4. Contribute $1000 to HYSA

5. Finish writing post about student loans I volunteered to do for for Get Rich Slowly.

September Goals Results:

September Goal Results
  • Continue 13% 401k and 100 to Roth IRA
I actually upped it to 15%. Why? Because it is money I can't touch, and I really want it to grow.
  • Replenish travel fund with $100 (and likely, drain it again to buy a ticket to LA for october)
I did contribute 50 to it, then bought my plane ticket.

  • Contribute 450 to student loan payback account
I was able to contribute 500.

  • Contribute 875 to HYSA (275 more than autodeposits... slighlty cheating since i expect some of that to come out of todays paycheck)
Well. I am certain this didn't happen. There has been a change in the way I use my HYSA, but the balance has only increased by about $200. Ouch. It was a big spending month, unfortunately.
  • Spend less than 100 on restaurants and less than 30/week on grocery.
YAY, this one I managed. Restaurant was about 90, and grocery was right on track. I'm going to move restaurants down even more next month.
  • Finish and send in grad school application, stay up to date in class
Grad school application has been submitted, I'm a little behind in class, but will but up to date by Monday.

I really wasn't that sucessful this month. I had some unplanned spending (new camera, car repairs) and some expensive planned spending (plane ticket) and bought some clothes at Gap Outlet. On the plus side, I sold about $100 worth of book (mainly, a $70 textbook) on Amazon, so that balanced things a teeny bit. But still, let's hope for a much better October!

Monday, September 24, 2007

Extra money

I sold a few things that were only cluttering my life on Amazon and earned almost $40 (after fees). Not too impressive, but then again, $40 I didn't have before! I also sold some clothes to a consignment shop, but they only took 4 things and paid me $20. Again, it is money I didn't have before, even though the amount isn't all that impressive.

It is fun earning extra money, even though it is on things I once paid much more for.

In downfalls, I spent about $100 at Gap outlet this past weekend, not to mention a few birthday gifts I had to purchase. Still, my net worth is growing each month, so I'm doing something right.

I increased my 401k contributions from 13% to 15%, with the understanding I probably won't meet my savings goals for my regular accounts. Depending on the year end bonus, which I hope to be around 3k after taxes. It might be wishful thinking, but that would really be a good boost to close out the year.

My current task is figuring out auto insurance... I'm being kicked off my parents plan!

Wednesday, September 19, 2007

Hobbies

As briefly mentioned in my last post, I signed up for a photography class, once a week for 2 hours for the next 8 weeks. My $200 point and shoot camera is most likely the least expensive in the class. If I ever get seriously into photography, I will need an SLR, but I specifically chose a nice pocket sized camera because once I'm done with the class, it'll fit best into my life. The class only cost $60, quite a bargain.

The guy standing next to me told me I will be able to buy myself a nice new camera with my Christmas bonus. My savings goals have been derailed by some unexpected expenses, so it is unlikely I will splurge on a $500-$700 camera, especially since I'm really just an amateur.

There is nothing wrong with spending that much on a beloved hobby, but I was shocked at the number of people with really NICE cameras and no idea how to use them. The instructor asked if we knew how to control the fstops, and a lady with one of the nicest cameras claimed she had no idea. Wow.

Between work and graduate classes, I don't have that much time for hobbies. My most expensive "hobby" is traveling, but I don't spend time doing it regularly, so it may not qualify as a hobby. Perhaps it is simply a passion. I also enjoy writing and personal finance, two very frugal hobbies! I enjoy reading, which can be frugal when I don't insist on owning the books.

I also claim that cooking is a hobby, but I can be quite a wreck at it! I tried to make instant oatlmeal (with flaxseed, perhaps that was the issue?) in the microwave, walked away, and came back to find this:
What a way to start a day. (But, I did eat what was left in the bowl, and it was just fine.)

Tuesday, September 18, 2007

The price of carelessness (and vacation)

I went on a long weekend to visit a friend this past weekend. We didn't do any major vacations this year, so I am enjoying several little vacations. Spending money on travel is something that usually doesn't pain me, as friends and new places are something I value highly. The trip was pretty inexpensive, considering plane tickets out of my city are rarely less than $300. After that, the costs were minimal.

Cost of vacation:
$309 - plane ticket
$5 "breakfast" at airport (is potato chips and iced tea really breakfast?)
$11 lunch for me and friend
$15 a rather disappointing sushi dinner.
$9 brunch at a really cute organic restaurant
$10 magazines at the airport (Hmmm, sort of regret this one!)
$5 for Pride and Prejudice (A good deal for a book, and one I want to read anyway)
$5 lunch at airport
$20 parking (could have asked a friend, but the convience was worth it to me)

That is a total of $384, which is not bad at all. Our activities were mostly outdoorsy free things, so that was inexpensive, plus that is also more enjoyable to me.

The cost of carelessness
The previous summary neglects to mention the fact that I left my digital camera on the airplane. I tried to chase it down, but I am now certain it is lost into the abyss. It was a nice camera--a Kodak Easy Share Z740, with 10x optical zoom --but at the same time, I sort of hated it. It was too bulky to easily fit into my purse and sort of embarassing to bring out in social settings. It was a gift from my parents, and while it took amazing pictures while I was abroad last year, I did want a smaller one. Still, I would have waited. And kept this one for more professional shots. Looking online, it sells new for $279, which is painful to know. I'm not even counting the 1G memory card that was inside of it.

I also recently started a photography class, so waiting to buy a camera was sort of out of the question. It was Monday, I needed one by Tuesday at 7:00. I did some research and quickly determined I wanted a canon SD850, a subcompact which sells for about $350 in local stores and just over $300 online. I also looked at the SD750, SD1000, and some in their A series (not as small). I ended up settling for the SD1000, at $250 in local stores. I didn't think I could wait for shipping, but at 5:27 pm, I noticed that amazon.com said if I bought it in the next 3 minutes, I could have it the next day. Even with shipping, the total was only $225, and I didn't have to pay the sales tax I would have at Target or Best Buy. I had about 20 seconds to think about it, so I did it. I then found a 2G SD card for $18, which is on the way (slowly, due to free shipping)

In summary:
Cost of vacation - $389
Cost of carelessness - $243

And the vacation money was much much much more fun to spend. Ug.

My next major expense is yet another plane ticket... It looks like it will be $315 for me to fly to Los Angeles to visit the boyfriend for a long birthday weekend in October, so I estimate about 400 total, but I might be low-balling it. I'm going to do better with the airport purchases by planning ahead, and maybe have a friend to drive me to the airport (though $5/day really is a bargain).

After that, I would like to say, no more vacations for months (they eat into my savings goals), but then it is Christmas season (present time), and we are considering new years in Las Vegas. After THAT, no vacations for quite some time!

Monday, December 24, 2007

"Non-baller"

This is the first year I've ever made "big" New Years Eve plans. I'm going to my future home of LA and a friend from my semester abroad is coming with two other of her friends. I opted out of the original plan, Las Vegas, because I didn't want to spend that much money. In LA, we can stay with my boyfriend (crowded, but free!) and save a ton of money on lodging.

I knew when I signed up for this that this particular friends isn't afraid to spend money. Still, it wasn't a big issue, and we spent a lot of time together on study abroad. She usually just would spend in line with whatever I was, and one night drunkenly confessed "It is good when I hang out with you and E, because I spend less money. You two are my non-baller friend!" I didn't take it as an insult, though some might! Anyway, sometimes it stinks being the frugal one, but at the same time, I won't change my values based on peer pressure. And frankly, when we were still in college, I simply couldn't afford to.

Anyway, I recently got a message that we were considering going to a fancy club on new years at $150 + fees to buy tickets to get in. It does include all drinks and honestly is probably what a lot of "trendy" clubs are going to run in LA. But there is no way that I'm spending $200 for one night! I wouldn't be sad if we went somewhere less trendy for New Years (some are free cover, or $50), because I think the most fun part is just going to be hanging out together. If they want to celebrity sight, we can do that on less expensive nights!

She also has been requesting my presence at a fancy steakhouse for dinner. I do love food and don't mind spending a little on deliciousness. However, I don't even really care for steak, and it just doesn't make sense to me. I won't hesitate going out for delicious sushi now and then, but to spend so much on something I don't even love just is silly.

At the same time, there is a small part of me that wishes I could live a life of excess and spend the money. Really, I *could* afford it. It wouldn't put me into debt or wreck my savings. But I just don't value a trendy club enough to spend that kind of money for it. I'm not opposed to spending money (though $150 would be painful for anything) but it has to be something that is a little more in line with what I think is important. A night of fun is important, but we could have almost as much fun somewhere else.

Thursday, December 20, 2007

Failed attempt to save $700

I'm relocating to Los Angeles in January, and my company will pay for up to 2 weeks of "temporary housing" at a hotel while I find an apartment. I originally got a move in date for my new (expensive) apartment of January 15th, and I decided to push it to February 1st in order to save half a months rent. Unfortunately, the apartment complex did not like my plan. I wasn't even able to negotiate an extra week! I'm really bummed out about this, because it is essentially $700 out of my pocket and into theirs. Perhaps I should have been more pushy and tried harder. I still don't think they would have budged.... Completely lame!

I am feeling nervous about the ammout of money flowing OUT lately and I really wanted to save that $700....

Wednesday, December 19, 2007

Christmas shopping... for myself?

I went out and about today and completed the majority of my Christmas shopping. I picked out a really cute sweater/shrug and tank top for my sister and bought one in another color for myself as well. I usually never pay full price for my clothes from stores like Express, and I feel horribly guilty about it. Anyway, I went back the store and returned one sweater, but with the idea that I'd come back and buy it with the coupon they awarded me (which isn't valid until tomorrow).

Now I'm having doubts. First, I really should return the tank top because it is over priced, even for a gift. Second, I shouldn't buy myself a set. Should I? If I buy myself a set, it'll cost $135 for both of us, so about $68 each. Or I could spend $80 total (what I currently have spent) and not buy myself one. Though the "gift" budget was only supposed to be $50 for sisters. Or I could spend $105 and get two sweaters but only one tank top.

I obviously do not need the sweater. I recently got to buy some clothes from H&M using a gift card I received for my birthday. On the other hand, I rarely buy myself new clothes, and when I do I don't buy anything over $30 usually. I think in my head, "I deserve this! I got a big bonus this year and haven't spent any of it on myself." Which is true. . . But that doesn't mean I need to buy this. Perhaps I would get more enjoyment out of saving the $68. Or spending it on something else. I am going on a nice new years vacation where plenty of spending will happen. I also have a hair appointment tomorrow, which usually runs me about $110 (including tip) if I don't get my eyebrows waxed...

I think I'm going to punch in my numbers for December spending so far, and from there decide if I should keep it or not...

Do any of you agonize so much over an $80 purchase??

Monday, December 17, 2007

Evaluating job offers

I'm relocating from an inexpensive Midwestern city to Los Angeles. I have received two very similar job offers.

The first offer came in at $65k with a relocation package that included a $2000 tax assisted lump sum. I thought the offer was a little low, so I negotiated $67k and a $3k signing bonus. The pay includes up to 7% in 40k matching/contributions by the company and 12.5 days of vacation the first year. Bonuses were not explicitly mentioned, but I would imagine they do some kind of incentive bonus.

The second offer came in at $69k with a very similar relocation package (except $1000 non tax assisted lump sum rather than the $2000), a $3k signing bonus, and 10 days of vacation the first year. They also explicitly mentioned sick leave, at 8/hrs a month. They match up to 6% of 401k contributions, and have some sort of pension plan. I assume you have to work there some minimum amount of years to be vested in the pension. They mentioned bonuses when i was on-site, which this year was "ten days of pay."

My current job will be paying about $58k as of next year. I get 15 days of vacation per a year, and sick leave is not really an issues. You are encouraged to make up any hours that you are sick, but it is not an absolute requirement. I get 6% in a 401k match. I also got a 9% bonus this year.

All things considered, my current job is really the best financial deal, taking the cost of living into consideration. The pay increase is nearly a 20% raise. However, my rent is going to MORE than double, and I will be paying an extra $9,600 a year in rent. That practically wipes out the entire raise! The vacation is better, the bonus is better, and I would most certainly get promoted to "Grade 2" next year. I'm not sure how long it will take me at my next company.

However, the whole point of the job search is to relocate. So, which of the other two is the better offer?

Despite the extra relocation money from the first company (and the extra 2.5 days of vacation) the hard salary numbers will be what my future salary will be based off of. I think the second offer is better, though I'm going to miss that extra week of vacation. Is vacation negotiable? The second offer is only slightly better, but the job itself is more appealing, which really seals the deal.

My next thought is, should I negotiate the second offer? Am I worth more? I don't want to come across as arrogant to the company--I'm not even two years out of school, and I didn't go to a fancy big name engineering school. But if I am worth more than what they offered, I don't want to sell myself short. I don't know. I think it is a fair offer. I liked the company a lot. But the boyfriend insists it doesn't hurt to ask. Thoughts?

Sunday, December 16, 2007

Tis the season... to donate half of your income?

Many people talk a lot about giving to charity, especially this time of the year. I personally do not give a very large percentage of my income to charity. When friends or acquaintances are requesting donations for a cause, I always donate something. Other than that, I must admit to being a bit miserly, something I would like to change. (Or more honestly, something I say I'd like to change, but haven't made any real progress on changing.)

I was reading a celebrity gossip magazine (and I'm not ashamed to admit it!) this evening, and came across an article about people or families who gave away over 50% of their income or net worth. The featured people were not anyone special: a woman who made just $16k last year, a man who earns $200k and gives away a whopping $162,000 of it, and another woman who inherited over half a million only to give it away. Check out Bolder Giving to read about more people who are extremely generous. Their mission " is to inspire us to give at our full potential by providing remarkable role models and practical support."

I am not giving to my full potential. It isn't though I'm spending selfishly, I just have other goals that I'm putting ahead of charity. Building up my emergency fund. Paying off student loans. However, these goals aren't mutually exclusive to giving to charity. In my defense, I volunteer about 1 hour a week at Big Brothers Big isters. Still, I feel that I could give more. So, what am I going to do about it? I will start small, and donate 1% (minimum) of my income next year. To those who tithe (or those who are simply more generous than I), a mere percent may seem laughable, but it is more than I contributed this year. It is a start, right?

Friday, December 14, 2007

Peek at my 2008 plan

Here is my sketched out plan for 2008. I'm moving to an expensive city, but I took the difference of the salary and the rent increase, and I'm coming out a little ahead. Of course, there are other factors.... Anyway, savings are blue, if you can see the different colors.


This doesn't include a signing bonus or any leftover relocation perks, but those will just go automatically into savings and other initial costs of starting over (apartment deposit, etc.)

I'm not sure if I really will only spend 200 on groceries and 100 on restaurants, but I'm sure going to make an effort. I also have to start paying my own car insurance and secure renters insurance. I have no idea what the cost for those will be, but I allowed 100/month. I have $200 of unbudgeted money monthly, and $100 for entertainment--I really spend very little on entertainment currently, so we'll see.

Ah, I love planning. Or perhaps I'm really just procrastinating on finishing up my take home final for my graduate class.

Thursday, December 13, 2007

Unethical

I accepted a job for January 2008 back in early September. This may come as a surprise to anyone who noted that I was in Los Angeles last weekend interviewing for a (different) job.

To my credit, I did stop applying for jobs when I accepted my first offer. Company A just moved very quickly, while Company B moved very slowly. I sought advice of those in industry (an experienced mentor) and others who love me (parents) and was told that I should go on the second interview, and really, do what was best for me. If nothing else, I could use the weekend to find an apartment.

I have not received the formal offer from Company B, but notification that HR is putting something together. I anticipate it will be similar to the other offer--at least as good, maybe slightly better.

Here is the thing: I want to work for Company B significantly more. I met a lot of great people and liked the atmosphere a lot more. However, I have committed to Company A with a start date of late January.

I do know it is unethical to back out of my first offer, but I think I will do it anyway. I will allow myself this mistake in my career, and will never do anything like this again. I will keep myself out of this position. It is a bad place to be in. At the same time, I have to do what is truly best for me. If the company lost a contract tomorrow, they wouldn't feel bad about calling me up and saying "Never mind, you aren't hired". Still. It is not something I am proud of. I just want to say, I'm not asking advice over whether or not to do this, just HOW to handle it.

I'm drafting a letter of "resignation" (or rather, "renege-ation"). For the sake of getting the information to them as quickly as possible I probably will man up (woman-up?) and call them, as unpleasant as that may be. Ok, let's be realistic--I probably will send them an email? I will also send a formal letter (I think). I don't know how to handle this situation, because it is not the types of situations I usually get myself in.

Please offer any suggestions on how to handle this. Here is my first draft:

With great apologies and regret, it is necessary to inform you that I will not be starting employment with Company A this January 2008. I understand that backing out of my commitment is disrespectful to you, and I have wasted the time of you and your company. I am truly sorry for this and will not make this mistake again with any company.

I do not wish to start my career with Company A only to leave for something that is better fit after a short period of time, and waste more of your time invested in me as an employee. With this in mind that I have chosen a different path. My choice was not for monetary reasons, but simply I felt that the job was a better fit for me. Of course, I stopped applying for jobs at the time of my acceptance, however the process moved very slowly with the second company and I'm only now finalizing my decision. I understand that accepting an offer that I was not entirely confident in was a poor choice on my part. I should have, at the very least, requested more time to consider all my options, before making a commitment that I could not keep. Again, I sincerely apologize for the inconvenience I have caused for you.

Thank you for the time you have already spent on me as a candidate and for your gracious offer of employment. I can not apologize enough for backing out of my commitment.

Sincerely,
Me

Planning for 2008

I was hoping to wait until 2008 to talk about my goals and plans for 2008. However, I'm a planner to the extreme and I can't help myself from starting now.

There are a lot of unknowns in the first part of next year. I'm moving to a new city with expensive rent. While I have one job offer, I'm waiting on the one that I want more (tomorrow? Very soon!) so I'm not sure what my salary will be. Still, no matter what, there are some goals I can set right away, and adjust as needed.

First, I want to max out my Roth IRA again. That is about $415 a month of post tax money to be directed into savings immediately. In my first year and a half of working, I've already saved about $20k in retirement accounts. As my salary increases, I'll be able to contribute more each year. I think I'm on track to have a comfortable retirement. I have a vague idea of retiring early, but still am not ready to make a plan for that goal.

In that same vein, I want to contribute at least 10% to my 401k. This is pretty painless and will get me a full match of (probably) 6% total from my company. Based on my first job offer, that will mean I'll save about $15000 in 2008 for retirement. If I feel that I can afford it, this will be increased, with a stretch goal of 15% towards 401k.

I also want to pay a little extra to my student loan account. My goal is only going to be $1000 extra this year. I'm required to pay about $1500. In 2007 my goal was $4000 total. This is really cheap money so paying it off is more for the mental benefits. That means my month payment will increase to $215, though I'll likely pay it in chunks rather than automatically every month. If any of my goals are faltering, this will be the first to go, as it is the least cost effective.

Next, I want to continue (but decrease) to auto-contributions to my emergency fund, and really turn it into an emergency fund. I have a general purpose high yield savings account which is my efund, but I don't treat it as an efund. It's just a savings account with a continually increasing balance. I think contributing $50/week to this account will be sufficient. I pretty much grew it to 10k from scratch this year, so it is a big decrease. I'm excited to have a base fund so I can focus on other goals.

Now... the "boring" goals are out of the way!

For my fun goals, I want to add $25/week to my "travel" fund. If I have extra money, I'll increase this amount, but it is a start. I have a travel fund earmarked, but it has had really stagnant growth. I also want to start saving up for a newer car. My car has about 75k miles on it and will last another couple years... but I need to start building up some money to purchase my next one. I want to pay for my next car in cash, and I will be spending at least 10k, maybe more. If my budget works out, I'd like to save $100/week for this, giving me just over 5k by the end of the year.

So that is it! These goals will be tweaked once I'm settled into my new apartment, new city, and new job.

In unrelated news, they are announcing who replaces my current manager at work today. I hope they promote from within the group and that Bryan is it. I think that he would have the job if he wanted it, but I'm not sure he is interested in management.

Wednesday, December 12, 2007

To Do: "Quit Job"

This was not only the most satisfying thing to put on my to do list, but also the most satisfying to check off!

Actually, I really like my job. They don't discriminate based on age and experience--if you are good, you will be given good tasks and responsibility. In my short time there (1.5 years), I was able to be recognized as a "high performer" and given a key role on my team. Which is really great--you don't have people forcing you to "pay your dues". If you can do the task, your dues are considered paid and you are thrown in there. There are several young employees (under 30) that have really big leadership roles in our group, and I don't think I am too far behind. Besides that, I have gotten to work on challenging and rewarding projects and like my coworkers.

I'm resigning because I'm relocating to Los Angeles (for personal reasons) and the branch in that area really doesn't do any interesting work. I was very nervous about putting in my notice, until my manager informed us all that he had been promoted and would be moving to a branch in Texas. That made it easier for me. I set up a meeting with my manager, which I titled "Short Discussion", which I assume made it obvious what it was about. I don't usually schedule meetings with my manager, and a vague title usually means the employee is quitting. He said he knew when he got the invite.

So, I resigned, effective January 11th. I gave them about a month's notice, which maybe is more than "standard" but I felt it was appropriate, considering we get a week and a half off for Christmas.

Today my manager presented me with the idea of working remotely from Los Angeles, with a salary differential for cost of living figured in. I was really surprised by the idea, and felt it showed they really appreciate my work. Ultimately, it probably won't work out. I don't think I'd do well working in isolation. At this point in my career it is best for me to be surrounded by really brilliant people and learn as much as possible from them. Not to mention, how would I meet new people if I worked alone? I expressed my concerns, and really, I don't think it would be best for the company either. He was fine with that, but said he just had to discuss it with me.

Tomorrow, we can tell the rest of my team.

Tuesday, December 11, 2007

My Credit Cards

This blog has been exceptionally quiet (it never really is all that happening over here anyway) this week. Not only did I send my laptop in for repair (under warranty still), but I was out of town from Wednesday night until late Sunday night (I got to bed at 1:30 am). Perhaps more to come on that "vacation" later. I actually have a lot of potential topics stored up in my mind. For now, I want to talk about my credit cards.

At work, we are all chipping in for a going away present for my manager. My coworker is collecting five dollars from us all, and complained that none of the "young people" had cash. I asked her if she could just accept credit, but no such luck. Not even Visa.

One of my two primary credit cards is a Chase Freedom Visa card. One reason I chose this card was because it was a "Visa Signature" card, and any electronics I buy automatically have a doubled warranty. Sweet. Another cool perk is that any rental car I rent with it will automatically get CDW coverage, which will come in handy when I rent a car over New Years. The cash back bonus is alright, but I really don't spend that much for it to be exciting.

What has annoyed me about this card is the constant mailings encouraging me to sign up for costly services. More than once a month I get an envelope from them to sign up for some "Credit Protection Plan". In case I ever fall on hard times, this service will allow me to suspend payments for some period of time. Or something like that. Every time I call them for any reason, they push this service. It costs something like $0.89 per a $100 balance, so it isn't much, but still. They also said if you don't "carry a balance" it is free. After questioning this further, I learned that it wasn't exactly true. You can't just pay your balance every time you get a statement, you have to pay your balance BEFORE the statement is calculated for it to be free. Anyway, it is annoying. I don't want it. I don't need it. I have an emergency fund of almost 10k (yay, go me!) and know how to manage my money. Yesterday I opened some "check" that I deposit, which will enroll me in some $90/year service. I'm not sure what the service is, only that I don't need it.

My other card is a Discover Open Road card. Discover seems to have has a bad reputation, but I think they are great. The cash back program is solid (and you can pick what one best suites your life). They also let you choose your credit card design from a HUGE selection. Not that it is REALLY important, but where else will give me a flamingo pink credit card with an "S" monogrammed on it? Love it! Of course, you really can't get by with only a Discover card. While most places accept it, there are still a few who do not. Also, I opened a second Discover card once (to use a 0% balance transfer offer) and they made a huge headache about closing it. The first time I tried my call was simply "dropped" (I personally think they hung up on me because then the customer service rep gets to count it as a customer that was not lost), and the second time I had to argue for several minutes about why I wanted to just close it. Anyway, other than that, Discover has been very nice to me since I first got their card as a college student.

Credit cards have always been a helpful tool for me. I've never been late on a payment and never been charged a fee. I typically get a couple hundred dollars in cash back bonuses each year, and they are very convenient. Still, on principle, I think credit card companies stink. They charge outrageous rates and push to sell useless services.

Saturday, December 1, 2007

November Goal Results, future goal plans

I am not excited about this post, and considered not writing it. However, I need to be accountable to myself, so here are my results for November

  • Resume tracking of spending! I didn't do this, and filled in the second half of November today. There is a $44 charge at Target that I can't remember what I bought. I think it was a mix of clothes and groceries. This is why I need to track as I spend!
  • Limit groceries to $30/week or less and restaurants to $75 total I just barely met the restaurant goal, and only spent 100 on groceries. Of course, I spent a several days with my family for thanksgiving (food provided) so that made it easier.
  • Study for and do well on midterm for my grad class. I did pretty well. I could have done better, but I scored well enough to be satisfied.
December is a hard month to set goals for. I know I'm taking a vacation at the very end of the month, which will involve extra going out/eating out costs. I have to do a lot of shopping, so the "gifts" category of my budget will be large this month. Then in January I'm moving cross country, and I have no idea how things will shake out there. In light of this information, I don't think I'm going to do month goals until February. There are too many unknowns to think about, and I don't think my goals could be very accurate. I just will track my spending and be sensible in spending. And also, to find a place to live in my new city. Still, that really isn't a goal, but an absolute necessity!

Friday, November 30, 2007

November Net Worth

This month was quite unimpressive--an increase of just $132! There are a few reasons I have to explain this. I was sure I'd hit the 10k mark, but I missed... by four dollars!

  • Of course, the stock market uneasiness. Between me and my company, we contributed about $1000 this month, yet the overall balance increased by just $300.
  • Also, there was a slight student loan mess. I was charged some back interest which was capitalized into the loan (not by my choice!), which increased the balance by about $350. I paid some, and ended up owing $51 more than I owed this time a month ago.
  • Last, there was spending. I took two trips to visit my family, at about $100 in gas a pop. I bought my plane ticket for the holidays for another $400 or so. I also went through some personal issues and indulged in a teeny bit of retail therapy.
Next month should be great for my net worth. Even though there will be Christmas shopping, just as much driving, and a new years vacation, I get two paychecks along with a bonus equivalent to about another two paychecks.

I'm also apartment hunting and I'll probably need to come up with a hefty security deposit.... The following month will be interesting with the cross country move, but it seems my future company is covering just about everything, so that is grand.

Tuesday, November 27, 2007

Breach

I have a confession. I did something very wrong. I crossed a line I should not have. I feel guilty, but at the same time, slightly relieved at what I found. I'll start with some background on why I did it before I get into what it is I did.

I mentioned before we had some financial issues when I was growing up, namely a chapter 13 bankruptcy that ruled my parents life as they made large monthly payments for 5 (or seven?) years. My life wasn't too disrupted and it qualified me for federal grants for college, but it still left me anxious about my parents financial situation, and probably greatly affected how I feel about my own.

A couple months ago I discovered some financial missteps my father had made, yet again. I truly think that this incident has finally made him realize that he needs to take control of his finances. But when I first heard about it, I was upset and nervous. My mom does fine with money, but I still worry about my parents having enough in their old age. Heck, sometimes I worry about them having enough right now.

So I did something wrong. I went online and pulled a free annual credit report for myself, and then.... I pulled one for my dad. It was really a stroke of luck that I was even able to do this. Of course I have my parents social security numbers (I needed them to list them as beneficiaries on my 401k), but they also have a few qualifying questions about where a recent loan is from and the amount of the payments. I made some educated guesses, and guessed right, and suddenly all of the information was right there on my screen. Wow.

The report itself was sort of spotty. Some missed payments, and even some accounts marked as "charge-off". I had to Google that to learn that is when you still owe a company money, but they never expect you to pay it, so they charge it off to balance their books. A few accounts noted as settled as part of the Chapter 13 bankruptcy, and many were simply closed. What comforted me was the fact that I didn't see credit cards with huge (or any) balances, I didn't find a thousands of dollars worth of loans owed. Sure it showed past problems, but no current problems.

Still, I shouldn't have done it. While I may have a good financial head on my shoulders, it is crossing the line to pull his report without his permission or knowledge. that is my anxious controlling side and I gave into it. I should have been an adult and gathered the courage to talk about it with my parents, but I took the cowards way out. I snooped. It was wrong. Still, I'm relieved at what I found.

Year end performance review


Many people fret about asking for their first raise at work. My company is fairly large and structured with raises, so I didn't have the issue of how to begin the process.

Performance reviews are given in October. Prior to the review, each employee is required to fill out a self review, stating accomplishments and noting how we met our "goals" of the performance review. This year we also had to name 3 coworkers that we wanted to fill out evaluations for us, and we also filled out at least 3 reviews of others (I did five!). Our managers then compile the information into an overall "score card", and we are given an overall rating of 1 to 3 in two categories. They roughly are "what you do" and "how you do it", but they have some HR-type names. HR imposes rules that disallow managers from rating everyone too high or too low.

The process is structured, and seems very fair. Good raises don't just go to those who gather up the courage to ask. They go to those who can list accomplishments, whose peers speak highly of their work, and who's manager is impressed with them.

My review went really well, I was rated a 3 and a 2.9 in the two categories, and my manager talked about getting me into some leadership classes in the coming year. I was hoping to be promoted to the next grade, but I do not have the 2 years of full time experience that they generally require. So I wasn't. I received a great review this year, yet still got "only" a 4.5% raise. It isn't bad, but it isn't great. I really need to get moved up to the next pay grade level in order to get a larger raise, which would probably happen next year.

The best advice I heard about reviews was to step up your level of effort a bit for the two months before the review. People's memories are short, and that is what they will remember. I didn't do this. However, not long before my review I was in a meeting with my manager (along with about 7 others) and was speaking up and questioning why we were doing something, if it was "value added" (no I didn't use that jargony word!). In my review, he specifically commented that he had noticed that I was speaking up and expressing my opinions and questioning the process when necessary. I didn't do it to impress him, but I don't have a lot of direct interaction with my manager, so this probably helped give me a slight boost.

Unfortunately (or fortunately, perhaps) there is nothing that takes the place of solid hard work. If people are requesting you to work on projects, leaving you good feedback, and entrusting you with responsibility, you should make sure your manager knows it. But if they aren't, no amount of effort on a self evaluation review will make a difference. Perhaps some clever wording and bragging can separate those in the middle a bit, but they can't separate the good from the great.

Saturday, November 24, 2007

New cars

My mom wants to buy a new car. A mini-cooper convertible. From now on, I will bite my tongue every time she talks about it, as I will when she ultimately (probably) buys it. She does not tell me what to do with my money, and it is certainly not my place to tell her what to do with hers. I've heard she says she has plenty saved for retirement (but how much is plenty?) so if she really can afford a new car, then good for her.

My older sister encourages me to buy a new car every so often. I graduated about a year and a half ago, and it seems to be the thing to do. "You can afford the payments. You are a single person making plenty of money." This is true, I can. Still, I don't yet feel financially secure enough to spend that kind of money, and I don't want to finance it. Not yet, at least. It isn't as though I'm sitting on a bunch of money. My net worth is only just creeping up to 10k (and creeping so slowly with the volatile market!), and purchasing a car would plummet it down into negative numbers. Besides, my car works just fine, and it should work just fine for several more years if I want it to.

Maybe I'm more cautious than she is, but she is also married to a very nice young man whose grandparents happen to have set aside a pile of money sitting in investments for their use. It isn't that they are wasteful of that money, but I think having a giant fund to fall back on gives you a little more confidence in purchasing. Maybe once I have some sort of fund to fall back on, I'd feel more comfortable in purchasing a newer car.

Monday, November 19, 2007

Retail Therapy

I've run into some personal issues and wound up driving to visit my family this past weekend. I didn't blink twice at paying for the gas (even at the ever rising price) because I really wanted to be with them for a couple days.

Among other things, my sister suggested some retail therapy. Not only that, but she performed some herself, giving me some new pajama's and a nice little present. And really, it did help, maybe more than material items should. It is just nice to get a present. Thoughtful.

I'm not that much of a shopper, but I do believe in retail therapy. Why is it that new things make us happy? But since I also believe in frugality and not shopping senselessly, I think I'll just purchase things that I need anyway (lightbulbs, mascara...) then try to buy some Christmas presents. And maybe a small luxury for myself....

Thursday, November 15, 2007

Using my budget

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

Tuesday, November 13, 2007

Dead Cat Bounce

Paints a horrible picture, doesn't it? You may have known what this phrase means for a long time, and if not, you may have heard it today. On the radio on the way home, the newsman reported that stocks had a recovery today, "deaceased feline or otherwise." It took me a minute to understand what he was talking about.

A dead cat bounce is when stock prices jump up after a significant decline, only to continue to fall again after the recovery. Supposedly it comes from the idea that even a dead cat will bounce, if it falls far enough down. Well that's an unpleasant thought!

Why do these bounces occur? Wikipedia suggests that there are at least two factors coming into play. Some investors might have standing orders to buy certain stocks if they fall below a certain level. Other investors might speculate that it is the bottom of the market, so they buy hoping to make a profit.

The only way to tell the difference between a dead cat bounce and a recovery from the bottom is hindsight. So what do you think? I'd love to think that today represented a recovery, but in reality I think we haven't seen the bottom yet.

I found a little note at the end of the Wikipedia entry amusing: "More recently, the term has been used colloquially during extended drinking binges to describe the apparent recovery of individuals previously thought "out-of-commission", only for them to quickly return to sleep, vomit etc." Ah, college.

By the way, thank me for not including an image with this post!

Year end bonus will help with goals!

My year and bonus is based on many factors about how the company performs. The base rate for non-senior engineers is 5.5%, and we can earn from 0 to 200% of that. This year the company did well and we earned 170%. That means I will get a check for over 9% of my salary! This is the first year that I was employed for the full fiscal year, so my first year getting such a generous check. My manager, I think, has a base rate of at least 10%, so he'll be getting a huge bonus.

I was counting on this bonus, and I will need it if I have any hope of meeting my year end savings goals. I'm kicking butt on my investing goals, but my savings isn't growing the way I wish it was. I still need:

  • 2k payback for student loans
  • 2.1k stashed in HYSA
I can definitely make it, but it is a bit dependent on my relocation situation. I have no idea what the costs will be, but I probably will have to pay rent in two places for January, and come up with a significant deposit. My current apartment had a $100 deposit, so even if I do get it all back... that really just isn't going to do much. I'll take that in consideration when I figure if I met my goals or not.

I have 3 paychecks plus this bonus to do it in. I also have to buy Christmas presents, gas for a road trip home, and come up with around $500 in spending money for my New Years vacation. Yikes! It's going to be close!

Saturday, November 10, 2007

Would you go a year without buying anything new? How about 10 years?

Perhaps, being someone interested in personal finance, you heard of the group of San Fransisco professionals who committed not to buy anything new in the year 2006. Or maybe you've heard a recent segment on NPR's Marketplace Money about another family, essentially doing that same thing for 2007.

It sounds very noble and anti-consumerism. It is admirable. I couldn't make that commitment, and I'm impressed that they can. But what I found most intriguing about the story was the following comment on the Marketplace Confessional, a section of the website where listener's can anonymously state their opinions about the show:

There was a segment about not buying anything new for a year. What is the big deal? I have not purchased anything new for almost 10 years. I am low income and have shopped at the second hand stores for years. My toaster, pots, pans, clothes have all come from these type of stores. Where I live we have a senior center that has a thrift store. If you take the time look you can find almost anything. Clothing is 25 cents per item or $1.00 per bag. There are many bargains to be had at thrift stores.

It made me remember how lucky many of us are. I can challenge myself to spend less and less, but I do it out of choice, not of necessity. Sure, I do it to fund retirement and to prepare for an emergency, or to pay off my student loan a little early. But if I'm feeling extravagant, I can buy a latte from Starbucks and it doesn't mean that I won't be eating dinner. I save money and buy things on the cheap because I want to, not because I have to. It is a blessing to have the choice.

I need to go through my apartment before I move and be sure to donate any unneeded quality used items to the second hand store so someone else can use them. Because they choose to or because the have to.

Friday, November 9, 2007

My first taste of Mint

Typically, I track my daily spending in an excel sheet. I use Yodlee to view my net worth and to verify my excel tracking. I update my net worth monthly in NetworthIQ. So when I heard about the new personal finance tool, Mint, I wondered what it could do for me that my other tools weren't.

I decided to find out. The first thing I noticed is that the website had a striking interface. It was quite aesthetically pleasing and very clean. I easily added all my accounts, but was surprised to realize that I couldn't include my 401k or Roth. As I became more familiar with what the site was trying to do--help you analyze your spending--I can see why they don't include it. But I'm still disappointed they don't! After it loaded my data, I could see all of my transactions for the past 2 months.
I think some of the "shopping" was groceries (Target). The "No Category" stuff was ATM transactions, and in the future, I'd want to note exactly where that cash went. It is pretty neat, even though Yodlee has an uglier version of the same chart. Also, I could click on these categories, and they would be broken down into even more well defined categories. I wish it included a piece for savings, but it seems like it only tracks what you spend.

Honestly, I am not yet overly impressed with Mint so far. It is sort of like Yodlee, but with a cleaner interface and less features. I am going to continue using it, and perhaps as it matures, it will grow into something more useful to me. (It is still in beta, and they have promised to rol out more features over the next few months. )

Tuesday, November 6, 2007

Wells Fargo's Response

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:

According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

Monday, November 5, 2007

Some newer ways to search for cheap flights

I've bought a lot of plane tickets this year. Well, five (and one more maybe in the works!), which is a lot to me. I would guess that plane tickets were my largest discresionary spending this year, and the previous year as well. I don't live in a major metropolitan area, so my flights always have a connection through a hub, and I haven't paid anything less $300 this year!

The usual methods
My usual method is to search ALL of the popular sites, and travelbuddy.com or travelzoo.com have useful ways to automate that. It might be overkill, since expedia or travelocity typically will turn up the lowest fares, but I don't want to miss anything. I particularly like those sites because of the ability to search a few days before and after your desired travel dates. (If you are a student, studentuniverse.com and sta.com are musts. Other sites won't find those deals.) Once I find the best deal, I look at what airline it is on, then go directly to the airlines site and search there. It is often the same price (or $5 cheaper), and it is always better to buy direct from the airline. If you miss your flight and bought a ticket through hotwire, you are basically out of luck.

I tried out Yapta
I heard about Yapta.com, and was intrigued with the idea of tagging trips and being emailed when the price drops. I tried to use it, but was ultimately disaapointed. First, it doesn't work with Firefox yet. I hate having to open up explorer just for that. Second, it doesn't work on Student Universe, where I get a lot of good deals. Most annoyingly, you are only able to tag exact flights with exact airlilnes, you can't just enter your dates for a general flight. It really didn't work out too well for me for searching for flights, but if you had already purchased a flight and wanted to try to get a voucher when the price drops, then it makes a lot of sense. I haven't been able to do that yet.

Farecast is another nice tool
A new favorite is FareCast. I did a search for my holdiay flight, and it came up with a total of $401. Now, that is a few dollars higher than the other sites, so it must add its own fees or something. Still, the airlines it lists as the lowest price agree with what I found. I would alwyas do a new search on expedia or somewhere else to verify, but it seems to have the right idea. For popular routes it predicts if the price will go up or down, and shows you a price history. It told me with 80% confidence that the prices will drop in the next 7 days. I waited a few days, and prices held steady, and the availablity of times to fly for the lowest price shrunk. I think it was a little off due to the holiday season. In general it seems like a good tool, but I'd be wary of predictions around the holiday season.

Using RSS on my iGoogle page
What I am liking the most about Farecast is that I can easily use the RSS feed and add it to my iGoogle homepage. I'm one click away from repeating the whole search. I think it will also show up if it does go down. Great! Unfortunately the RSS also only works for "popular" routes, and it is unlikely that most of my searches will be those routes.

Another nice iGoogle gadget is the Expedia fare calander. This would be the ultimate tool if it offered more airport choices. If I think I might want to fly to Chicago from Portland sometime in the next month, I could add this little guy to my iGoogle homepage, and see what the prices would be for almost date in the month. Thanks to this gadget, I have the option to fly to the city where I will be working next year and do some apartment hunting right after Thanksgiving, and at about $220, it will be the cheapest ticket I've purchased all year!



These tools are still a bit limited, but it a huge improvement from the days of travel agents and paper tickets. What I really want is a gadget that I can tag certain dates between two cities, and have an RSS feed when they drop. Farecast does this, but only for popular destinations. Does anyone know of a tool that will do this for all routes?

Sunday, November 4, 2007

Save $125 by sharing my "Biometrics"

My company came out with a new policy this year. We are required to either take a online personal health assessment and fill in data from our "biometrics" (cholesterol, triglycerides, etc.), or pay an extra $125 (per person) in health care premiums. They offered several sessions at work where they would take them for free, and the numbers were self reported.

Being young and relatively healthy, I wasn't opposed to the idea. Some of my middle aged co-workers were much more wary. Wasn't this a little bit too "Big Brother" for the USA? One could speculate where they are going with this approach. Next year, they might require those who have high cholesterol to reduce it, or else pay $125. Get your BMI within the healthy range, or else pay $125. Commit to exercise three times a week, or else pay $125.

If they do charge more for people who refuse to make an active commitment to improving bad health, is it fair? No one seems to dispute smokers surcharges anymore. The difference is that some of this is genetics, and can't be helped. I have naturally high cholesterol, and while I can improve it with diet and exercise, 2/3 of the number is made up by genetics. I would hate to be charged extra for something I have little control over.

The premise of the approach makes me a bit uneasy. However,it also seems like, done the right way, it might be something that will help alleviate health care costs for the country as a whole. You can't force people to chose healthy lifestyles, but one way to persuade people is to hit them where they will notice--their pocketbooks. If you could lower your premiums by improving your health, or having a legitimate reason why you can not improve, would you? Doesn't it seem fair that taking care of yourself would lower your premiums?

One immediate benefit of the program was that some people were made aware of their health status. This was particularly helpful for us young people who hadn't had our blood work done yet, but also for those who are a little afraid of the doctor. Sometimes seeing the numbers is enough to make a small difference.

I'm leaving my company shortly, so I won't know how this all will play out long term. Still, I wouldn't be surprised to see this trend continue in my future employer.

Friday, November 2, 2007

Unhappy with Wells Fargo (again)

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

Why college textbooks are a rip off

My freshman year of college, I believe I spent about $500 on college text books. Looking back, it was a foolish mistake, but I didn't know better at the time.

My first mistake was that I assumed that when a class said a text was required, they meant it. This turned out to be not true. Sometimes it was, sometimes it wasn't. Second, I bought books too late and there were no used ones left. Third, I didn't check the internet to compare prices.

Really, I think the college textbook industry is a huge rip off. If you've ever taken a class that recently switched from, say, edition 5 to edition 6, you may have noticed that the differences in the editions was primarily in the problem sets. Some texts may have major updates, but for the most part, the facts stay the same. Often times, the problems aren't even completely different, just altered in a minor way. How frustrating.

Not all professors played the game. One professor said that a text was required, but we could get any standard text relating to Control Systems we wanted. He pointed us to Amazon. He taught primarily from his lecture notes (and a text wasn't truly necessary), saving me about $100 that semester.

Also, why are we only given the option of hardcover texts? My boyfriend insists he loves hardcovers because they last longer (whatever). Shouldn't I have the option to easily purchase softcover to save some money? I did a semester in Hong Kong, and their book store didn't contain a single hardcover text for class. Not only that, but many of the students didn't buy the text anyway, as the professor often scanned the necessary material for the students. While that may violate some sort of copyright laws, not offering the softcover versions to US students seems unfair. In fact, I brought the two texts I bought (for a reasonable price!) in Hong Kong and sold them on Amazon in the US. I probably made a small profit, even though I priced them lower than the similar hardcover versions. Abebooks.com often offers softcover "international" versions of college texts. I used one from there for one of my graduate classes last semester.

At the end of the semester, the college bookstore offers to buy back your textbooks from you. This is another rip off. They try to tell you that buying and selling your books through the book store is "good for the college" because they donate money to various student groups. I'd much rather that they offer me a fair price for my books! If I can sell it for $70 on Amazon, and the bookstore will sell it for $90 in the store next fall, why on earth would I give it to them for $45?

I would speculate that this scam of the textbook industry trickles down to high school and elementary school, but since the books are provided for "free" (with tax money), people aren't as aware of it. I went to a private school and we had to buy our own textbooks. Rather than the bookstore running a scam to make profits off of used books, each family would put an envelop with a price inside the book they were offering to sell. The students formed a big line (I think you got a place according to a raffle number) and you would pick the books you wanted to buy. You'd pay the amount listed on the envelope, which was later given to the parent. Unless a class was switching editions, you could come out about even every year.

In later years of college, you could sometimes do a similar thing with classmates a semester ahead of you. These days, with facebook and other social networking sites hooking up buyers and sellers more easily, I wonder if anyone still shops at the bookstore.

Thursday, November 1, 2007

Frugality by way of procrastination

I bought some great black work shoes last week. Somehow, I fell in love with these Oxford Booties (left) by Marc Jacobs (that'll teach me to read fashion magazines). And no, I don't buy Marc Jacobs. Nor do I know what exactly I'd wear those with! I settled for a much cheaper pair of more workable (though less lovely) black booties (right). I still feel slightly like a supermodel in them, since they have 3 inch heels (and I'm already on the tall side).


What is my point? The black work shoes that I was replacing were purchased three years ago, and I wore them very regularly. In fact, they were falling apart, and should have been replaced a year ago. Can you see the missing piece on the bottom of the heel? How about the way that the toe is peeling off? They are SO trashed and unclassy! Why didn't I replace them sooner? In part, it was because I never saw any boots that struck my fancy and seemed worth paying the price for. Mostly, it was because I kept putting off buying them, thinking I'd feel like shopping for them in the following month. And my work isn't the type of place where anyone would care.

I also was intending on purchasing a beautiful white peacoat from Amazon.com. I probably looked at it at least 10 times over the last few months. But I never made the purchase. Tonight, I fully intended on sealing the deal and the coat has vanished from the internet. It looks like I'll just do without a white peacoat, unless I see something I love elsewhere.

These are a few cases where procrastinating has saved me money. Some other examples?
  • I hate doing laundry, so I make my clothes work for as long as possible. Do you really NEED to wash sweaters each time you wear them? I don't think so. Is this gross?
  • If I need to go grocery shopping and don't feel like it, I'll scrounge my fridge and eat whatever I have. I've been known to survive on cereal for several days
  • In order to save on toothpaste, I don't always brush. Just kidding, that definitely is gross!
Of course, this only works for some examples. If I'm too lazy to grocery shop and there seriously is nothing in the apartment, I just might grab some take out to please my stomach. Procrastination definitely is NOT a virtue.... but every now and then, it isn't as evil as people make it out to be.

November Goals

  • Resume tracking of spending!
  • Limit groceries to $30/week or less and restaurants to $75 total
  • Study for and do well on midterm for my grad class

Pathetic as it is, that is all I am going to do for goals. I have to buy Christmas presents starting this month, so I don't think I'll be able to save as much as I would love to.

In better news, my company announced it's profits for last quarter, and it looks like my year end incentive bonus might be about $3000 after taxes, and should arrive in very early December. That could be the final kick I'll need to meet my goal for 10k in my high yeild savings and 4k in student loan repayment!

Tuesday, October 30, 2007

Cosigning 23k of loans for my sister

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

October Goal Results

How did I do in October on meeting my financial goals?

  • Continue 401k and Roth contributions: Yes, but I'm considering reducing 401k back to 12% to flow extra into my savings. Most of my net worth increase is getting tied up in retirement accounts, and I need a little more in savings.
  • Limit groceries to $30/wk and restaurants to $75: Well, I didn't track my spending this month.... Ooops... But I would venture a guess that this is true
  • Contribute $400 to student loan payback account: I only contributed 300.
  • Contribute $1000 to HYSA: I don't think this happened either....
  • Finish writing post about student loans I volunteered to do for for Get Rich Slowly: Done

I really did quite poorly this month.... I need to set more realistic goals. I keep setting the bar too high, and then failing! I think that is better than setting the bar too low and always meeting them, but there has to be a happy medium!

To make myself feel better, here are some things that I did do in October:

  • Found a new job in California and negotiated salary
  • Had a performance review in my current job and was rated a 3-3 (it's a scale of 1 to 3 on two scales so 3-3 is the best)
  • Booked my ticket for the holidays, convinced my friends to meet in a city where we can have free lodging
  • Did decent on my graduate class midterm
  • Bought much needed new black work shoes (I'm stretching here!)

Obviously, my first goal for next month is to resume tracking of my spending. I'll have to think about the other ones.

Saturday, October 27, 2007

The high cost of coastal living

I spoke recently about how I got a job offer in California, making roughly 11k/yr more than I make in the Midwest. My company here pays pretty well for new graduates because there is a high demand for them. Even though they are located in a low cost of living area, starting salaries are not much lower than in high cost of living areas. Anyway, this raise will net me an extra $916 a month, which we will call $650 after taxes (optimistically?).

I've been doing a little math to see how this move will affect me. The biggest increase in monthly spending will undoubtedly be rent. I currently pay $575 for a small but relatively nice one bedroom apartment. I'm hoping to find something for $1000 (or less, but that seems unlikely) in California, probably equally small and not as nice. I'm secretly hoping that I'll have a roommate (my boyfriend) move in after several months, but this isn't something that has been discussed enough to count on, so I'm running the numbers without factoring that in. That is $425 per a month extra in expenses! That destroys a huge chunk of my "raise", making it an increase of a puny 2.7k/yr!

I will be able to take public transportation, but I doubt that'll save me any money since I currently live a 4 minute drive from my company and don't drive often. I suppose, one nice thing about a higher salary is that the company match of my 401k will be of a larger amount. If I want to go home, it'll cost me $300 for a plane ticket rather than $80 for a couple tanks of gas.

Luckily, the initial costs of relocating won't be too much of a burden on me. Not only do they give me $2000 for miscellaneous moving costs, they will pack and move my stuff, reimburse me for mileage and lodging and meals for the drive out there. With all of that, there still might be a bit of a hit to my savings, but not nearly as drastic as it could be.

I'm not making this move for financial reasons. It is for personal reasons, and for a desire to live in a big city, the dream of California living. But the impact to my finances is still there, and I hope that it won't slow my progress too far.

Thursday, October 25, 2007

Financial Disaster (not me)

My parents took out a $15,000 HELOC loan sometime last year in order to make some updates and repairs on their house in preparation to sell it. I thought it was sort of a bad idea and thought they should just save up some cash and pay for it as they go. At least for part of it. I think I bit my tongue, because it isn't really my place to offer unsolicited 'advice' and judge the actions of my parents. I did suggest that while they were waiting to spend it, they put it into a high yield savings account rather than a normal account, but beyond that, I stifled my opinions.

My dad has a bit of a sordid financial past and has difficulty managing money, so my mom was the only one with access to the account. But the repairs didn't happen. My dad kept putting it off, and putting it off, and I was wondering what the hold up was.

Apparently, my mom used the same PIN that my dad uses for several of his accounts. He was borrowing money from the account to pay some other bills (and I still am confused as to what bills these are). He finally told my mom, and then went to Alaska (I know, bizarre) because there was a lot of work for him there making a lot of money in a short amount of time. In fact, he's been there less than a month and has paid back whatever he took (I'm not sure how much it was).

I finally found out today, from my sister. My dad was supposed to tell me himself, but he didn't. I understand him not wanting to tell me, but it makes me think I need to change my attitude. I don't want to be judgmental (though it can be hard to hold back at times), I want to be helpful.

It's hard to offer suggestions to your parents. Suggestions that seem so obvious to me. For example, if you can't pay your bills then you don't get to go on vacation to the Bahamas. (Yes, the really are going. Though the trip was planned before this came to head, and they NEVER go on vacation, it still seems extravagant.) Or, open a Roth IRA and make contributions automatic. Cut up your credit cards if you can't manage them. Track your spending, at least for a few months, just to see what is going on. These are the basics!

Secretly, I considered pulling their credit report without their knowledge. I know their SSN's. There generally are some security questions that I'm sure I couldn't answer, but besides that, it's just a horrible and evil idea. It just isn't my place, even though I want it to be.

Someday, they won't be able to work. What do they have saved? Is it enough? How would my dad ever manage his finances without my mom watching over? Is it too late for him to learn? These are things that I worry about. Maybe that is why I have a personal finance blog--so no one ever has to worry these things about me.

Tuesday, October 23, 2007

Personal side of Federal Student Aid

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.

Monday, October 22, 2007

Say few sentences for an extra $5000!

This is a money making trick that doesn't work except in a very special circumstance--negotiating a job offer.

I'm in the process of relocating to California, primarily for personal reasons. I had an interview last week and received the official offer today. My current salary in a low cost of living midwestern city is about 56k. I was offered 65k to move to California (plus relocation costs!). I was excited to get the offer, but I immediately asked if that was negotiable. I had anticipated an offer in the 70-75k range. (Some random cost of living calculator states: To maintain the same standard of living, your salary of $56,000 in XXXX should increase to $103,122 in XXXXX, California. I think that is a bit high, and certainly less than I would expect them to offer me, but at least, a point of reference.)

The HR rep seemed surprised (which surprised me!), and said something like "Well, it is a 15% percent increase, but if you have justification, I can talk to the hiring manager."

Luckily, I wasn't negotiating for the sake of negotiating--I had my reasons ready to go:

  • The position is typically entry level, I have 1.5 years of directly related experience and am on the verge of a raise/promotion at the end of the year
  • I am 1/3 of the way done with my Masters Degree
  • I already have my security clearance (something that costs them several thousand to get!)
  • The cost of living is significantly different
The HR lady then called the hiring manager, and then called me back about 10 minutes later. She only could offer me an increase of salary to 67k, but they would throw in a 3k signing bonus. She reminded me that performance reviews happen early in the year, and that there would be tuition reimbursement.

The offer is much more attractive. I got enough money to fully fund a 2008 Roth IRA, just by listing a few reasons.

I have a phone interview tomorrow with another company for a different type of position. I think that the offer I already have seems like a more appealing job, but I want to see what this other position really entails.

This is the first time I've negotiated salary, and I'm quite proud of myself!

Saturday, October 20, 2007

Long Term Plans

I haven't written a post at all this month. I thought I would have more time for this, but I haven't been making it a priority. I just finished writing an extensive entry on student loans for JD at Get Rich Slowly. It was very rewarding, and reminded me of why I started this blog in the first place.

I still am not sure if I will meet my year end money goals. If I don't, I'm not incredibly worried, because I still made a TON of progress this year. Since I graduated in May 2006, I've mostly been setting up the foundation of a good financial future. I am still in the beginning stages, and I've started to think about what might come next. Long term goals have eluded me, but once the foundation is built, I want to have a plan for what do to next.

First, I would like to max out my 401k. This year my personal contributions will be roughly $8,000, far short of the allowed $15,500. Next year, I should be relocated to a higher cost of living area. Ironically, I believe that will allow me to save more of my income, because I plan to leave the percentages the same. This also will mean my employer match will be higher. Still, it may take a couple years before maxing out my 401k and my Roth concurrently is possible.

Second, I'd like to start saving for a house downpayment. This is very much a long term goal. I don't expect to be purchasing for five years, maybe more. Someday though, I would like a house, and I would like to be prepared for it.

Last, I'd like to start out a non-retirement investment account. This won't be for "play" money, but for building wealth that I can access before I reach retirement age.

I can't make much progress on these goals while still building an efund, paying student loans, and saving up for a car, but it is nice to look and see what is on the horizon.

Sasha

Monday, October 15, 2007

Was I poor?

Throughout my life, my sense of where I fit in financially has teeter tottered.

The early years
When I was young, we lived in a trailer court. Am I embarrassed of this? It depends. Some people really do look down on it, so I don't advertise that fact until I know a bit about a person's perspectives. As I get older, it seems to matter less.

I remember two things about the trailer court. First, I remember playing in our yard. We lived on a dead end street at the end of the lot, and my Dad was allowed to use whatever land he wanted to mow. So we had a huge yard with a homemade swing set, a sandbox, and a nice hill for our slip and slide. I remember the day my dad mowed his name in huge letters in the yard. We were delighted.

The other thing I remember is when a naked man was running through the trailer park. I don't specifically remember seeing him, I don't remember why he was running, why he was naked. But I do remember my dad taking him inside our trailer, giving him a shirt and some pants, and helping him on his way. He worked at a golf course and gave my dad free rounds after that.

When I was in third grade, we moved to the house my parents live in now. It is a big house, probably bigger than we needed, in a new development. They did a lot of the work themselves (my dad and his friends). For the rest of grade school and jr. high, I never felt that I lived in a somewhere "less" than my friends.

High school
I transfered to a private high school in ninth grade, and the insecurities were back. We had enough money, but definitely less than my classmates. I didn't have a nice car. Our house was less impressive than many others. Several of my classmates had pools (a big luxury in a northern midwest state!), everyone shopped at Abercrombie, and people had a lot of nice stuff.

Still, my parents didn't seem to deprive us. I almost wish they did, for their sake. We did have crappy cars, but were allowed to buy brand name clothes. My parents paid for a trip to Germany, not to mention the tuition for school (though there was a discount because my dad did some electrical work for them). Even though we had less than others, we still had enough.

The scary years
During this time, my dad borrowed a healthy sum of money to start his own electrical business. I still am not clear on the details, but it didn't work out as well as planned. There were some issues with him not getting paid for a large job, some issues with the person who lent him the money, and... well, starting a small business is hard. I'm not sure it was planned out very well. It was hard times, but I wasn't aware of it until a little later on. It ended with my parents working with someone to file a Chapter 13 bankruptcy. They got to keep their possessions, but had to pay a lot of money back to the creditors. I think the payments were something like 3000 a month for 5 or 7 years. My dad became responsible for those payments, and my mom paid the rest of the bills.

Surprisingly, I don't remember there being major cutbacks in my life. We continued to drive falling apart cars, but everything else seemed to go stay the same. Still, it was a scary time for me. Every so often, my dad would fall behind on the payments, and someone would come to our house with a certified letter. I must have opened one once, because I somehow knew they said something like "pay now, or we will be forced to reconsider this repayment plan." More than once, I cried about this, even once I was in college and not relying on them. I was scared for their sake and couldn't understand how they could have let this happen.

But they made it through, making their last payment sometime last year. It actually helped me out a lot, surprisingly. Because they were paying so much money towards the debt, I was able to qualify for actual GRANTS for my college for several years. Free money that I never had to pay back!! So, if you can't help your kids pay for college, consider going bankrupt right as they are entering. (No seriously, don't.)

The split
During college, you start to separate from your parents both emotionally and financially. They generously helped me get a decent car (about 3k from them and 1k from me), paid my car insurance and repairs, health insurance and helped out with some minor expenses on occasion. After living on my own for several years, they let me stay at home rent from for a few semesters so I could save money. But for everything else, I was on my own.

After graduation, the difference was even more marked. I'm completely financially independent from them. Now, I feel very "rich", even though I only have about 8k net worth. The feeling comes from knowing I'm doing the right things with my money and knowing my future looks bright. To me, feeling poor means being scared about money. I don't think I'll ever feel "poor" again.

As for my parents, they are doing pretty well these days, I think. I worry about their retirement. The bankruptcy involved an IRA rollover (I know this only because it affected my financial aid), and I know my dad has no retirement accounts as of today. He does have a pension plan through his union, but he also hasn't worked for the union regularly for about 10 years! I asked him about it, cautiously, and he said his house was his retirement. I commented I wasn't sure about that plan, but let the subject drop. I would assume my mom is still contributing to some sort of retirement plan, but I'm not sure of it. I hope to bring it up with them one of these days, but it is a hard step to take.

I don't think I was ever poor in the true sense of the word, but I don't feel that I was exceptionally privileged either.

Friday, September 28, 2007

October Goals

This months goals are pretty basic, nothing fancy, but will still require some good hard savings.

1. Continue 401k and Roth contributions

2. Limit groceries to $30/wk and restaurants to $75

3. Contribute $400 to student loan payback account

4. Contribute $1000 to HYSA

5. Finish writing post about student loans I volunteered to do for for Get Rich Slowly.

September Goals Results:

September Goal Results

  • Continue 13% 401k and 100 to Roth IRA
I actually upped it to 15%. Why? Because it is money I can't touch, and I really want it to grow.
  • Replenish travel fund with $100 (and likely, drain it again to buy a ticket to LA for october)
I did contribute 50 to it, then bought my plane ticket.

  • Contribute 450 to student loan payback account
I was able to contribute 500.

  • Contribute 875 to HYSA (275 more than autodeposits... slighlty cheating since i expect some of that to come out of todays paycheck)
Well. I am certain this didn't happen. There has been a change in the way I use my HYSA, but the balance has only increased by about $200. Ouch. It was a big spending month, unfortunately.
  • Spend less than 100 on restaurants and less than 30/week on grocery.
YAY, this one I managed. Restaurant was about 90, and grocery was right on track. I'm going to move restaurants down even more next month.
  • Finish and send in grad school application, stay up to date in class
Grad school application has been submitted, I'm a little behind in class, but will but up to date by Monday.

I really wasn't that sucessful this month. I had some unplanned spending (new camera, car repairs) and some expensive planned spending (plane ticket) and bought some clothes at Gap Outlet. On the plus side, I sold about $100 worth of book (mainly, a $70 textbook) on Amazon, so that balanced things a teeny bit. But still, let's hope for a much better October!

Monday, September 24, 2007

Extra money

I sold a few things that were only cluttering my life on Amazon and earned almost $40 (after fees). Not too impressive, but then again, $40 I didn't have before! I also sold some clothes to a consignment shop, but they only took 4 things and paid me $20. Again, it is money I didn't have before, even though the amount isn't all that impressive.

It is fun earning extra money, even though it is on things I once paid much more for.

In downfalls, I spent about $100 at Gap outlet this past weekend, not to mention a few birthday gifts I had to purchase. Still, my net worth is growing each month, so I'm doing something right.

I increased my 401k contributions from 13% to 15%, with the understanding I probably won't meet my savings goals for my regular accounts. Depending on the year end bonus, which I hope to be around 3k after taxes. It might be wishful thinking, but that would really be a good boost to close out the year.

My current task is figuring out auto insurance... I'm being kicked off my parents plan!

Wednesday, September 19, 2007

Hobbies

As briefly mentioned in my last post, I signed up for a photography class, once a week for 2 hours for the next 8 weeks. My $200 point and shoot camera is most likely the least expensive in the class. If I ever get seriously into photography, I will need an SLR, but I specifically chose a nice pocket sized camera because once I'm done with the class, it'll fit best into my life. The class only cost $60, quite a bargain.

The guy standing next to me told me I will be able to buy myself a nice new camera with my Christmas bonus. My savings goals have been derailed by some unexpected expenses, so it is unlikely I will splurge on a $500-$700 camera, especially since I'm really just an amateur.

There is nothing wrong with spending that much on a beloved hobby, but I was shocked at the number of people with really NICE cameras and no idea how to use them. The instructor asked if we knew how to control the fstops, and a lady with one of the nicest cameras claimed she had no idea. Wow.

Between work and graduate classes, I don't have that much time for hobbies. My most expensive "hobby" is traveling, but I don't spend time doing it regularly, so it may not qualify as a hobby. Perhaps it is simply a passion. I also enjoy writing and personal finance, two very frugal hobbies! I enjoy reading, which can be frugal when I don't insist on owning the books.

I also claim that cooking is a hobby, but I can be quite a wreck at it! I tried to make instant oatlmeal (with flaxseed, perhaps that was the issue?) in the microwave, walked away, and came back to find this:
What a way to start a day. (But, I did eat what was left in the bowl, and it was just fine.)

Tuesday, September 18, 2007

The price of carelessness (and vacation)

I went on a long weekend to visit a friend this past weekend. We didn't do any major vacations this year, so I am enjoying several little vacations. Spending money on travel is something that usually doesn't pain me, as friends and new places are something I value highly. The trip was pretty inexpensive, considering plane tickets out of my city are rarely less than $300. After that, the costs were minimal.

Cost of vacation:
$309 - plane ticket
$5 "breakfast" at airport (is potato chips and iced tea really breakfast?)
$11 lunch for me and friend
$15 a rather disappointing sushi dinner.
$9 brunch at a really cute organic restaurant
$10 magazines at the airport (Hmmm, sort of regret this one!)
$5 for Pride and Prejudice (A good deal for a book, and one I want to read anyway)
$5 lunch at airport
$20 parking (could have asked a friend, but the convience was worth it to me)

That is a total of $384, which is not bad at all. Our activities were mostly outdoorsy free things, so that was inexpensive, plus that is also more enjoyable to me.

The cost of carelessness
The previous summary neglects to mention the fact that I left my digital camera on the airplane. I tried to chase it down, but I am now certain it is lost into the abyss. It was a nice camera--a Kodak Easy Share Z740, with 10x optical zoom --but at the same time, I sort of hated it. It was too bulky to easily fit into my purse and sort of embarassing to bring out in social settings. It was a gift from my parents, and while it took amazing pictures while I was abroad last year, I did want a smaller one. Still, I would have waited. And kept this one for more professional shots. Looking online, it sells new for $279, which is painful to know. I'm not even counting the 1G memory card that was inside of it.

I also recently started a photography class, so waiting to buy a camera was sort of out of the question. It was Monday, I needed one by Tuesday at 7:00. I did some research and quickly determined I wanted a canon SD850, a subcompact which sells for about $350 in local stores and just over $300 online. I also looked at the SD750, SD1000, and some in their A series (not as small). I ended up settling for the SD1000, at $250 in local stores. I didn't think I could wait for shipping, but at 5:27 pm, I noticed that amazon.com said if I bought it in the next 3 minutes, I could have it the next day. Even with shipping, the total was only $225, and I didn't have to pay the sales tax I would have at Target or Best Buy. I had about 20 seconds to think about it, so I did it. I then found a 2G SD card for $18, which is on the way (slowly, due to free shipping)

In summary:
Cost of vacation - $389
Cost of carelessness - $243

And the vacation money was much much much more fun to spend. Ug.

My next major expense is yet another plane ticket... It looks like it will be $315 for me to fly to Los Angeles to visit the boyfriend for a long birthday weekend in October, so I estimate about 400 total, but I might be low-balling it. I'm going to do better with the airport purchases by planning ahead, and maybe have a friend to drive me to the airport (though $5/day really is a bargain).

After that, I would like to say, no more vacations for months (they eat into my savings goals), but then it is Christmas season (present time), and we are considering new years in Las Vegas. After THAT, no vacations for quite some time!