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Thursday, January 31, 2008

Should you neotiate your starting salary?

Common knowledge is to always try to negotiate your starting salary. In most cases, the worst that can happen is they will say no. There is a possible exception for entry level positions at large companies, when it is hard to distinguish yourself from the next person holding a similar degree. You hear entry level people claim they are special because they have good grades, an internship or two, and extracurriculars. Well, great, but so do most people (good) companies interview. It isn't that you aren't special, it is just that the company probably doesn't know it yet. The company I worked for right out of school had a standard "new hire" offer, and it was basically take it or leave it. Smaller companies probably are more flexible. It still might not hurt to ask if the offer is negotiable, but be prepared to back up your request with reasons why you deserve more.

When I was job shopping for my relocation, I was in a unique position. In my industry you typically are moved up from Engineer 1 to Engineer 2" after roughly two years, if you are a good performer. (While I was almost certainly doing Engineer 2 work by the end of my last job, HR had strict rules about minimum amount of experience.) I was job shopping with 1.5 years of experience, so I still had to look for Engineer I jobs. Yet I didn't want to be caught by a "standard new hire offer", since I did have some experience and some graduate coursework.

I think that my first job offer was a standard new hire offer. I easily negotiated an extra 2k and a 3k signing bonus. The second job offer seemed to take my experience into consideration, and came in 2k than negotiated first offer, and a similar signing bonus. I chose the second, not entirely for monetary reasons.

With the salary being just 1k below my hope of 70k-75k range, I was faced with the decision of whether or not to ask for more. I thought the offer was fair. I thought they took my experience and graduate coursework into consideration. If I were to ask if it was negotiable, I'm not sure what I'd say when they asked "why do you think you deserve more?" So I didn't negotiate.

Now that I'm on the inside, I have acess to their salary tables. Here they are for my job category:

Level Low Mid High
1 $42000 $62000 $78000
2 $49000 $72000 $90000
3 $60000 $88000 $110000
4 $72000 $105000 $132000
5 $88000 $129000 $162000
6 $102000 $150000 $187000

So, you can see that my offer was above the middle for Engineer 1, and poised quite nicely to be moved into an Engineer 2 position, provided I perform well. Could I have asked for more? Yes. Would they have given it to me? Maybe. Maybe not. The range I was hoping for more closely lines up with the middle of the Engineer 2 range.

While maybe I could have squeezed out a few more dollars, I do feel very fortunate to be here. It's a top company, and has many graduates from top universities. There are lots of brilliant people here. I went to a state school with a good regional reputation (at best) and no reputation in this area. I now have an opportunity to finish my MS degree at a top ten university in my field. On their dime. I should be done in less than two years if they accept my transfer credits. Nice. The competition here is more stiff than at my last company--I would have easily been a star at my last company--but that will be good for me. Always surround yourself with people smarter than you are.

Wednesday, January 30, 2008

Health Insurance options

I signed up for health insurance benefits at my new company today. I had essentially three choices.

HMO
I've never used an HMO, and though I have heard some negative press about them, I think it would work ok for me. I don't have health issues and am a low maintenance customer. Free to me, minimal copays ($15 for my monthly prescription). I don't think I would mind being forced to deal with a Primary Care Physician.

Traditional PPO account
This cost about $16 per a bi weekly pay period, so just $416 year for premiums. Same copays as the HMO. You can see any in-network doctor and have a lot more freedom in your medical care. You can see out of network doctors for reduced benefits.

PPO + Health Savings Account (HSA)
This is free to me, but is a high deductible plan. Preventative care is covered 100%, but everything else is out of pocket up to the deductible, then benefits kick in. With this plan, I am eligible for a HSA to put pre-tax dollars in to spend on medical care, which carry over year to year. My company will contribute $700 to this account. I believe the yearly deductible is about $1500, but I can't quite recall.

I used a HSA at my last job (which had worse benefit options) so I'm already comfortable with them. I felt doubts about my HSA at the end of last year, because almost all the money I put in I took back out to buy my prescriptions with. My company didn't contribute. However, regular insurance was still 60/mo, so I came out... Well, I think I came out a little behind using the Health savings Account at my last job. But you live, you learn. I pretty much immediately ruled out the traditional PPO, because it seemed so similar to the HMO, except you could see more doctors and you had to pay money for it. I didn't need the freedom. The HMO seemed like a really cheap option, so I considered it.

I was left to debate the HMO and the PPO+HSA. Barring catastrophe, I need very little medical care. I see the doctor once a year for a women's health check-up, and use birth control each month, which does cost $45 without coverage. Last year I got an eye infection and was fixed up for about $100. I exercise, but I don't play any physical sports. Or any sports, really.

So, I went with the HSA, and chose to contribute $1500 of my own money to it. At first glance, that seems like the most expensive choice. My company contribution will cover my prescription costs, and probably nearly all other costs, so the plan is still free to me. Except I'll also have $1500 stored up for future health expenses. Next year, I shouldn't have to contribute much at all, though I probably will try to build it a little each year. In the short term, it is less cash in my pocket now. But the money being set aside is mine. It offers flexibility in the long term.

Something to note, a big disadvantage of HSA's are the fees. Most plans you can find online have high fees and/or no investment options. My HSA administrator really is no better, but the company pays the fees for me. I'm not intending to use this account as a sort of IRA for health (as suggested by Jonathan on MyMoneyBlog), so investment opportunities aren't a big priority either.

Did I make the right choice? Well, it depends on if I have any major surprise medical issues this year. Let's hope it was a good choice.

January Net Worth and Goals

It is that time of the month again.... Time for a net worth update!

As expected, my net worth took a hit this month. I switched jobs and was only paid for less than 2 weeks in the new year. Plus I front loaded my pre-tax Health Savings Account at my old job, so my paycheck was extra small. Not to mention the dip in my investments and extra spending associated with moving. Oh, and I paid rent in two places this month---$575 in Iowa and an astounding $1425 in Los Angeles. (And my new place is quite a bit smaller.) Luckily, I really am only obligated to pay for half of January, so come February 1st, I have to pay "only" $762.50. There was also a $500 security deposit for my new place (I'm due $100 from my old place), and a modem that will be eventually covered by rebates for $100.

With all that said, here are the results:

January Net Worth: $11,235, down $1,824, or -13.97% from $13,059.

The detailed numbers can be seen on my NetworthIQ page (sidebar). I did move $1000 to Roth IRA, which hurt my cash savings. The rest of the loss was expenses described above. It is worth noting that I should make up all of that next month (and more), provided my relocation money and signing bonus are processed.

I took a break from monthly goals for December and January, due to all the transitions. I'm going to do the same for February, at least until I get my first paycheck and I know exactly what I'm working with.

Tuesday, January 29, 2008

I "saved" $25 on my grocery bill

I went on my first full shopping trip since relocating and moving into my apartment. I looked at the current balance of my grocery bill in horror. How on earth was it at $79 already? And they still were ringing up my order!! The grand total was $95, then they swiped my Ralph's card and it dropped to $70. It is ridiculous that they do that. It is just forcing you to use a grocery card if you want any discounts at all.

Anyway, $70 is still much more than I spend on weekly groceries. About double! Although part of it was because I'm restocking almost everything, it still was a bit excessive. I think my solution will be to make this last two weeks.... so no new groceries until Februrary 12th! I am pretty sure I can do it. When I complain there is no food to eat, I usually mean, there is nothing I feel like cooking and eating.

What on earth did I buy? Well, I won't copy my whole long receipt, but here are some of the more expensive items on the list.
Chicken breast fillets $8.90. I don't usually buy meat, actually. I'm not vegetarian, but I'm not a big fan of meat and I don't really know how to prepare it well.
Frozen Strawberries, huge bag, $8.50 (should last a very long time. For smoothies)
Lunch meat, 2 packages, $5 (much cheaper than buying a sandwhich!)
Peperoni to make English muffin pizza's: $3.50
Lunch cheese
: $4.19, I forgot to price shop this I think
I also bought butter, milk, bananas, coffee creamer, 2 boxes of cereal, frozen broccoli and lots of other miscellaneous items.

There were some things on the list I didn't get. I had a frugal recipe that called for ziti, so I set out to the pasta isle. When I didn't find it, I realized I wasn't entirely sure if ziti was pasta at all. Maybe it was a cheese? So I'm back at home, ziti-less and just looked it up. It was pasta after all. I also could not find any muffin mix to make bran muffins. Maybe no one else likes them?

I liked to have a grocery budget of about $120/month, but I may have to up it. We'll see.

Shopping due to weight fluxuations

I must have lost a little weight over the course of the last year, as most of my jeans have been getting a little baggy. It wasn't a significant ammount, but I'm small already, so five pounds in either direction can make my clothes fit differently. Then seven to ten pounds means a whole new pants size. Seems like Mapgirl is having the opposite problem which is admittedly more common. Anyway, to remedy this, I ordered some jeans from Banana Republic on sale for $31.99. I couldn't try them on, so I crossed my fingers on the size, 2L. I only need "Long" sometimes, but that was all that was left. This was before I picked up two new pairs on sale at Jcrew for about $35 each. I really didn't need 3 new pairs, just two! The jeans arrived yesterday, and are too long, as I suspected they might be. It is a bit of a releif, now I don't have to decide weather or not to return them. Obviously, they must go back. They were cute jeans too, so I would have been tempted to keep them. I have to eat $6.00 in shipping (couldn't find a free shipping code), but I will still get $32 back on my card. That'll teach me to buy jeans without trying them on. (They were only available online anyway. The ones in the store didn't work out either.

My new rule on clothes is nothig that isn't directly appropriate for work for the next six months. Does that really mean no fun clothes until June 29th? Yes! It is not as ambitious as other young bloggers no clothing resoluitions (Meg and Wanda are two examples), but it is a step in the right direction. Also, I just donated a huge pile of clothes I never wore to Goodwill, so another rule is, for every item that comes into the closet, something has to go in a donation pile. That is super logical, will help with clutter, and will inspire extra cautioun in purchasing! An exception may be made for shoes, but with caution.

Also, I have a couple pairs of pants I had made for me when I was in Hong Kong that are now a little too big as well. Some don't have belt loops, so they are nearly unwearable. In fact, I wore one pair with a safety pin in an emergency situation. Classy! I think it is time to find a tailor and get those pants wearable again. Much more frugal than buying more dress pants! Do any of you have experience with using a tailor? And if I get them taken in, can they later be taken out if necessary?

Either that or I can fatten up a little bit... but that is also expensive because my metabolism would require a big calorie surplus to accomplish that!

Sunday, January 27, 2008

An alternate solution to internet and cable

My internet and cable aren't being installed until Saturday. Yet here I am, on the internet from the comfort of my own apartment. That's right, I'm mooching off someone else's unsecured connection.

How unethical do you consider this? I know some people who do it regularly as their primary source of internet. I usually do it in situations like this--I don't have legitimate access to the internet, but I have a legitimate desire to be on it!

To be honest, I'm not certain of the security concerns of this. If I'm connected to their network, could they potentially access my computer? I don't think so.

I spent the day settling in to my new apartment. While I filled up my new Ikea dresser, it tipped over and nearly killed me. No worries, the only casualty was a barely noticeable cosmetic piece we are going to try to repair later this week. I listened to NPR all day, and I am pretty sure that once my six month deal runs out for cable, I will be able to do without it. I'm not going to lie, I'll miss some of the absolute crap TV shows that I watch but my life is probably better off without them (example: Real Housewives of Orange County). The shows that I really love (when there isn't a writers strike) are all available online (Office and Grey's).

Internet I couldn't live without.... but could I just mooch off a neighbors connection? I probably wouldn't. Not only because of the moral concerns, but because it may not be reliable and completely secure. What do you think?

Expenseive weekend, again!

This weekend was very very very expensive. I feel like I've said that too many weekends in a row! I purchased a nice big dresser from Ikea, and now have real drawers to put my clothes in! That was a hit of $150, but money well spent. Then I also bought some other random organizing supplies--my closet has a lot of shelving and I want to make it organized and neat. By the time I left Ikea, it was a bill of over $220! What a dangerous store! I didn't even buy everything a needed wanted: more lighting, shoe rack, coat hooks, and some decorations.

I somehow got tricked into taking the boyfriend and I out for sushi. I wasn't exactly tricked, but the sushi was pretty over priced, and that was another $40 out the window, just like that. I asked him how often he thought we should go out to eat, and suggested once a week, and he said maybe less, once every two weeks. That's what he says in theory, but he has suggested eating out several times this week. I don't mind taking us out to eat sometimes. However, I do need him to understand that he can't say one day "Let's save up 150k in three years!" and then the next day say "I need money for the take out!" I was getting a $35 meal stipend while I was in the hotel, however, that meal stipend was my only income for a week and a half!

We wanted to meet up with my boyfriends friend last night, who I hadn't yet met. His friend suggested going out to eat (again!), then suggested just eating at whole foods. So i paid $7 for a sandwich, and then we bought a $13 bottle of wine.

So that is the boring details of my weekend spending. I'm afraid to add those numbers up, but.. $280? Yikes!! Was my life more enjoyable when I didn't feel pain every time I paid $7 for a sandwich? I think I need to loosen up about things and realize it is just money. Not spend more, or not cease to think about purchases. But if a purchase is something I ultimately decided I want to spend (dresser), have to spend (drivers license fee), or am willing to spend to go with the flow (sandwich from whole food), what is the point of getting all worried about it?

I think I get my first paycheck February 7th. To say that I'm anxiously waiting would be an understatement!

Wednesday, January 23, 2008

New cable and internet service

I'm in the process of moving into my new apartment. Technically, I've been paying for rent since January 15th (they wouldn't allow me to change my move in date), but I'm still getting set up.

In apartment buildings, you often don't have a choice for your cable television and internet provider. My apartment is serviced by Time Warner, and that is my only choice for TV. I was offered free installation and $30/mo for digital cable and $30/mo for internet for a limited six month period. A cable modem is required, but they had a deal where you could get a "free" modem through rebates. There also is $100 cash back in rebates for new services.

So..... Wow. A lot of rebates involved! The rebates are offered through broadbandoffers.com, which a quick Google search turned up lots of negative reviews. Still, I'm going to file the rebates anyway, get delivery confirmation for a couple bucks, then cross my fingers that they will eventually send my $180 worth of checks. Oh, and "free" didn't include shipping or CA state tax, so it wasn't exactly free, but $20 for a cable modem is reasonable, I suppose.

I think that negative reviews are par for the course when it comes to rebates. If everything goes smoothly with your rebate, you aren't likely to go online and write a happy review. But if something is screwed up, you may go write a bad one. I read a lot of negative reviews about the company I bought my laptop from, but I received the over $200 in rebates. It just took a long time. That isn't to say that mail in rebates aren't a pain in the butt. They are. But I'm optimistic. I was going to sign up for the service anyway, so if they want to give me $100 to do something I already planned on, then great.

To me, $60 seems reasonable and fair for internet and television. I've never had a problem getting fair and reasonable service... for the first six months or year. However, once the promos end, the same service jumps to about $100 a month, which seems high. Besides pulling the personal finance trick of asking for a lower rate, I probably will switch to cheaper internet and drop the cable to get the price down to about $45 a month. With cable, it would still be $80/month, which is pretty expensive to me. Maybe once my promo ends, I can look into options like DirectTV and DSL services, to see if they are viable options.

Tuesday, January 22, 2008

Free time... to browes ikea.com!

So, not having a job is expensive! Not only do I not have a paycheck showing up until February 7th (yikes, last paycheck was last Friday, and it wasn't for the full amount), but I have more free time.

Free time in which to think about how better to utilize my new apartment.... My new apartment is smaller than my last, and things don't quite fit the way I'd like. Some of my furniture is nice enough, but everything feels too crowded. Crowded, like I took a 600+ square foot apartment and moved it into a 500 square foot apartment. One hundred square feet is more than you would think Or, more than I would think. Everything just feels cluttered, and I don't like it.
Really, why are flat screen TV's still so darn expensive? My living room would look at least 3 times more put together if I had one, but it just isn't worth the price.

The kitchen is teeny tiny (one drawer for the whole kitchen?), so my buffet that used to live in my old kitchen has been promoted to TV stand. Except it doesn't match the rest of the nice dark wood in my living room. Is it important enough to change? How important is it for woods to match? Probably not incredibly important, though it probably would pull the room together a little more. And the (already small) kitchen table? Well, we are storing that under the bed for now.

My bedroom is a mishmash of cheap furniture, but it always was. I used to have a "red" theme going on, but it seems to have vanished with the curtains and duvet cover. Now it is sort of a blank slate. Do I want to do anything with this? I also don't own a proper dresser or chest of drawers. It's true. I keep about half my belongings in plastic drawers (hidden in closet!) and the other half in a cheap thing from Target, half bookshelf with some felt-type drawers. I am plotting a trip to IKEA and am dreaming of purchasing this chest of drawers, in no small part because of the little mirror on top. I'll have to see it in person to see how sturdy it is.

Should someone who doesn't have a job really go to Ikea??? Okay, I have a job. I just don't start until Friday...

Monday, January 21, 2008

Most depressing day of the year?

Did you hear the news stories that claimed that January 24th is most depressing day of the year? (That particular article was from 2005, but the theory still holds.)

It's partly due to the weather, partly due to a "hangover" from Christmas. Our credit card bills are due, although I'm sure no responsible pf blog readers charged Christmas on a credit card. If we made new years resolutions, it has become obvious we aren't succeeding. There are no major holidays to look forward to.... And to top it off, your investments probably are doing horribly!

I try not to follow the stock markets too closely--I'm a long term investor and shouldn't worry that my 401k has lost a bunch this year. But hearing about the overseas market on Monday (US had a holiday) and the overnight markets on Tuesday, i feel like we are in for a beating tomorrow. Tomorrow may be the more depressing than today supposedly was! But, it's not like I follow the stock markets too closely or anything. . . .

First time purchaser of car insurance

I've been doing some research on car insurance, now that I'm finally getting myself off of my parents policy. Yeah, I know, I'm a mooch! I originally budgeted $100/month for auto and rental insurance policies. Depending on the coverage i get, this may be too high or too low... But it seems close to right on. I've been pricing it out at Geico for now, and once I've firmed up the level of coverage I want to pay for, I'll price shop with other companies. Perhaps there is a discount through my new employer. My cousin also sells insurance, so I'll be sure to get a quote from her.

Here is a chart of the different prices I was quoted for different options from Geico. (BI = Bodily Injury, PD = Property Damage, MED = Midical, UI = Uninsured motorist, COMP = comprehensive and COLL = Collision). The BI and UI went to higher levels, but Geico told me that I had requested too many quotes before I could fill in the whole chart!


Most people are probably pretty familiar with auto insurance terms. I am not. I've never shopped for insurance and had no idea what 15/30/5 meant. Luckily, all the insurance sites did a good job of explaining these terms, and there was also a nice article at the Smart Money site that covers the basics.

To determine the level I need, I checked out emunds.com, which recommends:
General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don't buy excess coverage.

Ok, simple. I don't have much for assets, but to go from the state minimum of 15/30/5 to 25/50/25 was only about $40 over the course of six months, so i decided to buy up. In particular, the property damage liability was cheap to increase, so I did. There are a lot of expensive cars in this city, and $5000 wouldn't begin to repair most of them. As my assets increase, I suppose my coverage levels also would have to increase. I threw in uninsured motorist coverage, just in case. I declined medical (i have medical insurance), roadside assistance and rental coverage.

Now it was time to look at the expensive stuff--collision and comprehensive. For $45 for six months, comprehensive seemed like a good bet. My parents car was stolen last year, and they were kicking themselves for not carrying comprehensive insurance. The next question I was faced with was the biggie: do I want collision insurance? My car is about 8 years old. It's a Dodge Stratus with 80k miles on it. Oh, and it has a salvaged title. It's not exactly a junky car, but it's defintely not nice either. I looked up the Kelly Blue Book Value, and at most it is worth $3400. They won't do an estimate for the salvage title, so it is defintely worth less than that. The cost of the highest deductible ($1000) is $144.00 for six months. For that I'd be getting about $2000 worth of coverage.

Reasons not to carry collision:
  • I have an emergency fund that could buy a cheap car of similar (or better) value
  • I put a line item in my 2008 budget for a new(er) car fund
  • It isn't recommended to buy collision/comprehensive if the premiums cost more than 10% of the amount of coverage you are getting (value of car - deductible)

Reasons to carry collision
-I've never driven in a city this large before, and I'm a little nervous about it
-I haven't been in an accident since I was a teenager, but I'm not the worlds best driver
-I can afford it in my budget.

I decided that for the first six months to one year living here, I'm going to carry collision insurance. Then I'll re-evaluate my options. At that point, if I'm still driving this car, I'd probably drop it. Also, the difference in price for $500 deductible versus a $1000 was almost negligible. Even though I'm generally a fan of higher deductibles (or rather, the lower premiums that come with them), I chose to go with the $500 deductible.

Now that I know exactly what I want, I'm going to see if I can get it for a better price. At first glance, Geico seems to have a really good price, but I want to check a few others before committing.

Saturday, January 19, 2008

New job, new city, new expenses!

After a stressful week, I'm finally in Los Angeles for good! That's right, I live here now! It is still sinking in that I can go outside without a coat (and hat and gloves!)

Actually, it could have been MUCH more stressful. My new company paid for movers to come in and pack up all my stuff. They pay to ship my car. They bought my plane ticket, and paid for a hotel. They are currently putting me up in an extended stay hotel and giving me $35 per diem for food. And paying for a rental car! So I really shouldn't complain. My flight was delayed about two hours and I didn't get much sleep, so yesterday was sort of awful. But now, things are looking good.

Unfortunately, I've been really loose with my money lately. I don't know why. I need to stop! I will stop!

Random Expenses:
  • $50 in miscellaneous supplies to clean my apartment for move out
  • $150 in random pre-trip spending (book, suitecase, god knows what else at Target/Walmart!)
  • $25 at a "going away" meal with a few friends.
  • $10 at the airport for food and orange juice (was feeling sick)
  • $6 for a latte and snack at Starbucks in the airport in Chicago. I later spilled pretty much the entire latte. What a waste!
  • $500 security deposit for new apartment.
Upcoming expenses:
  • Tipping the movers. I'm not sure how much but maybe $100 for the three to split. (Any suggestions??)
  • Next months rent. I get to pay half priced next month, so this is about $700
  • Two belated birthday presents for my sisters, about $50 each
  • Random move in costs (replacing things that I didn't bring with), probably less than $100 if I'm careful
Luckily, I have some upcoming income:
  • 21 hours of pay for my old job's leftover vacation
  • $1000 money as part of a relocation package. I think this is tax assisted.
  • $3000 signing bonus (not tax assisted)
  • $30 refund from the cable company
  • $100 security deposit refund from old apartment
  • New and improved paycheck!

Cutting my hair costs

I'm not big into beauty, hair, and make-up. That isn't to say I'm not into looking nice, I just don't get into it the way some girls do. I wear minimal make up and can't do much with my hair beyond straightening it or pulling it back.

However, after graduating college, I started highlighting my hair again. I quit during college because it was too expensive, my mom wouldn't fund it like in high school, and really, no one cared what my hair looked like. These days, my routine is to go in for a nice cut and highlight touch up about once every three months. My hair dresser was always encouraging me to come in more often, but I stretched it out as long as I could. If I got my eyebrows waxed, it would run me about $150, which averages out to $50/month on hair care.

The hair cuts I still like. She was really good, and I'll pay for a good hair cut. But I'm considering quitting the highlights and sticking with my natural hair color for awhile. It's easier to deal with and healthier for my hair. Highlights look really nice, but I've looked through some pictures of me with my natural color, and I think I can deal with that. It just doesn't seem worth it to spend that much money on my hair right now.

What do you spend on hair care?

Thursday, January 17, 2008

Professional Wardrobe

I read a lot of personal finance blogs. I've read many great articles from young women my age who talk about how to build a quality professional wardrobe.

I've sort of lucked out with my current job. The standard dress code is "business casual" but it definitely leans much further towards casual than many companies. There is a loose policy of "jeans Friday" but many many people in our department wear jeans every day. While I did have to buy new clothes for a new job (my college gear really couldn't even stack up to business casual), I didn't have to invest in business suites or expensive shirts and trousers.

To top it off, I work in in a midwestern city with terrible shopping. We have Gap and Express (which both occasionally have decent work clothes), but no Banana Republic, no J. Crew. There are also some upscale department stores, but they just aren't worth going to. (And that is just my complaints about work clothes, don't get me started on finding stylish outfits.) I'm not saying everyone at my work place lacks style... But come on, we are engineers and there is exactly one other girl under 30 on my team, so I really don't have a lot of competition.

Where is my wardrobe from? I have two nice pairs of dress pants from Gap outlet, one from express, and two that were handmade for me when I studied abroad in Hong Kong. My jeans come from Old Navy, American Eagle, or Gap. My shirts are mostly from Old Navy, H&M, Target, or Kohls. My shoes are from all over, but none were very expensive.

The great thing is, I've gotten complements on my wardrobe more than once from my coworkers. "You don't shop around here, do you? You always have such cute clothes and shoes." It's flattering--I can pick out stylish and work appropriate clothes without spending a lot of money. But, like I said, our office is pretty casual. Most people won't wear sweatshirts (note that i said MOST), but you don't really see ties either.

Will I be able to get away with this wardrobe at my new job?

Maybe, at least some of it. When I interviewed the dress seemed pretty casual, but I think that since the shopping will be much better, it might be wise (or fun) to invest in a few nicer pieces. I still will look for good deals, but I'll definitely focus a more on quality for non-trendy items. (For example, Forever 21 is off my list of stores I'll buy things from. I know they are cheap, but the only two items I purchased from them broke. The strap on a cheap party dress broke and the buttons on a cute dress shirt all fell off.) I'll try to survive on what I have initially, and get a feel for what the other young women in my department are wearing, then if necessary, purchase some new things.

Wednesday, January 16, 2008

Daft, Unattainable, Meaningless and Bogus Goals

My boyfriend randomly started up a personal finance conversation with me last night. He isn't that well informed (though he's good with money), so it was fun for me to share what I've learned from this personal finance blogosphere. Not that I mentioned my blog--it's private for now, though I wouldn't be horrified to share it with him.

One thing he came up with was a goal that we should try to have 150k saved up for a house in the next 3.5 years. Not that I do "SMART" goals (specific, measurable... acheiveable... see, I don't even know the acroynm), but I don't to dumb goals either. In fact, I invented a new acronym: Daft, Unattainable, Meaningless and Bogus! I asked if there was any math involved in coming up with that number, and he said no. He just took the date when he'd be done with grad school, pulled another number out of a hat, and said it would be a good goal for our house downpayment.

I did some quick math. Assuming I had to come up with 1/2 of that, I would have to save about $1800 a month. I could maybe do it, if I stopped saving for retirement! Besides, I'm not really all that keen on property ownership at this point in my life. I don't even know where I want to settle! I told him that we could discuss a goal like this if/when we are engaged, but for now, I'm sticking to my own goals. I'm willing to compromise, but not just on some whim of his!

Speaking of retirement, I would like to leave you with this depressing snapshot of my 401k. I'm sure glad I don't need this money for years!

Leaving a job with class

I had my last day at my old job yesterday. Mapgirl, a blog I read regularly, also recently switched jobs. She put together a series of posts on how to leave your job, financial and non-financial aspects. I had planned to do the same, so here are my tips from my last days on the job.

General
  • Give appropriate notice. Two weeks is minimum, longer if you think you can. I told my boss about a month in advance, and we told the rest of the group about a week later. For your own sanity, don't tell them TOO soon. I've been plotting my move for well over six months, but I didn't want to end up on a "short timers" list, given crappy assignments and having my work affected by knowledge I was leaving. So I kept my mouth shut for quite some time.
  • Consider timing. I chose to leave in mid-January for several reasons. First, I wanted to be reimbursed for my tuition from the semester ending in December. Second, we have holiday shutdown from December 23rd-January 1st, and I thought being paid for my Christmas break would be nice. Also, bonus are given in December, though I only would have had to stay through the end of the fiscal year to be eligible for it. It isn't always worth waiting for things like this, but sometimes it is.
  • Stay motivated up until the end. This is much easier said than done! While I met my commitments and did my best to transfer knowledge to my coworkers, I have to admit that I was a little less of an achiever in my last few days. It is hard to ignore that little voice in your head saying "Well, what are they going to do, fire me?"
Staying in Touch
  • Be sure to get any contact information of people who you may later want as references. The boss I had for the majority of my time at the company recently transfered to a new location, and I emailed him and requested a personal email address, in case I need it in the future.
  • Leave your contact information with anyone who might want it. I wrote a quick email to my group thanking them for making my time with my company be pleasurable, and included my gmail address at the end.
  • Say your goodbyes! You likely will not see most of these people again
Benefits/Money
  • Ensure that your last paycheck will find you, either through direct deposit or however else they do it.
  • Ask about your vacation hours. I believe companies are required by law to pay them out to you, but that may vary state by state. My company said they would include them in my last paycheck. All 10 hours of it, ha. (I use up my vacation as soon as I earn it!) If that isn't the case, then talk to your boss about the possibility of using most of it before you leave.
  • Check on your 401k. If you have a really small balance, they can require you to take it out of the plan. In most cases, you can leave it there at least for awhile. I plan to roll mine over eventually, just not right away. You my have some funds that require a waiting period to avoid fees.
  • Make sure you know what portion of your retirement is vested. I became fully vested after three years of service. Luckily, the count the start of that from the first date I did my internship. Even though I only have worked there full time 1.5 years, I got to keep the company match. It amounts to about $6000.
  • Your medical plan will likely go through the end of the month. After that, you may need COBRA or other insurance if your new job doesn't offer insurance on day one. Consider using your insurance, if you already haven't. I was sure to order contacts (my company pays for $120 if you do a buy-up on the vision plan.) If you have a flex spending account, you also can use it, even if you haven't contributed it yet. It may be a bit unethical to knowingly do this, but it is legal.
I've never left a full time job before. When I left my internships, it was a given that I'd be heading back to school, so there were no explanations needed. I felt a little guilty "abaondoning" my team, especially as we were kind of at a make or break stage of our program. However, my reasons were mostly personal, and I left on good terms.

Tuesday, January 15, 2008

Financially Independent

I had three really close girl friends in high school. My senior year their was a fourth girl we spent a lot of time with as well. Of the five of us, I'm the ONLY ONE who is not currently married. I'm twenty-five, and the rest of them are about the same. Most have been married about a year, but one girl has been married almost 4 years already.

I've been with my boyfriend for about 3.5 years, and it isn't a real secret to many people that I had hoped to be engaged quite awhile ago. I'm not exactly "pushing for it" at this point (does that really work anyway?) but based on conversations we had in our relationship, I honestly thought it would have happened awhile ago. However, plans adjusted, and it seems like it'll happen eventually, but there isn't a rush right now. People around here don't always understand that. They think at 25, I'm a candidate for becoming an old maid. I'm willing to wait, at least for now. There certainly may come a time when waiting isn't the right thing for me anymore, but I don't know when that time is.

Oh, wait, is this personal finance blog? What is my point?

As much as I thought getting married ASAP would be ideal, there is something to be said for starting off a career on your own. I enjoy reading other young female bloggers, especially those who are also unmarried, and thinking how just a couple generations ago our lives would have been unthinkable. Though I admit I've had the emotional support of a relationship, I do rent my own apartment, pay my own bills, and really came into my own financially in a way that I simply wouldn't have had I been legally tied to another person. I'm sure we would have figured this stuff out together, but the whole financially independent thing is something I'm a little proud of myself for accomplishing. Independence in general is something I'm proud of.

Trent over at the The Simple Dollar recently wrote about how having a family and kids has totally changed his priorities in life. Being unmarried (when most of the people I know are married) has allowed me to keep my choices strictly my own. I'm not saying that I need to hold onto that forever, but I might as well enjoy this independence while I have it.

(Oh, and even though I'm all about frugality and practical purchases, I still want a diamond engagement ring. I simply can't help it. Do you agree?)

Monday, January 14, 2008

Spending cycle

It seems I can go months on a fairly tight budget, not desiring to spend a lot of money on anything really. I won't go shopping, I won't go out to eat, and I will build wealth fairly effectively.

January has not been one of those months. Part of it is because I'm moving out of my apartment (and city, state, and region!). I've bought several cleaning supplies that I probably could have got by without (or substituted with things I already own). I also bought a new large suitcase and an inexpensive exercise ball. Then I needed a new coffee mug, because mine ceased to be watertight and was spilling. Then a dinner with my friend, because I'm leaving. And some wine for him because he fixed my car speakers for free. And wine for myself, just because. And a magazine too, while I'm there. Oh, and I needed an oil change. And it's been like that, one thing after another, the money just has felt like it is flowing out. And out, and out and out.

It has been, too. I have spent at least $300 in the last couple weeks on non-bill related items. Perhaps more. I'm a little afraid to tally it, though I have a handy pearbudget spreadsheet all set up... The thing is, I knew that I'd be spending more than I make this month due to paying double rent because I'm moving. And due to getting 1 weeks less pay, due to switching jobs. So since I knew that, it seemed like I might as well just buy every cleaning supply I thought I'd need... At least it should help me get my $100 deposit back!

Well, anyway, it's time to tighten up ship again! I pledge to conciously think about each purchase I make for the rest of the month, and only buy things I really need!

Saturday, January 12, 2008

Parents and personal finance

I think my parents are finally getting serious about their finances. It's long overdue (they are in their late 40s) but better now than in 10 or 20 more years. Or never.

To clarify, my mom has always been relatively good with her money. She was the one who paid the bills and took us clothes shopping. She rarely bought anything for herself (and conveniently, shared our clothes when we were in high school! The perks of being a petite woman with three girls!) and always worked hard. She has been good with money, but doesn't seem to branch too far from the basics of budgeting and getting things paid.

My dad has always been awful with money. He grew up in a very poor family and didn't learn anything about how to manage money. Things went alright for them when he worked for someone else. He'd get paid, turn the check into my mom, and she took care of the magic. It all fell apart when he went to business for himself. He worked hard enough, but it takes more than that to run a business. Let's just say that from the time I was about 16 until earlier this year, their finances were a bit of a disaster.

These days, my parents are doing something pretty neat since all of us kids are off on our own. My mom does travel nursing, and my dad (an electrician) finds work wherever they go. They take 3-6 month assignments in various cities in the US (mostly California, lately) and work. They are too young to retire, but they are able to see more of the world than they ever have before. I'm very proud that they took the initiative to do this, and they seem to really love it.

Anyway, for the first time in my life, my dad seems to be exceptionally careful with money. They have finally canceled their home phone line (they are there less than 6 months a year anyway!) and he announced to me that he was happy that that was saving him $30 a month. He also realized he was being charged a fee for his checking account, and promptly switched to a different version. Since they are traveling a lot, it doesn't make a lot of sense to buy "stuff", so they don't purchase a whole lot anymore. He also has been pestering me to get off of his car insurance plan once I get settled into Los Angeles. That'll save him several hundred dollars!

As much as I have loved having my car insurance paid, it is really a huge relief for me to hear them talking about saving money. Even if it costs me.

He's still not perfect--for Christmas he bought some overpriced remote controlled helicopters for a couple of his nephews, even though they are so obviously too young to be able to fly them. I bet they are broken by now. Still, he's made huge headway.

I've never read Dave Ramsey's "Total Money Makeover" book. I'm not the target audience for it, but my dad seems like he might be. It would be a little awkward for me to give it to him, and he is more of a magazine/newspaper guy than a book guy. Still, I'm going to keep my eyes out for a non-intrusive way to suggest it. I'm excited that they might live in the same city as me for one of their assignments. If my dad is actually receptive to this personal finance stuff, I might be able to sneak in a few other suggestions. Get a high yield savings account! Check your credit report for free! Have you considered a Roth IRA? Can I help?!?! Please!

Does anyone else find themselves more versed in personal finance than their parents? Have you ever made suggestions to them, or is it usually the other way around?

Friday, January 11, 2008

I'm not in a hurry to pay off my debt

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

Tuition Reimbursement and Rental Insurance Update

In my industry, tuition reimbursement is pretty common. My current job has it, and my new job actually pays the tuition up front for you.

The problem I've run into is that Spring semester starts next week, and I am still finalizing my start date for my new job (most likely, February 1st). There is a class I'd really like to take this semester, but I don't want to pay for it out of my own pocket. I've been trying to get an answer from my new job about whether they will pay the bill for me (even some prorated ammount), or if I have to take a semester off from my distance learning program.

The cost for one class would be rough $1600. I could take this out of savings. Why would I do this, when employers typically pay for this cost? Well, I might do it in hopes that I can work something out with my new manager and get them to reimburse it. I might do it because the class sounds interesting and isn't offered often. I might do it so it won't take me even longer to finish my degree program. Since I have been unable to get an answer from the new job, I have seriously been contemplating paying for it out of pocket.

When it comes down to it though, $1600 is just too much money for me to spend. Here's to hoping they get me an answer soon!

In other news, I purhcased my rental insurance from Geico last night, with a 5k deductable. The reason I'm getting rental insurance, despite the fact that the value of the things in my apartment is probably less than the deductable, is the liability issues. The general rule (for me at least) is to insure yourself against thigns you can't afford to have happen. If my apartment burned down, I could afford to replace my belongings. That is why I have an e-fund. The policy also has some sort of "temporary living" terms that would help me out. What I couldn't afford is if my apartment burned down and it was blamed on me and I was sued for damages. I chose a high deductable, but also high "liability" coverage. It was only $163 for the year, and it was close to $300 for a more "reasonable" deductable of $1000 or $500.

Thursday, January 10, 2008

Who's better with money?

My boyfriend compliments me sometimes, saying that I'm good with money. He says that, but once or twice, he has added "but I'm better with it!"

I respectfully disagree with that sentiment. I'm better with money, he's just more stingy. Also, his stingyness comes primarily from the fact that he is a grad student and has a very limited disposable income. In general, he is selectively stingy. Back when he was making a reasonable income, he spent in the range of $3000 for private pilot flying lessons. So he spends less by buying cheap lunch meat and kraft singles, and I buy better stuff. I don't consider that being better with money, I consider that having more money and making choices, not being "worse" with money.

I think when we are married, we'll be able to manage our finances without too much conflict. We are both generally savers, but we are both (generally) willing to spend on certian things we value: for example, travel, occasional good meals, and wine. We should make decent money, and things should be smooth. And if they are not, we both are capable of cheap living.

I hope I get to be in charge of the budgeting and bill paying. I am a control freak and like that sort of thing, but he is a control freak as well. Of course, decision making will be together (which will be an adjustment after years of independence), but there has to be one executer.

I would like us both to be involved in our investment decisions. Since I already have a full time job and he is still in school, I'm a few years ahead of him in investment knowledge. Not that I'm an expert, but I'm at relatively comfortable with the basics. He does have a Roth IRA, but he opened it with a broker. Edward Jones, maybe? I'd need to let him know the virtues of target date funds, indexing, and low fees. Right now, he only has about 2-4k in there (I don't know the details), and I don't know the fees, so it isn't an issue. (Besides the fact we aren't even engaged!)

I think, over the next couple years (or until whenever it is we get married and what is "mine" officially becomes "ours") money might be a slight issue for us due to vast income disparity. If I want us to go out for dinner, I'm going to have to pay for it more often than not. He isn't gonig to demand to be taken out, but he doesn't have the funds to treat me too often. It is sort of something that I have accepted already over the last year and a half of me working and him being a student. It can be frusterating, especially when my my two closest friends from high school (who were students at the time) received coach purses for christmas last year from their signifcant others. I got a nice necklace, which is great, but it would be nice to be spoiled every now and then. Maybe he can spoil me in ways that don't involve spending money.

Wednesday, January 9, 2008

Having less than my friends

I spent the week surrounding New Years Eve with a friend I rarely see (we met on a study abroad semester), our boyfriends, and another friend of hers. With the exception of my boyfriend (still a grad student), everyone had just recently entered the working world.

One night, they wanted to go to a "fancy" restaurant for dinner one night, and my boyfriend and I politely declined but offered them the use of the car to go. They graciously offered to treat us, so we agreed to come along. The bf and I politely ordered relatively lower priced items (still probably $40 each), and the others ordered appetizers and dessert (though they were kind enough to share). Dinner for the five of us was about $350, maybe more. The food was decent, but didn't knock my socks off. The service was good, but not worth that kind of money to me at this point in my life.

Then there was the shopping. My jaw just about fell off when one girl stated that a $1000 handbag was "within the price range" she was looking for. I have no idea her salary (though I do think she lives with her parents, meaning, no rent, which helps), but it just seemed utterly unreasonable to pay that much for a handbag. Still, people do it. All the time. Just not many people that I know.

Sometimes it strikes me unfair when I see people my age spending on expensive items. In many cases, it is flat out unfair--their parents helped them through school and maybe even still subsidize their lifestyles, while mine didn't. Very few people are wealthy by their own doing at age 24. Many people are comfortable (myself included), but having enough wealth to live the high life? Not me.

Really, it doesn't matter if it is fair or not. Not one bit. All that matters is they are good people who don't make me feel bad about being more careful with my money. I do my best not to make them feel bad that they do spend more money.

I think when I move to Los Angeles, I'm going to run into this feeling a lot more than I do here in the Midwest. I'm extremely down to earth, and the L.A. stereotype isn't. I'm sure some won't fit the stereotype, but I'll surely meet a lot more people with piles of money than I know now. I'll also working at a big name company where many people went to top schools. I went to state school. You've never heard of my school. I was smart enough for a better school, but the finances just wouldn't have worked out. In some ways, it makes me proud of myself. I got to the same place as them, on my own, without a fancy school or lots of money. Even so, I wouldn't have minded if my parents paid for a top notch education. It wouldn't make me any less of a person.

Anyway,the girl who bought a Burberry towel (a towel? Why?) and a $250 watch (spur of the moment, out of spite!) suggests getting one coke at a pizza place and sharing the free refils. Too funny.

Retirement and Savings options

I took $1000 out of my high yeild savings account and directed it into my Roth IRA for 2008. Really, for true dollar cost averaging, I only contributed $585 above what I would normally contribute for a month. My Roth is fully invested in a 2050 target date retirement fund for now.

I could have funded the whole year with savings, but I don't feel that I have the approrpriate cushion in my savings, especially with a cross country move coming up. Besides that, with markets being so shaky, I'm not sure I want to throw dollar cost averaging out the window this year. I wouldn't be surprised if the market recovers nicely, but I also wouldn't be surprised if it declines as well. I'm not an expert.

Since I'm leaving this job, I'm going to have the option of rolling my 401k (about 16k) into a regular IRA. Since my MAGI is less than $100k, I will also have the opportunity to convert it to a Roth IRA. I'll have to look at whether or not I can take the tax hit in 2008, and the pro's and cons of doing this.

Another thing I want to look at once I'm settled in Cali is moving a large chunk of my HYSA to a money market fund, specifically the tax exempt California one offered by Vanguard. My after tax return might be able to beat out my current high yeild savings accounts, especially since I'm not rate chasing. This article by The Finance Buff which suggests it may be so. It'll make more of a difference if I itemize deductions (I usually take the standard), so I'll have to do a little research on this. Or another option: TIPs? I have heard a lot about them, but my knowledge is limited. A high yield savings account is a great start, but I think I'm ready to see what else is out there and make sure I'm getting the best deal.

Tuesday, January 8, 2008

Renter's Insurance

I'm a little ashamed, as a personal finance blogger, to admit that I have been living in my apartment for 1.5 years without renters insurance. It is so cheap, but I just never got around to buying it.

My new apartment manager has said "you need to have renters insurance", which I'm not sure if she means it is a requirement or just strongly suggested. I'm going to take it as being required. Geico has given me the lowest quote so far, $163.00/year, primarily because I was able to adjust the deductable to $5000. Yes, this is a lot, but that is what an efund is for. I have to call the manager and find out the answer to a bunch of questions (construction type, distance to fire hydrant...) to get the most accurate quote, but I think I'll go with it. Other Cali readers, what do you know about earthquake coverage? Do I really need it?

The next step is getting off my dad's car insurance (yeah, I know...)

Along with a milllion other things I have to do in order to pull off this move! My last day at my current job is next Tuesday!

Sunday, January 6, 2008

Family Ties

I do not come from a wealthy family. My parents do alright--a nurse and an electrician--but probably lean more towards working class than middle class. I'm from the Midwest, and a chunk of my relatives are from a small town (about 20,000 people) in a relatively unpopulated typical Midwestern state. We went back to visit for the hoidays this year, and apparently my dad had been talking about my new job with his relatives.

Aunt: So, the big move is coming up! You are going to be a California girl! Did they give you a large enough starting salary?
Me: Yeah, I think it should be enough. It is expensive there, but I'll be okay.
Aunt: Oh yeah.... Well your dad was just saying that he didn't think that they gave you enough. With the rent increase and all.
Me: :::awkward silence::: No, no... It should be enough. I mean, where I live now is really cheap, but I'll be able to afford to live there.

In this blog, I have no problems stating how much I'm making. Yet this conversation with my aunt made me extremely uncomfortable for a couple reasons. First, it is someone I know in real life, and I'm not anonymous. I don't particularly like sharing salary information with friends and family. However the biggest reason was the particular audience. My aunt is in her late thirties and is a substitute teacher. She has a 5 year old son which she raises, though the father is still somewhere in the picture. I don't know how much money she might make in a given year, but I would venture it's roughly 1/3 of my new salary. Maybe less.

When I got my first job, my dad shared the exact numbers with his family, probably only because he was so proud. After that, I asked him not to discuss my salary with his relatives, and I don't think he gave exact numbers this time. He's just a talker, and he's proud of me. Besides, what she was saying is partially true. The salary increase just barely offsets the rent increase, and with taxes and other expenses, I'm probably coming out slightly behind. I don't resent that. There is some price to pay for perfect weather and the great nature, being blocks from the ocean. There is a price to pay for not having to scrape ice off my windows and wear three layers of pants. But it isn't as though I'll be struggling.

I think each generation hopes that the next will be better off than them. At the same time, it might be difficult for them to see without some twinge of envy, even if they truly are proud.

Friday, January 4, 2008

Rent in an expensive city

I'm feeling a little resentful of the rent check I'll be writing for the next year. I'm worried it was a mistake. It was completely my choice: $1425/month for a small place in a good neighborhood close to work. For just me. No roommates. EXPENSIVE city. So far, I have not heard of anyone who has rent this high....

I wanted to spend about $1000, but I couldn't figure out how to do it. The only person i know in the city is my boyfriend, and while we do plan to ultimately live together, it isn't going to be right away. At least a year away. I didn't want to find a roommate off the internet. All the cheaper apartments were in scary areas with a lot of crime, rape 600% higher than the rest of the city. It came down to paying $1200 for a dumpier place further from work, or paying the extra money for the convenience of being close to work. So i chose it. I signed up for a year.

It isn't as though I can't afford it. I can afford it, while also affording to fund a Roth, put at least 10% in a 401k, accumulate savings, and pay down student loans. I can afford it, but I just would rather not. It is so much money, as I pay less than $600 currently. Less than $600!!!! For a one bedroom place all by myself!

I'm priced out of the housing market for now, and may not be in the city five years anyway. It just stinks to pay $17000 a year and get nothing in return.

Staying the course

I have an asset allocation I'm comfortable with. I have goals I like, and prioritized appropriately. My current goals are keeping an e-fund in savings, funding retirement accounts, and general savings for a future car/home. Also, paying student loans, though this is a low priority.

Then I get an idea in my head and want to run with it. I start to wonder if I'm being too conservative. I suddenly think that I need to open up a taxable account for investments . Despite the fact that none of my goals are long enough away (besides retirement) that a taxable account really makes more sense than a simple high yield savings account. I start to think 4-5% isn't enough, and that I need to grow my wealth faster.

Logically, I don't really believe I'm ready for a taxable account. I have too many other goals to randomly throw another one in the mix for no good reason. What is the money for? Why not put it in retirement? Or savings? Besides the fact that before I open a taxable investment account, I have some research to do on how to be tax efficient.

I think it is the comments of my friend ringing in my ears, even if these comments aren't necessarily qualified. We just have different philosophies.
"He'd probably do something stupid with the money, like leave it in savings instead of investing it."
"I am young. I want to invest as much as I can now."

I have a good plan and good goals. I just have to stay the course

Thursday, January 3, 2008

Christmas and New Years Round-up

It has been a hectic few weeks, and I hope to have some serious posts as life returns to normal. However, normalcy probably won't truly settle in for awhile--I'm moving over 2000 miles to a new home this month! Still, vacation mode is over and things should be more normal around here. Here is a round up of my financial status for the past couple weeks.

I spent roughly $410 on Christmas presents
  • $60 for my mom: Contributed to a GPS with my sistesr
  • $55 for my dad: XM radio subscription
  • $25 for my grandparents: Applebees giftcard
  • $20 for a drinks for my friends
  • $60 each for two of my sisters: Mostly clothes and make-up
  • $40 for my boyfriends family (including shipping): A nice blanket and random treats
  • $70 for the boyfriend: A nice zip up university sweatshirt he had coveted
  • $30 for my sisters boyfriend: Sweatshirt
  • $30 for my brother in law: Gift card to best buy
  • $20 for my nephew: A baby bible and color book
There was an additional $100 in other random Christmas expenses: Gas to get to my sister's and back, a cheap Christmas day train ticket, and a few meals for me and my sister.

I spent $555 (not including previously purchased $400 plane ticket) on new years eve vacation which lasted about five days. About $100 of it was due to me paying for my boyfriends share of things, since he is a poor grad student and I have a real job, and I wanted him to join us on all activities. Luckily, there was no hotel costs since we stayed in his apartment. (I do not currently live in the same city as him, hence the move.)
  • $170 on food
  • $125 on car rental and gas
  • $200 on alochol and going out (yikes!), including a somewhat pricey New Years Eve
  • $60 on general entertainment
My net worth increased by about $3000 in December despite all that spending and despite my $500 security deposit for my new place being taken out. Not only did I have my regular paychecks, I had about $5000 in a year end incentive bonus as income. That definitely helped things along. Anyway, I did update my NetworthIQ page, so feel free to click on over for details.

Did I meet my year end goals? What are my new goals? I have to review whether or not I met my 2007 goals. I think I met some of them, but not all. I need to rework my 2008 goals and decide what I want to do financially this year.

The last thing to mention is today's small impulse buy. In a spur of the moment decision, I raced to Walmart and picked up a humidifier and cold medicine at about 11:00 pm tonight. Yes, I'm a little sick. The humidifier was only about $25, but I obviously did not buy quality, nor did I research the best deals. I also sort of dislike Walmart, but nothing else was open and I felt really crappy. Now, time for bed, as it is back to work tomorrow for my last few days.

Thursday, January 31, 2008

Should you neotiate your starting salary?

Common knowledge is to always try to negotiate your starting salary. In most cases, the worst that can happen is they will say no. There is a possible exception for entry level positions at large companies, when it is hard to distinguish yourself from the next person holding a similar degree. You hear entry level people claim they are special because they have good grades, an internship or two, and extracurriculars. Well, great, but so do most people (good) companies interview. It isn't that you aren't special, it is just that the company probably doesn't know it yet. The company I worked for right out of school had a standard "new hire" offer, and it was basically take it or leave it. Smaller companies probably are more flexible. It still might not hurt to ask if the offer is negotiable, but be prepared to back up your request with reasons why you deserve more.

When I was job shopping for my relocation, I was in a unique position. In my industry you typically are moved up from Engineer 1 to Engineer 2" after roughly two years, if you are a good performer. (While I was almost certainly doing Engineer 2 work by the end of my last job, HR had strict rules about minimum amount of experience.) I was job shopping with 1.5 years of experience, so I still had to look for Engineer I jobs. Yet I didn't want to be caught by a "standard new hire offer", since I did have some experience and some graduate coursework.

I think that my first job offer was a standard new hire offer. I easily negotiated an extra 2k and a 3k signing bonus. The second job offer seemed to take my experience into consideration, and came in 2k than negotiated first offer, and a similar signing bonus. I chose the second, not entirely for monetary reasons.

With the salary being just 1k below my hope of 70k-75k range, I was faced with the decision of whether or not to ask for more. I thought the offer was fair. I thought they took my experience and graduate coursework into consideration. If I were to ask if it was negotiable, I'm not sure what I'd say when they asked "why do you think you deserve more?" So I didn't negotiate.

Now that I'm on the inside, I have acess to their salary tables. Here they are for my job category:

Level Low Mid High
1 $42000 $62000 $78000
2 $49000 $72000 $90000
3 $60000 $88000 $110000
4 $72000 $105000 $132000
5 $88000 $129000 $162000
6 $102000 $150000 $187000

So, you can see that my offer was above the middle for Engineer 1, and poised quite nicely to be moved into an Engineer 2 position, provided I perform well. Could I have asked for more? Yes. Would they have given it to me? Maybe. Maybe not. The range I was hoping for more closely lines up with the middle of the Engineer 2 range.

While maybe I could have squeezed out a few more dollars, I do feel very fortunate to be here. It's a top company, and has many graduates from top universities. There are lots of brilliant people here. I went to a state school with a good regional reputation (at best) and no reputation in this area. I now have an opportunity to finish my MS degree at a top ten university in my field. On their dime. I should be done in less than two years if they accept my transfer credits. Nice. The competition here is more stiff than at my last company--I would have easily been a star at my last company--but that will be good for me. Always surround yourself with people smarter than you are.

Wednesday, January 30, 2008

Health Insurance options

I signed up for health insurance benefits at my new company today. I had essentially three choices.

HMO
I've never used an HMO, and though I have heard some negative press about them, I think it would work ok for me. I don't have health issues and am a low maintenance customer. Free to me, minimal copays ($15 for my monthly prescription). I don't think I would mind being forced to deal with a Primary Care Physician.

Traditional PPO account
This cost about $16 per a bi weekly pay period, so just $416 year for premiums. Same copays as the HMO. You can see any in-network doctor and have a lot more freedom in your medical care. You can see out of network doctors for reduced benefits.

PPO + Health Savings Account (HSA)
This is free to me, but is a high deductible plan. Preventative care is covered 100%, but everything else is out of pocket up to the deductible, then benefits kick in. With this plan, I am eligible for a HSA to put pre-tax dollars in to spend on medical care, which carry over year to year. My company will contribute $700 to this account. I believe the yearly deductible is about $1500, but I can't quite recall.

I used a HSA at my last job (which had worse benefit options) so I'm already comfortable with them. I felt doubts about my HSA at the end of last year, because almost all the money I put in I took back out to buy my prescriptions with. My company didn't contribute. However, regular insurance was still 60/mo, so I came out... Well, I think I came out a little behind using the Health savings Account at my last job. But you live, you learn. I pretty much immediately ruled out the traditional PPO, because it seemed so similar to the HMO, except you could see more doctors and you had to pay money for it. I didn't need the freedom. The HMO seemed like a really cheap option, so I considered it.

I was left to debate the HMO and the PPO+HSA. Barring catastrophe, I need very little medical care. I see the doctor once a year for a women's health check-up, and use birth control each month, which does cost $45 without coverage. Last year I got an eye infection and was fixed up for about $100. I exercise, but I don't play any physical sports. Or any sports, really.

So, I went with the HSA, and chose to contribute $1500 of my own money to it. At first glance, that seems like the most expensive choice. My company contribution will cover my prescription costs, and probably nearly all other costs, so the plan is still free to me. Except I'll also have $1500 stored up for future health expenses. Next year, I shouldn't have to contribute much at all, though I probably will try to build it a little each year. In the short term, it is less cash in my pocket now. But the money being set aside is mine. It offers flexibility in the long term.

Something to note, a big disadvantage of HSA's are the fees. Most plans you can find online have high fees and/or no investment options. My HSA administrator really is no better, but the company pays the fees for me. I'm not intending to use this account as a sort of IRA for health (as suggested by Jonathan on MyMoneyBlog), so investment opportunities aren't a big priority either.

Did I make the right choice? Well, it depends on if I have any major surprise medical issues this year. Let's hope it was a good choice.

January Net Worth and Goals

It is that time of the month again.... Time for a net worth update!

As expected, my net worth took a hit this month. I switched jobs and was only paid for less than 2 weeks in the new year. Plus I front loaded my pre-tax Health Savings Account at my old job, so my paycheck was extra small. Not to mention the dip in my investments and extra spending associated with moving. Oh, and I paid rent in two places this month---$575 in Iowa and an astounding $1425 in Los Angeles. (And my new place is quite a bit smaller.) Luckily, I really am only obligated to pay for half of January, so come February 1st, I have to pay "only" $762.50. There was also a $500 security deposit for my new place (I'm due $100 from my old place), and a modem that will be eventually covered by rebates for $100.

With all that said, here are the results:

January Net Worth: $11,235, down $1,824, or -13.97% from $13,059.

The detailed numbers can be seen on my NetworthIQ page (sidebar). I did move $1000 to Roth IRA, which hurt my cash savings. The rest of the loss was expenses described above. It is worth noting that I should make up all of that next month (and more), provided my relocation money and signing bonus are processed.

I took a break from monthly goals for December and January, due to all the transitions. I'm going to do the same for February, at least until I get my first paycheck and I know exactly what I'm working with.

Tuesday, January 29, 2008

I "saved" $25 on my grocery bill

I went on my first full shopping trip since relocating and moving into my apartment. I looked at the current balance of my grocery bill in horror. How on earth was it at $79 already? And they still were ringing up my order!! The grand total was $95, then they swiped my Ralph's card and it dropped to $70. It is ridiculous that they do that. It is just forcing you to use a grocery card if you want any discounts at all.

Anyway, $70 is still much more than I spend on weekly groceries. About double! Although part of it was because I'm restocking almost everything, it still was a bit excessive. I think my solution will be to make this last two weeks.... so no new groceries until Februrary 12th! I am pretty sure I can do it. When I complain there is no food to eat, I usually mean, there is nothing I feel like cooking and eating.

What on earth did I buy? Well, I won't copy my whole long receipt, but here are some of the more expensive items on the list.
Chicken breast fillets $8.90. I don't usually buy meat, actually. I'm not vegetarian, but I'm not a big fan of meat and I don't really know how to prepare it well.
Frozen Strawberries, huge bag, $8.50 (should last a very long time. For smoothies)
Lunch meat, 2 packages, $5 (much cheaper than buying a sandwhich!)
Peperoni to make English muffin pizza's: $3.50
Lunch cheese
: $4.19, I forgot to price shop this I think
I also bought butter, milk, bananas, coffee creamer, 2 boxes of cereal, frozen broccoli and lots of other miscellaneous items.

There were some things on the list I didn't get. I had a frugal recipe that called for ziti, so I set out to the pasta isle. When I didn't find it, I realized I wasn't entirely sure if ziti was pasta at all. Maybe it was a cheese? So I'm back at home, ziti-less and just looked it up. It was pasta after all. I also could not find any muffin mix to make bran muffins. Maybe no one else likes them?

I liked to have a grocery budget of about $120/month, but I may have to up it. We'll see.

Shopping due to weight fluxuations

I must have lost a little weight over the course of the last year, as most of my jeans have been getting a little baggy. It wasn't a significant ammount, but I'm small already, so five pounds in either direction can make my clothes fit differently. Then seven to ten pounds means a whole new pants size. Seems like Mapgirl is having the opposite problem which is admittedly more common. Anyway, to remedy this, I ordered some jeans from Banana Republic on sale for $31.99. I couldn't try them on, so I crossed my fingers on the size, 2L. I only need "Long" sometimes, but that was all that was left. This was before I picked up two new pairs on sale at Jcrew for about $35 each. I really didn't need 3 new pairs, just two! The jeans arrived yesterday, and are too long, as I suspected they might be. It is a bit of a releif, now I don't have to decide weather or not to return them. Obviously, they must go back. They were cute jeans too, so I would have been tempted to keep them. I have to eat $6.00 in shipping (couldn't find a free shipping code), but I will still get $32 back on my card. That'll teach me to buy jeans without trying them on. (They were only available online anyway. The ones in the store didn't work out either.

My new rule on clothes is nothig that isn't directly appropriate for work for the next six months. Does that really mean no fun clothes until June 29th? Yes! It is not as ambitious as other young bloggers no clothing resoluitions (Meg and Wanda are two examples), but it is a step in the right direction. Also, I just donated a huge pile of clothes I never wore to Goodwill, so another rule is, for every item that comes into the closet, something has to go in a donation pile. That is super logical, will help with clutter, and will inspire extra cautioun in purchasing! An exception may be made for shoes, but with caution.

Also, I have a couple pairs of pants I had made for me when I was in Hong Kong that are now a little too big as well. Some don't have belt loops, so they are nearly unwearable. In fact, I wore one pair with a safety pin in an emergency situation. Classy! I think it is time to find a tailor and get those pants wearable again. Much more frugal than buying more dress pants! Do any of you have experience with using a tailor? And if I get them taken in, can they later be taken out if necessary?

Either that or I can fatten up a little bit... but that is also expensive because my metabolism would require a big calorie surplus to accomplish that!

Sunday, January 27, 2008

An alternate solution to internet and cable

My internet and cable aren't being installed until Saturday. Yet here I am, on the internet from the comfort of my own apartment. That's right, I'm mooching off someone else's unsecured connection.

How unethical do you consider this? I know some people who do it regularly as their primary source of internet. I usually do it in situations like this--I don't have legitimate access to the internet, but I have a legitimate desire to be on it!

To be honest, I'm not certain of the security concerns of this. If I'm connected to their network, could they potentially access my computer? I don't think so.

I spent the day settling in to my new apartment. While I filled up my new Ikea dresser, it tipped over and nearly killed me. No worries, the only casualty was a barely noticeable cosmetic piece we are going to try to repair later this week. I listened to NPR all day, and I am pretty sure that once my six month deal runs out for cable, I will be able to do without it. I'm not going to lie, I'll miss some of the absolute crap TV shows that I watch but my life is probably better off without them (example: Real Housewives of Orange County). The shows that I really love (when there isn't a writers strike) are all available online (Office and Grey's).

Internet I couldn't live without.... but could I just mooch off a neighbors connection? I probably wouldn't. Not only because of the moral concerns, but because it may not be reliable and completely secure. What do you think?

Expenseive weekend, again!

This weekend was very very very expensive. I feel like I've said that too many weekends in a row! I purchased a nice big dresser from Ikea, and now have real drawers to put my clothes in! That was a hit of $150, but money well spent. Then I also bought some other random organizing supplies--my closet has a lot of shelving and I want to make it organized and neat. By the time I left Ikea, it was a bill of over $220! What a dangerous store! I didn't even buy everything a needed wanted: more lighting, shoe rack, coat hooks, and some decorations.

I somehow got tricked into taking the boyfriend and I out for sushi. I wasn't exactly tricked, but the sushi was pretty over priced, and that was another $40 out the window, just like that. I asked him how often he thought we should go out to eat, and suggested once a week, and he said maybe less, once every two weeks. That's what he says in theory, but he has suggested eating out several times this week. I don't mind taking us out to eat sometimes. However, I do need him to understand that he can't say one day "Let's save up 150k in three years!" and then the next day say "I need money for the take out!" I was getting a $35 meal stipend while I was in the hotel, however, that meal stipend was my only income for a week and a half!

We wanted to meet up with my boyfriends friend last night, who I hadn't yet met. His friend suggested going out to eat (again!), then suggested just eating at whole foods. So i paid $7 for a sandwich, and then we bought a $13 bottle of wine.

So that is the boring details of my weekend spending. I'm afraid to add those numbers up, but.. $280? Yikes!! Was my life more enjoyable when I didn't feel pain every time I paid $7 for a sandwich? I think I need to loosen up about things and realize it is just money. Not spend more, or not cease to think about purchases. But if a purchase is something I ultimately decided I want to spend (dresser), have to spend (drivers license fee), or am willing to spend to go with the flow (sandwich from whole food), what is the point of getting all worried about it?

I think I get my first paycheck February 7th. To say that I'm anxiously waiting would be an understatement!

Wednesday, January 23, 2008

New cable and internet service

I'm in the process of moving into my new apartment. Technically, I've been paying for rent since January 15th (they wouldn't allow me to change my move in date), but I'm still getting set up.

In apartment buildings, you often don't have a choice for your cable television and internet provider. My apartment is serviced by Time Warner, and that is my only choice for TV. I was offered free installation and $30/mo for digital cable and $30/mo for internet for a limited six month period. A cable modem is required, but they had a deal where you could get a "free" modem through rebates. There also is $100 cash back in rebates for new services.

So..... Wow. A lot of rebates involved! The rebates are offered through broadbandoffers.com, which a quick Google search turned up lots of negative reviews. Still, I'm going to file the rebates anyway, get delivery confirmation for a couple bucks, then cross my fingers that they will eventually send my $180 worth of checks. Oh, and "free" didn't include shipping or CA state tax, so it wasn't exactly free, but $20 for a cable modem is reasonable, I suppose.

I think that negative reviews are par for the course when it comes to rebates. If everything goes smoothly with your rebate, you aren't likely to go online and write a happy review. But if something is screwed up, you may go write a bad one. I read a lot of negative reviews about the company I bought my laptop from, but I received the over $200 in rebates. It just took a long time. That isn't to say that mail in rebates aren't a pain in the butt. They are. But I'm optimistic. I was going to sign up for the service anyway, so if they want to give me $100 to do something I already planned on, then great.

To me, $60 seems reasonable and fair for internet and television. I've never had a problem getting fair and reasonable service... for the first six months or year. However, once the promos end, the same service jumps to about $100 a month, which seems high. Besides pulling the personal finance trick of asking for a lower rate, I probably will switch to cheaper internet and drop the cable to get the price down to about $45 a month. With cable, it would still be $80/month, which is pretty expensive to me. Maybe once my promo ends, I can look into options like DirectTV and DSL services, to see if they are viable options.

Tuesday, January 22, 2008

Free time... to browes ikea.com!

So, not having a job is expensive! Not only do I not have a paycheck showing up until February 7th (yikes, last paycheck was last Friday, and it wasn't for the full amount), but I have more free time.

Free time in which to think about how better to utilize my new apartment.... My new apartment is smaller than my last, and things don't quite fit the way I'd like. Some of my furniture is nice enough, but everything feels too crowded. Crowded, like I took a 600+ square foot apartment and moved it into a 500 square foot apartment. One hundred square feet is more than you would think Or, more than I would think. Everything just feels cluttered, and I don't like it.
Really, why are flat screen TV's still so darn expensive? My living room would look at least 3 times more put together if I had one, but it just isn't worth the price.

The kitchen is teeny tiny (one drawer for the whole kitchen?), so my buffet that used to live in my old kitchen has been promoted to TV stand. Except it doesn't match the rest of the nice dark wood in my living room. Is it important enough to change? How important is it for woods to match? Probably not incredibly important, though it probably would pull the room together a little more. And the (already small) kitchen table? Well, we are storing that under the bed for now.

My bedroom is a mishmash of cheap furniture, but it always was. I used to have a "red" theme going on, but it seems to have vanished with the curtains and duvet cover. Now it is sort of a blank slate. Do I want to do anything with this? I also don't own a proper dresser or chest of drawers. It's true. I keep about half my belongings in plastic drawers (hidden in closet!) and the other half in a cheap thing from Target, half bookshelf with some felt-type drawers. I am plotting a trip to IKEA and am dreaming of purchasing this chest of drawers, in no small part because of the little mirror on top. I'll have to see it in person to see how sturdy it is.

Should someone who doesn't have a job really go to Ikea??? Okay, I have a job. I just don't start until Friday...

Monday, January 21, 2008

Most depressing day of the year?

Did you hear the news stories that claimed that January 24th is most depressing day of the year? (That particular article was from 2005, but the theory still holds.)

It's partly due to the weather, partly due to a "hangover" from Christmas. Our credit card bills are due, although I'm sure no responsible pf blog readers charged Christmas on a credit card. If we made new years resolutions, it has become obvious we aren't succeeding. There are no major holidays to look forward to.... And to top it off, your investments probably are doing horribly!

I try not to follow the stock markets too closely--I'm a long term investor and shouldn't worry that my 401k has lost a bunch this year. But hearing about the overseas market on Monday (US had a holiday) and the overnight markets on Tuesday, i feel like we are in for a beating tomorrow. Tomorrow may be the more depressing than today supposedly was! But, it's not like I follow the stock markets too closely or anything. . . .

First time purchaser of car insurance

I've been doing some research on car insurance, now that I'm finally getting myself off of my parents policy. Yeah, I know, I'm a mooch! I originally budgeted $100/month for auto and rental insurance policies. Depending on the coverage i get, this may be too high or too low... But it seems close to right on. I've been pricing it out at Geico for now, and once I've firmed up the level of coverage I want to pay for, I'll price shop with other companies. Perhaps there is a discount through my new employer. My cousin also sells insurance, so I'll be sure to get a quote from her.

Here is a chart of the different prices I was quoted for different options from Geico. (BI = Bodily Injury, PD = Property Damage, MED = Midical, UI = Uninsured motorist, COMP = comprehensive and COLL = Collision). The BI and UI went to higher levels, but Geico told me that I had requested too many quotes before I could fill in the whole chart!


Most people are probably pretty familiar with auto insurance terms. I am not. I've never shopped for insurance and had no idea what 15/30/5 meant. Luckily, all the insurance sites did a good job of explaining these terms, and there was also a nice article at the Smart Money site that covers the basics.

To determine the level I need, I checked out emunds.com, which recommends:
General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don't buy excess coverage.

Ok, simple. I don't have much for assets, but to go from the state minimum of 15/30/5 to 25/50/25 was only about $40 over the course of six months, so i decided to buy up. In particular, the property damage liability was cheap to increase, so I did. There are a lot of expensive cars in this city, and $5000 wouldn't begin to repair most of them. As my assets increase, I suppose my coverage levels also would have to increase. I threw in uninsured motorist coverage, just in case. I declined medical (i have medical insurance), roadside assistance and rental coverage.

Now it was time to look at the expensive stuff--collision and comprehensive. For $45 for six months, comprehensive seemed like a good bet. My parents car was stolen last year, and they were kicking themselves for not carrying comprehensive insurance. The next question I was faced with was the biggie: do I want collision insurance? My car is about 8 years old. It's a Dodge Stratus with 80k miles on it. Oh, and it has a salvaged title. It's not exactly a junky car, but it's defintely not nice either. I looked up the Kelly Blue Book Value, and at most it is worth $3400. They won't do an estimate for the salvage title, so it is defintely worth less than that. The cost of the highest deductible ($1000) is $144.00 for six months. For that I'd be getting about $2000 worth of coverage.

Reasons not to carry collision:
  • I have an emergency fund that could buy a cheap car of similar (or better) value
  • I put a line item in my 2008 budget for a new(er) car fund
  • It isn't recommended to buy collision/comprehensive if the premiums cost more than 10% of the amount of coverage you are getting (value of car - deductible)

Reasons to carry collision
-I've never driven in a city this large before, and I'm a little nervous about it
-I haven't been in an accident since I was a teenager, but I'm not the worlds best driver
-I can afford it in my budget.

I decided that for the first six months to one year living here, I'm going to carry collision insurance. Then I'll re-evaluate my options. At that point, if I'm still driving this car, I'd probably drop it. Also, the difference in price for $500 deductible versus a $1000 was almost negligible. Even though I'm generally a fan of higher deductibles (or rather, the lower premiums that come with them), I chose to go with the $500 deductible.

Now that I know exactly what I want, I'm going to see if I can get it for a better price. At first glance, Geico seems to have a really good price, but I want to check a few others before committing.

Saturday, January 19, 2008

New job, new city, new expenses!

After a stressful week, I'm finally in Los Angeles for good! That's right, I live here now! It is still sinking in that I can go outside without a coat (and hat and gloves!)

Actually, it could have been MUCH more stressful. My new company paid for movers to come in and pack up all my stuff. They pay to ship my car. They bought my plane ticket, and paid for a hotel. They are currently putting me up in an extended stay hotel and giving me $35 per diem for food. And paying for a rental car! So I really shouldn't complain. My flight was delayed about two hours and I didn't get much sleep, so yesterday was sort of awful. But now, things are looking good.

Unfortunately, I've been really loose with my money lately. I don't know why. I need to stop! I will stop!

Random Expenses:
  • $50 in miscellaneous supplies to clean my apartment for move out
  • $150 in random pre-trip spending (book, suitecase, god knows what else at Target/Walmart!)
  • $25 at a "going away" meal with a few friends.
  • $10 at the airport for food and orange juice (was feeling sick)
  • $6 for a latte and snack at Starbucks in the airport in Chicago. I later spilled pretty much the entire latte. What a waste!
  • $500 security deposit for new apartment.
Upcoming expenses:
  • Tipping the movers. I'm not sure how much but maybe $100 for the three to split. (Any suggestions??)
  • Next months rent. I get to pay half priced next month, so this is about $700
  • Two belated birthday presents for my sisters, about $50 each
  • Random move in costs (replacing things that I didn't bring with), probably less than $100 if I'm careful
Luckily, I have some upcoming income:
  • 21 hours of pay for my old job's leftover vacation
  • $1000 money as part of a relocation package. I think this is tax assisted.
  • $3000 signing bonus (not tax assisted)
  • $30 refund from the cable company
  • $100 security deposit refund from old apartment
  • New and improved paycheck!

Cutting my hair costs

I'm not big into beauty, hair, and make-up. That isn't to say I'm not into looking nice, I just don't get into it the way some girls do. I wear minimal make up and can't do much with my hair beyond straightening it or pulling it back.

However, after graduating college, I started highlighting my hair again. I quit during college because it was too expensive, my mom wouldn't fund it like in high school, and really, no one cared what my hair looked like. These days, my routine is to go in for a nice cut and highlight touch up about once every three months. My hair dresser was always encouraging me to come in more often, but I stretched it out as long as I could. If I got my eyebrows waxed, it would run me about $150, which averages out to $50/month on hair care.

The hair cuts I still like. She was really good, and I'll pay for a good hair cut. But I'm considering quitting the highlights and sticking with my natural hair color for awhile. It's easier to deal with and healthier for my hair. Highlights look really nice, but I've looked through some pictures of me with my natural color, and I think I can deal with that. It just doesn't seem worth it to spend that much money on my hair right now.

What do you spend on hair care?

Thursday, January 17, 2008

Professional Wardrobe

I read a lot of personal finance blogs. I've read many great articles from young women my age who talk about how to build a quality professional wardrobe.

I've sort of lucked out with my current job. The standard dress code is "business casual" but it definitely leans much further towards casual than many companies. There is a loose policy of "jeans Friday" but many many people in our department wear jeans every day. While I did have to buy new clothes for a new job (my college gear really couldn't even stack up to business casual), I didn't have to invest in business suites or expensive shirts and trousers.

To top it off, I work in in a midwestern city with terrible shopping. We have Gap and Express (which both occasionally have decent work clothes), but no Banana Republic, no J. Crew. There are also some upscale department stores, but they just aren't worth going to. (And that is just my complaints about work clothes, don't get me started on finding stylish outfits.) I'm not saying everyone at my work place lacks style... But come on, we are engineers and there is exactly one other girl under 30 on my team, so I really don't have a lot of competition.

Where is my wardrobe from? I have two nice pairs of dress pants from Gap outlet, one from express, and two that were handmade for me when I studied abroad in Hong Kong. My jeans come from Old Navy, American Eagle, or Gap. My shirts are mostly from Old Navy, H&M, Target, or Kohls. My shoes are from all over, but none were very expensive.

The great thing is, I've gotten complements on my wardrobe more than once from my coworkers. "You don't shop around here, do you? You always have such cute clothes and shoes." It's flattering--I can pick out stylish and work appropriate clothes without spending a lot of money. But, like I said, our office is pretty casual. Most people won't wear sweatshirts (note that i said MOST), but you don't really see ties either.

Will I be able to get away with this wardrobe at my new job?

Maybe, at least some of it. When I interviewed the dress seemed pretty casual, but I think that since the shopping will be much better, it might be wise (or fun) to invest in a few nicer pieces. I still will look for good deals, but I'll definitely focus a more on quality for non-trendy items. (For example, Forever 21 is off my list of stores I'll buy things from. I know they are cheap, but the only two items I purchased from them broke. The strap on a cheap party dress broke and the buttons on a cute dress shirt all fell off.) I'll try to survive on what I have initially, and get a feel for what the other young women in my department are wearing, then if necessary, purchase some new things.

Wednesday, January 16, 2008

Daft, Unattainable, Meaningless and Bogus Goals

My boyfriend randomly started up a personal finance conversation with me last night. He isn't that well informed (though he's good with money), so it was fun for me to share what I've learned from this personal finance blogosphere. Not that I mentioned my blog--it's private for now, though I wouldn't be horrified to share it with him.

One thing he came up with was a goal that we should try to have 150k saved up for a house in the next 3.5 years. Not that I do "SMART" goals (specific, measurable... acheiveable... see, I don't even know the acroynm), but I don't to dumb goals either. In fact, I invented a new acronym: Daft, Unattainable, Meaningless and Bogus! I asked if there was any math involved in coming up with that number, and he said no. He just took the date when he'd be done with grad school, pulled another number out of a hat, and said it would be a good goal for our house downpayment.

I did some quick math. Assuming I had to come up with 1/2 of that, I would have to save about $1800 a month. I could maybe do it, if I stopped saving for retirement! Besides, I'm not really all that keen on property ownership at this point in my life. I don't even know where I want to settle! I told him that we could discuss a goal like this if/when we are engaged, but for now, I'm sticking to my own goals. I'm willing to compromise, but not just on some whim of his!

Speaking of retirement, I would like to leave you with this depressing snapshot of my 401k. I'm sure glad I don't need this money for years!

Leaving a job with class

I had my last day at my old job yesterday. Mapgirl, a blog I read regularly, also recently switched jobs. She put together a series of posts on how to leave your job, financial and non-financial aspects. I had planned to do the same, so here are my tips from my last days on the job.

General
  • Give appropriate notice. Two weeks is minimum, longer if you think you can. I told my boss about a month in advance, and we told the rest of the group about a week later. For your own sanity, don't tell them TOO soon. I've been plotting my move for well over six months, but I didn't want to end up on a "short timers" list, given crappy assignments and having my work affected by knowledge I was leaving. So I kept my mouth shut for quite some time.
  • Consider timing. I chose to leave in mid-January for several reasons. First, I wanted to be reimbursed for my tuition from the semester ending in December. Second, we have holiday shutdown from December 23rd-January 1st, and I thought being paid for my Christmas break would be nice. Also, bonus are given in December, though I only would have had to stay through the end of the fiscal year to be eligible for it. It isn't always worth waiting for things like this, but sometimes it is.
  • Stay motivated up until the end. This is much easier said than done! While I met my commitments and did my best to transfer knowledge to my coworkers, I have to admit that I was a little less of an achiever in my last few days. It is hard to ignore that little voice in your head saying "Well, what are they going to do, fire me?"
Staying in Touch
  • Be sure to get any contact information of people who you may later want as references. The boss I had for the majority of my time at the company recently transfered to a new location, and I emailed him and requested a personal email address, in case I need it in the future.
  • Leave your contact information with anyone who might want it. I wrote a quick email to my group thanking them for making my time with my company be pleasurable, and included my gmail address at the end.
  • Say your goodbyes! You likely will not see most of these people again
Benefits/Money
  • Ensure that your last paycheck will find you, either through direct deposit or however else they do it.
  • Ask about your vacation hours. I believe companies are required by law to pay them out to you, but that may vary state by state. My company said they would include them in my last paycheck. All 10 hours of it, ha. (I use up my vacation as soon as I earn it!) If that isn't the case, then talk to your boss about the possibility of using most of it before you leave.
  • Check on your 401k. If you have a really small balance, they can require you to take it out of the plan. In most cases, you can leave it there at least for awhile. I plan to roll mine over eventually, just not right away. You my have some funds that require a waiting period to avoid fees.
  • Make sure you know what portion of your retirement is vested. I became fully vested after three years of service. Luckily, the count the start of that from the first date I did my internship. Even though I only have worked there full time 1.5 years, I got to keep the company match. It amounts to about $6000.
  • Your medical plan will likely go through the end of the month. After that, you may need COBRA or other insurance if your new job doesn't offer insurance on day one. Consider using your insurance, if you already haven't. I was sure to order contacts (my company pays for $120 if you do a buy-up on the vision plan.) If you have a flex spending account, you also can use it, even if you haven't contributed it yet. It may be a bit unethical to knowingly do this, but it is legal.
I've never left a full time job before. When I left my internships, it was a given that I'd be heading back to school, so there were no explanations needed. I felt a little guilty "abaondoning" my team, especially as we were kind of at a make or break stage of our program. However, my reasons were mostly personal, and I left on good terms.

Tuesday, January 15, 2008

Financially Independent

I had three really close girl friends in high school. My senior year their was a fourth girl we spent a lot of time with as well. Of the five of us, I'm the ONLY ONE who is not currently married. I'm twenty-five, and the rest of them are about the same. Most have been married about a year, but one girl has been married almost 4 years already.

I've been with my boyfriend for about 3.5 years, and it isn't a real secret to many people that I had hoped to be engaged quite awhile ago. I'm not exactly "pushing for it" at this point (does that really work anyway?) but based on conversations we had in our relationship, I honestly thought it would have happened awhile ago. However, plans adjusted, and it seems like it'll happen eventually, but there isn't a rush right now. People around here don't always understand that. They think at 25, I'm a candidate for becoming an old maid. I'm willing to wait, at least for now. There certainly may come a time when waiting isn't the right thing for me anymore, but I don't know when that time is.

Oh, wait, is this personal finance blog? What is my point?

As much as I thought getting married ASAP would be ideal, there is something to be said for starting off a career on your own. I enjoy reading other young female bloggers, especially those who are also unmarried, and thinking how just a couple generations ago our lives would have been unthinkable. Though I admit I've had the emotional support of a relationship, I do rent my own apartment, pay my own bills, and really came into my own financially in a way that I simply wouldn't have had I been legally tied to another person. I'm sure we would have figured this stuff out together, but the whole financially independent thing is something I'm a little proud of myself for accomplishing. Independence in general is something I'm proud of.

Trent over at the The Simple Dollar recently wrote about how having a family and kids has totally changed his priorities in life. Being unmarried (when most of the people I know are married) has allowed me to keep my choices strictly my own. I'm not saying that I need to hold onto that forever, but I might as well enjoy this independence while I have it.

(Oh, and even though I'm all about frugality and practical purchases, I still want a diamond engagement ring. I simply can't help it. Do you agree?)

Monday, January 14, 2008

Spending cycle

It seems I can go months on a fairly tight budget, not desiring to spend a lot of money on anything really. I won't go shopping, I won't go out to eat, and I will build wealth fairly effectively.

January has not been one of those months. Part of it is because I'm moving out of my apartment (and city, state, and region!). I've bought several cleaning supplies that I probably could have got by without (or substituted with things I already own). I also bought a new large suitcase and an inexpensive exercise ball. Then I needed a new coffee mug, because mine ceased to be watertight and was spilling. Then a dinner with my friend, because I'm leaving. And some wine for him because he fixed my car speakers for free. And wine for myself, just because. And a magazine too, while I'm there. Oh, and I needed an oil change. And it's been like that, one thing after another, the money just has felt like it is flowing out. And out, and out and out.

It has been, too. I have spent at least $300 in the last couple weeks on non-bill related items. Perhaps more. I'm a little afraid to tally it, though I have a handy pearbudget spreadsheet all set up... The thing is, I knew that I'd be spending more than I make this month due to paying double rent because I'm moving. And due to getting 1 weeks less pay, due to switching jobs. So since I knew that, it seemed like I might as well just buy every cleaning supply I thought I'd need... At least it should help me get my $100 deposit back!

Well, anyway, it's time to tighten up ship again! I pledge to conciously think about each purchase I make for the rest of the month, and only buy things I really need!

Saturday, January 12, 2008

Parents and personal finance

I think my parents are finally getting serious about their finances. It's long overdue (they are in their late 40s) but better now than in 10 or 20 more years. Or never.

To clarify, my mom has always been relatively good with her money. She was the one who paid the bills and took us clothes shopping. She rarely bought anything for herself (and conveniently, shared our clothes when we were in high school! The perks of being a petite woman with three girls!) and always worked hard. She has been good with money, but doesn't seem to branch too far from the basics of budgeting and getting things paid.

My dad has always been awful with money. He grew up in a very poor family and didn't learn anything about how to manage money. Things went alright for them when he worked for someone else. He'd get paid, turn the check into my mom, and she took care of the magic. It all fell apart when he went to business for himself. He worked hard enough, but it takes more than that to run a business. Let's just say that from the time I was about 16 until earlier this year, their finances were a bit of a disaster.

These days, my parents are doing something pretty neat since all of us kids are off on our own. My mom does travel nursing, and my dad (an electrician) finds work wherever they go. They take 3-6 month assignments in various cities in the US (mostly California, lately) and work. They are too young to retire, but they are able to see more of the world than they ever have before. I'm very proud that they took the initiative to do this, and they seem to really love it.

Anyway, for the first time in my life, my dad seems to be exceptionally careful with money. They have finally canceled their home phone line (they are there less than 6 months a year anyway!) and he announced to me that he was happy that that was saving him $30 a month. He also realized he was being charged a fee for his checking account, and promptly switched to a different version. Since they are traveling a lot, it doesn't make a lot of sense to buy "stuff", so they don't purchase a whole lot anymore. He also has been pestering me to get off of his car insurance plan once I get settled into Los Angeles. That'll save him several hundred dollars!

As much as I have loved having my car insurance paid, it is really a huge relief for me to hear them talking about saving money. Even if it costs me.

He's still not perfect--for Christmas he bought some overpriced remote controlled helicopters for a couple of his nephews, even though they are so obviously too young to be able to fly them. I bet they are broken by now. Still, he's made huge headway.

I've never read Dave Ramsey's "Total Money Makeover" book. I'm not the target audience for it, but my dad seems like he might be. It would be a little awkward for me to give it to him, and he is more of a magazine/newspaper guy than a book guy. Still, I'm going to keep my eyes out for a non-intrusive way to suggest it. I'm excited that they might live in the same city as me for one of their assignments. If my dad is actually receptive to this personal finance stuff, I might be able to sneak in a few other suggestions. Get a high yield savings account! Check your credit report for free! Have you considered a Roth IRA? Can I help?!?! Please!

Does anyone else find themselves more versed in personal finance than their parents? Have you ever made suggestions to them, or is it usually the other way around?

Friday, January 11, 2008

I'm not in a hurry to pay off my debt

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

Tuition Reimbursement and Rental Insurance Update

In my industry, tuition reimbursement is pretty common. My current job has it, and my new job actually pays the tuition up front for you.

The problem I've run into is that Spring semester starts next week, and I am still finalizing my start date for my new job (most likely, February 1st). There is a class I'd really like to take this semester, but I don't want to pay for it out of my own pocket. I've been trying to get an answer from my new job about whether they will pay the bill for me (even some prorated ammount), or if I have to take a semester off from my distance learning program.

The cost for one class would be rough $1600. I could take this out of savings. Why would I do this, when employers typically pay for this cost? Well, I might do it in hopes that I can work something out with my new manager and get them to reimburse it. I might do it because the class sounds interesting and isn't offered often. I might do it so it won't take me even longer to finish my degree program. Since I have been unable to get an answer from the new job, I have seriously been contemplating paying for it out of pocket.

When it comes down to it though, $1600 is just too much money for me to spend. Here's to hoping they get me an answer soon!

In other news, I purhcased my rental insurance from Geico last night, with a 5k deductable. The reason I'm getting rental insurance, despite the fact that the value of the things in my apartment is probably less than the deductable, is the liability issues. The general rule (for me at least) is to insure yourself against thigns you can't afford to have happen. If my apartment burned down, I could afford to replace my belongings. That is why I have an e-fund. The policy also has some sort of "temporary living" terms that would help me out. What I couldn't afford is if my apartment burned down and it was blamed on me and I was sued for damages. I chose a high deductable, but also high "liability" coverage. It was only $163 for the year, and it was close to $300 for a more "reasonable" deductable of $1000 or $500.

Thursday, January 10, 2008

Who's better with money?

My boyfriend compliments me sometimes, saying that I'm good with money. He says that, but once or twice, he has added "but I'm better with it!"

I respectfully disagree with that sentiment. I'm better with money, he's just more stingy. Also, his stingyness comes primarily from the fact that he is a grad student and has a very limited disposable income. In general, he is selectively stingy. Back when he was making a reasonable income, he spent in the range of $3000 for private pilot flying lessons. So he spends less by buying cheap lunch meat and kraft singles, and I buy better stuff. I don't consider that being better with money, I consider that having more money and making choices, not being "worse" with money.

I think when we are married, we'll be able to manage our finances without too much conflict. We are both generally savers, but we are both (generally) willing to spend on certian things we value: for example, travel, occasional good meals, and wine. We should make decent money, and things should be smooth. And if they are not, we both are capable of cheap living.

I hope I get to be in charge of the budgeting and bill paying. I am a control freak and like that sort of thing, but he is a control freak as well. Of course, decision making will be together (which will be an adjustment after years of independence), but there has to be one executer.

I would like us both to be involved in our investment decisions. Since I already have a full time job and he is still in school, I'm a few years ahead of him in investment knowledge. Not that I'm an expert, but I'm at relatively comfortable with the basics. He does have a Roth IRA, but he opened it with a broker. Edward Jones, maybe? I'd need to let him know the virtues of target date funds, indexing, and low fees. Right now, he only has about 2-4k in there (I don't know the details), and I don't know the fees, so it isn't an issue. (Besides the fact we aren't even engaged!)

I think, over the next couple years (or until whenever it is we get married and what is "mine" officially becomes "ours") money might be a slight issue for us due to vast income disparity. If I want us to go out for dinner, I'm going to have to pay for it more often than not. He isn't gonig to demand to be taken out, but he doesn't have the funds to treat me too often. It is sort of something that I have accepted already over the last year and a half of me working and him being a student. It can be frusterating, especially when my my two closest friends from high school (who were students at the time) received coach purses for christmas last year from their signifcant others. I got a nice necklace, which is great, but it would be nice to be spoiled every now and then. Maybe he can spoil me in ways that don't involve spending money.

Wednesday, January 9, 2008

Having less than my friends

I spent the week surrounding New Years Eve with a friend I rarely see (we met on a study abroad semester), our boyfriends, and another friend of hers. With the exception of my boyfriend (still a grad student), everyone had just recently entered the working world.

One night, they wanted to go to a "fancy" restaurant for dinner one night, and my boyfriend and I politely declined but offered them the use of the car to go. They graciously offered to treat us, so we agreed to come along. The bf and I politely ordered relatively lower priced items (still probably $40 each), and the others ordered appetizers and dessert (though they were kind enough to share). Dinner for the five of us was about $350, maybe more. The food was decent, but didn't knock my socks off. The service was good, but not worth that kind of money to me at this point in my life.

Then there was the shopping. My jaw just about fell off when one girl stated that a $1000 handbag was "within the price range" she was looking for. I have no idea her salary (though I do think she lives with her parents, meaning, no rent, which helps), but it just seemed utterly unreasonable to pay that much for a handbag. Still, people do it. All the time. Just not many people that I know.

Sometimes it strikes me unfair when I see people my age spending on expensive items. In many cases, it is flat out unfair--their parents helped them through school and maybe even still subsidize their lifestyles, while mine didn't. Very few people are wealthy by their own doing at age 24. Many people are comfortable (myself included), but having enough wealth to live the high life? Not me.

Really, it doesn't matter if it is fair or not. Not one bit. All that matters is they are good people who don't make me feel bad about being more careful with my money. I do my best not to make them feel bad that they do spend more money.

I think when I move to Los Angeles, I'm going to run into this feeling a lot more than I do here in the Midwest. I'm extremely down to earth, and the L.A. stereotype isn't. I'm sure some won't fit the stereotype, but I'll surely meet a lot more people with piles of money than I know now. I'll also working at a big name company where many people went to top schools. I went to state school. You've never heard of my school. I was smart enough for a better school, but the finances just wouldn't have worked out. In some ways, it makes me proud of myself. I got to the same place as them, on my own, without a fancy school or lots of money. Even so, I wouldn't have minded if my parents paid for a top notch education. It wouldn't make me any less of a person.

Anyway,the girl who bought a Burberry towel (a towel? Why?) and a $250 watch (spur of the moment, out of spite!) suggests getting one coke at a pizza place and sharing the free refils. Too funny.

Retirement and Savings options

I took $1000 out of my high yeild savings account and directed it into my Roth IRA for 2008. Really, for true dollar cost averaging, I only contributed $585 above what I would normally contribute for a month. My Roth is fully invested in a 2050 target date retirement fund for now.

I could have funded the whole year with savings, but I don't feel that I have the approrpriate cushion in my savings, especially with a cross country move coming up. Besides that, with markets being so shaky, I'm not sure I want to throw dollar cost averaging out the window this year. I wouldn't be surprised if the market recovers nicely, but I also wouldn't be surprised if it declines as well. I'm not an expert.

Since I'm leaving this job, I'm going to have the option of rolling my 401k (about 16k) into a regular IRA. Since my MAGI is less than $100k, I will also have the opportunity to convert it to a Roth IRA. I'll have to look at whether or not I can take the tax hit in 2008, and the pro's and cons of doing this.

Another thing I want to look at once I'm settled in Cali is moving a large chunk of my HYSA to a money market fund, specifically the tax exempt California one offered by Vanguard. My after tax return might be able to beat out my current high yeild savings accounts, especially since I'm not rate chasing. This article by The Finance Buff which suggests it may be so. It'll make more of a difference if I itemize deductions (I usually take the standard), so I'll have to do a little research on this. Or another option: TIPs? I have heard a lot about them, but my knowledge is limited. A high yield savings account is a great start, but I think I'm ready to see what else is out there and make sure I'm getting the best deal.

Tuesday, January 8, 2008

Renter's Insurance

I'm a little ashamed, as a personal finance blogger, to admit that I have been living in my apartment for 1.5 years without renters insurance. It is so cheap, but I just never got around to buying it.

My new apartment manager has said "you need to have renters insurance", which I'm not sure if she means it is a requirement or just strongly suggested. I'm going to take it as being required. Geico has given me the lowest quote so far, $163.00/year, primarily because I was able to adjust the deductable to $5000. Yes, this is a lot, but that is what an efund is for. I have to call the manager and find out the answer to a bunch of questions (construction type, distance to fire hydrant...) to get the most accurate quote, but I think I'll go with it. Other Cali readers, what do you know about earthquake coverage? Do I really need it?

The next step is getting off my dad's car insurance (yeah, I know...)

Along with a milllion other things I have to do in order to pull off this move! My last day at my current job is next Tuesday!

Sunday, January 6, 2008

Family Ties

I do not come from a wealthy family. My parents do alright--a nurse and an electrician--but probably lean more towards working class than middle class. I'm from the Midwest, and a chunk of my relatives are from a small town (about 20,000 people) in a relatively unpopulated typical Midwestern state. We went back to visit for the hoidays this year, and apparently my dad had been talking about my new job with his relatives.

Aunt: So, the big move is coming up! You are going to be a California girl! Did they give you a large enough starting salary?
Me: Yeah, I think it should be enough. It is expensive there, but I'll be okay.
Aunt: Oh yeah.... Well your dad was just saying that he didn't think that they gave you enough. With the rent increase and all.
Me: :::awkward silence::: No, no... It should be enough. I mean, where I live now is really cheap, but I'll be able to afford to live there.

In this blog, I have no problems stating how much I'm making. Yet this conversation with my aunt made me extremely uncomfortable for a couple reasons. First, it is someone I know in real life, and I'm not anonymous. I don't particularly like sharing salary information with friends and family. However the biggest reason was the particular audience. My aunt is in her late thirties and is a substitute teacher. She has a 5 year old son which she raises, though the father is still somewhere in the picture. I don't know how much money she might make in a given year, but I would venture it's roughly 1/3 of my new salary. Maybe less.

When I got my first job, my dad shared the exact numbers with his family, probably only because he was so proud. After that, I asked him not to discuss my salary with his relatives, and I don't think he gave exact numbers this time. He's just a talker, and he's proud of me. Besides, what she was saying is partially true. The salary increase just barely offsets the rent increase, and with taxes and other expenses, I'm probably coming out slightly behind. I don't resent that. There is some price to pay for perfect weather and the great nature, being blocks from the ocean. There is a price to pay for not having to scrape ice off my windows and wear three layers of pants. But it isn't as though I'll be struggling.

I think each generation hopes that the next will be better off than them. At the same time, it might be difficult for them to see without some twinge of envy, even if they truly are proud.

Friday, January 4, 2008

Rent in an expensive city

I'm feeling a little resentful of the rent check I'll be writing for the next year. I'm worried it was a mistake. It was completely my choice: $1425/month for a small place in a good neighborhood close to work. For just me. No roommates. EXPENSIVE city. So far, I have not heard of anyone who has rent this high....

I wanted to spend about $1000, but I couldn't figure out how to do it. The only person i know in the city is my boyfriend, and while we do plan to ultimately live together, it isn't going to be right away. At least a year away. I didn't want to find a roommate off the internet. All the cheaper apartments were in scary areas with a lot of crime, rape 600% higher than the rest of the city. It came down to paying $1200 for a dumpier place further from work, or paying the extra money for the convenience of being close to work. So i chose it. I signed up for a year.

It isn't as though I can't afford it. I can afford it, while also affording to fund a Roth, put at least 10% in a 401k, accumulate savings, and pay down student loans. I can afford it, but I just would rather not. It is so much money, as I pay less than $600 currently. Less than $600!!!! For a one bedroom place all by myself!

I'm priced out of the housing market for now, and may not be in the city five years anyway. It just stinks to pay $17000 a year and get nothing in return.

Staying the course

I have an asset allocation I'm comfortable with. I have goals I like, and prioritized appropriately. My current goals are keeping an e-fund in savings, funding retirement accounts, and general savings for a future car/home. Also, paying student loans, though this is a low priority.

Then I get an idea in my head and want to run with it. I start to wonder if I'm being too conservative. I suddenly think that I need to open up a taxable account for investments . Despite the fact that none of my goals are long enough away (besides retirement) that a taxable account really makes more sense than a simple high yield savings account. I start to think 4-5% isn't enough, and that I need to grow my wealth faster.

Logically, I don't really believe I'm ready for a taxable account. I have too many other goals to randomly throw another one in the mix for no good reason. What is the money for? Why not put it in retirement? Or savings? Besides the fact that before I open a taxable investment account, I have some research to do on how to be tax efficient.

I think it is the comments of my friend ringing in my ears, even if these comments aren't necessarily qualified. We just have different philosophies.
"He'd probably do something stupid with the money, like leave it in savings instead of investing it."
"I am young. I want to invest as much as I can now."

I have a good plan and good goals. I just have to stay the course

Thursday, January 3, 2008

Christmas and New Years Round-up

It has been a hectic few weeks, and I hope to have some serious posts as life returns to normal. However, normalcy probably won't truly settle in for awhile--I'm moving over 2000 miles to a new home this month! Still, vacation mode is over and things should be more normal around here. Here is a round up of my financial status for the past couple weeks.

I spent roughly $410 on Christmas presents
  • $60 for my mom: Contributed to a GPS with my sistesr
  • $55 for my dad: XM radio subscription
  • $25 for my grandparents: Applebees giftcard
  • $20 for a drinks for my friends
  • $60 each for two of my sisters: Mostly clothes and make-up
  • $40 for my boyfriends family (including shipping): A nice blanket and random treats
  • $70 for the boyfriend: A nice zip up university sweatshirt he had coveted
  • $30 for my sisters boyfriend: Sweatshirt
  • $30 for my brother in law: Gift card to best buy
  • $20 for my nephew: A baby bible and color book
There was an additional $100 in other random Christmas expenses: Gas to get to my sister's and back, a cheap Christmas day train ticket, and a few meals for me and my sister.

I spent $555 (not including previously purchased $400 plane ticket) on new years eve vacation which lasted about five days. About $100 of it was due to me paying for my boyfriends share of things, since he is a poor grad student and I have a real job, and I wanted him to join us on all activities. Luckily, there was no hotel costs since we stayed in his apartment. (I do not currently live in the same city as him, hence the move.)
  • $170 on food
  • $125 on car rental and gas
  • $200 on alochol and going out (yikes!), including a somewhat pricey New Years Eve
  • $60 on general entertainment
My net worth increased by about $3000 in December despite all that spending and despite my $500 security deposit for my new place being taken out. Not only did I have my regular paychecks, I had about $5000 in a year end incentive bonus as income. That definitely helped things along. Anyway, I did update my NetworthIQ page, so feel free to click on over for details.

Did I meet my year end goals? What are my new goals? I have to review whether or not I met my 2007 goals. I think I met some of them, but not all. I need to rework my 2008 goals and decide what I want to do financially this year.

The last thing to mention is today's small impulse buy. In a spur of the moment decision, I raced to Walmart and picked up a humidifier and cold medicine at about 11:00 pm tonight. Yes, I'm a little sick. The humidifier was only about $25, but I obviously did not buy quality, nor did I research the best deals. I also sort of dislike Walmart, but nothing else was open and I felt really crappy. Now, time for bed, as it is back to work tomorrow for my last few days.

Thursday, January 31, 2008

Should you neotiate your starting salary?

Common knowledge is to always try to negotiate your starting salary. In most cases, the worst that can happen is they will say no. There is a possible exception for entry level positions at large companies, when it is hard to distinguish yourself from the next person holding a similar degree. You hear entry level people claim they are special because they have good grades, an internship or two, and extracurriculars. Well, great, but so do most people (good) companies interview. It isn't that you aren't special, it is just that the company probably doesn't know it yet. The company I worked for right out of school had a standard "new hire" offer, and it was basically take it or leave it. Smaller companies probably are more flexible. It still might not hurt to ask if the offer is negotiable, but be prepared to back up your request with reasons why you deserve more.

When I was job shopping for my relocation, I was in a unique position. In my industry you typically are moved up from Engineer 1 to Engineer 2" after roughly two years, if you are a good performer. (While I was almost certainly doing Engineer 2 work by the end of my last job, HR had strict rules about minimum amount of experience.) I was job shopping with 1.5 years of experience, so I still had to look for Engineer I jobs. Yet I didn't want to be caught by a "standard new hire offer", since I did have some experience and some graduate coursework.

I think that my first job offer was a standard new hire offer. I easily negotiated an extra 2k and a 3k signing bonus. The second job offer seemed to take my experience into consideration, and came in 2k than negotiated first offer, and a similar signing bonus. I chose the second, not entirely for monetary reasons.

With the salary being just 1k below my hope of 70k-75k range, I was faced with the decision of whether or not to ask for more. I thought the offer was fair. I thought they took my experience and graduate coursework into consideration. If I were to ask if it was negotiable, I'm not sure what I'd say when they asked "why do you think you deserve more?" So I didn't negotiate.

Now that I'm on the inside, I have acess to their salary tables. Here they are for my job category:

Level Low Mid High
1 $42000 $62000 $78000
2 $49000 $72000 $90000
3 $60000 $88000 $110000
4 $72000 $105000 $132000
5 $88000 $129000 $162000
6 $102000 $150000 $187000

So, you can see that my offer was above the middle for Engineer 1, and poised quite nicely to be moved into an Engineer 2 position, provided I perform well. Could I have asked for more? Yes. Would they have given it to me? Maybe. Maybe not. The range I was hoping for more closely lines up with the middle of the Engineer 2 range.

While maybe I could have squeezed out a few more dollars, I do feel very fortunate to be here. It's a top company, and has many graduates from top universities. There are lots of brilliant people here. I went to a state school with a good regional reputation (at best) and no reputation in this area. I now have an opportunity to finish my MS degree at a top ten university in my field. On their dime. I should be done in less than two years if they accept my transfer credits. Nice. The competition here is more stiff than at my last company--I would have easily been a star at my last company--but that will be good for me. Always surround yourself with people smarter than you are.

Wednesday, January 30, 2008

Health Insurance options

I signed up for health insurance benefits at my new company today. I had essentially three choices.

HMO
I've never used an HMO, and though I have heard some negative press about them, I think it would work ok for me. I don't have health issues and am a low maintenance customer. Free to me, minimal copays ($15 for my monthly prescription). I don't think I would mind being forced to deal with a Primary Care Physician.

Traditional PPO account
This cost about $16 per a bi weekly pay period, so just $416 year for premiums. Same copays as the HMO. You can see any in-network doctor and have a lot more freedom in your medical care. You can see out of network doctors for reduced benefits.

PPO + Health Savings Account (HSA)
This is free to me, but is a high deductible plan. Preventative care is covered 100%, but everything else is out of pocket up to the deductible, then benefits kick in. With this plan, I am eligible for a HSA to put pre-tax dollars in to spend on medical care, which carry over year to year. My company will contribute $700 to this account. I believe the yearly deductible is about $1500, but I can't quite recall.

I used a HSA at my last job (which had worse benefit options) so I'm already comfortable with them. I felt doubts about my HSA at the end of last year, because almost all the money I put in I took back out to buy my prescriptions with. My company didn't contribute. However, regular insurance was still 60/mo, so I came out... Well, I think I came out a little behind using the Health savings Account at my last job. But you live, you learn. I pretty much immediately ruled out the traditional PPO, because it seemed so similar to the HMO, except you could see more doctors and you had to pay money for it. I didn't need the freedom. The HMO seemed like a really cheap option, so I considered it.

I was left to debate the HMO and the PPO+HSA. Barring catastrophe, I need very little medical care. I see the doctor once a year for a women's health check-up, and use birth control each month, which does cost $45 without coverage. Last year I got an eye infection and was fixed up for about $100. I exercise, but I don't play any physical sports. Or any sports, really.

So, I went with the HSA, and chose to contribute $1500 of my own money to it. At first glance, that seems like the most expensive choice. My company contribution will cover my prescription costs, and probably nearly all other costs, so the plan is still free to me. Except I'll also have $1500 stored up for future health expenses. Next year, I shouldn't have to contribute much at all, though I probably will try to build it a little each year. In the short term, it is less cash in my pocket now. But the money being set aside is mine. It offers flexibility in the long term.

Something to note, a big disadvantage of HSA's are the fees. Most plans you can find online have high fees and/or no investment options. My HSA administrator really is no better, but the company pays the fees for me. I'm not intending to use this account as a sort of IRA for health (as suggested by Jonathan on MyMoneyBlog), so investment opportunities aren't a big priority either.

Did I make the right choice? Well, it depends on if I have any major surprise medical issues this year. Let's hope it was a good choice.

January Net Worth and Goals

It is that time of the month again.... Time for a net worth update!

As expected, my net worth took a hit this month. I switched jobs and was only paid for less than 2 weeks in the new year. Plus I front loaded my pre-tax Health Savings Account at my old job, so my paycheck was extra small. Not to mention the dip in my investments and extra spending associated with moving. Oh, and I paid rent in two places this month---$575 in Iowa and an astounding $1425 in Los Angeles. (And my new place is quite a bit smaller.) Luckily, I really am only obligated to pay for half of January, so come February 1st, I have to pay "only" $762.50. There was also a $500 security deposit for my new place (I'm due $100 from my old place), and a modem that will be eventually covered by rebates for $100.

With all that said, here are the results:

January Net Worth: $11,235, down $1,824, or -13.97% from $13,059.

The detailed numbers can be seen on my NetworthIQ page (sidebar). I did move $1000 to Roth IRA, which hurt my cash savings. The rest of the loss was expenses described above. It is worth noting that I should make up all of that next month (and more), provided my relocation money and signing bonus are processed.

I took a break from monthly goals for December and January, due to all the transitions. I'm going to do the same for February, at least until I get my first paycheck and I know exactly what I'm working with.

Tuesday, January 29, 2008

I "saved" $25 on my grocery bill

I went on my first full shopping trip since relocating and moving into my apartment. I looked at the current balance of my grocery bill in horror. How on earth was it at $79 already? And they still were ringing up my order!! The grand total was $95, then they swiped my Ralph's card and it dropped to $70. It is ridiculous that they do that. It is just forcing you to use a grocery card if you want any discounts at all.

Anyway, $70 is still much more than I spend on weekly groceries. About double! Although part of it was because I'm restocking almost everything, it still was a bit excessive. I think my solution will be to make this last two weeks.... so no new groceries until Februrary 12th! I am pretty sure I can do it. When I complain there is no food to eat, I usually mean, there is nothing I feel like cooking and eating.

What on earth did I buy? Well, I won't copy my whole long receipt, but here are some of the more expensive items on the list.
Chicken breast fillets $8.90. I don't usually buy meat, actually. I'm not vegetarian, but I'm not a big fan of meat and I don't really know how to prepare it well.
Frozen Strawberries, huge bag, $8.50 (should last a very long time. For smoothies)
Lunch meat, 2 packages, $5 (much cheaper than buying a sandwhich!)
Peperoni to make English muffin pizza's: $3.50
Lunch cheese
: $4.19, I forgot to price shop this I think
I also bought butter, milk, bananas, coffee creamer, 2 boxes of cereal, frozen broccoli and lots of other miscellaneous items.

There were some things on the list I didn't get. I had a frugal recipe that called for ziti, so I set out to the pasta isle. When I didn't find it, I realized I wasn't entirely sure if ziti was pasta at all. Maybe it was a cheese? So I'm back at home, ziti-less and just looked it up. It was pasta after all. I also could not find any muffin mix to make bran muffins. Maybe no one else likes them?

I liked to have a grocery budget of about $120/month, but I may have to up it. We'll see.

Shopping due to weight fluxuations

I must have lost a little weight over the course of the last year, as most of my jeans have been getting a little baggy. It wasn't a significant ammount, but I'm small already, so five pounds in either direction can make my clothes fit differently. Then seven to ten pounds means a whole new pants size. Seems like Mapgirl is having the opposite problem which is admittedly more common. Anyway, to remedy this, I ordered some jeans from Banana Republic on sale for $31.99. I couldn't try them on, so I crossed my fingers on the size, 2L. I only need "Long" sometimes, but that was all that was left. This was before I picked up two new pairs on sale at Jcrew for about $35 each. I really didn't need 3 new pairs, just two! The jeans arrived yesterday, and are too long, as I suspected they might be. It is a bit of a releif, now I don't have to decide weather or not to return them. Obviously, they must go back. They were cute jeans too, so I would have been tempted to keep them. I have to eat $6.00 in shipping (couldn't find a free shipping code), but I will still get $32 back on my card. That'll teach me to buy jeans without trying them on. (They were only available online anyway. The ones in the store didn't work out either.

My new rule on clothes is nothig that isn't directly appropriate for work for the next six months. Does that really mean no fun clothes until June 29th? Yes! It is not as ambitious as other young bloggers no clothing resoluitions (Meg and Wanda are two examples), but it is a step in the right direction. Also, I just donated a huge pile of clothes I never wore to Goodwill, so another rule is, for every item that comes into the closet, something has to go in a donation pile. That is super logical, will help with clutter, and will inspire extra cautioun in purchasing! An exception may be made for shoes, but with caution.

Also, I have a couple pairs of pants I had made for me when I was in Hong Kong that are now a little too big as well. Some don't have belt loops, so they are nearly unwearable. In fact, I wore one pair with a safety pin in an emergency situation. Classy! I think it is time to find a tailor and get those pants wearable again. Much more frugal than buying more dress pants! Do any of you have experience with using a tailor? And if I get them taken in, can they later be taken out if necessary?

Either that or I can fatten up a little bit... but that is also expensive because my metabolism would require a big calorie surplus to accomplish that!

Sunday, January 27, 2008

An alternate solution to internet and cable

My internet and cable aren't being installed until Saturday. Yet here I am, on the internet from the comfort of my own apartment. That's right, I'm mooching off someone else's unsecured connection.

How unethical do you consider this? I know some people who do it regularly as their primary source of internet. I usually do it in situations like this--I don't have legitimate access to the internet, but I have a legitimate desire to be on it!

To be honest, I'm not certain of the security concerns of this. If I'm connected to their network, could they potentially access my computer? I don't think so.

I spent the day settling in to my new apartment. While I filled up my new Ikea dresser, it tipped over and nearly killed me. No worries, the only casualty was a barely noticeable cosmetic piece we are going to try to repair later this week. I listened to NPR all day, and I am pretty sure that once my six month deal runs out for cable, I will be able to do without it. I'm not going to lie, I'll miss some of the absolute crap TV shows that I watch but my life is probably better off without them (example: Real Housewives of Orange County). The shows that I really love (when there isn't a writers strike) are all available online (Office and Grey's).

Internet I couldn't live without.... but could I just mooch off a neighbors connection? I probably wouldn't. Not only because of the moral concerns, but because it may not be reliable and completely secure. What do you think?

Expenseive weekend, again!

This weekend was very very very expensive. I feel like I've said that too many weekends in a row! I purchased a nice big dresser from Ikea, and now have real drawers to put my clothes in! That was a hit of $150, but money well spent. Then I also bought some other random organizing supplies--my closet has a lot of shelving and I want to make it organized and neat. By the time I left Ikea, it was a bill of over $220! What a dangerous store! I didn't even buy everything a needed wanted: more lighting, shoe rack, coat hooks, and some decorations.

I somehow got tricked into taking the boyfriend and I out for sushi. I wasn't exactly tricked, but the sushi was pretty over priced, and that was another $40 out the window, just like that. I asked him how often he thought we should go out to eat, and suggested once a week, and he said maybe less, once every two weeks. That's what he says in theory, but he has suggested eating out several times this week. I don't mind taking us out to eat sometimes. However, I do need him to understand that he can't say one day "Let's save up 150k in three years!" and then the next day say "I need money for the take out!" I was getting a $35 meal stipend while I was in the hotel, however, that meal stipend was my only income for a week and a half!

We wanted to meet up with my boyfriends friend last night, who I hadn't yet met. His friend suggested going out to eat (again!), then suggested just eating at whole foods. So i paid $7 for a sandwich, and then we bought a $13 bottle of wine.

So that is the boring details of my weekend spending. I'm afraid to add those numbers up, but.. $280? Yikes!! Was my life more enjoyable when I didn't feel pain every time I paid $7 for a sandwich? I think I need to loosen up about things and realize it is just money. Not spend more, or not cease to think about purchases. But if a purchase is something I ultimately decided I want to spend (dresser), have to spend (drivers license fee), or am willing to spend to go with the flow (sandwich from whole food), what is the point of getting all worried about it?

I think I get my first paycheck February 7th. To say that I'm anxiously waiting would be an understatement!

Wednesday, January 23, 2008

New cable and internet service

I'm in the process of moving into my new apartment. Technically, I've been paying for rent since January 15th (they wouldn't allow me to change my move in date), but I'm still getting set up.

In apartment buildings, you often don't have a choice for your cable television and internet provider. My apartment is serviced by Time Warner, and that is my only choice for TV. I was offered free installation and $30/mo for digital cable and $30/mo for internet for a limited six month period. A cable modem is required, but they had a deal where you could get a "free" modem through rebates. There also is $100 cash back in rebates for new services.

So..... Wow. A lot of rebates involved! The rebates are offered through broadbandoffers.com, which a quick Google search turned up lots of negative reviews. Still, I'm going to file the rebates anyway, get delivery confirmation for a couple bucks, then cross my fingers that they will eventually send my $180 worth of checks. Oh, and "free" didn't include shipping or CA state tax, so it wasn't exactly free, but $20 for a cable modem is reasonable, I suppose.

I think that negative reviews are par for the course when it comes to rebates. If everything goes smoothly with your rebate, you aren't likely to go online and write a happy review. But if something is screwed up, you may go write a bad one. I read a lot of negative reviews about the company I bought my laptop from, but I received the over $200 in rebates. It just took a long time. That isn't to say that mail in rebates aren't a pain in the butt. They are. But I'm optimistic. I was going to sign up for the service anyway, so if they want to give me $100 to do something I already planned on, then great.

To me, $60 seems reasonable and fair for internet and television. I've never had a problem getting fair and reasonable service... for the first six months or year. However, once the promos end, the same service jumps to about $100 a month, which seems high. Besides pulling the personal finance trick of asking for a lower rate, I probably will switch to cheaper internet and drop the cable to get the price down to about $45 a month. With cable, it would still be $80/month, which is pretty expensive to me. Maybe once my promo ends, I can look into options like DirectTV and DSL services, to see if they are viable options.

Tuesday, January 22, 2008

Free time... to browes ikea.com!

So, not having a job is expensive! Not only do I not have a paycheck showing up until February 7th (yikes, last paycheck was last Friday, and it wasn't for the full amount), but I have more free time.

Free time in which to think about how better to utilize my new apartment.... My new apartment is smaller than my last, and things don't quite fit the way I'd like. Some of my furniture is nice enough, but everything feels too crowded. Crowded, like I took a 600+ square foot apartment and moved it into a 500 square foot apartment. One hundred square feet is more than you would think Or, more than I would think. Everything just feels cluttered, and I don't like it.
Really, why are flat screen TV's still so darn expensive? My living room would look at least 3 times more put together if I had one, but it just isn't worth the price.

The kitchen is teeny tiny (one drawer for the whole kitchen?), so my buffet that used to live in my old kitchen has been promoted to TV stand. Except it doesn't match the rest of the nice dark wood in my living room. Is it important enough to change? How important is it for woods to match? Probably not incredibly important, though it probably would pull the room together a little more. And the (already small) kitchen table? Well, we are storing that under the bed for now.

My bedroom is a mishmash of cheap furniture, but it always was. I used to have a "red" theme going on, but it seems to have vanished with the curtains and duvet cover. Now it is sort of a blank slate. Do I want to do anything with this? I also don't own a proper dresser or chest of drawers. It's true. I keep about half my belongings in plastic drawers (hidden in closet!) and the other half in a cheap thing from Target, half bookshelf with some felt-type drawers. I am plotting a trip to IKEA and am dreaming of purchasing this chest of drawers, in no small part because of the little mirror on top. I'll have to see it in person to see how sturdy it is.

Should someone who doesn't have a job really go to Ikea??? Okay, I have a job. I just don't start until Friday...

Monday, January 21, 2008

Most depressing day of the year?

Did you hear the news stories that claimed that January 24th is most depressing day of the year? (That particular article was from 2005, but the theory still holds.)

It's partly due to the weather, partly due to a "hangover" from Christmas. Our credit card bills are due, although I'm sure no responsible pf blog readers charged Christmas on a credit card. If we made new years resolutions, it has become obvious we aren't succeeding. There are no major holidays to look forward to.... And to top it off, your investments probably are doing horribly!

I try not to follow the stock markets too closely--I'm a long term investor and shouldn't worry that my 401k has lost a bunch this year. But hearing about the overseas market on Monday (US had a holiday) and the overnight markets on Tuesday, i feel like we are in for a beating tomorrow. Tomorrow may be the more depressing than today supposedly was! But, it's not like I follow the stock markets too closely or anything. . . .

First time purchaser of car insurance

I've been doing some research on car insurance, now that I'm finally getting myself off of my parents policy. Yeah, I know, I'm a mooch! I originally budgeted $100/month for auto and rental insurance policies. Depending on the coverage i get, this may be too high or too low... But it seems close to right on. I've been pricing it out at Geico for now, and once I've firmed up the level of coverage I want to pay for, I'll price shop with other companies. Perhaps there is a discount through my new employer. My cousin also sells insurance, so I'll be sure to get a quote from her.

Here is a chart of the different prices I was quoted for different options from Geico. (BI = Bodily Injury, PD = Property Damage, MED = Midical, UI = Uninsured motorist, COMP = comprehensive and COLL = Collision). The BI and UI went to higher levels, but Geico told me that I had requested too many quotes before I could fill in the whole chart!


Most people are probably pretty familiar with auto insurance terms. I am not. I've never shopped for insurance and had no idea what 15/30/5 meant. Luckily, all the insurance sites did a good job of explaining these terms, and there was also a nice article at the Smart Money site that covers the basics.

To determine the level I need, I checked out emunds.com, which recommends:
General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don't buy excess coverage.

Ok, simple. I don't have much for assets, but to go from the state minimum of 15/30/5 to 25/50/25 was only about $40 over the course of six months, so i decided to buy up. In particular, the property damage liability was cheap to increase, so I did. There are a lot of expensive cars in this city, and $5000 wouldn't begin to repair most of them. As my assets increase, I suppose my coverage levels also would have to increase. I threw in uninsured motorist coverage, just in case. I declined medical (i have medical insurance), roadside assistance and rental coverage.

Now it was time to look at the expensive stuff--collision and comprehensive. For $45 for six months, comprehensive seemed like a good bet. My parents car was stolen last year, and they were kicking themselves for not carrying comprehensive insurance. The next question I was faced with was the biggie: do I want collision insurance? My car is about 8 years old. It's a Dodge Stratus with 80k miles on it. Oh, and it has a salvaged title. It's not exactly a junky car, but it's defintely not nice either. I looked up the Kelly Blue Book Value, and at most it is worth $3400. They won't do an estimate for the salvage title, so it is defintely worth less than that. The cost of the highest deductible ($1000) is $144.00 for six months. For that I'd be getting about $2000 worth of coverage.

Reasons not to carry collision:
  • I have an emergency fund that could buy a cheap car of similar (or better) value
  • I put a line item in my 2008 budget for a new(er) car fund
  • It isn't recommended to buy collision/comprehensive if the premiums cost more than 10% of the amount of coverage you are getting (value of car - deductible)

Reasons to carry collision
-I've never driven in a city this large before, and I'm a little nervous about it
-I haven't been in an accident since I was a teenager, but I'm not the worlds best driver
-I can afford it in my budget.

I decided that for the first six months to one year living here, I'm going to carry collision insurance. Then I'll re-evaluate my options. At that point, if I'm still driving this car, I'd probably drop it. Also, the difference in price for $500 deductible versus a $1000 was almost negligible. Even though I'm generally a fan of higher deductibles (or rather, the lower premiums that come with them), I chose to go with the $500 deductible.

Now that I know exactly what I want, I'm going to see if I can get it for a better price. At first glance, Geico seems to have a really good price, but I want to check a few others before committing.

Saturday, January 19, 2008

New job, new city, new expenses!

After a stressful week, I'm finally in Los Angeles for good! That's right, I live here now! It is still sinking in that I can go outside without a coat (and hat and gloves!)

Actually, it could have been MUCH more stressful. My new company paid for movers to come in and pack up all my stuff. They pay to ship my car. They bought my plane ticket, and paid for a hotel. They are currently putting me up in an extended stay hotel and giving me $35 per diem for food. And paying for a rental car! So I really shouldn't complain. My flight was delayed about two hours and I didn't get much sleep, so yesterday was sort of awful. But now, things are looking good.

Unfortunately, I've been really loose with my money lately. I don't know why. I need to stop! I will stop!

Random Expenses:
  • $50 in miscellaneous supplies to clean my apartment for move out
  • $150 in random pre-trip spending (book, suitecase, god knows what else at Target/Walmart!)
  • $25 at a "going away" meal with a few friends.
  • $10 at the airport for food and orange juice (was feeling sick)
  • $6 for a latte and snack at Starbucks in the airport in Chicago. I later spilled pretty much the entire latte. What a waste!
  • $500 security deposit for new apartment.
Upcoming expenses:
  • Tipping the movers. I'm not sure how much but maybe $100 for the three to split. (Any suggestions??)
  • Next months rent. I get to pay half priced next month, so this is about $700
  • Two belated birthday presents for my sisters, about $50 each
  • Random move in costs (replacing things that I didn't bring with), probably less than $100 if I'm careful
Luckily, I have some upcoming income:
  • 21 hours of pay for my old job's leftover vacation
  • $1000 money as part of a relocation package. I think this is tax assisted.
  • $3000 signing bonus (not tax assisted)
  • $30 refund from the cable company
  • $100 security deposit refund from old apartment
  • New and improved paycheck!

Cutting my hair costs

I'm not big into beauty, hair, and make-up. That isn't to say I'm not into looking nice, I just don't get into it the way some girls do. I wear minimal make up and can't do much with my hair beyond straightening it or pulling it back.

However, after graduating college, I started highlighting my hair again. I quit during college because it was too expensive, my mom wouldn't fund it like in high school, and really, no one cared what my hair looked like. These days, my routine is to go in for a nice cut and highlight touch up about once every three months. My hair dresser was always encouraging me to come in more often, but I stretched it out as long as I could. If I got my eyebrows waxed, it would run me about $150, which averages out to $50/month on hair care.

The hair cuts I still like. She was really good, and I'll pay for a good hair cut. But I'm considering quitting the highlights and sticking with my natural hair color for awhile. It's easier to deal with and healthier for my hair. Highlights look really nice, but I've looked through some pictures of me with my natural color, and I think I can deal with that. It just doesn't seem worth it to spend that much money on my hair right now.

What do you spend on hair care?

Thursday, January 17, 2008

Professional Wardrobe

I read a lot of personal finance blogs. I've read many great articles from young women my age who talk about how to build a quality professional wardrobe.

I've sort of lucked out with my current job. The standard dress code is "business casual" but it definitely leans much further towards casual than many companies. There is a loose policy of "jeans Friday" but many many people in our department wear jeans every day. While I did have to buy new clothes for a new job (my college gear really couldn't even stack up to business casual), I didn't have to invest in business suites or expensive shirts and trousers.

To top it off, I work in in a midwestern city with terrible shopping. We have Gap and Express (which both occasionally have decent work clothes), but no Banana Republic, no J. Crew. There are also some upscale department stores, but they just aren't worth going to. (And that is just my complaints about work clothes, don't get me started on finding stylish outfits.) I'm not saying everyone at my work place lacks style... But come on, we are engineers and there is exactly one other girl under 30 on my team, so I really don't have a lot of competition.

Where is my wardrobe from? I have two nice pairs of dress pants from Gap outlet, one from express, and two that were handmade for me when I studied abroad in Hong Kong. My jeans come from Old Navy, American Eagle, or Gap. My shirts are mostly from Old Navy, H&M, Target, or Kohls. My shoes are from all over, but none were very expensive.

The great thing is, I've gotten complements on my wardrobe more than once from my coworkers. "You don't shop around here, do you? You always have such cute clothes and shoes." It's flattering--I can pick out stylish and work appropriate clothes without spending a lot of money. But, like I said, our office is pretty casual. Most people won't wear sweatshirts (note that i said MOST), but you don't really see ties either.

Will I be able to get away with this wardrobe at my new job?

Maybe, at least some of it. When I interviewed the dress seemed pretty casual, but I think that since the shopping will be much better, it might be wise (or fun) to invest in a few nicer pieces. I still will look for good deals, but I'll definitely focus a more on quality for non-trendy items. (For example, Forever 21 is off my list of stores I'll buy things from. I know they are cheap, but the only two items I purchased from them broke. The strap on a cheap party dress broke and the buttons on a cute dress shirt all fell off.) I'll try to survive on what I have initially, and get a feel for what the other young women in my department are wearing, then if necessary, purchase some new things.

Wednesday, January 16, 2008

Daft, Unattainable, Meaningless and Bogus Goals

My boyfriend randomly started up a personal finance conversation with me last night. He isn't that well informed (though he's good with money), so it was fun for me to share what I've learned from this personal finance blogosphere. Not that I mentioned my blog--it's private for now, though I wouldn't be horrified to share it with him.

One thing he came up with was a goal that we should try to have 150k saved up for a house in the next 3.5 years. Not that I do "SMART" goals (specific, measurable... acheiveable... see, I don't even know the acroynm), but I don't to dumb goals either. In fact, I invented a new acronym: Daft, Unattainable, Meaningless and Bogus! I asked if there was any math involved in coming up with that number, and he said no. He just took the date when he'd be done with grad school, pulled another number out of a hat, and said it would be a good goal for our house downpayment.

I did some quick math. Assuming I had to come up with 1/2 of that, I would have to save about $1800 a month. I could maybe do it, if I stopped saving for retirement! Besides, I'm not really all that keen on property ownership at this point in my life. I don't even know where I want to settle! I told him that we could discuss a goal like this if/when we are engaged, but for now, I'm sticking to my own goals. I'm willing to compromise, but not just on some whim of his!

Speaking of retirement, I would like to leave you with this depressing snapshot of my 401k. I'm sure glad I don't need this money for years!

Leaving a job with class

I had my last day at my old job yesterday. Mapgirl, a blog I read regularly, also recently switched jobs. She put together a series of posts on how to leave your job, financial and non-financial aspects. I had planned to do the same, so here are my tips from my last days on the job.

General
  • Give appropriate notice. Two weeks is minimum, longer if you think you can. I told my boss about a month in advance, and we told the rest of the group about a week later. For your own sanity, don't tell them TOO soon. I've been plotting my move for well over six months, but I didn't want to end up on a "short timers" list, given crappy assignments and having my work affected by knowledge I was leaving. So I kept my mouth shut for quite some time.
  • Consider timing. I chose to leave in mid-January for several reasons. First, I wanted to be reimbursed for my tuition from the semester ending in December. Second, we have holiday shutdown from December 23rd-January 1st, and I thought being paid for my Christmas break would be nice. Also, bonus are given in December, though I only would have had to stay through the end of the fiscal year to be eligible for it. It isn't always worth waiting for things like this, but sometimes it is.
  • Stay motivated up until the end. This is much easier said than done! While I met my commitments and did my best to transfer knowledge to my coworkers, I have to admit that I was a little less of an achiever in my last few days. It is hard to ignore that little voice in your head saying "Well, what are they going to do, fire me?"
Staying in Touch
  • Be sure to get any contact information of people who you may later want as references. The boss I had for the majority of my time at the company recently transfered to a new location, and I emailed him and requested a personal email address, in case I need it in the future.
  • Leave your contact information with anyone who might want it. I wrote a quick email to my group thanking them for making my time with my company be pleasurable, and included my gmail address at the end.
  • Say your goodbyes! You likely will not see most of these people again
Benefits/Money
  • Ensure that your last paycheck will find you, either through direct deposit or however else they do it.
  • Ask about your vacation hours. I believe companies are required by law to pay them out to you, but that may vary state by state. My company said they would include them in my last paycheck. All 10 hours of it, ha. (I use up my vacation as soon as I earn it!) If that isn't the case, then talk to your boss about the possibility of using most of it before you leave.
  • Check on your 401k. If you have a really small balance, they can require you to take it out of the plan. In most cases, you can leave it there at least for awhile. I plan to roll mine over eventually, just not right away. You my have some funds that require a waiting period to avoid fees.
  • Make sure you know what portion of your retirement is vested. I became fully vested after three years of service. Luckily, the count the start of that from the first date I did my internship. Even though I only have worked there full time 1.5 years, I got to keep the company match. It amounts to about $6000.
  • Your medical plan will likely go through the end of the month. After that, you may need COBRA or other insurance if your new job doesn't offer insurance on day one. Consider using your insurance, if you already haven't. I was sure to order contacts (my company pays for $120 if you do a buy-up on the vision plan.) If you have a flex spending account, you also can use it, even if you haven't contributed it yet. It may be a bit unethical to knowingly do this, but it is legal.
I've never left a full time job before. When I left my internships, it was a given that I'd be heading back to school, so there were no explanations needed. I felt a little guilty "abaondoning" my team, especially as we were kind of at a make or break stage of our program. However, my reasons were mostly personal, and I left on good terms.

Tuesday, January 15, 2008

Financially Independent

I had three really close girl friends in high school. My senior year their was a fourth girl we spent a lot of time with as well. Of the five of us, I'm the ONLY ONE who is not currently married. I'm twenty-five, and the rest of them are about the same. Most have been married about a year, but one girl has been married almost 4 years already.

I've been with my boyfriend for about 3.5 years, and it isn't a real secret to many people that I had hoped to be engaged quite awhile ago. I'm not exactly "pushing for it" at this point (does that really work anyway?) but based on conversations we had in our relationship, I honestly thought it would have happened awhile ago. However, plans adjusted, and it seems like it'll happen eventually, but there isn't a rush right now. People around here don't always understand that. They think at 25, I'm a candidate for becoming an old maid. I'm willing to wait, at least for now. There certainly may come a time when waiting isn't the right thing for me anymore, but I don't know when that time is.

Oh, wait, is this personal finance blog? What is my point?

As much as I thought getting married ASAP would be ideal, there is something to be said for starting off a career on your own. I enjoy reading other young female bloggers, especially those who are also unmarried, and thinking how just a couple generations ago our lives would have been unthinkable. Though I admit I've had the emotional support of a relationship, I do rent my own apartment, pay my own bills, and really came into my own financially in a way that I simply wouldn't have had I been legally tied to another person. I'm sure we would have figured this stuff out together, but the whole financially independent thing is something I'm a little proud of myself for accomplishing. Independence in general is something I'm proud of.

Trent over at the The Simple Dollar recently wrote about how having a family and kids has totally changed his priorities in life. Being unmarried (when most of the people I know are married) has allowed me to keep my choices strictly my own. I'm not saying that I need to hold onto that forever, but I might as well enjoy this independence while I have it.

(Oh, and even though I'm all about frugality and practical purchases, I still want a diamond engagement ring. I simply can't help it. Do you agree?)

Monday, January 14, 2008

Spending cycle

It seems I can go months on a fairly tight budget, not desiring to spend a lot of money on anything really. I won't go shopping, I won't go out to eat, and I will build wealth fairly effectively.

January has not been one of those months. Part of it is because I'm moving out of my apartment (and city, state, and region!). I've bought several cleaning supplies that I probably could have got by without (or substituted with things I already own). I also bought a new large suitcase and an inexpensive exercise ball. Then I needed a new coffee mug, because mine ceased to be watertight and was spilling. Then a dinner with my friend, because I'm leaving. And some wine for him because he fixed my car speakers for free. And wine for myself, just because. And a magazine too, while I'm there. Oh, and I needed an oil change. And it's been like that, one thing after another, the money just has felt like it is flowing out. And out, and out and out.

It has been, too. I have spent at least $300 in the last couple weeks on non-bill related items. Perhaps more. I'm a little afraid to tally it, though I have a handy pearbudget spreadsheet all set up... The thing is, I knew that I'd be spending more than I make this month due to paying double rent because I'm moving. And due to getting 1 weeks less pay, due to switching jobs. So since I knew that, it seemed like I might as well just buy every cleaning supply I thought I'd need... At least it should help me get my $100 deposit back!

Well, anyway, it's time to tighten up ship again! I pledge to conciously think about each purchase I make for the rest of the month, and only buy things I really need!

Saturday, January 12, 2008

Parents and personal finance

I think my parents are finally getting serious about their finances. It's long overdue (they are in their late 40s) but better now than in 10 or 20 more years. Or never.

To clarify, my mom has always been relatively good with her money. She was the one who paid the bills and took us clothes shopping. She rarely bought anything for herself (and conveniently, shared our clothes when we were in high school! The perks of being a petite woman with three girls!) and always worked hard. She has been good with money, but doesn't seem to branch too far from the basics of budgeting and getting things paid.

My dad has always been awful with money. He grew up in a very poor family and didn't learn anything about how to manage money. Things went alright for them when he worked for someone else. He'd get paid, turn the check into my mom, and she took care of the magic. It all fell apart when he went to business for himself. He worked hard enough, but it takes more than that to run a business. Let's just say that from the time I was about 16 until earlier this year, their finances were a bit of a disaster.

These days, my parents are doing something pretty neat since all of us kids are off on our own. My mom does travel nursing, and my dad (an electrician) finds work wherever they go. They take 3-6 month assignments in various cities in the US (mostly California, lately) and work. They are too young to retire, but they are able to see more of the world than they ever have before. I'm very proud that they took the initiative to do this, and they seem to really love it.

Anyway, for the first time in my life, my dad seems to be exceptionally careful with money. They have finally canceled their home phone line (they are there less than 6 months a year anyway!) and he announced to me that he was happy that that was saving him $30 a month. He also realized he was being charged a fee for his checking account, and promptly switched to a different version. Since they are traveling a lot, it doesn't make a lot of sense to buy "stuff", so they don't purchase a whole lot anymore. He also has been pestering me to get off of his car insurance plan once I get settled into Los Angeles. That'll save him several hundred dollars!

As much as I have loved having my car insurance paid, it is really a huge relief for me to hear them talking about saving money. Even if it costs me.

He's still not perfect--for Christmas he bought some overpriced remote controlled helicopters for a couple of his nephews, even though they are so obviously too young to be able to fly them. I bet they are broken by now. Still, he's made huge headway.

I've never read Dave Ramsey's "Total Money Makeover" book. I'm not the target audience for it, but my dad seems like he might be. It would be a little awkward for me to give it to him, and he is more of a magazine/newspaper guy than a book guy. Still, I'm going to keep my eyes out for a non-intrusive way to suggest it. I'm excited that they might live in the same city as me for one of their assignments. If my dad is actually receptive to this personal finance stuff, I might be able to sneak in a few other suggestions. Get a high yield savings account! Check your credit report for free! Have you considered a Roth IRA? Can I help?!?! Please!

Does anyone else find themselves more versed in personal finance than their parents? Have you ever made suggestions to them, or is it usually the other way around?

Friday, January 11, 2008

I'm not in a hurry to pay off my debt

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

Tuition Reimbursement and Rental Insurance Update

In my industry, tuition reimbursement is pretty common. My current job has it, and my new job actually pays the tuition up front for you.

The problem I've run into is that Spring semester starts next week, and I am still finalizing my start date for my new job (most likely, February 1st). There is a class I'd really like to take this semester, but I don't want to pay for it out of my own pocket. I've been trying to get an answer from my new job about whether they will pay the bill for me (even some prorated ammount), or if I have to take a semester off from my distance learning program.

The cost for one class would be rough $1600. I could take this out of savings. Why would I do this, when employers typically pay for this cost? Well, I might do it in hopes that I can work something out with my new manager and get them to reimburse it. I might do it because the class sounds interesting and isn't offered often. I might do it so it won't take me even longer to finish my degree program. Since I have been unable to get an answer from the new job, I have seriously been contemplating paying for it out of pocket.

When it comes down to it though, $1600 is just too much money for me to spend. Here's to hoping they get me an answer soon!

In other news, I purhcased my rental insurance from Geico last night, with a 5k deductable. The reason I'm getting rental insurance, despite the fact that the value of the things in my apartment is probably less than the deductable, is the liability issues. The general rule (for me at least) is to insure yourself against thigns you can't afford to have happen. If my apartment burned down, I could afford to replace my belongings. That is why I have an e-fund. The policy also has some sort of "temporary living" terms that would help me out. What I couldn't afford is if my apartment burned down and it was blamed on me and I was sued for damages. I chose a high deductable, but also high "liability" coverage. It was only $163 for the year, and it was close to $300 for a more "reasonable" deductable of $1000 or $500.

Thursday, January 10, 2008

Who's better with money?

My boyfriend compliments me sometimes, saying that I'm good with money. He says that, but once or twice, he has added "but I'm better with it!"

I respectfully disagree with that sentiment. I'm better with money, he's just more stingy. Also, his stingyness comes primarily from the fact that he is a grad student and has a very limited disposable income. In general, he is selectively stingy. Back when he was making a reasonable income, he spent in the range of $3000 for private pilot flying lessons. So he spends less by buying cheap lunch meat and kraft singles, and I buy better stuff. I don't consider that being better with money, I consider that having more money and making choices, not being "worse" with money.

I think when we are married, we'll be able to manage our finances without too much conflict. We are both generally savers, but we are both (generally) willing to spend on certian things we value: for example, travel, occasional good meals, and wine. We should make decent money, and things should be smooth. And if they are not, we both are capable of cheap living.

I hope I get to be in charge of the budgeting and bill paying. I am a control freak and like that sort of thing, but he is a control freak as well. Of course, decision making will be together (which will be an adjustment after years of independence), but there has to be one executer.

I would like us both to be involved in our investment decisions. Since I already have a full time job and he is still in school, I'm a few years ahead of him in investment knowledge. Not that I'm an expert, but I'm at relatively comfortable with the basics. He does have a Roth IRA, but he opened it with a broker. Edward Jones, maybe? I'd need to let him know the virtues of target date funds, indexing, and low fees. Right now, he only has about 2-4k in there (I don't know the details), and I don't know the fees, so it isn't an issue. (Besides the fact we aren't even engaged!)

I think, over the next couple years (or until whenever it is we get married and what is "mine" officially becomes "ours") money might be a slight issue for us due to vast income disparity. If I want us to go out for dinner, I'm going to have to pay for it more often than not. He isn't gonig to demand to be taken out, but he doesn't have the funds to treat me too often. It is sort of something that I have accepted already over the last year and a half of me working and him being a student. It can be frusterating, especially when my my two closest friends from high school (who were students at the time) received coach purses for christmas last year from their signifcant others. I got a nice necklace, which is great, but it would be nice to be spoiled every now and then. Maybe he can spoil me in ways that don't involve spending money.

Wednesday, January 9, 2008

Having less than my friends

I spent the week surrounding New Years Eve with a friend I rarely see (we met on a study abroad semester), our boyfriends, and another friend of hers. With the exception of my boyfriend (still a grad student), everyone had just recently entered the working world.

One night, they wanted to go to a "fancy" restaurant for dinner one night, and my boyfriend and I politely declined but offered them the use of the car to go. They graciously offered to treat us, so we agreed to come along. The bf and I politely ordered relatively lower priced items (still probably $40 each), and the others ordered appetizers and dessert (though they were kind enough to share). Dinner for the five of us was about $350, maybe more. The food was decent, but didn't knock my socks off. The service was good, but not worth that kind of money to me at this point in my life.

Then there was the shopping. My jaw just about fell off when one girl stated that a $1000 handbag was "within the price range" she was looking for. I have no idea her salary (though I do think she lives with her parents, meaning, no rent, which helps), but it just seemed utterly unreasonable to pay that much for a handbag. Still, people do it. All the time. Just not many people that I know.

Sometimes it strikes me unfair when I see people my age spending on expensive items. In many cases, it is flat out unfair--their parents helped them through school and maybe even still subsidize their lifestyles, while mine didn't. Very few people are wealthy by their own doing at age 24. Many people are comfortable (myself included), but having enough wealth to live the high life? Not me.

Really, it doesn't matter if it is fair or not. Not one bit. All that matters is they are good people who don't make me feel bad about being more careful with my money. I do my best not to make them feel bad that they do spend more money.

I think when I move to Los Angeles, I'm going to run into this feeling a lot more than I do here in the Midwest. I'm extremely down to earth, and the L.A. stereotype isn't. I'm sure some won't fit the stereotype, but I'll surely meet a lot more people with piles of money than I know now. I'll also working at a big name company where many people went to top schools. I went to state school. You've never heard of my school. I was smart enough for a better school, but the finances just wouldn't have worked out. In some ways, it makes me proud of myself. I got to the same place as them, on my own, without a fancy school or lots of money. Even so, I wouldn't have minded if my parents paid for a top notch education. It wouldn't make me any less of a person.

Anyway,the girl who bought a Burberry towel (a towel? Why?) and a $250 watch (spur of the moment, out of spite!) suggests getting one coke at a pizza place and sharing the free refils. Too funny.

Retirement and Savings options

I took $1000 out of my high yeild savings account and directed it into my Roth IRA for 2008. Really, for true dollar cost averaging, I only contributed $585 above what I would normally contribute for a month. My Roth is fully invested in a 2050 target date retirement fund for now.

I could have funded the whole year with savings, but I don't feel that I have the approrpriate cushion in my savings, especially with a cross country move coming up. Besides that, with markets being so shaky, I'm not sure I want to throw dollar cost averaging out the window this year. I wouldn't be surprised if the market recovers nicely, but I also wouldn't be surprised if it declines as well. I'm not an expert.

Since I'm leaving this job, I'm going to have the option of rolling my 401k (about 16k) into a regular IRA. Since my MAGI is less than $100k, I will also have the opportunity to convert it to a Roth IRA. I'll have to look at whether or not I can take the tax hit in 2008, and the pro's and cons of doing this.

Another thing I want to look at once I'm settled in Cali is moving a large chunk of my HYSA to a money market fund, specifically the tax exempt California one offered by Vanguard. My after tax return might be able to beat out my current high yeild savings accounts, especially since I'm not rate chasing. This article by The Finance Buff which suggests it may be so. It'll make more of a difference if I itemize deductions (I usually take the standard), so I'll have to do a little research on this. Or another option: TIPs? I have heard a lot about them, but my knowledge is limited. A high yield savings account is a great start, but I think I'm ready to see what else is out there and make sure I'm getting the best deal.

Tuesday, January 8, 2008

Renter's Insurance

I'm a little ashamed, as a personal finance blogger, to admit that I have been living in my apartment for 1.5 years without renters insurance. It is so cheap, but I just never got around to buying it.

My new apartment manager has said "you need to have renters insurance", which I'm not sure if she means it is a requirement or just strongly suggested. I'm going to take it as being required. Geico has given me the lowest quote so far, $163.00/year, primarily because I was able to adjust the deductable to $5000. Yes, this is a lot, but that is what an efund is for. I have to call the manager and find out the answer to a bunch of questions (construction type, distance to fire hydrant...) to get the most accurate quote, but I think I'll go with it. Other Cali readers, what do you know about earthquake coverage? Do I really need it?

The next step is getting off my dad's car insurance (yeah, I know...)

Along with a milllion other things I have to do in order to pull off this move! My last day at my current job is next Tuesday!

Sunday, January 6, 2008

Family Ties

I do not come from a wealthy family. My parents do alright--a nurse and an electrician--but probably lean more towards working class than middle class. I'm from the Midwest, and a chunk of my relatives are from a small town (about 20,000 people) in a relatively unpopulated typical Midwestern state. We went back to visit for the hoidays this year, and apparently my dad had been talking about my new job with his relatives.

Aunt: So, the big move is coming up! You are going to be a California girl! Did they give you a large enough starting salary?
Me: Yeah, I think it should be enough. It is expensive there, but I'll be okay.
Aunt: Oh yeah.... Well your dad was just saying that he didn't think that they gave you enough. With the rent increase and all.
Me: :::awkward silence::: No, no... It should be enough. I mean, where I live now is really cheap, but I'll be able to afford to live there.

In this blog, I have no problems stating how much I'm making. Yet this conversation with my aunt made me extremely uncomfortable for a couple reasons. First, it is someone I know in real life, and I'm not anonymous. I don't particularly like sharing salary information with friends and family. However the biggest reason was the particular audience. My aunt is in her late thirties and is a substitute teacher. She has a 5 year old son which she raises, though the father is still somewhere in the picture. I don't know how much money she might make in a given year, but I would venture it's roughly 1/3 of my new salary. Maybe less.

When I got my first job, my dad shared the exact numbers with his family, probably only because he was so proud. After that, I asked him not to discuss my salary with his relatives, and I don't think he gave exact numbers this time. He's just a talker, and he's proud of me. Besides, what she was saying is partially true. The salary increase just barely offsets the rent increase, and with taxes and other expenses, I'm probably coming out slightly behind. I don't resent that. There is some price to pay for perfect weather and the great nature, being blocks from the ocean. There is a price to pay for not having to scrape ice off my windows and wear three layers of pants. But it isn't as though I'll be struggling.

I think each generation hopes that the next will be better off than them. At the same time, it might be difficult for them to see without some twinge of envy, even if they truly are proud.

Friday, January 4, 2008

Rent in an expensive city

I'm feeling a little resentful of the rent check I'll be writing for the next year. I'm worried it was a mistake. It was completely my choice: $1425/month for a small place in a good neighborhood close to work. For just me. No roommates. EXPENSIVE city. So far, I have not heard of anyone who has rent this high....

I wanted to spend about $1000, but I couldn't figure out how to do it. The only person i know in the city is my boyfriend, and while we do plan to ultimately live together, it isn't going to be right away. At least a year away. I didn't want to find a roommate off the internet. All the cheaper apartments were in scary areas with a lot of crime, rape 600% higher than the rest of the city. It came down to paying $1200 for a dumpier place further from work, or paying the extra money for the convenience of being close to work. So i chose it. I signed up for a year.

It isn't as though I can't afford it. I can afford it, while also affording to fund a Roth, put at least 10% in a 401k, accumulate savings, and pay down student loans. I can afford it, but I just would rather not. It is so much money, as I pay less than $600 currently. Less than $600!!!! For a one bedroom place all by myself!

I'm priced out of the housing market for now, and may not be in the city five years anyway. It just stinks to pay $17000 a year and get nothing in return.

Staying the course

I have an asset allocation I'm comfortable with. I have goals I like, and prioritized appropriately. My current goals are keeping an e-fund in savings, funding retirement accounts, and general savings for a future car/home. Also, paying student loans, though this is a low priority.

Then I get an idea in my head and want to run with it. I start to wonder if I'm being too conservative. I suddenly think that I need to open up a taxable account for investments . Despite the fact that none of my goals are long enough away (besides retirement) that a taxable account really makes more sense than a simple high yield savings account. I start to think 4-5% isn't enough, and that I need to grow my wealth faster.

Logically, I don't really believe I'm ready for a taxable account. I have too many other goals to randomly throw another one in the mix for no good reason. What is the money for? Why not put it in retirement? Or savings? Besides the fact that before I open a taxable investment account, I have some research to do on how to be tax efficient.

I think it is the comments of my friend ringing in my ears, even if these comments aren't necessarily qualified. We just have different philosophies.
"He'd probably do something stupid with the money, like leave it in savings instead of investing it."
"I am young. I want to invest as much as I can now."

I have a good plan and good goals. I just have to stay the course

Thursday, January 3, 2008

Christmas and New Years Round-up

It has been a hectic few weeks, and I hope to have some serious posts as life returns to normal. However, normalcy probably won't truly settle in for awhile--I'm moving over 2000 miles to a new home this month! Still, vacation mode is over and things should be more normal around here. Here is a round up of my financial status for the past couple weeks.

I spent roughly $410 on Christmas presents
  • $60 for my mom: Contributed to a GPS with my sistesr
  • $55 for my dad: XM radio subscription
  • $25 for my grandparents: Applebees giftcard
  • $20 for a drinks for my friends
  • $60 each for two of my sisters: Mostly clothes and make-up
  • $40 for my boyfriends family (including shipping): A nice blanket and random treats
  • $70 for the boyfriend: A nice zip up university sweatshirt he had coveted
  • $30 for my sisters boyfriend: Sweatshirt
  • $30 for my brother in law: Gift card to best buy
  • $20 for my nephew: A baby bible and color book
There was an additional $100 in other random Christmas expenses: Gas to get to my sister's and back, a cheap Christmas day train ticket, and a few meals for me and my sister.

I spent $555 (not including previously purchased $400 plane ticket) on new years eve vacation which lasted about five days. About $100 of it was due to me paying for my boyfriends share of things, since he is a poor grad student and I have a real job, and I wanted him to join us on all activities. Luckily, there was no hotel costs since we stayed in his apartment. (I do not currently live in the same city as him, hence the move.)
  • $170 on food
  • $125 on car rental and gas
  • $200 on alochol and going out (yikes!), including a somewhat pricey New Years Eve
  • $60 on general entertainment
My net worth increased by about $3000 in December despite all that spending and despite my $500 security deposit for my new place being taken out. Not only did I have my regular paychecks, I had about $5000 in a year end incentive bonus as income. That definitely helped things along. Anyway, I did update my NetworthIQ page, so feel free to click on over for details.

Did I meet my year end goals? What are my new goals? I have to review whether or not I met my 2007 goals. I think I met some of them, but not all. I need to rework my 2008 goals and decide what I want to do financially this year.

The last thing to mention is today's small impulse buy. In a spur of the moment decision, I raced to Walmart and picked up a humidifier and cold medicine at about 11:00 pm tonight. Yes, I'm a little sick. The humidifier was only about $25, but I obviously did not buy quality, nor did I research the best deals. I also sort of dislike Walmart, but nothing else was open and I felt really crappy. Now, time for bed, as it is back to work tomorrow for my last few days.

Thursday, January 31, 2008

Should you neotiate your starting salary?

Common knowledge is to always try to negotiate your starting salary. In most cases, the worst that can happen is they will say no. There is a possible exception for entry level positions at large companies, when it is hard to distinguish yourself from the next person holding a similar degree. You hear entry level people claim they are special because they have good grades, an internship or two, and extracurriculars. Well, great, but so do most people (good) companies interview. It isn't that you aren't special, it is just that the company probably doesn't know it yet. The company I worked for right out of school had a standard "new hire" offer, and it was basically take it or leave it. Smaller companies probably are more flexible. It still might not hurt to ask if the offer is negotiable, but be prepared to back up your request with reasons why you deserve more.

When I was job shopping for my relocation, I was in a unique position. In my industry you typically are moved up from Engineer 1 to Engineer 2" after roughly two years, if you are a good performer. (While I was almost certainly doing Engineer 2 work by the end of my last job, HR had strict rules about minimum amount of experience.) I was job shopping with 1.5 years of experience, so I still had to look for Engineer I jobs. Yet I didn't want to be caught by a "standard new hire offer", since I did have some experience and some graduate coursework.

I think that my first job offer was a standard new hire offer. I easily negotiated an extra 2k and a 3k signing bonus. The second job offer seemed to take my experience into consideration, and came in 2k than negotiated first offer, and a similar signing bonus. I chose the second, not entirely for monetary reasons.

With the salary being just 1k below my hope of 70k-75k range, I was faced with the decision of whether or not to ask for more. I thought the offer was fair. I thought they took my experience and graduate coursework into consideration. If I were to ask if it was negotiable, I'm not sure what I'd say when they asked "why do you think you deserve more?" So I didn't negotiate.

Now that I'm on the inside, I have acess to their salary tables. Here they are for my job category:

Level Low Mid High
1 $42000 $62000 $78000
2 $49000 $72000 $90000
3 $60000 $88000 $110000
4 $72000 $105000 $132000
5 $88000 $129000 $162000
6 $102000 $150000 $187000

So, you can see that my offer was above the middle for Engineer 1, and poised quite nicely to be moved into an Engineer 2 position, provided I perform well. Could I have asked for more? Yes. Would they have given it to me? Maybe. Maybe not. The range I was hoping for more closely lines up with the middle of the Engineer 2 range.

While maybe I could have squeezed out a few more dollars, I do feel very fortunate to be here. It's a top company, and has many graduates from top universities. There are lots of brilliant people here. I went to a state school with a good regional reputation (at best) and no reputation in this area. I now have an opportunity to finish my MS degree at a top ten university in my field. On their dime. I should be done in less than two years if they accept my transfer credits. Nice. The competition here is more stiff than at my last company--I would have easily been a star at my last company--but that will be good for me. Always surround yourself with people smarter than you are.

Wednesday, January 30, 2008

Health Insurance options

I signed up for health insurance benefits at my new company today. I had essentially three choices.

HMO
I've never used an HMO, and though I have heard some negative press about them, I think it would work ok for me. I don't have health issues and am a low maintenance customer. Free to me, minimal copays ($15 for my monthly prescription). I don't think I would mind being forced to deal with a Primary Care Physician.

Traditional PPO account
This cost about $16 per a bi weekly pay period, so just $416 year for premiums. Same copays as the HMO. You can see any in-network doctor and have a lot more freedom in your medical care. You can see out of network doctors for reduced benefits.

PPO + Health Savings Account (HSA)
This is free to me, but is a high deductible plan. Preventative care is covered 100%, but everything else is out of pocket up to the deductible, then benefits kick in. With this plan, I am eligible for a HSA to put pre-tax dollars in to spend on medical care, which carry over year to year. My company will contribute $700 to this account. I believe the yearly deductible is about $1500, but I can't quite recall.

I used a HSA at my last job (which had worse benefit options) so I'm already comfortable with them. I felt doubts about my HSA at the end of last year, because almost all the money I put in I took back out to buy my prescriptions with. My company didn't contribute. However, regular insurance was still 60/mo, so I came out... Well, I think I came out a little behind using the Health savings Account at my last job. But you live, you learn. I pretty much immediately ruled out the traditional PPO, because it seemed so similar to the HMO, except you could see more doctors and you had to pay money for it. I didn't need the freedom. The HMO seemed like a really cheap option, so I considered it.

I was left to debate the HMO and the PPO+HSA. Barring catastrophe, I need very little medical care. I see the doctor once a year for a women's health check-up, and use birth control each month, which does cost $45 without coverage. Last year I got an eye infection and was fixed up for about $100. I exercise, but I don't play any physical sports. Or any sports, really.

So, I went with the HSA, and chose to contribute $1500 of my own money to it. At first glance, that seems like the most expensive choice. My company contribution will cover my prescription costs, and probably nearly all other costs, so the plan is still free to me. Except I'll also have $1500 stored up for future health expenses. Next year, I shouldn't have to contribute much at all, though I probably will try to build it a little each year. In the short term, it is less cash in my pocket now. But the money being set aside is mine. It offers flexibility in the long term.

Something to note, a big disadvantage of HSA's are the fees. Most plans you can find online have high fees and/or no investment options. My HSA administrator really is no better, but the company pays the fees for me. I'm not intending to use this account as a sort of IRA for health (as suggested by Jonathan on MyMoneyBlog), so investment opportunities aren't a big priority either.

Did I make the right choice? Well, it depends on if I have any major surprise medical issues this year. Let's hope it was a good choice.

January Net Worth and Goals

It is that time of the month again.... Time for a net worth update!

As expected, my net worth took a hit this month. I switched jobs and was only paid for less than 2 weeks in the new year. Plus I front loaded my pre-tax Health Savings Account at my old job, so my paycheck was extra small. Not to mention the dip in my investments and extra spending associated with moving. Oh, and I paid rent in two places this month---$575 in Iowa and an astounding $1425 in Los Angeles. (And my new place is quite a bit smaller.) Luckily, I really am only obligated to pay for half of January, so come February 1st, I have to pay "only" $762.50. There was also a $500 security deposit for my new place (I'm due $100 from my old place), and a modem that will be eventually covered by rebates for $100.

With all that said, here are the results:

January Net Worth: $11,235, down $1,824, or -13.97% from $13,059.

The detailed numbers can be seen on my NetworthIQ page (sidebar). I did move $1000 to Roth IRA, which hurt my cash savings. The rest of the loss was expenses described above. It is worth noting that I should make up all of that next month (and more), provided my relocation money and signing bonus are processed.

I took a break from monthly goals for December and January, due to all the transitions. I'm going to do the same for February, at least until I get my first paycheck and I know exactly what I'm working with.

Tuesday, January 29, 2008

I "saved" $25 on my grocery bill

I went on my first full shopping trip since relocating and moving into my apartment. I looked at the current balance of my grocery bill in horror. How on earth was it at $79 already? And they still were ringing up my order!! The grand total was $95, then they swiped my Ralph's card and it dropped to $70. It is ridiculous that they do that. It is just forcing you to use a grocery card if you want any discounts at all.

Anyway, $70 is still much more than I spend on weekly groceries. About double! Although part of it was because I'm restocking almost everything, it still was a bit excessive. I think my solution will be to make this last two weeks.... so no new groceries until Februrary 12th! I am pretty sure I can do it. When I complain there is no food to eat, I usually mean, there is nothing I feel like cooking and eating.

What on earth did I buy? Well, I won't copy my whole long receipt, but here are some of the more expensive items on the list.
Chicken breast fillets $8.90. I don't usually buy meat, actually. I'm not vegetarian, but I'm not a big fan of meat and I don't really know how to prepare it well.
Frozen Strawberries, huge bag, $8.50 (should last a very long time. For smoothies)
Lunch meat, 2 packages, $5 (much cheaper than buying a sandwhich!)
Peperoni to make English muffin pizza's: $3.50
Lunch cheese
: $4.19, I forgot to price shop this I think
I also bought butter, milk, bananas, coffee creamer, 2 boxes of cereal, frozen broccoli and lots of other miscellaneous items.

There were some things on the list I didn't get. I had a frugal recipe that called for ziti, so I set out to the pasta isle. When I didn't find it, I realized I wasn't entirely sure if ziti was pasta at all. Maybe it was a cheese? So I'm back at home, ziti-less and just looked it up. It was pasta after all. I also could not find any muffin mix to make bran muffins. Maybe no one else likes them?

I liked to have a grocery budget of about $120/month, but I may have to up it. We'll see.

Shopping due to weight fluxuations

I must have lost a little weight over the course of the last year, as most of my jeans have been getting a little baggy. It wasn't a significant ammount, but I'm small already, so five pounds in either direction can make my clothes fit differently. Then seven to ten pounds means a whole new pants size. Seems like Mapgirl is having the opposite problem which is admittedly more common. Anyway, to remedy this, I ordered some jeans from Banana Republic on sale for $31.99. I couldn't try them on, so I crossed my fingers on the size, 2L. I only need "Long" sometimes, but that was all that was left. This was before I picked up two new pairs on sale at Jcrew for about $35 each. I really didn't need 3 new pairs, just two! The jeans arrived yesterday, and are too long, as I suspected they might be. It is a bit of a releif, now I don't have to decide weather or not to return them. Obviously, they must go back. They were cute jeans too, so I would have been tempted to keep them. I have to eat $6.00 in shipping (couldn't find a free shipping code), but I will still get $32 back on my card. That'll teach me to buy jeans without trying them on. (They were only available online anyway. The ones in the store didn't work out either.

My new rule on clothes is nothig that isn't directly appropriate for work for the next six months. Does that really mean no fun clothes until June 29th? Yes! It is not as ambitious as other young bloggers no clothing resoluitions (Meg and Wanda are two examples), but it is a step in the right direction. Also, I just donated a huge pile of clothes I never wore to Goodwill, so another rule is, for every item that comes into the closet, something has to go in a donation pile. That is super logical, will help with clutter, and will inspire extra cautioun in purchasing! An exception may be made for shoes, but with caution.

Also, I have a couple pairs of pants I had made for me when I was in Hong Kong that are now a little too big as well. Some don't have belt loops, so they are nearly unwearable. In fact, I wore one pair with a safety pin in an emergency situation. Classy! I think it is time to find a tailor and get those pants wearable again. Much more frugal than buying more dress pants! Do any of you have experience with using a tailor? And if I get them taken in, can they later be taken out if necessary?

Either that or I can fatten up a little bit... but that is also expensive because my metabolism would require a big calorie surplus to accomplish that!

Sunday, January 27, 2008

An alternate solution to internet and cable

My internet and cable aren't being installed until Saturday. Yet here I am, on the internet from the comfort of my own apartment. That's right, I'm mooching off someone else's unsecured connection.

How unethical do you consider this? I know some people who do it regularly as their primary source of internet. I usually do it in situations like this--I don't have legitimate access to the internet, but I have a legitimate desire to be on it!

To be honest, I'm not certain of the security concerns of this. If I'm connected to their network, could they potentially access my computer? I don't think so.

I spent the day settling in to my new apartment. While I filled up my new Ikea dresser, it tipped over and nearly killed me. No worries, the only casualty was a barely noticeable cosmetic piece we are going to try to repair later this week. I listened to NPR all day, and I am pretty sure that once my six month deal runs out for cable, I will be able to do without it. I'm not going to lie, I'll miss some of the absolute crap TV shows that I watch but my life is probably better off without them (example: Real Housewives of Orange County). The shows that I really love (when there isn't a writers strike) are all available online (Office and Grey's).

Internet I couldn't live without.... but could I just mooch off a neighbors connection? I probably wouldn't. Not only because of the moral concerns, but because it may not be reliable and completely secure. What do you think?

Expenseive weekend, again!

This weekend was very very very expensive. I feel like I've said that too many weekends in a row! I purchased a nice big dresser from Ikea, and now have real drawers to put my clothes in! That was a hit of $150, but money well spent. Then I also bought some other random organizing supplies--my closet has a lot of shelving and I want to make it organized and neat. By the time I left Ikea, it was a bill of over $220! What a dangerous store! I didn't even buy everything a needed wanted: more lighting, shoe rack, coat hooks, and some decorations.

I somehow got tricked into taking the boyfriend and I out for sushi. I wasn't exactly tricked, but the sushi was pretty over priced, and that was another $40 out the window, just like that. I asked him how often he thought we should go out to eat, and suggested once a week, and he said maybe less, once every two weeks. That's what he says in theory, but he has suggested eating out several times this week. I don't mind taking us out to eat sometimes. However, I do need him to understand that he can't say one day "Let's save up 150k in three years!" and then the next day say "I need money for the take out!" I was getting a $35 meal stipend while I was in the hotel, however, that meal stipend was my only income for a week and a half!

We wanted to meet up with my boyfriends friend last night, who I hadn't yet met. His friend suggested going out to eat (again!), then suggested just eating at whole foods. So i paid $7 for a sandwich, and then we bought a $13 bottle of wine.

So that is the boring details of my weekend spending. I'm afraid to add those numbers up, but.. $280? Yikes!! Was my life more enjoyable when I didn't feel pain every time I paid $7 for a sandwich? I think I need to loosen up about things and realize it is just money. Not spend more, or not cease to think about purchases. But if a purchase is something I ultimately decided I want to spend (dresser), have to spend (drivers license fee), or am willing to spend to go with the flow (sandwich from whole food), what is the point of getting all worried about it?

I think I get my first paycheck February 7th. To say that I'm anxiously waiting would be an understatement!

Wednesday, January 23, 2008

New cable and internet service

I'm in the process of moving into my new apartment. Technically, I've been paying for rent since January 15th (they wouldn't allow me to change my move in date), but I'm still getting set up.

In apartment buildings, you often don't have a choice for your cable television and internet provider. My apartment is serviced by Time Warner, and that is my only choice for TV. I was offered free installation and $30/mo for digital cable and $30/mo for internet for a limited six month period. A cable modem is required, but they had a deal where you could get a "free" modem through rebates. There also is $100 cash back in rebates for new services.

So..... Wow. A lot of rebates involved! The rebates are offered through broadbandoffers.com, which a quick Google search turned up lots of negative reviews. Still, I'm going to file the rebates anyway, get delivery confirmation for a couple bucks, then cross my fingers that they will eventually send my $180 worth of checks. Oh, and "free" didn't include shipping or CA state tax, so it wasn't exactly free, but $20 for a cable modem is reasonable, I suppose.

I think that negative reviews are par for the course when it comes to rebates. If everything goes smoothly with your rebate, you aren't likely to go online and write a happy review. But if something is screwed up, you may go write a bad one. I read a lot of negative reviews about the company I bought my laptop from, but I received the over $200 in rebates. It just took a long time. That isn't to say that mail in rebates aren't a pain in the butt. They are. But I'm optimistic. I was going to sign up for the service anyway, so if they want to give me $100 to do something I already planned on, then great.

To me, $60 seems reasonable and fair for internet and television. I've never had a problem getting fair and reasonable service... for the first six months or year. However, once the promos end, the same service jumps to about $100 a month, which seems high. Besides pulling the personal finance trick of asking for a lower rate, I probably will switch to cheaper internet and drop the cable to get the price down to about $45 a month. With cable, it would still be $80/month, which is pretty expensive to me. Maybe once my promo ends, I can look into options like DirectTV and DSL services, to see if they are viable options.

Tuesday, January 22, 2008

Free time... to browes ikea.com!

So, not having a job is expensive! Not only do I not have a paycheck showing up until February 7th (yikes, last paycheck was last Friday, and it wasn't for the full amount), but I have more free time.

Free time in which to think about how better to utilize my new apartment.... My new apartment is smaller than my last, and things don't quite fit the way I'd like. Some of my furniture is nice enough, but everything feels too crowded. Crowded, like I took a 600+ square foot apartment and moved it into a 500 square foot apartment. One hundred square feet is more than you would think Or, more than I would think. Everything just feels cluttered, and I don't like it.
Really, why are flat screen TV's still so darn expensive? My living room would look at least 3 times more put together if I had one, but it just isn't worth the price.

The kitchen is teeny tiny (one drawer for the whole kitchen?), so my buffet that used to live in my old kitchen has been promoted to TV stand. Except it doesn't match the rest of the nice dark wood in my living room. Is it important enough to change? How important is it for woods to match? Probably not incredibly important, though it probably would pull the room together a little more. And the (already small) kitchen table? Well, we are storing that under the bed for now.

My bedroom is a mishmash of cheap furniture, but it always was. I used to have a "red" theme going on, but it seems to have vanished with the curtains and duvet cover. Now it is sort of a blank slate. Do I want to do anything with this? I also don't own a proper dresser or chest of drawers. It's true. I keep about half my belongings in plastic drawers (hidden in closet!) and the other half in a cheap thing from Target, half bookshelf with some felt-type drawers. I am plotting a trip to IKEA and am dreaming of purchasing this chest of drawers, in no small part because of the little mirror on top. I'll have to see it in person to see how sturdy it is.

Should someone who doesn't have a job really go to Ikea??? Okay, I have a job. I just don't start until Friday...

Monday, January 21, 2008

Most depressing day of the year?

Did you hear the news stories that claimed that January 24th is most depressing day of the year? (That particular article was from 2005, but the theory still holds.)

It's partly due to the weather, partly due to a "hangover" from Christmas. Our credit card bills are due, although I'm sure no responsible pf blog readers charged Christmas on a credit card. If we made new years resolutions, it has become obvious we aren't succeeding. There are no major holidays to look forward to.... And to top it off, your investments probably are doing horribly!

I try not to follow the stock markets too closely--I'm a long term investor and shouldn't worry that my 401k has lost a bunch this year. But hearing about the overseas market on Monday (US had a holiday) and the overnight markets on Tuesday, i feel like we are in for a beating tomorrow. Tomorrow may be the more depressing than today supposedly was! But, it's not like I follow the stock markets too closely or anything. . . .

First time purchaser of car insurance

I've been doing some research on car insurance, now that I'm finally getting myself off of my parents policy. Yeah, I know, I'm a mooch! I originally budgeted $100/month for auto and rental insurance policies. Depending on the coverage i get, this may be too high or too low... But it seems close to right on. I've been pricing it out at Geico for now, and once I've firmed up the level of coverage I want to pay for, I'll price shop with other companies. Perhaps there is a discount through my new employer. My cousin also sells insurance, so I'll be sure to get a quote from her.

Here is a chart of the different prices I was quoted for different options from Geico. (BI = Bodily Injury, PD = Property Damage, MED = Midical, UI = Uninsured motorist, COMP = comprehensive and COLL = Collision). The BI and UI went to higher levels, but Geico told me that I had requested too many quotes before I could fill in the whole chart!


Most people are probably pretty familiar with auto insurance terms. I am not. I've never shopped for insurance and had no idea what 15/30/5 meant. Luckily, all the insurance sites did a good job of explaining these terms, and there was also a nice article at the Smart Money site that covers the basics.

To determine the level I need, I checked out emunds.com, which recommends:

General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don't buy excess coverage.

Ok, simple. I don't have much for assets, but to go from the state minimum of 15/30/5 to 25/50/25 was only about $40 over the course of six months, so i decided to buy up. In particular, the property damage liability was cheap to increase, so I did. There are a lot of expensive cars in this city, and $5000 wouldn't begin to repair most of them. As my assets increase, I suppose my coverage levels also would have to increase. I threw in uninsured motorist coverage, just in case. I declined medical (i have medical insurance), roadside assistance and rental coverage.

Now it was time to look at the expensive stuff--collision and comprehensive. For $45 for six months, comprehensive seemed like a good bet. My parents car was stolen last year, and they were kicking themselves for not carrying comprehensive insurance. The next question I was faced with was the biggie: do I want collision insurance? My car is about 8 years old. It's a Dodge Stratus with 80k miles on it. Oh, and it has a salvaged title. It's not exactly a junky car, but it's defintely not nice either. I looked up the Kelly Blue Book Value, and at most it is worth $3400. They won't do an estimate for the salvage title, so it is defintely worth less than that. The cost of the highest deductible ($1000) is $144.00 for six months. For that I'd be getting about $2000 worth of coverage.

Reasons not to carry collision:
  • I have an emergency fund that could buy a cheap car of similar (or better) value
  • I put a line item in my 2008 budget for a new(er) car fund
  • It isn't recommended to buy collision/comprehensive if the premiums cost more than 10% of the amount of coverage you are getting (value of car - deductible)

Reasons to carry collision
-I've never driven in a city this large before, and I'm a little nervous about it
-I haven't been in an accident since I was a teenager, but I'm not the worlds best driver
-I can afford it in my budget.

I decided that for the first six months to one year living here, I'm going to carry collision insurance. Then I'll re-evaluate my options. At that point, if I'm still driving this car, I'd probably drop it. Also, the difference in price for $500 deductible versus a $1000 was almost negligible. Even though I'm generally a fan of higher deductibles (or rather, the lower premiums that come with them), I chose to go with the $500 deductible.

Now that I know exactly what I want, I'm going to see if I can get it for a better price. At first glance, Geico seems to have a really good price, but I want to check a few others before committing.

Saturday, January 19, 2008

New job, new city, new expenses!

After a stressful week, I'm finally in Los Angeles for good! That's right, I live here now! It is still sinking in that I can go outside without a coat (and hat and gloves!)

Actually, it could have been MUCH more stressful. My new company paid for movers to come in and pack up all my stuff. They pay to ship my car. They bought my plane ticket, and paid for a hotel. They are currently putting me up in an extended stay hotel and giving me $35 per diem for food. And paying for a rental car! So I really shouldn't complain. My flight was delayed about two hours and I didn't get much sleep, so yesterday was sort of awful. But now, things are looking good.

Unfortunately, I've been really loose with my money lately. I don't know why. I need to stop! I will stop!

Random Expenses:

  • $50 in miscellaneous supplies to clean my apartment for move out
  • $150 in random pre-trip spending (book, suitecase, god knows what else at Target/Walmart!)
  • $25 at a "going away" meal with a few friends.
  • $10 at the airport for food and orange juice (was feeling sick)
  • $6 for a latte and snack at Starbucks in the airport in Chicago. I later spilled pretty much the entire latte. What a waste!
  • $500 security deposit for new apartment.
Upcoming expenses:
  • Tipping the movers. I'm not sure how much but maybe $100 for the three to split. (Any suggestions??)
  • Next months rent. I get to pay half priced next month, so this is about $700
  • Two belated birthday presents for my sisters, about $50 each
  • Random move in costs (replacing things that I didn't bring with), probably less than $100 if I'm careful
Luckily, I have some upcoming income:
  • 21 hours of pay for my old job's leftover vacation
  • $1000 money as part of a relocation package. I think this is tax assisted.
  • $3000 signing bonus (not tax assisted)
  • $30 refund from the cable company
  • $100 security deposit refund from old apartment
  • New and improved paycheck!

Cutting my hair costs

I'm not big into beauty, hair, and make-up. That isn't to say I'm not into looking nice, I just don't get into it the way some girls do. I wear minimal make up and can't do much with my hair beyond straightening it or pulling it back.

However, after graduating college, I started highlighting my hair again. I quit during college because it was too expensive, my mom wouldn't fund it like in high school, and really, no one cared what my hair looked like. These days, my routine is to go in for a nice cut and highlight touch up about once every three months. My hair dresser was always encouraging me to come in more often, but I stretched it out as long as I could. If I got my eyebrows waxed, it would run me about $150, which averages out to $50/month on hair care.

The hair cuts I still like. She was really good, and I'll pay for a good hair cut. But I'm considering quitting the highlights and sticking with my natural hair color for awhile. It's easier to deal with and healthier for my hair. Highlights look really nice, but I've looked through some pictures of me with my natural color, and I think I can deal with that. It just doesn't seem worth it to spend that much money on my hair right now.

What do you spend on hair care?

Thursday, January 17, 2008

Professional Wardrobe

I read a lot of personal finance blogs. I've read many great articles from young women my age who talk about how to build a quality professional wardrobe.

I've sort of lucked out with my current job. The standard dress code is "business casual" but it definitely leans much further towards casual than many companies. There is a loose policy of "jeans Friday" but many many people in our department wear jeans every day. While I did have to buy new clothes for a new job (my college gear really couldn't even stack up to business casual), I didn't have to invest in business suites or expensive shirts and trousers.

To top it off, I work in in a midwestern city with terrible shopping. We have Gap and Express (which both occasionally have decent work clothes), but no Banana Republic, no J. Crew. There are also some upscale department stores, but they just aren't worth going to. (And that is just my complaints about work clothes, don't get me started on finding stylish outfits.) I'm not saying everyone at my work place lacks style... But come on, we are engineers and there is exactly one other girl under 30 on my team, so I really don't have a lot of competition.

Where is my wardrobe from? I have two nice pairs of dress pants from Gap outlet, one from express, and two that were handmade for me when I studied abroad in Hong Kong. My jeans come from Old Navy, American Eagle, or Gap. My shirts are mostly from Old Navy, H&M, Target, or Kohls. My shoes are from all over, but none were very expensive.

The great thing is, I've gotten complements on my wardrobe more than once from my coworkers. "You don't shop around here, do you? You always have such cute clothes and shoes." It's flattering--I can pick out stylish and work appropriate clothes without spending a lot of money. But, like I said, our office is pretty casual. Most people won't wear sweatshirts (note that i said MOST), but you don't really see ties either.

Will I be able to get away with this wardrobe at my new job?

Maybe, at least some of it. When I interviewed the dress seemed pretty casual, but I think that since the shopping will be much better, it might be wise (or fun) to invest in a few nicer pieces. I still will look for good deals, but I'll definitely focus a more on quality for non-trendy items. (For example, Forever 21 is off my list of stores I'll buy things from. I know they are cheap, but the only two items I purchased from them broke. The strap on a cheap party dress broke and the buttons on a cute dress shirt all fell off.) I'll try to survive on what I have initially, and get a feel for what the other young women in my department are wearing, then if necessary, purchase some new things.

Wednesday, January 16, 2008

Daft, Unattainable, Meaningless and Bogus Goals

My boyfriend randomly started up a personal finance conversation with me last night. He isn't that well informed (though he's good with money), so it was fun for me to share what I've learned from this personal finance blogosphere. Not that I mentioned my blog--it's private for now, though I wouldn't be horrified to share it with him.

One thing he came up with was a goal that we should try to have 150k saved up for a house in the next 3.5 years. Not that I do "SMART" goals (specific, measurable... acheiveable... see, I don't even know the acroynm), but I don't to dumb goals either. In fact, I invented a new acronym: Daft, Unattainable, Meaningless and Bogus! I asked if there was any math involved in coming up with that number, and he said no. He just took the date when he'd be done with grad school, pulled another number out of a hat, and said it would be a good goal for our house downpayment.

I did some quick math. Assuming I had to come up with 1/2 of that, I would have to save about $1800 a month. I could maybe do it, if I stopped saving for retirement! Besides, I'm not really all that keen on property ownership at this point in my life. I don't even know where I want to settle! I told him that we could discuss a goal like this if/when we are engaged, but for now, I'm sticking to my own goals. I'm willing to compromise, but not just on some whim of his!

Speaking of retirement, I would like to leave you with this depressing snapshot of my 401k. I'm sure glad I don't need this money for years!

Leaving a job with class

I had my last day at my old job yesterday. Mapgirl, a blog I read regularly, also recently switched jobs. She put together a series of posts on how to leave your job, financial and non-financial aspects. I had planned to do the same, so here are my tips from my last days on the job.

General

  • Give appropriate notice. Two weeks is minimum, longer if you think you can. I told my boss about a month in advance, and we told the rest of the group about a week later. For your own sanity, don't tell them TOO soon. I've been plotting my move for well over six months, but I didn't want to end up on a "short timers" list, given crappy assignments and having my work affected by knowledge I was leaving. So I kept my mouth shut for quite some time.
  • Consider timing. I chose to leave in mid-January for several reasons. First, I wanted to be reimbursed for my tuition from the semester ending in December. Second, we have holiday shutdown from December 23rd-January 1st, and I thought being paid for my Christmas break would be nice. Also, bonus are given in December, though I only would have had to stay through the end of the fiscal year to be eligible for it. It isn't always worth waiting for things like this, but sometimes it is.
  • Stay motivated up until the end. This is much easier said than done! While I met my commitments and did my best to transfer knowledge to my coworkers, I have to admit that I was a little less of an achiever in my last few days. It is hard to ignore that little voice in your head saying "Well, what are they going to do, fire me?"
Staying in Touch
  • Be sure to get any contact information of people who you may later want as references. The boss I had for the majority of my time at the company recently transfered to a new location, and I emailed him and requested a personal email address, in case I need it in the future.
  • Leave your contact information with anyone who might want it. I wrote a quick email to my group thanking them for making my time with my company be pleasurable, and included my gmail address at the end.
  • Say your goodbyes! You likely will not see most of these people again
Benefits/Money
  • Ensure that your last paycheck will find you, either through direct deposit or however else they do it.
  • Ask about your vacation hours. I believe companies are required by law to pay them out to you, but that may vary state by state. My company said they would include them in my last paycheck. All 10 hours of it, ha. (I use up my vacation as soon as I earn it!) If that isn't the case, then talk to your boss about the possibility of using most of it before you leave.
  • Check on your 401k. If you have a really small balance, they can require you to take it out of the plan. In most cases, you can leave it there at least for awhile. I plan to roll mine over eventually, just not right away. You my have some funds that require a waiting period to avoid fees.
  • Make sure you know what portion of your retirement is vested. I became fully vested after three years of service. Luckily, the count the start of that from the first date I did my internship. Even though I only have worked there full time 1.5 years, I got to keep the company match. It amounts to about $6000.
  • Your medical plan will likely go through the end of the month. After that, you may need COBRA or other insurance if your new job doesn't offer insurance on day one. Consider using your insurance, if you already haven't. I was sure to order contacts (my company pays for $120 if you do a buy-up on the vision plan.) If you have a flex spending account, you also can use it, even if you haven't contributed it yet. It may be a bit unethical to knowingly do this, but it is legal.
I've never left a full time job before. When I left my internships, it was a given that I'd be heading back to school, so there were no explanations needed. I felt a little guilty "abaondoning" my team, especially as we were kind of at a make or break stage of our program. However, my reasons were mostly personal, and I left on good terms.

Tuesday, January 15, 2008

Financially Independent

I had three really close girl friends in high school. My senior year their was a fourth girl we spent a lot of time with as well. Of the five of us, I'm the ONLY ONE who is not currently married. I'm twenty-five, and the rest of them are about the same. Most have been married about a year, but one girl has been married almost 4 years already.

I've been with my boyfriend for about 3.5 years, and it isn't a real secret to many people that I had hoped to be engaged quite awhile ago. I'm not exactly "pushing for it" at this point (does that really work anyway?) but based on conversations we had in our relationship, I honestly thought it would have happened awhile ago. However, plans adjusted, and it seems like it'll happen eventually, but there isn't a rush right now. People around here don't always understand that. They think at 25, I'm a candidate for becoming an old maid. I'm willing to wait, at least for now. There certainly may come a time when waiting isn't the right thing for me anymore, but I don't know when that time is.

Oh, wait, is this personal finance blog? What is my point?

As much as I thought getting married ASAP would be ideal, there is something to be said for starting off a career on your own. I enjoy reading other young female bloggers, especially those who are also unmarried, and thinking how just a couple generations ago our lives would have been unthinkable. Though I admit I've had the emotional support of a relationship, I do rent my own apartment, pay my own bills, and really came into my own financially in a way that I simply wouldn't have had I been legally tied to another person. I'm sure we would have figured this stuff out together, but the whole financially independent thing is something I'm a little proud of myself for accomplishing. Independence in general is something I'm proud of.

Trent over at the The Simple Dollar recently wrote about how having a family and kids has totally changed his priorities in life. Being unmarried (when most of the people I know are married) has allowed me to keep my choices strictly my own. I'm not saying that I need to hold onto that forever, but I might as well enjoy this independence while I have it.

(Oh, and even though I'm all about frugality and practical purchases, I still want a diamond engagement ring. I simply can't help it. Do you agree?)

Monday, January 14, 2008

Spending cycle

It seems I can go months on a fairly tight budget, not desiring to spend a lot of money on anything really. I won't go shopping, I won't go out to eat, and I will build wealth fairly effectively.

January has not been one of those months. Part of it is because I'm moving out of my apartment (and city, state, and region!). I've bought several cleaning supplies that I probably could have got by without (or substituted with things I already own). I also bought a new large suitcase and an inexpensive exercise ball. Then I needed a new coffee mug, because mine ceased to be watertight and was spilling. Then a dinner with my friend, because I'm leaving. And some wine for him because he fixed my car speakers for free. And wine for myself, just because. And a magazine too, while I'm there. Oh, and I needed an oil change. And it's been like that, one thing after another, the money just has felt like it is flowing out. And out, and out and out.

It has been, too. I have spent at least $300 in the last couple weeks on non-bill related items. Perhaps more. I'm a little afraid to tally it, though I have a handy pearbudget spreadsheet all set up... The thing is, I knew that I'd be spending more than I make this month due to paying double rent because I'm moving. And due to getting 1 weeks less pay, due to switching jobs. So since I knew that, it seemed like I might as well just buy every cleaning supply I thought I'd need... At least it should help me get my $100 deposit back!

Well, anyway, it's time to tighten up ship again! I pledge to conciously think about each purchase I make for the rest of the month, and only buy things I really need!

Saturday, January 12, 2008

Parents and personal finance

I think my parents are finally getting serious about their finances. It's long overdue (they are in their late 40s) but better now than in 10 or 20 more years. Or never.

To clarify, my mom has always been relatively good with her money. She was the one who paid the bills and took us clothes shopping. She rarely bought anything for herself (and conveniently, shared our clothes when we were in high school! The perks of being a petite woman with three girls!) and always worked hard. She has been good with money, but doesn't seem to branch too far from the basics of budgeting and getting things paid.

My dad has always been awful with money. He grew up in a very poor family and didn't learn anything about how to manage money. Things went alright for them when he worked for someone else. He'd get paid, turn the check into my mom, and she took care of the magic. It all fell apart when he went to business for himself. He worked hard enough, but it takes more than that to run a business. Let's just say that from the time I was about 16 until earlier this year, their finances were a bit of a disaster.

These days, my parents are doing something pretty neat since all of us kids are off on our own. My mom does travel nursing, and my dad (an electrician) finds work wherever they go. They take 3-6 month assignments in various cities in the US (mostly California, lately) and work. They are too young to retire, but they are able to see more of the world than they ever have before. I'm very proud that they took the initiative to do this, and they seem to really love it.

Anyway, for the first time in my life, my dad seems to be exceptionally careful with money. They have finally canceled their home phone line (they are there less than 6 months a year anyway!) and he announced to me that he was happy that that was saving him $30 a month. He also realized he was being charged a fee for his checking account, and promptly switched to a different version. Since they are traveling a lot, it doesn't make a lot of sense to buy "stuff", so they don't purchase a whole lot anymore. He also has been pestering me to get off of his car insurance plan once I get settled into Los Angeles. That'll save him several hundred dollars!

As much as I have loved having my car insurance paid, it is really a huge relief for me to hear them talking about saving money. Even if it costs me.

He's still not perfect--for Christmas he bought some overpriced remote controlled helicopters for a couple of his nephews, even though they are so obviously too young to be able to fly them. I bet they are broken by now. Still, he's made huge headway.

I've never read Dave Ramsey's "Total Money Makeover" book. I'm not the target audience for it, but my dad seems like he might be. It would be a little awkward for me to give it to him, and he is more of a magazine/newspaper guy than a book guy. Still, I'm going to keep my eyes out for a non-intrusive way to suggest it. I'm excited that they might live in the same city as me for one of their assignments. If my dad is actually receptive to this personal finance stuff, I might be able to sneak in a few other suggestions. Get a high yield savings account! Check your credit report for free! Have you considered a Roth IRA? Can I help?!?! Please!

Does anyone else find themselves more versed in personal finance than their parents? Have you ever made suggestions to them, or is it usually the other way around?

Friday, January 11, 2008

I'm not in a hurry to pay off my debt

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

Tuition Reimbursement and Rental Insurance Update

In my industry, tuition reimbursement is pretty common. My current job has it, and my new job actually pays the tuition up front for you.

The problem I've run into is that Spring semester starts next week, and I am still finalizing my start date for my new job (most likely, February 1st). There is a class I'd really like to take this semester, but I don't want to pay for it out of my own pocket. I've been trying to get an answer from my new job about whether they will pay the bill for me (even some prorated ammount), or if I have to take a semester off from my distance learning program.

The cost for one class would be rough $1600. I could take this out of savings. Why would I do this, when employers typically pay for this cost? Well, I might do it in hopes that I can work something out with my new manager and get them to reimburse it. I might do it because the class sounds interesting and isn't offered often. I might do it so it won't take me even longer to finish my degree program. Since I have been unable to get an answer from the new job, I have seriously been contemplating paying for it out of pocket.

When it comes down to it though, $1600 is just too much money for me to spend. Here's to hoping they get me an answer soon!

In other news, I purhcased my rental insurance from Geico last night, with a 5k deductable. The reason I'm getting rental insurance, despite the fact that the value of the things in my apartment is probably less than the deductable, is the liability issues. The general rule (for me at least) is to insure yourself against thigns you can't afford to have happen. If my apartment burned down, I could afford to replace my belongings. That is why I have an e-fund. The policy also has some sort of "temporary living" terms that would help me out. What I couldn't afford is if my apartment burned down and it was blamed on me and I was sued for damages. I chose a high deductable, but also high "liability" coverage. It was only $163 for the year, and it was close to $300 for a more "reasonable" deductable of $1000 or $500.

Thursday, January 10, 2008

Who's better with money?

My boyfriend compliments me sometimes, saying that I'm good with money. He says that, but once or twice, he has added "but I'm better with it!"

I respectfully disagree with that sentiment. I'm better with money, he's just more stingy. Also, his stingyness comes primarily from the fact that he is a grad student and has a very limited disposable income. In general, he is selectively stingy. Back when he was making a reasonable income, he spent in the range of $3000 for private pilot flying lessons. So he spends less by buying cheap lunch meat and kraft singles, and I buy better stuff. I don't consider that being better with money, I consider that having more money and making choices, not being "worse" with money.

I think when we are married, we'll be able to manage our finances without too much conflict. We are both generally savers, but we are both (generally) willing to spend on certian things we value: for example, travel, occasional good meals, and wine. We should make decent money, and things should be smooth. And if they are not, we both are capable of cheap living.

I hope I get to be in charge of the budgeting and bill paying. I am a control freak and like that sort of thing, but he is a control freak as well. Of course, decision making will be together (which will be an adjustment after years of independence), but there has to be one executer.

I would like us both to be involved in our investment decisions. Since I already have a full time job and he is still in school, I'm a few years ahead of him in investment knowledge. Not that I'm an expert, but I'm at relatively comfortable with the basics. He does have a Roth IRA, but he opened it with a broker. Edward Jones, maybe? I'd need to let him know the virtues of target date funds, indexing, and low fees. Right now, he only has about 2-4k in there (I don't know the details), and I don't know the fees, so it isn't an issue. (Besides the fact we aren't even engaged!)

I think, over the next couple years (or until whenever it is we get married and what is "mine" officially becomes "ours") money might be a slight issue for us due to vast income disparity. If I want us to go out for dinner, I'm going to have to pay for it more often than not. He isn't gonig to demand to be taken out, but he doesn't have the funds to treat me too often. It is sort of something that I have accepted already over the last year and a half of me working and him being a student. It can be frusterating, especially when my my two closest friends from high school (who were students at the time) received coach purses for christmas last year from their signifcant others. I got a nice necklace, which is great, but it would be nice to be spoiled every now and then. Maybe he can spoil me in ways that don't involve spending money.

Wednesday, January 9, 2008

Having less than my friends

I spent the week surrounding New Years Eve with a friend I rarely see (we met on a study abroad semester), our boyfriends, and another friend of hers. With the exception of my boyfriend (still a grad student), everyone had just recently entered the working world.

One night, they wanted to go to a "fancy" restaurant for dinner one night, and my boyfriend and I politely declined but offered them the use of the car to go. They graciously offered to treat us, so we agreed to come along. The bf and I politely ordered relatively lower priced items (still probably $40 each), and the others ordered appetizers and dessert (though they were kind enough to share). Dinner for the five of us was about $350, maybe more. The food was decent, but didn't knock my socks off. The service was good, but not worth that kind of money to me at this point in my life.

Then there was the shopping. My jaw just about fell off when one girl stated that a $1000 handbag was "within the price range" she was looking for. I have no idea her salary (though I do think she lives with her parents, meaning, no rent, which helps), but it just seemed utterly unreasonable to pay that much for a handbag. Still, people do it. All the time. Just not many people that I know.

Sometimes it strikes me unfair when I see people my age spending on expensive items. In many cases, it is flat out unfair--their parents helped them through school and maybe even still subsidize their lifestyles, while mine didn't. Very few people are wealthy by their own doing at age 24. Many people are comfortable (myself included), but having enough wealth to live the high life? Not me.

Really, it doesn't matter if it is fair or not. Not one bit. All that matters is they are good people who don't make me feel bad about being more careful with my money. I do my best not to make them feel bad that they do spend more money.

I think when I move to Los Angeles, I'm going to run into this feeling a lot more than I do here in the Midwest. I'm extremely down to earth, and the L.A. stereotype isn't. I'm sure some won't fit the stereotype, but I'll surely meet a lot more people with piles of money than I know now. I'll also working at a big name company where many people went to top schools. I went to state school. You've never heard of my school. I was smart enough for a better school, but the finances just wouldn't have worked out. In some ways, it makes me proud of myself. I got to the same place as them, on my own, without a fancy school or lots of money. Even so, I wouldn't have minded if my parents paid for a top notch education. It wouldn't make me any less of a person.

Anyway,the girl who bought a Burberry towel (a towel? Why?) and a $250 watch (spur of the moment, out of spite!) suggests getting one coke at a pizza place and sharing the free refils. Too funny.

Retirement and Savings options

I took $1000 out of my high yeild savings account and directed it into my Roth IRA for 2008. Really, for true dollar cost averaging, I only contributed $585 above what I would normally contribute for a month. My Roth is fully invested in a 2050 target date retirement fund for now.

I could have funded the whole year with savings, but I don't feel that I have the approrpriate cushion in my savings, especially with a cross country move coming up. Besides that, with markets being so shaky, I'm not sure I want to throw dollar cost averaging out the window this year. I wouldn't be surprised if the market recovers nicely, but I also wouldn't be surprised if it declines as well. I'm not an expert.

Since I'm leaving this job, I'm going to have the option of rolling my 401k (about 16k) into a regular IRA. Since my MAGI is less than $100k, I will also have the opportunity to convert it to a Roth IRA. I'll have to look at whether or not I can take the tax hit in 2008, and the pro's and cons of doing this.

Another thing I want to look at once I'm settled in Cali is moving a large chunk of my HYSA to a money market fund, specifically the tax exempt California one offered by Vanguard. My after tax return might be able to beat out my current high yeild savings accounts, especially since I'm not rate chasing. This article by The Finance Buff which suggests it may be so. It'll make more of a difference if I itemize deductions (I usually take the standard), so I'll have to do a little research on this. Or another option: TIPs? I have heard a lot about them, but my knowledge is limited. A high yield savings account is a great start, but I think I'm ready to see what else is out there and make sure I'm getting the best deal.

Tuesday, January 8, 2008

Renter's Insurance

I'm a little ashamed, as a personal finance blogger, to admit that I have been living in my apartment for 1.5 years without renters insurance. It is so cheap, but I just never got around to buying it.

My new apartment manager has said "you need to have renters insurance", which I'm not sure if she means it is a requirement or just strongly suggested. I'm going to take it as being required. Geico has given me the lowest quote so far, $163.00/year, primarily because I was able to adjust the deductable to $5000. Yes, this is a lot, but that is what an efund is for. I have to call the manager and find out the answer to a bunch of questions (construction type, distance to fire hydrant...) to get the most accurate quote, but I think I'll go with it. Other Cali readers, what do you know about earthquake coverage? Do I really need it?

The next step is getting off my dad's car insurance (yeah, I know...)

Along with a milllion other things I have to do in order to pull off this move! My last day at my current job is next Tuesday!

Sunday, January 6, 2008

Family Ties

I do not come from a wealthy family. My parents do alright--a nurse and an electrician--but probably lean more towards working class than middle class. I'm from the Midwest, and a chunk of my relatives are from a small town (about 20,000 people) in a relatively unpopulated typical Midwestern state. We went back to visit for the hoidays this year, and apparently my dad had been talking about my new job with his relatives.

Aunt: So, the big move is coming up! You are going to be a California girl! Did they give you a large enough starting salary?
Me: Yeah, I think it should be enough. It is expensive there, but I'll be okay.
Aunt: Oh yeah.... Well your dad was just saying that he didn't think that they gave you enough. With the rent increase and all.
Me: :::awkward silence::: No, no... It should be enough. I mean, where I live now is really cheap, but I'll be able to afford to live there.

In this blog, I have no problems stating how much I'm making. Yet this conversation with my aunt made me extremely uncomfortable for a couple reasons. First, it is someone I know in real life, and I'm not anonymous. I don't particularly like sharing salary information with friends and family. However the biggest reason was the particular audience. My aunt is in her late thirties and is a substitute teacher. She has a 5 year old son which she raises, though the father is still somewhere in the picture. I don't know how much money she might make in a given year, but I would venture it's roughly 1/3 of my new salary. Maybe less.

When I got my first job, my dad shared the exact numbers with his family, probably only because he was so proud. After that, I asked him not to discuss my salary with his relatives, and I don't think he gave exact numbers this time. He's just a talker, and he's proud of me. Besides, what she was saying is partially true. The salary increase just barely offsets the rent increase, and with taxes and other expenses, I'm probably coming out slightly behind. I don't resent that. There is some price to pay for perfect weather and the great nature, being blocks from the ocean. There is a price to pay for not having to scrape ice off my windows and wear three layers of pants. But it isn't as though I'll be struggling.

I think each generation hopes that the next will be better off than them. At the same time, it might be difficult for them to see without some twinge of envy, even if they truly are proud.

Friday, January 4, 2008

Rent in an expensive city

I'm feeling a little resentful of the rent check I'll be writing for the next year. I'm worried it was a mistake. It was completely my choice: $1425/month for a small place in a good neighborhood close to work. For just me. No roommates. EXPENSIVE city. So far, I have not heard of anyone who has rent this high....

I wanted to spend about $1000, but I couldn't figure out how to do it. The only person i know in the city is my boyfriend, and while we do plan to ultimately live together, it isn't going to be right away. At least a year away. I didn't want to find a roommate off the internet. All the cheaper apartments were in scary areas with a lot of crime, rape 600% higher than the rest of the city. It came down to paying $1200 for a dumpier place further from work, or paying the extra money for the convenience of being close to work. So i chose it. I signed up for a year.

It isn't as though I can't afford it. I can afford it, while also affording to fund a Roth, put at least 10% in a 401k, accumulate savings, and pay down student loans. I can afford it, but I just would rather not. It is so much money, as I pay less than $600 currently. Less than $600!!!! For a one bedroom place all by myself!

I'm priced out of the housing market for now, and may not be in the city five years anyway. It just stinks to pay $17000 a year and get nothing in return.

Staying the course

I have an asset allocation I'm comfortable with. I have goals I like, and prioritized appropriately. My current goals are keeping an e-fund in savings, funding retirement accounts, and general savings for a future car/home. Also, paying student loans, though this is a low priority.

Then I get an idea in my head and want to run with it. I start to wonder if I'm being too conservative. I suddenly think that I need to open up a taxable account for investments . Despite the fact that none of my goals are long enough away (besides retirement) that a taxable account really makes more sense than a simple high yield savings account. I start to think 4-5% isn't enough, and that I need to grow my wealth faster.

Logically, I don't really believe I'm ready for a taxable account. I have too many other goals to randomly throw another one in the mix for no good reason. What is the money for? Why not put it in retirement? Or savings? Besides the fact that before I open a taxable investment account, I have some research to do on how to be tax efficient.

I think it is the comments of my friend ringing in my ears, even if these comments aren't necessarily qualified. We just have different philosophies.
"He'd probably do something stupid with the money, like leave it in savings instead of investing it."
"I am young. I want to invest as much as I can now."

I have a good plan and good goals. I just have to stay the course

Thursday, January 3, 2008

Christmas and New Years Round-up

It has been a hectic few weeks, and I hope to have some serious posts as life returns to normal. However, normalcy probably won't truly settle in for awhile--I'm moving over 2000 miles to a new home this month! Still, vacation mode is over and things should be more normal around here. Here is a round up of my financial status for the past couple weeks.

I spent roughly $410 on Christmas presents

  • $60 for my mom: Contributed to a GPS with my sistesr
  • $55 for my dad: XM radio subscription
  • $25 for my grandparents: Applebees giftcard
  • $20 for a drinks for my friends
  • $60 each for two of my sisters: Mostly clothes and make-up
  • $40 for my boyfriends family (including shipping): A nice blanket and random treats
  • $70 for the boyfriend: A nice zip up university sweatshirt he had coveted
  • $30 for my sisters boyfriend: Sweatshirt
  • $30 for my brother in law: Gift card to best buy
  • $20 for my nephew: A baby bible and color book
There was an additional $100 in other random Christmas expenses: Gas to get to my sister's and back, a cheap Christmas day train ticket, and a few meals for me and my sister.

I spent $555 (not including previously purchased $400 plane ticket) on new years eve vacation which lasted about five days. About $100 of it was due to me paying for my boyfriends share of things, since he is a poor grad student and I have a real job, and I wanted him to join us on all activities. Luckily, there was no hotel costs since we stayed in his apartment. (I do not currently live in the same city as him, hence the move.)
  • $170 on food
  • $125 on car rental and gas
  • $200 on alochol and going out (yikes!), including a somewhat pricey New Years Eve
  • $60 on general entertainment
My net worth increased by about $3000 in December despite all that spending and despite my $500 security deposit for my new place being taken out. Not only did I have my regular paychecks, I had about $5000 in a year end incentive bonus as income. That definitely helped things along. Anyway, I did update my NetworthIQ page, so feel free to click on over for details.

Did I meet my year end goals? What are my new goals? I have to review whether or not I met my 2007 goals. I think I met some of them, but not all. I need to rework my 2008 goals and decide what I want to do financially this year.

The last thing to mention is today's small impulse buy. In a spur of the moment decision, I raced to Walmart and picked up a humidifier and cold medicine at about 11:00 pm tonight. Yes, I'm a little sick. The humidifier was only about $25, but I obviously did not buy quality, nor did I research the best deals. I also sort of dislike Walmart, but nothing else was open and I felt really crappy. Now, time for bed, as it is back to work tomorrow for my last few days.