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January 08 report

Written by on January 31, 2008 · 8 Comments

I’ve been good about keeping track of my money.. so I’m feeling proud just ’cause of that.

Spendng $$$: I budgeted $1958.16 per month, but only spent $1,651.62 (fixed: $1,134.75, variable: $516.87, and irregular: $0). My unofficial goal is to keep my monthly spending lower than 1 paycheck’s net amount, which I have done this month. So I’m pretty happy about that. I can’t get careless, though, because I have alot of upcoming expenses (car, insurance, memberships, etc.). Cash flow will be lower in February.

Saving $$$: I saved*** a total of $1,000 ($500 Roth, $500 MMF). That’s only 4% of my annual goal of $26,000 in savings. Of course, I made that goal with bonuses/raises/gift money/tax refunds in mind, but it’s still a little disconcerting to find the year 1/12 OVER but I’ve only made 4/100 of my goal.

For February, I resolve to kick things up a notch! There’s the $500 Roth contribution, then $1,100 to MMF. This will bring me to $2,600, or 10% of my goal. Much better.

I’ve already made my appointment for my monthly massage.. but maybe I can postpone it to March. (It hurts to even type this). Your thoughts?

***I define “saved” as money that has been deposited into accounts OUTSIDE of my regular savings account or checking account. In this case, my saving vehicles are my retirement portfolio & money market fund. I still have money leftover from paying all the bills in the savings account, but that money is earmarked for very short-term expenses or to serve as cash cushion. So I don’t consider it saved money at all.

Categories: Budget, Goals

Thank God for small blessings

Written by on January 30, 2008 · 5 Comments

One of the best feelings in life has got to be when you’re just drifting off to sleep (or s-l-o-w-l-y awaking)… that in-between moment when you are conscious enough to enjoy the feeling of a luxurious sleep but still sleepy enough to, well, luxuriate* in your sleepiness.

Come to think of it, it’s no small thing at all.

*Is that even a word? Should I be ashamed that I’m not sure if I just made up a word after graduating from a pricey liberal arts school?

**Miss Noodle has kindly informed me that luxuriate is, indeed, a bona fide word. Oh validation, have you ever tasted so sweet.

Categories: Life

Death by cupcake

Written by on January 29, 2008 · 6 Comments

I spoke too soon…

So, it appears I would NOT be under budget for food after all.

Tonight after work I went to my local grocery store and bought vanilla, chocolate bars, cupcake liners, flour, baking soda, and confectioner’s sugar for a grand total of $16. So I went over budget by around $15.

I made cupcakes.

That’s RIGHT! Finally, I’m ready to graduate from Betty Crocker cake mix and see what a cupcake from scratch taste like. I’ve had a fascination with cupcakes for a long time.. they are so delicious, with generous frosting-to-cake ratio, small enough that I never feel bad about eating 2 (or 3.. or 4), and just so darn cute.

Then I found this website: cupcakeblog.com. I decided to try my hand at the Devil’s Food Cupcake with Chocolate Buttercream. Unfortunately, I couldn’t find unsweetened cocoa powder at the store, and I was too lazy to drive in search of that ingredient, so I just bought some bars of bittersweet chocolate, melted it in a water bath, mixed it to the best of my ability (I don’t have an electric mixer either), and convinced myself that some chocolate chunks in the batter will only add to the chocolate-y goodness.

It came out okay… a little too crispy around the edges and not quite fluffy enough (hand-beating couldn’t get up the speed to get enough air in the batter.. but I tried!). But the frosting was AMAZING. A little too runny, but I chilled it in the fridge for a bit to thicken it up. I could not stop licking the frosting off my fingers.

For my first cupcake-baking attempt, I give myself an A for effort. Probably a B(+?) for execution.

Categories: Food

What's Your Food Budget?

Written by on January 28, 2008 · 67 Comments

Wow. Thanks to everyone for the TJ’s suggestions.. more stuff to check out on the next grocery run! icon smile What's Your Food Budget?

January isn’t over yet, but I’ve bought all the groceries I’ll buy for this month – not to mention that next weekend will be February, so I don’t expect to buy any more food until Saturday or Sunday.

With a revised food budget of $220 ($110 each for Dining Out & Groceries), I spent $218.55 ($124.17 groceries, 94.38 dining out)… barely squeaking by. I’ve increased my budget $20… my original budget of $200 felt a little tight for me.

I’m curious – so I’m posing a question to all the 20-something female bloggers (my demographic!) out there: what’s your overall food budget (groceries + dining out)? It’d be helpful if you can also list your area of residence to provide context – food would be much more expensive in NYC than in the Mid-West.

Update: I’m still on the Clothing Hiatus… even though I saw some really cute things on sale at J. Crew. One month (almost) done… 5 more to go.

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Categories: Budget, Food

How I manage to cut back on dining out costs

Written by on January 27, 2008 · 19 Comments

One word (or two): Trader Joe’s.

Seriously. That store’s frozen foods section is a God-send for me. The products are so tasty and easy to make (and dare I say, as healthy as frozen foods can get) that it’s not worth for me to go out to restaurants unless I’m looking for ambiance or really really amazing food.

In short, Trader Joe’s has made it possible for me to have quick, delicious meals. Let me introduce you to two products that totally make my day (or dinner):

Vegetable Melange with Seasoned Butter Sauce: It is amazing. Just add a couple tablespoons of water in a pan and heat up the veggies. The carrots, peas, cauliflowers and corn all heat up to perfection – the buttered sauce coating every tiny piece of veggie. I get it for $2.29/bag at my local TJ’s.

Teriyaki Chicken: Already cooked. All you have to do is to throw the chicken pieces in the microwave, warm up the sauce, then drizzle it on. I go the extra (but totally worthwhile) step of saute-ing the chicken in a pan and then put the sauce in so that the chicken is nicely browned and the sauce thickens and really coats the meat. $5 for a bag, and very bit as good as your local take-out.

Yummmmmmm.

Categories: Food

Protected: Life, I have imagined

Written by on January 26, 2008 · 4 Comments

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Categories: Goals, Life

$150 in my pocket!

Written by on January 24, 2008 · 10 Comments

I just called my car insurance company and got my 6-month premium lowered from almost $850 to a little over $700. My monthly payments will be almost $25 cheaper.

That $25 will probably be (more than) eaten up by rent increases when my lease is up in the summer. Oh well.

Categories: Car, Saving

Something amazing happened

Written by on January 23, 2008 · 9 Comments

I went through the ENTIRE WEEK of January 14th to January 20th without spending ONE penny on dining out.

What’s more, I’m actually pretty happy with the lack of restaurant-fare.

For some, it might not sound much of an accomplishment, but then there’s me.

In the past, it would’ve been so easy to just get Chinese takeout on a Friday night and head to Chili’s for a Saturday meal. Sunday lunches might be spent at Chipotle or In-n-Out. It’s not as if I deprived myself much this week – my grocery bags were full of Haagen Dazs ice cream (3 tubs) and yummy frozen foods from Trader Joe’s.

But still. I made it one week without eating out. I’m going to try to go another week without eating out… we’ll see how that goes.

Update: It is now Thursday, Jan 24, and I still have yet to spend one penny on outside food. But enough is enough! I’m getting some juicy In-N-Out burgers and delicious milkshake this weekend.

Categories: Food

Buying, eventually

Written by on January 22, 2008 · 7 Comments

Even though I fully intend on owning a home -free & clear- by the time I retire, it’s becoming increasingly clear that home ownership in the next 3-5 years isn’t necessarily compatible with my future goals/plans. Unless the housing market drops 20% and I can suddenly buy condos for under $250,000, that is.

I ran an analysis on New York Time’s Rent or Buy calculator:

Assumptions:

–> Monthly Rent: $1,100 (that’s actually almost $350+ more than what I’m paying now. But I can get a one bedroom apartment for $1,100 in the area where I want to buy, whereas right now I have a roommate).
–> Home Price: $300,000 (If I buy, I’ll probably buy a one-bedroom apartment. If I buy a 2-bed/2-bath, the price will probably be around $450,000+ in a good area).
–> Down Payment: 15%, or $45,000
–> Mortgage Rate: 6.25%
–> Annual Property Tax: 2.25% to account for HOA fees.
–> Annual home appreciation: 5%. That seems like a reasonable assumption.. no?
–> Annual rent increase: 7% (a little on the high side).

Under these assumptions, buying is better than rent after 10 years. Is that.. good? I was looking for more of the 7-8 year range. If I buy a 2 bedroom ($450,000) and still put down 15%, buying will be better than renting after 20 years. That’s practically a kid.

The reasons why it wouldn’t make sense for me to buy would be: I want to travel. I might go back to graduate school. I want to preserve liquidity at this point in my life. Even though I love my area and it’s close to my parents, I don’t know if I want the commitment of home ownership right now. I don’t want to become house poor.

From an opportunity cost perspective, home ownership probably would not be the right move for me, given the assumptions listed above. There’s really no rush, right? I’m only 23. Even if I wait 10 years to buy, I’ll still ONLY be 33… which, at that point, 30s will be the new 20s.

I am still concentrating on building a cash (is king) reserve for short-to-medium term goals in my money market fund. Buying in 2 years (when the real estate market is supposed to “bottom out”) may be a good investment if prices heat up again, but I’m of the view that a primary home is not an “investment” – certainly not in the way that a well-diversified portfolio or rental property is.

Categories: Real estate

History in the making

Written by on January 20, 2008 · 6 Comments

So this is a very volatile time in the markets right now – my investment portfolio tells me that. In just a short several years, I’ve seen the tech boom (and bust), the run-up of hedge funds then private equity, the age of mega leveraged buyouts, the real estate explosion, and now… the fallout.

At first I was under the impression that these cycles of boom-then-bust are something confined to the 1990s… yeah, how generation-centric of me, right? icon wink History in the making Then I read A Random Walk Down Wall Street. There it is: booms & busts are NOTHING new. Sure, the vehicles may change, but the fundamentals don’t.

Hegel said: “We learn from history that men learn nothing from history.”

Buffett said: ““Be fearful when others are greedy and greedy when others are fearful.”

If you are (a) supremely confident of your ability to pick the next Google or that you have a broker who does OR (b) if you are taking all your money out because you’re certain that the market will crash & burn – just think about those two sayings.

As for me? I have some bonds and a whole lot of stocks, and I’m sitting pretty on my (small but growing) pile. I’m in it for the long haul, baby.

Categories: Retirement, Saving

I don't automate savings

Written by on January 17, 2008 · 9 Comments

Honestly, I’m doing just fine.

This is more of a way to manage my cash flow than anything else. I have my entire paycheck deposited into my savings account, then withdraw to my checking as need be for rent, credit card bill payment, car insurance, student loan, etc.

Instead of automatically directing a certain amount or percentage of pay to my retirement accounts, I take the, er, more scenic route. Basically, I look at my savings & checking accounts, I mentally review my upcoming expenses, then I transfer the money. I’m not sure if it’s the most efficient way of doing things, but it works for me. There’s the tiny thrill of satisfication I feel when putting money in, for the lack of a better word – manually – that doesn’t come with automatically scheduled transfers.

I don’t think that my savings rate is negatively impacted by not automating. For January, I made payments to my retirement portfolio ($500 in 2008 Roth IRA) & money market fund ($200). I am looking to make another $600 to the MMF before the month is over. So if all goes well, the total savings for January will be $1,300.

Perhaps in a couple of months, when I have more of a handle on my monthly expenses, I’ll set up automatic transfers.

Clothing Hiatus Update: Still on it! By the way, I haven’t eaten out at all so far this week. So what if my meals consist of a couple of breakfast bars and instant mashed potatoes?

Categories: Saving

Day by day

Written by on January 14, 2008 · 10 Comments

I laid out all my outfits for the upcoming week and labeled each pile with a post-it note indicating the day of the week the clothes are intended for. I’m not OCD, I swear. I only did this because I thought it’d help me get dressed more quickly in the mornings.

This exercise has also helped me see that I really don’t need any more clothes. Sure, there are additions that I’d like to have, but on the whole I have enough tops & bottoms to put together 2 weeks worth of business casual outfits with basically no repeats.

So – six months without shopping for clothes? I think I’m really going to try and do it. Not even for the save-money aspect, but because I’d really like to learn to be content with less stuff, declutter & simplify, and appreciate what I have instead of aimless wishing for something else. After the six months is up, I hope to have a nice little cash cushion and a more thoughtful approach to my purchases.

Categories: Shopping

How I deal with financial mishaps

Written by on January 13, 2008 · 8 Comments

I got a $75 parking ticket. I had to get catastropic insurance for the period between when I left my former job and when my new health insurance would kick in ($200+). My prescription will be $60 instead of $25 this month because the catastropic insurance doesn’t cover prescriptions.

These were expenses that were unforseen (the ticket!) and not a part of my regular budget (insurance & prescription).

It’s easy to feel frustrated at these anomalies that will crimp my spending plan – and the problem is that when I feel since the budget’s already been broken, it doesn’t really matter if I’m over by $50 or by $100 this month. I’ll wait until next month to get back on the wagon.

Knowing that about myself, though, helps me to take a breath and let go & let live – some (or not so small) things will always pop up – that’s called life happens. I don’t have to deprive myself of artisanal pizzas from Trader Joe’s or forgo my massage to “make back” that $75. On the flip side, I don’t have to let my frustrations get the best of me and throw the rest of my budget off track.

It’s a bump in the road. It’s not the first and it won’t be the last. The only thing to do is to keep going… and remember to park on the correct side of the street.

Categories: Budget, Spending

$75 parking ticket = bad day

Written by on January 12, 2008 · 6 Comments

Yeah. It sucks.

Categories: Spending

Hanging out on restaurant row

Written by on January 9, 2008 · 10 Comments

Food is definitely a challenge for me in terms of spending in that I love to eat. And eat well. Eating out for dinner will cost at least $15 for meal/tax/tip. That’s if I don’t order dessert, drinks, or anything other than the second-most-inexpensive thing on the menu (which, depending on where I go, could very well be 3 pieces of scallops on a leaf of baby bok choy. Artfully presented? Yes. Enough food for anyone older than 4-years-old? No.)

I’ve set a budget of $200 for food-related expenses every month, $125 for dining out and $75 for groceries. $125 is 20 cheap lunches, 10 cheap dinners, or 4 nicer dinners. A MONTH. I am not an ungrateful twentysomething, I assure you, I do understand that dining out is not a right but a privilege (like driving!). I AM, however, utterly and absolutely devoted to a good gastronomic experience.

I only have $131 left for food for January. I have THREE more weeks to get through.. that’s about $43 a week. I can definitely do it if I don’t eat out more than once a week… which I should be able to do.

Right?

Categories: Food

Off to the museum!

Written by on January 8, 2008 · 4 Comments

So, I am now going to be a volunteer!

Somehow I managed to get through four years of public high school and four years of private liberal arts education without taking even ONE survey course in art history. With this new opportunity, I hope to remedy that oversight, make new friends, and become a little more involved in my community.

I thought a black suit would be too severe for the interview, so I chose a tweed jumper instead. And the dress is Ann Taylor… which means… I wore an Ann Taylor dress to an art museum interview. Who’d thought? I don’t know why, but for some reason that’s really funny to me. I guess because it’s so appropriate that it’s a little cliche? At least I didn’t wear pearls.

Categories: Life, Volunteer

Don't do it!

Written by on January 6, 2008 · 4 Comments

Why didn’t I cash out my 401(k) – which at $10,000 is a fairly substantial sum for me – when I changed jobs? Because I would be flamed out of the pf blogosphere, that’s why. icon wink Don't do it!

Okay, the real reason is that cashing out my 401(k) is one of the worst moves I can make for my long-term financial health. Obviously each person’s circumstances are different, but most personal finance experts agree that things should be pretty dire for someone to consider cashing out.

Looking at the 2 scenarios below, I’m really fortunate to not be in a dire situation where I have to cash out my 401(k)…

Scenario 1: $$$ cashed out
Marginal tax rate after making the withdrawal: 25%
The amount withdrawn from tax-deferred account: $ 10,000
The estimated taxes due on the amount withdrawn are: $ 2,500
The 10% penalty on the amount withdrawn will be: $ 1,000
Total taxes and penalties are estimated to be: $ 3,500
After taxes and penalties the amount remaining will be: $ 6,500
Scenario 2: $$$ stayed put
Current tax-advantaged savings: $10,000
Years of growth: 35
Average annual gain: 8.0%
Average annual inflation rate: 3.0%
Current savings will grow to: $147,853
Inflation-adjusted: $ 50,914

***By cashing out my 401(k), I would get back LESS THAN 65% (don’t forget state taxes) of what I originally had in the account. In addition, I would’ve missed out on compounding interest, by which my $10,000 could grow into $50,000, in today’s dollars, at retirement.

Cashing out sounds like what it is: a lousy deal.


____________________

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Categories: Retirement, Saving

Oops.. I almost forgot

Written by on January 6, 2008 · 3 Comments

I said a couple months earlier that I’d like to end 2007 with a $10,000 net worth.

A quick calculation shows that although I’m close at $9,459, I didn’t quite get there. Also, my net worth will decline quite signficantly in the next couple weeks because I have to repay part of the signing bonus from my former job – I’m not super stressed because I have enough money for the repayment, but it’s a blow to the financials nonetheless.

As long as we’re on the topic of net worth, I’m putting this out there: at the end of 2008, I will have a $35,000 net worth. The goal is utterly achievable if I stick to the savings & investing goals that I outlined earlier.

Categories: Goals

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