2012 February | Well Heeled Blog

Looking Ahead… At Student Loans

Written by WellHeeled on February 29, 2012 · 35 Comments

Congratulations! Now please hand over $100,000 and your first-born.

I have heard from my second and third business school. I got in! Now that business school is really going to happen, I am also figuring out what it means to be a full-time student again. The MBA programs I applied to cost around $150,000-$160,000 for two years: ~$50,000/year for tuition, books, and supplies, and an allowance of ~$25,000-$30,000/year for living expenses. No one ever said graduate school was cheap.

How do I plan to pay for this educational elephant? Fortunately, I’ve been able to save up and I am able to count on some family help. $50,000 comes from my personal savings from post-college work, $40,000 comes from inheritance from my grandmother, and my parents will probably help me out with another $10,000. So that’s $100,000 of tuition. The other $50,000 in living expenses will likely come from a combination of loans and freelance earnings during business school.

School #1 did not offer me any scholarship, so if I go there it will be for the full sticker price. In that case, I will probably have to take out $40,000-$50,000 in loans. They might be loans from the Bank of Mom & Dad with a Dear Daughter Discount, but it’s debt nonetheless. $40,000-$50,000 of repayment will require pre-tax earnings of $60,000-$70,000 to service, which is no small sum. This is a great institution and I feel very lucky to be accepted, but it will be a struggle to pass up the money offered by.. School #2.

School #2 is offering me a not-insignificant-amount of aid. Thanks to a scholarship, the tuition drops down to $27,000/year, and the total cost of attending business school falls to $105,000. If I choose this school, I have a very good chance of graduating debt free if I live frugally and make some side income during school. I don’t even have to fill out a FAFSA! What a coup that would be… if I can graduate from a great MBA program and still have ALL of my income be mine afterwards. Well, mine and Uncle Sam’s. This school’s reputation may be a little bit more regional than the other schools I have applied to, but I believe that all busines schools, with the exception of Harvard and Stanford, are regional in some ways. Bottom line, this school is a solid choice, with a strong alumni network, very down-to-earth people, and a robust recruiting pipeline for the industries I am considering.

School #3 is an Ivy (though the mere fact that it is an Ivy shouldn’t make my parents any more glad about the acceptance, it will. And I am happy because they are happy), and will tell me whether I get any scholarships in a week or two. School #4 will inform me of their acceptance decision in about a month.

CB has also applied to graduate school. He will hear back within the next month. If he gets in, he will have to take out some loans (which will then turn into our loans. Ah the joys of marriage). If he doesn’t get in, he will keep working and support me financially for a year so I can take out fewer loans (ah the joys of marriage) and reapply next year. I think he has a pretty good shot at acceptance, so I am planning as if we will BOTH be in graduate school, BOTH not making much money, BOTH taking out student loans. In that context, I am forced to think about my student loan situation much more carefully than I might otherwise.

How my attitude toward student debt evolved

Even a few years ago, I had resigned myself to taking on $80,000+ in student loans. It’s what almost everyone does and most graduates of top schools can find a job that will service that debt. According to the MBA website Poets & Quants, the average MBA debt load is north of well north of $70,000 (incidentally, all of my schools are on that list… not sure if that’s a good or bad thing).

But the more I thought about it and the more I calculated, the more I realized that I don’t want to graduate with a mountain of debt. Student loan debt doesn’t have to be a fact of life for me. Even if I do take on loans, I want to err on the side of conservatism. I’d like to be able to pay off my graduate loans in 3 years after school. My limit is $50,000 in loans for an MBA. Assuming a family loan interest of 5%, it’d take me $1,500 a month to be able to pay off the loan in 3 years. A big chunk of money, to be sure, but not impossible. If I can keep the loans down to, say, $25,000, I’d be able to pay it off in a little more than a year.

I truly love all of the schools I applied to, having made a decision very early on that I would not submit my application to a school unless I know I will be happy and excited to attend. So I have three great choices right now (hopefully, I will have four great choices once I hear back from School #4). Money is definitely a factor, but how big of a factor? I don’t know.

Bathroom Attendants!? Don’t Go to the Bathroom Without A Few Dollars in Your Pocket

Written by WellHeeled on February 28, 2012 · 27 Comments

I know I have to tip when I ride in a taxi, when I eat in a restaurant, and when I leave a hotel room. But… in the restroom? Apparently, tips and bathrooms are not mutually exclusive.

During one of our nights in Las Vegas, we had dinner at Tao, the trendy Asian-fusion restaurant where no matter how hip you are, you are never hip enough. When I snuck to the restroom to wash my hands, I was faced with a sink lined with perfume, breath mints, lotions, hairspray, etc. And off to the side stood the bathroom attendant, a lady pumping handwash onto your palms and offering up paper towels the moment you turn off the faucet.

In the middle of the counter, there are two glass jars with dollar bills. So imagine my discomfort when I realized that I have NO cash on me, anywhere. I was so embarassed that the second time I went to the restroom I just washed my hands and wiped them on my jeans instead of taking a paper towel. This is the first time I have seen a bathroom attendant (I had thought that they were the stuff of urban legends, conjured up to frighten cashless restaurant patrons), and I have no idea what the correct etiquette would be.

On the one hand, I don’t think I should have to fork over money just because I go to the restroom. On the other hand, it is pretty awkward when there is a human being handing you towels and a tip jar standing RIGHT there. I wish bathroom attendants weren’t necessary - actually, I wish that restaurants would pay them a minimum wage so that I don’t have to feel bad about not having a dollar to tip. The restaurant can roll up the higher cost into the price of the meal – I would be much more comfortable with that arrangement.

Have you frequented places with bathroom attendants? When & how much do you tip?

Carnival of Personal Finance #350: The Little Prince’s Journey to Financial Enlightenment

Written by WellHeeled on February 27, 2012 · 36 Comments

Once upon a time, in a far away kingdom, lived a Little Prince and his Wise Wizard. The King, who is very old, wanted to make sure his Little Prince is ready to take over the mantle of ruling the kingdom before he puts the Little Prince into the will [Sustainable Personal Finance] He is rightfully concerned about the generational differences when it comes to debt [Yes I Am Cheap], and so he asked the Wise Wizard to help the Little Prince get to the Land of Financial Enlightenment. “I don’t want him to grow up all silly nilly about money! What if he marries a princess who buys purses all the time [Diva in Debt] and go broke?! I need him to be a good leader and understand investments [Grow Money]“ said the King. ”HMPH. That’s playing into gender stereotypes [My Broken Coin],” the Wise Wizard said, “but I will help the Little Prince reach his destination and understand financial matters in relationships [Busy Executive Money Blog].”

And so the Wise Wizard and the Little Prince set out on their journey. Along the way, the Wise Wizard tried to impart words of, well, wisdom to the Little Prince.

“To reach your Findependence Day [Boomer & Echo], you must overcome obstacles and learn to figure out for yourself what truly matters in life,” the Wise Wizard said. ”But I already know the 10 Commandments to Growing Wealth [Wealth and Wise],” said the Little Prince, “This will be an easy journey.”

“It is not enough to simply know, you must also act,” The Wise Wizard explained, “let me tell you about all the obstacles you will encounter.”

“Having pride in yourself and work is a good thing, but never be too proud to shop at discount stores [See Debt Run]. Along the way to Land of Financial Enlightenment, you might see alluring images of fast cars and pretty women [Saving Advice], but driving an uncool car is actually awesome [Graduating with Surplus]. If you stick to the 20% rule [Your Life, Their Life], you can help you achieve your goals more quickly.”

“But I KNOW all these obstacles already,” the Little Prince said, for he was a very smart Little Prince. “I’ve read about them in books and on blogs. I’m a great student [Humble Savers].” The Wise Wizard shook his head. You can’t just understand the numbers (although that is very important) – you have to modify your behavior [Consumerism Commentary] to make lasting change. Sometimes, you have to experience things – losing money in the stock market [Million Ways to Save], fall victim to price anchoring? [Smart on Money], co-signing a loan [Christian Debt Coach], and marrying for money [Nicole & Maggie] before you learn what works and what doesn’t.”

“Getting to Financial Enlightenment doesn’t sound much fun,” said the Little Prince, “I like to look good and enjoy my life.” ”You can!,” insists the Wise Wizard, “you can make fashion affordable [Everything Finance], you will live longer! [Squirrelers], and if you make good choices, you will be able to become a stay at home dad [Tie the Money Knot] if you wish.” The Little Prince wrinkled his nose. “But I killed my last three goldfishes,” he said. “Er, well, don’t quit your day job yet [My Money Design]!” sighed the Wise Wizard.

As the two walked and walked and walked along the road to Financial Enlightenment, they talked and talked and talked.

The Little Prince asked, “the Land of Financial Enlightenment is when I finally get RICH, right?” The Wise Wizard chuckled. “Money isn’t the only measure of success [Barbara Friedberg Personal Finance], in fact, money is just a tool. Once you build your foundations [Free Money Finance], you will be able to use money to do what you really want to do in life – whether that’s to spend more time with your future Princess, create more buildings for the royal grounds, or contribute to charity [Mrs. Nespy's World]. There are tools to help you do this: automating bill payments [Budgeting in the Fun Stuff], taking advantage of payroll tax cuts [Novel Investor], selecting a good IRA company [Qwoter], and taking advantage of no balance transfer fee credit cards [Wallet Blog].”

Finally, after many days of study, the Little Prince was ready for his important interview [Adjunctorium] with the King. The King quizzed him on all he has learned, from tax reporting forms[Nerd's Eye View], to renters and laundry fees [Start Talking Cents], to tips for easier budgeting[Money Talks Coaching], to using Google Docs spreadsheet for investing [My Journey to Millions], to making extra money [Bible Money Matters], to chargeback policy report [CardHub]. The King asked about the general economy [Narrow Bridge Finance], the local economy[Debt Black Hole], evaluating intangibles [Pinch That Penny], and when DIY works and when DIY doesn’t [DollarVersity].

The Little Prince was able to answer the King’s questions flawlessly. He gave the King the low down on RESP plans [Young & Thrifty], discussed the rules of career reinvention [Afford Anything], explained the virtues of saving paper [Funny About Money], talked about the benefits of getting a 60 month auto loan [Familyancial Wealth, listed ways to save at the gas pump[Personal Finance Success], ran over reasons why a home inspector [Happy Homeowner] is necessary, and even explained how to find jobs using social media [One Cent At A Time]. The King knew nothing about social media or SEO keywords [Mike & Molly's House], so he was very impressed indeed!

“You seemed to have learned a lot,” said the King, “I want to reward your efforts [Money Cactus].” Then the King, confident that the Little Prince can handle his finances, gifted him real estate [Investor Junkie], bonds [Dividend Growth Stocks], bond funds [Control Your Cash], and even shares of Ford stock [Dividend Monk]!

“But wait!” The Little Prince interrupted, “I haven’t told you what I REALLY learned yet.” “You haven’t?” The King was confused. “But you talked to me about knowing when to adjust your budget [Evolving Personal Finance], learning a foreign language [Darwin's Money], evaluating Betterment [Dough Roller]. You showed me how you improve your credit score [Financial Highway], save [PT Money], buy travel insurance [One Frugal Girl], and use a rewards credit card [Rewards Cards USA]. You even have the discipline to hide money — from yourself [Frugal Cool]. It sounds to me that you have achieved Financial Enlightenment.”

“All that is important,” the Little Prince admitted, “I did learn about tax forms [Free From Broke], Social Security [My Dollar Plan], Bank of America Add It Up Rewards [Financial Product Reviews], and dividend investing [Dividend Growth Investor], I learned about what happens in Chapter 11 [Prairie Eco Thrifter], when to cancel my credit card [Help Me Travel Cheap], and how to save for the holidays [Net Worth Journey]. I even learned about unconventional investment moves [Invest It Wisely]. But I don’t want to get tunnel vision when it comes to my finances [Money Beagle]. Because what the Wise Wizard taught me was that financial enlightenment is about making decisions so you can live the best life you can, and have your spending and finances reflect your priorities.”

The King smiled! The Little Prince has passed his test. He knows that the Little Prince has a bright financial future [Watson Inc], and for that he is happy. The Wise Wizard is also happy. In fact, he thought, ”Maybe I should start my own financial firm [Good Financial Cents]!”

Financially Ready To Have Kids?

Written by WellHeeled on February 23, 2012 · 38 Comments

CNN Money asked its readers to give their answers to a question one reader submitted:

When is a person financially ready to have kids?

My husband and I make decent money, but it all seems to go to student loans and the mortgage. How does anyone decide the time is “right” to have children? What steps should we take before starting our family to make sure we are financially secure enough to provide a safe and happy home for our children?

This is one of those questions that have no right answer, because it’s so different for everyone. But I believe it’s a useful question to ask, even if you don’t know the right answer. I know that a baby is a great deal of responsibility and costs a great deal of money. According to a USDA report, it now costs an average middle-income American family $222,360 to raise a child from birth to 18. That’s almost a quarter of million dollars! Furthermore, that number DOESN’T include college costs, which could range from a few thousand dollars a year at community colleges to $50,000 a year for a private university education.

I’ve read a lot of personal finance posts that say something along these lines: kids don’t have to cost all that much money! All they need is love and attention! They just want time with you! I don’t disagree with that, because it’s true, kids don’t really care if they wear Target or Tommy Hilfinger (just wait until they become teenagers!). But having kids also impose some very real costs - impact on your career (and thus income) trajectory, impact on your personal freedom, impact on your relationships. Achieving a certain level of financial security can mitigate some of these impacts – having enough money to pay for a night nurse so that the new mom can get enough sleep after the delivery, having enough money to hire babysitters so the mom & dad can go on a romantic date, having enough money so you don’t worry (too) much about health insurance or paying for school supplies.

So money isn’t everything when it comes to children, but not having money also causes a lot of problems for new parents and puts further strain on a marriage. CB is probably a little less enthusiastic about kids than I am… and I am about a 5 on a scale of 1 – 10, 1 being Childfree Forever! and 10 being Must Have Baby NOW! One of his reasons for CB’s reluctance that he is very worried about the impact a baby would have on our finances and our freedom. Which are legitimate concerns that I share. I take this to mean.. we are definitely not ready now.

We might be ready one day, however. I am finding babies cuter and cuter, much more so than I have in my early 20s. I see a pretty biracial toddler with straight black bangs and a bowl haircut, and I start wondering… well, maybe it wouldn’t be so bad to have one of those. Perhaps the biological imperative cannot be denied. If so, here is what I’d like to have accomplished financially before CB and I bring a baby into this world.

Save up an adequate retirement fund. I am not sure what “adequate” means just yet… but $250,000 sounds like a good number.
Achieve an income and a level in our careers that would allow us to continue to save for retirement, give the kid a leg-up, provide childcare, and buy a modicum of balance.
Live in the same city. This may seem like a no-brainer, but given that we will likely move to different states a month after the wedding, I’d like to ensure that we will not be in a long-distance relationship WITH a kid.
Pay off our student loans because baring a mortgage, I really would like to be debt-free by the time we have a kid.

On the one hand, I can chalk these goals up to my Type A personality and my desire to really, truly, prepare financially before we are responsible for another human being. On the other hand, setting these very high financial goals may just be a way for us to delay becoming parents without shutting the door on parenthood. I don’t know what is the “right” level of financial security before you have a child. Obviously, people have become parents under less-than-ideal circumstances and still have raised great children. And obviously there are very wealthy parents who are horrible parents. But most of the time, parents are just trying to do the best they can with the resources they’ve got. The truth is, I am not confident in my ability to be a good mother, but I’d like to have as many ducks in a row as I can to mitigate that uncertainty. Having more resources have to be better than having fewer, right?

When do you think you would be financially ready to have kids?

Dave Ramsey & His Style of Motivation

Written by WellHeeled on February 21, 2012 · 22 Comments

Dave Ramsey is one of those guys that inspires lots of love or lots of criticism in the personal finance world. Some people swear by his methods in the Total Money Makeover, some disagree with his step-by-step plan, and some are turned off by the religious overtones in his writing or the draconian line he draws on credit card use.

I don’t know much about Dave Ramsey and I never felt compelled to do so. But lately, looking at our situation – and our increasing spending, I wondered if the motivation to really accelerate our savings is all that different from the motivation to pay off debt. If Dave Ramsey can inspire people to pay off $40,000 of debt in a year on a $60,000 salary (HOW is that possible?), might we not be inspired to do the same in terms of our savings? And this savings will go directly into our graduate school payments, which means that we will not have to take on as much debt for school. Which sounds fabulous.

Dave Ramsey’s 7 Baby Steps are as such:

$1,000 in emergency fund – Check!
pay off all debt with debt snowball – Nope, we both have low-interest and no-interest debt, but I’ve decided that those are not high priority enough for us to defer our other goals.
3-6 months of expenses in savings – Check!
invest 15% of income for retirement – Check!
college funding – This is the one that we REALLY want to work on. But instead of college for our kids, it will be graduate school for ourselves. Looking at the steps it’s clear that that’s where we need to be.
pay off home early
build wealth and give

How do you feel about Dave Ramsey? Any debt-free folks continue to follow his 7 step plan?

$25 Amazon Gift Card Giveaway

Written by WellHeeled on February 19, 2012 · 3 Comments

Happy Sunday! I will be in Vegas for the next few days (where the bulk of my budget shall be spent on hotels where I can get a good night’s sleep. Because I am secretly 80). I have put together a little Amazon gift card giveaway. Please click on the permalink of the post to enter. The deadline is 12:01 am EST on March 1, 2012.

Save Money or Quit Job, End Lease, and Travel to China for 3 Weeks?

Written by WellHeeled on February 17, 2012 · 47 Comments

Once I found out about business school, my plan was to work until the end of June, give myself a few weeks to relax and move, and then head back to school in July/August. Last night, however, I started thinking that maybe… for this time in my life, I can afford to be a little irresponsible.

I am considering quitting my job at the beginning of May, ending the lease on our apartment, and packing up to travel China for 3 weeks. Should I do it?

YES, because:

CB and I will not have 3 weeks to just go travel for the next few years. After graduate school we will be busy working, paying off student loans, being “adults.”
It would be nice to see and introduce CB to part of my extended family. Plus, China is part of my heritage and I’d REALLY want to go back beyond simply wanting a vacation.
We are willing to stay in hostels and take night trains to stay on budget, and for part of the trip we will be guests of my uncle and aunt, who will undoubtedly insist on paying for most of our expenses. The whole trip, including international airfare from LAX to Beijing, will probably cost $4,500 for 3 weeks. If we only go for 2 weeks, we can probably swing it for $4,000.
Ahhh! China!! THREE WEEKS! (can you sense the excitement?)

NO, because:

That $4,500 we’ll be spending could go to graduate school tuition… which will be sorely appreciated by our Future Indebted Selves.
Quitting almost two months early means that we will be cutting our 401K contributions by $3,500+. Not a small figure. We will also have to front our own insurance (COBRA or buy a temporary insurance) once we stop receiving employer-sponsored coverage.
It will be much more challenging to max out our Roth IRAs (we will still do it, just might have to take some money out of savings to do so).
We won’t be, you know, making money.

I talked to several of my friends, and they all said that I should go travel. In my heart of hearts, that’s what I want to do. From past experience, trips deferred just don’t happen. My girlfriends and I had planned on a Mexican cruise in 2009. But we kept pushing it further and further down the schedule, until no one even talk about it anymore. I do not want CB and my China trip to suffer the same fate. But the money. Ouch.

If you were in my situation, what would you do? Or would you strike for a compromise – taking a 2-week vacation in May and quitting in June as planned?

“I Deserve It”

Written by WellHeeled on February 14, 2012 · 19 Comments

How many times have you made a purchase because you thought, “I deserve it“? If you have, speak up… so I know I’m not the only one!

Lately, I have noticed that I slip into this pattern far more often that is productive. It’s good to “treat” myself if I can afford it, and it’s fine to reward myself for a job well done, but “I deserve it” shouldn’t be an excuse to spend, spend, and spend. Unfortuantely, somehow, I have gotten into the habit of using “I deserve it” as a crutch, and excuse, to spend above what is prudent. I had a hard week at work, so “I deserve it.” I worked extra hours to earn some freelance income, so “I deserve it.” I saw that great deal to the spa that I’ve been waiting for, so “I deserve it.”

All those “I deserves” are standing in the way of what we truly deserve.

Instead of a beach vacation that we’d have to finance with a credit card, we deserve to greet our monthly bills with zen, because we know that we can pay off what we have purchased.

Instead of a leather bag (or, um, shoes) whose price tag sails above our budget, we deserve to have the peace of mind that comes with a 3-month, 6-month, or even 12-month emergency fund.

Instead of the newest flatscreen TVs or flashiest DSLR camera, we deserve to look at our online statements and see we are saving 10%, 20%, maybe even 30% for retirement.

Instead of a sleek new car that we can only afford with a 6-year purchase plan, we deserve to start upon the road to financial security by making smart choices today… even if we have to drive down that road in a very old car.

Today is Valentine’s Day, a time to celebrate love (it’s NOT a made-up holiday, says this Valentine’s Day defender). And what better way to show love to ourselves -especially our future selves- than to work toward what we truly deserve? I’m using this holiday as a wake-up call… and a chance to reframe my concept of what I “deserve.”

Tell me about your “I deserve it” traps.

The Money Sandwich

Written by WellHeeled on February 13, 2012 · 9 Comments

Last night, CB and I were driving. R&B and rap songs were playing on the radio, and suddenly CB said, “you know what, we can build a sandwich with all the slang terms we have for money.”

Case in point:

First, you have to start with slices of bread (made from dough)… refers to basic sustenance, livelihood, to earn one’s daily bread, breadwinner

Then we add some cheddar… refers to selling foodstamps (“government cheese”) for money or the similarity in size between stacks of cheddar cheese and bills

Next, we slide in a few leaves of lettuce – refers to the green color of bills

And finally, what better meat to put into a sandwich than… BACON? bacon – as in bring home

Viola! The money sandwich.

What other terms for money can you think of? Can you build anything else with money slang?

8-Day China Tour for $49 – Great Deal, But There are Caveats

Written by WellHeeled on February 9, 2012 · 18 Comments

If you found out about a deal that would only cost $49/person for an 8-day tour of China, you would jump on it, right? After all, who WOULDN’T want to visit the Middle Country for less than the cost of a tank of gas? I talked to my parents, researched online, and checked out a few Chinese travel agencies to get more details on this seemingly too-good-to-be-true deal.

Here’s the gist on the $49 China 8-Day Tour

The Chinese government is subsiziding these deals for overseas Chinese (living in the U.S., Canada, U.K., and I think Australia, and New Zealand) and their friends/families to promote consumer spending inside China. That is how tour groups are able to offer such an unbelievable price – $49 for 8-day/7 nights of hotel stays, internal transportation, meals, and entrance fees and guided tours to popular attractions. So, the good news is that this is a legitimate tour with several benefits, not least of which is money. But remember the “there is no free lunch” axiom? That caveat applies here as well.

Here are the benefits:

It’s a cheap trip and a fanstastic value! All of your hotel, dining, and attraction expenses will be covered under this program. So, if you are truly frugal and disciplined, all you have to spend for 8 days in China is $49 (if you are an overseas Chinese) or $199 (if you are not) plus the cost of your airfare. You will not find a deal like this anywhere else. If you are short on funds, this is a fun and cost-effective way to visit China.
You will stay in really nice 4-star or 5-star hotels that go for $100+ a night, although they will likely be outside the immediate city centers. Just on hotels alone, you would have more than “made back” the cost of the trip.
You won’t have to worry about your itinerary and you will be led to the most popular attractions. There is very little planning you would have to do on a trip such as this.
You will have the opportunity to meet with overseas Chinese folks and maybe even practice some Mandarin!

But beware the caveats…

These tours have mandatory “shopping visits,” which makes sense as the tours’ purpose is to promote more spending in China. Every day, you must spend a couple hours a day at stores and malls that the tour guides take you to. You don’t have to buy anything, but the sales pressure can be pretty heavy. Plus, your time is not your own during those hours. If you miss these tours, you will be fined. This means you can’t take off to do your own activities.
The tour guide may only speak Chinese Mandarin and/or Cantonese. You will have to pay a surcharge for an English guide. This website says the surcharges are $200 per person.
Airfare isn’t cheap! From Los Angeles to Beijing, tickets can easily cost $800 per person for economy class. The costs are even more expensive if you are flying from the Northeast or the Midwest. There is no point in spending this money if you won’t be enjoying yourself on the tour.
Your restaurants and hotels will be predetermined for you. This aspect isn’t different from that of any other set tour, but is something to keep in mind. The food, according to reviews I have read, is not that great with the exception of breakfast. Several ads have described lunches and dinners as “local flavor banquet” and while I love Chinese food, the food that I find the least appetizing are banquet food.
Your time at the attractions will be more limited than if you are traveling independently or if you are traveling with a “normal-fee” tour group. Your guide may be good or not, but his main incentive will be to pack you inside shopping malls or stores instead of providing good commentary on the attractions.

I talked to CB and my parents about whether this trip would be worth it, and ultimately we decide it wasn’t the right trip for us. The airfare is still a major hurdle as it will be over $1,500 for the pair of us to fly back. We don’t mind tours, but sitting in buses and getting shipped to stores where we have to stay for hours per day doesn’t sound appealing at all. There is also the question of time. My PTO schedule is getting mighty tight (having to fly across the country for school visits and interviews will do that to you!), so these 8 days cost something too. Between the flights and the vacation days we’d have to take, we decided to just save up the extra money and just do a trip in China where we are free to craft our own itinerary.

The bottom line: this is a great deal if you want to see China on the cheap and stay in nice places, as long as you don’t mind the less attractive aspects of the tour. If you are interested, here are some reviews and tour descriptions (here and here if you can read Chinese). Your local Chinese travle agency would also know more about these deals. As far as I can tell, they have been going on for the past couple of years, and is extended into Spring 2012.

Would you ever go on a tour like this?

Hat tip to Happy Homeowner, where I first read about this type of tours.

Do No Spend Challenges Work?

Written by WellHeeled on February 8, 2012 · 24 Comments

Many personal finance bloggers participate in “no spend challenges” or count their “no spend days” as a way to rein in the budget and save more money. I once tried a version of a no-spend challenge / shopping hiatus (it was called C.A.S.H. and focused exclusively on clothes, shoes, and accessories) back in 2008, but gave up after 4 months. I have never tried a completely cold-turkey no-spend challenge. Lately, though, I’ve been feeling a little disillusioned and discouraged with the long road to financial freedom, and as I look around my apartment at the hundreds of dollars worth of items that are unused – or, gasp – never used, I’m wondering if I should give this no spend challenge a try.

Will it turn me into a better saver? A more thoughtful consumer? Or will is it a stop-gap measure that will just drive the shopper in me crazy and won’t lead to any lasting change?

So, of course, I made a pro / con list as I think about embarking on a NO SPEND CHALLENGE…

Pros:
It challenges you to, well, NOT spend.
It’s kind of a game – how many days can I go without using money?
It forces you to look at other, potentially less appetizing options, aside from just whipping out a credit card (for example, I may actually be forced to eat the wilted head of lettuce and old bread in my fridge instead of going out for Chipotle. Less appetizing, indeed!).
It makes you become more conscious of often you go without buying something.
It discourages thoughtless, throwaway purchases such as a pack of gum or popcorn.
It encourages planning-ahead-spending.

Cons:
It can encourage “binge buying” behavior. If I just rush out after a no-spend challenge and buy $500 worth of merchandise, that really is no better than spending $10 a day for two months.
It’s unsustainable.
It forces you to pass up really great deals that can save you money over what you would have normally spent.
It doesn’t necessarily help people become more conscientious consumers.

From what I can see, it doesn’t really hurt to try a no spend challenge. Maybe that’s what I need to kick my personal finance butt into gear.

What do you think of no spend challenges? Do they work for you?

Is Being a Grown-Up Everything You Thought It’d Be?

Written by WellHeeled on February 7, 2012 · 21 Comments

When I was young, all I wanted to do was to grow up. I remember one of my fervent wishes were to be able to stay up past my bedtime, 9:30pm. I loved New Year’s Eve because it was one day of the year when my parents wouldn’t chide me to go to bed sooner. Then a few years passed – I’m not exactly sure when – and they stopped telling me to go to bed. And I missed that, not because I wanted to be told, but because it was a sign that time is passing, and that I am getting older, and once you get to a certain age, you lose the privilege, the expectation, that you should go to bed at 9:30pm.

Now I am a bonafid grown-up, an adult, I am getting married and heading off to graduate school and saving for retirement and all that. There are lots of things that I enjoy about being an adult. But there are other things that make me go, “gee, being a grown-up isn’t all that it’s cracked out to be!”

All the Administrative Life Tasks that you have to deal with. Picking up the dry-cleaning. Buying groceries. Setting smog check appointments. Renewing your driver’s license. Paying the electric bill. All these little annoying things that take up much more time that I had expected.
A mature, healthy relationship that takes work, and most of us did not grow up taking Relationship 101. I don’t know what I was thinking when I was young, but I had the impression that having a happy relationship would just kind of materialize, because that’s what happens When You Grow Up. But relationship, like all things, actually takes work. Who knew? For as important as healthy romantic relationships are in a person’s happiness, there is suprisingly little education on it.
It’s hard to make, and maintain, friendships. Unlike in high school or college, where you see your friends every day and maybe even lived in the same building, being an adult means that your friends are miles away, or spread out across the country, or even the world. In a school environment, it’s relatively easy to make friends. But once you are out in the working world, and everyone is busy, and maybe have their own, primary, relationship, it becomes much harder to make friends.
The cooking. Oh… the cooking. Being an adult = if you want to eat you have to cook or pay someone else to cook it for you. Being a child = having someone provide your meals WITHOUT charging you money. How glorious that was. Now, CB and I descend upon a pot of Mom’s leftover fried rice like ravenous wolves.
Having to think about money & retirement. I never worried about retirement until I found the world of personal finance. But now I do!

2012 Clothing Purchases, January & February

Written by WellHeeled on February 6, 2012 · 14 Comments

We are barely into the second month of the year, but I have done, er, exceptionally well on my spend $2,000 on clothing goal. In fact, I have already spent $308.87 on five pieces, but they are all items that I love and should have for a long time.

I am trying to be much more conscientious about my purchases and buy things that I know I will enjoy for a long time. Given that I’ve spent 15% of my annual clothing budget in barely a month, I think it’s time to cool my jets a little. No more purchases for the rest of February.

Everything I’ve purchased has been on sale for at least 50% off the retail price… so the bargain hunter in me is pretty happy! The most expensive piece was the J.Crew Emmaleigh sheath dress, at $116.30 including shipping. The jacket and the velvet blazer clocked in at around $76-$80 each. The leopard shrug was $28 and the snakeskin belt was $20. None of the things were truly necessities (maybe except the suit – I could argue they would become necessities once I head back to school!), but they all fill a hole in my wardrobe.

What items are you looking to add to your wardrobe?

In Debt? Debt Management Plan Can Help

Written by WellHeeled on February 4, 2012 · 2 Comments

In the last few years, many consumers have sunk into debt because of layoffs, loss of equity in their homes, or underemployment. If you are facing unsustainable levels of debt, see if a debt management specialist can help by setting up a debt management plan. Be sure to look for a reputable company with a positive history in the debt management and counseling industry.

A debt management plan is an agreement between yourself and your creditors that reset the terms of your debt: this plan may allow you to pay a lower amount of what you had originally owed and provide a longer timetable for you to repay the loan. The counselors at the debt management plan can help you negotiate and contact the creditors so you do not have to do it all by yourself. Once the plan is set up, the debt management specialist will implement and administer the agreement.

But a debt management plan, while it can provide relief, is not a panacea. To maintain a financially prudent lifestyle, consumers have to change the behaviors that led them into debt in the first place. Saving for an emergency fund, paying above the minimum on their credit cards every month, and keeping track of their income and expenses are all critical steps along the path to financial security. A debt management plan can help you get out of the hole faster, but the best thing in the future is to avoid getting into that hole in the first place!

Fess Up Friday

Written by WellHeeled on February 3, 2012 · 14 Comments

I got a traffic ticket that has yet to be paid. It’s due next month.

Taxes. They are not going to get done until March.

Even though I know they are an interest-free loan to the government, I love receiving tax refunds.

If I can go back to middle school, I’d tell my younger self that life will get better.

I look around my apartment and I see at least $300 worth of purchases that I have never used before.

Now it’s your turn to fess up. What are your confessions for this Friday?

The Monthly Cost of Technology

Written by WellHeeled on February 2, 2012 · 19 Comments

Our lives are gadgety ones. Technology has become such a big part of our professional and personal identities that it’s hard to imagine what it was like before the advent of cell phones, cable, e-readers, and the like. But all that technology doesn’t come cheap. When I was in middle school, pagers and AOL Instant Messenger – anyone still remember that? - were the big thing on campus. In fact, CB and I even expressed our interest in each other via an Instant Messenger chat (ah, the joys of young love). My family had modem dial-up until 2004. Now everywhere I turn, there is this explosion of technology – new gadgets, faster downloads, bigger screens, higher resolutions. It’s exciting, but it’s expensive.

Even not counting the initial cost of purchasing the device, the monthly costs of using and enjoying all the technology out there can be a hefty sum. Think about it. A smartphone plan costs at least $60-$70. A family of four with iPhones can pay $200+ a month. Cable subscriptions cost $20-$50, more if you want premium channels such as HBO. Even readers aren’t immune from the costs – new books on Amazon’s Kindle cost around $10/download. Read 4 books a month and that’s $40. I can go through 4 books a week if they are good ones… so if I weren’t careful, I can spend $160 a month. JUST on books.

For now, CB and I have been pretty successful in keeping our technology/entertainment costs down. We don’t have a TV, we don’t have any premium subscriptions to Hulu.com or Netflix, and neither of us are big gamers (although CB hopes he can be!) so there are no costs for game consoles or money for multi-player-games. I have an iPhone, but my company covers that cost. We also both have personal cell phones. CB has a $35/month plan on his cell phone and my cell phone is covered as part of my parents’ family plan. We do have DSL internet (I would almost argue that is a necessity nowadays), and that costs $40/month. If we do count the costs for the iPhone and my cell phone, our total technology costs would be $160+ a month. I have free books on the Kindle, and CB once purchased a $0.99 book for me (it was a very bad romance novel. I really couldn’t finish it, but then I felt that I’d be wasting that dollar if I didn’t read it, so I just skimmed very quickly and confirmed how bad it was).

How much are you spending per month on technology (cell phone plans, cable, netflix, internet, e-books, data plans, etc.)?

Spending Money in Las Vegas – Eat, Play, Sleep?

Written by WellHeeled on February 1, 2012 · 16 Comments

I’m heading to Las Vegas this month for a mini-weekend getaway (pulling kind of a #8). Las Vegas has so much to offer tourists - whatever you like, you can probably get it in Sin City. But if your budget is not unlimited, you’ll have to choose what’s on the top of your priority list. So what do you spend your money on? Do you like to eat (try out new restaurants and buffets), play (gambling & shows) or sleep (hotels)?

Eat

I had a few friends who went to Vegas to specifically have dinner at Bouchon at the Venetian. With entrees hovering around the $30-$40 range, it’s the place for folks who like to eat! There are great restaurants inside all the casinos – in fact, I’d say Las Vegas has highest concentration of high-end restaurants all along one street. Where else can you walk from Tau to Guy Savoy to Nobu in less than 10 minutes? But even for someone who loves food as much as I do, I can’t bring myself to shell out the big bucks. I love food, but I feel that I can get better food, for cheaper, in Southern California than I can in Las Vegas. When I travel, I like to try the local specialities of the place , but there’s nothing that particularly pulls my attention to Las Vegas. Or rather, because of my budgetary concerns I refuse to let myself be swayed! So perhaps I’m just a fox crying sour grapes!

Play

If you want to party it up, Las Vegas is the place to be. I was comparing notes with a friend who goes to Vegas quite often about what we like to do and how much we spend, etc. It turns out that she usually stays at Imperial Palace, whose location on the Strip and price outshine its amenities. But that’s OK, because she spend only a few hours in her hotel room while she’s in town. The rest of the time she is dancing up a storm at all the hottest clubs. Cover charges and drinks range from $20/entrance to $60/entrance. If you want bottle service, that can set you back $1,000-plus. If you are a group of girls, my friend has informed me, you can into clubs free or for a discounted rate.

Sleep

So if I don’t spend my money on food or entertainment, what DO I spend on? Apparently, I am an 80-year-old stuck in a twentysomething’s body, because more than anything else a nice hotel to rest in is my priority #1. Las Vegas hotels give you the biggest bang for your buck. Because they can count on gaming revenue, the 5-star and 4-star hotels are often cheaper than comparable hotels in any other area. As long as I don’t go during New Year’s Eve or Super Bowl Sunday, the prices are usually very reasonable.

Case in point: the Four Seasons in Las Vegas cost $234/night for a Superior Room on a weekend in April, but the Four Seasons in Santa Barbara cost $605/night for a Superior Room on the same weekend! (Now you understand why we are high-tailing it out of Santa Barbara right after the wedding reception).

So that’s what I spend most of my money on in Las Vegas – the hotel. The other things – eat and play, I try to do on the cheap. We walk around taking in the night lights. I’ve wanted to see a Cirque du Soleil number but never could pluck down the money for tickets. Instead, we watch the free pirate show at Treasure Island. We try to fill up on a buffet and then have dinner at mid-priced restaurants such as Noodles in Bellagio, where we can get a big steaming bowl of beef noodles for $10/person. When we lounge in the hotel room, it’s truly enjoyable. I watch HGTV, take naps, hang out in the casino for a little bit of slot machine action before we go back to the comfort of our room and lounge all over again.

When I compare notes with my friends, many times we spend about the same. I may sleep on expensive sheets, another friend will have seen Cirque du Soleil, and another have sampled the finest meals at all the restaurants. That’s what’s so great about personal finance – different strokes for different folks!