2012 April | Well Heeled Blog

Saturday Wants: Fossil Vintage Shopper

Written by WellHeeled on April 28, 2012 · 11 Comments

I woke up in the middle of the night and did what every self-respecting personal blogger would do (not)… I went online shopping at Zappos. It feels so harmless buying things at Zappos, even thoug their prices are rarely the lowest I can find, because I know I can always return these items. Oh Zappos, how you reel me in with your fast and free shipping and your exemplary service…

Don’t worry, it was just window shopping. I had my eyes on the Fossil Shopper below. The birds motif has been done to death in the past couple of years, but I love the grey-and-purple palette, and the fact that it’s sized just a tad smaller than most totes. I promised myself that I wouldn’t buy anything new until I move to graduate school, because I will only have two suitcases to schlep most of my stuff.

Must. Resist.

fossil tote Saturday Wants: Fossil Vintage Shopper

Fossil Vintage Key-Per Shopper in Bird motif

Banana Republic 40% Off Code

Written by WellHeeled on April 27, 2012 · 1 Comment

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This is a one-time use code (please let a comment to let me know you’ve used it and I can take it down). 40% off one full-priced item. Expires 11:59pm ET on 4/30/2012. Happy shopping!

Help a 23-Year Old Reader Move Out & Set a Budget

Written by WellHeeled on April 25, 2012 · 27 Comments

A reader, let’s call him Ben, reached out to me and asked for some advice on getting started on the right (or left! har har) financial foot. I gave him my feedback – basically, keep your expenses low, build an emergency fund, and save for retirement even though you are only 23 - but I thought it’d be so helpful for you guys to chime in.

I’m a recent University of California college grad, recently employed full time, looking to move out of the parents’ house.

My employer does not include retirement contributions (hopefully they will by January). No health insurance to pay because I plan on staying on my parents’ plan until I’m 26.

Here are the numbers:

$3,000 a month before taxes, living in Los Angeles.

$264/month car lease that I’m stuck with.

Targeting $700-$850/month rent, splitting a place with one roommate

No 401k through employer so looking for some alternatives to putting money in a savings account.

Have $5,000 in savings right now.

Will have least $8,000 saved up by the time I move.

Thanks so much. Would love to hear your readers’ input. I had to wikipedia the 401k — it’s bizarre thinking about my retirement fund at 23.

Any quick advice on how much I can spend on rent/food on a $3,000/month pre-tax salary while still saving up? How much do you think I should save before I can make the plunge?Staying at home is not viable advice — I’m aware it’s the safest financial bet, but my heart is set on moving out.

So, wise readers, what advice do you have for Ben?

Long Distance Relationship & Getting Ahead Financially

Written by WellHeeled on April 23, 2012 · 49 Comments

In an ideal world, I doubt many people would move 3,000 miles away from their husband or wife a month after saying their wedding vows. But in the real world, that’s the situation CB and I are faced with, a move can save us some serious cash. That makes me wonder: would you enter into a long-distance relationship with your significant other because of financial reasons? Minimizing loans, attending a better school, securing a job, or winning a bigger promotion are all admirable goals, but what if they can only happen if you commit to living apart for hundreds or thousands of miles?

Long distance relationships and marriages and becoming more common, to the point that the US Department of State has coined a new term, “geographic singles.” Another term is “commuter marriage” or “weekend marriage,” representing folks who work too far apart to see each other during the week. During tough economic times, many couples are willing to live apart for a paycheck. Then there are the super LDRers who engage in transcontinental relationships and arrange for romantic weekends in Europe when one partner lives in the U.S. and another lives in Asia.

CB and I have always knew that a long-distance marriage would be in our future, for at least a few years. But we are now considering going from same-coast long distance (2 hour direct flight) to opposite-coast long distance (6 hour flight + layover = 8+ hours of travel). This is a move that could save us up to $50,000 in students loans. Is NOT having to repay $50,000 in loans (which would cost us $60,000 of net income once taxes and interest are factored in) worth putting 3,000 miles between the two of us for a year?

Long distance relationships and getting ahead financially: would you do it sometimes, always, or never?

Got a Ticket? Don’t Let It Increase Your Auto Insurance (by too much)

Written by WellHeeled on April 21, 2012 · 5 Comments

This is a sponsored post.

A few months ago, I got a ticket on an “unsafe lane change.” Let’s just say that I will keep my opinion about the validity of that ticket to myself… What’s done is done, but I want to make sure I minimize the impact of a ticket on my auto insurance.

When you buy auto insurance from a new company or renew your existing policy, companies all check your driving record for accidents, claims paid, and moving violations (parking tickets are typically not included in this review). Here are four ways to make sure your auto insurance doesn’t skyrocket after getting a ticket.

Contest the ticket. If you have reason or the stomach to contest a ticket, you can do so and potentially have it dismissed from your record. This not only saves you the cost of the ticket (which can range from hundreds to thousands of dollars), it will also preserve your driving record and therefore your current insurance rates.
Take traffic school. If you are eligible for traffic school, make sure to take advantage of that option. Search online for an approved-but-cheaper option. Traffic school may cost you a few hours and a few hundred dollars, but it can help minimize the impact a ticket has on your insurance.
Drive carefully – especially for the first 18 months after your ticket. Every state has different requirements on traffic school eligibility. If you are cited too many times in a short period of time, your license could be in jeopardy and your insurance costs will jump.
Don’t drink and drive. A DUI (driving under influence) is a serious offense, and insurance carriers view drivers with DUI convictions as especially serious risks. A family member was arrested for a DUI and has paid over $10,000 in court costs, legal fees, and higher insurance costs.

Fess Up Friday: 5 Financial Stressers

Written by WellHeeled on April 20, 2012 · 25 Comments

The developments in my life – financial and otherwise – have left me very stressed out for the past several days.

The first stresser is the fact CB didn’t receive any financial aid to his graduate program… funding has not kept pace with the applicant pool and so most people that would have received scholarships in years past only have the option of loans this year. Given that tuition is $40,000 a year, that is a very worrisome development, indeed. We are working on a Plan B, and I am hoping it will come to fruition. Please keep your fingers crossed and pray to the deity of your choice for us. Amount of money I’m stressed about: $40,000/year.

The second stresser is that my wedding is less than 2 months away, and I still have not 1. sent out our invitations. 2. finished our invitations. 3. finished our wedding website. At this point, I really wish it would be appropriate to email everyone on my invite list and include a link to my half-finished wedding site. Amount of money I’m stressed about: $0 because our invitations will be done as a gift, but email would be $0 AND stress-free!

The third stresser is that I am trying to find a roommate, find an apartment, and sign a lease cross-country. Fortunately, I am moving to a low cost of living area where a room can be had for $450+, so I am definitely looking forward to the cost savings that will bring. Amount of money I’m stressed about: $6,600/year

The fourth stresser is that the application process DOES NOT END with an MBA acceptance. I had thought that I would have a bit of a break between getting my acceptance and the start of the recruiting season in the fall. Oh no. In fact, an MBA acceptance just brings with it applications to all sorts of pre-MBA programs and conferences that are excellent networking and career-building opportunities, no doubt, but which also require more essays, more resumes, more time. Amount of money I’m stressed about: $??? depending on which conferences I get into and travel fees to said conferences. But I’d be lucky to have that stress, because it means I would be accepted.

The fifth stresser is not so much a stresser as it is a bit of a disappointment. CB and I have decided that the $11,000 Galapagos Fund really can’t be used for a Galapagos trip right now. I realized that I can’t go when Emily at Evolving PF asked what my mom would advise me to do. And I just can’t find a way to bring it up to her and have it still sound rational and prudent. And that is how I know I shouldn’t go. Instead, we are going to keep that money saved and probably spend it next year on graduate school-related costs. I know many of you encouraged me to go, and trust me, I WILL go. It will just be in a few years. In the mean time, I am sure we will be taking shorter and cheaper trips to placate my wanderlust and satisfy my need for adventure. Amount of money I’m NOT stressed about: $11,000.

I was talking with Deena and Andrea on Twitter, and we agreed that when finances are stressful, we lose the will to blog. Isn’t that ironic for personal finance bloggers? But it’s just so much easier to be cheery and upbeat when things are, well, cheery and upbeat. Any other blogger feel that way?

image credit: bottled_void via Flickr

If you have some stressers in your life, feel free to unload in the comments!

Committing to Financial Independence

Written by WellHeeled on April 17, 2012 · 27 Comments

From personal finance to financial independence

Even though I have been blogging about money, saving, budgeting, and investing for several years, I never really believed that I can achieve “financial independence” until I am ready to, well, retire in my sixties. The concept of financial independence seems so far away, seems to require far greater income or frugality that I can achieve. Frankly, I’m just not quite sure I want to put that GIANT goal out there and then fail.

Part of the problem is that I don’t know how to define “financial independence.” Or how much money I need to achieve this fiscal nirvana. Or how long it will take me. When so many unknowns are floating out there, it can be difficult to work up the motivation. To be honest with you guys, sometimes I feel as if I am just muddling along, and this dream of financial independence is off in the hazy horizon, forever out of reach.

But enough of that.

I KNOW folks out there are setting the big hairy audacious goal of achieving financial independence, and if they can do it, so can I. In fact, some of them have even taken the step of naming their blogs after that goal.

Financial independence: not just about numbers

There is a lot of information out there on crossover points and Monte Carlo simulations and all that technical jazz. A basic definintion of financial independence might be when your investments produce enough income for you to live off of, or when your investment income exceeds your expenses.

I don’t really see the point of calculating these things yet, because CB and I are both in our 20s, and I am certain that as we grow and change, our financial resources and needs will grow and change as well. So when it comes to financial independence, I don’t want to put any numbers out there, yet. Instead, I like to start my journey as a series of check marks and goals.

First up, I aim to keep our total graduate school loans (CB’s and mine) under $50,000. Then I’d like to pay off our loans so that we are DEBT-FREE (with the exception of a mortgage that we might take out) 3 years after graduate school.
Along the way, I want to continue to save aggressively for retirement by maxing out our Roth IRAs and 401Ks every year.
I also want to follow in my parents’ footsteps and begin investing in residential rental real estate. Eventually I may have to manage the properties they have acquired.
Of course, we need continue to build our careers, grow our income, and spend money on the things and experiences that matter to us.

Are you committed to financial independence (and what does that term mean to you)?

The Personal Finances of RMS Titanic

Written by WellHeeled on April 16, 2012 · 11 Comments

This Saturday, April 14, 2012, was the 100th year anniversary of the sinking of RMS Titanic. Coincidentally, CB and I were in downtown San Diego that day and so we had to visit the Titanic exhibit at the San Diego National History Musueum. We paid $19.12 per person (a special pricing the Museum did to commemorate Titanic’s year of sinking, normal pricing is $27). The exhibit, in a word, was AMAZING.

Ticket Prices on the Titanic

Far more interesting than our ticket prices, however, are the information I learned about ticket prices for the scheduled 7-day passage on the Titanic. (See this website for a great description of the rooms available on Titanic).

First Class

A First Class ticket in a single room cabin cost around $150 per person (the equivalent of $2,000 in today’s dollars). A ticket for the multi-room parlor suites is $2,500 per person in 1912, or a whopping $52,000 today! Two suites on Promenade B were the largest and most luxurious on the ship, and those cost $5,000 per person or over $100,000 today. As you can imagine, to be able to pay those prices (and most folks traveled with a retinue of valet, bulters, and servants), First Class passengers had to be among the titans of industry and wealthiest members of the Gilded Age. They are definitely among the top “one percent of the one percent.”

Second Class

A Second Class ticket cost around $60/person, or around $1,500 today. Many of the Second Class passengers were successful tradespeople, businessmen, or the clergy. Most rooms had two berths (or beds). Because Titanic’s Second Class wasn’t full, many passengers got a private room even though they only paid for a single berth in a shared room. Another plus was that the First Class and Second Class used the same galley (kitchen facilities), so the Second Class passengers shared in some delicacies such as lamb with mint jelly and plum pudding. Some of the folks who could have afforded a Second Class passage instead booked Third Class tickets to save money for their new life in America. Speaking of…

Third Class

A Third Class (or Steerage) ticket cost $40/person, or around $900 today. These folks slept in rooms that had 2 bunk beds, so four people would share a room. Titanic provided 2 bathtubs for the entire 700+ steerage passengers, one for men, and one for women. But even the the Third Class passengers enjoyed luxuries that were unavailable on other ships – for example, there were real mattresses on the Titanic, whereas straw pallets were used on other ships.

The Titanic Exhibit

The Exhibit runs to September 9, 2012. If you have any interest in the Titanic, maritime history, shipbuilding, or anything of that ilk, you would have a very worthwhile visit. I was fascinated. We saw all kinds of items salvaged from the wreck – all in remarkable condition – a leather briefcase, a lady’s hankerchief, gold necklace, a porthole(!), plenty of porcelain, lockets with pictures, a corked bottle with champagne still inside, and a half-full jar of cold cream. There were also postcards, calling cards, and a brush with the bristles still attached.

The exhibition also did a great job of telling the story of the passengers from notable people like Thomas Andrews, the ship’s designer, to lesser-known folks. At the end of the exhibit all the names of the passengers were listed in alphabetical order, divided by class, and divided by their survival status.

I jokingly asked CB which class we’d sail on. Obviously we wouldn’t have been able afford First Class, but I was kind of thinking Second Class would be a good compromise. But CB told me Third Class to save money! Hmph. In any case, if you were a man on the Titanic, your chances of survival were low. If you were not in the First Class, your chances were even lower. I believe almost 90% of men in Second Class and Third Class went down with the Titanic.

May she rest in peace.

Fess Up Friday: Cheap Wedding Band Edition

Written by WellHeeled on April 13, 2012 · 62 Comments

I guess with today’s confession, if you meet me at the Financial Blogger Conference, you’ll know the band of sparkle on my finger is not the real deal.

How sentimental are you about your wedding bands? Is it OK to get cheap rings now and upgrade them later?

You’ll see from our $7,000 wedding budget that our wedding bands will only cost $70 total. CB bought a tungsten ring for $15, while I have budgeted $50 to get a simple sterling silver / CZ ring. Just a stand-in for a few years until we feel more comfortable spending the $1,000+ it’d cost to purchase a matching diamond & platinum band to go with my engagement ring.

Yesterday, WorkSaveLive asked whether he should sell his wife’s wedding ring to pay off debt. Well you can imagine the kind of responses it generated! My situation is similar, but with a twist. Instead of selling an expensive wedding ring to pay off debt, we are holding off on an expensive wedding ring so we’d have the money to minimize our debt.

A few readers raised the issue that a wedding band is a sentimental piece of jewelry and that I should reconsider this whole notion of buying cheap now and upgrading later. I understand their concern, because it’s something I’ve thought about myself. How much do I value having the same ring that I am married with? Even among the budgety-minded, I don’t know of many bloggers who talk openly about wearing a costume jewelry ring with the exception of Little Miss Moneybags, who bought her CZ eternity ring (much like the one pictured) for $26 at the Limited.

I know CB will tell me to get the ring that I want, no matter the price. In fact, he has urged me to look at more expensive options at several points through the wedding planning process… he’s probably afraid I’m making all my decisions based on cost. He told me something along the same lines, that he doesn’t want me to regret not getting a ring that I’d love and want to keep forever. This is something I’ve thought about for a while. Although there is always the chance for regret, I am OK with my decision to get a cheap stand-in ring now.

I’m surprisingly not too sentimental about things (although you could argue otherwise, given my reluctance to sell my grandmother’s jewelry even in the face of historic gold prices).
I am not a big ring-wearer. In fact, sometimes I go days or even weeks without wearing my engagement ring. And when I do wear it, I worry about it getting lost or damaged. It seems an awful a lot of responsibility to wear a couple thousand dollars or more on your hand.
Fashion jewelry would suffice for everyday wear, with the added plus of not having to worry about insuring the ring, losing the ring, caring for the ring, etc.
Technically, we could get the $1,500 for a diamond and platinum ring… I have a bonus coming up, and we do have money in the bank. But with graduate school and its attendant loans looming in the distance, and my refusal to downgrade our honeymoon, I don’t think spending four figures on a piece of jewelry is the right move right now.
And last but not least, I figured if my ring is the only thing I regret about my marriage, I’d be coming out ahead!

Having said ALL that, just in case you think I am somehow immune to social expectations (HA!) or am 100% comfortable with my decision, I must confess: there is still something strange ~~about wearing a CZ ring~~ having people know that I am wearing a CZ ring, even if those folks are just personal finance buddies. It seems like there is something more “official” about having a proper ring in a precious metal, giving the occasion the gravity it deserves. Then again, when your budget is $50, your options are limited.

Would you ever buy a cheap stand-in ring with the thought of upgrading later (or never)? How sentimental are you about your wedding ring?

Are You an Abstainer or a Moderator?

Written by WellHeeled on April 11, 2012 · 35 Comments

When it comes to goals, there are two types of people out there: Abstainers and Moderators

Many personal finance bloggers try out “no-spend” or “no-shop” challenges where they abstain from certain purchases for a set period of time. I’ve never had much success with these types of challenges (in fact, I rarely go 2 months without buying something, even if it’s just something small like a belt or clutch). Originally, I thought I just lacked the sheer willpower (and, ahem, awesomeness) of other bloggers, but apparently the reason is that I’m a Moderator, not an Abstainer.

According to The Happiness Project:

You’re a moderator if you…
– find that occasional indulgence heightens your pleasure – and strengthens your resolve
– get panicky at the thought of “never” getting or doing something

You’re an abstainer if you…
– have trouble stopping something once you’ve started
– aren’t tempted by things that you’ve decided are off-limits

Abstainers and Moderators need different types of financial goals

Figuring out if you are an abstainer or a moderator will help you set financial goals in a way that encourages your success (instead of secretly undermining you).

An abstainer would find “No” goals – NO Starbucks, NO shopping, NO going out to lunch at work, etc. - a way to motivate herself into saving more money. A moderator, however, would chafe at such absolutes, and would find MORE/LESS goals easier to stick to. A moderator should instead aim to drink LESS Starbucks, buy FEWER clothes, bring lunch MORE often.

I am definitely a Moderator. The thought of “never” getting to do something – buy something, eat something, try something, etc., makes me break out in a cold sweat. It’s akin to a giant case of FOMO – Fear Of Missing Out. For example, I’ve dramatically cut back on clothing/accessories purchases and Starbucks consumption compared to years past. But if you tell me I can’t buy anything or drink a latte for a year (or more), the FIRST thing I’d do is rush to the mall and clean out the entire Sales section of Banana Republic while chugging a Venti vanilla soy latte.

Hat tip to Blonde on a Budget

Are you an abstainer or a moderator? How does that affect your financial goal-setting?

Win $50 Gift Card to NOVICA

Written by WellHeeled on April 10, 2012 · 22 Comments

It’s time for another giveaway to NOVICA.com, the website where you can find unique gifts and products (silk fans or batik shawls, anyone?) from all corners of the world AND have your purchases help local artisans sustain their craft and earn a living wage. I’ve put up a picture of my favorite batik shawl below.

batik shawl 1024x682 Win $50 Gift Card to NOVICA

NOVICA silk batik shawl, $39.99

One lucky reader will get a $50 Gift Card to NOVICA.com. It’s a great website to look for gifts – I really like their selection of mens cufflinks from India (there are a few things I like on the women’s accessories from Indonesia as well). And check out these Brazilian soda-pop tab belts!? Have you seen anything like it?

To enter, just do so via the Rafflecopter below. The contest will end on 12am EST on Friday April 20.

Our $7,000 Wedding Budget… In Color!

Written by WellHeeled on April 9, 2012 · 34 Comments

I’ve gotten several comments on our proposed sub-$10,000 wedding budget. Originally, I had wanted to wait until after the wedding to write about it in more detail, because how embarassing would it be if we just blew it during the last few days? Now that we are two months from the Big Day and have already paid for several items, however, I have a much better idea of how much things are going to cost (and weddings, unless you elope, will probably end up costing more than any other one day in your life. I have made peace with that).

So I present… our $7,000 wedding budget spreadsheet

The Budget column shows our best estimate of how much things will cost. The Paid To Date and Expense Complete? columns help us see where we still need to spend. A few notes:

The wedding is in an extremely expensive part of California in June, therefore we are not saving any money on the area or date (although we are on the time – more on that later).
There are two items that I haven’t decided on yet: videography and guest favors, but I have included them in the spreadsheet just in case.
Also, the readers who told me that my guest list will expand – you guys are right. When we first started planning, we were working with a tiny guest list of just 20-25. Then I realized there are close friends that we really wanted to come, and 25 became 40 – the max our venue will hold!

I am happy with the way the budget is taking shape. In fact, we have a good chance to coming in around or even under the $7,000 mark. When I started planning the wedding, I used a combination of “bottom-up” and “top-down” approach. We set $10,000 was our absolute limit, and then I looked around at the individual components to see where we can trim some dollars. The wedding percentage rules-of-thumb can be helpful, but I didn’t hew too closely to that. Case in point: I’ve seen several websites that suggest brides allocate 10% of their total budget to flowers. I adore peonies, but there is no way I can spend $700 on flowers.

We wanted to minimize stress and reduce cost

I knew early on that I was not going to try to have a “$20,000 wedding on a $7,000 budget.” Mad props to brides who can do that, but that just screamed STRESS to me. And all of our stress-bearing capabilities were spent on graduate school applications and work.

We looked for spaces where we’d need minimal decor and where we wouldn’t have to deal with rentals. Our ceremony venue came with seating (yes!) and is indoors (double yes!). After our daytime ceremony, our lunch reception will be held at a restaurant a short drive away. Therefore, we can get by with less alcohol, our meals are 30% lower than a comparable dinner menu, and we will not need a separate caterer. We do have to order wine directly from the restaurant’s wine menu (at a significant markup and starting at $30/bottle), but hey, we’ve all gotta make money somehow. So I don’t begrudge the restaurant that.
You’ll notice that we don’t have dancing in the budget – and we won’t have it at the actual wedding either. In an ideal world, we would have included it, but cutting out the dance portion allowed us to have a reception at that particular restaurant.
Originally, I was going to order a cake from a well-regarded bakery, but the owner refused to sell me a regular cake after she found out I was having a wedding. So I said “forget her!” Now we plan to buy several “normal” sized cakes from a local shop, so we can get more flavors and feed the same amount of people for less.
Bride & groom attire ate up more of our budget than I thought it would… but in the end I’m comfortable with how much we’re spending. Although I got my wedding dress at retail price, I shopped around for a deal on alterations and found a tiny neighborhood tailor who hemmed and tucked for $100. CB got an excellent Brooks Brothers suit that he can wear for years to come, for 50% off.
We actually found our photographer on Craigslist. Her pricing is low – $850 for 4 hours of coverage and full user rights – because she was just starting out when we booked her. It’s always a risk signing an up-and-coming vendor, but I really loved her portfolio, she was super responsive, and CB and I both liked her when we chatted on Skype. With a sub-$1,000 photography budget, I wasn’t going to hire an established, experienced photographer. We had to be comfortable with the fact that we have a newish photographer (although in the year since we booked her she has shot 10+ more weddings), but the savings are really substantial. I’ll let you guys know how the pictures turn out.

Some line items look really low… did you think about and ?

Probably. But please let me know if you think there’s something we forgot. A few notes:

We are not spending any money on stationery - a family friend is officiating our wedding as well as providing the invitations as his gift. We’ll be getting gorgeous letterpress on expensive card stock! The $25 is the cost of our stamps to send the invitations. We did not budget for pre-stamped RSVP envelopes because we’ll be having an online RSVP on our (free) wedding website instead. Is this a faux pas? Maybe… but don’t tell us that!
For the vases and cakestands, I purchased a few items from the local Goodwill, and my future mother-in-law borrowed a bunch of milkglass from her friend, so that makes up the bulk of our centerpieces. We are heading to a flower market for our flowers, and I’ve pretty much given up on a floral “vision” – only that I’d like to have blush-colored and light-pink flowers. Peonies would be nice, but so would roses, lilies, carnations, or flowers whose names I don’t know but would fit the look and the budget.
For wedding bands, we decided to with tungsten for him and a simple sterling silver or CZ band for her. It’s not supposed to last forever (talking about the ring, not the marriage, of course), so I wouldn’t mind waiting for few years before I get a platinum band to go with my engagement ring. It’s just not in the budget right now.
If we do go with wedding favors, I’m thinking of simple packages of madeleine cookies that I can pick up at the local bakery. I have talked to a college film student about videotaping our wedding, but he seems a little flaky so I’m not setting my heart on that. That’s why it’s still undecided.

I’m getting almost everything I wanted out of my wedding

The funny thing is that $7,000 is considered a budget wedding in Wedding World, but I don’t feel deprived. And NOT just in a Pollyannaish I-am-marrying-my-love-and-that’s-what-makes-it-perfect kind of way. Our budget removed certain choices, i.e., an evening reception, dancing, designer dress, etc., but I didn’t truly want those things, or at least I didn’t want them more than I wanted the money saved in bypassing those things. My parents are giving me $10,000 as a gift for the wedding, and so whatever we don’t spend I can use to fund graduate school costs.

You could say I managed my own expectations pretty well. So maybe that is the key to having the wedding you want at the budget you have. Just lower your expectations (or increase your budget!). ;-) Seriously, though, I got a really good deal, and I’m not just talking about money.

After all, I am having my ceremony at the place that I’ve dreamed of ever since before I got engaged. The food and cakes will be delicious. I bought a beautiful lace gown that I could afford even at retail price and CB got the suit that he absolutely loved. And we have friends who are flying from across the country and the world to celebrate with us. Bottom line, my budget is allowing me to get almost everything I want out of my wedding. That’s not the case for every bride, so I do feel very lucky.

Suggestions, questions, and comments welcome on this wedding budget!

Fess Up Friday: 5 Personal Finance Topics I’m Over

Written by WellHeeled on April 6, 2012 · 36 Comments

Not to be a complainer, but there are a few things about money and finances just get my goat. So in the spirit of Fess Up Friday, I present to you the five personal finance topics that I’m over.

1. People who talk about the beautiful $2,000 wedding they had for 100 people 15 years ago, and then wonder why couples today need to spend more. I know most folks do this with the intention of demonstrating that a wedding can be done cheaply and well (true). Also, true, however, is the fact that $2,000 15, 10, or even 5 years ago is not the same as $2,000 now. Inflation (plus the above-inflation wedding industry price increases) happens.

2. The sin of buying a (gasp) new car. Given the ever-increasing cost of good used cars, buying a new car might be the right choice, both for financial reasons and for peace of mind.

3. Fashion magazines and their charming sense of what is “budget-friendly” or “steal-worthy.” Unless you make a really good living, there is no way that ANY $1,000 dress/bag/necklace is a steal, even if their more expensive counterparts cost $5,000. I was so disturbed by this trend I wrote a whole post on it.

4. Extreme – and unethical - couponing. I don’t know when it became trendy to buy 300 cases of canned pasta sauce and pile them up in the basement (or breaking laws and disregarding store policies to make such purchases), but I will be glad when this whole thing blows over. Please, coupon judiciously and conscientiously.

5. The “stupidity” of tax refunds (or, if you get a big tax refund, or want a refund, or do not mind a refund, then you are a dimwit who cannot do math). Yes, yes, I know, tax refunds are interest-free loans to the government. I know that, and even so I would much rather received a refund than owe money, and for most people having a big refund is actually a pretty good way of enforcing savings. Besides, at less than 1% interest rate for most cash accounts, just how much interest are you missing out on with a refund? Answer: probably not enough for you to lose sleep over.

Hat tip to Eemusings for the inspiration.

What 5 personal finance topics are you over?

Going on Vacation When You Are In Debt

Written by WellHeeled on April 4, 2012 · 61 Comments

If there is something that the personal finance blogosphere loves, it’s vacations/travel. If there is something that the personal finance blogsophere hates, it’s debt. When you combine the two, what do you get?

My dilemma. Should I go on vacation while I am in debt. Or put another way, should I use money that I have saved for vacation when it’s money I can use to minimize my debt?

Here’s the situation

Long-time readers will remember the many (seriously, many) times I have gushed about the prospect of going to the Galapagos Islands near Ecuador. CB and I started a joint savings account back in April 2010 to save for this trip. We celebrated each small milestone, high-fived each other when our $250 became $500 became $700 and so on. When the Galapagos Fund crossed over the $5,000 mark in April 2011, I was so excited I almost cried. Now, our darling baby fund is a robust $11,000. It’s ENOUGH. Enough to fund a 7-night cruise to the Galapagos plus a few days in Quito, buy an entry-level dSLR or a really great point-and-shoot, pay for our park fees and international flights. We might even have a thousand or two left over. That’s what the money is FOR.

On the other hand, it’s almost $11,000 in cold hard cash that we can use to pay for less-exciting-but-far-more-necessary things like, oh, you know, graduate school tuition. It doesn’t quite make sense to keep the money in a 0.8%-interest earning account when graduate student loans will start at 6.8% (or more). We could go on a trip in 2013, but we will be busy with school and internships and one of my good friends might be getting married and we’ll have to travel for that, and it’s probably not the best time, logistically speaking.

Paying off Debt vs. Going on Vacation

“Well, at least I’m not taking on debt to go on a vacation,” I thought. But am I really avoiding debt for this trip? Or am I falling prey to a case of mental accounting? Let’s say a year of school for CB costs $12,000 out of pocket, and he will be in school for at least 2.5 years or a total of $30,000. Consider these two scenarios:

Scenario 1: CB and I spend the $11,000 in cash on Galapagos, and we have to take on the $30,000 tuition in student loans. Total debt = $30,000
Scenario 2: CB and I use the $11,000 to pay for his tuition, therefore we need to take out $19,000 in student loans. Then, we go to Galapagos and take out consumer debt of $11,000 to cover the trip. Total debt = $30,000

vacation vs. debt Going on Vacation When You Are In Debt

Even though we “used cash we saved for a vacation” in Scenario 1 and “took on debt for a vacation” in Scenario 2, in both cases, our resulting total debt levels are the SAME. It makes no difference (disregarding interest rates for a second here) whether we spend the $11,000 on Galapagos or school. It matters that that $11,000 is no longer available for tuition if we spend it on Galapagos. Yet another example of the fungibility of money. SIGH. So if I would never ever advocate taking on debt for a vacation, and Scenario 1 would land us in the same debt situation, should we really be going to the Galapagos? Can we really afford to go to the Galapagos?

The responsible, adult, thing to do would be to take that money, defer our dreams of seeing the turtles for a few years, and use it to pay for tuition/living expenses. But I can’t deny the wave of disappointment that comes over me when I think about that option.

I want to see the turtles. I want to do this trip. I want to cross Galapagos off my bucket list.

What would you do?

photo credit: http://www.flickr.com/photos/ndecam/

License to Wed

Written by WellHeeled on April 3, 2012 · 22 Comments

What’s the best way to spend $100 on your wedding? Getting the piece of paper that will make it legal. This weekend, we spent $100.50 to become proud owners of the license to wed (said in my best James Bond impression).

After we went to the clerk, CB confessed his fear. Apparently, he had been afraid that we’d misunderstand a question or fill out the wrong form, and voila! we’d be mistakenly married when instead we just wanted our marriage license. Hahaha. I never thought of that, but I suppose it would make things very awkward for the actual wedding.

Although, the whole experience of heading to the courthouse was so lovely and stress-free (we fill out a form, we stand in line for a bit, we chat with a nice clerk and raise our right hands and boom! we get the paperwork all done) that I was almost wistful that we didn’t elope. It would’ve been so easy (and, so much easier on the budget).

Fortunately, that moment passed. Because while we have already spent $2,700 on the wedding, we probably have another $4,000+ to go. And that’s if we wear our budget hats very carefully.

Foodie Finances: The Monthly Food Costs of Folks Who Love to Eat

Written by WellHeeled on April 2, 2012 · 36 Comments

A foodie and her money is soon parted

If there is one thing on which I spend most of my waking hours thinking, planning, and dreaming about, it’s food. I don’t have a food blog, I don’t take pictures of food, and I’m not a food purist in the sense that a locavore or a vegan or a Michael Pollan devotee may be. I’m not even particularly adventurous when it comes to food (foie gras, yes, fried locusts, no). I have equal love for hole-in-the-wall places and chain restaurants – as long as I think the food is yummy, I will eat there. Basically, I love to eat and I don’t particularly like cooking after a long day at work. Ergo, money = consumed.

As a personal finance blogger, my ears also perk up around anything that ties money in with food. And so it is with great interest that I read New York Magazine article that featured food lover Diane Chang, a 27-year-old digital strategist who admits that she spends most of her available money on the procurement and enjoyment of food. Diane makes $70,000 a year and spends around $1,100 a month in rent in Park Slope (which is actually an extremely reasonable amount of rent for New York City). Aside from student loans, most of her money goes to food. The week that she kept a food budgeting journal for NY Mag, she spent $350 on food and related purchases, a number that she has mentioned is on the high side of what she typically spends.

In March 2012, my fiance and I spend $814.93 on food between the two of us.

After I read the article, I added up what CB and I spent on food last month. Food – groceries, take-out, restaurant meals, coffees and snacks – constitutes the majority of my monthly discretionary spending BY FAR, but I had thought we might be in the $500-$600 range. Once we ran the numbers, we looked at each other and mouthed HOLY… We have crossed into the $800+ territory. Granted, March was fairly atypical in terms of our spending – we had two very nice meals that cost $200 total, and those were both special occasion meals to celebrate our entrance into grad school. Still. $800. Quite a wake-up call.

Of the $814.93, 14%, or $117, went to a 5-course tasting menu at a pop-up restaurant. That was our most expensive meal. The cheapest prepared meal was $6.69 at Trader Joe’s, where I got a chocolate bar and a miso salmon salad. Sprinkled in between those two extremes are $30 bills at our favorite ramen noodle shop and twice-monthly Costco runs where we get a dozen individually-packaged Greek yogurts for $10 and cooked chicken breast strips for $5 per package. Our normal monthly food costs is around $600-$650, which is what March would have been had we not gone to those two nice restaurants.

A couple years ago, before we moved in together, I’ve had the romantic notion that we’d just spend just $300 a month for the two of us. Obviously that has not gone to plan! Our spending is not only high by personal finance blog standards, it’s just high. Period. A 2009 The Nest article says that a couple typically spends $531 a month on food. And according to the USDA, as of January 2012, a family of two who spends $481.30 is considered to have a “Low Cost Food Plan” and a couple who spends $597.40 is considered to have a “Moderate Cost Food Plan.” (Check out this site for more fascinating information on U.S. average food spending for different family sizes).

More Information About Food Spending Statistics

With this nifty interactive app, you can enter in your spending and see how it stacks up against other people in your demographic, your city, and among your income level. According to the app, a married couple without kids spend around $8,000 a year on food, or around $666.67 on month (see below).

How much do you spend on food in a month? And if you remember, I’d be interested to hear about your most expensive and least expensive meals in the past month.