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What’s My Wedding Budget? I Have No Idea

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The first rule of wedding planning, I’ve read, is to set a wedding budget. Sounds great, right? You pick a number that’s realistic and prudent, and you prioritize your desires such dress, food, and venue accordingly. I am turning into a very bad PF blogger bride-to-be, however – I have no idea what our budget is! CB and I both know we want something (1) small at ~40 guests, (2) lovely, (3) that doesn’t break the bank.

What’s a reasonable wedding budget (for us)?

From most things I’ve read, $10,000 is kind of the watermark for an affordable wedding, while weddings around $5,000-$6,000 dip into the budget skillz territory. I know the Big Day can be expensive, but $10,000 is quite a bit of money for us. Even $5,000 sounds like a lot – it took us to a YEAR save up the precious $5,600 to the Galapagoas Fund. Granted, CB was also saving for the engagement ring that time (sneaky, sneaky), so I assume that we can save more in the coming year. Still.

My rational self says: “the wedding just doesn’t quite rank that high on our savings list to allow us to have a big budget.” My weddingbee.com-reading self says: “The $70/head halibut with crab cakes menu sounds really good! Ooh, and how about that $2,000 alencon lace gown?” -_-

Ring, Wedding, Honeymoon – we know the first and last cost $$$

The other part is that I have already gotten something wonderful – a beautiful ring. A ring more than I ever really even imagined. A ring much more expensive than I had expected. I also want a really nice honeymoon. In fact, we are probably going to turn the Galapagos Fund into the Honeymoon Fund, and save the turtles for maybe 5 years out. So the front-end and back-end of the whole getting-married process will cost us a pretty penny, even without taking into account the wedding itself.

Top Down vs. Bottom Up

So I am kind of at a loss. How do I go about the process of setting a wedding budget? I can pick an arbitrary number out of the air and try to fit all the elements we want (or start cutting!) into that budget – the top down approach – then find the number woefully inadequate. Or I can start pricing individual items and build up to a budget that will accommodate those items – the bottom up approach – and then watch my budget (and my head) explode.

I also don’t want set something based on “how much we can afford” – because “afford” is such a squishy term. If I can “afford” a wedding only if I cut back on my retirement saving or take out money that I have already saved for something else, can I really “afford” it?

Before we got engaged, CB and I talked jokingly about a wedding budget. HIS brilliant idea was to spend $5 – a dollar each for the dress, the reception, the ceremony, the photography, and the food. Har de har har. I am going to spend more on this wedding than the cost of a Big Mac, but how much more? I don’t know.

So, to all the ladies and gents who are planning a wedding, how did you decide on a wedding budget? Are there any worksheets / templates that you found helpful?

20 Ideas for a Cheaper Night Out

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Today’s guest post is by “Wojo” Kulicki, author of the personal finance blog Fiscal Fizzle. Thanks Wojo!

A lot of young people love to go out—whether it’s clubbing, bar-hopping, eating out, or a wide variety of other expensive entertainment options. Some people can still afford it, but more and more are finding that their income is having a hard time keeping up with their lifestyle.

I’m finding that many of us are willing to get very creative when put “under the gun” of a strict budget, debt repayment plan, or a cut income. Things that were needs suddenly become wants and get shoved to the side. Nevertheless, entertainment is still something we want to engage in, so what’s a 20-something to do?

Here is a list of 20 alternatives to going out—some I’ve tried personally, some suggested by friends and colleagues, and some learned by observation. If you’re finding it increasingly hard to entertain yourself by spending a night out on the town, maybe it’s time to give one of these a whirl:

Dance lessons.

If you’re like my wife, you love going out because dancing is fun. But she’s also perfectly content spending the night at a dance lessons improving her moves!

Board game night.

A staple of low-budget get-togethers, the right board or group game can really make the night last into the morning. My favorite? Catch Phrase.

Music session.

Do you sing? Got a buddy that plays piano? You’ve got yourself a night full of awesome music. </li>

Sports league.

While the bars and clubs are starting to fill on a Friday night, there are softball, soccer, and tennis tournaments going on right in your town!

Go to free community events.

At least once a week, there’s a free concert going on in the community park down the street. On the first Saturday of the month, there’s also a free movie night.

Tasting.

For many, one of the major appeals of going out is the alcohol. Why not attend a wine tasting instead, or better yet—have your friends bring over the wildest samplings they can and share!

Be in the vicinity.

Some people just love the buzz and atmosphere of nightlife. Head downtown and people-watch or walk the strip.

Be a designated driver.

If you just can’t pass up going out, but can live without the drinking, why not offer to drive everyone around?

Grab ice cream.

If going out to eat is your thing, but dinner’s too expensive, head to the creamery for some dessert instead.

Find a group activity.

Inexpensive get-togethers at the mini-golf course or the bowling alley could mean hours of fun that are light on your wallet.

Find an art event.

Organized art exhibits or downtown “art walks” can be great places to enjoy a nightlife atmosphere and maybe even score some free drinks.

Go to the movies.

Sure, it’s still spending money, but even a $10 movie is still competitive with most other night-out ideas.

Do a late night picnic.

When I think of picnics, a late afternoon at the park or the beach comes to mind, but a friend suggested that picnics late at night are an awesome way to pass the time.

Hold a bonfire/camp-out.

Those of you blessed with a country setting and a sizable back yard will have no problem pitching some tents to hang out in or setting up some lawn chairs around a campfire.

Organize a potluck.

Have friends who love food? Pick a house where you can crash and have everyone bring an awesome dish they’ve made.

Hold a Wii tournament.

Interactive games have changed the idea of game night forever. Now you can get everyone involved and moving.

Set up an outdoor movie.

If you have a projector, laptop, speakers and a large white sheet, you can create a DIY theater in about 10 minutes.

Head to the pool or the beach.

Water can be more exciting at night, especially with a few drinks and good company.

Hit the arcade.

Yes, they still exist! Once a staple of teenage life, arcades are a fun way to kick back, get nostalgic, and enjoy some simple fun.

Go cruising.

When I lived in Miami, we could spend an entire Friday night just driving down South Beach without ever getting out of our car.

Are you excited yet? A lack of money doesn’t have to mean a lack of fun! The list above is only a start—as you can see, there are tons of free or low-cost things you can do tonight instead of sulking about not having money at home. (Well Heeled Blog: or, for something fun and productive, how about enlisting your significant other in some spring decor to make your home cleaner and more stylish?)

What’s your favorite? What options have you tried that aren’t on the list?

Giving Myself an Adult Allowance

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Do you have trouble sticking to a budget? I do. The past several months have been tough from a money-discipline standpoint. I’ve went from “I don’t need a budget” to “oh shoot, I am spending A LOT of money” to “gosh I’ve eaten my way clean through the budget.” That’s why I’ve been batting around the idea of giving myself an adult allowance, or mad money, or free cash, whatever you want to call it. An allowance sounds like I’m back in grade school again, but sometimes I feel like I have even less self-discipline than I did way back in the day. So if the shoe fits…

money 300x225 Giving Myself an Adult Allowance

Several bloggers have sung praises about the adult allowance for themselves or their significant others as an effective money management tool, so I’m encouraged to give this a try. A brand new month is coming, I might as well try out a system that might work for me.

As a starting point, I am setting my adult allowance at $300/month.

I don’t really know what would be a reasonable allowance, but $300 sounds good and not too excessive. My “regular” monthly spending is probably around $1,800, including housing & utilities ($750), car ($450), food (budgeted at $250 but usually $300), medical ($100), student loan ($160), and charity and gifts ($100).

This $300 allowance can be spend on anything I want – from restaurant meals above my current $250 food limit to facials to movies. (Travel is excluded from this as I have a separate travel fund).

April will be my big experiment month. I am hoping the Adult Allowance works for me and I am greeted with a lower credit card bill (and I really WILL remember to pay my bill on time this month). The trick will be not to exercising my prerogative to increase the adult allowance when I exceed my limit, thus rendering this whole exercise moot.

Do you or your partner have an adult allowance? How much do you give yourself a week?

photo by Molly DG

Food Budget Inflation Rampant: Time to Wave the White Flag or Double Down and Try Harder?

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In the Me vs. Food Spending competition, the statistics are currently thus: Food Spending 10, Me -3

Fighting a never-ending battle with food costs

In November 2010, I spent $336 on Food & Dining ($185 groceries / $151 restaurants). In December 2010, I spent $297 ($78 groceries / $219 restaurants). In January 2011, I spent $279 ($20 groceries / $259 on restaurants). Granted, some of these splits might be biased because CB tends to pick up groceries on his way from work, and I will often pick up the check at restaurants to make up for the difference.

food 300x145 Food Budget Inflation Rampant: Time to Wave the White Flag or Double Down and Try Harder?

via flickr/clspeace

Still. For someone who had a ~$200 food budget just a few years ago and who had expected cohabitation to decrease food costs (because we can split groceries! and magically bond over cooking like characters in romantic comedies! – I was obviously not in my right mind), these numbers are a little hard to accept.

The truth is, I don’t like to cook after I come home from work. I find cooking time-consuming and thankless. *CB thanks me when I cook, as I do when he cooks, but on the whole I think this whole daily-grind-cooking (as opposed to special-occasion-cooking, such as a dinner party or a lovely brunch), is one of the most thankless jobs out there. Mom, I don’t know how you did it.

I’d rather pick up extra freelance assignments, or work longer hours and try to get a bigger bonus – in other words, I’d rather make more money to afford buying good food than try to scrimp and budget in that regard. But making more money takes time, while resisting the 6th restaurant visit in one week can be implemented immediately.

Resign to the higher food budget? Or make an extra effort to cook more?

On the one hand, is $300/month food budget for one person really that unreasonable? On the other hand, I can easily cut $50 or $100 out of the budget if I just cooked 3-4 more nights a month. Is cooking 3-4 more nights a month really that difficult? I know CB is also finding that our profligate dining out habits to be a drain on his finances. Given that neither of us lack things to save for, isn’t it worth more effort to cook?

I don’t know the answer to this. But I do know that I am hungry.

Business Insurance Experts Premierline Direct

How Do You Budget for Health Care Costs?

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health care How Do You Budget for Health Care Costs?

http://www.flickr.com/photos/katerha/4481575790/

Health care costs can eat up a big chunk of your budget, when you least expect it to. I should know – just ask me how much health care services have cost me so far.

Before this year, I only sought out health services once a year, for my yearly eye/dental/health checkup. This year, however, I am not so lucky. A few months ago, I sprained my ankle, and I am still paying for it (physically and monetarily).

First, I saw an orthropedic specialist ($30 co-pay) and got X-rays (haven’t got the bill yet, but counted toward $500 deductible). I also had some lab work done for my annual checkup ($94), a prescription ($10), and co-pay for doctor’s appointment to get those tests and prescriptions ($30). Now, I am in physical therapy for my ankle, and who knows how much that will cost. Physical therapists are medical professionals, and they don’t come cheap.

Add in my new eyeglasses and eye examination ($160) and dental care, and I am just getting an inkling of the expenses that can incur. I know things can be a lot worse. I don’t even want to think about the staggering sums that should come for a major illness or a trauma.

But as I have learned, medical costs can add up even for someone who is young, generally healthy, and well-insured.

Fortunately, since last year I have been putting $100 a month into a special savings account I dubbed the Health Care Account.  This very creatively-named account has since rolled into a neat balance of $1,000 or so, enough to pay for my deductible and co-pays. I am just grateful that I have insurance and resources for me to make decisions based on what’s best for me health-wise, instead of just focusing on finances.

How do you budget and pay for health care costs?

Fabulous Weddings for MUCH LESS Than $10,000? 4 Examples Of How It’s Possible

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When my boyfriend and I first started talking about weddings, we were both relieved to find out that our expectations are, well, quite low achievable. Last night, CB mentioned to me that he’d rather have a small wedding and spend most of our money on traveling. “Is that okay?” he asked. “That is (absolutely and fantastically) okay,” I replied.  I am glad that we are in sync on this, at least on the big-picture stuff. (But seriously, if he doesn’t ask me to marry him, I am going to stop talking to him about weddings!)

We will figure out a budget when we come to that point, but I know neither of us want to go into debt for the wedding. Not only that, I don’t even think we want to spend a lot of money on it. Of course, “a lot of money” is subjective in wedding parlance.

The average wedding in the U.S. costs around $20,000-$30,000,

according to the various reports and websites that I’ve came upon. See Cost of a Wedding, The Knot, WE TV’s Wedding Report for more information. If you want to have a traditional wedding with a sit-down dinner, dancing, live music, etc., at an in-demand venue in a big city, then the costs can go up even higher.

Fortunately, the web provides much inspiration for more budget-friendly events. After just a quick google, I found many blogs that talk about keeping the wedding budget under $10,000. That’s quite an achievement, especially in metropolitan areas, but what if I can keep that budget solidly in the four-figure range? I found a few bloggers who talked about how to throw lovely, memorable affairs for around $5,000 or $6,000! Granted, a few of these posts are several years old, so of course $5K in 2005 isn’t the same as $5K in 2011, but the philosophy and the guidelines still ring true.

Fabulous Weddings For Under $6,000

Friday Night Cocktail Wedding for just $5,000 – Canada, 2009

Jen, Monica, G and myself went to some local flower shops the morning of our wedding and bought what we needed. I deliberately didn’t have a set flower in mind, so that I wouldn’t end up making an emotional decision to get overpriced flowers- I opted for whatever looked good, fit the scheme, and was well priced. We brought them to my kitchen and put together our bouquets and all the center pieces. Both Jen and Monica each carried a single stunning hydrangea bloom- it was perfect. Flowers are way easier than any florist will ever let on.

Doing a $4,722 Wedding in Style (and They Had a Violinist!) – Brooklyn, 2008

Out of curiosity, I went to the Filene’s Basement‘s chaotic “Running of the Brides” sale, but none of the countless dresses tempted me to part with $250. It was a deal for some, but more than I wanted to spend. So I did the next best thing – I checked eBay. And there it was, a simple yet elegant, sleeveless, satiny, ivory sheath with only one bidder and 40 minutes left on the auction. I won the dress for $27. The seller said she’d purchased it from Saks‘ Off 5th outlet but didn’t lose weight in time for her wedding. Fortunately, her diet disaster was my happy ending.

Man Plans $6,000 Wedding for Friend, Including Night at Mandarin Oriental – Manhattan, 2005

Restaurants in Manhattan spend way too much time competing with each other. The mistake that most couples make is going for the popular places that are listed on registries like The Knot. The key is to find an accommodating restaurant, offer them the chance to attract forty new clients with their food, and negotiate something that doesn’t affect their daily business. Incremental business is always welcome at these smaller restaurants. Their average margins are in the low single digits, and cash-flow is king.

Grad Student Throws $6,000 Wedding and Pays for Bridesmaids’ Dresses – Atlanta, 2008

I was able to get my photographer and deejay for free. I found the photographer, another graduate student, on Craigslist.com. He was trying to get his name out as a wedding photographer. Our engagement and wedding pictures were free. The deejay was the boyfriend of a friend and he was also trying to get into weddings. A lot of people don’t realize that most vendors will work for free when they’re just starting out as long as they’re able to reference you. A friend of mine is a makeup artist and she did my makeup for free that day as my wedding present.

If you are a bride- or groom-to-be who is looking to keep your special day in the four-figure range, you will love the stories I linked to. Read and be inspired! Edit: Girl with a Red Balloon pulled off a fun, festive wedding for under $10,000, in less than a MONTH!

On that note, can I confess to you, my dear readers, that one of the reasons why I want to get engaged is so I can finally start blogging about a wedding budget? I am not sure if that makes me a particularly dedicated personal finance blogger or just really strange. Of course I also want to marry the man I love, make a commitment, build our lives together, etc. But the wedding budget? The allure is immense.

If CB ever reads this, I hope he is not freaked out.

Boot Camp vs. Gym: Pros & Cons

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exercise1 300x224 Boot Camp vs. Gym: Pros & ConsMy first month of Fitness Boot Camp is almost over. As a new member, I got a special price of $100 to try it out. After this month, the price will be $200. Aside from the charge, I’ve also been taking a few Bar Method classes / Zumba classes to mix it up. If I keep doing this, my monthly fitness costs will exceed $300! I am committed to getting in shape (must repeat: lifestyle change, lifestyle change), but I also have financial goals to achieve.

So, I’ve been considering doing the Fitness Boot Camp for another month, then switching to a gym membership – even the most expensive gyms such Equinox cost around $150 a month and offers unlimited classes. Plus, during the December / January holiday seasons, there are frequently deals with waived initiation fees.

I have scoped out the class schedule of an Equinox gym that’s relatively close to work, and I found about 2 classes per week day that I’d like to join: Express Train, The Ultimate Body Shaper, Rock n’ Body Sculpt, Boxing Boot Camp, Barre Burn, etc. If I do classes 5x a week, that would be 20 classes a month or $7.50 per class. There’s no where else I can get classes for that cheap. On the other hand, even the cheapest membership wouldn’t make financial sense if I don’t go (not to mention the health costs of sliding back into a sedentary lifestyle). And I don’t have the best track record with gym attendance.

Fitness Boot Camp Pros & Cons:

Pros:

  • Great instructors
  • Planned workouts: I love the fact that I never have to think about what workouts I’m going to do – if I show up 4-5 times each week, I know I am getting all of the major areas hit: strength, cardio, flexibility, balance, etc.
  • Accountability: Wake-up calls (and texts, and emails when I miss a session)
  • Month to month contract
  • Measurement / weighing of progress every 1.5 months

Cons:

  • Cost – $200/month
  • Only in the mornings
  • No choice of classes / times

Gym membership at Equinox Pros & Cons:

Pros:

  • Variety of classes – all included in the gym membership price!
  • Option to work out morning or after work: which, for the mornings that I don’t want to get up at 5am, is huge plus.
  • Cheaper than Boot Camp – $140/month: $60 is nothing to sneeze at. [In fact, if I choose to go to a cheaper gym, the membership can be as low as $30 a month].
  • Luxurious shower / locker facilities

Cons:

  • No accountability: no one will give a mouse’s behind if I don’t go workout
  • Limited validated parking – if I want to stay for 2 classes back-to-back I would have to pay for parking
  • 1-year contract
  • About 15-30 minutes from work (but it’s on the way home)

If I were rolling in dough I would do both (muahaha). But, alas, rolling I am not. So I have to choose. What do you think? Should I stick with what’s been working [Fitness Boot Camp]? Or should I give the gym membership a go [Equinox]?

source: topnews.in

The High Cost of Healthy Groceries

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The common perception is that cooking at home is always cheaper than going out to eat. Most of the times, I think this is true.  Lately, I’ve trying to cook at home more, both to save money and to help myself meet my fitness goals. After I started tabulating our grocery bills, though, I’m not sure how much money we are actually saving. It turns out that CB and I actually have pretty high standards when it comes to our groceries: I want items that are healthy, delicious, and convenient (which means pre-cut, individually-packed, pre-cleaned, etc.).

I am trying to incorporate more fish and high quality meats and vegetables into our diet (trying to improve my nutritional intake, from, say, three years ago). These high standards, not surprisingly, translates into high cost of groceries. I’ve been buying a lot of frozen wild salmon ($30 for eight 6 oz. individually vacuum-sealed fillets), frozen Tilapia loins ($15 for 6-8 loins), Greek yogurt (I like FAGE, which costs $1.99 for one small container), and other fares such as organic noodles, pre-cut butternut squash, and brown rice.  CB is resisting it, but I am hoping to move us onto pastured eggs before long.

The fish is especially expensive – I try to have fish (wild Alaskan salmon or Tilapia, although I am attempting to branch out) twice a week. Our monthly fish budget – assuming we get 1 pack of salmon and 1 pack of Tilapia – is almost $45! Yikes. I also like to get a big container of FAGE Greek yogurt for snack during work every week. At $5 a carton, that’s a cost of $20 a month.  If we start buying pastured eggs, a dozen would cost $5 to $6.

I think we need to start really keeping track of our food expenses. Or else, I’m going to eat us out of our house and home. Almost three years ago I asked readers what was your food budget. At that time, my groceries budget was $110. Now, I’ve set our grocery budget at $250-$300 a month for the two of us, although I hope to stick to the lower end of the scale.  A benefit of cohabitation is that we can pool our grocery monies together and buy in larger quantities, so I am hopeful that our money will stretch further.

So, let me ask again – How much do you spend on groceries a month? And, what kind of healthy produce / meats do you buy?

How I spent $500 on clothes in one month

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After getting back to Mint for the first time in several months, I realized why despite all its little quirks and annoyances it’s still one of the best and most convenient budgeting tools out there: the crisp graphs shocks you into realizing how much you have spent (and by you, of course I mean “me”).

In November I spent like there were no tomorrow. $513 on clothes and shoes, $313 on food, and $225 on gas and repairs. I am a little chagrined just writing down those numbers.

Clothes

The $500+ in clothes went to my Lela Rose splurge ($310), exercise wear ($22), a beautiful silk Nanette Lepore top I got on super clearance ($38), and a pair of Western knee-high boots ($143). I wish I can blame it all on influence of those lovely, lovely style blogs, but unfortunately it’s just me.

Food

The $300+ on food was $185 on groceries, $110 in restaurants, $22 at coffee shops, and $18 on fast food / burger joints. So… yes. Lately, I have gotten into the habit of enjoying wild Alaskan salmon ($30 a pack at Costco) and Tilapia loins ($16 a pack at Costco), so that’s where 25% of our grocery budget went: to the fishes.

Auto

The car expenses were the only area that couldn’t be prevented – most of it went to gas costs and some of it went to the mechanic. I put $150 a month into a separate account – my Car Repair Fund – and I only withdraw month if the repair is over $150. My hope is to continue building up that fund so I am not caught off guard by any big repairs, say, ones over $300.

The bottom line

I’ve realized that while I don’t need to keep tabs on where every penny goes, it is a good excellent idea to be mindful of how much I am spending. I honestly didn’t realize how much I have spent on…everything in November. It was much too easy to compartmentalize every purchase instead of adding up the numbers. Just think – if I spend every month like I did last month, I would be spending $6,000 a year on clothes and $3,600 a year on food. I wish my income can support that, but alas, it does not.

So, thanks to Mint for setting me straight.

The $10,000 Dating Budget

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Love don’t cost a thing, but dating is another story.

Do you spend less money when you are in a relationship? Do you spend more money on grooming, apparel, and eating out when you are single / casually dating? These are the questions that come to mind after I read The Economics of Serial Dating: A Case Study. It’s a fascinating article about one New York City woman’s dating budget for the year. The article opens with a pithy introduction:

Meet Anna. She spend $5,468 a year on dating, before she even leaves the house.

economicsofdating The $10,000 Dating Budget

As the graphic shows, Anna’s total cost is even higher, at over $9,000 once the costs of taxi rides, professional photos, online dating memberships, clothing, shoes, dry-cleaning, personal grooming, and other costs are tallied up.

Given that my dates with my boyfriend generally revolve around In-N-Out (oh delicious burger) and that the most expensive piece of clothing I purchased with a date in mind was my $80 prom dress, I never realized how expensive dating can be. On the other hand, plenty of people date, and I can’t imagine most people spending almost $10,000 a year on this pursuit of Mr./Mrs. Right or their less attractive alternative, Mr./Mrs. Right Now. Or perhaps I have an unrealistically low budget for dating. Besides, I am sure the clients of Millionaire Matchmaker spend several hundred thousands, if not more, on their love-story-in-the-making.

Cost of Social Life vs. Cost of Dating

One thing I noticed is that most of Anna’s costs are the costs of having an active social life, not exclusively the costs of an active dating life. Going out every night and taking taxis are expensive, regardless of whether you do it with your friends or a date. The beauty products that Anna uses are also for her personal use, I’d argue.

I have spent some pretty penny on beauty treatments in the past – a $250 hair straight perm, a $80 facial, etc. But I wouldn’t attribute that to a cost I had to incur for my relationship. There are also many expenses (shoes, clothes) that Anna rolls into her “dating budget” but that are not really dating-exclusive purchases. Anna admits that she sometimes makes purchases that she may not have made without the specter of an upcoming date over her.

Still, it’s undeniable that there are very high social pressures for men and women – especially women, I might argue – to look good. Looking good doesn’t come without effort, or, most of the time, money.

So I am curious – How much do you spend on dating a year? Please tell us your demographic if possible (age range, location, gender).

source: bundle.com

Eating Out On Vacations

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This weekend CB and I traveled to the absolutely beautiful city of Boston and had a grand ol’ time walking around, meeting up with friends, and eating. Lots and lots of eating.

brunch pic 198x300 Eating Out On VacationsAll this eating has turned into quite an expense. We were in Boston for three full days – in those three days we had:

  • 3 dinners, including a grand lobster dinner at Legal’s Sea Food
  • 5 brunches/lunches (picture on the left is of the crab cake benedict at Stephanie’s on Newberry.  They cost $18 but was 100% worth the price. I can tell that it’s all crab, no filler. Thank you to Saving My Bacon for introducing me to this restaurant!).
  • 2 coffee breaks
  • 1 donut run (can’t pass up Dunkin’ Donuts, can we?)

The total cost of all our meals for two hovered around $350, or around $60 per day, per person. That is much higher than we normally spend, but I tell myself it was a vacation.

What is your philosophy when it comes to eating out on vacations?

Forget the budget and satisfy the senses – after all, it’s a special occasion

OR

Keep the wallet in check to avoid a spending hangover after the trip

I’d like to think I maintain a healthy balance between the two, but when it comes to food and touristy experiences (Duck tours – $65 for two tickets, anyone?), I veer on the side of it’s a vacation!  I did stay in one of the cheapest options I could find in Boston ($140/night hotel), so I gave myself a little more leeway to enjoy the culinary delights the city had to offer.

Life Without a Budget: 4 Questions to Ask

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Life without a budget might sound like a financial disaster, but it’s working out okay for me.  Well, the “without a budget” part isn’t strictly true – I don’t spend more than I make, and I have make sure my fixed costs (rent, car, internet) are in line with what I can afford to pay. Still, I don’t follow a strict budget nor do I keep track of where every penny goes.  If someone ask me how much I have spent on eating out last month, she would have received “too much” and then a blank stare as her answer.

Do you think you can live a life without a budget?  The way I see it, this type of more hands-off financial management works for people who can answer affirmatively to 4 questions.

1. Do you pay yourself first using automatic savings?

If you put 15% of your money into 401K and Roth IRA every month, that money won’t be around for you to spend it. Same thing with automatic savings to emergency fund or to long-term objectives. It’s the oldest (and most beautiful!) trick in the book to prevent self-sabotage of saving goals.

2. Are you debt-free or have manageable debt?

People who are focused on paying down large amount of debt in a short period of time will achieve success with Dave Ramsey’s gazelle intensity. If you are intent on sending every penny to credit card companies or mortgage bankers, you need a budget to know where every penny is going.

3. Do you make enough money for necessities?

Basic needs such as nutritious groceries, reliable transportation, and adequate housing tend to take up a large percentage of a lower-income worker’s pay than a high-income worker’s. A $20,000 worker will probably need to keep a very close eye on his/her expenses. A $100,000 worker have more flexibility (if that person doesn’t live above his/her means), and that includes the flexibility not have a budget.

4. Do you keep spending level below your income?

Someone who has a tendency to spend more than his/her income should always keep track of their spending. If you are happily bumping along a certain level of expenses and find it manageable given your savings goals, however, then a strict budget may not offer as much value.

Do you agree / disagree with what I’ve written? Do you live a life without a budget?

Beauty School Haircuts: Style for the Cheap and Intrepid

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If you are brave, on a budget, and still looking for stylish hair, head to your nearest beauty school.

Beauty school haircuts are one of the easiest ways to save on haircuts and hair treatments. For example, my regular stylist charges $60 total, including tip, for a wash, cut, and blow-dry. The expenses add up quickly.  At the beauty school I went to (thanks to Revanche for the introduction!), a cut is $12 by first-year students and $15 by second-year students.

A simple cut takes about an hour and a half, including a very relaxing wash, the actual cut and then the styling at the end. A teacher walks around the salon and supervises the students. The first time I went, my stylist was a chatty petite lady who apparently was a very good student – when she asked the instructor to examine my layers, the instructor measured my hair on both sides and made sure they were even, but she didn’t have to fix anything.

At the end, I gave my stylist a $3 tip, bringing the total cost of my haircut to $15, or a quarter of what it had cost at the salon I used to go to. I really love my cut, and to be honest, I couldn’t tell a difference in the result between what the student did and what my very talented stylist had done.

Still, beauty school haircuts aren’t for everyone. If you go, you should:

  • Know thyself. You can get a bad haircut anywhere, but at beauty schools the chances are greater. Even though students may be well-trained, they are still less experienced than stylists working in salons. If the prospect of a less-than-perfect haircut makes you feel sick to your stomach, then beauty school haircuts aren’t worth the stress.
  • Be clear about how you want your hair to look. If you don’t communicate what you want, the student may exercise his or her right to be creative. This may or may not be a good thing. Tread carefully.
  • Have a flexible schedule. Most schools only cut during school hours (i.e. during the work day), although some schools have night-time classes. If night sessions are offered, they fill up quickly.
  • Understand you can’t have a specific student. If you go to a school once and you love your stylist, that student can very well have graduated by the time you come back for another cut. This is what happened to me. I loved my first stylist, whom I really thought was a superstar. My second stylist was slower and less confident, but in the end she did an OK job.
  • Have patience. My cut was straight-forward: simple round layers and two inches to trim off the ends. It still took almost 2 hours to finish (and I declined the blow dry at the end). Many times the student has to wait for instructor approval before he/she can move on to the next layer. If the beauty school had been busier, it may have taken even longer.
  • Be realistic. If your hair is very curly, very damaged, or has a texture that even pros have had difficulty cutting well in the past, don’t risk beauty school haircuts. Go to a trusted stylist.  I have fairly run-of-the-mill wavy hair, so I was fine with a student wielding scissors behind me.
  • Relax (at least a little). In the end, hair is just hair. As long as the student don’t burn it off or give you a drastic bowl haircut, a bad cut can always be fixed. Enjoy the process of beauty school haircuts – and the savings!

A version of this article was first posted at BlogHer.

Free Starbucks WiFi: The Budget Buster

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Starbucks is a genius at busting my budget

Starbucks wifi is a budget buster. Or, rather, Starbucks wifi is MY budget buster. Ever since Starbucks begin its free wireless internet in the middle of July, I have been spending, and spending mightily, at their stores at least 2-3 times a week. Free WiFi has made me step into a coffeehouse at least once a week.

Excuses, excuses

I have an excuse, I tell myself – I live 30 miles away from home.  In heavy  – or even normal – traffic that makes what would normally be a 30-45 minute commute stretch to an agonizingly slow hour or hour and 15-minutes. Going 20 miles an hour is nobody’s idea of fun.  So, instead of trying to fight with all the other unfortunate drivers, I decamp to the Starbucks half a mile from work, flip over my netbook, and spend 2-3 hours surfing the net and writing (like now!).

How much am I spending at Starbucks because of free WiFi?

I am paying for this privilege: every drink cost around $3; $4 if I am feeling like a fancy frappacino. Sometimes I also order a sandwich because I was too busy to eat during the day and so I enter Starbucks famished. A conservative estimate of $5 per visit x 2 visits a week = $10 per week, or $40 to $50 a month.

If I keep that up for a year, I would be drinking 500 big green bucks down the (delicious green-tea-macchiato) drain. Sorry David Bach, I guess my Latte Factor really is costing me a pretty sum. And before all you savvy folks say – the public library! – I checked. There are no libraries that are close by or on the way home, and I’m not sure if they have WiFi even if there were. For the moment, at least, Starbucks seem to be my best option for waiting it out after work.

Modern Necessities: But I Need It!

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In life, there are luxuries then there are necessities. The true necessities are a certain level of food of appropriate nutritional value, health care, clothing, and shelter. But in a middle-class existence in a developed country, what we deem as “necessary” has a much broader scope than basic subsistence.

Here are several modern conveniences that have become necessities for my life:

  • High-speed internet access ($20 per month): What would I do without reliable and speedy internet access? I don’t know. The internet isn’t set up at my current apartment yet, and it’s frustrating. That’s why high-speed internet is a nonnegotiable line item in my budget. I think there is a case to be made for internet access as a necessity as much as telephone is – communicating with family and friends, researching information, doing work from home, blogging all require access to the almighty information highway. I would also consider a personal computer a necessity.
  • Cell phone @ free because on family plan: Given that my cell phone is my only phone, it’s definitely a necessity. Even if I had a land line, I wouldn’t feel comfortable venturing out without the cell phone on me. It’s funny how dependent I’ve come to be – I keep imaging what if I miss a really important call? Or what if I’m in a situation and I need help?
  • AAA membership @ $50 a year: I just feel better to know there is one number I can call for help if my car breaks down. And with a car as old as mine, breaking down is a possibility that I can’t discount. For $50 a year, I get the peace of mind (and towing, and battery jumps) that AAA provides.
  • Car and all related items (insurance, gas, maintenance) @ $400 a month: Maybe if I lived in another part of the country, I wouldn’t count a car as a necessity. But I live in Car Country, and I can’t go anywhere without a car. Public transportation is slow and unreliable, or too far away, or nonexistent. So I take good car of my Honda and hope it continues to take good car of me.

How about you? What do you look at in your budget and say, “but I need it!”

Financial Topics for Living Together

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It’s official. CB and I just put down the security deposit for our apartment. We will be signing the lease in a week and then getting the keys to move in.  I am looking forward to this phase of our lives together  (and I can’t say that the prospect of lower rent isn’t appealing!).

Everything moved pretty quickly – I honestly haven’t expected to find a place we both liked so soon. Our apartment was literally the 4th place that we looked at.  In two weeks, we will become the new tenants of a nice 1-bedroom apartment with ample natural light. Best of all, we get two parking spaces in the underground parking garage so neither one of us has to worry about finding a spot on the street.  This place has our must-have (2 designated parking spaces), most of our like-to-haves (upper unit, refrigerator), and even a few unexpected perks (a whole wall of closet space, dishwasher in the kitchen, wrought-iron chandelier in the dining area).

As for the finances of this move…

  • We will be splitting the rent 60/40. Everything else housing-related (gas, electricity, and internet) will be split 50/50.
  • I’m not sure how we will treat groceries, but we probably can just buy our own food. I tend to get more expensive groceries – for example, I think of nothing buying free-range eggs, whereas CB will eat regular eggs just as happily.  On the other hand, CB eats more in terms of quantity, so it probably evens out in the end.
  • We may also be putting our cars with the same insurance carrier to save money. I need to research on what, if any, liabilities this step might expose us to.

Other than that, we have no plans to combine our money.  I’m not sure if we need to have a written cohabitation agreement, but I do plan on discussing all relevant financial issues.

What’s the most useful money-related tip you’ve received for living together? What financial topic is a MUST-discuss for you?

Do You Need a Dating Prenup Before You Move In Together?

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datingprenups 300x225 Do You Need a Dating Prenup Before You Move In Together?In today’s brave new world of dating, mating, and personal finance, couples who are moving in together may well be considering a “dating prenup.”  What is that, you ask?  Well, I’ve never heard of the term either, until I started Googling. A prenuptial agreement is a legal document that spells out what happens to a couple’s assets and liabilities in the event of death or divorce.  A dating prenup is like a prenup for unmarried couples who move in together (and thus have none of the protection or guidelines offered to married people), providing terms and guidelines for a host of issues surrounding a breakup.

There might be some cohabitation in the not-so-far off future, and while CB and I have casually discussed the financial mechanisms of such a move, we haven’t really drilled down to the nitty-gritty.  Despite a penchant for all things personal finance, I don’t particularly want to make everything out to be so, well, contractual.  In other words, we both agree that if we make different salaries, it’s fairer to divide the rent according to percentage of total income instead of 50-50.  But we don’t (nor do we plan to – I hope) expect the one person to reimburse the other for a gallon of water that was not equally consumed.

When I typed in “moving in together finances” into Google, however, most of the websites that popped up mentioned the importance of a moving-in-together contract.  There are many names for this phenomenon: dating prenup, cohabitation contract, written agreement, pre-prenups, live-in contract, etc. I think prenups are generally a good idea (especially for community property states), but I’m surprisingly lukewarm to the prospect of drafting and signing a live-in contract with CB.

According to Kiplinger, though, I’m letting my heart rule over my head.  Kiplinger says that it’s essential to put your arrangement in writing:

This little piece of paper can help you keep your trial of domestic bliss from becoming a nightmare. In it, you should detail how much each partner will pay for rent, who will cover what household expenses, when bills are due, and other space-sharing arrangements.

The article even helpfully provides a sample cohabitation agreement.  AOL Personals shares horror stories of couples who didn’t have a cohabitation agreement and ended up fighting over a pen.  NY Post reports that more NYC couples are signing dating prenups. In addition to the more mundane financial aspects of living together, these pre-prenups can also set the terms of pet ownership / visitation after a breakup, expectations for graduate school support, even who pays for a termination of pregnancy, etc.  A recent CBS News did a segment on this trend, featuring a real life couple who has a dating prenup.

As sensible as these dating prenups seem though, I just can’t muster much enthusiasm for them.  Part of the reason is because CB and I don’t have combined finances (unless you count our joint savings account for Galapagos), and we have no plans to enter into major asset purchases before we are married.  We are both fairly financially-responsible.  We have been in a committed relationship for a long time.

Part of the reason is good old-fashioned optimist: I don’t think we will break up, though of course there are no guarantees.  Or, if we do, I harbor the hope that in the event that we break up after we move in together, we will both behave with grace, dignity, and respect for each other.  But I understand the prudence of a cohabitation agreement for couples who do have significant assets together, or if one partner would be giving up a job to move in with the other person.

My question is: Did you have dating prenup before you moved in? If so, what did you include? If not, how did you decide to forgo it?

image source: cbs.com

5 Year Travel Plan: Making Your Travel Dreams a Reality

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I’ve been struck by a bad case of the travel bug lately… I haven’t been out of the country since 2007, which seems like a long time. CB and I are saving for Galapgos, but we also want to travel quite extensively in the intervening months before our Big Galapagos Adventure.

Plenty of people have a 5-year plan for career and educational goals. So why not have a 5-Year Travel Plan? Two years ago, I posted on my Big Ticket Travel Dreams – since then, I’ve accomplished 1 dream on my list (Disney World). Most of the destinations overlap. Here are the destinations on my 5-year Travel Plan (the 5-year mark also coincides nicely with the entrance into my 30s).

manhattan 300x224 5 Year Travel Plan: Making Your Travel Dreams a RealityNew York City:

I’ve been to NYC quite a bit in the last few years, but CB has never gone. NYC is lovely in May/June, so perhaps we will plan for a Labor Day weekend 2010 or a Memorial Weekend 2011 trip. I’d like to stay at least 5 days and 4 nights and squeeze in a Broadway show. A back-of-the-envelope calculation puts our budget at about $1,500.

japan overview 276x300 5 Year Travel Plan: Making Your Travel Dreams a RealityJapan:

CB really wants to go to Japan. I’ve been to Tokyo and Osaka for a short while several years ago, but I’ve never been to Kyoto, the former imperial capital and arguably Japan’s most historical city. I’m not sure how much a trip to Japan would take in terms of both money and vacation days – $5,000 for two including airfare? 8 days? (2 days for travel, 6 days for play). Debt Hater booked a 4-night stay in Toyko & airfare package for only $1,200 in 2009. This will be a 2011 or 2012 trip.

China:great wall 300x241 5 Year Travel Plan: Making Your Travel Dreams a Reality

CB lived in Beijing for several months while I’ve spent time in Southern China. My aunt and uncle work and live in China, so we can stay with them when I’m in their city. For the rest of the trip, CB and I will be on our own (although my uncle can probably wrangle some travel discounts for us). Plane tickets will be around $1,600 for two, with another $1,000+ in lodging / meals / travel within China costs. $4,000 for two for 2 weeks - doable?

China is so huge and there are so many things I want to see that I’d like to devote at 14 days to this trip (2-3 days will be lost to traveling to & from the US / overcoming jet lag). I would like to go to China next year, which would push Japan to 2012. Or, I could try to squeeze China and Japan into two weeks, which would use up all my vacation for the year. 2 weeks is a little short for these two countries, but at least we’d do the bulk of the overseas flight in one go.

australia kangaroo 300x270 5 Year Travel Plan: Making Your Travel Dreams a RealityAustralia and/or New Zealand:

CB has proposed these destinations for a potential honeymoon trip. If it were to be a honeymoon trip.. I want it to be at least 10 days! Budget: no idea. I expect it to be fairly high because of the travel costs (round trip tickets to Australia will be at least $2,500 for two) and because we’d probably want to splurge. So… $7,000?

I would want plenty of snorkeling, relaxing, and eating. And of course, indulging in the world-class culture that Sydney or Melbourne offers.

paxos 300x201 5 Year Travel Plan: Making Your Travel Dreams a RealityGreek isles:

Oceans the color of lapis lazuli and beaches as white as sugar – sign me up please! I’ve been dreaming of the Greek Isles ever since I saw my first picture of Santorini. I’d like to spend a day or two in Santorini, but also visit the other, less well-known islands in the area (Paxos – doesn’t the picture look enticing?). Budget: no idea. I assume this trip would also cost a pretty penny (or $2,500 to $3,000 for a week?).

Pyramid at Louvre Museum 300x225 5 Year Travel Plan: Making Your Travel Dreams a RealityFrance / Italy / Spain:

I would love to do a tour of Western Europe. Sunflowers of Debt Chronicles estimated that her 15-day London-Paris-Germany tour cost $8,000 to $9,000 for two, so I expect that’s about the range CB and I would be look at. Maybe we can shave $1,000 off if we got really good deals or stayed in hostels, but I think a trip of this magnitude would cost at least $7,000. Perhaps this trip will get pushed off until we are older, however.

galapagos1 300x163 5 Year Travel Plan: Making Your Travel Dreams a RealityGalapagos Islands:

Say hello to the dream! People don’t tend to equate savings with romance, but CB and I are committing our financial resources for a future adventure together – what can be more romantic than that?

The cost of trip will be $10,000 to $12,000 for two. We are basing our budget on Lindblad Expeditions. Not sure that’s the operator we will select, but I know that I want a company that offers small groups, safe and comfortable ships, great food, knowledgeable biologists and scientists as tour guides, and a reputation for respecting and protecting the fragile ecosystems of the Galapagos Islands. For operators of similar caliber, I assume that the high prices will be here to stay. I want to do this trip in 2013, before I head to business school.

Thinking about all these travels have really put things into perspective for me – perspective on how much money we’d need to save! New York, Japan, China, and Australia alone will cost almost $18,000. Galapagos will be another $10,000. At the risk of being discouraged, I think this is a good exercise – I don’t want to keep “talking” about how much I want to go to Galapagos or Japan or Greece but never taking the steps to make those dreams a reality. (To be honest, I have no idea how I’m going to fund these travels and max out my retirement accounts at the same… I guess that’s all the more incentive to make sure I perform well enough at work to get the full bonus and refrain from needless purchases).

image source: (1) wired.com, (2) finnair.com, (3) travel.nationalgeographic.com, (4) textually.org, (5) greece-holidays.sunvil.co.uk, (6) photos4travel.com, (7) gliving.com

Share your 5 Year Travel Plan destinations in the comments! Or, if you have advice / feedback about the places I’ve listed here, I’m eager to hear your thoughts.