Well Heeled Blog > Life

Things that jolt you into action

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My grandfather passed away last week. Even though I am sad he is gone, I am glad that he had a very full 89 years and a relatively peaceful, painless death.

His death has really jolted me into understanding the mortality of my parents, who are turning 60 this year. SIXTY! I’ve always had this image of my parents as 50-something folks, and it’s sobering to think that they are, well, old, and getting older. There will come a day when I will have to say goodbye to them, just as they have said goodbye to my grandparents.

It’s that realization that made me sadder than even my grandfather’s death. It’s also that realization that made me decide to not put things off to “tomorrow,” and instead, take steps to do things today.

One of my goals is to go on more family trips with my parents and CB and I. When I was young, my parents and I would go on small vacations (a day or two over the weekends). By the time I entered high school, however, family vacations stopped because we all just got so busy. I’m going to change that! So this Memorial Day weekend, I am planning a trip for the four of us. It’s going to cost some money – flights for 4 are not cheap on a long holiday weekend – but the way I look at it, these next 10 years are going to be prime family travel years for my parents and I, and the time to start is NOW.

What are things that have jolted you into action on your life or finances?

How do you decide where to live?

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For most of us, where we lived during our childhood was not our decision. We lived where our parents (or other primary caretakers) lived, and that’s that. For some of us, college is the first time when we might have a little bit more choice of where to settle, and once we are financially independent adults, our choices are wider, yet again. Where we live impacts almost every aspect of our lives – how often we can see friends or family, how much we are able to save, what kind of job opportunities we have, how often we have to travel, what kind of entertainment is available, etc.

where to live How do you decide where to live?

Can you guess which 3 cities are these?

I am in a decision analysis class at school right now, and loving learning about all the different ways to make decisions, evaluate risk, and calculate utility. So that got me thinking… how do people make a decision on where to live? How do we decide which factor is the most important in where we live? I brainstormed up a list of broad categories (in no particular order) on which people might make their location decision:

  1. Family/children – Proximity to family and children (especially in case of divorced parents with joint custody) may is a powerful anchor. It’s easier to live near family who can help out with kids or stay close to elderly parents who need more attention. On the other hand, I’ve known friends who have moved away from areas BECAUSE they didn’t want to be too close to family! icon wink How do you decide where to live?
  2. Friends – Friends are the family you choose, and living near friends and having a strong social network have been shown to significantly increase a person’s happiness. 
  3. Romantic relationship – Long-distance is no fun. Sometimes, we move so that we can actually live in the same zip code as the one we love, even though it is not a place we would have chosen otherwise. 
  4. Weather – Many people have pursued their own Californian Dream because of 300+ days of sunshine. Many seniors have second homes in Arizona or Florida because of that same reason. If you can’t stand the rain, you shouldn’t live in Seattle. And if you can’t stand the cold, you should take a pass on Minneapolis. 
  5. Career opportunities – You can’t live somewhere where you can’t make money. Even though online/virtual job opportunities are becoming more common than in years past, many careers still have “hubs” where more opportunities abound. 
  6. Social/cultural amenities – Where we live determines what kind of social and cultural opportunities are available to us (and how long/far we have to go to access them!). Need to have great public transportation? Don’t move to Los Angeles. Need to be close to the best museums, most diverse food choices, and most 24-hour dry-cleaners? New York is calling your name. 
  7. Cost of living – We all pay a price for living where we live. Personal finance blogs talk about this issue a lot, but where to live is never (nor should it be) a purely number-based decision. But finances, of course, do matter. A couple making $100K a year can easily afford a house in Charlotte, NC, but will be struggling mightily in Southern California.
  8. Nature – Beaches or mountains? Or both? 

Decisions, decisions

    • For example, I have grown up in Southern California and have stayed there after college mainly because of my then-boyfriend / now-husband was there (#3), I could find a good job (#5), and I loved the warm, temperate climate (#4).
    • I had a good friend of mine move to New York City because her career is centered in Manhattan (#5) and she loved NYC and just wanted to be a part of the fastest-paced city in the country (#6). She certainly didn’t move to NYC for the “astronomical” cost of living – her words! – or the mind-numbing winter cold.
    • Another friend moved from LA to Denver, Colorado because he loved being outdoors (#8) and the slower pace of life and lower cost of living (#6 and #7). His girlfriend later moved to Denver as well because she also found a great job, but her impetus for job-hunting was mainly #3 – because he was there.
    • I’ve read many articles that talk about Portland in particular – a wonderful place that draws many well-educated young people with its affordability and quality of life, but that have been described as “the place young people go to retire” due to its underemployment and stagnant job market. I imagine that most of the folks who move there are not moving for career opportunities. More likely, they are moving because they can be closer to family or friends or because the culture just resonates with them. I also know several of my friends who would LOVE to move to Austin for the vibrant social scene, but the MBA jobs just aren’t there.

I wasn’t very thoughtful about where I wanted to be after college – I kind of just let the decisions fall where they may. But MBA recruiting opened up the country to me in a way that I haven’t experienced before. Recruiters came from New York and Boston and San Francisco, from Chicago and Houston and Atlanta. I took a very rational approach when evaluating my post-MBA geographical preferences. First and foremost, I focused on career opportunities: at which company and which geography will I get to work with the people I want, have the chance to do the type of work I want, and have the best opportunities for upward progression? For my husband, his 2 biggest focus is (1) me and (2) career prospects, when he evaluates the next step in his life. Ultimately, my husband and I need to live in a big-enough city that can support two careers. For the short-term, though, we have discussed the possibility of continuing our long-distance marriage if he finds a compelling enough opportunity not in my city.

But professional considerations are not the only issue for me when it comes to location. I also value proximity to my parents (within a 3-hour flight so I can visit them monthly if necessary), a relatively cost of living (I want to save money! And buy a house and travel and have nicer things while being able to save money), and warm weather (below 60 is cold in my book).

How did you decide on where to live? Which of factor(s) did you consider most strongly in your decision? 

Egg-freezing to extend fertility

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egg freezing Egg freezing to extend fertility

Over breakfast, as we chatted about my career goals and caught up on each others’ lives, a mentor of mine recommended I consider freezing my eggs. (I was really happy that I did not order scrambled eggs for my entree). “We’ve had trouble conceiving,” my 40-something mentor told me, “in hindsight, we should have frozen some eggs so that we don’t have to go through more invasive procedures now.” I have never thought about egg freezing before, but a quick search of “egg freezing” resulted in many articles about women in their 30s who have undergone or are considering egg-freezing in order to extend their fertility.

More women interested in egg-freezing

And it’s not just the women themselves who are interested in this technology. Parents who are eager for grandchildren are also getting in the act – by offering to pay their daughters’ egg-freezing procedures. Talk about thoughtful and slightly awkward all in the same breath. That is one conversation I hope to never have with my mom! (A friend of mine – also in her late 20s – told me that HER mom has indeed broached the subject of freezing eggs. It’s real!)

A 2011 Vogue article profiles several other women who are undergoing egg-freezing, and provides some useful background information. The article seems to indicate that the vitrification, the flash-freezing process that allows eggs to be preserved, started in 2006. So egg-freezing is still quite new. In late 2012, however, the American Society for Reproductive Medicine declared that egg-freezing technology is no longer “experimental.” The Society is not giving its blessings to egg-freezing for all women. Even though scientists think there have been 2,000 babies born from frozen eggs, the technology is still in its early days.

A little more googling turned up the story of a couple who decided to freeze their embryos (essentially, undergoing IVF but saving the embryos for their future selves) so that they can delay parenthood until they are ready, but heavily mitigate the risks of decrease fertility. For couples in committed relationships, freezing embryos may be a better way to extend fertility because frozen embryos have a longer history of success and a better track record than the much newer egg freezing process.

Then there’s the money issue…

Aside from the potential health risks of hormone injection or the uncertainty of successful pregnancies from these technologies, these reproductive procedures aren’t exactly cheap. Egg-freezing costs ~$10,000-$20,000 per cycle, and I imagine IVF cost similar amounts. Then there is money you’d need to spend to house the frozen eggs or frozen embryos can cost $500-$1,500+ per year. Then, if everything works out, you are on the hook for the costs of actually raising a baby! icon wink Egg freezing to extend fertility

As a woman in her late 20s, I don’t know any of my friends who are talking about preserving their eggs (only one of my college friends has a baby) or preservation IVF. But I do wonder whether this option is something my husband and I should think more seriously about. We are definitely not ready for kids right now, but maybe I will change my mind when I am 35. Wouldn’t I want the possibility to have a baby if I decide later on that that is what we want?

That’s the question I imagine many young professional women / families are asking. This is a brave new world of reproductive technology, and for some of us, maybe egg-freezing or preservation IVF is an answer, or at least has the potential to be an answer.

Would you consider or have you undergone egg-freezing or preservation IVF to extend your fertility?

One extra hour a day – name your price!

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extra hour time One extra hour a day name your price!

Yesterday was the day when we all set our clocks one hour ahead for Daylight Savings Time – effectively losing the one hour that we will then gain back in November (“spring forward, fall back”).

Because school has calmed down significantly since recruiting ended and I didn’t have any big assignments due today, this “loss” of that one hour doesn’t seem as painful as it normally would be. But it’s better to gain time than lose time, right? That is why I am always happier when “fall back” comes around.

So here’s what I’m wondering. What if you could gain an extra hour a day, every day? A sort of magic time of an hour that is yours, alone, to do with whatever you wish. How much is that extra hour worth to you?

You can use this magic hour to sleep in, cook and eat a leisurely meal, watch two more episodes of Suburbatory, spend extra time at a game, finish up a good book, etc. This hour can’t be accumulated, though, so just like a normal 24-hour day, once the day is over, you will never get that time back. On the other hand, this magic hour is also invisible to everyone else so you are free from their expectations of what to do with this time. Your employer wouldn’t know or experience this extra hour, so you would not be expected to work it. Your family wouldn’t expect you to pay more attention to them. That extra hour is yours to use and enjoy however you wish.

How much would you pay for this extra hour? And what would you do with it?

Is There a Stigma Against Separate Checks?

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I ask because I saw an advice column in SELF magazine on how to deal with dining-with-friends-and-money situations, especially with the sticky situation of a friend who ordered a pricey entree and wants to split the bill with someone who munched on a salad. I don’t disagree with SELF’s advice, but perhaps dining out is more awkward then it has to be.

Perhaps it’s because we are poor grad students, but my friends and I almost always ask for separate checks at restaurants (unless what we’ve ordered are really comparable, then we split the checks down the middle). I haven’t felt any stigma against getting separate checks, either from the waitstaff nor from my friends.

Ask Metafilter has a great thread on why separate checks for large groups can be a pain in the a– for waiters, however, we don’t typically have a problem getting separate checks, especially if we ask at the beginning of the meal. There’s nothing embarrassing about asking friends to pay their share, it’s not as if you are asking them for a cash loan!

Here is what SELF says and my take.

1. They got bubbly and oysters. You, a friggin’ frisee salad. Now they want to split the bill.

What SELF says:

You don’t want to seem like a tightwad, but if you’re broke, you’re broke. Say jokingly, “That salad was good, but not $40 good!” Next time, announce when you sit down that you’re ordering small.

My take: It’s not a matter of being a tightwad. No one likes to pay bubbly and oyster prices for a salad -unless your intention is to treat your friends, in which case, let generosity lead the way! I would just say, “why don’t we ask for separate checks” and then flag down the waiter. If that doesn’t work and you have cash, put down cash for your portion (including tax and tip, of course).

2. One person is clearly skimping on her share.

What SELF says:

Rib her gently. (“What else is hiding in that Marc Jacobs wallet, girl?”) In the future, offer to tally up shares–an app like Billr.me makes it easy–and ask another diner to collect so you don’t become the dinner-party pooper.

My take: In big groups, an easy rule of thumb is to take your dinner cost and add 30% (10% for tax and 20% for tip).

3. You didn’t research and chose the $$$ place.

What SELF says:

Sorry, this is your bad, so you have to make it up to the rest of the group. Offer to cover desserts or at least a round of post-dinner drinks. And for your next pick, might we suggest cheap and cheerful burgers and beers?

My take:

It’s up to someone in the group to speak up if the restaurant is too expensive, so I don’t think the person who selected the restaurant should have to pony up for more than his or her fair share. Of course, my friends and I have walked out of a restaurant before we even opened up our napkins once we realized how expensive it is, so it may be that we just have no shame…!

Do you usually ask for separate checks when you are out with friends? And has anyone had a friend gutsy even to suggest an even split when he/she ordered champagne and lobster while you munched on bread?

Improving Finances By Moving to Lower Cost of Living Area

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It’s amazing how much cost of living differs from locale to locale. A $100,000 salary would mean you are sitting pretty in Des Moine, Iowa. That same salary, while still substantial compared to the wider population, may leave you scrambling (if you are not careful) in Manhattan or San Francisco.

I would know – I grew up in Southern California, land of perfect 75-degree weather, 300 days of sunshine, tons of delicious ethnic food, access to beautiful mountains and sandy beaches, and proximity to family and friends. The couple of years before I quit my job for school, I grossed around $80,000 to $90,000 annually. Not a shabby income, but it was still a struggle to save as much as I wanted or to get ahead financially as quickly as I wanted. After graduation, I plan to move to the Dallas-Fort Worth area for job-related reasons and a much more favorable cost of living (the weather, while not as great as SoCal’s, is good enough to keep this warm-weather gal happy).

home comparisons1 Improving Finances By Moving to Lower Cost of Living Area

A look at CNN’s Cost of Living calculator confirmed it: let’s say that I can make $125,000 in Texas after graduation. To achieve a comparable standard of living in Los Angeles, I would have to make $172,000, or an increase of almost $50,000! Or, put another way, a salary of $125,000 in Los Angeles gets me what $95,000 in Texas does. I understand the expensive locales are expensive for a reason. You’ll never find a dearth of people who will flock to New York City or San Francisco or Washington D.C. The older I get, however, the more I realize I don’t want to have to pay so much for my quality of life or have home ownership be so far out of reach. I am not afraid to work hard for the comforts I want, but it’s also nice if I can work hard, have my comforts, and then be able to save a lot more money for the future.

Many jobs in bigger cities offer a higher salary, although the difference is often not enough to make up for the increase in living costs. For instance the average annual salary in Sydney, Australia is close to $90,000 but this is offset by the high cost of living, especially in the real estate market. Many financial institutions (e.g. UBank) now offer mortgage refinancing. Once I started school, I realized that most post-MBA positions at big consulting firms and investment banks start at the same pay regardless of location. This means that an investment banker can make $225,000 in Charlotte or $225,000 in New York City and a consultant can make $130,000 in Chicago or San Francisco. Same paycheck, BIG difference in what a person can buy and how much he/she can save. Especially with student loans.

I used to think “I’d NEVER move out of Southern California.” Then I visited some other (cheaper) parts of the country and realized it wouldn’t be the end of the world if I moved out of SoCal for a while. Then I moved for business school and started paying $550 for rent while my friends at UCLA or Columbia are shelling out double that amount and realized it’s really great not having to spend so much money on housing, cars, etc. Living in a lower cost of living area makes one’s financial life so much smoother – to an extent that I haven’t quite realized until I’ve moved to such an area. I still love California so much, but I also realized that it’s beneficial to my career and my finances to go elsewhere, at least for the first few years after graduation.

Have you moved (or would you consider moving) to a lower cost of living area for primarily job-/finance-related reasons?

Life & death: do you have your shit together?

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If you died suddenly, will your partner or spouse know how to fend for themselves in the midst of grief? Will your partner or family member know what your wishes were, will he/she have power of attorney to settle your affairs, access your accounts, have enough money to get through the first week, month, year? And if your partner were the one to go first, will you have all of that information? In short, when it comes to life/death planning, do you have your shit together?

That’s the question that Chanel Reynolds, a freelance designer in Seattle, mother of a 5-year-old son, and widow to an avid cyclist and software engineer, wants everyone to ask themselves. She didn’t “have her shit together,” and when her husband died suddenly in a biking accident, she was left trying to figure out where his passwords are, how to access his bank accounts, how to pay their mortgage, how to take care of her little boy and stepdaughter, all while going through the biggest, most devastating emotional trauma of her life.

getyourshittogether Life & death: do you have your shit together?

Now Chanel is sharing her story and helping others via her website: getyourshittogether.org. I first discovered this story via a New York Times article, and this story held extra poignancy for me because of my recent marriage. I have to say that neither CB nor I have my shit together:

  • We don’t have a will – although I do have stated beneficiaries for my retirement accounts, which constitute 95% of my total assets)
  • We do not have a living will or directive – we simply have talked about, in generalities, what constitutes an acceptable quality of life
  • We don’t really know each others’ passwords, or even all the accounts that each others have
  • We do not have a medical power of attorney – even though we are married, CB and I have different last names, so I am worried that in case something happens, we may need additional “proof” that we are married or have the right to make decisions for each other
  • We do not have any life insurance – and maybe at this point we don’t need any, but that is something to be discussed once I get a full-time job

Do you “have your shit together” when it comes to end-of-life or sudden-death scenarios involving you and your family?

How Do You Get Back on the Personal Finance Horse?

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If the theme of 2012 for me is change – getting married, quitting job, moving cross-country for graduate school, then that of 2013 is uncertainty. As of right now, I don’t know where I will be for the summer, I don’t know what I’ll be doing for a full-time position in 2014, and I don’t know if my husband will get into his graduate program, or if he will get financial aid, and I don’t know when we will be living together in the same zip code.

Then in the last week or so, we found out some very unfortunate news about CB’s parents’ finances. Long story short, I may find myself the partial owner of a house sometime in 2013, as CB and I are talking about using $50,000 cash to pay off his parents’ mortgage. This will of course have implications on our cash flow / need to take out loans for our schooling. My father is also having some health issues that require surgery, and so I am worried about him but also worried about my mother who is worried about him.

Stressful is one way to put it.

Here’s the truth: I find myself feeling discouraged about finances in 2013. Usually thinking about saving and planning for the future energizes me, but lately I’ve been wanting to just ignore all the money stuff…

If you have words of advice, especially about how to get back onto personal finance horse after a period of serious winter blahs, please share it here.

Here’s to 2013 – I hope it will be a year of new possibilities and progress.

 

Checking in…

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So, I have survived my first term at business school! Fortunately, I did pretty darn well academically – I even managed to eke out a high B in my statistics class, which was the subject I was most concerned about. Recruiting is going reasonably well (knock on wood): I suit up most nights of the week for presentations and am genuinely excited about summer internship prospects. And last but not least, I am making great friends and having a lot of fun.

On the other hand, it has been much more difficult to keep up this blog than I had expected. It’s not so much the time (although it is somewhat the time – I am at school from 8am to midnight most days) and it’s not so much that I don’t want to write – I miss the personal finance blogger community terribly. Unfortunately, I have sunken into a huge writing rut. Not having an income means that I can’t really blog about saving or investing money, and not having a budget means that I can’t really blog about, well, a budget.

WHY don’t I have a budget, you may ask?

That is indeed an excellent question. Here are my reasons, none of them very good, but all of them very good at stopping me from having a budget….

  • My biggest expenses are ones that I can’t change: tuition and rent. I try my best to pay the former without loans and minimize the latter, and so there is low motivation to save on the other, “littler,” things.
  • Though I aim to cook at home, sometimes I just get sick of eating frozen dumplings for the 3rd day in a row. Other times, I just really need a café latte, for sanity’s sake. So I have been spending…. <ahem> more than I should at school cafeteria.
  • A big part of school is about making friends and building relationships, and so if I have the chance to spend a nice evening at a wine bar or going out to sushi with friends, I am going to do ­­­­so, even if it cost $30.
  • Travel costs add up. Not only because I am in a long distance relationship, but also because of job conferences, company visits, etc., that require plane rides and hotel stays.
  • I still don’t have a car. I was pretty adamant that I need a car, and I still strongly believe that a car is right about an 8.5-9 on the Necessity Scale in my city. Life has been so busy, however, that I’ve had no time to look for a vehicle. Somehow I’ve figured out ways to get by, but we will see how it goes once winter comes around…

How are you guys doing?

Investing in a Long Distance Relationship

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You guys warned me, but I didn’t listen… long distance relationships are expensive! And most of those expenses fall into the form of cross-country airfare. When CB and I first decided to do this let’s-start-our-marriage-on-opposite-coasts deal, I thought we’d be fine seeing each other every couple of months. Now that we’ve been apart for a while, I’ve realized that the every-two-month schedule is one of Last Resort. We need to figure out a way to visit at least every 6 weeks, ideally every month.

After crunching numbers and checking calendars, we’ve worked it out so that we will see each other every month from September to December. Of course, all these cross-country flights don’t come cheap: just yesterday I plucked down nearly $600 for a Thanksgiving ticket. This fall, at an average of $500/flight, those four visits will cost us $2,000. Even though it hurts to spend the money (and CB is probably even more reluctant to spend than I am), I think this is the right move. It’s hard enough to be in a long distance relationship without having those little visits to look forward to.

On the other hand, even though I miss CB quite a bit, it is nice having time to just do whatever I need to get done. Many of my classmates have their spouses/families here with them, and I see how difficult it is for them to balance school, job search, and family. I envy them (because their loved ones are close), but I feel lucky that I don’t necessarily need to have “balance” right now. I can focus on whatever I need to get done. Then when CB and I visit, we can devote our time to each other. So, those plane tickets as “price of admission” to a successful long distance marriage. And high as it might be, it’s a price I’m more than happy to pay.

If you are in a long distance relationship, how much money do you spend on flights / travel to see each other?

Stories of the Unemployed

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Got 10 minutes? These unemployment stories from Gawker are definitely worth a read.

Unemployment Stories Vol I: Hello from the Underclass

Unemployment Stories Vol II: We are the Unseen

As someone who has experienced a layoff, I’ve realized how important a career is to me, not only for financial reasons but also for personal and identity reasons. Unemployment is a huge shock to the system, and it’s a shock that many people have to overcome while they are wrestling with questions of self-worth, with the feeling of being forgotten, along with the more practical problems of how to pay rent, buy food, and see a doctor.

I will never, ever take for granted my ability to support myself financially, and I will never, ever look down on people who have gone through long-term unemployment (or even short-term unemployment).

Holding Off on Merging Finances

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There are many ways to conduct your finances as a married or other-wise-committed couple. The most common three ways (very aptly described in this Slate series) are:

  1. Common Potters or 100% combined finances, where everything goes into the same account and what’s mine is yours and what’s yours is mine
  2. Independent Operators or 100% individual, where you pay yours and I pay mine
  3. and the middle ground of Sometimes Sharers or yours/mine/ours, where, just like the name indicates, incomes and expenses are divided into individual ones or shared ones.

Both CB’s and my parents have the 100% combined method, but that doesn’t mean that joint finances is better or worse than other methods. I am a big believer in different strokes for different folks. Right now, we only have individual accounts, even though (1) we have similar views on saving, investing, and quick loans, and (2) philosophically I believe that our money represent our joint resources (especially because we married relatively young and we have certainly not accumulated any type of ”real wealth,” whatever that means). It’s just that the logistics of merging finances = a really big hassle. Neither of us feel up to tackling this hassle, and so it’s easier to keep bank accounts separate for a while.

We also decided how to split our finances for this school year, while I am a graduate student and CB is working full-time:

  • I will pay for my tuition and most living expenses out of savings.
  • I will remain on my parents’ family plan for cell phone, so all I had to do was pay for a smartphone. My monthly phone cost, however, is a big fat zero thanks to Mom & Dad.
  • CB will pay my undergraduate student loans (less than $200/month), plus airfare for us to visit each other (around $500 every 2 months).
  • If I really truly need money, all I need to do is to pick up the phone.

In many ways, finances after marriage will look exactly the same as finances before marriage, especially when it comes to the day-to-day things. We will eventually merge our money so that our bank statements catch up to our philosophy, but just not quite yet.

When did you merge finances (if you did)? Were you put off by the hassle of merging?

Moving Is A Pain & I Am Turning Minimalist

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Minimalism and I have had a love-hate relationship. I’ve tried, but mostly failed, at minimalism, but now that I am prepping for a cross-country move, I am awash in this feeling of “die, stuff, die.”

die stuff die Moving Is A Pain & I Am Turning Minimalist

Moving cross-country alone is an expensive, stress-inducing proposition: not only will CB not be there to gallantly handle the heavy luggage, even the cheapest moving vans can cost several hundred dollars for rental fees and gas. In an effort to preserve badly-needed dollars and sanity, I am selling almost everything (furniture) and donating everything else (books, kitchenware). The move has certainly motivated me to pare down my possessions.

Here’s what the move will cost me:

  • $330: My one-way airfare from Southern California to the East Coast. Fortunately, I am flying Southwest so I can check luggage for free. So, basically, I have managed to fit most of my life into 4 pieces of luggage (1 carry-on, 1 personal item, 2 checked suitcases).
  • $50: I am shipping a box of shoes and a few paintings. I tried, but it is so hard to give up good shoes. Or meaningful-to-me art.

Once I get to my new home, I will need to buy a bed, a mattress, a desk, a chair, possibly a nightstand and maybe a chest of drawers. Thanks to all of your horrible bedbug stories, not only will I never consider a used mattress, I’ve become wary of buying even a used lamp or picture frame because all I can think about are tiny little bloodsuckers hiding in the crevasses, waiting for an opportunity to attack. So if I buy new, that obviously means I can’t buy as much stuff as I can buy used. Ideally, I’d furnish my bedroom and pay for my share of furnishing the common living areas for less than $1,000.

Maybe this is the year that I will finally turn (a little more) minimalist. There’s nothing like the stress of moving and fear of bedbugs to persuade me. icon wink Moving Is A Pain & I Am Turning Minimalist

If you’ve made a cross-country move on your own, do you have any advice for making the process easier, and dare I say, fun?

Guest Post on Add-Vodka: Clothing Alterations

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I guest posted on Daisy’s blog on something that’s been sucking up a lot of my money lately: clothing alterations. But now that I see how properly tailored clothes fit and flatter, I am committed to making alterations a permanent part of my clothing budget.

Let me know what you think!

Would You Ever Buy a Used Mattress?

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My current apartment is furnished with furniture thrifted from Craiglist, IKEA pieces, or hand-me-downs from the parents. In fact, our place has no piece of furniture that costs us more than $100.

Now that I am moving across the country, I will need at least new furniture in my bedroom: a bed frame, mattress, desk, etc.

For one split, fleeting second, I considered buying a used mattress off a graduating MBA student. Then I realized that my fear of bedbugs overwhelms my desire to save money. In fact, even my mother (who is the most dedicated saver I know), counseled me against buying used furniture because of the pain and hassle that comes from a bedbug infestation. That stuff is no joke.

Fortunately, Overstock has some bedframes and mattresses for $200 each. That’s even cheaper than many IKEA options! The low prices mean that I can put together a bed & linens for under $500. I can afford it, and I will consider that an investment in my peace of mind. And when I fall asleep, I shall dream of the $2,000 mattress I once tried and loved.

Would you ever buy a used mattress? How about if it’s from someone you know and trust? Or would the “ick” factor be too great to overcome?

Committing to Financial Independence

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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. icon wink Committing to Financial Independence

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)?

Cost of Getting an MBA: An Analysis

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I think I’ve come to a decision on business school. In the end, it came down to two schools, one that will cost me ~$27,000/year in tuition and the other will cost me ~$40,000/year in tuition. Over two years, that would be a difference of $26,000.

This isn’t an easy decision. I hashed it out with my friends, I talked to my mom (important as she will be footing part of the bill), I thought long and hard about what this debt will mean for my career path and life post-MBA. Thanks to personal savings and family assistance, I can graduate from the $27,000/year school debt-free. Then the question becomes: do I like the $40,000/year school enough to pay an extra $26,000?

The answer is yes.

To show you all what a nerd I am, I even constructed a simple Sources & Uses chart. Crunching the numbers made me feel a little better.

mba cost analysis Cost of Getting an MBA: An AnalysisAs you can see from the chart, I will probably leave school with $35,000 in debt (in the form of a personal loan from my parents). That means that I can potentially pay back this debt within two or three years, depending on what kind of job I get and my cost of living post-MBA. Even if I get a job that is below the median salary of $100,000 that most graduates receive, $35,000 is not crippling. It’s going to be a low-interest (or maybe even no-interest) loan, and I will be able to pay it off as long as I can get a job. In an ideal scenario, I would pay back this loan within 2 years, while maxing out my Roth IRA, 401K, and supporting the bulk of CB’s living expenses for his final year in grad school. If I can get a typical MBA-track job, that’s not out of the realm of possibility.

Of course, this chart doesn’t take into account the opportunity cost of going to business school. The two years I’m taking out of my career is probably worth $140,000 to $150,000 in lost income. But. But. The chance to be a student again. To kick my career into a higher gear. To learn from the best and with the best. To attend a really good school in a part of the country I love. I am excited. Despite the massive cash outlay.

And my parents are excited too. In fact, they encouraged me to choose the higher-ranked but more expensive option, and even used the “your grandmother would’ve wanted this” card. >.< (Maybe they got a raw deal – a daughter who is a strong enough candidate to get into well-branded, expensive schools, but NOT so good as to get a big scholarship. Ooops).

I suppose NOW is the time to start really counting my pennies. Every dollar I can save now is another dollar I’d have to pay for business school.

What kind of financial analysis / thought process did you go through when considering a graduate degree?

“Women should have the choice to stay home or work.”

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When I read articles and blogs that discuss stay-at-home parenthood, I often come across something like this line: “Women should have the choice to stay home or work.”

Now, that line has always disconcerted me, though probably not for the reasons you think. I believe caregiving should be recognized as a very real and very important contribution. And instead of each side fighting the other, we’d be happier if we focused on being guiltless moms (and dads!). But that line is disconcerting because of how our discussion of working vs. caring at home is framed. Think about it. The first thing that jumps out at me is “women.” If only women have the choice to be the primary caregiver or do paid work, then it presupposes that their partners (typically men) do not have that choice. After all, unless there is independent wealth, a family needs to work to sustain itself. I have never heard the corollary: “men should have the choice to stay home or work outside.” Even though there are very dedicated stay-at-home dads out there, and their ranks have been increasing for the past decade.

For reasons I can’t quite articulate the emphasis on women’s choice to stay home vs. work has always bugged me. I guess it’s because it frames parenting and career in such a gendered way. It seems unfair to both women and men. It is unfair to women because it assumes that only women will be struggling with this decision, and that if anyone quits it will be the wives because of their sex. It is unfair to men because it assumes that men leaving paid employment for caregiving is not a choice that is open to them or their family.

Furthermore, only a dual-income family have the choice to downshift into a stay-at-home parent / one working parent. Both partners/spouses cannot choose to both NOT work and stay home. Single parents, unless they are, again, independently wealthy or have significant financial support from outside parties, do not have that choice at all.

I am certainly not an expert on work, life, and family (for those, I encourage you to visit the blogs of these fine folks), but I’d like to propose that instead of defaulting to “women should have the choice to stay home or do paid work,” why don’t we talk about how “families should do what is best for their situation.” Sometimes that means both spouses work hard at big careers, sometimes that means one parent holds down the long hours and one parent has a more flexible schedule, sometimes that means one parent work and one parent stays home, and sometimes that means both parents work part-time. Over the course of a lifetime, these roles can change and emphasis on career-building vs. family time may change as well.

What do you think? Should we be talking about caregiving and work in less gendered terms?