Morningstar X-Ray

Earlier in the summer I spent a lot of time trying to analyze my holdings across all of my accounts (I have 2 401Ks, 3 IRAs and two taxable accounts). I complained that I couldn't find a good tool and a reader recommended the Morningstar tools. Today I signed up for the free trial of the Morningstar X-Ray.

The analysis was a good confirmation that I have balanced portfolio. It also confirmed that I have a higher weighting of mid and small cap value and growth funds than the Wilshire 5000 at least.

For next steps, I'm thinking of buying some GLD and some more bonds -- I only have 9% of my holdings in bonds.

Saving $ in NYC: Yes, it's possible

I love this story in the WSJ about how the author's daughter lives frugally in NYC and manages to save $5K while making $30K. Many of the tricks that she uses (eating lentils and other non-meat, non-processed filling foods) I have used for the last few years to get me through grad school and also last year to pay off my loan. When I look at my list of don'ts that I made in early 2008, it's pretty impressive. And now the don'ts feel natural (for the most part) so I don't spend money on these things, but don't miss them. Really, clothing is the only thing that I'm having a bit of a spending backlash on. So to people who say you can't save $ in NYC, you've just got to re-set your expectations as to what is "normal".

My Spending Rules/Don'ts
Spend less than 2K a month on rent
Don't take taxis
Don't get manicures, pedicures, waxes, facials or massages (or at least not regularly)
Don't buy clothes or shoes
Don't buy makeup
Don't order takeout food
Don't have a home phone
Don't pay any banking fees
Don't go to concerts
Don't own a car, pay for gas or car insurance or parking
Don't rent cars
Don't buy lunch out
Don't buy furniture or other home decor items
Don't buy books (use the library)
Don't buy napkins, other paper products or cleaning products (not good for environment anyway; obviously tp is an exception to this rule!)
Don't buy jewelry
Don't buy meat or processed foods
Don't buy wine that costs more than $10 a bottle

Savings Strategy

Now that I received my bonus (a little more than last year which is great), I have to figure out what to do with my savings. I also realized that my online savings account rate where a lot of my cash is has fallen to 1.1%! Ouch. It's tough times for savers. So, this is my strategy:

-- $10,000 contribution to non-deductible IRA (5K in 2010 and 5K in 2009). This way even if I want to buy an apartment at some point, I can use this money towards that). It also lets me do something with this money i.e. invest it. And, it gives me the option to convert it to a Roth IRA, without having to pay any taxes since its a new account. Seems like a solid strategy.

-- $50,000 1 year CD. My credit union has a good rate for a 1-year CD -- 2.5%. I'm a little nervous about locking the $ up for a year, but I can always pull it and pay the penalty if I need to.

The rest of my cash will stay in my high yield checking account which still has an interest rate of 3.25% or something in the 3s anyway.

Sound like a good plan? I like it because it boosts my retirement savings, which I'm very behind in according to my Puddin Score. And it lets me invest that money, tax free. While I still have a strong cash cushion.

Next Year's Budget

Over the course of 2009 and leading up to 2010, I've done a good job of reducing my expenses. Here are some that I've managed to cut:

Rent: From $1800 to $1675 = monthly savings of $125
Anti-virus: Saved $50 annually by switching to a free one (praying to Internet gods this does not bite me in the butt)
Taxes: Used TurboTax instead of an accountant to save $900 annually
Phone: I finally cancelled my Verizon account. This should save me in 2010 anywhere from $30 to $70 a month.
Personal Care: I started coloring my own hair during the second half of 2009, so that's reduced that category expense in half from about $150-$200 during the months when I would get my hair colored to more like an average of $60.

So, what am I going to do with all these savings? Spend them! haha. But on things I need/want. I"ll allocate more $ in 2010 to buying clothes, entertainment such as dance performances and the opera as well as travel. It should be a fun year! I also plan to move from my current place to a more convinient location and might end up paying a little more for rent again. Not a crazy amount, but for my mental and emotional health, it will be important for me to be a little more conveniently located next year.

End of Year and Holidays

To keep with the theme of the last post, I'm enjoying the holidays and for once am spending money (while still saving of course). Having reached the limit on taxable social security income, I have extra money in my paycheck during Q4, so that's nice. In theory, I will also recieve a bonus in the next few weeks -- something I've been dreaming of all year. And I'm making my end of year charity donations, which is fun. So between extra money and all the fun spending on gifts, charity (and myself), this is a great time of year!

Of course that means I'm not too excited for Jaunary, but I'm thinking of planning an inexpensive trip to try to ward off the winter blues.

I'll post my Q4 net worth post-bonus. I hope the stock market continues this winning streak. Bonus + stock market gains + end of year income bump = nice Q4!

Celebrating Paying off Debt

I can't believe how different it feels now that my student loan is paid off. I didn't realize it, but for the last year I've really been very aggressive about not spending $ so I could pay it off. This weekend I finally felt like I could let myself spend some $ on things I need. I have wanted a fire-proof file box (I'm such a geek) for about a year. So I ordered that online. Mostly though I bought clothes on a shopping trip (spree) with my friend. I realized the last time I really bought clothes, except for the bathing suit this summer, was last January, also with her, when I bought a new suit for work. Most women that I know would not have survived, haha. Anyway, it felt really great to buy some new clothes because I really need them. A lot of my clothes are 10 years old and some are starting not to fit anymore. I've been purging my closet as I switch to winter. That also feels good. To know I've used something for so long, I definitely get my money's worth out of my stuff.

House hunting

Today I'm off to look at a new condo in my neighborhood. The asking price is $569,000. Ouch. That got me thinking about how to gauge whether or not I can afford an apartment. I'd love to be conservative and spend 2x my annual income. I remember reading that that's a trait that rich people have in common. At 569, this place would be a little more than 3.5x annual income (not including bonus). However, I will most likely have to put 20% down, so the monthly payments seem doable. I calculated that if I pay an extra $10,000 a year on the mortgage I could pay it down in 17 years. That would be awesome. Of course paying $329,000 for a 2 bedroom apartment in a less desirable neighborhood that's farther away would allow me to pay down the apartment really fast. However that place is a Co-op and there are definite disadvantages to living in a coop versus a condo.

I loved this post about the Paradox of Choice on Get Rich Slowly this week. It's exactly how I feel about real estate -- paralyzed by too many choices.