Monday, July 27, 2009

Extreme Sports

So I watched my friend compete in the Triathalon yesterday. It is always very inspirational. However, training for the Triathlon is expensive. So is the equipment -- from $200 minimum for a wet suit to $1,000 for a bike. My friend told me that the more hardcore competitors with the fancy bikes spend $10,000 or more on their bikes.

I started running competitively (i use that term loosely) this spring. I thought it would be a relatively inexpensive sport, but its amazing how when you start something it's so easy to get sucked in and find things you need. So far I've bought:
$120 running sneakers - I could have gotten them cheaper but went to a boutique story so I could have an expert check out my gait and make a recommendation. Now that I know, I'll buy them online.
$40 fuel belt (so I can run and not have to carry water in my hand)
$100+ on driwick clothing -- cotton really does not cut it when you are sweating like I sweat. Luckily I buy on eBay (new with tags) because running clothes are pretty expensive considering how little fabric they are. Just like bathing suits.
$100 roughly on entry fees for races. All of them have been local so far, so no travel costs.

I could spend even more. I'd like to take classes or get a running coach. Personal training to build up my strength would be nice too.

And there's the threat of injury. Getting injured could add up to serious costs. On the other hand, there's great value to building strength and cardiovascular training.

The list goes on and on! Of course, I don't have to buy everything at once. Just like running, one step at a time.

Tuesday, July 21, 2009

it's no coincidance that money is green

So today I noticed that my electric bill was a lot more than usual. Usually it's about $25 a month (haha, eat your heart out McMansion owners), but today it was $37. I wondered if it was maybe a projected use instead of actual with the electric company assuming that I would use more electricity in June than I actually did. When I called, the customer service rep told me that I did indeed use more electricity last month. While we were talking, he kept asking me questions about my lifestyle because he said my usage was SO low. This reminded me of a previous, less frugal time in my life when the gas company sent me a "notice of non-usage" saying they were going to turn off the gas because I basically never used it. The only gas appliance in the house was the stove, so you can imagine how much cooking/eating at home I was doing. I think I stored clothes in the oven for a while.

Anyway, this time it's not cause I'm always out and about or travelling that my electricity bills are so low. Granted, I work all day and am only home for about 3 waking hours a day, but when I am home, I try my best to conserve energy. When I leave I do as well, unplugging those appliances that create phantom energy.

I make other "green" lifestyle choices in my house and life, for a mixture of reasons, both wanting to be environmentally responsible and frugal. So, what kind of things?

1. I minimize use of paper products -- No paper napkins, plates, paper towels and my toilet paper is made from recycled paper, not trees. I also use a handkerchief instead of tissues, which is kinda gross, but I'm used to it now.
2. I make my own cleaning supplies -- For the most part. Or I use naturally occurring compounds that are cheap and green like Borax, baking soda, corn stratch and vinegar.
3. I reuse plastic -- Both bags from the grocery (when I don't bring my own canvas) and plastic containers that food comes in to carry my lunch to work everyday.
4. I eat low on the food chain -- Beans and veggies are the mainstay of my diet. Occasionally some chicken and some small fish. When I do use chicken or fish, I use it as an accompaniment and not the main ingredient.
5. I do my laundry in cold water, I don't use fabric softener or sheets and I make my own detergent (I have sensitive skin) and I only do full loads. (not that any laundry-doing occurs in my apartmen;t sadly I have to leave for that)
6. The biggest one is not owning a car. I walk to do all my errands, or I take the subway or bus. I rarely take cabs, both because I get car sick and because they are expensive and polluting.

I think that's about all I do. I've become so used to my lifestyle (not that I'm doing anything that dramatic) that I have to stop and think about the things I do to be green/frugal. I've gotten a lot of tips from other blogs on how to live green and be frugal. I'll post more when I find some.

Sunday, July 12, 2009


I added the handy NetworthIQ widget. Note: I am lazy and just threw all my stocks and bonds into the stocks line item.

So, how am I doing? Big hit late last year due to stock market, but then I got my bonus and paid off my Sallie Mae debt. The leftover student loan debt is interest free on one of my mother's credit cards. I could pay it off, but why bother? I'm earning interest on the money in the bank.

Same principle applies for my credit card debt. Not only am I earning 4% interest on my cash, but I get 2% cash back on the card. Total return from credit card spending = 6%. I know everyone says credit card arbitrage is risky, etc. but I think it's awesome. If I could get a balance transfer check without the 3% I would move the debt again when my 0% teaser interest rate is up in October.

My ultimate goal is to have $100,000 in cash. It's such a nice neat number. As of the end of June, I've got about $57,000. Almost 60% of the way to my goal. In a perfect world, I'd have this much by January 2010, but for those who don't know what happens when you plan for something, consider a line from one of my favorite poems:

"The best-laid schemes o' mice an 'men
Gang aft agley,
An'lea'e us nought but grief an' pain,
For promis'd joy!

Summer Spending

During summer it's more difficult to be frugal, no? For me it seems that way. One of those reasons is travel. I'm going on vacation in August. The travel and lodging will actually be just about free, even though I am traveling internationally. But, I have to buy some stuff to bring with me. One of those things is a bathing suit.

I haven't bought one in probably five years plus. Yesterday I went shopping with my friend at an Upper East Side boutique. We had a great time and tried on a million of them. I bought a tiny black one, for a total of $166. I think that price is insane. Earlier in the day I bought another one for only $63. Before this shopping trip, the last suit I bought cost about $80 and I thought that was a lot. And then on top of that I bought $28 flip-flops. Why? Because they were there and I needed some.

The experience was fun, but I keep feeling bad/uneasy about spending so much money on such unimportant things. I don't know how people get into credit card debt for frivolous things. I can understand if there are necessities or a medical emergency, but considering I feel uneasy about spending on something frivolous even though I know I can afford it, I need it and I don't have any debt, I can't imagine buying something like that knowing I didn't have the money in the bank to pay for it.

The trip was also a good case study in "factors that make you spend more $ than you intended to." One, I went with a friend who encouraged me to buy an expensive suit. I knew this was the case going in, but that influence is undeniable. Two, when you are in an expensive store, you will buy expensive things. I could have waited and bought the flip-flops somewhere else for half the price. However, since I was there and needed them I bought them.

At this point my bathing suits and flip flops are costing more than the trip!

Wednesday, July 1, 2009

I spent $50,000. Was it worth it?

I recently made a large purchase. I haven't added up how much it has cost me in total, but I think around $50,000. No, not a new car. I bought a Master's degree.

Whether or not that was a good decision is something I've never really examined in depth. However when I saw the NY Times debate, "What is a Master's degree worth" I thought it might be a good opportunity to do so.

By all financial accounts my Master's has not been worth it (so far).

Opportunity Cost
The year before I started the program full-time (I had been going part-time and working for a while), I earned $107,000, however that included a large payout for vacation time, probably north of $20,000. So the opportunity cost was at least $107,000, not to mention a possible bonus and other perks such as paying for part of my gym and Internet fee (yes, best perks ever).

So, my job was high-paying one with lots of perks. But, I quit. I barely made any money for a whole year.

So opportunity cost = $110,000 (conservatively)

Actual fee = $55,000 (conservatively)

Plus, I paid for part of it in student loans (about $20,000, with an interest rate of 6.8% that started accruing immediately. I paid it off less than a year after I took it out, but I paid interest.

Interest: $1,500 (conservatively)

Life Post-Degree
Why then did I spend all of this money? I had worked and traveled for work, even living bi-coastly, for 11 years. I was burned out. And I was not intellectually challenged at all. I thought I'd make a career switch.

By the time I was done with my degree, I was feeling much less stressed; however, my priorities had changed. I didn't feel like switching careers and taking the inevitable pay cut. I got an offer for another high-paying job in the same field as the one I worked in before. And at that point I had other priorities. After not having a job for a year, I couldn't wait to start saving again, for retirement and for a down payment for an apartment.

So, overall the degree has cost me at least $167,000 and it has landed me in essentially the same place I was before I got it. Would I trade it for $167,000 in cash? I wouldn't. This little exercise has reminded me that there are things more important in life than money. For me, education was one of those things at the time I made the decision.