Credit Score Blues

I checked my credit score today, something I hadn't done since September (spurred on by the NY Times story about dating and credit scores). So annoying!! Because my mortgage took 4 months to get and I applied with several lenders, I have like 3-6 inquiries on my report, which brought down my score a lot. I also (god forbid), opened up a Best Buy credit card and a new Mastercard in May after I moved. The credit scoring algorithm is dumb - too dumb to know that all those inquiries on my report are related to my mortgage. Whatever, I know my score will "recover" at some point, and it's not like it's low -- about 720-750 depending on the bureau. It is ridiculous though that someone who has never missed a payment and pays off their credit card every month has anything other than a perfect score!

Getting Serious about Saving

This year was about spending. A LOT of $. Some of that I feel okay about because it was in theory an investment (in my apt.) or at least I view it as prepayment of rent for the future.  The rest of  my spending I feel a little less okay about. I had many one  time expenses that I don't foresee having to replicate next year. The furniture and services that came along with the apt. purchase (although I would like to hire an electrician to install a ceiling fan), a $2600 wedding gift to my brother, new toys for my latest hobby/passion.

Next year, I want to get a lot more disciplined about saving and investing. While I track my budget diligently, I  realize I don't have a target for savings. I just hired LearnVest to help me develop a financial plan for saving and investing and I told my adviser I can commit to investing $500 a month. That is balanced with the $500 a month I prepay my mortgage. Ideally I would like to save another $500 a month in just straight savings. On top of my 401K which I max out, that would put me in a good place, regardless of bonus.

I am finally getting around to reading Your Money or Your Life, which I know has changed many people's lives. So I'm excited to see how that affects me. Maybe it will make me amp up my plan even more.

Financial Advisor

I am finally checking off a big to do on my financial housekeeping list: I hired a financial planner. I am actually working with LearnVest, which seems like a great value and I love that it's aimed at women.  I am speaking to my adviser for the first time tomorrow and can't wait to get started! I really want help trying to figure out if I should tackle the mortgage or invest, although my mom helpfully pointed out that I can do both at the same time. Again, everything in moderation. It's a hard lesson to learn, as I find I want to do something whole hog or not at all.

Clotheshorse

Lately I have been buying a lot of clothes. The good news is that I haven't been spending a lot of money. I rediscovered a great thrift store, Buffalo Exchange, and for $100 I got about 5 nice shirts. I went back for a second round and spent another $65. In September, I went on an H&M binge which was also a rediscovery, as I hadn't been there in probably a decade. And I bought an expensive jacket on eBay which I got for less than $50. It's nice to treat myself with some new clothes without breaking the bank. I tend to hold onto clothes for years, probably long after I should have gotten rid of them, so I have also been aggressive about purging the old clothes as I get new ones. It's all about balance!

OOC Food Budget

I like to dine out. In NYC, it is normal (work long hours, small apartments) for dining out with friends to be the primary social activity. So I view dining out as my entertainment as well as food budget. I barely spend any money on groceries, but I buy lunch every day (usually a salad for about $7-$8). I make breakfast at work. But I dine out with friends several times a week. Well, it's really starting to add up. I checked out my average Restaurant/Dining Out spend (this includes lunches and any bars/alcohol I buy as well) and it's crept up.

In 2010 I spent an average of $485 a month on this category
In 2011 I spent an average of $511 a month on this category
In 2012 to date I have spent an average of $535 on this category

That is an increase of 5% and 4.7% (if I did that right), so a 10% increase over 2 years.

In 2010 I was probably still paying for my ex along with myself (don't ask), but as a result of ex living with me, we went out to dinner less I think. Anyway, between this year and last year I don't think I go out to dinner more. I think that this is inflation in action. I know food costs have gone up.

Either way, I am going to really try to rein this in this month.

I've been really good in other areas this year, cutting back on clothing, travel and personal care. Of course the expenses relating to the apt. are off the charts.

Oh well. Bon Appetit!

Net Worth Updated

I had no idea how this would be this quarter, based on adding a big new asset and liability (apt and mortgage) and all of the big expenses like the closing costs of about $17 or $18K.  It turns out I'm down about $19K. If I had done this update even last week it would have been even more, but the market has made a nice little jump over the last few days (at least my accounts have recovered a little of their losses). The stock market remains extremely frustrating. I think if I checked my account balances now versus a few years ago, they would pretty much be the same. Which makes me think, why am I holding these stocks? I've owned the same index funds (for the most part) since 2003. 10 years. Of doing NOTHING. Now that I have a mortgage it seems it would be better served putting the money against that. But I do need some liquidity and I guess I keep hoping against hope that someday my account balances will grow.

This net worth update will be a new baseline/normal. My first quarter as a homeowner. So next quarter I will be able to see how much I am saving/any gains I am making. I shouldn't have any big expenses, just continuing to furnish the apt. but that's basically coming out of my paycheck, not savings. I'm putting off any really big projects like the built in bookshelves I've been considering.

So here's to a fun, low-key, low-spend summer.

All Settled

Finally I am fully moved into my new home and have all of my new financial accounts set up. The home buying process took forever i.e. about 4 months. And then getting all of my new accounts set up like the mortgage (it got sold immediately to a new servicer), new credit cards I've opened to purchase home items, new utility accounts, etc. has taken this long. I just now, a month or so into living in my new place, feel like I finally have a handle on it.

Besides home furnishing expenses (I'm not going too crazy, but there's a lot of even small things that I need like garbage pails and area rugs not mention window treatments), I just today saw my electric bill. At my old place, they usually averaged around $30 which is VERY low I know. The new bill is $90. But now I have a dishwasher, central AC and a washer and dryer, so that's the difference. However, I barely have any lights in my new apt yet (everything I want seems like it is on back order) so I wonder if this will go up even more once I actually have some lights at night.

I've decided to make additional $500 a month pre-payments towards principal. I really feel like I want to chop down the mortgage balance ASAP! I have to balance this desire with the need to keep some cash on hand, should I ever need it. Luckily the developer is still making all repairs to my apt. I've already had a plumber here 2x, an appliance repair person and the developer. That's one benefit of buying new. The cost of buying new was the transfer and other taxes. My closing costs were about 17K. Yikes! NYC is crazy with the taxes, as usual.

So far I like being a homeowner, even thought I really feel like I am just renting from the bank. I guess I own about 26% of my apt. at this point. But I hope to own a lot more over the next few years!

Still Waiting

It's May, and I am still trying to close on a condo I had an accepted offer on in early Feb. The mortgage broker I used took my application to a big bank. That bank keeps demanding more and more documents from the condo developer. I also think the mortgage broker has not been on top of it. He certainly hasn't been good about updating me. Meanwhile, I feel like my life is on hold. I haven't given notice to my landlord yet, my house is half packed and I have no idea when I am moving. I found a new mortgage lender and he seems to be a total hustler (in a good way) and I'm hopeful I can close this puppy mid-month and move by the end of the month.

Homebuying Process

So since I spontaneously decided to buy an apartment and had my offer accepted at the end of January, I have been sitting around waiting to get a mortgage. I have a commitment letter from a bank now, but still no closing date. The property appraised last week at the asking price, so everything has been moving along smoothly, it's just been so slooooow. I'm happy though, as I locked in at 4% on my mortgage and a day or so later, rates went up above 4. yay!

I just updated my networth for Q1. I've almost reached by end of Q2 goal already, which is incredible. Of course next quarter my networth might go down, as I will be spending about $18K in closing costs. Ugh, everything in NY is so much more expensive than the rest of the country. However, prices tend to go up more as well in terms of real estate. The broker just put 6 more units identical to mine on the market at $50K more than I paid. No guarantee they will get what they are asking, but if they do in theory the value of my unit just went up by $50K as well.

In reality, I"m not counting on any appreciation in the real estate. I want to pay this puppy off, preferably in 10 years or less. Playing with the mortgage amortization calculators is so fun!

Trying to Save, But Spending

Because I didn't know I was buying an apartment until a few weeks ago, I made some previous financial commitments that are coming due now. First, I booked a trip to Central America. I wasn't sure about this because I just went on a trip in November, but I thought what the heck. So that''s about $2K that I'm paying between January and March. In November I told my brother and his wife that their wedding gift would be tickets to Italy for their honeymoon. I bought those this month. Airfare sucks right now and they are going in the high season -- September. So there goes another almost $3K. I can afford all of this but it is very stressful to spend all this $ now when I am going to have to write an enormous check within the next few months. I already wrote a check last week for 10% of the purchase price.

I've been trying to be good in other ways, including making much more of my food, and now I've stopped drinking for a while, so that will cut down on a lot of my restaurant bill. Not that I drink that much, but it's so expensive at a restaurant.

I am also staring down a lot of costs associated with the apartment on top of the actual cost to buy and close on the place. Movers, a new TV, some new furniture, and then the service costs like someone to install blinds and possibly paint. Hence why I am sitting home on a Saturday night after having just cooked soup and baked cookies with not a drop of wine in sight!

Moving to the darkside

For my whole (adult) life, I've been a renter. Basically, for 15 years. For the last 10 years I've looked at buying an apt. in the NYC area. I've focused on different boroughs (Manhattan, Queens, Brooklyn) states (NJ) and types of places (a place in the Catskills or somewhere rural, or somewhere in the city?). As of last Sunday, I think my loooong search is just about over!

Most of my friends and family are shocked, as they think this came "out of the blue" and while I haven't actively been looking recently, I feel confident in my decision because this apartment has most of the things I've been searching for: a one bedroom plus a little more space in the form of an alcove, low monthly maintenance, no fancy amenities, in a safe, quiet neighborhood with a cool vibe, on a great subway line and close to the subway stop, beautiful hardwood floors and a price that is totally affordable. I am planning to put down a 25% deposit. With the tax abatement, my total monthly spend should be comparable to my rent -- maybe a few hundred more depending on my interest rate on my mortgage, but if I get any kind of mortgage interest deduction, it might be even less than I pay now!

I actually feel relief. Having all that cash just sitting around and not invested was stressful. Now I certainly won't have that problem: I am currently shaking out the couch cushions to try to come up with more $! Actually, I am going to Coinstar today to cash in my change. Buying a condo in Brooklyn/NYC is not for the weak or the poor, that's for sure. The closing costs will probably be about $20K! Oy vey.

AAPL

So in July/August whenever that monstrous dip in the market was, I bought some Apple shares. Only 3 actually. At the time, Apple was down to like $367. Well this week they absolutely rocked earnings and hit an all time high at like $450. Killer money. I wish I had taken my whole freakin portfolio and bought Apple that day this summer. I would be up A LOT. Much more than the stupid buy and hold index funds has done for me over the last 10-15 years that I've been following this "good girl" approach. I am increasingly convinced that buy and hold does not work anymore and the only way to play the market to make any $ is to actively trade. I'm going to keep buying individual stocks like AAPL when they dip and see if I can make $ that way. The only thing is that its in my taxable account, so I want to hold it for a year so I only play long and not short-term capital gains.

Q2 Goal

So reading Budgets Are Sexy today inspired me to set out a goal or challenge for myself. I've decided that I'd like to save $25K by the end of Q2 (end of June). It seems like an aggressive but a doable goal. It's nice to put it down in writing and have a reason to save.

I've been pretty good at the little things this month. Cooking more at home. Stopping my aggressive Oren's habit. But not so good at the big things. A Spanish class. A deposit for a trip in April. Oy vey. I have to get better at cutting out the big things too!

Here We Are Again

At the end of another year! Wow. This year has been very successful personally. I have focused a lot less on my financials this year, but since I've devoted a lot of time to setting up different systems, things kind of run on autopilot now.

I definitely spent more on travel this year than I expected to, but it was so worth it. I'm pretty pleased with how my spending maps to my life priorities, actually.

I am hoping that the new year brings a new job, and new challenges. As well as similar rewards or even more than the type I've been earning.

So far, it looks like 2012 is going to be as busy as 2011 (especially the back half) has been.

Wishing all savers and spenders alike a happy, healthy and prosperous 2012!