Brooklyn Money

Moving to the darkside

2012-02-05T07:25:00.001-08:00

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

2012-01-29T07:30:00.000-08:00

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

2012-01-23T18:27:00.000-08:00

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

2012-01-01T07:57:00.000-08:00

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!

Update

2011-12-07T17:44:00.000-08:00

Wow, this last month has been really crazy. Both financially and otherwise.

First, the IRS audit. My business expense was rejected by the auditor. I found a great, relevant tax course case, and my accountant encouraged me to fight the finding, through the proper channels. This would mean talking to the agent, then his supervisor and if I didn't get anywhere, filing an appeal and then meeting with an agent in person. All of this would have meant I had to write up my findings and basically act as my own lawyer/rep. I was ready. And then life happened. And I realized I had already spent a lot of time on this audit and that my resources would be better spent elsewhere. So I gave up. I paid the $2K to make it go away. Of course I'm not done. I'll probably have to re-file NY taxes for that year, too. In the end, I'm glad that it's over and I do not have to think about this anymore. Also, the IRS agent I spoke to was SOOOO nice. I hated him (of course) until I spoke to him. He actually encouraged me to provide him with the case I had found, but I just kept telling him I did not have time. I think he even offered me an extension.

Second, the market. I have no idea. One day I am poor, the next I'm back up to where I started. All of this up and down just means that I net out about even from what I can tell, not really making or losing money.

Third, job. I've decided that I am very bored at my job. I am getting pretty far along interviewing for a new one, so we'll see.

Fourth, it's that time of year. With any luck by the end of this month I will be in possession of a bonus check. Considering how lean but successful we were this year everyone is expecting a bigger one than last year, so we'll see. Crossing fingers.

Market Recovery

2011-10-29T13:26:00.001-07:00

So this week was really helpful in regaining some of the paper losses I've suffered in my taxable and retirement accounts over the last few months. My taxable account is only a few thousand short of the highest balance I've ever had. Woo -- hoo!

Audit Results

2011-10-29T13:12:00.001-07:00

So today I came home to another fat package from the IRS (why so many papers always from them?). This one I was eagerly anticipating. It was their response to my response to their totally ridiculous audit. The main point of their audit was totally unfounded, which was validated by the fact that in their response to me they did not even MENTION the initial reason why they supposedly audited me and just focused on my business expense deduction which they did not allow. They also assessed a penalty of 20% and charged back interest. Overall, it was about 2K additional tax. At this point I am so over it and am just going to pay the stupid 2K and move on. One would hope they would be over it at this point too, but they also included a handy little form asking me to extend the statue of limitations on the tax year in question which should expire April 1 until June 30th. I don't plan on signing this, but I'm consulting my accountant on the question.

The only redeeming factor to this whole nightmare was that I uncovered a mistake in my favor, which lessened the amount of additional tax that I have to pay.

Shedding Those Pesky Zeros from Bank Acct. Balance

2011-10-02T17:07:00.000-07:00

The title of my post is pretty much how I feel these days. I'm due to write up my quarterly net worth statement and I am less than excited to do so. This is the first quarter I will have lost money in years. Cést la vie I suppose. Not like I've been doing much saving on my own to make up for my market losses. I feel like if the market is going to wipe out all of my savings, I might as well have some fun with what $ I do have! Next quarter should be better, because as of October 1, I have paid all of my social security tax for the year. That means an automatic raise of several hundred dollars during Q4. And we are inching towards bonus time (thank the gods).

I feel I have made some progress on fighting back the other force of evil trying to suck $ from me, the IRS. I put together a kick ass package for my audit, and there is no reason that I should not be receiving a check for overpayment from the IRS. I actually discovered that I double reported my dividends for the year in question, so I should get back a few hundred dollars. If they do not accept my business expense explication I will so appeal that finding. There is no reason for them not to, but with the government coffers running low I'm sure they are tasked with sucking every last penny they can from the populace. I'm going to fight for my rights and not let them intimidate me.

More Ugh

2011-09-10T13:41:00.000-07:00

I have been having a bit of a pity party for the last week, ever since I came home to a big fat package from the IRS saying that they were looking at my 2008 tax return. This is highly annoying because the reason they say they are looking at my return is absolutely ridiculous and totally does not apply to my situation (they think I have been paid by a foreign embassy). But, in the process I am now going to have to defend my deductions (it's really just one big one) and there is the chance that I could lose. In which case I could have to pay interest in addition to the tax owed, and who knows maybe even penalties for good measure. Not to mention the annoyance of having to gather all of the paperwork required for this. And consulting an accountant who is VERY expensive. This whole ordeal could cost me $5k or god forbid more. Which on top of the 15K or so I have lost in the market eats up a lot of my savings for I guess the last two quarters or so.

I feel so wronged by the financial gods. I save, I invest, I plan and then the market dives, the banks don't pay any interest and now the IRS is harping on me.

Well, if I do end up paying a big tax bill, I will simply have to scale back. I was contemplating another trip in November, so I'll kill that idea. I was also thinking about having a cosmetic procedure done (judge away, I don't mind -- it's non-invasive and totally unneccesary but I want it). You know -- that whole stimulating the economy thing. But if the IRS wants to claw back my $, then the US government will have to find another consumer to do some shopping.

More Ugh

2011-08-20T12:25:00.000-07:00

My taxable account has reached an unpleasant low today. The balance hasn't been this low since October of 2010. So almost a year of growth wiped out in a week or so. This market really requires a stomach of iron.

One thing that hasn't crashed and seems to be moving along nicely is my Lending Club account. Making me think I should invest more in there and lower my stock positions even more. I'm already like 60/40 investments/cash. Maybe I'll start taking more of the investment money and put it into loans. I like the idea of investing in people.

O-M-G

2011-08-14T11:38:00.000-07:00

Everything was moving along nicely. My balances kept increasing. My savings were paying off. We all know what happened to that story this week. Ugh. I've lost on paper about 20K. Which is better than the start of the week when it was more like 30K. Of course, I'll just be patient and wait it out and hope that my balances reach what they were in July again at some point. I'm just getting tired of waiting. My taxable account is filled with index funds that I bought in 2003. I'm starting to doubt the buy and hold strategy. It's been 8 years, and I don't feel like there's any consistent growth. There are some points when the market is high, but I don't have a lot of confidence that this money will consistently keep growing. I'm tiring of hearing the financial advisers dole out advice to buy and hold. I am a disciplined, patient investor. I would never sell when low. But I'm starting to think of putting parameters in place. Stop losses and gains. So that my shares automatically sell when they've risen a certain amount. 10%? 15% Of course that incurs transaction fees and then there is the challenge of trying to find places to put the money once I sell. We'll see.

I had such confidence that I would finish the year (pre-bonus) with a net worth of 400K. I got complacent, forgetting the market can nose dive at any minute and wipe out months if not longer of growth.

Cash Money$

2011-07-23T07:54:00.000-07:00

As I mentioned, I have a fairly large cash position. While the financial planner made me feel less guilty about not having it invested (he told me there will be volatility soon so it's ok to have a lot of cash on hand), I did want to earn something on it. Again from Get Rich Slowly readers, I learned about the Ally 5k-year CD. The best part about it is you only lose 2 months of interest if you pull your money early. I opened one big one, and now I plan to open several smaller ones. Opening several smaller ones is helpful because if I do have to pull some money, I'll lose less interest. That was another idea from a blog commenter. Yay for learning from others!

Know Your Stuff

2011-07-23T07:49:00.000-07:00

I have been going through the process of cataloging my possessions for a while now. I read about a great tool in the comments on Get Rich Slowly. It's a website called knowyourstuff.org It's great. It gives you a place to catalog and document (with receipts, images) your stuff. Obviously this will be great in the case of a fire or another catastrophe. I entered most of my stuff and even looked up the original prices from my credit card records for a lot of them. Like my wardrobe, a lot of my furniture is hand me downs, including:
My Television
My coffee table and side table
My kitchen table
My bookcase
My lamp (my mom bought it for me when I was young)

Except for my fancy bedroom furniture that I bought last year, the rest of it is mostly Ikea or of equal cost and quality. I do like most of it, so it doesn't really bother me. My couch is too big for my living room, but it is soooo comfy I refuse to give it up. At least not yet.

Money Stress

2011-07-23T07:44:00.000-07:00

I don't normally feel stressed about money. Mostly because I have designed my life's expenses to be way lower than my income. So I have a big cushion every month. This month that's not the case. I have so many obligations -- birthdays, weddings, etc. that I am spending a lot of money. I think it is bothering me because I feel like it is out of my control. Not that I resent my friends for the money I've spent, but I feel like I should be making cuts in other areas to compensate and I am finding that very hard to do. This is making me feel more empathy for those people who don't have a large cushion and feel like their expenses pile up each month out of control. Of course, in reality, I do have control. I don't have to attend all of these weddings and birthday parties. Or I don't have to be so generous with my gifts. But the fact if that I want to do these things, so I just have to give myself permission to spend more this month, and not stress about it because these are one time events. Here's to a more frugal (hopefully) August.

Trading Places

2011-06-14T19:22:00.000-07:00

So I have an unusual relationship with my friends and clothes, I think. For example, last Friday, my friend and I were meeting another friend at happy hour. I went to my friend's place to pick her up to go to the happy hour. My skirt, which I haven't worn since last summer, was bothering me. The elastic was stretched -- it didn't fit anymore. My friend whose place I was going to quit smoking and has outgrown her clothes. She had a big bag of her old clothes for me to sort through. When I got to her place, I gave her my skirt and she rummaged through the bag to find something for me, and she did. So I went to the happy hour wearing her old skirt. At the happy hour, my other friend gave me a purse that she'd bought at a garage sale because she knew that I'd been looking for a black one for a long time. So that night, I got a new skirt and a new purse for free.

When I go through my closet, a lot of my clothes are hand me downs from my friends. Sometimes it drives me crazy because I feel like I want my own clothes. Other times, it's nice to shop for free and I can't think of anything greener than swapping clothes instead of buying new ones.

First Visit With a Financial Planner

2011-05-07T07:13:00.000-07:00

Last month I took advantage of the library's free session with a financial planner. It was valuable, but did not go exactly as I had planned. I had prepared (of course) in advance an overview of my investments. I thought it was very organized. I arranged all my investments by category (small cap, large cap, etc.) and calculated the % of my portfolio in each. Well when the adviser saw my spreadsheet, his eyes glazed over and he told me it was too hard to understand. He thought I had too many accounts and too many investments. So we spent the whole time talking about how I could consolidate accounts. To me this seems like just an organizational thing, not really something that's going to affect my return. I had hoped we could talk about asset allocation. But we never really got around to that.

I have followed his advice and consolidated some accounts. I combined an old SEP IRA into a rollover IRA. I also rolled over my old 401K into my existing Rollover IRA prior to the meeting. Finally, I moved a small taxable account from one brokerage into the larger taxable account at my other brokerage. I closed a savings account too. As a result, I have 4 fewer accounts than before.

I am contemplating whether I want to pay for some time with this or another adviser.

The one piece of advice that he did give me was that he thought there would be some volatility soon, so I don't feel guilty about having a large cash position. I'll probably invest it on the next dip.

The Great TV Experiment

2011-05-07T07:10:00.000-07:00

So I think I've mentioned that I have an old school CRT television. I have lately been thinking about whether I should upgrade and also how I can cut my annoying cable bill, since I basically just watch reruns of a few shows. I decided to buy a Roku box. I just set it up. It is so cute and small and super easy to install. I also installed a wireless router. I love that I can use Roku with my current old TV. I feel guilty getting rid of a TV that works perfectly well for no reason. It's wasteful.
Now I can keep my old TV, but jump into the 21st century w/ Roku. I'm going to get the Netflix on demand and Hulu Plus accounts and see if I can just live off that for TV. If I can, it's bye-bye cable!
I'll still have to pay for an Internet connection, but I'm hoping I can cut the bill down at least in half from about $100 now to $50.

Networth

2011-04-03T14:42:00.000-07:00

I updated my NetworthIQ entry for Q1. Things look really good. I almost hate saying that because I don't want to jinx it! But basically since I started to be so super organized with my finances in 2008 (after finishing grad school), I've managed to put away a good chunk of money each quarter. So I guess I can be less superstitious because really it's about hard work, the boring day in and day out of making good financial decisions and staying on top of myself to stay organized and on course. I think anyone who manages to save any money at all should take time to feel proud of themselves, because we all know, it's not easy. Most people don't manage to do it at all.

You know you think about personal finance too much when . . .

2011-04-03T14:41:00.000-07:00

You are reading a very engaging novel and the main character mentions that he wishes he had more money, and you later think to yourself about how he shouldn't go out to eat so often!

Leakage

2011-03-12T15:45:00.000-08:00

Leakage sounds kind of gross, right? It is an annoying concept. Phone companies use it to describe calls that are routed through their networks that they don't end up charging customers for. Kind of like falling through the cracks. I started to realize that I've found some of those charges in my financial life. I'm now in the process of trying to fix them. Examples:

Old tickets -- I have a bus ticket from October that I never used. I have to try to get it as a credit. This is either $50 or $100.
401K fees -- Thanks to Mint.com, I've realized how much my old plan provider is charging me. I'm in the process of rolling it over to my existing IRA.
$ in FSA -- I think the deadline is about up on this. It's only $13, but still. It's my money!
Library fines -- Luckily I don't let these get too high, but I still end up paying some (less than $5 usually)
Health care -- I've made some mistakes here. First, I've been paying more than I need to for my scripts by not using mail order. Sent in the form for my one drug, so that should change soon.
Also, I bought my contacts through my doctor, who does not accept my discount plan. Finally, when I got said contacts, I ruined two pairs by leaving them sitting for weeks (they were all folded up and I couldn't undo them without tearing them).
Financial fees -- This category is pretty low, but I recently paid $10 because my National Grid bill did not get paid last month because in the process of closing my Chase account for charging me fees, the bill slipped through the cracks.
$ in non-interest bearing accounts -- Right now, I've got a lot of this. I'm in the process of trying to re-evaluate my asset allocation and make new investments, to ensure that my money is working for me.

When I add all of these up, I bet they come to a few hundred dollars. Oy vey. I'm happy to have identified them and have started fixing at least some of them.

Kicking it 1990s Style

2011-02-06T14:54:00.000-08:00

So if a thief walked into my apartment looking to score some sweet electronics, I think they would be highly disappointed. First, they would be daunted by the massive CRT television sitting on my little wooden stand. Who still has those and how could I possibly get that down 4 flights of stairs, the thief might ask, reflecting on how s/he probably has a better TV at home. Sure, I have a laptop. It's actually an expensive one. I didn't know any better and asked my IT guy when I left my job to freelance/go to grad school what kind I should get. So I've got an IBM T60 that costs $1K. Pretty sure it's the most expensive thing in my apartment. But, it's old, as far as computers go. I bought it in 2006. It runs Microsoft Office 2003. Probably Windows 2003 too, I'm not even sure. The only other electronics are an iPod nano, which I carry with me, so my robber wouldn't be able to access it. My mom got me a nice Bose docking station several years ago, to I have that. I also have a small digital camera that was not very expensive.

Overall, the items that I just named I purchased over a 5 year period and cost a total of about $1500 (the TV was free, as was the Bose sounddock).

This year I am thinking about buying some new gadgets -- currently vacillating between an iPad and a Kindle. I really want an eReader of some type, but then I see how expensive the ebooks are and I lose my enthusiasm. I'm a pretty avid library user, so this would add a new budget line item. Right now I pretty rarely buy books.

I also think about ditching the old CRT for a flat screen, mostly so I could cut the cord on cable and just get HDMI cables to watch shows online on my TV. I'd probably subscribe to Hulu Plus and maybe buy a Roku box. I am tempted, but also kind of waiting for the technology to catch up. Also, something about the experience of putting on the TV and just kind of watching whatever I find is attractive to me.

Whatever I do buy, the prices for TVs and eReaders have come down a lot since they were first introduced, so I'm glad that I've waited.

What I Am Grateful For

2011-01-26T19:09:00.000-08:00

I started reading a new book which could loosely be categorized in the personal finance genre. It is called Peace and Plenty by Sarah Ban Breathnach. I got it because it sounded like a fascinating money story -- she made and lost a fortune. But there's a lot of self-help type advice in it that I thought was cheesy at first, but now I think I find kind of valuable. One concept she talks about is gratitude, and making a list of things that you are grateful for in terms of money. So I thought about it and this is what I came up with:

1. I am grateful I do not own a house -- I never have to worry about some big housing related emergency expense that will cost me thousands of dollars in one go, or about my property taxes going up, or whether the homeless shelter they are opening in my neighborhood is going to bring down the value of my property, or feel like I am trapped and can't move for a dream job, or any other reason, or freak out that I sunk my life savings into an asset that has lost more than 1/2 of it's value.
2. I am grateful that I have low expenses -- I have kept my expenses low which gives me a lot of flexibility. If I want to blow some money on clothes or makeup, etc. each month, I can. I never feel deprived, because I can always treat myself without having to sacrifice savings.
3. I am grateful that I can afford good medical care -- I go to a homeopath/therapist. She is really helping me grow as a person. She is expensive. $200 an hour and I go once a week. Insurance covers part of this, but I spent almost 2K last year on her. But I can afford to. Also, if something horrible happens to me, I have long-term disability insurance so that should give me some financial resources.
4. I am grateful that I can afford to travel. I keep praying that the value of the dollar holds up so I can continue to travel internationally. I have seen how challenging it can be for people of developing countries to travel outside their country, even if they are middle or upper middle class, just because of the currency.
5. I am grateful that I had a good example of how to save. My grandmother is a saver, probably more on the stingy side actually, and my mom is a saver. It's like a religion. I was born into it and never questioned it. I'm happy that's my DNA and not to overspend.

I am grateful that I have a lot to be grateful for!

Where to Invest?

2011-01-17T08:14:00.000-08:00

I think this question is on a lot of people's minds. It is definitely on mine. Between my bonus and then a CD that comes due in March, I have to find a place to park a decent amount of money. I am not sure where to put it. I don't want to earn minimal returns that most of the no-risk places like CDs are throwing off right now, but at the same time I don't think I want to dump the money into the market. Stocks are so volatile right now, and I keep hearing that interest rates are going to rise and bond prices go down.

One "alternative" investment that I have begun is Lending Club. So far only a few thousand dollars, but I like what I've seen. The one thing I don't like is that the terms are so long. I think like 3-5 years. Would probably be better for a 401K investment.

The other thing that I've really been meaning to do is diversify by currency. I've checked out Everbank products, but they seem kind of risky.

This will be an ongoing question I try to answer over the next few months.

2010 Spending Analysis

2011-01-09T07:53:00.000-08:00

I'm home sick all weekend with a cold, so it's a perfect time to play around with numbers to fend off boredom. Yesterday I sliced & diced my gross income last year to see where it went. It's roughly what I've always thought it is: 1/3 to taxes, 1/3 to savings and 1/3 to spending. This made me feel happy because I live on such a small part of my salary, that if i ever have to get a lower paying job, I can still survive. I could easily cut my spending probably almost in half too, just by moving in with a roommate. Anyway, I made this nice little pie graph to visually represent where all my money went last year:

Portfolio Analyzer Fidelity Full View

2011-01-01T16:43:00.001-08:00

I finally found a good tool to analyze all of my holdings across different accounts. And it was totally automatic, which was nice. It's the Fidelity Full View tool. It added my investment accounts automatically and now I can see my holdings across all accounts. I was surprised, I have less than 50% American stocks. When I add one other investment account, it will be even less, because those are LatAm bonds & stocks. I just read an article in Fortune saying that most people probably need even more foreign stocks than they have, so I guess this is okay. I'm just not feeling very bullish about the US market, even though I have nothing to complain about with the market's performance this year!

Good Fortune

2010-12-22T17:25:00.000-08:00

I don't have much to report, except that as the year comes to a close, I am grateful for the good fortune I've had this year. I almost hate to even write about it, because I don't want to jinx myself. I do have to take a moment to say I think I will be very excited to do my networth update Jan 1. At the same time, I watched A Christmas Carol last night, as I did last year as well. And while having savings is important, it is a good reminder to live too.

Changing Expenses for Next Year

2010-11-21T09:52:00.000-08:00

So just as I was feeling all smug about keeping my ongoing expenses down, my benefits changed at work (or will change as of Jan 1). Overall, the new benefits are much better than the old. I am truly grateful to my company, as they are adding long-term disability as a benefit! Something I pay $1400 for a year right now. Of course I'll have to buy a small supplemental policy, but it should shave like $100 off my monthly costs. So that's great.

The insurance is also a much stronger plan, except of course in my case because my therapist is out of network. If she were in-network, this plan would be a dream. But since she's not there is a HIGH (2K) deductible and the worst part is that the initial plan year is only 5 months. So to continue seeing my same therapist I am going to have to bite the bullet. It's going to cost me $2300 for the first five months of the year, and that's for only 3 visits a month.

That said, I can still afford it, and to me, it's worth it, although it is a steep price. I am going to use that time to really work hard and hopefully not need as much therapy, but also to find an in-network therapist that I can switch to in June.

I will take advantage of the FSA, so at least I will be paying this big bill in pre-tax dollars.

I will have a ton of deductions from my paycheck:
401K
Transit Reimbursement
FSA

That will over all help to lower my tax bill, and hopefully I will barely pay anything for health expenses in post-tax dollars.

One Time Versus Ongoing Expenses

2010-11-12T19:00:00.000-08:00

So I've been talking about how all year I've been spending a lot of money. Or what for me feels like a lot. But I realized, as I contemplated buying another pricey item, there is one thing that saves me from overspending. And that is that these expenses (except for my health care expenses) are one-time expenses. So my friends who pay $600 more a month than I do in rent pay that every month. That's a total of $7,200 a year. That's two sets of furniture, or a whole lot of clothes. Or two vacations. The good thing about one time expenses is you pay up front and then get to use the items/service. So you don't have to continue paying, even though you might continue consuming them. Like with clothing. Or furniture. So while these items depreciate, at least you only have to pay for them once.

General Update

2010-10-22T18:41:00.000-07:00

So I usually only update my NetworthIQ on a quarterly basis. I just did Q3 at the end of September. That said, I just updated it again. I can't believe how much the market has gone up this month. So much for sell in May and go away. I'm just so glad that I never took any money (barely) out of the market after September 2008. I've been fully in (while also building my cash position) the whole time, which has allowed me to recover A LOT of the value that I lost two years ago (on paper). I also wanted to update my NetworthIQ so (I am ashamed to admit this) I could resume the top position on the page that ranks networth in NY (I'm on the top of the 5th page). I am really motivated by moving up the list. I do not know why. I wish those other people success, but I guess it's just nice to have a visual way to be rewarded for saving more. Since it's not like anything really changes in my life when I save more money.

I'm also excited to try some new investing strategies. I'm going to open up a Lending Club account. I have also meant to buy some foreign currencies (being all-in on the dollar scares me) and maybe some gold. I'd like to buy shares in a REIT, but that's a little more complicated. I also think about buying some GLD. The last time I thought about this it was at 1K and today I saw it's at 1,300. Insane.

Networth

2010-10-02T17:30:00.000-07:00

I'm stoked cause I just updated my Networth and passed a few people on NetworthIQ. Not that I don't wish them much prosperity and hapiness! But for some reason, I always focus on the people that are a few in front of me and it helps motivate me. I guess we have to use whatever works to motivate us to save!

Although this quarter was really strong due to the market, my savings were really low compared to every other quarter of the year so far. So, I'm going to try to be good in October. Although of course I have some "expenses"coming up. Such as Billy Elliot on Broadway, haha. Luckily all done with social security tax, so that gives me a big boost and this year it's for all of Q4. I also have probably close to $1,000 or more owed to me from my health insurance company. I'm always out of pocket about $1500 because I pay the doctor and they pay me back.

Boring, But Good

2010-09-12T18:10:00.000-07:00

I realized reading over my posts that this blog is probably boring, haha. Lately all I talk about is spending. My goal for the blog is really for myself -- I think of it as an online money diary, but if other people read it and can relate or find any value, all the better. But I also realized that when things are on track financially, money management can be kind of boring. I'm not making any major investments, purchases (just some furniture), or having any big life transitions, so it's just nose to the grindstone, trying to meet my current needs and save for the future. I guess it's a nice place to be, as I'm not stressing about debt or worrying about having enough to meet my current needs. There is always the underlying worry about having enough to retire, but it seems difficult to do much more about that than I already am.

spending, spending, spending

2010-08-15T17:05:00.000-07:00

So I am in the process of buying a bed from Craigslist, and I am also taking a short trip this month. This means I'll barely be saving anything. It's stressing me out a bit. Or at least is weighing on my mind. I'm going to try to cut back in other areas. I saw a vase for $300 that I was about to buy and then realized that I probably should not. Same with a pair of shoes for $120. I guess I will just delay.

My most favorite time of the year

2010-08-07T17:54:00.000-07:00

. . . is approaching. It's a time when my income increases. First, just like last year, I got a credit for my gas bill. I should not have to pay a gas bill for several months starting from August. On the income side, I will have paid all of my social security tax probably by the end of next month. So my paychecks in September, October, November and December are bigger than the rest of the year. This year I've been paying $756 a month in SS tax. That is an enormous amount of $ to have added to a paycheck. This is like Christmas, Easter and my birthday all wrapped into one. And then the best part of all (hopefully) is getting our bonus paid in December. Our business seems to be doing okay this year, so hopefully it will be comparable to last year's.

Midyear Budget Update

2010-08-07T17:36:00.000-07:00

I've gotten around to doing my midyear budget update. The most interesting thing is to compare it to last year.

Luckily, I'm about $16,500 ahead this year. The big difference is school. No more school loans! That does not, however, include the cost of my new furniture ($4,000) and the new healthcare costs (still figuring out how much I'm actually going to end up paying).

This is where I am ahead of last year:
Rent (slightly less; I paid more the first few months of last year)
Groceries
Phone (no phone bill; saved about $500 so far this year)
Charity (this expense will even out in the end)
Gifts and Entertainment
and slightly ahead in Personal Care, Fees, Restaurants (miraculously)

I have spent thousands more this year so far on Travel and Clothing. Clothing is catchup spending from years of not buying anything. Travel might end up being not too far ahead, as I took my big trip earlier in the year this year than last. Of course I'm tempted to take another big trip this year, but have been fighting myself on this. Am planning a mini-break to Montreal later this month with my friend, so that has to be my last getaway for this year if I want to keep my travel costs reasonable.

Overall, I have so much more wiggle room without the massive school bill that even my $4,000 furniture does not make a substantial difference. School debt sucks.

Money in, Money out

2010-08-01T14:11:00.000-07:00

I was going to do my midyear budget update, so I can compare it against last year's and try to make myself feel like I'm not reeaally spending so much more this year, haha. However, I realized its hard to keep track of my expenses right now. I still download my Mint transactions every month and categorize them in an Excel grid. But even in my not very active balance sheet there are certain expenses that make things more complicated. These fall into a few categories:
1. Work-reimbursed expenses: I always have $ outstanding that work owes me. Usually at least a few thousand dollars.
2. Health care: This year this is complicated. I pay for my care, and then for $1250 worth, my company reimburses me. For $1,000, it comes from my FSA. Also, right now I've got a $600 claim that just got denied. I have to call on Monday and figure out why they are not covering it. I think I needed preapproval (despite being told I didnt), so that could be a very costly mistake.
3. New furniture: Right now this is an off-balance sheet expense. I'm just recording my monthly minimum payments of $42. For same reason I am carrying this on a card for six months, I don't want to put it on the balance sheet!

Next week I should have a better understanding of what part of healthcare is still outstanding and in two weeks I should get a new expense report. Of course I already have work travel between then, so I'll rack up more expenses.

Overall, I know that I've spent a lot more on clothes, health care, furniture (4,000 more!) and possibly travel than last year. But I think my quality of life is better and I'm feeling more balanced.

Net Worth

2010-07-05T18:42:00.000-07:00

So I did my quarterly net worth update. It's not pretty. I feel like saying, "But it's not my fault!"Because I saved a bunch of cash, but my investments dropped a lot. So in the end, I ended up 6K higher than last quarter. That's a lot of $, I know, but not compared to the amount that I usually saved. Oh well, onwards and hopefully upwards. I will focus on being grateful for what I have and have managed to save so far.

Can't get enough of high interest checking

2010-06-12T19:00:00.000-07:00

So I have some extra cash sitting around. Right now, it is not earning any interest. While inflation is low, it is still slowly losing its value by not earning interest or returns. I did put some of the extra cash in my IRA, but I'm maxed out for last year and this year for contributions. So I can't stash any more there. I wish I could of course. I also want to keep this liquid and don't really have the stomach to invest it in the market. So I came up with a solution. I already have a high interest checking account through one bank. I earn I think 3.26% on up to 25K. So I found another institution that is offering this type of account where you don't have to be a resident of that bank's state. That's pretty rare, as most of these are limited to residents of the bank's state. I just opened the account on Friday. Now I will gather up my spare cash and deposit it in the account. Then I'll get one of my direct deposits switched to this account. I'll sign up for estatements (of course) and then all I have to do is make 12 signature transactions a month. I already have to make 10 for my other card. That's a lot of transactions. But I'll basically stop using my credit cards and just use these bank cards for all purchases. I try to charge everything anyway so I can keep track of all purchases, so I'm optimistic that I'll earn the interest each month.

Spending all my money

2010-06-12T18:53:00.000-07:00

When I first started writing (i think about a year ago now) I never would have envisioned that I would be writing about all the big purchases I am making! That said, I am happy to be doing so. Today I bought bedroom furniture. As the man put it in the store, "big girl furniture."I am so happy that I did so. I've never bought furniture. I have a bed w/out a headboard, a hand me down dresser that I dragged out of my grandmom's attic, an Ikea night stand from college and some sort of canvas tent contraption for an armoire. I've had all of these items since the beginning of time.
So, I'm happy that I was able to buy something nice for myself and that I don't feel guilty about spending the money.

That said, I tried to look for pieces of Craigslist, but got tired of waiting for the specific ones I wanted to come up. So full-price it is. I did open a store credit card and have six months with minimum payments at zero percent interest. I vaguely remember reading that these types of deals are bad for your credit score as they are counted as a cash advance or some such thing, but frankly I don't care. My score is in the 800s. Even if it goes down 100 points, I'll still be fine.

Outstanding Money

2010-06-06T16:37:00.000-07:00

Ugh, lately I am a little stressed by all of the money that various parties owe me. The total adds up to more than $6,000 and trying to get paid takes a decent amount of effort and is highly annoying.

First, I have a $4,300 expense report that I need to submit on Monday. I should get paid for that mid-month and I've already compiled the report and the documentation, which is tedious work.

I have another $1,800 and growing outstanding from my health insurance company. It's actually from my company, but I need my insurance company to file the claims first before I can submit. That has been going on since the end of March and all I've managed to get through the system is $200. No clear end in sight on that one and a new $200 piles up every week.

The last one is smaller -- $620. But it annoys me. I lent a friend, for the second time, this money to cover her rent because she had a cash flow problem. She was supposed to pay me back, I think it was like May 25th. She claimed the check was in the mail. It is not and now am I wondering when or if I will see that money again. Ugh.

All of the outstanding money has made my expenses a mess and hard to reconcile, so for the first time in years I haven't analyzed my May spending. It's all too depressing and hard to track.

It's odd to feel stressed about this money, as I don't need it to live on and I am confident I will get it all back eventually. The majority I will have by mid month. But having so much outstanding is stressful anyway.

The year of spending

2010-05-23T19:20:00.001-07:00

So when the year first started, I thought it would be like last year. Meaning I would try to save every penny I could. But with school paid off and having a full time job, I'm realizing that I've been living in a state of sort of suspended animation for so long. I feel like I need so many things: new clothes, furniture, art, things to organize my apartment. It feels uncomfortable to spend the money, but its gotten to the point where it feels more uncomfortable to not purchase these things. It's not that I'm spending wastefully, it's just that spending at all feels a little foreign. I am of course still saving, but I'm realizing that I need some balance and maybe to do a little more living and a little less saving.

The good thing is that I don't feel some insatiable desire to spend. I don't have to worry that when I start spending I'll never stop. For example: I needed a new gym bag. So I found a cute one on etsy from a woman in Malaysia. It was only $50. So I bought it. It works pretty well (a little small), and now I never think about buying a new bag. Once I have what I need, I'm set.

I'm not as concerned about meeting my (aggressive) savings goal that I laid out at the start of the year. It feels nice to just live and see where things take me.

Spending Comfort Levels

2010-04-19T18:57:00.000-07:00

This weekend I went to brunch and then shopping with two friends. These two friends have shall we say a well-developed appreciation for the finer things in life. They think I am a total cheapskate. So we were strolling through Nolita and I saw a beautiful bag that I decided I wanted. It cost $400. To me, that number is ridiculous. But, I wanted the bag and could justify it because I knew I was getting a big tax refund this month. So I bought it. But it just did not feel right. Mostly because I thought it was too nice to really use. I would worry about ruining it and it would be impractical. So the next day I returned the bag. I did get a smaller, more practical bag that cost less (I was too scared to look at the actual price, but it started with a 2 and not a 4, but closer to a 3). And I got a pair of shorts. So I spent about the same, but on two items. This felt much better. I just thought it was funny that I felt almost physically uncomfortable spending so much money on a bag. I know my friends that I was with never have that problem. That said, it's good to splurge every once in a while, as long as its not on credit.

Losses and Gains

2010-04-13T20:13:00.000-07:00

So I finally just finished my taxes. After a gruelling search for the cost basis for a mutual fund I sold that I'd bought in 1998. The good news is that I found it. The bad news is that I sold the fund at 1/2 price. And i held $10,000 of it. So I had $6,000 in recognized losses this year. Ugh. The good news is that I am now getting a tax refund, whereas without these losses I would not be. Also, I have $3K to carryover to next year! I guess that is also a good thing, in a way. What would be better is if I could make better investment decisions and pay more attention to my investments. But I guess I shouldn't be too hard on myself since 2008 was killer for everyone.

Can't spend enough

2010-04-01T17:56:00.000-07:00

There's one thing that I think it's more than okay to spend on. In fact, I can't spend enough on this! It's my health. Okay, that's how I wish I felt. Sadly, I sometimes delay health spending that I need (not critical, but still). That has backfired in the past. In grad school (sans dental insurance) I waited a year to get my teeth cleaned. For most people, probably not a big deal. For me, I knew it could be bad. And it was. I eventually had pain and was then forced to go get a cleaning. However, because I had waited there was so much plaque they had to do it in two visits, hence costing double the normal amount.

So I realized finally hey, I have health and dental insurance. That is a luxury in many parts of the world. I should take advantage of this. So I'm going to the dentist, eye doctor, a therapist (mental health is important too), possibly the acupuncturist and the orthodontist. This in reality shouldn't cost too much, due to my insurance. However, the orthodontist could be a couple of hundred dollars and the therapist could be several hundred dollars a month. I'm forcing myself to spend this money, because there is nothing more important to spend on. This is what my FSA is for, so it's nice to know it will be tax-free money at least. Now I wish I had dumped more in there.

Wiser Bloggers Than Me

2010-03-14T19:24:00.000-07:00

Have already outlined the costs of owing a dog. I think Lazy Man is in Silicon Valley, so his costs are probably not that much less than in Brooklyn.

Purposely Making a Bad $ Decision

2010-03-14T09:34:00.001-07:00

Have you ever done this? I was about to write that I have not, but then I think back and that's how grad school was for me. I more than wanted to go, I needed to go. I was never under the delusion that I was going to earn more money by doing so. I knew I would be spending $50,000 for something that would not get me a monetary return. If I had instead bought an apartment and continued to work full time at my previous job, I would be financially better off, most likely. Even though the value of that apartment would have gone down by now, I think I'd still have some equity. I was going to buy in 2003, so during the craziness but pretty close to the start of it. My area of Brooklyn has gone up so much from the bubble, but also from gentrification, since then.

Anyway, I'm contemplating making another bad financial decision. I want to adopt a dog from my local shelter. Not just any dog, but a boxer, on the wrong side of 5 years old. I don't know dog years, but I'd guess he's in middle age or older. (He doesn't seem it and has no gray yet). What does this mean financially? Huuuuge expenses. Expenses just for being a dog, but then for being a dog in the city, being an older dog and being a bigger dog.

The costs are daunting. Medical care could be exorbitant. OMG what if he gets cancer, as I read that boxers are more prone to than other breeds? Do I seriously have to pay for dog chemo? I've read pet insurance, especially in urban areas, is hardly worth it. Then there's the daily dog walker and the care for when I have to travel for work. I have no control over my travel, so if it suddenly picks up, I'll be spending $50 a day or so for someone to care for the dog. Oy vey.

That said, I have the money to care for the dog as my life is now. However, my rent is very low and if I wanted to buy an apartment or move to a place actually in Manhattan or somewhere bigger, it might be tight.

I'm continuing to do the research and will come to a conclusion, but I feel like that a dog could add so much to my life that this could be a sound decision, despite the financial costs.

This is so depressing

2010-03-09T19:21:00.000-08:00

Really, ladies? $13,000 on makeup? Granted, it's over a lifetime. But, still.

With that said, one of the things I have to spend money on soon is new makeup. I like eco-friendly, non-tested on animals makeup, mostly MAC, so that prevents me from picking up makeup when I run into the pharmacy for medicine. Quality is better than quantity in this case, and I think it saves me $ in the long run. I only buy makeup like once every 5 years. What do you think ladies? $13,000 seems insanely high to me. Maybe if that figure included hair cutting and coloring. Actually, then it would be low!

Morningstar X-Ray

2010-02-07T08:20:00.000-08:00

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

2010-01-25T19:04:00.001-08:00

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

2010-01-17T08:23:00.001-08:00

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

2009-12-19T03:39:00.000-08:00

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

2009-12-06T11:02:00.000-08:00

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

2009-11-15T18:18:00.000-08:00

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

2009-10-24T05:56:00.000-07:00

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.

School's Out!

2009-10-17T07:08:00.000-07:00

I'm so psyched. This month I paid off my last student debt. This was a credit card debt of about $11,000 that my mom had been carrying for me interest free for I can't even remember how long -- probably 2 years.

So, this year I've paid off about $31,000 in student debt. That's great, especially since I paid very little interest on those loans (the one actual loan was $20K at 6.8% but I only accrued interest on it for about 8 months). What is depressing is realizing that my entire last year's bonus, plus a good chunk of my monthly savings this year went to pay off that debt.

Needless to say, I'm looking forward to starting next year being able to keep every penny that I save! If I don't end up purchasing a house, I'd like to save $2,000 a month post-tax, in addition to maxing out my 401K with pre-tax contributions. That puts me at a savings rate of about 30%. Woo-hoo!

I've got a pyramid going with 1/3 spent post-tax, 1/3 spent on taxes and 1/3 saved. Of course I'm always looking for ways to lower the 2/3 that I don't get to keep and increase the 1/3.

NYC: highest tax burden in US?

2009-10-17T06:58:00.000-07:00

Being a resident of a NYC borough, I pay not only state tax which is relatively high in NY, but I have the privilege of paying a city tax as well. I estimate city tax alone will be about $5,000 off my base salary this year alone. That's great, right?! Okay, there are some benefits of living in what has to be the most heavily taxed area of the country. Namely, the public transportation. I don't have to own a car, pay car insurance or pay for gas because we actually have public transport, unlike other places in America. However, last weekend I started thinking for the first time about how simply moving across the river to NJ would save me $5,000 instantaneously. Not to mention moving to CT where there's no city tax and the state income tax is in the 5%s instead of the 6%s like NJ and NY.

In reality, I wouldn't get $5,000 for moving, because that money right now is deducted from my federal taxes, lowering my overall taxable income. Also, $5,000 pre-tax is a lot less post-tax (I'm in the 28% tax bracket). Plus, I'd have to pay a smidge more to take the bus or the PATH train in addition to the subway.

In the end, I'm guessing I'd only end up saving $3,300 or so. Not that that's anything to sneeze at, but in the end I don't know if its worth the quality of life sacrifice. However, if I could find a nice apartment at $1500 a month I'd save $1,800 annually so with the tax reduction I could save close to $5,000. An extra $416 a month is nothing to sneeze at.

Seriously?

2009-10-05T17:54:00.000-07:00

Okay, the more I research retirement savings the more ridiculous it gets. My favorite is this article on Motley Fool. Check out this handy chart the author has prepared to tell us how much we're supposed to be saving:

our Age	Percentage of Income to Save
20s	10%-15%
30s	15%-20%
40s	20%-30%
50s	30%-40%
60s	40%-50%
70s	50%-60%
80s	Lotto!?

Okay, 10-15% I can see. What 40 year old can save 20-30% of their salary? The author doesn't say, but I assume she means gross salary. Still, most people at that age are raising a family. Their expenses are at their peak. If they started early, they have children in college. This chart is a joke.

There's another article from AP today about how those close to retirement are so off track due to the market crash. This one has yet another metric for retirement savings:

The bottom line is that men will need to have 4 to 6.8 times their annual salary in the bank, separate from Social Security. Women should aim to have 4.5 to 7.5 because they tend to live longer, according to the study.

Overall, I fear these articles just serve to discourage most Americans who have very little in savings without giving any realistic advice about how to save for what we all know will most likely be the biggest expense any of us have.

Retirement Savings: u r doin it rong

2009-10-03T05:38:00.000-07:00

I started doing some research this week on retirement savings. I've been saving at least 6% of my gross salary since I started working about 12 years ago (minus one year in grad school). So I assumed I'd be fine.

What should I be saving?
When I started playing around with the calculators, it seems I am underfunded by about half. My Pudding Score is 52. The more I researched the more I came to believe, however, that there is no real way to tell how much one needs to save to retire. All of the calculators make you make rediculous guesses about expected investment returns and other factors that if you knew you'd be a millionaire from being able to read the future.

I did find a few more simple, logical guidelines. Dave Ramsey says save 15% for retirement. Apparently T.Rowe price says the same thing.

I feel kind of cheated to be learning this now. I had always heard that I should be contributing 6% of my salary to retirement. I think I would have contributed more if I'd had known I'd be "behind" at this point.

Non-Deductible IRA?
I had been planning to max out my 401K contribution this year which takes me to a little more than 10% of my gross saved. There's not really any other tax-advantaged way for me to save, as I don't qualify for a Roth IRA and if I were to contribute to an IRA, it is not tax-deductible. It seemed at first this was still a good deal, but I like how this CNN article describes the advantage. Basically it will only help me if I convert it next year to a Roth IRA. I think I will end up doing that. So even though my stragtegy was to have as much cash as possible for an apartment down payment, I think I'm going to throw an extra $5K into my IRA to take me to both the contribution limit and 15% of my salary saved. Even one of my fave bloggers thinks 15% is high, but since I am apparently sooo behind in my savings, I think I'll do it this year. I've hit my social security taxable income limit, so I should get about an extra $2K to contribute from that.

My Obsession

2009-09-07T06:54:00.000-07:00

Last time I wrote, I had lined up an appointment with a financial adviser to help me sort out an asset allocation for my portfolio -- the taxable and tax-deferred accounts.

Well, the purpose of the taxable account has always been in theory to use as a downpayment for an apartment. However, I've been looking for said apartment since 2003. I flip flop all the time about what I think I want. I've looked at co-ops in Queens for $255,000 and more recently 1 bedrooms in Brooklyn for $540,000 and 2 families for $800,000. And in between pondered buying a place in the country (having looked in the Catskills once and online constantly).

So, combined with my belief that there are no fundamentals underlying this recent market rally, I've started to feel like maybe I should just cash out the taxable account and keep it in cash. Someday hopefully within the next year I might actually decide on buying a place and might need that $ to supplement my cash savings. So I'm starting to think going to see the financial adviser might be pointless since a good chunk of my portfolio could be converted into cash.

I'm sure I'm not the only one who has problems pulling the trigger on the real estate gun. My hemming and hawing has actually served me well. I missed the whole crazy bubble.

For now I have to decide if I have the courage of my convictions and can actually liquidate my whole taxable account.

Spending & Planning

2009-08-23T06:37:00.000-07:00

I just returned from my international vacation. I'm in the process of piecing together the damage. Not too bad, but of course the Euro/dollar exchange rate makes a simple lunch $30. But considering I spent money on almost nothing excepting dining out, it was a relatively inexpensive South of France vacation.

When I returned, I finally outreached to an independent financial adviser. I think it would be great to have professional help in the strategy/planning/asset allocation phase. I think this advice is tax-deductible as well, which is great. I'm going to do a pre-interview on Tuesday with the woman so she can learn more about me and I can find out her rates. I know the standard protocol is supposed to be interviewing several different experts, but I don't know if I'll actually do that if this woman sounds like someone I can trust. Any help is better than the zero advice I'm getting from my ex-boyfriend who is in theory managing my portfolio for me.

Best way to make international purchases

2009-08-05T18:25:00.000-07:00

I'm trying to determine this right now. I called two of my credit card companies and they both charge a 3% fee and a mystery exchange rate. To withdraw funds from a non-US ATM, there is a $3.00 charge. I'll probably go to the bank before I go and buy some Euros here, so at least some of my purchases won't have a surcharge. I hate this. Any method feels so non-transparent.

Midyear Budget Update

2009-08-01T10:08:00.000-07:00

Each month I scrub the data from Mint.com (Best personal finance tool ever and it's free!) and I enter it into an Excel spreadsheet. Above is what I've spent so far. It's probably pretty difficult to see. I'm going to upload a Word doc version at some point in the future.
Overall, I'm on track. The big standout is the Education category because I had budget of $200 a month, but I made large payments in the early part of the year so my loan is fully paid off. Yay!

In terms of day to day living, there are some areas I'm on track to run over:

Clothing -- I budget the absolute bare minimum. However, as much as I hate buying them, I did need some clothes. Especially because my pants seem to be getting tighter, sadly. And as I mentioned I bought an expensive bathing suit. I'm fine with running over on this. These are items I needed.
Charity -- My day-day Charity budget for the year is $500, but I plan to give $1,000 total, so the fact that I'm running higher is fine.
Fees -- I pride myself on not paying ATM fees, so I budget $0 for this category, however I forgot I have two airline mile cards with annual fees. I don't really have a choice. I need to use miles and I can't cancel these or it will affect my credit score negatively.
Personal Care -- When I budgeted I was really strict and assumed I would by dying my own hair. Hasn't worked out that way. I only feel confident enough to do it myself occasionally and end up going to a salon. I also got a few massages when I was training for my race, because I needed them and they felt good!
Misc. -- Each month I spend about $300 in cash that I don't track. I'm trying to get better about saving receipts for cash purchases. The problem is that they are always such small amounts that it's hard to keep track of them.

Now, the good area. Health care. When I made this budget, I set a limit of $1,000 a year for my health care expenses. However, this budget tracks my post-tax spending. I forgot my health care costs are pre-tax. I put away $1,000 a year in a non-taxable HSA to cover anything not covered by my insurance. Also, I negotiated with my landlord to lower my rent by $150 a month (he is so nice and the market has tanked and I wasn't scared to ask). So as of May, I've been paying $150 less than I budgeted for. That should save me $1,350 this year. Awesome!

Overall, I'm pretty satisfied with where I am. I've been able to keep my restaurant spending under control. I thought I spent more like $500 a month, but I've been really good about keeping it to about $300 a month. Except for March and April. April I was on vacation and ate out a lot so that doesn't count, right? I wish!

Extreme Sports

2009-07-27T18:04:00.001-07:00

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.

it's no coincidance that money is green

2009-07-21T17:31:00.000-07:00

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.

NetworthIQ

2009-07-12T18:50:00.000-07:00

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

2009-07-12T14:15:00.000-07:00

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!

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

2009-07-01T18:39:00.000-07:00

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.

401K Contributions, 1997-2008

2009-06-27T11:53:00.000-07:00

So this week I did not make too much progress on possible portfolio consolidation or asset allocation. However, I feel much better about the fact that my portfolio isn't exactly where I want it to be. One of my favorite PF bloggers, Get Rich Slowly, sounds like he is at the exact same stage that I am! It's a good reminder that personal finance is a process, and there's also something else to learn and do. There's never going to be a moment where I am "done."

Anyway, the other big factor that affects long-term performance besides asset allocation (in addition to time) is savings. I recently took a hard look at exactly how much I have been saving in my 401K over time. I've made a handy chart so I can share what I discovered:

I was a bit shocked that in the middle years the % gross salary contributed was not higher, as I even have a withholding for I filled out requested that 10% of my salary be withheld. The decline that begins around 2003 was due to my idea to buy an apartment; I thought I'd need the money for a downpayment (didn't happen). In 2007 I was in grad school and did not work much, so I didn't make any contributions. However, I did open a SEP-IRA for tax purposes and put in about $1,200.

Well, what's done is done. And, at least I did start contributing to my 401K almost as soon as I began working (only a one year delay). I'm planning to max out my contribution for this year, and I made good progress last year as well.

Onward and (hopefully) upward, both in terms of contributions and returns!

Potentially Good News on Roth IRAs

2009-06-20T19:03:00.000-07:00

An article in the Wall Street Journal caught my eye tonight, as I still have my 401ks and IRA on my mind. The article claims that there will be new rules for Roth IRAs and that the income limit, which I currently exceed, will be lifted. Apparently the rules about income for converting (but not funding) will demolish the income limit. The catch? There are taxes involved. This is all new to me because once I saw the income limits I stopped investigating Roth IRAs. When (if) I convert my 401k to a Roth IRA, I will have to pay income tax on the contributions and the earnings.

So how would this influence my decision to transfer my old 401K? The article answers just that question:
“If you’re thinking about doing a Roth conversion, leave your 401(k) alone” rather than rolling it into an IRA beforehand to keep your share of nondeductible contributions higher in the calculation above, says John Carl, president of the Retirement Learning Center LLC in New York

Another factor to consider when I try to decide what to do with the old 401K. Does anyone else spend this much time strategizing around where to keep assets? I don't even have a lot of assets, relatively speaking.

Reconsidering Consolidation

2009-06-18T17:58:00.000-07:00

After some thought and after blogging about all of the different accounts and institutions, I think it would be good if I could at least rollover an old 401K to my IRA. However, my big hangup about this is that I REFUSE to liquidate i.e. sell the funds in that account in order to transfer it. The funds are down significantly since I bought them at least 5 years ago and I do not want to lock in those losses. So I'm going to try to do an in-kind transfer. Fidelity sells all of the funds in the account, so I don't see why I could not. I have to talk to my broker and get the form tomorrow.

All of this writing about my messy investment portfolio is making me self-conscious. I want to write about an area that I do feel like I have a good handle on -- credit cards. I am much more of a risk taker when it comes to credit cards and I'm tempted to take even more risk. I'll write about it soon.

Organizing My Portfolio Part Ia

2009-06-16T18:26:00.000-07:00

Sadly, Cake is not providing a holistic view of my portfolio. It is the closest of all the tools I've found, but there are still issues. One of my institutions is not in their system and one of them I've added but for some reasons my positions don't appear in my portfolio. This would all be okay but you can't add positions manually. C'est la vie, but my Excel sheets are looking better and better. I think I might be a little bitter too because the Cake ratings for many of my positions are Ds or Fs. Not that I don't hate many of my holdings (I didn't choose them, my ex-boyfriend who is my financial planner did), but it hurts to see external validation for how bad some of them are. So I think I need to bite the bullet and stop searching for the perfect tool to see my portfolio and start figuring out an asset allocation strategy and then how to get to that ideal allocation.

Organizing My Portfolio: Part I

2009-06-14T15:00:00.000-07:00

Like many people, I have the securities portion of my vast wealth (haha) spread across several different accounts with different institutions. These include the following:

My current 401K
An as-of-yet-unrolled-over 401K
An IRA, SEP-IRA and a securities account at one institution
A just for fun online brokerage account

For those keeping count that is 6 accounts with 4 institutions.

Most financial planners or finance-types would probably be horrified by this list. I'm less concerned about all of the different accounts and more so about finding out what I own across my portfolio so I can analyze it as a whole. That's an informal goal for this year. My curiosity about my portfolio was piqued in October when it came crashing down by about 50%.

I did this manually in an Excel grid, tallying all of the positions in each account and then analyzing my overall portfolio by type. This is the graph I created based on that info:

These are my own categories which I am sure are slightly unorthodox. As for the balance or lack of balance in my portfolio, analyzing that is my next step.

After reading an article in the Wall Street Journal, I was excited to learn I could possibly get some help with this task. I'm currently trying out some of the interactive portfolio trackers discussed in the story and will post an update soon. I had previously searched for a tool to do this and hadn't come up with much. I used the Markewatch Portfolio Analyzer but could not for the life of me figure out where to find the "analyzer" part of the tool that the site claims gives you a portfolio asset allocation analysis.

While this probably seems like a basic thing to do for most personal finance gurus, for me it is the top of the pyramid. I've got the budgeting, saving, credit card, checking account part of the equation down. Now it's time to take my investing to the next level. I'll share aspects of all of these as I go.