Does More Money Make Us Fat?

One thing I never expected to miss when I moved from my 4th floor walkup was the stairs. Or the weekly trip to the laundromat. Or hauling heavy things up the stairs. Or all the stairs I had to walk in my old commute.  Or not having a dishwasher. I joke that moving to my condo was akin to the industrial revolution, my own personal industrial revolution. But now that I've left the pre-modern world behind and have all the "mod cons" of a dishwasher, a washer dryer in my house and a short flight of stairs to climb, I find I miss the old "inconveniences" because I get a lot less exercise. I thought when I moved I would use the time I gained to work out more, but that hasn't happened. I don't know where the time went. But I have definitely gained a few pounds since moving and I really miss having to work as hard physically to do my daily tasks. I was reminded of that when reading this special report on obesity in the Economist. A really interesting read: http://www.economist.com/news/special-report/21568065-world-getting-wider-says-charlotte-howard-what-can-be-done-about-it-big

New Way of Looking at a Goal

So over the last week or so I've gotten really excited about a new strategy that I can use to reach my ultimate financial goal: to payoff the mortgage. When I first got my mortgage I thought I would pre-pay in order to shave years and interest off the mortgage. So I set up auto pre-pay of $500 a month, which essentially doubles my principal payment to about $1,000 a month. However, I also thought I would pre-pay a big lump sum each January post-bonus/end of year. The more I read and talked to my Learnvest adviser, the more I realized that pre-paying the mortgage is not actually the best strategy.  Instead, I should invest the money. I like this idea because it gives me liquidity in case of an emergency. That said, I hadn't found a way to track how much I would need to save over how long a time period to reach this goal. Then this week on Mint.com I was like "wow, what if I just create a mortgage-payoff goal" which I did. I input my mortgage balance as the amount of $ I want to save for the goal and then I linked all of my non-retirement savings accounts to the goal. I have a balance of about $200K in those accounts. I've got about $329K to payoff on the mortgage. Hence I need to save about $129 to pay this off. 

Then today I started thinking about the power of compounding, because this money is invested. Some in CDs, but some in my brokerage account. Sooooo this Mint goal isn't taking into account investment gains/interest. So with my planned monthly contributions and any investment gains/interest, I should be able to reach my goal a lot more quickly. I have a goal of 10 years right now, but when I play with savings calculators, I can possibly reach this goal in 5 years if I earn returns of 5%. Which is a little aggressive because some of this money is in CDs paying 2%.
Anyway, I just feel much more energized about my savings outside of retirement now, because I am saving for a purpose and each month I'll be able to see, thanks to Mint.com, exactly how much closer I am to reaching my goal.

Networth Milestone: 500K!

I'm excited because today I updated my net worth entry on NetworthIQ for Q4 2012 and I've crossed the 500K threshold!!! I also checked back over the last 4 years of net worth entries and realized that I tend to jump by about 100K a year. Which is insane. And only possible because of the generous bonuses I have been receiving. So I'd like to be around 600K this time next year. That would be sweet. Ultimately, I think I'll feel a lot more secure once my net worth hits 1 million (of course it won't all be liquid). Hopefully that will be in about 5 years. That's a great long term goal. Then maybe I'll feel like I can chill out a bit more about life and not have to have such a stressful (but for the most part manageable and sometimes even fun) job.

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!