Credit Score Blues

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

Getting Serious about Saving

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

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

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

Financial Advisor

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

Clotheshorse

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

OOC Food Budget

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

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

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

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

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

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

Oh well. Bon Appetit!

Net Worth Updated

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

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

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

All Settled

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

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

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

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