February Update

I love February. I get paid monthly and in February my next payday always surprises me. February was a good month for me. I was able to save a little bit and I found out I was getting my refund. Thanks to a rebate my savings increased from $5,636 to $6,041. My travel fund went from $258 to $308 and my boston terrier fund increased by another $20 (slow and steady). My slush fund has a sad $17, but a large part of my tax refund will be going here. I'm actually excited to do my updates at the end of March because of the additional boost from my tax refund! Finally I've completed 20% of my retirement contribution goal.

When it comes to my debt I'm chipping away as always. 

And here is where my money went:

Clothes		$84.91
Computer/Electronics		$70.34
Dining		$114.50
Donation		$16.00
Entertainment		$128.27
Fees		$0.00
Gifts		$0.00
Groceries		$123.58
Health		$130.00
Hobbies		$0.00
Household		$63.24
Insurance		$0.00
Laundry		$10.00
Media		$73.39
Misc		$2.34
Personal Care		$0.00
Sports/Fitness		$50.00
Transportation		$95.00
Total		$961.57

It is higher then normal, but I also took out a little money to do some shopping and this also includes my contacts which I will get reimbursed for and the money it costs to do my taxes.

Overall not bad. =)

And the Freeze Begins

Earlier this week we had an all staff meeting to discuss the college's financial outlook. I knew it wasn't going to be good news, but I was actually looking forward to hearing where we stand. Many colleges and universities have been announcing there plans to cut staff and freeze salaries. So needless to say we will also not be seeing salary increases come July.

There are a few things that make this easier to understand and be okay with. First, everyone's salary will be frozen, meaning both faculty and staff. The only people who will get increases are union employees (who have a contract) and people who get promoted, which is completely fair. As a community we are in this together. Second, the senior administration has been very open about the current situation. This is the second all staff meeting we have had about this issue and we have received multiple updates by email. Finally, we are a college and our mission is to educate out students. Part of that means meeting our financial aid needs, which in this economy will mostly likely go up. We are also prioritizing our students by initiating the lowest tuition increase in over 10 years. We are putting our students first and aren't the students why we chose to work in higher education?

I can't say that I'm not bummed. I couldn't post about it right away because I needed time to process what this will mean for me financially. I'm moving in June so there is a chance my costs could go down, but there is also a chance my costs will go up. I'm hoping that the trend of negotiating rents will still be around when I start looking for a place.

There are also some benefits about my job that make up for this salary freeze. My employer contributes 10% of my salary to my 403b no matter what. This means I'm saving 17% of my salary towards retirement every month! I would never be able to do that on my own. (I'm a little scared that this will be the next thing to be cut). I also have a tuition benefit and I'm planning on going back to school (fingers crossed I get in). If I am admitted I will have to pay maybe $500 out of pocket each semester. That's it! This is a huge benefit, even with the additional tax burden.

So while I would love to receive a salary increase in July, overall I'm happy for what I still have. And most importantly I still have a job.

When The Jealously Kicks In

This weekend I went out with my younger sister and some of her friends. I went to her apartment before going out to have a few beers. As my sister and her roommate got ready I found myself getting really jealous. Not because they were younger, or because they live in such a nice apartment, but because of their clothes. My sister had just bought a new pair of jeans that day and it seemed like everyone had great outfits and they all seemed like they were new. My wardrobe felt old and tired. The sad part is that I was wearing a new sweater and boots that I had gotten for Christmas (still new in my book).

I had this huge urge to go out and update my wardrobe. All I wanted to do was shop. Luckily the feeling passed way before I even got home that night. And, while there are parts of my wardrobe I would love to spruce up, overall it is not old and tired.

This experience reminded me of my life right after college. I lived with three other girls in a pretty big apartment. Two of them made more money than I did and had extra income to shop for the latest styles. While I didn't really have the money to spend I often found myself out with them shopping. I was living paycheck to paycheck and wasting my money on clothes I didn't need. It was so easy not to think about the consequences and just spend.

Obviously I've changed and I'm not going to let a little jealously stop me from reaching my goals. When I'm faced with jealously about what others have my best defense is to walk away. I know that when I go shopping with my sister I always end up spending a good deal of money. When I shop with her and with other friends I am likely to believe that I am getting a good deal on things I wouldn't have spent the money on if I was shopping by myself. So when faced with jealously I take a deep breath and remind myself of my goals. I also remind myself what a great feeling it is to get four sweaters for $45, by waiting for the sales and the extra discounts.

What do you do when the jealously kicks in? Do you have a weakness?

Wasting Time

At work this morning I found myself thinking about how much I want to get done tonight. I always have lofty goals for after work, however I rarely finish everything I have planned. I am beginning to think that the television is the culprit. It is just way to easy for me to get caught up in some stupid show and lose track of the time (and what I was doing before the show came on).

Take tonight for instance. I need to do laundry, but when I went to the laundry room all the machines were taken. So I figured I would go back in a half hour and try again ... an hour later and it hasn't happened. What happened in that hour? I made dinner and watched television.

The sad part is that I don't even have cable. I have about ten channels that I somehow get by plugging my cable in. Even with so few options I somehow always find something to watch. I recently discovered that I have TNT, and it is a killer. Saying no to Law & Order does not come easy to me.

I've decided to track how much television I watch this week and see if I can slowly ween myself off of it. I've tried limiting to an hour a night, but I failed miserably each time. I'm also going to make to do lists each night and see if I can get through everything (I love to do lists).

Wish me luck!

Yah for Index Funds!

I am a big believer in the index fund. Yes my portfolio is doing horrible right now, but I'm far from retirement and so rather then cry about how much money I've lost I am just psyched to be getting such a good deal. 

The New York Times ran an article about a recent study about index funds: The Index Fund Wins Again.

It is always nice to read about studies that back-up your beliefs, isn't it?

Mr. Krtizman devised an elaborateMr. Kritzman devised an elaborate method to take such contingencies into account. Then he calculated the average return over a hypothetical 20-year period, net of all expenses, of three hypothetical investments: a stock index fund with an annualized return of 10 percent, an actively managed mutual fund with an annualized return of 13.5 percent and a hedge fund with an annualized return of 19 percent. The volatility of the three funds’ returns — along with their turnover rates, transaction fees and management and performance fees — was based on what he determined to be industry averages.

Mr. Kritzman found that, net of all expenses, including federal and state taxes for a New York State resident in the highest tax brackets, the winner was the index fund.

The article goes on to say:

Expenses were the culprit. For both the actively managed fund and the hedge fund, those expenses more than ate up the large amounts — 3.5 and 9 percentage points a year, respectively — by which they beat the index fund before expenses.

So yah for the index fund! Slow and steady is my approach for retirement. 

A Frugal Weekend (so far)

My poor bf is pretty sick. Friday night I did my best to take care of him and then we crashed. I spent just under $10 at the grocery store for him.

On Saturday we pretty much stayed in and rested and Saturday night I went out for a bit with my sister only spending $21 (which is amazingly cheap). 

Today I plan on renting a movie for us to watch and that's about it, so another $5. This is one of my cheapest weekends in a while! It helps that I didn't have to pay $25 for a train ticket.

It's Tax Season Again

My taxes are filed and my bank account is eagerly awaiting my refund. I got a rather large (or large for me) refund this year most likely due to the fact I paid a ton in interest on my mortgage. 

I'm getting back $2,814 from the Federal government and $840 from the State!!

I have big plans for this money  hopefully $3,000 will go into my emergency fund and the $654 will go into my slush fund. 

I realized recently that I've been neglecting to save for an important upcoming event. When my bf and I move in together we are most likely going to have to put down a security on the place we rent. I say most likely because the current economic crises has softened the rental market and negotiating lower rents and other deals has become common. Either way I need to save money for this expense. I've decided to save it in my slush fund and make my goal for this fund $2,000. 

So I may end up tweaking the amounts above but my entire tax refund is going into these savings accounts. The $100 I used from my rebate check as "fun money" met my urge to shop and now I'm back in savings mode!

This is going to be a huge addition to my savings account and I can't wait to see those numbers go up!

Time Flies..

I realized yesterday that my one-year blog anniversary was today. I can't believe I almost let it pass me by! So in honor of my one year blog anniversary here is a short recap.

My very first post was about how I found personal finance blogs refreshing, my blog name, a brief history, and my goals for 2008. Whew, that seems like a lot for one blog post.

In my first few months blogging I wrote about my budget, prenups and love, and purchasing birthday gifts. I participated in lunch challenges and you helped me through school fiasco including jitters about getting in and what happened afterwards. I also struggled with my health, finally being diagnosed with Epstein Barr.

Since I've started this blog I saved enough to travel from Colorado, Oregon & Hong Kong. I ran a marathon, I decided not to get my doctorate and I made a financial plan.

This blog has given me so much. Now I know where every penny goes, I have an emergency fund and it's growing, I'm contributing more to my 403b and overall I'm smarter about my money. I'm confident about my financial future and everyday I'm working to find the right balance of frugal and enjoying life.

Losing my Carnival Virginity

Tomorrow is my blog's one year anniversary. It is insane to think that I've been blogging for a whole year!

In honor of my one year anniversary I decided to submit some of my posts to carnivals. I know I've been blogging for a year and I'm now just submitting articles to carnivals. I'm always a little behind the curve (case in point I finally joined Twitter).

You can find my Good Old E-Fund post in the Carnival of Everything Money at the Penny Daily and my post on Cash vs. Credit in the Carnival of Personal Finance at the Canadian Personal Finance Blog.

Check it out!

Unexpected Costs

The problem with creating a budget is that there always seems to be unexpected costs. It seems like every month something comes up that takes more money out of my pocket. 

I know many people have a budget line for those unexpected costs, but that doesn't seem to work for me. If I know I have x dollars then I'll spend x dollars. 

My solution for these unexpected costs is my slush fund, but as you can see I've already wiped it clean to pay for the holiday expenses and insurance. 

What did this teach me? That $500 is not enough money for my slush fund. I've decided to try and keep $1000 in my slush fund, turning it into my short-term savings (though I'm keeping the name slush fund because I love it). In order to fund this I've decided to allocate part of my tax return into my slush fund. While I would prefer to put all of it into my E-fund, moving me closer to that $16,000, I'm going to put a chunk in this fund. If I use it right it will help me get through the bumps in the road and I can keep my e-fund for true emergencies. 

V-day

Happy V-day to those who enjoy the day! Personally I think it is an excuse to spend money, though I do love the tradition of taking the time to write down how I feel about my special someone and giving it to them in the form of a card.

Many pf bloggers have written about ways to save money on V-day. I have another one to add. Spend a larger portion of the day working on a personal essay for a grad school application. Fun stuff!

Enjoy your weekend!

That Good Old E-Fund

In our current recession and what feels like the daily increase in job losses it becomes so important to have that emergency fund. So how much is enough?

3 months? 6 months? a year?

And what is that monthly number going to be? How much are you going to allow yourself for food and costs of job searching?

This is not a one answer fits all kind of question. It really is dependent on your priorities and what you are comfortable with.

Here are my fixed monthly expenses:

Mortgage: $1,183.08

Maintenance: $530.64

Student loan #1: $165.65

Student loan #2: $50 (I currently pay $65 but only $50 is actually required)

I would budget $150 for internet, electric and my cell phone.

I currently try to manage with $700 a month in liquid expenses (which includes food). I think that if I were to lose my job I could cut back to $500 by only using this money for groceries and necessities (I'm thinking toilet paper and toothpaste) and not eating out.

So that leaves me with $2579.37 a month just to get by. While I would love to have a year of emergency savings I know I will be very comfortable with six months. So that means I need to save $15,476.22. I'm all about rounding up so my goal will be $16,000.

In a way this is depressing because I have so much further to save, but it is also nice to have a goal number based on what I currently spend.

If you don't know exactly how much you need in your emergency fund I suggest doing this exercise and posting about it! It was incredibly helpful. Looking at the larger picture my goal is to have $16,000 saved by January 2011.

Building Up that Emergency Fund

I received my STAR property tax rebate in the mail yesterday! $300 is going straight to my emergency fund and I'm still deciding how to break up the last $100.

Cash vs. Credit

There is a debate in personal finance and between personal finance bloggers of whether it is better to use cash or to use credit. First I must say that if you are in any credit card debt then there is no debate. Use cash and pay off that credit card! However, if you do not have anymore credit card debt which is better?

Ultimately I think this is a very personal decision and what works for one person may not work for another. Still I've decided to lay out some of the benefits to both.

Using Cash Pros:

• Once you spend cash it is gone. You don't have to worry about paying it off later.
• If you don't have enough then you can't spend.
• You can save the change.

Using Credit Pros:

• Reward points.
• You don't have to carry large amounts of cash with you.
• If you don't have enough cash on you, but have enough in your budget to buy something you can still put it on your credit card.

And of course there are reasons do not use either.

Using Cash Cons:

• You have to plan on having the cash on you.
• You don't always get a receipt.
• It may be easier to spend.

Using Credit Cons:

• It is easy to spend more than you have and get back in debt (huge con)
• You may get shafted with the bill if everyone gives you cash and you have to use a card (not all friends pay equally).
  

There are of course more pros and cons then I mention, but these are the big ones for me.

Personally I used to use my credit card ALL the time because of the reward benefits. Cash back is such an easy way to save more money that it just makes sense. However, I am also obsessive when it comes to tracking my spending and paying off my credit card. In fact I login every few days and pay off my credit card at the end of every week.

This month I'm experimenting with a more mixed approach. While I plan on still putting the majority of my purchases on credit I took out a much larger sum of cash then before. I'm allowing myself so much of it every week and trying to balance out my spending habits. I have to say it is nice to know I have some cash in my wallet, though I do get sad every time I use it knowing I'm missing out on those credit card points.

What is your preference?

Excuses

I’m tired. It’s too cold. It’s too hot. I’ll start tomorrow. I’ll start next week. I’ll do it in the morning. I have too much else going on.

I’ve used all of these excuses (I’m tired and it’s too cold are repeat offenders). I guarantee I’m not the only one who uses them and others. It is so easy to rationalize holding off until tomorrow and then before we know it it’s been month, a year, 3 years and it never happens.

But if this last presidential election has taught us anything it is that if we want change we have to do something about it. No more excuses. And while I do make my share of excuses I’m also a big believer in the concept of just start it. Why just start it and not just do it? Because starting something is less intimidating than completing it and if I start something there is a high chance I’ll finish it.

Do you want to get your finances in order?

Just start it. Track your spending for a week (and no a week doesn’t have to start on Sunday it can start today). Create a budget. Open a high-yield savings account even if you can only put in $20. And if you get an employee match in your 401k or 403b, then please please walk yourself down to HR and start contributing!

Do you want to start a blog?

Just start it. Pick a template (you can always change it later) and write a post. If you enjoyed it write another post and before you know it you have a blog.

Do you want to run a marathon?

Just start it. Sign up with a training program, many of them let you drop down to a ½ marathon is the marathon training schedule is too much. The hardest part of training for a marathon is starting the process (okay so that is not the hardest part, but it is one of the hardest parts!).

Do you want to go back to school?

Just start it. Indentify the school or schools you want to apply to and then ask people for recommendations. If someone is writing you a recommendation then you can’t back out of applying. You have to finish what you started.

Those are all examples of things I accomplished by deciding to stop making excuses. Next on my list is to finish applying to school, learn how to cook more meals, eat less frozen food, and improve my knitting.

I need to stop making excuses and just start them. What is it that you need to stop making excuses and just start?

A Break

Since I haven't had a time to write a real post this week (and may not have time) I'm stealing Saving4Later's post. =)

Basically the idea is to go through the list and bold what you've done.

1. Started your own blog

2. Slept under the stars

3. Played in a band

4. Visited Hawaii

5. Watched a meteor shower

6. Given more than you can afford to charity

7. Been to Disneyland

8. Climbed a mountain

9. Held a praying mantis

10. Sang a solo

11. Bungee jumped

12. Visited Paris

13. Watched a lightning storm at sea

14. Taught yourself an art from scratch

15. Adopted a child

16. Had food poisoning (I think so)

17. Walked to the top of the Statue of Liberty

18. Grown your own vegetables

19. Seen the Mona Lisa in France

20. Slept on an overnight train

21. Had a pillow fight

22. Hitch hiked

23. Taken a sick day when you’re not ill

24. Built a snow fort

25. Held a lamb

26. Gone skinny dipping

27. Run a Marathon

28. Ridden in a gondola in Venice

29. Seen a total eclipse

30. Watched a sunrise or sunset

31. Hit a home run

32. Been on a cruise

33. Seen Niagara Falls in person

34. Visited the birthplace of your ancestors

35. Seen an Amish community

36. Taught yourself a new language

37. Had enough money to be truly satisfied (this is a weird one...I think once my emergency fund is funded I'll be able to relax a little bit more)

38. Seen the Leaning Tower of Pisa in person

39. Gone rock climbing

40. Seen Michelangelo's David

41. Sung karoke (once in a group)

42. Seen Old Faithful geyser erupt

43. Bought a stranger a meal at a restaurant

44. Visited Africa

45. Walked on a beach by moonlight

46. Been transported in an ambulance

47. Had your portrait painted

48. Gone deep sea fishing

49. Seen the Sistine Chapel in person

50. Been to the top of the Eiffel Tower in Paris

51. Gone scuba diving or snorkeling

52. Kissed in the rain

53. Played in the mud

54. Gone to a drive-in theater

55. Been in a movie

56. Visited the Great Wall of China

57. Started a business

58. Taken a martial arts class

59. Visited Russia

60. Served at a soup kitchen

61. Sold Girl Scout cookies

62. Gone whale watching.

63. Got flowers for no reason

64. Donated blood, platelets or plasma

65. Gone sky diving

66. Visited a Nazi Concentration Camp

67. Bounced a check

68. Flown in a helicopter

69. Saved a favorite childhood toy.

70. Visited the Lincoln Memorial

71. Eaten Caviar

72. Pieced a quilt

73. Stood in Times Square

74. Toured the Everglades

75. Been fired from a job

76. Seen the Changing of the Guards in London.

77. Broken a bone

78. Been on a speeding motorcycle.

79. Seen the Grand Canyon in person

80. Published a book

81. Visited the Vatican

82. Bought a brand new car

83. Walked in Jerusalem

84. Had your picture in the newspaper (when I was little!)

85. Read the entire Bible

86. Visited the White House (if the outside counts)

87. Killed and prepared an animal for eating

88. Had chickenpox

89. Saved someone’s life (I used to be a lifeguard)

90. Sat on a jury

91. Met someone famous

92. Joined a book club

93. Lost a loved one

94. Had a baby

95. Seen the Alamo in person

96. Swam in the Great Salt Lake

97. Been involved in a lawsuit

98. Owned a cellphone

99. Been stung by a bee

100. Read an entire book in one day

I've done 38. It's an interesting list, I would love to know who came up with it. (There are quite a few things on France and very few on Asia).

February Goals

I have been inconsistent about creating monthly goals for the past couple of months. As a new years resolution I want to start creating goals again. So here goes...

Goal #1: Stay on budget.

Goal #2: Write the personal essay for my application & research other grad programs.

Goal #3: Figure out what tax software I'm going to use - either Turbo Tax or TaxAct. Do my taxes! 

Goal #4: Keep to my running schedule.

Goal #5: When I go out to eat try new places.

Goal #6: Make $100 in supplemental income. 

Net Worth & Side Bar Updates

My net worth actually went up! Only by $237, but at least it went up for once.

I'm chipping away on my student loans and mortgage, so I don't have too much to say about that. 

All of my savings went up expect my slush fund. I had to drain it to pay for insurance. So this month I'm focusing on staying in budget and building back on my slush fund!

January Wrap Up

January was a very expensive month. Here is my breakdown:

Clothes: $30.44
Dining: $204.85
Entertainment: $337.30
Groceries: $106.21
Health: $115
Household: $10.83
Insurance: $291
Media: $12.96
Personal Care: $109.57
Transportation: $2.00

Total amount spent: $1220.16

Ouch. I spent a ton of money on entertainment, paid my coop insurance for the year, and went out to eat a lot. I'm happy for a new month and a chance to start clean again.

I bypassed my goal of making $100 a month in supplemental income and made $197.31 selling books! Not bad.