Always the Planner

Saving for Retirement Should be a Priority

2010-03-17T08:00:00.005-04:00

This is a post in my series on setting up your financial life series. Disclaimer: These are my opinions. I am not a financial planner or certified to give financial advice.

Budgeting is the first step towards becoming financially responsible. Once you've become comfortable with your budget and tracking where your money goes it's time to figure our your priorities. Saving for retirement should be a priority no matter what your age. In fact the earlier you start the better. Why, because of compounding interest.

Compounding interest happens when the interest you've earned on your money is added to the principal. In other words, the interest you've earned is also making interest! To better understand how this works play around with one of the many compound interest calculators.

So, for example let's say I'm 22 and start by putting away $200 a year for retirement. With 43 years to save I end up with $30,028. Now let's say I don't start putting money away for retirement until I'm 32 - 10 years later. To end up with $30K I would have to save $360 a year. Obviously these numbers simplify things a bit, so I encourage you to play around with one of these calculators!

The next question is how to save. If you luckily enough to have access to a retirement account through your employer and there is a match - take advantage! The popular rule of thumb is that if you do not have a match then you should be contributing to a Roth IRA (if you are eligible). Or you contribute up to your match and then open and Roth IRA for other contributions. My opinion is contribute to whatever makes it easier for you. Personally, I like contributing to my 403b because the money is taken out of my paycheck before I receive it, so I never miss it. However, I also have a Roth IRA.

When it comes to your actual investments, I'm not a financial advisor so I don't presume to give advice. Though I do advise you to make sure understand how much fees are involved in your investments. If you are not careful the fees can eat up all your interest. This is why I prefer index funds, with are low fee, and follow the market. In my opinion the only way to beat the market is to start saving young, buy and hold, and invest in low fee funds.

Should you try to beat the market?

2010-03-09T12:48:00.002-05:00

My retirement accounts at work are through Fidelity and recently they sent me an email with links to a few articles. I particularly enjoyed the article Trying to Beat the Market?, where Fidelity lays out four solid investment strategies on how to maintain your retirement accounts.

When it comes to retirement this recession has been scary for a lot of people. I'm lucky, I'm young and realized that there was not reason to pull my money from the market. However, I did realize that I was not as comfortable with risk as I thought. However, I managed to stop my urges to move all my money out of stocks and as I watch my retirement accounts slowly move back up I'm thankful. This is why I like Fidelity's tips so much - they are not about beating the market, but instead about saving and know where your money is going.

1. Stick to an investment plan
Fear and greed have long driven investors to overreach, throwing money at stocks near market highs, and fleeing at market lows. But while sticking with your investment plan through the market’s ups and downs is challenging, it’s critical to help you achieve your goals....
If you were one of the “sideliners,” you learned the hard lesson that attempting to time the market can be costly. After all, you have to be right twice, when you bail out and when you get back in. That’s virtually impossible to do consistently, though it hasn’t stopped investors from trying. The problem is, investors’ habit of jumping in and out of the market tends to erode their returns.

2. Save, save, save
Building wealth is not just about returns; your contributions make a big difference, too. In fact, maximizing your own contributions may be one immediate way to make up for any recent losses. At a minimum, save enough to maximize the matching contribution, if one is available from your employer.

3. Stay diversified
Consider the performance of two hypothetical portfolios from September 2008 to February 2009, the worst part of the bear market. One portfolio held all stocks, while the other held 70% stocks, 25% bonds, and 5% cash. The all-stock portfolio lost nearly half its value. Meanwhile, the diversified portfolio declined by about a third.¹⁰ That’s a painful loss, to be sure—but less painful than the all-stock portfolio.

4. Manage job transitions wisely
If you switch jobs, you’ll have to decide what to do with your workplace retirement savings account. Generally, if the account balance is $5,000 or above, you can leave the money in your former employer’s plan. You also may be able to roll the funds into your new employer’s plan, depending on your new plan’s rules. Alternatively, you can roll your retirement savings into an individual retirement account (IRA), which also preserves the plan’s tax deferred benefits.
Any of these options is better than cashing out the account. Withdrawing your money not only erases your savings—it also subjects you to additional costs. You’ll generally have to pay taxes on the amount you withdraw, and if you are younger than 59½ you’ll also pay a 10% penalty for the early withdrawal.

The article also gives concrete advice on what to do to maintain these strategies. If you have the time or inclination I suggest you read it!

Budgeting 101

2010-03-03T08:00:00.002-05:00

This is the first post in my series on setting up your financial life series. Disclaimer: These are my opinions. I am not a financial planner or certified to give financial advice.

No matter how old you are or what your financial situation is like, the first step to taking control is to know where you money is going. Trying to budget before you know what your spending habits are makes the likelihood to sticking to the budget slim. How do you know where you can cut back if you do not know exactly what your spending habits are?

As such, the first step is to track your spending for an entire month (I don't suggest using February). Trust me, once that first month is over you will be amazed at where your money goes and what it says about your priorities. I spend a large part of my budget on food, both groceries and dining out, but if I'm not careful I will end up spending a large amount of clothes. Food is my priority and so I budget accordingly.

During this month there are other steps you can be taking (from a previous post):

Figure out what is really important to you.
Prioritize. Decide what it is that you can't give up. Perhaps it is important you buy lunch everyday so you can socialize with coworkers, or maybe you can't live without your cup of coffee from that one coffee place.

Decide how much you want to save each month.
Take a guesstimate and choose an ideal number. Once you have finished tracking your spending you may find that you can save more, or maybe it's less. The important thing is that you start thinking about saving right away.

Make a list of your fixed expenses.
Include your rent, mortgage, student loans, other debt payment, internet, cable, utilities, newspaper subscriptions, etc.

Develop your goals.
Do you want to pay off your credit card? Save for retirement? Travel across the country? Figure out your goals and write them down.

Once the month is over and you have completed the steps above you can create your budget:

Budget for your fixed expenses first.
Make sure you have enough money for them and schedule payments to match your pay days.

Add your savings into the fixed expense portion of your budget.
Think of savings as a bill. It is something that should be paid at the beginning of every month. The key to being successful is to leave your money in your savings account. This money shouldn't be used to buy a new pair of boots that you had to have. You are saving for a reason (remember your goals) so the next time you want to take money out of your savings account, remember that reason.

Break up your non-fixed expenses into categories.
The way you decide to do this is completely up to you. You may want to identify a certain amount to be spend on groceries, household items, etc. Or you may want to have a lump sum you can't go over but you can spend on anything.

Be prepared to tweak your budget.
Your budget is a living document. You may end up tweaking it every month, or you may love it just the way it is from the start. Either way it is yours to do with as you like. Just use it!

Most importantly, remember the last point. The first budget you create is most likely not going to be the same budget you using six months from now. I am constantly changing and tweaking my budget depending on what is going on in my life and my shifting priorities. Consider your first budget an experiment. You are trying to figure out what works best for you! The goal is to do the best you can to meet your goals, not to beat yourself up every time you make a mistake.

Finally I thought I would give you some examples of real budgets:

I decide how much I'm going to try and spend in each category each month. However, if I go over I'm okay with it. My ultimate goal is to stay within a certain amount of what I call "liquid" spending (anything that does not include bills, necessary costs like transportation, and savings). I also track every penny no matter how small. I like to know where my money is going.

My F uses something he calls 'bonus money'. Any money that was not in his budget, like gifts, salary from part-time jobs, etc. he can spend however he likes. Sometimes he puts it into savings and sometime he treats himself or me with it. While I don't use it, I like the idea of 'bonus money'. It feels like freedom to every once in a while spend money on whatever your want without having to track it.

My friend doesn't use categories at all. He just tracks the amount of money he spends every day and tries not to go over the total amount he allocates to spend each year.

As you can see budgeting is personal, but it is also an important step to setting up your financial life.

My Feb. Spending Report

2010-02-28T19:50:00.001-05:00

I'm happy to report that I did not go over budget in February!

My final spending was:

Train: $16

Target & Duane Reade for some necessary items: $34.35

Brunch with a friend: $14

Ice cream for F and myself: $9

Thanks for all of your encouragement! So far this year I haven't gone over more than $11 on my monthly budget. March is going to be another tough month for me to stay on budget. More on that later.

Setting Up Your Financial Life

2010-02-25T09:00:00.003-05:00

One of my favorite things to do is help people get control of their finances. It is incredibly gratifying knowing that you are helping your friends take control of their money and their future. And hopefully, setting them up with good financial habits for the rest of their life. I say hopefully because you can't live someone else's life and you never know what will happen.

So, as part of my 2010 list I'm helping a friend/coworker take control of her finances. She is recently out of graduate school, in her first full-time job, and in her early 20s.

I've decided to turn my helping her into a blog series of 9 or 10 posts. Stay tuned for my first post in this series on budgeting.

2010 List

2010-02-23T08:00:00.002-05:00

I want to start out by saying that I stole this idea from someone else. In January someone I know made a 20x10 list for 2010. It is 20 lists of 10 items that you want to complete in 2010. That's right 200 things. At first I thought the list was crazy, I mean how could I even come up with 200 things? However as I thought about it the really grew on me. This list does not have to be 200 large and exciting things. It can be a simple as places you want to eat and movies you want to see.

There is no denying that my life is hectic and as a result I find myself often thinking about only three things: 1. work, 2. school, and 3. wedding. I don't want 2010 to only be about these three things! I also wanted to remind myself that there is more to life then wedding, school & work.

So I made a 20x10 list. To perfectly honest it is not quite done. I'm still missing 26 items (which I intend to fill in as I think of or do certain things. My 20x10 list consists of 3 sections dedicated to wedding, 3 sections dedicated to travel and then sections on exploring different aspects of NYC, places I want to eat, books I want to read, movies I want to see, recipes I want to make, things I want to learn more about, things I want to learn how to do (like make paper flowers and jump start a car), there is a section of fitness and of course a section on budgeting.

In fact going snowboarding and making it off the bunny hill was on my list and I can now cross it off!

The majority of my list are small items, but they are items that remind me that life is more then work, school, and wedding. And so, I'm grateful for my 2010 list. I think it is going to keep me sane.

picture by sunshinecity

Spending Report

2010-02-21T13:51:00.002-05:00

I probably spent more time falling yesterday than actually snowboards and I'm incredible sore today to prove it. However, it was a fun trip and for a second time out it wasn't that bad.

My spending this weekend consisted of:

Vending Machine: $1

Tip for dinner on Friday: $6

Laundry: $13

Breakfast Saturday: $7

Snowboarding and eating while snowboarding: $76.20 (this includes a lesson, F treated me and paid for my train ticket and lift pass so I paid for food and drink).

Dinner on Saturday for F & I: $25.69

I spent a total of $128.09 which means I have $78 left to last me until next Sunday.

The only way I'm going to make it is if I don't spend money at all until Saturday. Next weekend we are off to CT in order to do some wedding stuff so that's $25 for my train ticket. I'm budgeting $15 for lunch while we are out there and then the remaining $38 for brunch and other on Sunday.

I'm focuses, I'm ready, I'm going to make it!

What is Your Leisure Time Worth to You?

2010-02-19T14:36:00.004-05:00

During my lunch hour I was browsing through some online articles and came across Laura Rowley's yahoo column. This week she wrote about a survey that asked the participants what they would do to double their salary:

I was struck by a recent poll that asked Americans what they would be willing to do to double their monthly income. Among a representative sample of 1,000 adults, one quarter of respondents said they would be willing to work every day of the year, according to a survey conducted by Capital One Bank.

A few calculations immediately jumped to mind: The U.S. median income is about $50,000, according to the Census Bureau. Double that to $100,000, and presume you lose roughly 30 percent to taxes. Divide what's left -- $70,000 -- by 365 days a year and you get $191.78 a day. Or, for an eight-hour day, $23.97 per hour.

The article goes on to talk about trading time for money:

There's often a rush to trade time for money, even though a variety of studies have found people who are "time affluent" are happier than those who are materially affluent. That's because people with time can spend it having fun with family and friends, exercising, pursuing personal or spiritual growth or volunteering -- all of which have been found to be important contributors to well-being.

The problem is, it's awfully hard to put a dollar figure on leisure, and so we discount its value -- and mentally overestimate the pleasure we'll get out of doubling our money. Some people might imagine they'd use all that extra dough to hit the mall, the spa, the beach, the slopes; to put up their feet in a custom home theater and chill.

I agree that we tend to think that once we have all this money our lives will be better, and who knows, maybe they will be a little bit better. However, I strongly believe that you have to consider how something will affect all aspects of your life before making a decision. If making double my salary means that I don't have time to spend my money then it is not worth it. Free time to pursue other interests is a gift and I know it helps keep me sane. Because I'm in school I have very little leisure time and so I cherish those moments even more. However, because I'm in school for something that I really enjoy I really don't feel like I'm at work all the time.

Time to relax and enjoy other things outside work will always been more valuable to me then working 60-80 hours a week, but making a large amount of money. However, I'm also convinced that there is a way to make more money and keep the balance in my life that I am constantly striving for.

February Spending Update

2010-02-19T14:13:00.003-05:00

So far so good friends! I haven't spent a dime since my last post, which means I still have $207 to last me until the 28th.

However, I am about to go spend $1 at the vending machine because I'm craving something salty and my banana chips aren't cutting it!

February Spending

2010-02-17T12:19:00.002-05:00

Alright folks, I need some accountability! I have $207 left in my flexible spending pot to make it until Feb. 28.

My upcoming plans include a day trip to snowboard, but with some discounts I should be able to do this for under $100. Which means the rest of my spending needs to be minimal! The good news is that I've got a paper to write for Feb. 25th so that should keep me in and working. When it comes to groceries F and I are good on dinner, though we will need to buy milk and bread at least one more time. It's probably a good idea for us to stock up on snacks as well.

I really think this is doable, and to make sure I meet this goal I'm going to be posting my spending.

My 403b

2010-02-11T13:09:00.008-05:00

Before I begin I would like to remind everyone that I am not an expert and nothing I write should be considered advice. When it comes to investments we all need to find out what we are comfortable with and go from there.

I'm very aggressive in my 403b. I view it as money that I'm not going to be touching until I'm 65 (36 years from now) so there is no reason to be conservative. Of course, having that viewpoint during a recession means that my accounts just seem to be going down. I purposely only check my accounts once a month for net worth purposes and then ignore them as best as I can. However, once a year I like to take a look and see what has happened to my investment choices. When I spoke about rebalancing yesterday this is what I was talking about. Since I put a certain percentage of my money into different index funds as those funds do well or do badly my total overall percentage changes. Rather then physically move money around (and have to pay fees) I rebalance by altering my future investments.

Before I show you where I am here's another note. This is just my 403b that I've had since I started my current job. I also have a Roth IRA and other investments that are not included in these numbers.

Here is my current allocation in my employers contribution:

And here is my SRA contribution:

Both actually breakdown in very similar ways. I average about 85-86% stocks (foreign and domestic), 10% bonds, and 4-5% short-term (mainly government bonds).

I'm actually really happy with this distribution. However, like I mentioned before having an aggressive portfolio during a recession means I'm not actually making much money (though I am buying lots of shares)!

There you have it folks. I try not to focus on the dollar amount and keep reminding myself that when we crawl out of this recession (which we will do) it will all pay off. Right now, I'm getting a bargain.

Rebalancing my Retirement Accounts

2010-02-10T14:05:00.002-05:00

I normally rebalance my retirement accounts in January. However, I had an insane January and it didn't happen. In all honestly, February isn't shaping up to be much calmer. However, snow has come and we get to leave work early (in my opinion we shouldn't have had to come in at all). Either way I'm going to take advantage of this opportunity to catch up on some school work and take a look at my retirement accounts.

At least part of my day can be productive!

Financial Discussions to Have Before Marriage

2010-02-05T08:00:00.002-05:00

While I was reading an article about annuities in the New York Times online I happened to glance over at the "most popular - your money" and saw and article called "Your Money: Money Talks to Have Before Marriage". Because of the combination of my pending nuptials and my love of personal finance I ended up clicking on it before I even finished what I was reading.

I've always been a big believer that in a relationship financial compatibility is just as important as every other type of compatibility. Of course, it is also one that is often ignored. F and I often talk about money. I'm pretty open about my financial situation with people I care about so it didn't take us long into our relationship to begin talking about money, but we are far from perfect.

The article goes into four main things that should be discussed: ancestry, credit, control and affluence.

Ancestry is about our pasts and our relationships with money. Money is an ingrained part of our capitalist society that is not often talked about. Having this first conversation helps your partner understand where you are coming and vice versa. F and I may not have talked about this as deeply as the examples in the article, but we have talked about money enough that I'm not stressing over having an "ancestry" talk.

Credit is all about sharing your credit reports (by the way, we should all be checking our credit reports once a year)! While I can't say that I've seen F's credit report I do know that he has a higher credit score than I do, and because of my mortgage I also have a lot more debt than he does.

Control is about who does what financially. This is going to be a tricky one for F and I. When we first moved in together we had to sort through simple issues like when to pay the bills. (I like to pay as soon as I get them, he likes to pay when they are due). In fact, this issue of control is a big one for me and it is mostly why we have no intention of combing all of our finances. I know myself, if we shared everything I would become obsessive over his spending. In my opinion it is better to be honest with each other, but also control our own money and when we do need to share an account (for example when we buy a house or have kids) then we'll take it from there. However, for our sanity we each need to have money that belongs to just us to do with what we want.

Finally, affluence is about asking each other how rich you eventually want to be. This is something F and I haven't really talked about. Though I know he would LOVE to be a stay-at-home dad. I think this is an interesting conversation to have because it helps set your financial goals and what you are willing to do to get them. For example, I'm not willing to work 60 hours a week to make six figures. I'd rather have time to spend with F than money to spend of stuff. (Don't get me wrong though, I plan to be able to spend my life traveling, and eventually retire very comfortably).

2008 vs 2009 Spending

2010-02-04T10:00:00.000-05:00

Last month a commentator asked me to to post dollar amounts of my spending in 2009. I've been thinking about it since then. I used to be more open on my blog, but after having a "blog outing" scare I scaled back on what I actually posted.

However, I've decided that it's okay to post what I spent. I'm not going to post my fixed expenses, but it doesn't hurt to post my liquid expenses.

In 2009 I spent a total of $13,906.65 and in 2008 I spent a total of $11,488.25 in the following categories:

Category	2009	2008
Clothes	$1,022.57	$656.3
Computer/Electronics	$315.65	$377.68
Dining	$2,510.03	$1,654.38
Donation	$132	$338.20
Entertainment	$1,120.99	$926.27
Fees	$168.25	$47.70
Gifts	$1,540.81	$1,541.89
Groceries	$1,278. 59	$1,479.78
Health	$1,151.42	$190
Hobbies	$27.34	$32.44
Household	$794.66	$165.40
Insurance	$291	not recorded
Laundry	$238.22	$20
Media	$149.26	$179.24
Moving	$974.01	$0
Personal Care	$496.44	$468.87
School	$651.24	$0
Sports/Fitness	$189	$675.11
Transportation	$647. 37	$808.09
Vacation	$1,711.90	$1,899.93

$30 Challenge

2010-02-01T16:59:00.000-05:00

I ended up spending $10 over my $30 challenge.

On 1/26 I spent $15 on laundry (planned);

On 1/27 I spent $4 on a frozen dinner meal at the grocery store;

On 1/28 I splurges and spent $7 on pizza; finally

I spent $13 on 1/29 on some wine.

What I've learned is that if I'm hungry after class it doesn't matter if I have food at home, if it can't be made if five minutes I'm going to spend money. Since classes are back in full swing this month I'm heading over to trader joes to stock up on yummy quick meals so I'm not tempted to spend money.

A Little Stressed About Saving

2010-01-28T10:29:00.005-05:00

I am so excited about 2010! There are so many great things happening this year and I just know it is going to be so much fun. However, sadly I'm also a little stressed. These fun things are going to cost a lot of money and saving for two large goals at once can mean trying to figure out the best way to split up my savings. The India trip is coming soon and while my hope is that I can use my tax return money for the trip I'm not going to know how much I'm getting back until March. My goal for this trip, save $2000 more.

The wedding is a whole other beast. Our wedding is going to be big, I've accepted that and I'm excited for it. And since it is on a Friday, who knows, maybe it will end up being smaller than we think. In the meantime though, I'm planning for everyone to show up. Which means planning for 200 people and 20 tables. Most likely it will be less than this, but just in case I want to have the money saved. I feel like it is always better to have money left over than to not have enough. What matters to me is the venue (which we've booked and got a deal on), the dress (bought!), the photography, and a good DJ. At the end of the day this wedding is going to be a big party and I want everyone who can to be up and dancing. =)

What doesn't matter so much to me are the centerpieces, invitations, programs, and other miscellaneous things like that. Don't get me wrong, I want them to look nice, but it is not worth spending money on.

So here is my plan:

I only need the florist to take care of the bouquets and boutineers and miscellaneous flowers for the family. Besides that if I need other flowers I'm totally okay with fake. I mean, my wedding is in November, it's not like flowers are at their peak then anyway.
The centerpieces will be candles (see below)*. Between ikea and some discount places I've found online I think I can do this for relatively cheap (about $800 for 20 tables).
The invitations, I'm doing myself. There are some great templates available online for free and they are exactly what I want. Simple, but elegant. I've never saved an invitation from any wedding and I couldn't tell you what they looked like, so obviously, this is not important to me. I've estimated I can do 150 invitations for just under $400.
I can make the escort cards, place cards (which will be part of the favors) and table numbers for $50-$75.
The favors may end up costing us around $500, but again that is for 200 people so it may end up being a lot less.

What is not included in this list are other costs such as transportation for us, bus service to the hotel, gifts for our attendants, etc.

After the money graciously offered by my parents I still think I need to save $5000. F's parents are helping us out too, with the rehearsal dinner and money which will mean having to save less. However, until we know exactly what's what I'm still planning on saving $5000.

So between the India trip and the wedding I need to save (and spend) $7000 in 2010. Yipes. What I find stresses me out is the fact that I didn't get a raise last year, and I don't know what is going to happen this year. And even if we do get a raise, I imagine it will be minimal. My raises come in July, so I have a long time to wait to find out anyway.

To meet this goal I'm letting my emergency fund sit at $7000. I really want to be at $10,000, but my goal in 2010 is to maintain it at $7000. My student loan payments are in deferment since I'm back in school. I've decided to pay the interest but put the rest towards these two goals. I'm also doing the best I can to come at or under budget every month. Hence, $30 until the end of the month post. Staying at/coming under budget has never been easy for me. Instead I tend to go $50 over, no matter what my budget is that month. This is where I'm going to need the support of my readers. I'm probably going to be posting more about how much money I have and trying to say under. I'm allowing myself $680 in liquid expenses. To me liquid expenses include groceries, eating out, additional transportation over my 30 day subway card, entertainment, clothes, etc. My fixed expenses are what they are and include my savings. However, whenever I go over my liquid expenses I pull out of savings to cover it, so it is really important to not go over this year.

It is going to be a tough year for savings, but worth every penny.

*Centerpiece Idea from Project Wedding.

*additional note - I also increased my flex spending and my retirement savings, plus $22 a month towards a charity my paycheck is lower in 2010 than it was in 2009.

Can I Make it Under Budget?

2010-01-25T09:24:00.002-05:00

I have $30 to last me until the end of the month to make it under budget. Can I do it?

I'm pretty sure I have enough food at home that I can make due for the week. We do have plans this weekend, but as I paid for F to go out this weekend, he's paying for me next weekend. I have no plans this week but to continue to recover from my winter session class before classes start again on Thursday. The one thing I do need take care of is laundry, but that should run me about $15 (we send it out and we have a lot). Finally, the money for the remaining bills I have to pay has already been set aside. So this $30 is pure spending money.

I really want to start 2010 off right and not go over budget, especially considering everything I'm saving for this year.

So what do you think? Can I make it?

The Wedding Dress

2010-01-20T12:31:00.003-05:00

After the month of December was incredibly hectic trying to find a venue and date for our wedding, F and I decided that we were not going to do any wedding stuff in January that made us leave NYC on the weekends. Of course, this doesn't mean I would actually stop wedding planning. January has been the month of making appointments for February, save the dates, and wedding dress shopping.

The appointment making and save the dates has been pretty painless, it's the wedding dress shopping that has been a little frustrating.

I started on the 10th at a famous place in NYC known for its tv show. I brought with me a list of 12 wedding dresses that I liked from their website and my excitement. I'm not a girl who has dreamed about her wedding day, in fact I never thought I would get married before I was 30 (it will be 3 weeks before that milestone birthday). But, putting on that first wedding dress was very overwhelming. In fact the whole experience was so overwhelming I sort of lost control of the situation. The consultant was really pushing the trunk show and therefore I barely tried on any of the dresses on my list. In fact, the dress I ended up liking the most was only brought out because my friend asked about it. I also felt like she decided early on that we weren't going to buy and then didn't work very hard to actually listen to me. I left disappointed and frustrated.

The following weekend I went to this place where the gowns are donated and the proceeds given to charity. I love the concept, sadly though they had very few dresses in the styles I really prefer. It did give me a chance to try on a poofy ball gown (which is not me and F knows so saying it here is not ruining things for him). That was fun. =)

I also decided that weekend to go to a more bridal warehouse type of place. I tried on two dresses that I liked, but loved neither of them.

I'm beginning to wonder if I'm going to find something that I LOVE or if I'm going to pick a dress that I like and looks good on me and that I'm happy with. I have an appointment at a place I'm very excited to go to this weekend so I've got my fingers-crossed.

I've also been in the midst of taking a winter session class (it ends Thursday)! So things have felt a little hectic lately. I've been meaning to do a post on wedding costs (it's like everything jumps in price when the word "wedding" is brought up) but it will have to wait until after Thursday like everything else. =)

Keep Piling On Those Degrees

2010-01-13T08:00:00.000-05:00

I would like to thank Moneyapolis for bringing my attention to this Chronicle article, Graduate School in the Humanities: Just Don't Go.

The author, a professor in the humanities, makes the argument that getting a Ph.D in a humanities discipline won't necessarily mean you will end up with a tenure-track job at a prestigious university. In his own words:

in this era of grade inflation (and recommendation inflation), there's an almost unlimited supply of students with perfect grades and glowing letters. Of course, some doctoral program may admit them with full financing, but that doesn't mean they are going to find work as professors when it's all over. The reality is that less than half of all doctorate holders — after nearly a decade of preparation, on average — will ever find tenure-track positions.

I've written about this before, though focusing on master degrees. A topic close to my heart considering I'm currently going for my second one.

What is interesting is that I finished undergrad as a complete lover of humanities. I ended up majoring in English and minoring in Philosophy and Latin. I still believe that studying these disciplines prepared me really well for real life. I left college understanding how to construct a sentence, write a well argued paper, analyze texts, and think critically. All things that have helped me in my career.

However, when it came to graduate school my thoughts turned much more practical. First, I considered law school (never went through with it). Then, I ended up getting an M.A. that actually prepared me to work in a specific field. And now, I probably could not get more practical and the degree I'm obtaining will only increase my job prospects. Most importantly, never once have I regretted any of these decisions. I'm glad I went practical and it's articles like these that help reaffirm my decisions. And who doesn't love that? =)

Net Worth

2010-01-11T09:00:00.000-05:00

I decided it was time to compare my net worth. My net worth has increased 18% from last year at this time.

I know I should be happy with 18%, especially with the financial problems of 2009, but I'm a little bummed it is not higher. However, a steady increase is 100 times better than no increase or a decrease. So here is to a better financial situation in 2010!

Wedding versus Travel

2010-01-06T08:00:00.002-05:00

I'm currently saving heavily for both a wedding and for travel. The traveling will happen in June, the wedding in November. For the travel I'm budgeting $3000, for the wedding I need to save at least $5000 to supplement the generous gift from my parents.

My challenge is how to save for both. I already have $1000 saved for travel (which has already been spent on my plane ticket). So I need to have $2000 in the bank dedicated to this trip before June. Right now I'm putting $200 a month into my travel fund, which will not get me to where I need to be in time. My plan, tax return. This will actually be the first time I'm planning to use the majority of my tax return money on travel. Normally it goes into savings for my Roth IRA. Of course at this point I don't know how much money I'll be getting back. But I know I will get back money. I pay a lot of taxes and pay a lot in interest on my mortgage, so I'm not too worried about getting a return.

If all goes my way and my tax return can be used towards travel I'll pull the $200 I'm contributing towards travel and add it to the $200 I'm putting towards the wedding savings. $400 a month towards wedding savings will go a long way. If I can do that from February to November I'll have $4000 saved. To meet that extra $1000 I'm going to try come below budget every month. This is not something that is easy for me, but I have done it before so I know I can. It is not going to be easy, but saving this money is important and doable. And who knows, maybe I'll actually get a raise in 2010!

Financial Year In Review

2010-01-04T08:00:00.000-05:00

I have yet to write about my financial year wrap up. My fixed expenses are my fixed expenses, so where I try to budget is in my liquid expenses. In 2008 I spent $11,488. In 2009 - $13,906. In my liquid expenses I include the following categories:

Clothes

Computer/Electronics

Dining

Donation

Entertainment

Fees

Gifts

Groceries

Health

Hobbies

Household

Insurance

Laundry

Media

Misc

Moving

Personal Care

School

Sports/Fitness

Transportation

Vacation

Now that I have two years worth of data I can actually do some interesting comparisons. However, before I do so I need to explain how I budget. For me, it all matters when I pay for something, not when it happens. For example I bought my round trip flight to India in December. So that $1000 goes into my 2009 budget, not 2010, even though I'm not going on the trip until 2010.

So here are my observations:

As in 2008, in 2009 my largest expenditure was eating out. However, in 2009 I spent 34% more than 2008.

Once again similar to 2008 is that my next largest expenditure in 2009 was gifts, and surprisingly the numbers are only off $1.

Groceries was third for both years, though I actually spent less on groceries in 2009 than I did in 2008. That sort of explains the increase in dining out.

My 2009 surprises include how much money I spent on health (over $1000), but to be fair this includes my new glasses. I also spent $300 more on clothes in 2009 than 2008.

Finally I had some new categories, including school ($647.37) and moving ($974,01).

This comparison makes me feel a lot better about my spending. Yes in 2009 I spent $2418 more than in 2008 on my liquid expenses, however that includes two new categories and having to purchase new glasses. So all in all I'm happy.

I should also talk briefly about my fixed expenses as these went up this year. In 2009 I have my mortgage (my sister pays for the majority of it as rent), my rent, maintenance, Roth IRA, Student Loans, Cable/Internet, Electric, and my phone. The increases were in my maintenance, contributing to a Roth IRA again, and an increase in cable/internet, because in 2008 I only had internet.

What I don't include in my fixed expenses are anything that gets taken out of my paycheck, which includes my 403b contributions and my metro cards.

photo by JohnB49

2010 Goals

2010-01-03T09:00:00.001-05:00

Ahhh 2010, I have great hope for you. By May I'll have my first year of my graduate program and hopefully only have a year and two summers to go. In June I'll be traveling in India and hopefully having an amazing time. Come early November I'll be getting married to an incredible man I'm completely and utterly in love with. And then, a few weeks later I'll be turning 30. Yes, 2010 you are going to be a good year.

But, 2010 you are also going to be a very busy and hectic year. And it all begins on Monday. In January I'm taking a three week course for three credits. In the spring semester I'm taking three classes while working full time. I'll be gone for almost a month traveling this summer and most likely F will be gone the following month. All of this while planning a wedding.

I'm going to have to learn how to prioritize and relax. Most importantly I'm going to have to learn how to control my stress. I pretty much stopped exercising last semester. Most weeks I only ran once, if at all. Yet, running is a great stress reliever for me. Exercise, needs to be a priority. So does my relationship. F also leads a very busy life and so it will be very important that we always make time for each other in the upcoming year.

All of these considerations went into my goals for 2010.

Goal #1: Relax, stress less, and let go of the little things.

Goal #2: Save $10,000 towards retirement between my 403b and Roth IRA. I was only short $1100 last year, so I know I can make this goal this year.

Goal #3: Save and maintain $8,000 in my emergency fund. It is going to be impossible to really build this up while saving for a wedding, so my goal is to maintain an amount that makes me feel comfortable.

Goal #4: Donate at least $25 to charity every month and start volunteering again, even if it is only once a month. To help me maintain this goal I've authorized an automatic deduction from my paycheck every month. $20 will be going to a local charity that helps support the community. The best part, 100% of my donation goes to helping.

Goal #6: Have the money saved for my India trip before I leave. In other words, no credit card debt.

Goal #5: Find time to exercise. Enough said.

Goal #6: Pay for the wedding in cash. In other words, the day after the wedding there should be nothing on my credit card that I can't pay off right away.

Goal #7: Make time for myself and for F.

I have a lot of goals this year, but they are all goals that I believe can be met.

2009 Goals

2010-01-02T12:00:00.004-05:00

There were quite a few bumps in meeting my financial goals in 2009. However, personally it was a great year. I moved in with my boyfriend and then he became my fiance. That in itself makes 2009 my best year yet. However, it was really good in other ways as well. I got into graduate school; I'm loving my classes; work is good and still rewarding/challenging; and overall I'm in a really good place.

However, financially 2009 was tough. The year came and went without a salary increase, even though work got busier. The extra costs of fees and books for school, plus the cost of moving means I spent more this year than last. And, I often felt like I couldn't save as much as I would like too because things always came up (remember when my cell phone and glasses broke within a few weeks of each other).

Things changed a lot for me in 2009 and I did not always update my goals to reflect these changed. My 2009 goals were:

Goal #1: Retirement: Between my company's contribution and my SRA contribute $10,000 to my 403b

Goal #2: Emergency Savings: $10,000 by January 2010.

Goal #3: Return to school for another Masters degree.

Goal #4: Make $100 in supplemental income a month to boost my savings.

Goal #5: Contribute at least $25 a month to charity.

Goal #6: Continue to contribute $20 a month to my boston terrier fund and at least $50 a month to my travel fund.

Here is how I did:

Goal #1: Overall I contributed $8,900 towards retirement. Only $8,550 of that was towards my 403b, the other $350 went into my Roth IRA. I'm disappointed I fell short of this goal, but I'm still happy I managed to contribute so much. When I made this goal I was banking on a pay raise to help meet $10,000 (I contribute a percentage of my salary to my 403b).

Goal #2: Sadly I failed at this as well. My emergency savings is just at $7000. There were many unexpected expenses that came up that meant I could not save as much as I wanted. I am most upset about not making this goal.

Goal #3: DONE!! =)

Goal #4: I actually did this the first two months of the year, but I soon came to realize that the time I spent trying to make that extra $100 was not worth the effort. I really value my downtime and I was losing a lot of that time. This is a goal I gave up on pretty soon into the year.

Goal #5: Sadly, my monetary giving went down quite a bit this year. But I already have a solution to this for 2010 which I'll go into more details about when I write up my 2010 goals. Until school started I was really good about giving my time, but that too stopped come September.

Goal #6: My F (fiance) and I talked about my Boston Terrier fund and decided to disband it. Since we are quite a few years off from being in a place where we can get a dog we decided the money could be better used elsewhere. I put some of this money into a school fees & books fund and the other into a travel fund.

So overall I failed pretty miserably at my goals in 2009. However, it was still a good year and I have high hopes for 2010. With a wedding, it will be tight financially, but hopefully a very rewarding and happy year.

photo by scottwills

Happy New Year

2010-01-01T15:03:00.001-05:00

Happy New Year!!!

regular postings will return tomorrow...