settling in for the long haul

As I look forward to the end of my student loan debt, I’m kind of relieved, but also kind of intimidated. I think that years ago when I imagined being out of school, with the loan paid off, and employed, I was also imagining feeling less broke — like I could travel without guilt, for example.

Well, nope.

The thing is, I MUST get serious about remedying years worth of not saving. I’ve committed, beginning in July, to sending 25% of my pre-tax income to a 401(k) and any and all “extra” income to a Roth IRA. This is a rate far above what most people recommend, but what else can I do? I’m not getting any younger, and that’s not even going to get close to maxing out for the year, anyway.

On top of that, I need to put something aside every month in a housing fund (maybe a down payment, maybe just a future security deposit); in a car-replacement fund because I’ll likely need a car within the next 5 years, given the age of mine, and I’d want a decent down payment at least; in a medical-emergencies fund. I need some new clothing pretty soon and I’d like to have the money for that put away rather than have to have everything on the credit cards.

The reason why I’m sounding glum rather than excited about this is that I just decided I can’t go to a friend’s wedding this summer. It’s on the opposite coast, and a round trip flight is over $500, plus lodging and assorted other (transportation from the airport, probably some meals out, etc.) And the friend isn’t a close one; a college friend I always liked and would love to see get married, but I just think I can’t justify the cost of it.

It’s bumming me out though because I wasn’t thinking I’d be more income-restricted as an employed person than as a grad student. When you want/need to route basically all your income to savings, though…. I think there’s just not going to be much extra for a while. Maybe a long while. And it’s kind of a downer.

End of April Update

The end of April, the end of the semester, the time for single people to pack up and head on the road to see their friends who can’t travel because they all have toddlers 🙂 Aside from a massive student loan payment, my biggest expenses this month were all travel-related: lots of gas from driving around to see friends and family and to a conference, and booking plane tickets for a trip to California I’m making next month. This month doesn’t look so awesome from a net worth perspective because of how much is currently sitting on the credit cards (plane tickets, moving expenses) but I’m majorly excited anyway because of one big goal met:

That right there is student loan #1, showing a balance of $0 yesterday! The gory details of its history:

I started making payments on it two months before it came out of its grace period. In total, I ended up paying only $161.88 in interest on a $10,197 loan! That’s even better than I thought I’d done when I ballparked it yesterday for Girl Meets Debt.

To be continued with student loan #2, currently sitting at -$5086.47….

So, April spending:

Student loan #1: $2418.48
Student loan #2: $88.34

Car expenses (gas, oil change, tolls): $482.35: OUCH. Wow. So, uh, I traveled a lot this month. All by car. It added up. Eesh. Luckily about 1/4 of that is reimbursable and I’ve already submitted the receipts and everything.

Rent and utilities: $1061 — this includes buying a new smartphone to replace my four-year-old flip phone and get on a much cheaper plan (if it works) by joining Republic Wireless — we’ll see how this goes; there’s a 30-day-back guarantee so I might end up returning the phone.

Travel and entertainment: $392. Not bad for a round trip to Los Angeles, another RT from LA to San Francisco, and a concert ticket. It all has to go on the 0%, cash-back credit card and be paid out of later paychecks because of the debt payment…but I just wasn’t willing to not make this trip.

Food: Well mint.com says $171. Hah! If only! Since I’m not yet tracking every penny (I am going to start in on that once I’ve moved, started my new job, and have paid off the student loans) I have no idea how much went out in cash that isn’t covered by that figure. I’m guessing that the real food costs for the month were easily $400 and that’s what I’m going to count here.

Misc: mint.com says $146. This includes a tax bill, the pharmacy, and some money withdrawn for cash spending. Seems about right.

Totals:

Money applied to debt: $2506.82
Money spent on everything else: $2481.35

Grand total: $4988.17

And…yeah, that’s more than came in this month, which explains the state of the credit cards, currently sitting at -$1794. (Some of that is reimbursable and — I’m reminding myself — all of it is at 0%, so <i>focus on the student loans</i> remains my plan.) A budgeting revolution is definitely on the horizon.

<b>Debt total: -$6834, a change of +$870 from last month

Net worth total: -$3343, a change of +$1177 from last month</b>

This being honest with yourself financially thing is exhausting! So much math!

The Stupidity Tax

I forget where I got this term from, but it is meaningful in my life. It’s the phrase I use when I wind up paying a fee I shouldn’t have, or paying more for something than I should have because I didn’t do enough research.

In this case it’s (ANOTHER) $20 parking ticket. I just had one last week! They’re both from forgetting to check the street cleaning signs to see where I could/couldn’t park. I did this twice when I first moved here, and then vowed “never again” — and kept that vow until last week when I didn’t check, and today when I didn’t check. I guess I’ve had a lot on my mind, but I’m just so mad at myself for being so flaky. This is $40 I definitely could have spent in better ways.

Including the $20 bill I dropped somewhere on the ground at the farmer’s market earlier this year, I think this brings the stupidity tax total for the year to $60 (two parking tickets, one lost $20). I suppose in the grand scheme of things it could be worse, but…still.

The worst is that I know they do not need to “street clean” this often and it’s not even clear they *do* street cleaning. I think it’s mostly a convenient way to raise a lot of revenue that the city then doesn’t have to get from other sources who would be even less happy about it (businesses, income taxes.) This way the burden falls most heavily not on the richest, but on the dumbest.

Including yours truly, I guess. Sigh.

Weekly update: false uglification

The numbers look sooooo bad right now on mint, but they will improve a lot by early next week (probably Monday.)

Spending, April 20-26:

Travel: $31.50 for a ticket to be used during my CA trip; $138 for plane tickets

Food: $75 — again a bit of a guess, since there was some cash for coffee etc here and there. Didn’t have to buy groceries this week so this was all meals out, drinks at a conference. They do add up, huh.

Phone: $178.62. This is literally for the phone, plus a month of the plan.

Car insurance: $53.50

Gas: $118.12 (reimbursable) (Most of this is for a conference I’m attending, a 10-hour drive away from home; this is a TON of gas, way more than I usually get in month.)

Stupidity tax: $20 (parking ticket)

Student loan payment: $2418.88 (KILLING IT, this student loan is no more — soon to be followed by its brother. Or, well, within the next few months anyway.)

Weekly total (without the student loan payment: $614.74, of which $116 is reimbursible, making the real total $498. This still seems like a lot — except for the week I pay rent, I feel like my weekly expenses should rarely be more than a couple hundred bucks — but maybe not. Maybe there’s always something; food is a constant, but something else, a utility bill, something I need to buy, is always coming up.

Payday at last

Of course it’s all going right back out the door 🙂

But the first thing I did this morning when I woke up was head over to student loan lender #1 and click on “Pay off loan.” I’ll give numbers in the weekly and monthly update, but this is just a short little note of cheering!

Also: I looked at the old repayment schedule. If I’d taken ten years to pay it off, I would’ve paid about $4000 in interest over the life of the loan. Instead, by paying it off almost a year to the day after graduation, I’ve paid around $300. (Have to add up the exact amounts; again, will do that later.)

So striking.

Single and sighing

This article is geared towards Canadians, but I still found it interesting: “Going It Alone: Retirement for Singles” (2011).

There were a few things in it that made me think about my own situation:

(1) It confirms my sense that there are tradeoffs involved. I pay higher tax rates and have higher housing costs than if I were splitting a 1-bedroom apartment. On the other hand, I’m not paying for children, and I bet that will easily save me the $250,000 the article mentions over the course of a lifetime. I could see how it could be more — you need a bigger housing situation, medical care, school stuff, clothes, food, and then eventually college plus, if they’re anything like I am myself, they then need financial help while they figure out what they’re doing in their adult lives!

(2) It reminded me that nothing is certain. The sisters they interviewed had both been married; then one was divorced and one was widowed and they were right back where they started! Even if I were married, the odds would have to be at least 50-50 that the other person would die before me.

(3) Yeah, I have to seriously get going on this savings thing. I feel (and am) so far behind.

A new goal for 2014: Side Hustling My Way to Retirement

I’m in a little bit of a panic about retirement. I’m way behind where I should be at 35! If I had a guarantee of a steady income for a while to come, I could relax. But I don’t; I have a guarantee of two more years, at a rate of pay significantly below my rate this year. And I’m actually looking at a lifestyle crunch, because while my student loans will be paid off, that’s all I did this year: pay my loans and live. I only managed to save a couple thousand on top of that. So it’s a damn good thing my cost of living is going to drop in Indiana, because my pay will be dropping and I need to get really really serious about this retirement thing.

I’m starting a 401(k) at my new job in July, and I’m going to have $1000 a month held out of a (gross) $4000 paycheck, which is, I know, a lot, but seems necessary because I’m playing so much catch-up. I’m not sure exactly what my take-home will be like, but I’m guessing it’ll be around $2000, once the 401(k), taxes, health insurance, etc, are removed. I’ll have monthly fixed expenses (rent, utilities, phone, car insurance, grocery budget) of $650. That leaves a lot of discretionary income to save for travel, future housing costs (down payment fund), medical expenses, gas/car stuff, clothing, and just plain fun…except that if I’m going to fully fund a Roth IRA for 2014, I’d need to keep back $900, which would leave me with only $450 for all those savings goals plus slush/fun money. Not a lot.

Conclusion: I need more income, and that income needs to not disappear into the black hole of the slush fund. It needs to go directly into a savings account that I use to buy Roth shares whenever it hits a certain amount, say, $250.

So, here’s a goal for the remaining 7 months in 2014: $5500 in extra income, all of which will be directly routed to the brand-new savings account I just set up, no excuses, no exceptions!

Other income I intend to route this way, if I can pick up any of this:
–interest from savings accounts (not likely to be much, but still….)
–author royalties
–honoraria for speeches (I’ll be lucky if I can land one of these this year, but….)
–usertesting.com
–ebay and amazon and craigslist
–freelance editing (I hope this will be my main source; I need to start getting some gigs though)
–babysitting? tutoring?
–promotions, like “open a new credit card or checking account”

I’m starting it out with $68.96 I just made through a combination of ebay and usertesting.com. Only $5411 to go!

It’s Sort of Fun To Talk About Spending: A Weekly Update

As I mentioned yesterday, I’m sort of obsessed right now by money. This hopefully will not last forever — I would like to get back to thinking about other things — but there you go. Right now it is actually fun to look at my mint.com account and my bank account and everything and just see, you know, what did I spend? Where did it go? So I decided that I’d do a weekly spending update. I don’t know how much I’ll really learn from this but…why not, basically 🙂

So, April 13-19, how’d we do?

Food: $125 [This is a bit of a guess; my mint.com transactions on groceries, two meals out, and so on, added up to $75. But I know for a fact I spent $25 yesterday in cash at the farmer’s market and another $16 in cash for dinner out, and I also spent some money on coffee and so on in cash throughout the week. Oh my God, I *have* to get my food costs under control, because this is a very typical week, frankly — which means I could easily be spending more like $500 a month. On food. For one person. Well, I guess this is what they mean by a wake-up call.]

Car: $96.18. This was an expensive week; gas, but also $35 to my EZ-Pass account and $27 to get the oil changed.

Travel: $219.13. Round trip tickets to California (I also used points, so this is not nearly as high as it could be, but still.)

Reimbursable: $155 for a conference registration and $573 for moving costs.

Student Loan: $88.34. This is the minimum payment on my Sallie Mae loan, which I’m making monthly while throwing huge amounts of money at the Great Lakes loan which has a higher interest rate.

Federal Taxes: $8.00 [seriously]

Other: well, it hasn’t actually been charged yet, but I bought a new phone. My cell phone bill has been bothering me for a while; I have an ancient (4 year old at least) flip phone, but I pay $55 a month for talk and text, and that just seems HUGE. So I decided to try Republic Wireless, a company where you use wifi for calls and texts when you can, and 3G when you can’t. It’s $10 a month but you have to buy the phone. So I was waiting until they released a cheaper phone, which they did on Thursday; it’ll be $150 out of pocket but with no plan or whatever, and obviously if it works I’ll be back in the black after just a few months because the plan is so much cheaper. It has a 30-day money back guarantee, so I’m going to keep my old phone/plan until I find out if this new one really works.

So I guess I won’t count that in my total because (a) it hasn’t even been charged to my card yet and (b) I’m not sure if I’m really keeping it.

This means my expenses for the week were…holy shit…$1264, of which $728 is reimbursable, meaning that I have to pay for $536 of it (plus the phone eventually.) Wow.

On the upside, even though I have more plane tickets to buy, next week pretty much *has* to be cheaper! Nowhere to go but up!

Waiting for payday

Right now, I’m having some psychological trouble — we get paid once a month, and literally since the end of last month I’ve been counting the minutes until I get paid *this* month, so I can throw a lot of money at the student loan. I just want it GONE, and it can’t be until I get three more paychecks.

This is weird, because, like, in the meantime I’m supposed to be living my life — doing my job, not just waiting for a check to come in! It’s been hard to focus on anything but my net worth this month, though.

(Although that is not going to look pretty at the end of April, for two reasons: I decided it was silly to count my car, since that just doesn’t seem to qualify as an asset. It’s not like I’m going to sell it, after all. So I took it off mint.com. And second, I just put a ton of stuff on my credit card: I had to book movers, and nearly all of that will be reimbursable, but in the meantime it’s going to sit on my card (which luckily has an 0% rate for the next year) and look ugly, until at least the end of July. And also I bought plane tickets for my May/June expedition to the West Coast, so there was a bigger expense than I usually have in a month, here. We should be in positive territory anyway by the end of the summer — debt paid off, moving expenses reimbursed, plane tickets paid down — but things are going to be weird for a while.)

But, psychologically, I’m going to have to get over just sitting around waiting to get paid, or realistically, I won’t get paid for much longer!

Cutting Costs for the Already Pretty Frugal

I both have and have not been good at managing money in the past. I’m about 12 years past the point at which I wish I’d started saving something, anything, for retirement. There’s also one really, really big expense I wish I’d cut: I wish I’d accepted the necessity of a cheap apartment a few years longer. I lived in my very very expensive grad school city for that entire twelve years out of college, and for the first eight of them I lived within my means. I cycled up and down through credit card debt when I was freelancing, but never carried a balance longer than a few months at a time, as I prioritized paying it off when I had a work project going. (This left me with amazing credit, by the way.) I lived with roommates and/or in dirt-cheap parts of the city (sometimes both) and took on second jobs while in grad school.

But during the last four years, I had had enough of living in a part of the city that was incredibly inconvenient for my social life. It took me nearly 2 hours to travel from the neighborhood where I lived to the neighborhood where most of my friends lived, and as a result I rarely saw them. So I moved, and then I moved again to a different place in the same neighborhood. My social life *definitely* improved, but all my expenses went up — rent, food, transportation, everything. This is where the majority of my $19K student loan went.

So ANYWAY, I regret not working harder at finding a much more affordable living situation in New Neighborhood (I don’t really regret moving in the first place — maybe a little, but not much.)

But really — all things considered — I have lived a damn cheap life, which is why I’m not in much worse financial shape after all that grad school time. Here are things I don’t do:

(1) have cable
(2) have a smartphone
(3) drink (mostly; I’ll have a glass of wine every now and then)
(4) “shop” — not that I never spend money on books, clothes, or music, but going out looking to buy stuff isn’t a hobby. Good thing too since I move so much.
(5) wear makeup or engage in a lot of beauty routine stuff — I get my hair cut, which is probably my biggest personal care expense. (For several years I did it myself, too.)
(6) go to a lot of concerts or other non-free entertainment
(7) drive a car that is even new-ish

There are other things I spend money on that do feel like necessities:

(1) some clothing
(2) therapy, at the moment
(3) cell phone
(4) travel. I don’t live in the same place as any of my friends/family. Plane tickets and gas add up.

This leaves things I probably could stand to cut back on:

(1) food — sigh. Yeah. I spend a lot of money on food. I do bring lunch a lot, but not every single day. When I’m at work, I generally buy a cup of coffee in the afternoon, which runs around $2. I buy nice produce. I buy in cash at the farmer’s market a lot so I honestly don’t have a great sense of what I spend even with using mint, but I wouldn’t be surprised if food added up to $300 a month or more. For one person. Ouch.
(2) …internet? I guess?

And it also leaves things I *could* cut back on but just *really don’t want to*. Things like the occasional movie/CD/book, or nice shampoo, or buying a new kitchen item.

So, with the big pay cut arriving in July (to go along with my loans being paid off, so things will more or less even out), I agreed to move in with a friend in New City. New City is already extremely cheap even without sharing space, and monthly rent/utilities expenses should drop to $350-400 depending on time of year — which is to say, literally in half from what they are now. All of that cash is going STRAIGHT into my IRA.

I’m not sure how long this will last — probably a minimum of 6 months, but maybe not more than that. We’re just going to see how we do with each other, and maybe I’ll end up in more expensive housing afterwards. But that’ll be an extra $2000 or so to add to the world’s tiniest retirement fund, and I guess every little bit helps.

(Also, sigh, I need to get serious about controlling the food budget.)