Sticking to the Plan Is Hard For Me

I didn’t write about this at the time because I was in the middle of a crazy run of work/travel stuff that ate up the entire middle of this month, but in a quiet moment before an end of the month post, I wanted to talk about a financial move I made a couple of weeks ago.

From a net worth perspective the end of the month is looking good — I’ll save the details for the wrapup post — but things have moved around some. When the markets were tanking, I took $500 out of my emergency fund and $200 out of my travel savings fund and put it into my Roth IRA, along with another $100 I had already earmarked for the IRA. So, instead of being at $1000 (as planned) my emergency fund will end the month at $500, and I won’t have as much available for my spring break trip.

I don’t think this was a really bad move; I didn’t *quite* manage to catch the bottom of the market (it fell for two more days after I made the move) but overall, I’m pleased to have made a contribution to that account, which I hadn’t done in a while (extra income’s kind of dried up around here and I’m mostly working with my paychecks right now) and to hopefully harvest some buy-low gains. I’m also not super concerned about the emergency fund as such; it should be up to $7000 by the end of 2015 easily if I stick to the plan and, you know, don’t have any emergencies.

I guess what worries me is that I’m still not very good at slow and steady. I’ve always been a boom and bust person financially, great at going short sprints in both spending and paying off debt and even saving, but I don’t really like the patient “allocate $50 a month to this account and build it up over time” thing. I’ve been having a really hard time not just paying off my credit card with what was accumulating in the savings funds, for example. All the time I look at and think “I could just be done with that!” But that would really drain my tiny-again savings accounts now.

And I have to be careful, because I need to think about having available cash. One of the things I like about the retirement funds is just that they are locked up — I won’t ever access them until I’m, you know, retired. I’d never take out money from them for any other reason; in the event of long-term unemployment, catastrophic debt, etc, I’d certainly declare bankruptcy before drawing from them. They are untouchable for the next thirty years or so. This makes me really want to put money into them so it’s “safe.”

But I have other goals besides retirement. I might need money for a down payment (on an apartment, if not a house) or to buy a new car or for whatever, you know? I can’t just throw every spare penny to retirement; I need to build up significant cash reserves. (It sucks that interest rates on savings accounts are so low.)

I don’t know what to do about this, exactly, except be more aware of it and try harder to enjoy funneling small amounts of money to different places instead of making big splashy moves.

The Latte Factor, reenvisioned

I just baked some cookies, and as I cleaned up — by which I mean, I crumpled up the parchment paper I’d lined the cookie sheet with, put it in the trash, and put the cookie sheet away — it occurred to me that using parchment paper to bake cookies with may be the least frugal thing I do on a regular basis. You don’t need it — you could just, you know, put the cookie dough on the tray, bake the cookies, then wash the tray — and it costs a few dollars a roll, and I go through maybe $10 or $15 worth of it in a year. (I bake a lot of cookies, and also use it to line cake pans sometimes.)

It doesn’t really bug me that much, but I notice it as something I spend money on that is definitely a convenience and not a “need.” Do you have something similar in your life?

Interview + Murphy

Thanks very much to Brian of Debt Discipline, who’s featuring me today in his blogger interview series. Brian recently paid off all his debt — woohoo! — so I think we can agree he’s hella cool. And he was kind enough to wait a couple of weeks for me to answer the questions, too, after some life intervened in the form of conference travel, that head cold, and my favorite baseball team doing unexpectedly well in the playoffs 🙂

Other than that, things are going ok, except I’d like to know why Murphy-ish stuff always waits til the very end of the month, right when you think you’re gonna make your budget, to start happening. Last month it was the news I needed a new car battery (an expense I actually kicked over to October, but still); this month, all hope of having to avoid the travel fund for this weekend’s trip died when I had to make a bunch of last-minute medical co-pays and my EZPass auto-renewed. Oh well, it could be worse. But next time you show up, Murph, how about doing it at the beginning of the month when I have more room to maneuver?

Mid-month check-in

Thanks to everyone who commented on my last post — it took WAY longer than usual to reply, but I’ve now done that.

The reason is that I’ve been traveling for work again; just got home after a jam-packed three days. And of course I just lost the battle to fend off a full-blown cold, so I dragged myself to the grocery store this morning, but intend to spend most of the rest of the day in bed. It’s just a cold, but I’m all stuffy and feel awful. Blech.

I find this grocery list hilarious, because — what?! — but I’m only in town for a few days until I leave again on Thursday evening, and I have leftovers to eat too, so I just got a few items.

Timer (mine fell off the fridge and broke last week): $5.99
Sweet potatoes: $2.14
Broccoli: $1.99
Raisins: $3.29
Cheese: $13.96 [The brand of cheddar cheese I like, Cabot, is super expensive out here, but it lasts forever if you keep it unopened in the fridge, so I keep an eye out for sales, which usually come along every couple of months, and stock up. I bought four 8-oz bars today, paying $3.49 each and saving a total of $9 off the regular price]

Total with tax: $28.00

I also bought three boxes of tissues, for $1.00 each (Kleenex were on sale, score) but those come out of our shared household budget, not the grocery money.

Overall, I’m doing ok on the month. I have a little over $50 in cash to buy groceries and food next weekend (to cover the last week of the month) and about $80 left in “slush.” The possible down side here is that next weekend’s trip is going to involve 12 hours of driving, which is a lot of gas; I’d like to cover this out of the month’s budget without having to dip into the travel fund for two months in a row, but I guess we’ll see.

How on earth are people doing this?

This is a topic I’ve touched on before, so bear with me if you’re a regular reader, but I’m astonished all over again.

The median family income — not for an individual, but a family — in the United States in 2013 was $51,939.

My personal income — just for me — in my current job (alas, old overpaid-for-my-field job, I miss you!) is $47,500.

So I make about $4500 below the median income. That’s probably a take-home pay differential of, say, $3000/year. While I could certainly put an extra $250 a month to some use, it wouldn’t pay for a spouse and children, that’s for sure.

And I’m using every penny. Granted I’m putting a lot towards retirement savings. But in theory we all have to do that, especially those of us starting late (as I’m sure most people at or below the median are.) Rent, food, car expenses, it just…adds up.

I’m fine — I can definitely live decently on this amount of money, though God knows I’d rather have more so I could travel more freely to see my friends, or save up for a house — but I just don’t know how families are getting by.

My transformation into my grandmother is 90% complete

So I guess the really big news today is I logged into my credit card account this morning and found that someone had made $400 of unauthorized charges that were all still marked “pending.” I called the company up and canceled the card, of course, so it should hopefully be low-drama and end there.

But what I actually want to talk about is my trip to the grocery store today. I’ve got some leftovers and we’re planning to use some stuff from the meat CSA to make spaghetti and meatballs tomorrow night, plus I’m on another trip to Chicago from Thurs-Sat, so I didn’t want to get too much. But I did need to replace my vanilla, having used the last of it to make my housemate’s birthday cake yesterday. (It was delicious, in case you were wondering.)

Now vanilla is expensive. I got to the right aisle and started scanning the per-oz price (something I’ve been doing a lot lately) only to be stopped in my tracks by a special: store-brand organic vanilla extract, 2 2-oz bottles for $5. This is insanely cheap; the other kind of organic vanilla extract was more than twice as much. Naturally everyone else had already noticed this so the shelf was empty.

Old me: sighs and buys McCormick’s vanilla for $5 for a 2-oz bottle.

New me: tracks down a store associate and asks if they’ll see if what I want is in stock. Answer: no, “but we can substitute.” So I ended up getting regular (not organic — but real, which is what I actually cared about) vanilla extract, 2 2-oz bottles for $5. Again, an insanely good price.

Then I got home and laughed at myself, because this is the kind of thing my grandmother of blessed memory would have bragged about for at least a month while teenage me tried not to roll my eyes. Maybe more. I miss her.

So, here’s my grocery bill for the week:

Parsley, $0.79
28 oz crushed tomatoes, $1.59
28 oz diced tomatoes, $1.59
Organic kale, $1.99
Vanilla extract (YEAH BABY), $5.00
Onion powder, $3.29
Loaf of bread, $4.75
2 chocolate bars to take to work for afternoon snacks, $5.00

Grand total with tax, $24.35

Basically, the food plan for the week is: spaghetti and meatballs (hence the tomatoes, kale, bread (for breadcrumbs) and parsley, to go along with meat, parmesan, eggs, and whatnot we already have), plus a leftover lentil stew thing, plus some combinations of eggs and toast and peanut butter sandwiches and whatever the hell else, because we only have four days to cover until I go to Chicago on Thursday morning.

Yeah, I’m keeping the car

When I look back at my last year, aside from paying down debt and paying rent, my single biggest expense, by far, has been my car. I paid $4000 for it to a friend of mine, and registration, taxes, maintenance, and parts (oil changes, new battery this month, new muffler last winter) are in the vicinity of $1000, give or take a hundred bucks. Plus every month I pay a minimum of $100 in insurance and gas; my guess, although it really is only a guess, is that I’ve spent more like about $2000 on gas/insurance in the last thirteen months.

So basically what we’re saying here is that I could have, roughly, $7000 more in the bank right now if I’d resigned myself to biking/walking everywhere (plus I’d be in better shape). Or maybe $5000 if I’d rented a car every time I needed to make an out of town trip and bought bus tickets for local transportation.

Part of me is saying to myself: “if you really wanted to be financially sound, you wouldn’t have bought the car until you were more solvent, or better yet, you’d never have a car at all.”

And the rest of me, by far the biggest part, is saying: I love having a car. Actually, I don’t love my specific car; it’s a 2-door, which I don’t like, and I’d prefer to be a little higher up than my tiny low-slung sedan lets me be. But it’s fine as a car, and it’s more the principle of the thing: at age 35, I love having a car. I love that I’m killing my back less by hauling around groceries and books and whatever else. I love that taking an out of town trip doesn’t involve a ton of logistics around getting to the rental place, doing paperwork, blah blah. I love that it’s easy to get out to pick apples or hike or whatever. I lived in New York for 11 years. I went hiking in a state park in New Jersey once, because it was so complicated and expensive to get out there. I don’t have to beg and borrow when I need to transport boxes (I used to spend a lot of time in NY trying to figure out who I knew who had a car that I might be able to borrow for whatever.)

Mostly, though, I really love the feeling of security it gives me. If things go south with my job or my housing situation, I can carry more with me than a suitcase and a backpack. I can get to friends or family in other cities. Dealing with disaster is infinitely easier when you have a car. Even if there’s nothing dramatic, I’m still going to be moving again in the near future; I don’t have to entrust all my most valuables to movers; I can pack them in my car, like I did the last time. It is just so much easier.

So I guess it’s worth the constant ongoing costs, to me.

End of September Update

Another month gone! Progress, progress, progress (mostly.)

It was a reasonably successful month; I’m ending it about where I’d hoped I would be in terms of spending, but I didn’t get there quite in the way I expected to. Also, the markets took a tumble towards the end of the month, which is kind of depressing in terms of my net worth numbers, but I don’t have any control over that, so not much to do but shrug and keep on keepin’ on.

Here’s my expected/actual budget numbers for the month:

Some notes:
1. The food budget there is ridiculous. What happened: my roommate and I bought a share in a meat CSA, for $140 each. We get five months’ worth of local, ethically raised meat (chicken, beef, and pork.) It’s a little expensive, but she wanted to do it and I thought I could afford it. So there was that. But then I also went overboard on buying coffees and snacks this month; in October, one of my goals is to meal-plan better so that I have afternoon snacks to bring with me to work rather than caving and buying stuff at work.

2. But that was mitigated by the fact that two major expenses I was expecting to materialize, didn’t. I’d been saving up for a big utility bill (I need to pay the entire summer’s electric bill) and it turns out I didn’t need to — I had $200 budgeted for it and only needed $80. Then, I had $90 in the budget because I was expecting to need to pay a final phone bill on my old plan, and maybe also pay for the first month on my new plan. But it turned out that I was paying ahead on my phone plan (who knew?), and I won’t have to pay for the new one til next month. So, great.

3. I moved most of the savings from #2 into “slush” where it ended up covering even more food (see above), entertainment, and charity expenses.

4. Medical: That’s the dentist’s bill for a cavity I had filled, plus a couple of co-pays for doctor’s visits and prescriptions.

5. Travel: I took a weekend trip to Chicago at the end of the month. I was able to cover some expenses out of slush, but didn’t have quite enough, so I’m withdrawing a little from my travel account to cover the rest.

6. I also almost had to blow both my travel and e-funds right at the end of the month even though I’ve only just gotten them started! My closest friend had a family emergency that I nearly flew out for, but that ended up not happening. And I dropped my ipad and cracked the glass, making it unusable. However, I have a small freelance check coming in early next month that will cover the ipad repair, so even though I’d rather be putting that money in my IRA, I guess it’s good that I don’t have slow down my credit card repayment.

Like I said, the markets dropped a bunch — I lost pretty close to $200 in my retirement accounts, which kept me much further from my net worth target than I wanted to be. But c’est la vie. I still made decent progress, and barring a total October-1929-style event, I should be on track to hit $10K in net worth in November, and to pay off the last of my credit card debt in December.

How’d y’all do in September?