November update: even better!

For the first time since I started this whole thing, I didn’t end up right against the limits of my budget this month: it was that weird month where, unless it happens in the next twelve hours, nothing will have gone wrong. Looking at my “slush” entries in YNAB, I see a few gifts, a drink out with a friend when I was traveling, a $20 business expense that I can’t get reimbursed, and a big household-items Target trip that, even though it’s in the slush line item because I put it on a credit card, I actually “paid” for by reducing the amount of cash I took out for general spending and groceries. No major medical expenses, car repairs, non-reimbursible meals out, book purchases, nothin’.

As a result, I’ll be able to roll over about $200 of unspent money into next month, which is good because I will definitely have some major expenses in December. I have my annual eye exam (with associated contact lens purchase), I have some Christmas gifts to buy, and either by car or by train (making a decision this week) I have to travel to the east coast and back. Even though I am theoretically getting out of debt this month, with my last regular payment to the credit card debt that I’ve been carrying since the spring, I’m afraid I’m going to end the month right back in it since my flexible spending cushion is still so low! We’ll see, I guess. There’s not much I can do about the eye stuff, but obviously I’ll try to keep the gift/travel expenses as low as I can, and we’ll just see how things go. (I am also reducing my grocery budget for the month because I’ll be away for at least a week, so that might help too.)

Anyway, here are the November numbers, NOT including the reimbursible spending I did at the conference I was just at:

Comments:
(1) I’d been saving up to pay my friends three months’ worth of phone service (I’m now on their family plan at $25 a month) and I wrote that check while I was seeing them over Thanksgiving. For some airheaded reason I only had $70 and not $75 (the phone plan is $25 a month for my share) in that budget, hence the slight overage.

(2) I set “cash for spending,” “entertainment,” “gifts,” and “charity” at $0 for the month because, in the first case, I was compensating for what should have been a big cash purchase (household items/grocery Target run) but I put on a credit card instead at the beginning of the month as I hadn’t had time to take cash out yet. For the last three, I set them at $0 because I didn’t feel like dealing with them this month as separate line items — I spent in all three categories, actually, but I took them either out of slush or out of my cash withdrawal for the month.

(3) Travel: I bought a train ticket, then moved the excess in that category back into slush to roll over into next month. My other travel expenses this month were either reimbursible, or I was able to pay for them out of the cash I still had left over from groceries.

(4) Personal/medical: a co-pay for a followup visit from the eye infection from last month, plus a co-pay for a prescription medication.

(5) Debt and savings: right where they should be. Still on the slow and steady plan.

I had a post-tax savings rate of just over 50% this month, which is exciting! My income (including the pre-tax retirement withdrawals and the post-tax paychecks) was $3167 and I saved about $1600 of that, give or take a few dollars.

The markets had another ok month, and I moved my Roth IRA from a target date fund to Total Stock Market Index shares. I decided to keep the 403(b) in the target date fund, so I will still have some bonds and international stock in there, but I wanted to be more aggressive with the Roth. I have no plans to do anything more with it except let it sit there for the next thirty years (and feed it money when I can, obviously.)

The upshot of all of this is that, as best as I can tell (I did some math to remove reimbursibles etc from the equation) I now have a net worth of $12630, up from $10352 last month, a difference of $2278. This makes me super happy, as my stretch goal is to average a $2000 net worth gain per month over the course of the year — and I’ll have some months that don’t get to $2000 so I need some of these really good months to smooth it out! Last month was also good on this front (due more to the markets than anything else) so I’ll hopefully feel a bit better if, as I expect, December turns out to be a high-spending month and I don’t make my $2000 goal.

Why track?

Alicia got me thinking again, as she often does: why do I like to track spending? I don’t do it down to the penny, although I might try that for a month this year just to see if it’s more valuable to me than I think it would be. But I do it in a general way, keeping track via YNAB (affiliate link with $6 discount) and I have found it helpful.

The major reason people usually give for tracking is to discover where the “leaks” are in their household spending. I think a lot of people are stunned to find out how much they’ve been spending on groceries or coffee or what have you. But I’ve been pretty strictly limiting myself to a set amount of food/incidentals cash for months now, and don’t feel the need to drill down into the specifics of it as long as I keep to the right amount of cash.

Personally, I’ve found tracking helpful for two reasons. The first is that it got me to focus on some of my bills that I knew were too big (cell phone, specifically) and really look at how much they were draining from my potential free-spend money or savings.

The second is that I learned that there is no such thing as a normal week or month. Pretty much every single month, something has come up. Medical co-pays, computer repair, car repair, the books I needed to buy for class, a plane ticket, meals out while I’m traveling, a gift or three…. The reason changes every month, but the result is almost always the same: I find myself right up against the limit of my budget, or even dipping into next month’s money. (This is after I hit my very aggressive savings targets; my salary is very reasonable for a single person in a low cost of living town, and if I weren’t having so much withheld for retirement and put straight to debt/emergency fund/travel savings accounts, I would have plenty left over every month.)

When I first started tracking earlier this year, I felt like I spent a lot of time saying “this is unusual, this is a one-time thing,” but now I’ve said that, or variations on it, so often, that I just have to give up: there will almost always be something. The months where there’s something actually left over (looking like November will be one of them, unless something goes dramatically wrong in the next three days) are going to be rare. So the lesson I’ve drawn from tracking over the course of eight months is really just that old chestnut: save as much as you can in advance because you’re going to have rain, every month. A normal month is a month with unexpected expenses; it’s the smooth-sailing months that are weird and rare. To me that’s a useful enough takeaway to have made the whole enterprise worth it.

Thankfulness

Hey folks, sorry for the relative silence. I’ve been attending a big conference and visiting with some of my closest friends for Thanksgiving (they live near enough to where I was going already that it was easy to stay around for the week instead of going right back home.)

This trip is making me super grateful to my employers. By the time I add up plane ticket, hotel (I shared with a friend, but still), and eating out three meals a day, the bill’s going to be in the vicinity of $1000, and they are paying for it all. (Not the expenses associated with staying with my friends! But I just had to buy a $50 train ticket for that part.)

I’m having a quiet evening — after a full day of cooking, eating, and cleaning that started at 7 am, I sent my friends out to see a movie a couple of hours ago, and put their kid to bed. Now I’m basically just keeping an ear out for her and relaxing. It’s been a really tough few years for me in a lot of ways, and it’s setting up to be a tough few years going forward, but I’m taking this moment to be thankful for what I’ve got: a small but close-knit family, friends and godchildren I adore, meaningful work, and a bank balance that’s steadily growing, not declining. As a longstanding radical hippie communist Christian socialist (I’m half-joking, half-not), I feel a little strange about that last line item. I’m not sure it’s right to enjoy watching my net worth climb as much as I have this year. But it’s true: as I get older, headed into the second half of my 30s, I increasingly want a little more security, a little more stability. I want to be protected in case of emergency, without having to turn to my parents, who’ve already given me so much (and I’m too freaking old to be asking my parents for money!) So, yes, I’m thankful for that, and for those of you who’ve been kind enough to share some of this year’s journey with me.

Christmas

This great post at Messy Money inspired me to put down a few holiday-related thoughts.

I used to love Christmas — the tree, the gifts, the decorating, did I mention the gifts…. But I’ve actually been struggling with it for a while now. My mom (who I adore) wants to do a ton of decorating, but I just don’t usually have the energy for it; the amount she wants to do doesn’t seem worthwhile. I wish we had one box of ornaments and a creche, you know?

On top of that, since it’s the one time of year my brother and I are home together, there are usually a million social activities scheduled — there have been years when we’ve either had people over for dinner, or gone out to someone else’s, every night for a week. As I get a little older and my friends start to have kids I understand better why this has to happen and am more motivated to be cheerful about it (when I’m in my sixties, I definitely will really want to see my friends’ kids in their thirties) but for an introvert like me, it’s just a lot.

Christmas also makes me feel kind of adrift and out of sync. I’m the most seriously religious person in either my immediate and extended family or our extended friend group in my home town. By a LOT. For almost everyone, it’s a mostly secular holiday. My mom and brother do want to go to church, but I still feel weird. Easter is usually much better for me since I don’t go home for it; I get to spend it with people who I’m more in tune with, religiously speaking. (Let me be clear, I love all the people I get to see when I’m home at Christmas — it just feels bizarre since I feel like I ought to be having a spiritual experience but I never am because the atmosphere is so secular. If it wouldn’t hurt my mom’s feelings so much–she loves Christmas stuff–I’d say let’s just do a trip home in August and see all these people and forget about Christmas!)

Plus, since this is a PF blog: money. I buy very few gifts, generally. Dad, mom, brother, brother’s wife, a couple of friends, two godchildren. Some years I’ve sent cards to a greatly expanded list, but this is not going to be one of those years; just don’t have the energy. I have a book for my brother already, and I’ll probably spend $100 on a gift certificate to a restaurant for my parents, who really don’t need any more stuff. My godson is too little for gifts (he’s just over a year) and my goddaughter is getting an Advent calendar next week when I visit them, plus she’ll get a birthday present from me in January (probably a book); I think that’s enough. That leaves my two friends and my sister-in-law; need to look for some pretty earrings or something, and I think then I can call it a day on presents. But this still seems like a bit of a stretch, somehow. I so hope I can get through to next December with substantially fuller finances and the ability to do some nicer gifts without pushing. That’s the one part of the holiday I genuinely like — I totally enjoy shopping for gifts and I’d like to be able to send them to more people — I just want to be able to do it without feeling like I’m then going to be paying down my credit card for the next four months!

Tripping

So, my budget is looking really good right now for this month — it’s the first time in months that I haven’t spent on health care, the car, or any large random things. I’ve also, so far, stuck close to home, and kept spending on food low. As a result I still have about $175 in my discretionary slush fund, not counting the $150 I’m setting aside in sinking funds for health and repairs/maintenance, the contributions to my e-fund and travel fund, and also not counting the grocery money I still have in cash.

I’m a little worried that all these positive budgetary feelings are going to drain away by the end of the trip I’m taking during the last week of the month though 🙂 It’s half a work trip and half to see friends in the area for Thanksgiving. Work is paying for my plane ticket, hotel room, conference fees, and meals during the three days I’m at the conference; I’m paying for…whatever happens during the Tuesday-Friday Thanksgiving portion of the trip.

Luckily, my friends have a toddler, so it’s unlikely that there’ll be major entertainment expenses — we won’t go out to have drinks, or see a show, or whatever. It’s likely to just be a bunch of hanging around and cooking. So I’m hoping I can keep my financial outlay to a contribution to the grocery shopping. In the best of all possible worlds I could even do it from my grocery cash, and not have to go into the slush fund at all! But I have a sinking feeling things are not going to be quite so easy. What I especially want to try to do is plan ahead for travel meals; if I can pack enough food to eat while I’m flying across the country, and not end up buying stuff in airports, that should help a lot, because it’s just crazy how much I always end up spending when I have long flights and layovers. (And by crazy I mean, like, $10-20 on a meal or something, but it ticks me off because I always think, you know, if I were at home, this meal would be costing me more like $2…. and it adds up.)

The total weirdness of the academic job market

[I decided this morning that maybe writing up details about interviews, even as generically as I tried to do it, wasn’t maybe the greatest idea in the world. So I’m removing the text I wrote but leaving the post so I can respond to comments.

To sum up: I have several interviews for full-time jobs in my field; they would pay very differently, in ways that would affect my finances for obvious reasons; I would rather get one of the ones with a better salary. Heh.]

Let’s talk about my retirement account

OK, the oatmeal post was surprisingly popular. I didn’t think anyone would get past the first paragraph 🙂

I have a decision to make that’s a little more consequential than breakfast, though. My university is changing retirement plan administrators, and in the next month I have the opportunity to either do nothing (in which case, all my normal retirement contributions will keep going to a Vanguard lifecycle fund, which is a fund of funds that includes U.S. stocks, international stocks, and 10% domestic and international bonds) or do something (in which case, I’d likely pick out an index fund, probably one that mirrors the S&P 500 or the NASDAQ.) I’m far enough from retirement that I don’t know that I really care about having *any* bonds in my portfolio — I don’t really need the stability right now, I think?

When I first opened my IRA, I basically had no choice — I only had $2000, so the only thing I could do was invest in a lifecycle fund, which had a $1000 minimum as opposed to the $3000 minimums for other stuff.

I know, recency bias, but I keep looking at this mint chart, which shows how my lifecycle funds are doing relative to the NASDAQ (hint: not great):

Under no circumstances am I going to start trying to pick individual stocks, or move investments around on a regular basis — I definitely want to set it and forget it. The question is what kind of index fund do I set it and forget it in? And since the university is making me make a decision right now, I feel like I should try to get some advice and make one. What would you do?

Let’s talk about oatmeal

That’s everyone’s favorite topic, isn’t it?

*crickets*

OK, fine, you don’t have to read it, but I am bound and determined to write about oatmeal this morning.

We were never a hot-breakfast family when I was growing up. My dad left for work really early — until high school, when I started having to leave early too (I had an hour commute by public transportation) I rarely saw him in the morning. He would get up and drink coffee, and I know he sometimes made himself scrambled eggs because I do remember a few mornings when I was really little when I’d happen to be awake and I’d sit on his lap in my pajamas and get a bite 🙂 But my mom and brother and me would eat cereal, basically. In high school I sometimes did that, but I’d also get Pop Tarts onto the grocery list and often grab one on my way out the door to eat cold while I walked to the train (seriously. Seriously. My life skills needed improving, let’s just say.) Even on the weekends, we’d have pancakes maybe three times a year or something, but mostly it was cereal.

In college I rarely ate breakfast, and when I did make it to the dining hall it was, again, usually cereal, sometimes a bagel. Same thing after college: cereal at home, or I’d buy a bagel or a donut on my way into work. In my mid-20s I decided it was time to lose some weight, and I saw a nutritionist who told me that I wasn’t eating *enough* — my body was in some kind of mild starvation mode so it was hanging onto everything. We made a plan, and for a year or so I was making a shake that involved soy milk and fruit and drinking that first thing, then an hour or so later I’d have some toast.

I don’t know how I got onto the oatmeal thing. Sometime in the last few years, I realized that except in hot weather, I just prefer hot meals — breakfast, lunch, and dinner — whenever possible. Sometimes that just means toast, but I really like oatmeal, which I make with dried fruit (raisins or cranberries, usually, sometimes blueberries if I can afford them), nuts (pecans or walnuts), and brown sugar.

The problem with oatmeal is (I always thought it meant) morning cooking. It doesn’t take forever — I used to use the 5-minute rolled oats — but for even more boring complicated reasons I often prefer to wait to eat breakfast until I’m actually at the office, and blah blah blah, long story, even though I wanted to eat more oatmeal I was having trouble fitting into my schedule.

Then I discovered steel-cut oats. (The link sends you to some representative ones on amazon, but whatever, you can buy them at the grocery store and it doesn’t really matter what brand, they’re all pretty much the same. Avoid McCann’s, the ones that come in the pretty canister: they’re super expensive. Last year, there was someone who sold wholesale sacks of them at the farmer’s market, 3 lbs for about $3, and I’d buy a bag every six weeks or so.)

OK, steel-cut oats are magic if you are me, because (a) they are more filling than rolled oats and (b) you can reheat them in the microwave for up to a week and they still taste good. This discovery absolutely blew my mind, because it means that I can make a pot on Sunday night and stick it in the fridge. Then all I have to do is pack some up in the morning, stick them in my bag, and when I get to work I throw them in the microwave for however long and I can eat a delicious, filling, hot breakfast that gets me through pretty much the entire morning (I usually still get hungry around 11 or 11:30, at which point I either stop and have an early lunch, or have a snack, depending on what I’ve packed.)

Did you see the part above where at some farmer’s markets you can get six weeks’ worth for $3?

OK, breakfast does cost me more than that, because I believe in making oatmeal a little more exciting with fruit, nuts, and sweetener (brown sugar or maple syrup or whatever), but still.

Oatmeal — by which I mean made-ahead steel-cut oats — is magic.

October Review: Not Too Bad!

This turned into a good month for my retirement accounts; after sliiiiiiiiiiding to the point where I lost all my gains for the year and then some, they rebounded pretty nicely.

As a result of both that, and it being a reasonable month for expenditures in other areas, I did in fact break the $10,000 mark in net worth! I knew this was a possibility, but everything was going to have to break exactly right: no major unexpected expenses, and the markets were gonna have to do the right thing. So I was trying not to get too excited, and conservatively estimating that I’d do it with my mid-November paycheck instead.

But here we are! Cool. It feels good. Next goal: $20,000! Again, if everything breaks exactly right, I could do that in time for my 1-year blogging anniversary at the end of March. It might not happen, but it could! Let’s call it my stretch goal.

The numbers, and then some commentary:

— I went a bit over in the food category, using all the cash for the month that I took out, but also paying for a few quick meals (sandwiches, that kind of thing) on the credit card.

–“Repairs & Maintenance” is a new category in my budget. I’m going to try to sock away a little money there every month; this month, I needed to buy and install a new car battery, and get a new touchscreen for my ipad after I dropped it and the glass shattered. I thought I’d budgeted for both things, out of “slush” and from a freelance check I had coming in, but the battery ended up being a little more expensive than I thought, so I went over by $16 there.

–I was able to reassign money from “slush” to cover those expenses and most of the two trips I took, one to Chicago and one to visit a friend about a six-hour drive away. But I couldn’t quite cash-flow both of them, so I ended up moving money out of my travel savings. I got a little confused about what exactly the numbers were on that travel savings account since I moved money in and out of it multiple times for multiple reasons, so I decided not to bother trying to figure out what exact final deal was — hence the two places where I have question marks.

–Also notable, I got a reimbursement check for $155; since what I was being reimbursed for was an expense I’d put on my credit card back in January (long story why it took so long) and had been counting as part of my debt, I therefore made a higher than planned debt payment; instead of just the $450 from my paycheck, I paid down $605 of credit card debt.

Which leads me to the stirring conclusion: as of midnight on October 31, I have $737-ish of credit card debt, sizable increases in both my IRA and 403(b) accounts, and the drop I noted yesterday in my emergency and travel funds because I raided them to buy more IRA shares. The end result:

Net worth of $10,352, which is up $2840.00 from last month! 

This is a really, really big net worth increase, much better than I would normally expect to do. The combination of receving the freelance and reimbursement checks, the markets doing bad things at the end of last month and good things this month, and overall mostly sticking to the budget in other areas, all pushed me this far. Cool.