Sunshine Blogger Award(s)

So, I am a terrible terrible procrastinator. You probably didn’t know that about me, because usually I procrastinate on other things by writing blog posts. However, this time, it just took me a long time to get around to thanking Jessica from Settle Your Finances for nominating me for the Sunshine Blogger Award. But! In the meantime two more lovely people — Mandy from Dream Beyond Debt and Amy from Debt Gal — also nominated me, so I’m going to do a massive post and answer all their questions at once 🙂 I enjoy these low-pressure “awards” so much. Thank you all for asking, ladies!

Continue reading “Sunshine Blogger Award(s)”

I spend how much on my eyes?!

I realize the big story this week is the stock market, but since my money is pretty much invested for the 30-year horizon, it won’t affect much except my net worth update next week. I’m curious, but not emotionally involved.

What is emotionally and fiscally affecting is my recent realization of just how much I spend in order to see.

I’ve worn glasses since I was maybe six or seven. I first got contact lenses at about 12 or 13. From the start, I’ve seen much better with contacts than with glasses. Peripheral vision! No tension headaches! But contacts carry their own challenges. For many years, I had the kind that lasted a full year. They mostly worked ok, although there was one memorable week in high school — not that memorable, I guess, because I can’t remember what the problem was. Either I tore/lost a lens, or I got an eye infection. Either way, I couldn’t wear the contacts, and it turned out that we hadn’t updated my glasses in years. Did I mention that I’m legally blind without corrected vision? I ended up taking a final exam with my face about three inches from the paper so I could read it. Sigh. After that I made sure to keep my glasses at least within spitting distance of my correct prescription, which got easier as I got older and my eyes settled down.

At some point, I moved to two-week disposable contacts, and that was what I did up until this year. However, as I got older, I had increasing problems with them. I had a half-dozen eye infections that required two weeks of wearing my glasses, antibiotic drops, etc. But even when that wasn’t happening, my eyes were always red and often a bit sore/dry. I was using the best contact solution available, I never napped in them, etc — I was doing everything the way I was supposed to — but still.

So, I finally made the decision to switch to daily disposables. That’s been great from the point of view of my eyes. They’re comfortable, all the issues with redness and scratchiness have disappeared, etc. But when I reordered lenses recently, I finally stopped to think about the costs not just in terms of overall price, but in terms of daily price. A box of 90 lenses in my prescription is $82 when ordering online. That means that I spend nearly $2 a day to wear contacts!!!!! I could be buying a nice cup of coffee instead, sigh.

This is all mitigated somewhat by my having eye insurance through work. That pays for the full cost of the yearly exam, but also $150 towards the cost of lenses. I shouldn’t have to get new glasses for several years, at least, after getting a new pair last Christmas, and I don’t wear contacts every single day. So next year, after I get an exam in December, I’m then looking at buying 7 boxes of lenses at $82 each, equaling $574, minus $150 is 424. That’s $1.34/day. I can knock that down a bit by buying online through ebates (referral link, and I really need to do a post just about ebates because they are *awesome*.) But still, it seems like a lot!

One nice thing is that next year I’ll finally have access to an FSA. I could have had one this year, but I wasn’t sure how much I should be putting in it. Since I typically get my exam at the very end of the year, my plan is to hold off on actually buying the contacts until early 2016, so I can buy them using pre-tax money I’ll put in the FSA. That’ll help too. And of course, it’s nice that I don’t have to buy contact solution anymore; that stuff was expensive because I was buying nice stuff to try to fend off the eye infections. Eh! Gotta see, right?

Was Playing the Balance Transfer Game Dumb?

This is kind of a deep dive into the archives of my over-spending, under-earning past, but I just realized yesterday that my credit card statements dating back to 2009 are all available online and it made me curious about a significant moment in my financial life.

I have no idea how I would have run my freelance financial life (in my early 20s) without credit cards. Maybe I just wouldn’t have had a freelance career, or maybe I would have borrowed from my parents, or maybe I would have come up short on the rent payment a lot. I was majorly boom and bust on earnings, and rarely did I get far enough ahead to have savings to cover my next period of unemployment; usually, I was using what I earned to pay off what I’d racked up during my previous unemployed stint.

However, I got through all of that with no harm done to my credit score (it actually improved it) and on to the stability of a grad student stipend. That broke the cycle…until I had a crazy expensive first few months of 2011. They featured (1) a massive cross country road trip and (2) moving back to New York and getting a new apartment which I totally couldn’t afford, although that is a story for another day. The point is that by April, I was looking at my card balances and really panicking: somehow I’d managed to rack up over $8000 in just a few months. I did not know what I was going to do. It was really scary. But, somewhat to my surprise and despite my low income (thanks to that great credit rating, I guess) I was approved for a new card with an introductory 12-month rate of 0%, accompanied by a 3% balance transfer fee. I promptly transferred $8175 of accumulated debt over, incurring $408 in fees, and took a deep breath. $8583 was a LOT of money, especially then when I was paying NYC rent and making half of what I do now. But even with having to pay the balance transfer fee, I felt better knowing that I wasn’t incurring more interest each and every day.

In the end, I paid the entire thing off; I made the last payment on January 1, 2012, taking 8 months to do it, and never used that card again. Looking at the individual statements, I see that there were a couple of months when I was able to put several thousand dollars in, and other months where I only managed a few hundred. I honestly don’t remember what exactly was going on, but I’m guessing that most of the payoff money came from freelancing in the theater, which I was still doing on the side, and I would have had good and bad months with that.

What I’m really curious about, though, is: was the balance transfer actually a bad idea? Given that I paid the debt off within 8 months, would I have been better off just leaving the debt on my cards and not paying the 3% fee?

Math!

I moved $5475 from an account that had a 16.24% interest rate.

I moved $2700 from an account that had a 13.25% interest rate.

For simplicity’s sake, let’s say I would have paid a flat $1073 every month, even though I wouldn’t have — my biggest payoff month was actually September which means interest would have accumulated through the summer. For simplicity’s sake, we’ll also assume that I’d have paid the minimum on the bigger card while attacking the smaller one first, because I’m absolutely sure I would have thought that way even though it would not have been mathematically sensible. I’m 100% sure I had no idea what my interest rates were anyway.

So, I ran these through a debt snowball calculator, which told me I would have paid $381 in interest if I’d been able to steadily pay $1073 a month for 8 months. According to that figure, I lost $30 by doing the balance transfers.

However, I did not steadily pay $1073 a month. I can’t figure out a way to calculate this that isn’t incredibly tedious, but some of my smaller payments came early on; I paid the minimum of $181 the first month, and in the fourth month I paid $500. So, I’m guessing that in the end the interest/balance transfer fee would have worked out to be just about even, maybe slightly tilting to one side or the other.

But looking back and remembering how freaked out I was by those numbers in my credit card statement…even if I lost the full $30 on the deal, I think it was worth it for the peace of mind. It meant a lot to me to know that I had a full year of breathing space to figure out how to pay the debt from a steady state, instead of constantly watching the interest climb. So I can’t say I regret having taken that step. Good to know.

 

How and Why I’m Going to Save (for right now)

When last we spoke, I was discovering that saving in a slow and steady way is, like, totally boring. But I was a teeny bit mysterious about what I planned to do next. Hannah wanted to know if I was going to spend $500 on peaches (reasonable guess! But I ran out of canning jars last week, so, no.) Kate pointed out that being adult means letting money flow to multiple goals (true!) DoubleDebtSingleWoman’s congratulatory post had me remembering how lucky I’ve been to have nothing major go wrong this year that would have interfered with reaching my goal (she’s had health issues lately, sigh.)

As probably everyone has guessed, though my next project is building up my “down payments” fund. To recap, this is not necessarily money that will actually be used for a down payment. I might also use it for a car, should I need one in a hurry, or for an apartment security deposit, or whatever. It’s for Major Purchases or Emergencies That Aren’t Actually Emergencies, I dunno. “Down payments” is good shorthand.

I’ve only been putting $125 in it every month, and I haven’t had it all that long, so it’s not very big. But I decided that in the aftermath of my incredibly boring march to $5000, I wanted to do something different and flamboyant and really go for it with this fund. I want to see how much I can do in how short a time, while not being totally irresponsible about other important goals like retirement and money to travel to see family and very close friends. So, after a lot of back and forth and soul searching, here’s the arrangement I came to with myself.

(1) I’m going to snowball my former emergency fund savings payment of $500 onto my old down payment account contribution of $125, for a basic $625 contribution each month.

(2) This is the controversial part. Since I started this job, I’ve been contributing $1000 a month in pre-tax dollars to a retirement account. I’m dropping my contribution to $500 a month on a temporary basis; I didn’t want to stop contributing altogether but I also really wanted to build up my accessible cash. This isn’t actually all about my impatience, by the way. It has a lot to do with my increasing worry about having so much of my income being funneled away into inaccessible accounts at a time when I have a lot of uncertainty in my life. By next summer, my immediate future (for the next 5 years or so — after that of course it’s anyone’s guess!) should be much clearer to me, but right now it’s not, and I feel like I’d feel better with an extra-big chunk of cash on hand than with a bigger 403(b). I also suspect we are not going to see much market growth, if any, in the next year, so although I could obviously be wrong, this doesn’t seem like a horrible time to roll my contributions back.

Anyway, after tax withholding, this move will net me an additional $400 a month in my paychecks, bringing my basic down payment savings to $1025.

By the way, this change still has me contributing 12.5% to retirement, which isn’t, of course, the awesome 25% rate I had going before, but is also not utterly appalling. I did actually submit electronic paperwork to drop my 403(b) contribution to $0, but ten minutes later I thought better of it and reset it to $250/paycheck or $500/month.

(2a) …When you say ‘temporary basis’ what do you mean? Good question, and honestly I’m not completely sure; my main point is that I don’t regard this as a sufficient retirement contribution going forward. There’s probably a 1-year limit on this arrangement in my mind; next summer everything will change anyway, whether I’m moving to a new city or getting a new salary. However, if in five months I decide I’m definitely not going to buy a house this spring, I may re-up my retirement contributions then. (Or if the market crashes so bad that I have no choice but to get in on the low-buying, which hopefully won’t happen, of course.)

(3) Lastly, up until now I’ve been letting any balance left in my various budget categories roll over to the next month. For the same duration of a lowered retirement contribution, whatever that ends up being, I’m going to stop doing that, and instead transfer any extra to the down payments fund. However, that means that when I have a month that’s more expensive (eg a car repair or a medium sized medical expense like needing to buy contact lenses) I might make a smaller contribution.

To sum up, I’m going to approach this savings account less like I did the emergency fund, and more like I would being in debt again — instead of a measured march to a set amount of money in a set amount of time, I’m going to throw whatever I can at it (barring a [smaller] retirement contribution and my travel fund savings). I’m hoping that, therefore, I’ll find this a more satisfying and motivating experience than saving for the emergency fund was. With my minimum monthly $1025, I ought to be past $5000 by the new year and over $10000 by the end of May, which is about the earliest I’d be doing any house-buying. I’ll be reassessing as I go, of course, based on what happens with my job situation, but whatever happens, a giant bucket of cash doesn’t seem like a terrible outcome.

My Emergency Fund is Officially FULL!

Screen Shot 2015-08-14 at 10.30.59 AMMy paycheck hits today, and so does my automatic transfer of $500 into my Emergency Fund savings account. That takes me, in 18 months, from a person who’s never heard of an emergency fund, to a person who was sure that the idea of saving six months’ expenses was impossible, to a person who…has saved six months’ expenses.

[Yes, yes, I was 35 and had never heard of an emergency fund. Live and learn!]

Here’s the thing, though, although I want to be all happy joy joy about how good it feels to have this done — and it does — my predominant feeling is that I kind of hated saving like this and don’t want to do it again. Continue reading “My Emergency Fund is Officially FULL!”

Zero Food Waste, Week 30: Sub In What You Like

zero food waste challenge 2015

This week’s post began with a decision I made a couple of months ago: to buy the cheapest dates at the grocery store for the kale-date salad I love. Unfortunately, or fortunately depending on your perspective, that ended up being a LOT of dates. Well over 100 dates. I didn’t realize quite how many there’d be until I opened the package up 🙂 They also have pits in them, so they’re a bit more work than the ones I’d bought before, though not so bad.

Anyway, because of this excessive (or just right!) quantity of dates, I’ve been on the lookout for other ways to use them. I made a lovely watermelon-date salad for my book club meeting over the weekend, I’ve made the kale-date salad several times, and in a cookbook I love, I also found this terrific yogurt snack that I share below. The only problem with it: it called for a topping of crisp brown rice cereal (aka healthier Rice Krispies) which was meant to give it crunch. I didn’t have any of that, and on top of that, I don’t like Rice Krispies. They feel insubstantial, and get soggy very very quickly. Since I wanted to make several servings of this to take to work over the course of a few days, I didn’t want anything that wouldn’t hold up to sitting around. So, I decided to substitute chopped and toasted hazelnuts. Voila: crunch, nuttiness, and they make the whole thing much more filling than the cereal would have. PLUS I didn’t have to spend money on any extra ingredients, since I already had hazelnuts, yogurt, sesame seeds and, of course, the dates. Winner! Continue reading “Zero Food Waste, Week 30: Sub In What You Like”

Monday Money Musing

No, I’m not starting a new series, just entertaining myself 🙂

Let’s talk about how screwed up the American health care system is! I was stupid yesterday and tried to cut a slightly unripe peach into a pot, not on a cutting board, so naturally I sliced open the middle finger on my left hand with a really sharp knife. It’s not going to kill me; the slash is maybe 1.5 cm. But honestly, it could probably have used a stitch or two. It’s opened itself back up a couple of times since I stopped the bleeding the first time. Am I going to get that done? Nope! Even though I have health insurance. It’s just not worth the co-pay not to mention the time spent hanging out in the emergency room waiting to be seen. Now, once upon a time I was in Spain, and I got an infected blister on one foot (yes, it was as fun as that sounds.) My friend dragged me to a walk-in clinic, where they saw me after a five-minute wait, and after sighing when I said I didn’t have a EU identity card, sent me on my way without even charging me anything. Oh well.

Buckling down on spending is going ok. I couldn’t resist a bunch of awesome produce at the farmer’s market (it’s just that time of year) but it’s really good to be back to a mostly cash economy. I feel totally guilt-free about spending on random treat-y things (coffee, rose water, fresh ricotta) as long as I’m using cash to do it. Overspending on cash in July led me, in part, to having to use a credit card several times and I just feel all twitchy about it. I guess I’ve retrained myself, financially speaking, and that’s a good thing; giving myself enough space to spend on stuff that’s not necessary, while also giving myself firm boundaries (no random trips to the ATM during the month), is a good way to go, I think.

Thanks for all your responses to the house buying post. Funnily enough, one of the people at Blogging Away Debt had a post up asking more or less the identical question on Friday. So I benefited from both sets of responses! I honestly have no idea what I’ll end up doing, but I do feel more educated, so I like that, no matter what happens next. I’m also thinking about the potential costs of having a pet; I love love love living with my housemate’s dog and cat — so nice to curl up with a little warm body 🙂 I don’t know; maybe even if I do stay in this town, I’ll wait a year or two after all and just keep living here. I could probably make life a little more “permanent” in this house by unpacking more of my personal stuff, so I don’t feel like I’m just living out of suitcases…. Oy, I don’t know. I guess the first order of business is even to figure out if I’m staying here or moving on.

Other than that, I’m just waiting around for my paycheck to hit on Friday. I really want it to get here because I will finally hit my emergency fund goal, so for like the last two weeks I’ve just been staring at my bank account hoping it’ll magically appear really early for some reason. Shockingly, it hasn’t. Go figure.

Talk Me Out of It (or, what do you spend on your house?)

I’m starting to get cold feet about the whole homeownership idea. (No new developments on the job front, so I’m still not sure whether or not this is a real question, but it’s sure on my mind a fair amount. I’m going to keep calling it a semi-hypothetical.)

The thing is, both everything I read online and my experience of watching my parents have a house indicates to me that it’s way more expensive than it sounds. Just because the mortgage payment says $450 a month doesn’t mean those are your actual costs…. it all makes keeping my $400-with-utilities-included rented room indefinitely sound pretty good.

But I’m having a hard time putting actual figures to this. Based on what a friend of mine spends, I’m guessing $750-800 a month for mortgage, taxes, insurance, and utilities. That’s perfectly doable for me, especially since if I did take a permanent job here it would come with a substantial salary bump. (I also would prefer to have a housemate, so that would help financially, but I’d rather not assume/depend I’d have someone every single month; I want to be able to afford it on my own and have rent be a nice extra.)

And I know closing costs are expensive, but let’s assume those are covered.

What I’m really having trouble imagining are the other “carrying costs” of a house. Those of you who are homeowners, how much do you set aside every month for things like the new roof or the boiler blowing up or the plumber having to remove your kid’s Barbie from an inconvenient pipe? In other words, what goes in your house maintenance fund? What have you had to spend on as a homeowner that you never imagined?

I think I might also have to budget for snow removal, especially if I get a house without a garage….

Y’know, maybe I’ll just stick with the rented room and get a new car, or a dog. Or a new car and a dog.

Zero Food Waste, Week 29: Keep Others From Wasting Food

zero food waste challenge 2015Back on the food-writing wagon! Now that my big work project has finally debuted, I have a smidge more free time, though things won’t really normalize until I’m more caught up — maybe stretching into September.

However, I did want to get back to a slightly more typical blogging schedule, and as it happens I have a really nice, and money-saving, Zero Food Waste tip today!

Continue reading “Zero Food Waste, Week 29: Keep Others From Wasting Food”

Net Worth Update: July 2015

networthupdateY’all. July has been…a month.

First of all, I realized I’d been overspending like whoa. I wrote about that, and that was good, because I basically stopped; I swiped my credit card this morning for the first time in ten days, and it was for a reimbursable work expense.

Second of all, speaking of work, it has been heavy. It’s all good stuff, but I’ve been pretty overwhelmed, hence the radio silence. The huge project I’ve been working on is debuting tomorrow, so that’s good, but now I have several weeks’ worth of neglected other projects to catch up on. It could be a while until I’ve totally righted the balance, both at work and in my finances.

It was enough of a messy month, and I’m rushed enough still, that I’m not going to do a whole accounting of my spending (just picture a lot of red category balances and you’ll have a decent idea), but here’s the net worth numbers:

Screen Shot 2015-08-01 at 1.15.04 PMThe reason I’m not showing debt, even though I did actually go over in a bunch of spending categories, is that I used some of August’s money (income I made in July) to pay off my credit card already. So my checking account is low now, but if I can get through August without doing a bunch of totally random spending, I should be back on a more even keel again.

I’m kind of disappointed with this month; the market going way up (in time to make my first retirement contribution this month “expensive”) and then going way down again, didn’t help, and neither did my overspending. A $1200 increase is way off where I want to be every month (I aim for a $2000 increase). However, I do feel like I’m turned around in a positive direction, so fingers crossed for a good August.