Last week’s financials

One thing that’s a little alarming, looking at my spending as closely as I have been lately, is that I spend money pretty much every single day without fail. It was a relatively low-spending week, which I really needed, but still, even if it was as little as $8, something went out the door every day. I know some people use no-spend days, weeks, or even months to try to get a grip on this. I might have to give that a shot soon.

That said, it was a pretty good, low-key week. I got back from my side trip and so I spent much of the week just lying low at my friends’ place. I’ve been babysitting a lot, meaning that my evenings are not filled with going out for expensive dinners, and things have been chill.

Utility bill: $10.61 to close out my electric company account in my now former town.

Food: $87 (more than it should have been; included several expensive coffee/pastry breaks. This is definitely my Achilles heel.)

And…that’s it! (Barring what I spent out of my spending money — dry cleaning, coffee that I bought with cash instead of on my CC.) Grand total of $97.61 for the week. Awesome.

Also, I bought another $250 in Roth shares. I’m now up to $750 bought on the year. Unfortunately, while I had a great couple of weeks with usertesting earlier this month, work seems to have dried up a bit there. I’ve had the computer on all day and only picked up $10 so far. You just have to wait for available work, though, so nothing to do but be patient and hope it’s just a lull.

A little bit of whining

So, I know a lot of rich people.

I guess I don’t know anyone in the .001%. But I do know a lot of computer programmers, a lot of lawyers (employed lawyers), and, then, I guess almost anyone who is employed full time in the private sector looks rich compared to academia. For some reason I don’t really know a lot of nonprofit workers, although given my background and interests you’d think I would.

I bring this up because at this very moment I am housesitting for friends of friends in a large, beautiful house in a very expensive city, and it is making me feel like the biggest, most jealous loser ever.

I made the career choices I made with some very countercultural goals in mind, and it’s not like I don’t believe in those choices or goals, or like I didn’t understand that academic salaries were bad, or that mine was the only paycheck I was likely to be able to count on. But damn it, I want a house anyway! I want to somehow win the cosmic lottery where I both do the thing I believe in, and also get paid real money. And I’ll probably never have a house in a place I actually want to live in, because all those places are very expensive. It’s a goal that seems much further out of my reach than retirement.

So, I am allowing myself this brief moment of whining before getting back to making the best of the circumstances I’m actually in. Which are fine, really. It’s just too easy to casually envy the lives of others.

Financial Goals for Anyone (h/t to Financially Blonde)

So I was just wondering what to do for a Friday post when I saw that Shannon over at Financially Blonde had written up her Top 10 Financial Goals that she suggests to clients. It’s a really interesting list and I figured I’d see how I was doing. I’ll italicize her text then respond in red.

1) 15% Savings RateNot right now, because I’m at the tail end of debt repayment. However, my rough budget for my new job (starting in July) suggests about a 40% savings rate from my gross income. That’ll include $1000 to a 401(k) every month, along with contributions to an e-fund, housing fund, car fund, and travel fund. After I finish off the credit card debt I hope to up my savings even more. I’m really looking forward to see how well I can do on my savings rate this year.
2) Emergency Savings Fail! Shannon thinks this should be around $6000 for me (“six months of living expenses,” which I interpret to mean basics, not contributions to savings) and as I wrote earlier this week, not only do I have only $50 in it right now, but my savings plan suggests that I’ll inch it up to $3000 and leave it there, unless my salary dramatically increases.
3) Retirement Account Started Pass: barely for now (it’s at $2870) but this is the one where I should make the most progress this year. My stretch goal is to have this at around $13,000 by the end of 2014 and then keep on keepin’ on.
4) Healthcare for your family Pass! I have health care through my employer, including dental, although I will have to make contributions for both medical and dental; not sure how much yet but I think it’s around $100 for both, pre-tax.
5) Credit Score over 750 Pass! It was over 800 when I checked it this morning, even having dropped a little because I just closed a credit card (the annual fee came up and I wasn’t using it enough to make it worthwhile.)
6) Debt to Income ratio of 35% or less — Definitely a pass, although I am currently paying way more than 35% of my income. But if a meteor struck and I suddenly had to pay only the minimums on my student loan and credit card then my DTI would be around 3%.
7) Ability to finance a home LOL NO. Let’s start with my total lack of a down payment and move on to my total lack of a down payment. With a side stop at “income so low that at my current salary and rate of savings, I should have a down payment in, uh, 18 years or so.”
8) Ability to open a credit card Oh, definitely, wouldn’t be a problem. In the past, I’ve opened four cards for rewards points reasons, and one to do a balance transfer. Four of the five are still open, and see above on the great credit score, so I’m sure I could get another if there was a really good reason. No plans to do so, however.
9) Debt Freedom Getting there! However, I am not going to promise to live an all-cash lifestyle beginning in October (my debt-free date as of now.) I anticipate a car loan sometime in the next five years, although it will be for a new-to-me car, not a new-new car. Depending on how things shake out, there could also be a mortgage in my future.
10) Financial Freedom This is the “f-you-to-your-job” goal, and I am probably a good 30 years from that 🙂 Barring a miracle, I can’t see any way of not working until I’m about 65, give or take a year or two. Academic salaries aren’t high enough to save a lot of money on, and I don’t anticipate random inheritances or anything like that. C’est la vie. I enjoy my work, although I don’t enjoy the crazy lack of security that goes with it.

*
So — to sum up, I’m doing well at a lot of things, and badly at a lot of things. That sounds about right! 🙂

Debt Repayment High

Thanks to everyone who commented on my e-fund post the other day. I’m thinking it over and I’ll probably talk more about it in July, after the student loan is paid off [WOO!]

And speaking of which….

I’ve been thinking a lot about the emotions we have (or rather, of course, I have) around money. The satisfaction at looking at my net worth rising every month, the mild depression when my tiny retirement account loses a few dollars on a bad stock market day…. These two examples are opposites of each other not only in that one is positive and one is negative, one is strong and one is mild, but also in that one is pretty rational and the other is irrational (the satisfaction comes from being pleased with my behavior, the depression for no good reason at all since I know market movement in small sample sizes is just noise). But they are equally “present” emotions.

The strongest emotion I’ve had in the last few months around money has cropped up when a paycheck’s come in and I’ve been able to make a payment on my student loan, though. I really experience that — logging into the website, entering the amount, hitting “submit” and then, a few days later, seeing the new, lower balance after the payment has been made — as a kind of physical high. I get frustrated when a weekend intervenes and I have to wait two whole extra days to see the new balance; I want to jump up and down at various points in the process. It’s actually fun.

There are two possibilities here:

1) There’s something really really wrong with me

2) This is a pretty normal reaction to successfully doing something that’s difficult and satisfying. There’s a reason why people liken debt repayment to weight loss and running marathons!

While I’m not discounting #1 entirely <g>, I think #2 is more likely. As weird as it sounds, I think I’m going to actually miss making student loan payments. I still have to pay down a credit card after the loan is gone, so it’s not like I’ll never make a debt payment again. But I don’t think that will be quite as satisfying. And after that…well, will having money automatically deducted from my paycheck for retirement give me that thrill?

I guess I could start losing weight.

Do you get debt repayment high? Or, if you’re debt-free now, do you generate that feeling in other ways?

Emergency Fund Musings

My e-fund currently stands at a grand total of — wait for it — $51, after an automatic end-of-the month transfer from checking to savings.

Yup, that’ll get me through anything!

Meanwhile, I’ve been directing massive amounts of incoming cash at my student loan, because I was/am bound and determined to get it paid off by the end of this contract, almost a year to the day after I defended my dissertation. I could easily fund a $1000 e-fund at the end of this month (or could have done it anytime in the last few months) by simply delaying debt repayment, and since interest on the student loan is now down to about $13 a month, I don’t know, maybe I should do that. Damn it, that’s $13 that could go somewhere else, though, like, say, to an e-fund, so….

Here’s my reasoning:

1) My e-fund-like efforts in the past have always disappeared quickly; I’d get them built up to a few thousand dollars and then either be unemployed for a while (I was a freelancer) or spend the money on a few trips or credit card payments after I ate out too much or bought new clothes or whatever. I am committed to budgeting more responsibly now that I am, oh my God, 35, and not 22 (not that I should have been doing that when I was 22, but water under the bridge) but I’m still worried that if I put together an e-fund I’d be tempted to dip into it for less than emergency expenses, and meanwhile the remainder of the debt would still be sitting there. If I kill the debt first, however, it’s killed.

2) I’m single and have no children or, for that matter, pets. That is, other living beings are not relying on my steady income (and a good thing too.) So, if a serious, big-time emergency strikes (I get hit by a bus) I at least won’t be putting anyone else in danger.

3) Meanwhile, for a minor emergency, I have an ungodly amount of unused credit — over $30,000 available on the four major credit cards that I have open.

3.5) Also, since I don’t own a house, the number of minor emergencies that could come up are reduced (no random exploding boilers or whatever.) Pretty much it comes down to unexpected car repairs and unexpected medical bills.

4) I could also call on my parents — I would never do that for anything less than a true, serious emergency, and I wouldn’t be likely to at all. Like, say I needed a plane ticket for a funeral: I’d rather put it on the credit card and pay it back in pieces. If I do end up asking my parents for help, it’s more likely to be in the form of free housing, should my tenuous hold on an academic career finally slip away. However, at the end of the day, I could ask them for an interest-free loan and get it, if I really needed it for some reason.

5) There is basically no chance I’ll randomly lose my job during this coming year. I have a guarantee of 13 months of income, so while I do want to guard against being unemployed in the future, I don’t need to worry about it in the imminent way I might if I worked in a normal job.

So the upshot is that I’m afraid of my own past bad habits and I’m not that afraid of handling emergencies with the non-cash resources I do have. I want that debt gone though — because one thing I really am afraid of is potentially entering a period of unemployment (13 months from now) while still in debt.

All that said, I do think I should have a bigger e-fund. I’d like to aim for $1000 to start, then maybe gradually ramp it up to $3000. But I don’t think I’m going to make it a priority over other savings goals. I couldn’t possibly get it large enough to really live off for six months or a year, so there doesn’t seem much point in having a relatively huge one when instead I could be directing money towards other priorities. I’ll talk more about this in July when I have a better sense of what exactly I’m going to make every month, though. Until I get my first paycheck I only have a ballpark idea of what it’ll look like after taxes, insurance, retirement contributions, etc.

What are your thoughts on e-funds? I know most people are making it more of a priority than me so I’m afraid I’m overlooking something.

Being There: A Single Finances Post

So, I’m the middle of a trip to California that I sandwiched between the two parts of my move. I’m here mostly because my best friend is here, along with her husband, her dog, and her daughter — my goddaughter, who is not quite 3 and a half.

The baby was born while I was in graduate school all the way across the country, and as far as I know, for the foreseeable future we’ll live many many miles apart. Being 35 and not interested in signing up for solo parenting, I’ll most likely never have children of my own; although she’s not my child, she’s more to me than just the random child of a random friend, in all sorts of ways.

Given the projected state of my finances (I’ll make a low salary until the end, unless something changes radically in academia), I can’t expect to do much for her in the way of financial help. (Although right now she’d be the beneficiary of half my tiny IRA if I died, with my brother down for the other half.)

But what I can do is to be there, as much as I can. Laundry, diaper changes, going to the beach with her, reading books, putting her to bed when her parents are at work, cooking, dishes, taking her to the park…. I’ve done all that and more in the last few years. And it’s all free, except for my plane tickets. It’s the kind of investment I can make — so I do.

Waiting for Guffman

It’s time for the monthly ritual of sitting around waiting for my paycheck to hit! This time’s a little better because, while I normally get paid on the 25th, the 25th is on the weekend, so payroll goes out on the 23rd. It turns out this means they actually send direct deposits out on the 22nd. I split direct deposit this month, with 1/3 of my money going to one account and 2/3 to another. (Complicated, but it’s because of a rewards thing.) And one account actually got paid already! But the money’s apparently in limbo on its way to the other one.

Sooooo…. I made a student loan payment. $1447! God, that feels good. Only another $3553 to go (plus interest, blah blah.) Too bad the current amount sitting on my credit card is exactly the amount I’m putting towards student loans this month. There’s something poetically hilarious about that.

I am a person who has had a retirement account for two months

This is the two month anniversary of my taking the *enormous* step of moving some money from savings (accessible) to savings (non-accessible, which means they won’t get spent). As I wrote a few days later, this was something I hadn’t felt so bad about not doing — until all of a sudden I felt really, really bad about it.

I feel like a different person than I did at the start of the panic attack that impelled all of this change. I’m still plenty worried about my income (present and future) and I’ve taken only small steps towards reining in daily spending, but I have taken those steps and once my complicated multi-state move is over and I start my new job, I’m going to take more. I’m excited to see what happens next.

The week that was: expensive travel edition!

This week/weekend was very, very busy: I moved out of my apartment ($$$$$$$$$$$$) and returned to Very Large and Very Expensive Grad School City to walk across a couple of stages in fancy robes and shake various hands. It was a lot of fun, but it reminded me why I’m pretty glad to no longer live in VLaVEGSC, even though it is fun to visit. In four days I’ve packed in a museum visit (free!), spent hours on public transportation (not free!), and, uh, a large amount of money on food. (Though to be fair I didn’t normally eat out three meals a day when I lived here.)

Blogging is going to continue to be pretty light this week as I’m still traveling, but here’s the wince-inducing weekly update:

*First, the good news, to make myself feel better: I put together $250 and bought another round of Roth IRA shares! I’m up to $620 in Roth funds since late April, go me.

*Uh, now the bad news (everything else):

Moving expenses: $1225 (OW)

Public transportation: $30.50

Gas: $54.08

Food: $131 [not as bad as I thought; I guess my parents ended up paying for a lot of stuff this week. As usual, this doesn’t include cash spent on coffee and the like, which would probably add another $20-ish]

Student loan payment: $108

Personal care: $128.75. This included a haircut, some waxing (I am in VLaVEGSC after all — catching up on stuff I haven’t done in nine months), some drugstore purchases, and expenses related to an eye infection I picked up yesterday. Who doesn’t love wandering around looking for an optometrist who’s open and taking drop-ins on Sunday morning? Thank the lord for Orthodox Jews; I found one who’s closed Friday after sundown and all day Saturday, but opens Sunday morning. And he only charged me $30 for the visit, plus I paid another $16 for antibiotic eye drops. Fingers crossed that they work and I won’t have to visit someone else in CA.

Weekly total: $1677.33. Eesh. Without the moving expenses, that’s $452, which is better but not great. I do, blessedly, get paid at the end of this week, so I’m looking forward to a huge student loan payment and to making a small dent in the credit card debt as well.