Archive for the ‘Budget’ Category

Uncertainty Kills Me
May 10, 2012

I confess: I love structure.  I like it when there are rules, when there are set plans, when each dollar has its assigned place.  This is probably why I love math & science, and also why I get such a kick out of personal finance.  There’s the natural order of things, a script.  This is probably also why I like baking more than cooking. Baking, the exact chemical reaction, vs. the freer nature of cooking (and that annoying thing where good cooks pretty much cook by instinct without measuring)? No contest!

By contrast, I’ve often felt stymied by literary analysis and film theory etc. (what do you mean there’s no right answer?).  I ignore investing advice because the stock market is so random – or at the very least, unpredictable.

And I hate waiting for things.  I hate not knowing the future.  I hate not having a plan.

D graduates in 2 weeks.  At this point, he’s interviewing for jobs, but not knowing is driving me crazy!  We always said if he can’t find work here, then we’ll move.  Of course, at what point do we give in and look elsewhere?  What do we do if one of us finds a job in a new place and the other doesn’t?  Most importantly, how do I set up a budget without having any information about what our finances are going to look like?

In my saner moments, I know that the worst case is that we keep on as we have, with D pursuing… something, while I keep working at my job.  My job is awesome, it pays me very well, and I’m lucky to have something that can support our family.  Best case is that D finds something here that pays well and we do all the grownup things we’re supposed to do next: house, baby, etc.  And there are a million other possibilities, such as we move to a new state or a new country or we quit our jobs and travel for a few years (not that that last thing is in serious contention, but you never know!).

I know some people would love to have wide open possibilities.  I just find it terrifying. I want a plan!

I guess I just need to wait a few more weeks, and by then we’ll probably know what will happen.  Until then, I’ll just have to be content with making plans for every eventuality.

Do you prefer to plan out the path of your life, or do you like to being freer to do what you please?

When it’s not fun anymore
February 24, 2010

Like most of the bloggers I read, I’ve never been in truly dire financial straits.  Even when I was just starting out with $100 in my bank account and nearly $40,000 in debt ($17,000 car loan, $17,000 student loans, and a $4,000 balance on my credit card), I could easily make all of my monthly payments.  I think I first started looking around on the internet because of the horrible financing I’d gotten from Toyota (accepting dealership financing – what a rookie mistake!), and that’s when I was introduced to this idea of living “frugally.”

Since then, being frugal has been mostly a hobby, a habit I got into while trying to get out of debt that continued as I built my savings.  I think a lot of us look at frugality the same way – as a means of achieving goals.  Back in the day, I had fun looking for ways to cut down my spending on certain things.

At the beginning of this year, I set some stretch savings goals.  Even though these goals were high by traditional standards, it came as a bit of a blow to my ego that I was planning to save $5000 less than last year.  Even worse, I couldn’t count on reaching those goals – I had to find a way to make up a $3,000 deficit in my budget.  I started accepting weekend work whenever I could get it, and set up my shopping ban since I knew that I needed to detox after my spending spree last year.

The longer time went by without Chad finding a job, especially as we discussed the possibility of him returning to school full-time, the more stressed I started to feel.  I started freaking out about our joint budget.  If Chad went over the budget for groceries or for miscellaneous spending (stuff like toiletries and gifts), it would mean an argument.  I cut our personal spending allowances to the bone.  A friend of mine bought a house, and I discovered that we don’t even have enough for a townhouse in the places I’d like to live.

There were a couple of things that calmed me down.  First, as the paychecks with overtime started rolling in, the deficit in my budget decreased.  I got a bonus, which decreased the deficit a little more.  I feel more relaxed about everything, even if meeting that goal still isn’t a sure thing.

No matter how much we might love our jobs or our kids or a life of voluntary simplicity, there are times when it can put a strain on you.  The key to overcoming this is to know that it’s something you choose. When being frugal or minimalist is no longer a choice but a requirement, due to space or financial issues, that’s when it starts to grate.

There was a lot of chatter about the recent The Simple Dollar post where Trent talks about his neighbors new car and smirks over the “stressful” job this person has to go to every day to pay for said car.

I think that Trent has lost income with his switch to blogging.  He’s talking about his wife taking a year off to stay at home.  I’m sure they’re not struggling financially, but it must have been a hard hit, that loss of money.  Even if writing is a passion, even if he loves being home with his kids, there will be times when both are frustrating.  His frugal habits, which before were a fun diversion (make goo in the kitchen!), are now almost a necessity.  So when he sees his neighbor in a shiny new status car, his frustrations lash out.  Reread the post – he thinks about that car when he’s taking his kids to the museum, when his kids supposedly are his pride and joy.

I don’t think Trent’s neighbors think about his truck, unless it’s one of those really loud ones.  Trent admits to having been very materialistic.  Either he bought things so that people would look up to him, or he judged others based on their possessions.  Now, he assumes that others are judging him, even when it’s probable that they don’t.  (Or if they do, it’s to notice his new car or his high-end cookware.  In my experience, people are self-conscious and notice where they’re lacking before they notice anything else.)  Trent feels defensive and writes long posts to make himself feel better.

What Trent should do is acknowledge that he envies his neighbor’s new car or shiny whatever.  It’s only by admitting that we want something that we can make the choice not to buy it. Sometimes, the choice is what matters.

Then again, I don’t have to live up to the same standards as Trent.  His extreme frugality posts get the biggest positive response from his fanbase, and the one time where he made the choice to fulfill his wants (the Prius), his comments section went wild with insults to his money-saving skills.  You know what?  Sometimes you just want a new car.  He had the money, so I’ll say what TSD never seems to say anymore: if you want it and you can afford it, go for it (uh, within reason. No fair buying a Birkin bag and blaming me!).

Ultimately, that’s the best thing that comes out of being part of the PF community.  Although some of us have a reputation as enablers, I think we encourage happiness.  I could see myself as a miserable old miser, cackling over her pennies, without the occasional reminder that the money in the bank is worthless if you never use it.

Thankful.
November 25, 2009

I was working up my 2010 budget the other day.  I always like to plan for the worst case.  I always like to be conservative.  Part of it is that I need to know  my goals are at least achievable before I try, or I get too overwhelmed.  Part of it is just the security of knowing the worst case, if for some reason I didn’t get that raise, or didn’t get overtime, or Chad doesn’t find work all year.  And part of it is seeing those numbers, feeling disappointed, and finding the motivation to try harder, to earn more, to spend less.

The conservative case, if we spend 2010 with only my base income with no bonuses, no raises, but also no emergencies or big unplanned expenses, leaves me averaging a little more than $1,000 per month to put into cash savings.  This amount doesn’t include my 401K, which I have vowed to max out this year, but does include any money I’d want to put into my Roth IRA.

I’ll tell you, it’s not the happiest of numbers for me.  My goal for 2009 was to max out my Roth, get as close as possible on my 401K, and save an additional $10K on top of that.  In 2009, I’ll be able to save 48% of my gross pay (or more, if I get some extra overtime).  In 2008, I saved over 50%.  In 2010, I’ll manage around 25%.

So I was feeling a little bit disappointed, but then (in the spirit of Thanksgiving), I realized something.

There are plenty of people who would have trouble saving $1000 in a year.  My parents, when they were my age, had 3 kids and only high school diplomas, and they would have been lucky to save anything at all.

For some people, a husband unable to find a job could mean the difference between feeding their kids, paying their utilities, or keeping up on mortgage payments.

And some people have no money problems but no savings, either because they can’t find that mindset or because no one ever tried to teach them.

So I’m thankful.

I’m thankful that I found a job I’m good at, that I enjoy, and that pays well. 

I’m thankful that Chad and I have always been frugal, so we won’t need to make a drastic change in our lifestyle to survive on one income.

I’m thankful that Chad is a better engineer than I am, and that he’ll definitely find a job next year if he doesn’t decide to go back to school instead.

I’m thankful that I’ll be able to save anything at all.

I’m thankful that my father bothered to teach me about money and encouraged my savings. 

I’m thankful that my budget still includes a clothing allowance.

I’m thankful for my blog readers, who will probably not call me a rich brat and instead will offer words of encouragement.

Hoping all my Americans readers have a wonderful Thanksgiving! Everyone else, have a wonderful Thursday! We’ll be in NY visiting Chad’s parents and stuffing as much turkey into our mouths as possible!

Combining finances
October 12, 2009

As soon as Chad and I moved in together 4 years ago, I insisted we open a joint account to handle joint bills.  We paid for rent, groceries/eating out, utilities, and other miscellaneous house spending out of this account, and Chad and I just put a set amount into the account each month.  This way, our other accounts were totally separate. If we had broken up, it wouldn’t have been too difficult to disentangle ourselves financially.

That was a perfect solution at the time.  There was no judgement on how the other person spent his/her money.  I didn’t even know how much Chad had in his savings!

Now that we’re married, keeping things separate doesn’t make much sense.  We theoretically will want to buy a house in a few years, so it makes sense to save together for that.  Most of our expenses are joint, so it makes sense to pay for tem together.  And of course, now that we’re on one income, I think it’s important not to delineate any money as “mine” and “his.”

And although it makes sense to combine most of our finances, I also want to preserve that feeling that our spending is our own.  I don’t want to track Chad’s spending (“You spent HOW MUCH on a baseball glove?”), and I don’t want him to be checking mine (“You already spent your October clothing budget, why are you on eBay again?”).

We’re holding off on making a decision for now, until I get my name changed (theoretically, that should happen soon), but that means we’re leaving savings in limbo until we make a decision.

Anyone have any advice?

By the numbers: One Income
July 31, 2009

budgPresented without comment.  I’ll try to formulate some coherent thoughts and explain how I feel about this later.

Budget Mockup – one income
July 30, 2009

We’re still in the hotel, but I’ve been putting together preliminary budget numbers based on Apartment Option #3 (we’re leaning toward this because the apartment so huge!) and my paycheck if I max out my 401K for this year (necessary since I’ll be the only one contributing!).  The numbers worry me a little, because obviously, my savings rate is going way down.  Even with the raise I got with my new job, it’s not enough to compensate for having to cover all of our expenses myself.

I start freaking out every time I see these numbers, especially as I see the uncertainties.  I don’t know how much utilities will be – in California, we didn’t have heat or air conditioning so our utilities costs were low.  Now we’ll need heat in the winter and air conditioning in the summer, and right now, Chad is home so there’s no turning it on or off while we’re at work.

We have been thinking about adopting a dog, and although I know it’s not exactly financially responsible and might be a stupid thing to take on right now, Chad and I have wanted one for a long time.  Chad will be able to be home with the dog, and the dog will be around to keep Chad from feeling lonely.

I don’t want us to sit at home all day on the weekends, especially since Chad will be cooped up searching for work during the week, so there must be room for entertainment.  I also don’t want to fall into the trap of making him feel as though he can’t spend any money.  It’s my natural inclination to track everything, but I’m worried it will seem as though I’m checking up on him.  I have to figure out how to balance my obsessive desire to create more spreadsheets with Chad’s probably need for privacy.  I’m thinking I’ll probably just track his savings and let his checking account be a Sarah-free zone.

The nice thing about putting the budget is that I know we can survive this way in perpetuity, even if our savings rate is a little low.

I’ll try to post some specifics within the next week or so, with a rough copy of  our budget.

Could you survive on half your pay?
January 14, 2009

CNN Money is running the stories of people who were laid off from their jobs & now are making much less than before. Cleverly titled Take this job – or shove it, it gives the stories in the subject’s own words.

(I would like to add that I think all of the from-their-point-of-view slideshows, such as the one about gas prices and a different one about layoffs, are a stroke of genius. Hearing someone describe their problems, rather than reading a description from an impassive journalist, makes it almost haunting. Thumbs up, CNNMoney!)

The saddest thing is that none of these people planned for it. I want to shake some of them, like, “You moved to New York to find a job in banking in June?? Do you even read the newspapers?” As I was reading, I found myself cataloging their mistakes.

The guy making $55K/year is going on shopping trips to Saks? I make more than that & I can’t afford to shop at Saks!

The ex-VP was helping his kids out with car payments. This always sounds like a good idea, like a nice thing for a parent to do, but my belief is that it weakens both the parent and the child. The kid depends on Dad for money & now Dad doesn’t have anything saved for his own future. The guy is 61, he should have been OK to retire.

The same guy who moved to NY in June to find a banking job (he moved there without a job! How could he think that was a good idea? In banking? Seriously?) describes his lifestyle before his move – “going out every night, having fun.” Well, it’s no wonder you lasted about 2 weeks in NYC, then.

It’s easy to shake my head & criticize the choices these people made, while I sit at work and blog. I have my shiny emergency fund & enough money to finish planning the wedding, but then what?

The people in the article were screwed because they didn’t have money & they didn’t have a plan. I have money, but no plan. Guess I better start thinking about one…

Not having goals is harder than it should be
December 9, 2008

Having no set financial goals this month is throwing me off a little bit. Normally I’d be checking & rechecking my budget, looking for ways to cut costs. I’d be in a race not only to meet my goals but to beat them.

This month, though, my primary expenditures are charity and gifts. These aren’t areas where I feel comfortable cutting back. If I can spend $1K on clothes, I can spend as much on gifts for other people! And I would like to donate as much as I can to charity before next year, when everything will be in flux and it’s bound to slip through the cracks.

I also really want to go shopping. I want a fabulous dress for New Years, but I’m torn between getting something really fancy that knocks everyone’s socks off & not going overboard & getting a ridiculous dress that I’ll only wear once. I don’t party much, so getting a feathered dress for $300 seems silly. Not to mention that H&M is bound to have something sufficiently awesome, so I really should just wait until I get to PA. No sales tax on clothes there, either.

Ugh. I know I’m rambling.

Send me pictures of your favorite party dresses! Here are mine!

newyear

1. Theory 2. Express 3. Express (again) 4. AE (not a dress, I don’t care) 5. Marc by Marc Jacobs 6. Silence & Noise (via UO)

How to Spend Your Clothing Budget, Part 1
September 19, 2008

So, I give myself a clothing budget every month.  I’m not supposed to spend more than $100, although I’ve been a bit more lax with myself lately since fall is starting and I need/want some new clothes.

I have been looking at this Express dress for nearly a month now.  Every time I look at it, I want it. (By the way, did we all know the Express has an online store now?)  This is the inspiration for my inaugural “How To Spend Your Clothing Budget” post, hopefully more to come.

1. Express Dress, $79.50 – Go to www.retailmenot.com and find a code that will let you save $30 on a $75 purchase (I’ve seen them!)
2. Express Diamond tights, $16.50 – They don’t have to be from Express, I just didn’t feel like surfing to another site.  I’m loving that the patterned tights trend has remained for this year!  I have an extensive collection, but now I need more dresses to show them off!
3. Ann Talor Loft Shoes, $29.50 – They’re on sale!  If you see something else you like while you’re there, retailmenot.com has a code for $25 off $50!

Total cost: $125.50, or with $30 off coupon, $95.50! Not including tax &/or shipping.

I think that this outfit could work at the office OR for a nice night out.  The flats are practical for running around the office, or for trekking to a bunch of different bars.  Questions about why you’re so dressed up are your problem, though.

What do you guys think?  A decent way to spend $100, or do you just think I have awful taste?

 

ETA: I know Get Rich slowly already posted this, but for those who haven’t seen it, Ramit posted a video and is answering questions on his blog.  The video is a really good one; I know some people were feeling panicky, and I think he does a good job of bringing the focus back to our money as opposed to Lehman Brothers or AIG’s money.  Highly recommended.

To Accomplish List, July 2008
July 8, 2008

I’m coming in really late with these goals.  I blame my vacation, a blissful 2 weeks of reading books, playing with my parents’ dog, and not being at work.  Sadly, my time off had ended and I’m back at work.

July 2008 Goals & To Do List

1. Save 50% of my pay.
This is a bit of a stretch goal, since my current numbers say I’ll come in just shy of that amount.  I know there will be a slight bump in income from an incentive program at work.  For the remainder, I think I might be decreasing my deposit to my personal spending account for a paycheck or two.  I’m just going to have to be careful this month.

2. Buy no new clothes (except for H&M splurge, damage already done).
I mentioned in my last post that I feel like I’ve been spending too much on clothes.  Technically, I haven’t.  This is why I created a separate account!  Nevertheless, I feel a bit guilty at how much I’ve been spending.  I’m going to hold off buying anything else this month.  I’m hoping that I can last until September!

I’m still trying to decide if I’m including gift cards in this.  I have one for Express and one for Target. 

3. Finish apartment cleaning/redecorating before Chad’s parents visit.
They’ll be here the weekend of the 18th, so I’m not sure we’ll get everything done.  I’m hoping to get at least the living room done by then, but it would be nice to finish the bedroom as well!

4. Email the dean at USC to see if any of my undergraduate classes can be applied toward my Masters.
No one at USC can tell me if they’ll accept this class.  I can’t find anything on the web.  The only thing left to do is to formally ask, but I guess the acceptance/rejection will answer my question.  I didn’t want to feel like a butt if it was rejected, but I guess that’s the only way!

5. Buy a ticket home for Christmas & New Years.
I have a ~$100 credit at Expedia that expires in August, so I have to make sure to book soon.  Too bad I just found out that I might be traveling to the East coast again, right around that time, except no one knows which dates I can expect to travel.  I’m booking the flight now, just to be safe!

6. Decide whether or not to buy the wedding dress I found.
My mom had me trying on wedding dresses, and I found one that reminds my of my dream dress.  It’s still pretty pricey, although not quite the thousands of dollars I would expect to pay for the Lazaro dress.  I worry that it’s too soon to buy a dress, though.  I also worry because I’ll need to pull $750 out of savings to cover it.

7. Buy a new laptop.
It’s sad that I have to make a goal out of this.  I’ve been needing a new laptop for ages – my current setup is a 6-year-old laptop and a 7-year-old desktop that I access through said laptop.  Neither one is particularly fast, and they both keep me tethered to a desk since they can’t be unplugged.

After months (since March 2007!) of deliberation, I’ve decided I’m getting a MacBook.  Bonus: they have a deal right now for college students where you can get a free iPod Nano or iPod Touch.

8. Control joint account spending.
This is going to be hard since I’m trying to spruce up our apartment.  It is full of college-type decorations (no beer bottle decorations, at least), and I have been reading too much Apartment Therapy. However, there are a few categories we can cut to give us wiggle room there.  I’m thinking:

Less than $250 on groceries. I’m not sure if I see this happening, we had a mini barbeque for the fourth and spent waaaay too much moneyon junk food.

Less than $50 on eating out.  This sounds stingy, but we have gift cards to The Cheesecake Factory ($150 worth) and I know we’ll be sick of restaurant food after his parents visit.  $50 should cover the “Ugh, don’t feel like cooking” burrito/pizza runs.

I’d like to pretend we can reign in spending elsewhere, but we probably won’t.  I know goals aren’t supposed to be easy to reach, but I don’t want to try for the impossible, either!