About sixteen years ago, I met him for the first time. My trainwreck sibling brought home this adorable puppy he had no business adopting because he had not one thing in his life that wasn’t a mess. I was furious at my sibling – he didn’t even take care of himself, how could he drag
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May 4, 2007
After I published that last post, I saw my empty Roth 2007 meter. I’m not a total hypocrite, I have $1200 in savings waiting for 1800 more friends so they can go to Contribution Heaven together.
Waaaait a minute!! I’m an idiot. No really, I’m an idiot!! I was thinking of my 2007 IRA as a wholly new IRA, independent of last year’s, so that meant I had to meet the $3000 minimum again. What? Well, I would, if the investing world were run by idiots like me!! That logic is completely illogical.
*sigh*
I really hope that this is just a product of my sleep deprivation, and not a general indication of my financial intelligence. Do we have such a thing? Financial IQ?
May 3, 2007
What a silly question. Yes, yes, yes, I want to! It’s not just that I’ve been itching to ditch work and home and all the attendant concerns. It’s trekking carefree across the plains (er, metaphorically, of course), eating my way through the gastronomical delights that are suppli, potato pizza, boundless pasta (carbs, carbs and more carbs), the orzo, the lamb, the calamari …. Yes, I want to go!
But that just awakens my ever-lurking conscience: When is it justifiable to spend money for pleasure, when (as evidenced by the yawning goal meters to the left) every penny is spoken for? Where is the line drawn between respecting the greater goals, and refusing to live life?
Everyday, we make these choices as we navigate our consumer-driven society. Every possible need and want that you can imagine, and a few that you couldn’t, are marketed based on the ad agency’s ability to convince you that you need their product. Not based on your needs and definitely not on your budget, remember, but based on what they can get you to spend. As consumer-captains of our personal finances, we have to make spending decisions based on our priorities, and our actual budgets.
I thought I had this figured out, but this isn’t a static decision. If it were, I wouldn’t need to reevaluate my budget every six to twelve months. I wouldn’t bother to adjust my goals, nor would I waver from the prescribed course: Eat your fruits and veggies, contribute 15% to your retirement plan, save 10% of your budget, etc., etc., etc. What I’m trying to say is that Life tends to get in the way of these things.
It’s pretty easy, at first, to cut out the fat. After all, I know how to tell the difference between a “need” and “want” at the most basic level (for America, anyway. Most bets are off once you leave the country). Food: Need. Roof over head: Need. Running water, electricity: Need. And so on.
Occasionally, one needs (or wants) clothing, a meal out with friends who are in town but once or twice a year. (See the results of No-Spend Month, April). Yes, the odd movie out, when the movie ticket is quite cheap, is permissible. And yes, much has been made of the Latte Factor; the small purchases do indeed add up very quickly. Especially on a small budget: $3 here and there doesn’t sound much until you realize that your spending allowance was only $25 to begin with!
But again, there’re the easy decisions like idle spending because you’re online and bored? Bad. Spending because you’re bored and near a mall? No! Vacation travel? Going somewhere fun that costs money to get there, to stay there and to eat there? Just for fun? That’s not a need. That is most assuredly a want. How quickly a pleasurable and educational activity that can be done on a budget gets demonized!
Inevitably, I’ll remember those MSN Money-type surveys that “analyze” your spending habits, and it always asks some variation of the “If your friend asked you to go on a trip of a lifetime but it’ll cost $2000 that you don’t have right now, what would you say?” Of course, I always answer “C: tell your friend you would love to go, but don’t have the money right now. Then start saving for the next trip of a lifetime.” I’m such a liar. I always pass on the trips, but never can find the gumption to divert funds from the more realistic needs like funds for car maintenance or insurance or other expenses.
See, here’s the thing: most times I think, “it’s not going to kill me to give up this movie or that outing.” But that’s not the point, is it? It’s not that it’s going to kill me. It’s that I’m not experiencing life, just the view from my bedroom window. Which is basically the lackluster little sister version of “it’ll kill you.”
By placing what I see as realities of life, such as emergencies that require readily available cash (within a few days or weeks) and the demands of the future like planning and funding my retirement, ahead of immediate gratification, protecting the tomorrows at the expense of the todays, am I defeating the purpose of all these efforts? Am I failing to live life?
Conversely, deciding the priorities of a thoroughly-lived life is all very well in theory, but when does that start becoming reality? And is now, at 24, far too soon to expect to really live life? Is this the hallmark “me me me, now now now” instant gratification expectation that seems to exemplify Generation Y?
May 1, 2007
“Let me ‘splain. No, there is too much. Let me sum up….”
Gas: 183.11
Food: 23.36 (Restaurant/eating out only, doesn’t include groceries.)
Clothes: 100.60
Personal Care: 10
Travel: 0
Entertainment: 0
Wow, that looks like it was a miserable failure. Actually, I really bought the clothes in March, which is what kicked off the no-spend months to begin with, but it showed up on my credit card statement on April 2nd. I think that means it comes off. I think that gas should get a free pass too, because I always have to pay for gas for the cars, whether or not I drive that month.
So, really:
Food: 23.36 (Restaurant/eating out only, doesn’t include groceries.)
Personal: 10
Travel: 0
Entertainment: 0
Total: 33.36
Now that I’ve meddled with the data, I think it looks like a rousing success!
No, really, the eating out and other personal spending are the two true variable categories where I actually have a choice to make about whether or not to spend the money. Sometimes I don’t have a choice, I have to spend it on a haircut, etc., but other than that I don’t have to spend on entertainment, or eating out and I can be more careful and plan ahead when I’m going to travel.
I did have one slightly shady transaction which was the pair of sunglasses that my friend bought for me. It’s a little shady (no pun intended) because she bought them simply because it was no-spend month for me. It’s a close cousin to mooching, I’m afraid.
April 30, 2007
For every shopping window you open, open up a personal finance or investing research page, like Yahoo Finance, or the Motley Fool. At least, those were my Ghostbusters when I was idly listening to a Style sement from some random morning show. I knew there was a reason I never watch morning TV!
Trying to read about 3 Stocks that Missed the Mark and the market moves of the Starwood hotels while browsing the shoes at PaylessShoeSource.com and trying to find that REALLY cute denim dress featured on the show caused such a mental disconnect that my brain fizzed and I had to close up all the shopping windows.
You could practically hear the “zhoomp” of the shopping lobe shutting down, cowering in fear of the investing/saving lobes. I know, it’s two against one, hardly a fair fight. But when you figure it’s a zero-sum game with my paycheck, thank goodness the odds are weighted against spending!
Is anyone else having a case of the Mondays?
You may recall, good readers, that I brunched and spent time with the friends last weekend. I might have mentioned, also, that we’re all at different places in our financial lives. Purtroppo (unfortunately), I forgot that one of the girls I could always rely on to be a fellow starving-college-student budgeteer is now working a real job with real pay and … is living on her own with no dependents.
As she lamented her recent weight loss but not in the *ahem* assets, that made a $150 dress fit perfectly but for one key area, I said, “Hey, it’s a good thing you can’t fit into a dress you can’t afford anyway, right?”
Friend: “Of course I can afford it.”
*thwomp* Now where did my foot go…? Ahh… yes.
April 28, 2007
You know that feeling when there are a hundred different issues and priorities floating in your mind, all vying for attention like a horde of kids swarming a favorite cousin? And then you have to firmly set them all down and explain in detail the distinct characteristics of a line, and the formation thereof? Else you’re just going to leave and not a one of them will be satisfied, darn it!!? Yeah, that’s about it right now.
The kids: “hard” finance, “soft” finance, “maintenance” finance, etc.
1. Hard:
~ Selecting funds for my new retirement plan with a 10% company match, and making sure that it jives with my existing supplemental retirement plan to which I’ll continue contributing. Roughly, 5% of my income is only approximately 1/3 of the amount I contribute paycheckly, so I’m making up the other 2/3 through the unmatched plan. It makes sense simply because I’m not out of pocket much more or less, and since my income fluctuates anyway, it’d be nigh on impossible to figure out exactly what 5% means in every OT scenario. I don’t have that luxury of time, I should be working!
Since I’m sticking with Vanguard, I’m considering an asset allocation composed of the following funds:
VTSMX – Total Stock Market Fund
– Large Cap Fund
– Mid-Cap Fund
– Small-Cap Fund
– Emerging Markets Value Fund
– International Growth Fund
2. Soft:
~ Fill out the DMV’s SR-1.
~ Start selecting body shops to get the estimates for the car.
3. Maintenance:
~ Cut the rent check
~ Decide if it’s worth spending X amount from my personal care account for something I can probably do on my own, just not as well. (This is a matter of time, which I don’t have as well, and I actually don’t have much wiggle room in the budget, so I’ll just do it myself.)
4. Etcetera:
~ Get ready for the Little Boss’s lunch out in the (bourgie) boonies. Have to rely on a friend for a ride because we’ve two cars between three people, and Ma&PaDucky have conflicting schedules today.
~ Consider Little Boss’s wife’s job offer. It wasn’t a firm offer, per se, but she was looking into finding openings for Pa and didn’t have anything that fit for him at the time. She suggested that I consider taking on a sales position with her team part-time because it has greater earning potential than any other part-time gig I could have. Except, I’m the total opposite of a sales personality. Anyway, this is probably a topic for an entirely different post.
