Wednesday, February 27, 2008

Personal Experiences

It amazes me how many personal finance blogs are now out there. It seems like every week I find a new blog that I want to subscribe to. It kinds of makes me wonder why someone would want to read my blog. My posts are not as useful, well thought out, nor frequent as other bloggers I admire.

In the end, what we're all sharing about is our personal experiences with our own writing styles and our own struggles. I struggle with an dilettante's obsession with personal finance. I've always been more of a generalist in life than a specialist and it shows in the number of extracurricular activities I was involved in while in high school, the things I studied while in college, and even to some extent my career. I wish I could be more driven to track things like Madison at MyDollarPlan or even as dedicated as Millionaire Mommy Next Door with my investment plan. I wish I could devote the time and dedication come up with a solid long term plan rather than just a general idea of where we want to be in at major milestones in our lives.

I just finished reading Your Money or Your Life: (aff link) which I checked out from the local library. I had skimmed through the book before when I was at a relative's house and saw a copy. That was back when I was first getting into personal finance and I thought that a lot of the ideas seemed pretty kooky (e.g. what are you trading your life energy for), but now it seems like a good thing to sit down and actually do the program.

I've convinced C that we should read the book together and do the exercises together since we need to do a better job of managing our finances together. I hope that C and I can read the book and finish the exercises by the end of the year.

Monday, February 25, 2008

Cutting Out Recreational Shopping

Many people enjoy recreational shopping, where one goes shopping for fun without actually needing anything. Yesterday C suggested that we go to the mall. This immediately raised red flags for me since I've come to realize that we just have so much stuff (we fill all the closets in our home and we could still use more storage space). I asked him what he needed and he tentatively said work clothes. Upon asking about what type of work clothes he needed, I surmised that he didn't really need work clothes or if he really needed more work clothes, he should give away some of his current clothes.

My life isn't like Colin's at No Impact Man, but I am really starting to question the things that we buy. Colin is also helping to influence me to think more about my carbon footprint and my impact on the environment. One way I'm trying to reduce my impact on the environment is to cut down on my recreational shopping. Now for each item I buy that is non consumable, I think a few questions to myself:

Do I really need this?
Am I going to use this?
Do I have room to store this?
Is this going to replace something else I already have?
If yes, do I need this?

Ok I admit, I don't think about all of these questions before purchasing something. I do try to at least think about 1&2. If it's something that I'm going to use a lot and it's going to make my life a lot easier, I will go ahead and buy it (e.g. we just got a salad spinner).

Friday, February 22, 2008

Thinking About Job Searching

I have always thought that you should stay in a job that is part of your career path for at least 2 years. I'm nearing my 2.5 year anniversary with my current company and I'm getting antsy. These past few weeks I've been learning more about what I don't want to do. But I'm still at odds with what I do want to do.

When I first started this job, I knew that it would not be feasible for me to be in this profession long term. Weekly travel is not conducive to family life and I want to have kids in about 2 years. I think it's bad to go on maternity leave too soon after getting a new job, so ideally I should be getting a new job now, or at least preparing for it.

On the other hand, I don't think I'm ready to leave. I love the travel points I get. I don't think I have to work too hard, although most of my friends and family consider my weekly travel to be a larger burden than they're willing to bear. I, on the other hand, love it. I think I could get to six figures pretty easily in my current job (of course since I'm pretty close, I could also get to six figures by switching jobs). I'm in a company when growth, promotions and career advancement are based on you as a person, not about a new position opening up or someone leaving. I have a good reputation which should allow me to be more picky about what I want to do, as I get a better handle of what that is.

I vacillate between thinking about where I want my career to go, but I feel the clock ticking.

Thursday, February 21, 2008

Fear of Posting

I have a great fear of being totally honest when writing since this is supposed to be an anonymous blog. There are so many details in my life that are very unique and I fear posting about them all would make it super obvious who the author is to any friends or co-workers stumbling upon this.

I also am exposed to a lot of information that I think would be of interest to my readers and my target audience through my job, but of course, I want to keep those items a secret. A lot of those things are open information available to anyone who wishes to pursue it. But some topics are so specialized that I would fear my colleagues doing a search on a specific intricacy related to the financial services industry and finding my post if I actually wrote about it.

Here is something I wanted to write about, but didn't publish earlier because of my fears. Also, my blog postings are often more generic that I would like them to be due to my fear of being made known.

Last year I had the opportunity to go on an international business trip. My husband was able to tag along – basically for free. He stayed in my hotel room and we were able to get my company to reimburse his airfare. I’m really happy that we were able to get his airfare reimbursed, but it did come at a taxable cost to us. Rather than flying business class, as company policy allowed, I flew coach class. My ticket plus my husband’s ticket was less than the cost of one business class ticket, so our vacation also saved the company money! We were able to save on food costs by getting food at the grocery store. Some of our money saving tendencies really are habits, so we don’t even think twice about them. I think in the end, my meal allowance more than covered the cost of our food. I realized after the trip was over that we didn’t even go out for one nice dinner! We would go to semi-nice dinners, but it was almost always less than the cost of my meal allowance for one person. We also ended up taking quite a bit of money out of the ATMS (we were in multiple countries). My main tip on foreign ATM usage is to try and take all the money you’ll need once to save those pesky fees from adding up. We got charged an out of network fee, plus conversion fees, plus who knows what else. In the end since the trip didn’t really cost us anything, I didn’t sweat these small one time charges too much, but as someone who almost never gets charged ATM fees (I think I used one out of network ATM in the U.S. in my life) it was shocking to see my money being eaten away by fees!

Monday, February 18, 2008

An Unexpected Find

I was at my mom's house the other day and I decided to take some of my old magazines from childhood. I thought I might be able to sell them online - one time I had put an ad for them on craigslist and someone offered me $40 for the box. This was a couple of years ago, and I didn't end up selling them then since the timing wasn't right. I figured I should be able to get at least that much, if not more. I went over to ebay and I saw that someone sold a lot of these magazines (30 in all) for over $200! I was shocked and surprised! I need to do some research as to whether it's worth the time and effort to list each magazine individually or to just sell them as a lot. I don't even know how many magazines I have, but it should be enough to get me a lot further than 1% towards my goal of generating $2,000 in online income this year!

Friday, February 15, 2008

Switching from a Regular 401K to a Roth 401K

My company recently began to offer the Roth 401K as an retirement option in addition to the regular 401K. Today was payday for me, so I decided to check to see if all my direct deposits made it safely to my bank accounts (I am somewhat compulsive on certain items and I have my direct deposit going to 5 different accounts). I checked Bank of America, where I keep my ATM withdrawal money (I'm not happy with their interest rates or customer service, but they do have the best coverage in terms of locations and ATMs for those who travel around the U.S.). I was surprised to see that the money hadn't hit yet.

I decided to log online to check out my paychecks. When comparing my most recent paycheck to my last one, I realized that this was the first time my Roth 401K contribution was withdrawn. Then I realized that the Roth 401K contribution seemed a lot larger than my prior month's contribution. So I went and looked at my last paycheck from January and saw that this paycheck's contribution is almost 39% higher. !!! WTF!?!?!?! This resulted in a 21% less money going to my various savings/checking/investment accounts. I thought I had decided to contribute the same percent of my income to the Roth 401K as the regular 401K.

This is going to require further investigation, but it did make me think about one thing - should I just max out my 401K contributions now* and get a much larger paycheck later in the year? At my current rate of contribution, I'll probably max out in 6-8 months, depending on any raises I get this year.

*For some of you out there, this might not be a good idea due to the way certain companies calculate matching contributions. For me, it doesn't matter since the company match is calculated at the end of the program year and it's so small with a somewhat long vesting period that I'm not sure if I'm ever going to keep any of the match. If your company calculates the match on each paycheck's contribution, it makes sense to time out your contributions to get the full match.

Wednesday, February 13, 2008

Becoming The Jones

There's a lot of talk about not keeping up with the Jones, but what happens when you become the Jones?

C and I were out with friends. We were talking casually and we discussed going on a weekend trip together. C and I were encouraging our friends to take the trip with us. For us it would have been minimal cost since I travel a lot for work, hence I get perks like free flights. It was a very casual conversation and it probably wouldn't have gone anywhere due to lack of initiative to plan. Anyway, then our friends told us that they're not planning on taking any trips this year since they're in debt from their recent wedding. I quickly said that I understood and that it was great that they were working on getting out of debt.

Moments later, I realized that we were the Jones, encouraging them to spend more money than they could comfortably afford! I'm really proud of the fact that they said no. I wasn't aware of their financial situation and I would never want to encourage someone to do something that goes against their life goals.

Monday, February 11, 2008

January Spending Review

I am pretty proud to say that my husband and I did a pretty decent job of tracking our expenses for the month of January! I have always been a fan of automated savings, and just spending everything that was left so I didn't really have a good idea of where our money was going. We decided to track all expenses except those expenses that are fully reimbursed by our employers. For example, for any business trips we took, we didn't count the cost of hotel, rental car, airfare, etc. I did count the cost of meals since both my husband and I get per diem when we travel. Per diem is a meal allowance that we got for each day, no matter what we spend. So if I spend $100 on food, some of that is coming out of my own pocket, whereas if I only spend $10 on food, I get to add some extra savings to our monthly inflows.

So here is the breakdown.
Total expenditures: $4,965.48*
Rent: $1,600.00
Tithe: $1050.00
Eating Out $707.92
Gifts $307.70
Groceries $285.45
Misc. $279.68
Monthly Bills $195.87
Travel $165.21
Entertainment $88.00

Since I didn't have any preconceived notions about where our money was going, I was happy that C and I were able to have at least a 1 month record showing the granularities of our expenses. I knew we spent a lot of money on eating out, but I didn't realize it's about 2.5 times as much as we spend on groceries! A lot of this is due to travel schedules. I found it interesting that C and I only had 4 meals out together and only 2 meals out together with just us. Included in those 2 meals we had with others also includes us treating others due to special occasions. I have tried to emphasize that I want our meals out with just us to be special affairs that we really enjoy, rather than an act of convenience. We eat out by ourselves as an act of convenience too much as it is!

Our monthly bills are also missing our monthly electricity bill. We got one at the end of December and another one at the beginning of February. I'm not sure why that happened, but I decided not to include it in our monthly review since we didn't have to pay it out in January.

I thought that our spending on gifts might be abnormally high, but I figure in other months there are other one off items that would offset a lower amount spent on gifts. The travel budget was spent on a weekend trip where some of the expenses were paid in December, so this cost here is less than the cost of the trip, but accurate of what we spent in January.

I know that we forgot a couple of expenses here and there, but this is a good snapshot of what our monthly expenses are. I'm pretty comfortable with this. The main thing I would want to change is to decrease the amount we spend on eating out and increase the amount we spend on groceries!

* Note this does not include automatic payroll deductions like taxes, 401K savings, health care, long term disability insurance, flexible spending accounts nor other savings

Saturday, February 09, 2008

Update on Goals

It seemed like I was waiting for January to pass and before I knew it, it's almost the middle of February.

First, I want to say thank you to Well-Heeled for giving me the code for the progress side bars. As you can see, I only have 2 side bars, but if you remember, I had 3 goals for the year. I'm not really sure how to track my fitness goal of running. Maybe I'll put up a progress bar for 13 miles and as progress, I'll put up the farthest I've run without stopping (as of this writing, it's only been 2.5 miles and it's taken me a long time to build up to that length).

For my goal of earning $2000 of online income, I only had a dismal $25.99 for January. I need to spend some time on this blog to put it in a position to earn at least a little bit and start selling some stuff online.

For my goal of obtaining $25,000 in my early retirement goal, I wasn't able to amass the amount I needed and I was hurt by the stock market fluctuations since I have the majority of that money invested in the S&P 500. I'm planning on doing some research on alternate investment ideas and thinking about adopting Millionaire Mommy Next Door's investment strategy. I was able to add $890 to this fund. But since I realized that I would still need to add $1212 a month if I had 9% returns and I had negative returns in this month, I'm going to need to make up for the shortfall. One way I'm going to try and make up for the shortfall is I'm going to add my complete per diem meal allowance gained when traveling minus expenses to my retirement account. This will probably add another $100-$200 per month. On the side bars, I have tracked this as a goal of $16,000 rather than $25,000 since I started out with $9,000 at the beginning of the year.

Also I wanted to say thanks to Brip Blap for including me in the Carnival of Financial Goals III. Check out the carnival to see what other goals people have!

Tuesday, February 05, 2008

Managing Holiday Gift Expectations

Valentine’s Day may be a holiday promoted by the greeting card industry and their subsidiaries to get us to spend more money. There are numerous ideas out there on how to save money for this upcoming holiday. When you’re in a committed relationship, I think the holiday is all about expectations.

My husband and I are making an effort to spend less on stuff and to spend more on experiences. That doesn’t mean that a girl like me doesn’t appreciate the loving trinket here and there. One of my favorite presents my husband gave me was something that cost less than $10, but it was extremely thoughtful and completely unnecessary. It was a little trinket that he found with my nickname on it.

This year to manage expectations, C and I made a deal. We will be getting each other gifts, but the max price on them is $25. This way no feelings are hurt if one person spends a lot more or if one person decides to forgo the commercialism and get the other nothing.

Of course when you’re in a new relationship, it might not be so easy to be forthcoming and manage expectations. My friend and her boyfriend agreed not to buy presents for each other this past Christmas. However his friends were convinced that when they said no presents, she would still expect something (to a certain degree, I would agree that I would expect something small). He ended up getting her theater tickets, which she loved, but then she had to scramble to get him something. I think it’s much easier when you can honestly communicate with your significant other to ensure that expectations are met.

Friday, February 01, 2008

My Ethical Dilemna

I saw that PaidTwice posted about a recent ethical dilemma she faced, which reminded me to post about something I had been thinking about.

I travel a lot for work. What amenity items are really mine for the taking and which are ethically questionable for me to take? I come from an ethnic background that is stereotypically cheap. I'm not that surprised when I see hotel emblem bearing towels at the homes of friends' parents. For me, anything that is not meant to be consumed while in the hotel is off-limits. In addition, large quantities of consumables put in the room for the comfort of the guest is also off limits in my book (that would mean the extra roll of toilet paper, etc.).

However, I am a big believer in taking the mini shampoos, soaps, etc. I use some of these items myself while at home, but I have decided to donate the majority to a local homeless shelter. On a side note, I can't believe it took me several months to find a homeless shelter to donate to - I called a few, expecting to get a call back and there was no response! My web searching wasn't too helpful in finding an acceptable place (i.e. in the San Francisco), so I finally contacted the city government office on the homeless and they were able to put me in touch with a shelter that was easy to give to and very grateful for the donation.

Now the area which I am starting to question of removal of the consumable goods provided for guests is on two fronts. The first front is on the coffee and tea packages provided in the hotel room. My thinking is if I only take what I normal person would consume in one evening, it's acceptable practice. Hence if I take home a bag of tea or two, that's perfectly acceptable (I don't trust the cups in the hotel, so it's unlikely that I'll enjoy the tea there, but I'm very happy to consume it in the comforts of my home).

The second area of my thoughts might be too much information for some of you, especially the men out there. I fly a lot - pretty much twice a week. One thing I noticed was that airplane bathrooms always have feminine products. Most planes seems to only have pads, but the airline I take normally has pads and tampons. Of course, these are amenity items for passengers to use. Most of the time I'm too comfortably ensconced in my seat to bother going to the bathroom, but on the occasions that I'm there, I will often grab one or two items. Would it be unethical for me to take a pad or tampon each flight I take, despite the fact that I'm not using it immediately? This could save me from every having to purchase feminine products again! Of course, so would investing in and learning to use the divacup.