Scared of Money

How I Choose My Vanguard IRA

2006-04-12T20:26:00.000-07:00

I finally choose my Vanguard IRA. I gave Vanguard my timeline for retirement (40 some years from now or earlier if possible : ) and they gave me three choices - Growth Index Fund, U.S. Growth Fund Investor and Mid-Cap Index Fund. I narrowed it down to the two index funds because my financial planner from work recommend an index fund. Then I looked at both of the fund's descriptions, past performance (yes, I know, I know, past performance doesn't guarantee future results), looked up the definition of mid-cap on wikipedia, recalled the cover of BusinessWeek that said mid-caps were outperforming blue chips and decided on the Mid-Cap Index Fund. Was it scientific or strategic? No. BUT I made a decision, didn't miss the tax deadline for the 2005 IRA and now have one less thing to worry about. I can always change my mind later.

Baby steps, baby steps...

Crazy, Free Stuff from Restaurants

2006-04-12T19:50:00.000-07:00

I love food and I love free stuff, so imagine my pleasant suprise when I found this post fromFree Money Finance on joining birthday clubs. I joined the birthday clubs from Coldstone Creamery and Baskin Robbins, so I can get coupons for a free birthday cone. Then imagine my complete delight when I found out from the Festival of Frugality posted by Money and Values that Noodles & Company will send you a coupon for a free meal when you sign up AND on your birthday. While checking out Noodles & Company, I noticed that they directed me to a Web site called Fishbowl.com, so I decided to check that Web site out, and apparently they put together loyalty programs for restaurants. So by checking out their clients, I was able to find programs for Dairy Queen's blizzard club, Maggianos and Red Robin. Hopefully, I don't have to use the coupon ON my birthday but get a little leeway. : )

Other restaurants that I wasn't as excited about include Famous Daves, Houlihans, Qdobas, Red Lobster and Joe's Crab Shack.

Enjoy! And let me know if you know of any more. You can never have enough free food.

How Much is A Private Education Worth?

2006-04-09T21:14:00.000-07:00

I went to a top 25 University and have about $14,000-$15,000 in debt with about 12 years to go. It equates to about $115 a month, which is very affordable all things considering. Do I think my private education helped me get a better job? Nope. Most of the other students I work with went to a state school. Did the brand name of my school get me a larger salary? Nope.

So was it worth it? Would I do it all over again if I had the chance? With out a doubt. I think I was pushed much harder than I ever would have been at a state school because of my professors and because of my peers. My school's values have translated to my own values, and I think that after 4 years there, I left a better person. With that said, I think you can get a phenomenal education no matter where you go if you take advantage of the resources offered to you. I also read that those who attend Ivy Leagues aren't successful because they attended an Ivy League school. They are successful because the traits that got them into Ivy Leagues are the traits that make you succeed in life.

The reason behind this post? I was reading an article from The New York Times on how parents are letting kids pay for college and several quotes really struck me.

Alexandra Baldari and her parents have talked a good deal over the past year about how to pay for her college education, and the upshot is this: If she enrolls at the University of Miami in the fall, she will bear much of the cost, which could total $40,000 or more a year, on her own.

Ms. Baldari's parents earn about $100,000 a year, but her mother, Anne Angelopoulos, said little is left after paying for housing, three cars, gas, food and utilities, as well as saving to contribute to Ms. Baldari's 11-year-old brother's education. Ms. Baldari's parents prepaid for her to attend a public university in Florida, but she does not want to go to a public institution.

So is the University of Miami worth being almost $160,000 in debt rather than going to the University of Florida? Will Alexandra really receive an ROI on her education worth going that far into debt? I doubt it.

Still, some students say they are unwilling to let financial constraints dictate where they go to college. Thomas W. Dillon, 20, of Warwick, R.I., decided to go to the University of Connecticut over the University of Rhode Island, where his parents would have covered tuition, and faces tens of thousands of dollars in debt.

"The way I see it is, I only get to go to college once," Mr. Dillon said. "If I have to pay an extra $20,000 a year, that's what I have to do."

Whoa. But not once does the article spell out what that will cost Thomas in payments, or how much more can he expect to earn from attending the University of Connecticut. I'm sorry but 18-year-olds can not fathom how much debt this really is. I know I didn't. It should be illegal to allow students to incur more than $40,000 in student loans with out providing direction on how this will affect their financial well being for the rest of their life.

Would my undergraduate degree be worth it if I was now $100,000 in debt? Not so much.

Others? Did you go to a private or public university? Any regrets?

Which Vanguard Fund Do I Use For My IRA?

2006-04-09T10:42:00.000-07:00

Target Retirement 2045 Fund?
Small-Cap Index Fund?
500 Index Fund?

This is when I shut down because of all the choices. I took the preference choice and choose high-risk and aggressive choices (although this isn't my personality) because I know at my age (25) that I should make aggressive choices. They gave me the choices below. This isn't all of my money or even close but so I should be ok choosing aggressive funds. I'm leaning towards the Growth Index Fund since that the financial advisor at work suggested an Index fund.

Growth Index Fund
U.S. Growth Fund Investor
Mid-Cap Index Fund

Does anyone have any experience choosing an IRA fund especially from Vanguard?

If the Housing Bubble is About to Burst, When is the Ideal Time to Buy?

2006-04-09T10:27:00.001-07:00

I read a post in the Housing Bubble blog about a Nonstop Flood of Foreclosures in Denver. This summer, there is supposed to be a record surplus of homes in Denver. Will this drive prices down? Theoretically it should, right? Ideally, I would like to buy in February 2007 but am afraid that I could buy when prices are at its peak.

Any thoughts on timing?

So Why Am I Scared of Money?

2006-04-08T10:47:00.000-07:00

I'm an avoider according to a recent post by Sitting Pretty: Money Personalities.

Definition: Avoiders put off dealing with money management because the task overwhelms them. Since they don't like budgets or keeping records, they frequently forget to pay their bills.

Some blogs have titles such as I Will Teach You To Be Rich or Savvy Saver. I belong in the Financial Train Wreck category.

I get statements from my parent's estates saying that I have so much money in an REIT. What the f*#k is an REIT? (Real Estate Investment Trust but I had to Google it.) So I let the statements stack up without really deciding anything.

I wasn't kidding with my initial post, I am a financial mess. I would just rather not deal and pay the late fees or deal with whatever the consequences might mean. I have kept money I inherited from my parents into a low-earning interest money market account for a year because I have NO idea where to begin. This blog is my way of taking baby steps to getting my financial life in gear.

How do others fight the overwhelming feeling they get when have NO idea where to begin?

Rock Star Lifestyle on a Dime – Art and Accessories for the House

2006-04-07T12:36:00.000-07:00

I have this unexplainable desire for plates and glasses and other crap I
don’t really need. Even though I have more than I have room for in my
studio, I want more. Along the way, I’ve found some great deals and wanted
to share some tips. I got my everyday plates, bowls and coffee cups (fine
bone china by Rhumba) from Overstock for less than $50. To be honest, I
haven’t had anything but bad luck with Overstock. One of the cups was
broken. I once ordered a coffee table, they sent me an umbrella. I ordered a
shelf and the glass was broken, so buyer-beware with Overstock. However, my
former roommates, sister and cousin have had great luck with them. My cousin
saved a $100 per stool on the exact same stool they were planning on buying
from Great Indoors.

I’ve also had great luck with Crate & Barrel’s online outlet and found some
super cheap deals there. We don’t have a real Crate & Barrel outlet but if you’re an outlet fan like me, here’s a great tip – call and ask them when they stock their
merchandise. Great deals can go quickly, so ask them what days they get their
shipments in and stalk the store on those days.

If you like framed art like I do, be sure to check out local student artists
and their sales. The student art league has a giant sale each year and you
can find cool stuff there. The art center where I take ballet,
semi-regularly has a pottery sale from its artists. My Dad also used to use
eBay to buy art from unknown artists. I truthfully can’t tell the difference
between their artwork and the professionals, so why pay the difference? The
best method to buying art I’ve ever heard is something along the lines of that it doesn’t matter whether you get it from an art gallery or a garage sale, it just has to be moving to you.

I also inherited my parent’s taste for all things Asian. You can buy
expensive plates at your local gourmet shop OR you can check out your local
Asian market or food store. I’ve found super-cheap plates at a place called
Troung an Video, which in addition to renting Asian videos, has a large
selection of Asian Plates.

Any other tips?

Checking off an item on your life's to-do list? Priceless.

2006-04-04T21:28:00.000-07:00

$100 for a twelve-week ballet class
$117 - Two pairs of pink tights, one black leotard, one black skirt and one pair of pink ballet shoes

$217 - Checking off one of the items on your life's to-do list. Priceless.

I just finished taking a ballet class, which is one of four items on my life's to-do list (the other three are to write a book, learn Italian and to visit Africa). I always wanted to take ballet when I was little, but I was so uncoordinated that my parents signed me up for pottery instead. I would walk by the ballet studio on the way to sling clay around in my pottery class and would be so envious of all those graceful dancers. So I finally got around to signing myself up for ballet. I wanted to quit the first night because it was a little painful (as all dance classes typically are for people with no balance, coordination or rhythm. : ) But I stuck it out and the $217 was well worth the feeling of accomplishment. I liked it so much I signed up again for another twelve-week course.

This is exactly how I want to spend my money. On life experiences. Trying different things. Pushing myself out of my comfort zone. This summer I'm really going to push myself to get out of my apartment and to LIVE. So I also signed up for a 0ne day class on Japanese flower arranging. : )

$50 gift card to Amazon for opening a Compass Bank Checking Account

2006-04-04T18:33:00.000-07:00

Compass Bank is offering a $50 Amazon.com gift card if you open a checking account with them. Must be a resident of Alabama, Arizona, Colorado, Florida, New Mexico or Texas to qualify.

This is my first foray into one of these deals. I'm hoping they don't do a hard credit check as I finally got my credit score up to a decent number (772). But if they do, I should be fine. I'm not looking to buy a house for at least a year.

Credit Card Companies Charge Extra for Using Cards Abroad

2006-04-03T16:47:00.000-07:00

Be wary of using your credit card abroad, because almost all credit cards
tack at least an extra 1 percent transaction fee to your total purchase,
according to a recent report by IndexCreditCards.com. Visa and
MasterCard charge a 1percent processing fee on international transactions,
and most banks add their own fees (for up to a total of 3 percent) on top of
Visa and MasterCard's fees. The only exception to this rule seems to be
Capital One, which doesn't even pass on Visa and MasterCard's fees. I'm not sure how Discover and American Express stack up since they aren't mentioned in the report but the list of fees that credit cards charge are listed below. I'd certainly avoid taking a Wells Fargo credit card abroad with me.

Capital One: 0% transaction fee. (Capital One does not charge its own fee or pass along the 1% fee that Visa or MasterCard impose.)
Providian: 1% transaction fee
American Express: 2%
Juniper Bank: 2%
Bank of America: 3%
Chase: 3%
Citibank: 3%
HSBC: 3%
MBNA: 3%
U.S. Bancorp (U.S. Bank): 3%
Wells Fargo: 3%

The New York Times (http://travel2.nytimes.com/2006/02/19/travel/19prac.html)also had a great article on the cost of using credit and debit cards abroad. Apparently merchants can charge you extra for converting to dollars as well. They recommend using credit cards for the big purchases and using your ATM card to withdraw money for everything else.

Anyone else had experience with this or tips on how to control costs? I wonder if you could purchase a prepaid debit card abroad at the beginning of your trip, which shouldn't have additional costs associated with it. Hmmm....

PS - Sorry for the lack of formatting. Blogger is making me INSANE.

To Buy or Not to Buy?

2006-04-03T06:46:00.000-07:00

I can’t decide whether to keep renting or whether to buy my first
home or townhouse. I keep going back and forth.

Renting
I currently rent a studio for $881, which is ridiculous I know.
What’s funny is that I qualified for subsidized rent because I make
less than $45,000 a year. Otherwise I would have to pay a $1,100.
That’s insane! But I LOVE my location. I’m right downtown and can
walk to work and to the bars, which is sweet b/c we get a parking
allowance of $115. I apply that to rent. I fill up my car once or
maybe twice a month. I get cheaper insurance because I don’t drive
much. I have a state-of-the-art workout room and each piece of
cardio equipment has a flat screen TV. So I don’t have to pay for a
gym. Plus, we get a health and wellness benefit for $350 each year
so I apply that for my cell phone bill instead of gym membership. My
heating, electricity and water bill is $50 a month because I only
have to heat a 610 sq. feet apartment. And they didn’t charge me for
the first 9 months. I love my apartment building. It’s super trendy
and full of super trendy people. (Which isn’t so good with my “sheep
syndrome.”) I covet the BMWs in my parking garage. And there are a
lot of them.

Buying
I want to stay close to downtown. I want a two-bedroom place. I want
granite countertops and stainless steel appliances. I want to pay
around $200,000. These wants aren’t very compatible. The only thing
I’m firm on is that I want to be close to downtown (cab ride close).
I’m thinking of looking around February 07 because I will have two
more reviews by that time (and hopefully two more raises), which
will make it easier to qualify for a mortgage. At my projected
salary in February 07, the finance calculators are telling me that
I’ll qualify for a $125,000 mortgage but I was only planning on
putting down $50,000. I’ll probably have to my pay off my car
($6,000 by Feb. 07) and possibly my student loans ($13,000ish by Feb
07) to qualify, which I would rather not do. I’ve thought about it
and could get a one-bedroom place but they don’t appreciate as fast
and have a harder time selling. I can go without the granite
countertops and upgrade later. I’m also torn between a house and
condo. I absolutely do not want to pay HOA dues (homeowner
association) because they can rise rapidly. But a house is a lot
more work and I’d have to get someone to mow my lawn (I know from
experience that I won’t do it.)

Any advice from others who have been is the same spot?

Retiring in a Tuscan Villa

2006-04-02T12:00:00.000-07:00

Ever since reading Under the Tuscan Sun I’ve dreamed of buying my own villa in Tuscany. (I should probably visit first before I commit to living there : ) However, my wants for retirement aren’t exactly keeping up with my current financial planning. I contribute 7 percent to my 401 K (3 percent is matched at 100 percent and 2 percent is matched at 80 percent). To that end, I’ve also decided to do a Roth IRA for $4,000 for 2005 and 2006. (Thanks to Our Balance Sheet for the heads up that you could still contribute for 2005). I met with our work’s financial planner from Wachovia who does our retirement planning who told me NOT to invest with him because of the commissions that would be involved. He advised me to invest in an index-fund with Vanguard or a managed fund with another company that I’m totally forgetting. I’m really impressed with his honesty and may invest him in the future. He even told me to check out which fund I want, and he would advise me over the phone to make sure it would provide diversity to my current retirement portfolio. That is phenomenal service. I would definitely consider investing with them in the future. Now I just have to pick out a fund.

Rock Star Lifestyle on a Dime - Flights

2006-03-25T14:50:00.000-08:00

Everyone knows about the good travel Web sites such as Kayak, Priceline and Travelocity for Web fare. But what many people don't realize that what truly matters is the day you buy your flight. Wednesday is the ideal day to purchase a ticket and if that doesn't work, purchase your ticket on a Tuesday or Thursday. Why? Airlines recognize that most business trips are purchased on a Monday and most personal trips are purchased on weekends. Once you find the flight you want on Kayak or Travelocity, visit the airline directly to purchase your flight so you cut out the fees from the middleman (usually $5 a ticket). I also adore TravelZoo, which is a weekly e-newsletter that sends you the top 20 travel deals of the week. Phenomenal bargains.

Some other good tips I have heard:

If you're just looking to get away for a weekend and you are flexible on timing and where you are going, check airline's Web sites on Wednesdays for that weekend where most will have drastically reduced weekend fares available.
Take advantage of overbooking. Volunteer to give up your seat if needed when you check in. Monday morning and Friday afternoon afternoon flights have the most potential to be overbooked.
If traveling to Europe, fly into London and take a low-fare airline to your final destination. London tickets are by far the cheapest and always have the best sales.

My best deal to date? A friend found flights from Chicago to Madrid for $89 dollars on British Airways, which is where we went for spring break senior year. They accidentally left off a zero off the end : ) The best part is that they were overbooked on the way back and they put us into business class. I wouldn't hold my breath waiting for that to happen but Travelocity lets you create fare alerts in case that should happen again.

Link

Sheep Syndrome

2006-03-23T16:23:00.000-08:00

One of the biggest obstacles to controlling my spending is that I totally have sheep syndrome. I can't stand being left out. So if my friends are going to a concert that I particularly don't want to go to, I go anyway. Because I can't stand the idea of everyone having fun without me. It gets expensive. I find myself doing (mostly purchasing items) that I shouldn't because I don't want to feel like I'm the only one not doing it or not owning it. It's a little out of control because if I really want it, I buy it.

It's not something easily controlled. However, you only covet what you see and are around so I try to limit my exposure to expensive shops or magazines that will only encourage me to buy. I live in a separate city from all of former college friends, which helps a lot. I miss them tons but they are in a totally different income bracket than me -- engineering, sales, accounting, etc. So they live a different lifestyle than I can afford and the temptation would be too much for me. But visiting them can be very expensive.

Reading The Millionaire Next Door helped me a lot too. It helped me realize that a lot of people live beyond their means and that what I really might be envious of is credit card debt (when I have none). How does everyone else deal when they want things they can't afford?

Caveman Have It Better Than Me

2006-03-16T22:08:00.000-08:00

I don't spend a lot of time on my good choices, but here's one way I save money. I live like a caveman. Seriously.

I don't have...

A TV
Cable
Internet
An iPod
Digital Camera
DVD Player
VCR
Netflix

I've never had cable. Ever. I use my apartment's business center for Internet (and blogging). I listen to the radio. My friends send me their pictures. Not only do I not download iTunes, I have probably bought 5 CDs in my life. I gave up TV in May 2005. And I don't miss it. If I want to watch TV, I have to workout at the gym in my apartment. I usually drive to my sister's on Sundays to watch Grey's Anatomy. Eventually, I might breakdown and get a TV again, because it's hard to keep up with the news if you don't have one. And if I don't do that, I might buy a portable DVD player because I miss watching movies when I don't go out. I have a cell phone but not a land line.

It's not that I don't want these things, but living under your means (or trying to) is about making choices. And technology isn't high on my priority list. Call me crazy for speding $165 on highlights and a cut every two months. But I think it's absurd to spend a $100 a month (at least) on Internet and Cable. To each his (or her) own : )

Rock Star Lifestyle on a Dime - Hotels

2006-03-16T21:51:00.000-08:00

I'm a big fan of pretending to live like a celebrity (a little too much so). But I have always believed that if you pay full-price thatyou're paying too much. Growing up as a child, we traveled a lot and my Dad would find the most amazing deals. This was before the Internet,which made it even more amazing. : )

When I travel now, I always try to use Priceline for hotels. Using Priceline, can be a little haphazard for purchasing short-trip airfare since you have no control when you are leaving. It rocks for hotels though! I've gotten to stay at the Swissotel in Chicago, Hyatt Regency in Chicago and the Vail Cascade Resort all for under $90 a night. That's practically cheaper than Motel 6. Most people are too scared to not know where they are staying, but you justhave to be careful and do your research. They let you pick the stars of your hotels and let you choose the area. But make sure you really know the area first. My sister got stuck in the suburbs of Chicago because she didn't know what she was doing, and she won't try it again.

Also, MyMoneyBlog had a good post on getting a Starwoods Preferred Guest American Express Card that canhelplyou save on hotels and flights. A little fun trick is that if you useTravelocity enough, they will send you a complimentary StarwoodsPreferred Guest Loyalty Card (late check out, no lines when checking in, etc.)

Any other suggestions? I think I may do a series on these topics. I'm clueless at personal finance but excellent at finding bargains.

Slainte!

2006-03-16T21:38:00.001-08:00

Jane Dough'sposting got me excited for my favorite holiday! St. Patrick's Day! Andthe best part is my work is having a celebration (which I'm in chargeof) so Irish Coffees all around. We have half day Fridays too so thiscan mean a long day for me tomorrow. : ) I'll have to keep my drinking(and therefore spending) in check.

Dress For The Job You Want

2006-03-14T18:32:00.000-08:00

After a great job sticking to my new budget, I blew it. I totally lack self-discipline. I stopped at some outlet stores coming back from a ski town close to where I live. I left with (1) pink Ralph Lauren button down, (1) Banana Republic cream eyelet jacket and (1) Banana republic sheer button down top thingy for a total of $150. All items were very marked down and are totally work appropriate.

As I've mentioned previously, I can justify ANY purchase to myself. How did I justify this one? I REALLY need more "grown-up" clothing. I tend to push the casual envelope at my office a little too far. I don't think it's hurt my career but I do believe "Dress for the job you want, not the job you have" and "Look good, feel good." So this is a professional development expense, right?

FICO

2006-03-14T18:20:00.000-08:00

Last week, I decided to go off my saving spree and check on my FICO score. In May 2005, I had a borderline crappy FICO score (600 something?), and was considered a credit risk by my apartment company. I had to pay an extra month's rent (ouch) to get into my apartment. I did a little bit of research and found out I had an unpaid bill. In 1999, I broke my leg two weeks after my 18th birthday (otherwise it wouldn't have mattered). My mom and the insurance went back and forth for a couple of months but I thought it was taken care of in the end. Turns out some $30 bill had never been paid. I paid it immediately but it still took its effect on my FICO score. I also had a credit card bill that went unpaid past 30 days in 2001. I wish I knew how important that score was back then.

I checked back again in November and my score went up to 750. I checked again last week and I'm at 772! YES!!! Finally, my financial responsibility has something to show for itself. The cast was so old it finally went off my credit report. I want to buy a condo/house in the next year or so, which makes this score really important. I have two more years until the credit card bill falls off. Any other credit report tricks?

Borrowed Time

2006-03-07T19:56:00.000-08:00

More on spending philosophies...

Live life today and put off saving or ensure you don't have to worry about retirement? This is a great discussion traveling around the blogosphere. This again reminds me of my parent's spending philosophies.

In October 2004, my Mom passed away from cancer. She had a prolonged illness that lasted 5 years. Not once did she have to worry about about not working, paying her bills (medical or otherwise) or making sure that my sister and I would be fine. Her life long frugality paid off in the end and gave her great comfort of mind to know that she was ok financially.

During that same time period my Dad took a trip to Europe that he simply couldn't afford. He paid for it with his credit card when he should have been saving for retirement. He had been living beyond his means since the divorce 5 years before. Three months after my Mom passed away I got called at work by my sister to let me know that my Dad was in the ER for a bladder infection. I talked to him and he was fine. An hour later I call back to learn he has had a massive heart attack. He didn't make it through the night.

I'm so glad my Mom was ok financially during her illness and my Dad didn't wait until he retired to take that trip to Europe. Their decisions worked out for them in the end. In my life, I want to be able to enjoy life now but never have to worry about financial stability.

But ALWAYS at the back of my mind is the fact that we are all on borrowed time. There is no guarantee that you will wake up to enjoy tomorrow. Young and healthy? Me too. Death doesn't care. Life is like a two-lane highway and the line keeping us from death isn't as powerful as we believe it is. An SUV easily crosses over and we will fail to exist.

Morbid? Yes. But true. You don't have to blow $1,000 on dinner to get the most out of life but if you're on target financially, make sure you don't turn down experiences that you will regret later. I save for retirement so I can enjoy life later but I also grab every chance I get to enjoy it now.

Spending Philosophies

2006-03-07T19:33:00.000-08:00

MyMoneyBlog had a great post on whether to have joint or split accounts as a couple. I'm a singleton but it totally made me think of my parent's money philosophy. My parent's had a joint account but had "allowances" where they set a small (and equal) amount of money into their own bank accounts for personal spending. My Dad (big spender) and my Mom (extremely frugal) never felt like they had to justify their expenditures to each other. Plus, my Mom was a stay-at-home Mom and my Dad wanted her to feel like she had her own money that she felt comfortable using. My Dad's father made his wife ask for permission for every little expense and belittled her for her spending purchases. It's a model that I think I want to reflect in my own relationship someday.

The whole post got me thinking about my parent's spending habits. I think being at extremes made them have a really balanced life together. We had nice things, a great house and expensive vacations but Mom always bought our clothes on sale, we drove our cars for 10 years until they died and my Mom did a lot of DIY projects. Sure there were fights. "Seriously we don't have to wait until the dish towels go on sale. We can afford full-priced dish towels." That was a memorable one. When I was 18 and applying for financial aid, I was stunned to find out how much my Dad really made. My parents really made the dollar stretch and it led to a great middle class lifestyle.

When my parents got divorced, they went to their extremes. Dad bought something new every day, took me out to fancy restaurants, he kept our house, etc. Mom bought a much smaller house, we didn't even go out to Wendy's, she bought her new furniture second hand, etc. While I think it's hard for couples with different financial strategies to make things work, there is something to be said for balance. You just need to be able to compromise.

I HEART U.S. Weekly

2006-03-06T19:43:00.000-08:00

I adore celebrity gossip. Really I wish I didn't care who wore what, who hates who and who is sleeping together. But I do. A lot.

To feed my addiction, my sister got me an expensive subscription to U.S. Weekly but in reality, by the time I get my mag in the mail, I already knew all of the scoop. A frequent tip I've seen on cutting down on costs is to get rid of subscriptions. As long as you don't end up paying newsstand prices, you can probably save a lot. I have an out of control reading habit but I save on my subscription costs by ALWAYS choosing the longest line at the grocery store to catch up, going to Barnes & Noble and reading their magazines cover-to-cover (and then I leave), taking advantage of my public relations firm's massive subscription list, reading all of the free electronic media and taking my neighbor's newspapers at the end of the night (I know, I know it sounds like stealing but I only take a copy at 9 pooh and only if there are several papers left in the basket.)

In the end, I only end up having four subscriptions -- Cooking Light, Cook's Illustrated (gift), 5280 (free when I joined the Art Museum) and U.S. Weekly (gift), but if I paid for everything I read it would be like $700 a year. Just some inexpensive ways to keep up with an elaborate reading list.

5K, 24 K, 401 K

2006-03-06T19:21:00.000-08:00

Of all these K's, the only one I have a true affinity for is 24 K. Preferably in the form of white gold jewelery. : ) However, I recently had my six-month review and got a raise so I'm going to up my 401 K contribution from six percent to seven percent. It's not much much but it's a start. I'm not really going to miss that one extra percent. Plus, I LOVE the feeling of ensuring the IRS isn't getting anymore of my money than necessary. Take your grubby little hands off Uncle Sam! That's money for my second home right there, preferably somewhere in Tuscany. Ok, ok, so I'm going to need to contribute more than one percent to get a villa in Tuscany but you can dream right?

Insufficient Responsibility

2006-03-04T11:07:00.000-08:00

Last weekend, I went to this cute little mountain town about 6 hours away with two co-workers to sit in the hot springs. I was really proud of myself because we kept costs down to a minimum. We stayed at my friend's brother's house, we went to cheap restaurants, I didn't buy souvenirs, etc. We did stop at the outlets and I told myself I would buy something ONLY if it was truly a good bargain and I really needed it. I walked away with a pair of classic black Banana Republic pants for $35. Not bad.

A good start to being financially responsible, right? Not so much.

I got home and checked my mail and found an insufficient fund notice from my bank. So I check my online bank account and found FIFTEEN insufficient fund notices. For which I got charged $28 a piece. For a grand total of $420. I forgot about this huge check I wrote that got cashed while I was on vacation. I tried not to think about it but then I thought about all these Coach purses I didn't buy at the outlet and realized I could have bought TWO Coach purses for this amount. I almost died.

Deep breath...I called my bank and they agreed to take two of the charges away. I pushed for more because most of those debit charges were $6 and under and I've been a really good customer. In the end, they agreed to take away 6 of the charges. I was hoping for 8 but it's still a good deal. An important lesson I've learned is that you can always ask and the worse they can say is no. But I'm still mad at myself because I thought I was putting these stupid financial mistakes behind me. So now I'm going on a "saving spree" which is a term I learned about from Savvy Saver.

The Hairstylist, My BFF

2006-02-22T22:26:00.000-08:00

One of the most ridiculous expenses I rack up on is my haircuts. I love my hairstylist. She's like my BFF. I just got a cut, partial highlights and exebrow wax for $165. Ouch. But this is an item I refuse to cut back on.

I've been with her for 3 years. My sister's been with here for 5 years. She knows my life history. She knows my hair. I don't even have to think about what I'm going to do or what I want. I just go with her recommendation and love it. I don't buy the over-priced products but I do tip 2o percent on average. On the way to the salon, I thought that I should let this expense go. I don't think I could ever commit to Fantastic Sam's but maybe I could go to an Aveda training salon. But I can't. And after I got my haircut I really feel like I've made the right decision. A bad haircut can take years to grow out. Trust me, I know.

But if I'm going to keep going to my oh so fancy salon then I need to cut back in other areas. This is the hard part - evaluating what you want to keep, what you need to keep and what has to go.

2006-02-20T20:09:00.000-08:00

Put That On My Tab!

It's a nasty habit but when I drink, I tend to be a little too generous with my money. The more drinks I have, the more money I seem to think I have. So I tend to pick up other's drinks. Certainly I don't want to be ungenerous but this is one habit I really want to put an end to. I also want to watch how much I'm drinking and to make sure I'm paying attention to specials.

So last Saturday, my friend was throwing a party at a local establishment and I invited friends over to pre-drink. I have an over abundance of hard alcohol and figured that was a good way to start cutting down on costs. We had a couple of drinks and then headed over. It's literally the bar next door to me. (Living downtown certainly cuts down on cab costs.)

Yet at the end of the night as I went to pay my tab, I found like 4 drinks on my tab that weren't mine. Undoubtedly I had a bit too much too drink but I hadn't been drinking that much that I wouldn't have remembered taking three jaeger shots and finishing off a red bull and vodka. Plus, my friend was with me the whole time (and in a much better state than I was) and she said I never got those drinks for me or anyone else. But yet because I had been drinking, I felt uncomfortable arguing the bill (which more than doubled my tab). So what should have been a very frugal night, was more expensive than necessary.

So should I have argued the tab knowing they wouldn't have taken me seriously?

2006-02-18T14:12:00.000-08:00

Did you have something to say? Or did you just call to chat?

One thing I really want to do is examine my recurring expenses and see if I can make any additional cuts. I started with my cell phone bill, which is one expense that really irks me. I'm not a big phone person. I'm infamous in my family for once telling someone "Did you have something to say? Or did you just call to chat?" In my defense, I was 8-years-old at the time. Needless to say I don't use a lot of minutes.

I'm on Sprint's Fair-and-Flexible Plan, plus I have $5 for unlimited Sprint PCS-to-PCS calls and $6 for phone insurance. I'm on a two-year plan so I'm stuck with Sprint for awhile. I compared other plans and this one works best for me. I also decided to keep the $6 phone insurance. I'm on my third cell phone in two and a 1/2 years, so I'd rather keep that with the obnoxious price of cell phones. But I did decide to get rid of the unlimited PCS-to-PCS calling. I got it originally when my Mom and I shared a phone plan and that way all my calls to my Mom were free. Plus, every single one of my old roommates from college have Sprint. But now that I'm well within my minutes, it was time to let that one go. 12 X $5 = $60. Not a lot but I'd rather keep the money than Sprint, the Satan of cell phone carriers.

2006-02-17T15:17:00.000-08:00

I'm a procrastinator. I always have been. In high school, my dad drove me to downtown to mail my college applications at 11 p.m. so I could them postmarked by the application deadline. Despite my crappy habits, I somehow got accepted into college and made it through.

Why do today what can be done tomorrow? Late fees. And the damage to your credit report.

As I'm trying to reform my financial habits, this will likely be the best way to shave off unnecessary spending. I pay my bills today -- some overdue and some way early. And I paid $150 in late fees. Ouch. I already have recurring payments for my car and insurance. I signed up today for recurring payments on my cell phone. And I'm going to try to figure out how to do e-bill pay for my utilities. My first financial goal for 2006 is to incur no more late fees. That's just giving money away.

I Don't Balance My Check Book

2006-02-06T17:21:00.000-08:00

I don't balance my check book (I'm not even sure where it is)...I don't pay my bills on time...I'd love to post my net worth but I don't have a clue (because I don't open my mail)...I can justify any purchase, which is how my bank account empties out pretty quick. I'm kinda what you could label a financial mess. In the first Shopalcoholic book, the main character, Becky Bloomwood, throws away her bills in the hope that someone will find them and pay them for her. My financial strategy is a bit more strategic then that but not much more.

I'm starting this blog in hopes of curing some of my worse habits, to develop some financial goals and to figure out my net worth. I was inspired by some of the better financial blogs out there.