Always the Planner

Debt - Good and Bad

2012-01-27T13:52:00.000-05:00

Jeff at SustainableLifeBlog recently wrote an interesting post on how his view of debt has changed over the past two years. It got me thinking.

There seems to be two different camps of thinking when it comes to debt. There are those who hate it and want it all gone and there are those who use debt as leverage. I'm a huge believer that not all debt is bad and in fact if it is used correctly it can help us increase our wealth.

There are three types of debt that I've had and so I'll only speak to what I know: credit card, student loans and mortgage debt.

I consider credit card debt as bad debt. Not only are interest rates high on credit cards, but often credit card debt gets racked up because people are not living within their means.

I think student loan debt can go either way. Our world requires a knowledge-based workforce and you gain the credential you need for many jobs by going to college. I know I make a lot more money now than I would if I didn't have my higher degrees. However, if you are going six figures worth in debt to get a degree, you may want to step back and decide if it is really worth that much debt. While costs are rising everywhere, there are always other options. I've made all my final decisions about schools based on money and I still believe these were the right decisions. I have student debt, I'm working hard to get rid of it, but I'm thankful for what this money allowed me to accomplish.

Finally, there is mortgage debt. If leveraged the right way you gain a home and you build equity. The recent financial crash taught us we shouldn't take out the biggest mortgage we can and we shouldn't necessarily purchase the biggest house we can afford. However, if you have the money for a down payment, purchase a home that allows you to have payments that fall within your means then I think taking advantage of mortgage debt is a fantastic way to build wealth. One day that house will be paid off, and in the meantime you are building equity.

I currently have student loan and mortgage debt. I've decided that I'm sick of my student loan so I'm working hard to pay it off over the next two years. However, I'm doing the opposite with my mortgage. I'm trying to refinance to a lower payment so that the rent will cover my costs. Then once the market comes back I'll sell and hopefully make enough of a profit that the money can be used as a down payment for a house for the husband and I. In the meantime, I'm thankful that my apartment is not under water and that every month I'm building up my equity.

Debt is complicated and you have to figure out how much you are comfortable carrying.

picture by Brad_Chaffee

The First Year of Marriage

2012-01-26T09:37:00.000-05:00

I apologize for being mia this week and I hope to return to blogging very soon. In the meantime a post I wrote about the first year of marriage is up at the Adventures of Team Pancakes! Please head over and read it if you have a chance.

There is even a real picture from our wedding!

Would You Give Yourself An Allowance?

2012-01-20T13:01:00.000-05:00

I came across this article while browsing through my reader today. The author suggests that after allowing for fixed expenses you should give yourself an allowance for those items that you know you overspend on. I've never thought about giving myself an allowance.

Though looking back I did do something similar when I was studying abroad. I wanted to save my money for weekends spent traveling or hanging out in the city so I allowed myself x amount to use Monday through Friday. I also made sure I had cash so I wouldn't use my credit card. It wasn't a perfect budget, but it helped me reign in my spending so I could spend my money elsewhere.

Shopping bans and spending fasts are popular and I think are a huge help in reigning in spending. But maybe an allowance is the middle ground between spending like crazy and completely stopping. I've never been good at completely stopping anything. Hence, my spending fast fail. Instead, I am a huge believe in finding the balance in all things in life, especially in spending. Maybe an allowance is a step towards doing that?

picture by photophonic

Spending Fast Fail

2012-01-17T14:29:00.000-05:00

I'm currently on a spending fast. Basically, I've decided to not spend any money on clothes this month. Or really, anything that doesn't fall into the categories of food and personal care.

I am admitting that I have failed my spending fast. This weekend I went to use a gift card my mom gave me for Christmas and ended up spending $60 of my own money. I knew I should have waited until February to use it!

I have also spend some money on ebooks. Overall, this spending fast has not been going well. However, a few bumps in the road does not mean I should give it all up. Instead, I'm back to focusing on my spending fast for the last two weeks in January.

picture by ell brown

Friday Fun With Links

2012-01-13T09:00:00.006-05:00

The professional side of me found this advice on getting along at work a great reminder that attitude and perception really matter!

It is amazing how privileged Blue Ivy is from the very beginning. What a life she will have.

I’m all about simplifying my life, but not as good as simplifying my digital live. I agree making new girlfriends when you are older can be difficult, but worth it.

When it comes to politics this is sad, but true.

Finally, on the personal finance front we are spending more and that is a good thing. A good article on why insurance is important. Finally, I do everything this article suggests for automating my bills/savings and not-budgeting. Expect I consider it budgeting. I’m still deciding how much I have to spend and I’m still checking in to make sure I don’t over spend that amount. You can say it is not budgeting, but I don’t believe you. It is just a less strict type of budgeting.

I’m ending today’s Friday Fun With Links with a look back in MEMEoriam...

2011: In MEMEoriam - watch more funny videos

A Financial Check-Up

2012-01-12T09:00:00.006-05:00

I try to give myself a financial check-up every January. Mostly this includes checking my credit reports, looking up my credit score on credit karma, and reviewing my retirement accounts and re-balancing if necessary. This gives me a chance to make sure everything is where I think it should be, but also to review how far I've come and think about where I want to go.

Earlier this week I went to annualcreditreport.com to look up my credit report, don't be fooled by those free credit report services that actually charge you money, this website allows you to access your credit report for free once every 12 months. I was happy to see no surprises.

I also checked out my credit score and was even happier to see my transrisk score to be 780 (it is steadily increasing) and my vantage score to be 923. According to the website a vantage score is:

Your VantageScore on Credit Karma was calculated based on information in your TransUnion credit report and follows a familiar academic scale for ease of understanding: A (901-990), B (801-900), C (701-800), D (601-700), F (501-600).

So as you can imagine I am very pleased! My goal is to continue what I'm doing so that my credit score stays high. My credit report card is all A's except for a B in the amount of accounts that I have. I'm okay with that B.

Last on my list are my retirement accounts. That always takes more thought and time then just checking in on my credit report and score.

photo by aldoaldoz

2012 Travel Plans

2012-01-11T10:10:00.000-05:00

I've had two big years of travel. 2010 included three weeks in India and Sri Lanka and 2011 I spent three weeks on the west coast of the U.S. All of this traveling really makes me want to go somewhere big again this year. Traveling always makes me want to travel more!

However, financially a big trip is probably not in the cards in 2012. When the husband and I started dating we once talked about how we want to incorporate traveling into our lives. We decided that an every other year plan was a good one. Every other year we would go on a big trip, most likely abroad. The years in between we would do something local that would be less expensive. This gives us the chance to have enough money saved to enjoy our trips abroad while having the cash to pay them off.

We may have to stick to some local trips this year in order to give us time to build back up our savings. I'm already going to New Orleans for a conference and hopefully the husband will come along. He has a conference in Philadelphia as well. We also plan to go to Chicago and Toronto. If all goes well we will be able to save a ton of money so that we can do a really big trip again in 2013.

In the meantime I'll just dream about traveling to Brazil, or Cambodia, or Iceland, or Panama City, or ....

picture by Vanessa (EY)

I'm Changing the Way I Save

2012-01-10T09:00:00.060-05:00

If I believe anything about personal finance is that it is an ever-changing endeavor. I like to set things and then forget about them, but every once in a while I realize something isn't working. Since I have started my emergency fund I've had a hard time keeping the money in there. Something always comes up and I end up taking a little bit out to pay off one thing or another. The problem is that majority of reasons I'm pulling out money are not emergency related. I realized there has got to be a better way to save.

When the husband and I got married we opened a joint savings account. We both fund this every month and we have slowly seen the amount increase. In fact, this month we decided to raise the amount we each put into the savings account and decided that half of our tax return money will immediately go into this account. Even though we are diligently putting money into this account every month we haven't really decided what this money will be used for. I like to think of it as our down payment or other big life changing endeavor fund. What I do know is that it I did not want to use it as an emergency fund.

So the husband and I decided to sit down and crunch some numbers. Now that there are two of us the likelihood of both of us losing our jobs at the same time is low, especially because of the nature of my husband's job. So instead of adding up 6 months of what we need to survive if we both lost our jobs. We looked at what we would need if one of us lost our jobs, took the higher number and multiplied that number by 6. We ended up with a reasonable number that we were both confident would be enough to help us get through 6 months of unemployment that wouldn't be overwhelming to fund.

The husband had more savings put away than I did, so he was able to fund his half immediately. My savings tracker on the right shows what I have left to fund. I'm much more careful with shared money than I am with my own, so I know that after I finish funding my half it will not be touched unless there is an actual emergency. For once in my life I will have a real emergency fund!

I'm now trying to build up a slush fund of personal savings to help with overages in my budget. While most of our accounts are with ING, I decided that this slush fund should be attached to my checking account. My goal is to build it up to $1000 and then focus on either retirement or travel savings. Once I have an emergency fund completely set up the saving possibilities are endless!

I know, only a complete personal finance geek would get excited about savings. I'm happy to call myself one!

photo by 401K

The Laziness Has Ended

2012-01-09T15:59:00.002-05:00

I can admit it. I got lazy towards the end of 2011. It was as if all the drive and all the motivation I used to get through my M.P.A. while working full-time completely drained me. I thought that my 3-weeks traveling would revive me, as traveling normally does. Instead I came back lazier. I went from a highly productive person to someone who had a hard time getting off the couch. While I've always been someone who could sit and watch 6 hours of a movie marathon or a great TV show every once in a while, this was different. I had no motivation to run and I got discouraged just from searching for jobs (not even applying). Needless to say, it was bad.

I do have another theory why the end of 2011 was full of selfish laziness. 2010 was an amazing year for me. I loved my job, I was doing well in school, I got to travel to India and Sri Lanka with some amazing friends and I got married. That is pretty hard to beat. While 2011 also had its high points - I finished my M.P.A., I went on a three week honeymoon, and I celebrated my one year anniversary. I also became bored at my job, and the raise and more responsibility that I hoped for never materialized. As I began my job search, I was discouraged to see how few jobs there were out there. Life was not where I expected it to be.

I am determined that 2012 will not be like the end of 2011. Already the husband and I have started be more proactive (over something too personal to mention just yet), and we are enjoying the city more on the weekends. While I haven't applied for any jobs yet this year, I have been searching for possibilities and reminding myself that this job search may take a while, but will be worth it.

I am determined that this will be a year of being proactive and determined. I'm going to work hard at getting what I want and be open to new things and experiences.

That is my pledge to myself in 2012

picture by pixajen

Friday Fun With Links

2012-01-06T09:00:00.024-05:00

Every new year should begin with a laugh. Check out these 9 brave predictions. And come on, how could you not laugh when you see this.

No matter what you say, we can all use some simplifying in our life. Here are 5 simple ways to get that started.

How fun would this mug be! I wonder if it changes while you are washing it as well?

With the start of 2012 many personal finance bloggers are putting together their goals. I love how Stacking Pennies also includes her travel goals. I may have to steal this idea. Speaking of traveling, my husband and I really want a world map that we can use to track our traveling. After seeing this, I may just make one.

Since I overspent on clothes and shoes in 2011, I enjoyed reading this post on some new year's clothes resolutions.

This crock post bolognese sauce looks delicious. I'm trying to cook more in the new year, so I may have to try and make this.

As always, I have to end with some cuteness.

12 Challenges in 2012

2012-01-04T14:59:00.001-05:00

I don't normally make new years resolutions. I tend to forget about them throughout the year anyway, so it seems silly to waste my time coming up with them. I always make a few simple goals for the year, but I don't consider them the same as resolutions.

Instead I've decided to make 4 challenges for 2012. I wanted to have 12 for 2012, but I couldn't think of 12 challenges that I could actually accomplish.

Run 500 miles in 2012. A good friend of mine has agreed to do this with me! We live in two different states, but we will be tracking our progress on a shared google document.
Run in 6 road races. This averages out to one every two months.
Read 25 books in 2012. Now that I have a kindle I am already reading more than I used too, so this should be an easy one!
Complete 3 knitting projects. I enjoy knitting, but lately I have been completely lazy. I would like to complete three projects and practice enough to improve my knitting skills.

I will be creating a page called 2012 Challenges to track my progress. Let me know if you want to participate in one of the challenges with me!

photo by Charlie P Barker

Ways to Spend Less on Clothes

2012-01-03T11:22:00.000-05:00

I've been trying to figure out ways to spend less on clothes and shoes in 2012. The spending fast this month should help, but there are still 11 months left. I would try a no clothes or shoes for an extended period, but for me that is unrealistic. I don't believe in completely denying myself. Instead, I like to focus on balance and making sure I spend the most on my priorities.

Here are some things I'm going to do to make sure I spent less on clothes and shoes:

Only shop sales. I'm pretty good at this already, but it doesn't hurt to remind myself. I also need to shop sales for think like running sneakers, which I do pay full price for.
Keep a list. I've started a wish list in google docs. If I want something I'm going to put it on my wish list and wait a week. If I still want it then I'll start looking for good deals. That way I'm thinking before buying.
Use the how much will I use it test. If the item is something I'll use all the time, then it is worth spending more money on. However, if I'll only use it once or twice, then it better be extremely cheap or it is not worth the price.

Are there any tricks you use that you can recommend?

picture by chachlate

2012 Goals

2012-01-02T09:00:00.059-05:00

I've decided to keep things simple in 2012. One to three goals per category. I've also decided to have three categories. Financial will include my lofty goals and my steady goals. I'll also have categories for my professional and personal goals.

Lofty Financial Goals:

Pay down my student loan to $5,000. In order to do this I'm going to have to put any extra money I have towards my student loan. I'm so sick of having to pay off my this loan. The only solution it to pay it off quicker.

Add $3,000 to my emergency fund. DH and I sat down and really looked at how much we would need to survive if one of us were to lose our job. We came up with a number and opened a joint savings account to act as our true emergency fund. DH was able to fund his half completely, however I have $3,000 to add to fund my share. My goal is to have this done by January 1, 2013.

I'll track these goals on my sidebar.

Bring down my spending on clothes and shoes to below 8% of my total spending in 2012. In 2011 I spent 13% of my non-fixed budget, higher than any other category, on clothes and shoes. This is unacceptable and something I should easily be able to cut back on.

Steady Financial Goals:

Pay 17% of my income towards my 403b. If possible, increase this number, but at the very least say steady at 17%.

Pay my mortgage and maintenance every month on time.

Professional Goal:

Secure a more challenging and better paying job. It became clear in 2011 that there are no opportunities for growth at my current company. With the current economy, there is also very small pay increases. Therefore, my only option is to find a more challenging position that will pay more. In this economy I don't imagine this will be easy, but I will continue to search and apply for positions until something comes through.

Personal Goals:

Spend more quality time with my amazing husband. Just because he is my husband and I love to spend time with him!

Run on a regular basis. Get back into running, something I love to do, and keep it up on a regular basis.

Start and continue to practice yoga. I love yoga, but out of laziness I haven't gotten back into practicing it. I find it balances my running and overall balances out my life.

I have a feeling that 2012 is going to be a very good year.

picture by spike55151

2011 Goals - How I did

2012-01-01T09:00:00.022-05:00

I set the following goals for 2011:

Financial

Focus on funding my joint savings account with my husband.
Pay down my student loan to $9,999.
Continue to pay 17% of my salary into my 403b.
Continue to may my mortgage every month.

Professional

More responsibility/more money

Personal

Enjoyment
Running/Health

Financially I've done really well. My student loan sits at $9,894, my husband and I funded our joint account every month, and I easily funded my 403b and paid my mortgage.

Professionally, I was not as successful. While I did get a small increase, it wasn't as much as I hoped or asked for. I'm continuing to job search and hopefully something will come through in 2012.

Personally, I do feel as if I have enjoyed living in NYC more than I was when I was in school part-time. However, my running has not yet gotten as regular as I would like it too be. DH and I ran in the new year by running in the central park midnight run. A positive way to bring in the new year and it will hopefully start a period of working out and getting back in shape for both DH and I.

Overall, it was a toss up. While I'm excited that I met my financial goals, I know I have to keep working on my professional and personal goals. Over the years I have learned that it is best to keep my financial goals simple. Too many and I fail at all of them. With one or two things to focus on I make real progress throughout the year.

What works for you?

picture by Brintam

Happy New Years!

2012-01-01T00:01:00.000-05:00

Happy New Years! Wishing you an amazing 2012!

picture by lonnypaul

Year In Review

2011-12-31T15:01:00.000-05:00

As 2011 draws to an end I like to take a moment to reflect on my financials. Here are a couple of percentages:

The numbers below do not include regular and retirement savings.

I spent 24% of my income on rent and 23% on my mortgage. The next largest category is 14% on the maintenance costs of my studio. After that I spent no more than 3% in any category.

If I take out what I spent on mortgage, rent, maintenance, student loans and utilities the numbers break down as follows.

13% on clothes/shoes
12% on gifts
10% on groceries
9% on travel
8% on computers/electronics (bought a new computer this year).
Every other category was below 5%.

I like to end the year by spending the most of my non-fixed expenses in the categories that are most important to me. This year I did not. While I love clothes and shoes they are not one of my priorities and I am astonished that I spent more on them then on gifts, food and travel. Taking the time to look back makes me even more determined to go on a spending fast in January and to think differently about my goals for 2012.

picture by jollyUK

Merry Christmas!

2011-12-25T09:00:00.006-05:00

Merry Christmas and Happy Holidays to all my readers!

photo by andrew d miller

Friday Fun With Links

2011-12-23T09:00:00.021-05:00

A huge congratulations to J. Money and I Pick Up Pennies. They both have a bun in the oven, well Mrs. J. Money does. Also a big congrats to Krystal who is moving to Germany! A new adventure begins.

This just may be the worst ad I've ever seen. But this is really really awesome street art.

A great video, which makes a really good case for taxing millionaires.

Am I the only one who thinks these look delicious! I may have to try to make these myself.

I'd like to end this Friday Fun with Links session with some cuteness. Okay and some more cuteness. How can you look at these pictures and not smile!

5 Steps To ...

2011-12-21T09:00:00.019-05:00

I don't often write posts that lay out five to ten steps. I know they are super popular in the personal finance world, but I have a hard time putting them together. I often think there are more than x number of steps and different ways to reach goals.

Rather than steps, I think there are things you can do and you can do them in any order. Still, I always read the step posts, even if I don't always agree with them.

As I continue to work on my What I Wish I Learned in College About Personal Finance Series there is a good chance I'm going to end up writing some of those articles. Maybe rather than steps I'll just list tasks. Or, my steps will all come with a disclaimer that it is how I would do things, which may not be the way you decide to do things.

picture by Chris_J

A January Spending Fast

2011-12-20T09:00:00.030-05:00

I have decided to go on a spending fast with a good friend of mine in the month of January.

During this fast I won't spend any money on lunches out, alcohol, tea, clothes, make-up, gifts and on my nails. I've been spending a lot of money on clothes lately, so I'm hoping that will save me a lot of money in January.

What is still on the table for me (but not my friend) are breakfast and dinners out. I rarely buy breakfast and when I do it tends to be only on the weekends and only a $5 bacon, egg and cheese from my favorite bagel shop. Since I don't spent a lot of money in this category, I decided not to deny myself these little splurges. I also decided to keep spending money on eating dinner out. Adding that to my fast would also mean getting my husband on board. I also don't want to end up in a situation where he buys all our dinners out because I'm this fast. Definitely not cool. And let's be real, there is no way I can go a month without getting pizza for dinner.

The only thing I need to do to prepare for the fast is to purchase some bronzer. I asked for some for Christmas, so I'll wait until then, but if I don't get it then I'll be making that purchase before January 1st!

This friend I'm doing this fast with is the person who turned me on to personal finance. Though we no longer live in the same city, we do chat on im almost every day so I know we will support each other. After the gluttonous that is December, I'm looking forward to this fast.

picture by Brian G. Wilson

What Is Important To You?

2011-12-19T08:00:00.009-05:00

What I Wish I Learned in College About Personal Finance Series

When I first started learning about personal finance I read a ton of blogs, Suze Orman books, and simply digested as much information as I could. I tried out a lot of different budgeting techniques, but failed to reign in my spending. That was, until I realized that what matters in personal finance is figuring out what is important to you.

I began my journey while in graduate school. My priorities were simple then. Basically, I wanted to spend as little as possible, while saving as much as possible. So budgeting was easy. I just had a certain amount of money that I had to stay under each month, but how I spent my money within that amount did not matter. The majority of my money went to food and the occasional movie. When I think back to that time I’m amazed on how I lived on so little!

Now my priorities are completely different. I have a student loan I want to pay off, an emergency fund I’m trying to build back up, saving for a down payment, and of course retirement savings. After I figure out how to prioritize my aforementioned goals, then I have to decide how to spend what is left over. After rent and bills, I spent my money on items that are important to me. Some months that may be buying yoga class card or signing up for some road races. Other months it may be spent on dinners out with friends. Knowing how I plan to spend my money, keeps me from buying that cute shirt I love, but that I don’t really need.

I love to spend my money on travel, but if you prefer to spend your money on shoes that is none of my business. Personal finance and budgeting all comes down to what is important to you. So one of the first steps is financial freedom to figure that out.

photo by konstig

Facebook

2011-12-17T09:00:00.006-05:00

I've finally created a Facebook page for my blog. For those of you would are on facebook and enjoy my blog I would love if you could "like" it.

If you like my facebook page you can enter to win my eternal gratitude. Okay, not true. You will definitely receive my eternal gratitude. If you are not a facebook fan you can always follow me on twitter.

Sorry I don't have some fun prize that you can win, but I figured a little self marketing couldn't hurt. Right?

Have a fantastic weekend!

photo by _Max-B

Friday Fun With Links

2011-12-16T09:00:00.000-05:00

I came across some fun and interesting blog posts and items this week and I decided to share them.

At only $20 I was seriously tempted into buying this Charlie Brown Christmas Tree. Maybe it will go on sale after Christmas! I wish I was creative enough to come up with this idea. Even though I'm trying to sell them, I still have more than enough books. Combine these with this recipe for gingerbread cookies I was really put into the holiday spirit this week.

Hello Giggles had a post on Tips for the Chronically Cold Girl. I am so that person and I often get hot water at work to warm my hands and wait for it to cool before I drink it. Oh and I wouldn't survive without hand warmers. They also listed pet peeves on TV shows. I completely agree with every point.

On the personal finance note I loved Debt Ninja's post on 15 year versus 30 year mortgages. Another great example on why personal finance is personal. Oh and I'm also a fan on the 30 year mortgage, especially if that money you save each month is going towards retirement. I love FB's post on investing in your appearance. This is not an excuse to spend a lot of money, but looking neat and put together can go a long way.

An op-ed in the New York Times points out the disconnect between knowledge and policy in education. Paul Krugman writes about how we are in a depression and explains what is happening in Europe. The Economist has a really interesting chart on vacation days by countries. Not surprisingly, the U.S. does not do well.

I love the tv show Big Bang and this made me laugh out loud.

I really want to go to each one of these places. I have been to Multnomah Falls in Oregon!

Finally, this sums up how I feel almost every day, just change school to work and add blog.

Accomplishing More

2011-12-15T10:22:00.000-05:00

I read an interesting article this morning about how to accomplish more by doing less. In summary, the article notes that working straight through lunch with no breaks actually reduces the amount of work you can get done. Instead if you work in 90 minute intervals, with 10-15 minute breaks, you actually recharge your brain and can focus better, making less mistakes.

It is interesting. At work I can find myself working straight through the day with only a few small breaks to read some blogs or check up on today's news. However, when I used to be in school I would work exactly how the article says you should. I would wake up on a Saturday morning, work on something for an hour to two hours, take a short break, and then continue that cycle until I was done.

It will be interesting to test this out and see if I do really become more productive. My favorite line of the article is:

Create a workplace that truly values a balanced relationship between intense work and real renewal, and you'll not only get greater productivity from employees, but also higher engagement and job satisfaction.

Life is always better when there is balance, so it makes sense to create that balance within work and not just between work and life.

picture by mpujals

The Happiest Time of Year

2011-12-14T09:00:00.018-05:00

I love this time of year. There are the holidays, a week off work, and the time to check up on my finances and think about goals for the next year.

Just like the beginning of every month feels like a new chance to spend wisely and save money, a new year feels like the perfect time to create strong and doable goals. I've been thinking a lot about goals for 2012, though I haven't come to any decisions. Do I want to continue to focus on paying down my loan? Or should DH and I focus on building up our joint savings account? Should I increase my retirement funds? And or course, I have to build back up my emergency fund. The hardest part is making the decisions. If only I had enough money to do everything at the same time!

I like to keep my goals simple and limited. After years of writing this blog I've found that the more complicated or more goals that I have the more likely I will stop focusing on them.

Decisions...decisions...

photo by Kelsie Blake