Adjusting budget categories September 30, 2008

If you read any personal finance blogs at all, you know that one of the most important things that you should do to get control over your money is to create a budget. I’ve tried to do this, and one of my favorite things to do is to project out how my budget might look in the future. I’ve currently got a spreadsheet that tracks my money into 2013. I know that anything that far in the future is pretty theoretical, but it gives me a bit of motivation to see that if I work hard, and am diligent about things, that I can get to the end of this.

That being said, I’ve just done a pretty serious re-write of the projections. I was finding myself in a place where I frequently had much more to pay than I was anticipating, and I wasn’t sure why.

Let me explain – previously, I had allocated myself $100 every pay period to take as cash, to deal with things like paying for gas, paying for parking every morning at the Train Station, and paying for other miscellaneous things that came up. I quickly found, though, that it was nearly impossible to change my habit of paying for gas on a credit card, and that I was having to forego taking my $100 in spending money, and instead applying it to the card I use for daily expenses – which just perpetuated the cycle of having spent too much money on the card.

So, I re-evaluated. I dropped my free cash amount down to $20 a pay period, and came up with a more accurate number for the essentials that get charged to my Citi UPromise card every month. They are:

• CVS copay – $15
• Gym Membership – $15
• Netflix – $14.69
• Cell phone – $60
• Cable/Internet – $70
• Gas (2 tanks a month) – $80
• Train Parking – $70

For a total of $324.69. So I’ve now budgeted $325 a month for this, and adjusted my payment outlooks to reflect this. I do imagine there will be some wiggle room in here – Cable/Internet might be a bit less than this, but I haven’t gotten an official, one month bill with no adjustments yet. I’m also considering cancelling Netflix. I’ve already downgraded my cell phone significantly, which seems to be working out.

Its much better to just be honest with myself and realize my own habits and impulses, and plan for them, rather than pretending I will be able to make myself behave in a way that I won’t.

Employment Woes September 29, 2008

I’ve got sort of a strange situation going on right now with my job.

I’ve been working at the same company for just about 3 years ago. When I was hired, I was initially hired as a part time, 25-30 hour person, paid hourly. I was doing grad school full time back then, and intended that to be my focus. Unfortunately, my focus quickly shifted to the job, and about 7 months in, there were a bunch of shakeups that left me temporarily covering what had previously been 2 other, full time jobs, as well as my own position. I was soon working 40+ hours a week, as well as full time grad school. Shortly thereafter, my boss offered me an offical full time position, which I accepted. The company also hired a few more people, and my initial role was expanded.

I began year 2 as a full time employee. I took a few more classes towards my Masters degree, but after a particularly disasterous semester, ended up temporarily stopping my progress. I enjoyed my job, but found it a little monotonous at times. As year 2 came to a close, I unexpectedly found myself in the position of having a job that I liked, at a company that I loved, and having a job offer from another company that was both different and exciting. I weighed my options carefully, and decided to take the new job. I went into my then-boss, and told him that I was leaving, and he asked me what they could do to make me stay. I told him that I wasn’t really interested in continuing on in the same position I had been doing for the last 2 years, and that I would like to learn a different area of our business. And that I was offered significantly more money, and that they would need to meet that.

Within 2 days, I had my offer for about 15K more than I was making in the current job, and the chance to learn a new position. I turned down the new company, and chose to stay.

Its now a year later, and strangely enough, I find myself back in the place I was a year ago, only now, I am sharing the position with a co-worker. The promotion position was great, and I was and am still really interested in learning more about that, but the current business needs don’t allow for there to be multiple people doing that job. I’ve found myself doing projects related to my former position, and working on committes for the new CEO. I write a lot of reports. I create a lot of spreadsheets.

I’m intensely nervous that, in 6 months or so, when my main project wraps up, they won’t have any more for me to do in the new job area, still, and they won’t have a continued need for 2 people in the old job. I know I need to finish my MS, but I also realize that I don’t really want to do what I was going to school for – though I am interested in being at the periphery of the field, which is where I am right now. I’m really kind of at a loss, though, in thinking about where the next year of my life will take me professionally. I’m not loving the idea that my fate isn’t in my own hands.

Parents and Money September 26, 2008

The last few months have seen a lot of changes for my family. A few months ago, I was living with my grandmother and my sister was living on the other side of town with my parents. Now, I’ve moved 2 towns over, and my sister has moved to the big city. Its the first time in a long time that my parents have no children living in their house, and no expectation that one is coming back soon, and I think adjusting to it has been a little difficult for them.

I haven’t lived with my parents since 2002, but its been a pretty solid tradition since then that I would come over on Thursday nights, my Mom would make me dinner, and we would watch TV. Its always been Survivor at 8pm, and then whatever we are currently into that is on at 9pm – right now, its Grey’s Anatomy. Usually a good night, and a good chance to bond and catch up.

I went over last night for the first time in a few months, and it just really struck me that my parents are getting older. They are both 57, and in pretty decent health, but they just seem so tired. They own a business that, for a lot of reasons beyond their control, has been dying a slow and painful death for the past few years, and I know the stresses of that weigh pretty heavily on them.

However, despite their issues, and despite conversations about how my father hasn’t cashed a paycheck in 7 weeks, and the gas bill is $1000 higher than it was last month, my mother still operates from a place of generosity. I brought her some apples that we had picked last weekend, and she wanted to pay me for them. I had bought them concert tickets that they didn’t end up being able to use, and she wanted to pay me for them. It just frustrates me, because while I appreciate her generosity, I want her to know that I have my own life and finances under control, and that I can afford to treat them a little bit, sometimes. It feels like an important transition, from young adult who mooches to young adult who can afford to absorb her own costs.

Grrr, Comcast September 24, 2008

I knew I wasn’t looking forward to dealing with Comcast for cable and internet access, but unfortunately, in my area there really aren’t any other options. When I signed up for the account, they were running a special of $66 a month for Digital Cable and High Speed Internet, so I signed up and waited for the installer to arrive.

The first thing that went wrong was the time – I called up and had to change my appointment. I was give a choice of 11-2 or 2-5 on the given day I had selected. I chose 11-2. Then, I had to change a detail on the account. In doing so, I apparently invalidated the appointment, and when the Customer Service rep went to rebook it, I could now only have 2-5. Not a big deal, really – This was the 2nd day we were actually in the new place, and I had already planned to take the day off for furniture delivery. I waited – and waited and waited. Around 4:50pm, a rep from Comcast called up to ask how my appointment had gone, and was a little shocked when I mentioned that the tech still hadn’t shown up. The rep told me that he would be there shortly, and at around 530pm, the tech did finally show up.

The install went fine – except for the fact that they didn’t have the straight digital cable box that I requested, and instead only had digital cable boxes with the Comcast DVR built in. The tech informed me that we would be recieving the DVR service free for 6 months, and that we could feel free to turn in the box after that. This might have been attractive to me, except for the fact that I already have, and love, TiVo, with 3 years of pre-paid service attached to it.

We contemplated putting the Tivo on the spare TV, and putting it in the bedroom, and using the Comcast DVR on the main TV, but a few days of playing with the Comcast DVR revealed how vastly inferior to real TiVo it is – its slow, and choppy, and infinitely frustrating for anyone who is used to the real thing. As soon as we had a free weekend, we unplugged the Comcast DVR and took it to the office to trade it in for a regular digital cable box.

When I logged into Comcast this morning to check the status of the bill, I happened to look at the itemized new charges from the exchange of boxes, and noticed that they charged me a $1.99 for “change of service”. Seriously??? Not only did they inconvenience me by not bringing me the correct piece of equipment that I ordered the first time around, causing me to have to inconvenience myself and return it, they then have the nerve to CHARGE me for cancelling a service I never ordered in the first place?? As soon as I get the paper bill, they will be getting a call, and they will most definitely be removing that charge.

Its things like this that just annoy the hell out of me.

Decluttering my life September 23, 2008

It was exactly 3 weeks ago yesterday that BF and I moved into our new place, and we are finally, finally, just starting to have everything organized and in place. A mini-emergency with his oil pan during a routine oil change on Saturday left his car out of commission until mid-day yesterday, so we both took the opportunity to take a day off, re-group and get some things done. We hung the DVD racks we had purchased on Sunday, and put up the little shelf in the kitchen that I wanted for my cookbooks, and now, I really feel like things are coming along nicely.

One thing that I had been sort of dreading was dealing with all of my cosmetics. And, I’m not just talking about actual makeup – this includes bath products, soaps, lotions, hair products, etc. etc. During the unpacking process, I put pretty much everything that I came across into a few big plastic bins, which had been sitting in the middle of our bedroom floor ever since. This weekend, though, I dumped them all out and began the big sort.

I knew I had a “product problem” – but I had no idea it was as bad as it really was! I ended up sorting everything, junking anything that looked old or nasty, or that I knew I would never use, and putting the rest of it away. I found that I had at least 6 new, unopened toothbrushes, a few extra tubes of toothpaste, probably 5 different sets of shampoo and conditioner, over 30 different lotions, including at least 5 different lotions specifically designed for feet, numerous bottles of body spray and perfume, and probably 25 different hair products – everything from pomade and hairspray to heat protecting sprays and curl inducing gels. I’ll have to take a picture of it all tonight, because its pretty frightening.

I also have a surprisingly large number of things in sample size – all of which i put into a container and stored in a closet. I also pre-packed my favorite makeup bag with all the things I could possibly need for a trip out of town – smaller versions of shampoo and conditior, contacts case and lense solution, deoderant, body spray, lotion, shower gel – its all there, I just would need to throw in a hairbrush and my day to day makeup, and go.

I’ve actually been doing this for a while, but the sorting and organizing really emphasised it for me – I do not need to buy any more of these sorts of products for a very, very long time. The only thing that I can possibly think of that I will run out of and need to replenish is my daily facial moisturizer – but then I realized that just because I prefer to use Clinique, it doesn’t mean that I should replace it every time it goes empty. When I use up the other things, it will be a reward to myself to buy the brand I prefer.

Goals September 19, 2008

One thing that I’ve come to realize in the last few months is that I am more than a little overwhelemed by my financial situation, and the number of moving parts. I keep constantly reevaluating what I am doing, what I should be doing, what the best way to get this all paid off really is. I’ve decided that I need to stop looking at the big, overall debt picture for a little bit, and try and focus on one thing at a time.

So, what are my overall, high level goals?

1. Pay off all Credit Card Debt
2. Pay off all School Loan Debt
3. Save money for the future/a house – $25,000

Pay off all Credit Card Debt

This is certainly the most concrete of my goals. I just finished paying off my J. Crew card, and am now, finally, store-card free. This leaves me with an interesting dilema – do I attack the smallest debt first, or the one with the worst interest rate? I’ve decided to do sort of a combination of both. My Goals are as follows:

1. Pay off Chase Card – $1238.10 @ 29.99%
2. Pay off Target – apprx $500 @ 18.99%
3. Pay off Bank of America – $1953.56 @ 29.99%
4. Pay off Capital One – $3449.88 @3.99%
5. Pay off American Express – $7033.87 @11.99%
6. Pay off Citi – $15208 @16.99%
7. Pay off USBank – $21698.08 half at 0%, half at 10.99

I am hoping that once I have a few of these taken care of, without having created more debt to replace them, that I will get some offers for cards with 0% rates, and I can start the money movement game again, to save myself some interest. I keep trying to find the “quick fix”, the easy solution that will get me out of debt – and it just isn’t there. I need to be patient, and vigilant, and realize that it took me a long time to accumulate all this debt, and its going to take me a long time to pay it all off. I’m currently projecting that the USBank debt will be cleared sometime in the middle of 2012.

Pay off all School Loan Debt

I have 2 main sources of student loan debt – somewhere around $65,000 worth of federal loans, consolidated at 6.99%, and approximately $25,000 worth of private education loans, currently unconsolidated and at variable interest rates ranging from 7 – 11%. I can take 60 months of voluntary forebearance on the federal loans, and 24 months on the private loans. I put the federal loans into forebearance for a year last month, and my plan is to keep them there until 2012. I plan not to put the private loans into forebearance, and am currently paying around $176 a month for them. My plan is that after my credit card debt is retired, I attack the private loans, and have them paid off within less than a year – so, early in 2013. I also have one smaller federal loan that somehow didn’t make it into the consolidation. This loan is only at 5% interest, and its only for a few thousand dollars. I am currently paying $40/month towards this loan, which auto deducts out of my checking account every month. By the time I start attacking the private loans, I should have that smaller loan almost paid off anyway – if not, I will throw the extra money at it first, just to simplify my life a little bit.

Save $25,000

This is where things get…tricky. BF and I have had a lot of conversations about our relationship, and the future, and what our plans are. Right now, I would expect that he will propose sometime in the next year. Give us a year to plan the wedding, and that puts it sometime in the (hopefully) fall of 2010. We’ve just gone through watching his parents struggle to pay for his sister’s wedding, and we both agree that that isn’t something we would want to burden either sets of parents with. We are hoping that both sides will contribute some monetary amount towards the festivities, and that we will pay for the majority of it ourselves. We are also in total agreement that this doesn’t need to be the blow-out of the century, and that smaller is better. We desperately want to be able to afford a house sometime in the next 2-3 years.

I get paid twice a month, on the 15th and the 30th. I currently have an auto-deduct of $10/pay period from my checking to my ING savings. I’ve also anticipated what a very minimal raise (3% a year) for the next few years will get me, and rather than adding that new income into my budget, have allocated it all to go straight to savings. Now, clearly, this isn’t going to get me $25,000 in the next 3 years, but it is a sizeable start. I’ve also made up my mind that I must get a part-time job, and that if I sock away $125 extra a week, I will be able to meet this goal. Its hard to know if that is the right thing to do – to save money when you are in debt. I’ve got to assume, though, that a couple with a significant downpayment, plus $10,000 in debt, is a more attractive loan candidate than a debt-free one with no money saved.

So, my goals here are:

1. Get a part-time job
2. Save $125 a week extra in my ING savings
3. Have $25,000 in my wedding/house fund by 12/31/2011

Writing all this out is a bit scary, to say the least. But, at least I know where I stand, and what my plans for the future are. I have to escape this omnipresent feeling that the future is coming, and realize that the future is here, now – and I can do something about it!

How to manage household spending when you are cohabitating September 18, 2008

One of the biggest challenges that BF and I have faced with our new living situation is how to effectively manage household spending. We both make roughly the same amount of money (he now makes a bit more than I do, which is definitely a good thing!) and have pretty much agreed to split the expenses down the middle. But, at the same time, we don’t want to be constantly nagging each other to pay small amounts back.

I hit on a plan a few weeks ago that seems to have been working so far. We were already using a shared google document to track things that we individually had, and that we thought we needed to buy, for the new place. So, once we moved in, I just started a new spreadsheet document tracking all of our expenditures – things like the grocery store, Home Depot, party supplies, etc. Whenever one of us buys something that is for general consumption, and not for individual use, we list it on the spreadsheet. This also includes the Comcast bill, which I am paying for, and the Electric bill, which he is paying for. The spreadsheet keeps a running tally, and lets us know who “owes” each other what. The idea is, if I have currently spent more money than he has, then he buys groceries the next few times. And vice versa. I think its a pretty good solution for us – we aren’t ready to start combining and sharing our money, but we both realize that this is more than a roomates-type situation. Tracking it this way helps me to feel like I’m not being taken advantage of – its my personality to give more than my share, and its BF’s personality to be a little on the stingy side.

The House we almost Rented September 17, 2008

BF and I didn’t end up taking the place we looked at back in June – the price was pretty decent, but it wasn’t blow-us-away perfect, and the landlord wanted a move-in date of July 1st – we just weren’t ready for that. So, we kept looking.

In mid-July, right before BF started his new job, we took a long weekend to look at houses, condos and apartments. We looked at about 8 places in total. Some were great, others decidely less so. In particular, the “townhouse” that was essentially the bottom half of a raised ranch, complete with 3 dogs, broken car parts on the lawn, and really, really sketchy people, for $1200 a month, was a dissapointment, and an eye-opener. We did see a few places that we liked, and one – a small house in a nice town on a lake – instantly became the front runner.

The house was small – somewhere around 650 square feet. But it was a house, and it was on a lake, which was increadibly attractive to us. It had a large kitchen with fairly new, all-black appliances, cathederal ceilings in the kitchen and living room, a decent sized deck on the back and beautiful picture windows in the master bedroom. It also had fleas, millions of holes in the walls from a hang-enthusiastic former tenant, only 1 tiny closet in the bedroom and a really slap-dash paint job that left the walls multi-colored in places. It was also increadibly dirty – it seemed that the last tenants left in sort of a hurry, and never did any sort of rudimentary cleaning while they did live there. The rent was listed as $1325 a month, no utilities included, but we talked them down to $1275, which was still at the high end of what we had wanted to pay.

We submitted the application at the end of July, and shortly thereafter were approved, and signed a lease with a September 1st move-in date. September 1st was a Monday, and we asked if it would be possible to move in a few days before that, seeing as the place was empty, and the landlord agreed. We also submitted $1000 as a security deposit. Before signing the lease, we asked if they planned to patch and repaint the walls, and they indicated that they were not planning to do so, but that if we would like to, they would reimburse us for all supplies used. They also let us know that there was a spare key on the back porch, and that we could feel free to use it to get in and measure and – I thought – clean and paint, before the big move.

One weekend in mid-August, we had a free weekend, so we decided to go over and make use of the key. This was when we discoverd the fleas, and really took a hard look at the walls and the rest of the house. We ended up with a whole list of things that needed to be repaired or replaced, including a window, multiple screens, cracked light fixtures, etc. We had the time, so we measured and started cleaning – washed the walls, cleaned all the windows, and the filthy window sills and screens, cleaned out the cabinets. BF is a bit of a perfectionist, and his father is a contractor, so he was adamant that, if we were going to paint, we were going to do it the right way, so we unscrewed all the faceplates, and took down curtain rods and such. We left on Sunday, after having put in a good 12-14 hours of work on the place over the weekend, with it in paint- ready condition. Thats when the trouble started.

The landlord apparently stopped by, and saw all the prep work we had done, and all of the cleaning supplies strewn about the counters, and freaked out. Called up BF and screamed at him that we “trashed” his house, and that he didn’t want to rent to us anymore. That we didn’t have permission at all to be in there, and that what we had done was completly unacceptable. We felt terrible – we honestly didn’t think we had done anything bad to the place, and we knew our intentions were just to make it clean and newly painted – but we emailed and apologized. The next day, the landlord responded that they were still willing to rent it to us, but that they were uncomfortable with the 1 year lease, and would like to change it to a 6-month lease, with the option to renew it at the end of 6 months, provided everything went well. We agreed, and they said they would send the new lease off to us.

A week later we got the new lease. Whereas the first lease had been 2 pages, the new lease was 13 pages. It laid out, in extreme detail, all the things we were not to do, and basically gave the landlords the right to evict us for very, very minor infractions. It also stated that after the 6-months was up, there would be no renewal of a lease, it would be month-to-month, and we would be obligated to pay $1350 a month for that privilege. And, they would let us in a week early to paint, but they wanted to charge us a 1-month prorated rent for that, of $325.It included lovely clauses such as, 3 days late on the rent would cost us an extra $500, and any damage to the tigerlilys in the front yard would be grounds for eviction.

BF and I were livid – this new lease was an insult, and seemed like a blatant attempt to get us to pay way more than the place was worth. We decided that we would not sign the new lease, and we informed the landlord of this, and requested our security deposit back, as well as the ability to retrieve the $100 worth of cleaning supplies we had left in the house. We also offered to un-do all the prep work we had done. They didn’t take us up on that last offer, but did send us back our $1000, and emailed us at 4pm on a Monday to let us know that we had until 730pm that night to retrieve our stuff, which was outside the house.

In the end, we feel like we dodged a bullet. The house was really really cute, but it had a lot of issues, and was definitely going to require us to put a lot of sweat equity into it to make it liveable. The landlord, who seemed nice at first, definitely had a bit of an anger problem, and flat out stated to us that the last tenants never called him for anything, and that was the way he liked it. Clearly, this was not going to be a good situation in terms of repairs or maintenance. We realize that we made mistakes, too. BF was a little over-zealous with calling and emailing with questions that we had about the place, and we overstepped our bounds by not specifically asking if cleaning before we moved in was ok. It was a good lesson learned, and also really confirmed for us that we do want to own our own home, and that we would be willing to put the work into it – but that if you are renting, you should be paying for the privilege of NOT having to do all that work.

Shortly after the security deposit was returned, we were happened upon a condo right down the road from where the house was. Not on a lake, but surrounded by them, which was good for our kayaking plans. Not a house, but a condo – and it was bigger than the house, with more storage space. It was also clean, and didn’t need paint, or have broken windows. The owner showed us his energy bills for the last year, and the worst was in february – $140/month, whereas the house regularly had $300+ bills for the winter months. And the condo was cheaper – $1200 a month. We are still unpacking and organizing, but, so far, everything has been great.

Oh, and the house on the lake? They re-posted it on Craigslist again yesterday, and the price is down to $1250/month.

Oh, hello! September 17, 2008

Yes, yes, I know….its been a while! I can’t believe its already September!

When we last left off, in June, things were just about to get crazy. A lot has happened since then. One of the most exciting things that happened was that BF finally got a new, in his field job, that pays him a reasonable amount of money. He started there in mid-July, and so far, loves the company and is infiniately more satisfied with his professional life. He also now makes enough money to be able to afford rent, life, and his looming student loans, which is a huge relief to me. We found a place, and moved on September 1st – so far, living in “sin” has been nothing but great – expensive, but great. The story of how we ended up where we are living is quite a story, though.

Probably the main reason that I’ve been ignoring the blog for the past few months is my sense of shame and embarassment at how much money I’ve spent. Moving is expensive. Summer is expensive. Weddings are expensive. I’ve recently put in place some better systems for tracking my money, and my expenses, which have only gotten more complicated with the new living situation.

But, I’m back. Expect to see lots more posts about my struggle to pay down the debt, save money for a house, and successfully cohabitate!