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financial wisdom

Do You Budget?

By | financial wisdom | No Comments


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Lots of people find starting a new year is just the motivation they need to adopt some new habits. Along with my new year’s resolutions, I usually try to set some financial goals for myself each year, and then I create a budget to tweak my spending/saving habits in order to reach them.

Do you have a budget? If you do, good for you! If you don’t, then have you ever thought about making one?

Before I made my first budget, I was little confused about what a budget actually was. I now know that for the most part, a budget is simply a list of your monthly income and expenses that allows you to plan accordingly. It’s a tool to help you manage your finances. Either your budget is balanced, and you’re able to save money every month, or your budget is a mess, which means you need to cut some expenses to enable you to save money every month.

Personally, I use my budget as more of a general guideline than anything else. Seeing my money mapped out for the year allows me to make feasible saving goals, and it also gives me a place to refer back to over the year to see whether or not I’m on track.

I think making a budget is a lot easier than it seems. If you’ve never made one, here’s what I do:

Simply open up Excel and make a list in the first column of all of your monthly income (salary, etc.). In the second column, enter the amounts of your income after taxes. Add up the numbers to get your total monthly income.

Now, begin making a list of all your monthly expenses (rent, mortgage, car payment, cell phone bill, internet, anything you pay for on an ongoing basis) and the amounts that you owe for each bill. You may also want to estimate how much you stash away in your savings account or how much you need for spending money each month. Add up your monthly expenses, and subtract the total from your income. If the number is positive, you’re in good shape! If it’s negative, then you probably need to make some adjustments to your spending (or find a way to earn more income).

Once you’ve done this you have a foundation upon which to create a plan. If you need to cut out some expenses, you’ll at least know where to start. If you are having some financial difficulty, the best thing to do is start tracking all of your spending for the next month or so to see where you can cut down on your spending — you might be surprised at how much you’re eating out or spending on clothes. Also, see where you can reduce some monthly recurring expenses – perhaps you’re not using all those cell phone minutes you’re paying for.

To take this a step further, I normally use multiple columns across a spreadsheet (one for each month). I enter my income and expenses in each column and total each at the bottom — this allows me to plan for vacations, holidays, etc. Then I can see approximately how much I should be saving each month to reach my annual goal.

Obviously, I’m not a financial expert. But a lot of my friends have complimented me on how I seem to manage my money, so I thought I’d share some of my habits with you.

How about you? Do you have any budgeting tips? Will you be making a budget for 2013?

P.S. Did you know that the word “budget” comes from the French word bougette for “purse”? =)

12 Things I Secretly Love About Being (Legally) Single at 31

By | boys, financial wisdom, lifestyle, lists, ruling at life | 6 Comments

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{the ring I bought myself in St. Maarten when I just the teeniest bit jealous of all my engaged friends}

In honor of today’s date (12/12/12), my friend Nicole asked me (and every other blogger on the planet) to write a 12-themed post for her link-up party. I knew I wanted to write a list, but I’ve been struggling to come up with an original topic all week. I was even on the fence about this one until I checked in with the boyfriend to make sure he wouldn’t be offended.

I say “legally” single because I’ve been dating my boyfriend for almost five years, so I’m not really that single; I’m just not married. Also, this is not meant to be an anti-marriage post or offend any of my married friends. Being married has its pros and cons, and so does being unmarried. You’re only getting one side of one story here — 12 of my personal favorite things about being (legally) single.

When I was in college, all I wanted to do was graduate and get married. When I think about it now, I’m nothing but grateful for the last 10 years and the fact that I haven’t gotten married yet. Here’s why.

1. I’m the only one with access to my bank accounts. For the last six years, I’ve been exceptionally proud of my money management skills. I’ve got several retirement accounts, an HSA, two savings accounts, both a personal and a business checking account, and a few credit cards. I balance my accounts every two weeks after I get paid, and I know exactly what my financial situation is at all times. While I’m responsible for exercising some self-discipline in order to maintain financial order in my life, I also don’t have to justify my spending to anyone else. I can spend or save my hard-earned money however I choose, and I take great pride in knowing that as of this moment, I can support myself financially pretty much indefinitely. It also makes it easy to do my own taxes every year.

2. I still have my own room. You know how some people go back to their parents’ house and get to sleep in their old bedrooms? I don’t really experience that anymore, partly because my parents have moved a few times since I left, but mainly because, while it’s been relocated a few times and evolved into a more grown-up version, I still have my old room, and yes, it is still decorated in Hawaiian print. Also, there are no one else’s clothes in my closet — just mine. It’s all mine. =)

3. I spend plenty of time alone. Anyone who knew me ten years ago can attest to the fact that I hated being alone. I pretty much attribute every anxiety attack I had between the ages of 10 and 23 to being alone. And I don’t mean being single. I just mean being literally alone, by myself, with no one to talk to. Luckily, over the years, I’ve learned to really enjoy spending time alone — so much so, that I spend at least a few nights a week at my own house, doing my own thing, sleeping alone in my own bed. I value time with myself just as much as the time I spend with anyone else, and I’m glad I’ve had the chance to figure that out.

4. I can still plan my future wedding in my head. I don’t do it obsessively like some girls, but I’ve been known to occasionally save a photo of a pretty dress or party favor. I’ve been saving a magazine with a picture of a cake in it since, I don’t know, like 2002. The fact that I’d choose the same cake now as I would have 10 years ago is actually kind of awesome.

5. I’m free to do pretty much whatever I want without asking permission or checking in. If a few of my co-workers ask me if I want to have dinner or go to a movie after work, and I don’t already have plans, the answer is yes. I don’t need to ask anyone else. Being married (or even just living with your significant other) means you’re expected to be there, so checking in or asking first is  a considerate thing to do. Since J and I don’t live together, I never have to do that unless I’m making a change to plans we already have. Most of the time, we do let each other know what we’re up to, but it’s never expected, and it’s always appreciated.

6. My friends and family rarely pressure me about having babies…mainly because they’re still busy trying to figure out when I’m going to actually get married. (Except for Kristy. She doesn’t care. She just wants me to have babies.)

7. Some of my best friends over the last 10 years have been guys. Granted, I don’t have many close guy friends in my life anymore — most of them moved away, some got married, etc. — but I’m thankful for the time we were friends and that I had the chance to meet them. If I had gotten married years ago, that probably wouldn’t have happened.

8. Some of my best friends over the last 10 years have been roommates. Again, some are still close friends, and some aren’t, but the fact of the matter is that I probably wouldn’t have even met any of those roommates if it weren’t for the fact that I wasn’t married and I did need someone to live with. I still have a roommate now, and J and I both consider him a close friend. =)

9. No one else is depending on me financially. Technically, I could quit my job and go wait tables without even asking anyone’s opinion. I’m 99.99 percent certain I’m not going to do that, but some days it’s just nice to know I could. 😉

10. My boyfriend and I are still “dating.” You know what that means? We regularly go out to nice dinners, movies, etc. It’s never assumed that we’re going to just hang out at one of our houses and do nothing all the time, and we never get sick of spending time together — probably because we spend plenty of time apart, too. That’s not to say we’re not serious about each other. We live within walking distance of each other; we have a dog; and we share a Costco membership.

11. I’m not obligated to spend time with anyone’s family but my own. That’s not to say I don’t love hanging out with J’s family — I certainly do! But I hang out with them because I want to, and no one ever makes me feel guilty if I have other plans. Neither one of us has to worry about how to split our time for the holidays because it’s pretty much a given that I’m going to go see my family for Christmas, and J is going to stay here with his. We’ve been rotating Thanksgivings, but again…that’s because we both want to, and not because either one of us feels like we have to.

12. It’s a total coincidence that my boyfriend and I have matching cookware. It has nothing to do with a wedding registry, and we don’t live together. We’ve just happened to have matching cookware since before we met. I feel like I just kind of have a strange appreciation for that fact that I wouldn’t have under other circumstances.

Thoughts? J seemed to think this post would be controversial. Like I said, these are just my own personal favorite things about not being married. That doesn’t mean I don’t plan to get married some day or that there aren’t things I dislike about not being married. It just means I’m completely happy with my life the way it is now, and I’m in no rush to make any major changes.

I’d love to know…are you single? Married? What are your favorite things about whichever one applies to you?

I’m Not Stupid

By | condo, financial wisdom, hazards to my well-being, mortgage, political views | One Comment

A few weeks ago, I was at a party, and I got caught up in a conversation with a friend’s boyfriend about whether or not an ISO 9001:2008 certified quality management system would benefit the success of a small real estate investment and/or property management business. My answer was a resounding yes, although I wasn’t sure it was necessary to spend the money on an actual certification — only a consultant to ensure it was implemented effectively — with convincing reasons to back it up. As the conversation progressed more towards management, multi-tasking and corporate communication and marketing ideas, the guy said to me, “Wow. I didn’t realize you were actually smart. I thought you were into clothes and shoes and girly shit. But you’re really smart.”

Wow, thanks.

I’ve been finding it somewhat difficult to update my other blog since then because I’m a little worried that I’m projecting the wrong idea of what I’m all about to the world. Sure, I love clothes and shoes and “girly shit,” but that blog is just one of my seventeen trillion interests and hobbies.

You know what my favorite magazine is? If you guessed People Style Watch or InStyle, you’re close — those are numbers two and three. But my favorite magazine is actually Fortune. I just rarely buy it because it costs $4.99 an issue and no one ever gave me a subscription to that one as a gift. (Number four is Coastal Living, for sure.) Also, anything financial tends to get me all riled up about the train wreck investment I made in my condo five years ago. I mainly steer clear of those topics these days because I can’t make any moves in any direction at all until I get out of the underwater mortgage situation, you know?

I’ve also found it difficult to update this blog because I’ve had some other real life crap to deal with over the last two weeks, and it’s all I’ve wanted to write or talk about. And sometimes I wonder if I over-share when it comes to my condo and my mortgage. Granted, I’ve gotten tons of feedback and e-mails, and I’m glad to have been able to communicate and chat with some of you who have been in similar tricky real estate situations over the last year or so. The fact that any of the information I’ve shared has helped even one person makes it seem a little more worthwhile.

Anyway, this morning, for the first time in two weeks, I woke up feeling a little less stressed out, so I took myself out to breakfast, where I indulged in an issue of Fortune (40 percent off at Borders’ going-out-of-business sale) and a cinnamon raisin bagel at Panera. And I read this article, which (if you read it online) links to this article, which is one I read six times the day I wrote this post in 2008.

In hindsight, I don’t think I was wrong three years ago, but today, I’d argue against a lot of my points in that old post. For example, I was committed to owning my condo for thirty years, paying it off, and keeping it as an investment, but I was never committed to living here for as long as I have. It never occurred to me that my condo association wouldn’t have the money to repair the buildings or that there would be so many foreclosures in my complex that the values were destined to decline by more than a third of what they once were. My intention was always to rent it out and move on to bigger and better things. (And let me tell you how much I’d love to move on to anything right this minute — my building is literally being taken over by huge wasps’ nests on the patios of all the vacant units. It’s gross.) I didn’t understand that for some people, walking away three years ago was the best and quickest way out of a crappy situation that was destined to get worse.

On the other hand, I now agree that the bailout was probably the best option at the time. I’ve accepted that it was never meant to be a magic cure-all to boost the economy back to what it was. It was meant to stabilize the economy, and that’s what it did. I think things could be even worse than they are now, and even a few weeks after the initial idea of the bailout sunk in, I figured that it would generate some profit in the long run.  That’s the way these things work, right?

It’s the end of this article that struck a chord with me:

We don’t expect any of what we’ve told you to make the bailout popular — we’re not wild about it ourselves for the same reasons many people dislike it. The government was picking winners and losers. Big Government bailed out Big Finance while letting average taxpayers lose their homes. Creditors of bank companies and AIG got far too good a deal at taxpayer expense. Wall Street is back to paying enormous bonuses (and whining about being demonized), while average Americans, whose tax dollars saved the Street, are still suffering. And, of course, the economy is down 7 million jobs from its peak in 2007.

But something needed to be done when the financial world was on the brink of the abyss, and the government did something. No matter what your views are, you should be happy that taxpayers, almost miraculously, are coming out ahead rather than hundreds of billions of dollars behind.

When our boss assigned us to find out how much the financial rescue cost, we expected to find a monumental loss, because Fannie Mae and Freddie Mac seemed like a bottomless pit. Instead, we discovered that bailout profit payments from the Fed — which we hadn’t previously thought of as a profit center — are virtually certain to exceed taxpayer losses on Fannie and Freddie. We were surprised — and pleased — to discover taxpayers showing a profit on the bailout. We hope that you are too.

That’s a sentiment I can tentatively agree with right now.

And so here’s the thing. Over the last two weeks, my co-borrower bailed for good, and I realized the condo association isn’t really financially capable of making the repairs necessary to improve the value of my condo any time soon. I’m faced with the prospect of either living here for another eight years, being eaten alive by a swarm of wasps, or making my escape while I can. And after all these months of trying to negotiate with the mortgage company, my main goal is to protect my assets, get out of this liability, recover from it, and try again in a few years.

In the end, I’ll be at peace with that for a few reasons. First, it’s the smartest thing to do. Second, it’s not my fault. Third, I don’t care what anyone thinks. And finally, as much as we’d all prefer to adamantly deny it, I suppose things could have been worse.

It wasn’t a mistake — it was merely misfortune. At least I learned a few things.

This crazy trip has got me feelin’: done
And I’m singin’ along to: King of Wishful Thinking – Go West

Dear Dad

By | financial wisdom, holiday fun | One Comment

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This is my dad. Very often, when it comes to holidays, he says, “Don’t spend any money. Make me something instead.”

Over the years, I’ve framed photos, made CDs, and pretty much just bought presents anyway. And until now, I’ve never actually been able to make anything without spending at least a little bit of money on supplies. (Even paste, macaroni and construction paper cost money, you know.) But this time, I’ve finally figured out something to make that’s completely free. This blog post. And since I’m the perfect daughter…I didn’t even send a card. =)

Happy Father’s Day, Dad!

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This crazy trip has got me feelin’: accomplished
And I’m singin’ along to: Back in Time – Huey Lewis & The News

Stop Trying to “Help” Me

By | conversations, financial wisdom, hazards to my well-being, political views, top notch communication blunders, you might learn something | One Comment

This is another example of really dumb laws that need to exist because people do not understand how their health insurance works.

Today, I had a prescription refilled at Target, and when I arrived to pick it up, they informed me it was the generic.

“I don’t want the generic,” I said. “I want the brand name.”

“Well, your insurance doesn’t cover the brand name, so it’s expensive,” the pharmacist said.

“My insurance doesn’t cover prescriptions because I have a high deductible plan, so I pay full price, and my drugs count towards my deductible. I’ve been taking the brand name for two years. That’s what I want,” I said.

“Well, we can’t give you the brand name unless your doctor specifies it or you request it,” she said.

“Okay. I request it.”

“Okay. Well, I’m not sure if we have any, so let me check. I can probably have that ready for you in about 40 minutes,” she told me.

“Forty minutes?” I asked. “I called this afternoon, and you said it would be ready in 10 minutes. It’s 7:30.”

“Yes, but state law requires us to fill with the generic unless you request the brand name. It’s to protect you and help save you money,” she said. “The brand name is $84.”

“Right. And the generic is $57, and I have a coupon for the brand name that makes it $25, so that law doesn’t help me at all, now does it?”

“Um…”

“In fact, I think if I didn’t know any better,” I continued, “it would have cost me $30, and either way, it’s going to cost me 40 minutes, which is ridiculous.”

She just stared at me. I think I hurt her feelings. It’s not easy being right all the time.

This crazy trip has got me feelin’: knowledgeable
And I’m singin’ along to: I Think Ur A Contra – Vampire Weekend