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Archive for March, 2008

Who ARE you guys?

I’ve been writing this blog for 2 years now. I’ve never really paid close attention to the stats, and even though this blog is way more popular than it has been in the past, it’s always been small enough that I’m still really, really, excited every time I get a comment or an email.

I guess the point of this post is – I just want to know who you all are. (Lurkers, please delurk now!) Tell me what you like about the blog, suggestions to make it better, why you read it, where you’re from, where did you find out about it, etc. etc.

Oh, and what is one website/book/factoid that I MUST know about?

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I know what I want

This is what I am going to get tomorrow night.

There will be no rest until this mission has been accomplished.

P.S. Check out hulu. GO! Delay not one second… you will thank me for it. Promise.

(Can you say… Doogie Howser?! and Remington Steele?!)

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Follow-up to Marie

So in my previous post I had some questions for Marie, the 20something who is coming to grips with her family’s influence on her finances and her choices… and Marie was nice enough to answer back!

What did you think while your father was indulging you with the cars & such?
Partly because of the fact that I was still a child/adolescent and my thinking processes weren’t fully developed, I didn’t think about what it took to buy things and whether my parents were being financially responsible. The other part is that I just didn’t know any other way of life: I went to school and was friends with upper middle class children, and my extended family is financially comfortable, so I thought material possesions were the norm.

Do you think that watching his behavior made you assume that having credit card debt is okay? Growing up and when I was in undergrad, I thought credit cards could be used to buy whatever made you wanted. Now, however, I definitely do not think that carrying credit card debt is ok. 

Has money affected your relationship with your father now?
Absolutely! Although my dad loves myself and my siblings immensely, because of the way he was raised he tries to use material items to show his love. And his lack of and mismanagement of money is an issue that permeates every aspect of my life. Regardless, I love him and I’ve already come to terms with the fact that I will probably be supporting him in his older age.

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Very long (but extremely interesting!) story about “Marie”, who lives in Texas. She writes of family (in particular her father’s) influence on her view and management of money.

I am 24 years old, currently live in Houston, Tx, and work at a higher education institution. I have to examine my grandparents and parents finances to lead up to my own financial situation as a 20-something. Both of my parents were born and raised in Latin American countries, and their respective families were well-to-do/wealthy in Latin American standards, translating to maids, large houses, private schooling, and attending college ‘abroad,’ either in the US or Europe.

However, neither of my parents’ family was flashy or flagrant- my mother had 5 siblings, and she emphasizes to myself and my brothers how hard both her parents and my father’s parents worked to be able to provide the lifestyle they lived.

My father was a ‘surprise’ baby- born when my grandmother was in her late 30s, he was 10 and 12 years younger than my two uncles. This large age difference coupled with the fact that my grandparents were older and couldn’t deal with a young child, led to my father being spoiled as he grew up, and eventually sent away to boarding school. Constant indulgence meant my father never learned self-denial and has acted on his impulses all his life. To this day he live paycheck to paycheck, doesn’t have health insurance, life insurance, retirement savings, pays all his bills late, his credit score is in the garbage, and to top it all off owes the IRS money and my mother back child support, leading to his bank accounts being frozen and assets seized multiple times. Ironically, my mother is the epitome of self denial- she currently lives on $500 a month from Social Security.

So how did these opposites get together? My mother became pregnant while in college, and they got married. This was the start of many bad decisions, as my parents continued to have children and my mom never finished her college degree. This meant she was limited in the jobs she was eligible for and the maximum pay she could receive. I think she was happier than I was on my college graduation day, because simply having a degree opens so many more doors for you.

My father, although obtaining a degree in architecture and working as an architect for a few years, decided that he did not like having an ‘office job,’ and coinciding with my birth he quit the relatively lucrative field of healthcare architecture for his passion, photography. For the majority of my childhood he was the sole breadwinner for our family of 5 with a maximum income of around $50,000. That income was supplemented by my paternal grandparents (still indulging my dad!) and my mother eventually working full time prior to my parents divorce.

Growing up, however, I wasn’t fully aware of our financial situation- my parents (with my grandparents help) bought a large, slightly run down house in a good neighborhood, and we attended good schools. Summer vacations were funded by my grandparents, and we did have brand name luxury items due to my father’s self-indulgence and desire to indulge his children as well.

I have a vivid memory, however, of being around 10 years old and my next door neighbor, a girl a year or two younger than me, asking ‘what it felt like to be poor.’ I also remember my father always making the joke after Christmas about ‘Santa being broke.’ And we never had health insurance until my mother started working full time.

So fast forward past my parent’s divorce, my mother suffered a stroke which left her partially paralyzed. She could no longer work, and my younger brother and I (still dependants) were eligible for Medicare and other governmental assistance. I was actually glad because this meant I could go to the doctor if sick, get new eyeglasses, etc. I had also entered high school, and started working to pay for my clothes, discretionary spending, etc.

My father, continuing to indulge his children, bought me a brand new car when I was 16- which took him 6 years to pay for. I applied to college, and lucky for me was accepted to a large public institution with a full financial aid package, including about $5k in loans a year.

In college, I was the model of living above your means- large apartments, opening credit cards to pay for living expenses (including a bed, mattress, computer, lots of clothes and eating out) and basically maxing out everything available to me. I studied abroad my junior year, living in France for a total cost of $30k, about $25k of which was funded by loans. My mother constantly asked me about my credit cards since all my mail went to her house, saying that she was worried about how much I owed.

By the time I graduated college, I had about $53k in loans and $15k in credit card debt, with no one besides my mother knowing the full extent of my finances. My father’s car was repossessed at this time, so when I moved back home he started using my car and after finding a job I bought a used luxury car for the sweet deal (not) of $17k, bringing my total debt to a little over $85k.

That was about a year ago, and I had a wake up call about 6 months ago. My entire life I had been surrounded by irresponsible financial decisions, and had never learned how to manage finances successfully. My debt was consuming me- I worried about money all the time, and I couldn’t do anything that I wanted to do because all of my take home pay was used to pay credit cards, my car loan, and my school loans. I had no idea where my money was going or what it would take to pay off my debt. I couldn’t move out of my dad’s house because I couldn’t afford an apartment.

My boyfriend kept nagging me to take a vacation together, but I couldn’t tell him the real reason why this wasn’t possible- my massive debt. I finally cracked in December and told him how much I owed, which makes 2 people who know the full extent now. 🙂

I try to be open and honest with my family and my boyfriend now about my finances and money in general, especially with my younger brother who is a sophomore in college, paying for it the same was I did- primarily loans. I also lecture my boyfriend, who doesn’t budget and doesn’t have any retirement savings. I have a pretty strict budget, but it’s hard to constantly battle the urge to shop, eat out, etc. I read lots of PF blogs for budgeting/saving ideas and bolster my resolve to pay off all my debt.

My total debt now stands at $72k, and I’m also funding a 403b through work and building an emergency fund. In terms of the future, I’m considering getting a second job to help pay off debt faster, and help defray the costs I will incur when I move out of my dad’s house next month.

Did I mention I will also be applying to medical school this year? So although I know my financial situation will get waaaaaaaay worse in the next few years because of med school loans, I think I am at least better educated now to not fall into the same traps I did growing up and in undergrad- including using credit cards endlessly, not budgeting, not facing my financial problems, etc. Also, I hope to have all my consumer debt (around $19k) paid off by the time I enter med school in the fall of 2009. Then I will only have student loans left, which the interest can be deferred while I am in school.

Whew! If you got through all that, congrats! I’m glad that Marie is now on track with her finances, and on her way to a fairly lucrative career as a doctor (although, the loans!). Marie – what did you think while your father was indulging you with the cars & such? Do you think that watching his behavior made you assume that having credit card debt is okay? Has money affected your relationship with your father now?

__________________________

Please check out more Money Stories here!

Email me if you want to share yours.

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Dude, where’s my check?

So I got my tax returns back from the accountant, and this is what I found in the client notes section:

“Your projected economic stimulus payment is $0 because you are ineligible for the rebate or your federal Adjusted Gross Income exceeds the economic stimulus payment AGI limits.”

!?!?!?

Let me repeat that.

!?!?!?!?!?!?

According to my understanding of the economic stimulus package, single filers with an AGI of $75,000 or under will generally receive $600.

I most certainly did NOT have an AGI of $75,000+ in fiscal year 2007.

The most likely explanation is that the accountant plain typed wrong. If so, I need not worry. According to the IRS website: “You do not need to calculate the amount of the stimulus payment. If you qualify, the IRS will automatically figure it and send it to you. The IRS will also send you a notice showing the amount of your payment. You do not need to call the IRS or fill out any other special forms.”

This is what I’m going to do: give Mr. CPA a call and sort this whole thing out. But I’m fairly confident that I WILL get a $600 check back and do my part for the good ol’ US economy.

Still. A call for my peace of mind won’t hurt.

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Treat

I just came back from dinner with a new friend (she was so much fun!!). The food was delicious, the conversation flowing, the laughter contagious. My share was around $30, including tax, tip, and valet.

At my current $110 budget for eating out, I can only afford 3-4 meals like the one I’ve just had per month (I maybe have 2 nice meals a month – gotta save some $$$ for those late night Chipotle runs!). And that’s if I only pay for myself.

Sometimes I wish my budget was accomodating enough that I can just say, “don’t worry, let me get it.” It’s nice to be able to treat a friend to a good meal. I’ve paid for friends before, but quite sparingly. And only when the bill was below $30.

I know I’m not cheap, but I hope that in the future my financial situation will allow me to be a little more generous.

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Gas, oh, gas

I just filled up the Old Faithful this weekend for $3.40/gallon. Regular Unleaded. Two weekends ago it was $3.07 a gallon. Prices are now $3.50+.

WHY?

This gas price is really a pain in the you-know-where… I have $150 for gas/parking, and so now my plan is to minimize ALL parking expenses (which is difficult, given that most of the places near my home require valet parking or paid parking***) and devote the full force of the $150 towards gasoline purchase.

To be honest, I have NOT made any dramatic changes to my driving habits in response to the rapid upswing in gas prices. On the weekdays I commute to work & back (~12 miles round-trip). On the weekends I drive more (~100 to ~200 miles) to see CB, volunteer, etc. Now, one thing I really dislike is feeling like I can’t go somewhere because it’s too expensive to drive. If gas prices keep rising (til $4+), however, I’d have to make some adjustments.

Have you made any changes to your routine because of the gas prices? Would you rather cut back in other areas or would you reduce your driving?

***Does PAYING to park at a mall where you’d be spending $$$ anyway bother you? (At least give me validated parking!) ‘Cause it’s always bugged me a little. Isn’t it enough that I’m buying things from your store? Why do I still have to pay $3?

***I once paid $10 to park for a not-so-good play. Never doing that again.

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How am I doing on those darn goals?

Save $21,000 in money market fund: Generally on-target. Year-to-date contributions total $3,200 as of the end of February. I am currently 15.2% of the way to my goal, and the year is 17% over…

Max out Roth IRA ($5,000 a year): On-target! I have $1,100 for my 2008 contributions, which means that I’ve achieved 22% of my goal.

Do not make extra payments on student loan: Er… I might have paid an extra month because I didn’t know my automatic debit has kicked in. So instead of 10 years, I’ll pay this loan off in 9 years and 11 month. Oh well. It’s not big enough of a deal for me to go through the hassle of postponing automatic debit for a month.

Keep track of spending: I am so on top of this its a little scary. I have truly gone from 0 (never knowing exactly where my $$$ went) to 180 (recording expenditures down to the penny in PearBudget). And dare I say, it’s even kind of fun. More personal data to manipulate in spreadsheets!

In other news, I do plan to take some classes for personal edification. I want to take a language class at a local college… but I’m a little hesitant because the class runs 5 hours a week for ten weeks. And cost is almost $500 (but that’s very reasonable – less than $10 an hour of class). If I do take this class, I’ll have to significantly expand my education budget and cut down somewhere else.

I want to become proficient (as in, I can put the skill on my resume, write a brief, watch movies, and hold a conversation on politics/investing/popular culture) in 3 languages – English (still working on this one… kidding!), Chinese Mandarin (ni hao ma?), and Spanish (no comprendo mucho).

I’ve taken classes in Mandarin & Spanish, but language is truly a use-it-or-lose-it skill. Unfortunately, I’ve lost my language mojo and now I’ve got to woo it back.

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With this story, the 20something Money Stories series has officially crossed the Great Gender Divide!

In other words, let me welcome the first story submitted by a male author, a quarterlifer Angeleno working in the communications/media industry.

Well. Hello there.

A few days ago, I was asked by Well-Heeled to write a guest entry for her blog.

“But what would I write about? Your blog discusses financial responsibility while mine is cluttered with emo postings of my ex girlfriend and guy jokes.”
“Just write whatever you’d like”

Alright then. But in doing so, I am doing my best to honor the themes of both of our blogs. How to manage money and the experience of starting life as a single guy at the age of 24. So here goes:

After the first couple of months moping around, chugging 12 packs of Natural Ice beer on my front porch listening to Ben Folds and wondering “why”; I had to embrace that my life was changing and I had to adjust to being a bachelor for my first time. I found that I was spending my hard earned coin in ways that I have never done before. Here are the top 3 money sucking variables I’ve experienced as a single guy:

1. Clothing. I have terrible, terrible fashion sense. When you’re dating a girl for 6 years, you get lazy when it comes to clothing. I can remember many, many times getting ready to go out for a night on the town, only to have my ex sigh, shoot me a look of disbelief, spin me around on my heels, and march me back into my closet. Alas, I no longer have that luxury. But I needed to be able to look attractive to members of the opposite sex and skate tees weren’t cutting it.

Now I send my cousin a couple hundred dollars every six months or so. She is perfect for finding new outfits for me with the best deals. She buys them and send them down to me. I never question what she buys! Every article of clothing I wear now are things she has picked out for me.

2. Room decor. My roommate (quite the ladies man with quite the record) walked into my room one afternoon during a cleaning day and said to me, “This needs to change if you ever hope to bring a girl home.”

“What do you mean?”

“It looks as if a child lives here.”

And we was right. I never bought proper furniture for my bedroom when I moved down to Los Angeles after college. I used empty milk crates and oranges boxes for my clothes. My comforter was one I had kept since… well… since I can remember. It was a car blanket and I can’t tell you how many times I’d get “Oh my God! I used to have that!” My ex never complained, but now were different times. I rolled up my beloved “blankie” and made a trip to Bed, Bath, and Beyond (sigh). I had no idea how much comforters / comforter covers cost! I swear there’s some undercover racket going on in the linens industry. Alas, it was necessary.

My oranges boxes were trashed and a real, “adult” dresser was acquired.

But I refuse to take down my Spider Man poster. God help me if I ever have to take down my Spider Man poster.

3. Bar money. Gotta go out and meet people. And the best way to do so at my age and in my part of the country, is bar hopping. I was going out on weekends more than I ever had before. That gets spendy, Lordy, does it keep spendy. I’m buying drinks for myself, rounds for my friends. For the record, I’ve never purchased a drink for a girl I’ve never known. That just seems cliche’d and honestly, does it really work? I have my doubts with that route. But to be social cuts deep into my paycheck. It hasn’t really paid off in the romantic arena yet, but… I have faith.

There you have it!

I want to thank our host Well-Heeled for having me on. -takes sip from coffee mug- And to all of you who endured reading the financial woes of a single 20-something living in sunny Los Angeles, California.

So, male readers out there – if you have a story, please do share. Someone else has already taken the first plunge! 😉

Check out So@24’s personal blog for more!

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