Archive for June, 2008

The 3%+ increase wasn’t unexpected, but it’s never good to see fixed expenses going up (especially during a time when energy and grocery prices are increasing so rapidly).

I’ve also put together a new budget spending plan, just in time for July! I’ve been a little too liberal with spending lately, and its time to be more conscious of what I’m spending my hard-earned $$$ on.

Spending Plan v 2.0
Rent / Utilities / DSL = $820
Eating Out / Groceries / Starbucks = $210
Medical co-pays = $40
Gas / Parking = $160
Car Insurance = $120
Car Repair = $80
Entertainment = $125
Personal Care = $50
Clothes & Accessories = $50
Laundry / Dry-Clean = $15
Student Loan = $160
Miscellaneous = $50
Gifts = $25
Travel = $120
Total = $2,000

I’ve decided can wait until next year are a new computer (eliminated computer budget), and since I’ve paid for all the test prep I’m going to take this year, the education budget has been eliminated as well. Next year, though, I want to take some classes at a local college, so I’ll have to set aside money for that purpose.

This spending plan is not set in stone… if CB gets a job out of state or out of city, I’ll have to plan on getting a new computer with web-cam and split my share of air plane tickets. But I think I have enough flexibility built in to my spending that an extra $200 a month won’t seriously derail my savings.


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American Girl

Does anyone remember American Girl? I first received the catalogue from Pleasant Company back in the mid-1990s (before Mattel acquired it), and fell in love with Samantha.

Now there are so many characters I couldn’t keep track of them, but the ones that were in my catalogue were Felicity, Kirsten, Addy, Samantha, and Molly. I guess that’s why no matter how many more dolls are added to the collection, those five will always be my idea of the American Girls.

But the dolls cost $80, and clothes, furniture, and accessories cost more than what I spend on myself (true to this day!). I knew there was no way that Mom would ever spend $100 on a doll, so I never bothered to ask (yes, even as a kid I was realistic), but I loved that catalogue. I think I’ve gotten more joy out of flipping the pages, and looking at the pictures, and making up stories in my head that I could’ve with an actual doll (or at least that’s what I kept telling myself…).

I actually considered ordering a catalogue now, just for a walk down memory lane. But I refrained. I mean, it’s not like I want to PLAY WITH DOLLS at my age. You know, now that I’m an adult and all.

(On second thought, I’m just tryin’ to keep the child in me alive.)

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Gas. Hurts.

For the month of May I spent over $200 on gas. This month, on top of the gas expenditures, I have to take my car in the shop for an oil change and minor repairs (~$120?).

Like most Californians, I’ve adjusted (slowly and reluctantly) to the painful reality of increasing gas prices. I am mentally preparing myself for $5/gallon by the end of the summer.

What can I cut? Well, the first answer is… gas. But, I can’t take public transportation to work, and on the weekends, I just want to go where I want to go! I figure I usually drive around 150 miles a week, which for my area really isn’t that much at all.

I’m guessing the first things to go would be things I’ve considered: no more trips to Ross, fewer dinners out, fewer groceries. Fortunately, Mom keeps me very well-fed by giving me loads of frozen and prepared food every time I go home. Yes, I am blessed. No, I don’t feel like a mooch. Is that bad?

Anyhow, I am hoping that 1. my rent won’t go up, and 2. my car stays “healthy”, and 3. I have more self-control over spending!

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I’ll turn 24 in several months, and whereas in high school and college I’ve always sort of went along with the crowd in terms of what I SHOULD want, now I’m really thinking about what I DO want, what steps I can take to get there, and how financial management plays a role in all of that. It’s exciting, but also kind of scary.

I’m very glad that I didn’t go straight from college to graduate school, because this period of working experience has clarified (and continues to do so) so many things for me in terms of what I think are important in my life, what type of work I do and don’t enjoy, and what careers I may want to pursue after grad school.

Single Ma had a really great post yesterday, about doing what you have to do so you can do what you want to do.

So as I continue to work and study and grow, I’m trying to figure out how to have a life on my terms. Not in everything, but in the most important things.

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In this shaky economic environment, I am fortunate that my job is not in jeopardy (knock on wood). But given that most employment is “at-will”, very few of us have the luxury of being unprepared for the financial impacts of a job loss.

Companies often go through financial restructurings during times of difficulty, so I thought it fitting to have a plan in place for my own “restructuring,” should the need arise.

At the end of June I will have $12,000 in my Freedom Fund.

If I am laid off, all finances will go in CONSERVE CASH mode. Currently I am spending around $2,250 a month, but I can cut that down to $1,700/month. At that level, I can stretch my Freedom Fund 7 months (and it can go even longer if I move back home).

Rent / utilities / DSL : $830 (I included a 5% rent increase)
Student loan: $160 (may be able to have payments suspended)
Car insurance: $120
Individual insurance: $125 (estimate from einsurance.com)
Prescription: $60
Gas: $200 (may have to drive further for interviews)
Food: $125
Car repair: $80
Total: $1700

I have another $12,000 in Roth contributions that I can withdraw – although I’d move back in with Mom & Dad before that happens!

Do you have a restructuring plan in place?

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I paid it off, but STILL. I have definitely had more cash OUTflow (to savings and spending) than I had cash INflow this month.

Basically, I’m operating at a deficit because I’m not willing to pull money out of my Freedom Fund. (I usually keep around ~$1,000+ in my online savings account as a cash cushion, and, well, now it’s way below $1,000).

Normally my bill (which covers 95% of my non-fixed expenses) is around $800-$1,200 every statement – what the H happened this month?

I know.

Eating out (pricey celebration dinners for various occasions)
Starbucks (I go there to study several times a week)
Test-related expenses (several hundred dollars)
Gas (almost $40 to fill up half-a-tank)
Ross ($15 dresses and shoes are my weakness)
Movies (Sex and the City x 2, Iron Man)
Target (new sheets, expensive shampoo, bath accessories)
Disneyland (the happiest place on earth costs $$$)


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This girl likes funds.

I found a CNN Money article that listed the 7 types of funds for a diversified portfolio:

U.S. Blue Chip
International Blue Chip
Small Cap
Bond Fund
TIPs Fund
Money Market Fund

My current funds are:

U.S. blend fund
International fund
Bond fund
Money Market fund

Eventually, I’d like to add a small value fund and a REIT fund to my equity holdings and a TIPs Fund to fixed holdings. All of these funds have a minimum dollar amount, so I’ll have to wait until my portfolio double in size before I take that step. For now, I feel that my portfolio is appropriate for my risk tolerance and goals.

As always, please do your own research before you invest.

And, I don’t know how realistic this is (need to crunch the numbers first), but I’d like to have $100,000 saved for retirement by the time I’m 30. This figure is daunting (because I expect to be in school for 2 years before 30), but it’s made less so by the fact that 1. I can hope to have gains carry me some of the way (although in this market…), 2. I already have almost 1/4 saved towards that $100,000 goal.

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So close, and not so far away!
I am $500 away from maxing out Roth IRA for 2008. At which time, I’ll have maxed out my Roth IRA for THREE years in a row!

Goal adjustment
My original 2008 goal was to save $26,000. With the year half over, I have contributed $12,030 to Roth IRA and Freedom Fund in 2008. right now, I’m 46% of the way there. I think $26,000 is a wee bit of a stretch given several factors (Hawaii, test preparation – just the registration to take the test costs $250!, expanding my budget, etc.). I have decided if that I can save $25,000, I will be very happy.

For now, the goal is just to keep contributing $1,500/month to the Freedom Fund, and then max out the Roth IRA. Even if I manage to do all that, I’ll still be $2,720 short of my revised goal of $25,000. That money will – I hope – come from the year-end bonus.

It all comes down to fixed expenses
I haven’t been very good about keeping track of my expenses for the past two months, but the cogs in my personal finance machine is still turning. The most important thing, for me, I’ve come to realize again and again, is having low fixed expenses.

I cannot overemphasize how much easier and less stressful my life is because my rent, car insurance, utilities, internet combined is less than 20% of my gross. It’s beyond awesome. Of course, with the rising gas prices, every tank is taking out a bigger and bigger chunk of wallet (last fill-up at $4.59/gallon – seriously, I expect to see $5/gallon very shortly).

I know I am blessed. Have to remember that. 

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Sometimes, saving money is discouraging. Especially if it’s:

1. For the short-term to medium-term (no compounding magic here!)
2. For a very very large amount (multiples of what you’ll be able to save)

For example, It’ll take me almost a year to save $10,000 in non-retirement assets, but that’s less than 1/10 the amount needed to fund 2 full years at a good grad school program. I have friends who have entered graduate school (law, medicine, business) where they will take out hundreds of thousands of dollars in loans. Up against that monstrocity of a number, how can one really work up the motivation to save $5 on a sandwich, or $20 on a dress?

Today, I stopped by Ross on the way home and found a beautiful polka-dot dress for $20 (black, with magenta trim). Unfortunately, the size wasn’t quite right. I struggled for a few minutes to adjust the straps and briefly contemplated bringing it to a tailor… but finally gave up.

It’s a sign. Even Ross knows that I’ve been spending too much lately and is telling me stop.

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Labels and love

Tonight, I went to see Sex and the City: The Movie AGAIN (I already watched it opening weekend). What can I say, I saw, I loved, I got carried away.

The cinematography and costume designs were gorgeous. The dialogue was witty. And the four New York girls women? They shine like they always do. I’m not an unbiased judge, but I really enjoyed the movie. There were so many big-time labels and lots of Big-time love. 😉

My favorite dress – Miranda’s blue gown at the wedding (does anyone know who’s it by?). She looked radiant. What’s your favorite fashion moment? (I know, there were so many!)

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