Should I get something that I want but do not need?

So far, I’ve contributed to the retail economy $9.65, by buying two packs of Christmas cards. But, I may spend much more before this weekend is over.

Okay, here’s my dilemma: should I get something that I want but do not need?

Namely, should I buy the Calvin Klein pillows and down alternative comforter for $112, including taxes & shipping? I think I’d be getting a really good deal, and the reviews have been great, and I have been wanting a new comforter for a while now.

But I don’t need new pillows or a new comforter. But I want them. It wouldn’t be too self-indulgent to get them, would it?

Maybe I will wait until Sunday to decide.

Maybe this can be my Christmas present to myself?

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Things I’m grateful for: health insurance

After I came home, I got a bill from my doctor’s. My eyes immediately turned to the $225 figure – and I mentally had a “What?!” moment.

On a closer look, I realized that all but $8.81 of the amount is paid for by insurance, so my responsibility is for less than $10. That made me feel much better. It also reinforced the fact how important health insurance is, and how fortunate I am to have quality, affordable health insurance.

That’s why I include a line item in my restructuring (aka “laid off”) budget for private health insurance. Even if it’s only catastrophic coverage, I am far too chicken to play chicken with my health. I have family members who work in the medical field, so I’ve heard about the ordeal that falls on people with inadequate, or no, insurance.

Mom told me that staying healthy is the most important factor to achieving and maintaining prosperity in America. The more I think about it, the truer I think it is.

I worry about health insurance a lot – for people that I love who aren’t insured, for the future of the health care system in America, for the growing Medicare and Medical liabilities, and for my parents’ health insurance / long-term care insurance needs.

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Christmas shopping

Many people worry about gift-giving during Christmas time, but I never do. My entire extended family is pretty small, and they all live outside of my city, and many live outside of the country. My immediate family is not very big on the whole holiday celebration (I think we’ve stopped having a Christmas tree after I turned 13 or 14).

As for friends, I usually only send Christmas cards – there hasn’t been a tradition of gift-giving among us (except for Secret Santa during college). Even for my birthdays / Christmas, I’ve received cash as opposed to gifts from my parents.

So Christmas for me is usually fairly low-key in terms of gifting. I usually buy 3-4 gifts: something for CB, something for his mom (usually a Starbucks card), something for my parents (maybe some movie tickets so they can finally go on a “date”), and… maybe something for my aunt. But really, that’s it. Christmas shopping rarely costs me more than $200-$300. Actually, I don’t think it ever has.

It’s nice not stressing about buying gifts for the holidays.

How much do you usually spend for the holidays? And do you ever stress about buying the perfect gift for a loved one?

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The economy’s twisted sense of humor

There are so many fantastic things on sale right now. I see J. Crew outfits on sale for 50%-60% off, I see Mexican and Carribean cruises marked to less than $80/day, I see restaurants with great fixed price menus. Disney World is having a sale where you get 3 free days when you purchase 4 days. In short, right now is a really good time to consume.

But, alas, I feel so uncomfortable handling large cash outlays right now, given Dow’s recent performance (7,500?!?!) and the general air of gloominess about the economy (newest villan: deflation). So all these great deals are happening all around us, but I, like many consumers, are too worried to take advantage of them. Oh, the irony.

Also, I’ve been seriously considering moving back home if I were to be laid off. As far as I can tell, I’m okay on that front, but in this economy I’m not assuming anything.

Before, I had said that I’d want to stick it out for as long as possible before I move home. But after hearing all these reports of people job-hunting for months on end, I think the more prudent action would be to cut my costs as dramatically as possible, as soon as possible. (If I move home, my monthly costs would drop to $700-$800). So my plan has changed. Instead of waiting ’til I’m at 6 months without a job before I move home, I’ll probably shorten the time to two months. Let’s hope I won’t have to actually put my plan into action.

P.S. I just re-read my post, and I realize how lucky I am, even in the midst of this economic uncertainty. I am lucky that I am young and well-educated. I am lucky that my jobs enabled me to save a relatively robust emergency fund. I am lucky that I have parents who live nearby. I am lucky that I don’t have a mortgage or children. I am lucky that the only person I have to take care of, right now, is me (and even then I will have the support of family if I need it).

My opportunity cost is so low compared to what it would be at any point later in my life. If I’ve got to face the “biggest financial crisis since the Great Depression”, this might be the best time for me to face it.

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Rough economy = cheaper hair cut & much, much more

I have this hair stylist, “Don”, that I love. My hair gets the most compliments whenever he does it. Unfortunately, he is an hour’s drive away and charges $50/haircut. Add in the tip, and I’m at $60. I had planned to go to Don this month, but finally decided not to.

Part of the reason was the drive, but part of the reason is the feeling that it’s no longer prudent to spend $60 on a haircut. So I went to a less expensive place that cost $20 including tip. The haircut turned out well and I’m happy with it, but there is a difference between the $60 cut and the $20 cut (as there should be). So, I guess I’m just one incidence of the phenomenon illustrated by these NPR stories about the beauty industry and the downturn.

There are also signs of the slowdown every where I went:

• At salon I went to, the owner said traffic was very slow. “It’s a recession, they just don’t want to say it publicly,” she insisted.
• CB and I went to a casual sit-down restaurant (I won a $30 gift card in a raffle), and usually we’d have to wait for 30-40 minutes at that location. But we were seated right away.
• A friend who works at McDonald’s said that more people are, er, displeased that Micky D’s is charging 25 cents for extra condiments and sauces. Apparently, one customer made his displeasure known by chucking his milkshake at the drive-through window.
• I know or know of several people who have been laid off from positions in consulting, finance, wealth management, media, and accounting. In many cases, the entire department was eliminated.

What are some signs of the downturn that you have witnessed? Did you trade down to a more inexpensive salon / beauty treatments because of the economy?

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On the men in my life

This weekend was a weekend of rebuilding and strengthening relationships with the men in my life (and churning out files for work calls on Saturday and Sunday, but that make a much less interesting post).

CB

In 3 months I’ll have reached the 6th year of my relationship with CB, whom I met in high school. We’re both college graduates now, and still going. We’ve had big ups and downs, because of immaturity, insecurity, physical distance, and just plain ol’ growing-up on both sides. Sometimes, looking back, and looking at the seventeen-year-olds I know, I think it’s a minor miracle that we’ve made it this far when we started so young.

I’ve learned a lot about myself through the process. I’ve learned that perfection does not belong to man, nor woman, though that has been harder for me to accept. 😉  I’m learning how to fight fair, and how to let go of the little hurts, annoyances and misunderstandings so they don’t poison the important stuff. I have learned am still learning that love is as much a verb as it is a noun.

Dad

This weekend I also reached out to Dad, with whom I’ve had a strained relationship in high school and a distant one in college. We never really fought after I left for college, but that’s because we stopped talking about anything beyond the most basic of niceties.

Now that I’ve finally had some (8 years worth!) of distance between us, I can move beyond the hurt that I felt as a teenager, realize that all relationships have faults, and see that at the end of the day, he’s still the only father I’ve got. Daddy’s little girl? Maybe not quite, but it’s never too late to try to build something new and better.

God

God is referred to as “He” in the Bible, but I think just as He is beyond human, he is also beyond human gender categorization (and I’ve taken a class called “Divine Feminine” in college). I am still working on building a spiritual life, and cultivating a relationship with something greater than myself and my own little world. It’s a work in progress.

I write a personal journal, and I tell God that I am pro-choice and I believe in evolution, and I ask Him why can’t we stop killing in His name, and why are there wars and accidents and crimes and horrible genetic diseases. I don’t have the answers, but I pray to Him nonetheless. A little bit of faith? That must be it.

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Getting paid, and paying myself first

Today is pay day. Every day the economy is being pummeled, so I’m not taking even one pay day for granted. The most important thing is still paying myself first.

And, this pay day is extra special because I have officially crossed the $23,500 mark on my Freedom Fund!

So now, I’m setting a s-t-r-e-c-h goal for myself before the end of 2008:

• New goal: $27,000

• Current balance: ~$23,520

• Amount needed: ~$3,470

It’ll be tight, but with aggressive savings from the 3 paychecks I have left and some ad income, I should be able to hit my stretch goal (baring any emergencies). This means an inexpensive Christmas, continuing my clothing hiatus, and forgoing a trip to Vegas that I had been seriously considering. $27,000 would fund 15 months of living expenses.

12/31 Update: I made it! $27,000 in my Freedom Fund (emergency cash).

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The rebalancing act and young investors

I started out investing with 10% fixed, 90% equities (using the 115-age rule). As a result of the continued revolt in the equity markets, however, my asset allocation changed to 21% fixed, 79% equities. That’s a tad too conservative for me and my 35-year time horizon, so I’ve decided to re-balance.

But, being the chicken that I am, I only rebalanced to 17% fixed, 83% equities. Not a huge difference, but still a first step. After New Year’s, I’ll start thinking about rebalancing more aggressively.

And, my retirement balance has dropped in value by more than 1/3 from my contributions. This is the first bear market that I’ve had money in, and I’m proud to say that I haven’t made any drastic changes based on my emotions.

I’ve read over and over again how a down market is one of the greatest gifts to a young investor, because you are purchasing cheap assets that will have decades to recover and appreciate in value. I know I’m in it for the long haul, but this hurts. I wouldn’t be surprised to see the Dow down to 7,000, with potential to fall another 500+. I can only take comfort in the fact that in 20 years, stocks will look cheap now.

Note: I am not a financial expert and I am doing only what is best for me. Please don’t make financial decisions based on anything I say in this blog.

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Please, buy something!

Since I started my clothing/accessories/shoes hiatus in September that I promised to see through to the end of this year, I have broken it just once, by spending $5 on a tortoise shell necklace at a flea market.

From a personal finance, individual perspective, that’s great. But apparently, people like me are contributing to the RUIN of the economy. We now wear the sad title of American consumers who no longer consumes. (Actually, on second thought, I just contributed $500+ to the car repair industry – and to a locally-owned business to boot!)

So I think this is a time when, if you have the discretionary cash and you decide to purchase something – big OR small, you can feel truly great for helping the economy. If you are in the market for something there are GREAT deals to be had – retail, travel, hotels, cars, furniture, home improvement, etc. etc. etc.

So, all this talk about the rich should not spend because of the negative perception it creates? Rubbish! If you have the means to, go on and buy… it’ll help us all.

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How to spend $500+ in one go

Two words: car repair.

My trusted mechanic had informed me of this expense a couple months ago, so while I’m not panicked about this expense, it’s still a big chunk of change. This repair isn’t urgent, so I can probably put it off for a couple of months, but I know that it’s important to take care of my car properly.

At least this bout of repairs will get me into 2009.

This repair, however, does raise the question:

1. At what point should I consider buying another car? The KKB value of my current vehicle is at around $3,500-$4,000. In my first year of ownership, I’ve spent over $1,000 (or 1/3 to 1/4 of the car’s value) on repairs and routine maintenance. I won’t buy a new car as long as this one continues to run reliably. After all, Mom is driving a 1993 Civic with no air conditioning (granted, she never takes it on the freeway). I’m not as frugal as Mom, but still.

2. Should I continue to pay for collison and comprehensive coverage (with a $1,000 deductible) on this car? By only having liability insurance, I can save around $500 a year.

So much to think about.

Non-car-related tip: Sephora is having their Annual Friends & Family Sale online, where you can get 20% off everything by using the code FF2008. Unfortunately, today’s the last day. So hurry if you have something you wanted from the Mecca of All Beauty Products. Hat tip to C.C.

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