June gloom, financial style

June gloom is not only confined to coastal climate. Right now, I’m feeling under the weather when it comes to my personal finances.

May and June were pretty bad in terms of spending. In addition to my own spending on fun things, unexpected expenses just seem to crop up (hello $60 parking ticket and $90 medical bill), not to mention double rent for a month will kill your budget.
 
Normally, I’m really good at letting the sunk costs be sunken. I don’t ruminate over it. I see the charge, groan inwardly, then I pay the fine or the fee and I move on.
 
I don’t know why this month things have been weighing on me more heavily. I just feel discouraged.
 
Well, July is a brand-new month. Which means I’m going try to get back on track by:

• Putting in $3,000 into 401K
• Limiting restaurant meals to 3x a week. That’s it!
• Giving up expensive ($25+ per person) meals. (I had a $80 dinner at a Michelin-star-rated restaurant in June. But it was worth it. Oops.).
• Eliminating spending on clothes or shoes.

I, however, will keep have some personal pampering and fun by:

• Taking dance classes for $60.
• Getting a massage for $110.

Has anyone ever felt the “June gloom” of personal finance?

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Cash goes fast when it comes to standardized tests

Or, all the money that went to College Board / ETS and GMAC over the years.

As a veteran standardized-test-taker who have recently (and happily) said goodbye to standardized tests, I’ve decided to take reader S’s suggestion and tally up all the money that went into this little 1-person enterprise of standardized test-taking.

The numbers will be an approximation (to the best of my memory + googling) for the tests I took in high school.

• 10th grade: PSAT:
  Cost to take: $10-$14 (?)
• 10th-12th grade: Advanced Placement Tests (5 total)
  Cost to take: $135 each = $675 total
• 11th grade: SAT I (taken twice – I might be showing my age, but when I took it the full score was 1600, not 2400)
  Cost to take: $25 each = $50 total
  Cost to send top score to colleges (12 colleges) = $8 each = $96 total
  Test-Prep: $0 – my high-school counselor somehow got me into a class that a prep organization was doing as a pro-bono project.
• 11th grade: SAT II (3 tests, each taken twice)
  Cost to take: $25 each = $150 total
  Cost to send 3 top scores to schools: $8 each = $18 total
  Test Prep: $500-$1,000? I was sent to tutoring every day after school for a couple of months.
• Post-college: GMAT (taken twice)
  Cost to take: $250 each = $500 total
  Test Prep: ~$1,800 – this includes a formal 9 week prep class and a couple of additional workshops.

Adding up all the numbers… comes to out to around $4,000. Just on testing and test-prep alone.

There are some people who are innately good at standardized tests. They study for two weeks and get a 99.999th percentile on the first try. They are the ones who get 780s on GMATs and 176s on LSATs. (Yes, I know people like them. I try not to hate too much. 😉 ).

Then there are people who really struggle with standardized testing in general – they may be very smart individuals who are just not good at these types of tests.

I think I fall somewhere in the middle – I usually score better than median on the diagnostic just as a benefit of the education I have received to date (and as an avid reader my verbal skills tends to rank fairly high off the bat), but I definitely need to study over a consistent period of time to get a good score.

That’s where test preparation (and the financial resources it required) has helped me a great deal.

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Saying goodbye to standardized tests

Parting is such sweet sorrow – except in this case.

Finally took my test today.

Before the test and during breaks, I kept repeating to myself – just do what you know how to do. I knew that if I just did the questions that I know how to do – if I just performed at my ability, I’ll get a score I’m happy with.

And I did. 95th percentile! Not the 98th or 99th percentile that I know people gun for, and frankly I could’ve gotten a few percentiles higher in the Verbal section (although I did much better in Quant than I thought I would) – but you know what, it’s okay. I’m truly happy with what I got.

Hey, I won’t be lowering the average of any school. 🙂 This brings me a HUGE sigh of relief. The score is good for five years, so I won’t have to worry about it again.

Speaking of standardized testing, it’s been a long road paved with study guides, prep books, and three-ring-binders full of notes and practice problems…

Here are all the standardized tests I’ve taken throughout the years (not including state-mandated testing):

• 10th grade: PSAT, AP European History
• 11th grade: SAT (twice), SAT II Math Level I (twice), SAT II Writing (twice), SAT II US History (twice), AP US History, AP Statistics, AP English Language
• 12th grade: AP English Literature, AP Calculus AB
• College: Blissful, standardized-test-free four years
• Post-college: GMAT (twice)

Now I’m DONE. Standardized tests, we’ve had our time together, but it’s time to part ways. Truly.

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A Lot Like Love

Tonight, I watched A Lot Like Love starring Ashton Kutcher and Amanda Peet.

(spoiler coming up)

Towards the end of the movie, Ashton’s character was talking to his brother about his sad status in life: he’s almost 30, unemployed, and living with his parents. His life looks nothing like how he envisioned it would be seven years ago. He has fallen in love with Amanda’s character, but he has promised himself that he wouldn’t pursue a relationship until “all his ducks are lined up”.

Then his brother said (or signed – he’s deaf) something very wise:

“This is your life. Right now. It doesn’t wait for you to get back on your feet.”

How many of us given up on being happy or fulfilled because something that we expect haven’t happened yet, or because our relationship or career or financial status isn’t where we wanted to be? I’ve been guilty of this – I’ve said, I’ll be happy when XYZ happens. But life doesn’t stop until you get all your ducks in a row. And even after you get your ducks in a row, you’re probably eager to get more ducks to add to your row until you achieve (the illusive state of) total duck domination.

…Anyhow, that line in the movie just made me think about what we put off, what we work for, and how we try to find happiness through achievement or acqusition. Like most PF bloggers, I think I take good care of my finances, but it’s equally important to take care of my personal well-being. Because life doesn’t stop while you’re trying to figure out your relationship or career, or pay down debt, or get into school, or save for a house.

On another note, I don’t know why I’ve been seeing so much wisdom in so pop-culture lately. In the past few posts, I’ve written on Britney Spears, Twilight, and now A Lot Like Love.

Now you can all judge me for my choice of music, book, and movies. But I’d appreciate it if you didn’t. 🙂 Besides, it’s just not as fun tying The Scarlet Letter or Mrs. Dalloway to Some Bigger Picture. It’d seem too much like school.

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What’s your favorite berry?

Blueberry?

Blackberry?

Strawberry?

Raspberry?

Cherry?

As I speak I am munching on a bowl of blueberries ($2-something per box at Trader Joe’s). Balance out the cookies I’ve had earlier, I say. 🙂

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Last Twilight post

Okay – this will be my last Twilight detour, I promise!

(might have spoilers below)

So today I borrowed Twilight and Breaking Dawn from a girlfriend. I thought that Breaking Dawn seemed so convoluted that I didn’t really bother to read all of it, just enough to get the happily-ever-after, vampire-style. As a fast reader and a ruthless skimmer, I pretty quickly went through Twilight‘s 400+ pages.

Stephanie Meyers really hit on a captivating storyline – I was very intrigued by the whole premise of the Edward-Bella (vampire-human) love story. But all the way I keep thinking, I really wish there was more character development (at the risk of sounding like an English teacher), especially in Bella.

I can’t really understand the love story between Bella and Edward – why does she love him so much? How can we tell it’s different from teenage infatuation? She is intoxicated by his physical beauty, and is grateful that he protects her… but what else? The love story seems a little more believable from Edward’s standpoint, only because he’s had 90 years as a vampire to understand himself (and really, who knows about vampires? Meyers’ characterization can be just as right as anybody else’s) – but Bella? I get the chemistry, I get the attraction, I just see Bella’s feelings for Edward as more passionate infatuation than deep, abiding love.

To be fair, although Meyers didn’t go into much of what happens after Bella becomes a vampire, it’s conceivable how her passion for Edward could develop into long-lasting love – whether bound by their experiences as vampires, or that they now have a baby, or that they will grow old stay young and unnaturally beautiful together.

But then again, Romeo and Juliet didn’t have time to develop a great, lasting, deep and abiding love either. Obviously, in fiction, lasting love is not necessary for the makings of a Great Love.

The best love story I’ve seen in a long time, portrayed by Hollywood, actually comes from Up. The first part of the movie is the best – bring tissues. Because you will tear up. (I spent the first 15 minutes of the movie trying to hold back tears because I will not cry in an animated movie!)

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Hair aware and market pricing

I finally got a hair cut this past weekend. It came out to be around $55 with tip, is very reasonable. My stylist, “Holly”, gave me some nice long layers and a saucy flip (though unfortunately only achievable through a professional blow-dry).

She was really chatty and friendly, and somehow the conversation turned to finances and the recession. I asked her about the business model of hair salons – apparently, some stylists work on commissions and receive clients through the salon, others are solely renters who pay the salon a weekly rent and recruit their own clients.

Holly said that she used to work as an assistant stylist in a very upscale salon in a very upscale part of town – where a week’s rent for a salon space is $800! Of course, the cut and treatments at that salon can range from $300 and upwards. On the good days, Holly said, her boss (the main stylist) would net $1,200. A DAY.

Of course, when the recession hit, bookings fell. They noticed that the clients are spacing out their appointments more and more. Instead of coming back for a trim or a new ‘do every 2 months, clients might be waiting until the 4th or 5th month mark. I also imagine that many people would bypass the more expensive treatments like hair color and perms and settle for a simple cut and blow-dry. All of this cut into their profits.

That’s why Holly decided to move to her current salon, which operates on a lower price point (think $50 per cut instead of $400+) and is located in a less swanky area. Her per-cut take is much lower, but the increased sales volume makes up for it.

Another real-life example of market pricing. Love it!

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Twilight, twentysomethings, and the paradox of choice

I’ve never actually read the Twilight series. I skimmed a couple of the books at Barnes & Noble, but never quite dove in. Last night, however, I stayed up until 3AM watching Twilight the movie.

People enjoy Twilight for different reasons. For most, it’s the love story. After all, Bella and Edward make Romeo and Juliet look pedestrian – what’s some familial fighting compared to insatiable bloodlust? Romeo never wanted to desanguinate Juliet!

I think I’ve just discovered why Twilight speaks to me.

Not because of the vampire-human love story. But because of Bella’s certainty. She was certain that she wanted to be with Edward forever and she was certain she would become a vampire to be with him (I didn’t spoil anything, did I?). The best part of the fact that your boyfriend is a vampire? It’s only one decision. You will have to make one monumental decision (to become a vampire!) but afterward you’re done. You’ve decided your life. There is no room for second-guessing. Now all you have to do is to sit back, relax, and enjoy eternity with your undead beloved (and occasionally dabble in internecine vampire fighting).

Twentysomethings today, especially women, have been told from an young age that they can do anything. But the opportunity to do anything is, on the flip side, the pressure to do everything. There are no certainties about one’s path. No matter what decision you make, there will always be more. Like other young adults, I appreciate the freedom I have – I do. But sometimes the plethora of choices can prove exhausting.

This is the situation Barry Schwartz described in the Paradox of Choice (great video of Schwartz’s talk at the 2007 TED conference): choice is supposed to be the underpinning of individual automony and happiness, but having too many choices can cause 1. analysis paralysis and 2. dissatisfaction with the chioce you’ve made (it’s easy to imagine that you could’ve made a different choice that would be better). 

Life is a matter of choice on all fronts – consumer choices, career, family, relationships. This is what 20s are like. You’re trying to get ahead, to be prepared, to make the best choices to set yourself up for happiness and success at home and at work. There are so many decisions, and by extension, so much room for second-guessing.

Sometimes I feel energized by the possibilities that are laid out before me. Other times, I find myself wishing for a little bit more certainty. It’s a feeling I expect I’ll have to work through – for the rest of my twenties and beyond. After all, no vampire is coming for this girl.

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So excited I can’t sleep

*sung to tone of Britney Spears’ “(You Drive Me) Crazy”*

401(K), I’m so into you
You got that tax deferral, what can I do
401(K), for you I waited a year
Now I know that my tax vehicle is here

You drive me to savings
I just can’t sleep
I’m so excited, I’m in too deep

Ohh…crazy, but it feels alright
Asset allocation keeps me up all night

Tell me, you’re so into me
That my account is safe from Uncle Sam’s reach
Tell me stock appreciation is true
That I’m not wasting my money on you

401(K) you mean so much more
More than any tax deferral I’ve had before!

T-14 days until 401(K) kicks in!

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My perfect lady apartment

(Thanks to my friend “Jane”, I’ve decided to christen my new place The Perfect Lady Apartment).

This is the first time I’ve ever lived on my own, and, I love it! I had thought that I’d get lonely, and I’ve had my moments of wouldn’t-it-be-nice-if-my-friends-were-around, but mostly I appreciate the increased privacy and the additional space that come with living alone.

I’ve also come to realize how much I enjoy living in an atypical, smaller, apartment complex. I love that my landlord and his family live right next to me, and we actually interact! My landlord even spent an entire Saturday morning helping me move (again, Nicest Landlord Alive).

It also helps that all utilities and wireless internet are included in the rent. I am paying $950 a month (which includes parking – worked out a deal where I pay an extra $50 a month for designated, off-street parking). So all in all, I am paying around $150 more for this charming gem of a studio than for my share of a two-bedroom apartment.

That is a price I’m more than happy to pay. 🙂

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