Archive for the ‘Budget’ Category

By the numbers

  • $434 = Federal and State taxes saved per pay period   **at first I thought my net pay should be higher, but then I remembered that Social Security and Medicare taxes are not affected by deductions in taxable income
  • $4783 = taxes saved for 2009 if I max out 401K (~$434 per pay period x 11 pay periods)
  • $1,000 = make-up tax payment that I will NOT have to pay come April 2010
  • $1,700 = what I have left to spend per month
  • $1,200 = absolute fixed costs (rent, insurance, student loan)
  • $500 = what I have to spend on everything else (food, gas, car repairs, misc., etc.)
  • $0 = anticipated leftover at the end of the month

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The world may be scared of swine H1N1 flu, but I’ve been struck down by a heady case of want-to-spend-money-itis.

Sounds serious? It is!

Here are my symptoms:

1. Eating out with increasing frequency (lunches, dinners, brunches).
2. Shopping on a weeknight. My haul included a silk blouse and a pair of Cole Haans. In my defense, they were on sale.
3. Paying double rent for a couple of weeks in June due to my upcoming apartment move.
4. Being overly influenced by Apartmenttherapy (planning to buy furniture from Craigslist or flea markets, but that still costs money!)
5. Booking a massage for CB and I for Memorial Day weekend ($$).
6. Planning a vacation to Vegas and the Grand Canyon ($$$).
7. Trying to hold back from purchases I want to make, all in the $100+ range.

My partner in crime enabler(!), Revanche, insists on showing me pictures of cute dresses that should NOT be in my budget right now.

Basically, I’m spending a lot of money. Despite the pf blogsophere’s general insistence to the contrary, spending that money does make me happy. Good food and a gorgeous new apartment and new dresses and vacations make me happy.

The problem is, my wallet just can’t sustain such prolonged periods of happiness!

I blame this illness on the summer.

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After a few weeks of looking for love in all the wrong (and scary, and run-down, and too-expensive) places, I finally met an apartment that’s right for me. I hope it feels the same way, because I’m tired of looking and I’m ready to commit!

Why this studio is a gem of an apartment:

1. Rent. The rent is $900-$950 (landlord indicated willingness to drop $50 from list price of $950 for the “right tenant”) for a studio with a full-sized kitchen and bathroom. Best of all, the rent includes ALL utilities and laundry.

2. Natural light. Lots of natural light courtesy of huge windows in the main room and the kitchen. Out of the 4 walls in the main room, two have windows.

3. Six-month lease. YES! I have finally found the elusive 6-month lease apartment. And I didn’t have to plead and cajole for the landlord to even consider a 6-month, as was my experience with most other places I’ve seen.

4. Size. The studio is a nice ~400 sq. feet. The main room is a bit small, but it’s enough for just me. Ultimately I didn’t want to pay the premium for the extra space of a 1-bedroom.

5. Location. Close to work and close to shops, a movie theater, and an entire restaurant district. Also conveniently located close (but not too close) to the freeway.

6. Hardwood floors! Beautifully finished hardwood floors stained a glossy espresso with a just hint of red. I’ve read Apartment Therapy – all the stylish homes have hardwood floors!

A couple of things that are less-than-perfect but that I decided I can live with:

1. No designated parking. There’s enough street parking that I’m okay with the lack of a designated spot. The landlord did say that I can pull up into the driveway for the night if I can’t find parking on the street.

2. Not a secured access building. The studio is part of a 4-plex and is in a reasonably safe neighborhood that I feel comfortable not being behind a gate.

3. Small Tiny closet. Fortunately, there’s a linen closet that provides additional storage. ‘Tis okay – this will be a chance for me to edit my closet even more.

Also, I basically met the landlord’s entire family (wife, daughters, and dog) during my visit to the apartment. They were all extremely nice and warm. It was weird (I’m used to having a Faceless Random LLC as the landlord), but in a delightful way.

I’m going to fax in my application tomorrow. Please cross your fingers for me.

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Are you a transumer? Don’t worry, this is the first time I’ve heard of the term. “Transumer” refers to a “consumer in transit”, and apparently, more and more people are joining the transformation.

MP Dunleavey wrote an interesting post on MSN Money (an aside – I would love to write for MSN Money. Just, um, throwing that out there if any MSN Money folks are reading! 😉 ) on the ownership model vs. the “transumerism” model.

ABC News also had an interview on the subject (it’s a 6 minute video – worth watching).

From MP’s article:

The transumer philosophy is largely based on a “leasing lifestyle,” according to an analysis by Trendwatching.com, a global trend-spotting company based in the Netherlands. Rather than spending your money on individual things, which you then have to keep (suddenly an old-fashioned idea), you purchase access to an array of objects and experiences. It can save time as well as cash: The more you own, the more you have to worry about, maintain and upgrade.

I’m of two minds on this trend. There are some things that I rent, but others – I want to own!

Car: I definitely love owning my car – it’s paid off, it’s mine. I don’t have to worry about going over the mileage limit, or getting out of my lease if I have to move, or fixing the small dent on the side of my door.

Housing: At the same time, I love renting right now. I am not ready to assume hundreds of thousands of dollars worth of debt at this point in my life, so I will happily rent until I am financially and emotionally ready for the responsibilities of home ownership.

Purses: As for a bag – while I admire the ingenuity of companies such as Bag, Borrow, or Steal, I have to say that I would get more enjoyment out of a bag that I OWN, as opposed to one that is only mine for a week or two. I’d rather save my money and splurge on one bag that I know I will love (and have for years), rather than have to give back my bag at the end of the weekend.

Books/Movies: I like borrowing books and movies. But the books and movies that I really love? I want to own.

Another thing I realized is that in the ABC interview, there is a lot of emphasis on “not giving up your lifestyle, but living on a budget.” Is it just me, or does this sound an awful a lot like the monthly mentality? Just because you can “afford” to make a payment of XYZ every month doesn’t mean that it’s a wise financial decision.

What do you think of this trend? Are you a transumer?

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After a few weekends of searching (fruitlessly) for apartments that will take a 6-month lease*, combined with my general satisfaction with my landlord/apartment manager, love for my area, and the great price that’s allowed me to save at a steady clip over the past two years…

I might be doing the previously unthinkable. I might decide to stay in my current apartment with a new roommate instead of moving out on my own.

Again, this is a case of Need vs. Want:

  • I WANT to move out in a newer apartment in a just-as-convenient neighborhood.
  • I NEED to keep my rent at a reasonable rate and maintain maximum flexibility (look for some posts on travel coming up).

Besides, I know that once I move into a nicer place with newer appliances/fixtures and bigger closets – it’ll be that much harder to go back to my current apartment standards. Apartment inflation, ya know. 😉

I’m going to think on this a little bit more – the idea just popped into my head during the drive home (before my car started spewing STEAM out of the ENGINE). If after 2-3 days I still am leaning towards the staying option, I’m going to talk to my manager to understand what would be the terms of agreement if a new person moves in, and then get set to put up an ad soliciting prospective roommates.

*There may be a situation where I can take over a lease and then go month-to-month very quickly – I’ll call tomorrow to get the details, but I’m trying not to get my hopes up.

You got advice? Share your wisdom in the comments!

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I’ve decided that a less-than-one-year lease is non-negotiable. I just don’t want to lock myself into a lease until May or June next year. If all goes well, I will be traveling abroad come this time next year!

So while the rental market is still quite soft, the shorter lease requirement has eliminated a lot of prospective apartments. I am going to see a couple more apartments this / next weekend.

  • $1,200 studio w/ 6 month lease. I’m going to try to negotiate them down to $1,100… seeing as they offered a $1,000 “special” for one-year leases.
  • $1,150 1 bedroom (double deposit required for 6 month leases). It’d take me $3,500 just to move in!
  • $850 studio w/ kitchenette with mini-fridge, street parking only. I really want a designated parking spot, so I’m not sure if this will be a deal-breaker for me. But the price is right…
  • $1,045 studio w/ mini-fridge. 10-month lease.
  • $1,100 1 bedroom. 9-month lease.

I really would prefer too keep my rent below $1,000. But I don’t know if I can do it – I might be pickier than I thought I’d be (not about the size, per se, but more about how new/renovated the unit is and the “feel” I get from the location).

And I’m loving Google Street View in my search – gives me a quick snapshot of what the immediate surroundings look like.

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For several months there, I’ve been able to save $2,000 per month (over 50% of my net income).

Those days are over for a while. I’ve made a conscious decision to spend more money on the things that are important to me (of course, a less charitable characterization would be that I’m inflating my lifestyle!). Namely, they are:

1. My own place. Living alone will definitely be a luxury – I pay $750 to share a 2 bedroom apartment, but a studio or a 1 bedroom will cost me $1,000+. But I’m really excited in the apartment search, and it’ll be so nice to finally experience living on my own.

2. Dance classes. For the longest time I’ve put off taking salsa and tango because I thought the money is better served going into my emergency fund. But dance is just about the only form of exercise I can enjoy doing for long periods of time (unlike, say, the treadmill, when every. single. minute. crawls at a snail’s pace.), so I view this as an investment in my health.

3. Fun + travel. I’m going to try to squeeze in more weekend trips. Despite having lived in California for years, I really haven’t seem much of the area at all. I’ve been to more COUNTRIES than I have to the different locales in the Golden State. This oversight must be remedied.

4. Applications. I am gearing up to retake my test and apply to graduate school. School visits, interviews, application fees, etc. etc. all add up. But that’s okay. I’m not going to worry about that expenditure too much. Money that must be spent, must be spent.

For now, I shall put out of my head the $100K tuition bill. I hope, if I get a good enough GMAT score, I can ‘score’ some scholarship money. Too bad there’s no Foundation for the Advancement of Bad Puns! Har har har.

At the end of the day, like Mom said, money’s meant to be spent on the things that matter.

Speaking of Mom, I’d like to give my parents a trip to Santa Barbara or Solvang (perhaps this summer for Dad’s birthday?). My uncle said that my mom has been telling all her relatives about my Vegas present to her. That makes me happy, because that’s how I know she really appreciated the gift (or more importantly, the sentiment).

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I think I found it (?)

Update: The apartment rented out before I can get my application in. Oh well. Just means the next one will be even more perfect. Right?

An upper unit studio on a sunny, tree-lined street. Kitchen (with refrigerator!), bathroom, good-sized closets, designated underground parking and a secured access building. $895 rent + $995 deposit.

The only things it doesn’t have are 1. hardwood floors (which, I know, is by no means a need, only a want! Carpet’s cozier, but I’ve always thought hardwood floors are more… grown-up?), and 2. shorter leases (the management website said 1-year leases only).

But it can’t hurt to ask, so I’ll call them tomorrow to try to negotiate a 9 month lease.

If I can’t, I might have to continue with my search… but I do hope we can work something out. The good thing is that I think I’ve narrowed down the general area (within 3-4 blocks) where I’m searching. So even if this studio isn’t meant for me, I’m reasonably confident that something else will open up.

It was pretty fun to visit apartments on the weekends. But I can only imagine how much more detail-obsessed and nervous I would be if I were looking for a place to BUY.

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1. The situation:

Saw some pictures of a 1 bedroom / 1 bath – fabulous location, awesome amenities including balconies and fitness center / spa, gorgeous building with gated entry and underground parking and tons of space (the ad said huge closets!).

2. The issue: The price (and the one-year lease).

The cheapest 1bed/1bath in that complex starts at $1,250, and that’s after amortizing the one-month free deal. I may be able to negotiate a 6-month rent, but that’d probably include a $50-$100/month premium (which would put it really out of my budget).

3. The considerations:

$1,250 is actually a really good price – I’ve seen similar places go for $1,500 in the same area (do I sound as if I’m rationalizing?). But – $1,250 still a big fixed expense. Another consideration – do I really need all those wonderful features such as the fitness center, balconies, spa room, etc.? I’ve gone without granite counters in my kitchen so far, surely I can do so for a while longer. Must balance need vs. want…

4. The budget:

My current budget for the new place is $1,000 for rent and a six-month lease. I may be able to “afford” up to $1,500 in rent and still save some, but I’m a huge fan of keeping my fixed expenses low at this point in my life.

5. The question: Can I afford to increase my budget and pay more to live in a nicer apartment?

6. The real questions (thanks to Single Ma!):

  • Will this purchase delay progress towards my financial goals?  YES
  • Will this purchase result in consumer debt?  NO
  • Will I regret this purchase in a month?  I don’t think so (I’ll be too busy enjoying my balcony!) But if I lose my job, I’d really rather not have such an expensive place.

7. The answer:

I need to think about this. If I decide that I can’t afford it, I probably won’t even visit this building (or similar ones) in person. No use falling in love with an apartment that’s out of my budget!

*Don’t you love how at the end of my 7 steps I haven’t really answered my question? Heehee.

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After almost 2 years of living with a roommate, it’s time to move on to my own apartment. I think I lucked out into a great roommate situation (no horror stories here), but she’s moving out, and I really don’t want to live with a stranger.

After hunting down craigslist ads for a bit, I’m checking out a couple of prospects this weekend. One is a studio (~$900), and one is a 1 bedroom/1 bathroom (~$1,000).

I’m leaning towards the larger place, even though it’ll be $100 more than the studio. Not very cash-conscious of me, but, space! Isn’t that worth something?

Another selling point is that the 1 bedroom/1 bathroom offers a 6-month lease. I’ve enjoyed being month-to-month at my current apartment, (and I’m not super confident in the job situation) so I think a shorter lease is better.

Moving  is a strictly cash-outflow process (with the overlapping rent, security deposit, credit check / application fees, etc.). Also, try as I might, I probably would NOT be able to curb my urge to decorate. Years of following Apartmenttherapy.com has finally done me in!

Cash savings won’t be able to grow at its previous clip…

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