My first goal for 2008 is to pay off the credit cards. I think this can be done in February:
Card #1: $0 (21%)
Card #2: $0
Card #3: $0
Card #4: $0
Card #5: $0 (was $3,400, need to close this account)
Card #6: $2,900 (was $6,600)
Card #7: $1,800 (was $2,800)
Card #8: $3,700 (was $4,200)
Total: $8,400
I've now paid off $13,900 from my highest balance of $22,200. AND this is the first time my credit cards have been under five figures in over a year. Hooray for four figures!
Thursday, January 31, 2008
Wednesday, January 30, 2008
My 529 & Adoption
I have a 529 even though I don't have any kids. Today I put in $30.63 to bump the 529 to an even $100. That $100 is not a lot of money, but that 529 account means a whole lot to me, as does putting that small amount of money in.
See, I plan on adopting someday. There are lots of reasons, some medical, some emotional. For my already interracial family, I expect a lot of issues in the process. I just don't want money to be one of them.
From what I have read, adoption (domestic or abroad) sounds a lot like online dating. You put in a profile with isolated details, and you hope one of them speaks to an administrator or birth mother. I believe that if I can get my 529 up to 5K or 10K, that number that would show to the reader my dedication to my future child in some concrete, on-paper way.
(photo by subramanyan)
Tuesday, January 29, 2008
I Want My W-2s.
I just finished up the non-W2 parts of my taxes. I scrounged up the interest from my zillion bank accounts. I contemplated the interest I paid to my ex, Sallie Mae, but could not deduct it. No capital gains/losses. No mortgage interest. Not enough charity to itemize. Business expenses and 1099s. No kids. There you go.
I'm expecting a 5K income tax refund. That's a long story and involves a job switch, an LLC, and a SEP-IRA. I want that money now! I ordered TurboTax with e-file, and I am ready to go. Now I just need my W-2s, which must be mailed out Thursday (two days to go!).
I'm expecting a 5K income tax refund. That's a long story and involves a job switch, an LLC, and a SEP-IRA. I want that money now! I ordered TurboTax with e-file, and I am ready to go. Now I just need my W-2s, which must be mailed out Thursday (two days to go!).
No More Ads
I have earned $0.98 from the ads on this blog since I started. But, you know what, I don't need that dollar. And I don't really want that dollar.
I was inspired by Well-Heeled today. She doesn't take ads, and that's not the point of her blog. It's not the point of mine either. Some bloggers can make a mint, but that's not what I want.
I started this blog so I would have accountability to myself and so I could talk in some small way to all the other PF bloggers whose opinions I respect. So, no ads, and free commenting. The point of this blog was dialogue. Hopefully that, and the smart choices I will make with my money, will be worth more than one dollar.
I was inspired by Well-Heeled today. She doesn't take ads, and that's not the point of her blog. It's not the point of mine either. Some bloggers can make a mint, but that's not what I want.
I started this blog so I would have accountability to myself and so I could talk in some small way to all the other PF bloggers whose opinions I respect. So, no ads, and free commenting. The point of this blog was dialogue. Hopefully that, and the smart choices I will make with my money, will be worth more than one dollar.
Sunday, January 27, 2008
Bye, SmartMoney
SmartMoney, it is time for us to break up. I got you last year in an Amazon special for $5/year. You weren't even worth that.
Usually you talked about margin trading at Ameritrade, Vanguard's South Korean portfolio manager--you know all those things that the Boglehead book told me to ignore. But in August, your headline was "Living Debt-Free." I was inspired.
SmartMoney, you are not very smart. Now, I was expecting something like why your mortgage is important in the AMT bracket, how you can leverage your awesome credit to get 0% financing on anything, etc. But no. This article was not only for the poor, it was for the dumb. And it was not even about living debt free. This "article" is a chart. The chart had four columns.
UNDER 40 (15 other productive years? HELLO?)
target debt load at 40: 1.5 times annual income
"You are probably buying a home and minivan, so get rid of credit card balances. When shopping for a mortgage and student loan consolidation, leave enough cash flow the save about 12% of your income." Who the heck is reading this magazine about minutiae in mutual funds and has to think about whether they can save 12% AT 40!!!!
40-49
target debt load at 49: equal to annual income
Get your student loan and mortgage to manageable rates, and dont upsize your home. "Try to drive your car for one year after it is paid off, and then apply that payment to the highest interest debt." TRY TO DRIVE YOUR CAR ONE YEAR WHEN YOU HIT 40??? WORST ADVICE EVER. And your "debt-free" student loan is still kicking around at 50?
50-59
target debt load at 59: half annual income
Pay off your home-equity line of credit (guess you needed that for your new cars every year) plan to get rid of the mortgage, you may need to downsize (about time!). Don't help your kids with college unless your savings are plentiful.
Well, I'm glad that new car worked out so great.
60+
target debt load at retirement: debt free
Pay off your mortgage and other debt. Think about extending your mortgage for lower payments if your savings are low. (WANT TO LOSE THE HOUSE AT 80?).
So, now SmartMoney my subscription is expiring, and I can't say I'm sad. SmartMoney, you are just not smart enough for me. Sorry.
Usually you talked about margin trading at Ameritrade, Vanguard's South Korean portfolio manager--you know all those things that the Boglehead book told me to ignore. But in August, your headline was "Living Debt-Free." I was inspired.
SmartMoney, you are not very smart. Now, I was expecting something like why your mortgage is important in the AMT bracket, how you can leverage your awesome credit to get 0% financing on anything, etc. But no. This article was not only for the poor, it was for the dumb. And it was not even about living debt free. This "article" is a chart. The chart had four columns.
UNDER 40 (15 other productive years? HELLO?)
target debt load at 40: 1.5 times annual income
"You are probably buying a home and minivan, so get rid of credit card balances. When shopping for a mortgage and student loan consolidation, leave enough cash flow the save about 12% of your income." Who the heck is reading this magazine about minutiae in mutual funds and has to think about whether they can save 12% AT 40!!!!
40-49
target debt load at 49: equal to annual income
Get your student loan and mortgage to manageable rates, and dont upsize your home. "Try to drive your car for one year after it is paid off, and then apply that payment to the highest interest debt." TRY TO DRIVE YOUR CAR ONE YEAR WHEN YOU HIT 40??? WORST ADVICE EVER. And your "debt-free" student loan is still kicking around at 50?
50-59
target debt load at 59: half annual income
Pay off your home-equity line of credit (guess you needed that for your new cars every year) plan to get rid of the mortgage, you may need to downsize (about time!). Don't help your kids with college unless your savings are plentiful.
Well, I'm glad that new car worked out so great.
60+
target debt load at retirement: debt free
Pay off your mortgage and other debt. Think about extending your mortgage for lower payments if your savings are low. (WANT TO LOSE THE HOUSE AT 80?).
So, now SmartMoney my subscription is expiring, and I can't say I'm sad. SmartMoney, you are just not smart enough for me. Sorry.
Saturday, January 26, 2008
15K in Retirement
I went to a baby shower for a friend of a friend. Now that I think about it, I'm pretty sure it was just fishing for gifts. I went anyway. This was a group of mostly teachers, mostly married, mostly with kids, mostly in their 30s. Mostly they talked about babies and husbands. It's not my usual crowd, but I like to shake it up.
One of the ladies was talking about how with her husband's new 401K match, they had managed to save 15K in retirement. She bragged about it! She was in her 30s, had at least one kid, and was married to another teacher (I think), and she was bragging about 15K in her retirement.
I was (silently) horrified, but the other ladies seemed impressed. Maybe they were just being polite, hard to say.
One of the ladies was talking about how with her husband's new 401K match, they had managed to save 15K in retirement. She bragged about it! She was in her 30s, had at least one kid, and was married to another teacher (I think), and she was bragging about 15K in her retirement.
I was (silently) horrified, but the other ladies seemed impressed. Maybe they were just being polite, hard to say.
No Breaks For Me
My selfish, vindictive ex, Sallie Mae, decided to send me a recap of the "qualified" interest I payed to my student loan at the beginning of the year. I'm glad she's out of my life, because I wouldn't be shocked if she lost the last six months of paperwork. Of course, I don't get to deduct that interest because I make too much money, because I am too successful.
I also make too much money for the $900, $600, $500 or whatever amount it is today that Bush plans to stimulate everyone else with. That's OK, I didn't really expect anything like that.
It really sucks to get taxed through the nose just because you are a single, childless renter. Any of those government-approved life changes would save me bundles of money. I need an accountant.
I also make too much money for the $900, $600, $500 or whatever amount it is today that Bush plans to stimulate everyone else with. That's OK, I didn't really expect anything like that.
It really sucks to get taxed through the nose just because you are a single, childless renter. Any of those government-approved life changes would save me bundles of money. I need an accountant.
Thursday, January 24, 2008
Hooray for Freelance!
Last year, freelance work only made up a teensy part of my income. This week, I have arranged several projects. If everything goes to plan, freelance will make even more than my day job in February. Whoa.
That means I really need an accountant. It also means that my goals are even more in reach.
All this from networking! From going to all those events and talking to all the people until I eventually talked to the right people, or the friends of the right people.
That means I really need an accountant. It also means that my goals are even more in reach.
All this from networking! From going to all those events and talking to all the people until I eventually talked to the right people, or the friends of the right people.
Tuesday, January 22, 2008
Scaling Back My Lifestyle: Netflix
Let me explain why Netflix ($18/mo) is a good deal for me.
On my last cross-country move, I sold or freecycled my DVD collection, which occupied a shelf in my bookshelf and burdened me when it was time to move. I watched maybe 3-4 of those DVDs more than once. My fiance is the same way! So, we sold Buffy Seasons 1 and 2. We freecycled Dancer in the Dark.
In Larry Winget's new book, he says poor people have huge collections of DVDs and CDs. I totally agree, and that will not be me.
So, we agreed (1) not to buy anymore movies and (2) not to go to the movies and just to use Netflix. (I also used Blockbuster for a while, but that's a whole separate post.) Netflix lets us watch half a movie and then just send it back. Netflix lets us watch a bazillion TV shows on demand. Netflix is convenient and super-fast. I mail in the movie in the morning, from work, and they get it that afternoon.
We did buy a couple movies, three to be exact, in the last six months. This small collection is much less of a money-suck than the old one, and it's movies we know we love because we Netflixed them first.
On my last cross-country move, I sold or freecycled my DVD collection, which occupied a shelf in my bookshelf and burdened me when it was time to move. I watched maybe 3-4 of those DVDs more than once. My fiance is the same way! So, we sold Buffy Seasons 1 and 2. We freecycled Dancer in the Dark.
In Larry Winget's new book, he says poor people have huge collections of DVDs and CDs. I totally agree, and that will not be me.
So, we agreed (1) not to buy anymore movies and (2) not to go to the movies and just to use Netflix. (I also used Blockbuster for a while, but that's a whole separate post.) Netflix lets us watch half a movie and then just send it back. Netflix lets us watch a bazillion TV shows on demand. Netflix is convenient and super-fast. I mail in the movie in the morning, from work, and they get it that afternoon.
We did buy a couple movies, three to be exact, in the last six months. This small collection is much less of a money-suck than the old one, and it's movies we know we love because we Netflixed them first.
Monday, January 21, 2008
Buying a House: Not For Me (Yet)
My fiance talked me into going to open houses on Sunday. He picked a 300K house, a 500K house, and an 800K house. He isn't set on buying, he just wanted to look. These houses were more or less the same in size and amenities, and the only difference was location. (He picked houses we could "grow into.") Boy does location matter!
My current commute is 20 minutes, and half of that is walking from the garage, which is good for me. The 300K house would add 20-30 mins onto my commute each way. No way. I know a lot of people commute much further than that for school districts or granite or some such nonsense. I would rather live small and not commute.
If we were buying right now, the 500K house would be much more than we need, AND it's in a neighborhood that is not ideal for kids. So, it doesn't work now, and it won't work in the future. The 800K house would be good if a bit much now and later, but it's 800K!!!
My current condo (which I rent below market) is worth about 250K, but it won't work at all with kids. Clearly, if we ever have kids, something will have to change, and we'll have to learn a lot more about the places we could buy. It looks like we will need at least 500K to get into a kid-friendly neighborhood with really short commute--the commute is the expensive amenity.
For now, I'm even happier with my rented condo after seeing those houses, and I hope I can stay here for years to come.
My current commute is 20 minutes, and half of that is walking from the garage, which is good for me. The 300K house would add 20-30 mins onto my commute each way. No way. I know a lot of people commute much further than that for school districts or granite or some such nonsense. I would rather live small and not commute.
If we were buying right now, the 500K house would be much more than we need, AND it's in a neighborhood that is not ideal for kids. So, it doesn't work now, and it won't work in the future. The 800K house would be good if a bit much now and later, but it's 800K!!!
My current condo (which I rent below market) is worth about 250K, but it won't work at all with kids. Clearly, if we ever have kids, something will have to change, and we'll have to learn a lot more about the places we could buy. It looks like we will need at least 500K to get into a kid-friendly neighborhood with really short commute--the commute is the expensive amenity.
For now, I'm even happier with my rented condo after seeing those houses, and I hope I can stay here for years to come.
Sunday, January 20, 2008
I Need an Accountant.
I love taxes. If I weren't in my job I love, I would do taxes. My taxes have never exactly been a walk in the park, but in 2008, it's time to face the facts that I just don't know enough.
I can handle 2007. I started an LLC, I filed my state franchise tax. I paid my estimated taxes. I deducted my small business expenses, my milage, my SEP-IRA that I set up myself, the legal costs. And that is where my skills end.
I don't know what meals (if any) I can deduct. I don't know if I can deduct a bazillion other things that I might be able to deduct. The real kicker is this. I need a solo K because the SEP-IRA was just not right for me. I needed to sock away ALL my extra job income (100% up to over 40K), not just the 25% allowed in the SEP-IRA.
I know now that I should have done a solo K. The SEP-IRA was not the right choice. It wasn't bad, but it wasn't the right choice. And now I need to roll it over and I have no idea if that is even a good idea. So, a new goal for 2008. I need an accountant.
I can handle 2007. I started an LLC, I filed my state franchise tax. I paid my estimated taxes. I deducted my small business expenses, my milage, my SEP-IRA that I set up myself, the legal costs. And that is where my skills end.
I don't know what meals (if any) I can deduct. I don't know if I can deduct a bazillion other things that I might be able to deduct. The real kicker is this. I need a solo K because the SEP-IRA was just not right for me. I needed to sock away ALL my extra job income (100% up to over 40K), not just the 25% allowed in the SEP-IRA.
I know now that I should have done a solo K. The SEP-IRA was not the right choice. It wasn't bad, but it wasn't the right choice. And now I need to roll it over and I have no idea if that is even a good idea. So, a new goal for 2008. I need an accountant.
Thursday, January 17, 2008
Still on the Clothes Wagon
This week I swore to the blogosphere that I was NOT BUYING CLOTHES FOR SIX MONTHS. I am with Well-Heeled. This left me with a dilemma. Are shoes clothes? I concluded that shoes are clothes and that, if anything, I need shoes even less than I need clothes.
I made a plan, and I thought about what I actually wear in my incredibly expensive wardrobe. I wear about half suits, about half suit-like separates. I overbought cute work skirts and tops. I underbought work pants, and I hate most of the pants I did buy because of my body type.
So, I went to the mall, where I bought three pair of pants in various colors that actually could accommodate some junk in the trunk. $140. For one last hurrah, I bought these ugly shoes on Amazon for the summer. $20.
I estimated I would need $300 to start the clothes no-buy. I guess I have $140 left. I am going to round that up to $200 for six whole months in case I really do need something I have left out (SEQUINED PUMPS ARE NOT A NEED). I am still on wagon. We can do it ladies!!!
Renting at 27 Below Market. So Why Is It Sad?
Tomorrow I am extending my lease until May 2009. With the wedding, there is no way I can save a down payment before then. I'm not even sure I will buy then. I have no idea what neighborhood or house is right for me--a lot can change in five years.
My rent is way below market. It covers exactly (1) lost interest on the house at 4.5%, with a conservative valuation (2) property taxes and (3) condo fees (4) plus $100/month extra. It's a sweet deal for me because my landlord lives abroad, and I do all the repairs and deduct it. Luckily, nothing big has come up yet.
I have a friend closing next week on a starter house. $150K in the burbs, 80/10 financing. I would never live in this house. But I feel a twinge of jealously that she owns a house and I will be renting at 27!
Renting at 27. I KNOW it is the mathematically correct decision. I know my money will earn more than flat real estate around here. I know that I won't have to pay closing and realtors and special assessments and do the property tax appeal. I know that I will be free to move. But renting at 27 still feels like failure somehow.
~Dog
Tuesday, January 15, 2008
Scaling Back my Lifestyle: Clothes
In my work, appearance matters. I have spent thousands on clothes. Some highlights:
* a $750 briefcase
* a $500 purse AND a $400 purse (couldn't decide)
* a $2,500 suit
I use these things all the time. And when I see that briefcase, which is every day, I think: Lawd, that briefcase was expensive. That is followed by either "I'm so glad I can afford such nice things!" or "That's two car payments, FOOL!"
I am done beating myself up about my clothes. I need a couple more things for work, maybe $300 worth. I am going to lay out my outfits, plan to spend that $300, and then I am with Well-Heeled. I am NOT BUYING CLOTHES FOR SIX MONTHS. Gulp.
Even if I can't stick to this, I should be able to come awfully close.
* a $750 briefcase
* a $500 purse AND a $400 purse (couldn't decide)
* a $2,500 suit
I use these things all the time. And when I see that briefcase, which is every day, I think: Lawd, that briefcase was expensive. That is followed by either "I'm so glad I can afford such nice things!" or "That's two car payments, FOOL!"
I am done beating myself up about my clothes. I need a couple more things for work, maybe $300 worth. I am going to lay out my outfits, plan to spend that $300, and then I am with Well-Heeled. I am NOT BUYING CLOTHES FOR SIX MONTHS. Gulp.
Even if I can't stick to this, I should be able to come awfully close.
My Current Bank Setup
I'm not a rate chaser, mostly because I have no money. But at one point, I had eight bank accounts, each with a teensy bit of money. This was from sign-up bonuses, from quite a bit of moving, and from just sloppy organization. Recently, I dropped Bank of America (HATE!), I dropped Emigrant Direct (the same as ING), I dropped Everbank (HATE!), and I dropped Wachovia (not convenient to me).
Now, I have the following set-up:
FIDELITY Most of my cash is my Fidelity federal tax-free money market account (FTEXX). Texas has no state income taxes (yay!); federal tax fund is right for me. At my scary tax rate, it earned the equivalent of 4.98% last year. I think it has some sort of ATM, but I don't really want or need that.
I got a money market at first because my landlord takes forever to cash checks, sometimes two months! It pains me to lose interest that long. Now that I write that check out of money market, he can take his time! But since I've had the money market, I've really been impressed with Fidelity's service and billpay.
Pros:
* incredibly fast billpay, they must beam it over
* great interest rate and easier taxes
* easy to manage with my brokerage and 401(k)
* connected to the Fidelity Visa for 1.5% cash rewards. Yay!
Cons:
* checks have to be over $500
* can't get local cash (possibly my own restriction).
* can't hook up to Paypal
WASHINGTON MUTUAL I have a Washington Mutual account for my direct deposit and for local cash.
Pros:
* local, I pass one every day
* easy to get cash
* easy to ACH (Paypal and direct deposits).
Cons:
* low interest rate
* slow billpay (takes 5 days to clear, usually)
ING I also have an ING account because, well, I like ING, and I wanted an "invisible" account with a couple hundred bucks.
Pros:
* account I don't check much or think about much (emergency reserves)
* fantastic service
* decent interest rate
* takes a few days to get the money (it is an emergency account)
HSBC HSBC is fantastic abroad, especially in Asia. I don't keep much money in that account (currently $3.18); I take it out when I am done traveling. I have found HSBC ATMs in the strangest places...
Pros:
* good for travel
Cons:
* not local, no interest
I am about to have more cash than ever when I start saving for the wedding. I was planning to put it in Fidelity, but that is my functional account, so ING might be a better choice until I actually need to get to the money. Hmmm....
Now, I have the following set-up:
FIDELITY Most of my cash is my Fidelity federal tax-free money market account (FTEXX). Texas has no state income taxes (yay!); federal tax fund is right for me. At my scary tax rate, it earned the equivalent of 4.98% last year. I think it has some sort of ATM, but I don't really want or need that.
I got a money market at first because my landlord takes forever to cash checks, sometimes two months! It pains me to lose interest that long. Now that I write that check out of money market, he can take his time! But since I've had the money market, I've really been impressed with Fidelity's service and billpay.
Pros:
* incredibly fast billpay, they must beam it over
* great interest rate and easier taxes
* easy to manage with my brokerage and 401(k)
* connected to the Fidelity Visa for 1.5% cash rewards. Yay!
Cons:
* checks have to be over $500
* can't get local cash (possibly my own restriction).
* can't hook up to Paypal
WASHINGTON MUTUAL I have a Washington Mutual account for my direct deposit and for local cash.
Pros:
* local, I pass one every day
* easy to get cash
* easy to ACH (Paypal and direct deposits).
Cons:
* low interest rate
* slow billpay (takes 5 days to clear, usually)
ING I also have an ING account because, well, I like ING, and I wanted an "invisible" account with a couple hundred bucks.
Pros:
* account I don't check much or think about much (emergency reserves)
* fantastic service
* decent interest rate
* takes a few days to get the money (it is an emergency account)
HSBC HSBC is fantastic abroad, especially in Asia. I don't keep much money in that account (currently $3.18); I take it out when I am done traveling. I have found HSBC ATMs in the strangest places...
Pros:
* good for travel
Cons:
* not local, no interest
I am about to have more cash than ever when I start saving for the wedding. I was planning to put it in Fidelity, but that is my functional account, so ING might be a better choice until I actually need to get to the money. Hmmm....
Link Love & Why I Started Blogging
I have decided to add a sidebar of PF blogs I read. This is just my RSS reader, really. This isn't based on blogger politics or anything like that. Right now, they focus on debt. Hopefully they will start changing to taxes and investing more.
The bloggers who I consider my inspiration are:
Tricia, the first PF blog I read after her juicy write-up in the New York Times.
From there I found Jonathan, whose practical skills helped me get my money done.
I most relate to Single Ma and to Madame X. I share their approach and many of their challenges. I feel like I am progressing right behind them.
But the blogger that convinced me that blogging can have real impact on your life is JW. His blog gets an insane amount of comments, with people cheering him on and people attempting to upbraid him. JW's courage at the nastiest comments convinced me to let anonymous commenters contribute to my blog. JW has repeatedly said all that input was valuable to his family. Of course, the others have anonymous comments too, but for some reason Single Ma's are always as fabulous as her blog!
So, here's my current RSS feed in sidebar form. It changes; I'm open to suggestions. And thanks to those who blazed the trail.
The bloggers who I consider my inspiration are:
Tricia, the first PF blog I read after her juicy write-up in the New York Times.
From there I found Jonathan, whose practical skills helped me get my money done.
I most relate to Single Ma and to Madame X. I share their approach and many of their challenges. I feel like I am progressing right behind them.
But the blogger that convinced me that blogging can have real impact on your life is JW. His blog gets an insane amount of comments, with people cheering him on and people attempting to upbraid him. JW's courage at the nastiest comments convinced me to let anonymous commenters contribute to my blog. JW has repeatedly said all that input was valuable to his family. Of course, the others have anonymous comments too, but for some reason Single Ma's are always as fabulous as her blog!
So, here's my current RSS feed in sidebar form. It changes; I'm open to suggestions. And thanks to those who blazed the trail.
Thursday, January 10, 2008
Scaling Back My Lifestyle: Dry Cleaning
Dry cleaning is a hazard of the white-collar world, especially freelance, or as many PF bloggers call it, consulting.
My fiance and I spend about $75/month on dry cleaning. That is really quite a bit of dry cleaning. (God bless Texas for things being so cheap.) That is enough dry cleaning that the hard-working woman behind the desk knows my name. That is enough dry cleaning to have an account with my own special bag and a pre-payment discount.
I've written about how worth the money the maid is, and how I needed to scale back the extravagant doggie day care. The dry cleaning is really an unavoidable expense, so I'm glad it's so cheap. But there's no question that it is a lifestyle escalation cost.
My fiance and I spend about $75/month on dry cleaning. That is really quite a bit of dry cleaning. (God bless Texas for things being so cheap.) That is enough dry cleaning that the hard-working woman behind the desk knows my name. That is enough dry cleaning to have an account with my own special bag and a pre-payment discount.
I've written about how worth the money the maid is, and how I needed to scale back the extravagant doggie day care. The dry cleaning is really an unavoidable expense, so I'm glad it's so cheap. But there's no question that it is a lifestyle escalation cost.
Scaling Back My Lifestyle: the Maid
After I posted about how much doggie day care costs, I scaled it back. Now, Pup goes to daycare only once a week, for the sake of my home and both of our sanity. I wish I could take Pup twice, but it's just too expensive. Instead, we have been going for more walks, which is better for both of us.
The next large expense would be the maid at $50/week. That's a lot of money. But the maid is the best investment I have made. She is professional as can be, and she just saves me a huge amount of stress. She spends three hours a week on my place, sometimes more. I don't have to worry about there being no toilet paper in the guest room or scrubbing that pan or when I am going to clean up the shower or that spill in the kitchen or changing the sheets. I work a lot, and I put all that kind of stuff off. A dirty home stresses me out.
It's hard to even explain how freeing and light you feel when you come home to a clean house that you will no longer have to clean. My maid is easily worth $50/week.
The next large expense would be the maid at $50/week. That's a lot of money. But the maid is the best investment I have made. She is professional as can be, and she just saves me a huge amount of stress. She spends three hours a week on my place, sometimes more. I don't have to worry about there being no toilet paper in the guest room or scrubbing that pan or when I am going to clean up the shower or that spill in the kitchen or changing the sheets. I work a lot, and I put all that kind of stuff off. A dirty home stresses me out.
It's hard to even explain how freeing and light you feel when you come home to a clean house that you will no longer have to clean. My maid is easily worth $50/week.
Tuesday, January 8, 2008
452% Net Worth Increase!
Go me! I have top month-over-month net worth gains for both December and October!
In December 2007, I gained $7,931 for 452%
In October 2007, I gained $3,476 for 114%
I am pretty sure I will never be back on this board (until I can somehow earn over 56K in one month to go on the top amounts gainers).
So, I'm going to do my Snoopy dance now! 452% Net Worth Increase! Go me!
In December 2007, I gained $7,931 for 452%
In October 2007, I gained $3,476 for 114%
I am pretty sure I will never be back on this board (until I can somehow earn over 56K in one month to go on the top amounts gainers).
So, I'm going to do my Snoopy dance now! 452% Net Worth Increase! Go me!
Monday, January 7, 2008
Carnivals!
Thanks for letting the new kid into the Carnival of Personal Finance!
I was featured this week on Mrs. Micah, and last week on We're In Debt. Yay!
I was featured this week on Mrs. Micah, and last week on We're In Debt. Yay!
A Frugal Person's Guide to Fair Tax
Now that Huckabee seems to be vanquishing his foes, I decided to look into Fair Tax. I'll admit the Armey-Shelby flat tax always had a certain intellectual appeal to me beacause of its transparency and simplicity.
Fair Tax was first introduced in the House in the 90s, and since then, there have a been a pile of books written for and against it, many large-scale studies, and lots of grassroots organizing around it. Fair Tax was invented right in my backyard, in Houston. The benefit of all this history is that Fair Tax has most, if not all, of the gaps attacked and filled in.
Fair Tax is pretty much a 28% national sales tax on the stuff you currently pay sales tax on, including things your state might exempt, like medical services, legal services, basic food staples. It's on everything.
At the beginning of the month, you get a "prebate" for the amount of the taxes you would spend if you were spending at the poverty level. The idea is that this makes the poorest pay almost no taxes, as long as their consumption is low. Even if they spend at several times the poverty rate, the tax burden is still low.
Fair Tax is awesome for me because I buy things that aren't taxed! That includes savings, investments, and donating to charity. And there's no minimum deduction to meet! Hooray! And I am really tired of 15% of my income going to Social Security alone. According to Wikipedia, the original Fair Tax book had mortgage interest as tax free. According to the current non-profit's position, your whole house payment is tax free. SWEET! Now, this is a huge difference, and I can't tell which side Huckabee is on. I'll assume that only your interest has no taxes.
This is pretty fantastic for me. It's also pretty fantastic for anyone who spends (well, consumes) a lot less than they make. Frugal people intuitivly know that a consumption tax will cost them less. It will cost them a LOT less.
I made this neat chart for the frugal bloggers out there to show you how great Fair Tax is for you. I assume a married couple with one kid. This couple and their kid would get a $5,497 prebate, distributed monthly. The prebate increases with family size or if you live in Hawaii or Alaska. Each kid gets about $800/year in prebate.
I'll admit this chart is not exact. This chart is missing deductions like 401(k)s, which would be just from income in Fair Tax, but it also omits the HUGE amount of payroll tax your employer pays that would be eliminated in Fair Tax.
The chart does show the general trend. You can see that when you live on half your income, your taxes go down, way down! That might exclude your house payment even!
The best thing about Fair Tax is that I was able to generate the 12 Fair Tax entries in this chart in half the time it took me to get the 4 rough, inaccurate estimates for today's incredibly complicated tax code. Taxes are way, way too hard. Fair Tax is easy. To avoid taxes, spend less!
Fair Tax was first introduced in the House in the 90s, and since then, there have a been a pile of books written for and against it, many large-scale studies, and lots of grassroots organizing around it. Fair Tax was invented right in my backyard, in Houston. The benefit of all this history is that Fair Tax has most, if not all, of the gaps attacked and filled in.
Fair Tax is pretty much a 28% national sales tax on the stuff you currently pay sales tax on, including things your state might exempt, like medical services, legal services, basic food staples. It's on everything.
At the beginning of the month, you get a "prebate" for the amount of the taxes you would spend if you were spending at the poverty level. The idea is that this makes the poorest pay almost no taxes, as long as their consumption is low. Even if they spend at several times the poverty rate, the tax burden is still low.
Fair Tax is awesome for me because I buy things that aren't taxed! That includes savings, investments, and donating to charity. And there's no minimum deduction to meet! Hooray! And I am really tired of 15% of my income going to Social Security alone. According to Wikipedia, the original Fair Tax book had mortgage interest as tax free. According to the current non-profit's position, your whole house payment is tax free. SWEET! Now, this is a huge difference, and I can't tell which side Huckabee is on. I'll assume that only your interest has no taxes.
This is pretty fantastic for me. It's also pretty fantastic for anyone who spends (well, consumes) a lot less than they make. Frugal people intuitivly know that a consumption tax will cost them less. It will cost them a LOT less.
I made this neat chart for the frugal bloggers out there to show you how great Fair Tax is for you. I assume a married couple with one kid. This couple and their kid would get a $5,497 prebate, distributed monthly. The prebate increases with family size or if you live in Hawaii or Alaska. Each kid gets about $800/year in prebate.
I'll admit this chart is not exact. This chart is missing deductions like 401(k)s, which would be just from income in Fair Tax, but it also omits the HUGE amount of payroll tax your employer pays that would be eliminated in Fair Tax.
The chart does show the general trend. You can see that when you live on half your income, your taxes go down, way down! That might exclude your house payment even!
The best thing about Fair Tax is that I was able to generate the 12 Fair Tax entries in this chart in half the time it took me to get the 4 rough, inaccurate estimates for today's incredibly complicated tax code. Taxes are way, way too hard. Fair Tax is easy. To avoid taxes, spend less!
Saturday, January 5, 2008
Why My Wedding Will Cost 4 Times My Net Worth
My fiancee C's grandparents were all immigrants who worked their tails off. There could have been a lot of problems with our relationship: religion problems, racial problems, language problems. But his family has never been anything but generous and welcoming to me. I am incredibly grateful for that.
C's parents have 12 siblings together. So there are a whole lot of cousins. Some of those cousins are like siblings to C. I can't quite relate to that, but I understand. We can't invite some cousins, and not others.
With the family alone, we would have to have a huge wedding. I have budgeted 35K for my 2009 wedding. Now that I've priced a few things, that might not be enough.
Honestly, I always wanted a huge wedding. My family was always dirt poor. The weddings were in the afternoon with punch and the fancy napkins from the dollar store. They were no fun. Now that I have money, I want a big all-out party. That party just has to be huge due to the size of my new family.
I understand that it will be expensive. At least the wedding will be better than all the crap I spent money on.
~Dog
C's parents have 12 siblings together. So there are a whole lot of cousins. Some of those cousins are like siblings to C. I can't quite relate to that, but I understand. We can't invite some cousins, and not others.
With the family alone, we would have to have a huge wedding. I have budgeted 35K for my 2009 wedding. Now that I've priced a few things, that might not be enough.
Honestly, I always wanted a huge wedding. My family was always dirt poor. The weddings were in the afternoon with punch and the fancy napkins from the dollar store. They were no fun. Now that I have money, I want a big all-out party. That party just has to be huge due to the size of my new family.
I understand that it will be expensive. At least the wedding will be better than all the crap I spent money on.
~Dog
Friday, January 4, 2008
My Car is Guzzling My Vacation
My friend has a temporary assignment in an incredibly beautiful, remote part of the world.
My friend's assignment is up in a few months, and I want to visit that friend badly! My friend could show me around the area, and my friend knows all the places to stay and eat and go.
This vacation would be relatively cheap. I could get a 5 hour direct flight for about $500. Since I worked through Christmas, I have plenty of vacation... Hotels, food would be cheap. I can afford
$1000 for a week-long vacation, and I am pretty sure that Suze Orman would approve me even.
The problem is that this is all rationalization. I went on a huge, expensive vacation last year I still haven't paid off. This one would be a lot cheaper, like 1/8 the cost, and I can't do this one later. I am torn.
I am burdened by all my credit card debt (14K) and the upcoming wedding (35K) and the car loan, and I feel like maybe I just can't afford $1,000 right this second. I feel like this is another example of my incredibly stupid overspending including my ridiculous car getting in the way of the important things I need to use my money for.
Help me!
My friend's assignment is up in a few months, and I want to visit that friend badly! My friend could show me around the area, and my friend knows all the places to stay and eat and go.
This vacation would be relatively cheap. I could get a 5 hour direct flight for about $500. Since I worked through Christmas, I have plenty of vacation... Hotels, food would be cheap. I can afford
$1000 for a week-long vacation, and I am pretty sure that Suze Orman would approve me even.
The problem is that this is all rationalization. I went on a huge, expensive vacation last year I still haven't paid off. This one would be a lot cheaper, like 1/8 the cost, and I can't do this one later. I am torn.
I am burdened by all my credit card debt (14K) and the upcoming wedding (35K) and the car loan, and I feel like maybe I just can't afford $1,000 right this second. I feel like this is another example of my incredibly stupid overspending including my ridiculous car getting in the way of the important things I need to use my money for.
Help me!
Thursday, January 3, 2008
Why I Have No Money
Today, I was inspired by Larry Winget's new book and a commenter's zen-like jewel:
There is a reason you have no money.
~Anonymous
Yes, there is a reason I am in debt. I have overspent. I am going to list the things over 1K I have bought in the last three years.
Some of these expensive things were useful, and I would spend the money again:
* School. Ugh. That one was expensive.
* costs to enter my industry
* new clothes, to look respectable at work (3K) Lawd is that a lot!
* engagement ring, a bargain at 2K
Some I would have bought more wisely:
* The dog (5K)
* super-expensive vacation last year (8K)
Some I wish I could just undo:
* a piece of art (1K)
* a new TV (2K)
* The car (still owe 14K)
* furniture I just had to have when I got a real job (4K)
* video game consoles and games (1K)
The purchases I would undo have something in common. In all of them I was spending to please someone else. I was trying to look like a successful adult with nice furniture, interesting art, the newest gadgets, and a nice car. These were the things I was supposed to want, no, supposed to have to show that I have made it.
None of them made me happy. And now, they are keeping me from doing things I actually want to do. The cool art and TV and car are now burdens to me because I couldn't and still can't afford them.
There is a reason you have no money.
~Anonymous
Yes, there is a reason I am in debt. I have overspent. I am going to list the things over 1K I have bought in the last three years.
Some of these expensive things were useful, and I would spend the money again:
* School. Ugh. That one was expensive.
* costs to enter my industry
* new clothes, to look respectable at work (3K) Lawd is that a lot!
* engagement ring, a bargain at 2K
Some I would have bought more wisely:
* The dog (5K)
* super-expensive vacation last year (8K)
Some I wish I could just undo:
* a piece of art (1K)
* a new TV (2K)
* The car (still owe 14K)
* furniture I just had to have when I got a real job (4K)
* video game consoles and games (1K)
The purchases I would undo have something in common. In all of them I was spending to please someone else. I was trying to look like a successful adult with nice furniture, interesting art, the newest gadgets, and a nice car. These were the things I was supposed to want, no, supposed to have to show that I have made it.
None of them made me happy. And now, they are keeping me from doing things I actually want to do. The cool art and TV and car are now burdens to me because I couldn't and still can't afford them.
Wednesday, January 2, 2008
I Don't Trust Ameritrade or Suze. And I Want My $100.
I was excited when Suze Orman's book came out in February 2007. I pre-ordered it on Amazon, and two days later I opened the TD Ameritade "Save Yourself" money market account. At the time, it was boasting a decent but not stunning 4.59%. There was full webpage with that 4.59% rate in huuuuge TD Ameritrade green and Suze's smiling face. Great! And it had a $100 bonus if you put in $50/month for a year! Excellent!
It said:
Get started on Suze's Save Yourself Plan by opening a new account with TD AMERITRADE, featuring a special high-yield deposit account with a 4.59% Annual Percentage Yield (as of February 27, 2007). Your cash is held in an FDIC-insured Money Market Deposit Account (MMDA) at TD Bank USA, N.A.
There are no maintenance fees on the account, plus you receive the $100 offer for making 12 monthly automatic deposits of at least $50 each to help you build up your account balance.
Great!
I had read the fine print. I knew the rate could change. I knew that interest rates change over time. What I didn't expect was that three months later, TD Ameritrade pulled the rug out from under me.
On May 9, 2007, I logged in and found that "The fee changes we informed you about are now in effect." They did not drop the rate to 3% or even 2%. No, TD Ameritrade dropped to a ridiculous 0.1%! And it is now at a whopping "high-yield" 0.05%.
I kept up the $50/month TD Ameritrade Save Yourself account. I made it this far, and now I want my $100!
But I do not trust TD Ameritrade now. TD Ameritrade pulled a bait and switch on me with their money market. I don't trust them enough to leave any substantial amount of money. After all, the small print says that things change, and technically they're right. I expect that it will take weeks and several phone calls to TD Ameritrade to get my $100. I am sure they will have some lame excuse in the small print. I will get my $100. Mark my words.
The thing that really does not add up to me is Suze's role in this whole thing. All along she said she does not "get a penny" from this arrangement. If that's true, I would think Suze would be hopping mad that TD Ameritrade baited and switched her readers. And why on earth is Suze endorsing a "high-yield" almost-zero-interest money market account? The whole thing just doesn't smell right.
UPDATE: Apparently, the Save Yourself account has a mysterious, different rate than the regular money market and doesn't correlate with the published, truly terrible rate. I can't find the rate in my actual account or published anywhere. But, the main page says as of January 1, 2008, it's 3.5%, which is decent, subject to change without notice at any time, of course.
It said:
Get started on Suze's Save Yourself Plan by opening a new account with TD AMERITRADE, featuring a special high-yield deposit account with a 4.59% Annual Percentage Yield (as of February 27, 2007). Your cash is held in an FDIC-insured Money Market Deposit Account (MMDA) at TD Bank USA, N.A.
There are no maintenance fees on the account, plus you receive the $100 offer for making 12 monthly automatic deposits of at least $50 each to help you build up your account balance.
Great!
I had read the fine print. I knew the rate could change. I knew that interest rates change over time. What I didn't expect was that three months later, TD Ameritrade pulled the rug out from under me.
On May 9, 2007, I logged in and found that "The fee changes we informed you about are now in effect." They did not drop the rate to 3% or even 2%. No, TD Ameritrade dropped to a ridiculous 0.1%! And it is now at a whopping "high-yield" 0.05%.
I kept up the $50/month TD Ameritrade Save Yourself account. I made it this far, and now I want my $100!
But I do not trust TD Ameritrade now. TD Ameritrade pulled a bait and switch on me with their money market. I don't trust them enough to leave any substantial amount of money. After all, the small print says that things change, and technically they're right. I expect that it will take weeks and several phone calls to TD Ameritrade to get my $100. I am sure they will have some lame excuse in the small print. I will get my $100. Mark my words.
The thing that really does not add up to me is Suze's role in this whole thing. All along she said she does not "get a penny" from this arrangement. If that's true, I would think Suze would be hopping mad that TD Ameritrade baited and switched her readers. And why on earth is Suze endorsing a "high-yield" almost-zero-interest money market account? The whole thing just doesn't smell right.
UPDATE: Apparently, the Save Yourself account has a mysterious, different rate than the regular money market and doesn't correlate with the published, truly terrible rate. I can't find the rate in my actual account or published anywhere. But, the main page says as of January 1, 2008, it's 3.5%, which is decent, subject to change without notice at any time, of course.
Tuesday, January 1, 2008
I Hate Paying Interest
In 2007, I paid $1,450 in interest.
Almost all of that was for my car (which I hate). The rest was for the remnants of my student loans before I paid them off. I don't even get to deduct that interest because I make too much money.
Paying interest pains me even more than paying taxes. Paying interest is a waste of money, and I hope to never do it again (with the exception of a mortgage).
I hope that in 2008, I can cut this number in half. I'm not sure if this is possible, as the car is ticking at $80 a month, and I might get hit by the credit cards once the teaser rates expire if I can't pay them off fast enough. I do think that I will be able to pay less than $100 in interest in 2009, maybe $0 if the debt pay-off goes quickly.
Down with interest payments!
Almost all of that was for my car (which I hate). The rest was for the remnants of my student loans before I paid them off. I don't even get to deduct that interest because I make too much money.
Paying interest pains me even more than paying taxes. Paying interest is a waste of money, and I hope to never do it again (with the exception of a mortgage).
I hope that in 2008, I can cut this number in half. I'm not sure if this is possible, as the car is ticking at $80 a month, and I might get hit by the credit cards once the teaser rates expire if I can't pay them off fast enough. I do think that I will be able to pay less than $100 in interest in 2009, maybe $0 if the debt pay-off goes quickly.
Down with interest payments!
Seven Year Car Loan
Yikes!
I hate my car loan and my car, but at least I was never underwater on it. Check out this monster of a seven-year car loan.
They traded in a SUV $9,500 underwater on AND got another brand new SUV. YUCK! This is pretty much the theoretical SUV subprime Jonathan theorized. I don't feel bad for these people. Sure, the dealers (like subprime mortgage brokers) are sleazy. Sure, the loan sucks. But these people knew they couldn't afford either of these SUVs. Surely they knew, even if they didn't know the math, that something was not right.
I hate my car loan and my car, but at least I was never underwater on it. Check out this monster of a seven-year car loan.
They traded in a SUV $9,500 underwater on AND got another brand new SUV. YUCK! This is pretty much the theoretical SUV subprime Jonathan theorized. I don't feel bad for these people. Sure, the dealers (like subprime mortgage brokers) are sleazy. Sure, the loan sucks. But these people knew they couldn't afford either of these SUVs. Surely they knew, even if they didn't know the math, that something was not right.
Subscribe to:
Posts (Atom)
