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Sunday, March 30, 2008

More about housing

I've been continuing to ponder what to do about my housing situation. I'm really not sure that I will be ready to buy a home by the time my lease is up in September. My main thinking on this is that my current detail at my job will be over at the same time, and I will be either returning to my old job or (hopefully) starting a new job. I don't know that I want the stress of a new job and moving all at the same time, especially when I won't know exactly what kind of money I will be making.

I'm pondering the roommate thing - seeing if I can find someone that I know who'd be willing to move in for a while. I'm thinking of just renting out the room, charging a bit less than half rent, but not having to worry about moving all the furniture I already have in the other rooms. Of course, the roommate would be welcome to use all the rooms in the house (save for my bedroom), but that prevents me from having to move or get rid of any of the other furniture that I have.

I've been doing some intense decluttering in preparation. I've been cleaning out my closets and my drawers, and I have a pretty decent sized pile of clothing to take to Goodwill when I get the chance. It's a good feeling to be getting rid of all of these items, things that I know I will never wear again. The goal is to be able to empty all the things out of the second bedroom so that I can take on a roommate if necessary, and it's easier to do it slowly rather than all at once.

Friday, March 28, 2008

No really, you don't need a sign to tell me it's more expensive

I had the day off work today, so I took the opportunity to hit the grocery store while it was nice and quiet and uncrowded.

I knew that prices would likely be a bit higher than I was used to, and I also needed to replenish a few things that I buy infrequently, so I figured my bill would be higher. What I wasn't expecting were all the signs around the grocery store essentially saying "We know prices are higher, but it's not our fault!"

The first one I saw was by the bananas. Apparently, due to bad weather, the banana crop is not as good as usual, and so prices are up, but don't worry, the grocery store is dedicated to finding you the best at the best price.

I didn't see any signs through much of the rest of the store. Potato chips and soda are still priced so that we can buy them and get as fat as possible. Good to know. Then I got to the dairy case. Signs were posted every two feet or so, telling me that due to all sorts of things, milk prices are up. Additionally, egg prices are up, and sorry, no, we don't expect them to go down any time soon.

It's sad that it's the healthy, staple foods that are rising so quickly in price. I suppose one can live without bananas, but milk and eggs are pretty prevalent in a lot of homes, be they consumed alone or in various recipes. I know that I struggle to keep my budget tight, but I could do better, and if I go over my budget, the world will not end. I have the money to cover, I just might not be able to spend it on something else. A lot of people aren't so lucky.

My plan is to continue with my same grocery budget and to just try to make smart choices in what I buy, watch for price drops, and stay away from convenience foods as much as possible. And shop the farmer's market near my house when it opens in April.

Wednesday, March 26, 2008

A Quick Link

Punny Money is always good for a laugh, but this recent entry about how people will spend their tax refund made me laugh out loud.

Tuesday, March 25, 2008

Dwelling on Dwellings

I have to admit, I’m starting to wonder if I’m dwelling a bit too much on my finances. I check my bank account balances almost every day. I’ve stopped checking my investment accounts daily, but still glance at them once a week in Microsoft Money. I’m constantly tweaking my YNAB spreadsheet and lamenting the fact that I’ve spent out of budget in a category and it wasn’t my fault! (Well, ok, every expense is my fault in that I initiate it, but when I get hit with expected fees months before I expected them, it hurts the budget.)

Lately, I’ve been thinking a lot about my current living situation. My apartment is too big. I love it, but it’s more space than I need (though I do manage to fill it with all my furniture and possessions. When I rented it, it was the only apartment available in the complex that I had fallen in love with. And I do still love the complex – it’s pet friendly, there are lots of amenities, and it’s in a good location. But when I rented it, I was under the impression that I was still receiving the sizeable raise at the one year mark of my fellowship that I was promised when I was hired. That (and other hiring incentives) have since been eliminated (but those are issues for another time).

The apartment is expensive. I still make ends meet, and I still put money into saving, but every so often, I find myself thinking of how much more I could be saving. If I just got a roommate who paid even less than half the rent (I do have the bigger bedroom with the en suite bathroom and my stuff pretty much fills the common space), and I stashed that away, my savings would be growing so much faster!

On the other hand, I’ve had some very bad experiences with roommates. Is it worth it to me to be spending a bit more and keep my sanity and my privacy? Quite possibly.

Plus there’s the fact that my rent will go up in September when I have to renew my lease. And my income will not be going up. Come September, I’ll hopefully be near to starting a new job, and while I do not want to take a pay cut, I might get stuck without a raise for a while.

I have a number of options. I can just suck it up and continue to pay the rent and enjoy the perks of living alone. I can find a roommate. I can try to move to a smaller apartment in the complex. I can move to a new apartment complex. Or I can start looking for a place to buy.

I’m not huge on the moving, and told myself I wouldn’t move until I bought a place. This seems to be the time to buy though. I’m just not sure how long I’ll be in D.C. I plan to stay with the federal government a minimum of three years, because that’s what it will take for all my retirement benefits to vest. Beyond that, I have no idea. Is it dumb to buy a place that I may only live in for 2 years? I don’t know.

It’s a lot to think about. And part of me doesn’t want to think about it at all. For now, I think I will focus on the small things – figuring out how to save while still spending enough to be able to have fun (one drink at the bar won’t kill me after all !).

Sunday, March 23, 2008

eBay Mania!

As I mentioned in an earlier post, I've been working on decluttering my home. That has meant throwing some things out, starting a pile for Goodwill, and listing items for sale on eBay and half.com. I've been a half.com seller for quite some time (great way to get rid of textbooks, even those you think are out of date).

I had four auctions finish this week, and all four items sold! I'm very pleased about that. Two sold at the list price, which isn't great, but hey, if they hadn't sold, I was just going to donate them or toss them, so I'm happy to have a few extra dollars in my pocket after all fees are paid and items are shipped. Two sold for more than I had hoped, which definitely brightens my day. I still haven't received payment for one, and I'm a little apprehensive about that, as it sold for $50 to an eBay member without much history, but I'm going to do everything I can to protect myself on that sale.

The downside to selling on eBay and half.com for me means that I have to visit eBay and half.com and see all the things they have for sale. Movies that are on my wishlist being sold for under $2, great books, etc. I just remind myself that I can't buy anything right now. This month's budget is finished, and until I have saved up for my upcoming vacations and various bills, there will be no fun spending.

A lot of people say that selling on eBay isn't worth it because you don't get a good value for the item. But in my opinion, if I'm not using the item, it's not worth anything to me. Something shoved in a box in the back of a closet has no value, no matter what I paid for it. Sure, I'm not going to sell something I bought for $100 for 99 cents, but if I can get $50 for it, I'll be very happy.

I've decided to keep a spreadsheet of what I sell and don't sell and all the various fees associated with the sale to see a true representation of how much money I'm making (or rather, recouping) by these sales. So far, even if the open auctions don't sell, I'm still ahead a decent chunk of money. Every cent helps!

Friday, March 21, 2008

More festival links

It's been such a crazy week that I have yet to post about this week's Festival of Frugality! I'm still surfing through all the links, but the below are just some of my favorites.

Wednesday, March 19, 2008

Pondering a Move

In the past few weeks, I’ve been making some major work-related decisions. I am not happy in my current job. I have an amazing supervisor and some incredible co-workers, but in general, I am not happy with what my job responsibilities have become, and I have a number of issues with how my part of the organization is being run. I wouldn’t say things are being done incorrectly, things are just being done in a way that I don’t agree with. My boss is aware of my current situation, and I think she is trying to get me into a better position within the department, but it’s just not going to happen.

Essentially, I was hired to fill a specific role. That role is no longer needed within the organization. Therefore, I’m getting paid to do all sorts of things, but not the things for which I was hired. I stuck it out for six months, but it’s clear that there just isn’t anything there for me in the agency.

Long story short, I’m looking for a new job. I’m currently placed on a temporary assignment at another agency, and I have to admit, I’m less than a week in and already I would very much like to stay here. But I’m looking all over to see what opportunities are available for me. The concern I have is that I will have to take a pay cut. At this point, I can’t afford to take a pay cut. When I was hired, I was promised a significant raise this September. I have been informed that the pay raise will no longer happen for the five of us hired at that time, but we should still get a very small raise simply based on our time with the government. Ideally, I would like to make an upward move and make more money, but I am at the point where I will take a lateral move, simply to get to a job I love. If it turns out I absolutely have to take a pay cut, I will have to seriously think about my situation.

I’m just sort of watching to see what happens right now, and doing my best to prove to the organization I am currently placed at that I would be a great new hire once my temporary placement is up.

Working in the government will never make me rich. But I think there are a number of jobs here for me that I would find incredibly rewarding. I just have to do my best to get into those positions. And I have to be sure that I'm making the right move. While I am not happy in my current job, it could be much worse. I have a boss I respect, and for me, that's huge. And she's trying to do right by me, which is also wonderful. But even with my respect for and dedication to her, I still have to do what's best for me.

Tuesday, March 18, 2008

Facing the Storm

So as I'm sure everyone has heard or read, the Federal Reserve Board again cut rates in an attempt to stop the current economic downslide. From what I've read, it sounds like a number of analysts believe that we are officially in a recession.

I haven't decided if this means I will be making drastic changes. Of course, I have already noticed the increased price in groceries, so it might mean adjusting my grocery budget or simply working to buy less food.

I'm a little concerned about what's going to happen to my rent come September when my lease is up. I should really consider picking up a roommate, even if it's just an intern who comes for the summer.

I'm going to continue to funnel money into my ING Direct accounts. The interest rates aren't excellent, but they're better than I'm getting at Bank of America, and I like their security and their customer service.

I'm going to work on slowly funding all of my budget categories. Even if I can only drop in $5 a month, that's better than nothing.

After the slight success I'm seeing from cleaning out my closets and listing items on eBay, I'm going to continue that plan. It's kind of a dual benefit situation - I clean out my closets and declutter my life a bit, and I get a bit of cash in return. I'm selling things that I'm not using and therefore are worthless to me. Because of that, I'm delighted to get a few dollars back for it. Sure, it might be "worth" more than what I end up selling it for, but as many people have said, an item is only worth what someone is willing to pay for it.

I have a family vacation planned for the summer, but my only expense there is transportation and incidentals once we arrive (I may try to convince my parents to let me buy them dinner one night, though) and immediately following that is a friend's wedding. Other than that, I don't have any travel planned until Christmas, so no expenses to be cut there. I do have a few items of clothing that I really do need to replace, but I know exactly what I want/need (size, color, brand), so I will just watch for sales and find them when I find them. I may also decide to do more shopping online. Yes, I pay for shipping that way, but I save on gas, and more importantly, I save on impulse purchases.

I will continue to contribute to my TSP each paycheck (I become eligible for the match in June, which will be a nice bump to that account), and I plan to start funding my Roth IRA for 2008 in the coming months. I have a Roth with Vanguard, and I want to buy a new fund, which requires a minimum $3000 initial purchase, so I'm waiting a bit until I'm actually ready to put that chunk of money into an investment.

Other than that, I just plan to ride this thing out. I'm not in a position to buy a house, and the falling interest rate does hinder my plans to save for a down payment, but not by all that much. Only a few hundred dollars a year, really, and while that would be nice to have, it's not the end of the world that I have to save a little bit longer.

To summarize, I would say that my plans for this recession are to simply dig in my heels and hold on and maybe try to make a little progress in the face of the storm.

Breaking News!

The Fed has cut rates again. Interest rates were cut by 3/4ths a point. I get that this is supposed to help the economy, but on a personal note, what is this going to do to my high yield savings accounts?

Off to look into putting more money into a CD.

Monday, March 17, 2008

Irish Carnival!

Lynnae of Beingfrugal.net hosted this week's Carnival of Personal Finance. My entry on intangibles is included. Some of my favorites are:
This is a bit of a fly by post. Started a detail at work today, which is like starting a new job, while still being paid by the old job. Government service is strange. Once things get settled there, I hope to have posting back to normal again.

Sunday, March 16, 2008

Mid-Month Budget Update

It amazes me just how quickly a few little things add up to a blown budget.

That's right, halfway through the month and I've blown my budget. Not by much, and after some juggling, only in one category, but it's still hard to see on the spreadsheet. Since I am working on YNAB and getting to a zero based budget (and having a month's worth of expenses in reserve), it really won't cause any problems. Just frustration.

My goal is to have a month's worth of expenses saved by the end of this month so that next month, I can bank both of my paychecks for use in May. I should get there this month provided my tax return shows up (something happened with the communication between the IRS and my bank, and so I'm getting a check mailed).

I am just kind of surprised how quickly my budget got out of whack this month. I don't feel like I spent out of control, and yet my spending is pretty much done for the month once all the bills are paid and the money is put into savings for upcoming bills. I've quickly realized just how out of control my spending was in the past. Six months ago, a month with expenses like these wouldn't have made me think twice. Now I'm realizing just how easy it is for money to disappear.

In all honesty, I don't feel like I overspent this month, even with the budget issues. I had a couple of things come due that I had forgotten about (and somehow, I ended up with a 2 year virus protection renewal rather than just one), and I made a few bulk food purchases that will last me months. I ate out more than normal, but I was also out of town, so that was a given. What I did learn is that I need to continue to put small amounts of money into all my budget categories so if I do have a month where I spend more on, say, household items, it won't break the budget.

The goal for the rest of the month is to try to keep spending as tight as possible, and continue to cull through my belongings to see what I can sell (and donate). This weekend I placed a few things on eBay, and already one has sold, leaving me with $25 after shipping and paying the fees for all the items I listed. Another item seems to be going through a minor bidding war. My packrat tendencies continue, but I'm going to try to get rid of a few things each weekend to both clean out my closets and pad my budget a bit.

Saturday, March 15, 2008

The Third Step to Financial Fitness

My friend finally came back to me for the next step on her plan to financial fitness. You can find step one here and step two here.

By this point in time, she had figured out her debts and recorded her expenses for a month. As I recommended, she created categories for herself and categorized every expenditure. Luckily for her, she's a lot like me and does most of her spending with credit and debit cards, so she she had an easier time figuring out what she spent and where she spent it.

I had a feeling that she had already done the third step when I talked to her. I told her that in my mind, the third step was looking at those already categorized expenses and figuring out where she was overspending and where she could cut back.

I was right. This was something that she had immediately considered after seeing all of her expenditures categorized in that manner. She quickly realized that she was spending entirely too much money at bars and restaurants, and she felt that she was spending too much at the grocery store as well. I laughed and told her that those were the same things that I had noticed when I started categorizing my expenditures.

My suggestion, therefore, was for her to attempt to cut back in those areas. She could start her saving plan by making small changes, rather than trying to cut back all of her spending. I suggested that she do simple things, like bring her lunch to work, but I also suggested that she make a point of not opening a tab at the bar. It's all too easy to find that you've spent $50 on expensive drinks when you just have the bartender charging things to your tab.

Additionally, I told her that one thing I did to reduce my grocery budget was to create a list and stick to it as closely as possible, allowing myself one "extra" item a trip. I also suggested adding up her groceries in her head as she placed them in her cart. It makes it easier to stick to a budget. I even suggested she bring a small calculator to the grocery store if that made things easier. No one would look at her funny - I've noticed people with price books and calculators at the grocery store on more than one occasion.

She agreed that these were things she could try, but she was eager for other information. So I suggested she gather her bills - her cable bill, her cell phone bill, etc., and see if there were any fees or services that could be eliminated. Even if you drop a $5 service from your cell plan each month, that's a savings of $60 a year for a very easy step!

Friday, March 14, 2008

Living a simpler life

I still find myself thinking about Frugal For Life's entry on Tiny Rooms, Tiny Homes. I've been doing a number of google searches for pictures and stories from people living in houses made by Tumbleweed Homes (I'm not coming up with much).

I'm not sure why the idea of living in a tiny home fascinates me so much. Part of it, I'm sure, is my love for boxes and containers and the idea of everything having its own little place. I think the other part is that I'm always fascinated by the idea of simplifying my life.

I am very much aware that I have packrat tendencies. Not to any extreme, but I have trouble getting rid of things. "I might need that later!" For example, I'm working on weeding out my closet. I tried the "backwards hangar" trick, where you put all the hangers on the rod backwards, and then when you wear something, you put it back with the hanger on the other way. I have maybe worn 25% of what's in my closet. Of course, I started this last fall, and a number of the things still unworn are summer clothes, but I think it's time to weed out the winter clothes at the very least. I came across one shirt the other day that I've struggled to get rid of. It's gorgeous, but not so much gorgeous on me. Clearly, I would benefit from donating this. And yet I hang on to it.

Another example: I buy McCann's Irish Oatmeal. It comes in beautiful cans. I buy the cans in lots, so I get a pretty decent discount. In my cabinet, I currently have four empty cans stacked up because I can't get rid of them. They're so neat looking! They would look great with plants in them! The odds of me ever doing this? Slim to none. While I won't ever be able to bring myself to recycle them, I can probably find some crafty person who would happily take them off my hands.

I think that part of my weekend plans will be to try to weed out some of my possessions. I know I have a few things that are definitely eBay worthy, and other things that will do quite well as donations to Goodwill. While I don't think I will ever be able to get my possessions down to what will fit in a 100 square foot home, a little bit of simplification never hurts.

Last, but not least, as you may have noticed, I've joined the BlogHer Ad network. I don't know about you, but I've been pleased with the ads that have been presented, and I love the links to other blog entries that change every day. BlogHer is currently doing their annual survey, and if you have the time, please check it out and give your opinions!

Thursday, March 13, 2008

Link roundup

Here are a couple of interesting posts I've come across in the last few days.

And of course, don't forget to check out The Finwikian!

Tuesday, March 11, 2008

The value of intangibles

It has been a slightly rough week, to put things simply. Earlier this week, I found out that a close family member was told that her cancer had returned, after at least 15 years of remission, and this time, she's not going to beat it. She could have two years, she could have twenty years, no one can say at this point. Right now, she doesn't want things to change. She doesn't want special attention or family hovering. She wants to deal with this with her immediate family, and I can understand that. The more attention that the cancer is given, the more real it becomes. She's fought it before. She knows what she's in for. Of course, there have been major advances in medicine since then, so I suppose anything's possible.

I have to admit, one of the things I did that day was started a budget fund for "last minute travel." Of course, if anything happened and the family needed me, either my sick family member or one of her children who live elsewhere, I would be there in a heartbeat, regardless of what it cost me. But it's never a bad idea to plan for that sort of thing.

Events like this make me realize the value of the intangibles. The things we can't buy no matter how much money we have. The meals shared around my grandmother's table, the vacations we've all taken together, even when we've all gotten on each other's nerves (because that's bound to happen on any sort of family vacation, I think). It makes my personal pride in my budget and my financial management skills seem a little silly.

Sometimes we lose sight of what's important. We're all supposed to take a vacation together this summer. Originally, I thought it would be a successful vacation if we made it through with no large fights, good weather, and not exceeding our budget too much. Now I think it will be a success if the whole family can be there.

Roth IRAs as Emergency Funds?

I have seen a number of personal finance websites suggesting that people keep their emergency funds in a Roth IRA. After all, the point of an emergency fund is to never have to touch it, saving for retirement is good, and one of the benefits of a Roth IRA is that you can take out the money you put in without any sort of penalty (of course, you can't touch your earnings until you're 59 1/2).

I'm still not sure whether or not I think this is a good idea. I have to admit that when I thought about starting a Roth IRA, one of the things I considered was the fact that if an emergency happens, I can pull that money. But I also have an emergency fund with enough money to cover almost 10 months worth of normal expenses.

I don't think it's a good idea to have all of your emergency fund in your Roth IRA. But it might not be a bad idea to put some of it into a Roth IRA. Let's pretend that your monthly expenses are $3000. Now let's say you've managed to save 6 months worth of expenses, meaning you've got a high yield savings account with $18,000. To fully fund your Roth IRA for 2008 would mean a deposit of $5000. That would leave you with $13,000, enough to cover you for over four months. And if things got bad, you could pull from your Roth IRA.

But wait. Roth IRAs aren't like savings accounts. They aren't even like stuffing the money under your mattress. They're not guaranteed to make money over time. Mine lost $500 in the first six months. If I was depending on that money for my emergency fund, I'd be out of luck.

I think my opinion has to do with how big your emergency fund is. As I said, mine is nearly 10 months worth of normal expenses, much of which could be cut in an emergency situation. So yes, I would be fine with putting some of that into a Roth IRA. But do I think your entire emergency fund should be in your Roth? Absolutely not. If you want to make it work for you, tie it up in CDs. Sure, you'll take a small hit if you have to redeem the CD early, but nothing like the hit you could take from a Roth loss.

Of course, Roths are designed to grow, so it's possible you could deposit $5000 of your emergency fund into it and discover that your retirement fund has grown.

I think this is a decision that everyone has to make, but I still think that everyone should try to have three to six months worth of expenses in an emergency fund, preferably closer to six. Where you put it is up to you. Just be aware of all of the benefits and the risks.

A fascinating post

I have spent the better part of the last hour visiting the sites linked by Frugal for Life in the entry Tiny Rooms, Tiny Homes. I find Tumbleweed Homes especially appealing. I always feel as though I have too much stuff and would love to just be forced to unclutter and live a simpler life.

Monday, March 10, 2008

Darkness Now Means More Light Later

I have been eagerly anticipating time change. Sure, it means that it's darker when I leave for work, but the sun will be out longer tonight, which means that I can finally run outside again and not have to run on the treadmill. I can only take the treadmill for so many months.

In a strange way, this is like personal finance. You give up something now (putting money into retirement and savings and therefore, spending less) to get something later (money for retirement, a downpayment on a house, etc). There's just a bit more instant gratification.

I just returned from the wedding of two of my closest friends. While it turned into an expensive trip, it was absolutely worth it to get to be there for their wedding, plus it was wonderful to get to see so many old friends who I don't get to spend a lot of time with. While there are a number of other things I could have done with the money it cost me to fly there and stay in the hotel, this expense was worth it to me.

On this slightly sleep deprived day, there is a new Carnival of Personal Finance available! My entry about education is included, and here are some of the other entries I enjoyed:

Thursday, March 6, 2008

Cash or Credit?

I have discovered that I'm one of those people for whom cash just burns a hole in my pocket. I limit myself to taking a specific amount of cash out of the ATM each month. I can spend it on whatever I want, but when it's gone, it's gone. For the most part, it tends to go to the occasional caffeine fix during the afternoon, splitting dinner and drinks with friends, things like that. (Of course, during farmer's market season, I take out more cash, deduct that amount from the grocery budget, and buy all sorts of fresh, delicious food.)

I am one of those people who does much better with budgeting if I use a credit card. Number one, I use only one credit card, even though I have multiple. It is an Amazon.com Visa by Chase. I love the rewards, and since I pay it off every month, the higher interest rate does not bother me. (I am working to better utilize my Discover Card though, and take advantage of their 5% cash back opportunities.) I am much less likely to pull out my credit card for a quick $2.00 purchase, where as plunking down that amount of cash is a quick process.

I've also found there's something to having to transfer that big chunk of money to the credit card company every month - yes, I could automate it, but having to type it in and watch it transfer makes it sink in a bit more.

Part of the problem might be that I don't track my cash expenditures. Maybe if I tracked it, I would be less likely to spend at random, but each time I tried that, I ended up without receipts, and forgot what I had purchased. It was a failed experiment. The new experiment is to always budget the same amount of cash every month. So if next month, I start the month with $20 in my wallet, well, I can take out $20 less from the ATM, and rebudget that saved $20 into another budget category, like an additional $20 to my clothing or book fund. For the most part, looking at it that way has helped.

It seems that among personal finance bloggers, there is a debate over whether it is better to go to an all cash system or to completely avoid cash and use credit or debit cards. After reading all the opinions, I don't think there is a right answer. I think it depends on a number of factors, and everyone should do what works best for them. Which is why I'm sticking to mainly credit card transactions.

Wednesday, March 5, 2008

Spending too much... and yet not...

Yesterday, I went on a bit of a spending binge. At least, I definitely felt like I was going out and being "bad" with my finances. I haven't been shopping for non-necessities since early January, and I have definitely been feeling the pinch. I have a list of things that I want/need to buy when the money comes available (a new cover for my iPod, as the old one has a huge rip in it, a good thermos to bring coffee to work, etc). But I've been waiting.

Really, I blame spring for what happened yesterday. I woke up and it was nice out. Really nice. (Ok, so it was humid and then rained, but it was warm at least.) I realized that perhaps the sweater I wanted to wear to work was not so weather appropriate. I also realized that I don't have a lot of warm weather work clothes.

I decided, therefore, to go shopping at lunch. I'm lucky in that I work in an area with a number of stores within walking distance. I knew that I really didn't have much of a clothing budget this month, but I felt I needed to buy something to start fleshing out my spring and summer wardrobe.

I ended up coming back after lunch having been to buy clothing, and then to the sporting goods store and also Bed, Bath, and Beyond. No, those last two aren't places to buy work clothes. And I was feeling like I had really blown the budget. What did I buy?
A very nice knit top in a style that I wear often
A new knee brace for running, something I've been looking at for a while
A new soap dish for my shower, since the old one fell and broke last week

A "major" shopping spree, and I came back with things that I needed. Well, I didn't absolutely need the shirt, but it was not unneeded either. What about the budget? After plugging the expenses into YNAB, I ended up a total of $30 over in a few categories. I've already made an extra $18 selling books on half.com, which means I'm $12 over budget. Not bad at all, especially knowing that I intentionally overbudgeted in certain areas.

Of course, this can't happen all the time, but it made me realize that I can't keep my budget as incredibly strict as I have been. I can splurge a little bit from time to time, as long as I'm careful to not go overboard.

I think that too many times, we create budgets for ourselves and try to hold ourselves to incredibly strict financial rules. While it is important to save for the future and make smart choices, we also need to reward those decisions in the here and now as well.

Tuesday, March 4, 2008

You got back how much?

In today's Express, there is a little blurb that states that 47 million tax returns have been filed so far this year, 38 million of them filed electronically. The shocking part of the blurb? The average refund was $2708! That is an amazing amount of money to be overpaying in taxes. Of course, I'm sure the refunds are in large part due to various deductions, but I was delighted to find out that I was getting nearly $500 back (to counter the nearly $800 I paid to two states).

I know that a lot of people like the idea of a refund, but personally, I'd rather have to pay the government at tax time. Ideally, I'd break even (which I feel I got very close to this year). But I would prefer to have the money when I earned it to do with it what I want, rather than get it back later and have given the government that large of an interest free loan.

Just my opinion though, and I know there are strong proponents of large refunds. I bet it is fun to find that amount direct deposited in your account one morning.

Monday, March 3, 2008

Studying what you love

Growing up, my parents always told me this: "We don't care what you decide you want to be, but you have to go to college. If you want to herd sheep, well, then you will be a college educated shepherd."

(My standard response was that I wanted to be a ninja. To this day, I still think it would be a fun profession.)

I didn't really know what I wanted to do with my life when I went to college. I liked my literature classes in high school, and I loved music, but I wasn't sure that I wanted to be a music teacher. An English teacher didn't sound so bad though. So I entered college as an English major, planning on entering the education program my second year.

One semester in the education program told me that while I might still want to be a teacher, I did not want to go through the education program offered to me. I was, for the most part, enjoying my English classes, so I decided to continue there. I changed direction a bit and picked up a supplementary major in a computer field, intending to go to a consulting firm like Arthur Anderson.

Well, we all know what happened there.

So I was coming up on graduation. I looked at what I liked to do. I loved my literature classes. I loved to read and analyze and write. And I liked history and government. A light bulb appeared above my head, and I decided to go to law school. So that I wasn't just jumping into graduate school without any idea of what I was doing, I took a year and worked in a law firm. I learned that while I did not so much enjoy toxic tort litigation, I liked the law. So off to law school it was.

I sometimes wonder what I was thinking, majoring in English. I did what everyone said - I majored in what I loved. Our running joke used to be "If you study engineering, you become an Engineer. If you study architecture, you become an architect. What are you if you study English? Unemployed." Things worked out for me though. I enjoyed what I learned in school, and I enjoy what I do now. My fellow English majors ended up in all sorts of professions: education, theater, government, journalism, and many others.

Sure, with the exception of my supplemental major, I really graduated with no marketable skills. I could read, analyze, and write, but I feel those skills are grossly undervalued by business. But I had followed my passion, and even though my career has taken a total left turn from where I thought I was going when I was 18 and entering college, I have no regrets. I still think that majoring in what you love is a valuable recommendation. You just need to also think about what you will do with your education when you finish, and maybe that means picking up a second major (I have a number of friends who were business and anthropology double majors, for example), or maybe that means graduate school. But you shouldn't abandon what you love. You should work to turn that into what you will do with your life after graduation.

Carnival #142

This week's Carnival of Personal Finance is being hosted by The Baglady, and my post about the Federal Reserve is included. I very much like that The Baglady chose to highlight the myths and facts about the homeless in her post.

The following are some of my favorite posts from this week's Carnival:

Saturday, March 1, 2008

Finding a Charity

In a recent Wise Bread entry, there is a link to Think Before You Pink, a site discussing the number of companies who have linked up with the Susan G. Komen Foundation and now advertise that $X from your purchase will go to supporting breast cancer research. I freely admit that in my cabinet right now there are at least two cans of soup with a little pink ribbon on them. Of course, it's soup I really like.

There are so many charities out there, and so many of them are very worthwhile. But it's hard to figure out which ones are good and which ones are not quite as great. Throughout the year, I check out charities on Charity Navigator. This is a site listing a number of charities with background data and rankings of each one. They evaluate charities and provide you with the information you need to decide if that charity is right for you. And if you decide that it isn't, you can search for another charity supporting that cause with a better ranking.

Charities are rated by looking at their organizational efficiency and their organizational capacity. This shows you how the charity uses its money and how it is growing in programs and services over time, two very important questions when you're thinking of donating. The site also tells you the salaries of notable executives on the board of the charity. While I believe these people do deserve a good salary, there are limits.

Digging out of debt and really don't have the money to put towards a charity? I'm not going to argue with you. But you might want to check out GoodSearch. It's a search engine powered by Yahoo. Choose a charity on the front page, and then every search you do, the charity receives 50% of the ad revenue from that search. Sure, it might be only a penny. But as we all know, pennies add up. You can even add a search bar to IE or add GoodSearch to your search box in Firefox.

February Net Worth Update (-0.69%)

Another drop in my net worth this month. Down 0.69%. I suppose that's not a huge drop, but it's movement in the wrong direction. I look at the numbers and just shrug. There's not a lot I could do about it. The loss is mostly due to the downward movement in the market. In terms of cash accounts, the decrease was very small, and the fact that I already paid my state taxes but haven't received my federal income tax return was part of the reason I wasn't in the black. So I can take faith in the fact that my spending is under control.

It is interesting to see the variety in how my investments are playing out. Two of my mutual funds dropped by a small percentage, but one plummeted by almost 3%! My TSP (Thrift Savings Plan - the government version of the 401(k)) is doing ok. My Roth IRA is still down over $400 since I opened it last fall. I should start putting money into that while the market is down.

On the other hand, the six shares of Yahoo that I've had since the late 90's did quite well this month, with all the talk of a buy-out. Those are the only individual shares of stock I own. Years ago, I had a Geocities website, and when they went public, a number of us got 10 shares of Geocities stock. They were bought out by Yahoo, and I ended up with 6 shares of Yahoo stock as well as a check for what I believe was about $300. Since then, I've just let the stock play. I got it for free, and I've already gotten $300 from it. For now, I'm just letting it ride.

One of my 2008 goals is to increase my net worth by 20%. So far for 2008, my net worth has dropped 2.65%. I still think it's possible to come back from that though. I'll just keep plugging along.