Q Day Rant

Q-Day: When are you quitting work before leaving for school?

At work, now that most folks know I’m going back to school this Fall, I find myself facing this question from all of my co-workers, and EVERYONE has suggestions about how I should spend the in-between time. Mostly travel. To Europe, to South America, to Iceland, Australia, maybe a round the world ticket? I now have endless ideas about how to spend my time. I get it, they’re fantasizing vicariously. But most of these folks already have their MBA’s and when I’ve asked them what they did prior to going back to school, it’s always “Oh, me? Nothing!”

That’s right all you hypocrites. You didn’t do anything either. Why? You – like me – had to worry about an unlimited supply of funds, no income for the next two years, and a mountain of debt coming your way. You also had logistical details to concern yourself with, like finding an apartment in a new city from hundreds of miles away, buying a bike, packing up all of your stuff and moving. And maybe you – like me – also had to take significant others into the equation.

So yes, while I would love to quit work right this second, I am not going to make that choice. And yes, I realize I will never have this particular period of time again, but I am going to have time to travel in my life and take extended periods of time off from work. So, yes, I still have three months to go. And that is my RANT of the week!

Yay!

Happy Easter!

Sunshine, Long walk outside, Crescent Roll hot cross buns for breakfast!

And then the Guy is coming with me to services for the first time, which I'm very excited about.

Going COBRA

Recently a friend of mine and I were sipping iced chai’s at a cute little café a few blocks from my house, and I was talking about how I wasn’t sure what to do with the one month gap I’ll have between leaving my current company and starting school, when she interrupted with:
“So are you going to go COBRA?”
Not sure if this was some kind of freaky code name for backpacking through South America, I paused.
“Huh?”
As it turns out, her mind instantly went to my one-month gap in health care. COBRA is an acronym which stands for Consolidated Omnibus Budget Reconciliation Act, which is the federal law that allows employees to continue coverage in a group health plan after quitting. Provided I’m still insured the day before I quit, I can extend my coverage up to 18 months after I leave. Good thing I’ll only need it for a month as I’m preparing myself for extreme sticker shock.

But since I am young, single and healthy, I may look at short term individual health insurance too, just to compare. Employers can charge the entire premium (so what I paid, PLUS what they paid), as well as an extra 2% for administrative costs.

I’m only paying $47 a month now, but I’m not sure how much my company is paying in my stead?

Progress toward my 2009 Net Worth Goal

My original 2009 Annual Goal was to increase my Net Worth to $46K (a $7K increase). With everything that’s happened, my savings rate has stayed pretty static – and I’m not complaining! Since I’m at $40.5 now, and assuming a $3000 bonus this summer, that means I will have to make up the other $2500 on monthly increases in my net worth. With only 4 months of work left, I’ll need to increase my net worth an average of $625 each month. So… yeah… not going to happen. By a long shot. But I think I’ll leave the lofty goal up and keep charging against it anyway.

All of this does make me think a bit more abstractly about what appropriate net worth goals are. I use all of the comparison charts on NetWorthIQ (by age, by profession, by income bracket, etc.), but what does comparing yourself to your neighbor really mean. I’m curious about what Suze would deem a good networth figure. Is it an important milestone that your networth be more than your annual gross income? Or should your networth be increasing by a certain percentage year over year? I haven’t yet found any good benchmark figures in my research, so I’ll keep my ears tuned for what else is out there.

Update on my Winter Savings Challenge with AFI

The first day of spring has passed us by, but since it’s still 30 degrees where I live, I don’t think we’re quite done with Winter… and so, as good a time as any to check in on my winter challenge to see more of the movies on the AFI Top 100 list. When I originally posted, I had 75 movies to see, and now… I still have 68 movies left. A lot. I’ve dissolved the dog fund, and can’t say that I uniformly sent in extra savings for the movie every time anyway, but in general, it’s a nice reminder overall – another reason to stay in and have fun at home rather than going out and spending money when you don’t have to! So I'm reframing this from personal finance and just making this a fun challenge for myself, as a good worldly citizen.

Next up for me on my movie list:
+ Goodfellas
+ Unforgiven
+ Pulp Fiction
+ A Clockwork Orange

Best Bets for Pretty Short-Term Investing?

The Guy warmed my heart recently and asked for my advice on where he should put his money. Due to a pretty rich (and completely unanticipated) tax refund, as well as some birthday money he received in January, the Guy confided that he’d had around $10,000 just sitting in a CHECKING account for awhile.

Gasp…. Scream…yelp…. sigh, recover.

Once recovered, I tried to put my best diagnosis skills to work.

First, I sent him photos of super expensive handbags I’ve been admiring, to give him some inspiration for my upcoming birthday (see L.A.M.B. bag at right!)

Then, I tried to consider all of the various variables he could contend with:
1. At least, getting that money in a high-interest savings account
2. Investing in CD’s
3. Investing in mutual funds, etc.
4. Paying off more of his mortgage early.

I researched a number of scenarios for him, taking all of this, plus our own situation and personalities into context. We still have a good bit of financial insecurity coming our way with me going back to school, The Guy potentially finding a new job and moving out there with me, and not knowing whether or not we will be able to rent our current condo, and if so, for how much? And what sort of costs are involved with being absentee landlords, etc? How much more expensive will our new lives be in California? That said, it’s tempting for me to recommend paying off more of the mortgage, given the fear that the monthly payment might become more unmanageable once we’re in a new set of circumstances. However, I’m pretty sure his mortgage rate is fairly low, when compared with what he could achieve with investments. Plus, he still has a lot of life left on that mortgage, so for tax purposes, the interest would be deductible.

This is in theory a fantastic time for a relatively young person like The Guy to invest in the stock market, given our long time horizons, but with all of the uncertainty ahead of us, does he really want to say sayonara to that extra cushion, for the long-haul? I think not. Plus, his retirement savings is for all intents and purposes, just fine. He doesn’t NEED a bolster there.

Which brings me to CD’s. For the Guy I’m ultimately recommending a laddered approach with CD’s, so he can still keep his extra cash relatively liquid until we’re re-settled again in the South Bay, and he can earn a far better return than keeping it where it is now. CD rates aren’t all THAT much higher than high interest online savings accounts right now… but higher is higher. Right now, it looks like his best rate out there right now with a decent time horizon is 3% on 14 months at Charter Bank. Beyond that GMAC has it on all time horizons, but their one year is 2.65%. HSBC is another good one at 2.3% for a year. I’m thinking he should put half his moola in the year long time horizon, 25% in 6 months and the last 25% in 3 months, and then keep reinvesting at better rates, since we’re (God help us) hopefully moving into a rising rate economy sooner or later.

What do you think? Good advice? Anything I’m missing in the prognosis?

April Goals and an Exciting Purchase...

April is my favorite month. It’s my birthday month, it’s Easter this year, it’s *usually* when Spring finally comes to Minnesota. And on top of that, the Guy and I have a trip to New York planned this month. So, in addition to all that, this month my goals are:

+ Finish studying for Calculus and pass my pre-b-school online tutorial.

(no small feat)

+ RUN 30 minutes 3x each week.
(I always make it to the gym at least this , but I never run... because I detest it... but I'm learning this really IS the most efficient calorie-burn for my time. And I feel so good afterwards...)

+ Cook for The Guy 3 nights a week.

(Since he's been living in a hotel in northwest Arkansas and eating out for EVERY meal for the past MONTH, I'm expecting him to be a bit of a fatty upon his return. So I've promised him that I will cook him lots of healthy meals when he's back. He's really a much better cook than me but he sometimes lacks the recipe ingenuity. So I realize this will be more like me planning our meals and picking out recipes for us to cook together 3nights per week.)

This is also the month that I’m eligible for an upgrade with AT&T, and I think the time has come for me to get an iPhone. I am justifying this as a somewhat school and career-related necessity. If I am going to be interviewing with high-tech companies like Apple, how can I afford to not be familiar with their devices? Right, I can feel you all collectively rolling your eyes at me. But whatever. So to at least partially fund this, I am giving myself the challenge of not spending even $1 – i.e. managing not to even visit Target, Costco and my favorite wine shop this month. I usually average about $100 a month at these three retailers in total, so it will make a small dent towards the iPhone purchase.

March's Selection of Amorous Books

Maybe it was The Guy being away, but I inadvertently chose two rather amorous books to read back to back this month…

Couples by John Updike
This was a rather hard title to track down. I remember it being referenced once and put it on my to-read list, but hadn’t come across it in bookstores or libraries, and finally it came up on my Book Mooch list. The copy that came to me was from 1969 – and the book is definitely reminiscent of that age. We’ve memorialized the late sixties now into a cliché, but I’ve wondered before what it felt like at the time. And especially, what it felt like for those average folks that weren’t at Woodstock or weren’t protesting. And I imagine the tone (if not the content) helps portray exactly what it felt like. Excitement and intrigue, but also an air of purposelessness and meaninglessness. The book is about 10 married couples (so many characters to keep up with that I’m having trouble powering through) living in eastern Massachusetts, who are all sleeping with each other and suspecting each other of sleeping with each other constantly, which Updike represents as no more than an “imaginative quest”. It’s been fascinating to read, although not particularly moving.

On Chesil Beach by Ian McEwan
The painfully tender account of a virginal British couple on their wedding night. I love McEwan and I love this type of writing = the type of writing which reaffirms what we as humans know – that there are always a million flashes of emotion and lack of emotion and meaning and insanity behind each day’s mundane moments. Or, another way, there is always more – always more to it than we think. But this book is so short, so quick a read, that you feel the painfulness of their stories more than you feel the rich emotional reward for having gone through it with them.