Big Financial Blunders

When I think back on what I would consider my big financial blunders since graduating from college, they don’t seem so bad. When I tried to think about them, I actually only came up with two:

+ Last minute flight a few years ago to DC to visit a friend on a whim $550
+ Falling prey to the super-expensive “spa-like” dentist and having two fillings there $800


In the long run, lessons learned, and not that big of a deal. Both are somewhat justifiable in the name of friendship and health, despite the upcharge.

Which reminds me that it’s often the smaller things – not the big things, that really tend to get you off kilter financially – just eating out too much, shopping too much, little by little. Like this month… having already gotten through 80% of my discretionary spending in 50% of the days. Sigh. What are your past financial blunders, recalled?

December (and 2008) Net Worth Wrap-Up

Despite the recent dips in the markets, when I look back on the past year of my blogging life, I realize that I really have made tremendous progress. I have a budget, where I never did before – specific, measurable goals where I previously had wishes, and a bit more confidence where I only had questions. More than that, my attitude has been focused on simply making progress. My budget is more accurate than it was even a few months ago, and I try not to get sidetracked when I have a few dips or when I disappoint myself. It’s all about the journey… I get it, and I’m happy with that.

So with all of those reflections, just past my one-year blogging anniversary, I will note for the records that I’m ending December and 2008 with a Net Worth of $39,460, nudged up nominally since November, but up a lot since I started!

Meeting with my Financial Advisor Today

I'm meeting with my financial advisor today – long overdue considering the progress I’ve made since our last meeting (a. became a personal finance blogger, b. applied to business school, c. moved in with the Guy, etc. etc.)


I completed the two update worksheets – one which had all of my income statistics and also what I hoped to be making in three years which was a lovely exercise in “who knows” now that the ceiling has come crumbling down. And the other was my monthly budget. I remember being handed this at our initial meeting and thinking it was pretty preposterous. How was I supposed to know how much I spent on all of this stuff? How naïve and not-yet-anal I was! I flew through it more or less with ease, applying a few ranges where appropriate, and was happy to see how close I was matching their categories with mine… I came up with only having a $38 surplus from my income to my expenses. We all know how quickly $38 can be sprinkled throughout multiple categories, so I’m sure that’s where it actually goes.

But it did make me think. Could I contribute $38 more to my Roth? Could I up my cash savings $38? Or more? I know it will only work when I increase something that I don’t already see. So I might just ask my friends at Northwestern Mutual to increase something without telling me. More later to report on the meeting....

Sidebar Update

HAPPY THANKSGIVING!!! Hope everyone is enjoying their own version of food and family...

Now that I'm back from my trip and my travel fund was completely depleted, I decided to reorganize and reprioritize my sidebars a bit... My #1 goal is to hit that emergency fund goal, and I am more focused there than ever. As I try to meet my 2009 Annual Net Worth Goal I am going to be more focused on balancing each month's budget based on income and expenses. I want to make sure that I am using every $1 of my twice monthly paycheck that is not spent to go into that emergency fund (vs. just hanging out in a stray checking account).



The Guy and I have decided that we're getting a dog on April 1st and our goal is to save $1000 before that time to cover dogwalking expenses. In financial terms, April 1st is SO CLOSE. So I have to get serious about this one.



Finally, I'm realizing it's not going to be even close to realistic for me to save anything substantial for grad school or a wedding right now, so I have opened that subaccount in ING, but until I get through with goals #2 and #3, I'm not going to worrry about it too much. Perhaps more focus will really help!

Are Monthly Savings Goals Best?

Just got to thinking...

Every month we do our round-up of the past month’s goals… check off how we did, and make new goals for the next month. And a lot of folks make long-term (annual) savings goals for themselves. But are these the right time horizons?

Studies have shown that people who think they’re saving for the next month think they’ll save LESS, but actually save MORE. And the people who think they’re saving for four months away think they’ll save MORE, but actually save LESS.

Implication: Short-term goals are more motivating, actionable, and set you up for success.

But what is the BEST short-term time horizon? Is it a month... or a week? Most of our financial transactions (housing, utilities, credit card payments, etc.) group up into a month’s time span, so that makes sense why we default to the month. But I’ve been noodling over whether it makes sense to have ANY shorter term goals as it relates to other expenses. After scanning my expenses, the only thing I’ve come up with is ‘eating out’ costs. The last time I tried to budget by week on my eating out costs I didn’t do very well. I tend to spend my budget in four big outings, rather than space them out over the month with more economical dinners. So maybe I could split my savings in two and try to budget over two week periods there.

Another area I haven’t really touched yet is the money I spend on food and other items at work when I use my employee badge. To date, I haven’t really worried too much about how much I’m spending on my card. It’s usually small dollar stuff on things like food. I could try to institute a weekly cap on my ‘badge spending.’ That would definitely work… although I don’t like the sound of it!

August Budget / Goals Round-Up

In August I went over my budget by $15. What hurt me were mainly gifts for others, so I’m kind of okay with that. I filled up the Guy’s tank and bought gas for some friends when they took us up north to their cabin for a weekend and bought some gifts for friends who are writing business school recommendations for me. Otherwise, it was the usual suspects – I went $75 over my clothing budget and way over on expensive dinners with the Guy.

Oops, plus I didn’t even count the fact that I finally booked my flight to ARGENTINA! Which was actually quite a steal at $1100. We’re leaving mid- November so it will be late Spring there. Any recommendations for the following cities: Buenos Aires and Mendoza, Argentina; Colonia, Uruguay; Santiago, Chile? Any and all will be appreciated. The plan is to see the sights in BA, do the wine region for a bit of indulgence mid-trip and then do some hiking and outdoorsy stuff in between Mendoza and Chile to wrap up.

Oh, we also have half a day in Miami on the way down. Anyone save the last 36hrs in Miami column or have cheapish recommendations for what to do besides South Beach?

Expense Tracking Enlightenment

Whew, I’ve been behind on posting due to some travel (stayed in a cabin and went fishing up north in Minnesota: so not me but really fun!) and some training at work (on influencing people and innovation). So far, just a headline that I’m participating in Poorer than You’s Know-Where-the-Money-Goes Challenge for the month of August. Barely halfway there, and I’ve been surprised at how enlightening and non-invasive the tracking process has been. As minor as it seems, it helped me to start on August 1. Psychologically, it’s been an issue for me when I’ve tried to track spending before – where to begin? The spending is a constantly flowing stream. I highly recommend trying it for a month, and if it helps you, starting on the first day of the month. It has kept me feeling a lot more aware and cognizant of how I’m spending.
It’s definitely been enlightening to some bad behaviors (Wow, two days in, I had spent two-weeks-worth of my eating-out allocation) and helped instill some good behaviors (Day 3, I declined a morning brunch with friends that I normally would have tagged along on unthinkingly spending another $20 on eggs and toast that I could have made for free at home). I’ve also been spending more deliberately, and prioritizing as I go. Hopefully this is the month that I WIN on my budget. And I need it to fund that travel budget – my trip is at the end of November!

Writing Down my Budget

So the name of this blog is quite deceiving. As it turns out, I don’t have a real budget yet. I have loose principles (that float around in my head) on how frugal I want to be and I definitely restrict my spending based on that. But as a newly professed pf guru, I know that sounds shady, so I have finally put pen to paper and gotten a REAL BUDGET calculated in a REAL EXCEL SPREADSHEET. Wow. Exhilaration. Here goes:

Rent & Utilities: 1,000
Food – Groceries: 150
Food & Drink – Out: 125
Entertainment & Fun: 50
Clothes etc.: 100
Gas: 100
Target-like expenses: 50
TOTAL: 1,575

This doesn’t include my automatic withdrawals and is loosely based on Mint.com reports, but at the end of April I will evaluate all of the spending on my credit card and see how realistic this might be. It’s definitely exciting to feel more in control of my expenses, and I’m determined to be realistic with what I really am going to spend so I won’t get discouraged. I think that’s been the main budget downfall in the past. Now I’m just going to be honest with myself, and work to get it where I need it to be gradually, over time.

Luxury vs. Necessity

Yay! $1000 closer to paying off my credit card! Also applied for a Citicard today though I wont be doing any real spending on it... just trying to improve my debt-to-available-credit ratio.

I found this article in the NYTimes today to be a very funny commentary on our ability to limit nonessentials. I've decided my new goal for Feb is to do just that - cut out all luxuries and limit the nonessentials to see how much I can save next month. Not sure what the right $ amt is but this will be a trial month and I will post updates along the way. Just my attempt to be hyperaware of what I'm spending. Only for one month anyway!

Mint.com

If you haven’t checked this out already, the Guy turned me onto this Mint.com site. Is essentially intended to be the “Quicken” for this generation. It’s a free online service that helps track your spending by category – restaurants, travel, etc. It also has a feature which tells you how you can save money by switching your financial institution. It was a little cryptic to me exactly where those “Save $175” figures came from, and I don’t think I’ll be switching over, especially because the phrasing “personalized offer” scares me, especially online. Right now it’s just a Beta version, so it could get better… but I’ll be using it as just a personal resource to track spending on the small stuff. (Over $500 at restaurants for November and December!!! Yikes.)