Tuesday, January 31, 2012
I know. What a wonderful guy!
This came at my request - back in November while reading Insurance for Dummies (a must-read!) as we prepared to buy a house, I asked Peanut to buy life insurance on himself that would enable me to pay off the house in full and provide additional income or a cash settlement to keep me afloat for several years (or to invest) as well as disability insurance that would cover our entire mortgage payment, were anything to happen to him. I did a lot of research to determine how much I felt I would need to receive, and I presented him with the plans I preferred. He agreed and followed up with both companies to fill out their paperwork and receive a physical exam before being approved and writing checks to solidify the purchase.
We'd never purchased individual life or disability premiums before, and the process was enlightening. I spoke with some local agents, but ultimately we ended up going through Zander Life Insurance, of Dave Ramsey recommendation fame.
The really interesting thing, to me, is the cost. A 20-year term life insurance policy for Peanut, who's in good health and has no bad habits like smoking, is $325 per year. That price is locked in for the entire 20 years he owns the policy - but year 21 will cost him $3,160 and it increases about 10% for every year thereafter. This really goes to show the benefit of buying these kinds of things when you're young! (Disability was also a few hundred dollars a year, but isn't a term policy the way life insurance is, so the costs for that are pretty boring.)
For what it's worth, we decided not to take out individual insurance for me. My company offers a standard 1x salary life insurance for free, and I can double that for about $2 a month, so I opted to do that (those are the only options - 1x for free, or 2x for double. No picking a different amount!). I also opted in to the group disability plan, for about $5 per month. But we chose not to go after additional policies from private insurers to cover me.
We have two reasons for this disparity - the difference in our salaries and the difference in our comfort levels. Peanut could afford our house without my salary pretty easily, and he's close to his family now. If something were to happen to me, he would be very sad but he would stay where he is and continue working and living in our house. I, on the other hand, would struggle at my salary if I suddenly became the only one providing for all my needs, and I live across the country from my family. If something were to happen to Peanut, I doubt I would want to live so far away from them. Whether I permanently moved back to my parents' area or not, I would probably take a leave of absence or quit my job, and I would need a way to either pay off the house or continue paying the mortgage while selling it.
We may revisit the decision on my life insurance when we have kids (if something were to happen to me, I would want to leave something behind for them) but for now, this makes the best sense for us. It's been both an unpleasant exercise as well as a very interesting one, and it's just phase one of our what-if plans. Next up, determining wills, living wills/medical directives, and that sort of thing. I think I'm just going to have to bite the bullet and sit down with a lawyer for a few hours.
Do you have private life insurance, or do you plan to get it?
Monday, January 30, 2012
2. Today I am thankful that I like my job. We're in a biannual intense sales conference right now (for THREE WEEKS) so it's a good thing I can remember why I'm doing it.
3. Money can’t buy happiness. One free thing I did last week that made me happy was going to a luau party at a friend's apartment - a great reminder that the weather won't last forever!
4. I will consider this week a success if I heal up. I hyperextended my knee yesterday doing a yoga home practice, and I'm limping around today. I have a yoga workshop lined up next week, so I need to get well!
5. When I was a kid, I wanted to be a magician when I grew up. Yep.
Sunday, January 29, 2012
I heard somewhere on the radio years ago that experts recommend parents focus on saving as much for retirement as possible before even thinking of saving for their children's college costs. After all, their children can get scholarships and take out low-interest loans. I don't believe they offer scholarships for retiring. What are your thoughts, LMM?
My opinion: It's far more important to save for retirement than for your kids' college. Period.
As Katie points out, there are no scholarships for retirement. Furthermore, there are no loans, and I am sure not counting on social security to be around in another 30 or 40 years. Therefore, Peanut and I will be focusing on our retirement rather than stashing away cash to pay for something that could be funded in other ways. We do intend to save money for our kids' college funds - just not at the expense of our own security.
Our personal experiences are vastly different from each other: his parents were unable to help him with college at all so he took out loans for the entire cost of his education. My parents gave me a free ride for my undergraduate studies. My graduate degree was paid for by my employer (1/3) and me, through savings and loans.
We are choosing a middle ground for our kids. I think the big thing that Peanut and I will focus on with our kids is understanding what college costs mean and how they affect the rest of their lives, because of our own experiences.
In Peanut's case, his parents had never been to college and they didn't understand the non-obvious differences between private, public, and for-profit schools or the nuances of the different loans that were taken out for him, some in his name and some in theirs. Had he gone to a state school instead of starting out at a private university and finishing at a for-profit school, he could probably have graduated with much less than $70,000 in loans. He also feels that his education from a for-profit school was not as good as another school might have been, because at a for-profit school, the students are essentially customers and you keep the customers happy by never failing them and you don't push them too hard. (He managed to get a good education for himself and got a good job that he likes, but many of his classmates were not so lucky, and it doesn't have anything to do with the recession.)
In my situation, I felt a lot of resentment about the deal that was offered to me. I didn't want to go to a religious college, but that was the deal that I was given: church school or I was completely on my own. I probably wouldn't have qualified for any financial aid because of my parents' income, but I didn't even know how to find out, because they refused to help me discover other options besides the school they wanted me to go to. I didn't get to do any campus visits other than their choice, and they wouldn't provide their financial information for a FAFSA for any other school (they filled it out and mailed it in for the one they wanted me to attend; I didn't get to see it)*. I didn't feel a lot of ownership over my education. I didn't try for any scholarships or grants. I made a point not to get attached to the school or the people there, I didn't work terribly hard on my grades and I left campus every weekend. In short, I got a degree, but I didn't have a nice college experience, which is as important as the education you're paying for.
All of this is in direct contrast to my graduate education, which I undertook completely on my own, and which was a totally different experience in every possible way. I think that's probably true of grad school in general, since you're older and you're not going because, well, you know, you graduated high school and now you go to college because that's just what you do. But determining a school for myself, comparing my options, and the entire financial aid process were all new experiences for me and I took a lot of ownership for that, and I am very proud of my straight-A grad school GPA, earned while I was working full time.
Because of these experiences, Peanut and I would like to educate our kids about what college costs and how those costs can affect the rest of their lives. We'd like to come up with an arrangement that encourages them to take ownership of their education from the very beginning, and to participate in this transitional period of their lives by paying some of their own way. We plan to be honest with them about our financial situation and what we can afford to help them with and why we choose our priorities. We're already maxing out Roth IRAs each year and contributing to our employer plans up to the match, and otherwise building a secure present and future for our kids. We'll be able to save something for them for college, but we'll be focusing on increasing our retirement savings at the same time, so their educational accounts will always be a step below our retirement in priority.
What do you think? Do you prioritize saving for your own retirement or your kids' college funds first and foremost, and why?
*To be fair, my parents both graduated from that school, and they now live and work there. They weren't being unduly mean - they felt it was important for me to live in a Christian environment and find a spouse who was part of that lifestyle. They both loved going to school there, and they really couldn't comprehend that their kids wouldn't also love it. Their method was faulty, but their hearts were in the right place.
Saturday, January 28, 2012
I love this post by Cate. Love, love, love it. I've been recognizing this tendency in myself, too, imagining a morning where I have time to do some things around the house before leaving for work but (in real life) hanging out in bed reading the news on my phone until the last possible minute. Noticing self-sabotage is the first step in changing it!
This is a really interesting decision by JC Penney - do away with sales, all merchandise is 40% off, all the time.
This book totally looks like something I'd enjoy - and yay for pantry organization tips! (via Unclutterer)
Lifehacker hacks your identity theft prevention attempts by giving you additional terms for Google Alerts to keep an eye on.
Thursday, January 26, 2012
Then there are things that just make me feel broke - things that make me feel like I will never get ahead, will never have to stop worrying about my money, things that I wouldn't want other people to know that I'm doing.
Things that make me feel smart about money:
- contributing to retirement even when the markets are down or volatile
- paying extra on my student loans or mortgage
- pairing coupons with a sale at the grocery store
- ordering from the kids menu (if there's no age requirement)
- ordering only water when dining out instead of soda or alcohol
- asking for discounts/credits to a bill (such as when my internet goes out for a few days, or if I get spam text messages)
- using the library
- unplugging appliances that are not in use
- cooking from scratch as much as possible
Things that just make me feel broke (or would if I did them):
Note: these are actual frugal tips I've seen in books or on blogs.
- saving the bits of deodorant to melt them together to make a new stick
- washing ziploc baggies to reuse (I wish this didn't make me feel broke, since it's good for the environment! Instead, I just try to avoid using baggies altogether.)
- sprinkling my head with baby powder to go longer between shampoos
- only buying groceries or toiletries for which I have a coupon
- arguing about splitting a bill strictly along the orders (I like paying the bill this way - but not arguing about it)
- haggling on prices in big box stores like Target
- cheaping out on gifts to friends and family
- not traveling to visit family
- giving up my cell phone
I think these decisions vary from person to person, so the lists are above are what's true for me.
What makes YOU feel smart about money, and what makes you feel poor?
Wednesday, January 25, 2012
As I mentioned recently, I feel like I have a bunch of stuff I don't love. An example is a pair of leopard print rain boots. I looked everywhere for rain boots that I liked that were less than $25, and I finally found these a year or two ago at some cheap store in SoHo. And I hate them.
They're really heavy to wear--exhausting, even. They're not really all that cute. But most infuriating is the little "comfort pad" thing in the bottom of the boot. This thing is essential to actually wearing the boots, since they're painful without it. But it's not fastened to the inside of the boot in any way, and as I wear them, the comfort pad will work its way all the up the boot until it's in danger of falling out. I kid you not. I've tried everything--wearing two pairs of socks, supergluing it (there's nothing to attach it to!! That's why the boots are uncomfortable!!)--and they're awful. I don't think I've worn them since last spring. Instead, even in the summer, I wear my snow boots when it's pouring and I can't get away with wearing some other shoe, like rubber flipflops (gross).
But I still have these stupid leopard print boots, because I looked for them for so long and I don't feel like I've got my money's worth out of them. I know, not even all that deep down, that I will never, ever wear them again, unless maybe all my other shoes are stolen. Even then, I'd be tempted to go barefoot first.
This is just one footwear example, and there are other things that I know I don't want (hello, all the clothes my mother sends me). The problem is I do believe in "Use it up, wear it out, make it do, or do without" which sort of goes against the whole decluttering mantra. Why throw it out when there really is some useful life left in it? And then another frugal argument is Why keep storing it? That costs money too!
Do you ever feel like frugality and decluttering are at odds?
Tuesday, January 24, 2012
We had saved up almost $30,000 when we were ready to start looking (this is in addition to our $10,000 emergency fund). We weren't sure how much money we were going to need for a downpayment, or how much we would qualify for, or really anything else. So we decided to get pre-qualified to see what was realistic and how much longer we'd need to save. We were thinking we could afford a house that was from $200,000 to $230,000, but we weren't even sure what was out there in that price range.
We'd been recommended a mortgage broker already, so we filled out the form on her website and emailed her a bunch of bank statements and tax paperwork. We met with her a few days later, and she went over things in detail. Peanut and I have pretty good credit (in the mid-700s; his combined scores beat my combined scores by one point) and, along with our downpayment (which they calculated as being every last bit of the money we had in savings), we qualified for a mortgage of $450,000.
Well, you could have knocked me over with a feather. Around here, that would buy a really nice house - and you'd get a really big mortgage payment to go along with it.
The mortgage broker also went over all the closing costs - fees charged by the county, the lender, the notary, the title company, the insurance company, and a million other people to handle the actual transaction of purchasing a house. Those fees added up quickly, even though we got a discount from the broker from the referral we'd received. Still, though - they were affordable with our existing savings if we were comfortable going with a 10% downpayment instead of a 20%.
We were delighted to know that we qualified for enough to buy a house in the range we had in mind and even higher, had enough for a "good" downpayment, and could afford the closing costs, so we started to figure out how much of a monthly payment we felt comfortable with. We knew it would be more than rent for our apartment, but decided that we wanted to keep it doable on one salary, and unofficially, wanted to keep it lower than our rent in New York, which was $1444 when I left in June.
The next step, of course, was looking for a house, which we found on our first day out. Then a bunch of negotiations with the sellers (not about price, incidentally, but closing dates and moving dates - don't buy a house just before the holidays!) and voila - we were ready to close.
What do you really want to know? Hard numbers? Okay:
House list price: $235,000
Offer: $230,000 (we probably could have haggled here a little more)
Appraisal: $233,000 (but not too much, as they had priced it just right)
One time fees
Appraisal fee: $450
Inspection: free (family member)
Down payment: $23,000
Closing costs: $8,066.38
Principal and interest: $988.25
Home owners' policy: $75.42
County taxes: $242.37 (will probably go up a bit in June, since the appraisal came in higher than what the sellers had on their tax forms)
Mortgage insurance: $86.25 ($1,035 per year - way more important to kill our 6% student loans before focusing on this!)
Total monthly payment: $1392.29
A few things to note
Although we were approved for a much larger number than we originally thought we could afford, we wound up buying within our original budget. And yes, I did look at some more expensive houses - as soon as we knew we could spend more, I started searching for places from $230,000-$280,000. But ultimately, it made more sense to go cheaper. I think this just goes to show that when you pay close attention to your finances, your gut instinct is frequently right on target.
More important than the total cost of the house was the actual monthly cost. We can easily afford this payment on Peanut's salary alone, or if things were really super tightened, on my salary alone - which was very important to us. We don't want to be tied to jobs because of our house payment. If one of us gets fired or needs to (or wants to!) stay home with a baby, we are capable of doing that, even though we have a mortgage payment.
One more nifty number:
Equity we own: $26,000 (11%)
The amortization schedule is kind of horrifying - it shows just how much of our $988.25 payment goes towards interest and how much towards principal, and it really, truly is almost all interest for the first several years. Still, between what we'll pay into it and the way the value of the house might go up (which seems to be the trend now in our area), we'll probably have 20% equity sooner than the lender forecast, which is November of 2017. To have the PMI canceled, we'll have to alert the lender that we believe we've reached 20% equity and they will set up an appraisal. It'd be nice for that to happen early, but I'm not going to sweat it.
So. That's what it took to buy our house. I'm trying to recover from shock every time I look at our savings account balance, which is back down to our bare emergency fund. I kind of got used to seeing such a higher number in there, but I know that we're covered for the majority of emergencies that would come our way, and now I want to focus on building up savings for our big-ticket purchases: a second car, a built-in bookshelf/desk situation, guest room furniture, new living room furniture, new pots and pans, etc....
Any questions on how we bought our house?
Monday, January 23, 2012
Sunday, January 22, 2012
Which brings me to a second quick thing - I'm going to update my blogroll in the next couple of weeks, so if you're not included and you'd like to be, please leave me a comment with your blog URL so I can check it out!
A third quick note - thanks to those of you on Twitter who had suggestions for my 20-person brunch extravaganza this morning. Egg casserole FTW!
Most personal finance articles out there instruct readers how to dig themselves out of whatever financial ditch they may be in. Whether that means paying off debts, learning to cut monthly expenses, or setting up a simple budget, the emphasis is always on correcting spending behaviors to achieve some semblance of financial stability. But what happens when you've already accomplished your basic financial goals, like paying off debt? What if you got a job in which you suddenly make more money than you are used to? Here are a few tips for planning for what comes next.
1. It's never too early to start planning your retirement.
Retirement saving is one area of personal finance that is almost unilaterally ignored by those under 40. Once you've finally found yourself in a position in which you've eliminated all or most of your debt, it's really time to start thinking about saving more aggressively for retirement. Even if you think your 401k offered through your employer is already doing the planning for you, the costs of retirement is skyrocketing, and even employers admit that their 401ks are not sufficient. Start looking into an IRA account, as well as these other retirement options.
2. Put away extra money into an emergency fund.
It may seem like a hassle to set aside money for an emergency, especially when emergencies rarely happen. Even if you do not anticipate suddenly losing your job, there are millions more typical scenarios that can require several hundred or thousands of dollars on short notice. For example, what if your child falls sick and needs hospital treatment? What if you or your spouse are unexpectedly pregnant and must take time off from work for a long period of time? What if your car breaks down and needs substantial repairs? Build an emergency fund that can cover at least three to six months of living expenses so that you can handle whatever slings and arrows life may throw your way.
3. If you have (or plan on having) kids, get serious about saving for college.
Just like it's never too early to start planning your retirement, it's never too early to start saving for your children's college. You can even start saving before your children are born. While it may seem unnecessary now, consider that in the future, college degrees will be much more expensive than they are at present (if you can even imagine that!). Also, consider that a bachelor's degree is now as standard and essential as a high school degree, it's likely that your children will need more than just a BA to succeed in many careers. Look into different college savings plans, like 529s.
4. Revisit your long-term career goals.
Now that you are in a position in which you can do more with the money you have, it may be time to begin serious research into your long-term career goals. Have you ever dreamed of opening your own business, going back to school to switch career tracks, etc.? You may have forgotten completely about these goals while you were still mired in debt. Now, you have the spending power to take the next step in your future. Don't squander it!
Of course, this all isn’t to say that you shouldn't enjoy life now that you have accomplished financial goals that take many their entire lives. You should certainly enhance your lifestyle now that you can afford to. At the same time, remember that planning for the future will ensure financial health for the rest of you and your family's lives.
Saturday, January 21, 2012
Lifehacker takes on prioritization - especially when everything is important. The comments on this one have some great recommendations too!
As a new home (and appliance owner), I thank Trent for alerting me that there is, in fact, a second dryer lint trap I should be cleaning out. I found our external vent, but anything inside of it is well and frozen right now, so I'm making a note to myself when the weather gets above 40 degrees or so to go take another look at it.
A great reminder that when you do something repeatedly, you are in fact practicing to do it even more. Make what you practice a conscious decision.
Awesome. Budgets are Sexy on all the stuff new home owners never think about. I think I need to have a little lie-down. (Luckily, all our appliances are relatively new, the roof and siding are brand-new, and the furnace has about half its lifespan left. We're still going to bulk up the emergency fund to cover the most expensive fix, and then some.)
I'm interested in ALL the books on this reading list from Small Notebook.
I love this little reminder that we're all only human, and often struggling for the same things.
I avoid blogs that send only snippets out in their feed - even if I love the blog, I simply don't have time to click through to a site to read it (plus, I read my feeds usually at work on my lunch break, and I don't like to click through to sites that may be viewable by my IT department). FullTextRSSFeed.com lets me subscribe to a feed that sends snippets but will put the entire post in my reader! I'm trying it out and it appears to be working - so yay! I get to read one of my favorite blogs again.
I was included in the Festival of Frugality hosted by Magical Penny. Thanks!
Online resources for living a more intentional life (via My Pretty Pennies)
Money Q&A lists four benefits for buying a house
This week's PSA - please back up your blogs! Instructions for how to do so with Blogger's new tool are here (at the bottom).
Don't forget about the Money Pros Index Fund Challenge! Currently I'm right in the middle of the pack, up almost 5% overall. I wonder how that compares to my actual investments?
One last item from The Simple Dollar - don't let the power of brand preferences keep you from making the smartest purchases!
Friday, January 20, 2012
* What's that smell?
* What's that noise?
* Is it supposed to do that?
* Where do you think that goes?
* What's that cable/pipe for?
* I have to pay for that separately?
* Want to go to Home Depot?
* Want to go to Home Depot...again?
* Where do we keep the toilet paper/cups/socks here?
* Do you think we got our whole security deposit back?
* All of our furniture looks weird here; I want new stuff.
* I bet the sellers knew about that.
* A plumber costs how much?
* Did you call your dad to see what he thinks about it?
* Which of these keys do you think unlocks that?
* Did you SEE that bug?
* Wait, we have to shovel how much of the sidewalk?
* I love this house!
Tuesday, January 17, 2012
2. Today I am thankful for the move being over, starting to feel settled, and Peanut.
3. Money can’t buy happiness. One free thing I did last week that made me happy was read a great book from the library.
4. I will consider this week a success if I make it to a yoga class!
5. My purse contains my wallet, a small notebook, my phone, and a small pouch containing earbuds, chapstick and toothpicks. It's normally more full than that, but I seem to have pared down significantly with this move! It actually feels way too empty, and makes me want to get a new, smaller sized purse - but that's seriously unnecessary right now. Instead, I guess I'll go find some junk to put inside it. :)
Tuesday, January 10, 2012
So we got approved for a mortgage, somewhat on a whim, and then we found a house on our first day looking. Since then I've been fretting about all the costs we're facing, but mainly I've been thrilled to my toes with the decision we made. I love this house so much.
It's a 1950 Cape Cod with the cutest upstairs dormer windows. It has three bedrooms and 1.5 baths, a half-finished basement and the most beautiful landscaped backyard. The living/dining room has a cove ceiling and charming onion-arched doorways. The front door is purpleish - which if you know me in real life means you know that it is no surprise I picked this house (the kitchen/backdoor will eventually get painted purple too!) (which, Peanut, if you're reading this - by the way, I want to paint that door purple. xo). We've got hardwood, tile, and carpet. The roof and siding is all brand new. It smells terrific, and the previous owners left us a sweet note on the wall in the crawl space - just below the note that was left to them when they bought it. Apparently, this house has been filled with people who want to pass on good vibes!
I'm spending all my time now looking for design ideas - most of the rooms are quite colorful and I'm okay with that but there are two rooms I REALLY want to change (master bedroom and main bathroom - both blue) and one room I'd like to change (kitchen - kind of a boring yellow). The other rooms are lovely and fine (living room - blue, guest room - gray/brown, small bathroom - dark brown, eventual nursery - green). The house needs no work at all - eventually we may decide to expand the "nursery" into the crawl space but that's a ways off. Part of what we loved about this place was that it's move-in ready - up to date appliances, floors in good shape, fresh paint, etc. It's amazing.
I'm also looking for furnishings! We'll be scouring Craigslist and thrift stores - eventually I want a second bed, some side tables, a dining table and chairs (or maybe just new chairs - mine are literally falling apart), a three piece seating set, matching desks and comfortable desk chairs, and a pool table. Wait, what? No, that last thing is something PEANUT wants, not me. I want to put a bowling alley in the basement instead.
I'll devote a separate post to the financial specifics, as right now I just want to revel in the details of my own home - a place where we'll live for the foreseeable future. That's the first time I've moved in to somewhere without a somewhat definite plan to leave. I didn't expect that putting down roots would help me feel so....grounded, but it really does.
What were you looking for or do you want to have in your first home? What else - if anything - would you like to know about ours?
Monday, January 9, 2012
2. Today I am thankful for Peanut. As I was writing this post I got an email from him with the subject "To the prettiest girl in the whole world." MELT!
3. Money can’t buy happiness. One free thing I did last week that made me happy was check out eighty gazillion books on home repair and maintenance. My favorite so far: The Virgin Homeowner.
4. I will consider this week a success if I don't succumb to a raging headcold. Oh, and if we successfully move into our house!
5. If I could change one thing about my home I'd be living there already. :)
Sunday, January 8, 2012
Priceonomics - great timing considering how much furniture I'm about to start scoring off Craigslist.
Add Vodka does a food inventory and is startled to see how much she has in her cupboards. I haven't ever done a food inventory but I'd tell you that I'm always likely to have on hand: flour (all purpose, whole wheat, bread, semolina), frozen chicken breasts (breaded and plain), garlic, tortilla chips, oatmeal, white rice, milk, cheese, eggs, some sort of pasta, frozen homemade pizza sauce cubes, baby carrots, and ramen. I'd like to get to a point where I am stocking up on other staples regularly but I still tend to shop like I did in New York: by week, buying only what is needed that week and picking up fresh produce and milk every few days.
I love Katy's description of her frugal activities!
Lipton Onion Soup Mix is the only soup mix I buy - but now that I can make it at home, I won't have to!
20Something Finances details 2012 tax bracket changes. The money quote: "This may also be a good time to revisit what your overall adjusted gross income might be this year and adjust your tax allowances so that you don't end up getting penalized for owing too much in taxes or getting too big of a refund (lending your money to the government, interest-free)." (Ahem, note to self, LMM.)
Great reasons to have a small home. While 1,500 square feet sounds palatial coming from New York City apartments, we realize that it makes for a fairly small single family dwelling.
Stop yourself from saving too much, via The Consumerist. Favorite quote: "Money exists for commerce, and if not for today's commerce, for some time in the future. Money cannot be a goal on its own because it has no meaning, no function beyond what it can be traded for in exchange."
Wondered what phrases like enriched, fortified, organic, sustainable and more? What common grocery store labels mean.
The perfect example of conscious spending: Tammy from Rowdy Kittens gets an iPhone! I love her explanation of how this was a great purchase for her commitments to her lifestyle. I want to introduce this kind of justification to my own shopping habits.
WiseBread introduces me to boomerang - send emails later with gmail. I've been wishing for this! (The whole post is full of good ideas)
7 signs we're in a post-private world - this is a fantastic article about how the world works today.
Trent discusses the 10-second rule and the 30-day rule.
Reality check - this guy ordered commonly advertised fast food items and compared pictures of those items to advertisements. Hmm.
I've been tracking my spending for....well, longer than I've had this blog, so at least five or six years. I find it incredibly useful - first for keeping to a budget and now for giving me an overview such that I don't feel a need for a strict budget anymore. It shows patterns, helps me encourage savings, and acts as a spending mitigator (if I don't want to have to report the spending...maybe I shouldn't buy it!).
I'm now becoming aware of the usefulness of tracking other things in your life as well. I know people track things like:
- temperature (for fertility planning)
- debt repayment
- times at the gym
- car mileage
- books read, books to read
- home repairs/maintenance
I'm working on a spreadsheet that will allow me to track all of my trackable New Year's Resolutions as well as any monthly goals - think of it like a slightly grown-up version of a sticker chart. The two biggest criteria for my spreadsheet are that it be quick and easy to use (or else I won't use it!) and that it be available anywhere (so I can update it on the go instead of trying to remember it later). I'm thinking a Google doc but if anyone knows of a free iPhone app, I'd take that too.
I feel a little bit like Benjamin Franklin, when he first put together a chart to track his 13 virtues, or maybe Gretchen Rubin, with her Happiness Project score chart. Five minutes a day to track certain behaviors or situations has given me all sorts of clarity ranging from discovering that our bathtub needs to be cleaned to being able to predict when my face will break out. It's awesome.
Do you track anything in your life? What's missing from my list? How do you keep document the things you're tracking?
Thursday, January 5, 2012
Coupons are a popular marketing tool that many companies use to boost sales. Traditionally, coupons were distributed by retailers or manufacturers through newspapers and magazines. Today, coupons can be printed straight from the Internet and better still, they can be accessed via mobile devices.However, coupons can still be found in newspapers and magazines, as well as from the inside of packaging.
The concept of couponing
The idea behind a coupon is pretty basic. When buying an item, a buyer presents a card or ticket designated with that item, and then he is offered a rebate or discount when the sale is through.
The history of couponing is an enchanting tale rooted in the inventive marketing strategies of the Coca-Cola Company back in 1888. Asa Candler, through the company's sales representatives, distributed the very first coupons to potential customers. In order to make up for the free drinks, the company offered free syrup to soda fountains. By 1895, Coca-Cola was being served in every state in the US and, this new form of aggressive marketing had catapulted Coca-Cola into a popular soda drink from the obscure sweet tonic it was just a few years before. Approximately 8.5 million tickets had been redeemed by 1913, which translated into one in nine Americans.
Coupons became widely used once again when in 1909, C.W Post launched the first breakfast cereal coupons. The entrepreneur distributed paper vouchers in exchange for a discount of one cent on his breakfast cereals. The use of coupons had tremendously grown by the 1930s during the great depression, when families barely scraped a living. With the widespread use of coupons, people managed to save a few pennies off their grocery shopping.
By the early 1940s, big chain stores had joined the coupon bandwagon and had started using coupons on a mass scale in a bid to dissuade customers away from mom and pop stores. The move was greatly successful and a lot of shoppers started shunning smaller stores for large chain stores. Those who stuck with the smaller stores mainly did so for novelty reasons.
Throughout the 1940s and the 1950s, coupon usage grew exponentially and by the mid 1960s, almost half of all homes in the US were shopping with coupons, which they cut out of their weekend newspapers. Couponing remained the standard for grocery shopping for nearly the next thirty years that followed, until the advent of the Internet.
The Internet came with a lot of convenience for shoppers to the detriment of the coupon. For almost two decades, coupon usage faded significantly until all-inclusive coupon websites were created as a go between for savvy shoppers and retailers or manufacturers. Americans can now just go online and browse for the particular coupons they want, instead of clipping them from the Sunday papers.
Summary of notable timelines in the history of couponing
1888: The coupon concept is"born" when Asa Candler offers free glasses of Coca-Cola for used paper tickets
1909: C W Post adopts the coupon concept for marketing his Grape Nuts cereals.
1930: Coupon usage picks momentum throughout the great depression.
1940: Big chain stores join the coupon bandwagon to increase customers.
1957: A coupon-clearing house, the Nielsen Coupon Clearing House, was formed specifically for that purpose.
1965: Almost half of the US population go coupon crazy.
1990: The Internet changes the coupon game, making downloadable and online coupons available.
1992: The coupon frenzy finally starts to wane, for almost the next two decades.
2009: The US government uses couponing as a promotion tool for digital television migration.
Certainly, coupons have been rejuvenated in the 21st century and in these hard economic times, they seem to have come back with a bang!
Monday, January 2, 2012
2. Buy a second car with cash. This why is also pretty clear: Peanut and I expect to need a second car this spring. I want to be able to pay cash for this one as well, meaning that if we get it before June, we'll have purchased two cars outright in less than a year. (Something I hope to never repeat again.)
3. Flirt with The Compact. The why: I really admire people who stick to The Compact - their ability to find great previously owned items, their commitment to the environment, their acceptance of what they already have. I'm not sure if I have the willpower to stick with it myself, so instead of setting myself up for failure, I am committing to at least think about The Compact before every purchase. I'm working on creating some sort of reminder card or token I can keep in my wallet.
4. Pay extra on our student loans. The why: Our combined student loan payments are around $400 per month. If we pay just $500 a month, we cut almost a third of the time it'll take to pay off the loans, not to mention how much that would save over the life of the loans. This year, I resolve to pay that extra $97 per month all year long.
6. Develop a yoga home practice of three days per week, or 156 sessions. The why: I want to progress in my practice faster than 52 classes will allow me to. There are positions I want to master that require practice on my own. I also want to prevent myself from using money or weather or other excuses as reasons not to work on my physical strength and inner peace, and developing a home yoga practice answers those excuses. This one does need to be fairly regular to be useful, but I also want to give myself the ability to be flexible. (ha ha!)
7. Become a better conversationalist. The why: I'm an introvert and this is something I struggle with. I feel self-conscious at parties where I don't know a lot of people or around my new extended family of in-laws. I want to develop skills to put me at ease in these types of situations, which I will run into for the rest of my life. I'll read some books on the subject, develop lists of questions to ask people about themselves, and just...try. (Interestingly, I'm not afraid of public speaking at all. I regularly speak in front of students or other crowds, and have addressed thousands of people at a time without batting an eye. It's the one-on-one conversations that freak me out.)
8. Read more than 100 books, including a number of classics. The why: I always want to read more than 100 books a year, but I'm being pulled towards the classics this year, I think as a rebuttal to all the brand-new not-even-out-yet books I read in 2011. Some of my picks include Les Miserables, Dracula, Great Expectations, Babbit, Tess of the D'Urbervilles, Middlemarch, and some Sherlock Holmes. Please leave recommendations in the comments!
9. Nest in my HOUSE. The why: WHY NOT?! This is the first place I'll live in where I can paint, make changes, and settle down. I want to make sure to take advantage of that, and not just sort of live there without changing the colors, putting anything on the walls or buying outdoor furniture. That's how I'm used to living, so it will be a bit of a struggle to change my ways. This is a resolution partially in conflict with #3, Flirt with The Compact, which is why I gave myself a bit of an out there. I'm an underbuyer, so it's hard for me to work up the gumption to spend money on non-necessities - I don't want to put more obstacles in my way. I will, however, be looking for pre-owned stuff before popping over to Ikea or whatever.
10. Get wills, living wills, and in-case-of-emergency paperwork in order. The why: it's important. I've made bits of this resolution a goal many a month, but just haven't got anything squared away. Perhaps as a resolution it'll fare better.
12. Travel with my mom and sister. The why: I don't think we've done this in many years, and we keep talking about doing it. Of course, this will require their participation, but we've got a plan and I'm really going to push to make it happen. Aside from this, I don't expect to make many travel plans this year, so I want this one to count.
There you have it - my 12 resolutions for 2012. I've bookmarked this page and started a chart to track my progress on these goals. I'm heading into the new year with confidence that all of these goals can be achieved and then some.
What about you? Making resolutions? Think the whole thing's a sham? Got any recommendations for my classics reading list - or books I should read no matter when they were published?
Sunday, January 1, 2012
Food - groceries: 3,150.04
Food - eating out: 4,461.57
Rent: 15,425.23 (includes two months of double rent)
Travel: 4,202.16 (includes multiple trips back and forth to visit while we were living apart, several trips to see my family, and a few weddings)
Hobbies, misc: 48.34
Grand total: $57,433.12
401(k) contributions: $1,292.85 (plus 3% of employer matching, which isn't counted here)
Roth IRA contributions: $10,000
Total Retirement Contributions: $11,292.85
Student loan payments: 13,539.74
Student loan interest charged: 4,155.74
Difference in debt load: $9,395.70
You can compare these numbers to last year's numbers here.
Things of Note:
We seem to be experiencing some lifestyle creep with our spending! Luckily, some of these numbers are one-time expenses, such as buying the car and moving cross-country. We also did a lot of traveling compared to last year, and it was nice to see family and friends so frequently. Still, we've spent a lot more than we need to on non-necessities like eating out, entertainment, and clothes. And frankly, our charitable giving is abysmal. I'm trying to tell myself I also donated a LOT of goods when we moved - stuff in great condition - but I still feel that we should do more with giving money, too.
Retirement contributions are way down this year, because I was the only one with access to a 401(k), and then for less than half the year. We signed up immediately for 401(k)s with matching at our current employers, but we have been in the waiting period for them to start. We maxed out our Roths early in the year and have been trying not to pay too much attention to the losses and gains of the stock market.
It's a little demoralizing to see the difference in what we pay on our student loans versus how much the principal actually goes down. I'd like to be more aggressive about paying them down, but the payments are manageable and we've had a lot of big ticket things to save up for. At the rate we're going, we'd be able to pay off the balance within five years, and although I think we can do it faster than that, I can also live with that timeframe.
In short, 2011 was a year of saving like mad and then spending much of that savings on big-ticket items. I can't say that 2012 will be different, since all of our savings (except for the emergency fund!) will be spent on a house. We'll then be saving for more big-ticket items like furniture and a second car, as well as building a larger emergency fund thanks to our larger capacity for emergencies and high deductible health insurance plan.
1. Sell costumes. Utter failure. I've started the email to handle this but haven't sent it.
2. Finish "In Case of" file, research wills and medical directives, and make any arrangements to finalize them. Fail - Peanut has gotten life and disability insurance, but I haven't done anything on any of the other stuff. Just too busy!
3. Stand on my head every day. I give myself a B+. I've done this almost every day, and the exceptions were days when I was home sick and hardly able to lift myself off the couch - and I think one day of travel I forgot to do it also. I've seen a big improvement in my ability to get upside down and stay there, and I even did it in a class! That's something I've always been scared to try.
4. Stay under budget for Christmas, including gifts and travel. Success! I didn't set a budget, per se, but we traveled very cheaply and gifts were not expensive this year. That $3 gift challenge on the big side of my family really helped.
5. Start packing - to move into our HOUSE! Packing has started! We're moving three weeks sooner than we thought, so this one was pretty easy to complete.
2. Live as cheaply as possible. We won't be able to figure out a new budget for a few months, but we've got a list a mile long of things we want to buy and we need to start saving for them. Cooking at home, bringing lunches to work, and not buying anything but food - that'll help.
3. Go to four yoga classes. Hold me accountable!
4. Decide which color to paint the new rooms. I'm torn between painting before moving in (no stuff in the way!) and after moving in, and I think that time is just going to end up making the decision for me. I'm really stumped on what colors I want to use in the bathroom and master bedroom anyway, so maybe living with it is a good idea.
5. Do not buy any new clothes. I shouldn't even have to say this but my spending tracker shows three months in a row of random clothing purchases and it's got to stop right now!
What are your goals for January?