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Home > Archive: May, 2007

Archive for May, 2007

Why I don't pinch pennies

May 9th, 2007 at 03:26 pm

To me, penny pinching is not just about saving, it's a mindset that money is all important.I do not micromanage my budget because it makes me unhappy. Constantly thinking about saving a dollar here or there would make me depressed. To me, if I buy something and it makes me happy, it's much more important than the exact price. Don't get me wrong, price does matter, but only in a larger sense. I have a certain price threshold above which I'm reluctant to go, if an item is priced equal or less than I am willing to pay for it, I will have no regrets paying that price for it.

I also try not to buy stuff "because it's on sale" or "because I have a coupon". Before I walk into a store I know what I want to buy; I do not walk into a store with a "get $10 off $20" coupon and browse the store for something I like of $20 or more. On the other hand, I hate shopping, so I rarely walk into stores in the first place....

Here's the general plan I follow for saving:
1) Set a goal (weekly, monthly or yearly) for saving as a whole (.ie. save $500 this month).
2) I plan a budget to fit that goal
3) During the saving term I keep my eyes open for significant overspending
4) I analyze my spending in relation with my budget and savings goal at the end of the saving term.
5) In response I either tweak the next term's budget OR savings goal. I try to take into account both financial viability and my personal happiness.
6) I consult my fiance about the new goal and, if necessary, changes we need to make in our lifestyle to accomodate the new budget.
7) I also project a long term savings trend to keep us on track towards financial independence at the end of our careers.

Where Have I Travelled?

May 8th, 2007 at 07:33 am

Here are the states I've been in

And here are the countries I've been to:

My honeymoon will bring me to Africa, and I would like to cross South America off the list within 5 years too!


May 4th, 2007 at 02:37 pm

It seems so trivial when I'm talking about saving $xxxx and spending $xxxx when people die of hunger all over the world. Although I understand that we cannot remedy all injustices in an instance, there are somethings we can do to make it better. Right?

My question is, what is the best relief agency out there? I am currently member of "Food for the Hungry" (www.fh.org), but are there better organizations to donate to? Why did I choose this organization? It seemed like a reputable organization, it seemed to specifically target hunger, their donation options are automated and flexible and you can specify where your money goes.

Well...I didn't do much, but I have a recurring donation of $10/mo. I might increase that after my wedding finances are settled. The $10/mo. is about half the interest I make on my saving accounts so I thought it was a good place to start.

What I also wanted to know, are there any secular non-governmental agencies out there that do relief work? If you know one, please let me know. Thx.

Turned the heat off

May 4th, 2007 at 07:07 am

Today's high is 71, last night's low was 40. Even though the evenings are chilly, I decided to turn off the heat on tuesday. The temperature indoors has dropped to 63F this morning, which is bearable. I calculated, that with the heat on (5AM-8AM,5PM-11PM), and with chilly nights, it would cost us about $3/day, so it is defenitely worth it. This winter's coldest bill cycle cost us $7.24/day with an average temperature of 16F. In all it was a very mild winter with only that cold bill cycle having an average temperature of less than 29F. The next coldest were: 29F, 35F, 37F, 42F and 42F. The total heating cost for the winter (and therefore the entire year) was $794 (over 7 month), with an expected $30 for our last bill. We are lucky we live in a well insulated house! Our AC season will be from June to September and last year we spent no more than $40/month on cooling. Our July cycle was $90 while our latest (April cycle) electricity bill was $70! On the other hand, we have an electrical water heater and stove, that's where our winter electricity goes! In any case, we hope to be holding out as long as possible without AC this summer...

I love to see things grow

May 3rd, 2007 at 01:46 pm

I'm not a patient person, but I love to see things grow. That's why I love to tend to my finances. That's also why I love to grow peppers. Why peppers? Because you can put them in a pot, and put them on your desk at work. You start in March with a 100 seeds, you have 50 seedlings in April. And if you're lucky, you'll have 10-20 nice plants in may. And if the weather is good, you'll have plenty of Jalapenos, Bell Peppers and Cayennes from July to October. Last year, my office pepper got destroyed by aphids, this year I hope to have more luck (if not, I will release some lady bugs in the office). I have about 50 seedlings sitting in the sun at home, hoping I'll have a nice office plant once again when June rolls around.

Get Quicken or MS Money (if you want to get serious about personal finance)

May 3rd, 2007 at 01:17 pm

I was told by one of my friends...And I am glad I've started using this software. I paid $40 for MS Money, and it works great. It saves me so much time in tracking my finances, setting my budget, watching my spending, and planning for the future.

Now, I do concede that it takes a while to set up and learn. But once you have established a setup for connecting to your banks (electronically) everything is just a piece of cake. I track both my 2 checking accounts, 2 savings accounts, 2 credit cards, and all my fiance's accounts.

Since we charge most our purchases on CC (no cash). It automatically knows the payee, and it will (95% of the time) put it under one of the many categories. The other 5% of the time you may have to specify the spending category.

It is also great for setting and tracking your budget, since everything is already broken up into categories. So I strongly recommend that anyone who is serious about tracking their finances get either Quicken or MS Money. You won't regret it.

Catching Up

May 3rd, 2007 at 09:36 am

I meant to start this blog when I bought a new house, almost a year ago. So here is a "catch up" entry for the last 10 months.

Jessica and I bought a house in East Lansing . It's a 1400 sqft with no basement and a detached garage. It cost us $175,000. We got a 30 yr mortgage with 20% down. We got the seller to pay $3000 of the closing costs, and our current balance on the mortgage is about $138,000. We decided to escrow and autopay for convenience, and our total payments are $1280/mo.

In August Jessica got accepted to a PhD program at Michigan State University, here in town, and she gets a nice stipend of $1750/mo (before taxes). We use that income to pay off our CC's.

Our first payment was Sep. 1, 2006, which gave us over a full months without any rent or home payments, which allowed us to save over $1700 in the month of august.

In October, the delayed payroll income of Jessica's old job continued while she started her PhD, and we were able to save over $2000.

Since then we've had good and bad months. We did all our furniture shopping at IKEA, and we may have spent $2000 there. Also, I allow myself to buy 1 *big* thing a year. It is usually electronics. in 2005 it was a new laptop ($1400) and in 2006 it was a 37" LCD TV ($600 on sale). This year I might skip it, because of the cost of our upcoming wedding/honeymoon (but of course we are getting help from our families too).

I put $500 a month into my *no touching* account at citibank. It earns about 4.50% in interest, which is about $14/mo right now. This is essentially our rainy-day fund, and I'd like to grow it to about $20,000.

I do not micromanage my spending. I like to look at the months end spending, especially at: clothing, groceries, eating out, household, home improvement and entertainment categories. If they exceed my expectations (budget), I will look closer at them next month, otherwise I don't worry about them. My budget is not very stringent, however, if I go over two month in a row, I either make a budget adjustment, or I conscientiously start spending less money in each category. I don't like to go to a place and order/shop specifically for a dollar here or there.

In april, I pre-paid part of our honeymoon, and that's why our net worth declined over the period. I haven't started an IRA yet, nor have I invested in stocks. I hope to start in early 2008, when I hope to have a decent cash pile to start investing.

About Myself

May 3rd, 2007 at 08:47 am

Before starting my blog, here is a little personal finance information about myself

DOB: 1981
Location: East Lansing, MI
Employer: Michigan State University
Occupation: Research Assistant/Engineering
Personal Finance Short Term Goals: Getting through my wedding/honeymoon with no debt.
Personal Finance Mid Term Goals: Saving 20% of our net income over the next 5 years. (About $50,000 over 5 years).
Personal Finance Long Term Goals: Mortgage paid off in 15 yrs. Start my own business by age 35. Retire by age 50 with $2M in assets.
Personal Finance Weaknesses: $10 Lunches
Personal Finance Strenths: No impulse buys