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2014 Budget: Getting Serious

Based on my aggressive financial goals documented here ($500k by 1/1/18), and my 105% increase in monthly rent starting this month (le sigh), I need to stop my shopping trips to the mall and get serious about my budget. The time for fun comes when I obtain a larger percentage of my bonus or if the stock markets start to track faster to goal then planned. Right now, it’s time to be relatively frugal in the first-world-I-still-think-I-get-paid-too-much sense.

Screen Shot 2014-04-20 at 12.10.59 PM┬áThis chart documents my budget plan for May going forward. I don’t actually think it’s reasonable but in order to hit my goals I have to focus on sticking to plan. If I force myself I know I can, and my bf is on board with figuring out how to save each month and help me achieve my goals as well. We’re going to start cooking together so it will be interesting to see what sharing household costs 50/50 does for my budget.

This budget plan keeps me above water monthly while also enabling $3k to be invested into the stock market and $1.4k to go to – also stocks – in my 401k. It’s a little off balance because I’ve actually already maxed out my 401k this year, so in reality I’ll be putting $4.4kish into the stock market (Vanguard funds mostly, maybe 80% ($3500) Vanguard (split between dividend growth fund and international fund) and 20% not-too-risky individual stocks for the fun of it. I’d like to get to $10k in my Vanguard funds ASAP to get their lower cost ratios (just turned my mid-cap fund into admiral going from .26% expenses to .1%, woohoo.)

Anyway, knowing me the chart above is completely unreasonable (as someone who spend $1k last month on clothes alone) but I also was spending $650 / month on rent, not $1350! That’s going to change things quite a bit as I’ll have to take enjoyment out of my home vs buying new shoes. Perhaps now that I’m living with the person I love and will be able to cook with him and be healthy, I’ll find enough happiness in that where shopping will no longer be interesting to me. Besides, I want to lose a ton of weight anyway before I go shopping again!

Well – this month I’m incredibly behind goal this month, but I also paid $300 in prorated rent this month, so it balanced out.

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So in April things are a bit wonky. I have less rent to pay since over half the month I lived rent free, but I also put a lot of liquid cash into investments to hopefully get that month working for me sooner than later (that reminds me, I need to write a post on why I don’t believe in emergency funds for people who don’t have children.) In any case, I’m not doing so poorly this month, if you remove the $12200 transferred to my investments.

It probably makes more sense to look at March as an average budget month to compare to the new budget plans. I think March was a relatively standard month – heavy on the food costs, regular on rent etc. On to that chart…

Well, it turns out March wasn’t exactly a typical month either. I changed jobs mid month so my income was not regular, plus other things that made it a weird month for my budget. I ended up with more income then I’m listing, but I’m using my previous standard take-home pay for the March budget to analyze what I’ll need to change in my habits:

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So, in March I put about $2k into stocks (in April I move $12k into stocks, as noted above, so I’m still ahead of my $3k/mo plan.) Rent was cheap and included costs of credit check for my next apartment. Dining out was RIDICULOUS at $800 per month, that’s where the drastic change of budget is going to really come with cooking in our nice new kitchen (though I will need to buy some more cookware for that to happen.) I got my hair cut in March, so that was $80, and still spent too much on shopping with $480 there. Bought my boyfriend a relatively cheap $100 birthday gift and still owe him a nice dinner. :)

In any case, I’ve got to get serious about my budget now. No more $800 dining out months (what’s more ridiculous is that my boyfriend’s dining out bill is about the same, and we generally eat out together and split the bill 50/50 or switch paying for meals – so we could both save quite a bit there living together.)

Next month the game begins!

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Somewhat Aggressive Financial Goal Setting

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Science tells us that when we set goals we’re more likely to accomplish them. It has been with the help of starting this blog that I’ve managed to grow my networth from less than $25k to over $250k. Now the stakes are raised.

My next big goal is $500k by 2018.

Fortunately, I’ve found myself in a career that pays reasonably well. I could be making more money, but I’ve also found that, as many of the finance gurus say, it’s not about how much you make but how much you keep. I’ll never claim to be a frugalista, but I’ve managed to control my spending to the point where my savings have grown into a sizeable nestegg for anyone who doesn’t live in such an expensive region of the world. Here, where average starter homes cost $1.2M, it’s slightly more than pocket change, but it’s a start.

Readjusting My Savings Goals for the Mid-Long Term

Previously in Mint I had three goals set up for the short term. I track my retirement accounts under one goal, my taxable investments and liquid cash under another, and then my college savings account (529 plan) in another (just because that’s an oddball I set up once in case I ever want to go back to school, but I’m not investing any more in at the moment.) Continue reading

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Is Cable Television Worth the Cost?

Every evening when I get home from work, I usually run 10 miles and then follow that up with completing a new 500+ page book. Just kidding. I sit in front of the tv and veg out. For better or worse, mindlessly flipping through the channels is what I do. It helps calm me down after a long day. It is a huge waste of time yet it is one of those things that brings a little joy to my life. Who doesn’t love falling asleep to a House Hunter’s marathon?

I haven’t actually watched a ton of TV living with my roommates in my previous apartment because they had control of the living room area and I generally hibernated in my room, where my cable connection didn’t work. I still spent some time when they were out on the living room couch enjoying a few hours of random shows. And I always thought that one day when I moved in with my boyfriend in my own apartment I’d finally have access to the television whenever my heart desired.

Now, however, I have quite a first-world dilemma on my hands — determining whether I should get cable television, an alternative, or avoid tv altogether (maybe so I can run 10 miles a night and read a few classics at the end of a long day.) My bf isn’t interested in television so he refuses to split the cost with me, so it gets quite expensive as a solo bill. With internet connection, for the first year cable (without the fancy channels like HBO and Showtime) will be $70 per month. That seems somewhat reasonable, but that’s just the year one special. It can go up to $100 or more per month the second year. Yikes. Do I really want tv that badly?

There are a few different options… AT&T vs Comcast. Alternatives like Hulu Plus or Netflix or Apple TV. Yet I’m not much of a series watcher, I’m more of a channel surfer. It’s a guilty pleasure and I miss it. Yet the cost, which was reasonable split 3 ways in my last apartment, is no longer something that makes sense when I have to cover it on my own. Cable TV for $600 per year (year 2) OR… well, spend it on something more useful than rotting my brain with repeats of law and order SVU.

How much per month do you currently spend on internet and/or cable?

 

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grad school dreaming. for real this time.

Money isn’t everything. Beyond food and a shelter over your head and some savings for the future, it doesn’t make life that much better. The older I get, the harder it is to face the substantial, life-altering decision that is pursuing that next level of education. With an income of $150k a year, give or take, makes that decision all the more challenging – or maybe just stupid. Regardless, the longer I age into a fine wine of the workforce, the more I realize that undoubtedly I’m in a patch of the wrong grapes.

My dream graduate program — throwing rationality out the window — is a three year long masters program in design at a renowned STEM institution in the northeast where I’d study interaction design focused on wearable technology. Getting into the program is a daunting task alone — while my professional experience is mildly relevant my lack of ability to memorize vocabulary and mathematical equations has left me avoiding the GRE year after year (don’t ask me how I scored slightly above average on my SAT back in the day, I guess my brain just worked better then.) Even if I did get in, should I really throw away three years of earnings to earn a degree in a field that will, for quite some time after graduation, pay less than I’m making now? Continue reading

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The Percentage Budget: How much should the single working woman spend on clothes?

There should be some criminal penalty for allowing me to enter a Nordstrom. The lighting, the quality-made clothing, the hip fashions that should be in my closet — not on the store rack — are too enticing. Luckily, I’m terrified of buying designer items that cost a small fortune, so I only buy items that cost a miniature fortune. Still, they add up, and I feel guilty for buying just about any item.

I wonder how these stores stay in business selling $300 shirts and $400 shoes, where a decent outfit complete with shoes and accessories costs $1000-$2000. While it doesn’t make sense for someone in a lower income bracket to shop at Nordstrom, I have to assume that this type of store and pricepoint would be targeted towards a mid-career professional earning over six figures. Not that I have to actually follow through with their marketing persona, but why can’t I enjoy the fruits of my labor in the form of a Joie blouse or Ted Baker suit? Continue reading