Category Archives: Budget

Biggest Purchases in My Life

I’m turning 32 in a few months, and I’m looking at my overall networth and if it could be higher right now if I had not made some “big” purchases. Really, though, it would be higher if I didn’t make all of the small purchases!

  • $17,000 – second car, paid for all cash (used from a dealer) — I don’t love this car, I wish I picked another, but it’s fine and safe
  • $16,000 – stock in private company (purchased stock options), worth $0 today (insert frown face here)
  • $10,000 – DUI fine, legal fees, et al. Worst expenditure in my life, for many reasons.
  • $8000 – first car, paid for all cash (used from a craigslist seller) — lasted me about 7 years, was a great car (V6!) and I miss it; probably could have lasted longer but it ended up not starting and getting towed from my parking space, wasn’t worth paying to get it out of the pound. Should have been able to sell it for at least $1000, so that was a waste.
  • $4500 – invisible braces, cosmetic and somewhat health related, so far worth it but I wish it wasn’t so expensive!
  • $4000 – “unlimited” laser hair removal — WORTH IT — though the place changed owners and “unlimited” was more like “limited”

Those are really all of my big purchases in life thus far outside of college and my annual rent ($16,200 a year for my share of a 1br.) Oh, and of course about $300k in actual stock… I guess you can say that’s a purchase.

Looking at spending $40k+ on my wedding in comparison seems kind of nutso, even if my parents are contributing a large chunk of that.

What are the biggest purchases you’ve made in your life?

Getting my Finances in Order – End of Year Edition

I understand why the rich have personal CFAs to help them manage their finances. Trying to do this properly and have a 24/7 full-time job is a bit chaotic… I can’t imagine making sense of this with kids to boot. For now I have a few free hours each week to make sure I’m keeping on budget, investing the right amount towards my retirement, and paying off bills so I don’t generate any nasty late fees or dings to my credit.

At the moment, the big question is when to pay for what. I’d like to hire a CFA to help me understand this, but think that any savings I see via the CFAs advice would be washed out and then some via the CFAs fee. If someone is super rich then whatever a CFA charges will not be more than their savings gained via the outside expertise, but when we’re taking tens or hundreds of dollars it’s unclear to me if there’s value in bringing in outside help. I really want to make myself an expert so I can make the best choices, but that, again, is not possible with a full-time job.

Right now the biggest question is December spending. I typically play my cards to save up a chunk of cash at the end of each calendar year so I can splurge, so to speak, on my 401k in the first months of the next year. I never have faith I can keep my job for the entirety of the year (the reality of startup life) nor do I have faith my next position will have access to a 401k. There are also various reasons why investing earlier in the year is better vs later, though a lot depends on the stock market performance (i.e. if stock market is sucking at end of previous year then odds are it will start to go up at some point so investing early is important, vs if stocks are performing well like they are now and a downward run seems more likely, so dollar cost averaging over the course of the year is the better way to go.) (*this is my theory and not validated in any shape or form.)

The other open question is how much to put towards my Roth IRA this year. I’m going to be on the line where my contributions are reduced, but I’m really not clear by how much because I’ve held so many different jobs this year – not to mention have dividends and stock sales coming from multiple accounts – and I haven’t done a good job in keeping track of my total earnings. This is where I’m confused as to whether I should just max out my Roth IRA and then deal with recharacterizing before Oct 15, 2015 (and likely have to hire a CFA for this) or just stay well under the limit and accept I’ll probably miss out on some future tax savings (though at my income level who knows if Roth IRAs really hold any value anyway.)

I’m also questioning what to do with my $600 doctor’s bill because I’m waiting for my COBRA to kick in (I sent in paperwork but apparently did it wrong so had to re-send it in.) The actual COBRA costs $800 for the two months so now I’m wondering if I should just pay the bill and have a lapse in coverage – need to do more research into how bad that actually is. I have insurance now through work, but I would be facing the lapse if I don’t legally backdate the COBRA with that $800 payment, which is only $200 or so more than what I owe anyway…

Meanwhile I owe my boyfriend a good $12,000 because he’s been paying my chunk of the rent over the last year. I only don’t feel bad about that because he has most of his money sitting in a checking account (talk about risk adverse) and I’m investing this loan and will pay him back slowly. Given how much it will cost us to buy a house every dollar matters and having thousands of dollars sitting in a bank. At least last year I convinced him to start a Roth IRA.

You know, these are all first world problems but they’re problems nonetheless. I’m going to create a new post to go live tomorrow on how I’m going to manage this mess of my December 2014 finances.

The Wedding Planner – How Much Should a Wedding Cost?

Weddings are a big business. I’ve been to weddings of all sizes and costs — some small and in local parks — others large in luxury city banquet halls. Looking back on the weddings, besides respective heat from being in a park outdoors with no shade, the actual cost of the event does not influence my own review of the event. What I personally remember most is the love the partners shared for each other, the kind words the family said, and how much fun was had by all.

So why is my own wedding budget suddenly increasing from $30,000 to $50,000? Even $30,000 sounds absolutely ridiculous. I have two very conflicting POVs in my mind at the moment and it’s a challenge to find a balance that makes sense.

My parents WANT to pay up to $50,000 for a wedding, but that doesn’t make it any less ridiculous in my mind. Regardless of how much they pay (and especially if they pay $50k) then it becomes THEIR wedding and not my wedding. At least they’re fairly flexible on some things, but my mother is starting to bring up all the horrific things her mother did at her wedding and, unfortunately, my mother is not the type to think “this means I should not do them to my own daughter” and instead sees this as an opportunity to do the same (*at least she claims she will not force herself onto our honeymoon, which her own mother did.) Continue reading

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 This 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.) Continue reading

Somewhat Aggressive Financial Goal Setting

Screen Shot 2014-04-20 at 11.11.10 AM

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

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

Reverse Income Requirement Calculator

For anyone who has trouble with negotiating salaries and benefits for oneself, it helps to go into negotiations with a full picture of exactly how much the life you want to live (a reasonable life with the cost of living in your area) costs. This doesn’t mean that you’ll be able to make this amount, but it’s important to have a clear idea of what the ideal world would be and you can use this to determine if you need a new job, need a second job to make up for missed income, or if you can possibly negotiate for higher pay at your current position.

While this calculator is not perfect, it’s a start. It takes major budget categories and addresses the total salary required assuming a total of 40% taken out for state and federal taxes. It also takes into consideration a tax-advantaged retirement account (401k), so this helps reduce the total salary requirements (and if a job does not offer a 401k for tax-advantaged savings then it can be considered an addition to the total salary required.)

In order to reach my goal of saving $75,000 per year, assuming $1200 per month rent (50% of the average 1 bedroom in my area) and maxing out my 401k, I need a pre-tax income of around $175k. (*I currently make around $120k with my bonus, so I have a lot of work to do to get to my goal salary.)

What salary would you need to make to live the life you want and still be able to save the amount you would like to save?

February Budget Plan

I need to stick VERY close to this budget in February. I’m maxing out my 401k as fast as possible in 2014, which means I won’t actually see a portion of my paycheck until the end of February, and I won’t see a full paycheck until March 15.

Auto & Transport: $300 (*includes $200 registration)
Bills & Utilities: $100
Entertainment: $500 (two weekend trips)
Fees & Charges: $100 (*includes $85 credit card fee)
Food & Dining: $400
Health & Fitness: $350 (*3 therapy sessions)
Home: $650
Personal Care: $70
Shopping: $200
Travel: $150
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$2820 BUDGET
( $3740.34 Remaining cash for February – since I’m maxing out my 401k this month)

March 1 = $650 in bank account for rent; March 15 my paycheck will start appearing in my bank account again.

January Budget & Goals

The first few months of every year I remain gainfully employed, I have one goal and one goal alone: max out my 401k right away. In order to make this possible, I left a chunk of cash liquid in my checking account to help me “survive” the first three months of the year, while putting the maximum amount of my monthly pre-tax income (90%) directly into my 401k.

Thus, assuming 90% of my pre-tax income is $8250, it will take me approximately 2.1 months to max out my 401k. This also helps alleviate the concern that should I lose my job later in the year for any reason I’d be forced to miss out on the opportunity to save $17,500 pre-tax this year. Once I save the $17,500 the next check goes into maxing out $5000 of a Roth IRA (which might not make sense at my current income rate, I need to figure that out, but I always like the idea of continuing to put a portion of my savings into an account where I can tax out all the funds and interest on those funds tax free in retirement.

Continue reading

February 1-10 Spending Update

I spent too much so far this month, but due to some upcoming work travel and a lot of remaining food in the fridge, that should balance out. I planned to not save much this month outside of my 401k investment (50% of income) so I have about $2500 to work with after that. I’ll be going back to a frugal life to make up for the lost cash this month in March and April, in order to save for a May car purchase. Post on that plan coming soon.

TOTAL SPEND MONTH TO DATE: $2204 

Home: $657
– Rent
Shopping: $141
– lipstick set
– perfume full size
Cooking Supplies: $212
– slow cooker
– food scale
Bills & Utilities: $212
– passport replacement
Fees & Charges: $147
– annual credit card fee
– checking account fee
Health: $80
– drug store stuff
Travel: $432
– 5 night roadtrip w s/o – hotel only
Entertainment: $134
– 2 tickets to comedy show
Food & Dining: $376
– groceries ($284)
– restaurants ($92)
Gifts: $25
– med for sick s/o

The unexpected expense was the $432 in travel, which I decided to splurge on for the experience. We’ll be staying in relatively cheap yet not disgusting hotels on our trip. We’ll be going for a 5 day, 5 night trip and s/o will be providing coverage for all food and entertainment on the trip.