Category Archives: Spending

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?

Introducing: Bridezilla

Reading articles about batshit brides who enamored over every detail of a wedding led me to pronouncing I would never, EVER earn the title “bridezilla.” And, yet, shortly thereafter my official engagement I’ve been called this at least two times – not yet once from my finance who surely has thought the term silently while watching me create a google spreadsheet of 20+ local venues to visit in order to find – THE ONE.

As a personal finance blogger, and someone who tends to toy around with compound interest calculators as a means to destress after a challenging day, weddings – as in, the modern American wedding with an average cost of $25k ($31k-$51k in my region) – are absolutely ridiculous.

$50,000 — over a 30 year period growing at 5% — amounts to $216k. Sure, that’s not enough to get one through retirement, but it’s an awful lot to spend on one 6-hour party. When down-payments for a starter home are $200k or more, spending any money on a wedding, no matter how high your income is (unless you already are financially independent) seems incredibly frivolous.

So far, we’ve done well to combat the frivolity of this phenomenon known as nuptials. I was verklempt when my man got down on one knee and, after going through a series of romantic gestures, asked me to marry him. When I noticed he had picked the $300 ring off my Pinterest, I took pride in being the type of future bride who didn’t buy into the “Three Months Salary” bullshit propagated by jewelry marketers – likely ones related to the same person who came up with “A Diamond is Forever.” The average cost of an engagement ring these days is $4000 — which is a lot considering most of America is in debt.

There was this little voice in the back of my mind, the little girl who dreamed of a fancier ring (not necessarily a diamond, but still, something above and beyond what I might purchase for myself) — and then I stopped that voice, told it to shut the fuck up, because the ring — beautiful, simple and unique — was perfect. And I wouldn’t want to be walking around with a $4000 sentimental target on my back for anyone who wanted to rob me. Ultimately, I’d rather have a house than a ring, so this was the right choice.

That doesn’t change the fact that the minute you tell people you are engaged the reflex of most Americans – male or female – is something along the lines of “let me see the rock.” Well, it’s a rock alright — a low-cost gemstone that may or may not be the one that we think it is. It was supposed to be peach but it’s actually clear which only bothers Bridezilla me because I feel like everyone “just knows” that it’s a fake diamond (which it wasn’t meant to be) and then I get nervous that others will look at it and think, oh god, does she not know it’s a fake? I was perfectly fine with a sapphire or alexandrite or something that didn’t look like a diamond, but when it almost looks like a diamond showing off your ring gets uncomfortable, so says Ms. Bridezilla.

The ring, however, is the least of the costs that go into having a wedding. Every ounce of my rational self is screaming ELOPE YOU DUMB IDIOT YOU! I’m definitely the type of girl that dreamed of having a large, fairytale wedding – but now that i’m nearly 32, I’m largely over that dream and much more practical. If I was paying for the entire thing myself, I’d be a whole lot of more practical – but with my parents wanting to foot the bill, I’m torn.

My dad – who worked his entire life in a job that he didn’t exactly love – was told eight years ago that he had two years to live from a very respectable doctor at Sloan Kettering in NYC. His late-stage prostate cancer had metastasized and while there were a number of treatments and trials to prolong his life, there was no cure. And, already dealing with numerous health issues, such as diabetes and morbid obesity, his prognosis wasn’t so optimistic.

Dad – as stubborn as he is – has lived much longer and is still kicking, knock on wood. Him and my mother purchased a condo in Boca which he’s now spending his days determining how to decorate – despite years of nagging me about getting married, he doesn’t seem to care too much about the wedding now. His response when I called to tell them I was engaged was “about time.”

My father has clearly stated, many times, that he has money put away for this shindig and that he’d cover the event. The budget, which was $30k, grew into $50k once I made a list of how much everything would cost (and this is with cutting out all of the items that would go into a dream wedding with a pricetag of about $100k.) He said $50k is fine.

I know he’s looking forward to his dream wedding. My mom’s mother made their wedding horrible, because she’s crazy. She wouldn’t let him invite most of his friends to the event because they needed to invite all of the Israeli relatives, and then not surprisingly those Israeli relatives didn’t show up leaving a lot of empty seats. If my finance had a large extended network of family and friends I’d almost  be ok with a large wedding, but it just doesn’t feel right to have a wedding with 30 people from his side and 150 from mine. That isn’t a wedding.

Meanwhile, I’m not sure someone like me where I am today in understanding finances can spend $50,000 on 5 hours – even if it’s not my money. To put perspective on that figure, for the last 5 years of my life I’ve been aiming to save $50,000 A YEAR after taxes, including interest from investments. It’s a lot of money, no matter how you slice it, and whose money it is.

Some of my friends say if your parents want to pay for the wedding, let them. But I’m almost ashamed of it. When I was 12 years old I had a lavish Bat Mitzvah which included custom-made t-shirts which I designed, musicians which included a band AND a dj, and a number of other items which led for one expensive coming of age ceremony. Back then I didn’t understand money at all. The party was fun and all, but it was ridiculous at the same time. How can a grown-ass woman rationally spend anywhere near $30k-$50k on one day? Well, this grown-ass woman might — but she’s still not sure.

I’m absolutely torn. The options seem to be accepting my parent’s gift and a world of compromise for throwing a party for 200 guests including many family friends/relatives who I don’t know that well, OR, paying for an event on our own which would be a lot smaller and cheaper. If we do an event on our own, most of the people I want to attend wouldn’t come, because it would be a smaller, less lavish affair. Maybe that’s not a terrible thing – but I feel like if you’re going to have a wedding to begin with, the point is introducing both families to each other – and with that, I would like to encourage a decent turnout from both of our sides. We have families across the country so a wine country venue with the promise of incredible dining and entertainment would do more to encourage an annual vacation vs a picnic in a park.

Yes, they say that whatever you do for a wedding, the people who want to be there will be. Those people don’t have tri-state area expectations. I definitely grew up in a culture where these fancy weddings are the norm. And, as privileged as I am to even be able to ponder what to do with a $30k+ budget, I should also just embrace the fact that my parents want to pay for this event – which will likely be a night that my finance and I will remember for the rest of our lives. So let’s just do this.

Even with a $50k budget (which is, again, ridiculous) there are still lots of cuts to be made. So a dream dress might be $10k. I looked on pre-owned wedding dress sites, where they sell one-night-worn dresses for 30% to 50% off. Well, buying a dress site-unseen for $5000 – even if it was a $10k dress – seems like a bad idea. Buying a used dress does intrigue me, however, since spending even $3000 on a dress to be worn one night is nuts, but spending $1500 on that same dress that was worn once makes a lot more sense (especially if you can resell it again, say, for $1000.)

At the moment, our decision du jour is the venue itself. Picking a venue and a date will make this a whole lot more real. My finance and I have similar ideas about what makes the perfect venue, but they aren’t always 100% aligned. We visited one venue yesterday that he adored – but it’s too expensive and honestly it was just not quite what I had in mind (paying $50k for a wedding which features fancy port-o-potties is not going to fly with my parents, and is also not on my preferred logistics list.) While we both love the idea of getting married outside in nature, I prefer a venue at the top of a hill with a view, he prefers one nestled in a valley. We both are hoping for some sort of water features — a lake, a stream, or ocean with dramatic cliffs. I prefer a venue where we are able to come set up in the morning, early, and he prefers one which enables late-night after partying well into the next day. We’re coming up empty handed.

All of this added stress should be fun, but planning a wedding is a lot of work. Yes, you can hire a planner (and I probably will) but that doesn’t solve everything – it doesn’t solve the issue of managing my parent’s expectations. If they are footing the bill, that will be another giant job on top of the FT job I already have, which doesn’t leave a whole lot of time to plan this shindig to begin with.

And I come back to thinking – isn’t this supposed to be a day about the joining of two people who are going to spend the rest of their lives together? Why should that cost $50,000?

 

 

No Cable TV for Now, Fast Internet Instead

Since I’m determined to read more, get out of the house more to see friends and exercise, and generally not be a lazy couch potato, I decided to avoid getting cable for the time being. Instead, we’re getting 50MB internet and skipping cable altogether.

The cable bill for the first year wouldn’t be that bad, but then I’d get used to it and have to pay the ridiculous fees charged after the first 12 month rates expire. It really is ridiculous to pay $100+ per month for cable television when most of the shows are available through other means. I even already have Amazon prime which offers many shows and movies as part of the membership. There’s also the option to buy Hulu Plus or Netflix if this isn’t enough.

Instead of the cable membership, I splurged on a waterproof case for my Kindle ($70) so I can come home after work, fill up the tub, and read myself silly. Better that then starting mindlessly at the screen. I figure if I’m desperate for television I can sign up for the local gym, which offers tv screens in every cardio machine… at least then I’ll be able to get healthy while watching television instead of the opposite.

The Money Offender: My 10 Worst Financial Moves

Looking back over the past 5.5 years since I graduated college, I’ve made some good… and some bad money moves. In line of trying to figure out what wisdom I have to impart via this blog on personal finance and related, I’ve made a list I thought I’d share of the top 10 smart money moves I’ve made, and 10 things I need to improve on. First, the list of 10 of my work money moves…

1) My food spend is WAY too high!
I spend too much money on food each month, and I don’t even eat that well. I skip meals all the time and end up so hungry I overspend at restaurants.
GOAL: Spend less than $200 a month on food

2) I splurge when I’m shopping.
While I’ve been pretty good lately at avoiding the mall, I still have enough times over the year when I went to the mall, or even an outlet store, and spent $200 to $1000 in one visit, often on items that I wore a couple of times.
GOAL: Make an annual budget for clothes and stick to it!

3) Wasting my gym membership.
I’m paying $35 a month and… haven’t been to the gym in a year. Yes, I want to work out and be healthy, but I hate the gym and when I do work out I like to do so outside or with an exercise video at home, not at the gym.
GOAL: Either use gym 2 times a week minimum, or cancel my gym membership May 1.

4) I should spending MORE on seeing family and friends back east.
This is actually a place I’m saving money, because I go back to NJ (where my family is) from California about two times a year. The flight isn’t exactly cheap. But life is short, and I miss my family. The older I get, the sadder I feel missing the holidays and family get togethers. Plus, my father is ill with terminal cancer, and while we aren’t exactly best friends, I know I’m going to regret the infrequent visits. I think it’s worth spending $300-$400 every 3 months to take a trip home, even for a weekend, to see my family and friends at home.
GOAL: budget more frequent trips home and see if boss will let me work from east coast for one week a quarter (he already agreed to this, but I haven’t pursued it yet.)

5) I’ve Treated my car poorly.
Five years ago, I bought my ’99 Toyota Solara with 130k miles on it for $7k. Granted, it’s lated 5 years, so that’s not too bad. But along the way the car has collected quite a few dings, and most recently, had half of the front bumper ripped off in an accident that was not my fault, but also was not provably the other person’s fault. I haven’t brought the car in for super regular oil changes, and while it hasn’t had a lot of problems I can definitely feel it’s getting to the end of it’s life. It now has 182k miles on it, but if I treated the car better I probably could have gotten to 250k miles… now it feels like it’s going to die at 200.
GOAL: If / when I buy a new car, be sure to take better care of it, to get the longest life out of the car.

6) Spending too much on investing fees
The way I invest is pretty stupid, but I forgive myself because if I wasn’t investing the money I’d be spending it on #2 (shopping splurges.) My worst offense is my Sharebuilder account, which I pay $12 a month for to get 12 free automatic trades, and I often pay extra on that because I put smaller amounts into stocks each week. It’s kind of dollar-cost averaging but I do it wrong so it’s more or less stupid. My Sharebuilder account is up 10% right now, which is ok, but I could be up 10% investing in a mutual fund this year or one ETF this year, with lower fees.
GOAL: Pay attention to (and account for) how much money I’m spending on my stock transactions!

7) Outgrowing my clothes (due to #3.)
My weight is all over the place, and this requires me to go to the mall often which results in #2.
GOAL: Use #3 to Solve This Problem

8) Not cooking / packing lunch for work.
I spend too much money eating out (#1) because I rarely cook.
GOAL: find low-cost, easy-to-make meals for my bachelorette self.

9) Getting my hair cut twice a year… is not enough
Why is this in my “poor money choices” section? Because after a few months, my hair gets kind of gnarly. While I could get away with that in college, I’m now in a director-level role and need to maintain myself, and my hair.
GOAL: Get my hair cut every 3 months, not every 6 months.

10)  Paying things late.
I’m the worst offender here. I tend to pay my credit card bills on time, but I’ve missed a few there too. Like the one $10 account balance that ended up costing me $50 in late fees. Then there’s the late parking tickets, which add up fast.
GOAL: pay all bills on time, right when I get them.

What are your Top 10 Worst Money Moves, and what goals can you set to improve these in 2011?

Spending Habits of the Weak

In my attempt to determine where my money disappears to, I’ve sought out the aid of online personal finance tracking sites. Those of you who have been following my blog know that I enjoyed the ease of getting my finance info up to the Geezeo site. I’ve actually had a bit of trouble with signing in to the site lately (I’m pretty sure I’m using the right password, but then even when I try to reset the password it doesn’t work.) In any case, given that I have little patience and quickly got fed up with typing in my June spending into Excel, I signed in to my Wesabe account and updated my info so I could track my spending…

Geez. I spent a lot last month. I knew I was spending more than I made, but it’s kind of painful to see how grossly I burst past my invisible budget. I spent $3559 in June. But I only made $2273 for the month. Actually, come to think of it that’s all inaccurate because I deposited my final paycheck (which I received June 30) sometime in July. So right now my July earnings are noted as $2466, but really that money was earned in June, and half of the money counted in my June income was really my May paycheck. Plus, some of that money was the $450 my friend paid me to live in my apartment for the month. Oy, my income is much harder to track than my expenses.

I do need to start keeping tabs on my income. While I’ll be making more money at my full-time gig (when I start in a week), what I really need to do is track the money I make working the small freelance gigs I pick up on the side. Whether that’s doing some copy writing for my uncle’s digital marketing company, or designing a basic website for a friend who offers to pay something for the work… I really need to figure out how much per month I’m making on outside projects. Why? Well, it’s difficult to figure out a budget when these extra projects become a consistent portion of one’s income. When I was making about $2000 a month after taxes this year, the extra $100 a month I made on copy writing for my uncle was really a huge bonus. But then one of the companies that I did work for (through him) decided they no longer wanted him to put together a monthly newsletter, so I was then out $50 a month. Considering how much I spend, that $50 isn’t worth that much, but it’s also worth a lot. That $50 covered one voice lesson and a cheese plate at Starbucks.

My general theory on spending (albeit an irresponsible one) was that if I spent slightly more than what I was making at $35k a year, when I received a raise or managed to land a job with a higher paycheck, I’d be able to live comfortably at a slightly higher salary. After all, I don’t overspend EVERY month. Just most months. But only by about $600 to $1000. I don’t think I’m the type who will start spending more just because I’m making more. Sure my rent went up $145 a month (ouch), and I might splurge on nice clothes and paying for a nice dinner with the bf more often, but overall I think my spending habits will remain constant.

One thing I’d like to spend money on… if I had more money… would be travel. I’d love to take a real adult vacation, like to Hawaii or someplace like that. Thus far my only travel during my full-time work years has been back home to New Jersey. And up until now, my parents have chipped in for my plane ticket back east. But that doesn’t really count as a vacation, despite the high cost of that ticket. Going home is something that I just have to do every once in a while, but it’s not a relaxing getaway.

Since my bf doesn’t work, I’d really love to be able to afford to take us both to Hawaii, or maybe Seattle, or even to some random small ocean-side town in Southern California. I’d love to be able to splurge on a massage every once in a while, or just while on vacation. A massage and a facial. And maybe one of those fancy foot scrubs. And then there’s the laser hair removal and teeth whitening that I want to be saving my pennies for.

So… there’s plenty of things I could spend any extra income on, surely. Would I actually spend it? I’m not so sure. I’m not a huge saver, but I’ve never been good about spending money on big purchase items that I actually really want. Like that laser hair removal. I have this syndrome called PCOS and one of the lovely symptoms of the disorder is having excess facial hair. I don’t have a full-grown beard or anything, but I do spend a ridiculous amount of time tweezing random hairs out of my chin line and sideburns. God, what’s I’d give to permanently get rid of those hairs! Would I give $1500, or whatever the cost is these days for permanent (and painful) hair removal? Possibly. I’m afraid if I did that and it worked, I’d be addicted. I’d have to get my legs and armpits done, and my belly and back. I’d give anything to be hair free in the places where hair oughtn’t be.

Anyway, what makes me sad about my spending habits is knowing that I can go and spend $700 on clothes and makeup in one month, but I’d never really consider spending that much money on laser hair removal at this point in my life. Even though obviously it’s one of those things that I really want. I think I need to go to spending school. I need to get my financial priorities straight. I’m not sure where laser hair removal would fall into these priorities (after all, the treatment would be a luxury for sure, but in a way it’s a medical expense because it’s not like I can live a normal life with a thousand hairs growing out of my chin). Too bad my health insurance doesn’t care about that.