Living Paycheck to Paycheck

I’m loving what I call my Pantry Diet.  In the last 2 1/2 weeks I’ve probably only lost a pound or so, but that’s not the real goal anyway.  The goal is to use up everything usable in my pantry / refridgerator.  I’m still doing well.

I signed up for the May Grocery Challenge at Give Me Back My Five Bucks and made my goal $100.  Since I usually spend MUCH more than that, I figured that it was a good goal.  Also, when I run out of food, I’m going to have to go to the grocery store and stock up on everything I’m missing which I’m guessing will be around the middle of May.  And since I’m still letting myself buy milk, eggs, and vegetable oil, I’ll definitely  have to shop before the week is out.

I considered myself to be “out of food” two and a half weeks ago when I decided to go on the Pantry Diet, but I still have plenty to last me.  How often do we let things sit around because we’re not in the mood to eat it, and then go drop $150 at the grocery store getting more appetizing things that are gone before we know it?

I have one bag of potato chips (given to me by my parents / left over from my party) and one or two bags of kettle corn left as ready made snack food.  Everything else in my pantry is stuff that needs to be cooked or baked or something else that takes more steps than just opening a bag.  I’m not eating as much because I’m often too lazy to cook something.  Yesterday, I baked some gingersnaps with a box mix I had (also from my parents) and ate a few (delicious).  I didn’t feel like cooking a real meal, so I had ramen noodles.  This morning before work I cooked up spaghetti, half of which I brought to work with me and the other half I refridgerated for tonight or tomorrow’s lunch.  And I have TONS more spaghetti where that came from.  I’m counting on being well under my $100 goal, and I hope to keep it under that limit for the foreseeable future as well.

This morning was not the first that I saw a Loudoun County Transit bus on my way to work, but it was the first that led me to actually looking it up online and then looking up Metro fares and things to determine if it would be more cost effective for me to bus/Metro/bus into work than to drive.  Here’s what I figured out:

First, I have averaged my gas+tolls expenses per week to be $107.50.  This includes commuting five days a week, one trip to my best friend’s place, and one trip either to my parents’ house or my boyfriend’s.  Also about ten miles leeway for shopping, if necessary.

Round-trip Loudoun bus will be $4/day.
West Falls Church Metro to Pentagon will be $6/day.
Bus from Pentagon to my work is FREE!
Weekly gas ($40)+tolls($5)

Hypothetical Weekly total:  $95

Weekly difference:  $12.50

Now, $12.50/week or $50/month would be nice.  But I’ve heard that you should take your payrate per hour and compare the money you’re saving versus the time that you’re losing.

I’m estimating that I will add two hours a day to my commute in this scenario, based on scheduled times, average wait times, and the times I arrive at and leave work in the morning.  Dividing $12.50 by ten hours a week comes out to $1.25/an hour.  Since I make (before taxes and all) over $20/hour, I have to determine that this isn’t worth it for me.

Back to the drawing board.

Last night I went to a finance pyramid scheme thing.  A friend of mine is in it and his “mentor” asked him to bring one of his friends who was interested in financial stuff.  I realized pretty quickly, when he asked over the weekend, that this was one of those things that I was not interested in, but he’d look bad if he didn’t invite someone.  I agreed because I had nothing else planned and I was somewhat curious…and he brought beer to my party a couple weeks ago.

The set-up is that you make your money off of securities trades and when people roll over 401Ks into IRAs and that sort of thing.  The only thing that I learned was that when you leave a company, you should always roll over your 401K and not leave it in the hands of the company.  Once it’s rolled over, you have better access to it.  They gave an example of when MCI folded and how there are still people who are having a hard time getting their 401K under their own control.

Other than that, they only talked about the money that “we” could make and it was very much like one would expect it to be.  There was one thing that was said, though, that jumped out at me as being stupid.  One guy (I say “guy” instead of “man” because the guys in charge are only three years older than me) said that the mutual funds they offer have a terrific past performance over many years.  That’s all well and good to hear if you don’t know that you can’t rely on past performance when choosing investments.  I went to a Ric Edelman seminar a little over a year ago (and I own or have read almost all his books) and that was one of the things that he stressed.  Everything fluctuates!  Everything that goes up must come down, after all.  Edelman showed how over the years there is no pattern for when something might sink/rise, so predictions based on past performance are little better than guesses.

So hearing that from these guys did not impress me; neither did their claim that they want to help middle-class people make money and reach their goals.  If that were the case, they would have focused more on the job itself, rather than on how much money can be made from it.

On Saturday morning I closed out my Bank of America savings account that generated almost no interest for me.  I’m keeping that money in my checking until I pay off this month’s credit card bill and my rent due 1 May.  Because my mom’s name was also on the account, I wrongly assumed that she had to go with me.  It turned out that she didn’t, but it still worked out well for me because we went shopping afterwards.

Both of my parents hate clothes shopping.  My dad dislikes the hassle of going somewhere where other people are waiting to annoy him by shopping near him.  My mom dislikes shopping because she can never find anything that fits (more on this) and when she comes home with something, it’s usually twenty years too old for her or twenty years too young and my dad is not shy about telling her so.

My mom said that if I came shopping with her, Dad said that she could buy me “something”.  “One thing or lots of things?” I asked.  She confirmed that she could buy me whatever I wanted (within reason), so I jumped at the chance.  I consider that any clothes they buy for me on an outing like this is actually payment for being a personal shopper.  It didn’t take too long to find what my dad wanted:  two pairs of pants and a couple button-down, short-sleeved shirts…except he’s particular on colors and they had only one shirt that I deemed acceptable.  This is why my dad likes for me to go:  I’m not going to let my mom buy him shirts that he won’t like just so that she can say that they didn’t have anything better.  The rule is not to buy unless you really like it / will wear it a lot, etc.

I don’t know why my mom has horrible taste in clothes or where she got it from.  Firstly, she wears a petite size and this particular department store had a reasonable, but not extensive section.  She told me her size and we found a bunch of things for her to try on–nothing fit, but one shirt. 

“Well, I’m just going to put all this back and go to Penney’s,” she said when I insisted that she try on everything again in a larger size.  I responded that she’d have the same problem at Penney’s and I wasn’t going to spend another two hours helping her find too-small clothes to try on and nix in the end.  We ended up finding a few of the things she tried on in her true size and she bought those.  I felt bad that I didn’t sound more understanding.  I do understand how hard it is to shop for clothes because you’re too big for the ones that you have; I don’t understand being okay with looking like crap until you can fit into your smaller size again.  My mom actually tried on a pair of skintight khakis and told me that they fit…convincing her that they didn’t is what earned me the expensive sweater I got!

All in all, I picked up a summer sweater, blouse, pair of brown flats, a dress, a couple summer nightgowns, and a few pairs of underwear.  I put away two skirts, even though Mom said I should get them, because I thought that she was spending too much on me (everything was on sale, though!) and the skirts are the kind that flare out at the hip, making a woman with hips look even hippier…and I am a woman with hips.

If I’d known that my dad was seriously okay with all the money spent, I could have gotten free gas and maybe a new purse, too, but all in all, I did all right.  This will help me be less tempted to spend my own money, too.  I hope.

I’m still doing the whole “no buying groceries” thing.  I’ve had spaghetti for lunch and dinner everyday…well…for lunch, anyway.  Last night I took a nap that led me to sleep from 6:45 to 10:15pm when my boyfriend called and woke me.  This frustrated me because I didn’t want to miss The Office or Scrubs and had actually set my alarm for 7:30 so I’d have time to fix dinner and watch TV.  Then I got to read as my best friend and I gchatted that she couldn’t BELIEVE that I’d missed it, that it was THE BEST EVER!!!  MAJOR PLOT DEVELOPMENTS!  MAY-JOR!  Sigh.

Anyway, I slept through dinner, but I forced myself to bake some biscuits to add to my lunch for today so that I wouldn’t get hungry because I knew that I wouldn’t buy anything no matter how hungry I might be.  I can’t decide yet if this whole thing is healthy for me.  I was afraid that sticking to the pantry foods would cause me to gain weight, but I actually feel thinner (this MIGHT be from missing dinner two nights in a row, but who knows?).  I haven’t weighed myself yet, but it would be awesome if this financial goal was helping a weight goal, too.  I want to weigh between 130-35, and when I weighed myself last week I was at about 140.  I’m quite tall, so on graphs that show how much a person should weigh given his/her height, I should weigh between 125-145.  The last time I was at 125 I was WAY too thin, though, and it took forever to gain weight back, so I definitely do not want to go that low again; I just want to fit into my old work clothes that are sitting in my closet.

In other news, I signed up for the ING Direct Orange Savings Account.  I received $25 just for depositing $250.  For each referral I give, I get $10.  So far I’ve been credited with an extra $20.  If anyone would like a referral for the savings account or the checking account, just e-mail me at livingpaychecktopaycheck at gmail dot com.  Just tell which account you want; the same rules apply to get the $25.

My weekend starts in less than an hour now!  Yay!

Yesterday I began freaking out because I thought that I was going to be short enough money for rent and things (if I didn’t close out my money market account and use that cash).  I didn’t know how I could have made such a mistake.  From what I could tell, I thought that the $1000 I’d just contributed to an IRA had already been taken out of my checking account, but it hadn’t.  So I was quite surprised to see just how short I was.  I was incredulous that I had allowed this to happen.

Fast forward to this morning when I logged in to Bank of America only to find more than twice the amount of money in my checking than it had had yesterday.  I saw that I’d made a similar mistake from before.

Both times I forgot about the lag on money transfers between accounts from different banks.  I transferred money from my credit union account to Bank of America and the money was taken out almost right away, so my portfolio showed the new balance for the credit union, but did not show anything pending for Bank of America.  So I forgot about the money or subconciously assumed that it had already transferred over.  Even after I’d already made the mistake about Vanguard, it never occurred to me to look around and see if I made any similar mistakes.  This could have saved me a lot of stress and time.  It also almost made me impulsively close my money market account.

I find myself to be ridiculously impulsive.  It probably stems from my ridiculous laziness; it would take so much time to make a thought-out decision that it’s easier to decide something quickly and go for it.  Sometimes this leads to regret, but mostly it works for me.  It’s also something that my boyfriend likes about me; if a decision needs to be made quickly, I can make it.  The problem is that there are some decisions that don’t need to be made so impulsively.  Like closing the money market, for instance;  I was all set to close it today only to find that it’s unnecessary.  I would have done something foolish for the sake of getting it done as quickly as possible.

So now I find that I am close to fine for the next month or so until I get a few more paychecks.  And that tax refund and tax rebate.  Once I get those, I can really start building my savings.

Recently, I found myself saying to a co-worker, “I have to go buy groceries tonight; I don’t have anything for lunch.”  I’m trying to always fix myself lunch before coming to work so that I don’t have to buy downstairs at one of the two fast food options in my building.  Although one day I got to work early and bought two sausage, egg, and cheese McGriddles and they were totally worth it.  SO delicious.

Yet, not something I can have habitually.  Anyway, I started thinking about grocery shopping.  I throw down all sorts of money everytime I go, while my pantry stays somewhat stocked with things that I never use.  I have tons of uncooked spaghetti and lots of other things that I can makes meals out of for weeks, if necessary.

Therefore, I’ve decided not to shop for groceries unless absolutely necessary.  I’m going to tweak “absolutely necessary” for a few items; I have one Claritin tablet left and MUST buy more, but I will get the generic kind.  Some of the things that I’ll cook will require milk, eggs, and vegetable oil, all of which I’m running low on (i.e., teaspoon of v. oil, one egg, a few cups of milk).  I have enough of everything else I might require for a while.

I’m curious to see how long it will take to eat all the spaghetti, rice, etc.  Maybe this won’t be the most nutritious month ever (but I do have some frozen veggies!), but I’ll be able to fix that when I resume shopping–and whenever I eat at my parents’ house.  I’m estimating that this will last about a month, with approximately 90 meals.  I hope that this will also get me used to cooking nightly, which will then make it easier for me to plan meals, which will hopefully make it easier for me to plan my meals around sales at the grocery store.

So…as little grocery shopping as possible…starting…now!

When I bought my 1999 Toyota 4Runner in 2006, the best interest rate I could have gotten with my credit score was 9%.  I didn’t have BAD credit, I just hadn’t had enough for a long enough time.  At the time, I didn’t realize that getting a car loan would have actually helped my credit score by having different types of credit; that’s why I took a loan from my parents at a great deal.

I borrowed $5000 at no interest to be paid in full November 2008, and $5500 at 7% interest for three years, to be completed in November 2009.  My monthly payment became $169.82, not including the $200/month or so that I *should* have been putting aside each month, specifically for the $5000 balloon payment.

I was putting money aside; in fact, I saved a LOT during that ten months as a teacher.  But when I was out of work for essentially six months, my savings dried up quickly.  I now don’t have enough for that November balloon payment and I have to work to get to that point.

I decided to refinance my loan with my lender, Dad.  Yesterday, we worked out a new schedule and a new interest rate.  I had 18 more payments left, so I increased it to 30, with a 31st balloon payment of $500.  The interest rate changed to 6%, which leaves me with a monthly payment of $88.71.  I already have over $3400 in my Vanguard Money Market account, with $200 automatically going in each month.  By November, I will have over $5000 ready to go if I also put in the $81.11 I’m saving each month.

The only problem with my Money Market account is that I have to keep at least $3000 in it, which I will be unable to do at that time.  When I get to November, I will close the account (sadly) and move my money into a high yield savings account like the ING Direct one everyone’s been talking about, until I have that $3000 again.  Since I’ll still be saving $281.11/month, hopefully it’ll take under a year.  Also, hopefully by that time I’ll already have received a raise that beats the rise in my cost of living, so that I’ll be able to save even more.

I finished my taxes last night, which makes me feel like I am slightly less of a slacker than the ones who wait until today to start.  My federal return was set to be about $1379, until I took advantage of being able to put money into a traditional IRA.  Since money is rather tight right now, I couldn’t afford to put in much, so I put $1000 into Vanguard’s Star Fund.  I didn’t research funds or anything, but that was the only fund with such a low buy-in.  If it turns out that I don’t like it, later I will roll it over into a different fund.  Now my return will be about $1529 (?), not including the $165 from Virginia and the $600 rebate that I’ll get later.

When talking about contributing to retirement when one is young, I hate when others say that “you can’t afford not to!”  Sure.  I realize the impact of compounding interest and all, but sometimes a person really has no money to spare unless he or she wants to go into more debt.  I would love to be putting tons of money into an IRA right now, but I can barely swing this.  I’m taking my total (state+federal) return from about $1486 to $691.  I’m happy that I was able to put something in, though, especially with the economy the way it currently is.  As my dad says, the economy will eventually make a large push back, rocketing the values of current holdings.

I didn’t keep it below $60, but I gave myself some great excuses as to why not.

I didn’t thaw the shrimp correctly and had to trash the entire bag.  I was counting on it being a substantial part of the food that I was offering, so I decided to get more food.  I also had to run out and get more things for the gin bucket.  One of these gin buckets costs almost exactly $10.00 and it was almost gone with only four or five of the guests there, so I went and got more.  My grand total came to $78, rounded to the nearest dollar.  Since the shrimp cost $10-12 to begin with, I added that to the original $60, so I came quite close.  I also had almost a full case of beer left over, a fair amount of boxed wine, and I received three bottles of wine as presents which I was not expecting, so I feel like I came out ahead.

Soon I will come out with a list of goals to help me to avoid spending more money.  One of my goals is to post each day on how much money I spend so that I can see what I’m buying.  I think that I will start this on 1 May, so that I can look at it as a month-by-month thing.

Today I will finish my taxes; when I started them last week, TurboTax showed me how much I could contribute to an IRA and what my tax refund would turn out to be.  I need to enter some new documents that I found first to see how it’s changed, but last week it looked like I could contribute over $1000 and still get $1500 back.  I can’t wait to get this money back, especially since it should bump up my net worth.