My NEW New Year’s Resolution
So I’m already thinking of editing one of my New Year’s Resolutions, namely the creating and sticking to a budget every month. It’s just no good. Rather, I’m no good at it. There are certain areas where I know exactly how much I’m going to spend, but others where I have zero clue.
I have to do SOMETHING, though, so I’m going to document everything that I spend. I did this in May and November and I think that I went under budget both months (or if I didn’t in November it’s because of buying in bulk at Costco). I tend to spend more when I’m not paying attention everyday, so the end result of the resolution will be the same: to control my spending.
Since I received a $100 Visa gift card for Christmas, I’m going to start using it on a regular basis for everyday expenses (I know that’s not the point of the gift, but saving money will help me more than a new pair of shoes will) like when I go to Panera every other Tuesday. This way my spending won’t count too much against me, either.
So along with accounting for my expenses, I’m going to keep a list somewhere (maybe a new page to this blog?) where I keep track of what exactly should be in my Gift Fund, Emergency Fund, Car (maintenance/insurance/etc.) Fund, and Regular Savings each month. Here’s my initial plan:
Savings- $100/month
Gift Fund- $50/month
Car Fund- $200 + $50/month
Emergency Fund- $1000
I need to put a lot in the car fund right away because in just a few months I’m going to have to get a new timing belt and that’s going to cost somewhere between $600-700. So, by 31 January, I’d like to see these at:
Savings- $100
Gift Fund- $50 (minus what I spend on B’s birthday gift)
Car Fund- $250
Emergency Fund- $1000 (HA! That won’t happen. The E fund will be funded with what’s leftover or from the Regular Savings until it’s full. Luckily this is a three paycheck month, so it’s a good time to get started on each of these accounts).
My Net Worth, May
Thanks in large part to my tax refunds/rebate, my net worth went up a fair amount! Yay! You can access my page here.
Last month’s net worth: -$9,406
This month’s net worth: -$6,293
For a difference of: $3,113
Reasons for this:
Even though money is only being added to my 401K currently (about $78 each paycheck), the money in all three retirement accounts has grown a little.
Tax refunds+rebate= $2294
$100 owed to me was paid back.
$35 from Revolution Money Exchange.
Didn’t spend too much last month while budgeting.
My Expenses, Expenses, Expenses
I realized the other day that I really have to start earmarking money for some upcoming expenses. I am way past due to have my oil changed, for example. I’m saving money by not taking it in, but I’m running the risk of much more costly expenses if I don’t, so I’ll use the $5 off coupon to Jiffy Lube from their website (instead of the $4 off coupon I received in the mail) this week or next. I realize that it’s probably much cheaper to change my oil myself, but I honestly don’t know how to do that, and I like going to Jiffy Lube and knowing that they’re looking at more than just my oil.
Along with cars, I’m going to have to pay for my car insurance in July or so. I pay the six-month lump sum up front so that I’m not charged an extra $4 a month. Last time, this total was around $371, but I’m expecting that to go up because of my accident.
I’m also planning some beach trips this summer. I’ll have one week in North Carolina at the end of July and one week in Ocean City, MD at the end of August. Both times I will have free lodging because they are family vacations; I’ll only have to pay for gas. I’d like to do a couple of day-trips, as well, where I’ll once again have to pay for gas, but not much else. I’d like to buy a couple of beach chairs, an umbrella, and a cooler, but I can borrow all of these from my parents, so I most likely won’t. Either way, the gas itself will be expensive, despite the 5% back I’ll be getting from it from my credit card.
The other major expense looming on my horizon depends on whether I move or not. That I won’t know until July, though.
I may start putting aside some money each month into my ING Direct Savings account to earmark all these travel expenses. The rest of my savings will continue to go in my Vanguard Prime Money Market account.
My Mom’s Personal Shopper
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.
My Mistake
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.
My Car Loan
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.
