Monthly Archives: January 2014

January Reflections

January wasn’t too shabby. In fact, I think I did pretty well spending and savings-wise and might even have a few bucks leftover after all is said and done. Here are some highlights:

  • Savings: put away $212 into my emergency fund.
  • IRA: put away $50 into my quarterly distribution account and also signed up to have $100 deducted from my checking account every month. Admittedly, if I follow this routine I won’t come even close to the $5,500 annual max-out but hey, it’s something. 
  • Credit card: I don’t have any credit card debt but I did experiment this month with charging everything onto my new Capital One Venture Rewards card to earn a ton of miles (I have a lot of flights coming up this year). Once my due date rolls around, I will use the cash in my checking account to pay off the balance, then repeat for February. 

Of course, there were also a few lows this month:

  • Clothes: when I was visiting friends in DC last weekend, we couldn’t help but pop into a few stores during our stroll around Georgetown. I scored some amazing deals (a $128 Joie shirt for $30, a $178 dress for $40, and a $48 shirt for $12) but did I really need new clothes? Not really…but I have already worn the Joie shirt and the dress will be perfect for at least two of the weddings I’m attending this year. Please just let me justify this splurge a little bit. 
  • Eating out: I spent around $250 this month, which is roughly about the same as I spent on groceries. I’ve been incredibly good about bringing lunch and snacks to work and never buy coffee. But then there’s date night and catching up with girlfriends and takeout when I’m too lazy to cook…so I think there is room for improvement. 

Here are my goals for February:

  • Reduce my eating out spending to $200 
  • Make one extra student loan payment
  • Do my taxes

Fingers crossed for a big refund!

A Trip to Target

One downside of living in NYC is that you inevitably end up paying more for everyday products out of sheer convenience. With Duane Reades and local bodegas everywhere you turn, it’s always easy to pick up a roll of toilet paper here or some shampoo there. Inevitably, you run out of said roll of toilet paper at a very inconvenient time and wish that you had sucked it up and bought it in bulk. It’s times like this that I dream about having a car and the ability to go to Target every weekend, stocking up on enough household essentials to last me…perhaps more than a week. 

There is actually a Target in downtown Brooklyn, two subways stops from where I live. Today, I decided not to succumb to laziness and made the trip. My shopping list was very simple: paper towels, dishwasher tablets, and a new bed pillow. As soon as I entered Target, I remembered why I usually avoid it: the temptation of straying from my no-nonsense list. Target is basically the snake in the Garden of Eden in this respect. I immediately wandered to the $1 section conveniently placed in the front of the store, just to “have a look.” A white plastic decorative basket went right into my cart. Already disheartened, I resolved to go pick up the things I really needed and did this in about 5 minutes flat. For the next 25 minutes, I wandered through the store looking at all the things I didn’t need: a ceramic mug with a dog that said “I woof you”, Valentine’s Day socks, new sheets and towels, another decorative throw pillow. I put the blinders on and proceeded to checkout where, to my surprise, I set a new personal record: I spent only $40! 

Here’s what I bought:

  • Dishwasher tablets (70 tablets!)
  • Pillow
  • Paper towels (8 rolls!)
  • Macaroni and cheese
  • Valentine’s Day candy
  • Decorative basket (it was only a buck and was already put to productive use in my bathroom)

Here’s what I avoided:

  • Nail polish ($8)
  • Blush ($10)
  • Workout hoodie ($20)

I could have easily doubled my bill at had I given in to those three items which, on their own, aren’t “thaaaaat much” but do end up costing a lot when added all together. Did I wish I had bought those things when I came back home? Not at all. That’s definitely a sign of impulse shopping and I’m glad I resisted. Another factor that worked in my favor was that I had to carry everything back on the subway. If I bought anything more than I did, I think my arms would have fallen off. 

The walk home was kind of unwieldy (how many people do you see on the street carrying an 8-pack of paper towels and a pillow?) but worth it, as I won’t have to go to Duane Reade for at least a few more days…until I run out of toilet paper.

How I Got Here: Grad School

I probably wouldn’t have started this blog if it wasn’t for the fact that I am $85,000 in debt because of my student loans. True, student loans aren’t necessarily “bad” debt, and the government can’t repossess my education — but it’s still a scary number. I’m fortunate enough to have a well-paying, meaningful job (real estate consultant for nonprofits) that is actually 100% related to what I studied in grad school (city planning and real estate), but I still face a long road ahead of me. I’m happy with my decision to go to graduate school (University of Pennsylvania) because it gave me the skills I needed to succeed in the industry I want to be in (real estate). Looking back on how I approached grad school financially, however, there are a few things I wish I had done differently.

My biggest regret is not saving before I quit my last job. I graduated from college knowing that I wasn’t done with school; I just needed some time to grow up and figure out what I wanted to do with the rest of my life. I worked for three years before attending grad school and saved maybe $1,000 at most. You would think that if I knew I was going to return to school eventually, I would have started putting some money aside. Nope.

The year I decided I was ready to apply to schools, I was also on the verge of ending my current apartment lease and figuring out where to live next. My parents still live in San Francisco, so I could have moved back home if I wanted. I could have saved well over $15,000 if I had decided to live at home during that last year (12 months x $1,300/month rent x utilities/groceries).  But an apartment opened up a few blocks from my boyfriend and friends and I decided to take it. I’m glad I did. Being so close to my boyfriend really cemented our relationship, as we had started dating only a few months before I signed the new lease. It allowed us to form the bond that kept us together while we were across the country from each other. But I probably didn’t have to buy the flatscreen TV…or all the framed art…or the fancy kitchen equipment.

I wish I had better understood how debt would impact my life. Applying for financial aid was a breeze; repaying my loans is not. I was fortunate enough to go to college on my parents’ dime and didn’t have to experience the hardship of repaying student loans until now. I would be ecstatic if I could pay my loans off in five years, but it will probably take longer than that if I actually want to have a life and save some money for my future. I wish I had thought about debt in terms of what else that money could be going towards: trips, spa days, saving for a house. I have to say though, that debt has made me a more conscious spender. My paycheck basically goes to rent, loan payments, utilities, and groceries in that order; whatever’s left over is mine to spend as I please. Since that amount isn’t very much, I have to really consider where it goes: do I buy disposable clothing at H&M or do I buy a train ticket to visit friends in Washington D.C.? I’m trying to spend the little money I have on things that are meaningful to me.

Hindsight is 20/20, as the saying goes, and obviously there are better financial choices I could have made. Maybe I’m only saying this because things worked out for me and I have a job I like in the industry I want to be in, but so far, the investment has been worth it.

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Goals

This year, I decided to stop being a mooch. I read other people’s content all the time: Yelp reviews, blogs, comments on New York Times articles, etc. After I graduated from my masters program in May 2013 without a job offer, I realized just how much debt I’d have to start paying down soon. I started to pay more attention to personal finance, which involved reading lots of articles written by people who were in similar situations as me. I realized that I learn a lot from other people and I think people could learn from me as well. I’ve tried many of the common financial tips you read on the Internet and have found those that work for me and those that never will. I think I need to start sharing my experience.

I’m 27 and while I have 10 years to pay off my student loans, I don’t want to make my last payment when I’m 37. There are other things I want to spend on my money on. I could really buckle down and allocate every last penny to my debt, but I’m young and I live in New York City. I don’t want to look back on these years and regret not having taken advantage of everything the city has to offer because I didn’t want to spend the money. I realized that to live, you have to spend — but you don’t have to spend everything. It’s all about the daily tradeoffs: when it’s raining, do I take a cab or suck it up and take the subway? If I’m going out for dinner, do I have to buy lunch earlier in the day?

While I still consider myself young, I am closer to 30 than to 20 and like my skin, I need to start taking action now to avoid trouble in the future. Here is what I plan to do in 2014:

  1. Have a proper emergency fund: Everyone says you need at least 6 months’ worth of living expenses saved for emergencies. I have $2,000 right now. Depending on where you fall on NYC’s income ladder, that’s either a handbag or a fraction of your rent. I need at least $8,000 to be safe.
  2. Contribute to my retirement: After I quit my job to attend grad school, I rolled over my company 401(k) into a Roth IRA. I haven’t contributed a single cent in almost three years. You know that saying “A dollar today is more valuable than a dollar tomorrow”? I cringe thinking about how different my balance could look if I had contributed even $100 over those years. I can contribute a maximum of $5,500 annually and my goal is to contribute close to that by the end of the year.
  3. Pay more than my minimum student loan monthly payments: This will be tough, as my monthly payment now is already shy of $1,000 per month. While I don’t want to stretch repayment out 10 years, realistically, I’ll need at least 5-7 years to do it so that I can still live comfortably and contribute to my savings and IRA. But even an extra $25 per month towards my loans will make a difference.

I know there is a way to get everything I want (how American is that?) — I just have to have a game plan. Stay tuned.

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