Saturday afternoon I took myself to dinner at my local Tex-Mex restaurant. I sat outside, ordered a big plate of breakfast tacos, a margarita, and a diet coke. Then I pulled a copy of the New Yorker out of my purse and read it cover to cover, occasionally taking in a cigarette.
It was a great experience. When I lived in Austin, I used to get so excited at the appearance of the New Yorker in my mailbox that I’d drop everything until I’d read the whole issue…and it usually arrived on a Friday.
Wrapping things up, I asked for the check and reached for my wallet only to find that I did not have it. Oh crap. Next thing I know the manager is at my table asking me a series of questions. They decided that they wouldn’t let me leave without something from my purse as collateral.
The first thing I came across was my ipod. No way in hell. No way was I giving them that. Then there was my cell phone. Uh-uh.
“Oh here,” I said, “You can have this.”
I tossed the object to the manager,he nodded approvingly, and I was allowed to go.
As I headed back to my house for my wallet I wondered just how much I really wanted to return and retrieve my BlackBerry.
Sunday, July 25, 2010
Sunday, July 18, 2010
How's Your Cash Flow?
During law school, I wrote quite a few posts on living simply and managing your money. Since graduating, and ultimately finding a job, my budget needs have changed a little bit, so I thought I’d discuss what I’m doing now financially.
1. Rebuilding My Savings – Watching my savings slowly and steadily deplete over 3-4 years was probably one of my most painful moments in my life financially. It was planned. I knew it was better than taking out loans, but man, it hurt. Before I start putting a substantial amount towards investing, I want to first rebuild my emergency fund / house down payment / mental security fund that I can look at each month and tell myself, “See, you could totally quit your job and go join the Peace Corps if you wanted to. You are not stuck here.”
In order to get my savings back in line as soon as possible, I’m putting 20% of my pretax income into my savings account (but yes, after I’ve paid taxes on it). This is a two year plan.
2. A Teeny Bit of Retirement Planning – 5% of my pre-tax income (before the taxes are paid) is going into Retirement/Mutual fund thingy offered by my company. They match up to 4%. Hopefully in the next one-two years I will either add more each month to this account or find some alternative sort of investing. (Yes, I know I am behind the curve in this category.)
3. Student Loan Payments – I took out $57,500 worth of loans for law school. (Yes, that's it...and no, I did not receive outside help for either tuition or living expenses. I saved, and then I worked during law school. Also, I lived like a freakin' monk most days.) My monthly payment is just shy of $700. Because I’m not investing, and because four of my loans are an annoying 6.8%, I’m adding an extra $400-500 each month. The hope is to pay off the 6.8% loans in five years as opposed to ten. (By the way, this will save me about $6000-7000 in interest over the life of about $39,000 in loans.) My two at 2.47% will likely get the minimum payment for the full ten years, but we’ll see. Owing a consistent monthly payment kind of drives me nuts and makes me feel tied down. Eventually, I might decide that it’s worth the mental piece of mind to pay all of the loans off quicker.
If you want to add extra money to your loan payment – here’s a cool site that will let you know which loan you should add the money to in order to save interest payments. Remember, because the interest is compounded, it makes a difference which loan you pay down even if all of your rates are the same.
Another cool site is the auto loan calculator – but you can use it to punch in information on your various student loans. You can also adjust for occasional extra payments. Punching the amortization button about halfway down the screen will show you the balance for each month of payment as well as how much interest you will pay over the lifetime of the loan. (I am constantly toying with this thing.)
If you defer your loans due to financial necessity (hey, I did for the first year) at least try to make a monthly payment of $50-100 on your unsubsidized loans just to get in the habit of making payments and feel like you’re preventing that much more interest from accruing and capitalizing.
Consolidation? Be careful on this one. Yes, you might get a lower payment and lower interest rate, but a) there are fees involved and b) if you expand your loans out from ten years to thirty years, you are going to end up paying a LOT more money. Don’t believe me? Go play with the auto loan calculator.
4. No Major Investments – Until I feel more financially stable, I’m not going to make any “large” investments such as buying a house, moving to a new apartment, or buying a car. Note: life may totally intercede on this one as we know that last year my landlord decided to sell my garage apartment (boo!), and then well, my beloved little Ford Explorer conked out a few months ago. (RIP – “Bevo”) When these moments arise, try not to go whole hog. The rent on my apartment is about 24% of my POST-tax income, and writing the check each month drives me completely insane. The cost of moving, however, would wipe out any potential savings. AUGH! Also, I ran a criminal background check on the weirdo downstairs and nothing came up, so I'm feeling a *teensy* bit better. Of course, he still may have been institutionalized in his lifetime or tortured animals as a child for all I know.
5. Maintain your Student Lifestyle as Much as Possible – Ok, so I tightened the belt two years prior to law school, tightened it a little more during the three years of law school, and then even the year and a half after that was pretty shaky financially. I’ve let myself splurge a little after all that austerity – new clothes, shoes, underwear as well as ordering the $10 entrée on a menu occasionally as opposed to the $6 appetizer. I also stopped reining myself in at the grocery store. After reviewing my bank statements for the past six months or so, I am splurging too much without realizing it. $200 here, $50 there, and it’s definitely adding up. I don’t so much need to return to buying off-brand food, but I also don’t need to go to the grocery store three times a week AND eat out three times a week. So, we’re working on that.
Comments? Suggestions?
1. Rebuilding My Savings – Watching my savings slowly and steadily deplete over 3-4 years was probably one of my most painful moments in my life financially. It was planned. I knew it was better than taking out loans, but man, it hurt. Before I start putting a substantial amount towards investing, I want to first rebuild my emergency fund / house down payment / mental security fund that I can look at each month and tell myself, “See, you could totally quit your job and go join the Peace Corps if you wanted to. You are not stuck here.”
In order to get my savings back in line as soon as possible, I’m putting 20% of my pretax income into my savings account (but yes, after I’ve paid taxes on it). This is a two year plan.
2. A Teeny Bit of Retirement Planning – 5% of my pre-tax income (before the taxes are paid) is going into Retirement/Mutual fund thingy offered by my company. They match up to 4%. Hopefully in the next one-two years I will either add more each month to this account or find some alternative sort of investing. (Yes, I know I am behind the curve in this category.)
3. Student Loan Payments – I took out $57,500 worth of loans for law school. (Yes, that's it...and no, I did not receive outside help for either tuition or living expenses. I saved, and then I worked during law school. Also, I lived like a freakin' monk most days.) My monthly payment is just shy of $700. Because I’m not investing, and because four of my loans are an annoying 6.8%, I’m adding an extra $400-500 each month. The hope is to pay off the 6.8% loans in five years as opposed to ten. (By the way, this will save me about $6000-7000 in interest over the life of about $39,000 in loans.) My two at 2.47% will likely get the minimum payment for the full ten years, but we’ll see. Owing a consistent monthly payment kind of drives me nuts and makes me feel tied down. Eventually, I might decide that it’s worth the mental piece of mind to pay all of the loans off quicker.
If you want to add extra money to your loan payment – here’s a cool site that will let you know which loan you should add the money to in order to save interest payments. Remember, because the interest is compounded, it makes a difference which loan you pay down even if all of your rates are the same.
Another cool site is the auto loan calculator – but you can use it to punch in information on your various student loans. You can also adjust for occasional extra payments. Punching the amortization button about halfway down the screen will show you the balance for each month of payment as well as how much interest you will pay over the lifetime of the loan. (I am constantly toying with this thing.)
If you defer your loans due to financial necessity (hey, I did for the first year) at least try to make a monthly payment of $50-100 on your unsubsidized loans just to get in the habit of making payments and feel like you’re preventing that much more interest from accruing and capitalizing.
Consolidation? Be careful on this one. Yes, you might get a lower payment and lower interest rate, but a) there are fees involved and b) if you expand your loans out from ten years to thirty years, you are going to end up paying a LOT more money. Don’t believe me? Go play with the auto loan calculator.
4. No Major Investments – Until I feel more financially stable, I’m not going to make any “large” investments such as buying a house, moving to a new apartment, or buying a car. Note: life may totally intercede on this one as we know that last year my landlord decided to sell my garage apartment (boo!), and then well, my beloved little Ford Explorer conked out a few months ago. (RIP – “Bevo”) When these moments arise, try not to go whole hog. The rent on my apartment is about 24% of my POST-tax income, and writing the check each month drives me completely insane. The cost of moving, however, would wipe out any potential savings. AUGH! Also, I ran a criminal background check on the weirdo downstairs and nothing came up, so I'm feeling a *teensy* bit better. Of course, he still may have been institutionalized in his lifetime or tortured animals as a child for all I know.
5. Maintain your Student Lifestyle as Much as Possible – Ok, so I tightened the belt two years prior to law school, tightened it a little more during the three years of law school, and then even the year and a half after that was pretty shaky financially. I’ve let myself splurge a little after all that austerity – new clothes, shoes, underwear as well as ordering the $10 entrée on a menu occasionally as opposed to the $6 appetizer. I also stopped reining myself in at the grocery store. After reviewing my bank statements for the past six months or so, I am splurging too much without realizing it. $200 here, $50 there, and it’s definitely adding up. I don’t so much need to return to buying off-brand food, but I also don’t need to go to the grocery store three times a week AND eat out three times a week. So, we’re working on that.
Comments? Suggestions?
Tuesday, July 13, 2010
Oh wait, you work here?
So work today was a little awkward. You see, not only did they do layoffs yesterday, but well, it wasn’t the traditional “Hey, you’re fired, and now we’re going to escort you out the building.” Uh, no, they gave my friends two weeks to find another job within the company.
So I waltzed in this morning, said hello to the admin with whom I shared an office for nearly a year, and she promptly dissolved into tears.
That sucked.
Senior Counsel, my mentor, had her door closed for most of the day and was in hiding. Whenever I walked in she was feverishly trying to wrap something up before it would inevitably be handed off to me.
That sucked.
I’ll be honest, I wasn’t at my full capacity work-wise, but rather spent a fair amount of the day chatting with either the admin or SC. It was awkward because I was losing my friends and wanted to be around them, but whenever people are laid-off they seem to become a social pariah of sorts, and no one else wants to be affiliated with them. Whenever another person from my department passed by as I was talking to SC or the admin I felt as if I received a look like I was taking sides. I wasn’t. I’ve just worked with these people for a year and a half, and they mean something to me.
On the upside, SC was snapped up immediately and will soon be working just a few floors away. Oh, and she didn’t have to take a pay cut or anything. Whoo-hoo!
Next Friday we’re both going to take a vacation day and spend it by her pool. The plan is to get belligerently drunk. I’m guessing that she’ll be doing some serious venting, and at some point I’ll probably have to hide her Blackberry.
So I waltzed in this morning, said hello to the admin with whom I shared an office for nearly a year, and she promptly dissolved into tears.
That sucked.
Senior Counsel, my mentor, had her door closed for most of the day and was in hiding. Whenever I walked in she was feverishly trying to wrap something up before it would inevitably be handed off to me.
That sucked.
I’ll be honest, I wasn’t at my full capacity work-wise, but rather spent a fair amount of the day chatting with either the admin or SC. It was awkward because I was losing my friends and wanted to be around them, but whenever people are laid-off they seem to become a social pariah of sorts, and no one else wants to be affiliated with them. Whenever another person from my department passed by as I was talking to SC or the admin I felt as if I received a look like I was taking sides. I wasn’t. I’ve just worked with these people for a year and a half, and they mean something to me.
On the upside, SC was snapped up immediately and will soon be working just a few floors away. Oh, and she didn’t have to take a pay cut or anything. Whoo-hoo!
Next Friday we’re both going to take a vacation day and spend it by her pool. The plan is to get belligerently drunk. I’m guessing that she’ll be doing some serious venting, and at some point I’ll probably have to hide her Blackberry.
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