Net Worth: End of June Update

So I had been super excited to take a screenshot of my mint.com net worth graph, and then for boring technical reasons I had to delete and re-enter my main bank account and credit cards, and lost a year's worth of history! What a bummer. So, I can't show the slow upward trend from a net worth of -$19119.00, exactly one year ago, to now, but I can at least show what now looks like:

I'm in the green! To the tune of $2398. :)

The other good news from the end of this month:

Because I didn't start that "goal" in mint until I'd already paid down some of the loan, it doesn't show everything. I started with $18,697 when I graduated last June. I paid off loan #1 at the end of April, and now I can kick loan #2 to the curb:

(Annoyingly, I somehow overpaid by 17 cents. Is it worth it to try to get that back, do you think?)

Here are the gory details on the payments:

I calculate I paid $172.50 in interest on this loan of $8500 by paying it off a year after graduation, as opposed to the $2721.75 I would have paid over 10 years by making the minimum payment.

I typically sum up the month's spending at this point, but this post is getting long already, so I might do another one about that later this week. Instead I'll cut right to the chase:

Totals:

 Debt:
-$1858, a change of +$2810 from the end of May
 
Net worth:
$2398, a change of +3352 from the end of May

By the way, note that I have nifty new progress bars on the blog -- for debt, retirement, and EF goals. And yes, I'm taking everyone's EF advice to heart, although it's going to take years at this rate to save up $6000 in that thing. :)

Positive net worth!

I am very excited for a big end of the month financial update next week, but here is a little celebration: my paycheck hit and I am officially in the black, for what I am sure is the first time in my adult life. Other people my age have, like, hundreds of thousands of dollars and real estate and stuff, but hey, I have hundreds of dollars! It's something. :)

No-spend week is going -- well, I spent. A token $2 in the collection basket on Sunday, and $1.70 for an onion and a donut yesterday afternoon. But I biked both to church and to the grocery store, so I didn't use any gas!

Getting to July

I went grocery shopping this morning, so I should be set through Friday at least. I have $31 in my wallet -- the remains of this month's grocery and shopping money. I have a lot of stuff "in stock" too -- dried beans, coffee, milk, flour, a few eggs, some cheese.... But I don't have much gas left. And starting July 1 my CC will give me 5% back on gas, so I was hoping to wait til then to fill up. Not sure I can make it, unless my biking plan *really* takes off!

It's June 21 and I think I'm going to have an impromptu "no-spend" week. I should have enough food, so barring the possibility of some gas, I'm going to try to avoid dropping any cash at all. (=NO AFTERNOON COFFEE EXCEPT WHAT'S IN THE OFFICE ALREADY, DAMN IT.)

It would be so cool to make it through the last ten days on only $31 plus what I already have. If I can tame the impulse coffee buying and think of something cheap to feed the people who are coming for dinner on Friday, I should be fine. Just need a little discipline. Which has been in short supply around here for the last few decades!

[Extra boring part starts here: my farmer's market/grocery bill today:

$2.50 for asparagus
$2.00 for celery
$1.00 for a basil plant
$4.00 for goat cheese
$6.00 for bacon
$6.15 for fruit
$.50 for a can of tomatoes
$3.74 for vegetables
$11.22 for dairy (milk, feta, cottage cheese, ricotta) at the grocery store

Total for the week: $34.62, but this relies on my using a bunch of stuff I already have in stock to get me through the week. I'm going to try hard in July to only use the $200 I budgeted for food, but that may have to get expanded. Or I guess I could give up dairy; cheese is by far the most expensive line in the list!]

My Lowest Ever Money Moment

Luckily, it wasn't this week! I did get a little low at various points -- moving is always so (*&)*&^%)* expensive that even though with this one I've been working harder than I normally do to keep costs low, I still ended up at Target this afternoon paying $115 for odds and ends: gardening gloves, dishwashing gloves, dish soap, over-door hooks, a trash can, a bed skirt, other stuff. Blah blah blah blah.

However, this is manageable, and fine, and not a big deal in the grand scheme. What was not really manageable at all, was the situation I was in circa summer 2004. (Maybe 2005, it's all blurring together at this point.) I was renting half of an English basement apartment in Washington Heights for $600 a month, and almost a year into trying to get a freelance film career going. I was supporting myself, barely.* But I'd come off a film -- and thus had my last income -- a month earlier, and nothing else was materializing, despite my calling around twice a week to the few people I knew. Also, right at the end I'd picked up a bad cold, which had gotten better and then come back again, so I was spending a lot of time on the couch in my awful apartment feeling sorry for myself and not doing any of the self-improving things I should have been doing with all that enforced time off.

Then the cold got worse.

What had been a cough became what they call a "productive" cough -- I started coughing up phlegm. It was painful. Then after a few days of that, the phlegm turned a poisonous-looking green, and I found that I couldn't breathe when I lay down, and could only barely do it when I was sitting up.

It was clearly time to go to the doctor, but obviously I didn't have health insurance. I recall searching the internet (did google exist then? I guess it did) to figure out if I could possibly have tuberculosis. It turned out that if I did there was a government program to pay for treatment, so I guess there would've been that.

Frankly, I was really scared at that point.

Anyway, I also searched for sliding scale clinics and found one about a 45-minute subway ride away. This was late evening, I guess, and so I planned to go first thing in the morning. I plugged my cell phone in to charge, setting it on the windowsill above the outlet.

After a night of cat-napping in between hideously painful coughing bouts, I got up, got dressed, and discovered that someone had reached in through the bars on the window and taken my phone.

SO. Off I went to the clinic, dragging myself down there on the subway. I was there when it opened, but I waited most of the day (coughing all the while) to be seen. When I did finally get seen, they tried to convince me I had asthma and made me sit with an inhaler for a while to see if it helped (it didn't.) Eventually they agreed to do an x-ray, which they had a machine for on-site, which was the only good thing that happened that day. At that point I'd been out of contact with the world for most of the day; I needed a phone so my parents could call me, so the doctor could call me back with the x-ray results, so I could accept work if someone offered it to me. I went to the Sprint store and bought a phone as soon as I left the clinic -- using a credit card of course, which is also how I'd paid for the clinic visit.

It turned out I had pneumonia (they called the next day after the x-ray was read.) Luckily it wasn't a very serious case, as these things go; I took a course of really really huge antibiotic pills (also, of course, paid for on credit) and within a few days I could breathe enough to lie down. It took me nearly a month to be completely back to normal though. I'm forever grateful to Law and Order because in the middle of my recovery period they booked me for a day of PA work, which was money I desperately needed. But when I showed up with a terrible, very loud cough (I wasn't contagious!) and too weak to do almost anything, they let me sit and guard all the personal stuff belonging to the extras and crew, just about the only job I could have managed in that state.

I honestly don't know what I would have done if I'd had to be hospitalized. Probably still be paying off that debt today. But I wouldn't have been in that situation in the first place if I'd had insurance, because I would have gone to the doctor well before the pneumonia stage.

It was a really awful day, though, that day. Stolen cell phone, sliding scale clinic, no idea where my next bit of work was coming from.... I hope I never get back to that place again.

What was your lowest ever financial moment?

*By the next year I was more than self-sustaining, and by the year after that I was in a union and pulling in perfectly respectable middle-class money, which I then gave up to go to graduate school, at which point it took me eight years to get back to the yearly income I'd been at. I don't know, I don't make very good decisions generally, I guess.

10- and 20-bucks-ing to death (weekly update)

Nickels and dimes are one thing. Actually, I have a whole spare change jar so if unexpected minor expenses were coming out of that I'd be in great shape.

But it seems like inflation's really taking hold! All those little random expenses just don't seem to be very little at all, and when I got the email with my weekly update from mint.com I could really see it. Check this out:

$80 for doctor visit co-pays (I did this in April, but just got and paid the bill this week)

$30 for drugstore stuff

$21 for the mechanic to check out a minor thing on my car

$8 for a bus ticket to the airport

$4 for parking

$25 for a checked bag

$16 for food at the airport/on the plane (this, I'm annoyed by, because I should have planned better and bought food the day before to bring with me)

None of that looks that dreadful on its own. But it all adds up to weekly spending of $184, almost none of which is in my "regular" budget categories. (I really need a medical expenses line; I'll have dental and eye expenses this year for sure, maybe also some other stuff.)

Cat from Budget Blonde calls these "gremlins" and I can see why! Little, or rather not so little, beasties that'll just eat you up.

Aggressive frugality

Milestone: my retirement account is larger than my student loan! I have to wait a couple of weeks (until I get paid) for positive net worth, but that is a nice fun fact to tide me over. I've literally never had more in savings than in student loans, not since I was 18.

Meanwhile, I spent $12 on dry cleaning a coat last week, only to get it home and discover that there were little brown spots all over one shoulder (dry cleaning fluid, I assume.) The old me would have fumed, but probably thrown up my hands and just never gone back to that place. The new me gritted my teeth and went back to talk to them. They wanted to try to fix it and even though I knew they probably couldn't, I let them. When I picked it up today (not fixed) I stared them down until they agreed to give me my money back, so that's $12 back in my monthly "spending money" account. I suppose a more aggressive person would have insisted that they not only refund me, but give me something in damages, but...baby steps.

I just was not gonna lose that $12. Do you notice yourselves finding it intolerable to lose small amounts of money, the further you go into your financial journeys?

Last week's financials

One thing that's a little alarming, looking at my spending as closely as I have been lately, is that I spend money pretty much every single day without fail. It was a relatively low-spending week, which I really needed, but still, even if it was as little as $8, something went out the door every day. I know some people use no-spend days, weeks, or even months to try to get a grip on this. I might have to give that a shot soon.

That said, it was a pretty good, low-key week. I got back from my side trip and so I spent much of the week just lying low at my friends' place. I've been babysitting a lot, meaning that my evenings are not filled with going out for expensive dinners, and things have been chill.

Utility bill: $10.61 to close out my electric company account in my now former town.

Food: $87 (more than it should have been; included several expensive coffee/pastry breaks. This is definitely my Achilles heel.)

And...that's it! (Barring what I spent out of my spending money -- dry cleaning, coffee that I bought with cash instead of on my CC.) Grand total of $97.61 for the week. Awesome.

Also, I bought another $250 in Roth shares. I'm now up to $750 bought on the year. Unfortunately, while I had a great couple of weeks with usertesting earlier this month, work seems to have dried up a bit there. I've had the computer on all day and only picked up $10 so far. You just have to wait for available work, though, so nothing to do but be patient and hope it's just a lull.

Predictably, life looks better in the morning

Thinking about money late at night is never a good idea! I woke up and recovered my equilibrium (and decided I need to make some more friends who work for nonprofits and barely scrape by, so I have some more realistic role models!)

A little bit of whining

So, I know a lot of rich people.

I guess I don't know anyone in the .001%. But I do know a lot of computer programmers, a lot of lawyers (employed lawyers), and, then, I guess almost anyone who is employed full time in the private sector looks rich compared to academia. For some reason I don't really know a lot of nonprofit workers, although given my background and interests you'd think I would.

I bring this up because at this very moment I am housesitting for friends of friends in a large, beautiful house in a very expensive city, and it is making me feel like the biggest, most jealous loser ever.

I made the career choices I made with some very countercultural goals in mind, and it's not like I don't believe in those choices or goals, or like I didn't understand that academic salaries were bad, or that mine was the only paycheck I was likely to be able to count on. But damn it, I want a house anyway! I want to somehow win the cosmic lottery where I both do the thing I believe in, and also get paid real money. And I'll probably never have a house in a place I actually want to live in, because all those places are very expensive. It's a goal that seems much further out of my reach than retirement.

So, I am allowing myself this brief moment of whining before getting back to making the best of the circumstances I'm actually in. Which are fine, really. It's just too easy to casually envy the lives of others.

Financial Goals for Anyone (h/t to Financially Blonde)

So I was just wondering what to do for a Friday post when I saw that Shannon over at Financially Blonde had written up her Top 10 Financial Goals that she suggests to clients. It's a really interesting list and I figured I'd see how I was doing. I'll italicize her text then respond in red.

1) 15% Savings Rate -- Not right now, because I'm at the tail end of debt repayment. However, my rough budget for my new job (starting in July) suggests about a 40% savings rate from my gross income. That'll include $1000 to a 401(k) every month, along with contributions to an e-fund, housing fund, car fund, and travel fund. After I finish off the credit card debt I hope to up my savings even more. I'm really looking forward to see how well I can do on my savings rate this year.

2) Emergency Savings – Fail! Shannon thinks this should be around $6000 for me ("six months of living expenses," which I interpret to mean basics, not contributions to savings) and as I wrote earlier this week, not only do I have only $50 in it right now, but my savings plan suggests that I'll inch it up to $3000 and leave it there, unless my salary dramatically increases.

3) Retirement Account Started –Pass: barely for now (it's at $2870) but this is the one where I should make the most progress this year. My stretch goal is to have this at around $13,000 by the end of 2014 and then keep on keepin' on.

4) Healthcare for your family –Pass! I have health care through my employer, including dental, although I will have to make contributions for both medical and dental; not sure how much yet but I think it's around $100 for both, pre-tax.

5) Credit Score over 750 – Pass! It was over 800 when I checked it this morning, even having dropped a little because I just closed a credit card (the annual fee came up and I wasn't using it enough to make it worthwhile.)

6) Debt to Income ratio of 35% or less -- Definitely a pass, although I am currently paying way more than 35% of my income. But if a meteor struck and I suddenly had to pay only the minimums on my student loan and credit card then my DTI would be around 3%.

7) Ability to finance a home –LOL NO. Let's start with my total lack of a down payment and move on to my total lack of a down payment. With a side stop at "income so low that at my current salary and rate of savings, I should have a down payment in, uh, 18 years or so."

8) Ability to open a credit card – Oh, definitely, wouldn't be a problem. In the past, I've opened four cards for rewards points reasons, and one to do a balance transfer. Four of the five are still open, and see above on the great credit score, so I'm sure I could get another if there was a really good reason. No plans to do so, however.

9) Debt Freedom –Getting there! However, I am not going to promise to live an all-cash lifestyle beginning in October (my debt-free date as of now.) I anticipate a car loan sometime in the next five years, although it will be for a new-to-me car, not a new-new car. Depending on how things shake out, there could also be a mortgage in my future.

10) Financial Freedom –This is the "f-you-to-your-job" goal, and I am probably a good 30 years from that :) Barring a miracle, I can't see any way of not working until I'm about 65, give or take a year or two. Academic salaries aren't high enough to save a lot of money on, and I don't anticipate random inheritances or anything like that. C'est la vie. I enjoy my work, although I don't enjoy the crazy lack of security that goes with it.

*

So -- to sum up, I'm doing well at a lot of things, and badly at a lot of things. That sounds about right! :-)

Debt Repayment High

Thanks to everyone who commented on my e-fund post the other day. I'm thinking it over and I'll probably talk more about it in July, after the student loan is paid off [WOO!]

And speaking of which....

I've been thinking a lot about the emotions we have (or rather, of course, I have) around money. The satisfaction at looking at my net worth rising every month, the mild depression when my tiny retirement account loses a few dollars on a bad stock market day.... These two examples are opposites of each other not only in that one is positive and one is negative, one is strong and one is mild, but also in that one is pretty rational and the other is irrational (the satisfaction comes from being pleased with my behavior, the depression for no good reason at all since I know market movement in small sample sizes is just noise). But they are equally "present" emotions.

The strongest emotion I've had in the last few months around money has cropped up when a paycheck's come in and I've been able to make a payment on my student loan, though. I really experience that -- logging into the website, entering the amount, hitting "submit" and then, a few days later, seeing the new, lower balance after the payment has been made -- as a kind of physical high. I get frustrated when a weekend intervenes and I have to wait two whole extra days to see the new balance; I want to jump up and down at various points in the process. It's actually fun.

There are two possibilities here:

1) There's something really really wrong with me

2) This is a pretty normal reaction to successfully doing something that's difficult and satisfying. There's a reason why people liken debt repayment to weight loss and running marathons!

While I'm not discounting #1 entirely <g>, I think #2 is more likely. As weird as it sounds, I think I'm going to actually miss making student loan payments. I still have to pay down a credit card after the loan is gone, so it's not like I'll never make a debt payment again. But I don't think that will be quite as satisfying. And after that...well, will having money automatically deducted from my paycheck for retirement give me that thrill?

I guess I could start losing weight.

Do you get debt repayment high? Or, if you're debt-free now, do you generate that feeling in other ways?

Emergency Fund Musings

My e-fund currently stands at a grand total of -- wait for it -- $51, after an automatic end-of-the month transfer from checking to savings.

Yup, that'll get me through anything!

Meanwhile, I've been directing massive amounts of incoming cash at my student loan, because I was/am bound and determined to get it paid off by the end of this contract, almost a year to the day after I defended my dissertation. I could easily fund a $1000 e-fund at the end of this month (or could have done it anytime in the last few months) by simply delaying debt repayment, and since interest on the student loan is now down to about $13 a month, I don't know, maybe I should do that. Damn it, that's $13 that could go somewhere else, though, like, say, to an e-fund, so....

Here's my reasoning:

1) My e-fund-like efforts in the past have always disappeared quickly; I'd get them built up to a few thousand dollars and then either be unemployed for a while (I was a freelancer) or spend the money on a few trips or credit card payments after I ate out too much or bought new clothes or whatever. I am committed to budgeting more responsibly now that I am, oh my God, 35, and not 22 (not that I should have been doing that when I was 22, but water under the bridge) but I'm still worried that if I put together an e-fund I'd be tempted to dip into it for less than emergency expenses, and meanwhile the remainder of the debt would still be sitting there. If I kill the debt first, however, it's killed.

2) I'm single and have no children or, for that matter, pets. That is, other living beings are not relying on my steady income (and a good thing too.) So, if a serious, big-time emergency strikes (I get hit by a bus) I at least won't be putting anyone else in danger.

3) Meanwhile, for a minor emergency, I have an ungodly amount of unused credit -- over $30,000 available on the four major credit cards that I have open.

3.5) Also, since I don't own a house, the number of minor emergencies that could come up are reduced (no random exploding boilers or whatever.) Pretty much it comes down to unexpected car repairs and unexpected medical bills.

4) I could also call on my parents -- I would never do that for anything less than a true, serious emergency, and I wouldn't be likely to at all. Like, say I needed a plane ticket for a funeral: I'd rather put it on the credit card and pay it back in pieces. If I do end up asking my parents for help, it's more likely to be in the form of free housing, should my tenuous hold on an academic career finally slip away. However, at the end of the day, I could ask them for an interest-free loan and get it, if I really needed it for some reason.

5) There is basically no chance I'll randomly lose my job during this coming year. I have a guarantee of 13 months of income, so while I do want to guard against being unemployed in the future, I don't need to worry about it in the imminent way I might if I worked in a normal job.

So the upshot is that I'm afraid of my own past bad habits and I'm not that afraid of handling emergencies with the non-cash resources I do have. I want that debt gone though -- because one thing I really am afraid of is potentially entering a period of unemployment (13 months from now) while still in debt.

All that said, I do think I should have a bigger e-fund. I'd like to aim for $1000 to start, then maybe gradually ramp it up to $3000. But I don't think I'm going to make it a priority over other savings goals. I couldn't possibly get it large enough to really live off for six months or a year, so there doesn't seem much point in having a relatively huge one when instead I could be directing money towards other priorities. I'll talk more about this in July when I have a better sense of what exactly I'm going to make every month, though. Until I get my first paycheck I only have a ballpark idea of what it'll look like after taxes, insurance, retirement contributions, etc.

What are your thoughts on e-funds? I know most people are making it more of a priority than me so I'm afraid I'm overlooking something.