Erudition

Here are some fantastic personal finance articles you should read, if you haven’t found them already.  I admit to being especially fond of stories about declines in consumption: w00t.

• Consumers Feel the Next Crisis – It’s Credit Cards (New York Times)
• Talk to Me Like I’m Five: What to do with your money now (Salon)
• American retailing: Left on the Shelf (The Economist)
• Economy Shrinks as Consumers Cut Back (for the first time in 17 years, apparently) (New York Times)

Discipline and Punish

Changing your behavior is tough.  Or rather, changing my behavior is tough.  I totally lack discipline about some things, like doing the Master Cleanse or fruit fast or, well, any kind of detox really.  I’ve never lasted a day.  I also buy product (i.e. make up, shampoo, especially Aveda anything) like nobody’s business – though I know it’s out of hand and periodically say “No more!”  

The bad news?  My lack of discipline has reappeared in my financial behavior. Since paying down all of my credit card debt and keeping it low enough that I can pay the balance in full each month, I tend to be very forgiving of myself when I’ve been overspending again.  Recently, for instance, I have taken money out of my emergency fund to pay off a credit card balance.  Yep.  

That act might not SEEM that bad.  I’m paying off a balance, after all.  But it’s very bad.  Touching savings is like shopping: The more you do it, the easier it gets.  And if I were to lose my job, as so many people are right now, I would want a nice big emergency fund over Aveda product.

Let’s take a look at how far in hock I am, again.

Credit Cards

• $420 balance, due 11/15
• $1,937 balance, due 11/17 ($1,250 of this is a 50% down payment for Invisaligns for my teeth.)
• TOTAL = $2,357 

 

I originally planned to take money out of my emergency fund to pay off the balance.  If I did, I’d have less than $4,000 in my emergency fund.  I hate that idea.

Then I told myself it wouldn’t be so bad, that I could just deposit the Nov. rent check from my tenant for $1,500 to bring my emergency fund balance up to $5,400.  I still didn’t feel any better – and every time I’ve failed to listen to my gut, I’ve paid the price.  I cannot, cannot get in the habit of using savings to pay for semi-frivolous spending.  Instead, I’m going with…

Plan B  

There are other ways to pay off my credit cards.  If I have to pay some finance charges, so be it.  It’ll be a good reminder to me to stop using my credit cards for most things.  I deplore paying finance charges, a huge inspiration in my paying down nearly $10,000 before.  

My Plan B is nothing new to anyone who has read basic books on personal finance: I will pay the minimum required payment and as much additional as I can, for the next (mid-November) payment deadline, out of my “regular money” (i.e. salary income, not any sort of savings account.  That means:    

 

• $38 minimum payment (on the $1,937 balance card)
• $24 minimum payment (on the $420 balance card)

That’s doable.  

There will also be a Nov. rent check from my tenant waiting for me in a few weeks, when I get back from working overseas (also a reminder to test direct deposit with my tenant!  There’s money I don’t have access to that I could really use right now!).  All of the Nov. rent check will go to the card with the largest balance and highest interest rate (that’s the $1,937 balance, in case it wasn’t obvious), leaving a $437 balance on that card.  

Also doable.

That payment strategy will leave me with a maximum of $800 in credit card debt (less, since I plan to pay more than the $38 and $24 minimum payments).  

Finally, I will throw a few hundred dollars at any remaining debt on two upcoming pay days (11/15 and 11/30) and use the Dec. rent check from my tenant to pay off any remainder (though there really shouldn’t BE a remaining balance come Dec. 1.)

On Gettin’ Hitched

A less refined way of saying: Mans and I are engaged!  (And no, though I may be 31, I am not knocked up… or rather, with child).

This means we’re going to have a wedding.  Mans and I were stunned at how quickly everyone around us moved from happiness over our engagement and a very celebratory atmosphere to wedding planning – and spending.  We even received bizarre questions like “So are you moving to a new apartment?”  Because… we’re the same two people, who already live together?  Zuh?  

Believe it or not, we’ve been engaged for one week and we’re about finished with our frugal yet elegant wedding plans.  Now we just have to execute on our frugal wedding plan.  So far, our frugal wedding plan consists of:

• Recycled Rings: An engagement ring circa 1935 (that means Deco! Yay!).  It belonged to Mans’ grandmother, one half of a very successful, 50+ year marriage.  Good luck symbols don’t get any better than this. A small chipped diamond needs to be replaced, the prongs need to be checked so I don’t lose my stone, and the band needs to be re-plated in white gold.  All told, this will cost much less than a brand new engagement ring.
• Inexpensive Bands: Two simple white gold bands for each of us (no additional diamonds, please – save it for an anniversary) – $200-$400/each.
• No New Dress: Fortunately, I already own a handmade, custom, floor-length silk charmeuse dress I designed four years ago, for some black tie weddings.  It cost $300 total, as part of the cost was barter (I did a business plan for a designer/seamstress friend opening a boutique – and yes, she’s still in business nearly five years later!).
• Small Guest List: I know, we’re weird.  We want our wedding to be comprised only of the people closest to us, with whom we are in regular contact.  This means our total guest list is 34 people (us included).  
• Wedding at Home: Most places don’t have any extraordinary meaning for us.  Mans’ parents, however, have a small home in the Napa Valley (near us) that is filled with nothing but happy memories for all.  I can’t think of any other place as near and dear to my heart (and also wedding appropriate) as this one.
• Few to No Flowers: We’ll be standing in a backyard garden with roses in it.  Enough said. 
• Inexpensive Invitations: Mans’ brother is a graphic designer.  We’ve asked him to design our invitations, which he now wants to make his gift to us.
• No Gift Registry: We don’t really need anything and can afford what we need.  We both thank our lucky stars every day that we’re some of the few people on this planet who can say that, and that’s enough for us.  In lieu of gifts, we’ll ask for donations to two nonprofit organizations we already support.

That was easy, no?  Now we just need to schedule the caterer and arrange for a small cake (we already know who will do those), and find out who handles things like tables and chairs.  

Done.  No stress, no drama, all in cash, all paid in full by us, not our families.  We’re in our early thirties.  We have wonderful families who raised us well enough to secure steady, gainful employment and not act like spoiled royalty longing for “our big day.” Our families have done more than enough for us, and now we just want to thank them for getting us this far.  Yes, I realize we’re in a unique position not to need help to finance our wedding – and we’re grateful for that, and for everything.  

I can’t tell you how happy I am to have found someone who shares my values.  I can’t wait to just be married to him already!

Money Making (and Taking) Coin Machines

My change jar was half full yesterday, so I decided to risk an experiment with one of those coin sorting machines at our newly Whole-Foodsified Safeway.  Think spot lighting, lowercase fonts, and faux wood, just-like-a-hipster-barn entry.  I’d never used a coin sorting machine because they used to advertise how much of your change they took.  The machines at our local Safeway, however, are devoid of any notice about the fact that a fee is taken – and yes, I looked for all small print.

Anyway.  I had just over $40 in my change jar, and the machine levied an 8.9% fee, taking about $3 worth of my change.  This left me with a voucher of $38 to use on my groceries.  The voucher had to be used at Safeway within the next 24 hours.  Since we’ve just returned from Maui and needed groceries, that wasn’t an issue for me.

So – that’s how the coin machine at Safeway works, for the unfamiliar.  I was willing to spend $3 to experiment this time around.  Next time, though, the huge change jar goes to the credit union for a deposit.

Because cash goes where my calendar shows…

And nobody knows… but me.

I tracked 30 days of cash expenditures in my handy little paper calendar during September.  I don’t believe September was exactly a representative month, given my renewed focus on savings, but if not the most accurate data it’s at least some data.

First, I was curious as to how well my expense tracking would stack up to cash withdrawals from the ATM.

• According to Mint.com, I pulled $520 out of the ATM slot during September.
• According to my calendar, I tracked $524 spent.  I may be a control freak but at least I’m diligent.

So, where did it go?

• Eating out: $353
• Taking cabs: $35
• Buying a dress: $39 (slap)
• Buying makeup: $42 (slap)
• Buying yarn for knitting: $12
• Sight seeing (things like park entry fees): $13
• Miscellaneous (homeless guy, friend IOU, and tailor):  $30
• TOTAL CASH: $524

Let’s see how October goes.  It will be another outlier due to the Hawaii vacation with which I kicked off the month, but I have to stay in the habit.