Monthly Archives: June 2012

Case of the “I want”s

Although I may have had an epiphany with my mind shift, it doesn’t mean that my desires to spend money have disappeared. As I try my best to ensure I have enough cash for the down payment and closing, I am seriously being hit by the case of “I want”s.

I want a new wardrobe. After recent purge of stuff to eDrop Off for sale, my closet seems so bare. I hope that I will feel better once I have received my sales check.

I want a new work purse. Mine is literally falling apart at the seams. I would love a Neverfull but, at that price tag, I am hoping that I want it only because I am feeling deprived of spending. I carry my laptop with me everywhere so it would be silly to purchase such an expensive bag. If anything, I feel like I should sell some of my purses since I have so many (although, none are daily work suitable).

I want new furniture. The new place is a totally different look and feel than my current place so I need new stuff, right? No, I have decided that until my EF is fully funded again, I will hold off on spending any money on decorating. That will also give me some time to utilize and analyze the space and design an intentional living space around it.

I want expensive ingredients. I want truffles and exotic produce and fruits. But I am trying to rely mostly on existing food in my pantry/fridge/freezer and purchasing only necessary ingredients.

I want to eat out. I want to enjoy the few lovely days I have left in downtown (I will be “beached” as of next Friday) and eat the fancy foods around my current client site. But I am being committed to bring lunch everyday, even if it may seem odd. Today I had hot crab dip with pita chips.

I want a vacation. I haven’t had a vacation since end of 2011 holidays. I have had a lot happen in 2012 and I deserve a vacation. I thought about using my miles to jet off somewhere but vacations always cost money. I will possibly reward myself after fully funding my EF by taking a trip somewhere.

So many things I want… but I am telling myself, I want a place of my own and that will bring me more joy than anything I’ve listed above. 🙂

Weighing Exhaustion vs. Emergency Fund

I am exhausted. Work is going fine, I know that the back and forth of Chicago weather doesn’t help, and I know that this condo purchase process is stressing me out. I am talking stressed-out-so-much-I-am-breaking-out-and-canceling-seeing-friends type of exhaustion. It is taking all of my energy to put in the hours at work and calling mortgage officer, lawyer, realtor, and whoever else is required at that time.

A few days ago I was supposed to do an online orientation for the part time job I am to start. It happened to coincide with my inspection. I emailed the HR folks and told them that I’d like to reschedule, possibly pushing this off until next month, thinking ahead about my energy levels and my task list.

But what do you know? The orientation was canceled and I was told to reschedule. I thought about just waiting until the next month. Then I thought about my emergency fund.

Basically the problem is, I will have almost no emergency fund aside from my Roth IRA and 401k after the purchase of this property. Despite Dave Ramsey‘s $1k EF, I feel safest at 6 months living expenses. I believe that since I would be looking for a middle/senior management level at big corporations, the jobs available might be slim and the time it takes for it to finalize would also be long. 6 months allows me to feel comfortable that before my EF would run out, and that I’d find another job without settling.

That no emergency fund thing… It is starting to scare me. I plan on implementing my bare bones budget until I have that much achieved (which I will know better once the mortgage is approved and I know what monthly payments to expect), which might be as long as the rest of 2012. And even then I am afraid that something might happen prior to me reaching that magical EF number.

I am tired. I need to pack. I need to cook at home so I avoid costly take-out meals. But I need the Emergency Fund more, for my sanity and my financial well-being. I decided to trade my stress of not having a sufficient EF fund for stressing out over having another task.

So, while I am juggling everything else, I will be undergoing the training. It pays pennies during training, but it is the only way for me to get that regular, double-digit paying gig a few months later.

I may be stressed out but I will at least feel financially safer.

A Mind Shift

Before I submitted the offer and knew exactly how much the place would cost, I realized a mind shift was taking place.

Although I make decent living and have relatively low debt (student loans only), I wanted to make sure that I wasn’t spending a bulk of my income on the mortgage and association fees. So, unlike most people, I told my mortgage officer to put me for whatever will result in a similar monthly mortgage + HOA + tax & fees as much as possible after putting 10% down. Despite my mortgage officer telling me that I could qualify for $50k more than the number we were working with, that was my comfort zone.

But that 10% down number really impacted me. I started to view an extra $1,000 to equate to another $10,000 in property value. Even when I was dealing with much smaller amount, say $30 to take dessert and wine to a dinner gathering, I would think of that as $300, which was equivalent to 1 month HOA fees. $5 for lunch would be equivalent to $50, which is about my monthly electric bill. So on and so forth.

It isn’t exactly the same as compounding, but the power of money over time and what it allows you to do is the same.

Now that I have a hard number to hit rather than an elusive 10% down up to a certain amount, that 10% mind shift doesn’t really make much sense. But I try to think back to this mind shift each time I find myself enticed by desserts, take outs, and pretty baubles.

What are some of your money mind shifts that has helped you save? I would love to hear!

Love,

C

 

Contract Submitted and Accepted!

Wow, for the three of you who actually read this blog, you may be starting to pick up the fact that my life moves fast. Less than three weeks since I have started the condo search, I have submitted an offer that was accepted after some negotiation!

I really didn’t think it would move so fast but the properties were starting to move a lot faster and there were many that were listed that I wanted to go and see, only to find out that there was already an offer in place. This kind of lit a fire under my butt and had me pushing my real estate agents hard to provide quick showings.  I had found a fairly established agent at first, then felt that he was too slow. He would tell me he’d contact me Wednesday, only to have me contact him on Thursday, and I would finally get the information I had requested on Friday. After a week of this and missed properties (yes, there were ones that I really wanted to see that got sold during this week), I fired him and got a new agent. She’s young and hungry and real “hustler” as my friend who referred us described.

On our second day of showing, this was the first building to see. I fell in love with the building, saw it again twice the next day and submitted an offer the following morning. It was originally priced higher than my goal price but, thanks to my agent’s tough negotiating, we ended up with the condo at just below my maximum price with appliance warranty.

So the real stressful part now begins. I have to make sure that the mortgage approval goes through without any hiccups, have 10% down payment + closing costs (approx $7,000!!!), and move out in a short period of time (4 day window). I will of course document the process so that my readers can know what to expect of the stressful process.

Love,

C

Operation: Home Purchase

As mentioned previously I have resorted to various tools and tricks in my attempt to decrease expenditures and increase savings, which will ultimately increase the cash on hand for my home purchase. Some of these were no-brainer but some tricks, I am sure many will oppose. In the end, I view all of these in terms of risks and benefits and I have determined that I am comfortable making these changes for the short term.

  1. Get a part-time job. My line of work makes it difficult to get part time jobs since I may have to travel at any point for work, which only leaves weekends available. I have gone through the application process for a test prep company to tutor GMAT (similar to the company that No More Harvard Debt went through), and start training in July. I am hoping to bring in at least $500/month after taxes through this.
  2. Sell stuff. I am starting to comb through my apartment to find items that I can sell. I have already taken two big bags of clothing to eDrop Off that have sold and I have another bag to take for my next visit.  I had to part with some beautiful items that I worshiped but never wore. I sold my Wii which was being used only to stream Netflix. All those MBA textbooks that I’ve held on to but never opened since graduating? I will sell those too. Whatever I do not use but has a value will be sold.
  3. Cash out rewards. I cashed $727 worth of various credit card points for gift cards (GC). I am sitting on a ton of miles and hotel points with various airlines and hotels and will look at cashing out those, as well.  I will keep the miles at my favorite airline and free hotel nights, but I will cash out everything else for cash or GC. If I can’t find any GC I like, I will most likely keep the points until after the house purchase and cash out for an item. The goal is to use these GCs rather than cash.
  4. Decrease my spending budget. A follow up post to come on my new budget for July.
  5. Stop Roth IRA contribution. I still fully intend to contribute the max amount for 2012 but I will hold off until after the house purchase to ensure I have the most amount of cash possible.
  6. Stop student loan payments.  My 0% loan contribution will continue but I have been overpaying on my federal loan for the last several months, which has been enough not to make any payments until next year.  I also have a habit of putting my bonus money to my student loans, which will stop. Same as with #5, I will hold off on making payments until the house purchase, then I will attack this aggressively again.
  7. Surveys. I have been doing surveys off and on, and I think it is time for me to start again.  It’s never a lot of money and there are payout delays, but money is money.

Those are all the tricks I can think of to increase my cash hoard. Do you have any suggestions or recommendations that could help me increase my cash? If so, I’d love to hear it!

Love,

C

New Budget for July

It was only 2 weeks ago that I created a budget and 5 days ago that I shared it with the readers. As you know, I have started the house search process, which has thrown a wrench into that budget plans. To save money for home improvement projects and possibly the down payment (I figure I have been approved for what I’ve been approved, unless I need to get a reapproval in 2.5 months because I still haven’t made a purchase yet), I need to be more aggressive.

Here is the comparison of my June and July budget:

As you can see, rent, utilities, cell phone, internet, netflix, and car insurance are all fixed spending that I cannot control. I am hoping to reduce the electric bill next month with some new surge protectors that are supposed to reduce energy vampire effects, but I’d rather be safe by over budgeting. Most of the variable expenses have been reduced in budget.

Transportation: I am hoping that this will be lower but there are some talks of me being assigned a client engagement out in the suburbs, which would require the budget to be at this level, if not higher. Until I know for sure, I am not changing this budget.

Groceries/Food: I am hoping that I would be able to make this drastic reduction by relying on my current stockpiles and enjoying the produce from my garden. Based on how it goes in July, I may try to reduce it further to $100/month in August.

House fund: These are the items I end up purchasing for the house, such as energy saving surge protectors and printer ink. Since I am out of printer ink, this is where this budget will most likely go.

Hobbies: My new hobby will be to read my existing magazine subscriptions and to get ideas of home remodels/decorating.

Spending Money: This is the area that I am most nervous about. In order to stick with the budget I will need to make sure to bring lunch every day, limit outings with friends, and eliminate shopping altogether.

Oopsies: This is my buffer budget in case I receive a parking ticket, lose money (like I did this weekend), etc. It has the potential to become a slush fund so keeping it limited will help me stay on course.

I have more thoughts on this but this post is getting to be long, so I will share that another time. I hope you all have had a fantastic weekend!

Love,

C

When my mind starts wandering…

… boy does it wander.

The post that was published yesterday was actually written a week ago. Since I put that budget together, a few things have changed. I have found out that $150 for Personal Spending was too low and upped it to $300. That wasn’t so hard…

But that high rental cost really bothered me. I kept on thinking about it. Then the toilet leaked. This is the second time in the last 6 months that it has happened. The condo was built 10 years ago and 10 years is about the time when the appliances begin to fall apart. The landlord pays for the plumber but it always means some damage (however small) to my items and annoyance of working from home to meet with the plumber, etc.

That made me begin to wonder if it was worth it. Out of pure curiosity, I started to look at the condos available for sale in my neighborhood. I saw units that were nicer than mine obtainable with monthly mortgages less than my current rent. Then I became obsessed.

I always wanted to own some rental properties in my investment portfolio. Since there are numerous tax breaks for your primary residence, I always thought I’d live in a property for two years, make whatever changes needed to increase the value, then rent it out. I thought that I’d begin looking maybe in a year or two, but the real estate market in Chicago finally seems to be picking up and I am expecting the prices to start to rise.

Conclusion? Now I am shopping for my very first property. I have been preapproved by a bank, have started to work with a realtor, and have identified target neighborhoods. The assumptions the mortgage lender and I used is to keep my monthly mortgage+tax+insurance the close as possible to my rent. Now the tough part is waiting for the “perfect” property for me to become available and not get caught up in the outside activities (investors snatching up properties before I have a chance) and let that rush me into something that is not “perfect”.

This also means I need to redo my budget ASAP. Even though the mortgage preapproval was very favorable, I want to have enough cash to make any updates, especially if I end up purchasing a fixer upper (preferred).  I already have taken some actions to reduce the future expenditures and to increase income, which will all hopefully increase my savings. I will share some of those activities with you tomorrow.

Love,

C

Budget #1 — Spending

I think the common debate for any pf blogger is to determine whether to provide the $ figure of their monthly budget or to provide a %.  It seems that the trend is if you are anonymous then you provide a $ figure; if you blog under your name you provide a % so those who know you all of a sudden do not have information to your income information.

I am not really comfortable with either options. I plan on remaining anonymous but I also don’t want to see judgments from folks based on my earnings.  So, I will provide a mix… I plan on providing a $ for the expenditures and the various savings buckets in % with the remaining money.

So below is what has been set up for my spending budget:

  • Rent (Fixed): I know this is probably on the higher end for all readers out there aside from those in NYC. I have a 750 sq ft condo with a covered parking space in a relatively nice area. I know that I could get a lot more square footage for less money elsewhere, but I like the quietness of the neighborhood and that its close proximity to downtown means I usually walk to client sites.
  • Electric + Gas (Variable): I had originally budgeted $25 because that was the total that I was told to expect by my landlord. I am a bit disappointed by the high number and am looking into ways to at least reduce the electric bill.  My fondness for hot baths and showers as well as cooking (gas stove) probably will make reducing the gas bill improbable.
  • TMobile (F): The entire bill is actually just shy of $100 but, since I also use my personal cell as my work phone, my company reimburses me for 50% of my cost. I have an unlimited plan so the only overage I am charged is for international texts from my friends.
  • Internet (F): I use Clearwire and have decided to rent the modem each month rather than paying for it. I may decide to go with AT&T in the future.
  • Netflix (F): Basic cable is included with my rent but I still watch most of my TV shows through Netflix, streamed through Roku.
  • Health insurance (F): It’s a bit on the high end and I am searching to see if there are cheaper options available.
  • Gas/Transportation (V): This is probably much higher than I really use in a month but budgeted high just in case I receive a work engagement for a client in the suburbs, since the drive within 20 mi is not reimbursed.
  • Groceries/Food (V): I actually have a freezer full of food plus a fully stocked pantry and a produce garden. I can probably spend only $100 a month if I really wanted to reduce my expenses, but I like the safety of having stock pile, just in case. I also do couponing off and on, which requires some cash each week.

There you have it. Do you have any feedback or recommendations? Something that has worked for you to reduce cost that might be applicable to my situation? I would love to hear what you think.

Love,

C

10 Things I know Now About Getting Older

I recently came across an article on hitting that Age 30 milestone and the lessons learned. I am sure that based on each reader’s experience he/she will have a different thoughts on the reflection, and the article is a good starting point to begin reflecting on the lessons we have learned as we grow older.

Original Article: Turning 30: 10 Things I Know Now About Getting Older

Reflection #10: I am impressed with myself for simply ‘getting by.’

Hell yeah! I have achieved more than I ever dreamed of in my 20s when I feel like all I had was my motivation and bright-eyed look at the world. I learned that no matter what I am faced with, I will eventually learn how to step up to the challenge.

Reflection #9: No job will be entirely perfect.

This is actually something I have learned immediately after turning 30. I kept searching for work that can fulfill my greater purpose in life (which I am still seeking). But I have accepted that job is nothing more than a contract/transaction. I agreed to provide quality work and I am compensated with a salary in return. It is wonderful when folks are able to discover their purpose through work, but not everyone will be able to achieve that. I accept this and am at peace with this revelation.

Reflection #8: One of the most effective and long-lasting ways to learn is to mimic a good role model.

This is something that I am still working on. I have tried to focus more on “treat others as you would like to be treated” but this is probably a good idea to mimic a role model.

Reflection #7: For me, being heard, receiving genuine compliments, and nurturing physical affection are how I feel loved.

I have learned that in relationships, I feel loved when I am shown through actions that I have their loyalty and am supported unconditionally. Physical affections are always nice and so are compliments, but for me those are two elements I seek in those I love.

Reflection #6: Sometimes growing spiritually feels like dying.

Spiritual journey has been an ongoing, off and on, process for me. I am not sure I’d say it feels like dying (but maybe this is because I am not really spiritually growing) but I fear less in general.

Reflection #5: I am incredibly sensitive. So what?

I have stopped apologizing for being sensitive or getting hurt over others’ comments and actions. I have learned that my sensitivity gives me a different, more nurturing point of view when interacting with others and it’s nothing to be ashamed of.

Reflection #4: I am fortunate to have solely first world problems … and my problems aren’t insignificant.

Yes, I have first world problems but it also does not mean that they aren’t problems. I mentioned how I felt like I had no reason to be depressed and that I feel like these are first world problems and my therapist responded that yes, but it does not mean they are not problems. I am thankful that I am in a developed nation but I have also learned not to brush off my problems.

Reflection #3: There are going to be some MAJOR changes in our lifetime.

I feel like all of my 20s were major changes from career paths, locations, to relationships (friendships and romantic). I know that my life will face more major changes (deaths, births, more moving and career changes) but it has allowed me to enjoy the down times and the present.

Reflection #2: I still look pretty hot for 30.

I am a bit sensitive about looking older and have definitely added more to my skin care regimen, but I am happy with where I am. 🙂

Reflection #1: I wouldn’t go back in time for anything.

I am still young and there is so much life ahead of me. Why go back when you can navigate through uncharted territory?