Christmas Shopping

In case anyone is wondering, there is less than a month left for Christmas. Like I talked about in my previous post we are not flying home for Christmas this year. But there is still gifts to be bought. Since we are not going to be at the big family gathering, we are limiting gifts to just immediate family – my parents, my sister and Mike’s brother. We decided to spend some of the money that we would have spent on flight tickets and give nicer gifts this year. My sister is getting an ipad! I am most jealous of her, especially since I don’t have an ipad. 🙂 We wanted to get an ipad for Mike’s brother too, but he told Mike that he would rather have cash/gift cards, since he is in college and is cash strapped at the moment. So we are getting him a small gift and he is getting the rest in cash. I am thinking about getting my parents a couple nights away at this beautiful hotel on the lake near their home. They never take vacations and I am sure they would enjoy this. We were thinking about getting some gift cards for restaurants nearby and gas cards so that they don’t have to spend anything.

Mike’s company drops them a profit sharing bonus 2-3 times a year. He got one a few months ago and we saved that in a different account earmarked for Christmas (Thank you ING) So we don’t feel guilty buying nice gifts, since we have the money for them.

Now to the question of gifts for ourselves. I want us to get something nice for each other, but not go overboard. Erika who writes here had a post up about buying for significant others, which is pretty similar to how I feel. (She has an awesome blog – you check it out if haven’t already). It feels odd to buy each other gifts when we share accounts and credit cards. Last year we picked our own gifts, but I didn’t really enjoy the experience. I am the kind of person who loves surprises and I love to hear the story of how Mike picked that gift for me. But Mike on the other hand, is not big on surprises and is already talking about picking our own gifts this year. We are going to talk about it this weekend. I am hoping to stick to around $100 each.

So have you all finished your Christmas shopping?

Debt Update

I have been in a posting slump lately and I think an easy post to do would be to talk about how my debt payoffs have progressing (especially since we’ve been making good progress on them)

Student Loan : $6325
Loan from my parents : $4000
Auto Loan 1 : $5493
Auto Loan 2 : $4678

Total : $20496

That number is high but not scary. If you compare it with the numbers I posted a year ago, we have paid a whopping $29220 the past year. We have enough money in the bank to pay all of it off, but that would wipe out our entire savings/ emergency fund and so I am not very keen on doing that.

I am hoping to pay off my student loans by the end of 2011. That’s a pretty aggressive goal and does not leave any room for slip-ups. In order to make that happen, we’ve decided not to fly home for Christmas. My parents have offered to pay for us to fly, but it is very embarrassing to let them help us. After we pay off the student loans, we want to pay my parents back by March 2012 even though it is interest free. We’ve been able to knock off these loans pretty quickly the last few months because we made a conscious decision to not divert any money to savings or travel until they are paid off. I think we will not be doing that for our car loans. The balances are small enough that with just a little extra every month we can pay it off in 2012 anyway.

So this is where we stand today. Any thoughts/ideas?

Making Do

In line with my previous post, another important lesson that I’ve learned the past few months is about making do with I have. For most part of my life I have been an all-or-nothing kind of girl. I remember a couple of years ago, I signed up for tennis lessons and while buying a racket, I didn’t want to buy the cheapest one and sprung for a pricey one. After a few months of lessons, I gave up and haven’t used my racket since. Or for the past years, I have spent upwards of $50 for a Halloween costume without really thinking if I can do something with items in my closet.

As I begin to track my money more closely, it’s apalling that so much of my money has been trickling into these unwanted upgrades. I am not saying that all spending is bad and whenever I buy something I must look for the cheapest model. But I have learned to spring for quality items only when it is for something I love and do often. For example if I played tennis every week, I would have no problem springing for a top of the line model if I feel that improved my game. If I were really smart, I would try to borrow that from a friend and use it a couple of times to see if I really like it before buying it. Many times while researching something, I get sucked into “if I pay just X more, I can get a better model” Many times I don’t even use the extra features. For example, when my hair straightener broke after 3 years, I located a suitable replacement (a Sedu flat iron, which I cannot recommend enough). I looked for prices and coupons online and also priced it the salon I get my hair done to find the best deal. But while buying it, I plonked down an extra $30 for a “kit” which contained gloves, a mini travel iron and a carrying case. They all are now gathering dust in my closet and even when I travel, I lug my full sized flat iron, because I forget that the mini one exists.

This new found sense of making do came in very handy this Halloween. I decided that I would make my own costume because I didn’t want to pay for one. Since I don’t own a sewing machine and my sewing skills are non existent, it meant pulling something out of my closet. I decided to dress up as an old favorite – a gypsy. I had a long skirt, a white shirt and some colorful scarves and guess what, the costume turned out much better than any store bought one.

The next time I want to buy something, I am going to think twice whether I really need the item and if I can do without it. If I decide I have to buy it, I want to prove to myself I will use it well rather than just buying it impulsively

Buying Used

I have been lurking and reading PF blogs long before I started my own blog. I have learned a lot of things from them. One of the biggest things I’ve learned is to buy used. I have tried that out for a lot of things. For instance, Mike’s car. Mike drives a Nissan Versa (hatchback) and we decided to buy a pre-owned car rather than pay a few thousand more for the new car smell. Mike and I play a lot of video games and for the longest time I would just order the game new from Amazon without looking for used. Now I buy most of our games used from Gamestop. I paid to become a PowerUp member of Gamestop – it is $10, but I get a 10% discount on all used games any any games I trade in. Also I got a coupon for one game free which more than paid for the membership fee. I digress. The point I was trying to make was that, used is as good as new for things like video games.

But I am not comfortable buying used for everything. Here are some items that I would never buy used.

1) Clothes – I know a lot of PF bloggers extol the virtues of thrift store clothing. I understand that is cheaper and greener, but somehow the thought of wearing something that someone else wore just freaks me out. A friend tried to convince me by saying that people try things at stores and return clothes all the time. Well, that freaks me out too. Mike makes fun of me, because when I find a shirt I like, I try to grab the last shirt in my size because the ones in the front are the ones that typically people try on. Similarly I try to get the last jean from the pile and so on. I tried to walk into a thrift store this weekend, because I wanted something to complete my Halloween costume and I figured that it would be cheaper to buy that used. I did find something close to what I wanted, but I had a mini panic attack while waiting in line to check out. Since that was just an accessory, I have decided to do without that vest.

2) Car – I know I talked about buying Mike’s car used, but I don’t think we will be doing that again. A couple of friends bought a used car from a reputable dealer and are having problems that are costing thousands to fix. I think we will save up for the next car (both our cars are fairly new) and buy new cars with cash when it is time to replace them.

3) Electronic Devices – Computers, ipods, phones, cameras. I think it is just commonsense to not buy these used. There is no way to check for any damages and working in the industry I wouldn’t advice anyone to do it unless you know the person who is selling it.

Is there anything that you would never buy used?

Partner Woes

How do the other PF bloggers deal with their spouse who is not on board 100%.

A few weeks ago Mike and I had a long talk and I filled him in on details about where we stand debt wise. We both agreed that we needed to chomp at the student loan and set up an aggressive goal to pay it off by this year.

Fast forward to today. Mike’s buddy (let us call him Jim) and his wife are visiting some family in Illinois and wanted to visit with us for a few days. I was totally on board with that because I like Jim and haven’t met his wife yet. But Jim wants Mike to pick him up from his in-laws’ place and drive them to our place. This is a 3-4 hours drive and normally I wouldn’t mind doing this. But apparently Jim and his wife have a lot of bags and luggage with them and Jim has asked Mike to rent a SUV and pick him up. This is where I draw the line. Firstly, I think this is a pretty big favor to spring on a friend. Also he expects us to pay for the rental, not just drive up and pick him up. Hotwire gives me prices upwards of $125 for a one day rental. Also there is a bus service that runs every few hours between Illinois and our place and it is very comfortable. But Jim is reluctant to take the bus. Tell me readers, am I crazy to think that Jim is taking us for a ride? This is not the first time this has happened and there have been a few times in the past where we have paid for dinners and concert tickets for Jim. Mike thinks I am overreacting and making a fuss over nothing.

Since I don’t want to be the wife who comes between the husband and his buddy I have washed my hands off this and have let Mike do what he wants. But I would really like to know what everyone thinks about this. Am I just being cheap?

New Phones

Were you all as shocked to hear about Steve Jobs? I felt really sad that day because the world has lost a creative genius. It didn’t feel like a celebrity death, it really hit me hard. Especially since I work in the technology sector, I feel that Steve Jobs was instrumental in pushing usability to the forefront. The specifications don’t matter as much how easy it is to use. RIP Steve Jobs! I hope Apple can make it without you.

Mike and I are getting the new iPhones. I know that buying new phones are not what you do when you you commit to paying off debt. But Mike has had his phone (iPhone 3G) for 3.5 years now and that’s a long time for a smartphone. His phone is literally falling apart and has the screen has a huge crack in it. Me, it’s a different story. I have had my iPhone 3GS for 2.5 years now. But it is in really good shape except for some scratches. So I could continue to use it for another year. But I don’t see why I have to. I checked eBay to see how much used iPhones were selling for and since mine is in good condition I think I would get atleast $150 for it. The new iPhone 4S costs $200 and that means I just pay $50 out of pocket. Since I pay the same amount for data plan anyway I don’t feel particularly guilty for getting a new phone. So Mike and I preordered the new phones and will get them on Oct 14th. Also when it comes to new phones I believe in getting them as soon as they come out so that you have bragging rights for one full year 🙂

Student Loan Numbers

I have talked about this in an earlier post. But I wanted to recap the situation since I was away for a long time. Mike and I don’t have any debt from our under grad degree. But when I went to grad school, I took a student loan to help pay tuition. The balance left on my student loan is TADA

$11679

My goal is to pay it by Dec 2011. I know it is an aggressive goal and it is safe to say that we will not be diverting any money to savings till this is done. We want to throw every extra penny we have at this debt until it is gone forever. Paying off my student loans was one of my goals for 2011 and it will mean so much to me when I can achieve it.

Apart from student loans, my parents lent $10000 to help me oout during grad school. While this is interest free, I want to be done with this as soon as I can, just because it is embarrassing. I have talked to them about it and we have set a tentative schedule for repayment. I will be paying back $5000 in March 2012 and another $5000 in June 2012, barring anything unexpected. I think this is a comfortable time-line and I really hope we are able to pay off my parents by then.

After all this is paid off, I will turn my attention to paying off car loans. So excited!

Back!

Logging in after ages. Around the time I stopped blogging, I was feeling very bad about our finances and it seemed like I would never get rid of student debt. I haven’t saved any significant amount of money since then, but have not accrued any debt since then. We went to New York in May for Mike’s birthday. While we stayed with Mike’s buddy, thus saving on hotel room charges. But we did spend on tickets for a Broadway  musical (Spiderman) and various museum charges. We got a little souvenir crazy and got a couple T shirts and prints of the city off a road vendor. There were all these cute little bookstores and I gto a book at each of these places which all adds up.

And in August, we went to Maui for a week. This is our first big vacation since we got married and we went a little crazy (notice a pattern here) We booked rooms at this fabulous hotel right on the best beach on Maui. We waffled and hemmed and hawed before booking this hotel, but since this was our almost honeymoon we went ahead and booked it. My parents weighed in too and told us to go for it and hinted that they would pay part of it if money was a problem. But we decided not to take any money from them, because honestly we are too old to be getting help from them. We also did tons of activities like scuba diving and snorkeling tours. It made for a fantastic vacation and I am glad we went. But when we added up what we spent on vacation and shopping before the vacation (swim suits, summer dresses etc), it added up to $6500. This number makes me sad whenever I think of it. We had saved up $3500 in our Travel Fund and the remaining was on our credit card that we have paid off by diverting what we would save to pay off that credit card.

There have been other expenses cropping up in the last month, like renewing our gym contracts (we pay it in full every 6 months), buying a bunch of personal trainer sessions (I pay $800 every 3 months, pricey but worth it) and so on. I charged my credit card for all of these, but I have paid the card in full before the finance charges kick in.

So here is where we stand. I hope to get more serious about my finances going forward. I have also been having interesting conversations with Mike about strategy and I hope to share those in the coming days. My next post tomorrow will be about exact numbers on my debt and my plans for paying them off.

Mish Mash Post

I realized that I hadn’t posted a goal update for April. Things are moving along as far as finance goes. Will post about exact student loan numbers soon. On the weight loss front, I have started training with a trainer once a week. But I didn’t lose any weigh at all in April though I have been a good girl with my diet and even ran my first 5k race. So I have upped to training with the trainer 2 days a week. I really like her, she pushes me to do things I would never do on my own. One day she made me run backwards on the track between strength training.

I am feeling majorly disillusioned about money these few months. These trainer sessions are eating a good chunk of change each month. But I want to do it, because I think of it as investing in my health now so that I will be healthier in the future. I know a lot of people do it by themselves without expensive gyms or trainers, but somehow the pounds seem to like me and don’t want to melt despite my best efforts. Also I don’t want to end up obese, which will happen in some years if my weight keeps creeping up as it does. Mike is turning 30 in a month and I want to get something special for his 30th birthday which will cost money again. And there is summer travel. Money seems to leave my bank account the day it comes in. I wish a big bag of money would just fall from the sky into my Savings account.

Hope everyone else is having a better time with their money.

Why Don’t We Have Any Money?

This is the question that Mike asks me often.

Let me give y’all a little background. Mike and I have joint finances. But we actually have different checking accounts. I make less money than Mike and we try to use my salary for living and his for my student loan repayment and saving. My paycheck is not very big, but neither is it pitifully small. Since we don’t use any of it to save, I think we should be able to live on it. But sadly, I am ashamed to tell you that this has not been happening the past few months. We finish all the monies in my checking account in a week and use the credit card to pay all expenses in the next week. We don’t carry a balance and pay it off in full, but that money comes from the amount that we would have saved or paid down debt with. Various items in that category include my trainer fees of $550 for 6 months, a heart rate monitor that costs $100, a rock climbing Groupon for Mike and so on.

I have worked out a basic budget for us, after analyzing our spending pattern for the last few months. I will post it soon, after I am finished tweaking it. But the budget allows for miscellaneous spending of $100 every paycheck. Which means we each get $50 every 2 weeks. But that could become a little messed up. For example, my car registration was up for renewal this month and it cost $75. That means we just have $25 for 2 weeks. Which wouldn’t be so bad, but we just filed our taxes and we owe fees to H&R Block (and also owe $7000 to the IRS,a story for another day when I feel less stressed about it). We just can’t tell the good folks at H&R Block to wait till we save enough, can we? I know a lot of PF bloggers save money in a sinking fund to pay for things like these. But I figured that since it would take a while for my sinking fund to build up, I would tackle these expenses from the amount that I plan to save each month.

Our expenses including rent, groceries, car insurance and so on come to about $2500 each month. And we have 2 car loan payments of $350 and $250. Like I wrote before, we have been paying $2000 towards my student loan (but not this month 😦 ). Once we knock this down, we will have a lot more money free up each month. I also owe $10000 to my parents and I need to start saving that up soon. Apart from loan payments, we would like to save for 2 travel funds – one for traveling within the States and the other to go to Europe. And we would also like to save for a sinking emergency fund to pay for yearly maintenance types bills and also for things like small car repairs and so on. We would also like to save $1500 each month in our Savings account.

After all the loan payments, bills and expenses, we find that we have very little fun money to buy things we want to. Mike hates that he is just not able to go to Barnes and Noble and buy himself a book when he wants to without checking if the budget allows for it. And to be honest I hate it too. It’s like being on a diet. I tell myself that I have to do this for the greater good and that my future self will thank me for it.

My question for the wise PF bloggers out there is, does this actually get better with time?