The Weight of Money

I’ve been on an intellectual kick to earn more money - I’m just rolling in the thoughts and ideas. However, when it comes time to make something happen, I start dragging my feet.

For example, I responded to a craigslist ad to do some custom sewing. Since this is something new for me, I asked my momma for prices and she gave me Oklahoma deflated prices and not Maryland inflated prices - strike one. The customer likes my cheaper prices and I accepted the job with terms that I didn’t really like - strike two.

This afternoon, talking with my momma about the job and my lack of desire, she urges me to call and cancel. We commiserate about how work usually isn’t up to par when the heart ain’t in it and no one should do half-hearted work. She is all for me backing out of the deal until she says “you don’t need the money anyways, do you?” Ummmm…

She hit the sore spot - reality is that we do need the money right now. I need to be bringing in all that I can because of the part-time job. So, suddenly all those reasons to not do the job faded away and I’m reminded that all those cash making ideas need cash making action to follow them up.

However, I did send an email to change one of the terms of the agreement because I need to make up for the fact that I’m gonna get Oklahoma dollars for the work I’ll be doing. This provides an out for the customer and a modification that’ll make me happy to do the work. Hopefully we’ll both be comfortable with the changes and I’ll be bringing in some extra cash.

Next time, I’ll take more time when offering prices and agreeing to the terms. Also, I’ll try to keep in mind that we do need the money right now if we want to stay on track with our 2007 goals.

This week’s Debt Reduction Carnival an easy to review with only 15 articles to read through. I found 5 articles (33.3%) that included the personal side of debt and debt reduction. Also, No Credit Needed did a podcast for the carnival, go check it out.

1. Handcuffed by Debt: Climbing Out of Debt tells how his debt might be tying him to a drowning professional ship.

2. Debt Tally for Week Ending Jan. 24th: Debt Be Gone shares their debt numbers for this week.

3. A Media Collection Purge is a Great Way to Free up some Extra Money for Debt Payments and Investments: The Simple Dollar shows how occasional inventory reductions produces from extra cash and extra space.

4. Get Hitched and Get Out of Debt: John at Queercents talks about using a wedding to get out of debt.

5. Get Out of Debt and Sink the Economy?: Money Smart Life is pondering the economic side of not buying anything.

Personal Carnival #3: Carnival of Personal Finance #85

Welcome to the Third Personal Carnival on The Weight of Money - I’m continuing my trend of pulling the personal out of recent personal finance carnivals.

The Eighty-fifth Carnival of Personal Finance had 58 posts — I found 22 articles (37.9%) where the personal was obvious. I’ve included links to the majority of those below.

1. What’s it Worth to You? Liquor, Lotteries, and Cast Iron Pans: Elizabeth posts about the different pleasures people get from their spending and suggests we put the breaks on criticizing how someone else spends their cash, especially when our own habits can be fodder for criticism.

2. Keeping up with the Joneses or not?: Living Almost Large shares one of my pet peeves - assuming that people who look to be living large can’t afford it.

3. That’s A Lot of Money: Blunt Money looks at the past 12 years of spending — things do add up.

4. Watching Dividen Payments Grow: The Dividend Guy is showing personal numbers.

5. Our Personal Finance State of the Union Address Money Smart Life looks at the state of their personal fiances and all the recent personal changes that have happened.

6. Switching to Geico: lulugal talks about switching car insurance for a better rate.

7. Credit Score Going Down, Down, Dow: Scott on Money tells why his credit score is dropping.

8. Creating a Personal Finance Goal: No Credit Needed looks at personal short and long-term goals and how they are created.

9. Acceptance of Your Financial Situaiton Can Be Freeing: My Financial Awareness shows financial acceptance as a positive step and personally relates to the difficulty in doing so.

10. Frugal vs. Cheap: The Stubborn Capitalist gets personal and looks at the difference between cheap and frugal.

11. Get Rich!! Play the Lottery!! Somebody has to win!!: My Financial Journey talks about his reaction to his partner throwing $10 at the lottery.

12. The Great Big Lie About Personal Finance Blogging! Making Our Way lashes out at the hopes and dreams of some personal finance bloggers - blogging ain’t the get rich scheme you might think it is.

13. Musings on Commuting PegL talks about her 5.5 commute to work and why she is making the drive.

14. Recieved Student Loan Check Today, What Should We Do With It: David at My Two Dollars considers what to do with the student loan check.

15. Prioritizing Between 401(k) and Roth IRA Contributions: Financial Fitness tackles the retirement investment options.

16. True Me Up, Baby: Mapgirl’s company is kicking in some extra dough for front-loading 401 investors.

17. A fool and His Money: Burford Twain looks at the Motley Fool through a lens of personal experience, growth, and learning.

18. Three More Ways to Insure Income for Life During Retirement: Free Money Finance takes another look at the Bogglehead’s book and suggestions he is using for retirement.

Shopping is torture for me. I hate going into to stores, looking through racks of clothing, and coming home empty handed. I’ll find something I love, check the price tag and put it back on the rack. Clothing sticker shock prevents me from buying anything and leaves me in a desperate situation of needing clothes and having nothing to wear.

For my new job, I need formal/corporate business clothes. I own one business suit, my interview suit, and nothing else. I need to buy some more things but the thought of filling out my wardrobe flashes dollar signs and diminishing account balances before my eyes.

Instead of making a practical list of actual needs, I hit several thrift stores in hopes of miracles. I love thrift store shopping but it isn’t a solution when you need something specific (unless you’re lucky). There I found a a few items nice enough for work and brought them home even though I didn’t like them.

Now, I two outfits, two pairs of pants, one wool skirt, and several tops that don’t work with anything else in my closet and I really don’t want to wear any them.

What I need is that basic wardrobe that allows me to mix and match items a variety of ways so that a couple items go a long way. But now, I’ve already spent $100 at the thrift stores the past two months and feel like I’ve already wasted my clothing budget by trying to save money.

In the meantime, I’m in the office feeling frumpy in my thrift store finds and funky closet combinations while everyone else has their hair up, heels and hose, matching accessories, and looks stylish. My frugal shopping choices are actually going to cost me this time.

Tuesday’s Festival for Frugality has 35 articles. Through very unscientific analysis, I found 17 articles (49%) where the personal aspect of frugality shined. I felt these twelve articles were worth sharing and articles submitted to multiple carnivals/festivals have been intentionally excluded.

1. Ethnic Markets: Feel Worldly for Cheap: Wise Bread expresses personal experience shopping in ethnic markets for some frugal shopping and offers some great suggestions.

2. Leasing vs. Buying: The Car Debate Continues: Nina, over at QueerCents, maintains an excellent balance of personal experience and information when addressing the lease vs. buy debate between her and her partner.

3. No Car Note: Mapgirl talks about how nice it is to have a car that is paid off and how the thought of car payments put new car fantasies in perspective.

4. Thrifty 101: Tightfisted Money Tips I Learned in College: Kelly Bejelly describes her thrift learning curve while offering up suggestions.

5. Seriously Thrifty? Some Wild Ways to Save (Part 1): Personal thrifty comments paired with some wild options Silicone Valley Blogger has seen. Nothing new, just a personal take on it.

6. This $9 gadget Might Save You from Cable Bills Money, Matter, and More Musings shows how money saving tips can be shared through a personal connection.

7. Saving Money While Traveling for Business: makingourway finds a local grocery instead of maxing out of pre diem on hotel food.

8. Haircuts at Home: Stop the Ride tells how do-it-yourself haircuts is a frugal choice for their family.

9. Saving Even More at Salvation Army: Krista from My Family Finances tells a new tip she heard for saving more at Salvation Army.

10. How to get a Free Car Wash: Money Smart Life talks about how he gets free car washes.

11. Why I Don’t Spend Money on Bottled Water: My Two Dollars tells us why.

12. Beat February Financial Funk: A Money Map: The Frugal Duchess responds to Howard Dayton’s Your Money map book.

Blog carnivals are a great way to highlight some of your recent posts, see what is popular, and find new writers. However, they can be very long (one had 77 entries) and wading through all those articles gets time consuming. Because of this, I find it frustrating to see the same articles posted to multiple carnivals.

My blog carnival experience began with the Carnival of Personal Finance (CoPF)and I assumed that their guidelines for submissions was standard for all carnivals:

Do not submit an article which has already appeared or will appear in any other Carnival.

However, before getting up on my high horse, I reviewed the guidelines of the other carnivals/festivals and found that this is a somewhat unique guideline. Therefore, submitting an article to multiple carnivals (as long as you don’t submit it to CoPF) appears to be acceptable. While it may be acceptable, I still find it annoying and inconsiderate to carnival visitors and will not include links to any articles submitted to multiple carnivals.

Writers that submit unique articles to each carnival give me a reason to explore their sites further; those just linking up the same article give me the impression that they are only looking for traffic and are exploiting the resources available to get it.

I clicked on all 77 entries in yesterday’s carnival and have pulled out all the articles where the personal is prominent. Of the 77 articles, I found only 15 (not quite 20%) where the personal side of personal finance was obvious. 12 were worth sharing and one was double listed in another auction (a no-no in my book) and intentionally excluded.

1. A Year of (Intentionally) Not Working: The personal experience of Financial Fitness leaving her job, the steps taken to make it happen, reasoning behind the transition, and adjustments to living without the income.

2. So, Where do You Keep Your Money: My Two Dollars lays out where their money is kept and managed. I like seeing how many cubby holes people have for their cash.

3. Rebalancing Your Retirement Portfolio: Kirk posts his analysis and rebalancing of his retirement portfolio; real numbers from a real situation - not just advice.

4. Financial Achilles Heel: Kelly Bejelly talks about the items that are her financial Achilles heel and some of the reasoning why.

5. Do I Need a Will: Living Almost Large consider whether or not they need a will based on their individual circumstance.

6. Car Buying Part 1 – Going for Broker: Wise bread’s personal experience using a broker for the purchase of a new (used) car. We might consider using a broker later this year.

7. Saving on Telephone Costs with VOIP: One family’s adjustment to Voice Over IP and the savings they received. Link removed because it was submitted to multiple carnivals/festivals.

8. Quiken for my Little Sister’s 18th Birthday: Debt be Gone talks about her little sister’s request for Quicken and how she went about selecting the best version for her.

9. Don’t Rely on the Lottery: Corey talks about how he knows he won’t win, but still plays the lottery anyways. I admit that I sometimes play too, when the jackpot gets high enough that dreaming about winning is worth the $1 ticket. Link removed because it was submitted to multiple carnivals/festivals.

10. Hair, Hair, Everywhere: Well-heeled admits that she doesn’t skimp on hair cuts. I’m thinking of splurging on a good hair cut soon.

11. Primary Home as a Percentage of Net Worth: Tired but Happy reflects on the portion of net worth tied to home value. The possible move to a more expensive house might tip the net worth balance too far.

12. Public Experiment #1 - Using the Law of Attraction; Part 1: This seems to be a leap of faith and jumping out in the world to see if he can make his goals. I like seeing people just jumping out there, I like seeing them succeed even more.

Dear Readers, I need you input. I’ve changed jobs and have the option of transferring my TIAA-CREF (403b) account over to Fidelity (403b). I’ve just started reading through the options for doing this, the pros and cons, and strategies for making a smooth transition. However, I’m not sure if this is even something I will want to do.

For some background, my TIAA-CREF account is not large as I started contributions in it just a few months ago. I liked some of the options TIAA-CREF offered but felt they were also very limited. I know nothing about Fidelity, other than brand-name recognition, and am hopping down that bunny trail this moment.

Feedback and personal experiences would be greatly appreciated.

Is 2007 going to be the year of car repairs and bad repair choices? As a reminder, we own three cars – the newest (9 years old) is my two-door stick-shift car in decent shape, next is an older two-door sports utility vehicle (purchased for $5.00) in poor shape, and an older model utility van in poor shape. December 2006 gave us a frozen, busted water pump on the car ($400 with the tow). January gave us rusted and blown brake lines on the van ($530 with tow). And there is more on the horizon; we’re just waiting for it.

We’re perched on that slippery slope of never-ending repairs I’ve seen time and again with older cars. Cars die at some point and need replaced, unfortunately, we’re at that point with 2.5 of the 3 vehicles (my car is in good shape, but has crested that hill). Neither the van nor the SUV are in good shape and both honestly need replacing.

The van needs new tires and that is going to hurt too – more money for a hobbling along vehicle. We really don’t want to fork out any money for a new (used) car until we’ve bought a house and can get a good replacement. Current plan of action is to let the SUV die when it does and keep patching the van up as needed, easier said when the van isn’t eating dollars. Maybe I can convince the partner to get some new used tires to save some pennies, but, even if the van dies, we should be able to sell the tires and get some money back.

Each vehicle has more than 100K miles; my car will be crossing the 140K mark this month. Each vehicle is owned outright, which is a beautiful feeling (mapgirl agrees). But each vehicle is leaving me with a nag of worry at what next week, next month will bring.

Oh and that turned down AAA program is looking pretty good right now. Each tow is running about $60 and I’m thinking this year might be the one we need to use their service (normally I’m opposed to such services). Or, I wonder if our tow company has a frequent tower program instead?

Prompted by a recent comment from mapgirl, it is time to give an operational review of our experience with You Need a Budget (YNAB) budgeting software. I first considered using YNAB in July (post), we started with baby steps in September, and moved to full utilization by October.

For those of you unfamiliar with this software, review the details at youneedabudget.com (we are using the basic version, not YNAB Pro). Some basic concepts necessary to understand our experience using this product: 1) this system forces you to “stop living paycheck to paycheck” by using last month’s income for this month’s expenses (i.e. January income pays for February spending); 2) every dollar must be accounted for and budgeted; 3) there are real implications to whether or not you stay within budget.

The Good

• Excel Format - The excel format is YNAB most valuable feature because we want a customizable system.
• Using Last Month’s Income – At first I thought this idea was kind of hokey and it took some convincing to get the partner to try this system because it pushes you to save up a month of income. I’ve found that the peace of mind the buffer offers is invaluable.
• Register Entry - The checkbook-like register entries allows us to double check that we haven’t missed entering something and sort entries as needed.
• Joint Responsibility - The register entry is the only place where spending data is entered; this allows the partner and I to share the responsibility of keeping the budget up-to-date and allows us check in with our spending throughout the month. Other systems we considered put the financial management responsibility on one person and we wanted a joint finance solution.
• No Checkbook Balancing - I do not have to balance my accounts with this system. We carefully double-check our register entries and don’t worry about how much is in the account. Some people balk at this aspect of YNAB but I love it.

The Bad

• Category Limitations - One of my initial complaints with YNAB is the number of category spaces available. However, the spaces available are more than we currently need, so it is just a technical complaint. Also, I would like to have nesting categories, an option YNAB Pro offers.
• Copy & Paste - it can be frustrating to copy and paste with this program because of all the hidden rows and columns.
• Budget Tinkering - Because of the real implications of over/under budgeting, we were constantly tinkering with our budget to reallocate money. More on this under “Our Modifications”.
• Annual Budget - YNAB only allows you to do one year’s worth of budgeting in the same file. For 2007 we had to start a new file and this prevents easy access to previous spending. YNAB Pro does not have this limitation.

Our Modifications

• Over/under Budget Implications:
  As I mentioned, there are real implications for over/under budgeting. The implications are best illustrated by example:

  If we budget $300 in January for groceries and spend $350, our available funds for February will be decreased by $50. However, if we budget $300 and only spend $200, then the remaining $100 will remain in the groceries category until it is spent – our available funds for February will not increase by $100. To spend the extra $100, we would need to budget $200 in February for groceries and spend $300 (that will use the $200 we budgeted and the $100 leftover from January).

  My frustration is that this means that we have to be exact with our budget or we’ll start accumulating cash (literally, it’ll be sitting there in the bank waiting to be spent) in individual categories. Also, if an unexpected expense comes up and we decide to eat out less to pay for it, we have to change the budgeted amounts instead of just changing our spending habits; the result: our budget no longer reflects our planned or estimated spending.

  I’ve modified this so that any money that isn’t spent is added to next month’s available fund along with deducting any amount that exceed the budget. No more constant tinkering and finally our budget is exactly that, what we think we’ll spend, and not an edited reflection of what we’ve actually spent.

• Budget Categories - I want nested categories, but it isn’t possible with our version of YNAB. Instead of nesting categories, I’ve modified an unused visible column to the left of the categories and added labels. You can see the modification below, this is just a visual alteration, but one that will help us visualize our spending better.
  

Overall Impression
This software is not perfect, but it is much closer to what we want than anything else we’ve found online. It is closely related to my previous budgeting system and the excel platform will allow me to continually modify it to meet our need.

Recommendation
How you manage your budget is a personal choice, I can only recommend that you find a system that works for you. YNAB works for us, but your mileage may vary.