Go Kmart?

Since my first spotting of Christmas commericals on TV weeks ago, it seems like every big box store is eagerly thrusting their “deals” upon viewers everywhere. So I wasn’t surprised to see Kmart following suit. However, their ad was different. It was a wife going out to buy Christmas gifts and her husband nervously suggesting not to spend to much. She suavely replies, “don’t worry, I’m putting it on layaway.”

Even Kmart’s home page extols the virtues of layaway.

It seems easy enough:
Pick your item, pay a small down payment, make additional payments every two weeks, and then take home your item once it’s paid for.

It ensures that you get your item as opposed to trying to save up for it and then trying to buy the item the day before Christmas. It also seems better than charging something you can’t afford on a credit card and having a horrible reckoning day in January.

However, I’ve never done this before. Has anyone else done it? What was your experience like?

Lots of festivities!

Wow.. this has been the week of holiday gift prep!

While I’ve exhausted my ideas for savvy presents, here are a couple more ideas for keeping holiday expenses down. I have a large extended family (each of my parents were the third child of five) plus my husband’s family makes for three (or more) Holiday gatherings per year!

Here’s how each family keep the fun going economically:

Grandpa’s birthday party- normally held a week before Christmas in celebration of my (now deceased) great- maternal grandpa’s birthday. It doubles as our Christmas celebration and we hold a giant 30+ person gift game.

The rules:
You must be 13 to play.
Bring a gift that cost about $30 and wrap it.
All people are assembled and gifts are piled in the middle.
Two hats are volunteered and one person takes it upon themselves to write out football teams and the cities the team is located in. The team names go in one hat and the team cities go in another. Everyone who is playing draws a team name.
A designated drawer draws out one team city out of the hat (normally this goes to an eager tween who can’t play, but wants to be involved)
When your team’s city is called you get to select a gift.
If you are the first person to go: you must select from the gift pile. You open it up and show everyone what it is.
If you are not the first person to go: you may select a wrapped gift or steal a gift from a person who has already gone.
There are three steals per round, and a round is over when someone opens a new wrapped present.
If you are stolen from you can not steal back your gift (you can, however, steal your spouse’s gift and your spouse can go steal the gift back for you!).
Everyone has a chance to play.
At the very end, the person who was first to go can choose to steal a gift if they have not been stolen from and they choose to go again. This keeps it fair in case the first person gets stuck with a sucky gift.

No one brings any other presents for any other adults. Young, non-gift-game-playing children may or may not get gifts, but it isn’t expected.

The family gifts- my Dad’s side of the family buys gifts for each family. Every family gets a similar gift and the gifts are of less than $20 in value.
Ex: My Hallmark crazy aunt gives every family an ornament, my aunt and uncle who went to Hawaii brought back every family a bag of macadamia nuts, or my aunt who can cook- canned peaches for every family. This means you only have to get seven of one gift for seven families, instead of 34 different presents! Cheaper and easier!

The in-law way- just get together. Bring food or even better a dessert! I’ll get my mother and father-in-law something, but I have a no-presents rule with my brother-in-law. These gifts, however, will be given in private- not at the large (40+ people) family party. Since most of the family is Jewish (practicing or not) the gift giving isn’t really emphasized. It's still fun, and a whole lot cheaper!

Chic DIY presents

The last couple days I’ve been focusing on quality gifts at prices that won’t undo your holiday budget. A lot of these ideas are off of Design*Sponge (go Derek and Lauren!) and I encourage you to look at their DIY section to see if other ideas pique your interest!

Here are a couple ideas for people who want to make gifts with their own hands:

Tassel Earrings
For one stop by Michael's crafts and a few bucks you can make multiples of these chic earrings for all your girlfriends!

Eco-friendly notebook
With a handful of materials and even fewer steps, these notebooks are eco(nomically) friendly!

Family Portraits
More interesting than a standard portrait, these modern silhouettes are part traditional and part modern.

Felt Coasters
Make these in the colors of the gift recipient’s living room and they’ll know you were thinking of them!

Stenciled trivets
These require a steady hand to cut out, but the graphic could be anything you like. Try the person’s initial, a sweet saying, or a decal in the likeness of their pet!

Cake stands
I love this idea! At one point, I thought I’d do these for my wedding- but I didn’t… Still imagine these made with some garage sale milk glass… so sweet!

Crafting X-mas gifts for non-crafters

Yesterday, I highlighted my strategies for buying holiday gifts in an economical way. Now I’d like to highlight some ideas for making meaningful gifts. For all those anti-crafty people who would like to tune out now: these are all gifts that you can make online! No scissor or glue required!

Three gifts to give from non-crafty people:

1. Family Calendar
Make a calendar that has all your personal holidays on there- yes it will have Valentine ’s Day and Halloween, but it can also have all your friend’s and family’s birthdays and anniversaries! It will save your friends and family the chore of transferring all those events from the ’08 calendar to ’09. VistaPrint is nice because you can choose from their stock photography or if you have your own photos (say photos of all the grandkids) choose a photo printer retailer.
Suggested vendors: Vista Print or any photo printing retailer (like Shutterfly or SnapFish)

2. Personalized items
Maybe you want a personalized stationary set, an engraved necklace, or monogrammed bed sheets. My first stop would be Alchemy at Etsy. You can write a description of what you’d like and what you’d like to pay and then crafters will bid on the project! You can also brows individual sellers sites through etsy and convo them asking them to make a personalized project for you. I’ve never been turned down, and I’ve had nothing but good experiences with Etsy vendors. Also, depending on what you want- just Google it. Don’t let your imagination be limited!

3. Make an investment for a gift recipient
Go to Treasury Direct and buy US savings bonds for them. You’ll buy them at a discounted rate and in a couple years they’ll be worth more to the individual than what you bought them for.

Or want to give the grandkids money, but not the kind they can use at the videogame store? Set up a 529 plan for them and help their parents save for their college years. You can set up a 529 plan through any brokerage house (Vanguard, Fidelity, etc.)

Fund someone’s ROTH IRA. If you know someone who is eligible for a ROTH IRA, but hasn’t funded it (i.e. college students or young working but struggling people), you can do it for them. Since the ROTH IRA limits ($5K if aged 49 and under) are under the amount of money you can give tax free to someone ($12K in 2008) there won’t be any surprises on your tax forms come April.

Give a charitable donation in their name. Any large charitable organization (to see how much of your donation goes to the cause see: charity navigator) will be able to handle this for you. Creative ideas include: giving a water buffalo or honeybees ( Heifer ), a tree (Arbor Day), or start a business in the developing world ( by making a loan at Kiva ).

The gifting season

Didn’t you know? It’s Christmas season (or at least that’s what retailers would like you to think)!On my birthday, last Thursday, November 6th, I saw my first Christmas shopping commercial. Also, on the same day, my local shopping mall had erected the giant silver 20-foot menorah.

Ah.. yes.. it’s dipped below 78 degrees and SoCal is envisioning a profitable Holiday season...

Now here’s the shocking part: I do (kind of) agree with them. It is time to think about holiday gifts, but only because you want to make and give sentimental well-priced gifts.

If you tend to be a person who just rolled their eyes at my “make ... holiday gifts” statement, then I suggest that now is the time to start looking for good deals on the gifts you want to buy for people.

Here are my suggestions for getting what you want at the price you want:

1) Make a list of all the people you want to give gifts to.
There are people in your life that you’ll want to gifts to every year. I like to keep a running list throughout the year with these people's names on it. Whenever someone expresses that they like something- I simply write it next to their name. Then I’ve got plenty of gift ideas when a special event comes along.

I also like to get three general gifts. I like to find either: candles, nice towels, simple jewelry or stationary that I can give if any surprises come my way. I actually plan for these gifts in case a gift doesn’t ship in time or someone extra shows up at a function and has a gift for me. These are gifts that are cheap for my wallet, but helpful for my heart because I know I won’t feel badly if something unexpected happens. I never buy more than three extra gifts and I always keep these receipts and return unused items in January.

2) Decide what you want to spend.
You can decide this on a per-gift basis or per event basis. For example, you may want to spend $20 per gift or $200 for all Christmas gifts.

3) Research!
Websites like PriceGrabber or NextTag can give you ideas on where you may want to buy the gift, and help you research if the gift you want to give is in your price range. I also like Amazon to look up reviews for individual products.

4) Shopping time!
Check out when the retailer you’re buying from is having sales or free shipping offers. Also make sure to buy all your gifts from each retailer at one time to save on shipping or time invested in going to that store.

If you are going to buy gifts in stores make sure that you go at a time where you can spend the time parking and shopping by yourself at leisure. You want to be in a good mood, well feed, have a water bottle, and all your self-control in check. Retailers will have special “deals” on stuff you don’t need. But you’ll want them- so stick to your list and don’t give in!

Gifting rules

I’m very excited about visiting my in-laws this weekend to go to a family wedding! No, really, I am. The issue that is hanging me up is trying to determine how much we should spend on the wedding present.

Generally, we spend about $50, but we spend more if it’s a close friend. These aren’t close friends, and there is an additional complication: we know how much they spent on our wedding present three weeks ago.

We know that they spent $30, and are in roughly the same situation as us (one income due to a recent move). So, to them, it probably wouldn’t seem odd if we spend about $30 on their wedding present.

The problem really is- that I feel kinda badly about this.
Like I have insider information and I’m acting on it.

My hubby says that it’s only fair to spend the same amount they spent on us given that we’re in similar financial situations. We’re financial equals- so gifts should be given using a tit-for-tat strategy. He has no problem with this, it’s his side of the family, and I’ve only met these people once before.

Why am I feeling so uncomfortable about this?
What is your rule for wedding gifts?

Where does it go?

One of the things that is emphasized in Chris Farrell’s Right on the Money! is the idea of knowing where your money is going and seeing if this matches what you’d actually like to be spending your money on. In other words, does where you put your money match your values?

To see if I’m on track here’s my Mint breakdown:
32% on Home
20% on Travel
10% on Shopping
8% on Healthcare (the vast majority of this is reimbursed by the hubby’s workplace)
7% on Savings and Investments
5% on Bills and Utilities
5% on Food and Dining
5% on Autos
less than 2% on everything else

While I look at these numbers every month, there is something about having these numbers in percentages that makes it apparent that we’re fairly on track with our spending, but still have room to improve.

Home- We’re living in a great apartment in a great downtown location. It’s the time in our lives when we can do this (don’t have kids, don’t need a lawn). I feel fine about spending this amount on our home.

Travel- We’re both very close to our families, and it is unacceptable to not see them often. We would be very sad people if we didn’t spend the money to spend time with our families and friends. We also make sure to have some vacation time for just us on some of these types of trips.

Shopping- Of course this could be lower. About half of this category was spent on clothing that was wedding related- so this is a category that will go down in our future spending. Almost the rest was spent at Target getting all the things you need from big box stores.

Savings and Investments- I wish this were bigger. Now that we won’t have the wedding expenses, I’m intending to put the difference into savings. Also, once I get a job this will get bigger!

Bills, Food, and Autos- All things you have to spend money on, and are unlikely areas to cut back on without making large lifestyle changes.

How does your values and your spending line up?

What does afford really mean?

I entitled yesterday’s entry “the other Broke Grad Student” in reference to Broke Grad Student’s blog. However, within minutes of posting an anonymous person commented:

“I'm so broke I can't even afford grad school.”

While this obviously is a serious and sad comment, it made me wonder:
When I was applying for grad school three years ago- could I really afford it?

Financial picture: I had an emergency fund and ROTH was partly funded (10% of my income always). I graduated without getting into any graduate schools that year, so I took a year off. During this time I moved north, worked the morning shift at a cafe making coffee drinks, and worked for free as a research assistant to a big name Psychology researcher at a local research institution. I worked hard, retook the GRE’s, got a great recommendation from this big wig and suddenly I was in at many graduate schools.

So could I really afford to go to graduate school?
Financially- not really.
I’ll be paying off these loans well into the next decade. I didn’t have the 16k I would spend on my graduate education saved in an account; I ended up borrowing that in interest-free loans from the government. I worked through my MA getting scholarships, grants, and stipends (euphemism for working lots of hours and getting paid very little) to pay the basics.


Professionally- I couldn’t afford not to go onto graduate school. If you actually want a Psychology-related job that pays well with some stability, then you’re going to have to get an advanced degree. An MA was all I needed to be able to teach Psychology at the local state college. While our move disrupted my career there, I’m still working hard to get colleges locally to notice me. It may take another year or so, but I’m confident something will come up.
Note: Academics tend to relocate to where jobs are, not relocate and then find jobs like I’m doing. (As if the thesis wasn’t masochistic enough, I’m adding this on myself….)

While I agree, there are plenty of people who would not be well-off enough to take this leap, I do wonder: if your career and happiness depends on it, can you afford not to go to graduate school?

the other Broke Grad Student

Yes, it's that time of year. The leaves and the mercury is falling- somewhere. It may still be 80 degrees here, but colleges are gearing up for that new freshman class that will be coming in the next couple weeks.

So, here is my list of five personal finance tips for the new college student:

5. Pretend free credit card offers have syphilis
You wouldn’t sleep with the party skank that routinely visits the free clinic, and you shouldn’t give your finances a venereal disease either.
If you do not already have a credit card and want one, go to bankrate.com and find yourself the best no annual-fee, low APR (if you carry a balance, which you shouldn’t, but in case it ever was to happen…) credit card that gives you some cash-back rewards. If you already have one, check out its terms and make sure it’s up to these standards.
People who give you a free credit card and a water bottle aren’t giving out the quality credit cards; they’re giving out the skanky ones who are easy on the eyes, but not on the wallet.

4. Make sure your banking institutions have a branch local to your college.
If not, you’ll be racking up fees to use other banks' ATMs. Open a new account at a local bank or see if there is a place that won’t charge you to use their ATM (for instance my campus had a national credit union ATM which I could use for free).

3. Keep your financial information secure from your roommates.
If you get lucky like me, you’ll have an ex-stripper with a convicted felon boyfriend as your first roommate. For me, it was only logically that I would protect my financial information with passwords on my computer, a mini-safe for extra cash and my wallet when I was out partying, not bringing my SS card, and having my physical statements go to my parent’s house (since I could view mine online).
Or you could be like my husband and have great pals as roommates. However, one of these pals was quite the belligerent drunk, and actually stole and used the third roommate’s credit card. Due to privacy laws, my husband had no knowledge of this occurrence until after that same pal stole his computer. What a pal.

2. Start contributing to your ROTH IRA now.
Why plan for retirement now? It's called compound interest- invest a little now and because you have years to invest the money it will grow much larger than if you wait 10 years to start investing. Never heard of this? See this Get Rich Slowly blog about the topic and this use the calculator at Young Money.
Even if it’s only a couple hundred bucks, like I did, doing this early in my undergraduate career inspired me to try and put more in the next year. While you maybe only earning $6.75 at the bookstore, putting 10% of your paycheck into a long term account will help keep you money conscious for years to come.

1. Organize your personal finances before you go off to college.
If you’re anything like me, all you may have is a savings and checking account at the local credit union and may see this step as worthless. However, realize in the next few years your monetary situation will drastically change. You need to have already started your good money habits before you’re making a lot of dough and are tempted to spend it.

What are your tips for the freshman class?

Be back August 4th!

I’ll be wed on July 27, 2008 and then we will be on our honeymoon in Jamaica!

While this is, by far, the most expensive trip we’ve been on as a couple; we found ways to save money even on our honeymoon.

We booked our trip during the green season of Jamaica (which is also a euphemism for hurricane season- so please keep us in your thoughts!) which is much cheaper than high season.

We also booked during a 30% off special months ago.

But by far the biggest cost saver for this honeymoon is:
Our honeymoon registry!

Yes, we adore Crate and Barrel, but we already have two apartments worth of stuff in our current apartment. So, we have been incredibly grateful to the people who have already contributed over $1,500 towards our honeymoon!

While it took some cajoling to get my parents to sign on, and a few raised eyebrows to ignore; the step from people giving us gift cards to C&B to giving us a gift card for our honeymoon wasn’t the leap we expected it to be.

How do people feel about honeymoon registries?

Going to the chapel of thrifty love

Wow- it’s been a whirl wind last week. I had a great time with all the girls this past weekend, and my fiancé and I have been practicing our dancing. With so many last minute details to look over (cancelations meant new table arrangements, who knew signs could take so long to make?, we broke an electric razor and our digital camera) it hasn’t been an easy or cheap (tiny airline approved bottles=very expensive toothpaste per ounce) experience.

While my parents have been overly generous by paying for the wedding, we did try to be prudent with our spending. Here are some of the ways we tried to wrangle in the budget:

I picked three areas I wanted to spend the most money on:
location, food, and photography
All the other areas (flowers, paper goods, favors) we wheeled and dealed with vendors to get bare bones prices.

We booked my top location on a Sunday, to save on price (and it was the only day open for a year…)

We loved our caterer, and decided to go with a lunch to save money. At lunch time people only need a salad and a main course, no additional desserts beyond the cake, and drink less alcohol (in fact we only have wine and beer which we purchased ourselves). Since the lunch is served, we don’t have to pay for leftover wasted buffet food.

We booked a top notch photographer and an assistant while only paying half the fee by agreeing to edit and organize my own album using his digital negatives (I use to be a photo editor in the year 2000).

I made our invitations through VistaPrint, an online printing service, by creating my own invitation, postcard response card (less postage to furnish), and envelope. It was completely personalized and professional without being ecologically wasteful (who really needs all those extra envelopes and papers?).

Our florist knew how to stretch our flower budget and made some smart suggestions:
Using ceremony decorations at the cocktail tables, tucking big glossy leaves under our arrangements so that we could use fewer flowers (without having ugly filler flowers), and allowing us to make our own vases (birch bark wrapped mason jars) saved us from a $15+ per vase charge.

The favors are small silver frames (on clearance at an online store) that also hold the escort card (a free blank business card courtesy of Vista Print on which we typed each name). Later we intend to send a wedding photo with our thank you card that they can put it in this frame.

We are also bringing in some of our own decorations: family photos for a hutch in the cake area, a branch turned into a photo tree display, wooden monograms made by my Dad carved into our initials, and lots of moss! These items where cheap to bring in and I will be able to have in our home as decorative items that I will cherish forever.

These are just a few of the things that my family and I have thought up as cost saving measures over this last year. What are some of yours?

Eyes on the money

I’ve been utilizing my newly acquired health insurance (regular physical- check!) and yesterday I went to the eye doctor. Needless to say, I haven’t gotten new contacts or glasses in over 4 years so I was certainly due. After my time with the doctor it was time to sit down with the stern lady in black who explains to you your bill.

Here was mine:
$10 co-pay
$65 not coverage by insurance for tests
$160 not coverage by insurance for 6 months of contacts
Total: $235

Thank goodness they take CC, because I only keep $200 in my checking account!

While we have the money to pay this, I was wondering at what point it would be more beneficial to have Lasik. While I would want to accomplish my other financial goals first, I have to wonder if the surgery was successful, how long would it take to pay it off in contacts?

Figuring that Lasik is about $3000, and my contacts cost me $320 a year, it would take a little over 9 years for the costs to even out. While the convenience is worth well beyond that (I’m almost blind- I can’t see faces at about three feet) it still doesn’t make it fiscally possible.

How about you? Anyone else had or is considering this surgery?

Not so Minty fresh

In an effort to “meld minds” financially with my significant other, I’ve been trying to map out our finances to see where we are as individuals. I figured if we could see where our money is spent and saved we could further refine savings goals for the future. I’d been having a hard time, so I turned to the software program Mint to try and organize all our accounts.

It was working perfectly; it is a great tool- except for the accounts with additional security questions. For some reason, it can’t access those accounts.

This, of course, leaves us with an incomplete picture of our finances as a couple. It begs the questions:

Has anyone else had this problem?
If yes, how do you fix it?

And more importantly, do we have to have it all figured out before enacting steps to save as a couple?

Or should we start somewhere and figure it out along the way?

Budget blown

So- I was fairly excited about the David Bach budget.

That is, until I sat down with our expenses.

Granted, we’re living on one income right now, but we’re not saving anything.
Anything.
Nothing.
Nada.
Zip.
The last few months living in a more expensive city have been- well more expensive. Plus, before I was bringing in some income with student jobs and student loans. Now, I’m not.

So where do we cut back?
Housing expenses?
Move to a cheaper apartment? No way in hell. Moving was horrible. We argued more in those two weeks of moving than we did in the previous seven years. Not a chance.

Conservation?
We already have efficient light bulbs, prefer to open windows than air-conditioning, and don’t leave electrical appliances on. He has a fuel efficient car, and I bike everywhere… so I guess not here.

Cars?
His is almost paid off, and I’ve owned mine outright since I bought it. No cutbacks here either.

Phones?
No house phone, and He found a good deal when I updated my phone in January.

Food?
Groceries are so expensive here. This might be an area to cut back in, I’ve got an idea for a post on groceries stores later on…
Dining out. Yes, we do it once a week. We don’t order alcohol much or desserts or appetizers. I don’t see this as a place to cut back- we moved to downtown to live in down town. We want to experience it, not just live above it.

Personal expenses?
Yes, always there is room to cut back here. Wedding stuff isn’t cheap, but it will be done in two months (without any CC debit for us). So hopefully this will resolve itself. I like shopping as much as the next girl, but I’ve been the same size since I was 10-years-old. I keep wearing my stuff longer than I probably should. He is good about spending too, no over indulgences in boy toys.

So now what?
I guess this will be alleviated when I get a job. I’m applying like crazy and have been for the last four months. I’m hoping a Fall position will be in my future.
But until then….

A budget I like:

from The Automatic Millionaire by David Bach

The main idea: Pay Yourself First!
(Can you tell why I like this guy?)

To make a budget you decide what type of lifestyle you want in the future (i.e. how rich you want to be as compared to how rich you are now) and then use that percentage to save and invest. Then you live on the rest.

Want to live at:
Middle class- pay yourself 5-10%
Upper middle class-10-15%
Rich- 15-20%
Uber rich- at least 20%

Even if you want to be uberrich you just make sure your current costs that you have every month don’t exceed 80% of your income for that month. Does this really work? It seems so easy!

For example:

Average SoCal median income (US Cenus Bureau 2006): $ 70,502 per year
Bringing home (after 30% taxes): $4112.62 per month

Middle class- 5-10%
amount to save: $205.63-$411.26
amount to live on: $3906.99-$3701.36

Upper middle class-10-15%
amount to save: $411.26-$616.89
amount to live on: $3701.36-$3495.73

Rich- 15-20%
amount to save: $616.89-$822.52
amount to live on: $3495.73-$3290.10

Uber rich- at least 20%
amount to save: >$822.52
amount to live on: <$3290.10

Budget gripes, part 2

The other problem is that these budgets seem too be written for someone living in ittsy-bittsy-town-USA.

Who only spends 30% on housing costs like rent or a mortgage?

If we did this is, we would need:

Average home price in my city: $762,260 (source: Money Magazine).
Average monthly payment: $4,448.34 a month
(Assuming 5.750% and 30 year fixed source: www.mortgage-calc.com)
That means you would be making $14,827.80 a month or $177,933.60 a year.

Ummm… I don’t know anyone who makes that much a year.

But what about us renters?

The average rent for a 2 bedroom apartment in March, 2005 in Pasadena*, was $1,209 per month.
According to the 30% rule you should be making $4,030 per month or $48,360 a year.

More reasonable, but still…you’re paying someone else’s mortgage.

*However, most of the apartments we actually wanted to live in were in the $2,000-$3,500 per month range. Pasadena, like most big cities, has some places you would NOT want to live in. So we're in more of the 50% range for our apartment!

Budget gripes

I’ve been reading personal finance books like crazy lately with mixed emotions. They are helpful, but I’ve also got some bones with them.

Most financial books will tell you MUST start your financial future with a budget.
I hate this. It makes me discouraged and I want to put the book down.

I’ve tried them before and couldn’t stick to them. I also had a really hard time figuring out how my student lifestyle worked with a budget. Some months you get more hours at the coffee shop, another quarter you get a grant, but until now I’ve never had a dependable number that would come in every month. It seems most financial gurus believe everyone has a salary.

News flash- not everyone has a dependable salary!