October 18, 2009
But as I sit here contemplating what it would mean to put myself on a strict budget for personal spending, I'm realizing that even supplementing my personal budget with $50 or $60 a week would increase the creature comforts in my life by a pretty fair margin.
The biggest burden on my current objective is rent. In my old apartment, I paid a mere $700 a month for rent. My rent in my new apartment is a whopping $1,500.
So, if I wanted to pursue the same rate of debt reduction that I saw in January, I would need to not only subsist on whatever little bit of money I can make with online advertising, odd jobs, a second job, or whatever... but ALSO make an additional $800 a month to compensate.
I think it's reasonably safe to say THAT objective is well beyond the realm of possibility for me. At least for now. There may be options I haven't uncovered yet.
So, anyway, the second job has more appeal the more I think about the simple fact that every little bit helps. The only real question is whether or not I can make more money with a regular job or with odd jobs.
I guess the only way to figure that out is to go into Banana Republic and ask!
If I found a way to supplement my income by $250 a week, I could likely do like I did in January and live off of that completely. It would still likely be July before my credit cards are paid off, but it would give me steady progress.
But the MOST disappointing thing is that since my last post, I really haven't done a single thing to work toward my goal. And I basically lost an entire month.
With that in mind, I am going to put myself on a strict spending budget starting tomorrow. The problem is that I don't know what I need. My groceries each week usually run about $100. So, I figure if I go with $160 a week, I will be able to do all my socializing and eating.
September 14, 2009
Anyway, I did make one good financial decision: I canceled cable.
For several non-consecutive years prior to moving to NYC, I didn't have cable. I barely had my DVD player hooked up. And I liked it a lot. I felt like I had more time to do things and like I got more reading and writing done.
But when I moved to NYC, I had to get cable because that abomination of customer service known as Time Warner Cable didn't offer an internet-only option. Well, lo and behold, I recently found out that they have that option now!
So, I canceled cable! That will save me about $75 a month! It's not much, but it's something!
September 13, 2009
Before I moved to NYC, I didn't have cable television. I have satellite for ALMOST a year, but it was really to placate visitors. I liked not having television because it left me with a lot of free time. When I moved to NYC, I could not get cable without internet, so I started watching television again.
It takes a LOT of time!!!
Well, Time Warner appears to have started offering internet-only!! For just $35 a month for the first month. BARGAINS!
So, tomorrow, I am going to scale back to internet-only if I can. It will save me nearly $100 a month! And I will be able to watch most of my shows on the internets.
I will let you know how it turns out.
September 01, 2009
I paid off my credit cards at the end of April. It was frikkin' AWESOME.
But then I moved at the end of May. That was an expensive prospect. I had to pay the broker and put down a deposit and buy new furniture. I also went on a couple of shopping sprees to make my life more comfortable.
So, here's where things stand right now according to Mint.com.
Cash: + 2,886.36
Credit Cards: -$8,429.10
Student Loans: –$24,261.29
Line of Credit: –$25,171.30
My primary concern is the credit card dept above. The student loans are cheap debt and the real estate debt helps me on my taxes. So, my primary focus is paying off those credit cards.
That $8K, let's just call it $9K because I just bought myself a couple of appliances for my kitchen for my birthday, is not small to me. You'll recall it took me roughly four months to pay off $6K in credit card debt at the beginning of the year.
Well, I'd like to pay this off before the end of the year and I only have four months left: September, October, November, and December.
In the middle of that, I have a trip to Aruba. And there's a trip to the Bahamas in March 2010 that I'd like to go on. And I am anticipating BIG changes in May 2010. (Those are yet to be decided, so we don't talk about them.)
In four months.
That means I have to pay more than $2K on my credit card debt each month. How is that even possible?!?
I get paid about $1,700 every two weeks. My rent is $1,500 a month. Cable and internet are $131 a month. My gas and electricity vary, but are about $75 a month. So, that's $225 a month in utilities because I'm bad at math. TOTAL, that's $1,725 in basic expenses.
Ok. Now I'm starting to wonder what I'm doing with that left over $1,500 a month. (Remember: I am bad at math.)
I do tend to spend about $150 a week on groceries, but that still leaves $900 for other junk.
If we assume that I can automatically pay $900 on my credit cards -- barring paying for ANYTHING else like eating out, going to Aruba, painting my apartment, or anything else -- I really need to find $1,100 a month to pay them off in the time frame I've chosen arbitrarily.
That means two things: cutting costs & increasing income.
I can EASILY cut my grocery costs down to under $125 a month. EASILY! That will leave me to find $1,000 a month in extra income.
This is a challenge. There are ways I could make my career more profitable, but right now I'm really looking for something that will keep me where I am and completely sane. This means I need something relatively mindless because I absolutely do NOT want to think about whatever my second job is while I'm at home. I also need to be able to maintain some semblance of sanity in my private life. (Private life being the parts I blog about.)
My best friend, Johndavidov, used to clean houses in Georgia, so I am looking into that. Not only is it very profitable, but I have a certain marketing advantage in that I am not a Latina.
In Georgia, Johndavidov used to charge $30 an hour for his services. I could charge at LEAST that much. Since I need $1,000 a month and I estimate that each apartment will take a minimum of three hours AND I would not like to maintain more than three clients a week, I'd need to charge some $38 an hour.
3 clients a week * 3 hours * $38 an hour = $1,368
That's more than enough to meet my goal.
Now I have to line up my clients!!!
So, while my other blog, Treygivens.com, is intended to be more introspective, more political, I think this blog is going to be a little more subversive. Maybe I'll talk about romantic things or job things, but mostly I intend to talk about money things.
Maybe this is just me as a southerner, but talking explicitly about money is considered to be in poor taste. Since I don't really care about that, but I also don't want to distract from the larger, more principle-related issues I think using this blog for that topic makes a lot of sense to me.
What do you think?
May 03, 2009
TWCSucks contends that the government should come in and break up the monopoly and create some sort of competition in order to drive down prices and improve service. There are obvious logistical problems with that given that no one is going to encourage the idea that we should run more cable lines throughout the city.
TWCSucks also contends that there aren't any alternatives to Time Warner Cable. This is as false as you might imagine.
You can get satellite television for one and broadcast television does still exist. Given that most shows are published online, you can get the internet through wireless providers and watch television that way. Or, if you're more patient and a greater stickler for video/audio quality, you can wait and buy your shows on DVD, or get them from Netflix or Blockbuster. The point here is that if you hate your local cable company so much, there are alternatives to cable television. Regardless of alternatives, the fundamental choice with regard to TWC is to do business with them or not and no one is forcing you to pay them.
TWCSucks compares TWC to a utility. Statists have argued that utilities have to be regulated because people NEED utilities. But to compare your deep burning desire to see if Brett Michaels finally finds true love on the Rock of Love Bus to the desire for a warm, well-lit home strikes me as stretching for all but an all-out Marxist. But I don't know TWCSucks' politics apart from this, so I don't really know if he's an actual communist.
All of that aside, let's consider the argument people make that competition is good for consumers because it pushes down prices and improves service. It also fuels invention and innovation. This is all true enough. But what of monopolies.
"Oh, monopolies are bad!" they say. Because a monopoly means that there isn't any competition. This means that the monopoly is free to lay a heavy hand on its customers, raise prices, cut service, and engage in all sorts of unpleasantness. "They can and they do!" they say.
That's not true, though. At least not in a free market. In a free market, monopolies are won by providing the best service for the lowest prices. Monopolies are under constant threat of competition even if no competition exists. If they raise prices too far above costs, an opportunity for competition arises and they can lose business.
With this in mind, we can actually view competition as a sign of economic inefficiency. It means that none of the businesses in operation have achieved a high enough level of success to make it unprofitable for customers to go anywhere else and drive their competition out of business.
This isn't universally true, of course. There are many factors in business which drive competition. Consumer demand for variety, commoditization of the cost of production, and so on and so forth.
I would simply point out that competition in itself is not always a sign of a healthy industry or economy and the creation of competition by the government does not always aid consumers. Where the government has exercised its antitrust power against freely won monopolies, I would argue that consumers have suffered.
April 20, 2009
Banks. Hoarding. Money.
The sheer economic stupidity of that description gobsmacks me. I'm not sure where to start, so I'm just going to address one aspect of this remark.
Banks don't create money and when they lend it, they aren't just giving it away. Loans are investments. They're bets that whatever they're putting the money into -- whether it's your mortgage or for a loan to start up a business or whatever -- is going to make money and they're going to get a cut of it.
For a bank to refuse to lend money to some particular person or business does not mean they're keeping all the money for themselves or something. It means they're just not comfortable with the investment options presented to them.
You may recall that much of our current economic woes are the result of banks making bad investments, particularly in the realm of mortgages. They issued a bunch of loans to people who couldn't and didn't repay them. Then, the bank was stuck having bought a bunch of houses for a lot more than they are worth. That's a toxic asset.
And the CNN financial commentator, Jennifer Westhoven, is upset because she apparently thinks that banks should continue issuing loans without regard to how they assess the risk of the particular investment.
In order for our economy to recover and maintain growth, banks must restrict lending and consumers must restrict their borrowing. People need to focus on reducing debt and saving. So, reports that lending has slowed, consumer debt is decreasing, and other such things are VERY GOOD SIGNS.
This makes me sad because I generally like Jennifer Westhoven. She's cute and funny and usually reports on money topics with a fair amount of good sense. Not this time, though!
April 16, 2009
WELL! I am very happy to announce that I have finally, completely paid off my credit cards as of today.
My most immediate financial goal now is to find and move into a new apartment. That will require that I continue to be frugal for the next couple of months and then I will be able to begin attacking my student loans in earnest as well as building up some savings for rainy days.
April 12, 2009
And did you know that there are people out there shopping for a house who have not bothered to prequalify for a mortgage? IT'S TRUE!
This is incomprehensible to me. How do they know how much they can spend?
You can go on the internets, I know, and do little mortgage calculators to figure out your payments, but the amount of your loan is not determined by how much you think you can spend each month and there are lots of other little things to account for, too.
So, I just don't get this whole, "Oh I found a house I like, now I'll see if I can afford it" mentality. Would you go to the grocery store, pick out all the food you want and then look to see how much money you have in your pocketbook? No. That would be stupid.
So, please do me a favor and don't do that. Just go prequalify for a loan before you start shopping for a house.
April 06, 2009
I say this with full knowledge that both my mother and my sister are members of unions along with some of my cousins and uncles and aunts.
If you are good at your job, then a labor union actually prevents you from getting your fair share of pay and benefits because it requires that a minimum amount of pay and benefits be guaranteed to people who are not as good as you. And most everyone knows someone at their work that just isn't as capable as they are. (If you don't know anyone who is less capable than you, you should think about what that means about your skill level and count yourself lucky to work in the presence of so many prospective mentors, leaders, and teachers.)
Well, C. August has a good post up over at Titanic Deck Chairs right now imagining what a mutually beneficial labor union might look like.
I think this makes a fair bit of sense, although I am not sure about the relative benefits to management of such mass negotiations for relatively unskilled workers. For workers that do require a bit of training and experience, however, this does seem to make a bit of sense, especially if the union offers some sort of certification around skills and training.
The union could even offer junior members additional training by supplementing their pay while they are being mentored by senior members in order to save management some costs and provide additional value. This supplemental pay could come from dues or even from management who could pay a union less to train those junior members than training them themselves.
But the biggest difference between what we have now and what we could have under a truly free system of government and trade is freedom from the burden than is labor unions today, which C. August also effectively describes in his post. So, check it out!
April 05, 2009
Ludwig von Mises Institute: The Flat Tax Is Not Flat and the FairTax Is Not Fair
Two specific tax reform plans that some libertarians have fallen for are the Flat Tax and the FairTax. Both plans promise to invigorate the economy, increase employment, and raise everyone's standard of living. Neither one is true to its name; neither one is an incremental step toward overall lower taxes. Both are fraught with problems and contradictions; both are revenue-neutral plans that would fund the federal government at the same obscene level that it is now.On a side note, the article mentions something called "principled libertarians," but I have no idea what that is. Are there, by his own meaning, "unprincipled libertarians" out there?
If you add a modifer to something, then the implication is that the object does not necessarily have that characteristic. For instance, if I say "red car" you can safely conclude that not all cars are red. This gentleman's need to say "principled" before "libertarian" implies that whatever it is that makes a person a libertarian, it isn't principles.
And from this, you should understand why Objectivists have such a problem with the Libertarian Party.
March 30, 2009
The government does not make money. It only spends money.
People talk about how the government can create jobs and things, but that's blatantly misleading. It creates positions that have to be paid for not by customers, but by tax payers.
The government is simply not a productive force in an economy. If it were doing something profitable, it would be something already performed by a private business.
March 28, 2009
The end result was that my rental property in Georgia was a bigger loss than previous years. This isn't good news in the bigger picture, but it usually means my refund is higher.
But when I got done with my taxes this year, my refund was pitifully small. Instead of being a few thousand, my tax refund both state and federal combined after the cost of Turbo Tax is only a couple hundred dollars.
This is disappointing and very annoying. What will my taxes look like in coming years when the government has to start paying back all this money they've been giving away?
March 22, 2009
I really don't make enough money for that, particularly if I increase the amount I pay toward rent. So, it looks like setting a time limit of December 31, 2009 may be setting myself up for either failure and/or a miserable year in which I'm not allowed to spend money.
But I don't work well without a deadline, so I am going to target next June instead. That means I only have to pay a very manageable $1,600 a month to pay it off by then.
It's so nice having a plan!
But is it a good goal to have?
There are lots of personal reasons I have for wanting my own place, but is it the fiscally wise option? The more I look at this, the less sure I am of that.
Buying property here in NYC is not only challenging because the prices are really high, but even more difficult in light of all the extra costs like building maintenance fees which never go away, never go down, and can run as much as a rental payment in themselves. Plus, ownership in NYC isn't the same as owning a place in GA. I could do whatever I wanted with my property in Georgia. I can rent it out, renovate it, tear it down, build it up, whatever. Here in NYC, there are rules against pretty much everything and although they aren't always violations of my rights as an owner they do make ownership more restrictive than you might at first imagine.
The thing that irritates me the most about renting is the fact that each year, your rent usually goes up -- and up faster than one's income. I would prefer to move into a place and just stay there as if I did own it. You'd think a landlord would love a sure thing like me, but renters are easy to come by in NYC, so my willingness to stick around is of very little value to a landlord.
I have to consider the long term financial outlook here. I already have a mortgage payment for my property in Georgia, which I believe is presently worth less than what I owe. I also have my student loans. So, I have a not insignificant amount of debt to my name right now. Looking forward, I think the economic landscape is going to get worse still and getting more debt seems fairly unwise right now. Getting more debt and locked into a geographically fixed investment like an NYC apartment seems a little scary. What if I lost my job and had to move back to Georgia? What if I got a new job and had to move to some other place entirely?
I think I've just talked myself out of trying to buy an apartment now. This means that I am going to start hunting for a new apartment to rent because I want to live by myself again. And it means my next financial goal is to pay off my student loans or my equity line by the end of the year.
*WHEW* Glad that's resolved.
March 18, 2009
A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success.
The secret behind East Bridgewater Savings Bank's accomplishments is the careful approach of 62-year-old chief executive Joseph Petrucelli.
"We’re paranoid about credit quality," he told the Boston Business Journal.
That paranoia has allowed East Bridgewater Savings Bank to stand out among a flurry a failing banks, with no delinquent loans or foreclosures on its books, the Journal reported. East Bridgewater Savings didn’t even need to set aside in money in 2008 for anticipated loan losses.
But rather than reward Petrucelli's tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported.
I think it's clear what's going on here. Racism.We know they're racist because the Community Reinvestment Act was passed in part to help minorities. And by having a low CRA score, we can only conclude that they hate black people there.
And because they had to pray to Satan in order to find out about the credit collapse in advance, we know that they plotted this whole thing just to make the FDIC look bad.
They should change their name to the Anarchist Bank of White Supremacists in East Bridgewater.
Hat tip: Kevin
March 16, 2009
I don't think he's right. It would be nice if he were, but even if things back away from the brink of "fiscal Armageddon" I believe the government policies around the bailout will leave us stagnating and with an inflated dollar.
But during this interview, I swear I hear a slight waver in Bernanke's voice and it makes me question whether or not HE even believes this.
March 15, 2009
It turns out that at some point (I have no idea when, why, or how.), I actually overpaid one of my OTHER credit cards. (I have lots of credit cards, but I only have balances on two of them.) I found out because one of the banks that owns one of my $0 accounts bought one of my accounts with a balance.
And the amount of my overpayment on that $0 account is just $60 shy of the remaining balance on the account that that bank bought out!
So, I just paid that $60 difference and I'll call tomorrow to see if they will just apply the overpayment to the other account they own.
Meanwhile, the account I THOUGHT I was paying off on Thursday only had a tiny remaining balance, so I just made a payment on that.
This means that assuming they do as I request tomorrow, my credit card balances will be $0!!!
Update: I actually found a 24/7 number to call and spoke to a Customer Service Peopleguy and it turns out that as obvious and easy as you might think this would be, they cannot apply the overpayment to another account. No, they have to mail me a check. What a shame in the butt.
So, I'm going to chill out for a couple of days and see if any additional charges from my vacation show up and then pay off the remainder. YAAY!!!
March 12, 2009
Yes, that's right! I did all that without resorting to the paycheck I'm going to receive on Friday! (A paycheck that will be $400 more thanks to President Obama giving me back some of the money stolen from me before so that I'll ignore him stealing even more later.)
I didn't schedule paying off the rest of the balance just yet because I am going out of town this weekend and if anything happens, I want to be sure that I have some dollars left in my bank account.
This weekend is going to be a little expensive because I have a hotel, a rental car, and food to pay for while I'm on the road. I am not 100% certain that my balance will be $0 at the end of the month, but if I have a balance, it's going to be REALLY close.
In the end, I am really happy with how things have turned out. Ultimately, I attribute my success to the big push in January, which not only gave me a lot of financial momentum to get to this point, but taught me some good habits for maintaining that momentum.
My next major financial goal is going to be to save up to buy an apartment. I'm feeling uneasy about that goal because of the looming inflation coming in the next couple of years, so I may end up just paying down some of my other debt.
March 10, 2009
Our current economic crisis is caused by and excess of debt.
Debt is what one has when one hasn't produce enough wealth (goods or services) to cover the financial obligations one has accepted. Ordinarily, a bit of debt is fine, even a good thing, but financial institutions the nation over went around extending loans to people who ended up not being able to pay them back. LOTS of people. This left the banks with a lot of property they didn't really want but had to claim because of the defaults on those loans and then they realized that the loans they extended were not only risky, but in excess of the value of the property because housing prices were too high. So, not only was there a lot of debt, it was highly inflated debt and all those chickens came home to roost in those financial institutions.
So, with the economy stuffed full of people now bankrupt and even destitute because they took on debt they could not manage and the banks overloaded with lots of devalued assets and negative balance sheets because of the defaults on their loans, everyone is unhappy. Lots of people can't afford to buy anything. Banks can't afford to make cheap loans, which make it difficult for the a-little-better-off people to take on debt, so they can't buy things, and this makes it harder for the progressively-better-off people and small businesses. And so on and so forth.
And what does this problem all boil down to? Debt. There just isn't enough actual wealth (goods and services) to pay back all the debt there is.
So, how it could it possibly be a good idea for the government to increase the amount of that debt in the country by TRILLIONS of dollars? It makes absolutely no sense to me.
February 26, 2009
It's very cool.
February 25, 2009
The more I think about this fact, the more I realize that my financial luck when it comes to synching up with the market may be changing.
I left college in 2000 to get a dot com job... right in the midst of the dot com bubble bursting. I probably could have made $10K - $20K more per year if I had only graduated a year or two earlier.
In 2003, I bought a house, which was just after the point when interest rates were lowest and housing prices were highest. Six years later, I have ever reason to believe that I am upside down in my mortgage. Fortunately, I can make my mortgage payments rather easily.
In 2006, I changed career paths slightly and moved to New York. The stock market was hitting new highs, but the price of oil was also on the rise and, perhaps more tellingly, the price of gold was still steadily rising. I say "tellingly" because this was one of the signs some cited as an impending financial crisis that became the trouble we have today. Now I am pretty much locked in my job in one of the most expensive locales in the world.
So, as you can see, I have a bad habit of making major financial decisions at the very worst of times. But I hope that trend is changing!!
See, instead of living hand to mouth as I have been doing, I will begin saving and living within my means. If you account for my mortgage and my student loans, I will still be underwater with debt, but it's "good" debt. And if I can somehow manage to get my foot in the door here in the New York Real Estate Market within the next year, my investment will be reasonably well-timed for when things do bounce back.
So, this economic disaster we're currently living in will actually help me get ahead in the long run, as opposed to putting me into the financial ruin that everyone else seems to be worrying about.
February 21, 2009
After Ron Paul proposed allowing these failing banks to simply fail she said she didn't like that idea posed the question rhetorically, "Who would want to live in a country where all the banks fail?"
Let's do be clear: ALL the banks are not failing nor were they at risk of failing. In fact, with the failure of the mega-banks, it's reasonable to believe that basic banking functions would get redistributed out to smaller banks, making them more healthy and more resilient in the face of the financial crisis.
I am not suggesting that things would improve overnight or that the process would be pleasant or comfortable for all involved. What I am saying is that allowing failing businesses to fail, regardless of their size, is the most sensible approach for anyone truly interested in the long-term economic health of the country and that the enemies of freedom like that lady aren't above lying and misdirection to promote their destructive economic policies.
February 15, 2009
Well, I just checked on it again and I am happy that it's now back up over 700.
Also, I think I've made up my mind about my next financial goal. Recall that I have three immediate options once I get my credit cards paid off:
- Pay off my student loan.
- Pay off my equity line of credit.
- Save to buy an apartment.
The student loan and the equity line have about the same balance. The interest rate on the equity line is a little more than that on the student loan.
So, I think I've decided to just focus on saving for an apartment. I'll increase my payment on my student loans slightly and I will watch for an opportunity to refinance my house completely (I won't refinance until I've paid 20% of the value so that I can avoid PMI), but mostly I will start putting money away in a savings account.
The reason for this decision is really just a question of time.
I would like to buy a place around this time next year and most places here in NYC, simply as a mark of financial stability, require 20% down. It's possible to find places that don't have that requirement, but 20% is a safe target.
In terms of price, NYC is expensive. I am thinking of buying some place on the cheap and slowing investing in remodeling it, so my target price range is $250,000 - $300,000.
That means I have to save $50,000 to $60,000. And $50K is beyond what I can reasonably expect to save in 12 months. (I'm not even going to think about the fact that many building boards require that you have your down payment for 6 months.) I will just have to come as close as I possibly can and start shopping in hopes of finding a place that doesn't actually require that much.
But if I don't start saving, then I will pretty much guarantee that I can't find a place to buy.
Now, before I end this post, did you notice the bit of self-trickery I've done here? I said that my target price is $300,000 and 20% is $60K. Well, $300K is actually the amount that I want to take out in a mortgage. That's the amount of a loan that I am comfortable paying on each month. The 20% doesn't come out of my mortgage, though. It's an addition to the total amount. So, assuming that I'm able to overcome the 20% limit placed by the boards, then it means I will be able to buy a better apartment for my target range OR it means that my monthly payment with the mortgage will be less because I won't actually need a $300K mortgage.
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