No-Buy January

As a bit of a personal challenge, I decided to go the month of January "without buying anything."  I put that in quotes because there were obvious exceptions.  Case in point, groceries.  Beer counts as a grocery, if bought at a grocery store.

I guess it would be better to say I went the month without buying anything frivolous.  The main thing I wanted to focus on was clothing, because I've been doing a mini wardrobe overhaul for the past few months (still ongoing), and it was starting to add up.  Additionally, I've been spending more at restaurants than I would like to lately, so I wanted to limit that as well.

It was interesting.  For one thing, it wasn't nearly as difficult as I thought it would be.  Since I knew I wasn't going to be buying anything, I spent a lot less time browsing, both online and in stores, than I have in past months.  This proved challenging when I went to Nordstrom Rack to help Joe exchange a shirt.  I found this cape, at an amazing price of only $60 or so, marked down from well over $200.  I love the color, it felt very nice/soft, and I've wanted a cape for months now.  But I told myself, "Self, you already have a nice coat and you don't actually need a cape.  If you're going to spend money, it would be best spent on something else."

I'll be honest, I spent about an hour that day in a funk.  But I got over it.  Besides, I'm secretly hoping Nordstrom Rack will have a "Clear the Rack" sale so I can go see if they still have it, for an additional 25% off...

Beyond that, I never found myself upset that I couldn't buy something.  And it's not like I went on a major shopping spree once February came.  After spending a month of not really looking for things to buy, I don't feel the urge to compulsively browse online stores as much anymore.  Doesn't mean I'm done buying things forever, of course.  I still have some serious issues with my wardrobe and I'm looking for new pieces to replace the ones I don't like, or that just don't go with anything else I own.  But taking a month off gave me a chance to actually think about what I have and what I want, and where I have major gaps in my wardrobe.  So now I can focus on filling the gaps, rather than just buying things because I think I might need it.

I will admit, the month wasn't perfect.  I've been on a massive Sims 2 kick lately, so I decided to buy the remaining expansions that I didn't already have.  It probably could have waited, but I was also buying the games used, so there was a chance that if I waited longer, the cheap ones would be sold and I'd have to buy a more expensive one.  That's the defense (excuse) I'm giving, but I will say I don't regret it because I've had a lot of fun messing around with the new games.

Additionally, Joe and I went out for dinner twice.  The first was before I even decided to do this challenge, and it was something we had been planning since December anyway.  I had a $10 gift card from my birthday, as well as a second, stackable coupon for a free appetizer.  I like almost $20 of free food.  The second time, we went out with a bunch of our friends to watch a football game.  I think it's important to have a balance between saving money and being social.  Even if I go out to eat on occasion, I can still put aside a decent amount of money each month.  I'm not trying to be cheap; just frugal.

So overall, I would say the challenge was a success.  No, I wasn't perfect.  But I was able to cut down on absentminded browsing of online stores, which will undoubtably cut down on future spending if I keep it up.  I was able to think more critically about what it is specifically that I don't like about my current wardrobe.  As an added bonus, I received a nice boost to my net worth.  And that, to me, is a lot more satisfying than buying a cape.  (Though I still really, really hope it's not sold out at my Nordstrom Rack...)

What Should I Do With My Savings?

Well, it's been a while since my last post.  I'm going to blame things like lab, vacation, and general laziness.  But my absence isn't interesting to talk about. Let's talk about money.  That's interesting, right?

So I find myself in a pickle.  As a grad student, I don't make a lot of money.  But, I also try not to spend a lot of money, so I end up having some money left over at the end of each month. Now, what should I do with that money?

Some might say, "Stick it in a savings account!"  And at one point in my life, that's what I would have done.  I was so proud of myself as a cute little undergrad going to the bank to open my very own savings account.  Where I got a couple cents of interest a month.  Exciting, right?  I've stepped up my savings game since then, and now have an online savings account with Barclays.  Here I make over $1 a month, with much less in the account than I ever had in my old savings account.

Good for me for opening a savings account that actually gets me some cash, but chances are I probably shouldn't even have that account right now.  You see, even though I manage to put away a decent chunk of money each month, I still find myself with a negative net worth because I have student loans that need to be paid off.  As a grad student, I don't need to make payments on these till after I graduate.  And that sounds great because inflation means they'll be worth less then than they are now.  It might not be much of a difference, but it does help.  So I would almost say it's in my best interest to not pay off my loans yet, but that would be forgetting to account for interest.

There's two general types of student loans:  subsidized and unsubsidized.  Subsidized don't accure interest while you're in school.  Unsubsidized do.  I have some of both, which means my student loan value is going up daily.  The interest rate on these loans is higher than the average rate of inflation, so I want to get the unsubsidized loan paid off as soon as I can.  The subsidized loans, currently accruing 0% interest, won't be touched until after I graduate.  They'll also have lower interest rates than the unsubsidized loan, which is nice.

So I should just take what cash I have saved up and dump it into my loans, right?  Maybe.  The other option I have is to throw the cash into my IRA.  I have a Roth IRA, which means that I put money in after taxes, but I don't need to pay taxes when I take the money out.  The money in my IRA is invested in index funds, which means it's distributed proportionally across all companies in the stock market.  On average, the stock market goes up over time.  By investing in index funds, you get that average.  Now, there are a lot of finer points on Roth vs. traditional IRAs, index funds, etc.  I'm no financial expert, but there are a lot of resources where you can get more information if you care.

Looking at my IRA, the value has been tanking for a month or so.  I haven't yet dipped below my original investment, but it's getting pretty close.  Some people would look at that, freak out, and take all that money and put it in a nice, safe savings account instead.  Or maybe a CD, which would make a little more interest than the savings account.  Me, I'm just going to leave the money there.  As fun as it can be to try to "buy low and sell high," I'm sticking with the tried and true "leave it be" method.  Sure, it's having a bad month.  But this is a retirement account.  I don't need the money till I retire, and that's not for a long time yet.  Again, the stock market averages upward, so while I work towards my retirement, this month will eventually become just a little meaningless blip.

So again, two general options.  I can pay off my student loans and stop them from accruing interest.  Or I can work on maxing my 2014 IRA, where I'll be the one profiting from the interest.  I don't like being in debt, so I'm tempted to throw the money into my loans.  But you can only contribute specific amounts into your IRA each year, and you can't go back and invest in past years, so not putting money into my IRA would be missing out on a portion of my retirement fund.  Currently, because I'm bad at making decisions, I have the money sitting split between my checking and savings accounts.  Having money in my checking account where it's not even making interest, is probably the worst thing I could be doing with my money (besides spending it needlessly), so I really should make a decision, and soon.

Overall, try to be at least a little bit knowledgeable about investing your money.  And don't let it sit around in a checking account gathering dust like mine is!

Start Taking Responsibility For Your Own Life

A while back, I had read an article posted by some of my friends on Facebook:  "20 Things You Need to Accept About Your 20s."  I've seen posts like it before, and the message is generally the same:  Stop freaking out, you're not supposed to have your life figured out 100% yet, and you're not the only one who feels this way.  Positive messages for people who feel like their life is a mess, which seems to be a pretty common feeling these days.

And yet, every time I see an article like this, I get a weird vibe from it.  This specific article was the tipping point for me - these articles aren't just sending the message, "You're not alone."  They also are saying, "Life isn't going how you want but it's beyond your control so don't worry about it."  They're saying, "You don't need to take responsibility for your shortcomings."

Reading this article, I thought to myself, "I'm sick of these bullshit excuses."

When things don't go how you want, it's so easy to just blame anyone or anything besides yourself.  "I can't afford to eat well because the cost of living is so high."  "I can't exercise because the gym is too expensive."  "I can't find a job because the job market is too competitive."  "It's ok that I'm up to my eyeballs in debt; everyone my age is."

(sorry those all seem to tie into money - money isn't the big issue here)

Taking responsibility for your life is scary - it means you need to admit you did something wrong, you made a mistake, or maybe you aren't doing the best you can.  And yet, it's oddly relieving, because you can tell yourself, "Things may not be how I want them to be now, but they don't have to be that way because I can change them."

I get it, we're broke.  Student loans need to be paid off, along with rent, utilities, etc.  So start spending less.  Eat at restaurants less.  Go to bars less.  Buy new clothes less.  It doesn't need to kill your social life - have dinner parties at home.  Drink at home.  Find free/cheap entertainment around town.  And sure, ramen is dirt cheap, but it also is loaded with fat and salt and has little nutritional value.  Joe and I eat quite well with a grocery budget of $60 a week.  Which, incidentally, is below the "Snap Challenge" food stamps budget.  And we're not the only ones.

But time!  Who has free time anymore?  8+ hours of work a day, plus more as needed because you can't afford to lose your job.  How do you find time to cook meals at home and exercise while still having that social life?  Some people swear by the "cook a lot over the weekend and eat leftovers all week" method.  I'm not a huge fan of eating the same thing all week, so I'll plan ahead meals for the week, and save the quick and easy ones for days when I get home late.  I'll admit, I get home later than I'd like on gym days.  But I still have time to cook dinner, watch tv, and take care of anything at home I want to get done, and I'm in bed before midnight.  On run days, I get home earlier and sometimes find myself with too much time and not enough to do!

Of course, I'm lucky in that I still get a free gym membership.  Don't have access to a gym?  Try running/walking/biking/etc.  There's plenty of bodyweight exercises you can do to build strength without any equipment, and most can be adapted to be easier or harder depending on your skill level.  Do stretches to build your flexibility.  Don't have time to exercise?  Yet you can binge watch entire series on Netflix?  Sounds like you have time to me.

I'm not trying to say I have my entire life figured out.  I'm not trying to tell you to cut all fun things out of your life.  I'm telling you to be conscious of the decisions you make everyday.  I'm broke, but I still like going out to the bars.  It's cheaper to drink at home with friends, so I'll usually do that instead, but I will still go out every now and then.  Just not every week.  Sometimes I want to eat a dozen donuts in a day.  So I will, but again, not every week.  And if my weight is higher than I'd like that week, well, means I need to do even better next week.

No, things won't always work out how you planned.  No, you can't change everything.  But it really is amazing how much you can control if you simply care enough to put in the effort.

Unprepared for the "Real World" - Money

I was lucky to grow up in an area with good schools.  I've always liked learning, and I had plenty of opportunities to learn new and exciting things.  Despite that, I find myself clueless out in the "real word" quite often.  Based on my experiences, there's a couple places where schools could make some huge improvements, two examples of which are education about food and money.  Maybe your schools did a better job teaching these than mine, or maybe the responsibility should be more on parents, but regardless of where the problem is, this is something that needs to be addressed.

Let's just focus on money today.  In my high school, we were only required to take a half semester of econ.  The class I took to meet this requirement had a project where we were assigned jobs and salaries, and had to make a budget based on that.  We learned to fill out a check.  We played the stock market game for a couple weeks.  Bam, econ requirement finished.  We never talked about how to make a good budget - this ended up being me blindly guessing at how much things like health care, utilities, and groceries would cost.  We never talked about how to invest in stocks in the real world, let alone the different ways to invest in stocks.  We never talked about how you save money for retirement.  Sure, there was the "try to save 10% of your salary," but where should you put that money?  And what about taxes?  Nothing.

I have a steady income now, so I should know something about money and what to do with it, but I don't.  I'd throw some extra money into my savings account every now and then, and the rest would just sit stockpiling in my checking account.  Saving for retirement?  Uh sure, that can be my savings account, but more likely I'll just need to work for the rest of my life just to get by.  Stocks?  Those are scary and only rich people buy them, right?

I don't expect schools to go crazy in depth with all of this, but why not even mention that there are different kinds of retirement accounts?  Not a word was said about IRAs, let alone Roth vs. traditional.  What about a pension or 401k?  Why not give a brief rundown of different types of accounts, and when they're relevant.  Why not explain that it's stupid to get a savings account that only give 0.05% APY?  I don't think that's too much material to handle.

And while you're at it, why not explain that picking individual stocks is really no different than gambling?  Or that mutual funds are not any better, except you're paying people to gamble for you?  But there are actually ways to invest in the stock market with relatively low risk, did you know?

What about a class period spent talking about credit cards and how to use them intelligently?  A day to discuss different types of student loans?

I've been trying to learn more about money and how to spend/save it responsibly in the past couple years, but this shouldn't be something you only start learning after you turn 22.  I'm still so uninformed about so many things, and each year I throw money around carelessly is a huge setback to my savings.  I spent years with that stupid 0.05% APY savings account and earned probably less than a dollar in interest total, yet I thought I was still ahead of the game because I at least had a savings account, and that's better than earning no interest in a checking account.

It would be fantastic if schools taught even a little bit about investments as part of the required curriculum.  But even if you're in my shoes, absolutely clueless about anything and everything money related, you can still do yourself a favor and learn about it independently.  Do your kids a favor, if/when you have them, and teach them about money.  I'm doing my best to learn, and I'll be talking more about my financial adventures in the future here.