Archive for the ‘Cash and the Kitchen’ Category

What To Do

May 19, 2011

All this financial introspection leads me up to a conundrum.  I have a small lump of money from a matured CD, and I want to make the most of it.  The most practical, least joyful thing to do would be to pay off some of my debt.  The Bali trip sunk me further than I like to be, but it so made life worth living.  Having this debt makes me uncomfortable, yet it is not unmanageable, as I have killed off larger amounts with my financial diet.  This lump, although small, is money that I forgot I had, it grew a little, and I want it to grow more for the future.

I could leave it in my savings account to build up that 9 months of expenses with a wee bit of interest, but that’s not very satisfying either.  I want return without much risk, which just isn’t possible in the era of near zero interest.

The most sensible thing to do would be to put it in my 401k so that it can grow tax free.  When I talked to the brokerage firm, they told me that I couldn’t deposit a chunk of money into the account, but that I could adjust my contribution for the duration until it reached the sum that I wanted to deposit, and then adjust back.  And maybe, if I was used to it, I will be able to afford to keep the adjustment at that higher rate.  An interesting idea that changed my notion of money – that it’s fluid, not just a solid lump sum.  Intriguing and painless, but somehow also unsatisfying, as I was interested in something new.

I thought of putting it into a long forgotten stagnating Roth, which could use a jumpstart.  I met with the financial advisor of my account who wasn’t that interested unless I moved all of my scattered accounts to him to make it worth his while.  He did tell me that the funds that I had in my Roth could be put to better us in other funds, and that I would have to choose it – yet another decision to be made.  I left more confused than ever.

My one crazy idea was to buy stock in rare earth minerals.  A total gamble, I am fascinated by them as they are in so many products from computers to green tech to military tech.  It’s a limited resource that seems as un-PC as oil and coal.  Risky, and a little sexy, like a new pair of sparkly shoes.

Speaking with a friend about my dilemma, she didn’t think I needed any more professional or non-professional advice.  No one knows my money and money tolerance than I do.  It’s a matter of putting it into action, which is the hardest part.

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My Money Scripts

May 12, 2011

Reading the NY Times article about “Money Beliefs and Financial Behaviors:  Development of the Klotz Money Script Inventory”, a new study on money attitude and habits, I am starting to think that I have financial schizophrenia.  In the study, there are four categories of “money scripts” – money avoidance, money worship, money status, and money vigilance.  Money avoidance is distancing oneself from money, essentially a state of denial.  Money vigilance is a reluctance to spend money at the expense of enjoying it.  The other two scripts – money worship and money status – tie in high self worth to wealth.  Worship is distinguished by overspending to impress others; status by anxiety over net worth.

With my financial bulimia, I feel like I am both money avoidance and money vigilance.  Monday through Friday, I practice money vigilance starting with paying my bills and getting money out for the week which I spend sparingly.  Over the weekend, I’m in money avoidance spending to my heart’s content, or until the cash runs out.  The binge and the purge, or starvation and gluttony.  How can I run both scripts?  Or have I always been avoider, which has led me to being vigilant?  The purpose of the study is to help people deal with financial change, which I am trying to do, albeit, oddly.

My Financial Eating Disorder

May 5, 2011

I have been on my financial diet for 2 1/2 years and I’m beginning to feel that I have the equivalent to an eating disorder of the pocketbook.  In an effort to pay down my credit card debt and to sustain growth for the future, both short and long term, I have put myself on a $150 cash budget every week, and socking away $75 into savings every week.  For the most part it works pretty well.  I have been able to pay a good majority of my debt and save comfortably.  I have to be careful with my money, which usually means one or two meals out a week ( a social life buzzkill), but great vacations once or twice a year.

My disorder comes as a binge and purge.  I save all week long, calculating down to less than $20 a day, if I can, so that I can spend with reckless abandon at the end of the week.  Flea market, farmer’s market, if I want flowers, foccacia, and donuts, I’m free to spend.  Like, that’s weird, right?  Or maybe I’m a very advanced case of the marshmallow test – staving off impulse for the bigger pay off.  Whichever it is, I’m feeling a bit nuts over the whole thing.

Recently, I did Ron Leiber’s 31 Steps to a Financial Tuneup in an attempt to re-evaluate my diet, to assuage my financial dysmorphia.  I am doing everything right, I just need to squeeze more juice out of the lemon, as bitter and sour as it is.  Let’s face it, I like to spend, that’s how I got in trouble in the first place.  But if I want to move forward, go on exotic vacations, and be able to retire, I have to stick to the diet, even though it makes me unhappy at times.  Like the principles of weight loss – burn more calories than you take in – financial gain is simple, but not easy – save more, spend less.

Two Down, One to Go

October 29, 2009

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With my stringent budget, I’ve killed off the balance of another credit, leaving one big card to go.  It’s taken five months since the first card died, and it’ll take many more to rid myself of the last card, at least another year.  I’m relieved, and quite proud of myself, but I’m starting to feel antsy.  I want to spend, spend, spend!  But isn’t that how I got here in the first place?

I’ve recalculated my budget to see if there was any wiggle room, barely.  Given the guidelines of the 60% plan, which has been working for me this year, I should only spend $150 a week (in cash!), save $75 for unexpected expenses, and use everything else for expenses and debt.  I should set aside 10% in a Roth for the long term expenses – a point further emphasized by Suze Orman (yes, I read her book in a weekend) – but it’s more important to pay off the last card as quickly as possible.  At most, I could probably spare $25/week, which I’d put in the unexpected expenses pot for vacations and the upcoming holidays.   Here’s to a little more fun in my life, and a lot less debt!  I’m going on vacation!

Budget Bummer

June 17, 2009

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The withdrawals have finally hit me.  I’ve been really good with the budget and breaking my addiction to spending, but I’m having a rough patch right now.  All I want to do is spend money.  I want to buy crap at the flea market.  I want to buy crap at Ikea.  I want to buy cacti at the Farmer’s Market.  But I can’t because I’m on a budget and $150 a week is just not enough.  Call it a moment of weakness.  I have to remind myself that buying crap is what got me into trouble to begin with.  So I shall go crapless for now.

Maybe I need to devise a new game to distract myself from spending.  Think of my $150 a week as a $20 a day with a $10 bonus cushion.  Better to obsess over numbers than things?

Dead: One Credit Card

May 27, 2009

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The budget works.  I’ve been on the budget for ten months and I’ve finally killed off one credit card.  I’m ecstatic.  I feel like I’ve gone from a size 22 to a size 4, the weight of my financial burden reduced by a diet of good spending habits and restraint.

My only disappointment is seeing the total difference in balances from August to May, about $5000.  That doesn’t seem like a lot for all the penny pinching that I’ve done.  The sad reality is that much of that money is finance charges.  Stupid tax that gets tagged on every month, keeping the balances up, because there certainly aren’t any new purchases.  In my elation, I briefly considered easing up on the debt in order to have more of a weekly allowance, but I realize that the sooner I pay off the balances, the less stupid tax I’ll have to pay.  The payments will also go much faster with the dwindling balances.  I should be able to kill off another card by the end of the summer, leaving one to die a slow death by 2010.

A Pot of Gold

March 17, 2009

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As much as I’ve enjoyed the challenges of $25 a week on food, and detailing every little thing that I spend my money on – both worthwhile distractions and valuable lessons – what has made the most difference in my finances has been the big changes.  Not having to pay for health insurance has saved me $500 a month, a truly obscene yet necessary expense.  Re-financing my apartment is going to save me another $200.  It’s the pots of gold, not the penny pinching, that really mattered.

However, these big changes don’t come along often, and awareness of one’s finances is ever more important in this economy.  Being on my budget has really kept me on the straight and narrow.  For the first time in years, I can say that I can afford my lifestyle.  I don’t use credit cards unless it’s the only way to pay, i.e. plane tickets.  My weekly cash “allowance” serves me well, although it’s either feast or famine at the end of the week.  It all feels responsible and sane.  Honest and in the present.  Sober.

Stimulating the economy $150 at a time

February 12, 2009

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 To get us out of our economic crisis, I know that as a good American I should SPEND SPEND SPEND.  I did a lot of that pre-crisis, which set off my own financial crisis.  With my current fiscally responsible budget, I spend every last cent of my allowance without guilt, and I try to be a responsible consumer.  Who’s economy do I want to stimulate?  Who do I want to keep in business?

Met with the question on Saturday to buy soup ingredients, I shopped at the Farmer’s Market and the local Korean deli, not Pathmark.  More like emptying my pockets, a handful of vegetables and a fruit was $9.  I mean, really?  For 3 carrots, celery, a leek, 2 onions, ginger and an apple?  I’m stunned.

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This week’s soup was Tom Valenti’s Roasted Carrot and Ginger Soup.  To save money, I made my own vegetable stock, while I roasted the carrots – sorry mega food processing company for not buying your manufactured carton of stock.  For all the steps involved and its seductive title, the soup was good, but not terribly distinctive.  Rich and velvety with a spicy kick from the ginger (or my over-zealous peppering of the stock and carrots), it wasn’t as sweet as expected, I wanted brighter flavors.  I’m still looking for the carrot ginger soup of my dreams, and while tasty, this isn’t quite it.

The Time For Giving

December 9, 2008

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I’m a terrible gift giver.  Too little, too late is often how it goes, as it is something that I’m rushed into or obligated to do.  If it’s the thought that counts, not enough goes into my gifts.  Bah humbug.

Although my economic crisis is fairly manageable and I’ve saved forward, I don’t want to get out of control.  This year, I’m putting my time, energy, and thoughts into making gifts.  When it comes down to it, my new sisterhood of co-workers need presents.  My friends are used to the erratic holiday gifts, maybe even relieved on the occasions when they don’t get them.  Fairly new co-workers are not, and I have to join in on the holiday cheer.

Cookies are the most logical, most yummy option, but I still don’t have an oven.  I’m thinking of an infused vodka, some spicy nuts, and maybe something else sweet that doesn’t require an oven like rice krispie treats, bourbon balls, or peanut brittle.  I want to be able to make everything ahead of time, leaving less than two weeks to shop and make.  The Littlest Kitchen becomes Santa’s Workshop.

It’s Working

November 18, 2008

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There is finally a noticeable difference in my credit card balances, the budget is working.  A slow and steady change, as much as I yearn to see dramatic effect, I’m quite pleased.  Increasing my weekly fun money to $150 has improved my life too.  I don’t have to keep track of every penny (although I clearly enjoy doing so), I can feel freer socially, and I can afford to eat more virtuously (back to the farmer’s market).  I still have to retain some discipline – I haven’t been to the movies since July, nor can I indulge in the Comme Des Garcons at H & M.  But it’s worth it to see shrinking bills and enjoy my vacation without worry.  The budget works.