June Wrap-up: I spent a lot edition July 3, 2009

June really was a busy month for me.  Work was pretty hectic, and I managed to spend quite a bit of money!

One big ticket item (or collection of items) was reserving flights and hotel rooms for Pi Reunion.  For you non-MIT people, it’s yet another example of our true geekiness:  we’re getting together ~3.14 years after graduation.  Yep, we’re nerds.  And as with years past, it’ll be held in Las Vegas (which my coworkers find funny, that the casinos are going to let a bunch of MIT people in…haven’t they seen “21“?)

Well, so there was a registration fee, which covered getting a group rate on the hotel room, and a few other events, including a show.  Then there was the hotel room itself.  And lastly, the flights…oh the flights.  My boyfriend and I were both hoping the other would take care of finding flights…which meant that I only got our tickets a week or so ago.  So, there were fewer options, and the flights were pricier.  Lesson learned.  I also discovered that, even if those travel websites are useful, it’s still quite the headache searching the different sites (like Travelocity, Expedia, Kayak, and Priceline), as well as the airline sites themselves to look for the best deal.  Finally found something I could live with through Priceline (thanks William Shatner!), and bought tickets.  Bought both our tickets at the same time to make things easier.  And already got Aaron to pay me his half of the flight costs!

Hopefully I wont spend too much more money gambling!

I also hit 10k miles on my odometer.  Last time I went for the recommended tuneup (5k miles), I was able to convince the salesman that it was worth it to give me that for free, after all the trouble I had getting my car to begin with.  No luck this time around.  So that was ~$100 gone.  Going to try to look for deals/coupons in the future to see if I can get the tuneups cheaper in the future.  The salesman did try to sell me a Prius.  Apparently 10k miles is just too much to put on one car!  I laughed at him…I’m assuming he was joking?

I got quite a few emails from Mint alerting me to the fact that I went over my spending limit in my budget for 4 different categories.  And my credit card sent me email alerts for expenses over $100 (I had set up this alert a while back).  So I knew I was getting pretty spendy.

I do know that there were really only a few big purchases, and I’m not planning on continuing to spend like this in the future.  The good news is that, somehow, I managed to squeak by this month and actually get into positive net worth territory.  Next month it will be even better, I’m sure.  I also realized that I’ve actually been tracking my networth (at NetworthIQ) for two whole years already!  And in that time, my networth has gone up ~$48k.  I’m pretty proud of that.  I’m not going to stop now.  It’s actually made me even more excited to eliminate my student loans and car loan.

Next goal:  eliminate a loan from my list (car, or one of the many student loans).  Thinking I should get rid of the car loan first, since it’s at a higher interest rate (if I can figure out how to do prepayment with the credit union my car loan is with).  In the meantime, also paying extra on those student loans!

How are you doing at staying within your budget, and meeting your goals?

Layoff Survival Guide: Collecting unemployment June 28, 2009

These days, a lot of people are getting laid off.  And one thing you should take care of is filing for unemployment benefits.  Eligibility requirements and compensation amounts vary from state to state, so you should go to the site for your state to find out if you’re eligible and how to apply.  You can find information for any state here (found via this Department of Labor page).

One thing that originally confused me was that in many states, they call it Unemployment Insurance.  I guess they call it that because companies pay into it and then when someone loses a job, they are able to collect money.  Still, this isn’t quite “free” money; you have to pay income taxes on it, just like any other income.  Luckily, another tax perk of the American Recovery and Reinvestment Act is that “the first $2,400 of unemployment benefits an individual receives in 2009 are tax free“.  That’s a pretty nice deal!

From experience, I know that filing a claim can be a bit of a hassle, especially since, in most cases, you either have to go to an Unemployment office or call…and these days with so many people filing, you’re in for a wait.  Luckily, once I filed, I was able to submit my weekly claims online.  For the weekly claims, I had to assert that I had indeed been looking for work.  I was supposed to keep track of my job search (which is a good idea anyway) in case they wanted proof, and I had to let them know that I was willing and able to work, and if I earned any wages that week (due to part time jobs).  I think you’re still allowed to earn wages, it just lowers the amount of unemployment benefits you receive for that week.  And once I got a job offer, I stopped filing claims.

So, go ahead and file!  When I first got laid off, I felt weird about collecting unemployment, but realized that, really, that’s what the money’s there for!  Your (former) employer has to pay into this fund, you might as well take advantage of it!

As usual, let me know if you have any other questions related to surviving unemployment, or if you have any insight on this topic.  I’m here to help!

Layoff Survival Guide: What’s this COBRA thing? June 26, 2009

Hopefully you found my last post in my newly minted Layoff Survival Guide useful.  And if not, here’s another chance for some helpful advice!

So, like I said last time, a really good friend of mine lost her job, and is now dealing with all the issues I had to deal with a little over a year ago.  So I figured I’d help her out, and maybe help others out along the way.  Behold, the power of blogging!

Her question for me was about COBRA.  What is it, what does she need to do, what are her options?

Let’s start with a simple definition.  COBRA stands for Consolidated Omnibus Budget Reconciliation Act.  Yeah, that doesn’t mean a lot to me either.   But when you’re handed a severance package with all sorts of information, one thing you’re told about is COBRA (and if you didn’t get any info for COBRA, I recommend you contact your former employer to find out what’s up).

Basically, COBRA entitles you to continue your health coverage that you received through your employer.  Except you will be paying the premium (rather than your former employer).  However, recent legislation from The American Recovery And Reinvestment Act allows for assistance in your insurance premiums through COBRA.  As stated on this Department of Labor page:

“Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months for those eligible for COBRA during the period beginning September 1, 2008 and ending December 31, 2009 due to an involuntary termination of employment that occurred during that period.”

There also is an income threshold that you need to be under in order to fully benefit for this program.  For more information, you can check out their Fact Sheet for COBRA Premium Reduction here.

If you don’t elect to continue your insurance from your previous job through COBRA, you still have options.  A friend forwarded me a link to a site that helps you pick out insurance options (in Massachusetts).  And the DOL has another good page telling you about how to attain health insurance.  You can search for a private insurance plan, or may be eligible for a government plan such as medicare.  Also, if you have a spouse with health insurance, you can get on his/her plan.  I’m not an expert on the different types of insurance, so you might have to do some searching on your own.  Also, there are apparently some tax implications with some health insurance premiums, that I’ll let you check out on your own (mostly because I’m not as familiar with these tax rules).

What did I do?  Well, luckily, my severance package included a month of health insurance coverage, so I was able to depend on that while figuring everything else out.  I ended up paying the hefty premiums for COBRA coverage, continuing the coverage I enjoyed while at my old job.  It may not have been the best decision, financially, but it was the “easy” thing to do.  I found it difficult to sort through all my alternative options for health insurance.

Why is it important to have continued health coverage?  There are a few reasons.  As I learned firsthand a month into unemployment, you never know when you might need insurance.  My boyfriend hurt himself mountain biking, and I drove him to the hospital.  Since he had health insurance, he wasn’t stuck with an enormous hospital bill.  Saving money by not paying for health insurance could end up losing you money if you end up requiring an expensive medical procedure.  Or you may have to decide if a procedure is financially worth it, even if it’s medically important.

Another reason you don’t want your insurance to lapse is because it might make it more difficult to prove that any condition you have down the road isn’t a preexisting condition.  I know that’s more of a worry/fear than an actual fact, so take that with a grain of salt.

So what do you need to do?  Decide whether or not you’re going to continue your insurance plan through COBRA (talk to your former employer/fill out the forms they gave you).

So, like I’ve said before, I’m not a legal expert or anything, so this is merely friendly advice.  But if you see any errors or omissions here, or have specific questions, let me know in the comments or via email.  And if you have other layoff-related questions, you can ping me with those as well!

Layoff Survival Guide: What to do with your 401(k) June 19, 2009

A good friend of mine recently got laid off.  And, since I went through this about a year ago, I’ve got plenty of advice.

I’ve decided to start a little series, the Layoff Survival Guide.  I’ll be answering questions that she has, and will be more than happy to answer any questions you have.  I’m not a professional financial adviser or career coach, but I’ve learned a lot about surviving a layoff, and the transitions and decisions that come with it.  Plus I might have some advice on finding a new job.  I already have a few posts for some of these topics (linked to in previous sentence), but I don’t mind focusing on a specific question or topic.

So, ask away!  I’ll try my best to find the information you are looking for!

One of the questions my friend sent me was:  What do I do with my 401(k)?

I realize that  plenty of people have posted about what to do with your 401(k) after you leave your job (either voluntarily or involuntarily).  A really good guest post by The Working Dollar at  Get Rich Slowly describing  your options can be found here.

Still, here’s my own view of your options:

Keep your money where it is.  This isn’t the option for everyone.  In fact, it depends on the rules of your company and the firm they run the 401(k) through.  There’s usually a certain amount of money you need to have in the account in order to keep it there.  If you’re happy with your portfolio there, and you are allowed to keep your money there, then you can go ahead and keep it around.  If you aren’t able to keep your money there, or you don’t like how your money is invested, or if they’ll start charging a fee or impose other rules you’re not comfortable with, then you might want to consider the other options.  The benefit to keeping it (if you can) would be that you wouldn’t have to “sell” your funds, and could hope to make back the losses from the crummy stock market performance.  When my boyfriend left his last job, he just kept all his investments at the old company, since he actually had really good investment options there, whereas I was not happy with my options after I got laid off, so I rolled my 401(k) over.

Roll over to an IRA (or Roth IRA).  If you can’t (or don’t want to) keep your money where it is, you can roll it over to an IRA.  Most investment companies (like Fidelity, Vanguard, or T. Rowe Price) (click those to go directly to their rollover sites) have an option to roll your money over from your 401(k) into an IRA.  The important thing to remember here is that you should check with both the organization that has your old 401(k) and the company that you want to roll over your money with, to see how you can move the money without incurring fees or taxes.  They’ll tell you what to do!  You can now also roll over your money into a Roth IRA, but will need to deal with the taxes there (pre-tax money to post-tax money).  The benefit of having an IRA is that you have more choices on what to do with your money.  It’s an investment vehicle, where you can buy all sorts of different investments…not just the 10 or so mutual funds that your company lists for you.  Another good post about IRAs (from Get Rich Slowly) can be found here.

You also have the option to Roll over your old 401(k) into a new employer sponsored plan.  I don’t know as much about this option, but it seems that it would require you to have your new job already.  You’d need to be able to keep your retirement savings somewhere (i.e. the old 401(k)) while you wait for your new plan to take effect.

And, finally, my least favorite option, Cash it out.  I don’t recommend this unless you have a really good reason to.  You’ll be hit with taxes all at once, and will likely have to face fees as well, quickly dwindling down the actual amount you will get.

What did I do?  Since I was not happy with my investments in my old 401(k), I decided to roll my money over to an IRA.  And since I already had a Roth IRA at Fidelity, I decided to open a rollover IRA there.  It was pretty darn easy, and they answered all the questions and concerns I had.  Plus they have a lot of investment options, many of which don’t require fees.  I’ve heard good things of lots of the other investment companies, so take a look around your options before committing to a specific company.

Vanguard also lays out the pros and cons of each option (as does Fidelity).  Like I said before, this information is everywhere.  But I just figured I’d lay it out again for anyone looking for some guidance.

Have any questions about what I wrote?  Suggestions?  Corrections?  I don’t claim to be a financial adviser or expert, so hopefully you’ll take what I’ve written and run with it (and if there are mistakes, I’ll be sure to edit it to reflect corrections you submit).

Also, what other questions do you have about the transition from employment to unemployment?  I’ll be answering them here!  Leave a comment or email me the question at graduatedlearning@gmail.com.

Brand loyalty happens to the best of us May 31, 2009

Last weekend, I realized I was running low on all sorts of things that a drug store would be good for.  Moisturizer, deodorant, sunscreen, nailpolish remover, etc.  I walked over to the nearest store, a CVS.  I went in and tried to figure out what I needed.  For the nail polish remover, I went with the CVS brand (and picked up one of those super cheap nail polishes, as I just want to have cute looking toes).  But when it came to the moisturizer, they didn’t have what I wanted.  Now, usually, I’m not that picky about products (at least, that was what I had assumed).  I had tried a certain brand of face lotion (and an accompanying face scrub) when I signed up for a BzzAgent campaign.  For this campaign, they sent full samples of the products, as well as coupons and info about the products.  I tried them and liked them.  At some point, I lost the moisturizer (I think I took it on a trip home and lost it), but I had really liked using it.  I’ll admit, I’m not very good at the BzzAgent word of mouth promotions, as I end up feeling weird telling people about products (or in this case, talk about the product long after the campaign is over).  But I didn’t think that the free trial would hook me.  But when I went to CVS, they didn’t have it.  And I figured I could just get something else, but the brand had already decided for me:  I knew it was good, and I had no way of knowing how the other products were.  I think I might have just gone ahead and bought something, but then I went to the deodorant aisle, and they didn’t have the brand I like there, either!  And after realizing I was 0 for 2 on the main products, and realizing that all I wanted was a store brand (i.e. cheapest) 30 SPF waterproof sunscreen (which was not readily available for some reason), I gave up on buying any of the products (well, I bought the cheapo nail polish remover and nail polish because it wasn’t going to matter where I bought it).

I walked back home, and debated driving to the grocery store.  I felt kind of silly wanting to get into my car to get a few items that I could have gotten at the store if I wasn’t so picky.  My boyfriend suggested I walk there, since it’s not far.  Which was the obvious thing to do, but I had been worried about how much time it would take (we had plans for later that day).  Anyway, I walked to the grocery store and found the deodorant, lotion, store brand sunscreen, and some toothpaste (I knew there was something else I was running low on).  And the toothpaste?  It was a brand name, and likely the one I had bought in the past.  Picked up a quarter of a watermelon (impulse buy) and bought everything for my walk home.

This really got me wondering…how did I become loyal to so many brands?  For the lotion, it was obviously because I had tried it and liked it.  However, I think many products gain my loyalty by being the cheapest.  If they’ve been the cheapest all along (like the Suave deodorant, unscented please!) I end up buying it because I know it’s a good deal.  Some products (like those for, um, women) I used to buy whatever was cheapest (but a brand name), and now I automatically buy that brand.  I’ll buy 2-in-one head & shoulders, either brand name or store bought, but I don’t bother with other types of shampoos/conditioners (unless I get enough scolding from friends who think I need to do more for my hair).  And for pain pills, I’ll buy the store brand, because I really only care about the active ingredients present.  But I’ll buy naproxen sodium (generic Aleve) over aspirin, acetaminophen (generic Tylenol) or ibuprofen (generic Advil or Motrin).  Again, I buy what works best, but this time I don’t care about what brand it is.

As a personal finance person, you’d think I would just buy whatever is the best value.  I think, for the most part, I do.  It seems that I get used to buying the same brand because it’s consistently the cheapest.  I think I am more willing to buy store brands for food items (or like medicine, where the active ingredient is the key factor), but for personal care/beauty, I tend to be a bit more picky, even if it’s irrational (but really, only for certain items).

Do you have a lot of brand loyalties?  Do you end up spending more because of it?  Or are you like me and (for the most part) have inadvertent brand loyalties based on their consistent value over other products?  What brands do you HAVE to have, and what are you willing to buy in the store brand? (which, sometimes, is made by the same company as the name brands, but that’s another topic for another time)

Credit Card Trickiness May 19, 2009

There’s been a bit of a hubub on the internets regarding the new changes to the Chase Freedom credit card.  The changes, which Chase claims are “benefits”, are really just them cutting back on how much cash-back you can get.  The “improvements” are now that your rewards points don’t expire (apparently they used to), the bonus categories for everyday spending are being eliminated, and being replaced by quarterly bonus categories (likely not the ones you spend the most in), and they are eliminating the bonus $50 that you get when you redeem $200.  Those all sound like downgrades to me.

Some of those changes make the card seem more like the Discover cards, which have revolving bonus categories, though these bonus categories provide a 5% cashback rather than the 3% from Chase.  Then again, many places don’t accept Discover.  So I don’t know if it would be in my best interest to get a Discover card.

In general, I’m pretty much convinced I don’t need any more credit cards.  I got a few after I graduated college to start building my credit.  I got an offer or two for the Chase Freedom card, and accepted it (both for the better rewards program and a nice $100 bonus).  I have a few store credit cards as well. (I know, everyone says they’re the worst thing to have, but I have them for the two stores I shop the most in)

I really would like to cancel one of my earlier cards, which I’m guessing I could do without hurting my credit too much (since both of my first cards were started around the same time).    I just want to eliminate unused cards, but keep my history.

The other thing I’ve thought about is how the cashback from different credit cards probably doesn’t matter that much.  I’ve read about a lot of different people who try very hard to maximize their cashback.  They’ve got multiple cards that they use for different categories.  I suppose that I could start using a card that gets me higher cashback for my most common purchases (groceries, gas, restaurants).

In the end though, does it really matter?  I still pay some bills by online transfer (rather than by credit card), so I’m not chasing after every dollar of cashback money.  Looking back, I don’t spend so much on credit.  If we want to get crazy, we could pretend that I spend $6000 on my credit card every year.  I think that number is way too high, but that’s going on a $500/month assumption.  With a 5% cashback, I’d get $300 back.  While that’s not chump change, it’s not a ton of money.  So going through the hassle of figuring out which card to use at what merchants really doesn’t seem worth it.

I’ll still continue to use credit cards for most of my expenses for the minute amount of cashback I get, and to help me track my expenses.  I know that sometimes I’ll spend more having cash than credit (special thanks to my company dining program now accepting credit cards), but for the most part, my usual purchases aren’t that high (groceries) or are really out of my control, spendingwise (gas…I’m stuck putting gas in my car at whatever price is out there).  I think I’m going to go back to paying cash for lunch at work (or get better at bringing lunch), since I think I’ll be more likely to spend less seeing the money actually leaving my wallet.

How many credit cards do you have?  Do you strive to earn as many points/miles/dollars as possible?  Or do you just see the points etc. as a nice bonus for using a card you’d use anyway?  Do you find yourself spending more when you’re using your credit card?

I want to buy a house…maybe May 6, 2009

About a month ago, I started scrolling through listings at realtor.com to get an idea of what is out there:  What can I get?  How much will I have to spend?  I started fantasizing about owning my own place.  Took out a few books on home buying from the library.  I even went to a seminar hosted by work for first-time home-buyers, where I got a better idea of what the home buying process entails.

I’m hearing a lot these days about why now is the “perfect time to buy a house.”  Interest rates are low, there’s the first time home buyer tax incentive, and house prices have dropped significantly.  We’re also reminded that you claim points and paid interest on your taxes, likely providing yet another tax incentive.  Sounds like nothing should hold me back, right?

Of course we know it’s not that simple.  Now is the time to buy IF you were planning on buying now.  I hadn’t really planned to buy anything until further down the road of my financial, personal, and professional life.  I mentioned a while back that my financial priorities are first to eliminate my student loans and car debt prior to getting involved in a mortgage.  My student loan rates have dropped pretty low, so a mortgage would probably be at a higher interest rate.  Plus I’d like to have more money for a down payment, which is counter to my desire to use extra savings to pay down student loan debt.  And I’m not super keen on getting financially locked into a place (it’s a relatively non-liquid asset).  I also figured I wouldn’t buy a place until I got married.  But more and more people are buying for themselves, or as unmarried couples.  And I don’t know if I’d have to move for my job.  And of course, we don’t know how much more house prices might drop.

I also know that right now, the place I could afford would be small…a “starter home”.  And I know I have an image in my head of what my future home should look like.  How easy would it be to sell the starter home to buy a different place?  It’s not as easy as it used to be…

Anyway, in the meantime, we’re going to keep looking at listings casually, and I’m going to default to saving/paying off debt for a while.  I’ll keep reading books, and check out websites with helpful information.

What’s your plan?  What do you think I should do?  Is now the time to buy?  Or should I wait to buy a bigger and better place in the future?  And where else should we be looking for information?

Fiddling with financial websites April 28, 2009

I was talking on the phone the other day with my mom, and she mentioned that she heard them talking about Mint on NPR that morning.  There’s a link from that piece to a post noting many different money management websites.  My mom joked, “I wonder if they visited your blog when doing research for the piece!”  My mom’s awesome.

Anyway, I’ve mentioned before that I use a bunch of different ways of tracking my money (and lack thereof!)  Recently, I’ve noticed that my ING Direct accounts are not updating properly in Mint.  This is in addition to the past 7 months of my ING accounts not getting updated on Bank of America’s My Portfolio.  I started complaining into the abyss on twitter, and then figured I’d complain @INGDirect.  They told me to email them, so I sent them my complaint.  Here’s their response:

Hello Stephanie,

I understand that you recently had an issue trying to connect to our website using mint.com and bank of America’s portfolio service. This service is commonly referred to as an account aggregator.  While this service may have worked in the past, most users are finding that their aggregator does not work with our New Sign In Process.

The security of your information is very important to us.  Once your personal information leaves ING DIRECT, we have no control over your information or how it is used by third parties.  Because we have no way of monitoring how account aggregators address security, privacy or the use of cookies we are unable to support the use of these services.

To best protect your personal information and your funds, we recommend that you do not share your personal information (including your Customer Number and PIN) with any third party.

If you have any further questions, please feel free to contact us.

Thank you!

Heather
ING DIRECT – USA
Member FDIC
Equal Housing Lender

So, from the looks of it, there isn’t anything I can do.  I’ve tried re-entering all my passwords, but to no avail.  The odd part is that my boyfriend isn’t having any problems with the data import.  I just want to fix it!

Are you having trouble with any of your financial aggregators?

A no-spend weekend! April 27, 2009

I’m excited to report I had a no-spend weekend!  I guess it helps that I was pretty busy this weekend with assorted barbecues, mini-reunions, and get-togethers.

Spent Saturday with current students and alums from my boyfriend’s fraternity for their alumni weekend.  So that included a cookout, softball game, and fancy dinner.

Sunday headed to campus for church, visited with my sister, and picked up some lunch at the noontime barbecue.  Headed back home for some relaxing/reading/napping, and then finished up the day with a mini-reunion for a class I was in freshman year.  Got dinner and cupcakes there.

So, I didn’t buy anything, including food.  Oh free food, I will never tire of you.

Slacking on tracking April 5, 2009

One of the best ways to get a real idea of where your money is going is to track every expense.  Most financial gurus (and personal finance bloggers) will tell you that.  And that’s what I’ve been doing since August of 2007.  Or at least, I’ve been trying to track everything since then.  I’ve mentioned before that I have quite a few ways I keep track of my money.

I’ve noticed that I’ve been slacking off when it comes to keeping track of the things that I usually track.  With walletproof, I’ve only been actively adding my dining out expenses (including my lunch spending in the cafeteria).  There are repeated expenses and income that I’ve allowed to continue on the site, but I haven’t readjusted them to coincide with the correct days.  And I mentioned before that I started using a program called NutriSum, where you track your weight, eating habits, and exercise.  At the beginning, I was logging my progress every day.  Now I log the information when I remember to, and sometimes go back days to fill in the missing numbers.

So what does this mean?  I think for me, tracking everything gave me a sense of control; I knew where everything went, and I could watch as I reached my budgeted limit for the different spending categories.  But now that I have an idea of where things are going (especially with the help of my other tracking websites like Mint), and can set my limits there.  I think I have only been tracking dining expenses because I use credit cards or online bill pay for most purchases, which makes everything easy to track online.  The only thing I spend cash on (usually) is food at the cafeteria.  Going to those websites every once in a while to confirm that I am staying within my limits (and as a bonus, I can monitor any suspicious activity with any of my accounts) seems to get the job done.

I never have been a big spender.  I do occasionally have a spendy month when I buy something that’s long-term (updated wardrobe, new glasses, computer, car) or for birthdays and Christmas (I like buying things for my family).  But those occasional purchases are budgeted in, and wont happen too often.

As for the health tracking, I think that it got me started on healthier habits, and made me aware of what I should be doing.  I’ve now started eating breakfast every day (mmmm oatmeal!), been drinking more water, and avoiding snacks after dinner.  I’m not as good with the whole grains and fruits/veggies goal, but I do remain aware of what I’m putting on my plate, both as I go through the grocery store, and when I pick my meals at the cafeteria.  And I’ve been trying to stick to my exercise regimen (2-3 times per week to start), though I sometimes do 2 instead of 3 days.  But I know what I need to do, and can remind myself that I am working towards a healthier life.

Do you track every penny?  Should I be?