Sold my textbooks back to the book store January 27, 2008

So, I graduated from MIT back in 2006. My sister is a current student there, so I just gave her all my books (so she can use them/sell them to others). There’s a few sites to buy/sell used books specifically at MIT, in addition to the usual Amazon.com and half.com, such as…bookx (MIT Personal Certificate required), MIT 412, CampusBeacon, or emailing around your dorms (which is highly frowned upon). At any rate, no one ever bought any of the books from her. So, finally, we went in and sold my books back. All I can say is, I should have sold them back a long time ago. I held on to so many books with the assumption that I’d use them again…and that never happened.

I took the tradeoff between getting more money for the books and the hassle of posting the books to amazon or something and finding storage space for the books and just sold them back to the school bookstore. The COOP is notorious for selling books at high prices and buying back books at little to no money. They also don’t buy back old editions. And since I sat on selling books for so long. I got a grand total of…$50.75 for perhaps 10-15 books. Which means I barely got any money back.

But it’s something…and is a reminder to me that I should stop procrastinating. I still have a few books left over that I may try to sell online or just donate…maybe get a tax benefit for that?

That’s pretty much it financially right now. I am thinking about moving money from my emergency fund to pay down my student loans…but again the procrastination is hitting me. Gotta get better at this!

ING Lowers their rates…again! January 23, 2008

I can’t say that I wasn’t surprised. After the Fed lowered the interest rates 3/4 of a point, I knew my rates would shrink. Their checking account is down to 2.50% APY for up to for accounts with less than $5,000, and their savings account is down to 3.65% APY. This makes me all the more interested in paying off my student loans. I mentioned before that the interest rate for the bulk of my student loans had dropped, thanks to the Fed lowering rates last year. Sadly, I’ll be waiting a few more months before my loan rates are lowered (if the Fed rates don’t rise). In the meantime, paying off loans that are more than my yearly gross income (Darn you MIT!), most of which have an interest rate of 7.5% is going to net me more money than saving money at about half that rate. I already have a decent emergency fund, so I feel that I can draw some money from that and put a decent chunk towards the student loans. I do know that there are tax factors relating to the two options…I think that I’ll have to still pay taxes on the money I earn on interest through ING, but I also get some sort of tax benefit for the interest I pay on my student loans. I think for the whole “pay yourself first” idea, I’ll continue to put some money away every month, but I’ll draw some money from the “emergency fund” to pay a large amount towards my loans.

Though ING has lowered their rates, I’d still urge you to join up with them…for the referral bonus (that both you and I would get!). A guaranteed 10% return ($25 for $250) isn’t half bad, right? If you need a referral for either the electric orange checking account or the savings account, let me know (leave a comment; there’s a place to enter your email address, and only I can see it), or email me! Wow, this seems a bit forward and brazen to just tell you to do this (since I get a nice $10 referral bonus when you sign up and put at least $250 in). I’ve never really been a rate chaser when it comes to savings accounts…if you are, I don’t know if ING is right for you. The rates could change again!

Something I read about the Fed interest rate decrease is that they hope that by lowering the rates, consumers will be more willing to spend (rather than save). I guess that’s happening in a way for me…I’m spending the money on student loan payments instead of saving it in a savings account. But that made me wonder: are all these people you read about in personal finance blogs (me included, I suppose) partially to blame? Everyone is urged to have an emergency fund, be more frugal, spend less…but the economy “needs” us to spend to keep it going. I know that there’s also all the people NOT saving, because they’re part of the whole “subprime market meltdown” that is being blamed. Who knows…That was just something I was thinking about…

(some interesting articles that I’ve found on Slate.com (an online news magazine) relating to the Fed rate decreases…the one listed above: Bernanke’s Surprise, as well as How will the latests interest-rate cut affect me?, and How do you inject money into the economy?.)

Broken phones and mail-in rebates January 14, 2008

This morning I woke up to see the snow coming down pretty hard. So I went to my phone to see if maybe my supervisor had called to say work was canceled. No such luck. However, a piece of my phone hinge came off…and then the top disconnected from the bottom. So, on the day of a big snow storm, I’m without a phone.

After work, I went to the AT&T store (I’m on a family plan with my parents and sister). Luckily, I was “up for” an upgrade, so I wouldn’t have to pay for any extra plans or anything. I was going to get the free phone (free phone after mail in rebate), but the guy at the counter said I could get the “extras” for only $20 more after mail in rebate. That’s a carrying case (which I don’t really need), a memory card (I don’t use data on my phone) and a Bluetooth wireless headseat. I don’t have a car, so I don’t really have a need for Bluetooth. But what did I do? Go for the extras. I know I’m not supposed to, but I think I figured that if this is the phone I’m using for the next 2 years, maybe I will have a car, and so it would be nice to have a Bluetooth earpiece. I also figured that if I want to do any multitasking (for example cooking or cleaning around the house), it would be great to have both hands free and not have to cradle the phone to my ear with my shoulder. I think I decided that $20 isn’t that much money overall, and buying any of the pieces later would have cost me more.

Sad excuse, I know. I kept telling the guy that he’s trying to trick me. I know that you’re supposed to up-sell products with assorted add-ons. My congratulations to him for getting me to buy it.

Oh, and yes, I’m on a family plan still. I don’t actually pay for my cell phone service because of the plan setup. The deal was that I don’t pay my portion of the bill, but I have to pay for travel between Boston and home. I suppose that this is probably the more expensive option for me, but I think it’s fine right now.

I am only a little bit worried that the rebates that I’ve got to mail in are actually going to work. I figure I’ll make some photocopies of everything before I send it in. I’ll post when/if I get the rebates.

A strange day indeed January 13, 2008

This past Friday I had more people visiting my blog than I usually have in a whole month.  It all started because FreeMoneyFinance posted a link to my post about Roth IRAs in a list of “Star Money Articles“.  Seems that many people followed that link to my blog.  And because so many people had visited my particular post, it became popular enough of wordpress posts that it was on the WordPress homepage under Business News (it’s not there anymore).

I feel like I should thank the writer of FreeMoneyFinance for mentioning me.  Isn’t that what bloggers do?  But thanks especially to those who commented.  I was thinking some about putting all the money in at once…and also wondering if I should put more into my 401(k).  I agree that paying off debt is a surefire way to have good returns in the long run (since you’ll pay less on interest as you pay down your debts).  I think I’m a bit uncomfortable with upping my 401(k) contributions since I don’t want to have too little money available (I’m a bit of a worst-case-scenario type of person), and I figure the more money I have now, the more I can pay off my student loans.

I appreciate all your comments, and hopefully others benefited from the advice as well.  Keep the comments coming; the more we all know, the better we can get at this!

(or as they said on the most recent episode of Monk:  The more you know, the less you don’t know!)

Going out for Ethiopian food January 13, 2008

My boyfriend and I have restarted a tradition of going out to eat once a week. It’s fun to go out on dates, what can I say? We’d seen an Ethiopian restaurant and figured we should check it out.

We headed over to Addis Red Sea near Porter Square. The website is actually for another location, but the menu listed is pretty much the same, so I think the site applies for both locations.

We shared the Addis Red Sea Special Combo, which had Doro Wot, Doro Alcha, Lega Tibs, Zenge (Exotic Beef Stew), House Salad, and Gomen Wot (collard greens). They were all served on top of inerja. The links point to the menu pages that describe the different dishes (check out this wikibook or the menu for more information about what we had). We also ordered the lentil sambusa for an appetizer and shared a glass of Axum, Ethiopian honey wine.

The food was very tasty. Some flavors were a bit too spicy for me (I’m a bit weak when it comes to spice!) Total for the dinner for 2 plus appetizer and wine came out to $49. It was my turn to pay (we trade off for dinners out). This actually helped me save money and eat healthily the rest of the week because I didn’t want to spend any more money! So, sometimes dining out can save you money (if guilt works for you!)

My student loan interest rate dropped! Hooray! January 9, 2008

I had read a post over at FiLife.com about why student loan interest rates aren’t dropping nearly as quickly or as often as the savings account interest rates are dropping. They said that many student loan companies have set their contracts to change variable rates at certain times and based on certain values and averages. For the company I’m borrowing from, they reset their interest rates every quarter. They’ve lowered my interest rate from 8.25% to 7.5%. I was worried that they had taken away my .25% rate reduction that they had given me for automatic deductions. I called them up and they said that they did. So, I guess that’s that.

So, check out your loans! Your rates might have been lowered!

(Yes, I know that since it’s based on variable rates that it could also go up. But for as long as I’ve been actively paying my loans (since I graduated) they’ve been at a stupidly high 8.25%. So things feel better now)

One thing to note is that if you are automatically having money deducted from your bank account, they might start taking less out…because with less interest charged, they wouldn’t get as much money from you, so by lowering your monthly payment, they’ll have you paying slower at the lower interest rate. So, keep that in mind if you’re trying to pay down your loans faster than they want you to (like I want to do).

How often should I contribute to my Roth IRA? January 4, 2008

I came across an article that said that you could easily fund your IRA at $10.64 per day (assuming you include all year plus up to the following year’s tax day) up to the new limit of $5000 a year. The idea of the article was that it really isn’t that much money per day to fully fund an IRA (ooh, that rhymes!). But it got me thinking… how often should you actually be buying funds in your Roth (or any other account, for that matter)? I currently transfer money and purchase into a mutual fund through my Roth IRA once a month. Is that too often? Not often enough? I figured that having more purchases would help me in terms of dollar cost averaging. Though, if you see the criticisms on wikipedia or this article, it doesn’t seem like a necessity, and may actually hurt you. They say that it’s more of a marketing gimmick, so that you’ll be more willing to spend the same amount of money with less of a fear of losing money.

All this being said, I don’t mind this so-called gimmick. I hate losing money! It makes me feel more comfortable investing in retirement accounts, knowing that I’m doing something positive for my future, instead of using that money for other things (either necessary purchases, more fun purchases, or paying off student loans). So, I wont buy too often, because it seems like after a while it’s a bit useless to buy so often. So, for now, I think I’ll stick to adding every month. I could try adding all my money to the core money market account and eventually purchase funds.

I guess there are a lot of options. I think I’ve discovered that I’m not good with change when it comes to money matters. I should change my monthly amount towards the IRA to reflect the new limits, but I haven’t. I would end up just adding some in at the end of the year, like I did this past year (because I started funding it later in the year and wasn’t quite sure what I was doing yet). And I need to purchase funds with all that end of the year money that just ended up in my core account.

I think I’ll stick with the monthly contributions, so I can feel safer about investing. And I think I like having money more accessible in a checking or savings account longer than having it in a Roth IRA (though I know you can withdraw the contributions without penalty). I just need to up my contributions to the new monthly amount, and purchase funds with the money in the core account.

This is a much longer post than I originally intended to write, but hopefully you all will have some input or ideas of your own!

[Edit:  For 2008, the contribution limits are $5,000 for most people, $6,000 if you're 50 years old or older.  You still have time to max out your 2007 IRA to the $4,000 max ($5,000 over 50) until Tax Day, April 15, 2008]

[Edit on 1/24/09:  For 2009, limits remain the same]