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Commuting Costs Savings Bonanza

I'm so glad that I can walk to work now. DC's Metro system is upping their fares. For those of you who don't know, Metro's fares are based on your length of trip. So if you're only traveling one or two stops, your trip will be significantly cheaper than someone traveling from the suburbs who is on the metro for 10 stops.

When I first moved to DC, I spent $4.20 per day on the metro (seven stops), plus an additional $20 per month for a bus ticket to take me to the metro. All told, my commuting costs were about $110.

Then I moved to a new apartment, eliminating the need for a bus (savings of $20), and reducing my round trip metro fare from $4.20 per day to $3.00 per day (5 stops). Total monthly commuting costs were about $65.

Then my company relocated to a new office only a few blocks away (yes, when I moved, I knew where the company's new offices were going to be, so I planned accordingly). Now, my commuting costs are zilch, plus I get the added benefit of some mandatory exercise!

Given this metro fare hike, if I still lived in my original apartment, I'd be paying a roundtrip fare of $5.10, plus the bus fare! That would be almost $130 per month. If my office had not relocated, and I was commuting to my old offices, my fare would have increased from $3.00 round trip to $3.70, or an average monthly cost of $75.

Those "incremental" fare increases sure do add up!

Although my new apartment rent is $25 more per month than my old one (and I have to pay electric, which I did not in my first apartment, running about $30 per month), those costs are more than offset by my commuting savings.

What do you all pay to commute?

My first Roth!

I opened a Roth IRA last month! After always reading about these on other blogs, I figured I should take the plunge. Retirement savings is about the only savings I'm truly responsible about, contributing 6% of my paycheck to my 401k, and getting the full 50% match (up to 3% of my income). My contributions actually used to be at 10%, but I've reduced it to beef up my take home pay and tackle my debt some more.

Well, I initially had a Roth IRA as a "savings goal," and was trying to save up $3000, which is about the minimum starting balance for a Roth IRA at most brokerages. Well, then I started reading that some brokerage firms waive that minimum starting investment if you agree to invest a minimum amount each month. Vanguard had a reasonable minimum monthly investment was $50, but that was only if you could purchase their STAR fund for a minimum of $1000. So I opted to go with T. Rowe Price. Their minimum investment per month is $50, and although they charge a $10 per year fee until your Roth IRA reaches $5000, to me it was the reasonable choice and truly did not require a minimum starting balance.

It was easy peasy! In fact, the most time consuming part was calling my parents to ask them for the SSN so that I could list them as my beneficiaries.

I'm 26, and I selected the Retirement 2040 fund. Since I don't have much (if any) knowledge about investing, this was a good enough choice for me. I just entered in my target retirement age and this Fund (hopefully) does all the work for me. Right now, more than 90% of the fund sits in stocks, since I am younger and can afford to take on more risk.

I know I probably won't be able to afford to max out my Roth IRA for at least the next few years, but I'm still glad that I'm socking some of it away.

desperate times call for desperate measures

I cannot get my "dining out" spending down. Every month, I'm spending an average of $300 going out to eat, mostly lunchtime meals at work. This is in addition to a unreasonably high grocery budget for a single girl. How do I get burned on both my grocery AND dining out budget? Well, I decide that I'm going to cook food, so I buy the groceries, and maybe actually cook a meal or two and eat the leftovers for the week, but usually when I bring it as my lunch to work, I don't feel like eating it and just go grab a sandwich or some fast food at one of the MANY places around my office to eat. Bad for the wallet, bad for the waistline.

Well, this morning I was on my way out my apartment door to work, and I forgot my wallet, so I went back in to grab it. Then as I was walking to work (yes, work is about a 10-12 minute walk for me), I was thinking that I should have left my wallet at home! Let's think about it. What do I really need my wallet for? If there was ever an emergency while I was at work that required some money, all I'd need to do is run home and get my wallet. However, my apartment is just far enough away that I won't want to walk all the way home to get my wallet just so that I can go grab some tacos from Chipotle. I mean, if there was ever an emergency or instance that required me to have cash or a credit card in less than ten minutes, then I would probably have bigger concerns! Plus, if I ever had an unexpected work-related expense, like having to take a taxi to a last-minute meeting, I can just ask for some petty cash.

This wouldn't have to be a long-term solution, just long enough for me to break the habit. I have found that sometimes I go and get something to eat even when I'm not hungry, but just bored with what I'm doing at work. These are some of the conversations I've had with myself

• Ugh, I can't even think straight I've been working on this for so long. I'm going to go grab some ice cream from Cold Stone ($6.00)
• Man, I should've eaten some breakfast this morning. I'll go grab a bagel and hot chocolate from Panera ($4.50)
  
• I'm not really in the mood for that chicken that I brought to work today, Quizno's sounds MUCH better ($7.00)
  
• I have a sweet tooth, I'm going to go grab a cookie from Potbelly's ($1.05)
  

As you can see, this all adds up. It wreaks havoc on my budget, and I have the numbers to prove it to myself, yet I still can't break the habit. I think I might start leaving my wallet at home and just bringing my driver's license.

Thoughts?

some upcoming indulgences

Well, it's Christmas time, and just like every time this year, I have a nice fat bonus burning a hole in my pocket ($2100, $3100, and $3600 in 2005, 2006, and 2007, respectively). I can never quite understand where all this money goes by January (well, about 40% goes to taxes), but this year it'll probably be all gone, but at least I know where it'll go, since this is the first year I've developed any sort of budget for myself.

First, I'm desperate for a new computer. I purchased my current one nearly five years ago, and there's only 2 gigs of space left on the hard drive. Heck, my iPod hard drive is bigger than my entire computer hard drive. I've resorted to external hard drives and online storage, but this can only go on for so long. Photographs from a weekend road trip can add up to 2 gigs for me! I need a new computer. And my decision has been to purchase a MacBook laptop. Do I know I can get a PC for probably $500 less? Yes. It's the perfect time to buy a new Mac Book since it was just updated November 1. Based on everything I've read, Macs fit my needs much more than a PC does, so I'm completely confident with my decision.

HOWEVER, I'm totally going to game the system on this one. Discover card is having a promotion that for every $200 you put on your discover card at participating malls, you get a $20 discover gift card. Well, guess where I'm going to buy my Mac? Yep, an Apple store at a participating mall! $1100 in receipts will give me $100 in discover gift cards. Hell yeah baby! (Don't worry, I'll pay my Discover bill the MOMENT I get home).

Next, I want a pair of Ugg boots. Now, this isn't totally unreasonable. It gets cold here in DC, and I now walk to work, and will probably have to trek through unshoveled sidewalks to get there in the upcoming months. My boots in the past haven't cut it when it was just a quick walk to the bus stop. Uggs are famous for keeping footsies nice and toasty and suggest not even wearing socks so that you get the full warming benefit of the sheepskin. So I'm thinking about buying a pair ... despite their $163 price tag. Oh fiscal irresponsibility, how I curse thee.

So where does this leave me? Well, I'll probably see $2000 or less of my $3600 bonus after taxes (grrrr). My current Christmas gift budget is $1093. Add to that about $1170 (after taxes) for a new MacBook. Well, that leaves me $263 in the hole after my bonus. Ugh, how do I always do this to myself?

Man, if I had saved every bonus I've ever received, I'd be approaching $10,000!

Saving Goals - October Update

Okay, let's check in on how I did for Savings goals for October.

1. Savings was up 22% this month. Not too shabby. I collected a nice $49/day per diem from a recent three week-long business trip. Since I ate nowhere near $49 a day worth of food, I profited nicely.
   
2. I've pretty much completely reallocated most of my savings for a new computer. Mine is about dead, and I want to purchase a new MacBook next week. So long savings! Although my bonus should help with that.
   
3. I love photography, and I am resisting the urge to purchase a Digital SLR, so I'm just going to get an updated version of what I have. I currently own a Canon G5 (purchased in 2003), and it's outdated, and the battery is on the fritz and will only stay charged for a few hours. I want an updated version of this series, so I'm saving up for the Canon G9. As soon as it drops below $400 on Amazon, I'll get it
4. I'll actually be able to delete the Roth IRA savings goal for this month, because I opened one up at T Rowe Price with no minimum balance requirements (with an agreement to contribute at least $50 per month)
5. Nothing in the vacation contribution fund, since I only just went on vacation in September
6. Although my emergency savings is fully funded, I still have yet to contribute to my long term savings goal of $7000 (approximately three months net income). I really have to get cracking on this.
   

I have a LONG way to go!

an outlandish Christmas gift budget

My Christmas budget this year seems brutal. Or maybe it's just the fact that it's the first year I've ever developed a list that actually includes prices! (Perish the Thought!)

I have a small family. My parents, an older sister who is married and has a little boy, and my grandma. We don't buy anything for aunts, uncles, or cousins, and I reserve gifts for only my two or three closest friends, plus some baked goodies for work. So please please, someone tell me how my Christmas gift list adds up to more than $1000! And that doesn't even include shopping for myself! $300 of this is my share for a new computer for my parents that my sister and I are splitting. However, I have been reconsidering this. I plan on getting a new computer soon, and I could do a reinstall and give them my old one, especially since they really only use it for the internet. So my sister and I could cut our budget there. Plus, I don't think I can get the hearing impaired doorbell for my grandma, these aren't as prevalent and easy as I anticipated they would be.

My spreadsheet also includes notes to maximize my credit card cash back awards (don't worry, I will be paying off these balances every week!)

Does anyone have any other ideas for cutting back the ol' Christmas budget?

**UPDATE. I forgot about adding Brother-in-Law to my budget. Grrr. Add about 30 bucks

Where to go for free legal advice?

I moved into a new apartment in July, which I love. It's nicer than my old one, I can walk to work, and it is only steps off a Metro stop for those days I don't want to drive on the weekends. It's an old building, probably 1940-ish, with only nine units. Last week, there was a note on the building door from the landlord saying that he would be entering apartments to "flush the pipes" and turn on the radiator heat. Only one problem. My radiators never came on.

So I called him when I got home from work to let him know that my apartment was very cold, and he said he'd send someone out to look at it the next day. I wanted it fixed that night, but I was willing to concede. The next day, got home from work, and only the radiator in my bathroom was working. The one my living/sleeping area was still not turning on. I called him again, he didn't believe me, and said to give it some time, that it would probably work by later that night.

I spent a very cold night in my apartment and called him first thing in the morning to let him know it was 55 degrees in my apartment over night. He still didn't believe me, and at this point, I was becoming very irate, saying that it had been 36 hours since my first request to fix my heat, and my apartment was still as cold as can be. His response, "Well, if I don't get it working, I'll give you your security deposit back and you can find a new apartment."

WHAT??

I was furious, hung up the phone, and started looking up my legal rights as a tenant when the landlord won't fix the heat. I have a 12 month lease, and I did not want to find a new apartment and get my security deposit back, I just wanted heat in my apartment! I didn't think it was that outrageous of a request. According to my lease, which I read word-for-word, my landlord agreed to provide the heat. And according to the Virginia Residential Landlord Tenant Act, he has to fix broken heat, and if he doesn't, I have to submit my request in writing via certified letter, along with other steps. According to the Act, if he doesn't fix it within 21 days, I could move within 30 days and break my lease without legal penalty. But the issue is that I don't want to move, I just wanted my heat.

Now, I'm no legal professional, and clearly there was only so much I could discern from reading the VRLTA and my lease and some other advice articles, so where do you all go when you need some general legal advice like this? Do you have a friend who is an attorney, or do you have your own actual attorney? Apparently I could have contacted my county's code enforcement office for advice, and they would have contacted the landlord, but do I really want to cause so much trouble?

Well, my heat is working now, and the temperature is raised in my apartment (along with my blood pressure), but this landlord is a real prick, very unlike my old one. I hope nothing like this comes up in the future.

old person finances for a youngster

My maternal grandparents come from the generation that distrusts banks and the stock market. This is especially interesting considering that my grandparents are fairly wealthy, a product of both frugality and inherited family wealth. So what happens when wealthy people don't trust banks or investments? They hide their money, in cash, everywhere they can think of. Every Christmas my grandmother gives me $500 cash, and they are all the "old" $20 and $50 bills. Who knows how long those have been sitting around her house.

Well, a few months ago, my grandfather passed away fairly suddenly. Although obviously not something anyone was thinking of at the time, my grandfather had his own "hiding places" for cash, different than my grandmother. And, for whatever reason, they never told each other where their hiding places were. So, after getting over the initial shock of his death, my grandmother has spent the last several months scouring the house for his hidden cash. I'm not sure how much he might have hidden, but I'm guessing it's considerable.

Although I feel terrible for thinking this, shouldn't my mom ask my grandmother where her hiding places are? My grandmother is in her upper 80s, and although in decent health, we should all be realistic and reasonable. No one should have the added worry of searching someone's house for cash after a family member passes away. My mom is an only child, so it's not like this would strain sibling relationships either. Long before my grandfather passed away, my mom used to say sometimes that if anything ever happened to my grandparents at the same time, like a car accident, we would have to tear their house apart. So why won't she take the added step of just asking about it and put everyone's mind at ease?

So this got me thinking that, in this day and age of online banking, passwords, and security questions, my money (and debt) is almost the equivalent of being hidden in unknown hiding spaces around the house. Although it's not pleasant to think about, if something happened to me, how would my parents know how to access my accounts? Frankly, I think the only money they wouldn't have trouble accessing is my 401k balance, because my mom and dad are listed as my beneficiaries of my 401k.

So, what should I do about that? I don't have a will, and I don't really think I need one since my net worth is currently at $-26,000, of that about $10,000 are assets. However, for those of you who do have wills, does it include information like that? Like account numbers, passwords, etc.? One thing I was thinking of though, was that I should open a safe deposit box. They're fairly inexpensive (about $15 per month) for a small one. I've been thinking about getting one anyway, to keep information in it like my renters insurance policy, birth certificate, and other important documents. However, one item I could include in the safety deposit box would be a thumb drive with a simple word document or excel spreadsheet, listing every online account that I have and its password and security questions. Then I could list my parents as a party authorized to access my safety deposit box.

Wow, this is a lot of morbidity for a Monday! I'm only in my mid 20's, but, like I said above, I should be realistic and reasonable. I wouldn't want my family to have the added worry of tracking down this type of stuff, just like I feel terrible for my grandmother trying to track down my grandpa's hidden cash.

Anyone have any thoughts?

it's annual bonus time

It's annual review and bonus season at work, and I got some good news on Tuesday.

First, my annual bonus will be $3600. While that's a good amount that I'm very thankful for, I am slightly disappointed. My bonus last year was $3100, when I was at a lower position in the company. So I've spent the entire last year at my new, promoted position, billed a LOT more hours than I did the previous year, but my bonus only went up $500. I know it's all based on revenue and profits which obviously can change year-to-year, so I just have to roll with it, but I am a little disappointed.

Second, I've received a 9% pay increase from $45,000/year to $49,000/year. This, in addition to moving to a new apartment that has completely eliminated my $80/month commuting costs (I now walk to work), should give me a significant increase in my net paycheck. (The reason why my commuting costs affected my take home pay was because I used public transportation, the costs of which were deducted directly from my paycheck, tax free, much like a flexible spending account).

So all of this is good news. While I am tempted to move my 401k contributions from 6% to 10%, am going to keep it at 6% for the time being and use the extra net pay to pay down my credit card debt. My company matches 50% of my contributions, up to 3% of my income, so 6% is the minimum I have to contribute to get the full match. However, if I don't curb my spending habits, I will up those contributions in a heartbeat. If it's not in my paycheck, I can't spend it!

Any tips on how not to increase my expenditures with my new increase in income?