I Feel Financially Depressed

This is a sad, miserable post. Please do not read unless you wish to be depressed too!

I just updated my “debt-o-meters” sidebar and am struck by how slowly I am inching towards paying my debt off. Over the summer, I got paid fewer times and very irregularly, but I managed not to rake up more debt and save some money in my freedom account, but by the end of the summer I was exhausted. My August pay was only for half the month and most of my August snowflakes went towards paying my semester bill (my grad program pays for tuition, but I have to pay for misc fees which come up to approximately $350/semester). A few days ago, I looked at my pitiable bank balance and decided that I needed to dip into my savings account in order to survive the month. So, I transferred $150 from my HSBC account to my checking account. I am perilously near crossing my budget limit thanks to a shopping and casino trip with my sister (it was fun, but I lost at the casino). I know that I spent the money because of an unwise choice that I made, but it has been almost a year since I bought myself any new clothes.

I do make some sensible decisions too, but I feel that this adds to my depression. Take for instance the case of my housing. Early last year was when I started to become even remotely aware of my financial situation. For three years I had lived in a lovely apartment – not extremely expensive, but pricey enough for me to decide that I could not continue to live there anymore. I decided to find the cheapest apartment possible and send the savings towards my debt. I found such an apartment soon – they were the cheapest rooms in town. I would have a large living room, a cupboard-sized space for a bedroom (space enough for a bed and night-stand and nothing else), and a large kitchen. All utilities paid except internet. The downside – the rooms were in the basement of a prehistoric house, I had to share the restroom (no tub, just a shower stall) with another inhabitant of the other side of the basement, no laundry facilities on-site, the basement also turned out to be much damper than I had imagined it would be. Pretty miserable conditions really. I might have found a roommate for a better apartment, but having had some quite negative experiences with roommates before, I decided not to. Anyway, I was saving a large chunk of money, and I was willing to put up with the crappy apartment. I moved in. A month later Murphy struck and my car (which was an old old old piece of junk) died. I decided to invest in a much newer car, took out a loan and guess what? The difference in my rent just about covered my car payment – so a year and a half later, there hasn’t been even a fraction of the movement that I had hoped to see in my debt-reduction. But I am okay with that – I have a lovely car that I can use for another ten years at the very least.

And then something happens to depress me even further - I stayed a couple of days at a friend’s place last week and simple luxuries such as a bathtub, and a bedroom with space for a TV in it, a window that actually lets some light in, ceilings that I cannot touch even if I tried to, and other such things made me want to move right out of my crappy apartment. In a year’s time, I will be off on internship and will be making more money. I could stop trying so hard and allow myself a bit more luxury right now. I make and save so little right now that in the long run all this frugality is only going to knock off 5-6 months off my debt-reduction payment. I show all the signs of depression in the financial area of my life – I feel hopeless, stuck, tired, frustrated and angry (with myself more than anyone else). I wish dearly that I could somehow fast-forward a year of my life!!!

I Successfully Passed My Qualifiers

Two weeks ago, I took my Ph.D. qualifying exams. In my department, this is a day-long (8 hr) written examination - 5 essay questions. I am a BIG procrastinator and although I had been collecting prep materials all summer, I only actually studies for two weeks. This was an extremely stupid and dangerous thing to do since the questions could be asked on absolutely ANY area of psychology (my major). However, I did some real heavy-duty studying those last two weeks and felt okay about my answers the evening of the day I took them. But I still was trying not to hope for too much since I was horribly under-prepared. However, on Saturday my major professor called me to congratulate me on passing my exam. I am ecstatic!!! I still don't know how much I scored on each question, but I don't really care - I passed, and that is all that is required to make me an official Ph.D. candidate so that I can go on to work on my dissertation.

What does this have to do with finances? For me, quite a lot actually. A couple of years ago, my major professor went on a year long sabbatical. The procrastinator that I am, I took this as an excuse to not do any research at all. As a result, other than classes and clients, in all other areas, I am about a year behind my cohort members. In order to go on internship and graduate on schedule, I need to propose my dissertation by Oct 15th. This would not be possible unless I passed my qualifiers. Had I failed, I would be stuck here a year longer - meaning very low pay for another year and postponing debt repayment and savings for a whole year!!! That is another reason I am thrilled to have passed. Now if only I can get my proposal done in a month!!! Wish me luck!

What This Site (and I) Will Not Be

I was re-reading through parts of Dave Ramsey’s “Total Money Makeover” before I returned it to the library, and a testimonial caught my eye that had irritated me at first, and irritated me a lot more the second time around. It was about a young couple who scrimped and saved and lived an impoverished life for a long time until they were able to save enough money for a 100% down-payment on a home. I think that planning on paying a 100% down on a home is admirable, but I don’t think that a young and just-married couple should cut out everything but the bare necessities and deprive themselves of almost every bit of sensory pleasure in order to buy a house all-out sooner. Can a lovely honeymoon enjoyed in the first flushes of conjugal love be completely recaptured by a vacation one takes after several years of what appeared to me to be a majorly financial partnership? I think not. It apparently worked for the young couple in question, but I am sure it will not work for me.

And so, I think it is time that I decided what I will and will not do in my journey towards financial freedom. I will definitely be frugal – as frugal as I comfortably can be. I don’t think I believe in never treating myself to anything nice, eating all my meals at home, buying only low-quality clothes, food etc. I will be young only once, and I plan on enjoying myself as much as I can. I know I have wasted a big chunk of my youth incurring debts that I will take a few years to pay off. But I will not deprive myself of the rest of it. I’ll take a few cuts, sure… but I’ll do so without turning into a miser. My answer to the $40 wines I used to buy shall not be drinking water for seven years, but rather shall me the $10 bottle of wine which has been marked down to $8. I shall not replace my hitherto expensive vacations with a no-travel policy, but shall rather plan for shorter vacations, and save the cash for them before I do any of the spending.

And my blog will reflect the same – I shall talk not just about how I make and save, but also about how I spend my money – in frugal albeit fun ways. This is not going to be a blog that talks about how to cut out all expense and live on a shoestring budget, how to manage not eating out in four months, and so on. If you choose to live so, please do. I can afford not to because I know that in a few years time, I will be earning many times more than I am now. I also am able to completely forgo things that have been unnecessary frills in order to splurge on my own special indulgences. I also know that it is essential that I enjoy my financial awareness for it to last any length of time.

What do you think? Should I be cutting out all expense in order to get out of debt? Or is my more lenient approach okay too?

The Difference Financial Awareness Makes

Last year at this time (mid-summer), I was completely broke, and had already run up an additional $1000 in credit card bills. This year, I have $2200 to spend in my checking account. Why such a dramatic difference? This has happened purely because I am more aware of my own financial situation now, and have been taking steps to prevent sinking to rock bottom like I did last year. Let me tell you why I was broke last year….

I am graduate student on a 9-month contract. Summer funding, usually in the form of teaching or research assistantships is extremely difficult to come by in my department, and even when it does, is terribly meager. Summer work even outside the department is extremely difficult to come by. There are a few reasons for this: I live in a college town, which reduces in size in the summer to about one-fourth its original population. This creates a dearth of employment opportunities. But also, because most of the people who do stay in town are usually looking for employment, including the high-school students and summer partiers looking to fund their weekend booze, there is increased demand for employment. The result of this depressing trend is that any job that I do land is usually not worth the money. This summer more than ever, I need to be aware of how I spend my time since I take my massive Ph.D. qualifying exams in mid-August and need to schedule intensive studying for as much time as I can. Last year, although I did land a summer research assistantship, it paid only $1300 after taxes for the whole summer. That is how I came to be broke, and running up credit card debt. This had been my story the past few years as well, but I was engaged at that time, and my fiancé who earned many times as much as I did usually covered my summer expenditure.

However, this has not been the case this summer. Let’s take a look:

What has not changed?
• Summer employment opportunities still remain pitiably low.
• I still don’t have any savings (greater than $100).

What has added on to the financial burden this year?
• I have an additional monthly payment of $210 for a newer car.
• In March I took a two-week long break from work and went on a long road trip that cost me almost $2000, which I could have used for summer money. However, I am glad I took this trip since it provided me with some much needed travel and relaxation, and has been pivotal in keeping me sane. It also was a period of self-exploration that turned out to be priceless.

What changed? Well, for one, over this past year, I have become very aware of my finances. This affected all the following points:
• I moved to a much smaller, much crappier (but still inhabitable) basement studio apartment in a dilapidated old house to save money – the savings are not much, but are just short of my monthly car loan installments, so I don’t place any additional strain on my wallet.
• I have stopped raking up additional credit card debt, and consequently my monthly payments are lower.
• I was as frugal as comfortably possible during the non-summer months and paid off a few credit cards with smaller balances.
• I transferred balances to low APR% credit cards to avoid finance charges.
• I negotiated with my landlady to do maintenance work around the house in lieu of $50 off monthly.
• I use public transport as much as possible to save on gas.
• I cook more at home to save on food expenses.
• I use more coupons and shop for deals (this doesn’t happen a great deal, but has definitely saved me about $10 over the past two months).
• I gave up my Netflix subscription, and began using the public library (always free), and Redbox (almost always free – see promo codes in the right-sidebar of this blog), saving me about $15/month ($17 Netflix subscription – Approx $2 for Redbox when I run out of promo codes).
• I began this blog (late in the year, but I had been journaling off and on before I began blogging) to keep me motivated and accountable.
• I made a budget each month, and tried to stick to it. I almost never succeeded, but the budgets saved me from going too over the top and definitely saved me a few hundred dollars.
• I made a separate summer budget knowing that my income each summer month would be different, so I ended up not spending everything in my checking account by the end of the month. The money I now have in my checking account has to be carefully used over the next three months when my monthly income will be much smaller than it has been these past two months.
• I have become more comfortable asking for discounts and jobs, and have been greatly amazed at how often I seem to get what I ask for when I do ask.
• I negotiated with my department, and competed with a lot of other students for a higher paying summer assistantship (approx. $1850 over the summer).
• Additional Income: I lobbied (read begged) for, and got additional summer funding with a different department (approx. $1200 over the summer).
• Additional Income: I sold books I no longer need on Amazon.
• Additional Income: I sold a few household objects off on Craigslist.
• Additional Income: I joined and completed online surveys for cash.
• Additional Income: I pet-sat for a nominal fee.

Isn't it wonderful what being financially aware and responsible can do? I don't think I am ever going back to the old me!

What’s in My Wallet?

In the spirit of being open about my finances, I have decided to post what’s in my wallet. This post was inspired by one of those CapitalOne commercials which feature hordes of club-wielding, bloodthirsty, yet financially-informed Huns running amuck in modern-day American cities.

My wallet itself is a fairly unimpressive resin affair that I got from the cohort ahead of me in my graduate program at a “Welcome the New Cohort” party four years ago. It features the school mascot stamped into the resin, and has one-fold, both sides of which are held together with Velcro. In addition, it features a see-though plastic pocket on the front, a see-through plastic pocket inside the fold, an opaque pocket on the other side of the fold, and over this opaque pocket, a little zipper pocket for change. I am quite impressed that this little wallet, which probably did not cost more than $8 – and even that only because of the school logo that makes merchandise wickedly expensive, has survived without too much damage in four years of daily use. I used to use a much prettier and better-quality, but also much bulkier Nine West wallet that I replaced for two reasons: I wanted something smaller to carry in my bag, and unlike the current wallet, the old one did not have a see-through front opening that allowed me to flash my ID to the bus-drivers and I hated getting the card out every time I boarded a bus. So, here goes… this is what’s in my wallet:

See-through front pocket:
University ID (also acts as free bus-pass)
Driver’s License
Magnetic key for access to office
2 Coupons for: Swiffer, Febreeze

See-through inside pocket:
Public Library Card
Vehicle Insurance Card Duplicate
Medical Insurance Card
Spare Check (just in case I need a check)
Credit Union Membership Card
Borders Gift Card (approx. $15 balance)
Walgreens Gift Card (approx. $25 balance)
Target Gift Card (approx. $6 balance)
Walmart Shopping Card (approx $150 balance)
Advanta Mastercard
USBank Visa Debit Card
Bills that I have not entered in my keep-track .xls file
Post-it with Redbox Promo Code (see right sidebar)

Opaque inside front pocket:
On-going grocery list
3 coupons for Scotch Envelopes (handy for mailing Amazon sales)
1 Best-Buy coupon for 10% off in-store purchase
2 Hy-Vee pizza punch cards that I NEVER use
$2.00 in dollar notes

Zipper change-pocket:
$.70 in coins
1 button that had come off a top a few weeks ago

You know, it is a good thing that I looked. I had almost forgotten about the Borders and Target gift cards. I also reminded myself to give away the half-used pizza punch cards that I never use anymore, sewed the button back on again and marveled at the extremely tiny sum that I carry around in cash. I also found a few scraps of paper with phone numbers on them that I promptly entered into my cell phone, and discarded.

There you go, you bloodthirsty, club-wielding Huns – now you know what’s in my wallet – and it’s not a CapitalOne card!