Am I a Personal Finance Blogger or Aren't I?

I hear behind these doors, there
are hallowed halls.

I received some great news late last week.  Some big, life-changing, kick-you-in-the-mouth sort of news.

I was accepted into the PhD program to which I applied.  In 4-5 years, I should be a doctor (not a helpful sort of doctor, but, still, a doctor nonetheless).

This is a dream on many of levels.  I'll get to do advanced study in a field that I love, for one.  After I get the degree, I will be qualified for a career (teaching) I've always wanted, for two, and that doesn't even take into account the practical theatre work that I will continue to be a part of in the future.  Even in simply getting accepted, there is a sense of validation for my life choices thus far, for three.  I should be excited out the wazoo, right?

And yet...

A few days ago at Grumpy Rumbling of the Untenured, there was a thoughtful article and series of comments concerning spouses and careers, with particular emphasis placed on the perils of one spouse paying the bills while the other worked towards his or her dream career through higher education.  This post brought me pause for several reasons, not the least of which being the horror stories from women whose relationships with their husbands had degenerated when they were in similar situations.

So, right from the get-go, an immediate, extra-scholastic concern is for my marriage, and my immediate thought is that I should not do things that could cause a rift.  I know that I'm maybe going a little "butterfly effect" right now in placing so much emphasis on things that "might happen if," but the sanctity of my marriage is of paramount importance to me.  I do my best not to do things that will hurt my wife, and she does the same.  I think that by looking out for your spouse's best interests, a marriage will work, and we've been blessed by the fact that neither of us has so severely violated the other's interests that our relationship has become irreparable.

However, apart from the very real marriage concern (and more to the point of the title of this post), I am concerned about the financial ramifications of the choice to go back to school.

To put it bluntly, between our two incomes, my wife and I make what I consider to be a stupid amount of money.  We're not rich by any means, but we are very comfortable, and, if we both stayed at our current jobs through retirement, I have no doubt that we would easily be millionaires.  Just from our 401(k) contributions alone (since the company we work for matches contributions 100% dollar for dollar), if the market averages 8%, we could be in the 7 figure territory by the end of the decade.

I don't know about you, but that amazes me.  As both of our families are pretty solidly middle class, it's safe to say that should my wife and I simply stay the course we're on today, we will live our Baby Boomer parents' dream for us: we will have had it better in life than they did.

On the other hand, if I join the PhD program, things will obviously change.  In the email note that told me I had been accepted into the program, the professor also acknowledged that funding was still up in the air.  If there is funding that is at least equal to the first two years tuition (as tends to be the case, from what I've heard), then the decision is perhaps a little easier.  But what if that isn't the case?

I would like to keep on at my current job while attending the program, but I am unsure if that will actually be a viable option.  If I am unable (for scheduling or other reasons) to keep my job, am I really willing to give up a half-decade's worth of earnings and retirement savings, likely get into at least some student loan debt, and potentially destroy my marriage, all for the sake of following a dream and MAYBE getting a job that I THINK I'll like, while the earnings for which job will be less than what I currently make?

As a personal finance blogger, I know what my decision should be.  I should stay at my job which I am good at and for which I am well compensated.  I should keep maxing out my 401(k) and my Roth.  I should not go to school if there is any potential that I'll need loans.  If I'm going back to school at all, I should choose a more lucrative and/or in-demand field such as finance or science.  I need to maximize my earnings early in life so that I can take advantage of the lowly investor's best friend, compound interest.

I know all that, and yet...

There has to be something said for making a change with your life and doing what you want.

It occurs to me that maybe I'm not a personal finance blogger at all.

I guess it's safe to say that I'm still undecided about this, so I ask you, unknowable voids of the internet: what do you think I should do?

Photo by jjorogen.

For Every Thing, There Is a Season

"Life can only be understood backwards, but it must be lived forwards." - Soren Kierkegaard.

For me, the new year provides a good opportunity for reflection.  The sheer number of resolutions that people make (including myself) is testimony to that fact.   So, in the spirit of the time of the year, here's something that has been on my mind lately.

When thinking about money, the prudent or the smart thing to do is often to focus on the future.  Did you receive a sudden windfall?  Make sure to invest it.  Are you contributing enough to receive the maximum match from your company's 401k program?  If not, are you looking forward to eating primarily cat food in your golden years?

Get your dirty mitts off my Meow Mix.

While the above, in general, is absolutely sound and worthwhile advice, it poses a simple problem: we each only exist right now.  While your future self will be thankful for a comfortable retirement, if you always deny yourself present happiness, I can't help but think that that same future self will look back on a life that was hardly lived.

So, what am I suggesting?  Am I suggesting an "Eat, drink, and be merry, for tomorrow we die" mindset?  Hardly.  In fact, focusing too much on your happiness today will come at the cost of a less secure retirement. 

All that I'm saying is that it is fine to splurge once in a while.  What I'm suggesting is a balance between your present and future happiness (your past, having already been lived, is unchangeable).  Inasmuch as your happiness is tied to the things that you own or the things that money allows you to do, make sure to have some fun once in a while.

We only get to live once, after all.  We may as well have some fun once in a while.

Picture by PugnoM.

A Personal Update

This came up in an image search for "Theatre."
I guess I'd pay to watch this happen,
though maybe not for 90 minutes.

Last month I made a commitment to myself with the end goal of writing a full-length play during the month of November.  I did not achieve that goal by a long shot.

However, I did make some progress on the playwrighting front.  Spurred on by Cordelia, I joined the Impossible League.  While I haven't been super active over there as of yet, one of the other members happened to know somebody who happened to be running a short play competition (the due date for which was, unfortunately, only a couple of days away).  I hurriedly wrote a short play, and I submitted it.  I found out today that it was not accepted for the festival, and I'm pretty much at peace with that.  While I think the idea I had was a good one, I think that I found out about the contest too late in the game to really flesh out the script and iron out the wrinkles, so to speak.

I did also make a submission to another playwrighting contest, but this one did not require a script.  For this one, all I needed to do was to submit a sample of previous work and to write a page or two on what sort of play I would write were I chosen.  While I don't want to give any ideas away, I think I have a good shot at this one.  I haven't heard back from them yet, but I expect to in the next week.

Finally, as part of another set of goals I set out for myself a few months ago, I am in the midst of applying to a Ph.D. program in theatre.  I am applying to a well-regarded, albeit local, school.  I've already contacted former professors for references, and my big issue now is writing my statement of intent (fortunately, I already took the GRE a few years back, so I'm good on that front - 1400, what what! [for what it's worth, that score is already out of date as they retooled the scoring system for the GRE a few months ago]).  In any case, continuing my education is something that I'd really like to happen, so I hope that my passion and propensity for the material will shine through in my essay.

Photo by Rob Boudon.

Buying a House - One Item to Definitely Check

I've written before about the air conditioning situation at our condo, but I just wanted to take a moment to encourage those who are thinking about buying a home to ensure that the air conditioning system is in good working order before you take the step of home-ownership (assuming, of course, that you live in an area that needs air conditioning).

As some background, the person who came and inspected our condo before we purchased it told us that the air from the air conditioner was not as cold as he thought it should be, but that the difference in temperature was almost certainly a low-cost fix (he believed it just needed to be cleaned). He also told us, with a straight face, that he thought there weren't any big issues with the air conditioner, even though he did not go up on the roof to check the unit out.

Nevertheless, in his actual written report (that we didn't read as thoroughly as we should have due to what he had told us in person -- obviously a big, dumb, stupid-headed error) he was a little more severe in his warning about the air conditioning unit, to the extent that the warranty company refuses to make a payment to replace it as, per the inspection, the air conditioning had a pre-existing problem.*

In retrospect, it was a huge mistake on our part to not insist that the inspector check out the roof unit before we signed the paperwork buying the condo. What can I say? In my my younger and more vulnerable years, I was, well, younger and more vulnerable.

The cost of manpower, a new air conditioner unit itself, and (allegedly) the rental of a crane is going to set my wife and I back a "cool" six or seven grand.

Now, I'm not going to say that we wouldn't have purchased the condo had we had a better idea about the issues with the a/c; I just wish that we could have used the knowledge to negotiate a better price with the bank.

For those of you reading, if you've purchased a house, did you make any mistakes like my wife and I did? What advice would you give to first-time homebuyers?

*Other pre-existing problems? The termites and water damage that the inspector missed. Maybe we just had a crummy inspector. I guess that's what we get for doing business with somebody who still has an aol.com email address.**
**In our defense, our realtor recommended the guy.

The Premium Paid for Convenience

In the end, it all comes down to our time versus our money. At least it did for me last night.

Last night, I had a hankering for a mixed drink with a name that is unwritable (unlinkable even!) on this PG rated blog. After checking my stash, I realized that I was missing two key ingredients for this Drink That Must Not Be Named (DTMNBN). After discussing dinner plans with my wife, we decided that I would go and pick up food and bring it back home. The only convenient place to purchase the ingredients in the vicinity of the restaurant was a convenience store that I am not fond of, as I believe their prices are high and they charge a fee for debit/credit transactions.

After considering how much time I had available, convenience won out, and I paid a premium for that convenience. While similarly sized portions would have cost, probably, $20 at the grocery store, I ended up paying north of $40 at the convenience store.

That’s gross, right? It cost me twice as much to get items I wanted just because the store was more convenient.* What kind of a personal finance blogger am I anyhow?

As a justification, all I knew is that I had a limited amount of time to get food (it was ordered before I left the house) and stopping at the grocery store would have added an extra ten or fifteen minutes round trip. I didn’t want to spend my time in that manner, so I chose to spend my money to save time. A general set of equations that can be seen from this are:

Time saved = extra money spent, and
Money saved = extra time spent.

As you can see, there is a tradeoff that can easily occur between our time and our money. This was a good reminder to think seriously about overvaluing convenience in our day to day lives. Some other areas that fall under this category are:

ATM Fees—Sure, it may seem like a good idea to take money out from an ATM that isn’t affiliated with your bank (if you need to split a check at a restaurant, for instance), but those $2 or $3 fees add up over time. It’s worth taking the time to get money out from your own bank for free.
Eating Out or Eating Takeout—It can be oh so nice not to have to cook, but you are definitely paying extra for the benefit (to say nothing of the nebulous world of tipping on takeout).
Paying for Parking—I live in San Diego, and anybody can tell you that the parking situation in any big city can get pretty hairy, especially on a weekend night. It can be tedious searching for street parking only to find a spot eight blocks away (if at all), but when the parking garage next door to where you’re trying to get is charging $20 for the night, I’ll gladly talk the walk.
Buying on Impulse—This has happened to all of us: we’re out shopping, and we find something that we can’t live without, and so we buy it without a second thought. A better option would be to either sleep on it to see if we really need the item, or, if we decide that the item is necessary, to spend some time comparison shopping online (where the price will almost certainly be better).

How about you? Are there items in your life that you’ll gladly sacrifice a few extra bucks for because the convenience is worth that much to you? Or, to look at it in the opposite way, in what ways do you consider your money to be more valuable than your time? Let me know in the comments.

*For what it’s worth (zing!), the DTMNBN was delicious.

*Update 9/5/2011:  This post was featured in the Carnival of Personal Finance.*

Reflecting on Military Service

I mentioned last week that I was going to an NFL pre-season game with a couple of buddies. I am unhappy to admit that my Chargers lost the (meaningless) game, but there was another item that I briefly wanted to talk about.

San Diego is a military city, with significant influence from the navy in our harbor and from the marines up north at Camp Pendleton. With the area’s ties to the military, there are frequently “fly-overs” before games, in which a couple of military jets loudly fly over the stadium. The game I went to had the jet fighters fly over, but it also featured another military aspect.

At halftime, a group of young veterans, some younger than I am, made their way to mid-field. These men were being honored as local heroes. All of them had received the purple heart for their service, and nearly every one of them was missing at least one leg. Their wounds were most frequently the result of IED explosions, though at least one man had been mutilated by a suicide bomber and another had been shot.

As we all remember, last week was (at least) an unpredictable week for the stock market. Many of us spent some time considering whether or not our investments were sound, whether and at what point we should consider selling, and how frustrated we were that partisan politics was affecting our retirement plans in a very negative way. Given how the market looks today, it seems those of us who held onto our investments were in the right. Still, last week with the S&P’s downgrade of the U.S.’s credit, there was a very real sense that the sky was falling, and all we Chicken Littles could do was watch it happen.

But as I stood there, watching the soldiers who were willing to give their lives for this country, my irritation melted, and I began to feel ashamed. All last week, I was frustrated at the government and the economy, when these men believed in America enough to put their lives on the line. How blessed am I to have both arms and legs? How blessed am I to even have retirement accounts? How blessed am I to not be in want?

In twenty-first century America, things are tough all over, and prudent spending and saving can go a long ways toward achieving goals that we set out for ourselves. But no amount of money can keep us alive indefinitely, and no amount of planning can entirely save us from the unknown. The only thing we are able to directly control is our own attitudes about what is happening. Seeing the veterans was a good reminder to me that it wouldn’t be the worst thing to be more optimistic in general.

My Wife Is Good at Money, Life, Etc.

Background: My wife and I bought a condo a year ago. Nearly as soon as the ink was dry on the documents, the air conditioner went out. Though we had purchased a warranty, the warranty company refused to replace it.*

Now, I don't know if you've gone outside in the last few days, but America is having something of a record heat wave. While it hasn't been as hot here in San Diego as it has been in other parts of the country, it still gets pretty warm. My wife and I are under the impression that buying a new, rooftop a/c unit during the hottest months of year will result in paying the highest price, so we were looking for alternate ways to cool down (underwear in the freezer, anyone?), and my wife suggested that we look into a portable air conditioner as a stopgap measure.

This was a great idea, I thought, and so I started looking at websites, trying to figure out how much that was going to set us back. In researching, it looked like our local Lowe's had two units that would work: a less powerful one (though still probably good for our space - 10,000 Btu) and a more powerful one (12,000 Btu). The price tags were $299 and $399.

$299 was in the ballpark of what I was hoping to pay, so I clicked on the icon to see what stores in my area had that unit. Unfortunately, no stores in San Diego had it. So, I was left "having" to buy the $399 one.

The old bait and switch! Curse you, Lowe's!

I explained my research to my wife, and she immediately said, "Uhm, why don't you check Craigslist." To her credit, she managed to say this with a straight face and only a minimal amount of disdain. :-)

A quick Craigslist search revealed an even more powerful unit (14,000 Btu) that had only been slightly used for a price tag of $150. That's an immediate savings of $249 (not to mention the extra 10% or so we'd be paying in sales tax).

I went over, checked out the a/c, found it in good working order, and now my wife and I are going to sleep in sweet, sweet cold comfort. And the best part is, we got a great deal on it.

I'm a lucky, lucky man.

*There is a post coming on this as soon as I try one more tactic with the company.**

**This tactic does not include kidnapping or wire-tapping.***

***Although...

Do You Use a Change Jar?



Buy her Stand Up Special Here!



My dad used to keep his spare change in a big, glass water jug that was painted red, white, and blue, which is actually a pretty valid metaphor for the financial system in America if you think about it (full of money, easily broken, vaguely patriotic). One of his favorite expressions was (and still is) whenever my brother and I would bug him about wanting something expensive, he would reply, "Well, we better start saving our nickels."

As a result, I still keep a change jar, and, every few months, I spend some time rolling the coins. Once rolled, I then generally either take them to the bank or use them at a fast food restaurant (I love to see the cashier's expression when I order a #6 and then pull out three rolls of nickels. Big Mac: $1.99; medium fries: $1.49; uncomprehending stare of a sixteen year old: priceless).

For me, it's important to spend the time counting and rolling the coins myself. Sure, I could take them to a Coinstar machine, but them I'm paying them a percentage. While I value my time, I also don't like to throw money away if it's unnecessary.

Still, I understand that other people look down on change jars. Comedian Whitney Cummings even had a joke in her Comedy Central stand up special concerning what the deal is with guys having change jars (Is it their savings account?). Others prefer just to spend the change as they receive it, thereby eliminating the clutter that a change collection can bring.

What do you think? Do you save your change in a special place?

Saving Money Doing What You Like to Do #3 - Eight Ways to Save Money on Books

I love reading, and, as a direct result, I have something of a love affair with books that goes beyond merely reading. I love holding them, touching them, smelling a newly opened book, and, more than anything, I love having them around. As a result, I have developed something of an extensive library (particularly scripts and books about theatre and drama).

If you have been bitten by the book bug (book worm?) as well, then you know that developing a library and/or being surrounded by books can be an expensive past time. However, being a book lover doesn't have to cost a fortune (or cost all the available shelf space in your house). Here are some ways that I've managed to cut down on my own book costs.

1) Develop a book-buying philosophy - In my younger and more vulnerable years, I purchased nearly every book that I wanted to read, which I found left me quite short in the pocketbook. Wanting to be able to save more money and not overflow my condo with books, I have recently more or less decided that I only really need to purchase books if I'm going to need or use them as a reference. As I have been working towards, and recently completed, my M.A. in Drama, most of those reference works have been plays or other books on the theatre. In general, I now only purchase books of this type.

2) The library - Yes, I know this one is the most obvious place to get books on the cheap, but it bears repeating. For a long time, I had a difficult time wanting to get books from the library because I wanted to be able to read them at my leisure, and the three week check-out time (plus an additional three weeks for a one-time renewal) was totally harshing my book-loving buzz, man! Those fascists! Nevertheless, after moving a couple of times in the last few years, I couldn't help thinking that maybe I didn't need so many heavy boxes of books to cart around anymore, particularly for those books that I might only read one time. For example, Tina Fey has written a deeply hilarious book in Bossypants, but after reading it once, will I really need to have it on hand in perpetuity? Probably not.

3) Other free books - Outside of my local public library, there are a couple boxes of free books that people can take home. While these boxes are usually filled with books that no rational person could possibly want nowadays (anyone up for a copy of the Dummies Guide to Windows 95? Anyone? Anyone? Bueller?), I have found some choice picks in the past. For example, the other day I looked through the box and found an anthology of plays which included some that I haven't read but that I had been meaning to. There are also some free books on Craigslist if you look under the "free" section, but these are generally not the sorts of books one might want to read (similar to the free boxes at the library).

4) Commercial websites - There is, of course, also a book buying section on Craigslist, which can have some good deals. I recently purchased the beautiful, hard cover, three volume Calvin and Hobbes collection that I've had my eye on for several years after I found a seller on Craigslist who was looking to get rid of it for $25 (which is an absolute steal, especially when you consider that it still goes for around $100 used on Ebay). While I'm on the topic of Ebay, Amazon.com is kind of the obvious choice for books with nearly everything it has in stock having deep discounts off of the cover price, but sometimes Ebay has still manages to have better prices (particularly for used books). I have found that it pays to check both sites. The downside to buying online is that you generally have to pay for shipping; however, if you are a student, you can sign up for Amazon Prime, which offers free two-day shipping. I signed up as a student, and they haven't kicked me out yet, so I still take advantage of that offer from time to time.

5) Non-commercial websites - If the book you're looking for is an older title, then you should be able to find it for free at sites like Project Gutenberg. Project Gutenberg compiles etexts of books that have fallen into the public domain. Further, you can download the files, and you should be able to upload them onto your ereader (such as a nook or a kindle) if you have one.

6) Used book stores - These are some of my favorite establishments on earth. I really enjoy lingering for an hour or more at a quality used book store with a good collection. If you live in a city that has a university, it may be worthwhile to see if they have a friends of the library book sale room on campus. San Francisco State, for example, has one where all of the softcover books are a dollar and all of the hardcover books are two dollars. While the selection is limited, you can't beat those prices with a stick.

7) New book stores - These stores, like Borders or Barnes and Noble, are usually my last option. Still, Borders has a program that frequently sends out coupons through email that give you 20 to 40 or 50% off the cover price of a book. If you are the sort of person who likes browsing in a bookstore, than it's certainly worthwhile to sign up for the free coupons. As an FYI, for what it's worth, Barnes and Noble tends to be stingier with their coupons. I very seldomly see online coupons for Barnes and Noble, and when I do see them, they are usually only for 10% off.

8) Ereaders - Sure, there is the start up cost of actually buying an ereader (which are still going for better than a hundred bucks for a brand new one), but generally, the books that you are able to purchase for your ereader are going to be less expensive than physical copies of the books. This isn't always the case, however. As a point of reference, I own a Nook from Barnes and Noble, and nearly all of the titles are $9.99.

Those are my ideas of saving money on books. To all of you readers out there, how do you save money on books?

Mid-Year Resolutions

Yesterday was my wife and I's third anniversary. This seems to be a recurring theme among those looking back on periods in their lives, but it is very true for me as well that those days, weeks, months, and years have just flown by.

On a not-immediately-obviously-related note, in Thornton Wilder's play Our Town, one of the main characters passes away between the second and third acts. As she sits among a group of ghosts and looks upon those who have come to her funeral, the idea that the living don't realize how wonderful and amazing life is occurs to her. Only from her vantage point of being beyond the grave does she truly realize how much she has missed, both in terms of opportunities and in terms of details that didn't seem important at the time.

So, I guess a combination of me recently seeing that play and the occasion of my anniversary have put me in something of a thoughtful mood. If life flies by, what marks am I leaving? To paraphrase a quote that I heard frequently as I went to a Christian school as a boy, how exactly am I redeeming my time?

Those questions are what prompted this list. Many people make new year's resolutions, but I have not really seen mid-year resolutions. Some of these are directly in regards to money, while others are more indirectly related, but I think all of them affect my financial situation.

1) Losing weight: if life is short, than I ought not do things that will hasten its end. I carry a significant amount more weight than I should. My concrete goal is to lose thirty pounds by December 31.

2) Writing a play: one of my goals in life is to have another play that I've written professionally produced. My first play met with some success last year, and I am tremendously thankful for that experience. That taste of success, however, has whetted my appetite for more. One promising opportunity is a playwriting contest that is run through UC Santa Barbara. The contest's deadline is December 1, and my concrete goal is to have a play submitted.

3) Fully funding my Roth. This should be a relatively easy goal as I will be unable to put money into a 401(k) for the rest of the year (so contributing should not be too much of a hardship). The company that I am starting my new job with doesn't allow employees to join the 401(k) program until the employees have worked for the company for six months. While that is disappointing news, once I have reached the six month mark, my company fully matches, dollar for dollar, all contributions up to the federal limit. So, my goal for next year will be to also fund my 401(k) fully, but for this year, it's just a matter of finishing off my Roth IRA. I'm better than halfway there already.

4) Start paying back a personal loan. A few years ago, a family member loaned me some money, interest free, in order to pay off some credit card debt. There were no strings attached, and that family member has even said that I don't need to pay the money back, but I still feel that it is important to do so.

5) Applying to a Ph.D. program. I still have some research to do, but I'm planning on applying to at least the Ph.D. program at the UC close to where I live. I believe that I would be able to do the classwork part time, while simultaneously continuing my day job. Earning a Ph.D. is something that is important to me, and, even if I'm not accepted, at least I won't be not going to school because I didn't try.

Looking back on the list, I've realized that those are five very high-minded goals. Now I've got them listed, however, and now that I know the finish line, I just need to plot how I'll get there.

I'll redeem my time yet.