Category Archives: Money and Saving

But I want that…

Not buying is so much harder than you might think. Back in February, I adopted a rather hardline approach to my finances and declared: “I am no longer going to buy things I don’t need” (since we’ll be getting rid of everything next Spring). So easy, right?

Well, what might that entail?

Superfluous purchases, of course: Nice dinners out at restaurants instead of cooking. Going to the gym. Buying clothing that we won’t take with us. And so on.

How’s that going?

Yeah, not so well (I’m trying). But not entirely horrible. I did quit my gym, though I still assert that the YMCA is much better than any corpo-gym conglomerate out there (no soul sucking contracts and they do help the community). I started running in my neighborhood and doing half-assed sit ups in lieu of the treadmill and workout machines. No progress on the gut-o-meter yet, though.

Eating in is always difficult when you live in an area that has so much good food. Two nights ago it was Burmese, last night Tapas, and just now (for shame), a French soul food lunch (I did leave my turkey sandwich at home). I’ve tried to be diligent with grocery shopping, and I really do love cooking, but lately it seems it can be just as expensive to make your own food.

Everything does cost more in California.

As far as clothing, I know I will go utilitarian once we leave. I look forward to having 5 shirts to my name. It makes life easier, and I doubt anyone would notice, since I wear the same thing every day.

And in that, I realise the absurdity of living in the first world, where we worry about having TOO much…and ponder TOO many choices. We are truly lucky.

The least I can do is donate all of my clothing on our departure. Though, I’m sure there are better ways to do it than just going to Salvation Army (will have to look into this).

Streamlining to save is indeed quite an arduous task. It takes discipline and focus. Two things I’m hoping Mia will help me with once she returns to the Bay Area in a few weeks.

In the meantime, I should probably go patch up the holes in my shoes.

-Adam

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Fund find

If only this could be a long, ongoing series, right? Not until I get my odd job business of the ground (kidding?).

I finally called up the gatekeeper (or crypt keeper–I leave the pleasure of interpretation up to you) of my investment portfolio, Fidelity. I have had serious questions about what will happen to my 401k and pension if I decide to leave my employer next year. Can I use this money to fund my trip? What expectations should I have about being taxed to high hell? When should I get the ball rolling? This is only the next, not the first, installment in my chronicle of financial neuroses for our trip. You’ll probably never get the key to unlock your stockbroker’s diary (or an admission of guilt anyway), so you might as well read a layman’s lament, right?

Lament be damned, all my queries were answered in an almost mechanical and sterile way by the representative on the phone. I’m sure that in these times, there is no shortage of questions about how to get your money out (in a panic, or not). So, it came as a great relief to learn that my money was coming to me, whether depleted by the market or not, whenever I make the choice to formally sever my ties with my employer.

Drat. There’s always a catch, huh. My initial plan was to take a leave of absence for 6 months (maximum allowed) so I could retain my health benefits and some semblance of employment should I choose to return. But when I started to look at the numbers (and COBRA), I shifted my point of view…Not to mention the staggering prices of some European cities warranting a second glance at cashing in my portfolio.

Since January, I have opted to stop funding my 401k and keep the money in a savings account. Now I have a chunk of change that shifts every time my company is lambasted by the press. If you only knew, you’d be uneasy about what to do, too.

After a few minutes of explaining the legal and tax ramifications, we got into numbers. Every statement, of course, was laced with “this is merely a quote, for instability in interest rates, as you know, is fairly common…” yada, yada. But things started to look up. My pension, as it seems, is now fully-vested (w00t), which means that apart from giving the government 20% of it, a nice chunk of change will come my way. Enough, in fact (based on my preliminary budgeting), that the pension alone may be all that fuels the first 3 months of our trip…”markets pending,” of course.

So, quit the job or not? I can tell you, there will be no surprise ending or existential crisis. After I hung up with the rep, I logged online to take another look at my portfolio balance.

Sitting like a pathetic sack of rotted potatoes, neglected and stinky, the pie chart representing my 401k (and future) beckoned to me:

Him: “Come on, man, think of all the good times we’ve had together.”
Me: “I don’t recall those times, actually. You look red and flushed. Like, really red.”

He shifted and writhed a little, trying to hide the thick redness of his decreased lines, sagging like the droopy jowls of a hound dog.

Him: “It’s not as bad as it looks. It’ll get better in time, like a fine wine!”
Me: “I prefer $2 wine from the corner store. You’re not winning this one.”

He huffed in protest.

Him: “You’ll regret this!!!!”

Yes, it was really that uneventful.

I looked around my dusty, dimly lit cubicle nightmare and thought about my job and the investments when the words of a one Biggie Smalls came to mind…

Me: “If I go, you gotta go.”

Sorry little guy, looks like your ass wrote a check that will be cashed.

-Adam

To cash in or not to cash in

Well, we all know (maybe) that selling off your 401k under normal circumstances is probably a less than intelligent thing to do. My parents berated me early on in my “professional” career about getting my retirement fund off the ground. And in 2005, that was a great idea. Times were good. I put away a sliver of my earnings (7%) and saw my company matching 100% of my first 5% (sounds more confusing than it actually is). Ah, yes. Those were the days.

Have you looked at your 401k lately? I have and it’s enough to consider therapy.

Maybe you’re smart enough to have kept your money out of the stock market. But for those of us in it, a lot of experts (read: people who have no clue) may tell you to weather the storm. Alright, I see the appeal and it sort of makes sense. Sort of. I have a chunk of change sitting there and it’s buying stuff up. Now that some stocks are so cheap, I’m buying up shares in a massive quantity while I sleep. So, of course the optimist’s view is one that espouses to wait it out–markets will return to a healthy state, and I’ll have a portfolio that’s thick and rich (literally). No need to get nervous nelly and sell it off. But as every annoying, yelling guy and gal on MSNBC will yell at you: “WE HAVE NO IDEA HOW LONG THIS IS GOING TO LAST!” Is it time?

Well, there’s the obvious hitch (of course)–we’re traveling the world for at least a year and this is a good chunk of money that could help us out. During this time, no money will be getting saved and more money will need to be spent. Where is all that money coming from? See my previous posts. But so, so much more could come from my juicy, tempting and fatally failing 401k fund, right?

I’ve actually stopped my contributions this year. That 7% I was throwing in? Yeah, well it’s going directly to my ING account instead. They seem to be able to hold onto it. I’ve lost more than 60% of my total portfolio value in the past 14 months. I just don’t care to throw more money away right now when the primary goal is, duh, saving.

So, I ask, what would you do in this situation? I’m still young (sort of, right?) and have plenty of time to start a fund back up if I indoctrinate myself back into corporate America (not likely). Is there harm? Well, I consider the government taking a third of it as harmful, but that’s just me. Apart from the inevitable tax nightmare, what else is at stake?

Weigh in, why don’t ya:

-Adam

_The Grown-Up’s Guide to Running Away From Home_ & savings goal updates

So, there it is. Wedged between the maps, “rough guides” and travel diaries on the shelves of my favorite travel bookstore, Get Lost, is The Grown-Ups Guide to Running Away From Home. Now, normally, I am not one for whimsy. If you can tell anything from my previous posts, I love a healthy dose of reality. But something about this book was begging me to pick it up and flip through (this was, of course, before I stumbled upon The Practical Nomad). After a quick skim, it seemed like this book was pretty relevant, and the price was right, too. Why the hell not?

Now that I’ve actually read the thing, I can say wholeheartedly that I still hate whimsy, and that this book was not even remotely penned for anything like what Mia and I plan to do. The author, Rosanne Knorr, seems more interested in letting people know how to continue their yuppie lifestyle–just on a villa overlooking a Tuscan sunset.

While she does address some of the practicalities involved with living abroad, many are dusted over with nary a concern for the harsh and necessary details. The guiding principle of this book seems to be, “with enough money thrown at it, it will work out.” This is not for the budget traveler. Now, the title may seem clear enough to you–grown-ups. Although only 27, I consider myself a “grown-up,” but much of the myopic nature of this book confounded me. The intended audience seems to be those suffering from a midlife crisis with enough money to bankroll a getaway excursion. Hardly any practical travel tips are discussed, in fact, a lot of the things Knorr suggests seem really expensive. A quick scan through the book again yielded no mentions of hostels. At times, the book comes across as a condescending, xenophobic how-to guide for being a dick in another country (I think this is already second nature for enough people, do we need to teach it?)

Don’t even get me started on the anecdotes (that must have been sent in by readers of earlier editions?) and how corny they are. One woman laments(?) how that they hated to leave behind all their furniture in states, but how nice it was that their new Moroccan home came fully furnished. Well, save for her pesky husband Bob, and how he just HAD to have his darn rototiller. “He can’t live without it!” Gag.

If you’re a disgraced AIG exec with money to burn, you probably already have this in your Amazon checkout cart. For younger travelers looking for more in-depth travel and relocation advice, keep looking. There’s better stuff out there.

Enough with my foaming of the mouth. Yesterday was pay day, and also teabagging tax day (apparently), so it’s a milestone for the piggy bank. Given that our planning has gone into overdrive lately, this is the first chance for me to strike a raw budget (have mercy, no Excel) and set some serious cash aside. I was surprised after crunching the numbers that I was able to stash away about 7% of my final savings goal!

The middle of the month is always a better financial time for me, since most of my bills come due at the end of the month. In the past, this usual excess of cash was a false buffer, one that usually evaporated with enough time (a week?). Saving money is a habitual act (must.not.buy.beer.) Once you start doing it long enough, it becomes automatic. I’m not fully automatic yet, but it’s getting a lot easier.

– Adam

Maximize earnings potential (or something)

Back when we started talking about our leave (oh, the faraway land of February), I made a general estimate about the amount of money we might need in order to support ourselves overseas for 9 to 12 months: USD$15,000. Mia and I were on vacation, visiting my parents in Florida, and to me, the whole idea of dropping out of our daily lives (map in hand) to take up travel was still a “maybe.” The money, I figured, would be sorted out sooner or later.

Of course, the $15K was only an estimate, and not one thoroughly informed by the intricacies or unexpected things world travel entails. I had to start somewhere, I guess, and that seemed like a good, round and terrifyingly hard to reach number. Now that I’ve had a chance to do some more extensive research, a better number for us to have would be a nice, even more terrifying USD$20,000. Some will argue that even that isn’t enough, but our plans for workshares and volunteering will come up in future posts.

After I left Florida and got home, I started sorting through my finances. Bills, bills, BILLS. Ack. What could I cut? (How about running for FREE, outside [weird] instead of in a gym for USD$65 a month?) What could I absolutely not live without? (The internet. Do I even need to explain this?) And where the hell am I going to find this damn money? (TBD.) I figured I would try to save at least $12K myself to lift some of the burden off Mia, who is in the midst of a disparate transition from college to this bleak work-world.

The bad news is, I’ve never been a good saver. Back when I was a Boy Scout, I did indeed earn the Personal Finance merit badge, but my Mom taught the course, and perhaps nepotism (er, joke?) allowed for my slack on the specifics of how it actually “works,” and prompted the slide into the financial tumult I found myself in a decade later. Racked with student loan and personal debt from a cross-country move (and several other questionable moves) and years of knowing better, but not doing better, I am faced with some serious issues.

My salary is good, and would be GREAT, have I none of the aforementioned. But frankly, the goal is too strong to let the equally irresponsible financial sector pin me down to grinding away for “the man,” just so I can make good on my debts (Up the punks!) Not that I plan on running away from them (down the punks!), or declaring bankruptcy (hardly an easy task anymore). Rather, it’s time to own up and figure out how I can maximize earnings to keep me afloat overseas while squelching debt at home. Yeah, I cringed after typing that last sentence.

Over the past few years, I have occasionally taken part in research or focus groups to earn extra cash. My casual participation would yield $75 here, $100 there, and always free pizza and soda. One time we got an advertising company to pay us each $100 and buy us pizza and beer (always better than free soda).

Now, more than ever, these little paychecks have me scouring market research groups’ sites and Craigslist looking for opportunities to voice my opinions on everything from cell phone service to hair gel. One thing I can guarantee–they love a talker. Get your gab on and you’ll be hearing from these folks again.

Keeping up on this kind of thing can be tiring, especially if your day job frowns upon you scouring the internet for other work. But if you don’t mind getting up early (before work, of course), and checking Craigslist, you might find the most opportunities. The Bay Area isn’t exactly rife with early risers, so I’ve gotten plenty of call-backs for focus groups from replying to ads as soon as they go up.

Maybe a year or two ago, I would have frowned or look down on this kind of hustle and bustle for cash. Nowadays, with our journey (and co$t) in clear view, I’m prepared to take on any extra task. So, I ask you, “do you need your lawn mowed?”

-Adam