Tuesday, September 27, 2005

Getting prequalified - Part 1

Well, I did it. I got prequalified and I put down the 10% on my condo. My savings account looks horribly deflated. You can just see it trying to cover itself up with the less than 10k remaining in an effort to still look marginally respectable. The poor thing.

On the other hand I am now the proud owner of something called a Purchase Agreement. I have 15 days to make trouble if I want to back out but since I can't make much sense of the fine print I don't see how I can do that. Good news is that I am done paying for now. I was told it would be 10% now and then 5% in 12 months and the remaining 5% at closing but I guess I got my wires crossed somewhere because turns out it is 10% now and 10% at preparation. Good because I don't think I can write another big check like that anytime soon without having a heart attack.

Going through the pre-qual process was interesting though. I knew it wouldn't exactly be as simple as walking into a bank and asking them to hand over $320k (maybe if I had a gun? just kidding) but I didn't anticipate how many things I would need. Employment history, financial statements, income vs expense breakdowns. Credit report and FICO score I expected but paystubs? Thankfully, I had a great mortgage broker who helped me make a list of things I needed and didn't even bat an eyelash (I am guessing from the calmness of her voice) when I called her up at 11pm last night frantic that I couldn't locate my checkbook.

Monday, September 26, 2005

The Art of Persuasion

For the greater part of Thursday and Friday I was vacillitating between letting the eBay guy keep my furniture AND the money or taking up Madame X's suggestion and showing up at his doorstep with a baseball bat. But I didn't know how effective the last would have been so for the most part I was leaning towards letting it go. And then, all of a sudden, I got really annoyed with myself. I don't know what triggered it. The news? Supernanny? Hurricane Rita and the repeat devastation of Gulf Coast or the memory of the looters during Katrina? Whatever it was it made me decide that letting it go was not an option. If I did that I would be enabling bad behavior and this guy could go on to bigger and better crimes and become the next crime boss of America!

Okay, so my inner drama queen is probably exaggerating the impact this one transgression could have had on society but I really felt I had to do something. I had already sent the guy two emails, asking if he had changed his mind or if there was a crisis in his household, even offering to go pick up the furniture free of charge if he wanted and he never replied. Then I tried calling him. The first time he cut me short saying he would call me back and the second time he never picked up. So, finally, Saturday morning I called him up and calmly said he could pay me or go to jail. I didn't raise my voice. I just kept repeating, "Class C felony. Mandatory jail sentence." Within hours the money was in my PayPal account.

What really upsets me about this whole thing is that as long as I was being nice I was getting nowhere. Anyway, maybe if Microsoft doesn’t work out I have a future as a collections officer. Or maybe not. I don't want to go through that again. But then, once I open my own business won't I have to deal with stuff like this all the time? I am planning to put in some custom furnishings and a granite countertop in the condo and chances are that I will come across builders and carpenters who don't always do what they promised. So who knows, maybe this was good practice for the future. For now though I think I will stick to buying and selling on eBay.

Thursday, September 22, 2005

The cost of being naive

is $300. At least in my case. I posted in Raised: $340.65 and then some that I made $300 through an impromptu furniture sale. I did make the sale i.e. we agreed on a price and the guy removed the furniture from my place. But I was a little hasty in counting my chickens ... I never saw the payment.

In retrospect it probably wasn't the smartest thing letting a strange man walk out of my home with $1000 worth of stuff but I had no reason to distrust him (apart from the fact that he was a total stranger) So he didn't have $300 of cash on him. Who does? He did offer to go get it out of an ATM. And since he was going downstairs anyway it made sense that he take all the stuff down with him. He was going to load it all in his truck and then go get the cash out of his ATM and come back.

Ha! 12 days and counting. The ATM must be a long way away...

I have to figure out what to do about this. My trust in humanity is on shaky grounds.

Monday, September 19, 2005

Moving on up

So last Friday was my last day at my old job. The details aren't that important but suffice it to say it wasn't the best work environment in the world and I am glad that's behind me.

Initially I had planned on going to California for a week to celebrate before joining my new job but for a number of reasons (mainly the 3 weeks I am planning to take off at the end of Nov for my trip) I decided to just go ahead and join this week. A couple of personal finance related updates:
  • The company shares that are part of my offer has a 5-year vesting schedule which means I won't see any of those shares in a while. I was feeling a little guilty for asking for the 5k cash sign-on bonus (I'd somehow missed completely that the offer included 10k worth of shares so thought the 5k would be the only sign-on bonus) but now I feel a little justified because of this.

  • I also collected a few nice goodies Friday as part of my fairwell party at work. It was a total surprise. Things have been pretty bad here and I have maintained my composure, taken on additional work and helped other people deal with a number of things so I knew I had some supporters but wasn't expecting a big fairwell. I got a lunch, a $25 Macy's gift card, a CD burned by a coworker with everyone's favorite songs, a card signed by the whole department and an iPod Nano. Yes, that's right. An iPod Nano. Everyone chipped in for the nano as I understand. I was deeply touched and almost felt bad for leaving. Almost that is. I do feel bad for leaving behind some great people but not so much for leaving behind all the organizational crap that plagues corporate America more often than not. I am hoping Msft will be different. Guess we'll see.

So that's it. I have a busy week ahead of me but I also have to get two things done:

1. Get prequalified for the condo. I have an agent and I have looked into rates but need to make this official. It's a little scary.

2. Book tickets for my India trip. Not so scary, just expensive.

Thursday, September 15, 2005

Panic

I had a moment of utter, blinding panic this morning. I woke up and thought, "Crap, I bought a 400k house!" Yikes!

The demand in downtown Seattle has far outpaced supply and the trend seems set to continue. Plus, I bought below current cost and I can always sell it and live in a smaller house if that's what I want. This was a strategic decision, not an emotional one. If I had gone on pure emotion I probably wouldn't have bought it because of the high sticker price (by my standards) but it wasn't an emotional decision and that gives me an edge. Scared as I am right this freaking second I just have to keep reminding myself that.

Wednesday, September 14, 2005

Condo decision

My dream home is a Frank Lloyd Wright house in the middle of a lush green forest. I can just see it in my mind. Everything from the clean sharp lines to the spiral staircases to the leaded glass windows and the dark shellacked floors and the forest outside... But until I find a suitable location to do justice to Wright's genius, and the ghost of my favorite dead architect to come build it for me, I have to content myself with cute little cubbyholes in space that offer unimpeded views of the majestic Mount Rainier. Come to think of it, it's not such a bad deal. Mount Rainier is just as beautiful as any work of architecture, past or present, and the view, generally, is free.

Yes, I went for the condo. Several factors, mostly financial, decided me, but no less important was the fact that once finished it will be a) the tallest building (tallest residential building for the fact-checkers) in Seattle and b) have the most stunning view of the mountains from the roof garden. I know that doesn't exactly sound like the most strategic decision ever made but don't worry, that was only the cherry on top of the icing. My decision was cool and calculated and financially motivated. That said, if there wasn't even a small personal incentive for me, something to make me catch my breath and feel a quickening of the pulse, would I have gone for it? Probably not. Why? Because I know myself. I need life to be exciting.

But, this isn't about my many shortcomings. It's about journaling my financial progress this year. So let me jump to the 3 main money factors that cinched the deal for me:

1) I get to lock in the current offer price of 399k. Similar condos in the area are listed for 500k. Even if the much-promised bubble burst rolls around in the next 18 months, prices will have to drop by more than 20% for me to lose money in this deal.

2) I mentioned running some calculations in my first post. What I did was to figure out my loss or gain from renting vs buying and then comparing the two for the 30 year, 20 year, 10 year etc periods for both the best and the worst case scenarios. The calculations are in 3 linked excel spreadsheets which I will try to post later in case it's useful to someone but for now, here's the simplified math:

Loss/gain by renting = Future value of investment - total rent outlay where future value of investment is calculated as downpayment $ + monthly contribution equal to the difference between monthly payment & rent till the difference becomes zero, compounded annually at 10% and total rent outlay is calculated as total rent paid over time with rent increasing 3% annually.

Loss/gain by buying = Future value of home - total home outlay where future value of home is calculated at 7% appreciation/year for best case and 20% loss then 3% appreciation for worst case and total home outlay is calculated as mortgage payments (including interest) + condo fees + property tax - tax break for the same time period.

In the 30 year calculation the difference was noticeable. Even in the worst case example, buying put $120k extra in my pocket compared to renting. In the best case example it was well over $200k. It will take me 3 to 7 years to break even after I start making mortgage payments and this still bothers me a little but in 7 out of the 10 total scenarios I ran, buying was substantially the better move over renting.

3) The fact that this is a pre-construction condo allows me to buy it with a lot less money than I would need for one that's ready for occupation. In my case, provided I get pre-qualified, I can put down as little as 10% now and then 5% a year from now and lock in the 399k price. Plus, getting pre-qualified now means I also get to lock in a lower interest rate in the event interest rates rise in the next 18 months.

So, there you go. Now I am the proud owner of a home that hasn't been built yet! Well, almost that is. I have to get pre-qualified and I have 15 days to do that. After that I have 7 days from the signing date to back out if I want to so technically, I can still pull out but I don't plan to.

Tuesday, September 13, 2005

Sexying up Seattle

Seattle is getting sexy. Or, at least, naked. (which if you ask any of a number of people, is as good as sexy any given day)

Here're the gory details:

Seattle's 17-year long moratorium on new strip clubs ended this Monday under a federal court ruling. Now before all you strip club enthusiasts start shuddering in shock and dismay let me assure you that we have strip clubs. We just haven't had any new clubs open in the last 17 years. Part of the city's reluctance to grant new licenses was motivated by a desire to protect its lands from the further spread of this form of unholy hedonism. Unfortunately, since they failed to specify which pieces of land were more worthy of such protection than others (also known as zoning laws) the federal judge ruled against this violation of everyone's right to free speech aka the right to get naked for money.

The suit was bought against the city of Seattle by one enterprising Mr Robert Davis whose application to open a new strip club downtown (right in my neck of woods) was rejected March of 2004 upon which he promptly turned around and in the true spirit of American litigiousness, sued the city. He is seeking $5 million in lost-income damages + another $50,000 in attorney's fees.

Nickels' (that's our mayor for non-Seattlites) office denies financial liability but has no plans to appeal the court's decision at this time. Instead, they are seeking to enforce a 4-foot rule whereby lap dancers will be forced to stay at least 4 feet away from the customers at all times. Seattle officials are rightfully concerned about what a lack of moratorium or the 4-foot rule might do to the city which is the only place in the municipality that still allows lap dances. Club patrons and performers on the other hand are rightfully concerned about what this will do to their pleasure and income-potentials respectively.

Seattle is a pretty laid-back, liberal city. In fact, even people who support the 4-foot rule confess to being uncomfortable being "the moral police." They feel the decision is necessary, however, to preserve harmony and the comfort of the city residents.

But enough on that. What I really wanted to point out was the damages that guy is seeking. $5-million for 1 year's worth of lost income! Wow! I also heard somewhere that some of the strippers are concerned that the 4-foot rule will make their tip income go down by $20,000 - $30,000 per year if not more.

Clearly, I am in the wrong profession (although I may be able to rectify that given that they are planning to open the club not too far from where I am)

I wonder what this would do to property prices though? Won't people from nearby locations flock to the city to partake of the new delights? On the other hand, since they will mostly confine their activities, I think it's safe to reason, within the bounds of the strip clubs, maybe I should be looking not at condos but possible club sites... Something to think about.

Monday, September 12, 2005

Made: 1 condo decision..

It took a lot of soul-searching and enough math to have pleased all my dead math teachers but I think it was worth it. I believe I made the right decision and more importantly learned a few things in the process. But before I explain what my decision was, what factored into it and what I learned from this exercise I want to see what other people would have done in my shoes. So, here's a little poll for my 2.35 adoring readers. Go crazy. (You have to scroll down a bit)










What would you do if you were in my shoes?
I'd go for it!
Hmm...I'd probably keep looking.
Are you crazy? I'd never pay that much for a pigeon-hole in the sky.
I don't know. Why are you doing this to me?
Why don't you just tell us what you did.




Free polls from Pollhost.com

Found: 1 parking ticket..

3 days after the due date. So proud of myself right now.

To Buy or Not to Buy - Part 3

Money Turtle and Anonymous commented in To Buy or Not to Buy that the condo price wasn't too bad for Seattle. It's true. Similar condos in Seattle are going for 500k. Some of the preconstruction units are even priced as high as 750. And condos in the same building go up to a million or two. But how does it compare to what I have now:

My current apartment is a 654 sq ft loft/studio with a 3 by 8 deck and a great view. It has a nice long closet and a separate laundry area with full washer & dryer and some built in shelving for all my cleaning supplies. The bathroom and kitchen are both huge and have tons of storage space. The kitchen also has beautiful hardwood floors and all appliances (refrigerator, oven, dishwasher and microwave) + free emergency maintenance on everything. The actual sleeping/living area is only 287 sq ft so as you can tell most of the sq footage is eaten up by the kitchen, deck, bathroom, laundry room and this one long rather unexpected entrance hall that currently serves as my own personal art gallery, but that's not that big a deal except when I have guests. And even then, we manage.

I am currently on an 8-month special where I pay $950 for rent and parking after a $200/month discount. Similar apartments nearby go for $1300-1500.

Sunday, September 11, 2005

Raised: $340.65 and then some

The condo decision has been a big distraction and I had almost forgotten about my resolve to raise the $340.65 extra I spent in honor of my first Coldplay concert. Almost that is, but not quite. Here's part 1 and part 2 of the series in case anyone's new to this epic saga or needs a refresher. This constitutes the concluding portion of what has undoubtedly been a monumental enough challenge and accomplishment to deserve full 3 posts on the subject.

To quickly recap, I spent $587.65 in preparation of the concert (which demanded, simply demanded, new bag, shoes, pit tickets and lipstick), did some math and realized I went over budget by $340.65 and instead of spending time kicking myself for giving in to temptation, a previously favorite pastime of mine, decided to take the more constructive approach of recouping the loss.

As of today here's how much I have raised:

Sharebuilder - $50
Gas card from Great Fun online - $19 ($20 - $1 for signing up)
Sony card - $100
eBay - $108 ($134 - $26 shipping & fees)
Impromptu furniture sale to the nice man who came to pick up his eBay table - $300

It went something like this: Nice man looks around and says, "Nice place you have here." MMB looks around, points and says, "Those chairs are for sale. Throwaway prices. You want them? How about that picture too? It'd look smashing over your new table you know!"

I was on fire. I think the guy bought all the extra stuff because he was too taken aback to protest! Anyway, so now my total is $577, $236 more than I set out to raise. Come to think of it, if I raise another $10.65 then it would be like the Coldplay concert and the bag and the shoes etc were free! That's exciting. I feel like the energizer bunny. I could just keep going.

Yes, I know, I am getting carried away. It was so much fun though. I had a project to raise money. It was short, measurable and completing it was a quick win. Maybe I should try this approach with other things. Simply wanting to save more doesn't inspire me but to save more or to raise money for something specific acts as a tremendous incentive. Maybe my next goal would be to raise money for yoga classes. I think I have gone as far as I can bend on my own.

I haven't signed up for magazine subscriptions yet. For one thing, I have been working mad hours ever since I handed in my notice and for another, I have had a number of different things to preoccupy me. Then again.. Someone once told me that there are two kinds of busy people in the world. Those who are always complaining they never have time and those who say "I'll make time." I fall in the second group which means whenever I use lack of time as an excuse I know that there's something else stopping me. And in this case, I know what it is. I am still convinced that the moment I sign up for certain magazines I will change my mind about wanting them and then I will be stuck. I just need to do it.

A couple of quick money-related updates: My microwave died on me this morning. It was beeping plaintively last night but I thought that was only because I forgot to press "clear off" or something. And then it fell into this sullen silence which in my naivete I thought was a good thing but that turned out to be a false sense of comfort because now it's dead. Dead, dead, dead. And given that my culinary skills rely heavily on my ability to heat things I am looking at spending a lot of money eating out this week.

The second piece of news is this: Right after being hit with the above I came across something to cheer me up. Turns out my MS offer package includes a stock award of 380 units. I am sure the MS recruiter must have mentioned it but I never noticed until I was going over the joining package today. At first 380 didn't sound like much but hey, that's 380 units of MS stock and it's in addition to my 5k sign-on cash bonus! Not bad.

Still no condo decision.

Friday, September 09, 2005

To Buy or Not to Buy - part 2

My last post focused on the financial aspect (mostly) of the decision to buy the Seattle condo. This post focuses on the other pros and cons. But before I go there I should explain how I picked this condo in particular.

Since my decision to buy a home I have viewed 2 houses and 4 condos, 3 of which were in the downtown area. I have looked at listings of over 60 houses/townhomes/condos all told. Every condo I found was at least $300k or more, even going up to a $1 million, and these are only 800-1100 sq ft units. House prices are better but I didn't find anything nice under $360k. And by nice I mean safe neighborhood, well-maintained with low ongoing cost of maintenance and reasonably well connected. The most attractively priced house I found was an 850 sq ft townhouse in a quiet street off an expressway for $367k. The nearest grocery store was 2 miles away and there was nothing, not even a newspaper stand, within walking distance. It was in a great school district, had a yard and a nice 2-car tandem garage (yard and garage are not included in the house sq footage) but since I don't have kids and only 1 car those didn't seem like good enough reasons to go for it.

Then I heard about this condo through a coworker. It's 950 sq ft. 1 bedroom, 1 den, 1 & 1/2 bathroom, hardwood floors, high ceilings and an overhead loft big enough to tuck away a lifetime of junk or serve as an alternate sleeping area. All this is blueprint of course but it sounds nice and I get to pick the layout, the colors, the faucets and the wood finish. Plus, it's in the heart of downtown and similar condos there are valued currently at around $500k or more so it's a good price.

Pros:

  1. I can decorate the walls with impunity
  2. I can get a pet that is bigger than a goldfish without having to pay a monthly "pet fee"
  3. No guest restrictions (other than my own)
  4. I can start enjoying the tax breaks that my landlord is now kindly enjoying on my behalf
  5. More space. I can turn the den into a home office and start a second career or maybe turn the overhead loft space into a makeshift guestroom. Maybe I can put down some hay a la Heidi
  6. Great view of the Sound (don't knock it, it keeps me out of therapy)
  7. Good price for a Seattle condo with similar specs
  8. And of course, building equity instead of sinking money on rent

Cons:

  1. Too permanent. What if I want to become a trapeze-girl and join the travelling circus?
  2. No nice people at the other end of an emergency line to come fix my faucet or change the light bulbs in the dark scary corridor. I will either have to fix things myself or pay someone to do it
  3. High monthly cost. Variable monthly cost. No nice low fixed number to live by anymore which could take some getting used to
  4. The hassle of selling or renting if I decide to move. Potential financial loss if I move within the next 3 years
  5. Downpayment...ouch
  6. Hasn't been built yet which means I am still paying rent for the next 18 months and many things can happen between now & then
  7. And finally, I have no one to fall back on financially. On the contrary, I have people depending on me. If I can't make mortgage payments for whatever reason I could lose everything and that'd affect not just me but my family.

Continue reading: To Buy or Not to Buy - Part 3

Thursday, September 08, 2005

To Buy or Not to Buy

Every year Seattle has this architectural tour called the Seattle Street of Dreams. The planning starts with the site selection following which a select list of builders and architects are invited to participate. Once finished, the "Street of Dreams" showcases 4 to 6 new homes built specifically for the event that exemplify the latest trends in building, interior design, landscaping, technology and architecture. Typically the entire street is blocked off and people drive to designated off-site parking spots from where they can catch a shuttle to the location. On site, the Street of Dreams provides restaurant and coffee bars and of course, the splendour of dream homes that can resemble anything from a French chateux to an English manor house to a futuristic high-tech home to a fairy tale castle. The event, along with showcasing some of the most exciting designs of the year and inspiring the imagination of the masses, also raises considerable amounts for the Children's Home Society and the Make A Wish Foundation.

Earlier this year I went to the Seattle Street of Dreams with a couple of friends. It was right after my resolution to cut cost on going out. As it so happened, partly through planning and partly through luck, I spent two consecutive weekends in the company of my best friends, laughing up a storm, discussing our romantic lives (or the lack thereof), and fantasizing about our dream homes, on less than $10-15 per outing. The first weekend was spent at the Bellevue Arts & Crafts Fair and the second at the Seattle Street of Dreams. What impressed me most about the homes were not their sizes but the decor inside.

Why do I bring it up now? I have looked through a lot of house/home/condo listings since my first post about buying a home. I have even been to see a few. And I have come to the conclusion that if it's a choice between sq footage and location & style, I choose location & style.

I know this decision will raise quite a few eyebrows. An 800 sq ft condo in the heart of downtown or a nice house with a 2 car garage and a yard a little farther away for the same price? I am sure more people will say the house but for me I just think the condo is a better choice. Less maintenance, fewer worries and easier access to amenities not to mention the view of the Sound. In fact, given the choice I will probably always choose to live in a smaller apartment close to amenities rather than in a scary big house in the suburbs. This has nothing to do with wanting what someone else has or keeping up with the Joneses but maybe it has something to do with being a single working girl big on style and short on time.

So, with all that into consideration, about halfway through August I decided to change my house search tactic and focus exclusively on downtown and nearby condos. And within the week found what I was looking for.

It's a preconstruction condo project walking distance from Pacific Place, Seattle's ruling shopping mall, close to Pike's Place Market (the place that inspired the management book and video series, Fish!) and various cafes, delis, newspaper stalls and restaurants, with an onsite fitness center with sauna and a spa, a welcome/concierge service, guest suites (I love this), business center with conference rooms (which should offset some of the maintenance cost on the condo owners hopefully) and a rooftop garden.

The view is also pretty nice, even if you are on one of the lower floors.


The price of this luxury? $399,000 for a 950 sq ft 1 bedroom with den which really isn't bad for downtown Seattle although a little more than I wanted to spend. If I decide to buy it I will put 20% down and my monthly mortgage payment will be $1679 + condo dues & property tax around $500 for a total monthly payment of $2,179. But that's only half the picture. I ran best case and worst case scenarios. Best case assumes a 7% appreciation per year and worst case assumes a 3% inflation-paced appreciation after an initial 20% drop in home value (to compensate for any exaggeration in current price)

I ran both scenarios for 30 yr, 20 yr, 10 yr, 5 yr and 3 yr periods, i.e. assuming I sell the house at the end of 30 yr, 20 yr, 10 yr ... In the sell price I factored in a 10% loss for worst case and market value (at 7%/year appreciation) for best case. The outcome? In the best case scenario, as long as I hold on to the condo for 3 yrs or more I am definitely better off buying than renting. In the worst case scenario, the break even point is somewhere between yr 5 and yr 10. That is up till yr n, where n is between 5 and 10, I am losing money on the buy option but after that I start gaining.

The catch? (Or two catches really)

1) Coming up with $2179/month in payments or $1756 after the tax break. My current rent is $950 so that'd be quite a jump. I will have to stop my ESPP contribution just to be able to make the payments and my saving rate will drop by 35-40% at the very least. Plus, if I sell in the next 3 years I stand to lose quite a bit.

2) The condo isn't actually ready for occupation until Feb 2007 and who knows what will happen to the housing market between now & then. (On the flip side, this could be a very good thing if prices keep rising + it has the added advantage that I don't actually have to start making mortgage payments until 2007)

I can pay $2179/month. Question is, does it make sense right now?

Continue reading: To Buy or Not to Buy - Part 2

Things I should be doing this week

1. Booking tickets to Bangalore, India (my coworker is taking care of the package tour to the A&N islands from Bangalore. He sent out several package links and we picked one that we all liked. He's going to get everything negotiated, ordered, booked, printed out, filed and we just pay the travel agent. For the tickets to Bangalore we are each on our own because we are all travelling on different dates and that's where I really need to start shopping for deals soon)

2. Making a decision on the Seattle condo - due 9/12 (My decisions tend to be either spur of the moment or very deliberate. I have been pouring over the condo papers for a week now and have a whole sheet of pros and cons with an honest to goodness cost-benefit analysis to boot... And I am still no closer to making a final decision. If I can't make up my mind by the 12th then I will let the condo go and get my deposit back)

3. Looking for the lost traffic ticket - due ? (I don't know. I can't find it)

Wednesday, September 07, 2005

Music for Hurricane Relief

Music for Relief, a charity organization initiated to help disaster relief, has teamed up with American Red Cross and is hosting a number of live concerts to raise money to support the victims of Hurricane Katrina. All donations go directly to aid the victims and their families.

On Saturday, September 10th, multiple live concerts will air on MTV, VH1, and CMT to raise donations and awareness for the Hurricane Katrina disaster. The live performances will be held in New York, Los Angeles, Atlanta and Nashville, featuring Ludacris, Green Day, Gretchen Wilson, Usher, Alicia Keys, John Mellencamp, Dave Matthews Band, Rob Thomas, David Banner, Linkin Park's Chester Bennington, and more. To make your donation or to check out their site click on the banner below.

Tuesday, September 06, 2005

Beautiful


I found these pictures online as I was searching for some information. This is where I am going in Nov. Well, actually, I am going to Bangalore first for a coworker's wedding but after that a couple of other coworkers and I are going here: The Andaman & Nicobar Islands









Somewhat random tidbit that is somewhat relevant: Last year's Tsunami killed over 70,000 people across coastal India, Sri Lanka and the Andaman & Nicobar islands and left another 1+ million devastated. The economy of the three areas is still recovering.

Monday, September 05, 2005

Budget vs Actuals (revised)


Whew! That's taken care of. The $91.52 gifts was actually miscategorized under Books, CDs... That was easy to fix.

The missing concert tickets were a little harder to find. I made some changes to the way my budget was set up originally and added some custom categories last month which is where the problem arose. Turns out Money doesn't always recognize custom categories properly. Or maybe I am doing something wrong, I don't know, but here's what was happening: I had two phone bills being doublecounted under both utilities and phones and the new "Going Out" custom category under entertainment was not being included in the report. I should have realized something was wrong with the utilities number. The only two utilities in that category are electricity and water and there's no way I could have spent $392.7 in just two months. Not in the summer anyway (no heat bill).

Of course, once I figured out that was happening I had a new problem. The two phone bills came to $174.9 but the concert ticket was only $157. If I simply took out the extra $174.9 from utilities and added the "Going Out" category in the report my new Actuals YTD total would have been: 8935.28 - 174.9 + 157 = 8917.38. I knew that couldn't be right because the first total, $8935.28, was correct so that left $8935.28 - $8917.38 = $17.9 unaccounted for.

A quick review of the last two month's expenses, fortunately, offered an explanation for this. I had marked the $17.90 for the 3 credit scores as "Credit Scores" and it wasn't being included in the report. Once I moved that to the "Misc" category and reran the report the problem was quickly fixed.

So I still haven't balanced a checkbook yet but hey, at least I can balance totals now.

Uh-oh

I just noticed a couple of discrepancies. The $157 I spent on the concert tickets should show up under entertainment but they are not there. The $91.52 I spent on gifts last month is also prominently absent from the gifts category.

Strangely enough, the total is correct. $4087.11 (July total) + $2740.17 (August total) + $1500 (pending Aug transactions) + $608 (insurance -- I prepaid in June so this doesn't show up in any of my monthly expense reports but it counts against this year's budget) = $8935.28

How can that be?

I have a BBQ to run to so I don't have time to fix this. Guess it'll have to wait 'til tonight.

Budget vs Actuals

Saturday was a lot of fun. I know it probably wasn't the sanest thing to do but sanity is overrated anyway. That said, if I thought for a moment that my taking off like that would hurt anyone, or that I would have to cancel plans or stand up someone or renege on a commitment, I wouldn't have done it. As it happened I didn't have any firm plans for Friday night or Saturday, no one to call in particular and I have never been to Canada before so I thought why not.

Rabindranath Tagore, Indian poet and novelist extraordinaire, said we travel far and wide seeking the wonders of the world but fail to notice the beauty right outside our own homes. So, before I go to India and the untamed islands of Andaman & Nicobar this Nov I thought I would go see the inner harbour of Victoria.

Not that my decision Friday afternoon was quite so well thought out. It was something along the lines of ... Ooh, I can go to Victoria! And then I was off to Victoria.

But as Jimmy Buffet said, yesterday's over my shoulder and I can't look back for too long. So, I am back and ready to assess the damages.

I checked into a hotel on the harbour Friday night and got a late check-in rate that was pretty attractive. I also spent most of Saturday walking around. Although my poor feet took the hit I did save a bundle by doing this because I didn't have to buy any more gas + I found some nice, tucked away places to eat that weren't too expensive. In the end I spent $196.79, only $40.19 more than what I had spent by Saturday morning. Not too bad for a moment of impetuousness that lasted a day and a half.

On the ferry ride back I made a resolution to run a budget vs actuals report.

* Budget total applies to budget year 7-2005 - 6-2006.
**Forcast and Actuals are for the months of July & August only.

Budget vs Actuals analysis:

My phone usage spiked in Aug because my cousin was visiting and she made some long distance and international calls from my phone. This should self-adjust in the next few months. (for reference I use a prepaid digital service where I deposit a certain amount every few months. When the money runs out I can't make long distance or intl calls from home anymore. This allows me to control my monthly usage. However, a small setback here is that it throws off monthly expense numbers a little. e.g. it didn't show up in this month's expense report because I had deposited $100 in July and I was still using that balance in Aug)

My dining/going out expense was also higher than budgeted but my grocery bill was low and as long as I am coming under budget in the food category as a whole I am not too concerned.

I think I also did okay on clothes & shopping. Most of what I spent ($1394.96 to be exact) was on home decor and I had budgeted/forecasted $1600 for it. On the other hand the "clothes" portion of my forecast was lower but again, as long as I come in under budget I am not too terribly worried. Just have to make sure I don't overspend every month.

Books, CDs and DVDs on the other hand is quite another matter. I do buy a lot of CDs, I buy a lot of books, I buy a lot of DVDs. I don't know what I was thinking setting only a $60/month budget for it. Maybe I should divert $20 from my Monthly Mad Money category to this one. The MMM category is for magazines and other little things I occasionally pick up. Once I switch to magazine subscriptions I will actually have more left over here.

I also didn't anticipate donating $500 this quarter but then I didn't anticipate Katrina. That's money well-spent anyway.

Another good thing, I came in way under my skincare/makeup etc budget despite buying the Chanel lipstick. For the most part this is because I am sticking with my resolution to use up what I have first before buying anything else.

On the whole I think I am doing okay because I am within my budget. The only exception being the misc category which is where I put all the bank late fees/finance charges because I didn't have a place for them. There should not be anything under misc next month.

I didn't include my trip this weekend in the above. That will come out of the vacation & trips budget. I am using my remaining miles + cash to book the Nov vacation and I do not anticipate spending more than $12-1300 out of pocket tops so the $1700 budget can accomodate the $196.79 I spent this weekend and still leave me with $203.21 for future trips.

Saturday, September 03, 2005

I see the bad moon rising

I am in Victoria, BC. I was driving home from work yesterday, tired, exhilarated, sleepy, listening to a song on the radio and thinking of gas prices. The weekend stretched ahead of me filled with pleasant thoughts of old friends and new romances, of berbecues and sales. And then I was turning back towards my office, printing out the directions to Port Angeles and 4 hrs later I was here. I am not crazy, just a little unwell..

What I packed for the trip:

me
green crinkled silk cami from Target, blue jeans
light cream cardigan
under..things
1 wallet
1 purse
1 laptop bag
1 laptop (but not power cord)
Cell phone (but not charger)
Work id badge
A pack of gum (half finished)
1 hair pin
key ring with keys
2 receipts from earlier this week
credit cards
checkbook
driver’s license
Pen
Notepad
Hairbrush
Smith’s rosebud salve
Tarte blush stick
Adidas sport deo spray
watch
black kitten-heel pumps
a folded napkin with someone’s phone #
some loose change and $39 in US bills
pearl earrings
printout of driving directions to Victoria

and a whole bunch of CDs in the car.

No, I haven’t forgotten the people in New Orleans or my commitment to saving, or the condo in Seattle that I have to make a decision on soon. I haven’t forgotten about the presentation due next week or the fact that I need to renew my Norton anti-virus or the laundry sitting on top of the washer at home. I haven’t forgotten about my parents’ mortgage or the items I put up on eBay or that rent is due tomorrow. I haven’t even forgotten pythagoras’ theorem, Newton’s third law of physics or the symbol of Molybdenum. I just have something else to do today.

The price of my impairment so far:
$39.6 gas + $40 ferry + $60 hotel + $10 food + $5 toothbrush etc
$154.6 total

Thursday, September 01, 2005

Monthly Review & Net Worth Report - August 2005

Net Worth as of 9/1/2005


This month's baseline is from 8/1/2005 (for the month of july).

I have mixed feelings about this month's performance. First off I saved more than last month which is good but I am still not gaining fast enough to reach my 45k net worth increase goal (start:165k, target:210k) by next June. I am on target as far as my savings goal goes. I had calculated my ability to save to be about 31-35k from salary and I am on track despite going over on a few items this month. Where I am lagging behind is in my investments.

The fact that my investments are down is not surprising given the market this month. What's probably surprising is that they are only down $73.20 from where they were a month ago given that halfway through the month they were down by as much as $1000. But that's a small consolation since it's making me fall behind on my goals (I had hoped for a better investment return to help me get to 45k).

Still the market goes up and down so guess I just have to find other ways to make up for the deficit while I wait for it to climb back up. I do have a sign-on bonus coming but at the same time I won't be getting any new bonuses in a long time. As far as I know, Microsoft gives out their yearly bonuses in Sep for the prior fiscal year and being that I am joining in Sep I won't be eligible this year. My current company on the other hand gives out bonuses in Oct and since I am leaving in Sep I won't be getting that either. Guess you can say I didn't quite think this through as far as timing goes.

Anyway, on the whole I am actually within budget on most of the categories and that makes me feel good.

What I spent this month:

Household (rent & utilities) - $1127.85
Transportation (car payment & gas) - $371
Food/going out - $350
Entertainment - $262.55 ($157 concert tickets, $76.04 CCR, $29.51 cable+Netflix)
Shopping - $463.95 ($172 Coach chelsea optic demi bag, $232 BCBG shoes, $59.99 LR top)
Personal/haircare/makeup etc - $26.65 (Chanel lipstick)
Gifts - $91.52 ($65 at Sephora for my cousin + baby stuff for my little nephew)
Misc - $27.81 ($9.91 bank charges, $17.90 for the 3 credit scores -- the reports were free through annualcreditreport.com)
Magazines - $18.84

Expenses = $2740.17
Taxes = $2089.14
Total = 4829.31

In addition to the above, I have two pending transactions (both made 8/31) totalling $1500 that hasn't posted yet at the time of this entry. If I include those then the savings numbers aren't quite as attractive:

Expenses = $4240.17
Taxes = $2089.14
Total = 6329.31

But these are in my budget and there will always be some pending transaction or other so as far as my monthly net worth review goes I am going with what the records show on that date. The pending transactions will be accounted for in next month's net worth report.

I don't know if any of this makes sense to anyone but it makes sense to me. That, I think, is my biggest gain because until now I have always doubted my ability to manage money. I can do better but the fact that I can actually talk somewhat lucidly on the subject is a small victory.

Some highlights for the month of August:

401k is up $183

Brokerage and Roth are down $73.20

Interest income $227.7 (heh! I earned more in bank interest than through my investments)

Finished decorating my apartment and came in $200 under budget (this isn't reflected in the expenses because most of the purchases were made in July but essentially I spent $200 less this month than I had budgeted for)

Food cost is way down (from $600 per month to about $300) thanks to brownbagging and giving up caramel frappuccinos and other general sugary addictions (well, not entirely but who wants to be completely sin-free)

Paid too much for the handbag, shoes and the top. Not good

Did not buy any new shampoos, scrubs, body lotions etc despite having to walk past The Body Shop twice. Very good (trust me, this is no small accomplishment)

August score: B+

To do for September: Return Quicken (incidentally, I didn't include the money I spent on Quicken because I should be getting a refund), finish raising $340.64, shop for magazine deals, book tickets to India (and of course, shop for the best price).