Wednesday, May 11, 2011

Boston Trip Sum Up

Wow, I feel like I need a vacation from my vacation! I got back from Boston late Sunday night (well, I technically got home early Monday morning...), and have been feeling absolutely exhausted since. Apparently I can't stay up late like I used to! But of course you don't want to hear me complain; it's time for me to report the "damage" from this trip.

I had always really only accounted for the airfare and hotel portion of travel and not pay much attention to cash flow while I'm traveling. This time around, it's the perfect opportunity for me to get a better understanding of what/how I spend during my trips. As I explained in my last post, I promised myself to only go on this trip if I didn't have to pay for airfare and housing. It worked out, so my entire focus was on where my money went while I was in Boston (and at the airport).

I came up with a very rough budget of $200 before the trip. It was kind of a worst case scenario situation. I estimated 10 bucks per meal for 4 days and assumed that I'd eat every meal. That's $120. I left myself another 80 bucks for transportation, drinks, and other miscellaneous spending.

Turns out I overestimated by quite a bit. I spent a total of $148.49, about 75% of my budget. After coming out of the airport terminal, I put $5 on my Charlie Card for use on the T (subway) and buses for the next few days. Instead of taking a cab, I rode the T to my friend's place. However, I was too tired to do the same on the way back, so I took a cab. That set me back by $32. As predicted, the rest of the money went to food and drinks. I didn't eat every meal I budgeted for, nor did I shell out $10 for each meal. Lucky for me (and my wallet), I managed to get some free food out of organized reunion events. It turns out my traveling habits are very similar to how I usually spend my discretionary fund. I ate multiple small meals (and coffee, of course) and shared food with friends in order to maximize my time/budget for socializing. This way, I still had some money left to go out at night and buy a few drinks.

Now that I know what my spending patterns are like while traveling, I’ll be able to budget my two upcoming trips better. Hopefully, this will help me save more money in the future.

Monday, May 9, 2011

Boston Trip Budget

Hey guys! I didn't have time to load this before I left for my trip, so now that I have "down time" and internet access, I can post it. Please note that this budget was established before the trip. I'll report my results ASAP!

If you've been reading my blog, you'll know that I've been planning a total of 3 trips this year. Two of which are reunions to see my friends; the other one is to attend to a wedding. In order to travel without going broke, I came up with a monthly discretionary budget of $100. The intent is to set a limit I can base my spending off of. If I can manage to do this for even just a few months, I'd be able to save a good amount of money for traveling and still leave some cash in my savings.

It's been 4 months since I implemented the plan and finally, the time has come for my first trip. This trip takes me back to my Alma Mater in Boston, MA. It's a weekend to reconnect with old friends and meet/network with older alumni. However, because I'll see some of the same people at the class reunion in July, I was kind of iffy on whether to go or not. After a lot of thinking, I promised myself to only go if I can avoid paying for the biggest expenses of traveling to Boston: flight and housing.

I managed to find a way to receive enough mileage points on United's Mileage Plus program to exchange for one round trip air ticket (I'll share how I did it in a later post). As for housing, having graduated just a few years ago, I still have quite a few friends in the area. When I decided to try to make this trip happen, I let them know and asked whether I can crash with them. Within a few days, I received confirmation of several places to stay for free.

Compare to finding free flight and a place to stay, deciding on an amount of money to budget for the rest of the trip seemed harder. When I made travel plans in the past, I didn't really keep track of how much I was spending. I mean I know how much I paid for flights, hotels, and other forms of transportation, but I had never really tracked how much I spent on everything else related to those trips. So now I can only guesstimate the damage to be $200. I came up with this number by budgeting about $10 per meal. I'll be spending a total of 4 days away, so that will set me back by around $120, assuming I eat every meal. I left $80 to use on drinks and other miscellaneous expenses such as cab fare, souvenirs, or anything else that may come up. This time around, I'll be more active in noting my own habits for future references and improvements. Hopefully, I'll spend less than I budgeted for!

Wednesday, May 4, 2011

April Budget Sum Up

First off, I want to apologize for slacking off a bit this past week. I've been feeling pretty tired lately, and before I knew it, it's May already! Crazy. Anyways, it's time for my April $100 discretionary budget summary. Because I did a lot of resting on weekends instead of going out this month, I managed buy 2 new shirts and still come out below the budget. Most of the cash spent were on coffee and other beverages (seeing a pattern here?)

Another reason why I was ultra careful with my fund this month is because I was looking forward to my trip to Boston the next few days. The fact that I know I'll be traveling means that I wanted to save as much as I can in April for that purpose, even if it's a separate budget. That's another thing that I have become aware of when it comes to budgeting money: mental accounting. It's basically a tendency for people to create categories in their mind, thinking that money from different sources can be used differently when, in fact, they're all "your money." For example, someone may spend his tax refund freely while being extremely stingy with his salary from work. At the end of the day though, his net worth is based on the collective amount he has, no matter the source. WellHeeled wrote a great detailed explanation of the concept on her blog a while back; I encourage you to go check it out.

For the month of April (excluding boot camp again) I spent a total of $72 even. Here's a breakdown:

  • $33.82 on coffee
  • $34.42 on other food/beverages
  • $3.51 on socks
  • $0.25 on parking

Besides this discretionary fund, I've decided to start a fitness budget. After weighing the cost and benefit of boot camp and other exercise activities, I think fitness is such an important part of my life that it deserves its own attention. This budget will include gym membership, classes (like boot camp), race registration, gear, and equipment. I'm not sure what amount to set this to though. Right now, boot camp is costing me $127 a month, but my rock climbing gym membership that's currently on hold is $55 dollars per month. I'll spend some time thinking this through and report back. Any suggestion is welcomed!

Friday, April 29, 2011

Luxury Brand...For Kids

The Stanford shopping center is one of my favorite places to find ridiculous extravagance. On any given weekend, you'll find at least 10 dogs being pushed around in baby strollers and 3 others wearing designer shoes. No joke. The parking lots are filled with Mercedes, BMWs, and Porches. Well, you get the idea.

What I find the most unnecessary though, are the luxury clothing stores for children. There's a range of offerings from "lower" priced Gap Kids to Crew Cuts by J.Crew to the Burberry Kids Store. Yes, Burberry Kids. I've never been inside, but from having an idea what things cost in their adult stores, I can deduce that it must be pretty ridiculously expensive. Grownups spending that much money on clothing is hardly justifiable as is!

Little children don't know much about luxury brands and how they are different from non-luxury goods. These kinds of knowledge are taught by parents or other adults around them. You can claim that the material used in brand name items are better and may last longer, but why in the world do you need children's clothing to be long lasting anyways? Kids get their clothes dirty and grow out of them in a few months. Paying thousands of dollars for an outfit under these circumstances doesn't seem to be worth it.

Monday, April 25, 2011

Putting Your Money Where Your Mouth Is

A week ago, I got an email invitation from a friend via At first, I didn't know what to make of it. The email said that this friend needed my support. Ummmm...I'm glad I seem like the supportive type, but with what? After an interesting discussion with this friend about, I gladly joined the weight loss "support team."

So what's the deal with this site anyways? Well, have you ever had a goal that you'd love to achieve but can never actually find enough motivation to go through with it? I'm sure we've all encountered this. (I've been meaning to do a triathlon for over a year now...) Well, this site gives you that extra kick in the behind you may need to accomplish this goal.

Here's how it works: after registering for the site for free, you'll publish your goal. Then comes the incentive part. You'll have to decide on an amount of money to lose if you don't accomplish this goal. For example, my friend has a weight loss goal of losing 1lb a week for 11 straight weeks. For each week this doesn't happen, it'll cost 10 bucks. In addition, you can name a referee to keep you honest and recruit supporters to cheer you on.

And where does the money you lose go to? It can be paid to friends and family or even a charity. But by far the worst thing that can happen to your hard earned cash (and perhaps the best thing for accomplishing your goal) is to have it go to an anti-charity. What's that you say? It's a cause that you feel strongly against. For example, if an avid supporter of walking barefoot can designate his money to be donated to American Soles*, a shoe charity, if he slips up.

Interesting concept. I recently listened to a Radiolab podcast about psyching yourself into not doing something by committing to a cause that you absolutely cannot stand. On the show, a woman quit smoking cold turkey by telling her friend that if she ever smokes again, she'll have to donate money to the KKK. She hasn't smoked since. StickK offers something similar: an announcement of the goal, a referee and supporters (the smoker's friend), as well as financial incentives and an anti-charity (donation to the KKK).

According to StickK's own website, people are 3X more likely to achieve what they set out to do using this method. They should know. The company was started by 3 Yale professors familiar to the field of behavioral economics. The last I checked over $7 million are currently on the line through the site. For now, I'll stay a "supporter" of my friend. But maybe in the near future, I'll jump on the bandwagon in order to get things done!

*American Soles is not an actual far as I know.

Sunday, April 24, 2011

What Prompts You to Change?

With gas prices at $4.25 a gallon in my area, everyone's talking about driving smaller vehicles, hypermiling, carpooling, etc. So I started to wonder what can really change people's behavior when it comes to handling money. Perhaps more importantly, how permanent is it?

The last time gas prices went off the chart, Americans collectively reduced the amount of driving we did and stopped buying SUVs. Some thought it was going to trigger a movement towards green energy as well as a realization for us to stop consuming so much oil. That consumption reduction didn't last long though. Gas prices lowered and we pretty much went back to our old ways.

Wednesday, April 20, 2011

Ways to Do Good for Others and Yourself

We all want to do what we can to help others, but sometimes it may seem like our time and budgets won't allow for it. I can think of a few ways to be efficient by combining contributions with ways to benefit yourself.

Every once in a while I catch myself hoarding things. It's less of a problem now, but I used to buy things compulsively more often. As a result, I ended up with things that I didn't need but were barely used. Because these items were usually new, I didn't like the idea of throwing them away. So when I can't deal with the clutter of stuff anymore, I tend to donate them to Good Will or similar organizations. It's really the best way to clear up your own space and help others at the same time. Do check each organization's website before you donate to make sure you're not adding to their burden by giving them things that they don't need. If you itemize on your tax return instead of taking the standard deduction, you can even write them off.