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.

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!

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!

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.

Putting Your Money Where Your Mouth Is

A week ago, I got an email invitation from a friend via StickK.com. 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 StickK.com, 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 charity...as far as I know.

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.

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.

Pay Attention to the Math

I know, I know, math is a lot of people's least favorite subject, but as we know in personal finance, it can be pretty helpful. Unlike what we did in school, the skills required are pretty basic, and it'll give you the satisfaction of knowing that you're not getting ripped off. It's important to be able to make quick calculations on the spot for price comparison. Moreover, it can be helpful to know whether something is as discounted as a retailer claims it to be.

A few years back, I noticed a math error in Saks Fifth Avenue's advertisements (Off 5th to be exact). The company added the original discounted percentage to the additional discount percentage for the total percentage of discount. For example, an ad claimed that you'll receive 20% off of something and get an additional 10% off for a total discount of 30% off. That's simply not true! It's a total discount of 28%. I know it's not a significant difference (although if you're purchasing something from Saks it might be...). Those advertisements disappeared for a while, but they came back recently. So keep your eyes open for these false claims.

Being the Odd Man Out at Work

I wrote about the peer pressure I felt when I decided to not go on a partially subsidized company "bonding" trip in my A Different Understanding of Budget post a few days ago. It made me a little uncomfortable to have to turn down the opportunity. At the same time, I also wondered if it was a good career decision. Since I had to pay for part of the cost (ski equipment rental, lift tickets, gas, etc.), I felt justified not attending. If cost was not factored into the decision though, I believe not going would have been somewhat of a negative career move.

Why? First of all, it was the inaugural group bonding trip (partially) paid for by the company, and it took some lobbying for it to finally happen, too. Also, from previous posts, you may know that I work for a small startup of less than 15, which made my absence that much more noticeable. During my decision making process, I can't help but wonder if not going would make me seem like I wasn't being a team player.

When Trivia Isn't So Trivial

Okay, today's blog post is devoted to me gloating. That's right! I'm super proud of myself because I saved someone hundreds of dollars by knowing somewhat of a random fact about state vehicle laws in California. I'm no lawyer, but I do keep an eye out for economic changes that might make my wallet fatter one day. Well, I guess it paid off. I didn't make myself richer, but it sure feels great helping someone out!

Recently, my co-worker came into the office late because he had to take his old car to the shop after a failed smog check. He had recently bought a brand new car and was trying to sell the old, barely functioning one to someone for a little under 1000 bucks. That was before he failed the smog check. Now, he has to either fix it or sell it at an even greater discount. A repair would probably cost him between $400-$1000, depending on the mechanic and cost of parts.

A Different Understanding of Budgeting

In the beginning of this year, the CEO of my company announced that every quarter, our small startup of less than 15 people will set aside a budget to partially subsidize an activity for all of us to "bond." In February, a ski trip was planned for this very reason. It took me a long time to decide whether to attend or not, but I ended up not going. The main reason was my discretionary budget. Although the company subsidizes part of the cost of food and stay, I'd still have to pay $25. On top of that, I'd have to pay for lift tickets, equipment rental, and gas. It hardly seemed to be worth it since I would have for sure exceeded the fund.

I was only 1 of 4 people who didn't go on this trip, and was pestered by questions of why I was not attending. Talk about peer pressure! Well, for the most part when I told my co-workers that I couldn't work it into my budget because of the additional cost of lift tickets etc., they readily accepted the answer. But one of the people I gave that response to proceeded to ask me: "Isn't the point of a budget to spend it?" Hmmmmm...I guess I never really thought of it that way, but I must disagree.

Age Discrimination in Retail and Services

This is something frustrating I encounter very often. I look young for my age (mid-20s), so people who don't know me often assume that I'm a college student. That's fine and all, if it just means that I get carded more often. Turns out, somewhat logically, people also assume that because I look young, I also have less buying power. Because of this, I find myself receiving less help in retail stores or get talked down to when I do receive services.

The examples that stand out the most for me are at financial institutions. I often get representatives who talk to me condescendingly or assume that I don't have much to save/invest. I had even been skipped over in line at Bank of America so the rep can help the old couple who came in after me while I sat there and waited for another 20 minutes.

What Luxuries Would You Give Up?

MSNBC's Life Inc. blog recently posted the result of a survey showing a list of "luxury" items or services that are deemed untouchable by Americans. So which luxury item/service can most of us not do without? The internet, of course! 81% of people surveyed indicated that internet services are untouchable followed by 61% for basic cable and 42% for haircuts and coloring. I must agree with the internet category. If it weren't for the internet services I receive at home, it'd be much harder for me to maintain this blog! But I'd consider a lower speed option in order to save money.

I looked at the survey data a bit closer to compare the answers for people between 18 and 34 years of age (Gen Y and some Gen X) to the rest of the age groups. When asked whether they've made any cuts in the spending categories listed, the least amount of 18 to 34-year-olds answered yes. Furthermore, the highest percentage of people in this age group indicated "untouchable" for 26 out of the 36 expenditures listed.

March Budget Sum Up

Another month, another $100 discretionary fund. Well, I actually started this month in the red. Why? If you remember my dilemma in February, I ended up deciding to sign up for another month of boot camp (2, actually. I'm continuing in April). It set me back $127. I was almost inclined not to include it as discretionary spending seeing that the line between need and want here is blurry for me. To me, whipping myself into shape and working through an 18 month plateau is a need, but in the spirit of full disclosure, I ended up adding the cost anyways. It’ll also motivate me to find savings elsewhere.

The $127 turned out to be a disappointing investment. Not because the class isn't good. If it wasn't I wouldn't have signed up. The reason it was a disappointment was because I got sick for 2 weeks, so I wasn't able to attend half of the classes in March. I'm not beating myself up over it, though. Let's just count it was an "unforeseen circumstance." Life is full of surprises. Now I'll just have to make sure to take care of my body, and hopefully, this episode doesn't repeat.

The good thing about being sick though, was that I didn't go out much which resulted in the lack of chances to spend money. Excluding the boot camp, I spent a total of $84.47.

Here's a breakdown:

10 Commandments of Pulling April Fools' Pranks

Happy (early) April Fools! I was reminded of an old survey showing that April Fools' pranks in the office are frowned upon by a high percentage of marketing executives. Granted the survey was conducted last year, it's still interesting to see the results. I mean things can't have changed that much in a year.

I work at a startup company in the San Francisco Bay Area where the culture is more T-shirt and jeans than suits and ties. Yes, there is a hierarchy, but it's not strict. Our day-to-day interactions are very friendly for the most part. My point is that jokes are well received in this environment. I guess I never really encountered a setting that disapproves of harmless jokes. In college, pranks or "hacks" were unofficially encouraged by the school. It was seen as a creative outlet. Once in a while, you'll see cars being stacked onto rooftops or an extra door added to a random part of the hall way. I once barricaded a friend's door by constructing a "brick" wall made of snack boxes.

They’re all in good fun, but if you're thinking of pulling a prank, there are some ground rules you should abide by to prevent bad blood between co-workers. Here are 10 commandments of playing April Fools' pranks everyone should consider:

CD Laddering

I wrote a post about certificate of deposit (CD) a few days ago and mentioned a strategy called “laddering.” It’s a common and effective strategy for maximizing your savings. Basically, it's splitting your money into a few groups and opening CDs with different term intervals.

Laddering is useful in two ways. For one, it's a good method to maximize interest. It also makes your assets more liquid because you have the maturity dates of the CDs staggered. The longest term CDs tend to have the best rates, but that also means your money is locked in for the longest. A 5 year CD, for example, may pay 3% in interest as oppose to 1.05% for an 18 month CD. However, interest rates could go up during that 60 month time period. By spreading your assets, you give yourself more flexibility.

$15 Amazon Gift Card Winner Revealed!

Finally, the time has come to reveal our winner. Thanks to everyone who subscribed to the blog and spread the word in the past two weeks.

Okay let's get to it. Drum roll please!


..............................


The winner is..........

Millionaires and Reality TV

I have to admit, I get a kick out of watching reality TV. Shows like Survivor, Top Chef, or The Amazing Race bring out the competitive side of me. It's like watching a sports game where you find someone or some team to root for. You also get a "behind the scene" look at their processes and strategies for winning. Of course, I don't mind being able to laugh at terrible decisions or stupid remarks that are blurted out either.

That said, some reality shows really make me cringe. The Real House Wives series, Millionaire Match Maker, The Hills, etc. show case the excessive lifestyle of the rich while creating celebrities out of a bunch of none-deserving people. For some, the enticing part of watching the shows is their ability to ridicule the "celebrities" featured. Sadly, it seems like more viewers actually attempt to emulate the irresponsible behaviors displayed.

How a Certificate of Deposit Works

This is the 5th post in the Bank Deposit Account 101 series.

When I first heard about "CDs" in the same sentence as banking in high school, I was super confused. Ummmm...what do compact disks have to do with saving money? If you're as puzzled as I was, don't worry, I'm pretty sure most people have the same reaction. The abbreviation actually stands for Certificate of Deposit.

A CD is a deposit account offered by banks or credit unions that usually pays out a decently good amount of interest compared to your average checking and savings account. Of course, a higher rate of return for your money comes with a catch. This kind of savings vehicle is called fixed term or time deposit, meaning that you have to keep your money in the bank for an agreed period of time. The term can range from 3 months to 5 years. In general, the longer you leave the money and the larger the principal, the higher your interest will be. Jumbo CDs, those with a minimum deposit of $100,000, receive some of the best rates out there.

The Importance of Parental Influence

This is kind of weird to admit, but I didn't know that you can OWE money on your credit card for more than a month at a time until I was a teenager. Before that point, I always thought you spend what you can afford and pay it back in full at the end of the month (I guess you would call this a charge card). Okay, now that I've admitted that, you may think I'm not too bright. Or you may think that our educational system should focus more on personal finance. One of those statements is true. Yeah yeah, take it however you want, but I insist my thoughts were heavily influenced by my parental unit. So forget what it says about me. The real question should be what's that say about my parents? It could mean a few things:

1. They're extremely responsible credit card users.
2. They wanted me to understand the value of hard-earned money before I learn about debt.
3. They didn't tell me the whole story by explaining to me more clearly the full purpose and intention of credit cards. (Euphemism for the lying, I suppose)