My 2009 Shopping Hiatus

I've mentioned in a few posts that I plan to stop shopping (for non-essential items) for six months (January to June) because I feel that my impulse shopping is the biggest leak in my budget. I never spend a lot at one time, but I often buy myself little treats. For some people, food is a vice, for me, it's clothing and accessories. My small shopping splurges add up to a rather large amount of money, according to my Mint spending trends. I want to see more progress in debt repayment in 2009 than I did in 2008, so sacrifices must be made...sigh.

Rules:

1. I cannot purchase the following clothing items (with the exception of gift card purchases, I expect to get gift cards for my birthday): ~Coats ~Jackets ~Blazers ~Apparel ~ Shoes ~Accessories
2. Undergarments and work out clothing are exceptions to the no- shopping rule.
3. Household decor items cannot be purchased unless they are saved for and serve a purpose (seating or storage,)
4. iTunes downloads... (I can start trading music with friends if I get sick of what's on my ipod)
   
5. Books (with the exception of textbooks). I always get sucked in by cheap books on Amazon...case in point, the Twilight series.
   

Dry cleaning expenses will also be kept to a minimum by washing items that aren't extremely delicate by hand. Dry cleaning is also a large budget leak. I get really lazy with this sometimes. It's just so much easier to drop them off and have someone else launder/iron your clothing. I also plan to try to increase my income through some type of part time work during 2009. The most preferable method of doing this would be freelance writing or blogging. Any extra income made in 2009 will go toward debt repayment first and savings second. I'll give periodic check-in's of my progress on this blog. This sounds pretty easy now but could get difficult...I just saw all of the cute new additions to the Target Go International line this week...

My Christmas Spending

I didn't do too bad on my Christmas spending but I did go over my $200 budget. Before shopping, I put $200 on a Visa gift card as a safeguard to overspending but I still ended going over budget by about $150. In hindsight, I should have put $100 on the Visa card and then used cash for the rest of my gifts. I live near a great outdoor market that has vendors, artwork, food, and jewelry among other things. Many of the vendors don't use debit or credit cards like Visa, so I still had to go to the ATM and use cash for a few gifts. I like buying gifts like original art work, or hand made items because they are so much more personal than gift cards or items from large retail stores. I thought using a Visa gift card to track my Christmas spending would be easier, but it proved to be a bit of a pain in the neck overall. The card took 24 hours to activate and I was not aware of this until I was in line to purchase some gifts from Target, so I ended up using my debit card for those purchases also. Oh well, you live and you learn. I still had a nice Christmas and I think the gifts I gave were appreciated and will be enjoyed.

Rest In Peace Eartha Kitt (January 17, 1927 – December 25, 2008)

I hope I have even half of her stylishness when I "grow-up."

2009 - New Year's Resolutions

I still can't believe that 2008 is almost over. Overall, I'd say its been a good year. A few highlights of the year are:

• I discovered the PF blog world and actually started this blog in April.
• I started a new job in January (not so new anymore, I'll have been here a year in a few days...).
• I became more aware of what I spend my money on.
  
• I started graduate school part time.
• I became a board member of a non-profit organization.
  
• And if I'm honest, I spent way too much money traveling back and forth to Philly.

I have a long way to go, but at least I'm working toward some of my goals. I'm sure I could list about 10 more, but I wanted to stick with things that I can realistically achieve, so I don't feel like a failure at the end of the year. So here are my resolutions for 2009:

Personal

1. Take one non-family trip in honor of my 25th birthday.
2. Study as much as it takes to get good grades (minimum of a 'B') in my Spring 09 semester classes.
   
3. Exercise on a regular basis (gym, exercise DVD's, etc). I don't need to lose weight, but I'd like to build more muscle, flexibility, and upper body strength. I'm sure there are 10 year olds stronger than me at the moment...
   

Financial

1. Get Emergency Fund up to $3,000.
2. Pay off $3,000 in credit card debt.
3. Stick to my budget!
   
4. Shopping moratorium for first 6 months of the year (I will do a separate post on details).
5. STRETCH GOALS: (1) Get car fund up to $1,000. (2) Start contributing to a Roth IRA.
   

Career

1. Get a mentor and communicate with this person on a regular basis.
2. Get at least two freelance writing gigs.
3. Write/submit one grant proposal for non-profit (because I'd like to turn this into a marketable skill anyway).

Have you plotted any major goals to achieve in 2009?

Does it Make Sense to Cut My Landline and Use Skype?

I'm trying to cut the fat in my spending for 2009 and I am seriously considering cutting my land line and using Skype instead. Cutting my landline would save me about $30 per month. I only have the landline because my cellphone has terrible service in my apartment, so I need another phone talking option for when I am in the house. I get crystal clear reception just about everywhere else, my phone even works on the subway...go figure. I'm not switching cell phone carriers until my contract is up, because it seems like an unnecessary expense to pay to change it before then. According to their website, Skype has a plan where you can make unlimited to any phones in the US & Canada for $2.95 per month. This plan has no long-term contracts and no connection fees. Skype allows you to purchase a 12-month online number. An online number lets people call you from a regular phone at their local rates.

Does anybody want to weigh in on whether they think this is a good idea? Or have other suggestions?

My 2009 Monthly Budget

Here is my monthly budget for 2009 based on my income after taxes. My retirement account (403b) and health insurance costs are not included for this reason. But I get about 3% taken out of each pay check for my 403b and get a company match. I am still evaluating whether I will open a Roth IRA/or start contributing monthly to the IRA account I have from rolling over my 401K from my last job in 2009. I am leaning toward paying off my credit card balance first since I am already contributing some money for my retirement and have a few decades to worry about retirement anyway. I have the feeling that one of my personal finance gurus, Washington Post columnist, Michelle Singletary would agree with me.

I definitely want to start tracking my spending more closely and will strictly adhere to the budget as much as possible. Any windfalls I receive over the year will be split between debt payoff and savings. Money leftover from any category can be used toward another category or applied to debt repayment. I've gotten a little lazy in tracking my spending by relying on Mint.com. But I find that the categories don't always apply my money to the correct areas, for instance, my purchases at CVS are very rarely a health/medical expense, but Mint often puts them in this category. The best thing for my to do is track my money daily with receipts and use Mint as a back up and a way to easily look at all my account balances at one time.

I just used the percentages in my budget below, but will be using dollar amounts that I am over/under in each category when I track this at the end of each month starting in January. It's kind of disappointing that I can't really afford to apply more money to debt right now so I can focus on my savings goals, but I'd rather stay within my budget on a consistent basis and save what I can, than save too much and be short on cash for other things I need each month. When looking at my housing/utility category, keep in mind that I don't have roommates, so I'm not sharing the costs of rent/utilities with others.

So here it goes:

Charity - (1%)
Saving - (2.1 %)
Housing - (37.1%)
Utilities/Cell Phone/Renter's Insurance - ( 13.8%)
Food - (6.2%)
Transportation (Metro/Amtrak/Bus rides) - (12.4%)
Clothing - (1%)
Personal - (5%)
Recreation/Entertainment/Gym Membership - (2.9%)
Debts (Student Loans/Credit Card Balance) - (20.9%)

I've been tagged

Frugal Chick tagged me a while ago I didn’t forget, I just haven’t taken the time to come up with responses. Here are six interesting (very subjective use of the word) things about me:

1. I had a very brief stint as a figure skater at the age of 10 and won a gold medal in a competition at a skating rink in Hershey Park, PA.
2. I have a growing playlist of country music on my iPod. This would surprise anyone who knows me in real life.
3. I sometimes shop in the kids department of Zara and Target…hey if the clothes fit…
4. I saw my nursery school teacher last week and she remembers me though I haven’t seen her in years.
5. I regularly get mistaken for a high school student, I’m told I’ll appreciate this one day, but for now its just annoying.
6. I am at my third job in the two years I’ve been working, but don’t count my first job in conversation because I worked there for less than four months. I left to take a job that paid a little more.

I’ll tag:

Sallie’s Niece

Young Black and Prosperous

Budget Chic

Money Maus

Graduated Learning

MoneyMateKate

If you’ve responded to a similar tag, just come up with 6 more interesting things about yourself if you can.

Secondhand stores reap benefits of recession

According to this recent USA Today article:

"There have been many euphemistic labels applied to secondhand goods, including "gently used," "pre-owned" and "like new." But in the current economy, they have a new and candid label: "hot sellers."

As Americans look for ways to cut spending, they are scooping up bargain clothes, accessories, toys and furniture once owned by someone else. "

Buying items second hand is definitely good for the wallet in most cases, but it can also be good for the environment. I like looking unique and that is another plus to shopping second hand. I will be on the lookout for thrift stores in the DC area...that is after my shopping moratorium next year.

Photo: USA Today

Why Every Young Professional Should Volunteer for a Non Profit

Non profits that serve disadvantaged youth in urban areas is a bit of a growing passion of mine. I've donated my time to two organizations that have missions that involve this population in the two years since I've graduated from college. But I believe that all young professionals can benefit from volunteering for a non profit that serves a cause they believe in for the following reasons:

Gives you an opportunity to take on a leadership role you may not be privy to if you are a junior staff member at you full time gig. Since I have been working professional for less than three years, I am still pretty low on the totem pole in my day job. I succeeded in getting "assistant" out of my job title, but I still have a supportive role to my superiors. I am able to take on a leadership role I would not yet be considered for because of my lack of work experience for the non profit I volunteer for. I am currently a member of a board of directors of a non profit that two friends started in my hometown and lead a committee that has duties that definitely translate to applicable work experience.

Gives you an opportunity to add meaningful work experience to your resume. I have developed writing samples and lead projects for both of the non profits I have volunteered for that are now on my resume. Doing things such as leading a committee, planning events, writing media and marketing materials, among other things definitely belong on my resume. Whatever your skills are: writing, planning events, designing websites, networking, fundraising, mentoring or teaching youth, cooking...you see where I'm going with this, we all have skills that could be very useful to a non profit organization and could also help move your career along.

Offers opportunities to network with seasoned professionals...this could translate to a job opportunity. Whenever I have the opportunity, I chat up professionals that I meet at conferences or other settings and tell them about what I am doing for the non profit. Sometimes seasoned professionals can be inspired to donate time or money or even mentor you so you can make a greater impact to the organization or cause you are volunteering for. I believe that networking is about helping each other out, not waiting to contact someone when you need something like a job, for more info about networking, I would suggest reading the book, Never Eat Alone which I had heard about from Ginger over at Girls Just Wanna Have Funds a few months back. Build these relationships now and they could later translate to a job or introductions to other professionals.

Makes you feel warm and fuzzy inside. Making a difference in your local community or on a national or global scale can make you feel good about yourself. Giving back is a good feeling you don't just have to save up for the holiday season, you can feel good about giving back any time of the year. Yes, I could probably find freelance gigs that pay me to do some of the things I do for the non profits, but making money is not what drives me to do what I do, its getting that warm, fuzzy feeling that I am making a difference (be it large or small) in someone's life.

College May Become Unaffordable for Most in U.S.

According to this recent New York Times article:

“Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007, adjusted for inflation, while median family income rose 147 percent. Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families.

“If we go on this way for another 25 years, we won’t have an affordable system of higher education,” said Patrick M. Callan, president of the center, a nonpartisan organization that promotes access to higher education.

“When we come out of the recession,” Mr. Callan added, “we’re really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we’re one of the few countries where 25- to 34-year-olds are less educated than older workers.”

“The middle class has been financing it through debt,” he said. “The scenario has been that families that have a history of sending kids to college will do whatever if takes, even if that means a huge amount of debt.”

But low-income students, he said, will be less able to afford college. Already, he said, the strains are clear.

Although I did enjoy my college experience, the amount of student loan debt I currently have makes me cringe sometimes. I probably should have taken steps to lower my education costs such as: staying home and attending an in-state institution, working full time while attending school part time, being overall more vigilant in my scholarship search, etc. But you can't go backwards and I did enjoy experiencing another city though DC is not very far from Philadelphia. It seems sad that college is out of reach for so many Americans simply because of money.

Fashion Eye Candy I Have No Intention of Buying...

All of these items are from Top Shop US. One of these days, I'll make it to New York, so I can look around an actual store and not peruse their website. I have too many other things to pay for to spend money on clothing right now, but I can dream can't I?

December Goals

Here is how I actually did on my November goals:

1. Choose holiday gifts for my immediate family. I have a self imposed budget of $150 for gifts this year. I will load a Visa gift card with this amount and once its gone, I'm done shopping. This amount does not include my mother's gift which is also a very belated birthday present, so will be pricer than every other gift I purchase. I'm open to any home made gift ideas any one might have! –FAIL - I just didn’t have time to do this, I will just have to admit I am a procrastinator when it comes to Christmas shopping and do it at the last minute like I always do.
2. Purchase holiday cards for friends and family members and mail them. –FAIL – I plan to start sending out cards this weekend. But this may be the last year I do this. People appreciate the thought, but it wastes paper and postage is very expensive.
3. Register for Winter/Spring 2009 grad school classes after talking with my advisor. Price textbooks which will be purchased in December. – PASS – I did register. I need to talk to my advisor again though and make sure the class I want to take in the second session of the semester has no prerequsute I need to take during the first session.
4. Put in request for any time I will need off from work for the rest of the year. – HALF WAY – I put in my time for the Thanksgiving holiday, but I still have to see how many days I have left for the year. I’d like to take the time off between Christmas and New Year’s if I have enough vacation/personal days.
5. Go to the gym a minimum of once a week. There are a few classes I want to try out including this dance inspired workout called Zumba. – FAIL – But progress, I did go to the gym this month, but not every week and I still want to take a ZUMBA class.
6. Attend a minimum of one professional or networking event. Meet a minumum of at least three people at any event I attend and keep in touch with them (via email). - PASS
7. Formally ask at least one person I admire professionally to mentor me. Set up expectations both ways so this can be a mutually beneficial relationship. – FAIL, I have someone in mind, but I still have to formally ask, this will be a January goal.

Here are my December Goals, they are not as ambitious as my November goals. I want to feel a sense of accomplishment at ticking every goal off at least onece before the year ends:

1. Choose and purchase holiday gifts for my immediate family with budget of $150 for gifts.
2. Purchase and mail holidays cards.
3. Take at least one yoga, dance and spin class this month at the gym.
4. Set savings and debt repayment goals for 2009. My main focus for the first part of the year is paying down my Visa card and adding more to savings, but I have to set a deadline for myself. I did make my last payment for my Discover card this week! The balance was orginally over $1,000. But the large balance on my Visa card negates that accomplishment in my mind...
5. Decide when I will visit my father and stepmother in Florida in early 2009. Put in vacation request at work, If funds allow, purchase airfare.
6. Come up with definitive plan for a trip to take in 2009 in celebration of my 25th birthday…yikes!

I have many goals in mind (financial and personal) for 2009, but I'll wait until I formulate them to do a post on them.