Financial Hindsight is 20/20

I am getting a tad introspective in my last weeks of my 24^th year. I started thinking recently about how if I knew what I know now, I would have made some financial decisions differently in my younger years. I have learned a lot from my experiences over the last several years but financial hindsight is definitely 20/20. Here are a few decisions (some of which have been discussed on this blog in past posts) that I would have done differently if I could jump in a time machine and magically be back in 2002:

Attending a public college in my home-state, rather than a (semi) private one in another state (well District if you want to play with semantics).

At the age of 18, it was a big deal for me to go away for college, though I am only about 2 hours away from home. I didn’t really think about things such as the differences in cost of colleges and universities back then.

Opening a Roth IRA when I started working in college.

During my sophomore year, I had a friend in college who was much more financially savvy that me that told me she had a Roth IRA and contributed money into it that she earned while she worked during the summers. Before talking with her, I didn’t even know exactly what an IRA was, but she explained that it was a vehicle that you could invest money for retirement in. How savvy was she (and her parents who helped her open the IRA) to start investing in her retirement at such a young age. Considering that though I did save some money when I worked during college, a lot of it got frittered away on things I can no longer recall like club outfits and other expenses that seemed “necessary” at the time.

Taking on more diverse internship experiences while in college.

I also could have taken notice and followed in the footsteps of another friend (who was also in the school of communications at my college) that had internships in just about every facet of communications you could think of by graduation. Her resume was very extensive and deservedly so because she had been so diverse in her college work and volunteer experience. I on the other hand, had internships at corporate public relations firms. My internship experiences were great, but I could have done one or two more in say advertising or print journalism to round out my college work experiences a little more. Even if it wasn’t such a scary job market, having a diverse skill set and work experiences can only help you.

Living at home for the first two years out of college instead of living in a different city.

I was so antsy to be independent and start working that I immediately took my first job offer in DC after getting frustrated that my job search in other cities including my home-town was slower. In hindsight I realize that I will inevitably work for the next few decades and taking a few months after college to find a job and living home (while paying rent to my parents of course) would have been a wiser decision than taking up the considerable start-up costs it takes to live on your own while working for the first few years after college.

Not accumulating credit card debt.

Credit card debt is evil! It is much harder to get rid of it once you have it, like a mysterious food stain that you just can’t get out of your favorite pair of pristine white pants. Credit cards are great for rewards points and such, but only if you don’t carry a balance, which I unfortunately do. But I am serious about paying them off in 2009! It would be great if I didn’t have this debt in the first place though.

Taken measures such as working full time and attending college part time as a way to incur less student loans.

I have another friend who works at the college he attends full time while going to class part time. What an excellent idea, it would have been great if it had occurred to me a few years ago. I really enjoyed being a full time student, but I do not enjoy having more student loan debt that my annual salary. I didn’t know back then about that rule of thumb that your student loan balance should not exceed more than you will make in your annual salary.

But since I have not yet figured out how to travel back in time, I’ll have to chalk up my good financial decisions and bad ones and make sure they are good ones going forward.

Maintaining

I realize that I let the whole month of January go by without setting monthly goals and that is probably part of the reason why I have been so unproductive this month. Let's see what's on my list:

~My class (only taking one at the moment) is now underway and though we have not had any assignments or exams yet they are coming soon, so I need to hit the books hard starting...now. Any Microeconomics wizards out there?...I could use some tutoring.

~I have the goal of starting to do some freelance writing to bring in extra income but have not done anything toward that goal this month.

~The non profit could use some fundraising efforts such as grant research and writing.

~Haven't been to the gym since early January...There are other things but I will stop here.

On a positive note, I am still tracking my spending daily and am holding up on maintaining the shopping moratorium. I was however forced to purchase a heavier winter coat early this month because the one I had wouldn't cut it when we got that cold snap around the first of the year in the DC area. I only paid $32 for a wool black pea coat in Macy's. Since that was a necessary purchase I won't beat myself up over it too much. My cute but relatively light coat from H&M was not cutting in in this cold weather.

I will spend the next day or so formulating (personal and financial) goals for the month of February.

Blocking Out the Chill

My electric bill has slowly been creeping up as the cold weather came to the Mid-Atlantic region at the beginning of the year. I decided that it is such a pain to budget when you don’t know what your utility bill is each month that I would call the electric company (called Pepco here in DC) to get on a budget plan. With the budget plan, Pepco averages out how much I pay over the course of the year and comes up with a flat rate that I will pay each month. This will definitely help me to not go over that spending area in my budget. I also did something that I should have done weeks ago to cut down the chill in my drafty apartment, I covered my windows with plastic and can definitely tell the difference. I can go just about the whole summer without turning on the air conditioner except for when I have company, but I can’t stand being cold in the winter.

Buy Obama Inauguration Paraphenalia to Stimulate the Economy?

It could be because I live in the District and the excitement about the upcoming inauguration has reached fever pitch. The whole city is turning upside down to prepare for the mass of thousands expected to start coming to town in a few days for the inauguration and festivities surrounding it. Is it just me, or is every one from fashion designers to retail stores hawking Obama-related paraphenalia? From Urban Outfitters, to Obama Metro cards to Etsy artisans, to designers like Diane Von Fustenberg, to this visual artist I've seen on my weekend jaunts to Eastern Market with original Obama portrait paintings; it seems like every one has jumped on the bandwagon to buy/sell Obama related items.

Darn my shopping hiatus...as much as I'd like to do my small part to stimulate the economy with a memento, I have temporaily banned myself from buying clothing/accessory items for the next six months. Oh well, any one who is planning to/has already purchased mementos, just make sure it fits in your budget!

Cutting Monthly Bills? Turn to the Web

This article in the Wall Street Journal caught my eye:

"During the boom years, technology advances were generally viewed in terms of how they allowed us to do new things.

Check out this new gadget - it lets you play a video game while skiing! It lets you update your Facebook page while scubadiving! It lets you Twitter while visiting the john! Awesome!

But there's another side to technology that maybe hasn't got enough play, but is likely to as the economy gets worse.

New technology also lets you do all the same things you always did, only cheaper.

And it's not just a matter of comparison Web sites like billshrink.com that help you cut costs.

TV Web sites like Hulu.com will let many people save money by canceling some of their cable TV package. High-speed wireless Internet, from 3G to new WiMax, should let them save on home Internet connections. (Xohm, the new WiMax service, is priced well below cable- though at this point it has only been launched in Baltimore and rollout to other cities is taking time.)

Voice over Internet lets you dump your landline, and maybe even cut back on your cellphone. Google Talk lets you make video phone calls to family, friends or colleagues around the world for free."

I'm all about cutting my monthly bills so more money can be applied to other categories in my budget. When I get a faster computer sometime this year, I would like to use Skype or Google Talk (in lieu of landline) as well as cut my cable service and use sites like Hulu.com, but for the moment, I'll stick with my landline and cable service.

Can Adopting a Pet Fit in My Budget?

I have been strongly considering adopting a kitten at some point this year. I think I would enjoy having a pet and cats are independent enough that having one wouldn't impede on my work schedule or social life unlike other types of pets like dogs as much as I love them. But I keep thinking about how like a person, pets come with unexpected costs and could throw a monkey wrench in my budget.

There are upstart costs to consider like a litter box, toys, scratching post, cat brush, initial vet visit, room deodorizer (because I can't stand walking into someone's house and you can smell the cat before you see it!), food & water bowls...I'm sure there are more but that is what comes to mind at the moment. There are also fixed regular costs like food, kitty litter, boarding (if I go out of town for vacations) and vet visits. If my future cat were to have health problems, which usually come with age, those would have to be factored in also. Hmm much to consider. Maybe I should start a pet fund and reevaluate my budget in a few months? I REALLY want to eliminate as much credit card debt as possible this year, can I do this and afford a pet?

Any thoughts from those that have pets? Has having a pet gotten in the way of sticking to a budget?

Photo: http://www.littlefolkspuzzle.com/catalog/1350-30PCFLOORPUZZLE-KITTEN.JPG

Tuition Refund Check Will Pad My Emergency Fund

I expect to get a refund check for my two spring semester classes sometime after my class starts next week. I was initially going to take two classes per session, but decided to only take one class per session, hence the refund. It should be a little over $2,000. I was going to use this money to purchase a laptop, which is technically an education related expense, because my instructors/professors do sometimes email me (mainly about class cancellations and reading assignments). I also need to be able to check my student account via the school's website. I REALLY want a Macbook. But, I have decided that I will put $2,000 in my emergency fund and hold on to my ancient laptop a while longer. Any money leftover after applying $2,000 to my emergency fund will go toward my credit card balance, so I will have an extra payment this month.

If I Could Shop...

I'd buy one of these coats from Nordstrom's junior department...sigh.

Calculate Your Financial Comeback

I currently have a very meager investment portfolio (retirement account) because investing is not my focus right now, but for those who want to know how long it will take for their portfolios to rebound, check out this tool I found on The NY Times website.

New Year, New Resolve

I have never been one to think that you have to wait until the beginning of the year to make a resolution to change something, but the fresh start that a new year offers is always a good incentive to make positive action toward your goals. I've listed my main goals/resolutions on this blog and have a few others still floating around that I need to flesh out. On the first of this new year, I've started tracking my daily spending again. I always manage to do well at the start of the month with this and then fall off by the end of the month. But I will keep it up this time and really see where my money goes. I have already mentioned that I will not be purchasing any clothing items until June, so I need to focus on not letting my spending creep up in other areas, so I have money to do things like travel more in 2009. I'd like to go to Florida to visit my Dad and Step mom within the next month or so and also go on a birthday trip in March (New York most likely), so I need to decrease my spending to make these first two trips happen happen.