Wednesday, April 30, 2008

May Day

May 1st used to be fun.  We danced, we took the day off and went on picnics.  Schools had May Day celebrations.  This photo was taken by my father when he was teaching in 1958.  To me, this looks like a better way to spend a spring afternoon than studying math.  Now what do we do? Work? Laundry?   

May Day was always celebrated in my house while I was growing up. My mother would have us pick flowers from the yard, place them on our neighbors' doorsteps, ring the bell and run away.  I don't do this with my neighbors anymore (a full-grown stranger leaving stuff on your doorstep is a little creepy and my current neighbors are likely to emerge with handguns).  However, it is a small occasion to do something nice for friends a family.  I plan to leave flowers on the doorsteps of my mother and with two friends, with an unsigned "Happy May Day" note.  (Running sounds like exercise, so I think I'll just leave the flowers, not ring the bell.)  This is a sweet, old-fashioned tradition and it only costs me twenty minutes of my time.  Math homework is important.  Laundry is important.  But when an occasion like May Day arrives, its nice to take time away from the everyday to make friends and family happy.  Everyone likes to get flowers; it makes their day.

May Day has a longer, more significant history than just this tradition.  If you want to read more about its origins, I suggest looking at School of the Seasons by Waverly Fitzgerald.  If you want to see more about its political significance, I suggest a timely article about recent Los Angeles May Day Protests or an overview of its significance to the solidarity movement here.

Tuesday, April 29, 2008

Where the heck is my money?

About four years ago, I got a job that paid quite a bit of money.   For some reason, I still ended up with zero at the the end of the month.  I took the advice of every television financial advisor--I started tracking my finances; I began using Quicken. I diligently downloaded and classified each transaction then I ran a report. It looked something like this:

This was useful. I could now precisely identify how horrible a person I was and what bad spending habits I had. So, I took things a step further and created a budget:


Fortunately there was an easy solution: quit using the software.

When I began using it again, about a year later, I found it could be useful. First, it was easier than my check register. Second, it popped p annoying little reminders about due dates, which seriously reduced the number of late payments. And third, it really did allow me to see where my money was going.

The budget was useful too. I discovered early on that I could always meet my budget. I simply adjusted it when I overspent. For example: I went $200 over budget on dining. I looked at my dining expenses—a birthday part, two work-related dinners, a date, and six fast food stops. Except the excessive fast food, this did not seem unreasonable; therefore, adjust the budget. Be strict, I told myself, only bump it up $150 (I didn’t really need that fast food). Eventually my budgeted expenses exceeded my income, but my budget report looked great.

Obviously, this did not work for me, so I began using what Quicken terms “classes.” In addition to assigning budget categories to each item, I added class. I used the following:

• Necessary: i.e. groceries, power, water, car repairs
• Goal Oriented: Expenses that fed my goals. i.e. necessary work clothes purchases, gifts for family, new computer and software
• Worth it: Unnecessary expenses that were worth it. i.e. vacations, ice cream
• Convenient: Unnecessary expenses for convenience. i.e. gardener, cable
• Total Waste: i.e. fast food, ATM fees, late fees, sodas from gas stations

As I went forward, I began making myself specify what goal the money was spent on by creating specific goal categories “Goal Oriented-Family,” which was useful when the Goal Oriented section began to be a justification for all spending. I also added subclasses to each class transaction to track where I could save money:

• Rock Bottom: This is the cheapest price available.
• Cheaper: I might be able to spend less. i.e. Cable (spending $100, could spend $50)

These classes are easy to enter in Quicken. Here is a screen capture to demonstrate how a basic transaction would be entered. (Note: I work on a Mac, so PC users will see a slightly different screen, but the function is available in both.)

I occasionally become very meticulous about tracking transactions. Here is a screen capture that shows a “split” transaction—one where part of the grocery purchase was necessary (fruits, vegetables, etc.) and another part was necessary, but overly expensive (prepared foods). Notice that I’m using the keypad to do the math within the transaction. In this case, I’m multiplying the total by .6 (60%). Rather than adding up each item individually then figuring the tax, most times I just guestimate the percentage.

All this probably seems unnecessarily time-consuming, but once I’d used the software for a while, it became predictive and now it only takes about 15 minutes a week to download, categorize, and classify all my transactions.

So why do this? Ultimately, this is just a tool. It has helped me feel less stressed about my finances and bills, save money on late payments and interest, save time spent balancing my checkbook, and, most importantly, track how mindful I was when spending money. My goal was to save money, but also to make sure that I spent money on only those things that really mattered.

Product Recommendations (Quicken vs. Microsoft Money):

I mention that I use Quicken; I really like it--it's convenient and interactive with all my Mac calendaring features.  Apparently, Quicken is even developing a widget for the iPhone.  My sister-in-law uses it on her PC (based on my recommendation) and, while it has the same financial functions, I think that it isn't as intuitive or interactive.  

I have a friend who swears by Microsoft Money.  From what I've seen, it has the same financial functions, but may be better for PC.  

Monday, April 21, 2008


I used to be poor.  Not truly poor, I mean, but student poor.  The kind of poor where you have to choose between paying your tuition and paying your power bill.  The kind of poor where you rely on the patience and pity of the apartment rental office to keep a roof over your mattress on the floor.  The kind of poor where you buy the 10 lb. bag of rice and some spices and begin saving for next month's grocery bill.  The kind of poor where you don't have to live like this; where one call to your parents would rescue you, where quitting school and getting a real job would put you in a car that runs every day, where a larger student loan (that you wouldn't be able to repay) or a credit card (that you would max out and default on in three months) would buy you a half a year of a "normal" life.  Basically, the kind of poor you choose.

I would like to say that this experience forced me to become a master of money management, a financial genius.  That my power was never turned off.  That on the $400 left after rent, I was able to pay my power, phone, tuition, and grocery bills.  I was not.  Not always.

But most of the time, I was.  During that time, I was able to scrimp here and there, though never to save.  I was able, most months, to get by.  To more than get by, actually.  I was able to enjoy my life.  Deeply enjoy.  I spent time with friends.  Went out.  Traveled. I had time to be thoughtful and creative.  I was rarely bored or worried about money.  I did not accrue excessive debt or feel that I had to in order to live well. 

I have a bit of money now.  A house, a husband, two dogs, and plans for a family.  I do not want to return to those days.  Whatever nostalgia I feel, my life is better now.  However, I can't help but wonder how I was able to do the things I did on $400 that I can't seem to afford on $2000 now.  How was I able to do so much on so little?  Why do I now need the larger trashcan when I used to only carry out one bag a week?  Rice aside, why is my grocery bill so high? My electric bill outrageous? Most importantly, why does it seem that I can't afford the time with friends, the travel, the free time that was so cheap then?

There are the usual culprits, the necessities of adulthood: a running car (the windows go down and up), a mortgage, health insurance (oh, luxury), and a retirement plan (hopefully, old age is inevitable).   I would not sacrifice these things in order to have more fun.  However, none of these things eat up enough money to explain the discrepancy in lifestyle.  What I find, when I really examine my life, is that, having decided to be a "grown-up," I have abandoned habits, borne out of necessity, that actually made my life more fulfilling, more fun. 

I no longer need to sacrifice for the things that are important to me, so I no longer choose what is important to me.  I waste more because I am able to buy more.  I am no longer forced to rely on the kindness of strangers, so I head-off offers of kindness, viewing them as charity.  I buy entertainment rather than seeking it in relationships with family and friends.  I spend money rather than spending my time and effort, rather than spending my life.  I throw money at any issue, any need.  And now, I am finding that money is a less meaningful currency.  It runs out quickly and doesn't give back.  Spending your time and effort can be meaningful, can give back to you.

This blog is dedicated to my exploration of these issues.  It will document my attempts at and advice for implementing the lessons I learned while living as a poor student.  Most entries will take the form of advice.  Sometimes I will examine larger issues that drive our spending (money or effort).  Sometimes I will point out ways to save money by making sacrifices.  Sometimes I will explore lifestyle choices that are both more fulfilling and more cost effective.  I welcome your suggestions, observations, and (reluctantly) your criticism.  I hope that you find these reflections useful.