saving

The Year We Saved $10K: Homes and Weddings

I’ve gotten a lot of your “the year I saved $10K” stories—we are quite a financially savvy community, as it turns out.

Here are two stories to start off. They share the theme of, as Sara notes below, “building savings that are actually spendings.” Lauren and her husband saved up for a down payment on a house, and Sara and her fiancé are saving up for a wedding.

Lauren: My husband and I spent the last year putting away $2,000/month in order to save up for a down payment on a house. We were able to do this mostly by having awesome jobs—our combined take-home pay is ~75k, plus my husband gets some stock grants. We also wouldn’t have been able to do this without living together and combining finances. It took a little while to adjust to the saving schedule, but I think it helped that we started right after we got married so there wasn’t much time to lifestyle inflate and adjust to having two salaries and only one apartment.

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The Year I Saved $10,000

I want to share stories from people who saved $10K in a year. Whether you do it every year or did it just once, it’s time to talk about serious saving. If you have a story to share, email me at dieker.nicole@gmail.com.

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Ask A Human Who Actually Practices GTD (‘Getting Things Done’)

Here is an real tweet that I really tweeted yesterday:

My inbox may be zero, but my GTD list is spiraling out of control. Time to reconfigure my Horizons of Responsibility or something. #GTD

— Nicole (@HelloTheFuture) July 21, 2014

I meant every word of it.

I’ve been practicing GTD, or David Allen’s Getting Things Done system, since 2008. That’s well over 300 Weekly Reviews. An uncountable number of Ubiquitous Capture Devices. The regular, systemic processing of my Inboxes to Zero.

What does this have to do with personal finance, you might ask? When I was working as an executive assistant, practicing GTD didn’t have all that much to do with finance except for the part where it helped me pay my bills on time. It was only when I switched to the freelance world that GTD became an essential part of my money management.

It’s probably time for a quick update of what “GTD” is. At its core, “practicing GTD” means sorting through all of the various inputs that come at you every day — email inboxes, Twitter feeds, online chats with editors, personal conversations — and isolating every task that you have agreed to complete onto a single list. Then, you organize the list into completable chunks of action items, and you get things done.

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Label Whoring at Thrift Town

Just because I’m poor doesn’t mean I have to wear jeans from K-Mart. I love Kut from the Kloth jeans, which sell for $40 at Nordstrom Rack, but I recently found two pair in my size at Thrift Town, for $4.99 each. Thanks to label whoring, I can be the best-dressed person at the welfare office (and that is including the employees).

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Let’s Throw Some Money at Our Problems: June 2014 Check-in

It’s time to check in on our debt payments and savings goals again.

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Is “The Ice Cream Rule” Helpful?

Think about a big delicious bowl of ice cream. What could be more delightful during these stifling, humid months? Ice cream is gluten free, so our annoying friends can enjoy it. There are coconut milk-based varieties for the lactose-intolerant and low-sugar versions for the weight-conscious. Slap it between two cookies or in a cone, and you can visit heaven en route to wherever you’re headed.

No matter how much you enjoy your dessert, though, you probably don’t begrudge someone you love a bite, right? Sharing is caring! Even better, what if you were able to put aside that bite for yourself and enjoy it in the future?

You can probably see where we are — or, more precisely, Money Crush is — going with this. The “ice cream rule” encourages us to think about money like ice cream. One bite of a two-scoop serving is about 10%, and if you can convince yourself to put away 10% — without feeling like you’re depriving yourself of anything right now — you’d be in great shape!

Consistently putting away 10% of your salary toward a long term goal can make an enormous difference. In fact, 10% of your salary can make you rich over the long term if you invest it wisely and consistently. 10% of a bowl of ice cream isn’t very much. It’s no big deal. It’s only when you think things like “How can I ever save 10% of my salary?! That’s an extra X thousand dollars!” that you get overwhelmed and it seems like a huge amount. Yet many of us regularly spend more than 10% of our salary on things that we don’t even have any longer without giving it a second thought. The thing is, 10% really isn’t very much in comparison to the other 90%, no matter how big of a number you’re dealing with.

As Lifehacker puts it, “If you think about saving 10% of your income like you are sharing a bit with your future self, saving becomes a lot easier.” It is worth saying, though, that it’s easier to offer someone 10% of your ice cream while the serving in front of you is abundant and you get to see the satisfaction and gratitude in your friend’s face. It’s harder to take 10% of what’s in your bowl and put it in another bowl and put that bowl in the freezer. Not impossible, just a little more challenging.

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The Extra Paycheck Club

Summertime! And the living is easy — especially if you are in the Extra Paycheck Club, and you might be whether you want to be or not. While two paychecks each month is still standard for many people, some employers pay bi-weekly. Instead of getting paid twice a month (24 paychecks/year), you get paid every other week (26 paychecks/year). It’s not exactly free money; you end up getting paid the same rate annually, just split over more paychecks.

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Living on Reduced Incomes and Starting Over After the Recession

From the L.A. Times, what do you do when you lose your job and the next one you get pays less than you were earning before?

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Link Round Up: Student Loans and More Student Loans; Millennials Hoarding Cash Like Dragons

President Obama’s move to help ease the student loan crisis started a cascade of think pieces about student loans over the weekend. Here are a couple of the most interesting:

Here’s Why the Student Loan Market Is Completely Insane, via Businessweek. Complete with charts! Oh, and facts, lots of sobering facts:

Default rates at such places as Stanford, Duke, Carnegie Mellon, MIT, and Yale are all less than 2 percent. Not surprisingly, graduates from these schools command high salaries in the job market. At such places as West Virginia, Louisville, South Florida, and Boise State—schools much better known for athletics than academics—default rates are 10 percent. Further down the food chain are much higher default rates at places such as Alcorn State (16 percent), Colorado Technical University (23 percent), University of Phoenix (26 percent), Lincoln Technical Institute (30 percent), and Arizona Automotive Institute (42 percent).

+ Finding Shock Absorbers for Student Debt, via the NYT, also concerns itself with the problem of default, and wants to help cushion students against the risks they incur by paying for college.

The core problem with student debt is that we don’t adequately insure students against the risk of investing in college. While a vast majority of undergraduates have borrowed much less than some headlines suggest — in one study from the last decade, 98 percent borrowed less than $50,000 and four out of 10 borrowed nothing at all — millions are in default or behind on payments. With damaged credit records, they face higher interest rates on car and home loans, rejected rental applications and lost job opportunities. … But how can we help in the short term? We should allow student-loan payments to rise and fall with income, as we do with Social Security and taxes. If borrowers hit a tough spell, payments should drop automatically. If they score well-paying jobs, payments should rise. This is called “income-based repayment.”

+ Perhaps all of this has something to do with why millennials are hoarding cash like dragons?

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Your Friday Jam: Roth IRA

I JUST REMEMBERED THAT I ONCE WROTE A SONG ABOUT PERSONAL FINANCE.

Happy Friday!

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Why is Salad So Expensive AND The Solution to the Problem

Perhaps you’ve noticed that salad is expensive — like, expensive enough that you could spend the same amount on a decent bottle of wine or some quality hair product. It often costs more to buy a salad than to buy a sandwich or hamburger at restaurants, including fast food chains like Subway. A paltry half-frozen McDonald’s salad, made of iceberg lettuce and vaguely colored cellulose, costs more than a Big Mac. This feels unfair. Salads often don’t taste very good. (That’s why they need such extensive PR campaigns.) They don’t boast uniformly high-quality ingredients that justify the price tag. A lot of them are not even filling, unless they’re loaded with so many fats, carbs, and proteins that they become “salad” in name only. Why must we pay more to receive less?

Sure, it’s about the Farm Bill and subsidies and lobbyists and all that jazz. I have a sneaking suspicion too though that those of us who feel guilty enough to buy salads out, rather than assemble them at home, are being taxed for wanting to appear healthy and/or eat our way to righteousness. Basically, we’re saps.

Either way, I was thrilled to discover the other night that there is a restaurant near me that serves an incredible salad filled with delicious things, including goat cheese, avocado, and corn, for $5. Yeah, you heard me. This salad could make blind see and the lame tap-dance, and it costs five bucks! I will eat there every day forever.

What are your salad hacks? Or are you wise to this boondoggle and do you stick to assembling your own vegetables at home?

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I’ve Fallen Into the ‘Lifestyle Inflation’ Trap

I always assumed that inflation is about money, but now I know that it’s not.

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