Essay: Patricia’s Money Philosophy Series. Part III of IV: Learning & Saving

I believe in paying attention to your money.  I think that how you care for it and what you spend it on make a difference—not only for your own piece of mind, but also in the context of the universe and energy and whatnot.  Money ignored is money that won’t be around for long.  So here’s an incredibly long and detailed four-part series about how I manage my money.  To see the entire series look for the tag “Money.”

I learn
When I was first out in the world on my own, I started reading heaps of personal money management books.  It got so I would just wander over to the section of the Dewy Decimal System in the library to see if there was something I hadn’t read that caught my interest. Most of them say the same thing in different ways, so after you’ve read five, you can move into skimming mode once you hit say, the “how to budget” section.  From time to time I dip back in if a book interests me.  I’ve gleaned good advice from these books, and all for free.  Thank you, public library system.
If you are looking for somewhere to start I recommend Your Money or Your Life, All Your Worth by Warren and Tyagi. I have also found the debt-free philosophy of Mary Hunt to be inspiring.  Also, anything by Suze Ormon is good.  You can also follow my example and find the personal finance section at your local library and choose books at random.
I save
Since my first job in high school, I’ve always put some percentage of money aside.  Not that the money has always gone toward my far-future. In fact, the savings from that first job financed my personal spending in college.  I’ve saved various percentages of income over the years, from as little as $50.00 per month during the grim, incredibly boring and low-paying job I got after graduate school all the way up to 20% of my net pay in a brief heady time when I finished paying
for my certificate program and other things hadn’t cropped up.  With all that saving, I’m probably sitting on a pretty big pile of cash right now, right?
Not so much.  Though it’s a bigger pile then I’ve ever had.
In my mind, “saving money” is a particular thing where you put money aside and never, ever touch that money so it grows and grows until you retire when you can use it.  I’ve never met that standard with my savings.  A graph of my savings account over the last ten years would show peaks and valleys.  For instance, I saved over $5,000 to fund my move from Massachusetts to Portland.  Well done!
Those were the years where I had no debt and my living expenses were quite low.  I made the most of my savings, concerned about the many potential expenses that could crop up during the move.  So the move took up $2,200.00 of
the savings and the subsequent unemployment while looking for work ate away at some of the rest.  I took on temporary work and the company hired me and I had a brief period of saving until I entered graduate school.
Beginning with graduate school, I began to draw down the savings.  This was not an easy time for me.  Once, while once again withdrawing money from savings, I sighed while handing over my paperwork.  The bank teller inquired as to what was wrong.
“I hate having to pull money out of savings.” I told him.
“But that’s the point of savings accounts,” he replied, “so you can draw from them when you need them.”
This concept was exactly the opposite of my “put money in account never touching it until you retire” savings concept, but I had to conclude that he was right.  Without that savings account I would have exited graduate school with not only student loan debt, but also credit card debt.  It’s always better when you can be your own emergency credit card and I still hear that bank teller’s words from time to time today.
So the savings account was humbled by graduate school, but the six months of unemployment following graduate school made an ever bigger dent.  I counted on steady temporary work, as I always had found in the past, but temp work didn’t materialize over the summer.  Nor did any jobs.  The temporary work picked up in the late autumn, giving me a new appreciation for the paycheck incredibly mundane tasks provides.  Then I made a rather large financial mistake and took a job I was extremely overqualified for.
In my year and a half as a secretary, I went slowly crazy, both from boredom and disgust at my pay rate.  I was paid less than $10.00 per hour, which at the time was only a few dollars over Oregon minimum wage.  I’ve never had to watch my finances so closely.  My rent took nearly half of my gross pay and I shopped carefully for everything.  If I had loved the job, or even liked it, I would have done these things happily, but there was little work to do at my workplace and that made the scrimping even more grim.  I was barely putting anything aside, and my goal to save $5,000 was being fed by a trickle of $50.00 per month.  I didn’t want to do the math to see how long that would take.
Things improved when my boyfriend and I moved in together.  The rent we paid together on our one bedroom was only a bit more than I paid on my studio and sharing expenses really gave me some breathing room. I eventually landed my current job, which came with an $8,000 per year pay raise and my savings could begin again in earnest.  Over the last six years, the graph of savings has been more of a steady upward climb, though it has dipped now and again, as
things have cropped up.  I accept those dips, and set my course to recover the savings as soon as I am able.

Three sentence movie reviews: Buffy the Vampire Slayer

This was much better than I remember it* and fun in an incredibly embryonic Joss Whedon way.  First of all, it’s totally the “girl gains her power” story I keep complaining there aren’t any of in the movie world and it also provided me with the bonus that fashion in the movie coincided with my high school fashion years so I know that I wasn’t being weird when I wore a dress with dorky shoes and socks, that was actually a fashion forward move on my part.  Also, I have now been reminded what that Luke Perry thing was all about.

Cost: free from library
Where watched: at home.

*I can clearly recall that I found it to be “kind of weird.” when I saw it during high school.  And maybe Ms. Sterner and I saw this together? Maybe at Overland Park?

“we think you will be too!”


My whole life the newspaper people have been changing around the paper which drives me out of my mind. On top of switching up things that are just fine they way they are is that they always say something to the effect of, “And we think you will love it too!”

Um, no.  It makes no sense to me to put the “living” stuff with the “travel” stuff and make the “arts” stuff separate.  The former section with the “living” and “arts” together with a separate “travel” section was working just fine for me.  But clearly someone needed to justify keeping their job, or needed a promotion or something, so I will roll with it until you change things up again and I get annoyed all over again.

Three sentence movie reviews: Raiders of the Lost Ark

Having never seen this movie on the big screen, I was happy to spend a Sunday afternoon seeing Harrison Ford in the glory days before he developed his wattles.  The movie holds up pretty well and it’s an interesting contrast to see Action Adventure before CGI (like in this movie) compared to the previous night’s viewing which was all CGI.  Also, Karen Allen is the best Indiana Jones heroine.

Cost:  $8.50
Where watched:  Regal Lloyd Cinema 10

Three sentence movie reviews: The Avengers

I greatly enjoyed this movie when we saw it in May, but if you had asked me to recount the plot to you, I would have only been able to stammer “Uh, it’s pretty funny.  Um, and. Uh.”  Watching it this time was an experience of repeatedly thinking “oh yes!  I remember this part, this was quite enjoyable.”  I think it was the frantic pace that caused the post-viewing amnesia in that I was all in during, but there was so much that happened my brain just got overwhelmed and forgot it all.

Cost:  $3.00
Where watched:  Portlander Inn Cinema. (at the Jubitz truck stop)

(I was looking for one with Agent Colson on it, but no dice.)

Essay: Patricia’s Money Philosophy Series. Part II of IV: Debt

I believe in paying attention to your money.  I think that how you care for it and what you spend it on make a difference—not only for your own piece of mind, but also in the context of the universe and energy and whatnot.  Money ignored is money that won’t be around for long.  So here’s an incredibly long and detailed four-part series about how I manage my money.  To see the entire series look for the tag “Money.”

I avoid debt as much as I possibly can.
Aside from a brief period in my twenties, where I combined my lack of skills with an iffy job market and no clear idea of what I wanted to do for a living, I have avoided credit card debt.  At the time, I had about $800.00 charged to a
high-interest card, which was the only kind I could get due to the fact I did
not establish credit while in college.  I also had a $2000.00 computer loan and $16,000 in student loan debt.  And I had no job.
I often read financial stories of people who come into a windfall and happily pay things off, or realize that they could sell the rental property they own and make more money than being a landlord.  These stories leave me with an intense feeling of jealousy.  “I wish I just had a windfall like that.” I mutter to myself. But the truth is, I had a windfall and it saved my bacon.
Beginning when I was in elementary school, a check used to arrive every month made out to Patricia and Chris Collins.  Every month my brother and I would endorse it, with me grumbling that I had to write my full name (I was Patty then) while Chris got to write his nickname.  The check was for $128.00 and change and was a mortgage payment made on my father’s boyhood home.  I’ve never really understood why we got the mortgage payment monthly, but it happened for twenty years.
The money was deposited into an annuity account, which I’ve since learned was a horrible investment vehicle for children still in elementary school.  My brother and I cashed out the annuity in our twenties and the amount I received was enough to pay off the credit card, the computer and the student loan, along with putting something in savings.  This gave me the heady feeling of being debt free, which not only was an amazing feeling, but also kept me from ever wanting to carry credit card debt again.  So I had my windfall and something good came
of it.  But I am also happy to accept windfalls in the future too.  I am just
putting that out there, universe.
I do have debt, though. When I went to graduate school I took on student loan debt again.  Because I had used the windfall to pay off my undergraduate loans I left graduate school with loans that totaled just a bit under what I expected to earn my first year as a teacher. Loans equal to or less than expected first-year salary is the phrase that is bandied about when advice is given about student loans.  I’ve slipped into the passive voice in that last sentence because I know
that I read that advice multiple places and yet I’m not sure who is giving it,
or if it is good advice.  I’ve been paying those loans for seven years now and have thirteen years left to go and I’ve yet to work a year as teacher.  To say these student loans drive me crazy would be an understatement.  My monthly payment is one I can easily meet each month. I was faced with bleak employment prospects coming out of graduate school, so I chose the graduated repayment plan over 20 years.  Right now I pay $160.00 per month.  Would I love to accelerate those payments and get rid of this debt early? You betcha. Would I be willing to work 40 hours per week instead of 32 to do so?  Not in my current job, no.
The other debt is the mortgage.  Mortgage debt seems a fact of life for everyone I know, so I don’t begrudge the debt, though when I look at the interest-to-principle ratio my tightwad self shrivels a little.  However, while I regret the student loan debt, I think we did it right with the mortgage.  For one thing, we didn’t overbuy.  Our house is modest, but is as much house as we need, as far as I’m concerned.  Also, we bought our house from a land trust, which means that the land trust owns the land below our house and we pay a small fee for the lease. Since the value of the land isn’t included in the purchase price, our mortgage is that much less.  When we bought the house, I felt comfortable that I could lose my job tomorrow, pick up temp work while I looked for a new opportunity, and still be able to meet the mortgage.  In addition, should we ever decide to sell our house, it will be resold to another first-time homebuyer, which preserves an affordable stock of housing for people who would have otherwise been shut out of the market, like we were.  This is a very important concept to me.
For me, owning a house was important psychologically—once we got into the house and unpacked, I felt incredibly settled.  Here was where I could live for the rest of my life, if I so chose.  This brought a feeling of peace that was not present through the apartment living period of my life.  Apartment living has its
advantages, but I always felt an underlying bit of tension.  You never know when the landlord is going to raise the rent, sell the house out from under you, or tear down the beautiful building to build a parking garage.  I didn’t like that feeling of insecurity.
There are tradeoffs, though.  Before I bought my house, homeowners told me that they were astounded at the amount of time they spent on the house.  “Oh, but I will love that time spent,” I told them, all heady with the idea of projects.  I’ve done a lot of projects over the five years we’ve lived here and they have been mostly satisfying.  Before the house, I used to be bored on a regular basis.  After the house, I think I’ve been bored maybe two days.  This is good and bad.  Sometimes the house can seem a bit overwhelming, but at least I don’t have a regular sense of ennui.

Three sentence movie reviews: Take Shelter

This was one of those amazing movie experiences that make all those so-so flicks worth sitting through.  I’ve seen Michael Shannon’s fabulous acting on display in two other films* and he carried me away during this one too.  This is completely worth your time and money so go and find it today.

Cost:  Free from Library
Where watched:  at home.

*Revolutionary Road, where he was the key turning point in Leonardo DiCaprio & Kate Winslet’s marriage and The Runaways where he played sleazy Kim Fowley. The first role was a quiet crazy building to an explosion, the second an exuberant, bacchanalian picture of rock and roll excess.

Paperwork!!!!

Oh beginning of school, you torture me.  This corner of my desk was clear just twenty minutes before.  But then all the families walked into school and handed in their massive paperwork packets and I’m back on the paperwork bandwagon.  Back-to-school paperwork keeps me busy through October.
 
And yet there are still things to do that aren’t paperwork.  This is why I wrote all my September essays over the summer.
 

Essay: Patricia’s Money Philosophy Series. Part I of IV: Budget

I believe in paying attention to your money.  I think that how you care for it and what you
spend it on make a difference—not only for your own piece of mind, but also in
the context of the universe and energy and whatnot.  Money ignored is money that won’t be around
for long.  So here’s an incredibly long
and detailed four-part series about how I manage my money.  To see the entire series look for the tag
“Money.”

I have a budget.
My first forays into budgeting involved a modified envelope
system.  I was working at Pizza Hut in
high school and I had three categories. 
Savings, spending, and my favorite category:  saving up for something good, which I called
SUSG.  The percentages are hazy, but I
think half of my pay went to savings, and the other half was split between the
spending/SUSG category.  I don’t actually
recall what “good” things I was saving up for, but I think they were items like
clothing that cost more than $50.00 or do-dads I bought from catalogs.  Ah, the life of a middle-class teenager, when
everything is covered except for extras. 
Still, that savings category meant that I could offer to kick in money
for my college education.  My mother
suggested I keep it instead and use it to live off of.  This was rather brilliant on her part as I
blew through half of it in a freshman freedom spending orgy. Unlike many
freshmen, nothing was spent on drinking or drugs as I lived on a dry campus,
didn’t drink and wasn’t into drugs.  There
was, however, a lot of catalog buying. At the end of the first semester, I
found myself horrified at my spendthrift ways, reigned myself in and from then
on paid for most of my expenses while in college.  Granted, my parents were paying my tuition,
room and board, and later rent, but I managed to work enough to procure my own
supplies, clothing and sundries and, when I moved out of the dorms, food.  I kept an eye on what I was earning and what
I was spending and I think this was a good stepping stone for supporting myself
in my post-college life. 
My budget works for
me.
My budget now is inspired by two systems: Your Money or Your Life by Dominguez
& Robin.  I also use the 50/30/20 principle
first proposed in the book All Your Worth
by Elizabeth Warren and Amelia Warren Tyagi. 
Your Money or Your Life
teaches you to think of your money in an entirely different way and I feel it
is recommended reading, even if you don’t follow the program exactly as
planned.  What YMYL does is teach you how
to personalize your budget to your spending patterns.  Before this book, I would buy notebooks at
the store with pre-made budgets.  I loved
them, because they had a sense of order, but I usually quickly grew
disillusioned as the categories didn’t fit me. 
They always included a line for “childcare” that I didn’t need.  I crossed it out and wrote in something else,
but the pencil line through the printed text annoyed me.
With YMYL, I tracked my own spending and created a budget
filled with categories I actually used. 
I dropped the entire budget into an Excel spreadsheet and have been
using it ever since.  Not the same one,
of course.  Any time something changes
financially—every six months or so, but as often as every three or four
months—I revise the budget, changing amounts or sometimes even adding or
subtracting categories.  My categories
are pretty detailed and split into several sub categories, see below for a
complete listing.  Despite my
thoroughness, I believe you can have a budget with as few as five categories:
Savings, Food, Shelter, Clothing, Misc. 
However, those categories are going to become unwieldy, unless you make
very little money.
I like the 50/30/20 principle because it gives me a good
idea of how I should be spending (and saving) my money.  Before I read this book I would always wonder
if the amount I spent on groceries (or whatever) was too much.  In this system, Warren and Tyagi propose that
20% of your net pay goes into savings, 30% is spent on wants and 50% is spent
on must-haves.  They define must-haves as
the bills you have to pay month after month and wants as some fun money right
now. 20% goes toward saving for the future. 
Though I was attracted to the 50/30/20 plan’s big emphasis
on saving and the firm, and large, percentage, I don’t want you to think that
I’ve got the plan implemented.  However,
I just reviewed my budgets since I adopted the program and I can tell you that
since May of 2008, I have only met the percentage goals with two of eleven
budgets made during that time.  So it’s
still a stretch goal for me.  This may be
because I work a 32-hour week, but am still living as if I work 40.
Current budget categories
Food
Subcategories of groceries, joint groceries, dining out and
garden supplies. 
I’m thinking of adding a further category of “sweets”
because my dining out category has been over spent a lot the last few months
and I think it’s due to the cookie habit I have formed.  The food category as a whole has been tough
the last few years.  I’m budgeting much
more than I ever have, but still struggling to keep expenses down.
Shelter
Mortgage
This is a joint category. 
I’ll talk more about how we handle the joint expenses later.
Bills
individual categories:
student loans, school, cat, car, house holding
The “school” category came about when I was paying for a
certificate program to add to my degree. 
It has not yet gone away, but has been reduced to a minimal amount.  The “house holding” category is for
maintenance of my household supplies. 
Like a woman with a dowry, I bring all the kitchen stuff to the
relationship. I aim to take all the kitchen stuff with me from the relationship
if it ever comes to that and I don’t muddy the waters by buying anything with
joint funds.
joint categories:
phone, land lease, life insurance, homeowners insurance,
garbage, electricity, water/sewer, yard, internet, saving up for big
appliances, joint savings, joint vacation, dates, household supplies,
furniture/decorating, cleaning.
The “cleaning” category is how we pay ourselves for
housework completed.
Clothing
Work, fun, sport
These used to all be separate categories, probably because I
was in my 20s.  Now it’s all just one
thing.
Transportation
Bicycle
This category used to contain a category for public
transportation, but I’ve been lucky that my employer has provided a monthly
transit pass for the last six years.  I
guess the “car” category from bills should go here, but I haven’t ever moved
it.
Health
Personal care, doctor/drugs, gym
Personal care is all the “stuff” to maintain me, like
toothbrushes, shampoo and tweezers, etc.
Recreation
Plays and lessons, vacation, newspaper, computer, random fun
things to do
The plays and lessons category used to be horribly overspent
until I spent a year pledging not to take any classes.  Now it is only moderately overspent now and
then as I want to see more plays than I budget for.  That said, it’s a very minimal amount
budgeted each month. I would love to increase it. “Random fun things to do” is
my general spending money each month.  I
found it easier to lump the movies, the occasional book bought or entrance fee
paid in one category than to make separate categories for all of these items.
Gifts
Personal gifts, Christmas, public radio donation, church
donation.
I have a budget amount for family/friend birthdays and a
budget amount for Christmas.
Savings
3 month
I could technically rename this “8 month” because I finally
met my three months of living expenses saving goal.  But I like the historic flavor of it.