Budget Freak

The company I’ve been working for as a contractor for the past 10 months, opened up a full time job for my position. After a few months of waiting for the job to post, a round of interviews, and another 2 weeks for them to make a decision, they offered me the job. In the mean time, I told my current employer about the new job, and they made me a counter off with a pretty big promotion and a nice raise. It was a fantastic position I’d never been in before.

The job I had before was with a small company (~20 employees), and was still a pretty young consulting company. The new offer came from one of the largest businesses in the world (~100,000 employees), a major oil company. The consulting company offered me a project manager role, a nice promotion with lots more responsibility, where as the oil company offered me a data analyst position, which is basically what I’ve been doing for the last year. The salaries were comparable, so how was I going to decide??

I decided to go with the big oil company. Ultimately, it came down to the benefits, and potential career growth.

The project manager role would have been a fantastic promotion, but there wouldn’t have been much room to grow after that. At the oil company, I may have less responsibility at first, but two years down the line, my options are almost limitless. They have opportunities on 6 different continents, in just every aspect of business. I know people who work there now that have taken 2-3 year assignments in remote parts of Alaska, the middle east, and all over Europe. I’m working in the Environmental department now, but I could easily transfer to a process control group, health and safety, or any number of different departments.

As for benefits, I had to make a spreadsheet listing all the benefits and do a side by side comparison. The big oil company had a huge advantage when you looked at the standard medical and retirement benefits. They matched 7% of the 401k contributions (vs. 3%), they’re about $100 cheaper per month for health and dental insurance, and, amazingly, they have a pension plan. They use a strange formula to calculate contributions, but for my salary and age, I would be getting over $4,000 per year, free. Of course I couldn’t touch it for 40 years, and it doesn’t vest for 5 years, but thinking long term, that’s a huge advantage.

There were also some fringe benefits I had to examine. For example, as a consultant, I’d get to work from home 3-4 days per week. That would save me about $200 per month on gas and car expenses. The consulting company also pays for my telephone and internet connection, another $70 or so a month. On the other side, the oil company has a 9/80 work schedule, which means I’d work 80 hours every 9 days, which in other words, I’d have every other Friday off. They’re also flexible with the day off, so if you time them around holidays, you can easily get 4 day weekends pretty routinely. The other benefit of the 9/80 schedule, is that my girlfriend works a 4/10 schedule, so she gets every Friday off, and I would definitely spend more time with her.

The biggest factor, which trumps everything above, is that the oil company will pay for my MBA. Specifically, they will pay 90% of tuition, books, fees, etc, with no maximum. That means if I decide to go to either of my top choices, Pepperdine ($60,000) or UCLA ($80,000), I would only have to pay $6,000 or $8,000. That’s a huge advantage in my book.

So there you have it. I gave both opportunities a chance, but when I calculated everything out, the choice became pretty obvious. Hopefully this will give other people an idea of what things to look for when they’re deciding between jobs. I have another week and a half at my old job, and then I’ll start at the big oil company the first week of July. Wish me luck! Our online pharmacy is the perfect resource for people to get their drugs without any hassles or awkwardness. buy cialis We work hard to make sure you save money every time you shop with us. buy levitrabuy soma At our online store, you pay less and get more. buy viagra

I’d like to nominate myself for ‘Idiot of the Year.’ After explaining all the pitfalls of 0% balance transfers, how dangerous it can be, and how careful you need to track your due dates… I miss a payment. I was reconciling my checking account and my bank showed I had $148 more than my records, exactly one payment on my Citi Professional card. Panic sunk in, and I rushed over to Citi’s website, to realize my worst fears - I had missed May’s payment. Now well into June, I now had 2 minimum monthly payments, a $102 finance charge, and a $39 late fee starring at me. Worst of all, my 0% promotional rate had ended, and I was defaulted to the standard 12.99%.

After I calmed down a bit I made the $390 minimum payment and gave Citi a call. I explained the situation, how my records show I had made the payment, but neither Citi nor my bank showed the payment. He told me they might be able to give me back the 0% promotional offer, but I would have to call back the next day, after my payment had posted.

The next day, I made another call to Citi and explained again. The payment had gone through, and I asked about returning to my 0% rate. He put me on hold to talk with a manager. After about a minute of the most intense telephone on-hold experience of my life, the service rep came back and told me that, only this once, they could restore my 0% rate. Thank God. I asked about the finance charges or the late fee, and he basically said, ‘Too bad.’
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So, please let this be a lesson to everybody out there. Don’t forget to make your minimum monthly payments!! I think I got VERY lucky this time, and I only escaped with $140 in finance charges and penalties. That will cut into my profits this round, but I’ll still end up positive, so long as there aren’t any more mistakes.

Here’s my expenses for April.

Automobile : Gas $ 212.59
Automobile : Registration $ 244.00
Automobile : Car Payment $ 500.00
Automobile : Parking $ 28.30
Banking : Fees $ 7.25
Bills : Telephone $ 63.63
Bills : Electricity $ 54.43
Bills : Gas $ 34.34
Bills : Rent $ 652.00
Bills : Cable TV/Internet $ 89.81
Bills : Cell Phone $ 50.53
Business : Traveling $ 215.35
Food : Groceries $ 122.66
Food : Dining out $ 157.04
Food : Booze $ 158.16
Gambling $ 200.00
Healthcare : $ 10.00
Homeneeds : Clothing $ 201.25
Insurance : Auto $ 103.42
Leisure : Dodger Tickets $ 335.00
Miscellaneous $ 19.80
Total $ 3,981.21

Ouch. First month this year that I operated at a net loss. I had a few big purchases out of the ordinary. The Dodger tickets, at $335 was the biggest out-of-ordinary expense. I also had my car registration due ($244), and business trip related expenses ($215). The business trip will be reimbursed this month, however. Then of course, there’s the trip to Vegas, which set me back a couple hundred bucks between gambling losses and eating out all weekend. I also made a pretty big clothing purchase. I had a 20% off coupon for Old Navy, so I bought 9 new shirts, a pair of shorts, and a jacket.

My ‘Booze’ category was way too high last month. I’m glad I stopped including booze in the ‘Miscellaneous’ category, so I can really see how much I spend on alcohol. $158 in a month is obscene. Granted a bit of that was in Vegas, but still, I need to cut back. I’m making a goal this month to get that number under $50.

Looks like all my financial troubles are over!! I just recieved this email from GoDaddy, my domain registrar.

The Internet Corporation for Assigned Names and Numbers (ICANN®) recently agreed to reduce their Registrar Transaction Fee from $.25 to $.22. What does this mean for you?

Good news. You have been credited $.03/yr for each domain name you registered or renewed dating back to July 1, 2006 — $.06 has been placed into your Go Daddy® account.

6 whole cents!! If I invest my 6 cents in the stock market, averaging 10% return over the next 40 years, I’ll have built up $2.71!!

Can you even buy anything anymore for 6 cents???

It feels like life is rushing by these days. Between work, business trips, the run to vegas, school, and now Dodger games, I’ve been really busy lately. I just wanted to give a few quick updates on things.

The budget took a hit this weekend in Vegas. Gambling losses totaled around $200, plus another $150 or so on food and drink. I have a stack of receipts I still need to go through before I know the final totals. Actually, the totals were right around what I had expected to spend, although it would have been nice to win some money for a change. It was a fun weekend though, even if I gained 15 pounds, my feet hurt from walking too much in sandals, and my stomach has felt like a nuclear bomb went off.

We were able to find free parking for our first Dodger game last week. We got to the game only 20 minutes from the start, and we were still able to find a spot in our first free parking choice. It only took us 15 minutes (albeit up a hill) to get to the stadium. We made it just in time for the first pitch. We were quite pleased with the results. Now we just need to start bringing our own food, and we’ll be set. We have two games this weekend to practice again.

I decided on Liberty Mutual for my car insurance. They were about $400 less than everybody else, and I’ve heard nothing but good things. I’m filling out the paperwork now. The other nice thing, is if you sign up for electronic withdrawals, there are no finance charges for paying month by month. So instead of having to dish out $1,500 this month, I only have to pay $120 or so each month. Not a huge deal, but I can keep all that $1,500 in my savings account and earn a bit of interest.

I’ve also applied for that new job. It’s basically the job I’ve been doing as a consultant, but as a full time employee at the company. I hope to hear about interviews in the next week or two. Keep your fingers crossed.

Sorry for the lack of posts recently, but I’ve been super busy. I was in Austin, Texas the last 2 days for company meetings. Now I’m back home, and my other work is piling up. In addition to that, tonight is my first Dodger game of the season. Plus, I’m about two weeks behind on all my homework, so I have about four assignments to finish by Thursday, another 2-3 hours of homework to do by Monday, and I need to make up a test I missed while in Austin. To make matters worse (or better?), I’m going to Las Vegas for the weekend. I’m taking Friday off and driving out there. We were able to get a free room from a friend, and I’ve been itching to go for a few months now.

In addition to all of that, I’m considering switching jobs. I’m currently in the consulting business, and one of my clients wants to hire me on full time. They just posted the job opening. I would be one of the top candidates, as I’ve been doing the job for the past 7 month. I also had input on the job description and requirements. The main reason I’d switch would be purely the compensation package. They offer 7% 401(k) matching (versus the 3% I get now), employee stock purchase plan, pension plan, and, most importantly, they’ll pay 90% of tuition and school expenses if I decide to pursue an MBA. If I end up going to a UCLA or Pepperdine, we’re talking 90% of $60,000-$80,000. Not to mention there would probably be an increase in salary,a greater potential for bonuses, and an almost unlimited growth potential. Wow, when I write it all out, it seems like a no brainer. The downside would be working for a GIGANTIC company and all that comes with it (politics, strict rules and regulations, slow moving, etc). Plus I really like where I’m working now, and theres a good chance the company could really take off. If nothing else, I’ll apply and interview for the job. It’s never bad to have options. If/when they offer me a job I can consider all my options again. That said, I somehow need to update my resume in order by apply by the deadline on Monday.

So, I told you all of that, to tell you that things might be a little slow on the blog over the next week. I’ll try my best, but I have a lot on my plate right now. So, in the mean time, check out some of the fantastic links over on the right. Now would also be a good time to subscribe to Budget Freak, so you always have the latest posts.

I’m the proud new owner of Dodgers season tickets. Well, half a season at least. The roommate and myself went in on four tickets for 40 games. They’re not the best seats (the very top deck), but they were a really good buy. At least we’ll be able to see the entire field. I found a picture of a view from our seats:

Just kidding… sort of.

This isn’t something I was planning on purchasing, so it definitely wasn’t in my budget. It is something I’ve been wanting to do for awhile, however, and it’s nice to treat yourself every once and awhile. I’m probably not going to be able to go to every single game, so I’ll be able to give some tickets away as gifts to friends or co-workers to earn a few extra points.

The only problem I’ll have to face is the price gouging at the stadium. $15 to park, $10 for a Dodger Dogs, $12 for a beer, $5 for peanuts. I could easily spend $50 a night at a game. To combat this, I’ll just have to plan ahead. I know there are places you can park for free near the stadium and walk (the roommate and I are going to scout it out this weekend), so that’ll save $15 a game, plus give us some much needed excercise. You can also bring your own food in, provided it’s not in “bottles, cans, coolers, or thermoses.” They also permit “unbroken, factory sealed plastic bottles of water and other non-alcoholic beverages of 1 liter or less.” We could easily bring a bag full of sandwhiches, peanuts, and a few cokes for each game for a fraction of what they’re charging.

First game is on Wednesday. Go Dodgers!!!

It’s now been two months since I’ve started BudgetFreak. In those two months, I’ve written 45 posts, and have received 70 comments. I’ve gotten about 1,000 unique visitors, 3,000 visits, and about 9,000 page views. I’m not breaking any records, but still much more than I was expecting.

If you’ve missed anything in the past two months, here’s what I’ve done to help myself out financially:

• Saved $75 using coupons
• Saved $300 canceling my gym membership
• Opened up an interest earning checking account at ING
• Lowered my credit card interest rates and increased my credit limits
• Started earning interest borrowing $16,800 from credit card companies for FREE, taking advantage of 0% balance transfers
• Checked my free credit report
• Opened a ROTH IRA and maxed out my 2006 contribution
• Opened a Washington Mutual Savings Account earning 5% interest
• Will save $500 a year by driving slower
• Participated in my first Blog Carnival
• Will save about $400 a year by shopping around for car insurance
• Managed to grow my net worth by 33%

I’d say I’m off to a pretty good start. So thank you all for reading and commenting, and here’s to many months to come!

Since the beginning of this year, I’ve been keeping track of my net worth. For those new to the game, net worth is basically the total of all your assets (checking and savings accounts, investments, real estate, etc), minus all your liabilities (car loans, credit cards, mortgages, etc). To see how to build your own net worth spreadsheet, check The Simple Dollar’s How to Calculate Your Net Worth. While this calculation is not the be-all-end-all, it’s a good progress indicator.

For the first quarter of this year, my net worth is up 33.8%. I enjoyed 3 positive growth months of 12%, 6%, and 14%. Most importantly, my retirement assets almost doubled, growing 82% in 3 months. Funds went from $6,800 in December 31st, to now $12,500 as of March 31st. This was mostly due to increased contributions to my 401(k), a $4,000 contribution to my ROTH IRA, and a little help from the market.

All told, I’m moving in the right direction. I’m spending less than I earn, and stocking as much as I can towards retirement. I’m still working on getting my spending down, but if I can continue these double digit growth months, I’ll be happy.

I was looking at my finances last night, and I realized my cash flow for this month is going to be crazy awesome. I’m paid on a bi-weekly schedule, so since there are 26 paychecks in a year, that means there are two months where I actually recieve three paychecks. March happens to be one of those months. My company also have a pretty aggressive bonus program, that pays out ‘Project Profitibility’ bonuses three times a year. I just got that check (just over a weeks pay) yesterday at our company meeting. Also, I recieved my tax returns this month, which was good for another $1,000.

So, this month I’ll recieve 6 weeks of pay, a company bonus, and my tax return. I wish every month was like this. Part of the money will be going towards my car insurance, which is coming due next month. Part will go to service on my car (30k mile service), and registration, another $500. The rest, I’m probably going to invest. Stay tuned for that.

Totally unrelated to personal finance, but still awesome. As part of my job, I’m onsite at LAX a couple days a week. Yesterday, the Airbus A380 made it’s US debut in New York and Los Angeles. The A380 is the largest passenger plane in the world and can seat up to 853 people. It’s 8 stories tall and it’s wingspan is as wide as a football field. I was lucky enough to be on the runway when the plane landed here in LA, and this thing is huge. Here’s some pictures…

Here is my second post in my Financial Goals series. If you missed them earlier, please see my Long, Long Term Financial Goals. I’m going a little out of order here, but I wanted to get my year long goal posted sometime before the year is over.

As this is my first year attempting to be financially responsible, I have no idea how these are going to play out. Nevertheless, here are my goals for 2007.

• Have $20,000 In Savings - I started the year with just under $14,000 in my account, and as of today, I’m just over $15,000. With 10 months left in the year, I’ll have to save an average of $500 per month. Part of this money will eventually be used as a down payment on a house, but in the mean time, it’s a great emergency fund. In a crisis, $20,000 could last me at least 6 months.
• Put $2,000 into a ROTH IRA - At my age, I can put $4,000 a year into IRA accounts, but looking at my salary and other goals, I don’t think I can swing it. So far I’ve contributed $0. With 10 months left in the year, it’s only a $200 a month commitment. Seems like a perfect opportunity to set up an automatic savings plan so I don’t even have to think about it.
• Get Car Loan Below $5,000 - Ideally, I’d like to pay if off completely, but that’s probably not going to happen. I’m 23 months into a 60 month loan, and I’ve paid off half the principle. I’m a little bit ahead, but there’s still about $10,000 to go. Most likely, I’ll use some of my 0% balance transfer money to pay off a big chunk early, then make my usual car payments to myself to pay back to balance transfer. Still on the fence about that move, but either way, I’m looking at $500 a month towards this goal.
• Make $2,000 in Extra Income - Who doesn’t like more income? There’s plenty of opportunities out there, I just have to go out and find them. This will come from a combination of side jobs, credit card arbitrage, selling stuff, blogging, recycling, etc.

There you have it. 4 simple goals for the year. It’s not going to be easy, but with a bit of discipline, I think I can do it. I’ll keep you updated as the year goes on.

I finished up my taxes for 2006 today, thank you Turbo Tax. It was pretty easy going. I tried to add up all my deductions for the year, but it didn’t come close to the standard deduction, so I just ended up taking that. I had 3 W2’s this year, and I thought that might be a hassle, but it really wasn’t. Only took about an hour of work to fill out the forms and answer all the questions. I’m going to be getting $864 back from federal and another $110 from state. I mailed in the forms, but I’m having it deposit directly to my checking account, so I’ll hopefully be getting the refund in a couple weeks.

I ran some numbers on how much tax I actually paid for the year. 3.8% of my total gross income went to the state, and another 12.7% went to my federal taxes. When you include Social Security and Medicare withholdings, 24% of my gross income went to some form of taxes.

Also, I ran some numbers on my pre-tax contributions. I paid out $560 for health and dental insurance, and contributed a total of $2,733 to my various 401(k)’s throughout the year. That 401(k) total is a little low, in my opinion. Most of the year I was contributing around 8%. Now, it’s bumped up to 12%, and in 2 months, I’ve already stashed away $1000.

I can now close the books on 2006. It was far and away my most successful year financially. It was also the only year so far I’ve been employed full time for the entire year (save 2 weeks of in between jobs). Let’s hope I can have more success in 2007.

This past week, I’ve been taking a hard look at salary, savings, retirement, investments and I came up with a list of goals. I broke the list down in Long Long Term (think 10 years - retirement), Long Term (2-5 years), Year Long Goals, and Immediate Goals. This post is the first in a series on my financial goals for the rest of my life. As the week goes on, I’ll have posts on the rest of my goals, and then, in future posts, I’ll detail specifics on how I plan to achieve these goals and introduce some milestone deadlines along the way.

Long, Long Term Goals
Although I’m still really young, it’s never to early to think about the future. You might think it’s silly to look at some of these goals now, but the earlier you start, the better off you’ll be. If you’ve ever read ANY article, in ANY publication about retirement, then you know it pays off to start young. Compound Interest is your friend, and I’m hoping to compound for 40 years or so. With that in mind, lets take a look.

• Retire Early - This is vague, but pretty self-explanatory. I want to be wealthy enough to stop working at 50 or 55 (maybe earlier?). Travel the world, golf, whatever. The idea is to stop working full time and start enjoying life.
• Pay for my children’s educations - This is probably one of the most important goals for me. My parent’s were kind enough to pay for my entire college education, and I can honestly say I wouldn’t be where I am today if they hadn’t. I’d like to do that for my children, and give them a head start on their lives.
• Be a Millionaire at 35 - This might seem pretty pretty trivial and vain (and it is), but having a net worth of $1 million will get me well on my way to fulfilling my first 2 long term goals, and will keep me disciplined and focused on my journey to accumulating wealth. Not to mention I’d really like to start calling myself a millionaire. And I’d probably start wearing robes and smoking pipes.
• Never Have to Worry About Money - By this, I simply mean I never want to have to worry about making a mortgage payment, or worry about how we’re going to pay the bills or buy groceries. It’s about making smart decisions with my money and making sure I have an emergency fund to fall back on. And I’m not just talking about a ‘couple months’ emergency fund. I mean something catastrophic happens and I’m out of a job for a year, the house burns down, and all my kids need braces, and we need to buy a new car. I want to be able to live comfortably and worry free for at least two years on that emergency fund.

That should give you a big picture overview of how I’d like my financial life to unfold. Unless I win the lottery, it’s going to take serious planning, budgeting, discipline, and maybe a little luck, but I absolutely believe I can accomplish these goals.

As promised, here’s a little background on me.

Personal
I’m 25 years old and live in Los Angeles. I graduated from UCSB in 2003 with a BS in computer science. Now almost 4 years out of college, I’m in my 4th job in a data management consulting company. I don’t like the fact I’ve had to switch jobs so many times, but I suppose I’m still at that age where I’m trying to find where I best fit in.

Right after college, I moved back home with my parents. I didn’t have a job right away, so it was really the only option I had. I was there for more than 2 years, and it really allowed me to save some money (although my spending habits were much worse so I didn’t save as much as I could have). This past September, I finally moved out on my own. I switched jobs and my commute was too long from where I was living. Now, I’m renting an apartment with a good friend and having to deal with grocery shopping and cooking once again.

Financial
Here’s a quick rundown of my personal finances. I have a WaMu checking account (which is slowly being phased out), an ING Savings account, and the incredible ING Electric Orange Checking account. In a nutshell, paychecks are deposited to the ING Checking, bills are paid, and whatever is left (hopefully) goes into the ING Savings.

I have an employee matched (50% match, up to 3% of income) 401(k) program, to which I currently contribute 12% of my pre-tax income. I have an IRA account through Smith Barney with a few thousand dollars I’ve rolled in from my previous employers 401(k) programs.

I have 5 credit cards: Discover, Capital One Visa, Sears Card, Express Card, and a Gap Card. It seems like a lot, but I’ve never carried a balance (a balance that earned interest anyway) on any of my cards. I like the cashback program at Discover, so that’s my main card. I just switched to their Gas Card, which earns 5% back on all gas purchases. The rewards are nice, in that a lot of times you can turn $20 worth of rewards into a $25-$40 gift card. I few months back, I turned $180 cash back into a $225 Crutchfield gift card and bought a digital camera. My Capital One Visa is only used when businesses don’t take Discover. The specialty cards are strictly used at their respective locations. By having those cards, I routinely get invitations to 10-50% off or 0% financing events.

That should give you a little background on where I’m coming from. Soon, I’ll be posting my goals for the upcoming months and quarters to hopefully give you an idea of where I’d like to go. Thanks for reading!