Twitchy

I was in a fender bender this past weekend. It sucks, but there you have it. No one was hurt, but I have expenses now that I hadn't planned on. Rental car ... deductible ... mental and emotional health (believe me, those last two items are big expenses).

The good thing is that at least I have the money to cover the financial part of it. Four or five years ago it would've really hurt.

Also remarkable is that I'm back to being debt free. I just scheduled the payment for my new computer and the awesome, gorgeous new rug I bought for my living room (on sale for $179 from nearly $800), both of which I put on AmEx. I wasn't thrilled about taking that chunk out of savings, but it was either that or incur interest. Since my savings earn less interest than what is charged for credit, it made more sense to pay it off.

But ... wow, do I ever hate seeing my savings balance go down. Hate it. Just wait till it's time for me to plan (and pay for!) my vacation. By then I will have saved more money, and there's an "extra" paycheck coming in May. I will be able to afford for it, but I will hate spending the money. At some point I've got to stop getting twitchy when it comes time to pay for things.

Monthly Update: February 2012

I can't remember the last time I did a monthly update, and to tell you the truth, I don't feel like looking it up. (I know, I know. I'm lazy.) And this isn't going to be a huge post. But I did realize I hadn't checked in in a while and thought enough had happened that warranted an update.

First, I finally bought a new laptop. I'm typing on The Precious now, actually. I decided on another Mac, and I'm very happy with it. I purchased it with my AmEx because of the cash rewards and for the warranty protection, but I have more than enough in savings to pay off the balance. I will be meeting with my financial advisor sometime this month and will ask what he suggests -- whether I should pay it all off in one fell swoop, or whether it would make more sense to pay it off in installments. I'm leaning toward to the former.

Second, for the first time ever, I filed my tax returns electronically. Yeah, yeah ... what took me so long. Well, cheapness is one reason. TurboTax ain't free. And the one year that I tried to use the FreeFile thing, there was a technical glitch and I couldn't access the forms necessary for my freelance income. And last year, I had to file on paper because of the home buyer credit. Anyway, back to my point: I filed electronically and it was a breeze. Like ... I'm embarrassed for having avoided it for so long and laboring over my returns.

I'm getting back a decent refund, one that's slightly more than I expected. And the refund for my state taxes is much more than I expected. I do love itemized deductions. I'll be using some of it to help pay for my Paris trip, which I am still planning. The rest will camp out in savings, which brings me to this ...

Third, The savings are slowly getting back on track. Mind you, I'm about to eat into it to pay off The Precious, but I still feel encouraged.

Other developments include the purchase of an area rug for the living room. I ordered through Gilt Group. It was deeply discounted (regularly $795; paid $193, which included shipping). It's pretty darn perfect. Today I finally came up with some ideas for the odd space in my living room, but I want things to settle down before I start buying things to bring my idea to life. That's the good thing about owning, I've discovered. I can take my time.

OK. I think that's it for me. Peace.

And Then There Were 2

When I first started this debt blog, I had eight accounts spread among six financial institutions. And then I added a small local bank to the mix. As of today, I'm down to two banks.

I started consolidating a while ago, first cutting one of the two credit unions, and later cutting SunTrust when they decided to charge a monthly fee for using debit cards. (While they gave in to customer pressure shortly thereafter and changed the policy, it was too little too late for me.) I opted to close my ING account with Capital One bought them. In the end, I figured I'd keep HSBC as my "cookie jar" account for emergencies -- the account that's to remain just out of touch -- but when their website glitch the other day locked me out of my own account, resulting in my spending an hour on the phone -- most of which was spent on hold -- I reconsidered. Rather than have them reset my password, I had 'em close the account and send me my money.

As of today, I'm officially down to two banks. One is my "regular" bank. It's where my paycheck goes. It's where my main savings account is. The other is the credit union from my old hometown. I've had it since I was in college, but never really used it beyond getting my guaranteed student loan and keeping a token amount in the savings account. I have at various times forgotten that savings account even exists. That account will now serve as my cookie jar. I have set up a small but reasonable amount from each paycheck to be deposited directly in it. There is no online bank-to-bank transfer option -- an "inconvenience" that will keep me from tapping into it. But it's not so inconvenient that I can't get my butt to a local credit union service center to access the account.

I'm officially out of the big banks. Yay!

In other news, I've had to help a relative with a financial emergency. As annoyed as the situation has made me (he should be more responsible than this), I'm also grateful to be in the position to help.

Lastly, I've done a rough calculation of my tax return and it looks like I may get back more than I thought. While my refund will help fund Paris later this year, it will also help me get my savings back on track to where I want things to be.

I feel like I'm finally regaining some control following my spending spree in 2011.

Happy 2012!

I know, I know. It's been a while. My apologies. I've been fairly busy, and to be honest, there hasn't been that much to report. But there are two noteworthy things:

First, I entered 2012 free of credit card debt. This is my second year in a row of being able to say that, and you know what? It feels as good as it did last year.

Second, I still have savings. Mind you, I don't have as much as I expected, or would like, but the simple fact that I have savings is a good thing.

2011 could be described as the year of "Woohoo! I'm debt free!" It was like a small party. When I saw something I liked, I bought it. I didn't think about it; I just got it. Sure, there were some things that were in the plan -- the mattresses, a new couch -- and some things that weren't in the plan but were needed, like when my TV died and I got a new one. And then there were the many other items that were neither planned nor, really, needed. (Though I suppose one would argue that the only things needed are food, clothing, and shelter. But you know what I mean.) There were things like the blender, some pricier-than-usual clothes, and my recently acquired 1950s-era end tables. There was more, but those are some highlights.

2012, however, will be the year I seek equilibrium. I still plan to hit Paris sometime this year, but that's the only luxury I will allow. I will be paying for that with my IRS refund. Another major purchase is a new computer. I don't consider that a luxury given that this computer is so old that I can no longer run updates on it. It's gotten exceedingly slow, the battery doesn't stay charged, and the P key works pretty much when it feels like it. My fantasy is the 15" Powerbook, but it's way too expensive. So I'll get the small one. I will get a wireless router too at some point, but that's not a priority.

So that's it in a nutshell. I'll try to be better about checking in. Happy new year!

A Word About the Financial Planner Dude

I know I've mentioned him here before and how I've known him for a long time though I only recently started using him professionally. You might be asking, "What are you doing spending what little money you have on this dude?" Well, I questioned that myself a time or two. That is, until I actually started meeting with him.

It goes beyond him giving me such "advice" as "Don't spend. Save." Sure, that's part of it, but it's only a small part. He's helping me consider my psychological and emotional relationship with money. Why I panic when it comes time to spend money. The other thing is accountability. Much like this blog was when I was $20K+ in debt, having him gives me someone to answer to.

Mind you, he's also been helpful. He helped me redistribute my retirement fund through work, which has saved me a fair amount of money given the swings in the market. I've now also got a Roth IRA. And he's helping me see the bigger picture (and relax about it) instead of obsessing about the short term.

Despite all that, though, I debated about paying for another year. Now that I've got things in place, I wondered if I needed it. But since I have literally no one else in my life who knows a thing about money, I figured I'd at least do his minimum service -- basically I pay half his full rate and have fewer visits during the year. But given the low complexity of my financial situation, that shouldn't be a problem.

So when I went in yesterday, I had prepared myself for him to persuade me to do at least another year at the full rate. But no. In fact, he didn't even discuss that issue until the very end, and when it did come up, he reminded me that I was absolutely under no obligation. I told him that I understood that. And then I told him that given how simple my situation is, and considering the amount of money I'm dealing with (very little, I'm sure, compared with what he's used to working with), that maybe the minimum service would be better.

Which, he said, was exactly what he was going to recommend, and for those same reasons. It made me feel good knowing that he wasn't trying to take advantage of me and it just confirmed that he has my best financial interests in mind. And it feels good having someone with his knowledge on my side, especially as I get older and my needs change.

Be the Turtle

I met with my financial adviser yesterday. I hadn't talked to him since summer, before I received my home buyer credit. Back then I had this notion that by October, I'd have a good $10,000 in the bank -- after buying my couch. So it was humbling when I went in yesterday with my paltry $5,500.

I'm still not sure what happened. Sure, there was the couch. And I paid off the mattresses. There were the unexpected car repairs, from both the accident and the battery problem (which was confused for a starter problem, causing me to spend $$ for two repairs). And I've bought a little of this, a little of that for the condo: good-quality covers for the balcony furniture, a trunk to hold my gardening stuff (and the materials to help weatherproof it), funded my HSA to pay my copays, and so on and so on.

So. Yeah. Not $10,000. $5,500.

But I'm still debt free. And that's a big thing. Mind you, I have used my credit cards, but I pay them off every month.

My planner, Ted, is awesome, though. He didn't balk at the amount or reprimand me for not having what I had thought I'd have. Rather, he reminded me of my accomplishments: I've remained debt free, I opened a Roth IRA and started funding it this year,  and I've maintained my savings. He thinks I'm in good shape.

In fact, he said, he wants me to loosen up and stop freaking out every time I have to spend a significant amount. He's concerned about my psychological and emotional relationship with money, the anxiety I feel when it comes to letting the money go. For example, my computer is old and needs to be replaced: the disk drive doesn't work, I can't use it without the power cord because the battery is so old, and it picks and chooses when I can use the "P" key. Likewise, my cellphone is about 8 years old. Parts are actually starting to fall off of it, and it no longer allows me to make calls when I go visit my parents. But I keep delaying these purchases.

We talked about that at some length, and he was very patient. His worry is that by my putting off a few occasional purchases out of fear of spending the money, I will be hit down the road with having to spend a much greater amount of money when I have to replace a lot of things. Go ahead and take care of these things incrementally, when I can and not when I have to. Take care of the computer and cellphone now, he said, and next fall I can focus on getting more furniture for my place. When I grimaced at his advice to get the computer now, he laughed. "Most people would be thrilled for their financial adviser to tell them to go buy a new computer." He told me I can afford it, and it's also about my quality of life.

"You're in a good position to do it," he said. I told him that I didn't feel like I was, that the market was doing crazy things and that it didn't seem like anything was changing, no matter what I did or how much I saved. He basically told me to chill. The way we've structured my investments benefits from volatility, so when things start to level off -- be it 18 months from now or three years from now -- the balances are going to take off. "You'll be amazed. We're going to look back and you're going to say, 'Remember when I was complaining about my balances!'"

In the end, he said, I'm in good shape. I need to relax. I need to stop rushing things. "It's like the story of the tortoise and the hare. Slow and steady wins the race."