Financial unredo (yeah I made “unredo” up)

If you’ve been scoping PF blogs for a while, you’ve probably seen some posts realted to financial do overs. Ya know, a time in your life that you made a terrible financial decision and desperately wish you could rewrite the past. I thought today we could take a fun little twist on that topic and ask what would you financially unredo.

Yes I know, unredo is not a word. But I’m a Ninja, and one of the perks of being a ninja is this: Ninjas can do whatever the heck they want… including make up words, drink soda and eat pop rocks at the same time, and sleep with their eyes open. Let me define unredo for you.

Unredo transitive verb-  to not want to do over again (although common sense says you should)

Are you catching on yet? What is one particular financial decision you’ve made, that you know you should want to redo, but deep down inside you are kind of glad you made the “mistake”.

Here’s my financial unredo…

I’m really glad I only worked a few hours a week while I was in college. This was a terrible financial decision, because part-time  campus jobs, don’t pay squat. Needless to say, I graduated with $28,000 in student loans. Financial wisdom (whatever that means) would say, go to a cheaper school or at least work full time to cover the bills. But if I could do it over again, I probably wouldn’t change a thing. Afterall, $28,000 isn’t that much to pay for four years of pure crazy awesome fun right!?

To see a second example of a financial unredo, you can check out my post about my favorite dumb but fun expense.

Now that you hopefully understand what I’m asking, I would be tickled with warm fuzzies (that sounded pretty gay) if you all share a financial unredo from your life. Did you buy a new car, realize it was kind of stupid, but like it too much to wish you could change the past? Whatever your unredo is, I want to hear it!

Who pays $4,000 for a honeymoon!?

As Girl Ninja and I approach our wedding day, we have began the honeymoon planning phase. I have alluded to the honeymoon cost ($4K) in a few posts and have received my fair share of criticism. Especially after this article got picked up by the Consumerist. After reading some of the “not-so-nice” comments I can’t help but think this is what some people are saying….

Pam: Ninja must be off his rocker. Who does he think he is, spending $4,000 on a honeymoon?

Deb: I know. It’s like he thinks he’s one of those millionaires or something. Seems pretty stupid to me.

Pam: Yeah. I totally agree. I can’t believe he thinks he’s qualified to have a personal finance blog when he clearly lives a life of luxury.

Deb: I know right. He’s totally hypocritical. Plus, he probably smells weird.

Am I planning on spending $4,000 on a honeymoon? Yes. Do I care if some think that is too much money for a vacation? No. Sorry, but I don’t. Girl Ninja and I are looking to head somewhere in the Caribbean, possibly Aruba or Puerto Rico. I have made a spreadsheet with some of our favorite places, and the cost of each trip….

As you can see, the estimates run from $3,500-$4,200 for a seven day vacation. Now that you know how much we are looking at spending and where we are planning on going, it’s time to roll my sleeves up and put the boxing gloves on.

Here’s why I’m okay “blowing” 20% of my savings on a “silly” vacation…

1) Girl Ninja and I both have a relatively limited exposure to the world. Mexico, Canada, and the Marshal Islands are the only places I’ve been. GN’s experiences are pretty similar. We figure our honeymoon is the perfect excuse to gain some insight in to a different culture. Sure we could probably spend $2,500 and a cash advance on a week long vacation in Hawaii, but we aren’t just taking a honeymoon to sit on a beach all day and do nothing. We want to interact with the locals, go on some tours, and take advantage of all that a foreign country has to offer.

2) I have the money to do it. I don’t think anyone who reads my blog regularly, would say I have a problem saving money. In fact I’ve increased my net worth by over $30,000 in the last year. I save diligently, so that I can afford to do fun things when the opportunity arises. Yes, my savings account will take an 18% hit, but at my current savings rate, I will be able to recoup the loss in a couple of months. I bet if I said I had a $10,000 emergency fund and a $10,000 vacation/fun fund, instead of $20K in savings, people wouldn’t give me any grief. Sometimes people, including myself, forget it’s okay to spend money. I think I’m due for a little treat.

3) This honeymoon is going to be a big deal for our relationship. Our honeymoon will be a time of many firsts. I’ve shared reasons why GN and I do not live together, but I should also note, we have never even stayed the night in the same room. Thus, we have never vacationed together, not even a weekend get-away. The honeymoon would be the first time Girl Ninja and I sleep in the same bed together, the first time we wake up next to each other, the first time I have to remember to put the toilet seat down after going potty. It will be our first taste of the married life, and we want it to be AMAZING. If you haven’t caught on by now, let me spell it out for you…

Even though we have been together for 3.5 years, we made a choice early in our relationship to NOT participate in any “adult” activities until we got hitched. (wow that felt awkward to type)

I know some of my critics have my best interest at heart, and don’t want to watch me throw away a good chunk of change on a one week trip, but I hope you see that this is much more than “a vacation”. It’s going to be a time of many firsts and I’m totally fine splurging for a nicer vacation to ensure the week is awesome.

Okay, now that I feel totally awkward for sharing point 3, let’s open the floor for discussion.

1) Where do you think I should go on my honeymoon?

2) Where did you go (or want to go) on your honeymoon?

3) Do you think I’m spending too much on “a vacation”?

4) What’s the coolest thing about the honeymoon experience?

Net Worth: March 2010

I’ve got a crush on the last 30 days, because my NW soared. I want to fly like an eagle, I want to run through the halls of my high school, I want to shake my money maker (those are all song lyrics in case you didn’t catch on). My net worth is on the up and up, and daddy likes what he sees. I have a strong tutoring and blogging month to thank for the increase. Let’s take a look at the grizzaph…

Checking Accounts: $1,983, +$106. Made some transfers from checking to the good old INGdirect savings account. I love ING. They don’t pay me to say that, but I wouldn’t mind if they wanted to…you hear that ING… Give me your monies!!!!

Savings Account: $22,765, +$1,700. I’m WHOREding (haha get it!) cash for the time being, until I get a better grasp on what lies ahead. I’ll be using about $4K of this shortly to pay for my upcoming honeymoon. Check back tomorrow to see why I’m willing to give up 4 grand for a vacay.

Roth IRA: $13,539 +$171. I have fully contributed to my Roth since my senior year of college. Right now my account balance is about $700 less than my total contributions. Hopefully soon, I will have actually made money from investing!!!!

TSP (401K): $12,313, +$554. The standard 5% contribution heads this direction each month. I also get that 5% fully matched. Can’t pass up free money now could I?

Student Loan: -$15,612, +$391. Yeah I know, some of you hate me for hanging on to my student loan debt, when I could pay it off. I’ve paid it down $13K in the last two years, that’s got to count for something though…right?

That put’s me at a net worth of….drumroll please….. $33,525!!! I’m up $3,291 from last month, which makes my heart smile. My next paycheck should have my increased salary in it, so I’m hoping for bigger and better things in the coming months!!!

**If you have wondered why the blue bar (debt) in the graph sometimes increases, it’s because my credit card balance gets taken in to account each month. Even though I pay the balance in full it still appears as a “liability” in Quicken. I just deduct this from my checking account balance to give myself an accurate net worth reading. This is why my actual NW increase, may not always necessarily match with the totals of each category, but I promise the overall total is REAL. I chose not to include possessions (including my car) in my NW calculations, which would probably increase my worth by about $8K.**

Do I have to change the name of my blog?

What situation would you rather be in…

Situation Uno: You could have $20,000 in savings, but also have $15,000 in mid-interest debt (7%).

Situation Dos: You could have $5,000 in savings, but zero debt.

I’m currently sticking with situation uno. I have $22K in the bank and a little over $15K in debt. I could pay off my student loan tomorrow, be truly debt free, and still have a small emergency fund. I chose not to. Dave Ramsey would be pissed! My blog’s title is Punch Debt In The Face, but by choosing to remain in debt, perhaps I should change the name to Punch Debt In The Face When You Feel Like It. It doesn’t quite have the same ring, does it?

I would be all about transitioning to situation dos if not for one small detail. I’m getting married. There are a lot of unknowns at this point in my life. I know I will be paying for a honeymoon (probably around $4K) and will face other wedding related costs over the next few months. Not having to pay for the actual wedding day has been a huge blessing, but I will still have some financial obligations.

I have no clue what to expect for monthly expenses as Girl Ninja and I move in together. I’ve never lived with a girl before, but word on the street has it those things can be expensive. It’s also unclear what Girl Ninja’s income will be. She is a substitute teacher in California, and we all know the California government can’t manage money.

Maintaining a rather large savings account keeps me from stressing out about the “unknowns” of marriage. Personally, if I paid off my student loan, and only had a few grand in the bank, I would be super anxious about our stability. So for the time being, I plan to continue operating in situation uno until, at least, the end of the year. After a few moths of the married life, and once I have a better handle on our future, I will strongly consider paying off my loan.

So what would you do? Does the security of having a large amount of cash in the bank keep you from stressing about your debt? Or does debt overwhelm you, and you would get rid of it in an instant. I have a feeling there will be a pretty even split.

I can’t wait to take on more debt….sike!!!!

So I received a free 9 month credit monitoring package from TransUnion as part of some class action lawsuit I was unknowingly involved in. I have to say, having the ability to access my credit report whenever the heck I want is pretty dang convenient. I still don’t think I’d pay the $12/month the credit monitoring regularly costs, but I could see why some people might.

As I was poking around and exploring all my credit details, I stumbled upon my credit score. Here’s what I saw…

Cool. My credit score isn’t crazy high by any means, but it’s probably not too shabby compared to most other 24 year old males. I got a good chuckle out of the next section titled “Ways to improve your credit score.” Here was their suggestions…

Okay bucko, I’m on to your clever tricks. You want me to get in more debt. Well I got two words for you… Suck it!!!

I love that the first piece of advice suggests that I do not have enough revolving debt. Apparently my $16,000 student loan debt isn’t sufficient.Their solution? Go take out a bank loan, an auto loan, a business loan, and maybe finance some plastic surgery. Surely then, my credit score will increase! Think about it, I can go rack up a good $30K in debt to raise my, already good, credit score a few points higher. Where do I sign up!?

The second recommendation kind of shocked me. I knew multiple credit accounts helped boost your credit score (see point one), but I never really thought I would be told I needed MORE credit cards! Like I said, I’m 24. I already have three CCs (all with zero balances). Do I really need to go sign up for another two or three just to give my credit score an artificial bump? Hell to the No I don’t.

There really isn’t much I can do about the third recommendation. I’ve only been legally allowed to have a credit card for six years, but apparently that isn’t good enough for the credit score gods. Perhaps I should have considered illegally applying for a credit card when I was 8 years old so I had a “longer” credit history. Stupid, stupid, stupid.

I have no plans in the immediate future to accumulate any more debt or open any new credit accounts. I guess this means I will never break the 800’s as far as my credit score is concerned. Sure having a good credit score is important, but there is no way in H-E-double-hockey-sticks I am willing to take on stupid debt just to do it. I’d rather have $50K in the bank and a 760 credit score than$50K in debt with an 820.

Have you ever had experience with a credit monitoring program? Do you know your credit score? Do people actually follow this crappy advice? Has anyone out there ever actually accumulated debt simply for the sake of improving their credit?

Vote for me or I’ll punch a baby

So I found out the other day that I had been nominated by my fellow bloggers for a 2009 Plutus Award in the category of “Most Humuours Personal Finance Blog”. That’s right suckers, at least a few of you think I am funny. You probably have a few questions like…

What are the Plutus Awards?

They are basically like the People’s Choice Awards for Personal Finance blogs. If I don’t win, that means you didn’t vote for me. And if you don’t vote for me, that means you are a dumb face.

Why Should I vote for you Ninja? There are way funnier PF blogs out there.

True, there are funnier blogs out there, but I’m keeping my fingers crossed that when you go to vote for Budgets Are Sexy, you accidentally vote fore me 🙂

Who is responsible for the Plutus Awards?

My man Flexo over at Consumerism Commentary is the the mastermind. He put it all together, so if you think it’s stupid, blame him, not me.

How do I vote?

Head on over here… find the category  “Most Humorous PF Blog”… vote for me… DON’T VOTE FOR THE OTHER GUYS… give yourself a pat on the back for being not-stupid!

I voted for you Ninja, now what should I do?

You should laugh because this picture is funny…

THANKS FOR VOTING FOR ME!!!!!

Oh and I guess I have to provide some type of financial advice real quick….

Don’t have kids…ever…those things are expensive.

Okay bye. See you tomorrow 🙂

p.s. GO VOTE!

I save like a G

I love today’s title because it holds double meaning. I originally meant I save like a G (as in Gangsta). If you didn’t know, I’m the ghettoest (is that a word?) personal finance blogger this side of the Mississippi Milky Way.  I love rapping, hip hop music, making beats, and learning about compound interest. If that’s not straight hood, I don’t know what is. Not only does “I save like a G” mean I’m a gangsta, but it also can be taken literally. I really do save about a G (as in a grand) each month. In fact, last month I had $1,800 in discretionary income.

Today’s blog post was inspired by a loyal reader who commented on yesterday’s post. MattyIce wrote…

What is your Percentage of Savings? Is it 15% and then that 15% is divided among your IRA, Savings, and Student Loan Payment?

Well MattyIce, here is my super-dee-duper-uber-complicated formula for my savings…

Basically what I’m trying to say is I have no savings plan. Here is how I actually decide what I do with all that discretionary income.

First, I take my baseline net income (I know each month the minimum amount of $$$ I will bring home is $2,700). Generally, I supplement that with a couple hundred dollars in side income. I also know that my expenses each month generally hover between $1,500 to $2,000 (depending on the month). Thus, I usually have about $1,000+ each month in “do whatever the heck I want” money.

Most people, pay themselves first. Meaning they treat their savings as an “expense.” Before they pay any bills, they throw X% of money in to their savings account. While I totally understand why people do it, I don’t really need to. I don’t have a problem saving. I’m frugal by nature, and frugality leaves me with discretionary income.

So what do I do with my discretionary income? It’s pretty simple, I take all of my left over moolah and throw it in my savings account. Sometimes, when I’m really feeling anti-debt, I’ll take a thousand dollars out of my savings and throw it towards my student loan. Other times, I pay minimum on the loans, and keep the discretionary income in my savings account.

As far as saving for retirement, I have 5% of my gross income thrown in to my 401K. I don’t actually use a dedicated savings account for Roth IRA purposes. Since I am able to hoard so much cash, I don’t have to set aside my retirement savings separate from my main account. Periodically throughout the year, I will make contributions to my Roth IRA, from my one savings account. There is no method to my madness, but it’s what works for me.

Essentially to answer your question MattyIce. I have ABSOLUTELY NO SAVINGS PLAN. Instead of subscribing to a super complicated method, or trying to manage 8 different dedicated savings account, I throw all of my discretionary income in one account and take from it when necessary (i.e pay down student loan, contribute to Roth IRA, buy an engagement ring).

Let’s look at a few past months to see what my savings rates were…

January 2010: 48% (of net income) saved

September 2009: 11%  saved.

July 2009: 53% saved

As you can see, my savings rate is all over the place. My “non-plan plan” is much different than a lot of methods, but it’s what works for me. How do you all decide what you are saving? Do you pay yourself first? Do you save an exact percentage? Or are you like me, and just throw all your leftovers in a savings account? Do you have multiple savings accounts for different things (i.e. new car account, retirement account, kids college, etc)?