Sidebar updated, change in savings plan

I updated my sidebars yesterday. Man, did my budgets get creamed during April. I overspent on groceries (by $25) and my dining out budget (by $12). I also had to withdraw $1950 from my downpayment fund in order to pay for the last month's rent on my apartment for September and my half of the realtor's fee. Now I'm back down to 53% of my goal on my downpayment savings. Ouch.

On the plus side, I received my tax refunds (~$500) and a $500 bonus at work (which ended up being about $300 after taxes). I was able to contribute an $300 to my emergency fund, and an extra $250 to my downpayment fund. I also maxed out my fun fund.

Since I'm going to be back to paying rent as of September, I'm changing the way I save for the next four months. Instead of dividing my savings among my emergency, downpayment, and Roth 2010 funds, I'm going to put it all into my emergency fund until it's maxed out. If I do this, I'll have that maxed sometime in July. I think this is the best move, and will make me feel a lot more secure in September when my monthly expenses skyrocket with the additions of rent and utilities, and I'm not able to save as much money each month.

Got an Apartment

Well, that was quick. Or at least it probably seems that way, since I just blogged about this last week, but after a lot of searching, C and I have found a place we both liked and we're going to sign a lease this week. We'll be renting a 1-bedroom apartment about a mile down the road from where I am now. It's right on the subway, around the block from a large grocery store, and has a park nearby, too. Our rent will be $1550/month, plus electric and possibly gas (I can't remember if there's a gas stove or not), and cable/internet if we go for that. We're also going to be renting a parking spot that comes with the apartment, which neither of us needs, in order to make an extra $25-50 a month by renting it out at a slight markup to another tenant. Many of the tenants apparently need more than one parking space, so this is common practice in the building. And since parking on the street overnight is illegal here (seriously!), it shouldn't be hard to find someone to take the spot off our hands and knock $25-50 off our rent per month.

We had hoped to find a place with a bit more space (ideally, a 2-bedroom), but after looking at many, many apartments we realized that we probably weren't going to get a (clean) 2-bedroom in our price range/rent cycle, so we settled on a larger 1-bedroom. The apartment has a ton of closet space and a much bigger kitchen than I've ever had, so I'm quite excited about that. :)

When we go in to sign our lease, I plan to ask about subletting. In the off chance that I find a place to purchase before our lease is up next September, I'd like to know what my options are. I had to break my lease to move into this rent-free apartment last year, and I definitely don't want to become a serial lease-breaker. I'll also need to completely re-work my budget, since I won't have as much money to put towards my student loans or save. I need to figure out whether savings or paying down my loans is a priority. It's a tough call. If I keep possible homeownership in mind, it's even tougher; do I want to put a larger downpayment down (of course), or do I want to have less debt to my name when I eventually make that purchase? I'll probably go with savings, and drastically reduce what I pay towards my loans each month. Or, I might alternate and make a large savings deposit one month, and then a large student loan payment the next. Over the next few weeks, I'll be doing a lot of thinking about this.

Financial Achievements for 2008

Though I've always cared about saving, 2008 was the first year I truly dedicated myself to personal finance.

In 2008, I:

~Landed into this amazing rent-free opportunity!

~ Began using the debt snowball method to eliminate my student loan debt as quickly as possible. You can find a great debt snowball spreadsheet here; I've come across many of these types of spreadsheets, and this was the most useful one I've encountered.

~ Split my savings account into separate accounts to reflect my savings goals, almost meeting my $7k emergency fund goal, and reaching the halfway points of my down payment and fun funds.

~ Fully funded my Roth IRA for 2008, and saved up the full amount for my 2009 contribution, with a little leftover to go towards the beginning my of my 2010 fund.

~ Continued to put 6% of each paycheck toward my 401k. My company matches 100% of the first 3%, and 50% of the next 3%. Since I'm still relatively broke, and investing in a Roth IRA each year in addition to my 401k, this is as much as I'm willing to put into it at this point.

~ Began investing monthly in company stock and individual stocks of well-established companies that pay dividends in order to capitalize on low stock prices during a down market, and to continue diversifying my overall investment portfolio.

~ Finished the year reducing my federal student loan debt at a rate of 3% per month, and my private student loan debt at a rate of 0.3% per month. If I continue at this rate, loans will be completely paid off by the end of 2014. This sounds like a very long time from now, but I will be extremely impressed with myself if I can manage to pay off $77k, plus interest, in less than 10 years.

In non-financial 2008 accomplishments, I also:

~Got a promotion and 5% raise at my full-time job, and a dollar-per-hour raise at my part time job (I guess this one is finance-related, too :)) This was almost a year ago, and I'm hoping to add this to my 2009 accomplishments soon.

~Hung out more with co-workers (from both jobs) and attended more social gatherings. Sounds boring, but I'm a pretty shy person who feels most comfortable alone or one-on-one, so this was a pretty big deal for me. Hopefully I can continue on this path in 2009.

~Went on my first business trip - alone. I was really nervous about having to talk to people I didn't know for five days, but it went surprisingly well, and I even made a few friends out of it. Of course, my company (like most companies) is cutting its travel budget, so who knows when I'll get to go on another business trip, but it was still a good experience.

~Read over 30 books. I hope to increase that number in 2009. In fact, I should have at least one finished by the end of the day.

~Began to learn how to knit. So much fun! I'll be writing a separate post about this soon.


I'll be posting my 2009 goals this afternoon- stay tuned...

Men at Work

I discovered, upon arriving at the subway stop I get off to go to work, that the power is out for a few city blocks surrounding my office. My office building was completely shut down due to the outage, so we were all sent home. It's nice to have a day off, but irritating that I couldn't have been notified prior to trekking out to the office.

It's not a good day for an impromptu day off because the inn's owner and his brother were supposed to be working on my heat today. They're going to install a thermostat so that I can control the temperature for my apartment and the guest room above my apartment (which also suffers from lack of heat). Unfortunately, the owner's brother is not very professional when he does work in my apartment. I once came home to find my apartment completely trashed because he had been working on replacing my heating pipes; like, he had actually spilled my cat's litterbox all over the floor. Gross. I really appreciate his willingness to work on the apartment and get this done, but it's frustrating to have to clean up for hours after he leaves. Hopefully, with the owner here, he'll be more cautious. I put some dropcloths down in hopes that it will minimize the damage.

I've just been informed that they're now going to come over after 5, which is really annoying and inconvenient. Since I'm home it's not so bad, but I would've been really pissed to show up at my apartment after work, ready to make dinner, only to find these two clowns working in my apartment. I know it probably sounds like I'm a whining, ungrateful brat, since I don't even pay rent. I definitely am grateful. I'm also a highly routine-oriented person, and having people working my apartment seriously disturbs my routine and throws me completely off kilter. Here's hoping they get this done quickly, with minimal mess.

Edit: They never showed up, so I put off exercising/showering/eating dinner for nothing. Bah.

Wanted: Heat!

My heat sort of worked for a few days, then it was unseasonably warm for a couple of weeks, and now it's November for real and my heat isn't working at all. The inn's owner says he's coming to work on it with his brother -- next Monday. WTF. It's between 30 and 42 degrees here for the rest of the week! Why couldn't they get on this LAST WEEK like they told me they would?! Nights are OK, because I have an electric blanket to heat my bed and keep me warm. Mornings, on the other hand, are terrible. It's freezing, and getting out of bed (not to mention getting dressed) is extremely difficult and painful.

This is the crappy thing about living rent-free. I can complain every single day, but I have no power in this situation at all. I'm pretty much at their mercy, which sucks. If things get really bad, I can crash in one of the vacant rooms at the inn. This is free, but I do need to leave the housekeepers a tip for cleaning the room, which can get expensive if it's something I have to do constantly. We'll see what Monday brings.

Earning My Keep

It happened again. In fact, it's been happening so often lately that I slept through it last night. Twice.

Emergency calls had been steadily kicking my ass for much of October, and now they've crossed over into November. A majority of these calls aren't actually emergencies (or for that matter, guests of the inn). I get hookers calling looking for rooms at 2am, taxi drivers trying to find out who called a cab (hint: if it's 5am, I've been asleep all night, not working, so...no idea!), and people who are just generally clueless and need a little extra hand-holding. This type of call is generally ends pretty quickly, and I'm usually able to fall asleep again within 10 minutes or so. However, the calls of people screaming about temperature issues (annoying, but a relatively quick fix), inability to use their room phones/wireless internet (not actually an emergency), or needing an extra bed (ABSOLUTE WORST) take much longer to recover from. Usually it's a half hour or more before I can fall asleep, and when you factor in the time it takes to tend to these matters, I'm losing valuable hours of sleep per week.

I keep telling myself it's worth it to live rent free, and I know logically that it is. But when I fell asleep at 7:30pm last Friday, I realized that my body isn't aware of this arrangement. Poor thing.

Last week

Things have been crazy lately. Part of living here rent-free is being on-call, should any guest emergency arise overnight that requires innkeeper intervention. Last week, I had a streak of five or six days straight in which I received emergency calls. I normally get fewer calls than that per month! A couple of them were just people arriving late who didn't know what to do, which didn't require any action on my part, but I also had a lockout or two, plus a couple of temperature complaints (our central heating/cooling system is ridiculous). I feel like I've really earned my rent-free status. ;P

It's been quiet so far this week, and I'm hoping it stays that way. I'm exhausted!

How I got here

When I graduated college in 2006, I took roughly $75,000 in student loans with me. My starting salary at my first job out of college -- just $31,000 -- was less than half that. I lived in a small studio apartment with living expenses around $1,000 per month. Even with my small salary, I felt comfortable about my finances, and I was able to save a decent amount each month. In addition to my full-time job, I had an ongoing freelancing gig I'd been doing for a year or so that brought in a couple of hundred dollars every other month.

In November 2006, things changed: my student loan payments kicked in. The interest rates were all over the place, and my combined monthly payments were over $1,000. In an effort to exert some minor measure of control over the dozen or so bills that were coming in every month at wildly different interest rates, I consolidated most of my loans, bringing my monthly payments down to about $575. I made the payments on time every month and still had a little leftover to put in savings, but I definitely felt squeezed.

A few months passed, and I got a better job in publishing, my field of choice. Had I accepted the $27,000 starting salary offered, I would've taken a $4,000 pay cut, which I just couldn't afford. Despite being told that the starting salary was non-negotiable, I got them to agree to pay me what I had been making at my previous job. Around the same time, I moved into a larger studio that increased my living expenses by about $100 a month. I panicked and started applying for part-time jobs, and wound up landing a job as an innkeeper at a bed & breakfast just down the street from my new apartment. I worked only one shift per week, and after a probationary period, I was making $12 an hour plus monthly bonuses (between $100 - $150) based on sales, bringing in an additional $400 a month, on average.

This February, at my annual review for the full-time job, I was given a promotion and a 5% raise (the company rarely offers more than 3%, pathetically enough). I also received a performance-based bonus of $4,500 a month later. Meanwhile, my innkeeping hourly rate went up to $13 at the time of my one year anniversary. I was still freelancing, too, though not as much since my computer died around Christmas and I couldn't bring myself to buy a new one.

Throughout all of this, I was doing my best to save at least $300 per month, though I frequently put away $500 or $700 when I could, or more, in the case of the aforementioned bonuses. I was aggressively paying down my student loans. I was also investing in a Roth IRA, and putting money into my 401k at work.

Things went on this way for a while. I worked no less than 6 days every week, doing everything I could to pull in extra cash, and saving as much as I could after making my gargantuan student loan payments every month. I worked really hard, and made a dent of about $5,000 on the principle of my student loans within the first year of paying them. I was financially stable, but I didn't *feel* stable at all; I worried about money all the time, and felt guilty any time I went out to eat with my boyfriend, or bought something for myself (which hardly ever happened).

I'm incredibly lucky.

Last month, one of my fellow innkeepers abruptly quit to move out to California, freeing up the one-bedroom apartment attached to the inn. This apartment is given to the innkeeper who agrees to take all the emergency calls that come in after hours. In exchange for being the on-call emergency contact, this person is given the apartment, along with all electricity, gas, cable, and internet costs waived. Though my lease wasn't up until May, I could not pass up this amazing opportunity. I quickly enlisted the help of a broker, rented out my apartment within days, and moved into the inn. I even inherited several pieces of furniture (including a less than one-year old pillowtop mattress) from the girl who lived here before me.

My expenses have decreased dramatically -- I'm now able to save over $1,000 a month in addition to the large payments I apply to my student loans. At this rate, my loans will be paid off within the next 7 years. I'm also putting money away for a downpayment, as I hope to purchase a condo or home within the next couple of years while prices are still low.

Living rent free is great, but it's not without its challenges. With an extra $1,100 in my pocket every month, it's really tempting to spend. People in my life who know about my arrangement pressure me to go out to eat or to go shopping all the time, and frankly, it's hard to say no. When I do make these purchases, I don't feel a lot of the guilt I used to, which scares me. Being able to breathe easier shouldn't mean spending more -- just because I can now afford more doesn't mean I *need* more, afterall. I did just fine for the two and a half years before I moved in here, buying clothes and going out to eat sparingly. I want to hold myself accountable to my goals and financial aspirations while I'm living here. My goal is to live well below my means for the next year and save as much as I can so that I'll never have to pay rent again.