Finance Snapshop – May edition

So I said I was back, and I am! It’s actually taken a lot of thought to figure out where I wanted to go from here, you know, fresh starts and all that jazz 😉 So after outlining a few ideas of traditional posts I’ve done that I like and figuring out new things to push my comfort zone, I’m starting with the basics. Where I’m at. It’s hard for me to look at myself, because the knowledge of what to do and what not to do is in my grasp, in my head even! And yet, here I am.

Not quite in financial ruin yet

Pretty Much

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So I am in no way in financial ruins. Every time I look at my bank account and get a frog in my throat, or open my wallet with a shudder, I try to put things into perspective.  The well-being of others does not rely on my financial success; I am not bankrupt, I am not homeless, hungry, or sick. I’m just a broke college student with no one to blame but herself who needs to make better life choices and actually stick with them. So where am I at right now?

  • Discover: $1,401.49
  • Checking: $155.01
  • Savings: $0
  • Cash: $100.05
  • Loans & Interest: $13,753

This puts me at a cool –$14,899.43 as far as networth goes. Well, looking back at it almost a year ago, I’m down by $4,752.43 from –$10,146. I was really confused until I remembered that I anticipated $3750 in loans that I ended up not taking out that were accounted for and that I valued my car at $5000 (it has since had some…problems); however, I really tanked my savings and cash (plus I got that…credit card). And even in writing this post I wanted to mislead myself and look at my networth as having “gone up,” when it really didn’t at all. I never had the loans I was taking into account, so my networth was never that low in the first place. Denial is not just a river in Egypt, y’all.

Of course, I’m not exactly pleased about this, but a great quote by Thoreau is “Never look back unless you are planning to go that way.” Of course we should always learn from our mistakes (like don’t charge Christmas to your card, and when you get reimbursed for expenditures, treat it as a reimbursement and not as “Ooooo free monies!”). Or, in my case, even though I KNOW KNOW KNOW that credit card money is not actually my money, to not say “I have $400 left of my limit! That’s $400 I have to spend!” And curbing emotional spending. And hobby spending (knitting can get expensive). And not just avoiding my finance-related life out of shame. I really love the PF atmosphere and am genuinely interested in it and getting better. I need self-control. And I need it soon.

As of right now, I’m living with my parents until I leave for an internship in Pensacola, FL on May 24. There, I will have free housing and meals, and a $3000 stipend. That last bit is pretty important because as of August, many things will come to a head.

  1. My Discover Card will have an interest rate (est. 17-20%)
  2. Tuition. I dropped my 2 minors in order to drop my tuition from $3200 to $1500, so that helps, but at least half of it is due the first week of August…so $750 bones…
  3. Rent & deposits on my first ever big girl apartment
So the plan is to get an additional job while in FL (the internship is 30 hours a week, so I would have the time) so that I know for sure I can take care of all of those financial obligations. The next step is building up my EF  and savings. And loan interest repayment…but I’m getting into another post entirely here 🙂


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The Ladder of Success

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That’s pretty much what I feel like about 70% of the time I try to budget. What I’ve learned so far this month: you should always have a miscellaneous budget (for things like school supplies, clothes, small replacements, etc). When I went to Target yesterday (before taking my brother to the movies), I lost all thoughts of a budget and bought what I wanted. Granted, I did make very good choices (i.e. I will put back the giant thing of face wash that I’ve never tried before, & I’ll try the little sample first, I won’t buy ten-thousand notebooks, etc), but when I got home and started to put things into my budget sheet, I was at a loss. Where do I put leggings (which were necessary for me to be able to wear some dresses without being inappropriate) or a composition book? It’s certainly not food or a teaching certificate. Honestly, my first instinct was to redo my budget. What a simplyawful idea right? But it was my first reaction, to fix my mistake by adding it to my budget so that it wouldn’t be a mistake.

But doesn’t that defeat the purpose of a budget? To me, a budget is a set of goals for spending your money. You anticipate what you should be spending, and then spend within that. Changing it (except in extreme circumstances) to compensate for spending completely defeats the purpose of having a budget. Maybe not having this realization before is why budgeting never helped me. I think that this is a pretty useful lesson for my first month of budgeting. When I do my end-of-the-month wrap-up, it’ll be more satisfying to see if I stayed within budget, contributed to my EF at all, & how it will affect my budget for September.

What did y’all learn from your first budgeting attempts?

-L.

Start your Emergency Fund … Now!

An Emergency Fund…you know, I had the best intentions of having one. You can even read earlier posts if you don’t believe me. I had reasonable budgets drawn up and had resigned myself to the student loans necessary for tuition now that my 4-year scholarships are up. I had it made in the shade so to speak. I had even looked at cutting my work week (at one of my jobs) down to 15 hours from 20 because I was taking more classes than usual. I had started getting my financial ducks in line.

This could have been me.

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[Background: In the states, you apply for financial aid through something called FAFSA. It has your (or your parents’) income, general info, etc on it and determines whether you are eligible for need-based aid or just regular loans]. Mine is generally filed by my mother, but it was filed a few months late (another story for some other time). I got a confirmation email Monday stating it had been sent to my school, so I should be expecting some sort of offer. I knew the loan amount I needed and since it was not need based, I knew I would be eligible. Day 1: No info, Day 2: No info, … Today: No info. Finally, out of sheer frustration, I started looking under every single tab. This is my 12th semester here [I did a lot of summer school], so I know what I’m doing by now. Under an arbitrary tab I’ve never seen before, it says “Form Required: Grade/Loan Appeal.” There is no link, no further information. To Google! So I find out that I am not making “satisfactory academic progress” (More Backstory: Fall ’10 was a rough semester for me. A lot of family tragedy and bad grades). Now, more context: I am 3, that’s right, 3 classes away from completing my math degree. So I have to fill out an appeal. I look all over the site for the form, and it is nowhere to be found. Then I find a single line that says it was mailed to me.

It's unsustainable & takes too long

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Why am I not happy about that? Well, for one thing, if it was sent, it was sent to my campus address (I haven’t been on campus since May, Canada remember). It wasn’t sent to my home address (so my parents couldn’t give me a heads up), and under that single line it says: Please mail back within 3 weeks of receiving. I have NO idea of when it was sent. The time-stamp under the tab was 8/2/11, but I’ve learned that it doesn’t mean anything. So why am I really unhappy about this, and what does it have to do with an Emergency Fund? (I swear it’s not just mindless ranting!!!)

I deferred payment waiting for my loan offer, so I owe $473.66 by the 11th of August (not a big deal, I can handle that); however, I owe $1171.66 x 3 [due October 1st, November 1st, & December 1st]. My income is not large enough to be able to pay this without loans. I can’t. I’m not being pessimistic, I’m being realistic. I make $7.50 an hour and can work a maximum of 20 hours a week. I have another job based solely on commission, and donating plasma will get you around $50 a week. I have a starting amount of $1145. I have no fear about my appeal not getting accepted (I have a good reason and proof that my grades improved by leaps & bounds), but it’s a matter of how long will it take:

  • For the appeal to be approved
  • For the appeal to process
  • For the loan offer to process
  • For the amount accepted to process
  • For that amount to get sent to the school

So I am crossing my fingers that it would be taken care of by November 1st (or I’m SOL anyway). And so, this means I need to make sure I have at least $1171.66 on October 1st (unless it processes before then, then it’s just moot). Oh, and I have to buy textbooks & eat during this time, and buy my prescriptions, oh and pay for gas. So, this means a very tight budget.

The currency is obviously pesos

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The end all, be all point is that it wouldn’t be as big of a deal if I had an Emergency Fund or any amount of savings. I am going to have to scrimp, save, sell my body, & be very uncomfortable to guarantee to myself that I can pay for school at least through October 1st (I imagine if my appeal is approved, everything will process by then). If I had an emergency fund, my food budget for August & September wouldn’t be under $100, I wouldn’t have to sell plasma, and I probably wouldn’t be as frustrated. I know, when this is over, I really will pay myself first (a common PF thought) and have an EF. If you don’t have one, I suggest working on it. You never know when you’re going to need it (I guess that’s why it’s an emergency fund ha ha).

-L.

Budgeting as a College Student

It’s really difficult to budget as a college student, especially if you happen to live on campus (as I do). Most of my bills are paid during 2 months: August & January. This is when my tuition is paid, my rent is paid, my books are bought, and all those additional fees like parking tags are taken care of. So, it’s really difficult to budget out your money (some of which you don’t have yet) in a manner that satisfies your needs and leaves you with a little bit of a buffer.

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I initially started my budgeting ventures for this year by making a fall budget and spring budget, but after a bit of reflecting, I decided that it doesn’t really help me in the long run this way. I can’t see patterns in my spending and adjust for them, I can’t really set aside X amount for my Emergency Fund (EF) every semester, and it’s just difficult to keep things in perspective when you’re looking at categories of spending over the span of 5 months. So today, I listed all anticipated income and expenses (everything from haircuts to taxes), and made official budgets for every month in Excel. It’s pretty basic, no fancy calculations or anything, but I think it will be something that I can keep to a lot more easily than I could a semesterly sheet. So, what are the items I have to budget for?

  • tuition
  • rent
  • fees
  • books
  • food
  • haircuts
  • Netflix
  • Gas
  • gifts
  • applications to grad school
  • standardized testing fees

Those last 2 will really hit you for doozy (almost $900…ridiculous). Aside from my main, on-campus job, I am also working an internship during the semester and plan to sell my body sell plasma. Every cent of that money is going to my Emergency Fund/Savings Fund. Yeah, I know you’re supposed to have both, but my plan right now is to build up one “do not spend” account and then split them later. Does it make sense? Yes. To me at least. Right now, with my bank, I have a checking account and savings account. My savings account will be my “do not spend” account =). I’ll be keeping track of how well I keep to my budget on this blog (y’all will hold me accountable, right?). I’m hoping to increase my net worth by a bit as well, so I’ll post about that every once in a while. I’m really excited, because I’m hoping that next semester I’ll be able to split my account into the EF & SF (because without the test aps & ap fees, I’ll have another $840 to put in my budget!!! Plus I’ll be able to have a smaller present budget [no Christmas!!! – is that something I should be happy about?])…

-L.

Entering the Arena

Hey y’all! So this is my first personal finance (PF) blog, so be easy on me as I sludge through some posts with limited knowledge. I’m an average undergraduate about to start her victory lap, so I’m hoping to impart some wisdom to my peers and learn a few things too. I follow a few PF blogs pretty religiously (with fabulouslybroke starting off my obsession with finances and hithat’smybike adding fuel to the fire). Right now, I am entering into that quarterlife crisis a few years early, aka I’m trying to figure out what I want to do when I grow up, how I’m going to pay back billions of dollars my student loans, struggling to write a résumé, and all of the fun things that come with being an adult.

The plan is to blog about “becoming an adult” alongside me trying to figure out what my finances should look like as a 22 year old, or even as a financially responsible being. Right now, my net worth is in the red, and I’m trying to work to get it back in black! I want to learn how to invest and actually do it, get out of debt, budget, be more sustainable, and just figure my life out. I think a lot of people can probably relate to that, so join me for the ride to either budget or fudget (leaning away from the latter there; I don’t think my bank account could handle much more of that =P).

-L.