Slowly but surely

You'll notice the graphs on the sidebar have been slowly increasing. I've managed to put an extra $2000 into my Vanguard account. By 6/6, I'll be able to split that fund into the growth and income funds I've planned on.

That means I'll have 6 months to come up with another $6,000 to manage to get all my funds bought. That'll be a real stretch to meet it by the end of the year, and 5/1/09 is definitely the more realistic goal. A lot will depend on how my debt payments end up working out. Either way though, I feel that I'm really starting to get a true handle on my finances.

I did my part

This is for all the ER docs and nurses reading this blog (if there are any). When I was in the ER, I behaved well. I tried to be as polite as possible to everyone that came into my room. I only described the pain when asked, made no complaints, and didn't ask for a thing. I apologized profusely when the EEG wouldn't work because my muscles are clenching and twitching too much for an accurate reading. I smiled and said please and thank you whenever I could. I also refused the pills and prescription they gave me on discharge.

My ER experience may have been the one of the more unpleasant things I've ever done, but I've taken the blogs I read to heart, and tried to behave in the way you've requested patients act. It didn't really make any difference to the way I was treated, but at least I can be fairly confident I won't be making a featured appearance in a blog post.

A few updates

Well, this weekend was one of "those" weekends. I managed to land myself in the ER Thursday night, for the first time related to pain. It wasn't quite normal pain though, I started experiencing sharp, excruciating, and unrelenting pain just underneath my ribcage on my left side. I called my doctor after about an hour, and he had me go to the ER thinking it could be a heart or lung issue. I thought it was more in the abdominal area, but I was panicking and scared and went anyway. After an EEG and a contrast CT, they figured out it wasn't my heart or lungs. So I got written off as a drug seeker and parked in between the homeless people passed out from a night of alcohol and left for 6 hours. Not the most fun.

Now I'm still experiencing the pain intermittantly, along with some blood coming from somewhere inside, but I'm not going do anything about it right now. If it's a small tear or something, it will heal on it's own. If it's cancer, I wouldn't get treatment anyway. If I start feeling shocky, then I'll call my doctor. Until then...

So after doing all of that Thursday/Friday, I decided to have some fun over the weekend. I went out to a minor league baseball game, which was a ton of fun - no one goes to single A games, and there's no security, so you can basically hang out with the ballplayers. It's even better when you're on the visitors side. Then I went out to dinner afterwards. I spent some money on that, but I needed something to get my mind off of things. I'm also going to get a haircut next week, which is a fairly major expense, but I only do it every six months.

I move into the new place next weekend, so I'll have to start thinking about how to make the space my own.

I found a place to live

$900 per month includes everything - utilities, cable, internet, rent, and furniture. I'm going to need to buy some household items, things like hangers, but this expense is significantly less than I thought it was going to be a month ago. The important thing is I like the landlord - renting privately means that the relationship I can have with the house owner is fairly significant.

The downside is that it's farther from public transportation than I would like, meaning I'll have a pretty heavy reliance on cabs until I'm able to purchase a car. Given the risk to my physical well-being walking long distances presents, there aren't many other good options.

I'm a little concerned that I made an impetuous decision, but overall, I think it will be a decent situation. It is, at minimum, a plenty doable short-term solution.

More on concierge medicine

As regular readers know, I'm extremely happy with my new doctor and the concierge medicine program. It's worth every penny of the monthly fee ($125). Recently, he referred me to an orthopedist; I have an appointment at the end of the month. I made the appointment, let my doctor know, and he took the initiative to call up the orthopedist to have a lengthy, in-depth discussion about my health concerns and his goals for the appointment. Now I feel as though I can go into the office and spend the time talking about management options instead of having to go through the history.

Similarly, he sends me a copy of my medical records whenever they're updated. He made a point of noting in them that I displayed no drug-seeking behaviour. One of my biggest frustrations was feeling like I had to clear that hurdle with every specialist I saw, and I think having the notation in my chart will be a big help. It was done spontaneously too, I made no special requests.

If I were perfectly healthy, I wouldn't see this as a needed expense. But $125/month is a minor expense if it makes me feel not quite so alone in facing down my condition.

Living on 50%

If things go well, I hope to have a new residence tomorrow. Assuming that it does, my finances will change a lot, since I'll take back on responsibilities for utilities, food, and rent.

In planning for this, my monthly, fixed bills will be just under half of my net salary. This includes rent, utilities (all of them, including internet and home/cell phone bills), and my medical retainer. I can then put away 1/3 into investments/savings, and reserve about 25% of my pay for groceries, transportation, and personal spending.

This is an allocation I feel comfortable living on for a fair amount of time. I hope to maintain this amount as my salary increases, so I'll be able to put a larger portion of my income towards saving over time.

Why I invest

Someone questioned in the comments why I invest if I still have debt.
That's a fair question, and there are several reasons.

First, I think it's important to have an emergency fund set aside before
focusing on debt. Unplanned events happen in everyone's life and having
money that's fairly easily accessible means that you don't end up going
further in debt when they do occur. I'm probably a bit more paranoid
than most about this issue, given the experiences I've had so far, but I
have 3 months of living expenses set aside. I invest 75% of this money
in order to get a pretty good rate of return without significant risk.

Second, my debt is not increasing. It's in the hands of collection
agencies, and due to the laws in my state, they're not allowed to tack
on additional fees and interest. I have legal representation in order
to handle this in the way that will minimize the impact on my future
financial outlook. Thus, while I will eventually pay everything I owe,
it's actually not advisable for me to pay it off monthly or
immediately. I'm putting aside a fairly significant amount of money and
using that to get a decent return so that as agreements are made, I can
pay off a specific creditor and be done with it.

Finally, when the money is put in an account that I don't have immediate
access to, I'm really unlikely to spend it. Transferring the money adds
additional time for thought and reflection about any purchase I intend
to make. Anytime I have the opportunity to put money into an account
and let it passively increase, I try to take it. Even if I only put it
in an index fund in the short term, I'm comfortable with that level of
risk, and the upside is a lot more than letting it sit in my checking
account.

So for most people, after setting aside at least $1,000 in an emergency
fund, paying off high-interest debt makes much more sense than investing.

As a side note, my using the term "consumer" debt is a bit misleading.
About 80% of this debt was never credit card debt to begin with. About
$20,000 of it was a direct result of my ending up in the hospital.
Secured loans defaulted, bills went unpaid, etc. - my parents refused to
come up (not that I would have wanted them to) and no one else had any
authority to handle my finances. Moreover, no one was really too
concerned about those, as my chances of survival at the time were small
- bills tend to take a back seat to that. So most of this debt never
had interest.

I have a confession to make

This probably won't come as a surprise to those who can read between the lines of my blog. I'm not particularly frugal. I have no real intentions of saving hard for retirement - the odds that I make it to 59 1/2 (and can withdraw from an IRA account without penalties) are miniscule. Instead, my time horizons are much shorter - the next 10-20 years. I don't want to be tied to a specific job, living paycheck to paycheck, but I also intend to work as long as I can. I've taken my year and a half off from the job market, and honestly, I'm happier working, even if individual days are sometimes rough.



There are, however, a few guidelines I'm using in my money management that I think are important.

1. I spend intelligently. I just spent nearly $1400 on electronics (a new laptop and a new cell phone). That's a lot of money. But I thought seriously about both purchases and they're ones that will last me a long time and add significantly to my quality of life. I keep track of every penny I spend, so that I'm able to identify the areas where spending is not contributing to the enjoyment of my life, and make changes in those areas.
2. I don't live paycheck to paycheck. That is one of the most stressful things I've done, not knowing whether I was going to make payments for all my expenses. Now, I plan for recurring expenses in advance and reserve that money the month before it'll be needed.
3. I keep an emergency fund. For the unexpected expenses, I know that they won't wipe me out financially. I have very few obligations at the moment (I'll have rent, utilities, groceries, and medical bills) and I'm only responsible for myself. So I have 10% of my gross annual income set aside. This would cover 3 months of no external income whatsoever, comfortably, 4 months if I really stretched. As my expenses grow, or as I acquire more points of failure (for example, a car that might need repairs), I'll increase the amount in the funds. This came first and was absolutely my highest priority.
4. I don't buy on impulse. I readily admit, I have expensive tastes, and I would much rather pay a premium for quality. But I heavily research purchases and give them a lot of thought. When I do make a decision to buy something, I feel good about it and can enjoy what it contributes to my life, as opposed to regretting it and feeling locked into a purchase.
5. I don't go into debt for purchases. If I can't afford it now, I wait. Moreover, I don't throw every penny I have towards a purchase. My set-aside funds don't get touched, my bills and obligations, including automatic savings, come first.
6. I set goals, both short-term and long-term, and I work towards those. I want to get out of debt. I want to buy a car. I want to get out of the rental market and own my own home. I work towards these diligently and I don't lose sight of them just because a shiny new object comes out. In other words, I spend money now to make my life better, but I also put money away towards my future.

So on balance, I earn more than my monthly obligations. Once those obligations are satisfied, I split the balance between long-term goals and short-term ones. Does this fit the traditional definition of frugal? No, not really. I would reconsider my position if my life circumstances were different. But for me, I think I've started on the road to a good balance between now and later.

Entertainment on a budget

April was a really rough month for me. I had a lot of mental ups and downs (a bit more downs than ups). I did have one really fun moment. I'm a big baseball girl. I don't root for the local team, but my team comes to town occasionally. I'm working on getting a team hat signed (17 out of 25 on the active roster - 3 position players, 2 of whom are starters, and 5 pitchers, 3 starters). I actually skipped going to the game, but spent about 7 hours hanging out, getting autographs, pictures, talking to ball players, and watching batting practice. Best part - it was free.

I was amazed at how genuinely nice and fun some of the players are. These are people who are making millions of dollars per year, who are all over TV, and yet they still manage to keep their head on straight. Not all of them, of course, but a significant number of them are. I spent the day bouncing off the walls.

No chance I would try something like this with the New York teams or the Red Sox, but that's the benefit of rooting for a small market team.

Lenovo R61 thoughts

My new computer arrived a couple of weeks ago. I couldn't be more pleased. The 2.4 GHz processor and 3 GB of RAM allow me to run Vista without a hitch, and the discrete graphics card means that I can play the one computer game I still play regularly (Civ 4). In fact, I can turn the graphics all the way up and play on the largest map setting with no difficulties at all. I'm plenty happy with the weight as well.

My only complaint, and it's a small one, is the lack of a horizontally aligned USB port. I have a USB EV-DO network card provided by my company, and when it's plugged in, I can't have my laptop flat on the desk.

Financially, this could not have been a better decision. I was expecting to pay about $4,000 to replace my laptop and buy a desktop + all the peripherals. But given that the laptop can do everything I need without a hitch, I don't feel any need to buy a desktop, plus the laptop only cost me a bit over $900. Eventually, I'll probably buy a docking station and the peripherals anyway, just to make life a bit more convenient when using the computer at home, but I'll still come in significantly under half of what I had planned. Essentially, I'll have spent just over half of my tax refund on this purchase. Given that I used the rest of it, along with my tax stimulus check for long-term savings, I feel very comfortable with this purchase. I fully expect this computer to take me through several years.

April 2008 review

My net worth as of April 30st, 2008:

($43,051.66)

Assets:
Liquid assets: $3,748.40
Investments: $3,078.84
Total: $6,827.24

Liabilities:
Consumer Debt: $23,003.00
Hospital Bills: $26,875.90
Total: $49,878.90

My assets have increased by 43% since last month. My investments were the big increase, with an increase of over 1400%. My debts decreased by nearly 13%. I still have a long way to go on them, obviously, but things continue to move in the right direction. Overall, my net worth increased by nearly 18%. When I do move, it will be hard to maintain that level of increase, but I am going to work on keeping my expenses lower than my income.

Monthly income and expenses:

Income:

Interest: $1.45
Internet income: $88
Other income: $1,567
Salary: $2,333.66
Total: $3,970.11

Expenses:

Charity: $20
Clothing: $41.34
Debt Repayment: $59.00
Dining: $27.69
Entertainment: $129.79
Gifts: $21.15
Household: $1344.66
Medical: $177.26
Misc.: $25.90
Transportation: $87.00
Utilities: $54.00
Total: $1987.79

Overall Total: $1,982.32

I spent quite a bit this month. Purchases of a cell phone and a computer contributed for the bulk of the expenses. I came very close to covering my entertainment bill with my internet income, and I think that will be a goal every month. I definitely met and exceeded the goal of earning at least $25 extra every month. My tax refund came in, which made a big different in my income, although I still spent less than I earned if you exclude that. I expect my discretionary expenses to decrease next month.

May Goals

My goals for May:
Financial:

1. Increase net worth by 15%

Personal:

1. Move into a new home
2. File complaint with landlord-tenant board

My goals for this month are mostly designed to stabilize my situation. With a steady increase in my net worth and getting my living situation straightened out, I'll put myself well on a path to achieving my bigger, long-term goals.

April goals review

At the end of each month, I will go through and evaluate the progress I made on the goals I post at the beginning of the month.

For April:

Financial:
Re-fund emergency account ($1,000 total)
Open an account at
Vanguard with $3,000 invested in an "income" class index fund

I managed both of these. Well, mostly - my index fund is a balanced income fund. I'll be investing $100 a month into the Vanguard account automatically and hopefully more than that. Once it hits $6,000, I'll divide it into two.

Right now, I feel as though my finances are in shape for any sort of emergency. Obviously, I hope not to have a situation like that, but if something were to come up, I would be able to survive it. I'm not going to touch this $4,000 unless it's imperative.

Debt
Contact all hospitals and doctors with outstanding medical bills to
determine progress
Reduce consumer debt to under $20,000

These two are still a bit up in the air. The medical bills are actually down to just one hospital, but that's half of it. I have to submit a form (I submitted it once, they lost it,) but I can't really do that without a good idea of my expenses.

I'm still waiting on some creditors to get back to me with respect to the consumer debt, but I think this goal is met.

Personal
Move into new home
File complaint with landlord-tenant board to recover security deposit and any associated damages

I haven't done either of these. No real excuse beyond not finding the right place that will also take the chance on me. I'm going to call about the form today.

So...all in all, the month looks pretty bad. 2 goals just missed entirely, 2 on hold, and 2 met. But, the 2 that I met were, in my mind, the most important two. I'll take some comfort in that, and chalk April up to being one of those months.