Paycheck Friday

Booya!  I love PayDay!

Unlike the Professor, my paychecks are always distributed on a Friday.  Every two weeks, I wake up a get to feel good about the work I do and my financial stability.  I'm not a person who works for the paychecks, but it does feel good to log into your account and see an influx, especially on a Friday.  It provides optimism for the coming weekend!  I can do anything - I GOT PAID!!!

I'll admit, PayDay felt like a much bigger deal when I first graduated college or when I was an intern during college.  Each PayDay made me feel like a millionaire.  However, a little bit of me still feels like a kid who won the lottery on PayDay.

I got Paid.  There's a Beautiful (but Hot) Weekend in the City ahead!  My baseball team is playing well and has an exciting series coming up!  Today is a Very Good Day!  Like I said - nothing like the eternal optimism of youth caused by a Paycheck Friday!!

College Football Playoff

Yesterday, college presidents agreed to a 4-team playoff format to determine the National Championship starting in 2014.  The semi-finals will take place in bowl games and the National Championship Game will be bid out to any city.  It's definitely a step up from the current format, however, a playoff is not always better.

1.  Why did we need to keep the tradition of the bowls?  Haven't we seen that the bowl games have worn out their welcome.  The crazy ticket/hotel requirements on top of declining ratings have shown that people are only interested in the National Championship.  The playoff makes the second-tier bowl games even more meaningless, especially if they are being played on the same day.  If not, they create travel issues for people because of their desire to maintain a bowl game EVERY night in January.  The season needs to end by Jan. 1 - stop dragging it out.

2.  Why only 4?  Every other college football playoff format has 32 teams.  In Division III, I had to eat Thanksgiving Dinner in my college cafeteria.  I had to study for finals after practice.  It's not a STUDENT-athlete issue.  It's a money issue.  Currently, the 4 team playoff will continue to maximize the regular season AND the post-season.  This means more TV viewers, which means more money.  Also, it's the easiest.  College football is old school.  They move incredibly slow and anything else would have been considered too drastic.  Remember - these are the same people that re-upped with the BCS for 10 years.

3.  What effect will this have on my Cable TV bill?  As my TV creeps up year after year, I can't help but worry that some astronomical amount by ESPN or CBS to showcase these games will get pushed back onto the viewers.  They have us over a barrel.  Either we keep cable and watch or we turn off cable entirely (and miss out on House Hunters!).  With more and more people turning off cable, this could be an interesting issue.

This post had little to do with finance, but I get tired of reading the same narrative on all the major news sites.  It's applause, applause, slap on the back, applause.  It's annoying.  Especially when people still know this is hardly the answer.  At least I hope so.

Home Office

I need to get my office space back!

I've always been a quiet studier/worker.  In college, I couldn't study in the dorm room or apartment, I had to leave and go to the Library for a few hours.  I don't like to waste time or be around all the distractions.  It's better to seclude myself entirely for 2 hours, then be around friends or in a group for 4 hours.  With work, I'm very similar.  I like to put my headphones on or go into "heads down" mode and get things done.  I'm at work to accomplish a specific job and don't like to be wasting time talking about last night's game or whatever else in going on at the water cooler.

At home - I lost my office area to storage a few months ago.  So, I'm currently set up on the dining room table - which is surrounded by distractions.  Big screen TV one room away, outdoors right behind me, kitchen stocked with food in front of me.  It's terrible.  This weekend, I need to re-discover my secluded office area in the basement.  Although it grungy and a little stinky down there, I'll probably be a lot more productive in the quiet.

Sometimes, you just have to put your head down and get things done.

The Benefit of Many Small Things

The Prof and I make decent money for two individuals in their late 20s (especially since one is a Teacher).  Obviously, we aren't satisfied with our current status and dream of the days when money is no object and expensive dinners out are normalcy.  We're not spoiled or rotten, but we appreciate and enjoy modern luxuries.  We work hard and sometimes we deserve the good things in life.

For the most part, we save the Prof's paychecks.  Her earnings do not come into play when paying off house, utilities, and my student loans.  Depending on the month, I rarely use it to pay off the credit card.  We do use her earnings to help pay down the Kitchen Renovation, but I view that as an investment, and not a straight expenditure (Yea, its debt, but reasonable and appreciable).

I've already noted that June is a 3 paycheck month for me!  Hooray!  Extra MOOLAH!

However, as I was reviewing our Mint account to see the student loan balance (I love seeing it go down right after a payment), I noticed something unusual about our income.  It was substantially higher this month considering we still had 2 paychecks yet to receive.  After some quick investigating, I noticed several NEW income streams this month:

My Side Hustle:  I've made an extra $300 working with kids and being outside.

Ebay:  The Prof sold a few nice handbags last month and the money was finally transferred into our account this month.

Rewards:  I received compensation for all the referral business that I brought to the bank.  Not a great deal, but another $250!

All in all, it was almost an extra $1,000 dollars that I was not expecting and had not budgeted for!  Those small little items can really add up and help reinforce the idea that Side Hustling pays off!  It's awesome to see the Mint Cash balance go up and the Loan & Credit Card balances go down!  That's the ideal scenario for Personal Finance.

The best part about all those extra items - that caused very little disruption to our daily lives.  The Side Hustle is the only major change and that's only a couple hours on Sunday morning.  The rest was just doing my job and selling old stuff!  Incredibly easy!

I've discussed it before - but it's been a very good month.  I'm so happy to have a wife who understands  the idea of sacrifice now (while in grad school) in order to achieve the small little things later in life!!

Why I Bought Whole Life Insurance

If you read or follow most personal finance people (Ramsey, Orman, blogs), they will all sell you on the idea of Term Life Insurance.  The baseline logic makes fiscal sense - the monthly premiums are lower and the coverage amount is greater.  Easy financial decision.

WAIT!!

Let's play Devil's Advocate.  I currently own a Whole Life Insurance Policy.  I am in my late (still hate saying that) 20s, never used tobacco, and my family has no history of genetic health problems.  I own a $150k policy for about $2.1k a year, or $176 a month.  I did some research and found that on average, a $1.5 MM Term Life Policy would only cost me ~$60 a month!

I could be saving $116 a month!!  I am so Stupid!!!   Oh wait....

Let's play a little hypothetical game and move to July 2032!  I've been making premiums payments for 20 years at this point.

Whole Life Insurance - After 20 years, I will have paid $42,244.80 in premiums.  Wow.  However, the Cash Value of the policy should be $32,079 (this isn't definitive based upon the markets, but a decent approximation based upon history of agency).  So, after 20 years, the Net Value is $(10,165).

Term Life Insurance - After 20 years, I would have paid $14,400 in premiums.  A difference of $27,844 compared to Whole Life.  Unfortunately, I've managed to live the entire 20 years (HA!  Just as I planned!), so the payouts were never received.  So, the net value of the Term Policy is $(14,400)!  Wait - that's worse than the Whole Life!!  I thought Term Life was great - what gives!!

In addition, the Whole Life policy premiums remain steady at $176/month even as I approach the age of 50!  Which is great! 

Under the Term Life Policy - since I've got kids/marriages/and retirement to think about, I'm going to renew my Term Life Policy.  However, now I'm 48, not 28.  So, I reduce my need in half to $750k.  That brings my monthly premium to $115!!  WHAT???  Oh man.

So, let's recap.  If you are young and can manage some extra payments now - a Whole Life Policy is a MUCH better LONG TERM decision.  The money output is better in the end and the flexibility is greater with the availability to cash out.  Neither is a fool-proof investment tool and should not be treated as such.  It's insurance - the company that offers it needs to make money.  However, when looking for flexibility and long-term gains, I'm sticking with my Whole Life Policy.

Battling Over Basis Points

Our checking account provides a very reasonable .55% interest rate.  However, its only on the first $25k within the account.  Anything above that number and the interest earned is at a rate of .10%.  Real weak.

Currently, we are going strong with $25k in the account. 

In a payroll oddity, the Prof and I got paid on the same day!  I can't recall it ever happening before since she's bi-monthly and I'm bi-weekly.  So, we had a nice influx of cash today but it has nowhere to go.  I talked yesterday about this being a 3 paycheck month for me and the credit card bill has already been paid.  So, now I'm just saving money until the mortgage and HD bill come due. 

For whatever reason, I'm been thinking about utilizing a different checking account to try and save money.  PNC is a great bank, but I've never really reasearched other options.  I could be earning more in interest each month by using Schwab, Ally, or someone else.  Perhaps this is short-sighted since I know I have a tuition payment due in August and our savings account will fall substantially at that point, but what if I can earn an extra 50 to 150 basis points in the time being.

It's worth investigating.  In addition, opening up a better banking account could open up better brokerage oppurtunities.  PNC is not a very brokerage place for small stock investing.  The BlackRock Funds do not very well - but those funds are LT.  Right now is a good time to buy (as evidenced by II-VI being priced 20% below last year's amount.  In addition, PNC stock is priced well below its normal trading level and it hasn't fluctuated in 10 years!  So, yes, I will be investigating other banking/investing options.  The simplicity of PNC VW and Checking accounts is great - but I'm sure there are better options as well.  It would be foolish not to have the discussion.

Perhaps I'm losing my edge.

R.J.

Finding Balance

There are good days, and there are bad days.

There are good weeks, and there are bad weeks.

There are good months, and there are bad months.

I've been struggling to think of something to write about this week.  Work has been much busier lately and doesn't provide the availability to sneak away to collect my thoughts.  It's Mid-Terms this week at school, so that's added some additional stress and late nights.  Plus, I've been in a good space.

June is a 3 paycheck month!  So, after getting paid on the 1st and paying off the credit card - I realized the Prof and I both have two paychecks coming this month!  Booya!  It helps ease any money drama for the time being.  Sure we could do better in a daily money management, but I'm tired of sweating the small stuff.  I'm tired of micro-managing and dwelling on the $5 lunch wraps and $20 drug store runs.  Life Happens.

It's time to stop wishing for the future and start living in the present.  We have good jobs, are ambitious about the future, and love each other.  Life is good.  It may make for bad blog writing - but it's a nice feeling.  Nothing lasts forever, but when you are living in the present - today is a good day.

Coach

Sup Homebody

It's amazing how quickly life can change.  On November 7, 2008, I was a carefree bachelor going out for a night on the town with the guys.  The world was my osyter and we were off to let off some steam from a busy week at work.

Today, I'm a married man living with a dog and a cat in a house in the suburbs.  It's Friday night and the only thing I want to do is sit at home with the Professor and enjoy eachother's company.  I don't want to drink until I can't remember anymore.  I don't want to buy $2 well drinks until my credit card maxes out.  I wanted to lay on my couch and talk to my best friend.  That's happiness.

The Professor asked if she was a homebody this past week.  I told her absolutely.  She loves lounging more than most people.  At first, she was a bit disappointed in my response.  As if that were a bad thing.  However, I look at it as we enjoy the comfort of home and spending time with the people who mean the most to us.  It's the Sunday afternoon dinners at the parents.  It's the Saturday evening game nights.  It's the weekend trips to graduations.  Being a homebody doesn't mean we're hermits.  Far from it.

We LOVE to travel.  We love to make plans with friends for concerts, games, or St. Patrick's Day.  We just like to plan things out and do things with people who are important to us.  I think back to our Wedding Day.  It was truly one of the greatest weekends of my life.  Not just because I married the Professor, but because of all the family and friends that were in town and celebrated with us the entire time.  From Wednesday to Sunday we laughed, hugged and partied.  We were real.  Everyone there was chosen by us to be there and they wanted to be there to celebrate with us.  No phony friends.  No casual acquantences you have to put up with.  No BS.  It was great.

I'm happy with where my life is.  I'm still striving for more success in my career and look forward to Coach Jr, but I wouldn't change this day for any other day prior to November 7, 2008.

Coach 

Make Money Off of P&W

I love reading Personal Finance websites.  I'm fascinated by the journey others take on their way to financial independence and how they push others to achieve the same.

After starting my first Side Hustle last month, I've been wondering where or if there are other options to do.  Aside from pushing myself at work and school, achieving some supplemental funds would really help with the extra things in life.  Paying down debt is great and very important, but lately I've been wanting to fund a Beach Vacation for the Professor and I, or stop taking money from my parents and in-laws and really cut the cords and grow up.  Every little bit helps while in school.

Could I make money off the blog? 

I'm not a great a writer (the Prof is) but I do have knowledge about Finances and genuinely want to help others.  I'm amazed by the small communities within other blogs that cheer each other on and motivate each other through the journeys.  I think it would be exciting to help others as the Professor and I share our stories of marriage, money, and life.  It would also require a tremendous amount of work to get started and maintain.  Effort is not an issue with the two of us.  We are two extrememly motivated individuals. 

Another reason I would like to do this.  I believe it would be fun to work with my wife.  It could be her outlet to vent about me or share stories of our marriage and desire to start a family.  I could share my money management stories and (hopefully) offer some insight for others.  It would be ours.  Right now, she has her teaching job, I have my Finance job and there is no overlap.  We both contribute to the household but it's tough to share stories about the day.  The blog would be ours to build and grow.  We could do it together!

There are no guarantees in life and its possible we'll never make a dime off P&W.  However, we'd always have a record of those years starting our life together.  The struggles, the triumphs, and happiness through marital bliss.

Things to ponder going forward.

The Value of Leftovers

Today for lunch I had a Reuben Sandwich.  It was delicious.  It was filling.  It was a day old!

I love leftovers!  It really has very little to do with my frugality!  It has more to do with simplicity.  I love eating quick and easy meals.  I enjoy my lunch at my desk so that I can work out at the gym across the street during my break.  I usually enjoy a small dinner in the evening.  My wife and I both work.  It's a pain to think of and put together a dinner EVERY (or any) night.  I realize there are "30 minutes meals" cookbooks out there - but who has 30 minutes when 60 seconds can be just as simple!

I've discussed already my wife's love of the crockpot.  It's quite possibly the greatest invention since the Internet (the Internet came into my life first).  One of the best part about it is that it makes enough food to last for several days.  So, everytime she starts filling up the crock, I know that my lunch and dinners are set for at least 2 days.  No worrying about making sandwiches in the morning, or if there is enough snacks to fill me up.  I'm good!  In addition - I'm getting a home cooked meal every time! 

Now - I'd be foolish if saving money wasn't at least part of the equation.  However, the food we cook or the restaurant leftovers were already paid for.  So, the savings aren't as large as most PF sites claim.  But, it is nice to think that if we control our grocery costs, that there won't be a multitude of $9 meals to track.  It's one grocery cost.  Again - Simplicity.

It's also interesting how people react when you re-heat something in the workplace.  Some people applaud the creativity and the money saving nature of packing a meal.  Others can't understand how I have time to make the meals or why I do when the building has a cafeteria.  Lastly, some just refuse to eat leftovers (my father-in-law).  I understand all sides.  For me, knowing that I can enjoy a quality meal, without hassle or wait is ideal.

I realize my tastes can change over time and perhaps as my income grows I'll worry less about minor meal costs, but I doubt my enjoyment of leftovers will change.  I believe that some things taste better the next day!  Lasagna.  Thanksgiving Turkey!  Easter Ham!  All taste better the next day!

What do you think?

May New Worth Review

It's been one month since we've taken a 5,000 ft fly-by of our financial progress.  So, let's review:

Cash - $27,930  (+$1,835)
Investments - $66,612 (-$4,460)
Home Value - $180,000 ($0)
Personal Assets - $23,250 (-$5,000)
Less: Liabilities - $172,060 (-$3,350)

Here's how it breaks down:

Assets -
Cash - An increase to cash as we received money upon selling the Prof's Passat!  We received $4,500 for the car.  Side Hustlin ($850) and selling items online ($100) should help build or keep steady this balance as we continue to pay down debt and build our savings for the Prof's next car.
Investments - Ouch.  Well, the stock market experienced its worst month in two years as the S&P and DJIA fell over 6% in May 2012, which is right in line with my 6.2% reduction in investment assets!  The losses were consistent across the board, and there's nothing too critical to take from it.  Sometimes the market bounces like it did in April, sometimes it falls flat.  There is a lot of pending crisis going on in Europe and China, and the U.S. isn't bouncing back as well as everyone hoped, but I believe the markets will move in the right direction.  Anyway - that's why I'm concentrating more on debt reduction than trying to play the market.  Interest expense is very real and I do not get that back.  The market should bounce back.
Personal Assets - No Change to the Home Value.  No sales in the area and aside from the back-splash in the kitchen, no major improvements to it.  However, we did sell a car!!  We sold Prof's car for $4,500.  We had it set around $5,000, but with the new tire, trunk latch, and possible oil changes due - I felt it was best to get rid of it and move on.  Besides, with taxes, insurance, and title transfer - the young couple paid over $5,000 for the car.  No other changes to personal assets.  The Sonata is pimping along!!
Liabilities -
Mortgage - $131,511 - Another small incremental change.  I considered refinancing it to a 15 year fixed rate, but ultimately don't think we will live in the house long enough to recoup closing costs.
Student Loans - $36,303 - As discussed earlier, I paid nearly $300 in interest this month so the overall balance is pretty good.
Home Depot Credit Card - $3,598 - Backsplashing costs were about $250 for the entire project.  In addition, to a calendar issue, we actually made 2 payments in May (on the 1st and 31st).  Three months to debt free on this one.
Anniversary Gift - 2nd to last payment on the Anniversary gift.  Again, it's not July and I don't want her to receive it until closer to the actually greatest day of my live (July 16th)!  Otherwise, no need to panic here.
Total Joint Net Worth - $125,732...

Ouch.  The stock market definitely affected our growth here.  While cash increased and debts decreased, we still lost over $4k in Net Worth due to the loss on our investment accounts.  It stings to that, but I'm really happy with our debt paydown.  $3,350 debt reduction is nothing to snooze at and if we keep up the attitude we should be able to buy the new car without having to finance it.  It won't be easy and would require a lot of discipline, but is defiinitely doable, especially if the markets keep struggling!