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