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Archive for August, 2011

Examining the allure of the "expensive".

August 30th, 2011 at 05:09 pm

Well, sure, there is a quality, craftsmanship and beauty of the item. But there are also other reasons why high-end items appeal to us.

Maybe understanding these reasons will help us avoid temptation in cases where it makes little rational sense, or to get those emotional payoffs that we seek from expensive items in a more direct and fulfilling way.

1)Hard to get.
Sense of accomplishment. You think about it, wait for it, maybe have to save for it. It is anticipation and excitement you don't get picking up something cheap without giving it much thought.
You appreciate it.

It is not a matter of "status symbol" for me personally.
Well, maybe kind of unspoken one that only others with same "status" can recognize. But if you see rich stylish people, never will you see a name brand or a logo splashed across their handbag or sweater, they avoid those like a plague. So while you will recognize some designer you've been enamoured with on someone else, it will be only due to your knowledge, not due to branding all over the thing.

2). (Just recently I recognized that this one was a major point for me)
NOT DISPOSABLE.
In a culture where things come cheap they have little value and take little labour to get are easily disposable.
There is something in me that really does not like that culture of waste, and it is my way of forcing myself not to participate in it.
A $20 scarf will probably end up wrinkled and tossed on top of entry cabinet fairly soon, but a Hermes scarf will be put in a box and put on like a ritual, with thought and care, just because of its cost.
I suppose it is my subconscious way of forcing myself to keep things neat and me liking that ritual.

3) (this one is somewhat close to #2)
Avoiding clutter
I suppose it is one of the ways I try to keep my closet from going out of control is limiting things I can buy. Forcing myself to choose carefully, going on the hunt to a place where I can only choose 1 item and have to think about it.

4) Reinventing your image.
Change of season is really tough. Last week I wanted to have "French elegance" kind of look, and when some cooler air and rain came in, I found myself craving neat, simple, and comfy Scandinavian style in solid natural colours.
I really don't know how to fight this one.
I travelled many places and when either weather or something else reminds me of it, I want to keep part of that experience and "pretend" I am back in some place I loved, living the life some aspects of which I really hoped to take home with me. I know I "can't buy it", but there is some powerful drive regarding this and the mood it creates cannot be easily discounted. This probably sounds all jumbled, not sure if anyone will understand me.

There is of course also just a simple attraction to things of beauty. And there is a trap of steep markdown in a really high end brand. That one I kind of learned to resist, telling myself "Never mind what it was originally priced at, does it worth this current price? Do I love it?" Works most of the time, but not foolproof.

These are just few of my reasons that I now recognize. Do you have any additional ones? Or any advice how to get some of these psychological "rewards" in a more efficient ways?

We both got the itch.

August 29th, 2011 at 05:08 pm

Suddenly, our EF just sitting there in a savings account doing nothing has started to bother us.

So we've been playing with the ideas of putting some of it in vanguards SP500 fund, a tiny bit in stocks, and a little bit more in mutual funds. Maybe it is the effect of the dip (want to buy some when its low)...

I just feel that considering how hard it is to save, money should be doing something. So I have this "tiered" emergency fund idea: first tier is liquid, immediately accessible, second is almost liquid (like CDs) and a third one is investment. We would not need a third one unless we are in major trouble.

Update: darn it, the market is up today!

DH just cancelled health insurance at work.

August 29th, 2011 at 04:20 am

We've been switching health insurances since the baby was born to maximize our savings. First, I was on my own at my employer (before we had our baby family plan did not make as much sense).

They paid fully for my very complicated pregnancy and delivery-- providers billed us for almost 90K, and we only had to pay like $200).
After the baby was born, I added him to my plan while I was on my maternity leave.

Than, after I went on leave without pay for 3 months we all went on DHs plan(not to pay cobra), when I went back to work I got my insurance back with coverage for all of us, and we were double covered
for over a month to get baby's orthodic band fully paid for. It was out of network for my insurance.

Now, we will all go to my family plan, and it should save us close to $400 a month as opposed to all of us being on DH's plan.

How can we keep changing health insurance whenever convenient? Simple -- these are all qualifying life-changing events that allow you to do it outside annual enrollment campaign. Birth of the baby, leave without pay, return to work... are all qualifying reasons to change coverage. (You don't need a reason to drop coverage, you only need a qualifying reason to add it.)
I hope people know that, it can save them some money.
(Of course, one always has to confirm with individual employer.)

It took a hurricane to have a NS weekend.

August 28th, 2011 at 08:21 pm

Overall, Irene was reasonably nice to us.

The only problem is flooded roads and all lines of metronorth are down. I need metronorth to get to work. DH (with baby) may have to drive me, because it does not look like the service will be restored by tomorrow (flooded tracks and downed trees and power lines on my line) and we don't know which roads are open.

But the weekend itself was great. We stayed indoors the entire time (it takes a hurricane to keep us from going to to brunch, ha?). My mom was trapped here with us, so we got a lot of help with the baby and had nice meals the entire weekend!!! (Crapes, meat and potatos dish my my made, buttermilk pancakes and tomato meatballs with mash potatoes... all from scratch and delicious). And NSD.

And, we had a chance to organize and clean. Floors are freshly washed, ton of paper shredded and filed... Everyone got some sleep for a change. Even baby did not wake up until after 8:30.

2012 vacation expenses planning and funding (and hoping). So many

August 26th, 2011 at 06:06 pm

2011
No plans for vacation (I have to save days and we should save money for nicer vacation in 2012)
Maybe 1 day in Philadelphia or something minor like that (we have a couple of Marriott certificates that expire).

2012

Local skiing $750 (funded)
in a CD that matures during the ski season.

Yearly ski week trip $3,600 minimum estimated.
$0 funded
(we won't touch EF for this, and we have no childcare arrangemet yet either (we would only trust our moms to take care of our little one alone for the whole week).
So it may not happen. Frown
I am reluctant to take it off the list though, so we'll wait and see.

4 week trip to Asia in July 2012 (if approved by my employer)

It would be 2 weeks (5 days Singapore or some other city, 2 days Shanghai and 1 week Nanjing) with DH
and other 2 weeks just me in Nanjing (while DH will go back to NYC and take care of the baby).

Rough estimate of cost:

$1800 tickets NYC-Singapore-Shanghai-Nanjing-Shanghai-NYC
$1800 Same for DH
(will be cheaper if we use Delta points, but we can't count on it)
$210 tutor in Nanjing 3 weeks (about 1.5 hours daily)
$500 food in nanjing 3 weeks
$200 transportation (taxis, train)
$150 Other, misc.

Singapore
$0 Luxury hotel
$400 Food and drinks (5 days)
$200 Other (attraction fees, etc)
$340 Shanghai 2 days, if hotel is free
$100 other, misc
$5700 Estimated cost

$4,500 Vacation Fund account currently
$250 amex cheques
-$950 still need to fund

Asia vacation shopping fund

$900 needed
(1 cool piece of art, maybe tailored clothing, something unusual that I can't buy here, some clothing for DH who is very skinny)
-$300 funded
$600 to go


I am plannig early because 1) these are big expences and we need time to plan for them 2) it makes these things seem closer and more real

OMG, the building just moved!

August 23rd, 2011 at 05:54 pm

Wow!

I never felt it before. It was a very gentle rocking that lasted a little while. Than again.

We just placed a $3,300 bet. Can't believe we did it!

August 22nd, 2011 at 04:29 pm

We bought our first stock option ever.

My husband was thinking about if for a while, and with my support he finally decided to give it a try.

It is risky, of course. We could make some money, we could loose the entire amount.

To break even Apple has to go above $403 by third week of January.

My husband is an apple enthusiast and he is constantly reading articles about what is going on with this company, so he has done some research. And I don't want him to feel we can never take a chance with anything -- he is extremely responsible with money and does not do such things likely, so I wanted him to have a chance. Plus, I believe there is a very good chance this can work.

So there, we did it.

Is this KUWTJ?

August 19th, 2011 at 09:37 pm

Is this keeping up with the Joneses syndrome?

Now that I have a daycare start date set, I went on a mini-shopping spree, buying a bunch of outfits from Cushies and Nany Pickle.
I wanted my baby to be dressed nice and comfy and in daycare and look his cutest in neat new clothing.

At home, as long as it is clean, I don't care if it is mismatched or has a light stain that did not come off in the wash.(but I do like to get him something nice and comfy) But this was almost like "beginning of school year" shopping, even though he will only be 10.5 months!

But I keep picturing him sitting on a daycare floor all lonesome... I want him to be cute and get attention Smile I know, nothing rational about this argument. But it was a strong and sudden shopping impulse. And does he need more outfits? Pbobably, he has grown out of most of his.

Plus, it is hard to be frugal when it come to baby.

Here is online pictures of some of my bounty:
















This one I got in a bigger size, for when he can walk.

My little boy is going out into the world!

Sometimes even pricey manhattan bar is worth it.

August 19th, 2011 at 05:36 pm

A coworker friend is being transferred to Afghanistan for indefinite amount of time (most likely years). He is having farewell drinks tonight at a fancy bar and I am definitley going.

DH is fully supportive and will watch the baby.

No room in budget for vacations -- it is now a "challenge".

August 18th, 2011 at 02:31 am

Running new numbers that include daycare (even the cheapest one in existence) brings home the reality of how tight our new budget will be come September.

We will have to cut back on a bunch of things to simply stay in the black and not spend more than we make per month. It is pretty close. So we can't have a designated budget line for trips like we used to.

Paychecks are now designated for other things. Vacation savings will have to come from "other" or "challenge" money. If I spend less on something else, cashback, something unexpected, etc...

We have a designated account, and it has some money already(we haven't used it in a while) but it is not enough for our vacation plans in 2012. So now it will be a challenge. I don't want to give it up, it is important to our family.

The financial part is in addition to the challenges of taking a vacation with our little one.

Keeping fingers crossed and hoping!

August 16th, 2011 at 09:41 pm

End of this week hopefully we will know if we have a daycare spot for September. We have been on the waiting list for 16 months (our baby is 9 month old) and we don't know if we will make it. 7 people have to decline a spot in order for us to get in. (20 spots total) I hope people had a change of plans, or like their current arrangement.

Even though this daycare is 1 hour 20 minute drive away, it is still our very best option right now.

Childcare situation is really tough.

It is NOT just about compounding.

August 15th, 2011 at 09:13 pm

One of the major arguments for starting to invest early is the power of compounding interest. But we have heard that 1000 times.
There is another point, more simple and more human ones that gets overlooked.

Many working, middle class people tend to think, when faced with such huge undertaking as retirement planning that "right now we don't have that much to spare, and it is tough. So we'll do it after we get a raise, renovate the bathroom, be in a better financial position, etc...

What they miss is that it DOES NOT become easier with age and all the milestones. Even if your salary goes up...

1. When you buy a house, you'll have less money, not more.
2. When a baby is born, you'll have less money to invest, not more.
3. As that baby grows up, you'll need to pay for his education and activities, you'll have less money to play with, not more.

That is why one should start before all these things and take it a year at a time.

We started as soon as we got a job, thinking that once we face these milestones it will be tougher and we may even cut down or stop retirement savings.
But so far we managed to continue. A year at a time.

And if at some point we just have to stop for a while, at least we would have had a good start already. And won't do it thoughtlessly because it is the easiest thing to cut (because the consequences are far delayed but not any less serious).

Weekend recap

August 15th, 2011 at 05:48 pm

It was a nice weekend

Saturday:

Lovely brunch in Chelsea with friends (they insisted on treating)

Browsing little shops in the Village (I did not buy anything).

Asian American International Film Festival movie. ($30.5 for 2 tickets)
One of the pluses of living in NYC is being able to do these things.

Visit to a Hermes store (I love my new fragrance!).

Beers and beer cheese at a little place in Harlem.

Than shopping for groceries at Fairway. ($130) not exciting, but necessary.

Sunday we had a 3.5 hour kayaking course scheduled, but it rained hard all day and it was cancelled. So I went to a nice mall and than stopped by with DH for a draft beer.

Also stopped by Buybuy baby and brought in competitor coupon for the baby gates we already purchased (the coupon was valid at the time we purchased it but now now) and they did refund the difference! $42! that was cool.

Oh, and we bought a fancy SimpleHuman stainless steel trash bin for the kitchen. (with 20% off coupon).

That was pretty much it.

Sunday was not too exciting, but still nice.

Now, back to work.

Do you groupon?

August 13th, 2011 at 03:46 am

Am I the only one into this new form of savings?

The only problem is that is often makes you get things you probably would not have tried otherwise. But on the other hand, one can find something interesting and save on entertainment.

Today I got a $43 certificate to a restaurant near us for just $10 (I used $10 groupon bucks). It is a place we would have gone to anyway.

I also want to go to a 3.5 hour kayaking course this Sunday that I got on a great discount.

This is large city's version of couponing... on experiences.

How much space do you really need?

August 12th, 2011 at 07:18 pm

Just saw this on Yahoo, featuring 78ft and 90ft New York apartments.

http://news.yahoo.com/blogs/new-york/explore-78-square-foot-midtown-mansion-152535706.html

Yep, it is all relative.

Middle class New Yorker's bills - snapshot of ours

August 11th, 2011 at 08:39 pm

These are just our basic bills paid in the first week of August. Crazy!

$3031 Mortgage and maintenance for our 950sf apartment in Bronx.
This is with 110K down and 4.75% interest rate.

$860 Yearly life insurance DH. (I pay mine monthly)

$250 car payment (we put over 13K down to keep it low)

$967 6 months car insurance for 1 car (that it the cheapest we ever had in our life time)
Cheapest it has ever been. When DH was a fresh driver it was close to $400 a month for the paid for $5,000 car.

$186 my monthly train pass

$110 tolls for the previous month (low, because DH did not drive to work, he is on leave. When he drives to work this bill can reach $400)

$92 (internet, home phone, cable)

student loan $142

These are just routine basic bills. (yes, one of them is annual and semi-annual, but the rest are monthly)

So we paid out $5,638 in first week and has not included anything but routine, "beginning of the month bills". Now we have to buy food, clothing, entertainment, gas, data plans, baby things and other life items.

The monster bill that is on our doorstep and will add at least 2K to our monthly expenses is DAYCARE!!! (this is a cost of a basic daycare, not a nanny).

That will make it incredibly tough.

We are doing fine without daycare, but man, when that bill comes... We will have to supplement from savings and hope something else changes.

I know people will say "why do you complain, move!". Well, I don't want to move, I guess I just want to complain Embarrassment

Hermes perfume for $40?

August 11th, 2011 at 05:35 pm

So I want this fragrance from Hermes called Osmanthe Yunnan (from their Hermenessence line that is only sold in Hermes boutiques). I have been looking for a good osmanthus fragrance forever, ever since I smelled those intoxicating orange bushes in the fall in Japan.

Naturally, I don't want to pay $235 for it.
I also don't want to buy on ebay since I want guaranteed authenic and fresh and they ONLY sell this line in Hermes boutiques. (ahh, the foreign world of $10K+ handbags and $6k wallets).

But they have travel set available of 4 fragrances that you can pick for $145 (with tax it will be $160).
Since I live in NYC I can go there and pick the fragrances and have a first-hand top line, correctly stored, 100% authentic product.

And... sell the other 3 fragrances? Probably to friends, or on ebay or craigslist. Maybe there will be others who would want to do the same thing of buying a fragrance that would otherwise be too expensive and not available in a smaller quanitity.

My main concern is that I fall in love with the other fragrances from this line and will want to keep them too. I've heard great things about Vetiver Tonka.

Hey, it may look like a counter-money saving post, but it is not. It is not about going without little pleasures. Sometimes is about getting those pleasures for much less money, right?

So is this a good idea?

I didn't go on vacation for 1.5 years and won't be able to go any time soon.

August 4th, 2011 at 06:32 pm

But I love thinking about it. I need to think about it, plan it, anticipate it.

I spent every single vacation day attaching it to maternity leave to stay home with my little one. So now I have to earn them from 0.
Last time we were on vacation was when we conceived (9 day ski vacation). So more than a year and a half ago. I had a high-risk pregnancy so I could not go anywhere while pregnant.

We are hoping to go for a week during the next ski season, and for vacation in Asia a YEAR from now (if I can convince my employer to let me go to China for training - that's a big "if".)

That dream of a vacation would be next July, but I am planning and anticipating it already.

I am budgeting for it now too. When you put money away in a specially designated account, it feels a little more real, if feels like it will happen.

Should I dump this mutual fund???? What is your opinion?

August 3rd, 2011 at 05:39 pm

I've been reviewing my accounts and facing a dilemma right now. Should I get out of this fund?

TRowePrice Emerging Europe & Mediterranean TREMX

My average cost basis $9,559
Income and fluctuations $2,460
25% growth over 3.4 years, so about 7.5% per year
I was dollar cost averaging, so it is not exactly accurate, but I am taking a lower figure.

NOTE: The fund did slightly better than Lipper Emerging Markets Funds Average for the last 2 years

CONS: Morning star rating is only ONE star (not that I put a tonn of faith into those ratings, but if it is that bad that they only give one starů)

The fund is marked as HIGHEST POSSIBLE risk on the TRowePrices risk chart.

Though this fund has been around for 11 years.

Average Annual Total Returns:
Month End Quarter End
07/31/2011 06/30/2011
1 Year 20.90% 35.19%
3 Years -5.30% -8.71%
5 Years 2.64% 3.90%
10 Years 17.62% 16.74%
Since Inception 11.08% 11.14%

I had it for 3.4 years and have average total return of 7.5% per year (due to timing mostly, I was adding money to it when it was tanking during crisis and Greece issues times)

The fund is in my ROTH account and I held all shares over 90 days, so no fee or tax implications.

If I were to get out of it, what fund would I move the money to?

What would you do?

01 August spending and gains.

August 2nd, 2011 at 07:42 pm

skipped breakfast (bad, bad girl)

$7.95 - Lunch - Korean spicy tofu soup (not worth it, will know for the future. I love Korean food, but that wasn't it.)

$2 -- impulse "hi-chew" purchase at the counter (bad, bad girl)

Dinner. Sichuanese restaurant dinner with MIL. Normally she pays, but we should occasionally. So we paid yesterday.

$60 for a spicy hot-pot fish, ox tripe appetiser and some Cantonese dish she ordered. and 2 beers. Not so bad. But we had to venture out all the way to Brooklyn and got home way past baby's bed time.

Oh, and we got red envelopes for DH's birthday. We still get them even though we are married and have a baby. And for some reason I always get an equal envelope if DH gets one. So even though it was his birthday that passed, I also got $200. So we got $400 in gift money.

I am saving my $200 for guilt free shopping when I have my next vacation some place fun, like Singapore or Shanghai.

So total $70 spent on food
$400 received in gift money

I also received a $40 bottle of wine as a gift from a coworker.
So a good day overall.

Got an unexpected gift and now temptation to go outside the budget.

August 1st, 2011 at 09:20 pm

I was not planning to spend any money on wine this month (outside my groupon to one wine store).

But a co-worker just got another position and he bought me a gift of my favorite bottle of Italian white. Only one store in NYC carries it, so I rarely get it. Plus, it is $38 plus tax, so $41-$42 per 0.75 liter bottle after tax.

So here is where the temptation comes in -- he talked to the owner and it turns out that the small winemaker who produced it has died and they were unable to get in touch with the widow. So this may be the last 3 bottles in NYc. My first instinct is to go there and buy them.

It is unplanned, but since I may never be able to get it again...

I am working, DH is a stay at home dad for now.

August 1st, 2011 at 04:50 pm

For the next 2 months.

It is a complete role reversal after 9 months of me staying at home.
I am having an easier time being back to work. I even like my commute -- 1 hr door to door, split between train and walking.
I'm working only 6 hour days right now (but getting paid as if I am working full time). This arrangement is my employer's way of accommodating nursing mothers of infants under 1.

DH is griping and he is tired all the time now. (and he is not one of those lazy dads at all, he helped me enormously when I stayed home).
But taking care of the little one full time is not easy. And they do have a great bond and he is as crazy careful with the baby as I am.
And I do understand him being tried and cranky -- I've been there.

Little one is amazing -- sweet, patient, happy (most days), curious.... He is so good natured I don't know how I got so lucky. But he is also very attached to us (he always got so much attention) and so unless he is sleeping, it is impossible to even have some food.

I look forward to getting home and taking him. Little guy gets so happy and excited when I return. Screaming "aaa, aah" waving his hands trying to jump up...so cute.