A Household Alcoholic Reformation

Image credit: Dennis Wilkinson

Image credit: Dennis Wilkinson

At the IM household, the alcohol tends to flow freely. Starting back in 2007, when we were both in graduate school, my wife and I began a tradition: every Friday evening, we would unwind after dinner by splitting a bottle of red wine, talking and enjoying each other’s company by candlelight. These evenings would usually unfold over 2-3 hours and were almost always accompanied by music, games of backgammon, fine cheese (or homemade bread), and conversation that solved all the world’s problems. These “wine nights” were therapeutic for us, and we happily kept up this weekly tradition through most of 2009, occasionally substituting craft beer for the red wine.

Fast-forward to July 2009. Continue reading

New Year Challenge: Track All Spending for a Year

The time has come for me to throw down the gauntlet and issue a challenge to myself. Don’t call it a resolution – the timing as it relates to the new year is merely a coincidence, as I’ve been thinking about this for many months now. Still, the timing is impeccable as a year is an easy-to-measure chunk, so if you insist on calling it a resolution, I can live with that.

gauntlet thrown down

Gravity has taken its toll on this gauntlet.

Here it is: For the next year, I will keep track of all expenses so that I can see exactly how much I spend in a typical year. As an addition, I plan to do it all manually. Tools like Mint and Yodlee can tally up spending reports for any time-period that you wish, and useful as those are, they’re not good enough for my New Year resolution challenge. Continue reading

Getting Serious About Early Retirement

Lately, I’ve done a lot of reflecting on the first post I ever wrote for InterestingMoney. In that (short) post, I wrote about my longer-term goals. Specifically, I mentioned that my purpose in founding InterestingMoney was to track progress toward a single, specific goal. Here’s the first paragraph that I wrote here, back in 2007:

Alright, so my goal for this site is to keep track of my journey toward financial freedom. What is financial freedom? Good question. The answer varies, of course, but one answer is the ability to live comfortably off one’s interest earning without touching the principal investment. This is a lofty goal – one that I will not achieve for quite a long time.

Continue reading

Life Update – New Job, New Location, Old Lifestyle

Mr. IM is back! In the last few months, a lot has happened. When last I posted, I was Mr. IM – homeowner, starving artist, graduate student and teaching assistant at a major university in the Midwest, doing everything I could to keep the bills paid on an embarrassingly low TA salary. When I say low, I mean it: there are people who earn a lot more in interest/dividends each month than I brought home as salary. 🙂 Though we were poor, my wife and I were happy with our surroundings and with one another.

Now, I’m Mr. IM (Dr. IM actually, but whatever) – college professor, hungry artist (but no longer starving), and renter of an apartment in the great state of Texas.

So, since this past July, I’ve packed up all my belongings in the house I own, moved nearly 1,000 miles away, and started a new job and a new life in TX. Continue reading

Desperately Seeking a Job (No Longer)

Note: This is a follow-up from a previous post (Desperately Seeking a Job).

As some of my readers (both of you) may remember, I’ve been on the job market for some time now, furiously and desperately trying to land my first job as a university professor. Times have been tough. My wife and I have been scraping by on laughably pitiful salaries as graduate teaching assistants while I finish my dissertation and send out application after application to any and all available positions. We watched in horror as the recession took its toll – most universities announced budget cuts and hiring freezes, and the already-dwindling number of faculty job openings in my field (within the Arts) completely dried up.

Finally, that search is over. As of yesterday, I accepted an offer for a faculty position in the great state of Texas.

If you will forgive me this one sophomoric bout of glee: OMG! Holy crap! I got a job! No more Ramen noodles and plain rice! What a monumental relief! OMG!

Ahem. Pardon me.

The Longer Story

I knew since my second day of college that I wanted to teach at a college or university. I applied to college as a pre-med major, but quickly switched to the Arts. Yes, I knew that by dedicating my life to a career in the Arts, I would likely severely limit my potential to earn income. I also knew that I would severely increase my chances at finding happiness and fulfillment in my career (nothing against the medical field, I just knew it was not for me).

A full decade has gone by since I made that decision. Countless hours of practice and study have gone by. Years of frugal and careful existence as a graduate student and teacher have passed. I’ve jumped through flaming academic hoop after hoop – all to rigorously prepare me for life as a college professor… I think.

Then I emerged at the other end, ready to claim a hard-earned job and a paycheck that totaled more than 8k a year. Yes, I’m ready to admit that now – my teaching assistantship stipend totaled an amazingly pitiful $8,000 a year. Ouch. Granted, my tuition was covered, but it’s still difficult to live on a salary that totals fewer than five digits. If you had a salary at all, I hope it was higher than mine. Though I do my best to stifle any bitterness, i confess that I feel some rising bile to think that other graduate students at my university earn upwards of four times my stipend… and complain about how low it is. Grrr!

Imagine my dismay when, at the end of my decade of toil and poverty, the recession rears its ugly head and the list of available jobs in my field disappears practically overnight. The prospect of NOT getting a job grew from a passing thought to an accepted certainty. I admit that it became more and more difficult to fend off despair. There I was, having spent (or wasted?) nearly all of my 20s in a hard-fought attempt to get an education and earn the highest degree available in my field, and for what? To watch my dreams fade beyond sight? To take a job paying minimum wage just to survive?

Don’t get me wrong – I’m certainly not above doing whatever it takes to keep the bills paid and the mortgage current, and would have gladly accepted a job stocking shelves or waiting tables just to make ends meet. If that were to come to pass, I would only wish that I hadn’t spent so much time getting an education when my Bachelor’s degree (or even my high school diploma) would have sufficed.

How It Happened

At the end of February, I got a phone call out of the blue from this university. They wanted to bring me in for an on-campus interview. What? Are you kidding?! I practically somersaulted down the stairs after I hung up the phone. The sheer prospect of actually getting a job in my field after all these years of preparation elated me.

The interview went well, obviously. I certainly enjoyed mingling with the students and faculty. My teaching demonstration was well-received, and I left the entire interview feeling like I did the best I could. I had no regrets, nor did I feel like I made any obvious blunders. 🙂

Almost exactly one week later, on Friday the 13th actually, I got a phone call. My phone did not recognize the number, and like a moron I had forgotten the area code of that city. So, thinking it was a telemarketer, I answered the phone with a coarse Hello?!

No, it wasn’t a telemarketer, and upon realization of who it was, I sheepishly and rapidly changed my tone. The following line from the department Chair made my ears ring with dulcet tones: We would like to offer you a faculty position at the rank of Assistant Professor at our university. How glorious! How wonderful!

I accepted immediately, but the department Chair chuckled and told me to take the weekend to think it over, and I could give them my final decision in a few days. I said, That’s fine, but I’m planning to accept the position. I almost guarantee it!

So, yes, dear reader. I finally landed a job, and it’s during a time when there are literally no more jobs open in my field. For the past few days my emotions have sent me on a roller coaster through glee, relief, jubilation, and humility.

The Role of Karma in a Job Search

About a month ago, when all seemed the most dire and bleak, I came to a decision. I decided that if I could not have a job in my field, I would at least try to help other people I knew in a similar situation. I started monitoring job vacancy lists for openings in related areas. Whenever I found an opening that seemed to fit a friend or colleague of mine who was also seeking a job, I sent them a link to the announcement.

This continued for a couple weeks, and I sent at least a dozen announcements to friends in related fields. Lo and behold, my phone call with the on-campus interview notification came in out of the blue. Coincidence? Yeah, maybe, but perhaps karma played a role, too.

Shortly before I left for the interview, a good friend who is also on the job market approached me and asked if I would consider writing a letter of recommendation for him. Sure, no problem. I wrote and dispatched four letters for him to various colleges.

On the same day that I received the job offer, he called and told me that one of the places where I sent a letter contacted him about an interview. Again, coincidence? Perhaps, but maybe not.

My main point here is: don’t dismiss the role of karma in a job search. Even if you don’t necessarily believe in the idea of karma, no one can argue that the desire to help others is harmful. Any act of generosity that you provide for another person will ultimately help YOU, even if it only manifests itself in a feeling of fulfillment or satisfaction. If you want to receive, be sure to give as well. Though I’ve landed a job now, I’m still scouring the job vacancy lists for opportunities for my friends.

Now that I’ve landed a job, I get to look forward to packing up and moving. There are a lot of issues that my wife and I need to cover, such as whether to try to sell or rent our house. Hmm, I suppose these are issues for another post!

A Financial Resolution for 2008

As part of a contest at Cash Money Life to win an iPod, I have decided to make a personal finance resolution for 2008. Actually, I have two, because one of them may be out of my control.

What are my goals? First, to sell my house without a real estate agent this year.

This is my ideal goal. I’m currently finishing my graduate studies and am on the job market for next fall. Provided I get a “real” job somewhere, I want to sell my house without paying a hefty fee to a realtor.

How will I do this? Starting in January, I plan to read several books on the FSBO process, probably beginning with something like Home Selling for Dummies.

Goal Breakdown (SMART Approach)

  • Specific – I have only one house to sell, and I plan to learn the ropes necessary to sell it legally and efficiently. After reading several books and websites, I will list my house on Iggys House.
  • Measurable – Either I am able to sell my house independently, or not. Part of that is out of my control. If not, then I certainly will have learned a lot in case I try to sell a house again. No matter the outcome, I will write articles on the overall process.
  • Achievable – It’s in my best interest to learn as much as I can before I begin the process. For me, the action will begin with a trip to my public library. I will buy or borrow other books. The goal of selling my own house is achievable, though the final decision does not rest in my hands.
  • Realistic – Selling the house on my own will save me thousands of dollars in realtor fees. Even if it fails, it won’t break me financially. Since I have no desire to buy and sell property as a career, I feel this is a realistic goal.
  • Timely – I have until mid-August to sell the house on my own.

Goal Two

Whether I am able to sell my own house or not, I am also going to establish a “moving” fund. Many jobs in my field offer a benefit package to help new hires relocate, but some of them do not. Just in case, I plan to save $1,500 of future income as reserve money to help pay for costs involved with moving hundreds/thousands of miles.

I will do this by saving $200 every month from January through August. That will give me a total of $1,600. Hey look, I even have a $100 buffer. 🙂

If my job actually provides a “moving” package that covers my costs, I will dump my accumulated contents straight into my Roth IRA.

There are many exciting months ahead!

My Three Personal Best and Worst Financial Decisions

Over the years I’ve done a few things right and lot more that’s wrong. Here are a few of each with relation to personal finance:

Worst Decisions

1) Checking Only

For several years of my early adult life my finances were extremely simple – my girlfriend (now wife) and I only possessed a single checking account with a debit card. We were poor students, so we did not have much anyway, but any income we earned went straight to the checking account. Most of our purchases went onto the debit card, and we spent zero time keeping track of exactly how much cash was currently in the account. Sounds like a recipe for disaster, right?

Thankfully, it wasn’t. Despite our low incomes, we were naturally thrifty enough not to ever bounce a check or create any overdraft. I feel like we dodged a bullet!

Unfortunately, we gave up several years of potential interest by failing to have some type of savings account.

2) Waiting to Start a Retirement Fund

I was 27 years old when I opened a Roth IRA (I’m now 28). While it could have been much worse (I could have waited until I was 45!), I still wish I had started saving for retirement sooner. In my early 20s I was far too poor to maximize my contributions, any little bit would have helped. By waiting until I was 27, I gave up several years of compounded interest.

3) Excessive Spending – Computers

I’ve always been a sucker for new toys, especially computers. I did not own my first computer until 2000, but ever since, I’ve been hooked. In those years I tended to purchase a new computer every year or so. No matter how new a computer I had, after about six months I’d start getting an itch, and ogling at sites such as Newegg and Zipzoomfly would ensue. Soon thereafter, a new processor or hard drive (or both) would be on my doorstep, and I’d find some way to justify it to myself.

Computers are still a hobby for me, but my viewpoint has changed. I no longer care about the “high end” hardware, and refuse to spend more than $100 on a processor. My wife and I have a few computers between us, and the average age is roughly 3.7 years old. A couple of them are prehistoric computers that I refuse to let die. Six or seven years ago I would have been mortified to say such a thing. 🙂

Thankfully I’ve never had that kind of itch about more expensive toys, such as new cars! Yikes!

Best Decisions

1) No Student Loans

How can I say this without smiling? I am now at the end of my doctoral degree, and I have made it ALL the way through my education without borrowing a single dollar in student loans!

How did I manage to do so? As an undergraduate, I opted to attend a decent state school instead of a more prestigious (and expensive!) private college. Secondly, I maintained scholarships that covered my tuition. Third, I worked in the college bookstore, which provided me with a $400 credit each semester that (usually) covered all of my textbook purchases. My meager salary went toward meals and housing.

As a graduate student, I’ve been lucky enough to have a teaching assistantship that has covered ALL of my tuition, plus provide me with a stipend. Finishing my formal education without a mountain of student loan debt is in itself a dream come true.

On the other hand, if I could do it again, I would take out as much money in subsidized, deferred-payment loans as I could. Why? Because I would stick it all in a CD, earn interest on it, and pay it all back as soon as I graduated. Suckers.

2) Only One Vehicle

My wife and I used to own two cars. While it was convenient, it also meant that we spent more on repairs, on insurance, and at the gas pump. In 2005 we decided to downsize to one car and buy a couple of good bicycles. It was a hard adjustment – we even spent two weeks pretending that we only had one car before we actually downsized, just to make sure that we wouldn’t kill each other. 🙂

The end result? We got used to it quickly, and the bikes have paid for themselves several times over in reduced fuel expenses. Plus, we get more exercise. 🙂

Our plan probably won’t work forever. If we have kids, we’ll more than likely have to buy another one. In the meantime, I must admit that it’s quite satisfying to zoom down the bike path past a line of stopped traffic during rush hour.

3) Taking an Interest in Money

This is critical – my life changed forever when I consciously decided to take an active interest in my finances. I even remember the day it happened. On October 8, 2006 I received an e-mail from a friend informing me about E-Loan’s 5.5% APY savings account. I almost disregarded it, but something made me surf to the website. I did a quick calculation to see how much money I would earn per month if the contents of my checking account were in the savings account. I was dumbfounded and furious (at myself). How could I have waited this long to open a decent savings account?

From that point, my interest grew (pun intended). Of course, the E-Loan rate has dropped, but I’ve since opened several other accounts in order to “chase” the highest rate. I also opened an account at Vanguard, starting a Roth IRA plus some non-IRA mutual funds.

Then came the realization that I could earn money from credit card rewards, so I tossed my well-worn debit card into the sock drawer and applied for several credit cards, creating a usage plan for maximum rewards.

I even started this website. Naturally I hope it is useful to you, dear reader, but it certainly helps me maintain my interest in money.

How about you? What are some of your financial successes or blunders?