Ski Trip Weekend!

Ski trip weekend is here! This is when my closest friends and I take our annual girls' trip. We decided two years ago that as we get older and our lives change, we needed to make a commitment to each other to renew our friendship every year. And though one of the regulars can't make it due to her impending pregnancy, a group of six is ready to hit the road in our twelve-person rental van (aka Tata-mobile) for Michigan... or Bust! (or is it Michigan and bust?)

I've been practicing my ski form in the mirror all morning while I'm packing. I can't wait to hit the treacherous slopes of Michigan for a weekend of fun and friends. (So cheesy, right? but it's true.)

If you're looking for a getaway on the cheap, check out trips that are one day's drive from your hometown. In Chicago, I have had great weekend getaways in Madison, WI; Boyne, MI; Milwaukee, WI; Lake Geneva, WI and plenty more. Going with a group typically makes the trip cheaper because you can split rooms, food, etc.

Here are some other tips for saving money on your next weekend getaway:

Eat in.
I always find that eating out in vacation towns is costly. Not only do you tend to splurge a bit on your meal, but since you're on vacation, expensive fruity drinks and citusy martinis always seem like the BEST option on the menu. Instead of eating out, we assigned meals for our trip that could be made in advance, frozen and then thawed at our lodge: Italian beef, lasagnas and casseroles. We plan to dine at the lodge for one dinner, but the rest will be spent catching up and sharing memories over home cooking over bottles of wine.

Bring your cooler.
Not everyone drinks; those who don't probably save loads of cash. But if you are a drinker, bring a cooler of alcohol and mixers with you to save on pricey lodge drinks. Common sense, I think!

Bring some activities.
Anybody who grew up in a big family knows that cards and board games can make the difference between a great trip and complete boredom when you're traveling with family. Why should traveling with friends be any different? We're bringing Taboo, Cranium, LCR and cards just in case it rains. Besides, Board games make great drinking games... I just watched an old episode of How I Met your Mother and got some inspiration for making my own game night rules.

Cut off the workaholics.
Ahem. My name is Nicole and I am a workaholic. I pledge not to obsessively check my work e-mail every 10 minutes throughout the trip. I may need help with this.

Split costs on everything.
We're splitting the cost of a private ski lesson Friday morning, and we split the cost of gas, groceries, alcohol and any other expenses that come up on the trip.

Look for deals.
Brunch and lift tickets are included with our lodging. Before I found Boyne last year, I looked at three or four other places, and factored in gas, mileage, food and equipment rentals into a handy-dandy comparison spreadsheet. Boyne was the best deal. If you're scouting weekend getaways, don't book the first thing you see. Wait for a good deal, shop around and use travel web sites like Kayak.com and Hotels.com to find discounts and great deals. Your friends will thank you.

OK friends, I'm off! I hope you have a fabulous weekend and I'll see you when I'm back in the city.

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Is Staying In the New Going Out?

Pack away the fancy heels and close up the closet. I'm saving cash for next week's big annual ski trip with the girls, which means I'm staying in this weekend to save some dinero. On the agenda for tonight:

Recipe for home-cooked dinner.
Bottle of wine.
SNL.
$3.50 1000-piece puzzle I bought at Target.
Plenty of texting and Facebooking with my best gals, who are also at home saving cash tonight.

Last night, B and I made pasta and rented Changeling, which wasn't bad. After all, I haven't seen movies in ages. Now's as good a time as any to catch up. And apparently I'm not the only one.

According to ABC News, more of us are staying home on the weekends to save our dough.

I think that's true; I'm spending less time on the social scene lately and more time visiting friends homes. Then again, that may just be winter in Chicago. We'll see what happens come spring.

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UPDATED: Be Aware Of Montly Expense Changes (or Ramen Noodles Forever)

Our electricity bill in December and January doubled this year vs. last year; up from the $150 range to $300 per month. We're not using more electricity; the cost of it must have gone up. But it begs the question: when a monthly expense suddenly becomes more expensive, how do you cope?

Eating nothing but peanut butter sammies, ramen noodles and soup is the old college way. But my own non-scientific research indicates that earning a salary directly negatively impacts one's taste for ramen noodles.

Beyond returning to a college lifestyle, I see two short-term techniques for coping with an increased expense when reducing the expense itself is not an option.

1) Reduce expenses elsewhere.
2) Take it from what you were putting into your monthly savings.

Reducing expenses is obviously the better option. Figure out how much the increase is (in our case, about $75/per person, per month during cold months) and see what line items you can afford to cut... Maybe it's having one less vacation for the year; maybe it's one less night out per month; maybe it's two dinner-date nights less in favor of home-cooked meals (Ramen, anyone?). Or maybe you delay the purchase of something you were saving for.

As is the case in the second option, you can also increase your monthly operating budget. Basically, if you were living off of $1,000/month (just an example for easy computing) and saving the rest, you now need $1,075/month to live, and you'll save a little less every month.

Neither is a very good option, which is why they're short-term solutions. The long-term solution is that you'll need to make more this year to cover your new expenses. So ultimately, if you're saving a little less this month, the idea is that your pay raise should cover the increase in expenses and you'll ultimately even out. Taking on a second job or getting a new, better-paying job are options, too.

This year, however, I'd be willing to bet that few of us see pay increases. After all, if the work force continues shedding jobs at this rate, some of us will be lucky to actually have jobs (let alone extra jobs). So then we go back to tightening the purse strings and cutting expenses.

There's a third option on the table, which could work for some short-term gains if you're desperate (living VERY tightly month-to-month), and that is selling stuff. If I was really in a tight fix and needed money, I could always sell my Wii or my camera on e-bay. Some can sell designer clothes or shoes, or perhaps art, jewelry or furnishings. It's the modern day equivalent of a garage sale. But clearly it's short-term and the downside - loosing your stuff - negates the short-term fix in most cases.

A final option, which is not really an option, but people do it regardless, is to not change your spending patterns. How's that possible? Credit. Once the bills are paid, some people put groceries, gas and non-essentials on credit. But again, what you'll pay in the future for these items, considering interest, makes the long-term cost greatly outweigh the short-term relief benefits. I'd stay away from this one.

I think most people would do a combination of the first two options, reducing costs and saving less, if a significant expense suddenly came up. But in the case of my electricity bill, I don't think people pay enough attention to notice the changes. In Chicago, our electricity bills swing wildly depending on the season. In Spring and Fall, they're super cheap, while Summer and Winter are crazy expensive. So if you're not paying attention, you might just think the price increase is part of the normal trend.

The point here is that even with small monthly budget changes, it's important to review the costs, explore options and pick the best one. If your expenses are increasing each month and you're blind to it, you could be unconsciously heading to the land of bad decisions, and ultimately costing yourself a whole lot more.

UPDATE: Two additional suggestions just came in from my super-awesome readers.

MOXIE says:
1) Double check that you don't have a leaky window or something for the heating increase. That happened one month in our first apartment & we got a ridiculous heating bill.
2) You probably could use less of either utility, too, if you're like most people. Look into energy vampires like always on appliances.

STEFANIE says:
If you plan ahead, you can put some extra money away during the cheaper electricity months to use for the more expensive ones. You can also reduce your energy use as much as possible (turn down heat and hot water temps, use power strips for multiple plugs and when you're not using them, turn the whole plug off, take shorter showers, don't use hot water in a washing machine, don't use dishwasher, etc.)

--- Stef: Great suggestions! We're already in layers and wearing blankets, so I don't think we can get any colder around here, which is probably why I forgot this one. Also, our washer/dryers are communal in my apartment, but good suggestions for those whose are not.
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Random Thoughts: We're Writing Off 2009 Edition...

In the last two weeks, I've noticed that people have already written off 2009. Congressmen, spokespersons, business leaders and tv personalities are all saying things won't get better until 2010 (if that). If our government and business leaders have already written off an entire year as early as February, how are the rest of us to remain positive? Are we also supposed to write off 2009? What does that even mean? Am I just supposed to sit around waiting for some mysterious signal that things are officially on the up-and-up? No gatherings, no going out, no vacations, no celebrations... just hunker down and hope for winter to end?

While a company can write off 2009 as a down year, it's infinitely harder to write off a year of your life. In 2009, for instance, I'm celebrating my 30th birthday, one of my best friends is getting married, my youngest brother is graduating from college and I've got two mini-vacations planned with friends and family. We may all face the possibility of financial setbacks this year, but that doesn't mean life stops. Enjoy what you can, and celebrate what you have - don't lament what you're missing.

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My sign of the times: I found out yesterday that my cash balance plan (kind of like a pension) is being frozen for good. I didn't quite understand the mailing I received in the mail that shared the news, so I made B read it for me (being a law student with a background in finance FINALLY came in handy!). He confirmed what I thought I read... I can keep what I have, and it will earn interest moving forward, but no more will be put in. Another casualty of the recession.

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I'm seeing lots of articles on how to have a fun, money-savings games night in your home. The formula goes like this: make some dip, pull out Scrabble and Taboo, grab some wine and yuk it up! (Really.) But lately, even those money-saving get togethers result in exasperated, anxious conversations about the economy, savings accounts and 401ks. Until a recent party I went to that featured a tournament-style couples night; eight couples competing in trivia, bags (or cornhole), beer pong and ping pong. There were point systems, losers' brackets and payouts, but not a lot of time for our between-jobs friends to discuss their employment status. The lesson? Keep it competitive, casual and complicated to get your mind off work!

***

I've decided I hate the word stimulus. It's creepy and I don't want to see it any more. Thank you.

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Response about my W-2, and a note for Mely5862...

I just wanted to take a minute and say thanks to everyone for participating in such a great discussion in reaction to Why My W-2 Makes Me Cry. Despite how often I think, read and talk about finance with friends, family and readers, I was definitely hurting as I considered my 38.8 percent drop in my retirement fund. But I'm thinking more positively now thanks to your comments and have a more rational (or optimistic) point of view that during the next 30 years its value will recover. I'm also thankful that this is happening now as opposed to when I'm close to retirement. The experience and knowledge will make me a smarter investor in the future.

That said, I wanted to take a second to respond to a comment from a reader that I think is worthwhile to share because it can help you all to learn a little more about me, my level of financial knowledge and my approach to writing the blog. Mely5862 said:

After thinking about your post, I became mildly irritated. You have a blog read by tons of people and that has, I believe, been featured in articles and magazines. A finanical babe right?

Yet, computer savy as you are, you have not been following your 401K declines on the that company's website? I check mine at least weekly and once it began to drop I decreased my contribution. Sure I lost alot and you may end up ahead of me when the market recovers but I knew what to expect on my W-2.

The first point she makes is about my level of financial knowledge. I hope everyone reading The Budgeting Babe does understand that I am a public relations professional with a degree in communications and fine arts (and minors in marketing and Spanish). I slept through Econ 101 in college and never took a finance class. I'm not sure I ever took any math classes beyond "math for the communications major." So, I'm actually not a financial babe in that I work with the industry, nor am I someone with any sort of financial aptitude. I'm a finance newbie fumbling my way through the ups and downs of balancing a checkbook like a lot of other folks. I have a hard time not paying bills late and until recently kept track of my accounts in a homemade excel spreadsheet (just started using Mint.com but I'm still scared of it). I don't own real estate, and I'm still paying off my student loans. Most days I'm still proud of myself that I have a growing savings account. I still use Google to look up finance definitions when I read the NY Times. But I'm well on my way to being in a good financial place as I continue my journey to learn about finance here.

With regards to my knowledge of my own 401K, did I know the value was declining? Yes. I used to check my 401k once per month, but given that the market was declining rapidly I stopped on the advice of some folks who know finance better than me. They were right. I typically freak out when I see the ups and downs. Had I been checking, I would have had a greater desire to reduce the contribution. Which runs counter to the goals I set for myself. And despite being very upset about the negative change, I'm glad I kept my contributions in. It's better for the long run.

That said, I know a lot of people who have contemplated decreasing their 401K contributions - like I have (I even posted about it last year) - during this time despite their better judgment. In creating the post, part of the writing was just a reaction to seeing a number on paper. But I wanted to share that frustration with other financial newbies and offer a place to dialogue about it. I want people to know that it's OK to be frustrated and scared right now. There's an emotional reaction that I don't always feel is addressed when financial gurus say "just don't look at it," and I believe there's some release in talking about those emotions. I'm not the only one feeling it, nor is the girl in the cube next to me or the 30-year veteran who's losing her retirement. It's important to talk about it. Or cry about it. Or freak out about it... whether you're paying attention to your monthly statements or not.

But despite all the emotions, my actions are in the past and I have faith that the market will come back and pay off my patience sometime in the next 30 years. It's a risk I'm willing to take.

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Spending Winter Frugally: While Decluttering is Good For Your Wallet

Several pounds of various fruity smelling lotions that I got for Christmas five years ago... gone.

Bags of "gently used" and slightly frumpy work shirts that I wouldn't dare wear anymore even if I had no clean laundry... gone.

The black soap dish and toothbrush holder from when I thought it would be cool to have black accents in my Pepto-pink tiled apartment bathroom... gone.

Winter 08-09: Remove, recycle and move on.
* * *
Can you think of a better time than this winter's deep freeze to spend hours decluttering your home? Really, when it's zero outside (or BELOW zero), and you're going stir crazy at home, is there anything better than throwing some old s**t out to feel like you've accomplished something? I think not. Spring cleaning may be a time for renewal, but winter clean-out is time to deal with your demons.

As you may have gathered, I've spent some down time during the last seven weeks decluttering and organizing my stuff. When I started, I was unhappy with the clutter in my apartment and the fact that I seemed to have no space, especially in my closet-sized bathroom. On a frustrated whim, I started cleaning Oprah-style in that tiny room... I pulled everything out of it - which took up an entire hallway AND the dining room of my place. I was shocked by the excess. I threw out garbage, set aside a pile for the Salvation Army and kept only the supplies I need right now. Did I really need ten bottles of hair product? Three kinds of hot rollers? An entire drawer of travel-sized moisturizers? Absolutely not.

I've never consciously decluttered anything other than my closet because it always happened naturally for me. From the time I was 18 until I was 25, I moved about once per year. Moving is a natural declutter - boxes are heavy so whatever you take better be worth it. But now that I've lived in my apartment for five years, I've accumulated some stuff. Too much.

So I took advantage of this winter's harsh weather to take action. After I finished the bathroom, I went room to room to see what I could trash, recycle or donate, and what I could move to my parents' garage (seasonal stuff). The end result? I'm happy again with my apartment and I have a better idea of my unnecessary spending/shopping/storing patterns.

How does decluttering relate to your finances and the economy? Good question! Here are several reasons why you might want to consider cleaning out, uncluttering and reorganizing your place that have everything to do with finance:

1) You hate your place, but you're stuck there. I thought I'd be out of my cramped apartment in April 2009 and moving into my first condo. That's no longer happening due to the crazy financial crisis. I need to stay put. Getting rid of some stuff opened up new space in my apartment and enabled me to see the space in a way that had been blocked for a while.

2) You're trying to curb spending. Two factors help out here. First, decluttering takes hours and hours, and doesn't cost a thing. Second, once you see how much stuff you already have, you might realize you no longer need to go to the store.

3) It's below zero outside, and there's no good TV on. What are you waiting for? That point sells itself. See above points for good-for-your-wallet benefits.

4) Lots of people need your old stuff right now. If you've got a blender taking up cabinet space because you received a new one for X-mas, I bet there's an out-of-work family that could really use a blender. Same goes for your old coats, blankets and work clothes. Some charities will even pick it up for you on your doorstep.

How do you do it? I'll leave the DIY tips to the experts. Here are a few to check out:

O Magazine/Oprah's Web site: Learn to conquer clutter

Real Simple Magazine: Lots of good clutter-ridding tips

The Nest: Get Rid of Clutter!

It's not an easy process, but I can report that having done it, I'm happier with my apartment and feel I can breathe again now that I've cleaned out my mess. Everything has a home, from random Halloween costumes to travel kits to scarves to my tax paperwork.

Let me know if you guys have any good tips on how you're spending the winter frugally.


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Why my W-2 Makes me Cry

It's tax time, and those pesky W-2 and 1090 (or is it 1099?) forms are slowly finding their way into my mailbox. Yesterday, frustration and anger set in immediately after opening my W-2. I'm not being overly dramatic; I wanted to throw something. Hard. And scream. And cry.

I have been doing my best to keep contributing to my 401k while avoiding looking at it, as is the advice most personal finance gurus share. But when my W-2 informed me, like a gossipy schoolgirl, that I had plunked $7,500 of my salary into my retirement fund last year, my stomach dropped. I knew that my fund had not grown much in the past year. And so, I went online to check out what happened to my $7,500 in savings from the year.

And here's the answer: it's gone. For now.

On January 1, 2008, my 401k was $19,101.60. During the following 12 months, I contributed $7,359.99. My employer contributed $3,359.99. Yet on December 31, 2008, my 401K's official balance was $19,978.78. My personal rate of return on the account was -38.8 percent for the year.

I felt like someone punched me in the gut.

Do you know what else I could have done with $7,359.99? I do. In fact, it makes my heart ache to think about all the things I could have done with that money -- hard-earned compensation that caused me to work late nights and weekends and sacrafice personal relationships. Here are a few ways I could have spent the money:

- Put it into my downpayment fund and been that much closer to buying a home
- Taken a month-long vacation to several foreign countries
- Upgraded my apartment
- Given my mom and dad their long-awaited vacation to Italy or Alaska
- Gone back to school
- Sent my younger brothers to study abroad
- Used it to buy a car
- Created a scholarship fund
- Held a wedding for me and Brian (or at least half of one)

The list goes on, and on, and on. While I know it's important to stay positive, is it OK if I tear up for a while at how right now it feels like I threw $7,000 out the window, and how far away I feel from my financial goals?


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Dating a Banker Anon: Elaborate Hoax?

A couple people sent me this article, "It's the economy, girlfriend," with the headline "hilarious" or "OMG." I couldn't decide what to do with it. I don't know anybody like these women. They seemed kind of cartoonish to me. But just because I don't know people like this doesn't mean they don't exist. So, I was going to post it with some snarky comment, until I saw this article on NPR.org: "Did the New York Times get Punk'd?"

What do you guys think?

And if it were real, what do you think about the girls? I took a look at their blog, got one paragraph in and promptly tuned out the nonsense. It's not worth my time to read. I'm more of an "invest in your smarts and savvy" kind of girl, than an "invest time into finding a rich boyfriend" kind of girl. To each their own, I suppose. Good luck with your book, girls.



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Feb: Starting Again.

I was on a weird sort of self-imposed hiatus during the month of January, as you may have noticed. A sprinkling of writer’s block, a dash of winter blues and some good ol’ (long) recession-style office hours have conspired to stop my usually creative and energetic self from doing much of anything lately. But I haven't stopped thinking about this blog or my finances. And I'm not alone (about my finances, I mean).

Now that we're officially in a recession, as companies cut thousands of jobs every month and Americans reduce spending, everyone from Vogue to MTV seems to be writing, talking or offering advice about personal finances. It’s a scary, unsecure world out there and nobody seems to know when it’s getting better. My challenge is to figure out where The Budgeting Babe fits into the new dichotomy. Neither an expert nor someone who’s struggling to start out anymore, what can this site offer to girls and guys who are trying to find a place in the world?

Well, I’m someone who has been affected by the recession – my 401k is tanking, I’ve decided not to buy a place this year due to all the economic uncertainty and now that B’s laid off, we’re soon to become a one-income household – but I’m not overwhelmed and living month-to-month, either. I’m navigating the waters just like you, and hoping that we all come out OK in the end.

That said, I think a lot of smart, talented, young men and women are just now learning that in order to survive on their own in this new economy, they must live on a tight budget. Many of my friends who were living the good life a few years ago – partying every weekend, eating expensive dinners out, buying trendy clothes – are now being forced to develop a budget and (gasp!) stick with it.

Thankfully, that’s one area where I can help. So I plan to go back to basics and write more about what it takes to create a budget, how to stay to true to your plan, how to occupy your time when you have no cash and, of course, how to find a great deal (and look good doing it). Things will still be scary out there and we’ll continue to talk about what’s going on since so many of us are affected by it. It’s a new world, but I’m still the same girl.
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