Short post today - Thank you Steve Jobs

Steve Jobs will stay on as Apple's Chairman

...but alas has given the CEO seat to someone else. I do feel bad for Jobs and his family - particularly since I can see his clavicle under his sweater in this photo. I deeply suspect, like many others, that he is stepping into the chairman position because he will soon be too ill to continue as any executive. An intermediate move to chairman will help keep the company stable during what will be a very rocky end of week and months for the market.

He has been lucky. While most patients with a pancreatic cancer diagnosis get a few weeks, he has been very fortunate to have nearly a decade. I didn't think I would feel like this, because, well, I don't know him. I do genuinely feel remorse for Jobs and his family.

While Mr. Jobs and his family and company are preparing for his move to the backseat, I can't help but wonder what this will do to the markets Thursday and Friday. Apple is a cornerstone of the American markets right now (more money than the U.S. Treasury apparently). Thursday was predicted to be a swell of trading and setting up positions ahead of Bernanke's speech Friday. The Jobs resignation might change that - hasten it, introduce additional instability. It's odd to think that such a horrible event for one person and their family could actually affect what the exchange rate will be....how much money I will be able to put aside...what my retirement savings will be worth next month.

I'm not very consumerist, but I do enjoy having a stable and speedy laptop, a simple and tiny machine that carries my music, an apple store that I can walk into 24/7 to fix my computer problems no questions asked. My work life is easier because of simple perceptions of ease and subsequent alterations to personal electronics. It's kind of sad to see the master of taking the complex and sophisticated and making simple and accessible, step away from the helm.

Dear Mr. Jobs - my best wishes to you. In the last ten years, you have changed my life for the better. Thank you, and Mr. Wozniak and Wayne.

Breaking up on a really, really small budget

"You won't be needing that"

I've spent a lot of time writing about food and weddings on this blog. H and I are pretty tight with a couple who broke up a little while ago. The break up deeply shocked at least one member of the couple. I reminded me that I once broke up with someone I lived with in this city....and that, that break up almost financially ruined me.

Renting in NYC is damn pricey

It's no surprise that living in NYC costs a pretty penny. Rent is especially high, and tends to dictate a person's monthly allowance for "luxuries" like gym memberships and cable. I spend more in my rent monthly than my sibling spends in mortgage payments and insurance every month. Why would anyone ever do that?

Well, 55% of all New Yorkers rent their apartments. I would buy my apartment if I could, but alas a mere 350 sq feet in the cheapest neighbourhood South of 96th street will cost a body at least $200 000. Those 350 sq feet will cost you a lot more if you plan on living in any neighbourhood you heard about on Sex and the City or any other number of fluffy, syrupy television shows about New York. It costs a lot to buy here, about as much to rent. If you are low to middle income, it can be very difficult to gain financial ground. Many people live hand to mouth just to put aside an emergency fund, let alone a down payment.

Add to that the cost of moving - a minimum $500 for movers to schlep your stuff from 5th floor of the walk-up you can afford to the top for floor of the next walk-up you can afford, along with basic moving supplies, and the dreaded first and sometimes last and sometimes even an additional month's rent as security for the new apartment and a traditional move in New York for the lowest end studio or 1 bedroom apartment costs at least $2.5K, usually more.....definitely more if you include a broker's fee.

High rent +break ups = more to worry about than who is keeping the apartment

It's very hard to find affordable housing here. Until the 2008 market crash, most apartment dwellers earned their apartment by being taken to town by countless real estate brokers (15% broker's fees for low end apartments). It's even harder to find an apartment with a few desirable features like a partial kitchen, southern exposure or on site laundry. When you find that big apartment, with the echoey kitchen, short number of flights, southern exposure and maybe even a closet you can convert into an office, and slam down those broker's fees and down payments well...you'll fight to keep that apartment.

Most articles about apartments and breaking up in New York focus on exactly that - who gets the apartment? Such articles gloss over the harsh reality of live-in couple break ups - that is the end of a long term relationship can be financially devastating, even if you don't share any assets.

High rent + sudden break up = WTF do I do now?

What do you do when the break up is sudden? In the case of our friends, one simply left the other with literally minutes worth of notice. Moreover, the one that left makes many fold the income of the other and had been paying the majority of the rent. What do you do when you are mid-lease and caught completely unawares? What do you do when you don't have an emergency fund?

I found myself in very similar circumstances 6 years ago. In my case, my ex and I were olympian credit card users as well. For me, the problem became managing consumer and student debt on 1/3 of my previous year's income AND keeping the apartment. My solution was pretty simple - pack and move to cheaper digs until things emotionally and financially settled down.

How I broke up on a budget in NYC

For me (and I'm not a financial advisor) the best approach was to cut losses and cut losses fast. How do you do that? I took a long hard honest look at my money and fought to preserve it. Here is what I did that first week.

1) Listed all of my basic costs

It was painful, but I sat down and listed out every monthly expense I had

2) Listed all debts and assets - shared or otherwise

This was a really awful but necessary experience. I owed well ~100K on my own. He owed money as well. If I intended to financially survive after this hiccup, I needed to know what debts were due right now and how much I owed for the remainder

3) Listed all of my income coming in.

I listed all income actually coming in..not income I thought might come into my hands

4) Basic costs + debt payments - income = could I financially get by without him?

Nope. I very quickly realized that I couldn't financially survive for very long without some support.

and then over the 1-2 months I...

5) spoke to my landlord about breaking my lease

I told my landlord what had happened and offered to help find a new tenant for a few months down the road. They were very understanding and I was spared the cost of my security deposit.

6) found a considerably cheaper apartment - without a broker

This is important - I skipped using a broker. That meant a lot more footwork for me. In the post-2008 real estate market, many management companies are simply renting directly to the consumer - no fees attached. I stayed in the new digs for about 6 months while I got back on track. The switch to a cheaper place made a big difference in my ability to financially recover. Had I been really been with it, I would have found someone looking for a roommate - still, my new digs were cheap enough to let me pay the immediately bills and get my footing.

7) did not use a mover

I needed that $500. Are you kidding me? I borrowed and rent vehicles and enlisted friends to help move what remained of my destuffed stuff. On the odd chance that my friends could not help me, I threw out or sold well over half of what I owned.

8) cut unnecessary costs

I dumped gym memberships, stopped eating out and (after a brief spurt of insane consumerism) I stopped shopping. It was time to gird the wallet

9) did not ask my ex for specific property...in the beginning

I did not want to have to hire and pay a lawyer to fight my ex for my property, so I made the property a non-issue. I was not, afterall, fighting for the custody of a child or a major asset. I temporarily adopted the view that most everything could be replaced. Everything was packed up in storage and when we calmed down a few months later, we methodically went through shared property and decided who would get what.

10) sold and destuffed as much of my property as possible

Apart from being immensely therapeutic, selling some of the items that were just mine lessened the cost of my move (supplies, gas, vehicle rentals).

11) separated all bank accounts

I actually didn't do this right away. Perhaps I should have. It was done eventually though.

12) made a list of I owed him, and what he owed me

We were both very poor and very much in debt at the time, but we had both paid 1000s of dollars to each other for various expenses over the years. I had paid more to him than he to me. I knew that I needed to be repaid to settle some of the debt I still held from the relationship, so I made a list. When things calmed down a little between us I spoke to him about the debts and we set a repayment plan in place. This plan was only possible because our break up stayed above board - and very friendly.

13) increased my income

I quickly took on additional jobs so that I could repair the financial damage of my relationship and our break up. I searched craigslist, asked my current employers and aggressively put my name in at every place I could think of that offered pay and flexible hours. I took on odd jobs, contract work...you name it, I did it.

14) started my emergency fund

Yup, it took nearly being homeless and bankrupted by a relationship gone wrong for me to do - but that's when I start paying myself that 10% a pay cheque.

And eventually, I....

15) read up on personal finance - specifically for single ladies

Along with various "For Dummies" books about stock investing and value investing, I read "The Everything Guide to Personal Finance for Single Mothers". I am not a single mother, but it was the only version of the "Everything" personal finance series that I could get as an ebook from the New York Public Library. It might be the best thing I ever did. I had been given most of the financial advice made in the book at other times. I can't say I followed all the advice the book gave. What really change my life was the book's bottom line descriptions of poverty stats - that most desperately poor people are women (often widowed women). It is worth reading just for the wake up call. It also contains descriptions of how wealthy people manage their own finances (i.e. buy used, not new etc.).

16) started aggressively decreasing my debt and conservatively investing

This took a little longer for me to get rolling on that I thought it would. Eventually, I started taking a more active hand in lowering my debt and preparing for retirement.

How did I break up on a budget? In short, I ditched the apartment, cut costs and increased income as quickly as possible.

Have I recovered? Emotionally - yes....years ago. Financially - almost. It took me about 6 weeks to recover from the immediate costs of a the break up (moving, the many phone bills etc), in part because I immediately moved to reduce day to day and break up costs. It has taken me a few more years to recover from the debt acquired during the relationship...but that's a story for another time.

Bad money habits a graduate student should quit: Part 1

Graduate school can break your spirit and your wallet. If the insane workload and outlandish and hurtful comments from faculty do not lead to a few tears dropping on the floor, the long term just-above-poverty-line income will. I'm in the middle of a doctoral degree, in the most expensive city in the Western world. After a lot mistakes and a lot of hard work, I've lowered both consumer and student debt while I've been here. As I look back at the last 15 years of my after-high-school life, I see that I developed many bad money habits. This bad behaviour took its greatest toll during my two graduate degrees - a time when I could see my non-graduate friends buying houses, eating out at restaurants and driving new cars, and I was counting the quarters in my change dish to see if I could do a load of laundry.

Below are some of the mistakes I, and many of my graduate colleagues, made. I want to emphasize that I am not a financial advisor and no investment, insurance or mortgage advice is made below. I am a graduate student who has learned and broken bad money habits the hard way.

Paying everything and everyone but your emergency fund/savings account

You should really work on developing this fund before you enter graduate school, but better to put money aside late, than never at all. When I get paid, pay myself first - I mean within seconds of getting paid. No matter what the amount, I put 10% into a savings account that is difficult for me to access (i.e. a savings account at a different bank than my chequings account). This account does not have an ATM card and takes several days to transfer money. Every little bit of cash counts. When you are pi$$ poor, that 10% might seem like a lot.....but budget around it and see how you do. I may be scraping by the next paycheque, but my reserve is growing. When I do have and emergency, I have a buffer to protect me. As a result, I don't have to use my credit cards for unexpected expenses.

Even if a student gets paid $1000 a month, 10% savings is $1200 a year.

Living alone

Just silly. In the cheapest areas of Manhattan the minimal cost of a studio is approximately $1400. You can find a reasonably sized two bedroom in areas like the Upper East Side or Morningside Heights for around $2100. That's a 21% savings in rent.

Roommates can be irritating, true - but there is the limit time in your adult life when living with a roommate is acceptable and a roommate is great way to save money on overhead. If your roommate is in your program or in graduate school in general, you'll have someone with which to brainstorm ideas. If they are in a different industry entirely, you'll get to meet new people who are not transient graduate students.


Recreational shopping

Simply put - this is a dangerous habit. Find something better to do. If you are trying to reform a bad shopping habit, an easy technique you might try is one I adopted. When I got the uncontrollable urge to buy something, anything I would first pick out items and then ask if the total price was worth the anxiety of purchasing it. Always, I realized that it wasn't. Almost always, I still wanted to shop.


If I still needed to buy something, I would buy one, entirely consumable item that cost less than $2. That would be my consumable item for the week. I usually settled on a votive candle by the Yankee Candle Company. In the beginning, reacreational shopping was a tough habit to break for me. I ended up with a little stockpile of about 10 candles and a really smelly apartment. Eventually, it became easier and easier to ignore the urge. Now I never crave shopping. In fact, I find it distracting and a little tedious.

Buy on credit

Big mistake. Credit should be for absolute emergencies only and even then you should think twice. Never, under any circumstances, buy something with a credit card that you can wear or digest. If you can outgrow it, rip it or eliminate it, it is not worth paying interest on nor is it worth an escalating credit card balance.

Buy on credit when you have cash

I've seen people use credit cards this way. When I first had credit cards I did this as well - I would use the card when I had cash in my account. I would do so rationalizing that it was somehow better to have that cash liquid, and to pay my veggie sandwich and beer + 21% interest rate when I next had money to pay it. Sheer idiocy. Some people rationalize that it is really important to have that $15 in their chequings in case of an emergency. You won't have to worry about that, because if you break habit #1 you will have an emergency fund. Go ahead, buy that sandwich and beer with cash. It's worth it.

Carrying over credit card balances

This is simple. Carrying over credit card balances does three things 1) leads to compounding interest 2) makes it more likely that your debt will grow to an amount that will be difficult for you to pay off with your limited graduate student income 3) damages your credit rating. Be smart. If you use your card, pay it down completely on the 1st of the month.

Rationalizing optional expenses with future money

This is a classic tactic of the over-spender. Olympic over-spenders will rationalize unnecessary purchases or even loans with income they think they will make they get out of graduate school. You don't have that income tax refund, tips from waitressing next week, birthday money or even your next paycheque until it has cleared your account. As anyone can tell you who has graduated since 2007 - you have no idea what the job market will be like when you graduate. There are two reasons to never buy something with the expectation that money will eventually arrive 1) people who do this have a tendency to underestimate their actual expenditures and spend more than the awaited amount 2) there is no guarantee that amount will arrive or arrive on time.

Pay full retail price

If you are the perfect doctoral student, you will be finished your degree in 5 years. If you aren't perfect, you'll be out in 8. Paying full retail price on anything, particularly clothing is just a waste. Buy on sale as much as possible. If you really think you can justify paying full price, buy on sale anyway and put the difference in your savings. Remember - graduate school is short term. Dropping $100 on a dress that you can get for $50 two months from now isn't worth it.

Buying books

Four reasons - 1) you live in a small apartment 2) the New York Public Library has every holding you can think of and more (and many e-books to boot) 3) most fields of study rely on articles published in peer reviewed journals - anything else, you can borrow from the library.
4) average soft cover book costs $15-20. Even if you only buy 2 a year, that's enough for a studio Coned bill or a reasonable contribution to your savings. Save book purchases for when you have a sprawling apartment with a dedicated library.

Any aspiration to live a Carrie Bradshaw lifestyle

This is a killer in NYC. Every year 1000s of women in their 20s flood this city with images of Sex in the City-like events, clothes, and shoes....and every year, those girls end up to their necks in credit card debt. This is hardly the fault of Michael Patrick King, HBO or any of the principals at SATC. While a often a fluffy, cupcake of a show the producers did repeatedly introduce Ms. Bradshaw's entirely consumer good driven money problems -including a rather humbling scene where a very well dressed Carrie explains to a mortgage broker that not only does she not have any investments, she only has $700 in her savings because she just paid off her credit cards......of course, the show does revert back to fantasy when not one but two people cut Ms. Bradshaw a 20K cheque to use as a down payment for her apartment - thus bailing her out of perhaps a decade of overspending, and presumably bypassing all normal procedures of ensuring that a co-op resident has a 10% reserve.

Carrie Bradshaw doesn't exist. The women that genuinely live this lifestyle here were either born, married or scraped their way into the top 10% of incomes in this country. Wake up - a pair of Manolos...or even a pair of discounted designer heels from Century 21 is not worth the 21% interest you are going to pay on them. You are a graduate student - smart enough to not be 35 and recounting to a mortgage broker how you have less than $700 to your name.



So...what do we think? Are there other money habits a graduate student should drop?

S&P downgrades US bond, but Adele is going country....so stay calm

I am iterating a constant stream of four lettered words right now. M#$%^# F#$%^r.

Well, at least my vocabulary has grown.

On a related note, it would seem to me that this unequivocably one of the worst things to happen to global finance and especially the little guy in the last 70 years. Millions to billions of people will wake up Monday to mutilated retirement savings and 401ks. People might lose their homes and people will definitely lose their livelihoods. Why the hell do I care that Adele wants to take up country music? CNN, yeeesh...get with it.

I hadn't intended for this blog to focus on global finance. I really just wanted to chat budget and pretty things and how to deal with bad bosses and low cost everything.

I don't think anyone needs to me to remind them of what most people can plainly see. We are still in tough times. I think a lot of us knew that these times were a lot tougher than we were led to believe.

That said, I felt it would be remiss if I didn't post the downgrade here....if not just as a reminder of what happens when someone thinks you can't pay the interest on your debt.

S&P plunges: analysts freak and I look for cheap vacation options

AAaaaaaaaaaaaaaaaaaaahhhhhhhhhhhhhhh......kerplunk.

I don't know why anyone is surprised by the S&P 500 taking a nose dive this week. The entire month of July was filled with insanely and somewhat arbitrary news about U.S. bonds facing a potential downgrade on August 2nd. How anyone can be knee deep in margin calls today is kind of beyond me. Given the ambivalence and verbosity of the rating agencies, the dismal jobs report and the public furor over political cockfighting there is no scenario that I could see a market spike initiated by any debt ceiling agreement being sustained. Someone will be unhappy, spark panic and fill the market with sell orders.

Still, this sort of speculation is what makes the market go around I suppose.

I don't doubt the seriousness of our economic woes. I live in the one city where every person is aware of what the market is doing, even when the bloggers that fill CNN's front page are consumed with human interest stories. There is more than enough information out there saying that the economy is no growth, that the market might still be undergoing a contraction. I'm just saying this isn't a black swan. Yesterday and today were entirely predictable based on the last month.

Still, things are not looking good. While my holdings in the market have dropped, I'm not in any volatile sectors - so I feel okay holding my positions and escaping the global economic woes some other way. Since my approach right now is to make lemonade out of shriveled, discounted lemons I've decided that this is the time to hit the road....go on work vacation or a least a day trip. I managed to dig up some pretty cool vacays on Living Social and Expedia for really great prices. Check 'em out!

Day trip

Museum of Sex after hours with cocktails

Location: Midtown Manhattan
Vendor: LivingSocial

Deets: The science and social nerd in me thinks this is a really hot mini day-trip. The Museum of Sex has a bar at the end of it featuring aphrodisiac-based drinks and food. This day-trip/date-trip includes 2 hours of after hours museum wandering, and a free drink with oysters at the end. I actually think this is a great second date/date well into a relationship trip. If you are just getting to know someone, you'll find out pretty quickly if they have a sense of humour about sex or if their come-on style skeeves you out. If you are deep into a relationship talking about the funny aspects of sex and the sex industry followed by a stiff drink would be a lot of fun.
Cost: right now, $69. This is not a sex joke - it was $49 last week. Prices on Living Social sometimes go up as people buy the packages.


Two Day nearby trip at fancy locale

Location: Nantucket
Vendor: LivingSocial

Deets: 2 night weekday stay includes beach chair rentals, a room at the Center Street Inn, continental breakfast and a bottle of wine. The beach, shops and ferries are reportedly within easy walking distance of Inn. Sounds like a nice little break from the insanity of New York and the weekday stay means it is likely a break from the insanity of Summer weekend Nantucket.
Cost: For two people it is $205 for a room with a shared bathroom and $295 for a room with a private bath. You would have to find a way out to Cape Cod and then Nantucket - so a bus or car rental would likely have to be slapped on there too.
Almost a weeklong trip on a beach in another country

Location: Puerto Vallarta, Mexico
Vendor: Expedia
Deets: 5 days and 4 nights at the Presidente Intercontental Puerto Vallarta. I've actually stayed at this hotel and really liked it. It far enough away from Old City Puerto Vallarta that you aren't constantly pestered by vendors walking along the beaches, but is close enough to the city that a 5 minute bus ride gets you to the River Calle. The rooms are huge and very pretty. The oceanside rooms have balconies and expansive views. You can rent various kayaks and paddle boats at the hotel and take them out to Los Arcos to watch fish etc.. All in all, it's a great little spot. Puerto Vallarta was the personal love nest of Richard Burton and Elizabeth Taylor while he filmed "Night of the Iguana", it is a fun and yet deeply romantic city. I loved every minute I was there.

Cost: a bit more expensive, and sadly out of my price range. It is $683 per person for Sept 26-30th - flight and hotel included. Great deal, but not for me....sigh.


So...I think H and I are going to start with the Museum of Sex. Who knows, maybe 9 months from now I'll blogging about deals on diaper services.

The Presidente Intercontinental, Puerto Vallarta, Mexico

(the second to last hotel on the right before the penninsula)
(Photo credit: http://www.grandluxuryvacations.com)

Major Debt milestone

My student line of credit, acquired and used since the early 00s, is back down to its 2000 level today. I have successfully put 22K towards the debt acquired during my early student years since August 2008. I'm a third of the way out of student debt, and I'm still in school. At some point I'll sit down here and explain how I've been reducing my debt.

Since the National Debt Bill Vote is making me nauseous with anxiety AND NYC is under a severe-weather/tornado warning tonight, I've decided to deal with that circus by watching Mad Men on Netflix.

This is the exact opposite attitude I take towards my own finances and politics in general. I have rationalized this night of a$$-sitting and Don Draper-watching with my own debt-reduction success.

There will plenty of pre-market freak out to watch on tv while at the gym this weekend.

Americans finally care about the national debt

...or so it would seem. While I'm sitting here pondering what the remainder of my adult life might look like should it be spent in an economic depression and a little pi$$ed that we are facing a second severe economic crisis in three years, I'm choosing to see the Capitol Hill server crash as good news. Good. Give a s#$%. This matters.

Now what the hell are we going to do about it?

Under $10 indulgence #1 - Mighty Leaf Tea

Little gifts to me are a big part of how I brought my spending under control. When I first moved to New York, I was dropping plastic cards down on high end designer shoes and purses. I ate out every night and drank expensive drinks..and cheap drinks...well...I mean, I drank like a graduate student. I drank a lot. Every little bit of it went on a credit card.

My income, however, had dropped to lower than a 1/3 of what it had been the year before when I was viably employed. When you earn less than $15K a year, Chanel shoes and regular drinks and dinner at Pravda should be well out of your reach. They, of course, were well out of my reach. I spend this way because I felt inadequate. Around then of my second year in New York I realized what a mess I had had made and decided to get myself out of it.

I had about $20K in credit card debt, a failing marriage and a bit of no-starter degree. The very first thing I did was set about earning some extra cash. I took a term off of my degree to earn some extra cash and managed to clear 1/2 the debt. I divorced my husband - a man who made me unhappy and who had very, very unhealthy spending habits. When I returned to school 5 months later, I started a savings account and developed a plan to clear the rest of the debt on my lower graduate income. I took up extra teaching positions, a college assistant position and I worked out a debt repayment record and plan for myself. The divorce, the debt repayment all made me feel better about myself. So as to not feel deprived, I changed the meanings of the words "splurge" and "deserve". A "splurge" became an item I could afford within my actually income, but the cost of which would not help me noticeably reduce my debt. "Deserve" came to mean items that would not interfere with my debt reduction or savings.

I worked out that I could afford a $10 item every month or so that would be just for me and would make me feel special. At times this item has been an extra $10 so I could get a fancy shampoo. Other times, it has been a movie I really wanted to see. Most of the time I bank it to buy higher priced items like clothing. This month, it is Mighty Leaf Tea.

I love tea. My firm belief that a warm drink = warm thoughts has recently be substantiated by a study published in Science . Mighty Leaf Tea Company is a Californian company that produces whole leaf teas wrapped in silken tea bags. Now, I'm not sure if "silken" means "silk", but the company assures the buyer that the pouches are biodegradable. Sadly, the cellophane packges that the bags are placed in do not degrade. A supercool feature of the company's site is character, origin and health benefit information for each tea as well as customer ratings and comments. Honestly, I find the customer ratings more helpful than the company's own description of the tea flavour.

My personal fave Mighty Leaf tea is Orange Dulce, which sells in NYC for about $7.50 for 15 bags (currently $6.96 online). It is a blend of black and green tea leaves with jasmine flowers, vanilla and orange flavours. It is smooth tasting - like chamomile, with hints of wood and citrus. The company claims it tastes a bit like port. I drink port on an almost weekly basis and I don't taste port-like flavours in this tea at all. Still, it is an amazing cuppa.