A little shaken.

Someone was killed in the apartment next to mine this afternoon. The police entered to serve a drug warrant. A man in the apartment pulled a gun. He was shot and died on the scene. The landlord let the police into my apartment and the other neighboring apartments to make sure no one had been injured by stray bullets. No one else was home at the time. Most days, I'm home cooking lunch at the time that this took place, but today I was busy and just had a granola bar and a handful of cereal in the lab. Tonight I'm at my parents' house.

The couple in that apartment had some very loud fights. The guy threatened to hit, and on one occasion to strangle, the girl. I considered calling the cops, but I didn't. It never seemed to go beyond yelling. My landlord said the guy whose apartment it was wasn't the person who was killed. I think I'm going to have to ask my landlord if my neighbor will be leaving; if he isn't, I will. I don't think I want to live next to someone involved in drugs and violence if I have alternatives like living at home and commuting.

It seemed like a safe place. It's a cozy apartment a couple of blocks from campus in a fairly safe small city.

How much insurance do I need?

A post in the archives of The Simple Dollar got me thinking about insurance. When I rank my list of financial priorities, health insurance falls somewhere below food, but possibly at the same level as shelter. Fortunately, my father's group plan from work covers full-time students until age 23. Auto insurance is also paid for by my folks, so I don't have to pay for liability and uninsured motorist coverage. It's pretty clear that buying comprehensive and collision on a 1999 Taurus with over 100,000 miles doesn't make sense.

That much is simple; however, there are other decisions that take a little more thought. Do I need to get renter's insurance? If someone robbed my apartment, they'd get a computer, a microwave, possibly an iPod if it wasn't in my backpack with me, and a bunch of old jeans and free t-shirts. The computer was pricey when I bought it, since I wanted to buy the nicest system I could with the scholarship funds available for that purpose. That was over three years ago, and replacing it with an equivalent computer would cost a lot less today. I'd probably be satisfied with an even more basic computer if I had to replace it tomorrow; I'm typing this on my parents' computer, which is a low end emachines that they bought when I was in junior high. In other words, I can afford to self-insure against theft.

Still, there's this nagging thought that maybe getting renter's insurance would be the prudent thing to do. Do I need liability coverage? When I first started apartment hunting, I went by the insurance agency where my mom works to get a quote, but they couldn't give one until I had the address of the apartment. I fully intended to get the insurance, and inertia is my biggest reason for not doing so. USAA keeps advertising coverage for as little as $5 a month. (I spent that last night on pizza.) It wouldn't hurt anything to call around and get quotes.

Then there's the issue of life insurance. Conventional wisdom holds that a 21 year old with no spouse, dependents, or financial obligations doesn't need it. I'm inclined to agree, but my mother says I should look into what the premiums on whole life would be. (Just for the record, she's licensed as an insurance agent, but doesn't sell it. Her responsibilities at the agency she works at are solely administrative stuff.) She's suggested it as a way to lock in premiums for life, a way to ensure I'll have coverage regardless of my health in the future, and as an investment. It came up once in conversation, she hasn't mentioned it again, and I'll probably just blow it off.

I wish I were shopping right now.

I don't really need to buy anything, but I'm still disappointed that I had to skip a shopping trip with friends to study tonight instead. It's undoubtedly best to avoid the temptation, but it would have been fun to go to Target and hang out with them.

Windfall!

I happened to win the drawing on Wise Bread's commenting contest this week. Now I need to figure out what to do with a $25 Amazon credit. Should I save it for buying Christmas gifts or go ahead and spend it on some math books I've been wanting? It's nice to have this kind of money problem for a change.

Frazzled but happy

It's already been a long week. After reviewing my grant proposal with my adviser this morning, I printed the final revisions and trudged across campus in the rain to deliver all 18million pages (originals plus copies in triplicate) to the appropriate office. When I got there, I had to wait in line to meet with someone to have my work looked over. He discovered that on a form that required the signatures of my adviser and the department chair in two places, they'd only signed once, and I hadn't caught it. I raced back to the Physics Building, where I caught the vice-chair in the lobby as he was leaving for lunch. I then spent 45 minutes waiting outside the classroom where my adviser was teaching, and then rushed back to deliver the forms. They seem ok now, and my university will submit them to the state by November 1. Once they reviewed them again, I was seriously late for my 1:30 class, and I made the (perhaps unwise, but sanity saving) decision to just skip it.

I then went to Human Resources to prove that I can legally work in the U.S. and then to the treasurer's office to pick up my paycheck from the work I did last month. It's much larger than I expected, but I'm not complaining. Does anyone know of a good option for opening a Roth IRA with $91.36, or should I try to pick up a couple more hours to bring the total above $100 so I can start one at a local bank?

Since I was already skipping class, I hung out in the honors lounge with a friend, drinking hot chocolate, reading The Economist, and complaining about the grant writing process. I don't think my lab kids are going to get me anywhere near my best today so I hope my co-TA is well prepared and peppy.

The world's least exciting weekend

I have a grant proposal due Monday by 4:30p.m. If this is bad, writing a thesis must be terrible. I'm going to go eat lunch and hope my adviser emails me with comments on my project description. If I win the grant, I'm sure I'll be delighted to get an extra $1250 to pay myself for my work, but right now it's surprisingly difficult to care.

Success

J.D. at Get Rich Slowly has asked people to post about their greatest financial success. There will probably be scores of truly inspiring stories about people who overcame great obstacles to work their way out of poverty, get out of debt, and create better lives for themselves and their loved ones. This isn't going to be one of those stories. I've had a pretty easy life when you get right down to it, and my accomplishments are pretty mundane.

I'm a twenty-one year old student with a positive net worth, and my parents aren't paying for my education. They would have helped pay for tuition if I'd needed help, but they seem pretty happy that they don't have to. I take a certain pride in knowing I earned the scholarships that are financing these four years.

Yes, I was very lucky. I grew up in a home in which education was the number one priority. I also live in a state with a serious brain drain problem so high schoolers with top scores and grades are considered a valuable resource worth spending tax dollars to keep.

However, I'd like to believe that planning and work played a role as well. I started thinking about college admissions as a tenth grader. I spent hours searching for scholarships, studying for the standardized tests, and honing my essays. Ultimately, I had to make some tough choices. My top pick, a prestigious but pricey liberal arts college, offered me the largest amount of merit aid they give, work study, and loans, but it remained financially out of reach. It just wasn't worth taking on tens of thousands of dollars of private loans when I knew I wanted to go on to graduate school as well. Instead, I accepted a full ride to the honors college within my state university.

As a result, I now have more flexibility in planning life after graduation. It's much easier to consider taking a low-paying but fulfilling job when you don't have debt repayment hanging over your head. In addition, not having to pay for college has allowed me to diligently sock my earnings away. It isn't a fortune by any means, but it's a nice little nest egg that might someday become a college fund for my own children.

Never pay full price for maxi pads again!

Sending away for free samples can really help you stretch your budget. I know it's dorky, but I also really like getting things in the mail. The samples are generally small so that alone won't make much of an impact on your spending, but since they often send coupons along with the samples, you can cut your costs on things you'd buy anyway by checking whether the manufacturer's website offers samples or printable coupons.

In the past month, I've gotten free samples of feminine hygiene products in the mail twice, once by going to the manufacturer's website and once from the free sample section at Wal-Mart's website (just type "free samples" into the search box on their main page). Now I have two $1 off coupons for my preferred brand that are good until June of next year so I can wait for a sale and then stock up. I take a similar approach to toothpaste, deodorant, soap, and other non-perishables.

I'm out of money. Now what?

Yep, the spending last week got a little crazy. Overspending on groceries combined with the unwise decision to take a friend out to dinner mean I've overshot my budget by a lot. If I want to be certain of covering rent and electricity without spending more than 1/5 of this semester's housing funds, I essentially need to refrain from spending any money on anything else until after Halloween. [curses under breath]

Things aren't really as dire as all that. As my brother pointed out last night, I've got additional stipend money I was planning on saving and thus didn't include in the budget. In addition, as soon as I go home to get my social security card I can pick up my (small) paycheck for my side job for my adviser from last month. However, the budget should have been entirely manageable, as I demonstrated last month.

I was stupid. I messed up. I should live with the consequences. I think I've got enough food that I can keep grocery spending to a bare minimum for two weeks while I eat down my pantry and freezer. It doesn't sound like fun at all. Please remind me why I'm doing this.

Jimmy Carter was right.

You should put on a sweater if you're cold. You can lower your utility bills and reduce your carbon footprint. What could be better than that?

Thrifty behavior and environmentally friendly behavior are frequently one and the same. Compact fluorescent bulbs save money over their lifetimes even though they require a slightly larger initial outlay. Better home insulation lowers heating and cooling bills. Water heater blankets and shorter showers will reduce your bills as well. Beans and rice are far cheaper than meat. Thrift store and yard sale shopping mean you sometimes can get an entire outfit for a couple of bucks, and nothing new had to be manufactured to satisfy your desires. The list could go on and on. Please, consider whether a few small changes could help both your pocketbook and your planet.

Getting the basics right is half the battle.

I was a little amused by an article in the New York Times last month on why it is important to save money. It boggles my mind that rational adults would need to be reminded of that. Unfortunately those who most need to learn that lesson are probably the least likely to peruse the business section.

Today the editorial section of my local paper reprinted a piece from the Washington Post. It's an eloquent defense of the virtue of saving. I'm tempted to write these words on a scrap of paper to keep in my wallet for weak moments, "But it's worth remembering, as did generations of Americans struggling up from poverty and privation, that thrift is still the essential virtue that makes the American dream possible."

Useful information about the real world

I'm hoping to do Teach for America, and if that doesn't work out, I will get a master's in teaching and teach for a few years before graduate school in the sciences. First year teachers with bachelor's degrees in my area can earn $40,000 at some school districts and significantly less at others. Teachers with master's degrees are paid more. So I'm guessing that if I teach around here, I'd make at least $35,000. I've been wondering what sort of lifestyle that would entail.

This quarter's issue of U25, USAA's free magazine for young adult members, helped answer that question. A short article called "Paycheck Reality Check" states that after federal taxes, FICA, and Medicare, the net pay for someone with a salary of $35,000 would be around $28,356. After deductions for health insurance, take home pay is generally closer to $2,113 a month. I'm not sure how the pension program would affect this amount or what state income tax rates are, but this information gives me a starting point for further investigation.

I'm starting to actively dislike my budget.

My budget simply isn't working. I left out too many important categories, some by choice, others without thinking. I concluded that I own too much clothing already and left that out of the spending plan, but the sneakers I've been wearing for the past three years have developed holes. Forgetting entertainment entirely wasn't the best move either. Randy and the Mob sounds quite funny so I wish I'd planned for the cost of an occasional movie ticket.

Should I revisit my plan? It would be nearly impossible to cut back in other areas to fund such spending since there isn't much wiggle room as it is so the overall result would be additional expense. If I really want to, I can forge ahead with the budget I've already made. It covers the true necessities. It'd feel like a little bit of a failure to cave in and spend more. Self-discipline is something to cultivate. At the same time, all of this scrimping with no bigger goal in mind feels pointless. Isn't part of the point of diligently saving that you can occasionally enjoy your money? Less than a week ago, I was able to write a check for $10,000 for a cd, but my budget makes me feel broke.

Grocery shopping with my kid brother

I love my brother. He's almost twenty, and he's slowly turning into a really neat person. For a while during our teenage years, I doubted whether we'd ever get along, but these days we quite enjoy one another's company. We still have big, loud, frightening fights sometimes, but we also have long, joyful, rambling conversations. After a long, trying day there's something very soothing about macaroni and cheese and silly sitcoms with the one other person on the planet who'll ever fully understand all of the weird family stuff.

As much as I love my brother, I probably shouldn't grocery shop with him. We're diametrically opposed when it comes to money. He firmly espouses the view that you should go ahead and spend on things that will increase your short-term happiness. He isn't totally profligate and does have some savings, but my brother doesn't seem to have a problem with embracing his acquisitiveness. He tries to get me to lighten up about both money and life, and I'm afraid he's making some progress on the money front. When I shopped with him, I spent about ten dollars more than usual and got a bit less food. It was very nearly worth it.

Impulsive money moves

Yeah, wild and crazy girl that I am, I changed my plan for what to do with the money I transferred out of my savings account. After getting rate sheets from a slew of banks, it became apparent that I could do as well locally as I could with ING. I ultimately and, I admit, somewhat rashly decided to put the entire sum into a seven month cd instead of creating a ladder. This way all of my assets will be liquid again just before I graduate. Since I am somewhat uncertain where life will take me after that, it seemed not unreasonable to want to be able to access all of my money. I may end up kicking myself in May if I don't need to spend the money and rates plummet, but it seemed like a less than terrible decision this morning. Or at least, like a better long term decision than blowing all of the money on a used Miata. Darn responsibility.

Shuffling my savings around

HSBC responded to the Fed rate cut by cutting the rate they offer on online savings to 4.50% apy. The mortgage crisis has the potential to get much, much worse, and it could be a long fall indeed if consumer confidence plummets in response. At this point, I'm guessing at least one more rate cut will be forthcoming in an effort to stave off recession. I don't know enough to determine whether that will have the desired macroeconomic effects.

I do know that it has a less than desirable effect on my finances. High interest rates are pretty nice when you have no debt and keep essentially all of your money in savings accounts. To avoid the fun and excitement of watching interest rates drop still lower in the coming months, I've decided to move approximately two thirds of my savings into certificates of deposit. At this point, I think I'll split the money equally among 6, 9, and 12 month cd's to build an instant ladder. That will leave just over $5000 in my savings account separate from the money I anticipate needing for living expenses. That seems like plenty of liquid cushion for now.

September spending

I've used Pearbudget to calculate the final spending numbers for September, and I think I like it a lot so far. Before I state the numbers, I should include a disclaimer: I'm not totally self-supporting. My parents pay for car insurance and gasoline, have me on their health insurance plan, and feed me whenever I'm home, which seems to be quite a lot the past couple of weeks. In addition, my mother keeps trying to buy food for me, and occasionally I cave and accept a hunk of cheddar and some mini pizzas rather than fighting with her when she shows up at my front door with a bag of groceries.

Spending
$410 rent
$83.61 utilities (includes landline phone, electricity, water, sewer, trash service)
$59.05 groceries
$8.36 dining out
$23.51 personal (hygiene and grooming items, high this month due to coupons and sales which made it advantageous to stock up on some items)
$6.43 household (laundry detergent and windshield washer fluid this month)
$5 miscellaneous (club dues)
Total Spent $595.51

Income
$626.80 scholarship (1/5 of semester housing funds)
$90 tutoring
$5 American Consumer Opinion
$0.12 the one and only time a reimbursement for school expenses I've submitted has ever resulted in a check for more than I paid rather than less
$0.01 found on ground
Total Income $721.93

In making these calculations, I ignored the school expenses and subsequent reimbursement, except for the extra twelve cents they gave me. I didn't count the wages for the work I did for my adviser since I haven't been paid yet. I also didn't include the interest earned on my savings since I've decided I'll count that as income whenever I receive a bank statement and I did not receive one for September.

Ok, I think I can quit pondering whether it's ok to buy a pack of gum when I go grocery shopping.