Setting goals for 2008

I've been working on my goals for the first half of 2008. In the next couple of months, I should know a lot more about what the second half will hold, but right now I can't do much planning beyond graduation on May 10. Naturally, I have lots of goals related to getting applications completed, getting data for my thesis, writing said thesis, taking the PRAXIS, and so forth. These are all pretty much mandatory activities, so they hardly qualify as resolutions. You'll probably hear more about those in the next few weeks and months, well, unless I bore you so badly with minutia from my mundane life that you quit reading. At New Years, the idea is to focus on goals you might otherwise not feel quite so compelled to fulfill.

My financial goal is to have $17,500 set aside in savings separate from my account for normal living expenses when I graduate. I revised this upward from $17,000 since I got the research grant. This should be easily achieved by funneling my stipend money and a fraction of my pay from the grant into online savings as soon as I get the money so I won't let it slip through my fingers for day-to-day expenses. I might move a bit more into certificates of deposit or bonds to chase better rates, but I want to have a sizable chunk of money totally liquid in May in case I have to spend money moving across the country and setting up a household in a new place.

In a cost-free non-financial goal, I resolve to get more exercise. I'm not trying to lose weight since at 5' 6" and somewhere between 130 and 135 pounds on any given day, I'm reasonably happy with my body. I'm not in fabulous shape, but I don't want to run marathons or anything like that. Long walks or bike rides are two of the best stress relieving techniques I know, but when I get busy and anxious, I tend to convince myself that I don't have time. That needs to change if I'm going to get through the semester with any shred of sanity intact.

In a slightly more spendy non-financial goal, I resolve to improve my emergency preparedness. I go through phases when I fret about that sort of thing, but I've never taken a thorough, systematic approach. The approaching tornado season should be a much stronger motivating factor than having watched I Am Legend, but I figure being prepared is a good thing even if my reasons are silly. Step one is determining what I need to do to be ready for the natural disasters my area experiences. I've completed first responder training, but I've let my cpr certification lapse and haven't done much reviewing lately. I have an amateur radio license I earned a few years ago and a cast-off radio a teacher gave me when he bought a new one, but I've never tried to make contact and don't keep the radio's battery charged. I need to read back through my books to make sure I'm up on the pertinent regulations and then get comfortable using the thing. I keep a few liters of water and some non-perishable food on hand at my apartment, but I need to take inventory and figure out what else I ought to buy. In addition to supplies, it would probably be wise to keep more cash on hand, in the hopes that in a short lived, minor emergency paper money will retain value.

Is it odd that two of my three main goals are motivated by uncertainty about the future? At what point to you just accept that you can't be prepared for every possible event and just do what you can and then quit worrying about it? Any suggestions for what I should do differently? What are your goals for 2008?

Will Your Money or Your Life change my life?

Your Money or Your Life is frequently touted as a life-changing book. Trent at The Simple Dollar frequently raves about the impact it had on his mindset and relationship with money. Since I was at the library and in the mood for some relaxing fluff, I thought I'd give it a try. I was somewhat skeptical; there are a lot of personal finance books that promise bold new solutions but actually just repackage the same stale ideas for the eighteenth time.

Overall, I was pleasantly surprised. It wasn't revelatory, but that's probably because I went through a phase during my early teens when I read a lot of Mother Earth News and daydreamed about saving up a bit of money, building a cabin, and dropping out of the workforce to farm and write. Since then, I've realized that I kill plants far too readily to ever farm successfully and that that dream was probably based in part on social anxiety and the desire to avoid having to interact with others in daily life. Nonetheless, the idea of working for a finite period of time as means to an end wasn't new to me. Neither was what I see as their key point, that having more stuff doesn't lead to more happiness and living beneath your means can be satisfying.

Mr. Dominguez and Ms. Robin are certain that if we follow their nine steps, we'll all step off the hedonic treadmill, put enough money into government bonds to live on the interest, and then devote our time to working for world peace, organic farming, caring for the elderly, or other such noble endeavors. It's a refreshingly different take on personal finance, which is often described as means of getting more money without any pause to consider why we want the money in the first place. Your Money or Your Life is, at its core, about leading an examined, purposeful, and fulfilling life. The accumulation of money is treated as a means to an end. The authors contend that, although the Industrial Revolution improved lives by raising standard of living, the materialism and careerism that accompanied it are slowly poisoning our culture and our planet. How many personal finance books sport a blurb from Ralph Nader on the cover?

I didn't find the hippie propensities of the authors off putting or too preachy, but some might. I felt that they repeated that "you must complete all nine steps" about one time too many. The anecdotes about folks who followed their program with great success were sometimes a little too pat. I don't fully buy into their dismissal of inflation, especially when it comes to health care costs, or their insistence on investing solely in bonds.

Making a wall chart and calculating the crossover point when my investment income will exceed my living expenses might be an interesting exercise, but I'm a bit less enthused about their suggestion that I include time spent on decompression, escape entertainment, and vacations when calculating my real hourly wage. I'm fairly certain I won't follow their nine steps to financial independence.

If you are looking for a guide to investing, this book isn't for you. If, like me, you're trying to sort out your goals and values in life, Your Money or Your Life raises some valuable questions. It was a good read for an introspective sort of day.

Overwhelmed

I know that I should be diligently working on something, whether it's research, my TFA application, or just cleaning my room, but I'm doing none of those things. Instead, I'm sitting in the lab getting nothing accomplished. The tasks I have to accomplish in the next few days, weeks, and months seem tremendously daunting, and I'm stressed out.

My grandfather is doing much better. Eight years ago he recovered from a bad bought of pneumonia, but he's had to be on oxygen ever since. He's been getting gradually weaker, bouncing back surprisingly well from each illness and surgery, all things considered, but always ending up in somewhat worse shape. We've reached the point when the purpose of medical care is to make his life more comfortable rather than to try to prolong it, and that bothers me. He didn't have to go to the hospital since antibiotics have proven yet again to be a wonder drug for treating bacterial infections, and he's breathing much more easily and seems more comfortable. It looks like he's recovering; on Christmas, we weren't sure that would happen this time. I don't think my grandmother will take it well when he does pass away, and the whole thing is likely to be very hard on my mom as well. I'm worried.

Right now, I'm also supposed to have a plan for my life. As if today, I need to take E&M, physics senior seminar, write and defend a thesis, and I'm done with my degree. (I've signed up for other classes as well, but only because I never resist the temptation to sign up for more science and math classes. I already have more than enough hours to graduate.) After long talks with my adviser, I have a plan, at least in theory. I'm going to go teach for a couple of years, and then if I still want to go to graduate school, I'll apply. By spending some time living like a monk in the world and doing pretty much nothing besides teaching and studying, I might be a little stronger and better prepared when I get to graduate school.

This all sounds good, so why am I freaking out? Writing application essays is forcing me to articulate why I want to teach, and I'm having a hard time with that. Good secondary science and math instruction is important, I like teaching, and I think I could eventually become a good teacher. Teaching a lab was one of the most difficult things I've done in my life, but it was also one of the most rewarding. Still, I'm not certain I have what it takes, and right now my primary goal is to convince others that I can do this even though I have doubts myself.

I definitely don't have adulthood figured out yet.

There's nothing I can do until morning.

There's nothing I can do until morning, and there's nothing I can do then that wouldn't be handled much more competently by someone else. It would be best to go sleep and then arise ready to face the challenges of the day, but instead I sit here worrying. My grandfather is ill.

Yesterday when my grandmother and I went to visit him, he was coughing. My grandmother spoke with the nurses about it, and they assured her that they'd keep an eye on him. Today the cough was worse, a wet gurgling sort of cough that strikes fear in my heart. My grandmother, a former nurse, brought her stethoscope and concluded that his lungs don't sound good. He didn't have a fever, however, and the nursing home staff said that he has an upper respiratory infection. They called a doctor who prescribed antibiotics, but they then discovered that they didn't have the prescribed dosage. Since it was Christmas, the pharmacy was closed. They told us they'd put in a call to find out whether they could give him one higher dose tonight or split a pill.

Tomorrow they'll decide whether he goes to see a doctor. I'm fairly certain we'll request he see one unless he's doing dramatically better in the morning. Then, there's a wait to see whether the nursing home doctor approves the request by phone. If he does, then they transport my frail 88 year old grandfather to the emergency room. It isn't possible to see a doctor at a nursing home if you're sick. The doctor sees each patient once every sixty days, and that's it. It seems like an utterly stupid system, and what exactly happens to patients who don't have family around to watch out for them? What happens if my grandfather isn't well but they refuse to let him see a doctor? Medicaid is still new to us so I don't know how everything works.

My parents will be the ones who handle all of this. My father is off until New Year's. So Dad gets to head into town in the morning to check on my grandfather and sort out what should be done and how. Even though I'm sure my parents can manage without me, I still want to go in in the morning and visit my grandfather. If there are things to be done, I can miss a day of working in the lab. Everyone else is away visiting family for Christmas, and I'd hoped to spend a few days getting data uninterrupted in a quiet lab and working on my Teach for America application. Right now, that can all wait.

Merry Christmas!

Merry Christmas, and warmest wishes to everyone, whatever your faith. I hope that your days are filled with the pleasures of good company, good food, and cherished traditions.

A baffling governmental decision.

Michelle Singletary recently wrote about the Treasury Department's decision to lower the amount of money an individual may invest in U.S. Savings Bonds in a year. So far, Treasury Direct doesn't make mention of this change, and I have no clue why the government would do such a thing. Do they really want the U.S. to go deeper into debt to the Chinese instead of our own citizens? You'd think that the government would want to encourage savings.

Perhaps it has something to do with fears of a contraction of the money supply in the wake of the credit crunch. That's the only explanation that comes to my mind, anyway. The official news release states that the purpose is "to refocus the savings bond program on its original purpose of making these nonmarketable Treasury securities available to individuals with relatively small sums to invest." Savings Bonds have always been very accessible to people with small amounts of money. You can buy an EE Bond for $25, and a paper I Bond for $50 or an electronic I Bond for $25. I don't see what allowing people with more money to invest more harms.

I suppose this will have little impact on the lives of 99% of the U.S. population. I Bonds seem like a reasonable choice for risk avoidance over the long term, but most people wouldn't buy $30,000 or 60,000 worth in a calendar year. Personally, I have just one $50 I Bond that I bought during my freshman year of college.

I plan to put a bit more into I Bonds when I turn 24. Thanks to the Education Tax Exclusion, they aren't a bad way to put a bit of money aside for college. Since I don't have any student loan debt of my own, I should be able to start saving a little for the education of potential children without negatively impacting retirement savings. I don't want to set up a 529 plan because I don't have kids yet, and I'm not sure I will. (I like children very much, but having them would probably require being in a serious relationship again at some point. I'm not so optimistic about that right now.) If I don't have kids or have kids who don't go to college, money in savings bonds can be put to some other purpose with no penalties. A few thousand dollars in inflation protected bonds would also serve as a great emergency fund once you've held the bonds for five years.

Sick.

I had lots of plans for today. I wanted to give blood, but I woke up with a sore throat and a cough. It feels like it is extremely hot in the lab, but the thermometer says otherwise. The graduate student is gone for the day so I could take off my sweater and continue working in my undershirt, but that might seem weird if anyone walked in. Lying down sounds extremely good right now anyway so I think I'll call it a day and accept that there will be more tedious, mindless grunt work to do tomorrow.

I've worked while sicker. I spent about a week coughing for hours on end last summer while everyone else in the lab kept asking if I was ok. In retrospect, it would have made sense to go to the doctor sooner rather than hoping it'd go away on its own. One of the major advantages of being a student is being able to go to the health center with no marginal cost since we've already paid the fees. Thanks to a kindly nurse practitioner and $20 worth of medication I soon felt better. I was grateful for this small scale socialized medical system.

It doesn't always work well. Appointments during the height of flu season can be hard to come by, and mental health care focuses on drug therapy since there aren't enough doctors and psych grad students to keep up with the demand for counseling. For most routine issues, the system does work well. I need to go ahead and schedule my annual check-up for early January.

It was a good day in lab.

Nothing leaked or exploded.

Material rewards

My brother informed me that if he made a B in Honors Calculus III he was going to buy Super Mario Galaxy for his Wii. He made the B, but then he made B's in two other classes as well. He's not sure whether he's going to get the game since he no longer feels he deserves a reward.

I've toyed with the idea of buying myself something moderately priced and coveted as a reward for a semester well-spent. There were a few very painful months, and I did my best to take my advisor's suggestion of throwing myself into school to soothe heartache. It didn't really help, but it was still good advice. I worked hard even when I felt lousy, and that will do me good in the long run. In the short run, it'd be nice to have some more tangible payoff.

Thanks to the research grant, I've got a sizable amount of money coming in in a month. I'm tempted to set aside some amount, say 1% of the extra pay from the grant, to blow on silly, impractical, meaningless, fun stuff. Some of the rest will go to provide a bit of extra wiggle room in my monthly budget since I probably won't be tutoring next semester, and there'd still be a sizable chunk left for savings. There really isn't a pressing financial reason not to blow a bit of money.

On the other hand, it feels decadent. Isn't hard work supposed to be its own reward? Shouldn't I take more satisfaction in my accomplishments than in having stuff? It sets a bad precedent to allow myself to use the, "You work hard and deserve nice things," line of reasoning.

Christmas shopping complete and under budget

After much hunting and debating, I finally settled on a gift for my brother. He's been complaining about the cheap kitchen knives he has, although I'm not sure why since he rarely cooks. He may not like the nifty new set I picked up at the warehouse club today, but he generally complains about the gifts I give him so I'm not going to worry too much about it. My dad will be getting the second season of The Rockford Files on dvd. By this point he's watched the reruns on tv enough that he pretty much has many of the episodes memorized, which drives my mother slightly crazy, but I have no problem with feeding his obsessive devotion. I got some wonderful, oh so soft, cozy, pima cotton flannel pajamas for my mother; I'm pretty sure she'd never have been willing to pay what I did for them, but if I can conceal their cost, she'll probably enjoy them. I've already set aside a few small things from the after Christmas sales last year to give to my friends so the grand total for gift spending this Christmas came in slightly under my $100 budget.

Your tax dollars at work...

When I arrived home last night, I discovered that I'd received a letter from the state's Department of Higher Education. They've decided to fund my grant proposal. It'll mean $625 from the state and $625 from my university with which to pay myself for my work next semester, $1,000 for supplies, and $250 towards travel to a conference. I suppose that I really ought to be thrilled, but I'm feeling a bit ambivalent.

I've been the recipient of taxpayer's largess time and again. My family has never been on any form of welfare, but I may have gotten more money from the government these past few years than some people who are. In addition to whatever the state provides to my public university, they've given me $40,000 for school. My state decided to solve its brain drain problem by offering huge scholarships to students with top test scores, and for the past three years that scholarship covered most of my college costs. This year I've deferred it and am spending money from a different fellowship so I can use the state scholarship to pay most of my tuition for a masters in teaching if I decide to go that route.

If you're wondering what your federal income tax pays for, it may well have gone toward paying me to shoot proteins with a laser last summer. (Ok, so the research is a wee bit more complicated than that, but I doubt any of you want to read the details.) It's great that our country continues to fund basic research, but I feel weird about being the person getting funds.

I like my work, but I don't think it's going to change the world. At best, I'm hoping I might get to be co-author on a paper if we ever get to the point where we have anything publishable. To be perfectly candid, the money for supplies is fantastic, but I've got to get to work and try to get enough data to write a solid honors thesis and would be doing the research whether I get paid or not. It doesn't seem like my research is meaningful enough to get funding. Maybe it's a case of the Impostor Syndrome?

Envy.

If you read personal finance blogs on a regular basis, you'll discover that there are a lot of people in the U.S. who're struggling to get out of debt. A few of these people found themselves in dire straits due to circumstances beyond their control, but it seems that many more simply lived beyond their means for a few years. Bloggers post about their travails and successes as they strive to pay off enormous consumer debts, and there's generally a good deal of celebration and congratulations when someone accomplishes his or her goals.

That's great, and I'm glad the internet has enabled folks to find a supportive and informative community of like minded people. These victories should be applauded. At the same time, I'm a little envious.

It isn't that I envy people the stresses, sacrifices, and hard work it takes to dig out from a mountain of debt, nor do I envy them the goods they bought in spending binges before they saw the light and started spending less than they earn. As crazy as it may sound, I'm a bit jealous of the sense of irresponsibility that enabled them to get into these messes in the first place. I envy their ability to be young and stupid and spend a portion of their lives following their whims without fretting much about the consequences.

By nature, I'm a worrier. I panic and over prepare for a lot of things in my life. I started planning for college admissions and scholarship applications as a tenth grader. I study too much for even the easy classes. I wonder whether, five or ten years from now, I ought to offer to buy long term care insurance for my parents. I save diligently, clip coupons, and try not to be seduced by the culture of consumerism. This mode of living pays off in many ways, but, frankly, it isn't much fun.

Thoughts about what life will be like when I finish my undergraduate degree and find a real job have been flitting through my head a lot lately. I thought about how fun and exciting it would be to be able to budget $100 a month for purely discretionary spending, for movie tickets, new clothes, books, music, and dinners out. Then it occurred to me, if I'd really wanted to do that, I could have done so this semester and still spent less than I brought in. There's a whole $1000 a semester that makes its way into savings before I have a chance to do anything else with it. It's the prudent thing to do, and I'm a prudent person.

It would be nice, just for a while, to be someone else. To be a little more impulsive and a little less goal oriented. To choose short term happiness over a long term goal without guilt. To live without worrying all the time. To be able to make a decision without trying to weigh the marginal costs and benefits. To throw caution to the wind.

More, brief, pointless, random posting.

This has nothing to do with personal finance; I just desperately need a break after submitting my last big paper of the semester. I'd love to nap, watch some tv, eat a nice meal, and celebrate getting an A in quantum, but I know that instead I should study for the cell physiology test. Do you think it's possible to listen to thirteen 50 minute lectures in the sixteen and a half hours before the test without going utterly insane? I'll probably listen to at least some of them, but I think there's going to have to be some time for sleep as well. I'm going to have to trust that my studying throughout the semester will be enough even if I can't muster much effort tonight.

Free hot chocolate makes me happy.

I love the honors lounge at my university. In addition to offering a great place to study, read, or sleep, there are lovely teas, soda, and occasionally cookies or other goodies. If hot chocolate is appropriate treatment for Dementor attacks, it's clearly also an appropriate post-QM final beverage of choice. If only I had time to curl up with The New Yorker in one of the cushy recliners instead of hurrying off to work on a paper.

Finals

Tomorrow's dead day. I have about 18,000 things I need to accomplish between now and next Monday. Post frequency may be way down for the next few days. On the plus side, spending will also go down since the only thing I can imagine buying in the next week is a package of Oreos. Oreos, a big glass of milk, and quantum studying seem to go well together; I'll go back to trying to eat sensibly after the final.

$709.86

I have $709.86 in consumer debt, and it has me a little worried. About $600 of that is for school stuff for which I'll get reimbursed; I really ought to go submit my receipts tomorrow. The rest seems high, but it's really normal, planned spending. If I'm going to have to use a stamp to mail in a payment either way, I might as well charge things rather than write a check so I can get some minuscule fraction of a percent back. The spending all gets recorded in PearBudget and impacts my planning the same way regardless of whether I use cash, check, or credit. Still, even though I knew that I had charged around seven hundred dollars worth of stuff, seeing that number freaks me out a bit. Even though I know that these were all budgeted expenses, having that much debt makes me feel like I'm teetering on the brink of ruin.

Savings Goals for 2008

Patrick at Cash Money Life is going to give away an iPod to one lucky person who posts his or her financial goals for 2008 using a SMART format. (He explains what that is and how to do it.) Setting financial goals has been difficult for me, but if I don't have some aim in mind, it will be too easy to let my motivation lag.

My goal is to have $17,000 in savings set aside by graduation in May. I will set aside the$1,000 stipend I'll receive in January. I'll need to save approximately $30 a month as well and continue the compounding of interest on my current savings account and cd. This seems pretty achievable. It'll be a lot easier to meet this goal if I get the research grant I applied for as well; getting an extra $1,250 with which to pay myself would leave me with more money than I know what to do with.

I shouldn't count my chickens before they hatch, so I'm not including grant money in my projections. If I get the money, I should revise my target upward, but probably not by $1,250. Saving is well and good, but setting aside a bit of money for fun will keep me from coming to resent my budget.

The most difficult part of reaching this goal is to avoid frivolous spending that would force me to dip into my stipend or existing savings. By keeping my savings in an online account and a cd that doesn't mature until May, my money is less accessible and the temptation to spend it is minimized. There's also a possibility that I'll have to travel so there may be some additional expenses next semester. If I am unable to meet my savings goals because I have to pay for a plane ticket to go interview for my dream job, that's a perfectly acceptable trade off. Finding a way to pay for things like that without going over budget would be better, though.

I take great pleasure in knowing that I have enough in savings to live on for a year if I had to. If I begin work after completing my undergraduate degree, I'll be able to fund fully a Roth immediately and still keep a sizable emergency fund. If I pursue a master's degree instead, I'll be able to avoid student loans even if I don't get additional scholarships. Having assets instead of debts gives me a lot more freedom.