A one day vacation

I got to tag along on a trip for students in the summer research program at my university because I've been spending the past week and a half training two of them in the lab. The $27 I paid for a half of a canoe rental may have been the best use of money in my entire life. It's really hard to feel lousy about yourself and your life after paddling 11.5 miles and doing some hiking in the Ozarks on a gorgeous day. To think I briefly considered not going because of the cost!

It wasn't a cheap day, but it wasn't vastly expensive either. Since two of the people who rode in my car chipped in for gas, that didn't cost me as much as I'd feared. PB&J sandwiches and a bag of dried cranberries made for cheap meals, although I did end up with a backpack full of soggy peanut butter, jelly, and bread puree when the last of the sandwiches got soaked after I altered my carefully planned packing scheme to make room for my friend's crackers.

There were a few additional incidental costs. The strap to keep my glasses in place when we capsized was overpriced but necessary. Since I'm ridiculously pale and freckle and burn but never develop a tan, I've concluded that really effective sunscreen is worth the extra cost to avoid pain now and cancer later, but you go through the stuff pretty quickly if you actually use the recommended amount and reapply often. I may have looked like a dork wearing a tankini top and running shorts for swimming plus a t-shirt, a lightweight sun-resistant jacket I borrowed from my mother, and a wide brimmed hat while canoeing when every other girl there was wearing a bikini, but I should be used to that by now.

A friend bought me dinner when we finally made it back to town at 11 pm, and we stayed up into the wee hours of the morning talking, a rare treat. Afterward, I crashed at my brother's apartment, very handy since he was out of town and I was far too tired to drive safely to my parents' house. It was a good day, and I could use more of those.

Insert Blog Post Here

I know I've been neglecting the blog these past few days. It isn't as though I'm dealing with a dearth of material. There was a Motley Fool article last week that I intended to write about, and TFA sent me a nifty budget worksheet so I can begin planning my financial life for the next two years. I ought to be churning out posts by the dozens.

Instead, I'm struggling to find motivation. I've been crumbling a lot lately, getting weird and weepy and generally not coping with life as I should. There's a lot of crud going on, and I just don't know how to deal with it. Talking with certain people, like my brother or my friend S., provides surcease, but at the end of each day I'm left utterly alone with my darkest thoughts.

This will get better. I've been here often enough that I can semi-convincingly tell myself that the gloom will someday lift if I will only push on through life's routines for as many days, weeks, or months that this lasts this time. In a day or two, I'll force myself to start sorting out my finances, and there should be plenty of dull posts, but tonight I'm finding it very hard to care about the future.

Also note:

I didn't mean you personally. The readers of this blog are doubtless not prone to practicing random acts of cruelty. I'm just not a fan of jerks who pick on bicyclists, especially when the bicyclist looks like he's all of twelve. Thanks for letting me vent.

Please note:

If I'm walking my dog and I witness you attempting to run a young bicyclist off the road while you yell,"Get out of the way, you fag!" I will get your license plate number and call the police. As an occasional cyclist myself, I get pretty irate when I encounter such dangerous, cruel, and stupid behavior. I'm pretty sure what you did was illegal, and if it wasn't, it sure as hell should be.

I need a vacation.

I had a nice chat with my research advisor today about my research plans for the next few weeks. In addition to trying to get more data and training the biochemistry student who'll be my successor on the project, I'll be teaching an REU student about research. Oh, and I haven't finished the work I need to have for TFA institute. It's going to be a busy few weeks.

My research advisor seemed pleased but somewhat surprised that I'm going to be hanging around the lab. He told me, "I'll completely understand if you want to spend a week on a beach somewhere instead." Alas, that just isn't what I do. Since starting college, I've traveled a lot, but I've been on just one trip that didn't have some purpose beyond visiting people, and that was a Christmas vacation spent sleeping on an air mattress on my aunt's floor.

I think I need to commit to saving for a fun trip in the next twelve months. It doesn't have to be extravagant, but it absolutely must not involve working in a molecular biology lab forty hours a week, touring nanotech start-ups, interviewing for a job, presenting a poster, or attending a funeral. This may not be the most prudent possible use of my money, but it may be key to maintaining my sanity.

Trying not to be a pain in the neck.

My little brother has his very first job, working part-time as a cook at the pizzeria where my mom is assistant manager. After his half-hearted efforts to find a job last summer failed, we were all a bit worried, but he's getting good reviews from my mom's coworkers so far so it looks like he'll do well and gain experience that will help when he applies for other jobs.

He'll be doing that soon because he's decided to defer his scholarships and take next year off from school. He spent the first two years teetering on the brink of losing his biggest scholarship by not maintaining a 3.25 gpa, and he still has no concrete plan for a major so a year working in the real world may provide some much needed perspective. However, not having a scholarship that pays his living expenses means he needs to find enough work to pay rent. He may find a cheaper place by rooming with a friend, but he's pretty adamant about not living with our parents. (After a mere week at home, I completely understand.)

Even though my brother and I have very different approaches when it comes to money, he's managed to avoid the major mistakes that snare so many college students. He has no debt and a bit of savings. My brother does grasp the importance of accumulating money, and if he can just keep his impulse to buy every new tech toy reasonably well in check, he might end up in ok financial shape.

I'm trying to figure out how to offer a bit of guidance without annoying him. Lecturing or nagging would be counterproductive, but we've always been very open about money so it's fairly natural to mention, "Hey, I opened a Roth today. Now that you're earning income you can start one yourself if you have a little money you're able to set aside for retirement. Here's a pretty good option you can start with $50 a month that you might want to consider."

Would it be reasonable to give him a personal finance book as well? I don't want to force advice down his throat, but I do want to give him resources and encouragement to make good decisions that will make his life easier later on. I like The Only Investment Guide You'll Ever Need, but it might not appeal to my brother. Do you have any recommendations for a good book for a twenty year old starting out?

Patience is a virtue.

C'mon Vanguard. I know it takes time to transfer money from checking, but I keep looking at my account and discovering that my transaction is still "Pending". If I can't have my shares now, can the market please dip a bit so my $5,000 will buy more of them? Thanks.

I've got to quit listening to the naysayer.

I will open a Roth IRA today. It's going to happen, and then I'll stop worrying about it. Not discussing this sort of thing with my mother ever again is going to be key to managing to actually quit fretting.

I have good parents, but they have dramatically different parenting philosophies. My father, who was in favor of a much more authoritarian approach when we were younger, has actually become more laid back now that my brother and I are in college. He has concluded that we're adults who get to make our own decisions, even if they aren't always the choices he would have made. He's willing to offer guidance if asked, but he doesn't force his views on anyone.

My mother is only too willing to offer unsolicited advice, and her knee-jerk reaction to any situation is almost always pessimistic. I've inherited that trait, but over the past few years I've learned to figure out what the worst case scenario is, do what I can to prepare for it, and then try to move on. Mom, on the other hand, tends to let fear of making a bad decision keep her from making any changes whatsoever.

She's a worrier. When we talked about I Bonds, she didn't think they were safe because the U.S. government might default on its debts. Her faith in the FDIC is nonexistent so she assumes she and my dad could lose their life savings in a bank failure. Theoretically, I guess she's right, but if the government falls apart to that degree, we've got bigger problems than just money.

Naturally, she has concerns about my plan to open a Roth IRA. She suggested that Teach for America might kick me out and then I wouldn't have earned income. (I worry about that too, but I'm doing my prep work and will go to institute determined to learn as much as I can about teaching so that I can best help my students. What more should I do?) It doesn't seem likely that I'll be unemployed for months and months. I'm pretty sure that I can find a job doing something, even if it's tutoring part time and waiting tables part time.

My mother is also convinced that the U.S. stock market is going to crash so she thinks I'm insane for putting money into a fund that includes stocks. There are going to be recessions, but this is money I'm investing for use forty years from now. That gives me a lot of time to ride out downturns and makes inflation that much more of a concern. I know a well-diversified portfolio of both stocks and bonds is the sensible choice, but my mother does a great job of making me second-guess my decisions.

Secret handshakes and overpriced jewelry.

Invitations to join academic honorary societies always struck me as somewhat more annoying than flattering. Many of them seem to exist merely to give college students another activity to put on their resumes in exchange for a modest fee. Needless to say, I didn't join a lot of honorary societies.

Yet, Friday afternoon I found myself signing a membership roll and trying not to giggle while learning a very strange secret handshake. What was different this time? Maybe it was because I'd actually heard of the organization before; because my dad's older sister was initiated decades earlier; because the chapter president is an ancient theorist from the physics department and the chapter secretary is one of my favorite English professors and associate dean of the honors college; or because the note inviting me to join included the proviso that the honors college would pay the lifetime membership fee if I could not afford it, making this a slightly less money grubbing operation. Maybe I just wavered and let my vanity get the best of me.

I'll have to swing by the honors college office to pay the membership fee on Monday. After accepting the invitation and resigning myself to wasting $55, I was informed that I could request reimbursement from my scholarship funds so membership in this organization will cost me nothing. That's very budget friendly indeed.

There's one little problem: I'm now tempted to spend the money on something even more pointless. Members of this honorary organization are allowed to wear a lovely little trinket. Given that I don't have a pocket watch that needs winding, it would serve no useful purpose, but I covet it nonetheless. A reprieve from wasting money one thing doesn't mean I ought to waste it on something else, and wearing the dang thing would probably get me labeled a pretentious twit. Still, I keep thinking about how for a mere $38 I could have the official watch key and a chain to wear it on shipped to me. Please remind me that I don't need any more shiny things or ego enhancers.

I am a child of privilege.

My parents are far too generous. Their intentions were wonderful, but I really wish they hadn't given me this graduation gift. My dad said that he has always wanted to help me get a good start on saving for retirement so they gave me enough to fully fund a Roth for the first year. However, they both have made it abundantly clear that the money is mine to do with as I wish, whether it be investing, putting toward a replacement when my car dies, saving for a house, or going on a really great vacation. Never before has money made me this uncomfortable.

They insist that it's what they wanted to do with their money, and I know it isn't a strain on their budget. This is very clearly a one-time thing. It's a large sum of money, but it is probably a bit less significant to a fifty-something engineer than to a twenty one year old teacher. Still, I would have been much happier if they had kept their money.

Although I appreciate my parents' kindness and desire to improve my life, it still feels strange to benefit from the savings and hard work of others. My mother told me that they were able to give me this gift because they didn't have to pay anything for my college education, but it isn't as though I had to wait tables thirty hours a week to pay tuition. Dead rich people I've never met and the taxpayers of my state financed the past four years, and I wouldn't have been in a position to get the scholarships I did if it hadn't been for the myriad advantages my parents gave me by raising me in a house full of books, volunteering in my elementary school classrooms, and serving as wonderful role models.

It should be up to me to put those advantages to good use and make my way in the world. Working and saving on my own is, as I see it, a big part of adulthood. That's why I already set aside money of my own for funding a Roth. However, there doesn't seem to be any graceful and polite way to decline this gift; I've tried. It looks like I'll either have to find a way to use this money or stick it in savings and pretend it doesn't exist until the opportunity arises to repay my parents' generosity.

The end is in sight, and it scares me.

I have one more final exam before I graduate. Even if I don't show up, my grade is high enough that I'll get a B in the class and complete my requirements. That should make me happy, right? Why does it feel like graduating means I move on to a new stage of my life with even more ways to fail and let down everyone I care about?

Safety deposit box, fire safe, or neither?

One of the million tiny moving related details I need to deal with is figuring out is what to do with my important documents. They are all in a fire-resistant lock box at my parents house, but won't do when I live several hours away instead of half an hour from home. Putting them into the new. larger, fire-resistant, electronic media rated, waterproof filing box I bought my mother for her birthday today isn't an option. (Happy birthday, Mom. Please quit reading my blog.)

Nothing I need to store is irreplaceable. It would be a hassle to get new copies of my birth certificate, passport, social security card, immunization records, and savings bonds, but it could be done. Really, my losing those things if I don't have a designated place to store them is probably a greater risk than theft, fire, or other natural disaster.

I could just stick them in my accordion file and forget about it. That would keep things organized, and it wouldn't cost anything. However, it might fall into the cheap rather than frugal category since a firesafe is fairly inexpensive and would provide better protection.

A safe deposit box at a bank would be an even more secure storage place than a cheap firesafe, but then I'd have to pay the bank every year instead of making a one-time purchase. Also, in addition to making my documents less accessible to thieves, a safe deposit box would make my documents less readily available to me. Just because I probably won't ever develop a sudden need for my passport at 2 a.m. on a Sunday doesn't mean I like the idea of not being able to get it at all times.

Where do you keep all of the papers you rarely use but mustn't lose?

There are way too many options.

Today I'll be heading to the bank to deal with my newly mature cd. I'll be awash in liquidity again, but not for long. The time has come to open a Roth IRA. It's clearly the right move since I place a high priority on not starving on the streets in my old age, but figuring out what investments will best help me attain that goal is proving tricky.

Individual stocks are out, at least for now. Having led my fourth grade stock market game team to stellar returns doesn't mean I know a thing about investing for the long run in the real world. Owning the market seems like a much more reasonable approach than betting on my ability to pick winners.

So I want indexing, diversification, and low expense ratios. I'm also willing to admit that at this point in my life I'm both lazy and ignorant and probably couldn't be trusted to periodically rebalance in any sensible manner. The Vanguard Target 2045 or Target 2050 funds sound like exactly what I need, right?

Except, for one teensy little problem: that level of aggressiveness makes me nervous. I'm not sure I can stomach the risk. Much as I like to tell myself that I won't touch the money for decades, I have a suspicion that substantial losses might cause me to bail and move to something insanely conservative instead, much as my parents did with my father's 401(k) in the wake of the bursting tech bubble. Investing would be easier if I were a robot, but human frailty may have to play a role in my decision-making process.

So I'm considering a couple of other options as well. The Vanguard Balanced Index Fund is probably way too conservative for someone my age and lacks international exposure, with 60% in a total U.S. stock market index and 40% in a U.S. bond market index, but the 0.19% expense ratio seems reasonable. The Vanguard LifeStrategy Moderate Growth Fund is a fund of funds with a higher expense ratio, 0.23%, probably because is contains one actively managed fund as well as index funds. Points in its favor include keeping just 30% of its holdings in bond funds and putting about 10% into a total international stock index.

Where should I go to research things further? Do I need to talk myself out of my timidity and try the target date fund, or is it ok, as a recent New York Times article suggested, just to pick an asset allocation I can live with? Is it ok to make a decision without worrying overmuch about whether it is the optimal choice and trust as long as I don't do anything truly stupid the outcome will probably be alright?

Throughout college I had a goal of amassing a sizable emergency fund before graduating so I could begin the next phase of my life with a greater sense of security, but I've been rethinking just how large that fund needs to be. My recent bond purchases mean I'll have a somewhat smaller liquid emergency fund, and I think that's ok. Saving for retirement and earning returns high enough to combat inflation are somewhat larger priorities than liquidity for me right now.

After my cd matures next week, I should have enough money to fund a Roth for 2008, cover my summer expenses, and still keep about $7,000 liquid. There are several reasons that should be enough:

• I'm single and have no dependents. If other people relied on my income to meet their basic expenses, larger reserves would be necessary.
• I have a job lined up for after graduation, and it is in a fairly stable field. There is an ongoing shortage of qualified physics and math teachers in most areas of the country so a recession probably wouldn't leave me unable to find employment.
• I have no debts of any kind. If I lost my job, I would only need to worry about taking care of my ongoing expenses rather than having to pay creditors as well.
  
• I'll be in a low cost of living area and have roommates. My obligatory monthly expenses should be fairly low, enabling me to live for quite a while on a few thousand dollars if I spend only on true necessities, as I would if I lost my job or had to rebuild my savings account from scratch following some major emergency.
• My e-fund won't be my sole financial resource. Taking principal from a Roth IRA is rarely a good idea, but if I needed the money to put food on the table, it would be an option.
  

Beginning in April 2009, it will be possible to cash out the $3,000 in I Bonds that I bought this month, and at that point they too will be something I can draw on if necessary. It's hard to envision a scenario in which I'd spend over $7,000 more than my income in the course of one year. As soon as I get my first paycheck I plan to start socking away money for car repairs and/or eventual replacement, but even if I had to find a new vehicle tomorrow, I could get a decent used car without totally wiping out my savings account.

I think I have a reasonable plan and will be in better financial shape that most people who are fresh out of university, but I'm fairly new at this whole adulthood thing so there are probably a lot of important factors that haven't occurred to me. If you have any suggestions for additional things to think about or have any words of wisdom on surviving the transition from college to work, please do share.