Travel

I’ve been traveling a lot lately, which explains my silence, but has also made me think about the act of travel as well.

I grew up in a family that traveled progressively more the older I became. It started out with family road trips to visit relatives, all three kids packed in the back seat for 1000 miles. There were occasional trips to other places, like the Disney World trip at 6, but generally travel for the family was restricted to family vacation, once a year, to visit relatives. Then I joined a choir that went on tours, and suddenly began things like trips to Israel and Ireland. These became supplemented with long weekends in New York with my parents or trips to Denver to visit my college-aged sister. Travel wasn’t an everyday occurrence, but it was frequent enough from the age of 12 onwards. After graduating high school, travel got worse, with spending time in Spain, then choosing a college 1800 miles from home. Travel was a normal occurrence, I mean, it didn’t count if it was going home for Christmas or a quick bus trip to New York right? By the time I graduated college, I was a seasoned traveler, which only got worse with my new job in a new location. Now I had to go visit the significant other or college friends out of state. I had to go home for Christmas. I needed to go to headquarters for training. Suddenly, I look back and see that in the last 6 months I’ve done at least 7 trips.

I like to travel, but this is wreaking havoc on my ability to save money. I use travel as an excuse to splurge, go out for expensive meals or go to the bar. I don’t do those things when I’m home, so it must be o.k. to indulge a little while I’m gone. I’ll go back to my strict budget once I get back home. And I do manage to go back to my strict budget when I get back home, but it doesn’t help the fact that I spent $70 last Thursday and another $60 on Sunday. I can eat lentils and rice all week and it still won’t help. Travel is the danger lurking in my financial life.

Having tracked my expenses for the last six months, I see the truth that travel is not healthy for my budget. I love travel and consider it almost necessary considering where I live, but this cannot continue. I am deciding that the travel madness must stop. To that end, I’ve decided to move closer to my friends and significant other beginning in October, which should help. I will still be going home for Christmas and may go home for Thanksgiving, but aside from that I will be attempting to limit my travel. This is going to be a challenge, but I really need to be saving instead of indulging my wanderlust.

Gender and Personal Finance

Ramit at I Will Teach You To Be Rich is looking at gender and personal finance. To help out, I've created a survey to get some hard data.


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Chick Lit

During my recent short vacation, I picked up a few books for the beach. Looking for light and fluffy reading, I wandered the library looking for books with pink covers. Not, romance, but chick lit, it promised easy reading that would focus on protagonists like myself; young, female and fun. Confessions of a Shopaholic, complete with pink cover, seemed to fit the bill.

It didn’t take many pages before I found myself cringing at the main character’s behavior and wanting to put down the book. It went against every bit of personal finance advice I’ve ever seen written. The main character overdrafts her bank account, doesn’t pay off her credit cards, shops emotionally, rewards herself excessively, and altogether does not live within her means. There are scenes of keeping up with the Joneses and certainly no planning for retirement or the future. It’s all a personal finance bloggers’ worst nightmare.

Worse, is that it all works out at the end. A couple hundred pages of fiscal irresponsibility are all undone at the end with the offer of a dream job and the gain of a multi-millionaire boyfriend. The financial meltdown that was the climax of the book is completely forgotten by the protagonist as she suddenly increases her income without really intending to. The lessons being taught to the average reader cannot be very positive. “Get into debt”, the book says, “and something will come along to pull you out.” “Having the perfect outfit is important, since it will get you the right man, so go shopping now”, the book lectures with a smug devil’s advocate smirk on its pages.

I know better than to fall for the book’s tempting take-away. I live within my mean, budget every month and track my spending regularly. I save for the future, never buy things on credit I can’t pay for, and started my 401(k) at 23. Even with my growing knowledge of personal finance, I find myself tempted by the book, wandering through shoe stores, eyeing things I do not need. If I find myself tempted, I wonder, how does the average reader feel? How much do they end up buying once they finish the book?

The best deal in career advancement

During a conversation with one of the (undergraduate) coops at work, we got to talking about grad school. I'm not out of the closet on going back to school with the people at work because it's well in the future and would adversely affect my career up to the point I decide to leave. Still, when talking, he said he was interested in getting an MBA sometime in the future, and I couldn't help but offer some advice. Graduating next year, I decided to let him in on the best kept secret of MBA admissions:

Apply while you're still in college.

Most college seniors don't really know what they want to do with their lives, which would make many discourage this as a foolhardy pursuit. The GMAT alone costs $250 for one try and could be compounded with multiple testing, or the multitudes of prep courses and books available to "boost your score". Still, I say, save up, study hard, and take the GMAT during the fall before you graduate.

Why?

Many schools waive or reduce their fee for college seniors, meaning that applying to five top-tier schools, which could regularly cost $1000 or more could end up costing less than half. Further, this could help your applications in the future, as many schools will even tell you what your weaknesses are if you're rejected, but only as a college student. For those of you in a non-traditional career, applying as a college senior, then applying again to the same schools a few years later will help show a commitment to business and a clarity of vision. For those of you in a more typical career path, it certainly couldn't hurt. Lastly, if you do get accepted as a college senior, you don't even have to go immediately. Many prominent offices of admission will offer deferred or postponed admission, meaning you could have a few years to find out what you want to do without the risk of not getting into grad school.

All in all, it's a pretty good deal. I wonder why more people don't do it.

July budget

for July:

Category	Budget
food	$300.00
housing	$500.00
entertainment	$300.00
transport	$150.00
clothing	$100.00
travel	$100.00
health	$100.00
beauty	$50.00
education	$1,700.00
misc	$300.00
total	$3,600.00

I understand that this is substantially higher than I would like, but I need to get my last prerequisite out of the way for grad school. Without that expenditure, I'd be at less than $2,000, even accounting for a few days in Hawaii and 9 days in Boston/NH. I love travel, but I need to cut back and save more.

June Results

With June over, I have official results:

Category	Budget	Actual	Difference
food	$300.00	$168.80	$131.20
housing	$500.00	$450.00	$50.00
entertainment	$300.00	$142.09	$157.91
transport	$200.00	$149.64	$50.36
clothing	$150.00	$65.00	$85.00
travel	$400.00	$225.18	$174.82
health	$200.00	$181.52	$18.48
beauty	$100.00	$26.76	$73.24
education	$0.00	$0.00	$0.00
misc	$300.00	$217.12	$82.88
total	$2,450.00	$1,626.11	$823.89

Considering how I thought the month was going to go, I feel pretty good. I started out the month with a weekend in Boston, spent a weekend in NYC and finished the month in Hawaii, but still managed to keep my costs under control. My Miscellaneous category was a little high, but there were a number of gifts, with graduations, birthdays, father's day and a wedding. I am especially pleased with my food - dining in category. For less than $70 spent on food, I managed to provide myself with 22 days of food. Close to $3/day is very efficient eating. Other than that, I did actually get my prescription filled, but that only happens every few months, so hopefully things will generally be similar to this in months to come.

Even better, when I looked at how much I've spent over the last 4 months (since I started tracking my spending) and compared it to my net income, it came out to 44%. This is in addition to the 6% of pretax income going into my 401k, and the donations to my HSA. I'm feeling pretty good about my saving.