Credit Card Roll Call

I was taking my credit cards under consideration the other day and realized that I’ve been kinda old school with my use of them. Specifically, I have just a few (or so I thought), rarely apply for new credit, and hold on to them for a very long time. I’ve been taught that these are all good credit habits to practice, but wonder if they’ve caused me to leave money (in the form of rewards) on the table.

Ideas preventing me from opening new accounts:

  • Fear of damage to my credit score (due to too much available credit, too many accounts, or the application inquiries).
  • I placed a freeze on my credit to prevent identity theft, which I would need to lift in order to get a new card.
  • Desire to keep my life (financial and otherwise) as simple as possible.

Back in my college days, I was just happy to have a credit card. I racked up a balance as I struggled to survive financially. Many boxes of mac and cheese were consumed in this period of my life. Over the years, I paid off that debt and have seen rewards cards getting more common. My first of these being with Capital One, who offered me 1.5% cash back on all purchases. And for the past 15 years, I mainly use that card, paying the balance each month and periodically cashing in points for Amazon credit. Not too bad of a deal.

Since starting this blog, I discovered websites exalting the opportunities that travel reward cards can open up. This convinced me to unfreeze my credit to apply for the big fish: the Chase Sapphire Preferred! I got a nice bonus for spending a few grand in the first three months (hello, Thailand) and have been wearing out that card ever since.

This month, my credit card corral has increased by one. I heard about the Amazon credit card a while back; 5% cash back on purchases piqued my interest. I didn’t have to look deeply into my past Amazon Prime spending to know that it’s significant enough to warrant the card. It also offers 2% on restaurants, drug stores, and gas stations and 1% on all other purchases. As an extra bonus, I got $70 credit on my Amazon account instantly upon approval.

Now, I get to be all strategic when choosing which card to pull out of my wallet in order to maximize their unique benefits:

  1. Chase Amazon – Obviously, the huge benefit is for Amazon Prime shopping (5%), but gas and restaurants (2%) are golden, too.
  2. Chase Sapphire – Any travel-related spending goes here (2%). This is another option for use in restaurants (2%). Rewards get a higher redemption for travel purchased through their website (1.25%), which adds some incentive to use this day to day.
  3. Capital One – Good old 1.5% on everything. I’m torn between using this or Sapphire for spending that falls outside of the various bonus categories. The allure of travel is strong, but this one technically gets me more money.
  4. Chase Freedom – The only reason to use this is for the rotating 5% cash back bonuses every quarter. Gas stations are just wrapping up. Grocery stores are next, which I’ll use the shit out of.

The most surprising part of this look into my credit cards is that I have more than I thought (and how much business I’m giving to Chase Bank)! Seven cards seems excessive and I feel compelled to simplify (remember when I wanted to close my oldest card? I guess it’s still a thing). I KNOW! I KNOW! Length of credit is an important factor to my score. To see just how this might affect me, I looked at my last credit report to check the age of my accounts:

  • Card #1 – Sept, 1996
  • Card #2 – Dec, 1996
  • Card #3 – March, 2001
  • Card #4 – Jan, 2004
  • Card #5 – Feb, 2014
  • Card #6 – May, 2016
  • Card #7 – March, 2017

With my first two cards from my early college days being only a few months apart, I think I’ll be OK to close one and just get it off my plate (perhaps #2). Neither offers significant rewards and go unused. My credit score is still high and I have no intention of making any big purchases that might be impacted by a score dip (like a refi or car loan). Is it finally time I make that call and nuke one (or more)? I would be interested to hear your thoughts, dear readers.

(Image: Lee Coursey)

A Look Back at my 2016 Savings

I pride myself on diligent savings habits and reasonable control over unnecessary spending. It feels pretty great to see my net worth rising steadily; I know I’m saving a lot. But I want to know the official number!

What percentage of last year’s income went to my retirement and savings accounts?

This year, how far can I push the limit between a comfortable lifestyle and squirreling more money under my mattress?

Employer 401k
  • $13,950 in 2016 contributions
  • $4,050 shy of the $18,000 maximum
  • I received a small salary bump in the new year, so I up’ed my contribution by 1%. That will bring my annual total to just over $15,000. On top of that, my company paid out a bonus this month, from which the same percentage was taken. That dropped in another $1,300.
  • 2017 projection: $16,300
Roth IRA
  • $4000 in 2016 contributions
  • $1,500 shy of the $5,500 maximum
  • In February, I increased my monthly transfer from $250 to $300. That brings me to $3,550. From my bonus, I moved an extra $1,000 to this account.
  • 2017 projection: $4,550
Betterment (long-term savings)
  • $1,800 in 2016 contributions
  • Automatic transfers have been on hold for the past few months. I saw my balance move past $18,000 and just wasn’t sure how much should live in this investment account.
  • Considering an increased amount of instability at the studio where I work over the past few months, continuing to sock away here would be a good idea.  I also intend to drive my 2008 Mazda until it dies, but it won’t last forever. Building up enough to cover paying cash for my next car would be prudent.
  • 2017 projection: $900 ($100 per month starting in April)
Salem Five (short-term savings)
  • $3,500 in 2016 contributions
  • Since this is my short-term savings, I did make a couple of withdraws to cover expenses for my Thailand trip and property taxes. My monthly automatic transfer is set to $400 at the moment, and I dropped $1,000 of my bonus here.
  • I try to withdraw as little as possible from this account and simply absorb big expenses from my regular pay, but that’s not always possible.
  • 2017 projection: $5,800
Conclusion
  • Total 2016 savings: $23,250
  • Total 2017 projected savings: $27,550
  • If all goes according to plan, I’ve set myself up to save more than 30% of my gross income this year. I find that an acceptable number! Particularly with the unusually high amount of travel adventures I’m taking, which feel indulgent at times, but are worth every penny (or Bhat, or Euro…)

Bimonthly Savings Update – March 2017

This bull market just keeps rolling merrily along, doesn’t it? My net worth has increased by $12,000 in two months (and that doesn’t include any change to my home value). I’d like to say that I’m pleased, but all of this up, up, up must eventually come down. Anticipation of that is keeping me from gleefully running naked down my street. But I won’t take any action. When prices rise, my money buys less; when they fall, it buys more. I keep reminding myself to leave it all alone and let time do it’s thang.

In other news, I’m anxiously awaiting a change to my employer 401k due to our acquisition last year. Word on the street that my measly 2% match will jump up to more than 4%! Hooray for that happening in April.

I also received a tax refund this week! Majority of it is being used to pay the second installment of my annual property taxes. Terribly sensible, I know. But that prevents me from drawing from my savings account as I build it back up after my New Years trip to Thailand and upcoming jaunt to Italy. That makes my checking account inflated at the moment (which is not reflected below). That excess will be transferred into my Roth IRA or Salem Five this month.

Home value: $389,392

Current net worth: $365,362

Reflections on my Thailand Trip

I’ve been home from my Thailand vacation for nearly two weeks. My journey was occupied by elephant riding, golden Buddhas and temples, boat rides, ladyboy cabarets, plenty of shopping (from floating markets to modern malls), and even bottle-feeding a baby tiger. Here’s an update on where I’m at post-vacation and follow up on a couple of trip goals.

Jet Lag

Jet lag recovery has been tedious; I just can’t seem to get my body back to its old self (and time zone). I’m no stranger to traveling great distances (Australia and East Africa to be exact), but jet lag from this trip is more significant than before. Likely due to me being older. Swell. I also had a nasty head cold the entire trip and slept poorly. I prefer those reasons to the former and will stick to them fervently. The first night back in my own bed, I crashed for 14 hours solid, which was truly glorious. But every night since then has been a crapshoot. Here are a few remedies I’ve tested to help my biological clock get back into LA mode:

  • No iPhone, TV, or bright lighting 1-2 hours before bed
  • Taking a hot evening bath
  • Ensuring my bedroom is very dark and cool
  • Exposing myself to sunlight in the morning
  • No caffeine after noon.

Some nights I’ve been taking an over-the-counter sleep aid, which allows me to sleep until morning. On the nights I don’t take it, I wake up around 2am and have trouble falling back asleep. I’m not a fan of using drugs to catch some z’s, so I picked up melatonin a few days ago to help get me on track in a more natural way. At twelve days back, I’m finally seeing light at the end of the jet lag tunnel.

Minimalist Packing

I’m happy to report that my packing plan worked out well! Of the 17 people in the group, I had the least/smallest luggage by far. Some others had two huge suitcase full of stuff! I only had to wear a few items twice, which was just fine (the humidity wasn’t as brutal as expected). Some thoughts for next time:

  • I didn’t love one of my shirts and pairs of pants. Typically, it wouldn’t be an issue, but with so few clothes I should love every item. Naturally, I wore both of them on the day we took the most pictures.
  • I didn’t need to bring the travel hairdryer. We stayed in nice hotels that provided them (although their websites didn’t specify) and I hardly used it anyway.
  • I didn’t need my rain jacket. Useful if it had rained and a necessary item when going to such a climate, but I could’ve done without. I put it on for ten minutes the one day we had a bit of sprinkle, but I quickly got too hot and ditched it.
  • I didn’t wear my hat. I considered it a couple of times, but I either didn’t have it with me or didn’t want to deal with the impact it would have on my sweaty hair. Vain? Maybe. I still managed to thwart a sunburned face.

The big snafu in my packing plan was that upon LAX check-in, I was told my carry-on suitcase was 7 pounds over the weight limit. WHAT!? How could summer clothes, two pairs of sandals, and toiletries compute to being overweight? It just so happens that China Airlines has a carry-on weight limit of 7 kg (15 lbs).  Most airlines (in my experience) don’t have such weight restrictions (only size), so I assumed China Airlines was the same. My bad. Should’ve done more advance research on that. I went ahead and checked my suitcase, as it truly wasn’t a big deal. But the plot thickens! After more than 20 hours of travel, I landed in Bangkok two days later and my suitcase wasn’t there to join me (along with those of at least a dozen others). Noooo!

Seeing as how there was nothing I could do (other than filing a report with the airline), I found my hotel transfer and got my vacation started with an hour-long foot massage while developing a plan to buy a fabulous new Thailand wardrobe. That plan was short lived when I was awakened at midnight with the happy news of being reunited with my stuff. Crisis averted.

Christmas Gifts

I was elated when my family agreed to forego Christmas gifts from me on the 25th to instead receive exotic trinkets from my trip. However, this caused me more stress than usual over getting the most awesome gifts possible. Souvenirs were no longer a little token of my travels, but an expectation of something cool enough to be considered a Christmas gift. The added challenge of my limited luggage space for the return home didn’t help, either.

I tried to not let this pressure get the best of me. My thought, time, and effort in selecting each gift is what matters. Worrying about what others will think is completely unproductive and unhealthy. I picked up a few gems (including a sterling silver elephant necklace, a wood carving, and a table runner) as well as more standard items (couple of scarves and dresses, Chiang Beer and Red Bull t-shirts) that seemed to please my crowd at home just fine.

The minimalist in me was surprised and confused at the sadness I felt upon giving away some of these gifts. They were pretty cool and I wanted to keep them for myself! I felt this much more prominently than on any former vacation. I focused on the pleasure my family expressed in receiving the items, keeping in mind that none of those physical things could ever match the experiences I lived while in Thailand.

I already miss this…

 

Bimonthly Savings Update – January 2017

Happy New Year! Thanks for visiting my blog, which has been going strong for two years now! I wish you a 2017 filled with laughter, kindness, and success (with plenty of restful sleep in between).

And now on to the money stuff. Investments have been steadily growing for the past two months since the presidential election, so all accounts are up. I don’t know how long this gravy train will last and am not terribly concerned. I’ll continue to play the long game with good old fashioned dollar-cost averaging. I like things simple.

You may notice, however, that my Salem Five savings took a hit. That was to pay for my fabulous Thailand vacation in December. I’ve got an automatic transfer for $400 a month into that account, so it will bounce back in no time (along with a bit of belt tightening in the new year).

Home value: $390,234

Current net worth: $353,300

Minimalist Packing for Thailand

As I prepare for my 12-day trip to Thailand, I’m excited by the challenge of bringing the least amount of stuff with me, while still being weather-appropriate, comfortable, and looking super cute. I thought YouTube would be a good place for advice…nailed it!  A couple favorites are this full playlist from LightbyCoco and packing tips by Estee Lalonde.

The weather in Bangkok is predicted as hot and humid (about 90 degrees F and 60% humidity). Being a SoCal native, I’ve handled my fair share of heat, but not that kind of humidity. We’ll see how my wavy hair holds up.

My research has led me to attempt bringing just two bags, both of which I will carry on my flights:

1. Carry-on suitcase

I’ve had this green beater of a suitcase for about 15 years and it’s still going strong. It rolls smoothly and is just big enough to carry on, so why replace it? Here’s what I’ll put inside:

Tops:

  • Black t-shirt
  • Dark grey t-shirt
  • Light grey t-shirt
  • Black & white striped t-shirt
  • Pink tank (wear on flight)
  • White cotton button-up (wear on flight, not pictured)
  • Black cardigan sweater (wear on flight)
  • Rain jacket

Bottoms:

  • Green chinos (wear on flight)
  • Black capris
  • Denim shorts

Dresses:

  • Black sleeveless short dress
  • Black & white sleeveless dress

Shoes:

  • Black sneakers (wear on flight)
  • Black sandals
  • Silver flip flops

Other clothing:

  • Animal print scarf (also a wrap or beach cover-up)
  • Bikini
  • Pajamas & slipper socks
  • Bucket hat
  • Socks (3 pair)
  • Underwear (6 pair, not pictured)
  • Bras (2, not pictured)

Other items:

  • Mini first-aid kit with ibuprofen, band-aids, alcohol wipes, anti-diarrhea medicine, etc.
  • Toiletry bag (pictured below) with toothbrush & paste, hair items, a little make-up, menstrual cup, face wash & oil, sunscreen, bug repellent.
  • Travel size hair dryer. I typically wouldn’t bring something like this on vacation, but I’m determined to look somewhat cute, dammit. Although straightening in the humidity will likely prove futile.
2. Carry-on shoulder bag

I decided to bring this bronze tote bag on the plane with all the essentials I’ll need to access during the flights. It will also be used as my overnight bag for a couple nights of the trip and will house my black cross-body purse that I’ll carry with me daily.

  • In the bag: book, journal, pen, snacks, phone charging cord, empty water bottle
  • In the pouch: earbuds, eye mask, tiny moisturizer, lip balm, sleep aid, mints/candy
  • In the purse: passport, wallet, hand sanitizer, tissue, glasses, sunglasses, smart phone

I’ll be doing my family Christmas shopping while on the trip. I expect all of the above will leave me just enough breathing room to cram in those goodies on my return.

(Image: kalexanderson)

Impromptu Thailand Adventure

I did something spontaneous a couple of weeks ago. I booked a trip to Thailand! It’s a bit unlike me to make such significant plans so suddenly, without months of meticulous vacation preparation and budget obsession. But the stars seem to be in alignment, pointing me towards taking time for myself to experience a new part of the world. Here’s a glimpse:

  • It’s been over two years since I’ve taken a big, international trip (safari and climbing in East Africa. AMAZING.)
  • I’ve never been to Asia. This will be my sixth continent (I’ve got my eye on you, Antarctica).
  • My workplace closes for a week around the holidays, so I only have to take four vacation days to cover the two-week trip.
  • Speaking of work, there was a shake-up at the studio last month where a significant number of employees got laid off. I survived these cuts and feel that my position is relatively secure this year.
  • I have the money in my savings, as well as a nice stock-pile of unused travel rewards points.
  • I found a tour company that specializes in trips for single people. Their itinerary falls at the ideal time to a place I’ve been wanting to visit. Strangely perfect.
  • As a single person, I’ve learned over the past 15 years that when a travel opportunity arises, take it. Especially if it’s with a friend, but even if it’s going solo. I won’t be on earth long enough to see everything, but I might as well take a stab at it.

In addition to simply enjoying the exploration of a new land, I have other personal goals for this trip:

Renewed appreciation for my awesome life
  • When it comes down to it, I lead a life of privilege and excess. It often doesn’t feel like it, but compared to most other people in the world, I am rich and have an excessive amount of personal freedom. Travel helps me remember that.
Do not stress about spending
  • As a reader of this blog, you surely realize by now that I’m pretty damn anal about my finances. On past vacations, I’ve found myself getting anxious about money and how much I’m spending, particularly in the final days as the tab rises and the reality of returning home sets in. When similar thoughts creep in on this trip, I will remind myself that the experience is priceless and invaluable towards my personal growth. I am worth every penny. I will make more money, but I will never get this time back.
Minimalist packing
  • Carry-on only, baby! The weather will be hot and humid. I’ll be taking a capsule wardrobe of items that can all be worn in different combinations while still looking fab. I’ll break down my packing strategy in my next post.
Journal every day
  • I usually do this when on vacation, but not in real life. I like taking time each evening to reflect on what I experienced that day. There’s no way I can remember all the details and having them documented for later recollection is priceless.
Eat whatever I want
  • Two words: Fish. Sauce.
And just when you thought that it couldn’t get any better….
Thanks to this trip, I don’t have to buy Christmas gifts for my family! They’re all much more excited to receive Thai treasures, rather than stuff I order on Amazon. My lack of visits to the mall is the best gift they could ever give me back. It’s a win-win. 

(Image: Jared Kelly)

Time for Another Refi?

5583561290_8714669389_zI’m smack dab in the middle of refinancing my condo. Interest rates have been incredibly low for many years now and are poised to increase. I’ve already taken advantage of them in 2012, securing a fixed-rate mortgage at just 4%. I thought I was all good for the long haul; no more refis for this girl! But several recent factors make me think doing it all over again is worth investigating:

  • Los Angeles home values are consistently on the rise, giving me ample equity to avoid PMI. In my last refi, I just barely missed the 20% threshold and accepted a slightly higher interest rate to avoid a monthly PMI payment.
  • My badass credit score (over 800).
  • Availability of my savings to cover potential costs.
  • Referral to a close friend’s broker (and family member) who’s worked with several of my friends and coworkers with positive results.

In addition to the usual internet research, I consulted my financially savvy friends in this decision. I love that we can talk turkey about real numbers without dancing around in avoidance of revealing anything too money-specific. Here’s what I considered:

How much money will a refi save me?

Upon asking the broker about current offerings, she gave the following two best options for 30-year fixed:

A. 3.75% with no costs, reducing my monthly payment by $117.

B. 3.625% with about $1,200 in costs, reducing my monthly payment by $132.

I briefly considered a 15-year term, but the monthly payment would put me out of my comfort zone. I also think that my money would be better spent maxing out my 401k and Roth IRA, rather than shoveling so much into one asset that I plan to hold for a long time.

Is it worth paying up-front costs to get a lower interest rate?

Math required ahead! Looking at the $132 savings of option B alone, it will take me nine months to recover the $1,200 costs. I can live with that.

But in comparing the two scenarios, it will take me much longer to hit that break-even point. Sure, option B saves me $15 more per month, but is that worth forking over $1,200? That $15 savings becomes $180 a year and $5,400 over 30 years. It would take me 80 months (just over 6.5 years) for the savings to reach the price paid. I’ll likely keep the condo at least until then, but so much of this decision depends on the next question…

Does a refi make sense for my future plans for the property?

Rule of thumb for refinancing is the longer you stay in the home, the higher probability of its financial benefits. I have no intention of ever selling this place. Its got so much going for it, mainly being in a desirable area of the San Fernando Valley. It’s in a completely walk-able neighborhood (somewhat rare for So Cal), is in a great school district, and is close to several big film/television studios.

Ideally, I would like to own this condo for the rest of my life. I bought it from a bank at a low price just as the housing market was collapsing in 2008. Even before this refi, my monthly nut (mortgage, property tax, and HOA dues) is just under the average rental rates in the area. I could continue to live here indefinitely, rent it out for a profit if I decide to move, and even return to it as my low maintenance home in retirement. Of course, this could all change in the future, but I have to base decisions on my current life situation, rather than the immeasurable amount of events that might happen someday.

Short-term savings vs. long-term cost

Saving up to $132 each month sounds awesome, but will starting over with a new 30 years cost me more in the long run? After more math, turns out that it will. Despite the fact that my monthly payment will be reduced, lengthening the term from 26 years to 30 years will cost an additional $12,400 (option A) or $6,800 (option B) over the life of the new mortgage. I found this with a super simple “How much does that loan really cost” calculator.

To counteract this, what if I invest a portion of my monthly savings? With option B, let’s say I add half ($66) into either my Roth IRA or Betterment savings each month. Over 30 years with a modest 4% earnings rate, that would be an additional $39,000 in my nest egg (using this calculator). I feel that I’m anal-retentive enough about my finances to do this consistently.

What’s next?

With all of the above in consideration, I am moving forward with a refi and leaning towards option B. My math may not be perfect or taking every small aspect into consideration, but it makes sense to me. And seeing how it’s my home and money, that’s all that really matters.

As of writing this, my loan has been approved, but I have yet to lock the rate and associated costs. That will be key! My broker is watching the ever-fluctuating market (especially since the recent presidential election) and will let me know when the iron is hot. I hope to land the ideal situation for my awesomely humble home.

(Image: Derek Bruff)

Volunteer Burnout

426011335_62be4f4fc5_zVolunteering is a wonderful thing. There are so many organizations that do amazing work and rely on people to give their time for free in hopes of helping others and making a difference. Do it. Now.

Unfortunately, I’m experiencing major burnout from just this. Let me explain. I purchased my Los Angeles area condo almost nine years ago and I’ve been on the HOA board since day one.

As you may or may not know, condominiums typically have a Home Owners Association (HOA) made up of volunteers. They make sure the community and/or building runs smoothly when it comes to common area maintenance, residents following the rules, handling the occasional emergency, and maintaining a balanced budget. All great stuff that’s super important.

When I moved in, I was eager to help out; totally stoked that I actually bought property in LA! I was quickly recruited to join the board and happy to do so. The following year, I took the position of Secretary, seeing as I had wicked good note-taking skills from many years as a coordinator. Over the next four years, the core five board members changed little.

The time came when our president had had enough (looking back, I suspect he experienced the same burnout), no one else wanted the job, so I stepped in. Jump to today, nearly three years later, and I’ll say that I’ve been a pretty damn good president. I’m organized, pay attention to details, and don’t let things slide through the cracks. But these past few years have brought an onslaught of issues that have worn me down.

We’ve had a major construction project lasting more than two years, asbestos abatement, an emergency assessment, two liens, one foreclosure, several owner deaths, bursting pipes, and even a five page nasty letter about a board member mailed to all residents (don’t get me started on that one). It’s like having a part-time job that I do for free and don’t like.

During my HOA tenure, I have experienced a good amount of satisfaction knowing that my time and effort contributes to building a better community, as well as protecting the financial investment of my condo. This time last year, I was also ready to quit, but the other board members asked me to stay and I begrudgingly agreed in order to help wrap up a few big projects. Since then, I see myself getting annoyed easily during our monthly meetings and frustrated with each email or phone call about another random problem to solve . I just don’t want to do this anymore.

I expect that it will again be difficult to leave this year; no one else wants to be president, let alone on the board. But this time around, I will not cave! I won’t let guilt convince me to do something I don’t want to do. I’ve given so much of my time and now it’s someone else’s turn to step up.

But this will not be the end of my volunteerism. I feel it’s important to shift focus from something that mainly benefits me to working for the benefit of others. In the wake of last week’s presidential election, there are an overwhelming amount of charities that need support in the form of time or money. As a fan of Last Week Tonight with John Oliver, I’d like to throw out his suggestions of where one can start here.

I’m excited to move on from this project that no longer brings me satisfaction to one that could make a difference to someone more in need. I could use a state of mind shift right about now.

(Image: Herman Turnip)

Bimonthly Savings Update – November 2016

Just when you thought I may have disappeared forever, I’m back with another savings update! For the last several months, my creative blogging juices have dried up. I was questioning where to go with this project and if it’s worth my time and effort.

Then yesterday, right after my morning meditation (which I’ll tell you more about in a later post), I got inspiration on some new ideas and decided to shit (and not get off the pot)! Future posts will not likely be weekly, but they will keep coming on topics related to money, health, and living my best life. How awesome is that?!

So let’s get back on track with this update! I’m a bit surprised that my investment accounts are down a bit since September, but my overall savings amount, home value, and net worth have minutely changed. My main emergency savings recently took a dip due to paying my property taxes.

monthly_11_06_16

Home value: $389,020

Current net worth: $341,796