Fiscal Friday: A Money Order of Preference

CodeMonkey gets paid twice a month; I collect UI every Thursday, and we both freelance. All these taken together mean we can have 15 or more deposits in a single month. Since our income can swing wildly from month to month, I like to have only one financial goal to focus on at a time. After a few years of trial and error, I've settled on a system for managing our income. Whenever new income comes in, I go through the following mental flowchart.

1. Money goes into the checking account from freelancing, paychecks, unemployment, tax refund, birthday gifts, whatever.
2. Replenish the checking account balance to $700 for direct debited bills and ATM withdrawals. Is there money left over? If YES, proceed to step 3.
3. Set aside next month’s rent money. Is there money left over? If YES, proceed to step 4.
4. Pay off the credit card balance. Is there money left over? If YES, proceed to step 5.
5. Check savings account balance. Is there six months* of living expenses in there? Add money until there is. Is there money left over? If YES, proceed to step 6.
6. Check your Roth IRAs. Have they been fully funded for the year? Add money until they have. Is there money left over? If YES, proceed to step 7.
7. Check books for self employed businesses. How much has your business netted after expenses this year? Do you have all that money set aside to put into your solo 401ks come tax time? Add money until you do. Is there money left over? If YES, proceed to step 8.
8. Do you have a down payment for an apartment? Add money until you do. Is there money left over? If YES, proceed to step 9.
9. Treat family to a moderately priced dinner out and invest whatever is left.

Every month my goal is to have the credit card zeroes out and next month's rent set aside by the 15th of the month so that the other half of our income can be saved and invested, though this doesn't always happen. Right now our big goal is step 7, but come the beginning of 2014, we'll be back to funding our IRAs again.

This system has a number of advantages. Because I’m only focusing on one goal at a time, I see progress very quickly. When we were paying off my student loans, it was really empowering to see the balance drop by a couple thousand dollars a month. If I’d been splitting that money toward multiple goals, it wouldn’t have had the same psychological impact.

*I'm really not sold on the six month emergency fund thing, as I've never had an emergency that comes close to that. Right now we have medical insurance plans with $10,000 per person deductibles, but come January 2014, I may take enough out of this fund to meet our 2014 IRA contributions in one go.

I Kind of Hate My Life Right Now

I'm one of those people who likes plans. The hardest two years of my life were after college, when CodeMonkey and I were newlyweds living apart while he finished college and did a fellowship and I lived with my parents and worked. It wasn't the separation that made it painful, but rather the constant feeling of being in transition, as though we were waiting for our real lives as husband and wife to begin.

Right now is another such transition. CodeMonkey is transitioning out of being a CodeMonkey into another field entirely. He's doing a great job, still supporting us, and everybody seems confident he'll be a smashing success in his new career, but it's still hard to be waiting. I'm unemployed and I honestly have no idea what I want out of my life, personally or professionally. All of this is ruining my motivation to job search as I get wrapped up in trying to figure out what the heck I want instead of just applying to jobs and getting out there and talking to people to learn more about my options.

I'm not coping well with the reality that I don't know what either of our lives will look like a year from now. I don't know what the solution is aside from trying to put the anxiety out of my mind and doubling down on my job search.

Fiscal Friday: Talk Is Cheap

If you ask parents if they value their children's education, they will, to a one, say it's very important to them. After all, who is against education? It's like being opposed to kittens and flowers and sunshine.

But consider three demographically identical families who say they value their children's education and what the children do between 3:30 when school ends, and 8:30 when they go to bed:

1. Family A's children go to sports practice for a couple hours, then eat dinner, spend an hour on homework, and then watch some TV before bed.
2. Family B's children come home, do their homework, eat dinner, and spend the rest of the evening playing indoors before bed.
3. Family C's children go to a math tutoring center for an hour after school, do some homework, eat dinner, go over material taught earlier in the term, review the notes from the tutoring center, read a book for a little bit and then go to bed.

Despite all ostensibly sharing the same values, Families A and C clearly have very different childrearing philosophies and place a very different value on education. That isn't bad (and there's good evidence to suggest playing team sports helps kids prepare for the workforce in important ways), but it brings up an important point. What people say is important to them is less important than how they act.

By the same token, pretty much everybody believes financial solvency is good, and their vision of The Good Life includes material prosperity. That isn't debatable; everyone would like to be well off. The more pressing question is: does what you do on a daily basis move you toward this? What will your sacrifice to attain it? Because that is the real measure of your priorities. Economics deals with the problem of scarcity, and how we choose to allocate our scarcest resources shows what we think is most essential. The question is not "What would you do with all the time and money in the world," but "Given the need to make tradeoffs and limited time and money right now, what are you doing?"

If the choice is between free time and freelance work, which one are you picking? If the choice is between cooking dinner when you're falling down exhausted or calling for pizza, do you order delivery or grumble, sigh, and put water for pasta on? Do you go on vacation while in student loan debt? Have you bought new clothes instead of hitting the thrift store? Do you indulge in an expensive hobby rather than saving?

I've chosen the less fiscally responsible option in some of these scenarios, as I'm sure most people have. I slashed budget a few months ago because I realized when I was doing wasn't in line with what I really wanted. Once I observed that I was letting my inner lazy toddler ("But I want it, I WANT IT NOW, I WANT IT RIGHT THIS VERY MINUTE!!!") rather than my rational adult self call the shots, I worked to get what I was doing back in line with what I was saying. That doesn't mean I always succeed, but it means what I say and what I do are becoming more aligned, as I had hoped. If you're pursuing any long-term goal, it's worth asking if you're making similar efforts to align your words and behaviors.

Domestic Wednesdays: Designing a Knockoff Sweater

I woke up this morning full of energy! And pep! And motivation to GET THINGS DONE! This is in marked contrast to the last few days where I've been unmotivated, exhausted, and utterly convinced that I'm completely unemployable.

It's also the first exuberantly sunny day we've had in a week. Coincidence? Probably not. Weather has always affected my moods more than most people, and I spend October through April in a sort of black, despairing funk of misery. My grandmother has a diagnosis of seasonal depression and has been pushing me to get one of the special lamps she has, which I should probably look into.

Anyway, Boden released their fall preview collection, I I fell for this sweater, which I'd eyed last year and decided wasn't in my budget. It looks like a lovely, warm, casual sweater, which would fill the niche in my closet that has magically appeared for it. One problem: even with a coupon, it's $80.

On the other hand, I knit! So I decided I'd make my own copy. I dug around in my massive, really it's quite scary yarn stash and came up with this lovely tweedy purple wool-mohair-angora blend yarn.

Looking at the Boden original, I'm guessing it's knit with a slightly finer yarn at 6 stitches to the inch. This was a bit thicker, so I knit a test square and measured. It's 4.625 stitches to the inch, which is called the gauge.

While I was at it, I took my own measurements: 35"-29"-38". Marilyn Monroe I am not. So I grabbed The Knitter's Handy Book of Top Down Sweater Patterns, which is an amazing "recipe book" that allows you to knit a sweater in any size at any gauge. There are patterns for every chest circumference from 26" to 52".

Just one problem: the book's gauges are in whole stitch increments. There's a pattern for a sweater at 5 stitches to the inch and one for a sweater at 4 stitches to the inch, but nothing at 4.625 stitches per inch. So I dusted off my algebra and calculated that if I knit the 5 stitches to the inch sweater pattern in a size 32" at my current gauge of 4.625 spi, the final garment would be 34.59". I'm between a size 6 and 8 in Boden clothes, and the original sweater in those sizes measures 34" and 35.5" around respectively. Since I know I'll be adding a wide button band which will up the finished garment to about 35" at the bust, this looks good.

On the yellow pad of paper above you can see my stitch tallies; I've already started knitting, but it looks pretty shapeless right now. I'll be back next week once I've (hopefully) finished the body of the sweater.

One more thing: this is not a strictly money-saving endeavor. I dug up my receipt from two years ago when I bought the yarn for this sweater, and it was $70. This is one of the more expensive yarns I've ever bought, but the point remains: it really isn't money-saving to make your own clothing. That's without taking into account the cost of your time; this sweater will take me between 10 and 20 hours to make. This is my hobby, though, and I find it a lot of fun.

Monday Sundries: The Days Are Long, The Years Are Short

The Mid-Autumn festival is approaching, and posters for mooncakes are starting to appear.

I can't quite believe that a year ago, I was eating mooncakes in Malaysia with my in-laws. We'd just moved to New York; I'd started a new job and CodeMonkey was offered a short-term contract in Malaysia, so he somehow convinced his employer to let him take enough vacation days to fly over and see his family.

A year later, neither of us have the same jobs, we've committed to another year in NYC, and I can't believe this much time has past. The days are long, but the years are short. It's been five years since I met CodeMonkey, four years since I finished college, and three years since I got married. I'm turning 25 in November. When did time start racing by?

I also found an auntie who has super detailed cooking videos on YouTube. If you've ever wanted to make amazing Cantonese food, but didn't have a grandmother to teach you, I'd start here, perhaps with the seasonally appropriate mooncakes? They're on my to-do list.

Fiscal Friday: These Are Not Investments

I enjoy reading fashion and lifestyle blogs (guilty pleasure) and I've noticed an obnoxious trend. People refer to a pricey pair of shoes, a nice coat, or a fancy piece of furniture as an "investment piece."

No. Investments are appreciating assets or tools that allow you to make money. Clothing, handbags and home furnishings almost always depreciate in value.

I have some nice things: a leather handbag, cashmere stole, and high quality clothes. I like them, and it gives me pleasure to wear and use them regularly. But they aren't investments, and it's a dangerous habit to identify them as such.

Your wardrobe is not an appreciating asset. You will not be able to retire one day on your stash of J Crew pencil skirts, classic black pumps and Kate Spade bags, no matter how timeless they are. Unless you are Macy's, purchasing clothing is not investing; it's consumption. Invest in stocks; consume clothing, and know the difference.

Consumerism Thursday: Needle Bait and Switch

I'm a rather fanatical knitter, and because of my joint problems, I'm very fussy about the tools I use. I only use nickel-plated circular needles with flexible cables and very sharp points. Wood, plastic, bamboo and stainless steel were to sticky for me, and the other nickel brands were blunt, so out of dozens of brands on the market, the only supplier I found with needles that didn't cause me hand pain was Knitpicks.com. They had a lifetime warranty, so when I got a needle that broke or had a rough spot, I'd call and a new one would promptly be dispatched, no questions asked. Everything was lovely and happy for about two years.

Then this winter I ordered a few needles, and they just weren't the same. The points were blunter; the cables were darker and stiffer. Complaints built up in various knitting fora, saying the new wooden needles were more likely to split, that the cables were stiffer and the needles generally more fragile. Someone noticed that the needle packaging now said "Made in China" instead of "Made in India" and we concluded Knitpicks had changed suppliers without telling anyone. The manufacturer studiously ignored the complaints until about a month ago, when they sent this to their mailing list:

Forgive me, but this is the biggest piece of corporate bullshit double-speak I've ever seen. It's more like: "Thanks to savvy and subtle manufacturing improvements moving our manufacturing from India to China, we're now able to offer the same beautiful product, crappier needles that only visually resemble their Indian-made counterparts at an even more beautiful price a much lower price, while we capitalize on our customers' naive assumption that these needles are the same ones we've always sold. Cha-ching!"

I've long liked Knitpicks because their low prices let people try high-quality, natural fiber yarns which might otherwise be unaffordable. Most of my stash is Knitpicks yarn, and I've been very happy with their products, but I doubt if I'll ever buy from them again. I am not impressed by these kind of underhanded tactics. (Not that I need more yarn in any event.)

There is a happy ending to this story. The Indian factory had gone into business on their own, and now manufactures the same needles with only cosmetic differences, to the old quality standards, with a lifetime guarantee and a vastly expanded product line, under the name Knitter's Pride. Check your local yarn store or Ebay for them. I've been using some and they're just like the old Knitpicks needles.

ETA: In what is obviously a sadistic joke, Knitpicks released a new yarn line today that I'm totally in love with.