Watch Your Back Lending Club, Prosper is Back, at least in California

It felt like Prosper was in a quiet period longer than George Bush was in office, but the P2P lending site is now back online. I've invested with both Prosper and Lending Club, so I'm excited to continue my trial of both services to determine which is better.

The relaunch brings about some changes for Prosper. Most notably, the site has a new service that will help financial institutions take loans they've already made and resell them to Prosper investors.

Wait a minute... that kind of sounds like they're trying to sell US their toxic assets. Hopefully they're also offering up high-quality loans where personal lenders can get a piece of the action.

According to the Wall Street Journal, Prosper investors benefit with potentially higher interest rates on loans that have already been vetted by a financial institution, are current and have at least three months of payments that have already been made.

Still, risks are inevitable when you're lending to who knows who, regardless of their credit score (uh, speaking of that risk, an "A" rating loan that I had going on Prosper for a while just went late 4 of My Loans on Prosper are now Late (not counting the one that already defaulted) -- 3 of those 4 Loans are "A" rated and one is "B" rated -- they were fine before Prosper relaunched - wonder if they hadn't been updating defaults in their quiet period. Starting to think P2P lending is a bad idea!)

According to the WSJ, the average lender return since the company's inception in 2006 is 2.8%, after defaults. But since March 2007, when the company starting providing more information about borrowers' credit and employment histories, average lender returns have improved to 4.8%.

Since Prosper's Securities and Exchange Commission registration process is still going on, it is operating under an intra-state exemption from the California Department of Corporations. That means that, for now, only California residents and businesses will be able to lend or invest in Prosper loans, although borrowers nationwide can apply for a loan. Once the company completes its registration process, other financial institutions and lenders in other states will follow, says Chris Larsen, Prosper's chief executive.

Haven't read anything yet about that ridiculous $100k networth (beyond your home price) to be a lender, like the rules over at Lending Club. I wonder if Prosper has added that in the fine print. I'll let you know if I find out anything more.

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Mint.com Launches Financial Fitness Feature: Interview w/ CEO

Mint launched a cool new feature today that helps you plan your financial fitness strategy. Y'all know I've been a fan of Mint since their private beta in 2007, and it has been exciting to see them grow over the past few years.

The new feature is brilliant from a business standpoint for them. Continuing on their money-making concept of high-profit referrals to financial accounts, the financial fitness tool suggests places to tune up your fiscal health. I hate the term win-win situation when describing product features, but if there ever was one it would be this, and all of the related features Mint rolls out.

Mint CEO Aaron Patzer took the time to chat with me via phone yesterday to show me the new feature and answer my questions.

The new feature is basically a page that offers 12 different steps to get your finances in order, and you get points and other sorts of rewards for getting closer to your goals. Game theory at its finest. For us personal finance bloggers / blog readers, the steps are not enlightening in their own right. (Check your credit report. Get cheap health insurance. Set up an emergency fund. Pay off debt.) But what is really neat about this feature is that Mint can access your bank accounts and tell you exactly what you need to do where to get financially fit.

Patzer admits this feature is designed mostly for 20-somethings who are in debt and not 30 or 40 somethings who have more complicated finances, adding that in the future they will add even more features to help people without debt look at ways to grow their networth and invest.

"The next phase of Mint is financial goals," Patzer told me. "It's what do I want, when do I want it? I want to retire by 50, put my kids through college, what are trade offs for all those goals, what do I have to save each month in order to achieve them. How can Mint help me find ways to save for my longer term goals?"

(I'm looking forward to that!)

I grilled Patzer a little bit on if the offers are really the best for the users (or just the ones they'd make the most profit on) and he said that they do get offers that are actually good for users -- for instance, they went with Annual Credit Report which is "truely free" as opposed to FreeCreditReport.com which costs money after seven days.

With 1.1 million registered users, it looks like Mint won't be going anywhere. While there are lots of other personal finance startups out there, their only real competitor these days seems to be Quicken Online. But that product, while similar, is really suited for a different audience... one that's older, and that might not be so hip to the web. Plus, 40% of Mint's users are using their recently-launched iPhone app. (That actually says a lot about the type of person who would use Mint, since the iPhone crowd, which I don't currently belong to, is definitely a cult-like group of uber hipness.)

One interesting point Patzer noted is that their female adoption has gone up since they launched - it started out as 85% guys, 15% gals and now they're at a 60/40 split. Count my mom in to that mix, I signed her up for Mint and am teaching her the ropes of personal finance that she needs to learn now that my dad has taken ill. It's also nice to hear that other women are really getting empowered to take charge of their finances with the help of Mint.

"Even if you go to Quicken Online or Microsoft money, the color scheme, product design... the way it's positioned is for 45 to 60 year old man that has a half million dollar networth and manages stocks all the time," said Patzer. "Mint is really more about where do you spend your money, where do you cut back, and that appeals to a younger audience and to women."

There are still some features I hope Mint adds, and some kinks that need to be worked out, but overall I'm still a fan. Will keep y'all posted on new features they roll out, as long as they keep me posted. Thanks to their PR firm for reaching out to little 'ol me for the interview, and for Patzer to take time out of his busy schedule to chat.

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When to Get My Hair Cut

My hair is growing. It's longer than it has ever been (as in, my mom never let it get this long as a kid with my trim every 6 weeks, so I just assumed it couldn't grow past my shoulders). I like having it long, my boyfriend likes it long, but at some point it needs to be cut. I can't figure out if I'm imagining these dead ends or not, but I'm getting to the point where I want to go get my $60 hair cut and be done with it.

Last time I posted about hair cutting costs - The Cost of Having Pretty Hair, I got quite a bit of feedback. Everyone debated whether that six week trim was worth it. For me, I tend to do a 20ish week trim. I try to get my overpriced hair cut twice a year to keep my mane in check. As a professional woman, I wonder if that is enough. Or do I look dowdy?

Given that my goal is to save $20k this year, every cent does count. If I can pick up a few more side projects I could offset the cost of a hair cut, easy. But I'm still already behind in my $20k quest. Makes me want to shave off my hair entirely.

So, ladies, how often is too long to go without a hair cut?

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The Carnival of Wealth, Money and Life: Spring Fling Edition

Welcome to the (slightly belated) April 25, 2009 edition of Carnival of Wealth, Money and Life. The economy may not exactly be blossoming, but as April showers bring May flowers, wise investing during the gloomy recession may lead to a great crop when the stock market stops getting rained on by sour economic reports.

This edition takes a look at ways to best prepare for that recovery...

WEALTH

Matthew Paulson helps with tips on How to Choose a Good Financial Advisor posted at American Consumer News.

Summer Munyon offers up tips on How To Find The Bottom Of The Real Estate Market posted at Tallahassee Real Estate Blog, saying, "If you want to know the beginning of the next phase of the market turn, just keep an eye on the green line in the graph below. You can visit this graph (updated twice per week) at The Market Bulletin."

Darwin presents 6 Prudent Uses for your Tax Refund This Year posted at Darwin's Finance, saying, "How to avoid squandering a great opportunity: 6 prudent uses for this year's tax refund."

Dividends4Life presents Who is Irving Kahn and Why Should We Listen to Him? posted at Dividends Value, saying, "Comfort in your investing process only comes from having been there before and experiencing the gains after coming out of a downturn. Today we have the opportunity to learn from the experiences of someone who has lived through many downturns and profited from it."

Get to know more about investing when bargains in the market are abundant. MoneyNing presents Ins and Outs of a Stock Exchange posted at Investing School, saying, "Stock exchanges perform a critical function in the world of trading. Find out what they do by going through the article." As the stock market goes through turbulent fluctuations en route to recovery, you may want to check out Verna Morris' The Definitive Inverse ETF Guide posted at ETFdb. cody butler presents What Is Forex Trading? posted at Investment-For-Beginners Blog, saying, "An introduction to the basics of forex trading." Nesher presents Global Watch List to monitor your trades from around the globe posted at Internet Stock Trading for Beginners. Silicon Valley Blogger presents Best Online Stock Brokers For Cheap Stock Trades posted at The Digerati Life.

Sarah Scrafford presents 100 Lectures That Will Teach You to Be Rich posted at Clear View Education Blog.

MONEY

Looking for cash-saving tips? Gregory E. Rouse presents Family Meals for Under $5 posted at Frugal-Living-Skills Blog. Lindsay presents Home Brewing to Save Money (and have fun) posted at Off the Urban Grid. Lulu presents Save Money By Packing Your Own Snacks posted at How I Save Money.net, saying, "Small savings add up over time." Wren Caulfield presents Why Commute by Bike? posted at True Adventures in Money Hacking, saying, "How biking to work can save you money and improve your health and well-being." Joseph presents Budgeting Tips posted at Penny Pinching. Michael Gvirtzman presents Expense Allocation Between Wants and Needs posted at Mind Listings, saying, "Discusses expense distribution between golden categories: needs, wants, savings."

Teach your kids about money starting today. Madison presents Summer Jobs for Kids - Ideas for Summer Jobs for Kids posted at Kids and Money.

Kim Staudenraus writes Feeding the Vending Machines posted at Tranquility Financial Visioning, saying, "Do you really know where you money goes each month? Many lose track of a dollar here and there from vending machine purchases. But is it really a dollar or two?"

Chris presents Is my money safe in a bank? posted at Home I Own.

MoneyEnergy presents Goals on Fire: The Link Between Personal Finance and Positive Thinking posted at MoneyEnergy.


Jeff Rose writes on Managing Your Money While Deployed, One Soldier’s Story posted at Jeff Rose.

debt kid wants to know What Would You Do with a $5000 Interest-Free Loan? posted at DebtKid.

Andrew Peel asks How Will You Manage Your Money After The Recession? posted at APeel Solutions Blog, saying, "President Obama has endorsed them, Donald Trump has so has Robert Kiyosaki. What are they? Small businesses is the answer. In particular online home businesses. The main reason some heavy hitters back them is because they have a global reach from your home PC. But do you know how to get wealthy and stay wealthy?"

Clair Schwan writes a post on How to Make More Money - at work at Frugal Living Freedom, saying, "Here are some ideas about how to make more money as an employee of another. That's where most of us fit in, so it's reasonable to know some of the ways that we can earn more without the need for another job or an enterprise of our own."

Finance Tips 101 fills us in on how Scholarships Come In All Shapes And Sizes posted at Finance Tips 101.

Mark Aucamp writes Credit crunch means talking about money and the lack of it posted at Money Saving Tips, Consumer Finance, Expert, Advice and Help | Talk Money Blog, saying, "It’s not difficult to get involved with the debate about the credit crunch and the current national and global recession."

Want to learn more about credit cards? jim presents Understanding FICO Credit Scores posted at Blueprint for Financial Prosperity. Debt Free Destiny informs us Why Repairing Your Credit Makes Sense and Saves You Money posted at Debt Free Destiny. Joseph presents Understanding Credit Repair Is Very Important posted at How To Raise My Credit Score.

Savings Toolbox presents Property and Casualty Insurance - What You Should Know posted at Savings Toolbox.


LIFE

Corbett Barr presents How you can live the good life without being independently wealthy or retired posted at Free Pursuits.

nickel offers up advice on How to Protect Yourself from Identity Theft and E-mail Scams posted at fivecentnickel.com.

Leave Debt Behind asks Are You Responsible for Your Deceased Parents Debt? posted at Leave Debt Behind.

Billeater presents Electric Choice- Compare Electric Providers, Switch and Save posted at Billeater.

Joel Gray gives tips on staying healthy: 24 Hour Fitness - For Today's Fast Paced Lifestyle posted at Health Tips 101. Gal Josefsberg presents Five Quick Ways To Save Money By Being Healthy posted at 60 IN 3, saying, "Wealth is not a prerequisite for health. Join me and learn a few simple ways in which being healthy can save you money."

Mikkal Travvis presents How To Start An Organic Garden posted at Organic Health.

kathryn says it's important to Treat Yourself to a Free (Or Cheap!) Treat posted at Out of Debt Christian, saying, "Economy got you down? Pay a huge tax bill last week? Or just feeling the need for a special treat? This is your week! Here are three great free (or super cheap) treats to take advantage of..."

Samir Bharadwaj presents Taking Stock of Your Life in Short Text Messages posted at Samir Bharadwaj dot Com, saying, "Taking stock of where you have come from and where you are heading is a required activity, a milestone along your continuing journey. Here is one way of going about it, and asking the right questions."

Patrick @ Cash Money Life presents How Much Life Insurance Do You Need? posted at Cash Money Life, saying, "Life insurance is essential for protecting your family against the worst thing possible. Be sure to insure yourself."

Dorian Wales presents Challenging Happiness – Exploring the Irony of Human Nature posted at The Personal Financier, saying, "The irony of human nature - anxiety for those that have everything and depression for those that have nothing."

Michael Miles presents Freedom and choice posted at Effortless Wealth and Abundance.

That concludes this edition. Submit your blog article to the next edition of
carnival of wealth, money and life
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Studying for the GRE Test

I took the GRE in 2005 and scored a measly 1040. While I'm not the best test taker, my skills weren't that bad when I took the SAT years ago and got a 1240. My writing score on the GRE was also really awful considering that writing is what I do for a living. Then again, I've never been good at academic writing, so I wasn't too surprised.

That's why I've decided to retake the test and study MAO for it. At the very least, see how much I can improve my score by studying. I'm not too hopeful about the verbal or writing sections, but I'm pretty sure I can up my quantitative score if I study. I just forgot damn near everything about math... I haven't even taken a real math course since 11th grade (I don't count the Excel math class I took in college, what a joke!)

In the meantime, I really ought to start researching all the school's I'm going to apply to, and more importantly, how on earth I will be able to afford them. I think that grad school would be ideal for me now, I'm much more mature than I was in undergrad, I'm ready to focus on learning about the topic I'm interested in, and also understand how it could benefit my professional life once I get through the program.

So... this summer I will be studying in my free time. I don't want to spend a lot of money on those prep classes, that sounds like it would be such a waste. Maybe I'm wrong about that. I'm not sure what my ideal score would be, but given my 1240 on the SAT I'd like to at least get that on the GRE (though I know it is a different test.) And the writing section... I got a 4/6, I really should get a 5/6. But... 1240 isn't really a good score for the GRE. It would be great if I could do really well... 1450 or something. I've never really studied for one of these tests before (I didn't study for the SAT at all), I'm curious what I could do if I try.

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My Net Worth Post 2008 Taxes

My networth definitely improved in the past year, despite the massive losses in the stock market. Now that my taxes are paid, my networth stands at $29,082.11 not counting my piece-o-crap car.

I started recording my networth on June 21, 2007. At that time, I had $25.7k. That was also the year I was very unwise with my finances, before I got myself in check. By 10/8/2008 my networth was just $13.9k. Granted, I was over estimating on my taxes for 2008, but my spending habits had yet to improve in order to have my networth return to the state it was at before I spent too much money on travel and other things.

This year, my income should increase (as long as I can keep my job all year) which means I have no excuse to let my networth drop. In fact, I'm setting some pretty high goals for myself this year (which are largely dependent on if and how quickly the stock market recovers, but I can still save smartly and do well.)

I'd really like to save $20k this year, so that my networth by April 15, 2010 is $49k. Is that do-able? I probably would need to cut out all my extra expenses such as voice lessons. I was thinking of calling it quits on those in July since they cost $160 a month. But I also wanted to start taking some other courses that were more in line with my future grad school plans, and those cost even more. So I go back and forth on whether I should really focus on increasing my networth (so I can pay for most of grad school up front) or if I should just spend it on classes now so I can get into a good grad school. Hmm. And the question remains, do I even really want to go to grad school? I'm still not clear on this.

I did some quick calculations and to meet my goal I need to take in approx $300 extra post-tax per month through freelance projects (do-able with current blogging gig, where I can make $600 a month pre-tax, as long as that lasts) and I can spend, at most, $1600 per month. That should be do-able, right? I've been spending quite a bit more than that per month, but I'm going to see if I can cut costs and get down to that $1600 per month target. Will track my progress on here. Wish me luck! (oh, and I am not going to count April because I'm already way over due to some spring shopping and my boyfriend's birthday gift. This is starting today, the new, really frugal me.)

**my average monthly spending for from March 2008 to March 2009 was $2279.30
So I'll need to whack off another $679 per month to meet my goals.

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Broke Piggy Teaches Teens About Money Matters

Y'all know I'm a huge supporter of teaching your kids / teens / self about personal finance early (long before you rack up huge debt), so I wanted to let you guys know about a new site launching today called BrokePiggy.com. Broke Piggy's goal is to help teens learn "the ropes of personal finance." Site founder Grant Baldwin is also the author of Reality Check, a book about helping students transition into the real world.

I chatted a bit with Baldwin about his site, why he put it together, and what BrokePiggy is all about. Here's what he said...


HECC: What inspired you to launch Broke Piggy?

Balwin: As a youth speaker and author, I see firsthand the challenges facing teenagers today. By the time they graduate, students are very educated in the usual subjects but unfortunately are taught little to nothing about personal finance. You look at what is going on in the economy today, and I got to believe that some of that has to do with people who are uneducated about how to handle their money. I hope that Broke Piggy provides a place to not only educate students about money but helps them find the answers to the questions they're asking.

HECC: What do you think is the hardest part about educating teens about finance?

Baldwin: The challenges with personal finance for teenagers are the same challenges facing adults. I think issues like personal responsibility for your finances and learning to delay gratification are two big ones. Everyone is looking for a bailout in today's economy, but I hope to challenge students to take responsibility for their own life regardless of their situation. In addition, no matter how old you are, we all want what we want, and we want it now! We hope to teach students to do what you have to do so you can do what you want to do.


HECC: What other resources do you recommend for teens (and anyone else) to learn about personal finance? (websites, books, people, etc)

Baldwin: There is certainly no shortage of resources available for the subject of personal finance. Unfortunately, only a small number of those are directed at teenagers. I like Dave Ramsey and what he teaches. Suze Orman has some solid thoughts directed at teens and 20-somethings, although I don't agree with all of her philosophies. And of course there are several blogs I follow on the subject. The Helpful Links section on Broke Piggy has more of my favorites.

HECC: What do you wish you knew when you were a teen that you didn't about personal finance?

Baldwin: I'm of the mindset that there isn't really anything I would change about my life. Because each and every moment of life (both good and bad) have helped and shape who I am today. If I had never gone $25,000+ into debt, I may never have grasped the significance of teaching students about money.

HECC: How should parents educate their kids about finance? Any tips?

Baldwin: One of the biggest things parents need to know is it's never too late to start educating their kids about money. You don't have to have a Masters degree in Finance to help your teens learn about money. Money is something every single one of us deal with, and we've all learned a thing or two about what to do and what not to do. Be honest and transparent with your teens, and teach them from your experience. Teach them how to budget, pay bills, prepare their taxes, and other "adult" stuff that they may not learn elsewhere.

HECC: Is it ever too late to learn about personal finance? What about for 20-somethings who are currently deep in debt?

Baldwin: Of course it's never too late! Unfortunately by the time most of us figure out what we need to know about personal finance, we feel like it's too late. We're left wondering why no one told us this information before! Again, that's where BrokePiggy.com is trying to bridge the gap. We all have to start somewhere and some people learn about this stuff sooner than others. Whether you're 15, 25, or 85, you still need to know how to handle money. Start where you're at.

HECC: What can the current state of the economy teach us about personal finance? Is the recession a good thing for youngins?

Baldwin: Our current economy can teach us that personal finance is a big deal. Sure there are banks and major companies that have a large hand in this, but much of it comes down to you and I making poor decisions about how we handle our money on a daily basis. If we handled our money better, we wouldn't buy things when we didn't have the money. We wouldn't take out mortgages we couldn't afford. We would save, invest, plan, and do things that now we realize we should have been doing all along. I think a recession is good for everyone, because it gets our attention, wakes us up, and shows us we need to pay attention to how we handle our money.

HECC: Where do you see brokepiggy.com in 1-2 years -- any larger plans for the site? What are your goals?

Baldwin: To be honest, I'm not sure yet. Right now, I know students have questions about handling money, and I hope BrokePiggy.com can be the place where they can find answers. I love what I get to do as a speaker and author for teens, and I hope that BrokePiggy.com can be an extension of that work.

HECC: What's one personal finance tip (140 characters or less, tweet style) that you'd impart if you could only give just one?

Baldwin: Avoid debt...live on less than you make...use a budget...START NOW!

HECC: Where are you at, personally, regarding finance. Do you have any goals / regrets lately with your own personal finance journey?

Baldwin: It was just a few years ago that my wife and I had accumulated $25,000 worth of debt in various forms. It took us two years of hard work and sacrifice, but we were able to pay off every dime of that debt. That experience taught us a lot and helped shape who we are. I do have several goals for my personal finances as well as my business as a speaker. So far, 2009 has been a great year!

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Is Materialism the Devil Incarnate?

My fondest memories of childhood involve spending hours in the dressing room at the mall, with my mother bringing in yet another outfit to try on, then leaving each store with a few bags in hand, filled with my purchases for the day.

This is capitalism at its finest.

Are humans born innately greedy? Not all of us want to possess lavishly adorned lifestyles, but accumulating something provides a security blanket, plus something to show to lure in our partners.

My boyfriend has no desire to be rich or to buy new things (except the occasional expensive tech gadget). He wants to save up enough money so he can quit working, live on a commune, meditate, stare off into the mountains, and I'll admit his lack of motivation to achieve materialistic wealth drives me nuts. Why? Because I am a materialistic person. I was raised that way.

Of course I can change. I can be happy with nothing or very little. I don't need a new pair of shoes, but lord knows I want them.

All of this, dear readers, is in response to a post over at Get Rich Slowly entitled: 84 Year Old Social Worker Saves $1.4 Million.. The woman was frugal, but only because she didn't care about fancy possessions. She paid for her house in cash. She drove a 30 year old car. She didn't care about having the latest and greatest. Those who grew up during the Great Depression tend to live this way. Case in point, my boyfriend's grandparents, who horde everything they've ever obtained, have a house that's falling apart, drive cars that should be breaking down... any... minute... barely use any electricity, and while I don't know for a fact, I'd bet they're worth a small fortune. They worked. They didn't spend. They saved.

That leads me to a related topic: Dubai. What on earth does Dubai have to do with all of this, you ask? I read a very interesting (and very long) article last night titled "The Dark Side of Dubai" - a controversial opinion piece published in The Independent. Don't let it's novel-length scare you, it's worth reading from top to finish.

Dubai - at least from this writers point of view - is capitalism (minus the democracy) at its worst. Those who are rich become very rich, those who are poor are indebted and end up in jail or are basically unwilling indentured servants. Dubai is a surreal city that has been built to be an adult playground. The party capital of the middle eastern world, no longer an oxy-moron. Shopping malls and hotels piercing the sky. Luxury at its finest.

While Dubai may be an extreme case -- if the article is true -- this type of upper class gets richer and lower class gets poorer has been going on for decades. Even as I write this, I have workers being paid $2 per hour on the otherside of the world completing projects for me. When it comes down to it, capitalism is about cutting costs as much as possible so those who have can have more, and those who have not never shall have. It's a vicious cycle. Democracy helps swing the pendulum in the direction of "fairness." Human rights groups protest cruelty to citizens of the world. People who are hurt by people who don't want to drive 30 year old cars.

Granted there are many shades of gray when it comes to greed. But we're all guilty of it. If we weren't greedy, our society as we know it would collapse. We need greed so jobs can exist. So innovation can occur. Buy now, go into debt, pay later, and on and on.

I'm not caught up in the debt cycle, fortunately, but still feel this strong urge to spend. I drive past the day laborers every day on my way to work - who are likely illegal immigrants from Mexico waiting around for a job. Loitering. They are free not to do this (the main difference between America and Dubai here) but still... when people are hungry, when their families are hungry, they need the work. So they wait. I drive past the hordes of men who look to my car waiting to see if I will stop with a job. I head off to my cushy office and middle class-paying job where I'll never work as hard as they would between dawn and dusk. I accept my greed, feel uncomfortable spending time with people lacking this greed (my boyfriend) and those who are extremely greedy and superficial (those who just want to make money to buy the world).

I am afraid that the horrors of Dubai and the greed that built the city are within my cultural DNA. I'll save and I'll spend, and I'll use the resources of the world to get ahead. And I wonder if that is so terrible - when so many people out there do this without stopping to think that this whole equation might be wrong.

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Worried About My Tax Return

Just as a special report on the news warned that the IRS is going to be closely watching - and possibly auditing - anyone who files their returns online I was... filing my return on line. While I don't think I'm going to end up in jail, I am very nervous about potential costs if my understanding of the rules isn't quite accurate.

2008 was my first (and possibly last) year as a self-employed individual. The most confusing part of the return has to do with the mileage expenses. I worked a bunch of different jobs last year, and over the year the main one grew into one that required, in my contract, for me to be at the office 4 days per week. So - I assume it's ok to take that as a mileage deduction. I also deducted - guesstimated - my mileage to and from a few other clients who are further away from my office.

Then I read the fine print - you aren't allowed to take a deduction on transit to your office if it's away from home. But - my office was my home, I just didn't take a home office deduction because I lived in a studio and worked from my bed. But I could do all of my work from my bed (as a freelance writer) and did not need to travel to accomplish this work 4 days per week. I went into the office for meetings, and just because my contract said I had to be there. I'm not sure anyone has a record of how often I was actually in the office, but I do have proof that for at least 1/2 of 2008 I was required to commute 4 days per week.

But then that's what confuses me about the fine print - it says if your office is away from your home, you cannot deduct mileage to drive to this office. So am I not allowed to deduct these expenses? Or does this mean only if you pay for your office away from home and deduct that separately? Ugh.

I really hope I don't get audited but I have a bad feeling about this year. I reported all of my income and interest, it's just the deductions that could possibly screw me over.

In related "potentially screw me over" news -- I transferred the funds to cover my $14k tax payment from ING to Bank of America on Friday, but it hasn't arrive in my BoA account yet. Here's to hoping it will show up by April 15, when TurboTax will be removing the funds from my account. (ING said it takes 2 business days so it should be there tomorrow, fingers crossed.)

Happier news - it looks like I managed to save about $15k last year beyond taxes. Which may end up going to a lawyer and tax accountant to deal with an audit, if they want to fight me on my mileage deduction. I'm scurred.

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Passing Down Wealth From Generation to Generation

My father is dying of cancer and has a short time left to live. While his health is ok now, his medicines will stop working at some point over the next few years and from then on the cancer will take over and he will get sicker until he passes.

This post is not about my father's health, but it's important to note to put this into context.

Previously, many of my readers have left comments offended by a post I wrote about expecting an inheritance. A conversation I had with my dad this weekend over the phone continues this topic.

He told me how "I" need to get my mother to understand that she needs to live off the interest on the 401k. They get $7000 a month and there is no reason that they can't live on that. (My mom is a spendaholic.)

My dad went on to tell me how he spent his whole life building wealth for the family so it could be passed down to his kids (me and my sister) and that we could pass it down to our children. Both him and my mother grew up in the lower middle class and did not have wealth. Their parents will not be passing down a great deal to them. So he wanted to build wealth up for our family, for the future. He wasn't trying to make my sister or I rich, but he did want to make sure we didn't have to worry about not having enough funds to get us through life. Once you have wealth, living off the interest becomes feasible. It's not about luxury, but it is about having a lofty security blanket for your family - as in - your children and their children and so on.

But it makes me sick to my stomach to think about how in the future, I will be in such an odd spot -- when my father passes, it will be up to me to try to make sure his dream lives on. Yet that dream is for my sister and I to obtain an inheritance. My sister has a learning disability and while she can comprehend some of this she is also younger and I don't think she will understand a great deal of the financial situation (other than wanting the money.) My mother will want to spend it all. I understand finances, saving, living off interest - I could probably teach my mother to do this, but ultimately it would be so that I could get money after she dies.

My mom didn't work once I was born, so all of the money in savings is from my dad's years of working many hours to build this wealth. On one hand I feel the responsibility to make sure that the reason my dad worked so hard his whole life (probably causing unnecessary stress and part of the reason he gained so much weight and got sick) lives on, and part of me feels like this isn't really my business at all besides making sure my mom doesn't spend everything too quickly - she does need enough money to survive for many years. She's in her mid 50s so hopefully she'll be around for a long time.

I do want to make sure my mom doesn't go crazy with spending, but she could very easily live a luxurious life and spend every penny if she wanted to in the future. And who am I to stop her?

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Boyfriend's Birthday Gift... Late, and $100 Cheaper

This year I wanted to get my boyfriend something special for his birthday this year. He has been mentioning how much he wants a guitar every other second, so I figured that would be a good, useful gift to get him. But I know nothing about guitars. My only requirements were that it had to be electric and blue, and cost anywhere from $300 to $600.

With a little research I learned that decent guitars start out at $1200 (Fender American Strat) but as much as I love my boyfriend, I wasn't going to spend that much on his birthday gift. Instead, I did a little more research. I didn't want to buy him a crappo guitar, so I figured I'd spend $700 at most if I could find something decent.

That led me to the Epiphone Les Paul Standard Plus. Knowing nothing of the difference between Gibsons and Fenders, other than the name, the price and reviews seemed right. I looked for it online and found it for $650 w/ free shipping and a one year warranty. I was sold. So I ordered it.

Something went wrong with my order and I'm glad it did. When I went back to reorder it, I found they put it on sale and it was $100 cheaper. Their loss, my gain. Spending $550 was much better than the original $650 pricetag.

The guitar is scheduled to arrive anyday now, but I'm worried I made a stupid move in buying such a pricey gift that may or may not be a good guitar for him. Granted, he's never played guitar before, but a guitar is such a personal thing and he really should go shopping for one. But he didn't want another gift certificate (how boring) and wanted to be surprised with an actual gift. I also didn't get him a Christmas gift so I could save up for a bigger gift for his birthday. And I'm sure he'll love it as far as concept and overall open impact goes, but the guitar may not be right for him.

I think I should have went with the Fender, even though it's like, double the price. He's more of a classic rock kind of guy and upon watching some videos on YouTube about the Fender versus Gibson/ Epiphone, the Fender sounds right for him. Ugh. Well, I guess we can return it (shipping it back will be a bitch though) and he can trade up to the Fender if he wants.

Do any of you know about guitars? Is the Ephiphone Les Paul Standard Plus a decent purchase for a newbie player who likes 60s rock?


Type rest of the post here

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Professional Roadblock

For the first time in my life, I like my job a lot. It pays well, I work with really smart people who I admire, and I've managed to secure a full time gig... which means they like me, or at least the work I do, at least in the sense that I'm not that easily replaceable. All that is good, great, even, yet I'm still not doing exactly what I want to do.

I really want to do a good job for a long enough amount of time to prove I can stick it out. It's just hard because I get a bit frustrated when I have no right to be frustrated. Basically, what I want to do isn't in my job description. It is apparently in everyone else's. I'm also a tad bit annoying in that I haven't mastered the art of speaking yet... I talk too much, I think everyone dislikes me for it, and sometimes I don't talk enough, and then I feel like I just disappear. Why can't I fit on some middle ground so I can be respected AND taken seriously?

All I want to do is design. Do user interaction design, specifically. But I'm completely confused over how I can make the career switch, or if I even should. Grad school seems to be the only possibility, but even that is a far off dream. First of all, I'd have to GET IN to grad school... there are only a few top programs for this new field and each of them are hard to get into. Looking at the people they seem to accept, they want people with experience in the field. While my experience is related, it's definitely not in the field. It's gazing on the field with envy, if anything. Does that count?

My passion is great user experience. I tried to be a writer but I'm not really that great of a writer. I tried marketing but I'm not the best at marketing a product that has all these details that I'd like to tweak. I can fake it. I can fake it all. But in the long run, I don't want to fake it. I want to cease this frustration and have a job where I can actually make a difference in the development of a product as far as the ultimate user experience goes. I'm still thinking an MBA might be a better route to go - get more involved in product strategy, stay out of the details, but then I end up futzing around with wireframes all night dreaming of a day when I could design interfaces for a living. Will that day ever come? And how much debt will I have to take on to see it?

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Shop Till You Drop: My Shopping Addiction

I was a bad girl yesterday. The worst thing is that I chose to go to Lensecrafters for my eye exam instead of my normal place because I don't have vision insurance and their exams were cheaper. Of course, Lensecrafters is in the mall.

I stopped in Macy's just to see if they had anything new. Sometimes I like to try things on and not buy them. But then I fell in love with a pair of designer jeans and all went to shit from there.

Granted, I just found out I saved an extra $10k last year (I saved half my income for taxes, but I'm only going to end up owing part of that) so I wanted to reward myself. I found these jeans and a really nice top from Velvet Brand that I was in love with. $300 right there. But last year I made the decision that if I was going to splurge on something, it has to be something I'll wear for years to come. I know how I work. I used to buy lots of things on sale that I didn't really like, and wear them once or twice. I'd have a lot of clothes and nothing to wear. As an adult, I'm tired of that syndrome.

So I do spend a lot on my clothes. I probably shouldn't. I don't really need more clothes. But I got a little fatter and my clothes aren't fitting as well as I'd like them to. And it's spring/summer and I like buying things because it makes me feel secure. (The truth comes out.)



When I went to make my 2-item purchase the sales lady was SO ANNOYING and pressured me into signing up for a Macy's account. I didn't want to, but she wouldn't shut up so finally I agreed so I could leave. (This was the same lady who spent about 7 minutes complaining about the color name's on clothes when she was helping the customer before me in a longish line.) So I signed up for a Macy's account. This way I could avoid all salespeople asking me to sign up in the future. And that would be a good thing.

The second I sign up she says "you get 15% off any purchase today and tomorrow. Go to the cosmetics counter first!" -- like I was going to buy more clothes because I got a whopping 15% off. But... then I thought about things I wanted to buy. Like a new pair of shoes. For spring. Sandals. Something cute. To go with my new designer jeans. My closed-toe winter Nine West heels weren't quite working for me. And they are getting kind of grungey. So I went to the shoe department. And spent another $100 on shoes. Damage thus far: $400 + 15% back when the bill comes. Whoppie.

At that point I knew I had to leave the store before I spent all the money I saved last year. I made one final stop at Express, where I had planned to pick up a slew of tank tops (which are way cheaper than anything I'd buy at Macy's) that were on sale. I ended up buying about 10 shirts. But - hear me out - 6 of them were "bra tanks" which I need - I realize I more often wear camisoles with sweater jackets than anything else. Then there were some other cute tank tops on sale (buy one get one 50% off) and - being as they were all SO MUCH CHEAPER than what I had previously bought at Macy's I couldn't help myself.

I'm starting to think I should rename my blog "Confessions of a Shopaholic."

Shopping gives me great pleasure. I don't take lavish vacations. I left my studio apartment to live with two other girls and my rent is $600 a month (not bad for northern cali.) So I feel like I deserve some of this shopping pleasure. I work at a place I can dress casual everyday, so I feel a little more justified spending money on my nicer scrubs (aka designer jeans) -- it's not like I can only wear them on weekends.

That said, I'm making a grande effort today to get rid of shit. Yes, all of those clothes I bought on sale years ago that I have trouble giving away... even though I never wear them. It's kind of like a stock loss though, it's only a paper loss until it's gone. I could one day wear them again and fall in love with the garments. But, no, that won't happen. So they're going to charity. For real.

Before you all start hating on my $600 clothing splurge, remember I did save $10k last year. And... so I am a shopaholic, but I also am a save-a-holic. I'm just trying to balance the two out. Meanwhile, the cost of grad school or buying a house seems to be SO BIG that I can't image ever paying for either. Clothes, even $200 designer jeans, are so much more obtainable. I should know. They're in my closet.

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How Will I Pay for Grad School?

It has become increasingly clear to me that in order to pursue the career I want to have, I'll either need a miracle or a masters degree. I'm mostly looking forward to the latter, after all, my undergrad years were tainted by depression, self-doubt, immaturity, and academic confusion. It really is time for me to go back to school, focus on what I want professionally, and hopefully thrive.

The cost of thriving, however, is keeping me questioning if grad school is worth it. There's also plenty of other options that may work out just as well in the long run in terms of my professional life. I can take classes, read lots of books, teach myself, work my way up in the world. But I've done that with my current career and while it's been fun, I don't think I could stand to start from scratch entirely. The programs I'm looking at offer great connections and job prospects (esp if the economy starts picking up by the time I graduate. If it doesn't i'll prob be unemployed anyway.)

All that said, I am still freaked out about the cost of grad school. Sure, as of May I will likely have about $35k in savings, but that's for my retirement and emergency fund. School will cost me about $100k for two years if I count in the cost of living. I may be able to work part time to offset some of those costs, but still, even if I could get it down to just the cost of tuition (about $60k total) that's, like, double what I've been able to save in the past 25 years of my life. And I'll be losing upwards of $120k for two years that I would have made if I remained employed. So the whole thing would cost me $200k or more. Yikes!


Those numbers are enough to keep me out of grad school. I'm so jealous of my boyfriend, who is going to get a free ride to grad school, courtesy of his frugal mother who doesn't spend money on anything. So she's saved up enough for him. In a way I want to pay for myself because it will be worth more. I think my undergrad education felt like a free ride. My parents were paying, it was what I had to do, it wasn't for me, I didn't understand the value of an education in line with my professional development.


Do any of you have experience with 529 plans? They sound like they might be a good idea to start saving for grad school... if the market starts to go up. Esp if I can put in a lot of money now while we're in this recession (I feel really bad for the people who put money in before the recession and lost 30% or more). In California the tax savings on a 529 isn't that great... well you don't get a state tax deduction (same with the HSA) - but you do get the federal deduction. And the money you use for education can be spent tax free. I can't figure out if that's as good of a deal as it sounds.

Also, there is still the chance that there will be a miracle and I won't end up wanting to go to grad school at all. Then my 529 plan will be stuck. I can use it to fund my children's college education - but then I have to have kids. :)

I don't understand how anyone has the balls to go into debt for grad school. Not sure if I do.

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