First Generation with Fiscal Suckage?

Frugal Zeigeist has a great post today about whether we're the "first generation to be worse off than our parents." She writes:

...I'd say that I'm way behind because of the way the work world has changed. My dad worked for a single employer in Canada and a single employer in the US; although he went through reorganizations, I don't think he ever worried about layoffs or downsizing the way I do. He also has traditional pensions both from his years of work in Canada and from working in the US. Between that and Social Security, my parents have never had to touch their retirement savings. -- Frugal Zeitgeist

At my age (24), my parents were living in New York City, renting an apartment. In a couple of years their apartment would go 'co-op,' and they'd buy and sell their place within a few years for enough profit to put a down payment on the house in New Jersey where I grew up.

My mom was a fashion designer, working for fairly low wages, and my father was... well, I think he was a grad student when he was 24. He was going to grad school for physics but dropped out and ended up working as an actuary (pension planner). He stayed with the same company UNTIL HE RETIRED. He obviously had a good pension plan in place as well. My mom... she stopped working as a fashion designer 10 years into her career to have children (waves).

I'm not sure where they were financially at 24. Were they struggling? Possibly. I assume that if my father had started his job as an actuary, his entry-level salary was probably pretty high. And back then it wasn't so painfully expensive to live in a city like New York. Then they got lucky with buying their condo and selling it, and the rest is history.

Looking at where I'm at now, I don't see myself buying a condo anytime soon. It's not that it would be entirely impossible to make enough money to buy a small studio apartment, but I'd have to live extremely frugally and, even more so, I'd have to be sure I want to stay in this area for the foreseeable future. And I'm just not ready to make that kind of commitment.

Then again, the housing market seems to be pretty attractive right now. I don't know a lot about it other than the fact that lots of people are losing their houses because they can't afford their mortgages. That's sad for them, but good for potential buyers.

I don't want to just sit back and watch another housing boom happen without having the opportunity to partake. Still, I don't think I'm ready to buy a condo.

So, instead, I spend $12,600 a year on rent. Ouch.

My 25-year-old boyfriend... he lives at home and works part time. I don't think he's ready to make that commitment either. :X

I wonder how much monthly payment on a studio condo would be. Would that help me be as successful as my parents were at my age?

In any case, Frugal makes this important point:

They key point that this thought exercise brought out for me is this: The rules of the game have changed big-time. In the modern economy, the cards are stacked in such a way that if I'm ever going to be better off than my parents, I can't rely on employers or government to lend a helping hand as a reward for loyalty or years of service. It's definitely possible to end up being better off than my parents ever were, but I have to make it happen on my own. -- Frugal Zeitgeist

Personally I think the opportunity to switch employers and make oneself more of a commodity is to the advantage of the employee. It might hurt when it comes to long-term savings, but salaries (and benefits) are higher if the employee has well-sought skills.

Here's to hoping that my skills will develop into ones that people want to pay me for!


-

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The Bartering Trend

Up until earlier this year, when I thought of the term "bartering" pictures of Pilgrims, the Amish, and even some current third-world countries came to mind. Why "barter" for goods when we have this wonderful thing called paper (and metal) money?

Then I found out that bartering is a great way to exchange services or goods without having to deal with the hassle of money. Unfortunately, the IRS still requires that you report your bartering "income" come tax time. My philosophy? Don't ask, don't tell. Like it? I got the idea from the government. Brilliant, isn't it? If you want to find out more about taxes and bartering, the IRS has lovingly put together a detailed informational page for anyone who wants to report their bartered "earnings".

Right now, my bartering income is quite limited. My freelance business model isn't designed to support itself through bartering, but I decided to try it out. My personal opinion on bartering is that, since it does not involve money, should also not involve the government.

Bartering feels like a 'clean' way to deal with commerce. At the moment I'm doing a barter deal with a personal trainer. She's offering me training sessions in exchange for web design. I'm still sans quality health insurance right now (I'm signing up for a catastrophic plan next week) so I feel like preventative care via working out is probably a good idea. Besides, I like that I can use my skill as a web designer and make this personal trainer a fabulous homepage, which she needs, and in exchange, I work out at least two times a week, which I need.

If you don't have a "skill" that you think would be valuable for trade, think again. Some people just like the idea of bartering, and they'll trade for just about anything, as seen on this Craigslist Barter page for the SF Bay Area.

Just be careful about trading services, because you might get screwed over in the end. The woman who is giving me personal training sessions lives close by, and we trust each other enough to exchange services. It would get messy if I decided to just up and walk away from designing the site after she has given me a few training sessions. I imagine that at some point, such a situation could conclude with an icky court situation. Lucky for us, we're both game on this deal, and I'm making a great website for her, and she's kicking my ass into shape.

Here are some other barter sites that I've found on the interest that may be of interest to you:
(disclaimer: I haven't used any of these sites)

SERVICES AND GOODS BARTERING
BarterYourServices
u-Exchange.com
BarterPlanet.com
TrashBank.com
TheInternetBarterExchange

BARTERING AUCTIONS
BarterBart

CORPORATE BARTERING
Premier Barter
BizXchange
National Trade Association

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New Design!!!

After over a year of procrastinating, I've finally gotten around to revamping this blog. It's not perfect, but as it looked like it belonged in the gallery of blogger-crap-of-fame before, I'm proud of the updates. What do you think? Any suggestions?

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PF Roll

Eeks, I haven't written a PF Blogroll in ages. It's time for a roundup of the chatter going on out there in the personal finance blogosphere...

Give Me Back My Five Bucks (krystal at work) set some monthly goals for herself. She wants to "gain full-time employment," submit some reimbursement paperwork, and "curb any unnecessary spending." Last month, apparently, was a no-go on the full-time employment search. Let's all wish good luck to her on her job search quest this month, as job-searching can be daunting, and encouragement always helps. :)

Queercents has a great post on how to get the best return on charitable giving. This morning, Bill filled his readers in on charity rating organizations, and how to make sure that your contributions are being well spent. CNN Money also has a good post on this topic.

Get Rich Slowly (J.D.) somehow turned down the opportunity to buy a used Mini Cooper to replace her Ford Focus. Why? Because she realized it's more important to be debt-free than have a dream car. Besides, there's always next year.

How I Save Money.net (LuLuGal) fills us in on how to buy glasses for the cheap online. I've never bought glasses online because I've yet to find myself trusting online retailers enough, but LuLuGal's story of savings almost entices me to seek out my next pair of frames in the mall called cyberspace. She spent $75 on a pair on glasses that, if she purchased the frames in real life (ie, not online) would have cost her a whopping $400-$500. Congrats on the savings, LuLu.

Blogging Away Debt (Tricia) informs us that her net worth is up 6.91%, standing at -$36,384. Let's all encourage Tricia to keep on saving this month each month to help her on her way to debt-freedom.

An English Major's Money wins frugal foodie of the week with her recipe for "Lentils with Chorizo." I won't be trying this out since I don't eat meat, but for those of you who are meat eaters, the recipe sounds like it might be tasty, and it's certainly cheap due to ample use of lentils.

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When I was a little girl, I used to walk a few feet in the snow...

Winter in California is bizarre for a gal like me that grew up on the east coast. Sure, we get our annoying rainy season, but snow and painfully cold whether isn't involved in the concept of winter here. I kind of like that, as I'm definitely not a "cold" person, and it helps save on heating bills (though I have an 'all utilities paid' deal with my rent anyway) but sometimes I miss snow.

Scratch that. I just miss my memories of what snow means. Days off from school. Spending time with family. Watching bad tv all day (as a freelancer I tend to do that now... i mean, at least as background noise). Relaxing.

The only thing equivalent to a "snow day" out here would be a day when a giant earthquake destroys everything... or if a forest fire comes frighteningly close to my neighborhood. That's not much of a snow day.

Most of all, I miss being a child. Like any other 24 year old, I'm now facing the fact that the future is all about being an adult. A young adult for a while, then an old adult, then a very old adult and then... well, that's life.

How should I value my life? Should I see it in terms of how much money I make, and how much I can buy? I don't expect to be rich, but as a freelancer I see how I can build up a steady income and at some point, if I have enough happy clients, I can possibly make six figures a year. That feels almost greedy... although if I have kids at some point I'm sure any money would help.

I feel dirty wanting money. I like working for just the amount I need to survive with a little extra to stow away for savings in case something terrible happens. Then again, I love eating at nice restaurants, traveling and buying overpriced clothing. It's tough to both want to not be greedy and want to live a mildly lavish lifestyle.

More than anything, though, I want to feel like I've earned my money. That I deserve what I've earned. That's why I like the idea of freelancing. Beyond actually having to do a good job, I constantly have to market myself and prove my worth. And if i'm not worthy of a project then I have to rethink my strategy for long-term survival. Maybe that's a little scary, but I enjoy the ongoing challenge. It keeps me on my toes.

What's with all of this 'future' and 'past' thinking? Well, it's the holiday season, and while I'm not religious, the time around Hannukah and New Years always throws me into a state of extreme reflection. I think a lot about where I've been selfish in the past year and how I can change my next year to be a better person. I rarely make as much progress as I'd like, but at least through growing up I've stopped being so terribly narcissistic. I've accepted that for the most part people do not care about me, whether that's caring about me being wonderful or a trainwreck. As a kid I was desperate for attention. Not anymore. Well, sometimes, if I'm having a random hyper moment and perhaps a few shots of Vodka. But...

Now... my whole view on life has changed. My basic morals haven't. I still believe in freedom, I still believe in being a good person regardless of a belief in some divinity. That will always be a part of me. But now I don't mind being invisible (usually). I'm not sure how I feel about that.

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Cue the Trump Theme Song

I didn't expect this blog to bring in any extra pay, but I put up some Google Ads to see if I could make some extra cash off of those. Income from the Google Ads turns out to be really random. Some days I'll get a lot of clicks and other days they'll be worthless. I think a lot of people are just so numb to Adsense ads these days. I don't blame them. Then again, if I see an in site ad that is interesting to me on someone else's site, I often click the ad. Rarely does it amount to me making a purchase on whatever it is the advertiser is selling, but I've visited sites that I found through advertising before.

Anyway, I've been contacted by a few advertisers lately who want to put ads on my page. I'm flattered, really. It's certainly encouragement to keep up on this blog, as apparently there is some value to write all there is to know about my oh-so-exciting personal finances. Thus far one ad has gone up, and I'm currently in talks with a few other advertisers that may or may not work out.

This post, though, is to note that as of today, I've made my first successful ad sale for this site. I'm amazed, because I wasn't even fishing for advertisers yet. I mean, I planned to later down the line when I had the site actually looking good and more content that would be useful to people. Right now, this blog has kind of turned into my quasi-anonymous bitch fest with a few useful entries splattered about. I really want to change that and make this site more about looking at what I've learned about personal finance and job hunting, and help others with what I know.

I'm not really sure how many readers I have right now. I get a decent amount of traffic, but according to my feed reader button only 13 people have signed up for my feed. I say "only," but really I think it's pretty cool that 13 'strangers' are reading my blog on a fairly regular basis. My public blog, which is now mostly friends only, has tons of readers... but it's over on livejournal and any money made from adsense ads there goes directly to LJ. I do like how Blogger seems to be pretty open to advertising, or at least splitting ad revenue with bloggers. What have they got to lose? Google makes most of the money from Adsense anyway. But I don't mind that. At least I feel like I have the opportunity to control whether I want ads on my site, and if I do, make some money from them. I mean, enough to buy a few cups of Starbucks per month.

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Well, Don't I Feel Important?

This week I was interviewed for a Newsweek.com article on online personal finance sites like Mint, Wesabe, Geezeo, Yodlee and all the rest. I didn't expect for my quote to end up in the lede. Ok, so here goes my anonymity, but I think it's worth pointing to a personal finance article where I was quoted on my personal finance blog.

The thing is, my quote on there isn't exactly right. It's not wrong either, it's just that I didn't say "I'll stick with that" when I was talking about Yodlee. I basically was saying that for now, I'm sticking with Yodlee because they have all the features I want. As soon as Mint ads the ability to track my mutual funds and such, I'll go back to using that site. Actually, I still use that site, but I use Yodlee to keep track of my net worth since it's interesting to see how my overall savings goes up or down depending on how the market is doing.

The funny thing is, Mint is powered by Yodlee's back-end software, so they're both very similar sites. It's just that for one reason or another, Mint has yet to add Yodlee's full functionality to its site. But I have a feeling they will at some point, and the day they do is the day I stop logging into Yodlee.

I wouldn't mind so much that my quote says I'm going to stick with Yodlee, except I recently wrote this glowing review of Mint for a technology blog I used to work for -- and I didn't just change my mind. But if anyone read both articles, I'll sound like a hypocrite. And no one likes a hypocrite.

Oh well.

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Hello December

I can't believe it's already almost 2008. Seriously, wasn't New Years for 2007 just yesterday? It's kind of scary how fast life starts going by once school isn't around to make everything go sooooo slowly. I want to figure out a way to slow life down. Now that I'm 24 (oh yea, I turned 24 a week ago, happy birthday to me) I need to somehow figure out how to make each day count just a bit more.

Thank goodness my job situation is starting to piece together into a picture I like. Freelancing with steady contract work is obviously the ideal situation for me.

Right now I have three steady gigs, plus some random projects thrown in. My logic is that each extra project I take on is more money I can save, while my steady work is generally for bills and such. Any extra money from my 'steady' work goes into savings, either my IRA or some other savings account that I need to set up.

My jobs:

Writing for a Company -- 30 hours per week, 3 months, $3300 a month
Assisting at another Company -- 5-10 hours per week, $25 per hour
Steady work from uncle's marketing business -- $400 a month retainer

So, I imagine that should turn out to something like $3900 a month. Take taxes out, it's down to maybe $2800? Then take out $1050 for rent, $200 for bills - phone, internet, TV, gym membership) and $200 for health insurance and potential medical bills. That leaves me with, um, about $1300 for food, entertainment, gas, etc. If I'm lucky, that'll be enough to save some money too.

What I want to save for...

$3000: Laser Hair Removal.
$1000: Digital SLR camera + lense and accessories
$100,000: Grad School

Time to start saving!

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It's Been a While, Time for an Update

I was just interviewed for an article about personal finance sites, and the brief early-morning chat reminded me that I haven't updated this blog in a while. I'd like to start writing regularly again, it's just tough to keep up with my blogs and my life. I don't know how some personal finance bloggers find the time to write, like, three posts a day.

That said, I know I left you all with that wonderful long health insurance rant cliffhanger. Cue the cheesy suspense music please... "Duhn, duhn, duhn"....

There's good news, and there's bad news. I still don't have health insurance. The good news is that's mostly because I'm lazy and less because I've been denied. Well, I haven't been denied because I haven't applied yet. I've been speaking with a health insurance agent who seems to think my best option is to lie on my applications, although he won't go on record as advising that. Meanwhile he's also helped me put together a quote for Pacific Healthcare where I don't have to lie, and that seems pretty reasonable (something like $140 a month for catastrophic insurance).

COBRA turns out to be a whopping $405 a month, so unless it turns out I actually get denied from every other option, it's looking like COBRA, an aptly named snake, is a type of insurance one ought to stay away from even though it's enticing from afar.

Money matters are looking up. I'm actually getting more work than I know what to do with right now. And old colleague who is the editor of a journalism-y startup just asked me to work a few hours for her a week helping with admin stuff, doing site maintenance and at some point writing some short and fun features for the site. I have a feeling she's going to try to encourage me to get back into writing longer-format features and news stories at some point, but I'm not sure that's the direction I want to head in. I'm kind of happy with the freedom (and better pay) that comes with controlling my career as a freelance writer out in Silicon Valley. Unfortunately, my journalism expertise is in technology writing, and if I'm going to work for any startup in the area, it's too conflict-of-interesty to try to swing a career half-time in journalism and half-time in writing marketing copy for these sites. This gig for my old colleague is kosher because it's covering a specific area of technology that I will not be doing writing work for. So, that seems alright.

My biggest concern at the moment is the upcoming tax season. I just hope I get my W2 and 109 forms my way early so I can start figuring out how many zillions of dollars I owe, or don't owe. I honestly have no idea what taxes will look like this year, and it scares me a bit. See, from Jan-June of 07 I was making "35k a year" and having taxes taken out of that. Then From June 15-Nov 15, I was making "50k a year" and taxes were swiped from my bi-monthly checks. That's good. But after that, my tax situation turns into a bit of a mess. I've done a bunch of freelancing here and there. Some of it was for $50, some for $600, some for $1000. Obviously I'll report all of the larger gigs, and try my best to remember the tally of my smaller gigs. Smart me, I haven't been keeping track of my checks as I cashed them at the bank because I just assumed I'd have access to the scan of them later. I could have sworn at one point I saw these scans on my BankofAmerica.com account. No such luck. Apparently they charge some fee to pull up the scans of old checks. I don't really want to find out how much that fee is. I guess I'll just wait for my tax mail to come, and take it from there. And hopefully, at least for this year, it will turn out that my average pay was so low (due to periods of unemployment, without being on unemployment) that I'll somehow break even on the whole tax situation. If not, there's a chance I could owe a lot.

This is also the first year I'm going to see what having some cash in a mutual fund does to my taxes. Apparently I have to pay tax on my dividends. But right now it looks like my mutual fund, despite being 'in the bank' for over seven months, has returned to its original buying price. So I'm not sure how that all works out come tax time. Can someone explain this to me?

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the nightmare that is figuring out taxes and health insurance as a freelancer

the absolutely marvelous news is that i just landed a steady, well-paid, 30 hrs/week contract gig for the next three months.

the bad news it that now i have to figure out how on earth to get myself decent health insurance... and how to sort out my income and expenses for tax season.

contract work is great because of the flexibility, but all the additional "work" I have to do to be self-employed is rather terrifying.

first off -- health insurance: i already know i will be denied if i tell the truth on my health insurance applications, because i took lexapro ONE MONTH for "major depression." On the Tonik health insurance application, you get to click off your pre-existing medical conditions. Guess what category major depression falls into? "Bipolar disorder/Major Depression/Schizophrenia"

Um. I went to a psychiatrist for about two months, took meds for one month, and i kind of feel better now.

My psychiatrist kind of warned me about the potential health insurance issues, but she wasn't very clear about it. She just said that she doesn't like working with health insurance -- because it takes her forever to get paid. And then when she was considering diagnosing me with bipolar, she asked me if it would be ok to note that on my diagnosis form, since most clients don't want that on there, as it could hurt their chances of getting health insurance later on.

First off, I was rather ignorant at the time, thinking that health insurance existed to help you get better (wrong) and that it would be cheaper for me to use my $15 co-pay visits with a 'major depression' diagnosis as opposed to 50% pay for ADD or anxiety or anything else that I probably actually have (I doubt I have major depression. It's probably recurring, but I go through phases in my life. Life is hard and sometimes i'm sad and sometimes I need someone to talk to, but I don't think this is a life-long condition). Anyway...

So I got my $15 visits, which was nice for the two months I say my psychiatrist and my therapist. And now? Well, chances are I won't be able to get health insurance. Because apparently whatever it is I have is just as bad as SCHIZOPHRENIA in the eyes of my potential insurers.

I spoke with a health insurance agent who, off the record, basically suggested that i take the risk and lie on my application, because that would be the only way i could get decent insurance. but, of course, then i could basically screw myself over by doing that, since health insurance companies could find out that i lied and make me pay for EVERYTHING since when i signed up for their insurance. that's a scary thought.

Or - do I just be honest and watch as my applications get denied? I haven't got my forms for Cobra yet, but I'm sure that will be ridiculously expensive. I had really good health insurance (Blue Shield PPO) through my employer with a $250 deductible, and now I'm looking at whatever I can get with a $1500-$5000 deductible and poor benefits. And to get that I might still have to lie.

But I should have health insurance. I realize it's stupid to be living without health insurance. I just am not sure what kind to get. Basically I need the doctor to prescribe me Yasmin birth control pills each month (and hopefully for them not to cost me a fortune) -- I need "Yasmin" specifically for hormonal imbalances and such, but unfortunately getting cheaper pills through something like planned parenthood will not let me get that brand.

Besides health insurance, there's the issue of taxes. Gosh, I'm so behind of keeping tabs on what I've made in contract work this year. I know, bad me. I just set up a google docs spreadsheet to start taking detailed notes from hereonout, but I'm not 100% sure what I've made thus far this year. In any case, I know that taxes are going to take a HUGE CHUNK out of my income, which is fine, they did that before, but it's just really hard to determine how much taxes will be when I don't even know how much work I will have each month.

At least now I have a stable three month gig where I will be making $3300 a month, assuming they like me and want to keep me for the entirety of the contracted position. After that, either I get to stay on board, or it's back to the drawing board. We'll see. Meanwhile, my goal is to pick up one or two freelance web design projects per month, where I'd make anywhere from $500-$1000 per project (although I'm starting out with really cheap rates of like $200 per project.)

Anyway... for the next three months, my 'income' before taxes, minus any additional web design projects, should be $3700, which includes the contract gig and another ongoing contract project where I make $400 a month writing a few articles for my uncle's marketing firm. $3700 a month is definitely not a bad wage, but after taxes, and health insurance, I'm not sure how much that actually is. It'd be something like $2700 a month or something? So after rent, that's $1650 a month. Phone bill, gym membership and cable tv/internet are like, $200, so then I have $1450 left. Ok, not bad. Health insurance, assuming I go for a decent kind, will be like $300 a month. So that's maybe $1150 left for food, entertainment and such.

Ok, I guess that's not awful. But I just am scared about not understanding taxes and all the complicated stuff that goes into expensing things and such. Meanwhile, I just read that self-employed individuals pay a lot more in taxes because usually the company pays for like half of the taxes, but when you work for yourself you are your own company.

So. I guess I have a lot of figuring out to do. In the meantime, I have to wrap up three projects I'm working on. I'm writing some company for a startup (basically, I'm writing all the copy that will go on their site), then I have to finish this one website for a client, and then I've got to wrap up the basic design for a project I'm doing in a 'trade' deal with a personal trainer. 5 hours of web design for 4 hours of personal training. It's not a bad deal, considering she charges $78 an hour and I charge $50. Anyway, I can tell she's getting antsy to see the page (I already had three training sessions this week, but I told her I'd show her something this weekend.) Well, I've got to finish that. I'm trying my darndest to figure out Flash because A) she seems to really like pages with Flash in them and B) I need at least one site for my portfolio that incorporates Flash, so I can show clients that I can atleast put some basic animation on their pages.

Anyway.

Life is going pretty good, minus all of this confusion. My birthday is coming up next week. I'm turning 24. Happy, uh, confused birthday to me.

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