Frugality vs Earning More / Getting My Emotions Out

One of my primary approaches to getting out of debt has been being frugal. I see this as more relevant over the short term versus the long haul.

I’d like to start off with a quote I found a book by one of my mentors, Ramit Sethi of I Will Teach you To Be Rich fame.

To live a richer life, spend extravagantly on the things you love… as long you cut costs mercilessly on the things you don’t.

I am by definition a very frugal person. I also realize that all the cost-cutting in the world doesn’t help me simply aren’t earning enough to get by.

Ramit has adopted what he refers to as CEO strategy:
Cut costs + Earn more + Optimize your spending

We cut costs by using coupons from, buying when items are on sale or clearance, and of course shopping around in general. I’m working on the earning more part for myself.  Last year I joined Ramit’s Earn1k course, did a few jobs on the side and earned about $600 between cleaning office buildings while my friend who runs a cleaning business was on vacation and testing an iPhone app for a very friendly couple from Arizona.  Not quite enough to cover what I paid for the course, but it was something.

One of pre-exercises is a to write down 50 ideas on how one can earn income on the side. I came up with a list then deleted it because I questioned how serious I was about implementing the ideas.  The top ones for me include Blogging, Research and Technical Support.  If I can write about a topic people are interested in and make 100/week off it or more it would allow me to get close to my goal much, much faster.  15k after 3 years along with the real-world experience having gone through the process.  What I write here is mostly ‘shooting from the hip’, without a specific purpose in mind.  Changing it to a more structured / polished format while keeping true to my voice and the message really wouldn’t add that much time to the process and get more people interested in this site.

My biggest challenge here is being good at something to the point where I feel I am good enough to get paid for it.  Selling myself short some would say, but I am a harsh critic and am pretty transparent when I don’t believe in a product or service.

Another component of the course is exposing yourself to new ideas.  As an MBA student I was exposed to new ideas relevant to business and marketing all the time.  After graduating, not so much.  I let others voices, complaints and life situations overpower my own.  Then got saddled with debt and lost sight of the big picture.  I will give it my all, but never ever will I let the feeling of being in a dead-end job crush my personal spirit and drive.

In order to be the best, you need to learn from the best.  The process of figuring out who is good vs who sucks and is a total waste takes time.  In 2000 at the tender age of 16  and making 5.15/hr I read a book by Robert Kiyosaki called Rich Dad, Poor Dad.  I read the book as though it was gospel.  My first exposure to business outside of college.  Looking back though, I really think he viewed the people who worked for a business and not running their own as inferior.

I’ve had a bunch of bad experiences with money /  business.  This is almost a part 2 of Ground Zero – My Challenges Getting it out here, once and one time only:

  • In college…2 days of a horrible telemarketing internship.  Reading a script to help companies save on their telecommunication costs.
  • Also…having a peer of mine push Quixtar along with his religious views on me.  I didn’t take the bait and really felt like unless I was working in the MLM system.  He’s a wrestler / preacher, didn’t know I was a gay and we never spoke since.
  • Family members pushing PrePaid Legal.  “Oh brotha, you really need to get in on this now”.
  • An internship last month I almost did before getting a position and going to be given an undisclosed stipend.  I got three offers within 48 hours.  One goal was to contact local colleges and launch an internship program.  They wanted top talent essentially for free. Not a good vibe.  At 19 or 20 I would’ve agreed to it, but at 28 having been burned too many times in my life and not believing strongly in the services they offered.
  • At the time I had 10k in the bank (09) and switched careers.  Having a boss post a full-time position online, change it to part-time when I interviewed and per diem after the 2nd month.  I didn’t have the balls to start looking elsewhere immediately or tell him I needed more hours.  He kept saying he was working on a deal with local government to start a technology incubator and referred to me as an Entrepreneur-In-Training.  It never panned out, I was able to work my own hours, but was micromanaged to the core (keeping track of what I did in 15 minute intervals) and at no point did I feel like I was ever more than an assistant.  6 months of that and I was back to banking.  After getting sh*t pay, the grass started to look better on the other side.
  • General upbringing : I saw my non-working disabled father make all kinds of money mistakes which dug our family into a huge hole and have a blasé attitude about it all while my mother worked cleaning houses and in a nursing home to make ends meet. As a kid I begged him to get a job at least once a week for a decade and it never happened.
  • Losing money in the stock market – After my father died suddenly, I got around 40k from his life insurance policy. I was making about 10/hr  part-time when it happened and was given the money in small amounts over a 3 year period. Today I have little to show for it, as my monthly expenses and purchases eroded through it.  I do have some guilt since I never had that much money before in my life but try not to let it hinder me too much.  I used part of the money to fund a Roth IRA along with an individual stock tracking account that was in a penny stock (DPDW.OB) a coworker was going nuts about.  I thought it was worth the risk at the time but then ended up losing my shirt to the tune of about 50k my initial investment on the stock and ~20% in an index fund.  My risk tolerance went from moderate to minimal over a month when the housing market crashed in 2009.
  • Selling a 5 year old car that was working fine other than some hard shifts for 6k and seeing the dealership sell it for 10.

The point I’m making is bad things have happened to all of us.  The question is do you use that story to hold you back or instead use it to propel you forward.  My story might suck, but there are plenty of other people with worse stories.  It is part of me yes, but I don’t let it define me.


Ok I thought I had it all figured out.  Going to dump all my money in one account for the short-term. This last week I made a mistake of having multiple auto transfers coming out of my main account and it went negative.  I have a Line of Credit for situations like this, but don’t like to use it unless absolutely necessary.  Fortunately, payday is 6 1 day away….

Got a wedding invitation from my partner’s friend in New York.  I haven’t met either the bride or the groom, but I would like to go for the experience, support and to see my family whom I haven’t seen since July of 2011.  The flights are extremely expensive and it would be a hardship between the move, credit card and student loan debt.  If by chance the ticket price drops we will go but as it stands now, those plans will be set aside.

My primary checking account pays 1% if I do a certain number of point of sale transactions each month vs .8 in my online savings account.  Additionally it takes several extra days to add or withdraw funds from the online account.  In cases where I need the money right away due to an anemic emergency fund, this is especially important.

That being the case, I’m pulling money from my online account until I figure out what the most convenient arrangement is.  I’m a big advocate of credit unions.  Not only because I worked at one, but because the service is superior and the rates are better.  I’d open up a bank account at a large bank only because of the convenient bank practically anywhere system and ease of transferring money into and out of a joint account when the time comes.

I need a replacement digital camera too.  Taking self-shots with an iPhone is ghetto and the camera I have doesn’t exactly do the job.  I had a Canon Digital Rebel XT SLR but sold it when I didn’t have a job last year.  Now I’m thinking of getting a slightly used Canon Powershot G-series.  It’s amazing how great deals come about simply from people who need cash right away.  I’ve seen it with motorcycles in the dead of winter for half the real value and cars that are mechanically sound but a generation out of date.  Our Western culture implies we need to have the latest and greatest.  From experience, everything gets old and eclipsed by something else.

I think Nathan of is onto something where he sold the Mazda 3 series he bought brand-new for a 99 Miata.  Shame he is no longer making updates.  I get inspired by reading stories of people who were in similar or worse shape than I and were able to pull it off successfully.  I am reassessing whether 3 years is realistic to pay off all my debt.  4 seems more tolerable if by chance my earnings level doesn’t go up or I hit another gap in employment.

I hate ants


The more I think about it, the more I think moving into a townhouse is a good idea.  The latest chapter of events is a reminder.  We’re currently having a problem with ants. Ants fall below roaches and spiders on my freakout radar.  I killed about 300 of the suckers.  I’m not exaggerating either.  They crawled under our front door and were around the door, along the walls, on the kitchen counter.  I didn’t leave any food out.  An exterminator came and is coming again Wednesday.

Also got our electricity bill, it went up to 142 and it’s not even super hot out yet.  One of my friends with a house over 2500sq ft pays on average 100-120 for his entire place. a month.  Also got the paperwork for renewing our lease, which we won’t doing.  They want to go up from 1275 to 1295 a month, not including pet fee or water which adds on around $45 extra each month.  Our discount for the first year gone.  16080 for a year’s worth of rent.  In the words of Suze Orman… “I don’t think so”.

Don’t get me wrong, I like this place but it’s just a big money pit long term.  After 5 years out half our townhouse would be paid off.

Work is going well, my employer is okay with paying us some OT.  Quite an adjustment to go from my lower hourly rate NY job with a 30miles roundtrip commute, state tax, can’t work over 37.5hrs a week, working 3 saturdays a month, double the real estate prices and double the insurance premiums to Dallas job where I drive 10 miles, pay no state tax, work 40+ hours, and all everything else.  I think I see why a lot of people in NY area cranky.  Pay so much money out without so much to show for it.  Of course there are always exceptions…

I still ❤ New York and plan to visit in the next few months.  Really want to see Fire Island and Manhattan in between seeing family and friends.

Alternate Transportation?

A little sore the last couple days.  My partner and I carried a washer and dryer from a 2nd floor apartment over to our 3rd floor apartment in another building.  Rented a dolley from Home Depot for $8 instead of having it professionally moved and stored in a garage we’d have to rent for a few hundred.  One thing is for sure, I won’t be moving it again once we leave in June.

This is the first time in a while that I work so close to work that alternative means of transportation might be an option.  I have a friend with a Vespa, who sold his car to help get out of debt but plans to get one again in the near future.  I could see this being a big pain when it’s raining out.  Not to mention Texas drivers either run you off the road in their big pickup trucks or drive like they have no place to be.

Selling my car still doesn’t seem like a great idea though.  I like to carry things around with my like laptops, groceries, change of clothes for the gym and a pedal bike or motorcycle would make that a challenge.  Personal hygiene would also be a potential issue there.  No one wants to work all sweaty for 8 hours..

A good friend of mine has owned one of his cars for 10 years and paid for it in cash.  No major issues and he has a junker for his trips to Queens / NYC.  He is really smart with his money.  In the same time, I have purchased 3 cars and easily spent twice the amount.

The point is a lot of us, especially in our 20s just buy new because we can and not because we need it.  A 20k mistake now can wreak havoc on the future especially when investments come into play.

Also a snapshot of where I am as of 4/15/2012 (aka Tax Day to most Americans):
Credit Card: 3265.51 (Had a month’s worth of U-Verse service I thought I had paid but wasn’t, that’s why it went up)
Student Loans:  41996.83
Townhouse: 626.50
Checking: 448.67

My checking acct was negative last week so this is a trend in the right direction.  Pretty confident I can swing not spending 400 for the next two weeks.  Taking my lunch into work again.  These little things over time should add up.

Automation Sidetracked

Turns out I will need 2500 for my part of the downpayment on the townhouse by the beginning of June.  I will get a portion of it back, but the exact amount is yet to be determined.  It all depends on what is leftover after our moving expenses and painting and other minor bits and pieces.  It’s only fair since I have lived pretty much rent-free for a few months and had my bills covered.

Four pay periods left and I have 2100 to go.  525 each paycheck.  I can do this.  Bumping up my weekly allocation to 262.50 from 200/week.  Moving into a townhouse, I’m viewing it as an investment in my future.  Was kinda pissed at first, but discipline is key to reaching any goal. 🙂  I’m thankful I have a job to pay my bills and it’s a good one.

Getting Out Of Debt – Automation

One of the videos that really inspired me.  It’s kind of like massive weight loss, no one thinks you can do it until after you have done it.  I’m still wondering how the pieces are going to come together with my salary being what it is.  There are a lot of options here, but regardless I’m going to put a huge dent in this baby.

Breaking the math down without including interest…

250.00 a year x 52 weeks = 13000
My tax return has historically been above 1000/yr, so add another $20 each week to that.

14000*3=42000. That’s not including any bonuses I get or raises along the way.  A couple grand short of the goal, but surprisingly close.  It’s a high percentage of my income, which I may have to adjust at some point.  Going with it for now.  I’m running lean next few months, with a minimal emergency fund, student loan payments on-hold until my credit card is 0 again.  Also saving for this June townhouse downpayment ($400 of $2000 saved so far), $72 in my other bank accounts until I’m paid.  I have over $10k of available credit if I needed to access it, but to me that isn’t even an option.  It’s good to see there is light at the end of the tunnel.  I will post less over the next few days than I have been, but like anything else this is still shiny and new starting out.


Toll Roads in Dallas.  They chop the length of your commute down by half or more.  The benefits are less gas consumption, feeling happier on one’s way to work and getting to locations on time.  The way lights are timed, you wait a good 3 minutes sometimes before it changes from red to green, a good 10 set of lights to potentially hit.

I have ‘ve paid some occasional thought to how much money I spend on the toll roads in Dallas.   The primary advantage of the tollroad is a much quicker commute.  Typical day I take the tollroad to work and side streets home.  That’s 1.18 a day time 5 days x 4 on average or 23.60 a month.  On top of that I can spend an additional 3-5/wk on tolls each week.  So $20 extra is a 43.60/mo.  I hate to wait, but I also hate to burn money when I don’t have to.  I’m thinking I could plan ahead and leave the house an extra 15 min earlier and save, but I’m not sure I’m that cheap. 😛


Why We’re Buying a Townhouse

In my last post, I mentioned my partner and I are in the process of buying a townhouse.  We don’t have a whole lot of money saved for a down payment, but needed to have the deal closed before July 2012.

Why the heck would someone in over 40,000 in debt be a coborrower on a mortgage for a townhouse?

  • Closing Cost Benefit – Since we moved, as part of our relocation package my partner’s company will pay for closing costs provided we close by a certain date.  Value: $2500.
  • FHA Qualification – We did an FHA loan, which only requires 3.5% down by closing and before April 1st only required 1% of the value.  20% down would be ideal, but with our incomes / rent I don’t think it’s realistic.
  • Rent – We live in a nice apartment, but it is $1300/mo.  Round up to 16000/yr just for rent with no equity.  Our mortgage will be under 150k.  In 10 years at what we pay now, the bulk of our townhouse would be paid off.  We also pay for gas each month, for our hot water heater and a fireplace we never use, adding about $40/mo to our bill.
  • Utilities – Our electricity bill in the summer time is between 200 and 300 per month for July and August.  One of the downsides to living in a 3rd floor apartment with lots of sunlight / poor insulation.  This townhouse has a new HVAC unit, energy efficient appliances and lots of shade.
  • Space – The 1300 sq footage for our place is fine now, but 1800 is much better especially when friends or family come over.  It also has 3 bedrooms vs 2.
  • Housing Market – Sure it could get worse, but I don’t think it can go much lower than it is right now.  Our complex will likely try to raise our rent after this year is up by 100/mo.

The property has been fully inspected, passed with the exception of some electrical issues (not up to code, couple thousand to fix) the seller has agreed to fix before closing date and minor roof work we are going to have done for ~$200.  Like most properties in the area, it has had foundation work done recently.  In New York that might be a red flag, but in Texas it’s business as usual.

I believe our mortgage payment will slightly lower than our rent right now, including homeowners insurance, taxes, pmi and interest (~3.65% rate iirc).  My partner could afford to pay for it all on his salary, but we’re doing this together and are in it for the long haul.  I am definitely looking forward to buying a home.  Before we moved I never would’ve thought it was possible.  Definitely not on Long Island where property values and taxes are twice as high as Dallas….

On my way to work now, but will update more soon.

Getting to Senior

Interesting to see what people with my title but the word senior earn at my company.  The high end is about 15% more than my current earnings. Raises are given based on performance and not length of time.  Is it bad that I’m looking at my earnings potential less than a month in?  I don’t think so.  It’s not just about the money, it’s about the overall experience.  I’m happy right now and really don’t have any complaints.  When I started focusing on what other successful people were doing instead of myself, I started becoming overly critical and questioning my choices in life (not in a good way).  Now I focus more on what I do have control over and just enjoying each day regardless of what happens.  The grass isn’t always greener on the other side.  A friend of mine worked in sales and would still be doing work at 10pm.  Not my idea of a super life.

I quit working at a supermarket I was at for 5 years in 2006.  It closed for good just last month.  This picture explains it all.  Those who can’t compete go out of business.  You can be the best worker at the supermarket and still not get ahead in life.  Unions won’t always save you and often hold back top talent or artificially deflate their wages.

After I left, I was in banking for another 5 years, with essentially one promotion.  Part-time to full-time and then again to a supervisor.  I tried a couple times to advance, but was overlooked for someone else each time, even people hired after me with less education.  Those experiences made me realize a little cockiness, confidence, OCD and impatience is necessary to get ahead.  Playing it safe all the time can really hold a person back over the long-term.  I’m not where I want to be yet at 28, but I’m a step closer than I was a month ago.  This blog and the accountability it creates will help me stay on the mark.