New year resolutions, financial wake up calls, keeping track of expenses

As the new year rolls in, I looked over last year’s new year resolutions and to check off the ones I have accomplished. I am not sure if it is accomplished if I have looked into something but it was better than not doing anything at all. The only one that I can check off is getting pregnant.

As this year starts, I have another list (only 5 this year). And I have started on 4 of the 5 on the list.

Selling the property is one of our resolutions this year. We had a low offer on the second week after we listed our property on the MLS. After many considerations, I have decided not to go through with it because the buyer did not qualify for a conventional loan. They wanted a FHA loan which I thought it was a hassle and it might take longer than necessary to complete the transaction.

And then came the snow storms. We practically have one every few days. We hire a landscape guy who looks after the property when it snows. We send him a money order and a little extra fee to cover the fee when he cashes the money order or check. So far it’s going well. I hope the storm stops soon and we’ll sell the house as soon as possible to cut our costs. Even thought it’s an investment property and all expenses are tax deductible but they are still out of pocket money for now.

When I started looking into our financials, I looked into my 401-k which I left at one of the companies that I worked. I no longer work there for 4 years but my 401-k is still there. I didn’t touch it at all. When the recession came in 2008, my portfolio lost half of it’s value and now it finally caught up to what it once was. That’s when I got a wake up call and realized I should’ve looked into my financials more closely. I rolled over my 401-k to an IRA last month.

One of the few things that I have been procrastinating to do is setup Quickbooks (an accounting software) and keep track of our expenses. I spent most the day yesterday putting in our expenses for the month of January. First I jot down all the expenses in a piece of accounting paper as the days go by. After I setup the chart of account in Quickbooks, I entered those charges into Quickbooks. There are some looking and digging but I finally did it in one day. And January is one of our bigger expense months. It has Chinese New Year expenses, property taxes, and some after Christmas shopping. I used to keep some of our expenses in a spreadsheet but it is much better to use an accounting software to keep track of expenses. You can see all the details that make up the amount with just one click. It’s not a complete functional company profile with assets, liabilities and income. The main purpose for us right now is keeping track of expenses. Does it count every penny we spent? No, I think I have about 95% of all the expenses. There are times when my husband buys lunch at work and he does not like to keep track of every penny he spends (which drives me crazy at times).

I think it’s a good start for now.

Get away, recession, what you paid is what you get

The past few weeks, I have been feeling very tired and a need to get away from it all. I think being a stay-at-home mom is taking a toll on me. I am wishing to get away to a very remote quiet place like the poconos/the mountains and just do nothing or just go hiking - no phones, no TV, no newspaper, no crying baby to take care of.

And then it reminds me of the recession we are in and how nice it would be able to afford to buy a lot of things on discount…especially a second home. WAIT, we don’t even own a primary residence yet. As my husband always tells me, we have to own a primary house before we own a second home. Somehow, I like to own an investment property before owning our primary resident. I don’t see anything wrong with it.

Since we are on the topic of recession, there are a few interesting situations I came across the past week or two. I had to go to midtown Manhattan one weekday. While I was getting my metro card out I saw another young man (might be in his mid 20s to early 30s) was also waiting to get into the turnstile. And within seconds, the train came and I saw this young man who was well dressed went under the turnstile without paying and got on the train. There were some people around because it was in the afternoon on a nice sunny day. It made me wonder if he was just finish a job interview because he has been out of job for awhile? Did he think he was going to get caught and get fine? Did he care if he gets caught?

I went to do my laundry today. I found this place where I can do a double load (the smallest load) for $1.00 to wash (I’ll call this choice A). I’ve been there twice and I had no problems. Today, I got my wash done and then put in 4 quarters for the dryer. I usually put in 1 quarter to make sure the dryer works before I put in the rest of the 3 quarters for a total of 32-34 minutes. It was 8 ½ minutes per quarter in this place. I spent a quarter on parking for 30 minutes and the rest of the time, I sat in my car to wait for the laundry to be done. In total, I spent $2.25 to wash, dry and parked my car. If I go to the 24 hour laundry mat (I’ll call this choice C) with free parking, I would’ve paid $3.00 (1 load) - $5 (2 loads). If I go to yet another (I’ll call this choice B) place (free parking on the street) is $1.50 for a double load wash and the dryer time is the same (a quarter for 8 ½ minutes). However, today, I was not satisfied with my service in choice A laundry mat. I put in a dollar worth of quarters in the machine and walked away to my car for the rest of the time. I came back and found my laundry still wet. I asked the lady that worked there if the machine was working. She said yes, it did. She touched my wet laundry and didn’t offer me a refund. I packed up my laundry and walked out of there. I was upset at myself for not checking the dryer while in motion. I was upset at the service I received there that I would never get if I have gone to laundry mat choice B and C. Then I said to myself “What you paid is what you get.” I made up my mind the next time I go to the laundry mat will be choice B where I get free parking on the street and great service.

The lesson I learn today, don’t always go for the cheapest because what you paid is what you get!

The recession & changes I've made at home

I haven’t always been a very wasteful person or a very frugal person. I was willing to pay more for certain things and being very cheap on things of little value to me. Because I left my job last year in August to prepare for first time parenthood and become a full-time homemaker temporarily, I have been watching what our money spend on. Besides clipping coupons, here is a list of what I have done so far.

1) We have redeemed our American Express credit card points for American Express gift cards and we use them when we buy diapers, formulas etc…

2) I normally buy fresh herbs just to make one dish and then I leave the rest in the refrigerator and forget about them or till they rot. It was a waste of money. All I need to cook is just a pinch of herb not a whole bunch. We (well I) decided to buy a T5 fluorescent plant light (I believe it costs roughly $80+shipping & handling=$93.07) to plant herbs at home. I spent about $30 on seeds from Home Depot and $8 on gardening pots from a local vendor. It’s been a few weeks, and I see sprouts. I can’t wait till I can cut them. It’s a total investment of a little over $100. I believe in the long run, it’s worth the investment and the convenience, especially during the snow storms when you need just that one herb for your recipe.

3) We used to go out to eat once a week. Now, we do take out once a week, cook at home and my husband pack food from home for his lunch which he normally spends $6-$10.

4) I had a 5/1 ARMS 30 years mortgage for my investment property from 2005 and it will reset in 2010. I thought I would’ve sold the house within the next 5 years but because the economy, selling isn’t a good choice. We decided to refinance through LendingTree to a fixed rate 30 years mortgage. When the market picks up later, we will have a choice of selling for a profit (or at least break even) or keep it as our retirement investment. Right now, it’s still in process, it should close within the next few weeks. We will finally have a very small (9.38%) positive cash flow after paying principal, interest, insurance, taxes and property management fee. Total savings from refinancing is 9.78%.

5) I finally decided it was time to change the investment house insurance after calling for quotes from 4-6 different companies from a few months ago. The renewal date was on tax date and I was able to save $168.78 per year (631-462.22). That is 26.74% saving over the old insurance company. Why didn’t I do this earlier? It had a lot to do with being laziness the past few years. With the recession, it didn’t take long to start thinking of saving money.

6) In March, I’ve opened a STAR mutual fund in Vanguard. This account requires only $1000 rather than $3000 to start investing. I wanted to eventually invest in other mutual fund when it accumulates up to $3000. The money from this fund will help me get my short to mid-term goals accomplished.

What have you done differently since the recession begins. Perhaps you have something that you like to share which I can learn from?