penn

Something that makes me sad this morning

I will now be a customer of Chase bank instead of Washington Mutual. While the official transition will take awhile, the purchasing has already been done. I've been anxiously watching the WaMu news for the past few weeks and hoping that nothing would happen. While WaMu is no longer my main bank, I've left a decent amount of money there (well, not for them probably, but a good amount for me) for years. It makes me angry that others have been pulling their money out of Washington Mutual over the past few weeks, as runs on deposits make it difficult for banks to maintain the capital they need to stay solvent.

WaMu was the first bank account I ever personally opened, and I've had my account for just about a decade now. When I was 15 and started working at the Kingdome, my mom took my first paycheck and me over to the bank, sat us down, and helped me open up an account. I faithfully and happily used WaMu for almost everything (one exception: car loan from BECU) for the entire time I was in Seattle. Moving to Michigan, where there are no WaMu branches, is the only reason I ever reduced my use of WaMu. I've been keeping my account in hopes that I would one day move back to the land of WaMu and be able to use my bank again.

I'm not sure why I like WaMu so much. It's probably like any other bank. But I liked the home-town connection and plethora of pleasant tellers at local banks. I didn't mind banking at a west coast only bank (at least, I didn't mind it until I moved off the west coast).

I suppose it doesn't matter so much. My account will slide into becoming a Chase account (which would be nice except for the fact that there doesn't appear to be any Chase banks in Minnesota either). I'll still have my stupid CD that comes due in 2010 for something like $170; don't ask me why I signed up for a 5 year CD and then forgot about it and let it roll over. And since I now bank with a bank in Michigan (University of Michigan Credit Union), I will just have to figure out a better bank once I finally figure out where I might someday live.

I have to say this: I'm not a fan of big corporate bailouts. I don't think we should save the shirts of people who made bad investments. I certainly think limits need to be placed on how taxpayer money is spent to both manage our economy well and not infuse too much cash into the upper echelons of society. I still firmly believe that helping the consumer will do much more, and the non-trained portion of my brain (I never took econ) wonders why we can't just use those billions of dollars to pay into the mortgages that are failing for people in order to let them keep their house and allow cash to flow to the banks.

But I'm still sad that WaMu will be no more.

Another way of learning to let it go

I don’t live paycheck to paycheck. In fact, I have what I personally consider to be a healthy savings account lined up. In my current lease, my savings account will pay for more than 6 months of living expenses (and more if push came to shove). I also typically add to that savings cushion each month. This is well within the cushion most experts recommend. I achieve this by monitoring my spending. I don’t usually drink, I limit my meals out to 1-2 per week, and I’m not an extravagant shopper. In fact, the vast majority of my recent clothing purchases have been at the Salvation Army (recent scores: two Patagonia capilene shirts for $3 each, several pairs of jeans for $5 each, and a cute top for $3.50). I cook a lot of food from scratch. I think it's fun to pay my bills with paychecks from last month (I'd go even further back, but I transfer most of my savings into a high-yield online savings account). All in all, I definitely save money well and enjoy doing so.

Despite my fairly frugal lifestyle that allows me a fair amount of "discretionary income", I still have a hard time spending money on a non-necessary purchase. The clothing purchases were all things that I needed (okay, the capilene shirts were for ultimate Frisbee – not technically needed, but it is a big part of keeping me healthy and ultimately saving me money), and going out to eat, either by myself or with friends, keeps me mentally fit. But when it comes to making larger purchases, I have a hard time biting the bullet. I hem and haw. I question whether or not I really need a wanted item. Will I use it? Is this really the best deal? Can I make due with something I have?

For example, it took me forever to finally buy a digital SLR. I worried about price points and lenses, and I had a hard time justifying the camera even when the zoom on my old camera broke (which, by the way, I’ve now fixed). I didn’t really need to buy the new camera. I finally decided to buy it when my parents gave me some money for graduation. My mom stipulated that I spend the money on something fun and enjoyable for me; she didn’t want it to sit in my bank account and be saved for something “practical.” (She is probably remembering the fate of my college graduation money which was used to pay the deposit and first month’s rent on my first apartment.) I used the money to buy my Nikon D40, and it has become my baby. I love that thing, and I take it with me almost everywhere. It has become a source of joy in my life, and I kick myself for not buying one earlier. In this case, it was a reasonable purchase: I already knew that I took lots of photos, I always enjoyed my old manual cameras, and I knew I wanted a better camera for taking photos at my ultimate Frisbee games. It just took the present from my mom to finally push me into spending some money on myself.

Now, I’m deliberating on another big purchase. I did buy a bike a few months ago, but I’m sad to say that I just don’t ride it. It’s rusty and heavy and not really a lot of fun to ride. I had intended to bike to work almost every day, and I have not been doing that (in my defense, I also have been struggling with some minor injuries that make me hesitant to engage in more physical exercise, but physical therapy is helping calm my shin splints and sore lower legs). I had intended to use this bike in Ann Arbor and then buy a new bike when I got to Minnesota. In speaking with a friend tonight, however, I think I should probably just buy a new bike here. In the long run, it won’t really be that hard to move a bike with me; it’s not like I don’t have other stuff to move too, and a bike is not a significant addition to my possessions.

I’m still a bit torn on this decision. Unlike the camera, I am not completely sure that I will love and use this bike. After all, I don’t use the bike I currently own. Then again, I rode a bike daily during the time I lived in the Netherlands, and I have no reason to believe that I wouldn’t embrace using a nice bike here in Ann Arbor (and upon my move to Michigan). I’ve priced bikes out, and I see one I really like at REI -- and much thanks to my friend Mark for actually finding it for me! This gives me an additional 10% off, as I have an REI credit card that returns dividends for my REI purchases, which would bring the bike price to $315 before tax.

In reality, this probably is quite a small number for something I am hoping to enjoy. Using the bike will result in savings on gas and less wear and tear on my car. It will also improve my fitness level. Yet still I am having a difficult time giving myself permission to get over the price tag and just go for it. At the very least, I’m making progress; I’m going to go to REI and check out the bike this weekend. And if I like it, I’m going to try really hard to just hand over my credit card and enjoy the purchase without worrying.

Two awesome visual representations

I appreciate an excellent photo representation. There are lots of ways to represent data: number tables, descriptions, graphs. But, often, I think a visual representation that ties the information into our lives in a personal way is much more effective than simply plopping down a list of numbers or showing a really huge pie chart or bar graph. It's one thing to say "Americans eat more processed food than many other countries around the world." But it really hits home when you see how much more we eat.

To that end, I'd like to share two really neat links I uncovered this week. First, a photo essay on What the World Eats. It is a beautiful representation of how diet is different in many, many parts of the world. I'm in awe of how much fresh produce is consumed. I wouldn't even know what to cook with all that produce!

Second is the Death and Taxes: where your federal tax dollars go poster. You can zoom in and examine different portions of the US budget. It's the proposed budget for '08 from the president, and the chart even covers the percent difference from last years' budget. While this isn't a photographic representation, I still feel it's an excellent way to visually display data. The chart incorporates pie charts and numbers, but it ties everything together in discrete clumps and helps lend meaning to the numbers listed.

Donors Choose

Much of the work of being a scientist is wrapped up in research, seminars, committee meetings, and writing. But a big part of being a scientist is teaching the next generation, and there are lots of ways to do that. Right now, I'm a GSI (grad student instructor). In the past, I've led a junior high science club and was the president of my college bio club.

Due to the magic of the internet, there are now wonderful ways to help the next generation without making a large time commitment. Donors Choose is a great website that allows anyone to contribute financially to schools in need by giving money to specific projects teachers have posted. Any teacher can request money to buy books, equipment, or experiences for their students.

This month, a large fundraising push has been made within the blogosphere to raise money for Donors Choose in the form of a competition between blogs. I've already made a donation via Adventures in Ethics and Science. One of the perks of donating this month are the incentives being offered by various bloggers in exchange to donating toward their fundraising goal. Additionally, Seed is running a weekly raffle for donors.

In recognition of my donation, I've received two wonderful frog drawings from the offspring of Dr. Freeride, the voice of Adventures in Ethics and Science. I also won a coffee mug in the Seed raffle, so I'm doing pretty well! See the pictures below (click through for a larger version), and go donate yourself in order to receive a fabulous drawing (or any one of the other incentives offered by the science bloggers).

Elder offspring picture:

Younger offspring picture:

Shopping Trip

All week long, I've been looking for a new pair of pants. My jeans are all falling apart on me, and I need something casual to get me through the day.

I spent a lot of time at various stores this week. I found a super cute pair of jeans at the gap, but I almost vomited when I realized they cost $60. Who pays that much for a pair of jeans? Man alive.

After much fruitless searching, I finally decided to go thrifting. I am now the happy owner of two pairs of jeans, a pair of slacks, and a nice sweater (100% silk!) for only $25. The only downside is that the sweater is dryclean only (ugh), but otherwise I now have enough jeans to last me awhile for less than the price of one pair of jeans at any of the stores I visited this week.

Spending Wisely

Just found a great new page, Spending Wisely, that I plan to peruse in greater depth when I have a bit more time. I already found a great article about how much money we should be saving each month. In the article, the author talks about the notion that people should be putting 5% (or so) away per month and how that figure is not indicative of what could be happening. Her main point is that we should be putting away propotionately more money (not just actually more money, but a higher percentage) as our income levels rise.

I completely agree with her sentiment. Even in grad school, I intend to put money away into savings each month. I'll actually be making more in graduate school than I've ever made before, since I've never had a full-time year round job (then again, I have higher expenses too, but I don't intend to spend all the money that I'll be making each month). Even last summer, when I was living on my own and taking care of all my expenses, I managed to put away almost 50% of my paycheck each month. While I expect the percentage will be a bit lower here (mostly due to higher rent), I anticipate putting away quite a chunk.

Just because you make a certain amount of money doesn't mean that you should allow yourself to spend all that money each month. Saving is just about living within your means; it's about living below your means and continuing to do so even as your means increase.

ATM fees

While I was in Europe, I used the ATM or my credit card for everything. I took no traveller's checks, and I only brought something like E200 with me from the US. My bank charged US$3 for each transaction, so I figured it would be sensible to always do the largest transaction possible.

I never quite sat down and realized the impact of this choice. Tonight, I was talking with someone about ATM fees, and I did some quick calculations.

At US$3 per transaction, I spent that much for E200. If I had taken money out in E20 increments, like some of the other students in my program, I would have spent US$30 per E200.

It gets better.

I spent roughly US$6,000 in Europe. Granted, some of this was on my credit card. For the sake of argument, let's say I withdrew US$4600 from ATMs. This adds up to US$69 in fees. If I had withdrawn the same amount in E20 increments, I would have spent US$690 dollars! I saved US$621 in fees by just being diligent and disciplined.

To put this in further perspective, I spent less than US$621 on any of my individual trips. I spent about US$600 on a 10-day trip to Spain. I spent way less than that on visiting Ireland, France, Germany, and Belgium. If I had spent that US$621 in fees, I probably would have had to forego at least one trip and possibly two.

Absolutely amazing. Money management has such a huge potential to impact one's cash flow, yet so many people focus on making money rather than managing it.