More on money management

I made an account last night with Mint.com to help manage my money and I'm really liking it. I also signed up with Wesabe.com but I didn't like that I was going to have to download my account information and re-upload it in order to make the site work.

However, Mint does not have the Social Networking aspect, just a great way to visually see where all the money is going (it let me add all my credit cards, my bank account, and my ING savings account, and see my debt/cash access in one simple page). I will probably use Wesabe in the future, after I find the patience to figure out how to use it, exactly. The video they have explaining the service is helpful, though.

I was so excited about these sites last night that S put me in "financial time out." He said I was too happy, and needed not to talk about money for a little bit. Then, he tickled me. Geez! I'm just trying to plan for the future and be wise about my money.

Making wise decisions

I'm sitting here on this Monday morning looking at the Fidelity Freedom 2040 Fund and also at starting a Roth IRA. I am definitely a long-term planner. No cost-benefit analysis needed here; it's just so obvious.

I know that my parents didn't start saving for retirement until they were in their mid-30s, and now my dad will be retiring next year, at age 61, so I think his investments have worked out pretty well (and he's also starting his own business, but that's another story). I think it sounds lovely to be able to retire at age 61, which means I've got 39 years to plan this out and do my best with my money.

I feel a little out of my depths with the Freedom 2040 Fund information, but I know I can figure it out with some patience. I'm more comfortable just opening the Roth IRA this morning, dumping some of my savings into it, and calling it good. But I also realize I should probably think about it a little more than that. Not that I haven't been contemplating the IRA situation for a while, but when Newsweek says, "A Roth IRA is one of the best savings vehibles for a young person in a low tax bracket," I really pay attention. Linda Stern's article is a good one, and I've got the basics down (I have health insurance, good credit, budget, and live somewhat small), which makes me feel pretty good.

Here's to retirement savings plans!

Edit: Just opened the IRA account with Fidelity Investments, and it was very easy and relatively fast (20 minutes) to link that account with my ING Direct account and start that retirement savings. I recommend it for ease of use. Just one tip: instead of printing all the legal agreements, I just saved them as PDFs to my computer, thus saving paper.

Personal cost-benefit analysis

So, I'm going to put it out there that I pretty much do a personal cost-benefit analysis on nearly everything in my life in order to determine the appropriate path. It's not a spiritual, touchy-feely way of looking at things, but it is a highly logical, economical, and somewhat scientific process that comforts me when I am not sure I'm making the right choice.

Say, for instance, I am running late for work on a cold winter morning, bleary-eyed from having stayed up too late the night before, heading in for a full 8-hour day at the library. Question at hand: should I hit the Starbuck's drive-through lane for a mocha?

Cost: It will probably take an extra 3-5 minutes for my commute; I will be even later for work; it's about $4 for a mocha.

Benefit: I will have caffeine; I will have warmth for my hands for the rest of the drive; I will be happier having the mocha than not.

Decision: Stop at Starbucks.

Now, there are other factors involved, like how late I actually will be, and how cold it really is outside, and the state of my credit card bill that particular month, but, in general, I look at things this way.

So when my overall department supervisor asked if I wanted to keep working 30 hours a week, or go back to 25 hours a week in January, I told him I would have to "think about it." My reason: I'm planning to take two courses at a time starting in January in order to graduate in May 2009. I also told him I was hoping to reduce the number of days that I'd have to go to work in order to work my hours (I'm thinking two 8.5 hour days, and one 8 hour day, and then 4 days off a week). He asked if I had a tentative schedule.

Well, I do, but I can't reveal my hand at this stage, because I don't know if I'll get into the classes I want to take.

"No, I don't know my schedule until mid-November. I am at the mercy of my school schedule, and driving back and forth."

Then I said I was leaning toward 'no' for taking the extra hours permanently. But I told him I would do a cost-benefit analysis on it over the weekend. He gave me a look. I said, "That's how I look at everything." It's true.

Analysis:

Cost: Working 30 hours a week means I'm at the library at least 4 out of 7 days a week (less time for homework, people I love, etc.); I'm not getting promoted, so it's still no benefits, no extra responsibility for my resume, etc.

Benefit: On average, about $200 extra per month, which equals an extra $2,400 in 2008.

Other invisible costs: After working an 8 hour day, I am less likely to work on homework in the evening rather than just having an entire day free. Being at work more than four days a week feels like I'm there all the time, and honestly, this is a part-time job getting me through grad school, not my chosen career. I'm a library paraprofessional, and don't need the stress of being at work more than 3 or 4 days out of a week, especially not if I'm taking 6 graduate credits. My free time is valuable to me, and I am able to direct my time well when I have days off.

Decision: Going to tell my supervisor that (tentatively) I want to work Mondays and Tuesdays 9-6, and every other Friday/Saturday 8:15-4:45 (25 hours a week).