Winter Commute Options

I have to confess that I’ve started driving to work. If it’s not dark in the evening when I leave work, it’s dark by the time I’ve walked all the way home and some days, it’s even dark out when I walk to work in the mornings. So, it’s become a feeling of being unsafe walking to and from work and I feel like the best solution to that for now is to just drive.

How far is my walk? To my current office, it is about 1.5 miles, which takes about half an hour to walk.

What about taking public transit? Despite both living and working in the city and it not actually being that far from my condo to my office, there aren’t any convenient public transit routes. The fastest one would shave 4 minutes off the walking route and is 60% walking anyway, so that doesn’t really help the darkness problem.

Driving takes me about 10 minutes.

  • My car gets about 30 mpg in the city, so each round trip to/from work costs me about 0.1 gallons of fuel. I was already driving to work on average 1.5 times per week because I needed my car immediately after work, without walking the half hour home to grab the car. Turning that into 5 times per week is an increase in fuel usage of 0.3 gallons of fuel per week or 1.2 gallons per 4 weeks. Additional cost of fuel per 4 weeks: ~$5
  • I’ve been averaging around 400 miles per month since buying my car two years ago. My car manual recommends service every 6 months or 5,000 miles. An additional 9 miles per week or 36 miles per 4 weeks wouldn’t force me to take my car in for service any sooner.
  • My car insurance currently has a “low mileage” commute discount, so my insurance wouldn’t go up.
  • My employer reimburses up to a certain dollar amount of parking per month. This allows me to drive ~7 times per month without having to pay anything out-of-pocket (once reimbursements come in and assuming I file the expense reports, which I do faithfully). Driving 20 times per month would cost me almost $300/month in daily parking charges. I could apply for a monthly parking spot which would run me under $100/month out-of-pocket.

I absolutely love the walk to and from work! I hate driving, as I find the afternoon traffic quite stressful. I find the half hour walk quite relaxing.

But mostly, I really don’t want to pay for almost $300/month out-of-pocket in daily parking charges. I foresee the evening darkness being a problem probably through February or maybe March, so let’s say 4.5 months. Those few months would easily cost me $300 more out-of-pocket than paying out-of-pocket for the monthly parking pass for an entire year. I wish my employer subsidized a certain amount per year, rather than per month because I don’t usually use up the monthly subsidy each month…

My boyfriend and my mom have told me to just drive because neither of them wants me walking home alone at night in the dark. Some of the areas I walk through aren’t super safe or simply aren’t the greatest lit. One of my guy friends used to tell me to “man up” and just walk and I’d be fine, but walking that far in the dark still sketches me out. I don’t listen to music or anything while I’m walking, so it’s not like I wouldn’t hear people around me.

Another alternative would be to maintain a more regular work schedule that allows me to get home before the sun sets and leave for work after the sun rises. In order to catch that, I would need to leave for work around 7:30 am and leave work for home around 4 pm. I think that it is probably do-able since my work schedule is quite flexible and honestly, I prefer going in to work early anyway. I just need to make that a routine, which is super hard when you’re used to it not mattering what time you get to work :)

One last alternative: walk to work (daylight then) and pay for a cab home. Even taking the most expensive cab option in my city would be $13 per way. If I could expense that, the cost would be quite comparable to the monthly parking pass out-of-pocket. Taking a slightly cheaper cab ride would make it come out to very little out-of-pocket cost, assuming that I could expense it. The taxi option is also the most flexible because it doesn’t require any commitments like the monthly parking pass does.

After much thought, my solution for now is to try to make the routine working hours, which are my preferred working hours anyway and walking is completely worth it to me to adjust my work schedule.

Readers, what would you do?

Advertisements

Today, I am thankful for having insurance on my car.

So I guess this is why I insure my car. I have a pretty good insurance policy, with a $1,000 deductible. My car sustained some damage last week, for which I was not at fault and the cost to repair is well over the cost of my deductible.

What is my insurance covering?

  1. All repair costs above my $1,000 deductible
  2. A rental car, for up to a month

The rental car should definitely make this less of a pain and I found a repair shop not too far from my office and home, but so far, it’s just been a bit of a shock. A bit of a shock that my car has this damage. This is the first time that something of this level has happened to my car. I’m quite surprised at the level of emotional attachment that I seem to have acquired to my car. I’m hopeful that my insurance premiums won’t go up or if they do, not by much, since this damage was not my fault.

As you all know, I keep some money set aside in my reserves fund to cover my car insurance deductible. I’m going to use this money to cover the deductible, but then that leaves me with an empty car insurance deductible reserve fund. I’m debating how I will replenish this fund and whether I will:

(Original plan) Pay an extra $2,200 against the mortgage from my October paycheck at the end of the month

  1. Replenish the car insurance deductible with the full $1,000 this month and pay an extra $1,200 against the mortgage from my October paycheck at the end of the month
  2. Follow the original plan and never replenish the car insurance deductible fund since really I can pay for this problem out of extra cash flow
  3. Replenish the car insurance deductible at some rate of say $200/month and then pay an extra $2,000 against the mortgage from my October paycheck at the end of the month

Honestly, I”m most likely going to go with option #1. Having the funds set aside specifically for this, even though I have plenty of other savings made this a lot less stressful.

Happy Monday, readers, Happy Monday.

Financial Priorities

One of the biggest learning curves after investing in understanding and working with my finances over the last several years has been trying to figure out what my life and financial priorities are and how I should keep my spending in line with those.

Some examples:

* Dinner out with coworkers when I have leftovers at home and I’ve already eaten out once or twice that week? Not really important to me.

* Going out drinking/clubbing every Friday night? So not important to me. I prefer my Friday nights to be quiet nights at home where I can unwind from the long week and eat leftovers. There, I said it – I look forward to eating leftovers on Friday night.

* Having a super fancy car, such as an Audi or a sports car that accelerates really well? Not important to me, but having a car that is reliable, is cheap on gas, and gets me from point A to point B well with a radio, comfortable seats, and bluetooth audio is important to me.

* Feeling comfortable in the space that I live in is incredibly important to me. Living by myself and in a nice apartment building offers me that comfort, though it is quite expensive.

* Playing whatever sports I so choose and picking up new ones randomly is something that frequently causes me to go over budget. I’m working on that.

* Helping my sibling out occasionally with small things and buying nice presents for my parents is really important to me since they have supported me quite well throughout the years and they still help me out when I don’t really need it on occasion.

* I could not imagine living without internet at home.

* I used to have a prepaid cell phone, but with my busy schedule, having my calendar, to do lists, and (personal) email on my phone eventually became incredibly helpful, so I bit the bullet and got a smartphone last year. I’m still not convinced that it’s worth $80+ per month, but it’s definitely worth at least $50 per month to me.

* I don’t see a point in paying someone to clean my apartment when I can do it with minimal effort since my apartment isn’t too big and one small person doesn’t create too much of a mess.

* I prefer to buy clothing from brands where I know exactly how a particular item will fit. This saves me a lot of time since I can buy some items online by buying the same brand and size, such as shoes, socks, bras, sportswear, etc. I finally found a particular brand of jeans at Nordstrom that always fits me and they do alterations in-house which makes jeans shopping so much less stressful. I pay for some of these conveniences, but it is worth it to me.

* I love traveling, even though I have barely enough vacation days to take any long, interesting trips. This is important though and can add up quite quickly.

* I eat out for lunch almost every day. I find that eating leftovers for dinner is more time and cost efficient than for lunch since I pay an average of $7/meal for lunch out, but dinner would run closer to $20/meal out and I just don’t eat enough of the portions for that to be worth it.

* My health and mental sanity is incredibly important to me. I will spend whatever it takes to work on that.

* I like having a small laptop computer that can actually be used for something beyond just going on the internet. (No, I don’t play video games.) But that adds up – the one I bought in 2011 cost about $1,500 and my previous one cost about $1,700 four years prior to that. This laptop was worth every penny of that to me.

* Investing for retirement with the power of compound interest is important to me. My goal right now is to invest 20% of my gross income for retirement by maxing out my 401(k) and my Roth IRA if I’m eligible.

So what does this financial picture look like if we try to categorize it and put it in a priority order, with my average monthly spending in 2011?

  1. Housing ($1,700) + down payment savings ($2,500)
  2. Retirement investing ($1,800)
  3. Health and Fitness ($200)
  4. A car that reliably gets me from point A to point B ($250) + car replacement savings ($250)
  5. Travel ($170)
  6. Electronics ($160)

In 2012, my travel spending is going to go up, but my electronics spending will go down. Since my housing expenses have gone up, I’m saving less money each month towards a down payment, so I doubt I will average $2,500 per month in down payment savings this year, but slightly over $1,200 per month would help me hit my new down payment savings goal.

Readers, what are your financial priorities?

Financial Goals for 2012

Save as much as possible:

1. Max out my traditional 401(k) – $17,000.

2. Invest 20% of my gross income. Use my Roth IRA to the maximum that I am eligible and invest the rest in my taxable investment account.

3. Save $3,000 towards a car replacement in 9 years by automatic transfer of $250 each month.

4. Re-pay the various savings buckets that I borrowed from to form my down payment in priority order: taxable investments, emergency fund (including improving it to 6 months at the new level of expenses), car replacement. Estimate of completion of each in order: January 2012, August 2012, November 2012. (Total: ~$20,000)

5. Put any leftover savings amounts after paying myself back into an “other” savings account and figure out what to do with this in 2013 when I will have extra monthly cash flow.

Have excellent credit:

6. Make all mortgage payments on time.

7. Make zero requests to change the limits on my credit cards throughout all of 2012 – let the credit card companies come to me.

Keep financial anxiety to a minimum:

8. Maintain my system of: a) nearby credit union for checking, most/all of my emergency fund, vacation savings, and other small and/or short-term goal savings, b) Ally for larger, more long-term savings amounts (e.g. car replacement and down payment funds).

9. Only check my checking account once per week, to ensure that there were no fishy transactions.

10. Only check my Vanguard account on the 2nd business day of the month (when the previous month’s dividends post in my 401(k) account). Wait until they post to write my monthly summary.

11. In January, create an investment plan for the year and stick to it.

Net worth:

After much deliberation, I decided not to set a net worth goal for the year. With the bonus structure of my income, my income could swing wildly in 2012, so I didn’t want to make a goal that could be unachievable despite huge efforts on my part. I am going to concentrate on how much I am saving and investing in 2012. I will still track my net worth, but I’m not striving for a particular number. If I hit all of the above savings and investing goals, then I will be saving about $50,000. That could turn into a net worth increase of $50,000, but it could not, so I don’t want to spend the year stressing about that.

Income/Savings:

Since I bought my condo and will move in in February, my spending will change a bit and my monthly savings will go down a bit as well. I am anticipating about $10,000 gross in more income in 2012 than what I earned in 2011 which should translate to about $7,000 more in savings and investments, but we will see how that plays out.

Mortgage:

I don’t plan on making any mortgage pre-payments in 2012 because I don’t want my condo to be too high of a percentage of my overall net worth and I will spend a good portion of my discretionary savings paying back my various savings buckets. I will re-evaluate this decision once I have re-paid all of my various savings buckets.

Transportation budget update

I finally took my car in for its one-year check-up! That was quite exciting, especially when I found out that the first service is free (if you take it back to the dealership where you bought it, which I did).

I’ve definitely been over-budgeting for car maintenance. There is currently about $200 in that category.

My car maintenance plan for 2012 is:

  • $50 for oil change and service in April
  • $50 for oil change and service in October

That combined with the $200 means that I have about $100 extra in the category to get through 2012, so I will remove the extra $100 with my adjustments for November’s budget.

My boyfriend put gas in my car last month, so I didn’t need to and I will most likely have some leftover funds in my gas budget at the end of the month since I don’t see myself buying two tanks of gas in October.

So it looks like I can remove about $150 from my transportation budget for November and push that over to savings! :)

Budgeting for car maintenance

Every month since I bought my car, I have budgeted $25 per month for “car maintenance”.

I’m not really sure what this entails other than oil changes. My owner’s manual says to change the oil every 5,000 miles or every 12 months, so I will get it changed at the 12 month mark, but I get my first oil change for free at the dealership where I bought my car, so that won’t cost me anything this year.

In January, I bought an ice scraper/snow brush for $20 and I deducted that from my “car maintenance” budget.

I reduced the “car maintenance” budget to $8/month, but I need to make sure that this number is well-founded.

Here is the breakdown of my monthly transportation budgeting:

  • $105 Auto insurance policy
  • $22 Umbrella insurance policy
  • $100 Parking in my apartment building
  • $8.33 Car maintenance
  • $1.25 Driver licensing (Yes, I take the $75 every-five-years driver licensing fee and split it up monthly so it doesn’t sneak up on me)
  • $48 Fuel (1 full tank of gas at $4/gallon)
  • Total: $284.58
What am I missing other than oil changes? How much should I expect to pay for those each time? $50? $100?

Goals for 2011

Save as much as possible:

1. Max out my Roth IRA – done in early April.

2. Max out my Roth 401(k).

3. Bump my emergency fund up by $4,000.

4. Save $3,000 towards a car replacement in 10 years.

5. Save $20,000 towards a down payment on a house.

Have excellent credit:

6. Have a credit limit of $1,000 on my Amazon.com Rewards Visa card.

7. Raise the limit on my primary card.

Reduce financial anxiety:

8. Have only one checking account that I actually use – done in early April.

9. Don’t check my bank accounts daily. (I’ve never overdrawn, so this is a safe goal.)

10. In May, only enter my receipts into my spreadsheet twice – once on the 15th and once on the 1st of June.

11. Only check my Vanguard account on the 2nd business day of the month (when the previous month’s dividends post in my 401(k) account).

12. Make no more trades until January (except to convert the traditional IRA back to a Roth IRA).

And one final, golden goal:

Achieve a net worth of $100,000.

I would say that all of these goals are attainable, but the ones to reduce financial anxiety will likely be the most difficult.