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Net Worth Update: November 2015 – January 2016

New Year, new update! It’s a really exciting time here at Poorer Than You, and I can’t wait to- OMFG WHAT IS THAT GRAPH DOING?!?

Net Worth Graph January 2016 - Poorer Than You

So November was down, but by such a small amount that I can comfortably call it “flat.” And I anticipated a “down” month anyway: November has one of those pesky long holiday weekends in it (Thanksgiving), it’s a time where sickness generally strikes, and (let’s face it) Fallout 4 was released on November 10th.

Sure, you can tell me that the release of a hotly-anticipated video game is a lame reason for my income to decrease over the month… but keep in mind that gaming is my main hobby, and I do it for charity. I took several days off in November and December to play Fallout 4 in live game-a-thons and it was totally worth it, just to see $2,615 raised by the games for clean drinking water in the developing world.

December was basically flat as well, which is a feat unto itself, considering the time off for the game-a-thons and the holidays, and Christmas shopping. I always anticipate December being a “down” month, so seeing it actually tick up (even if only a little) is cause for celebration.

Until you get to January, that is.

Urgh, January. Such promise for recovery after December’s spending. But this particular January just didn’t cooperate. I lost a big chunk of cash-on-hand to the year-end quarterly estimated tax payment, for being a freelancer. That’s alright though, since it’s offset by a decrease in my tax liability, as well. But everything else about the month just sucked. The stock market took a beating, though that’s only a problem on paper. It can fall further for all I care, so long as I’m buying right now (which I am: a contribution every time I receive payment on an invoice!).  We also dropped a good chunk of change on travel expenses for a friend’s upcoming wedding across the country. (Continuing to put money into our Wedding savings account years after our own wedding doesn’t look silly at all right now, does it?)

The real problem with January is that toward the end, we got three feet of snow dumped on us over the course of 24 hours. Everything in the region shut down and, thanks to the timing, neither husband nor I were able to do any work projects while snowed in.

But hey, we made it out of the snow storm safe and sound, no worse for the wear (other than the loss of income). Obviously, we’re going to have to spend February hustling our asses off to make up for it. That’s just how it is.

Also, if you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on Rockstar Finance!

Bonus for February: For those of you following along on our “Holiday Tree” exploits, I have an update for you. Here’s the tree in all its Valentine’s Day glory:

Valentine's Day Tree - Poorer Than You

(Yeah, I missed getting a picture of it as an actual Christmas tree for you. I’m the worst. My apologies. Maybe next December!)

Net Worth Update: October 2015

I can’t get over how quickly stores can just move on from Halloween. The husband and I took a stroll over to our neighborhood grocery store earlier today, and somehow they’d managed to move out nearly all of the Halloween cereals, and replace them with Christmas ones. Personally, I’m still clinging to my glittery black-and-orange decorations around the apartment, but I can at least move on into November by closing out the books on October’s money numbers:

Change: $4,346 or +19.03%

October Net Worth: $27,184

Net Worth - Poorer Than You - October 2015

Awwwwww yussssssss! I can’t take huge amounts of credit for this month’s jump, though. I did diligently contribute 12% of my earnings to retirement accounts, and pound away as usual at my debts. But the real big hunk of that growth came from within my retirement accounts themselves. I guess the stock market recovered alright from last month’s little tumble. Of course, as someone who is currently buying stock, and not selling it, I wouldn’t actually mind if it went ahead and stayed down for a bit. I hate it when stocks aren’t on sale anymore!

Still, it does help move me along toward my goal of $38,901 by September 2016, so that’s good.

Since I don’t have much else to share this month (with the stock market doing all the work for me), I’ll just end here with a picture of my Halloween Tree (soon to be slightly redecorated into a “Thanksgiving Tree” and thereafter into an almost standard “Christmas Tree” though with more LEGO than most Christmas Trees usually have):

Halloween Tree -

Happy All Hallows’ Day! (The day after All Hallows’ Eve, which was Halloween!)

Also, if you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on Rockstar Finance!

Net Worth Update: February – September 2015

Hello chilllllllllllldren! It’s Three Dog- wait, no, that’s not right. This is Stephonee, not Three Dog. Sorry, I’ve been playing a lot of Fallout 3 recently. But let’s talk about my collection of real-world money, not bottle caps:

February: $15,334 (-$640 or –4.01%)
March: $15,870 (+$535 or +3.49%)
April: $17,841 (+$1,971 or + 12.42%)
May: $23,478 (+$5,637 or +31.60%)
June: $23,298 (-$180 or –0.77%)
July: $23,651 (+$353 or +1.52%)
August: $24,247 (+$596 or +2.52%)

And currently…
September: $22,838 (-$1,409 or –5.81%)

Net Worth Graph - September 2015

Credit Card Debt?!?

Those of you paying close attention and digging deep into the numbers (so, uh, probably no one) would have noticed that starting in February, I had a sudden addition to my Debts: $3148 in credit card debt that totally wasn’t there before.

Before anyone flips their shit on me – here’s the deal:

  1. My husband and I bought a couch, after saving up for it. Obviously, it was a ridiculously expensive couch ($3148!), but it’s a really friggin sweet couch and like I said, we saved up for it. (It’s a Sactional from LoveSac – it comes apart for easy reconfiguration and moving, which fits our renting and having-people-over-lots lifestyle.)
  2. Toward the end of saving up for the couch, I laid in wait. Stalking LoveSac’s website, I waited for the best deal to come up. And then suddenly, a post-holiday sale appeared! 20% off the couch covers and 36-month 0% interest financing. BINGO!
  3. I pounced on that offer like angry Lion King Simba (adult Simba, not JTT-baby Simba). The idea was that I’d get the credit card they were offering (in both my name and my husband’s), improve everyone’s credit scores, and make the monthly payment out of the very savings account where we’d saved up, earning interest on the balance the whole while.
  4. That worked like a charm, but something about only earning 0.75% interest on the money sitting in the savings account bothered me. Probably the “earning less than inflation” thing. So I took all the money out of the couch savings account, and threw it at my highest interest rate (5%) student loan. A month later, I was able to pull together the remaining $635.73 owed on that loan, and knocked it right out.
  5. So now I have one less student loan payment ($79.55/month at 5% interest) and a credit card payment in its place ($88/month at 0% interest).

On the surface, it looks like voodoo trickery: I traded a student loan payment at 5% interest for a credit card payment at 0% interest, and got a free couch out of the deal! Except, no. That’s not what happened at all. That line of thinking completely ignores the months beforehand, when my husband and I spent time and money saving up for the couch/loan payoff. Don’t ever make the mistake of ignoring the hard work part of how these things work.

I’ve Gone Rogue

Wesley: I’m a Rogue Demon Hunter now.
Cordelia: Wow. What’s a rogue demon?

– “Parting Gifts” Angel

Much like Wesley Wyndam-Pryce after his unceremonious firing from the Watcher’s Council (clueless gits!), I’ve left the corporate world once again to go it on my own as an independent contractor. Though there are obvious drawbacks (paying for my own health insurance, pay inconsistency, quarterly estimated taxes), it’s the right course of action for me because of all the tasty benefits:

  • Paying less for my health insurance because I’m not locked into the one-and-only option my previous employer offered
  • Jeans and hoodies all-day erry-day
  • Completely setting my own schedule and changing it on a whim
  • Working with some of my very favorite past coworkers on their current projects
  • Having the amount of money I bring in explicitly tied to the work I produce
  • Pay security: rather than one stream of income, I have multiple now. If one ends, I can just ramp up the others the very next day and see no dip in income.

That last one is probably the biggest, for me. During an email exchange with a high school friend, he told me that he’d never be able to do the “gig economy” thing because he needs that sense of security about where he’ll be in 2-3 years. Fair enough, but for me, I like the sense of security I have about right now and knowing that should a client decide to dump me, or go bankrupt, or even if I just decide I don’t want to work on a certain project anymore, I’m not going to have to scramble to look for work or go on Unemployment. That’s what security means to me.

Heck, it’s why I can write this post in the middle of the day on a Thursday in my pajamas. Because I love being a stereotypical millennial blogger, and also because I can get more writing done if I just tell myself not to shower until I’ve finished a friggin post.


September 14th, 2014 was my goal date for a positive net worth, and I nailed it. I haven’t set any additional goals since then, but considering it’s been one year since that date, it’s a good time to do a check-in:

+$18,895 year-over-year (September 2014 – September 2015)

Yeah, I’ll take it. That’s some good growth.

It’s not a hugely ambitious goal considering what I’ve already achieved, but I’d like to see my net worth hit $38,901 by September 2016. That’s exactly 7 years after my all-time net worth low of negative $38,901 in September of 2009, so it would be some nice symmetry. Even better if I can manage it in 6 months (by the end of March 2016) instead of a year from now.

Got any other ideas for goals I should set right now? Throw those in the comments – I’d love to know what goals other people come up with for me!

Also, if you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on Rockstar Finance!

Hallelujah! TurboTax is Offering Free Federal AND State Returns This Year

If you’ve got a simple tax return, you are in for some serious good news my friend: TurboTax just announced a new product, TurboTax Absolute Zero, which will let you file a federal 1040A or 1040EZ and a state return, for precisely $0. FREE. And no additional costs for claiming your earned income tax credit or complying with new health care laws, either.

TurboTax Absolute Zero

So if your return is fairly straightforward (unlike mine, with all this self-employment yadda-yadda), rejoice! And get yourself over to TurboTax right now to start your return. You don’t even have to be ready to finish it today; you can just get it started right now and finish it up when you have all of your paperwork in hand.

Remember, if you’ve got a refund coming to you, you get it sooner by sending in your return sooner. And if you’ve got a tax bill due this year? Well, I find it’s better to know that sooner, too. You can hang onto the completed return and file it sometime before the April 15th deadline, so why not do your return ASAP?

Image Source: The TurboTax Blog

Net Worth Update: January 2015

New year, new job… but how’s it all shaping up? Let’s take a look!

Change: +$4,294 or +36.76%

January Net Worth: $15,975

Net Worth Graph January 2015

A nice (very nice!) change there. But, I don’t expect the trend to continue at quite such a speedy way. This month, there were a lot of boosts to my accounts from the start of the year (matching deposits into retirement accounts), whereas next month, I expect to be shelling out for at least one big expenditure: a new computer. And not just any old computer – I’m pimping out the best built-from-scratch computer I can afford in order to handle the livestream broadcast for my charity fundraising group, the U-Pick Video Game Marathon for Charity.

Who wants to play video games?

Not that, you know, I won’t use the new computer for other things than charity fundraisers. It’ll replace my seriously aging laptop, and I will use it’s awesome power to handle new video games to… play lots of new video games. Or at least, work through the ridiculous backlog of Steam games I’ve picked up during Steam sales and Humble Bundles.

But anyway, my husband and I have been saving up for new computers for a while now. In December we bought him a new Chromebook with some of the money in the “New Computers” savings account, and this month, we’ll be spending the rest building our ridiculous gaming/streaming rig. Success!

What savings goal are you looking forward to reaching, so that you can finally buy, build, or make what you’ve been saving for? Let me know in the comments, below!

Also, if you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on Rockstar Finance!

Net Worth Update: March – December 2014

Hello boys.... I'M BACK

The conflict of interest that put this site on hiatus is over. The future holds a lot of updates and changes to the blog, but before we get into any of that, let’s do a post just on what happened in my personal net worth while I wasn’t writing:

March: $842 (-$1,145 or -57.62%)
April: $133 (-$709 or –84.20%)
May: $2,818 (+$2,685 or +2018.80%)
June: $3,842 (+$1,024 or +36.34%)
July: $3,117 (-$725 or -18.87%)
August: $5,933 (+$2,816 or +90.34%)
September: $3,943 (-$1,990 or -33.54%)
October: $10,272 (+$6,329 or 160.51%)
November: $10,707 (+$435 or 4.23%)

And currently…
December: $11,681 (+$974 or 9.10%)

Total change, from the last update to now:  +$9,694 or +487.87%

December 2014 Net Worth Graph

A few goals hit their deadlines…

You may recall the main goal I was working toward: getting to a positive net worth by September 16th, 2014 (10 years from the date I took out my first student loan and my net worth slid into the negative). And I did tentatively call that goal “achieved” back in February, when my net worth rose into the positive numbers for the first time in my adult life.

Now that September 16th, 2014 has passed, we can look back and see that, yes, I did it! Though my net worth did wobble dangerously close to the negative line again, it stayed positive right through September and for all the months since then.

Achievement unlocked: Positive Net Worth

Just having achieved that goal will make me pretty unbearable to deal with for a while. But I also had another, lesser-discussed goal on the table. In November of 2013, I declared a new goal to see my retirement accounts hit a total of $30,000 within a year.

I managed to slide in right under the wire on that one: by the end of the month of November, my retirement funds totaled $30,689!

Achievement unlocked: $30,000 Retirement Savings

Two ‘cheevos unlocked? That calls for a celebratory “The West Wing” gif set:

Victory is mine, victory is mine! I drink from the keg of glory, Donna. Bring me the finest muffins and bagels in all the land.
It's gonna be an unbearable day. *Josh celebrates*
gif set by kinneys on tumblr

What else happened?

The line graph for these months is awfully squiggley. Ups and downs were had, to be sure.

But that was expected. I started a new job, which paid less than my previous position, but had better benefits. My commute changed, and suddenly I was leaving my car at home for days at a time and reading the entire A Song of Ice and Fire series on bus and train rides.

I got married, and went on a honeymoon. My now-husband (!) and I saved up; paid for most of it ourselves, but also received generous help from friends and family for both events. We set up a “honeymoon registry” so that most of the wedding gifts we received were contributions to our honeymoon fund.

So we saved, and received some gifts. And all of that went right back out the door as we spent on the wedding and splurged on the honeymoon. It could have turned out to be a flat year – and I wouldn’t have been surprised, really. But the overall trend was, despite it all, upward.

And I still got my ‘cheevos.

To combine or not to combine…

While I was tabulating all of these net worth numbers, my husband walked up behind me to ask a question that had been rolling around in my own head as well:

Should we be including all of my husband’s information in these net worth updates?

The short answer: no.

I don’t keep an eye on my husband’s account balances day-to-day, so I’m not going to do it for the monthly net worth update, either. We have a few joint savings accounts (one for each common goal that we are both working toward), but have otherwise decided to maintain our separate accounts. He sends me a monthly Person2Person payment between our Capital One 360 checking accounts to cover his share of the monthly household expenses.

Besides, this blog is my financial journey. Though his help and income certainly play into that, his accounts (that I don’t touch) do not.

Dance party time!

Two ‘cheevos and a wedding this update? I’m feelin’ that it’s time for a dance party. Join me in the comments for some untz untz (animated dancing gifs, YouTube embeds – pick your poison).

Also, if you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on Rockstar Finance!

Poorer Than You is on Hiatus

With a heavy, conflicted heart full of mixed feelings, I’m announcing that this blog is going on an indefinite hiatus. And no, it’s not an April Fools’ joke this time – even though it turned out to be true for a while last time!

Yes, I get that the timing is unfortunate and that some of you will still believe that this is an April Fools’ joke. But that’s the reason I’m publishing this post today (March 31st), to dispel most of the doubt regarding the legitimacy of this. And those of you who still believe this to be a prank, well, you’ll see when no new posts go up, unfortunately.

This is all happening because I am starting a new job, one where writing for Poorer Than You would be a conflict of interest. It was not an easy decision to take the job given this condition, but I did think long and hard about what I want and need in life, and made the decision to sacrifice PTY for my career. It’s somewhat funny and a little ironic – PTY is definitely the one thing I can point to and say “that is what launched my career,” and now, it isn’t allowed to help me any more. But sometimes, that is how life goes.

Thankfully, the archives of PTY will remain online – so you will be able to browse all of the old posts, articles, and net worth updates. There’s some really great stuff in there, so I hope while you’re here reading this, you’ll poke around (via the categories in the left sidebar).

As a part of the hiatus, comment posting will be turned off. This is because it would also be a conflict of interest for me to reply to comments on the blog and answer questions. And I would really hate for someone to post a question and wait forever for an answer that I’m not allowed to give, so I will simply be shutting comments off to prevent this. This, perhaps, is the saddest part for me – I will truly miss the great comments and discussions this community engages in.

Will this blog ever come back? I truly don’t know. Probably? I can’t say what the future holds, but I do know this about myself: if it’s ever not a conflict of interest any more, then I will post again. When or whether that will ever happen is what’s unknown, though. If you want to be here for the possible resurgence, I recommend signing up for the email subscription feature with an email address you plan to keep checking for years to come. That way, if/when PTY has new posts, they will be emailed to you, so you’ll know when I’m back.

Take care of yourselves, read lots of other personal finance blogs while I’m gone, and be good to each other.

With <3,

Net Worth Update: February 2014

Prepare yourself for a lot of exclamation points, bold text, italics, and maybe even some ALL CAPS… because this is the most exciting Net Worth update in Poorer Than You history, and I’m super stoked about it. So forget about this intro… LET’S GET TO IT!!!

Change: +$7,456 or +136.33%

February Net Worth: $1,987

Net Worth Graph February 2014

YOU GUYS. LOOK AT IT! There’s a new line! A line that indicates the difference between negative and positive! AND MY NET WORTH LINE CROSSED THAT LINE! What, what, WHAT is this, I don’t even?!?


The obvious one: the cash increase of over $8,000. Unfortunately I can’t actually provide much insight into this, as all I really feel comfortable saying is that some checks that were owed to me came in. And I cashed them. This filled up my Emergency Fund, most of my Wedding Fund, and even my regular savings goals for the time I’m expecting to be unemployed/underemployed.

I won $500 in Capital One 360’s “What are you #SAVING4” contest, just by tweeting a picture of my fiancé and myself, telling them I was saving up for our wedding. Haven’t I said that Capital One 360 is my favorite bank? LOVE IT. And that $500 will certainly be helpful for our wedding, so I’m quite a happy camper.

My car increased in value again. This is just one of those fluke things – some times of year, a 2004 Toyota Camry is just worth more than other times. I get the value from Kelley Blue Book every month, not from any “depreciation” method or anything like that – so it’s helpful to think of my car’s value like stock values: it goes up and down with the market.

Speaking of the stock market: I had a pretty good month there, in my retirement accounts anyway. Also bolstering that value is some cash that I put aside in a savings account. Remember when I used to put all my retirement savings in a savings account? (Yeah, that’s a link to a Net Worth Update from 2008. Old school.)

For the time being, that practice is back. With the whole “unemployment/underemployment” thing I’ve got going on right now, it seems too risky to put money directly into my Roth IRA, where it’ll be locked up. Putting it in a savings account “holding pattern” means I can get at it if I completely drain my emergency fund, or I can move it to my Roth once I get a job.

So you might be wondering why I keep writing it as “unemployed/underemployed.” The truth is, I’m actually not completely unemployed at the moment – just “underemployed” (working less than full time). I picked up a freelance project just last week (one that I’m super excited about, by the by), and I’m hunting some leads on more freelance work. All while interviewing and job hunting for full-time work. Not really a surprise, as I’m just not a person that can sit still without a project to work on for more than, uh, 2 seconds.

So about that “Positive Net Worth by September 2014” goal…

Yeah, so, back in October of 2012, I set a goal for myself to have a positive net worth by September 16th, 2014. I guess this update means that I, technically, have achieved that goal. Woohoo! Dance party!

But, you know, it probably only really counts if I can keep it positive through September. Or, if it does dip back down in the negatives (I am underemployed, after all), get it back up into the positive numbers again by that day in September. But whatever – this is a really good milestone on my financial journey, and I intend to continue my dance party.

Feel free to dance with me in the comments!

Also, if you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on Rockstar Finance!

How Much Should You Spend on Renting an Apartment?

Unfurnished Apt for Rent by turkeychik on flickr

True story: back in July, I got a notice that my rent was being raised. I’d lived in the apartment for almost two years, and they pulled this trick on me the previous year: raising my rent by $104/month.

The first time, I just accepted the rate increase. After all, I’d received a sign-on deal of “$50 off each month’s rent!” when I first moved in, so it only seemed like an additional $54/month rent increase (above the deal wearing off).

But after the second year, they wanted to raise it another $114/month! And actually, they offered an “alternative” as well: to install all new appliances in the apartment, and in doing so, raise the rent $141/month (thanks?).

Since the first rent increase, I’d taken some of the burden off myself by moving my boyfriend into the apartment and splitting the rent a bit. But with the additional rent increases, the question became:

Could we afford to spend an additional $1368-$1692 (total) on rent in 2014?

What about Buying?

In some cases, the adage that “you’re throwing money away when you rent” can actually be true. In other cases? Not so much. If you’ve got money saved up for a down payment, there’s only  one way to be sure whether buying or renting will save you money: run the numbers.

Don’t feel daunted by the idea of running the numbers, because The New York Times has a super handy-dandy Renting vs. Buying Calculator which can do most of the work for you!

Do a quick search on Zillow for a place that you would actually be interested in buying (be realistic), then enter the purchase price for that into the Times calculator, along with the rent on apartments you’re looking at (or your current rent, if you’re not shopping yet).

In my case? The calculator spit out a pretty clear answer:

“If you stay in your home for 5 years, renting is better. It will cost you $13,412 less than buying, an average savings of $2,682 each year.”

Ouch! $2,682 more per year – and that was based on a comparison to my raised-rent number for 2014! That means it would be an increase of $4,374 per year. Yeah… that’s not in the cards.

So if you’re like me, and you determine that renting is better than buying (for your situation), now how do you figure out how much you can afford to pay in rent?

Rules-of-Thumb for Calculating Rent Affordability

#1: The Rules Apartment Complexes Use: 33% of Gross Income, or Annual Income Divided by 40

If you’re just looking for a really quick calculation, something very general, these are the rules-of-thumb for you.

Method A: Just take the total you make in a month, before taxes or retirement contributions or anything is taken out of your paycheck, and multiply it by 0.33 to get the maximum rent you can afford. So if you make $50,000 a year:

($50,000 divided by 12 months) = $4,166.66 per month

$4,166.66 times 0.33 = $1375.00 per month in rent, maximum.

Method B: Take the total you make in a year and divide it by 40. In our $50,000/year salary example…

$50,000 divided by 40 = $1250.00 per month in rent, maximum.

I find that Method A tends to overestimate how much you can actually afford, for most people. So why use it? Because it’s the rule that some apartment complexes will use to check and see if you can afford the apartment (as far as they’re concerned). It’s what my last apartment used when I signed the lease, and there are plenty of other leasing companies that use this rule, as well.

So this rule is good for finding the very maximum amount of rent you can consider and hope to be approved for the apartment. But I can tell you that all things considered, $1375/month seems awfully high to me for someone making $50,000/year.

Method B is still a little high, but again, useful because you know an apartment complex might be using it as their formula for what you can afford. So if this is all the calculating you want to do, I recommend Method B. It’s easier math (fewer steps!) and it’s not as overly-optimistic as Method A.

#2: Debt-To-Income Front End Ratio: 28% of Gross Income

If you were buying a home instead of renting, this is one of the calculations that banks might use to come up with the mortgage payment you could afford. So it’s useful for our purposes – we’ll just substitute in “rent” where a mortgage would be!

But wait, there’s more! For this debt-to-income (DTI) “front end” calculation, that number would include homeowners insurance for anyone calculating it for a mortgage. So you should include renters insurance, instead. My own renters insurance costs me about $150/year, so feel free to steal that number as a baseline, if you don’t know what your renters insurance will cost you.

For our $50,000/year ($4,166.66/month) example:

$4,166.66/month times 0.28 = $1166.66 per month total rental costs

$1166.66/month minus $12.50/month renters insurance = $1145.16 per month in rent, maximum.

A pretty simple formula, and the resulting number seems much more appropriate for someone making $50,000/year. But can we find an even better formula?

#3: Debt-To-Income Back End Ratio: Total Debt Payments <36% of Gross Income

We touched on this calculation back when we had this same discussion about how much you should spend on a car. As I noted then, the problem with this calc is that if you apply Calc #2 (DTI Front End Ratio) as well, that leaves only 8% of your income for all debt payments other than housing. This still seems insane to me – are banks assuming no one ever has any student loans or a car payment that’s more than $100/month?

But let’s do the math with our $50,000/year earner example, just to see how it shakes out. To make things easy, we’ll use my exact numbers from my real life for the other debt payments:

$4,166.66/month times 0.36 =  $1500/month for all debt payments, including rent

– $194.02 (car payment for a used 2004 Camry)
– $284.52 (student loan payments)
– $12.50 (renters insurance)
– $6.61 (car property tax – yeah, that’s a thing I have to pay in Virginia)
$1002.35 per month in rent, maximum.

Does that sound reasonable to you? It might – depends completely on the region you’re living in. What it means is that where I’m living (northern Virginia, just outside of Washington, D.C.) you can’t get a studio or 1-bedroom apartment on $50,000/year (without a roommate, and using this calculation, of course).

It also means that a bank would probably not approve me for a mortgage around here, if I were making $50,000 or less, based on my other debts. But in another part of the country, that might be plenty for rent or mortgage payments.

If you’re using this formula, you’ll need to do a lot of adjusting for your own situation. For example, if you don’t have a car (and thus no car payment), but you rely on public transportation, you’ll want to include some or all of what you pay for public transit when you do the math.

And the winning formula is…

Personally, I like rule #2 (DTI Front End, 28% of gross income) the best. It’s a really simple calculation that gives you a realistic answer, fast. I think the formulas in #1 are too optimistic about how much a person can pay, which could leave you renting an apartment you can’t actually afford.

And while I like that #3 takes into account how much you are spending monthly on your other debts, I think that for most people it’ll end up being too restrictive. But, there’s hope for it still – if you adjust the percentage to something that give you a bit more leeway (40% of gross income for all debt repayments, maybe?), you might just find a number that suits you better.

(Photo credit: turkeychik on flickr)

I Sold My Hair on Ebay

Do you ever look around your home, at all the varied things you own, and think “There’s just so much stuff here… I bet I could pare it down and that at least some of it would be worth some cash.”

Or maybe someone (like one of us crazy personal finance bloggers) said that you can pick up some extra cash unloading some of your unused junk on eBay. It’s a nice thought, right? Get rid of something you’re not using, pocket the cash.

Well, something along those lines happened to me. Sort of.

Warning: If the title of this post grossed you out, you’re probably not going to like the rest of what follows. Especially the fact that there are pictures. Don’t say I didn’t warn you!

Huh? What? You Sold WHAT on eBay?

My hair. See, what originally happened is that I decided to take my hair from long (three-quarters of the way down my back) to shortish (just below my ears) – and to donate, instead of discarding, the cut-off hair. I kept the sawed-off ponytail, with the intention of donating it to Locks of Love.

When I did a Google search to find out how to send my hair in, however, I found that there is some controversy out there regarding Locks of Love. Unable to pin down exactly the right place to donate my hair to (at that time), I started researching the alternative: selling it.

At first, I was a little discouraged. Though long enough to meet most requirements, my hair has what some websites designated as a “fatal flaw:” it’s curly. Straight hair is, according to many online guides to hair selling, the most sought-after and highly-priced type of hair.

But still, my hair met all of the other requirements for a good sale, namely:

  • Clean
  • Undyed
  • Long enough (10 inches or more)
  • Chemical free (in my case, completely free of harsh chemical use, since I practice no-shampoo washing)
  • Free of heat damage (I do not use hair dryers, curling irons, or straightening irons)
  • From a non-smoker who doesn’t take any drugs

So with my ponytail in hand, I logged on to make my first-ever eBay listing.

Actually Selling My Hair on eBay

First, I considered the fact that there are sites dedicated solely to the listing of hair for sale – sort of eBay or Craigslist specifically for hair. But these sites charge you money to list your hair, and since this isn’t likely to be something I do very often, I felt that the no-cost initial listing of eBay was the best bet.

I found this guide called “Selling Hair Facts” written and posted by Karen Shelton on a message board on It’s quite comprehensive, and she won my heart by starting the post off with an explanation of my favorite O’Henry short story, “The Gift of the Magi.”

One of the things Karen Shelton’s post addressed was the risk of not getting paid for your hair, with some services. This is the reason I decided to use eBay and take only PayPal as payment, since PayPal offers some protection for sellers that you would not get by accepting a personal check or money order.

Another thing Shelton’s article pointed out was that hair with a “natural wave” in it might actually garner some real attention and cash, so I went for it.

I took several pictures of the ponytail of hair itself, next to a ruler (to demonstrate the length), one in indirect sunlight and one with the camera flash, to give a good idea of the color.

One thing that I also had was a picture (that didn’t show my face) of how the hair had looked on my head, immediately before I cut it. It was a coincidence that I even had the photo, but it worked out well –  I think people buying hair want to see it in its natural environment.

With these pictures, I wrote up a detailed description of my hair, its length, its color, and all the attributes that I listed about (undyed, no chemicals, etc.) and put it up on eBay with the title “11″ Ponytail of Honey Blonde Curly/Wavy Human Hair” and an opening bid of just $0.99.

Why 99 cents? Because it was an experiment, first and foremost. More than making money off it, I wanted to see how high it might go. There were a few bids in the first few days – getting the price up into the teens. I was pretty pleased with that – it seemed like it was at least going to be worth my while to have listed it, considering the hair itself was something I “got for free.” That’s the nice thing about selling your hair – it’s almost 100% pure profit!

There were a few people who had put the listing on their “watch list,” and for the next few days, nothing happened. Then suddenly, as my listing neared its end, the bids began to shoot up dramatically (nothing out of the ordinary for an online auction!).

The winning bid when it closed was $166.50! From that, $5.13 went to PayPal fees, and $5.34 for shipping via eBay’s partnership with the US Postal Service. So for my trouble of keeping the ponytail, photographing it, listing it, and shipping it (maybe two hours of work, tops?), I got a cool $156.03.

Lessons Learned

All-in-all, I was pretty happy with the experience. The only downside was that a few people in my personal life were grossed out by the concept – my boyfriend/now-fiancé was especially not happy about having the disembodied ponytail in the apartment!

The “catch” is that I can really only grow my hair long enough for this every two years or so. It’s actually been almost two years since this particular incident happened (took me a while to write about it, obviously!), so I could do it again soon, if I wanted. But you have to really want to cut your hair and sell it for this to work. Since my wedding is coming up later this year, that’s not a position I’m in right now.

But who knows, maybe as soon as the wedding is done, I’ll chop my ponytail off once again and sell it to recoup some wedding costs!