I’m kind of excited - now that January is over, I have the data from two months for NetworthIQ, and I can finally post my badge! When I only had data for December, it looked like I went from a net worth of $0 to -$25,000 in just one month! Now the badge is correct, and I even gained money (or, more appropriately, knocked off more debt than money spent)! I’m so proud:

My NetWorthIQ

The badge itself is sitting over in the sidebar, enjoying his place on honor. Hopefully, he will stay “of honor” and not become a mark of shame!

On a more personal note: looks like I won’t be headed to financial crisis anytime soon. But I will be headed to sunny California for two weeks, leaving Friday! However, there shouldn’t be a break in entries - I’ll have internet access and time aplenty for posting.

I stayed over at my sister’s house last night after baby-sitting her two-year-old daughter (I didn’t get paid for it, but I did get some free macaroni-and-cheese, so I call it a win), and after everyone went to bed, I stayed up real late, enjoying their cable television. This was how I was able to catch the Suze Orman Show for the first time - and two episodes, no less!

Others have expressed their dislike for Suze’s show. I can see where that would come from. She’s pretty in-your-face, but you know what? I really enjoyed the show.

I think this is my official crossing into “financial nerd” territory. Um… hurray?

Anyways, I enjoyed the show. I didn’t mind the way Suze treated most of her callers, and I’ll tell you why. She’s a bit abrasive, but I get the feeling that most of the people that call in already know what the right (”right” meaning “financially smart”) answer is, they’re just calling her so that they can hear someone else say it. And she says it, outright, without mincing words.

I guess, in the end, I liked it because I had fun watching. Yep. I’m a nerd now.

The debate rages ever on. Almost everyone I know is signed up for one service or the other. Strangely, no one seems to have a really good reason for their choices. My mom has Netflix* “because.” My friends have Blockbuster* because they got a four-week free trial, rather than the usual two weeks. My brother pushes Blockbuster because he works there. Am I the only one with a strong, decided opinion about which one is better?

Probably not. But let’s weight the two services anyways. First of all cost isn’t a real consideration. Each one offers the unlimited 3-at-a-time plan for about $20 a month. There’s variations you can do, but it’s the most popular plan for a reason. So let’s not even consider that.

Netflix has the advantage of time. Their website is more sophisticated and they’ve got the powerhouse that comes with simply having been around longer. They rule the roost in these respects, and Blockbuster is still playing a bit of catch-up.

However, Blockbuster recently redesigned their whole site, and they have a very special advantage of their own: stores. And they’re finally starting to make use of it with the new “All Access” program. Bring your Blockbuster Online movie into the store instead of mailing it, they’ll mail it for you, and you’ll get a free in-store rental.

Sweet.

However, if you never really end up near a Blockbuster store (like me), and you think that going into the store to trade in your movie defeats the purpose of the home delivery (like me), you’ll probably almost never take advantage of the new program. The program isn’t meant to be an enhancement for subscribers - it’s meant to entice the people who go to the stores to sign up.

So they’re back on even ground, as far as I’m concerned. Turn-around time can be a deal breaker or maker for some, but having used both services, I haven’t noticed a difference. In LA, I got a two-day turn around. Out here in the boonies of Western NY, it’s more like three or four days. Location, location, location.

So can either of them pull ahead in my eyes? Why yes, yes they can.

And Netflix did, a while ago. It wasn’t the service itself that sold me, it was the other activities the company engages in. Namely, Netflix’s Red Envelope Entertainment division. They go around, investing (not donating) funds in independent films to help them get distribution. Maybe it’s because I was a film student, but this hits me in a special place in my heart. Independent film is gaining ground these days, but it’s still pretty cut-throat out there. Especially when there’s a lack of funds. Netflix is putting their money into promising films - and not requiring an exclusive contract in return. The films will have a chance at theater and DVD distribution - you might even be able to rent them at Blockbuster.

What my money does in the end makes all the difference to me, so Netflix has my dollars.

*Affiliate Links. I joined the affiliate programs months after writing this post.

I received an email from my Chase account tonight, letting me know that a new statement had been posted to my account - the 2006 Year in Review Statement.

Huh.

I’m pleasantly surprised by the thing. It’s a great breakdown of my spending habits on my credit card over the year. There’s a chart, with the following categories broken down by month: Travel and Entertainment, Restaurant, Automotive, Merchandise, Services, and Miscellaneous.

There’s a pie chart for all the categories below that, which showed the breakdown as:
0.67% Miscellaneous
3.86% Restaurants
8.86% Automotive
23.21% Services
30.34% Merchandise
33.06% Travel and Entertainment

And there’s a bar graph of the monthly spending patterns at the bottom. The following pages show all the items, sorted by category. My only issue with the whole thing is that they grouped my grocery purchases into “Merchandise,” which is not where I would have thought to look for them.

The other problem is that I don’t use my credit card for everything. Since July, I’ve had a debit card which I put most of my gas and grocery purchases on. I could, on my own, recalculate everything to include those purchases as well, but frankly, I’m not likely to do that.

But, I will make predictions for the 2007 statement:

10.00% Miscellaneous - I bumped this up to make the numbers work
5.00% Restaurants - a nice round number
25.00% Automotive - this will go up now that I have my own car
10.00% Services - this will go down, simply because the things placed in this category are things I’m not as likely to buy this year
30.00% Merchandise - since groceries are included, I don’t anticipate much change
20.00% Travel and Entertainment - this will go down due to a new-found frugality

Golbguru over at The Tao of Making Money put forth the following question for the upcoming Festival of Under 30 Finances:

Assume you are an average 25 year old with $25,000 debt (on account of your student loan) You have been given a lump sum $10,000 and the following four choices:

1. Invest it for your retirement funds.
   
2. Save/invest it for your future home.
   
3. Save/invest it towards your child’s/children’s future college education.
   
4. Pay part of your student loan debt.

You can pick only one of the above choices towards which you should use the entire $10,000. Which one will you pick? ..and Why? Assume that the rate of return on the three investments choices is the same and the student loan charges you an interest rate that is equal to this rate of return. Would your answer be any different if the amount was $25,000 instead of $10,000? Again, you can pick only one of the choices.

Well, first of all, I’d stomp on the floor and start whining “Who says I can only do one of those things?” After my tantrum subsided, I’d give my answer:

Invest for retirement. There’s no day like today, so this would be my very first choice for the money. Sock it away. Also, I believe that you really shouldn’t put your children’s education before your own retirement. Like Suze Orman pointed out - there are plenty of loans and scholarships for college, but there are none for retirement. It’s the same for a house: you can get a mortgage on your home, but not on your retirement. I don’t really have a solid excuse for choosing this over the student loans (assuming the interest rate is equal to the rate of return) - at that point, it’s just a personal choice.

So, would it change at $25,000? I believe so. I would pay off the student loans completely, and take the extra “income” each month from not having to pay them, and start dividing that money up into savings for retirement AND a house. Haha, I beat your little “you can only choose one!” system, didn’t I?

I finished Suze Orman’s book “The Money Book for the Young, Fabulous & Broke” last night (herein referred to as YF&B). I’d like to give my hopefully-better-than-lackluster review of it.

Basically, the book goes through all of the questions and assumptions a 20-30 something might have about money when they’re just starting to take an interest in taking control of their own finances. The book goes in near chronological order for what you should do: starting with improving your credit score, and gradually moving up to things like purchasing big ticket items (a house or a car).

I like the book as a good place to start. I’ve already recommended it to a few clueless friends, because it says a lot of the things I would tell them, but with a bit more grace and experience. I’m glad that I grabbed the book to read for my own education - I did learn a few things, especially about the particulars of picking out mutual funds. Since I haven’t worked my way up to that yet, I hadn’t looked into it yet.

The book makes a good reference, but it somewhat lacks as a library book, since it is such a good reference. I’m disappointed that I’ll have to return it soon, since I know there will be times in the future I’ll want to flip back to a certain section to recheck something or to reference it when talking to someone else.

All in all, I would recommend it for nearly everyone in that 20-year age bracket - at least one read-through for the intermediately financially savvy, to see if they can pick up anything new, and I would probably recommend it as a buy for someone just starting out, so that they can keep it as a reference.

The Carnival of Customer Service #3 is up over at CRM Lowdown. My article about Emigrant Direct is featured, so go check it out!

I had a fairly aggravating conversation with a friend of mine last night. My friends are nice people, but not a one of them has a clue about money. Of course, this all started because of our sweet, dear college - it usually does.

My friend’s problem was that the school had switched from paper billing to online billing, and so his parents never got the latest bill, so the school put a hold on his account (not letting him register for next quarter’s classes) until he paid the $500 he owed them.

I can see where you would be upset. After all, not being able to register for classes the second they open registration can cause major problems (I myself once got screwed over by the registration system, big time). But, in the end, it’s all his own fault.

The school sent plenty of emails and paper mailing to both us and our parents, detailing the new system. It was his responsibility to log onto the new online bill system and set up his parents’ emails so that they would get their email copies of the bills. And, this system was set up in June of 2005, so don’t ask me how he’s just finding out about it now - it’s been this way for all but his freshman year.

I can see why the school would make the switch. I personally enjoy the fact that they’re saving tons of paper with the new system, rather than sending out a paper bill to each of the 10,000+ students 6-8 times a year. But I can also see that someone saw this as an opportunity to not only save some money for the school, but also make some. How much more in late fees can they collect off the irresponsible students who never bother to set up the emails for their parents? I kinda like this, as well - let the irresponsible kids pay more, so my tuition rates don’t go up as much. It’s a win for those of us who are on top of our money!

Of course, that’s where the conversation lead. I had always had the particular feeling that this friend had no idea about his money - at least, not as far as the school was concerned. Of course, his parents pay all the bills that come, but I knew that he had to have some student loans of his own in there. And when I asked? He had no idea.

*sigh*

People, you have to PAY those when you graduate. With interest! You should be checking them, at least a few times a year, know exactly how much you owe, and watch out for scholarships you can apply for to lessen the load. It’s not that hard.

The problem is that money, especially debt, freaks out most everyone I know - and this is not limited to my age group, but it’s especially prevalent. The idea is “I won’t think about it, and I definitely won’t talk about it, and I’ll just deal with it when I graduate.” Right… that sounds fun. Post-graduation job search and move aren’t stressful enough for you? You have to add in a brand spanking new slap-in-the-face of a 5 or 6 digit debt? What is this… Xtreme Graduating(tm)?

No wait, it gets worse. So I start in on my spiel, which is basically Ramit’s 5 Steps to Getting Rich, plus some other things to just help him build credit. I would have just sent him some links, but he stubbornly refused to go near a personal finance blog (huh?), so I had to do the whole thing myself. Each step was like wrestling with porcupine, I swear.

Here are some key quips:

Friend: I take control of my finances
Stephanie: got any investments? an emergency fund?
Friend: ok….
Friend: maybe not
Friend: but if I invested in anything I’d lose all my money
Stephanie: WRONG
Friend: I don’t have the capital to start investing
Stephanie: WRONG
Friend: I got bills to pay
Stephanie: *sigh*

And later on…

Stephanie: do you have a credit card?
Stephanie: There’s the first thing you can fix
Friend: um
Friend: no
Stephanie: ok, credit cards usually = bad, right?
Friend: no credit for me
Stephanie: why?
Friend: cause I like to actually pay for things

Of course, I went on to explain that there are good ways to use a credit card, and that you really need to, at our age, to start a credit history and boost your score. Still, this “stubborn ignorance” and defensive need to find excuses for not looking after your financial future bewilders me. We like to spend money just as much, if not more, than any other age group. Why wouldn’t we want to find ways to maximize our money?

Some days, I just don’t get it.

Other Links: First Time Credit Card is the main tool that can help young people to learn how to manage their finance.

Pretty much since the time I returned home in mid-December, I’ve been offered a job as a cashier at an office supply store. I have been hesitant to take this job, because it’s just that - a job, and not a career.

I know I can’t expect a “career” right now. I left school, and I did so out of a combination of not feeling adequate in my major, and not having enough money to continue. I was hoping to return home and work, so that I could save money for when I finally figured out what I wanted to return to school for.

My problem with taking a retail job is that I’m afraid that I won’t learn from it. I want to find a job that interests me, so that I can work hard at it, figure out what the parts of it that interest me are, and then use that information to start to piece together what I want to do to my life. No, I don’t see finding the “perfect” job right now as the complete key to unlocking my confused brain… but I do see it as a part. If I’m not working towards figuring this out, then I’m not working towards going back to school - and I think everyone agrees that most of my efforts should be in that direction.

More than anything, I hate posts that say “This is just a post to say I’m not posting today!”

But yeah, here is one.

I’ve sat down at the computer dozens of times in the past two days, but I can’t ever seem to squeeze more than half an entry out. So, I guess I’ll just let you know what’s to come once I’m feeling a bit better:

Things I Will Do as Soon as I Get a Job
Blockbuster Online vs. Netflix, from the girl who’s biased in both directions
My review of Suze Orman’s YB&F
My submission for the next Festival of Under 30 Finances