Medicated Money

Thursday, June 29, 2006

The Debt Repayment - June 2006

We step it up in the month of June for our debt repayment plan. As you may remember, we are trying to pay off $36,500 of debt by the end of the year. With our new possible job opportunity, we may not be able to reach this goal, but we are still going to try.

We did exceptionally well this month by paying off a total of $4,129.41. We have completed paid off another student loan, which we are ecstatic about! Since the start of this goal, we have paid a total of $13,624. We need to pay an average of $3,812 to reach our goal.

Wednesday, June 28, 2006

It's A Family Thing - The No Credit Needed Network

Over here at Medicated Money we see our fair share of visitors, and we thank all of those that stop by, read a post or two, and maybe make a comment. We spend more time reading other personal finance bloggers than we do creating post of our own.

One of our favorite sites to catch up on some of these pf writers is at the No Credit Needed Network. NCN over there has done a tremedous job putting together a network of pf bloggers who are committed to setting goals and accomplishing them.

If you have the chance, take a look at the new insigna here at Medicated Money to your right, and then click on it to travel down cyberlane to the No Credit Needed Network! Read an update on one of the members or go and check out their blog. Also, if you like what is going on over there, let NCN know or just thank him for all of his hardwork!

Tuesday, June 27, 2006

Medicated On The Job?

Well, we have returned from our trip home to the Northeast. We both were able to meet with future job prospects as well as had a great time at our friend's wedding.

Both job opportunities would be a lateral move with the bonus of being closer to friends and family. The downside is leaving incredible positions here in Houston. We sat down last night and wrote out the pros and cons of the situation, and to be honest, still left the conversation with a feeling of uncertainty.

Leaving a stable situation were we are thriving to take on the unknown of a new job can be a nerve-racking process. At this point, we are waiting to hear from these places with an offer. Both places we interviewed at discuss with us the strong possibility of seeing an offer, but we need to see those offers to make the decision. We expect to see those offers by the end of this week or early next week. Until then, we are trying not to over-think the situation, and continue carrying out our daily life not worrying about it!

Unfortunately, that is something that is easily said then done!

Tuesday, June 20, 2006

Medicated, Back On The Road!

Well, we head out again today for another trip. We are heading back home for a friend's wedding as well as a possible employment opportunity. We plan on bringing everything back up to speed when we return, so look for those posts. Many different topics have been sitting on the back burner which we will address when we return. Thanks for reading and we'll be back next week!

Sunday, June 18, 2006

A Possible Change?

Well, as we stated in our last post, this past week has been considerably busy for the both of us. So with this post, we hope to play a little catch up.

The first order of business is that the Medicated's may be seeing a big life change in the next few days. We both moved away from the Northeast when we finish school to start our careers. We ended up in Texas and have loved it ever since. However, it still is not home. We always joke with family and friends from the Northeast that we will be home soon, but our timeline was always 2-3 more years here in Houston. We felt that now was the time to work on our careers, and that when we began to have children, we would start the plan to move home.

Two weeks ago, we were in San Francisco for a meeting, when Mr. Medicated was approached by a colleague from back home looking to see if we were interested in a possible job opportunity. To be honest, it caught us completely by surprise. We discussed the opportunity, our future goals, and the pros and cons of the situation, and decided to go ahead, and meet with the practice. We are schedule to meet with them this week. We had to laugh because when asked if Mrs. Medicated was okay with leaving her job to move and possibly not working for a period of months until she found something, her response was ‘let me call a few people!’ Long story short, she called some of our colleague friends, and she currently has 2 interviews set-up this week as well.

Things for all of this have really come together well in the sense that we were heading home for a friend’s wedding already and planned to be home for a short vacation to see family. All in all, we did not have to take any additional days off. We did have to change our flights, but both practices said they will pick up the expenses of these flights!

After setting everything up, we sat down this weekend and discussed what all of this may mean. On one hand, we absolutely love the hospital we work for. Our jobs are great, the hospital treats and pays its employees well, and things could not be better. On the other hand, this opportunity will allow Mr. Medicated career to grow in ways that his current job cannot. The opportunity will be more difficult, yet from our discussions, the rewards will make up for these difficulties. In addition to this, we will be closer to family which is important for us when we start a family. It will be a very difficult decision for us to make. We left off with knowing that we each need to go and meet with these respected offers to get a little more information to make a decision.

With all of this, our financial plans will need to bend and change if the interviews go well, but we are excited for these possible opportunities and the chance to be closer to both of our families!

Saturday, June 17, 2006

Thanks To Our Many Friends

As in many things in life, time dictates everything. This past week found the Medicated's with almost none of it for anything else then work. For some strange reason, this past week was one of our busiest weeks even though on paper, the schedule didn't look like it would be.

With this fact, little attention was placed in Medicated Money. We try to post a few times a week about our daily financial decisions and dealings as well as other topics that catch our attention. We normally average a mere 70-80 readers a week with these postings (tracked by sitemeter).
We appreciate our daily readers as well as those that stop by for the first time.

So, what is the point of this post. Well, this week, even though we had no new posts, we still had roughly the same amount of readers. We were amazed to see this! One nice thing with sitemeter is you can see how your reader was referred to you! I am sure many of our readers following us by a blog aggregator that will update them when we post a new article. However, this past week we saw many referrals from other bloggers who have mention us in their blog or have us linked on their sidebar. We would like to take a moment and thank those that have sent traffic our way and would like to repay the favor! We have updated our blog to represent these 'friends' of ours, and strongly suggest you take a visit to each one and spend some time reading their wonderful blogs.

Thanks again to all, and we hope we captured everyone (if not, let us know and we'll include you to our list!)

Sunday, June 11, 2006

Cutting Those Bills - 3 Month Recap

Back at the early stages of this blog, one of the main subjects we discussed was the conscience ability to decrease our reoccurring bills. It was difficult at first to actually see any difference in those bills after 1 or 2 months of changes. Now, we are at the point where we can make a 3 month analysis to see if our changes really made a difference and if so, by how much.

Electric Bill – In comparing our last 3 months to the same 3 months from the previous year plus realizing that in 2005, we were in a 900sf apartment and in 2006 we are in a 1800sf townhouse, the average for these 3 months in 2005 was $147. The average bill for the past 3 months in 2006 was $137. Even with the fact that our living area has doubled, our electric bills are actually less. We believe if given enough time and comparable numbers for the same residence, we have lowered our energy significantly. Goal – Completed

Grocery Bill – This was a huge problem for us when we started this blog. All in all, we just wasted too much money at the grocery store. We bought things we wanted rather than shop for sales. We never used coupons or the weekly flier! Since our posting, we have cut our grocery bill by $282. For the 3 months before we started this blog, we average a monthly spending of $918. Yet, the past 3 months we have average $636. Goal – Completed

Telephone Bill(s) – We thought we were saving money here but as it turned out, there were better deals out there. We switched to Vonage for $19/month, and found out we could get a better deal with a company discount for our cell phones. We now pay roughly $80/month for the 2 services compared to the $120 we were paying. This saves us $40/month or 33% of what we were paying. Goal – Completed

Auto Insurance – We both liked our respected companies and to be honest, I never thought about this. Yet with the start of this blog, we began to question monthly bills we never thought of questioning before. Turns out by doing some research, we were able to change our monthly cost of $196/month for auto insurance to $145/month. It will be lower when we begin to pay the on a annual basis rather than monthly installments. This has saved us $51/month or 26% on auto insurance. Goal – Completed

Gas Bill – By lowering our water heater’s temperature and taking shorter showers, we have decreased our gas bill by 29% from $35 to $25/month. Goal – Completed

Entertainment Bill – We began looking for free entertainment sponsor by the city we lived in as well as looking for 2-for-1 coupons in the paper and entertainment book. We were spending roughly $250/month. We now spend close to $100/month on entertainment without missing a beat in going out and having fun! This is a saving of $150/month or 60%. Goal – Completed

In just these six categories, we have put $540 back into our pockets. These changes were fairly easy to complete, however, required a little more focus on how much we were really spending and being discipline in not overspending. Overall, the best advantage from this is the ability to constantly be looking for a better deal, which in turn, helps us spend less on a monthly basis.

Thursday, June 08, 2006

Book This - Smart And Simple Financial Strategies for Busy People

Our third book we decided to review is 'Smart and Simple Financial Strategies for Busy People' by Jane Bryant Quinn. We decided to read this book after it was a book that was on the 'Color of Money' book club in the Washington Post. Overall, the title fits the book perfectly. Quinn offers personal finance advice on a simple and concise platter. From how to get starting in organizing one's personal finance to buying the right type of insurance, 'Smart and Simple Financial Strategies' explains just enough for the common person to get buy.

It is hard to determine if this book is too superficial for most readers due to our personal feeling that one needs to spend a considerable amount of time to make sure their financial house is in order. However, Quinn feels that most people want the simplest, straightforward plan to reach financial stability, and this book provides that plan.

She preaches the benefits of automated deposits; set it and forget it. She recommends Target Retirement mutual funds and Lifecycles mutual funds exclusively over all other investment vehicles. Everything that Quinn talks about and recommend is the fundamental advice heard all throughout the personal financial world. With her guidance, you are not going to see results immediately. However, after years of following the smart, simple plan, you will have financial goals met.

To be honest, we didn't find any of the information new except for one small, important concept. Quinn discusses the importance of reallocating investment accounts often. After market prices change, Quinn recommends rebalancing your investment portfolio to stay at your home base. Your home base is the asset allocation you feel comfortable with. She recommends for most a 70% stock/30% bond portfolio. She does go in more detail about how each % should be broken up. Personally, we created our asset allocation; however, we were planning on revisiting it on a annual basis. However, with Quinn's advice, we are going to be looking at it a little more closely.

Overall, we would give 'Smart and Simple Financial Strategies for Busy People' by Jane Bryant Quinn 4 out of 5 stars. We would recommend the book for those who are looking for a beginning step into the personal financial world. It is very basic, but like the title says, it is a smart, simple plan to winning that is needed in today's world of financial confusion.

Monday, June 05, 2006

You've Got To Be Kidding Me, Right?

On our flight home from San Francisco this past week, I was sitting in my seat, listening to the iPod, and began to read an article in the June issue of Money. Half a paragraph in, I stated rather loudly, 'Ladies and gentlemen, Tyler, TX has found its village idiot and his name is Don Cruz.' Not realizing how loud I said it, I got a 'Are you crazy?' look from Mrs. Medicated. Trying to play it off, I finished the article without saying another word even though inside I was screaming at the subjects of the article.

One Family's Money is a monthly article that Money prints that tells the financial story of a certain family, their problem, and then offers advice on how to fix the problem. The month of June's family is quite interesting.

Long story short, Don Cruz and his family win the HGTV's annual Dream Home Sweepstakes and all of its glory. In short, Don & family won $250,000, a $51,000 GMC Denali SUV, and a gigantic, fully furnished mansion estimated at 2.5 million dollars. All in all, they hit the jackpot. Just in time too, for this family of 3 who currently do not have a substantial income due to a work-related injury for Don and a back-to-school student in Shelly, Don's wife. This winning will allow financial security for Shelly to finish school, pay off their house, and set them up for financial stability for life. Unfortunately, Don and Shelly are not the sharpest tools in the shed.

Instead of selling the house and profiting a cool $2.13 million dollars, this family's financial future is going down the drain fast. Don and Shelly decided to keep the house, purchase a few more cars (they have 7 in total), and live off the $250k and in the mansion because it is their life long dream to live in a large house. Unfortunately, they refused to accept reality and realize that a 6,000 sf mansion will cost a pretty penny to maintain. One year later, after $2,900/month housing expenses, $7k/yr insurance, and $1,000/month on car maintenance they are barely treading water. Oh yeah, add in the fact that they decided to keep the house they previous lived in located in Illinois for an additional $1k/month mortgage. At this point, any reasonable person would realize: sell the damn house, cut your lost, and invest what is left. No, not these people. They go on to spend $11k to fix a boat that gets little use, $6k for a dog run for their dogs, weekend entertainment bills running $1k a pop for family and friends, $40k to charity (for the tax write off, I guess), $5k on Christmas gifts for the 3 of them, $2k for scuba lessons, and $2k on a go-kart (go, speedracer, go).

What's left from the $250k, oh, about $36k. And to top things off, they have not paid any of their 2005 taxes. That little bill is just a small $672k. Unfortunately for the Cruz's, the dream of a lifetime in winning the sweepstakes has become a living nightmare.

Even with the terrible decision making, the family should still benefit from the winnings. Best case scenario, they walk away with $1.6 million. A more realistic outcome will be walk away with $1 million. This should allow the family to live off $50k to allow for Shelly to complete school, and then be able to allow the investment to grow. Worst case scenario, they walk with $250k. If this happens, say goodbye to both houses, future school ideas, and back to the daily grind actually worse off then started. Even with the best case scenario, it is nowhere close to the $2.2 million if they sold the winnings and investing the profit. Unbelievable how people who come into good luck make the dumbest decisions. This family could have been set for life if they would have continued to live a normal lifestyle. Instead, they convince themselves that they deserve everything under the sun and fail to realize that the well would eventually go dry. Worst is what they have taught their son about financial responsibility. I can understand splurging a little of the winnings, but to walk away with (best case scenario) half of what you could have had is just plain ridiculous. Situation like this always amazes me to see how fast people change their attitude from humbled to a sense of entitlement.

The best part of the article is in the last paragraph, though, when they say Don is watching this year HGTV's winner, Donald Cook, on his big screen TV. In a interview, Donald Cook tells the TV world, 'The house is absolutely gorgeous, first class! But I'm not in a (financial) position to live in a $2 million house!' Well said, Donald, well said!

Sunday, June 04, 2006

Expenses - May 2006

As stated before, we continue to monitor our expenses in this blog. We know that for the most part, these posts are as exciting as watching the paint dry, however, we like to post it for us to be able to keep tabs on all aspects of our financial status.

In May, we unfortunately did not stay under budget for the second straight month. We were thinking of revising the budget to allow a higher allowance, but would rather have the pressure on us to try to make it in the black by reducing our spending instead of changing numbers to have us reach this goal.

Here is our expense report for May:

Through our 'cutting the fat' from many of our recurring bills, we are beginning to see the difference in our monthly budget. However, our budget got destroyed with the purchase of additional clothing, dining out, and the increase of fuel. We were 7.01% (238.09) over our budget.

Overall, we still hope to reach our goal of staying under $3,300 for the month of June. We will see if we reach this goal next month.

Saturday, June 03, 2006

Net Worth - May 2006

Even though we saw some set backs in the middle of this month, we were very pleased with our progress for the month of May. We are happy to report that we continue to keep marching forward with progress in our financial situation.

Here are the numbers for month of May:

As always, a couple of points of interest:

  • We saw a decrease in our emergency fund this month. We decided to stay on pace with our debt repayment plan and therefore, our money from our emergency fund helped us reach this goal this month.
  • Even though our retirement accounts took a hit this month, we continued to place the maximum allowed in our 403(b) accounts. We are on track to reach our goal of $15,000/year for each account. On top of this, we are required to place 6.4% of our salary into a retirement account created by our work.
  • Since the start of this blog, we have seen an increase of 23% in our net worth.

Friday, June 02, 2006

Book This - The Number

What is your Number? Why should you care? If you have no idea what the answer is to either of these questions, you are in the majority of most Americans.

We just finished a book by Lee Eisenberg called ‘The Number: A Completely Different Way to Think About The Rest Of Your Life.’ In continuing with our reviews of financial books, we sat down and discuss the good, the bad, and the ugly of 'The Number!'

The premise of the book is to discuss reaching the ultimate goal, financial freedom, which is the driving force for many personal finance bloggers and their readers. In the end, it comes down to one simple question that everyone must answer: How much money does one need to secure a retirement that is appropriately called ‘the golden years?’

The author is intended to answer this and many other questions in his search for 'the Number!' The author has many good points discovered through conversations with the financial experts that give him a creditable soapbox to voice his points. However, Eisenberg seems fixated on discussing the financial issues of Baby Boomers and the imminent tribulations that they will face in their so-called retirement years. Eisenberg misses the boat for those readers that are not Baby Boomers trying to get back into the game, but rather those Generation X’ers & Y’ers trying to prevent those very catastrophes that are being shown on the nightly news.

Overall, I would give this book 3 out of 5 stars. The positives are that Eisenberg discusses with financial experts the most common financial traps that keep people from obtaining their Number. They also discuss many that are uncommon that will still sabotage one from reaching their Number. Yet, he spends too much time on how so many from the Baby Boomers generation are lost in the financial woods, even more time on how they got there, and then how they might be able to find the road out. The problem is that we have heard it all before and there is no magical wand that will fix the problem, especially this book.

I would not recommend the book to those looking for a discussion on reaching the number for financial freedom. I would say it is a good read for a lesson in financial history, especially for many Baby Boomers to compare their financial decisions to others from their generation.

Overall, they say that the Baby Boomer's drive the financial market, and this book gives the feel that Mr. Eisenberg is just trying to tap into that.

Thursday, June 01, 2006

The Debt Repayment - May 2006

The month of May was a difficult month in personal finance for us due to unexpected expenses. We paid $3,501.25 in the month of May towards our overall goal of $36,500. We were hoping to increase our payments to $3,800/month, yet were unable to find the additional $300 to reach this goal this month.

We will need to pay $3,858/month to reach our goal by the end of this year.