Budgets

You know, I do realize how lame my blog gets when I post this kind of crap. Buuut, I started this over a year ago, and it has been an absolute lifesaver for both Alex and me. Nick also picked up this method, and he says he loves it, so here you go:

How I budget:

It's a pretty simple method, especially for all of us reasonably tech savvy 20-somethings. We're masters of the PC!, wizards of MS Orifice!, and most of us look like a one-armed monkey dry humping a football when it comes to budgeting and finance. Budgets should be the very first thing on everyone's list when they get out of college (or even before). Here's how I do it:

First, I take every paycheck and enter it into excel, with the name (paycheck), date, amount (after taxes, 401k, health, etc.) for the entire year. I highlight that whole thing yellow.

Then I line up every monthly bill, and do the exact same. Rent, car insurance, gas, food, cable, student loans, the works. Anything that I have to pay every month. For credit cards, I put the minimum balance down and the due date. Anything that takes a day or two to clear, I put the absolute last day I could pay it without late fees. Do it for every month for the whole year (not in order, but in groups according to what the bill is). That way you can be sure you have every payment in for the whole year. You can also highlight different bills with different colors if you want.

Then select the whole thing and sort by date, then by dollar amount. This will put them in chronological order, with your paychecks as the first thing in the day. Add a blank line above each yellow line, and in an unused column take your paycheck amount and subtract each item between that paycheck and the next one. Bingo: you've got how much is leftover for each week! When Friday rolls around take a look at the budget and pay everything under that week. Use a column to check off that it has been paid. Then even though you've got $1000 in your bank account, you know you've only got $75 for "sodapops" that night.

Sometimes, sadly, it comes up negative, but that's what the budget is for. Have $400 this week but -$200 next? Just move that $230 truck payment up a week. You can move things up the list, just don't move them down. You don't want to pay the credit bill when you've got extra cash a week after the due date. A tip for that: if you've got extra cash, put some into savings (I use and highly recommend ING Direct). If you've got a slim week, you can just pull from savings and add that to your paycheck. Because you've done the budget, you'll be able to do it soon enough to have the money clear by the due date. Also, any big ticket items (concert tickets, car repairs) can be easily planned in advance so you'll have the cash available.

Here's what mine looks like:

UPDATE: (3/25/10) I just came across an interesting method at nodebtplan. Check it out, see if it's right for you. Nodebtplan has some good stuff, be sure to browse around a while.

I took nodebtplan's excel budget and executed my method on it, step-by-step in the tabs. Check it out here.

...who's in the mood for hotdogs and bagels?

Last Monday the awesome Lowell Ave. cook decided to cook a chicken for dinner, and Jeff had the most tasty idea of deep-frying it in his turkey fryer. Yum! For anyone out there that hasn't had a fried turkey or chicken, please, please eat one before you die. It's fantastic!

If you're not familiar, you have to heat 3-4 gallons of highly flamable peanut oil between 325 and 350 degrees. If you heat it much more you'll reach the flash point of the oil and Kablooey! So far, far away from any flammable substances (my house) I cranked up the burner. 100, 150, 200, 225, 225, 225.... Hm, it was really smoking like a bastard and it didn't go above 225 for an hour. I pulled out the thermometer, jostled it a bit and the temperature shot way past the maximum of 550 degrees. Turns out the thermometer was broken so I had no idea the oil temperature was double the flash point!

Taking great caution in a T-shirt and sandals, I pulled off the lid and as soon as the air hit the oil -BOOM! Up she went.

Now, having just taken my fire extinguisher course 4 days prior, I knew that we couldn't put it out ourselves. Nick tried, with a handful or two of baking soda, which burnt up before it even hit the surface of the oil.


Having admitted defeat, I called the Newton FD. Their first try was putting a lid on it which put the fire out as long as the lid was on it. As soon as they took it off - Boom! again. The first extinguisher they tried was empty (makes me feel secure), and the second sprayed flaming oil all over the backyard, but did put it out. They sprayed the outside of the pot with the garden hose to cool everything off.


We did end up cooking the chicken in the oven, which was done at about 11:30, but after we all had hotdogs and bagels for dinner.

( Notice the handle that melted off of the pot.)

401(k)'s for dummies/me (old myspace post)

One of my most recent hobbies has been personal finance. I don't see it just as a necessity, but an entertaining past time in which I've been known to open and close accounts within hours, max out and pay off credit cards for no particular reason, and bore the living shit out of my fiancee, roommates and friends with plenty of get rich quick (or by the time I'm 74) schemes. I do spend a fair amount of time reading and researching, and since I like doing it so much, I'm going to share some of my theories and techniques with the world.

So my number one theory in personal finance is::::::: I don't know shit. I know this as an absolute fact, and pretty much the only absolute I've found in interest rates, account maintenance fees, and certainly the stock market. Resolving myself to this, I've picked a few strategies that will hopefully make me my first million in less than a year.

Let's start with my retirement fund. I've got matching to 3% of gross salary, then matching 50% to the next 3% of my gross. So if I make $100/year, and put in $6, then the company gives me $4.50. Any more than that, DSM doesn't give me anything. Also, they automatically put 3% of my gross in, but don't let me take it out until I've worked there for 3 years. So to maximize the deal, I'm putting 6% of my gross in there, and they're giving me 7.5% total. Any other money I might want to add would be better spent on credit cards (at about 9% on the ones I use). Blah blah blah, percent and numbers dollars rate....

So to match my investing scheme (the one about me not knowing shit about investing), I need someone else to pay attention to it. The best returns are in stocks, but I don't have the time or knowledge to think I can pick individual companies that won't completely tank. That means I need mutual funds, so I can own a bunch of stocks and have someone do the picking for me.

Which mutual fund to buy though? Certain ones move faster (up and down) than others, and since I'm 25 and have plenty of time to earn back any money I lose. The answer: index funds. They're designed to track the overall performance of the stock market, which is hard to beat in the long run. (I think 80% of mutual funds underperform the market). The best thing about them is that they're automatically picked and priced, so the fees that the managers take out are very low. There's just one problem with this though: there are no index funds in my 401(k).

Damn. So how do I balance high risk and low risk mutual funds? I've got a Fidelity 401(k) that offers a set of "Freedom Funds." Fidelity looks at the average dude that plans on retiring in year X, and says, "alright, I'm this old, I've got this long to go, so I should have so much in high-risk mutual funds, yay much in low-risk, mid cap, small cap, large cap, international, index, bonds, etc. etc. etc.," and buys the funds accordingly. Not only are the individual stocks picked and balanced everyday by a professional, but the balance of risk is put together and managed by a pro as well. Remember, I don't know shit, so I need to find a way to have a pro do it (since I can't have the market do it automatically in an index fund).

What about diversification? If you own all of one thing and it tanks, you need backups and other stuff. The simple fact that the freedom fund managers pick more than one type of mutual fund spreads your money out over several markets, and the individual funds they buy spread out the money that's in a particular market over several companies. Done and done. The drawbacks are A) the fees that they charge are more than an index fund, and B) the market will probably do better, on average, in the long run. Oh well...

Old Myspace Post

So, despite my 142 views on 2 posts, I've decided that my blog sucks. I try to make it witty and interesting like all the other blogs out there, but really, I'm just too damn dorky for that kind of stuff to be interesting to me. SO! Here's the new blog, where I post boring crap that only my engineer friends will find interesting.

The first challenge is a geometry problem, inspired by Theo Jansen's work as shown on Youtube.

Take these coordinates:

o is theta, from 0 to 2pi(). [drawing hints are shown in brackets]

Initial Points:
A:0,0
B:15cos(o),15sin(o)
C:0,38

Lines:
CD=41.5, BD=50, [with Dy>0]
DE=55.8, CE=40.1, [with Ex>Cx]
CF=39.3, BF=61.9, [with Fy less than Cy]
EG=39.4, FG=36.7 [almost making a square, CEFG]
GH=49, FH=65.7, [Hy less than Fy]

By rotating AB, H moves in a path that is extremely flat at the bottom (slope 11.86 degrees from horizontal), with a shallow takeoff point, and steep drop to the flat area. Basically, if you put this on a robot with connection points A and C fixed, the robot could step up onto things, and travel with little or no vertical interference. Walking CFB or bicycle, anyone?

The challenge is to define Hx and Hy as functions of theta only. You can then change the lengths of the lines, and see how to modify the foot motion to an application. I tried doing this on my TI, and let it run overnight to solve Dx. It was so slow, I gave up, but maybe there's someone out there who wants to do it (Ben Jacobs, perhaps).

http://www.youtube.com/watch?v=Y2KkGFuRLew&feature=related

Blog Basics

I've started a blog on Myspace.
I don't like Myspace's blogs.
I'm moving to Blogger.