The Real Winners

Although every major network and, depending on whether you watched the game or not, *your* own two eyes are reporting that the New Orleans Saints won Sunday’s Superbowl, the real winners are the people who won their office Super Bowl pools.

Who Dat?

I didn’t participate in the Superbowl pool at my office, nor will I ever. It has too much risk for me to even consider it as a sanguine use of my money. Given the set-up of the SuperBowl, it makes sense that the pool is that way.

On a sheet of paper, there is a giant square that is comprised of 81 squares. Each box is worth $X (in my office, it was worth $5). I’m guessing you can buy as many boxes as you can, although where would the fun be in that? Then you choose boxes unless you sit at the furthest end of the office; in that case, you just take what’s left over. When the grid is all filled up, numbers are picked out of an envelope (or a random number generator!). The only permissible values are 0-9, without replacement. You perform this once for the columns and once for the rows, so that in the end you end up having a table like this:

Now remember, random assortment of numbers will mean that the chances of having the numbers come in exact order are extremely slim (I believe a permutation of some sort is in order here…).

The values in the column are for one team (X) and the values in the rows are for the team (Y). The numbers represent the “units” place of the final score for each quarter. So if at the end of the 1st quarter, the final score is Team X-3, Team Y-0, the “winner” for the quarter is the person that is in the box with the “coordinates,” (f you will, 3,0. There are technically four chances to win. If the score doesn’t change, then that one person could potentially win all four quarters! As the game progresses, the quarters become more valuable. For us, the first quarter was $50, $100, $150, and $200.

I didn’t participate because the risk was too great. I didn’t use some complicated formula to measure the risk, I just figured, “wow, this has nothing to do with my research on whether one team is superior to the other or how Reggie Bush may or may not be distracted because Kim Kardashian is like RIGHT THERE. I mean, who wouldn’t be, right?” Furthermore, and this might sound crazy, I wasn’t willing the spend $5 for a chance to win $200.

DJ, Replay that ONE TIME.

Furthermore, and this might sound crazy, I wasn’t willing to spend the $5 for a chance to win $200.

I-I-I- wasn’t willing-wasn’t willing to spend the $5, the fi-fi-the $5 for a chance to win $200.

WHO LOVES MY DJing skills?

I wish I could be more specific about this, but I can’t, so for the time being, please excuse my vagueness. But there was a study done, some time back, where the researchers concluded that humans have an irrational (their words not mine) aversion to risk when it comes to money. The situation goes like this: Would you rather get $20 or participate in a loterry with a 50-50 chance to win $100 or lose nothing? What about if you multiplied those values by 10 or 100? Or something like that. Think about it!

Although the Superbowl pool is a slight perversion of the study, the conclusion is clear: I’m a punk. I would rather keep my $5 rather than gamble for a chance to win $200. Now, if the stakes were $5 for $2,000…I might have reconsidered. But even then, I dunno, that wrinkled Lincoln is looking great in my wallet. But a gain of $195? Regardless of whether it is “free” money, it isn’t enough this scardey cat to open up her wallet. MEOW!

Now, when March Madness comes around, I’m all in. I should totally disclose that I prefer basketball to football anyway, but details, shmetails. (Yummy, shmetails…) What I also prefer is the ability to control risk exposure, which is just fancy shmancy talk for being held accountable for my actions. With the March Madness pool, you usually have brackets where you pick one choice for every match up. Of course, as the rounds go on, the value of choosing the right team is higher. Predicting upsets are rewarded higher than regular wins, further mitigating the risk. I would say the riskiest thing you can do is gun for an underdog to make it to the end. Because if they get knocked out in the first round, then 1/4 of your bracket is RUINED.

Of course, great minds think alike, so you could end up in a Jersey Shore Situation, where there are 2 other people in your pool with the same bracket. Then you’ll have to split the winnings. But this pool is definitely less risky than the Superbowl pool which is why I’m willing to lose money watching basketball than watching Kim Kardashian football.

Did you guys participate in Superbowl pools? Any winners? Also, I don’t know if this is the version of the pool, so if you guys had others, let me know.

Moonlighting as a Detective

So I recently put 2 and 5 together to sort of kind of figure out where the $17.53 went missing.

Well, on that very Sunday that I calculated my net worth, I totally forgot that I did LAUNDRY! That was exactly $7.50. It was also an 1.5 hours of my life that I will never get back. So sad. As for the $10.03, I’m thinking that I may have forgotten to include one of my church donations ($10.00) and I may have dropped 3 pennies somewhere. My wallet, even though it is cute, has a gaping hole on the top so one sudden movement and there go my coins flying all over the place.

Although this is a giant conjecture, I am glad that I can finally get some sleep at night, because it was really bothering me. I was having nightmares where a gang consisting of a $10 bill, a $5 bill and two $1 bill would chase me. And they were using quarters and pennies as ammo. Ok, ok, it wasn’t that dramatic, but isn’t that just a scary thought?

Well, I may have solved that case, but now I have other questions lingering on my mind:

1) So I bought tickets to go see Avatar in December. Except I didn’t pay the bill until February. Now, since I didn’t have a budget in January and February, I can’t say that I stored that cost in anticipation for the bill. Does this mean that this will have to deduct this from my February entertainment budget? Cuz that would be sad. Very, very sad. Or, should I create a new category called Stuff That I Bought Before but Forgot to Pay for Until Now?

2) Although I created the Misc. purchases category out of sheer laziness, should I break those costs down into their respective categories? My thinking was that if I bought food from CVS, for example, then that would be food that I wouldn’t be consuming outside, hence maintaining the balance in the universe. But now I’m slowly seeing my Misc. category grow and I’m wondering if maybe I should ixnay the laziness.

3) Why is that tracking your expenses increases instances of buyers’ remorse? Gosh I felt bad about getting a deal at CVS (buy one get one free cereal. That’s two boxes for $4.49!!). I used to get annoyed when PF bloggers would write about how they bought something and how the shame of the world descended upon them for their purchase. Then they would proceed with self-flagellation as repentance for their sins. Except now, I’m all like, omg, did I really buy something again? Newbie, you’ve GOT TO DO BETTER.

But then I walk out of the store and gorge on the pint of ice cream I just purchased and the pain just goes away. But the question still stands: why does budgeting make life feel bad?!!

I may be a detective, but I am not a one-man show. Would love to hear your thoughts/solutions on my pending questions/investigations.

Can I Get a Treat Now? No? How About Now?

Look at that face. Doesn’t it just say it all? He clearly wants a treat and he will reach into your soul until you give it to him. He only asks twice though. Then, he’ll turn around and go perform his act on the next unsuspecting family member. It never fails.

So this really has nothing to do with what I’m going to talk about; I just wanted an excuse to put my dog in a post.

What I really wanted to talk about what’s in my wallet. If someone came across my wallet they would come to the following conclusion:

                                                                SHE LOVES REWARDS CARDS

And the thief wouldn’t be completely right. I don’t love rewards cards as much as I love REWARD PROGRAMS. (Gotcha!) As soon as I hear that there is an incentive to shop, I’m usually the one that’s all, SIGN ME UP, SCOTTY. When I ran wild with reckless abandon (re:3 years ago), I would sign up for credit cards as if they were going out of style. All they needed to offer was x% off of my current purchase and boom badabing, I was theirs. Now, I’m the unlucky owner of seven credit cards (soon to be five once I stop being so swipe-happy); I should know a thing or two about Rewards, right? Rewards, whether tied to credit cards or not, seem to fall one of the following categories:

Dollar-To-Points. These are the most common types of rewards programs; for every dollar you spend, you get 1 point credited to your account. Once you reach a certain level, you can redeem those points for cash, gift cards, actual gadgets or travel. When it comes to cash, I’ve noticed that the standard is pretty much 100x more than you spend. So to redeem redeem your points for $25, you would need to have spent or accumulated 2,500 points. My Bank-of-America, Chase-Amazon and Duane Reade cards do this.

Of the three, I like Chase-Amazon the best. You can earn up to 3 points for every $1 you spend on Amazon purchases, 2 points for anything that is Dining, Entertainment or Gas related (uh, hello? That’s all I do according to my last Expense Report) and 1 point for every dollar thereafter. They also have a smaller threshold for redeeming your points, 2500 points for a $25 certificate towards an Amazon purchase. Bank of America is crazy, asking me to accumulate nearly 10,000 points so I can get an $80 gift card. That’s why you’re on the chopping block, Mr. of America.

Valued Customer Rewards Of course everyone that forks over any money to a store is a valued customer, but Macys,Bloomingdales, and CVS really define their customers by their spending habits. With Macy’s, the more you spend, the more eligible you are for the best perks. With CVS, you can calculate your savings by only buying the items that return ExtraBux, but again, the more you spend, the more random coupons you get at the end of your receipt. I always keep getting coupons for Theraflu. Umm…

Instant Discount My Waldbaums card falls into this category. I HEART WALDBAUMS! I know, its easy to fall in love with your supermarket as they do provide you with food, but I really do love this place and their Red Tag Prices. If you don’t have a card, you won’t get the special price. I don’t know how great this deal is since the card is FREE. It’s easy to sign up for one, but some people just don’t, thereby losing them money.

Tangentially, related to all this is the fact that Citi just tacked on an ExtraCash program for certain card holders. I totally believe its because I was thinking about cutting this card out of my life that Citi got its act together to offer this program. Except, I have mixed feelings about this. And by mixed, I mean just bad. Here’s how it works:

10% of your credit card balance goes into this account called Extra Cash. You can’t redeem ExtraCash for real cash. What you can do is apply aforementioned Extra Cash to qualifying purchases as stipulated on their website. Sounds great right? I guess since this is a new program and all, I can’t judge, but I am a judger (judge??), so I’m going to do what I do. Their selection is pitiful. Also, their “exchange rate” isn’t consistent across your purchases. For example, I could redeem my 140 Extra Cash points for $25 off of a plane ticket or for a $5 gift card at Ruby Tuesdays or for Half-Off the price of membership at a local gym.

Maybe its because its a new program, I shouldn’t be hating. Hey, let me not bite the hand that is offering me some goodies. I’ll take the $25 off my plane ticket…

Hey friends! What kind of Reward programs are in your wallet??

Expense Report (Jan 2010)

My total income for January was $2,368.74. My total expenses for January were $2,141.11. The left over amount should be $227.68, yet I only see $210.15 in the form of my checking account and wallet money. I even counted the pennies people! A discrepancy of $17.53 is a whole heap better than the $60 I lost the first time around. So maybe I’m getting better at this. Maybe next month I’ll lose only $1 and then every month thereafter, I’ll start finding money. And then I’ll be a millionaire.

Not so fast.

I don’t think I’ll be “finding money” unless I have a budget. All the cool kids say that having one is essential to not only monitoring your expenses, but controlling your spending habits thus allowing you to clear the path to financial success.

Yes, the cool kids are articulate PF bloggers.

Having this expense report is actually going to serve as the foundation for this budget. The report itself was fairly simple. I had two columns in Excel: Expense and Amount. I would list what/where I bought and how much was spent. No Rocket Science Necessary! Then, I categorized each “expense” and summed up the totals for each of those categories. These totals, corrected with some common sense, will be my benchmark value for my budget.

So here goes:

Clothing

Clothes is a really broad term that includes actual clothes and shoes. I spent $479.17 on “Clothes” this month. Guuurrrrllll! Anyways, I’m gonna halve that this month since I’m not really a shopper. Not really… Clothes Budget: $240

Scholarship

When I predicted that the world was going to end my net worth was going to tank, I mentioned that one of the things I had to pay for was a portion of my sister’s tuition. So I consider it a scholarship. My commitment is for $500 per semester. After this month, this expense will not be in my budget until August. I spent $400 in January on Scholarships. Scholarship Budget:$100.

Entertainment

This includes activities like movies, bowling, ice skating, etc. Food will be included if it is rolled up into the activity (i.e eat at the bowling alley). In January, I spent $350.50 on Entertainment. Yeah, that’s looking kinda crazy. So, I’m going to apply the reins here. Entertainment Budget: $200.

Utitlies

This includes my electric and phone bill. The electric varies from $85 to $135. The phone bill is fixed at $60. In January, I spent $263.84 due to me forgetting one phone payment and the electric bill being on the higher end. So I will budget about $110 for electric (the average of the two extremes). Utilities Budget:$170.

Retirement

My one true fixed cost because of the automatic contribution. Retirement Budget: $200.

Food

This includes outdoor dining or shopping for cereal, snacks, edibles for lunch and Chipotle. I contemplated making this a category on its own, but then I would have to control the spending and that thought depresses me. I spent $154.60 on food in January. I don’t know how I feel about controlling food. I mean, its FOOD! I’m going to keep it the same. Food Budget: $150

Beauty

I’m iffy about the name of this category since I’m naturally an easy, breezy, beautiful Cover Girl, but anyways. I go to the hair salon about twice a month. ($50 including tip) I also chemically treat my hair every other month. (averages out to about $30 per month) Also, I go to the Nail Salon from time to time. ($15.00 +tip…I only do my toes). In January, I did all of those things, so I spent $136.33. Beauty Budget: $80.

Miscellaneous

These are my trips to CVS or Target where I buy a variety of things. I refuse to pull out my receipt and further divide my individual items into their correct categories. I spent $117.17 on rando purchases in January. Misc. Budget: $100

Charity

This is one category that is OK to max out or even go over! I try to donate about $10 at church every week. So thats $40 right there. I also donate a couple of dollars every month to our office charity where if you donate, you get to wear Jeans. It’s the little things. In January, I donated $26 to charity. Yes, you can call me Scrooge! Charity Target: $45

Transportation

Transportation usually includes weekly train tickets to go visit the boyfriend or van rides when it is too late to take the bus. I spent $26.00 in this category last month because BF was home. Transportation Budget: $60.

Target Monthly Expense Total: $1,345. That is a whopping 48% decrease from January when I was uncouth sans budget. If my income remains the same, I should have about $1,000 free per month.

DO YOU KNOW WHAT I COULD DO WITH THAT?

Invest more. Help my parents with another bill. Increase my Emergency Fund. Max out my Roth. Start that 401K.

Or buy 137 1/2 Chipotle Buritoes.

Net Worth Update – January 2010

Contrary to what I originally thought, my networth didn’t decrease. It went up by 3.04%!!

Excited? Kinda

In 2009, I posted 8 months of gains. It would suck major PACIFIER if I had a down month. But I’ll be tracking my net worth for about 40 years, so I’m pretty sure a down month is inevitable. But I’d rather deal with it at some distant future time. Right now, I want to continue my gains, however small. Here’s the low down:

Assets:

Cash- $8,980. A modest 2.49% over the last month. I didn’t make any effort to save this month and I won’t do so until I fund my brokerage account with about $5,000. Thus any growth you see here is a reflection of money in my pocket, money in my checking account and interest accrued in my savings account.

Stocks- $5,470. Ugh, nearly a 5% decrease. The market was not my friend this month. Hopefully it get its stuff together. I’m not a fan of the possibility of a double dip recession. But, hey, on the bright side, it would bring some of those prices down. And you guys know I love a sale.

Retirement – $3,086. A 2.66% increase. Like my Stocks section, I lost a lot of money here. However, I had an automatic contribution that offset those losses. I’m hoping to beef up this account even further with my tax return.

Liabilities

Credit Cards- $140. So, Networth IQ says this was a 77% decrease in my credit card bills. Little do they know that these aren’t the same bills from last month, but rather new bills. But whatever, seeing that I attacked my credit card bills with a 77% Karate Chop makes me feel good. And I am not above distorting reality for a good feeling.

And there you have it. Later this week (a.k.a tomorrow) I’ll be focusing on my expenses wondering why the heck I’ve spent all but $176 dollars out of my entire monthly paycheck. Yeah, it’s that bad. Hopefully that analysis will allow me to hone in where I’m leaking money and be able to save in February.