The Cost of a Nap is $12.23/hr

A lot of students in school (myself included) like to sleep in and miss their morning classes. Heck, a lot of students like to sleep through their afternoon classes. And let’s not forget evening classes either…

My friend used to do this a lot, and I always yelled at him. What is the point of studying in university if you are going to be napping through your classes? In order to threaten him into going to classes, I asked him to calculate the ‘cost’ of his naps.

I calculated it today, and it’s actually $12.23 per hour. So a three hour class that meets each week would be $12.23 x 3 hrs for $36.69 per week.

Even worse than that cost, I think, is the amount of invaluable information that I would miss if I missed my classes. I try not to miss any classes because I learn best by listening to someone speak for a few hours rather than reading the information. It inevitably shows up on the final exam anyways. Even worse yet is the possibility of spending so much money on school and then flunking out—then what do you have to show for your debt? Not to say that napping through one or two classes will flunk you out, but the missing class adds up financially and takes a hit on you academically.

Pay Day is a Happy Day!

Today I got paid, and promptly put the money into my bank account. That bumps me up to about 42.8% of my goal. The crummy thing is that I couldn't put my entire paycheck towards paying off my student loans because I have to set aside money for next month's rent, as well as my visa bill this month. Yuck. But glad to see that I'm at 42.8% nonetheless!

Short Term vs. Long Term GIC

I've been looking at GICs and thinking about my options, considering I have to pay for my term studying abroad as well as paying off my student loans by summer of next year. A financial advisor at CIBC told me it was better to put my money into short term GICs--mostly because I'm a student, but also because short term GICs will pay out interest at the end of 30, 60, or 90 day periods. This is better than GICs that wait until one year to pay you interest. So I went about calculating the difference to see what that would look like.

Assume that you have $1000. Let's calculate the difference between parking it in a 30 day GIC repeatedly for one year (i.e., taking the principle plus interest and putting it into another 30 day GIC over and over for a year) versus just putting that principle into a one year GIC. Both GICs pay 4.25%.

$1000 in a one year GIC at 4.25% will yield $42.50 at the end of the year.

On the other hand, how about $1000 in twelve 30-day GICs?

Month	Interest	Running Total
1	$3.49	$1003.49
2	$3.51	$1007.00
3	$3.52	$1010.52
4	$3.53	$1014.05
5	$3.54	$1017.59
6	$3.55	$1021.14
7	$3.57	$1024.71
8	$3.58	$1028.29
9	$3.59	$1031.88
10	$3.60	$1035.49
11	$3.62	$1039.10
12	$3.63	$1042.73

So the total difference between a one year GIC and using twelve 30-day GICs ($1042.73 - $1042.50) is a grand total of $0.23 in one year. Ahh, the value of compound interest. (Granted, twelve 30-day GICs means only 360 days, so there's a five day difference between comparing the totals... School is teaching me to point out the limitations of my research.)

My Money Status

I'm going to keep a post just to log changes to my money status. Hopefully this will serve as a timeline for me.

October 12, 2007
Student Loans - $9000/$21033

42.8%

Exchange - $4366.55/$6500

67.2%

September 24, 2007
Student Loans - $9000/$21033

42.8%

Exchange - $2821.30/$6500

43.4%

September 13, 2007
Student Loans - $9000/$21033

42.8%

Exchange - $2696/$6500

41.5%

September 12, 2007
Student Loans - $9000/$21033

42.8%

Exchange - $1975/$6500

30.4%

August 8, 2007
Student Loans - $9000/$21033

42.8%

Exchange - $1000/$7000

14%

July 25, 2007
Student Loans - $9000/$21033

42.8%

July 11, 2007
Student Loans - $8076/$21033

38.4%

July 10, 2007 - my blog's birthday!
Student Loans - $7109/$21033

33.8%

Chasing Interest Rates

I recently found out about HSBC's new online savings account, which is just like ING Direct's online banking system. ING right now is at 4.25% whereas HSBC is at 5.00%--although both are at promotional rates and go back down to 3.50% afterwards.

The funny thing about these differences in interest rates (0.75%) is that it's really not that much. Unless you have a boatload of cash sitting around, chasing interest rates isn't necessarily that worth it, in my opinion. I feel like it's those people who line up at the gas station just cause gas is under a dollar. Let's say gas is usually about $1.03 per litre, and today you see it's at $0.99 per litre. People go, "wow! It's under a dollar!" and go and fill up. Well, suppose that's four cents savings for a 30 litre tank. That's saving $1.20 by filling up there. I'm sure somebody will say, oh, $1.20 adds up and whatnot, but filling up at those times probably requires waiting three times as long to fill up because of the long lines. In the same way, unless you have $10 000 to park in a savings account, the interest rate difference from 4.25% to 5.00% isn't really much.

However, I'm a student, and I have student loan debt looming over my head everyday. I also have all of my assets pretty liquid because I am saving for my exchange term next year. So, 0.75% interest is a big deal to me.

I've had an account with ING Direct for awhile now. (Leave me a message and I'll refer you so we can each get $13!) I love banking with them because they make everything so simple. Whenever I call them, I don't have to wait long to get a person to speak to instead of a machine. And I always get high interest rates with them.

I just signed up for the HSBC savings account last week and I'm just waiting while the account starts up. I'm not sure what's supposed to happen and I'm confused already. Basically I don't know when my account is set up until I notice they've cashed my initial deposit. Then I'm supposed to call them, I think... I'm going to write more about it once I figure out what's going on.

Marketing Ploys

My main method of curbing my spending is understanding why and when I spend money. I know that marketing is all about playing on your emotions too so I pay a lot of attention to it.

Today, I was just looking around for a black cardigan. I found one online, but do you know what the description says??

What ridiculous crap!! How can a sweater do miraculous things for your social life? Does this sweater help me make new friends? Does this sweater teach me how to say things to people? Unless this is some sort of magic sweater, I don't see how they can claim that it will do "miraculous things for my social life." Puh-lease.

Three Weeks in to July

It's been three weeks in to July and I'm just looking at how much I have spent for the month so far.

Some highlights:

• $55 on eating out at restaurants ($20 of it on lunches at work)
• $94 on groceries
• $9 for entertainment
• $80 on clothing ($30 of it on tailoring old clothes)

This tells me what I already knew--that I spend too much on clothes and eating out, and I hardly spend any money on socializing. The only money I spent on socializing was $35 for eating out at restaurants and $9 for entertainment on Canada Day. In comparison, I spent $80 on looking good. I'm spending way too much on stuff that depreciates and not enough on emotional things, like relationships, which is more important.

Holy Grail Shoes

Being a 22 year old girl (woman?) and a student, I often have to balance my desire for clothes and shoes with my budget and empty wallet. So instead of just buying anything, I really take time to make sure I pick out things that I like and can work in almost any situation.

Over the weekend I got a pair of shoes that are great for work. They're pointy toe black flats that look like the picture to the right. I absolutely love them because they're comfortable and go with absolutely everything for both work AND school. And I can walk in them all day long. The best part? $9.99 plus tax!

The reason why I buy a lot of shoes is because they never feel comfortable enough and they don't work with all of my outfits. Luckily, with these shoes, I'm hoping that I can just wear these new black flats for the rest of my life.

Me, My Parents, and My Visa Bill

Ever since I started university, my parents have watched every single bill I get. Yes, my parents open my bank statements and my visa bills. They do this with my younger brother as well. They claim they do it because they're afraid we'll miss a payment or make a late payment otherwise, but I know the truth is that they want to know exactly where we spend our money.

My brother spends freely like money is water, and so he gets a lot of heat from my parents for his insane visa bills. He'll even make late payments!

I try to cut down on my spending by eating more cheaply. This concerns my parents a lot. They think that I am starving myself to pay for school, so they always tell me "remember to eat" even though it's ridiculous--how can I forget to eat?

The other thing my parents have done in the past when they've worried I've been cheap on food in order to pay for school is that they'll occassionally pay my visa bill for me. Now, that makes me concerned, because:

1. They don't even have enough money to retire, how can they start paying my visa bills?
2. What kind of financial responsibility will that teach me if I can just rely on my parents to pay off my visa?

So what I end up doing is not watching the payment due date like most people. Instead, what I do is go online to watch the statement issue date like a hawk. About two days or so before the statement is issued for the month, I go in and pay the balance. That way, when the visa statement arrives at my parents' house, they'll open it and see a ridiculously low balance. Hence, they think I'm frugal, and I get them to stop paying my bills.

I'm writing this cause my statement will be issued in another two days. Time to go pay off that balance.

Financial One Upmanship

When I was in my last year of high school, people were getting kind of antsy and less helpful with one another. Everybody was stressed about what school they would get into for next year. Nobody wanted to help anybody out because they saw everyone else as competition, and helping others would mean helping the enemy!

I hoped that would change after everyone got into university or college; that this competitiveness would end. But after everyone got into university, there was a change in attitudes. People in more “elite” programs, like engineering, felt like they had the right to degrade other people. They thought that since their program was harder to get into, they were automatically smarter and had more say than people in inferior programs, like arts. We moved from one social hierarchy to another; we were no longer high school seniors. Everybody found a new way to feel better about themselves by talking down to people in “easier” programs. It never occurred to anybody that maybe people went into different programs because that’s where their interests were.

I feel like that same kind of superiority complex exists in the personal finance world. People become so concerned about money and learning how to be smart with their money. Don’t pay just the minimums on your cards, make sure you pay yourself first, retirement is not as far away as you think, etc., etc… Sometimes I see people blogging that so-and-so only pays the minimum on her cards and how stupid that is. I’m guilty of it myself with one of my best friends, just cause he spent more money than I would have myself. That’s the downside of personal finance—the one upmanship that I know more about money than you do, and that makes me smarter.

The other thing I see about personal finance that’s interesting is that people in debt tend to come together. They understand what other people are doing and push each other to do better. That’s a lot more interesting. Like Leigh Ann at Save Leigh Ann, who was supported by so many other bloggers when she realized that she had a lot more debt than she previously thought. That’s what makes the personal finance blogging world so incredible. People don’t even know each other, but encourage each other to pay off that debt! I wish things were always like that.

Financial Awakenings

I've been reading other personal finance blogs and I like to read the "about me" section to get a feel of how much debt they have, or what other financial problems they're dealing with. What I see a lot is that people have "financial awakenings," where they one day wake up and realize I can't do this anymore. Like Louise at Eliminate My Debt or Krystal over at Give Me Back My Five Bucks. Even my beloved DebtKid had a financial awakening.

So, I wonder, when was my financial awakening? I don't think I have one. Or maybe, my financial awakening happened in a different way.

When I was about eight years old, my dad gave me a dollar. Instead of saving it, I ended up buying a pencil and eraser with it. Later that day, my dad asked me where my dollar was, and I showed him the pencil and eraser instead. He had such disappointment on his face that I couldn't keep that dollar for even one day--and the guilt I had over disappointing my father has never left me. In fact, I feel the exact same guilt whenever I spend money. Spending money or losing it doesn't matter much to me, but disappointing my dad means a lot to me, so I've always been rather concious about it.

The other reason why I've been so obssessed with paying for school is because of my dad's hardships. Before we immigrated to Canada, he ran a successful business and had tons of assets. He decided to sell all of those so that he could raise me in Canada and make sure I got a proper education and upbringing. Because my dad never even graduated from high school, he had a hard time getting a decent job over here. It doesn't matter that he successfully managed his own business overseas because that's just not recognized over here when you have to leave the "education" part of any job application blank. My dad is actually a senior citizen now, but he continues to work everyday, waiting for me to graduate so I can support him. I feel that being financially responsible so I can support my parents after graduating is the least I can do for all they have done for me--selling all of their assets and moving to a new country to start over in their forties must have been daunting. I had secretly hoped that paying for school by myself would allow my dad to retire sooner, but he told me he can't until I bring home money.

I guess I didn't have financial awakenings because I always remembered, in the back of my head, what my dad's done for me and I'll always be thankful for that.

Archilles Heel

I came across an article on barriers to success that features Chris Garnder from the Pursuit of Happyness. I can totally relate to this article because I absolutely hate answering messages and phone calls. This started sometime in my final year of high school, right around the time I became depressed and my mom got cancer. I just couldn't deal with school properly, so I skipped classes, and would get phone calls home. That was four years ago, and I still cringe when I see that I have messages to answer. It's something I have to make sure I work on for my personal development. I loved reading this article because it reminds me that I just have to deal with my flaws head on.

Inspirational Finance Stories

I came across this website last night. It has 100 inspirational personal finance stories online, which I plan to read.

Apart from that, I'm going home this weekend! Yippee!

Current Financial Goals (now to 2008)

When I started university, I wanted to pay for school by myself. I always assumed that if I could pay for school, then that would free up money for my dad to retire as soon as possible--something I want him to do for his own health and happiness. So that's goal #1: pay for school by myself. So far, so good. (If you can call paying for school by using a substantial chunk of borrowed money actually "paying for school by myself," lol).

When I thought about paying for school by myself, I asked the admissions officer how much tuition would cost. I worked out tuition and rent to be at a base of $40 000, in addition to living expenses, transportation costs home, and textbooks. I figured I'd be able to pay for school by myself, but the idea of graduating with $40 000 in debt?! No thanks! So that led to goal #2: graduate with no student loan debt.

Luckily, I might just be able to accomplish that goal. I have $21 033 in student loan debt that I don't plan on increasing--so $21 033 has become the magic total student loan debt number I need to pay off. I was lucky enough to get $20 000 USD in scholarship money, of which I've used $9000 USD to pay for school. I'll also be able to make more than $21 000 CDN from working while in school. Things are going to be pretty tight, but my desire to go on exchange means goal #3: save as much as possible from now until April 2008 to pay down my loans AND go on exchange! Unfortunately, I'm not saving as much as I could, but I'm not going to kick myself over every $5.

These goals have taught me to become more and more financially responsible for myself. I've gotten credit cards that I pay in full every month, used budgets, shopped around for the best bank accounts, and keep my money in high interest accounts. I'm so glad I'm learning so much that I can apply to my future financial goals--like saving up for graduate studies or a downpayment on property. I think it'll be amazing to look back on these posts in a year or two and think about how far I've come along.

Pay Day!

I got paid today, which brings my savings up from 33.8% to 38.4%. Yay!

The cruddy thing about work, though, is the fact that I basically walk through the mall to get home. It's the shortest route; otherwise I have to circle around it, and I hate that because of all the bad city air/car exhaust on the street. Oh well, I guess this is a test of self-restraint during the summer sales.

I'm planning on going home for the weekend. My friend's going to drive, and I plan on giving him some money which should cover the gas bill. The annoying thing is that my other friend found out and basically invited herself along. I'm sure she's not going to offer any money to the guy who's driving. I think that's just poor manners to expect a free ride when it's going to be at least a five hour drive.

It usually irritates me when people are being cheap. I mean, I don't have money either, so I know what it feels like. But I hate it when people don't have money and just complain about it. Like another friend of mine, who wanted a weekend away, and all she did was try to get free rides off other people and complain the whole time about how she couldn't afford it. If you want to get away for the weekend, fine. Set some money aside for it! Don't complain that you don't have money for it and then do it anyway.

Sigh. At least I can be happy that I got paid today!

First Post

Hi, and welcome to my blog. I'm a 22 year old full-time student with one year left of studies. I've been paying for school by myself and want to graduate with a positive net worth.

About me:

• I am Canadian and American
• I will graduate in 2008
• I am planning on going on exchange for my last term of undergrad (January 2008 in England)
• I work while in school and save that money to pay for school
• My current student loan amount is around $21 000 CDN right now

This is my journey to graduate with as little debt as possible.