What Does It Mean to Be 'Rich'?

I should have realized that declaring yourself the descendant of "rich" parents would cause a lot of unrest amongst my readers. I think maybe most of you pictured me growing up so poor I had to share a bowl of slop with my ten brothers and sisters in a one room house. Not so true. But was I rich as I so famously declared in this post? Or, more importantly, are my meddling yet charitable parents rich? I'll let you decide that in a bit.


But first, what if you decided my parents were filthy, old money, Bart Bass on Gossip Girls, rich? What would that mean for me? I have about $100 in my bank account right now to last me until next Wednesday. Hardly enough money to buy a drink at The Plaza. And sure I get a couple of handouts once in a while, but if you are interested in trading a father who gives you a hundred dollars a month versus one who lets you make your own relationship decisions, then give me your address and I'll gladly trade with you.

Yet, I live in a low cost of living area so my salary of $43,600 is well above the median household income for my city - $33,000. But I never feel rich because I am paying off so much debt. If and when I move in officially with Boyfriend, our household income will be over $130,000 and we will be statistically speaking quite rich. We probably won't feel rich then either because we will both be saving and paying off debt.

MSN Money did an article today on how to tell if you are rich. Because of the reaction to my post I tried to see if my parents could officially be categorized as "rich." The closest city listed on the chart was New York City, where the average household income is $240,000. My parents live in a suburb of New York City and I don't know how much their income is. My Dad is self-employed and therefore his income varies greatly from year to year. My Mom's salary is public information, as is mine, and it is about $100,000. They also pay about $25,000 a year in property tax. Rental income brings in about $20,000-$30,000. Hypothetically, let's say they make a combined $350,000 a year. This would only make them "rich" in NYC if they had no kids. Yet they have two living at home.

In short, my parents are well off but not crazy OMG rich. You may think differently if you spend time with them. They like nice things and were delighted to throw my sister a 200 person wedding. They belong to a private club and have hired help clean the house, landscape and do home improvement tasks. Growing up I had nannies, yes nannies, but in my Mother's defense, she was getting her Master's Degree at the time.

Yet I worry about my parent's finances. They have taken a huge hit in their retirement accounts with only five years to go before retirement. My little sister is expected to start college in a year and a half and we never qualify for financial aid. Most of my parents' wealth is tied up in real estate that is declining in value and they have expressed no desire to ever leave our mammoth house behind.

Bottom line, no matter how much money my parents have, I'm just as poor as a church mouse and though my Dad is paying $303 a month now towards one of my student loans, there's no chance I will get a $50,000 windfall like Her over at Make Love Not Debt towards paying back my loans. But stick with me and I will pay back my student loans (largely) by myself. Probably then I'll have to start a new blog about how "rich" I am.

What about you guys? Anyone else rich on paper but not in reality?

Six Months of Blogging!

Hey guess what? It's been six months since I started this blog!! Well the official half birthday was yesterday but I reserve Sunday for football, cooking and hanging out with my Boyfriend. But I will now take this time to reflect on the past six months.

On May 16, I revealed that I was lousy with money, needed to do something about it and own up to the $167,000,000 in student loans I had. Did you catch that decimal error? I didn't at first but luckily one of you did. Sometimes it feels like I have millions of dollars in student loans but in reality it's only about $136,000.

I set out some goals for myself that day and here they are:

1. Survive the next 8 days on $157.

Ha! I regularly budget myself way less than that much pocket money to last an entire 14 day period.

2. Pay off "short-term" debt - two payday loans totaling about $400; loans from friends and family totaling $460 ; pay overdue bills - utilities around $400, cable around $200.

On June 30, I finally paid off the last of my payday loans - yikes. Not something I ever ever want to have to turn to again. I also paid back Friend A, to whom I owed $200. I've paid back Boyfriend most of the money I borrowed from him and am working on paying the rest back. I worked out a Payment Agreement with my utility company. As for cable, I'm not sure if I owe them anything but it's not a bad idea to find out.

3. Develop a working budget.

I make a budget for every payday. Technically it's more of a Spending Plan then a Budget but I call it a Budget and it's working for me so far.

4. Start paying as much of my student loans as possible.

I'm working on it. I currently pay $666 in student loans a month. Yes you read that right. It's going to go up to $706 soon. My Dad pays $305 on my behalf. That's about all I can bear right now. I wasn't paying them at all prior to starting this blog so that's been a huge change.

5. Save up an Emergency Fund of $1000.

I'm working on it. Saving money is kinda hard when you are on a tight budget. I created an Emergency Fund but I linked it to my Checking Account because the emergency I'm most hoping to avoid is getting hit with overdraft fees, something that I know all too well about.

6. Contribute to my Roth IRA.

Fail. Well I changed my mind on this one and decided to contribute instead to my 457 Retirement Plan. I'm putting 7% of my pre-tax income in there (so far I've contributed about $1000) and currently have about $769 remaining. It's not much compared to the amount the average 28 year old has saved for retirement but you gotta start somewhere.

Over the past six months of budgeting and blogging I've learned a lot about personal finance and also my relationship with money. I've also reached some personal milestones in large part due to this new knowledge:

• I quit smoking!!! You need a heck of a lot less pocket money when you are not spending $7 a day on something that will kill you. I am unbelievably proud of this accomplishment as are all my friends and family (and many readers too!).


• I quit the gym. Okay so I know this isn't something I should be proud of since I think working out is really important but it just represents the fact that you should stop paying for things you don't need, aka if you never go to the gym, stop paying $46 a month for it!


• I reduced my cell phone bill by about $30!


• I settled an old debt with a collection agency. Another 15 months of paying $125 a month and I will finally have that friggen old credit card out of my life forever!


• I stopped taking regular handouts from my parents! This is a huge step on my road to independence.

So it's taken a while and I admit I'm still behind the curve of most fiscally fit 28 year olds but no one ever said it would be easy paying for all my money mistakes. Hopefully the next six months will produce some results as well, most notably keeping my job and building up an Emergency Fund.

As far as the blog goes, it's no masterpiece and there are lots of design bugs I haven't taken the time to fix. I need to update my blogroll and find new ways to attract revenue but I have made $60 in ads which is pretty cool. I have 54 subscribers (thanks!) and average about 100 readers per day (wow!). I know I should be participating in more carnivals but alas I never remember to sign up. I have lots of ideas for future content (recipes and book reviews to name a few) so if you've enjoyed the past six months then stay tuned.

Trying to Quit Smoking - Day 3

For all the obvious reasons, I need to quit smoking. Health problems, social stigma, clothes smelling, etc. But, for me, I have always told myself I would quit smoking before I got married. Or before I turned 30. I don't know, it varied. Now it looks like one of those two things may happen in the next two years!!!

Haha, I'm not getting married, just older.

But Boyfriend and I have talked about children - kind of in the "one day" frame of mind that every couple in love must do I imagine and it has been kind of a kick in the pants to quit smoking within a few years of deciding to start a family.

So, here I am, starting. I haven't had a cigarette since Saturday around 11 p.m.

Sunday was pretty easy. I slept late and when I woke up and saw that my last pack was empty, decided that now was a good a time as ever to quit. Stayed busy with Boyfriend all day and hardly had any cravings - Boyfriend was very encouraging. The worst part was after a nice big meal Sunday night I REALLY wanted to smoke but I didn't have any and was already proud of my progress.

Monday was hard. I had really vivid dreams and was very high strung at work. I also got bored REALLY easily as there was nothing to break up the day for me. Smoking was always the way I rewarded myself after accomplishing a project and without it, the day seemed really long. Physical cravings were bad on Monday and I snacked A LOT.

Today, Tuesday, has been the worst so far. Physical cravings aren't as bad but mental cravings are undeniable. I am in mourning for cigarettes if you can believe that. I've played a reel in my head of all the wonderful times I've had smoking and started picturing myself ostracized from friends that smoked, etc. I see myself sitting on a park bench somewhere looking out of place without a cigarette. I noticed people hundreds of yards away smoking today and envied them. I am so unbelievably anxious and bored without smoking but nothing can hold my attention for more than 10 minutes at a time.

Money is a big factor in why I am quitting smoking. Not just the $6.90 a pack of smokes costs in New York these days but the fact that I usually pay for them with cash and therefore have an extra three bucks just sitting in my pocket that easily gets spent as well. In my earlier days I've been known to spend money I did not have just for a pack of cigarettes. That is all, hopefully, going to change.

I just need to get through another couple of days before I can officially announce that I have quit. Wish me luck!

A month of Blogging and Progress!

So it's been one month since my first post and although things are still pretty dire on the financial front, I realize I've actually made a lot of progress in a short period of time.

1. I settled an old credit card account and am happy to report that this debt will be gone forever in just 23 more months!

2. I started paying Sallie Mae after almost going into default.

3. I've started tracking every dollar I spend online and through this blog.

4. I finished paying back a friend the money I owed him.

5. I finally paid enough back to my credit card so that it is no longer maxed out.

6. I've made budgets for myself and tried very hard to stick to them.

7. I've looked for ways to save money - including no more vending machine purchases and bringing lunch to work with me.

8. I am very close to being done with payday loans.

9. I have secured two job interviews, one of which looks very promising.

10. I've made goals for the month and for the rest of the year (see my sidebar!).


So all in all, I am happy about what I've done so far. It may not seem like much but believe me, I was much worse off before - bouncing checks left and right, getting overdrafted, spending money I didn't have, etc. Hopefully the next month will bring even more progress.

The First Step

....is admitting you have a problem. And boy, do I. I've been reading lots and lots of Personal Finance Blogs over the past couple of weeks and have decided I wanted to join this community of people baring all (albeit anonymously for me) and document my journey to financial fitness.

About Me
I'm 28 years old and living in a medium size city with a professional degree and lots of student loan debt. A butload in fact. $167,000,000 at last count though I admit I haven't been on top of them as every time I check up on my finances I get overwhelmed and more than a little depressed. I officially owe my life to Sallie Mae and other lenders, thus the name Sallie's Niece.

So I've decided to set some financial goals after a month or so of really bad financial problems.

Here are the goals as of today:

1. Survive the next 8 days on $157. Not too terrible I realize - luckily my $600 from the federal government came in today so that my rent check went through and I have a little left over (a rarity).

2. Pay off "short-term" debt - two payday loans (never buy these!!!) totaling about $400; loans from friends and family totaling $460 (super embarrassing as one of these friends is now out of work); pay overdue bills - utilities around $400, cable (now shut off) around $200.

3. Develop a working budget. This has already started but it turns out I have absolutely no idea where some of my money goes every month so I am vigorously tracking it now.

4. Start paying as much of my student loans as possible.

5. Save up an Emergency Fund of $1000.

6. Contribute (after a long lapse in which I drained all my savings) to my Roth IRA.

These aren't ordered in any real order (I don't know how long it will take me to tackle that utility bill for instance) but it's a general idea for how I want to go about getting out of this hole.

Let's hope things get better from here on out.