2012 Income and Expenses

2012 was a great year in terms of income-- I hit another new high:

Salary $106,244
Bonus $18,239
Employer contributions to my 401K $8,119
Dividends $15,977
Realized Gain (from a fund change made in 401k) $11,347
Blogging income $4,402
Gifts received $100
Interest $208
Tax refunds $2,516
Total Income $167,152

Almost all the dividends and realized gains were reinvested, and sometimes I don't really even consider these "real" income. But I love seeing my money work for me-- that is over $35,000 worth of income made not from labor but from my own savings and 401K participation.

The other income I had this year was $10,000 in rent from the tenants in my apartment, but for this year, I am kind of looking at it as a defrayal of my housing expenses. I'll start breaking this out differently next year, as I'll be reclassifying some of my expenses as business expenses for an investment property rather than personal household expenses.

Now for expenses:

Bank Charge	$77
Charity	$1,153
Clothing	$3,062
Dining / Groceries	$11,296
Education	$458
Entertainment	$1,364
Gifts Given	$2,266
Gym	$2,249
Household	$1,792
Housing (net)	$11,974
Income taxes	$34,639
Medical	$1,714
Miscellaneous	$3,434
Newspapers and Magazines	$404
Travel	$8,421
Utilities Internet Access	$360
Utilities Telephone	$953

A few notes:

• Charity refers to my personal contributions. I also plan to donate all the blogging income from this site.
• Dining-- about $8500 of this is for stuff shared with Sweetie. (I have to admit that we have been indulging in fancier wines than we used to! We buy it by the mixed case and usually 1 or 2 of the bottles is a special treat, i.e. something in the $16-35 range, compared to the $9-12 range for the rest. But at least in restaurants, we tend to stay with whatever's cheapest.) The rest is mostly for my own breakfasts and lunches.
• Entertainment was pretty high this year, due to buying more tickets for concerts and theater, including a rather expensive one to see Madonna at Yankee Stadium
• Gym-- this covers a membership renewal for 2 years
• Household is mainly laundry and dry-cleaning, plus a new armchair for the apartment Sweetie and I now share
• Housing-- as noted above, I pulled together my housing expenses such as condo charges, property tax, mortgage interest, rent I pay to Sweetie, and gas and electric charges for my condo, and then subtracted the rent I receive from tenants to arrive at a net housing cost for the year. This does not include about $10,000 in mortgage principal I've paid off, as I view that as a transfer from my cash net worth to home equity.
• Miscellaneous included a new iPhone and a lot of art supplies, plus haircuts and all the usual little personal items
• Travel includes daily commuting, some family visits, and a 2-week summer vacation in Europe.

Total expenses for the year came to $85,616. This is also an all-time high. I think the new iPhone, big vacation, 2-year gym expense and new chair account for a lot of that, plus trying to take better advantage of all the culture NYC has to offer.

Net savings were $81,536, of which $10,125 is the transfer to home equity for paying off mortgage principal. This is NOT an all-time high, but it's second only to the year when I received a $25,000 inheritance, so I'm not going to beat myself up about it. I saved about $5000 more than I did last year,
and about $9000 more than I did in 2010 if you back out the inheritance.

As always, I could easily have cut back on expenses and saved more, and I always have these thoughts about how much sooner I could retire if I did, and whether I'll wish I had saved more when there's another economic crisis... but at the end of the day, I am comfortable enough with my savings and net worth so far to allow myself some luxuries. I feel very, very lucky and thankful for the good fortune that has come my way.

Single Ma Wants Me to Write About Booze. Again.

I do so hate to disappoint my friends!

In April's spending, I listed a total of $653 for dining, which includes all food bought in restaurants or take-out, as well as groceries and liquor. This is close to what I've budgeted for monthly spending for the last few years, $650. This always sounds like a lot, especially people who live outside NYC, but I've always rationalized it by noting that the culture here is just to eat out a lot, because people don't tend to have enough space to socialize at home. Compared to most of my peers, I probably dine in restaurants less frequently.

Anyway, of that $653, only $24 was sub-categorized as liquor. I was shocked to see this! The Dinner sub-category, for restaurant meals, was $336, and that probably included some wine. But other than that, I tend not to go out to bars and just drink wine at home. That wine tends to be purchased by the case, which Sweetie and I alternate doing. April was not a month where I made that purchase, but March was-- my liquor expense that month was $157. When we buy a case, it tends to come to a little over $100, as we try to find the cheaper stuff where mixed cases are discounted. Recent faves include Robertson, a South African Sauvignon Blanc, a Torrontes called La Linda, and Chateau de Castelneau Entre-Deux-Mers. If I started a separate blog called "Cheap White Wines I Drank This Week," would anyone read it?

The only other story I have to tell about booze is actually a couple of months old. Sweetie and I went out with an old friend who has become a total wine snob since moving to the West coast. We went to Henry's End, a cute little place in Brooklyn Heights that has a nice wine list. After much discussion with the waiter, a very good bottle of red wine was ordered. Then a different one was ordered when that was done. And then I think we might have had a third, I don't even remember! But what I do remember was feeling a bit shocked when I saw my share of the bill-- those bottles were way beyond my usual price range!
I don't remember what they all were, but I know one was called The Prisoner, which is listed at $55 on the Henry's End wine list. This is one of those classic situations that always pop up in etiquette columns, about how to deal with people who want you to pay for what you wouldn't have ordered if you were in control, but in this case, I have to say I didn't mind. The total I ended up paying for my share of the whole meal was something like $120, and it was an incredible meal. The wine was delicious and I was glad I tried something I never would have tried otherwise. And the friend knew us well enough to know that it wasn't a financial hardship totally out of proportion with our lifestyles.

So that's the scoop, SingleMa! You can live vicariously through my drinking while I live vicariously through your training for that 5k!

Single Ma Wants Me to Write About Booze.

It's actually not a bad topic for a post this week...

The other night, I went to see a play at St Ann's Warehouse in Brooklyn (The New Electric Ballroom, well worth seeing. You can get discounted tickets using a code from Broadway Box). Before the show, we went to the nearby Water Street Restaurant. It's a convenient place for a pre-show meal, and they have really good burgers, but we were incredibly disgruntled by the wine!

First of all, the wine list is very limited, especially if you just want a glass-- they have a much better selection of beers. But I knew if I drank beer, I'd be wanting to go to the bathroom during the no-intermission play! So I had one glass of wine-- $8 for a fairly mediocre glass of Argentine Chardonnay. There was no Pinot Grigio or New Zealand Sauvignon Blanc by the glass, which would have been safer. And the $8 Coppola Chardonnay was terrible, and the $7 American Sauvignon Blanc was almost undrinkable.

Even worse, these glasses of wine were small! Some restaurants at least give you a generous glass of perhaps 8 or 10 ounces, but these were probably 6 ounce glasses, and not especially full.
We got into a discussion of what the going rate is for glasses of wine-- $6 is probably a standard amount in New York, for something cheap but acceptable. Sometimes you'll see a $5 house wine, maybe even $4, but it's usually pretty bad. And of course if you go to a place that fancies itself more of a wine bar, you can often choose from a selection of glasses from $7 -10, and even higher. This may seem pricey, but sometimes I think it's nice to be able to sample interesting wines-- I'd rather pay a little more occasionally just to taste something a little unusual.

In many cases, it's better just to opt for a bottle of wine. The price of a bottle will tend to be about four times the price of a glass, though the volume of wine is usually closer to 5 glasses, unless you're in one of these places that pours very big glasses. If you don't want to consume an entire bottle, don't forget that at least in some states, most restaurants are now happy to let you take a partial bottle home with you-- they are required to re-cork it and seal it in a plastic bag along with the receipt, usually-- I think the law varies by state. But boy, were we glad we hadn't bought a whole bottle the other night! (For what it's worth, the Water Street waitress told us they just hired a new manager who was planning to vastly improve their wine list in the near future.)

And if you do happen to go to St. Ann's Warehouse, don't feel you have to get all your drinking done in the nearby restaurants-- they actually have quite a nice little bar area right in the lobby by the box office. And we were quite chagrined to see that they serve Root 1 wine there, which happens to be one of our favorites. And they only charge $6 a glass.

Now Single Ma, you just let me know if you have any other requests! xoxo

Wine & Money

An article in today's Dining section of the Times talks about whether enjoyment of wine is affected by outside factors such as the circumstances in which you drink it, or knowing how much it cost.

The researchers scanned the brains of 21 volunteer wine novices as they administered tiny tastes of wine, measuring sensations in the medial orbitofrontal cortex, the part of the brain where flavor responses apparently register. The subjects were told only the price of the wines. Without their knowledge, they tasted one wine twice, and were given two different prices for that wine. Invariably they preferred the one they thought was more expensive.

“Forget those blurbs about bouquets, body and berries,” one newspaper account crowed. “A meticulous new study found that the more people think a wine cost, the more they like it. And the less they think it cost, the less they like it.”

Big surprise. Sommeliers all over know that the hardest wine to sell in a restaurant is the cheapest bottle on the list. “Yeah, clients don’t want to be embarrassed in front of a date, so they don’t order the cheapest wines,” said Fred Dexheimer, the wine director of the BLT restaurant group. The fact is, the correlation between price and quality is so powerful that it affects not just our perception of wine but of all consumer goods.

Studies like this seem to come up every so often, so this is no big surprise. But what these studies have never taken into account, as far as I know, is the subjects' attitudes towards money. I think that a frugal-minded personal finance blogger might be more likely to enjoy a cheap wine just because it's cheap. I know I can be this way-- sometimes I probably like things just because I am so happy I got a bargain when buying them. Someone who really values saving money might not enjoy an expensive wine just because they want to believe that a cheap one is just as good.
On the other hand, someone who is very focused on attaining wealth and luxury goods and projecting a certain image of their financial status might be more likely to enjoy an expensive wine, because they believe expensive things should be better, and because they want to feel like their hard-earned money is buying them the kind of rewards they deserve. After all, if expensive things aren't better, there's no value to being rich, right?

Obviously, the answer is for some researchers to set up a study comparing the wine tastes of personal finance bloggers to those of the rest of the population at large. I hereby volunteer to be your first guinea pig!

A Dinner with Friends

I went out the other night with 3 college friends:

Annabelle was visiting from out of town. She was just made a Vice President at a Silicon Valley company and though she totally downplays any sign of material success, I think she must make a lot of money.

Beatrice and Charlotte both live here in NYC. They are both involved in theater: one has a day job to support herself, and the other is currently living off some grant money.

Charlotte picked the restaurant, a cute Italian place in Hell's Kitchen. I figured she would pick something reasonably priced but it turned out to be rather pricey-- appetizers and salads were over $10, and pasta dishes were $13-18 for portions that were not skimpy, but not large enough to share either. The wine list didn't have many choices under $30.

We had a nice dinner: Beatrice and Charlotte just had an entrée each-- actually Charlotte had half an entrée, since she took the rest home in a doggie bag. Annabelle and I split a salad to start. All four of us shared one bottle of wine. (I know, this sounds shocking for me! When we were ordering I originally proposed we get a bottle each of red and white, but no one else seemed to like that idea, so I just nursed my one large glass...) We all split 2 desserts, I had a coffee, and Annabelle and Charlotte each had a brandy. I definitely felt like Annabelle and I were more inclined to just order whatever we felt like having, whereas Beatrice and Charlotte were being more careful.

When the bill came, it was about $180 before tip. We all took out our wallets and started trying to figure out the tip, when Annabelle said, "I should pay for this," saying she'd come into town and invited us all out at the last minute. We all of course protested, saying that was a silly reason for her to think she should pay. Then I semi-jokingly added, "Unless you're expensing it!" We joked about her new Vice Presidency for a minute, and she said, "Hey, yeah, I've been telling you about my company all night and you're all going to check out our website, right? I should expense it!" At that, Beatrice and Charlotte said "Whoo-hoo, thanks!" I said "Are you sure?" Annabelle insisted it was no problem so I let it go and thanked her too. But I suspect that she may have actually used a personal credit card to pay for it anyway!

Anyway, I guess I just found it interesting to see how different people seem to deal with accepting the generosity of a friend. Sometimes it seems awkward to accept, and sometimes when you know the person wants to be generous, and can afford to be generous, you can just relax and enjoy it, especially if it eases your own money worries a bit!

Compete or Cooperate?

One of my favorite restaurants in New York, if not THE favorite, is Pearl Oyster Bar. The lobster roll there would probably be what I'd ask for if I had to request a last meal before dying. A lot of other people feel the same way, so it's a very popular restaurant. There is always a line outside the door before they open at 6pm, and since they don't take reservations, chances are you'll have to wait a while before getting a table.
Across the street from Pearl, there is another restaurant called the Cornelia Street Cafe. You'd think they would be considered the competition, right? But no... the two restaurants actually manage to do each other a lot of good. When people are waiting for a table at Pearl, the hostess says they can go and have a drink at Cornelia while they are waiting, and that she'll come and get them when their table is ready. Meanwhile, at Cornelia, if the bar is full, they'll seat you at a table for just drinks if they know you're waiting for Pearl. And lest you should worry that you won't have time to finish a drink or two, they tell you that you can take your unfinished drink with you over to Pearl, who will know to return the glasses. (Never mind that walking across the street with a drink is actually illegal in New York!)
Anyway, I just love this little arrangement. Everyone's happy, and everyone makes money. Well, the restaurant owners are making it, while the happy drinkers and diners are spending it! The tab for 4 people: $40 for drinks at Cornelia, and about $225 for dinner at Pearl. But the taste of that lobster roll, of course, is priceless.

$800 a Month on Food = Obese??

An anonymous commenter questions my food spending and whether I'm obese... for the record, as I'm writing this I am wearing a pair of size 4 pants. I'll admit that I might be somewhat more comfortable in a pair of size 6 pants, or even an 8, depending on the brand, but this post is about food, not clothes, so let's move on. How can someone like me with a normal caloric intake spend $800 a month on food sometimes? (Also for the record, no bulimia issues here. That is one way in which it is really a shame to have money go down the toilet.)

Let's take a closer look at my spending, starting with a recent credit card statement, covering 8/25-9/25/07:
I made 5 trips to local supermarkets, totaling about $146 overall. I bought pasta (on sale), Sapporo beer, Gatorade (on sale), broccoli, prunes, maple syrup, peanut butter, bananas, shallots, garlic, chicken breasts, potatoes, tinned sardines, tomatoes, yogurts, apples, canned tuna, Clif bars, lettuce, lamb chops, and a steak. I also bought non-grocery items such as kleenex, dishwashing liquid, and laundry detergent.

I made 4 trips to upscale/gourmet markets (Whole Foods, Garden of Eden), where I spent a total of $40: $12 on fresh herbs, fancy mushrooms and heavy cream for a pasta dish I cooked for a guest, $7 on trout fillets and fresh spinach, $9 on trout fillets (again) and manchego cheese, and $12 on salmon fillets and apples.

Then there was the liquor store: 3 trips, $55, 6 bottles of wine.

That leaves the restaurants: 7 eat-in meals, and 2 take-outs. The whopping total on these? $605. This is an unusually high restaurant tab for me. One of these meals was when I bought dinner for my sister, her husband and two kids. A couple of the other restaurant meals were my share of a tab split evenly, and some were with a friend I go out with frequently enough that we alternate picking up the check. One of these meals was fairly expensive, a bit of a splurge with dessert and coffee. Usually, it's just an entrée each and 2 drinks each, and sometimes maybe a shared appetizer, in restaurants where the entrée prices range from about $12-22, and a glass of wine is $7 or $8.

So that was all the credit card spending. Then there's cash-- pretty much every weekday, I buy coffee and a bagel, or sometimes oatmeal, and a banana, costing me $3.25-$4.05, so that can be $80 or so a month. Then there's lunch, which can be $3.25 if I get pizza, $6 if I get a sandwich, $7.50 if I get a salad, or about $9.00 if I get sushi-- average it out and that can be over $100 a month, and I've been really bad about bringing lunches from home lately.

So you can see how a girl can easily spend $800 a month on food, or even more!

Contrast all of that with how I've been eating this week:

Monday:
Breakfast: coffee, banana and oatmeal for breakfast: $4.05
Lunch: cup o' soup from home, bought with coupon, so cost about $2, plus bagel $1
Dinner: chicken and rice with lemon sauce, and a salad: ingredient cost about $5 or $6. Washed down with a beer costing about $1.50.

Tuesday:
Breakfast: same
Lunch: same
Dinner: same but with sweet potato instead of rice, cost about the same. Again, $1.50 beer.

Wednesday:
Breakfast: coffee, banana and bagel: $3.25
Lunch: just soup this time, no bagel. about $2
Dinner: pasta and frozen spinach, cost of ingredients $2-3, with about $6 worth of wine.

Today I'm having the usual breakfast, lunch will be a business expense, and for dinner I might have a frozen Trader Joe's quiche or perhaps buy some fish, so the cost will probably be under $10, not including any alcoholic enhancement. If I ate like this every week, I'd be in great shape financially, but the reality of life is that I also like to go out and I'm willing to budget for that.

But enough about me... here's a question that I'd love to see some data on: who spends more money on food, obese people or skinny people?

Smirnoff Vodka Water???

While riding in my TV-screen & GPS-equipped taxi, one of the advertisements I noticed was one for a new beverage called Smirnoff Source. I had to google it when I got home, because I couldn't quite believe the ad was for real: it's bottled water with alcohol in it. Huh???
Here's a post about it on Jezebel and here's the press release. At first I thought it was water with vodka in it, but it's actually considered a "malt beverage:"

Smirnoff Source(TM), the new premium malt beverage offering from Diageo North America that combines pure spring water with alcohol is now on beer retailers' shelves and high-end bars throughout the Northeast. At 3.5 percent alcohol by volume (ABV), this new premium malt beverage, with a hint of citrus, has fewer calories and lower alcohol by volume than most popular domestic beers.

Who's the marketing genius that came up with this? "Hmm, will people buy watered-down alcohol if we say it's watered down with pure spring water and put it in a fancy bottle?" I wonder if this product will actually be successful!

Booze Your Way to Business Success

Here's an interesting stat from the latest issue of Women's Health magazine:

Women who belly up to the bar make 14 percent more money than women who don't.

A survey of 6,050 full-time workers found that the mean annual income for female drinkers was $17,216 vs. $13,982 for those who did not drink. Neither of those sounds all that great, so I wonder what kind of workers they surveyed.
The author of the study thought the reason for the difference was that "social drinkers have bigger social networks... and the more people you know, the more likely you are to find a better job or new clients."

I happened to read this item at a point when I had been thinking about my own spending on alcohol. In January 2006, I did a contest on this site where readers were invited to guess how much I spent on liquor-- the answer was about $1,006 for 2005-- $754 in my Dining:Liquor category, which is mostly bottles of wine purchased at a liquor store, plus an estimated additional amount for drinks in restaurants that were lumped into the Dining:Dinner category. How much did I spend in 2006? $1,059 in Dining:Liquor, plus maybe another $200 or so in restaurants.
This is one instance where understanding your finances can lead to understanding other things about your life-- it's probably not a good thing that I increased my drinking by 25%, for health reasons as well as financial ones! (And it was definitely an increase in consumption, not in the price range of what I was drinking.) I guess all that condo-buying/homelessness stress took its toll on me!! Anyway, cutting back on the sauce a bit is now one of my resolutions for the coming year. I just hope this doesn't mean my career will start heading downhill!

Wine Tips and an exciting CONTEST!!!

Sound Money Tips just posted some good pointers on shopping for wine. I have to qualify one of them: #6 says you shouldn't pour a half empty bottle down the drain. (Well of course not! What a shame that would be!) But rather than just corking up the bottle and putting it in the fridge, it's better to keep a few half-bottles (375ml) around the house and transfer it to one of those. That way there will be less air in the bottle with the wine, and it will keep better.

Now, for a bit of interactive fun, here's a contest for you! The photo above is of all the corks I have collected from approximately 5 1/2 years of home wine consumption. I tend to buy pretty cheap wines, usually under $10, maybe up to $15 for a special treat. So the question is, how much did I spend on liquor in 2005? You can post your guesses in the comments, and whoever comes closest to the actual number will receive a fabulous prize! I will post a special headline at the top of my blog that says "[your name here] is wicked awesome!" with a link to your blog*, if you have one, and I'll leave it there for one full week! Now I expect that the stampede of people trying to claim this incredible prize may temporarily overwhelm Blogger's servers, so if you can't get through right away, just keep trying and don't despair. Good luck, and may the best drunkard responsible drinker win!

*I reserve the right to reject any porn sites!