31fps by Sam Purtill A blog about business, technology, and life

My 2009 Economic Stimulus Package

2009 is here and amidst all the talk of another federal stimulus package, I’ve decided it’s time to give myself a way to save money in these hard times. Near the end of 2008, my spending got out of control: I spent over $1000 on cabs in the year; I blew through another few thousand eating out at restaurants; and I threw loads of cash out the window by investing in the stock market last year. That last one I think almost everyone did, so I don't feel too bad. In 2009 I’ve decided to cut back. A lot. Here is some of the new legislation which recently passed in the Congress of Sam Purtill’s head:

Put $500/month into my Roth IRA
Last year I was an idiot and put all $5000 into my Roth at once, at the same time buying the S&P500 index fund, VFINX. After losing 30% in that deal I’ve decided to rethink my Roth account investing and will begin to dollar cost average, after years of reading about it from people like Ben Graham. Since the maximum contribution limit for 2009 is $5,000, I'll take the last two months of 2009 and put the $500 into a personal investment account (which I'll be putting extra money in throughout 2009 anyways).

Take Muni unless splitting a cab with someone else
Face it: spending $13 on a cab to get from my house to some place in the Mission, and another $13 on the way back ($15 if the driver sucks), just isn’t worth it. Plus San Francisco has a great muni system that can get you within two blocks of almost any destination in the city.

Only leave the pennies when dropping the change into tip jars at cafes and restaurants
I’m getting really stingy on this one. By the end of 2008 I was dropping all coin change into the tip jar except quarters (saved for buses). This was dumb because 1) you already gave the place money for your food/drink and 2) nickels and dimes add up, and are great to use in emergencies (the bus!). I remember several times in 2008 when I would dig through my pockets only to find one quarter and a few dollar bills; if I had been saving my nickels and dimes I would have gotten on the bus a few more times instead of taking a cab. Probably lost $100 or so in that deal. And yes, I know that sounds ridiculously lazy.

A new budget of $800 a month for food and entertainment
I have no idea how much I was spending in 2008 on food and entertainment. I know there were a few months where it was well over a thousand. I came up with the 800 number for a few reasons. Average cost of food per day is around $20 for me in the city - $4 for breakfast, $7 for lunch, $9 for dinner. I’m going to try to cut that to around $15/day, but I’ll put myself on the high side for now. That leaves me $200/month for entertainment, or about $50 per week. This seems kind of high, but it really isn’t when you budget in ski trips to Tahoe and weekend trips to Monterey or Napa Valley. I think $800 should do the trick. Also: this is the first time in my life I’ve given myself a budget. I think this will be hard to stick to, but I’m up for the challenge.

Learn how to do personal and corporate taxes
Ok. Maybe not all the loopholes and minuscule details of the tax code, but it’s about time I learned how taxes worked in this country. It will be invaluable down the line for me to have this knowledge – I can use it to save money by filing my own taxes (my grandpa kindly does them for me now, so this isn’t a big problem), and with learning how to file corporate taxes will be a big help to any startup I work at or start that needs help filing taxes. Plus taxes have always intrigued me, so why not learn it? (Hey if you're an accountant and reading this, or if you have a friend that's an accountant, email me! sdpurtill at gmail dot com)

Remember: faithful in little, faithful in much
All these little things ended up costing an extra 500-1500 in overhead every month, which could have added up to almost $10,000 by the end of the year. This could have been saved and/or invested had I been wiser. At least I am learning my lesson while still young.

Wising everyone the best of luck with their finances in 2009, it’s going to be a rough year, but we’ll all make it.

If you’re giving yourself a “Personal Economic Stimulus Package” in 2009, leave a note in the comments below about what you’re doing – I’d love to hear about it.