Planned Splurges

As much as I’ve curbed my urge to shop these last few years, I still have a never-ending list of things I want to buy.  I think most of it has to do with the fact that my overall style has shifted from cheap & pretty to quality & classic looking.  So most of my “to-buys” are to replace items that no longer reflect my taste (i.e. replacing my hot pink side-table with this one).

To keep my spending in check, I limit myself to one major purchase (any item about $100 or more) a month, max.  I also count shopping sprees as major purchases.  For instance, my July splurge consists of the 3 items I bought from Nordstrom.  (Fyi their anniversary sale is going on until August 4th!)  

I’ve found that by planning out my splurges, I am able to purchase the pricier things I want at a sustainable rate without any buyers remorse.  Knowing that I can buy (almost) everything I want eventually helps keep my spending willpower in check.  It’s just like eating healthy.  If you intentionally allow yourself to indulge a little, you’re a lot less likely to randomly binge eat junk food.


Good Personal Finance Reads

Should you raid your retirement savings to slash debt? (CNN Money) – An article about when it’s a good idea to borrow from your 401k to pay down debt and what you should consider before doing so.

The Difference Between a Good and Bad Credit Score (MintLife) – A good summary of what credit score you will probably need to get a good rate on financing your car or home.

The Way Millionaires View Money Is Different From Everyone Else (Business Insider) – Very informative and, in my opinion, accurate summary of how the rich versus the middle class think about money.

10 Things Millennials Won’t Shell Out For (Time) – Pretty entertaining list of what we don’t spend money on.  Most of it is actually not true for me (I invest aggressively and definitely trust products recommended by friends & family most).  How about you?

37 Products With Crazy High Markups (Business Insider) – Extremely eye-opening chart!  Some of the markups we already know about (i.e. coffee from coffee shops).  But others come as a total surprise (i.e. text messages)!

I Made $15 Million Before I Was 30, And It Wasn’t As Awesome As You’d Think (Business Insider) – Well written and insightful.  My favorite line: If you’re not happy now, you won’t be happy because of money.”


Preferred Provider Organization

If you have a Preferred Provider Organization (PPO) health plan, you can see a doctor inside or outside of your PPO network.  But if you choose a doctor outside of your network, you will most likely have to pay more.  The good thing about PPOs is that you do not need to see a primary care doctor before seeing a specialist.  So, for instance, if your chest has been hurting, you can go straight to a cardiologist instead of having to see your primary doctor first to get referred to a cardiologist.

The bad thing about PPOs is that you usually have a deductible on top of a copayment.  And even after you’ve met the deductible, you might still have to pay a coinsurance.  Plus, some doctors require you to pay them upfront and file a claim afterwards with your provider to get reimbursed.

Even with these extra costs, if money isn’t tight, most people still prefer a PPO plan over a HMO plan for the flexibility.


Studying for the CFP® Exam

I’m 100% sure I wouldn’t have passed the CFP® exam without the help of Linda & Nancy and all their prep courses.  When I think back to all the teachers, professors and tutors I’ve had since elementary school, I’d say they are two of the most effective instructors that exist in this world, or at least in my world.  Not only are they experienced, knowledgeable and equipped with a strong curriculum, they are also crazy funny!  Okay, now that I’m done singing their praises, let’s get to the not-so-fun parts of prepping for this exam.

To squeeze in as much effective studying time as I could per day on top of working full-time, I woke up around 5:30am Monday through Friday and studied for about 2 hours before work.  I also studied everyday at lunch (1 hour) and then 2-3 hours after work.  For me to wake up that early every morning and still have the mental capacity to absorb anything, I had to stop studying by 10pm every night.  The CFP® exam is a marathon, not a sprint.  So cramming will not work for 99% of us.  On weekends, I spent all morning and afternoon studying or attending one of the prep classes I mentioned earlier.  I missed birthdays, reunions, dinners, hang-outs and even a wedding ceremony (thankfully, I was able to make it to the reception).  Unfortunately, my situation is not unique.  A lot of my friends who passed the exam can attest to giving up any resemblance of a life while they were studying.  But they’ll all agree with me when I say it was totally worth it.

I passed the March 2014 exam, which was my second attempt.  My first attempt was November 2013.  My studying methods didn’t change too much the second time around because I don’t think I studied ineffectively.  I just needed to go over the material a second time to really master it.


CFP® Exam Prereq

Before you’re even allowed to sign-up for the CFP® exam, you have to complete the education requirement.  To fulfill this requirement, I took evening classes at UCLA Extension for 2 years.  You can get through all the classes (there are 8 of them not including the 1 day Ethics class) in less than 2 years if you choose to take more than 1 class per quarter.  Since I was working full-time and had no finance background whatsoever, I chose to take 1 class at a time so I wouldn’t be overwhelmed with all this new information.  Some people prefer to take the classes online or a combination of online and ground (i.e. on campus).  I took all of them on campus because I learn better when I can interact with my professors and classmates (probably because I’m an extrovert and I like structure/routine).

If you have one of these degrees or professional credentials, you can bypass most of the classes and just take the Capstone (comprehensive) class.  Once you pass that class, you’ll be eligible to sign-up for the exam.

For someone who didn’t major in finance or never worked in the finance industry, I suggest taking 1 class at a time like I did.  If you rush through all the classes and don’t develop a strong foundation, you’ll have a much more difficult time studying for the CFP® exam.  Passing the exam takes mastering the material.  Merely understanding it will not be enough.


Health Maintenance Organization (HMO)

If you have an Health Maintenance Organization (HMO) Plan, you can only see doctors that are in the plan’s network.  To find out which doctors are in the network, you can call and ask your insurance provider, look it up online or call the doctor you want and ask them if they are in the HMO network.  If you want to see a specialist (a doctor for a specific problem like your back), you will need to be referred by your primary doctor.  You will not be able to go to a specialist directly.

Although HMOs are more restrictive than other health insurance plans, they are typically suitable for us millennials.  Since we’re young and (mostly) healthy, we can benefit from HMOs low premiums and co-payments as well as the lack of deductibles.


Second Nature Finance Workshop

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A few weeks ago, I lead a workshop on retirement planning at a local church.  It was the first time I gave an “official” finance presentation in front of a group of people.  The experience was awesome, especially since everyone there was very attentive and eager to learn.  If you’re interested, you can click here for a copy of my powerpoint.  They also recorded the entire thing but I haven’t figured out how to play it.  Even when I do figure it out, I’m not quite sure if I’m going to post it since I might feel self-conscious.  We shall see.

Happy Friday!


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