Connection Failed...

The internet connection in my room has been cut. Sigh. In fact, internet in my dorm isn't free, even though it is provided by my college local network. It costs about $35 per month per room. I share the bill with my roommate. Last time I paid for it on May 27. So, one month passed, I didn't pay, they cut me. OK, I think I'll manage to live without internet for three days. I'll be in Hometown on July 1st, and I'll have internet access there.

It's amazing how I'm dependent on the internet. I have to learn again how to do some simple things without it. For example, today I needed to go to a place I had never been to before. The only thing I knew was the address. In good old days I would launch the russian analogue of Google.Maps, named yandex.maps, punch in the address, get the picture and directions, save it in my PDA and go out. Today I had to rummage through my things to find a real, solid, paper map of Moscow. Luckily I have one!

Then I wanted to see a movie. How could I figure out what was on and where? What people do in such situations, if they don't have internet - phone to the cinemas or what? I decided to take a lucky shot and just went to my favorite multiplex, hoping that the movie - it was Ratatouille, by the way - would be running there. It was indeed, and I had to wait only one hour.

The movie was great! I'm now enjoying free wi-fi, provided by the cinema, and trying to publish this post (blogging through a PDA isn't that easy!). There's a guy here who has been sitting here with his laptop for more than two hours. Maybe he's saving on internet bills? :)

An Indian Restaurant

Yes, yesterday I was not so frugal, because I went to a restaurant. We'd been planning this dinner with my friends for a long time, and finally we were free and could make it. So my week of frugal living couldn't be an excuse to skip it. And besides I really wanted to go, because I had never tried an Indian meal before. I was really curious.

We were three: N., (my roommate), T., (a girl from the room next to ours) and me. While we were waiting for our orders, I got a possibility to talk about personal finance. I don't remember how it happened, but we started to talk about retirement. T. said when she retired she would very likely be poor and miserable, because "our country doesn't care about the old people." I asked what she knew about her future retirement. I figured out she didn't even know how Russian retirement system works. For example, she thought that a person gets some money after retirement only if he or she has spent years working for the government, while working at privately held enterprises doesn't count at all. That's complete rubbish. So I spent several minutes explaining the system to her, talking about saving, encouraging her to take care about her money. She didn't seem to be very much excited or even interested in the subject. It really amazes me. She just knows that she will be poor and the government won't give her much money, and I can't change her opinion, because she doesn't want to hear about all the possibilities she has. Maybe she thinks she is too young to think about such things, I don't know.

So I stopped talking and concentrated on my order. I had a butter chicken, potatoes and a garlic naan. It was so delicious, I really did like Indian cuisine! I felt like I really was in India, because there were a lot of Indians in that restaurant and there was a singer performing songs in Hindi. Even though I left $17 there, I don't regret that dinner. :)

The Word Is Frugal

My finals are almost finished. Actually, I have already passed all exams, but I still have one paper to hand in, so I don't consider myself really free. I passed the exams in due time and got good grades, so it seems I'm eligible for the stipend in the next term. There are rumors that stipends are getting a little bigger as of this September. We'll see!

Luckily I don't feel like I need to splurge on things, as I feared I would. Quite the opposite, I try to save as much as possible before leaving Moscow. I have about one week left before going back to Hometown, so I decided that this week would be my "week of frugal living". I wanted to cut back on grocery expenses. I recently whined that I go to the grocery store too often and I can't help it. However, this week I did decide to try buying a lot and cooking in a bulk. I'm sure reading inspirational pf blogs helped a lot.

So, I spent about $20 in a grocery store on June 20th and cooked a substantial amount of food. The next day I even took my lunch with me, something that I haven't done for a long time! Now I try to pass the whole week on this food. The only thing I still have to buy often is a bottle of my favorite mineral water. I know that tap water would cost me nothing, but I can't make myself drink 3 pints of Moscow tap water, even filtered, because I hate the taste. Yesterday I read that tap water in New York is as tasty and pure as bottled water. I wish I were so lucky.

By the way, I remember when I learned the word "frugal". Seriously. It was somewhere in September 2005, when I was reading a book for my English class. The book was Three Men In A Boat by Jerome K. Jerome, and the line was "Then we run our little boat into some quiet nook, and the tent is pitched, and the frugal supper cooked and eaten." At that time I really didn't know such a simple word! I even thought that the word "frugal" is not really often used. I certainly didn't read pf blogs then! ;-)

How Often to Check Funds' Performance?

When I first started investing in mutual funds about 7 months ago, I was somewhat obsessed with performance. I would come home, switch my computer and then go directly to my investment management company's site to check how much I had. I just loved to download new data and build charts - daily! Maybe it's just investing was so new to me, and I was fascinated by the ups and downs? I think I did so about half a year, until I felt weary at last. Now I check my funds just once in a while.

I guess my daily obsession was really useless. I don't trade daily and I don't intend to sell my stocks in near future. Perhaps I should just stick to regular monthly investing, and not even bother about the current price. On the other hand, if I watch my funds and I see them taking a dip, it can be a good time to buy some more. So, how often do you do you check your funds' performance?

How I Have Chosen My Grocery Store

It can seem that being a student on a tight budget I must buy groceries in the store with the lowest possible prices. But I don't, because I still value convenience and time a little more than low prices.

I figured out that the students who live in my dorm usually shop in about 4-5 nearby grocery stores. Among them there are two stores where prices are a little lower than in other stores. However, I just can't make myself to shop there. First, they don't take cards. (I hate paying with cash and I don't usually carry any.) Second, there are too much people there! When I used to shop there the aisles were always blocked with the carts of other shoppers and I always had to line at the cash register. Maybe if I stuck to shopping in these cheap stores, the money I saved would add up into something nice. But I think personal finance is not just about the lowest price, but about finding the right balance between what you want and how much does it cost. Well, the stores that I've chosen are convenient and have reasonable prices, that are much lower than in stores in the downtown. So I am satisfied with them.

Speaking of saving on groceries, I think I could spend more if I shopped less often. I can never reduce shopping to once a week. I don't have a car, so I have to carry all these heavy bags back to the dorm. I can't grab much things, so after two or three days I have to shop again. I remember when I was a first year, it was considered so money-savvy among my friends to go shopping in Aushan, a mall in the nearby suburb, 5 minutes by metro, 30 minutes by bus, 1 minute by walk, and buy a week's worth of food. Now I feel too old and too lazy for such an adventure :)

I Don't Feel Like Building an Emergency Fund

I don't have a proper emergency fund, and, to tell the truth, I'm not willing to set up one. I'm inclined to put almost all my money in mutual funds, and I don't usually have much money in my savings account.

I will try to explain why. First of all, I must evaluate what is one month's worth of living expenses for me. Besides the money that I sock away, I have about $300-400 to spend every month. So, if I followed the rule of three to six months, I would have to keep at least $900 ($300 * 3 months) in an emergency fund. I don't want to do this because the interest rate of my savings account is much less than the inflation rate. I once said that Russian banks give generous interest, sometimes up to 8 percent. But to get the APY like this one has to deposit a big sum as a required minimum, and the money must be kept on deposit for a minimum length of time, like one year. If one wants to take the money earlier, the accumulated interest will be lost.

So, if I put the money in the high-yield savings account, my money would be tied in case of emergency. I would have to forgo interest to get it. If I kept the money in my current low-yield but flexible account, it would be lessened by inflation. A loss either way.

Putting money into the mutual funds doesn't seem to be a bad decision, really. True, the stock market can go up and can go down. But I'm almost sure that over a long period my mutual funds will outperform bank deposits. And I can cash out this money at any time. I will only have to pay 13 percent in income tax, so I will get my 87 percent of capital gains. The only problem is that I won't get the cash immediately. My investment management company says that it will take up to 15 days to transfer the money back on my checking account. That's why I always keep about one month's worth of expenses in the savings account and put the rest in the mutual funds.

Tipping and Money Etiquette

Usually I’m not exposed to the places where tips are expected. I eat either in the student cafeteria, or cafeteria-style restaurants, or fast food chains. But if I am served by a waiter, a tip is a must.

Recently I was in such a restaurant with a bunch of friends, four of them. Everyone was supposed to pay for her share. I gave my share plus 10 percent which is a standard tip in Moscow restaurants. Another girl did the same, while the rest paid exactly the price of the meals, without tips. I tried to encourage them to tip, but what I heard was “Aww, come on! We don’t have so much money to give tips, you know.” I and the girl who also tipped ate a little less that the others did, so 10 percent of our share looked really meager. I felt very uneasy when the waiter took the money.

I believe that even though tips are not obligatory, if you eat in a restaurant, you should tip. Being “a poor student” cannot be an excuse. If one cannot afford pay the bill plus tips, one simply should choose another place to eat. I think that’s frugal vs. stingy. Not going to an expensive restaurant is frugal. Not tipping there is stingy.

But what should I have done then? Should I have made the others tip or should I have tipped more myself? Or maybe it was right to do nothing, because it wasn't my business?

P.S. While I was in the process of writing this post, I came across a post named Money and Etiquette: Why are the important things in life never taught in school? at Her Every Cent Counts, where she describes her embarrassing experience in a restaurant. I now feel certain that money etiquette is really complicated and I totally agree that it must be taught in school.

Final Exams Are Money-friendly

It seems that final exams are perfectly fit for frugal lifestyle. I’m having finals right now, and my spending has become really smaller.

We don’t have regular classes now, so all I have to do is sit in my room and prepare. Eating out is also limited, because for me “eating out” most often means dining in college cafeteria or somewhere near the college. Now I eat sandwiches at home :) Then, I spend less on entertainment. No movies. I don’t feel alone and deprived, though, because all my friends seem to be studying and not going out. There’s also less chance of impulse spending, because I literally don’t have time to go shopping. So I my daily spending is mainly limited to groceries.

The exams themselves usually don’t cost anything, if they are oral examinations or hard copies of papers are not necessary. Only one exam this year was a little pricey. I had to hand in two papers. My printer wouldn’t work, so I had to pay for printing them. Then the professor also expressed a desire that papers should be put in specific zipper pockets, and electronic copies should be provided on floppies or CDs. And I also had to buy a book to write one of the papers. Luckily, passing other exams doesn’t involve any spending.

Well, the finals may be frugal, but what will be after them? What if a poor stressed student will need to go on a shopping spree to recover from hard studying? Or there will be an absolute necessity to throw a Good bye, finals! party?

OK, I think I must concentrate more on studying now... and watch my spending after having finals.

All the Comments of a Blogger

I wonder if there is a way to track all the comments that someone has left on other people's blogs.
If I read the blog of a blogger X and find it interesting, I usually can subscribe to the posts and the comments that other people leave on X's blog. The comments that X leaves on other blogs may be interesting too, but I just miss them. Why can't they make a special feed for them?
So far I have found two services that somehow deal with this: coComment and Blog Flux Commentful. Both are aimed at tracking and collecting one's own comments on other blogs, which is nice, too. Only coComment makes it possible to see someone else's set of comments, but this someone must have an account at coComment and notify his readers about it. Unfortunately, most probably a random blogger X doesn't have a coComment account, so I can't track his comments until he gives me such a possibillity.
It seems that both services provide access to one's comments and subsequent comments on the same post via rss feeds, firefox extensions and web. I think I will test these services to see how they work and if I like them.

Should I Talk More About Personal Finance in My Real Life?

I usually don't talk about personal finance in my real life. But recently I had an open talk about financial matters with my roommate. She is an amazing girl and a sociology major. Though we are close friends, I never told her I was an investor. She knew that I somewhat liked economic and financial stuff, but she wasn't aware to what extent I was familiar with finance.

So, we were having tea and chatting the other day. She said they discussed investing in her last economic sociology class. The professor told that she didn't trust mutual funds at all, because she believed them to be just a sort of financial pyramid. Here I must explain that in the nineties a lot of Russians suffered from businesses that turned out to be mere financial pyramids, that's why they are so distrustful now. Anyway, it turned out that my roommate agreed with the professor. "But of course mutual funds are not financial pyramids!" I exclaimed. "Isn't it the way they work?" she asked. Then she sighed. "I wish I knew more about this stuff, because I have some money saved, but it suffers severely from inflation and I don't know what to do with it."

That's when I realized I couldn't keep silence anymore. I started to speak and went on and on, and she would listen to me. I confessed that I had been putting money in mutual funds for half a year already. I explained how they work. I told about stock market, stocks and bonds, corrections, ups and downs, bullish and bearish markets; about saving consistently and starting early, about compound interest; about retirement, good and bad debts, and so on. Maybe I didn't say much and the information was a bit messed up, but I gave her the general idea. I advised her my investment management company, showed some papers, and explained how to open an account in this company.

At first my roommate was very much surprised. Well, I can understand her, considering that less than 1% of Russian population are true investors, who buy stocks and mutual funds, and the majority of them have big money. Then she said I was "a brave girl" and reproached me for not having told everything earlier. She was really interested in everything I had told, and my information was definitely useful for her.

After that talk I felt a little ashamed. I really should have told all this stuff to her before, because she is my friend and she can benefit from what I know about personal finance. I've learned a lot about money during this year, and I also have the experience that none of my acquaintance have. Shouldn't I now share my knowledge with those who don't know anything about it? Isn't keeping it to myself egoistical?

May Net Worth

As of May 31, my net worth equals $2,508. I managed to save rather much in cash (32.77% increase), but the stocks, unfortunately, didn't perform well in May (a meager 0.92% increase, only due to the money I invested this month). While many markets all over the world were hitting their historical maximums everyday, Russian stocks were slipping. However, they seem to start rise again, so I hope to see a positive change in my net worth in June.

My next milestone is $3,000. My summer cash flow will be rather limited, so I don't expect to hit it until September or October 2007.

My Banks and Online Banking

I am a client of two banks. I didn't choose them—I got two debit cards from them in my first year just because I was a student. That's because I also don't pay any fees.

The first bank, the Bank of Moscow, which is the third or fourth largest bank in Russia and is controlled by the government of Moscow, issues debit cards for all students who study in Moscow. These cards, by the way, also can be used as a pass in the Moscow metro system, and the students mainly use them for this purpose. My parents transfer me money on this card, and I heavily use it for everyday purchases.

The second bank, VTB, which is the second largest Russian bank, is the one through which the students of my college get stipends. As I already said (Personal Finance in Russia, 6), debit cards are widely used in corporate world, where wages are put on them. Actually, colleges just followed the trend, and now it seems that every Russian college pays stipends through debit cards. I don't use this second card often. In fact, I used it to accumulate money by not spending the stipend and putting other savings on it.

I didn't even have a checking account until I decided to invest in mutual funds. I chose an investment company that is a subsidiary of the Bank of Moscow. That's how I got my first checking account and my first investments.

Today I signed up for internet banking service of the Bank of Moscow. Though it is not provided by default, the subscription doesn't cost anything. I will not pay for transfers among my accounts, but any other transaction will cost me $0.38. I'm really excited. I will be able to transfer money to a checking/saving account or put it in mutual funds from wherever I am. I still didn't manage to sign in (maybe the registration is not over yet), but I'm waiting impatiently to start working with this system.

It's such a pity that online banking is still not very much wide-spread here. First, all Russian banks are brick-and-mortar. Second, only a few of them allow some kind of online operations. Third, hardly anybody uses it, even if one's bank provides online service. For example, the Bank of Moscow appears to have one of the best internet banking service among Russian banks, but I didn't know about such possibility until very recently.