Archive for October, 2008
Even The Fashion Police can’t arrest this economy. The pain, suffering and torment of “Fashion Don’ts” have been surpassed by recession hell. How did this happen?
Basically, banks and mortgage companies lent a lot of people money they probably shouldn’t have. In turn, people invested in properties which cost more than they could afford. The idea, was that property values would continue to increase (and, why not, they had been for years) and everyone would make money. Everyone forgot that what goes up also comes down.
Fashionista’s already knew this – hemlines fluctuate between micro-mini and trains depending on designer’s collective will. The economy, like skirt lengths, has proved subject to the same kind of whims. In fact, in the 1920s, the economist George Taylor conceived the hemline index, finding that skirts got longer as the economy slowed. Lately, there’s been talk of a haircut index, with short locks signaling a declining economy. Bob’s have been all the rage – perhaps Katie, Posh and Gwyneth are onto something?
The next part of the crunch will be credit cards. A credit card is a small, but powerful, piece of plastic. It allows you to buy something now, today, this minute, when you want it, on credit; meaning you don’t have to pay until the bill comes. Unless you pay the bill in full each month, in return for letting you borrow money credit card companies charge you a fee. These charges are interest and the amount of interest is called the Annual Percentage Rate (or APR). Since there really is no such thing as a free lunch (or dinner…often someone wants SOMETHING for it), credit card companies charge a big fee for letting you borrow money from them.
In the coming weeks and months credit card companies may raise these rates – which means, if you do not pay your bill in full, it will cost you more to use your credit cards. They will also certainly make it harder to get a credit card, transfer balances from one card to another and, if you have a line of credit (an amount of money you are pre-approved to borrow at any time) they may reduce the amount of the line and thus how much you can borrow.
The very best thing you can do for yourself? Pay off any outstanding credit card debt you have as quickly as you can. If that means putting your cards away (out of sight is, after all, out of mind) then do so. The reason for this is so that you have as clean a slate as possible – that way when you need your credit card you will be able to use it.
October 31st, 2008
Quick: How many calories were in your latte and muffin this morning? What did they cost? How much do you spend on coffee and muffins in one year?
Many women can calculate the amount calories they ate faster than they can add up the cost of those calories (in financial terms – we all know what they will cost us on the treadmill). That ability, while great for our hips, is lousy for our budgets. Often, the little things we spend money on without really thinking about it really add up. That doesn’t mean you shouldn’t have your pleasures, it just means you should think about your money as you spend it.
For example at Starbucks an Iced Café Mocha is $3.10 and a muffin is $2.50. That’s $5.60 without tax. Let’s say you get both on a regular basis (5 days a week). You are spending $28.00 a week, $112.00 per month and $1,456.00 a year. If you were to cut back to 3 days a week, you would be spending $16.80 a week, $67.20 per month and $873.60 a year. By cutting down your habit from 5 days to 3, you could save $582.40 a year. Throw in taxes and you save even more.
What could you do with that money? Where to start? You could buy 1 pair of Manolo Blahnik’s (the ones you thought you could never afford), 2 pairs of Chanel Sunglasses, 3 pairs of $150+ designer jeans, 4 cashmere sweaters from J. Crew … you get the idea. Even better you could save that money (yes, I know what a novel idea – savings). If you saved it, you could earn interest on that money and make even bigger purchases later.
By the way the calories in the Iced Mocha is 320 (Grande, 2% milk and whipped cream) and approximately 420 in the muffin (if blueberry and depending on where you live – different Starbucks buy their pastries from different places).
October 31st, 2008
Pleather? Polyvinyl chloride? How’s a girl to shop in a recession?
That depends: Is your credit card debt higher than your hemline? Use this time to take a break, stop shopping, clean out your closet and pay down your debt. Unpaid credit card bills are the single worse thing you can do to your finances.
But, if your credit card debt is higher than the heels on your ballet flats, Fake it! No, not with illegal cheap knock-offs – nothing screams non-chic like an obviously fake bag. Hot for a trendy item? Indulge with GUESS, Zara, H&M, Bebe and ABS. Those stores are expert at copying / “interpreting” designer looks and retailing them for a fraction of the price; so if you love a trend, go to one of them and get the knock off.
Look for designers second lines and visit some stores you may not have been to in awhile (if ever). Vera Wang has hooked up with Kohl’s; Lela Rose is with Payless. Premium jeans Chip & Pepper and Ralph Lauren are at JCPenney; Cynthia Rowley is at Avon. Sarah Jessica Parker, Amanda Bynes and Venus Williams are with Steve & Barry’s. Todd Oldham is teaming up with Old Navy. Madonna’s at H&M. Top Shop is opening in New York. And, have you been to Target lately?
Whatever your style, remember going into debt for fashion is never chic.
October 28th, 2008
With all the screaming headlines about the collapse of the economy as we know it, it’s a good time to pause, stop and reflect on how the headlines affect you; and, more importantly, your love of shopping. What’s a Fashionista to do? Yes, “Recessionista” is the new haute word and yes, these days $1,000 + handbags do seem excessive and even a tag vulgar but sometimes a girl wants what a girl wants.
What to do? Go back to the basics. When you shop plan, focus and splurge only on investment pieces. Go lower scale for trendy items.
Now that I have your attention, I have a confession. This blog will be as much about finance as it is fashion. Planning, focus and investing are also ways to manage your money. But I promise not to put you to sleep! Watch – I’ll jolt you awake faster than a double espresso with three words: Shopping, shopping, shopping.
“Shopping isn’t finance,” you say. Yes. It is. Here’s how: shopping takes money and money is finance. Understanding money allows you to shop (and meet your insatiable need for that Louis Vuitton bag). Understanding money is about understanding some basic financial concepts. So, if you check in with me you will gain an understanding of basic personal finance and ultimately better shopping.
If you have so many shoes, but so little money, then this blog is for you.
October 24th, 2008