Posts filed under 'Budgeting'
Consumer confidence is up – and most likely your urge to shop. There is a school of thought that suggests as follows: If you see an expensive item which immediately becomes a need – a burning passion you just can’t live without – walk away. If the desire continues unabated for at least five days and you can afford it, go back to the store. If the item is still there, your lust increases on seeing it again, and they have it in your size, congratulations. If it’s not there, or they are out of your size, consider yourself saved by karma. That way, you avoid acting on impulse and can know with certainty that you really want it.
May 26th, 2009
With the current trends towards austerity – how do you maintain your fabulous self? To save money while still looking chic:
- Stretch your manicure/pedicure from two to three weeks (or at least your pedicure)
- Stretch your hair cut to eight weeks
- Go brunette
- Try half a head of highlights instead of a full head (or color instead of bleach)
- Re-learn how to park and skip valet when at restaurants or clubs
- Figure out how to look fabulous at H&M instead of Saks Fifth Avenue
- Skip your facial
- Try a self tanner (tanning salons are bad for you anyway)
- Try a new cheaper cosmetics line
- Try well drinks
- Hit the gym (a monthly membership is usually cheaper than separate Pilates or yoga classes)
- Skip waxing and try shaving
These are just some of the many ways you can cut back and still look great.
May 22nd, 2009
Warning: this is a very sad story about a pair of knee high, tan, go-with-everything Jimmy Choo boots. If you truly adore shoes you might want to stop reading. However, I should point out there is a good finance lesson at the end.
I rounded the corner unaware of the tragedy currently unfolding in my closet. There, in the corner, sat my cat with a determined look on his face. (Yes, cats can look determined.) On the floor next to him lay my gorgeous Jimmy Choo boots. These were not ordinary run-of-the-mill boots. These were not even ordinary Jimmy Choo boots – if there is such a thing. These were the perfect height, perfect color, perfect everything boots – the ones that looked fantastic with EVERYTHING – skirts, dresses, nice pants, casual pants, jeans, you name it and that I wore everywhere. These were the Jimmy Choo boots I had purchased on sale at 50% off!
Then, the boot wiggled. I kid you not. So, I did what any respectable woman does when faced with moving footwear – I screamed. My husband ran in. I pointed and shrieked, “my boot moved, grab it!” Peering intently inside he soothingly murmured, “it’s a field mouse, it’s fine. I’ll take it outside for you.” This was, in fact, good news but sadly not the end of my story.
With the mouse now safely free I inspected my boot. Was there blood? I peered inside, no, it was clean. Then my heart stopped. The inside was fine, but the outside….teeth and worse, claw marks. Game over. Cat =1 Boots = 0.
And, so it ends, my tragic tale of woe.
I will try to get them repaired (much cheaper than new boots) however, I do not hold out much hope. So now I am faced with a dilemma: Do I wait to see if I can find them on sale again? Do I bite the bullet and replace them? Do I find a cheaper alternative? Can I justify paying full price by dividing the purchase price by the number of times I plan to wear them? (It’s okay it’s a time honored practice.)
It is these daily decisions, the ones we are faced with constantly that affect our finances. How much we end up spending or saving in a given week, month, or year is the direct result of the decisions we make when faced with the unexpected.
May 11th, 2009
In this recession, even wedding vows are suffering: http://www.thebigmoney.com/articles/hey-big-gender/2009/02/12/forget-dow-check-vows. Marrying well is never a sound financial plan – they can always leave. What you need are skills and a budget. That way, you will always be able to care of yourself.
February 16th, 2009
Gwyneth Paltrow’s latest GOOP posting (www.goop.com) shares her post-holiday cleanse, complete with menu and bowel movement advice. This year, rather than simply focusing on being thin focus on becoming rich. You can start by truly assessing your financial condition. If you’ve never made a budget, do so. If you’ve never calculated your net worth, try it. If you have credit card debt or other debts develop a plan to pay them down or off – if your debt is caused by excessive shopping vow to hit the gym instead – you’ll get thin and rich at the same time.
Wallis Simpson, the American divorcee for whom King Edward VIII gave up the throne of Great Britain, is often credited with originating the saying “You can never be too rich or too thin.” However, she was wrong. You actually can be too thin- anorexia looks pretty on no one and size 27 jeans cost the same as size 31 jeans so smaller sizes do not help you save money – but you can never be too rich.
January 7th, 2009
It’s not what you wear – it’s how you wear it. Similarly, it’s not what you budget – it’s how you use it. Most budgets fail because they are seen as a restraint as in the plaintive, “It’s not in my budget.” Instead, start thinking of a budget as a way to help you achieve your life’s goals and dreams. A budget doesn’t tell you what you to do, it tells you what you can do. There, isn’t that more palatable already?
For a budget to succeed, it helps to have goals. Goals can be short or long-term, large or small. In fact, it’s good to have goals for both. So you’re coveting …? Whether … is a new car or an expensive cashmere sweater, make use of your budget to save for it. Set aside a certain amount each month so you can eventually afford it. However, if the amount puts you over your monthly spending allowance be sure to compensate elsewhere in your budget.
The only way to find out if your budget is actually working is to track your actual spending against what you had planned to spend. How do you do this? Continue to keep those receipts. At the end of every month, add up what money you actually made, what money you actually spent, and what you have left over. Then compare it to what you planned when you made up your budget. If you spent more than you expected, spend less next month. If you spent less, think about putting the surplus money into a savings account.
January 5th, 2009
Spending is often what we do best. However, knowing how to spend, and when to spend, is critical. What must we have? What can we live without? And how do we know which is which? There are not a lot of role models out there for women to follow. What is out there is a ton of external pressure to spend, spend, and spend. Consumer products companies spend billions telling us which products we need and why. Retail stores devote a great deal of time, money and effort to make their store windows stop us in our tracks. Movies, television shows, fashion magazines and the media’s relentless coverage of who wore what all send a message about how much we need to spend, and what we need to spend it on in order to look and feel good. Even the federal government overspends and as an all too predictable result, sends us into an economic crisis.
Can we stop the madness? How do we know what to buy and where to spend? Confused priorities can wreck your budget. Three months’ rent or a Cartier Tank watch? How do you choose? Start by revisiting your budget. If you can afford the watch – go ahead and buy it. If your budget indicates that you can’t, don’t despair. You could make it a dream or a goal to save for, or you could pay your rent and shop a notch or two (or three) down, or not at all.
Priorities are different for everyone. How do you know what yours are? Let’s start with the basics of needs and wants. What’s the difference between the two? A need is something you simply can’t do without. It is something you have to have, to survive in a reasonably comfortable way. Needs are the basic building blocks of life. Wants are desires. A want is something that, no matter how much you may crave it, you can live just fine without. You want the Cartier tank watch; you need to know what time it is. You want the black stilettos beckoning from the window; you have to have your feet covered but you probably don’t need that particular pair of shoes.
By using your budget to review how and where you are spending your money, you will be able to spot and fix potentially problematic trends and fix them before they get out of hand. You might have to make some hard decisions about what it is you need and what you merely want. Only you can sort out which is which, along with what you are willing to give up. And you must stay committed to the rule that only if you have a surplus of funds at the end of every month can you can start to purchase things you want, in addition to the things you need.
December 22nd, 2008
Money can be like those mornings when you stand, staring into your closet, and can’t figure out what to wear. So you stand there and think, “I have nothing to wear” until eventually your eyes seize on those pants, the ones you always feel fantastic wearing and which make your rear look incredible. You grab them, realizing they will look perfect with a little t-shirt, those cute flats, and a shoulder bag. Lo and behold you’re dressed and looking fabulous! All it took was a place to start. Money is like those mornings. It can seem very daunting when all you need is a place to start. After all, how do you know how much you can spend if you don’t even know what you have? Where do you start? You make a budget.
Begin with your income. You receive an allowance or a paycheck from a job (we’ll talk about the taxes which are deducted out of your paycheck later). Write down what you receive each month, from wherever you get it. This amount should be what your checks and cash add up to after items like taxes are taken out. Next write down how much you spend and what you spend it on. Now, add up and total the money you bring in, and add up and total the money you spend. Subtract the money you spend from the money you bring in. Now, multiply by 12. Since you only used one month of income and expenses you’ll want to multiply by 12 so you have a budget for a whole year. That’s it. You just made your first budget and just figured out something really essential: Whether or not you have extra money, which is the number one indicator of whether or not you are over-spending.
December 9th, 2008
I haven’t yet discussed living within your means. Living within your means is much more important than the amount of money you have. Whoever you are, no matter how much money you make, more than likely, you’ll never have quite enough. Why? Because as your income goes up, so do your expenses. We all want more than we can afford. With more money, your tastes upgrade – it’s inevitable and normal. You’ll want Manolo Blahnik not Designer Shoe Warehouse, you’ll want Champaign not Two Buck Chuck, and you’ll want a bigger place to live rather than a smaller one.
How do you know what your means are? You make a budget. Budgets sound harder to make than they really are. First, add up and total the money you bring in, then add up and total the money you spend. Subtract the money you spend from the money you bring in:
• Money I bring in
• Less money I spend
• Equals money I have left over – or don’t have left over.
The beauty of budgeting is it tells you what your means are – and they’re different for everyone. It helps you plan what you can and, quite frankly, what you can’t do.
If you don’t know what you spend keep your receipts and bills – all of them for one month. Even your receipts for your morning coffee. Then add them all up. The total won’t be perfect reflection of what you spend every month but it’s a great start.
December 8th, 2008