Some statements ring true: “I love those shoes!” Some false: “No, you haven’t gained any weight.” And, some you just plain ignore.
What do you do with the statements you receive from your bank or from your investments? Do you use them to reconcile your checking account? Do you actively look at your portfolio? Or, do you do you toss them unopened into a drawer?
As daunting as it can seem, it really is a good idea to open them up and take a good long look. You should reconcile your bank account very month. Reviewing your statement and balancing your account ensures you know where every penny of your money has gone – except of course the cash that keep disappearing from your wallet; we’ll save that for another blog. Reviewing your statements also helps prevent identity theft for the same reason – you’ll know quickly if someone has been using your accounts.
Your brokerage statement is no different. If you have investments you should be reviewing them regularly. You want to make sure your investments goals are being met and that your portfolio is diversified.
Not convinced? You’ll need to know how much money you have before you can know if you afford this season’s staple: the statement dress. The best way to do that? Open your statements.
Fashionista Fact:
This season it’s all about the statement dress. (www.net-a-porter.com) It’s a great solution for any event – office to wedding. Add a blazer for the office, leggings for day, high heels for evening, or belt it for a new shape. Find a great one … but not two or three!
April 14th, 2009
Too good to be true? Actually yes, but we’re getting closer. Scientists have discovered a type of fat in our bodies called brown fat. I know more fat is hardly cause for celebration. But we LIKE brown fat! Turns out, brown fat burns calories. Yes, you did read that correctly, burns calories. And, even better, it’s activated by low temperatures. So turn off your thermostat, don’t buy that pea coat, and scrimp on sweaters. You’re wallet and waistline will thank you!
http://www.cnn.com/2009/HEALTH/04/10/brown.fat.obesity/
April 13th, 2009
2009 the recession years….
Carrie, having been downsized from Vogue, is working as a freelance editor. The decline in the publishing industry seriously crimped the advance on her fourth book. As a result, it was not nearly what she was expecting. Thank god she and Big did not take the pre-war penthouse – house poor is not fun. Big is still employed but she’s had to learn to look fabulous on a budget (buying So Many Shoes, So Little Money helped).
Samantha, savvy woman that she is, invested the earnings from her public relations company in cash equivalents weathering the economic crash nicely. Although business is slow, and most corporate events cut way back, managing Smith proved a boon to her standing and she still reigns atop the New York party and social scene. However, since she has cut down on the VIP lounges – bottle service is still not cheap. Although she keeps up with her hair and botox (fifty really is the new thirty) she has stopped most of her other high expense maintenance – and is banking the savings.
Miranda’s billable hours were cut back. She, Steve and Brady are getting by…Brooklyn really is cheaper than New York which would have been tricky to muster. Plus, now that Miranda has moved back home, they are saving on fortune by not maintaining two households and cutting back on her passion for Chinese take-out. She couldn’t believe how much take-out really added up. Yes, the lawyer now cooks. Steve handles home repairs (helping to keep expenses low) and Brady is in public school (although she would have preferred private).
Charlotte, Harry, Lily and Rose have also weathered the market. Divorces are on the rise so Harry’s practice is actually growing. Charlotte has started a successful breeding operation and Elizabeth Taylor has turned out to be quite fertile. But they are still watching things – they know that right now nothing is certain and things could change. With two kids to care for, a penny here really is a penny there. Carrie loaned her a copy of So Many Shoes and she’s found that shopping for classics really suits her style.
The girls still meet regularly at the dinner but have cut back a bit on the cosmos – and the shoes.
April 8th, 2009
In your bank account – how big is yours?
Actress/model/waitress. Writer/Waiter. Investment banker/Dog walker. No matter how you slash it, finding a job in this economy is difficult. That’s why savings matter. When times are good, it is so easy to spend a little here, spend a little there – after all what’s a $20 drink between friends. When times are bad, those carefree habits can hurt. Suddenly you find your cushion – or complete lack of one – stressed to the limits. That’s why it is so important to save. You should save when times are good and it is relatively painless. You should also try to save when times are bad and it hurts.
How much should have in savings? Three months worth of living expenses is the minimum. That means enough to cover the things that really matter, for example your rent, loan payments, groceries, utilities. Six months would be better. As we have seen in this economy it can take at least that long – if not longer to find another position.
Some cuts are easy: did you go out to lunch today? That money could have been put in the bank. Did that sweater set, the one on sale, the one that makes your cropped pants perfectly perfect, cause spontaneous credit card use? That too, could have gone in the bank. Did you have more than one or two drinks when you were out this weekend? You get the idea.
If you are already way past those kinds of cuts you’ll have to dig deeper. That may mean canceling your land line and relying on your cell. Or canceling cable and relying on network TV. Hard times call for hard choices. Finding a way to live within your means can be incredibly challenging – but it is worth it.
So next time someone asks, “does size matter”, you’ll be able to answer yes with a smile and cash cushion.
April 6th, 2009
You dream about what you’ll buy. (Maybe you can finally get that pony!) Or, what debts you’ll pay off. (“Credit Card Company, kiss my rear-end.”) The only fun thing about tax time is thinking about the refund check.
However, some of you – and I’m not pointing any fingers – are struck by “refund anticipation” disease. You sign a piece of paper and get an advance from your tax preparer on your refund check.
There is a serious side-effect from “refund anticipation” disease you may not realize: The advance loan comes with super high interest rates. Fortunately, there is a quick cure – don’t take out an advance against your tax refund. After all, why pay super high rates for borrowing your own money? Instead, simply wait for the check to arrive.
What if you need the money not for impulse shopping but because you really need it? Try as hard as you can to refrain. The high interest rates will cause you to fall further into debt – remember refund advances are short-term loans which are due and payable – high interest payments and all.
March 30th, 2009
You’ve seen the commercials: “Gold prices are high so send us your gold jewelry and we’ll send cash.” You think to yourself, “I like my old jewelry but I like cash better. I can use the cash to buy new jewelry or something else equally shiny and pretty – I’ll do it!” But, is it a good idea? Is now the right time? And, more importantly, do you understand the underlying principals behind the price of gold.
Gold has many identities: commodity (jewelers and some manufacturers view it as raw material), currency (bankers and others actually use it instead of cash to buy things) and treasure (pirates and others just like to own it because it is shinny and pretty).
Gold is usually measured by weight in “troy” ounces and all of those ounces are uniform in their purity. Just like diamonds have different levels of quality, so does gold. Gold’s quality is measured in a few different ways: “parts fine,” “% gold”, and “karats”. Pure gold is 24 karats. The percentage of gold in a piece of jewelry is the number of karats divided by 24. 24 karat gold is 100% gold, no impurities. 14 karat gold is only 58.3% gold.
Gold is bought and sold in large amounts on commodity exchanges. Commodity exchanges are like stock and bond exchanges (remember exchange = market), but instead of stocks and bonds “real goods” are bought and sold. Other examples of “real” things bought and sold on commodity exchanges include coffee, steel, frozen orange juice, and pork bellies. You can invest in gold without actually having to buy the physical metal. You can invest in the stock of a gold producing company and the price will rise in fall (in most part) based on the price of the metal itself. You can buy a mutual find that invests in gold stocks. Or, if you are adventurous, you can buy a contract to take physical delivery of the metal itself and sell that contract to some one else before the delivery date. (Don’t forget to sell – which is called closing out your contract – or the delivery man will be bringing a very heavy albeit shiny package for you to sign for.)
It’s true, right now gold is selling for high prices. This is because in an uncertain economy – like we have here and around the world – gold is seen as a standard valued by everyone. Many people believe that because gold is a physical thing it will retain its value even if stocks, bonds and dollars lose their value.
So, should you run out and sell your jewelry? It is true, gold prices are high right now. However the firms you see on Television do not pay top dollar for your jewelry. They like to buy low and sell high. They buy your gold for less than they can sell it to someone else. Selling to these folks is no different than going to a pawn shop and selling your old jewelry for cash. If you need to pawn your jewelry, as with everything else, you need to do your homework. Jewelers may give you more money because they can resell your pieces and there are websites which can offer you additional tips on the best ways to deal with cash for gold offers. Also why are you selling it? If you are going to use the money you make to pay down high interest debt, receiving a little less than the jewelry is worth might pay off. If, however, you want the money to buy some newer shinier prettier object then you might want to hold out for a better offer.
March 23rd, 2009
Why is it, women can talk about ANYTHING with each other except money? We chat, chat, chat about everything except really important economic matters like how we are holding up in this recession, whether any area of our financial lives is out of control, or how we can use what is happening in the economy now to educate ourselves better.
Talking about money is key to understanding it – and understanding it is key to having more. So grab the girls, talk a walk (burn some calories and avoid spending cash on drinks) and talk about the economy or investing or money in general – you’ll be healthier, wealthier and wiser.
March 20th, 2009
(Yes, Really)
Adam Smith: Optimist – individuals should be allowed to pursue their own private economic interests as much as possible. And, the free market, while appearing chaotic and unrestrained, is actually guided to produce the right amount and variety of goods by an “invisible hand”.
Translation: Buy whatever you want so long as it looks good on you.
Thomas Malthus: Pessimist – population will increase at a geometric rate, the numbers of workers on farms will increase at a slower pace, productivity and wages will not keep up, and our overall lot will not improve and everyone starves to death.
Translation: Don’t buy anything regardless of how it looks on you.
John Keynes: Realist – allowing individuals to pursue their own interests sometimes leads to inefficient outcomes, requiring policy responses from the government.
Translation: Bring a friend to make sure what ever you buy really does look good on you.
Karl Marx – Revolutionary – the “inevitable” cycles of economic breakdown from individuals pursing their own interests leads to revolution.
Translation: Be careful of trends.
Joseph Schumpeter: Creative Destructionist – innovation lays at the heart of economic development and requires entrepreneurship
Translation: “Fashion is made to become unfashionable”, Coco Chanel
March 17th, 2009
Researcher Kent Monroe has developed a test to tell if you are a shopaholic. The new test includes six statements, for which individuals answer on a 7-point scale from strongly disagree to strongly agree:
1. My closet has unopened shopping bags in it.
2. Others might consider me a “shopaholic.”
3. Much of my life centers on buying things.
4. I buy things I don’t need.
5. I buy things I did not plan to buy.
6. I consider myself an impulse purchaser.
Respondents who score 25 or higher are considered compulsive buyers. Monroe administrated his test to 550 staff members and found nine percent (men and women) qualified as shopaholics. LiveScience.com reports that previous studies have shown that between two percent and eight percent of the population are shopaholics.
March 16th, 2009
Our consumer society has stopped consuming. Whether for big ticket items or smaller desires, we have stopped shopping. But is this a temporary reaction to the current economy or something deeper and permanent? Have consumers changed their ways for good?
Consumer spending makes up approximately 70 percent of the economy. It topped out at 71 percent in 2005. Current economic conditions combined with the upcoming credit card bust (see “Credit Cards and Hemlines”, December 1, 2008) means that many folks will not be able to borrow money at good rates for a while. People who have lost 40+% of their net worth over the last six months won’t soon forget this year. Stories of hoarding for years after the great depression are common. On the other hand, 20 years from now, consumers who are now in their 20’s may not remember this downturn when they reach their peak spending.
Prevailing wisdom says that permanent change will never happen to the American consumer. What do you think? Has our love of owning plentiful and fine things altered permanently?
March 13th, 2009
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