Posts tagged 'spending'
- Don’t overdose on chunky knits
- Buy one get two for you is not a smart plan (but it is a fun one)
- Shoe of the month clubs sound better than they really are
- Back away from the chocolate
- Back out of jewelry
- The internet is shopping’s best friend; take advantage of all the fabulous discounts currently being offered
- Scarves can multitask
- Moderation is not a four letter word
- Make a gift giving budget and stick to it
- It’s better to give than to receive is in the end, a theory
December 8th, 2009
Spare Me:
THE $300 pair of designer jeans is now, courtesy of the recession, the $200 pair of designer jeans.
http://www.nytimes.com/2009/10/29/fashion/29JEANS.html?_r=3&partner=rss&emc=rss
Go to the Gap, Old Navy or get some Levi’s. Save your money.
October 30th, 2009
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
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
Since you have a finite amount of money with which to make decisions, every decision has consequences. Opportunity cost is what you might be giving up with each decision you make. So consider what something is really costing you – today and in the future. The good news is that opportunity cost is not really a number so, no math. Rather, it is a set of alternatives. For example, if you stay in a less-than-fulfilling relationship, you may be giving up the opportunity to meet a new, more compatible person. And, obviously, if you purchase an outfit at Juicy Couture, unless you have an unlimited shopping budget, you give up the opportunity to purchase something even cuter at Urban Outfitters. In finance, opportunity cost refers to the price you may pay in lost opportunities by choosing one alternative over another. So it behooves you to think about the opportunity cost as you weigh decisions.
As a Fashionista you think about this every day. If I skip dinner for a week or two to pay for those boots, will I be too wiped-out to enjoy wearing them? If I skip on cosmetics to support my Starbucks habit, will I drink my coffee alone? If I use my rent money to buy a whole new wardrobe, will I have a closet to put it in? Opportunity costs loom large in such decisions.
May 5th, 2009
Shopping for big ticket items is no different than shopping for smaller stuff – except of course for the stress, price and worry that you are about to make a HUGE mistake. Seriously, there are a lot of things you will want to buy (a car, a house, an education, designer clothes, shoes and bags) which are a big investment and require a lot of money and/or a lot of debt. Making the right decision involves four things (plus courage):
- Sorting your wants versus your needs (you want Chanel you need a purse)
- Doing your homework (research)
- Timing your purchase correctly (believe it or not, many big ticket items like cars have times during the year when they are cheaper than other times)
- Determining your financing (how you pay has a big effect on the total price)
Just think of big purchases as ultimate shopping. First, you must sort your wants versus your needs. Before you invest your hard earned money on anything that is expensive, you need to know why you want it, if it is the right thing for you, and if there is a more affordable substitute that will satisfy you.
Second, you must do your homework. I know it is hard work, but it is important to know what you are doing before you do it. You must do research. Every big ticket item you buy has these kinds of questions and more. You wouldn’t let someone buy you diamonds without knowing the four C’s would you? You must research the questions and figure out your answers. Do your homework by researching on the internet, asking your friends and family and by talking to professionals.
Third, you need to time your purchase. You need to know if it is the right time for you personally (why now and can you afford it) and if it is the right time to buy the item. Some big ticket items have times during the year when you will get a better deal. I know you know all about sales!
Finally, how you pay for what you buy has an effect on the total cost and whether this is the right decision for you. This is true for any big purchase. The more of your own money you pay the less money you will need to borrow and the cheaper the money you borrow will be. In addition, the less you need to borrow, the better your net worth and the better your credit score and the lower the interest rate. You need to save as much money as you can before you make you make your purchase so you will have to borrow less money to get it.
April 25th, 2009
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
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
Cinderella stomped her foot. Where was her fairy godmother when she needed her? Marrying the prince had not turned out happily ever after and she had become quite short tempered. The monotony of palace life was bound to get on anyone’s nerves. She knew her shopping habit was out of control. Since it was her job to be the belle of the ball, and Manolo’s are so pretty, she had always been able to rationalize her purchases. Lately though she had begun to feel embarrassed. She had taken to putting her purchases into plain brown bags so the prince – and town people – couldn’t monitor her spending.
She knew she was overspending and if she didn’t start cutting back on expenses she would have to go back to work. Unfortunately, due to her limited skill set and education, that meant a return to the scullery.
She needed her fairy godmother to wave her magic wand and fix it all. After all, that woman could do anything. Then reality hit. Her fairy godmother had been cut in the last round of palace lay-offs. She was going to have to go it alone.
Rather than panic, she decided to do some homework and some financial planning. To begin she re-read some of the post from So Many Shoes – especially the ones on credit cards, interest rates and debt. She also turned to No Regrets for savings ideas. She vowed to get her financial life under control and to check back more often.
January 28th, 2009
Barbie thought she had it all. Ken had come to senses, left Midge, and wouldn’t stop calling. She had a lovely town home, a corvette, her pilot’s license, a fabulous body and a wardrobe which put the Bratz to shame.
Unfortunately, much of this had been purchased with debt. Her mortgage, car lease, student loans and credit card bills were killing her. Then the bottom fell out of the stock market. It was time to get things under control. Marrying Ken was not the answer – they had been on and off again for years and who knew if she could trust him. She was loaded with debt. Where to start?
First, she needed to get those credit cards under control by not using them anymore. No more shopping, gym memberships or expensive dinners out. (Besides, people had been complaining she looked too thin for years.)
Once she stopped spending more, it was time to pay down her credit cards. She called the credit card company to set up a payment plan and to reduce her interest rates. If they didn’t go for it, she decided she would call a reputable credit counselor for assistance.
Then she looked for ways to consolidate her loans. For example, she grouped her student loans into a student consolidation loan allowing her to combine her multiple loans and pay a fixed interest rate to just one company. She also combined her credit card balances onto one single card (with a lower rate than her current card).
She also reviewed her budget and determined ways to increase her income. She had many skills and talents: over the years she had taught, practiced medicine, served in the military, hell she had even been President of the United States.
Once she had her plan she felt better. She picked up the phone and called G.I. Joe and the girls. Rather than a night on the town, why didn’t they all come over for pot-luck and movie?
January 23rd, 2009
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