Mo' Money, Mo' Problems [Part Three]
[ 9 July 2010 ]
Tracey Emin’s I’ve Got It All.
I’m no Suze Orman, but I know a little bit about money. So here is a super-simplistic overview of what I’ve learned!
Gala’s Guide To Sane Spending
1. Don’t spend it before you earn it! This is SUCH a simple premise but so few people take it to heart, & end up in the poop. If you don’t have the money in the bank RIGHT NOW, you have no right to buy it. Cool your heels. Most things we “really really want” are completely forgotten about in a day anyway!
2. Never pay full retail. It’s so unnecessary! Everyone has a sale at some point, & with the advent of sites like Gilt, Ideeli & Rue La La, you’ll realise that you really don’t have to pay full whack for something. (Be careful of “rush sale” sites though, the temptation is intense!) Even doing a lot of your shopping on sites like Amazon makes a huge difference. Have you seen their prices on cosmetics, stationery, even shoes? I buy so many simple, everyday items through Amazon because their prices really are the best.
3. Use online coupons ruthlessly. I discovered a site a little while ago called Retail Me Not which is basically a huge repository of coupons for various sites. You name it, they have it. There are vouchers for everything, from Victoria’s Secret to your favourite business card printing service. I check Retail Me Not before I buy ANYTHING & often save 30% on my purchases. I will almost always get free shipping at least! Amazing!
4. Recognise that anything you “want” is just that — a want. You don’t NEED any of these things. Will it kill you to go without this or that item? Probably not.
5. Think before you hand over the money. There’s no rush (& this is true of pretty much everything!). I hardly EVER buy something the first time I’ve seen it. I go in, try it on, think about it, research the best prices & then make an INFORMED DECISION.
6. Use cash instead of plastic. When you’re actually handing over the bills one by one, & counting them with your fingers, it makes you really aware of how much money you’re spending. A lot of us just throw a card over the counter & sign it off without even glancing at the total. This is a recipe for absolute disaster!
7. Pay off your credit card & STOP USING IT. Hold onto it for emergencies but put it somewhere else. Have someone you trust look after it — preferably your most sane parent, as opposed to your I-used-to-have-a-gambling-problem-but-I-am-totally-fine-now! cousin. CLEAR YOUR CREDIT CARD INFO OUT OF YOUR BROWSER COOKIES!!! (I know.) Try to forget the number if you’ve memorised it. Or you can always take a Sharpie & write something across the front of your card. ...It doesn’t really work though. I used to have DON’T DO IT scrawled across the front of my old Visa but I still used the card so much the lettering was almost entirely worn off.
8. If you have debt, sit down with all your figures & work out how much you actually owe. This can be terrifying but knowledge is power. If numbers make your head swim, enlist the help of a smart or savvy friend or family member. Write down your interest rate, your minimum monthly payments & the next due date. Then do your absolute best to make those payments. Write them on a calendar AHEAD of time — make sure you have advance notice. Fees for late payments can be insane & can be 100% avoided if you’re organised!
9. Call your bank & negotiate a lower interest rate on your credit card. Here’s how to do it.
10. If you really do need something… Buy vintage. Buy from small, independent businesses. Use Etsy & support individuals, instead of huge corporations. Buy it on sale through Gilt or Ideeli. Use Google Shopping to compare online shopping prices & get the best deals.
Extra For Experts:
Choking On Credit Card Debt from Forbes.
Mint.com offers a bunch of amazing, FREE online tools to help you manage your money… & consequently, your sanity.
Does your spending need to be examined? What steps are you going to take? Do you know anyone who has beaten massive debt? How did they do it? Has this three-part series given you pause or helped give you any ideas about the way you handle your finances?
Thanks, as always, for listening & contributing!
RADICAL self-love & stardust,
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I’m so glad you mentioned Amazon, their shoe sales are amazing! I got a pair of $300 frye campus boots for $150 a couple of months ago. And there was this adorable pair of shoes on modcloth/shoprouche/urban for $90… when I searched Amazon they had them for $30! You just have a to shop smart.
great post as ever lady. im loving these money topics. I too have never had a credit card and even though i bought a car on a monthly payment plan i knew beforehand that i could afford it. its terrifying how easy it is to spiral into debt especially on credit cards which is why i’ll never get one.
one of my best friends is now going BANKRUPT because she spent over £15,000 on credit cards – going travelling, shopping and get this…even getting cash out! I know…nuts right.
Anyway, just wanted to say thanks for covering this topic. everyone needs to read this!
Also, Mint.com gave me the shock of my life when I realized I spend more on clothes than rent. I definitely recommend everyone use that site!
I’ve gathered quite a lot of debt from my uni days (credit card debt, especially). Whilst I’m on top of it, and have been switching it from card-to-card to take advantage of 0% rates, I would rather it was gone!
I’ve been making a real effort lately to pay extra off my cards, and slowly it’s working. However, this means I can’t save up for things very often as all my cash goes into paying off my debts.
I try not to let my debts worry me, as I know I’m on top of them, but the moment they start to spiral out of control… well, I’d be straight to an advisor and doing whatever I could to get them back into place.
Great ending to the series, Gala! It’s definitively made me reexamine my financial situation and realize that being financially secure doesn’t have to be unglamorous.
This week, I’ve taken a few measures to ensure that I don’t spend frivolously:
1. Instead of blowing my entire paycheque (it’s happened), I put away only 100$ in a ‘spending’ account. This has to tide me over until my next 100$ from my next pay cheque. While it feels a little military, it’s going to teach me how to balance my budget without risking my entire savings.
2. I can’t keep bills in my wallet for the life of me. I don’t know why! I’m ridiculously irresponsible with them, and have even had 20$ or more fall out my back pocket. So instead, I keep a note of how much money I have left in my spending account and put it in my agenda.
3. I’ve noticed that instead of updating my look with creative outfits, I often rely on buying new (&unnecessary) t-shirts to give my wardrobe a new feel. It doesn’t! In fact, it just makes me feel lame and uninspired! Instead, I vow to do another ‘wardrobe clean up’ and then make a proper Daily Outfit Guide.
Thanks Gala! Happy spending/saving everyone!
Great tips, thanks especially for the Retail Me Not link! I always Google “coupon + store” before I buy something but get mixed results. Also, I’m bookmarking the “How to Negotiate a Better Credit Deal.”
This is such apt advice for me to receive today, what with it being pay day and all!
Very good advice!
Today I purchased a book on Amazon, I had it on my wishlist since months… I found it used (but in good conditions), and I payed 1,17$ for it, to buy it new would cost at least 14$.
So, yeah, you can always wait for sales, discounts and so on!
Enjoying reading everyone’s tips in the comments, definitely one for bookmarking… Thanks for posting this, Gala!
Thanks for making this post Gala. I’m only 16, but I have been thinking about money a lot. I will keep this all in mind when I go live in the real world.
I’m currently in the process of paying off my very last credit card from college. Hooray! The 3 that I have kept active after paying off are in the freezer, in a tub of ice so that I have all the time it takes them to thaw to decide whether I really need to use them or not. (Generally, not.)
I wish we had something like Mint.com in the Netherlands! :( Although I think I’m doing a preeetty good job at saving up money for my internship in the USA next fall!
I really do love this series, Gala! It’s relevant to everyyyyone. And mint.com is terrifying but IMPORTANT, haha. And I always check Retail Me Not before buying anything online so yay!
PS I’m going to Disney World for the first time in a couple of weeks & I’m using your guide, so thank you! :D
Thankfully, I am naturally money smart, but I also had good examples. Since I was 11, I have played Neopets on and off. It’s a virtual pet site with its own economy. So I had practise buying, selling, and spending to take care of my pet. Additionally, I was scammed earlier this year online and lost a laptop I intended to sell for money to move with. The loss set me back and now I no longer sell or buy impulsively. I have never been in debt and hopefully never will be. I save my money frequently (it came in handy recently when I came down with illness and had to drop $1k for doctor bills and plane tickets). Like you, I only use a debit card. Buying things with money I do not have is never an option for me.
How do I avoid shopping impulsively? I was watching an episode of Gilmore Girls, I can’t recall which, and Lorelai calls a sweater her “20 minute sweater”. When asked what it means, she says, “if I still want it in 20 minutes, I’ll come back and buy it.” If there’s something I have that impulse excitement about — I give it 20 minutes, sometimes 40, to make sure it’s something I’m really willing to throw down on.
I do know someone who is sitting on $13k of debt they borrowed to buy a house and build a garage. Their philosophy? Work hard and cut out a couple of luxuries until you get it paid off. For example, that $20 spent on last night’s dinner out or $15 at the movies? That’s $35 more you could be paying towards your debt and it all adds up!
These articles helped me out a lot, despite already having a handle on my money — I realize I am spending a lot on travel expenses and take out. I mentioned wanting a paper organiser to my mum and she happened to have a gorgeous cherry red Franklin Covey from 2008 buried in her closet. I bought new inserts and I plan on using it to keep track of my expenses.
What makes me so great with money as well, is my horrible shoppers guilt and I constantly fight with minimalism — because I don’t want to be a person with a lot of ‘stuff’, but then I don’t buy things I would actually use or need. I can justify burning money on takeout because it’s ‘food’, but not buying a nail polish colour, clothing, or anything long-term without a ridiculous amount of guilt. I spent an hour debating whether to buy moisturizer for myself the other day, I kid you not.
The article has helped me feel less guilty about shopping and that it’s ‘okay’ to spend — but I think it is also a long term struggle that will take some time.
For some reason I spend cash so much easier than if it’s on my card!
Sooooo many young people I know neglect savings…it’s so important! Having a solid savings account has pulled my ass out of the fire a bunch of times; when an apartment burned down and I had to replace everything I owned, when my pet rat needed emergency surgery, when I was a bike messenger and my ride got damaged, when my old roommate stole my birth certificate and SS card and I needed a lawyer ASAP...there’s a million reasons. Plus, mine earns me interest! I’m getting free money for doing nothing! How awesome is that? I take my yearly interest and use it to buy something frivolous once a year – last year it was a great pair of shoes, the year before it was a huge plasma TV, this year it’s probably going to be a Dior satchel that I’ve had my eye on for months. Between that and my tax returns (which I also sort of use as “fun money” unless my savings is running low), I get two big “want not need” purchases out of the way each year.
I’ve actually gotten funny looks for mentioning that I have a separate savings account that I never touch (part of my paycheck goes in automatically) so I can buy property soon. I want land, damn it!
OH OH AND since so many young folk (myself included) rent apartments…learn from my mistake and get renter’s insurance. It runs me $10/month and if my apartment ever burns down again (or floods or is robbed), the insurance company will cover the cost of replacing my stuff. Get it before something bad happens!
I LOVE #10. As a small biz owner (http://www.mdesignboutique.com) on Etsy, I am aware of so many talented and amazing designers and artisans. It blows me away what you can find for amazing prices on Etsy or Artfire….and with such personal service and custom options.
I challenge you all to go to Etsy and search for something you’d love to have…you can even set the search results to “price: low to high” and look in the exact price range you’re comfortable with.
Shopping this way supports creative people doing what they love for a living…and you can also select who you shop from based on your personal ethics (shop green, shop local, and some sellers support charitable foundations).
That’s my two cents worth!
Love to you Gala and her Fabulous Readers!
xo.melissa
Question: if we’re supposed to be finding all these great deals on Amazon, of which there are plenty, how are we supposed to simultaneously support local shops and Etsy vendors? You can’t do both. I don’t suppose Amazon has a lot of items that aren’t from a huge corporation.
Agree on the etsy (and imo ebay) for shopping for things! I buy a cheap second hand dress that I’m wanting – it gets someone else closer to the dress they’re admiring – or even their rent or bills. It feels better than giving your money over to an insipid shop assistant with a “better than you” attitude, retail = sucky.
@ann – i am just like you! i also played neopets when i was youger! and i also have horrible shoppers guilt. it’s like a cartoon where the angel and devil sit on your shoulders except it’s my mom telling me not to buy things i dont need.
i can normally instantly justify buying food as well even though afterwards i will feel guilty when my cartoon mom is telling me that i should have just cooked at home. :(
i also deliberate over things like trying a new moisturizer or the difference between generic and brand name toothpaste…. in reality it’s 2 or 3 dollars but my brain is like that’s 300 % more lol
Another benefit to shopping from indie designers…we’re really happy to customize what we can and offer special prices for larger orders…like for wedding parties or salon day gifts. If you’re not familiar with it, check out the “Conversations” feature where you can contact the seller and ask questions or make requests.
I could go on for hours about how awesome Etsy and Artfire are!
Anyone who mentions Gala at checkout when they order from my etsy shop gets a shipping refund just cuz I love this post so much!
www.mdesignboutique.com — my etsy shop. Convo me if you have any questions!
Financial advice from Gala. Love it.
xo.m
This article came serendipitously. I just inherited a small chunk of money, and I immediately thought of all the glorious things I’ve been lusting after* (*not NEEDING) and could now purchase… but I’ve got loans and a credit card (i have scissored to shreds!) to pay off. The other day, when I was about to head out to buy a shiny new mac laptop I’ve been wanting (and quite honestly could use.. my dell has battle wounds from the hair iron, a melted corner from a closer encounter with a very hot lamp, and the keys pop off if I type too fast..) I discovered the AC in my car broke. On the hottest. day. of the year! I am def inspired to prioritize and closely exam my needs vs. wants so that I’m able to regain financial freedom. Thanks for the great series, Gala!
Yeah so many sites dont ship to Canada :(
This has been a great series, and very timely since I’m currently working on paying off the massive amounts of debt that my husband and I accumulated.
One thing that I’d like to add is for people starting out changing their spending habits, it takes time. It took time for these habits to take root, it will take time to break them. A good place to start is to track your purchases. Track every dollar you spend and what you spend it it. It is amazing how much of a wake up you get when you see exactly how much you are spending on something.
Another great way to keep a handle on your money: thrift thrift thrift! I almost never buy new clothes these days. It’s so fun to get a t-shirt, a dress and a jacket at a thrift store for $20 total instead of paying much more for one piece from a department store. Some people don’t like the hunt for pieces that actually fit you in the motley assortment of a thrift store, but it’s pretty exciting when you stumble upon a $450 Betsey Johnson dress that’s selling for $17. :) Great series, Gala!
www.learnvest.com/ is a site specifically for helping women understand their financial situation, budgets, & investing. I’ve learned a ton from using it & I actually live on a budget now.
I really enjoyed this series Gala! It was refreshing & I would love more articles like this in the future.
Interesting article, I loved this series! Money is something I have a real issue keeping track of (too often I find myself going completely mad on payday, and then spending the rest of the month living off loans and donations from my parents), and I am really working hard right now to get out of some of the debt I am in. When I was 17 and starting university, my bank encouraged me to set up a student overdraft, which I could extend as much and as often as I liked. Now I’m 21 and have nearly £2500 to pay off, not to mention £250 on a staff store card from my old job, which I maxed out within weeks of getting and am still paying off. I’ve been getting really down and worried about my financial situation recently and so this series of posts couldn’t have come at a better time! I recently started a new job and in three weeks I’ll receive a pretty hefty wage – however, now, instead of blowing it all on “fun” things that take my fancy, I’m going to pay for the things I need (bus pass, gym membership, etc) and out of whatever is left, I’ll give myself an allowance for a few luxuries and the rest will go straight to my store card and overdraft! It will be hard adjusting and I’m sure there will be times when I’ll really grudge putting money into my overdraft instead of going for cocktails or whatever, but it’s my own fault for spending money I didn’t have in the first place, and it will be most definitely worth it in the long run!
Thanks for this post, Gala, it has been a great source of inspiration! :D
I’d like to propose Tip #11 – Don’t underestimate the power of pocket change.
Get yourself some jars (decent sized ones) and label them with each unique coin value for where you live. At the end of each week, sort out your change purse and put everything in the appropriate jar.
Every couple of months, count and roll your change. Most banks will give you paper coin rolls for free. If you have a coin-sorter bank at home, those are great and will often do the math for you.
Deposit your rolled change in the bank. Do not use those machines at the supermarket (CoinStar in the US) because they skim off about 10% of what you’re having them sort and count. Yes, it’s how the company funds their business, but putting it directly into your own bank account maximizes what you’re saving.
You’ll be amazed at how quickly it adds up.
I wish I could have read these posts when I was 19. I managed to amass over 20,000 in credit card debt by the time I was 27. I kept making minimum payments but the balances never went down. After calling Chase repeatedly, begging them to lower my APR down from a ridiculous 29% I gave up and enrolled in a debt consolidation program (MoneyManagment.org is working wonders for me). I’ve lived without credit cards for a year now and I couldn’t be happier. I’m even more excited to be 100% debt free next year so I can start putting those payments towards something more fun, like savings! haha.
YOU ROCK.
- liz, congrats on getting out of it! gosh, man.
Hi Gala! I really enjoyed this series—the first two parts were more of intellectual interest for me, but gosh, this part is so screaming at me with neon lights and a flashing sign that says “Sarah, keep this stuff in mind!!!!!” I was actually planning a cheeky shopping trip tomorrow with money I was going to get later in the week, but reading this really made me re-evaluate my plans!! I guess I just found this part a lot more timely! I am the worst with money, so I really enjoyed the series. Thanks!!! :)
This has been such a great series of posts Gala! I’m pretty sensible with my money (my parents were big on financial education) but do splurge occasionally. This is really good, common-sense and easy to follow advice :)
I totally agree about shopping from independent businesses rather than big chains when possible. I love sending mail to friends, and was recently in a store complaining about the lack of exciting birthday cards. So I quit complaining about it and found gorgeous stationery from someone on Etsy – she was happy to do a custom order for the exact greeting cards I wanted. I’m much happier that they’re hand made and exactly what I was hoping for. :)
Gala – as always! – your advice is fabuloso! I so agree with you – I never, ever, ever buy anything if I can’t afford it, and never had a credit card…UNTIL NOW! haha I just got one in the mail and haven’t activated it yet…I’m a little afraid, but I think I can handle it!
When I buy stuff online, i make sure to scour the entire internet for coupon codes that make my purchase that much cheaper. It helps a lot. One time, my friend and I ordered Domino´s pizza online and scored to medium pizzas AND cheese sticks for like 10 dollars.
Great tips! I got out of big debt by putting 50% of my earnings into my savings account every week. I learned to live on just 50% of what I earned, the other half paid it all off :)
I’m crawling my way out of debt. I started making real progress when I was unemployed. I was able to recognize that I really didn’t need more things & couldn’t justify spending wildly on entertainment. So the majority of my unemployment checks went to paying down my debt. Now, I’m living and working in Cambodia and about half of my monthly salary goes to paying down debt in the U.S.A. Saying goodbye to credit card debt feels much better than any impulse buy ever did.
Another good tip for credit card over-users:
Put it in a glass of water and put the glass in the freezer. Next time you need to use it, you’ll eventually have to wait, until the ice melts. And you can’t put it in the microwave so you really have to wait. The need will maybe cool down by then.
@Leigh, great tip! :-)
I don’t believe in credit cards, but too many people I know use them and rely on them too much. Great ideas here.
I am currently budgeting for a wedding, while my partner and I are only working part time, so I have definietely learnt the importance of only buying what you need – NEED, NOT GREED, is what I always say!
Another good thing to do, is sell off things you aren’t using. I have an old display stand from a retail store (before that, I used a cardboard box) which I fill with anything we arent using, then I regularly list things on our local auction site. You’d be amazed how many books you’ll never read again, dvds you’l never watch, etc that you have lying around. We’ve raised heaps of cash selling off things we dont need.
I so needed to deal with this issue. I definitely need to cut my spending for the rest of the summer as I moving out in September. It’s super difficult though as I work in retail so there is the constant temptation to buy and also my boss always wants us to by to be completely up to date with what is in the store. I totally agree buying cash is better than buying credit any day. Even buying with your debit card where it asks you “$122?” you have to think about it versus just signing on the line.
I like that you brought out the need versus want. I have had a number of items lately that I bought that I merely wanted and didn’t need and I didn’t buy them and I’m so glad I did not.
This has come at the perfect time for me, I’m up to my eyeballs in twenty kinds of debt and while I always begin with the best intentions, I often find myself falling off the wagon.
So, I’ve printed this off and put it in my wallet with the reminder to refer to it when I’m feeling exhausted by money issues. My budget is organised and tight and DOABLE. I have a Visa debit but I’ve sealed it in an envelope in an attempt to prevent impulsive online shopping. I’m trying to use cash instead of Eftpos to keep a better eye on my spending.
Gala I agree, but I think we really need to look at this from a more macro level. If money is what makes the world go round, shouldn’t we young ladies (and guys) be voting with our dollars!!!
i think people need to vote with their dollar more. we need to first ask ourselves where is this made? who made it? is it ethically produced?
always small business over big business if possible.
I like to fall in love with the producer and their ethics before I will spend my hard earned cash on their goodies.
I will not buy as much crap that I end up not using anyway and spend that money saved on something a bit more expensive and a product I feel won’t chip away at my self esteem for choosing it. I will also try and be informed so i am not another non conscious consumer.
How is this product marketed? How does this type of marketing effect our society. Are young girls getting anorexia as they are bombarded with an overflow of these types of messages in the media?
sorry bit of a rant…
Your website is so much nice i would like to see all the posts but i have dont enough time to do it. Over all i loved your all the articles
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Great post Gala! ;-)
other tools that were groundbreaking for me:
Mint.com (someone else mentioned this; it’s depressing yet empowering to know where all your money goes!)
Ramit Sethi’s I Will Teach You To Be Rich book and blog – a MUST READ!