Dear Tazi:
I have a problem. When I get bored, I shop. I am not a shopaholic - I don't feel the need to shop or get any kind of high off of it or feel let-down after I am finished shopping; I just have nothing better to do with my time so I go online and browse for things - gifts for upcoming birthdays, new clothes, bed and bath goodies, and stuff on clearance sale that looks like something I may eventually use.
I am not in debt over my head from my shopping habits, but I would like to pump up my savings account a bit, which I could do if I did not shop so much. I was reading about one young entrepreneurial woman in Marie Claire magazine who started her business on a whim while unemployed. She was able to do this because she took $20,000 from her savings for start-up costs. What twentysomething has $20K in their savings account? I suppose I could have half that much if I didn't spend so much.
My boyfriend doesn't have a problem with my spending; he tells me that if it makes me happy why stop? The problem is, I am not sure that it makes me happy; not when I see the alternative things I can be doing with my money, like saving it to start my own business someday, although I am not certain what I would sell. My boyfriend tells me I am over thinking this, but I am not so sure. What do you think, Tazi? And do you have any tips to help me curb my spending habits?
Signed,
Bored Far Too Often
Dear Bored Far Too Often:
Can you control your spending when you shop? It sounds to me as if you are a controlled shopaholic - someone who can control their shopping and spending so long as they are not tempted, but go crazy once the opportunity to shop presents itself. How long can you continue shopping for needless things before your habit puts you into debt over your head? Just because you can handle your debt now does not mean that you will always be able to make the payments on your credit cards. One bout with a serious illness or stretch of unemployment can put you under financially, so a solid savings account is a good thing to have!
Since a solid savings account appears to be your goal, I can offer you some tips on how to get there; and since you humans love the organization of a list, I will present them to you in list form. Consider it a post-Halloween treat!
1. Know the difference between wasteful spending and investment spending. Purchasing a pair of high-end, quality career shoes on end-of-season clearance is an investment; purchasing a pair of high-end, quality party shoes on clearance is not. Before purchasing something, ask yourself: How often will I use this? If I put it into storage for the season, will I remember that I have it?
2. Invest in a book by financial guru Suze Orman - and read it! The information she has to share is invaluable! If you are not comfortable buying a book, see if your local library has it and give it a test drive. I strongly recommend The Money Book for the Young, Fabulous and Broke (Riverhead Trade, 2007).
3. Put your credit cards into a lock-box or safe. This will help you to resist the urge to use them by making them more difficult to access. Carry one credit card - for emergencies - in your wallet. Better yet, join AAA; your membership card can double as a pre-paid American Express card.
4. Unless you are absolutely certain that you will be giving someone a gift several months down the road, do not purchase something that will be "perfect" for them. Furthermore, ask yourself: might an even better gift come along between now and then?
5. When you get the urge to spend wastefully, look at the price and put that same amount towards your credit card debt. By doing this you are saving money and paying off your past purchases. A bargain is not a bargain if you are paying monthly interest on it.
6. Create a budget based upon your pay cycle and stick to it. If you are paid weekly, your budget should reflect that; bi-weekly, your budget should take you through two weeks. By doing this you should not be caught short and should not have to dip into your savings to pay your regular bills.
7. Create an Excel spreadsheet and record every penny you spend for one full month. Categorize each item - food, entertainment, credit cards, rent, etc. - and see how much you are spending in each area. This will allow you to profile your spending and cut back on things you do not need. For example, do you really need a Starbucks coffee every morning? At $2.50/cup adds up to $17.50 for one week! You could buy and brew your coffee at home for a fraction of that price!
8. Pay yourself first. My Mommie's Grandpa always used to tell her that she would never have a savings account if she did not pay herself first. She wishes she took his advice to put 10% of every paycheck into savings and forget about it! She does that now, and I suggest that you start!
9. Buy store-brand food; it costs less and is usually manufactured by the brand name company. Put the money you save into your savings account.
10. Sign up for and use store loyalty cards, cut (and use) coupons. There are many online sites that offer coupons for free, so you don't even have to buy a newspaper to get them!
These small steps can add up to big savings, which you can put towards your dream of starting your own business, owning your own home, or taking a dream vacation. Please write back in six months and let me know how you are doing!
Snuggles,
Tazi
P.S. Shame on your boyfriend for not being more supportive! Could it be that his habits reflect yours, and any change would create the need for him to examine his own financial habits?
Ask Tazi! is ghostwritten by a human with a Bachelors of Arts in Communications. Tazi-Kat is not really a talking feline.
I have a problem. When I get bored, I shop. I am not a shopaholic - I don't feel the need to shop or get any kind of high off of it or feel let-down after I am finished shopping; I just have nothing better to do with my time so I go online and browse for things - gifts for upcoming birthdays, new clothes, bed and bath goodies, and stuff on clearance sale that looks like something I may eventually use.
I am not in debt over my head from my shopping habits, but I would like to pump up my savings account a bit, which I could do if I did not shop so much. I was reading about one young entrepreneurial woman in Marie Claire magazine who started her business on a whim while unemployed. She was able to do this because she took $20,000 from her savings for start-up costs. What twentysomething has $20K in their savings account? I suppose I could have half that much if I didn't spend so much.
My boyfriend doesn't have a problem with my spending; he tells me that if it makes me happy why stop? The problem is, I am not sure that it makes me happy; not when I see the alternative things I can be doing with my money, like saving it to start my own business someday, although I am not certain what I would sell. My boyfriend tells me I am over thinking this, but I am not so sure. What do you think, Tazi? And do you have any tips to help me curb my spending habits?
Signed,
Bored Far Too Often
Dear Bored Far Too Often:
Can you control your spending when you shop? It sounds to me as if you are a controlled shopaholic - someone who can control their shopping and spending so long as they are not tempted, but go crazy once the opportunity to shop presents itself. How long can you continue shopping for needless things before your habit puts you into debt over your head? Just because you can handle your debt now does not mean that you will always be able to make the payments on your credit cards. One bout with a serious illness or stretch of unemployment can put you under financially, so a solid savings account is a good thing to have!
Since a solid savings account appears to be your goal, I can offer you some tips on how to get there; and since you humans love the organization of a list, I will present them to you in list form. Consider it a post-Halloween treat!
1. Know the difference between wasteful spending and investment spending. Purchasing a pair of high-end, quality career shoes on end-of-season clearance is an investment; purchasing a pair of high-end, quality party shoes on clearance is not. Before purchasing something, ask yourself: How often will I use this? If I put it into storage for the season, will I remember that I have it?
2. Invest in a book by financial guru Suze Orman - and read it! The information she has to share is invaluable! If you are not comfortable buying a book, see if your local library has it and give it a test drive. I strongly recommend The Money Book for the Young, Fabulous and Broke (Riverhead Trade, 2007).
3. Put your credit cards into a lock-box or safe. This will help you to resist the urge to use them by making them more difficult to access. Carry one credit card - for emergencies - in your wallet. Better yet, join AAA; your membership card can double as a pre-paid American Express card.
4. Unless you are absolutely certain that you will be giving someone a gift several months down the road, do not purchase something that will be "perfect" for them. Furthermore, ask yourself: might an even better gift come along between now and then?
5. When you get the urge to spend wastefully, look at the price and put that same amount towards your credit card debt. By doing this you are saving money and paying off your past purchases. A bargain is not a bargain if you are paying monthly interest on it.
6. Create a budget based upon your pay cycle and stick to it. If you are paid weekly, your budget should reflect that; bi-weekly, your budget should take you through two weeks. By doing this you should not be caught short and should not have to dip into your savings to pay your regular bills.
7. Create an Excel spreadsheet and record every penny you spend for one full month. Categorize each item - food, entertainment, credit cards, rent, etc. - and see how much you are spending in each area. This will allow you to profile your spending and cut back on things you do not need. For example, do you really need a Starbucks coffee every morning? At $2.50/cup adds up to $17.50 for one week! You could buy and brew your coffee at home for a fraction of that price!
8. Pay yourself first. My Mommie's Grandpa always used to tell her that she would never have a savings account if she did not pay herself first. She wishes she took his advice to put 10% of every paycheck into savings and forget about it! She does that now, and I suggest that you start!
9. Buy store-brand food; it costs less and is usually manufactured by the brand name company. Put the money you save into your savings account.
10. Sign up for and use store loyalty cards, cut (and use) coupons. There are many online sites that offer coupons for free, so you don't even have to buy a newspaper to get them!
These small steps can add up to big savings, which you can put towards your dream of starting your own business, owning your own home, or taking a dream vacation. Please write back in six months and let me know how you are doing!
Snuggles,
Tazi
P.S. Shame on your boyfriend for not being more supportive! Could it be that his habits reflect yours, and any change would create the need for him to examine his own financial habits?
Ask Tazi! is ghostwritten by a human with a Bachelors of Arts in Communications. Tazi-Kat is not really a talking feline.
No comments:
Post a Comment