Get some answers, Girlfren’ (or Boyfren’)
One of the greatest things about being home for breaks is definitely late night TV …. or just having time to watch TV, for that matter. So it was with great pleasure that I finally discovered the Suze Orman show - I’ll admit, I’ve been intrigued ever since they started spoofing her on SNL.
I’ve become quickly obsessed …. I spent most of today YouTubing clips from her show (and re-watching the SNL skits) - it’s sort of amazing how someone can be so obnoxious and yet so intriguing at the same time. I mean, she’s clearly smart, but there aren’t that many respectable TV personalities that can get away with referring to a caller as “Girlfren,” and there aren’t that many respectable people period who can emphasize so many syllables with equal importance. She’s sort of amazing.
So halfway through my Suze Orman marathon, my father discovered how incredibly lazy and unproductive I was being me and suggested I ask Suze for advice on how to invest my money - afterall, she’s bound to love me … I have no debt, about $7,000 in savings and some considerable cushion in the fact that I don’t pay many expenses (no rent, utilities, not too many bills, etc) and own a car. So, for probably the first time ever, I’m going to take my dad’s advice (he gave me $5 to get my car washed today and instead, I bought Starbucks … being home is so great).
I’ll keep you updated on what she says …. though I suspect it ends with: People first, money second, things third. Thanks, Suze.
The Suze Orman Show airs Saturdays at 9 p.m. and midnight on CNBC. Check her out.
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Finally, something you can’t blame on our generation
It’s not exactly news that the economy is a little sub par right now or how it’s affecting consumers (that’s the name the financially stable policy makers use for the lowly public) - but The New York Times published an article on Saturday about debtors that are even deeper in debt during this recession than previous recessions … there are a whole lot more of them. The downturn economy is affecting people even harder this time around than usual - maybe because it’s hitting on all fronts (housing prices are down, incomes are down, jobs are down, lending is almost nonexistent) but I think it’s also because people in 2008 just live differently than people did during some of the last deep recessions (like in the early 1980s when Congress reacted to failing banks by deregulating them and loosening lending restrictions … good idea, guys).
I know, I know, I’ve said this a million times but people just don’t save as much anymore - even the idea of saving has transformed into the idea of investing. I’m not saying I know much about the stock market yet, I don’t have any investments, but I do know that the people who have made out best coming out of the financial crisis are people who have CASH. According to Bankrate.com, in 1985 Americans saved 11.1% of their income, in 2005 that rate slipped to -.5%, the first time since the Great Depression that it dropped below zero, and it’s pretty much stayed down there ever since.
The 1-day challenge
Does anyone else see something a little ironic about the concept of a one-day challenge? Maybe that it’s only one-day long? I mean, there’s probably little that you couldn’t survive for just one day, even people diagnosed with the black plague were given a few days to go.
Well The Simple Dollar suggested a new way to save money - don’t spend anything for one day. Now if that sounds completely outrageous to you, I think you’ve got some serious financial woes ahead of you. If you’re saying, one day? I can do that easy - then I think you should do it for a week.
It’s all about budgeting - think about what it would really take to spend $0 one week, fill up your gas tank on Sunday, buy groceries that last (eggs, rice, frozen meats, pasta, coffee - yes, that’s a food group), maybe some alcohol to get through the weekend and what else do you really need?
It may seem like you wouldn’t really be saving any money because you’re just spending it all on Sunday instead of throughout the week - but what the challenge does is make you think about what you need and what you don’t need, how much you really spend on things, and how you can reduce that. If you did this once a month, I think the savings would be significant because eventually, your whole outlook on spending, saving and consuming would change.
Ramit picked up this story on I Will Teach You To Be Rich and featured a reader who took the challenge and saved between $50 and $200!
We do a week with NO spending. We fill the car with gas and hit the grocery store on Sunday. Starting Monday, we cannot spend a CENT. Sort of a fun little challenge. And it is only for a week. So, if I see something I need or want, I can get it next week. No cheating. AMAZING results. The first time I did it, I was flabbergasted to have the same $20 bill in my wallet. I got very used to it and so it is a nice little “shot in the arm” technique. Kind of like a fast to begin a diet regime.
Take a shot at it, if you can’t make it for a week, try a day. Let me know how it goes for you.
Money talks
Think of businesses that are shutting down temporarily as a bear hibernating. They go to sleep in hopes that when they wake up, life will be better. But if summer never comes - they die.
-my economics professor,
on businesses seizing production in a loss period
Relief for the Mom & Pops
… and so do I. But specifically, small business. Think about it - how much nicer would the world be if there was a Mom & Pop’s convenience store around every corner instead of a 7-11, at least the coffee would probably be better.
It’s easy to assume small biz are the are the ones getting hurt the most by the economy since 1) consumer spending is down 2) they can’t get the capital they need to survive and 3) life’s hard.
BUT (of course there’s a but), while established business may be having a hard time, it’s not necessarily a bad time to start a new one, seriously. Companies like McDonald’s, Johnson & Johnson and even Microsoft were all started during a recession. There are a number of reasons: customer loyalty is obsolete (so you’re more likely to attract customers/clients), competitors are weakened (leaving the door wide open for you) and capital (like land and labor, not so much the money, you need to actually have that yourself) are more readily available - and for less.
So I’m not the only one
Like most things, once the idea of being an un-consumer was brought to my attention, the subject kept popping up everywhere! Turns out, this wasn’t an entirely original plan. But some people are a lot more ambitious (and brave) than I am. Back in July, Kiplinger’s Personal Finance ran a short Q&A with John Perry, the co-founder of The Compact, an online community of people that have vowed to become un-consumers. They’re hardcore: For one year, they decided to call it quits on buying anything other than food, medicine and hygeine products (but I’ll bet anything they learn to make their own organic soap soon).
(I like this photo they chose for their Yahoo! group, shows the true spirit of America.)
Besides the fact that, as someone who’s trying to eliminate just one type of purchase to change a lifestyle (I can’t even give up shoes or accessories yet), this is just admirable - something John Perry said also struck a chord:
We wanted to see if we could adapt our behavior as consumers to live off what we have while maintaining a modern life. We thought it would be fun to see how long we could go.
I should also say Perry’s now been doing this for two years instead of one, and the Yahoo! group now has more than 8,000 members …. and you have to be approved for it, so they’re all serious. But the point is they’re having fun! It was just a little experiment that turned into a lifestyle (and with 8,000 followers, you might say a movement).
The thing is, I bet if everyone starting cutting back on SOMETHING, it would feel really natural after a while. No one seems to believe I can go a whole year without buying clothes, but I have high hopes for myself. I can’t wait for my “I told you so post” to go live next October. The draft is already saved.
Feed for Two Cents