Thursday, October 25, 2007

Gender Differences in Financial Communication

Do men and women communicate about finances differently? It's and interesting question to ponder and one that is inspired by I Will Teach You To Be Rich. In his post title Look How Men and Women's Magazines Write About Money, he examines the different messages and how they are delivered.

Money magazines are written with the male audience in mind because that is the larger percentage of subscribers. Women's magazines will include a finance writer but will discuss topics on spending more often that investing. Men are encouraged to take risks and focus on savings in terms of a portfolio. Women are encouraged not to fear money and to evaluate the emotional side of savings.

Points that aren't addressed include the fact that when women do invest they tend to have better returns because they research more and take less risk in choosing stocks. Women are expected to spend more on image than men including more expensive clothing, make up, regular trips to the salon, and shoes. Even dry cleaners charge more to women many times for the same articles of clothing.

There has been a definite changes from our mothers and grandmothers generations when men were expected to take care of the finances and invest. Unfortunately, women are still encouraged to spend rather than save. Young women see credit cards as status symbols and don't often understand the ramifications of their actions on future plans.

Our consumer driven society for the first time ever have a 0% for savings and most are living longer lives. Baby Boomers are starting to retire. This is the last generation that was taught Social Security will take care of them in retirement. Gen Xers don't believe Social Security will be there when they retire. Gen Y hasn't begun to consider retirement. No matter what the generation we need to take responsibility for our choices now and move away from the instant gratification lifestyle.

Wednesday, October 24, 2007

Dining Out on the Cheap

One of the first things to go when cutting expenses is dining out. It's expensive and is rarely a necessity. So what do you do when temptation strikes or you are meeting at a restaurant for a meeting? Plan and allow yourself a splurge every once in awhile.

While I was in college, I had a number of odd jobs, but the one I was at the longest was for a restaurant. Not only did it give me some great benefits like free soup and salads as well as 50% off any menu item, it also gave me a great education in food.

I learned about different wines and that the restaurant mark up is 100-200% on a bottle. Restaurants make the most profit off of wines by the glass. You can bring your own wine, but you will be charged a corkage fee so call ahead to find out how much. It can range from $10-$30 per bottle.

I also learned how to dine out on the cheap. I took full advantage of my discounts, but I also familiarized myself with all of the Happy Hour specials at the restaurants and bars around town. Sounds like a lot of bad bar food? Not at all. Many area restaurants offer a $1.95-$3.95 menus that include hamburgers, sushi, pasta, chicken Caesars, and hummus plates. The only requirement is buying a beverage for a minimum that is typically a soda pop or iced tea. (Free refills)

Another trick is to buy an appetizer instead of a main course. My friends and I have been known to make a meal of a side salad and split an appetizer. If we are feeling like treating ourselves, we may split a main course.

Finally, consider lunch instead of dinner. You can typically get the same menu but smaller portions for much better prices.

Doggie bags aren't just for the dogs. Ask for a box before you start your meal and take half of it home for another meal. Weight loss gurus have been recommending this for some time as a way to lose weight. It also is good for the budget. Restaurants justify increasing menu prices by giving you more food and larger plates. It gives the illusion of better value for the money. In fact, most people just waste the food by leaving it or they add to the growing weight problem by eating everything on their plate like we've been taught since childhood.

At the end of the day, don't deprive yourself a luxury now and then. Just plan wisely and make sure you enjoy every aspect of the experience.

Tuesday, October 23, 2007

Another No Spend Day!

Not only did I successfully complete another no spend day, I also snowflaked $5.50 by taking back pop cans from work.

Retirement Preparation

Did you know its National Retirement Week? I didn't until I was visiting Mapgirl's Fiscal Challenge. Sponsored by the ICMA and resolved by the House of Representatives and the Senate, National Retirement Week is another step towards educating people on the need to plan now for retirement no matter what your situation is.

Many people ignore retirement planning. They think they aren't making it paycheck to paycheck how can they save for retirement. 20-somethings think retirement is too far away to have to think about it. Many women believe their husbands are taking care of it for them. There are those that believe Social Security and Medicare will be enough. They are up for a rude wake up call.

If I knew then what I know now...

I wouldn't have cashed out my first 401k. At the time I thought it was my only option. It was just after the dot-com crash of 2001. That cost a lot of money and I lost years of compound interest.

I would have started saving smaller amounts earlier. I thought it didn't count unless I put in $144 per month.

I would have involved my mom earlier. I had a surprise when my grandfather passed away and my grandmother had no idea about their finances. When I found out mom was almost as unfamiliar I spoke up.

So where do you start if you haven't started? With baby steps! Open an account that isn't connected to your checking account or at a different bank altogether. Why not a high interest online account? Whatever it is get started. Learn about account types like the traditional IRA, ROTH IRA, and Rollover IRA.

Set aside a certain amount each week or month and make it regular. If you need to start with a smaller amount do it, but set a date to review your finances and bump it up to a higher level.

Don't be afraid to ask questions of your retirement specialist at work if you have one. Check out online education sites like America Saves or the Motley Fool. You don't have to be an expert, but educating yourself on the basics is important. Register for a class at the local community college. Looking for more information on investing? Check out the National Association of Investors Corporation (NAIC).

Monday, October 22, 2007

When Frugal is a Waste of Money

I returned a pair of shoes today. I purchased them at the Nordstrom's Rack which is like an outlet for Nordstrom's. I know from inside sources that the Rack has buyers for the store in addition to the merchandise that didn't sell or went out of season from Nordstrom's. I needed to purchase a pair of black shoes for work that I could walk anywhere in.

Confession time - I have been known to purchase a pair of shoes because they were a good deal when they didn't really meet my need. The pair I returned were sensible but a bit big in the foot which I justified because I could wear socks. They also pinched a bit across the top of the shoe. Again I justified it with the idea they would stretch out.

When I got home, I left the shoes in the bag to give myself a chance to think about my purchase. (It's kind of a backwards wait 24 hour rule.) The more I thought about the shoes the more I realized that I had just cleared a few pairs of shoes out of my closet that had the same problem. They kinda worked, but were going to be painful to break in so I kept them in the closet for another day (and another... and another...) Finally I decided to put them on EBay and try to recoup my loses.

So what does my shoe shopping habits have to do with Frugality? A bargain isn't a bargain if you don't get good value from the purchase. Better it is to spend a little bit more for something that doesn't have to be "broken in". Make sure to count the number of times used, costs of owning, and length of time the item lasts in order to get a better idea of true cost.

Halfway to the Goal

Today was another No Spend Day. The goal is to complete 10 No Spend Days by the end of the month. As an added bonus, my emergency fund gets $10 per No Spend Day. I'm halfway there with only 9 more days to go. Luckily, I still have a half of a tank of gas and will be done house sitting as of tomorrow night.

Sunday, October 21, 2007

When You Are Out Of Your Routine

I am a creature of habit. It's not the obsessive compulsive type, but it can become very disconcerting if I'm out of my routine for very long and wreaks havoc on my efforts to limit eating out or spending money. I've been house sitting for almost three weeks. My cats are being very needed even though I'm spending a few hours at home each night. There have been no planned menus and any lunch that I've taken to work has been leftovers from a dinner out. The bonus is that I've been able to catch up with people I haven't seen for awhile. I'm also earning extra money to pay bills.

Unfortunately, addressing my issues doesn't fix the time I've lost working towards my goals, but it does point out a weakness that we all have to address from time to time. Like giving up smoking or loosing weight there are triggers that you need to recognize in order to prevent going down the same path and making the same mistakes. What triggers your backslides? What can you do to prepare to prevent them?