Finance Friday: Gifts for Graduates

I remember it well. June 13th, my graduation day from college. Having spent five years being taught how to think and then learning to think for yourself graduating from college is like your Dad taking the training wheels off your two speed overnight.

You were used to dime diving – ya know searching through the couch cushions in the student lounge to collect coins for your laundry. While you didn’t make much you made due. You always found enough money to go shopping, go dancing, and oh yea, go out eating.

But unfortunately, that “Real World” you kept hearing them refer to is rampant with due dates (past due dates), minimum payments and balances, fees and grace periods that expire after six months. Instead of buying flowers for the graduate in your life consider preparing them for the financial world they cannot hide from – no matter how many times they hit the proverbial snooze button.

I’ve stated before that I knew absolutely NOTHING about personal finance when I entered college. Not only did I graduate with a Roth IRA, a funded emergency fund and savings account, and a debt free week long stay in Panama, but was also able to purchase my first home at age 23. I attribute my enlightenment to one book: Rich Dad, Poor Dad by the Godfather of passive income, Robert Kiyosaki.

If you can get your graduate to do nothing else, I highly recommend you force this upon them – then let them make their own decision about how to proceed. The Godfather very simply talks about his upbringing and the influences that helped shaped his vision from his friends dad (Rich Dad) and his biological father (Poor Dad).  He introduced me to the concept of “passive income” and “making your money work for you”. I can say without a doubt, this book changed my life!!!!!

My other recommendation demonstrates a practical viewpoint of implementation. A semi-recent graduate himself, Ramit Sethi discusses in his book and blog by the same name, I Will Teach You To Be Rich, how young professionals can earn more, invest more, and do it all rather easily. He hates most financial advice and I hate some of his advice, but I give credit where credit is due: 90% of his material is absolutely valuable.

While he feeds off some stereotypes (especially in his Indian culture) he offers concrete advice as it relates to the psychology of individuals and why most people behave they way they do. The one thing that I took away from Ramit was the simplicity of automation, as I discuss here. Master this and you never have to worry about managing your finances again!

These weren’t books that anyone in my family suggested to me – or even could suggest to me. It was pure fate that brought me to these two gems. The goal isn’t to get your graduate to implement every single piece of information but rather to get them to be aware and start to think about these things. Have start early, so they don’t finish late!

Editorial note: And no I don’t think I’m slick I realize I’m posting Finance Friday on a Saturday…my bad!

Finance Friday: Fasting & Binging

And no I don’t mean on food!

Fashion bloggers across the webishphere are embarking on personal challenges to control their spending and overflowing closets with the realization that the more pieces they accumulate the deeper they went into financial debt.

There are bloggers who only wear high end pieces and I wonder how they could afford such a wardrobe and others that acknowledge they currently cannot afford luxury designers but are fashionable nonetheless. Generally speaking, we all subscribe to a mixture of both. One for inspiration and the other for practical application. The question isn’t only “Where’d You Get That?” but “How’d You Pay For THAT?”, something that often is left unsaid.

These days not only are we envious of the Joneses but we invite them into our homes. The Joneses  are online and have created a host of websites showcasing their latest finds. They tell us exactly what they are wearing, how much it cost and where to buy one just like it. Sometimes they direct us to the lower priced option. Nonetheless we feel pressured to be just like them.

I too suffered from closet envy which led me to charge up my credit card (at one point I was free of the C3’s). I’ve since recovered and no longer feel such pressure but I relapse from time to time. I hadn’t been shopping in a while. With my new job, my pay schedule changed and I wanted to get use to it – making sure all my bills are paid on time – before I started spending. Well… it all started with these babies:

Alloy - Sayla Oxford

…and then went down hill from there with these (this is the short list):

French Connection - Fast Dandy Voile Dress

Laudme - Josephine Baker Elephant Tank

ASOS Striped Midi

Vince Camuto Mista Platform Stiletto Pumps

It’s like Christmas to me — but the feeling doesn’t last long. I tear open the boxes and included packaging and proceed with an impromptu fashion show. In the past as soon as the show ended, I started to feel regret for the debt I just incurred and for purchasing  three dresses of the same style in different colors (pick one!). I felt B.R.O.K.E (Buyers Remorse Over K-rappy Expenses)!

My shopping binge lasted only three days and was done completely online. I did NOT use any of my credit cards. I paid for it all using money I had saved just for this purpose (more next week).

I believe these diets, challenges and fasts would not work for me. In the past, they have not worked for me.  Some people have children, hobbies and other things to focus their energy on (?), I have style. Not just fashion, but “style”  – encompassing all things personally attractive to me. I get just as much pleasure out of shopping for clothing and accessories as I do perusing the aisles of Lowes and Ikea.

Maybe you need to purge and fast first. I commend each blogger for (1) acknowledging they have a problem, (2) acknowledging they have bigger goals then being trendy at the moment, (3) for doing something about it, and (4) for going public with it.

"Finance & the Fashion Blogger: Ignore-ance" by Miss Ashe Mischief

Here at MNM, we believe that a woman can have it all! Manolos & Mutual Funds! And with some understanding of your financial style and a few easily coordinated steps you can. Some things to remember are there is no one size fits all financial tip. Your money is not that of your favorite fashion blogger. We shall not judge.

Read more about each of these challenges here:

Please feel free to list any other challenges out there!

Good luck Missy!

Why I’m buying a house — even though I shouldn’t!

As if the title didn’t say enough, here I am, saying to you — all my dear finanshionistas– that I, Miss NewMoney am taking the plunge towards home ownership. Why now, you ask. Well, I’m a sucka for punishment and I just want to own something! Not exactly.

I have been saving for a house for six years now.  SIX YEARS!!! And I’m only twenty-three. It was hard work too — especially because I was living on the ultimate college budget and still paid a pay grade above youthful man servant. Never the less, by the time I started seriously looking for a home –let’s say Summer 2009 — I had saved enough for a down payment, potential closing costs, and a couple of months of living expenses. Suze Orman would be proud!

I was always confident when it came down to the money portion. I either had enough or I didn’t. One of the crucial parts of house buying is determining how much is “enough. And although my credit may have afforded me a larger house, it was the actual costs of living and my savings potential that dictated how much of a house I actually wanted to buy. Though it my have been one of the toughest parts –saving all that money– it was nothing compared to what I was to face in the upcoming months.

I initially wanted to purchase an investment house – one where I could live on one floor and have a tenant (or two) cover my mortgage.  I immediately realized that on the budget I had, around $60,000 to $120,000, I was having little luck finding a home in which I would feel safe living in let alone have a stranger live so close by. Hey, some of the streets of Philly are tough but priced so cheaply.  The budget had to remain the same.

D’Ya think I gave up there? Finanshionistas never give up! I still had my will and just needed to find another way.

SO I dug deep and decided to purchase a home for myself to eventually be rented out one day. I’ve held onto this lavish lifestyle dream of buying a house, living it for a few, and moving on the next one; never really settling until I’m ready for the big Queens Estate. “The Queens Estate” is my ultimate dream home and the home that I will begin a family in (children, husband, picket fence).

That brings me to lucky number three!!! Yes – this is the third house I’ve attempted to buy. The first one I will always view as the one that got away. I was completely content with the home and didn’t listen to my gut on how to approach the situation and ultimately lost the home. The second home was a disaster. The sellers Realtor was completely unprofessional and just stopped communicating for a few days at a time. Definitely someone I couldn’t trust nor move forward with. I also lost about $600 on this failed transaction. And number three seems to be THE one. Completely new everything, within budget, and an all female transaction team. Girl Power in full force with a female buyer and all female Realtors!

House buying seems to be one of the most controversial topics for personal finance bloggers and other experts. Older generations still view real estate as the ultimate investment. Where others view it as a ultimate sink hole, constantly sucking the money out of your Coco Chanel handbag. I took a different approach acknowledging all of the pros and cons of home ownership. I figured out what would work for ME and allowed myself to think BIG and not remain SMALL by comparing my situation as a mirror image of others.

Pause for an inspirational quote ….

Winners compare their achievements with their goals, while losers compare their achievements with those of other people.
– Nido Qubein

My goal was always to buy a house. Period.

Now, with that in mind let’s address some of the reasons “they” say you should rent forever. Most of the comments are indeed true! I can admit that. But because something is true doesn’t mean it should be a deterrent or a hindrance. It just means you need acknowledge it and prepare.

$ Renting Keeps You Flexible – Sure you can just pick up and move on a whim  – IF you are willing to forgo a hefty security deposit or can find someone trustworthy to sublet. I had a friend who sublet her place and the person turned it into a “rooming house” while she was away. But if I own a home in multiple states/cities, then can’t I do the same thing? THINK BIG.

$ Someone Else Does The Repairs – True, the landlord or property management company is responsible for fixing just anything in the home. But let me tell you, having dealt with both and having had to wait a full month for a working stove, if I never have to deal with either again it will be too soon. Plus, I’m going to hire a qualified professional and then well isn’t someone else doing the repairs in that case too? THINK BIG.

$ Owning A Home Is More Expensive Than It Looks – Absolutely!!! Owning a home is more than just covering the mortgage payment. It’s paying for the planned and the unexpected, insurance and taxes, and much more. If you never own a home and continue to rent this is the area that lends to some of the greatest economic differences between the two lifestyles. However, if you like a own a home, like myself, this is one of those inherent factors that comes along with the territory. The best way to manage this is to manage other aspects of your sexy, financial life.

$ Renters Insurance Is Much Cheaper – Renters insurance covers your stuff inside of the apartment whereas homeowners insurance covers your home, certain liabilities and other damages. I’d hope it’s more expensive than renters insurance. And with great package deals (home and auto insurance combined) things just may turn out alright. THINK BIG.

$ Home Prices Can Go Down Short-Term – and the world could end tomorrow. You cannot control how markets move. Do not waste your time on things not within your control. You can control the price at which you buy your house.  Famous investor Robert Kiyosaki of Rich Dad, Poor Dad advocates you should make your money going in. Meaning if a property is appraised for $150K and you purchase at $90K, then you would have made $50K going into the closing session. Additionally, invest for the long term and this will be taken care of!! I have ZERO plans on selling this house. I’m stuck with it for life! THINK BIGGER.

Now, no where in this article did I say that home ownership is THE only way to go nor did I say that EVERYONE must own a home. Renting for some is simply the way to go — mainly for some of the reasons listed above. The point is they made that decision for them and on their own. If you want to buy a house — and have good reason as to ‘why’ you want to buy a house — then go ahead. Read all of the reasons why people say you shouldn’t and make sure you address those reasons from within (are you planning on changing jobs any time soon? Do you have the money to pay for those expenses once covered by a landlord?) If after you perform your evaluation you still feel comfortable dropping $20k on a down payment, then by all means, go out there a shop!

Fashion for Haiti

All net proceeds benefit the Clinton Bush Haiti Fund

Forget about the “We are the World” remake, how do you feel about this? The Council of Fashion Designers of America (CFDA) has named Beyoncé as the official face of their limited-edition “Fashion For Haiti” T-shirt. Tee’s for charity has always been a fashionable contribution and the CDA previously raised over $2M following 9/11 for the Twin Towers Fund and their “Fashion for America” t-shirt. One of my fav e-boutiques, RueLaLa is selling them for another 1 Day, 02:27:04 sec. All net proceeds will be donated to the Clinton Bush Haiti Fund.

Remember when I told you to have faith in your money and donate it, well now you can have faith in your style (or Beyonce’s) and support the people of Haiti by making another donation.

Who else is selling the shirt?

Stay focused and find it here in one of these stores:

3.1 Phillip Lim  //  Academy of Art University Gallery Store  //  Adam  //  Alice + Olivia  //  Alligator Purse  //  Ankasa //  Anna Sui  //  Araks  //  Barneys  //  BCBG Max Azria  //  Bergdorf Goodman  //  Betsey Johnson  //  Billy Reid  //  Bloomingdale’s //  Botkier //  Buckler  //  Burberry // Calvin Klein Collection  //  Calvin Klein.com  // Catherine Malandrino  //  Carolina Herrera  //  Coach //  Charles Nolan  //  Chrome Hearts  //  Cole Haan  //  Colette // Cynthia Rowley  //  Deborah Marquit  //  Dennis Basso  //  Derek Lam  //  Devi Kroell  //  Diane von Furstenberg // DKNY // DKNY.com // Donna Karan International  //  Elie Tahari  // Foley + Corinna  //  General Nutrition Corporation  //  Generra  //  Gilt Groupe  //  Giuseppe Zanotti Design  //  Helmut Lang  //  Henri Bendel  //  Intermix  //  J. Crew   //  J. Mendel  //  James Perse  //  Jeffrey New York  //  Jill Platner  //  Jill Stuart  //  John Bartlett  //  Kate Spade New York  //  Kenneth Cole  //  Links of London  //  Lisa Perry Style  //  Loomstate // Lord & Taylor  //  Lorraine Schwartz // Lyn Devon  //  Macy’s  //  Madewell  //  Malia Mills  //  Manolo Blahnik  //  Michael Kors  //  Mimi So  //  Missoni  //  Moda Pittsburgh  //  Nanette Lepore  //  Neiman Marcus //  NeimanMarcus.com //  Nordstrom //  Norma Kamali  //  Odin New York  //  Oscar de la Renta  //  Philanthropist  //  Polo Ralph Lauren Retail  //  QVC // RachelRoy.com //  Rag & Bone  //  Ralphlauren.com  //  Rebecca Taylor  //  Robert Lee Morri  //  Rock & Republic  //  Rogan // Rue La La //  Rugby.com  //  Saks Fifth Avenue  //  Saks.com  // Scoop NYC  // Selima Optique // Shelly Steffee //  Sigerson Morrison  //  Slow and Steady Wins the Race  //  Style Shop at FIT  // Stuart Weitzman  //  Swarovski  // Swarovski Crystallized //  Talbots  //  Ten Thousand Things  //  Theory //  Theory Japan  //  Thom Brown  //  Tommy Hilfiger Stores  // Topshop //  Tory Burch  //  Tracy Reese  //  Trina Turk  //  Uniqlo  //  Vera Wang  //  Vivienne Tam  //  Yigal Azrouel  //  Zappos.com //  Zero + Maria Cornejo  //  Zoe //

I was good. Super good.

I was super good on a budget this past month. Super good.  My budget and calculations must have been off BUT (here comes the bright side) I was able to save an extra …….drum roll please…..$700 this month! Check me out! I did this all without willingly wanting to do this!

After my tough Christmas battle with the C3’s and the defeat of being C3 debt free , I must have went into shock. It’s all a blur now but I’ll do my best to remember. How does one go from a zero balance to a positive $1,890.32?? Santa and his stupid little reindeer’s, my beautiful niece and her cuteness (damn you), my desire to please, Oscar de la Renta for Mom (“who’s that?”), custom framed picture of the same beautiful niece (two times) and the list continues a Wii bit.

Being offered a full time position at the top of the month didn’t help either. Once I saw that card balance I had to kick myself and buckle down. It turned out to be a few simple techniques that combined to a whopping $700 bucks!

I stopped visiting my favorite boutique websites every day at 11:00AM (now I can make those meetings), catalogues were immediately thrown in the trash (that one wasn’t actually too hard seeing as how they send four at a time), I even started cooking.

I loved to eat out simply because it was convenient. But seeing as how my boyfriend and I started visiting really good restaurants (and watching the cooking network) we began to appreciate the taste of “true cuisine”. Anything else would be unsatisfying. So with the maturity of our taste buds (“we’re so proud of you”) came a decrease in eating outside of the home.

That meant that the food inside the house had to be bangin’! So I began cooking and let me tell you— I may have food a new passion.

So how does all of this add up to saving 700 bucks?

Well:

$ I began bringing left over dinners to work as lunch

$ And I started making food that was good enough to bring to work

$ Before I needed to go food shopping I would make a list of all the meals I wanted to have over the next few days and then write down what I needed

$ I already decided how much I wanted to spend before hand in my payday budgeting

$ I also came up with the idea of adding up the items placed into the cart.

I know, it may sound boring and yes you may look sort of grandma-ish but hey Nana was on to something.

Compared to most  end of the months, I have so much excess that I’m trying to remember if I agreed to let some guy in Nigeria deposit checks into my account (“let me think…“).

The true test is whether I can do it again this month. Oh! I haven’t told you about my crazy idea for this month. More on Friday but let’s just say that this miracle occurring in January gave me hope that I can pull of something bigger in February.

Do you think these techniques would help you and your financial situation?

Rich Girl Faith, Mailbox Money for the Carters, and Desperate Fashion – So Nouveau riche!

This is your January, Miss New Money Redux. Well, what did we learn this month?

$ That money can be used for other fulfilling purposes other than  having more and more material possessions. While those are nice too, if Miss New Money (me!) were a Rich Girl I’d  be able to be free with life. Free to choose a career or not; to live in a home ore not; to continue my education and prepare future generations. “And I’m freeeeeeeee…..freeeeeee & ballin’….yea I’m free & ballin’ “

$ That batting for mailboxes probably isn’t so funny if you’ve got money in there, mailbox money to be exact (wait, did you get it?).

$ That in times of disaster AND in economic triumph, have faith in your money and generously donate to those in need. Aren’t you learning how to make new money anyways? Text  Haiti to the number 90999 donate to the Red Cross today.

$ That Keeping up with the Carters, Miss Beyonce, Mr. Jay-Z and Weezy F-Baby, is expensive! But once you can hang with the big boys, financial freedom could look like this:

  1. Buying the most expensive food you can buy stuffed with the second most expensive food
  2. Wearing clothes with the hardest names to pronounce
  3. Lighting up your cigars with $100 bills

Or could it?

$ Having a bank that will lend money to you in your most desperate fashion moments exists….in France! France is ready to open up a new kind of banking system: one that will allow fashion designers who’ve fallen on hard times to borrow money from ‘fashion banks and the government will back it. Could this mean that designers are to become indentured servants of The French Republic if they can’t pay? So not Nouveau riche!

What did you learn this month?

Check back next week for the February edition of “If I was a Rich Girl: A Letter to Money” . Read how one aspiring finanshionista found out the hard way that what happens in college…doesn’t stay in college!

Have faith in your money – give it away

The earthquake that hit Haiti this past Tuesday, the worst in two – hundred years, has left thousands dead and / or missing and has left many without shelter and basic necessities. As of yesterday afternoon, the Red Cross received donations in excess of $5.1 million. This week MNM takes a break from the focus of earning money and talks about giving it away.

Regardless of one’s spending or savings style, the blessing present in the ability to earn money is reciprocated and counter balanced with the ability to not only spend, but to be able to give it away and donate. Being generous to others with the money you make is much more than advantageous tax-write off.

I talk a lot about ‘buying stuff’ on this website, but the overall big picture is that of personal responsibility. You owe it to yourself (your future-self and your present-self), your family and your community to make smart financial choices. Everyone listed has an interest in … well… your pockets. Make a not-so-smart decision with your money and you and your family may end up in the hole. Make a smarter choice and you, your family and generations to come may never have to worry about home – ownership. 

Today your community needs you. All too often, people walk this earth feeling disconnected to those around them, but especially to those in different countries. The people of Haiti are a part of your community and they need you to make financial decisions that will have an impact on them. (Even a few of my favorite online boutiques are temporarily halting sales, basically not making any money,  out of respect to this national crisis.)

This tragedy is the first to utilize technology to an all time maximum. It is easier than ever to make contributions, as many sites are allowing you to simply send them a text message (removing many lazy excuses). “U.S. cell phone users have contributed more than $5 million in $10 increments to the Red Cross for Haiti disaster relief, by far the largest outpouring of support via mobile devices in history.”

For Mobile Donations (highly recommended) check out the sites below:

  • Wyclef Jean’s, Yele: to send $5,  text the word “Yele” to the number 501501
    The William J. Clinton Foundation: to send $10, text the word “Haiti” to 20222
  • Red Cross, text the word “Haiti” to the number 90999

Wireless carriers, including AT&T, Verizon Wireless, T-Mobile and Sprint, said they were not charging regular text-messaging fees on top of the donations.

Let go of your money in faith that it will return. More importantly, let go of your money in faith that it will have a real impact on those you gave it to. It is not business as usual and you should not follow your same routine.

* Remember in times of disaster, the rats come out! Be sure to validate the legitimacy of the site before you donate.

** Update: CNN has a complete list of VALID charities. Check it out here!

PHOTOS: 24-hours after the Haiti earthquake (from Reuters)

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