…Good, Better, Best.

The recent launching of the latest iPhone 4 gave me much to think about regarding when it is time to replace an existing item. One of my friends stood in line for 5 hours waiting for his new toy. Now, he’s a frugal and practical kind of guy and he had a fairly recent version of the iPhone in his possession. However, the allure of all the new bells and whistles was a bit too much to ignore. Quite frankly, if I had not purchased the 3GS model recently, I might have been in that line waiting with him. After hearing his description of the new version, I was tempted. However, I have been relying on my good, better, best rule which helps to keep me out of trouble. I rationalized that while the new iPhone is probably the best cell phone on the market, my 3GS is better than most of the good cell phones available today. While the transition to the new phone is almost seamless, I am a creature of habit. I like every App exactly where it is. I am also getting to the age where I really don’t like change. Years ago, being frugal was considered a positive attribute. In today’s world, where an electronic device such as a cell phone gets replaced more often than some of the food in your pantry, we need to really stop and think about the good, better and best options. This includes those high priced sneakers, fancy purses, and other merchandise that we buy to impress others. When you are paying the bills do you ever stop and think about how impressed those others would be if they knew what you sacrificed to appease them. By the way, did you ever think to ask yourself who those others are that you are trying to impress? Chances are, they’re the people who are robbing Peter to pay Paul just to impress folks like you. I have to admit, I love my iPhone and in my opinion, it is a necessity for me. Different folks have different priorities. The key here is to prioritize your purchases so everything does not become a necessity. It’s okay to splurge on an item that really rocks your world. But, before you spend that hard earned cash, stop and think about the good, better and best rule.

... the art of shopping

Before I committed to this posting I thought about the psychology of spending. I thought about how empowering it is spend money. You know what I mean. That rush that you get when you say "Charge it!" knowing that your charge card will actually work. Of course there is another kind of rush with spending money. It's best depicted by the commercial of the lady running out of one of my favorite stores like she stole something. Her arms are filled with bags and she is screaming at her spouse "Start the car, start the car!" LOL, I how well do I know that feeling. Shopping is a fine art and when you hit the mother lode there is a euphoria that is better than.... I will let you complete that sentence. Anyway, this state of euphoria can be habit forming. That's how folks end up on those shows about hoarders. As much as I love a bargain, yard sales, auctions, and such I have finally come to terms with enough is enough. I don't have any more space in my house for stuff, no matter how much I save. I have also come to realize that the more I acquire, the more I have to maintain. I am getting too old for maintenance. But, for those of you who are still young enough to enjoy the rush let me share some of my shopping tips. First, never, ever, pay retail prices for anything. Honestly, you can always get the same quality and products at a cheaper price. Today's economy is a gold mine of great deals. As a quick reminder, if you have bad credit, you will find yourself paying higher prices for everything. So, keep or work on getting that credit straight. Let's start with car purchases. DO NOT focus on the monthly payment. When you go into a dealership be prepared to say NO many times. Whenever possible, get pre-approved at your credit union or bank first. The interest rates at dealerships can be RIDICULOUS! Also, know how much you are prepared to spend and stick to that plan no matter what. DO NOT get suckered into that low monthly payment. By the time you pay off that car you might be using it as a lawn ornament. DO get an insurance quote on the vehicle before you commit to purchasing. DO shop around on the internet first. DO ask your dealer about the demos that are in stock. You can save a huge amount of money buying a demo with all of the benefits of a new car. Buying a car after it has a few miles on it is often an advantage, because if it had any bugs the dealer should have discovered and fixed them. It has been my experience that extended warranties are a waste of money. Again, don't look at the monthly payment, look at the total cost with interest. You are better served to save the additional cost of a warranty in a rainy day fund. That way, you earn the interest, not the dealer. If something should go wrong with the new car you are covered by the manufacturer warranty. If something goes wrong after that warranty expires (on average 3-5 years later), you should have money in the rainy day fund to cover it. If nothing goes wrong or you buy a new car, you have cha-ching in savings that can be applied as a down payment and reduce the cost of a new car purchase. Paying extra on the principle also eliminates some of the interest charged. If you are stuck with bad credit, then try to pay off the vehicle early by making additional payments toward the principle. (Warning, some lenders charge a penalty for early payoffs. Make sure that you read that fine print.) This also works well with home loans. It can take a long time for your credit rating to catch up to your current financial status. The same rules apply when shopping for other merchandise. If you can pay cash, then pay cash! If it cost more than you can pay, save up for it. If it is a hot item at the Black Friday sale, charge it if you must, but pay off your charge card completely whenever possible. I know it's not easy but, what's the point of getting something on sale when you end up paying so much more in interest charges? Another tip for the shopping warriors is, if it looks like it is too good to be true, it usually is. If someone approaches you with a sale don't buy! Only buy when you are looking for an item. Always ask questions, always compare. If the salesperson does not accommodate you then go somewhere else. News flash! Money spends almost everywhere. I haven't figured out where it doesn't spend but I am working on that. Sometimes we get caught in the trap of shame and spend our money in places that make us feel bad. You know, those pricey snobbish boutiques that make you feel like you are too poor to be acknowledged. The first rule of shopping is if you are not being treated appropriately, take your business elsewhere. Chances are, not only will you get better prices; you will get superior service as well. That includes everything from cars to fast food. As a consumer you should be sending a message to retailers that if you aren't treated well you will spend your money elsewhere. That will assure that you get quality in addition to quantity when you purchase your merchandise. Okay, time to let the dogs run. Come back and see me soon.

...going out the back door.

Greetings all and welcome to my blog. I named this site fifty-nine cents because all the good names were taken and I remembered a little rhyme we used to sing about trying to make a dollar out of fifty-nine cents. With the economy in the toilet these days many folks are squeezing their dollars to get the most bang for the buck. I thought that it would be a great topic for a blog. My first post will speak to bad spending habits. The bottom line is that if you spend more money than you make you are broke. It doesn't matter how much you make if you spend more than you make you are BROKE!!!! It doesn't matter how much credit you have or can get. If you owe more money than you have you are essentially BROKE!!!!! A woman earning minimum wage who saves a dollar every payday is richer than you even if you earn six figures. So stop kidding yourself. When I see fancy cars or homes I think nice, but how much did that cost them? People can acquire all kinds of stuff, but the trick is keeping it. As the recent housing market decline showed us, many people are living beyond their means and got caught when the bottom dropped out. I realize that it was difficult in some areas to purchase affordable housing. But, remember the market was driven up by people who were willing to agree to almost any term to get that dream house. And for what? Who did you impress? How impressed were they when the foreclosure sign went up? Did they offer to pay your mortgage? I don't think so. Chances are they were covering up the foreclosure sign on their own doors. So, robbing Peter to pay Paul to please Mary is just STUPID!!! Okay enough of the soap box, let's talk about how to get and stay on your feet. The first step is to clearly understand where you really are financially. No fancy equipment or software needed. Get a copy of your credit report(s). Get all three if you can afford it because they sometimes will vary. Don't be scared. If debt collectors are on your trail, then go to a car dealer and act like you are buying a car. They will pull your credit report and it they are nice may even give you a copy. We'll talk about evasive maneuvers in another post. Okay, back to business. Sit down and review your credit history. If you need a box of tissue it's okay. Believe it or not once you face that fear it gets better. The next step is to write down a life plan. It should be at least one year and no more than five. When you write out your plan, put down all the things that you want to do and could feasibly do within the time frame. Don't cheat yourself either. Once you make your plan go back to your credit report and make a plan of how you plan to pay off your debt. Keep in mind the things that you have already written down on your life plan. One thing that I discovered when I was fighting bills was that I needed to reward myself after working hard every week. I went through several years of denying myself and felt extremely guilty when I bought anything for me. Now I'm not talking about expensive bling, fancy cars or such. Sometimes something as simple as a specialty cup of coffee will do the trick. One of the things that you will learn by writing down what you owe, how you plan to pay for it and what you want to do, is where you are wasting your money. Another thing that you must determine is what is a need and what is a want. For example, cable TV, manicures, pedicures, the regular trips to the barber or beauty salon, cigarettes, beer, and wine ARE NOT NEEDS!!! A roof over your head, food (and I don't mean eating out or take out) clothing, and basic transportation are modern day needs. By the way, a beige Mercedes is not basic transportation get over it. For those of you who are people pleasers you should start asking yourself, Why? The bottom line here is that if you earn $100 and spend $75 you have $25 to the good. Just basic math. If you train yourself to spend no more than a set limit that is less than what you can afford to spend you should do okay. What can you afford? Well a simple rule is if it takes you less than six months to pay back, think about saving up for the item if possible and paying cash. A clear sign that you are broke is that you can't afford to save. If you can't afford to save, then you can't afford that item that is most likely a want and not a need. Grandma always told us, "It's not what you have coming in the front door, it's what's going out the back. Think about it! I'm not a finance professional or a self proclaimed economist. I am just an average woman who has survived and conquered being in debt. Please stop by regularly and join in on my blog.