9 Ways Money Can Buy Happiness

“Money, while it can't always buy happiness, is an important means to achieving higher living standards.” –Fortune magazine

As a high school student, I can remember always doodling the phrase “Be Happy” on my worn out homework folders whenever I had free time and was lost in thought. Now whether that was due to the recent Billboard success at the time by Bobby McFerrin’s song “Don’t Worry, Be Happy” or my innate desire to seek a life of absolute bliss, I’ll never be certain. Regardless, as humans, when we make decisions, at the core of our motivation is to attain happiness.  In other words, we seek a sense of living that isn’t overrun by fear, pain and loss, but rather adoration, appreciation and affection.

Now everyone’s definition of happiness is most certainly uniquely their own depending upon their culture, values, passions, talents, experience, age, etc., but intrinsically humans do seek out the feeling of happiness in one way or another.

Known as the Easterlin Paradox, in the 1970s, the notion that more income did not increase one’s happiness was accepted, perpetuated and succinctly reiterated throughout our culture in the clichéd maxim “Money can’t buy you happiness”. However, it is a maxim without teeth, in other words actual data. And in an effort to see if it did indeed have substance, a new study revealed this year from The Brookings Institute has proven the opposite. More money does in fact increase one’s level of happiness.

But before you see this as an excuse to work harder and longer hours to bring in more money, the evidence must be qualified. Simply having more money doesn’t necessarily make you happier, it’s how you spend it that equates to more happiness, as the above quote reminds us.

After much anticipation (here), I finally had the opportunity to read Elizabeth Dunn and Michael Norton’s recently released book Happy Money: The Science of Smarter Spending. Upon completing it, I was reminded and reassured that if managed wisely, the money we have worked so hard for can indeed enhance the quality of our lives.  Today I’d like to share nine ways we all can allow money to increase the happiness in our lives. The ideas below are a combination of what is shared in the book based on research as well as a few discoveries of my own through personal experience.

1. Buy Time

Time is definite and stubborn. There is only so much of it, and no matter how long we complain about not having enough, it will never relent to give us a 25 hour day even we when turn in our request for more time to finish the project before the deadline.

So how does one go about buying time? After seven years, I finally installed an automatic sprinkler system in my yard. I cannot fully express how elated I am to have my time on the weekends to do as I please or during this upcoming summer to vacation without my plans revolving around how I will get my yard watered so I won’t have to return to a brown, dying landscape after a relaxing getaway. 

Perhaps you hire a house cleaner so you can spend more time with your family, or purchase plane tickets rather than having to drive in order to enjoy more time at your destination and less stress on the road.  When you use your money to give you more time to enjoy what you love to do, your happiness is increased.

2. Buy Experiences

Whenever the holidays or birthdays roll around, I advocate for family and friends to spend their money, if they wish to give gifts, on time together doing things that create more memories rather than on another “thing” that only brings immediate pleasure that instantly dissipates.

Even when you are planning how you wish to spend your money on yourself, choosing to spend money on a class, a tour or an event rather than on another item or clothing, more stuff or souvenirs, you create an opportunity for connection, growth and greater fulfillment.

3. Buy Quality

~Still saving for Le Creuset cookware, but when it happens, it will last!~

A large part of the mission of The Simply Luxurious Life is the idea that quality surpasses quantity on the path to creating a content and fulfilling life. Whether it reduces clutter, saves money in the long run or allows for dependable performance, when you purchase an item of quality, you have confidence that the car, tool, or item of clothing will do what it is supposed to do. In other words, it will perform at the expected level for a longer period of time and reduce your frustration, keep money that would have been spent on replacements in your pocket, as well as reduce the amount of clutter because you aren’t buying as often.

While it may take time to save up to buy a quality product, once you do purchase quality, you will be happy with your decision.

4. Buy Knowledge

Similar to buying experiences, buying knowledge, whether you find it in a book, in a classroom, or on a vacation to a new travel destination, greatly enhances the quality of your life, which in turn increases your happiness. When you have knowledge, you make better decisions which reduce stress, which allows you to be healthier and enjoy life more fully.

5. Invest in Yourself and Others

If handled properly, having more money allows for more money to be invested into retirement or placed in a savings account in case of emergencies. Knowing your financial future is taken care of allows for you to enjoy your present as well as enjoy a better night’s sleep which is needed to maintain good health.

Also, choosing to invest in others, whether you donate to a favorite charity, create a scholarship fund to award to a deserving graduate or save for your children’s future, knowing you are helping someone attain their own happiness is a tremendous happiness booster.  (Click here for more posts about money.)

6. Bring People Together

As discussed a few weeks ago, creating healthy and rewarding connections with others is a fantastic way to boost your health and your happiness.  While everyone will have differing preferences on the types of social scenarios that bring them the most joy, when you spend your money organizing a dinner party, a special date night or a grand gathering of friends and/or family, the memories and moments shared allow happiness to increase for the host as well as the guests.

7. Buy Good Health

Many of the points shared previously include an aspect of how they aid one’s health (by reducing stress, improving sleep, etc), but more specifically, when you can purchase quality food (not processed which is typically cheaper), have access to clean water, the means to buy something as simple as sunscreen or as grand and significant as health care, you improve the quality of your life, which reduces your worries, which ultimately increases your happiness and longevity.

8. Buy Now, Enjoy Later

Living in a world of credit where we purchase now and pay later actually can decrease long term happiness. But the good news is that the reverse can significantly increase our happiness. Buying now, knowing what you’ve purchased is paid for in full and looking forward to experiencing what you have bought for a certain duration, can increase your happiness.

For example - vacation airfare and accommodations. Upon making plans six months in advance, paying for certain big ticket items upfront, insures that you are indeed going to make the trip, and now you can spend the time in the interim dreaming and anticipating all that is to come. Now some may say, what if expectations are too high and you’re disappointed? Ultimately, the more research you do ahead of time, the more prepared you are for what to expect and how to make the most of the trip you’ve dreamt about.

So do yourself a favor, foster the excitement of that kid eagerly waiting for Santa to arrive by planning and paying ahead, so that you can enjoy the rewards and pleasure of what you’ve long anticipated. 

9. Appreciate Simple Pleasures

If money is mishandled, the abundance while not making us less happy, won’t make us happier either. Why is that? As Dunn and Norton point out, “Abundance is the enemy of appreciation.” 

When we know we have the means to enjoy a luxury item every single day, we become conditioned to take it for granted and not appreciate what our life may have been like before sans latte, fancy car, Louboutin heels, etc.

By reining in how often we afford ourselves the luxuries we used to thoroughly love to indulge in only occasionally – a cup of decadent hot chocolate from the nearby patisserie, homemade cookies, a spa pedicure or dinner at your favorite restaurant, we are again able to truly appreciate and enjoy them more fully.

Think about it. Seasonal fruit or flowers. Why is spring such a joyous season? Because the greenery, blooms and vegetation is something we’ve been living without for months. Why do loved ones love and appreciate each other even more after being away from each other? Because after not being able to enjoy their company at their discretion, they were able to appreciate the intimacy they so cherish. Why is each new season of Downton Abbey anticipated by more and more fans each subsequent year? Because the break between our last dose of drama at Highclere Castle is long enough for us to appreciate what we’ve been missing.

By making wise decisions about how we spend our money, we can directly affect how happy our lives are. I highly recommend reading Happy Money as they share more specific examples and evidence for their findings. 

I would love to hear examples of how you have already experienced using your money in a way that increased your happiness no matter how much or how little you make. Please do share in the comments below or on Facebook (click here to begin the conversation).

Have a wonderful Monday!

~SIMILAR POST FROM THE ARCHIVES YOU MIGHT ALSO ENJOY:

~The Key to Happiness

~Why Not . . . Revel in Simple Pleasures?

~6 Ingredients for the Perfect Day

 

Images: (1) source (2) source  (3) source (4) source(5) source (6) source  (7) source

Why Not . . . Get and Stay Out of Debt?

Last weekend I put $5 in my pocket and headed out to do some yard sale shopping (my tweet of announcement). More than anything I love to look through the newly discovered treasures as well as see who I run into. After all, a Saturday morning full of summer sunshine – that is hard to top. Well, after visiting three yard sales, I had successfully stuck to my allotted amount and found some fabulous deals – one of which was Jean Chatzky’s book Pay It Down! – one of the only books of hers I don’t have yet.

While there are slight deviations on how to pay down credit card debt, the respected experts in the field – Chatzky, Suze Orman and David Bach – to name the few that I have followed – adhere to similar advice. And while I highly suggest reading one of their many books, here is the general approach:

HOW TO GET OUT OF CREDIT CARD DEBT

1. Assess the reality of your situation. How much debt do you honestly have? Consider all credit accounts (cards, home loans, car loans, student loans, etc).  The student loans can be handled slightly different, but credit card debt and anything else other than your mortgage should be included as “bad” debt.

2. Set a goal. What is the deadline you want to set for being debt-free? One year from now? Three years?

3. Look at your income and expenses. No guessing is allowed. Take time to look at all of your expenses (mandatory and discretionary – we’ll eliminate unnecessary later). Then look at what you earn.

4. Determine how much. Based on how much you earn, how much can you pay each month to complete your goal by the set date? In Jean Chatzky’s book, she devises a plan to rid yourself of debt on $10 a day (a minimum of $310 paid down on debt each month).

5. Trim your budget. Now, take a look at where your money goes each month. Do you really need two pedicures at your favorite spa each month or can you spend $9 on OPI nail polish and give yourself pedicures at home, saving yourself $50-$100 a month? Love books, but spend more than you realized on Amazon? Start visiting your local library. Click here to learn more ways to trim your budget.

6. Know your credit score. Each year you are able to check your credit score for free. Visit one of the big three credit reporters – Experian, Equifax, or TransUnion – to see exactly where you stand. Chatzky breaks down in detail exactly how your score is tabulated and what scores are preferred.

7. Pay down the highest APR first. If you have multiple cards, while you have to pay on each of them monthly, pay only the minimum on the lower APR cards and the majority on your highest.

8. Negotiate a lower rate. Don’t be afraid to call up your credit card company and negotiate for a lower rate. Bring up all of the positives you have provided as a customer – always paying on time, the length of time you’ve held their card, etc. Then, if you are going to transfer your balance to another card, threaten to cancel the card. If nothing works, look at #9.

9. Consolidate if possible. If you already have a card that offers interest free balance transfers and a 0% APR for a year or two, transfer your other card balances onto that card. Why? Interest free. This will give you time to pay down your balance without incurring interest on what you owe - in turn, saving your money. Just keep in mind the regulations – how long this grace period lasts, etc. If none of your current cards offer this option, look for a card that does (they are out there). Three things to look for – rate, fine print and fees (annual, late payment, etc).


Once you have followed these steps and wiped your balance sheets clean of debt, be very stern with yourself and continue to remain debt-free. Last year I shared specific tips on how to successfully have a credit card, but today I would also like to share money rules to follow as you go about your daily life that will also keep you out of debt permanently.

HOW TO STAY OUT OF CREDIT CARD DEBT

1. Only eat at a restaurant once a day. While many of us don’t eat at a restaurant every day, keep this rule in mind when you do, and never go out twice in one day. If you know you have dinner plans to dine at your favorite restaurant, pack a sack lunch for work instead of going out with co-workers.

2. Don’t carry your credit card with you. Or if you have to, place a piece of paper around your credit card, write FOR EMERGENCIES ONLY and wrap it with a rubber band. At least, you will have to think twice before using it. Once you trust yourself, #2 isn’t necessary.

3. Shop with a list. Real Simple did a study that revealed women who think they are successful are women who make lists. Avoid unnecessary purchases and don’t leave home without your list!

4. Shop for groceries once a week. Take time to plan the week’s meals and then on the same day each week, gather up your coupons, list and cloth grocery bags and head to your local market.


5. Withdraw cash for your monthly grocery budget at the beginning of the month. I always find it interesting that I would often let my cravings increase my grocery budget unnecessarily, but when I know I only have so much cash each week to go grocery shopping, I shop wiser, I keep my cravings in check and I am forced to get more creative in the kitchen and use what I have.

6. Bank online. In an effort to avoid missing bill due dates, pay bills online. This is a wonderful approach for working together with your partner, so you know for sure that bills are paid, but it also allows you do schedule payments even if you haven’t received a bill in the mail.

7. Don’t be afraid to put something on hold. If you’re shopping and you come across a dress that catches your eye, but you’re not sure it’s worth stretching your budget on, put it on hold. If you still want it the next day and can afford it, go back and get it, if not, you’ve saved yourself some money.

8. It’s okay to return items. Don’t feel guilty or ashamed for changing your mind. It’s your money, and if you don’t want something as badly as you initially thought, return it.

9. Refuse to follow the crowd. While your friend, neighbor, or parents may have fabulous decor, clothing or outdoor equipment, you do not know the state of their finances. However, you do know yours, and you know what it takes to keep yourself financially secure – paying your bills on time, staying out of debt and saving for retirement. The New York Times recently reported in an article that in 2010, 75% of Americans approaching retirement had only on average $30,000 saved for retirement. That’s absurd! Hopefully they enjoyed their third car because retirement may not be all that enjoyable.

Don’t get sucked into doing something because someone tries to make you feel inadequate. The best feeling in the world is financially security and one of the biggest contributors to stress in life and in relationships is money, so make sure to handle wisely the money you earn.

More than anything, take the responsibility to control what you can, and how we spend our money is something that is very much in our control.

Images: (1) pinterest 

Retirement Savings – What Should the Goal Be?

One of the financial blogs I visit frequently is The Simple Dollar, and I recently came across a post that contained a formula regarding how much each of us should save for retirement.

Presently, with each month’s budget we all should save 15-20 percent (15% for retirement and 5% for a cushion account for emergencies and dreams); however, how can we be sure that this will be enough for the time when we choose to retire?

Read more »

Be Attractive to Wealth

Believe it or not, there is such a thing as magnetic energy when it comes to attracting wealth. What am I talking about you may ask? Well, in Jean Chatzky’s book The Difference, she speaks about a person’s ability to be appreciative and grateful for what they already have is essential to attracting more of what they desire.

Simply put, it’s a positive attitude, an appreciative attitude, no matter how little you have in the bank account, to realize that you are responsible for discovering your own contentment and in order to achieve that, you must recognize the abundance you already have around you.  After all, if you are not satisfied now, you will never be satisfied when you get more because you will never have learned the gift of being grateful.

So how exactly does one acquire this magnetic chemistry? Here is what she suggests:

*Wear rosier glasses – In other words, choose to see things more optimistically, eliminate the cynicism and elect to see how abundantly rich you truly are – not necessarily always in cash value, but in the relationships, lifestyle and the community you live in.  Appreciating what you have instead of what you lack will create a tremendous positive change.

*Stop comparing yourself to others. By choosing to value who you are and the talents and gifts you have to offer, you are again focusing on your self-worth, but if you constantly are belittling yourself for not being like the Jones’ or the beautiful model on the cover of the magazine, you will always feel as though you are lacking.  Change what you focus on and that energy will multiply.

*Use visual cues. By posting your mantra, inspiring quotes or visuals that serve as reminders to keep you focused on what is truly important, you help yourself out on those days when it seems nothing can go right and you begin to doubt yourself.  Put yourself on the offensive by planning ahead and frame your most inspiring quote above your desk, write it in your planner so you see it when you open it up every day, on your phone’s screensaver – wherever you will notice it and take a moment to check in with yourself on those moments when you’re in doubt.

*Do something for someone else. Choose to pay it forward by helping someone out who isn’t expecting your aid – it may be someone you know, it may not be, but in doing so you are giving of yourself – your good fortune - to someone else who could benefit from your time and energy. It doesn’t have to be a grand expensive gesture. In fact, it doesn’t need to cost any money, a simple 30 minute visit to a senior citizen who enjoys your conversation. Whatever you do, remember do it without wanting anything in return because truly wealthy people realize how fortunate they are and want to give back when they can simply because they can.

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Image: Dustjacket Attic

For One Entire Week

At the beginning of the year, I issued a financial challenge. A challenge to take a bit more control of your spending regardless of whether you are doing exceedingly well or just getting back on track.

This challenge is something I try to do every month, and it forces me to be more organized and spend more consciously.  The challenge is to stop spending for an entire week each month.

At first this may seem difficult, but by giving your checkbook a week off, you demand of yourself to plan ahead on necessary purchases or scheduled appointments, pay your bills at a regular time each month and halt spontaneous and unnecessary spending.

For me this week of no spending usually occurs either the 2nd or 3rd week of the month.  The first is reserved for paying the bills, stocking the pantry and filling up the car.

Each month will be different depending upon what your schedule has in store, however, try to make this something you incorporate into your spending plan.

The simple luxury of looking at your checkbook at the end of the month and seeing a gap of seven days without an entry is a wonderful sight to see.

{Receive additional simply luxurious ideas and inspiration by subscribing to the weekly newsletter. Click here to view a past issue and simply sign up by entering your first name and email address in the middle column to the right on the homepage of The Simply Luxurious Life blog. Each issue arrives promptly in your inbox early Friday morning or late Thursday evening depending on where you live.}

{Have a Twitter account and want inspiration throughout the day as well as being notified of the most recent posts on The Simply Luxurious Life? Follow me here @simplyluxurious. }

Image:Vogue and Coffee

Simple Ways to Trim the Budget

Recently, I sat down and took a look at my budget. I tried to identify what utilities weren’t being used to the full extent of what I was paying for or were simply not something I needed.

What I found were two opportunities to trim my budget – saving me money, without really changing my lifestyle at all because I came to realize I didn’t need a land line phone and an extra television. While it wasn’t a huge savings, when I calculated how much it would save me in a single year’s budget, it was well over a couple hundred dollars. Such an accumulation of money is not something to nonchalantly give away, and I look forward to doing something that is more in alignment with my goals.

What I’d like to share with you today are ways to trim the excess from your life so that you are creating more quality and putting your hard earned money towards those dreams, goals and responsibilities that are at the top of your priority list. The first time I ever sat down to do this was more than seven years ago after purchasing my first house. What was important to me was being a homeowner, but I knew I’d have to tighten my belt a bit and that meant I had to become creative. Below is the list of ideas that I came up with:

1. Assess all of your utility bills and determine what you can live without (reduce the cable package, bundle your phone and internet, etc). Pay for what you need and use regularly, eliminate the rest.

2. Call your credit card company and negotiate a better rate if you are a card holder in good standing.

3. Transfer high credit card balances to a No Interest for a year or two card that doesn’t have an annual fee allowing you to pay it off quicker.

4. Buy magazine subscriptions for more than a year at a time. The savings is usually quite astonishing.

5. Visit the library and check out the books you’ve had your eye on at Amazon.

6. Clip coupons and make a grocery list.

7. Pay bills on-line (save the stamps).

8. Lower the temperature on your hot water heater.

9. Use warm water when washing your clothes instead of hot.

10. Turn off the lights when you leave the room.

11. If you frequent a particular coffee shop, purchase a gift card at the beginning of the month and place a budgeted amount on the card. Hold yourself to this amount.

12. Cook at home.

13. Eat out only on special occasions or at restaurants where the meal is something you couldn’t make yourself.

14. Have the oil in your car changed and tires rotated every 3 months or 3000 miles.

15. Become creative with leftovers.

16. Have a book swap.

17. Have a reward card for places you frequent (hotels, coffee shops, movie rentals, etc).

18. Make water your drink of choice.

19. Forgo the gym membership and instead schedule a one time session with a personal trainer asking for exercises that can be done at home to achieve the results you desire.

20. Play board games – a tradition that has lasted because they are socially entertaining and free!

21. Lower the heat in the house by a few degrees and increase the air temperature in the summer ever so slightly.

22. Discover chores and tasks that you are paying someone to do that could easily be done by you or someone in your household.

So what are cost-effective strategies you have found to work for your budget? I’d love to hear as I truly believe that we are truly creative when necessity is knocking on our door. And the necessity in this case is why throw good money after so-so things or expenses when there are far better reasons to save it.

Image: Sebastian

Continue To Be Financially Savvy

Have you ever attended a family get together and your great uncle (insert any particular relative that might just drive you up the wall a bit) begins a diatribe on a particular stock or the market in general and throws his opinions around as though they were weighted in gold? And at the same time, trying to convince you to opt in? Well, in this case, as most cases in life, being educated of the facts is your best way to gain sanity and remain grounded so that you can confidently set him straight and walk away, or know for certain if indeed he does know what he’s talking about.

Just as continually staying abreast of new ideas, concepts and technology in the field your profession is in is a wise and prudent idea, it is also a good idea to stay up-to-date on the financial news of the day. Now I wouldn’t suggest you watch the stock market on a daily basis (unless you want to), but I highly suggest reading at least one financial article or viewing one financial money program once a month (possibly more).

Why is this a good idea? Even though you may not be trading stocks regularly, it is important to take control and be well educated on exactly what is going on so that you can’t be swayed by someone trying to convince you to do something unwise with your money, or on the flip side, to know when it might be an ideal time to do something with your money other than what you are currently doing.

Once you have the knowledge of what is going on in the financial market, you have the power and no one can take that away from you.

Below is a list of publications, shows and authors to consider taking a look at, and please share financial website or shows that you have found to be of value.  I’d love to hear and am always looking to broaden my horizons as well.

Authors:
Jean Chatzky
David Bach
Suze Orman

Publications/Websites:
The Economist
Money magazine
Financial Times
The Wall Street Journal
Kiplingers

Shows:
The Squawk Box
Mad Money
Bloomberg

Image: The Glitter Guide

How to Avoid Spending Temptations

Last weekend I found myself watching the film Confessions of a Shopaholic and began to contemplate ideas on how each one of us can take control of those moments when it seems the shoes are far too fabulous to pass up or those particular pair of jeans fit much too well to not take home this instant.

It is more than encouraged to stock your closet with quality basics, classics and fabulous clothing, but when we know that our budgets are tight for any given reason, how can we be the responsible adult we know we are and just walk away? 

As a way of helping out when just such occasions arise, today I’ve gathered together a list of 12 ways to remain resolute in our goal to remain financially secure. Please do share what has worked successfully for you as I know I have just scratched the surface.

1. Don’t carry credit cards all of the time

2. Place savings in an account that is not directly linked to your checking

3. Carry cash to the grocery store.

4. Always bring a list

5. Don’t go shopping if you don’t have something in mind to buy

6. Sleep on it. Wait a full 24 hours before deciding on major purchases

7. Avoid shopping with fellow spendaholics

8. Pay your bills first and see what you have left over

9. Identify the purpose for your purchase.  If you think you might need it sometime, wait.

10. Stop unwanted catalogs from arriving in your mailbox. Click here to find out how to take your mailing address off the list.

11. Stop credit card offers from reaching your mailbox. Click here to find out how.

12. Create a budget and enter your expenditures every day or at least weekly to know exactly where you are throughout the month.

Image: IZAK

When to Splurge, When to Save

Whenever I receive sample sale email reminders in my in-box, my shopping instinct gets a bit tingly and excited I must confess.  And the main reason is that top design houses are giving an opportunity to purchase potential investment pieces at shockingly reduced prices.

However, during the rest of our shopping adventures, we must make up our minds – what is worth spending a very pretty penny on and what is not.

The key to keep in mind is that the foundation pieces, the skeletal system of your wardrobe, should consist of quality fabrics and tailoring. These items, if you want them to go the distance and always look fabulous, are going to be pieces that will cost more, but will be worth it in the long run (remember cost per wear?).

On the flip side, those items that only are worn one season and never pulled from the closet again, or can look just as striking as a faux, are okay to scrimp on. 

Below is a list of items to save up for and items to not break the bank over.  As always though, there are exceptions, so I have made a list of limbo items that might go either way depending on the situation.

Splurge/Investment Pieces:

jeans
dresses/skirts
suits
sweaters (cashmere)
coats/jackets – winter & seasonless
shoes (work, flats, boots)
dress pants
couture
bras
handbags

Limbo

panties
sneakers
exercise clothes
classic button up shirts
pajamas
vintage
scarves
jewelry
swimsuit
shoes (occasional)

Save

trends
t-shirts
belts
hosiery/socks
shorts

Do share what items I may have forgotten, as I’m always looking to learn from my fellow fashionistas.

Image: Southern Sophisticate

Guest Post: 30 Things I Learned About Finances

I am so happy to introduce you to a fellow blogger who inspires me every day when it comes to style, living a life of your dreams and being financially independent. Tiffani is a personal stylish living in New York City and is the entrepreneur behind Living Chic personal stylish services as well as the author of the blog Accidental Chic. The list of financial advice she has generously shared with The Simply Luxurious Life readers is something I myself will be printing and posting on my inspiration board. Have a look.

I am excited to be able to contribute to The Simply Luxurious Life’s 'Financial Food For Thought'. A passionate lover of fashion and design living in NYC I knew I had to educate myself on personal finances once I graduated from Grad School back in 2007. I was determined to be smart with my money and start off on the right foot. I find personal finance fascinating because you can tell a lot about a person by their relationship with money.

Last month I celebrated my 30th birthday in Paris, France. This has been a goal of mine since I was 27 years old. Yes, I'm a planner. However, I can't express how liberating it felt to have this amazing life experience and not worry about putting it on a credit card since I had been saving for years. Therefore, I would like to share the wisdom I have learned since taking hold of my finances in my twenties. 

30 Things I Learned About Financial Chic Before I Turned 30

1. Passion is everything; the money will follow.
2. Savings = FREEDOM
3. It's never too early to start saving for retirement.
4. Pay off your credit card balance each month.
5. Cash is KING!
6. Aim for a 720-800 credit score.
7. Never defer you student loans, especially private loans.
8. Sleep on big ticket purchases.
9. NEVER co-sign a loan for anyone. We're all responsible for our own finances.
10. Make a financial date once a week with your finances. Wine, tea - anyone?
11. Buying expensive designer clothes, bags, jewelry on credit is NOT chic. 
12. Time is money.
13. Aim for an 8 months emergency fund, the future is not predictable or promised.
14. There's nothing more attractive than a woman/man with their finances in order.
15. Whenever shopping, make a list!
16. Check your credit score & credit report once a year.
17. Set up a savings account with a high interest online bank, you'll be less tempted to take out the money since it is not accessible to an ATM.
18. KNOW YOUR WORTH!!!
19. Surround yourself with like-minded money people.
20. Start a money group.
21. Suze Orman and Carmen Wong Ulrich are great financial gurus.
22. Never, ever marry for money. You'll get exactly what you deserve...
23. Be open to talking about personal finances and educate those around.
24. Don't be afraid to say 'no thanks' to social obligations that will put you in debt.
25. Did I mention cash is king?
26. Continue to educate yourself on personal finance. Unfortunately, we have a lot to learn since we were never taught this in school.
27. Life is meant to be enjoyed, don't let poor financial decisions put a damper. It's never too late to turn it all around.
28. Buying a home does not mean financial freedom or the American dream for everyone. Stop trying to keep up with the Joneses, everyone's situation is different.
29. There's no way to balance work and play, your work should be play!
30. True wealth is not the consumption of material possessions but the ability to fully experience life.

{Tiffani is a NYC-based Fashion Stylist, Creative Director of LIVING Chic Style, Inc. and also inspiring you to live a fashionably beautiful life through her blog ACCIDENTAL Chic.}

Pair Up & Save on the Necessities

The grocery store items that are necessary to buy – paper towels, toilet paper, laundry detergent – those big bulk items that are mandatory, but if bought in small quantities each time they run out can really add to your household budget, can be an unnecessary drain on your hard earned money.

Why not pair up with someone who buys similar products such as your sister, a good friend, or in my case my mother, and hit the wholesale warehouses (Costco, Sam’s Club, etc) seasonally and split the cost?

Recently, I did just that, and we turned it into a girls’ weekend. For example, while I need olive oil (I use it at least 2-3 times a week), I don’t need two supersized bottles of it and don’t want to pay for two.  One will typically last two months for me. The idea is to hopefully purchase those items we need at a reduced price without wasting or overbuying.

Depending upon the size of your household you may need to go every two months, but for a small household, every four or six months may do.  Whatever you decide to do, the beauty is not only are you saving money, but you’re scheduling an opportunity to spend time with someone you enjoy being with.

More tips for a successful trip:

*Come with a list (don’t buy on impulse). The goal is to save money.

*Figure out ahead of time how you will pay at the register (does one pay in full, and the other pay back in cash immediately?) Less headaches and a strong friendship will continue if you plan ahead.

*Plan some place fun to go for lunch and/or dinner

*If where you shop is a few hours away, maybe make a reservation at a hotel you’ve always wanted to stay at and pamper yourselves.

Image: Musings In Femininity

Cost Per Wear

Often I receive questions on how I justify and afford more expensive choices in my wardrobe. And while I have a very limited clothing allowance, when I choose to purchase an item that on paper initially look a bit astronomical, I take my calculations one step further.

Cost per Wear

What does it mean? Let’s take designer jeans – my favorite are Citizens of Humanity and J.Brand. As a teenager, I was continually frustrated with jeans that weren’t long enough and never fit me correctly, which at the time made me feel as though there was something wrong with me, but when I finally discovered longer lengths at a bit more expensive price range, I was more than ready to put more than a few bucks down.

The rationalization of Cost per Wear is if I wear a particular pair of $150 jeans 75 times, the jeans are actually $2. And while some may say, but your checking account is still missing $150, my argument is that the quality of the jeans allowed them to be able to be worn 75 times, thus, saving me from buying a similar cheaper pair that wouldn’t have been able to go the distance.

I realize that not everyone will agree with this, however, no matter how much a pair of jeans cost, if the money isn’t available, there is no rationalizing it – the jeans must stay on the rack.  On the flip side, however, if the funds are there, and you know the item will be easily incorporated into your lifestyle, than don’t feel guilty for choosing quality. One fabulously tailored quality item will bring the rest of your wardrobe up to its level.

Image: A Cup of Joe

What Is True Wealth?

For each of us to define the monetary value of true wealth would invite an infinite list of numeric values, but to define it in one definition that 99.9% of us can agree on comes down to the state of mind we seek. One of the money websites/blogs that I receive daily emails from is Daily Worth, and they raised a great question that I think is beneficial for us all to take the time to ponder.

What does wealth feel like? What does it allow us to do? What does it provide? Try to do your best to not begin by relating it to material wealth, but instead on the emotions wealth would evoke within us.  The reality is, the material items – the clothes, the house with the extra bath and bedroom and the vacations are by-products of a truly wealthy life because when we can enjoy these luxuries without guilt or accruing debt each of us is truly wealth.

Below are the three things the Daily Worth and I too agree are the most important goals to strive for in order to be truly wealthy. Would you agree? What would you change or add? I’d love to hear.

1. Have Financial Security

Financial security defined by one financial advisor may be different compared to that of another, but essentially, when the unexpected times occur, do you have enough to last until you can get back on your feet?  Some say to have a cash reserve of 3 months. Suze Orman takes the toughest stance and strongly suggests eight months.  However, we all must start somewhere and continue to add to it each month.  A money market account or something unattached to your daily checking account is the best way to eliminate self-destruction (meaning unnecessary spontaneous withdrawals), but also something that can be accessed within a few days.  Another positive regarding money market accounts is that they typically yield a slightly higher interest rate than a standard savings account.

Financial security also includes the future (a la retirement) and making sure we are contributing each month to the fullest of our capabilities – preferably 15% of our take home pay, but at least 10%.

2. Be A Good Money Manager

I mentioned this topic of responsibility last week, but in order to have wealth, we must be able to trust ourselves with the money we’ve worked so hard to earn. Once we become disciplined, have clear goals and know when we can have fun with our money, than we are that much closer to truly allowing ourselves to reach true wealth and our full financial potential.

3. Having Peace of Mind

By creating a sound financial cushion for today’s unexpected moments and tomorrow’s adventures which requires sound money handling, the peace of mind that we create for ourselves and our families is priceless and ultimately, isn’t that what wealth is? So choose today, if you haven’t already to Take back the control and become the captain your destiny.

Image: chicinspector

Take More Responsibility

While many banks and other financial institutions offer protections, advice and assistance on a wide variety of products and programs, there are a few things we can all do to eliminate paying for things we should be more than able to do by ourselves.

The excitement about becoming an adult is undeniably a stepping stone, but in order to be a grown up, we must behave as one which means taking responsibility.  As batman’s anthem reminds us, “With great power, comes great responsibility.”  The power in this instance is the weight we carry as adults in society, with our kids, in our communities and for today’s post, with our finances.  So why not get rid of the following protection and create a budget program for free as it will force you to be responsible and to do something you should, as a grown-up, already be doing.  Take the training wheels off!

1. Decline Overdraft Protection

If you know that the bank will not be paying those businesses you’ve cut a check too without having the funds in the bank, you will be less apt to whip out your debit card or checkbook.  And under no occurrence, should you use your credit card to purchase something when you don’t have the cash to cover it in your checking account (I’ve done it before, am well aware of the consequences and have learned this lesson the hard way.)

2. Don’t Pay for a Fancy Budgeting Program

It is unnecessary to spend more money to organize the money you aren’t already managing well. Instead, simply set up a checkbook register in an excel program as suggested by Melissa Tosetti in Living A Savvy Life with simple addition and subtraction functions for each month. At the beginning of your month, enter your paycheck(s), and deduct all of your mandatory expenses (as you would in a calculator). At the end or the beginning of each day, enter your expenses (eating out, groceries, etc), so that you know exactly how much you have in your account.  Without getting fancy, you can easily keep yourself managed, organized and your spending under control.

The thing to keep in mind is that we must control our money and not the other way around as Suze Orman reminds us, and as one of my favorite quotes that is pinned to my idea board states,

“I think the nicest thing you can say about a woman is that she lives well and she lives below her means.”

 

(Suggestion #1 suggested by Suze Orman in her book The Money Class)

Image:Simply Seductive

Live Below Your Means

I recently purchased Suze Orman’s new book The Money Class, and I have to first say I couldn’t agree with her more regarding the focus for the entire book – we must all live in our truth.  We must get real.  We must look honestly at what we will need to live on in the future and get real about how we handle money today in order to attain it.  With that said, she begins in chapter 2 by reminding us to live below our means.

In today’s culture, that may come as a slap in the face, but think about it this way.  When we retire we will live on approximately 75% of what we live on today (if we have been diligent about our retirement savings). Becoming used to living below our means will provide less shock in the future and allow us to save now for a grand future when we do retire.

So how do we do this? How does one live below their means?  Here are a few of her suggestions to consider:

1. If your mortgage payments surpass 35% of your monthly income, consider living in a smaller house.  It was always suggested that a mortgage payment be 33% of your income or less, but with the financial housing crisis, many are paying easily 50%.  If you exceed the 35% try getting creative on how to downsize. It might take some time, but will save income today, so that you can save for tomorrow.

2. Take care of the car you have. Leasing a new car every 2 years simply to keep up with your neighbors will not bring true contentment, but it will strap your monthly budget.  Find contentment within yourself by pursuing a life that is truly fulfilling to you that does not need to be validated by anyone else.  By simply taking your current vehicle in for oil changes and tire rotations every 3 months and overall service, you can have a car that runs efficiently and is paid off so that you save yourself hundreds of dollars each month.

3. Eat out less. There are many benefits to deciding to eat meals at home beginning with your hard earned cash – more of it stays in your pocket!  Not only are you saving money, but you are aware of what you are eating and promoting an environment within your home of strong family relationships.  Saving those special occasions for taking the family out to eat will create a more grateful attitude and possibly produce children and spouses who love to cook in the kitchen with you.

4. Eliminate the excess. Take a moment and look at your monthly expenditures.  Where is your money going? Suze offers a great tool upon purchasing the book that allows you to go online and enter all of your expenses. She goes over your expenses and income numbers (well a computer system does) and reveals where she thinks you can reduce, add more to savings or are doing well.   After walking myself through this, I realized I have extra money which should be going toward my savings cushion (which will increase the amount I am already adding).

With these four suggestions and living more consciously, reminding ourselves that we give money power, ask yourself today, what power am I giving to my money?  At the end of your life, be the person who can say, I took advantage of the power of the money I earned and put it to great use for myself, my family which ultimately created a peace of mind for the present and for our future. Take back your power and purchase peace of mind, not more stuff.

Image: Southern Sophisticate

Small Ways To Save

{A simply luxurious life, while full of the concept less is more, luxuriates in the decadence of high quality, complementary style and an appreciation for the beauty that surrounds us in decor, fashion, nature and people themselves. One does not need to maintain a balance in the bank that one might associate with a millionaire, however, it would be a mistake for me not to address the fact, that being secure financially – just the knowledge of this fact – brings about a priceless piece of mind that contributes greatly to a well-balanced simply luxurious life.

With that said, my new series every Friday will focus on sharing a bit of financial food for thought that will help you create a sound financial life that makes it possible to make the choices that will help you create the life of your dreams.  Because after all, simply having choices is a luxury – enabling independence, however we might choose to go about our every day lives. }

When saving for future plans comes to mind, often times it seems a bit daunting as though we may never reach our goals, but it is in the little things we do every day that will ultimately lead to financial security and a very nice nest egg. Here a few simple ways to always have money in your banking and savings accounts:

1. Save Half – Whenever extra money comes your direction, whether it be your tax return, a bonus, extra pay you hadn’t planned on – immediately stash half of it away in your money market account or savings account so that you won’t be tempted to touch it.

2. Cash Only! – Unless you are paying your bills, pay for your discretionary expenditures with cash.  By getting into the habit of planning for your daily spending, and forcing yourself to only use cash, you will eliminate those instances of quickly pulling out your debit or credit card.

3. Eliminate spending for a week each month.  This was one of my suggestions at the beginning of the year to curtail unnecessary spending that we feel we have to do.  While it will require planning, it still possible to go a week without paying for anything.

Images: (1) Sebastian (2) Sebastian

End of the Month Financial Celebration!

{A simply luxurious life, while full of the concept less is more, luxuriates in the decadence of high quality, complementary style and an appreciation for the beauty that surrounds us in decor, fashion, nature and people themselves. One does not need to maintain a balance in the bank that one might associate with a millionaire, however, it would be a mistake for me not to address the fact, that being secure financially – just the knowledge of this fact – brings about a priceless piece of mind that contributes greatly to a well-balanced simply luxurious life.

With that said, my new series every Friday will focus on sharing a bit of financial food for thought that will help you create a sound financial life that makes it possible to make the choices that will help you create the life of your dreams.  Because after all, simply having choices is a luxury – enabling independence, however we might choose to go about our every day lives. }

Whether the end of your financial month is the last day of the month, the 20th or follows no routine at all, I do believe that we must take a moment, however briefly, and pat ourselves on the back for being disciplined and wise with our money. While putting away money each month for retirement, dream trips or vacations may seem like a goal that takes forever to reach, it is a important that we recognize and applaud the small steps along the way to creating a secure financial future.

It can be so easy with a simple click of the mouse or trip our favorite shop to blow our planned budget, but choosing to remain disciplined, to keep the goal in sight during those times when we are tempted to stray is an accomplishment in and of itself. Here are a few tricks on how to stick your goals:

*Keep a visual plan of what you are aiming for with your long term financial goals accessible. For example, propped up in front of my computer on my desk is my inspiration notebook, turned to the pages that hold my goals. This is an easy, yet daily reminder of why I’m sticking to my stringent plan.

*Make a list of at least 100 things you enjoy doing that don’t cost any money or are very inexpensive.

*Create an RSS feed of money saving blogs and read the posts daily.

Below are a few money saving blogs I follow and to find even more, read Kiplinger’s Best Money Blogs:

*The Daily Worth

*The Mint Blog

*Budgets Are Sexy

*Fashion Me Green

*Learn Vest

And now, find a way to celebrate your efforts – possibly making a decadent meal at home, springing for your favorite bottle of wine and sharing it with friends or a loved one, going out to see that movie you’ve been curious about. Whatever you choose, make sure it’s within your budget and after you’ve enjoyed the event, you have no regrets. And most importantly, enjoy yourself! You’ve earned it.

Image: Southern Sophisticate

Three Baskets of Savings

{A simply luxurious life, while full of the concept less is more, luxuriates in the decadence of high quality, complementary style and an appreciation for the beauty that surrounds us in decor, fashion, nature and people themselves. One does not need to maintain a balance in the bank that one might associate with a millionaire, however, it would be a mistake for me not to address the fact, that being secure financially – just the knowledge of this fact – brings about a priceless piece of mind that contributes greatly to a well-balanced simply luxurious life.

With that said, my new series every Friday will focus on sharing a bit of financial food for thought that will help you create a sound financial life that makes it possible to make the choices that will help you create the life of your dreams.  Because after all, simply having choices is a luxury – enabling independence, however we might choose to go about our every day lives. }

Financial security begins with knowing your financial future is secure. More specifically, knowing you have money to live off of in the future upon retirement, money to depend on during times of unexpected expense and emergency, and money to chase your dreams with.

David Bach of Smart Women Finish Rich suggests three baskets. Let’s take a look at what they are and where you can begin.

1. Retirement

Whether you are matching what your company contributes each month to your 401K, have an IRA or a Roth IRA, or participate in a Tax Sheltered Annuity, make sure you are putting away something every month, and as the financial experts remind us regarding compound interest, the sooner you start the better, but it is never too late.

2. Emergency

An emergency account must be something that is readily accessible, yet has the potential to earn interest if it is left untouched. A simple savings account which is supplied automatically each month with a set dollar amount is an idea that is easy to implement. The amount each person should have saved varies depending on circumstances, however, a three month minimum is something that nearly any financial advisor will seems to agree upon.

3. Goals & Dreams

One of the most freeing things about each of our lives is that we have the power to change its course.  The hopes and dreams we carry with us as we mold our simply luxurious life are something not only to wish for, but to attain. However, the reality is that many of our dreams will need to be financed. So we must put them on paper and determine exactly what needs to be saved to achieve them.  Once we know how much we will have to put away, we can determine how much to place in a Money Market account or Certificate of Deposit if the goal is a short term (less than two or three years) which will earn more interest than a standard savings account. Remain focused and begin today, after all, a dream begins with a single step. (To see a list of financial choices you may want to make depending upon the length you expect it will take to reach your goal, click here.)

Image: Sebastian

Taking Control Of Your Spending:Part 3

{A simply luxurious life, while full of the concept less is more, luxuriates in the decadence of high quality, complementary style and an appreciation for the beauty that surrounds us in decor, fashion, nature and people themselves. One does not need to maintain a balance in the bank that one might associate with a millionaire, however, it would be a mistake for me not to address the fact, that being secure financially – just the knowledge of this fact – brings about a priceless piece of mind that contributes greatly to a well-balanced simply luxurious life.

With that said, my new series every Friday will focus on sharing a bit of financial food for thought that will help you create a sound financial life that makes it possible to make the choices that will help you create the life of your dreams.  Because after all, simply having choices is a luxury – enabling independence, however we might choose to go about our every day lives. }

1. Make A Date

Sit down on the first of the month or the day you receive your paycheck, pour a cup of tea, turn on your favorite music and make a monthly ritual of paying all of your bills, enter all expected expenditures, even ones that haven’t arrived in your mailbox yet, so that you can see exactly where you stand as you approach the month. Once a bill clears with the bank, go back into your program and check it off. Not only will this keep you apprised of exactly where you are with your monthly finances, but you will be doing a little bit every day instead of having to sit down once a month for hours trying to match everything up.

2. One Card Only

The feeling of cutting up all extra credit cards besides one is a tremendously freeing feeling.  If you don’t have it, the likelihood of using it is drastically reduced. And by only having one credit card, you are more likely to make savvier decisions. If you do have credit card debt that you aren’t able to pay off in full monthly, sit down and create a plan to eliminate it. There are many philosophies as to approaches on how to do this, but I’ve always been of the mind that one should pay down the card with the higher APR first, making only the minimal payments on the lower APRs until the former card is completely paid off. (Click here to view Suze Orman’s simple, but direct steps to eliminate your debt.)

Many readers in the past few weeks have left some wonderful comments on how they handle credit cards, and I want to thank you because you inspire me. It is reassuring to know that there are very wise women who live stylish lives and are clearly very intelligent when it comes to money. After all, as one reader stated, the best feeling in the world, isn’t wearing a pair of credit-card paid Jimmy Choos, but instead knowing you have a secure financial future ahead of you.

To view previous posts in this series:

*Part 1

*Part 2

Image:  Oscar PR Girl