The Next Rich Girl

Resolved: Financial and Personal Resolutions for 2010

I know, I know.  It's January 5th.  I'm way behind on posting my resolutions.  But, on the bright side (for me, not you), since most people have already abandoned their resolutions by now, I look like a more inspired, enlightened individual... one who can stick to her resolutions and who will prosper in the year ahead.  

Or maybe I'm just fooling myself.

Anyway, since one of my tips in my New Year's Eve post was to tell the world about your resolutions, it seems like I should do the same.

Here's what I'm trying to accomplish in the year ahead, both personally and financially.  

1. Buy my first home - This has been a dream of mine for a long time.  Seriously, when I was a little girl, instead of dreaming about a fairy tale wedding or having a pony or whatever, I used to imagine the house I'd have.  I think this is partially because my parents are both into real estate, so they would take me with them to open houses "just to look" when I was a kid.  So, it was like I inherited one of their dreams (and they have a beautiful house now, so they're the right ones to look up to!)  Anyway, I've been saving for a down payment for a long time (and somehow most of that down payment savings survived the epic financial crisis of the past year or so).  With the $8,000 first-time homebuyer tax credit (thanks taxpayers!) and the fact that my 30th birthday is just around the corner, everything seems to be lining up for this to happen in the next few months.

2. Earn $5,000 outside of my "day job" - I've been lucky enough to fall into a few random freelance writing projects over the past year or two... enough to show me that I could probably be doing a lot more freelance work if I start to seek it out more actively.  I don't know if I'll ever be able to fulfill my dream of working for myself, but it seems silly to not try to point myself in that direction.  After all, you don't know if you don't try.  And, this will go a long way toward helping me achieve goal #1.

3. Run at least 350 miles this year - I never thought I'd be a runner, but after completing a "couch-to-5K" program back in 2007, I got hooked.  Not only do I feel healthier, I think it actually helps me deal with stress better, keeps me from getting sick as often and helps improve my overall outlook (which can be gloomy - especially when it's so bitterly cold outside).  I ran just over 300 miles in 2009, sort of in fits and starts (one week I'd run 10 miles, then I wouldn't run at all for two weeks).  In 2010, I'd like to be more consistent with my runs.

4. Finish my novel - That's right, I'm more than just a blogger musing about personal finance.  I'm also among the legions of writers working on what they hope will be the "Next Great American Novel."  Of course, in reality, I'd be happy with "A Novel That Is Published."  Either way, I have to finish it first.

So, there you have it.  Four big goals.  What are your resolutions?

Here Comes the Fall...

It's the day after Labor Day.  The day school starts for some many kids across the country.  The day everyone in the office is back from their vacation and everyone gets down to work again.  The air has a little crispness to it.  Summer is unofficially over and it's time to get back to reality.

This is always the time of year that I think about change.  Maybe there's still a part of all of us that remembers going back to school in the fall and what it meant: new friends, new classes, new opportunities... a chance to reinvent yourself.

So, that's what I'm thinking about as I write today... I'm thinking about changes.  Is the world changing?  Are things getting better?

We've all somehow survived (barely, for some of us) the recession that's been bogging down the U.S. economy for the last year, plus.  And, as I feel the season change, I have to wonder, is the economy finally changing too?  Are we seeing the light at the end of the tunnel? 

I'm not sure.  On the one hand, the stock market has been up for the last six months.  But, on the other hand, I still know so many people who are either out of work or looking for an upgrade from a company that has beat them down (furloughs, pay cuts, etc.).  Is this fragile sense of optimism I feel in the air just everyone trying to feel better about themselves as they adjust to the reality of an economy that's still shedding jobs?

I don't know that either.  But, what I do know is that things will get better.  We are all learning from the last year.  And, the most important thing we've learned is that we will survive.  No matter how back it gets, no matter what the economy brings, human nature is one of resilience.  And, once we've gotten through this, we'll realize that we're all better for it.

What have you learned from the recession?  Is the end in sight?

Handbags or Stock Certificates?

I didn't get to practice much of my burgeoning investment knowledge until a few years after college.  

I was working at my second full-time job (in marketing at an investment management firm) and I'd finally gotten a hold of my monthly expenses.  I wasn't making millions, but I was making enough to cover the bare necessities (rent, food, etc.) with a bit to spare to have fun.  

So, of course, at first, I did just that... I spent all that money on having fun.  It was the first time I was really making enough money on my own to feel comfortable and I certainly took advantage of it.  Drinks on the town, new clothes, the works.  

Discovering the Stock Market

I learned the value of the dollar at a pretty early age. My mom worked in retail and my dad was in sales. So just by virtue of being around their places of work, I saw the world through the lens of prices, 25% of markdowns and cash-back guarantees.

It wasn't so much that I was obsessed with shopping (although what little girl doesn't like getting something new at the mall?), it was more that I pretty quickly saw the relationship between how much my parents were selling and how well our family was doing.

This was especially true with my dad, who worked on some sort of commission system. When times were good, my family and I were taking trips to Hawaii or hanging out with my parents' friends on their boat. When times weren't good, my dad and I spent the weekends clipping coupons, competing against each other to find the best deals in the weekly circulars.

When you grow up knowing that everything has a price tag (I mean, really knowing and understanding the relationship between the number on those price tags and the amount of money (relatively) in my family's collective wallets), and knowing that those price tags can have a significant impact on your own fortune, it makes a big difference in how you approach the world.

For me, it made me know from a young age that I wanted to be rich.

A Recession Lesson: Learning Responsibility

I've been doing some thinking about the past year and how the recession has changed both my life and the lives of many of my friends and family.  As we realize that we may be in for this for a while longer (even though it's already been a year!), I think it's important to think about what the last year has brought, what it's taught us all about money and how we think about our expenses and income.

In a way, before the recession I think a lot of us had gotten used to not really thinking about money at all.  Investments seemed to go straight up, houses always gained value, everyone was obsessed with spending as much as they could, in the most ostentatious way possible (bottle service, anyone?).  I don't like to admit it, but I was in a bubble of my own (even though I was, luckily, much more cautious than most people were).  I was hoarding my money to save for a house -- but all that money went into the stock market since I, like everyone else, was convinced that it had nowhere to go but up.  I was making a decent income and my husband's business was flourishing... we felt like the young jet-setters that I'd always secretly been envious of.

Of course, when the economy tanked, it hit us hard.  My stock portfolio took a dive, my husband's clients started falling behind, I started worrying about layoffs... the same story as the rest of the world.  In a way, I didn't want to admit it.  I was so sure that the economy would turn around -- and so enamored with this vision I had of myself as a successful go-getter -- that I almost didn't want to admit that the situation wasn't going to fix itself and I was going to have to learn an important lesson... the hard way.

The Recession Vacation

I'm back from my annual retreat away from the world and I'm thinking about how fun it is to see some old friends and get away from it all... without breaking the bank.

Every Memorial Day weekend, my friends and I converge in the Outer Banks.  We stay in a rental house my friend's mom owns and, in exchange for a few light chores around the house, we stay for free.  It's a pretty awesome deal.  To make the trip even more cost effective, each guest (there were 16 this year!) volunteers to cook a meal for everyone, so we aren't spending money going out to eat or ordering takeout. 

So, basically, for the cost of cooking a big meal and a few bare necessities (toilet paper, booze, whatever the house needs) we all have a long weekend at the beach. 

What Should You Expect from Your Employer?

What with all the ominous meetings, looming layoffs and slashed benefits affecting my work life lately, I've been doing some thinking.  What should we all expect from our employers?  What constitutes just another cost cutting measure?  What constitutes a lack of respect for the value of the work we provide our employers?

I think it's pretty clear that a lot of companies are using this economic downturn to undercut their employees.  Benefits are disappearing, pay is being cut, the concept of a 401k is becoming almost foreign... it's sad when you think that it was just a few years ago when companies were increasing these benefits in order to attract the best candidates.  In the heady glory days of the housing bubble, employees were in the driver's seat.  Now, we're told that we're lucky to even have a job.  But, how many cuts can you take before your job isn't enough to make ends meet anymore?  How do we know when we're getting more screwed than everyone else?

The Aftermath

Well, my ominous meeting has come and gone, and I'm still standing.  I wasn't laid off (no one was), but we've lost most of our perks.  No more coffee in the break room, no more traveling, no more flexible schedules, a hiring and wage freeze, and... worst of all, we lost our 401K match. 

Our CEO told us all that they were trying to do everything they could to prevent layoffs.. but there are no guarantees that those won't be coming in the near future.  The impending doom has been postponed, but not eliminated.

Obviously, in this economy, I'm glad that I wasn't laid off and I know I'm lucky.  But, I'm also mad.  I don't think a lot of my co-workers realize that by taking away our 401K, they've actually lowered our compensation.  We've lost a lot of the perks that caused me to make the decision to move to this organization for less pay that I was making before. 

The Recession Approacheth: Ominous Meetings on the Horizon

For a long time I've been pretty confident that my job is safe in the recession.  Sure, I work for a non-profit in a time when people are having a hard time being charitable, but my organization has always seemed like they we're been fiscally responsible and managed to be growing in a time when everyone else was cutting back.

Sadly, now it seems that things were not all as they seem.  Last month, we had a staff meeting where our CEO told us that we "shouldn't worry," but we should start to look for ways to cut back and save money.  So, travel has been postponed, lunch meetings no longer have the "lunch" part, and all our expense reports are being scrutinized a little bit more.  Nothing horrible, in fact, a lot of it has been very understandable (and possibly a little overdue, we all had a penchant for over-catering meetings).

But, in the few weeks since that meeting, things have definitely taken a turn into unknown territory.  Everyone is tense, word has trickled through the grapevine that we've lost some funding, and the department heads have been holding a lot of secret meetings.  It's clear something is up and it isn't good.

From the Obvious File: The Recession is Depressing

In case it wasn't obvious, this here recession is a bit of a bummer.  To be more specific, according to a poll from the American Psychiatric Association, just over half of American women say the economy has had "a negative impact" on their mental health (and this number jumps to two-thirds of women in Clinton County, Ohio, a focus area in the survey). 

This is sort of old news of course (the U.K. is actually devoting public funds to help people whose mental health has been adversely affected by the economy - which begs the question, why not just devote that funding to job creation?  But, I digress...).  But, it does make me think about why we're all so depressed about the economy.  Obviously the stress about money is a huge part of it... worries about paying your bills; stress about keeping your family fed, clothed and housed. 

A Frugal Anniversary Revisited

Last week, I talked about how my husband and I are saving money as we celebrate our first wedding anniversary.  Last year, we celebrated our wedding in France.  This year, money is much tighter and we came up with a much more reasonable (but still fun!) plan: we'd each take a night over our anniversary weekend (my husband got Friday night and I got Saturday) to cook a great meal and enjoy it together by candlelight in our apartment.  We figured that we'd get two great meals for less than the price of one meal out in a fancy restaurant -- and our hard work could count as our gifts to each other, so we didn't feel compelled to spend even more money on gifts.  It's a good thing we both love to cook!

Now that the celebrations are over, I thought you'd like to hear what we created and see just how cheap a fabulous three course meal could be.

A Frugal Anniversary

My husband, and I are celebrating our first anniversary this weekend, in somewhat mixed circumstances.  Of course, we're thrilled that we've been married for a year (woo hoo!), but, at the same time, so many tough things have hit us financially this year that it feels a little bittersweet.

Exactly one year ago this Sunday, he and I pledged to spend the rest of our life together in front of 75 of our closest friends and family.  It was a beautiful wedding in a hotel overlooking the Inner Harbor in Baltimore.  A few days later, we took off for ten days in the French Riviera.  It was all the stuff that dreams are made of.

Taking Control, Part 1: An Hour a Day Adds Up

As discussed over at Blogher, one of the more emotionally difficult side effects of the recession is the pervading feeling of helplessness we all have. For a lot of us, our jobs and how we make our livelihood are closely tied with our identities –- so when a recession comes to town and starts to threaten all that, we get scared. Especially since we don’t have much control over it. I mean, we can say we’ll work harder or save more, but, when push comes to shove, if your company is going out of business, it’s going out of business… and we can’t always stop that from happening.

I think we all need to start accepting that we can’t always fix everything ourselves, we can’t always control everything. It’s not easy to accept, but it’s key to staying sane in this increasingly insane world. And, I’ll admit it, it’s hard for me to accept too. But, we all have enough stress without worrying about things we can’t control.

The Recession Hits the Wedding Industry

It appears that I may have gotten married at the wrong time.  That's right.  I got married almost exactly a year ago.  You might remember those times.  That was back when everyone still thought that if they bought a house, it would rise in value.  The financial crisis was just a glimmer on the horizon, nothing to worry about, right? 

As a result, I had no qualms about having my dream wedding.  That's not to say that we spent a ton of money, but we didn't really skimp either.  Most significantly, we planned our dream honeymoon in France -- with no idea that just weeks after we'd return to the states, our financial lives would take a dramatic turn for the worse.

Despite the Recession... Thinking About Career Moves

Despite all the stress of living in a recession, all the worries about losing my job or struggling to make ends meet, I can't help but think about the ways that my job frustrates me and daydream about finding new opportunities.  Could it be that all this economic stress also forces us all to take a good look at our current situations and think about whether or not our jobs are meeting our needs?

I'm not saying that I'm going to quit or anything, far from it.  I just think that it might be possible that after the recession runs its course, we'll all have had a little time to think about where we are and what we think our job should do for us. I know it's a novel concept right now when we're all just frantically clinging to any job opportunity we can to stay afloat, but at some point that tide is going to turn.  The economy will get better and we'll all be able to look back on this time and think about how we felt when the economic rug was pulled out from under us, so to speak. 

Some of us (hopefully most of us!) will take some personal finance lessons from this recession.  We'll save a bit more, be a little smarter about what we spend and how we invest.  But, I also think that the ways that some employers have treated their employees may come back to haunt them.  The bonuses to executives who ran the company into the ground, while the most loyal and highest performing employees face mass layoffs, the "early retirements" and "buyouts" that are really just sugar-coated terms for firings and layoffs.  If there was any remaining fantasies of staying at one company for forty years and then retiring with a nice pension and a hearty thank you for a job well done, those dreams have been completely dashed by now.  Hell, the idea of a company paying for your healthcare or doing a 401k match are starting to become rare. 

But, soon, it may shift the other way.  As employees realize that their employers think of them as anonymous, interchangeable drones, the motivation to go above and beyond falls by the wayside.  Smart companies will start to realize (and, don't get me wrong, many already do) that they'll get more productivity and save more money in the long run if they treat their employees with respect (and by respect I mean fair pay, healthcare, flexible hours, 41k match, etc.).  Also, I think smart employees will start to demand it.  I think the best and brightest, once the economy has righted itself, will demand this respect.  And, they'll get it.  Otherwise, we'll all start moving to other countries where we can get it.  If the U.S. wants to keep their status as a global economic powerhouse, this shift needs to happen.

Or, maybe these are just the pipe dreams of a very tired, overworked employee.

How do you think the economy will change in the future?  Will things get better, or worse?

Layoffs in the Building

The recession just keeps creeping closer and closer to home. 

Overheard in the lobby of my work's building today (in an excenage with our front desk attendant), "Hey, tomorrow's going to be my last day.  I just got laid off."

And he's not the only one if the rising numbers of cardboard box laden elevator passengers are any indication. 

It's a sad state of affairs.  Headlines about layoffs are one thing, but this recession is different.  Each headline is coming to life before our very eyes, lending an almost surreal tinge to all the stories we hear on the news, as we all grow more and more concerned that we might be next.

I hate to be a pessimist about it, but it's really hard not to be.  My office has been spared, luckily, but, how long can we hold out?  Are we at the peak of the recession, or has the madness only just begun?

For me, it just makes me want to regain control.  It's easy to get discouraged when you literally see signs of the crumbling economy in your office building.  But, freaking out about it doesn't protect your job.  The thing to do is just buckle down now and try to weather the storm.  Try to stock up your rainy day fund.  Polish your resume, just in case.  Try to be an extra good employee. 

Frankly, if the axe comes, it comes.  In the meantime, I think we're all just making ourselves (more) crazy.

Read More:

Lay Low to Avoid Being Laid Off
What to do if you're Laid Off (NPR)
What to do if you're Laid Off (Get Rich Slowly)

Losing Sleep Over the Economy?

Yes, you probably are.  According to a recent poll, nearly a third of Americans are so stressed about the economy that they're having trouble sleeping.

Money woes far outweigh other problems, such as the wars in Iraq and Afghanistan, global warming, or the threat of a terrorist attack, according to the annual poll by the National Sleep Foundation.

It's no surprise to me.  After all, the economy is affecting all of us, on a daily basis.  Even if you haven't lost your job, economic stress is permeating the very air we all breathe lately.  You can't turn on the television or have a chat with a friend without hearing the rumblings... foreclosures are on the rise, stocks are in the basement and layoffs are affecting those close to us.

As for me, I've never been a great sleeper.  I'm the sort of person who struggles to stay asleep, who stirs with the tiniest noise, who knows that feeling of sitting in bed knowing that sleep is just out of reach... and this is when I'm not stressed!  Add in a dash of stress (like about, say, the economy?) and I start fighting nightmares and sometimes don't bother trying to go to sleep at all -- why set myself up for a losing proposition?

It's interesting because I'm really not worried about losing my job, at least not anytime in the next few months.  I'm lucky enough to be in an industry that wasn't hit as hard as some others, so I feel like I can count on my paycheck for at least a little longer.  I'm lucky and I know it.  So many of my friends and family aren't so lucky.  It seems like everyday that I hear about another person being laid off or having their hours cut back or being forced to take unpaid vacation.  And I am feeling the pinch of the recession on my bottom line, too.  Despite my relative job security, my husband (who typically earns more than I do) owns his own business and let's just say that not all of his clients are weathering the recession the way they'd like. It's not uncommon lately for checks to come late and for people to cancel projects.

So,we try to go through the motions during the day, to hope for the best and to put a happy face on the recession, hoping things will get better fast.  We know we don't have much control over the economy as a whole, all we can do is work hard, cut back and wait for the tide to turn.  But these things are easier to say during the day.  At night, the negative thoughts creep in.  With nothing left to think about, it's hard to distract ourselves from our dark thoughts when the lights go down. 

How do you distract yourself from these dark thoughts and get to sleep?  Share your thoughts in the comments!

Read more:
Blogher: One-Third of Us are Losing Sleep Over the Economy
AlterNet: Can't Sleep? It Might Be the Economy
FDA: Tossing and Turning No More: How to Get a Good Night's Sleep

Vacationing in a Recession

I'm back in Baltimore after spending the last week in California with my family for my version of the ultimate budget vacation.  How did I do it?

1. I cashed in years of frequent flier miles, allowing my husband and I to travel for $5 each in processing fees.  (Of course, we paid three times that to check our bag, but we're still talking about a cross country flight for less than thirty dollars, I'm not complaining... much.)
2. We stayed with family, so no hotel charges.

So, I may feel like a bit of a mooch (but, isn't that what family is for?), but at least we got away for a while.  It helps that my family is in Southern California, it always feels like a vacation there.

Of course, even with the great deal I got by staying with my family, vacationing during a recession is a stressful endeavor.  No matter how much fun you're having, it's hard to leave your financial worries behind you. (Especially since the recession is a hot topic of conversation, it's like no matter where you go, you can't leave it behind completely.)  There's always a part of you thinking that you should be back at home, hustling for more work if you work for yourself or proving to your boss that you're a valuable asset to the team if you are a 9-to-5er.  In a way, it's almost worse to be away, because you're so conscious of the fact that your one of the few people lucky enough to be able to even get away (even if it's via frequent flier miles and a generous family who'll spot you for dinner) that you start to think you might be pushing your luck - something that's running out for a lot of people right now.

But, I don't mean to complain about the vacation.  It was lovely and relaxing and happy.  But now, it's back to work, faster and more efficiently than ever. 

How do you distract yourself from the recession?