EMOTIONS AND MONEY

“If I had more money, I would…” 

How would you finish that sentence? 

Pay down debt? Retire?  Travel? Buy a home?  Whatever your answer, it’s probably something you’ve envisioned many times.  Now, as you imagine this world with more money, think of how you feel.  Good right?  The anxiety and fear around your personal finances dissipates, you slip into a sensory fantasy of sunshine on your face, mojitos on you lips, sand between your toes, salt water in the air, and ocean spread out in front of you.  Oh so good.

Welcome back to reality.  Did you notice a major change in the way you felt from your “more money” fantasy to the present?  Probably.   While money and personal finance seem logical and mathematical, the external elements of the two are dictated by strong internal processes- emotions.

On one end of the spectrum is what we explored at the start- our dreams, and all the deliciousness they make us feel.  On the other end is fear.  Fear of loss.  Fear of success.  Fear of failure.  Fear of the unknown.  These dreams and fears shape our behavior, and the emotions associated with them directly influence our relationship with money.

So… In order to master our money we must face our fears and set goals to achieve our dreams. 

Go ahead and make a list of all your fears.  Not spiders and snakes, but fears related to money.  For instance, “I fear consumer debt” or “I fear not having enough money to cover my expenses”. 

Then identify what steps you can take to overcome that fear.

“I fear consumer debt” so  “I will cut up my credit cards”.

Or

“I fear consumer debt” so  “I will make all purchases with cash”.

“I fear not having enough to cover my expenses” so  “I will analyze my spending and see where I can cut back.”

Or

“I fear not having enough to cover my expenses” so “I will ask for a raise or find additional sources of income.”

By planning ahead while you’re in a logical frame of mind, you’ll reprogram yourself to feel confident with your cash rather than allowing emotions (like fear) take over.

Allow your newfound cash confidence to pervade your life.  Don’t let feelings of low self esteem lead you to spend cash on things to fill a void or for short term satisfaction. You can’t change your inside by buying things for the outside. Emotional spending can be expensive and destructive, pushing long-term dreams father away. 

Help yourself out by setting financial goals.  Write them down and be specific.  Some should be long term, big picture goals, like the dreams we identified at the start.  Others should be short term.  Look at them every day.  Keep them in your wallet next to your money.  Each time you open your wallet to take out cash or a credit card, your goals will be staring you in the face, reminding you to ask yourself “Is this purchase going to help me get the results I’m aiming for?” “Is this going to make me feel great in a way that improves my well being?”

By setting goals and changing the course of negative spending patterns, emotional spending becomes conscious spending.  And conscious spending is the key to mastering personal finance. 

GRATITUDE

I’ve been admittedly down the last few weeks.  Unemployment and unexpected expenses have made for a pretty bleak autumn thus far.  Wallowing has done nothing for me so I’m changing tactics and working on gratitude.  If you’ve ever read “The Secret” or heard of “The Law of Attraction” you’ve heard that the energies you put out are the ones that you attract.  Well I can definitely attest that wallowing begets more wallowing.  If instead I reflect on the things for which I am grateful, perhaps I’ll receive more to be grateful for.

            This blog is largely focused on a lack of money and ways to avoid unnecessary spending.  While it’s important to have a realistic understanding of where you stand financially, the mindset with which you approach the numbers should be one of appreciation 

for what you have, rather than contempt for what you don’t.  Whatever amount you have in your bank account, it’s an abundance to someone.  Instead of feeling like you’re barely getting by, give thanks that you can pay your rent, your heating bills, your grocery tab.  When you get a paycheck, instead of thinking, “I’m not making enough”, think, “I’m grateful that money is coming into my life and I’m open to receiving more”.  When you see change on the sidewalk, pick it up, enjoy it, and be grateful that money is flowing towards you.  By perpetuating a sense of abundance rather than lack, you’ll attract more prosperity.

            If you have a hard time thinking of your finances as abundant, look at other aspects of your life that are.  Give thanks for friends, family, work, hobbies, anything and everything.  By giving thanks and allowing for all forms of abundance, you’ll also be allowing more money to enter your life.

            Don’t worry; I haven’t gone completely new age on you.  I’m still a hard ass when it comes to needless spending and properly saving (stay tuned for next weeks blog).  But from time to time it’s important to take a moment, stop worrying or wallowing, and give thanks for what you have.    

SEASONAL SPENDING: HALLOWEEN EDITION

It’s that time of year again.

October through December is a three month long annual indulgence.  It starts with the Starbucks pumpkin spice lattes and lingers through the New Years Day hangover.  Columbus Day apple picking, Halloween, Thanksgiving, family reunions, holiday parties, vacation, secret Santa, Christmas, and finally New Years provide excuse after excuse for months of endless eating, partying, and spending.

  

If you’d like to make it to 2013, or even November without depleting your bank account, take a moment to put your seasonal expenditures in perspective.  Let’s just take on October for now.  

According to a new survey released by the National Retail Federation, Americans plan on spending an average of $79.82 on costumes, decorations, and candy this year (up from $72.31 last year).  And it’s the adults (not the kids) who are driving up the average! What?!

If you’re reading this, you’re probably full-grown adult- there is absolutely no reason on earth to be dropping the big bucks on Halloween crap.  This doesn’t mean no fun, no pumpkins, or no parties.  It just means avoiding Ricky’s, Party City, and the seasonal departments of Kmart, Wal-Mart, and Duane Reade till the end of the month.  The good news is, you can raid the stores on November 1^st for cheap candy and, if you must, clearance items for next year.  But dropping $50 to $100 on a costume you’re going to wear once is nonsensical if you’re someone who worries about making monthly rent payments. 

I intend to spend Halloween at home, cooking up some beautiful seasonal squashes and pumpkins from the farmers market and treating myself to home made dessert, hot cocoa, and TBS’ inevitable programming of "Hocus Pocus".  Won’t cost me more than any other Wednesday night.  But if you’re looking for a more rambunctious evening, here are some ideas to help keep your spending under control.

1.     Get creative.  Instead of rushing to the store for costumes and decorations, see what you can make from things you already have at home.  Use pinterest for inspiration. If there’s something you’re missing, consider thrifting first.

2.     Find out if your family members or friends have costumes you can borrow or trade.  GreenHalloween.org is a website that actually specializes in costume swaps. 

3.     If you know you’ll have trick-or-treaters, buy a bulk bag of candy from a discount or dollar store, you know you’ll want the leftovers to hold you over till Thanksgiving anyway.  If you’re afraid you’ll eat all the candy before the day arrives, buy something you don’t like so you won’t be tempted.

4.     If you tend to have an abundance of trick-or-treaters on Halloween, hand the candy out yourself.  One per person.  If they don’t like it, remind them they can trade with friends later.  Remember, there’s a childhood obesity epidemic, no full size candy bars.

5.     Instead of going out and spending at a club or bar, host a Halloween themed game night or an autumn pot luck.

Spending money on Halloween may be the definition of frivolous for adults without children.  While there is no room for frivolity in the broke life there is plenty of room for fun, creativity, imagination, and friendship to make it a beautiful holiday.

Shit Happens.

I went to get a loose crown checked out at the dentist this week.  It quickly turned into a $250 tooth extraction and sheer panic over the $1800 dental implant I would need to replace it.  Shit happens.  And when shit happens, you need to have an emergency fund in place to cover the cost.

An emergency fund is an easily accessible stash of money for “shit that happens”- or emergencies.  It’s NOT for taking a vacation or buying ANOTHER new phone.   It’s the money you live off of when you’ve been laid off unexpectedly, the money you use to fix the leak in your roof, the money for your medical bills when your teeth, your bones, or God forbid your heart give out on you.

The sad reality is that something unexpected and expensive is going to happen.  You are not immune.  So if you’re thinking, “I can’t afford to have an emergency fund”, start thinking, “I can’t afford not to”. It’s been shown that those who don’t have emergency funds are more likely to amass debt.  Start saving now before you find yourself in a hole you can never get out of.

Experts recommend setting aside anywhere from $1,000 to 9 months worth of living expenses for your emergency fund.  The suggestion that I would have an extra 9 months of living expenses just lying around is laughable to me as it probably is to all the broke and beautiful; so let me offer my suggestion.

Open a high yield savings account with an initial deposit of $1,000 to start.  If you don’t have $1,000, make it happen.  Look back at the post “What Do You Have To Offer?” for some ideas.  Now in my opinion $1,000 isn’t going to get you very far in an emergency, so once you’ve made the initial deposit, contribute weekly, bi weekly, or monthly to your emergency fund until you’ve built a nice cushion.

I have about three months of living expenses saved up.  In an ideal world, I’d have six.  After getting my teeth fixed, I’ll probably have one.  Time to prioritize the emergency fund.   I recommend your emergency fund contributions being your top priority after basic needs like housing, food, and transportation until you hit the three to six months of expenses mark.

If you have trouble saving, set up direct deposit to your emergency account.  If you like to spend impulsively, don’t get a card attached to the account.  While your emergency money needs to be accessible (not tied up in a retirement account or risked in investments), you don’t want it to be so readily available that you blow it all on the new iphone with one swipe of a credit card.

Now start saving- and be safe.  Shit will happen, but at least you’ll be prepared.

AFFORDABLE NYC HOUSING

Affordable housing in the New York City Metro Area.  What a contradiction.

The search for a place to live is never easy- regardless of whether you’re looking to buy, rent, or sublet.  But add to that being broke in one of the worlds most expensive cities and you’ve got a serious challenge.

Experts recommend spending about one third of your take home pay on your rent.  Unfortunately, while the city’s median household income has barely moved in the past ten years, the average apartment rent has climbed by 27%.  In July 2012, the average Manhattan apartment rented for $3,461.  That means you’d have to be making over $10,000 A MONTH (over six figures annually) to live there and be “living within your means”. Thirty percent of New Yorkers wind up spending over HALF their income on rent.  Don’t be in that thirty percent!  That’s money out of your savings, your emergency fund, and your retirement- places where you really can’t afford to cut corners.

So, do you sift through the endless crap, scams, and unpredictable roommates on craigslist or spend a fortune on a broker?  Do you splurge on a convenient studio or couchsurf from place to place? 

For the purposes of this post, let’s assume a down payment is nowhere in your immediate future and you’re not applying for subsidized housing (a possible future post).   

So “For Rent”. The rental market typically slows down in the winter months.  To get the most bang for your buck, consider waiting till the holidays.  The move may not be pleasant, but the savings will be worthwhile.

Now, let’s start with priority number one, location, location, location.

If you want to get real about saving money, get real about location.  With the exception of Washington Heights, Harlem, Inwood, and a few other northern extremities, Manhattan is not really in the picture for the broke and beautiful.  That being said, if you MUST stay on the island, look for something noisy or ugly.  A construction site (second avenue subway line anyone?), a tunnel entrance or exit, an above ground subway (excluding the high line)- yes, there are some quality of life considerations here, but if you’re willing to swap an eye sore for a commute, you can save a lot of money by renting in one of these kinds of locations.

Unfortunately, Manhattan is not the only pricey NYC area.  Apartments in Williamsburg and Hoboken give me sticker shock.  Look for the neighborhoods that aren’t incessantly written about in the paper.  Walk away from the street with the trendy restaurants and bookstores.  Even a block or two over can mean a major price difference.     

Once you settle on a neighborhood the easiest way to save money is to avoid a hefty brokers fee.  Look for homes with a “For Rent” sign in the window or for buildings with a rental office on site.   Negotiate directly with the landlord, bypass the middleman, and save the cash. 

The last time I moved I walked through the streets of my desired neighborhoods and wrote down the addresses and numbers for all the buildings with a “For Rent” sign.  Within two weeks I was in a spacious three bedroom for $1600/month!!! Needless to say, I wish I’d never have to move again. 

No luck spotting “For Rent” signs?  Check with the doormen/ front desk associates in some of the bigger buildings. They may be able to provide some insider info or direct you to the buildings’ leasing office.  Also keep an eye out for moving sales, moving trucks, or people dumping their odds and ends on the sidewalk.  Introduce yourself and ask if the landlord has found anyone to take over the lease.  Not only will they be able to give you a first hand account of living in the prospective apartment, but they might just let you take a look around.

The internet is another good place to start your search.  Notice I said “start your search” and not “complete your search”.  While there are so many resources and so much information regarding housing online, there are also so many scams and cons.  Do not wire or send money without ever having seen the apartment or spoken directly to the landlord.  If something sounds too good to be true, it probably is.  Spend some time getting a feel for the market so you can identify when something is a good deal and when something is a too good to be true scam.

The following is a list of websites and resources to help you get a feel for the market and get you started on your search.

Listings/ Classifieds

NY Times

NY Daily News

NY Press

AM New York

NY Post

Village Voice

New York Magazine

Websites/Resources

Craigslist

Pad Mapper

Street Easy

Naked Apartments

Urban Edge

Citirent

NY Habitat

Best of Luck!

GROCERY STORE SAVINGS!

The best way to save on food is to cook for yourself. Follow these tips to save cash and calories while you’re at the grocery store or market.

1.                     Know what you already have.   Before going to the grocery store take a quick inventory of your fridge and pantry.  You don’t want to wind up with 3 packages of expensive berries that spoil before you eat your way through them.

2.                     Make a list and stick to it. Making a list will help you stay focused on what you need (whole grains, fruits, and veggies) instead of what you impulsively want (a Snickers bar at the checkout counter). 

3.                     Shop on a full stomach.  Shopping when you're hungry can lead to poor decision making and overbuying.  Grab a snack before hitting the store.

4.                     Compare unit prices.  Just because one jar of peanut butter is twice the size of the one next to it doesn’t mean it’s a better value.  Always make price comparisons based on the unit price (the price per pound, per ounce, etc) of an item.  Consider bringing a pocket calculator with you and give yourself plenty of time.

5.                     Buy grains in bulk. You’ll find that the larger bags and bulk bins of brown rice generally have cheaper unit prices than the individual meal boxes.  Same goes for the majority of your grains- barley, oats, cereals, etc.  If you can find the space, buy in bulk and store your grains in air tight containers to keep them fresh.

6.                     Buy in season. When produce is in season, it’s both at its cheapest and its highest nutritional value.  Try to plan snacks and meals that revolve around what’s in season.

7.                     Shop the frozen food aisle.  Not the prepackaged, high sodium meals, but the bags of frozen produce.  For maximum health benefits and flavor choose organic fruits and veggies.  You’ll still save a ton by buying frozen.

8.                     Check out alternate sources of protein.  Beans and lentils are excellent and cheap sources of protein that can be bought in bulk and stored for long periods of time.  Try incorporating these powerhouse legumes into your meals on a regular basis to get major benefits while saving major bucks.

9.                     Choose generic.  When it comes to items that are of the same product quality, choose the generic over the more expensive name brand.

10.                 Buy whole foods.  Sometimes the less processed something is, the cheaper it is.  For example, an apple is often cheaper than apple sauce and dry beans are cheaper than their refried counterparts.  Double win for you! 

11.                 Shop the perimeter of the store first.  Fill your cart with nutrient dense produce, protein, grains, and dairy leaving less room for the processed junk food in the center of the store.

Buying locally grown, organic products is ideal, but it’s not always an option when finances are tight.  I would however, recommend investing more of your food and grocery budget in your produce.  You need to be eating the most nutrient rich fruits and vegetables that you can to maintain both your fitness and your health. 

Trader Joe’s offers great, organic produce at a reasonable rate.

-       Trader Joe’s Union Square

o   142 E 14^th Street

New York, NY 10003

-       Trader Joe’s Chelsea

o   675 6^th Avenue

New York, NY 10010

-       Trader Joe’s 72^nd & Broadway

o   2073 Broadway

New York, NY 10023

-       Trader Joe’s Brooklyn

o   130 Court Street

Brooklyn, NY 11201

-       Trader Joe’s Edgewater, NJ

o   715 River Rd

Edgewater, NJ 07020

-       Trader Joe’s Queens

o   9030 Metropolitan Avenue

Rego Park, NY 11374

Fairway Market is another place to find great prices with lots of organic options.

-       Fairway- Upper West Side

o   2127 Broadway (@74^th Street)

New York, NY 10023

-       Fairway- Upper East Side

o   240 East 86^th Street

New York, NY 10128

-       Fairway- Harlem

o   2328 12^th Avenue (@130^th Street)

New York, NY 10027

-       Fairway- Brooklyn

o   480-500 Van Brunt Street

Brooklyn, NY 11231

-       Fairway- Queens

o   242-02 61^st Avenue

Douglaston, Queens, NY 11362

New York is also home to a wealth of farmers markets.  Check out www.grownyc.org/ourmarkets for a complete listing of farmers markets around the five boroughs.  If you head to the farmers market in the last hour or two you may find vendors selling their remaining perishable items at a discount. 

Remember that how foods are grown has an impact on their quality and consequently on your health.  By buying organically grown foods you reduce the potential health hazards posed by pesticides, additives, and genetically modified food.  An investment in your food now could save you tons of money on your health bills later.

** This post is an excerpt from a book I'm in the process of writing.  Stay tuned for publishing info!

WHAT IS YOUR WHY?

As I fly home from Moscow and two weeks of thrilling whirlwind travels throughout Eastern Europe I fantasize about my next vacation.  Maybe something indulgent and relaxing.  An all-inclusive resort in Hawaii perhaps?  Just as I start to feel the sun on my face and the taste of frozen cocktails on my lips REALITY CHECK. 

I sigh and think someday.  Someday I will travel to exotic and foreign places, allowing myself the luxury of cabs to and from the airport, dining out without triple checking menu costs, staying at real hotels, frequenting the spas, maybe even first class flying.  Okay okay, I know I’m getting out of hand and I realize how lucky I am to have been where I have been and to have had the experiences I have had but hey, you’ve got to have a dream.  

Not just a career dream like being an astronaut or a movie star or a famous author, but a dream of a lifestyle which, let’s face it, only money can buy.  Something to work towards.

So what is it you’re working towards, saving towards, investing towards?  Not the reasons you HAVE to work, save, etc, but the reasons that get forgotten somewhere in the day to day struggle of just trying to get by?  What is the lifestyle you dream of living?  Apartment on Central Park west?  Fine dining every weekend?  Vacation home on the beach?  Sending three children to Ivy League Schools? Jet setting around the world?  Get crazy.   Think Big.  There’s got to be something more motivating you than, “To pay my credit card bill”, “To make rent”, or “To get my car fixed”.  Sure those things are necessary, but those reasons will make you work and save just enough.  If you want big financial success, start by having a big dream and a clear and defined “why”.

What’s your why?  It’s got to be something you want badly.  Something that will keep you going beyond your regular 9 to 5 and inspire you to seek greater financial gain.  Something that will make you save before you spend.  Something that will motivate you to get educated on investments so you can stop sitting on your cash and start watching it grow.

Really brainstorm and get specific.  Use all five senses to experience your why. Right now I see ocean and palm trees, I feel the sand between my toes, I hear the waves crashing on the shore, I taste the salty air, and I smell the warm ocean breeze.  Yes, in reality I’m sitting in economy on a ten hour flight, but this meditation on my dream lifestyle is what’s got me on my laptop blogging rather than plugging into another in flight movie.  The more tangible it is, the more I’m reminded of it, the more I seek to achieve it.