Designer Baggage

Dear Bag Lady,

There are two things on earth that most women just can’t seem to do without: a sassy designer bag and a fabulous pair of shoes. Oh sure, trendy clothes and jewelry are also high up on the list of wardrobe “necessities”, but there is just something about rocking a piece of exclusive arm-candy coupled with a mean shoe game that will make a woman feel like she’s living on top of the world. Fortunately, stand-out shoes are a little easier (and often a lot less expensive) to come by. But the availability and affordability of a distinguished designer bag makes these must-have accessories so much more desirable.

So what’s in a bag? What would make a woman spend hundreds- if not thousands- of dollars on a piece of canvas or leather? More often than not, most women are willing to go for broke for a haute handbag. Huh? Have they no hope for the future? Don’t they know the importance of investing in appreciable assets (stocks, real estate, etc.) versus depreciating assets (ie., handbags and other apparel items)? Ok, I know that some women can honestly plead ignorance (they never had any positive financial role models to follow). Yeah, yeah, yeah. I get that . But at some point, one must realize that one has a future that will likely extend beyond the cuteness of today. Why would a young lady save up several paychecks for a Louis Vuitton, and not save a dime towards her own place to live? In my experience, there is only one explanation: pride.

The Entitlement of Pride

“I work hard for my money and I earn a good living. I should be able to buy whatever I want whenever I want it.” Sound familiar? Far too often, many women buy into the notion that having a big, bad bag draped over their shoulder is a sign of accomplishment. They’re “in control” of their life. They have “arrived” in the world. It’s a status symbol. They “deserve” it. Don’t misunderstand me- there’s nothing wrong with wanting nice things and working hard for them. There is, however, something incredibly insane about spending a paycheck or two on any luxury item, but having neither an adequate savings account nor an appropriate retirement and/or education fund. Let’s not even mention how many of these purchases are made with credit cards. You should be using that money to pay down your debt, instead of increasing it! But nooooo, you’d rather go further in the hole just to give others the impression you’re not broke. Living paycheck to paycheck but rocking a Gucci bag is not cute… it’s crazy. :-/

The Insecurity of Pride

Our society is so inundated with Hollywood glamour and the lure of logo-laiden apparel it appears to disqualify those of us who are not as concerned about keeping up with the Joneses (or the Kardashians, for that matter). At a very young age, most children learn to value brand named merchandise over generic goods. One is made to feel “less than” if one doesn’t buy into the designer label craze. So, we spend money we don’t have, to buy things we don’t need, just to impress people we don’t even like or know. All in the name of popularity. Some hide behind designer labels just to fit in. Men and women alike go out of their way to sport the latest fashions solely to be accepted by their peers. Too often, we clothe our selves in Couture simply to mask our own insecurity and dissatisfaction for who we are, what we are, and where we are in life.

Unpack Your Bags!

What designer baggage are you lugging around? Maybe it’s not a pretty pocketbook or even a snazzy pair of shoes. Maybe you suffer from some other unhealthy passion for fashion or a bad case of the “gotta have its” for gadgets. Whatever the case, take inventory of the contents: mounting credit card debt? no cash reserve? no retirement fund? robbing Peter to pay Paul? Robbing God to pay Peter? You will incur astronomical spiritual, financial and emotional damage for all this excess baggage. Girlfriend, you have to get it together! Chances are, you’re bankrupting your financial future by living only for today. Will you be willing to live out of your bags when you’re old and gray with no ability to retire? Entitlement is a heavy load to carry. And the more you give into it, the heavier it gets. Insecurity is just as bad. Insecurity begets itself. You have to constantly cover up your shame in order to function publicly. How unfortunate it is to weigh yourself down in an attempt to lift yourself up.

Again, there is nothing wrong with wanting nice things. But buying things with borrowed/stolen money (via credit cards, “bill money”,  robbing God of the tithe, etc.) or money that could be used to create financial stability- well, that’s just designer dysfunction. It’s also false advertising. What would you look like and how fabulous would you be (spiritually, financially and emotionally) if you weren’t afraid to reveal the woman hiding beneath the weight of entitlement and insecurity? The heavier your load, the easier it is to fall. And trust me when I tell you, it’s pretty hard to get back up once you’re anchored in pride. So, the next time you feel the need to splurge on yourself, carefully consider your money and your motives. Get to the bottom of your baggage. Check that heavy load at the altar, unpack the contents, and leave it all right there. Better to walk away from that emotional designer baggage with your head held high than to suffocate inside the pretty pouch of pride. You deserve some breathing room.

Practically Yours,

~The Practical Chick

Savings Survival Guide

Dear Financially Famished,

A lack of cash in your savings account can lead to a decline in your overall financial health. Not good. Here’s some more food for thought…

Studies show that the average American only saves 2-5% of their gross annual salary. For an individual earning $40,000/year, this equates to an annual savings of just $800-$2,000. That’s pretty pathetic. What will you do if you’re laid off (which isn’t too unlikely in this economy)? What if the car breaks down? What if you have sudden, unexpected medical expenses? What will you do when you have no emergency fund to fund your emergencies? Oh, let me guess- you’ll go into debt.

Genesis 41:1-36 is an excellent illustration of the importance of saving. Joseph interpreted Pharoah’s dream as a foreshadowing of famine. He instructed Pharaoh to save 20% of all the grain during Egypt’s 7 years of abundance so they would survive the impending 7 years of famine. What a novel idea! Imagine how much more peace you would have in your life if you used your years of abundance to prepare for life’s imminent emergencies. NEWSFLASH: We will all experience  droughts in our life every now and then. Will you be prepared or will you panic under pressure? You must start living beneath your means if you want to get your head above water. Proverbs 27:12 says,

A sensible man watches for problems ahead and prepares to meet them. The simpleton never looks, and suffers the consequences.”

Which one are you?

Six to nine months worth of your expenses is a very nice cushion to have in your cash reserves. The best way to build this emergency fund is by saving a percentage of your gross income- ideally, 10%. If you can’t start there, try saving 5% of your gross paycheck, and work your way up. Start somewhere or you’ll go nowhere.

Here are some other practical tips for building your cash reserves:

1. Don‘t wait until all your debt is paid off before you start saving money. Yes, you will one day be debt free, but you also won’t have a cash reserve. So, what will you do when you have another emergency? Yep, you guessed it- you’ll go right back into debt. Break that cycle of bondage and start saving money today!

2. Save systematically. Begin saving a specific percentage of each paycheck and do this automatically (either through direct deposit from your paycheck or via systematic withdrawal from your checking account on each payday). Small pills are much easier to swallow. Before you know it, you’ll have a chest of medicine to treat your famished finances when times get hard.

3. Cash is king! Cash reserves should be just that- cash reserves! Stocks, mutual funds, annuities, IRA’s, employer-sponsored retirement plans, etc., are not savings vehicles; they’re investments/investment vehicles. You must save in a liquid, readily available account that is not taxed/penalized when funds are withdrawn. Credit cards, home equity loans/lines of credit, payday loans, personal loans, student loan refunds, etc., are not cash reserves either; they’re debt instruments. Your savings account must earn you interest, not charge you interest!

4. Save for feast and famine! Save for emergencies as well as the stuff you have feasted your eyes upon: a house, car, vacation, wedding, etc. These funds should be held in a separate savings account so you don’t exhaust your cash reserves when you’re ready to make your purchase. Yes, you must plan ahead for these expenses as well!

For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing begin to mock him, saying, This man began to build and was not able to finish.” (Luke 14:28-30)

5. Set a goal, stick to it, and monitor your progress. How much would you like to have in your savings account by this time next year? Now break that goal into quarterly goals and monitor your progress along the way. If you find yourself getting off track, you’ll be able to make adjustments in your spending before things get out of hand. And by all means, write it down! You are much more likely to reach a goal if you simply write it down. Write the vision and make it plain!

A well-fed savings account will create a storehouse of resources to help you survive life’s emergencies. Follow the steps outlined above and you’ll be well on your way towards financial fitness. Here’s the bottom line: if you don’t save for your future, you’ll bankrupt your future. Time for your dollars to start making sense.

Practically Yours,

~The Practical Chick