Finance 101: Coping in a Tight Economic Market

Unfortunately, we've all been watching the news and have heard of the current (and growing) financial crisis taking place on Wall St.. I'm not one to typically give financial advice, but I've been reading some articles, and thought I should set up a sound economic plan for myself (with the help of my financial planner). So, I thought I'd share. Attached are just a few random tips. Add to these as you wish.

  1. Don't skimp on your 401k - think LONG-TERM. Maybe you want to reallocate your portfolio, but do not skimp on your future. "...history shows that some of the best long-term gains go to investors willing to buy stocks when they’re reviled, as in the years following major setbacks like the 1929 crash and the 1973-1974 bear market." [CNN]
  2. Think of new and creative ways to cut back.
  • Try shopping at your local farmer's market as opposed to eating out - buy only the essentials, don't overdo it in the grocery store.
  • Pack your own lunch. To escape the office go for a walk during the day.
  • Drink TAP, studies are finding that drinking from a water bottle may actually be more harmful than drinking right from your tap. Takes a little adjusting, but the savings are worth it.
  • Take public transportation instead of driving your vehicle.
  • Cut back on brand names (generic acetaminophen is the same as Tylenol, lol). And Payless is not the devil, unless you're in those shoes for more than 4 hours, then it's hell.
  • Stop smoking!!! That $5 a day habit + future medical expenses will save you a fortune.
  • Give yourself a budget each week and take out exactly that much in cash - when you run out you are DONE. Do not allow yourself to use plastic - it's just TOO easy.
3. Find a side hustle. Maybe you DJ, promote parties, or just love expressing yourself in artistic ways - do what works for you. Be creative.

4. Stash away that emergency savings (3-6 months living expenses). You never know if your company may be undergoing layoffs as a result of this declining market. Never get too comfortable. Savings should be a minimum of 10% of your income (in addition to your retirement savings).

5. In the event of number four, make sure that your resume is up to date and that you are keeping your skills current. Be ahead of the competition!

6. I know this is a tough one ladies - but try doing your own hair a couple times/month. We all know how expensive the salon can be. However, maybe you can at least discover a Dominican salon - good deals.

7. Get rid of that gym membership and hit the pavement. Cardio is cardio.

Here are a few that are slightly more controversial:
  1. Do not loan money to friends OR family unless you can afford to NEVER see it again.
  2. Do not pick up the tab when dining with friends. If they can't afford it, leave them at home. Oh, and please avoid that drunken "Round of shots on me" scene by leaving your plastic at the crib.
  3. If you can't afford the vacation/tv/computer in cash, then now is not the time to be jet-setting or stunting in Best Buy. Sorry boo. Got to get our money tight and get it right.
Peace, love, and prosperity buppies.

P.S. - I really want to start this savings strategy AFTER I buy a new LCD monitor for my computer. Lord show me the way.


RiPPa September 24, 2008 at 12:08 AM  

I think the gov't should bail out its citizens in the samw way they've done the banking industry.

They should make selling dope legal, and exusive to just private citizens. Not the best option right now, but if it were legal?

Lets just say the sistas would't have to worry about walking around with nappy hair or having to do it themselves.

Great Post!

Good tips!!!

T September 24, 2008 at 8:03 AM  

Excellent ideas. I have natural hair, so number 6 is a must anyway. I save hundreds of dollars a month on hair care.

You're definitely trippin' on #7 though. I live in Chicago and I will not be running in the freezing cold. No ma'am, I will hit the elliptical, a pilates or aerobics class at my local gym though. (My company subsidizes my gym membership though, so I only pay about $12 out of pocket per month).

We should that to the list, work at a company with money-saving fringe benefits.

Keli September 24, 2008 at 8:49 AM  

I have already cut back so much...I live like a student...no cable tv...actually, it cost more for me to prepare meals than to eat out...I spent $40 in the grocery store just to make grilled chicken salad...I guess I did not need the almonds and goat cheese...still...

I too have natural hair...so not much to cut there...

I no longer have a gym membership...I work out in my apartment complex...I live in Texas, public transportation sucks...and everything is way too spread out...

I still drive my 2000 Toyota Corolla (although a VW Passat is calling my name)...

I don't know how many more corners I can cut.

brightstarr September 24, 2008 at 11:13 AM  

I have natural hair as well T, so I'm with you on the savings, it's a LOVELY thing. Btw, I'm doing a hair-care product review soon, stay tuned.

And Keli, it sounds like you're doing GREAT. I cannot cut out cable!

uglyblackjohn September 24, 2008 at 6:58 PM  

Number six might be a problem for some ladies.
After the recent hurricane, many women went two to three weeks without a good perm.
(Dirty kitchens in more ways than one)
Some who tried to do it themselves had burn marks on their foreheads.
Maybe number six should be LEARN to do one's own hair.

dclawchic September 25, 2008 at 6:32 AM  

The last line of this is a TRIP! The PS part! lol
Great post!

MP September 26, 2008 at 6:57 AM  

excellent post... I got brave about 3 weeks ago and relaxed my own hair with the help of my mother. It saved me from having to spend $70 at the salon and it looked damn good if I do say so myself.

And I made the BF get a side hustle- bartending. So no I have extra income... LMAO!

PhlyyGirl September 26, 2008 at 6:36 PM  

Excellent ideas!!
LOL@ you kicking your strategy into gear AFTER that one last splurge, but I ain't even mad at you though. LOL

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