Tuesday, September 9, 2008

The Young Woman's Financial Planning Guide: Part 4

The Urban Girl on a Budget: Why Shoes are Not a Sound Investment

When the HBO series “Sex and the City” debuted, it became wildly popular amongst young women. Witty and relatable, the show offers beautiful clothing, romance and the allure of the urban lifestyle. And yet, the show lacks in one crucial respect: reality. Though watching Carrie traipse through the city in high-end couture may be a glamorous scene to behold, chances are that a columnist at a modest publication would not be able to afford such extravagances.

If you're a young woman who craves a metropolitan lifestyle, err on the side of thrift. Here are a few tips for staying fabulous while being frugal:

1) Responsible Money Management: According to the JumpStart Coalition for Personal Financial Literacy, “many young people fail in the management of their first consumer credit experience [and] establish bad financial management habits.” Such resources as “The Teen Girl’s Gotta-Have-It Guide to Money” by Jessica Blatt can help guide you in constructing a monthly money plan to track your finances. You can also visit WISER's website for fact sheets on how to start saving. Such tools can be instrumental in teaching you responsible budgeting that will help you avoid high-risk financial situations and start investing in your future.

2) Leave the credit card at home! In one particular episode of “Sex and the City” we watch Carrie realize that, despite amassing $40,000 in Manolo Blahniks, she has no assets or savings to assist her in placing a down payment on her apartment. In order to avoid this, be careful with your credit. According to a study by Qvisory, three out of four Americans under 35 are in as much or more credit-card debt this year as last and only half are making their minimum monthly payments. So before you splurge on those gorgeous shoes , think about how it may affect your future livelihood.

3) Be Smart About Housing: Metropolitan areas are infamous for their high housing costs. According to the Fiscal Policy Institute, New York City housing costs have jumped 106.4% since 1987 and a two bedroom can run for nearly $2500 per month. Try to find an apartment yourself, without the help of a broker. For some this may seem like a convenient service, but brokers in major cities may charge clients the equivalent of one month's rent to help them find an apartment. When you're searching, think about living with a roommate, which can slash your monthly rent in half. But make sure that you both are able to pay your rent on time every month. Carrie may have been able to enjoy the solitude of her own place in TV-land, but real life requires smarter choices.


Erika with Qvisory said...

I'm glad you're bringing the idea that the extravagant lifestyles we see on TV are fun to look at but unrealistic to pursue.

I watched SATC during high school and was amazed to discover out in the real world that I had absolutely no idea how the women in that show were able to buy so many brunches!

The tips you've laid out here are very smart. I think it's great if you want to buy yourself something every once in awhile, but it's crucial to think of the long-term effects of your decisions in every situation.

Megan said...

Being smart about your finances is certainly the best route to take. But, like you said, it's okay to splurge in moderation.

To help these splurges go a long way, discount shopping is your best best. Such websites as bluefly.com and overstock.com offer designer duds at discounted prices. You can find similar deals at Filene's Basement locations.

Finding the perfect evening bag or pair of shoes can be exciting...just make sure you factor these purchases into your monthly budget!