The Money Diet

The recession is officially over. Unemployment is a lagging indicator of tough economic times. Things are getting better out there, but recovery will be slow.

Really?

These are just a few things I hear in the daily buzz of news and casual chit chat. Things I think about as I file my weekly unemployment claim, speak with recruiters, search the job boards, network and update my spreadsheet log accordingly. Are things really getting better? When you’re unemployed those statements are a little hard to digest.

I attended a professional networking event a few days ago and shook hands and rubbed shoulders with hundreds and hundreds of others out of work just like me. Yep, we’re (Still? Still!) in a recession and yet just a few blocks away from our gathering a new, uber-luxurious shopping complex just opened its doors, giving our longstanding (fabulous) mall a run for its money (no pun intended). OH, the irony.

I bet most of us have felt the effects of our weak economy in one way or another (and if you’ve been unscathed, well, more power to you I suppose). I’ve definitely felt it and witnessed it around me. I’ve had friends out of work for months after layoffs before finding other jobs. Friends who are employed but business is so slow they feel unemployed. I checked a 401(k) balance a few months ago and wished I hadn’t. My property tax postcard arrived in the mail and my home value was several percentage points lower than last time. My hair colorist spotted a regular client buying boxed hair color in a drugstore and when their eyes met the client was horribly embarrassed. And, sadly, a friend’s condo went into foreclosure earlier this year.

Even job pay rates are less now. Employers know they can get good talent for less than they used to given the high number of job seekers out there. I spoke with a recruiter about my recent job history and told her the rate I was paid for a contract gig a few years ago. We shared a mutual chuckle: “…yep, that rate is SOOOO 2006.”

So while I’ve been out of work it’s been a good time to sit down and re-evaluate my spending. Hence, THE MONEY DIET. Frugality is the new Black! [Where did I ever hear/read that - I love it.]

Let’s face it: I love to shop and as I’ve mentioned before a lot of my “fun” spending goes towards accessories (shoes, handbags, sunglasses, etc). And I’ve always justified purchases by making sure they fill two big requirements: 1) Practical and 2) Paid For.

Practical simply means that it’s got to work with multiple outfits (with very rare exceptions, such as cocktail/evening wear). Most of my shoes and handbags are either black or dark brown and go with nearly all of my clothing. I invest in great boots because I can wear them three seasons of the year here (and, on the flip side, I skimp on shorts and t-shirts). Awhile back I upgraded my college-staple outerwear with two amazing 100% camel hair coats (a classic pea coat and a full length topper) that combined cost far more than my rent at the time (faint!). But over 15 years later, they still hang proud in my coat closet and have held up amazingly well! I also stock up on cashmere sweaters when they go on sale off-season. Lightweight knits work across the seasons here too. I dropped 4 figures on a gorgeous watch when I celebrated a major birthday. But I wear it every single day....and the same with a ring I splurged on 10 years ago in St. Thomas. If you're going to drop serious cash on something, wear it and use it! I've never understood things like, "Oh my God, I just spent $1500 on a new purse and I'm too scared to carry it!" Yes, I have read things like that. My advice? Return it!

Paid For means just that: pay cash, or if paying by credit card pay it off before the interest charge kicks in. As a result, I’ve got one hard-working debit card!

But when the dollars aren’t rolling in like they used to, it’s time to get real and cut way back on spending. And when push comes to shove, even if something is purchased with cash instead of on credit, it’s still money gone from the checking account. I don’t NEED another pair of black boots as much as I salivate over what I see in stores and in catalogues. I don’t NEED to spend $30 on department store mascara when a $10 one from the drugstore will likely be just as great. I don’t NEED to spend excessive amounts on shampoos or conditioners either (yes, this is another admitted weakness I am battling). Hell, once the makeup’s on your face and the conditioner is rinsed out of your hair, no one – I guarantee – is going to come up and say, “Oh my God…you must be wearing Chanel mascara, and that Kerastase conditioner makes your hair so shiny!” Nope! They’ll simply notice (hopefully), nice looking makeup and hair.

So, yes, I’m on a Money Diet. I’m re-evaluating everything and figuring out ways to cut back while not depriving myself of things I enjoy. Food? The term “Brand Down” popped up on a blog post a few days ago, which I’d never heard of. This means to check out the generic or store brand versions of food to save a little. Going out to eat? This is an absolute joy to me and I couldn’t possibly imagine cutting it 100% out of my life. I now have fun finding places with great happy hour and keep it to just one drink. That’s probably a good thing anyway. And happy hour food is a wonderful light dinner! I canceled my membership in a monthly Wine Club and will save myself hundreds of dollars a year as a result. When cleaning out closets (another productive activity while out of work) I found a few nicer things to put on consignment. Presto - a few hundred bucks in commissions a few weeks later!

I plowed through a large stack of snail mail last week and discovered a thick, elegant and glossy invitation from that new luxurious shopping complex I mentioned earlier: “We are pleased to announce the opening of our new boutique at _____." Well, boutique, I am pleased to announce I may grace you with my presence but I will be looking and drooling, not purchasing.

I'm on a Money Diet, after all.