Money Talks (Spenders)

See? I told you the finance posts were coming. You just had to be a little patient. But before we get into your pocket, here's a quick political update: In a surprising turn of events, Hilary Clinton won the New Hampshire primary for the Democrats. As mentioned in the previous post, Barack Obama was on track to win New Hampshire with a substantial lead. However, the turnaround came when the former first lady got all choked up and glass-eyed in a New Hampshire diner after a supporter asked her a question. (For further information on Hil's theatrics, check out: http://www.cnn.com/2008/POLITICS/01/07/clinton.emotional/index.html?iref=newssearch#cnnSTCText) For the Republican readers, John McCain won in New Hampshire, with Mitt Romney in 2nd place, and Iowa winner Mike Huckabee coming in last place. All eyes now turn to the primaries in two key states, Nevada and S. Carolina.

The other topic that has dominated the media and will continue to do so over the coming months (especially as the elections get closer and Bush prepares to leave office) is the U.S. economy. Whenever we watch the news or read the newspaper, there is always a colorful arrangement of articles and commentaries about the flailing U.S. economy. The housing slump, the struggling credit market, imminent inflation, and the list of financial woes goes on and on. However, before I tackle what's going on in the overall economy, let's talk about YOU and YOUR money. I'm not going to warm you up to it, we're going to just jump right in. Why? The reason is simple: You need a little shocker to get your dollars and cents in order.

Today, I'm going to talk to the spenders. Yep, those of you who HAVE to be the flyest thing since Blackberries and Sidekicks. We're going to do a simple exercise. My dad used to do it with me when I got my first job (and actually still does). Grab a pen/pencil and a sheet of paper. It's not going to take long, I promise. To start, I want you to ask yourself a very simple question: How much money do I have right now? Let's keep it basic, so include just your checking account (no savings or investment accounts because they earn interest/returns). I want to use your best judgment and common sense here. If your checking balance is slightly inflated because of the Christmas money you received from Grandma Louise or sweet Aunt Patty, deduct the total amount of the gifts so that it's only YOUR hard-earned cash we're working with. DO NOT include credit cards. Why? Because IT ISN'T YOUR MONEY!! When you get the amount, write it at the top of the page. Now for you spenders with a steady job (if you dont have one, you shouldn't be able to spend anyway), I want you to take the average amount of your NET paycheck (meaning after taxes and bills) for 2007 and multiply it by 52 (if you got paid every week), 26 (if every other week), or 24 (if semi-monthly). Once you have the number, write it underneath the first amount. Then subtract the second number from the first. Yes, it's probably a negative number. The reason is that's all the money you DON'T have! I want you to circle that number. If for some of you that number is relatively small, congrats. For the rest of you, if you look at that number and all of a sudden, you feel uncomfortable, we've got some work to do. Tomorrow I'll have an example that will help you change the way you think about spending all that money.