The Economy - Simplified

Here is how Suze Orman breaks down the economic issues & how they affect YOU.

Highlights:

• Financial expert Suze Orman says current situation was caused by greed
  
• Switching to a cash economy means buying only what you can afford now
  
• "Stop living the financial lies that you have been living," Orman says

What happened to the Stock Market:
"When you have stocks, you have individual companies that want to make money. And [CEOs] want to make more money because the more money they make, the more their compensation is, the more their stock price goes up." These companies made money by selling investments like mortgages to people who couldn't afford them, Suze says.

People & Debt:
"A lot of you have built your personal financial foundation on deceit and lies. You bought a home that you couldn't afford ... You spent money like it was going out of style and it wasn't your money to spend, because why? They were borrowing it"

What to do:
"If you don't have the money to pay for something, can you just not buy it? Can you wait? Can we start looking at keeping our cars for 10 years rather than getting a new one every three?" - NO MORE CREDIT CARDS OR LOANS

If you're 10 to 20 years away from retirement, Suze says there's no reason to panic. "As long as you are invested in good quality mutual funds, diversified across the board, as this all goes down, you're buying more shares," she says. "The more shares you buy, eventually, when it turns around ... the more money you'll make."

Financial Planning for Women

Over the past five years, the market has grown for financial advice directed specifically at women. Independent women are financial planners’ newest target.

But what makes women different? Elda Di Re, a partner in Ernst & Young’s Personal

Financial Services group says she thinks women, even if they work, often still imagine that a “white knight” with money will come and carry them away. In anticipation, “they worry about having the right kind of clothes, the right kind of shoes, the right handbag.” Women also live longer and are more likely to die alone, than men. And Ms. Di Re agrees with the idea that they find conventional financial planning advice unappealing.

Around 40% of the women who participated in a study released today by Allianz Life Insurance Company of North America said they found information on financial planning and investment either too complicated to understand or too boring to follow.

Solutions to this problem vary. Ms. Di Re says women should start paying more attention to their companies’ benefits. This goes for her own employees, too. “Every time I give out raises I ask: ‘Are you contributing to your 401(k)? Are you contributing as much as you can get matched?’ I am surprised by the answers.” She also recommends sitting down at least once a year and mapping out a balance sheet to figure out assets and liabilities, cash flow and net worth. Other financial planners have found women respond better to an entirely different format.

Ameriprise Financial tries to get women engaged by using fewer numbers and more emotional language. “It’s not just about finances,” says Elda Macias, director of market segment at Ameriprise. It’s about: “What do you want to do? What do you dream?” One tool Ameriprise uses is the “Dream Book,” a booklet given to women and couples containing questions like “If you could do anything, time and money aside, what would it be?”

“Men think about money like a river,” says Arika Larson, who runs a firm called Women Be Wise and helped Allianz with its focus on women. “It’s always flowing in their mind. Sometimes it’s just a trickle but they know the rains are going to come.” By contrast, Ms. Larson says, “Women think about money more like a lake. This is what I’ve got, this is how much I’ve got and if I give you some I’ll have less.”


**I've read finance books and I do not agree that women think some prince is coming to save them. Women think and feel differently about money in general. One big reason for women is that t scares some - all of the numbers/math/definitions of funds. They are worrying about other things like their kids & school. They will gladly give the finances over to a Husband if they can. However, some are completely different and have a firm grasp on finance. Suze Orman is one of the money masters and she says NO MATTER WHAT, if you have a husband who is a millionaire....the woman in the house should know exactly what the family finances are from the mortgage to the light bill. It is NOT OK to be in the dark about these type of things. I agree with Suze on that one for sure. ***

Great Quote

A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life."

--Suze Orman,
American finance expert

Ways to Save....

....on shampoo: Use the dog shampoo that is in the bathroom on the dog, not your shampoo on the dog.

$4.47

Today, I paid $4.47 for a gallon of gas. The highest price I've seen here so far is $4.88 for premium gas. This is sickening. I felt betrayed & violated pumping that gas.

Get used to high prices

Get used to high prices
The Fed has a mandate to keep inflation in check. But global forces and worries about the U.S. economy will keep prices high for the foreseeable future.

Half.Com & EBay

I recently listed all of my books on half.com. I realized they are just collecting dust. I either share them with someone else to read and those that I don't, I never read again. In the past two weeks, I sold 4 books and made about $20!

I also have bags of stuff to go to Goodwill but I had 2 really nice dresses that don't fit anymore. I sold those on Ebay, too.

If you are looking to get rid of crap in your house, list it online. People will buy it & you will get some of your money back!

Debt-squeezed Gen X saves little

Article about how Gen X is having a tough time paying & saving.

HERE is the article

Toilet. Where the economy is.

Fearing $5 gas, Americans cut back

As more Americans become resigned to the possibility of paying $5 for a gallon for gas, they are driving less and seriously considering chucking their gas guzzlers, according to a poll released Monday.

But the effects of high gas prices go beyond driving habits. The poll also shows that 55% of respondents are cutting back significantly on household spending.

How is the economy affecting you? Are you cutting back? Pumping gas for $4.23 a gallon freaks me out. I freaked out that asparagus cost us $6 and the bread we like is $4. Fish is about $20/lb We have not eaten out in a few weeks. The economy is scary and it is making me want to horde my pennies! I'm glad we can take the bus to work so we do not have to pay a lot for gas.

Smarty Pig

www.smartypig.com

Have you heard of Smarty Pig? It is basically a savings account that has about 3.9% interest comparable to ING. However, you can make your account public and have your friends & family contribute to it. For instance, say you were having a baby, you could make an account for baby stuff or something.

Erik and I are going to start one so we can buy new couches. Something tells me we won't be making it public though for people to contribute. I should start one for people to contribute to Evie's camp tuition. Now that is an expense! Oink.