Young, Fabulous, & Broke.

If you find yourself often complaining about the state of your finances, I have just the book for you!  Suze Orman is my absolute HERO!  Homegirl didn't just start with nothing and work her way into a sizable fortune, but she started in the negatives. She was in over her head in debt and she fought her way out with some basic money principles she now writes about as a career.

The Money Book for the Young, Fabulous, and Broke is by far my favorite of the 5 or so finance books I've tackled thus far in 2009.  The situation of being 20-something is unique.  While I appreciated the advice in 'Rich Dad, Poor Dad' and 'Rich Dad's Guide to Getting Rich', you have to have money to take on investments such as real estate endeavors.  I'm still a few years from having the stash of cash it would take to embark on such financial adventures as his.

Money is tough in your 20s, especially for those of us in this phase now during the economic crisis our nation is facing.  What I love about Suze is that she gets excited about this phase because we have the distinct advantage of having what most people do not when they decide they want to master their finances - we have time!  Time to fix past mistakes, time to catch up, time to get ahead, and time to conquer.

Ask some of my closest friends (Mer, Alyssa, Candy, etc) and they will tell you that I've clawed my way to getting ahead and pushed them to do the same.  It is HARD to get ahead these days.  For those of us living in expensive places like Florida, it's that much more complicated.  It's not without sympathy that I've pushed them and they me.  Going without to get ahead is not what any of us want to do....but in the end it will allow us to meet long term goals and 'get what we want' when we can afford it.

So here's a few little tidbits for the night.  First, saving in your 20s is a novel idea.  How many of your 20-something friends even have a savings account?  The answer would probably scare you.  So, if you're not on some sort of saving plan then here's your challenge.  Start saving $100 bucks a month.  Even if this means finding some small extra way to make income.  If you do, after 3 years you'll have saved $3,831.  If you continued this for 10 years you would have saved $14,774!  Now thats what I call progress. So get real with yourself, you can do it.

My other food-for-thought or more of a problem solving thought when it comes to finances comes from a question someone asked Suze that she addressed in her book.  The question reads, ' I am finally making a decent sum of money, but I still have nothing left at the end of the month after paying all my bills'.

Ah ha! So, I'm not alone.  Or wasn't, when this was me a few months ago.  Making more money than ever and still having bare bones in my bank account come end of the month.  Vicious cycle.  If this category includes you here's some advice from the Suz... (page 161 if you buy the book).

You are spending money that you don't even have to impress people you do not even know or like.  It is such a colossal mistake.  When you waste money simply because it's easier to do so, or because you feel you're entitle to it, that is just plain stupid.  And don't feed me that crap that you only live once and you deserve to have fun while you're young.  Hey, there is a ton of fun to be had later, too - when you can afford it!  If you don't make the right choices now, you are going to be so broke when you are older that you will be absolutely miserable.  Look, I'm not going to tell you what you can live without.  you're looking to pare back, not cut out....

If you're having trouble deciding what is good spending and what is bad spending, I ask you to head over to your bedroom closet. Open it up.  Any item you have not worn or used in one year, or that still has its price tag on or is sitting in it's original packaging, is to be placed in the center of your living room.  While you're at it, check under the bed, in the garage, and in your bathroom.  Take out all your unused or hardly used cosmetics, video games, and any sports gear you haven't touch in eons.  Get it all in one big pile.

...when you say you don't know where the money went, a lot of it is sitting unused in your closets.

Guilty as charged.  Any one else squirming in their desk chairs?  My clothes, shoes, and handbags take up not only my room and hall storage but the vast majority of the guest bedroom at the moment.  The money I haven't been saving in the last 23 years can be accounted for with the Carrie Bradshaw quote from 'Sex and the City' - 'I like my money where I can see it, in my closet'.  But, I have to agree with Suze on this one - if I'm not wearing it or using it, it's got to go.

She goes on to recommend that you either Ebay or craigslist these items.  I'll go one further and say that I'm a HUGE advocate of consignment.  I worked at a consignment shop (if you live in Indy visit Carmel Consignment on N Meredian) and not only was it a fabulous job but it taught me how to recycle my designer duds.  While you don't get out of them what you put into them, the payback is considerably better than donating them - and can give you money to put towards newer things you WILL wear, carry, or walk in.

It's not the right path for all of your unwanteds as they are pickier than goodwill or craigslisters BUT if you have a fetish for the fancy like I do, it's a good way to recoup some of your money.

In fact, I've got a place I take to regularly and I've been working on my next laundry basket full of items to take in the next week or so.

Good-luck loves!

B