Archive for the ‘Articles’ Category

The title of this post doesn’t refer to me (the thrill of personal finance? Gone? Nonsense!), but to the recently-published New York Times article on the fate of “orphan” blogs left by their owners.

I actually have “orphaned” several blogs. Some of them I don’t even remember the addresses – I had one at angelfire.com and another one at geocities.com and another one at scribble.nu (which doesn’t exist anymore). I also have a brief, public blog at livejournal.com. But eventually, after a couple of months, I left every one of those blogs orphans of the blogosphere!

When I first started Well-Heeled, it was conceived as a blog devoted to lifestyle, fashion, decor issues. My first post (long edited away) had pictures of an Anthropologie dress, that, at $400+, I had no business owning. Then I started reading now-defunct blogs such as FreeTheCow, NYCMoney, and Laws of Finance (anyone remember them?), and I thought it was really cool that people are taking charge of their financial lives, and writing for the world to see. It was as if I’ve suddenly developed a taste for something that I not only find interesting, but is also GOOD for me (loving personal finance is like loving brussel sprouts?).

What has helped me continue blogging at Well-Heeled is 1. a genuine interest in my topic (and the fact that I can still write about decor and shopping and everything else, after all, the trademark of a personal finance blogger is that one can write about money and, well, anything!) and 2. all the reader feedback I get. If I haven’t gotten any comments, I probably wouldn’t have continued blogging for as long as I have. I expect that at some point I’ll stop blogging, but for now, I can’t imagine when!


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Are you a transumer? Don’t worry, this is the first time I’ve heard of the term. “Transumer” refers to a “consumer in transit”, and apparently, more and more people are joining the transformation.

MP Dunleavey wrote an interesting post on MSN Money (an aside – I would love to write for MSN Money. Just, um, throwing that out there if any MSN Money folks are reading! 😉 ) on the ownership model vs. the “transumerism” model.

ABC News also had an interview on the subject (it’s a 6 minute video – worth watching).

From MP’s article:

The transumer philosophy is largely based on a “leasing lifestyle,” according to an analysis by Trendwatching.com, a global trend-spotting company based in the Netherlands. Rather than spending your money on individual things, which you then have to keep (suddenly an old-fashioned idea), you purchase access to an array of objects and experiences. It can save time as well as cash: The more you own, the more you have to worry about, maintain and upgrade.

I’m of two minds on this trend. There are some things that I rent, but others – I want to own!

Car: I definitely love owning my car – it’s paid off, it’s mine. I don’t have to worry about going over the mileage limit, or getting out of my lease if I have to move, or fixing the small dent on the side of my door.

Housing: At the same time, I love renting right now. I am not ready to assume hundreds of thousands of dollars worth of debt at this point in my life, so I will happily rent until I am financially and emotionally ready for the responsibilities of home ownership.

Purses: As for a bag – while I admire the ingenuity of companies such as Bag, Borrow, or Steal, I have to say that I would get more enjoyment out of a bag that I OWN, as opposed to one that is only mine for a week or two. I’d rather save my money and splurge on one bag that I know I will love (and have for years), rather than have to give back my bag at the end of the weekend.

Books/Movies: I like borrowing books and movies. But the books and movies that I really love? I want to own.

Another thing I realized is that in the ABC interview, there is a lot of emphasis on “not giving up your lifestyle, but living on a budget.” Is it just me, or does this sound an awful a lot like the monthly mentality? Just because you can “afford” to make a payment of XYZ every month doesn’t mean that it’s a wise financial decision.

What do you think of this trend? Are you a transumer?

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Frugality is the new trendy?

Reading articles on declining consumer spending and increasing saving rates (and watching new words such recessionista, frugalista, and cheap-chic enter the lexicon) has made me wonder: has frugality gotten too trendy? And, will it stick?

Frugality isn’t an issue I write on, because I’ve never claimed to be frugal – I try to save and invest, yes, but I certainly have my moments. Exhibit A: $200 worth of wool gabardine from J.Crew today (if you follow me on Twitter, you would’ve seen step-by-step how the consumer pummeled the pf blogger in me.)

As an example of some recent coverage of the new return to thrift, Friday’s New York Times article is titled: “In an Age of Austerity, the Miserly Thrive

I cringed a little at the word “miserly”. A miserly person is someone who’s cheapness is inconsiderate and inconvenient to others. Miserliness is not a quality to aspire to in any economic situation. But I see how the title “In an Age of Austerity, the Financially Responsible Thrive” might not have the same ring to it.

Then NYT used this example of an enterprising nurse who took home a duvet off the street.

“My behavior has become less strange and more of a resource,” said Katy Wolk-Stanley, 41, a nurse in Portland, Ore. A practicing penny-pincher for the last decade, she is now spreading her gospel. Last May, she started a blog with tips and tactics for cutting back called The Non-Consumer Advocate.

She knows whereof she blogs. She darns socks, dries clothes on a line she recently hung inside her house (even though it takes a few days for the clothes to dry inside), washes and reuses plastic bags and takes used clothes and furniture people leave on the street — like the slightly torn Garnet Hill duvet cover she found recently.

“It was wet, and covered with dog hair,” she said. “I washed it really well a couple of times and mended it.” Her quest for money-saving ideas “is very energizing,” she says. “You see opportunities everywhere.”

I’m glad she was handy enough to take the duvet (it’s also great for the environment – one less duvet in the landfills). But I’d feel uncomfortable using a duvet I found off the street, “wet and covered with dog hairs.” The ick factor would be too great for me to overcome (curiously, I have no problem buying clothes from thrift stores). I’ll settle for my duvet set from IKEA (bought it during one of their one-day sales for $20).

I guess this confirms what I already know: I’m just not that frugal, I like my creature comforts, and I’m willing to pay for them (although I am willing to pay LESS for them in this uncertain economic climate).

Will Frugality Stick?

As far as will frugality stick? People will always want things (or experiences). That requires money. Real estate in desirable areas such as San Francisco, Manhattan, and Los Angeles will always be pricey. Conspicuous consumption has gone out of style – for now – but who knows?

In 10 or 20 years, if things are good again or we have another bubble – will New York Times be writing about fishing discarded bedding off the streets and washing plastic bags? Will a consultant skip her $4 morning latte at Starbucks? Will the middle-class professional woman be so eager to disclose that she got her holiday dress at Goodwill instead of Neiman Marcus? Will she even go to Goodwill?

As deep and as hurtful as The Great Recession is, can it truly, permanently reprogram us as a culture of frugality? I’m hesitant to say yes. We had a huge, wild party that went too long. Now comes the hangover and the recriminations. But after a while, after we feel a little better, after we promise to never let things get so out of control, we’ll raise a glass (or two, or three) again.

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If you’ve ever wondered that, you should read this MSN article (via Escape Brooklyn).

I think I got lucky. My mom is a pretty savvy lady when it comes to money. Though my parents had a relatively late start to retirement planning and investing, they’ve done okay for themselves and are continuing to amass a little nest egg.

Sometimes I’m surprised at how progressive Mom is – she has never said “promise you won’t put us in a home,” instead, it’s “we want to prepare financially so that if/when we have to go to a retirement community, we can go to a nice one, or we can hire in-home aid.”

When family friends and relatives joke that when I become financially stable I will take care of my parents, Mom always interject, “the responsibility of children, when they grow up, is first to their family and kids.” She also said to me many times that the greatest gift she can leave me is peace of mind.

After reading this article, I come away with greater gratitude for Mom’s wise choices. I hope that if/when I become a mom, I can be as wise as she is.

To my readers:

Do you think you will have to support your parents in their retirement?

If you are a parent, would you expect your children to support you in your retirement? Either way, (how) do you make your expectations known?

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On a sunny weekend morning, as the whole day stretched out in front of us like a long embrace, CB turned to me and asked, “would you be poor with me?”

If I was feeling romantic and dreamy, I might’ve answered, “yes, because I love you,” and then added a caveat about “but you won’t be poor.” But all this personal finance must’ve seeped into my subconcious, or maybe half-asleep I am more honest and less tactful than I might’ve been awake, because I managed to look straight into his beautiful big eyes and said, “I don’t want to be poor with anyone.”

I thought about that less-than-romantic (but very-honest exchange) after I read posts by Madame X and Meg on the topic of the “accidental woman breadwinner.”

Reading this article made me realize that I don’t want to be an “accidental” breadwinner in my relationship, just as I don’t want to become an “accidental” stay-at-home wife or mom. “Accidental” implies a lack of choice, a lack of introspection, a lack of conscious decision. “Accidental” spells “resentment down the road” to me.

In marriage vows people promise to stay together “for better or worse, for richer or poorer.” I believe in those vows very strongly, but I also don’t subscribe to the theory that “all you need is love.” I’ve seen the tension that bad finances bring to even the strongest of marriages. I’ve seen it with my parents. I’ve seen it with several of my mom’s friends. And what I saw scared me.

Maybe that’s why I’ve always envisioned that both my future husband and I will work, even after we have kids (one, maybe two). One of us may take a part-time schedule for a year while the kids are young, but I don’t see either of us taking a longer hiatus from our careers. A satisfying career is important to me, and I’d imagine, to my future husband as well. Maintaining financial autonomy is important to me. Being able to care for my family if anyone should happen to my spouse is important to me.

The topic of whether to have a stay-at-home parent is a sensitive one – I don’t think there’s one solution for all families. It’s a personal decision. My thoughts to this subject is influenced by my mother, who has always worked. In fact, she left me in the care of grandparents for FOUR years when I was young to work overseas. I did not see her (or my dad) from the age of 5 to 9. And I turned out okay. Given my experience, I think I can probably manage any guilt I will have as a working mother.

So, no, I don’t want to be poor. Not by myself and not with anyone else. No one knows what tomorrow brings, but I hope that by making smart financial decisions and by marrying a partner who shares my priorities (and whom I love and respect, of course – divorce is a huge money drain!), I will improve the odds of having a “richer” life instead of a poorer one.

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A few days ago I asked “is now the right time to buy?” Well, Warren Buffett says yes!

Recently I managed to reach the 12-month mark in my Freedom Fund (aka emergency fund). Given the current economic environment, I don’t feel comfortable reducing my cash holdings. I am, however, debating how to allocate my FUTURE allocations.

I can keep saving in Freedom Fund, split savings into 1/2 to Freedom Fund, 1/2 to taxable U.S. equity fund (this fund will serve as a long-term, non-retirement, savings fund. The time horizon will be at least 8-10 years – I imagine it will serve as a “down payment” fund because despite all the upheaval in real estate right now, I STILL want to be a homeowner, and maybe eventually an owner of a small apartment complex), or split savings into 1/2 to Freedom Fund, 1/2 to 529 Plan (that will be holding primarily cash, because I expect to go back to graduate school within 5 years).

Much to think about…

This weekend CB and I went out of town for a wedding. Once again, when I think I’m too preoccupied with personal finance, something – a squeeze of the hands at church, a family gathering at brunch, a nap in the car while we cruise down the interstate – reminds me that at the end of the day, money is just a means to an end.

But then again, love is not all, it is not meat nor drink… and it certainly won’t fund my retirement. So, keep on saving, I shall.

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Thanks to Squally Reach (who is on a YEAR-long no buying resolution), I found this article in the Vancouver Sun about the morality of fashion.

England’s House of Lords’ Science and Technology Committee released a report that harshly condemned cheap and chic insta-fashion, calling it “costly and socially unacceptable.” …To bring the harsh reality home, consider this: A closet crammed with cheap, disposable clothes is actually more expensive than a wardrobe of well-made, long-wearing classics.

I do think the article raises salient points. All things being equal, more expensive clothing will be better quality (does that mean that its workers will be treated more fairly? I’m asking a real question here). I think almost every women want to have a timeless wardrobe and flattering fits, but HOW timeless and HOW luxurious depends on personal circumstances. It’s something I struggle with

Theory’s quality is better than Payaya’s, no doubt. But it comes down to the question of: Can I AFFORD the quality in my current financial situation? Do I WANT or NEED that degree of quality in my current lifestyle? WHERE does having a great, classic wardrobe fit on my list of priorities – does it come after saving for graduate school but before eating out 4x a week?

What do you think?

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I don’t think personal finance is about deprivation. It’s really about making the choices that will support your highest priorities – the things or activities that will bring you the greatest joy or the deepest satisfaction.

Here is the newest Ask the Expert question from CNN Money

Question: I just turned 24, and the constant pressure from financial advisers to “save save save” for retirement makes me anxious that I’ll never be able to retire. I contribute 10% of my salary to my 401(k) each year – some of which my company matches – and I recently took on a second job to save for a home. Still, I feel miserable. My friends cruise around in BMWs, but I’m afraid to spend a dime on myself lest I ruin my future. I’ve looked at retirement calculators, but most don’t let you enter an age below 25. So I have no idea whether I’m doing enough, too much or just the right amount. What do you think? Are my worries are justified? —Jessica, Boston, Mass.

I read this question, and my first thought was… personal finance shouldn’t make you miserable. (My second thought? Spending money on yourself does NOT equal ruining your future. If that’s true, my road to cat-food retirement is paved with shoes, dresses, and lots and lots of food!)

I hope Jessica knows how well she is doing. She is saving for retirement, AND taking a second job to save even more. But I believe that if something makes you truly miserable (be it a job, a relationship, or a personal finance strategy), you won’t be very successful at it for very long, and that misery will likely poison other aspects of your life.

If your personal finance is making you miserable – some adjustments are in order:

(1) Expectations: If I expect to be driving a BMW at 23, living in a luxury high-rise, and dining at Spago every week, then yes, I might be pretty miserable in my current lifestyle, which includes none of those things. If I compared myself to friends who have a $100K trust fund set aside for them, that comparison probably won’t make me feel any better. In that case, I’d need to adjust my expectations to make sure that they aren’t making me miserable. Expecting to save 50% of your income on $40,000, while living in Manhattan is probably as unwise as expecting to dress head-to-toe in Chanel straight out of college.

(2) Savings rate: When I operated on a fairly strict budget trying to save 40%+ of my gross income every month, I wasn’t very happy and wasn’t very successful at all. Now that I’ve scaled back (and have pledged to make up part of the difference by saving all of my bonuses), I’m much more satisified with my lifestyle. This also means that instead of failing every month to achieve the 40% goal, I’m succeeding fabulously at saving almost a third of my income every month. This principle can be taken too far (how much more successful would I be if I just aimed to save 5% of my income?!). But if I am honest with myself, I know which goals will allow me to prepare for my future AND live well today, and which goals will make me miserable by neglecting quality of life today.

In conclusion? If you are reading this blog, know the importance of saving, and are doing something to prepare for your future? You are already doing well. Make sure that your personal finance reflects your personal situation and priorities, and please, personal finance should be a source of joy in your life (okay, that might be the PF blogger in me talking), not a source of misery and distress.

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WSJ mention

Check this out: Well-Heeled got its first media mention ever (that I know of)! 🙂 And from the Wall Street Journal, no less!

Apparently this blog falls under the “juicy diaries” category. 

Juicy. Personal finance. I never thought those three words would end up in the same sentence!

Congrats to Krystal, Mollie, Beachgirl, and Nicole, and Eric – they were also featured in the article.

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Tales of the Trailblazers

This is a 1998 article from FORTUNE, about the 34 women of Harvard Business School’s Class of 1973 (the first year that HBS had a “significant” portion of the class be female – 4.4%).

Even though this article is almost 10 years old (can you believe that the 90s were TEN years ago!? I feel old), I really think it’s timeless.

Their advice: You can do anything, but you can’t do everything. So choose carefully.

The right question is about choices: implicit ones, explicit ones; choices made consciously and choices made by default. The wise women of the class of ’73 now know this–which is why they are nearly unanimous in the advice they would like to pass along to the women following them. The advice is not about how to break the glass ceiling or how to survive a sexist boss. It is instead to know thyself, and then to make your choices accordingly. “We in this generation were raised to think we could do anything,” says Lang. “Our parents told us, ‘You’re smart. You’re educated. You can do anything.’ And the answer is yes. You can do anything. But you can’t do everything.” The trick is having the wisdom to know the difference.

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