InDenialMoney.com

YOUNG Australian women are literally shopping until they drop, forgoing food and bill payments to feed their addictions to the latest designer clothes and shoes.

Ignoring empty bank balances and poor economic forecasts, the “urge to splurge” generation of 18- to 35-year-old women have become binge shoppers, caught in a web of spiralling debt.

Driven by a new wave of influential high-end fashion magazines and celebrity role models, they are maxing out their credit cards on uncontrolled shopping sprees.

Trends are changing faster than ever but the self-confessed shopoholics aren’t interested in seasonal sales or bargain buys. The latest designer item is their priority — but it comes at a heavy price.

According to the Insolvency and Trustee Service Australia’s annual report, over 10,763 women declared themselves bankrupt in the 2006-2007 financial year, up from 7000 in 2005.

WOW! This made my jaw drop. 11,000 women declaring bankruptcy. I find it staggering that people can be so dismissive of their financial situation. How completely ridiculous to continue shopping and live in such denial of their financial dire straights.

Declaring bankruptcy is no walk in the park and has serious ramifications long term. I really hope their designer clothes and shoes are worth it. Yikes.

Source: News.com.au

GENERATION Y are opting to keep spending rather than tighten their belts as times get tougher, new research shows.

A survey of 1230 Australians consultants The Leading Edge found that 31 per cent of Generation Y have actually increased the money they spend on going out compared to the same time last year.

A similar percentage – 38 per cent – of Gen Y were spending more on gadgets such as i-phones, GPS navigators and electronic games. Twenty-nine per cent were spending more on takeaways.

“With so many Gen Y’ers still living at home with mum and dad, it’s not surprising they are less affected by an economic downturn in comparison to home owners and young families,” said Karen Phillips, the chief executive of The Leading Edge.

This doesn’t surprise me. I wonder how many of Gen Y have simply given up the notion of ever owning a home.
It is worrying though that they aren’t considering their financial future and using the time at home wisely by saving and investing.

Do their parents worry or are they partly to blame for their kids lack of financial sense?

Source: News.com.au

Thankfully I’m finally over the dreaded flu. For a while I didn’t think it would ever go away! The last time I had the flu was around 13 years ago so I guess I’ve been pretty lucky. If I’m still working at the video store next year then I might consider getting the flu shot since we get SO many sick people coming in to get movies. I probably encounter more sick people than people who work in a doctor’s office ;-)

Financially speaking the flu didn’t have too much of an impact since I didn’t miss any work (we’re extremely short staffed so there was no one to do my shifts if I called in sick) but our medical expenses did go up since Charlie and I both went to the doctors. We also stocked up on advil, paracetamol and throat lozenges. There is one thing that I didn’t buy that I probably should have and that is Sudafed. I’m sure it would have helped but it’s so darn expensive here…$16.95! In the US you can get it for $7.00. I just couldn’t justify spending that much. At least going to the doctor here is cheaper since it’s subsidized by Medicare. We paid $17.00 but you can go to some clinics that bulk bill which means you pay nothing at all.

Overall July was another great month. We managed to save over $5,300 which is awesome. Our income is a bit inflated due to my tax refund check and an extra pay this month. I wish it was normally that much! We reduced our grocery spending by $46 which I’m happy about. Unfortunately we spent $25.35 more on wine than we did last month. We’ll see if we can do better this month :) We also spent about $20 on the lotto. I know it’s a waste of money but since both Charlie and I are not happy with our jobs we’ll continue to buy a lotto ticket occasionally in hopes of being one of those lucky few ;-)

Ms Penny Pincher is almost over the flu and will resume her blogging duties tomorrow!
This is a guest post by her partner Charlie.

It is amazing how many people associate being frugal in a really negative light. It seems that for some the notion of being frugal means you go without or have to sacrifice your way of life. Some are so opposed to the concept that they go into huge debt to maintain a lifestyle considered to be the norm.

We are frugal people and are quite open about this fact. It’s interesting to see the reaction we have received over the years.
It seems that many have bought into this whole concept of buy it now because you could be dead tomorrow mantra that so many people use to justify their ever increasing financial situation.

Being frugal does not mean you go without, it just means you are responsible with the money you have and are trying to maximize your long term financial position.
Most people i know who are frugal will hold off buying things until it is necessary. Of course it would be nice to buy a new LCD TV but we probably won’t buy a new one until our current TV dies. This isn’t a bad thing, we just haven’t bought into this whole concept of having the latest and greatest.

Perhaps the word frugal has got a bad wrap intentionally? Let’s face it, almost every business on the planet has a vested interest in you buying it now. They make it so easy. Interest free loans, easy setup credit cards and payment plans are among the thousands of schemes out there designed to get you in the door and walking out with that brand spanking new appliance.
Companies like Apple do a brilliant job in making you think you need to buy the latest and greatest. You might already have an iPod but do you have the new one with the fancy touch screen? For just a few hundred bucks you can own the new one. The old one gets discarded or possibly handed down to junior who will more than likely look at it in disgust and complain that it’s so big and ugly. It’s probably on the cards that you will be back at that same store come Christmas buying Junior a brand new spanking iPod just like yours.

It was quite amazing to watch the crowds lining up to buy the latest iPhone in Australia. The phone plans were pretty average and some down right terrible and yet thousands happily lined up to sign on the dotted line. A few weeks on and new phone plans have been released, you guessed it, better rates and much lower repayments. It’s hard to have any sympathy for those who can’t resist the urge to be first. I think some will be feeling less than excited when they get their first phone bills due any day now ;)

There are very few items people don’t hold off buying, but there are a few notable exceptions. Let’s take washing machines for instance. They aren’t glamorous and I can’t recall anyone I know ever getting excited about spending money on buying one nor proudly showing off their new addition. No, we see washing machines in a different light. Most people will wait until their old one is dead, dying or making strange noises that terrify small children and strike fear into small pets who have to sleep next to it.

The same can be said for other household appliances including fridges, ovens and vacuums.

Isn’t it interesting that on the one hand we have this consumer driven mentality to buy it now and buy the newest product on the shelf but on the other, be quite frugal and hold off until those less glossy appliances finally die and are relegated to the rubbish heap.

Being frugal is a state of mind more than anything else. Once you stop viewing possessions as important assets and start seeing them as purely functional, your desire to have the latest and greatest diminishes.

An important part of our financial success has involved being frugal.

I know that for many people. simply saying the word frugal fills their heart with dread. It invokes feelings of self-deprivation which can be incredibly challenging and for others means more work. The reality though is that being frugal is not only good for your financial future but it’s empowering.
The reason I say this is because you are forced to look for alternatives to the way you usually do something. For me, it’s quite a buzz when you come up with a frugal solution because I’ve succeeded in what I set out to achieve.
Additionally, quite often finding a frugal solution can have a positive impact on the environment, especially when it comes to cleaning products. Yes, I know, it’s not exactly an exciting prospect thinking about cleaning products but it’s amazing how much people spend on them when you really don’t need to.

So here are a few things we do that are frugal and in some cases, environmentally friendly.

1. Slow cooker/crockpot

This has become one of the best investments we have ever made. I think we paid something like $30 for ours and we can make batches of food that provide 6 to 7 meals. The savings are quite impressive. Rather than us having to buy food for 7 nights, we can use our slow cooker and have a meal that lasts 3 nights plus some that we can freeze for a lazy night in. Slow cooker meals are economical, easy and healthy providing you are careful about what you make of course! Here are a few sites that have some excellent recipes:

• http://crockpot365.blogspot.com/
• http://www.slowcookerrecipes.net.au/
• http://allrecipes.com/Search/Recipes.aspx?WithTerm=slow%20cooker

The one thing I haven’t been able to find clear information on is their energy consumption. I run my slow cooker on low heat for 6 - 8 hours so will try and find more information on it’s consumption

2. Plan a menu for the week.

We always write a menu for the week. We know exactly what we are going to be eating and can buy the required ingredients in one shop. This means we don’t have to rush out to the store if we run out of something. Costs really add up especially if you use a convenience store for items you need in a hurry.
Additionally, if you know what you are eating for the week, you will be less likely to end up buying takeout.
The other advantage is that you can see on paper what your diet is lacking. We found out that our menu had way too much meat in it so we now balance it more with healthy vegetable based meals. So we are saving money and keeping our health in check!

3. Shop with a plan

This is really essential if you plan on being frugal and want to get your spending under control. If you walk into your local supermarket with no list then it’s pretty much a given that you are going to buy things that you really don’t need. My advice is to write out a shopping list and keep an inventory of your fridge and pantry. Once you know exactly what your stocks are and what your menu is for the week, you can plan out a shopping list. Most importantly, do not deviate from it!

3. Cut those bottles open

We have all been there. You have shampooed your hair and pickup the conditioner bottle, squeeze it and hear that awful sound. It’s the “oh my goodness…there’s no conditioner left” sound.

First things first, keep a pair of scissors handy and close to your shower. Cut open the bottle of conditioner or shampoo, I guarantee you will be amazed how much is actually still in there. It probably won’t be enough for more than one extra wash but hey, why waste it?

4. Do away with the chemicals

From the moment I moved out of home and into my unit (town house/condo), I did away with cleaning chemicals. I was 24 at the time and had read this really amazing book about cleaning products and how they were not necessary to keep a clean home.

In our house we have two essential products to keep it clean. Vinegar and bi-carb/baking soda. We use white vinegar to clean and polish our glass and windows and baking soda where a deeper clean is required including our shower, bench tops and sink. Baking soda is a versatile product and can be used to soften clothes in your wash, cleaning, removing odors from your fridge and relieving aching muscles by adding it to your bath.

Lemon and baking soda together is great for cleaning chopping boards plus a variety of other surfaces. This site has some additional information on using alternative products: http://housekeeping.about.com/od/environment/a/vinbaklemons.htm

The other really positive thing about greening up your cleaning products is your health. Having all of those chemicals in your home can be toxic. Here are a couple of articles on this subject: http://www.canada.com/topics/bodyandhealth/story.html?id=dcdec072-3f5f-4149-9f53-c61879115864 and http://www.epa.gov/epp/pubs/cleaning.htm#why

Buying baking soda and vinegar is much cheaper than the products you buy off the shelf so give it a shot.

5. Toilet paper

I never really put much thought into which way I put the toilet roll on but apparently someone with a little too much time on their hands has worked out the mechanics. It turns out that you use less toilet paper if you have the paper over rather than under. TreeHugger has a post on this very subject, it’s quite amusing especially the comments :)

6. Turn the lights off!

This has been something both my partner and I have always done. We turn the lights off when we don’t need them. It is amazing how many people leave lights on in rooms they aren’t using. We had friends visit with us not that long ago and we were constantly switching off the lights after them. At first I thought they might notice and be a little annoyed but they obviously didn’t because they kept doing it!

7. Rug up and get cozy

It is winter where we live and currently our State is suffering a natural gas shortage. The Government in a desperate attempt to try and cut consumption has asked that we all consider not using our heating unless it’s really, really cold. Unfortunately for the Government, it’s really, really cold!
Still, I think that we have been conditioned to just turn on the air or heat whenever we get a little uncomfortable. I’ve heard of people who crank up the heat and walk around their house in a t-shirt. This is just ridiculous and quite frankly, wasteful. Use your heating if it’s really necessary but if it’s not then why don’t you just put on a jumper and snuggle up on the couch or in bed. It’s amazing how much you will save on your utilities bill if you try and do this.

Hopefully you have realized that being frugal doesn’t mean you have to deprive yourself. I believe that being frugal is a really easy thing to do and in most cases it just takes a little more thought.

Hi, my name is Charlie and I’m Ms. Penny Pincher’s partner.
Just a quick post to let you know that Ms. Penny Pincher is under the weather with a sore throat and running a high fever.

Even though she is sick that hasn’t stopped her from being a good fiscal manager. I wanted to buy her a Strepsil throat lozenges but Ms. Penny Pincher wouldn’t have it! I was told to buy a much cheaper product that apparently does the same thing. On top of this, I was asked (told) to organize my taxes tonight so she is certainly still keeping her wits about her ;)

Hopefully Ms. Penny Pincher will be back later this week.

Charlie

This all started back in May when I opened up our credit card statement and like any smart money manager I checked all the charges to make sure everything was in order. Normally we don’t have too many charges but while my Dad was here we treated him to a trip to Sydney.

In Sydney we used our credit card quite a bit so it took a little more time than usual to check the statement. Two charges caught my eye. They were from two different cab companies on the same day. This was the day we took a cab to the International Airport from where we were staying. One was 45.95 and one was 51.95. We knew one of them was wrong because we only took one cab but we weren’t sure which one because we could not find the receipt. Charlie thought she remembered it costing 51.95 so we called up our credit card company, Virgin Money, to dispute the 45.95 charge. They were very friendly and said they would get in contact with the business and request verification. The business would have 30 days to do this.

About 20 days passed by when we found our receipt which showed 45.95…Oops, we disputed the wrong charge. Well, sure enough, that same day we got documentation from Virgin showing a copy of the receipt with Charlie’s signature. We then had to call up Virgin again and explain the situation so we could dispute the 51.95 charge. They were again very friendly and explained that it would take 30 days.

Well yesterday was the 30 day limit when we received documentation from Virgin. Like before, this was a photocopy of the receipt but it showed a 51.95 total and had Charlie’s signature. At first I did a double take because I knew this couldn’t be right. We then grabbed the previous 45.95 disputed charge info that Virgin had sent. I studied both receipts closely and noticed that they were done 2 minutes apart! The first charge, 45.95, was recorded at 7:54am, while the 51.95 was recorded at 7:56am. I suppose I could understand if both of the charges came from the same cab company, but they didn’t! They were from two different cab companies, they were for two different amounts and they both had Charlie’s signature! Something smells very rotten here! I wonder if this is a scam and they photoshopped Charlie’s signature. I have no idea what to think.

We had to get back on the phone to Virgin, who were again very helpful. They agreed that the charge sounded very dodgy and explained how to continue with our dispute. We photocopied both receipts and explained in writing that they were done 2 minutes apart and it was impossible to be in two different cabs at the same time. We mailed that off today so it will be interesting to see how it will unfold. I have faith that we will get our 51.95 back.

If we had to do it all over again there are two things I would probably do differently. The first is not charging the cab ride ;-) Actually, we charged our cab from the airport to where we were staying and that turned out okay. And the second one, is that we should have disputed both charges at the same time. I guess I’ll know for next time, if it happens again :)

In this Wall Street Journal article entitled, Splurging is Good for Your Health they report on a Harvard study that says splurging now makes you happier later. “Even more surprising: Not splurging now gives you pangs of regret later.” Over time, those who had indulged felt less and less guilty about their choices, whereas those who had been dutiful experienced a growing sense of having missed out on the pleasures of life.” And then on the other hand you have MSNBC reporting that debt stress is causing health problems. Speaking from someone who was buried in debt, I can totally relate to the MSNBC article. I was a basket case. I couldn’t sleep and I suffered panic attacks. Now that I’m debt free I’m sleeping like a baby ;-)

I find that Harvard study a little hard to believe. For goodness sakes, they did part of it in a Mall. Maybe had they done it in a Credit Counseling Center they might have had a different outcome. Anyway, it’s definitely not applicable to me as I can’t recall one thing that I have “pangs of regret” for not purchasing but can easily think of 10 things that I do regret buying. Maybe all those people who are thinking of long term regret and spending extravagantly anyway, should read the MSNBC article to see what’s to come.

Which camp do you fall in?

You wouldn’t think working in a video store would be that exciting but you would be wrong ;-) I guess it’s depends on what your definition of exciting is. At any rate, we certainly have a lot of drama.

Yesterday was no exception. A middle aged gentleman came up to the counter to hire out his dvds. He put them down along with his $50 bill and walked away to look at some phones. This would have been okay had there been someone at the counter to watch it but they were busy elsewhere. While he was gone, you guessed it, someone stole his $50! I’m stunned that anyone would leave ANY amount of money unattended much less $50! If I’m at the counter and a customer walks up to me with their movies, hands me their money and then says that they’ll be right back I immediately give them their money to take with them. I don’t want to be responsible for it. I feel bad for the guy though. It’s a tough lesson to learn. We have the thief on camera so hopefully he’ll be caught. I’m sure that $50 is long gone though.

Would you ever leave any money unattended in public?