Stylish and fashionable on a cheap budget

We've all been there. Maybe one of your girlfriends bought a fabulous new (full-price) top that you've coveted ever since (if only it was on sale!). Maybe a pair of 4-inch high heels perched atop a display pedestal under a spotlight caught your eye as you flitted through the shoe section at Nordstrom's. You don't even bother looking at the price tag, though, because you know they're beyond what you should be spending on shoes -- they're in the uber-expensive section, after all, with nary a "sale" sign in sight.

For many of us, shopping and being stylish isn't just a fun hobby that men don't understand. It's a way of life. But being stylish does not mean you have to be broke -- it's tres easy to do yourself up on a budget, and it can make shopping twice as fun. Yeah, yeah, I know you've heard it all before. But just because you want to look good and save in the process does not mean you have to continually shop at T.J. Maxx (no offense to those who frequent this Mecca of suburbia). If you're anything like me, slumming it at discount stores can wear you down. It's an exhausting process digging through racks of unorganized clothing falling off hangers, as Huey Louis plays overhead and the mother of what seems like nine children is screaming at her kids to "stop using the clothing racks as a jungle gym!!" Just thinking about it makes me cringe.

For the amount of time I spend shopping for clothes, you'd think I have more than enough to wear -- and I do. But every morning when I open my closet, I find myself complaining to Love that "I have nothing to wear!" Usually I end up piecing together a knock-'em-dead outfit, complete with Love's response of "What are you talking about? Your closet is FULL." And maybe it is, but if you're going to be stylish on a budget, your closet is the first place you'll want to focus on.

First off, make three piles: The "use its" (for clothes you know you'll wear), the "lose its" (stuff you haven't worn in a long time, doesn't fit anymore or is plain passe), and the "fix its" (for clothes you've been meaning to get tailored or need to be tailored because they don't fit right anymore).

The "lose its" pile is KEY because this is where you can not only make space for any new wardrobe, but you can also make money to boot. Hopefully this pile ends up being meaty enough to either take down to Goodwill (you get a break in your income taxes if you donate, it's considered charity -- just save the receipt!), or take it to a clothing exchange, such as Crossroads or Buffalo Exchange, where you are paid per garment for your stash. If you're feeling especially entrepreneurial, consider setting up shop on Ebay, where you could even make it into a full-fledged side-business, selling your friends' throwaway clothes as well and picking up profits along the way. The money you make from reselling your old clothes is a perfect base to buy new items with.

After you've rid yourself of the old, you'll now need to evaluate your current closet. Every sharply-dressed girl needs a few staples in her wardrobe. These should include:

• A trench coat (I prefer the classic khaki trench, and found a great Michael Kors one at Nordstrom's Rack recently for a fraction of the retail price.)
• Slacks (I like gray, it isn't as harsh as black and goes with almost everything during any season. Be brave and try pairing with a bright orange top or bag!)
• A little black dress ('Nough said.)
• A crisp white shirt (Try a cap sleeve blouse for a more fun-yet-professional spin on this classic. Make sure there is NO pulling across the bust when it's buttoned. Not only does this look unpolished, but it also gives everyone who's standing near you a free ta-ta show between the gaping spaces between each button.)
• A pair of black pointy-toed pumps, with a heel height of between 2 to 3.5 inches (These will go with everything and are always in style.)
• Skirt (I prefer pencil, when it comes to a staple, but a-lines can be classic, too.)
• At least one casual dress that can take you from day to night.
• Jeans (No high-waisted, tapered mom jeans! Think dark denim with a sleek line to highlight your stems.)

I'm sure you probably have some, if not all, of these items, but they may need an update. These pieces should be of quality (aka not Forever 21), because they are the backbone of your wardrobe. I'm a huge advocate of throwaway clothes (Forever 21, H&M, etc.), but the aforementioned items should be timeless and of good quality, so if you're going to spend any money on clothes, the quality staples should take precedence. Mixed with your trendier clothing, they can make countless outfit choices for any day of the week.

Aside from these staples (which you could find for cheap at Nordstrom's Rack, or any sale at Bloomingdales or Nordstroms), whenever you're out shopping, remember what would go with your old clothes back at home. Many women make the mistake of buying shirts or shoes that can't be mixed with a variety of outfits. So, if you have three skirts but only one shirt you normally wear with all three, buy a few more shirts within the same color palate that would go with the skirts. Same goes with your dress slacks, cropped pants, or other garments. The idea is to work with and expand what you have, so that it can all be easily assimilated with one another.

Better yet, when you're out and about and see something you fancy, scrounge up an old receipt or business card from the bottom of your purse, write down the designer, how much it costs and any other info you could use to search for it online. Once you get home, kick off your wedges and get comfy in front of your computer. Start Googling everything you've written down and see if you can find cheaper your items cheaper anywhere else. Usually I've had incredible luck with Overstock.com, Amazon.com and Ebay. Case in point: I once saw a pair of '70s-inspired Circa Joan & David wedge slingbacks in a Bloomingdale's in San Francisco that were almost $200(!). Being true to my moniker, I found them a few months later online at Amazon.com for about $50, proving that patience does pay off. Let's just say that I turn heads when I strut down 18th Ave. wearing my bargain(!).

Don't forget that a great bargain-hunting trick is to buy off-season items. So, if you really want a new bikini, but don't need one RIGHT AWAY, look for the greatest deals in late August, when summer is lazily exiting stage right. If you're in dire need of sweaters, strike when the cashmere iron is hot (sometime around late spring/early summer when long sleeves are a relic of the past winter). Remember that January and July are when stores have their biggest sales (Nordstrom's anniversary sale every July, for instance, is one of the best sales of the retail year by far).

One snag (pun intended) that this brunette on a budget runs into when shopping for deals is buying something just because it's on sale. I can spend countless minutes in a fitting room, looking from every angle in the mirror at a new shirt that I just don't find that flattering on. Why do I spend so much time analyzing it, when I could be out finding other fabulous buys? Because it's cheap, and I'm trying to mentally justify purchasing it.

Love hates this, because if I'm spending countless minutes in the the fitting room, he's generally spending countless minutes outside of the room, waiting for me to model whatever I've stepped in with. Sometimes I emerge multiple times with the same shirt/skirt/pants/dress on, double- and even triple-checking if he's "really sure" it doesn't look OK, or it doesn't fit right. Warning: If you find yourself doing the same, that probably means said item is just not working for you. And do you really want something to just look "OK" on, or do you want it to look spectacular? Just because you're on a budget doesn't mean you have to settle.

I know a 24-year-old girl, let's call her Petunia, who usually wears abhorrent outfits -- most of the time she's dressed as if she's stepped out of the pages of an issue of Cosmopolitan circa 1991, with her Dade-County-retiree-magenta-pink sleeveless shell and matching capris. Or her blinding yellow spaghetti strap dress, with matching electric banana shoulder wrap and giant yellow earrings (Crayola called, they want the color yellow back!). (Petunia also insists she doesn't need to wear makeup, and we all know that everyone should wear makeup in some capacity, but I digress.) My favorite garment of hers is a Pepto-Bismol pink corduroy mini skirt, complete with small embroidered mallards mid-flight. Why do I bring up her love of winged-animals personified in said skirt?

Because this is exactly the type of thing that many might buy just because it's $5 in some clearance bin. Remember that if you wouldn't pay full price for it, then why bother buying it on sale? You're only getting a deal if you find something you will wear, use and love. And if you think you'll ever wear, use and love a pink corduroy skirt embroidered with ducks, then we need to chat.

Mallards aside, fit is also an important factor when you're shopping for deals. If it ALMOST fits but you're dying to buy it because it's the last one, step away from the clothing! I can tell you from experience that I have bought many things thinking I'll just "take it in a little here," or "lose a little weight there." I've even been known to buy heels that KILL my feet and cut off all circulation to my toes, but I'll wear them because they're cute. Most of the time, though, it's a waste of money to buy something that doesn't fit, because it will inevitably end up hanging in your closet till it's time to make your three piles (see above) when you're doing Spring cleaning. This also applies to certain cuts that don't work well on your body type. If empire-cut tops make you look pregnant when they're full-price, guess what? They'll still make you look pregnant when they're on sale. Sorry, sometimes the truth hurts.

Got any tips to look great on a budget? What about any big yearly sales we should know about? I'd love to hear from you!

"Mag dahling, you're being a BORE"

Ten bucks to anyone who can guess which movie that's from? If you guessed Breakfast at Tiffany's, you're right (sorry, I was kidding about that 10-dollar bit). Ok, so you may feel your life is a tad boring lately, unlike Holly's, what with all this saving and frugality weighing you down, but don't fret. Even if when you end up rich, you might still be a YAWN in all your bright-eyed, bushy-tailed glory.

That's because YAWNs (Young And Wealthy but Normals) are the new Gen Xers and Yers, according to an April 2008 Associated Press article.

When you imagine what the CEO of Facebook, or co-CEOs of Google do on a daily basis, what comes to mind? You probably envision them jetting around the world in their private planes, sipping on the finest Dom Perignon '53, a la James Bond, traveling to exotic locales with exotic women in tow and piddling the days away on golf courses, yachts, and in Bentleys, right? Well, Odd Job, meet Rik Wehbring.

Thirty-seven-year-old Rik -- who worked for multiple startups -- lives on $50,000 a year in San Francisco, where his rent costs about 40% of his budgeted money. He doesn't own a TV, drives a Toyota Prius, shops for food at the local farmers' market and owns a $20 mp3 player that "works just fine." Oh, and I forgot to mention, he's also a dot-com millionaire.

Rik is what's come to be coined as a YAWN by the London Sunday Telegraph, and he's one of many who've proven that it's so yesterday to live a life of excess. In fact, it's a downright bore.

YAWNs live small, but it's because they already have everything they want. They live on just enough to be comfortable and despise being pretentious or brag-worthy. For us budgeters and savers, it might come as a surprise to learn one day, if we ever attain YAWN status, that being rich is just a state of mind, and all those sports cars and sail boats are better left to other people that crave them in one form or another.

Rik isn't one of them. "I don't need a lot of material possessions," he said in the article. "I haven't had to buy anything in a while."

It comes as no surprise to learn, then, that YAWNs loathe ostentation.

When Ray Sidney, a software engineer at Google, cashed in his stock options in 2003, they yielded him more money than he could ever spend in one lifetime. (Quite possibly billions, but he wouldn't say.) What would you do with billions of dollars? Ray decided he wanted to retire in a four-bedroom house in Stateline, Nevada, and give most of his money away to charity.

His donations have ranged from giving $1 million to a bus company to help launch a route to provide public transportation to casino workers, giving $400,000 to help build an arts center, and giving $1.7 million to a local high school to build a football field and track. This is all on top of his millions of dollars of donations he's given to charities to try to cure diseases or save the world.

So how does he get his kicks? He did buy a single-engine plane he flies about once a week to visit his girlfriend in San Francisco. But that's basically the extent of it. I did find it odd that he chose to move to Nevada of all places and not bring his girlfriend along. Or just buy her diamond ring for that matter and call it a day. But perhaps Nevada wasn't her bag, or....well, this isn't really the point of the whole story.

The point is is that for some people (especially YAWNs), $50 for the powder room might be all that's needed, which is a both pleasant and humbling surprise. Holly would be proud.

Learn the lingo: Balance Sheet

Remember those balance sheets I mentioned the other day? You know, the ones those cocktail-party frequenters discussed as you nodded along cluelessly? Well it's time to stop nodding and start joining in to the conversation!

If you're ever going to invest in the stock market with your savings (and hopefully double or even triple your money), you need to know the basics. That vacation house in Acapulco will always be a pipe dream if you aren't willing to put in the work to get there. Fortunately for you, the work is piece of chocolate ice-cream cake (zero calories, of course).

Not understanding the nitty-gritty in finance (such as what a stock is) would be like trying to do open heart surgery without knowing which heart valve connects to what. Imagine your pot of savings as your patient, and you are the doctor. Do you want your patient to live longer and grow, or do you want it to disintegrate and fall apart? I don't know about your neck of the woods, but in mine, it's just considered poor form for a doctor to operate without understanding the fundamentals. This analogy should extend into your fiscal life. Ok, so maybe the stock market isn't as complicated as open heart surgery, but a gal needs to keep her wits about her when money is involved, which means learning working knowledge of the basics, or terms.

And the term du jour is balance sheet, or a statement of what a company, let's say Google, is worth on the date it's printed. Balance sheets are typically divvied up to you, the shareholder, about four times per year, or every quarter.

Still with me? If you see anything about a "Google's Q1 2008 profits," for example, that means the profits were reported in the first quarter of 2008 balance sheet. Q1, Q2, Q3 and Q4 all relate to which quarter is being reported, and is usually followed with corresponding year. So if you hear about predictions for Google's Q3 09, that would be their third quarter of 2009. Pretty snazzy, huh.

What's on a balance sheet, you ask? Simple. There are three key elements to a balance sheet you should worry about. These include:

• Assets, which is another way of saying the financial value of a company. Assets can include anything that could be converted to cash, such as property the company owns, office equipment, etc. On balance sheets, though, assets are usually the sum of liabilities (more on that in a sec -- stay with me!), stock and "retained earnings" (aka earnings that are reinvested in the core business or used to pay off company debt).
• Liabilities, or debt the company has.
• The Net Worth of a company, which is just the assets minus the liabilities. It gives you a clearer picture of how much said company is really worth.

Phew, that wasn't too hard, right? I know it all sounds dreadfully dull, but you can't increase your savings and buy that Birkin bag without knowing the facts!

Now that you're a whiz when it comes to all things asset- and liability-related, balance sheets are usually split into two parts:

• The first part lists what the company's current assets and liabilites are.
• The second part shows how these assets and liabilites were paid for. The totals for each of these parts have to be equal.

One warning, though! Before you start thinking that all you need is a company's balance sheet before you decide to invest in them or not, you also need to look at the company's income statement, which discusses revenue and expenses. But that's a whole other post unto itself.

The balance sheet is simply one of the many statements that gives you, the shareholder, a better understanding of what you're getting into with a company. For example, if you're considering buying stock in a company with a massive amount of liability (or debt) on their balance sheet, you probably don't want to place your chips on the table with them just yet.

After all, every brunette on a budget needs to know when to hold 'em -- and the balance sheet is a great first step in telling you how to play your cards, or savings, accordingly!

Learn the lingo: Stock

Ever found yourself nodding knowingly at a cocktail party, martini in hand, in the midst of a gaggle of guys discussing the stock market?

They may think you're on par with the latest stock gossip, but if you're like most women, your knowledge of the market is dreadfully limited. While the men discuss EPSs, assets and balance sheets, you're single desperate thought is "Please don't ask me anything and blow my charade!" Well, us girls need not play the charade any longer -- if not only to further our moolah -- to hold our own with the big boys. The stock market, like most things in the financial world, is as easy as pie, after all. With that in mind, let's start from home plate: What does "stock" really mean, anyway?

Ever wanted to play high-powered corporate business exec for a while? Well then buy some stock, or shares, in a corporation. Doing so gives you part ownership in the company. You may not get the Blackberry, Benz and Yves Saint Laurent wardrobe that go along with being the business exec, but a girl can dream as she's purchasing shares of Google, right?

When you buy a company's stock, you are buying claim on their earnings and assets, aka what they're worth. Thus, when they profit, you profit. On the flip side, if they lose money, you also go under, but that risk comes with the territory of stock trading.

You can only buy stock in public companies, which means ones that are trading on stock exchanges such as the NYSE or Nasdaq (yes, that Nasdaq). There are many different stock exchanges in countries all over the world, ranging from the Nikkei Index in Japan and the Hang Seng in China, to the DAX exchange in Germany and the Sao Paolo Exchange in Brazil. All these jet-setting stock market terms are starting to sound kind of glamorous, right? Pepper your conversation with them next time anything stock market comes up -- I guarantee you'll impress!

But I digress. By being a "public" company, which again means you can buy a percentage of them, they are required to file their financial results every quarter (or about 4 times per year). These are usually called earnings statements (there's another term to throw out there at your next cocktail party), and they tell you, the shareholder, how their business has been doing in the last few months. Think of it as a report card, telling you how your child is doing in school. If companies don't publicly show their "report cards" to their parents, or shareholders, than oftentimes the company can get delisted from the exchange it's on. Sometimes, even criminal charges can be filed against the company's board of directors!

Owning stock in a company often gives the shareholder the right to elect the head honchos that run the corporation, depending on how much of a percentage of the corporation they own. Ever heard of Warren Buffett (aka "The Oracle of Omaha")? Maybe not, but he's made a living buying big into companies, and in many he owns such a large percentage (try 55%) that he gets a say on who he thinks should be running it. Pretty fabulous, huh?

But before you start fantasizing about your laser-pointer power trips in large boardrooms flanked with men in suits as far as the eye can see, do know that investing in stocks like our buddy Warren takes thousands, if not millions, of dollars, so I'm going to go out on a limb here and say us girls on a budget *probably* won't be attaining that status anytime soon.

One more key point to note is that while "stock" is a general, all-encompassing term, there are different types of company stock. These can include:

• Common Stock
• Preferred Stock
• Voting
• Non-Voting

And with that, you should now have enough vital knowledge of what a "stock" is to hold your own in any social situation and leverage your savings to boot!

Learn the lingo: IRA

Ah yes, the IRA, or individual retirement account, another way to reap the benefits of saving early for a lavish retirement!

But wait -- before we go any further -- I know I've probably already lost you. If you're anything like I was not too long ago, your eyes have already glazed over with boredom at the mere sight of the word "IRA," and I don't blame you. Unless you were a finance or business major in college, terms such as IRA were relegated to people like our parents, who are at an age to be concerned with all that stuffy money talk. Right? To put it bluntly, it's very, very relevant to people our age. Sorry to pop your head-in-the-clouds fantasy, but if you're thinking: "I'm only ___(insert whichever age you are), so I don't have to worry about that stuff yet," then you're dismissing ways to plan for your life that can make you very comfortable (and dare I say rich) in the future.

Guess what? Unless you end up relying on someone else to learn about these things for you and rely on them to carry your deadweight in the future (which I've written about here), it's time to start teaching yourself! What's more attractive than a very stylish girl who's also financially saavy? Don't worry, IRAs are not, I repeat not, complicated to understand. Cross my heart and kiss my elbow! In fact, they're actually quite simple, like most things in personal finance when you strip away all the technical mumbo-jumbo. Just remember not to feel intimidated by the lingo and the numbers, because if I can understand it (with an English/Journalism background), then you definitely can too!

To strip it down simply, there are many types of IRAs, but people generally choose either the traditional IRA, for any level of income, or the Roth IRA, mainly for people making under $95,000. Both serve the purpose of an "invidual retirement account," thus the name "IRA." You can only contribute to an IRA with earned income, so birthday money or Christmas checks don't count, unfortunately.

In a traditional IRA, you can contribute up to $4,000 of your annual income to the account. All money you put into your IRA is sheltered from taxes so, for example, if you put $4,000 into your IRA in one year. That would be $4,000 off your overall income that will not be taxed by the government. When you do decide to pull the money out, though, it will be taxed. And, if you withdraw the money before you're 59 1/2, you'll get charged a 10% fee! The fee acts as a way to curb your temptation of dipping into your budding nest egg; it comes as no surprise that it's highly advised against to pull your money out prematurely.

But what if you want to buy a house -- and the money you've been saving in your IRA would make a nice down payment on a mortgage? Good news! The exception to this 10%-fee rule is if you're using the money to buy a house or pay for higher-ed costs. If you're new to the world of saving and have a rough time saving in general, than having an account that rewards you for saving for the big purchases in your life, like a home, would be perfect for you!

The Roth IRA, though, is an even better match for the fiscally responsible ladies (or gents) out there. Why? Well, unless you're a high-power, corporate executive -- you know the kind driven around in their Lincoln towncars, sipping scotch and balancing million-dollar checkbooks -- you're probably making under $95,000 per year, which is perfect because it's the cutoff point to qualify for a Roth. (You can also make under $110,000 and still qualify, but you'll only be allowed to make "partial" contributions.)

Unlike the traditional IRA, the Roth IRA is not tax-deductible, but you have greater flexibility over your money. In a Roth can withdraw your savings after five years (regardless of how old you are), without being charged a fee. Any interest you accumulate in the account, though, can be taxed. Not making sense? Say after 10 years you have $20,000 saved up of your own money, with $5,000 earned in interest on the money. You can withdraw your $20,000 tax-free, but only have to pay taxes on the $5,000. Not too shabby.

If you're still at a crossroads as to which IRA (traditional or Roth) would be the best for you, a rule of thumb is that the Roth IRA is generally a better bet if you're younger.

Simply put, by saving your money earlier, the younger you start saving, the more you end up with in the long run (with the interest accrued).

It's important to note that an IRA, Roth or otherwise, isn't an investment, per se -- it's just a place to keep a chunk of your savings to use as investing in whatever you choose. That could include bonds, mutual funds, real estate, or even just one stock. Again, an IRA is another way, like the 401(k), that the government is rewarding you for saving for your retirement.

At this point, you're probably asking, "What's the difference between an IRA and a 401(k), then?" I admit, they do sound strikingly similar, but the fundamental difference is that one is employee-sponsored (the 401k, where your contributions are usually matched annually by your employer), while the other (IRA) is completely up to you to create and manage.

Both are fabulous ways to shelter income from taxes, though, so contributing to at least one is in the best interest of every saavy financier!

Gimme a (tax) break

Continuing in the tax vein, there are specific steps that 20-somethings (especially recent college grads) can take to shelter portions of their income from being taxed, and inevitably save more money! In order to start saving anything, though, you'll need to remember to file your taxes! I honestly can't believe how many 20-somethings I know who feel they can't be bothered to file because they'll only get back a small amount (say $100 or $200). Either that, or they rely on their parents to do their taxes for them -- no joke! 

To all the guys out there, if there's one way you can turn a girl off (aside from being unemployed or lacking personal hygiene), it's telling her that your parents do your taxes for you. If you're even reading this blog -- guys or girls -- I assume that you've decided to take some stock in your financial life, which means doing things, such as taxes and the like, yourself and not relying on Mommy and Daddy. (Contrary to popular belief, 21+ should never be the new 16.) 

With that out of the way (phew!), do not, I repeat, do NOT use a Form 1040EZ when filing your taxes because doing so prohibits you from taking advantage of the super-tax-payer-saving ways I'll mention in a second. Instead, use the standard 1040 form. I assume that it's a trade-off as to whether you want to fill out a no-muss-no-fuss form (the 1040EZ), or whether you want to get into the more nitty-gritty and wring some cash from your filing form (the standard 1040). Since the EZ is just so......easy.....most tend to file using the former, which is fine if you know you don't qualify for deductions. 

Here are some clutch ways to save yourself some greenbacks when filling out your 1040:

• If you're making less than you thought you would after graduation, don't fret! You're automatically eligible for a saver's credit, as long as you're lining any retirement plan you've chosen (401(k), IRA, etc.) with monthly contributions. The catch is you have to make less than $26,000 per year (not horrible, considering the cost of living differs from region to region), but you can save an upward of $1,000 in money that might have otherwise gone to paying taxes. Consider it the government's reward for savers who are thinking ahead.
• Did you know that your moving expenses (renting a U-Haul, gas for the trip, buying packing boxes, etc.) can be tax-deductible if your job out of college is 50+ miles away from your old address?
• The idea of paying off those student loans could give anyone an ulcer, but remember this: you can now claim up to $2,500 of interest on student loans in the form of tax deductions, even if you're parents are paying off your loan interest. Apparently, the government deems any payments from a parent toward their kids' student loan a "gift," which is great news for both parties!

Just remember, you can't garner these savings unless you 1.) file your taxes , and 2.) use the standard form 1040. 

Baby, you can drive my car

With gas prices up $4 a gallon, what's a girl-on-the-go to do? First off, kiss those $1.50-a-gallon days aurevoir, because they are never coming back. 

Now that we've taken a sip of that reality, have you planned how you will accomodate the dramatic increase? Back home I had two cars: a Land Rover and a Miata (since moving out here, my parents have sold the Miata, boo!). Now that I've come to grips with how I'll miss toodling around town in my Miata (I'm a convertible kind of gal), I'm left with the CA option of the Land Rover, a 2-ton behemoth that drinks about $100+ per fill and gets 13 miles to the gallon. 

We all know the obvious ways of saving on gas, such as carpooling, or walking when a car isn't needed. (Us fashionistas have been guilty on more than one occasion of opting to drive across a shopping center parking lot instead of walk because we've been in stilettos all day.) But what about not-so-obvious gas-saving ways? For instance, did you know that by leaving your windows open while speeding down the freeway, you reduce your gas mileage by 10% because of the air drag? To break that down in dollar signs, if it costs you $60 to fill your gas tank now, that would be $6 you literally throw out the window! To be a Brunette on a Budget is to drive on a budget, too, so try these tricks next time you're at the wheel to get the most out of your gas tank:

• In this day and age, there is no need to allow your engine to warm up. Cars in the last couple of decades have been built to run shortly after they're started.
• Try to consolidate how many stops you make when you're out and about. Stopping and starting the engine continually is a dreadful waste.
• Yes, the car next to you at the light may look like it wants to race, as it revs its engine, but this isn't Meet the Parents, and in the end, you'll have the last laugh when the light hits green and they blast off with their pedal to the medal. Both engine revving and "jack-rabbit starts" are sure fire ways to drain your wallet. For all you smooth operators out there, remember to accelerate slowly from a dead stop and don't press the pedal down more than 1/4 of the distance between it and the floor.
• Believe it or not, what time of day you buy your gas can affect how much you spend. When you buy gas during the coolest time of the day (either in the early morning or late evening), you'll be buying it when it's at its densest; because pumps measures volumes (and not densities), you'll be getting more for your money.
• If you see a hill coming up, step on it sistah! You save gas by accelerating before you're on the hill rather than when you're climbing it.
• If you're one of those drivers who fancies huge, deep tread tires on your vehicle, beware! Not only is it lacking in lady-like demeanor, but the deep tread creates a sure-fire way of wasting gas.
• The faster you drive, the more gas you burn. I've heard that driving above 40 mph forces your ride to overcome much wind resistance. Of course, we can't always drive 40 mph everywhere, but remember this gem when you're going 60, 70, or even 80 mph. Driving 55 mph, for instance, saves you 21% in mileage over going 65 to 75 mph. (If you're going to follow this rule, though, please drive in the far right lane -- no one likes a slowpoke!)
• While you're driving, rest your perfectly pedicured tootsies on the ground, not the pedals! Apparently even the slightest amount of pressure puts a mechanical drag on your car's inner workings, which not only wears them down, but demands more fuel usage overall.
• Why take the rough road when you can take the smooth one? Dirt and gravel roads steal away as much as 30% of your mileage. Stylish girls should never be driving on dirt back roads, anyway.
• If it's been days since you cleaned out your trunk last, now is the perfect time to start. Nix any old rubbish in back, since extra weight wastes gas, especially when driving up hills. I have to admit I'm guilty of this. My trunk is replete with a random Emeril Lagassi 40-lb CAST-IRON SKILLET (it was a wedding present; I love making fajitas!), along with pairs shoes and heavy car tools Love uses for fixing our ride.

Moral of the story is gas is on it's way up, kiddies, so buckle up and save smartly!

Learn the lingo: Tax-deductible

This next ditty goes out to Sophia on this warm Thursday night, who's been reminding me lately that she'd like if it I wrote on anything tax-related, since she's never taken a hypnotic journey through tax land.

Tax-deductible:

A tax-deductible item, or tax deduction, off your income is when an expense is lopped off your adjusted gross income (also known as your total income) to reduce the amount of your income that is subject to tax. Still not making sense? Having a tax-deductible on your overall income basically allows you to shelter a part or parts of your salary from being taxed in total by the government. Sadly, it's not as easy as simply setting some money aside, with the vague hope that the government won't notice (there's a term for that, it's called tax evasion!). The IRS has a list of expenses, along with specific rules surrounding each one, that are legally considered tax-free. These expenses include (among others):

• A home mortgage.
• Apartment rent, if you make under a certain amount.
• Business expenses (including all expenses it might take to start your own business, travel and meals. Technically, these expenses can't exceed your total business income).
• Charitable contributions (if you save the receipts, this can even include all your old junk you donate to Goodwill!)
• Any expenses incurred in the removal of building barriers to the elderly and disabled.
• Union dues.
• Medical expenses that exceed a certain percent of your total income.
• Any work-related apparel. This can include uniforms, or necessary items such as safety googles, safety helmets or heavy-duty gloves or shoes.
• In some situations, moving expenses can be tax-deductible.

Finding ways to ensure that portions of your income are tax-deductible is a fabulous way to save more money that would have otherwise gone to Uncle Sam, because it lowers your total taxable income. Say you make $28,000 per year, and you pay $1,000 in rent every month. Last I checked, the cutoff point for rent being tax-deductible was if you made $30,000 or less, so you would essentially shelter $12,000 worth of rent per year from being taxed, which means more money for you in the long run!

Learn the lingo: Debt Consolidation

Before I began learning about finance, it was the terms involved that seemed the most intimidating to me, and I know I'm not alone. With words and acronyms such as "EBITDA," "managed futures," "margins" and "tax-deferred income," it can seem like a whole other language! And with a language that sounds so....well, boring.....why would you want to learn how to speak it, right?

Believe it or not, all those boring terms are actually relevant to your life. If you ever want to 1.) invest in the stock market, 2.) learn ways to legally shelter your income from excessive taxes, 3.) buy a house, 4.) apply for a loan, or 5.) find a mutual fund to manage your investments, among countless other things that pertain to your money, you need to learn the lingo. So, without further ado, here's the first of my daily definition series. . .

Debt Consolidation:

Debt consolidation is when you do just that: consolidate (or merge) your debt into a single loan or debt. Let's say you have three loans, totaling $13,000:

• A high-interest Macy's credit card, with $3,000 left to pay off,
• a high-interest Bank of America (BofA) car loan, with $8,000 left to pay off,
• and a low-interest Washington Mutual (WaMu) credit card with $2,000 left to pay off.

Since three out of your two debts are high interest, consolidating them under one umbrella, such as your WaMu credit card, makes more sense because you'll be paying a lower interest rate on your combined debt of $13,000. I know what you're already thinking -- why would WaMu want to assume responsibility for the $11,000 I have in car loans and Macy's credit cards?
Simple! What basically happens with debt consolidation is that WaMu agrees to pay off your car loan and credit card entirely, but then you owe WaMu the amount they paid off ($11,000), plus a lower interest rate than what you would have paid to BofA and Macy's. WaMu is cutting you a deal of sorts: by owing them the money instead of BofA and Macy's, they are rewarding you with a lower interest rate, which saves you lots of money you'd have otherwise been throwing away on higher interest rates. Debt consolidation is also a great thing because it allows you to pay off your unified debt with one payment every month, instead of three separate payments (in this case). With this increased organization, it encourages you to remember paying your single bill on time every month.
The downside to debt consolidation is that it frees up credit cards that were otherwise full, tempting you to start spending with them again, but resist temptation and pay off your existing debt first!

"Let's go back, back to the beginning"

I suppose one of the first things I should have written about when I started this site is how to set up your own budget since this is a website about personal finance and budgeting, after all. If you're already reading this, I assume you know how important it is to secure your financial future (if not, read my previous posts!), and first step in doing that is to do the following four things:

• Budget: The backbone of personal finance is a budget. I know, the word sounds intimidating, as well as boring and uptight, right? Well it doesn't have to be! Most people, even if they don't keep a budget on a paper, keep a daily budget in their mind. Ever thought twice before buying that book, because you know if you spend the money you won't be able to buy that sweater? Then you're already budgeting. It's important, though, to start listing out your specific budget to gain a bird's eye view on your money, what you spend it on, how often, whether you're over-spending in areas you could cut back on, etc. Need help on how to get started creating a budget? Click here, print out and start budgeting!


• Rein in your costs: After you've filled out your fancy little budget, now you should have a clearer picture of where you can start cutting your expenses. Do you really need that $4 Starbucks latte every morning? Do you buy your hair products directly from a salon, or do you save money by buying them at Target? These are the kinds of questions you'll be asking yourself as you start mapping out where you can shave off dollars here and there. Every dollar ends up counting in the long run.


• Dig yourself out of debt: Maybe you shouldn't have taken out that loan to go to Europe...or charged the entire trip on a credit card after your loan was denied. Maybe your college loan has got the best of you and is taking eons to pay off. Or maybe you wished you had waited till you bought that new car right after graduation. Whatever the case, you can't make money or save while you are in debt. Why? Because when you borrow money, you are being charged a fee to be able to use it. This fee is called "interest" and it's what you have to pay on top of the money you borrow. Using credit isn't a bad thing; we all need a good credit history to make the bigger purchases in our lives, such as buying a house. But if the monthly payments on your credit card or loan begin accumulating and it's getting harder for you to make the payments, then it's time to get your financial life in order. Wanna know the secret to digging yourself out of debt? Pay more than the monthly minimum every month. You aren't really "saving" if you're losing money by taking longer to pay off borrowed money. Why take 5 to 10 years to pay off a credit card with the minimum amount every month (the minimum will cost you thousands of dollars in interest over that period), when you could pay it off as fast as possible and save for bigger, better things?


• Save for Retirement: I've said it before and I'll say it again -- the majority of us will need a nest egg to fall back on once we retire, retire early, or if something bad happens and you aren't able to work anymore (the last case is also a good reason to begin investing in a company insurance policy!) . The "or's" are endless. Don't get lazy with saving and think that someone else, such as a family member or spouse, will save for you and dig you out if and when you're in too deep. Take advantage of the fabulous tax benefits of investing in IRAs and 401(k)s -- doing so is essentially taking out an insurance plan on your financial life!

Guess who just got a free iTouch!?

Me! Woot!! Unfortunately, I had to spend $1,200 on a new computer to get it, but it's a free iTouch nonetheless (retail value: $300). I'm not the type to fritter my money away on snazzy electronics, but my 2004 iBook laptop was on its last legs, so Love and I decided we would use our stimulus check (thanks, George!) of $1,200 on a new MacBook for moi. The iTouch just happened to be included in the deal, which is excellent because now I can check how my stocks are doing in the market during the times when I'm not at my computer. On top of the free iTouch, we also got $100 off because Love is a student and, well, I guess Apple wants to reward its buyers for learnin' the 3 Rs! ;) My new laptop is equally fabulous; I can now load webpages in less than five minutes and open multiple applications without my comp freezing. I feel like a whole new woman!

Moral of the story: Now is a GREAT time to invest in a new Mac (if you need one). Not only do you get $100 off for being a student (if you are one), but you also get your very own iTouch, which you can use to further your budget in a myriad of ways (i.e., following the stock market, reading up financial advice, finding the best deals in town, etc.)!*

*(Checking Facebook 12 hours a day on your new iTouch will not, sadly, make you any money).

The 411 on 401(k)

Not all stocks are (obviously) created equally, and although I herald the benefits of investing, it's important to assess the risk involved, 401(k) included. It turns out, losing money in your 401(k) during some years is a good thing, according to J. Michael Scarborough, president of Scarborough Capital Management and author of 401(k) Knowledge. Scarborough argues that a "properly invested" person will lose money at times (in a 401k) because a smart investor needs exposure to stock funds to meet retirement goals (read: investing in the stock market, though it comes with risk, is a good thing, especially when done through a 401(k)).

For those of you who are still unfamiliar with how 401(k)s work, what happens is you set up a contract of sorts with your employer, specifying a certain percentage of every paycheck that will go directly into a mutual fund account (I opted for 3% per paycheck). That money gets automatically put into a mutual fund, where it is re-invested in certain stocks (associated with a general choice on your end of what type of investment you want the fund managers to be making -- perhaps an emerging markets plan, where they invest in overseas, higher-risk companies? Or perhaps you'd like a more long-term growth package? Etc., etc.) I chose the Growth and Income, lower-risk package.

The 401(k) investment does not guarantee returns every year. There will be down months and maybe even years, especially in today's dilapidating market, but the overall point is that in the end, you will have a hefty sum to pull out all for yourself once you're ready for the bluer skies of office-free life.

Selecting the right retirement plan can be tricky, and many like to fall back on their employers to make the decision for them. In most cases, companies leave the deciding up to you, though, to decrease the risk of them making the "wrong" decision and getting blamed (read: plethora of lawsuits). Scarborough says that currently, many workers could be making better choices by not, for example, "being loyal" and investing in their company stock, when the company doesn't really care. He says investing like this limits employees' diversification.

Scarborough also mentions that the worst thing an employee can do -- are you ready for it boys and girls? -- is to turn down an offer to participate in a 401(k) in the hopes that someone will come along and provide retirement moolah. This could include counting on finding a husband or wife to save for them, hoping that an inheritance will come to fruition right around when you plan on retiring, or that "someday" a big promotion will come along and make saving easier.

"To make the assumption that someone, somewhere is going to provide is a crapshoot," Scarborough says. "Retirement does, in fact, happen for most of us." The financial guru, in turn, says the biggest reform he'd like to see in 401(k) plans is that every employee would be required to sign up.

Still not sure about why you should save by investing in a 401(k)? Read my earlier article, "When I'm 64."

A pain in the pump

As I'm sure you're well aware of, crude oil prices are on an ever-rising ascent with no drop in sight, which means gas is quickly becoming a pain in the pump. Forget being offered coupons these days: with the average price of gas across the country rising to rest slightly above $4 per gallon today, it looks like oil is becoming the new currency -- in the form of gas cards -- that companies are using to lure consumers into their web.

Hotels.com is rewarding guests who book a minimum three nights through them with a $50 gas card; many smaller banks are offering the same deal to customers opening checking accounts with them. Is golf your thing? If you buy certain drivers from Callaway Golf Co., it's likely that you'll be rewarded with a $100 gas card for choosing them. "Free gas" is becoming the new benchmark for giveaway goodies that companies, well, give away.

I'm all for it! With all the talk of hybrid cars and their ilk, most of the country (including my Hyundai) runs on good old-fashioned gasoline, so when companies offer to essentially fill up for you, I say lap up the offers -- but with one caveat.

Don't get lured into buying more than you normally spend just because your purchase comes with something "free." It's an easy trap to fall into, but just ask yourself, as you're handing over your check card or cash, "Do I really need this? Or am I just buying it because it comes with perks?" Those incessant Borders Rewards coupons that continually flood my inbox are a perfect example of this mentality of buying. Do you really need that dvd box set of every season of Seinfeld right now, or are you just impulse-buying it because you've got a 30% off coupon in your back pocket? (By the way, try Amazon.com, I guarantee it's cheaper.)

That being said, if you are in the market for a new set of clubs, or need to find a hotel to stay in, let the wooing of the free gas cards begin! If you have to spend the money, you may as well earn some back -- especially when these offers probably won't be around for the long term. According to Carnegie Mellon University marketing professor Baohong Sun, the free gas card trend should fade by the end of summer.

How it pays to save

I have a confession to make: I am addicted to sales. Retail sales, to be exact. More than I love shopping, I love a great bargain. Finding one is like unearthing black gold in our current economy, but it can be frustrating for many -- sifting through endless merchandise is a daunting task, but this Brunette on a Budget is always up for a challenge, especially when faced with the spectacle of one Saturday afternoon. After lazing by the pool Saturday morning with Love and Sophia in 98-degree weather, we braved the oppressive humidity to make a day of it at a mall some 20 miles south (The Nordstrom Rack (NR) was what initially drew me to the site).

Behold the power of how a fabulous sale will help get you by in today's recessionary environment:

• BCBG Sweater - Originally $160 at Nordstrom, bought at NR for $30.
• Khaki slacks - Originally $88 at Nordstroms, bought at NR for $25.
• White circle statement necklace - Originally $14 at Nordies, bought for $4 at NR (Ok, not huge savings, but it was a great deal for an impulse buy).
• Michael Kors khaki trenchcoat - Originally $160 at Nordies, bought at NR for $80!!!!! (It's not a Burberry, but it will have to do for the next few years. It fit like it was made for me).
• Khaki slacks - Originally $88 at Nordies, bought at NR for $25.
• Calvin Klein necktie - Originally $88 at Nordies, bought at NR for $24. (For Love.)
• Ben Sherman dress shirt - Originally $85, bought at NR for $17.
• White cropped pants - Originally $44 at Banana Republic, bought at the Banana Republic factory store for $23.

That's $499 in total savings!

That 500 bucks I would have otherwise spent on full-priced (or near full-priced) clothing at Nordstroms, I can now save to use later on various other "stuff," such as a handful of nice dinners out, two airplane tickets to California, or a couple iPhones for us to use. Or, I can take my "winnings" and pad my savings account with it. All the flexiblity with extra money I free up reminds me of why I love saving in the first place. It's a game -- play it!

Let them eat coupons

Many people gripe that they never have enough money -- even I've been guilty of uttering it on more than one occasion -- but while most think it's because they don't make enough, it's usually because they don't save enough.

Guess which income bracket (as a whole) routinely visits websites such as SlickDeals.net and FatWallet.com to garner ultimate savings? Or, for that matter, which income bracket scours the Internet the most, looking for above-fabulous deals and printable coupons? If you guessed low-income web surfers, you're wrong. According to a still-relevant article published in Time Magazine in September of 2007, statistics show that the web traffic to the aforementioned sites, for example, actually hail from the wealthiest segment of Internet users! Thirty-two percent of Fat Wallet users, for instance, earn between $60,000 and $100,000 per year, while 13.9% earn between $100,000 and $150,000. The same goes for Ebates.com -- over 23% of visitors to the website earn over $100,000 per year!

Essentially what the rich and famous, I mean frugal, are showing us is that it takes more than just making a lot of money to be "rich." It takes saving. The most-searched terms within the higher-income demographic included such keywords as "cheap," "discount" and "bargain," and usually gravitated toward travel-sector specific niches, such as "cheap hotels," "cheap cruises," flights and car rentals. Interestingly enough, when higher-income people search for consumer items such as cars or electronics, they are less likely to attach "cheap" or "bargain" to the search term -- probably because they expect travel to have the widest range of pricetag fluctuations.

So, if high-incomers are browsing discount sites more than low-incomers, where are the low-incomers dwelling on the net? According to the Time article, it turns out they are exploring designer clothes, expensive cars and exotic electronics.

And sometimes, a cell phone isn't just a cell phone, especially to the lower-income demographic. The climax of this moral resides in a statistic from the Apple iPhone website. Yes, we'd all love one, but at about $399 to $499 a pop, they are one expensive form of communication. Interestingly enough (at least since late last year), "the income segment with the highest percentage of visitors to the iPhone site was 18 to 24 years of age, earning less than $30,000 per year." And then we wonder why many of us can't afford to buy a home in our 20s and 30s....even in our 40s.

Simply put, saving is a state of mind that, as evidenced, even the rich can afford! As cliche as it sounds, don't become a statistic.

Coming Out About Outlets

This past weekend, I had the fabulous idea of trekking to an outlet mall that my coworkers have been raving about. "Look at my Burberry underwear I paid $7 for!" said Willie from advertising, exposing the tell-tale novacheck plaid waistband of his new pair of Burberry tightie-whities above his pants. He then bragged that he had bought three Burberry scarves for $19 each -- ALL at the outlets. It was like waving a hot dog infront of a morbidly obese ballpark food junkie. All I knew was that I, too, had to cash in on the savings.

So my sister Sophia (who's staying with us for the summer), Love and I all piled in the Accento to make our way up to the infamous "Leesburg Premium Outlets" in Northern Virginia. Lolar bear was intially going to partake in the journey, but with temperatures approaching 85 degrees, having a toasted Lola in the car while she waited for us in the parking lot was not the kind of hot dog I wanted waved infront me.

I was a bit apprehensive to going up, what with gas prices at current levels, and the distance of the outlets from us (a little over 40 miles), along with my past misfortune in finding NOTHING whenever I do venture to outlet stores, I was afraid the trip, and my time, would be wasted. Always the one to succumb to curiosity, though, I said "why not." It was a balmy Sunday, after all, and we had no other plans.

On the way up, we hit two toll roads we hadn't accounted for -- not terrible, they collectively cost $4.25 one way, but roundtrip that is an extra $8.50, on top of the gas it cost. Once we pulled off the freeway 40 miles later, my eyes twinkled at all the dazzling signs of Coach, Off 5th, Banana Republic, all replete with promises of discounts and markdowns.

Two hours later, as I trudged back to the car with Love and Sophia in tow, let me just say I was overwhelmingingly disappointed. We had traipsed to the far nether regions of the sprawling outdoor mall and back, and all I had to show for it was a pair of brown capris I bought at Banana for $23. Love had more luck than I did (as he usually does), and made out like a Banana bandit with polos and sweaters. Let me tell you why I was disappointed.

Sure, it was fun just hanging out and pilfering through pants and polos, but was it worth it? No. I firmly believe, and this latest trip just reaffirmed my theory, that outlet and their "sales" are mainly a myth. Case in point: We went into Lacoste and Diesel, and found jeans and shirts that are much cheaper at Nordstrom's half-yearly sale than they are at "discount" prices at the outlets. And there were many things I saw on Sunday that I know are cheaper online. Remember those $19 scarves Willie boasted about? Try $199. I told him to double-check his bank statement, as it looked like he might have forgotten to see a second "9."

That's not to say that you can never find a good deal at an outlet store, but do you really want to spend all Sunday riffling through some discount rack at the Off 5th outlet, just so you can find a reject 7 for all Mankind shirt in a hideous color from two seasons ago? I can think of 10 other ways I'd rather spend a Sunday. Not only that, but the cost of gas and tolls roundtrip completely negates the "savings" you gain from shopping at the outlets; you may as well just troll your local mall for a clutch deal.

Suffice to say, unless I happen upon an outlet on my weekend shopping excursions, I highly doubt I would ever make a special trip again -- I would just end up toting a pair of cropped pants and disappointment home at the end of the day.