Tips for the modern 'Recessionista'

The economy is recessing. Times are tough. People just can't afford to spend as much on fashion these days. But hey -- that's ok. I think that the culture of overindulgence had been grotesquely spiraling out of control for some time. Not to say that spending money on fashion is bad; it's not. But there must be boundaries. It's not worth it to ruin your credit for the newest Louis Vuitton bag. You have to pay your rent before you pay for the new Louboutins. I'm simply stressing practicality and fiscal responsibility: if you don't have the money (and you know you won't be getting the money any time soon), then exercise restraint (believe me, I KNOW personally that this is not easy).

So, keep track of your purchases and make sure you can pay for what you buy. Here's how:

• Write down each one of your purchases (you can do this for other catagories, too -- eating out, drinks, bills, gas, etc).
  
• Keep a detailed list and calculate how much you spend per month on shopping.
  
• Add up all of your mandatory expenses (= rent, groceries, phone/electric/gas bills, transportation, & any other essential monthly bills you have).
• Take your net income (what you take home after taxes) and subtract your mandatory monthly expenses (not including shopping costs). We'll call this "money left after bills."
  
• Note the amount you have left. See how your monthly shopping expenses compare to your "money after bills". Are they more? (If so, you're spending more than you have -- RED light!) Are they less? (Good. you're not spending more than you have....but how close are you coming?)
• Now make a plan. How much of your "money left after bills" should you be saving per month? (Definitely save some. You never know when you'll need an emergency fund, especially in this economy.)
  
• Create a monthly shopping budget (less than your "money left after bills"). Stick to that budget, and put your savings into some type of savings account.
  
• The key is to know how much you have, and to realize how much you're spending. Once you see and process the numbers, you'll find it easier to say "no."
  

Voila! You're on your way to becoming a savvy recessionista.