Greetings Divas and Gents! And welcome to the beginning of what I am praying will be a productive work week. As I sit here to prepare for another busy week, I find myself reminded of an episode of one of my favorite television shows of all time...Sex and the City! In addition to the many thought-provoking conversations that have spawned from the life events of its characters, Season 4's "Ring a Ding Ding" offered an interesting money lesson. Let me back up for a second and explain....
In "Ring a Ding Ding," Carrie Bradshaw finds herself in a position where she can either purchase the apartment she had been living in for about a decade, or move out in 30 days. Once she decides that she wants to purchase her apartment, Carrie needs to find the money for a down payment. She goes to a bank with the hope of obtaining a loan, and was told that she was "not a desirable candidate for a loan." It turns out that Carrie had only $700 in her checking account, and $957 in her savings account. Combine this with the fact that she had no other property, stocks, or bonds, and it's not hard to see why the bank was unwilling to take a risk in loaning Carrie money.
In the next scene, Carrie is discussing her "financial messiness" with Miranda in a shoe store. It was during this conversation that that Carrie realized that she has about 100 pairs of shoes at about $400 a pop...which comes to $40,000...which, coincidentally would have been enough for a down payment...ouch! So now what? At the end of the show, Charlotte gives her old engagement ring to Carrie to use for a down payment on the apartment, and Carrie promises to pay her back. Everyone's happy!
So now for the money lesson...is the down payment for your new home in your closet? Or maybe your children's college tuition? Or is it your retirement? These are the questions I began asking myself as I watched this episode. I started wondering what my bank accounts would look like if I said "no" to a new pair or shoes more often than I said "yes." Honestly, the thought is quite unsettling. Now, I have recently become a firm advocate of rewarding myself, especially since I work very hard for the things that I want. But how much rewarding is too much rewarding?
Unfortunately, Carrie rewarded herself with scores of gorgeous shoes, but her checking and savings accounts were suffering. Aside from the dire fact that she needed to find money for a down payment in order to stay in her apartment, I found myself wondering what Carrie would do in an emergency situation. Interestingly enough, this is quite a common conundrum for many professionals. Sure, we have good jobs with meaningful salaries and excellent benefits, but are we aggressively saving for a new home, or tuition, or retirement? As easy as it has become to use a credit card to purchase a new purse or a new computer, are we inadvertently living above our means? You see what I mean! This episode had me all in my thoughts!
After going back and forth in my mind about how to not put myself and my family in the same situation as Carrie, I resolved to do a few things:
1. Budget Rewards - I will include my rewards into my household budget, and will stick to it. I will also ensure that these rewards do not exceed what I can actually afford.
2. Avoid Using Credit Cards - The amount of money I spend making credit card payments can easily be tossed into an interest-bearing money saving account.
3. Continue Contributing to Retirement Plan - This one is easy to do, and I don't plan on stopping!
4. Create and Maintain Financial Goals - Paying off my student loans and car notes, and saving for our dream home are two goals that motivate me to make good financial decisions...like buying 2 pairs of shoes instead of 4.
5. Save, Save, and Save Some More - No explanation needed...right?
I'm so glad I had a chance to revisit this episode of Sex and the City, as it forced me to think about how I spend my money as an adult. The first time I saw this episode I was a broke law student with no money to spend or save, so I had a different outlook on Carrie's problem. As an adult, however, I realize that it's not all about Manolos and Louboutins...I'm not saying that it can't be about them a little bit...just not all about them! In sum, I realize that I cannot spend away all of my earning on shoes, clothes, electronics, vacations, etc...it is also important to save, invest, and work towards a debt-free life. Comment if you feel me!
Have a great week!