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Champagne Tastes

March 20, 2009

The Modern Girls Guide To Life is a stylishly smart TV series, on the Style Network, that delivers useful tips for today’s busy woman.  On a past episode (see our video in the right sidebar), I share financial advice with Modern Girls Guide To Life co-stars, Jess and Claudia, on how to live the fabulous life and still maintain a healthy pocketbook.  This was taped many months ago, but in this economy, my lesson on saving is proving to be the saving grace for so many families!  How has the economy changed your spending habits?  I would love to hear!  Leave a comment.  

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“Some financial experts advise their clients to take 40% of their income to pay for committed expenses, such as housing and other necessities, while only saving 10% of their income to pay themselves,” explains Shannon. “I have a different approach for the trendy girl who loves those Manolo Blahnik and Jimmy Choo shoes.”

Shannon expresses the importance of the 15% rule for the over-spender, and dishes out a fool-proof way for the modern girl to budget her money and still be able to take that long-awaited trip to Tahiti, or buy that gorgeous Prada bag. 

The following are Shannon’s 5 steps for keeping your “champagne tastes” within your monthly expense budget: 

 

  • Write down your daily expenses every night for two weeks.
  • Total your expenses in categories (i.e., car, rent, utilities, Starbucks, etc.). Calculate the percentage each category represents of your total expenses.
  • Come up with your new and improved expense percentage, starting with 15% off the top to cover any expenses that you like. Next, put 50% towards your rent/mortgage and car payment, followed by 15% for food and utilities. The remaining 20% goes towards paying off credit cards and other debts.
  • Work on cleaning-up your credit! Get a copy of your credit report and make a date with a debt consolidation expert to develop a plan that will help you see positive changes on your credit score (often in as fast as 6 to 8 months).
  • After 6 months, re-evaluate your plan and make any changes necessary, so that this will be a plan that you can stick with.
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