Americans Save Less, Spend More

Americans save less, spend more
Personal savings rates fall to lowest levels since the Great Depression
Tuesday, January 31, 2006
By MARTIN CRUTSINGER
OF THE ASSOCIATED PRESS

WASHINGTON, D.C. - Americans spent more than they made last year - something they haven't done since the Great Depression, a time of massive unemployment and soup lines.
This time the trigger was good economic news - a booming housing market, which has made millions of American homeowners feel wealthier and thus more willing to spend with abandon.
Government statistics released Monday showed they may have gone overboard with all of that spending, consuming all their after-tax income and then some.

The Commerce Department reported Monday that Americans' personal savings rate fell into negative territory, minus 0.5 percent, last year. That means people spent all their after-tax income and then had to dip into previous savings or borrow more to finance their consumption.

The savings rate has been negative for an entire year only twice before, in 1932 and 1933 - two years when Americans were having to deplete savings to cope with the massive job layoffs and business failures caused by the Great Depression.

Read more here:
http://www.pjstar.com/stories/013106/NAT_B8RNGJMT.025.shtml

Just thought you'd like to know. Read more!

Choices

Every day we make hundreds, if not thousands, of choices. Some are mundane, like picking what color socks to wear. Others carry the weight of 10,000 bowling balls on our mind, like deciding whether to stay in a stale relationship. The rest fall squarely in between and become part of our routine, for instance, whether to go out with friends on a Friday night when you have no money in the bank.

Choices make us who we are. Choices place us where we are today. Choices, not fate, not instinct, make us human and alive.

I bring up the above points because I know too many people who fail to make the connection between their choices and their lot in life. My mother, for instance, spends a lot of time blaming others for her problems. She hates her house, she wishes she could take vacations, she doesn't know where her retirement will come from, she cries because she has no money. All of this could have been prevented, she believes, had she been born into a "rich" family, if God would have blessed her with a smarter brain, if the government would have given her more in times of need. She spends so much time fretting about what she was not given that she cannot consider the choices made to bring her where she is today.

I'll pause here for a moment to let you know that I love my mom. She's a caring, selfless woman who will do anything to make her family and friends happy. People like being around her because she's warm and affectionate. She is a wonderful mother and I could not have asked for anything more growing up. But our relationship is complex, and like any, there are quiet moments between us, times when we've hurt each other and instances when we've likely hated each other. This is not one of those times. I use her as an example simply because I've had these conversations with her and have often pondered with love how to better understand her, communicate with her and help to give her the life she desires. No more, no less.

I asked her once whether she thought her life would be different if she would have gone to college. She responded that school simply wasn't for her. I asked why she decided to have as many children (4) as she did. Not up to her. The list went on. At each point where she could have made a critical decision, she did not own up to the responsibility that she made a poor choice.

If you are in an unstable financial situation, stop to think for a moment about how you got there. Were there choices made that could have been different? Did you overspend on your Christmas shopping and now face high credit card bills? Did you feel like you had no choice in the matter? If so, stop yourself right there. No one forced you to buy all those gifts. That was a poor choice you made.

Now, you're probably thinking something like, "But my kids have been so good. They deserved those presents. And I had to buy something nice for my husband/wife."

I'll tell you something. As a child, I'll admit, I loved getting toys and gifts for Christmas. The bigger the pile under the tree, the more excited I got. But looking back on my childhood, I can't remember one thing I received for Christmas from Santa. What I do remember is decorating the tree with my mom each year, putting out cookies and milk for Santa (and a carrot for the reindeer!) and gathering with my family all day long for hugs and meals. My entire childhood is filled with memories of family, funny stories and loving gestures - not toys or material things. My point is that piling presents sky-high under the tree may strike you as something great to do for your children as a parent. But those presents won't ultimately mean a thing to a child who is loved, cared for and adored by her parents. So rather than spending all your resources buying presents that you can't afford, consider next year putting a little extra effort into de-materializing your holiday season. That's a better choice, in my opinion.

Maxing out your credit card is a big choice, but some of us also don't realize that the little choices we make can affect our stability. I was recently talking with a co-worker who told me that she doesn't currently put away any money into savings from her paycheck. Yet she lives in one of the highest-priced areas of Chicago. That's a poor decision. Living in a less expensive neighborhood, where rent is just $100 less per month, would let her save an extra $1,200 per year.

I think you can see what I'm getting at. Every choice you make, large or small, has consequences. Take some time to think about what your choices have led to. Do you make poor decisions? How can you turn your decision-making pattern around? Sometimes, simply stopping or slowing down for a moment to consider the outcome will help. Being conscious of your actions, living in the present, rather than the past or the future, and understanding your resources and surroundings will help. Recognizing the opportunities that come with each choice, rather than focusing on the doors that have closed, will allow you to take ownership of your future. Understanding your choices, your options, will set you free. Read more!

Sprint Stinks

From their supposedly good deals on phones which I've determined simply don't exist, to a circular maze of customer service numbers to sales offers that unequivically exclude existing customers, Sprint-Nextel is a company that makes me want to tear my expensive, highly manicured hair out!

As many of you know, I don't own a land line. I use my Sprint PCS phone for all my calls and save a pretty penny because most of my friends and family also use the company. This means we talk for free most of the time, without paying extra for long distance. (I actually convinced several people to change to Sprint for that very reason - we all wanted to be on the same network.) I've used Sprint for more than two years now, and never had a problem...until now. I'm trying to renew my plan and get a new phone. Sounds simple, right? Wrong!

Brian and I are always trying to get the best deal - phones included. So we did a ton of research before we called Sprint to find the models we wanted at the right price. (Here it is.) We called the customer service line to get the phones, and after several discussions, were told that we have to get our phones from a Sprint store.

We tried three Sprint stores in our area, all which had different inventory, none which had the phones we want. Most stocked high end phones from very cheap brands, like LG, which I refuse to buy because I've had a few and they're all pieces of junk, or phones that are out of our price range. The Nextel store we visited (had a Sprint logo but was previously owned by Nextel) only had four or five Sprint phones in the whole store! We were told that we couldn't purchase ANY of the Nextel phones because they weren't wired for the Sprint network.

At another Sprint store (on Lake Street in Oak Park) Brian actually had a saleswoman tell her manager she was off the clock when he ordered her to answer Brian's questions...right in front of Brian! Talk about unprofessional.

We were clearly done with Sprint stores, Sprint-Nextel stores or any other version of said stores. We took our cause back to the customer service line, who again told us to visit a store for the phone we want.

"But we can see it on your Web site," we pleaded, "can't we just order it from you?"

No, says the agent named Sam or some other anglo-friendly name who had a suspiciously Indian accent (and by suspiciously, I mean his real name likely wasn't anglo-friendly, which is cool, but dude why pretend you're from the US? The jig is up. We know you're foreign. If only you'd tell us, we'd love you for your crazy chic accent. Perhaps we'd just hang up on you, which in America is actually a sign of love. I hang up on my mom all the time, for instance.).

Why don't you try ordering from Sprint's web site?, recommends not-Sam.

Fine. The only reason we didn't do it in the first place was because we wanted to actually see the phones, hold them, before we purchased them. But at this point, we're settle for a screen ogle. So off to the internet we go.

We actually found a few more cool phones, one in particular I remember that was red (red!). I went through all the steps to buy my awesome red phone, only to find that my $150 rebate, instantaneous for new customers, is not as prompt for existing customers. I'd have to purchase the phones on my credit card, float the $150 charge for up to FOUR WEEKS, and then do the reimbursement thing.

We called customer service back and they told us there is no possible way to give an existing customer an instantaneous rebate. Whu the? We grew more frustrated by the minute.

We tried several other options desperately hoping to keep our Sprint service, even considered me picking up our two lines under my name (they're currently listed as Brian's) to get the instantaneous rebate, then cancelling the lines we have, but there's no guarantee we'd be able to keep our numbers.

I looked into US Cellular but we'd have to get a more expensive plan due to all the free Sprint-to-Sprint minutes we'd lose. (I also considered going back to Verizon, which I used years ago, but remembered how awful their customer service was as well and quickly squashed that thought.)

So what's our final decision? Well, as soon as I get all my work checks back and my accounts settled (should be mid-February), I'll have to float the darn money on my card until the rebate comes. Brian's phone started malfunctioning in October, there's no telling when it's going to expire. My phone still works but is clearly on its last leg and doesn't really do text messages, which all my girls insist on sending. It's obvious that we need the new phones soon (I constantly worry that Brian won't get an emergency call if I'm ever in trouble).

I'll stick with Sprint, but I hate it. HATE IT. And as soon as I can convince all my friends and family to go somewhere else, we will. Until then...rasberries! (she says with disdain, shaking her fist). I'll just deal and whine about it. Read more!

The Good, The Bad and The Ugly

The Good: I finally got my big reimbursement check from my employer yesterday. We can all breathe a collective sigh of relief that it reached me before my rent check is due.

The Bad: I need to figure out how to submit my flex spending expenses. I've spent about $150 on health care bills this month (mostly braces) and am have no idea where to find the forms. I know participating in flex spending is a good thing, but I'm so short on time.

The Ugly: I wiped out hard this morning while running to catch a train to work. The train came early, I was late, I ran for a full block in heels, across an intersection and up a flight of stairs, then slipped on rock salt and landed on my ass in front of an entire train full of people. I think I did some sort of twist mid-air because I started out falling forward, yet somehow by the time I hit the ground I was lying on the cement, my hair stuck in rock salt. Did I mention the awful noise I made as I was falling, arms splayed in front of me? It sounded like this: EEEEIIIIIUUUUUGGGGGHHHHH!!!!!! Yeah. Pretty. Sadly, I can report that as a result of this incident, both my brown boots and my pride are quite scuffed. Read more!

Biting the Butt

I've been writing a lot about "serious" financial topics, like goal setting and reimbursement payments, etc. Thought you might like to hear a funny story, Budgeting Babe style, about a recent night out...

Some special nights are spent dining on extravagant food in hipster joints, dressed to the nines, while other nights, like a recent one of mine, are spent at a cozy bar on the South Side eating pizza and hanging out with plumbers who happen to know your uncle.

My friend and I decided to go skip the pretensiousness of the Lincoln Park/Near North Side neighborhoods and hang out in the Loop - let's just say we didn't want to change out of our work clothes and into an outfit that screams "I've got cash." (Oh, yes, you do detect a bit of snark.) Since our favorite Loop bar, Govnor's, is currently closed indefinitely, we decided on a small place near the El on S. Wabash, called "The Wabash Tap." We'd heard the bar was nice and knew it was cheaper than the Houlihan's, Bennigan's and Hyatt Big Bar that are within walking distance from our office. Plus, my friend's boyfriend lives steps away from The Wabash Tap.

The bar itself was great - it reminded me of a place I frequented in college. The crowd was friendly and the service was adept. We were a bit disappointed with the food - a $10 pizza was just a Jack's Frozen Pizza that you can find for $6 at your grocer's, and the nachos only involved cheese and jalapenos (we were expecting sour cream and ground beef). Still, since we split everything between us, $10 for dinner is not a bad price.

After we ordered our first beers and chatted a bit, mayhem began to ensue. From a group of guys on the other side of the bar, a very drunk lad approached our table. We joked around with him for a few minutes - he was a plumber from the South Side having a few drinks with his crew after work. They came to The Wabash Tap often. It turned out that he and I grew up in neighboring areas of the city. Even stranger, his entire group worked with my uncle (plumber/construction worker extraordinare)! So I went over to their group and introduced myself, and we all had a good laugh. My uncle's foreman bought everyone a round of drinks. I thanked them and sauntered back to my table.

Shortly thereafter, the drunk plumber showed up again. This time he wanted to know where I went to high school, and what my ACT score was. "Well," I said, "I don't give that information to just anyone!" I mean, really, I took that test 10 years ago...and I've NEVER been asked my score in a bar. Thankfully, he got off that topic... and on to a weirder one entirely!

"You know what?" he began, "My friends originally bet me somethin' about coming over here."

What's the bet, we wanted to know?

"Well, you're the prettiest girls in here, and all. So my friends bet me... (prolonged pause)...this is really weird, you sure you want to know?"

Yes, tell us, we implored.

"It's real weird, you sure?"

Yes, tell us.

"They bet me I wouldn't come over here and bite both your butts."

Excuse us, did he just say BITE our BUTTS?

"Yeah. Just take a big ol' bite outta both of them. You both have nice, no, really nice butts, you know."

After the initial shock wore off, we wanted to know, exactly how much was this bet worth?

"Oh. I don't know. I'll have to find out."

Maybe for like $200 each, we might consider it (I said consider, not actually let him, shame on you!). How much are our butts worth?

He comes back. "They bet me $500."

We humored our drunk, and suddenly bashful friend. We each would both get like $150, right?

"Well. Uh..." No direct response.

Then he walks away. His friend approaches.

"What did that guy just tell you?" he asks.

He said you bet him $500 to bite our butts. We were trying to negotiate for at least $150 each for us.

"Um. We only said $100. He was playin' you girls!"

The moral of the story? When you're short on cash, and a strange plumber approaches promising cash to take a big ol' bite out of your butt, he's probably not giving you any money.

Keep your eyes out for these tricksters, ladies, I'm sure they're everywhere. Let's keep earning our cash the honest way! Read more!

Reimbursements, continued

Following up on my previous post, I paid off my credit card bills to zero this month. It's not good to keep a balance on an American Express charge card, and I just couldn't bear to have my credit affected by work-related expenses. So the good news is that I'm in the clear for credit.

The bad news is that I now only have $250 in my checking account (plus another $74 check that I received today) until my next paycheck. I've asked to receive the remainder of my reimbursement from our accountant no later than 1/28. At that point, I'll have to dip into my savings to pay my rent and other bills and therefore may loose some interest in my savings.

Once I receive all my reimbursements, I'll be back on track. But it's going to be a juggling process between now and then. It's enough to make your head spin!

I'm trying to look up some strategies on how to handle the subject, but in the meantime, here are a few that I've developed recently and one from a reader:

Tip One: Work your closing dates (from reader Steve). "I used to get around this issue by having 3 credit cards. I would space out their statement dates as follows: 1st of the month, 10th of the month and 20th of the month. Whenver I would travel I would use the card where the statement date just passed, meaning that it would be 30 days before I see that bill. This worked out well as my company was on a 3-week reimbursement cycle. It takes some discipline and some good accounting skills to keep track of it, but it allowed me to float their money longer until they paid me back."

Tip Two: Track your reimbursements carefully - start a system. I often have 5 or 6 reimbursement forms waiting for payment at once. As they begin to trickle in, I used to get very confused about what had been paid and what had not. I now keep a "Unpaid Expenses" folder on my office desk, front and center, with all the outstanding reports and receipts inside. I note the date each form was submitted to finance. When a check comes in, I mark the form as "paid" and remove it from the folder. This way, I always know what's been paid and what awaits payment. It's also easy to find documentation of all receipts if there's a question.

Tip Three: Be squeaky. If you don't know where your latest reimbursement check is, ask, ask and ask again. The squeaky wheel gets fixed, they say.

Tip Four: Maintain your personal budget. While dealing with reimbursement forms, my checking account has a tendency to bob up and down - sometimes it's low as $250 while others it's high as $7,000. Each month, I know how much I generally should have in my account at any given time without the additional expenses. So, for instance, when I get down to $250 and I still have bills and rent to pay, I know something's amiss. The quicker you realize a problem, the easier it is to fix it.


Have any other tips for a checking account in flux? Leave a comment! Read more!

I'm Freaking Out, a Little

I have a headache...my money is out of control! And due to no fault of my own (which really steams me). I'm currently waiting for more money in reimbursements from my office than I have in my checking account (it's on my personal credit card right now), and the due date for my payment - the very latest date - is January 20.

It's weird for offices to require their employees to use personal credit cards, right? Well, our policy prohibits accountants from taking out an office credit card, which means that when my accounts need payment asap (and they always do) or I'm on the road, my personal card foots the bill. To be sure, our accountants don't want employees using personal cards, but when you're down to the minute to secure a program, sponsorship or event, waiting a week for a corporate check simply won't do.

I have a card expressly for this purpose - my American Express. Usually the turnaround time on payments is fine, but the year's end really slows those reimbursement checks down. I only have until the 20th to make my payment or else I have to go through the painful process of requesting reimbursement for finance charges - which can be insane on an AmEx card. I also worry that having so much out on a credit card will negatively affect my credit, even if I make all my payments on time. I worry, too, that the discrepancies between my salary and what I charge are enough for me to be audited.

I can budget for myself. I don't worry about making my own payments each month. In fact, once my bill is cleared, I should have enough coming in each month to increase my 401k contribution easily. But instead, I'm budgeting for expenses and dollars that I don't have - and it's putting a serious damper on my anxiety levels. I want to scream! Read more!

Stocking Up

I'd like to preface this post with a word of caution. Any good writing teacher will advise you to "write what you know." In other words, me writing a novel about child-rearing probably wouldn't be great to read. Likewise, a blog called "The Budgeting Babe" written by a shopaphobic male probably wouldn't be widely accepted (unless he was a closet drag queen playing a Budgeting Babe, in which case, scandalicious!).

That being said, I will tell you now: I know NOTHING about stocks or investments of the sort. For those of you on my level, here's a summary of how the Stock Market works from Young Money.

Despite the above disclaimer, I did find this tidbit from The Motley Fool really, really interesting:

"Unexpected powerhouses

At MSN.com recently, Jon Markman listed the top-performing stocks of the past six years (roughly the same period of the Fortune list). He noted: "The leading stock over the past six years, according to my calculations, makes just about the least exotic product you can imagine: soda pop. It's Hansen Natural, which is up 3,739% since Jan. 1, 2000. The next four best aren't exactly household names, either. They are: KCS Energy, a Houston-based natural gas producer, +3,251%; IRIS International, maker of automated urinalysis systems, +3,248%; Amedisys, a home nursing-care provider, +3,181%; and Quicksilver Resources, a Texas-based natural gas producer, +2,929%."

Can you believe that? (Thanks to Brian for the call.) All this fuss I've been hearing about Google and Apple, yet the top stock of the last 5 years is soda! A professor once told me in college that the only real way to invest is to chose companies you believe in, with products you actually like. He spoke of some famous rich guy who only bought things like Coke and Disney. My great aunt, who I never really knew, except that she was apparently very stylish in her heyday and traveled to places where she slept in tree huts and rode on elephants, used to have the same philosophy about investing.

I'm not advising that you go out and immediately buy stocks in Gucci (GUCG.PK) just because you lo-ove your Gucci sunglasses. But if you love you some Hansen cherry vanilla fizzy, maybe you should look up information on the company in your spare time. You may find good stuff. Here's what the Motley Fool went on to say:

"How would you have found gems like these? You probably wouldn't be aware of most of them, unless you worked in the natural gas industry, or in health care. But if you drink tasty carbonated beverages, you would have had a chance of spotting one of them. And if you had been curious enough, you'd have paid attention to see how many people were reaching for Hansen drinks over other options, and you'd have looked up the company's financial reports. Just noticing a newly popular company isn't enough -- you need to assess many factors. Revenues might be surging, but if the firm isn't turning them into rising profits, that's not good enough. A growing cash pile is good, but how does it compare to the firm's debt level? You get the idea. (Rex Moore introduced Fool readers to Hansen more than a year ago.)"

For those of you who want a more traditional way of finding those "hidden gems" that you might be wearing, eating, drinking or otherwise loving, here's another Motley Fool tip:

"Another way to discover hidden gems is, ironically enough, through financial publications. Yes, I know that this article isn't painting a pretty picture of "top stocks" lists. But actually, TickerSense looked at some other periodicals' best 10 ideas for the current decade, too. Fortune's list was the least impressive, but other lists, from the likes of Forbes, for example, did beat the S&P 500. (And Fortune has offered plenty of more productive lists in the past.) You just shouldn't buy blindly based on any list. If you're going to look at a list of stock picks, take some time to research the companies further. Smaller companies can be great performers, as they have so much room to grow. If you'd like a bunch of recommendations from us, try our Motley Fool Hidden Gems newsletter for free -- some of its recommendations have doubled and tripled in value in just a year or two, or less. "

See? No need to feel intimidated by the process - although I still do for some reason. But maybe if we keep reading articles like these and repeating to ourselves that "investing is not scary," we'll know enough to feel more comfortable! Read more!

Start Fresh, Start New

"Every day is a new day and it's a chance to start over and clean the slate."
- Gabrielle Reece

I've received many comments lately from readers who say they're new to budgeting and saving. But for everyone who visits this site and vows to reform, there are probably 10 who just can't commit.

Well, friends, today's the day. Make a small change financially, and watch your life change for the better. As Gabby Reece says in the opening quote, every day is a new day, a chance to clean the slate.

In November 2004, I found myself in a terrible position. I had saved a nice pile of money living with my parents for two years after college - but after only one year on my own I practically had spent everything I saved.

A number of factors contributed to my financial demise. My rent was too high for what I could afford, I blew savings on furniture and on my computer, I liked to eat out, I was way too fond of shopping after work and most importantly, I just didn't budget. Though I had invested in low, low yield CD's while I lived with my parents, in October 2004, I had since moved that money into my checking account. I had no savings account, no 401K and no concept of where to begin. To make matters worse, I still had more than $10,000 of student loan debt.

I was in denial about the whole thing, too. Until I was at lunch one day and my co-workers, similar in age, were talking about their savings and 401Ks. They questioned why I had not saved more. I told them I was uninterested in learning about finances. I told myself it would be nice to have rich parents who could fund a life in the city AND a bankroll. But deep down, I couldn't believe how behind I was.

Then, in November 2004, I opened a savings account. It wasn't much - just $50 a month, I think. Less than the price of a new item of clothing - which I was buying in abundance at the time.

That's how it all began. I opened a savings account. I walked my butt to the bank down the street and just did it.

I steadily increased the amount I set aside each month. The bank takes it from my paycheck automatically. Now I'm up to $200 per month. I can't wait for my next raise to increase my savings, and I'm now looking at new and better ways to earn interest. New sweaters be damned! My money has a purpose.

That's how I started this journey. I'm no success story yet, but I financially I'm way better off than I was two years ago.

Make a small change today and change your life. I know you can.

* * *

There goes my money...

Just got my year-end paycheck, which summarizes how I did this year. Just when I was feeling inspirational, Uncle Sam socks it to me.

$6,014.80 to Federal Taxes
$2,763.83 to Social Security
$646.38 to Medicare Taxes
$1,226.28 to IL State Income Tax

Man, I wish I had that kind of money to set aside for my personal accounts. That's more than five times what I managed to put in my 401K (!).

* * *

Bad news: My CTA bus fare just DOUBLED (I ride an Express bus from Ogilvy) from $2.00/day to $4.00/day.

Good news: It looks like I can buy a "Link Up Pass" at Metra for $36.00 (on top of the $55.35 that I still pay for the train). That's only nine days equivalent of payin' cash, so it will certainly save me some green!

Sad news: Even though my fares increase, the quality of service will not, according to a CTA spokesperson. Whu?

I guess it's still cheaper than owning a car and driving downtown everyday.
* * * Read more!

Auf Wiedersehen, 2005!

Forgive me for the title. I just discovered Project Runway on Bravo and, like Santino, was inspired by Heidi Klum's catchprase.

Now that 2005's just a memory, it's time to set my goals for 2006 and reflect upon the last 525,600 minutes ("- how do you measure, measure a year?").

In January, I laid out my goals for 2005. I'm proud to say that I made three out of four goals in my first full year of financial responsibility.

As you can read here, my 2005 goals were:
1. Increase savings account to $5,000
2. Get additional AmEx credit card for paying bills
3. Get student loans down to $10,500
4. Continue budgeting wisely (OK, this one wasn't so measurable)

Here's how I stacked up:
1. Savings account is currently at $5,340.41
2. Did not get an additional AmEx card...rethought that idea and discarded it
3. Student loans are currently around $9,800 (according to my last statement - I've since paid off $450 more)
4. I budgeted so wisely that I was able to increase my 401K contribution to 4% and I was able to take an amazing week-long vacation to the Pacific Northwest this year. I also got braces and had oral surgery

Wow. It's amazing how finances have transitioned from being a burden to a point of pride. All it takes is a little discipline and committment.

Here's my first stab at drafting goals for 2006:
1. Increase savings to $7,000
2. Increase 401K contribution to 5%
3. Decrease student loans to $7,500
4. Pay off my braces

There you have it. Three goals that are attainable and measurable. I'll let you know if I make any revisions along the way.

All things considered, 2005 was a stable year for me. My rent did not increase, I kept the same job I've had since 2001 (and received a promotion) and my relationships were all in order. Yet there were some difficulties: I had my first brush with surgery, Brian quit his job to pursue a new path and my mom had a major surgery. I almost moved to a new city, but in the end, decided to stay in Chicago.

Overall, I do feel blessed. Unlike so many in the world, I have a home, a family. Watching the world go by from my couch can be a heartbreaking endeavor - considering the tsunami, hurricanes and earthquakes, and wars in distant lands, it is difficult not to feel helpless. I often wonder what my life would be like if I dropped everything to join the Red Cross or the Peace Corps. But ultimately, I know that I want to be able to provide a home for a family in the future - that is my calling - and working hard now is the best way to do that.

I'm still growing, still learning about the world and myself. I wonder sometimes how I can juxtapose the desire to travel abroad and help others with the serious obsession to buy a pair of Uggs boots. I agonize over politics, elections, the direction of our nation, yet I also spend hours reading Us Weekly and poring over jewelry trends that are hot for celebrities right now. I worry about the health of my loved ones, yet sometimes I can quiet all my inner dialouge for a night of fashion-inspired reality TV. Ah, the life of a Budgeting Babe.

Regardless of what happens in politics and fashion 2006, I'll still be here, trying to figure out exactly how my cable bill became so past due while pondering the financial benefits of heel replacement on my favorite Nine Wests. Aside from the minutia, I've got some exciting plans for this year...but you're going to have to wait to find out exactly what's in store. I hope you'll stay with me on my financial voyage and continue to offer such great feedback and advice.

Best of luck to you all in the new year and thanks for your support. I'm off to grab a morning-after mimosa and properly usher in 2006! Read more!