When going out to the malls and restaurants this past weekend, you would have no idea that the country is in a recession. You can hardly find a parking spot and getting into a popular restaurant on a Friday or Saturday night was almost impossible. So, if nobody has the money to spend…why is everyone out spending it?

Let’s be honest, we can’t cut spending out of our lives, it just isn’t that simple. With the holidays just around the corner, people are feeling the crunch now more than ever and are trying to find ways to deal with it.

Some reasons people might be spending now include…

Spread Out the Spending – Spending earlier will help spread out the costs (and the bills). A lot of people get overwhelmed during the holidays because when it is all over the bills that they have accrued are more than they want to deal with. Spending a little bit earlier and spreading out the purchases allows you to pay off some of your bills before more add up on top of it.

Shop the Sales – Closer to Christmas the sales will no longer exist. Shopping the sales now can help you save a little bit of money without putting too much of a hole in your pocket. Just remember that if you are shopping the sales for Christmas, not all items people will want by the time it comes if you purchase them so early. Although clothing may be on sale now, there will usually be another shipment of brand new styles and colors right before Christmas. However, things like basic clothing for work aren’t always as trendy and are always great to buy when on sale.

Treat Yourself – People are spending right now to give themselves a treat. It isn’t easy to deal with a recession and eventually you need to let some of that worry go. Spending and going out for dinner allows you to continue to live your life and enjoy a night without worry. Treating yourself is something you need to do. You wouldn’t survive just worrying about how the economy is going to do and if things will eventually turn around. Taking a night out for yourself and going to dinner will be beneficial, just remember to take home those leftovers for lunch at work!

Needs vs. Wants – Everyone has needs, so all spending cannot come to a halt. Retailers are struggling even if it doesn’t appear that way. When people go out to buy things that they need, they also like to look at things they might want even if they don’t currently have the money to buy it. The stores may seem really full, but it doesn’t mean everyone is heading to the checkout counter.

Having a Plan – Going out with your kids or friends that you might be buying Christmas presents for in the near future will help you to plan your spending. You will be able to get a grasp for what they might like for Christmas and be able to add this into your budget. Going out with a plan in mind around the holidays will allow you to stick to your plan and not buy things that aren’t necessary.

The Weather – So far so good. At least for most parts of the country, the weather has been fairly mild for this time of the year. Especially this past weekend in the New England area, the temperatures were warm and definitely got people out. Possibly people are out trying to get things done before the colder weather hits and it is no longer fun to leave the warmth of your home.

So, for whatever reason people might have they are definitely swarming the stores and restaurants on the weekends. My suggestion is shop and go out to eat during non-peak times if you have the chance, because when the weekend hits everyone is out! Also be sure to check out an article from our partners at MainStreet.com on How to Ride Out a Recessionary Economy.

Photo: Álvaro Daniel González Lamarque

How do you check your financial health? Today we’ll continue our series on “the basics” and discuss what you need to do to get an overview of your “financial fitness”.

Why Should I Take a Financial Inventory?

Let’s face it: motivation is key. If you are vague about your starting point (e.g., “I know I’m in debt, but God knows how much!”), it is highly unlikely you’ll swiftly reach any financial goal — even a small one.

Think about your top three financial goals. Can you name them right now? If not, chances are good you’re not maximizing your resources. As a result you might never reach your financial goals.

Here’s a personal example. My top three financial goals were: paying off my college loans, saving for retirement, and purchasing my first home. Once I was able to passionately get behind all three “end game” goals I could find the discipline to save and invest accordingly. I’m happy to report that I’ve purchased my first home and am now re-adjusting my “top three” goals. That’s the power of taking and monitoring a financial inventory.

How Do I Figure Out My Financial Inventory?

First, you must answer these three questions.
1 - How much do I earn?
2 - How much do I spend?
3 - What do I own, versus what do I owe?

Next, you’ll use two tools - they are power tools that don’t require protective gear.
1 - A cash flow statement
2 - A net worth statement
Don’t be scared!

Figuring out your Cash Flow. This compares the money you earn to the money you spend. The simplest way to do this is to make a list of every regular monthly expense you have. Yes, I know some expenses vary. Focus on the firm expenses first and then use a budget to determine your flexibility in areas that fluctuate.

Use Geezeo’s Budget tools to get an accurate look at your cash flow. Geezeo’s Spending Targets will change from green to yellow to red to let you know when you’re approaching trouble. On paper spend down your entire inflow of cash so you can direct your cash toward your top three goals.

Figuring out your Net Worth. You can do this the old-fashioned way by making a list with two columns. On one side list all of your assets. On the other list all your debts owed. Tally both columns and determine if your net worth is positive or negative. Or you can do this the hands-off way: you can see and track your net worth over time in your Geezeo Dashboard.

The point is: track your net worth because it keeps your “eye on the prize”. It’s motivation. Tomorrow we’ll discuss how to know what you want to achieve with your money. Good luck!

Related
* Stock Cash Flow 101
* Why the Statement of Cash Flow Matters
* Investing: Getting Started with Discounted Cash Flows

Do you have a high-fever case of Affluenza? What is it, and how do you get it? Geezeo investigates.

Most of us probably agree better money management isn’t just about numbers. It’s also about choosing to live wisely. How do you define “living wisely”?

Some might say that it means living below your means, spending conservatively, and choosing few items to own and maintain. There is always room for improvement when it comes to how much “stuff” you own. (Believe me! I just moved!)

Do you find yourself trying to “keep up the Joneses”? Many of us strive to do just that — whether we admit it or not. How does that affect us culturally?

Some say Americans in general are struck with a severe case of “Affluenza” — consuming too much and caring too little about the financial (or environmental, or psychological) ramifications. Do you have Affluenza? Here’s a quiz.

Here’s some more diagnosis information (courtesy PBS). And here’s the treatment!

So: spend wisely. Use your Geezeo account and the “spending target” feature to manage your case of Affluenza. Good luck with the cure!

The New York Times featured a short article about the benefits of keeping a “yearly” budget instead of a monthly one. Researchers found that if you try to budget for a year you tend to pad your estimation and be a little more realistic.

Are you realistic about what you spend in various categories? Find out by setting up a spending target here at Geezeo. You can effortlessly determine if you’re meeting or exceeding your spending target. It’s almost magical.