Broker Check

Monday Money Report

| September 11, 2023

The market was down last week, and news articles about the rest of the year are predicting everything from a massive gain to a complete collapse. The reality will most likely be somewhere in the middle. We’re waiting for inflation numbers for August to be reported, and the Fed’s meeting in September to gain insight into possible interest rate increases.

We can’t control what the market does.  We can control how much we spend, how much we save, and how much risk we take with our investments. I’m never going to be the financial advisor who scolds people for getting coffee, with one caveat. If you’re paying your bills, which includes saving for your goals, whatever you have left can be spent however it makes you happy. If you’re not paying all your bills, or you’re not able to save for goals like retirement, college, or travel, then you need to look at the miscellaneous spending.

What seems like satire but is used to justify that spending is trending on social media as “Girl Math.” Examples of this include thinking that if something is on sale, you’re wasting money if you don’t buy it. Which makes sense if what’s on sale is toilet paper, and you can buy an extra package or two with money in your checking account. It doesn’t make sense if what’s on sale is a pair of black pants when you already own three pairs and don’t need a fourth. Adult Math is taking the $40 or $50 you would have spent on the sale pants and paying down credit card debt, building emergency savings, or putting that money towards a financial goal.

Girl Math also says that items are “practically free” if you consider the number of uses you will get out of it, and amortize the price over that number of uses. Adult Math says this makes sense when you are looking at serious purchases, like furniture. If you have the money, it may make sense to purchase higher-quality items than will last. Good shoes that can be resoled, rather than replaced, are another example.   When you’re buying fast fashion or using this to justify a purchase you really can’t afford, the Girl Math breaks down.

Finally, Girl Math says that refunds or store credit are free money. Adult Math knows that money is money in any form. Gifts, bonuses, rebates – it’s all money that can be used to achieve your financial goals.

Your action item this week is to do a quick review of your spending. Pull your credit card or bank statements, and spend a few minutes with a calculator to see where your money goes.

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CovingtonAlsina is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.