Today’s post is by Gabriela Vega.

In today’s society with the numerous magazines covering the world of women’s fashion, countless television shows featuring vain reality stars and limitless red carpet coverage scrutinizing the clothing of celebrities, it is easy for a woman to get overly-wrapped up in concerns about her clothing, jewelry and shoes.  Our society seems to be dedicated to the acquisition of stuff.  However, focusing all of your energy on such acquisitions can have negative effects that, in the long run, influence your quality of life.

Now, I am the last person to tell others how they should or should not comport themselves.  Growing up in my family, as new immigrants, we lived simply. My mother would buy us some new clothes at the local discount store at the beginning of the school year and then add winter pieces during Christmas.  My parent’s motto to financial education was, “we cannot buy that, period.”  No further explanation was given.  Needless to say when I got to college and discovered the world of credit cards and “free money,” well, I thought I was on my way to making it.  Now, I was never Confessions of a Shopaholic bad.  But, last month as I paid off the last of my credit card debt, I realized the numerous ways in which acquisition mode effected my life.

Emotional Effects

I’m sure you have experienced it before; your boss is a pain or you are in a dating black hole and you decide that you need a ‘pick me up.’  The quickest way to turn your frown upside down is to head for the nearest department store shoe (or purse, or make-up, or clothing) section for a little ‘shop therapy.’

You step inside, smell the new leather and see the rainbow of colors and array of styles.  You pick up a pair of red, four-inch stilettos and all of a sudden all of those words that you could not say to your boss or the guy with whom you just broke up disappear.  You try them on and they make your legs look incredible.  You know that you have to experience this feeling again.  Because you don’t get paid for another two weeks, you decide that you will put them on your credit card.  You reason that this would have been the amount that you would have paid for a therapist or that they are an investment that will ultimately help you land that next job and you take them home.

Unfortunately, come Monday you still have to deal with the same boss or when the weekend comes, you don’t have a date and you are back in the same spot.  Spending money, can give you tremendous high, particularly when there are other things that are trying to bring you down.

Eventually, in order to get the same satisfaction you must spend more and do it more often.  Guess what?  That is the sign of an addiction.  Unfortunately, over-spending is accepted and, even at times, encouraged (anyone remember President Bush saying it was patriotic to spend?)

The reality is that the shop therapy good feelings never last and you must still face that which is bothering you.

Financial Effects

If you have ever put anything on a credit card that you could not immediately turn around and pay off, you must know that the big ticket purchase you made will cost you more than the price tag (I’m not a mathematician but here is a simple example.)  With interest rates and even annual fees, a $1,000.00 purchase can eventually cost you anywhere from $1,150.00 to $1,220.00 (for credit cards with interest from 15% to 22%, which are average rates of interest) and that is just for one year.

If you are a person that must continuously shop to repeat the same emotional high described above, your debt can quickly get out of control. Without careful monitoring, you will end up maxing out one or more credit cards.  Add that to only the minimum payments and you have dug yourself a nice hole.  After all, the minimum payment is only enough to pay that month’s interest rate plus a little extra.  Thus, you continue to pay on the same debt without seeing a significant drop.  As a smart, professional woman you would never let a business operate in this manner and you know what?  Neither should you.

Creating a Recovery Plan

All of this happened to me.  Finally, I got to the point that I decided that I would not allow myself to continue on the same cycle.  For me, it was additionally difficult because unless I had monthly amounts automatically debited from my checking account, I would sometimes forget to pay on time, which only led to more fees.  So here is what I did.

1. Accept that you are going to feel ‘poor’ for a while.

If you are committed to becoming debt free, you may have to come to terms with the fact that you may not have disposable income for a while.  Thus all of those wonderful extras to which you have become accustomed to must go.  Monthly manis, pedis and facials, gone.  A new pair of shoes every month or dinner and drinks with your friends every Thursday night, gone.  But, and this was important for me, realize that this is your choice and that you are on your way to true financial independence.  This will give you the resolve and strength to say no whenever your friends want to meet for a lunchtime pedi.

2.  Begin to pay everything on time.

Whether you are like me and you need things to be placed on automatic withdraw or not, making timely payments is critical to success because otherwise you are stuck with extra fees that ultimately begin to incur interest themselves (debtors are so clever.)

3.  Pay more than just the minimum.

Whatever your minimum payment, resolve to pay a minimum of three times above that.  For me, it was beneficial to actually seeing amounts cut down at a rate that made me feel like there was a light at the end of the tunnel.  Plus, the more you see your debt reduced, the more you likely you are to become even more aggressive and pay quicker.

4.  Pay the cards with the highest interest rate quicker.

As I stated before, I am not a mathematician.  But, it doesn’t take a mathematician to figure out that if you have a credit card with a 22% interest rate and one with a 15% interest then the 22% credit card has to become your top priority.  For this reason, if you need to shift the amounts you send, say four times above the minimum rate and two times the minimum rate then by all means, go for it.  Once you pay off the higher rate card, send all of the money that you were sending to that credit card to the other(s.)

5.  Consider Interest-Free Credit Cards.

If you receive a viable offer for a “no interest for a year” credit card then consider transferring all or a bulk of your debt to that card.  Once that is accomplished, determine how much you need to pay each month before the end of that year and pay it.  For example, if you have $5,000.00 of debt transferred to an interest free for a year credit card you will have to pay $416.67 per month in order to get it paid within that year.  But, beware of these cards, as sometimes they will add all of the interest back if you do not pay them off within the year.

Whatever, you decide to do remember you are a smart, strong career girl and as with all trials and tribulations that you have faced, this one too shall pass.

What tips do YOU have for those struggling with debt?

You may have noticed that I have something exciting cooking.

I’m writing a pretty cool job search guide for college seniors and recent graduates. 

It all started because of your emails and tweets.

• Many of you share the same fears. 
• Many of you make the same mistakes when it comes to executing your job search.  These mistakes are driven by your fears. 
• I’ve also identified the #1 problem among entry-level job seekers and will show you how to overcome it.

No need to shoot yourself in the foot any longer.

You’ve spent way too much money and time on your degree to waste it sitting on the couch.  The economy is not friendly to mediocre candidates, mediocre resumes, or mediocre personal brands.  Therefore, you need to rise above the rest.  Your archaic career services office probably isn’t going to help you do that.

I’m providing a lot of info that has never been seen here on the blog.   You’ll see real strategies that work. You’ll get real templates.  I’m even including real emails that you guys have sent me.  Not all of my feedback is positive. 

Most importantly, I promise not to waste your time with a bunch of fluffy bullshit. 

You’ll also get to learn a little bit more about my story- stuff I wouldn’t share here on the blog.

here’s how you can be part of the movement:

• If you think your resume is at rock star status, email it to me. 
• If you think your resume sucks, email it to me. 
• Be prepared for me to rip it apart in the name of serious improvement.
• If you have questions you want answered in this guide, email them to me.
• If you have a job search story to tell, tell it.
• I’ll be handpicking only the BEST examples to be part of the book- real name optional.
• Hopefully you know my email address by now: nicole@mscareergirl.com

Job Search Boot Camp will be out in April.  Until then, stay tuned for lots of previews, a few giveaways and some great case studies!

I happened to catch a news segment about how Starbucks is being affected by the recession and it got me thinking. First, I love Starbucks and if I could have a dream office, I’d place a desk in the middle of my Starbucks and work happily. Second, I admire their business model and branding (my favorite book about this is The Starbucks Experience). Therefore, I found it surprising that even Starbucks’ sales were down.

Ever since we got a Starbucks next door to my office, I’ve gone through periods of going way too often. As someone who is conscious of making smart financial decisions, my Starbucks addiction doesn’t really match up. We’ve all heard Oprah, Jean Chatzky and Suze Orman tell us how much we could save if we cut lattes out of our daily routine. Apparently people are starting to listen.

Since I like numbers and facts, I wanted to do some math to find out how much Starbucks can really hit your wallet. Here is what I discovered:

· There is an 11.5% tax on food and beverages in Chicago…um, where have I been? I had never looked at my Starbucks receipt before today (oops). Why the need for an 11.5% tax, Chicago? Have we been financing Blagojevich’s corrupt schemes, or maybe paying for his newest wig (sorry, had to say it).

· If you buy a grande latte every work day, you will spend $74.80 per month. ($3.74 * 20 business days per month)

· You could do the following with $75: pay your monthly car insurance bill, buy new shoes, go out to dinner and drinks with your girlfriends twice, or save for a rainy day.

· Your daily “addiction” will cost you $897.60 over the course of 1 year.

Now what if you decided to give up your daily Starbucks visits and direct deposit that $75/month into a retirement account?

Despite the current economic condition, the average expected return for retirement accounts is still 10%. If you put that $75/month into your 401(k) plan, your contribution will grow to $5,931.18 after 5 years.

I assume you are not retiring in your thirties. Therefore, check out how much your $75 monthly contribution can grow over the years:

· After 10 years the value of your investment will be $15,566.40

· 20 years, $57,502.27

· 30 years, $171,024.40

· 40 years, $478,333.52

Wow, now I’m impressed. Who knew that your cup of joe was so expensive in the long run! I hope this inspires you to take a look at your 401(k) contributions today and make sure you are putting at least this much away for your future. For other scenarios, check out this easy to use calculator.

Even if you think that you can’t possibly afford to save right now, try to cut something small out of your day and remember that it will lead you to big things in the future. And in the meantime, you’ll be acting as a smart, savvy and sexy woman!

I happened to catch a news segment about how Starbucks is being affected by the recession and it got me thinking. First, I love Starbucks and if I could have a dream office, I’d place a desk in the middle of my Starbucks and work happily. Second, I admire their business model and branding (my favorite book about this is The Starbucks Experience). Therefore, I found it surprising that even Starbucks’ sales were down.

Ever since we got a Starbucks next door to my office, I’ve gone through periods of going way too often. As someone who is conscious of making smart financial decisions, my Starbucks addiction doesn’t really match up. We’ve all heard Oprah, Jean Chatzky and Suze Orman tell us how much we could save if we cut lattes out of our daily routine. Apparently people are starting to listen.

Since I like numbers and facts, I wanted to do some math to find out how much Starbucks can really hit your wallet. Here is what I discovered:

· There is an 11.5% tax on food and beverages in Chicago…um, where have I been? I had never looked at my Starbucks receipt before today (oops). Why the need for an 11.5% tax, Chicago? Have we been financing Blagojevich’s corrupt schemes, or maybe paying for his newest wig (sorry, had to say it).

· If you buy a grande latte every work day, you will spend $74.80 per month. ($3.74 * 20 business days per month)

· You could do the following with $75: pay your monthly car insurance bill, buy new shoes, go out to dinner and drinks with your girlfriends twice, or save for a rainy day.

· Your daily “addiction” will cost you $897.60 over the course of 1 year.

Now what if you decided to give up your daily Starbucks visits and direct deposit that $75/month into a retirement account?

Despite the current economic condition, the average expected return for retirement accounts is still 10%. If you put that $75/month into your 401(k) plan, your contribution will grow to $5,931.18 after 5 years.

I assume you are not retiring in your thirties. Therefore, check out how much your $75 monthly contribution can grow over the years:

· After 10 years the value of your investment will be $15,566.40

· 20 years, $57,502.27

· 30 years, $171,024.40

· 40 years, $478,333.52

Wow, now I’m impressed. Who knew that your cup of joe was so expensive in the long run! I hope this inspires you to take a look at your 401(k) contributions today and make sure you are putting at least this much away for your future. For other scenarios, check out this easy to use calculator.

Even if you think that you can’t possibly afford to save right now, try to cut something small out of your day and remember that it will lead you to big things in the future. And in the meantime, you’ll be acting as a smart, savvy and sexy woman!

I’ve noticed that a lot of my female co-workers and friends avoid taking advantage of their employer’s benefits simply because they are overwhelmed or don’t understand them.  As I was gathering up several receipts to submit for my $200 Flex Spending Account reimbursement (yay!) the other day, a female co-worker commented that she doesn’t “get involved in those types of things, they are just too hard to understand!”  

Don’t miss out on potentially hundreds, or even thousands, of dollars in perks and tax breaks just because you don’t understand a benefit. 

Since this is a topic that I think is very important, yet potentially boring for some, I will periodically blog about one benefit at a time.  Don’t fall asleep on me here!

Flex Spending Accounts

FSA’s allow employees to set aside money from their paychecks on a pre-tax basis to pay for eligible out-of-pocket medical expenses.  In most programs co-pays for doctor’s visits, prescriptions, over the counter medicines, deductible expenses and contact supplies are eligible to be reimbursed by your FSA account. 

If you spend a lot of money at Walgreens, go to the doctor, or have a few prescriptions you take regularly, I highly recommend this account. You must determine how much you spend each year on these types of expenses in order to know how much to contribute.  Some people may choose to contribute the amount of their insurance deductible in order to have money set aside in case a large medical expense comes up that year.  Be careful though:  FSA’s are only good for that calendar year and do not carry over (i.e. use it or lose it).  

The amount you choose will be pro-rated.  For example, if you contribute $500 per year and get paid 26 times per year, 500/26=$19.23 will be deducted from each paycheck and set aside for you.  The funds are usually accessed by a FSA debit card linked to the account, or you submit receipts and get a reimbursement check in the mail!  (Very helpful for some of us!)

Why is it a tax benefit?  Well, if you are currently in the 25% tax bracket and contribute $1,000 to your FSA account, you just saved yourself $250 in taxes!

Rememer to keep your receipts! 

The open enrollment period (when you can sign up for this benefit) is around the corner for many companies this time of year.  Make sure you consider participating in this great benefit!