I can’t stand when writers or marketers take corny words and try to make them sound cool just to support some trend that may or may not be there. In this instance, the NYTimes breaks down where the word “recessionista” came from (I could choke just from typing it), and how some companies are pimping the word to make it seem like it’s OK to spend money on crap during a recession, just so long as it’s not overpriced crap.

Let’s get real, people! There’s nothing new about people trying to shop for bargains and still look nice or have nice things. Why’s now any different, except for the fact that consumers are cutting back and now companies need a way to make them feel better about buying?

Would you buy a product just because it’s packaging says it’s a good value in tight times? Or are you always on the hunt for a bargain no matter what?

Credit is so tight these days that people can’t borrow for those flat screen TVs anymore. So retailers like K-Mart are bringing layaway back from the dead.

You ever lay something away back in the day? I did — all kinds of things like games from the first Nintendo to clothes I wanted but ain’t have the cash for when I was in high school.

What’s the last thing you remember “laying away” and would you use it again now if you didn’t have the cash for something you wanted?

*My blog is moving from Bet.com. Keep in touch to find out where I’m going*

I spent my week interviewing elderly people about how they’re dealing with the financial crisis. I heard some of the saddest stories, like the man whose health insurance payments have gone from $96 a month to more than $300 a month in just a few years, and the diabetic woman who lives on $600 a month and has to eat canned food instead of fresh fruits and vegetables which would help keep her healthy.

I also heard how angry they are at the government and younger folks for living beyond our means. Most of them lived on only a small percentage of what they made when they were working so they could save for when they’d need the money. It made me think and set a new goal: by next year I want to cover all my expenses on half my after-tax income, and save most, if not all of the rest.

Do you think you could live on only half what you make? If not, what other steps could you take to increase your savings?

A reader emailed me the best example of a spending diary I’ve seen yet. She kept it for a week using Microsoft Excel to track her spending by date, store, what items were purchased, the amount spent and the category of spending. She created drop-down menus to sort each category by the amount spent from highest to lowest or vice versa. Great job.

A couple things stood out. The biggest expense was a $200 tithe (can’t be mad at that), followed by $189.69 at J. Crew for “capris, gold lamé bikini, ballet flats, tissue tee’s, clutch purse” (did you really NEED a bikini right before fall?).

The biggest category was food, but I would have put expenses like a $35.93 trip to Whole foods for groceries in a different category from a $23.83 sushi lunch. One is a necessity, the other, not so much. Another questionable: a $28 eyebrow wax doesn’t ain’t exactly a “health” expense. Not passing judgment on the spending, which I think is reasonable,  but its another example of how by fudging spending categories, we can hide discretionary spending and make it look more necessary.

Total spending for the week came up to $847.24.

This is a great example for anyone trying to get their minds around where their money is going.

Summer’s over and Wall Street has gone entirely to hell. Only one thing to do to keep from getting too depressed about work and your 401(k): go on vacation. So here’s some helpful tips to make sure you can afford that getaway you desperately need;

• Take the bus. That’s right, I said the bus. Airfare these days is way too high and who wants the security line? Besides, gone are the days when the Dirty Dog is the only option for bus travel and the competition has made prices and service better. On the East Coast, for example, bus companies like Fung Wah make trips between New York and Boston’s Chinatowns for as little as $15 each way. Greyhound has been forced to match the prices. Another company called Limoliner costs more for a trip between the two cities, but it’s busses are plush, with enormous leg room, free wi-fi, desks, a fridge and even food service. In the Midwest, people, including me, are using MegaBus for trips that cost as little as $1 (if you book early enough) between Cleveland, Cincinnati, Chicago, Indianapolis and Milwaukee. If you’re looking for a weekend trip, search around for a bus ticket and save yourself the gas money.
• Look for hotel deals. Retailers aren’t the only ones worried about the economy this holiday season. Business for hotels usually drops off after summer, and this year that could be worse with money tight for many families. And when hotels are empty, they start serving up deals. That means you might get a steal on a room. Start setting up your Expedia alerts now for hotel deals in your favorite cities.
• And speaking of Expedia, use the web. I can’t tell you how often I still see people actually picking up the phone to call for hotel, flight and rental car arrangements. Not only is the web usually the best place to find and book deals, you can often find discount coupons and codes just by Googling the name of your favorite airline hotel. I did the same thing just now and found all these discounts for the Marriott hotel chain.

Use those tips and you should be on your way to a great affordable getaway.

Last week I asked readers to start keeping spending diaries, tallying every dollar you’ve spent over the past week as a way to start tracking your spending habits. I’m glad to say that a lot of you have apparently been participating, at least judging by some of the emails and texts I’ve gotten. So today’s the next step: pull out that spending diary and start putting everything into categories.

In other words, if you’ve spent $100 in the last week at McDonald’s and on lunch at work, create a category for “eating out.” If you spend another $100 at the supermarket, keep that separate under “groceries.” Try to create no more than five or six categories in order to keep things simple and distinguish between necessary spending like bills and discretionary spending like clothes. My categories are: “rent, utilities, debt payments (credit card, student loans), groceries, eating out, clothing and entertainment/miscellaneous.” I have to be careful with the miscellaneous category because it’s easy to start hiding expenses in there. You’ll notice I don’t list savings here, but that’s because I have my savings and investments come out automatically every month without seeing that money. If that’s not the case for you, you should include a category for savings and investments, whether you have any or not.  It’s important to see if you have a ZERO in that column at the end of every month.

The point of this whole exercise is to get everyone on the path to better finances, and tracking your expenses is the first step toward creating a budget that you can live with. Once you’ve tracked and categorized your spending for about a month, you start to really see where your money’s going. Compare that list to your take-home pay and now you know if you’re overspending and where to make adjustments.  You’re off to a good start…keep it going and remember, NO CHEATING!

Lastly, I know you’re wondering where my money went last week so I’ll tell you: $850 to rent, $181 to utilities, $400 to debt payments $120 to clothing, $400 to eating out/miscellaneous. I didn’t make it to the grocery store this week, which is why the eating out tab was high. Miscellaneous expenses also included the hotel fee and travel to the wedding I’m headed to this weekend, which I’m paying for with cash instead of charging. The clothing bill was a misnomer: I didn’t shop but did have to take a lot of stuff to the cleaners and laundromat. I’m looking to cut that bill soon by investing in a washer/dryer.

Anyone else who wants to share their spending diary experience, feel free to do so in the comments. Have a great weekend!

Shop at thrift stores? Here’s why you might not be able to find bargains as easily as you used to.  Apparently, the economy is so tight that people just aren’t donating as many things to thrift stores as they might have before. It makes sense: a shirt I might have given away I just may keep wearing if I know I can’t go wardrobe shopping for the next few months. And that old coffee table doesn’t look that bad when you don’t have the money you thought you would to replace it.In most cases, people think about a recession in terms of prices going up. But this shows that people are also hurt by bargains they used to get disappearing. Anybody been thrift shopping lately and if so, have you noticed a slimmer selection? 

Meaning for me and everyone else who got a direct deposit this week, it’s time to figure out what to do with the cash. I already know I have bills to pay, but if you’re like me, it’s that discretionary spending afterward that can bust your budget.

So I’m going to issue a challenge: if you’re reading this, for the next week, write down every dollar you spend. Carry a notepad with you to make it easier. Don’t cheat. Every pack of gum, every latte and every time you swipe a credit or debit card, write it down. Next Thursday, tally it all up and see how much you’re really spending that you didn’t need to. I’ll keep my own diary and update everybody next week. Hopefully this will be a good exercise for a lot of people and the first step toward taming overspending.

If you’re anything like me, the most nagging financial issue you have is credit card debt (click here to see my plan to get rid of it all).

Most folks think that it’s the credit card interest that keeps you in debt: buy something then pay only the minimum and eventually your balance balloons and you’re not paying down the original principle for years. But this story on MSNMoney.com shows how even if you make more than a minimum payment, carrying and using the card at all can keep you in debt for a long time:

“You’re not thinking clearly about the actual cost of things, because credit transactions skew how you view the money you spend. There is a vast difference between how it feels to pay $10 in cash versus $100 in cash (not to mention the difference to your wallet). But when you sign a slip of paper, spending different amounts feels similar…”- MP Dunleavy, MSNMoney.com

Put another way, carrying a credit card makes it easier for you to overspend because you don’t ever actually see the money you’re spending, unlike cash when the money actually disappears before you. And while the article was about credit cards, I’ve seen how using plastic can screw up your budget even when it’s a debit card you’re using. Those $5 and $10 and $20 transactions don’t feel like much when you just swipe, sign and walk away, but sometimes they’ve added up to hundreds of dollars I didn’t plan to spend.

So I’m trying something different in the next few weeks: I’m going to look at my budget, then withdraw only the amount of money I can afford to spend in cash, and try not to use my debit card at all. Using the credit card is already off limits.

Anyone else have any strategies they’ve used to master the plastic?

Here’s something to make you go ‘hmm’. Or maybe ‘Damn.’

Researchers studied whether you could tell a person’s race and income by looking at how much unnecessary crap they buy. In other words, is the stereotype true that black folk spend more trying to look rich than people who are actually rich?

 Guess what they found? You got it: all these fools riding around in clown cars on 36’s with five pounds of jewelry on are really showing off how likely it is that they’re poor and really can’t afford the stuff. The theory, broken down in this story in the Atlantic, is that people who tend to have less money will spend more on things they perceive others will view as signs of wealth. And since black folks have on average less wealth than other ethnic groups in the US, the trend cuts across racial lines.

 “An African American family with the same income, family size, and other demographics as a white family will spend about 25 percent more of its income on jewelry, cars, personal care, and apparel. For the average black family, making about $40,000 a year, that amounts to $1,900 more a year than for a comparable white family. To make up the difference, African Americans spend much less on education, health care, entertainment, and home furnishings.” — The Atlantic

Really, is this something we don’t already know? Every Saturday morning at the barbershop, we laugh at the fools who spent $50,000 to hook up a 73 Coupe de Ville, then fill the 90-gallon tank with $4 a gallon gas just to ride around the hood looking like they got something. And they generally accomplish what they set out to do: they look ”hood rich”, but everybody with some sense knows they probably don’t have any money in the bank.

What’s troubling, though is that as a group, we skimp on education, investing and other things that lead to building real wealth. There’s nothing wrong with liking what you like, but where are the collective priorities?

So now that we know the deal, the question is how do you turn it around. I’ll take any suggestions in the comments section.