Trying to understand how big this financial crisis really is?

Think about this: yesterday, investors lost $1.2 trillion on Wall Street. $1.2 TRILLION! If you think that doesn’t affect you, find the courage to look at your 401(k) statement today. It’s down, right? Some of your money was in that $1.2 trillion.

By comparison, the bailout Congress shot down would have cost taxpayers $700 billion, so in theory, Washington could have saved us all $500 billion.  But don’t start cheerleading for a bailout just yet: one investment adviser told me that even if Wall Street gets every dime  in taxpayer money that it wants, we could still end up in a very deep recession.

The country has lost more than half a million jobs this year already and another 100,000 are expected to be announced later this week.

If you were the president, how would you fix the economy? And if you had the $700 billion that Wall Street is asking for, what would you do with it?

Bush and Congress finally agreed on the best way to give away $700 billion in our tax money to keep Wall Street afloat, and the bill is expected to pass this week.

I looked over the bill and it seems to have all kinds of flaws and loopholes, but the one thing I wanted to address here is how we’re supposed to get our money back. The way it works is this: the Treasury Department will buy money-losing assets from Wall Street firms (mostly bad bets placed on mortgages). That way, when the market turns around, the government can sell those assets back to Wall Street, perhaps at a profit, thus getting back some of that money for the taxpayer.

The plan also includes a rule against new “golden parachutes” for executives.

I think it’s a red herring: why would Wall Street buy back assets  it almost drowned in from the government? And if the Treasury can actually sell them at a profit, do we all get big, fat checks for the tax money we put in?

If you had a chance to tell Congress what you think about the plan, what would you say?

Think this financial crisis thing is a game?

Yesterday the government shut down Washington Mutual, the biggest bank in US history to fail ever. What’s that mean? Think of it this way: while McCain, Obama, Bush and the rest of Congress were in DC arguing over whether or not to spend $700 BILLION of your tax money to bail out Wall Street, a bank that earlier this year had $181.9 billion in deposits was going belly up.

After the feds shut it down, another bank, JP Morgan, bought all of WaMu’s assets for only $1.9 billion — a tenth of what it’s deposits used to be worth — from the government.

So what’s this mean for you? The Seattle Times has a good primer on how the failure affects shareholders, account holders and employees. Bottom line: if you had a checking or savings account at Washington Mutual, you now have that same account, with the same amount of money at JP Morgan. If you work for WaMu, you should be nervous. If you owned shares, you’re S.O.L.

Is anyone nervous about their bank failing?

The FBI is investigating whether executives at some of the companies that the government is bailing out committed fraud and helped create the financial crisis that the country is now in.

The government is going to spend $700 billion to bail out Wall Street — that’s $700 billion of your money — and they say it’s necessary to make sure that the whole economy doesn’t go into a depression.

But what if they do find fraud? Who will go to jail and will they have to pay any restitution to taxpayers for costing all of us so much money? And how much are executives on Wall Street going to continue getting paid if their companies are being helped out with money you worked for? Is it fair for them to make more than you?

If you were running the investigation, who would you target, and how is the country ever going to be able to pay off all its debt after lending Wall Street almost $1 trillion?

I can’t believe it: T.I.’s babymomma won! A judge in the case decided to raise the amount he pays in child support from $2,000 a month to $3,000 a month, after she asked for more so that she could be a stay at home mom.

As a journalist I’m supposed to be impartial, but seriously folks, this is just as criminal as if the judge and the kids’ mother threw on ski masks, robbed T.I., and split the money between them.

Here’s a good one for debate: how much ‘child support’ money is too much?

For the mother of rapper T.I.’s two sons, $2 grand per month ain’t enough. She admits to getting that much from him, on top of money for private schools and activities. But she’s unemployed and has her lawyer arguing in court that T.I., who she’s no longer in a relationship with, should pay for her to be a stay at home mom.

The T.I. case is extreme, since it pits a millionaire against someone who’s unemployed by choice. But most people who wind up in court over these things are working parents. My personal belief: both parents have equal financial responsibility for their kids but the current system needs a big overhaul since in most states, judges consider only incomes, not actual child care expenses in determining how much both parents should pay.

What’s your take? What’s reasonable and how much is too much? If you were a judge, how would you rule in the T.I. case, and how would you handle average parents who come to court?

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.

Two weeks ago, we started keeping track of everything we spent.

Last week, we tallied all that spending and started to develop categories.

It’s time for the next step: comparing what you spend every week to what you make (hopefully you have a job that pays  you more often than every three weeks). Tally up all the spending you tracked in your diary and subtract it from your take home pay. If there’s money left over, you’re living within your means. If you’re at a negative, you’ve got some work to do.

I tried posting this earlier this week, but a ton of readers told me they couldn’t see the entire post for technical reasons. So I’m re-posting today:

Today’s post is courtesy of the ING Foundation, which did a survey about black women and money. Among the top findings were that  47 percent of Black women say it is difficult to have their desired lifestyle because of financial obligations to their immediate family;  71 percent say it’s “very important” to give money to their place of worship; more than half have loaned $500 or more to family or friends over the last year; and  68 percent of Black women buy what they want – in a good or bad economy.

Here are the eight tips they gave to black women on handling their own cash:

Saving Over Time Can Help Secure Your Financial Future

Black women’s sense of obligation to community and family is extraordinary and commendable. But when you’re pulled in so many directions financially, someone or something has to pay the price. It’s impossible to financially support your family and community over the long term if you’re not financially secure, so make sure every week you put some money away for yourself. 

Resist Impulse Purchases

One way to find money is to spend less on “nice-to-haves” like electronics, clothing and accessories, eating out and even those addictive coffee drinks. Being more mindful and thinking twice before making a discretionary spend can make a big difference in your wallet over time. By making deliberate and thoughtful choices about how you spend and save money, you truly can make your money work harder for you.

Use Credit Cards Sparingly

Leave your credit cards at home so you’re not tempted to use them on impulse purchases. Save your credit cards for major purchases that you’ve taken the time to consider.

Use an Automatic Saving Plan

Automatic saving plans make saving an effortless, seamless process because a set amount is deducted from each paycheck and put into a savings or mutual fund account of your choice.

Start With a Workplace Retirement Plan

With tax-advantaged workplace retirement plans, you can put money away for retirement and reduce your current taxable income at the same time. And many companies offer an employer match, which is essentially “free money”. 

Create a Financial Plan

Our research shows that a financial plan — even a simple one — strongly correlates to feelings of financial empowerment. The journey to financial security begins with a road map. Creating a financial plan focuses you on where you want to go and, just as importantly, what you need to do to get there.

Don’t Be Afraid to Ask for Help

Our research shows that Black women who use a professional financial advisor are more likely to have created a financial plan and feel more financially secure. To find a financial professional, ask family, friends and co-workers for references or go online. Then interview three to five potential candidates to determine which one is the best fit for you. Don’t be afraid to ask lots of questions and be sure to follow-up on their references.

Learn by Doing/Join an Investing Club for Women

Not comfortable engaging a financial professional but not quite comfortable to go it alone? Find an investment club in your community — many are women only — that’s compatible with your investment knowledge and experience. These can be a lot of fun — and a great way to learn the ins and outs of investing without feeling overwhelmed.

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.