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Lessons Learned When I Front-Loaded My Wardrobe

lessons learned front-loading wardrobe

[In this post I’m following my own advice to open up and be vulnerable talking about money (more specifically, money mistakes). Besides Mr. FL, no one else knew about the following personal story I’m about to share.]

I’ve made some pretty big money mistakes during my early and mid 20s. In this post, I’m sharing with you one of the biggest money mistakes I’ve made. For years, I’ve struggled to understand my money behaviors. Despite having an academic background in psychology, somehow I failed to associate my relationship with money to my upbringing. I probably saw part of the equation, but definitely missed the full picture. That is until very recently. My parents’ frugal ways of living definitely positively affected my frugal nature. However, knowing what I know now, having lived in years of scarcity most likely affected my consumption behaviors. There was this constant fear of scarcity in the household I grew up. Even to this date, my mother still overstuffs the refrigerator, freezer and pantry. She still buys into the fear that this item or that is not going to be available for sale the next day, month, or year. To help herself cope with the fear, she buys more than she needs on a regular basis. So, like my mother, for years, I was in a constant battle with myself between the desire to be frugal and the desire to hoard material things.

This past weekend while rotating out my warm weather clothes to make room for cold weather items, seeing tall piles of clothes sitting all over the bedroom floor once again had me walking down the hall of guilt and mental/physical distress that I once brought upon myself. In the past eight years, the total amount of money I’ve spent on my wardrobe summed up to over $20,000, where between year 2009 and 2012, I was spending $3000 to $4000 per year. This over-consumption behavior was something I struggled to understand over the years. And after having read books like “The Millionaire Next Door” and “Money, A Love Story“, I’ve finally got to a point where I can say those behaviors are understood. And now, I need to work on forgiving myself.

Here, I’m walking down memory lane sharing when I started spending large sums of money on clothes, how I let myself got deeper and deeper into the rabbit hole, what happened when I hit my lowest point, where I am at today and the lessons I’ve learned from this experience. If you’re just interested in reading about the lessons learned, you can scroll down near the end of the post to read that section.

How It All Started

When I moved to Austin to begin my graduate studies, I probably owned 15 pieces of clothing that were presentable. And most of the pieces were purchased by family members while visiting China. At the age of 22, I didn’t know how to shop for age appropriate clothes. While my middle and high school friends were hanging out in the mall, I was working at my part-time job. I didn’t want to spend money anyway. And my mom liked purchasing her clothes at stores in San Francisco’s Chinatown. She had much better luck finding sizes that fit her as most of the clothing items were imported from China, marketed to the Chinese.

Shortly after I started my graduate program I felt the need to buy new clothes. I needed professional clothes to attend conferences. And I also started having this desire to dress better as I was meeting new people. For months, I didn’t know where or how to shop. I asked my new friends for help, and they took me inside stores where they shopped. Time after time, my frustration grew and grew as I couldn’t find clothes that fit me well off the rack (I’m standing barely 5’4″ tall). My non-Asian friends didn’t share the same problem.

After months of shopping with very little success, I was about to accept my destiny—that I would have to wear poor fitting clothes. I wasn’t aware of petite sizes at the time. And it never occurred to me to bring my new clothes to a tailor. Then, one day in early 2009, my world turned around. While browsing the Internet searching for clothes for small women, I learned about the “petite” word! As I continued to browse, I came across small-sized women documenting on their blogs their adventures finding professional clothes that fit. And that did not include shopping at the children’s or teens department. For months I was doing exactly that! Imagine my joy when I learned about retailers like J. Crew, Banana Republic, Ann Taylor and Ann Taylor Loft that offered petite sizes! Yes, petite sizes are for women 5’4″ and under. I was obsessed reading through those blogs. I also spent hours browsing through the websites of those aforementioned retailers. I felt like I conquered something great. I was jumping up and down with joy and a sense of victory. At the same time, little did I know, I was also on my way to spending several thousand dollars at those retailers within the next few months.

Getting Deeper into the Rabbit Hole

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Financial Empowerment, Personal Finance

Mastering the Financial Language While Learning about Personal Finance and Financial Planning

financial language financial planning personal finance

In this post I share with you my go-to resources for mastering the financial language as I educate myself on personal finance and financial planning. Here, I also share my sources of inspirations, too. It’s a work in progress. I’ll share additional valuable resources as I learn.

I haven’t peruse through every article or chapter on every resource. This can change once I have less obligations. Afterall, I enjoy consuming new knowledge that’s applicable to my life and that of my family’s. Personal finance happens to be one of those areas that touch every aspect of my family’s life. The good thing is I actually love learning about personal finance. To avoid information overload, I suggest you pick one or two topics that are relevant in your life at this moment and learn as much you can about those topics. Then, implement the newly acquired knowledge in your life to increase your financial well-being. After that, repeat the process.

Let me share an example. If your goal is to lower income taxes, I would do a Google search using the following keywords: “lower income tax “. Most likely, the search engine would show “reduce your taxes” or “lower your taxable income” or “ways to save on taxes”. From there, take note of the topics that keep coming up, and then visit my go-to resources to read about those topics more in depth. I usually like to consult at least two to three resources and compare information. It is our responsibility to cross check information between sources. Information listed on these websites don’t always guarantee accuracy. Do your homework diligently. This is your hard earned money we’re talking about here. As you read, pay attention to the terms and keywords/phrases, and understand the concepts well. Overtime, before you know it, you’ve joined the financial geeks community!

Silliness aside, I do encourage you to master the financial language. There’re many benefits. In addition to gaining sense of empowerment and boost of self-confidence, the biggest motivating factor for me has been the communication factor. When shopping for financial services and/or products, just like many areas in life, we need to know what it is we want, how to ask relevant questions and how to interpret the responses. This is where knowing the financial language gives you an advantage. You get to direct the conversation. You appear knowledgeable. You cannot be intimidated.

I chuckled the first time I learned about the term, “financial language”. I thought the people who came up with the term were too hardcore. I’ve had only associated language learning with a foreign language. However, overtime it has been becoming more and more clear to me that successful financial planning requires me to be good at reading and understanding the financial language. I don’t want to miss out on opportunities that can strengthen my family’s financial position. The convenient and well-practiced generic saying, “You didn’t ask.” (because you haven’t brought it up as a concern/interest during our previous conversations)”, is typically among CPA, financial adviser, accountant, estate lawyers and others who we pay to manage our money. Don’t be a victim to such situation anymore. Do your research so you can advocate for yourself. Those we hired to manage our money may know a lot, but they don’t necessarily always volunteer extra information that might benefit our situation. Be your own advocate! I encourage you to learn along with me and find out what’s financially possible for your unique situation. We really don’t know what we don’t know until we put in efforts and start learning.

Books

The Millionaire Next Door: My favorite chapter in this book is “Frugal Frugal Frugal”. I enjoyed reading about other people’s stories on being frugal, building wealth, raising children and being smart about leaving a legacy. The book mentioned that wealth is blind (blind to one’s level of education, blind to one’s family background). Such concepts are encouraging for me as I came from an immigrant family with very little.

Your Money or Your Life: This book discusses money/wealth as an integrate whole, not only at the personal level, but also at the societal and global levels, too. Some concepts I enjoyed reading: (1) the “Fulfillment (Enough) Curve”–optimizing one’s lifestyle reaching the peak of the curve where one experiences maximum fulfillment (anything beyond the peak won’t bring much more enjoyment), (2) the values of one’s life energy–optimizing how one allocates his/her time, energy and resources on things that really matter to the individual, and (3) on financial independence thinking.

The Behavior Gap: This book does a good job explaining herd/mob mentality (e.g., people in large groups tend to behave the same way at the same time as their peers). Here, the author specially talked about following market trends. The book is also about the importance of having a financial plan, yet, being ready to make modifications along the financial journey.

The Making of an American Capitalist: My husband gave me this book very early on in our relationship. He’s a great fan of Warren Buffett. This book encouraged him to reassess what he values and taught him how to analyze individual stocks and determine the stocks’ relative values. Similarly, the book certainly taught me how to become a better investor and make my money work harder.

Money a Love Story: This book presents similar ideas, concepts, and practical strategies that I’ll be sharing on this blog. For instance, the book touched on some of the concerns I shared on A Women’s Financial Responsibilities in Her Household (my husband pointed out this to me as we were reading together one afternoon). Interestingly, I wrote those two posts prior to having read this book. I definitely recommend this book to any women who is pursuing or wants to pursue financial security and financial independence.

Rich Dad Poor Dad: A very well written book! The messages presented are both philosophical and radical at the same time. It’s a must-read for anyone who needs a wake up call on financial literacy. The author encourages people to reevaluate their views on money. He claimed that fear and greed (a.k.a desire) tend to control the financial behaviors of those who are financially illiterate; as one’s financially literacy improves, he/she would be more likely to use the brain to make rational financial decisions.

A Room of One’s Own: This is a fiction book, the first book I read when I started on my financial journey (early year 2016). The book’s general message is that women must have a fixed income and a room of their own in order to have the freedom to create. The book was first published in 1929, during a time when sexism held back women’s intellect freedom. The author argued that in order for a women to express her creative intellect she would need to have financial freedom. Here’s an example of a powerful message from the book that resonated with me, “At the thought of all those women working year after year and finding it hard to get two thousand pounds together, and as much as they could do to get thirty thousand pounds, we burst out in scorn at the reprehensible poverty of our sex. What had our mothers been doing then that they had no wealth to leave us? …Now if she had gone into business; had become a manufacturer of artificial silk or magnate on the Stock Exchange;…If only Mrs. Seton and her mother and her mother before her had learnt the great art of making money and had left their money, like their fathers and their grandfathers before them…it was useless to ask what might have happened if Mrs. Seton and her mother and her her mother before her had amassed great wealth…in the first place, to earn money was impossible for them,…the law denied them the right to possess what money they earned,…it would have been her husband’s property…”.

Think and Grow Rich: This is a classic must-read for anyone who wants to be more and live a richer life (more than just the monetary aspect). I absolutely enjoyed reading this book. The concepts in every chapter tapped into the psychologist geek in me. Please do yourself a favor and read this book. You will be enlightened.

Smart Women Finish Rich: I read in the book that San Francisco was the author’s hometown. It would be a great honor to meet him. I’ve the feeling that he and I would have much to talk about. Even though the book was written from a male’s voice and perspective, I feel Mr. Bach really did an awesome job convincing women to take control of our financial future. His seven-step program is easy to follow, and completing the exercises can be empowering for many. My husband flattered me when he said that David Bach and I could’ve easily coauthored the book *blush blush*. We share such similar ideals when it comes to encouraging and promotion financial literacy among women. If Mr. Bach is still offering the seven-step program live, I would certainly want to listen and participate. He would have a lot to teach me as I continue on this journey inspiring and empowering other women.

Secrets of Six-Figure Women: I enjoy reading about stories of accomplished women. Stories like the ones shared in this book are inspiring. Those stories helped me realize what’s possible for me if I practice certain strategies and improve on certain traits. This book is for women who want to increase their earning potentials, and at the same time build wealth. The author helped me see that doing both are possible.

The Feminine Mistake: This book is like the modern version of Virgina Woolf’s “A Room of One’s Own”-see review above. As someone who is a mother, with great career aspirations, I enjoyed reading about the individual stories shared in this book. Moreover, the author’s messages in the book are strong and heartfelt. I recommend this book to every woman who wants a fulfilling life, both at the personal and professional levels.

The Bogleheads’ Guide to Investing: Early on in my journey learning the financial language, I spent hours devouring books on investing. This book and the one next to it, “The Intelligent Asset Allocator“, were two of my favorites. One doesn’t need a finance background in order to understand the concepts and messages presented in these two books. By the time I finished reading them, I felt investing was no longer intimidating. I recall telling my husband, “I can totally do this [participating in the stock market]!”. When you finished reading the books I hope you will share my sentiments about investing, too.

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Financial Empowerment, Financial Journey, Financial Planning, Girlfriend to Girlfriend Money Chat, Marriage and Money, Money Habits, Money Psychology, Personal Finance, Women and Financial Literacy

A Woman’s Financial Responsibilities in Her Household: Part II

In Part II of A Woman’s Financial Responsibilities in Her Household, I discuss some of the barriers women face on our way to become financially literate, and how the men (e.g., husbands, fathers, grandfathers, brothers, friends) in our lives can help. In part I, I discussed some gender generalizations regarding how money responsibilities are handled in a typical household and shared some intropsection I have regarding my situation during the earlier years of my marriage.

Women and Financial Responsibilities

Women are eager for information about financial planning and investing. In the 2014-2015 Prudential Study, Financial Experience & Behaviors Among Women, 18% of the women surveyed (survey polled 1,407 American women between ages of 25 and 68) said they would like to be more involved in financial decisions that affect them and their households. As another example, Fidelity Investments (Money Fit Women Study, 2015) found 92% of surveyed women (total respondents = 1,542 women ages 18+) wanted to learn more about financial planning, 75% wanted to learn more about money and investing and 83% wanted to get more involved in their finances within the next year. Yet, despite these statistics demonstrating women wanting to get more engaged with our finances, many of us exhibit a great amount of discomfort with our abilities to make wise financial decisions. We’re more confident in the ability of our spouses/partners to assume full financial responsibilities of long-term financial planning than our own.

Barriers to Women’s Financial Competence

Let’s take a look at some of the reasons women in general feel unprepared or not confident making financial decisions.

Fidelity Investments 2015 Money Fit study:

women financial confidence

2014-2015 Prudential study on Financial Experience & Behaviors Among Women:

women lack financial confidence

In sum, the barriers to women’s financial competence tend to fall under the six following categories: (1) lack time, (2) lack financial knowledge, (3) lack trust of the financial industry, (4) lack confidence, (5) lack hands on experience managing money and (6) lack support from spouse. Not surprisingly, few of these barriers are related.

If we can break two or more of these barriers the success rate to increase financial literacy among women is likely to go up. For instance, a woman with a spouse who fully supports her to pursue financial literacy is likely to have more time learning about personal finance and financial planning. The husband would be more likely to take over more household chores so that the wife can pursue her interest. As the woman begins to learn financial literacy, she will learn to read and speak the financial language. In the process doing so, she will learn about the different financial services and products.

As she’s learning she will likely discuss her newly acquired knowledge with her family members and friends. When it’s time to hire a finance professional, this woman will have been well equipped with the knowledge and skills to articulate what she wants and needs, and able to distinguish for herself good and bad professionals. This scenario is my ideal. The steps don’t have to go in this particular order. The information presented here is for you to play around with, and find out what’s best for your situation.

You may ask, where does one begin to seek out information to improve one’s financial literacy? I suggest you follow my blog and my social media, and also check out my Resources page. The Resource page is a work in progress and I update relevant materials.

Men Promoting Women’s Financial Literacy

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Financial Empowerment, Financial Journey, Financial Planning, Girlfriend to Girlfriend Money Chat, Lifestyle, Marriage and Money, Money Habits, Money Psychology, Personal Finance, Women and Financial Literacy

A Woman’s Financial Responsibilities in Her Household: Part I

In Part I of A Woman’s Financial Responsibilities in Her Household, I discuss some gender generalizations regarding how money responsibilities are handled in a typical household and share with you some introspection regarding my situation during the earlier years of my marriage.

There are many aspects to personal finance and financial planning, ranging from budgeting, paying for a vacation, purchasing a home, purchasing insurances, retirement planning and estate planning. This is important to keep in mind as we discuss household financial responsibilities.

Women and Financial Responsibilities

Gender Generalizations

In most households, the typical stereotype type is that the wife is responsible for balancing the checkbook (e.g., managing the day-to-day budget) while the husband attends to bigger picture financial planning (e.g., purchasing insurances, tax planning and investing retirement funds).

Certainly, there are households where the wife doesn’t participate much in or any part of the family’s financial responsibilities. This was illustrated in a 2013 Fidelity Investments Couples Retirement Study, where two in ten women admitted to having only some or no input into the day-to-day financial decisions in their households. Then, there are households where the wife is the CFO. And in between, there are households where both the wife and husband participate equally in every aspect of the family’s financial situations.

In general, though, women still view managing and balancing the family’s checkbook and budget as a woman’s role. These women believe such responsibilities are traditionally deemed more feminine. Husbands, on the other hand, are more suited to attending to the bigger picture household financial planning, as they are being seen more technical savvy and/or have a higher risk tolerance personality.

This gender generalization around household money management is evident in the 2014-2015 Prudential study on Financial Experience & Behaviors Among Women. The study reported that women respondents ranked themselves highest on their knowledge of managing debt and managing money (about 30% gave themselves an “A”) and lowest on their knowledge about generating an income stream in retirement and investing (less than 10% gave themselves an “A” and many gave themselves “F”). Such findings certainly give some insights into what women in general value and do well at when it comes to financial responsibilities in the household.

Many of my married girlfriends recalled their mothers taking care of the family’s basic day-to-day budget. Once married, my girlfriends just automatically followed their mothers’ footstep when it came to managing finances in their own households. Yet, when it came to their household’s bigger picture financial planning, many of my girlfriends didn’t have much of a clue.

For instance, some didn’t know all the various liabilities they have, some didn’t know all the different retirement accounts their husbands have, some didn’t know if their husbands received stock options as part of the compensation package, some didn’t know how much their husbands were putting into their deferred tax accounts, some didn’t know what their car and/or home insurances covered (or would not cover), some didn’t know if their husbands had disability insurance, some didn’t know how many brokerage accounts they had, many didn’t know what universal liability insurance is, and the list went on and on. Their husbands were taking care of those responsibilities and didn’t always involve their wives in the process, either consciously or subconsciously.

Throughout those conversations and discoveries many of my girlfriends expressed a lack of time to spend on long-term financial planning. I could relate in many ways. Like my girlfriends, I was happy filling my day with work, childcare, household chores and exercises. I enjoyed spending time planning social events for myself and my family. I took pride in doing interior decorating, planning for holiday gatherings and shopping for the lowest bargains (extremely time consuming).

When would I have had the time to learn about investing in the stock market, keep track of my family’s investment portfolio performance, peruse through the IRS website to reduce family income tax, learn to calculate how much life and/or disability insurance my family needs, or work on estate planning with my husband?

I’m sure if my life situation forced me to I would have done all that and perhaps more, however, my husband was taking care of all those financial responsibilities so that I didn’t have to. We were each great and efficient at what we “owned”. That was the whole idea behind the concept, division of labor, right? At least I thought so.

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