Don’t Be A Baller

You know her.

She’s the successful independent professional New Yorker that every little girl from Milwaukee wants to be when she grows up.

She’s always dressed to the nines; Theory pantsuits by day, platform Manolo’s and some cleavage showcase from Intermix by night.  She shows up to her hair appointments every six-weeks, heeding the directions of her hairdresser like the most loyal disciple, for her single process, low-lights and hi-lights, Keratin treatments and scalp massage.

Her nails: reverse French manicured, shellaqued, crackeled, and occasionally sporting a Swarovski-adorned manicure, especially around the holidays.  She matches her Birkin to her Balenciaga without being too obvy.  Her designer sunglass collection varies depending on her travel plans.

She lives in a trendy neighborhood, slightly gay, maybe a few strollers, and definitely a gallery on her street.  The barista at the local French café knows how she prefers her soy latte and when she’ll be in to pick it up every morning.  Her apartment, while not huge, has some luxurious amenities.  A large closet to house her designer threads.  A state-of-the-art kitchen, although she doesn’t cook.  Maybe a terrace where she can go outside and have her morning cigarette.  And of course there’s Roberto the doorman who always accepts her Fresh Direct deliveries.

Maybe you know her in passing, maybe she’s more than an acquaintance, a friend-of-a-friend, the girl that always gets a round of drinks at the bar just because it’s Wednesday, the girl who knows the guys at the door who can get you into the place so you can walk up to the big guy at the rope and get into the VIP room.  She knows the chef who made your food who also has his own show on the Food Network.

You’re not sure what she does and how she pays for her lifestyle.  Maybe she’s in finance or PR.  Someone mentioned she’s an architect.  Works at a start-up.  Or a day trader?

Whatever she does, we all know who she is.  She’s a baller.

What’s a baller?  From the Latin phrase “basketballer/baseballer/footballer,” a baller refers to someone who spends a ton of money, usually on champagne and strippers (if you’re a guy).  Female ballers go shopping.

How does she afford this lifestyle?  Can she afford this lifestyle?  While some people do have the means—or the trust fund—to pay for this type of life, chances are she’s not only living at her means, she’s living beyond her means, swirling in debt even as she’s trying to keep up with the impossibly luxurious life that she’s created for herself.  It’s likely that the $120 check she just wrote for her spray tan will bounce.  And she’s already spent the $75,000 bonus she’s slated to be paid after Q1.

Fabulous life but can they really afford it? I'm talkin to you Carrie...

The truth is, it’s not how much you make but how much you save that determines your net worth.  You can make $300,000 a year, but if you’re spending it all on rent, dinner, vacations and clothes, you could be worse off than the woman buying school clothes for her kids at Goodwill.  On the other hand, it’s possible to make a significantly smaller salary than our friend The Baller, and with careful budgeting and smart money choices, you can save money and still take part in the activities you enjoy.

Think of your net worth as your assets (salary and investments) minus your liabilities (expenses, credit card debt, rent).  If you come out on the other side with a little extra in the bank, in savings or in a retirement plan, you’re in good shape.  On the other hand, even if you make a kajillion dollars, and you spend that amount and more, you could be in a tough place, and it could take you a long time to get out of that ditch.

Figure out your budget:

Calculate your fixed expenses (rent/mortgage, telephone, utilities, transportation, insurance, etc.) plus your variable expenses (gifts, dinners out, entertainment) and subtract that from your income (salary plus other sources of revenue such as dividends, rental income, etc.).  If you have a little income left over, you might be in good shape.  But make sure you’re maximizing your income, paying off debts and saving; in some cases it might be beneficial to eliminate or reduce some variable expenses to save more.

On the other hand, if you owe/spend more than you make, it’s time to rethink your spending habits.  Review your fixed expenses to make sure all the items are truly necessary costs.  Check out your variable expenses and figure out where you can save (i.e. cut out the bottle service, hair extensions and Hamptons share).  Make sure that you include as a line item in your fixed costs the amount necessary to make the minimum payments on your credit cards and other revolving credit every month.  Eliminate variable expenses and allocate the savings to pay down debt.  Once you have paid down debt (and reevaluated your spending habits) start saving.

Staying in once in a while, cooking, shopping at (gasp!) Macy’s with (double gasp!!) coupons and paying down debt may not be socialite cool.  But neither is bankruptcy court.  Don’t be a baller.

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3 responses

  1. O My! This is so true, don’t we all fell into this trap?
    Just do yourself a favor and go and check the interest and admin cost that you are paying on your accounts, you will be shocked!

    Everything that you have bought on credit will be gone, and you are still paying down!

    Watch out for these “Smiling Faces” who are just waiting to receive a great passive income from you.

    Please do take note, and start saving asap!

    Wishing you enough!

  2. So true! So often we’re intrigued by the Jones’s. But as you so aptly described, they’re busy trying to keep up with the other Jones’s.

    Thanks

  3. Reblogged this on moneymoxey and commented:

    Hey guys–We all know someone who’s high fashion AND highly leveraged–she’s a BALLER! Tune in next week when I profile a couple REAL “shot callers”-women who have worked, saved & invested their way to success! “Are you a BALLER or a SHOT-CALLER?”

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