Love Is Not Enough: A Smart Woman’s Guide to Money. Merryn Webb Somerset

or DVD player. No, at £29.99 each we don’t see why we shouldn’t have one in every room and a digital radio or two thrown in for good measure. It all adds up to a lot of money being spent that would never have been spent a decade ago. How much have you bought in the last six months that you don’t need? Find a credit card statement from a few months ago and have a look at it. How many of the things you paid for with your card can you remember ever having or do you still have? Were they really worth buying or would you now rather have the cash in hand?

      Shoes and handbags

      My friend Nick once asked me why on earth it is that women spend so much money on handbags and shoes. A man, he said, only needs three pairs of shoes – one for wearing with work clothes, one for wearing with casual clothes and one for playing sport. Yet every woman he had ever known appeared to need upwards of 20 pairs. Indeed a survey from Harper’s Bazaar in 2006 interviewed 1,000 women and found that half of them owned over 30 pairs of shoes and one in ten owned 100 pairs. One in ten also admitted to spending £1,000-plus a year on shoes. The right shoes, said the editor of the magazine, ‘can turn you from the girl next door into a sex goddess in seconds’. Nick found handbags even more bemusing. Men, he said, don’t need them at all; they just carry money and door keys in their pockets. So why do women need to have so many bags? Indeed why do they need them at all?

      A few days later he came back to me. He’d figured it out, he said. They are the only two things that look the same on everyone regardless of their weight or body shape: the average woman may not be able to fit into the same jeans as Kate Moss and would feel miserable even having a go in the changing room but a pair of Prada shoes looks much the same on everyone. He’s right of course. The runaway sales of shoes and handbags are nothing but a function of our insecurities about our figures. How sad is that?

      “I’m always buying new shoes and I might spend as much as $1,500 on a really great pair, but I don’t splurge on clothes.”

      Shania Twain

      And it isn’t just clothes, cosmetics, CDs, TVs and face cream you’ve been conned into buying when you don’t need to. It’s new cars, insurance, overpriced credit card debt, and expensive mortgages, phone tariffs and utilities. Financial services firms are just like fashion firms in many ways: they know that many of us have all we need when it comes to money (a mortgage, a current account, a savings account or two and a pension) so to keep their profits growing they have to continue to invent new products and persuade us we need them. So once again we find ourselves paying too much for useless tat (insurances against things that really won’t ever happen, for example) only this time it’s usually useless tat we don’t even understand. This doesn’t make any sense: you work hard for every penny you earn so why let it slip through your fingers so easily? Distinguishing between the products you really need for yourself and those that the corporate world wants you to think you need (so it can make ever higher profits for itself) is absolutely vital.

      So next time you think you might need a new pair of shoes, another credit card, some clever kind of insurance, or any other financial product stop and think. Do you really need it? Or does someone else need you to think you need it? Nine times out of ten you will find it is the latter.

      I have a simple self-help method I use when I have to bring reality into my spending. When I see something I want in a shop I look at the price and see how many work hours it will take me to pay for it. Then I decide if it is really worth buying. Take a £200 handbag. If you earn £30,000 a year and work 8 hours a day, you are clearing around £10 an hour after tax. So that handbag is going to cost you 20 hours, or two and a half days of solid work. Do you want it that much? Sometimes the item in question might be so perfect that you do want it that much. Spending – even if unnecessary – is not all bad. I happen to think that having a coffee in Starbucks every morning is worth it, for example – I like the coffee and I like to sit by myself in one of their armchairs for a few minutes before I go to work. I also think that going to a spa with my sisters for the occasional weekend is worth it, not because I have the faintest faith in the treatments (I’ve had a great many massages in my life and I still have cellulite) but because it gets us away from our work, husbands and boyfriends and gives us time to talk. And very occasionally a handbag is worth it too. Think of spending in terms of how much happiness you are buying yourself for the money you are spending. Is it enough? Very often it is not.

      My friend Caroline has a good anti-spending wheeze too. It works like this, she says: ‘Read high-end catalogues in the bath, and as you wallow, imagine the whole consumer process: choosing the lovely new chrome coffee maker, the thrill of arrival, the excitement of first use, the novelty wearing off, the putting away in the cupboard, and, finally, the sullen realization that it hasn’t changed your life. By the time the water gets cold, you don’t want any of it after all. Sting’s been quoted as saying he wishes his wife would get into tantric shopping and that’s exactly what this is – you look and look and look but never buy.’

      The good news is that shifting your behaviour so that you spend less shouldn’t be too hard if you concentrate: the scientists tell us that it takes about three weeks to create a new habit or break an old one. And when you’re vacillating, it’s worth bearing in mind a phrase that the Texans have for those who spend stupid amounts of money on ostentatious consumer goods they neither need nor can really afford. They call them ‘big hat, no cattle’ people – people who consume for the sake of it and as a result have lots of rubbish stuff but not much in the way of real assets. Look at it like this and I think you’ll find it easy enough to cut your spending on ‘big hat’ style things.

      There are a thousand ways to cut your spending on the smaller things in life. We all know that if we took our lunch to work and never visited Starbucks we’d save a great deal – we can all cut at least £50 out of our monthly spending with a little concentration and most of us can cut out a great deal more. The easiest way to do this is simply to make yourself keep a spending diary for a while. Just as keeping a food diary is a splendid way to lose weight (everyone hates to look at a list that proves overeating at the end of every day), keeping a money diary is a great way to cut spending (looking at a list of wasted cash is also a nasty way to end a day). A survey in 2006 showed that the average member of the British public cannot account for £1 out of every £8 that they spend – making a total of over £80 billion every year. Where does that money go? A Diet Coke while you wait for the train, a packet of crisps when you suddenly feel a bit peckish at eleven, a few bits and bobs when you are passing Boots on your way to the post office and so on. The details may be hazy but the money’s gone.

      Bartering for books

      If you really want something you may not actually have to buy it to get your hands on it. Instead you could swap an item you have already but don’t need for it. www.ReadItSwapIt.co.uk is a book-swapping site – it has around 8,000 members with 40,000-odd books available to swap. The founders estimate that the swaps done in the site’s first three years saved the members £350,000 they would otherwise have spent buying books. www.Mybookyourbook.com is similar but charges you to join. Swopex.co.uk is another swapping site that allows users to trade DVDs and computer games. www.Iswap.co.uk and www.eSwapit.co.uk allow you to swap pretty much anything. Another site worth looking at is www.Freecycle.co.uk. The idea of this one is to find free homes for unwanted possessions of any kind. If you find what you want you just arrange to go and get it, no payment involved. Finally you might look at new site www.swapaskill.com which allows people living in the same community to exchange skills.

      I don’t want to spend all of this chapter on the small stuff so I’ve put in an appendix at the back of the book offering 53 ways to make many small savings which I hope you’ll read (they all add up). Many are obvious (turn your heating