Living The Savvy Life: The Savvy Woman's Guide to Smart Spending and Rich Living

Living The Savvy Life: The Savvy Woman's Guide to Smart Spending and Rich Living

by Melissa Tosetti, Kevin Gibbons


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It's Not About Being Cheap.  Living the Savvy Life isn't about being a cheapskate, a miser or a tightwad.  It's about having security and peace of mind by spending less than you make.  It's about knowing where you stand financially on a daily basis so you can make intelligent fiscal decisions.  It's about being penny-wise on the things that are less important to you so you can spend money on the things that are important to you.  It's about choosing to purchase only the things that you love and make you happy.  It's about cooking at home more often so you can occasionally splurge on dinner at your favorite restaurant.  It's about creating an environment in your home that is warm, comforting, and expressive of  who you are.  It's about having a wardrobe made entirely of clothes that fit and look great on you.  It's about enjoying your time off even more because you planned for it and know you can “afford it.”  Although Living the Savvy Life is filled with ways to save money, it isn't about frugal living.  It's about finding, attaining and maintaining balance.  Are you ready to start Living the Savvy Life?

Product Details

ISBN-13: 9781600378348
Publisher: Morgan James Publishing
Publication date: 01/11/2011
Pages: 228
Sales rank: 389,492
Product dimensions: 5.40(w) x 8.40(h) x 0.60(d)

About the Author

Melissa Tosetti is the founder of the online magazine, The Savvy Life. She is an author, speaker, and teacher. Melissa’s passion is to show Americans how step off the pendulum that swings from overspending to extreme frugality. She believes balance is the key to enjoying life with financial security.  Melissa co-wrote a chapter on savvy living for the book, Your Military Family Network. She has appeared on numerous episodes of Pocket the Difference on the Fine Living Network, The Real Deal with Jeanette Pavini, and on Eye on the Bay. She is repeatedly quoted in nationwide publications including U.S. News & World Report,, Chicago Tribune, and Detroit News. She has chaired panels on savvy living at the Professional Businesswomen of California conferences in San Francisco and Sacramento. She also teaches courses on savvy living at Chabot College in Hayward, CA and around the San Francisco Bay Area.  Melissa is a second degree black belt in Choy Lay Fut Kung Fu and moonlights at Fearless Fitness in Foster City, CA. She teaches Kung Fu and fitness classes. In addition to teaching at Fearless, she is also a coach for FFIT@home (, which allows you to download Fearless Fitness’ Intensity Training classes to do in the privacy of your own home as well as offering nutrition advice and support. Whether talking about money or calories and fitness, Melissa’s message is still the same - balance. Melissa loves adventuring with her husband Paul and son Dante, whether it is in their own backyard or while traveling across the world. In her downtime, Melissa can be found cooking, gardening, horseback riding, reading, or watching the Food Network and the History Channel.

Kevin Gibbons is the Managing Editor of The Savvy Life. Kevin brings his 20 years’ experience as an engineer and program manager in the high-tech arena to help keep The Savvy Life running smoothly. In addition to maintaining production schedules and working with Melissa to determine content and editing, Kevin also contributes articles on managing finances and cooking. Kevin also co-wrote a chapter on savvy living for the book, Your Military Family Network. A scientist by training, Kevin lives the savvy life as it allows him to afford his assorted hobbies which range from photography to motorcycle riding to miniatures, modeling to gourmet cooking to compulsively reading everything he can find. Kevin and his wife live in the San Francisco Bay Area. Their house is full of 19th century and Art Deco antiques they found at belowmarket prices and bought by saving and purchasing on layaway.

Read an Excerpt


The Savvy Life Philosophy

Shortly after I moved to the San Francisco Bay Area, Paul and I joined a kung fu school. It wasn't long before martial arts became a big part of our lives. Paul, a natural athlete, was immediately noticed by the Master of the school and within less than a year, he was asked to become a full time instructor for its San Mateo, CA location. Within two years, he was promoted to head instructor. I continued my own training achieving first a black belt, then first degree and then second degree. Little did we know when we started that our martial arts path would mirror our savvy life path.

In 2006, Paul decided it was time to move on, and the following year we opened Fearless Fitness Martial Arts Training and Development Center in Foster City, CA. The aspect of martial arts Paul and I most enjoyed was sparring. So we decided to focus on teaching a mixture of striking, grappling and takedowns. Our timing was serendipitous. Two months after we opened, The Ultimate Fighter reality television show premiered. The show revived the Ultimate Fighting Championship (UFC) promotion company and turned mixed martial arts (MMA) into the fastest growing sport in the world.

Although sparring was our primary focus, we also wanted to teach the training techniques for MMA without students having to actually fight or make physical contact. I teamed up with one of our coaches, Erika Lawrence, and together we created the FFIT (Fearless Fitness Intensity Training) program. We like to describe it as MMA based and influenced by yoga, Pilates, bootcamp and second grade recess.

As Erika and I worked with our students, we listened to their previous weight loss struggles and heard the same diet-and-gain, diet-and-gain patterns. We knew that without creating lifestyle changes, those destructive patterns would continue. We designed a nutrition program focusing on portion control and consuming whole foods. However, recognizing the importance of food in our culture and quality of life, we figured out ways for students to still enjoy the foods they love so much, but in moderation.

From the inception of The Savvy Life website, I wrote about the similarity between controlling spending and controlling weight. As I continued working with students at Fearless Fitness, those similarities became glaring. I recognized that it didn't matter if I was standing in front of a class at Chabot College in Hayward, CA teaching money management or if I was doing a consultation with a Fearless Fitness student, the message was the same: focus your calories and focus your money on the things that are truly important to you.

With calories, it's about enjoying a mouthwatering, fresh-out-of-the-oven homemade cookie instead of wasting calories on a processed pre-packaged cookie that you find in the vending machine at work.

With money, it's about focusing your spending on the new jacket you really want versus impulse buying trendy tops you won't wear in six months because they've gone out of style.

It's all about making your dollar count and spending it on the things that give you pleasure versus mindlessly spending. The Savvy Life Philosophy and overall theme of this book is:

Save money on the things that aren't as important to you so you can afford to spend money on the things that are important to you.

It sounds easy, right? And yet, how many times have you gone into a store such as Target or Wal-Mart for one or two items and walked back to your car pushing a shopping cart loaded with bags? As you walked through the store, things kept "jumping" into your cart. You didn't realize how many stowaways you had until you started loading your car.

Before you beat yourself up, don't feel bad. Stores spend millions of dollars on psychological studies, advertising and marketing to persuade you to impulse buy. Once you identify the trend of random items jumping into your cart, it is very easy to steel yourself and focus your spending on the items you actually walked into the store to purchase - the items that are genuinely important to you.

The Savvy Life Philosophy in Action

The Savvy Life Philosophy works on a small scale such as the store, but it also works on a grand scale.

A more substantial example of the Savvy Life Philosophy is the way Paul and I look at cars and travel. Paul and I are passionate about travel. Our trips are very important to us. What we aren't passionate about are cars. They are simply a way for us to get from point A to point B. Because cars are merely tools for us, we purchase reliable used cars rather than spending over $30k for brand new vehicles. The money we save by not having two separate $400-$500 car payments allows us to spend on what is important to us: travel. That philosophy has taken us beyond our initial trip to Disney World. Three of our favorite adventures so far include:

• A week exploring the castles and history of Scotland and Orkney.

• A tour of China where we climbed The Great Wall and trained with the Shaolin Monks.

• A 10 day Alaskan cruise with our, then 2 year old, son Dante.

The Savvy Life Philosophy is really that simple. First, we identified what is important to us - travel. Then we identified what isn't important to us - new cars. We figured out a way to save money on cars and focused our dollar on what is important to us - travel.

Travel is also important to co-author and Savvy Life's Managing Editor Kevin and his wife Leta, but they enjoy doing it on their motorcycles. One of their favorite things to do is head out on their bikes for an extended trip. They will camp two or three nights and then splurge one night at a very nice inn. They save up for these trips by identifying and saving on something that isn't important to them - cable TV which can exceed $100 monthly. Instead, they save that $100 per month for their motorcycle trips.

One of my favorite examples of the Savvy Life Philosophy in action was put into practice by my friend Erin. I met Erin through Fearless Fitness. She moved to the San Francisco Bay Area from Vancouver, Canada and works as a nurse. A few months after joining Fearless, Erin's boyfriend Steve asked her to marry him. The engaged couple decided that purchasing a house was their number one priority and started looking for ways to save money. Erin had attended one of our Savvy Life seminars and asked to pick my brain about their finances and goal.

Erin is a naturally savvy woman and I was impressed with how well she managed her money. We identified a few additional areas to tighten up her spending, but it was Erin who chose a way to make the biggest impact on their savings. She decided to move into Steve's tiny apartment prior to their wedding so they could immediately start saving more than half of what they were separately spending on rent.

Erin identified what is important to her - owning her own home. She also identified what isn't as important to her - living in her own large apartment. At the time of this writing, she and Steve are happily married and are very close to having enough money for the down payment of their first home.

Everyone's passions and interests are different which is why the Savvy Life Philosophy is just that - a philosophy. It is up to you to decide how to apply it to your life. In Chapter 12, you will have a chance to review a series of questions that will help you put the Savvy Life Philosophy into action.


The Golden Rule

How many times have you told yourself: "If I just made a little more money, I would be OK."

It is easy and understandable to assume that if we just made a little more money it would solve our financial problems. However, it's typical for us to increase our spending with each raise, never giving ourselves the opportunity to catch up. If you increase your spending with every raise, it doesn't matter how much money you make. In fact, if this is your habit, the more money you make, the more dangerous your situation becomes. Your debt load gets bigger and bigger, to the point that it becomes impossible to get out.

In this chapter, we will look at:

• The Golden Rule

• The harm of overspending

• Successful role models

• Why we overspend

• The intangible benefits of following the Golden Rule

There are dozens of financial software products on the market and hundreds of books that have been written about managing personal finance - all of which have their benefits. However, like many things in life, the solution for successfully managing your finances is simple. The only way to achieve financial success and the Golden Rule of finance is:

Spend less than you make.

That's it. It doesn't matter how much you invest or how well your 401(k) is doing. If you spend more than you make, you will always be financially at risk.

Over the years of publishing articles on savvy living, we have come across people who make $115,000 annually, but spend $127,000. They have little, if any, savings and no comprehension of where their money goes despite their six figure salary. We have also met people who make $45,000 annually and spend just $36,000. They diligently put money in their 401(k) and have a healthy, growing savings account.

Spending less than you make sounds easy enough, right? And yet, according to a February 15, 2009 article on, "Eight Reasons Why We Overspend," the average American spends $1.33 for every $1.00 they make. With a $50,000 income, they spend $66,500 that same year. That is $16,500 more than they earn. If this habit continues, that $16,500 of debt turns into $33,000 the following year, $49,500 the next year and so on. None of these figures factor in the devastating cost of compounding interest.

Those who find themselves in this cycle have no opportunity for savings and no opportunity for security. All of their discretionary income becomes and remains focused on paying off their ever-mounting debt.

Overspending on a Small Scale

I once worked in a very difficult office environment. One of my colleagues was the executive assistant to the CEO. Her job was brutal and emotionally taxing. Every morning she came in and sucked it up because it was the only job at the time that would allow her to maintain her lifestyle. She drove a Mercedes she was making payments on, had a $1,000 a month clothing habit, and her hair easily cost $200 every six weeks to maintain. There were many things she could have done to reduce her cost of living such as scale back or reduce her clothes shopping. She had plenty of clothes to "shop her closet" for several years. Instead, she found herself trapped by spending more than she made. She further compounded her situation by increasing her spending with every raise rather than using the extra money to reduce her debt.

Overspending on a Grand Scale

Occasionally, I will hear someone say, "He has so much money, he couldn't spend it all." That statement makes me cringe. Celebrities, professional athletes and lottery winners continually make headlines with their poor financial habits. Michael Jackson is the poster child for how not to handle your finances.

According to a June 26, 2009 article in Time Magazine titled "What Happened to Michael Jackson's Millions?" Jackson pocketed more than $300 million from sales of his recordings since the early 1980s. In 1985 he purchased the rights to a catalog of music that included 251 Beatles songs. Those rights, as well as concerts, endorsements and music videos, would generate more than $400 million over the next two decades. And yet, in 2003 it was reported that Jackson regularly spent $20 - $30 million more each year than he earned. It is estimated that upon Jackson's death, he was $300 - 400 million in debt.

Another case of spending more than you earn on a grand scale is that of famed photographer Annie Leibovitz. Despite a seven figure salary from Vanity Fair and earning tens of thousands of dollars per day from celebrity clients such as Louis Vuitton, in 2009 Leibovitz found herself in default of a $24 million loan. Her debtors threatened to take two of her homes and worse, seize control of her entire photography collection.

Who is Doing it Right?

On the opposite end of the spectrum, famed investor Warren Buffett prefers a modest life. He still lives in the same Omaha, Nebraska home he purchased for just $31,500 more than 50 years ago. He drove a 2001 Lincoln Town Car for years which he bought second hand. Buffett had a net worth in excess of $37 billion in 2009 and yet lives off an annual salary of $100,000. That's just 0.00027%! Talk about spending less than you make!

Jay Leno is another great example of a wealthy individual doing it right. In a September 6, 2009 interview with Parade magazine he said, "When I was a kid, I had two jobs. I worked at a Ford dealership and at a McDonald's. I'd spend the money from one job and save the money from the other. That's still the way I am now. I live on the money I make as a comedian, and I put all the TV money in the bank. I've never spent a dime of TV money - ever."

In addition to following the Golden Rule of spending less than he makes, Leno embodies the Savvy Life Philosophy when it comes to his passion for collecting cars and motorcycles. His smart day-to-day money habits allow him the ability to joyfully focus on his passion for all things automotive.

Why Do We Spend More Than We Make?

One of the biggest reasons we overspend is the ability to get credit so easily. Walk onto any college campus in the United States during the first week of school and you will see companies lined up offering free gifts for signing up for a credit card. Head to the cash register of many major retailers and they will offer you an immediate discount if you open a store credit card.

One effect of this phenomenon is the fact that Americans carry an average of $8,700 in credit card debt. In 2008, the median annual household income was $52,029. That means the average American is in debt by over 16.5% of their income and that doesn't include mortgage and car payment debt.

Another reason we overspend is we bank on that next paycheck. Expecting another paycheck in a few days or a week gives a false sense of security that money is unlimited. The problem with this habit is we continuously find ourselves in debt to the following paycheck and never give ourselves the opportunity to catch up.

One of the most sobering lessons of the 2008 recession is that paychecks are not guaranteed. In that year, 1.2 million people lost their jobs. Spending into the following paycheck is the first habit to break.

The Perks

In addition to a growing savings account, the benefits of spending less than you make are tremendous. If you are unhappy in your job situation, it is easier to leave for a new position, even if it means taking a reduction in salary. As the economy ebbs and flows you will not feel as subject to its whims.

The psychological impact of debt and overspending is devastating. It causes feelings of anxiety, embarrassment and fear. Spending less than you make gives you control over your finances which, in turn, positively affects your emotional well being. It inspires wonderful feelings of confidence and control giving you the emotional freedom to enjoy life so much more.

Breaking the cycle of overspending is achievable. By creating a few simple habits and routines, you will easily shift from spending more than you make to gaining and maintaining control of your finances. In the next chapter, we will introduce six Savvy Habits and show you just how easy it is to spend less than you make.


Savvy Habits

One of the reasons so many struggle financially is a lack of education. Most people don't learn about money in school or from their parents. The good news is you can choose to educate yourself. Just by reading this book, you have made the first step towards taking control of your money instead of allowing it to control you.

Successfully managing your day-to-day finances is simply a matter of creating and sticking to fiscally healthy habits and routines. With habits and routines, handling your money becomes effortless. There are six key Savvy Habits at the core of Living the Savvy Life. These habits are easy to start, easy to maintain and they work.

Savvy Habit #1 Pay Yourself First

Just about every personal finance guru agrees that paying yourself first is the number one tool for successful financial management. It is also the habit that makes it easy to follow the Golden Rule and spend less than you make.

Paying yourself first is the process of making sure you consciously save for your future (both long-term and short- term), before spending on anything else, including your bills. The easiest way to do this is to have money electronically taken out of your paycheck and put into a retirement program such as a 401(k) and an emergency savings account. This process automates your way to financial success. The best part of this habit is once you initially set it up and reach your ultimate savings percentage goal, you just sit back and watch your money grow.

If you don't pay yourself first there is always something that money can be spent on instead of saving it. By automating your savings, you make the process both painless and effortless.


Excerpted from "Living The Savvy Life"
by .
Copyright © 2011 Melissa Tosetti and Kevin Gibbons.
Excerpted by permission of Morgan James Publishing.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Table of Contents
Introduction        Money Affects Everything             

Chapter 1         The Savvy Life Philosophy               

Chapter 2         The Golden Rule       

Chapter 3         Savvy Habits                   

Chapter 4         You Can Afford It           

Chapter 5         Where We Spend Our Money       

Chapter 6         Home                   

Chapter 7         Entertainment               

Chapter 8         Wardrobe                   

Chapter 9         Beauty                   

Chapter 10         Food                       

Chapter 11         Money                   

Chapter 12         What is Important to You?        

Chapter 13         Savvy Shopping   

Chapter 14         Celebrity Savvy Life Role Models     
Chapter 15         The Core of the Savvy Lifestyle         

Chapter 16         Tricks to Stay Motivated 

Chapter 17        Your Savvy Life       

Chapter 18        Favorite Resources

            About the Authors                    

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