The real price of that handbag in the window

Expensive fashion accessories can undermine financial stability.

from the March 14, 2007 edition

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Although women are making more money than ever before, Ms. Orman states, "they are not making more of what they make." Offering one example, she writes, "Your closet houses the wardrobe of a powerful and stylish woman, but the dirty secret is that your credit cards are maxed out and you don't know how you're going to pay them off."

In a survey last year by Allianz Insurance, Orman notes, nearly half the women responding said the possibility of becoming a bag lady – the impoverished kind, not the one with the equivalent of a Mercedes on her arm – had crossed their minds.

Some middle-class women defend their purchases by explaining that they spend less on clothing these days, preferring to invest in a few good accessories.

The handbag mania comes on the heels of an earlier passion for expensive shoes – think Manolo Blahnik and Jimmy Choo. But even the most expensive status symbols can prove to be ephemeral. Fads come, fads go.

Just when some handbag lovers might be thinking they own enough and can start stashing a paycheck or two in the bank, another temptation is arriving on the fashion scene. The new must-have accessory, according to trend-spotters, is an expensive watch. And not just one watch, but many.

"Sadly, we have bid farewell to the handbag as the self-expressive accessory," says Patricia Pao, a retail specialist in New York. As a replacement, she notes, at least one high-end watch company is "embarking on an aggressive strategy to promote watch-wardrobing to their female customers."

"Watch-wardrobing." Think of it as the next way to keep a budget off balance.

Fashion always represents a tug on the purse strings. Who doesn't enjoy the pleasure of a new purchase, another addition to a wardrobe? It's probably a classic case of all things in moderation. But one thing is certain: A fleet of high-priced handbags in the closet and an array of expensive watches in the jewelry box won't help to finance a retirement or pad a savings account.

Making a case for good financial planning for everyone, a billboard for Charles Schwab offers this clever warning: "Crossing your fingers doesn't work."

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