The real price of that handbag in the window

Status symbols take many forms. From fancy jewelry and designer clothes to luxury cars and oversized houses, they send a variety of silent messages from their owners. "Notice me," some status symbols plead, while others appear to boast, "Anything you can buy, I can buy bigger and better."

In recent years the status game for women has added another category: "arm wear," a term describing pricey designer handbags, coveted by women of all economic levels.

Walk through high-end fashion stores and you're likely to see handbags displayed on walls like paintings in an art museum. There are bags with buckles and chains. Bags with pockets and pouches. Bags with snakeskin-embossed leather or python and alligator skins. What they all have in common is a hefty price tag.

The current InStyle magazine includes pages of handbags, with prices soaring to $5,283 for a yellow leather creation by Versace. In London, the most astonishing arm wear of all may be a Louis Vuitton patchwork bag costing £23,484, or $45,235. As The Times of London reports, that's nearly $6,000 more than the cost of a new Mercedes.

If that's just slightly too much, you might consider one made by Fendi of sable and chinchilla. That will be £20,000 ($38,500), please, Madam.

Such purchases elevate the term "bag lady" to new social status.

For women of means, a four- or five-figure handbag represents a mere blip in their checkbook. Easy come, easy go. But for those with modest paychecks and middle-class lives, even a $300 or $500 bag can hurt a budget.

Just ask a young fashion designer in London, who told The Times, "I know a lot of women who will starve to get a handbag. I've got a lot of friends like that." How ironic that the very objects designed to carry wallets are playing a role in flattening them.

In defense of such splurges, a 30-year-old makeup artist who has bought more than 200 handbags told a reporter for The Times, "When I wear a designer bag, the way I walk is different, the way I feel is different. It makes me feel good to have a designer bag." Yet this expensive game of ego gratification might not make her savings account feel great.

"Starving to get a handbag" is hardly an approach that would please Suze Orman, author of the just-published "Women & Money." Despite the impressive advances women have made in recent decades, she finds that very little has changed in the way they deal with money. When it comes to personal finance, they "hand over control and refuse to take responsibility as they do in no other area of their lives," sometimes spending recklessly or refusing to save.

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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