Managing Your Own Money Marathon

By on September 17, 2013 in Money Management

I say all the time to my clients: building your financial foundation is not a destination, it’s a journey.  It takes time, dedication to certain habits and routine, and focus on consciously deciding what really matters to you in life.

Back in late April, I made the decision to do something crazy that I’d never done before (and quite frankly, never thought I would do since I don’t consider myself an athlete).  I committed to walking 26.2 miles for the Jimmy Fund/Dana Farber Cancer Institute, a charity that is important to me.  Why did I do this?  For a few reasons: 1) I was ticked off at what happened at the Boston Marathon and was determined to participate in something that honored the people who died or were injured; 2) my Dad was a patient at Dana Farber from April 2008 – August 2009 and my family has a lot of kindness to repay so raising funds is important to me; and 3) I wasn’t doing very well with maintaining an exercise schedule of any kind and so I needed to set a personal goal that would stretch and push me.

As someone who didn’t necessarily view themselves as an athlete, how did I get started? I decided that it mattered enough to raise the funds for a good cause and if I was going to stretch myself in the process, why not a marathon (I’d done the half marathon 3 years ago, I could do this too, right?).  I signed up to participate in the event.  I looked for a plan to help me do what I had no idea how to do because I’d never attempted such a feat before.  I carved out time and scheduled the plan into my calendar of an already-busy life.

Isn’t it funny how a lot of the process I used for my walk applies to money management too?  You have to decide that it matters to you to be proactive with your money; you have to sign up (or show up) to learn how to do it; you have to develop a plan that works for you and; you have to find time to manage your plan and your money.

And the parallels go even deeper than that.  Here are a few of the key reflections I had about how marathons and money management are similar:

1)     You have to manage your resources effectively – For the marathon walk (and to some extent during my training as well), I had to fuel myself regularly with water and food along the way but at the same time I didn’t want to carry anything too heavy.  So I didn’t carry much with me and every few miles at a rest stop I had to decide how to refuel and adapt accordingly.  I also had to decide when to reapply gel to my feet so I wouldn’t end up with raw feet and nasty blisters!  It was a bit like balancing a budget (I know, such a horrible word…savings and spending plan is so much better) as I had to stay in touch with my energy and fuel myself as appropriate.  In terms of a financial plan, you’re always able to manage your resources more effectively if you know what matters and what doesn’t so that you’re not using money wastefully on things that don’t make you happy.  Manage the money you have!

2)     Having a plan offers a framework for smaller steps to lead to bigger steps – When I found a plan online to use for beginner marathoners like me, I instantly sighed in relief.  I wouldn’t have to do it alone, someone (or the plan) would help me know what to do.  The plan kept me on track, focused and aligned with the smaller steps along the way that would be necessary to get to the bigger step of the actual walk.  In managing your money, smaller steps like monthly deposits in your savings account can add up in the end to helping you make a big purchase or serve as a stable source of money in the event that something unexpected comes up.  And in the larger scheme of things, smaller proactive steps managing your money can ultimately also lead to financial stability in the short-term and a secure retirement in the longer-term.  In a nutshell, if you do the work to take the smaller steps, you’ll reap the rewards of the larger steps later on down the road.

3)     TRUST the process – One of my favorite sayings is that it’s not about the destination, it’s about the journey and who you become in the process.  I trained for 4 months, and some of those days were super hard.  I also sweat something awful most days in the New England summer humidity, yet I kept on walking.  After an 18-mile training walk on a Sunday in mid-August, I somehow bruised my left heel and had to take a whole week off from training just several weeks before the event (can you say freaking out?!?!?).  Truth be told, there were several moments where I heard the voice in my head say “can you really do this?”  But I had to trust that everything was happening as it should, and use my plan as a guide and adapt as necessary.   That’s just what it’s like with a financial plan – you set it up with the best of intentions and use it as a guide most of the time but when life throws you a curveball that you weren’t expecting you have to trust and adapt.  Managing your money proactively and using money as a tool to support your life is like the training that I did, so that you can enjoy your life now (the journey) and in the future (the destination).

Sometimes people think that managing money is too hard of a skill to learn and that they’re the only ones who don’t understand it.  I’m here to dispel that myth once and for all as I’ve proven that money management is a teachable and a learnable skill if you’re willing to train yourself in effective and efficient money habits and routines.

And all I have to say to that is if I can complete a marathon walk for charity, then trust me – learning how to manage your money will be a piece of cake in comparison (and I’m pretty sure you won’t walk funny or have blisters when you’re done!)!!!!

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Getting Out of Your Own Way to Step Toward Financial Freedom

By on September 3, 2013 in Financial Freedom

Over the course of the last few months, I’ve had the occasion to talk to lots of people about what it is exactly that keeps them from wanting to talk about their money, and in particular what it is that holds them back from stepping forward to once and for all learn how to proactively manage their money.

What I found out didn’t necessarily surprise me since I’ve been clear for a while now on what gets in the way of people choosing to financially empower themselves, however I was once again surprised by how what I shared with people seemed surprising to them.  It was as if a light bulb went off in their head!

Here are the top 3 challenges that I find people struggle with when it comes to even raising their hands to ask for help when it comes to their money:

1)     “I’m the only one who doesn’t understand money” – If I had a bullhorn and could walk around everyday life this is the #1 money misunderstanding that I would talk about so that people would understand that they are NOT the only ones who didn’t get the “money memo”!! (Alas, with someone as opinionated and vocal as I am it’s probably best not to give me a bullhorn!)  The statistics are staggering – approximately 70% of people live paycheck to paycheck, which means they likely don’t have any savings and they may be managing large amounts of debt as well.  Also, a new statistic I heard the other day said that a recent survey indicated 76% of people feel out of control when it comes to their finances (LearnVest, 2011).  So in essence, about ¾ of people are not at all comfortable or in control when it comes to using their money to their best advantage.  Does that still make you feel alone about not understanding money? I hope it helps you to understand that if you don’t understand money that you are actually in the majority.

2)     “I’m embarrassed/ashamed/guilty that I don’t understand more about my money than I do” – This is a subset of #1 above, and has people feeling that they should know more about money management.  But here’s what I have to say to that – if you were never taught how to manage your money in the first place, why should you know how to do it? It’s not taught in our schools, and overall it’s a systemic issue that most adults don’t know how to manage money.  I didn’t learn until I went to college that how I grew up (with parents who taught me how to manage money) wasn’t the norm (and in fact it was anything but the norm).  I tell people just to let themselves off the hook…if they never learned how to manage money in the first place, simply acknowledge that and ask for help to learn how to be intentional and proactive with your cash flow.  End the guilt and shame today and move forward, making sure to be compassionate with yourself about your financial past.

3)     “Managing my money will be too hard/will take too much time” – My typical client tends to be a real go-getter who is focused on their careers and their families and living an active lifestyle.  While that’s great (and I live actively as well), that means they have limited time to manage their money so they need a quick system that is effective and is streamlined to be used in their rapid-paced life.  What I find sad about this is that people tend to say “I make good money, so at the end of the day while I could be doing better I’m doing ok and it’s not too bad – managing money is hard and takes a lot of time.”  It’s not too bad?  Is that what we’ve come to accept in our lives…that it’s ok just for things to be “not too bad”?  How about we start thinking about each aspect of our lives and reevaluating just how awesome we can have things be?  With respect to your finances, after an initial investment of time to understand where you are and where you want to go, you can easily set up streamlined systems to joyfully use money on things that matter to you while saving money and getting out of debt.  I promise, it does not need to be hard and it can be simple and efficient (and yes, even fun!) if you’re willing to do the initial work to put together a solid financial plan and then actually work that same plan.

So while I’ve been known to help deflate the seriousness and stress that is typically associated with money and finance, I do take my work very seriously when it comes to helping people remove the roadblocks to financial freedom and financial independence.  I can help you when/if we have a chance to interact, however I don’t always get to meet everyone in person (or by phone), so how will you help yourself to get out of your own way and move toward a financially empowered future today?

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Redefining Success on Your Own Terms

By on August 20, 2013 in Financial Plan, Financially Authentic, Success

There’s an underground epidemic going on in our society, and I’d like to talk about it since it’s impacting many people’s ability to see money for what it truly is – a tool to support your life.

Too many people are working too hard to chase success and in the end, they are still miserable.  As we run the proverbial rat race and try to keep up with the elusive “Jones’ ” we have a tendency to define our success based on how much money we earn and even worse than that, we compare what we earn to what other people earn.  The end result?  We never feel good enough about where we are in our life or who we are.  This is happening to many people, including people who are earning 6-figures and are therefore in the top 10% of income earners.  I know because I see it in almost every one of my clients and in the “money confessionals” I hear very often.

It’s time to start redefining success in our culture and on our own individual terms.  Why bother to work so hard if the outcome of that work is making you miserable?  Life’s too short, it’s time to reevaluate and get off the hamster wheel of life.

How do I know all of this?  I used to be running at the front of the rat race, working a job that paid me well but I was miserable doing it.  And bless their hearts, I have a lot of extremely talented friends and colleagues who work hard every day to move themselves forward and they come home empty, exhausted and miserable every day after trying to work harder and earn more money in roles that don’t suit them well at all.  For me, this felt like I was a square peg trying to shove myself in a round hole – I didn’t fit and deep down I knew it.  I was meant to do something else, and each day I chose not to seek that “something else” I was losing a part of my soul.  I felt stuck though because how could I ever leave my high-paying job and a career I had invested almost 12 years in?

Many people say that they have no choice but to stay in their jobs given “the economy.”  To me, that’s a bunch of crap.  Yes, it’s not easy right now in the job market and I wouldn’t suggest that you give caution to the wind and just quit your job.  But I will suggest that you consider making a huge mental shift from reactively accepting what’s in front of you (what I call living life by default) and instead become more proactive in moving yourself toward greater happiness (what I call living life by design).  If you truly hate your job and/or simply want to be doing something different, what are you doing right now to take a step toward fixing that (even if it’s a small step)?

Start with what you can control.  You can make it a priority to set aside time to gain control of your finances to build a strong financial foundation that gives you freedom and choice in the event that another role that’s better suited to you comes along (but that perhaps pays a bit less).  You can set aside time to think about what you do want instead of spending so much time on what you don’t want.  Because when you keep thinking about what’s wrong with your life, all you’re doing is attracting more of the bad stuff toward you – remember the basic principle of “like attracts like”?

As I’ve done my own work on redefining success, I’ve done 3 key things that have helped to fundamentally shift how I view my own success. My hope is that by sharing them with you that you’ll find at least one way that will be helpful for you to start seeing success as being more than about your paycheck!

1)     Find or create a definition of success that makes YOU happy:  According to my trusty dictionary, “success” and “successful” can be officially defined in a few ways:

Success (noun): 1. The achievement of something desired, planned, or attempted. 2.a. The gaining of fame or prosperity. B. The extent of such gain. 3. One that is successful.

Successful (adjective): 1. Having a favorable outcome. 2. Having obtained something desired or intended. 3. Having achieved wealth or eminence.

Now I tend to like the definition of success as “the achievement of something desired, planned or attempted”.  Setting goals is healthy and can help to keep you focused on learning and growing.  However, sadly enough society tends to lean heavily on the more financially-oriented definitions of “gaining fame or prosperity” and “having achieved wealth or eminence.”

For me, I’ve considered many different definitions of success over the last few years, and I’ve concluded that success for me is really a state of mind and that I get to decide what my goals are and how I’ll work to achieve them.  That’s one way I think of success, and yes – sometimes I am financially rewarded for working toward a goal and I enjoy that.  However, my favorite all time definition of success comes from Paulo Coehlo:

“What is success? It is being able to wake up every morning with your soul at peace.”

It’s taken a really long time to get there and a lot of personal work, but I can finally say that each morning I wake up at peace.  I’m no longer a square peg in a round hole whose spirit feels dampened – I’m one of few who get to do what I love for a living.  A lot of that has to do with the fact that I was brave enough to realize I am more than my paycheck.

2)     List 50 ways that you are successful that have nothing to do with money: This is an awesome exercise that I just recently completed for myself after a colleague suggested it.  I’ve got to be honest, I struggled after the first 10-15 ways but I stuck with it and ended up with a big smile on my face.  It was peaceful and liberating to see the other ways that I evaluated my success – I am authentic and real; I am an AWESOME aunt to my two adorable nephews; I am well-spoken and communicate effectively and efficiently; I use my skills and abilities to help others build a strong financial foundation and begin to create their own personal economies; I live in (and with) integrity.

3)     Get your financial affairs in order to stop the fear:  Ultimately, we are all human and need to know that we are safe and secure before we can consider making any major changes in our lives.  One of the ways that my clients and people I talk with feel unsafe is that they feel financially unstable and/or financially misaligned with how they are using their money.  However, I typically find that once people have a financial plan that helps them to align how they use their money with what matters to them that the financial chaos and resulting fear in their lives disappears.  They’ve taken control back of their lives, and they have a complete understanding of their resources and opportunities to start moving forward.

In the end, redefining success on your own terms can have a tremendous impact on how healthy your relationship is with money.  You are not just how much you earn, you’re more than your paycheck and you’re a divine creation who was put on earth to contribute in your own way like no one else can.  Your only job is to reflect on how it is that you’re meant to contribute with your unique skills and abilities, and to break through your barriers to true success!

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My “Top Ten List”: Money Management and Personal Development Books

By on August 6, 2013 in Financially Authentic, Money Management, Success

As an avid reader, I am continually sharing my favorite books with friends, family, and clients alike.  As I relax into some good books myself this week while on vacation, I thought I’d share some of my favorite books with you on the topic of money and self-development.  (Note: the books below aren’t in any particular order, they’re simply some of my favorites.)  I’ve also shared a note or two on the topic of the book as well as why I typically recommend the book so that you can more easily determine if it’s something you might be interested in yourself.

1)  Secrets of the Millionaire Mind (T. Harv Eker) – This is one of my “go to” books for clients as it focuses on understanding the difference in habits between rich and poor people.  Focused almost exclusively on money mindset and understanding your personal financial blueprint, this book can help you to identify what subconscious money beliefs and habits might be standing in your way so that you can start attracting more money into your life.

2)  The Soul of Money (Lynne Twist) – This book is a more spiritual look at how we view money and our money consciousness.  Many people talk about scarcity and abundance when it comes to money, however few talk about the concept of “sufficiency” and living with a certain level of money that simply makes us happy (and taking the time to determine what that level looks like).   One of my favorite all time quotes about money comes from this book: “Know the flow – take responsibility for the way your money moves in the world.”

3)  Smart Women Finish Rich / Smart Couples Finish Rich (David Bach) – Both of these books offer tremendous insights into the practical day-to-day aspects of money management as well as a longer-term focus on investing and growing your net worth (i.e. concepts like time value of money are explained).  If you’re just starting out, or looking for a book to give to a young woman as a graduation gift this would be a great choice.

4)  The Law of Divine Compensation (Marianne Williamson) – This book focuses heavily on the spiritual principles of faith and money, and how money and abundance can be attracted by strengthening one’s faith.  This book isn’t for everyone, however if you’re a person of faith (religious or spiritual) this book may interest you…it’s one of my all-time favorites and my clients love it too!

5)  The Big Leap (Gay Hendricks) – This book isn’t specifically about money, however it focuses on how to recognize the signs when you’re pushing the edges of your comfort zone and the world seems to just go crazy! If you’re at a point in your life where you’re growing in leaps and bounds (or you would like to be), this is a great resource and read for you.

6)  The Slight Edge (Jeff Olson) – Sometimes in life, it’s all about the simple steps we take little by little to move us forward.  Unfortunately, we often forget that simple steps, when accumulated, can have a tremendous impact on how far we go.  If things feel overwhelming sometimes and you’re looking for some motivation to learn how to start moving things forward in your life, then this book is a great place to start inching forward and gaining your “slight edge.”

7)  The Success Principles (Jack Canfield) – This book is like a “success Bible,” giving you many steps that you can take to move toward the most successful version of yourself.  It’s a long read (over 500 pages), but it’s easily digestible in short chapters focused on different aspects of successful behavior.

8)  The Art of Extreme Self-Care (Cheryl Richardson) – While the topic of self-care may not seem like it has anything to do with money or the topic I work on with my clients, it’s often one of the first hurdles that we need to acknowledge and address – busy people forget to take care of themselves and then run the risk of injuring themselves either in the short term or the long term, which could ultimately impact their earning capacity (i.e. disability, stress, underperformance at work, etc.).  If you’re looking to crack the code on how maximize your ability to perform in your life and at work, start with this book to learn how to take care of yourself.

9)  The Gifts of Imperfection (Brene Brown) – Often times we get caught up in who society and others tell us we should be.  When we chase other people’s dreams, we end up being unhappy.   This book is about the journey from “what will people to think?” to “I am enough.”

10)  Daring Greatly (Brene Brown) – This book’s premise is that when we acknowledge our fear, embrace vulnerability, and adopt courage in our lives that we, too, can live a whole-hearted life full of happiness and joy.  (Note: it doesn’t claim it’s easy, it simply claims it’s possible if you’re willing to do the work and dare greatly!!)

I hope that at least one of these books piques your interest and helps you grow in some way – enjoy!

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How to Systematically Save Money to Support Your Goals

By on July 24, 2013 in Saving Money, Savings and Spending Plans

“There is no need to wait for anyone to give you anything in your life.  You have the power to create what you need.  Given commitment, clear goals, and action, it’s just a matter of time.” – Susan Jeffers

This is one of my favorite quotes because it feels so full of hope (to me anyway) that we can all design our lives intentionally instead of simply accepting what is in front of us.  However, so much of our world is unfortunately full of negativity and thoughts completely contradictory to this quote.

Ironically, I stumbled back across this quote just before I started writing this article and it couldn’t come at a more opportune time in my life than now.  I’ve been struggling with putting a dream of my own back into action (after what we’ll refer to as a “temporary delay of game”), and through a series of steps I’ve taken in the last few days, I have essentially decided that I do indeed have the power to create what I need and want.  And that dream now has my full commitment.

So how does dreaming and goal-setting connect with saving, you might ask?  It’s a great question.  While I do believe that you can create what you need and want in your life, I also believe that there’s something to be said for taking inspired action to support what you want to create.  Otherwise said, if your goal requires financial support, why not work to support your goal as soon as possible?

However, before we get into how to save money to support your goals, I’d like to take a moment to distinguish between a dream and a goal.  A mentor of mine, Alison Armstrong (www.understandmen.com), once defined the difference between a dream and a goal as follows:  goals are dreams with deadlines.  In other words, dreams are things that you enjoy thinking about and let mull around in your head (think daydreaming and smiling while you’re doing that), whereas a goal is a dream that you actually sit down to plan out and allocate resources toward.  Typically, one of the resources that you may want to allocate toward your goal is money.

If you’re one of the people who haven’t yet sat down to think about your dreams and goals and how to support them and you’re considering doing so right now, I typically advise my clients to walk through a very simple process:

  1. Decide if you have a dream or a goal – This may seem simple based on the definition above, however it actually requires a decision on your part.  Do you have something you’re just thinking about (a dream) or do you have something you’re committed to that has deadlines and needs resources (a goal)?  It’s an important distinction to make so that you’re not trying to allocate resources (i.e. money) toward something you’re not fully committed to just yet.
  2. Determine if financial resources are required and if so, how much – If you’ve decided that you have an actual goal that you’d like to commit yourself to, then it’s time to see if you’ll need money to support accomplishing your goal.  If the answer is “yes,” then take some time to quantify how much money you believe you’ll need to support achieving the goal and in what time frame you’ll need that money.
  3. Calculate a monthly amount, automate, and build it into your financial plan – Steps 1 and 2 are relatively simple in the sense that they require “yes” or “no” answers and an assessment of how much money might be needed to fund a goal (in the event it does require financial resources).  If a goal requires money, it’s important to break it down to smaller goals to begin taking steps toward your goal.  Take the total amount of money you’ll need to support the goal at hand, divide by the number of months that you have until you’ll need the money, and arrive at a monthly amount you want to save.  Once you’ve got that monthly amount, it’s time to kick it up a notch and build it into your financial plan (via a specific and budgeted savings account) and automate (whether by actually setting up an auto-withdrawal or simply scheduling a specific day for you to wire funds to your savings account).

In the end, this may seem like a simple money management process on the outside (and in many ways, it is), but the key hurdle is taking the time to sit down and actually decide which of your dreams are going to absorb your intention and which will become goals that require financial resources.  Like the quote mentioned at the beginning, “given commitment, clear goals, and action, it’s just a matter of time.”

 

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