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Building Your Financial Confidence

After meeting with one of my clients earlier this week, I followed up via email to send along her final financial plan (a.k.a. savings and spending plan) after we made some edits during our final session.

Her response back to my email was to thank me for the information and for our time together and to proclaim that she truly “felt like a grown up” after taking control of this area of her life.

Because I do this for a living and on a regular basis, sometimes I forget how empowering it can be for people to step into an area of their life and confidently gain the knowledge that they need to intentionally direct and design their lives. This was an amazing reminder from this client of what life can look like when your level of financial confidence is raised and you’re ready to move forward to begin reaching for your dreams.

It was also a reminder of the things that stand in the way of people being as financially confident as they could be, and what they can do to step into their financial power:

1) Know your numbers – This is the beginning point of building financial confidence. Many people are feeling financially stressed because they know something isn’t working, and yet they’re not sure what it is exactly. The stress is unlikely going to get any better without looking at the numbers to figure things out, and in most cases it’s not as bad as one might think it is. Confidence begins with determining where you are financially speaking right now, in this moment.

2) Be intentional – Once you’re clear on where you are in this moment, you can become clear on where you want to go. My experience is that without an intentional road map for where you want your money to go and how you would like it to be used, money will end up being used randomly and not as purposefully and powerfully as it could be to support your life. So take the time to think about your goals and to also think about what you’d like to have in your life. Once you’re clear on the things that you want in your life, you can design a financial plan to support what you’re up to. Without an intentional financial plan, money often gets used in an unaligned way that doesn’t serve what you want in your life and this often times impairs financial confidence. With a clear intention and a clear understanding of how money is working as a tool in your life, your financial confidence will grow significantly.

3) Always be in the financial flow – Once a financial plan is in place, it’s important to always be measuring and monitoring how you’re doing against the plan. Many people will design a plan, and then “set it and forget it,” forgetting that life often changes and that our plans need to adapt and/or adjust. Also, new financial opportunities or challenges may arise that need to be accounted for in a plan so it’s important to always be considering whether a plan needs to shift to incorporate those items. Also, being in a regular conversation about your money (i.e. the weekly “money date” I suggest to my clients) is also important. Without a regular and mindful review of what’s going on financially, financial confidence can be impaired and you may be left with an unnecessary experience of feeling scarce and worried instead of abundant and powerful when it comes to your money.

These 3 simple (and yet not always easy, especially at first!) steps, when used in tandem with each other, can support you to bolster your financial confidence and keep it at a high level. And with a higher level of financial confidence, you’ll be able to make confident decisions in your life as you use money as the divine tool that it is truly meant to be to support the life of your dreams!

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Living in the Bermuda Triangle of Finances

“When I read your description of the Bermuda Triangle of Finances, I stopped…and then I cried. It was absolutely 100% what’s going on for me.”

This was what my newest client shared as she openly and honestly talked about her relationship with money. She had each of the 3 classic symptoms that come with the “triangle” that keep my clients drowning and fearful instead swimming in the abundant life of their dreams.

So what is the Bermuda Triangle of Finances, exactly? Well, let’s start with remembering what the Bermuda Triangle itself is (as defined by Wikipedia):

“The Bermuda Triangle, also known as the Devil’s Triangle, is a loosely defined region in the western part of the North Atlantic Ocean, where a number of aircraft and ships are said to have disappeared under mysterious circumstances.”

When I first read this definition the word “disappeared” caught my attention. Because that’s what my clients feel like when they’re spinning in the triangle trying to keep their heads above water, often times without a financial plan of any kind. Thinking that they’re the only ones that don’t understand money and their finances, they feel guilty and ashamed and choose to hide below the radar instead.

And it can all be avoided if you understand the 3 points of the Bermuda Triangle of Finances and how they work together to have you experience that you’re drowning and spinning.

Point #1 – Not consciously using your money – In today’s society, we’re constantly bombarded by TV commercials and other advertising mediums that demand our attention to buy, buy, and buy some more! And as I always like to say, if you haven’t taken the time to decide how to use your money in your life then money will ended up being used to buy just about anything and often random things that don’t really matter to you. At that point, there’s a lack of consciousness about how you’re using money in your life that has money slip through your fingers when having a solid financial plan could instead support you to build a strong financial foundation.

Point #2 – Having a decent amount of consumer debt – Most of my clients, on average, have between $25,000-$50,000 of consumer debt. This debt is held either on credit cards or as a home equity balance (i.e. they transferred higher interest credit cards to a lower interest home equity line), and it was typically generated by living above and beyond their means (expenses exceeded income) for a certain period of time. Very often, there is not a strategy in place to pay off the debt, and the person is left trying to pay off debt for past expenses while they’re continuing to spend more than they make…and the debt increases even as they’re doing their best to pay it down.

Point #3 – Limited savings – For me, this is the critical shift in stopping someone from drowning in the Bermuda Triangle of Finances. Without any savings (or limited savings), life’s surprises with financial consequences will typically end up on a credit card (see Point #2 above). With savings, life’s surprises can be absorbed and cash can be used instead of debt. It may seem counterintuitive, however it’s critical to have savings and even be actively saving while you’re paying down debt. Many experts recommend using all extra cash flow to solely pay down debt, and in my experience it’s best to have a financial plan to divide extra cash flow toward both debt and savings to strengthen your financial foundation.

When people experience these 3 things, the feeling is frustrating…like your lack of a solid financial plan will just keep you in the same old downward spiral that you’ve always been in.

And I can honestly tell you that it doesn’t need to be this way. I invite you to take a stand for yourself and your life, and decide today to consciously design a financial plan that will support your goals.

Drowning in the Bermuda Triangle of Finances isn’t necessary. Are you ready to grab your lifeboat and use the tools available to support the life of your dreams?

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3 Key Financial Mistakes to Avoid that Can Rock Your Financial Foundation

In preparing for the call that I’m hosting next week, I’ve been spending a lot of time thinking about my clients and the struggles that they have when they first begin to work with me.

And while I’ll be sharing the top 10 most common financial mistakes that I see on the call next Tuesday, today I wanted to share with you 3 very common mistakes that I see. In my mind, there’s no time like the present to get you started thinking about the possibility of financial freedom!

Mistake #1: Not understanding the financial conversations that hold you back – In working with all of my clients, there is usually a desire to learn new ways of managing their money which is obviously an important part of overall financial health. However, what is often missed is taking the time to truly understand how you grew up around money; what are the underlying beliefs you have about money; and what are your financial fears – in a nutshell, what is your money mindset? Without awareness and understanding of the beliefs that hold you back, often times the day-to-day money management practices are sabotaged as these beliefs run around in your head sabotaging you unconsciously. As a personal example of this, I wasn’t aware that I had a belief that “financial security comes from a paycheck and benefits” until I considered working on commissions in someone’s small business several years ago. Without having taken the time to see that this was true for me, I wouldn’t have been able to shift that belief so that eventually I could step into entrepreneurship and own my own business.

Mistake #2: Lack of awareness around financial opportunities and challenges – Creating a new relationship with money largely consists of establishing new financial habits and routines, one of which is to consistently be present to where you are financially speaking in any given moment. What are your financial opportunities? What are your financial challenges? In being up front and honest about where you stand, you can clearly understand your starting point and then map the next steps forward. Understanding your financial opportunities and challenges is much like finding out what to program into the “point A” of your “financial GPS” – you’re more likely to get where you’re going if you know the direction you’re coming from!

Mistake #3: Living life without a financial plan – If you’ve got a “point A” for your financial GPS then you need a “point B” too, right? So many clients that I work with live in what I affectionately refer to as “the Bermuda triangle of finances”, with 3 common and consistent issues that keep them spinning: 1) making good money and not understanding where their money goes; 2) living with a significant amount of consumer debt from living beyond their means; and 3) limited (or no) liquid savings. This formula is a recipe for financial stress and chaos, and in order to move beyond that it’s important to have a financial plan that allows for you to handle your commitments in excellence while planning for the future (i.e. paying off debt, building a savings account, etc.). So many people that I meet and talk to muddle through their day thinking that financial stress is just a part of life – and I can absolutely tell you that it doesn’t have to be that way if you take the time to draft a detailed plan to manage your money and use it to support the things in your life that you’re up to!

While there are many more mistakes that I see people making that I will share next week on the call, these 3 mistakes are the most common and overarching ones that I see happening that keep people from living as abundantly as they would like to.

Each year millions of people make resolutions to strengthen their financial foundation and improve their financial health, so what financial mistake will you address in 2015 that will have you feeling more empowered when the calendar turns to 2016?

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How to Avoid a Post-Holiday Financial Hangover

It’s the end of January 2015 and you walk in the door at the end of your day and begin to open the mail. You freeze when you notice that the post-holiday credit card statement has arrived. Uh-oh…time to face reality from the “retail therapy” that took place before the holidays.

While I’m certainly a fan of a little retail therapy now and then, I will also say that if you’re willing to take some time to plan in advance to save money and keep from overspending that you can successfully avoid the post-holiday financial hangover!

Similar to everyday money management, designing a financial plan for holiday spending ahead of time that aligns with what matters to you allows more money to stay in your pocket while creating experiences and connections with people you care about.

Here’s how I encourage you to think through and design your own financial plan for the holidays:

Step #1: Decide on your “big” holiday occasions – There are so many opportunities to do things during the holidays that sometimes it can make your head spin. Deciding in advance what your “big” occasions will be (i.e. Chanukah, Christmas, New Year’s Eve, specific parties, etc.), and where you’ll enjoy investing your money the most will help you properly allocate most of your free cash flow to those occasions. And if possible, make sure to allocate a small portion of your holiday financial plan for the “unknown” events as well (i.e. those opportunities to head out unexpectedly with friends for dinner and/or have cocktails with co-workers before or after the company party).

Step #2: Focus on experiences vs. things – We live in a culture where we are constantly being bombarded to buy everything, whether it’s through a TV or radio commercial, an email, or perhaps even good old-fashioned “snail mail”. So before you start to think about purchasing gifts (which we’ll talk about in Step #3 below), I’d encourage you to think about whether a gift is what you really want to give. From my experience, people are craving connection and meaning in their lives, so ask yourself – are you in a place to provide either of those gifts to them? Some examples might include taking time to volunteer as a family at Thanksgiving at a soup kitchen and then coming home to a smaller meal later in the day, or perhaps scheduling a family event in December to get together with loved ones and asking everyone to bring their favorite dish to share with others (a bit like pot-luck style). Also, one of my favorite things to do is to make a donation to a charity on behalf of a loved one to a charity that has meaning for them. For example, in past years I’ve chosen to make a donation on behalf of my Uncle to remember my Aunt who passed away in 2008.

Step #3: Conscious gift giving – You’ve heard how Santa makes a list and checks it twice, so I encourage you to do the exact same thing! Put together a list of people that you’d like to buy presents for, including your kids’ teachers and the mailman, if appropriate. Once you’re done with that list, review it to challenge whether or not you need to buy something or perhaps you can refer back to Step #2 and give them the gift of an experience. Also, ask yourself the question whether there are people on the list who might appreciate one less thing to shop for during the holidays. As an example, my best friend and I decided years ago to focus on getting together for lunch instead and it’s one of the best gifts (less time shopping and more time together) we’ve ever given each other! For anyone who still remains on the list that gets to have a gift, take some time to decide on a target amount for each person so that when you get in the store you have some idea of how much you’d like to spend. And lastly, before you even head to the stores, hop online to search for promo codes or coupons at the stores you typically shop at – at this time of year there are always good promo codes and coupons online that can help you save money and keep more money in your pocket!

These 3 simple steps can honestly be done relatively quickly, yet it can save you hundreds if not thousands of dollars this holiday season. And a bonus tip for next year so that you can streamline your holiday spending even further if you’d like to: write down who you bought for, what you bought them, and how much you invested. Take this list and revisit it in January with two main purposes: 1) to see who you’d like to include for next year again (or perhaps who you no longer need to include); and 2) take the total amount that you spent, divide it by 12 get a monthly amount and begin to save in advance so you’ll have the money on hand to pay for everything next December!

And above all, remember to have fun when you’re thinking about planning your holiday experiences and gifts. In this day and age when everyone is so busy, take some time to stop and smell the roses. Life is short and it’s meant to be enjoyed!

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Creating More Income to Accelerate Your Financial Plan

When I put together a financial plan for my clients, they often get excited to see the possibilities of finally getting out of debt once and for all and also saving more money so that they can live a more financially stable life.

Typically, reducing spending is the first place that I look to support others in building a solid new plan, however there are two sides to the stability equation!  The other place to look at is creating more income, and that can happen in several different key ways:

  1. Ask for a performance review (and maybe even a raise!) – When I used to work in a corporate job, it was pretty standard to have at least an annual performance review, and sometimes there were even check-in points mid-way through the year to see how things were going.  However, it always surprises me that while there is generally a process in place for such reviews that most people don’t see these reviews as the massive opportunity that they really are and they end up simply going through the motions to comply with the required paperwork.  If you’re the one being reviewed, this is a HUGE chance for you to stand on the top of the mountain and shout as loudly as possible just how your results have contributed to results.  Don’t be shy, and make sure that you invest some time connecting your contributions to either increased income or decreased expenses for the Company.  Also, make sure that at least once a year that you’re checking in with your immediate boss to better understand his/her goals so that you can align yourself directly with what they’re looking to accomplish.  If you’re aligned with his/her efforts and can make him/her look good, then there’s a better chance that you’ll be taken care of both in terms of getting the right roles and assignments as well as being financially compensated for your efforts.  Lastly, don’t be shy about asking for feedback in between formal reviews – sometimes the best feedback that I received about my performance and how I could improve came in the casual moments where there wasn’t a formal process or form involved!
  2. Leverage your skills – We all have certain skills that we give away for free regularly, and while I’m a big fan of generosity of course, I’m also a fan of valuing your worth and being paid well for your skills and results.  Is there something that you’re doing in your life right now for free that you could be getting paid for?  Is there something that you’re really good at that your friends and family would absolutely love it if you’d just create something or share some information with them and they’d gladly pay you for it?  Spend some quiet time to think about where you might be leaving money on the table, and start to see whether you might even be able to earn a few extra hundred dollars each month to support accelerating paying down your debt and strengthening your savings account too.  And who knows, perhaps you’ll be able to earn a sizable living from something that you’re already doing yet never really stopped to think about monetizing it! (This is by far one of my favorite things that I love to do with people…seeing their eyes light up with excitement to think about being paid to do something they love is awesome!)
  3. Ditch the clutter – It’s my favorite time of the year to just go absolutely nuts and start getting rid of things that you don’t need! Some folks call it “spring cleaning,” and it’s a great chance to look at what you can donate or give away to someone in need while also thinking about what items of substance you might be able to actually sell to someone who needs it.  In fact, just earlier this week a friend and I decided to host a yard sale at her house later this month to get rid of some of the things that we just don’t need anymore – what a great way to ditch the clutter and make some money while having fun with your family and friends!

While there are certainly more ways to create income than the 3 presented above, these 3 will most definitely support you in getting started earning more money.  The combination of a solid money management approach fueled by extra income can be an exciting way to accelerate your timeline to financial freedom!


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