Tag Archives | Financial plan

How to Avoid a Post-Holiday Financial Hangover

By on December 11, 2014 in Financial Plan, Holidays, Money Management

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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How to Assess and Improve Your Level of Financial Health

By on August 21, 2014 in Financial Foundation, Financial Health

When I first started working as a financial coach, many people would mistake me for a financial advisor or financial planner. They thought I was someone who would help them learn how to invest their money for retirement.

And while financial advisors and financial planners are dear colleagues of mine and are very talented professionals, my work is very clearly in a different space where I’m helping people with their budgeting and money management skills so that they can focus on getting out of debt and saving money with the hope of building a financial plan to support their goals.

So in order to help people better understand what I did (and what I didn’t do), I created what I like to call “The Financial Health SpectrumTM” which includes the 3 phases of Build, Protect, and Grow your financial assets. These 3 phases simply reflect different levels of financial health, and while none of the phases are “bad” there is an increasing level of financial health as you move from the “Build” phase through to the “Grow” phase. In helping people to understand what type of financial support they need, I encourage people to take a few minutes to assess where they fall on this spectrum so that they can properly identify which financial expert can help them with their goals and with improving their level of financial health.

In order to help you determine where you might fall on the Financial Health Spectrum™, let me explain each phase a bit further along with the respective professionals that you might want to connect with:

  1. Build phase — This phase is typically where the 70% of people living paycheck to paycheck who are feeling out of control when it comes to their finances will land. When building your financial assets, you’ll be looking to do such things as establish a budget (or what I like to call a “savings and spending plan” because budget is such a restrictive word), develop more proactive money management skills, get out of debt, and save more money. To me, this phase is about improving your financial stability and strengthening and repairing your financial foundation so that in the future you can grow your financial assets. In this phase, you might look to work with someone who can help you increase your income, decrease your expenses, or perhaps do both! This is the phase where I work with my clients, and some other colleagues who can help you in this phase include CPAs, money mindset coaches (to help you understand if you have money beliefs that are holding you back in some way), and salary negotiation coaches (so that you can maximize your earnings).
  2. Protect phase — This phase is generally exemplified by wanting to either insure assets (property and casualty insurance, life insurance, health insurance, disability insurance, or long-term care insurance) or planning to have your wishes known about what to do with your assets in case anything happens to you. Experts in this phase include licensed insurance professionals who can help you determine the right type and amount of insurance that you need and estate planning attorneys who can help you with drafting all necessary legal documents such as wills, trusts, family planning/guardianship paperwork, health care directives and proxies, and also Medicare/Medicaid paperwork.
  3. Grow phase — At the end of the spectrum, once you’ve strengthened your financial foundation and protected the financial assets that you do have, you’ll also want to think about putting your money to work for you and growing it through investments and other financial vehicles (i.e. annuities, etc.). The financial professional you’ll want to consider in this phase is a financial advisor or financial planner who will take the time to understand your future financial objectives and design a plan customized just for you to grow your money over time to achieve your goals.

As mentioned before, there is no “right” or “wrong” phase to be in, these phases are simply an opportunity for you to recognize where you’re at right now and determine the next steps that you’d like to take for yourselves to improve your financial health. I also encourage people to think about moving along the spectrum as a longer-term process since strengthening your financial foundation and building financial independence is often a multi-faceted journey that takes place over time and with attention to progress (and not perfection). It is also important to note that you may be in more than one phase at the same time (i.e. saving for retirement while looking to more proactively manage your monthly cash flow and put the proper legal paperwork in place).

Taking the time to understand where you are on the The Financial Health SpectrumTM may well be one of the most productive things you can do to stop and assess your level of financial health. What is your next step to strengthen your financial foundation? Is there a financial task you’ve wanted to handle for a while and haven’t yet taken care of…perhaps because you don’t know the next step to take? Do you know which financial professional would serve you best to take that next step forward?

If you’re ready for a solid resource to support you on assessing your financial health, The Financial Health Telesummit may well be the answer — and the best news is that for a limited time, I’m sharing this valuable information with you for an investment of just $97! CLICK HERE to learn more about how some of my favorite colleagues and financial experts can help you decide on the next steps to take in improving your financial health and to determine whether this resource supports you in powerfully paving your path to financial freedom.

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Facing Your Financial Fears

By on July 24, 2014 in energy of money, Financial Fear, Money Mindset

Just the other day, one of life’s lovely ironies came and sat in my lap. Want to know what it was?

I came down with a pretty decent case of what I like to affectionately call the “financial grungies.” Pretty ironic given that I teach money management and proactive finances for a living, right?

So what are the “financial grungies” exactly? For me this time, it felt like not wanting to honestly take a look at something related to my finances (more about that below), a knot in my stomach, a racing mind, and my blood felt like it was coursing through my veins at an extra-quick pace. Oh, and all of that was wrapped up in a nice big bow of FEAR and SCARCITY. Yuck, yuck, yuck. It was so clear that financial fear had come to pay me an unwelcome visit.

Yup, the teacher and healer got to use her own tools to heal herself. Gotta love it.
And here’s what I reminded myself of when I got to diagnosing the situation at hand and whipping out my financial toolbox:

  • BREATHE! This may be the most important suggestion I’ll make in this entire article. Living in the knot-in-your-stomach-blood-coursing sense of panic won’t ever serve you, since it’s highly unlikely that you’ll be able to think or operate from a clear space. So this is exactly what I did when I felt the fear kick in – I stopped what I was doing (or should I say what I was pretending to try to do….and I was doing it very ineffectively I might add), and I moved to the nearest chair and started to breathe deeply, in and out. The sense of panic and fear within me slowly died down after a few minutes.
  • Raise your vibration – Breathing normally is only really the starting point and it’s intended to try to restore you back to an equilibrium point (and out of the “grungies”). Once you’re feeling somewhat stable, you’ll want to do something to jump start your energy again – think of it like a car battery where you want to give yourself an electric charge. Depending on what gets you going, you’ll have a different way of raising your energy. Some people dance or exercise, yet for me I find it soothing to listen to a guided meditation that’s specifically wired to reset my brain waves. When I did this the other day, on the other side of 15 minutes I was already feeling much better and was ready to take on the next step. This step is important and the intention is to put you in a positive frame of mind before you move forward to see what’s at the root of the financial fear you’re feeling.
  • Get clear on what gets to be handled – I’ve said for years that financial clarity leads to choice, which leads to the ability to contribute in a bigger way, which results in a higher sense of connectedness. Without clarity, you’re often left feeling disconnected (from yourself and from others) which only enhances the sense of fear in the current situation. For me, I knew that over the last few months I had been investing quite a bit of money into my business and myself (as the business owner). After breathing and meditating, I got clear that the task ahead of me was to update my list of business investments. I knew that the investments I made were wise ones (and ones I would make over and over again), and so I knew it was time to briefly summarize the dollar value of those investments.
  • Break down the task (or tasks) to small, manageable steps – In my example, the tasks to be completed were relatively simple in the sense that it involved consulting transactions and balances on various bank and credit card statements. In your case, it might be a bit more complex, in which case you’ll want to think first about the end result you want. From there, think about the first step you would take, then the second, then the third, etc., continuing until you have a solid flow of steps mapped out to get you the end result you desire. As examples, if your task is to work on getting out of debt you’ll want to understand the total amount of debt you have along with interest rates and minimum payments. If your task is to be saving more money, you’ll want to get clear on what you want to save for and how much you want to save.
  • Take one step (and repeat until complete) – It’s as simple as it sounds – take your first step as soon as humanly possible to build positive momentum and start shaking off those grungies once and for all. I know that the minute I sat down at my computer and started a brand new business investment summary that I instantly felt much better…and it only got better from there!

The outcome of taking each of these steps is that you are able to accept the situation as it is, and in a grounded way work through whatever financial challenge is contributing to the fear at hand. As a bonus step, it may also support you to confide in someone you trust what it is that you’re working through (both the fear and the steps you’re committed to taking), so that they can hold you accountable to the steps that you want to take as well as support you in moving through the fear in whatever way they are able to.

In the end, the lesson here is that no matter how proactive you try to be (and I’m very proactive!), sometimes financial fear secretly slips into the picture without you even realizing it. And if you ignore the fear, you may end up significantly altering your road to financial freedom by inadvertently sabotaging your financial plan.

So don’t let financial fear hold you back from standing fully in your power – begin clearing away the fear and start healing and transforming your relationship with money today!

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How to Inspire Honest & Authentic Money Conversations in Your Relationship

By on July 10, 2014 in Couples and Money, Money Partnership

As I concluded a program recently with an amazing couple, it reminded me just how much can be at stake when you’ve got 2 people (and sometimes more if children are involved) in a money conversation.

Most people aren’t necessarily familiar with what it is that gets in the way of having effective money conversations in a relationship (click here for prior post on this topic), let alone how to proactively build a mutual foundation for authenticity, honesty, and trust.

In working with couples, there is always the initial space that we create where they get to hear each other out. We get to understand how each partner grew up around money and how that impacts them, and the “baggage” that they bring into the relationship without even realizing it. There’s also an appreciation gained of each other’s “money type” and how that plays out in their lives (both individually and together as a couple).

And once we clear through the past, we’re ready to get started on building an amazing financial future – as a couple! In order to do that, I recommend 3 key steps to get started on building a strong, joint financial foundation:

  1. Approach money with a spirit of partnership – One of the biggest mistakes I see couples making is that one or the other of them is right about how to handle money. For the couples I work with who thrive, they make a concerted effort to explore what each of them has to offer regarding managing money, and each of them gets to be heard and contribute. As a couple, it’s a team game – and while not all team players are created with equal strengths and abilities, each player deserves to be part of the team and contribute to the financial partnership. So allow yourself to be friendly, fun, curious and inquisitive when it comes to how your partner interacts with money…not only is money a divine tool to support you in your life, it’s also an excellent teaching tool for you to learn about your loved ones and why they say and do what they do!
  2. Appreciate other dynamics at play in your relationship – While money is indeed its own unique entity, there are very often other social dynamics at play when it comes to building an authentic and honest financial partnership. While this may not apply to all couples (and in some couples it can be reversed, which is ok too), very often men are wired as “providers” and women are wired as “hunters/gatherers.” What does this mean exactly? In a nutshell and as it relates to money, men are generally wired to “bring home the bacon” and provide for their families. In today’s day and age, many women are often wired this way as they are committed to their careers and professional excellence. Unfortunately, while women’s liberation has been an incredibly important shift, sometimes it can lead to confusion as to who the provider is in a relationship (the man or the woman?). This confusion can then seep into who is accountable for the different aspects of managing the finances – who is the primary earner (or are both key earners for the household)? Who gets to manage the day-to-day finances – the primary earner or the one who works less hours or stays at home? Is one partner responsible for planning for the longer-term future (i.e. retirement)? Understanding up front the financial roles that each partner will accept responsibility for in the relationship is a key component to building a financially peaceful life as a couple.
  3. Align and plan how you will use your money with what matters to you both – Now that you’ve created a space of partnership and taken some time to determine the roles each of you will play in your financial lives, it’s time to put “pen to paper” as they say and develop a financial plan. Your mutual situation may require a plan that involves handling the day-to-day expenditures while getting out of debt and saving money. The key to any financial plan that supports a couple is that there is room in the plan for the unique needs and wants of both parties. And yes, this means that if your significant other spends money on something you just cannot understand, you may get to be quiet about it (provided that it’s not putting you in a place of financial hardship)! An effective financial plan will use money in a way that’s first and foremost aligned with the mutual goals of the couple (i.e. saving for a house, a new baby, college funds for children) while also incorporating a solid balance of fun and self-care for each partner.

With a spirit of partnership and mutual respect, designing a mutually beneficial financial future is an amazingly creative and loving process that can set a couple up for incredible success. Simply remember to be curious and inquisitive whenever your partner does something with money that you don’t understand – you’ll often be surprised what you can learn about your partner and they may have important input to contribute to an even more solid financial foundation for the both of you!

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5 Steps to Build Financial Stability in Your Business and Your Life

By on June 12, 2014 in Entrepreneurship, Financial Stability

MONEY – it’s a word that strikes fear in the hearts of many, however it doesn’t have to be that way!

Even worse than the word money is the word BUDGET. That’s like the swear word of money. I prefer “savings and spending plan” – it feels like money is flowing vs. being restricted.

In working with small business owners to help them with their finances, I’ve learned 5 key steps to start creating financial stability in both your personal and business lives. I firmly believe that one of the universal principles of money is that once you demonstrate that you can manage the money you have, that you’ll be able to attract MORE MONEY. And who doesn’t want more money?!?!?

Here are the 5 key steps to start building financial stability in your life and business:

Step #1: Separate your personal and business finances

Picture a visual in your mind with a “financial fence” between two houses. The house on the left is your personal financial “house,” and on the right is your business financial “house.” The fence is short enough to be able to stand on your tiptoes to talk with and coordinate with your neighbor.

Why should you care about this visual? If there’s no separation between your personal and business finances, you’ll never truly be able to understand how profitable (or unprofitable) your business is. And profitability is key to being able to make smart decisions about your business and to understanding the success of your business.

This essentially means separate bank accounts for your personal and business finances so that you can track financial activity separately. The ideal situation is for both “houses” to have their own solid financial foundation.

Step #2: Know your personal needs

It is critical for small business owners to know the monthly cash flow needs of their personal lifestyles so that they can build their businesses to support that lifestyle. Start with understanding the monthly amount that you need to pay the bills, to eat, and to have some fun in your life (your lifestyle expenses). This information will help you start to understand how you want (and need) your business to perform.

Step #3: Know your business needs

Now it’s time to understand the monthly needs of your business. The main piece of information you’ll want to get a solid handle on is what your fixed costs are. Fixed costs are just a fancy way of describing the costs that you’re incurring each month (i.e. costs for your email marketing service, rent (if applicable), medical insurance, etc). Determine what types of fixed costs you have and add up the total amount.

Then, if you take the monthly personal amount that you need (Step #2) and add on the monthly business amount, you’ll have a solid monthly revenue target to aim for in your business to cover your costs. (Note: This does not factor in the need to pay taxes on your business profit. If you want to go the extra mile for taxes, increase the total revenue target by another 30% to be conservative.)

Step #4: Pay yourself regularly

As business owners, we dream about positive change and transforming lives with our solutions. So we deserve to be rewarded for that, right?

I see many business owners forgetting to pay themselves regularly, or perhaps even at all. And while I can understand that when starting a business that there are sometimes more expenses than there is cash, it’s also important to give yourself some type of paycheck to recognize the value of your work.

My best advice if you’re not currently paying yourself regularly is to just start with a small paycheck. It’s not necessarily about the amount of the paycheck (at least at first), it’s more about the habit of paying yourself regularly. Every Friday I’m looking to give myself a paycheck, even if the amount varies weekly.

Step #5: Develop a financial routine

Financial matters can take up energy and require some thought, so it’s important to make sure you schedule regular time to handle your finances so something doesn’t slip through the cracks. Setting up time in advance to practice proactive money management is a key to success.

My #1 secret weapon with my clients is to schedule a weekly “money date.” Pick one regular time each week where you’ll commit to addressing money matters – paying bills, invoicing clients, reviewing your bills and any statements for errors (trust me, it happens more often than you’d think it does!), etc.. It’s amazing how much calmer you’ll feel about your finances when you know you’ve got time scheduled to address anything that you need to. In essence, it’s having time set aside to execute the financial plan that you put in place for yourself.

That’s it – just 5 simple steps to getting started on a life of financial independence! Just one step that you take today can empower you to start moving toward a life of financial freedom and stability so that you can attract more cash and abundance into your life. So what step will you take today?

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