Tag Archives | Money management

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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How to Assess and Improve Your Level of 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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My “Top Ten List”: Money Management and Personal Development Books

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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Facing Your Financial Fears

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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Distinguishing Net Worth from Self-Worth

You are NOT the balance in your bank account.
You are NOT how much money you earn.
You are NOT your debt balances.

On a regular basis, I work with clients to support them in learning a scientific approach to money management which includes systemizing their use of cash flow to maximize the amount of freedom and choice that they have in their lives. As part of that process, we review what they earn, what they spend, and their account balances (i.e. bank accounts, credit cards, etc.).

And it always amazes me how often when I’m reviewing income, expenses, and balances (both bank accounts and debt), how often the client will feel such tremendous guilt and shame if they happen to be in a situation where they aren’t doing as well as they would like to be. It’s as if they take the information we’ve compiled and interpret it as a direct reflection of themselves.

So let me let you in on a little secret…your net worth is not your self-worth. So don’t confuse the two.

Your net worth is simply a calculation of what you own (assets) minus what you owe (liabilities). That’s it. It’s intended to be a benchmark at a point of time to evaluate your financial health. Think of it like a scorecard, if you will. Once you have your initial benchmark, the name of the game is to increase your net worth over time, primarily by saving money (increasing assets) and getting out of debt (decreasing liabilities). At any given time, your net worth is simply a data point that you can use to make future decisions about how to use your money.

Money is a tool to be used to support your life, not as a representation of your value in this world. You were born whole, perfect, and complete and even if your financial life isn’t going as well as you would like it to be, you are still that whole, perfect, and complete person. Yet money is indeed an emotional topic, and it’s very much one of the final “taboo” topics of our time…because as my client told me just this morning, “I felt this hole inside of me before because I was embarrassed about my financial situation. Now I know that I am not my money and my money is not me – it’s just a tool that I can use to support my goals and dreams!”

Building a strong financial foundation starts with understanding that you are separate from money. Money is simply a means of exchange used in today’s society. When you take the time to understand how your money can support you, you are able to empower yourself in your life!

So if today your financial situation isn’t quite what you’d like it to be – perhaps you’ve got more debt than you’d like or you don’t have much in savings – remind yourself that you are not your financial results, and that where you stand right now is simply information that may allow you to begin to more proactively strengthen and build a financial foundation fit to support you in your amazing future!

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