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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 Spectrum™” 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 phaseThis 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 phaseThis 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 phaseAt 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).

So if you’re ready to get more information on how you can assess your financial health, make sure to stay tuned for more details coming soon on “The Financial Health Telesummit” coming in January 2014.  It’s a free event that you can attend from the comfort of your home phone, computer, or your favorite listening device (iPod, iPhone, etc.) with some of my favorite colleagues and financial experts who will help you to decide on the next steps to take in improving your financial health!

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Managing Your Own Money Marathon

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

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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Financial Infidelity: Are you keeping financial secrets in your relationships?

I could sit here and quote statistics all day long about how money is the #1 reason for divorce. I won’t bore you with that, however we all know just how true that is, don’t we?

Money is serious business sometimes. When one person is challenged by money management, that’s one thing. Add two people into the equation with different approaches to managing money and different upbringings and experiences with money, and you’ve got yourself a witch’s brew bubbling over that’s potentially a ripe environment for keeping secrets.

Financial infidelity can show up in many different ways and it can slowly and quietly tear at the fabric of trust in any relationship (husband and wife, parent and child, sibling to sibling, best friend to best friend. etc.), however for today I’m going to focus primarily on how it can impact your relationship with your significant other. It’s a dicey subject, and not a lot of people want to talk about it (and most people certainly don’t want to hear about it). However, it keeps coming up in the course of the conversations I have with my clients and also when I speak with couples about money in relationships. And I feel that if I don’t take responsibility for shining some light on it, it may significantly impact your relationships before you know it. So I’m diving in…head first.

It starts with just a small white lie or “untruth” (my made-up word for when you’re not sharing the whole truth), never intending to hurt anyone. Someone loans you money for an intended purpose, and you use it for something completely different. You buy new clothes or a new gadget and when your significant other asks “is that new?” you say “oh, this old thing?” There’s a separate bank account that you keep and your beloved doesn’t know that you keep it. You can’t seem to get on the same page with your spouse about how to use the money, you’re tired of fighting about it, and so you throw up your hands and simply just do whatever you want to. It may be even be so bad that you unconsciously (or perhaps consciously) give your significant other the “financial middle finger” just to get back at them because they ticked you off somehow and didn’t agree with something you wanted to do financially. OUCH.

I’ve personally heard every single one of these scenarios (and more) with either my private clients or from people with whom I’ve had a “money confessional” moment. It doesn’t have to be this way if you’re committed to having authentic and truthful conversations about money with your loved ones. Trust me, I’m not saying it’s an easy feat to have those types of conversations…I’m simply saying that it’s worth it to have those types of conversations. Honest and open financial conversations can change your relationships with your loved ones forever, and the added bonus is that they strengthen your financial foundation too!

So how do you start to heal your relationship(s) if you sense that financial infidelity is an uninvited house guest? There are 3 steps that I would suggest you start with to begin to weed financial infidelity out of your life:

1)  Be honest with yourself

There’s an old saying that “people who live in glass houses shouldn’t throw stones”. Before you start to think about what your significant other might be doing to impact the level of financial authenticity in your relationship, look inward to see what you might be doing that isn’t on the “up and up” and could be considered hurtful if your significant other found out about it. How are you behaving with money that if your spouse/significant other found out about they would be hurt by or upset about? What might you be embarrassed about if someone found out about it? While I’m a huge fan of financial independence and creating your own financial rules (even if you’re in a relationship, you don’t have to always 100% agree with each other on how to handle the money), it’s always best to be up front and honest about your thoughts and approaches when it comes to financial matters. So start with being honest with yourself, and see if you’re contributing in any way to having financial secrets in your relationship.


I can’t stress this one enough (were the capital letters a good indicator of that one for you?). This is the really, really brave step. It’s time to step forward with your loved one, and let them know that you want to have a really honest conversation about money and how you can be doing things better…together. Share what you learned about yourself and your money habits when you were honest with yourself (yes, it’s time for a confessional). Ask them for their opinion on what they think you could be doing better, what they could be doing better, and what you could both be doing better together when it comes to being proactive with your money and designing a financial plan to support your life. (Don’t forget to breathe, OK?) Sometimes this can be scary stuff, but if you ask the challenging questions and then step back and really listen to what your other half has to say you might be surprised at what you hear. Make sure you respectfully give them the space to speak their peace, even if you don’t agree with what they’re saying when they say it. Be inquisitive, ask questions when they say something that you don’t agree with or understand. It’s amazing what can happen when you genuinely sit down with the intention to listen and hear out the person in front of you. Put yourself in the shoes of your loved ones, and do your best to compassionately hear another person’s perspective!

3) Get on the same page

Once you have been honest with yourself, and taken the time to understand the perspective of your loved one, you’re ready to think about getting on the same page with him/her. Let me be clear, this does not always have to mean that you have to compromise about everything – it just means that you have both decided that it’s time to put everything out on the open in terms of your goals and what you want your life to look like going forward. No more secrets. Dream big together. Once you have goals, you can then incorporate them into a financial plan that will support achieving those goals by budgeting and saving money in advance! Being ahead of the “financial 8-ball” allows you to strengthen your financial foundation, and thus the foundation of your relationship.

I never said this would be easy, and I hope that you’re still breathing at this point (if you’re not, please start again….deep breaths in and out, in and out). I know this can be hard to look at, yet I know from having worked with many couples that when you tackle the big elephant in the room and address financial secrets head on that it only serves to strengthen your relationship for the better. The communication grows, the trust grows, and the love grows.

So if there’s any chance that financial infidelity may be impacting your relationship, is it worth it to you to think about beginning to repair the tiny tears of trust that may ultimately lead to a large crack in the foundation of your happiness? Only you can answer that question for yourself.

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