MoneyWiseWomen

Money and the Blame Game

Lots of people play the blame game with money—you blame the person who “owed” you because you worked so hard, or tolerated something else that you thought would bring a greater payoff—but whenever you play the blame game, you miss the opportunity to gain more power, control and peace over your money. And when you don’t recognize the dynamic you’re engaging in, you’re doomed to repeat it.

 

Blaming someone else (or blaming yourself) about any frustrations over money has to do with the basic thought that your survival is being compromised. The perception is that this other person has the power to make or break your financial life, depending on what they do. It’s very difficult to like, much less love, someone on whom you believe that your survival depends. So when you are engaged in the blame game, you may forget that you are every bit as responsible for the relationship dynamic as the other person.

 

How To Improve Your Wealth Creation Competence

If one of your New Year's resolutions was to improve your wealth creation process, you have to approach it as if you were developing a brand new skill set, such as learning a sport or a game. If you want to continually improve your ability to create wealth, you need to keep in mind these 4 stages of awareness:

 

Unconsciously Incompetent. This is the stage where you don’t know what you don’t know. This skill or thing isn’t even on your radar; like before you were interested in learning to drive, you didn’t even think about it, right? Learning to drive was a non-issue. Many people are unconsciously incompetent with wealth creation because while growing up, it wasn’t an issue for them. Things got bought and paid for and no one ever talked about money. However, there usually comes a time when you have a use for the specific skill and then you become . . .

 

 

Look Into Your 2012 Crystal Ball

A couple of Saturdays ago, I finally sat down with my magic crystal ball. I was ready to create my personal 2012 spending and income plan. I was a bit nervous this year about what I would see in the ball. I really need to convert my house to gas, or at least replace my dinosaur of a furnace. Yikes. And I’ve been asked to join some friends on a big out of country trip. I would like to go! And since I already did my business annual plan, so I know what income I have this year.

So I sat down with a cup of Starbucks coffee, called up The Crystal Ball and set to work.

(Lights darken, crystal ball begins to glow, getting brighter and brighter, mists swirl in its depth and begin to part, and I lean forward, peering into the future….)

Two hours later, I had all my answers. Well, I had a lot of answers and I wanted time to think. To feel. To journal.  To digest the future I had just seen. This future seemed to have several scenarios and I was going to have to make some choices. I am reminded of that saying, “You can have anything you want, but you can’t have everything you want.” Rats.

Get Back On Track With Your Personal Budget

No one can ever be perfect with their personal budget; there will always be moments when you choose to overspend in a certain area, because something holds a higher priority for you than sticking to your budget. This can be either a conscious or unconscious decision. But getting back on track doesn't have to be difficult if you keep in mind 6 simple steps.

For employed people, I advocate the Zero-Based Personal Budget method, which means money in equals money out, every month. Since you can reasonably predict what you’ll be receiving, there are rarely surprises with this method.

For self-employed business owners, like myself, I try to apply the Zero-Base Personal Budget using an average income from the prior 6 months; if income goes down, you have to adjust your personal budget down as well. If income goes up, you hold the excess until you have another 6 months of evidence that your income has stabilized upwards. It can get more complicated, but you get the gist.

Some of you know that I use Mint to track if I am going over in one of the areas of my personal budget. I have alerts for my overspending “danger zones” which are eating out, coffee, coffee and coffee. I think I have finally conquered books as an overspending item! But because some months I have extra cash above my personal budget, I know that I have a little breathing room if I want to spend extra on something.

So, this last month I did. I had WAY too many meals out, in addition to special holiday grocery purchases. And somehow, I was so hypnotized by Starbucks pretty red holiday cups that I had a Peppermint Mocha in my hand more times than not.

Buying a Car Painlessly

Buying a new car can be painless if you do your homework. The last two cars we’ve bought have been kind of a spur of moment decision. Actually, my husband, Steve and I have talked about the make and model of car we wanted but that’s about it. A couple of weeks ago I came home from running errands and announced to my husband I wanted to buy a new car. Our 1999 Jeep Grand Cherokee had 143,000 miles on it and had done a great job for 12 years but I was ready for a new Jeep. That’s all it took to get Steve on the hunt for a Jeep Grand Cherokee. And today you can do your home and shopping in the comfort of your own home on the Internet. Steve began by visiting www.truecar.com , a website that helps consumers determine the true price of a car. You simply enter the year, make and model of the car you’re looking for and you’ll get the sticker price listed at local dealerships. You’ll also get a graph with the best local price along with great, good and market prices.

Make a budget that lasts

If you are going to make a budget that lasts, you can’t just jump to categorizing and slashing expenses—that’s a lot like jumping into a diet and following a certain regime without really understanding the “why” behind your eating—it’s not a sustainable solution. Just like with eating, you have to understand the “why” behind your spending.

This doesn’t have to be a laborious process; just becoming more aware should give you a lot of data in a few weeks. To begin, you should start using Mint (the best comprehensive tracking software I have used). Mint gives you a great overview and long-term tool. Along with Mint, I recommend taking a week or two to keep a journal with your daily spending, so you understand on-the-spot how you’re feeling before and after each purchase.

I have identified four types of spending that cover virtually every single dollar that leaves your bank account:

Applying Spousonomics To Money Problems

Always telling the truth about money is something to aspire to, but it may be unrealistic marriage advice. A couple of weeks ago, I mentioned in a blog post that it is absolutely essential that couples are 100% transparent about their money, or else the relationship probably won’t survive. How silly I am.

Spousonomics shows that this just isn’t true! The book, by Paula Szuchman and Jenny Anderson, offers a hilarious and valid twist to standard marriage advice by showing how economics—yes, economics—is the key to a happy marriage. What it also showed me is that married people aren’t 100% honest with each other, especially not about money.

In what the call their Exhaustive, Groundbreaking and Very Expensive Marriage Survey, Szuchman and Anderson discovered that based on economics, there are actually incentives for spouses to lie to one other. One such principle is Asymmetrical Information. This means that if you’re totally honest about a topic you might be penalized, so consequently, you withhold information when communicating. For example, you might fudge on the amount of time it takes you to complete a task you were asked to perform by your spouse because you want to build in enough time to goof off before you actually do it. So you lie about it instead of being nagged by your spouse or assigned additional tasks. By withholding information, you get what you want from the spousal transaction.

The Power of Tracking Your Numbers: Step #3

This is the 3rd in a series on creating a financially healthy life. If you jumped in and did the first two steps, Just Do It and Reality, Get a Dose, this one might be the one you might need extra support in accomplishing. Lots of us like to do projects. We like to plan. The first two steps were projects.

This 3rd step requires consistency. Yes, consistency. This is where many of us jump off the financial band wagon.

I liken it to the health band wagon. Most people can stick to a diet for awhile. It might be challenging, you may not like it, but if we knew that we only had to change our eating habits for 3 months to impact our physical health for the rest of our lives, would we do it? Most of us would.

The Anti-Gift Holiday

Switching focus from gift giving to others to giving to yourself, is the best way to feel some relaxation and peace during the holiday season. You may think others might feel neglected, when in fact, they will feel more peace and happiness as well.

For the past several years, my family and I have not engaged in the wrapped-and-bowed gift giving tradition. of the year-end holiday season. We started this because none of us could think of a gift we truly wanted; then we’d each be scrambling to think of something, anything, since not giving a box with a bow was unacceptable. We all got tired of this dynamic, and since my sister and I no longer lived with my parents, it became harder and harder to tease out other each other the things we wanted as the holiday season drew near. One year, we said, forget it, let's enjoy the other elements of the holiday season--this way, the pressure is off, and we can relax and enjoy the season without killing ourselves with gift giving.

Shame and Money Secrets

Money secrets are some of the most shame-filled secrets we keep. We’ve all heard that “the truth will set you free,” however, I believe that there are two kinds of money secrets we keep: the ones we keep because it’s inconvenient to tell the truth and the ones we keep because we don’t want to hurt ourselves.

Sometimes we keep a money secret because we don’t want to deal with the questions and issues that will be raised if we reveal our secret. Or we think it’s none of their business what goes on in our personal financial situation. I happen to think it’s completely okay to keep quiet about some things. For example, my parents know quite a bit about my financial situation, but they don’t know everything. I imagine they think they know more than they actually do, and I am okay with that. They know that some times have been rough, but maybe not how rough . . . and they know when times have been good, but maybe not every single stupid money decision I have ever made.

Notice too I am making a distinction between active lying andnon-disclosure; I don’t believe I actively lie about anything, but I certainly don’t feel like everyone needs the complete “E True Hollywood Story” train wreck version whenever something difficult occurs.

With your loved ones and life partners: I think you need to be absolutely transparent with your money. People think that money is the #1 reason why marriages break up, but I think that statistic is sort of like saying that the reason a marriage broke up was because of cheating: cheating may have caused the final break, but there were a million missed intimacies, communications and decisions made that led up to the cheating. Same for money; money in and of itself is never the reason a marriage ends, it’s everything around it. Money is a symptom. Transparency ensures that at least communication about money will not be the marriage’s downfall.