I don't know of anyone who doesn't have a money problem right now, in this economy. Even the wealthiest of the wealthy are fretting because the fortunes they stashed in bonds and stocks aren't performing with the same gust of the 90s, and, even if you have 5 billion dollars, seeing that figure change by a half of a billion produces anxiety and pacing. I wouldn't know. But I'm guessing.
So it was with interest I read financial advisor Karen Lee's book, It's Just Money, So Why Does It Cause So Many Problems?. Lee has worked in the financial services industry since 1987. During that time, she has worked with hundreds of families, individuals, and small businesses to help them work towards their financial goals. And to boot, she's a regular guest expert on CNN.
Here are six tips she offers in her book to "transform your money life."
1. Write a money autobiography.
I think mine would say, "I was poor. And then I wasn't. And now I am again. The end." But she wants a few more details. She suggests looking at your earliest childhood recollections about money, and the tapes that might replay in our heads from that time. Ask yourselves questions such as: What has happened throughout our working lives that contribute to our money problems and financial philosophies that we hold today? By probing a little, we can arrive at an awareness of our relationship with money. Yes, that's right. It's a relationship that we need to acknowledge.
2. Admit that a problem exists.
Lee isn't saying that you need to join a support group just yet. But you need to step out of denial and admit there is a problem that needs attending to. Even better than recognizing a problem, is knowing why the problem exists. Whatever you do, don't lay on a guilt trip to yourself. Remind yourself that money problems happen. They just happen. To everyone. And maybe you didn't have many great role models to show you how to manage money. Like anything, if you aren't provided the right training, you can't know how to perform a task.
3. Tell it all to someone you trust.
Here is where you might compare it to an addiction or changing a bad habit. By admitting the problem to a trusted friend, you are becoming accountable to someone, and that accountability will reinforce your desire to change the way you manage (or don't manage) money. Moreover, it is easy to lie to yourself and rationalize all you want. Not so easy with a friend or relative whom you trust. Chances are he or she will see beyond the bull and call you on it. That's good. That's what you want.
4. Make a plan and get into action.
Here's where you hit the pavement and roll up your sleeves. Writes Lee: "Remember, this will not be easy, and it will not happen overnight. You will have setbacks. Remember that a healthy relationship to money is analogous to diet and exercise. The crash diet never works, but the lifestyle changes that are forever do work. When you cheat on a diet, it's not wise to throw in the towel and give up. Try to get back on your plan the next day. Changing money habits will be a similar journey. Two steps forward, one step back. DON'T GIVE UP.
5. Believe in yourself.
For people prone to anxiety and depression, this might require a major adjustment in the way you think. Two things I do when I have to pretend like I am a super-confident person that can tackle any problem: I imagine I am a person in real life that I know who exudes confidence and self-assurance. I try to step into her skin, and see the world from her eyes. It's a bit like Avatar. Step into someone else's perspective for a minute. Would she see anything stopping her from doing this? No? Then why should you?
6. Visualize prosperity.
I have to be honest. I always get a tad annoyed when people say this. Like the book, The Secret. Visual dollar bills and your wallet will suddenly burst at the seams. But I know a woman who practices this religiously, and I swear it works. These checks are mailed to her out of the blue. A tax return for like twice the amount that she paid! A relative's estate willed to her, even though she has never met him. Weird, eerie stuff. I do think imagining a state of freedom not only relaxes your muscles but gives you a vision that you can try to work toward gradually. Imagining a state of mind without money problems makes you want to get there all the more.
What's your money life-like right now?
Are you struggling financially? What steps are you taking to get back on track in your money life?
Photo courtesy of transitionculture.org
Originally published on Psych Central.
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Of course I don't drive a new Mercedes and we stay at a moderate hotel at Disney World and only eat out a couple of times a month. Very little stress and I think we are happy. Like I said, nice to meet you.
http://www.huffingtonpost.com/2010/03/17/social-immobility-climbin_n_501788.html
1. You know how much you make every month - right?
2. Don't spend more than you earn. Give yourself a WEEKLY budget and stick to it.
3. Save at least 10% of every paycheck. Transfer that money IMMEDIATELY to SAVINGS once you are paid.
4. Don't use credit cards except when you travel.
5. Pay the balance on your credit card EVERY month.
6. Pay bills AS SOON AS YOU GET THEM. This gets the MUST PAY expenses out of the way early in the month. If you can adjust your billing dates so that ALL BILLS ARE PAID by the 15th of the month.
7. Don't buy anything that costs over $25 on impulse.
8. If you need something EXPENSIVE research it and wait for a sale if possible.
9. Think of YOUR MONEY as YOUR BLOOD and don't let it flow out needlessly or in great quantities.
10. Be cheap. Bargain - even in retail stores. You should be able to get at least 10% knocked off the price of any retail merchandise if you are savvy and smooth.
If you want something SAVE for it. And nowadays a mattress has become the new savings account. Who knew.
My suggestion for people who need financial advise is that they bebop on down to the public library, randomly pull 10 to 15 books off the personal finance shelf and give them a good perusal. You'll learn a lot, not the least of which that most financial advise folks are just recycling the same ideas their predecessors did many decades ago. But you'll also find dome really useful gems as well. One of the best I found was to save money by riding a bike or public transportation and use what you would have spent to pay off debts or save for other goals.