 It’s Only Moneyby Laura Hess Filthy rich! Money is dirty. Money is the root of all evil. Money doesn’t grow on trees. How many times have you heard these phrases? How many others have you heard? What lessons are you carrying around in your own baggage that you took on sometime in your childhood? The subject of money has been coming up with my clients a lot over the past few months. It’s not a coincidence — nothing ever is. I know if my clients are struggling with money issues, so are many others. I took it as a sign that money was to be my topic for this month. (It was over three years ago I began writing and contributing regularly to In Light Times and the topic of my first article was also about money. We’ve come full circle.) Too often, when we talk about money, we hold onto either outdated beliefs or to the beliefs of people from our past. These could be one and the same. Unfortunately, when we get into this mode of thinking and acting, we can also find ourselves in a money rut — one we see no way out of. It’s also true there is always another way. It wasn’t so many years ago I’d created a life for myself where money was scarce. I quit a good paying job to become self-employed. I had no prospects for clients who would pay me for my services. My self-worth was directly tied to the amount of money I had in the bank (zero) and I was at a personal, all-time emotional low. I was living a life of lack and truly believed this was my lot in life. All of this based on beliefs I’d taken on earlier in my life. Now, years later, I am much wiser when it comes to finances. (It didn’t matter that I’d been a CPA. I was still not money-smart.) I was willing to take a hard look at what was true for me and that’s what made it possible for me to turn my financial life around. The path to financial balance, then freedom, is one everybody can be on. I share a few of the tools and lessons I learned in my "dark times" so you can put yourself solidly on the path from the beginning. Bear in mind, this path, like all the others I write about, is a process and you will not change overnight what took you a lifetime to create. Patience…you can do this. Begin by making an honest assessment of where you are with your money. What do you have in the bank? How much do you earn? How much do you spend? How much do you owe? Seldom is your financial picture as bad as you think it is. Most often, we avoid doing this exercise out of fear about what’s there. Like so many of our fears, they turn out to be unfounded. More than that, though, if you don’t know the truth and are not willing to look at the clear picture, then you will never change your situation. In your spending assessment, look at what you are spending your money on. You probably spend on things you could cut back on — magazines, cable TV, eating out. Where can you change your habits and begin having a reserve of cash for other things? I have a colleague who requests his clients cut their spending by 50%. Pretty dramatic AND it does get the client’s attention. If you really want to be financially secure and independent, you have to be willing to make some radical shifts. This is just one. Do you have a savings account with a balance of more the $100? Do you pay yourself first before you write the rest of your bills? Americans are known to be the worst savers in the world. You don’t have to be like everyone else. Make a commitment to save 10% of everything you bring in. No exceptions. Even if you have a check for $100, take $10 of it and put it into savings. It’s amazing how quickly your bank balance will climb. The goal, eventually, is to save 50% of all you earn. Of course, stop using credit cards. They are a trap and an easy one to fall into. An even bigger step is to stop writing checks and use only cash in your spending. (The exceptions are when you send a payment through the mail or if you need a paper trail for business.) Decide how much you are going to spend on groceries and take just that much to the store. You will stick to your list! Have a weekly budget for yourself of how much you are going to spend and make ONE withdrawal a week for that amount. You will make different buying decisions and will probably even have some left over at the end of the week. No cheating. No returning to the ATM when funds run low…plan. There is so much more to being on the path. Still, you have to start someplace and this is the start. If you really want financial independence and you want a healthy relationship with money, use these four steps as your beginning. I may not yet be financially independent. I am well on the path and am able to sleep at night knowing bills are paid, I won’t starve and I have investments where my money is working for me all the time. Once past the fears, the rest was easier. Take the step. I know if I can do it, so can you. (I co-authored a book on financial independence. If interested in “Financial Independence: A Step-By-Step Guide for Designing the Financial Future You Want,” you can call my office. It is available for $24.95 plus tax and shipping.) ¤ ¤ You can contact Laura Hess at laura@sparckint.com |
