All posts by SeattleMoneyCoach

What’s a Money Coach & Should I Have One?

March 25, 2016Practical Money PathSeattleMoneyCoach

By Candace Brinkley-Badgett, published by Credit.com

I was thrilled to be interviewed by credit .com on what money coaching is- and when it makes sense for people and when it doesn’t. As this article states, getting down to the emotions that surround money is one thing that differentiates this coaching from other forms of financial guidance. The author really captured what this coaching can cover and how to find a good fit. The only thing I would change is that it says that I work primarily with professional women in Seattle—and I actually have amazing clients all over the world. Enjoy this and please pass it on if you know someone who may benefit from money coaching.

When Joni McClain and Tammy Lorraine got engaged in January 2015, money, wedding costs and potential debt, were not things they were thinking about, much less the services of a money coach. They were in love and, like most couples, that took up a huge chunk of their time and brains. The giddy pair, from Austin, Texas, decided on a wedding date about 18 months away so they’d have plenty of time to plan.

But then things happened and money – not just the costs of getting married – became top of mind.

“The possibility of debt, became a real factor when Joni was laid off in July of 2015 and was out of the workforce until January of 2016,” Lorraine said.

“All my spare income that was coming in as a photographer now had to be directed toward living expenses, so it was a wash,” McClain said. “Then Sam [the couple’s dog] got very veterinary-emergency-hospital-sick-in-the-middle-of the-night sick. Making sure he was going to be all right cost us half of what we’d saved for the wedding.”

While the couple has been fortunate to have friends and family contribute their time, talent, money and even the venue for their wedding and reception (thus avoiding a lot more debt than they thought they’d have to take on for the wedding) they realized they might need to look at present and possibly future money stresses. They wanted to get their marriage off on the right financial footing and eventually decided to hire a money coach.

They chose a friend from their church whom they describe as strong and powerful. (Their money coach was unavailable to be interviewed for this article).

“For us, it’s more than just experience or knowledge that a coach will provide,” Lorraine said. “There’s got to be a personal, intuitive, and for us, spiritual element our coach had to have. It’s important to us to work with someone who shares our belief system about what money is and what it represents to us, and our coach is a great match for that.”

The couple’s approach to choosing their coach sounds like it was just right, according to Karen McCall, a financial recovery counselor and founder of the Financial Recovery Institute, which specializes in training money coaches.

“Hooray!” McCall said. “What they’re looking for is somebody who’s speaking to them in terms of their values and can tune in to them with the numbers but also more on that emotional, spiritual basis. If they both feel they’ve found someone that is going to be able to listen to both of them and work in that way, they’ve done themselves a good service.”

It turns out, getting down to those emotions that surround money for a lot of people is what really differentiates money coaching from other forms of financial guidance.

Is a Money Coach Right For You?

Money coaches aren’t for everyone. For example, they’re not necessarily a good choice for people having money issues because of one-off financial occurrences, according to Mikelann Valterra, a money coach in Seattle, Wash. So, if you got into debt because of medical bills or other extenuating circumstances, you may just need a lawyer, accountant or other financial professional to help you resolve the situation, she said.

“I think the perception that’s hopefully changing is that people do what they do around money solely because of lack of skills,” Valterra said. “But if that were true, everyone would go out and read a book on how to handle money better and then no one would have any issues around money. The reality is, money is a very, very emotional topic because it hits on survival issues and self-esteem issues – people are so afraid that if they really look at their money situation they’re going to have to make huge changes in their life.”

So how can the average person tell if they need a money coach?

“The issue isn’t debt, because people get out of debt all the bloody time. Money coaching looks at patterns,” Valterra said. “So, if you have refinanced your house three times, there’s a pattern going on. If you have paid off your credit card debt, but three years later you’ve racked it back up, a money coach would be perfect. If you just got a raise, but you still have nothing in savings, if you’re tired of being stressed around money, tired of feeling guilty about spending…feeling out of control, a money coach is perfect.”

Valterra, who works primarily with executive women around the Seattle area, said coaching addresses more than just money management.

“I deal with both the earning side and the spending side of the equation,” Valterra said. “Are people underselling themselves and are they making enough money and that’s very complex. Part of it’s skills, part of it’s emotional mindset and what we feel like we deserve to have and why we undersell ourselves.”

Amanda Clayman, a financial therapist based in New York City, suggested other good times to consider a money coach are situations where you have goals around money that you haven’t been able to achieve, changes that you haven’t been able to maintain, or you just feel stuck and unhappy.

“One of the benefits that a coach can provide is they give you some feedback about appropriate goal setting,” she said.

Finding the Right Money Coach

It’s important to speak with a few coaches to make sure you feel a connection, Clayman said. “You want to be thinking ‘How engaged do I feel with this person, and do I feel like this person really understands me?…or do I feel like this person is just trying to sell me a package or results, but I don’t really feel heard in this exchange.’”

When beginning your search for a money coach, Clayman advised:

Know what your goals and objectives are
Know the kind of working relationship you want (e.g., are group sessions OK or would you prefer one-on-one sessions?)

It’s also good to keep in mind that money coaches are not regulated. They’re not required to have any kind of specific education or licensure, so do your homework and watch for red flags. You want to make sure you find a reputable person to help you. While money coaches aren’t regulated, there are many groups throughout the country that train money coaches and issue certifications.

“Anyone can call themselves a coach,” Clayman said. “So you might want to ask a coach about their training, look at their testimonials or ask if there are other people they’ve worked with that you could talk to about their work.”

Basically, if you find anything unsettling about a money coach, that’s a strong indicator you should look elsewhere, Clayman said.

“Anything that sounds too good to be true probably is,” Valterra said.

Also watch out for coaches for whom you can’t find any referrals, she said, and take a close look at their qualifications.

“Education and training is important, and if they’ve helped people get the results they wanted, that’s huge,” she said. “I’d recommend people look for someone who has done training as a money coach or training as a financial counselor.”

And, as Clayman said, finding a coach who feels like a good fit is key.

“It’s such personal, intimate work, so you want someone who you really like and trust, who you really like the way they communicate,” Valterra said. “It’s pretty all-encompassing, looking at long-term, deep change in terms of thinking and behaviors and feelings around money.”

How Much Should I Pay?

Costs for a money coach vary from region to region and from coach to coach based upon their expertise, level of education and experience, but the typical range is from $50-$250 per hour, which could be too much for some people looking for help with their money habits.

“A common question is ‘I have money problems, how can I afford a money coach?’” Valterra said. “And one answer is that people tend to save more money very quickly in working with a money coach than they’re actually spending on the money coach. Even though that is often true, I’ve still had many cases where I’ve referred someone that my services would be too expensive and might harm them, either to a new coach who’s charging less or sometimes their situation is just not appropriate for a money coach, they just need a quick fix.”

There’s also the option of working with a money coach who lives in another region and may charge less — if you’re comfortable with email, video chats and other electronic means of communicating.

Finding a student money coach who is working on their certification is also an option.

“A very cool thing that very few people know about is that new money coaches do have to work with what we call practice or supervised clients for a reduced fee,” Valterra said. “That’s definitely a win-win for everyone.”

According to McCall, coaches in training can cost between $25 and $50 per hour. She personally supervises the coaching being done by trainees under her guidance. Before she lets students interact with clients for the first time, McCall ensures they are really well grounded in the process, that they are empathetic and understanding, and that she feels clients will be comfortable with them.

How Long Should You Work With a Money Coach?

How long you might need to work with a money coach depends on your specific situation and needs, but Valterra, for example, has clients she’s worked with for many years.

A relationship that can start off with regular sessions can, of course, end once a client achieves his or her goals. Or it can become a lasting relationship that turns into to quarterly or even annual “tune-ups.”

“I keep my clients for years and years and years,” Valterra said. “I’m like the family doctor; they just don’t see me as often as they used to.”

For McClain and Lorraine, the answer to how long they would work with their coach was simple. Kind of.

“Until I can resist buying new patio furniture for our new house?” McClain said, sheepishly.

“Until I embody the principles my coach embodies as well, or I’m out of debt,” Lorraine said

“Yeah, that,” McClain agreed.

Mikelann is a money coach with over 20 years’ experience, helping women escape the money fog, feel more in control of their finances and love their financial life. If you are ready to leave money stress behind and design a life you love, please see www.seattlemoneycoach.com and read about this life changing work. Once there, grab her free eBook on how to stop worrying about money.

Money & Creativity 5 Minute Video

February 16, 2016Emotional Money PathSeattleMoneyCoach

I recorded this five minute video on how we can all design our lives to step more fully into creativity. When we get clear about money, options open and the way forward becomes clear. We are meant to live creative lives. And embracing creativity often means getting creative with money as well. When you are clear about your finances, all things are possible. So here’s to more inspiration and passion! Enjoy these thoughts and the stories of people who designed their creative lives.

Is Money the Key to a Creative Life?

February 2, 2016Emotional Money PathSeattleMoneyCoach

Recently I read Big Magic by Elizabeth Gilbert, author of Eat Pray Love. I gobbled it up like candy. It’s on how to live a creative life- whatever that looks like for YOU—and how to invite in inspiration. And she does not leave money out of the conversation. Personally, I’ve always been frustrated with the “Do what you love and the money will follow” and the “Follow your bliss” school of thought. I think Gilbert would agree. So while her book is not about money, I loved some of her thoughts on it that she wove in. I wrote an op/ed piece on the subject for credit.com. Enjoy! (Some of the links in the article link to credit.com, since they originally published my article.)

Is Money the Key to a Creative Life?

Should our passions pay us? If we focus on what we love, should we be able to earn a living from it?

I believe in living a creative life – in whatever way that applies to you. It could be finding time to paint or write, designing a career that feeds your soul, or putting together a non-traditional lifestyle that provides abundant time for your family and your personal life.

And yet so often, money is left out of the conversation. But ignoring your finances invites a life of imbalance. In reality, the more you take care of money, the easier it is to be creative and create life on your terms.

Follow Your Bliss … Ignore Your Finances?

Around the time I graduated from high school (the late 1980s) a very famous book called Do What You Love and the Money Will Follow by Marsha Sinetar was published. The title seemed so descriptive, it never really occurred to me to actually read it. I was already in love with the idea of doing what I loved and, like so many others, believed money would magically appear as a result. It also seemed to fit with my growing (and somewhat misguided) knowledge of metaphysics: focus on what you want, and you will attract it. How could money not be part of the bargain?

When combined with the perennially popular theme of “follow your bliss” (popularized by the work of American mythologist Joseph Campbell), it is no wonder so many people growing up in that time period divorced money from the creative life conversation.

Here is the dilemma: These notions often translated as “Don’t worry about money.”

We may start to believe if we focus on what brings us joy, money will magically take care of itself. We may even want to ignore the money conversation. In fact, many believe that talking about money actually “taints” the creative process.

We may start to believe if we focus on what brings us joy, money will magically take care of itself.

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An Alternate Point of View

Unfortunately, falling prey to the “just follow your bliss” mentality may put you in a very stressful financial situation that actually shuts down our creativity.

Recently, I read Elizabeth Gilbert’s book Big Magic. (Gilbert also wrote Eat, Pray, Love.) At its core, Big Magic is about how to live a creative life. We are all creative beings, but so many of us are blocked and we find it difficult to access our creativity. Gilbert is attempting to show us how to find it and use it to live deeper, fuller lives. One of her points is that when we blindly expect our creativity to pay the bills, our inspiration literally dries up.

As Gilbert writes, people have been sold the idea that they should be able to support themselves if they are following their true passion, but she points out that many artists do not make a lot of money and their financial lives can be extremely stressful. What if they did not force their creativity to pay them? She maintains they would be happier and their inspiration would not feel so squeezed. Per Big Magic:

“I’ve always felt like this is so cruel to your work — to demand a regular paycheck from it, as if creativity were a government job, or a trust fund. Look, if you can manage to live comfortable off your inspiration forever, that’s fantastic. That’s everyone’s dream, right? But don’t let that dream turn into a nightmare. Financial demands can put so much pressure on the delicacies and vagaries of inspiration. You must be smart about providing for yourself. To claim that you are too creative to think about financial questions is to infantilize yourself — and I beg you not to infantilize yourself, because it’s demeaning to your soul.”

In other words, it is simply not fair to our inspiration to put that kind of pressure on it. In Big Magic, Gilbert suggests most “artists” shouldn’t “quit their day jobs,” not because they are not amazingly good at their art, but because making it responsible for paying for your life puts a huge burden on your creative pursuits. (She herself always kept her jobs through the publication of numerous books.)

Making Your Creativity Work for You

Don’t get me wrong: I think you should follow your passions. But, as a certified money coach, I recognize that when we believe our passions should pay enough money to live the life we long to live, we can enter into dangerous territory. The key is to combine our creativity and passion with creative money-thinking.

Strategizing goes well beyond “work by day and create by night.” Instead, you may want to have a creative conversation with yourself about your finances.

Get creative. Get conscious. What kind of life do you want to live? When you are open and at peace with talking about money, it can actually support you in many ways. There are all sorts of possibilities you can explore to have your bliss and a sufficient paycheck, too. Here are a few examples from my own experience as a money coach:

One woman rented out her large house to a family and then rented herself a smaller apartment. She saved so much money that she was able to work part time and had enough time to pursue her writing career.
One couple downsized their expenses to the point where they could take turns supporting the household while the other pursued various interests.
One single father asked for a large raise — and got it. With the extra money, he hired a housekeeper and other people to help with all his “chores.” With his extra time, he pursed a new career direction, eventually going to ministerial school in the evenings.

There is a dance here: Earning what you are truly worth (don’t undersell yourself) combined with keeping your expenses low, often will create enough space in your life for exploring your own dreams and interests.

When we stop blindly demanding that our creativity financially support us, we can take the conversation deeper. Yes, live a creative life. And yes, get creative with money to make it happen. When you create a life that supports you financially, you can engage in the dance of creativity – and inspiration feels free to visit you often.

When you create a life that supports you financially, you can engage in the dance of creativity.

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Want more help transforming your relationship to money? Check out all the eBooks, audios, and more robust products Mikelann has created. Are you ready to break free of the “money fog” and step into earning what you are worth? Are you are ready to get in touch with your emotions so you never feel out of control around money again? Are you ready to love your financial life? Let Mikelann help you get there. Free items are at the top of the page.

How to create a life you love with a vision board

January 13, 2016Emotional Money PathSeattleMoneyCoach

Back in the fall, while on a trip with a girlfriend, I was leafing through a magazine and came across an odd advertisement which said, “Who are you when the pattern changes?”

It captivated me.

You see, I’ve had a lot of change this year. I ended a romantic relationship, my career continued to evolve, and my teenage son insisted on being “older and wiser.” These changes shook up my life. Change – who am I when the familiar patterns change?

In light of the New Year and contemplating this question…I decided to open up to possibility in a new way. I have always done an annual plan, but this year I resolved to try a vision board exercise before sitting down with my plan. In case you aren’t familiar with the concept, a vision board is a collage you create with pictures and words you compile to bring a vision to life. It can be a very powerful exercise.

A vision board can center around something specific (like the dream of buying a new house or creating a successful business) or you can simply sit down and see where the exercise takes you. Not attached to a particular theme (I was feeling more open and “curious” about the future), I decided to create a board by meditating on this question: “What do I want more of in my life?”

So, after I determined a time and space where I knew I would be uninterrupted, I bought a large poster board, rubber cement, and about 15 used magazines. Tip: choose a wide variety of magazines when you start this process (mine included Oprah, food and travel magazines, and business magazines) to give your mind an opportunity to diversify your thoughts.

It’s very important to clear your mind and get centered before beginning on vision work. So, before I began to tear out pictures, I got very quiet, lit a candle, and went deep into meditation. I asked myself many questions: Who do I want to be? What do I want to do? What do I want to have? What is it time to let go of?

I meditated a long time on the path before me. What sights, sounds, colors, feelings, and experiences do I want? Or think I want?

Of all the questions I meditated on, “What do I want more of in my life?” kept coming to the surface. It is not a material question (though I suppose it can be that too). Instead I considered what feelings and experiences I want more of.

I cut and cut for days. (This may seem crazy, but I was on a mini vacation and nothing makes me happier than scissors and glue.) I did not judge any image. If it called to me, I cut it out and added it to the pile.

Throughout the process, I took breaks to meditate and cull through the seemingly random pile of pictures and words that had appealed to me in the moment.

Eventually, satisfied with my pile, I thoughtfully glued them to my poster board in a way I liked. At the center is the magazine phrase that started it all, “Who am I when the pattern changes?”

I truly love what I created. Sure, to you it may look like a bunch of magazine pictures glued to a board. But I find inspiration every morning because I look at it as I do my journaling and meditating.

It’s About Visualization

Vision boards work because they are a potent form of visualization. Every day you are visualizing what you want to call forth into your life. Some call this the “Law of Attraction” and others are inspired by the Olympic athletes who use this technique to successfully improve their craft. Whatever you call it, visualization is powerful. So, when you get tired of “goal setting,” try cutting out pictures instead. It truly does work in a way that almost feels magic.

Every day you are visualizing what you want to call forth into your life.

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The key is, a vision board should focus on how you want to feel.

Here’s a four min video of me talking about how to create a vision board.

Remember- what you focus on expands.

My board has pictures of travel; not because I will necessarily go see the pyramids of Egypt, but I love the feeling of adventure. There are paints and crayons on it because I want more creativity in my life. I love the feeling these pictures evoke in me.

Standing back, I found myself truly happy with what I had created. While not necessarily art, it is inspiring. Without a doubt, l love how it makes me feel. And when I look at it, I want to bring it to life.

What you focus on expands.

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The Annual Plan

After staring at my vision board for three weeks, I sat down in front of it to create my annual income and spending plan. I kept thinking, “How do I bring these feelings into my life?”

I found myself making new categories, like one for creativity classes. And I increased what I wanted to spend on travel, while balancing this with my retirement funding. I added more yoga classes because they had a significant presence on my vision board as well.

The year is young and my vision board is new. Determined to keep the momentum, I am buying a frame so I can hang my vision board in my bedroom and look at it daily. These visions are so engrained in my life and my plan now – in a way they never would have been if I hadn’t created the board. I have no doubt I will continue to find ways to bring it to life.

And you? How do you want to feel this year? Maybe you don’t know yet…

Whatever you want, I think a vision board can help you get there. Invite the magic of imagery and words into your consciousness. It’s not about setting goals, but creating a vision of how you want to feel.

Tip: find a picture of yourself and embed it somewhere in your collage. This is about you, after all, and the vision you have for yourself.

So, is it time to create your own vision board for 2016?

3 Ways to Increase Your Earning Potential Post-Divorce

December 10, 2015Underearning 101SeattleMoneyCoach

Most of us don’t think about our earning power when we marry. Our lives are full of many to-dos beyond career— from maintaining a home (and relationship) to caring for our children.

But, when divorce happens, we are often awash in fear and confusion, since this life event can mark the first time in a potentially long while that we will have to manage our personal finances (and pay our bills) on our own.

Often, we do not have the financial resources to maintain the lifestyle we potentially took for granted during our married years. Earning issues eventually come up when you no longer have a partner who can contribute to the monthly expenses.

Said another way, you can’t afford to be an “underearner” in your new life. Underearning is sometimes defined as the pattern of earning less than you need or below your true earning potential. This pattern often gets masked while married since you may not have been the sole bread winner or, perhaps, you even stayed home to maintain your household.

Are You an Underearner?

Under-earning can be particularly problematic for women, as research shows they still earn only 82 cents for every dollar a man earns. This wage gap is truly a silent epidemic — countless amazing women earn far below their potential, whether they are married or single. Even more frustrating, this epidemic knows no professional boundaries; it affects consultants, doctors, therapists and entrepreneurs.

Sometimes women in lucrative professions don’t see themselves as underearners because they know others don’t view them that way. But just because you “should” be making a lot of money doesn’t mean you do. Here’s a quick quiz to find out if you may be an underearner.

Do you earn at the low end of the scale for your industry?
Have you decided not to ask for a raise or not to raise your fees for more than two years?
Are you unsure of exactly how much money you need to earn?
Are you dealing with deprivation — no decent vacations, no money for home/auto repairs or extra cash to treat yourself?
Are you experiencing a pattern of feeling overworked and underpaid?
Do you know in your gut you could make more?

If you find yourself answering yes to these questions, then, chances are, you should — and could — be making more money. With this in mind, here are three items to think about as you focus on increasing your earnings.

1. Determine How Much Money You Need

Take the time to think carefully about how much you actually need to earn. I’ve helped many women craft a spending and income plan for their new life that addresses new expenses. Often I have women track their spending for a while before creating this plan, so we can see where their money is actually going. We also look at any potential new forms of income, such as child support and spousal maintenance, in determining what needs to be earned.

You may want to consider tracking your spending to get a deeper sense of what you actually need. This information can help you make many decisions about your finances from what type of job you are looking for to deciding if you will keep the house, and how to address certain expenses. You don’t want too much financial pressure as you rebuild your new life.

2. Research What Constitutes a Competitive Salary in Your Field

When thinking about applying for work, asking for raises or getting contract jobs, you may want to research what you can command. Don’t trust your gut; women may de-value their work and often don’t ask for enough money. Divorced women may be even more prone to doing so, since they may have taken a break from the workforce during marriage.

Let the market guide you. Trust me: An employer is extremely lucky to have you. It’s in your best interest to make sure you do your research about what a good one will pay. Some websites can help you gauge what competitive salaries in your field are and you can also talk to knowledgeable friends about what they think you should ask for before formally accepting an offer. You are likely worth more than you feel.

3. Don’t Worry About Being Behind

You may want to stop worrying about being “behind.” In my role as a money coach, l’ve talked with many clients over the years that lament making less than their male counterparts. While this may be the case, you don’t have to let under-earning in the past hold your future salaries back. Keep in mind, many women hit their career strides later than men — and that isn’t necessarily a bad thing. Women in all phases of life can be extremely powerful. We are like a mighty phoenix rising from ashes and are capable of commanding a lot of money and respect.

I’ve seen many women, post-divorce, create amazing lives for themselves and their families. If you value yourself and what you do, know what you need to earn and research what you can command, you can make enough money to alleviate financial stress. More than that, you can create an amazing life that you love. Your new life is waiting.

Ready to earn more and step into greater freedom? Click here to be notified of the next time Mikelann offers her 8 week Unlock Your Earning Power course.

How to Avoid the Post-Holiday Hangover

December 3, 2015Practical Money PathSeattleMoneyCoach

Greetings!

Now that you’ve survived Black Friday and likely taken advantage of Cyber Monday, it would be great to sit down with a cup of tea and think through what you have left to buy. My article below should help you remain sane with your gift buying and avoid the post-holiday spending hangover. Read this and enjoy December a bit more. (And remember– it’s not up to you to find the exactly perfect gift that will fulfill the deepest heart’s desire of your recipient. A gift is just an expression of your fondness for the recipient. Really.) I have more deep thoughts/ ideas on my Pinterest board- or find me on Facebook.

How to Avoid the Post-Holiday Hangover

Don’t worry – I am not here to ration what you eat and drink over the holidays. I am talking about a spending hangover. You know what I mean – come January, when all the gifts are opened, the parties are over…and the Visa, MasterCard, Best Buy, and Nordstrom bills begin to arrive.

Sadly, it takes the average American who uses credit cards to finance Christmas six to seven months to pay off the holidays. Who wants to be basking in the summer sunshine while still paying for the gifts you gave your kids, family and friends the year before?

If you want to avoid that January spending hangover, consider this: at the root of post-holiday debt is lack of planning.

A plan lets you know when you’ve completed your shopping. It tells you when to stop — if you don’t have a finish line, you are going to keep shopping as long as the stores are open. (Or until the “guaranteed delivery dates” from online shopping move to December 26.) Knowing what you have already ordered and have left to buy — and how much more you want to spend– will save you a ton of money. You will finish your shopping earlier and you will have fewer impulse buys.

I know that creating plans like this aren’t as fun for everyone else as they are for me. But, I promise you this one is pretty simple to do, and well worth the 15 minutes it will take you. (15 minutes today instead of seven months of regret…I’ll take it.)

TIP: Create your plan in whatever form will be easiest for you to bring with you when you go shopping or sit at the computer. If you are a pen and paper person, use that. Keep everything on your phone? Make it digital. The best plan does you no good if you don’t bring it with you.

Creating Your Plan (Even if you are almost done shopping!)

People —Think of everyone you are planning on giving a gift to, and list them in a column. Don’t put down gift ideas yet. Only brainstorm people, and make sure you get everyone. One of the biggest pitfalls is gifting a lot more people than we originally intended. Consider creating three sections: family, friends, and service providers (babysitter, hair stylist, etc.)
Gifts — Now that you know who is on your list, write down gift ideas if you have not bought them something yet. And also write down the gifts you’ve already bought/ ordered.
Money— Last, enter amounts of money in the final column. Do the best you can – a guess is better than nothing. If you have already purchased the gift, put down what you think you spent. Let me be clear- if the money has already left your account for ordered gifts, or gifts purchased long ago, list these amounts. Then list the amounts of money for gifts you have not purchased yet. Circle these unpurchased gift numbers.
Totaling Up and Adjusting — Now add your total gifts and think about this total. If it includes gifts already purchased (back in August?) you may be surprised at the actual total. And then total up the remaining gifts to be bought- the numbers you circled. How do you feel about the amount? Does this seem reasonable? Really think about it. Can you afford this? Is it worth going into credit card debt to be able to give a gift to everyone you know? What are your other options? If your total plan seems too high, go back and make some adjustments and then re-total. Keep doing this until you feel better about the total.
Tracking — As you spend money on the remaining gifts, jot down the amounts on your plan. Add up what you’ve spent on a weekly basis, or more if need be. Where are you? Remember, part of creating a plan is seeing what will happen before it happens! If you don’t like what you see, take the time to work on your list.

The good news is, trying to stick to a plan (regardless of how successful you are with it) will cut down on impulse buying, which is a major problem during the holidays. Without a plan, people buy more things and spend more money on each item they purchase. The temptations can be overwhelming when you are out shopping.

If you have gone through your plan and don’t know how to make this work, consider getting more creative. What if you changed your holiday gift-giving ritual? I used to give gifts to friends, but now we all go out and enjoy a play together. This came out of doing my own first holiday spending plan. I felt a little guilty when I approached them with my idea, but discovered they were all relieved.

Wrapping It Up

We all know that the holidays can feel very emotional. If you would like more tips to avoid those “ghosts of holidays past” that could influence your spending, expectations, and behaviors in the present – and you’d like to really dive into envisioning the perfect holiday – I invite you to download Karen McCall’s free eBook, The Holiday Planner – your guide to creating a holiday season that is soulful, balanced and financially sane.

You owe it to yourself to head off that infamous spending hangover. And don’t forget the best benefit of all: a spending plan cuts down on stress! You can enjoy the holidays like they were meant to be enjoyed.

Happy holidays!

Ready to Re-Imagine Gift Giving? Propose Changes at Thanksgiving

November 19, 2015Practical Money PathSeattleMoneyCoach

A few years ago, while I was looking at my spending plan and worried about both the amount of money I needed to spend on holiday gifts, as well as the time it would take, I started to wonder. Why do we keep doing our gift exchange the same way – even when it causes us to stress out and sometimes break the bank?

I come from a large family, and we have had the same gift giving ritual for decades. Each person takes a turn opening a gift while everyone pays attention. The gift may cost only ten dollars, but everyone watches. It was a way to spend time with each other, and that was very important to my family (especially my mom).

As I thought about the ritual, I started to wonder what was most important about it. Was it that we all received a lot of gifts, or that we all spent a lot of money on each other, or was it more about spending time together as a family? I took a gamble that it was the last option, and decided to start a conversation.

I was nervous about emailing my sister and my mom – would they forgive me for poking this sacred cow? Would they understand? I knew they might need a lot of time to think about a change like this, so I brought it up in mid-November.

When I emailed about our Thanksgiving plans, I mentioned that I’d love to talk about shifting how we exchanged holiday gifts while we were all together on Thanksgiving Day. I was relieved when my sister sent me back an immediate, enthusiastic reply. My mother chimed in: “Well, if we’re going to give fewer gifts, you guys have to promise you’ll play some games on Christmas because I want to make sure we spend enough time together.”

Success!

Now, I needed to come up with some suggestions that would be fun, allow my family to still have lots of face-time, and wouldn’t break the bank. Here are some ideas I came up with that you and your family can ponder as well:

Gift limit. This is the obvious one, and many adults welcome it. What if there was a predetermined limit, so you knew you were supposed to bring one gift (not two or three) for each person?

Drawing names is an oldie but goodie. On Thanksgiving everyone puts their name in a hat and then draws a name out. It is very important to set a limit on how much everyone can spend.

Give a family gift instead of individual gifts. It depends on how many people are at your gathering, but your extended family may welcome this idea.

Decide to only do gifts for children.

Edible gifts. Decide to only gift things that are edible or drinkable and set a price limit. Adults love this one.

Play White Elephant. This is a very fun and silly game that doubles as face-time with everyone. When I was growing up, this is what we played at the extended gatherings that had 30+ people. (Yes, I come from a large Catholic family.) If you have never played, the rules are simple: everyone brings one wrapped gift with no name on it – the more ridiculous the better (re-gifted or “found” treasures are appreciated). Then you draw numbers and the game begins. This game involves a lot of shouting, running, trading, and laughing. And spilled drinks.

Dollar Store stockings. These days, I have noticed that “stocking gifts” have gotten a little out of hand. So one idea is to say that stockings can only be filled with items from the Dollar Store. (Okay, this one doesn’t fit my list perfectly, but the whole insanely-expensive-gift-in-the-stocking thing drives me crazy.)

Well, I am guessing you know how this one ends, but I will go ahead and finish my story. My family and I talked about it on Thanksgiving, and we came up with a new tradition. We have done it for a few years now, and everyone really loves it. We can all spend a little less, and enjoy the season (and each other) a little more.

The holidays don’t have to be a huge “production” or be so expensive that you are paying them off until it is time to go shopping again. This is a time to be with friends, family, and (perhaps most importantly) yourself. Now that’s real holiday magic.

BONUS: If you want to email your family right now to get the brainstorm going, but don’t know where to start, here is a sample email:

Hello loved ones!

Can we reconsider how we do holiday gifts? I know we are all busy, and the costs keep mounting. This year, I would love it if we could change things up a bit. I thought through some ideas that could save us all time and money (while maximizing our time together) and here is what I came up with [insert one to three ideas here].

What do you think? Let’s discuss at Thanksgiving.

P.S. My colleague Karen McCall wrote an amazing post on how to have a joyous and debt-free holiday. She covers not only how to do a holiday spending plan, but also helps you examine your feelings and beliefs about the season to see how they impact your behavior. Check it out: The 10-Step Plan to Have a Joyous and Debt-Free Holiday Season (financialrecovery.com)

Downtime during the holidays or after Christmas? I just put up my resources and store page.

4 Ways to Avoid Debt After Divorce

November 2, 2015Practical Money PathSeattleMoneyCoach

So you made it to the finish line. You are officially divorced and ready to start your new life. Welcome to your new chapter! If you are like many people, you may feel as if you’ve been put through the emotional wringer. It’s likely been a long haul that left you feeling raw and vulnerable. Besides your feelings about your now ex-partner and concerns over your children, you may be grappling with navigating your new financial life all by yourself.

The good news is you are sole master/mistress of this financial domain. One great reframe is that this is a chance to get a fresh start and create a healthy relationship to money — a relationship that allows you to create a new lifestyle in balance with your resources. And, no one can interfere or tell you what you can or can’t do.

So, with an eye to getting a fresh start, let’s talk about debt. We all know that many Americans are struggling with debt. Regardless of how debt and credit was handled in your marriage, now is the time to create a life where debt does not plague you.

1. Consider Using Your Assets to Start Your New Life Debt-Free

Debts as well as assets are divided in divorce. So, even though you are divorced, you may be carrying debt left over from your marriage and assigned to you in the divorce agreement. Ideally, debt is paid off during a divorce so both parties can start fresh, but if you exited your marriage with debt, this may be one time when it makes sense to use your assets to pay it off.

Let me explain. I met my husband in graduate school – a private graduate school (cha-ching!). When we married, we combined our student loan debt. After ten years, this debt still wasn’t paid off. In our divorce, it was divided up equally so I exited the marriage with a big financial burden.

In my new life, I had a lot to balance: my expenses were suddenly all my own and I was trying to create a new life for my son and I. Frankly, I could not afford this debt. So, after talking with my accountant and financial planner, I liquidated some of my retirement assets to pay it off. This allowed me to start my new life debt-free. Using retirement assets was a painful choice, but it is not one I have ever regretted and it could be the right move for you depending on your circumstances.

By the way, you are liable for any debt that has your name on it, even if this debt was assigned to your spouse in the divorce. That means, if he/she doesn’t pay, you are responsible and it could impact your credit. (You can monitor your free credit report card from Credit.com to see how any divorce debts many be affecting your credit score.) These potential consequences are another reason why it can be nice to minimize the burden of debt if you can.

2. Start a ‘Periodic Expenses’ Savings Account

Periodic expenses are simply those large, non-monthly expenses that everyone has — holiday gifts, car repair, kids’ summer camps, dental work, yearly yard cleanup, property taxes, airplane tickets. Sound familiar? Just because you are now single doesn’t mean life stops happening. And these expenses often end up on credit cards.

If you’re newly single, you could experience a lot of stress the first time one of these expenses hits. In order to avoid creating new credit card debt in your bright, shiny, new life, open up a savings account and deem it “periodic expense savings.” I recommend that you get in the habit of transferring in about 5% of your net income each month. When these expenses come up and you need to use a credit card to cover the total, transfer the money back to your standard checking account and pay the card off. (The money in your Periodic Expenses Savings Account is literally meant to be spent.) This simple move could be the best thing you ever do to avoid new debt.

3. Avoid Using Credit Cards to Buy Luxury Items

When people use credit cards for discretionary spending, they tend to spend more. Why? Because the pleasure of buying things – eating out or buying new clothes – become totally “divorced” (sorry) from the pain of paying for them. I can bask in the pleasure of new, blue suede shoes and not really feel the cost until I go to pay off my credit card in a couple of weeks. Because of this, we are prone to spending a lot more.

After a recent divorce, we can be even more prone to spending to make ourselves feel better. Getting divorced is hard. And we often spend to prove to ourselves that we can maintain our same standard of living, even though in reality we may have less money. To help avoid this common trap, do not use credit cards for discretionary spending like clothes, hobby supplies or eating out. You can use a debit card so you really “feel” the purchases. Voila! Way less likely to incur credit card debt.

4. Limit the Number of Cards You Have

Remember, it’s time to start fresh. When you were married, you may have had multiple accounts. It’s common. But the more cards you have, the more of a money fog you may be in. Too many accounts make it almost impossible to see what you are spending and many people simply zone out. Keep it simple. I suggest using one primary checking account and one primary credit card.

There is so much to balance in your new life. But, honestly, once the shock is over, it can be exciting to forge a new path. Avoiding debt is critical to creating a life that you love, so now is the time to make a fresh financial start.

The Life-Changing Magic of Tidying Up Your Finances

October 27, 2015Emotional Money PathSeattleMoneyCoach

When my third money coaching client said, “I’ve just read this book on ‘tidying’ and I think it’s connected to money somehow.” I got very curious. “Tidying?” Yes. Literally a book about decluttering and organizing your space – and they were all raving about it. (Ummm…were they really raving about a book on tidying?)

Suffice it to say, I bought the book. It’s called The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, by Marie Kondo. And it truly is a #1 New York Times best seller (with more than three million copies sold).

In it, Kondo teaches you exactly how to discard what no longer brings you joy, until you are only left with the possessions you truly want to surround yourself with. Then, she explains how to organize those items within your space. If you do this using her methodology, she promises you’ll never “relapse” – you’ll never again come home to energy-depleting clutter. And more than that, if you put your house in order, you will no longer be distracted or weighed down by your stuff.

Sometimes our “stuff” is a part of who we used to be and the life we used to have before we divorced, or it can be related to what we think we should be. Perhaps these things are simply vestiges from old relationships. Letting go of the items that don’t tie in to who you really are now will allow what is truly “you” to remain. The “magic” that comes from tidying will enable you to discover what you want to do next in your life.

It makes sense, doesn’t it? If you teach yourself to understand what really gives you joy – and only surround yourself with those items – you get in touch at a very deep level with who you truly are. And as Kondo writes, “The question of what you want to own is actually the question of how you want to live your life.”

Now what does this have to do with your money?

I find that when I first meet clients, they have a lot of financial clutter that weighs on them. And when we “declutter” their finances, they feel lighter and freer, so our work can go to a deeper level. They begin to get clear on who they are and what they really want.

The Clutter of Multiple Accounts

At the first session with a new client, I get out a piece of paper and literally draw a picture of all their accounts: checking, savings, credit cards, etc. Then I draw out how they are connected – how the money flows from one place to another.

You should see the large messes that begin to take shape on this paper. Money is transferred partly to this account and then some to that account. Some bills are paid out of certain accounts, while other accounts are used for discretionary spending. Some things are auto-debited and others seem to get lost in the cracks with late fees. But then when accounts don’t have enough money, money is transferred back and forth, with credit card accounts taking up the slack, and then being paid for as best people can.

Eventually, we sit back and look at my drawing with all its lines, circles, and arrows.

“No wonder you are feeling frustrated,” I often say. Seeing their financial life this way usually creates one of the first lightbulbs. The more accounts a person has, the more “clutter” there is.

Simpler is better.

In my personal life, I use one primary checking account. I never have a question of how much money I have or if I can pay a bill. I simply put everything through one account. That way, I can focus on more important things – like how to use my money to make me happy and move towards my goals.

The initial act of “tidying” I ask clients to consider is to stop using so many accounts and begin to close ones that are no longer being used. My most successful clients have very few accounts (many do well with one checking account and one credit account). Remember, the goal is not to come up with elaborate ways to move our money around. It’s to create a happy life now, and a secure future later.

Messy Unexamined Expenses

Once you cut down on the “account clutter,” you can begin to clearly see what you spend. (It’s very difficult to see what you spend when the payments come from five different places.)

And often, we find that some expenses are simply left over from a previous relationship, or they no longer “fit” in someone’s life for various reasons.

One client never watched Netflix, but it still came out of her account, a remnant from her ex-husband who was a movie buff. Another client was a member of a wine club, but when we examined this expense, she realized it was really a hobby she had inherited from her ex. There are many layers of saying goodbye in a divorce. You may need to say goodbye to expenses that no longer make sense in your new life.

And yes, sometimes expenses simply don’t “fit” in your new single life. Hard choices need to be made. Often, people need to spend less to reflect a single income. You may need to simplify. But is this always bad? When we declutter and organize our homes, it feels sooo good. Reframing your new life as a chance to simplify and streamline can make a big difference in your outlook.

Marie Kondo writes, “The process of assessing how you feel about the things you own, identifying those that have fulfilled their purpose, expressing gratitude, and bidding them farewell, is really about examining your inner self – a rite of passage to a new life.”

And while she was not talking about your new life after divorce, she very well could have been.

Under the Clutter

Often, financial clutter can mask real fears and concerns, keeping us distracted. Just like when you finally unclutter a room, when you declutter your financial life, it is easier to see what is really going on. You can uncover what is working, what is not, and where you really want to go.

Unexamined financial affairs keep us locked in stressful financial cycles, with no time or energy to delve into deep questions that might provoke real change.

The good news is, when we discard accounts and let go of expenses that no longer suit who we are, then the next phase of the work begins. As Kondo writes, “[Tidying] allows you to confront the issues that are really important. Tidying is just a tool, not the final destination. The true goal should be to establish the lifestyle you want most once your house has been put in order.”

How wonderful to discover, and start working towards, the kind of life you truly want.

Overspending at the Love Pantry? Don’t Panic, Adjust.

September 29, 2015Practical Money PathSeattleMoneyCoach

We all get hit with unexpected expenses now and then. Sometimes for aggravating things like car repairs, and other times for celebrations – like bridal or baby showers. Recently, when a friend of mine was getting married I found myself wandering through the Love Pantry, looking for something a bit…well, you know…for her shower. Let’s say I found something that crosses the Kama Sutra with a deck of cards…oh, and edible body frosting…yum.

Yes, I’m sure some of you are thinking “TMI” here, but I promise there is a lesson to be learned. I was sitting down the day after the shower working on my money. It was only two weeks into the month, but goodness, the expenses were adding up quickly. At first I was frustrated. In addition to spending more than I originally planned on the bridal shower gifts (which I wouldn’t have changed – they were a big hit!) I realized I had to pay for alterations on my bridesmaid dress. (Yeah, yeah, I’m sure I’ll wear it again one of these days…) Oh—and my car’s rear window defrost stopped working. Lovely.

So what did I do? I looked for other places to cut from my planned expenditures that month. I decided to wait on ordering new blinds for my kitchen and offered to cook dinner for a friend instead of going out. I immediately felt relieved and went on about my day. Here’s the key—because I was only half way through the month, there were plenty of shifts I could make if I wanted to.

In my practice, I call this “being in real time with your money”. Many people look at their money after it’s all spent using credit card statements or online banking. Sometimes they’ll look at spending reports in their financial software. While this can be helpful, sometimes it’s depressing. (“Oh, look how much I spent…wow.”) And after all, the month is over and the money is, well, gone.

Being in real time means knowing where your money is going and having a flexible plan to address changing needs. If you get frustrated with money, it may be hard for you to believe this, but I always know how much I’m going to have at the end of the month (and teach my clients to do the same). How? My spending plan is a living document. I simply update it and adjust it as I need to. (By the way, I hate static budgets. In real life, you have to roll with the punches and be able to shift things around as YOU want to.)

Take the Time

Practicing being in real time with your money does take time. I spend about five minutes a day simply tracking what is happening with a deeper look once a week.

I often hear that it is hard to find the time for this task. Personally, I find it strange that some people work 40 to 60 hours a week for money and then say they don’t have time to manage it. Are you guilty of this?

Trust me, I’m busy too. Yet I can find five minutes a day to pay attention to my money. After all, what’s five minutes compared to my eight-hour work day? And this practice saves me tons of time in many other ways- I’m never running around juggling my finances or spending time being stressed out, for one.

Managing money does not mean you will be perfect with all your money choices. We’re all doing the best we can, we are emotional beings and we simply can’t predict everything. But knowing you have a way of finding balance and knowing you have enough, is a beautiful thing indeed. That way, when you find the perfect Kama Sutra bridal shower gift, you can buy it with confidence (financially at least).