All posts by SeattleMoneyCoach

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.

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.

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).

Your Brain on Shopping: Two Tips to Avoid OverSpending

September 1, 2015Emotional Money PathSeattleMoneyCoach

The blue suede shoes sit on the elevated pedestal in the department store, calling to you. At last, the perfect complement to the outfit you purchased last month. You hesitate for a moment, afraid to turn them over and see the price…

Understanding what happens in your brain when you spend money on something you really like can make a big difference. This lets you know how to keep your spending brain balanced and your wallet happy – while still enjoying those trips to the mall. Because I love my blue suede shoes.

This is Your Brain on Shopping

Deep in our brain are pleasure centers and pain centers. Spending money on something we like gives off a feel-good hit of dopamine. This wonderful neurochemical is part of the spice of life; it’s the same chemical that floods our brain when we bite into a perfect piece of chocolate cake.

Dopamine is really active when we do things that are new, novel, or exciting. And often, shopping fits this bill. We are “hunting” for something new, and when we hit a sale or find a really great deal it is very exciting and triggers a boost of dopamine.

Then comes the pain. You turn over the perfect shoes and see the price tag. Ouch! And when you pull out the cash to pay for them, you really feel the pain.

It is actually healthy to feel both the pleasure of the purchase and pain of paying for it. We get into trouble (overspend) when we float away on the pleasure and hide from the pain of paying for something.

The Problem

Stores know how to amp up your pleasure centers with mood music, nice salespeople beautiful surroundings and, of course, those amazing shoes on sale.

If you put the shoes on a credit card, the payment is divorced from the transaction, so you don’t feel the “pain” of paying. Let’s face it, you know in the back of your mind you aren’t going to pay that bill for a couple of weeks. And even when you do, the shoes will only be one item among many. So while you may be in shock when your credit card bill arrives, you still won’t really “feel” the shoe purchase. And you will already have (over) spent on the shoes. You have oversaturated in pleasure and not let yourself feel the pain of paying.

Simply put, credit cards unbalance the brain.

(In addition, credit cards induce money fog. Many purchases are lumped into a single payment, making it difficult for our human brains to think about and plan our purchase rationally.)

Some Solutions

Here are some basic strategies to help you be in control and not overspend:

Don’t put your pleasure spending on credit cards. Use your debit card for clothes and things you enjoy. This way you feel the purchase and will be more mindful of what you spend. Keep your credit card for times when you are not prone to overspend, such as car repair.
If you do use your credit card, track your spending in a credit card register right away. Tracking your purchases in your spending plan software almost instantly balances your brain. (MoneyMinderOnline, financial software, was designed to help users track their spending, including credit card spending, for just this reason.)
Find other ways to boost your dopamine levels so you are less likely to do it by shopping.

There is nothing wrong with enjoying shopping and buying things you love. If you allow yourself to feel your purchase you will keep your brain balanced, healthy, and happy.

How To Unlock Your Earning Power in Ten Weeks

July 21, 2015Underearning 101SeattleMoneyCoach

As a money coach, I work with women on how to transform their relationship to money. We look at how we spend, our debt and savings, and how to feel in control of our personal finances. And sometimes, we need to increase our income. Because with more money comes greater freedom, self-care and the ability to create the lifestyle of our own choosing.

So if you would like to focus solely on earning more money—and let go of old patterns, thoughts and beliefs that have held you back and learn the tools and tricks on how to earn more– my ten week program may be a great fit for you. (Here is my link to my two minute video about it.)

Years ago, I struggled with how to earn my worth. When I entered the workforce, I worked very, very hard. But I didn’t earn what I could have…

I didn’t know how much to ask for when I got a new position. And I was uncomfortable asking for a raise. When I had my own clients, I was uncertain what to charge them and worried terribly about raising their fees. (I worried that if I asked for more, my boss would balk, or it would harm our relationship. I worried my clients would leave if I charged too much money.)

Looking back, I had no idea I was “underearning”. I certainly didn’t realize my financial expectations were set so low. But I did get to the point where I resented how hard I worked for the money that I brought in.

And truthfully, I had some conflicting feelings about wealthy people and those who earned what I thought was a lot of money.

Mostly, I just worked hard, was really good at what I did, and just assumed that I would be noticed and somehow rewarded for my work.

Over the years, I began to study women and money, and “underearning” in particular. I began to understand the emotional and psychological connections behind why women undersell themselves. I realized that most women struggled with the same issues as me.

I realized that we women almost always sell ourselves short when it comes to asking for what we deserve.

In 2004, I wrote and published Why Women Earn Less: How to Make What You’re Really Worth (Career Press). This book looks at the psychological reasons behind why women undersell themselves (and often don’t realize it!) as well as gives them practical advice. Over the last few years, this book has been translated internationally, from Chinese to Korean, to Hebrew.

In 2010, I was hit with an unexpected divorce (as so many are) and I was left emotionally and financially devastated. As I shared in the last newsletter, I had no home, decimated retirement accounts, nothing but my skills and determination as a money coach. This was an opportunity to put my lessons to the ultimate test. Over the next year, I used every skill I possessed and developed new tools and tricks along the way to unlock my own earning power. I’m proud to say that within one year, I saved enough to buy a home for my son and I, and started rebuilding my retirement accounts. (My story is here if you missed it.)

I’ve realized what a cord I struck, when I finally shared my story. So many of us want to earn more—and indeed- need to earn more. And all of us want to earn at our potential.

My new 10 week program includes the tips and tricks I have refined in more than a decade of work—tested by thousands of women, including myself. And I’ve put it together in a super accessible way to unlock YOUR earning power.

Click here to Unlock Your Earning Power Program

In this 10-week program, we dive deep into the three essential areas that have a direct impact on your ability to earn more money:

Clarity: How to get exquisitely clear on what you should be making.

Confidence: How to ask for what you’re worth with confidence and skill.

Core Causes: How to identify, understand and transform the patterns, thoughts and beliefs that are holding you back.

This program is unique and so effective because it does more than just teach you new skills.

You will identify and let go of the old patterns, thoughts, and beliefs that have previously made it impossible for you to ask for, receive, and expect the income you want and deserve.

If you are ready to:

Be generously compensated and recognized for your work.
Have a firm confidence in your worth, making it easy to ask for what you deserve.
Know how to raise your rates or negotiate your salary without resistance.
Revel in a renewed sense of energy, enthusiasm, and eagerness for your work.
Always stay on top of your pay scale and earn top-dollar in your chosen field.
Experience the freedom and joy of living your ideal lifestyle now, while also investing in dreams for the future.

Then please consider this ten week program.

Click here to Unlock Your Earning Power Program

How it works

Each week you’ll receive a:

weekly inspirational / thought provoking email
45-minute MP3 you can listen to in your car, on a walk, etc.
short handout with exercises for you and complimentary articles
mid-week check in to help keep you going

Listen, you’re good enough right now—just as you are—to be making a lot more money, enjoying an ideal working situation, and a comfortable, wonderful lifestyle.

So take this next step towards realizing your earning potential, making top-dollar in your field of expertise, and enjoying a life free of compromise when it comes to money.

Invest in yourself and your ability to create an amazing, prosperous life….now and in the future.

Click here to Unlock Your Earning Power Program

Up from the Ashes – My Divorce and Rebirth

July 8, 2015Underearning 101SeattleMoneyCoach

True Confession: As a money coach, I’ve struggled with my own issues around money. (Gasp!) Never was it more painful for me than after my divorce. In the end, I was able to learn from that experience and create a lot of amazing help for you to step into your own earning potential. But I’ve never shared my story. I think that until now, five years later, it was simply too hard of a story for me to tell.

As I was working through the process of putting together my new unlock your earning power program (which I am very excited about!) I had to revisit this time in my life. And, after some thoughtful reflection, I decided it was time to finally share the real story of where I was just a few short years ago. I offer it here so you know that you are not alone. And if I can survive and thrive, you can too.

Up from the Ashes – My Divorce and Rebirth

I awoke with a start, temporarily forgetting where I was. Then it all flooded back to me. With divorce papers not yet dry, I had taken my 9 year old son and found refuge in my mother’s home.

Everything was gone – everything. I was 39 years old, suddenly a single mother, and I had nothing. I possessed no house, decimated retirement accounts, no savings, and I was seven thousand dollars in debt. And, no divorce settlement was coming my way.

I felt like a refugee, still in shock, with my belongings in boxes on the floor of the room I had last inhabited in high school. The shadows of my old teenage music posters seemed to taunt me from the walls. Sadness washed over me, mixed with anger at a future that felt suddenly ripped away. And I felt a cold, stomach clenching fear at the daunting prospect of rebuilding my financial life from almost nothing, at almost forty.

I thought of my young son. Down the hall he slept in a small, hastily cleaned out room. He needed a stable home, a yard to play in, and a mom who wasn’t overwhelmed. This was all like a bad time warp, or just a very bad dream that I would surely awaken from soon.

I laid back and cried.

Later, when my mind calmed, I assessed the situation and thought about what I did have. I was a money coach, and beyond the shame of a money coach who currently had no money and a negative net worth (I kept my story and situation quiet, as the emotional upheaval was so great that I could not speak about it), I did have skills that I could use. Though divorce had robbed me of so much, I knew I was good with managing my money – if I had any. And while my emotions felt out of control in this tsunami of change, I was equipped to avoid overspending, and plan where I needed my money to go.

But…I needed more money.

And the thought of being a paid boarder living with her mother for the rest of her adult life depressed me…so I needed to move quickly.

In my professional life, I had written about “underearning” and how women undersold themselves. And now that it was all up to me, it was time to put my teachings to the ultimate test. No longer was this an academic subject.

Forget “underearning”- I was literally living in a bedroom. I had to step into financial success in a big way.

So I set out to bring my income up. Over the next year, I used every skill I possessed and I developed new tools and tricks along the way to unlock my own earning power.

From tapping into how I had undersold myself in the past so I could avoid it, to learning the skills to ask for what I needed, I learned how to attract more of what I deserved. I improved my negotiation skills. I assessed my private practice fees and marketing. And I dove deep into the metaphysics of money. I realized I was operating under a whole host of beliefs that had kept me from taking my income to the next level.

In one year I had paid off the debt left from the divorce. I built up my savings that had been wiped out. And I saved up for a down payment on my very own home—and then found and bought a house! I even restarted my retirement accounts. Yes, I did this in one year.

It was also the year I crossed the threshold of becoming a six-figure woman.

Exactly twelve months after waking up in my old high school bedroom, my son and I rode in the front of a moving truck, leading the crew to this new home that I bought on my own – with no husband and no money from anyone else.

I will never forget the day we moved in. My son ran around the rooms in delight, loudly proclaiming that his bedroom was his new castle. I lay on the floor of my empty living room and looked up at the trees that grew on the property I now owned. I felt like I had a personal, beautiful forest. I lay there for a long time watching the wind move through the branches. I felt in control of my life and my future and a deep sense of peace and calm spread through me.

Today, it is five years later. I have rebuilt my retirement to where it was before my divorce. And I love my home as only a woman can – a nest that heals and provides me a retreat from the world. Next month I am breaking ground on a major remodel. And next year I have plans to build a second home for rental income. Life is very good.

After working through this journey, I created a course that captured all the years I had been teaching women how to earn more, that also incorporated all of the new techniques I had learned and practiced. And it is time I shared these powerful thoughts about how I unlocked my earning power – with you.