As a money coach, I am sometimes asked about credit scores, and people are often surprised by my attitude. I feel that people worry about them too much. Credit scores (Your FICO score) tell potential creditors how good you are at borrowing money and paying it back. That’s it. So it is a bit of a game. Yes, it is good to have a nice credit score, so when you buy a house, you will receive a more favorable interest rate. But take a deep breath. You are not your credit score. It is simply a number. And like I said, it’s a number about borrowing. Don’t we want to get off the borrowing merry-go-round? I often wonder when I hear people bragging about their credit scores. Really? Are they really bragging about their ability to borrow money? Maybe they are bragging about their ability to play the credit game?

But let me de-mystify your credit score for a minute and then tell you how to easily obtain your score, and potentially raise it.
There are three credit bureaus in the United States that collect information on how you play the debt game: Trans Union, Experian and Equifax. They then use this information to create a FICO score for you. This is the number that many people are afraid of. Creditors look at this number to determine if they will lend you money and what interest rate they will extend to you. Equifax scores range from 280 to 850 (the other two are similar) and a score of 660-724 is average.

Your credit rating is based on your history of debt (late payments etc.), how much debt you have and how long you’ve had it. The type of debt you have and new debt also affects your score.

You can receive a free report once a year from all three bureaus. Here is where to go: www.annualcreditreport.com. It is very easy, believe it or not. Fill in the info and click which bureau you want your report from. And for less than 8 dollars, they will even tell you what your score is. (The report is free. You have to pay for that dang number.)

So do some deep breathing, make a cup of tea, give yourself an hour, and pull your 3 reports. Have your printer ready, so you can print them out.

Look at the reports, one at a time. Once you’ve looked at one, it will be less scary to look at the other two. (Unfortunately, they are not always identical. One credit bureau may have some extra info, or include inaccurate information that the other bureaus don’t show. So it is best to look at all three.) Looking at them on line is helpful, because the website will show you an easy to read summary. The actually reports sometimes look arcane.

If the information on your credit report is accurate, then it will stay. There is not a lot you can do about information that is true. If the information is not correct (for example they show a credit card you don’t have, or a tax lien that you don’t have) then you can dispute it. Doing this on line is fairly easy. Just click their “dispute” buttons. The burden of proof is on them. If you dispute something as not true, they have 30 days to either prove it is true, or they must take it off your report.

Things that are considered negative, such as late payments, charge offs etc., can only stay on your report for 7 years. Bankruptcies and tax liens stay for 10 years.

Breathe. This is only a number. Rarely do people have a perfect score or even close to a perfect score. And even if you have things that are not attractive, such as late payments, the farther back in time they are, the less it affects your credit score. Our numbers often tell a story. Many of us have been through hard times. You may see a period in your life when you really struggled. There are stories behind every report. You are not your credit score. You are not your report.The best thing you can do to “fix” your credit score is to dispute information that is inaccurate. Then, endeavor that from today forward, you will pay all bills on time. Control what you have control over.

Yes, many people need to lower their debt to income ratio. Paying down your debts will help. But many are stressed now. So focus on what you can focus on. Pay your bills on time and this will help tremendously.

Remember, this is only a number. You are a wonderful person who is growing and developing financially over time. You are NOT your credit score.

Whether you need to spend less when you go out shopping or you want to be a more conscious spender, it helps to have a few tricks under your belt. Stores spend billions on the science of getting you to part with your money. They understand how your brain works and then use this against you. Well, with these tricks under your belt, you can beat them at their game and feel more in control. And you’ll be able to enjoy shopping without coming home with a spending hangover. (This article is focused on brick and mortar shopping. My next one will be on Internet shopping.)

1. Be wary of stores that are new to you. Why? We spend more money when we are in a new-to-us store. This is because dopamine- a wonderful feel good drug in our brain– is activated when we experience something new or exciting. (This is one reason we spend more when we are on vacation. We are in a novel situation experiencing new stores.) So try hard to come back to the store to buy your discovery. You may want to hit the new store at the beginning of your shopping trip and then tell yourself you’ll come back to the store later to make your purchase. Trust me, it simply won’t be as exciting the second time around and you’ll make a more reasoned choice.

2. Leave your credit cards at home when you go out shopping. Stores desperately want you to use a credit card because they know you’ll spend more if you do. (Macy’s is the worst offender, by the way. They are very aggressive in trying to get you to use a Macy’s card. Have you noticed?!) If you know the money is going to come directly out of your bank account, you will be more mindful and usually spend less. In fact, the evidence is overwhelming that when you buy items with a credit card, particularly things you enjoy, and you spend 20-30% more. There is simply too much of a delay between basking in the pleasure of buying those shoes and feeling the pain of having to pay for them– later. You want to “feel” the purchase in the moment. Macy’s be damned. Leave your credit cards at home.

3. The magic 90 minutes. Stores and malls do many things to get you into the “zone” of shopping. Notice that there are never any clocks on the walls of a store, and they often don’t have windows. They are hiding the passage of time. Well, after 90 minutes, you do start to zone out and mindless spending goes up. So do this: set the timer on your phone for 90 minutes. When it goes off, simply stop for a bit. Take a break and have a cup of tea. Look at what you’ve purchased and think about your plan. (Do you want to return anything you just bought?) I’m not saying go home. But taking a break every 90 minutes keeps you from overspending.

4. Limit the number of stores you visit. It’s very simple: the more stores you visit the more you buy. People may tell themselves that they are comparison-shopping. But often people feel like they need to buy something for all the legwork they’ve put in! You become very “invested” in how much time you’ve put in. You’d better at least get something….

5. Don’t carry items around with you that you are contemplating purchasing in a store. The issue is that when you carry products around with you, they begin to feel like yours. You get used to them and you feel a little “pain” if you have to put them back. You feel like you are losing something. (Humans are funny. We actually hate pain and loss more than we love pleasure and gain. It’s a brain thing.) Hence, items that get carried around are more likely to be bought. So if you are eyeing something, keep it on the rack or shelf until you decide. And if you’re worried someone will swoop it up before you decide, “hide” it on a different rack or shelf. Come on; don’t tell me you’ve never done that.

6. Don’t interact with sales people too much. Yes, they are quite friendly. But the more you interact with them, the more likely you are to purchase from them, for several reasons. One is that they are often skilled at selling to you. But people often unconsciously feel, after a point, that they don’t want to let down a sales person who has helped them.

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

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

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

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

So I poured another cup of coffee. And found some Godiva chocolate.

Each year I go through this ritual, and I simply can’t imagine living without a crystal ball—my annual spending plan.  Some call it a “budget”, but I really hate that word and I don’t even let my money coaching clients use it. It’s a PLAN.  My plan. I create a plan every month to guide me through the month. Wow. It’s truly hard for me to imagine not having this monthly guiding light. But every January I take it to the next level and plan the entire year. I do for myself what I help my clients do.

I think about all the things I really want in the coming year, and all of the things I need. (Like travel and new furnaces.) I think about the reality of my life and what large expenses will come regardless of my love of them—car repair, my son’s orthodontist bill. I think about my goals and my dreams for the future.

Of course I put all my normal monthly expenses into my annual plan, but I debate those too. Every year I look at my expense with a fresh eye. Is it time to change cable companies? Am I happy with my hairdresser? (Yes!) Is it time to let go of the hardcopy newspaper? (Maybe.)

When I work on my annual spending plan, I have to balance all of my expenses against the money I have coming in this year. Oh- that part. But there is a fundamental truth to money that doesn’t change: you simply cannot spend more money than you have coming in. Well, you can by using debt or draining your assets, but in the long run, there is great unhappiness and stress down that road.

It’s certainly true that money is not the most important thing. But I find that when people have a clear plan and have a way to actually follow their plan, they think less about money and can then settle down and focus on what is important in their life. I have definitely found this to be the case in my own life. 

Well, for now, I’m still working on my own annual plan. The beauty of the crystal ball is that it merely shows possible futures and outcomes. It shows me where I will be financially come next December if I do various things. Nothing is set in stone. I get to ultimately decide which path I will go down. Then I can relax and put some time into my hobbies, my family, my friends, my life.

I love the feeling of being in the driver’s seat of my own life

It’s a new year. I know you may be struggling with a Post-Holiday Spending Hangover. But you get to start fresh. Really! So let’s start off the year with a simple, but helpful idea. It’s called Do No Harm Spending.

But first, let me throw out a deep thought: You are the most important person in the world. There is no one more important than you. And you have to take care of yourself. And you have to take care of the woman you will be at the end of the month. You have to take care of the woman you’ll be next year. And you have to take care of the amazing woman you’ll be in 30 years. And how you spend money affects these future selves.

So, when you are out shopping, I want you to practice, “Do No Harm spending”. Simply ask yourself the question—“Will I be financially harmed by buying this?” Because really, as in all money matters, this is about self-care. If you spend the money, will it leave you with sufficient money to save? Will it drive your credit card debt? Will it take money away from something you value more?

Practicing “Do No Harm spending” sounds like a simple thing to say, but it’s about taking care of yourself now, and all your future selves as well.

If I am eyeing $400 boots, I ask myself, “Will Mikelann be financially harmed in the buying of these boots?” Sometimes the answer is yes, and sometimes it is no. When I was car shopping, I had to think of the future Mikelann. “Will Mikelann be financially harmed next year by large car payments?” Yes or no. When I was considering a very large vacation, I had to really think of the future Mikelann. Because the current Mikelann just wanted to wander through Europe and not come back. “Will the future Mikelann be financially harmed by doing this?” Well, that one was particularly irritating, because I was also trying to fund my ROTH, and I was having trouble doing both.

Practice Do No Harm Spending. You are the most important. What you do affects yourself now, at the end of the month, possibly next year and maybe thirty years from now. When you spend, don’t harm yourself, and don’t harm that awesome woman waiting for you in the future.

Here’s a question– Did you wake up last January with a spending hangover? You know what I mean- come January, when all the gifts are opened and the parties are over, the Visa, MasterCard, Macy’s and Nordstrom’s bills begin to arrive.

Credit card use is up 7% this holiday season. And 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?

If you want to avoid that January spending hangover, consider this: at the root of post-holiday debt is lack of planning. When we don’t do prior planning, we eliminate some of our buying options.

The answer is to create a “holiday spending plan”. So find 30 minutes, print this article out, grab a cup of coffee, a pencil and a pad of paper, and help yourself avoid the Post-Holiday Spending Hangover.

8 Step Plan to Avoid the Post-Holiday Spending Hangover

Step One: Create your Columns — On a sheet of paper, create three long columns. Label the first column “people”, the middle column “gift ideas” and the last column “amount”.

Step Two: Brainstorm People — Using a pencil, create a list of all the people you are planning on giving a gift to. Don’t put down gift ideas yet. Brainstorm people. One of the biggest problems around holiday gift giving is that we end up gifting a lot more people than we originally thought about. Consider creating three lists: Family, Friends, Service Providers (babysitters etc.)

Step Three: Brainstorm Gift Ideas — Write down gift ideas. You’ve likely already thought of gift ideas for some of the people. And make sure you write down in this column all the gifts you’ve already bought!! Did you pick up gifts over the summer or already start your shopping? Write these gifts down!

Step Four: What will the Gift Cost? — Now it is time to put down amounts of money in the right hand column. Do the best you can. You’ll enter a zero where you’ve already bought the gift you wrote down.

Step Five: Add it Up — Take a deep breath and add it up. This is the total amount you are planning on spending on gifts.

Step Six: Other Holiday Spending — Part of what puts people over the edge during the season is all the extra spending on things besides gifts. Grab another piece of paper and list out the following categories, with room under each category to break it down into smaller items. Write down: Holiday parties, Holiday food, Holiday decorations, Holiday travel, Holiday clothes, Holiday gift wrap/postage. Now go fill in the details. For example, under holiday decorations you may write down a tree, new lights for the tree and a couple of poinsettias.

Step Seven: What will the Other Holiday Items Cost? — Fill in the cost of these other forms of holiday spending. How much will the tree cost? Come up with a number for the new lights, gift wrap and postage. Guess where you have to. A guess is better than leaving it blank.

Step Eight: Totaling it Up and Adjusting — Now add your total gifts and your total “other holiday spending”. How do you feel about the amount? Does this seem like a reasonable amount to spend on the holidays? Really think about this. 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.

This is often the time when people consider getting more creative. For example, can you give a family gift instead of gifting everyone in your friend’s family? Can you decide to draw names? 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.

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.

Be prepared to take this sheet of paper, this plan, with you when you shop- fold it up and put it in your purse. The best plan does you no good if you don’t bring it with you. As you spend money, 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?

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.

Also, 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.Knowing what you want to buy and how much you want to spend, before you leave for the mall, will save you a ton of money. You will finish your shopping earlier and you will have fewer impulse buys.

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!

If 2012 is the year to make more money, raising your fees could be a vital ingredient. Many people have kept their fees flat for the last few years, due to concerns about the economy. But with the impact of inflation, you can’t keep your fees the same forever. Generally speaking, you should raise your fees by about 3-5% each year, simply to keep from falling behind.

And yet why does looking at what you charge, and possibly charging more money, feel so difficult? For years I’ve encouraged many of my clients to look hard at their fees, and to assess whether it was time to raise them. Often, it feels quite emotional. When you undercharge or simply give too much time away, you start resenting your clients and your work. And of course many service providers genuinely like their clients and deeply value these long-term relationships. They fear that if they raise their fees, they’ll lose these wonderful clients.

But it goes deeper then this for many women—and some men as well. They fear harming the relationship itself. Relationships are everything! And god forbid these wonderful people who are our clients think that we believe money is more important than people….

Time and again I’ve seen the “Good Girl Syndrome” raise its head and keep people from charging an appropriate fee. This “Good Girl Syndrome” is simply the behaviors that arise from wanting people to like us and not wanting to make people mad. Some call this the “internal people pleaser”—and you can see how this impacts our ability to charge people money.

I have found that women tend to identify with that internal people pleaser more than men do. Though of course there are plenty of men who struggle with this also. (Particularly men in the helping professions.) We fear that our clients will be angry that we’ve charged them too much money. We worry that raising our fees will harm our relationships with them. We worry that money will drive people away. And we all know that people pleasers hate not pleasing people….

But there’s another component to the Good Girl Syndrome—beyond just wanting people to like us. There is also a fear of not being good enough. So one way we protect ourselves against not being good enough is by striving for perfection. We think that no one can be disgruntled if we never make a mistake! But this perfectionism holds us back from making more money.

Countless self-employed women are waiting until they have it “right” (waiting until they’re perfect…) before they consider charging more.

We tell ourselves that when we are really ready, we’ll charge more. But somehow we are never quite ready. We never attain “perfect,” so we don’t want to look at our fees. Convenient, huh. Besides, we can’t charge more money. Not yet! We don’t have enough experience, or the right credentials or … When you add to this the desire to please people, and then you sprinkle in the concerns of the economy over the last few years, well, no wonder so many service providers feel frozen.

Waiting until we are perfect is a great rationalization to keep from moving forward. We stay where we are—undercharging our clients, giving away too much of our time for free, taking clients who are not our ideal clients, etc., all the while saying to ourselves, “someday I’ll charge more money. When I get it all together. When I’m really, really good at what I do. When I’m really WORTH it. Then I’ll charge more.”

We try to please our clients and go to great lengths. And while we wait to raise our fees, or reign in how much time we give away, resentment grows. When you undercharge or simply give too much time away, you start resenting your clients and your work. We don’t do our best work at that point. We feel taken advantage of, walked on. Our inner Good Girl grows resentful, while she continues to be as perfect as she can, and as nice as she can, sometimes for ungrateful clients…

I invite you to consider raising your fees. You deserve to make good money. And if nothing else, you deserve to stop falling behind.

Join Mikelann’s list to be notified of upcoming earnings programs.

TIME TO EARN MORE?

If you would like to earn what you’re truly worth and step into greater abundance, please see Mikelann’s Unlock Your Earning Power toolkit.   Identify what has been holding you back, learn the skills to ask for more and start earning at your true potential. For both self-employed and salaried women.

If 2012 is the year to make more money, raising your fees could be a vital ingredient. Many people have kept their fees flat for the last few years, due to concerns about the economy. But with the impact of inflation, you can’t keep your fees the same forever! So please consider joining me for this live all-day seminar, by yours truly, in Seattle. I am taking 10 self-employed women on a journey to explore setting and raising fees in ways that feel good to us and allow us to make more money.

Often, women are conflicted about charging people for helping them, or they simply don’t have the confidence or skills to set their fees where they should be—and raise their fees when it’s appropriate. The day will include deep discussions about how to charge what we are really worth, why this is often difficult and how we feel about what we charge. Be prepared to do some journaling and guided visualization work, as well as learn powerful information.

This seminar is for women in service-based businesses– from therapists and graphic designers to consultants, lawyers, and hair dressers. (It is not designed for product pricing.)

So if it’s time to make more, come and learn how to set the right fee in the first place, when and how to raise your fees, and how to communicate this increase easily to clients. We’ll also cover how to keep from discounting your prices, how to talk about price comfortably and how to confront that “Good Girl Syndrome” that sometimes gets in our way. And we’ll learn about the psychology of pricing, so you really understand the dynamics of fee-setting. Most importantly, shift how you feel about charging people. This seminar will help you make more money and have more peace of mind doing it.

(This seminar is not currently being offering. For help with fee-setting, see the Unlock Your Earning Power program, below.)

TIME TO EARN MORE?

If you would like to earn what you’re truly worth and step into greater abundance, please see Mikelann’s Unlock Your Earning Power toolkit.   Identify what has been holding you back, learn the skills to ask for more and start earning at your true potential. For both self-employed and salaried women.

Now-a-days we shop in person, by phone or on-line, and we enjoy spending our money on things we like. There is nothing wrong with enjoying shopping! I tell my clients this all the time, and they always seem surprised that a money coach would say such a thing. Furthermore, I want my clients to enjoy spending their money. Even after they’ve spent it.

And yet so often, this is where it goes wrong. We enjoy spending our money in the moment, (or more often we enjoy anticipating what we’ll buy) but later we regret it. If you regret your shopping afterwards, something is not working. Sometimes this regret is just a “feeling”—guilt, frustration, or feeling more financially foggy. Sometimes it is specific—we know we’ve added to our credit card debt, or not left enough money for other important values in our lives.

Here are seven common signs that your shopping may be problematic:
1. Your shopping has caused you to add to your credit card debt, or caused you to be unable to pay your credit card bill in full
2. Your shopping leaves you without enough money to save each month. You like the idea of funding a safety net, for example, but you never have enough money to make any serious progress.
3. Your home needs some important work or repairs, but there isn’t enough money to fund these projects
4. After you go shopping (in person, by phone or on-line) you feel worse than when you started. You feel depressed or anxious or irritable or guilty or secretive over what you’re bought
5. You feel like you need to work a lot to fund your lifestyle and can’t imagine being able to live on less
6. Financial stress sometimes overcomes you and you have a hard time sleeping. Perhaps you have stomach problems.
7. You long to be able to go back to school or take some creative classes, but feel you can’t afford more personal-development

The first key to dealing with a potential “over-shopping” issue is to stop and identify it. Did you resonate with any of those signs above? Most of us are doing the best we can. We work hard and take care of ourselves and often those around us. We don’t intentionally harm ourselves. But are we harming ourselves with our spending?

Shopping is a common way we relax and take some time to ourselves. It is often vilified, though. Shopping is seen as superficial. However, shopping can be about self-care. It can be about self-expression. It can be about going out and taking some time to yourself, or enjoying a friend. But if it’s causing you a problem (see that list above!) you must name the problem.

The second key is to know how much money you can spend. This may sound simple, and it is a very learnable skill, but most people honestly don’t know how much they can spend. They often spend if today there is enough money in their account. What if you had a plan each month that took care of your needs, including savings, and let you know what you could comfortably enjoy spending? Wow. Guilt free shopping.

The third key is knowing what gives you deep satisfaction, and targeting your money towards these deeper needs and desires. Is it about the clothes? Or do you simply need some time to yourself?

Last week, I was very stressed and overwhelmed. My mother-in-law, whom I was very close to, died. It has been hard… I’ve had very little time to myself and I’ve been crying a lot. I also didn’t have a lot of money. (Shocking—a money coach admits such a thing?) I was completing a home project and it was over budget with too many trips to the plumbing isle at Home Depot. It wasn’t the end of the world, but it did mean I couldn’t go out and spend $500 at Macy’s or Nordstrom! But I felt depleted and the idea of wandering in the mall and buying a “pick-me-up” appealed…

I looked at my money plan and decided I could blow $40 guilt free. Well, that wouldn’t get me far at the mall. Skip the mall. I need less frustration in my life—not more. So I headed to this swanky plant nursery here in Seattle and bought a latte’ and visited the plants. I spent an hour looking at the maples turning colors and enjoying all their artistic container gardens. (I’m a horrid gardener, by the way.) Then I went to the nursery’s yummy home shop that is full of candles and fragrances and little house “nesty” stuff. And I browsed—smelling 50 candles and spraying all the mists and touching all the soaps. I picked out the perfect home fragrance and a lovely bar of soap — a good quality expensive one—and happily headed home.

The point is this—I enjoyed the shopping. But I didn’t put myself in a situation where I would be frustrated (at a mall with forty bucks prone to blowing my plan and then feeling worse). I knew what I could spend. And I knew that deeper down, I was actually grieving. I really wanted some alone time to just walk and I needed to attend to my self care.

This is called “do-no-harm-spending”. Mikelann was not financially harmed during this shopping expedition. In fact, she was helped. (And my home smells great and that soap is amazing.)

On Friday a reporter called me asking for an immediate interview on my thoughts on the new debit card fees. A camera crew was in my office within an hour. Thankfully, I happened to be wearing a good suit that day for a different purpose! Here is the accompanying news story article.

Oh my goodness people are upset! And I don’t blame them. It is now going to cost many of us $3-5 dollars a month to use our debit cards. Yes- that’s right—paying to access our own money…. How did this happen? Well, remember all those federal regulations that went through congress because of all the bad banking practices? This was an unintended consequence.

Simply put, a new rule limits the fees that banks can charge merchants every time a consumer uses a debit card to make a purchase. (These are called “swipe fees”.) They are also capping credit card fees, which is good. The rule, known as the Durbin amendment, is part of the Dodd-Frank financial overhaul law. However, now that the banks can’t collect as much money from merchants, they are trying to make up this lost income from consumers! Hence- debit card fees.

Yes, I am upset about this. But it’s not the $5 bucks a month I’m upset about. It is my fear that people will stop using their debit cards to avoid these fees and turn to their credit cards. And guess what—if you do that, banks will make even more money.

My number one concern is that if consumers switch to using their credit cards even more, they will overspend and drive their credit card debt higher. All the evidence unanimously points to the fact that people spend about 20% more money when they buy things on credit. This is for several reasons. Think of it this way: if I know the money is coming straight out of my checking account, I will think more carefully before I buy the $300 dollar leather boots at Nordstrom. But if I put them on a credit card, well- even with the best intentions of paying it off in full, I’m still more prone to spending the money, since I won’t really have to deal with it until next month.

And the reality is, 50% of consumers don’t pay their cards off in full. So if they start using their credit cards more, they are hurting themselves and simply making the banks even happier.

What else can be done? Well, you can switch to a credit union to avoid the fee. And not all banks are doing debit card fees. Also, some banks will waive the debit card fee if you have a premium account of some kind. Check with your bank.

Yes, it’s always best to shop around, and certainly now may be a time to switch to a credit union or different bank. But carefully weigh this. My own bank is likely going to institute a debit fee this month. However, I’ve been with my bank for 20 years. I may get them to waive it for me. And besides, I receive many perks for being a long time customer. I’m not going to leave a 20 year relationship that has served me well when it came to my mortgage etc.

The bottom line is that you are in far more danger of going into debt and staying in debt when you use your credit card. So while I am not thrilled with my debit card fee, it’s far better than being tempted to overspend. Don’t let anger at your bank lead you down a dangerous road of increased credit card usage.

Whether you earn $50,000 or $150,000, living paycheck to paycheck is extremely frustrating.  Here are five signs that you are stuck in the paycheck to paycheck cycle:

* You are waiting for a paycheck to get deposited before you purchase something
* You are juggling bills—and thinking about “which paycheck” you will pay them out of
* You feel like there is no money at the end of the month
* You tend to think of money in two week increments
* Any unexpected large expense has to go on a credit card

Do any of those sound familiar? When people live paycheck to paycheck, they seldom feel in control financially. And they usually experience various levels of chronic financial stress. It’s often as if they are waiting for the other shoe to drop….  There must be a better way!

As a money coach, I teach my clients a lot of skills to escape this cycle. Often, they go from feeling at the mercy of whatever life throws at them (the other shoe??) to being the one in control of their life.

One technique I teach people is to start building a cushion at the end of the month. What I mean is this: we all know that ideally you want your spending to be under your income. But the goal is NOT to end at zero each month in your bank account! What if you ended with a cushion? A cushion is a buffer, a shock absorber, and a shield to protect you.  And what if you let this cushion slowly grow to the point where it equaled one of your paychecks, or perhaps your mortgage payment?

Let me give you an example. Let’s assume you start the month with $600 in the bank. Of course this is often where the stress starts. You may not be starting with enough money, from a cash flow perspective. Then your math goes like this: If you bring in $5,000 this month, and you plan on spending $5500 this month ($500 more than your income…) guess what—you’ll only end the month with $100. That’s not much of a shock absorber for the coming month. Yikes!

So as odd as it may sound, sometimes we start with the end in mind, and not the beginning. Where do you want to end the month? Just imagine it. How much money would you prefer to end each month with, so you are not waiting for that first paycheck? Believe it or not, you can decide what this number is, and slowly build towards it. Perhaps you would feel a lot calmer if you started each month with $3,000 as your beginning bank balance. Then you wouldn’t be timing all those paychecks!

By starting with the end in mind, it will help you decide how much you can actually spend in a given month to begin building this cushion. It may take a while. But with a specific goal, you may decide to eat out a little less, or skip that Nordstrom’s trip. Less stress is worth a lot. Each month you end with a little more. But after a few months, you are there.

Here is another tip. Once you are ending with your desired “cushion”, what happens if you end with more than that? Take it out of your checking account and place the difference in savings! That savings becomes what you use for all those “unexpected” expenses, or the expected, like the holidays.

Oh my gosh, did I just say “holidays?”

Go back and enjoy the sunshine.