Halloween FEAR: False Evidence Appearing Real

I love Halloween; how we collectively suspend disbelief, embrace being jumped at in haunted houses and let ourselves be subjected to the scary, gross and silliness that abounds on this day. None of it is truly fearful, its, as the saying goes, “False Evidence Appearing Real.”

Everyone knows fear. It’s a natural response to physical danger. But it is also a manufactured response to the “what-if’s” that our minds create around future worries. When it comes to money, it can be what if I run out of money, what if I have no where to live, what if I my car breaks down, what if they won’t pay me what I’m worth, what if they cheat me out of money, what if I’m never able to get out of debt. This self-generated fear doesn’t spark the same kind of immediate fight-or-flight response that true danger does, but our bodies experience the same chemical reaction. It’s not as immediate; its more constant and taxing, and it impacts our ability to make good decisions where money is concerned.

Most of our money worries, though, are simply F.E.A.R, False Evidence Appearing Real. I have countless examples culled from my years of financial coaching.

FEAR example #1: If I lose that big client my business will fail.

FEAR example #2: If I leave my spouse who I’ve been unhappy with, I’ll not have enough money to live on my own.

FEAR example #3: If I don’t keep up on my overwhelming credit card payments, I’ll never be able to buy anything again.

We get so stuck in the worry and the future outcomes that we shut down and don’t take action. But for all of these examples, and so many more, the what-if’s aren’t real. They’re false. There is no way you know the future outcome of any worry, and when it comes to monetary worries, we tend to just dig ourselves into inaction.

What if your money fears were like Halloween? What if you knew that that vampire on your doorstep just wanted some candy? What if you knew that whatever happened to you, it would be alright? That there was no reason to allow your brain to go into the flight-or-fight response that it does when we worry?

What if for FEAR #1 you lost that big client and you immediately got three better ones?

What if for FEAR #2 you left your spouse, moved into a friend’s spare room and sparked a new passion for a hugely profitable career?

What if for FEAR #3 you stopped paying your credit card debt, because it was truly so overwhelming you would never be able overcome it, drew a line the sand and committed to never  borrowing again, allowing you to live worry free and eventually paid off all of your old debt?

Over and over I’ve seen people’s money fears turn into money wins. Often, it’s the thing someone is the most worried about that is the thing that sets them free. What in your life could you suspend disbelief about, and trust that something wonderful will happen, rather than something scary?

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

We teach. We inspire. We support. We help people change their lives by improving their finances.

Death and Taxes

We all die. It’s the one certainty in life. But, I don’t want to think about it. Especially not when it comes to my loved ones. If I don’t want to think about it, then I don’t want to talk about it, and I definitely don’t want to plan for it. 

But just like all things, the more we ignore it, the worse it gets. 

So here goes… 

First, I hope that all of us and all of our loved ones live long and happy lives. 

Turns out that thinking, talking, and planning for my death is easier than thinking of my loved ones passing. So, I’ll start there. I suppose the only reason I care to plan, is because I want my loved ones to be taken care of, as much as possible, if I’m no longer here. The best way I can do this is to have my affairs in order. 

Daily Stuff 

I manage the household finances. My husband knows where everything is, but not like I do. And if I’m no longer here, I want to make sure that he still has electricity and internet; which means he needs to know exactly what bills we have, who to pay, and when they’re due. So, we have a spreadsheet that lists all accounts and relevant information. The idea is that he could just go down the list and everything would get paid. But if we both die, no one else knows…

           I will share my account list with our parents. 

Big Stuff 

I don’t have much, but I have something, and I want that something to go to my loved ones. I don’t want the courts to decide for me and I don’t want it to go to the government. I have a will…but it was written on an Indian train on very little sleep…Time to rewrite. 

A couple of years ago, my husband and I went through all of our accounts to ensure that we’re both on all of them and that beneficiaries are listed where appropriate. Except there’s that one account… 

My husband has mentioned creating a trust…We should look into that. 

The other big thing is my health care directive. It isn’t money related, but it’s important to make sure I get the quality of life that I want when I can’t speak for myself. Apparently a new and improved form just came out. Whoopee (written with sarcastic font). 

           I will write a proper will and share with my husband and parents. 
           I will add husband to that account. 
           My husband and I will research creating a trust. 
           I will update my health care directive. 

Now I need to make sure that I do the things that I’ve said I’ll do… 

           I will send this blog to my husband and parents. 
           I will finish these in 30 days. Due November 29, 2013. 

I know that this is a basic estate plan, but better than nothing. Want to know what the experts recommend? CNN Money 101 - Lesson 21: Estate Planning

Next, I need to talk with my loved ones about their plans...make sure I know everything I need to know to ensure that they get what they want. 

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
We teach. We inspire. We support. We help people change their lives by improving their finances.

Happiness or Fear?

I’ve been listening to a podcast series on happiness by Tara Brach, a psychologist and teacher of Buddhist meditation and spiritual awakening. One of her points is that because of the way our minds fixate, and thus create patterns in our minds, we can actually make an impactful difference in how we feel simply by paying attention differently to our thoughts. The more you have fear-based thoughts or worry, the more likely your mind is to keep generating fear. By shifting our focus, we can cultivate a capacity for our own happiness. 

How does this relate to money? Well, many of us walk around worrying about money, but not taking action. It is our default to worry, and with money, that means walking around worrying about not having enough money in our checking account, or enough at the end of the month, or enough for the holidays, or enough for retirement. For many, these are constant fixations or tapes that loop in our minds. We might not be actively worrying about it, but under the surface, it’s constant. 

She makes the point that the more we focus on the things in our life that aren’t working, the bigger they become. I’ve worked with many a person with financial struggles that proudly tell me “I check my bank balance every day.” To them, it is proof that they are trying to be responsible and overcome their issues. 

I’ve decided that checking your bank account balance every day is rarely a healthy practice, especially for those who are experiencing financial challenges or trauma, precisely because of the point Tara Brach makes. By fixating on the worry of it all, we scare ourselves into inaction and overwhelm. My advice to those who are “daily balance checkers” is to choose a specific day and time each week to check their balances, ground themselves in their money plan for the week, and then let fixation go. 

There is nothing positive that comes from the daily checking of your balance. It’s actually not changing your financial position for the positive. You would be far better off spending that time earning more money. Or, from Tara’s perspective, you would be far better off simply focusing on something positive. 

What would happen if you spent those two minutes every day:

• writing down five things you were grateful for about your money, or 
• transferring $1 into a special savings account, or 
• looking at how much you’ve paid off on a credit card you’ve been focusing on, or 
• reading two pages of an inspirational book on prosperity, abundance or even happiness? 

What could you do to replace the anxiety and worry that you carry around with you about money? Is there an area of your financial life that is positive that you can focus on instead? Sometimes it takes some work to identify those areas, but almost everyone has at least one area of their financial life that they excel at, whether that’s the ability to earn money, or the ability to live frugally, or being a natural saver, or simply being good with numbers. Most of us don’t excel in all areas, but almost all of us excel in at least one area. 

 Are you willing to cultivate a sense of happiness around your money?

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
We teach. We inspire. We support. We help people change their lives by improving their finances.

Stop the Money Stress!

We all have stress about money. If you have loads of money, you worry about losing it. If you have a little money, you worry about not having enough. If you’re somewhere in between, you want more. Money, money, money.

It doesn’t matter if you believe that "money is the root of all evil" or that "money = happiness." Money is necessary in our society. We all want different things when it comes to our money. The one thing we all have in common, is that we don’t want to stress about it.

So, how do you deal with your money stress? Do you stick your head in the sand and hope it goes away? But every month, it’s still there...eating away at you...But you manage, because you’ve gotten used to it. We’re adaptable creatures. If we live a certain way, for a certain period of time, it becomes normal. That doesn’t mean that it’s ok.

We all have stress about money. And the more we ignore it, the worse it gets.

I used to have an ad on my fridge of two people having coffee that said something along the lines of “you don’t need a chill out album or yoga…sometimes you just need a conversation.” This hit me like a brick wall. At the time, I was all about dealing with my stress by relaxing, but it wasn’t doing it. So, I tried a conversation. And that was just the beginning. Dealing with the cause of stress is the best way to get rid of it.

Do you want to get rid of your money stress?

•       Talk about it.
•       Track your numbers.
•       Know your goals.
•       Make a plan.
•       Take action.
•       And make sure someone is holding you accountable.

This list is easy for some, but not for others. We’re here to help. But you have to want it. It may be uncomfortable at first. It will get easier. You will feel better. You will make progress.

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

We teach. We inspire. We support. We help people change their lives by improving their finances.

Money Fears: Making the Wrong Decision

Have you ever thought about how much money you spend every year because you were afraid to make a financial decision? And it’s not just financial decisions, but all of those other decisions we make: moving, changing service providers, switching policies or any of the other decisions we make every day that impact our bottom line.

I know exactly how much I spent this year because I was afraid to change life insurance carriers: $516. I’ve been meaning to change for quite some time as I’ve watched my rate climb from $28 to $33 and then finally to $99 per month. Partly it’s just the annoyance of it all: the paperwork, the medical tests and the endless questions. But part of the avoidance is unfounded fear. What if I don’t pass the medical test? What if moving away from the blue chip company I’ve been with forever turns out to be a bad idea for my beneficiary? What if I make the wrong decisions about the distribution of the proceeds? What if something goes wrong and then I have no life insurance at all?

I realize that these fears are mostly unreasonable, but in my years of talking to others about why they don’t make movement on financial decisions, the reasons are usually peppered with unfounded fears. And of those fears, many are often “the unknown.”

In our Finance Boot Camps, one of my favorite questions is “what would happen if you did nothing?” It’s always a bit of a startling question, because who ever brought the topic to the table that session obviously wants to do something. Asking someone what would happen if they do nothing is a supportive slap in the face. “I’d continue to pay $516 more every year, and probably even more as I reached 50.” That’s not much of a decision. Move life insurance companies.

Over the past few years, I’ve seen this play out many times over with people’s homes and underwater mortgages. Their logic is often sound: they want to be responsible for the mortgage they signed on the dotted line for. There’s a flip side to the logic, though: is it sound to pay tens of thousands more than the value of something? If your mortgage is in the poor parts of Detroit, the decision would be easier. But for those in better markets where values dropped, but not by as much, what is the right thing? And how much of decisions, or indecisions, are driven by fear of the unknown?

My most frequent advice is “do your numbers.” Writing your numbers down, looking at what will happen in the future if you do nothing, looking back and becoming clear about how much you paid for something that you didn’t make a move on in the past brings clarity to your decision, and takes a level of fear away. Once I sat down and penciled out my insurance numbers, it was obvious that it was past time to make a move.

Do you have any financial decisions you’ve been avoiding because there’s some fear floating around the issue?

-Stacey Powell

Getting the Life You Want

Before I met my husband, I had a series of unsuccessful relationships. Wait, that’s an understatement. At our wedding, all of my friends said that they never saw this day coming. How could they? I never thought I’d get married. I never wanted to get married. That’s what I wanted, so that’s what I got. A whole string of relationships that were doomed from the start.

After one relationship in particular ended, it dawned on me that that I didn’t have any clue what kind of person I wanted to be with and I was questioning my leave-it-to-fate approach. 

So, I sat down and wrote a list of everything I wanted in a man. The list was front and back; ranked in order of importance; organized and disorderly at the same time. It took months to compile. Traits were crossed off, rewritten, and then added again in the margins. It didn’t matter what it looked like, it mattered that I knew, for the first time ever, what I wanted in a partner.

A month later, I met him. It wasn’t love at first sight. We worked together and became friends. After a few months, we went on our first date – it was the best night of my life. Out of complete and utter disbelief, I reviewed my list after our first date and checked off ¾ of my wants. After a month of dating, we were considering moving in together, so I went back to my list, you know, just to double check – sure enough, I checked off the remaining wants, except for two. One was that he didn’t have any tattoos – I could live without. And I don’t remember the second one…obviously it wasn’t a deal breaker at the time and hasn’t been an issue since.

What does this story have to do with money?

That list, made me realize that I need to know exactly what I want in every aspect of my life. If I don’t know what I want, how am I supposed to recognize it when it’s right in front of me? Or how am I supposed to work towards something if I don’t know what it is?

On the one hand it has made me a bit of a control freak…I have a spreadsheet for a number of things that most people would consider crazy. But on the other hand, I know that the only constant in life is change. My lists are just an outline of what I want when I create them. My wants change often. My lists are updated accordingly.  

So, when it comes to my money, I have a series of spreadsheets that make up my life map: career, investments, retirement, etc...For instance, my career map includes my perfect job list and a projected trajectory of my lifetime earnings to reach my retirement goals. As for savings, I have a projected expenses spreadsheet to make sure that as we earn more, we save more, not spend more.

My investments spreadsheet includes the real estate that I want to buy, when (based on estimated market crashes), for how much, and at what price point I would consider selling each property.

While I used “I” and “my,” that doesn’t mean that my husband and I didn’t sit down and figure all of these things out together. The first and most important thing we did, was we separately wrote down our life goals. Then we compared our lists. Luckily, most were the same or at least similar. We discussed, ranked and compromised. Then, we came up with the strategies to reach our goals. 

It doesn't sound very romantic...It's not. It's life. But remember, behind all the numbers are goals and that's just another word for dreams. 

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
We teach. We inspire. We support. We help people change their lives by improving their finances.

Money Fears: Living Paycheck to Paycheck & the Government Shutdown

At some point in our lives most of us have lived in the fear of living paycheck to paycheck. We all know the risks, yet the majority of Americans live with less than one month of reserves set aside. For many, their "reserve" is their credit cards, for others it’s tapping into their home equity, and for others it's mom and dad (yes, even at 30-something, 40-something and 50-something.)

For many, though, there is no room on the credit cards, no home equity and no one to turn to. They are just one major car repair, health problem or job loss away from not being able to pay their mortgage or rent. This is the stuff that ulcers, sleeplessness and crippling anxiety are made of. Stories of people slipping into homelessness frequently begin with just one unexpected major event that triggered the collapse of what was a shaky financial foundation.

If you’re a federal government employee, though, you probably sleep a little better than most. You probably feel fairly secure that you have a good job, that your employer won’t fold, that your income is secure. Until now that is. The government shutdown is creating massive ripples throughout America. If it doesn't pull on your heart strings quite so much when you envision a $90,000/year employee missing one paycheck, think about the minimum wage maids and maintenance workers stuck in the Grand Canyon. How long can they go without their paychecks and still be able to put food on their family’s table? Where can they turn to for help? Not their neighbors, because they don't have a paycheck either. And while yes, the $90,000/year employee SHOULD have reserves set aside, the truth is that many don't. We've all been there, done that, and there are thousands of them that right now, today, are scared.

How do you ensure that you never have to live in the fear that thousands upon thousands affected by the government shutdown are living in this month? Go open up a new savings account, label it "Emergency Reserves" and move some money in there. If you think you can't, put $5 in there. Just take action. Every month, keep moving money in. If you can’t, still put $5 in there. Don't touch it, no matter what.

I know this sounds so much easier than it is for many people. I know, because I've been there. When I was walking through a particularly challenging financial time in my life, I had a wise money mentor. Every time something would go wrong, I'd call him for advice on how to fix the problem. He refused to talk to me about how to "fix" the problem. Instead, he'd trace back to the core of the problem and advise me to start there. In the beginning, it just annoyed me. "I think I know that if I had six months of reserves in the bank I wouldn't be struggling with this major car repair, but that doesn't help me right now!" He held firm. He'd just tell me "go put some money in reserves."

Annoying.

As time went on, though, and I lived with the annoyance and followed his advice, I could see how focusing on the core of the issue rather than the symptom started to have a great impact. Over time, I became better able to weather financial storms. Over time, the financial storms started to feel like financial flurries, and then just financial breezes.

My hope for all federal employees, contractors and others affected who are living in fear right now, uncertain of how they are going to weather the shutdown, is that they take this time to trace back to how they could ensure that the next time this happens, they'll have less fear. They'll be more prepared. They'll know that they took some action, no matter how small.

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

Are you ready to reach your financial goals? Get motivated. Get support. Get results!

Buying a Car...Ugh...

I used to love buying cars. I used to buy a new-to-me car every couple of years. And practice makes perfect. My friends even took me with them to help pick a car and haggle. 

But now...It's been 10 years since I bought a car. And I'm overwhelmed. 

New or used?
Buy or lease?
Finance or cash?
Want vs. need?

My brain tells me buy a used car with cash that's reliable. That means no bells and whistles and a level of uncertainty, because the car will be at least 10 years old. 

The external world (a.k.a advertising) is telling me that I'm at a point in my life where I deserve more; that my car is a reflection of who I am and how successful I am; and I need a new car, all of the amenities, with the highest possible gas mileage, that suits my lifestyle. 

But no amount of advertising can change the fact that a car is an expense. A liability. And at the end of the day, I need to minimize the cost of this item. But I don't want to minimize my upfront cost so much so that I incur a lot of back-end expenses (and time) at the mechanic. 

Best way to minimize the overall cost, is to buy used and let someone else take the big depreciation hit. And honestly, I'd prefer a car that has a few dings and scratches, because it looks stressful, constantly worrying about keeping a car perfect. 

New car out. Used car it is. 

I'm bombarded with advertising that gives me numbers that challenge everything I think I know. Lease a car for $2,000 down and $99 a month! What? Really? How? I'm interested. No, wait. I know a lease means I'm just renting the car...but that could actually work for me, right now. But they want a 3-year commitment...that doesn't work for me.

Leasing out. Buying it is. 

My car cash savings is enough to buy me a good enough car, but there will most likely be some visits to the mechanic. Which I'm not keen on. Then, I see ads that confuse me again because they're telling me I can buy a new 2013 car for 0.0% APR. That's free money! I could save/invest the money I was going to spend and make money! That would be awesome! And I get a brand new car. Wait. The fine print says I have to pay $16.99 per month for every $1,000 I borrow. Isn't that basically 1.6% interest? How is this not false advertising? 

New car out again. Mostly cash, plus a little financing to get a slightly newer and slightly nicer car. 

We have our budget. We know we want a hatchback because it fits our lifestyle (this is the only part of car advertising that works for me). Now we need to sort through the comparisons: reviews, true-cost-to-own, insurance, fuel costs, maintenance, make, model, etc...

Do you love your car enough to recommend it? 

-Leah Schonlank

The other big determining factor to consider when buying a car is how long you want to keep it. But that's a whole other story. 

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

Are you ready to reach your financial goals? Get motivated. Get support. Get results!

The Big Scary: Talking About Money

We don’t talk about money in our society. We’d rather talk about our private medical conditions or sex lives. We’re reticent to share the good news, lest we sound like braggarts, and we certainly don’t share the bad news. It’s our little secret. We see our neighbors look so financially successful with new cars, home remodeling projects and exotic vacations all the while worrying about our money and wondering why it seems so easy for others. 

One silver lining of the recent Great Recession is that many people had to start talking about their financial woes. Prior to the crisis, many thought they were the only one with money problems. They assumed their neighbors and coworkers with their new cars, bigger homes and exotic vacations could afford them. They thought it was only them struggling financially to ‘keep up with the Jones.” 

None of us were prepared to talk about the realities of our financial situations and the potential consequences of living beyond our means. We were the only one we knew that ever paid a bill late, the only one to have mounting credit cards debt looming over our heads, because no one else was talking about their truth. 

As more and more people reached their financial breaking point, often in the most visible way possible, losing their homes, we all started to realize the prevalence of financial struggles surrounding us. People began to talk more, the media began telling more stories and many began to realize they weren’t alone. 

The majority of us don’t even talk to financial professionals. Only 21% of us households in the United States use a financial planner. And while many more use financial professionals to file our taxes, that interaction rarely includes conversations about our spending, earning and savings habits. It’s unfortunate that tax professionals rarely take advantage of the opportunity to talk to us while they, once a year, have a magnifying glass on our finances. 

Because we haven’t built a comfort level of talking about money, we struggle to talk and teach our children. As our parents grow older and end of life financial conversations become pressing, for many it is still a subject that is taboo and difficult to broach. 

Over the years I’ve held Finance Boot Camps that put people in small groups and have them talk about, and work on, their financial issues. In the first few sessions of each group there is a lot of fear of sharing, but as time goes on and each member shares a little more, a comfort level builds and people break away from their fear. One of the most exciting moments of the groups is when I can hear someone who previously believed they “were horrible with money” step up and offer great advice based on something they’ve done well in their financial lives. It’s the moment that talking about it with others helps us begin to see that how we do our money is like everything else in our lives; some parts we do well, and others we need help. 

Where do you seek help with your money issues?

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

Are you ready to reach your financial goals? Get motivated. Get support. Get results!

Melbourne, Australia on $50 a day

I normally travel to developing countries, where traveling is fairly inexpensive, even cheap in some countries, but I just got back from one week in a very expensive city, in an expensive country - Melbourne, Australia. 

How expensive? Well, the currency exchange rate is US$1 to AU$1.07. So, basically we pay slightly more than their price. Here are some of the prices that blew me away: a pint of Ben and Jerry's ice cream for $12; a pint of beer for $10 ($5 during happy hour); and a pack of cigarettes for $17. Ouch! Lots of great reasons ($$$) not to have any vices. 

Here are some of the money saving tips that helped me stay within my $50 a day budget:

Spending

• Just because you eat it, buy it, or do it at home, doesn't make it a given when you're traveling. If it's more expensive at your travel destination than at home, it's time to reconsider how important that thing is to you and possibly find an alternative; you may be pleasantly surprised. 

Money

• Check with your bank(s) and credit card(s) to make sure that they don't charge you international fees. If they do, consider opening a new account that doesn't or choose the lesser of the evils. 
• Exchanging currency is big business for companies. Exchange rates vary from one company to the next. But don't just go on the posted exchange rate, because they also charge a fee. This fee is negotiable. 

Lodging

• Always check prices online. Deals are everywhere, but rarely at the front desk. 
• Hostels are a great way to meet people and save money on lodging. If sharing isn't an option, most of them have private rooms and they're normally cheaper than hotels. 

Transportation

• Public transportation is a great way to get the local experience - The good, the bad and they ugly. 
• Local buses are a great way to see a city for a fraction of the cost and they stick to a route, so you don't have to worry about getting off track. And if all else fails, the bus will always take you back to where you started...unless of course, it's the last bus of the day... 

Communication

• Travel with a device that has WiFi access. There were plenty of free WiFi spots all over town. And if I wanted it at my hostel, they were charging $4 per hour to use their computer or $4 for a day for WiFi. 
• Skype is awesome! Free computer to computer calls and cheap rates for calling phone numbers from your computer/mobile device. 

Luggage

• It's amazing how little you actual need. It's also amazing how much it costs for your luggage to travel: airline baggage fees, airport luggage carts, taxis, car rentals, portage, etc...
• I've traveled around the world for months at a time with just a carry-on sized backpack (32 liter) and a small messenger bag. It's doable, liberating and super cost effective because you aren't ruled by your things. 

My $50 a day Budget (give or take):

         $25 a night hostel bed
         $6-8 for breakfast
         $6-8 for lunch
         $8-10 for dinner
         $5 or less for everything else, depending on how much I spent on food.

Basically, I eat less, I walk a lot, I enjoy free entertainment, and I don't party. It's not for everyone, but I always enjoy myself.  

Here's to your adventures! 

-Leah Schonlank

35 countries and counting

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

Are you ready to reach your financial goals? Get motivated. Get support. Get results!