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Audio Financial Honesty

Do you remember when you turned 18?  Remember how excited you got?  Or maybe it was 21.  In any case, you became “legal” in some new way, whether it was the legal voting age, or drinking age …

Well, I was as excited about turning 65 recently.

You see, it’s all about healthcare.

I’m a solo entrepreneur.  And although I have absolutely no health issues, I live in a state (Florida) where we carry the burden of a large older population and a high percentage of illegal residents.  (I once had my brother, who lives in Idaho, get a health insurance quote for someone with exactly my demographic profile and, at that time, the premium in Florida was nearly three times the premium in Idaho for the same insurance.)

When I lost my business and my house at age 53, I also lost my health insurance.  I went “bareback” for a few years as I rebuilt my life.  But for the past eight years, I’ve had good health insurance.  I’ve had a $2,800 annual deductible that I’ve never exceeded, so the insurance company has paid for nothing.  And, the premium that started around $600 a month?  It has stair-stepped up each year.  And it has skyrocketed in the past two years (thanks to just the hint of Obamacare) to around $1,200 a month.  I’ve paid a total of $81,600 in premiums over those eight years.

I also added a Health Savings Account (an “HSA”) to the policy, so I paid an additional $2,800 each year into an account similar to an IRA, but usable only for health-related expenditures.  Most people stop after paying in the first $2,800, once they know they have enough to cover the high deductible.  But I kept adding $2,800 each year.  About money, they say, “Out of sight, out of mind.”   It was like a forced savings account.  There were months when it really strained my finances, but I always found that payment somewhere.  And I never touched the account.

Today that account has about $22,000 in it.

Medicare to the Rescue!

Now … ta-dah … in comes Medicare.  I’m so excited I could set off fireworks!

For a top-rated plan through AARP and United Healthcare (my old insurer), my monthly payment will be about what I used to put into the HSA.  (And the $1,200 monthly premium goes away.)

I was going to pay that Medicare premium out of the HSA, because it qualifies as a health-related expenditure and protects the tax-free status.

But I’m not going to do that.  I’m going to “find” the premium as I always have.

And I’m not going to take Social Security until I absolutely have to … at age 70 … when my monthly check will be set as high as it possibly can be for the rest of my life.

Why, you ask?

Because I don’t know what Obamacare is going to do to costs, including for Medicare.  And I don’t know what’s going to happen to Social Security.  And I don’t know what’s going to happen to inflation … and our currency … and our stock market … and the price of gold … and everything else.

Since nothing in our economy is following any of the traditional theories of economics, we may be fine in the long run.  Or we may not.  Things could still go really wonky, especially since we’re so interconnected with all the other countries’ economies.

And I don’t want to do anything to jeopardize my long-term financial peace of mind.  As you know, that’s my mantra.  My sacred space.

I’m willing to make some more sacrifices today … not taking the easy way out … to ensure that.

Why the Financial Honesty?

Why am I sharing all this with you?  For two reasons:

1.     Because, whatever age you are, know that one day you’ll be doing these same calculations, so you may as well start early, getting a head start on when I finally got serious, well into my fifties.

2.    Because I keep telling you that you have to get comfortable with numbers, living with financial honesty and free of any judgment based on what the numbers are.  Most everyone else talks in hypotheticals, not willing to give you real examples.  I’m just walking my talk.

My hope is that by seeing someone’s actual numbers, concerns and actions, it will trigger a thought or two about your own.

Let me know in the Comments section below if it did.

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Bio: Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial peace of mind.

The post Financial Honesty: Talking Real Numbers appeared first on Money expert, personal money mentor, financial independence, women and money.

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Audio Stories Not Stores

Maria Bartiromo of CNBC sat down to a 4-course dinner with several young entrepreneurs in their 20s and 30s who are rewriting the future of U.S. consumption.  Together they represented half a billion dollars in venture capital, provided by the venture capitalists also at the table.

They’re seen as being part of a movement … a movement where, in one of those wonderful reversals where we wise older ones may well have a lesson or two to learn from the next generation.

They call it a “sharing economy,” one that is driven by “collaborative consumption.”

What does that mean?

Well, in the post-war economy that many of us grew up in, by standardizing everything through production lines, everyone could have more than they ever dreamed.  Consumerism was born.  Sixty years later, every nook and cranny of our homes (and storage units) is filled with stuff.

Add to that the Chinese ability to replicate absolutely anything at a price everyone can afford and there is no longer anything much to strive for.  We have accumulated a lot, but then so has our neighbor.  (And probably a lot of the same stuff.)

Enter authenticity.  And a drive for uniqueness.  Add to that a disdain for traditional consumerism.  And you get this new trend …

As part of the redefinition of the American Dream, home ownership fell off its pedestal as the ultimate goal.  Instead of houses being the perfect store of value, the last five years have shown how vulnerable their value can be.  So many people now find themselves with houses worth less than their mortgages.  As a result, today people who would normally be purchasing a house, especially younger professionals, are renting.

Instead of gathering assets—and “stuff”— they are giving priority to gathering experiences.

And the tech-savvy young entrepreneurs around that dinner table have stepped up to make it easier to fill our lives with experiences … using technology.  Whether it’s a lodging rental site that helps them spend a few days in someone else’s home (no, not the old house exchange), or using someone’s nice car that would otherwise sit parked for days on end, or renting a designer dress for a few days at a price they can afford, they are living “Cinderella” moments.  Or “Prince Charming” moments.

As one of the entrepreneurs said:  after a long work week, she has no desire to go into a store on Saturday to buy something.  (Besides, anything she really needs she buys with a few keys strokes on her smart phone.)  She’d much rather have a memorable experience.

She said, “I prefer stories, not stores.”

Maybe it’s a private chef through on-demand site Kitchit.

Or an instant-access private car and driver (instead of a cab) at the snap of the fingers in any of 21 cities through Uber.

Or replacing a cookie-cutter hotel room with an interesting stay in a home through Airbnb.

Or being one of 3 million women, mostly under 35, who have already rented an outfit for a few days through Rent the Runway.

What they’re actually doing is “buying on a temporary basis.”  And enjoying personal, authentic experiences they might otherwise not be able to afford.  You could call it the Access Economy instead of the Ownership Economy.

And the trend is growing.

How will this affect the rest of us?

Well, if we look carefully we might see another trend among our peers, one in which people are downsizing.  Living minimally.  Living more intentionally.  More authentically.  As such, for us to decrease our level of purchasing is perfectly in keeping.

So next time you’re thinking of buying something, think about whether there is a way to access it without acquiring it.  And with the money you don’t spend, think about what you can do that adds a layer of excitement or uniqueness to your life.

Remember:  stories … not stores!

Let us know in the Comments section below if you’ve seen a shift in your own priorities, away from physical things … and towards activities that add joy to your life.

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Bio: Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial peace of mind.

The post Lessons from the New Generation: Stories Not Stores appeared first on Money expert, personal money mentor, financial independence, women and money.

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Moment of Awakening: Time to Fish or Cut Bait

Money feels like background noise until one day when it takes center stage.  That’s what I call your “Moment of Awakening” when you’re left trying to figure out what to do next.

What’s a Moment of Awakening?

Well, let me put it all into a timeline for you.

Our lives are divided into three major stages, interrupted by a Moment of Awakening:

• Stage of Preparation: Birth to Twenty-Something
• Stage of Productivity: Twenty-Something to Fifty-Plus
• A Moment of Awakening
• Stage of Values: Fifty-Plus and Beyond

Stage of Preparation: Birth to Twenty-Something

From the time you’re born until you reach your early twenties, you’re in an absorption period, where you suck up all the knowledge, experience, bruised shins, life lessons, boundary-testing, schooling and forced discipline you need to prepare for the next stage of your life.

This is when our parents put their greatest imprint on us.  It’s also when, despite whatever good intentions they might have, they unknowingly plant ideas and beliefs in our little brains—with no clue to what damage they might be doing.

So much of what we absorb from our parents (or parent) can be good.  It can protect us from danger and prepare us for adulthood.  But so much can just be them passing on their misperceptions—which they got from their parents—and on it goes.

But we’re not just affected by our parents.  All authority figures—whether it’s other relatives, friends’ parents, teachers, neighbors or religious leaders—are busily putting their mark on us.

All that’s important now is to realize how much “forming” was going on in your younger years, whether formally or informally.  All that accumulated learning and imprinting was preparing us for the next stage, the one in which we applied all we learned.

Stage of Productivity: Twenty-Something to Fifty-Plus

Once the preparation stage is over, our core productive years begin.  This is where we start putting into practice whatever we’ve learned up until then.  It’s where we start working and adapting our learnings to actual job requirements.  It’s where we become parents ourselves and launch into the preparation stage all over again, this time with our own children.

Each of us moves through these years making decisions based on good or not-so-good information.  If you think of each decision you’ve made (and not just the major ones) as a fork in the road, you’ll see that some seemingly minor decision made one day sent your life down some path that you would never have imagined.  When you look back from where you are today, in hindsight you can find those crossroads or forks.  And if you fantasize how your life would look today if you had made a different decision, it’s mind-boggling.

So we go through these highly active, productive, decision-laden years earning money, spending money, raising kids, losing jobs, buying houses, marrying, divorcing or staying single, sharing expenses or carrying the burden alone, hoarding pennies or frittering dollars away, being a sensible investor or turning the financial markets into one big crap shoot.

For about 30 or 35 years, we move through the Stage of Productivity, or what is like a first round of adulthood, almost on automatic pilot, almost lost within the process of everyday living.

And then one day … it happens.

We have a Moment of Awakening.

Your Moment of Awakening

Everyone’s is different.  It might be the day your husband asks you for a divorce.  Or the day your boss announces the company is going bankrupt and your pension just imploded.  Or you have a health scare when you find a lump in your breast—regardless of the outcome.  It might be the day you realize you’re fully in menopause and you mourn your body’s reproductive magic.

Or maybe something has just been bothering you, niggling at the back of your mind, and tonight you sit bolt upright in bed and say, “Good God, where have the years gone?  I don’t have anything saved for retirement.  If I don’t do something, I’m going to end up like a bag lady pushing a shopping cart through the streets!”

Whatever the trigger is for you, after your Moment of Awakening nothing is ever the same.

It’s the moment when you suddenly go from believing that life stretches to infinity, with no end in sight, to where you see that life is finite.  You’ve faced your own mortality, perhaps for the first time.

But you also know that times have changed, and that women born when you were are expected to live easily into their eighties or nineties.  This means that, while you’re looking at your “end game,” it’s not arriving for another 30 or 40 years.  And the question is whether or not you’re financially ready to deal with this new reality.

At this time you have the power to write the storyline of the next stage of your life:  the Stage of Values.

Stage of Values: Fifty-Plus and Beyond

In the past, as we looked beyond our working years, we used to think in terms of retirement.  That definition came from what our parents experienced, what I call “The Old American Dream.”  It was based on life-long employers and pension programs.

But the American Dream has been redefined over time.  And, with our easy job hopping and love for instant gratification (hence, less savings), we helped redefine it.

Now it’s time to roll up our sleeves, look at creative ways to take what we have (or have left) and redefine our later years as well.

We started out with so many hopes and dreams.  (And I believe we still carry many of them within us.)  For many, this second adulthood is when we will get a second chance to play out our core values and fulfill our dreams, maybe slightly redefined. 

The question is whether we’ll be able to afford to do so.  And much of that depends on how we reacted to that Moment of Awakening.

Let us know in the Comments section below if you’ve had that Moment of Awakening and how that changed your life.

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Bio: Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial peace of mind.

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Audio Your Finances Your Life Not Mine

“I’ve read several of your articles, including your story, and I realize I’m not you.  So can I do what you’ve succeeded in doing with your finances if we’re so different?”

So started a conversation with a new client recently.  And to answer, I borrowed generously from Paulo Coelho, in his new book Manuscript Found in Accra:

If they [your coach in this case] once took a wrong and dangerous path, they will never come to you and say, “Don’t ever do that.”

They will merely say: “I once took a wrong and dangerous path.”

This is because they respect your freedom, just as you respect theirs.

…

Avoid those who believe they are stronger than you, because they are actually concealing their own fragility.

Stay close to those who are not afraid to be vulnerable, because they have confidence in themselves and know that, at some point in our lives, we all stumble; they do not interpret this as a sign of weakness, but of humanity.”

What I Write About

I write about how I messed up (and still do!), what I did about it and what worked for me.  It’s called “making my mess my message.”  Parts of that will work for you.  Parts will not.

But I also write about the experiences of all those I interact with—especially those who work with me to turn their finances around, because they teach me new wrinkles.  Once they have success with a particular technique or strategy, I integrate it into my writings so you have that option as well for your finances.

I’ve had readers comment that I come at the same issue from so many different directions and that they appreciate me giving them choices … as well as second or third opportunities to deal with an issue they may have been avoiding.

You see, I too have had to get hit over the head several times before I woke up to some unhealthy behaviors I had around money.  So I realize the value of coming back to fundamental issues again and again.  Besides, we don’t all hear things the same way.

My hope is that I never look upon any money behavior with judgment.  We all came to have our behaviors for different reasons, many of which had nothing to do with us.  Instead, many behaviors are inherited or carried forward from childhood, when we had little control over the messaging we were absorbing.

What I Believe

In short, I bring with me three underlying beliefs:

1. We each must take personal responsibility for our lives.  In the end, that responsibility belongs to no one else and relinquishing it is like rolling the dice in a craps game: you have no control over the outcome.
2. There are many roads to the same destination, including that of financial peace of mind.  None are wrong and none are right; they just take more or less time and effort.
3. We are all dealt different hands in life and have different skills, but we all deserve the exact same financial peace of mind … however we define it.

I would hope those are the beliefs of any coach or advisor you align with.  Here’s what that means:  it means I cannot do the work for you, I cannot prescribe just “one right thing” and I have no right to limit in any way what your outcome might be.

On the other hand, there is just one person who can make anything happen, and that person is you.

Let me know in the Comments section below if you see mentoring, coaching or advising (whatever term you prefer) any differently.

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Bio: Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial peace of mind.

The post Your Finances: It’s Your Life, Not Mine appeared first on Money expert, personal money mentor, financial independence, women and money.

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Audio Women and Money Top 10 Things

For ten years now, I’ve studied women and money … and how they interact with one another.

I’ve watched, interviewed and coached women around their money.  And I was recently asked to come up with a list of the ten things that most upset me about how women deal with their money … things that I have a solution for.

Here they are … in no particular order:

1.    Women who jump into an entrepreneurial venture before they have clarity of what they need financially, how to get it and how to measure if they’re succeeding or not.

2.    Women who make really good money, blow it because they’re clueless (or in denial) about how money works and then complain that they’re terrified about retirement.

3.    Women who use credit cards like they’re real money, then find themselves mired in debt and facing disastrous choices (foreclosure, bankruptcy, etc.)

4.    Women who think they are entitled to a certain lifestyle, but never equate it with the personal responsibility that comes with affording it.

5.    Women who complain about others who have money … who think money is dirty … and who play the victim.

6.    Women who are afraid to do things differently, staying stuck in “this is how we always did it,” especially when that way is disempowering.

7.    Women who assume they are somehow second class citizens and don’t deserve to earn what men earn … or to thrive like men thrive.

8.    Women who let their husbands handle the money because “it’s a man’s job” and then are devastated when something happens.

9.    Women who assume a coach of some kind is going to find what motivates them and lead them to a million dollars … taking no personal responsibility for the process.

10.    Women who put themselves last on the list after their husbands, children and other family members; not only do they never nurture themselves, they never make any arrangements to be financially secure.

And then I have a BONUS:  Here’s one that shouldn’t even exist any longer … but that does:

11.    Women who think Prince Charming is still going to come along and save them.

As you look at this list, can you think of anyone who falls under any of the descriptions?  If you can, what if you pulled that person aside and gently tried to point out the dangers of that thinking?

Let me know in the Comments section below if you can think of any other money behaviors that you find worrisome or upsetting.  I’d love to hear them!

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Bio: Sharon O’Day combines a long, successful career in international trade development an MBA from the Wharton School and a lifetime of personal peaks and valleys to be an effective tell-it-like-it-is money mentor to women who are willing to do what it takes to be financially secure for the rest of their lives!

The post Women and Money: Top 10 Things That Really Upset Me appeared first on Money expert, personal money mentor, financial independence, women and money.

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Hallelujah I Have to Pay Taxes

Tax Day has arrived in the U.S.  The closer it got, the greater the gloom you could feel descending over people.  You see, many were struggling with the fact that they were going to have to write down and acknowledge how much they made last year, how much they took home … and how much they had to pay in taxes.  No more room for denial.

We face lots of resistance when it comes to being honest with our money.  Most of us prefer the woolly estimates we have in our heads based on the story we tell ourselves about our financial situation.  But that’s a discussion for another day.

Today we’re going to celebrate the fact that we need to pay taxes at all.  While we’re at it, let’s celebrate the fact that we have to pay a lot, if that’s the case … because the more we have to pay, the more we’ve earned.  (I’m assuming you used every legal means to minimize what you paid; there’s nothing patriotic about paying more than required.)

What makes me such a contrarian?  First of all, we live in a country that, despite its current contortions, is bountiful and ripe with opportunity compared with many others.  (Granted, several countries today are nipping at our heels …)  The underpinnings of such a place need to be paid for somehow.  Hence, we pay taxes.  But beyond that, think of the alternative:

If you did not have to pay anything to the tax man, it would mean you earned so little from all the various sources (earned income, interest, dividends, etc.) that—after deductions—you were virtually at zero.  That is not a place anyone would choose to be.

Does More Money Mean More Happiness?

Here’s an interesting fact, though:  if you earned that little, it would mean that with every additional dollar you earn, your happiness would increase.  However, that doesn’t hold true for all income levels.  How’s that?  Well, a 2010 study by Kahneman and Deaton shows that until you reach a level of around $75,000 in annual household income, your happiness increases with your income because you are able to cover more and more of your basic needs.

Why does that only hold to $75,000?  One theory is that once all our basic needs are met, somewhere in that $75,000 range, our spending patterns change.  We don’t freeze our lifestyle costs and bask in the peace of mind that comes from having excess income.

Instead, we start escalating the cost of where we live by changing neighborhoods and “moving up.”  We change how we dress and maybe where we buy our clothes.  We change how we eat, straying from our cautious buying patterns and filling our grocery carts with “wants” rather than needs.

What happens after that?  Here’s the slippery part:  unless we have a very healthy relationship with our money, we will increase our expenditures to match or exceed our income.

Our secret purpose is to keep ourselves in a comfortable psychological place.  If what is familiar is being under tremendous financial duress, we’ll keep ourselves there.  If we don’t feel we deserve the joy of financial security, we’ll be sure we don’t have it.

My Tax Day Wish For You

So here’s what I wish for you.  As Tax Day comes and goes, I wish for you that you’ve blown past that $75,000 threshold with the priceless clarity of what money means to you and what it does for you.

I wish that every extra dollar you had to pay the tax man reflected even more dollars set aside someplace safe.  I wish you the drive and the discipline to save enough to ensure many, many years of the financial security and peace of mind you deserve!

Happy Tax Day!

Let me know in the Comments section below if you think I have a real Pollyanna outlook on how and why we pay taxes!

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Bio: Sharon O’Day combines a long, successful career in international trade development, an MBA from the Wharton School and a lifetime of personal peaks and valleys to be an effective tell-it-like-it-is money mentor to women who are willing to do what it takes to be financially secure for the rest of their lives!

The post Hallelujah, I Have to Pay Taxes! appeared first on Money expert, personal money mentor, financial independence, women and money.

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My Peace Of Mind Is My Wealth

“So how will I know when I have enough money?” asked my new client.

Where do I begin?

I believe there are two types of people: (1) those who are forever driven by anxiety, competition and adrenaline; and (2) those who are seeking a place where the anxiety and adrenaline no longer play a role.

Today I’m one of the latter.

When I first started working, more was always better.  That motivated me through business start-ups and failures, getting degrees, fighting for promotions, quitting jobs—and countless all-nighters to meet ever more demanding deadlines.

Until I lost everything at 53.  (See My Story)

Maybe losing everything is what caused the change.  Or maybe it’s just something that creeps up on us women as we get into our fifties.

Whatever the answer, as I licked my proverbial wounds, examined what had happened so I’d learn the lessons offered and reinvented myself, I found my drive had changed.

No longer did I have to have the “right address” to impress anyone.  I was more content with a smaller footprint that would cost less and leave more money in the “disposable income” column.

No longer was “making millions” a motivator in and of itself.  Far more important was knowing exactly what I needed to have set aside to guarantee a safe and sound old age—and to add to it over time so those years can be richer and richer.

What had actually changed was my definition of “wealth.”  It was no longer how much I made each month or year compared to someone else.  Or whether the cars in the other driveways on my street were newer or older.  Or how many covered square feet my house had under the roof.

Suddenly the most important money-related goal was peace of mind.  Glorious peace of mind!  Freedom from financial worry.  The ability to pay my monthly bills.  And knowing that I’d be okay for the rest of my life.  I’d always have a roof over my head, food on the table and a glass of fine red wine to sip as I watched the sun set at the end of each peaceful day.

Early on, as I climbed out of the financial hole I had dug for myself and started rebuilding my business on a more solid foundation, “okay” looked pretty modest.  And from there, as more and more money is set aside and invested, “okay” means having more and more choices available to me of how I will spend each day, doing what pleases me at that moment.

Am I through building my nest egg?  Not at all.  But as good and bad things happen in my business—as they do in entrepreneurial ventures—I know that no matter what, I am assured peace of mind.  For life.

I recognize how individual the definition of wealth is.  It means something different for each of us.  For some it might have a number or a lifestyle attached to it.  For others, it might be an ever-growing, unreachable target.

But what has really surprised me is how few people ever take the time to consciously define the word wealth clearly for themselves.

So, I ask you, what does wealth mean to you?

Let us know in the Comments section below.

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Bio: Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret “weapon,” if you will, behind many individuals in high places. Yet she did! Since then, with her finances completely turned around, Sharon has gone on to interview countless women. She’s done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

The surprising answers are shared in her tell-it-like-it-is posts and articles. Today her mission is to show as many women as possible how to become financially free for the long term, through her coaching programs. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve … if they’re willing to do what it takes!

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Managing Money: When Less Is More (click)

When it comes to managing money, we hear a lot about abundance.  And prosperity.  And how we can have what we think about, if we just think long enough and hard enough.

There are two situations where that thinking may be a luxury we cannot afford.

Sometimes the wolf is at the door.  We are so far behind in our bills that we cannot see daylight.  It’s not just that the month is getting hard to close out.  It’s that something extreme has happened—a loss of the only income in the household or an investment wiped out in one fell swoop.  Maybe we’re about to face foreclosure … or bankruptcy … and by managing money differently we can alter the direction of our financial future by taking equally extreme action.

The other time is when we do that long-term calculation and realize that we cannot get from here—through retirement and old age—if we continue on as we are today.  (And the younger we recognize this, the better.)

You see, more often than not, our income forms a bell-shaped curve:  low in the early years, moving upward as we acquire skills and swooping upward as we gain traction with our expertise.  Then our income peaks and starts slipping down as our energy level can’t compete with the young ‘uns or technological change surpasses our ability to keep up.  The downward curve may be gentle, sliding us into retirement age, or it may be an abrupt free-fall.

In any case, when we do the dreaded “what-do-I-need-for-the-rest-of-my-life” calculation and are too far along the income curve to still change the outcome of that calculation materially, it’s time to look at drastic cutbacks.

Both situations are called “reality.”

Neither is fatal.  Nor is either one a judgment.  Each simply is.

Wolf At The Door

When the wolf is at the door, the cutbacks may be temporary, just long enough to get back in shape, back in balance, back to where we can afford the lifestyle we had enjoyed.

These cutbacks may entail all the niceties of life, the non-essentials.  Or they may mean a major downsize in our residence to get down to a monthly nut that we can handle.  Maybe we will stay here until we have the upward income thrust again and can afford to live how we see ourselves living in our mind’s eye.  From there, if we‘re managing money smartly and all goes well, we’ll thrive because what we had experienced was just a temporary setback.

[SIDEBAR: Just know that some people who go through this kind of drastic cutback never go back to where they were because they recognize that they’re actually happier with less.  Their happiness did not lie in all the “stuff.”  Bigger was not better.  But that’s a topic for another article.]

I Can’t Get There From Here

“According to data compiled by the Social Security Administration:

•    A man reaching age 65 today can expect to live, on average, until age 83.
•    A woman turning age 65 today can expect to live, on average, until age 85.And those are just averages.

About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.”

When we’ve done a calculation of what we have saved, what we’ll get from Social Security, what we expect our investments to generate … and how many years we have to cover according to that life expectancy … we’ll know what we have to do.

The question is:  Are we willing to do it?

What makes taking action easier is to recognize that certain parts of what we consider necessities today are actually expendable.  We kept accumulating over our lives, but rarely divest ourselves of things that no longer made economic sense.

• Summer houses that we used when the kids were young but that we don’t use because the kids are gone and our interests have changed.
• Houses that may be filled with good memories, but that are far too big for the number of people living in them now … and far too expensive to heat or cool.
• The third car that we kept for when the kids came home, but now they have their own cars.  And it would be cheaper to rent a car if they fly home.
• The “investment” we made in a vacation place that we haven’t been to in three years.

The list is endless.  Some are large items.  Some are small.  But they all cost money in ways of which we may not be aware.  And if we’re willing to let them go now, multiply that value by the number of years ahead of us and see what that amount could represent.  It could be life-changing.  Especially later.

While these changes are more permanent—not just taking a financial breather in order to rebuild—they represent a way of managing money that results in stress relief that almost always outweighs the perceived “sacrifice.”

Such decisions are very individual.  But so are the consequences.  So I ask:  what are you willing to forgo today in order to ensure a more “abundant and prosperous” lifestyle when your income-generating days are over?

Let me know in the Comments section below if you’ve been faced with managing money through either of these situations, and how that made you feel.

xxxxxxx

Bio: Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret “weapon,” if you will, behind many individuals in high places. Yet she did! Since then, with her finances completely turned around, Sharon has gone on to interview countless women. She’s done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

The surprising answers are shared in her tell-it-like-it-is posts and articles. Today her mission is to show as many women as possible how to become financially free for the long term, through her coaching programs. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve … if they’re willing to do what it takes!

The post Managing Money: When Less Is More appeared first on Money expert, personal money mentor, financial independence, women and money.

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Honoring Money

Oops, I had been outed.

I had been living a lie.

I say I honor money, have a healthy relationship with it, and yet my bills are in a favorite leather bill holder that is ripping.  My credit cards are in a utilitarian black flat case.  And my change is in a snack-size Ziploc® bag that tosses around the bottom of my huge designer bag and gets replaced every couple of months when it starts looking grungy.

The bill holder has a story.  (Doesn’t everything?)  After my French aunt Elisabeth died and I was clearing out her apartment in Nice, I found this lovely, thin money envelope, with just three places to put bills.  (The center slot is perfect for the three crisp $100 bills I have carried for decades, for use when cash is needed.)  Beautiful cognac-colored leather, lined in silk.  But life in the 1950s, when it was probably made, was a lot gentler than the 21st century and it is looking sad and worn.

When I adopted it, I had also thought of the fact that Elisabeth, who had started with nothing, had accumulated a sizable financial cushion.  She was a farm-girl from near Lyon, France, who had left for Paris as soon as she could.  She had met a charming American officer in the merchant marine (my uncle) who was celebrating the end of World War II, married him and went on to aggressively build their nest egg with his inheritance from my grandfather … to be sure she never again “went without.”  So maybe the bill holder also carried some good money karma.

The black credit card case has a story too.  I take identity theft seriously.  While I only carry three credit cards (after all, how many do you really need?), I wanted to keep them safe.  So when RFID protection became available in wallets, I went online to see what I could find.  (Wikipedia says that “Radio-frequency identification—RFID—is the wireless non-contact use of radio-frequency electromagnetic fields to transfer data.”  In simpler terms, that’s what’s on those cards you just swipe across a reader.  But if that reader can read them, so can powerful scanners.  And those have shown up more and more in public places—like airports—where your cards can be read without you even knowing it.)

At the time, wallets with RFID protection were pretty boring so I settled for a simple black leather credit card and passport holder.

Now, if you use a flat bill holder and a flat credit card holder, where do you put your loose coins?  My temporary solution of using a Ziploc® bag had become all too permanent.

And where do you put business cards, receipts, airline and other loyalty cards?  Well, I found an ugly Samsonite zip-around travel pouch that did the trick:  it held all that, plus the bill holder and card holder.

It was all temporary, right?  Until I could find the ideal wallet that fulfilled all the roles I wanted it to.  But temporary becomes permanent if we’re not watching.

What Your Wallet Says About You

Whether you’re listening to Suze Orman, your feng shui expert or your favorite Law of Attraction resource, I can tell you that I can almost always predict how one of my clients handles her money after looking at her wallet.  It’s like sneaking a peek at her secret money life.

A wallet cluttered with old receipts, phone numbers scribbled on the backs of business cards and dry cleaning stubs reflects a financial life that lacks control and order.  An old, worn out wallet shows weariness and fatigue over life and the role of money in it.  A cheap plastic wallet symbolizes how we treat ourselves: either penny-pinching to an extreme or minimal self-respect … certainly a lack of abundant thinking.

Crumpled bills jammed into any compartment of a wallet mirror a lack of respect for money itself.  A wallet holding just a couple of dollar bills is usually owned by the person asking you if she can borrow a couple of bucks to pay for her coffee … the same one who has trouble making it to payday.

And then you have the woman who says, “Who needs a wallet?  I pay everything with mobile apps on my smartphone.”  Today technology has further distanced us from our money.  That shift may sound progressive and convenient, but the less we’re connected to money itself, the easier it is to overspend.  We no longer equate those expenditures with the effort that went into earning that money; it all becomes fictitious digital dollars in our minds.  Even using credit cards is a little better, especially those that still require a signature on a receipt and not just the wave of a hand.

There’s an expression that says, “How you do money is how you do everything.”  So, whether you’re a believer or not, take out your wallet and look honestly at how you’re relating to your money.  What does your wallet say about you?

If you don’t like what you see, invest in a new wallet.  Find one that reflects the role you want money to play in your life.  Put your most important credit cards in it, along with only your most frequently used loyalty cards.  Keep some cash, neatly organized, along with a backup of whatever amount makes you feel safe and comfortable … whether that’s $50, $100 or more.  Set up a system for receipts, taking them out regularly and filing them for preparing taxes or expenses reports.  In short, make taking out your wallet a gesture that pleases you … for what it says about you.

P.S.  I went online tonight and found a bright red leather RFID clutch that will fit my bills, coins, travel cards, credit cards, passport, few business cards and recent receipts … without bulging or straining.  Now that aspect of my finances will be aligned with what I’ve put so much effort into creating for myself … a life of true financial control and peace of mind.

Let me know in the Comments section below what you found when you looked honestly at your wallet.

xxxxxxx

Bio: Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret “weapon,” if you will, behind many individuals in high places. Yet she did! Since then, with her finances completely turned around, Sharon has gone on to interview countless women. She’s done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

The surprising answers are shared in her tell-it-like-it-is posts and articles. Today her mission is to show as many women as possible how to become financially free for the long term, through her coaching programs. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve … if they’re willing to do what it takes!

The post Honoring Money or What’s in YOUR Wallet? appeared first on Money expert, personal money mentor, financial independence, women and money.

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Obsessing Over Money

It was an early morning call, and I could hear the slight edge of controlled anxiety in her voice.  Therese told me she had a large sum of money she expected to receive at any time and she wanted to be sure she was ready for it.  The thought of that amount had her obsessing over money:  what were the tax implications?  Should she find a better, more protective corporate structure?  What did I think it could do to the family dynamic?

Those were genuine concerns.  But she also had dozens of “what if” questions racing through her head, day and night, she admitted.  They were concerns about things that hadn’t happened yet.  And probably never would.

By the way, that’s no different from the obsessive concerns that can run through women’s heads as they worry about the opposite problem:  not enough money.

Not that some of the concerns aren’t real … as Therese’s were.

Those real concerns should be addressed as part of the planning and actions we all need to create around our money, whether it’s too much, too little or just enough.  We need to know exactly what the demands are on our resources, and whether or not we can meet them.  And if we can’t meet them, what are we going to do about it?  Confirmation.  Plan.  Action.

But what I’m talking about here is the endless mind chatter over money that we allow to consume our thoughts.

It happens in cases where the inflow of money is irregular.  It could be the entrepreneur who is just starting her business and doesn’t have a steady inflow of money yet.  Or the woman who earns on commission.  But it also happens to women with a steady salary.  So the “what if” obsessing over money is not related to how the money comes in or whether there is enough.

It’s related to two things:  (1) the control and power we hand over unnecessarily to money.  And (2) the fact that too many of us continue to let our financial situation exist in our minds … instead of on a piece of paper, pinned down in black and white.

If you have your numbers written down clearly in terms of what comes in and what has to go out, and you have a shortfall, you know you have to deal with the gap.  Either you find expenses you can cut or you figure out how to bring in enough to cover the gap.  In this case, the “what if” concerns should be limited to the real consequences if you fail to do so.

On the other hand, if you don’t have the numbers written down clearly, the “what if” obsessing over money is endless.  It will take up residence in your mind, and edge out all attempts at creativity, productivity … and sleep.

A few of those concerns will be real.  But the majority will be about things that will never happen.

It reminds me of the familiar Shakespeare phrase “A coward dies a thousand deaths …”  (The whole quote reads “A coward dies a thousand times before his death, but the valiant taste of death but once.”)

Out of fear, the coward experiences every possible fatal mishap and tragedy in his imagination, but still only dies once.  In the case of your finances, why would you want to live every possible mishap and embarrassment related to your money … if only one outcome will ever occur?

Doesn’t it make more sense to know what that outcome might be?  And deal with it?

Let me know in the Comments section below what you do to keep the endless chatter from sucking up your precious time and energy.

xxxxxxx

Bio: Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret “weapon,” if you will, behind many individuals in high places. Yet she did! Since then, with her finances completely turned around, Sharon has gone on to interview countless women. She’s done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

The surprising answers are shared in her tell-it-like-it-is posts and articles. Today her mission is to show as many women as possible how to become financially free for the long term, through her coaching programs. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve … if they’re willing to do what it takes!

The post Obsessing Over Money: The Truth About What If appeared first on Money expert, personal money mentor, financial independence, women and money.