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Time to Have a Love Affair with Your Money

Written by Barbara Huson

“It’s amazing what you can do with money!” my daughter said to me the other day.

Her husband, a film maker, is directing a documentary funded by a generous sponsor with very deep pockets. Normally, he’s working on a shoestring. This time, he gets pretty much free rein to do fun things, like travel to far-off places and hire helicopters for various shots.

Yes, it is amazing what you can do with money.  What’s puzzling is why are countless women ignoring their finances?

I’m beginning to think its fear of relationship.

In my mind, money is like a Perfect Lover. All it wants to do is serve you and support you. All it requires, in return, is to be respected and appreciated.

In other words, just like a man, money needs your attention; it needs to feel understood, cared about, and valued. Otherwise, it’s not likely to stick around for the long haul.

As in all relationships, there are good times and bad times.  Right now, it’s one of those bad times for many.  If you’re in that spot, this is not the time to turn your back, throw in the towel or ignore your money. At least not if you want money to be there for your old age.

Now is the time to work on creating more intimacy with your money. Get to know it better. Learn what it needs and how to best care for it. Make sure it feels the love. (The “love of money” is NOT the root of all evil! Deprivation and destitution is.)

Some suggestions for improving your relation$hip:

1.       Talk to a professional. Make an appointment with a financial advisor.  (Try my book Finding a Financial Advisor You Can Trust)

2.       Give it attention. Read something every day about money, even if it’s just a paragraph. (Try the Wall Street Journal)

3.       Talk to others. Ask friends and colleagues who are smart with money for advice

4.       Be wary of hype, rumors and scare tactics. Bad news can be seductive, but it’s usuallyskewed.

I honestly think it’s time we all start having a love affair with our money.  You’ll be amazed at what you’ll be able to do together as a result .

16 Things I Wish I Knew About Money When I Graduated College

Written by Barbara Huson

If you have built castles in the air, your work need not be lost;

that is where they should be. Now put the foundations under them.
– Henry David Thoreau

Had a brief, but interesting conversation while shopping  in Costco with My Man and his son a few days ago. His son, a senior in college, is a sheer delight. He’s ambitious and charming, with a vivid imagination and a quirky view of life. We were walking down the home furnishing aisle when he made an announcement.

“I’m going to live in a Castle one day, “ he declared, and proceeded to describe how it would have a gym, a pool, a hula hoop court (he’s an amazing hooper!), and all the amenities castle’s typical have, including lots of turrets. The boy was dead serious.  I was intrigued.

“Good goal,“ I assured him, and meant it. But even more, I saw it as a wonderful metaphor for the big dreams many college kids have for life  after graduation.  Problem is, like most his age, he hadn’t really thought through how to make it happen.

“If you start now,” I suggested, “You can definitely make it happen.”  He asked for my advice. I was ready to give it, but standing in the middle of Costco, there were too many distractions.

So this blog is meant to help him (and anyone else) build a firm foundation under their future castles.

16 things I wish I knew about money when I graduated college:

1.     If you can’t afford something, don’t buy it. Delayed gratification is the gateway to wealth (and a sign of maturity).

2.     Despite what you’ve heard, money is NOT power. Money is simply a tool. The trick to getting the most out of any tool is to know how it works and to use it responsibly.

3.      Understand the miraculous power of compounding—where your money earns interest, then your interest earns interest, and then that interest earns interest, and before you know it, you’ve got a lot more than when you started.

4.     Make savings a habit. Every month, have a small amount–say $5 to $10–automatically transferred from your checking account to a savings account.

5.     Consistent savings, no matter how tiny, adds up quickly.

6.     Always have a Safety Net…just in case—accumulate at least 6 months of living expenses, to be used for emergencies only.

7.     Create a Fun Fund for short-term purchases, like a ‘gotta-have’ video game or a weekend getaway—open a separate savings account, or simply drop spare change in a jar.

8.     Begin now building good credit. Apply for a credit card and use it responsibly, which means paying it off every month  (refer back to #1!)

9.      Never, I mean NEVER, get into credit card debt (not for a castle or the carpet or even a couch).  Mounting credit card bills destroys your peace of mind and your quality of life. What good is a castle if you can’t enjoy it?

10.    Keep your checkbook balanced. Even better, put everything on Quicken. Clarity (knowing precisely how much you have) is power.

11.     Learn about investing. Take a class. The only way to make sure your money grows (enough to buy a castle and also maintain it!) is by putting at least some of your cash in long term assets (like stocks & bonds) that will grow faster than inflation and taxes will take it away.

12.      Never invest in anything you don’t understand. Otherwise, you won’t know what you’re buying; you won’t know when to sell; and you can’t accurately evaluate the advice you’re given.

13.     Don’t put off investing until you’re older. If you start now, regularly investing small amounts (in mutual funds), that money will grow into millions. Really!!!

14.     Own and respect your value. Never settle for less than you deserve or desire. Always ask for more than feels comfortable.

15.     The biggest financial risk you can take is to ignore your money, and do nothing at all.

16.     Read biographies of wealthy, successful people. They’ll inspire you to think bigger about what’s possible, and give you the fundamentals for making it happen.

That’s my advice. But it’s certainly not a definitive list. I’d love to hear from others. What would you add?

Barbara Stanny

The leading authority on women & money
[email protected]
www.barbarastanny.com

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Putting Some FUN into Finances! Part I

Written by Barbara Huson

I remember, back in the 80’s — when I was struggling to understand money — I started an Investment Club.

Every month a group of about 12 friends got together, usually at my house. Someone brought treats, and we’d spend an hour or so discussing stocks… along with girl talk, gossip and romantic updates.  It was a great way to put the Fun into finances while doing some serious learning.  I really did learn a lot.

However, as I also learned, Investment Clubs can be complicated, time-consuming, and sometimes, contentious. They require co-mingling money, reaching a consensus on stock picking, and a serious time commitment, especially for the officers.

I’ve come to see there’s another— arguably better— way to combine socializing and studying.  Financial Book Clubs.  What makes them better? These clubs are less work and focus on far more than just investing.

I wrote an earlier blog on this topic… http://barbarastannyblog.com/page/7/ But I just got an email that brought it to mind again.  (Emails make such great fodder for blogs!) I was inspired… and I thought you would be too.

In my next post I’ll tell you about;  “One woman’s tale of Overcoming Underearning by joining a Financial Book Club”… stay tuned!

Barbara Stanny

The leading authority on women & money
[email protected]
www.barbarastanny.com

Sign up for Barbara’s free newsletter at

https://www.barbara-huson.com/inner-circle-join.html

Twitter Barbara at: http://twitter.com/barbarastanny

Start Reading The Wall Street Journal, Now!

Written by Barbara Huson

Note to financial neophytes—don’t let theStart Reading The Wall Street Journal - Now! Wall Street Journal intimidate you.  It’s a fabulous learning tool…and offers some fascinating reading… for everyone, no matter how much, or how little, you know.  http://online.wsj.com/home-page

Sure it’s full of, what may appear to some, as indecipherable gobbly-gook, written in ‘broker-speak.’  But the WSJ is a very powerful resource, so ignore all of that and focus on the following:

1.      Peruse the front page.  Every once in a while there are some great human interest stories about the good, bad, and especially the greedy.  Plus, the side-bar on the left is like “Current Events for Dummies”… a collection of news snippets giving you a speedy update  to the latest news (financial and otherwise).

2.      Glance over the following two sections: Marketplace and Money& Investing.  A quick peek is all you need. You’ll be amazed at how much you’ll pick up just by osmosis.

3.      Savor the fourth section (called by different names depending on the day of the week): Personal Journal (Tuesday-Friday); The Journal Report (Monday);  Weekend Journal (Saturday).  This section is loaded with easy-to-read,  often fascinating,  and always useful  tidbits….everything from fashion, sports and personal finance to restaurant, wine and  book reviews.

Let’s take Monday’s WSJ’s Journal Report (theme for this report was “Your Money Matters”).  The front page article was Best Online Tools for Personal Finance, and it was chock full of excellent (and free) website recommendations.

Even if the only thing you do is glance at the Wall Street Journal everyday for 3 months, you’ll be amazed at how much you learn!  Don’t be intimated.  The Wall Street Journal is a great resource, and a must read if you’re serious about upping your personal “financial awareness quotient”!   Try it and report back.

Ready to $tart getting $mart???

Written by Barbara Huson

Does this sound like you?

“It’s a new year! I’m finally going to tackle my finances.  Yep, I’m really ready to get smart about money. Well…sort of.   I mean, I do want to learn…but it just seems so overwhelming.  Where do I start?”

Start with this article: http://www.creditcards.com/credit-card-newsReading up/savings-money-club-comeback-1264.php. Not just because I’m in it! The author, Dana Dratch,  does a fabulous job of explaining how to make  financial education fun! FUN????

Yes, FUN!  Invite some friends, bring some food, and start a Money Club.

“The idea has been around for years,” Dana writes. “A small group of friends, co-workers or, in some cases, complete strangers meet regularly to polish money skills, discuss money challenges and set concrete goals. Don’t confuse money clubs with investment clubs, in which members focus on investing skills and may even make investing decisions as a group or pool their money. “

Dana also interviewed Ginita Wall, the co-founder of www.wife.org (which I believe is the best financial education site on the internet for women) and a major proponent of money clubs. Ginita created the site; www.TheMoneyClub.org, where you can download a  free Leader’s Guide for “individuals interested in starting a club, and a menu of lesson plans for meetings.“

Money clubs are exploding in popularity. I’d love to hear from anyone who’s in a money club…got any tips or advice for the rest of us?

Finding A Financial Professional

Written by Barbara Huson


Those of you familiar with my work know this about me: I’m a big fan of using financial advisors.

The reason: we women are so busy, many of us of don’t have the time, interest, or knowledge to manage our own money (and do it well). Of all the women I’ve interviewed, the ones with the highest networths didn’t necessarily earn (or inherit) the highest income. But the whopping majority did work with financial professionals.

The challenge: how do you find a trustworthy financial advisor?

The strategy: Ask for referrals from people who are happy with their advisors. Or go online to find names of advisors near you. Try these sites:

www.napfa.org — National association of Personal Financial Advisors

www.garrettplanningnetwork.com — the Garrett Planning Network of financial advisors who work for an hourly fee.

www.cfp.net — the website of Certified Financial Planners

The solution: Resist the urge to sign up with the first advisor you meet. Interview at least 3. Ask questions such as these, then go with your gut instinct:

1. Would you tell me about yourself?

2. Do you specialize in certain types of investments?

3. Who are your clients?

4. How do you charge for your services, and what costs might I incur working with you?

5. How often do you communicate with clients, and how often might I expect to hear from you?

6. Have you ever been involved in any lawsuits, arbitration, or disciplinary problems?

7. Is there anything you want me to know about you that I haven’t asked?

Need more help? I’ve written a booklet filled with great advice: Finding A Financial Advisor You Can Trust. You can order it on my website.

I’d love to hear your tips about finding an advisor.

What’s With the Fear Tactics?

Written by Barbara Huson

Maybe I’m over reacting. I just heard yet another conference speaker warn me, along with a few hundred other women, that unless we take action, most of us will never retire because we can’t afford to.

Enough with the bad news already! The financial industry, along with the media, seem to believe that the best way to motivate women is by frightening us with scary statistics, alarming statements, and worse case scenarios. But clearly fear tactics haven’t worked. Women hear these gloomy statistics and instead of taking action, just get depressed and go into avoidance.

I would love to see the financial industry/media do away with (or at least down play) those depressing statistics. And instead, talk about how financial success allows women to help her kids, her parents, people she loves. Tell us stories about the joys of philanthropy, the thrill of leaving a legacy. Give examples of how proper financial planning will give her the resources to contribute to causes she feels passionate about.

To most women (and I suspect some men), helping others and making a difference is what financial empowerment is all about.

Does anyone else feel as strongly as I do about this?

Powerful Giving

Written by Barbara Huson

GivePhilanthropy is usually the least thought out, most disorganized part of our financial activities. We know charitable contributions save us taxes.

But the question we rarely ask is: How can I maximize not only my tax benefits but the power that philanthropy gives me?

The more thought and planning you give to your charitable donations, the more—so to speak—bang you get from your buck—financially, socially, emotionally.

To this end, I put together Six Principles of Powerful Philanthropy:

1. Educate yourself financially. The number one reason women don’t give more is lack of knowledge. No matter how much money a woman has, if she’s afraid, insecure, and/or ignorant around money, she’ll be restrained in her giving . In a recent study, 73% of women felt that passing money to children and causes is important, but only 14% have conducted detailed financial planning to ensure an effective wealth transfer.

2. Get your financial house in order, with your spouse. Review your finances regularly. Smart money management follows 4 rules:

  • Spend less
  • Save more
  • Invest wisely
  • Give generously

These rules must be followed in this order. Giving without following the first three rules is an act of self sabotage. Not only do you jeopardize your future security, but you diminish the impact you can make with your money.

3. See yourself as a philanthropist in your own right. Too many women think it’s their husband’s money, so charitable donations are his responsibility. But women outlive their spouse and will ultimately be in charge of the family estate. Another reason women don’t engage in planned giving is because, if they’re not a Carnegie or Rockefeller, they don’t think they have enough. Not so. Small amounts can add up to big changes.

4. Give serious thought to the legacy you want to leave. I once saw a poster with the word: “will it matter that I was?” Ask yourself: How do I want people to remember me? What changes would I like to see in the world. What do I value most? Does my giving reflect my values?

5. Work with professionals. Figuring out how much is possible and advantageous to give is a complex issue. It should be a team effort. Find reputable estate planners, attorneys, financial advisors, accountants. Studies show, however, 9 out of 10 people don’t mention charities in their will. So if a professional doesn’t bring it up, you be sure to.

6. Make it a family affair. Use philanthropy as a way to teach kinds about values, money management, and life goals.

The most powerful philanthropists are not the ones with the highest net worth. They are the ones who are financially educated, financially secure, and passionate about a cause.

What would you do with a windfall?

Written by Barbara Huson

Diamond RingHere’s a question for you. If you had a choice—a $25,000 diamond ring or $25,000 in stock—what would you pick?

An Oxygen network survey asked women that very question. And you know what? The whopping majority (almost 80%) went for the stock. On the surface, that sounds like great news. But here’s what I’d like to know. How many of those women, if given a $25,000 check, would actually call their broker and buy the stock? Would you? Sadly, my guess is no.

Every piece of research I’ve read says the same thing: women today know full well they need to protect themselves financially, but they still aren’t doing it. The recognition is there, but the resistance is stronger. For example, in a 2004 Prudential Financial survey, 53% of the women said they expected to save and invest more that year. But in 2006, that same poll found only 11% had actually invested in stocks or mutual funds for the first time; only 14% opened a retirement account.

As I see it, when it comes to money, the more things change, the more they stay the same. There is still a frightening level of financial passivity and ignorance among even the most successful women.

The deeper question I have is: What can be done to motivate more women to take control of their money? Is financial inertia something you’ve seen, or struggled with personally? What has worked (or not worked) for you?

Feel free to leave your comments on this blog. If you want to read the same article I read about this survey: http://savannahnow.com//node/344335

Meet Barbara Huson

When a devastating financial crisis rocked her world, Barbara Huson knew she had to get smart about money… and she did. Now, she wants to empower every women to take charge of their money and take charge of their lives! She’s doing just that with her best-selling books, life changing retreats and private financial coaching.

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