Creatively Controlling Your Money Habit

by Miata on February 24th, 2015

A friend of mine likes to pay for lunch every time we meet. Surprisingly, she also always picks the most expensive places. I love to see her and there’s no reason for her to pay…but she always insists on paying anyway.

Lately, I’ve seen some disconcerting problems. Three weeks ago I could tell she was anxious.

Money Bubble

My friend, we’ll call her Rachel, shared that her husband Mike is now seeing a psychiatrist. “He always feels like he’s about to have a heart attack. After asking three doctors for opinions, he’s starting to realize that it’s in his head.”

“What have they found out?” I asked, worried.

Rachel said, taking a bite from her caprese salad, “They think it’s stress.”

When we parted, Rachel again paid for lunch over my continued objections, and then wrote me a check for some earrings from a mutual friend’s jewelry party.

I found out two days later the check bounced.

While she laughed it off and paid me in cash, she showed up for our lunch the next time in her mother in law’s car. “Mike’s car died, so we’re going to drive his mom’s car for awhile.”

Rachel’s paying for every expensive lunch and they can’t afford to fix their car?

The truth seems to be clear. Rachel and Mike are having some severe money problems. Luckily, she actually let me pay for lunch this week. Next week I’m going to suggest that we visit over lunch at one of our houses.

It’s time for Rachel to get back on track.

Does This Sound Like You?

The truth is that many of us can relate to what is happening with Rachel. As creatives, it’s not uncommon to avoid talking or even thinking about money. But we have to stop sabotaging ourselves… doing things like overspending just to prove to people who really don’t care whether you buy them lunch… that you can afford to buy them lunch.

I’ve witnessed too many mental breakdowns and physical ailments that stem from worry over money. To me, it’s easier to face the fact: until spending gets under control, nothing is going to change.

You’ll continue to worry about your money.

You may have trouble sleeping.

Unfortunately the black hole won’t go away by not looking at it.

I Have Good News

There are many resources available. The world is filled with good people who understand money and AREN’T judgmental. That makes NOT getting help so sad. There are solutions to money problems, but the first thing you’ll have to do is acknowledge them.

The First Step To Solving Your Money Problems Is Acknowledging That You Have Money Problems

A couple weeks ago I wrote about Marisa Mayer, the dynamic CEO of Yahoo!, who likes goals that frighten her. She’s turned fear on its head. There’s something to be said about facing your fear. I know it’s difficult, but you’ll never, ever resolve your money problems until you look them head-on and tell yourself that things have to change.

Ready To Face Your Money Issues? Here’s a checklist to get started:

 1)   List your debts. Lots of people (most, actually) have debt. Get it all out in the open. How much do you owe? What’s the minimum payment? What is the interest rate?

When I’ve worked with people to write these expenses down, they feel a sense they didn’t expect. Relief. They’re relieved that (sometimes for the first time) they have all of their skeletons out of the closet and in front of them.

One client tapes her debt sheet to her bathroom mirror. While I think this may be a tiny bit over the top, I love her reasoning: she wants to see her debt as soon as she awakens and just before bed. It doesn’t scare her anymore, and because of that, she’s able to tighten her budget and face her fear. Awesome!

2)   Write down the amount of money you need to pay your debt AND live.

Here’s another tough hurdle to cross. Writing down your needs will show you that maybe you aren’t making enough money. What you find is that once you have an amount of money in front of you, your subconscious brain will work on solving the problem. You’ll begin to naturally cut expenses and look for ways to pad your income. Debt is a powerful monster and you need all of your strength to fight it.

Author Tim Ferriss, in his book the 4 Hour Body, details how people eat less bad food if they photograph their meals. Keeping a record, when it comes to weight loss, turns out to be a powerful motivator to eat healthy foods. It’s the same with your expenses and income. Keeping a journal or diary of expenses will help you curb bad habits that you don’t want to write down.

3)   If you seem to have enough money, ask yourself where the money could possibly be going.

Often I find that people have money left over on paper, but they don’t have any money in their wallet. That means you’re doing a great job of pretending to know your expenses, but you’re forgetting items. Often people forget gifts, one-time trips, auto repairs, and anything that isn’t recurring. Stretch your budget out to a year instead of a month to uncover these “one-off” purchases and expenses. You’ll have a much better picture of your situation.

I’m praying that Rachel and Mike face their money problems. If you’re bouncing small checks and don’t have a car to drive, it can feel like an insurmountable journey ahead. But get the support you need to take those first steps. I promise you can build momentum towards the financial stability and peace that will allow you to thrive.

Is Fear Keeping You From Financial Success?

by Miata on February 2nd, 2015

Is Fear Keeping You From Financial Success?

I’d like to share a secret about one trait many of us share. We have a fear of the unknown.

When I was a child, I was afraid of the dark. I’d check under my bed before turning out the light (which is funny now, because I never stopped to think that if there WERE bad things under there who cared if it was dark or not?). I’d open my closet door and thoroughly search. Then, even after all of that, I’d still pull the covers tightly around my head some nights, sure that the bogeyman had figured out how to sneak in through a heating vent and come to end my young life. PiggyBankUnderCovers

Luckily, that never happened.

You and I know, it will never happen.

People share this same fear when it comes to our finances. We fear walking into a new bank, opening accounts online, having money automatically deposited, sheltering money in an IRA, buying insurance we might not need, setting up estate documents that might be wrong.

We fear lots of things about money.

So how do we move past fear? It isn’t easy, I know. But if there’s anything that kills fear in your financial plan, it’s momentum. You have to get a running start.

A friend recently told me,

“I don’t try to finish jobs, I just try to start them. They seem to miraculously finish themselves once I’m up and running.”

I love that approach.

The best way to break out of the fear is to stop worrying about the end. Just begin.

5 Steps To Overcoming Fear

Look for the bogeyman. Just like I’d search under my bed, run a search that’ll help your cause. Want to start an IRA? Search, “Opening IRAs.” Better yet, search for “Easy IRA Tips.” You’ll find hundreds of articles telling you just how simple it is. For some reason, this “social proof” can help us get into action.

Set a timer for 20 minutes. I’ve found that if I promise myself I’ll start a task and ONLY spend 20 minutes on it, by the time the bell rings, I’m deeply engrossed and want to continue. Now I have momentum, and the fear falls away.

Join groups and/or classes. Classes are a great resource partly because you know that there are others going through the same steps you’re taking at that very moment. Or, check out one of the Abundance Bound programs like Artist’s Prosperity 101 or The Artist’s Prosperity Home Study System. Often, having your financial tasks broken up into clear, concise action items, makes the work much less scary and far more accessible.

Ask yourself, “What happens if I don’t do anything? A classic way to overcome fear of acting is to make the fear of INACTION feel greater. You aren’t sure who to name in your estate documents? What would happen if you have NO documents instead of slightly wrong ones?

Once you’re moving, stay moving. Newton had it right: “An object in motion tends to stay in motion.” While there’s friction that tries to get in the way of moving forward, once you’ve grabbed your fear by the throat, don’t let go. You’ll feel powerful when you accomplish a task that you’d only recently dreaded. In fact, don’t stop there. Use that momentum to break through a second barrier if possible. Hopefully you’ll feel your fears subside and actions in the future will be much easier.

I’ve worked with enough people to know that FEAR is our biggest enemy when it comes to financial success. Brilliant clients can become stymied by the tiniest problem….all because they feel some irrational (or completely rational) fear. Remember, that goals worth having are usually big, scary goals. Don’t let being afraid stand in front of your greatness!

2014 Year End Tax Planning: Good Holiday Fun

by Miata on January 15th, 2015

2014 Year End Tax Planning: Good Holiday Fun
2014 Sunset

Ready for some good times?

I love the holidays. Lights. Friends gathering. Tax planning.

I know what you’re thinking: one of those three doesn’t belong… but tax planning CAN be a whole festival of fun, even for creative people, because it can save you lots (and I mean lots) of money. Just like holiday shopping, though, there’s a clear deadline to tax planning. If you don’t want to miss out on the best tax “deals” you have to move on many of these tasks by December 31st – before the sun sets on 2014! (Okay so maybe I wanted a reason to use this beautiful photo…)

Like anything involving the government or numbers, many of my clients freeze whenever we begin talking about taxes. The first step in this game is to relax! Tax planning, believe it or not, can be easy to understand. Plus, the lessons you’ll learn will last your lifetime. As the government makes changes I’ve found I only have to adjust my thinking slightly.

Here are five tips to help you save some money on taxes: Read the rest of this entry »

Gift Ideas to Teach Finance and Economics!

by Miata on December 8th, 2014

Gift Ideas to Teach Finance and Economics!

Money BoxAs a creative person, don’t you find many holiday gatherings are a little less….creative than they could be? According to the National Retail Federation, more people are giving gift cards this year as presents than ever before. Gift cards? Have we completely run out of entertaining, interesting ideas for our friends?

A friend of mine suggested board games that teach people about money.

What a fantastic idea!

It turns out that each year over a thousand new board game titles are released. If you walked the aisles of Walmart or Target, you’d never know there were many more options than Monopoly, Cranium and Risk.

Most games designed to “teach” people aren’t actually fun. Instead, look for games that help players build a thirst about money, economics or business because they’re having a blast enjoying the topics. Read the rest of this entry »

Looking to Clean Up Your Finances?

by Miata on November 18th, 2014

Looking to Clean Up Your Finances? Copy Successful Health Programs

AppleCoins

A brilliant artist friend of mine recently wanted to lose weight. He picked up Tim Ferriss’ book 4 Hour Body and within a few months lost 20 pounds. He and I discussed how he finally was able to take off weight he’d talked about losing for a long time. His answers enveloped many of the themes I’ve covered when I work with people on effective money management. Let’s get creative today and see what lessons about money we can learn from health and weight loss programs!

It Starts With a Spark

One point he made that grabbed me was when he said, “I just one day decided I had to do things differently. It was like I flipped a switch. I’d had enough.” That’s true for better money habits, too. Every person I’ve met who decided that today was the day to get their financial house in order didn’t “take it slowly.” Sure, maybe they didn’t try to change ALL of their financial habits in a single day, but with one decision—to be different—they began either cleaning up their credit card debt, building savings, tracking their expenses….whatever.

I can usually tell when someone comes to me whether they’re going to be successful or not based on their attitude. If they simply say, “I’d like to change,” they rarely do. However, when someone can point out all of the reasons they NEED to handle money differently, I know they’re in business.

Read the rest of this entry »

Is a Second “Side Job” the Right Answer?

by Miata on October 27th, 2014

Overworked

Is a Second “Side” Job the Right Answer?

If you’ve ever thought about earning more money, you might have turned immediately to the idea of taking on a second job. But as artists we know that a side job isn’t JUST about more cash in your pocket… It is important to seriously weigh the consequences on your craft and any other income streams you already have.

The Money Crunch

Everyone’s had a time in their life when there’s more month than paycheck. Maybe for you that’s right now. You see ads all over the place for “help wanted” or “make money online.” It seems simple: you’ll work a little harder. “Put your nose to the grindstone” as my mom says. But should you start searching?

The biggest problem with multiple side jobs is that they sap your number one commodity: energy. They also drain away your second biggest asset: time. You might meet your bills, but you also might lose your motivation to work toward your bigger dreams.

Before you take on an additional side job, ask yourself some questions:

Read the rest of this entry »

Buying a House? Now Might Be The Time

by Miata on October 13th, 2014

I was reading a Yahoo! Finance story this morning about housing prices and saw that for the first time in a long time, prices might be falling. Are you looking for a house? Now might be the perfect time.

HouseinaBox

What’s happening with the housing market?

Let’s talk first about the market. You definitely don’t want to buy a home when the market is hot….and the trend is in a seller’s favor. But if prices are dipping and the number of people buying is light, you’re more likely to find a steal. However, real estate markets are very much regional, not national, like the stock market. That means that while prices might be tanking in Las Vegas, they could be rising in Miami. It’s important to check with pros in your area to see just how weak your local market is before wandering off into the home buying scene.

A weak market means more desperate sellers, so do brush up on your negotiation skills. A few thoughts on this front:

  • Remember that the seller isn’t your friend. It’s up to them to put their best foot forward and make their best deal.
  • You aren’t trying to “put the screws” to someone when you negotiate. You’re only trying to adequately protect your interest, which means paying as little as possible.
  • Don’t expect your real estate agent to negotiate on your behalf. Studies have also shown that real estate agents prefer not to negotiate (mostly because when you consider how they make money….on the sale price….there’s no real incentive for them to bargain).

Okay, the market might be right, but should I buy?

Read the rest of this entry »

The Case for Cutting Cable

by Miata on September 22nd, 2014

Let’s Cut The Cord But Keep Your Entertainment RetroTV

I’m inspired by quality television. I’m against cutting out dramas or a good comedy from my routine, but I absolutely love saving money and getting the same value.

So, let’s start with $100 per month that you saved on cable and see how much we’ll have to spend of it to replace your favorite shows.

Netflix: For a fraction of the cost of your cable bill, you can stream many great (and some original) content from Netflix. Double the fee and you have access to nearly every DVD on earth. Cost? from $8. ($92 left)

Hulu: I get annoyed by Hulu premium plans because they keep commercials AND make you pay. But, then I think….”I was watching commercials when I had cable, and I was paying a ton!” Great point. Most top shows from all the major networks and more. Cost? $8. ($84 left)

Amazon Prime: The newest kid on the block, Amazon Prime, offers TONS of shows from many different sources, including most of the networks. That’s not all: you also get a music streaming service and access to many book-sharing programs PLUS (of course) free two day shipping on many products. Cost? $100 per year or $8.33 per month. ($75.67 left)

Sports: Missing your favorite sport? Sign up to watch them online. Major League Baseball allows people to watch every out-of-market game for $130 per year. Most major sports have similar packages. Cost? $10.83/mo. ($64.84 left)

Using four sources we just cut out the cable subscription and saved around 2/3 of the fee! Plus, you don’t have to wait….watch shows whenever you want!

Read the rest of this entry »

Lowering the Cost of “the American Dream” – Part II

by Miata on September 8th, 2014

(This article continues the discussion on lowering expenses found here)AmericanDream2

In our first installment two weeks ago, I discussed ways you could drop the cost of the American Dream by lowering your essential expenses such as groceries, car expenses and apparel. Today, I’d like to tackle lowering the cost of the “extras” that USA Today calculated are important parts of what many consider a happy lifestyle. We’re creative people….lowering the cost of creative activities should be easy for us, right?

USA Today assigns $17,009 to extras, and breaks them down like this:

Family Summer Vacation: $4,580

Entertainment: $3,667

Restaurants: $3,662

Cable, Satellite, Internet, Cell Phone: $3,100

Miscellaneous Costs: $2,000

Good news! All of these costs can be lowered without giving up any happiness. How? Let’s dive in!

Read the rest of this entry »

Lowering the Cost of “The American Dream” Part I

by Miata on August 25th, 2014

AmericanDreamA recent USA Today article caught my eye. They said that the “American Dream” now costs $130,000 a year. Wow! Even as someone who works with people on their money, I was astounded. For those wanting to focus on creative endeavors that can feel like an impossible amount.

….then I began reading.

Let’s take a look at their list of expenses and consider how we might be able to make the dream more affordable (for a complete list of expenses and how they arrived at each portion, here’s a link to the actual USA Today story). Today we’ll tackle just the essential expenses, and then in my next blog post I’ll break down the rest of the budget.

These expenses assume a family of four living in a $275,000 home.

Housing: $17,062

Groceries: 12,659

Car Expenses: $11,039

Medical Expenses: $9,144

Education Expenses: $4,000

Apparel: $2,631

Utilities: $1,956

Essentials Total: $58,491

Before I tear into these numbers, it’s important to note that most people don’t know what they spend, so all of these numbers look high. When I work with people on their budget they nearly always find that they’re spending more in each of these areas than they thought. Those little one-time expenses really begin adding up. Read the rest of this entry »