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Mindset

Laurie Lee

 

Mindset

Definition:  A fixed mental attitude or disposition that predetermines a person’s responses to and interpretations of situations. 

What is your mindset around money?

Here are five quick questions, answer them truthfully.  Then ask yourself is my debt a result of circumstances or poor decision making.

  • Are you honest with yourself and/or your spouse about your financial purchases?
  • Are you hiding on-line shopping purchases?
  • Do you have a secret account?
  • Are you justifying purchases that are really not necessary?
  • Are you using shopping as an outlet to make yourself feel better?

The emotions that are tied to money can be very overwhelming.    Before you tackle your financial situation, take a deeper look at why you are in the financial position you are.  I am a firm believer that most debt occurs for one of two reasons: 1. Circumstances; or 2. poor decision making. 

Bad Luck

Sometimes, really bad stuff happens to really good people and it does not matter how financial savvy you are, or how great the communication is between spouses, or how fantastic you are at managing your finances you can still end up in financial trouble.  The people who are in financial trouble due to an unforeseen circumstance (for example the loss of an income because of an ill child) just need some clear, helpful support, an advocate and a plan and they will be back on their feet financially in a short period of time. 

Bad Planning

Poor decision making however is repeated over and over until you learn new habits and change your mind set when it comes to finances.  The current financial trend is to adopt an attitude of:

  • “I deserve”
  • “Debt is the new norm”
  • “I will pay off my student loans later, for now check out my new i-phone !”

     

Having a credit limit is not your money, having a student loan is not your money, a credit card is not your money.  Until the mindset changes, whether it is coming from, I deserve, or I will always be in debt, it is very difficult to change one’s spending habits. 

 

Look at Money Differently

If you truly want to be put yourself on the path to financial freedom then treat the money you have earned from your paycheque as your income, that’s it.  Treat all other forms of credit as the banks’ money, which you will HAVE to pay back with interest, and interest, and more interest, until you are very old, leave the country, or file for bankruptcy, (right student loans are not including in bankruptcy).  OR you can start right from the beginning with a success mindset and do not carry this debt to begin with.

Success Story

Yes with a little discipline, the right mind set, and a clear picture of what you want you can set the tone for a life of financial success.  Take my client “John.” I started working with him when he was only 19.  He was attending university and had two large student loans.  He had a clear (albeit ambitious) financial goal: no debt when he graduated from university.  We worked together to develop a plan to give him the best chance to achieve his goal: we divided up his student loan into needs, books/rent/travel, expense to and from school, food etc…  The plan included $40 spending money per week for all other events/activities and the remainder was never used.  After three year of university he took one year off and work his #@# off, following the same plan, $40 per week for entertainment and following the budget for food etc…. Four years later after implementing the plan he had graduated and he continued to follow the same plan while working in his field.  Only six months after graduating we celebrated that he was debt free, all student loans paid for.  What a success story!  He has an amazing well-paying job in his field, and no debt.   Why did he succeed?  He had the right mindset and a clear goal!

Money is such a personal issue and we all carry our history when it comes to financial successes and failures.  You cannot change your past but with the right mindset around money your future can be a financial success.  Always wanting more, and never feeling that you have enough has everything to do with changing your mindset not your finances.   Having a grateful heart and being thankful can change your outlook on your finances and your future.  Take control of your money, don’t let money control you!

Laurie Lee

Goodcents Co.

 

Together or Apart

Laurie Lee

 

Together or Apart?

 

Do you keep your money to yourself, the old what’s mine is MINE or do you share your finances and the responsibility with your partner?  This is a great conversation starter, which often evokes a highly emotional response.

 

Over the years I have met with couples and in the process of discussing values and personal /financial goals, there has come that awkward, frightening moment when I present the completed twelve month budget.  The responses have been memorable in the situations where each partner is keeping their finances separate.  I have shared in the sorrow, disbelief, and sheer panic as the full financial picture is revealed.  Honesty and openness is a must when dealing with finances as a couple.   I have come to the opinion that the most successful way to manage your finances as a couple is to utilize each other’s strengths and to make a plan where each person is held accountable.

 

Some people truly are not the least bit interested in finances and will live in a world of denial where they honestly do not know how, when or even IF the bills are paid!  You can ask them their mortgage interest rate or how they paid for their last vacation and they will just shrug because they have no idea.

 

So what is a success strategy that has been proven to work over and over again?  Both partners in the relationship have to take responsibility.

 

If you are not the one responsible for the finances (you know who you are) then here are your strategies for success which will reduce the questions and the arguments:

 

  1. Show your appreciation towards the one who is managing the finances;
  2. You MUST make yourself aware of the financial Goals.
  3. Know what the budgeted weekly amounts are for groceries, etc., and what account you access that money from.

 

For those of you managing the finances here are your success strategies:

 

  1. Have a system in place so your partner can easily access all the information without causing you stress.
  2. Have one account just for groceries, and spending money. Transfer in the weekly or bi-weekly amount into an account that each person can access with their debit cards. There is definitely NO overdraft protection attached to this account!  This is the easiest and most successful method I’ve seen.

 

My recommendation to all couples: discuss and plan who is going to be responsible for which bills, and to have a system in place that makes this a simple task.  Secrecy will not produce financial results; and living in ignorance will only result in frustration for one or both of you.

 

The solution? Teamwork and using each other’s talents.  I have client’s using this method for success.  The husband transfers money into both a savings accounts and a spending account (groceries and other expenses).He ensures that the bills are paid on time.  It doesn’t matter if 95% of these transactions are automatic debit: it still counts because he has taken ownership!!! The wife does the grocery shopping and takes out the spending money for the week for both of them.  They have agreed on set goals and each of them is motivated and feeling involved and appreciated.

 

The moral of this story?  Couples that work together planning and managing their financial future are the most successful, financially, and in their relationship as well.  Together or apart: you decide.

 

Laurie Lee

Goodcents Co.

 

Take Ownership

Laurie Lee

Take Ownership

OWNERSHIP.  Use this as your “mantra” for 2013 and you can experience a new way of living.

I am not talking about purchasing a new vehicle or a new home; I am talking about taking ownership of your personal finances.

What are your limiting beliefs or roadblocks preventing you from honestly embracing your finances?

Why are you highly successful in your work, but are unable to move forward to becoming debt free?

If you managed your business in the same manner that you manage your personal finances, would you be bankrupt?

Our values around money are well established by the time we are teenagers.  Our parents views and experiences around money shape our beliefs and attitudes towards money as well. Our values around money play an important role in how we currently deal with our finances.

So what are the roadblocks and patterns that are entrenched as adults causing us financial stress?

Fear:  When I sit down with clients for the first time there is always a hesitation and curiosity as we begin the process of reviewing all their financial information.  We discuss the details of paystubs, Credit Card interest rates, even money owed to the Cash Store.  When was the last time you took a clear look at your entire financial picture? To review everything you owe and to see exactly what you have saved for the future is a very powerful and enlightening first step.  Let’s call it a balance sheet for your personal finances.   Fear is stopping many people from taking this first step.  Fear that once you are aware you will need to hold yourself accountable and will need to make changes and sacrifices.  It is much easier to live in the land of Avoidance.

Avoidance: How are you avoiding dealing with your finances?  Are you writing post-dated cheques, taking a passive role in your finances, avoiding the government, overspending repeatedly at Christmas, buying “big ticket” items you can’t afford?  Review your last five years of spending and you will see the patterns emerge.  Are you setting yourself up for failure, by repeating patterns that you truly know are not helpful?

Money is one of those great relationship tests: it can be stressful talking about it and people may feel defensive.  Are you delaying discussing your finances with your spouse out of fear or because you think it is easier to avoid?

Take Ownership!  Develop a healthy financial plan with your spouse that is respectful of each person’s values around money.  Make it realistic both of you are right, now find a compromise.  Have a budget/plan in place that allows both of you to take responsibility and both of you to win.

Let 2013 be a new and successful financial year for you!  It’s Simple: Take Ownership

Laurie Lee

Goodcents Co.

 

 

 

 

 

Avoidance

Laurie Lee

Avoidance…..

As young children we learn to avoid, it is human nature.  My two daughters try every day it seems to avoid certain chores, or tasks.  Take homework for example: children need to learn how to use a day planner and how to break down the large assignments into small achievable daily tasks.  Avoiding the project or task until the final hours before it is due, increases stress levels and the final copy is of poor quality.  Yes we all know this FACT by the time we are adults!

However, avoidance is the first behaviour that I focus on when dealing with families and their budgets.  The first question I will ask is where is your mail?  You would be amazed at the “unique” filling systems or lack of that I have seen!  There are some people who bring down boxes (covered in dust), or some cute small file organizers, but most cannot bring me their mail or bills. Why, because the mail is filed throughout the house.  One of my customers used behind there fridge as a filing system.  Talk about avoidance.   Once the mail has been tracked down it is very easy to see who has the mastered the skill of Avoidance.  I have seen over an entire year’s worth of mail in one box and not one single envelope had been opened. Yes there was mail from the “tax man” and all the regular monthly bills X twelve.  What if there was a winning lotto tickets in there?

Now going beyond opening your mail, my second question is, “How many bank accounts to you have?”  For my customers who are reading this, I know you are smirking.  This is my favorite question.  Some people have one or two accounts, but many however have five, six, or more.  Some people opt in favour of having bank accounts with overdraft protection attached with limits of up to $5000.  In addition there are Line of Credits accounts, Savings and Chequings.  Now the game of avoidance in this example is how to avoid knowing what living within your means is.  This is accomplished by making your financial life so complicated transferring money from one overdraft account into the line of credit then back into the main account in a never ending cycle.  This is what I refer to as pretend money!  You have worked hard all week, and it is finally payday!  Your cheque is automatically deposited into your account.  But wait your balance is still in the negative.   Hmmm, to avoid costly overdraft fees you transfer money from your line of credit because this payment is only 3% of the entire balance, and then your proceed to live off the credit card for all your daily expenses because there is a delay of two to four weeks depending on when your due dates are.  Now times this behaviour by two, as both the husband and wife are transferring money from account to account and now you are immersed in a cycle of debt.

  • If this is you, please stop the avoidance it is time to simplify!
  • Stop the Overdraft protection or at least limit the amount to $500.
  • Have one main account and one or two Savings accounts no more.
  • Do NOT use your Credit Card or Line of Credit unless you have already earned the money you are charging to it.
  • Do not count on a paycheque that has yet to be earned.
  • Please open your mail!

 

Take ownership of your finances and your life.

Laurie Lee

Goodcents Co.