Divorcing Money From Emotions: A Guest Post

Money is a hot button in many relationships, including the relationship between our inner self and our public image. But how can we divorce money from emotions? That question is answered in this guest post from Women & Co

"Learn How to Develop A Better Relationship With Your Finances

Many of us may consider our relationship with our money a “love-hate” one – but it doesn’t have to be that way. Just like any other relationship in your life, in order for it to be a success, your relationship with money requires a good attitude, consistent communication and an ongoing commitment. Lisa Caputo, Founder and Chief Executive Officer, and Linda Descano, CFA, President and Chief Operating Officer of Women & Co., offer these tips to help you separate your money and emotions, and forge a healthier way to relate to your finances.

First: Assess how you feel about money. Begin by asking yourself these questions that may determine the psychological factors driving your financial behavior:

· Is money a sign of power or control in your relationships?
· Do you regularly put off budgeting? Saving? Investing?
· Do you use money to boost your self-esteem?
· Does the “rush” of making a purchase drive your spending?
· When growing up, did the subject of money or budgeting start arguments?

If you answered “yes” to any of these questions, it may be time to re-evaluate your attitude toward money and budgeting. A healthy attitude is one that enables you to indulge now and then, but also helps you prepare for unanticipated expenses that inevitably arise. Here are some key ways to get on a healthier track with your personal finances and stay in control of the relationship:

· Commit to Your Budget: Commitment is a key element when it comes to successful budgeting. Be realistic about your spending habits, and set a realistic spending limit for yourself. Monitor your budget and spending habits closely and regularly, and be prepared to change your budget to adjust to any lifestyle changes that may occur, whether these changes are for the better or worse.

· COMMUNICATE: It is critical that you discuss your financial situation with your spouse/partner, financial advisor, and most importantly, yourself. Share any feelings or experiences that may shape your attitude towards financial activity. Communicating your financial flaws and past mistakes will help you determine what will be the most effective way for you to save, spend and budget from this moment on.

· Be INVOLVED: It is important that you are involved in your finances, and if you have a spouse/partner, you both should be on the same page with creating and maintaining a financial game plan. Being involved not only means you have a plan, but that you’re also checking in with yourself and each other to monitor how it’s going, and making any adjustments along the way, as needed. Remember, knowledge is power, and by knowing all the financial facts of your life, you will have a much better sense of control.

· HONESTY is the Best Policy: Be honest and realistic about your goals, as well as the sacrifices you’ll need to make in order to meet them. Maintaining a budget and financial plan will be extremely difficult if there’s any denial or disagreement with your loved one about money. It is possible that what you consider a “want,” your other half considers a “need.” Be honest about what you want, need and expect from your budget, and understand what meeting those wants, needs and expectations will require from you."
--source: womenandco.com
______________

Here's how to buy my book:

@ Amazon.com
@ Barnes & Noble
@ Borders
@ Target.com

Losing $30K in a BF's Hedge Fund & Other Big Goofs With Money

One woman lost $30,000 the old-fashioned way. She gave it to her boyfriend to manage. She invested in a hedge fund run by the dear BF. He's now sitting behind bars (grand larceny and securities fraud) and she has a fat $30,000 deficit in her accounts.

That's just a snippet of the great financial stories from the 12-page special section on "Women & Wealth" in the February issue of Town & Country.

My Reality Check: I can't relate to the size of the losses experienced by some Town & Country readers, but if I chop off a few zeroes, I can relate to the process. For instance, one reader regrets running through a $50,000 inheritance by spending "on inconsequential things." Likewise, about 10 years ago, we received $5,000 when an older relative passed away. We didn't waste all of the money, but I don't remember how any of it was spent. I wish we had just invested the entire sum.

Here are other major financial confessions from T&C readers.

• Overreacting to stock market turbulence: After stock prices dramatically fell in 1989, one reader quickly unloaded a large portion of her investment portfolio. She was terrified that the securities would quickly become worthless. The Lesson: She realized that if she had thought and waited, she would have realized that her portfolio -- a collection of "sound investments" -- would have bounced back. "I would have been much better off," she told T&C. I've also made rapid-fire decisions that I have later regretted. Panic rarely produces smart long-term moves.


• Fashion slave: A trendy closet can exact a hefty penalty, especially when a shopper heavily invests in expensive trends. "I've had to give more out-of-date clothing to charity than I want to admit," one reader confessed. The Lesson: Buy classic clothing. Don't heavily invest in flavor-of-the-month trends. If you have to buy trendy stuff, shop at deep discount stores.
  
  
• Retail Therapy: "Using retail therapy to entertain myself during my forties, instead of applying focus and discipline with my earnings." -- T&C reader. Don't get me started on this topic.




• Delayed retirement planning: "Not understanding in my twenties to invest in my own future.....I started when I was 33. Big Mistake!"-- T&C reader.




• Star-struck by a well-known broker: One reader was overly impressed by an investment adviser from a high-profile firm. Feeling star-struck, she let herself be led into a risky money market account that was created by that firm. The account was touted as a high-returning investment vehicle. The reader lost 50 percent of her assets in that account. The Lesson: "[I] have never followed the financial advice of a supposedly licensed adviser again. I do my own research and invest in known, solid mutual funds with a long history of results."--T&C reader




• Delegating inheritance decisions: One woman failed to take "an active role" in handling her inheritance. The Lesson: "After two lawsuits, I prevailed but lost a lot of innocence, time and the ability to trust the 'good intentions' of family." --T&C reader.

The other major mistakes related to women who invested too much faith in the investment decisions made by the men in their lives, including ex-husbands. More about that in a later post.

Hey Cinderella: Buy Your Own Glass Slipper & Other Tips from Town & Country Readers

Don't wait for the Fairy Godmother or Prince Charming to deliver the glass slipper or other trophies of wealth & status. Don't expect fairy tale endings and don't pretend to be Cinderella. That's just a snippet of the great financial advice from the 12-page special section on "Women & Wealth" in the February issue of Town & Country.

I purchased my copy at the drugstore, but many libraries also carry subscriptions. Or go to your favorite bookstore, where they let you read the magazines for free. The Feb. issue of T&C is a good read for anyone (including the guys) with an interest in building and maintaining wealth. The special section includes: Best Advice I've Ever Received About Money, which features tips from readers. Here's a summary:

1. College Plan for Baby Cinderella: One reader told a touching but insightful tale about her dad, who died when she was four. One day, he read the classic tale Cinderella --you know the deal: the girl, the slipper, the fairy godmother and the prince. Here's what happened when the pre-schooler's dad completed the fairy tale ending about financial salvation through marriage:

The Little Girl:"But what if the glass slipper didn't fit her?"

The Dad: "That's why you're going to Wellseley, so you can always buy your own glass slipper."

2. Keep yourself warm: Scenario: A 20-something woman told an older female friend that she wanted a man to buy her a fur coat. The mentor's advice: "Be able to buy your own fur coat."

The outcome: After receiving that savvy advice, the younger woman ultimately earned enough money to buy three fur coats for herself.

3. The Stocking Hedge: One reader reported that her mom told her to hold onto different shares of stock as a "financial hedge."

The outcome: Those shares, the reader reported, "have consistently paid."

4. Establish a stock-loss point: "I was once told that when your stock is down, you have not lost unless you sell." --T&C Reader

The outcome: She learned to establish stock-loss points and exit strategies for investments. Here's what the reader says: "I watch my stock and set a parameter to be met before I am willing to part with it."

5. The Intersting Beauty: Scenario: One reader told a story about how -- when she was in third-grade -- her stepfather established a bank account for her with $100. Every month, he showed her the bank statement and pointed out how much money her money was making in interest.

The outcome: "This taught me early on the value of compound interest and being aware of my own money." -- T&C Reader

~~~~

Sharon Harvey Rosenberg is the author of The Frugal Duchess of South Beach: How to Live Well and Save Money... Anywhere!, which will be published in the Spring of 2008 by DPL Press.