“In business, you don’t get what you deserve,
you get what you negotiate.”
~ Chester L. Karras

I recently wrote an article about a holistic concept of net worth and in the book, Women’s Worth: Finding Your Financial Confidence, author and certified financial planner Eleanor Blayney devotes a complete [excellent] chapter on ‘human capital.” She states: “…our most valuable asset…is our ability to turn our intelligence, education, skills, and experience into income through work.” She goes on to point out that significant wealth is seldom the result of investments in stocks, bonds, and other traditional assets. Rather, our human capital is the path to wealth building.

Blayney shares an illuminating worksheet that calculates the lifetime value of YOUR earnings and shows how things such as asking for a raise, leaving the work force for three years to parent full-time, or getting retraining impacts the value of human capital over time.

She asserts that “the value of your earnings are every bit as important to grow and manage as your investment accounts.” One way to do this to this is to obtain and sustain a competitive standing in the job market. Blayney shares, “Studies have shown, for example, that a college education can increase lifetime earnings by as much as $1 million.”

However vital keeping yourself re-tooled is, it is trumped by an even more important piece of the equation: “asking for more.” Blayney points out that this is something that men are MUCH more comfortable with. The current wage gap means women earn 77 cents for every dollar earned by men in the same job. This may not seem like much, but to put it in perspective, for female college graduates this will result $1.2 million dollars less in earnings over their working life then their male counterparts!

So far, this is my favorite sentence in the book–and may even be one of the most powerful statements I’ve read my whole life:

“I can state with certainty that the investment of time and money spent on improving [negotiation] skills can make women wealthy in a way that simply becoming savvier about investing cannot.”

I hope this is music to some of your ears, because I know how much you ladies dread comprehending your financial portfolios. Now, I’m in no way saying ignore learning about your investments, but it seems to me that there is something super efficient about using negotiation skills to uplevel one’s income. Blayney attests that it is the biggest bang-for-your-buck ROI. AND, negotiating skills can be leveraged in every area of our lives, not simply in our boss’s or client’s office. Think about how beneficial those skills could be in getting your partner to take out the garbage or accompanying you to that chick flick you’re dying to see!

So, ladies, be on the lookout for more information about developing successful negotiation skills because I’m seeing how important this is to rocking your money mojo–and we are going to be on it!

YOUR ACTION STEPS TO FINANCIAL SMITTEN-HOOD:

I’d like you to pull out your Money Journal and write about your response to this article. What images, words, feelings come to mind when you think about “asking for more” and/or negotiating? These are not typically feminine qualities, so I imagine there may be some conflict arising. I’d love to hear your thoughts about this, especially regarding the gender piece. Please share them with me in the comments section below!

I’ve started reading Eleanor Blayneys’ “Women’s Worth: Finding Your Financial Confidence” for August’s Virtual Book Salon and am loving what she has to share. As a Certified Financial Planner who focuses on women’s financial issues and struggles, I’m finding that her book speaks to me. One of the points she makes early on is that is important for us to ‘know our numbers.” She parallels our physical health to our financial health. Most of us know our blood pressure, our cholesterol levels, our weight, etc. Yet, how many of us have stepped on the ‘credit score scale’ or know our net worth, our tax liability, the total of our monthly fixed expenses? Watch Eleanor talk about the importance of knowing our numbers in this short video:

The past is never dead, it is not even past.  ~William Faulkner

Childhood events shape how we relate to money as adults, and I always ask my financial therapy and money coaching clients about their first memory of money. These seemingly innocent experiences are a virtual goldmine of information, often creating a template for future beliefs, feelings, and behaviors regarding money. The memories I hear range in texture from traumatic to more benign. I’ll share a few examples from my work with clients [all names have been changed to protect privacy] to illustrate the link between childhood experiences and present day behaviors with money.

One of my money coaching clients, Andrea, recently shared an early memory involving the painful way she received allowance from her father, who was quite rigid and parsimonious. On Saturday mornings he’d come home from a visit to the bank and give Andrea her the allowance. It’s how he did it that is so meaningful. He would take each crisp, new dollar bill–crumple it a bit to ensure that none where sticking together–and hand each one individually over to her. She would be flooded with shame as she stood there, watching and waiting for her weekly allowance to be literally doled out to her. When Andrea first came to work with me, she had a very hard time asking for and receiving money. As Andrea shared and released all the underlying feelings regarding these “pay days,” and came to understand the messages she was holding onto about receiving money-messages that where not serving her–she was able to cleanse this toxic shame from her relationship with money and actually asked for and received a significant raise at her job.

Another coaching client, Brenda, experienced a very different type of interaction with money and her father. When Brenda was very young, her father worked as a janitor at a nightclub. He would arrive home early in the morning and give her the loose change and other trinkets he found on the floor of the club, remnants of the evening’s revelry. They would spend cherished time together counting the money. Brenda remembers vividly the feel of the coins and the smell of the paper currency, and when they completed counting all of it the money would be dropped into a coffee can. These are fond memories for Brenda and to this day she keeps her loose change in a coffee can and has a strong preference for using cash versus credit cards or checks.

Contrast this with my client, Linda, who actually hates to carry cash on her. One of her earliest memories is of being sent to the grocery store down the block with a few dollar bills to buy some milk. She arrived at the store to discover that some of the mo’ney had dropped out of her hand along the way. She was in a complete panic, didn’t have enough money to purchase the milk, and was yelled at for being “irresponsible” by her mom upon her return home. So to this day, Linda struggles with trusting herself to carry cash in her wallet and has a preference for credit/debit card purchases. In our money coaching work, she is focusing on this trust issue with her finances, now realizing how this belief system also dictates her very conservative investment style. Not trusting herself is costing her the more abundant returns on her portfolio she could benefit from were she able to embrace a more diversified mix of financial products.

It’s not unusual for childhood money experiences to include an element of loss, especially when you consider the absent-mindedness characteristic of childhood. Some other common feelings and themes that emerge include deprivation, envy, stealing, feeling independent or dependent, worry, ignorance, guilt, feeling controlled or manipulated, or injustice.

Viewed from the other side, one of my clients shared with me a story about telling her young son, exhausted by his relentless requests for an ice cream cone, that she didn’t have any money to buy one. Her son, not deterred by this response, countered with “Just go to the wall and get some more.” It took my client a moment to realize that he was referring to witnessing her withdrawing cash from the ATM! So here–out of the mouth of babes–is another example of how belief systems about money are formed from an early age.

No surprises here…grab your money journal or a pad and pen and start reminiscing. Let your mind wander and see what arises when you think about money during your childhood, trying not to censor any thoughts that enter your mind. You may find that one particular memory feels the most significant. Use this one to mine for your insight gold. Try to recall the specifics of the situation. Here are some questions to guide you on the journey:

• What was happening?
• How old were you?
• Are you alone or are there others there with you?
• Where were you?
• How did you feel?
• Is there a specific message about money you can distill from this memory… either one that you specifically heard or somehow interpreted?

Once you have explored this, now reflect on your current relationship with money and look for parallels, be they behaviors, beliefs, or feelings. Ask yourself if there is anything about this money memory that is keeping you “stuck in time” when it comes to managing your finances today. Is there any healing that needs to occur for you to leave this in the past so you can create the relationship with money that truly serves you today?

I’d love to hear about your money memories! Please share them below in the comments!

“I’m not afraid of storms, for I’m learning how to sail my ship.”
~ Louisa May Alcott

I recently read Barbara Stanny’s brilliant book, Prince Charming Isn’t Coming: How Women Get Smart About Money, which focuses on the importance of women taking ownership of their financial lives. She shares some sobering statistics, gathered from surveys conducted by financial services companies:

• 47% of women reported not being knowledgeable about investing
• 57% of women found “entrusting their retirement savings to the stock market” frightening
• 48% of women lack the knowledge and skills to handle investments
• 62% of women graded themselves a “C” or lower in financial knowledge, with only 1% giving themselves an “A”

And sadly, 7 out of 10 women are not able to retire because they cannot afford to. Ladies, we need to work on this! Unfortunately we continue to earn less than our male counterparts and we live longer…this is NOT a good combination!

Many smart and savvy women feel ‘money stupid’. As Stanny says, “we zone out, fog up, or shut down” when it comes to financial matters. And to be honest, I found my own money fog rolling in at certain points as I was reading her book. It’s easy for this to happen…to feel like a stranger in a strange land [and without GPS!]. Learning about this stuff takes time, patience, and perseverance for sure. But what I found especially helpful is that Stanny reminds us that all “learning follows a logical and predictable progress.”

She has mapped out the following four sequential stages of the learning curve when it comes to financial competency:

Stage 1: Unconscious Incompetence
This is the ‘ignorance is bliss’ stage. We don’t even know what we don’t know, and are quite happy about this! There is a tremendous temptation to stay at this stage and unfortunately it is often a crisis of some sort that jarringly knocks us out of it. Although kudos to women who are able to self-motivate themselves out of it, perhaps with some sense that it is in their best interest for their financial future.

Stage 2: Conscious Incompetence
This phase starts the moment we take action, be it to glance curiously at the financial tables in the newspaper, watch the nightly business news, or pick up a book on investing for example. Once the door is open we begin to realize how much we don’t know, which can be disturbing, disarming, and disheartening. The bubble of denial has officially popped! Stanny explains that this is the stage most women are most eager to flee from. So, it’s extra important to be gentle and patient with ourselves here, knowing and trusting that we are beginning to lay the foundation for financial competence.

Stage 3: Unconscious Competence
In this stage, we’ve begun to absorb the financial information we are learning–but like freshly poured concrete–it has not yet ’set.’ It’s an incubation period of sorts, with things being integrated ‘behind the curtain.’ Although we may experience fleeting moments of ‘knowing,’ we actually don’t realize how much progress we are making. This stage is often marked with self-doubt, frustration, and a sense of overwhelm. Hold tight girlfriend because relief is right around the corner!

Stage 4: Conscious Competence
Aaahhh…things are starting to make sense! The pieces of the financial puzzle do fit!
In this final stage–which can feel like a dramatic shift or emerge gradually–we realize and truly own our knowledge and competence. We can speak coherently about finance and make sound investment decisions. And, we start to feel in control of our financial future. Bonus!

Stanny notes that how quickly we move through the stages depends on our level of motivation, our prior education, and the amount of time we are able to devote to this endeavor. It is important to know the stages of the learning curve, so we can anticipate them, plan for them, tolerate them, and reach the finish line of Conscious Competence!

Take some time to think about how you have learned and mastered other knowledge throughout your life, especially any subjects that have engendered fear or anxiety. Reflect on what this process was like for you. Do you remember following a similar learning curve? Leverage this self-awareness to inform your own path towards financial competency.

Another self-exploration that can be helpful is to identify what your particular ‘learning style’ is, and adjust your learning plan accordingly. There are three main types of learners: visual, auditory, and tactile/kinesthetic. Take this quick and easy online quiz to assess your learning style and get some helpful tips on how to capitalize on your particular style.

“ We trifle when we assign limits to our desires, since nature hath set none.”
~ Christian Nevell Bovee

Throughout our lives we make tens of thousands of purchasing decisions–some more thought out than others. Knowing the difference between our “wants” and “needs” is an important part of learning to manage our money in a mindful and empowered way. It’s easy to spend money. What can be more challenging is spending money in a way that is truly attuned with our values and desires.

One simple way to guide conscious spending is to get super clear on our needs and wants, and actually list them all out on paper:

NEEDS are the essentials–the basics of life that you must have to survive: food, shelter, clothing, medical care, etc.

WANTS are basically everything else: eating out, entertainment, travel, gifts, gym membership, etc.

One of my mentors, Mikelann Valterra from the Women’s Earning Institute, offers some parameters to delineate ‘needs’ and ‘wants.’ She suggest analyzing:

• What is all the STUFF you need or want?

• What are all the SERVICES you need or want?

• What are all the EXPERIENCES you need or want?

In addition to ‘needs’ and ‘wants,’ I like to tack on another list to the mix: a WISH LIST! This is where you start to dream–digging deep–and imagine things that might somehow be ‘off-limits’ to your conscious mind. These are usually the desires imprisoned by limiting beliefs. I love to help clients with this process of opening up their desires to discover wishes they fear may be unattainable for them.

Personally, I adore hearing my client’s wishes! This is often where their ‘dreaming big’ and life visioning come out to play, and it is a delight to work with them to create a plan on how to achieve them. I push the envelope to uncover that part of them where their true desires hide, so they can come out in a safe space and be honored. I hear things such as “I want to hike the Appalachian Trail,” “I would love to get a weekly massage,” or even “I want to start my own business.”

Obviously, needs, wants, and wishes are completely individual, and will differ widely. What is important here is for you to get clear on what these are for YOU.

There are three valuable benefits from creating such lists:

1. This information can be used to support aware and empowered financial decision making that is aligned with the larger vision you hold for yourself and your life.
   

2. Engaging in this exploration can inspire you to think about the ways you can start earning more money to obtain your goals.
   

3. When we are able to map out our financial wishes and make a plan for bringing them to fruition, it results in a powerful sense of self-sufficiency. Think about what it would feel like returning home from a fantastic vacation with simply some souvenirs, rather than with a boatload of debt. Yes, you can be your own fairy godmother and grant yourself ‘wishes!’

As an added bonus, creating these lists for yourself also makes things easy-peasy when someone asks you what you want for your birthday, holidays, etc. Just whip out your handy lists and offer some suggestions!

That’s right…it’s list making time! I encourage you to create a sacred space for yourself when doing this exercise. Make sure you have the spaciousness of time, light a scented candle, sip on a cup of your favorite coffee or tea, play some relaxing music…what ever gets you in the mood to dream, and dream BIG!

1. Start by making lists of your needs, wants, and wishes, and put a dollar figure next to each of them. Try to get as specific as possible, thinking both short and long term. For example, if a wish might be ‘trip to London,’ do some preliminary research and determine a guesstimate of what this will cost. Keep on dreaming until every last wish is extracted. You can always review, prioritize, and modify your lists. This is an evolving process as new desires emerge and existing ones are obtained.
   

2. Once your lists are clearly itemized, before you buy something ask yourself, “Do I need this item, or do I just want it?” Knowing what’s on your lists will help you make a swift and informed decision. It will prevent impulsive, unnecessary purchases, and keep you on track with your true goals. You might want to carry your ‘wants’ and ‘wishes’ lists in your wallet or on your PDA to keep them close at hand and top of mind. This will ensure that what you buy is not some random fleeting desire.
   

3. For some Financially Smitten extra credit, set up a saving account at ING Direct Bank, where you can itemize up to 25 sub-savings accounts! Think about it…you can have saving accounts for 25 short and long-term desires.
   

4. Use the space and energy of the Financially Smitten community to hold your intention by declaring your wishes below!