“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!

“We can tell our values by looking at our checkbook stubs.“
~Gloria Steinem

I recently attended my mentor Barbara Stanny’s Overcoming Underearning workshop. She shared a number of tips and tools with us, but one that resonated strongly with me is the values clarification exercise. [You can find it in her Overcoming Underearning book.] She provides a long list of life values, such as family, beauty, success, travel, etc. and asks you to choose your top ten. This is actually much harder than you might think! I felt a sense of completion having come up with ten, but was then asked to whittle the list down to my top five! I found this to be very challenging. But, it was also incredibly illuminating. There is something deeply grounding about knowing your top five values, and I find them a helpful decision-making compass that relates not only to money, but life in general.

One of my top five values is learning. I am always taking classes, workshops, and working privately with mentors. However, one of the things I found recently is that I was not taking the time to read books on my [quite long] reading list. And true confession, this is what prompted me to launch the Financially Smitten Book Salon. I wanted this accountability…to know that each month I need to show up and lead a discussion about a book on money psychology. [I do hope you will join me for this opportunity to nurture YOUR relationship with money!]

Another one of my mentors, Bari Tessler from Conscious Bookkeeping, also speaks about the importance of knowing one’s values. In fact, she has designed a brilliant and creative method to track one’s finances, which she refers to as ‘values-centered’ bookkeeping. Bari advises her students to come up with meaningful and fun categories for what is typically a staid ‘chart of accounts.’ So for example, what might normally be referred to as ‘Rent’ or ‘Mortgage’ is now coined ‘Sweet Sanctuary’ or ‘Relaxing Refuge.’ It puts a whole new spin on budgeting and accounting! She also encourages her students to review monthly numbers to monitor if the ways we are using our money truly reflect our values.

This was enlightening for me recently as I witnessed the expenditures in my “Soul Restoration” category waning. I had the feeling that I was working too much, but looking at the numbers really hit home for me. As they say–numbers don’t lie–and I had an opportunity to revisit how I was spending both my money and my time. So…a museum date got scheduled!

YOUR ACTION STEPS TO FINANCIAL SMITTEN-HOOD:

Get clear on YOUR values, girl! Here are a few suggestions to guide you:

• Google ‘values clarification exercises’ for a variety of free web resources

• Ask yourself: How would I spend the next six months if I found out that was all I had left to live?

• Write your own obituary, putting into it all of your life long accomplishments of which you are proud and why you are proud of them. If you died tomorrow, what would you like others to say about you?

• Imagine you have received a million dollars. What would you now do with your life?

These exercises will help provide insights into what is genuinely important to you.

It is not always easy to make decisions and take actions that are in synch with our true values. As I shared above with the Book Salon example, think about how you can create “accountability” to support yourself to live a life aligned with your values. I’d love to hear what your ‘top five’ are and if knowing this has changed any decisions you are making, especially regarding money. Please join the conversation in the Comments section below!

I am thrilled to announce the launch of the Financially Smitten Book Salon! Each month we will read a title on money psychology or personal finance and gather on a conference line for a guided discussion led by yours truly. There is no fee to join, but you will need to purchase or borrow the selected title.

For the inaugural July 14th Salon we will be reading a wonderful book, Money, A Memoir: Women, Emotions, and Cash. In this humorous, insightful sociological study-cum-memoir, author Liz Perle boldly exposes her own financial fears and struggles and tells the tale of how she came to reclaim her financial and emotional freedom. She affirms that women cannot afford to be ambivalent about money and inspires the reader to become aware of their own beliefs and values, thereby being able to make empowered financial decisions.

Reserve your virtual seat for the Book Salon TODAY by clicking here.

The Women’s Institute for Financial Education, WIFE.org is the oldest non-profit organization dedicated to providing financial education to women in their quest for financial independence. Their website provides information on everything from investing to taxes, as well as resources specifically for women dealing with divorce [including workshops nationwide] or widowhood. Visit wife.org and if you like what you find, I encourage you to sign up for their newsletter. It always contains something of interest to expand your financial knowledge base.

“Lasting net worth comes only when
you have a healthy and strong sense of self-worth.”
~Suze Orman

Do you know what you are worth, and is it that important anyway? Net worth is taking center stage as many financial bloggers publicly track theirs’ monthly, and there is even a website, NetWorthIQ.com, where you can “track, share, and compare” your net worth with others on the site. This is taken to a bit of an extreme in my mind, but the sad reality is that most of us are clueless when it comes to knowing our net worth. We blindly acquire assets and incur debt without knowing its impact our bottom line.

So what exactly is net worth? It is the number you get when you subtract your total liabilities [everything you owe] from your total assets [everything you own]. It is a point in time measurement, as it typically changes daily, and is an important financial planning tool….especially when it comes to planning for financial goals. Ideally it should be a positive number, where you have more assets than liabilities. Net worth is an informative barometer of your overall financial health, and in particular the direction it is heading, if you monitor it quarterly or annually.

Unfortunately some people confuse net worth with self-worth, and any discussion about net worth begs the question, “What really is ‘true’ wealth’ anyway?” I invite you to broaden your notion of net worth and want to share some expansive thinking about ‘assets’ and ‘liabilities’ from two mentors I have studied with.

One mentor, Spencer Sherman, financial planner and author of The Cure for Money Madness, offers a unique tool for assessing net worth from a more holistic viewpoint, what he calls Actual Net Worth. For example, we so often take our health for granted, which is actually our most precious asset. Sherman challenges us with the question, “Would you prefer to be a sick billionaire or a poor person in excellent health?” Given that most of us would prefer the latter he surmises that health must have a monetary value. So in addition to the monetary assets included in a traditional net worth statement, Sherman’s Actual Net Worth worksheet includes “human assets” such as health, potential lifetime income, untapped skills and creativity, friends and family, and service to the world.

Another mentor, Mark Silver, who teaches a course entitled, The Heart of Money, questions the concept of “liabilities” in a similar way. He views financial debt as a “dependency” on others for a service or item previously provided. He asserts that all of us have liabilities/dependencies even if they are not financial in nature. He asks us to examine our lives and find areas of dependence where we owe something that feels emotionally uncomfortable to us or where we feel ‘indebted’ in some way, and how this is impacting the “net worth” of our lives.

Approaching ‘net worth’ in this holistic way keeps things in perspective and provides an opportunity for us to embrace ALL our assets, as well as an opportunity to evaluate the ‘cost’ of carrying non-financial liabilities in our lives. It also reminds us that focusing purely on money as a measure of ‘net worth’ is an overly simplistic and potentially devaluing vantage point.

YOUR ACTION STEPS TO FINANCIAL SMITTEN-HOOD:

Visit Spencer Sherman’s website and download his Actual Net Worth worksheet. It is available for free on his home page by clicking here. Take some time to complete it and reflect on what it’s like to know your actual net worth number. Then, consider any non-financial liabilities, or “debts” you are carrying that are diminishing your ‘bottom line.’ Are there any situations and/or relationships that feel like ‘debt’ to you–in time and/or energy? What steps do you need to take to unburden yourself from this indebtedness?

What number did you come up with? I would love to hear about your experience with this exercise and thoughts in general about the notion of ‘net worth.’ Please share them in the Comments section below: