This week’s guest post is from Mindy Crary, MBA, CFP® practitioner and financial coach. She uses her fifteen years of financial planning experience to support her clients with the energetic, spiritual, and practical aspects of financial management. Visit Creative Money for more information about Mindy and her services. She holds a variety of no-cost teleclasses, the next one being Feng Shui Your Money on February 15th. Mindy is offering a 15 minute free consult to the Financially Smitten community. Contact her at here to schedule one. {You can check out Mindy’s Financially Smitten Big Reveal Interview here.}

Budgeting is a lot like dieting—it might yield some immediate support, but it actually prevents us from succeeding in the long-term.  Why?  Because budgeting prevents us from reaching the ultimate goal of spending consciously.

Budgets can be very motivating when you think you’re making changes that will increase cash flow immediately.  The problem, however, is that real life intercedes and forces you to abandon the budget when you exceed the limit or forget to include a specific expense.

Instead, I advocate conscious spending.  This is the belief that once you examine your consumer habits and understand where you derive the most enjoyment, you can actually better utilize every dollar. {Lora addressed this topic recently here.}

When I got serious about tracking expenses, I was shocked to discover that I spent over $150 monthly at Starbucks! Instead of just slashing that expense, I chose to be conscious about change.  I was able to establish a new “normal” while never feeling deprived.  There are four steps to conscious spending:

1. Gain clarity.  You must track your cash out flow — a distinction that often gets lumped in with budgeting itself — but that gives you more awareness BEFORE you attempt to cut back.  One way to achieve this awareness is to set up a free account on www.Mint.com and review the Trends tab once you have a couple of months of your financial data collected. {For more info about mint.com check out this post.}

2. Decide perceived value.  Perceived value is your “gut” number.  Most people have a built-in barometer that tells them if they are over spending in an expense category.  It’s subjective for each individual.  When I saw the facts of my coffee habit, I immediately realized that although I was spending $150, I was NOT receiving $150 of perceived value.  There were many things I would enjoy more than $150 worth of coffee and pastry!

Some might say I got to the same end result of budgeting: cutting back on a “fun” expense.  But if you had told me to just to cut back, the cutback would have been an arbitrary number, rather than an informed decision.

3. Distill the experience.  I’ll never eliminate Starbucks; that was certain.  So I needed to break down all aspects of the “experience” to figure out what was essential to my enjoyment. I realized that I didn’t care about the pastry, so that could go with no regrets.  What ultimately became my new “normal” was a drip coffee on weekdays . . . and I was perfectly satisfied as long as I could still go hang out and work. Sitting in Starbucks was the most meaningful aspect of that spending experience.

4. Track the new normal.  After a couple of months of experimenting and deciding what worked for me, I realized that I could allocate $40 toward coffee and be completely satisfied.  Only at this point did I actually set up a single budget item in Mint, so that if I went over $40, I would be alerted, and could figure out what went wrong.  Going over budget usually was a reminder to return to consciousness—much like how a meditation practice doesn’t help you achieve 100% stillness, but helps you learn return to the practice, so that over time, you can let go of your thoughts more easily.

The goal of conscious spending isn’t to limit ourselves, but instead to help us increase awareness about how we are behaving in everyday life.  When we start to break down our experiences to achieve the most satisfaction from our spending, we add MORE to life, not detract from it.  We really can have just about anything we want; the key is to be completely conscious about what those things are.

Now it’s your turn:  What are some ideas or challenges you can share that will help others spend more consciously? Share your thoughts in the COMMENTS section below.

With the Financially Smitten’s Big Reveal series I periodically  interview money psychology and personal finance experts about their own relationship with money, using the same ten questions….a bit of a play on the infamous Proust Questionnaire.

My special guest is Mindy Crary, MBA, CFP® practitioner and financial coach. She uses her fifteen years of financial planning experience to support her clients with the energetic, spiritual, and practical aspects of financial management. Visit Creative Money for more information about Mindy and her offerings.

If someone looked in your wallet right now, what would be the first thing that comes to their mind?
That I am in dire need of a laminator for all of my membership cards!  Then, they would notice that I have no credit cards—only a debit card for personal expenses, and another for business.  When I looked in just now, I was surprised to see I have about $9.00 in cash!  I work better without cash, so it’s going to take me a minute to even remember how it got there.

How would you describe your relationship with money?
When we started our “real” relationship 15+ years ago (after too many years of taking it for granted), it was rocky, reactionary and immature—a real starter marriage for me, but thankfully I stuck it out.  I finally realized that my financial status was a reflection of how I behaved in other areas of my life.  Now that I am a more enlightened person, our relationship has never been more strong and supportive.

What’s one thing you wish you could tell your younger financial self?
Don’t give away your power.  I used to follow other people, hoping to gain more definition of who I was.  I used to subordinate everything to help these people become successful, hoping they would help me back at some point.  It never worked.  I didn’t think this consciously; it wasn’t until I began to change myself on the inside that I realized why these relationships never worked out for me.  You CAN’T give away your power without serious consequences.  Even if you feel like you don’t know what you’re doing, you have to put yourself first.  When I started trusting myself before anyone else, my life began to seriously change for the better.

What is your personal philosophy regarding money?
Keep money separate from your personal identity . . . I believe that if we focus on the potential good, possibility and growth from every money experience, especially the bad experiences, we’ll see that it’s not the money that makes something good or bad, but our perception of it.  And having a lot or little money should never make you feel like more or less of a “real” person.

If your relationship with money were an animal, what would it be?
I love animals, and I when I think about money as an animal, I imagine myself in the midst of a kitty mob at the animal shelter . . . some kitties are coming up to me, others are running away playfully and a couple are just needing snuggles and head rubs.  And I get to be there in the thick of it, just experiencing the kitty ecosystem.  The kitties come and go, and as long as I don’t get too attached to a specific reaction from ONE kitty right NOW, I am going to get everything I need.

What would you do with a million dollars?
Again, I love animals, so I would have to make major contributions to my favorite animal charities—plus, I would love to help save Tigers in particular.   That, plus solidify my retirement nest egg and invest in income properties (my current Seattle housing market fascination).

What is your most prized possession?
My cats . . . although I think of them as family, not possessions (do I sound like a serious cat lady here or what?!?).  I was thinking, if there was a fire and I had to leave my home within minutes, what would I take with me?  And nothing came to mind except my kitties and my contact lenses so I could see to get out!  However, my parents have quite a few items that I consider family heirlooms, and I would be heartbroken if they perished in a fire—a beautiful roll-top desk, jewelry passed down for generations and photo albums that could NOT be downloaded!  Wow, I guess I don’t even own my most prized possessions!

If you could buy one thing right now what would it be?
Here’s the thing:  I COULD buy lots of stuff, but I value my cash reserve more than the immediate gratification of having stuff.  I have to ride the knee-jerk wave of “I WANT THAT!”  and let it mellow out a little so that I understand what payoff I think I am going to get from buying that thing.  So the things on my “mellow” list include an iPad and a Mitchell Gold Preston Bed (they don’t have MG stores in Seattle, so shipping would be a pain!).  But if we’re talking about magically having the money that hasn’t been previously allocated to go out and buy whatever I want?  That sort of boggles my mind!  I guess if I had excess money to buy something, it would be to finance more free time for myself and loved ones.

What’s your favorite activity that doesn’t cost a dime?
Reading.  I read very quickly and I love all kinds of books . . . thrillers, mysteries, non-fiction.  And always lots of business reading.  Currently, I am dying for Karin Slaughter’s new book to come out in paperback at the end of the month!

What is your greatest extravagance?
My business.   I made a conscious choice a couple of years ago to build my business over increasing my lifestyle, and I have been SO grateful for the people I have met who support and help me now.    This year I’ll probably raise my lifestyle expenses a little bit, and I am going to be adding in regular massages!

Want more? Click here to read Big Reveal Interviews from other celebs in the financial world!

How apropos that January is Financial Wellness Month. But, what exactly is ‘financial wellness?’ Although there are some basic parameters of healthy financial living that most people would agree upon, I do think it can be a subjective experience.

I’ve delineated the 12 tenets of what I believe depict a ‘well’ relationship with money–or the financially smitten lifestyle–as I like to call it.   It’s clearly laid out in my one-page Rock Your Money Manifesto {Grab a copy of this complimentary one-page download if you don’t already have one. I’m told it’s quite inspiring!}.

But, I got curious about how others would define this term. So I reached out to some of my favorite female financial divas to get their take on how they define “financial wellness.” Read on to hear their thoughts:

 “Financial wellness is telling your money where to go instead of wondering where it went! That means having budgets (stands for Baby-U-Deserve-Getting-Every-Thing) to plan your spending and work you love to do that creates the income you love to spend! Save some, invest some, spend some, and give some away joyfully and happily. And always affirm ‘People love to give me money!’”
~ Chellie Campbell, author of “The Wealthy Spirit” and “Zero to Zillionaire”

“Financial wellness means living a balanced life with a balanced budget that not only allows you to pay off debt and save for the future, but to enjoy your life today.”
~ Liz Weston, personal finance columnist for MSN and AARP and author of the books “Your Credit Score” and “The 10 Commandments of Money.”

“To me financial wellness means your thoughts and habits about money are in line with your goals. When you are financially “well” you begin to direct your money to work for you instead of being a ruled by a financial lifestyle that is out of control. It doesn’t have to mean you are debt free today with a fully padded emergency fund but financial wellness is the first step in getting there!”
~ Jenny Kerr is the owner and creator of the site The Jenny Pincher where she educates single women on getting out of debt &  building wealth.

“Financial wellness is like a jazz riff. It evolves as you grow, yet is also rooted in three core tenants: (1) Identify all obligations, expenses, and activities in your life that do not produce joy & eliminate as many as you can. (2) Commit to learning the basics of money management so you can maximize the dollars you do have.  (3) Practice consciously spending money in ways that authentically make your heart really sing. Repeat!”
~ Manisha Thakor, personal finance expert & author at MoneyZen.com.

“Living financially healthy and making friends with your money is an investment you make in yourself.  Create financial wellness by developing a spending plan, getting out of credit card debt, understanding your credit report and score, investing regularly and automatically and determining your goals and taking action. Make the investment now and you’ll have a better quality of life—both personally and financially—in the years ahead.”
~ Marcia Brixey, author of The Money Therapist: A Woman’s Guide to Creating a Healthy Financial Life   www.moneywisewomen.net

“Financial well-being includes: 1) Getting out of debt, 2) saving 13+% of your income for retirement, 3) building an emergency fund with 6 month of income in it, and 4) getting the right insurance (health, auto, etc.). Then, it’s about balance — if you want to buy those hot new platforms, skip going out to dinner for a while; if you want to hit the slopes with your new beau, avoid the mall for the next month of so.”
~ Catey Hill, author of “Shoo, Jimmy Choo! The Modern Girl’s Guide to Spending Less and Saving More”  www.shoojimmychoo.com

“Financial wellness means having the ability to afford and provide a healthy, rich and meaningful life for you and your family. It means being in control of your spending, saving and even to some extent your earnings. Financial wellness means being financially empowered. It means having a positive financial influence on your children.”
~ Farnoosh Torabi, personal finance expert and author of Psych Yourself Rich, www.farnoosh.tv @Farnoosh

I hope these words of wisdom inspire you to design your own personal definition of financial wellness. I’d love to hear what element{s} of one’s relationship with money are important to YOU for it to be classified as ‘well.’ Please share your thoughts in the COMMENTS section below.

My special guest for this post is Olivia Mellan. She is a psychotherapist, money coach, speaker, author, and business consultant.  One of the pioneers in the field of money psychology, she is an expert in couples communication, stress management, and conflict resolution. She has been a guest on Oprah, the Today Show, and ABC’s 20/20, and other nationwide media. You can read her BIG REVEAL interview here.

My background is in psychotherapy, but when I started doing what I call Money Harmony work in 1982, I discovered that when you explore your lifelong relationship to money, it’s a tremendous opportunity for growth and transformation—practically, emotionally, and even spiritually. Helping women take charge of their moneylife can sometimes do more for their sense of self-worth, self-esteem and self-love than years of psychotherapy focusing on other areas.

My work has since come to incorporate gender differences between men and women when it comes to money. In this article I’m going to highlight a few of the thoughts, beliefs, and behaviors of women that do not serve them when it comes to their moneylife. If you see yourself in any of these ways of being with money, you can take steps to move toward full empowerment and serenity.

Women’s Lack of Confidence:
You might be surprised to learn that women’s investment clubs actually out-perform male clubs. But many women still lack confidence when it comes to money management. Why? Because women don’t claim their expertise in something until they thing they know everything. They don’t “wing it” like men do. 

So what to do?  Two suggestions are to (1) find women “money mentors” who will support your learning, and/or (2) join a women’s group or women’s investment club to collaboratively learn about money, investing, and all aspects of money mastery.

Why Women Need Some Separate Money:
In the course of doing “Money Harmony” work with individuals and couples, I have come to believe that all women need some separate money and a credit card in their own name. Why?  I believe that women’s main challenge in intimate relationships is learning to give without losing themselves—without disappearing into the greater “we.”

Conversely, men’s main challenge in an intimate relationship is to learn how to merge and connect. I believe that women having some separate money (apart from the valid practical reasons: women outliving men; and ½ of first marriages ending in divorce) is a symbol of a healthy self from which to merge.

Even many women who have spent their whole marriage merging all the money will often receive an inheritance of some sort later in life. They may want to keep some or all of it in a separate account, which may hurt or anger their partner.

Once men and women understand these gender differences and the different challenges of intimacy, solutions that work well for both can be negotiated. But I maintain, all women need some separate money.  If your spouse doesn’t understand why, have him read this article!

Women’s Difficulty In Negotiating For their Own Economic Self-Interest:
Most women are notoriously bad at asking for raises, coming to their first job interview after college or grad school and negotiating for more money than what is initially offered, and tooting their own horn in general.

Women tend to value connection over success and money, so they want their boss to be happy above all.  Even women who do lobby for their own economic self-interest are still, in some situations, punished by both male and female bosses for being too “aggressive.” How unfair and sexist is that?

So we women need to slowly, gently, sensitively learn to claim our expertise, our worth in work, and document our achievements and our strengths so that we learn to ask for what we truly deserve when it comes to money.

Knowing that all women will be single at some point in their lives, we all need to learn that being healthily self-oriented is not “selfish” at all. Modeling good self-care for our kids and families is an important life lesson; and asking for what you truly deserve is part of that process.

What gender differences around money have you noticed, either in your current life or from growing up in your family? Have you found any creative solutions? I’d love to hear your thoughts in the COMMENTS section below.

If you’re like most women I suspect you struggle with what we call in the psychotherapy biz a “mean, nasty ol’ super ego.” You know, that little voice in your head whose full-time job it is to constantly inform you that you’re not smart enough, talented enough, sexy enough, blah blah blah. You know the litany. And I bet your own little voice has a field day when it comes how you manage your money.

Well, I’m going to let you in on a trade secret….

That voice, it’s also trying to protect you, to keep you small and safe. Berating ourselves is a form of psychological defense. It keeps you stuck, and away from whatever in our lives needs attending.

So, how do you get unstuck and let go of that pesky little bugger?

It’s all about cultivating self-compassion. I’ve previously shared about financial self-forgiveness here and here, but recently came across two Forgiveness Rituals in the work of women’s health pioneer Dr. Christiane Northrup that I want to share with you. I took the liberty of doing a little Financially Smitten mash-up with them because they are just as valuable when it comes to financial self-forgiveness.

I encourage you to choose one {or do both if you’re a fast-tracker!}, and commit to leaving your past financial transgressions in the dust. Remember: No self-berating today will undo what was done in the past. Get ready to say sayonara:

Ritual One:
Imagine your Higher Self, your guardian angel, or some other supremely benevolent Divine figure standing in front of you, radiating total love and compassion. Then, watch as she reaches out and puts her hand on the top of your head. She calls you by name and says:

“I now forgive you for all the times that you maxed out your credit card, lied to your partner about something when it came to money, declared bankruptcy, waited until the last minute to do your taxes and/or filed an extension, misplaced important financial papers, paid a bill late, or didn’t keep your promise to yourself or your money. I forgive you for being human and for not being perfect. I forgive you for ever doubting your ability to manage your financial life or feeling afraid.”

{Note: Make this your own by personalizing it based on your own money history.} Allow the feeling of forgiveness to seep through your skin, into your body, and all the way into your heart. Feel it radiating throughout your entire body. Feel yourself being engulfed in the loving light of forgiveness.

Ritual Two: {Dr. Northrup recommends doing this exercise for 40 days}
Light a candle and say any prayer that resonates with you. {The Serenity Prayer always comes in handy.} Once you’ve said your prayer, say aloud:

“I now forgive myself for everything that I didn’t know or do in the past regarding my financial life. I release myself to my highest joy and purpose in life.”

In closing, Dr. Northrup recommends not judging the forgiveness process, simply stick with it. She uses the analogy that using these practices is like “cleaning your emotional house.” With the Financially Smitten spin, I encourage you to frame it as sweeping out all those dusty negative emotions in your financial house.

Do you struggle with self-forgiveness for past financial transgressions? Is there anything that you’ve found helpful with this process? If so, please share in the COMMENTS section below. I’d love to hear your thoughts!