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Facing Financial Fears

The Money Nerve

83% of Americans have at least one financial fear that keeps them up at night. And not surprising, almost a third worry about retirement and healthcare costs. Most people would rather ignore their nagging concerns and continue suffering in a familiar pattern rather than facing their fear and making a change.

Where are you really?

You can’t get to your ultimate destination if you don’t know your starting point.

The first key to alleviating your fear is to be honest. The more accurate the assessment, the more secure you will be in your position. You might be frustrated, but you will be aware of your financial truth and knowing where the breakdown occurs allows you to fix some of those issues.

Turn your insecurity around:

• Evaluate your social circle.
• Surround yourself with supportive friends.
• Budget truthfully so you know your financial position.

Review your income and expenses, explore where you spend your time and track down hidden costs. When you do these things, it is crucial to be honest with yourself. What do you actually earn? What do you really spend? What do you pretend is not relevant to your budget?

Most people “round up” on their income and “round down” on their expenses. If you want to get ahead and be financially successful, always lower your income estimates and raise your expense estimates. This trick will help give you a cushion for the realities of your inflows and outflows of cash.

The best way to face your financial fears is to create a budget. Having guidelines can bring comfort and structure to your plan. Start small & build your financial muscle over time. Do you have a savings account? Try to put a small percentage or dollar amount with each paycheck. If you get a raise, continue to live on the former salary & put the increase in the bank. That is a painless and highly effective more to build your wealth.

Check some of the tools we have placed HERE to help you jumpstart smart financial choices.

Don’t be scared ~ Be proactive!

Bob

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Focus on Your Future

the money nerve

Have you ever heard Aesop’s fable about the grasshopper and the ant?

The grasshopper loved hopping about and singing during the warm summer. One day he saw an ant working hard to move an ear of corn and cried out, “Why in the world are you collecting food on this bright and beautiful day? Stay and play with me!” The ant shook his head and said, “I am saving this for the cold winter, and you should do the same.” The grasshopper laughed and went off to play but perished during cold weather. The moral of the story: It is best to prepare for the days of necessity.

The story seems harsh, and many people wish for a fairy tale ending where others solve all of our financial dreams (i.e., winning the lottery, getting an inheritance, marrying a rich spouse). In 1934, Disney created the delightful film short “The Grasshopper and the Ants” where the Ant Queen and her colony felt pity for the grasshopper and took him in during the winter. Have you ever seen the video? Check it out below.

Sometimes a project or goal seems so far away that it is easy to procrastinate. There is so much time left and we get bogged down in our busy-ness, that daily decisions feel more urgent and important than long-term investments in life.

Reality check: It’s your life; it’s your money! How are your plans for retirement going? Do you have savings for a rainy day? Life happens – when you least expect it.

Saving and spending are part of living a life of abundance. Let’s change the words being used from short-term desires like “I need those shoes” to some long-term goals such as, “I am making better choices with my money, to maintain my lifestyle when I get older.” As you discover the best balance between living for today like the grasshopper and stashing some wealth like the ant, you will come to realize that both are investments in yourself.

Ignoring regular maintenance on your car because you don’t want to spend the money can result in major car expenses down the line. In the same way, poor spending or saving habits may also result in a later retirement and fewer choices down the road. What should you do?

Here are three easy ways to get started:
1. Take the quarterly plan you created last week and imagine retirement is a “big purchase” like a house.
2. Determine the price of this long-term goal (the amount of money needed) with this calculator.
3. Tweak your quarterly plan (budget) to begin investing toward your targeted “quality of life” in your later years. You will be glad you decided to invest in yourself!

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CREATING A BLUEPRINT FOR LIFE

3x3 Blueprint for SuccessA builder doesn’t just go out and build a 10-story building. First the owner and the architect ask questions to define the finished structure: How tall will the building be? What will it be made of? How much will it cost? How many people will be needed and what resources will it take to build?

Let’s take that same approach with your financial plans.

If you are unhappy about your debt, make a plan to pay it down while curbing your current spending habits.

 

Begin by asking questions.

What is working for me?
Where am I having challenges?
How can I overcome my fears and move into a new direction?
What is my goal?
What would be my first step?

Facing your finances is the first step. There is no physical harm in facing your financial reality. No one has ever been stabbed by a bank account! You may feel a pang in your stomach – and you are still fine. Acknowledging your financial situation may feel painful emotionally and taking steps to confront your current situation is a good start.

The second step is finding a friend or financial coach to support you. Discuss best practices and prepare an outline for the next three months. A series of small steps or goals will lead the way to a more successful long-term goal. Often the mere presence of a plan can alleviate emotional turmoil.

It is your money and your life, so the third step is to implement the plan for the next 90 days.

Re-evaluate your finances to determine where you can update or tweak your quarterly plan. Be realistic and honest. Did you round up your income and round down your expenses? Did you forget to account for eating out? Sift through any unknowns that popped up and add that information to your next 3-month outline for a better outcome.

By implementing conscious choices and thoughtful actions, you are building a blueprint for your life. Setting short-term plans builds the foundation for long-term success, with a lifestyle you envisioned and crafted.

Begin today!

Bob

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BENEFITS OF JOURNALING

JournalingThe process of journaling is not a new concept; in fact scholars have found evidence of people writing down their thoughts in 10th century Japan. You may define a journal as a listing of activities or maybe jotting down your secret dreams and desires in a diary.

Or you may find sketches and free form phrases work better than writing your “life story” each day. There is no right or wrong way to journal. By experimenting, you can discover the best avenue for expressing your inner thoughts.

I like to define daily entries in a journal as a mental mapping exercise.

By knowing where I am, I can easily target where I want to go. Visualizing is a major component in moving forward. Each day, I like to create a mental space to formulate my schedule for the next day and then spend some quiet time to listen to my thoughts. Thirty minutes would be ideal, but if you are just beginning, find 5 minutes just for you – in your busy, hectic life. It will make a difference.

Don’t overthink this process. You may just write down one thought or vent about one bad experience in your life. Some people keep a notepad handy to write in as during a coffee break. Or you may prefer to recap the day right before going to bed. If you love your mobile device, there are apps for journaling!

When you first begin to carve out small moments of quiet time, echoes of what others say about you may distract you. Or you may dwell on preconceived notions handed down by parents, friends or colleagues. Push those jaded voices aside and pay attention to your thoughts, your dreams, your values and your goals. This focused contemplation will allow you to visualize a new dialogue with yourself, new possibilities and a fresh approach to old patterns.

Journaling or “mental mapping” gives you the power to visualize change and become the image you see in your mind. Flipping dreams into reality comes from a deep and secure awareness of who you are and, how you feel about life. That knowledge allows you to make choices based on clear and conscious intentions.

When you write down your feelings, you take them out of your heart and place them on paper. Once the words are in black and white, you can process and understand your feelings from a less biased perspective. Many people find balance in their lives by writing or sketching daily.

Hopefully, you will find (as many others have discovered) that spending a few minutes a day with yourself and documenting your thoughts can have a profound impact for good!

Have an intentional week!

Bob

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FIND YOUR PASSION, PURPOSE & POWER

3x3 Power PoseDo you always accept circumstances as they appear to be or do you question what comes your way? When taking everything at face value without asking questions and exploring a better or different option, many doors may remain shut. By opening yourself to others, investigating new ideas, finding new ways to tackle a challenge and visualizing a different perspective, you can make changes in the way you handle decisions.

If you want to make a change, but are not sure what the step is, here are some thoughtful solutions for beginning a new journey of personal assessment and growth.

 

How do you begin exploring personal and financial growth?
· What are your strengths?
· Is your internal view of yourself realistic?
· Do your values align with your goals?
· Are there mental/ emotional barriers that need overcoming to be successful?
· What do you need to take the next step?

Examine your story and ask questions. Does this story (well worn and comfortable) still fit your life? If not, how do you take stock of the past and re-frame that internal vision of yourself?

Reflect on these questions below to determine where you are:
Who are you?
What are your values?
What are you passions?
What is your purpose?

Have you ever browsed through old photos and marveled how people and places have changed so dramatically? Notice the changes in you over time and investigate ways to realign your passion and purpose to reach your goals. Life is about change and knowing who and where you are in life, assists you to move forward in a new direction.
Maybe you allow other people’s stories to define who you are, and it is time to take responsibility for you are. Embrace who you are, own your choices and begin to make proactive decisions and adjustments to reach your goals.

We all have different wants and needs. Some people have a strong desire to invest in their future. Others want to live exuberantly at the moment. We all have distinct levels of emotional tolerance toward our present situation. When we feel pain or guilt, are scared and ashamed of our actions, those negative emotions are a sign that change might be a powerful step into a more positive, meaningful future.

I want to share this video of Amy Cuddy speaking about change, on both an emotional and physical level. If you have ever felt inadequate or that you are a “fake” and it’s just a matter of time before “everyone” finds out, this clip may be life changing for you! In addition to mentally focusing on a new goal, Amy shares scientific evidence that simple changes in your body language can effect other people’s opinions about you and enhance your success! It certainly affected me, and I hope you will also find it valuable.

Video: Don’t Fake it ‘till you make it; Fake it until You Become it!

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STARTING THE JOURNEY

3x3 STarting The JourneyHere are some tools to help you determine where you are financially. Learn what your credit score is, plan how much money you want place in your savings account and start a budget for all the important things in life.

Getting ready to buy a house? While it is always important to set intentions and visualize your goal, nothing will happen until you take action and get some momentum flowing. I always wanted to play basketball but sleeping with a basketball under my pillow and wearing shorts and a jersey with a number on it, will not make me a player! To play the game, I have to learn the rules, dribble a ball and practice making a basket. These actions will get me much closer to my goal.

Keep that in mind when your goal seems to be “just out of reach.” Implementing proactive plans and following up with the best action will always take you many steps closer toward the prize!

To help you have a healthy relationship with money and to learn new habits, we have placed numerous tools on the Money Nerve website. It is my hope that these tools will help you to determine how you are spending or saving your income and assist you on your financial journey. Please see the tools page on the #MoneyNerve website for more options.

Here are just a few:
Determine your credit score: https://www.creditkarma.com/

Explore how much your monthly payments would be for a house, depending on the money you have to put down on it and the amount of time your loan is scheduled for: http://www.mortgagecalculator.org/

If you want more house than you have money, now might the perfect time to bump up your savings and plan a budget to make your dreams come true: http://www.aarp.org/money/budgeting-saving/home_budget_calculator/

How to create a balance sheet to determine how your assets and liabilities. And as you purchase a house, learn how to determine what your equity is: https://youtu.be/mxsYHiDVNlk

And last, check out this video from Alexa von Tobel, founder and CEO of LearnVest.com. She shares 5 principles to live a debt free life:

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POSITIVE FLOW

Positive FlowDo you ever find yourself so completely immersed in what you’re doing that you lose track of time? All of a sudden you look up at the clock and realize that hours have passed and you missed dinner time? Think a minute about this. When does this loss of time and total engagement typically occur for you?

This could apply to a martial artist completely absorbed in perfecting a flying kick, or a violinist fiercely concentrating on a complex symphony. One may find still greater happiness working towards long-term, meaningful goals. Viktor Frankl, who survived a Nazi concentration camp, once said “What man actually needs is not a tensionless state but rather the striving and struggling for some goal worthy of him.” (Frankl, 1992)

According to The Pursuit of Happiness this loss of self-consciousness that happens when you are completely absorbed in an activity – intellectual, professional, or physical – is described in contemporary psychology as a state of flow. In order for a flow state to occur, you must see the activity as voluntary, enjoyable (intrinsically motivating), and it must require skill and be challenging (but not too challenging) with clear goals towards success. You must feel as though you have control and receive immediate feedback with room for growth. Interestingly, a flow state is characterized by the absence of emotion – a complete loss of self-consciousness –however, in retrospect, the flow activity may be described as enjoyable and even exhilarating!

A growing body of scientific evidence indicates that flow is highly correlated with happiness, both SWB (Subjective well-being) and PWB (Psychological well-being). Furthermore, it has been found that people who experience a lot of flow regularly also develop other positive traits, such as increased concentration, self-esteem, and performance.

In one study, 250 “high-flow” and “low-flow” teenagers were asked to report on their feelings and activities at regular intervals (Csikszentmihalyi & Csikszentmihalyi, 1988). The high-flow teenagers on average reported more time spent on “active leisure” activities such as hobbies, sports and homework. The high-flow teenagers also measured higher levels of self-esteem and engagement. Interestingly, however, the high-flow teenagers self-reported lower levels of fun than the low-flow teenagers.

Apparently, high-flow teenagers see their low-flow peers as experiencing more fun engaging in low-flow activities, such as video games, TV or socializing. However, the high-flow kids end up having greater long term happiness as well as success in school, social relationships and careers. If flow has such incredible benefits to our happiness, relationships and success, then why do people habitually choose low-flow activities?

Why do people, in the moment, choose another episode of American Idol over a game of pickup basketball? One hypothesis is that the high-flow activities require more initial motivation because they do require skill and concentration. In other words, high-flow activities are work! But work that pays off. Low-flow activities, such as watching TV, could contribute to depression and low self-esteem.

Thus, when we are actively involved in trying to reach a goal, or an activity that is challenging but well suited to our skills, we can all experience a joyful state called “flow.”  The experience of flow in both professional and leisure activities leads to increased positive affect, performance, and commitment to long-term, meaningful goals.

Take a moment to determine what is most important to you and what activities take you to a place of timelessness. Find your flow for a more abundant life!

Bob

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BEING MINDFUL

3x3 Acceptance for what comes to us

You are exactly where you want to be in your life. You may say, “No that’s not right, I wanted to be successful and rich.” Based on your actions, here you are. Well – guess what, you are not alone!

We all have goals and dreams for our life. A large percentage of people feel they somehow “missed the boat” or that “other people’s negative opinions” caused them to be less successful. If you are ashamed of how you spend your money, the good news is that you have the power to change that.

If you are not happy with your life, it may be time to re-evaluate and make some conscious changes. Mindful changes. Being mindful is not some abstract expression that means you chant and sing to empty your mind and then magically life is good. Being mindful is a strong focus on the now – noticing small details, determining why you are acting the way you are and using that information to refine your actions for better results.

Setting a financial intention is a wonderful tool for determining how and when you spend or save money. Being mindful will build your financial muscle as you decide whether the fashionable sunglasses you want right now or the additional education you need to move ahead will create value for you long-term. Pop-up ads and television shows lure us with the promise that more is better. If we allow our emotions to make mindless decisions, then we miss out on the most important items we crave to have in our life.

One aspect of living in a cashless society is that the tangible feeling of money has been lost. It is easy to run a plastic debit or credit card through a machine for instant gratification. There is no real sense of parting with your money because you never felt its weight in your wallet. You did not handle it and give it way. In today’s world you feel financial pain when your credit card is declined or the bank takes all of your cash to cover your bounced checks.

Make a “top ten” list of what is most important for your life. Make a conscious decision to change the way you handle money. This area of focus will help you learn to be aware of the emotional triggers that control impulsive decisions. Once you know why you continue to make the same choices, you can choose a different response. Make a plan and keep your long-term goals in front of you to create a healthy relationship with money.

As you make intentional financial trade-offs, you will learn that choices regarding your money don’t have to be painful. By thoughtfully choosing to invest in yourself, you can jump off the merry-go-round of money madness as your new budget creates financial freedom!

I will leave you with this thought, “It is better to light a candle than to curse the darkness.”

Have a proactive week! Bob

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OPEN to CHANGE

2015-08-25 01.21.13 pmMost people have a mental map of where they live – they are familiar with the area surrounding their town and within even a greater sense about their state. People know where to turn to drive to the grocery store and can give directions to visitors looking for a nearby location. And most of us can give a very good estimate of how much time it takes to get from Point A to Point B. We are able to visualize our surroundings, estimate travel times over long distances and arrive at the proper destinations.

This powerful concept can also be applied to “mentally moving” toward a new goal or destination. By knowing where you are in life and knowing what your ultimate destination is, you can determine what route will get you there and how much time you need to accomplish your goal. You are able to create a clear and conscious path to navigate toward your goal.

”Mental mapping” can be accomplished by writing a list or by creating a visual mind map. You can lay down stepping-stones and build a bridge from one nebulous thought to a structured plan with several options.

Start by writing down one of your major goals and drawing a big circle around it. Now jot down words or ideas around that big circle that could help you realize your goal. These ideas often become the small successful steps that help you reach your goal. Many influential CEOs have built companies or made significant changes in their industry from a simple napkin drawing. By giving form to your ideas, you may now “see” your solution and can make thoughtful choices to move in this new direction.

Connect your circles (ideas) with “branches” to similar or associated ideas. This makes your steps easier to remember and creates a logical connection about how to move forward. If you hate to write, fill your mental map with drawings and images that speak to you. This process is all about realizing where you are and where you want to go. It is a very simple and effective tool for exploring creative ideas and options to make a change.

I have included a simple mental map as an example; there are many variations. Curvy lines, organic thoughts, and bold colors incorporated with free-association style thinking encourage many people to come up with even more ideas. Your free-form thoughts can be streamlined into a strategic action plan. Let yourself be open to new possibilities and experiences. You may discover a brand-new solution you never dreamed of before!

Share your maps on Twitter or Facebook. It would be great to see how others express their ideas!

Bob

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MONEY NERVE SHOW AIRS SUNDAY AUG 23

BOB-3303-Money-Nerve-bc_frontBWouldn’t it be nice to worry less about money and focus more on financial freedom? A healthy relationship with money is freedom. Tune into The Money Nerve Show Sunday, August 23,  and explore your personal decision-making process.

Learn what emotions are driving your relationship with money and create the new financial you! Define your “Money Nerve” and start making positive choices for effective financial decision-making in your life!

Mark your calendar for this Sunday, August 23, to listen to The Money Nerve Show. The topic for this show is an interesting concept,  “How to get Rich without winning the Lottery,” featuring my special guest Barbara Friedberg, MBA, MS. Join us as we share tips on building wealth, learning new investment tips and living a life of financial freedom!

Barbara Friedberg is a veteran portfolio manager, expert investor, and former university finance instructor. Friedberg is editor of several books including Personal Finance; An Encyclopedia of Modern Money Management, How to Get Rich Without Winning the Lottery, Invest and Beat the Pros-Create and Manage a Successful Investment Portfolio and publisher of BarbaraFriedbergPersonalFinance.com. You can also find her “Young & Oldish Money” podcast on iTunes.

The Money Nerve Show with Barbara Friedberg will be broadcast this Sunday, August 23, at 3 pm PT / 6 pm ET.

Dreamvisions 7 Radio: 1510am WMEX Boston
Re-Broadcasts Weekly Each Friday: Noon & Midnight PST / 3 pm & 3 am EST
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Please join us!
Bob