Emotional Currency by Kate Levinson, Ph.D.

In her new book, Emotional Currency: A Woman’s Guide to Building a Healthy Relationship with Money, Levinson, a psychotherapist, describes our “inner money life” as the complex set of thoughts, beliefs and feelings we have about our finances.

These thoughts, beliefs and feelings influence nearly every decision we make. (Guys, keep reading: Emotional currency is not only for women. We all have an inner money life worth exploring.)

I say every decision because most of the choices we make have a financial component: what we eat, what we wear, where we live, where we work, how much we work and how we recreate. Any time we buy something or don’t our inner money life is at work.

Levinson provides an eye-opening exercise she calls “My Feelings About Money.” It takes just 10 minutes and may shine some light on your views and attitudes. Give it a try.——>click here to read the full article.

Meet the author: Kate Levinson, in Durango, CO at Maria’s Bookshop

Kate Levinson, Ph.D. psychotherapist and author, will present her book Emotional Currency: A Woman’s Guide to Building a Healthy Relationship with Money from 6:30-7:30 p.m. Monday at Maria’s Bookshop, 960 Main Ave.

When I started using a budget I thought it was going to be a huge sacrifice.

Turns out it was like getting a 30% raise.  I have heard the same thing over and over again from my personal finance clients too.

I decided to look at why this is true.  What I found is that when we spend unconsciously we spend a lot of money and have no idea where it went.

When we have a written budget we are spending consciously and not wasting money on unconscious spending.

Thus it feels like getting a huge raise.

It’s been reported that that nearly 98% of companies surveyed in a recent compensation survey said they plan to give raises in 2011.

That’s the good news.  The bad news is that the average raise will amount to about $38 per paycheck if you make $50,000 per year.

The choice is yours; a 2.8% raise or a 30% raise.

Is debt really ‘Tricky”?

A recent blog post I was reading at SmartMoney.com called auto debt “tricky”.

Saying that financial planners agree that you shouldn’t borrow money to buy things that go down in value, BUT…it just can’t be avoided.  After all who can afford to pay cash for a new car?

Yes new cars are expensive.  And you don’t need a new car.  A good used car will do just fine and they don’t depreciate like new cars.

Here is my advice as a personal finance coach: Pay cash for your car.  Even if it means driving a POS for awhile. My wife and I bought a Toyota Camry with about 100,000 miles on it for $6,000.

Better yet, if available, use a car sharing service like Zipcar so that you don’t have to pay for car insurance and maintenance. When you need to go on a long road trip rent a car. Put the miles on the rental car.

Some day when you are financially independent you can buy the new car of your dreams.  Till them, be like the Millionaire Next Door and drive a used car.

The last thing that someone who is struggling financially needs is more debt.

And yet credit card offers to subprime borrowers are back. SmartMoney.com reports that credit card offers to borrowers with less than perfect credit are up 300% since June 2010.

These credit card offers carry an average interest rate of 20% and an average annual fee of $39.  You can stop credit card offers by following the advice of the FTC.

As a personal finance coach my advice is to get off the credit card treadmill.  Start using a debit card and cash.

There is nothing you can’t do with a debt card that you can do with a credit card…except get into debt.

After graduating from Thunderbird School of Global Management with a Master of International Management in 1991 I began a sixteen-year cycle of accumulating credit card debt and paying it off by rolling it into my mortgage and declaring, “Never again will this happen!”  Without any skills or tools to change his behavior, it happened again and again.

In February 2007 my wife, Cheri, and I began attending the thirteen-week Financial Peace University.  Over the following fifteen months we paid off $165,000 in debt and saved $20,000.  No, we didn’t have huge incomes.  We had received a $40,000 inheritance when my parents passed away – which we didn’t use to go to Hawaii.  Instead, we paid off debt.  In addition to using the $40,000 to payoff debt we harnessed our $80,000 annual income to payoff an additional $25,000 in debt and save $20,000

Since before we were married we had talked about taking a year off from work to travel the world.  At times, when our debts had been rolled into our mortgage, the dream seemed more likely to happen.  Of course, moving debt from one place to another did not really ever pay it off; it just hid the reality of their situation.  Then, thanks to getting all of our debt paid off, except for our mortgage, the dream became a vision.

The remaining $100,000 debt payoff came from this shared dream.  Realizing that paying off our home would be a key component to being able to freely travel around the world, we decided to downsize our condo.  We sold their $300,000 condo that had a $200,000 mortgage and bought a $200,000 condo using a $100,000 down payment.  We like the new smaller condo better and can foresee the day when we will embark on our journey around the world.

After having gone through the process of getting out of debt, our marriage is better, there is more ease in our life, and we are happier.  And the best thing is that I found a passion and a gift for helping others get out of debt too.  I have developed the class Creating True Financial Independence after taking this class most people can be debt-free, except for their mortgage, in 12 to 18 months.

In addition to teaching Creating True Financial Independence I do private coaching.

3 ways to sell your old electronics that are collecting dust

From Bob over at christianpf.com

Who or what has influenced your major financial decisions?

If you aren’t doing what you want in life, whose dreams are you fulfilling?

When you think about your financial past, do you see any patterns?

What financial advice from the past sticks in your mind today?

What messages about money did you get as a child?  How are these reflected in your actions?

What does money mean to you? Power? Security? Sex Appeal?

Have any life crises altered your thinking about money?  How and Why?

Have you ever felt poor or wealthy?  How would you define poor or wealthy?

How much time do you spend with popular media such as television, newspapers, magazines?  How do these contribute to your view of financial situations?  Your wants and needs?

Who is your financial role model?  Is there someone that you compare yourself to when it comes to money?

What makes you feel “real” – that you really matter?

• Extra Bike(s)
• Extra Outdoor Gear
• Kitchen Gadgets
• Jewelry
• Books
• Collectibles e.g. baseball cards and comic books
• Musical Instruments
• Furniture
• Tools
• Cars

4. Stop Going Out to Lunch
5.     Bring Your Own Java
6. Stop Drinking Soda and Energy Drinks
7.     Quit Smoking
8.     Eat Dinner at Home
9.     Drop Cable/Satellite TV
10. Pay With Cash
11. Rediscover the Library for Book and Movies
12. Get Rid of Your Storage Unit
13. Eat Less Meat and Cheese
14. Stop Buying Convenience Foods
15. Stop Incurring Overdraft Fees – Balance Your Checkbook
16. Raise Your Auto Insurance Deductible
17. Cancel Your Land Line
18 . Stop Buying Junk Food

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This overwhelming response confirms what Matthew suggests in the book — it’s a wonderful thing to achieve our own dreams, but it’s an incredible feeling to help others accomplish theirs!

If you are interested in learning more about…

• How to define and pursue your dreams
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I love that he is trying to reign in discretionary spending, however I believe that the cash envelope system is a far better way to do that.

A spending journal is reactive. Cash envelopes are proactive.

With cash envelopes I don’t have to record every purchase and I get to allocate my money when I am doing my budget each month. It’s the difference between making a grocery list and eating before you go to the grocery store Vs going to the grocery store when you are hungry without a list.

Since I know the purpose of each envelope I don’t care where I spent the money so long as I don’t spend the grocery money on beer. However, beer can be bought from the miscellaneous, restaurant or entertainment envelopes.