Joint vs Separate Accounts

Written by Barbara Huson

If you’re married, or about to be, I have a question for you. Do you have money in your own name?

Even if you’re blissfully in love with each other, even if (s)he’s filthy rich or a financial genius, it’s critical to have your own economic identity a bank account and credit card in your own name.

In part, it’s a matter of self-protection. If anything happens to your Prince(ss) Charming, you could be in big trouble. Oh, the horror stories I’ve heard from women who couldn’t get credit or had all kinds of legal problems after losing a spouse through death or divorce because everything was listed under their spouse’s name.

Also, since money is the #1 source of marital spats, having separate accounts could minimize arguments. As Stephanie Sarkis pointed out in Psychology Today, “the less you argue about money, the closer you will feel to your partner.”

But there’s also a psychological component. A separate financial identity, even while maintaining shared accounts, makes a major personal statement. It has nothing to do with the relationship. It has everything to do with your self-concept and sense of autonomy.

Putting money in your name is about growing up, becoming an adult, claiming your sovereignty over your own life.

I’d love to hear if money is a source of strife or harmony in your relationship? Leave a comment below.

Are you in search of a safe place to talk money with other women? My brand new virtual community, The Wealth Connection, is that safe place. Click here for more info.

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A Reason to Worry….Or A Call to Action?

Written by Barbara Huson

Even the wealthiest among us—those with earnings over $200,000 or a net worth over $3 million—still worry about money.

Their biggest fear: Inflation.

Inflation is, indeed, a ravenous creature that eats into our cash like a caterpillar on a leaf…slowly, methodically, little bits at a time.

For years, however, inflation has stayed quite low. But that’s rapidly changing. The Wall Street Journal just announced, “US inflation hit its highest rate in more than six years.” And inflation is expected to keep escalating.

Is it time to start worrying? Heavens NO! The worst response to climbing costs (or most anything else for that matter) is to go into fear, which tends to have a paralyzing effect.

Instead, look at rising inflation as a resounding call to action…no matter how much or how little money you have.

The only way to counter the ravages of rising prices is to make sure at least some of your savings is working harder than it would in a bank. How? By investing in assets that grow faster than what inflation takes away.

Now is the time to make sure your money is well diversified. Here’s the standard rule of thumb for investing wisely:

Money you need in the next three to five years–for emergencies, unexpected expenses, or short-term goals–should be in cash or cash equivalents like money market funds, CD’s, or short-term treasuries.
Money you’ll need in the next five to ten years should be in a mix of stocks and bonds.
Money you won’t need for ten or more years should be mostly in stocks and perhaps commodities and real estate.

You can’t eliminate inflation. But you can do a lot to protect yourself from it.

Tell me about your biggest money fear. Leave a comment below.

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Brilliant Idea for Raising $avvy Kid$

Written by Barbara Huson

Pati Wolfgang sent me this story. It’s so good, I had to share. If you have kids, you’ve got to read this!

When my boys were tiny and we went in the store, I’d bring pencil and paper.

I’d also count the money in my wallet before going in to see how much treat money we had.

Later, I had them help count.

Then, when they saw things, they could see if that fit in their treat allowance. What was sweet, too, is plenty of times, one would give their funds to their brother. Or they’d pool together.

If it was more than the daily funds allowed, I would write down, with their help, what it was and what store it was in. That left them feeling heard. They knew what they wanted mattered, even if it couldn’t be bought that day.

They’d focus on reading the label to me, figuring out which store. It was cute.

Then, once a week or so, we’d have a fun fund meeting and go over the list. We’d talk about the extra “fun fund” we had that week. I’d talk about how this week was more than last because…. etc. That helped them see, sometimes if the plumber came, we could still do something fun, but we toned it back a little.

They’d constantly say how it helped them to see how they could want something so much, then just a day or two later not want it any more.

They’re adults now. They love to save just as much as they love to treat themselves. They still share and pool funds.

Share below how you teach your kids about money.

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How the Wealthy Think…and You Can Too!

Written by Barbara Huson

Q. How can I SAVE money to create wealth (which means cutting back spending) and still have a feeling of ABUNDANCE, not a mentality of LACK (which means the desire to SPEND).

A. Oh the devious ways we fool ourselves by how we choose to think.

If you think like a Consumer, then cutting back spending to sock away savings will absolutely feel like scarcity or deprivation, while spending offers the pleasurable (but deceptive) pretense of abundance.

When you think like a Wealth Builder, you understand that every cent you put in savings is money you’re giving to YOU (not Starbucks or MasterCard), so that ultimately you can purchase what you please without pressure or worry.

To paraphrase the old saw, a Wealth Builder tells her money where to go. A Consumer wonders where it went.

The difference between the two mindsets is not deprivation but delayed gratification. And it’s easy if you think small and automate. Every month have some money, no matter how small, automatically transferred from your checking to your savings account. You don’t miss what you don’t see.

What if there’s nothing to spare at month’s end? Try giving up something small, like a daily latte, and bank the savings. One woman funded her IRA with lose change from her purse, coins she found in pockets doing laundry, and cash from the coupons she redeemed at the market.

I recommend two types of savings accounts. An Untouchable for emergencies and unexpected expenses. And a Touchable for fun stuff, like a vacation or shoe sale—which keeps you from dipping into your emergency savings, yet not feeling deprived.

Bottom line: Instant gratification is such a cruel illusion. I’ll never forget meeting an elderly woman who lamented: “I always got such joy from shopping. But now that I’m old and I look back on all the money I wasted, I wish to God I had saved more.”

How do you balance feeling abundant with the discipline of spending less and saving more? Leave me a comment below.

Thank you, Tracy Beth & Maria Aum, for the Q.

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Talking to My Man About Money—Oy Vey!

Written by Barbara Huson

I remember when my now-husband & I were about to move in together. We’d been dating for 2 years. And I was struggling. At what point do we have THE TALK about money?

We each knew the other had no credit card debt. Beyond that, we kept tip-toeing around the topic.

It reminded me of a letter to Ann Landers from a woman who wanted to ask her boyfriend to help pay for her birth control, but didn’t feel she knew him well enough to ask!

I laughed when I read that. But here I was—a financial coach—doing the same!!! I just couldn’t bring myself to, as my friend Manisha Thakor titled her terrific book, Get Financially Naked with the man I loved. One day, I happened on an old journal from high school. I’d forgotten how I always wondered if people liked me for me or because my family was rich…how hard I tried to be like everyone else.

No wonder I was scared to expose myself financially. I was sure he’d reject or judge me harshly. With that realization, my resistance subsided.

Later that week, as we were finishing breakfast, without even thinking, I got up, retrieved my latest financial statements, pushed aside the dishes, spread out the papers, and said, “This is what I have.”

He listened, asked a few questions, then explained what was in his accounts. That was it…a non-event. But at the same time, it was clearly a turning point for us. I learned 3 important lessons that day:

The fear of doing is far worse than the actual doing! Afterwards, I wondered, “what was the big deal?”
Resistance dissolves when its root is revealed. The moment I realized my childhood fears were the culprit, those old demons didn’t seem so threatening.
Financial transparency is vital to intimacy and trust. “Otherwise,” as Manisha writes, “like termites eating away at the foundation of your relationship, little nagging doubts or questions about each other’s finances could end up destroying what is currently a beautiful life.”

I’d love to hear your experience talking finances with your partner. Leave me a comment below.

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“Impossible” Simply Means “It’s Not a Priority”

Written by Barbara Huson

She, like so many others, made a decent salary, but could never get ahead.

“I cash my paycheck and before I know it, it’s gone,” she told me, hoping for advice.

“Why don’t you try paying yourself first?” I suggested. “Every time you get paid, right off the bat, put a portion in a savings account. Even a small amount is better than nothing.”

“That’s impossible,“ she said with a sigh of resignation. “I don’t make enough. There’s nothing left to save.”

That conversation occurred years ago. Imagine my surprise when she recently contacted me to let me know she followed my suggestion, never thinking it would actually work.

“I didn’t even wait until the end of the month to see how much was left after paying bills,” she said. “I paid me, then my bills, and anything left, was mine to spend.”

To her amazement, she never missed what she set aside. “Eventually,” she said, “I began putting some of what I would ordinarily spend into the savings account too.”

The act of savings had become a habit…a habit that changed the course of her life.

“Had I not had that kitty when I got divorced, I couldn’t have made it,” she told me. “I would have been in the poorhouse without it.”

Today, she told me proudly, she is quite well off… even though her paycheck still isn’t very big.

“I can’t believe how my savings has grown,” she said in amazement. “I can’t believe how much I have. And how much more in control I feel.”

She’d discovered the most powerful principle of wealth building: You don’t need a lot of money to create wealth. And the time to start saving is before you wish you had…when it feels impossible. The truth is: everything is possible once you make it a priority.

When it comes to money, what is your priority? Be brutally honest…I’d love to hear your answer. Leave me a comment below.

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What do Dollars & Donuts Have in Common?

Written by Barbara Huson

I’ve long noticed an interesting fact. Women who have problems with money often have problems with food.

Then I read Geneen Roth’s extraordinary book, Women, Food and God, a New York Time’s bestseller. I’ve never met Geneen personally. But I instantly knew she was a kindred spirit.

Geneen insists that food is never the problem. Just as I’ve always known problems with money are never about money.

Rather, says Geneen, overeating is “a doorway to your true nature,” echoing my conviction that financial problems are a doorway to your true power.

Her book is based on her own unhealthy relationship with food and her experience teaching others what she learned during her weekend retreats.

Just like my book, Sacred Success, is based on overcoming my own devastating dealings with money and helping others do the same.

Her method of healing women’s relationship with food, similar to mine, mixes a hefty dose of spirituality with emotional transparency and practical actions.

The key to success is not to focus on dieting…or budgeting.

Instead, success comes from combining self-awareness exercises with specific practices to heal the deep-seated wounds that lead to compulsive behaviors, like chronic busyness, over eating, binge spending.

In fact, my favorite quote of all time came from Geneen: “The only people who don’t have insane relationships with money are those who were willing to examine their insane relationship with money.”

Gosh, I wish I’d said that!

Have you thought about what you’re trying to fill up with compulsive behaviors—whether with food or money issues? Leave a comment below.

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A Simple Truth: Why the Rich Are Different

Written by Barbara Huson

Scott Fitzgerald: “The rich are different than you and me.”

Ernest Hemingway: “Yes. They have more money.”

I often see this exchange between the two authors quoted. I always want to take it one step further: “But why do the rich have more money than most.”

And my answer would be: “Because the rich think differently.”

And here’s the difference: The Masses think like a Consumer. The Rich think like a Wealth Builder.

There is a major difference between the two.

A Consumer thinks: I want more money so I can buy more clothes, take more trips, eat out more often, and have more fun.

The Wealth Builder thinks: I want more money to save and invest for the long term so that I can have more freedom, more choices, more fun, and more opportunities to give back.

Do you know what separates these two mind-sets? Instant gratification.

It’s the difference between snapping up those Prada shoes—which you simply must have because they go perfectly with that Juicy Couture dress you just bought—or depositing that same sum straight into a savings account, or better yet, a mutual fund.

The decision is yours to make.

I’m not suggesting self-deprivation. There’s a world of difference between denial and discipline.

True, the discipline of saving may require delayed gratification. But think of it this way—you’re giving the money to YOU (not Visa or Starbucks) so that ultimately you can purchase what you please without pressure or worry.

What about you? Do you think like a Consumer or Wealth Builder?

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My Career’s a Success. My Finances, a Mess!

Written by Barbara Huson

Years ago, I noticed a puzzling phenomenon. It’s far more prevalent today. I call it the Secret Shame of Successful Women.

Bright, sophisticated professionals, making ample incomes, who have little (if anything) in the bank to show for it.

These women look like the epitome of success—whip smart, business savvy, high earners—yet suffer some degree of financial distress.

They’re either too ashamed to reach out for help (I should be able to do this) or stubbornly resist change when they do (I have no time).

At first it didn’t make sense. You’d think they’d know better, right?

If you can relate, let me reassure you.

First, you’re not alone. Second, there’s nothing to be ashamed of. Finally, this has nothing to do with intelligence…or even money.

Financial instability is symptomatic of something far deeper.

The real culprit is all the bottled-up emotions you’ve likely spent a lifetime avoiding.

And what better way to avoid your suppressed pain or trauma (that your inner child still carries) than financial avoidance and the resulting turmoil.

So rather than feel the pain, you create distraction. Unconsciously, of course.

But unless you deal with your repressed emotions, you’ll keep repeating the same dysfunctional behavior. Avoidance, which became your early survival mechanism, has been hard-wired in your brain from continuous repetition.

Years ago, I had a client who, as soon as she paid off a huge debt, was suddenly flooded with scenes of early abuse.

Financial tension had conveniently masked those terrible memories.

I assured her those memories were coming up to be healed and urged her to find a therapist specializing in trauma recovery, which she did right away.

As my former client now admits: facing your pain leads to financial gain. Otherwise your deeply scarred inner child continues running your life, keeping the chaos intact

I’d love to hear from you if you can relate to this blog.

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Yikes! The Sky is Falling!!!

Written by Barbara Huson

As I write, the market’s in a nose dive. Panicked investors are running for the exits.

Please tell me you’re not one of them.

By the time you read this, stocks may have recovered. Or not. The only certainty is that, long term, the trajectory has always been up.

Besides, price swings only matters when you sell. It’s called the Rule of the Roller Coaster: You only get hurt when you jump off.

I discovered this the hard way. My first foray into stocks came after my divorce, in 1986. My broker sent me all kinds of reports and statements, none of which I understood, so I threw them away.

A year later, Oct. 1987, the market tanked…big time! I freaked out, called my broker, told him to sell everything. He begged me not to.

“The market will go back up,’ he said, “It always does.”

I didn’t care. I wanted my money where it was ‘safe’. Of course, the market rebounded, quite quickly. If I stayed put, I’d be a lot richer now. But I learned my lesson.

Fast forward, 10 years later. October, 1997. Prince Charming Isn’t Coming had been published. I knew a hell of a lot more about investing.

Again, the market plummeted. This time, I’m on the phone calling Schwab. My now 2nd ex-husband was upstairs, pacing the floor, in a frenzy about his finances. My teenage daughter comes downstairs, sees me on the phone, asks what I’m doing.

“I’m buying stock” I tell her.

“But mom,” she says, “The market’s crashing.”

“No, Anna” I say. “It’s a sale!”

I understood it then. I understood that eventually the market would go back up…I didn’t know when, but I knew it would.

Sure enough, in the 20+ years I’ve been invested, despite living through at least 8 market crashes, not just corrections like now (when market falls 10%), but full on crashes (when the market plunges 20%), I’m proud to say, I’ve done very, very well for myself.

The secret to success in investing is sticking to a long term approach. Otherwise, you’re not investing. You’re gambling.

What’s your reaction to this crazy market?

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Financial Wellness

Joint vs Separate Accounts

A Reason to Worry….Or A Call to Action?

Brilliant Idea for Raising $avvy Kid$

How the Wealthy Think…and You Can Too!

Talking to My Man About Money—Oy Vey!

“Impossible” Simply Means “It’s Not a Priority”

What do Dollars & Donuts Have in Common?

A Simple Truth: Why the Rich Are Different

My Career’s a Success. My Finances, a Mess!

Yikes! The Sky is Falling!!!

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