Before: Head in the Sand

Kate is a divorced mom living in San Francisco who wrote to me about her chronic money anxiety. "I'm always worrying about not having enough at the end of the month, saving for retirement, getting my spending in line. I handle the basics like paying my bills (although I dip into my savings to make the mortgage) and balancing my accounts, but the truth is I ignore the rest as if it'll all take care of itself."

Actually, though, Kate was in pretty good financial shape. She had a sizable retirement fund, money saved for emergencies, a well-paying job, very little debt, even a financial planner. What she didn't have was a positive association with handling money.

Kate was suffering from a silent epidemic -- financial avoidance -- and it was causing her a lot of unnecessary stress. It's a common problem, for which there are any number of reasons. Maybe Dad handled all the money in the household; maybe finances were a source of fear or frustration in your family; maybe you feel overburdened by debt so the idea of even opening your bills can feel like a terrifying act.

Whatever the reasons, the consequences can be serious. Although Kate thinks her anxiety is about not having enough money, it's really about something much deeper: a lack of personal power -- the kind of power that comes from pulling your head out of the sand, taking full responsibility for your financial health, and becoming a good steward for the wealth you already have.

Doing so allows you to pursue your goals and dreams. It also lets you avoid being held hostage by debt, feeling powerless to leave a dead-end job or marriage, reaching retirement without adequate savings, or living with chronic self-blame -- all of which rob us of the power to live authentic, satisfying lives.

It was time for Kate to take action -- the only way to reclaim her power. Armed with a doable three-part plan, we tackled the challenge.

The Process: Face Your Fears

Facing the truth about your financial situation is what sets you on the path to financial (and emotional) freedom, so Kate would need to take a detailed inventory of her assets, her liabilities, and her spending habits.

But since she felt anxious just thinking about her finances, let alone looking at them, it seemed crucial for her to first create a more positive association with money before tackling anything else. I asked her to make a list of 20 ways to make it more enjoyable to deal with everything from paying bills to balancing her accounts. A few of the items on her list:

- Have a clean and pleasant space to do this work. Keep my bills and statements in a nice basket, light an energizing aromatherapy candle, and play soothing music.

- Designate 30 minutes to work on my finances, then take a break to do something fun for 15 minutes.

- When the job is done, recognize my accomplishment and enjoy the sense of peace and order I feel.

Once she had a few new ideas in place, it was time to get back to the financial inventory. When we got to her spending habits, Kate reluctantly shared a secret with me: She liked to shop -- a lot. "It gives me comfort to buy myself little things like decorations for the house, clothing, or shoes," she said. "But sometimes, I can't even remember what I bought just a few days after a purchase."

Kate's amnesia is the typical result of unconscious spending -- a trap a lot of us fall into. Some people shop to avoid uncomfortable feelings, while others just spend small amounts of money every day on things like lunch, the paper, or coffee.

These purchases may seem small, but Kate was beginning to see that hers added up to big credit-card bills at the end of the month, money that she could be putting toward her mortgage so she would not need to dip into her savings.

"Budget" is a scary word to most people, especially financial avoiders, but Kate needed to come up with a monthly allowance for pleasurable spending. I also suggested she start attending Debtor's Anonymous meetings -- a group that helps people come to terms with their spending so they can lead debt-free lives. (The organization also offers telephone-based meetings held during convenient lunchtime hours as an option; visit Being in the company of people who are committed to spending wisely would help her break the habit of what she called "frivolous overspending."

Kate was moving forward. She started using new approaches to create a more positive association with handling money; she created a spreadsheet that included all of her assets and liabilities; and, with the support of other people committed to spending wisely, she had put a budget in place for pleasurable spending.

Kate came to our next call sounding different. "It feels like this is working; the more I focus on my finances, the less anxious I feel about them -- the exact opposite of what I expected." She was even beginning to enjoy the process -- a sure sign of feeling empowered.

She was ready for the final push: putting a smart, long-term financial plan in place with the help of a professional. Regardless of how much money you have, it's important to establish a relationship with a smart financial planner -- someone who will guide you through the process of improving your financial health over time.

He or she needs to feel like a true partner, one who respects you and answers your questions without judgment. For Kate, this seemed easy enough, since she already had a good financial planner she liked.

But, she said, "I'm afraid of asking stupid questions so I just let him handle the money. All I want to know is that the outlook for my future is good." Kate's response was a common one among the women I've worked with on money issues, but in order to truly feel secure, Kate would need to take an active rather than a passive role in her financial future.

We decided she'd schedule a meeting with her planner and bring a list of questions to open a dialogue, such as: "What do I need to do to improve our working relationship?" or "What three resources do you recommend I use to learn more about my investments?" Turns out, her planner was pleased and excited by the idea that Kate was adopting a more active role (a common reaction from good financial planners, by the way).

After: Claim Your Power

Kate had come a long way. By becoming more involved in the handling of her finances, she truly felt like a new person -- a more empowered woman. "I feel more confident in general," she said, "and it's paying off in unexpected ways in all areas of my life."

She was setting better boundaries with her ex-husband, who tended to interfere with decisions about the kids, and she had begun to put limits on the amount of money she gave to her teenage son rather than always having an open pocketbook.

"I even feel more powerful at work," she said. "Recently I openly disagreed with a strategic decision for our department -- something I would have kept my mouth shut about in the past. Several people agreed with me, and our team decided to change course. It really felt great."

When we decide to take hold of the reins and steer ourselves toward a positive financial future, we own our money, rather than it owning us. Become a good steward for the wealth you already have and watch your personal power and self-confidence grow -- it will change your life.

Cheryl's Conscious Money Plan

1. Make peace with your money

It's time to create a more positive association with money. Begin by making your own list of 20 things you can do to make bill paying, balancing accounts, or working on your investments more enjoyable. For example, you might keep a gratitude list in your checkbook to remind you of what you do have when paying bills, or have one small piece of really good chocolate ready as your reward when you finish.

2. Pull your head from the sand

Facing the truth about the current state of your financial health is the most important step in reclaiming your power. Take out a pad of paper and answer the following questions: How much are you worth? This includes annual income, money in savings (including retirement plans), and the value of assets like a home or car. How much do you owe? This includes credit-card balances, car loans, mortgages, and lines of credit. How much does it cost you to live? This amount includes your monthly expenses like rent or mortgage, utilities, insurance, gym memberships, as well as daily spending habits on everything from the morning newspaper to lunch during work.

3. Plan for the future

Find a good financial planner and bring your financial assessment to your first meeting. Ask family and friends for referrals, or find certified financial planners at Be willing to interview several people, ask for references, and find out how the planner is compensated ("fee-only" or paid on commission for the mutual funds or other financial products he or she recommends). And consider the following:

Is it easy to talk with this person?

Does he or she use language you understand?

Does this person have experience with clients like you?

Do you feel safe and relaxed in the planner's company?

Does this person enjoy this work?

Helpful Reading

I recommend any of the following books to help you on your path to personal power and financial health:

"The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life" by George Kinder

"The 9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying" by Suze Orman

"Real Prosperity: Using the Power of Intuition to Create Financial and Spiritual Abundance" by Lynn A. Robinson

"How to Get Out of Debt, Stay Out of Debt & Live Prosperously" by Jerrold Mundis

Text by Cheryl Richardson


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