Alright, people. This post is a real doozie for me. The “delete” key is starting to wear down on my keypad from all the false starts. If there were an award for the number of times you could backspace in one minute, I would surely win. For how do I write poetically about a subject that has had me so stumped for so long?

 

Well, I guess…I don’t. I just write. Throwing caution to the wind, trusting that you will apply the information to your own lives as you see fit, and forgiving me for my lack of witty prose to accompany it.

 

Here goes.

 

My name is Lauren and I’m a chocoholic.

 

Oh wait – wrong meeting!

 

Lest I use the backspace key for the thousandth time, let me try that again:

 

My name is Lauren and I have an unhealthy relationship with money.

 

(Insert audible gasps, sighs, oohs, and ahhs from the imaginary crowd in my head)

 

No, I’m not a shopaholic. I don’t have 15 maxed out credit cards to my name, and I don’t hide secret purchases from my husband in my special secret closet (I hide them under the bed instead. Just kidding).

 

In fact, it’s just the opposite. I’m a saver. I’m such a great saver, in fact, that I don’t know how to invest. I’m so afraid to spend that I don’t know where to spend it.

 

In university, I worked two jobs during the summer months to pay for the ten month school year: retail during the day, bartending and waitressing at a club at night, six days a week, quite literally day and night (and on the seventh day, I rested…or rather, collapsed from lack of sleep).

 

During the school year, I only spent money on groceries (bagels, cereal, hamburger helper, and whatever else was on sale), school books, rent, bills and of course, tuition. My only indulgence was my Sunday morning brunch at the local restaurant.

 

It was called Pizzaville. A classy place, to be sure. I would order the same thing every Sunday: two eggs, two pieces of toast, potatoes, and bacon, all for a whopping $4. After a $1 tip, I left the place $5 poorer, smelling like fried food, and ready to take on my Sunday study session.

 

There is no doubt in my mind that paying my way through university – and subsequently the beginning of a law school career I never finished – made me the determined, focused, hard working person I am today. I’m very conscientious about money (and, let’s face it – everything), and I know how to budget like a champ so that when there is something I really want to spend money on, I can.

 

But I’m lost on how to price myself for any kind of job. I’ve never negotiated any of my initial salary offerings at big companies (if they had more to pay me, wouldn’t they offer it? ha), and I’m more likely to offer to work for free or for a discount to help someone else out at the sacrifice of my own time and ability to pay bills. As a result, I know I’ve under earned, thus missing out on what is likely to add up to thousands of dollars worth of work.

 

All because I was afraid to ask for fear of ruffling any feathers. For fear of losing something I didn’t even have yet.

 

Well that’s not good enough for me anymore, and it never should have been.

 

Whether you are like me where money is concerned, or you have a spending problem, or you have some other unhealthy relationship with money, let this be the beginning of the healing process. Or rather, a journey toward your ultimate goals, toward the life that I know you can see in your mind’s eye.

 

What follows is a list of resources that I will be following for the next few months as I begin my own journey to a healthier relationship with money. It includes a working list of books to read, articles to source, and guiding principles that I have already collected from my initial research.

 

Working backwards, here are some of the guiding principles I will keep in mind when it comes to money:

 

1. Understand the Karmic Flow of Money

Last week I listened to a lecture from Manisha Thakor, a witty, down-to-earth woman with impressive credentials (Wellesley, Oxford, Harvard). She spoke about what she calls the Karmic Flow of Money. She said that when you don’t charge sufficient rates for your services, you’re breaking the karmic cycle of money. But when you charge fair rates – that is to say, ones based on your market and your skill level – you keep the karmic flow of money going.

In my “aha” moment that followed, I realized something: if you don’t charge fair rates for your work, why would anyone want to work with you in the first place? Think about it: people are more likely to think a designer shirt is more valuable than a generic brand not only because it costs more, but also, because the craftsmanship in putting together the designer shirt has more value.

Taking it further, after listening to a pod cast with renowned photographer, Chase Jarvis, he too discussed his struggle in determining how to price himself in the beginning of his career. But he too came to a realization: if, as a show of good faith, he charged $400 for a $4000 job with the justification that that client would call on him when they had more money, well, quite frankly, they wouldn’t! Why would they hire a $400 guy for a $4000 job? They’d hire the $4000 guy who matter-of-factly had the confidence to quote the price he was worth all along.

The take away? Think of yourself as a designer shirt – or channel the mind of Chase Jarvis – and charge accordingly.

 

2. Money is energy

If there is a karmic flow where money is concerned, then it stands to reason that money is energy. If we look at money that way – and not as a possession or thing to be had or lost – then it’s much easier to price ourselves. According to Manisha, our work is an extension of our life energy. So when we charge rates that are in alignment with the amazing services we provide, it helps us to live our lives from a position of financial strength. What’s more is that if you think of it in terms of energy, it’s nothing but an exchange: money for services. It keeps things balanced. Ying and yang. By charging fair rates, you are simply upholding the laws of the universe.

 

3. Don’t be afraid to say no

For so long, I was afraid (and still am) to negotiate a rate with someone – a new employer or a new client – for fear that they would say, “absolutely not!” and I would lose the job that I never had. But in reality, if someone is not willing to pay what I think is a fair rate, then do I really want to work for them anyway? Of course, there are many factors to consider in any negotiation, but make sure that you’re not accepting a poor rate for work that doesn’t benefit you in any other way.

 

4. Shift your thinking from “I can’t afford that” to “How can I afford that?”

I’m fairly certain I got this from listening to Guy Kawasaki’s book Rich Dad, Poor Dad, a book I highly recommend. Though the shift in thinking seems so small, it’s quite obvious that one is resigned, and one is open. “I can’t afford that” doesn’t leave any room for possibility, whereas “how can I afford that?” leaves plenty of room not only for possibility, but also, for creativity. It sets a goal in motion. Maybe it’s true that you cannot afford something right now, but how can you eventually afford it? Or, how can you unconventionally go about getting it right now? That shift in thinking has already helped me a little bit. It’s the difference between scarcity and abundance, and it truly can make all the difference.

 

5. When you get overwhelmed, have gratitude for the things you already have

I can get overwhelmed sometimes (ok, like all the time). We all do! In those moments, I find it best to count my blessings: do I have a roof over my head? Food on the table? Clothes on my back? Friends? Family? Support? Those are the things that really matter. Money is only one measurement of wealth. A man who is rich may have no money to his name, but has a life rich in love, relationships, nutrition, mental well being, and other immaterial things.

 

6. Get real with your finances: know where you’re at so you can plan where you need to go

Maybe your finances are a mess. But if you don’t know where every dollar is going, you’ll never get to the financial freedom you’re striving for. So as hard as it will be to face the music – as money tends to be extremely tied to emotion – you need to start from where you are. Create a basic spreadsheet and list out all of your monthly expenses, your income, the tax you have to pay, any credit card debt, student loans, mortgages and anything else you can think of. It might really suck to see it all written out in front of you where you can no longer hide from it, but it will help you to see where you need help. If you find this to be too overwhelming, that’s a clue in and of itself! But don’t panic. There is help! I highly recommend Learnvest, an online service that helps people get a hold of their finances and take control of their lives. They will not only guide you through the process of sorting out where you are at, but they will also show you the light and lead you out of the dark tunnel you may have dug yourself into.

 

7. Adopt the 50-30-20 rule for your money

In Manisha’s lecture, she spoke about her Healthy Spending Pyramid whereby you allocate 50% of your after tax dollars to needs (house, car, food, clothes), 30% to your wants (fun things), and 20% to your savings. If you can’t do that now, imagine how you will fare when you are 70 and can no longer work. What will you do then? Set yourself up for success. If you can’t start with her percentages, start with something smaller. But start somewhere. Today.

 

8. Remember that money doesn’t buy happiness

You’ve read the studies, right? Money buys happiness, but only to the point that you can afford to pay for your basic expenses, and some additional fun things. This works out to about $75 000 a year. Beyond that, money doesn’t affect happiness (unless, of course, you get to a point where you make so much money that you’re stressed out because of it).

 

9. Live within your means

In most of the research I’ve done, it has been found that wealthy people stay wealthy because they live within their means. They drive reasonable cars, live in modest homes, invest wisely, but mostly, enjoy their lives. Think about it: if you earn $2 million a year but you spend $3 million a year, you’re just as “poor” as someone who makes $30 000 a year but spends $60 000. Live within your means and you will always be rich!

 

10. Spend money on experiences, not material things

Forget about those Joneses! You don’t know them, so you don’t need to keep up with them. Fancy cars. Expensive restaurants. Diamond jewelry. Sure, those things are nice. And I’d be lying if I said I didn’t want a Tesla, or didn’t appreciate a beautiful designer dress. But things don’t make you happy. At least, not for long. You know that to be true. I’m sure you can think of something you bought that you wanted so badly, only to find it swimming at the bottom of your closet a year later, completely forgotten about. But you will always remember the trips you take, the relationships you make, the places you get to see. Beyond the standard material things you need in your life (car, clothes, kitchen utensils), spend your money on moments that make your life better.

 

11. Take care of your health

I know this sounds weird, but exercise and nutrition can make or break your level of happiness. Happy people are productive people. Their heads are clearer. They make more calculated and educated decisions. You need to make money decisions from such a clear and happy space, so get moving, eat some greens, and get rich (but don’t die trying)!

 

Now that your armed with some of the guiding principles I will adopt on this journey toward a healthier relationship with money, here is a list of some of the books I’m going to be reading. This is a working list – please feel free to add a book you think I/we need to read in the comment box below!

The Magic of Thinking Big

The Millionaire Next Store

Secrets of the Millionaire Mind

Get Financially Naked: How to Talk Money with Your Honey

On My Own Two Feet: A Modern Girl’s Guide to Personal Finance

Rich Dad, Poor Dad

Think and Grow Rich

And finally, here are some articles for some initial motivation:

20 Things the Rich do Every day

9 habits of rich people

7 Frugal Habits of the self made rich

10 ways rich people think differently

 

Ready? Set? Go flex those money muscles!

Lauren
xxx

Photo credit: AndrewMagill/flickr