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Creating A Financially Healthy Life by Marcia Brixey

I began my journey toward creating a financially healthy life about 15 years ago. My husband and I had been financial frauds. We looked really good from the outside — we had good jobs, lived in a nice home, drove nice cars and went on great vacations. But, we had $10,000 in credit card debt (with really good reasons why, but I can’t remember what they were); we didn’t have any money in savings; we didn’t have a will; and, although we were contributing the maximum to our company 401(k), we didn’t have any Individual Retirement Accounts.

Over the next few years we took small steps to get our financial house in order, which allowed me to take early retirement from my public relations job with the Social Security Administration in August 2002. Today I’m living a life of prosperity — a life I love without worrying about financial constraints. I have happiness in my heart and spirit.

If you’re feeling stressed out over the financial chaos of the past several months, it’s time to start creating your own financially healthy life. You can begin by taking these steps:

1: Give Yourself a Spending Reality Check. We’re a nation of spenders and we spend unconsciously. The first step in getting conscious about your spending is to track it for at least 14 days. Use a small notebook or blank checkbook register and write down everything you buy with cash, ATM card, debit card, credit card or check. You’ll probably discover at least one thing you’re spending more on than you thought you were. Simply writing down your purchases will likely prompt you to spend 10 to 20 percent less. Use a “Checkout Checklist” and ask yourself the following questions before making a purchase: Do I really want this? Do I really need it? Will I use it? Am I buying this just because it’s on sale? How many hours will I have to work to pay for this? Do I really love it?

2: Get Out of Credit Card Debt. If you’re in debt, stop using your credit cards. If you don’t have a safe deposit box, put your cards in a tin can, fill it with water, and freeze it. Why? Because you can’t microwave a tin can. If you must carry one credit card, wrap it in a red piece of paper and label it EMERGENCY. You’ll think twice before using it to buy that new pair of shoes. Next, call your creditors to request a lower interest rate. The best time to call is early in the morning in the middle of the week. Be sure to have a smile on your face. Lowering your interest rate can save you thousands of dollars. Some experts advise you to pay off the account that has the highest interest rate first. I recommend that you pay off the account with the smallest balance first. You’ll feel a sense of accomplishment by doing this and, after you’ve congratulated yourself, will be motivated to take on the next account.

3: Get Clear about Your Credit Report and Score. Your credit report is your financial report card. It’s as important to you as the SAT score is to high school students. Creditors, landlords and even potential employers are looking at your credit report. You can request your credit report free once every 12 months from the three major credit-reporting agencies — Equifax, Experian and TransUnion — at www.annualcreditreport.com. Your credit score can make the difference between paying $1,695 versus $2,689 monthly on a $300,000 30-year mortgage. (www.myfico.com).

4: Invest Automatically and Regularly. Investing only $10 per week ($520 a year) at 8 percent can earn you a lot of money. If you start doing this at age 20, you will have $228,563 at age 65! Waiting to invest until you’re age 30 will cost you $129,161 in earnings. But don’t get depressed if you’re not still in your 20s or 30s — it’s never too late to start investing. If you’re worried that it’s not the right time to begin investing, you’re wrong! Believe it or not, there’s actually a sale going on in the stock market right now. Start investing today! If you’re not sure where to start, find a financial advisor to educate, mentor and guide you. I recently complained to our financial advisor that my husband and I had lost a lot of money on our investments since the first of the year. She replied, “You haven’t lost anything yet — if you haven’t sold your investments.” What great advice. Don’t just react when the stock market is wildly fluctuating — consult with your financial advisor for some perspective before you do anything.

5: Determine Your Goals and Act on Them. Use the acronym SMART to help you assess what your financial goals are. Ask yourself whether they are Specific, Measurable, Attainable, Relevant and Time-Based. But, don’t get overwhelmed trying to tackle them all at once — start with a few and act on those. After you’ve attained one of them, move on to accomplish the next.

Don’t wait another day! Get involved in your finances and start taking action. Take just one step at a time, knowing that a series of small steps can lead to big results — and a financially healthy life.

Attend a Money Wi$e Women Conference — A Safe Place to Learn about Money and a great place to connect with other women. Visit www.moneywisewomen.net for a list of upcoming conferences.

Marcia Brixey is the author of The Money Therapist: A Woman’s Guide to Creating a Healthy Financial Life (Seal Press).

©2009 Caliope Publishing Company