Worry to Wealthy Thank You

Chapter Three

If You Don’t Count Your Money, Pretty Soon You Won’t Have Any to Count

“I think I’d better wait until I have more money before I…”

Fill in the blank:

…get an assistant

…expand my office

…take a business class

…hire another employee

…take a salary for myself

So how long have you been waiting for the extra money to just show up?

Let me give you a tip:

More money doesn’t appear in your life until you make the commitment to your next level of growth by investing money in it.

When you commit time, energy, and money to increasing your income, you take yourself seriously, and others do, too.

I’m not talking about going into debt to fund a frivolous trip to the Bahamas or a shopping spree with designer labels you can’t afford. That’s consumer debt – Bad Debt.

I’m talking about Good Debt. Good Debt is the money you leverage to make an investment in your business growth and prosperity.

The owner of a $3 million a year manufacturing plant told a group of small business owners at NAWBO (National Association of Women Business Owners) this: “In order to grow your business you’re going to have to get used to bigger and bigger negative numbers.”

Gulp. A few sage business owners nodded while everyone else blanched white at that bald statement.

But it’s true.

Bill Gates didn’t build Microsoft on his personal savings.

Stephen Spielberg doesn’t finance his own movies.

They use OPM. Other People’s Money.

They borrow money from banks, get loans from friends or family, or get a group of investors to pool their resources to finance growth.

Much of What You Hear From Financial Experts is Wrong for You

If you’re a woman business owner suffering from financial stress, I have a message for you:

It’s not your fault. It’s because the standard financial advice you’re getting from the usual experts is WRONG!

Most of their advice is directed to the large population of worker bees – people on fixed salaries who work at jobs with little potential for growth. But their message is not for you.

They tell you to pay off all your debts. WRONG! You will want to get rid of debt eventually, but this should not be your first priority. Steve Jobs got business loans and investors to build Apple. Do you think he spent all his time worrying about how to pay them off ? No, and like him, you need to spend your time and energy figuring out how to build your business and make enough money that the debts don’t matter.

The Small Business Administration has estimated that it takes 1-2 years for a new business to become profitable. When Jeff Bezos was marketing Amazon.com, for the first five years he said that he wasn’t trying to be profitable. He said he was trying to get users because he knew the profits would follow later—and they did.

Do you think that most entrepreneurs save two years worth of expenses before they open their business? Certainly not. They have a great idea and convince others to invest in it to help them launch it. Many successful entrepreneurs started their businesses with credit cards and loans from family and friends.

It’s important to make a distinction between Bad Debt and Good Debt. Bad Debt is consumer debt—clothes, restaurants, vacations, cars, etc. It’s any money spent on your lifestyle that doesn’t enable you to make more money. Good Debt is borrowing money to grow your business exponentially so that you have a better product, increase market share and get more clients.

The experts tell you to stop spending money. WRONG! It takes money to make money. I spoke to a woman who was looking for the cheapest networking group she could attend. She was shocked when I told her she needed to go to the most expensive one. Why? Because the people at the expensive group have money and can afford to pay for your services.

They tell you to invest in the stock market. WRONG! The stock market is just group investing in other people’s businesses. Shouldn’t you be investing in yours?

In September of 2008, as the stock market plummeted and we headed into The Great Recession, I watched in horror as all the talking heads on local and national news channels cautioned Americans to stop spending money: “Pay off your debt, don’t buy anything, save your money!” was the standard mantra.

Since 70% of the American economy is consumer spending, this wasn’t helpful advice. When nobody is buying anything, nobody is selling anything either, which means companies start losing profits, so they cut expenses, stop buying goods and services, and lay off employees.

Of course, if you’re an employee, the threat of losing your job and not being able to pay your bills is terrifying. Having the value of your house go down to below the value of the mortgage is just about the worst thing that can happen, because most people’s biggest asset is their home and that’s what they are relying on to help them retire. So it’s not wrong to tell them to save their money and not spend anything they don’t need to, because they could lose their income and their assets and be in real trouble.

I think it’s much scarier to have a job than to have your own business. When you are employed, all your money comes from one source – your employer. You’re like a business owner with only one client. If that client decides to fire you, you now have no income at all. But if you’re a business owner with 50 clients, some of them may leave, but not all of them at once. You have many sources of income!

What’s great about being an entrepreneur is that no matter what the economy and everyone else is doing, you have opportunities to prosper. I teach Financial Stress Reduction® workshops, so I knew in an economy that was spiraling downward, I had an unlimited market niche. Of course, so many people were worried about money that it was often harder to convince them to spend money on solving the problem. But I knew that problem would be solved if I just talked to more people.

What’s important when the stock market plummets is cash. I suggest you keep a lot of your funds liquid so that when the stock market plummets and the economy tanks (which seems to happen about every 8-10 years), you have money to weather the storm. Yes, I know that you’re not making money on that money when it’s just held in low-interest savings accounts or CDs. But it’s safe, and it feels good to have some money that isn’t at risk.

The usual financial experts aren’t going to tell you that. They want you to invest your money in the stock market and more risky investments that will earn you a bigger return. It may or may not. It’s a gamble. But it will certainly earn them a bigger commission. So of course they are telling you to save money and invest it. In good times and in bad.

Meanwhile, many small business owners are trying to build their businesses without investing enough money in the things that matter most: sales, marketing, professional advice such as legal, accounting, intellectual property protections, etc. In The Millionaire Next Door, Thomas J. Stanley and William D. Danko, state “The affluent, especially the self-made affluent, are frugal and price-sensitive concerning many consumer products and services. But they are not nearly as price-sensitive when it comes to purchasing investment advice and services, accounting services, tax advice, legal services, medical and dental care for themselves and family members, educational products, and homes.”


Here’s how to calculate the amount of money you’ll need at retirement:

Whatever you have now + Ten million dollars.

That sounds like enough to make you feel safe, right?

If only all those emails telling me I’d won the Swiss Lotto for $3 million, or I had a long-lost Chinese relative who left me $6.5 million, or a political leader in Nigeria died and his heirs would pay me 20% of $10 million, were true. I figure I would now have $42 billion. Enough to retire!

I asked several financial advisors I know to estimate the percentage of Americans who can actually save enough money to afford a reasonable lifestyle for 25 years without working. Their answer was about 3%. In Pound Foolish: Exposing the Dark Side of the Financial Services Industry, Helaine Olen reported that, “Only 1 in 5 workers over the age of 55 has managed to set aside $250,000 or more for their golden years. These are not exactly sums of money that will go far in retirement, especially when you recognize that many experts in the field believe that people need to save up a minimum of $1 million to get by in their post-work lives, a net worth currently achieved by 8% of all households.”

Social Security helps—and it isn’t going bankrupt, either. Michael Hiltziks’ column in the Los Angeles Times in March of 2014, outlined the relevant facts: Life expectancy has risen since Social Security was instituted in 1935. But the difference is mostly because of improvements in infant mortality. In 1935, if you made it to age 65, an average 65-year-old man could expect to live to about 77, and a woman to 78. In 2009, the figures were 83 for men and 85 for women. That’s an extension of 6-7 years, not the decades often reported. And the payroll tax has increased from 2% at its inception to 12.4% today.

It will be a thin retirement if that’s all you’ve got, but it certainly helps. If you continue to work part time, have your own business or start one, you can continue to earn money.

Back in the mid-twentieth century, more people had pensions to sustain them when they retired—a guaranteed monthly income that continued until they died. Almost no one has that now, except for government workers.

I spoke with a 50-something man who said he was burned out at his job and wanted to retire. But he was afraid. “I have enough money to last twenty years,” he said. “But if I live longer than that, it’s a problem.”

Living too long is a problem? No—the problem is working too hard and burning out. The problem is too much work and not enough vacation. The problem is not having work you love.

I attended an interview with Joan Rivers, when she was 80 years old. Asked if she was going to retire, she said, “And do what?”  “No, I love my job,” she continued, “I don’t want to do anything else.” Retirement is for people who hate their jobs. Work is hell when it doesn’t match your skills, talents, or interests.

Find work that you love doing and you won’t want to retire from it. Retire to do what? How many days do you want to lie on the beach? Ken Dychtwald, PhD, founding president and CEO of Age Wave, a consultancy focused on aging populations, reported that “a lot of people ffind that they are unhappy and retirement itself is a wasteland. 20 or 30 years of leisure being satisfying is a myth—the average retiree watched 49 hours of television a week last year.”

You only think you want to lie on the beach because you haven’t had a good vacation. So go to Hawaii or Cabo or the Caribbean or someone’s backyard in Malibu now.

And enjoy a latte on the beach while you’re at it.

Spend Some Money on Fun Now

“Girls just want to have fun…” goes the Cindi Lauper song. Boys, too, I should imagine. I certainly do.

When it comes to accumulating assets or accumulating experiences, I fall decidedly on the side of experiences. I want to have fun now; I don’t want to sludge at a job I hate waiting for the day I retire to live free and love my life.

I make it a point to keep lots of uncommitted time in my week. I take a lot of Fridays off. Since I don’t overdo my work, it turns out I don’t want to retire, either.

You have to figure out what work/life balance you want. Is it okay with you to have less stuff and more memories? Research has shown that at the end of their lives, what most people treasure are their memories of happy times travelling, having adventures, or time spent with loved ones.

I’d much rather travel and remember the wonderful time I had than buy another CD or bond. (I can hear the groan of a thousand Financial Planners across the land as they read that.)

I don’t want to buy a house with a big mortgage that I have to pay every month, whether or not it’s a good month in my business. With other investments, I can buy more when business is good and less when there’s a lull like the Great Recession. (Now the groans come from Real Estate agents.)

Truthfully, saving and investing is not my area of expertise. I tell everyone they should get some financial planning advice from someone they trust who is an expert. You’ve got to do something with your excess money (don’t you love the sound of that?) after all. Owning a house can be great, and having other investments can be great, too. Find a financial advisor or real estate professional who you believe can help you invest wisely while paying attention to your level of comfortable risk.

You just might want to balance it all so that you get some time off and some great vacations, too.

I read Dame Judi Dench’s autobiography And Furthermore. What a wonderful life she is having!

I loved this passage at the end of her book regarding retirement:

“You do see people who work towards an age, and then at sixty or sixty-five you see them go into a deep decline, and you wonder: Why? What do you retire for? You retire if you are in a job that has just kept you employed, and given you some kind of income, and then you retire to do things that you really want to do. Well, I am doing the things I want to do now, so I don’t want to retire…It is the thing I have always wanted to do, and I am lucky enough to be doing it. You don’t need to retire as an actor, there are all those parts you can play lying in bed, or in a wheelchair.”

Invest in Your Own Business

People are weird about money.

I’ve been helping people make and manage money since 1984. Over the years, I’ve made a study of the inner workings of people’s psychology and behavior with money.

For example, people think they’re saving money when they don’t buy things. Makes sense on the surface, doesn’t it? But they tend to not make a distinction between things that are frivolous baubles and things that would help them make more money if they invested in them.

If you’re in business for yourself, that idea will get you in trouble. Yes, you need to budget wisely and not overspend. At the same time, you have to invest money in your business before you get a return on the investment. You have to spend money on web sites, office supplies, computer hardware, software, and training, creating and producing a product, trademark protection, insurance, advertising, public relations, and much more. Even if it increases your Good Debt for a time. You have to factor all of that into your pricing to make sure that you are profitable.

You might save money today by not developing a web site but in the long run it will cost you thousands of dollars in lost sales. It’s like going to a networking meeting with no business cards or brochure.

If you’re in business and have all the infrastructure bought and paid for and you aren’t getting enough business, you need to invest money in more education – take a workshop, hire a coach or a business consultant. You probably need to learn better sales and marketing techniques and if you don’t invest money in that, all the other money you spent on your business is going to go down the drain.

People resist getting additional training because they think if they just work harder, faster, longer, or send out more emails that eventually what they’re doing will pay off. But if you’re doing the wrong things, doing more of them won’t help you at all. Pay the money and get expert help – that’s what will save you money, save your business, and save your sanity.

How to Solve Your Love-Hate Issue With Money

People have funny relationships with money – studies have shown a majority of people believe money is a bad and corrupting influence. But at the same time they want to have millions of dollars to relieve their fear of financial insecurity! With that kind of ambivalence, it’s hard to make money and hold on to it. It’s been estimated that about 70% of lottery winners are broke within 5 years. Part of the problem is psychological, and part of it is just plain ignorance of sound money management principles.

Years ago I read a book on lottery winners and noticed that there seemed to be three things that all the lotto winners did – they bought a new car, took a trip (usually to Hawaii), and they all said the money “wasn’t going to change them.” Now, if you thought having money was a powerful force for good, wouldn’t you say, “Hey, this is really going to change me – I’m going to be a better person now!”?

Rob Anderson of Louisville, Kentucky, purchased a lotto ticket by mistake – he wanted 3 separate Quick Picks but the clerk printed out 3 Quick Picks on the same ticket. So he kept that ticket and bought 3 more individual tickets to give as gifts. Guess what? One of the numbers on the ticket he kept due to the mistake won him the Powerball Lottery of $128.6 million! When asked what he was going to do with the money, he said he was going to buy a new car and was thinking about taking a trip to Hawaii. (What did I tell you?) But the first thing he said was, “We’re really grounded people. My wife taught me well, so to speak, to hang on to that dollar and see how far it gets you. We’ll still clip coupons and still look for the clearance rack.”

In other words, it “wasn’t going to change him.” See what I mean?

For all the instant millionaires who go on spending sprees and give away all their money, there are others who save diligently, invest prudently, and never spend a dime.

In December of 2013, the Los Angeles Times ran an article about an elderly widow who showed up at a small law firm looking for assistance. She needed help managing her money. When an attorney asked her what she thought she was worth, she said perhaps $40,000. She was quiet and unassuming and had been a first grade teacher for 35 years.

When she passed away in 2011, she left over $5 million to 15 charities. She had so many assets and papers, it took the law firm two years to unravel it all. The article mentioned she had a Quaker Oats can in a closet that contained savings bonds from the 1940s and 1950s which turned out to be worth $183,000.

We can avoid these two extremes. We can lighten up about money and believe in the good things it can do for us. It can be a powerful force for good just as easily as a bad influence.

Here’s how to solve your love-hate issue with money:

  1. Make a list of all the things you can do with extra money that will be good for you, your family, your friends, and the world.
  2. Say positive money affirmations every day like, “People love to give me money!”, “I am rich and wonderful” and “All my clients praise me and pay me!” They help you stay focused on what you want instead of what you don’t want. I believe in this practice so much, I wrote a book The Wealthy Spirit: Daily Affirmations for Financial Stress Reduction filled with them.
  3. Write down your million-dollar budget. When you make your million, where will you spend it? Remember that it will probably cost you more money to have a bigger business with more space, employees, advertising, etc. Every dollar you spend is a gift to someone and is enriching others.
  4. Design your business plan to generate the money you want. You have to either serve a lot of people for a small price or just a few people for a large price. Which one suits you?
  5. Take positive action. You can’t wait for your ship to come if you never send one out. Or, as God said to the man in the story who kept praying to win the lottery – “Buy a ticket!”

You Can’t Help the Poor and Starving if You are the Poor and Starving

I meet so many fabulous entrepreneurs who are so eager to help people and change the world with their wonderful work. But if they don’t master how to get paid – and paid well – for their time and energy, they are going to end up broke.

I learned that the hard way myself. When I set out to be a professional actress, I notice I chose “starving actor” rather than “rich famous movie star.” It took me many years to figure out that I needed to change my mind-set as well as my actions if I wanted my prosperity to improve.

Women are especially prone to this problem. I think it’s because we possess some innate gene or tendency that makes women excellent givers because we need to have that ability to be able to care for children. It’s a survival mechanism. It makes us fabulous at customer service.

But maybe not so great at sales, earning six-figure paychecks, or promoting ourselves, eh? We have to learn some new tools to be able to do these things if we want to make a good living.

And no, it doesn’t mean you have to be pushy, money-grabbing, or arrogant either. That’s the real fear behind our reluctance to toot our own horns, isn’t it? So we can happily refer people to our friend’s business or say others are worth their higher prices, but our client rosters stay thin and filled with people paying discounted rates.

Financial Reports

I hear the Wall of Resistance going up all over the land.

I know how difficult it is to face the reality of your numbers. Breathe. Relax.

“I don’t want to look too closely at my numbers,” said a client of mine. “Everything seems to be working out okay and I’m afraid if I look at them too closely, I’ll mess things up!” Or as one of my clients said, “I bank at the fog bank.”

Here’s the truth: your numbers are your numbers. They exist and they are real whether you look at them or not. You’re much more likely to mess things up if you don’t know what they are.

Can you see the danger that lurks in not knowing? How are you going to make an informed decision about how much to spend on your vacation, or birthday party, or your daughter’s wedding, or Christmas presents, or a new car if you don’t know exactly how much money is coming in and going out of your bank account?

If you’re nervous or scared about your finances and feel out of control with your money, you probably don’t have a budget. So start one now. You don’t have to buy a fancy program and learn how to install it and use it. Just use a simple excel spreadsheet. Put columns down the left hand side and label them income and expenses. Next, put a column on the right for your budget amounts – what you plan to spend on each line item. The third column to the right of that one will be what you actually spend.

It may take an hour or so to set it up, but after that it only takes about two minutes to log your numbers in every time you pay your bills. You’ll see what you spent, what bills are still due, and how much money has come in, and what’s left. This is the greatest management tool ever.

Because you won’t be able to lie to yourself about your spending any more.

1.  Balance Sheet

When I have people in my classes start adding up their net worth, the tension rises appreciably.

“This isn’t reducing my financial stress!” they grumble.

“Not today, maybe,” I tell them, “but by the time you finish this class you’re going to be happy you did this exercise. You’ll love counting your money when you have more money to count!”

Many people just never even get started on the road to financial health because they dread taking a realistic look at where they are now. But until you’re willing to look at the sum total of what you are worth, you won’t be willing to take action to improve it. And really, hiding out from the truth just puts you under so much tension and stress. You’ll always be afraid that you’re seriously in trouble with the money game, and that’s going to affect everything in your life negatively.

Count it. What if you’re better off than you thought and you’ve been spending all this energy and sleepless nights worrying and fretting for nothing? I’ve had people come back to class after doing their balance sheet exclaiming that they had no idea they were doing so well – that their net worth was a lot higher than they expected!

I’ve also had people say their worst suspicions were confirmed. It doesn’t matter what the number is today. It’s going to change for the better now, because you’re taking charge of it. You’re going to make new and better decisions about your money, because you’re working on it. I know you are because you’re reading this book. Good job! Celebrate your richer future – it’s on its way because you’re taking action now.

2.  Income Statement

Otherwise known as the profit/loss statement, this shows you how much money came in, how much money you spent on tax-deductible business expenses, and what is left is either a positive number—your profit, or a negative number—your loss.

Get an accountant or a bookkeeper to prepare this for you with a good computer program like Quickbooks. This is one of those things you should delegate because they can do it faster and better than you while you spend your time doing PR, making more sales, networking, or planning the next phase of your business. “Work on your business, not in your business” as Michael Gerber, author of The E Myth would say.

I owned a bookkeeping service for twelve years and had thirteen employees. I am perfectly capable of doing my own bookkeeping. But it would be a mistaken use of my energy and talents. If you make $250 per hour, it puts you at a loss to spend an hour of your time doing $50 per hour work. Just because you can do it, doesn’t mean you should do it.

Ask your bookkeeper to print your profit/loss statement as a graph. It’s amazing what you can learn from seeing the picture of the rise and fall of your fortunes.

One of my mentors, Patty DeDominic, asked me to do a graph of the profitability of my bookkeeping service over the prior four years. Even though I knew the numbers, doing it as a graph made certain things stand out.

The graph showed that my business had certain distinct patterns: I lost money every April and December and I was most profitable in January, February, June, July, and August. I was able to attack the problems creatively after seeing them so clearly. I noticed I overspent on holiday gifts and parties in December, and April was a time extra taxes were due. So I cut back on the holiday spending and found a way to make extra income in April. You might see similar income or spending trends that you can consider when planning your business strategies.

3.  Budget (This stands for Baby-U-Deserve-Getting-Every-Thing)

I mentioned Low, Medium, and High Budgets briefly in Chapter Two. Here’s how to design them: Start with your Medium Budget first, and write down an estimate of all your income and all your expenses for the month. Make a copy of that budget, and cross out whatever expenses you can do without to make your Low Budget. Finally, think about your financial goals and write down everything you would like to spend money on – a bigger house, new car, bigger contributions, more vacations, etc. That will be your High Budget for your rich and successful life.

It may take some time for you to figure these out initially, but after they’re done it will only take you a few minutes each week to log in your income and expenses after you pay your bills and make your bank deposit.

Instructions for Weekly Budgeting Day

1.   Have a positive attitude and enjoy counting your money.

Celebrate and say a prayer of thanksgiving for every dollar of income you received. Congratulate yourself for being a productive member of society and having served your clients really well with products or services you are proud to have created. Read over some of the glowing testimonials and thank you notes you’ve received.

2.   Have an attitude of gratitude while you’re paying bills.

Say a prayer of blessings as you pay your bills. Say thanks that you have the money to pay for these things, that you are delighted to receive the benefit of whatever the product or service is that you are now paying for. Otherwise, do without it. If you don’t like paying the light bill, live in the dark with no phone, no heat, no computer, no internet. After I told her this, one of my clients exclaimed, “I need a gratitude adjustment!”

I write “Thank you!” on all my checks, although we don’t use checks as much now as we once did, do we? But you can write “Thank you!” on your credit card slip, too, or just say the blessing as you pay someone with cash. I’ve been doing this for probably 15 years or so now.

1.       Send the money to others with joy

Feel the flow of money – it’s always moving, coming in and going out. It isn’t of any use at all when it’s static. It’s supposed to be multiplying, and it’s supposed to be shared. Every time you pay a bill, you’re blessing someone who provided the product or service for you. You are helping them to grow and prosper, feeding their families, and maybe their employees, too.

So many people get caught up in the fear of lack and limitation with money, afraid to let go of it because maybe they won’t get any more. That’s just more negative thinking. If you’re going to buy the item, be glad to pay for it and enjoy helping enrich another person.

2.       Pay something on every bill, or send a note promising a future payment

I know things get tough sometimes and money gets tight. Maybe you can’t pay all that you owe right now and can only make a partial payment. These things happen, and most people will encounter this problem sometime in their lives. The worst thing you can do is stop communicating with your creditors – but that’s exactly what most people do.

But if someone owed you money and stopped making payments, didn’t send a note, and didn’t return your phone calls – what would you like them to do?

If you just send a small check – or a personal note if you truly don’t have any money to send – every month, the person to whom you owe the debt will relax and see that you are being ethical and doing the best you can. Call them to arrange better payment terms if you need to.

More money will show up for you tomorrow, because you’re doing the work to make it happen today.

Medium Budget

This is your budget for what is actually happening now – what is your current income and what are your actual expenses?

Business owners often tell me it’s too hard to budget because they know what their expenses are, but they don’t know what their income is going to be.

Here’s how to figure what it has to be:

Total Personal Expenses + Total Business Expenses = Total Income Required

Do the math. How many people do you need to serve at what price to make the money you want? If you need to make $8,000 per month, you can have 8 clients at $1,000 or 16 clients at $500, or sell 8,000 $1 items or 1,000 $8 items.

The formula is:

Yearly Income / Number of Clients (or products)  = Price

Or you can do it this way:

Yearly Income /  Price = Number of Clients

Let me be clear: your income may fluctuate from month to month, but you have at least an approximation of what your income is going to be. What do you do to produce income, and can you do more of that to ensure that you make enough? What additional sources of income can you rely on?

For budgeting purposes, if you’ve been in business for a while and have a track record, take your total income for last year, divide it by twelve and you’ll have your estimated monthly income. If you’re just starting out, you’ll have to guess, but pick a number and then do everything you can to make that number happen. When you commit to your numbers, you’ll be amazed at the creative ideas you have to honor your financial commitment to yourself.

Low Budget

This is the tighten-your-belt budget—the one everyone’s afraid they are going to have to be on if they look too closely at their finances. My friend Carol Allen calls this the “Oh, Shit Zone”.

But if you don’t face it up front, you’re never going to have the clarity to know how to get out of Low Budget and into Medium or High Budget.

A journalist I know wrote me to ask what I would say to a sad reader of hers who was disabled at 57 and in credit card debt. She gets a small monthly disability check and has a house paid for, but nothing else. Did I have any words of wisdom for her?

Yes. People do get themselves into some pickles, don’t they? I know they want a magic answer to have their debt disappear, but it’s going to take money, which means it’s going to take work.

I know life gets tough sometimes. It’s hard to keep believing that things will get better when the economy is in trouble and nothing seems to point to a better day. There is a better day coming, but you have to take the right steps to make sure you’re in the sunlight when that day arrives. There is no magic answer. You have to find some work you can do to bring in money – either employment in a job or start your own business.

I met a woman once who owned a very successful employment agency. When I asked her how she got started, she said she was in a serious car accident and was hospitalized for almost a year. She was her own sole support, and she said she had to find a way to make a living from her hospital bed. Immobilized, she couldn’t move anything but her mouth, so she said to herself, “Well, I can talk on the phone so I’ll do telephone sales.” And that’s how she started her business.

What talents or skills do you have that people might pay you for? Look in the want ads, post your resume online, talk to friends, or old employers.  You could start your own business on a shoestring if it’s service-based, but eventually it’s going to require more money.

The only thing that will keep you going is your strength of will. You determine what you want to happen and you dedicate yourself to doing whatever it takes to make that happen.

Educate yourself. You may need to upgrade your skills, take classes, read books, listen to podcasts or watch videos. There’s an abundance of information on the internet. Get a mentor or find someone to partner with you who has different skills than you do. Join or start a mastermind group of friends who can help and support you and each other. You can do your own self-study program.

Even if you have a long range plan to save for a down-payment on a house, or dig yourself out of debt, it will be too depressing if you think about living on the cheap for too long. Try to be cheerful during your Low Budget days, know that they aren’t going to last forever, and gee, something great could happen today or tomorrow or next week and you could move up to Medium Budget! Then you’re going to do your positive affirmations with more energy and excitement, and that will have big payoffs in your daily joy and prosperity.

Whatever budget you’re on, always make sure you are living below your means. Committing to too many ongoing monthly expenses without leaving room for savings, emergencies, or opportunities isn’t going to make you a happy camper when the Homeless-Harriet-You-Might-Become wakes you from a sound slumber when the economy tanks, your child needs an operation, or the family breadwinner loses their job. This past recession has taught that lesson, but has everyone harkened to it? Or will the spending splurge start again immediately?


Sports Illustrated says 78% of NFL players go bankrupt within 2 years of retirement.

That’s a shocking number. It surprised me when I discovered how many famous, successful people have filed bankruptcy. When I had to file bankruptcy myself in the early 90s (I lost a major client and got stuck with a 16% under water mortgage when a housing bubble collapsed. For the whole story, see Zero to Zillionaire). I took comfort from the fact that I wasn’t alone. Life is risky and you don’t always win, but you can always recover.

Here are a few notable people who filed bankruptcy, but won their way back to a rich and wonderful life:

Walt Disney        Thomas Jefferson    Dave Ramsey  Mark Victor Hansen   Dorothy Hamill

Mark Twain         Henry Ford             Randy Quaid  Abraham Lincoln        Wayne Newton

Tony Braxton      Kim Basinger          Mike Tyson      Francis Ford Coppola            Sam Walton

Charles Schwab  Barry Manilow        Willie Nelson  Burt Reynolds            Mickey Rooney

Conrad Hilton     Jerry Lewis             Scott Pippin    Lynn Redgrave            Nicholas Cage

Milton Hershey (founder of Hershey Chocolate filed four times)

Mary Pickford, the silent film star, said a beautiful thing that comforted me when times were tough: “If you have made mistakes, even serious ones, there is always another chance for you. What we call failure is not the falling down, but the staying down.”

Now is the time to plan a better future. While you do that, figure out some low-cost pleasures that are really fun. Pack a picnic lunch and go to the beach, lake or park. Spend a day at a local art or natural history museum. Pop some popcorn and rent a movie. Invite your friends over for a pot-luck dinner.

Some of the best times I’ve had in my life were with friends when we were on Low Budget.

High Budget

This is the success budget – the rich one you get to live on when your business soars and you start making all the money you want! Why do you want more money? What are you going to spend it on?

Barbara Barschak, a partner at the Katz Cassidy accounting firm, told me that one of the pleasures for her of being on High Budget is that she doesn’t have to stay in “thin hotels” any more. When I asked her what she meant by that term, she said, “Everything is thin in them: thin sheets, thin towels, thin walls, thin carpet, thin drapes.”

The first time I made a High Budget for myself, it became my Medium Budget within four months. That’s the power that comes from giving yourself a goal and then motivating yourself to get it. A High Budget is a positive affirmation of your success in numerical form.

You have to master the numbers. Not only to create the money you want, but also to conserve and protect the money once you get it.

Several years ago, Oprah had a homeless man on her show along with two documentary film producers. The producers had placed a briefcase filled with $100,000 cash in a dumpster and waited for this homeless man to find it. They were doing a study to see how he would respond and if the money would change his life.

They offered him a financial advisor to help him set up a budget and teach him how to manage it, but he didn’t take them up on it. He got an apartment, furniture, television, car, and a girlfriend. He gave a lot of the money away to friends. He blew through all the money in about 6 months.

The money in the suitcase looked like untold riches when he had nothing. But when he upgraded his lifestyle, it ate up the money quickly. Before he knew it, the money was gone and he was back on the streets.

You, however, are a smart money manager, always keep track of your income and expenses, have savings, and a “rainy day” fund. Then you get to have some money to play with, but not so much that you end up with nothing.

Nancy Sardella gave this instruction in one of her marketing seminars: “Stop clipping coupons and spend that extra hour on your marketing plan!”

Getting smaller won’t help you go big. Design your High Budget and look at that every day. Put your creative brain to work: revise your marketing plan, make another sales call, write an article, post on your blog, post on Facebook, write an interesting tweet, get together with a friend and brainstorm ideas, raise your prices, or add a product or service.

Living within your means is important, but not as important as increasing your means. Go make better means today!

Spree Budget

I love feeling responsible. It makes me feel like I am a good citizen, a proper role-model, smart, savvy, and together. I’m taking care of the future, storing my nuts for the winter like the squirrels in my backyard. Having some money in savings makes me feel safer.

But then I can get bored and need to spice up my life a bit. At those times, I love throwing caution to the winds, escaping the bonds of frugality, and splurging on fun, excitement, travel, and fine dining!

I used to think the critters in my backyard never did that because they all seemed devoted to searching for food, building a nest, attracting a mate. But sometimes, the birds just sit in the trees and sing, apparently for no reason except to revel in the sound of their song. I think the life lesson of that is: When you’ve stored some nuts, be sure to take some time off to sing!

Sometimes we get so caught up in our obligatory bills that we forget that we need to nurture ourselves by spending money on something fun once in a while.

It doesn’t have to be a big sum or a big purchase. It can be a little thing like an ice cream cone in the middle of the day, going out to your favorite restaurant for dinner, buying that pretty necklace that makes you feel like a million bucks, or take a morning off and spring for a round of golf. (If it’s on a work day, you will have the added pleasure of playing hooky.)

Don’t let any negative self-talk get in the way of your delight. Your job is to fully experience and relish enjoyment and pleasure!

This is a gift you give yourself. You work hard, you show up for your family and friends, you have problems that you face and challenges you overcome. You get to relax and have fun, too.

But What About The Future?

My mother didn’t work outside the home, so she didn’t officially retire, but she died at age 67. That seems so young to me. (And it seems younger and younger every year as I age.)

I’m sure glad she didn’t wait until retirement age to have a good time. She and dad and our family went out to dinner, put on parties, had weekend getaways with friends and summer weeks at the beach, vacationed across the country to visit relatives, traveled, and played golf.

Every day in the news, I see people who have passed from this life. Some early, some late. None of us knows the time of our passing, only that it will come. When told life is a journey not a destination, I’ve heard it said, “You’d better enjoy the journey – the destination of life is death.” Yowza. I never thought of it quite like that, but it’s true, isn’t it?

So live a little and give a little. Buy the candy or the Girl Scout cookies from the kid who comes to the door. I have a rule that if a child comes to the door selling something, I buy it. I want to give them a happy sale in remembrance of all those nice people who said yes to me when I was the nervous kid at the door, hoping for a sale.

No, we can’t splurge all our cash the minute we get it. We want to have some money and resources saved in case we make it to “Super Senior” status, as my dad used to call the stage of life after 85. But I see too much money in the bank as just a lot of wasted opportunity.

One of my favorite splurges happened in Rome with my good friends, Shelley and Bobbi. We  saw this beautiful shop filled with delicious ice cream. Customers piled their ice cream cones high with various luscious flavors and then topped them off with flags, Eiffel Towers, curlicues, etc. We had never seen cones so ornately decorated. Like schoolgirls, we were enamored and kept piling things on.

We had no idea how much we had spent until we went to the check-out counter. Each cone was $25! We were so shocked! But you can’t return an ice cream cone, so we just giggled and ate them up. Our friends back home had a good laugh when I said our trip was on the “Shelley Lavender-see-Europe-on-$2,000-a-day plan.”

So today, go splurge a little with my blessings!

Debt and Credit Cards

There weren’t any credit cards back in the 40s and 50s, when my parents were just starting out and raising their family. Most people would get a mortgage for their house and a bank loan for their car, but that was about it. It was all cash all the time after that.

There were limitations to that financial reality, but perhaps easy credit hasn’t been so easy on us. Endless streams of advertising on the television, newspapers, social media, and every web site tell us we can have our dream for only $99 down and $49 a month. We’ve got the $99 and we’ll figure out a way to get the $49 later…

You see the problem. It works as long as everything goes perfectly, but what’s the plan if you get sick, or lose your job, or your kid needs braces, or (fill in the blank)? We want to be optimistic, but we also want to guard against possible losses.

I love credit cards – they are wonderful for keeping track of monthly expenses, tax deductible receipts, and for borrowing money when it’s a judiciously deliberated decision. Many a small entrepreneur got their start through a credit card loan.

But sometimes you can just save the money and buy the thing you want after you’ve got the money. Don’t forget that’s an option.

Maybe you don’t pay by check as often as you once did, instead paying bills through online banking, automatic charges to your bank account, or using credit cards. It’s still important to keep track of your spending, no matter what method of payment you use. How many of you are surprised when the credit card bill comes in to see how much money you spent? Credit cards are handy tools, but you get in trouble when you don’t keep track of how much money you actually have.

There was a time when credit cards weren’t accepted at the grocery store (until they discovered that people spend between 30-40% more if they can charge it). I went to the store with a certain amount of cash and if my total went over that amount at the cash register, I put things back. Now my tendency with the credit card is to just buy whatever I want and worry about paying the bill when it comes in next month. I have a pretty good feel for my “ballpark” figure of food expenditures, but sometimes it goes a bit over what I expected, and I think back – did I really need to buy the garlic butter spread? I only used it once…

What helps this situation is to have a check register for credit card charges. Write them all down as they occur, just like you do with checks. Then you’ll never be surprised at your bill again, and it just might stop you from spending on unnecessary items.

What do you do to keep your credit card charges in line with your budget?

How to Pay Off Credit Cards

List all the credit cards with an outstanding balance in order of interest rate, the highest one first. That’s the one you want to pay off first.

If you have one or two credit cards that have balances that are much smaller than the others, move them to the top of the list. You’ll pay them off first and you’ll feel successful that you accomplished this goal, and that helps spur you on to pay off the next one.

Pay more money to the first one on the list – I suggest double whatever you’re paying on the others. This will accelerate that one getting paid off and you’ll see it happening faster. Focus on the good feeling you get as you see that happening each month.

Continue to write “Thank you” on every check.

Stop thinking badly of yourself for being in debt. You’re a smart money manager who borrowed some money once and s responsible and paying it back now.

Only think about debts on bill-paying day. Every other day focus on how to make more money!

Celebrate every time you finish paying your bills – give yourself a reward for being a good money manager! (A little reward – not something you use a credit card to buy.)

Savings and Investments

“Pay yourself first!” is the lesson of The Richest Man in Babylon, a great little fable written in 1926 by George Clason.

Or as one of the participants in my workshop said, “Savings accounts are for saving, and I need to be saved!”

Years ago an actor friend of mine, Joey, got a regular part in a TV series. He told me all the other guys in the cast went on a spending spree, splurging on cars, houses, fine wines, fancy watches, vacations, etc. Joey put all his money in savings. “That’s my insurance policy that I’m never going to have to be a waiter again,” he said.

Our economy cycles through seasons of lack and seasons of plenty. I remember the recessions in the early 70s, 80s, 90s, and 00s. These downturns were always followed by upturns and the economy soared once again.

Somehow, during times of plenty, it feels like the good times have come to stay: We made it through the storm, survived, and now we’re doing great again and we’ve finally got it! We’re successful and we’re going to be on top forever!! We think.

That’s why people start charging up their credit cards again – they’ve been on Low Budget and now there’s more money and they want to splurge on High Budget. They’re free to do some of the things they couldn’t do when money was tight

That’s fine. You should have some spree money when the economy loosens up. But you’ve got to carefully figure how much and for how long. Otherwise you get caught up in a new habit of spending and forget to store up your grain for the lean years

Do not mistake it – there will be lean years come again. Have fun, enjoy your money, have the good life. Just make sure to have some cash reserves, too.

Note: A zero balance on your credit card doesn’t count as a reserve.

The Twelve-Step Program for Financial Stressaholics

With a wink and a nod to Alcoholics Anonymous and twelve-step programs everywhere, here are the twelve steps to treat your money disorders – spending bulimia and income anorexia:

  1.  We admitted we were powerless over money—that our checkbooks had become unmanageable.
  2.  Came to believe that a Budget greater than ourselves could restore us to sanity.
  3.  Made a decision to turn our will, insurance, checkbooks, and retirement accounts over to the care of a Financial Advisor that we understood.
  4. Made a searching and fearless moral inventory of our debits and credits.
  5.  Admitted to God, to ourselves, and to another human being the exact nature of our accounting errors.
  6.  Were entirely ready to have our Financial Advisor remove all these defects of our accounting software.
  7.  Humbly asked her to adjust our bank reconciliations.
  8.  Made a list of all persons to whom we owed money and became willing to pay them all.
  9.  Made direct payments to such people wherever possible, except when to do so would overdraw our bank accounts.
  10.  Continued to take financial seminars and when we were wrong promptly admitted it.
  11.  Sought through prayer and meditation to improve our conscious contact with our Financial Advisor, praying only for knowledge of her retirement plan for us and the power to invest enough money in it.
  12.  Having had a spiritual awakening as the result of these steps, we tried to carry this message to income anorexics and spending bulimics and to practice these principles in all our finances.

Live long and prosper!

Buy the complete book at one of these fine retailers

amazon bandn logo-header indibound indigo