We’ve all been told to save money. But for what? For that proverbial rainy day? (It always rains where I live, by the way. Seattle.) Can we ever touch our savings? When? I find that many people have a hard time saving because they are not sure what they are saving for, and then they feel really bad if they ever touch their savings.

So let me demystify something for you. There are three TYPES of savings, with different purposes, and we need all three. In this article, I will describe the first type—it’s called “Periodic savings” and it will alleviate your stress faster than you can say “periodic savings.” (And since you’re curious, the second kind of savings is your safety net and the third kind is your long term investments.)

Periodic savings is my favorite savings. It’s the most gloriously boring and powerful. What? Boring and powerful?? Well, this is simply a savings account that is ideally connected to your checking account. And this is where you save money every month for all those things that inevitably end up on credit cards or cause a cash flow crunch.

Imagine saving $300 every month into an attached savings account. Every month. Every month. (That’s the boring part. Set up an automatic transfer.) Now imagine your car breaking down and being able to pay for it with your debit card. You just transfer the amount you need back into your checking account from your savings account and voila! You did not increase your credit card debt. And you don’t have to be afraid of a larger than life credit card bill coming next month. That is the powerful part.

Here is what I recommend people do: list out all the “irregular” non-monthly expenses that you can think of, on a piece of paper. You may think of these as “sporadic” expenses. Or unpredictable expenses. The key is that they are NOT monthly. Shoot for expenses that are greater than $200-$300- or your list will get too long.

Examples from my own periodic expense list: Dental work, Christmas gifts, car insurance (paid twice a year), my son’s summer camp, car repair, august airplane trip, new glasses, back to school clothes for my son, tree removal in my front yard, landscaping…. Getting the idea?

I find that many times we can absorb these costs. Life is life, and there’s not a lot new here. But we can’t always absorb theses costs. That’s when we get into trouble- often credit card trouble.

So here is a money ninja trick for you: Add up all these costs and then divide by twelve months. Don’t freak out! You don’t have to save this much money every month. Take this number and cut it in half. Save that amount each month into your gloriously boring savings account. And simply transfer the money back in when you need it. (Example: If you add up this list and get $8,000 then this is $666 a month. Half of this is $333. Save that each month.)

Developing a periodic savings habit is the absolute foundation to feeling in control with your money. It can change everything. It is not your safety net or your long term investment money. This is money that is meant to be spent. How gloriously powerful, and a little boring, is that!

As a money coach, I am sometimes asked about credit scores, and people are often surprised by my attitude. I feel that people worry about them too much. Credit scores (Your FICO score) tell potential creditors how good you are at borrowing money and paying it back. That’s it. So it is a bit of a game. Yes, it is good to have a nice credit score, so when you buy a house, you will receive a more favorable interest rate. But take a deep breath. You are not your credit score. It is simply a number. And like I said, it’s a number about borrowing. Don’t we want to get off the borrowing merry-go-round? I often wonder when I hear people bragging about their credit scores. Really? Are they really bragging about their ability to borrow money? Maybe they are bragging about their ability to play the credit game?

But let me de-mystify your credit score for a minute and then tell you how to easily obtain your score, and potentially raise it.
There are three credit bureaus in the United States that collect information on how you play the debt game: Trans Union, Experian and Equifax. They then use this information to create a FICO score for you. This is the number that many people are afraid of. Creditors look at this number to determine if they will lend you money and what interest rate they will extend to you. Equifax scores range from 280 to 850 (the other two are similar) and a score of 660-724 is average.

Your credit rating is based on your history of debt (late payments etc.), how much debt you have and how long you’ve had it. The type of debt you have and new debt also affects your score.

You can receive a free report once a year from all three bureaus. Here is where to go: www.annualcreditreport.com. It is very easy, believe it or not. Fill in the info and click which bureau you want your report from. And for less than 8 dollars, they will even tell you what your score is. (The report is free. You have to pay for that dang number.)

So do some deep breathing, make a cup of tea, give yourself an hour, and pull your 3 reports. Have your printer ready, so you can print them out.

Look at the reports, one at a time. Once you’ve looked at one, it will be less scary to look at the other two. (Unfortunately, they are not always identical. One credit bureau may have some extra info, or include inaccurate information that the other bureaus don’t show. So it is best to look at all three.) Looking at them on line is helpful, because the website will show you an easy to read summary. The actually reports sometimes look arcane.

If the information on your credit report is accurate, then it will stay. There is not a lot you can do about information that is true. If the information is not correct (for example they show a credit card you don’t have, or a tax lien that you don’t have) then you can dispute it. Doing this on line is fairly easy. Just click their “dispute” buttons. The burden of proof is on them. If you dispute something as not true, they have 30 days to either prove it is true, or they must take it off your report.

Things that are considered negative, such as late payments, charge offs etc., can only stay on your report for 7 years. Bankruptcies and tax liens stay for 10 years.

Breathe. This is only a number. Rarely do people have a perfect score or even close to a perfect score. And even if you have things that are not attractive, such as late payments, the farther back in time they are, the less it affects your credit score. Our numbers often tell a story. Many of us have been through hard times. You may see a period in your life when you really struggled. There are stories behind every report. You are not your credit score. You are not your report.The best thing you can do to “fix” your credit score is to dispute information that is inaccurate. Then, endeavor that from today forward, you will pay all bills on time. Control what you have control over.

Yes, many people need to lower their debt to income ratio. Paying down your debts will help. But many are stressed now. So focus on what you can focus on. Pay your bills on time and this will help tremendously.

Remember, this is only a number. You are a wonderful person who is growing and developing financially over time. You are NOT your credit score.

Whether you need to spend less when you go out shopping or you want to be a more conscious spender, it helps to have a few tricks under your belt. Stores spend billions on the science of getting you to part with your money. They understand how your brain works and then use this against you. Well, with these tricks under your belt, you can beat them at their game and feel more in control. And you’ll be able to enjoy shopping without coming home with a spending hangover. (This article is focused on brick and mortar shopping. My next one will be on Internet shopping.)

1. Be wary of stores that are new to you. Why? We spend more money when we are in a new-to-us store. This is because dopamine- a wonderful feel good drug in our brain– is activated when we experience something new or exciting. (This is one reason we spend more when we are on vacation. We are in a novel situation experiencing new stores.) So try hard to come back to the store to buy your discovery. You may want to hit the new store at the beginning of your shopping trip and then tell yourself you’ll come back to the store later to make your purchase. Trust me, it simply won’t be as exciting the second time around and you’ll make a more reasoned choice.

2. Leave your credit cards at home when you go out shopping. Stores desperately want you to use a credit card because they know you’ll spend more if you do. (Macy’s is the worst offender, by the way. They are very aggressive in trying to get you to use a Macy’s card. Have you noticed?!) If you know the money is going to come directly out of your bank account, you will be more mindful and usually spend less. In fact, the evidence is overwhelming that when you buy items with a credit card, particularly things you enjoy, and you spend 20-30% more. There is simply too much of a delay between basking in the pleasure of buying those shoes and feeling the pain of having to pay for them– later. You want to “feel” the purchase in the moment. Macy’s be damned. Leave your credit cards at home.

3. The magic 90 minutes. Stores and malls do many things to get you into the “zone” of shopping. Notice that there are never any clocks on the walls of a store, and they often don’t have windows. They are hiding the passage of time. Well, after 90 minutes, you do start to zone out and mindless spending goes up. So do this: set the timer on your phone for 90 minutes. When it goes off, simply stop for a bit. Take a break and have a cup of tea. Look at what you’ve purchased and think about your plan. (Do you want to return anything you just bought?) I’m not saying go home. But taking a break every 90 minutes keeps you from overspending.

4. Limit the number of stores you visit. It’s very simple: the more stores you visit the more you buy. People may tell themselves that they are comparison-shopping. But often people feel like they need to buy something for all the legwork they’ve put in! You become very “invested” in how much time you’ve put in. You’d better at least get something….

5. Don’t carry items around with you that you are contemplating purchasing in a store. The issue is that when you carry products around with you, they begin to feel like yours. You get used to them and you feel a little “pain” if you have to put them back. You feel like you are losing something. (Humans are funny. We actually hate pain and loss more than we love pleasure and gain. It’s a brain thing.) Hence, items that get carried around are more likely to be bought. So if you are eyeing something, keep it on the rack or shelf until you decide. And if you’re worried someone will swoop it up before you decide, “hide” it on a different rack or shelf. Come on; don’t tell me you’ve never done that.

6. Don’t interact with sales people too much. Yes, they are quite friendly. But the more you interact with them, the more likely you are to purchase from them, for several reasons. One is that they are often skilled at selling to you. But people often unconsciously feel, after a point, that they don’t want to let down a sales person who has helped them.

TheDailyThrive.org is a private membership site for professional women. It distinguishes itself by being ad-free, hype-free, and fostering a community atmosphere for high achieving professional women. These women are tired of wandering the internet for relevant, helpful information. After all, time is money! So The Daily Thrive delivers to them a daily short article, six days a week, written by six experts. (Yes, you guessed it– I am their money expert.) These articles, or “sessions”, cover the six areas that professional women say they MOST need help with:

• Balance – how to find your own “work-life balance” and enjoy life more in the process
• Productivity—how to not feel overwhelmed and actually get more things done in a way that works for you personally
• Money Therapy—how to transform your own relationship to money—from how you earn to how you spend
• Negotiation- get support and guidance in asking for what you really want—at home and at work
• Everyday Tech—Find and tame the tech tools that actually will make your life easier (and let the rest go!)
• Nourishment—because it doesn’t really matter if you don’t physically feel good…

This site only costs members $20 a month, and is completely free for the first two weeks once you join. The Daily Thrive believes strongly that spending five dollars a week for targeted help and community is worth more than the time wasted cruising the internet for help. The time has come to be more strategic with learning.

There are other bells and whistles on the site, such as additional courses members can choose to take, and monthly talks by amazing experts.

So check out www.thedailythrive.org and sign up today. Help is on the way. And it’s free for the first two weeks.

A couple of Saturdays ago, I finally sat down with my magic crystal ball. I was ready to create my personal 2012 spending and income plan. I was a bit nervous this year about what I would see in the ball. I really need to convert my house to gas, or at least replace my dinosaur of a furnace. Yikes. And I’ve been asked to join some friends on a big out of country trip. I would like to go! And since I already did my business annual plan, so I know what income I have this year.

So I sat down with a cup of Starbucks coffee, called up The Crystal Ball and set to work.

(Lights darken, crystal ball begins to glow, getting brighter and brighter, mists swirl in its depth and begin to part, and I lean forward, peering into the future….)

Two hours later, I had all my answers. Well, I had a lot of answers and I wanted time to think. To feel. To journal.  To digest the future I had just seen. This future seemed to have several scenarios and I was going to have to make some choices. I am reminded of that saying, “You can have anything you want, but you can’t have everything you want.” Rats.

So I poured another cup of coffee. And found some Godiva chocolate.

Each year I go through this ritual, and I simply can’t imagine living without a crystal ball—my annual spending plan.  Some call it a “budget”, but I really hate that word and I don’t even let my money coaching clients use it. It’s a PLAN.  My plan. I create a plan every month to guide me through the month. Wow. It’s truly hard for me to imagine not having this monthly guiding light. But every January I take it to the next level and plan the entire year. I do for myself what I help my clients do.

I think about all the things I really want in the coming year, and all of the things I need. (Like travel and new furnaces.) I think about the reality of my life and what large expenses will come regardless of my love of them—car repair, my son’s orthodontist bill. I think about my goals and my dreams for the future.

Of course I put all my normal monthly expenses into my annual plan, but I debate those too. Every year I look at my expense with a fresh eye. Is it time to change cable companies? Am I happy with my hairdresser? (Yes!) Is it time to let go of the hardcopy newspaper? (Maybe.)

When I work on my annual spending plan, I have to balance all of my expenses against the money I have coming in this year. Oh- that part. But there is a fundamental truth to money that doesn’t change: you simply cannot spend more money than you have coming in. Well, you can by using debt or draining your assets, but in the long run, there is great unhappiness and stress down that road.

It’s certainly true that money is not the most important thing. But I find that when people have a clear plan and have a way to actually follow their plan, they think less about money and can then settle down and focus on what is important in their life. I have definitely found this to be the case in my own life. 

Well, for now, I’m still working on my own annual plan. The beauty of the crystal ball is that it merely shows possible futures and outcomes. It shows me where I will be financially come next December if I do various things. Nothing is set in stone. I get to ultimately decide which path I will go down. Then I can relax and put some time into my hobbies, my family, my friends, my life.

I love the feeling of being in the driver’s seat of my own life

It’s a new year. I know you may be struggling with a Post-Holiday Spending Hangover. But you get to start fresh. Really! So let’s start off the year with a simple, but helpful idea. It’s called Do No Harm Spending.

But first, let me throw out a deep thought: You are the most important person in the world. There is no one more important than you. And you have to take care of yourself. And you have to take care of the woman you will be at the end of the month. You have to take care of the woman you’ll be next year. And you have to take care of the amazing woman you’ll be in 30 years. And how you spend money affects these future selves.

So, when you are out shopping, I want you to practice, “Do No Harm spending”. Simply ask yourself the question—“Will I be financially harmed by buying this?” Because really, as in all money matters, this is about self-care. If you spend the money, will it leave you with sufficient money to save? Will it drive your credit card debt? Will it take money away from something you value more?

Practicing “Do No Harm spending” sounds like a simple thing to say, but it’s about taking care of yourself now, and all your future selves as well.

If I am eyeing $400 boots, I ask myself, “Will Mikelann be financially harmed in the buying of these boots?” Sometimes the answer is yes, and sometimes it is no. When I was car shopping, I had to think of the future Mikelann. “Will Mikelann be financially harmed next year by large car payments?” Yes or no. When I was considering a very large vacation, I had to really think of the future Mikelann. Because the current Mikelann just wanted to wander through Europe and not come back. “Will the future Mikelann be financially harmed by doing this?” Well, that one was particularly irritating, because I was also trying to fund my ROTH, and I was having trouble doing both.

Practice Do No Harm Spending. You are the most important. What you do affects yourself now, at the end of the month, possibly next year and maybe thirty years from now. When you spend, don’t harm yourself, and don’t harm that awesome woman waiting for you in the future.

PSST! I am proud to announce that I’ve been invited to join forces with The Daily Thrive as their “Financial Therapy” expert! This is an amazing new site devoted to professional women who want more balance in their life, and they want to thrive. So I’ve been spending part of my Christmas Vacation getting ready to help launch this site at the end of January.

Imagine learning everything you need to know about transforming your relationship to money, as well as balance, negotiation, nutrition and wellness and everyday technology. Imagine learning what to do AND how to do it, along with real time feedback and coaching from experts (like me)!

I know feeling better about money is important to you. And since you’re my loyal fans, followers and clients, and I want you to be the first to get in on this special project I’m lending my expertise to.

I realized after talking to the amazing women at The Daily Thrive, that their target audience is the same as my own audience- professional women who want to thrive more—and who often are presssed for time. And the truth is that I am the target audience myself. I want bite-sized doses of help understanding technology, and little tips on nutrition, and more help with productivity. We all have the same number of hours in a day. I want to feel better, work with ease and enjoy my life even more. So this site is one-stop-shopping. Really.

I’ll announce all the details about some really cool perks and special offers in an upcoming post. In the meantime, you need to sign up for the Daily Thrive mailing list here to get the join link on January 30. http://www.thedailythrive.org.

I am more than excited about joining forces with all the experts in this special project. Join me!

Here’s a question– Did you wake up last January with a spending hangover? You know what I mean- come January, when all the gifts are opened and the parties are over, the Visa, MasterCard, Macy’s and Nordstrom’s bills begin to arrive.

Credit card use is up 7% this holiday season. And sadly, it takes the average American who uses credit cards to finance Christmas six to seven months to pay off the holidays. Who wants to be basking in the summer sunshine while still paying for the gifts you gave your kids, family and friends?

If you want to avoid that January spending hangover, consider this: at the root of post-holiday debt is lack of planning. When we don’t do prior planning, we eliminate some of our buying options.

The answer is to create a “holiday spending plan”. So find 30 minutes, print this article out, grab a cup of coffee, a pencil and a pad of paper, and help yourself avoid the Post-Holiday Spending Hangover.

8 Step Plan to Avoid the Post-Holiday Spending Hangover

Step One: Create your Columns — On a sheet of paper, create three long columns. Label the first column “people”, the middle column “gift ideas” and the last column “amount”.

Step Two: Brainstorm People — Using a pencil, create a list of all the people you are planning on giving a gift to. Don’t put down gift ideas yet. Brainstorm people. One of the biggest problems around holiday gift giving is that we end up gifting a lot more people than we originally thought about. Consider creating three lists: Family, Friends, Service Providers (babysitters etc.)

Step Three: Brainstorm Gift Ideas — Write down gift ideas. You’ve likely already thought of gift ideas for some of the people. And make sure you write down in this column all the gifts you’ve already bought!! Did you pick up gifts over the summer or already start your shopping? Write these gifts down!

Step Four: What will the Gift Cost? — Now it is time to put down amounts of money in the right hand column. Do the best you can. You’ll enter a zero where you’ve already bought the gift you wrote down.

Step Five: Add it Up — Take a deep breath and add it up. This is the total amount you are planning on spending on gifts.

Step Six: Other Holiday Spending — Part of what puts people over the edge during the season is all the extra spending on things besides gifts. Grab another piece of paper and list out the following categories, with room under each category to break it down into smaller items. Write down: Holiday parties, Holiday food, Holiday decorations, Holiday travel, Holiday clothes, Holiday gift wrap/postage. Now go fill in the details. For example, under holiday decorations you may write down a tree, new lights for the tree and a couple of poinsettias.

Step Seven: What will the Other Holiday Items Cost? — Fill in the cost of these other forms of holiday spending. How much will the tree cost? Come up with a number for the new lights, gift wrap and postage. Guess where you have to. A guess is better than leaving it blank.

Step Eight: Totaling it Up and Adjusting — Now add your total gifts and your total “other holiday spending”. How do you feel about the amount? Does this seem like a reasonable amount to spend on the holidays? Really think about this. Can you afford this? Is it worth going into credit card debt to be able to give a gift to everyone you know? What are your other options? If your total plan seems too high, go back and make some adjustments and then re-total. Keep doing this until you feel better about the total.

This is often the time when people consider getting more creative. For example, can you give a family gift instead of gifting everyone in your friend’s family? Can you decide to draw names? I used to give gifts to friends but now we all go out and enjoy a play together. This came out of doing my own first holiday spending plan. I felt a little guilty when I approached them with my idea but discovered they were all relieved.

Remember, part of creating a plan is seeing what will happen before it happens! If you don’t like what you see, take the time to work on your list.

Be prepared to take this sheet of paper, this plan, with you when you shop- fold it up and put it in your purse. The best plan does you no good if you don’t bring it with you. As you spend money, jot down the amounts on your plan. Add up what you’ve spent on a weekly basis, or more if need-be. Where are you?

Trying to stick to a plan, regardless of how successful you are with it, will cut down on impulse buying, which is a major problem during the holidays. Without a plan, people buy more things and spend more money on each item they purchase. The temptations can be overwhelming when you are out shopping.

Also, a plan lets you know when you’ve completed your shopping. It tells you when to stop— if you don’t have a finish line, you are going to keep shopping as long as the stores are open.Knowing what you want to buy and how much you want to spend, before you leave for the mall, will save you a ton of money. You will finish your shopping earlier and you will have fewer impulse buys.

You owe it to yourself to head off that infamous spending hangover. And don’t forget the best benefit of all: a spending plan cuts down on stress! You can enjoy the holidays like they were meant to be enjoyed.

Happy holidays!

If 2012 is the year to make more money, raising your fees could be a vital ingredient. Many people have kept their fees flat for the last few years, due to concerns about the economy. But with the impact of inflation, you can’t keep your fees the same forever. Generally speaking, you should raise your fees by about 3-5% each year, simply to keep from falling behind.

And yet why does looking at what you charge, and possibly charging more money, feel so difficult? For years I’ve encouraged many of my clients to look hard at their fees, and to assess whether it was time to raise them. Often, it feels quite emotional. When you undercharge or simply give too much time away, you start resenting your clients and your work. And of course many service providers genuinely like their clients and deeply value these long-term relationships. They fear that if they raise their fees, they’ll lose these wonderful clients.

But it goes deeper then this for many women—and some men as well. They fear harming the relationship itself. Relationships are everything! And god forbid these wonderful people who are our clients think that we believe money is more important than people….

Time and again I’ve seen the “Good Girl Syndrome” raise its head and keep people from charging an appropriate fee. This “Good Girl Syndrome” is simply the behaviors that arise from wanting people to like us and not wanting to make people mad. Some call this the “internal people pleaser”—and you can see how this impacts our ability to charge people money.

I have found that women tend to identify with that internal people pleaser more than men do. Though of course there are plenty of men who struggle with this also. (Particularly men in the helping professions.) We fear that our clients will be angry that we’ve charged them too much money. We worry that raising our fees will harm our relationships with them. We worry that money will drive people away. And we all know that people pleasers hate not pleasing people….

But there’s another component to the Good Girl Syndrome—beyond just wanting people to like us. There is also a fear of not being good enough. So one way we protect ourselves against not being good enough is by striving for perfection. We think that no one can be disgruntled if we never make a mistake! But this perfectionism holds us back from making more money.

Countless self-employed women are waiting until they have it “right” (waiting until they’re perfect…) before they consider charging more.

We tell ourselves that when we are really ready, we’ll charge more. But somehow we are never quite ready. We never attain “perfect,” so we don’t want to look at our fees. Convenient, huh. Besides, we can’t charge more money. Not yet! We don’t have enough experience, or the right credentials or … When you add to this the desire to please people, and then you sprinkle in the concerns of the economy over the last few years, well, no wonder so many service providers feel frozen.

Waiting until we are perfect is a great rationalization to keep from moving forward. We stay where we are—undercharging our clients, giving away too much of our time for free, taking clients who are not our ideal clients, etc., all the while saying to ourselves, “someday I’ll charge more money. When I get it all together. When I’m really, really good at what I do. When I’m really WORTH it. Then I’ll charge more.”

We try to please our clients and go to great lengths. And while we wait to raise our fees, or reign in how much time we give away, resentment grows. When you undercharge or simply give too much time away, you start resenting your clients and your work. We don’t do our best work at that point. We feel taken advantage of, walked on. Our inner Good Girl grows resentful, while she continues to be as perfect as she can, and as nice as she can, sometimes for ungrateful clients…

I invite you to consider raising your fees. You deserve to make good money. And if nothing else, you deserve to stop falling behind.

(Information on Mikelann’s Seattle rate-setting seminar in here: http://www.seattlemoneycoach.com/seminar-how-to-set-and-raise-fees

If 2012 is the year to make more money, raising your fees could be a vital ingredient. Many people have kept their fees flat for the last few years, due to concerns about the economy. But with the impact of inflation, you can’t keep your fees the same forever! So please consider joining me for this live all-day seminar, by yours truly, in Seattle. I am taking 10 self-employed women on a journey to explore setting and raising fees in ways that feel good to us and allow us to make more money.

Often, women are conflicted about charging people for helping them, or they simply don’t have the confidence or skills to set their fees where they should be—and raise their fees when it’s appropriate. The day will include deep discussions about how to charge what we are really worth, why this is often difficult and how we feel about what we charge. Be prepared to do some journaling and guided visualization work, as well as learn powerful information.

This seminar is for women in service-based businesses– from therapists and graphic designers to consultants, lawyers, and hair dressers. (It is not designed for product pricing.)

So if it’s time to make more, come and learn how to set the right fee in the first place, when and how to raise your fees, and how to communicate this increase easily to clients. We’ll also cover how to keep from discounting your prices, how to talk about price comfortably and how to confront that “Good Girl Syndrome” that sometimes gets in our way. And we’ll learn about the psychology of pricing, so you really understand the dynamics of fee-setting. Most importantly, shift how you feel about charging people. This seminar will help you make more money and have more peace of mind doing it.

For more information, or to register, please go to http://www.seattlemoneycoach.com/seminar-how-to-set-and-raise-fees