You Don't Have to Be Rich

Penguin Books

ISBN 1-59184-012-0

Your Feng Shui Finance

Your wealth area should be organized and clutter free. Otherwise your abilities to make and hold on to money tend to be impaired. It should be a place that makes you feel as if you are already rich.

Fountains are good; they represent productivity. But a drippy faucet in your wealth area means money is running through your fingers. If a toilet seat is up, money is pouring down the drain. A healthy plant -- particularly when the plant is lucky bamboo -- is a symbol of growth

“A lot of what I do is give people permission to make changes -- not just in the color of a wall -- but changes in their lives that will make them happy. People are fundamentally afraid of change on every level. But when you make changes in their homes, then they see they can do it in their relationships, their finances, their lives.” (Sandra Goodall)

Four Easy Steps

Step One: Toss

For some people, tossing seems wasteful, and that makes it more difficult to do.

Questions: Do I love it? Did I order it? How does it make me feel?

If it is a book (not a potentially valuable first edition), will I or anyone in my family ever crack it open again? If the answer is no, your mission is clear. (And by the way, tossing isn’t synonymous with putting it in the garbage. If it's a book, think of your local library. If it is clothing, consider your local career closet or Goodwill.)

Step Two: Organize

Like belongs with like. Things have a natural order. My labels might be totally off base where your life is concerned.

Step Three: File

Getting your paperwork organized is a little like cleaning out a closet. It has to get worse before it gets better.

Step Four: Fifteen Minutes a Day

Remember the fifteen minutes you're going to save by ignoring the junk mail? That quarter hour becomes the time you give yourself to stick with this program. The goal is to touch each piece of paper only once. That means keeping a checkbook and a book of stamps at the ready and paying bill as they come in.

The ability to distinguish junk mail from the important stuff will give you a new outlook on your shoes, your kid’s toys, and your medicine cabinet. Resist the urge to solve every problem immediately.

What Do You Really Want

“The first step to getting what you want out of life is this: decide what you want.” (Ben Stein)

Shopper: “I would think only about how much I was saving, never about the fact that I was actually spending.” And, like a smoker who realizes he would like to live to see his daughter's wedding, she decided her goals were important enough to her to try to quit spending.

She went at it cold turkey -- “Is there any other way?” she asks -- and it was far from easy. “There are days when I look in the windows at the Nautica store and think: 'I want that. I need that.' But I know I don't. What I need is an (put your own need here) education for my son and me.” The urge to buy hasn't vanished, Eve admits, and she doesn't believe it ever will, much as alcoholics never stop craving a drink.

On the saving side of the equation, Eve also actively monitors her account balances. She makes it a point to pat herself on the back when she sees the balance on her Visa going down, and the savings and 401(k) balances heading up. By recognizing the fact that she is getting closer to her financial goals, she gets the same sort of boost a dieter gets by stepping on the scale after losing the first few pounds, or an exerciser making that first mile. It's inspirational. It makes her feel she can do more -- faster and better.

Why Goal Setting is More Than Exercise

Whether you do it on a piece of paper or on a computer screen or in a conversation over dinner, setting goals explicitly helps you do a number of things. It helps you see them clearly. It helps you flesh them out. It helps you realize all the interim steps you'll have to take to accomplish them. And -- oh yes -- it makes you happy. Goal setters are happier with their finances and less likely to worry about money.

Four Steps to Setting Goals

1) See what you want. Visualization is step number one. Be specific. Be clear. There is no need to be overly practical about this. Once you have your vision, focus on how it makes you feel.

2) Write your goals down. Why? If you don't write them down, you will likely forget them. Make an effort to keep that information in the forefront of your mind by repeating it to yourself over and over.

3) Turn your goals into and action plan. Once you've got a goal, you need to figure out what steps you will need to achieve it. That means breaking it down into parts.

4) Understand the time involved. We often overestimate how much we can accomplish in a single day, yet we generally underestimate how much we can accomplish in a year if we make just a little progress every day. Quick fixes rarely work.

Six Keys to Achieving Goals:

1) Begin: Take the first step.

2) Recognize: Recognize the obstacles in your way. Once you've located your obstacles, it makes sense to avoid them.

3) Habits: Build better habits. How do you initiate a habit? First, break the old ones. Track your old habit -- see what triggers it! It is important to replace your old broken habits with new and improved ones.

4) Automate: Automate where you can.

5) Reminders: Set up reminders.

6) Focus: Focus on tomorrow. Look forward, not back. Dwell on your successes, not on your failures. If you fall off the wagon don't consider it an excuse to stop trying. Simply start over again. Having a recent positive experience to recall helps as well.

Why It Still Pays to Invest

Unless you are extremely wealthy (in which case you don't need investment-size returns), just saving your money is not enough. You need to make your money work as hard as you do, to produce a return of its own, if you are going to reach the financial goals you set for yourself.

Living Within Your Means

“I have enough money to last me for the rest of my life -- unless I buy something.” (Jackie Mason)

Six out of ten Americans -- singles more than couples, Xers more than seniors (are) spending more than they can afford on at least one thing and more often more than one. But they often tell themselves they're living within their means because it makes them feel better.