What we will be doing

Every week over the next six weeks, I will be setting you tasks divided into two elements.

1. First you will have a task or tasks designed to help you identify and build your own personal financial psychology.
   These tasks will help you find out why you do what you do financially. They will weed out the bad habits and build on the good habits. Believe it or not, this is where 80% of money management lives.
2. Secondly you will have tasks that are simple numbers exercises.
   These are designed, step by step; to build up a real accounts based blueprint for your life. You will be amazed at how simple it is to build a comprehensive financial outline of where you are, where you want to go and how you are going to get there.

But before we get the magnifying mirror out girls, let’s first take ourselves to the bathroom for a good old cleanse. We all have picked up bad financial habits throughout life, things we do time and time again even though we know very well that they don’t serve us. So first we want to identify what those are for you.

Your Money Story

We all have our own personal money story within the wider scope of our societal money story.

Our parents and the roles they assumed financially, the patterns of money management they consciously or unconsciously modelled for us to copy and the financial education we received, or lack of it, all combine to create for you, your own personal financial patterns. And whether you earn £10,000 or £100,000 per annum those patterns dictate how you manage your money, how you feel about your money and how you plan for your future finances.

An increase in income alone will not solve your problems with money. Understanding your own financial psychology, dropping what doesn’t serve you, enhancing that which does serve you and attaching real numbers to your new awareness will.

By the end of this course, you will not only have had plenty of fun and gotten to know your financial self better, but you will have compiled a serious account of your financial life that will stand up in any traditional accounting forum such as with your bank or accountant.

So lets get straight into it. We’ll start off easy. Enjoy!

Actions of the Week

1. Spend some money!

Buy the best notebook you can afford. Preferably find one that has columns for calculating numbers such as a cash book. Buy one that makes you feel rich when you look at it and is sensuous when you touch it. Make sure you can easily afford it so that you also feel comfortable when you look at it. Make it the first purchase of your new financial life.

2. Why are you doing this course?

The first thing you will put in this book are your reasons why you are doing this course.

• What will it mean to you if you change your financial habits now and take charge of your financial life?
• What will it really mean for your future to be comfortable and confident in handling your money?
• Who do you want to become financially?
• What things will you be able to give yourself and those you care for?
• What experiences will you be able to have and what experiences will you be able to share with others?
• Close your eyes for a moment and see yourself in 12 months having taken control of your money? How does that feel?
• See yourself in 5 years and 10 and 20 years? How will your life be different if you complete this course starting now?

Write your answers in your book in less than 10 minutes. Do it now before you move on.

3. Why are you doing this course again?

Now, answer all the same questions again but this time see yourself in 5, 10 and 20 years NOT having taken control of your finances.

• What will your life be like if you just keep on doing what you have been doing up to now?
• What will that cost you?
• What will it do to your health, your relationships, and your day to day life?
• What things or experiences will you never have?
• How does that future feel to you?

4. Think of someone you admire for their financial skills.

Describe what it is about the way they handle money that you admire and why. Describe what results they get financially that you like. What is it you think they do differently to you that gives them these results?

Now you know why you will follow through on this course even if the nitty gritty of getting to the bottom of your personal numbers becomes tiresome. If you find yourself wanting to skip a task or putting it of, just come back to this first page in your notebook and remind yourself why it is important to you to become financially confident.

That’s it for this week – easy wasn’t it?

See you next week when we’ll be getting into your first numbers exercise.

What are you worth?

In financial terms this exercise is about establishing your “Net Worth.” What that means is that you will add up what you own, subtract what you owe and the result is your “Net Worth.”

Take my hand and I’ll walk you through it.

In the next few parts of this course, I have given you easy to follow instructions on how to complete this first exercise. I recommend you take a moment and read all the way to the end to get an overview before beginning back here with item number 1.

The entire exercise should take you less than 2 hours in total during the next week although you may have to take some time in between the beginning and the finish for some of your questions to be answered. You need to pick one day (today sounds good) and add up everything you own and everything you owe on that day.

Round off numbers to the nearest £. Estimate conservatively.

If you are not sure of a value, make a good guess. Getting the picture 90% correct and finished is better than aiming for 100% accurate and never getting there.

Your Assets (everything you own)

In your notebook on a new page write “Assets” across the top and underneath list the following headings shown in Italics in the following order.

1. Investment in Real Estate
(Do not include your home). Write the current market value of any real estate you own. If you own more than one piece of real estate list them separately and their value.

2. Investment in Business
Write the current market value.

3. Partnerships
Write the current market value of any investment you have in partnership with someone else.

4. Art, Collectibles, Autos etc.
Write the current market value of any collectible items you own.

Now add 1-4 together and that total is your “Illiquid Assets.”

What that tells you is the total value of the things you own that would take some time to sell and turn into hard cash if you wanted to.

Draw a line under this total and call it Total A

Leave a line and continue with:

5. Monies owed to you
(Also known as Debtors or accounts receivable). List the people who owe you money and how much they owe.

6. Pension Plan
Write down the current surrender value. If you don’t know this, just call up your pension company and ask them for the surrender value. It may be zero.

7. Life Insurance
Write down the current surrender value. Again, if you don’t know the answer, call up your insurance company and ask them for the surrender value. It may be zero

8. Stocks, Bonds
Write down the current value of any stocks or bonds that you own. If you do not know, call up your broker and ask them for the current value of your account.

Now add 5-8 together and that total is your “Liquid Assets“.

What that tells you is the total value of things you own that are easily sold and converted into cash if you need them.

Draw a line under this total and call it Total B

Next:

9. Cash
Count all the cash you have in your pockets, purse and piggy banks and write down the total.

10. Cash Equivalents
This is money in bank accounts, credit unions, money market accounts, the Post Office and so on. Write down all the money you have in all your accounts.

Now add 9-10 together and your total is your “Capital currently Available (uninvested)“.

What that tells you is the amount of money that you have in cash or an easily accessible account that you could use easily.

Draw a line under this total and call it Total C

11. Your principal residence
Write the current market value of your home.

12. Personal property
Write a list of the things you own such as jewellery, furnishings, cars etc and estimate what you would receive for them if you had to sell them today.

And finally for this part, add Total A + Total B + Total C, together with the answer from numbers 11 and 12 and that total is your “Total Assets“.

What this tells you is the value of everything you own if you had to sell it all today.

Draw a line under this value and call it Total X

But of course even if you sold everything you had today and had the money in your pocket, before you could go on a spending spree, you would have to pay anyone you owed money to first.

So let’s find out about the money you owe.

Your Liabilities (everything you owe)

In your notebook on another new page write “Liabilities” across the top and underneath list the following headings shown in Italics in the following order.

13. Accounts Payable
This refers to bills such as for electricity or telephone, which you have received but have not yet paid. List them and their value.

14. Business Loan.
Write down any monies that you may have been loaned to put into a business.

15. Credit card balances
List your credit cards and their balances.

16. Lines of Credit
This includes hire purchase or lease agreements such as for a car and shop credit like store cards. List them and how much you owe to each one.

17. Mortgage
Write the amount outstanding on your mortgage today.

Now add 13-17 together and your total is your “Current Liabilities”

What that tells you is the amount of money that you owe if you had to pay everything you owe today.

Draw a line under this total and call it Total Y

Next, one last calculation and you are done.

Your Net Worth

Take your total Assets (Total X) and subtract your total Liabilities (Total Y) to give you your “Net Worth“.

When you take your liabilities from your assets, this tells you the amount of money you are worth today. If you were to sell everything you own, pay all your debts and walk away with all you possess in your pockets, it would be this amount.

That’s all there is to it, so go back now to the start of this Net Worth exercise and strut your stuff.

Flex those financial muscles.

Focus on one item at a time. When you don’t know the answer, pick up the phone and ask the person who does. It’s your money and you have the right to clear explicit information, in a language you understand. Keep asking, until you get the answer you can use.

Don’t be put off by financial jargon. Take charge, it’s your business.

About Your Net Worth

Calculating your Net Worth is like taking a photograph. It stands still in time. And the powerful thing about knowing this is that you can see from photo to photo what has changed. A bit like playing spot the difference, you can see if something has been added or taken away from one photo to the next.

Of course you want to see things added in so you can see you are moving forward financially.

Net Worth is best calculated at least annually. However, in the beginning of learning about your finances and when you are making major decisions I recommend redoing it as often as every 6 months or even quarterly.

By the way, you might like to know that right now, sitting there with your Net Worth value in front of you, you are the proud owner of something that only 5% of the population have; the financially secure 5%.

And more importantly, you have struck a stake in the ground that marks the date and the spot where you committed to your financial future.

Go buy yourself some flowers and enjoy your accomplishment!

Actions of the Week

You’ve already done a lot in this module, but you go through the rest of your week this week and catch yourself thinking in financial moments, question your thinking.

• Where did you learn what you know about money and are the people that taught you financially happy?
• What did your mother teach you about money?
• What did your father teach you about money?
• What did you learn at school about money?
• Did anyone ever teach you how to manage your money?
• What patterns do you have around money that get you in trouble?
• What do you believe about yourself and money?

Every time you find yourself doing something with money, STOP! ….and ask yourself if you are doing it because you really think it is a good idea, or if it just something you have always done, or is it something you picked up unconsciously from your parents/school/friends.

See you in module three when we’ll be having some fun learning about spending money!

How to Have Money

This week, we are going to concentrate on the most primary aspect of financial management. It is so simple that it is often overlooked, but making this part of your decision making will have more impact on your future finances than any single other item ever.

It is spending less than you earn.

In financial terms it this known as having a “monthly net profit” at the end of every month. If you spend more than you earn it is known as a “monthly net loss”

You might think that this does not sound sexy or fun, but take it from me; this is where all the fun lives in our financial lives.

That dream home, the 3 day working week, the retirement in Spain or just not having to work every day to pay bills until the day you drop dead, are all hiding in the difference between what you earn and what you spend. And more than that, that course you want to take, the job change you’ve always wanted to make, that business you’ve always wanted to start all live there too.

You see your income has two functions:

• First, as you know, it has to pay for your current lifestyle.
• Second, it has to contribute to setting up your future.

If you use all your income to pay for now then you have none left over to put towards tomorrow. That is exactly what we are encouraged to do with our money. Even worse, a large percentage of the population uses all their income plus some they borrow from the future (credit cards, loans, etc) to pay for now.

It wouldn’t be so bad if we were all totally happy and fulfilled spending all our income now. But we’re not. It may be what everyone does, but it doesn’t work. I’m not suggesting you stop going out and save all your money for blue rinses.

I am suggesting that you take your monthly income and BEFORE you do anything else, you put 10% towards tomorrow. It’s easier than it sounds. How many times have you set up direct debits for something and then just paid them month after month forgetting that you even had them. This time, you would be paying yourself. What a bonus.

But before you can decide on whether or not you will put 10% towards tomorrow, you have to find out 10% of what. You need to know your income and your expenditure. Then you will know what 10% is.

Exercise: What is your income?

This exercise is designed to help you document how much money you take in each month. In financial terms this exercise is about establishing your “Income”.

What that means is that you will list all sources of income and how much they provide.

• The total you take in every month is your “monthly income”
• When you multiply that by 12 you get your “annual income”.

You probably won’t need any help with this part; it’s self-explanatory. I have however given you some headers as it is easy to forget some less obvious items or not realize they should form part of your list.

The entire exercise should take you less than 30 minutes. Round off numbers to the nearest £. Estimate on the low side. If you are not sure of a value, make a good guess. But in this area it is important to get a real figure as soon as you can get the information.

In your notebook on a new page write “Income” across the top and underneath list everything you currently have coming in every month. Here are some headings to jog your memory:

• Salary
• Business Income (net of expenses and taxes)
• Child benefit
• Royalties
• 2nd Job
• Dividends.

If your salary is irregular or commission based, take your total annual salary for the last year (less any exceptional income that you might not usually have) and divide it by 12.

You can print out the form below to help you complete this task.

Income Calculation

Excercise: What are Your Expenses

The second task is designed to help you identify how much your life is currently costing you. In financial terms this exercise is about establishing your “Expenses”.

What that means is that you will add up everything you spend in a month and list what you spend it on.

• The total you spend every month is your monthly “Expenses”
• When you multiply that by 12 you get your yearly expenses.

Now this time, really don’t panic.

Admitting to exactly what you spend is perceived as such a frightening thing. In reality, knowing what you spend and on what is one of the most comfortable pieces of information you can carry in your head. And remember your expenses are just one piece of a jigsaw of several pieces. Only when it is all put together can you see the picture clearly.

Again, I have given you easy to follow instructions on how to complete this first exercise. I recommend you take a moment and read all the way to the end to get an overview. The entire exercise should take you less than 2 hours in total during the next week although you may have to wait in between the beginning and the finish for some of your questions to be answered. Round off numbers to the nearest £. Estimate on the high side. If you are not sure of a cost, make a good guess.

In your notebook on a new page write “Expenses” across the top and underneath list everything you currently spend your money on. I have given you a list of items to jog your memory at the end but replace these with your own personal list. You know what you spend your money on. The more detail you put into this list, the more information you will have for clear decision making later on.

Do not spend much time searching out exact figures, estimate and move through this exercise quickly. As you actually spend during the month ahead you can compare back to your estimates and update them until you have a more accurate picture. There is often a difference between what we spend and what we think we spend. The areas of difference will highlight your “blind spots” in your spending…. If you have any.

The easiest way to get the complete picture is to begin with your regular bills or your direct debits. Take each of these, for example your mortgage, and fill in the amount you pay each month. Then fill in the smaller items, such as groceries, etc with an estimate for each area of expense in your household.

Some commonly asked questions

• What do I do with bills that I pay once yearly?
  You divide these evenly by 12 and put the value in each month. If you pay your car insurance once per year, you still drive it twelve months so the cost is actually a cost to you each month you use your car.
• What do I do with bills that I pay twice yearly or quarterly?
  You also calculate the monthly figure. If you pay twice yearly, multiply the figure by 2 and divide by 12. And so on.
• My electricity/telephone/gas invoices are two months in arrears. How do I calculate what is for one year.
  Take the payments you made over any twelve-month period, add them together and divide by 12.
• What do I do if my expenses are mixed business and household or if I run two homes?
  I strongly recommend that you fill in a separate sheet for each household or for your business. It is not so important at this stage it will give you clearer information for decision making further into the exercises. If you have more than one household or a business, take a separate page for each.
• Christmas is a big expense in my household. Do I put it all in December?
  Even though you spend the money in December, estimate the amount you spend on Christmas and divide it by 12 and add it into your monthly expense. The same goes for your summer holiday and other seasonal events. You still need to earn the money throughout the year to finance these.

That’s all there is to it, so go back now to the start of this Expenses exercise and put in your own list and numbers. Focus on one item at a time.

Expenditure Calculation

Actions of the Week

1. Calculate your monthly net profit/loss

Now you have your monthly Income figure and your monthly Expenses figure.

Subtract your Expenses from your Income.

• If the result is a positive figure; that is if your Income is higher than your Expenses, you have a “monthly Net Profit.”
• If the result is a negative figure, that is if your Income is lower than your Expenses, then you have a “monthly Net Loss.”

2. Feel good!

I want you to practice feeling good every time you part with your money this week. Whether it is writing cheques for your bills, paying for your groceries or buying yourself something.

Every time you hand over your hard earned cash this week, take a moment to think about the joy you have using the product you are buying. Whether it is the electricity that keeps your home warm or food that tastes wonderful, feel a moment of gratitude to those who produce it for you.

They are real people who are going to receive your money. Imagine if it was you.

How great would you feel if someone was buying your product and you were receiving the money?

3. Do nothing!

Whatever the results of this week’s work – do nothing yet.

Especially, please don’t worry if you have calculated a monthly net loss. By the end of the next module, you will have tools to give you a new perspective on how to approach a net loss situation. If you have a monthly net profit figure, the same tools will help you improve that even more.

Love What You Do

The key to longevity is loving what you do.

Imagine a diet where the first instruction was to make a list of all your favourite foods. And where the second instruction was that you must have a portion of all these items in your diet if you want to achieve your preferred weight.

Well, that is the approach we are going to take with your expenses. You are going to pick your own flavours, your own colours. You are going to build your financial profile around who you really are.

When we try to wear financial colours that do not suit us, we wake up the destructive emotions.

• Guilt: I should have done it, but I didn’t
• Fear : what will happen now that I didn’t…
• Shame: I’m so useless I couldn’t even…
• Resentment: it’s alright for him/her to…

These destructive emotions spoil our days, our health and our happiness.

A good plan, financial or otherwise, ought to inspire us and brighten our lives.

The key to making this happen is to make the plan suit our values. In financial terms, this means matching our expenses to the things that are important to us.

For example, take someone who loves to travel but spends a large chunk of her income on buying nice things for the house, maybe because the neighbours have nice things. The immediate gratification of looking at the new sofa and having the Jones over to sit on it will be very sweet. But the underlying dissatisfaction of not being able to afford the holiday she really wanted will continue to nag long after the buzz of the new sofa has diminished.

So, what is it that you really love?

Think of one item that you own that you really love

Pick something that really makes you feel warm and fuzzy inside when you think of it. We all have something that we really feel good about and having it makes us feel good about ourselves.

For one of my clients that thing is a plain black, corduroy lined, DKNY jacket. She wears it regularly and has done since she bought it 2 years ago. There is nothing special about it. It is not particularly trendy and you could not tell whether it was DKNY or BHS. But what it is, is absolutely perfect for her.

A jacket may sound a trivial thing – but lets take a look at what it means in her life.

• She values the environment and animals. The jacket is not made of anything that harms animals to produce and it is durable so she is not replacing it every year.
• It is more important to her to be comfortable than to be trendy or glitzy. The jacket is practical.
• She values her free time. The jacket is low maintenance, hard to dirty, easy to wash.
• She travels a lot but does not like to pack or carry lots of luggage. The jacket can be worn with several outfits, it can be smart or casual, and it is light enough for warm climates and warm enough in cold climates.
• She values value for money. She is aware that every purchase she makes has a time cost, that she has to work a certain amount of time to generate that money. Money wasted means time taken from her family and the other things she enjoys. The jacket was entirely within her price range.

It is no wonder that the jacket makes her feel good. Can you see how it matches perfectly with the things that are important to her?

Have you thought of an item that makes you feel good in lots of ways for lots of reasons? How would you like to have that feeling about everything you own and everything you do?

You can! What you need to do is to align how you spend your money with the things that are really important to you. And there is a simple way to do that.

Introducing the 4 Way Plan

In the “4-way” plan you divide your expense list into:

• “Must Haves (MH)”
  MH’s are those expense items without which your life would not function such as food.
• “Nice to Haves (NTH)”
  NTH’s are those items that you could do without if you had to such as pot pourri for example.
• “Investments (I)”
  I’s are those items that you pay from which you get some kind of return such as pensions.
• “Debt Repayments (DR)”
  Monies you pay to repay debt such as loan payments or car payments.

The key to MH’s

We all have to pay our electricity bills and feed ourselves. And for some of you, you must have a car to get to work so your car, car tax and insurance are vital.

Less obvious yet equally vital to us ladies, as we discussed in lesson one, are some of those items that would definitely not make a standard accounting “MH.” Risking the wrath of the little men in grey suits, it has to be said, that equally important as feeding our bodies is feeding our minds and our spirit.

You can give me 3 square meals a day every day but if I don’t have a good book on the go life’s not worth living. I jest, but only just. It is absolutely true that key to my health is a monthly massage. It releases stress, unblocks pains, prevents illness, re-energizes me and is vital time out in this busy working mothers life. For me, a monthly massage is a “MH”. For someone else that may be a frivolity, for another person just once a month would be draconian.

The point is, you know what is vital to you.

We will all have similar lists up to 90%. The other 10% will be individual and reflects who you are and what is important to you. What must you have in order to feel that you are living and not just existing?

Enough information. It’s time to do. Lets get into this week’s action list and place another stake on your road to financial freedom.

Actions of the Week

1. The 4 way exercise

Take your expenses list from last week and do this “4 way” exercise.

• First mark all your MH’s according to the notes in this lesson in one colour with a highlighter.
• Then mark all your I’s in a second colour.
• Next mark your DR’s.
• The remainder are your NTH’s.

2. Improve your net income figure

Take your NTH list and go through them one by one.

• Mark the items that you are paying for that no longer give you any pleasure or enough pleasure to make it worthwhile spending your hard earned cash on.
• Mark items that you feel guilty paying for, (such as a gym membership you never use). And ask yourself on each item ” Is this item (or a percentage of this item) worth more than my future financial security?”
• When you have examined how you feel about each NTH, make a list of the items you want to dump.
• Add up the amount of money you will save by doing this. Congratulations, you have just improved your “net income” by this amount EVERY month.

Be flexible playing around with your expenses.

It’s a bit like shopping; you go into a shop, try something on, it fits or it doesn’t, you keep it or you don’t and you move on. Keep it as light and easy as that.

If you dropped your weekly mag off your Nice to Have list but find you can’t live without it, move it to your Must Have list. If you thought you couldn’t live without your ciggies but find that actually you’d rather put the money towards that round the world trip, change the numbers and see what that does to your financial picture.

Remember – YOU are in charge.

That’s all for this week. Of course I can’t stop you finding new ways to try out the latest seasons colours. It’s all very contagious this having fun with money.

Next week will be a lot of fun. Not only will you come inspired with a whole new perspective on your financial future from doing this weeks exercise, you will also be introduced to the concept of maximizing your income.

Once you put the twin sisters of how to reduce your expenditure and how to maximize your income together, amazing new possibilities open up to you.

One Woman’s Story

To truly understand the impact of hourly value let me tell you the story of a lady I know who was married but considering divorcing her husband because she felt his real love was his work. He worked all hours possible and rarely was home in time for dinner. The children were always in bed when he got in and weekends he was so tired he slept or vegged out in front of the telly.

They had a beautiful house, nicely decorated and with all the mod cons. They drove really nice cars. The kids had everything they needed. The only thing missing was their father being around and she had had enough.

Over lunch one day, as she insisted in picking up the check, I asked her why she would put her marriage at risk over me when I wasn’t a particular friend.

She stared at me like I was speaking a foreign language.

I then asked her how long extra her husband would have to stay at work to pay for the lunch she had just given me. I went on to ask her how long he had to work to pay for the sheepskin coat she was wearing, the ski trip the kids had just taken and the new suite of furniture she had ordered.

It took another few minutes before the penny began to drop.

Everything she spent on herself, the children and the house translated directly into hours her husband needed to work which translated directly into her thinking he loved his work more than her.

I suggested she add another item to her “Can I afford it?” checklist. I suggested she add “would I rather have this item or would I rather have my husband at home for the hours it would take for him to work to pay for it?”

She is not divorced so far.

Hourly Value

You don’t really need some calculation to tell you if you feel that you are being paid what you are worth. You already know that in your gut. But you can look back at your list from last module. Did you end up with a net profit or loss?

If you had a net loss then you clearly believe you deserve more things in your life than your hourly rate allows you to afford. And look at your “must have” and “nice to have” lists. Can you afford your must haves? Can you afford your “nice to haves?”

Bear in mind when looking at these numbers, that I mean the real kind of “can I afford it” which is the “can I pay for this in cash today without using credit or taking money from my 10% personal financial future” kind of affording it.

There are two sides to the hourly value question.

One is a simple question of arithmetic.

• Are you earning enough per hour to pay for the life you want to lead?If the answer is no, there are a number of ways to maximize your income.
  • You can work for a promotion or a raise.
  • Perhaps you can get mentored or trained for another higher paid position.
  • You can offer to work overtime.
  • You can learn new skills and offer them for an increase in salary.
  • You can change your job for a higher paying job or start a business or second income stream part time.
  • If you are self-employed you can raise your hourly rate, work more hours or offer more services.

  These are just simple ways. There are lots of creative ways to increase your income specific to you.

The second is a more emotional question.

• Whether you are employed or self-employed, do you value yourself enough to ask for the hourly rate you are worth? Unfortunately, somewhere along the line in our cultural evolution, women were declared second class earners. And in order for this to happen, we had to be convinced that we were worth less in economic terms. And in order for that to happen, we had to be convinced that we were worth less… period.

Anyone who is particularly interested in the detail on the silent but horrific consequences of this reality on today’s women and tomorrow’s daughters can look at the work of Colette Dowling, author of the best-selling “The Cinderella Complex” and “The Myth of the Money Tree”

For our purposes suffice to ask the question

“What value do you put on yourself, manifesting as an hourly rate and is it right for your life?”

Actions of the Week

1. Calculate your hourly rate.

Take your monthly salary/income and divide it by the number of hours you work. Do not divide it by the number of hours you are supposed to work if you took all your lunch-breaks and went home on time every night. Divide it by the number of hours you actually work in an average month. If you have some, do not include income that you do not work for such as dividends or returns on other investments. This is called passive income. Calculate using only your active income; that is income that you would not have if you did not put in the work to generate it.

2. What are you really worth?

Take a new page in your notebook and write “My Worth” across the top. Explore how you feel about your hourly rate.

• How does it make you feel?
• Are you being paid your worth?
• Is it smaller or greater than you expected?

If it is less than you feel you are worth economically write in large red figures the figure you believe you should be paid per hour. And then write 20 reasons why you are worth that figure. Finally, write one paragraph describing your perfect work and how you would be paid for doing that perfect work.

3. Increase your income

Divide a clean page into three vertical columns and make three lists of ideas on how you can increase your income. The first list is for the short term (1-6 months), list two is for medium term (6mths – 3 years) and list three is for longer term (3+ years). Make sure to put actual figures with your ideas. It is important to set real numbers targets for your mind to focus on.

4. Money or Time?

Go back through your expense list and calculate the time value of the items on there. Ask yourself if you would rather have the item or the time. Write about what you learn about yourself and your ‘must haves’ with this new awareness.

5. Waste some time on a weekday.

Go and do something that you would never normally do because you don’t have the time.

I’m not talking about something constructive that you’ve been putting off or couldn’t find the time to do. I have a friend who lives in a chalet in the Swiss Alps overlooking one of the best views in the world. Sitting beside his music system he has a tape cassette entitled “Music to stare out of the window to.” It’s a wonderful way to spend a morning. That’s the kind of thing I am talking about. Take a train ride just for the ride and back. Sit in the park and just watch people going by.

Relax and allow yourself to feel the preciousness of time.

Let’s Talk about Debt

Now I want to talk about debt for a moment. It’s a huge subject and one that I am not going to go into in much depth in this part of Finance for Women. However, debt is so prevalent in our culture that I know a significant number of people doing this course will have a debt problem.

Mind you, the debt is rarely the real problem. It’s the repayment of the debt that is the problem!

Some of you will have come this far and will not have been able to find the targeted 10% monthly net profit figure because of what it costs you to service your debt.

If this is you, I strongly encourage you to take a look at another course on this site – Drop the Debt.

Some of you will have come this far, calculated your income and expenditure, revised it according to the 4 way exercise, done what you can to increase your income, found your 10% AND have debt. Equally for you. If you have any debt at all, you could eliminate your debt in double quick time and use the extra cash to put you on the fast track to the next stage of financial freedom.

It is virtually impossible to build wealth and service debt at the same time. So begin here now. Make a commitment to yourself that you will not add to your debt from today forward and at least do exercise number 2 to begin to deal with your current debt

WARNING

I want to stress that the action item regarding debt is a very basic process designed for limited debt.

If you have any significant level of debt or a level of debt that is causing you any worry I strongly recommend that you talk to someone directly. There are many, many things you can do to quickly and easily eliminate even substantial debt and still enjoy life while you are doing it. To find the best plan to eliminate worrying debt requires more guidance and detail to make informed choices than space allows for here.

Actions of the Week

1. Emergency Fund

Take a fresh page in your notebook and write Emergency Fund across the top. Calculate how much you want to put aside and a date by which you will achieve this.

To do this, you must ask yourself if you were to be out of work tomorrow and had to survive until you found a new source of income, how long would you like to give yourself to do that. A rule of thumb is 2-24 months depending on your own comfort level. Now multiply the number of months by your Must Have total from lesson 3. Put two big fat red lines under this figure. This is your first goal to achieve using your 10%. Divide the total by the amount that is your 10% and you will find out how many months it is going to take you to fill your emergency fund. Mark this date in your calendar

2. Drop the Debt

List each debt you have showing the total you owe, the amount you pay per month and the number of payments left to pay. Pick one of them that you would really like to have paid off. Call it debt number 1. Do not pick your mortgage, leave that one to last. What date is the last payment of the debt you have chosen?

Go back to your net monthly figure. I want you to find from your current income £75 – £100 per month that you will pay extra towards that debt every month until it is paid off.

Look at what happens if you add the extra money to your monthly payment for that debt.
How many of those increased payments will you have to make to that debt. Note the difference in the date?

When you have paid that debt off, you can put the £75 – £100 PLUS the monthly minimum you were paying to debt number 1 towards the next debt you want to pay off and so on until you are debt free.

3 Go Sparkle

If, as I suspect, you have been somewhat dulled of late by financial concerns or if just doing this course has taken up your free time and your energy for a while, you deserve a bright shiny treat.

Go for a glass of champagne at an uptown bistro, or something that makes you totally shimmer inside. Do it in broad daylight, and dress up for it, high heels, full make-up, hair coifed, the works. Invite a friend. Think Sex and the City breakfast. Think Thelma and Louise with diamonds. Talk clothes, sex, shopping and nothing more serious than broken nails.

4 Financial Education

Schedule financial time for yourself. Take out your personal diary and mark an hour per week during which you will continue to plan your finances, review your progress and add to your financial education. One client takes an hour every Monday morning and blocks the time in her diary under “Freedom.” For a subject that drives our lives like no other, an hour a week is such a small commitment for such huge rewards.

Well, that’s it. You are all done. Or are you only beginning?

Finance is being hailed as the new arena of female personal development. I am not surprised. It has long been overlooked. But now there is a “wealth” of resources out there if you want to continue your education in this subject in a way that is fun and gets results. This course has dipped your toe in the water, there’s much more wonderful information waiting for you to help you on your way at your own pace.

Enjoy your financial journey!