“QA With Personal Finance Author Farnoosh Torabi - FOXBusiness” plus 1 more |
| QA With Personal Finance Author Farnoosh Torabi - FOXBusiness Posted: 16 Dec 2010 03:57 PM PST Is true wealth really only in your head? Can you banish debt and live prosperously just by changing your beliefs? Cue national personal finance authority Farnoosh Torabi. She's the author of the new book "Psych Yourself Rich" and contends that with an attitude adjustment, anyone can achieve success. CreditCards.com talked with Torabi (who would scrub down bathrooms for cash if she ever found herself broke) to find out how transforming ugly, entrenched money perceptions and making a few sacrifices can result in a more beautiful net worth. CreditCards.com: Everybody seems to want to be wealthy, but few really achieve it. Do you think the problem is that people are simply content to appear and feel rich through borrowing? Farnoosh Torabi: That may be part of it. We are the "lend and spend" nation, after all. Though, largely, I think the problem stems from not really understanding what wealth means and how, once you've achieved it, to secure it. The first chapter of "Psych Yourself Rich" addresses the notion of "rich" and our often misguided pursuit of wealth, thinking that rich is fancy cars, big homes, a huge salary or millions of dollars -- even if it's borrowed dollars. That's what I call the superficial definition of rich -- and it tends to be what our society focuses on and celebrates in the media. But if you accept and embrace wealth to mean financial security and all that goes with it (savings, insurance, goals, communication, etc.), then I think you may actually have a shot at achieving it and, more importantly, holding onto it. CreditCards.com: Speaking of your book, what are the three most important points you make -- what you really hope readers walk away with? Torabi: If I had to pick just three, I'd say: 1) accept that no one cares more about your money and your financial well-being than you; 2) the true definition of rich is financial security, not accumulation; and 3) having a healthy relationship with money means being in control, feeling secure and respecting your goals. Who cares what your neighbor's driving? CreditCards.com: Did you personally learn or gain anything during your research? Torabi: I learned how so much of our financial blueprint is drafted in adolescence, and how huge a role parents and teachers play in shaping our views on money and our relationship with money. It's turned me into an even bigger advocate for financial literacy in both school and home. CreditCards.com: Still, I don't know a single financial expert who doesn't have their own personal struggle with some aspect of money or credit management. Spill it: What are yours? Torabi: I don't have any debt -- besides my mortgage -- but when it comes to spending, I am not always as savvy as I could be. I can be an impulsive shopper. Once or twice a year (usually after a big payday or my birthday), I may shop on a whim without researching or comparison-shopping ... and to justify my purchases, I might buy a couple of things for my fiance, too, to help minimize my guilt. CreditCards.com: It's all about mindset, right? But that's the tough part -- adjusting the way you think about money. Where does the motivation to change come from? Torabi: The motivation has to come from within. No one is going to hold your hand and walk you through the necessary steps. I think if you can visualize your goals, tackle your fears and reflect on the achievements of others you respect, all of that can help you achieve motivation. When we understand what it is we truly seek in life, what is meaningful to us, how we can make change in spite of our fears and learn from how others have made a difference, we build the motivation to make our own behavioral changes. CreditCards.com: A November 2010 study revealed that about 8 million Americans have recently opted out of the credit cards world altogether. What do you make of that -- temporary blip or permanent shift? Torabi: It's difficult to forecast. Among those 8 million Americans, there are, without a doubt, some who have been forced out of the credit market. They've maxed out their cards, gone into default and can no longer qualify for more credit. For them, they had no choice. And I'm sure some will be back for seconds once they can qualify for new lines of credit. Others may have made a conscious effort to opt out, as you say, and have truly kissed the credit card world goodbye. I have a feeling those folks are more likely to stick to their actions. That said, this recession has had such a damaging impact on people's financial lives, and the changes people have made -- either willingly or not -- will last for a lot longer than "temporarily." The recession, although technically over, still haunts those of us who've lost our jobs, our homes and our savings. Because the pain has lasted so long, people won't easily forget their mistakes. CreditCards.com: Let's play pretend. Imagine you lost your income source, had no savings or insurance, and couldn't pay your bills. What would you do? How would you stay positive? Torabi: For me, to stay positive I need to stay in control and know that my life is moving forward. I need to feel like I'm making progress, even if I've just hit rock bottom. And let's face it, if you've hit rock bottom, there's nowhere to go but up. I would begin by dividing and conquering my time, working odd jobs (seriously, whatever it would take; I'm not beneath scrubbing toilets) and networking and volunteering to meet the people that may be able to connect me to better work. I might have to crash on a friend's couch for some time (and I would scrub her toilets in exchange, among other household chores). If I got really desperate, I would make a point to meet regularly with a credit counselor to help get my bills situated. Making money, building my networks, finding a place to crash and getting professional help ... these are the things that are within my power to accomplish in a hell-on-earth situation, and so I would address them first. CreditCards.com: Once you are on the path to a better financial life, how can you maintain the progress? Any tools, like good apps, software or books to recommend? Can social media help? Torabi: Help is important, and we're lucky that with the advent of technology and social networks, we can track spending, see where our money is going and connect with friends and family for advice -- instantly. I recommend using free online software to track your spending and budgeting such as Mint.com and Bundle.com. Apps such as BillMinder and CouponSherpa can also come in handy when you're on the go. BillMinder helps remind you of your bills. CouponSherpa comes in handy when you're shopping and want to find in-store coupons based on your location. It saves the hassle of coupon cutting. Social media -- being that it helps us stay connected and communicate with people -- is also a potential resource for getting ahead with your finances. SmartyPig.com is one bank that is incorporating social networks to help its savers communicate their savings goals on Facebook. That way, family members can get in the loop and might interest them in contributing to your savings goal, instead of buying you something random for your birthday, for example. More from CreditCards.com: This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| First Person: Personal Finance and 'The Unexpected' - Yahoo Finance Posted: 15 Dec 2010 09:03 AM PST *Note: This was written by a Yahoo! contributor. Sign up with the Yahoo! Contributor Network to start publishing your own finance articles. "In this business, by the time you realize you're in trouble, it's too late to save yourself. Unless you're running scared all the time, you're gone." -- Bill Gates I love that powerful quote. It imparts the urgent message about never taking anything for granted in the world of business. I also happen to believe the quote, albeit abrasive, suitably conveys how I feel about my personal and small business finances. Even when times are on the upswing and the checkbook is balanced and fat, I could be and have been one-step shy of an empty bank account. Here is where fear can play a critical role in protecting the financial aspect of your life or business. Do not take current stability for granted and prepare ahead for the unexpected. I became an expert on this after my business all but buckled in 2008. I also found out a couple days ago that in two weeks, my husband will undergo knee replacement surgery. This was totally unexpected for both of us. Economy Takes a Nosedive - Do You Have Money to Get By? When the New England economy began to spiral downward in the spring of 2008, I was in for a rude awakening. My outdoor play systems business all but ended. Word of a recession in the making slowly, but surely crept through Massachusetts, Maine and New Hampshire. These are the three states where my husband and I have sole distributorship rights to sell our product. We have had lean years, but not the bone-dry spell we had to push through in 2008 and half of 2009. Day by day, fewer customers came to shop. The phone in my office, generally ringing off the hook, quickly trickled down to a few rings a day. By July 4, 2008, there was no need for me to go to my office more than a few days a week. We had to cut our long-time workers down to a couple days a week. It was a frightening scenario to watch unfold. The bills were still coming due, but there were no new sales or service orders coming in. I thanked the powers that be that my husband is an amazing money manager. Making Ends Meet is No Easy Task My husband is frugal and always alert to the fact that at any time the business could take a hit. Luckily, we had enough money in our business account to keep the company bills paid. We also had just enough to pay our household expenditures until things picked up slightly in March of 2009. It was a very trying time. If not for my husband's never-ending caution about money, I have no doubt we would not have made it through. Be forewarned: As you can see from the state of the country even in 2010, the bottom can drop out at any moment. Pass on foolish extravagances and pad that nest egg now. Like me, you never know when just in case will be knocking at your door. Unexpected Surgery Dilemma After years of sports injuries, a car accident, and subsequent surgeries, my husband blew out his knee two weeks ago for the final time. Basically, he has been laid up for those two weeks. He has no option now. The time has come for him to undergo knee replacement. Normally, while winter puts our business on hold, my husband would continue to do service calls for our company. It doesn't make us rich, but it generates some winter income. There will be no service work for at least a couple months now. That means no income this winter. Funny thing: We were about to do some home improvements on our house just about the time my husband blew out his knee again. We never got to those projects. If we had, that would have been money spent that we cannot make up in any way this winter because of my husband's surgery and the rehab process to follow. In reality, we are paying someone money right now to do the work my husband would normally be doing. We are shelling out money instead of drawing it into the business. I cannot emphasis enough how important it is to be prepared financially for a rough economy or the possibility of a medical emergency. Possessing some healthy fear about personal or business finances will serve you well in the long run. More from this Contributor: Follow Yahoo! Finance on ; become a fan on Facebook. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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