1. Does your sweetie always insist on picking up the check at a big dinner and/or throw down his or her credit card without even looking at the bill?

While this could be a sign of innate generosity – it could also be a red flag for someone who is trying to show off and is doing so by living beyond their means thanks to the “friendly” help of credit cards. My experience has been that financially fit individuals – no matter how much or how little money they have – take the time to review bills before paying for them. A cavalier attitude towards that dinner bill may be an indication of a cavalier attitude towards money in general.

2. Does your sweetie have a large but sparsely furnished apartment / home?

While it’s possible that your sweetie is just waiting for his or her “personal design sensibility” to present itself… more likely than not it’s a red financial flag that you’ve got a case of what’s called down in Texas “Big Hat, No Cattle.” A phrase made popular in the wonderful book THE MILLIONAIRE NEXT DOOR, it highlights a sad but true phenomenon. In today’s credit driven society, the guy with the big house or flashy car OR the gal with the four-digit handbag and the three-digit stilettos may well be presenting an exterior image that bears no resemblance to their true economic reality.

3. Does your sweetie avoid answering calls on his or her phone?

It’s possible it’s just mom checking in to see how the day is going… but then again, it’s also possible that it’s bill collectors calling to find out when your sweetie is going to make good on that car payment, mortgage, credit card or other outstanding debts.

4. Does your sweetie lease his or her car?

Think about it, what’s the sales pitch for leasing – it’s “hey you can get more car for less money than if you buy outright!” As one of my all time favorite financial gurus, Dave Ramsey says, it should be called “fleecing” not leasing.  In financial matters, when it sounds too good to be true, it usually is.

5. Does your sweetie ask you to co-sign or buy things in your name, and promising to pay you back? Baring a life or death emergency, why would a financially responsible person ever ask their significant other to do this? This may be the clearest sign of all that something smells fishy… and it’s not the dinner you had last nght!

Are there any other red flags that you would add to this list?

1. Why do you focus on women in both this book and your speaking/ coaching work? Do you think women need different advice or more advice?

Women just think differently about money than men. They make it more emotional than men. Over the past few years, woman after woman has come to me filled with anxiety and fear. Some of these women were in such high debt that they couldn’t sleep at night. I really wanted to share with them the ability to recreate their lives – I was there once, too. I was that same person, and I changed my life. Also, women need to look at their lives and examine why they feel they have a struggle around money – wanting it, making it, and having it. I’m here to tell them is ok, it’s good.

2. If a person could read only 1 chapter of your book, which should it be?

Chapter Six, “Claim Your Power.” This chapter talks about taking your power back around money, people, places and things. I believe it starts with a strong belief in yourself and owning your power. It’s about saying I’m not the victim any more. I’m going to live the life of my dreams. I love all the chapters in the book, but this one gives you the tools to identifying what’s draining you. It also teaches how to release the power that worry has over you.

3. As you’ve marketed this book & spoken to women about money what’s the most common personal finance question you’ve been getting over the past 6 months?

How to get out of debt. Across my coaching classes and seminars, 8 out of 10 women ask about how to get out of debt. Mostly it is credit card debt. Some of it is foreclosure related. And a lot of it is IOUs to everyone from the hairdresser t to the person who helped build their website. I tell them the first step to getting out of debt is that you have to stop taking on new debt. The biggest tool for that is understanding why you are taking on the debt in the first place. A lot of women deal with their emotions through shopping. The second thing I tell them, which is so big, is that you have to make peace with debt, you have to be grateful for what it brought into your life. Once you shift from anger to acceptance and gratitude, then you can move on. It’s just like with an ex – if you are still angry about the past, there is not space for someone new to come into your life.

4. Do you think the increased interest we’re seeing in savings right now will continue when the economy turns?

Women say they are all saving but they still have tons of debt, often that they are only paying the minimum on. We have to get through all this personal debt. Until we get over that debt we can’t really save.

5. If a woman is getting started learning about personal finance, after reading Live It, Love It, Earn It, what else do you recommend she do to self-educate?

Get a couple of friends that also want wealth and prosperity and create an abundance group. You can start with as few as 2-3 people. Go over the exercises in Live It, Love It, Earn It. Say what you are grateful for. State your 3 biggest financial desires. When you share those thoughts with another woman you open up to the universe. Say, “I want to make XX amount this year, I want to go on a vacation,” etc. Some women can’t even voice that. But it’s so powerful when you do.

6. As you’ve built out your business, what 2 or 3 habits have helped you the most in balancing it all?

A strong belief in myself – if you don’t believe in yourself, no one else will. It’s simple but true

Persistence - I’m very persistent, if someone says no I keep trying. If I fail I try again.Persistence is so key.

Action – You can never take too much action. Take as much as you can. Many women are afraid to ask for what they want and go for what they want. It’s nicer in society if we don’t ask for what we want. The most important thing in life is to ask for what you want.

7. You talk about flow in your book – how to you personally get in the state of flow?

Follow my passion, if you do something that you really enjoy doing and do it well you get in flow. When I was 13 years old I never played house, I played office. My flow is money, business, finance. It’s my passion. When I deal with my finances or hedge funds, I am in my flow, I’m connected, and I just love it. Once you follow your passion, creative things come out of that.

8. What advice do you have to women starting a business and looking for a mentor?

I tell anyone starting a business to find 1-3 people who have gone through it 10 to 15 years ahead of them, that have the time to give back, and to slowly befriend them and learn about their experiences. Let the relationship build gradually, and if you aren’t getting a response, move on.

9. You say “NO is a complete sentence” – why is that word so darn hard for so many of us women to use?

Women are very generous and giving. We are always saying yes to everyone. We want to help everyone. We’ll stay late to help the boss, to help anyone. We want to be of help and of service. It’s hard to say no because we don’t want to hurt anyone. 10. Five years from now, where do you see yourself professionally? And how can women keep track of what you are up to? I see myself writing a few more books – one on couples & money and one on mommies & money. I also see myself lecturing and helping women, and maybe creating a foundation to help mentor women. Right now I’m working with Dress for Success, a wonderful organization. They will be using Live It, Love It, Earn It in a financial education program they are launching in cities across 13 different states. My vision is to help women through more charitable and mentoring type programs. To keep track of what I’m doing, visit www.LiveItLoveItLearnIt.com, it’s updated regularly with my upcoming events.

(You can also follow Marianna on Twitter at @LiveLoveEarn)

(1) I missed a credit card payment

Contact your lender as soon as you realize you have missed a payment. Ask them to waive the late fee or any additional charges that may have been applied to your account. This works best if you have a good credit history, but it is still possible to negotiate. Tip: Before you call, figure out how much you can pay and when you can pay it. A spending worksheet can help you get a handle on your expenses.

(2) I can’t pay my credit card bill

Before debt collectors start calling, contact your lender.  You may be able to negotiate a reduced payment plan, and remember, making a small payment is better than making no payment at all. Tip: Consult this Debt Payoff Worksheet to develop a plan to move out of debt.

(3) I’m worried about my credit score

Restoring your financial health requires a committed strategy and a proactive approach to improving your credit score. First, review your credit reports and make sure everything looks correct. Second, begin to pay your bills on time every month. This is the best way to begin to rebuild your credit history. Tip: For more steps to building good credit, read Build a Strong Credit Report.

What other problems have you encountered with credit cards?

This is the first of two guest posts from the great folks at NEFE, a non-profit dedicated to improving the financial literacy of all Americans. NEFE operates the site Smart About Money and have developed a series of articles filled with tips to help you make 2010 the year of financial freedom.  You can also find Economic Survival Tips, worksheets and articles focused on financial education related to housing, spending, credit and job change. Join me in following NEFE on Twitter at @nefe_org.

1. Control spending: If you spend less you’ll have more money available to pay down debt and save for the future. Write down your expenses for a month to see where your money is going. You might be surprised by how easy it is to find places to scale back.
2. Create a debt repayment plan: If you carry credit card debt, write down everything you owe and make a plan to pay it off. Start with small items you can act on right away–it will make tackling the bigger debt easier. Also, try buying with cash only. It’s a sure-fire way to prevent increases in your credit card debt.
3. Set up auto-savings plans: Arrange with your bank or another financial institution to have a set amount deducted from your checking account to a savings account each pay period. Of the Americans who have been able to contribute to emergency savings funds, automatic withdrawal is the most popular method, according to the Consumer Federation of America.
4. Boost retirement savings: If your employer offers a 401(k) plan, increase your contributions. If you don’t have an employer plan, open an Individual Retirement Account (IRA) and arrange for contributions to be made automatically from your checking or savings account.
5. Create a long-term plan: Write a list of your long-term goals, such as buying a home or saving for college or retirement. Visit the Life Events section of Smart About Money for concrete tips on accomplishing those goals.
6. Protect yourself: Be prepared for the unexpected by making sure you, your family, your assets and investments are insured and fully covered. If you do not have a will, make 2010 the year you establish a life plan.
7. Find a financial buddy: Share your financial resolutions with a friend, colleague, or family member, and you’ll be more likely to keep them. Find someone else who wants to turn around their debt or cut their spending, and establish a mutual support system.


What other financial resolutions are you making for 2010? Post them in the comments section, I’d love to hear & cheer you on…

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In my book “FRUGILLIONAIRE,” I offer 500 tips on living a frugal, yet fabulous, life. Tip #485 is “Lower your expectations.”

It may seem odd advice in our “shoot for the stars,” “fake it ‘til you make it” society. But expectations are a powerful psychological influence over our spending; and they can, indeed, spell the difference between financial security and crushing debt.

Expectations play a particularly important role in the milestones we share with our significant other: like becoming engaged, getting married, and buying our first house. High expectations surrounding these events can be a recipe for frustration, debt, and divorce. Temper them, however, and you’ll experience the same amount of happiness–at significantly less expense.

Let’s start with the engagement. You’ve met Mr. Right, and you’re starry-eyed and love-struck. Any day now, he could drop to one knee and pop the question. The problem occurs when you have certain expectations of the rock he’ll put on your finger. Pressure to produce a 1-carat stone, or spend two months’ salary, may very well result in a fiancé with depleted savings–or worse yet, massive credit card debt. Not the best way to start off your financial relationship together! If, on the other hand, you remove the burden of expectation–by making it clear, for example, that the size of the diamond means little to you–you’ll be rewarded with a significantly richer partner.

Fast forward to the wedding. Your expectations for this day have been building since you were a little girl–they may involve a country club venue, elegant ice sculptures, and a guest list in the hundreds. But is it really worth being princess for a day, if it means taking on debt of royal proportions? Consider instead if all you expected was a simple ceremony with friends and family. You and your groom would instantly “save” tens of thousands of dollars, and start your lives on solid financial footing.

Finally, let’s consider the biggest financial transaction of your life: buying a house. Expectations here can make or break you financially. If you envision yourself throwing dinner parties in a 4000-square-foot McMansion, anything less may feel like a disappointment–leading you, perhaps, to take on risky loans and live paycheck-to-paycheck. But if you want nothing more than a roof over your head, you’d be equally delighted with a modest bungalow. In the latter case, you’d not only have a warm place to sleep; you’d sleep much easier, knowing you can comfortably make your payments, and put money in the bank.

There’s nothing wrong with dreaming big–just channel those lofty aspirations towards personal, civic, or spiritual development. When it comes to consumer-driven life events–particularly the major ones you share with your partner–lowering your expectations can put you on the path to marital, and financial, bliss.

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Note from Manisha:  Francine & I first connected when I read her WONDERFUL post, 10 Signs You Are Not As Rich As You Could Be.  Since then I’ve been following both her blog and her tweets & highly recommend you do as well!

• NBA Star Antoine Walker – Broke & In Big Trouble: During a successful career spanning 12 years, Antoine earned over $110 million. Now it’s gone. At age 33, Antoine has creditors chasing after him and is facing felony check fraud charges.  Much has been made of his bling (the cars, watches, entourage).  However, he was also by many accounts extremely generous with friends, family and those in need.  Antoine’s problem was that he spent as if his peak earnings years would repeat every year. He’s not alone. Many people with variable incomes (commission-based sales people, entrepreneurs, etc.) fall into this trap. What we all can learn is if you have a volatile income stream, you should spend based on your average, or even trough, earnings to avoid a cash crunch when leaner times appear.

• Bestselling Mystery Novelist Patricia Cornwell – Looking for $40 Million: This prolific, smart, and highly popular writer has suffered losses estimated in the range of $40 million.  She’s suing the money management firm that handled her money, arguing they didn’t heed her instructions to “invest conservatively” and even cut checks for gifts given to people she didn’t know. Patricia’s problem was that she handed over complete control of her finances to her advisors.  As it frequently takes single-minded devotion to one’s craft to excel, the need for some delegation is understandable.  What we all can learn is when it comes to your money, your motto (to quote President Regan) should be “Trust, but verify.”  Remember, no one will ever care about your money as much as you do. So you must stay involved, even if you have an advisor

• Uber-talented photographer Annie Leibovitz – Fighting to Keep Her Home: This American icon has taken some of the most famous photos… ever.  From John Lennon & Yoko Ono (hours before he was shot) to a very pregnant (and very bare) Demi Moore, that was Annie’s work.  In the go-go years Annie’s day rate was rumored to be $250,000. Today she is $24 million in debt and is a single mom of three young children fighting to keep her home. Annie’s problem was spending liberally and borrowing aggressively against the equity in her home to make up the difference. When the credit markets seized up, she found herself in a cash flow crunch, and resorted to putting up her homes and copyrights to her lifetime work up as collateral for a loan.  Now, that collateral may be called in. What we all can learn is that debt really is a four-letter word.  Borrow at your own risk and understand that there will be consequences if you can’t pay it back.

• Famed actor Nicholas Cage – Owes Over $6 Million in Back Taxes: This super talented actor owes the IRS.  Big time.  Uncle Sam wants over $6 million in back taxes from Nicholas Cage. The vast majority stems from the $12 million-ish in income he earned in 2007 that apparently he did not pay taxes on.  Nicholas’s problem is that he appears to be cash strapped when it comes to paying those takes. What we all can learn is that if you are self-employed, as so many more of us are these days, it’s vital to set aside money for taxes at the time you earn that income.

1. ARE YOU UNDER 21? This regulation will help you save yourself from yourself, by restricting your access to credit cards. Gone are the days of free tee-shirts and pizzas in exchange for signing up for a credit card on America’s college campuses. Credit card companies will no longer be able to issue credit cards to individuals under the age of 21 unless they either can provide proof that they can repay the money they are borrowing on that card or have a parent (or someone else over age 21) co-sign and agree to be responsible for that debt. Right now the average college student is graduating with over $3,000 of credit card debt so having this temptation removed is huge.

2. ARE YOU TRYING TO GET ESTABLISHED? This regulation restricts all interest rate hikes during the first year a card has been issued. Unless you have a card with a variable interest rate, card issuers can no longer raise your interest rate in the first year after a new account is opened. The only exceptions are if the card was opened with a clearly stated promotional rate for at least 6 months or if you go more than 60 days without making your minimum monthly payment.

3. ARE YOU JUGGLING EXISTING CARDS? This regulation puts in all kinds of speed bumps you’ll like. The interest rate on your existing debt can’t be raised unless, once again it’s a variable interest rate, the end of a promo period, or you are over 60 days late on your minimum payment (for any of these reasons you do not have to be notified). On top of this for future debt that you may accrue on fixed rate cards, issuers have to give you 45 days notice on any rate changes. Issuers can no longer charge over-the-limit fees unless you’ve specifically asked to have your account set up to allow transactions over your credit limit. Two-cycle billing is now banned. And if you boo-boo and are 60 days late on a payment, after 6 months of on time payments the card issuer has to restore your prior interest rate.

4. ARE YOU DIGGING YOURSELF OUT OF DEBT? This regulation requires the fair application of payments. In the old days, paying off your credit card debt was akin to eating a layer cake with your fingers while blindfolded. By that I mean you’d send in a payment – but it wasn’t always clear to you which layer of debt was being nibbled away at. More often than not, it was the lowest interest debt that got paid off first when you sent in that payment. Under the new rules it will be your highest interest debt that gets paid off first.

5. ARE YOU A GIFT CARD PACK RAT? This regulation will enable you to shop till you drop. It applies to both prepaid cards as well as retailer cards. The two biggest changes are that (1) You get a full five years from time of purchase (or whenever money was last put on the gift card) to use it – so no more surprise expirations and (2) As long as you’ve used the card once in the past 12 months, no “inactive” fees can be charged. (After 12 months of no activity you can be hit with 1 fee a month).

To keep learning more about personal finance, follow Manisha on Twitter at @ManishaThakor

One of the underlying tenants of Dr. Gurney’s work is that when you understand your money personality you are better positioned to make financial decisions that you can stick with through thick and thin – as opposed to having the kind of  “manic response” that kicked in for so many during the bear market.  By understanding your money personality, you can actually take the emotion out of dealing with your money. Here are excerpts from our fascinating chat:

How did you personally come to be interested in the subject “attitudes/feelings and the way in which people earn, spend, save and invest money?”

I worked for the Department of Defense as a Psychology Professor with the University of Southern California teaching at military bases throughout Europe. I saw first hand the way young people misuse their money as a result of earning a paycheck for the first time, being confronted with “deals” in the PX, and the financial and physical stress they endured as a result of lack of judicious decision-making. I was eager to explore the impact that our personalities make on how we use our money and to see if I could find any significant relationships and ways to then educate people to use that personal knowledge to make better use of money.  The rest is history and has been the focus of my life’s work.

What percent of Americans do you think understand their money personalities?

Probably around a third.

How can a person access your research to find out what their money personality is?

Take the Moneymax® Profile questionnaire online.  It’s a non-threatening questionnaire of 28 questions and you’ll receive a full report immediately including your scores on the personality traits, your money management style and a money action plan of tips to make the best use of your money personality. There’s a fee of $19.95 for this service and tool. You can also read my book, “Your Money Personality:  What It Is and How You Can Profit from It.”Many people find that they use both:  first they discover their profile and then they read the book to learn more about people like them to receive more insight and feedback. Ellen is a good example of the dramatic change that can occur.

How do Americans compare to other cultures with regards to their “financial psychological health?”

I have personal experience in having lived in several countries in Europe and particularly in France where I have lived part-time for fifteen years.  Money is certainly not the scorecard they use to measure their satisfaction in life, nor their well-being.  It is certainly respected in being able to provide for security and other personal needs but it is not used as a measure for judging personal value in friendships, partnerships, or life’s meaning.  Conspicuous consumption is not the norm as ads are delegated to the end of programming on television rather than every few minutes. Value is placed on a different currency than money as people and living life to the fullest are the keys to a rich life. Money is respected and not ignored but it is not the end goal nor given power over one’s sense of importance.

Why do you think Americans were such poor savers over the past 20 years?  What do you think needs to be done to encourage Americans to be better savers going forward?

Americans have been conditioned to believe that spending, consuming and having it all would be the key to happiness.  We were experiencing such optimistic and bountiful times that we became over-zealous in our desire to have it all and pay the price to have it when we wanted it.  This, of course, was a significant departure from the American norm of previous generations of savers and patient plodders. Unfortunately, Americans have now discovered that they’ve paid a very expensive price and have adopted new values of responsible saving. I just finished a tour with Capital One educating consumers about how they could develop healthy savings habits and take advantage of an exciting new offering by Capital One which eliminates will power decisions and automatically transfers $.50 for every debit purchase or online bill pay to a linked savings account and then matches it for the first three months and 5% thereafter for every eligible transfer up to $300 a year.  I am excited about this tool and believe that American consumers can kick start their savings habit and make it subconscious as it will be automatic and rewarding at the same time.

If you could give just three pieces of financial advice from your standpoint as an expert in financial psychology, what would they be?

1. Control your money instead of allowing it to control you.  People who are more involved with their money are also more confident and less emotional; therefore they make more suitable financial decisions.
2. Become aware of your attitudes and feelings about money and how they make an impact on the money you earn, spend, save and invest.
3. Take back your power to make the best use of your money so you use it for your well-being and values vs. trying to live another’s dreams and definition of success.

You can stay current with Dr. Gurney’s most recent work at both her website and blog.

• Don’t bite off more HOME than you can chew. How much house can you comfortably afford? For most people the answer is a house with a purchase price of no more than 3x their annual household income.  Rationale:  the cost of a home includes much more than the monthly mortgage payment. It’s also property tax, insurance, upkeep, etc.  Typically these costs run 2%-3% of the price of your home each year.  Assuming a 20% down payment, a 30-year fixed rate mortgage, and interests rates in the 5%-6% rate, the 3x your income rule of thumb will translate into total housing costs of roughly 30% of your gross income.

• Don’t let your CAR drive you to the poor house. The same logic applies to your car. Most people can comfortably afford a car that is 1/3rd of their annual income.  If you make $60,000 you can comfortably afford a car that costs $20,000.  If that seems low – now you know why so many Americans are in financial trouble.  They are driving it.  A car has many other costs than simply the monthly payment.  There’s insurance, gas, parking, maintenance, etc.  If you follow this rule of thumb,  your total transportation costs should be 10% or less of your gross income.

• Don’t let your KIDS kick you in the wallet. Kids are expensive.  From a purely clinical standpoint the Dept. of Agriculture estimates it will cost $220,000 to raise a child born in 2008 from diapers to age 18. And that figure is before you add in the cost of college!  Deciding to be a parent is a major financial obligation.  Don’t make it worse by over-indulging your love bundles.

• Don’t forget to ask “How high is too high for higher EDUCATION?” It used to be good debt was defined as mortgage and student loan debt… and bad debt was everything else.  Not any more.  We’ve now learned that too much of a good thing can indeed be bad.  Rough rule of thumb, don’t take on more in total education debt than you think you are going to earn on average annually during your first 10 years after graduating (from college or grad school).  In plain English, if you think you’ll make $50,000 a year, don’t take out more than $50,000 in loans. The logic behind this is that if it takes you more than 10 years of paying 10% of your income a year in student loan repayments, it’s going to be tough to meet your other financial obligations.

• Don’t underestimate the need to feed your RETIREMENT nest egg. How much will you need to retire? A simple rule of thumb is to multiply your current income by 25.  So if you make $50,000 a year and want to maintain that standard of living in retirement, you’ll need a nest egg of at least $1,250,000.  Understanding early on in your working life what “your number” is… will help you see just how important it is to plan for this major savings goal.

IN YOUR 20s: Your key challenge is to learn to live within your means. Steps to take include:  Avoid credit card debt like the plague. Make at least the minimum monthly payments on your students loans, on time, every month. Build a starter emergency fund of at least $2,000, and start contributing your employer 401k/403b.

IN YOUR 30s:  Your key challenge is to build a solid financial foundation. Save for a home down payment – but don’t bite off more house than you can chew. Build that emergency fund up to at least 3 and ideally 6 months of living expenses. If you have children make sure you have term life insurance equal to 10x to 15x your income and a Will naming a guardian.

IN YOUR 40s:  Your key challenge, as you enter into your peak earning years, is to avoid lifestyle creep. If you have not been saving at least 10% of your gross income in your 20s & 30s for your retirement, it’s time to kick it into high gear by committing to save at least 15%. If you have kids and want to help them pay for college, it’s time to open a 529 plan account (if you haven’t already). Resist the urge to splurge, these are your peak earning years… and they should also be your peak saving years.

IN YOUR 50s:  Your key challenge is to resist the temptation to make up for lost time by swinging for the financial fences. Check your asset allocation in your retirement plan – this is the time to start easing up on stocks. “100 minus your age” is good rule of thumb for the maximum percentage of your portfolio to have in stocks at this stage if you are a man. “110 minus your age” is a good rule of thumb if you are woman. Consider long-term care insurance. Make sure your Will & related documents (medical & durable power of attorney) are updated for any life changes since original creation.

IN YOUR 60s & 70s: Your key challenge is to not over-nibble on your nest egg. Think long and hard about spending more than 4% of your savings annually once you are in retirement. If you have not amassed your desired savings nest egg, it’s time to think about working longer or part-time. Talk to your children about your estate planning wishes.

IN YOUR 80s & beyond:  Enjoy, you’ve earned it! (and share that hard-won wisdom, it would be an honor to learn from you.)

Are there any additional tips you think should be added to this list?  If so, I’d love to hear…