Money Insights, Wisdom, and More
BREAKING THE SPELL OF FINANCIAL INNOCENCE
For centuries women have lived with the mythology of “being rescued.” This mythology has been part of our genetic coding and imbedded in our psyches. As little girls we read stories about Cinderella, Sleeping Beauty and Snow White. We played out these fantasies with our Barbie and Ken dolls (I did. I even added in GI Joe to take care of my Barbie doll).
Generations of women fell under a spell. We believed that a prince on a white horse would take us away to a dreamy castle in the woods where we would live happily forever and ever (I love the movie “Pretty Woman!”). And, while we spent countless hours planning family vacations, baby showers, school activities and science projects for our children our prince would financially take care of us.
A recent TV commercial validates this point. Sarah Ferguson, Duchess of York was reading a bedtime story to a little girl. “Someday,” she says dreamily, “your knight will come on a great white stallion…and he will whisk you away to a beautiful castle and he will marry you and give you everything your heart desires, forever and ever.”
“Of course, if it doesn’t work out,” she adds briskly, “you’ll need to understand the difference between a P/E ratio and a dividend yield.”
Such was the case with Joan who is now 58 years of age. Her husband died unexpectedly 5 years ago. He told her for the past 15 years of his life, “don’t worry, we are doing well financially and everything is taken care of.” When he died, she found out they had over $100,000 in credit card debt and he let his life insurance lapse. Her tears were laced with anger at both him and herself for trusting that “everything would be taken care of.” Joan wasn’t normally a woman who lived with her head in the sand, except when it came to money.
In Carly Fiorina’s book, Tough Choices A Memoir, she speaks about her relationship with finances in her first marriage to her husband Todd. She tells us she paid no attention to finances, she left it all up to him. When their marriage broke up, she was shocked at the state of their finances. The blinders came off, the spell broken and Carly committed she would never again allow herself to be hands off when it came to finances.
We need to “break the spell,” of financial innocence before it is broken for us with a crisis (like death of a spouse, divorce, illness, etc). One way to “break the spell,” is to shift from financial vagueness to financial clarity in every area of your financial life (earning, savings, spending and giving).
The first time my husband and I looked at our finances straight on, I used an entire box of kleenex and left our financial counselor’s office with swollen eyes. I was angry at myself and my husband for the hole of debt we dug ourselves into. At that time I was living with blinders on in hopes that “magically,” things would just work out on their own. You know, “intuitive finance!”
Looking at our numbers grounded me in a deep way. That clarity coupled with our tenacity to overcome adversity turned our financial situation around. Did it take time? Yes, it did. Behavior changes and ways of thinking don’t change over-night. We began to learn that true financial intimacy is about transparency and the courage to look at what is. Over time, not only did the blinders come off, we showed up as equal partners in taking care of our finances! You can too!
Here are four ways you can begin “breaking the spell.”
- Bite into the apple of innocence. Obtain your credit report. Look at and understand your score. Make sure your credit report is accurate and make corrections as needed. Share your report with your partner and have him/her share their report with you.
- Take stock of your kingdom. Obtain reports of all your investment | savings accounts and know what the balances are in each account.
- Slay your debt dragons. Obtain current reports of any debts you owe. Understand the interest you are paying on these debts and the balance of each debt.
- Consult with your council of experts. Call your insurance broker | agent and have them review all of your policies with you on an annual basis. Ask questions. Make sure you understand your policies, your coverage and the cost of your premiums.
- Get as comfortable with your financial numbers as you are with your clothing sizes (numbers are numbers!) Know your checking account balance on a daily basis. Track your expenses and income and know where your money is going.