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Step #6: Invest

When you reach this step, you’ll have no payments—except the house—and a fully-funded emergency fund. Now it’s time to get serious about building wealth!

One of my favorite financial advisors, Dave Ramsey, suggests “investing 15% of your household income into Roth IRAs and pre-tax retirement plans.” He cautions that you shouldn’t invest more than that because the extra money will help to complete the next two steps: college savings and paying off your home early.

There are many ways you can split up your fifteen percent. Take advantage of your company-sponsored Roth 401 (k) and any matching first. For example, if my employer matched $1.00 for the first 3%, I’d contribute 3%, which actually equates to 6% due to the match. Then I may put the remaining 9% in to a personal Roth IRA or traditional 401(k), or invest in my ESPP (Employee Stock Purchase Program) for diversification. (One thing I did to complete this step was to get some free advice from my banking institution.) Troll around on LinkedIn, too, to see if there are any financial planners in your area who wouldn’t mind answering a few of your money questions.

If you need to save for college, be sure to have a goal in mind. Determine how much per month you should be saving at 12% interest in order to have enough for college. Why 12%? Because if you save at 12% and inflation is at 4%, then you are moving ahead of inflation at a net of 8% per year.

Remember: Never save for college using:

• Insurance
• Savings bonds (only 5-6% growth)
• Zero-coupon bonds. (only 6-8% growth)
• Pre-paid college tuition (only 7% inflation rate)
The best way to save for college is with Education Savings Accounts (ESAs) and 529 plans—which I opened for my 10-year-old son. Hard to believe, but college is possible without loans!

TODAY’S BITE-SIZED TO-DO:

Take stock of your retirement savings options at work. If you have a limited array, look into opening up a Roth IRA on your own. Then connect with a financial advisor to walk you through next steps based on your long-term financial goals. If you need to save for college, calculate how much money you’ll need for your local state university. Then inquire at your local bank about opening up an ESA or 529 plan for your child/children. Re-evaluate your budget, because now your disposable income will be reduced by about 15-18% as you save for retirement and college.

Next time we’ll talk about tackling your last big debt: paying off your home early! Yes . . . it can be done. ☺

Feel free to review the first five posts in the series

Step 1: How I paid off $93,000 in less than 3 years

Step 2: Budgeting

Step 3: Save $1000

Step 4: Debt Snowball

Step 5: Emergency Fund
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My Journey Out of Debt Step #6: Invest for Retirement and Save for Kids’ College is a post from She Takes on the World

Andrea Baxter (second from left) appears on The Oprah Winfrey Show

Andrea Baxter: We are a boutique marketing firm in Vancouver, BC with a specialty in social media marketing, strategy, branding & strategic planning. We work with companies in all industries but focus on franchise organizations, start up to medium sized businesses. Our clients are throughout North America and have included 1-800-GOT-JUNK?, Vision Critical, Blu Living/Vancity Lofts, Blast Radius, Return Path, Smart Cookies and many more.

The name ‘Bratface’ is a common term used in Newfoundland, where I was born. Its used as a term of endearment towards anyone who drives you crazy, but you love them so much, you let them get away with…a lot! This sums up the relationship I had with my father as a young girl and the name just stuck! I also loved the cheekiness aspect to it; its creative, unique and has a story behind it which makes it more appealing.

NM: Smart Cookies is a women’s finance brand you co-founded and it has been very successful. What does it mean to be a Smart Cookie when it comes to your money?

AB: A Smart Cookies never deprives herself of the things she loves and wants out of life. Its about living within your (financial) means, knowing your #’s, empowerment and aligning your spending habits with your goals and vision. We all want to live the richest life, in every sense of the word.

NM: You achieved something that many business owners dream of: You appeared on The Oprah Winfrey Show! Can you tell us about how that happened and how the experience impacted your business.

AB: It was funny -when we first started the Smart Cookies we always said “when we are on Oprah….we will tell her how we accomplished so much”. It was a vision and goal of ours and we didn’t know we would get there! Because our initial concept was based off of Oprah’s Debt Diet series, that is what inspired us to write in. Katie, who is a publicist by profession, emailed into her show via the website when she was scouring the site for story ideas for the company we worked for at that time. She saw that they were looking for debt diet success stories, so she wrote in! She listed all our achievements and accomplishments over the past 6 months…..3 months later a producer called us.

Katie didn’t even tell us she wrote in, so you can imagine our surprise! After our appearance, the Smart Cookies exploded from a hobby to a business. Jean Chatzky who was on the show with us, was a huge advocate of money groups, so she invited us after the show to do a radio interview with her on Oprah’s Satellite XFM radio show. On air, she said that we have to write a book and that she would put us in touch with her literary agent. From there, it took off. We came back to Canada, shared our story, did a ton of press and then were offered to do a TV show. Since then, the business has grown into something much bigger than we ever imagined. We educate high school and university students on basic financial life skills, contribute to many TV segments and columns, and have amazing partnerships across the USA with companies like American Express and many more.

NM: What are the three biggest lessons you’ve learned as an entrepreneur that can help other women?

AB: To pace yourself more than anything! As an entrepreneur, you really become humble especially if you’ve left a good-paying job with lots of security. Its all about taking risks and you have to be okay with that. I’ve also learned to network like crazy, connect with other like-minded business people and always be open to opportunity. You never know where it may lead you to!

NM: What is a day like “in your heels?”

AB: I wish it was more exciting than people think it is! I still work out of my apartment, but am actively looking for office space. It really varies depending on my travel schedule, media bookings and client work load. That’s what I love about what I do -completely unpredictable but lots of hard work. I will find out on a Friday that I have to fly out for a media booking with Smart Cookies and other times, I have months where I don’t travel anywhere.

Be sure to visit Andrea at bratfacemarketing.com.

My Interview with One Smart Cookie, Andrea Baxter is a post from She Takes on the World

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Over the years, financial pundits have gone back and forth on how much money constitutes a fully-funded emergency fund. I’ve consistently read that anywhere between three to eight months is a good emergency fund stash. Logically, though, it would make sense to put away a rainy-day fund equivalent to the amount of time it will take you to secure a new job once you’ve lost your prior income. According to reCareered.com:

“On average, it’s taking about 6 months [to land] a new position, and 9-12 months for an executive role.”

So ask yourself, “Self, what would it take for me to live for at least six months if I lost my income?” How you answer that question determines how much you need to tuck away. As financial expert Dave Ramsey would advise,

 “Use this money for emergencies only: incidents that would have a major impact on you and your family. Keep these savings in a money market account. Remember, this stash of money is not an investment; it is insurance you’re paying to yourself, a buffer between you and life.”

TODAY’S BITE-SIZED TO-DO: Answer your “what if” question and determine how much money you need to put away in your emergency fund. Then open up a money market account and start stashing cash! (To give you some context, this step took me about 4 ½ months to complete.)

Next time we’ll talk about investments—your retirement and the kid’s college fund. You’ll be surprised to learn how much should go where and which should take precedence!

Feel free to review the first four posts in the series . . .

Step 1: How I paid off $93,000 in less than 3 years

Step 2: Budgeting

Step 3: Save $1000

Step 4: Debt Snowball

My Journey Out of Debt Step #5: Grow Your Emergency Fund is a post from She Takes on the World

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Before you begin tackling your debt snowball, there’s one thing you absolutely have to do: build up a little security blanket. Why? Because as soon as you start handling your finances with purpose, Murphy’s Law will take effect and you’ll find yourself needing to tap into your rainy day fund for one reason or another.

According to financial expert Dave Ramsey,

“An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen.  This beginning emergency fund will keep life’s little Murphies from turning into new debt while you work off the old debt. If a real emergency happens, you can handle it with your emergency fund. No more borrowing. It’s time to break the cycle of debt!”

In an economy where personal bankruptcies rose 9% in 2010 – reaching their highest level since a revamp of the bankruptcy law took effect in 2005—and 70% of American families are living paycheck to paycheck, we have to be extra intentional when it comes to living like no one else. But how do we accomplish this baby step? These are some of the steps I took:

1. Call your credit card providers and request a reduced interest rate.

I called my providers and went from an average of 22.12% APR to 9.98% in less than 5 minutes. This tactic saved me a few dollars on my monthly payments, which allowed me to throw more cash into my emergency fund. Something else that helped was cashing out all of my rewards tied to my credit cards; instead of saving the rewards for a megalomaniac vacation I had been planning since the dawn of man, I elected to receive the cash option, thereby scoring a $600 check and halfway funding my rainy day buffer. NOTE: Don’t close your credit card accounts until you’ve paid off the balance in full. If you do close them and there remains a revolving balance, there may be repercussions, i.e. a rise in your interest rate.

2. Take stock of your household bills and ask providers for discounts.

I ended up saving $40 on a bundle deal for my cable, TV, and phone because of a 6-month promotion. And a quick call into my mobile provider uncovered 10% savings on my monthly bill just because I’m a member of our state PTA. Score! I also frequent the same car mechanic and always ask for “the Courtney special”—it’s not much, but the manager typically gives me 5-10% off my regular oil changes just for asking!

3. Clip coupons.

Because of couponing, my last visit to the grocery store netted me a 74% savings over what my bill should have been! When I realized how much money I could save by paying attention to specials, seasonal promotions, and double and triple couponing, I started shopping with purpose. Now I faithfully buy the Sunday paper, print coupons from Coupons.com, and compare grocery circulars in my area so that I know I’m getting the best deal. You haven’t lived until you’ve scored a 35₵ coupon that triples to $1.05 and received money back from the store because the item was on sale for 99₵! (Yes, it really is the little things that count. J)

4. Sell everything that’s not in use or bolted to the floor!

Who says that spring cleaning has to begin in March? Get a jump start on the New Year—and on your debt-free plan—by making money on things that you no longer use. I put my dust-collecting treadmill on Craig’s List and sold it in 24 hours. I purged my son’s and my closet and sold our gently-used clothes to consignment shops and resale stores in my area, altogether netting about $214. I sold so much stuff, my son thought he was next!

5. Score part-time or contractual work.

You’d be amazed at what type of work you can do from home or after the kiddos have gone to sleep to help you earn extra money. As a marketing writer by nature, I used my skills to ghost write leadership books, edit manuscripts, write articles for a local magazine, and revise rèsumès and in doing so, been able to throw extra cash at my emergency fund. Don’t know where to get started? Try these sites:

1. http://www.craigslist.org/
2. www.snagajob.com
3. www.sologig.com
4. www.project4hire.com
5. www.allfreelance.com
6. www.guru.com
7. http://www4.jobirn.com/?q=find+jobs

6. Pay with cash and cut up those credit cards!

A recent study shows that when you swipe plastic, you end up spending 47% more than when forking over cold-hard cash. There is a deep psychological tie when you pay with greenbacks, so test yourself this week and pay for gas, food, and miscellaneous all with cash money. You can’t get out of a hole by digging out the bottom, so stop the bleeding and cut up those credit cards!

TODAY’S BITE-SIZED TO-DO:

Take 2 minutes to read “The Truth about Credit Card Debt.” Then gather your bills and start making phone calls one by one, asking if there are any current promotions or discounts for loyal customers.  Buy a Sunday paper and clip those coupons!  Clean out those closets and have a garage sale, or put items up on Craig’s List. Think about your hidden talents and how they can help you make money. Is it baby-sitting? A pastry chef for bridal showers? A seamstress? Do everything you can to save that initial $1000 because this step will help to catapult you to your end goal.

Next week we’ll take your laser light focus and gazelle intensity and start putting some muscle behind that debt snowball!

Oh, and in case you missed the first two installments . . .

Step 1: How I paid off $93,000 in less than 3 years

Step 2: Budgeting

SOMETHING FUN:

Take 60 seconds to see what your money future could look like by age 65. Based on your numbers today, your financial future just may surprise you. According to the path I’m on, I should have 12 times as much as the average American by age 65. (Makes me want to clip more coupons!)
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Journey Out of Debt Step 3: Save $1000 & Cut Up Your Credit Cards is a post from She Takes on the World

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I remember it like it was yesterday: September 7, 2007. This was the day I sat down at my kitchen table and came face-to-face with my finances. My divorce had been final a few years prior, but I still felt as if I hadn’t made any financial progress. Fifteen minutes later, my fear was confirmed. I sat in stunned silence—for the first time realizing that I had amassed six credit cards and was in $92,514.54 worth of debt. I had officially become a statistic.

But I’m not alone:
• The average American household carries $18,654 worth of debt (not including mortgage)
• 1 in 7 Americans carries 10 credit cards!
• The average household carries some $8,000 in credit card debt alone, and
• Even as we press the reset button on the economy, consumer credit increased almost 2% this past October

Fast forward 3 years . . . and I’m now debt free! I started with one goal in mind—financial freedom—and ended with a common-sensical approach, outlined by Dave Ramsey, that others can use to get out of their own financial ruts.

Here’s the plan:

• Step #1: (After awakening from my fainting spell) List out all debts from smallest to largest.

• Step #2: Cut up your credit cards. Then exhale.

• Step #3: Now close the accounts. Cushion the temptation to re-open your revolving credit accounts by putting away a small emergency fund for those inevitable rainy days.

• Step #4: Begin paying off your debts one by one. (HINT: Start with from the smallest balance not the largest interest rate. This will make sense later.) Pay off everything except the house.

• Step #5: Once consumer-debt free, revisit your emergency fund and take it from mini to maxi. Stockpile 3-9 months of living expenses.

• Step #6: Now with extra discretionary cash each month, invest 15% of your monthly income into a retirement fund. (We’ll discuss the right investment vehicles later.)

• Step #7: If you have kiddos, fund their college savings.

• Step #8: Take leftover income and throw it towards your mortgage payment. Pay off your home early.

• Step #9: Live in financial peace and give like no one else!

TODAY’S BITE-SIZED TO-DO:

Determine that you want to make a change. Then take inventory of all your consumer debt. Count it up—everything from your Victoria’s Secret store card to your car and student loans—and circle the number. Put that number somewhere in the open where you’re forced to see it every day. (Don’t worry . . . if you follow these steps, it won’t be there for long.) List your debts from smallest balance to largest balance. You should have two columns—one that lists the vendor name and the other that lists the balance.

Ex:

Every week for the next nine weeks, we’ll tackle another step and help you create your own journey to becoming debt free. I even took a few detours that helped to speed up the process and will share those along the way. Believe me . . . if I can get to the other side of the mountain, so can YOU!

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When it comes to paying off debt, most people focus on cutting out small items, like lattes.  But it’s the BIG WINS that matter most, according to author of The New York Times best-selling book and blog I Will Teach You To Be Rich, Ramit Sethi.  For example, he points out that when buying a house, the difference between someone with good credit vs. bad credit is over $100,000. How many lattes is that worth?

The trick to saving more is not willpower – but automation.  Automation is a key fundamental in money management that will actually increase your credit score.  Because with just one missed payment, your credit score can drop as much as 100 points.

Automation also lets you enjoy those small things you love, like lattes or designer jeans, while ensuring that your savings account automatically grows each month.

Ramit shares his 5 steps to creating an Automatic Money Flow to managing your finances:

1.List your accounts in one place.

To set up, compile a complete list of all your accounts, their URLs, the logins and passwords. Ramit recommends 1Password to store this information.

2.Link your accounts.

Log into each account and link you accounts together to set up automatic transfers from one account to another by using the “Link Accounts,” “Transfer,” or “Set Up Payments” options.  Connect your paycheck to your 401(k), so it’s automatically funded each month; your checking account to your savings account; your checking account to your investment account/Roth IRA; your credit card to any bills you’ve been paying by using your checking account.  Link bills that can’t be paid by credit card, like rent and loans, to your checking account and use the bill-pay feature.  Have all your credit card accounts paid from your checking account.  The links are free and electronic, but allow three to five days for the accounts to verify the links.

3.Organize and consolidate your billing dates.

You’ll want to reset your billings cycles to create a well-timed Automatic Money Flow. Gather all of your bills and call up the companies to switch your billing dates. Most of these will only take five minutes to do, but once it is done all of your bills will arrive at the same time, and you can now go into your accounts and set up your transfers.

4.Set up your automatic transfers.

Once your accounts are linked together, set up the core of your Automatic Money Flow: automatic transfers and payments.  Work with each individual account’s website to make sure your payment or transfer is set up for the amount you want and on the date you want.

5.Tweak the system.

You may need to adjust your Automatic Money Flow to match your payment schedule.  If you have irregular income, making your accounts automatic could be harder to do, as the amount in your accounts will fluctuate.  Decide what you need to live on, and add a savings goal of three months. Once you have saved up for three months, you may start investing your money into other accounts.

Now your money management is on autopilot. Not only are your bills paid automatically and on time, but you’re actually saving and investing money each month.  It works without your involvement and it’s flexible enough to add or remove account any time.  You’re accumulating money by default.

About The Author: Ramit Sethi

Ramit’s automation system has helped thousands of people automate and get on with their life so they can live a rich life by focusing on the things that matter.  

Ramit is regularly featured in The New York Times and The Wall Street Journal. He has been a regular guest on ABC and has appeared on The Today Show and NPR.

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Before seeking funding, there are several things that I advise my clients to do in order to determine if their business idea is viable.  These are important tips that should be used by all entrepreneurs – things lenders will look for when making a decision to approve funding or NOT!  Here are 4 extremely important steps that all new entrepreneurs need to take before seeking funding!

Prepare a Business Plan

A comprehensive business plan is imperative to your business success.  It is needed to not only organize your business but to get a small business loan. Your business plan should be written early in the planning process and is your road map for starting and operating your small business.  Because business plans can be daunting, you don’t have to do it alone.  Here are some resources available to assist you:

• SCORE offers online business tools to assist you in business planning.
• SBA offers online business tools to help you start grow and succeed.
• Business Plan Pro software is easy to use, affordable and loaded with hundreds of templates which guide you in writing your business plan.

Research and Know Your Competition

Understanding who your competitors are helps to project sales, avoid surprises, decrease reaction time as well as helps in understanding your own business (or proposed business) better.  After your research information has been compiled and evaluated, it is important to develop strategies for competing, thus, determining if your if your idea is viable.

When you look at your competitors, you are analyzing:

• Who are your major competitors?
• What share of the market do they have?
• How do you compare to your competitors and how will they react to your entry into the
  market?
• What are their strengths and weaknesses (e.g. quality, price, service, payment terms, location, reputation, etc.)?
• What factors could increase or reduce your competition?

Analyze Your Market

The success of your business depends on making sales. Marketing is a way of communicating with your target market so they (customers) will buy your products and services. It is a necessary element of business.  A constant marketing effort is required to establish, stabilize, and grow a successful business. Marketing & Sales practices include: describing your products and services clearly; continuously developing your understanding of your “marketplace”- who’s buying (customers), who’s selling (competition), what’s selling (products & services) at what price, how is the market changing; tracking the success of your marketing & sales strategy; improving your business’s ability to establish and maintain good prospect & customer relationships.

Put Personal Finances in Order

A prospective entrepreneur’s relationship with money and his/her ability to successfully manage personal finances and credit are directly connected to his/her success in the planning, decision-making, detailed oversight and big picture strategizing that are necessary to healthy business finance management.  It can take time for a new business to develop a cash flow, so, making sure your personal finances are in order before launching your new business, is essential. Here are four quick tips to organize your personal finances:

• Pay off your credit card debt.  Charge it!  We are so used to whipping out the credit card and buying ‘things’ that we don’t need or can’t afford.  Consider paying off your credit cards and consolidating balances to the credit card with the lowest APR. You will breathe a sigh of release once you realize you ‘CAN’ live without the dreaded plastic.  And, you can thank me later!
• Invest wisely.  Having an investment plan is the key to long term success.  There are a lot of options out there, so I suggest you speak with a financial advisor.
• Save for an emergency. With the economy being so weak, sometimes it takes every penny that comes in to make ends meet.  You must get out of that mind set and start saving on a regular basis.  Start small and increase as time goes on.
• Create a personal budget.  A personal budget is extremely important in managing your household.  In fact, your monthly budget will help you in determining how much you will save and invest!    An informative book that I’ve read and suggest is by author John L. Macko: Budget Yes! 21st Century Solutions for Taking Control of Your Money Now!’

By following these steps, you will position yourself for a successful funding request.

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Since the economic downturn, small business owners seeking funding for operation and growth are finding it increasingly difficult to secure financing from banks and commercial lending institutions.  As Project Director and Business Consultant for a non-profit organization and providing Technical Assistant to small businesses seeking funding through the SBA Community Express Loan program, several of the SBA lenders that I work with admitted being reluctant to lend but feel a little ease since SBA guarantees 80 percent of the loan programs.

What does this mean to small businesses?  When traditional bank financing is unavailable, small businesses need alternative business financing sources to start or stay in business!  To help, here are 7 alternative financing options for small businesses.

Option 1: Accounts Receivable Factoring

The selling of accounts receivables is known as factoring.  Lenders known as ‘factors,’ will purchase outstanding business invoices as collateral for funding.  It allows businesses to convert slow paying receivables into cash, by financing them through an invoice.  When you use this type of financing, there are two options.  A small business can finance its own outstanding receivables from a rate of 65% to 85% of the invoice’s face value or sell the invoices at 70% to 90% of the total value and in turn, the lender will collect the outstanding debt from the customers.

When I started my first business in 2000, I was awarded several lucrative government and corporate contracts.  After hiring staff to manage these contracts, I found that clients paid invoices from thirty to forty five days out.  Since I had to meet payroll, I used a factoring company to meet some of my obligations.

Resources:

• Factoring of Receivables Audit Technique Guide
• Factoring Process

Option 2:  Community Banks

Many small businesses tend to establish relationships with Community banks because of the personal and friendly service, local ownership and local credit decisions.  Of the nearly 8,000 community banks in the United States, most weren’t affected by the mortgage crisis, thus, are able to lend money to small businesses at competitive interest rates.

Resources:

• Independent Community Bankers of America
• American Bankers Association

Option 3:  SBA Community Express Loan

Micro loans range from $500 to $50,000, are typically offered by community banks and credit unions backed by Small Business Administration (SBA).  Most small businesses have a better chance to be financed when the loans are backed by third-party guarantors, such as SBA loan program.  As a technical assistance provider for this program, I’ve helped many clients who was denied loans from traditional banks but funded through the SBA Community Express Loan program.

Resources:

• SBA Community Express
• SBA Patriot Express

Option 4: Unsecured Lines of Credit

As a small business, an unsecured business line of credit is a great solution to supplement cash flow, business expansions or cover business expenditures.  The better your credit rating will determine your interest rate and repayment terms.  A line of credit means you have access to the funds whenever you need them!

Some commercial banks have become stricter with offering business lines of credit, even cancelling some companies with established histories, so you may have to shop around.  Community banks and credit unions may be a better option.  Always check with the bank that you have established a relationship with to negotiate better terms and rates.

Option 5:  Credit cards

Securing a small business credit card can be beneficial to your business.   This will allow your business to establish credit and can ease short term cash flow issues. The rewards offered by credit cards make them a viable option for funding.  Some offers include 0 interest rate introductory offer, low APR, balance transfer options and travel rewards.

Resources:

• Visa and MasterCard provide links to cooperating banks on their Web sites
• Check with your local banks or credit unions for competitive terms and offers

Option 6:  Angel investors:

Affluent individuals who provide capital for small businesses!  They typically are willing to accept risk and demand little or no control in return for the chance to own a piece of a business that may be valuable someday.  Funding estimates vary, but usually range from $150,000 to $1.5 million.

Resources:

• Small Business Notes
• ACE-Net (The Angel Capital Electronic Network)
• Investor’s Circle
• Tribe of Angels
• Alliance of Angels

Option 7:  Friends and family:

Though it can be a balancing act to mix money with friends and family, it is still can be a good source for borrowing money.  They are typically less stringent regarding your credit and have less rules and contractual obligations attached to the loan.  I suggest to clients to treat it as a ‘real’ loan by preparing a business plan and formal documents outlining the terms that you both have agreed upon.

In closing, to keep your doors open, small business owners must be vigilant in finding financial resources available to them as needed.  Since banks are lending less, finding alternative financing that will work for your business is essential for business survival!

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When Banks Won’t Lend: 7 Alternative Financing Options is a post from She Takes on the World

Manisha Thakor (left) with co-author, Sharon Kedar

Manisha Thakor is on a mission to teach women how to “own your finances and own your life.” Through her books, articles, television and radio appearances, speeches, and blog –this female personal finance expert inspires women to take charge of their money. Her latest book, co-authored with fellow Harvard MBA Sharon Kedar, is Get Financially Naked. Manisha made time in her busy schedule for an interview with She Takes on the World.

Natalie: Getting financially naked. What’s it all about?

Manisha: If the whole world got financially naked – there would be shrieks galore! In our modern, hyper-consumptive society, millions of people present external images to the world that bear limited resemblance to their true, inner financial reality. During my 15 years working in the financial services industry I met countless people earning not only six digit but even SEVEN digit incomes who were living paycheck-to-paycheck. It was this concept – that if we really bared it all financially to each other many things would change – that was the genesis of the book title.

In terms of the meat of the book, it boils down to this. If you want to have a healthy, intimate romantic relationship you need to communicate with your mate about money. Alas, that’s not the message society gives us. Money is a subject that in many respects is more taboo than sex. When you meet that someone special, people will ask if you are physically compatible, spiritually compatible, emotionally compatible, or intellectually compatible. But rarely does anyone ask if you and your honey are financially compatible. That’s too bad because study after study shows financial issues are often the ones that make or break a relationship over the long run. So the goal of this book is to give readers both a language and a roadmap to traverse the often rocky path that is getting to know your mate, financially speaking.

Natalie: Why is it so important for women to “talk money with their honey” as you put it. I’m sure you’ve heard stories from many, many women.

Manisha: First and foremost, we women face serious financial headwinds. In the U.S. for instance, women still earn a measly $0.77 to a man’s $1.00. Women spend more time out of the paid workforce than men (an average of 12 years) caring for children or aging parents, and then to put a sour cherry on the top… we live longer, requiring us to need an even larger nest egg than men to live out our golden years in peace. On top of this, we women are not encouraged -generally speaking -to actively self-educate about personal finance.

One thing I can’t emphasize enough is that this is an issue that cuts across age, ethnic, geographic, and educational lines – affecting all women. I’ve literally met women running multi-million dollar businesses who have handed over financial control to their husbands only to find out down the road that hubby made poor investments or squandered funds in other ways. I’m not trying to portray women as victims or men as financial assailants -my point is simply that a more ideal situation would arise from BOTH partners having shared responsibility and awareness for household finances.

Natalie: Like you, I grew up in a household where money was talked about and my parents taught me the basics of personal finance. How should parents introduce their kids to personal finance?

Manisha: First, let me caveat that I’m not a parent! However, I am fascinated by the debate in the parenting community as to whether or not allowances should be tied to chores. I heard one woman say she didn’t want her kids to have negative associations with money… like work… and that’s why she felt allowances should be given with no strings attached. My observation has been that the earlier in life a person associates money with work, the better their financial habits. After all, unless a gigantic inheritance rains down on your head, the way the vast majority of us get money is precisely through work!

Another tool parents can use is to make the spending of food or entertainment funds a family project. For instance tell your kids how much you have budgeted to spend at the grocery store and have them shop with you – put them in charge of adding items up on a calculator as you put them in the basket. To me, the key challenge for a parent is to teach their children that money is something that is earned in exchange for work. That simple but powerful link seems to have gone missing over the past few decades and resulted in a culture of unfettered expectations among so many young folks.

Natalie: What advice do you have for getting financially naked with your partner?

Manisha: The most important thing to know is that there is no “right way.” Your goal as a couple is to have a fun and joyful life while living within your means. To do this, you need to each understand how the other one defines “joyful.” For me it’s endless hours in coffee houses reading and thinking about life. For my incredible husband it’s riding his motorcycle off road with his friends. What makes each of our hearts sing is unique. What is universal, however, is the fact that if you spend more than you earn, if your life is financed by debt, if you don’t know where your important documents are stored or whether you have adequate insurance protection in the event something goes wrong… life can become very stressful.

Get Financially Naked presents a 3 step plan for couples:

1. Understand your, and your mates’, money histories – to know what each of your financial dreams and hot buttons are.
2. Take a financial compatibility quiz to assess where you each fall in relations to money on three dynamics – knowledge, interest, and behavior – to identify gaps in knowledge and/or possible points of friction.
3. After this “financial foreplay” get “down to business” by listing what you own, owe, earn, spend, and your credit scores. It’s not a one and done activity but rather something couples should do annually at a minimum. If you need extra help, I suggest hiring an hourly, fee-based financial planner (NAPFA.org and GarrettPlanningNetwork.com are two great resources to find one in your area) to help you through this final step.

Natalie: What is a day like “in your heels?”

Manisha: A typical day for me is full of blue jeans and tee shirts, lots of coffee, and tons of fun. After 15 years in financial services, I left the corporate world in the spring of 2009 to go out on my own in pursuit of my dream of becoming the “Rachel Maddow of personal finance for women.” When a person thinks “personal finance” and “global women’s economic empowerment,” I want them to think Manisha Thakor.

As a solopreneur, I think of each day’s tasks as falling into one of these three buckets: Content, Distribution, Monetization. Right now I’m most focused on the first two buckets, under the belief that if I can help working women not only learn how to manage their money but really get motivated and excited to own their finances and own their lives, the monetization piece will fall into place over time. It’s very important to me that for every dollar I earn, whoever paid me that dollar receives way more than a dollar in value from me. In 2010 my primary goal is identifying what working women want when it comes to personal finance – specifically what gap in knowledge or motivation can I fill to help them live their lives from a place of financial strength.  Looking forward, I’d love to write another book, one that is truly a breakthrough on the feminist financial front and ultimately to host my own weekly 30 minute TV show that informs and inspires women financially on a global basis.

Natalie: It sounds like you will be incredibly busy moving forward and I wish you all the best. Thanks for taking the time for an interview with She Takes on the World.

For more information about Manisha, please visit ManishaThakor.com. Connect with Manisha on twitter @ManishaThakor.

In Her Heels: Interview with Personal Finance Expert & Author, Manisha Thakor is a post from She Takes on the World

Natalie: Rosalyn, tell me about how you came up with Bitches on a Budget.

Rosalyn: Our new book, Bitches on a Budget, was conceived two years ago over a cup of coffee and a discussion about women, money, lifestyle and values. Not only were we lamenting the Paris Hilton’izing of American values—status symbols as markers of identity over substance–we also felt the underpinnings of the mortgage and financial markets were shaky. In short, we believed we were headed into bad times (if only we had sold our stocks then!).

Natalie: What financial advice do you have for all of us as we head into 2010?

Rosalyn: Our advice is the same every year. It’s simple common sense. Live within your means.

1. Make a budget: know your income, know your expenses.
2. Go over your spending with a fine tooth comb: Make sure you’re not over paying for services. If you don’t watch premium channels on cable eliminate the package. Do you need a landline and a cell phone? Check all your plans and policies and see if you’re getting the best prices.
3. No credit card debt. Period. Get out of the debt you’re in.
4. Plan to save.
5. Change your shopping and buying habits. Think libraries and consignment stores.
6. Find ways to enjoy yourself every day. Pleasure is free. Life is short.

Natalie: What can we expect to find in the book?

Rosalyn: Our philosophy? Life is short and should be lived with humor, joy and pleasure. Beautiful things should be admired and yes, even lusted after, but it’s time for all of us to break out of the ninetie’s and aught’s pattern of mindless consumption. It’s bad for our wallet, bad for the environment and bad for our psychic health!

So we set to work to write a book about living well, in good times and bad times. To give you a feel for the book we’d like to share a short section from the introduction:

Budget is Not a Dirty Word

Fiscal responsibility is like monogamy… if you think it’s boring, you’re doing it wrong. Since when has budget been a dirty word? After all, we’re not talking chastity belts, abstinence rings, knee-jerk denial. Think of budget as just another way to say edit. The key to good living is in using your limited resources wisely– we’ll show you how to hitch your mind to that little lust engine that’s driving you. The end result? You’ll make smarter shopping decisions. Bargain buys will replace designer labels as your new badge of honor. Besides, since you want to be a good green citizen of the world, it’s time to stop consuming everything in your path. Nothing is less attractive than a bloated bitch.

Be a Bitch, Bitch

Bitch isn’t a bad word, either. We’re proud to be modern women. Women who know what we want and aren’t afraid to get it; women with the sense to edit the good from the bad; women who choose to live with style and with conscience. Independent women who say what they think, are in touch with our femininity, and know how to enjoy our pleasures. Hell we make less than men do by the hour, work harder and produce more value (just think about it, can they have babies?). It’s time to stand proud, Bitch. “

Be sure to visit www.bitchesonabudget.com and don’t forget to enter this holiday giveaway by leaving a comment on this post before Saturday December 19th. A special thank you to author, Rosalyn Hoffman, and to Rachel Tarlow Gul at Over the River Public Relations for putting this giveaway together.

Bitches on a Budget: Sage Advice for Surviving Tough Times in Style is a post from She Takes on the World