Karen's Blog

What is the Difference between a Need and a Want?

I’ve always told my clients that using a spending plan will highlight the ways you are- and aren’t—taking care of yourself. It’s not just about the numbers—and it’s certainly not about “budgeting.” Having a plan not only helps you evaluate how many of your needs are really being met; it’s also an important tool for exploring what your needs really are. This is easier said than done, isn’t it? The National Council for Economic Education tells us that by the fourth grade, a child should be able to describe the difference between needs and wants, but the truth is that for many people—long after fourth grade—they aren’t able to make this important distinction. What they do instead is rationalize. In fact, most of us are masters when it comes to justifying our expenditures. For example, you might feel you “need...Continue Reading

Mikelann's Crystal Ball

Below is a post my colleague Mikelann Valterra wrote about her annual planning process. It's a fun post that shows you how even long-time money coaches like Mikelann definitely practice what they preach! And this is a great time of year to think about the big picture of 2011…. having a "crystal ball" really helps. "I’ve been looking forward to a certain Saturday morning in late December for a while. Why? Because I want to know if I can put new windows on my house this year. And I want to know if I can afford some extra landscaping help before my backyard turns into a wildlife preserve. (That’s just not my style.) Oh- and I want a lot more clothes this year. And maybe more of those three day weekends, where I actually leave the city. And I think I need more of this and I want more of that… So a couple of Saturdays ago, I finally...Continue Reading

The High Cost of “Impulse” Buys

My clients and the coaches I train know that I feel very strongly about tracking your spending. This is for many, many reasons. But I want to talk here about how tracking influences “impulse” spending. If you start tracking your spending, after a while you’ll probably be in for some surprises. I’ll bet you didn’t know how much those morning lattes were adding up to week after week. Tracking your expenses will help you identify the small expenditures that can add up to big money over the course of a year. Using the information you get from tracking, you can evaluate what effect those expenditures are having on your overall financial condition, and whether or not you could be using that money in more meaningful ways. I always had my clients create a list of their most common impulse buys. I would ask them to evaluate whether or ...Continue Reading

Why Not You? Why Not Now? The case of Louise

The late psychologist Abraham Maslow is said to have asked one of his classes: “Which one of you believe that you will achieve greatness?” The class stared back at him, no one answering. Maslow said quietly, “If not you, who then?” When it comes to taking charge of your money, and your life, why not you? And why not now? When I used to ask my clients why they’ve put off looking at their money, the most frequent answers I got were, “Well, I’m too old.” Or “I’m too young”. Or “I don’t know what to do and how to look at my money”. Or “I’m overwhelmed. I don’t know where to start. So I don’t do anything.” But statistics tell us that procrastination is the number one reason people fail financially. If you put off looking at your money because you’re scared or you don’t know what to do, or you don’t...Continue Reading