• Left-brainers are logical and detail-oriented, facts rule their world, they like math and science, make lists, are great at pattern recognition and love order.
• Right-brainers like to see the “big picture”, are more perceptive, have great imaginations, are more impetuous and are willing to take more risks.

Have you ever considered how your dominant style may be influencing how you deal with your money?

If you’re a right-brainer with a big-picture perspective, doing the detail of daily tracking would be anathema to you. If you’re a left-brainer, being able to see beyond the minutia may be too much to ask. Fact is, if you want to be successful at managing your money, not only must you be able to create a vision for yourself, you have to be able to do the detail to make the vision a reality.

Let’s take figuring out a budget as an example. If you’re a left-brainer, working out a budget on paper make sense to you because you like to look at things sequentially and solve problems logically. If the budget doesn’t balance, you can see how going back and trimming expenses can bring things into line.

If you’re a right-brainer, making a budget the traditional way – balancing it on paper – may not work for you because right-brainers are highly experiential.   Instead, you may have to grab a pile of “play” money you can use to make the experience more real for you.

1. Find an amount of “money”, (be it computer-generated dollars or money raided from your child’s Game of Life or Monopoly box) in a mix of denominations, that matches what you earn every month. This is your “income.”
2. As you work through your budget, take the money out  of your “income” and set it aside with a note that says what category it’s going into. So if you’re planning to spend $400 a month on food, write $400 on your budget worksheet and take $400 out of your pile of “income”, label it ““food”  and set it aside.
3. Work through every category of your budget like this until the money runs out. If you have categories with no money, you’ll have to decide if you’re going to eliminate those categories from your budget or take money from the other piles to put something into those piles.

While the tendency of a right brain thinker may be to duck and hide because numbers that represent money make them freeze in terror, giving in to that tendency isn’t the grown-up thing to do. Figuring out how to make your right-brain happy is. And while dealing with taxes, retirement, debt repayment may feel overwhelming, not dealing leads to dire consequences.

Left-brainers don’t have it made just because they love detail and are better at controlling their feelings. With a tendency to sequential thinking, they need to get outside their comfort zones and imagine the future. After all, if you can’t imagine what your retirement might look like, how can you create a plan that will see you joyous at a time when you should be. No imagination leads to a pile of money (maybe) and absolutely no idea what to do next!

If you don’t buy the left-brain/right-brain “science” because you believe it to be more pop culture than well-researched theory, hey, you’re missing the point. Don’t argue with the metaphor. Think instead about how you like to process information and then use your strengths to get you to where you want to be next. Throwing your arms up and saying, “I just can’t do the detail,” is a cop-out. Sure, it may not be your first choice, but I don’t enjoy washing the kitchen floor either. I do it because if I don’t, it’s gross!

In the best of all worlds, you can find yourself someone who has strengths that compliment yours.  If you are a left-brainer and your mate is a right-brainer, try working together instead of fighting each other’s styles. And if you don’t have a mate with the opposite skill set, find yourself a friend, an advisor, or a Gail Club where you can bounce ideas and learn new strategies that’ll work for you.

Perhaps one of the most difficult of life’s passages to navigate is that of moving from being one of a couple to one alone. Whether through widowhood or divorce, thousands of people find themselves taking over the reigns of their lives each year, directing their own futures as the Suddenly Single.

One moment, things are as they should be. The next, everything has been thrown into chaos. And just at a time when we are least able to think straight, we must make dozens of decisions, consider myriad possibilities, uncover important facts, many of which are not at all intuitive.

Divorce and widowhood not only rip a person’s life apart emotionally they also often mean digging though a pile of financial stuff many are unfamiliar with. Even the savviest of us may not be completely aware of everything our spouses did when it came to the money. Inevitably there are surprises. Often there are tears. Sometimes we’re lucky enough to have great sighs of relief. Inevitably we must take control of our wallets and carry on. But how? It all seems so foreign. Or just so overwhelming.

Hey, relax. No one expects you to become a financial whiz overnight. But now that you are responsible for doing the detail, you’ve got to establish a routine for yourself. The idea is to get to a point where the day-to-day stuff takes place by habit, so you don’t constantly have to worry about it. Then you can turn your attention to the important issues that must be dealt with on a one-time basis.

You’ll want to establish some good habits to keep yourself on track. If you want to have money set aside for the future, for retirement, for your kids’ education, or just-in-case, the best way is to set up a auto-deduction to have the amount you specific — be it $25 or $200 — automatically taken from your account and invested in the alternatives you’ve chosen.

If you expect the money you’ve squirreled away to work as hard for you as you do for it, you have to learn more about investing. Keep it simple to start. As you learn more you can become more adventurous. Continue to rebalance your investments as your needs and circumstances change. Join an investment club. Read a few good books. Use the web to educate yourself.

With a reduced income stream, look for expenses that can be cut. If you think you may be faced with shortages in your cash flow, consider applying for overdraft protection as a way of avoiding NSF cheques. The last thing you need is to ruin your credit history. Few people actually enjoy tracking their spending or paying bills. It’s a little like cleaning the toilet and vacuuming. But if you want to keep yourself in the black, minimize your credit costs, and eliminate the midnight spectre of a bogeyman reminding you that you’ve bounced yet one more cheque, you’ve got to manage your cash flow. So it’s time to set time to manage your paperwork.

If you’ve been left holding the bag on debt, it’s time to get busy consolidating. Throw the credit cards behind the freezer so you can’t use them for a while. (You’ll have to clean that floor to use those cards, yuck!) Go to the bank and arrange a consolidation loan to minimize your interest costs and put you on a regular repayment plan.

If your partner had retirement assets, they can be transferred to you without tax consequence through your partner’s beneficiary designation, will or through a divorce settlement. You won’t have to pay any tax on the money, provided you roll the funds directly to your own retirement savings. You may also be entitled to a lump sum from the corporate pension plan, which can be transferred tax-free to an RRSP in your name.

Now that you’re on your own, if you want to protect yourself and your family, at least financially, from life’s tragedies you’ll need insurance: life, disability and, perhaps, health.

Book an appointment with your lawyer. It’s time to change your will, powers of attorney and any other documents in which your spouse was named. Remember to change the beneficiary designations on your own insurance, RRSPs, RRIFs, or anything else on which your partner was your beneficiary. And you’ll want to make a guardian designation to protect your minor children.

It’s not easy starting over. Doing the detail can be difficult when all you really want to do is hide from your sorrow. Let your friends and family help you. And don’t be too hard on yourself during this emotionally ripe time. Trust the people you know and accept all the help you’re offered. You’ve got to keep your perspective and your sense of humour if you want to survive. And you’ve got to keep track of the details. Focus on the future and you can make it anything you want it to be.

Very often people decide to go into debt without realizing that they’ve decided to go into debt. It begins simply enough. You go out for dinner and put the meal on your credit card. You also put the new suit, a pair of shoes, and the tickets to the game on your card. Then the car blows a tire, so you add the cost of the new tire. And while you’re waiting for the tire to be fixed, you stop in at the store, pick up a couple of cards you need for up-coming birthdays, along with some wrapping paper and a magazine to read while you wait.

Thirty days later the bill arrives and you open it. You’re a little surprised. You remember the tire, but you forgot about the cards, magazine and wrapping paper. Well, it’s only $27.36, no biggie. But when you go to pay off the card, you realize that you also had to pay the kids’ soccer fees this month, so your account is a little short. Well, you’ll just pay half the balance on the card and take care of the rest next month.

Short of cash one month, you decide to cover the difference with credit, and slowly but surely that credit balance grows. Now you’re carrying a couple of thousand dollars, so you decide to pay off the card using your line of credit on which the interest rate is much lower. Smart move. So you do the deed and stick a sparkling clean credit card back in your wallet.

The kids need new shoes for the summer, and the barbeque is a wreck. There’s a special on at the grocery store, so you put the new barbie on the credit card so you can afford to pay for the kids’ runners with cash. But when it comes time to pay the credit card bill, you realize that this is the month the house taxes come out. And next month the car insurance is due. That’s okay, it’ll just be a couple of months and you’ll be back on track.

When you look at the amount you now have to pay on the credit card and on the line of credit, you realize that you’re spending a couple hundred dollars every month to just stay even. If you try to pay more, you run short of money during the month and have to use your credit card to cover the difference. It’s your son’s birthday next month and you’ve promised the kids a trip to the amusement park with four friends as their “party.”  It seemed like such an easy way to have some fun without a mess!

Your husband comes home and tells you that he’s planning on going fishing with the boys for a weekend and you yell at him because you can’t figure out where you’re going to come up with the money for one of his damn weekends. He yells back. He busts his ass all week, and the one time he wants to take a weekend for himself, you’re all over him. So now you’re not only feeling discouraged by the drain the debt is on your finances, you’ve added emotional conflict to the mix.

Coming up with the minimum payment is getting tougher and tougher. Maybe if you put off fixing the crack in the driveway, that’ll buy you some time. Or you could call your sister and tell her that you really don’t think you’ll make it to the family reunion because your husband just has to work.

Or maybe you need to find a better job. You hate your new boss, but with the debt hanging over you, you’ve been afraid to make a move in case that ends up not working out. At least you know where you stand at work, even it it’s knee-deep in crap from your stinky-faced new boss.

Now that your debt repayment is eating up $450 a month in interest and service charges, you’re going to have to stop those automatic savings for both your retirement account and the kids’ educational savings plan. Once you get things straightened around, you’ll start them up again. Maybe. If you can ever get out of the mess and get back on an even keel.

And then the news: Your company has taken a big hit and you’re being asked to take a 15% cut in pay. It’s that or 35 of people are going to lose their jobs. And you’ll be in that 35 because your boss hates you. How will you cope? How will you keep things in check? How did you ever get into such a mess?

It’s really easy to get into debt. It takes no effort at all. And when you do, you narrow your options because the debt becomes not only a stressor, but a major consideration in everything else you do. Falling into debt is as easy as falling off a horse. Both hurt. And both can be avoided if you’re prepared to pick up the reins and take charge. If you’re one of those people to whom all sorts of unexpected things happen that “force” you into debt, maybe it’s time to stop and ask yourself “why?” What’s the lesson you’re NOT getting? And how can you change your behaviour to change your outcome.

Or you can just go on living in misery, falling off the horse. Ouch!

People are always telling me how hard it is to manage their money properly. Sometimes it’s because they’ve never had a money management lesson in their lives and have no clue where to even start. But more often, it’s because people really don’t want to take ownership of their own situations.

If you’re from the first school and just need a quick reminder of what’s involved in money management, it boils down to a few simple things:

• Know how much you make
• Keep track of how much you’re spending
• Save for the long term (and use your employer to save for you too)
• Save for emergencies so they don’t throw you off track
• Make sure your money is working as hard as you are
• Know where you are, and where you’re going
• Live within your means
• Accumulate the money you need to buy what you want before you go shopping
• Actively manage your money (automatic savings and bill payment make this easier)
• Only buy a home once you’ve saved your 20% downpayment
• Make sure you’ve mitigated your risks with the right kinds of insurance
• Have a plan for when you die, because you’re gonna.

That’s the easy part. The much harder part for most of the people I meet is the part where you come to the realization and acceptance that it is you, and only YOU, who will make the life you want. If you want to be debt free, YOU must do it. If you want to own your own home, YOU must do it. To take ownership you must look at what you’ve been doing wrong and decide to move in the right direction. You can’t rely on anyone else: not your momma, your hubby, the government or your advisor. You must be self-reliant. After all, it is YOUR MONEY.

Sometimes people are creative enough with their justification to rely on their future selves to dig ‘em out. That’s what you’re doing if you’re spending money on credit, singing the tune, “I’ll be able to pay this back when I’m making more money.” Dumb! Dumb! Dumb!

To make this really work for YOU, you have to find the processes that work best and are the easiest to use. All the idea I try to give you on this site are simply “ideas”… nothing is written in stone. Even your budget shouldn’t be written in stone since it needs to change as you and your needs change.

If you have a partner, consider a tag-team approach to facing up and setting straight. Maybe he’s great at planning for big purchases, while you do the day-to-day transactions. Or perhaps she’s better at researching things like insurance, investments or interest accounts while you head off to the trenches to make more money to pay down the debt.

Through it all, you must be intentional.  Each choice you make throughout your days, weeks, months, must be on purpose – not simply a spur-of-the-moment reaction. And it must be based on what YOU want. Without realizing it, we often make decisions based on what other people think. You dad thinks renting is a waste of money. Your sister thinks buying anything second-hand is gross. The media things that the markets are always going to be headed south.  None of this is pertient. It’s about what YOU think, and what YOU need and what YOU want to achieve.

Of course, to be intentional, you must know what it is you want to achieve. So, stop for just a moment and think about what it is you want. What is your intent?

Now write it down.

And, finally, tune out the noise around you and figure out how you’re going to get from where you are now to where you want to be.

Here’s an example of what I mean. Think of all the credit cards that have been thrown at you. There was the department store card that offered to give you 10% off if you signed up, the bank credit cards would let you fly for free in no time flat, the at-home calls that offered pre-approved access to more credit. If you were acting intentionally, you would have thought to yourself, “Self, does this fit in with my goal to be debt free.” See my point. If you signed up for every credit card thrown at you, you’d have more temptation than a good soul needs to stray.

Knowing what you should do – my earlier list – is about 20% of the job. Taking ownership and working intentionally towards your goals, that’s the other 80%.  

Essential Money Skill #6: Credit is NOT disposable income.

Yup, I know it flies in the face of everything everyone else has been saying, but credit is NOT disposable income. Student loans should not be used to go pub-crawling. Credit cards aren’t an “entertainment fund.”  And a line of credit is not an emergency fund.

Debt has become so pervasive that it seems like everyone’s in it. You may think this is “normal.”  So might your children. But it’s not normal for someone who is financially healthy. And if you bought into the lie that making your minimum payment is good enough, rest assured that your kids did too. After all, if you can have a fab new laptop that cost $1100 for a mere $34 a month, it seems like an easy choice.

If you haven’t already done so, go and read Student Debt Legacy, and make sure your college or university bound kid reads it too. 

TO DO:

Once your child is 12 or older, teach her about credit, how it works and the costs  involved. Give a young child a credit card on the Bank of Mom so she can learn how to use it.

Older teenagers can apply for a credit card with your co-signature. Make sure the limit is low … no more than $300. Have your child learn to use and repay the credit card, keeping track of purchases and making payments on time until the habit is established.

Here’s the best way to keep track of money.

• In a small notebook, write the current balance in your bank account at the top of the page.
• Each time you use your credit or debit card, write a cheque, or take a cash withdrawal, write down the amount spent and subtract it from the balance. Don’t forget to debit the automatic withdrawals that come out of your account every month for things like car insurance or loans.
• Every time you make a deposit, add it to your balance.
• You now have a real-time balance that shows how much money is available to spend. And you can’t spend money you’ve already used elsewhere (like on a cheque that hasn’t cleared, or on a credit card transaction that hasn’t come due).
• When your credit card bill comes in, check the transactions against the list in your notebook. If there’s something on your statement that’s not your doing, call the credit card company right away and identify the wayward transaction.

Tell your young’un about his credit score, what it is, how it works and how to make it suck! Ask him what he thinks would happen if he got a bad credit rating and a low credit score. Explain that with a low score, interest rates go up and the likelihood of getting a loan you really need goes down.

Essential Money Skill #7:  Keep Money in Perspective

This is one of the most important lessons you can teach. I was at a small party a while ago when a teacher-artist-mom started telling me that her son was at university. He is a wonderful artist, but has decided to not follow his true love because he wants to be able to make lots of money. She was a little sad. 

I have to be honest, I’m of two minds on this: first, I commend the young lad for being practical and recognizing that the life of a starving artist isn’t easy. Second, like his mom, I’m a little sad for him. If he has to give up what feeds his soul so he can have loads of stuff, I wonder just how happy that stuff will make him.

He’s young yet and with a business degree may find a way to make both work together. Here’s hoping.

Money, in and of itself, doesn’t mean anything. It’s what you do with the money. Money is a tool, a means to an end. If you don’t know the end you want to achieve, you’re likely spinning your wheels.

People exhaust themselves trying to maintain lifestyles they can’t afford. Whether it is the social pressure to conform or our a sense of entitlement, so many people are willing to put their futures at risk so they can make the right impression. They MUST drive the right car, watch a high-definition television, eat out three or four times a week, drink the best Bourbon, take the right vacation. And many people are willing to spend money they haven’t yet earned to maintain the illusion. Keeping Up With The Joneses is a dangerous game. It will not only sap your bank accounts, it will sap your life’s energy.

One way to help your child gain some perspective is to talk about what it is she really wants in life. I often talk to my Alex about how important it is to live a worthwhile life: A life that brings challenge and love, that allows you to share, to laugh, and to be happy. So, what makes your life worthwhile? And what are the things that your child thinks will make her life worthwhile? And what is she doing to put more of those things into life?

It can’t just be about money, or more money. According to Dr. Tim Kasser, associate psychology professor at Knox College, and Dr. Richard Ryan, psychology professor at the University of Rochester, people who rate making money as a primary goal score lower for mental health. They are at a greater risk of depression, are more anxious and suffer lower self-esteem, and have more relationship problems.  

TO DO:

Talk with your kids, using questions like these as a spring-board (not all at once… over time):

• What jobs would you NOT do for money?
• If someone offered you $50,000 to do something that might end up being a bad thing (you’re not sure right now), would you do it? Why or why not?
• If a cashier gave you the wrong change, what would you do?
• A friend asks you to lend her $500 for a couple of days. You have $500 in the bank to pay your rent next month. Would you lend her the money?
• Your boss didn’t pay you last week. He was short the cash and said he’d make it up this week. When you show up for work, he’s not there. Neither is your pay. What would you do?
• What would happen if money grew on trees?
• How much money is “enough”?
• What makes you happy?
• How can you work at something you love while taking care of yourself financially?
   

If there are areas you think your kids are a little wobbly on when it comes to either their money or their life skills, it’s not too late.  It’s never too late. I got some of my most important money lessons from my mom long after I left home. It was at her urging that I took out disability insurance while I was young and healthy and could afford the premiums.

In December my 15-year-old Alex got notice of the auto-renewal of her GIC. The interest rate the bank had renewed at was a pathetic 1.5%. I coached her on what to say when she went in to negotiate a better rate.

“I’d like you to cancel this GIC and credit the money to my savings account,” said Alex with all the confidence she could muster. “If you’re only going to give me 1.5%, I’ll move the money somewhere I can earn more.”

The CIBC rep was respectful and brought up her file. “If you want to go for a longer term, I can offer you a better rate.”

Alex looked at me with huge question marks in her eyes. I stayed quiet. The rep continued, “If you’ll lock in for two years, I can offer you 4.25%.” I nodded slightly and smiled.

“I’ll take it,” said Alex.

And thus begins a young customer’s self-advocacy and lifelong focus on making things happen the way she wants them to.  Small steps, coaching and practice build skills. The next time, it will be easier.

I’ve been married three times, and I haven’t had two husbands who’ve dealt with money the same way. It seems with every re-union, there are a whole new set of habits and preferences to learn about, and a ton of negotiating to do. It’s not a job for one sitting.

Yours, mine and ours: There’s no one right way to handle money in a re-marriage, but since you can’t escape responsibility for your partner’s decisions, you better talk about it. Some couples maintain separate savings and checking accounts, paying for their own personal and children’s expenses and sharing the costs of running the household. While they may still quibble over shopping habits, keeping some money separate leaves each partner free to indulge.

Who gets to decide: Couples have always struggled with how to save and spend their money. For the newly remarried this can be further complicated by their histories, particularly if spousal and child support are issues. To create a realistic picture of your financial state, keep tabs on where your money comes from and where it goes for about six months. Then you can make some decisions about how much each of you will contribute to the household, and how much discussion is appropriate (and who will prevail) when purchases are made.

Who we are with money: By the time we get to husband number two or three (or four), most of us have clearly defined money personalities that affect our decisions about education, housing, clothing, vacations, medical and dental services, investments, and gift giving. Financial responsibilities are also a big part of this discussion. While many a newly wed may know that her spouse has financial obligations to another family (a previous spouse, a mother, or Great Aunt Lucy), living with the reality is often very different from the intellectual acceptance of that responsibility.

Where credit is due: While each of us may have a different money management style, understanding which styles are no longer appropriate in a new family is critical. If you’ve always chased the blues with a shopping spree, you may have to take up kick-boxing. You’ll also have to get a grip on the impact of past decisions on your new family. One that’s often overlooked is the fact that divorce financial settlements are not binding on creditors. If you and your former spouse continue to have both of your names on a loan or account, you are at risk for each other’s financial behavior. That means the new family is also at risk. So take an inventory of your financial obligations.

Home safe home: Put more kids and more stuff under the same roof and you’ll probably want to take a look at your insurance. From home insurance to car insurance — adding teenage will be expensive so brace yourself — you need to do a full review. And if your divorce agreement assigns your former spouse as the irrevocable beneficiary on your life insurance to cover support responsibilities, it may be time to start shopping for new life insurance too.

Who gets what? You’re also going to have to deal with how your property will be distributed after death according to the law, the needs of your new family and prior agreements. Remarriage makes a will more important than ever. Biological or adopted children of first and remarriages are treated the same. While that may appear fair at first glance, when you consider the fact the first group is through college and the second set are only in elementary school, the picture changes. Most children expect money and property to follow a bloodline, not a wedding band. If you have a good relationship with your adult children, make time to talk over their concerns and expectations. And make sure you’ve clearly identified your position to your new spouse so there’s no misunderstanding about promises made.

Over time, the issues relative to merging your loves and your money will evolve. The issues you have to deal with initially will be very different than those that arise if you start having children together. Some of the things you should talk about may take some time to get to. And you may never be joined at the hip financially. But as long as you keep talking, keep sharing information and keep listening, you should be fine. 

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