the Creative Money blog

How to be a Money Boss & expect more from your money

Posted on November 24, 2014 | By Mindy Crary

How to be a Money Boss & expect more from your money

I’ve been a financial planner and business owner for almost 16 years and traditional finance services annoys me.  Yes, there are good people there.  But for the most part, it’s sucky.  It’s about minimum investments and products and insurance and asset management and BLAH-BLAH-BLAH……

You start to feel like if you don’t meet someone’s minimum requirements, you can’t play.  Or if you don’t have 6 months’ of expenses, Suze Orman is going to kick you out of the conversation. (more…)

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Get out of survival mode and into a prosperity mindset

Posted on November 18, 2014 | By Mindy Crary

Get out of survival mode and into a prosperity mindset-blogpic

If you’ve ever experienced money struggles (and who hasn’t?), sometimes it’s hard to get out of survival mode and into a prosperity mindset.  I know that when I was going through a rough financial time, it was important to understand my personal dynamic before I could move forward in prosperity.

The difference between survival and security

When money is coming in regularly, it’s easier to feel confident that you’ll be provided for, and continue to secure, safe and supported.  When there are money struggles, some people tend to panic and lose those secure feelings and start to feel a sense of scarcity and fear and lack.  We might even feel like a victim, that this lack of money is being “done” to us somehow.

When we’re in that mind frame, we tend to make really bad decisions. Here are the most common decisions I have observed when people come from that place of survival:

False Faith (law of attraction) – People feel the need to “prove” they have faith in their future earning power by buying things, going into debt, etc.  LOA doesn’t want you to prove anything and LOA definitely doesn’t want you to go into debt without a realistic plan to get out of it.  The authentic practice of law of attraction means to make peace with your current reality before moving forward.  Love your current reality, regardless of how much or little money you have.

Magical Solutions – This is frequently an issue with business owners.  Sometimes survival mode can trigger the belief that this one THING (website, program, etc.) will solve all of their current problems and get them back on track.  Often, this magical solution costs more than they can currently afford.  I have found that very rarely do they need the full scope of what they think they need.   The real solutions is to separate tools you can implement incrementally from the Swiss army knife “ultimate problem solvers” (they don’t exist).

Avoidance – Because you don’t FEEL like you’re in control or the source of your abundance, you divorce yourself from taking responsibility for it.  You use your stories and circumstances as a shield, instead of dealing with what is right in front of you and accepting that what you need to do now is temporary.  Fundamentally, the solution to any avoidance is to question it:  What are you resisting by avoiding?  For me, it was the fear that I would NEVER dig myself out of my money struggles, so why look too closely.  Once I shone a light on my unspoken fear, I realized it was silly.

Belligerence – If you’ve been dealing with money struggles for awhile, sometimes you start to become worn down and defensive.  “Darn it, I am sick and tired of feeling like I never have enough, screw it!” and then you go and put yourself into debt for something frivolous.  You can’t cut out everything; you still need to experience pleasure, even if it’s on a budget.  When you start feeling belligerent, remind yourself that there is a reason for the lack of money…and what is the growth you’re receiving from this experience?

Giver Guilt – As nurturers, hard workers and people who make things happen, sometimes it’s difficult to believe that you can sit back and just RECEIVE abundance.  So we make it very hard for anyone or anything to give something to us, because we’re so ingrained in our role as GIVER.  This was a huge lesson for me:  Money coming in is the act of receiving.  Stop overfunctioning all of the time :o)

Attachment – Attachment is the idea that money has to come to us in a specific way or amount or time, or it isn’t “right.”  Our attachment to outcome (control freakishness) prevents us from letting things unfold—sometimes in a better way than we ever could have imagined.  Remind yourself to stay open to possibility.

Taking responsibility

Even when our money life isn’t going exactly how we want it to (and when does it ever?), you need to accept that in order to move out of survival and experience more prosperity, security and abundance, you need to take total responsibility for it.  This might mean accepting and owning that:

  • Even though we were raised in a crappy way, we’re powerful adults who can change our dynamics now that we’re aware of them
  • Even though we have made poor decisions in the past, we are resourceful and don’t need anyone or anything to solve problems
  • Even though life might never be struggle-free, we can feel solid and secure as we build ourselves a better foundation

Even though we might be stuck in survival mode right now, we are getting better and better at shifting that mindset and releasing our resistance to a new way of being.

Take action

Here are some steps you can take to shift out of survival mode:

Acknowledge your responsibility in the dynamic you took on from your family.  I had major stories that I adopted from my father about self employment, because he always wanted to be an entrepreneur, but pointed to my family (and blamed us as his burden) as the reason he couldn’t.  I took on the stories that:

  • Self employment was risky
  • Self employment meant no one supports you
  • Self employed people fail
  • Family is too much responsibility and burden
  • Family prevents you from following your dreams
  • Employment traps you
  • Kids prevent you from being self employed

I had to take MAJOR responsibility for releasing these early on in my career—and it doesn’t seem like any coincidence that I am self employed, does it?  My whole career has been about negating my family legacy and building my own new legacy.  You have to take ownership before it’s yours to release.

Take responsibility for your worry and energy levels.  What you think and feel is vitally important to changing to a prosperity mindset.  You can’t be happy and fearful at the same time…so focus on always shifting yourself to more good-feeling thoughts.  You can improve your energy by becoming present, so whenever I feel the worry start to take over, I remember to become present again.  For me, that might include:

  • Dancing
  • Playing with pets
  • Yoga or exercise
  • Guided meditation
  • Journal of appreciation

Work on Financial Foundation Clarity.  Your financial foundation includes Cash Flow, Cash Reserves and Debt.  You will have trouble building and expanding your foundation until you’re very clear on how your life interacts with these three areas (and until you feel secure).

Commit to 15-30 minutes per week reviewing these areas.  And treat yourself too…put on good music, get a really good cup of coffee and make the experience pleasant.

And whenever you take financial action (or buy something) that deviates from the norm, ask yourself:

  • Am I attached to an outcome?
  • What is the story behind this purchase?
  • What is my current emotional state?

Survival mode and money struggles are never fun, but if you commit to working toward a more conscious prosperity mindset, you can start to feel more stable and secure even during the middle of money issues.

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The Early Holiday Conscious Money Roundup

Posted on November 11, 2014 | By Mindy Crary

The Early Holiday Conscious Money Roundup

During this time of year, I actually go back and re-read an old set of blog holiday posts—almost like reviewing journal entries (if you keep one).  These are the posts that remind me to stay sane now that the holidays are coming!

It’s so easy to become completely unconscious during the holiday season…we eat too much, spend too much and experience WAY too much stress as the year closes out.  We all have this image of the “perfect” scenario, and do what we can to try and fulfill it.

Sometimes all of that expectation is too much.  It brings up old resentments and frustrations.  That’s why I am encouraging you to go easy on yourself this season.  Do less.  Take a moment to be still.  Make one less holiday treat, buy one fewer holiday gift and send one less holiday card.  Resolve to cross something off your list without completing it—and resolve to NOT feel guilty about it.

To help you get through, here are some of my most-visited blog posts that cover stuff like how NOT to kill your relatives; how to shift from making this season about money and more about experience; and how to know if your gift-giving is about more than just gift giving.

And I am doing it super early this year, because this might be stuff you want to think about before we get too far into the holiday haze.  Here they are:

If you would love to move to a less consumer-driven holiday season with your family, you might like Five Ways To Stop Giving Holiday Gifts which grew from questions that readers asked after I talked about my Anti-Gift Giving Holiday Season several years ago.

Does your family annoy you?  Mine totally does, and I talk about it here…Six Steps To Avoid Getting Your Buttons Pushed During The Holidays

This season always reminds me of the “old” me, who was massively codependent…so here’s me describing some of the ways that played out during holidays: Six Clues Your Gift Giving Is Codependent

If you DO need to buy stuff, you should check out this article on the 6 things to buy before Black Friday.

And if you’re going to get someone a gift, make sure it isn’t one of these!

Looking for gift ideas for your child’s teacher?  I love this post from Rants from Mommyland that cover what teachers really want and need, so that we can avoid the expensive, stupid and unnecessary when we’re trying to find that perfect appreciation gift.  I also liked these unique and interesting gift ideas here!

And yes, I avoid gift-giving for the most part, but I can’t help but want some of these interesting and creative items (I might have to get myself a waterproof notepad!)

Oh, and do you have a kid heading to college?  Register for an account with Upromise to earn cash that can get transferred to your 529 Plan.  And if you register with UGift, you can get other people to contribute to the 529 Plan, in lieu of too many overindulgent gifts (is my bias showing?) :o)

And even though I’m not a dude, I enjoyed this article on Ask Men that suggests ways to enjoy the holidays in moderation.

What’s your plan to enjoy the coming holiday season?  Tell me in the comments!

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Why you should never buy permanent life insurance

Posted on November 4, 2014 | By Mindy Crary

Why you should never buy permanent life insurance_blogpic

I used to sell life insurance.  And for the majority of people, I believe they have no business buying permanent life insurance.

Life insurance agents make claims, such as “permanent life insurance offers great returns,” or “it’s much safer than the stock market.”  However, my experience has been that permanent life insurance ends up being a money suck during a time when you need your excess cash flow the most.

Why you need life insurance

At its core, life insurance is about two things:

  1. Covering debts or goals that the surviving family would have a hard time saving for, without the deceased person’s income (like paying down a mortgage on one salary, or saving for college or retirement).
  2. Replacing the deceased person’s income to maintain the surviving family’s current lifestyle.

The reality is, if you’re single or part of a couple with no children, your financial commitments aren’t so complicated and it might be nice to have some insurance, but you can usually rearrange your life in case of suddenly losing a loved one.

The reason I usually recommend life insurance is, if you have a family of young children, it’s very hard to make life work without that other person.  In addition to maintaining lifestyle, you might need to actually hire someone to help with family logistics.  I recently worked with someone who lost her husband quite suddenly, and life insurance is helping her hire a nanny to help with her children until they reach school age.

Term Life Insurance

The word “premium” in life insurance speak simply means the amount you pay for your life insurance policy.  With Term life insurance, Premium = Cost of Insurance

This means that as long as you pay your premiums, you have insurance.  I usually recommend 20-or-30-year term insurance, so that you don’t need to worry about it for that many years (and this means you pay exactly the same premium for the insurance during that “term”).  At that point, kids have gone off to college and you’ve done a lot of saving on your own, so the idea is, you don’t need the life insurance anymore (or, at least not at the same level).

With term insurance, yes, if you need to re-up your term in 20-30 years, it will be much more expensive—because you’re older.  However, this is the same cost of insurance you would pay inside a permanent policy, so it doesn’t bother me (especially if I am trying to set you up to not need insurance after 20-30 years).

Permanent Life Insurance

With Permanent Insurance (and permanent can also be called whole life, universal life or variable universal life), Premium = Cost of Insurance + Savings Component

The idea is, at some point, you will have build up enough savings inside the permanent life insurance policy that you’re not paying for as much insurance as when you started.  So if you started out with a $500,000 policy, your savings over time will eventually reduce the amount of insurance you’re buying.

For example, let’s say in 10 years, you have $50,000 saved inside your policy and you originally bought a $500,000 life insurance policy.  Since you’ve saved $50,000, you are actually only buying $450,000 worth of insurance.  So Policy Benefit – Savings = Amount of Insurance Paid For.

This sounds like a great deal except…most people can’t max-fund their policies to the level that makes it a good deal.  You really need to have had exhausted all other avenues of savings and STILL have extra $5-$10,000 annually MINIMUM to make these policies work.

Here are what people perceive to be the positive things about permanent insurance:

You have the policy forever.  Regardless of when you die, your family will see the insurance pay out whether you pass away young or live to a ripe old age.  And, you’re paying for it forever.

Age. What if, for some reason, you decide you need more insurance when you get older? Eventually, you may find that you are uninsurable and therefore unable to renew a term policy because of health.

Potential savings. As you pay premiums, your policy’s cash value “savings” grows. According to Kiplinger, “It’s entirely possible that a $250,000 policy bought at age 35 could accumulate a cash surrender value of $100,000 by the time you reach age 65.” But it’s not magic…if you earn 7% and save ~$81 monthly for 30 years, you get $100,000, regardless of whether it’s in a life insurance policy or not.

However…the cash value is tax-sheltered, meaning neither the interest nor the earnings are taxable. The hope is, once you reach a certain level of cash value, the investment will be earning dividends sufficient to pay the policy’s premiums — if you chose to use them that way — making the policy self-sustaining.

A source of money. You can borrow against your cash value while leaving the policy in place. If you do so, you are not required to pay back the loan, although you will owe interest on it — and your beneficiaries will see the amount of interest and debt outstanding deducted from the death benefits.

The rich man’s Roth.  Permanent life insurance is sometimes referred to as the rich man’s Roth. That’s because once you reach a certain income level (over $191,000 for married couples and over $129,000 for individuals), you can no longer contribute to a Roth IRA, which means you lose out on the tax benefits. But these individuals can still put after-tax money into tax-sheltered whole life insurance.

Permanent life insurance is not a product that every person will benefit from, and only under very specific circumstances can even high earners expect to truly profit from it.

Life insurance conflicts of interest

There is a general consensus among financial gurus that permanent life insurance is evil. I don’t know if I would go that far, but once of my personal concerns is the conflict between appropriate product placement and agent compensation.  Commissions for permanent life insurance policies can start at 55% of the first year’s premium and can be as high as 100%.  That means that insurance agents can be very motivated to sell you a policy.

The other aspect of permanent life insurance that makes personal finance experts twitchy is that illustrations of potential cash value offered by agents are often unrealistic. Signing on the dotted line for a permanent life insurance policy that is supposed to make you rich in retirement — especially when you aren’t already — is a terrible idea. You’ll simply not see the return—and the access–you could get with other investments.  There are so many better ways to start simply, without getting locked into something.

What most people should do with their life insurance

Unless you’re a high earner—95% of the people I work with don’t fall into this category (and I work with multi-millionaires), it’s best to uncouple your life insurance needs from your investment needs.

This is why it’s so important to partner with a trusted financial planner who can help steer you to the products that will best serve your needs. Your family will be glad that you did.

What do YOU find frustrating or confusing about life insurance?  Tell me in the comments below!

P.S.  Speaking of insurance, did you see my recent post on how to get the most from your employee benefits?  Click here to check it out. 

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Are you making the most of your employee benefits?

Posted on October 28, 2014 | By Mindy Crary

Are you making the most of your employee benefits_blogpicI get it; figuring out your employee benefits is BORINGGGGGGGG.  But if you’re not maximizing your employee benefits, you might be missing out on valuable tax deductions or even free money!  Or maybe you’re missing out on opting into an employee benefit that can cover your ASSets in case of an emergency.  And November is open enrollment for most companies, so this is the perfect time to sit down and make sure you’re making the most of them.


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