Identify Your Spending Values

Baby Step #2

Many of us let money slip through our fingers without giving much thought to the big picture. We often buy the latest and greatest stuff simply because our neighbors do; so we can keep up with the infamous Jones family. Advertisers, the media, and society influence how we spend-- rather than our own internal and personal values.

Why is it important to take this Baby Step?

Identifying, prioritizing and living according to our personal values is key to our financial well-being. Once we've identified what truly makes us tick, our financial decisions will be guided in alignment with our values. If we live true to our values we are bound to feel fulfilled, content, peaceful and happy. Yes, I believe that under these circumstances money can indeed contribute to our happiness.

Instructions:

Identify your top 5 to 10 values. Then briefly define them in your own words and prioritize them in order of personal importance. For the purpose of this exercise let's use this definition of values: “beliefs in which you have an emotional investment; the degree of importance you give to something.”

Here are some examples of values to get you started:

Acceptance
Adventure
Balance
Beauty
Career
Charity
Community
Compassion
Competence
Creativity
Curiosity
Education
Environment
Family Relationships
Financial Security
Fitting in
Freedom
Friendship
Fun
Generosity
Happiness
Health
Integrity
Learning
Love
Prestige
Service
Spirituality
Sustainability
Wealth

Important Note: When defining your list of values, use words that serve as affirmations-- such as “I choose to...” rather than “I wish...”. The ways in which we choose to think directly influences our actual behavior; and in turn, our behavior powers our outcome.

To serve as an example of how to use affirmations with this exercise, Millionaire Mommy Next Door shares her own personal reactions to this Baby Step here.

To double check that you've prioritized your personal values accurately, you might want to consider your answer to this question: What would you do with your money if you were told that you had just a year left to live?

Finally, compare your prioritized list of values with your Baby Step #1 Treasure Map to Riches. Do they match up?

Once you've identified and prioritized your personal values, share them with your family. Understanding one another's values clears up a lot of confusion and conflict over how each chooses to spend their money and their time.

Your prioritized list will prove incredibly useful in an upcoming Baby Step: "Craft a Budget That Fits Your Family's Needs and Wants", so hang on to it!

Want to share your results with this Baby Step? Please share your prioritized list of affirmative values in the comments below.

Related and Recommended Reading:
If you're interested in reading an instruction book for living the life of your dreams, I highly recommend Wishcraft: How To Get What You Really Want by Barbara Sher.

Here's a classic containing terrific values and money content: Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence.

This book is new and sounds interesting. Has anyone read it yet? Money Can Buy Happiness: How to Spend to Get the Life You Want

Did you miss a step? Want to learn my recipe for success, happiness, and a million dollars? Start here: Baby Steps to Financial Freedom.

Baby Steps to Financial Freedom

(Note: If you're a returning visitor looking for the current list of Baby Steps, please check the right sidebar.)
Our family money tree has had time to mature and is now thriving and bearing fruit. It truly doesn't require huge chunks of my time, nor extraordinary brainpower, to maintain it. However, if your money tree hasn't yet been planted or is still a young sapling requiring plenty of care and support, I understand that you might be feeling completely overwhelmed.

Getting your financial life in order takes some time and effort. I can promise you that it's time well spent (until I am blue in the face and writhing on the ground) but let's be honest-- parents are busy creatures and are often stretched in many different directions.

Keeping this in mind, I'm developing a solution for time-starved and not-so-money-green-thumbed parents.

Do you remember how your child learned to walk? That's right-- your child learned to walk by taking one tiny baby step at a time. (Sing along with me, now... “put one foot in front of the other, and soon you'll be walking across the floor!”) Learning to walk required some hand-holding, a few painful stumbles, and encouragement. But before you knew it your baby was walking; then running, skipping and jumping. Soon there was no stopping her. Success was built on those first little baby steps.

I often tend to our money tree while our young daughter is napping, absorbed in a Sesame Street episode, or out for a “date” with her Daddy. I snatch time whenever I can. Therefore I'm designing each Baby Step to be completed in a reasonable amount of time-- a “napful” of time. Each Baby Step builds on the previous step, encouraging your money tree to establish deep roots, grow and prosper.

So let's get started on your step by step journey. Financial freedom here we come!

The current list of Baby Steps to Financial Freedom are located in the right sidebar.To receive notification every time I publish a new Baby Step to Financial Freedom, subscribe to my blog's feed by email or RSS feed (see right sidebar). Note: I will NEVER sell your email address and you can easily unsubscribe at any time.

Recommended Reading:

Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

Wishcraft: How to Get What You Really Want

Millionaire Women Next Door: The Many Journeys of Successful American Businesswomen

The Simple Living Guide

Create Your Treasure Map To Riches

Baby Step #1

“I want to make lots of money. I want to be rich.”

If this is the extent of your wealth wish, then congratulations, you're probably already rich enough.

If you have $2200, you're already rich in this world.

“...research indicates that assets of just $2,200 per adult place a household in the top half of the world's wealthiest. To be among the richest 10% of adults in the world, just $61,000 in assets is needed. If you have more than $500,000, you're part of the richest 1%, the United Nations study says.”

Is $2200, even $61,000, your idea of rich? If not, then be more specific.

Why is it important to take this Baby Step?

If you don't know where you are going there's an excellent chance you won't get there. You need to create a crystal clear vision of exactly what being rich is for you. Your personalized image of “rich” needs to feel so real to you that you can literally smell it, touch it, hear it, see it, taste it, FEEL it. You need to own it.

Visualizing what wealth means to you shapes the way your mind thinks about money and your life. Your mind then sets in motion the actions necessary to begin achieving your goals. By taking the time to establish what real wealth looks like to you, you direct your efforts in ways that will make becoming rich, in your own terms, simple.

Are you ready to embark on a fun and rewarding journey towards your own riches? Great! We'll start with an exercise that is really fun. In fact your entire family will enjoy this one. Allow about an hour.

Instructions:

How to create your Treasure Map to a Rich Life:

1. Round up a poster board, some old magazines, scissors, glue, and colored markers.

2. Flip through magazines and cut out images, photographs, illustrations, titles, and quotes that catch your eye. Select images that evoke your feelings of happiness, phrases that put a smile on your face, and words that intrigue you.

3. Glue your cut-outs onto your poster board to create a collage.

4. Use your colored markers to add any additional words, quotes, or statements that make you feel happy.

5. Place a title on your poster board- something like, “My Treasure Map” or “My Rich Life Is...”, or “Happiness is...”.

6. Now step back and take some time to look at your collage. Do you like what you see? Do you feel happy when you look at it? If not, simply paste new images over the parts that don't make you feel good.

7. Make a wild guesstimate. Write down how much money you think you'll need to live the happy and rich life that you've just created on your Treasure Map. Don't worry about being accurate, but do be specific. “I want to have lots of money” is not good enough. You need to quantify how much money is “lots” for you, and include when you want it to happen. Write down some specific numbers and dates. Try something like “I want to make $100,000 next year and I want to have $1,000,000 saved by 2020”.

8. Proudly hang your Treasure Map where you will see it every single day. Some good locations include your refrigerator door, your closet door, over your desk, or on the wall across from your toilet.

9. Finally, take a photograph of your Treasure Map. Place this photo in your wallet or checkbook.

After you've completed this Baby Step:

Consider your map a work in progress. As you look at it daily you're bound to change your mind about a few things and clarify some details. Just pull out your glue stick and modify your map accordingly.

Now that you can visualize exactly what it is that you really want, you've taken the biggest step towards living a rich life. Your personalized image of wealth and happiness will drive your daily actions in simple and incredible ways.

I created my first Treasure Map to a Rich Life in my early twenties. A few years later I was living the life I had visualized. Every few years my life experiences would modify some of my aspirations and passions. My vision of wealth and happiness would change so I'd create a new Treasure Map. Lo and behold, my life would soon morph to fit my new vision. And so it has repeated over and over again. Truly amazing.

I've posted my most recent personal Treasure Map and my reflections on how my life has transformed since then.

Next, I'll explore how identifying, prioritizing and living according to my personal values is key to my financial well-being in Identify Your Spending Values (Baby Step #2)

Recommended Reading:
If you're interested in reading an effective and practical instruction book for living the life of your dreams, I highly recommend Wishcraft: How To Get What You Really Want by Barbara Sher. I first read this book in my early 20's and it changed my life. Seriously.

I like questions, comments and feedback from my readers. Please share your Treasure Map results!

Your Attitude Is Your Choice

Michael is the kind of guy you love to hate. He is always in a good mood and always has something positive to say. When someone would ask him how he was doing, he would reply, "If I were any better, I would be twins!"
He was a natural motivator. If an employee was having a bad day, Michael was there telling the employee how to look on the positive side of the situation. Seeing this style really made me curious, so one day I went up to Michael and asked him, "I don't get it! You can't be a positive person all of the time. How do you do it?"
Michael replied, "Each morning I wake up and say to myself, Mike, you have two choices today. You can choose to be in a good mood or you can choose to be in a bad mood. I choose to be in a good mood. Each time something bad happens, I can choose to be a victim or I can choose to learn from it. I choose to learn from it. Every time someone comes to me complaining, I can choose to accept their complaining or I can point out the positive side of life. I choose the positive side of life."
"Yeah, right, it isn't that easy," I protested.
"Yes, it is," Michael said. "Life is all about choices. When you cut away all the junk, every situation is a choice. You choose how you react to situations. You choose how people will affect your mood. You choose to be in a good mood or bad mood. The bottom line is: It's your choice how you live life."
I reflected on what Michael said. Soon thereafter, I left the Tower Industry to start my own business. We lost touch, but I often thought about him when I made a choice about life instead of reacting to it.
Several years later, I heard that Michael was involved in a serious accident, falling some 60 feet from a communications tower. After 18 hours of surgery and weeks of intensive care, Michael was released from the hospital with rods placed in his back. I saw Michael about six months after the accident. When I asked him how he was, he replied, "If I were any better, I'd be twins. Wanna see my scars?" I declined to see his wounds, but did ask him what had gone through his mind as the accident took place.
"The first thing that went through my mind was the well being of my soon to be born daughter," Michael replied. "Then, as I lay on the ground, I remembered that I had two choices: I could choose to live or I could choose to die. I chose to live."
"Weren't you scared? Did you lose consciousness?" I asked.
Michael continued, "...the paramedics were great. They kept telling me I was going to be fine. But when they wheeled me into the ER and I saw the expressions on the faces of the doctors and nurses, I got really scared. In their eyes, I read 'he's a dead man.' I knew I needed to take action."
"What did you do?" I asked.
"Well, there was a big burly nurse shouting questions at me," said Michael. "She asked if I was allergic to anything. 'Yes,' I replied. The doctors and nurses stopped working as they waited for my reply. I took a deep breath and yelled, 'Gravity!' Over their laughter, I told them, 'I am choosing to live. Operate on me as if I am alive, not dead."
Michael lived, thanks to the skill of his doctors, but also because of his amazing attitude. I learned from him that every day we have the choice to live fully.
Attitude, after all, is everything.
~ Unknown Author

Poll: Who Are You?

If you've been reading my blog for awhile, you know that I'm tall, blue-eyed and analytical, that my three-year-old daughter is short, brown-eyed and adorable, and that I frugally share one car with my extremely tall, green-eyed husband. You've guessed that I like graphs and spreadsheets and pretty photographs; I love organic gourmet food, extended travel, writing blogicles, taking naps, and Kiva.org. You understand that I abhor bleeping alarm clocks. You know how much I spend on clothes (not much) and the details of my personal balance sheet. The fact that my family rents instead of owns drives some people nuts, and since I'm an opinionated sort of gal, I keep talking about it anyway. I've been a donut shop counter girl, a dog-poop-scooper, a dog trainer, a bookkeeper, a pajama-clad entrepreneur, a real estate investor, an equities investor, a Junior Achievement teacher, and a financially-free-retired-early and having fun writer. You've learned that my parents weren't perfect and that I'm not either. You know I believe that happiness is a choice.
Now it's your turn! I'd love to know more about you. If you're reading this post in your RSS feed reader or email, please click to my blog and respond to the four quick and easy polls I've created. Then, if you don't mind, introduce yourself further in the comments, or via private email - see right side column for my email link.
If you are a blogger, please feel free to share your link in the comments.
Do you see my smile? Do you feel my virtual handshake? It's so nice to meet you!
Note: To keep the polls as short as possible, I will assume (for instance) that if you don't check "I am female" that the opposite is true and you are a male...


Thank you!

I Am Woman

I was eight years old when my girlfriends and I strutted proudly around our living room singing into our hairbrush faux-microphones:

"Oh yes I am wise
But it's wisdom born of pain
Yes, I've paid the price
But look how much I gained
If I have to, I can do anything
I am strong (strong)
I am invincible (invincible)
I am woman"

In 1972, Helen Reddy co-wrote the song I Am Woman, which became a worldwide #1 hit, feminist anthem and cultural icon of the times. Here's a YouTube of the song:
(Note: RSS and email subscribers - you'll need to click to my blog to view it)

OK, I am woman. 35 years later, what does this song mean to me today? What impact has being a woman had on my life? What kind of woman do I strive to be?

"I am woman, hear me roar
In numbers too big to ignore"

When I have something important to say, I don't sit quietly with my hands folded demurely on my lap. I am not afraid to speak out or to advocate for those who can't. Sometimes I spread my message in a big way, like blogging or appearing on national television.
I used to think I had to roar. But do you know what happened? People covered their ears and tuned me out. So I learned to purr instead. Incessant, impossible to ignore purring when necessary - but I've learned to deliver my message in a pleasant way, so that others want to listen.

"And I know too much to go back an' pretend
'Cause I've heard it all before
And I've been down there on the floor
No one's ever gonna keep me down again"

I've been sad, squashed and small. I've been a victim and I've hit rock bottom. I grew up in a dysfunctional family, I had an abusive boyfriend, I've been poor and hungry.
As a newlywed, my in-laws chastised me for "wearing the pants" in our new marriage. They said my husband was the star and I should play the supporting role. They bought me a sewing machine, cookbooks and an iron. They tried to put me in my place.
I strive to reflect, learn and grow from each life experience. I keep an open mind. I choose not to stay stuck. I understand that the only person I can change is me.

"Oh yes, I am wise
But it's wisdom born of pain
Yes, I've paid the price
But look how much I gained
If I have to
I can do anything"

Because I reflect, learn and grow, I am wiser with each passing moment. I've learned from conflict and difficult experiences. I change what I can and peacefully accept what I cannot.
Because "I can do anything" (and despite the rough start with my chauvinistic in-laws), I've been happily married to the same man, my best friend, for over 21 years. We are not the same; we are equals and we compliment one another's strengths.
Because I've felt loneliness, I cherish my friends.
Because I've been penniless and hungry, I've learned how to make enough money and I savor nourishing food.
Because I missed spending quality time with my workaholic father when I was a child, I chose to be financially free before I became a parent.
Because I am wise and strong and a nurturing woman, I share my life and my unconditional love with our beautiful daughter -- who was abandoned at birth simply because she is a girl.

"I am strong (strong)"

Yes, I am unabashedly strong. And I embrace my feminine qualities: I am soft, gentle, loving, nurturing and beautiful. Strength and femininity are compatible. Strength doesn't need to be heavy-handed; in fact, gentle strength is far more effective. Purr.

"I am invincible (invincible)"

By definition, I refuse to be overcome or subdued. But I'm not Super Woman, either, nor do I strive to be.
Women today are expected to possess super-human powers: Get Jill and Johnny dressed while cooking a hot breakfast between loads of laundry while conducting an important business conference call before heading to the airport for an out-of-state conference. Don't forget to drop the dog off at the groomer's on the way. And wear lingerie under your business suit so you can enjoy sexy intimacy with your husband when you get home tonight - after helping the kids with their homework and putting them to bed, of course. Oops, did you forget to pick up the dog?
I recognize my limits. I can't do everything and I'm not skilled at every task. When I was a teenager, my siblings and I pitched in our allowance to pay for a house cleaner so we could have our weekends free to do as we wanted. Today, I do my own laundry and my husband does his. And despite my "way" with money, I have a bookkeeper that makes sure my bills are paid on time.

"I am woman

You can bend but never break me
'Cause it only serves to make me
More determined to achieve my final goal
And I come back even stronger
Not a novice any longer
'Cause you've deepened the conviction in my soul"

When I respect myself, others can't walk all over me. I believe in what I believe, because I believe in me.

"I am woman watch me grow
See me standing toe to toe
As I spread my lovin' arms across the land
But I'm still an embryo
With a long, long way to go"

I am not done. Every experience, every relationship, every thought is an opportunity for personal growth. And I am willing to share my journey with others. I won't allow you to step on my toes and I promise not to step on yours. I will look you straight in the eye, toe to toe, and share my truth with a warm smile. I am open, nurturing and loving. I love me, I love you, I love life.

"Until I make my brother understand"

Women and men are different in several obvious ways. But regardless of our gender-specific hormonal soup and X/Y chromosomes, I believe that we are more alike than we are different.
I am willing to open myself up to the world. I dream of universal acceptance, peace and understanding, beyond all stereotypes. I am your sister. Purr.

"Oh, I am woman
I am invincible
I am strong"

---
Note: This post is my response to Steve Pavlina’s How to Be a Man and his provocative invitation to write "How to Be a Woman".

Naked Blogging: How Much Is My Blog Earning?

For me, blogging provides a way to practice my writing skills, share an exchange of thoughts and ideas, and promote something near and dear to my heart -- financial literacy. Last September I came up with a brilliant idea - I decided to pledge my blogging profits to Kiva.org as interest-free microloans for small businesses operated by working, impoverished women in developing countries.
Kiva is a non-profit that allows you to lend as little as $25 to a specific low-income entrepreneur in the developing world. You choose who to lend to - whether a baker in Afghanistan, a goat herder in Uganda, a farmer in Peru, or a tailor in Iraq - and as they repay their loan, you get your money back. It’s a powerful and sustainable way to empower someone right now to lift themselves out of poverty. And when your loan is paid back, you can re-loan the same funds over (and over) again.
How has my blogging for Kiva pledge worked out so far?
My Kiva Activity:
Number of interest-free loans made = 12
Number of successful invitations = 2
Number of loans made by my invitees = 3
Number of gift certificates given = 2
All of these loans are being paid back by the recipients according to schedule. No defaults! One woman paid her loan in full, so I "recycled" my loan to someone new.
However, these loans were funded by me personally; not from blog profits. Despite a growing readership, my blogging project is showing a net loss thus far. Why?
Two reasons:

1. I've been slow to monetize my blog. Being a new blogger, I chose to focus on creating high quality content and growing a readership first.
2. I spent all of my blogging-related income in NY City when I was invited to appear on the Montel Williams Show. They paid for airfare, ground transportation and one night hotel stay for me and my travel companion, but I paid for my meals and the rest of the weekend. Manhattan is expensive. In the end I think it was worth it anyway, because appearing on their show provided an excellent opportunity for me to promote financial literacy for women.

Here's a full income and expense disclosure (through May 19, 2008):

Blogging-related Income:

$793	BlogHer Ad Network
$192	Amazon Affiliate
$28	Commission Junction
= $1,013	Total Income

Blogging-related Expenses:

$1,090	Travel (Montel Show paid airfare, ground transportation, 1 night hotel; I paid 2 nights, meals, incidentals)
$250	Writing conference, seminars
$98	Subscriptions, books
$6	Business cards
= $1,444	Total Expense

What now?
I've been told that with the amount of traffic my blog receives, it could be earning much more. Yesterday I placed several small banner ads on my web page. Hopefully they will generate some income without being too obnoxious.
How can YOU help me make a difference through Kiva?

1. Donate using my Paypal account (specify "Kiva" as the purpose).
2. If you find my blog helpful, useful or entertaining, add my blog to your blogroll or tell your readers and friends about it. This helps because the BlogHer Ad Network pays per 1000 page views.
3. If you're an Amazon shopper, use my store link to make your purchases and see my favorite books. (It won't cost you a penny extra to enter Amazon through my affiliate link.)
4. If you have an online store or service you'd like to promote, send me an email to inquire about advertising on my site. (Banner ads and no-follow text links only.)
5. Take a look at the banner ads displayed on my blog. If you're interested in one of the offerings, check it out. I've hand-select products and services that I personally find interesting. (Note: Due to my lack of firsthand experience with some of them, I don't necessarily endorse all of them. Please evaluate and use your own judgement.)
6. Register for your own Kiva account and make loans directly.
7. Share other blog monetization ideas with me (by email or comment).

Thank you!
Read More:
The Powerful (and Addictive) Nature of Giving
Join me in changing the world - one loan at a time.
My Kiva Lender Page

Click here to view some of my favorite books.

About Me, A Millionaire Mommy Next Door

Money was a constant source of tension and stress when I was growing up. My parents argued constantly about money. They were intelligent, well-educated and hard-working, yet they lived paycheck to paycheck. When I was 13, they divorced.
My mom struggled to raise three kids. We often survived on free lunch tickets and food stamps. I witnessed my mother approach retirement age riddled with anxiety over the fact that she hadn't saved for her golden years.
My father had always been (and continues to be) a workaholic. My siblings and I have always wished he'd work less and spend more time with us.
When we were 30, my husband and I decided we wanted to be parents. It was important to us that we didn't repeat our parent's mistakes. Since we had always wanted to parent through adoption, we didn't have to be concerned about my ticking biological clock-- we could wait for the right time.
Over the course of a couple years, I learned about personal finance and created a lifetime financial plan that would allow my husband and I to be free of our money worries by age 40. It worked.
We are now proud and happy stay-at-home parents to our wonderful, young daughter. Financially free, our family hasn't set an alarm clock in years. Whether it be work, parenting or play, we wake with the sun, eager to spend each new day doing whatever we choose.
We consider ourselves closet millionaires. Our family lives a typical middle-class lifestyle with one fantastic exception-- we only work when we want to. Financial freedom affords us free time. Contrary to popular belief, most millionaire households do not live the extravagant lifestyles that many assume. In fact, a millionaire or two may be living inconspicuously next door to you.
The authors of the bestseller, The Millionaire Next Door: The Surprising Secrets of America's Wealthy, found the top reason for why some people manage to accumulate wealth is that they live below their means. Many millionaires have found that living in a status neighborhood is not only a poor value, but it makes one feel the need to keep buying status objects to keep up with the Joneses.
Like most millionaires in their study, we live our lives and spend our money in ways that are in alignment with our values, interests and passions. We tend to be do-ers, not have-ers. For instance, we don't care much for “stuff” (a McMansion home, fancy cars, clothes or jewelry), but we spend generously on recreational pursuits, organic foods and long trips to faraway places. We make efforts to be environmentally green. By reducing our consumption, we save money in the process.
I want to share the story of our journey from minimum wage to financial freedom because I'm at a point where I'd like to give back. The financial industry is rarely focused on women – my intention is to offer a supportive community and a female perspective.
My blog isn't just about sharing my story. I've pledged my blog's profits (referral commissions from sales of my favorite books and advertisements) as no-interest microloans for small businesses operated by working, impoverished women in developing countries.
Read more about us and our story:
Everything You Want To Know About The Millionaire Mommy Next Door (FAQ)
Best of 2007 at Millionaire Mommy Next Door
Don't miss anything: Subscribe to receive free email or RSS notifications every time I publish something new.
Learn more about what millionaires tend to share in common:

• The Millionaire Next Door
• Millionaire Women Next Door: The Many Journeys of Successful American Businesswomen
• The Millionaire Mind