Your Path to true WELLth MONDAY 2019/True Wellth...3 Welcome to “Your Path to true WELLth” It is with great pleasure that I share with you this collection of short financial insights

1

Your Path to true WELLth

by Manisha Thakor, MBA, CFA, CFP® Founder, MoneyZenVP of Financial Education, Brighton Jones

Podcast

Your Path to True WELLth a whole new approach to money, meaning & purpose

by Manisha Thakor, MBA, CFA, CFP®Founder, MoneyZenVP of Financial Education, Brighton Jones

2

Table of Contents

[A] Welcome from Manisha (pg3)

[B] Twelve true WELLth Insights (pg 4-17)

[C] About Manisha + Stay Connected (pg 18)

What Are Your Financial Priorities?How Fit Are Your Finances?My Quest to Find Financial Peace of MindSet Boundaries to Have Real FreedomWhy Millennials Spend More Than They ShouldWorried About a Market Downturn? These 3 Yoga Principles Can HelpYou Have $10 Million and 10 Years to Live. What Would You Do?How to Make Your Retirement Dream a RealityTeach Our Children Well…About FinancesTalking Money With Your Honey: 5 Ways to Get Financially IntimateThe Marriage of Love & Money: How to Protect Yourself from Financial Heartbreak The Beauty of a Budget

1. 2. 3. 4. 5. 6. 7. 8. 9.

10. 11. 12.

Your

Pat

h to

true

WEL

Lth

3

Welcome to “Your Path to true WELLth”

It is with great pleasure that I share with you this collection of short financial insights that can help you increase your financial wellbeing.

Having worked in the financial services industry for over 25 years, I am struck again and again by how infrequently we speak to each other on a deep, heartfelt, mindful level about money.

Part of this is because social morays have long dictated that talking about money is “crass” or “poor manners.” Another reason for this lack of authentic conversation is that very few of us ever received any kind of formal personal finance training. In fact, hey don’t even teach it at Harvard Business School! While earning my MBA there, I learned a lot about corporate finance, but personal finance (at least two decades ago...) was not on the menu.

However, perhaps the biggest reason we don’t talk openly and honestly about money is tha"t for far too many of us have been taught that money and "making it" (literally and figuratively) is what life success is all about. When you take that mindset and combine it with a widespread lack of training on the basics, you get a lot of people chasing after “wealth” when what will really bring them deep and lasting happiness is “true WELLth” - redefining success to better align your money and your time with your passions.

The purpose of this short eBook is to give you bite-sized pieces of jargon-free financial insights, tools, and tactics that you can use to shore up your financial foundation. I have found that once people establish a base level of financial literacy and eveng more importantly - and increased comfort with simply talking about money - they are able experience great changes. Specificially they become closer to self-actualization through this process of redefining success, this process of aligning money and meaning, this process of… creating and living your own definition of true WELLth.

Here’s wishing that this eBook starts you on your own journey to a place of financial calm, confidence, and clarity that I like to call “MoneyZen”!

Warmly,

Your

Pat

h to

true

WEL

Lth

Manisha Ann ThakorPorland, Oregn

Holiday 2018

`

4

1. What Are Your Financial Priorities?

As we enter the holidays, it may be difficult to turn our attention to the cold reality of personal finance. Yet as any financial expert will say, to continue enjoying our lives to the fullest, it is essential to plan for our financial futures.

Unfortunately, many Americans find themselves in a position of working hard, yet having very little in savings and retirement funds. As a nation, we have learned how to make money, but due to a lack of financial literacy and education, our track record of keeping and growing that money isn’t as strong.

A recent study featured in The Wall Street Journal highlighted two major consequences of this knowledge gap:

The National Endowment for Financial Education and the Financial Planning Association co-created a nifty online tool that I really like called Financial Four. Its goal is to help you identify the financial areas that are most important for your specific circumstances.

As part of the launch they asked financial advisors what they thought a typical individual’s top four financial priorities should be. Here are their answers:

If you are reading this list and thinking, “been there, done that”… fear not. That’s why it’s called personal finance. We’re all different. So take a few minutes to complete your own assessment at www.financialfour.org and begin prioritizing your financial goals.

1. Live Within Your Means. By nearly 2-to-1, this was the topchoice among financial planners and advisors. Spending less than you earn and living within your income allowance is the best way to ensure you meet your financial goals.

2. Protect Yourself with Adequate Insurance. Ensure yourfinancial security by having adequate insurance coverage in place for health, disability, long-term care, auto, homeowners’ and renters’ to protect yourself and your assets.

3. Tackle Debt. If you are burdened with a lot of debt, now isthe time to honestly assess how much you owe and establish a payoff plan. Immediately stop running up new charges, cut expenses, and prioritize your debt by paying off the highest interest rate accounts first, then applying extra money to the next account when paid off.

4. Build an Emergency Savings Account. Prepare for theunexpected by having this important reserve. Keep this account separate from your other savings and aim for three to six months of living expenses. Starting with a small reasonable goal—as little as $500—will help you springboard toward building your emergency savings.

• According to the Employee Benefit Research Institute, 57%percent of U.S. workers surveyed reported less than $25,000 intotal household savings and investments excluding their homes.In 2008, only 49% reported such low savings.

• The survey also found that 28% of Americans have no confidencethey will have enough money to retire comfortably—the highestlevel in the study’s 23-year history.

• One key factor is competing financial priorities. In our modernfinancial world with its myriad of choices it’s hard to knowwhich to focus on first. Do we prioritize saving, investing or debtreduction?

Your

Pat

h to

true

WEL

Lth

5

2. How Fit Are Your Finances?“So how are those financial resolutions going?” If you find that question cringe-inducing, trust me: you are not alone. And you may be over-reacting. As a financial advisor, I can assure you it’s still plenty early for you to turn your good financial intentions into actionable steps and repeatable systems.

All behavior change (weight loss, positive attitudes, money management, etc.) involves creating new, healthier neuro-pathways step-by-step. I see many parallels between increasing your physical well-being and your financial well-being. Appointments with an internist and dietitian serve to evaluate your physical condition and daily habits. Similarly, the 5-point financial blueprint presented below will provide a comprehensive initial overview of your financial strengths and opportunities for improvement.

Remember, the purpose here is not fear-mongering. It is simply to deepen your awareness of what your money can do for you when it’s well managed.

Earning & spending. This is your financial diet: calories in and out. Track your spending — all of it — for a month (or a week at least). You might be amazed to discover how many ‘calories’ go missing (in this case, expended rather than ingested). Use the old fashion paper-and-pencil method (like me) or an online calculator from Mint, Moven or Spendee. This is the core of your financial health. You are what you eat—and earn, and spend.

Saving. Monitoring savings is like a regular check-up; it should include age-appropriate tests that gauge how well critical systems are working (and are funded). Emergency fund: six months of savings? 401(k): contribution north of 10%? Gross income saved: approaching 20%? If you are not quite there (or nowhere near), yet earning a living wage, now’s the time to ask if common savings myths are holding you back. (Most are variations on “I’ll save more when I make more.”) The fact is, even 10 extra dollars saved a week adds up to some real money over time.

Debt management. Compare this step to maintaining your ideal weight. Kudos if you’re free of extra pounds (or money owed): you’re beating the trend. The New York Fed reported that U.S. household debt crept up again in Q3 2013 (student loans, for example, topped $1 trillion). Remember: adding an extra $50 or $100 to your minimum monthly payment can shave off years of payback and thousands in interest. One session with a debt management calculator should encourage you to funnel a raise or extra revenue stream into this inverse savings account.

Investing. It’s an exercise program tailored towards longevity and good health. Toned muscles fight the atrophy of aging; money is invested to fight and overcome the corrosive power of inflation. Do you know your current asset allocation, fees, and last year’s portfolio performance? Is it time to rebalance? These are the essential questions every investor should ask and answer.

Insurance. This is the financial equivalent of preventative medicine, and it doesn’t stop with health and life insurance. Your chances of needing long-term disability insurance, for example, probably are greater than you expect. Your financial assessment should evaluate your deductibles, whether you should take out an umbrella policy to lower premiums and if you qualify for multi-policy or good driver discounts.

So invest in your financial-wellbeing. This week, take a few hours to run your numbers and ring in a healthy—and wealthier—year ahead.

Your

Pat

h to

true

WEL

Lth

6

3. My Quest to Find Financial Peace of MindThere are thousands of personal finance books, magazines, radio and TV shows. Yet money anxiety persists. No one is immune.

Financial fear lurks in the once safe nooks and crannies of our daily lives. Millions of hardworking Americans are living paycheck-to-paycheck. With economic uncertainty so high, even those with emergency funds and retirement accounts are prone to night sweats about their financial futures.

I’ve spent the past few years traveling around the country speaking and connecting with folks about money. And it’s become crystal clear to me that we are whirling around like a centrifuge when it comes to our personal finances. There is a lot of movement, but no forward progress.

Time and again I’m asked the same 20 basic money questions. Over and over I cite the same 20 core financial answers. Yet it feels like nothing is changing. As a society we remain twisted up in severe money pain.

Clearly, there’s another dimension to our personal finances that has yet to be addressed.

Lately I’ve been thinking about the concept of a “money tree.” In this image, the leaves represent the traditional financial advice we’ve all been hearing for years; the branches, our emotions; the trunk, our familial and cultural programming; and the roots (deep underground and invisible to the naked eye), our spiritual underpinnings.

To date, 90% of our energies have been focused on fixing our financial leaves. But a tree cannot be healthy if the branches are overburdened, the trunk is damaged, or the roots are weak. Likewise, my hunch is that our financial lives cannot be rejuvenated without an equally holistic remedy.

My hope with this adventure is to find a framework or concept that can

be used by all people in all situations to soothe money pain. A tool that works—regardless of your age, gender, income, occupation, or religious affiliation—to guide you to make a lifetime of financial decisions that make your heart sing. Just in the way a scared kitten might hide under a sofa, I want to help call out our money joy from wherever it has sequestered itself from so many of us for so long.Crazy idea?

In a couple of very messy areas of my own personal life I’ve seen how this works. With regards to food, Suze Orbach and Geneen Roth have taught us the power of “eating what our bodies want.” With regards to human interaction, Marianne Williamson and Gabrielle Bernstein have shown us the power of assessing our actions through a spectrum of “love versus fear.” These simple frameworks have powerfully transformed our relationships with ourselves and with each other. These touchstones work because they come at the underlying problem from a vastly different consciousness than the one that originally birthed the problem.

I believe deep down, at a guttural level, that there is a financial equivalent out there as well…

Your

Pat

h to

true

WEL

Lth

7

4. Set Boundaries to Have Real Freedom

I hate shopping. With so many choices, I’m hesitant to make a selection without reviewing every last option – lest I make a subpar decision. When I do purchase something, it often leads me to feel I need to buy something else. Shopping to me is a constant battle with “enough-ism.” (I call this dilemma Lifestyle Creep).

I’m also fashion challenged. So, I recently hired a stylist to help me make smarter choices for my keynote speaking and TV appearances. Our first step was to set a clear budget. And then… all joy broke lose. The simple act of setting the boundary of a budget helped me feel confident that with a deliberately limited option set, I’d do a better job of optimizing my happiness.

My experience of feeling free, while shopping within a strict budget, caused me to reflect on how this can apply to other forms of financial boundaries. Below I share a few ways in which I’ve come to believe setting boundaries can sometimes be just what you need to have real financial freedom.

Think of these as “money mantras.” Use the ones you like to help you craft a personal mental framework that enables you to maximize your life joy. After all, real financial freedom is living in alignment with the truth of who you are.

How can you take these potentially esoteric ideals and translate them into some practical action steps? Well, according to a Federal Reserve Board study, 43% of Americans spend more than they earn each year. As I travel around the country talking about financial literacy I’ve come to believe one reason for this is people not knowing what healthy spending looks like.

My favorite definition of balanced spending comes from Elizabeth & Amelia Warren’s book ALL YOUR WORTH. They suggest a healthy after-tax spending allocation is: 50% needs, 30% wants, 20% savings. (Note: In today’s tough times I adjust that 20% savings slightly to include consumer debt pay down).

So today, consider defining your personal spending boundaries, and let them honor how you want to spend your life’s energy.1. View financial planning as a form of self-care. Ignoring the

truth of our financial situation is a form of self-sabotage. It opens the door to the temptations of instant gratification and the accumulation of debt that can compromise our capacity to take care of ourselves financially.

2. Embrace financial limits to feel authentic joy. Paradoxically,setting limits shows us we have the power to create what we truly desire instead of being subject to the spin of consumer addiction. Proactive financial limits create a stark contrast to the artificial

sense of freedom felt when we live beyond our means, only to ultimately end up enslaved to debt.

3. View personalized boundaries as a path to your financialfreedom. Without boundaries – in what we eat, how much we sleep, how much we work, how much we play, we cannot live a healthy, fulfilling life. Boundaries, even financial ones, help us create the personal balance needed to maximize our quality of life.

Your

Pat

h to

true

WEL

Lth

8

5. Why Millennials Spend More Than They Should

What do you wish you had done differently with your finances as a young professional in your 20s? The most common response I hear to that question is, “Save and invest more.” As we get older, the tremendous power of compounding becomes all too apparent.

Are you in your mid-20s and want to become a (nominal) millionaire by 65? Save $5,000 a year, every year, for 40 years. If you earn annualized returns of 7% after fees, you will have a seven-figure nest egg. If you wait until you are in your mid-40s to try this same exercise, you would need to save nearly five times as much—nearly $25,000 a year, every year—for 20 years to end up in the same place.

So, starting to save and invest early on means that over the years less money comes out of your pocket and more is added to your nest egg, all through the magical twin powers of time and compounding.

Alas, this answer assumes it is easy to simply start saving in one’s 20s. For me, therein lies the most surprising (and usually unintentional) error professional 20-somethings make with their money. I have observed many young professionals mentally anchoring expectations about what their day-to-day lives should look like right out of school to one of two false images.The first is the standard of living they recall their parents had achieved right before they left for school. Newly minted young professionals tend to see this as what “adult life” looks like. Alas, it probably took mom and dad a good 30 years or more to build up to that standard of living. Expecting to reach it in the first few years of working is not realistic.

Second, we are continuously bombarded by unrealistic images in the media. They portray an “average” lifestyle for a young professional that is anything but. Take a popular legal show, such as “Suits.” To dress like, dine out and live in apartments similar to the size and

quality of those belonging to the paralegals and freshman lawyers on that show would likely require a salary a good 20%higher than what those positions actually pay. Or conversely, that lifestyle may represent 20% of a salary that could have gone into long-term savings instead of present consumption.

I’ve written a lot about my favorite “balanced spending” rule of thumb, which comes from a book Sen. Elizabeth Warren wrote with her daughter back in the days when she was a bankruptcy professor at Harvard University. The rule is 50/30/20. In an ideal world, 50% of your take-home pay goes to needs, 30% to wants and 20% to savings.

In the absence of having a clear goal regarding how much money to allocate toward savings--and in the face of unrealistic lifestyle images—young professionals find themselves unable to pursue what so many of us down the road would say is the financial gold standard: save and invest, early and often.

Your

Pat

h to

true

WEL

Lth

9

Worried About a Market Downturn? These 3 Yoga Principles Can Help

The late economist Hyman Minsky observed that cycles of risk-taking follow a consistent pattern. He found that stability and absence of crises encourage risk-taking, complacency, and lowered awareness to the possibility of problems ahead. Then a crisis occurs, resulting in people being shell-shocked and unprepared.

Indeed, we have seen this cycle play out in the way many investors behaved before and after the 2001 technology bust and 2008 global financial crisis. In tracking cash flows for fixed income and equity mutual funds over several decades, we observe that investors pile into risky assets following years of strong market performance and retrench into fixed income after suffering stinging losses—in effect, buying high and selling low.

As the current economic expansion enters its tenth year this June (now the second longest in modern history), and U.S. equity investors have enjoyed annualized investment returns of nearly 18 percent per year since March 2009 (the long-term average is 10 percent, dating back to 1926), it is time that we call attention to George Santayana’s famous warning: those who cannot remember the past are condemned to repeat it.So there you have it. Like a game of musical chairs, the party is going to end with many losers. How can you increase your odds of being a “winner” in the next market downturn?

Surprisingly, the answer may be found in some ancient yoga principles.

Huh?

Let me explain. I recently came back from a yoga retreat in Nicaragua where I was introduced to the concepts of Dharma, Sankalpa, and

6.

Vikalpa. To keep things simple, I will define Dharma as “the way that you do everything”—in other words, your overarching approach to life. Your Sankalpa are the specific steps you will take over the next 12-18 months to bring you into closer alignment with your Dharma. Your Vikalpas are the behaviors that keep you from acting on your Sankalpa and ultimately embodying your Dharma.

What struck me as I was thinking about how to apply these three concepts to my own life was the beautiful overlap they have with the ideal way to manage one’s own money. In fact, these three ancient principles can be used to help you navigate through the next market downturn.

Your financial Dharma is akin to the overarching investment philosophy you choose. (I recommend following an evidenced-based approach, but to each their own). Your Sankalpa is similar to your asset allocation—have you set aside a portion of your portfolio to immunize your standard of living long enough to weather a bear market? Your financial Vikalpas are the human tendencies that get in the way of sticking to your financial Dharma and Sankalpa.

Here’s an example. John and Jane are nearing retirement. They are believers in efficient market theory and have chosen an evidenced-based portfolio that incorporates funds such as those from Dimensional Fund Advisors and Vanguard. This choice of investment philosophy is their financial Dharma; it’s the way they “do money.”

John and Jane have a detailed conversation with their wealth advisor and identify what money they’ll need from their portfolio over the next 10 years to maintain their minimum desired standard

Your

Pat

h to

true

WEL

Lth

10

of living. As a rough baseline, 15 percent is a solid benchmark for this allocation to ensure a base level of a safety net. Next, you add in any expected annual withdrawals, either for recurring or one-time expenses. Then you take the net present value of those 10 years of cash flow and that becomes your “capital preservation bucket.”

Your financial Sankalpa is to set up your finances such that, no matter what happens in the market over the next 10 years, you will not have to sell securities outside of your capital preservation bucket in a down market. This figure is a rolling one, which is why you want to revisit your Sankalpa regularly—every 6 to 12 months is ideal.

The third and final step is to acknowledge your financial Vikalpas, those pesky behavioral traits that can trip you up along your way to Dharma. Examples include a tendency to panic and sell in market downturns, to follow hot tips you hear at cocktail parties, or to keep too much (or too little) in cash out of greed (or fear).

Whenever I hear someone tell me 2007-2009 market “ruined my retirement,” I know that one of two scenarios happened. Either they didn’t have a Sankalpa or asset allocation that included an appropriate capital preservation bucket and were forced to sell securities at fire-sale prices. Alternatively, they had the right asset allocation but did not have an overarching financial Dharma—their investment philosophy—on which to fall back. They sold in a panic, acting on their Vikalpas.

As you work to maintain a sense of financial wellbeing during the next market downturn, spend some time making sure you’re comfortable with your investment philosophy (financial Dharma) and asset allocation (financial Sankalpa) to ensure that natural human emotions like fear, panic, and terror (financial Vikalpas) don’t drive your decision-making.

Blending these mental wellbeing principles of yoga into your overarching life can enhance your financial wellbeing.

Your

Pat

h to

true

WEL

Lth

11

You Have $10 Million and 10 Years to Live.What Would You Do?

If you suddenly received $10 million dollars (after-tax) and at the same time a diagnosis that you had only 10 years to live, what would you start doing? What would you stop doing?

These are two questions I love to ask groups when I’m conducting financial-planning and financial-literacy workshops for women. My objective is to help them accurately identify their deepest values and most important life goals, independent of financial constraints and the all-too-common excuse that there’s always tomorrow. I particularly like this pair of questions because they force participants to engage with the twin concepts of limited resources and limited time. This in turn forces longstanding internal conflicts (financial, emotional or otherwise) to bubble right up to the surface.

Over the past decade I’ve asked this question of women across a wide range of demographics – age, income, education, career path, religion, ethnicity, etc. Despite the diversity of participants, the answers are remarkably similar.

Start: Most people tell me they would volunteer, be more philanthropic, travel, spend more time with family and/or pursue hobbies.

Stop: Most people also tell me they would stop working (at least full time). They’d stop worrying about money. They’d stop fretting about what other people think.

While my practice is focused on women, these responses are actually widely held across genders, according to the new Life Reimagined survey from AARP.

7.

This begs two questions. 1) If this is what we want, what’s keeping us from having the lives we truly desire? And 2) What lessons can we learn from these remarkably consistent expressions of human hope and desire?

With regard to the first question, the biggest lesson I have taken away from participants’ responses is that it’s shockingly easy to get unintentionally trapped in a certain lifestyle. And our concept of self is painfully difficult to extract ourselves from.

Let me give you an example, from my own experience. Fresh out of college, I had joined one of the traditional investment banking analyst programs at a top firm. Less than a year into it, I realized it wasn’t the career path for me and decided to switch to asset management. I thought my employer would be furious, having invested heavily in my training and having not yet gotten back much meaningful return on its investment. Instead, a number of very senior professionals pulled me aside. Quietly and almost confessionally, they told me how “wise” I was to get out before I had a family and became accustomed to the heady incomes this career path produced. I would then be unable to ever switch gears.

This memory, nearly 24 years old now, is seared in my brain. The urgency and intensity with which this advice was given to me reinforced how very many men and women were living lives of quiet desperation while wearing incredibly expensive suits and otherwise leading “the high life.”

When I ask people today what’s holding them back, the answers more often than not fall into some version of the same – that is,

Your

Pat

h to

true

WEL

Lth

12

that the web of life is too thick to trim back or alter now. I’d argue what we can learn from this is that while it may be a common feeling, it is flawed logic to think the status quo can not be adjusted.

Clearly, it’s vital to spend the time and effort discerning what it is you truly want from life.

This brings me to the lessons embedded in the second question, what can we learn from the universality of these collective hopes and dreams? Perhaps it is an awareness that simply understanding that what makes us happy is not the same thing as being able to manifest that happiness. Between the everyday burdens that we are reluctant to put down and the fear of the unknown that keeps us plodding along our initial paths, the steps involved in shifting that status quo are hard to find and even harder to set foot on.

This reckoning is part of the remedy. Once we know about the rift between our present path and the future that we envision, we can begin to take the corrective steps (financial or otherwise) to close that gap.

The stop/start exercise can help us begin to make tighter linkages between our money and our lives so that the former serves the latter, not the reverse. After all, what is the point of working to build a career and financial security if not to enable you to live the life that makes your heart sing? This may seem painfully obvious, yet over and over (and over) I meet people whose financial reality is at odds with their drivers of happiness. For some people, the answer may truly be to make more money or to spend more money. But for a far greater number of people, I find the answer comes in being much more discerning about how to use limited resources—both money and time—to maximize joy in this life.

Your

Pat

h to

true

WEL

Lth

13

For entirely too many hard-working folks, there is a significant gap between the retirement life they desire and the one they will be able to afford if they do not adequately prepare for the future. Traditional goals such as living in an inviting home and devoting time to adventurous travel may not be realistic for individuals who haven’t calculated how much retirement money they will have and how much money they will need to support their ideal lifestyle.

This need for financial literacy is particularly acute for women, who face strong institutional financial headwinds in the form of lower pay and more years out of the paid workforce than men on average (for more on this read my blog post on “The 77/11 Effect”).

According to The Transamerica Center for Retirement Studies, many well-intentioned women are not prepared for the future. Their recent study on Women and Retirement reveals some sobering statistics:

• 48 percent of women do not have any retirement strategy atall, despite the fact that 56 percent of women expect to self-fund their retirement through 401(k)s, retirement accounts,or other savings and investments.

• 53 percent of women plan to retire after age 65 or do not planto retire at all; most of these women cite reasons related toincome or health benefits as the reason for this.

• 54 percent of women are “not too confident” or “not at allconfident,” compared to only 44 percent of men who share thatsentiment; only seven percent of women are “very confident”in their ability to fully retire with a comfortable lifestyle.

8. How to Make Your Retirement Dream a Reality

Given the statistical reality that women live longer and earn less than men over the course of their lifetime, it vital that we both develop a clear strategy for a comfortable retirement and take action on it.

The first step is to use a retirement calculator to determine how much money will be available to you at your current rate of savings. I like the “Ballpark E$timator” retirement calculator from Choose To Save.

The next step is to identify how much money you will need to live your ideal lifestyle. You may need to consult with a financial advisor to determine how the rate of inflation will impact what you can afford. A rough rule of thumb is 70-90% of your current income (ouch, I know).

Last but not least, you will need to compare the two numbers to see if you need to start saving more aggressively to meet your target. If you feel that you don’t have enough money to maximize your retirement account each month, you should also take a look at current expenditures that are not essential to your joy and livelihood. Using a digital tracking tool such as Mint or Hello Wallet can help you find hidden money, so you can channel more resources toward creating the future of your dreams.

These three steps are basic, but not easy. Investing a bit of time to calculate these figures can pay rich dividends in the future in terms of your ability to make the mid-course corrections to get your dream retirement back on track. Although it may be challenging to practice mindful spending, when you stay connected to what is truly fulfilling in the present as well as your hopes for the future, you will be more motivated to set aside money to sustain your ideal life.

Your

Pat

h to

true

WEL

Lth

14

Teach Our Children Well…About Finances

What’s one realistic financial resolution people can make?

This new year, commit to paying your financial knowledge forward by sharing your best and worst financial moves with someone younger whom you care about.

Unlike other areas of our life—fitness, nutrition, parenting, etc.—our financial well-being is not a topic that many of us talk about socially with our family and friends. As a result, many young people head out into their work lives with unrealistic expectations around spending and savings. Just think of the difference you could make in someone’s lives by sharing lessons such as these:

As an added benefit, when you share your hard-earned financial knowledge with the next generation you will naturally find yourself becoming more mindful about your own finances. It’s the same way once you start walking or going to the gym regularly you naturally find yourself being more mindful of what you eat.

So this 2014, commit to helping a young person in your family, your office, or your community increased their financial well-being. That one simple step will pay dividends to you as well!

• Avoiding credit-card debt, and if you do have it, developing a planto pay off more than the minimum monthly payment each month.

• Starting to save for retirement (via 401(k)s, 403b, IRAs) as early aspossible in your working years.

• How to figure out how much car or home you can truly afford (Hint:It’s usually less than a bank is willing to lend you!)

9. Yo

ur P

ath

to tr

ue W

ELLt

h

15

Talking Money With Your Honey:Five Ways to Get Financially Intimate

This February, consider a new approach to intimacy with your loved one. As a female financial advisor focused on female clients, I’ve become very clear-eyed about how important the role of money—and the ritual of talking about money—can be in relationships.

While divorce rates are declining, money’s influence on divorce is growing ever larger. Research suggests that as our level of consumer debt has risen, so has our squabbling about money. Some research cites money fights as the top cause of divorce.

So this Valentine’s month, keep Cupid’s aim true and invest in your relationship by exploring these five financial facts; then pop the champagne!

(1) Your credit score. This three-digit number won’t tell you everything about your honey — life’s upheavals can force a credit misstep from even the most financially responsible people — but it’s a logical starting place. ‘700-plus credit’ may not sound sexy, but it does indicate your sweetie places a premium on making timely payments and low overall debt ceilings. (The average FICO score for approved mortgage borrowers was 734 in August 2013.)

(2) Demands on your cash (present and future). While it takes just two to tango, the party can grow larger pretty darn fast! From children to dependent elderly parents to charitable giving and clothing/entertainment budgets, expect many demands on your income, and his. Illustrating your respective priorities can help stave off future disagreements and disappointments. (Oh, and those kids? A USDA study projects they’ll cost just north of $300,000, each, adjusted for inflation.)

10.

(3) Your income. Yes, some folks get married without ever knowing how much their spouse earns. It’s not to say that you can’t keep your money separate—many happy couples do—but if you are going to live together, a full disclosure of earnings, retirement accounts, and other assets is in order. This clearly isn’t a first (or a fifth) date topic. However, if you think you’ve found ‘the one’, this is data you absolutely need before committing to a lifetime together. (Take bonus points for calculating the earning potential in your chosen fields.)

(4) Your financial personality. Are you a saver or a spender? Turns out financial opposites often attract and, sadly, often experience unhappy marriages. But it’s not a fait accompli. When you’re willing to talk about—and perhaps compromise—your spending goals, you can balance your respective financial needs. Be aware, though, that men and women can see basic facts differently. One wealth management study found that 73 percent of women said they were jointly responsible for finances with their partners. Men? Only 45 percent said money was an equal concern.

(5) The age at which you plan to retire. If you have no idea how long you expect to work, it’s time to grapple with this question; it will have tremendous impact on your savings rates, major purchases, where you send your children to school and decide to live. If you’re determined to stop working early, you’re probably willing to bypass most extravagances along the way. But how will that sit with your beloved?

You may believe these topics will ruin the bliss of romance, but I think you’ll be pleasantly surprised. Money talks may not be romantic, but honesty and agreement build trust—and THAT preserves Cupid’s promise.

Your

Pat

h to

true

WEL

Lth

16

The Marriage of Love & Money: How to Protect Yourself from Financial Heartbreak

What’s going on (financially) in the private lives of couples across America?

As someone who earns a living providing financial advice for women, I’m fascinated by this question. A recent study about the money behavior of mates, conducted by Learnvest and Ameritrade, yielded the following insights:

Interestingly, while financial conflicts are often listed as a leading cause of divorce, those who participated in the study said that when it comes to finding their ideal partner, money and potential earning were not a priority. Both men and women valued personality, character and looks above financial success. This raises an important question: How can you figure out if you and your sweetie have financial views that could put your relationship in jeopardy—and if so, what can you do about it?

This insightful piece from The New York Times highlights the stories of several couples and what they learned from financial heartbreak. Here are my four favorite ideas inspired by the article:

Financial knowledge creates financial freedom and power. Under the influence of romance, it is easy to be distracted from practical concerns, but including financial planning in the creation of your authentic partnership will help sustain the love life you desire. Having the “money talk” (more than once!) is an investment well worth making in your relationship.

• The typical couple has three primary financial concerns: Havingenough money to retire, enjoy their lives, and live comfortablytoday.

• Respondents reported that they talk with their partners aboutmoney on an average of 20 times a year and fight over money atleast 5 times a year.

• Overall, the study found that older generations are more likely tofeel in control and secure when it comes to their finances – andthey’re also significantly more likely to feel as if they’re on thesame page with their partner in regard to money.

Know the financial profile of your partner. Are you marrying a spender or a saver? Ask about potential debt and the state of his or her credit score. Map out a plan together to address any issues that arise from this conversation.

Talk openly about financial values and goals. This includes the kind of lifestyle you each envision for retirement. Make note of where your dreams overlap and where they diverge.

Consider a financial three-way. If you do not feel you are financially compatible, but still want to move forward with marriage, consider keeping three types of accounts: yours, mine, and ours.

Get professional help. Hire a reputable financial advisor to help you find common ground and honor both of your needs. I recommend only working with a financial advisory who operates as a “fiduciary,” utilizes low cost index-like funds as their investment vehicles, and engages in holistic financial planning.

11. Yo

ur P

ath

to tr

ue W

ELLt

h

17

The Beauty Of A Budget

Many people think budgets are about deprivation. By contrast, I feel they are about liberation. Here’s a simple three-step plan to create a budget that you will actually feel excited to think about.

Step #1: Understand the real purpose of a budget.It’s not necessarily what you might think. The benefit of a budget is that it establishes boundaries. Importantly, these boundaries can set you free to focus on what is most essential. Let me explain. Because we live in a world with so many choices, people often think of budgeting as a constraining, joy-restricting activity. But when done correctly, budgeting actually creates a protective financial haven around you (by simplifying your set of choices) to help you make spending decisions that will enhance your joy.

Step #2: Learn what healthy spending looks like.If you ask the average person, “What is a healthy mix between spending on needs and wants versus savings?” you will likely get a blank stare. That’s because very few of us were ever given straightforward guidelines to follow in this area.

Back in the early 1990s when she was a Harvard Law School professor specializing in bankruptcy, Senator Elizabeth Warren and her daughter Amelia wrote a delightful book called ALL YOUR WORTH. In it, they identified an optimal “balanced spending formula” of 50/30/20. It is simple, powerful, and after all these years it’s still the most effective healthy spending rule of thumb I’ve come across.

Step #3: Adjust to fit your specific situation.While I agree that 20 percent is the ideal amount to strive to save, in this era of sky-high student loans and consumer credit, it may not be obtainable for many people right now.

For this reason, I have temporarily adjusted my thinking. Any amount you are paying for reducing student loan debt or credit card debt counts toward that 20 percent savings, if you will commit to channeling those dollars into savings after the debt is paid off. And don’t be afraid to start with baby steps. To see how powerful simply increasing your savings rate by 1% a year, Google “The Save 1% More Calculator New York Times” for a wonderful interactive tool that quantitatively demonstrates the power of inching forward.

Setting up a healthy budget with this ideal spending formula empowers you to take the first step in creating a life lived from a place of financial strength. It enables you to find that vital intersection between what is important and what you can control. Focus on that sweet spot and find your joy. Then you will be living your life from a place of “MoneyZen” and be on your own authentic path to find your true WELLth.

12.

The “Balanced Spending Formula” Looks Like This…

• 50 percent – the ideal amount of your take-home pay thatgoes toward needs

• 30 percent – the ideal amount of your take-home pay thatgoes to wants

• 20 percent – the ideal amount you set aside for savings

Your

Pat

h to

true

WEL

Lth

18

About Manisha + To Stay Connected…

Manisha Thakor is the vice president of financial education at Brighton Jones, an innovative Seattle-based wealth management firm devoted to helping clients, colleagues, and the global community live a richer life. Of her many duties there, the one Manisha is most passionate about is the January 2019 launch of the “true Wellth” podcast, which can be subscribed to in all the usual places… iTunes, Stitcher, etc.

Manisha is also the founder of MoneyZen LLC, a boutique financial educational consultancy providing select keynote speaking and financial literacy workshops to organizations focused on financially empowering women and families.

Known for making the complex simple, the cornerstone of Manisha’s work is a concept she calls “MoneyZen,” a joy-based approach to personal finance honoring the core values of simplicity, freedom, and abundance. This is why she is particular honored to teach at 1440 Multiversity!

For the entire 25 years that Manisha has worked in financial services she has been an ardent financial literacy advocate for women. Manisha is the co-author of two critically acclaimed personal finance books: ON MY OWN TWO FEET: a modern girl’s guide to personal finance and GET FINANCIALLY NAKED: how to talk money with your honey. Manisha teaches periodic financial literacy works shops at venues as wide ranging as 1440 Multiversity to Rancho La Puerta to the Institute of Integrative Nutrition. She also proudly serves on the board of the National Endowment for Financial Education.

Manisha’s financial wisdom has been featured in a wide range of national media outlets including CNN, PBS, NPR, The Today Show, Rachel Ray, The New York Times, The Boston Globe, Barron’s, Money, The Los Angeles Times, Real Simple, Women’s Day, Glamour, Essence, Cosmopolitan, and Women’s Health, to name but a few.

To stay connected with Manisha you can sign up for her monthly ersonal newsletter at: MoneyZen.com and learn about her full time work at BrightonJones.com.

And you can find her on social media at:

Manisha earned her MBA from Harvard Business School in 1997 and her BA from Wellesley College in 1992. She is a CFA charterholder and a CFP® practitioner. Manisha lives in Portland, OR where she revels in the amazing Third Wave Coffee scene and the stunning beauty of the Pacific Northwest. Her website is MoneyZen.com.

Your

Pat

h to

true

WEL

Lth