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Senior Correspondent

“Sharon, you make it sound as if getting to financial security and staying there is all about doom-and-gloom! Sounds so restrictive …”

So started a discussion with a friend — and regular reader — about my “system” for women to become financially secure. Especially those nearing or already into their fifties who don’t feel they’re making enough progress.

“Not at all,” I answered. “But you can’t get there without a dose of reality.”

The Millennials’ Reality

I recently watched a video mini-course by a financial leader to the younger crowd. He ridiculed “65-year-old financial advisors” who he said prescribed “cutting out lattes.” He proposed that instead of using up willpower to cut out $5 cups of coffee, that willpower should be used to demand higher salaries or to generate higher income. Doing so makes it possible to continue buying $250 shoes and vacations in Bali.

People in that age group are still in the heady space where everything is possible and time is not an issue. They also enjoy a greater chance of having job and salary flexibility. Most of all, they have 30+ years ahead of them to save for retirement.

The Boomers’ Reality

Boomers today are 50 to 68 years old. The early fifties are when most women who are unprepared for retirement wake up to that fact. And the time horizon is shorter, maybe 15 years left to play catch-up before retiring — by choice or by necessity.

For those women, I have a system that can get (1) their finances under control, (2) their path to security defined and (3) their vision clear about what their specific long-term dream will look like.

The Three Faces of Time

I digress to share my concept of time and money.

How we look at time depends on how much money we have — compared to the financial obligations we carry.

1. Time as a Stressor: When our expenses are greater than our income, what we dread most is the passage of time. We dread every day that passes — every day that takes us closer to the end of the month — or to whenever the next bill comes due. Checking off each day on the calendar makes us sick to our stomachs. The chatter in our heads is non-stop.

2. Time Neutral: When our expenses equal our income, we’re “time neutral.” It doesn’t matter that one more day has passed, because we know that we can meet our financial obligations when they arrive. Even if just barely.

Suddenly the huge burden of passing time (which we can’t stop no matter how hard we try) is lifted off our shoulders. Our anxiety level drops. And without that one burden, we have breathing room that lets us be so much more creative about our lives, our challenges, our solutions and our goals.

3. Time as a Friend: Next, imagine what happens when our expenses are smaller than our income. Now we relish the passing of each day because we know that each one represents more ‘extra money’ in the bank. It has nothing to do with wishing time away. It has everything to do with the attitude of looking forward with glee — rather than dreading tomorrow.

The Three Steps to Financial Peace of Mind

Where a woman starts on her path to financial peace of mind depends on where she is in the same “Three Faces of Time.”

1. First Step to Financial Peace of Mind: If a woman is under financial stress, the first step is to get income equal to or greater than expenses. (So many of the tips I write about address ways of achieving this, which may be why it seems like doom-and-gloom.) The goal is to quiet the head chatter and lower the anxiety. Anyone in this phase knows what that feels like. It’s devastating, distracting and exhausting.

Here we work mostly with numbers, expenses, all the boring, nasty stuff. We cut back. We give up lattes. But the goal is never to stay in this constrained space for long. It is just a stepping stone, but a necessary one that might require some temporary tough decisions.

2. Second Step to Financial Peace of Mind: If a woman can just barely cover her basic living expenses, she may not feel she’s where she wants to be, but she can think clearly and creatively about what she wants her life to look like going forward and what she can do to fund it. Her mind is quiet.

She can reassess her priorities today (as opposed to those she’s carried forward from when she last did a lot of dreaming — in her twenties — and that no longer fit). What was once important may not be anymore. Real lifestyle choices may be different, so a Lifestyle Spending Blueprint is developed than reflects what brings her joy today. And it can change as priorities and resources change.

3. Third Step to Financial Peace of Mind: Envisioning a realistic, fulfilling long-term lifestyle comes next. Motivating beliefs make it easy to make good monetary decisions. And with each day, a funded future starts taking shape.

As savings accounts, financial instruments and investments grow, satisfaction comes from knowing that her finances are under control.  She also knows she is headed towards a future she has designed herself, not one she borrowed from magazines, television and other people’s fantasies.  Yesterday’s joy morphs into today’s joy, as she builds tomorrow’s joy.

You see, wealth is not just about having money.  It’s about having a plan for a lifestyle that excites you.  And it’s about having financial peace of mind.

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