Woman in Red

It’s difficult to live a rich, soulful life if you are in debt. Taking charge of your own personal finances is one of the most important things you will ever do for yourself.

Budgets. Managing debt. Superannuation. Saving for the future. For many women these topics are about as exciting as watching paint dry. Naturally it’s much more interesting to think about your next holiday or shopping spree. But here’s a sobering thought: without financial freedom, it will be near-impossible to ever create the successful and happy life of your dreams. Financial freedom represents so many things, from security to self-care to peace of mind. Far from boring, learning how to look after yourself financially is one of the integral steps to becoming a grown-up, no matter what age you start.

“Money has a lot of emotion tied up in it,” says Shirley Smith, SW’s resident psychotherapist and coach. “As women, many of us are still beginners in the way we look at money: a lot of women are still hoping they’ll find a man who will look after them, cherish them and pay their way in life.”

With rising divorce rates and the trend for many women never to marry, meeting Mr Right is certainly no financial plan. Even for those women who do marry a man with plenty of money, issues of power, control and inequality can arise if they do not have their own firm financial footing.

“Look at the relationship you have with money,” Smith says. “Are you being irresponsible and ungrateful with it? Are you a slave to it? Do you believe all your problems will go away when you have lots of money? Like any other relationship you have in life, the foundations must be healthy and solid or eventually the cracks will appear.”

An accountant I know once told me how shocked she was by the high percentage of people in Australia (especially those under 40) who live paycheque to paycheque. If for whatever reason their pay didn’t land in the cheque account for a few weeks running, they would be unable to cover basic expenses such as rent, food and transport. Now think for a moment how easy it would be to get sick, or lose your job, or encounter one of the everyday tragedies that might befall anyone of us. Without family and friends to support you, or a generous overdraft facility from your bank, you could literally end up homeless. No wonder so many women are so terrified by money matters they’d rather avoid them altogether.
“When people don’t have enough money, or they’re worried about debt and feeling stressed, what do they tend to do? Go and shop or take an expensive holiday because they need a treat,” Smith says. “It’s that inner child part of us that doesn’t understand delayed gratification: we want to feel good so we’ll get the shoes or the dress or the holiday right now and whack it on the credit card. Of course when the credit card bill arrives we’re even more stressed than we were before.”

To anyone currently in debt, or teetering precariously on the edge, Smith stresses the importance of seeking emotional support as well as financial advice. “First thing is to face up to the reality of the debt – no more hiding,” she says. “Get really clear on what you owe, face the shame and then look at your part and what you have to do to fix it.” At this point you might benefit from seeing a money counsellor. It’s also important to look at any beliefs you have around money that could be holding you back: do you believe it’s the root of all evil, for instance. That’s not going to be the recipe for an abundant cash flow.

You should aim to have income allocated into three directions, says Smith: past, present and future. Each one should need no more than a third of your income. The past category may be a credit card debt for a holiday that’s now over. The present could be your current rent. The future is what you’re saving for. In addition, Smith says it’s vital to have reserves, a chunk of change that you don’t touch no matter what. “That is one of the best ways to ensure you stay out of emotional need around money,” she says. “Knowing you have money in reserve keeps you from feeling deprived and fearful.”

Most importantly, Smith says, is finding the spiritual substance you’ve been trying to find through over-spending or living in debt. “It’s not about living in deprivation; you can certainly find ways to have fun and be creative while being responsible with money,” she says. “Ultimately it’s about having a plan and the self-discipline to stick with it.