We must prioritize our health and well-being as one of our most important investments, even during difficult economic times.

Q :
I am a 52 year old woman and in 1980 I broke my back and was paralyzed from the waist down.  Wayne Dyer came to see me and encouraged me to walk again and I do but am in constant pain.  It is difficult to work alot. I collect worker’s comp and make a small amount on my own.  I am now 4000.00 in debt  plus my car loan of 8.000 dollars.  I am barely making it and have trouble not flying into fear.  What  suggestion can you give me to stay calm and not so scared.

~C.V.

A :

1. Find a friend who has no agenda with each others  financial ally or money mentor and meet 4 times a year w/this person to review your finances.
2. Start collaborating with your friends; you might surprise yourself with a new source of income.
3. Do the Intentional Spending statement that’s on my website, under tools and resources on the home page.
4. Read my book – it is all about getting out of fear and into your creativity and wisdom around money
5. Do the money breath everyday that’s explained in book.

Good luck and remember that there are billionaires in poor health who would envy your situation.

Why are so many people fleeing the stock market and  concluding  that treasuries and high quality bonds are the only safe havens?  There are at least two instances in history when this has not been true.  In the 1970s, bonds did not keep pace with inflation.  People lost their purchasing power while stocks preserved theirs.  A more decisive and dramatic example of this is Germany in 1923.   Bond holders there lost everything because of hyper-inflation, while stock holders actually made money.

There is a mystique about stocks.  They seem risky.  But what’s risky about investing in  companies that make products and services that we actually use?  If you invest in a broad portfolio of companies, most of them will survive any crisis because consumers will always need products and services.  Bonds, CDs and bank accounts, however, all have the potential of losing tremendous value in an, albeit rarefied, environment of hyper-inflation.  If a bond is a promise to pay you back in the future, what happens when the dollars are devalued?  Those dollars buy a lot less.  That’s the risk of being a  bond-holder in a hyper-inflated economy.

So given that there is a chance of losing money with bonds as well as equities, and we don’t have a reliable crystal ball, why not maintain a diversified and well-balanced portfolio?  It’s the only source of true safety in an uncertain world.

HOW TO GET YOUR FAMILY’S FINANCES IN ORDER—NOW!—FOR 2009

Listen up, parents: It’s time to get your finances in order. With the  new year fast approaching, there’s no time like the present to take  action. Not only will being proactive about your money situation make for a calmer, happier, and, ultimately, more successful year,  but it will get your kids on the right track while they’re still young,  setting them up to have a healthy relationship with the the almighty  dollar for the rest of their lives.

Our kids inherit more than our eye color and height—they also inherit how we think about money and how we behave with money. If, for example, you use money to feel good (buying a new sweater after a bad day, buying your kid a toy when you feel distant from her) you are literally teaching your kids that buying more things will somehow, eventually, fix the problem. They, too, will begin to feel a sense of deprivation—after all, if you did have enough, why would you need to constantly acquire more?  They’ll also begin to believe a particularly problematic falsehood: the best way to ease discomfort is to make a purchase. It won’t be long before their own behavior mirrors the messages they got from mom and dad.

Rather than head down this road for yet another 12 months, take advantage of the New Year to get clear with yourself and with your kids about what your spending and saving will look like for 2009. Why is it important to include your children in this process rather than just let them figure out on their own that your spending is changing? There are two reasons. First, if you are up front with you’re kids about how you choose to spend the family money, they won’t create negative, imaginary reasons for the change.  Just as children of divorce often invent that they are to blame for their parents’ split, children in homes with suddenly- tighter purse strings may come up with destructive, unhappy and untrue causes  for the shift.   Second, if your children feel they are a part of the decision process rather than serfs to your financial decrees, they are less likely to rebel or develop a negative attitude. This is particularly true of older kids.

So how do you decide what needs to be done in the New Year, and how do you talk about it with your kids?

Here are my 6 Top Tips for Creating Financial Family Fitness in 2009:

1	First and foremost: Before getting together with the kids, if you have a partner, share with him or her the money message you got from your parents so that each of you knows what inherited money beliefs you each bring to the table. You may be working with the basic belief that the love of money is the root of all evil, while your partner is positive that money makes the world go ‘round. If you don’t have a partner, have this talk with a friend. Recognize that our adult money activities are driven by childhood beliefs. This understanding can help you turn any judgments you may have about your own or your partner’s money habits into compassion.
2	Complete a Spending Intention worksheet with your partner—this gives you a clear picture of your actual cash flow and allows you to create a spending range for each category of expenses. And, if one of you tends to hand over the reigns when it comes to family finances (happily or begrudgingly), this will help to restore some balance.
3	Remember the value—and yes, the fun—of saving. Our grandparents generally couldn’t overspend much because they didn’t have Visas and Mastercards. If they wanted something, they typically paid cash up front, or (drumroll please) saved for it. Restore this practice with your children. Give them the experience of anticipation, excitement, and accomplishment that comes from saving, and experience it yourself by helping out. If there is something your kids really want this year—a bike, a trip to Disneyland—instead of using the credit card to buy it, develop a matching savings plan. If they save five dollars, you add 10.
4	Speaking of credit cards, let them go. It is wise to keep one or two on hand for emergencies and credit cards can play a role in restoring damaged credit. But generally, they should function as a spare tire, not a steering wheel. Overusing credit cards not only plants you firmly in the debt cycle, it’s teaching your kids—and yourself—that saving is essentially impossible or useless, and that you can have whatever you want whenever you want it. The thorny truth is that you can’t—not without paying the price in interest, stress, and the growing sense that you don’t have enough. If we want our kids to be patient and wise spenders, credit cards are teaching them the opposite values.
5	Sit down for a family money meeting, but take care to strike an information balance. Too much financial information stresses kids out. They don’t need to know all the details of your mortgage, the raise that didn’t come through, or the 401K that’s losing traction. If your intention is to decrease family spending, tell the kids how you are going to cut back and invite them to come up with ways that they can reduce the family’s spending as well. It’s beautiful to witness how children can step into greater maturity and responsibility when their ideas are taken seriously.
6	Finally—and trust me on this—there is nothing that will improve a family’s sense of security and wellness more than giving to others. It is the quickest way to dissolve a sense of not having enough or needing more. Generosity necessarily undermines our feeling of scarcity and sufficiency blossoms. So sit down, put your heads together, and select a beneficiary and an appropriate amount.

What is Consumer Confidence?

By Dr Boyce Watkins, appearing as a guest here on Cure Money Madness.

If you listen carefully to the words of Treasury Secretary Henry “Hank” Paulson and Ben “Big Ben” Bernanke (chairman of the Federal Reserve) you might notice a trend in their language. The word “confidence” is used a lot when they speak. Many of their monetary proposals are not necessarily valuable for their financial power, but also for their psychological power.

Some of you may wonder what confidence has to do with anything. After all, if you’re broke, confidence doesn’t exactly put money in your pocket. If you’re 100 pounds overweight, confidence won’t help you win the Olympic 100 meter dash. When you are flying on a crashing plane, confidence doesn’t keep the plane from slamming into the ground. But confidence is important to an economy, and one of the most significant drivers of economic growth. In fact, over confidence has driven US economic growth for the past 10 years. Here are some reasons that confidence matters in the minds of Hank and Big Ben:

1) Confident consumers spend money

If you think you might lose your job next year, are you going to max out your credit cards? I certainly hope not. If you are worried about being able to make ends meet, are you going to buy that big screen TV? Not unless you want your wife to leave you. So, even if it doesn’t hold any truth, the mere forecast of a weak economy is enough to make many Americans hold off on consumer spending, one of the great driving forces of the American financial system.

2) Confident companies invest money and hire workers

Investments involve risk. Your hunch may work out, and it may not. If you don’t believe the economy is getting better, you are not going to consider taking that risk. No one plans to go to the beach if the weather man says that it’s going to rain. When economic rain is in the forecast, companies pull out their umbrellas and hold off on new projects. This reduces the number of jobs in the economy, because nearly every job created in America is the result of someone making an investment.

3) Confident Americans do not take their money out of banks

In case you didn’t know, your bank does not have your money. Your money is part of a large base of financial capital that is loaned out to individuals and consumers seeking to get a good return on their investment. So, without investing, your bank would have no interest in paying you any interest at all. So if, say, 30% of all customers of the same bank decide to get their money out at the same time, the bank would have serious financial problems. It is a lack of confidence that could cause customers to “run” on their bank and take out their money.

4) Confident investors keep their money in the stock market

The stock market is a place where fortunes are made and lost. Some part of that fortune is psychological, given that no asset can have a value which exceeds that which someone is willing to pay for it. When investors lose confidence, they take their money out of the stock market, and reductions in demand for stocks lead to massive paper losses in the market. Additionally, most Americans are “momentum traders”, meaning that when the market goes up, they tend to buy more, and when it goes down, they tend to sell. History shows that it is actually the opposite approach that tends to work best.

5) Confident banks make loans

Banks have to keep a certain portion of their funds on hand at all times to meet federal requirements. If they are fearful that their customers might come and demand their cash, they hold onto their capital to ensure that it is available. If they are afraid that their borrowing customers will not be able to repay loans due to a weak economy, they also hold back on issuing new loans. The truth is that when economic forecasts are grim, conservative bankers become even more fearful than the rest of us.

The bottom line of this article is that confidence matters. So, the next time you hear Ben Bernanke give a speech, you can be confident that he is going to use language that makes you feel more secure. Whether you choose to believe those words is up to you.

Dr. Boyce Watkins is a Finance Professor at Syracuse University. He does regular commentary in national media, including CNN, BET, ESPN and CBS.

For more information, please visit his blog :  www.boycewatkins.com.

A few blogs on consumer confidence I thought you would also enjoy :