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Your money how your money story can help your finances


´╗┐Here is some personal finance advice you don't hear very often: forget the numbers. That is the advice of Sarah Newcomb, behavioral economist for Chicago-based research firm Morningstar Inc, whose new book "Loaded" is now hitting the shelves and Kindles. She preaches this because before you can get into the nitty-gritty, like monthly budgeting, you need to understand why you spend what you spend, earn what you earn and believe what you believe. Reuters sat down with Newcomb to talk about why your own personal "Money Story" is so important. Q: What is your 'Money Story'?A: I had a lot of debt, I overspent, and basically lived hand-to-mouth for years, with no savings at all. I had no money for college and had to pass up my dream school because the price tag was too high. Money had always been a barrier to my hopes and dreams, and as a result, I came to hate it. Eventually, I ended up taking a course on psychology and financial planning, which addressed how your personal relationship with money affects how you see yourself. At that point, a lightbulb really went on. I realized if I always saw money as an enemy, I was never going to be comfortable making a good living. My own 'Money Story' was that either you care about people or you care about money, and you have to choose sides. I chose people, which meant I ignored money, and made my financial life a mess.

Q: What are a few common money-related stories that many people tend to have?A: Some people believe that money is the root of all evil. Some believe that your net worth is connected to your personal worth. Some believe that money makes the world go round. Some believe that if you follow the money, you discover that everything in life is corrupt. Some believe that you have to achieve financial status in order to belong. Ultimately, though, everyone's Money Story is unique. Q: Once people unpack their own Money Story - then what?

A: This is where behavioral finance offers great hope, because there are really specific things you can do to change money behaviors. For instance, if you are focused too much on today and not saving enough, you can do visualizations about the future. Imagine yourself at 65, 70, 75, and how you want to be spending your time. The more detail you put into that picture, the more you trick your brain into believing that the picture is real. Q: Since we all want to earn more, how can behavioral finance help people do that?A: When people think about budgeting, they usually think about money coming in from somewhere else. Instead, start to think of yourself as the source of multiple income streams. For instance, I knew a guy who used to be a wrestler, and who played music on the side. So he started turning those things into real value: he offered a few guitar lessons a month, and taught wrestling to local kids.

Everyone has resources like that going unused. Maybe you just have an extra room in your home that you can rent out to a college student. If you are creative, you can create several new income streams in your life without much effort. Q: What about the spending side of the equation? How can people get that under control?A: Recognize that all expenses are serving a need. So instead of just slashing expenses and then feeling angry and deprived, figure out how to meet those same needs while spending less money. For example, many people spend a lot of money going out to bars and restaurants. They are meeting a social need - spending time with their friends - but they are paying money to do it. You can meet the same social need by doing something cheaper, like hosting a potluck. With simple life changes like that you can be just as satisfied, but spend way less. Q: So what is the happy ending of your Money Story?A: I care about people and I care about being financially healthy at the same time. I can earn a good living and not feel guilty about it.

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Your money the dharma of dollars what buddhism says about money and meani


´╗┐(The writer is a Reuters contributor. The opinions expressed are his own.)By Chris TaylorNEW YORK Aug 25 Buddhism, which holds that wealth is temporary and no path to happiness, might not sound like the best source for money wisdom. Not so, says Ethan Nichtern, the prominent Buddhist teacher, who has written a new book, "The Road Home," on self-awareness and spiritual seeking. Money is unavoidable and it is people's attitude to it that causes worry and stress, says Nichtern, who sat down with Reuters to discuss how money fits into a spiritual approach to the world. Q: Can we escape our connection to money - or should we?A: We need to have some kind of system for measuring how we consume, produce, and share. So there will always be money in any complex society. And any human who wants to pay the rent has to learn the rules of budgeting. But it's not just a necessary evil. Money can also be spiritual or divine, by powering whatever positive activity you want to engage in. Q: You were raised in money-centric New York City. Did that shape your views?

A: Growing up on the Upper West Side and in the East Village, I certainly realized how important money was. It determines so much of the structure of our world, and it also brings so much stress along with it. Especially in New York, people feel burdened by the need for the security and status that money brings. That's why we all need to open up and have this conversation. I've never had the (billionaire) Koch Brothers in my class, though - that could be awkward. Q: Why is money seen as the solution to all our problems?A: In life, we are all wandering around in circles, thinking that our next stop will be exactly what we have always been looking for. But we never arrive - it's an illusion of an oasis. It is the same thing with materialism: The idea that 'If I get the right stuff, I will finally feel at home.' But we can never acquire enough stuff.

Q: Why are we so dependent on something so abstract?A: First money was gold coins, then it was paper, and at a certain point it just became computer files. Money has become more and more abstract, and we are basically just agreeing that this is the way things are. But that doesn't make it any less powerful. Even though it is abstract, we cling to it as part of our identity. Q: People's foremost money worry is retirement. How can we deal with that anxiety?

A: Buddhism teaches about cause and effect. So by all means, prepare for retirement. There is nothing wrong with that. But the other way to look at it is, if the mind is insecure, then no amount of money will ever make us feel safe. Even if you saved $50 million, you would just worry about something else, like getting cancer or having a car accident. Just try to remember that everyone else on earth has a similar anxiety. Then you won't feel so alone. So plan well, and then let go. Q: How can people use money as a positive tool?A: We are taught to use money in ways that isolate us. But money is an exchange. If there was only one person in the world, you could be a trillionaire, but it wouldn't even matter because all that money would be worthless. Think about how money connects you to other people. From a Buddhist standpoint, you should think about how to use that money to empower others. Q: Any final messages about the possibilities of money?A: You can be an awakened human being, and also make a living at the same time. When people say money is dirty, then they are just leaving it all to people who don't have any spiritual practices or values. That is an abdication of our responsibilities. Those of us with compassion actually need to go deeper into these arenas. With money, we can empower some very meaningful things in the world.