MSN Columnist Donna Freedman has a nice piece today called “Scaring Off the Financial Boogeyman,” which looks at deep-seated beliefs that limit our progress to wealth and happiness. She quotes me talking about how to let go of financial fears that set you back, by setting blue-sky goals and listening to that inner voice that tells you why they’re impossible.

What illusions about money are blocking you from grabbing hold of your financial life? Whether your money issue is related to earning, spending or saving, here are eight steps to changing your worldview:

1. Make a radical proposal to yourself around wealth: I want to earn/have/do ______.

2. Listen to the inner voice of protest: You can’t because ______.

3. Challenge your doubts: That objection is false because ______.

4. Identify the beliefs behind them: I thought that way because I believed ______.

5. Examine the origin of the beliefs: I learned that when ______.

6. Revisit the experiences and emotions that gave birth to the beliefs: That lesson took hold when I experienced ______.

7. Challenge the belief system: The belief is untrue because ______.

8. Shift to a new paradigm: The truth is, I can earn/have/do ______ because ______.

We don’t have to be victims of our worldview. The way we manage money, our attitude toward it, is ultimately a choice. No matter what money mind-set we have developed over time through life experience, we have the power to re-shape it. We can work around our money personalities; we can seek out individuals and communities that support our goals rather than hold us back; we can reject negative beliefs we learned in childhood and choose a healthier set of values.

Have you overcome a negative illusion that blocked you from achieving financial well-being? Comment here or email me at laura at laurarowley dot com.

The Wall Street Journal today reports on a study by economists that found that a simple reminder by cellphone encouraged people to save money, boosting savings rates by 6 percent.

The researchers, working with several banks the Philippines, Peru and Bolivia, randomly selected people who had recently opened savings accounts. Some were sent letters, others text messages, urging them to save, in both positive and negative terms. One message in the Philippines warned: “If you don’t frequently deposit into the Gihandom Savings account, your dream will not come true.” 

What I found most intriguing about the study was an upbeat or scolding tone didn’t make a difference; what did was reminding the account holder of their goals, as well as the incentives offered by the bank for making consistent deposits.

In a recent Yahoo!Finance column, I covered research that suggests setting specific goals and then man- aging background cues to support those goals makes a difference in both academic and financial achievement. Prom- inent reminders can focus attention and help people stay on the path to their goals.

Concrete goals — with real price tags and real time frames — are critically important. Dartmouth economist Annamaria Lusardi has found that people who at least try to plan for retirement ultimately end up with more money than those who don’t make a conscious effort.

A few tips: Put a list of your financial goals where you can’t miss them — on the fridge or on the wall above your desk. Put a piece of masking tape on your debit or credit card and write your goals on it to prevent thoughtless spending.  Recruit like-minded friends to support you in your efforts. And most importantly, automate your goals, so the money is swept electronically from your checking account into savings accounts (or into your 401(k) before you receive your paycheck).

My column today on Yahoo!Finance discusses how to manage volatile income. Long-time readers know I often write from direct experience, and that’s what inspired the story. My spouse and I both work for ourseives, and our household income has fluctuated by as much as 100% from year to year.

Everywhere I look I see households experiencing similar income fluctuations: Someone is laid off, or had their hours cut; someone has to stay home with a sick child or a sick parent; someone ends up unemployed for years because of a structural change in their industry — manufacturing, IT, journalism — and goes from full-time employee to full-time contractor for the same company (with no benefits), or cobbles together a living as a consultant or freelancer. As one reader noted: “From what I see, the line between contract employee and direct employee is blurring more and more.”

I interviewed financial planner Mike Masiello of Rochester, New York, for the story. “What we’re seeing is a ton of very talented electri- cal, mechanical and indus- trial engineers who have (lost jobs) as the manufacturing base dwindles,” he says.  ”The difficulty is there really aren’t positions. One guy I knew had two master’s degrees in mechanical and electrical engineering, and was competing for a job against a guy who has two PhDs.”

People with fluctuating incomes have to behave like the biblical Joseph, Masiello says: Store the seven years of bumper crops so you can get through seven years of famine. In good years, overfund retirement savings, and build four to eight months of cash reserves.  Don’t tap home equity, build up credit card debt or cash our retirement savings.

Those are the behaviors of his wealthy clients. “The millionaire-next-doors,” Masiello says (referring to the famous book by Thomas Stanley and William Danko), “are joys to have as clients because they get it. They are not into conspicuous consumption. They have a structured long-term strategy and long-term goals; they know where they are going and have a plan to get there.”

I am a frugal, no-debt kind of person, so I find the lean times fairly easy to manage. (For instance, I just successfully sold an old coffee table on Craigslist. This is not actually a lean time, I just got sick of looking at the thing.) The problem is that while I’m harvesting the bumper crops, I feel richer, and begin to imagine the possibilities — a kitchen renovation, a trip to Paris. The hedonic treadmill is not easily avoided. Managing the psychology around the money is just as critical as managing the money itself.

ah, my dream kitchen

 
I especially liked the advice of Matt Wallert of Thrive.  You need to physically separate the account that your paychecks go into from the account that you use to pay the bills. That way the paychecks can accumulate like water in a reservoir, and you shift over a pre-determined amount each month to cover your expenses. (See the story for more).

Do you have any secrets or insights into managing a fluctuating income? I’d love to hear them.

Creating a successful marriage is hard work. So it’s nice to know you’re getting paid for it. That’s the word from a researcher at Ohio State University, who found that people who walk down the aisle and stay hitched accumulate nearly twice as much wealth as those who are single or divorced.

Economist Jay Zagorsky of OSU’s Center for Human Resource Research, tracked the financial and marital status of more than 9,000 people from 1985 to 2000. Married people amassed an astonishing 93 percent more than single or divorced people over the 15-year period.

Wealth was defined as a participant’s total assets, such as bank accounts, stocks, bonds, and real estate, minus outstanding debt, such as a mortgage. The data came from the National Longitudinal Survey of Youth, a study funded by the U.S. Bureau of Labor Statistics that has repeatedly surveyed the same individuals over time.

According to the report, which was published in the Journal of Sociology, people who married and stayed married showed a sharp wealth expansion after they wed, growing to an average of about $43,000 by the 10th year. For single people, assets grew from less than $2,000 at the start of the survey to about $11,000 by the 15th year.

Those who divorced saw their wealth shrink by 77 percent — a larger decline than would occur by simply splitting a couple’s assets in half.

“You lose economies of scale in divorce — you need two places to live, two cars,” Zagorsky explains. “Divorce is quite expensive, paying for lawyers and court fees. Divorce is also time-consuming. It may take time away from work, which also reduces many people’s incomes.” In addition, divorce weakens the incentive to work harder in the future, particularly if a percentage of income is garnished to pay alimony.

On the other hand, wedded bliss has rich rewards: Married people boosted their wealth by about 4 percent each year just as a result of being married, with all other factors held constant, Zagorsky says.

“For the majority of people, wealth tends to be built up from savings, and savings is the difference between income and expenses,” Zagorsky notes. People who live together spend less and save more. For instance, the Bureau of Labor Statistics tracks actual spending in its Consumer Expenditure Survey. It found that while a single person spends $25,423, a two-person family spent $45,855 — only 1.8 times the amount.

While staying together makes you rich, money is also, ironically, the factor that most frequently puts a union asunder. In a separate study published in the Journal of Socio-Economics, Zagorsky found that women argue with their significant others about money more than any other topic (including love, children, in-laws, leisure, drinking, chores, other women, and religion).

Why? Because they don’t agree on how much money they have. Zagorsky found clear gender differences in how men and women perceive their wealth.

If they have a house and car, for example, the man will tend to focus on the hard assets (what they own), and the woman, on the mortgage and car loan (what they owe). Men typically value the assets higher than women; wives tend to estimate the debts as larger. The researchers were unable to conduct forensic accounting to see who was more accurate in reporting — but the perception differences were real.

For instance, the typical husband says the couple earns 5 percent more income and has 10 percent more total wealth than his wife reports. Meanwhile, she says the family’s debts are $500 more than her husband reports.

Among older couples surveyed, half differed in their wealth estimates by more than $14,700 — and 10 percent different by a shocking $113,000. Among younger couples, half differed in their wealth estimates by $7,000, 10 percent differed by more than $31,000.

The differences could not be attributed to the dated notion that wives were kept in the dark about family finances. Husbands paid the bills in their families only about 40 percent of the time; wives, 60 percent.

Perhaps the most important finding: Couples who didn’t divorce were more in accord on their estimates than couples who divorced. In other words, they knew how to communicate.

So if you want to stay married and enjoy the wealth that accompanies it, sit down with your beloved and open the books before you tie the knot. Such a discussion can reveal things about a potential partner that may justify a case of cold feet. A few suggestions:

-List all of your accounts and look at your combined asset allocation to ensure you’re not overexposed in one area — especially if you work for the same employer and hold company stock in your 401(k).

-Come clean about your debts. Once you’re wed, you’re both legally responsible for them, so decide upfront who will pay them off and on what timetable.

-A clash of money personalities — a spender and a saver, for instance — should be worked out sooner to avoid conflicts later. The spender should try operating on a weekly allowance. To avoid making this partner feel like they’re in third grade, he or she should be able to spend the money on whatever they want. But when it’s gone, it’s gone. (I use Mvelopes.com in my family, which helps in both budgeting and communication with my spouse about money.)

-Once you’re legal partners, get new beneficiary-designation forms for all your accounts. Consider life insurance if you have large debts or a sizeable mortgage; buy it as soon as you’re expecting children.

-Open a joint checking account to pay the big household bills (contribute the same amount or percentage of income), and keep individual accounts for personal spending. Talk about how much is O.K. to spend without consulting your partner.

One upbeat note from Zagorsky’s research: Bickering about money diminished significantly over time. Because when you’re getting rich, who needs to argue?