FINANCIAL RECOVERY FINANCIAL RECOVERY Developing a Healthy Relationship with Money KAREN McCALL Foreword by JOHN BRADSHAW New World Library Novato, California Copyright © 2011 by Karen McCall All rights reserved This book may not be reproduced in whole or in part, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, or other — without written permission from the publisher, except by a reviewer, who may quote brief passages in a review MoneyMinder® is a registered trademark of Karen McCall Text design by Tona Pearce Myers Library of Congress Cataloging-in-Publication Data McCall, Karen Financial recovery : developing a healthy relationship with money / Karen McCall ; foreword by John Bradshaw p cm Includes bibliographical references and index ISBN 978-1-57731-928-3 (pbk : alk paper) Finance, Personal Money Finance, Personal—Psychological aspects Money—Psychological aspects I Title HG179.M37414 2011 332.024—dc22 2011006703 First printing, May 2011 ISBN 978-1-57731-928-3 Printed in Canada on 100% postconsumer-waste recycled paper 10 To Frances and Vincent Kreizenbeck: Aunt Fran and Uncle Binnie, you gave me a home, you gave me your love, you saved my life From the bottom of my heart, I thank you To honor the confidentiality of my clients, I have changed names and other identifying details The essential truths of their circumstances and the insights they gained during their process of Financial Recovery are authentic and reflect the dilemmas and discoveries made by many clients with whom I’ve worked over the years In the cases where last names are used, these are professionals who have agreed to share their stories and to be identified Contents Foreword by John Bradshaw INTRODUCTION The Bridge to a Healthy Relationship with Money CHAPTER Understanding Your Relationship with Money Getting to the Root of the Problem CHAPTER Déjà Vu All Over Again Does Your Relationship with Money Plunge You into the Money/Life Drain? CHAPTER Healing the Wounds of Shame and Deprivation The Key to Understanding Your Needs, Wants, and Deepest Desires CHAPTER Getting on Track The Key to Becoming Conscious of and Connected to Your Money CHAPTER Creating Your Personal Spending and Income Plan The Bridge from Where You Are to Where You Want to Be CHAPTER Saving Your Way Out of Debt Fixing Your Past, Living Your Present, Securing Your Future CHAPTER Your Relationship with Work and Earning Is Your Work Working for You? CHAPTER Imagining Sterling Money Behaviors Claiming the Life You Were Meant to Live Appreciations Notes More Support for Your Financial Recovery Process Index About the Author Foreword am honored to introduce Karen McCall’s book Financial Recovery to readers Having Iexperienced severe poverty in my childhood, I lived the next forty-five years compulsively working and catastrophizing about money By 1979 I was psychologically counseling fifty-plus hours a week, I was giving frequent seminars for one chemical and two oil companies, and I was directing the Palmer Drug Abuse Program in Los Angeles from my home in Houston In 1980 I was asked to be on the board of directors of Texas General Oil Company, and they appointed me director of human resources As with many of the people whose stories Karen shares, my financial problems were about more than just sound money and debt management; they were about the fear that I would never have enough I would spend rather lavishly at times, but then I would be ravaged by guilt and driven by a feeling of scarcity I was clearly addicted to making money One of the central themes of this book is that financial problems stem from an unhealthy relationship with money, and this was certainly the case for me In August 1981 I was spending a week in a small cabin that I owned in Minnesota In those days, I was jogging about five miles a day, four times a week On the 13th of August I set out on my daily run I was quite energized, and before I knew it I had run ten miles and was headed toward a little town called Pequot Lakes I felt high, in what experts on creativity call the “flow.” Those who run long distances talk about reaching a state that they describe as an endorphin high Whatever it is called, I was quite moodaltered I felt that I could run forever As I ran to Pequot Lakes, I looked out at the horizon and saw what seemed to be a cloud formation that outlined the face of Christ I immediately experienced an auditory intuition that clearly gave me the message, “Do the work that you were intended to do, and your money worries will cease.” I was deeply moved and quite perplexed by the experience Although I’d had a strong religious upbringing and studied to be a Catholic priest, at that time I was in a serious state of questioning Christianity, and I had not been to church in years In my latest book, Reclaiming Virtue, I named my experience of jogging on the highway to Pequot Lakes a “grand will” experience I borrowed this expression from the Jewish philosophertheologian Martin Buber, who believed that each person has a unique purpose or calling He believed that when a person makes a choice consistent with their “grand will” (as opposed to their mundane, everyday choices), they are furthering their calling or life purpose This is heavy stuff, but it is fully related to the issue of money The work we do, our life vocation, is the source of income that provides our security, happiness, and freedom Karen McCall has made the issue of knowing what you need, want, and desire one of the most critical factors in choosing the work you After my “grand will” experience in 1981, I took part in some very serious therapy that helped me grasp many of the things that Karen has learned through her own suffering and has discussed in this book Chapters and are the real gems for me; they reinforce the insight I gained in my “grand will” experience: that a critical issue in working with and handling money is choosing the work that flows from our “deepest needs and real wants” (what Buddha called “right livelihood”) I found that the work I was “intended to do” was teaching — specifically, to help people grasp the impact of their childhood abandonment, neglect, and abuse wounds and to teach them how to overcome them In 1984,I filmed a ten-part PBS series called Bradshaw On: The Family These programs showed people the impact of family dysfunction and the tools to heal it I filmed five more PBS series and wrote six books, one to go with each series By 1992, I was a millionaire many times over The strange thing is that from 1985 until now I have stopped thinking, worrying, and catastrophizing about money Chapter of this book dovetails beautifully with my work regarding childhood abuse, neglect, and abandonment and the shame that naturally follows In all the work I’ve done on this subject, I never fully explored the piece of the puzzle that relates to our money behaviors Karen has picked up where I left off, illuminating the financial consequences of childhood shame and how we can heal the shame and establish “sterling money behaviors.” The wealthiest and most generous people in our culture share the belief that happiness does not come from the raw accumulation of money Those who desire to accumulate more and more money are involved in an addictive process — a kind of endless pregnancy that never reaches fruition People who have financial success have a healthy relationship with money — the kind of relationship that Karen McCall describes in this timely book Large numbers of people have money troubles This book and the Financial Recovery Institute that Karen founded could help these people immensely After reading this book or attending a Financial Recovery seminar, you will quickly realize that you can transform your creative energy into security and financial freedom I urge you to give yourself the gift of reading this book and discovering the road map Karen presents I would not say that Financial Recovery will necessarily make you a millionaire, and Karen is not promising that either Being a millionaire does not guarantee financial happiness; achieving true happiness is about much more than making masses of money Karen’s book will show you how making money and enjoying healthy relationships go hand in hand — John Bradshaw, bestselling author of Reclaiming Virtue and Healing the Shame That Binds You reward programs, 202–3 statements, in spending plans, 125 tracking, 107, 114 uncontrolled use of, 28 zero balances, 201–2 See also debt Credit Card Tracker, 114, 125 credit counselors, D debit cards, 74, 193 debt author’s experience, 177–78 as burden, 171–72, 206 case studies, 33–35, 181–83, 193–94 chronic, 54–56, 68, 239 credit card, 18, 173 eliminating, 173, 201–3 exercises, 176, 195–96 negotiation skills and, 56 overspending and, 49–52, 54 reducing, 186–87, 194–99 relationship with, 175–76 repayment of, in spending plans, 131, 137, 187–88, 191–93 saving and, 12, 183–84, 188, 191 stabilizing, 185–88, 191, 194 staying out of, 174–76, 240 from vacations, 118–19, 190 “yo–yo debbting,” 42–43, 174, 205 205 See also credit cards; debt pyramid; Saving Your Way Out of Debt debt dis–ease, 172–73 Debtors Anonymous (DA), 5, 261 debtors’ prisons, 206 debt pyramid, 184, 185 eliminating debt, 201–3 reducing debt, 186–87, 194–99 savings pyramid and, 192 stabilizing debt, 185–88, 191, 194 debt–reduction programs, 184–85 denial, 26–27, 100 dependent care expenses, 130, 136–37, 136 deprivation case studies, 70–71, 73–75 defined, 63–64 destructive money behaviors caused by, 61–63 identifying areas of, 69–70, 94, 111 income level and, 65 internalized sense of, 65–69, 74–75 signs of, 70–76 tracking and, 111 See also needs; wants desires, 94–95 Dianne (case study), 219–21 disability insurance, 200 doing without, 70–71, 76 “Do I Really Need This?” Challenge, 83–85 Donna (case study), 109–10 “Do No Harm” spending, 123, 128 drug abuse, 41 E earning author’s experience, 208–9 case studies, 226–29 ceiling, 223–26 exercises, 212–13, 224–25 family history as influence on, 210–13, 227–28 relationship with, 207–8, 217–23, 235, 240 underearning, 44–48, 66, 68, 209, 227–29, 230, 239 windfalls, 230–31 See also income; work Earning Ceiling Meditation, 223–24 easy–pay plans, 99 eBay, 49 economic downturn (2008–), 23, 199, 229 education expenses, 131 Eliot, George, 245 Elliott, Walter, 247 Emerson, Ralph Waldo, 24 Emily (case study), 181–83, 186, 193–94, 198 “enough,” defining, 247–48 entertainment expenses, 130, 134–35, 135, 147, 148 estates, 21 Evaluating Your Current Work (exercise), 216–17 exercises Are You Caught in the Money/Life Drain?, 57–59 Beginning to Understand Your Relationship with Debt, 176 Beginning to Understand Your Relationship with Savings, 179–80 Create the Life You Desire — and Deserve, 250–51 Creating a Needs and Wants List, 85–87 Evaluating Your Current Work, 216–17 Finding Your Earning Ceiling, 224–25 how to use, 13 Uncovering Family Messages about Work and Earning, 212–13 What’s Not Working?, 31 What Would Success Look Like for You?, 32–33 Your Fearless Financial Inventory, 195–96 Your Work History Inventory, 214–15 expenses categories/subcategories of, in spending plans, 126–38, 164 estimated vs actual, 159–62 lifestyle and, 167–68 Money/Life Drain and, 40 periodic (nonmonthly), 164, 188, 190–91 planning, 73–74 recording, 153, 154 reducing, in spending plans, 144–48 tracking, 100 types of, 116 unanticipated, 160, 183–84 See also spending; specific category or type F family loans from, 40 messages about work/earning, 210–13, 227–28 fear, 100 Fearless Financial Inventory (exercise), 195–96 fee collection, 233 financial dis–ease, 11, 25–28, 31, 62 financial downturn (2008–), 23, 199, 229 financial fog, 98–100, 169, 239 financial health, 243–46, 251 financial planners, Financial Recovery author’s experience, 7–8 benefits of, 6–7, 10–11, 86 birth of, 5–7 case studies, 33–35 defined, 8–10 emotional benefits of, 238, 245–46 exercises, 32–33, 243–44, 250–51 financial stability obtained through, 238–40 foundation of, 95, 174 goal of, 5–6, 29, 32–33 My Financial Recovery Declaration, 240, 241, 243, 244 personal healing through, 68–69, 105 recovery aspect of, 121 resources, 261–62 self–sabotage in, 155–56 setbacks in, 242–43 steps in, 11–13 successful, 237–38 sustainable change through, 246–47 as way of life, 240–43 See also specific step Financial Recovery Declaration, 240, 241, 243, 244 Financial Recovery Institute, 101, 113, 125, 261–62 financial stability, 238–40 Financial Wisdom of Ebeneze Scrooge, The (Klontz, Kahler, and Klontz), 48 Finding Your Earning Ceiling (exercise), 224–25 Fisher, Carrie, 61 Fisk, Molly, 68 food expenses, 130, 132–34, 141, 154, 160–62, 161, 165, 166 401(k)s, 203–4 Franklin, Benjamin, 157, 171 “freedom fund,” 200–201 frugality, 72 G Gibran, Kahlil, 81 gifts, 131 Givens, Charles, 204 Golden Gate Bridge (San Francisco, CA), 7–8 guilt, 211 H healing, personal, 68–69 Healing the Shame That Binds You (Bradshaw), 66–67 health debt and, 171–72 Money/Life Drain and stress on, 41 tracking and, 112 healthcare expenses, 71, 130 Hierarchy of Human Needs, 77–79, 78, 85, 129, 184 Hitchcock, Alfred, 99 home expenses, 130, 132, 133, 140–41, 168 home office expenses, 131 I impulse buying, 82, 107, 111, 160, 193, 201–2 income estimated annual, 164 increasing, 219 interruptions in, 188, 200–201 recording, 153 in spending plans, 131, 137, 139–40, 148–49, 153, 164 tracking, 100, 114 inheritances, 10, 44–45, 227, 228, 230–31 insomnia, 41 installment plans, 99 instant gratification, 81–82 insurance expenses, 131, 168, 194 interest, 55, 111, 202 Internal Revenue Service (IRS), 56 internet shopping, 52–53, 99 investments, 131, 188, 203–5 IRAs, 203–4, 205 J Jackson, Michael, 38 James (case study), 221–22 Joanna (case study), 218–19 jobs changing, 222–23, 234–35 leaving, 201 past, inventory of, 213–16 salaried, 234–35 Joe (case study), 17–18 Josh (case study), 49–51 journal See money journal Joyce, James, 156 Julia (case study), 19 K Kafka, Franz, 89 Kahler, Rick, 48 Klontz, Brad, 48 Klontz, Ted, 48 Krueger, David, 21 Kübler-Ross, Elisabeth, 251 Kupferberg, Tuli, 37 L late fees, 55, 111, 147 leisure time, 111 Lewis, C.S., 69 lifestyle, and spending plans, 167–68 Lila (case study), 33–35 living expansively, 13 loans debt and, 173 Money/Life Drain and, 40 payment of, 111 Lorimer, George, 97 Lydia (case study), 52–53 M Maggie (case study), 46–47 making do, 71–72, 76, 92 Marilyn (case study), 70–71 Maslow, Abraham, Hierarchy of Human Needs, 77–79, 78, 85, 129, 184 McClure, Mary Beth, 67 McGraw, Phil, 103 Melanie (case study), 42–43, 205 memory, and tracking, 116–17 Mexico, Gulf of, oil spill in (2010), 66 Michael (case study), 226–29 money consciousness of/connection with, 29, 97, 239 “enough,” 247–48 meaning attributed to, 20–21 “not enough,” 20, 247 secrecy about, 103–5 work and, 12, 207 money behaviors deprivation as cause of, 61–63 sterling, 13, 248–51 money coaches, 158 money coma, 11, 99–100 money journal, 13, 33, 85–87, 214, 224–25 Money/Life Drain, 23, 40 author’s experience, 38–39, 62 behaviors leading to entrapment in, 43–44, 242 case studies, 42–43, 44–45, 46–47, 49–51, 54–55 chronic debting, 54–56 defined, 11, 37 deprivation and, 62 entrapment in, 39–42 escape from, 56–59, 238 exercises, 57–59 overspending and, 49–53 underearning and, 44–48 windfalls and, 231 MoneyMinder Personal Money Management System, 113, 125, 127, 142, 164, 262 money mindfulness, 10, 57, 106 money relationships, healthy clarity as foundation of, 97 internal transformation through, 94–95 modeling for children, 235–36 needs–meeting as sign of, 63, 121 work/earning and, 235 money relationships, unhealthy author’s experience, 1–4, 16, 68 case studies, 17–19 changing, 16–20, 29–33 compassionate consideration of, 24–25 effects of, 15 exercises, 31, 32–33 external circumstances and, 23 financial dis–ease, 25–28 identifying, 29–31 inability to change, 28 recurring patterns in, 21–24, 239 mortgages, 173 Moss, Charlotte, 249, 250 Move Ahead with Possibility Thinking (Schuller), 2–3 Muir, John, 61 My Financial Recovery Declaration, 240, 241 N needs advertising and, 88–89 case studies, 91–93 evolving, 87–88 exercises, 85–87 identifying, 69–70, 76–79, 80, 83–85, 174 intangible, 81 Maslow’s hierarchy of, 77–79, 78, 85, 129, 184 meeting, 63, 87, 89–91, 121, 240 pleasures/comforts as, 82–83 in spending plans, 129 time sensitivity of, 93 unmet, 73, 80, 90–91, 111, 126, 204 wants vs., 11, 49, 56, 62–63, 69–70, 79–85, 150–239 Needs and Wants List, 85–87, 126 neglect, 65 Nelson (case study), 91–93 noble poverty, 48 O obsession, 19, 27, 40 “oh wells,” the, 157–58, 242 Overcoming Underearning (Stanny), 47 overdoing, 73–76 overindulgence, 65 overspending, 49–53, 66, 157–58, 239 overtime, 234 P parenting, 10 Passion for Detail, A (Moss), 249 perfectionism, 117–18, 156–57 possibility thinking, 2–3 poverty, noble, 48 “power paying,” 196 Psycho (film; 1960), 99 R raises, 209, 231, 234 Ray, Danielle, 67 “rear–view mirror accounting,” 123–24 Rebecca (Financial Recovery client), 108 recession, 23, 229 relationships, personal Money/Life Drain and stress on, 41 spending plans and, 122 tracking and, 111–12 work/earning and, 226–29 retirement, 23, 203–5 reward programs, 202–3 Rickey, Branch, 121 S saving(s) author’s experience, 177–78 debt and, 12, 183–84, 188, 191 economic downturn (2008–) and, 23 exercises, 179–80 inability to accumulate, 41, 177–79 long-term investments, 188, 203–5 need for, 160, 179 periodic (nonmonthly), 188, 189–93, 240 prioritizing of, 191 relationship with, 179–80 safety–net, 188, 199–201, 240 in spending plans, 131 See also savings pyramid; Saving Your Way Out of Debt savings accounts funding, 191–93 periodic (nonmonthly), 189–93 safety–net, 200–201 savings pyramid, 188, 189 debt pyramid and, 192 long–term investments, 188, 203–5 periodic savings, 188, 189–93 safety–net savings, 188, 199–201 Saving Your Way Out of Debt, 240 benefits of, 206 case studies, 181–83, 186, 193–94, 198, 205 rationale for, 180–81 success of, 174–75, 201 See also debt pyramid; savings pyramid Schuller, Robert H., 2–3 secrecy, 24, 27, 103–5, 172, 239, 242 Secret Language of Money, The (Krueger), 21 self–care expenses, 130 self–employment challenges of, 231–34 disability insurance and, 200 economic downturn (2008–) and, 199–200 Financial Recovery, 209 fluctuating income in, 139–40, 152 quarterly taxes, 194 spending plans, 152, 194 underearning in, 44 self–esteem, 112 self–judgment, 24–25 self–neglect, 65, 72 self–reflection, 29 self–respect, 238 self–sabotage, 155–56 senior citizens, setbacks, 242–43 shame, 62, 63–64, 65–69, 72, 172, 230 Sheehan, George, 237 shopping daily, 110 online, 52–53, 99 social, and overspending, 157–58 simplicity, 11, 23 skills, valuing, 233 small businesses, 10, 131, 209 Sonya (case study), 54–55 special occasions, 125, 168 spending “Do No Harm,” 123, 128 as overdoing, 73–76 overspending, 49–53, 66, 239 reckless, 20, 156, 230 sneaky tricks, 117 tracking, 100–101, 174 on wants, 63 See also expenses spending plans, 12 adjusting, 143–51 148, 198–99, 228 annual, 163–68, 166 benefits of, 121–22, 169 budgets vs., 123 case studies, 128 categories/subcategories in, 126–38, 164 challenges, 155–58 connection with, 151–58 designing/maintaining, 122–25 as earning plans, 167 failure to create, 242 income in, 131, 137, 139–40, 148–49 materials needed for, 125–26 month–end reviews, 159–62 monthly estimates, 138–42, 140–41,190–91, 240 spending plans (continued) possibilities opened up by, 162–63 savings and, 191–93 as self–discovery tool, 159 workability of, 142–43 spiritual growth expenditures, 129, 130, 132, 140 spiritual insight, 112 Stanny, Barbara, 47 sterling money behaviors, 13, 248–51 Streisand, Barbra, 15 stress, 112, 171–72 student loans, 173, 182, 194 suicide, 172 Susan (case study), 128, 149–51 Sweeney, Paul, 99 T taxes preparation of, 111 quarterly, 194 in spending plans, 131, 168 unpaid, 56 Thomas (case study), 44–45, 47 time, spending plans adjusted for 150–51 Tomlin, Lily, 97 tracking, 11–12, 174, 239 benefits of, 100–101, 105–12, 119, 193 case studies, 106–7, 109–10 defined, 100 goal of, 108 how to do, 112–16, 115 income level and, 108 neglecting, 242 recording from, 153 resistance to, 102–5 in spending plans, 125, 153, 154 tips for, 116–19 unknowns in, 115, 117–18 transportation expenses, 130 travel expenses, 130, 160 trust funds, 10 U Uncovering Family Messages about Work and Earning (exercise), 212–13 underearning, 44–48, 66, 68, 209, 227–29, 230, 239 United States credit card debt in, 173 debtors’ prisons abolished in, 206 as nonsaving nation, 177 V vacations, 118–19, 130, 168, 190 Valerie (case study), 17–18 Valterra, Mikelann, 23, 101 values–based life, 94–95, 249, 251 W wants desires vs., 94 exercises, 85–87 identifying, 174 as instant gratification, 81–82 needs vs., 11, 49, 56, 62–63, 69–70, 79–85, 150, 239 spending on, 80–81 What’s Not Working? (exercise), 31 “what the hells,” the, 157 What Would Success Look Like for You? (exercise), 32–33 Why Women Earn Less (Valterra), 101 windfalls, pitfalls of, 230–31 Women’s Earning Institute, 101 work author’s experience, 208–9, 232 bidding for, 233 case studies, 218–22 current, evaluating, 216–17 entrepreneurial vs traditional, 231–35 exercises, 212–13, 214–15, 216–17 family history as influence on, 210–13 meaningful, 213–14 money and, 12, 207 pressure for more, 41 relationship with, 207–8, 217–23, 235, 240 underearning in, 44–48, 66, 68 windfalls and, 230–31 See also earning; income; self–employment Work History Inventory, 213–16, 232 Y Your Fearless Financial Inventory (exercise), 195–96 About the Author aren McCall developed the highly acclaimed Financial Recovery process after she struggled for Kyears to heal her own crippling relationship with money In 1988 she created Financial Recovery, and ten years later she founded the Financial Recovery Institute, which trains and certifies mentalhealthcare professionals and entrepreneurs to use the counseling processes and practical tools of Financial Recovery to help people transform their relationship with money and create lifelong financial wellbeing A nationally recognized speaker and financial expert, Karen has been quoted in publications such a s Entrepreneur, Money magazine, Kiplinger’s Personal Finance, Bottom Line, Women’s Day, Working Mother, and USA Weekend She is the author of It’s Your Money: Achieving Financial Well-Being, a contributor to I Shop, Therefore I Am: Compulsive Buying and the Search for Self (edited by April Lane Benson), and the creator of several MoneyMinder® software products Karen lives in Sonoma County, California, where she spends her limited spare time gardening and spoiling her grandchildren We are a socially and environmentally aware company, and we strive to embody the ideals presented in our publications We recognize that we have an ethical responsibility to our customers, our staff members, and our planet We serve our customers by creating the finest publications possible on personal growth, creativity, spirituality, wellness, and other areas of emerging importance We serve New World Library employees with generous benefits, significant profit sharing, and constant encouragement to pursue their most expansive dreams As a member of the Green Press Initiative, we print an increasing number of books with soy-based ink on 100 percent postconsumer-waste recycled paper Also, we power our offices with solar energy and contribute to nonprofit organizations working to make the world a better place for us all Our products are available in bookstores everywhere For our catalog, please contact: New World Library 14 Pamaron Way Novato, California 94949 Phone: 415-884-2100 or 800-972-6657 Catalog requests: Ext 50 Orders: Ext 52 Fax: 415-884-2199 Email: escort@newworldlibrary.com To subscribe to our electronic newsletter, visit www.newworldlibray.com .. .FINANCIAL RECOVERY FINANCIAL RECOVERY Developing a Healthy Relationship with Money KAREN McCALL Foreword by JOHN BRADSHAW New World Library Novato, California Copyright © 2011 by Karen McCall. .. McCall, Karen Financial recovery : developing a healthy relationship with money / Karen McCall ; foreword by John Bradshaw p cm Includes bibliographical references and index ISBN 97 8-1 -5 773 1-9 2 8-3 ... career, family, self-image, political influence, and so on Doesn’t it make sense to have as healthy a relationship with it as possible? SITUATIONAL PROBLEM OR UNHEALTHY PATTERN? Anyone can have