QA With Personal Finance Author Farnoosh Torabi

Is true wealth really only in your head? Can you banish debt and live prosperously just by changing your beliefs? Cue national personal finance authority Farnoosh Torabi. She's the author of the new book "Psych Yourself Rich" and contends that with an attitude adjustment, anyone can achieve success. talked with Torabi (who would scrub down bathrooms for cash if she ever found herself broke) to find out how transforming ugly, entrenched money perceptions and making a few sacrifices can result in a more beautiful net worth. Everybody seems to want to be wealthy, but few really achieve it. Do you think the problem is that people are simply content to appear and feel rich through borrowing?

Farnoosh Torabi: That may be part of it. We are the "lend and spend" nation, after all. Though, largely, I think the problem stems from not really understanding what wealth means and how, once you've achieved it, to secure it.

The first chapter of "Psych Yourself Rich" addresses the notion of "rich" and our often misguided pursuit of wealth, thinking that rich is fancy cars, big homes, a huge salary or millions of dollars -- even if it's borrowed dollars. That's what I call the superficial definition of rich -- and it tends to be what our society focuses on and celebrates in the media. But if you accept and embrace wealth to mean financial security and all that goes with it (savings, insurance, goals, communication, etc.), then I think you may actually have a shot at achieving it and, more importantly, holding onto it. Speaking of your book, what are the three most important points you make -- what you really hope readers walk away with?

Torabi: If I had to pick just three, I'd say: 1) accept that no one cares more about your money and your financial well-being than you; 2) the true definition of rich is financial security, not accumulation; and 3) having a healthy relationship with money means being in control, feeling secure and respecting your goals. Who cares what your neighbor's driving? Did you personally learn or gain anything during your research?

Torabi: I learned how so much of our financial blueprint is drafted in adolescence, and how huge a role parents and teachers play in shaping our views on money and our relationship with money. It's turned me into an even bigger advocate for financial literacy in both school and home. Still, I don't know a single financial expert who doesn't have their own personal struggle with some aspect of money or credit management. Spill it: What are yours?

Torabi: I don't have any debt -- besides my mortgage -- but when it comes to spending, I am not always as savvy as I could be. I can be an impulsive shopper. Once or twice a year (usually after a big payday or my birthday), I may shop on a whim without researching or comparison-shopping ... and to justify my purchases, I might buy a couple of things for my fiance, too, to help minimize my guilt. It's all about mindset, right? But that's the tough part -- adjusting the way you think about money. Where does the motivation to change come from?

Torabi: The motivation has to come from within. No one is going to hold your hand and walk you through the necessary steps. I think if you can visualize your goals, tackle your fears and reflect on the achievements of others you respect, all of that can help you achieve motivation. When we understand what it is we truly seek in life, what is meaningful to us, how we can make change in spite of our fears and learn from how others have made a difference, we build the motivation to make our own behavioral changes. A November 2010 study revealed that about 8 million Americans have recently opted out of the credit cards world altogether. What do you make of that -- temporary blip or permanent shift?

Torabi: It's difficult to forecast. Among those 8 million Americans, there are, without a doubt, some who have been forced out of the credit market. They've maxed out their cards, gone into default and can no longer qualify for more credit. For them, they had no choice. And I'm sure some will be back for seconds once they can qualify for new lines of credit. Others may have made a conscious effort to opt out, as you say, and have truly kissed the credit card world goodbye. I have a feeling those folks are more likely to stick to their actions.

That said, this recession has had such a damaging impact on people's financial lives, and the changes people have made -- either willingly or not -- will last for a lot longer than "temporarily." The recession, although technically over, still haunts those of us who've lost our jobs, our homes and our savings. Because the pain has lasted so long, people won't easily forget their mistakes. Let's play pretend. Imagine you lost your income source, had no savings or insurance, and couldn't pay your bills. What would you do? How would you stay positive?

Torabi: For me, to stay positive I need to stay in control and know that my life is moving forward. I need to feel like I'm making progress, even if I've just hit rock bottom. And let's face it, if you've hit rock bottom, there's nowhere to go but up.

I would begin by dividing and conquering my time, working odd jobs (seriously, whatever it would take; I'm not beneath scrubbing toilets) and networking and volunteering to meet the people that may be able to connect me to better work. I might have to crash on a friend's couch for some time (and I would scrub her toilets in exchange, among other household chores). If I got really desperate, I would make a point to meet regularly with a credit counselor to help get my bills situated. Making money, building my networks, finding a place to crash and getting professional help ... these are the things that are within my power to accomplish in a hell-on-earth situation, and so I would address them first. Once you are on the path to a better financial life, how can you maintain the progress? Any tools, like good apps, software or books to recommend? Can social media help?

Torabi: Help is important, and we're lucky that with the advent of technology and social networks, we can track spending, see where our money is going and connect with friends and family for advice --  instantly. I recommend using free online software to track your spending and budgeting such as and Apps such as BillMinder and CouponSherpa can also come in handy when you're on the go. BillMinder helps remind you of your bills. CouponSherpa comes in handy when you're shopping and want to find in-store coupons based on your location. It saves the hassle of coupon cutting.

Social media -- being that it helps us stay connected and communicate with people -- is also a potential resource for getting ahead with your finances. is one bank that is incorporating social networks to help its savers communicate their savings goals on Facebook. That way, family members can get in the loop and might interest them in contributing to your savings goal, instead of buying you something random for your birthday, for example.

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