Do you know someone who is really smart, but makes really dumb decisions when it comes to money?  These individuals are likely to be successful in other endeavors, but their financial lives are out of kilter.  Here are a few examples:

  • Joan has a great job and earns a six-figure salary. Even though she gets a generous raise each year, she can’t seem to be able to save and invest for her future.
  • Three years ago, John received a large inheritance from his grandmother. If well managed, her generous gift could provide John financial security for the rest of his life.  However, he feels anything but secure.  The responsibility of financial stewardship has challenged his self-confidence and triggered anxiety attacks and depression.
  • Tina recently graduated from law school and landed a position in a top firm in San Francisco. Although she was offered a very competitive starting salary, she finds that it is inadequate to meet her living expenses, car payments, and student loan payments.  After all the sacrifices she has made to reach this career goal, she is angry and frightened about her financial outlook.
  • Tim wants to micro-manage the family budget and it is driving Karen crazy. They have been married five years, and Tim’s attention to their money matters is becoming increasingly obsessive.  To assert her independence in this relationship, Karen frequently goes on shopping sprees.
  • Ken checks the market several times a day. On down days, he is filled with anxiety about his shrinking retirement nest egg.  Recently, after several days of steady declines, the Dow precipitously dropped another 300 points.  Ken immediately called his broker and demanded that she sell every one of his investments and put the proceeds into a money market.

You yourself can probably relate to one of these descriptions because nearly everyone has or has had a complex and difficult relationship with money.  As these examples illustrate, “financial success” depends on a lot more than on how much money you have!!

On this note, Money Quotient® (M.Q.®) is a measure of your financial well-being that represents a composite of both your financial knowledge (I.Q.) and emotional intelligence (E.Q.).  In short, your M.Q. can be expressed by this simple formula:

I.Q. + E.Q. = M.Q.

The concept of M.Q. is unique because, rather than using your net worth as a “picture” of your financial health, M.Q. takes a more holistic approach by examining both the fact and feeling aspects of your financial life:

  • Fact—The I.Q. part of your financial equation is all about learning the basics of sound financial planning. This will equip you to make wise decisions about how you spend, save, and invest your money, and help you to work effectively with your financial advisors.
  • Feeling—The E.Q. part of your financial equation is all about your understanding of the emotional factors that influence your money attitudes, beliefs, and behaviors. This awareness will give you the extra edge you need to achieve your personal and financial goals.

The point to remember is that self-knowledge is essential to understanding and improving your relationship with money.  When you earn, spend, and invest your money in ways that are “smart” and also compatible with your underlying values and priorities, you will then experience a sense of financial satisfaction and success.

In addition, it is important to realize that the process of raising your M.Q. is a life-long learning commitment, one in which you will continually strengthen your practical knowledge and your emotional intelligence in regard to your financial well-being.


Reprinted by permission of Money Quotient, NP

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