A 34-year-old client recently said that she was going to sell her home because she was tired of being house-poor. I told her that I thought getting rid of it was foolhardy - the mortgage was a forced way of saving, as well as a retirement nest egg. Her response surprised me. This otherwise savvy middle manager said she didn't need to worry about retirement because she would receive a good pension when she was older. Indeed, she said she could leave her job now, never work again and would still receive the same tidy sum She also believes that if she wants something, she should just be able to buy it. She feels deprived if she can't afford it.
As a result, she has maxed out her line of credit and lives from paycheque to paycheque. She spends a lot of time fretting about money.
Like many people, she has an unhealthy and unrealistic attitude about money.
Not being smart about money - how you think about, manage and spend it - has serious and lasting repercussions on how you experience your current life and for longer-term work and personal choices.
Quite simply, you have no wiggle room to deal with life's vagaries, whether a job loss, disability, the loss of a second household contributor's income or a child requiring expensive private schooling.
You also compromise personal aspirations.
Without a financial cushion or with an overly expensive lifestyle, you don't have the latitude to be able to make decisions such as whether you could return to school or take a dream, but lower-paying, job.
While 90 per cent of Canadians feel they'll have enough money to cover life's necessities in retirement, just 25 per cent believe they'll have sufficient funds to fulfill their retirement dreams, a recent Royal Bank of Canada poll found.
While it is easy to blame this lack of savings solely on the recession - unexpected job losses and shrunken portfolios - I had similar findings four years ago when I surveyed midlife women for my book Dish: Midlife Women Tell the Truth about Work, Relationships and the Rest of Life .
More than three-quarters of about 500 highly accomplished women reported they didn't have the kind of day-to-day funds and savings they thought they would have at this life stage.
The result: Their career and life decisions were being driven as much by a need for money as by personal desires.
Many said, quite simply, that they had bought too much meaningless stuff when they were younger - some still were - and were now paying the price.
The recession has not really changed people's fundamental attitudes toward money so much as reinforced underlying personal proclivities.
Those who, by temperament, already have a small appetite for risk and economic insecurity will become even more prudent, jealously protecting their savings and living stingily.
They'll put security over all other factors in making career and life choices, often even staying in jobs they hate, or turning down opportunities that carry more risk and less income.
Others with less need for security or a more free-spending attitude were temporarily sobered by the recession. But now, they are slowly drifting back to their pre-recession lifestyle patterns and personal inclinations.
Attitudes about money are weighted by hefty psychological anchors.
For many, money is a proxy for status. We all know people who chase high-paying jobs for the prestige and ego boost, without any thought about whether the work is a good fit, interests them or they really need the money.
Many big-salary seekers spend every penny they earn, and often more, to buy lifestyle accoutrements that reflect their status, and to shore up their self-esteem.
We use money as a way to fulfill other, sometimes not so obvious, needs - whether to salve consciences feeling guilty about putting work before kids, or to find a sense of comfort when it can't be found elsewhere.
One friend, at the time a vice-president of human resources, bought a mink coat she could ill afford and hid it from her husband for several years in her car trunk.
She told me she bought the coat because her job made her feel dirty: She hated what she saw going on around her in the senior ranks of her employer and what she had to do to stay in the good graces of her fellow executives.
Buying the coat and wrapping it around her gave her a sense of comfort; in essence, it fulfilled the same kind of psychological need that a "blankie" does for a child.
It may not seem rational but I understand how spending money can not only comfort but also feel like a way to cleanse.
I once did a workshop for senior executives at one of the big car companies in Detroit. I was disgusted by the hostility they displayed behind closed doors when discussing workers and dealers.
Before flying home, I went to the nearest shopping mall. I was determined to spend - to the exact penny - what I had earned on the assignment. I knew that was illogical, but it made me feel better.
Sometimes we tell ourselves that the obsessive pursuit of acquiring or spending money, or both, is a way of keeping a kind of psychic score.
One chronically unhappy and angry woman I used to know gave up a comfortable position to take a killer job.
"If I'm going to go to the wall, I want a whack of money," she said. "And then, I'm going to spend it, every penny. I've earned it and deserve to enjoy it."
If she was being brutally honest with herself, she would have said something like: "I am always unhappy. Having a big job flatters my ego and is my attempt to fill the emptiness void."
Anxieties about aging can also lead to dysfunctional attitudes about earning.
A 60-year-old client recently bought a very expensive house he can't afford. He reasoned that taking on a hefty mortgage would force him to continue working -and he would therefore always be a "player."
On the other hand, one can be too careful, which can be equally unhealthy. Just like fifty-something women looking back at photos of their younger, trimmer selves rue thinking they were too fat to wear a bikini at the time, we can regret that we were too prudent and, as a result, passed over interesting opportunities.
Indeed, many of the woman I surveyed said that they wished they had been prepared to take more risks.
One self-employed 30-year-old friend contemplating a major renovation put the horns of the dilemma this way: She could increase her mortgage and be chronically anxious about work, or she could wait 15 years and do the renovation when she could better afford it.
But if she postponed, she worried she would regret having lived in a house desperately in need of work when she could have just bitten the bullet.
At least she's smart in being able to distinguish between her needs and her wants.
Unfortunately, many can't make this distinction. The result is a gnawing sense of deprivation, or spending money that one doesn't have.
The better choice is to feel good about what we have, rather than mourn what we don't.
Indeed, perhaps we can all take a money-managing clue from one of my clients.
Whenever she and her husband bought a home, their policy was never to take out a mortgage greater than what one of them could carry on a single income. Friends teased them about their cautiousness, but they felt good about what they were doing.
Tragically, my client's husband had a stroke when he was 43 and can no longer work. It's a horrible curveball, and the going is certainly tough - but at least they have a home.
Barbara Moses, PhD, is a speaker, organizational career management consultant and the author of What Next? Find the Work That's Right For You.
Understand its meaning to you Does making more money make you feel better about yourself? Do you worry about not having enough? Do you use it as a way to keep score? How do these attitudes influence your career and consumer choices?
Look at attitude underpinnings Our beliefs about money are often closely tied to messages our parents delivered, including how they behaved with it. They may, for instance, have always displayed anxiety about having enough money. Or you may have been told that frugality is important. Or you may have learned to be very cautious about how you spend and save because a family tragedy radically altered your family's financial circumstances.
Know how much you really need Be realistic about your current financial situation and actual needs. Don't let old scripts dictate current actions. For instance, you are in a different financial situation - and risk-taking ability - when you are no longer paying for a child's university bills. Keep the realities of what you need in check with the decisions you make. And remember: Studies have shown that, beyond a minimum threshold to meet needs, more money does not buy more happiness.
Avoid knee-jerk career decisions Bad decisions can play out in many ways. People with high security needs place too much emphasis on the safety and not enough on whether the job is a good match. Those who use money as a means of keeping score are overly influenced by the salary and bonus potential. There is no such thing as a secure job.
Feel good about what you have You set yourself up for constant disappointment, envy and dissatisfaction if you constantly bemoan what you can't afford. Take an inventory of all the good experiences and things that populate your life; when lusting after something you can't afford, remind yourself of what you have.
Don't compare yourself Many people look at what others have, and by contrast, what they don't have, leading to feelings of deprivation. But what they fail to take into account are the trade-offs others have made.
Look at opportunity costs Any time you are about to make a discretionary purchase, ask yourself: How much time did it take me earn the cost of this? What will you need to give up to make this purchase?
Have a cushion As financial planners say, pay yourself first by saving a set amount of money every month to protect yourself against job loss and other unexpected curveballs.
Be financially literate Know your savings, assets and liabilities.
Be realistic about kids' needs People fret all the time about the effect of not being able to afford something their kids want. But you will not inflict any long-term emotional damage by denying them the hot new toy or cool shoes.
Satisfy cravings with a substitute If you are longing for an indulgence, rather than deprive yourself, buy a cheaper luxury item.
Separate wants from needs There are lots of things that would be nice to have, but ultimately they will not have any effect on the quality of your life.