suze orman
Photo: Robert Trachtenberg
I recently sat down for a consultation with Jane, a stay-at-home mom with a 2-year-old son, another baby due this month, and big fears about her family's financial security."It's really hard for us to save money," Jane said. She and her husband, Charlie, both in their early 30s, rent their house in rural Oregon and live off Charlie's $2,550 monthly teaching salary. When their family expanded, the couple found themselves unable to cover expenses on that income alone and began dipping into their savings for an extra $350 every month.

"I thought we would feel more stable at this point," Jane told me. Instead, she felt woefully unprepared: to start a college fund for her children, to save for retirement, to one day buy a house. She said the word can't so many times during our conversation, I lost count.

And yet, when I looked at her financial documents, the numbers were much more encouraging than Jane's tone. She and Charlie have no credit card debt, no car loans, and a manageable federal student loan that financed Charlie's master's degree. Sure, they're not contributing to their retirement right now, but they've already saved about $30,000 in investment and retirement accounts and another $12,000 in an emergency fund. Not bad at all for such a young couple. And their $350 monthly shortage can be easily fixed. So why was Jane so discouraged?

All this negativity was clearly coming from a deeper place. "What else is eating at you?" I asked her. That's when the floodgates opened. Jane broke down in tears telling me about her family's recent struggles. She and Charlie had moved back to Oregon last August to be close to her father, who is terminally ill at age 62, a result of his exposure to the toxic chemical Agent Orange while serving in Vietnam. Jane obviously has a deep bond with her father, and I could hear the ache in her voice as she described what he's had to endure. Add the fact that she and Charlie, both smart and industrious college graduates, have weathered multiple layoffs and moved abroad twice to teach English because they couldn't find other jobs—not to mention the pressure of new motherhood—and Jane's anxieties were more than understandable. "There's just so much that seems out of my control," she said. And she was right: A lot in life is out of our control.

But here's where Jane was wrong. "If we had more money," she said, "I think I would feel safe." Well, if she and Charlie had $50,000 in credit card debt and were about to lose their home, I might accept that logic. But they rent for an affordable $500 a month and owe relatively little money overall. I know plenty of debt-addled millionaires who wish they had that kind of security.

Jane was in a much safer financial place than she realized. To gain a sense of control over her destiny, she didn't need more money—she needed a better outlook. She told me, "I want to feel at peace with the decisions Charlie and I have made in our lives." And she should! They've made terrific decisions. But my telling Jane that wasn't the solution. I needed Jane to tell Jane. There's a lot of power in the words we choose to describe our situations; using positive language can shift your whole perspective. So we worked out a mantra for her, to be repeated over and over throughout each day: I love our life. I love the decisions we've made. I feel at peace with what we have. I feel safe, secure, and powerful.

The more Jane says these words to herself, the more she'll believe them—and the less preoccupied she'll be by financial anxiety. I told her that the next time she has these worries or starts to complain to Charlie about them, she should recite her mantra. With her attitude in check, we could tackle her money questions easily.

What should they do about their monthly income shortfall?
Relax. It's just $350 or so, and they have savings to cover it. The big fix will be for Jane to earn some income whenever she's ready following the arrival of their second baby. Jane slipped in the fact that she'd received her substitute-teaching license and previously made close to $150 a day subbing at Charlie's high school. Hello! Do that three or four times a month and the deficit will be a surplus.

Should they buy a home?
Nope. Too much about their life is up in the air. They moved to be close to her father. Let's wait and see how they feel in a year or two. If they want to relocate again, a house with a mortgage will weigh them down.

Do they have enough life insurance?
Jane had impressively taken the initiative to purchase two level-term life insurance policies, but both had a death benefit of $200,000; it should be closer to $750,000 (in general, I recommend that your policy have a value equal to about 25 times the amount of annual income your family needs to live securely). To make that bigger benefit affordable, they can shift from their current 30-year policies to 20-year policies. The shorter term will reduce the monthly premium but still provide plenty of protection.

Shouldn't they be saving more?
Sure. But there's no cause for panic. They are dutifully paying $320 a month on a $23,000 student loan; once it's paid off, they can redirect that monthly amount toward retirement savings. The real issue is that Jane, like many people, doesn't have a clue as to what specific investments are in those accounts—which are crucial to her family's future security. Her homework is to sit down with her financial adviser and start learning. (For more on taking control of your investments, see What's in Your Retirement Account?)

When I reviewed Jane's financial information before our talk, it was obvious she'd made smart decisions and had a keen sense of responsibility. Then we connected, and I learned about her amazing heart as well. My biggest hope was for her to be able to see these great qualities in herself.

A few weeks later, Jane followed up with me: "I've been repeating my mantra and had some really good discussions with my husband," she said. "I feel better already."