The Conversation: Psych Yourself Rich

Author Farnoosh Torabi on how to separate spending from your emotions.

Oct. 7, 2010— -- The secret to becoming financially secure, author Farnoosh Torabi says, is to "Psych Yourself Rich."

That's the title of Torabi's new book in which she offers personal finance tips and stories about people who've found a way to get their spending under control.

"The first half of the book is really all about the sort of insecurities, the fears, the lack of confidence that people tend to have with money, and particularly now in this recession," Torabi said.

When Torabi says "rich," she's not referring to millionaire-level wealth but to a feeling of financial security. A big part of that comes from separating spending from emotions.

"Studies show that it's not that emotion is bad when it comes to money. It's more that we don't use it effectively. We don't really grasp that emotion," Torabi said. "If you're scared, you can let that fear paralyze you until you wake up and your house is in foreclosure, or you can turn that fear into motivation to get you on the right path."

Torabi spoke with ABC's John Berman today for a Conversation about her new book, and she shared some key tips. Here they are:

1. Use cash. It encourages saving and keeps spending in check.

2. Get a money buddy. A money buddy can help keep you on track for meeting your financial goals and offer advice before making a big purchase.

3. Take a time out before a purchase. It will help you avoid impulse buys.

We hope you'll watch today's Conversation for more tips, and click here for more on Farnoosh Torabi's "Psych Yourself Rich."

Watch more "Conversation" videos here.

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