199 | Fashion, Fun, and Consumer Debt Freedom with Laurel

Laurel is a fashion-loving lawyer who had been struggling with credit card debt for years.

She wanted to pay it off but didn’t want to completely deprive herself of the things she loves.

In just 6 months, she paid off all her credit cards and increased her net worth by 5 figures. Plus, she was still able to shop and have fun with her friends.

In this episode, listen in as Laurel and I chat about our work together, what she’s accomplished, and how she’s feeling about her finances now.

• • Laurel’s previous experience with her finances, including thinking spending was bad and feeling guilty about shopping
  • her new strategies for spending without guilt and shame
  • what Laurel is saving for and how she manages her savings
  • how she’s feeling about her finances now
  • finding creative solutions to fund Laurel’s desires
  • where Laurel is now with her finances, including an amazing net worth increase
  • Laurel’s words of encouragement for anyone who’s struggling with debt

Submit a question for Episode 200!

You’re listening to Wealthyesq. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far.

Today I’m bringing you a conversation with my client Laurel. Laurel is the perfect example of spending on what you love while still hitting your financial goals. She’s a fashion lover like me, and she didn’t have to give up her shopping to achieve her goals. In fact, she was able to pay off all of her credit cards and increase her net worth by five figures, and I’ll let her tell you the exact amount. And she did that while still buying clothes and shoes and doing fun things with her friends. I think you’re gonna love her story.

But before we dive in, I want to remind you, if you’re listening to this episode in real time, on April 12, today is the last day to get your questions in for next week’s 200th episode of the podcast. I am answering all of your questions the entire episode. So head to rho thomas.com/question to get yours in today.

And with that, here is my conversation with Laurel.

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Rho
Welcome to the podcast, Laurel. How are you?

Laurel
I’m great. Thank you so much for having me.

Rho
Yeah, it’s such a pleasure. So, for everyone listening, Laurel is an associate at a midsize firm, and she is one of my clients. We have just finished working together. And so we’re going to talk a little bit about her money story and the journey that she’s been on and all of that. Before we dive too far in, though, Laurel, tell us about your money before we started working together.

Laurel
Sure. I would say, you know, growing up, I really didn’t have too much of an education or full understanding of financial literacy. I was always just kind of told that I should be very conservative with my money. I had been kind of conditioned to think that spending money on myself was bad, but I am also a lover of fashion, a lover of shoes. So, I love spending money on myself, but it came with a lot of guilt. And I would say, I didn’t have much of an understanding around, you know, building up debts and paying those off efficiently. So, before we started working together, I had a significant amount of credit card debt, which is really what made me want to reach out to you and start working with you, because I didn’t know how to get rid of that and how to, you know, grow my wealth. Because it felt like, I was just digging myself deeper and deeper and couldn’t get out. So, I really had no idea where to start.

Rho
You know, I think a lot of people can relate to that. I mean, going all the way back to where you said growing up, you didn’t have a lot of financial education, and you know, the guilt that you felt with spending on yourself. You know, I too, am a fashion lover, we connected on that. And I think a lot of times, because of the messages that we receive both explicit and implicit, we have that shame or that guilt around doing things with our money that aren’t quote, responsible. Right? Like doing things like buying the shoes or buying the bag, or whatever the case may be, because we aren’t taught a specific way of managing our money that allows for those things. It’s like the messages are all about you should be saving and you should be paying off debt, and you shouldn’t spend on this, that and the third, and why are you buying those lattes? You know, and so I think that experience that you had is so relatable to a lot of people. And so, I am glad to have been able to help you to change that mindset a little bit because that’s no fun. You know, going through life feeling guilty about buying stuff for yourself sucks.

Laurel
Exactly, yeah. Especially when you, you know, you work hard for your money. And then you want to reward yourself a little bit. And you don’t want to feel guilty about spending your hard-earned money on something that you really do want.

Rho
Exactly. So, one of the things that you mentioned is you know, feeling that guilt around buying things for yourself and all of that. Talk to us about the strategies that you have in place to be able to spend on yourself now without feeling the guilt and shame.

Laurel
Yeah, I think that’s something that we had really kind of honed in through our time working together is a budget that is super restrictive and that kind of makes me quit cold turkey on buying anything for myself- that’s just not going to work for me. And it’s not something that I want. Like, I work hard and I make a decent amount of money, but I can’t be out there buying everything that I want all the time. But we talked about different strategies and experimented with different ways that I could still feel like I’m doing those things that I loved but not going overboard or having so many impulse purchases which was something that was a struggle for me as well before we started working together. So you know, we built out some categories in my budget. Like, we did you know a fun just for me category and that kind of encapsulated you know clothes and shoes and whatever else that was just kind of a no questions asked, whatever I wanted to spend it on and that was really helpful for me. You know, there are other things that I more kind of in the fun budget category that I like to spend my money on, like I love to go out to eat and I also love to buy things for my friends. Gift giving is one of my love languages, but that can get expensive. So, we talked a lot about that and kind of planning ahead and having a separate budget for, you know, food for me just to eat out or food for myself and others and created separate categories for that and kind of evaluated how much I was spending on those different things before we had really started budgeting it. And then created more realistic kind of budget amounts and working within those confines and also planning ahead to what my month look like. So, it was like, okay, I know, I have two or three friends’ birthdays this month. So, I know I’m going to be spending more on maybe taking them out to get dinner or taking out to get drinks- fine. Like we’ll plan ahead for that. And that was a strategy that I had just never really taken into account before. Yeah, I mean, some other things too. Like I love thrift shopping. So, we talked about that. But that’s something that before we started working together, I would go every week and spend too much, so it kind of defeats the purpose of going to a discount store. So, we talked about, you know, doing that maybe once a month instead and putting aside some money into a shoe fund that, you know, instead of buying a pair of shoes every week or every other week, put aside some money into savings account, so I can buy the one pair that I’ve had my eye on for years. So it’s been fun to just kind of experiment and see what works, what doesn’t if I you know, one day make an impulse purchase that I wasn’t planning on, we could come back and evaluate it and kind of see how we can move things around.

Rho
Two things that you touched on there that I would love to go deeper with, is this idea that your budget can change. Because I know so many people feel like, Oh, well, once I make the budget, that’s it. This is the budget, and this is what it has to be. And you mentioned, like, oh, well, I’m looking at what’s coming up in my month and it’s this many friends birthdays, or this person is coming to town or whatever it is. And so I know that there’s going to be some more spending in that fun category. And so rather than saying, I can only spend this amount, regardless of what’s happening, you are making it more dynamic. Right? I’m giving myself more money for the fun category because I know that these things are coming up. And I think beyond that, the fact that you have the fun category helps with that guilt and shame because we often think of budgets as these restrictive things that are telling us what we can’t do, we can’t spend. And so it’s like, no, I’m giving myself permission to spend, I must spend this money on fun. Like this is for fun, right?

Laurel
Mmhm. Yeah, yeah. Another thing too, I forgot to mention was that we set up a separate checking account where I put kind of my budgeted amount for my fun spending just on that card. So it made me feel better, because I knew like, oh, this is just my fun budget. And this is the money I have to spend on whatever I want. And it just felt really freeing without that guilt, like you said, because I budgeted for it. And because I didn’t have to worry about it coming out of the same pool of money, as you know, my account that has the money that I pay for my bills and my rent. So, it just, it helped kind of compartmentalize things in a way that made me feel like I was free to spend it on whatever I want, that certain amount, without feeling like I could accidentally dip into things that were allocated to other areas.

Rho
Exactly. Like, you planned how much you want it to spend and now we pull it out, we separate it out and now I know I can spend this money, and it does not impact my finances at all.

Laurel
Right, exactly.

Rho
The other thing that you touched on earlier was setting aside a little bit each month to buy the thing that you actually want to buy. Because I think so often, we are just going along we’re spending we’re not thinking about it in that strategic way. Right? So, I’m spending the money and I could have purchased the thing that I want to buy, but I spent it on all these other things that weren’t as important because I wasn’t thinking about the thing that I wanted to buy. And so, I love that. Or even you mentioned gift giving being one of your love languages. And so, one of the things that we did was set up that sinking fund so that when you get to the end of the year, you’ve got a pot of money just for all of the gifts for the holidays. And you don’t have to worry about how that’s going to impact your December budget or like, if you’re going to bring in enough in December to spend the amount that you want. Like you can break things up in that way and make them more bite sized, more manageable, so that you ultimately get to that goal that you want.

Laurel
Exactly. I think that was something that was especially helpful for me was to have those buckets in my savings account, which I don’t think I mentioned before. But before we started working together, I didn’t have a savings account, I just had more of a cushion in my checking account, because I didn’t really know how to manage that. So even opening a savings account at all was big for me, and you know, putting money there. Instead of just having another larger pool of money, we broke it down into you know, I have a bucket for travel, I have a bucket for you know, gifts, you know, whatever, sinking fun, just like a just for me bucket. So having that also broken up into specific goals as well has been really helpful. You’re like, oh, I want to get my travel bucket to whatever $3,000. That helps me kind of put my eye on the prize and be working towards something instead of just throwing money into a bigger bucket.

Rho
Yeah, and with that, the reason that I really liked that savings account, it’s the lly savings account, which I’ve talked about on the podcast before, but it has those buckets, but it’s not that you’re managing so many different accounts, right. And so, I can easily see this is how much is in my emergency fund. And this is how much is in my travel. And this is how much is in whatever other goals that I have. But I’m not fooled, if you will, by having, you know, just this big pot of money and I took you know, this chunk out for travel, not thinking about the fact that I needed this much for my emergency funds. I just like being able to see it in that more segmented way. Right? So that you can see easily like, this is what I have for each of these goals.

Laurel
Right.

Rho
So we have talked about a lot of the different strategies that you have in place now with your finances. Tell us about how you’re feeling about your finances?

Laurel
Yeah, I’d say it’s a complete 180 from when we started. Like I talked about a little bit, there was a lot of shame surrounding my finances, just because I had been kind of conditioned to think that I was bad at managing my money, because I like to spend on myself and I like to go do fun things that I’ve prioritized more than saving. Then, you know, having us break things down over the past 6 months and create plans and stick to them. But also, if I deviated from it, it wasn’t the end of the world, which was kind of an aha moment for me to be like, oh, I went above in this category, like I failed, and you had to repeatedly tell me Laurel, you didn’t fail, it’s okay. Look at the big picture. So, you know, my overall feelings around money have completely changed. And, like I was just telling you before we hopped on was that I feel like this is within my power now. And before we had started working together, I really thought that this was just this big, looming cloud over my head that I could never gain control over. And an attorney and still having to have taken out a lot of student loans. And that will take some time to pay off. It’s still a big number. But now I don’t feel like it’s so unattainable that I can take control over it. And not even just the student loan side of it. But my own personal day to day finances, it doesn’t seem so out of control. And like on the shame aspect of it, too. That’s something I’ll obviously need to kind of deconstruct as I continue working on it. But I think overall, I feel much better about not avoiding my finances. Looking at the actual numbers because that was something that I would do before is just, you know, spend money, not actually really look at my account or track any of my spending and just hope that it would be okay because I knew a paycheck was coming eventually. But now we’ve started to build up habits of tracking my spending every week and then every month. And then kind of see the progress of the trends and viewing it more as data points and not connected to my own worth, or my own intelligence or ability to manage my own finances. So, it’s just been a huge eye-opening experience for me all together.

Rho
I love, especially that last part of looking at your finances just as data points, because I think so many of us get our worth tied up and what’s happening for us financially. And it’s completely separate. Like you can be a smart person and still have trouble with your finances, if you’ve never learned to manage your finances. And even if you get off track with the plan that you set, or even if you go over in a category, or whatever it is, that doesn’t mean that you just suck at money like you. This is data that you can use to adjust to tweak your plan to get yourself back on track. And so I think that is so key, I love that you said that. The other thing was you mentioned, like being really down on yourself when you had, you know, made a mistake, or you got off track with where you wanted to be. And being able to look at the bigger picture or look at the other side of things. Like yes, maybe I went over an X category but when I look at the big picture, I’m still spending under I’m spending less than I was spending before. And just directing ourselves to those types of things, I think is important because often our brains want to go to the negative, the thing that I did wrong, the bad, you know, whatever it is, but there’s always two sides. Right? There’s maybe that thing that you view as a mistake, but then there’s also good things that you’re doing. There are also good things that are happening in your finances as well and we just have to learn to teach ourselves to look at that as well.

Laurel
Right. Yeah. And I think you’ve also really helped me to learn how to think creatively for solutions. Like I remember when we were first looking at my credit card debt, or, you know, I had to put down a down payment for a trip I’m going to take, and I didn’t necessarily want to put it all on my debit card. And you said, Okay, well, let’s stop, let’s think about our options. And, you know, we talked through, putting it on my credit card, and then paying it off, or we talked about, you know, doing it all right now, and it was just different ways of thinking of things that I just thought, before we started working together, it’s like you have to there’s only one avenue right to do these kinds of things.

And the same thing goes for even looking at my fun for me budget, like we talked about, you know, I love clothes. So we started doing like a Rent the Runway subscription, which would end up being cheaper than what I was doing before. And like a factor meal plan, trying that for a little bit, which worked for a couple months and then we decided it wasn’t the best for me. So I think just the experimentation side of it, too, was not something I realized that I could do. I just thought there was like one way to be responsible about your finances. And you know, to maybe allow yourself a luxury here and there. And I think working with you has really opened my eyes to, no, it’s not so black and white. You can try different things and see what works and what doesn’t.

Rho
You are spot on there because personal finance is personal. There is no one size fits all or one set way that you have to do it. Your finances and what works for you might not make sense to me or to the next person. And that’s okay, as long as it works for you and it’s getting you where you want to be, then that’s all that matters. And I think we have to let go of all of the like the gurus, the experts that say it’s supposed to be this way, and it has to do this and you know, that kind of thing because it’s just not true. Like we all get to decide how we want to manage our finances for ourselves. And so if you want to do Rent the Runway or you want to buy this kind of shoes, or if you want to go to this type of place, that’s your business. Right? It’s your money, as long as you are still able to achieve the goals that you have for yourself, then that’s all that matters.

Laurel
Right. Yeah, and I think another thing, too, setting those goals was not something that I had ever done before. Like I didn’t know how to set goals with my money and how to prioritize certain things. So like I remember there was maybe one month where you know I’ve had these goals have to save this Somehow, each month or to pay towards some bills, you know, pay more than the minimum. And I remember there was one month that was really stressful for me at work. And I decided that treating myself to a massage was more important than an extra payment on something. And I felt really guilty about that but then we talked about it together, and it was like, No, it was just the priorities that month were a little bit different. Or, you know, I had met that goal in one way, but just because I didn’t exceed it by making an extra payment, or, you know, whatever, that’s okay. And just be able to give myself that flexibility.

Rho
That is the perfect illustration of this concept of the trade-offs that we’re always making with our money. And those things that are important to us can shift, you know, from month to month, even in the same month, like you said, where you were feeling particularly stressed, and you decided, you know what, I don’t want to make this extra payment, I’m going to go and treat myself instead. And that’s okay, as long as we’re making those decisions intentionally because we’re always making those decisions, but often we’re doing it unintentionally, where it’s like, oh, I just spent the money and now I don’t have money to make an extra payment or to save or whatever. But I liked that you were thinking about like, okay, what’s more important to me in this moment, you know, what I’m feeling stressed, I’m going to go get a massage, I’m not going to make, you know, as much of an extra payment, or, you know, whatever it was, and that’s okay. You know, just like what we just talked about, where what you do with your money works for you. And as long as you have a plan, you’re being intentional with it, and you’re still making progress towards your goals, there is no right or wrong there.

Laurel
Right.

Rho
So as much or as little detail as you want to share, tell us about where you are now with your finances?

Laurel
Sure. Um, so yeah, as I said, coming into working with you, I had a significant amount of credit card debt and that is all paid off. That’s the first thing that we did together.

Rho
Whoo!

Laurel
So that was a huge weight off my shoulders. I’ve opened a savings account, which is huge for me. And, you know, I’ve started substantially saving towards those goals. I think we said we’ve increased by my net worth by what, like $15,000 over the last six months, which is huge.

Rho
Yes.

Laurel
So yeah, on like, the numbers side of things that just feel so astronomical, from where I was before. And then, you know, for more of the mindset side of things, I feel like it’s completely different. Like, I’m not scared to open my bank account every single time because, you know, theoretically, I’ve planned for this. And it’s, if it’s the number in the bank account is lower than what I want to see, that’s okay, because that has no reflection on my intelligence, or who I am as a person or my ability to manage my finances, which was the complete opposite of what I thought before.

Rho
Oh, I love all of that. Congratulations on all of your progress. I’m just so proud of the work that you’ve done. And I cannot wait to see how things progress for you. As we close out, are there any words of encouragement that you’d like to share with anybody who is where you were six months ago before we started working together?

Laurel
Well, first of all, thank you so much for all of your help. This has been just a really transformative experience for me all together, which I didn’t know what to expect. So, thank you so much.

Rho
You’re welcome.

Laurel
As for words of wisdom, I don’t know how much I how much wisdom I have to impart, but I would just say, to not be ashamed or scared to reach out for help with your finances because I was scared to reach out to anyone for a really long time, because I was so ashamed of what I thought was a really bad situation. And then, you know, when we started working together, and you saw what my numbers were, you repeatedly told me it’s, it’s not bad, you are not bad at what at managing your money. So, I think that because money is such a taboo subject, it can be really hard to step out of your comfort zone, to ask someone for help, but that was the biggest step for me. And everything after that was a lot easier than I thought it would be. So, I would just say, my biggest piece of advice is to make that first step and ask for help if you need it. Just any kind of guidance, if you are in a spot like I was.

Rho
Love that. Well, thank you so much, Laurel for coming on, for sharing your story and just allowing us to have a little peek inside of your journey.

Laurel
Yeah, thank you so much.

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All right. I hope you enjoyed that conversation with Laurel. As I said she has just done such an amazing job of balancing the things that she really wants, the things that she enjoys with achieving her financial goals. I love that she paid off all her credit card debt and increased her net worth and still lived her life in the process. I am so excited for her progress, so proud of all of the work that she’s done, and I can’t wait to see what she does next.

And listen, Laurel is not a unicorn. If she can do it, you can do it. So, I hope that her story inspires you to get started.

Alright that is it for this week’s episode.

Again, next week, April 19 is the 200th episode of the podcast. The entire episode will be a q&a answering all of your questions, and I would love to answer yours. If you’re listening to this episode the day it’s released on April 12, today is the last day to get your questions in, so head to rho thomas.com/question, and submit yours today. Alright?

As we close out friend I pray that you take the information you learn here, apply it in your life and open up to the realization that wealth is available to you. As you do that consistently. Week after week. You’ll continue to take steps to regain control of your time, build wealth and live the life of freedom and choice you deserve. Talk to you later.