169 | How Rachael Learned to Manage Her Money Intentionally to Achieve Her Goals

My client Rachael was already doing some good things here and there with her finances.

She had a financial planner helping her with her investments, but she didn’t have plan, and she didn’t know how to manage her money from day to day. That’s when she came to me.

In this episode, we talk about our work together, some of the things she’s been able to accomplish with her money, and her perspectives on money now.

• • Rachael’s experience with money before coaching
  • getting into debt and paying it off
  • feeling shame about your finances
  • finding ways personal finance is similar to something you’re already good at
  • Rachael’s experience with budgeting and being more intentional with her money
  • releasing shame about your finances
  • comparing your situation to other people’s
  • viewing money more objectively
  • Rachael’s advice for anyone struggling with their finances

Episode 164: Buying Things You Can’t Afford

You’re listening to Wealthyesque. 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 am introducing you to my client, Rachael. Rachael was already doing some good things here in there with her finances. She had a financial planner, helping her with her investments. But she didn’t have a plan and she didn’t know how to manage her money from day to day. That’s when she came to me. In this episode, we talk about our work together some of the things she’s been able to accomplish with her money and her perspectives on money. Now, I think you are really going to enjoy hearing Rachael’s story. So let’s dive in.

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Rho
Welcome to the podcast. Rachael, how are you?

Rachael
I’m great. How are you doing?

Rho
Well, thank you. So for everyone listening, Rachael is one of my clients. She is in house counsel. And we just finished up working together. And she has graciously agreed to share her story with everyone. So Rachael, tell us about your money journey before you started coaching.

Rachael
Sure. So before I started coaching, I really had never put a budget together before I had tried. But I didn’t really have a very good process or plan for it. I didn’t grew up with parents that like talked a lot to me were my siblings about money or how to manage money or how to plan for things. And so I really just found myself at times, in a pattern of overspending. I found it difficult to keep track of my money because I wasn’t managing it. I was letting like, I didn’t have plans every month on like, how I was going to spend thing, or what I was going to spend?

Rho
Yeah, and I think a lot of people can relate to that. Because a lot of people don’t create those plans on the front end for how they’re gonna manage their money. And it’s just kind of like, we’re not taught these things. You know, like, I know, we’ve had conversations before about why are we not taught this in school, we’re not taught how to manage money. And so if you don’t have someone in your life, like your parents, like friends, like, you know, whoever to help you say, Hey, this is how you plan out your spending, this is how you do XYZ, then you wouldn’t know.

Rachael
Yeah. And like I had excellent credit, always had excellent credit and always, you know, made sure that all of the things that I had, that needed to be paid were paid every month, but sometimes that meant that I was paying for things on credit cards, and I would prefer to have not paid for on a credit card. I looked good on paper in terms of I had a lot of credit. And, you know, I wasn’t, you know, good to anybody that wanted to extend credit. But I wasn’t getting ahead or saving as much as I wanted to save. And I never felt like I was getting ahead because I had a certain degree of credit card debt that was weighing that I would go in and out of I’d pay it off. And then I’d run it back up and pay it off and then run it back up. Because I wasn’t really strategically thinking about how I was saving how I was budgeting I didn’t have I had goals, but they weren’t really clearly defined. They were sort of a amorphous goals. And I wasn’t hitting them the way that I wanted to. I wasn’t even defining them so that I couldn’t get them I didn’t have a plan in place to achieve them.

Rho
That cycle of getting into debt and paying it off and getting into debt is also very relatable because that’s what happens for a lot of people. So tell us about what changed for you in like not wanting to continue that cycle.

Rachael
Well, I think I carried a lot of shame about it, because I was like I felt like it was the one area where in my life where I didn’t really kind of have a good handle on myself. Like I felt like I was successful objectively and subjectively and pretty much every other way. But this was like the thing that was like the thing that I didn’t think was great about myself and so I was in a relationship and the other person really kind of had some things that I felt like he needed to work on himself about. And I thought to myself, What a hypocrite you are that you expect somebody else to be like investing time and therapy or things like that emotional things. And you’re not working on the area where you need to grow, and you need to get better. And like you haven’t personal improvement and opportunity for personal improvement here that you’re not actively working on. And I thought, why don’t you stop thinking about what he should be doing to fix himself and start like focusing on yourself to get yourself to be the best person that you can be in this relationship or any other relationship. And so that was when I hired you. I sought you out because I felt like I had been trying for a long time to get a better handle on these things. But I hadn’t. I hadn’t been successful myself, like, I’d read a couple books. And I’ve done a couple of things. But I knew that I didn’t really know how to budget. And I felt like I needed to budget. And so I started seeing things that you were posting on LinkedIn. And I, I decided to reach out to you to see if maybe you could kind of help me. Teach me you’re teaching your secret, magical ways.

Rho
And you know, I am big on the budget, what are your views on budgeting? Now, since going through that process, and working with me?

Rachael
It’s so much easier than I thought it would be. There was a certain point when we were talking you and I were talking we talked about dieting, right. And like I’ve never had a real problem with my weight. I mean, it’s fluctuated like lots of people’s does, but I’ve never had a problem with it. And you kind of analogize like your budget as sort of like your workout plan or your diet plan or whatever, then it just is, it’s the same exact type of thing where you just have to exercise a certain degree of discipline over it. You eat a piece of cake one day, and then maybe the next day you like lay off the carbs or whatever, just kind of the same thing. And so I just, it was really just thinking differently about budgeting and thinking of the budget as more of like a helpful tool to guide me instead of something that was like overwhelming and going to make me feel bad or stressed out. Yeah, I think it’s just a really useful tool. And it actually once you get into the nitty gritty of it, it can get really fun. You can kind of get competitive with yourself about it. It’s really a tool for self empowerment, and it helps you exercise control. For me, it’s very helpful because it helps me feel like I’m in control. And I think previously, I always felt like, well, I had no sense of control over certain areas of my finances, because I wasn’t exercising control over them.

Rho
I love that you said the budget feels fun, I got the big cheesy grin when you said it. Because I think so many people have that view that you had before that it’s overwhelming that it’s going to be hard, like all of that stuff. But really, the way that I view budgeting is it’s your plan for how you’re going to use your money to be able to use it the way that you want, right now we don’t have budgets, then money just is kind of going we don’t really know where it’s going, we’re not maybe making progress on the things that are important to us, we’re not spending maybe on the things that are important to us, maybe there are some things but some things were not right and so like when you have that budget, it kind of gives you the freedom to spend the money you don’t have that worry in the back of your head about whether this goal is going to get accomplished or whatever, like you know, okay, I’ve set aside this amount of money to go shopping or to go out to eat or whatever the thing might be. And I know that this other stuff over here is still going to be taken care of.

Rachael
Exactly. I think the thing that when I started to get really into the budget was at a period where I felt like oh, I did the budget per month one particular month and I felt like this budget is really tight and that made me nervous and so I started I became very obsessive about it and I was like doing it like every like three days I was updating my budget and like you know, checking to see where I was in my progress for that month. And that really motivated me to I realized okay, I need to take a step back and like do this once a week and not become the opposite of what I want to be like before I was too lacs about it. No I mean like too structured or too controlling about it. But yeah, I think generally like that helped me realize okay, what can I do to free this up so that I feel like I have more freedom in this budget what things can I forego once you start to really put everything on paper and look at all the stuff you’re spending you know things that are in the past for you and you would look at them I would look at certain expenses like in the abstract and go well okay. Oh this you platinum credit card. How is this thing that you pay for annual fee, but you get all this other stuff. So it basically kind of really pays for itself in the end. And what I started budgeting, one month, the platinum card, the annual fee had hit the card. And I had, you know, the card had zero balance on it. And I looked at the annual fee. And I was like, I don’t want to pay that. I don’t want to pay $700 period for this credit card that I just, it just kind of helps you reshape your priorities because I thought, well, that $700 could go to a lot of other things. And I don’t need this particular credit card just so that I can get into like, the sky club. I don’t eat or drink or not. But this guy will have to pay for this annual fee every year like why do I even have this? It was sort of things like that, where I think that’s a good example of something that the abstract seemed like it made a lot of sense. And it was it’s a good, excellent credit card, but I didn’t need it for my lifestyle. When I looked at the long term structure of a budget.

Rho
Yeah, that really speaks to the power of being intentional with your finances. Because if you weren’t paying attention, if you weren’t putting these measures in place to control your spending and decide where you want your dollars to go, then that annual fee comes and you just pay it and you keep sticking with that card, because this is just how it’s been. And you’re not like if you weren’t thinking about is this something that’s really important to me, is this something that furthers my goals, that kind of thing. So I love that. Another thing that you said, this was a little bit ago, but you were talking about the analogy of budgeting to like fitness and weight loss and things like that. And I think that it’s so important to look at how money management is similar to other things that you are that you already care about, or that you’re already pretty good at, like you’re into fitness and taking care of yourself and that kind of thing. And so it’s like, okay, how is this the same? And when you can find those parallels? And those those similarities in something that you’re already doing? Well, then it makes it a lot easier, I think to do the budget and stick to it.

Rachael
Yeah, definitely. Definitely. I wholeheartedly agree. I also think, honestly, the biggest part of this journey, the most important part of this journey, and the part that. Calling you is really the first step. That’s where the magic starts is like admitting that you have an issue that you need some outside help with. But I think the biggest part for me, it was just kind of shedding like I carried all the shame. And I was really, really hard on myself. And even when I started working with you, you looked at my whole picture, and you were like, Oh, you’re doing all these other things that are greatly you have money saved over here, and you’ve done this, and you’ve done that. And I had all these other things that I had done that were great, but all I was seeing was the places where I was frustrated. And you kind of helped me take a step back from that and look at where I was doing things well. And then just the regular having a discussion with you about it was very helpful for me to like, pull away, peel back some of that shame. And just to feel comfortable with like, this is like any other journey, like I just decided, really, with your help to just stop being so hard on myself about this.

Rho
I think that is a common experience, especially among lawyers, because we’re used to being good at things. And we’re used to having the success and all of these other areas of our lives. And so when there is that one area that it feels like we’re not on top of it feels bad. And then that coupled with all the messages we receive from society about money and about how we should be managing our money, and you should be doing a, b and c and it’s like, well, I’m not doing a, b and c. And then that seems like we’re somehow bad. So I love that you share that. Thank you very much.

Rachael
Oh, you’re welcome. I also think that Well, I just think a lot of people think that because they’re aware, they have to like live up to certain expectations or external, they have to have external markers of their success or otherwise people won’t think that they’re the lawyer. And I also just look around sometimes and think you look at how people are happy Some people spend money and it’s like, where are you getting out there? Like it’s just I think that there’s a lot of people who are dealing with these issues and just aren’t weren’t, aren’t as weren’t willing to confront them that on? I think it’s more likely that there’s a lot of people that are like struggling with these issues, then then there are people who are just phenomenally successful.

Rho
No, I agree. I think that money issues are very prevalent, but money has always been this taboo in our society. We don’t talk about it. There was this study a few years ago that said that people are more willing to talk about their sex lives and their weight than their finances. And so I think, you know, to your point, we don’t know who is having money struggles and I think it’s easy to look at what other people are doing. And it’s like, oh, well, this person is going on these trips or buying nice things or whatever. And we just assume that they’re doing well. And they know what they’re doing with their finances. And then like we’re comparing kind of that highlight reel to our behind the scenes of knowing like where we’re struggling. And I think it’s important to just take a step back and not worry about what other people are doing. But also to know that everybody or a lot of people are dealing with the same thing, that you’re not the only one because I think it’s, it’s common to think that when we have a struggle or an issue, that we’re the only ones dealing with it.

Rachael
Well, sure. And also, I think finances are like everything else in life, like they ebb and flow. Like every commercial that’s ever been on TV is like acts like everyone was on the same linear path where everyone gets our first job, and they start maxing out their 401 K, and then one day they retire and they’re rich. And like, those kinds of commercials, like don’t show that like, people get divorced. People have health issues, people have a child with special needs, people lose their job, pandemic comes out of nowhere waits at somebody’s business, like things happen to people in their lives. But I do think that the skills that you have taught me are just better Cornerstone things like Cornerstone basic financial, money management, helping people think about actively intentionally managing their money. And it’s extremely helpful. Yeah, I think we have to have those Cornerstone skills, to be able to do other things as well.

Rho
So tell us about what you have been able to accomplish and your finances, and you can go in as much or as little detail as you want there.

Rachael
Sure. I mean, I’ve just paid off a significant amount of debt, I basically restructure payments and payment plans that I had, I’ve saved a significant amount of money, and pay off some credit card bills and restructure that look like a loan and some other things that like I significantly lowered interest rates and payments. And I have a very active strategy. And I think within the next year, I’ll be exactly where I want to be. I would say this time next year, I should be exactly where I want to be. And definitely will. Yeah, I think I definitely will be this time next year, which is really exciting and very highly motivating to me. So it’s impacting all of the the long term, the short term goals are impacting impact me every day, because I keep them in mind every day. So every single thing that I do, like, every time I go anywhere, and I hit Apple Pay on my phone, or do something, I have these like short term and long term objectives, that kind of pop up in my head, and they impact the way that I spend. I think a lot of it is just having goals, like specific, really specific goals that are attainable, and just working towards the small, the small goals, and then they stack up so much faster than you would think that they will before I think I was hitting goals too all the time, but I wasn’t keeping track of them. So I didn’t know where I was making progress.

Rho
And I think keeping track of them in that way does help you to stay motivated, because you’re keeping that progress top of mind. And you see that the things that you’re doing are working. So you’re like, let me keep doing these things. And then something, something that you just said, really speaks to the change in the way that you are managing your money because you said that you’ve got these goals in mind. And they kind of pop up when you have a spending decision to make like if I’m going to buy this thing. And I think that just speaks to being more intentional with your finances. And you know, something that I say all the time is like, is buying this thing or spending on that thing, more important to me than achieving this goal. And it’s not to say that you should always prioritize the goal sometimes that that spending thing that whatever it is you’re gonna buy is more important to you. And that’s okay, but making that intentional decision versus you spend on the thing and then oops, now I can’t save or now I can’t pay off debt or you know, whatever. Like that’s an unintentional way that many of us are managing our money. And so I love that you highlighted the intentionality that you’re using with your spending now, because I think it’s so important. I love all of the things that you have been able to accomplish, which, you know, obviously, that’s fun to be able to save a bunch and pay off a bunch of money or pay off much of debt and that kind of thing. Tell us about how you’re feeling about money now versus how you were feeling before.

Rachael
Well, before I hated thinking about it, I hated doing any I hated paying bills. I dreaded dreaded every interaction that I had with money, it doesn’t matter how big or small. And now I don’t feel that way at all. It’s literally like completely my life is very different now than it was I would say this time last year. Than it was six months ago because I like I said before, I feel like I have control over my situation, I’m in charge of my life. I just feel like I have control and competence about what I’m doing and the choices that I’m making, and I have a plan that I’m executing. And before I never really had like a plan, like I had long term goals. And I remember I got a financial planner really great immediately, that was like, the first thing I did when I got out of law school. And I set up certain things in certain investments. And I bought certain types of insurance. And I did certain things that he said to do, that all of those goals were like, 35 years out in the future, 40 years in the future, you know, like, I bought a condo, I did the things you were supposed to be doing. But like, I didn’t have any short term goals beyond that. And so I think that’s kind of where I lost sight of kind of lost my way a little bit was that I just didn’t have the short term goals. And now I have short term goals. And I think that’s a really important way. Important thing is to constantly be having short term goals. And like, if there’s a thing that you want to buy, that’s maybe a little bit extravagant, like maybe make that a short term goal, but you’re like, I’m not gonna buy it, now I’m gonna buy it in three months, when I do X, you know, or when I save for that, I’m just gonna save for that, and then I’m gonna buy it in three months, you could maybe technically afford to buy it now. I mean, there’s things I could afford to buy now that I’m choosing not to buy, because I want to wait three months to buy them. You know, some of it is like fake little things that you put on yourself. But that’s just what discipline is, right? I could have that piece of chocolate cake right now. But I’d rather wait to have chocolate cake. After the fancy dinner at the restaurant, I’m going to like I’d rather wait till Saturday night and have dessert, then I’m not going to have dessert today. I’ll have it next 100 On Saturday, on my cheat day or whatever it is doing the same thing, applying those same, that same mindset to your finances. And it’s really helpful to me.

Rho
You know what you’re talking about with, like, the fact that you could purchase something right now, but you’re planning to wait, you know, three months to do it, it reminds me of a podcast episode that I just released talking about, like buying things, and how the common way of managing our money is as soon as I have enough money, then I’m gonna buy it. And it leaves people kind of on the edge all the time, because it’s like, I had just enough to get this and I bought it. And now I’m back to like scrambling versus okay, I could get this now. But I could wait until I can buy this and I can comfortably afford it. And it doesn’t impact my finances at all. And I just go on about my life. And that’s kind of what you’re saying reminds me of.

Rachael
Yeah, I also think that like, gift giving, too, is something that like you and I talked about, like I really like to give gifts. But I’ve been starting to think about and prioritize like how much I’m going to spend like I would never cap what I wanted the amount of money I was going to spend on what when I wanted to get someone it was always like, more important to me to find the perfect thing, which is just, you know, most of the time, people love getting an awesome gift. And they love it when you buy something that’s really personal for them that they’re really going to love. But most of the time, like they’re not expecting anything and they just like to know that you thought about them. I had a family member about his 70th birthday. A couple like last year, this was actually before I met you. And actually it was even before I met you but I I knew I wanted to buy this person something really special for their 70th birthday. And so I did. And I for four went on. I mean, I went spending certain amounts of things on myself, like I made, I actually did make a budget, because this person’s birthday was in November, it was really close to Christmas. And so I did make a very, like limited Christmas budget for like, Okay, this is what I’m going to spend on every one. And I’m not going to go past this on these gifts. Because I want to buy this person, this other person who’s really amazing and special to me, I want to buy her a special gift for her son. And so I did do that. But I didn’t know how to do that for my entire life. You know, that actually, in hindsight gave me a big feeling of control around the holidays because the holidays, it’s so easy to to if you don’t have a budget, it’s so easy to overspend. And so I had put this little Christmas shopping budget in place for Christmas. But what I really needed to do and when I met you it was like that was when I started budgeting my whole life. And I felt so much better around the holidays with that budget and I feel so much better. That was like microcosmic and this was more of like a macro thing that you and I did. And I just kind of carried that feeling of control and planning and structure. There’s so much emotional stuff that gets tied up in your finances like how your parents attitudes were with money, how they made you feel about money. You know, did people make you feel guilty about money? Was money a source of stress in your house when you were growing up? Or did your parents use money to control you? Or, you know, how is it in your marriage, like there’s just money, personal finance is so emotional.

Rho
I think that is 100% Spot on. Because there is a lot of emotion that tends to be tied up in money. And one of the things that I try to do with you guys like with my clients is to help you separate out the emotion, so that you can look at your finances more objectively, specifically, like emotions, like shame, and anxiety, and overwhelm, and all of that, because none of that is going to be useful to you and making decisions for your finances. And so when we can strip that out, and you can just view this, you know, these numbers as data points, okay, this is where I am with this category. So I’m going to do this going forward, or this is where I am with this goal. So this is what I’m going to do, then you’re going to be able to make so much more progress. And you’re going to have a much better experience along the way. Because you’re not beating yourself up and shaming yourself and all of that. So I think exactly what you said, like money does tend to be really emotional. And yeah, a lot of it does come from, you know, our past our childhood, things like that. And, you know, we don’t really dive into all of those kinds of things, but it’s like helping you to reframe the way that you think about your money, so that you can treat it differently and have different experiences with it going forward.

Rachael
Oh, yeah, exactly. I mean, I think that’s really the nugget. And I think that’s where your program is super helpful, or at least it was super helpful for me, was just kind of helping me question my motivations for why I was doing certain things or why I felt certain ways it was I remember you saying the very clearly exactly is the term data point. This is, and it was basically you didn’t say it exactly this way. But I have received it as like, this is just this isn’t who you are, this is just a data point about where you are right now. And where you are right now, it goes back to what I said before life changes, right? Things can turn on a dime. And so who you are right and at where you are right now can be completely different. Five days, five weeks, five months, five years. So I was like, oh, yeah, this is just a data point. Like, why am I letting this one little thing like stressing me out so much when it’s so easy? It really is actually easy for me to make a change that can positively impact that. And this can look totally different. Next one?

Rho
Well, as we close out, do you have any words of encouragement or anything you would like to say to listeners who are where you were, you know, the end of last year?

Rachael
Yeah, talk to Rho, that’d be number one. But really, honestly, just don’t be so hard on yourself. It’s kind of like, if you feel like you need help. If you feel like you’ve been trying to get a handle on this for a little while, and you haven’t been able to successfully do it. It’s probably because there’s some sort of emotional roadblock and confusion about this. And the best thing you can do for yourself is like, just ask somebody who’s trained, or who knows what they’re doing for help, which would be you know, I would say the same thing to anyone who’s struggling with any problem like, you know, if you don’t feel well, you go to the doctor, if you are depressed, you might go to a therapist, if you’re struggling with something, like, ask somebody for help. And it’s so much easier to ask someone like you who’s non judgmental, who has a level of objectivity and separation, there’s nothing emotional, like, you know, I feel like we’ve become friends through this process robot, like, there’s no emotional attachment. So like when we sit here, we can have a completely objective conversation about these things. And you know, you’re a lawyer, like if somebody had a problem, a legal problem, you would say, go talk to a lawyer. This is a personal finance issue. Like if you’re dealing with a personal finance issue, seek out a professional, and not a financial planner is going to sell you investments, not somebody who’s going to be selling you investments and selling you that stuff. Because their focus is always going to be on your investments, it’s going to focus on your investment strategy. That’s not the same thing as helping. And that was where my problem was, I had a financial planner. And so I felt like I should be fine. And I had a financial planner, and I had investments through my financial planner, and I had a 401 K and I had an IRA and I had the things that you’re supposed to have. But I did not have. I did not always have the amount of liquid savings that were like immediately available to me that I wanted to have, because I didn’t know how to budget. And I was putting so much money at certain points into investments that I wasn’t building up my savings the way that I should because I wasn’t controlling my spending the way that I should. But a financial planner or wealth manager is not going to teach you those basic skills. They sort of just like expect you to know them. And so once I had that financial planner in place, I was like, oh, you know, I’ve made it, I have a financial planner, I have some investments. That’s not the same thing as having good spending habits. And it’s still really easy to to stray from your long term and short term goals if you don’t have a plan in place to intentionally spend.

Rho
I love that advice. And thank you so much, Rachael, for coming on and sharing your story with my audience, I know that they’re going to get so much out of it. They’re going to relate to so much of what you said. And I love the words of encouragement at the end. So thank you again for coming on. Anytime. Thank you for all your help. It’s been a real pleasure.

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I hope you enjoyed that conversation with Rachael, if you can relate to the way she felt about money before and you want to learn how to manage your money better to I invite you to work with me. My membership Money Mastery for lawyers is now open. In it, I teach the exact same principles I taught Rachael, but you have the benefit of learning them at your own pace on demand. If you’re listening to this episode, the day it comes out Friday, September 15th 2023. There is only one day left to get the promotional founding members rate which is 50% off that ends at 8pm. Eastern Time on September 16. So get on over to rho thomas.com/join to get in now. All right, that is it for this week’s episode. If Rachael story was inspiring to you, please show her some love in the ratings and reviews. If you’re an apple podcast, you just click on the podcast in your library. Scroll down until you see ratings and reviews and tap five stars. And 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.