215 | Money Filters

What if you made money decisions like a business?

Businesses use company values as a filter for the decisions they make.

When we take the same approach with our money decisions, we make better, more aligned decisions.

In this episode, let’s talk about let’s talk about why it’s important to use your values as a filter for your money decisions.

• • how Johnson & Johnson’s handling of the Tylenol poisoning crisis in the 80s is instructive for filtering our money decisions

  • client examples of using values to filter money decisions

  • how using your values to filter your money decisions makes a better money management system

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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, we are talking about the best filters for your money decisions. I think the core company values is helpful in thinking about this. A lot of businesses have values that the business leaders use to run the business, and these values shape the decisions they make for the business. One big example that’s often cited here is Johnson and Johnson and the way they handled the Tylenol poisoning back in the 80s. So at that time, a bunch of people in Chicago died after taking Tylenol that someone had laced with cyanide, and although no indication that Tylenol in other areas of the country was affected, Johnson and Johnson recalled Tylenol nationwide, which cost them millions of dollars, and it all stemmed from their company value of consumer safety. They say this is their top value. They also set up numbers where consumers could call the company about safety concerns over Tylenol. They allowed to change bottles of Tylenol they had already purchased for new bottles straight from the manufacturer. They changed the way Tylenol itself was formulated, so it used to be a capsule with powder inside, which is why it was so easy for this person to lace it. And I think this is when the tablets and the liquid gel capsules and that kind of stuff were created, and they became the first company to implement tamper resistant packaging, so the foil seal over bottles that we see now, or the plastic wrapper around the tops of the bottles, or the fact that bottles are glued that started with Johnson and Johnson, I share that story to show how the company’s value of consumer safety dictated how they handled this situation. They weren’t figuring out in the moment, right? They didn’t have to come up with what the value was. They had decided ahead of time, and then, based on this company value, they went above and beyond to protect consumers here. So consumers here, we can use the same kinds of filter for our money decisions, so you can decide ahead of time what you value most and which things are important to you, and allow those things to dictate the way you manage your money. You value convenience or personal care, or you might value experiences over things. When you identify that upfront, you identify the things that are most important to you up front, you can use those things to filter your money decisions rather than spending on impulse or spending without thinking about it and wishing you had that money for these others that are actually important to you. I have talked a few times about how a lot of times we spend money on things that we don’t even care about, but it’s just because we haven’t thought about this, we haven’t identified those things that are important to us and made those decisions up front that can guide those later decisions that we make about how we use our money. So I want to share a few examples so you can see how my clients have used the things that they value to decide how they’re going to use their money. In the first example, one of my clients really valued having freedom, or, you know, maybe a better way of studying options. She was working in big law, and she was starting to feel like it wasn’t for her. She also felt like she was always waiting for the other shoe to drop. That might not be quite the right saying, but she felt like things could change at any moment with her job, and she wanted to have financial security so she knew that she would be okay if she were to leave or if she were to be fired. And so we started a freedom fund for her. She was really focused on getting out of debt when we first started working together, but she had these moments where she would talk about wanting to have more options for her career, or wanting to be able to leave, or wanting to be okay if she were let go. And I remember this question I asked her. I said something like, Would you feel like you had more options if you paid off another $20,000 of debt, or if you had $20,000 in a bank account, and she chose the 20k in a bank account. And so we started working on building her savings rather than paying off more debt. Her story is a really good example of using your values to inform your decision making, because she valued had three different options. So when she’s thinking about, you know, what’s that next step that moves her closer to having that freedom options? She decided she was going to save rather than pay off more debt. But your values don’t always have to be things like freedom or like safety, as we talked about with Johnson and Johnson, for a lot of my clients, is not one of those intangible things. It’s more things they enjoy or things that are just important to them in life. For example, back in episode 199, my client Laurel came on and she shared her experience with coaching, and one of the things that she talked about was how shopping is really important to her and how much she enjoys it. She wanted to be able to get out of debt, but she also wanted to be able to shop. So that’s one of the things that we made sure that we made sure that we put into the plan. Another thing that was important to her was gift giving. So we put in her plan to where she’s able to build up a fund to buy gifts for her loved ones and not throw herself off financially. And again, this is just an example of using the things that are important to you or the things that you value to guide your money decisions and to filter those decisions so you make the best ones for you. In episode with two other client, Danesha came on, and we talked about our work together, and one of the things that she mentioned was how personal care was really important to her, so getting her nails done was non negotiable. She took regular trips to the float spa. She got her hair done regularly. These things were really important to her, and she was willing to spend less in other areas, room to spend on those things. In another example, I had a couple of clients who were big Beyonce and, or Taylor Swift fans. So when Beyonce and Taylor Swift had those huge concerts last year, it was a big deal for them, and it was important for them to be able to go to the concert because of the love that they have for Beyonce and Taylor so again, they were willing to spend less in other areas to be able to go to the concerts. For some of my clients, the important thing is travel. For some, it’s eating out like they’re big foodies. They like to try out in restaurants, and there’s for some, it’s being able to do things for their kids. For some, it’s charitable contributions or religious contributions, like ties and offering. But the point is, they are aware of these things that are most important to them. They have identified them ahead of time, so they’re able to make decisions for their finances. So think about the things that are important to you. What are the things that you value? When you identify them upfront, you’re able to filter your ultimate decisions through those values, similar to the story with Jonathan and Johnson, then you can direct your money in a way that you make sure you’re able to fund those things that are most important to you, like the stories that I just told you with my clients, it all comes down to what it is that you value, what’s important to you, and balancing those things with your financial goals, because those goals are important too, right? So that’s how you create a plan that works, that you can stick to, because you’re not things that are important to you, you’re making room for that in your plan, but you’re also making room to achieve your goals. So it’s value driven decision making for your finances, your values become the filter through which you make the decisions for your money. Your financial goals do not have to where you just pursue that to the exclusion of everything else. That’s a big part of my philosophy on money, because when you cut out everything, and you’re so focused on the goal, and you’re telling yourself, I can’t do this, I can’t do that, I can’t spend this, the point that you get tired of it, right? Like, ultimately you end up going back to how you are used to spending. And sometimes the overindulge, like you’ve been cutting so much, you overindulge in those things, and it’s just like crash dieting, right? That’s how people get in the yo yo cycle with dieting and with managing their money. So you want to take a more balanced approach, which starts with identifying the things that are important to you that you can use to filter the decisions you make with your money. That way, you’re able to create a money management system that allows you to do the things you enjoy and that you don’t feel like you have to take a break from. All right, so that is it for this week’s episode. Please take a second and share this episode with a friend or two who you think could use this information. Sharing helps us get this info in the hands of more lawyers and I greatly appreciate your support. 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 a life of freedom choice you deserve. Talk to you later.