174 | Rewind: Preparing for the Holidays and Other Expected Expenses

As we head into the holiday season, let’s revisit how to prepare for expected expenses. If you’re like many other attorneys, the holidays catch you off-guard every year.

The same may be true for other big expenses or financial changes you know are coming up. So often people don’t financially prepare for things that are completely expected and end up feeling stressed out and anxious when those things pop up—as expected.

In this episode, let’s talk about how to prepare for expected expenses and the mindset you can adopt to make sure you’re always ready when they come up.

• • how one of my clients prepared for a big financial change
  • how to prepare for holiday expenses
  • how to prepare for vacations
  • the mindset that leads some people to prepare for expected things when others don’t
  • how you can leverage a skill you already use in your practice to manage your money better

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 bringing you a rewind episode. As we move into the end of the year and the holiday season, a lot of my clients are preparing for their end of year spending. So I thought this would be a great time to revisit the episode on preparing for expected expenses. I hope you find these tips useful as you prepare for your own holiday spending. Let’s jump into the episode.

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Today we are talking about preparing for the expected. Often I talk with lawyers who have expenses coming up that they know are coming up, but they don’t prepare for them and then they end up feeling caught off guard financially. I actually got the idea for this episode from talking with a client who has done the opposite. She has prepared herself for something expected that’s coming up for her. So she’s in big law and she decided to take a clerkship next year. So she’s gonna be making less and she doesn’t want her lifestyle to be affected too much. One of her biggest expenses, just like most of us is her housing. And since she’s going to be making less next year and she doesn’t want her lifestyle to change, she has saved the amount she needs to pay her rent for the next year. She wants to be able to stay in the same place and now even with the pay cut, she doesn’t have to move or anything like that. Because her rent is covered. And so I just want to shout her out because she did that even before we started working together and I think it’s really dope. So shout out to you my friend. I will not say your name because I didn’t tell you I was going to talk about this but you are doing it. So I want to talk today about the two most common expected expenses I see that tend to catch people off guard. And then I also want to talk about the mindset that led my client to save for her rent that you can implement when preparing for your own expected expenses. So the number one example of an expected expense that catches people off guard is the end of the year holidays. They are the same time or around the same time every year, but somehow they sneak up on us every single year. We know that there may be some travel involved maybe some holiday parties, maybe some gift giving. But rather than thinking those things through ahead of time, we’ll wait until the last minute and feel overwhelmed and anxious about the holiday expenses that are creeping up. So here’s your reminder, start thinking about this now. How much do you plan to spend for the holidays? Don’t just pull a number out of thin air. Let’s really think about it. Are you going to travel? How much are plane tickets? How much is the hotel or the Airbnb or wherever you’re going to say? How much do you think you’ll spend on food? If you typically get gifts? Who are you buying gifts for how much you’re going to spend on each gift? Right Thinking about those kinds of things will help you decide how much you’re going to spend so you can be planning for it. And doing that allows you to approach the situation with so much more peace because you’re prepared. Even if you end up spending more than you plan to you can do so consciously and you’ll feel better about it. Because I remember last year around the holidays, one of my clients was going home to be with his family. And he and I had walked through all of this and planned out his holiday spending and everything. And when he came back and we had our first session in January he had overspent by like $1,000 or something like that in December. But the thing is, he felt great about it. He was still checking in with his plan while he was at home. And he intentionally decided like yep, I’m going to spend this I’m going to shop and spend more than I planned. And he said he felt good because he intentionally decided to do it. And he knew exactly how much extra he was spending and knew that he could cover it. So he basically plan to spend the extra and knew that he could cover it right so that’s the first example. Spending for the holidays and making sure you are preparing for that expense because it comes up every year. The second example is vacations. So many people go on vacation and don’t think about how much it will actually cost to go on the front end. Many of my clients will tell me that they feel a level of stress their entire vacation because they’re spending money and thinking in the back of their mind that they shouldn’t be spending it or don’t know if they can afford how much they’re spending and things like that. So they just don’t have the kind of experience they could have on vacation when everything is running through this filter of money and can we really afford this? You can approach to this the same way you would the holidays or the same way we just talked about what the holidays. So how much will flights be or gas for the car if you’re driving? How much will the hotel or wherever you’re staying be? How much do you think you’ll spend on food? Are there any special things you plan to do? How much will that cost? So often people don’t plan at all and just spend whatever if you’re stressed about it and they’re nervous look at their accounts when they get home. Or on the other extreme. Some people will just pull a really low number out of thin air like we should be able to do this trip for this really low amount. And then they’re beating themselves up and feeling stressed when they spent over that. Instead. Let’s do something in the middle, right let’s think through what your actual expenses might be and plan for that. Which reminds me of another client who was going to Disney with her husband and some of their friends celebrate her husband’s birthday. So we were planning for the trip and she was telling me that what I just described is exactly how she typically approached their vacations. So she picked this random number for the budget that ended up not being enough and she’d be stressed the whole time they were there because she thought they were spending too much. And she ended up just not having a great experience overall, because she was worried about money the whole time. And she was about to try to approach this Disney vacation the same way. And I’m like, oh, no, no, no. Like we sat down and we looked at everything they were planning to do. So they had to get flights and the hotel and they had some fancy restaurants that they wanted to try and they knew that they were going to be at the parks for X amount of days. And they were going to eat breakfast and lunch there and dinners at some of these restaurants. And so we looked at all the things they wanted to do and create a realistic plan for how much they were going to spend on their trip. And when we compare that plan to what she was thinking they should be spending. Her estimate was way too low. And she would have ended up having the same experience she typically did with her other vacations. So it’s not about spending the least amount you can it’s about being intentional and being realistic about your spending. So on this vacation, my client had such a stress free trip and she had no thoughts about money and the estimate we created ended up being right on target with their actual spending. Alright, so let’s talk about the mindset behind preparing for expenses that you know are coming up. It’s the same mindset that led my clients to prepare for paying their rent with lower pay, to prepare for the holidays and to prepare for their vacation. It’s all about believing that you have control of your finances. We’ve talked before about how your money isn’t just happening to you. So you are making certain choices and doing things or not doing things that lead to everything that’s happening in your finances. So when these expected expenses sneak up on you or catch you off guard, it’s because you’re choosing not to prepare for them in advance. And it may not be a conscious choice, right? You might not be like Oh, I could prepare for the holidays now but I don’t feel like it. But somewhere in your mind, you’re choosing not to take the time to do that. So the clients that we just talked about all decided to exercise control over their finances because they believe they have that control. They’re not just sitting back and waiting and saying do to do like we’ll see what happens and then oh, surprise, I can’t pay my rent or surprise. I can’t pay for this vacation or I think this vacation is too expensive, or I’m stressing out about money on my vacation. Right? They took action and they did the things within their power to set themselves up to be where they wanted to be. And let’s be clear, this is not a new concept for you. Lawyers are really good at doing this in other contexts. So you’re preparing for trial or preparing for a mediation or negotiating an agreement. You don’t just show up like, Oh, let’s see how this goes. We’ll see what happens. Right? You plan for it. You think about the things that could come up. You think about what the other side will likely say and how you’d respond. If that happens. You think about questions the judge could ask you and how you will respond. You think about how you can preemptively address something that you think might come up, right? You create a strategy, when you’re prepared, you feel more at ease, and yet you might still feel a little nervous, but overall, you feel pretty good because you know that you’ve prepared. So you can bring that same mindset into your finances. You don’t just sit back and wait to see what happens. You create a strategy, you think about what could happen ahead of time and you plan for it. And that way you’re not caught off guard and scrambling when things that you fully expect happen. It all stems from believing that you have control of your finances and that you know exactly what you’re doing. And you’re not just going to sit back and let your finances happen to you. So I say all that to say there are so many things that come up in life that are completely expected that we can plan for ahead of time. Remember that you have control of your finances, your money isn’t just happening to you. So create a strategy to handle those expected expenses that will inevitably come up so that you can approach them from a place of strength of knowing what’s happening and how you’re going to handle them. And not being surprised that the holidays are in November and December again this year.

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All right, I hope you enjoyed that rewind episode. Listen, if you would like some help with planning your holiday spending, I invite you to join us in Money Mastery. I will walk you through exactly how to prepare for the holiday so you can enjoy them without worrying about your finances. Just head to rho thomas.com/join to get in there. And if you’ve gotten value from today’s episode, please do me a favor and share it with another lawyer who you think would find the information useful. I really appreciate your help. 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.