Changing Your Money Mindset To Build Wealth

Tap To Share

Annette Schmidt is a Money Mindset Coach and the host of the Scared to Savvy podcast.

She joins me to talk all things money including:

  • How her childhood impacted her spending as an adult
  • Overcoming paycheck to paycheck living
  • Changing your money mindset
  • Spending according to your values
  • Paying off debt

Take a listen or watch the video interview below.

Listen To The Episode

Watch The Video

Connect With Annette

@TheFinSavvyMom On Instagram

The Fin Savvy Mom on Facebook

Scared To Savvy Podcast

Read The Transcript

Michael Lacy 0:00

You're listening to Episode 51 of the winning to wealth podcast, changing your money mindset to build wealth.

Unknown Speaker 0:09

You're listening to the winning to wealth podcast where you'll hear real stories from real people who are on the path to building real wealth. These stories will show you how to earn more money, pay off debt, start investing, and make better money choices so you can build wealth for your future. Now, here's your host,

Michael Lacy 0:30

Michael Lacy, what is up wealthy fam, this is episode number 51. of the winning to one podcast where we talk about saving, investing and paying off debt. So my dad was a high school basketball coach when I was young. And they had a really, really good team and I just loved being around them. Because to a kid, that's like a fourth grade, they were just like icons to me, right? So anytime I could, I would ride on the bus to and from games, I watched their practices sat in on film sessions. And just all the other privileges that like the other fourth and fifth grade kids just didn't have that I really enjoyed. But my favorite perk from that time was getting to actually play on the court after their practices. So sometimes if we didn't have anything to do afterwards, my dad would just come and put me through some of the drills that they would do with the high school players. So one day, I think I was in fifth grade Around this time, he actually decided to put me through some drills that they would do with the players, including making layups with my left hand. And I got to be honest, it was the toughest thing that we did up to that point. And I just struggled so badly. Like, I mean, wasn't even hitting the rim ban. And I just remember getting angry, like so angry that like tears started to form. And I remember just yelling out like, I can't do this, I want to go home. But he wouldn't let me quit. And even as the shots probably started looking worse, as time went on, he just kept pushing me. And then he kept encouraging me to stay focused on getting better each time. And then I'd eventually get there. And so once I realized and accepted the fact that he really wasn't going to let me quit and go home, I started to take his advice. And the layups with my left hand, they started getting closer to the rim. And eventually I started to believe, as I saw progress, that I could actually make one. And then I did make one. And I got to be honest, like it was one of the best feelings ever as a kid on the basketball court because I was so frustrated before that. My point in sharing this is to say that what we tell ourselves is what we often believe about ourselves. And what we believe about ourselves is often what we become. A net Schmidt is the host of scared to savvy, a podcast dedicated to helping moms live their best financial life. But a net wasn't always financially savvy. It took years of bounced checks, lots of debt, and plenty of money, mistakes before this money, stuff really started to click for her. And so I'm excited for you to hear from Annette. Not just because she overcame those things, but because in order to accomplish those things, she had to adopt a new money mindset as well. And so we're gonna spend a lot of time talking about that. But a net Welcome to the women to a podcast. I'm so glad to have you here today.

Annette from Scared To Savvy Podcast 3:31

Absolutely. I'm so excited to be here.

Michael Lacy 3:33

So yeah, I want to go back really into your childhood, the early stages. So can you tell us just what money lessons you picked up in childhood?

Annette from Scared To Savvy Podcast 3:45

Yeah, so money for me. I remember my first. So my first experience with money was getting a candy bar, right. Like I think that's like a lot for a lot of us though, right? Like, so for me, I first learned about money as just being a means to an end, I wanted a candy bar. So I got $1. And that's how I pay for the candy bar. Right. I didn't think much more of it. And then growing up, I actually had a little bit of a dual situation because I had parents who were separated. So I had a single mom who lived in an apartment and had a very strong work ethic. And then I had a father who was actually in prison for a while got out of prison. And then I ended up moving in with him because he still lived in the city where I grew up and I wanted to stay there. And we started to struggle a lot with money. So that was around when I was a teenager so it was when I was going through this really impressionable period of life that I started to have my money mindset and just my relationship money really be imprinted with this idea of it being a struggle all the time, right like I had all the fancy clothes like who did it right like if you go to I don't know if you go to Inner City High School though, like everybody is running around like for, Okay, I'm gonna eat myself but it was like South Pole, apple bottom jeans, or you know, the apple bottom, or boots with the fur all that like, but that was the thing. And it's so crazy to me looking back because everybody had it, I had it right. But like we had no food to eat really like we're getting evicted, like we knew the system on how to how long it took for an eviction process when we could do emergency assistance, how often we could do it, like we had timers on when it was up. And so my actual relationship with money, and my experience with it at that time was just this one of two very different polars. It was this living with the things and the materials with no money and then struggling to eat. So it was really my values. I think at the time of my family's values, were just very misaligned, as I think a lot of people in that situation, they just kind of go through that because you want and want and want for so much. And but you're struggling at the same time, if that makes sense.

Michael Lacy 6:04

Right? So basically, what I got from that is you really kind of equated having things with having money, right? Whether or not the money was there, it was this thing of like, oh, I've got stuff, so we're good.

Annette from Scared To Savvy Podcast 6:18

So like, I mean, Kanye song, right? Like, isn't one of them. He has a lyric where you got a $2,000 bag with no cash in your purse, right? Like that. Was it like that was the lifestyle like, I had this, you know, Coach purse with nothing in it, you know, maybe a pack of smokes because I smoked High School, but like that was it like no, yeah.

Michael Lacy 6:38

And you know, and that that mentality is like, it's super cool when you're young, right? Like, when you're in high school. It's like, Oh, I got the Jordans on. I'm good. Like, that's all that matters. But when you come into adulthood, that can really bite you in the butt. So did that mentality carry over into adulthood for you? And if so, what were some of the things that you were doing with money as a result of that?

Annette from Scared To Savvy Podcast 7:02

It did, and it didn't. So it was it was really interesting. So as I moved into adulthood, once and I say adulthood, and in my mind, honestly, I'm thinking the age of 16. And I know that that's not adulthood for most, but for me growing up it was because at 16, I got a job. I ended up getting my GED. I aced the test. Like I was smart, but I wasn't doing great in high school. So I got my GED and went straight to college at 16. Right. So for me, that's really when adulthood happened. And my mentality started to change because as I had a job, but then it was more on me to start providing for myself, I had to figure out how to get a car. I had to figure out you know how I was going to pay for my clothes. So my parents were starting to cut me off even at that time for like clothes and stuff. So I did definitely spend my money like don't get me I worked at Target like Are you serious? My check was spent before I got it. Like I was like, like, you know, like, if you people work at Goodwill, they get all the good stuff first, like no one ever sees it. That's how it is that target clearance. Like we're in there after hours, like oh my gosh, look at this jewelry that we don't need. That's like 50% off 70% off. Like, it's so crazy. So yeah, a lot of those spending habits transition from the name brand, like have to show off flashy stuff to now Oh, I can get all this cool stuff on clearance. And it became all of a sudden this mentality of like, I'm getting a deal for it. I'm being mature, right? But I'm still spending my money like crazy and is like going out the window. So what's funny is though, for this entire time, I'm living paycheck to paycheck and I'm broke. But I never went into like credit card debt right away. Right? Like, you would think like, I would be the prime example of someone who would like take out if I had a credit card at 18. I had his or 17 actually, they gave it to me. I was amazed. They gave me a student card. And but I was grown up because I had my mom's work ethic in the back of my mind. And she was scared of credit cards like she always preached keep your credit score. Good. So I didn't fall into credit card debt right away because I was scared to use it. Like I was like, I don't even like an $800 credit limit like it but to me at the time. $800 was like two and a half months and a half of like payments, right? Like, that's a lot of work. That's a lot of money. So instead what I'm doing is I'm not using this credit card right? Instead um, if I have extra need extra money as I'm like blowing my checks early, I'm like pawning my DVDs down at the pawn shop, and I'm not selling them. No, I am ponying them because I plan to get those suckers back even if I have to do it again next payday. Right. So I think my spending habits evolved to just two from the again like spending all my parents money and having this struggle to me feeling like I was being responsible because I had a credit card and I wasn't using it. But meanwhile, I had this warped sense of how to use money because I was still struggling and having to pawn stuff and have it stretched from one paycheck to the next and this again was my early adult years again 16 to 18. Um, and then I ended up getting a job at the bank. And so my mentality of Okay, I'm still not using credit cards, but how do I make things stretch went from Pawnee and stuff to, oh, I know, the bank's processing time, right. Like, I know if I write a check at the gas station on a Wednesday at 8pm, named cashing that sucker till Friday at like 2pm. So my check is going to be in the account. And I think this really just gave in my head, I was like, Oh, I'm making it work. I'm doing better than like, what I grew up in with a super struggle, like I'm not on. I'm not on assistance. I'm have my own apartment at that time. So like, I must be doing it right. Meanwhile, like, I'm buying my groceries at the gas station, like praying, the checks don't bounce, which every now and then they would. So it was really just this warped sense of response, or this warped sense of how money worked and how I thought I was doing a good job at first.

Michael Lacy 10:57

So at that time, did this like what you were doing? I mean, you mentioned buying your groceries at the gas station, you mentioned you know, all these other things, timing your payments, hey, I did the gas thing too. I wasn't writing checks. But I knew that if I pushed credit, instead of debit, it would only hold $1 for like two days. So like I looked at the

Annette from Scared To Savvy Podcast 11:19

I was like, Oh, look at this. And it's so funny. Because I saw people though daily, like at my job working at the bank, I would see people get burned. And the crazy thing was is I was like coaching them. And I was telling them how to like, work through it. Like don't do this, do this and not to try to have them like, do what I was doing. Right? I was actually trying to have them do it the right way. Right. So it was like just that disconnect at the time.

Michael Lacy 11:43

So you go through this right? And you're coaching people at the same time. Yeah, where does that disconnect come from? Because it sounds like you have the knowledge but you don't maybe you don't know how to apply it. Or in your own words, kind of where did that disconnect come from?

Annette from Scared To Savvy Podcast 11:59

100% limiting beliefs. I legit was how I grew up being bad with money that we were always bad with money. Like, here's the thing like even though I had a credit card 18 I grew up my teenagers, my preteen and teenage years with my father's and my stepmom. in a family where credit was a privilege. Like, that's where I come from, like, we didn't have an option for credit, like a lot of people go and take our credit card after credit card. We didn't have that option. like nobody was giving us a credit card. So when the money was gone, it was legitimately gone. There was nothing we could do except for ponor stuff or try and find change in the couch cushion and just wait for payday. Wait for the next check. So I think the disconnects really came because of growing up of that lifestyle and that poverty mindset, I was just, I'm bad with money. I'm good. Like, I'm good at my job. Like I was good at my job I got I hit commission, like I did my job well. And the story I was telling myself is I'm good with their money. But when it comes to me and how I use my money, I'm just bad with it. And that wasn't the case. But like, as I kept telling myself that story. That's all I knew. And that's all I believed in it. That's what became my truth, right? Mm hmm.

Michael Lacy 13:05

So what was the wake up call for you that made you realize that not only should I do something different, but I can do something different?

Annette from Scared To Savvy Podcast 13:16

Yeah, so for me, so I did this, on and off, and I say on and off because there would be days or I should say paychecks, where sometimes I would make it last right? Like with a 510 in my pocket. And I'm like, ooh, like I made it to the next paycheck. No, nothing happened, you know, not having to reach out for a handout from from anyone or anything here. Um, but then I ended up meeting my husband. And I saw how he was handling his money and his money situation. And that really just was like an aha moment for me. And I will say I'm going to address it before everyone starts thinking Oh, she met a man with money. Gold Digger, backup Kanye, not at all. So my husband when I met him was making less than $100,000 he lived in a one bedroom apartment and he was driving an O seven Camry. We met in 2011. So no, it was love not the love of money that we got together, right? Um, but here's the thing is he had that situation. And he was living his best life like he was traveling, he was eating out. And that was really the aha moment for me is because it's like, okay, I don't have to wait till I'm rich to be like living my best financial life. Right? Like I could be doing it right now. And I think what really spoke to me when I saw how he was doing it was the fact that it was the mindset like he was aligning his spending with his values. So he valued traveling and eating out. He valued those experiences. So that's where he spent his money. He didn't care about the cars, he didn't care about the clothes, the watches, so he didn't spend his money on that. And he was content with being able to travel and have fun and enjoy life in that way and his spending actually reflected that.

Michael Lacy 14:58

So talk a little bit about The money conversations that you guys had, because that's interesting. Like he comes from this place of he's kind of gotten it together. And don't you know, I mean, so. So when you're when you're coming together as a couple, and you're coming from those different places, what are those money conversations like? Or what were they like for you guys?

Annette from Scared To Savvy Podcast 15:20

Oh, gosh, I haven't thought about and so so like if the money conversations at first we, we, I just was seeing how he was spending his money, like we didn't openly talk about it. But as we got more serious, all of a sudden, he was showing me as I'm saying, like, Okay, I need to pay this bill. Right. Then I started opening up about my finances to him, and he started giving me ideas like, oh, why don't you do this? Or why don't you do that? or Why are you spending? Like, he would ask me those questions that I think I never got asked growing up or primed for, like, he would be like, why are you spending your money going out to the bar? Right? Like, why don't you pregame doll, I did it in college, like Why all of a sudden that I'm 21 and out in the world am I like, I feel like I have to spend my money at the bar, I can still pregame and still go out and have fun. Like, let's be real. So I think it was just, again, that mindset piece and those questions being asked those questions and seem like, Oh, this is another way to just live life and do it without having to flash your money or feel like you're going without it was really just a big eye opener for me. Right? Yeah.

Michael Lacy 16:25

Yeah. So I mean, was that challenging for you to kind of adopt this new mindset and these new habits and all those things? Or did it come naturally? Because it was something that maybe you were longing for already?

Annette from Scared To Savvy Podcast 16:37

I think it came naturally. Because the thing is, is that I have always been told that I am very, like, coachable, right? Or that I'm very, because I'm very growth mindset. Just I naturally have always been like that, because I'm a very curious person. So as he is like asking me these questions, or saying like, why don't you do this? I'm like, Oh, sure. Like, there's not as much resistance. I think that I had as some people might have. Because I think sometimes when you come from a place of poverty, like there can be pride, like you have two extremes, like you have the people who can be very prideful. And then you have people who have no shame. I just happen to be on that extreme of no shame. Like, I was like, I'll, I'll do like, I'll fail. No problem to like, figure it out. Right. Like, I had no problem doing that. So for me, there was no shame in trying something new, like the worst thing is, I was going to get another overdraft fee. Okay, well, I paid I don't know how, like, I probably single handedly kept Wells Fargo in business for a few years with those, like, so serious. Um, so I really think that being open minded, in that sense really helped me along my journey on accepting and just being open to there's another way to do this, I don't have to struggle, like, there's so many more opportunities, I don't have to make thousands of dollars to do it either. Or hundreds of thousands of dollars.

Michael Lacy 17:53

So I know when we talked off air, you mentioned that you recently realized that, hey, I do have a debt free story. And it's not like everybody else is, but it's there. So I want to kind of pivot a little bit and talk about that side of your journey. So how did you find yourself in debt? Because earlier, you mentioned that, like, you had a credit card, you weren't using it, but somehow you still found yourself in it. So what happened?

Annette from Scared To Savvy Podcast 18:19

Yeah, so I took out student loans like this entire time. I mean, I guess this is a big part of my journey, right? Like, this entire time that I'm struggling, I'm going to school full time to three quarters of the time, so I'm working full time going to school full to three quarters of the time, depending on the season. Um, and I unfortunately, I don't come from a background where my parents can provide to pay for school. And when I started making an income, even though it was like $30,000 a year financial aid said, No, you make too much. And that really sucked. Like I was like, Okay, I was ready to join the army, because I'm like, Well, how am I gonna pay for school. Um, so the alternative to joining the National Guard or the army was to take out student loans. And that's what I did, I took out a lot of student loans. Um, and then what happened was, I ended up with like, almost $40,000 worth of student loans. And I had to get that paid off. So my debt free journey actually held on to that up until three years ago, I held on to that debt, just paying my normal monthly payments. And so I paid off about 10 grand up until three years ago, and then I was pregnant. And I decided at once I was six months pregnant, that I did not want to put my son in daycare, I had the opportunity to stay home with him. I never had that I came from a family of again, you know, a single mom, that we had to work there was no option. So now that I was presented, and again me with this growth mindset, I'm not gonna say no to a good thing or, you know, pass up an opportunity when I see one. So I was presented with this opportunity of, Okay, I can stay home but the only way it was going to happen was if I wiped out that 30 Grand like there, there was no way otherwise we were going to live on one income and still have to pay is basically student loans. It's like a car payment. I mean, I could refinance it and pay it off over the rest of my life. And maybe it's 100 bucks a month, but I was not willing to do that either. Right? So that was a deal to me and my husband made and he was like, here's the deal, you wipe out the student loan debt, and you can stay home like we could, that's what we can afford. So I knew six months, I was going to have to find the money some way. And this isn't a traditional story. And I say traditional, because I think but I think of the debt free story is I think of people pulling up their bootstraps, and like, working their butt off and just making the payments every month. Well, no, mine is over the last 10 years or eight years at the time, I believe, um, or my career, I had put stash money in other places, right? Because I'm a big believer that even if you have debt, it doesn't mean you can't have other goals, it doesn't mean you can't save for retirement, it doesn't mean you can't have an emergency fund or invest. So I was paying off my debt, and doing all of those other things. So what I did up until the six months is I was like, okay, maybe I won't win the lottery. But here's what we can do to prep, I started decreasing my investments to my retirement. So I decreased it to the company match, because I'm still taking that free money when I go. And here's the thing, a company didn't know, I was leaving, like, I knew I was leaving, I feel real bad. Like company didn't know I was leaving, I was holding out for that bonus. But I decided to reduce my invest or my retirement to the company match, I increased my employee stock purchase program, my contributions there, because that was a 25 or 20% discount, I was getting on the company's stock and the company averaged like 15% rate of return over like the last five years, right? Like, it's a solid company. Um, and then I decided to round up my student loan payments, so I'm paying as much as I can on there. And I'm like, at the end of the six months, here's what we're gonna do, I have the money, right. And I think a lot of us do have the money when we come when we're faced with debt. It's just this isn't traditional, conventional financial advice. And so we think of it as not an option. Well, I like to always think outside the box and barn rebels, I'm like, I'm staying home, like I have the money. And I actually ended up pulling, I use my bonus to pay off one $3,000 student loan. And then I ended up pulling out my 401k. And I at the end of the six months, and I ended up paying off my student loan that way. So in my mind, it was like I was going to take a hit, I was going to have to take a hit somewhere, either I was gonna take a hit, and I was going to work and paid for daycare, or it was going to take a hit and lose my company's stock program, which is a 20%, or I'm going to take a hit with taxes. Either way, it wasn't a great situation. But those are my options. And I chose what I thought was the best option at the time. So I'm really proud of that. And I think it's a really great story for people to know that this is the exact reason of why like your debt story and how you pay it off. It's, it's what works for you. And it doesn't matter what you know, your friends, your mom Dave Ramsey the Guru's It doesn't matter what they think, because they're, they're not the ones paying your bills, and they're not the one living your lifestyle, right. And that's just where I had gotten with myself is like, people are gonna frown on it. I'm a financial advisor, like I know better, quote unquote, like conventionally. But I also don't want to work. And this is my only option.

Michael Lacy 23:20

Gotcha. So, I mean, looking back at it, though, like looking at your journey in totality, like as you because you mentioned before you got to that point, like you had been kind of paying it off a little bit. Looking back in retrospect, like do you wish maybe you had focused a little more attention on your debt?

Annette from Scared To Savvy Podcast 23:37

Oh, my gosh, yeah. Oh, yeah. Like looking back when I so I have gone through a lot of mindset shifts over my life and over my financial journey. And looking back, I wish I had up to my contributions, that employee stock purchase program was a crap ton. A lot sooner, because looking back, I'm like, gosh, I left so much money on the table. And I also wish that I would have paid off that student loan debt. But I wasn't thinking that far in the future, right. Like I was, I was just I was avoiding it. That's literally what I was doing. I was like, I'm paying the thing. But I didn't want to think about like, Okay, what happens when I get pregnant because pregnancy wasn't a surprise, we planned for it. But because I wasn't willing to look that far in the future. I wasn't able to plan for it at the time. So if I would have thought sat down and thought about it and been real and honest with myself and been like when I'm getting pregnant and I have a kid do I want to stay home like I knew in the back of my mind that was an option. And I knew that was an option because my husband's family, a lot of them they've been able to do it so they know how to make it work. So he knows how to make it work. He's seen it he grew up with a stay at home mom. And if I would have been real with myself and sat down and did just the inner like work and like thinking it through and just not avoiding it because it's just painful like think I have to eventually face this that I would have set myself up and I wouldn't have had to take as much of a loss on my money in the long run, right?

Michael Lacy 25:03

So can you just talk about I mean, just in general terms, the value of sitting down and really evaluating his finances on a regular basis, like, especially if you're gonna have you know, you're gonna have a big life event like you're you're planning for pregnancy or you want to buy a house or, you know, you have these goals. He talked about this the importance of just creating a general awareness of your overall financial state before you make that decision.

Annette from Scared To Savvy Podcast 25:29

Yeah, I think it's, it's so important. And it's so important because of the fact that if you do the work, now, when you get your mindset, right now, it's going to be that much easier down the road to write. Because if you just sit here and wait to have the mindset of like, I'm going to face it, when it comes, then you're not going to be prepared, you're going to be frantic, you're gonna be scrambling. And like when we come from a place of fear, and like, again, that like poverty mindset, right? When we come from that place of scarcity and lacking, you start to think about, okay, what's the one thing that can help me? Like? What's the immediate thing that can help me like for goals, long term thinking? So the longer or the sooner you can start to face that the better? Because think about it this way? Right? Like, how often are you living paycheck to paycheck? Or are you living in debt? And do you tell yourself, like, I'm gonna, like, once I get a raise, I'll pay it off. Once I get a lump sum of money, I'll pay it off. Once I get a bonus, I'll pay it off. It's not going to happen. And you know how I know that is because guess what, you got a raise, I'm sure you're not making the same amount you're making when you're 16. But you're still stuck in this paycheck to paycheck cycle. Right? Another thing, you get a lump sum of money every year, we all get a lump sum of money every year is called our tax refund. But why is it after tax refund a month or two later, we're stuck like, Oh, crap, we're still struggling waiting for next year's tax refund, for some relief is so that's why I tell people that it's not your income. It's not your income or your spending. That's the biggest obstacle for you. It's your mindset. Like that's as important if not more important than your income and your spending. So stop waiting to take a look at these six financial situations, these financial decisions and stop waiting to take action. Because you have the opportunity to take action now. And you've already been waiting, right? Like if you're facing debt right now. And you have debt, you've been waiting to take action, you've already done that, because you've had the debt for how long and you haven't made a move yet. Right? Like you've had so much opportunity, but I get it. And the reason you're not doing it is because you're coming from this place of avoiding it and fearing it. And I just want, I want to encourage you to change your mindset and be like, okay, what's the worst that's gonna happen? If I look at it? Oh, man, I see that I have that. You know that anyway, right. But now you can start getting through that working through the grief or the pain that you feel with that debt and that money. And now you can start finding out solutions on how to Okay, how do I get rid of this? Because I don't like happiness. Right?

Michael Lacy 27:55

So once you had cleared that, that your debt, how did it feel like Yeah, yeah, cuz I mean, I talk to everybody else that have they know, they have kind of the conventional story of like, Oh, I was going at it for like, three years or whatever. And you went a different rate way. So did it still feel the same for you?

Annette from Scared To Savvy Podcast 28:14

Once I'm great. Like it sucked that I had to, like, take it because not only here's the thing, like with me, I knew how to prep myself. So that's why this isn't looked at as a great idea conventionally. But I was a financial advisor, I knew how it was going to affect my adjusted gross income. I knew the taxes, I was going to have to pay on it. And I planned for that, right? Like so even though I was taking that I plan for it. But as soon as but I was so quick to write that check. And I was like, yep, here you go. We're done. Like, I'm ready for the next chapter of my life. And now I never have to think about it again. And I tell you, if I ever chose to go back to school, get an MBA, whatever. I'm not taking out a student loan. Like I will figure out how to pay cash for that. Like, please believe because I think and just like credit cards, right? Like the same can be said with people who get stuck in this huge pile of credit card debt. Like once you're out of it, you're like new things not going back, right? Like I'm finally done. It's literally like a car payment every month that you're stuck paying, and there's so much more that you can be doing with your money.

Michael Lacy 29:10

Yeah. And so once you had the debt out of the way you said, That's exciting. You're like your pomp. What did you focus on after that? Like, I know, you kind of have a baby in the mix and like, but did you have other financial goals that you want it to work towards?

Annette from Scared To Savvy Podcast 29:24

Yeah, so I mean, so for me, um, it was sad losing my 401k like, I'm not gonna lie, like I mean, obviously, like I saved up 30 Well, I saved up 40 grand but again, I had to account for taxes and everything. I'm so sad that I lost that much of savings. So for me, I really started to get into this place of first how do we adjust now to one income because not only did like I lose that savings, but we also lost in my our Boston. We also lost my income which was 55 60,000 not including bonuses, and I know it may not seem like much, but for us, that was a huge chunk of money that we were losing every year. So, for me after paying off that debt, I definitely started to focus my mindset on Okay, let's now track our spending, like, I need to reassess our entire situation. And we are kind of in saving mode. So we were very, so we were very focused on Okay, let's kind of stash our cash because we also didn't know how much baby was going to cost. Like if I if we had a difficult labor and my before insurance cost of my labor was like, over $100,000 thank goodness, we had insurance, right? Like our out of pocket I think was seven grand is seven to 10 grand it was, it was a ton of money. Um, so that right there definitely, like shocked us of like, okay, let's just stash our cash and figure out like, where life is at. And but it felt so good, because I could stash all the money that we would have thought we would have to put towards these debt payments. We didn't, again, we didn't know that all we had was the mortgage. And again, speaking of mortgages, I'm gonna bring this up, because I think a lot of people over leveraged themselves when it comes to their debt on their home, we set up a mortgage, we got approved my husband's income only again, I think it was like 100,000, under 100,000. At the time, we got approved for like a $600,000. House, I was like, No, because we literally did it on his income only we're buying a house while I was pregnant. And we did it on his income only because we knew I was going to stop working. And we got to host half that cost, right. And so now we could work and we prepared ourselves for that. And that's him, like he's teaching me like to just face it. Like his thing is what's the worst that can happen? It is what it is. And I love that about him. So because he has that mindset, he's got a mortgage where we can work at McDonald's, honestly. And we could pay the mortgage. Now we could work somewhere else, because we got a rental property since then. So that helps pay the mortgage. Right? Like, it's these moves, though, that we're making by again, not avoiding our money that has really set us up for success.

Michael Lacy 32:00

I love that. And I mean, I've shared you know, you guys listening know that I've shared like, we did the exact same thing. We use my wife's income, she was the lower of the two. And they approved us for like 400 grand. And she had she was a teacher. So I mean, that tells you like she's not making a killing. But it was just like how, like, how did you how do you even do that? How did like how do you even compute that we're able to pay off that much on that salary? Like it just doesn't make sense. So for you guys, people

Annette from Scared To Savvy Podcast 32:30

are doing it. Yeah, absolutely.

Michael Lacy 32:32

Yeah, it happens every single day. And so for you guys, like how challenging or wasn't challenging at all, making those kind of decisions. Because again, you're in pare back mode, you've gone down to one income. And there's a lot of life, you know, Scituate So were you kind of second guessing it like maybe I should have worked a little longer or was that way.

Annette from Scared To Savvy Podcast 32:54

So for me, I little bit. And the only reason I say a little bit is because my husband, when we were looking for a house, and we were still filling out our budget he wanted to just see. And this is where I'm like it's a kicker, he wanted to kind of see what the 350 to $400,000 houses were. Don't ever do that. Because there's a difference between a $400,000 house and a $300,000 house. So we found a house that was 350,000. And there were other offers, and there would have to be a bidding war most more than likely and it was a gorgeous, and it was in the same neighborhood. Um, but my husband looked at me and said, you might have to go back to work. And it wasn't that instance, though that I'm like, like, I'm literally for me to go back to work. I'm the whole point of that with daycare would be for me to pay daycare. And for me to help pay the mortgage. It wasn't worth it. So it was hard, because I had to give up open floor plan. I had to give up the new appliances. I had to give up the island. And you know, I was it's like a five blocks away, but it's the boozier neighborhood. I had to give that up. But in the long run, it's so much more worth it because we actually probably wouldn't be able to have the rental property. We wouldn't be able to live the lifestyle that we are able to live like I am very open on my Instagram. I get Starbucks all the time. I am not ashamed of that Starbucks ain't gonna let me retire. And he's like not getting Starbucks isn't gonna have me retiring anytime soon, right? And technically, I already retired. Like, it doesn't matter where my passive income comes from. I've already retired. But it was really hard, but I think we just had to, I had to level out with myself and be like, Is it worth putting my kid in daycare? Because I didn't get that experience growing up that one on one experience because my mom had me in before school care and after school care and school, like do I want to and she couldn't come to a sporting events like do I want to have that be the lifestyle for my son and for people who do? Absolutely there's nothing wrong with that. It was just my preference. I didn't want to have to do that.

Michael Lacy 34:47

You know, I love the the contrast that we just got there because it's something that I touch on all the time and I want to talk about it for a second. I always tell people like when you're talking about getting your finances together, getting everything in order. A lot of people focus on those $3 and 50 cent decisions like Starbucks, but you guys chose to focus on the $350,000 decision. And that allows you to keep doing what you enjoy in terms of the $3 and 50 cent decision. And so it just speaks to like, yes, the little things, they are important. But if you just get a few, just two or three of the major milestone decisions, right, it will set you up so much better than spending your life trying to nickel and dime your way to financial freedom. It's it's so much like,

Annette from Scared To Savvy Podcast 35:34

how, how miserable is that? Like, are you like, if you see me without Starbucks, like, my friends have no like, Oh, girl, and I'm like, I know, like, he got me right, like, my husband will get it. But like, it's just miserable because you feel so deprived and only lasts for so long, right? So like I tell all my clients, I'm like, you need to budget and self care, because you're gonna get burnt out. Now, I'm not saying live outside your means I'm saying put it in your budget, right? Like, that's the key. And it's just, it makes life so much worthwhile. And also to I want to speak on that, like, if you get the like you said, I love how you said that. If you get the big financial decisions, right? It's gonna set you up for so much more opportunity, right? Because that's what money is. It's the, it's the option for more opportunity, it gives you more opportunity. So if we would have got that 350 thousand $350,000 house, even if we may have been able to afford to get the rental, the bank might have told us No, they might have said you have too much debt, you can't take that to income ratio, you can't get it. But because we were able to put ourselves in a situation where we only have a home loan. And then we now most recently only have a car loan because I mean, that happens we had to get a new car. Um, but but because we did that our debt to income ratio is a beautiful so we could get we could take out a loan on a second house and then have them pay the rent, or the mortgage plus our mortgage. Right like, but again, by getting those big decisions, right? It presents so much more opportunity for your finances.

Michael Lacy 37:00

Yeah. So you know, the last thing that I want to ask you here is I always like to end the episodes on a bit of a hypothetical scenario. So let's say that there's somebody out there who really has that desire to get their spending under control, they want to pay off debt, they want to budget better, they want to do all things, all those things, but they're like you were they feel like they're just awful with money. And maybe they have no clue where to start or what to do. What would you say to that person to give them a little hope to give them a little kickstart on their financial journey?

Annette from Scared To Savvy Podcast 37:33

Okay, so a couple things. So I'm gonna break it through like the three I don't know how many steps, whatever number of steps that I have my clients, and I do too. I still do, right, like I'm going. My next up level is wealth consciousness. And that's what I'm doing as I up level 12 consciousness. So the first thing I want you to do is I want you to let go of your current situation and your current debt, I want you to visualize like what you want life to look like, right? I want you to put yourself in the feeling of what your debt free life looks like, what your hundred thousand dollar job life looks like, right? How does it feel? What are you doing? Because you can make $100,000 and have to work 60 hours a week? So is that what you want to do? Right? You can be debt free, but still living paycheck to paycheck. So that's what I want you to first think about your vision on what you want your life to look at. And it's kind of like what you want your y's to be like, why do you want to have life look this way? Like, why do you want to better your financial situation. And then what I want you to do after you do that is to take a look at your last 30 days of spending. I want you to do this because if it like for me when I had to do it, it's going to be hard, it's going to be a little bit painful. But again, you have to just work through that pain, and you have to stop avoiding it. Because that's going to be the first step. So take a look at your last 30 days of spending. And I want you to categorize everything, no miscellaneous categories, because that's the big excuse for overspending is Oh, we had to do on XYZ, I don't know what is miscellaneous? No, I want you to put literally everything in a category. Why I want you to do that is because my big up level when I met my husband was like, it was okay he is spending based on his values. This is going to have you get real honest with yourself and be like, okay, am I spending based on how I value my time and my money? So if you're spending it on subscriptions that you don't even either have time to use or you just don't use anymore, you don't value them, cancel them, right. Like, there you go. You just have money. If you're spending on eating out like so me in July, we found out I man. I did this, because I do this at least every quarter, but I did this and I was like, Oh my gosh, we spent like $300 eating out and our grocery budget was the same. What like how much food can one person eats? Like we're a couple of fatties. Um, but then but that but doing it made me realize like, okay, we're doing something wrong here and I knew we weren't because like we were kind of getting close. But that way you can see okay, where is my money going and it's going to subconsciously make you start to think about like Do I like that my money is going there. And then you can and then what I'm going to have you do is i'm not going to have you create a cookie cutter budget, I'm going to literally have you take that expense audit you did. And I'm going to have you make a budget based on that, that's going to be a blueprint, you're going to pretend like you're gonna have all those categories on your budget. And you're just going to write into new dollar amounts, so that way it stays within your income and you're living within your means. So however much is going to eating out, you may have to adjust the numbers, but keep that if that's what you value. If you find Oh, close, I don't really value that, cut it out. And don't put it on your blueprint. And whatever is left over, you're going to either put towards debt, or you're going to save it or you're going to invest it. That's really the process that I like to have people do love it, love it. And

Michael Lacy 40:43

it's so simple. It's exactly what I do. It's exactly what I teach. So glad to hear that from you as well. But this has been incredible. I've had a lot of fun talking to you and learning more about your story and your journey. But the last thing I want to do is give you the opportunity to share where people can connect with you if they want to follow along with whatever you have going on.

Annette from Scared To Savvy Podcast 41:03

Absolutely. So I am a money mindset coach. So if you want to have meet with me, DM me feel free. You can find me on Instagram at the fin savvy mom. And you can also find me on Facebook at the fin savvy mom. I do work a lot with women. I'm open to men I like guys, I have a son, I have a husband. But I do specialize working with women and moms. So you can also join my my group, which is called financially savvy moms. And then I am going to be having a debt mindset program that's going to be coming out in October so feel free to follow me on Instagram again the at the fence, Abby mom, and you'll be able to find all the details about that if you want to join, just get the freebies whatever floats your boat, I'm here for it.

Michael Lacy 41:47

Yes, you guys be sure to check that out everywhere she just mentioned, you can do that by going to win to wealth comm slash Episode 51 or by simply tapping the link to the show notes in the episode description. And she didn't mention it there. But wherever you're listening to this, you can also search for scared to savvy and check out an it's podcast, I was actually a guest on her show. And she does a really good job. So again, check all of that out by heading to winning to watch.com slash Episode 51. And all of the links to everywhere you can connect with the net will be right there. All right, so now it is time for this week's win of the week. In the same way that I couldn't make a left hand layup because I was telling myself how bad I was a net couldn't make financial progress while she held on to this belief that she was bad with money, even though she was helping other people with their money at the same time. So my question to you is What are you telling yourself? Do you still believe that you will never pay off your debt? Even though you tune in to these stories each week? Are you still telling yourself that you're bad with money instead of applying what you've learned on this podcast so far? Like I said earlier, what we tell ourselves is what we often believe. And what we believe about ourselves is often what we become. So think about what you're telling yourself as it relates to your money this week. What do you believe your limitations are, then I don't just want you to go out and seek the information to address that perceived shortcoming. But I want you to actually put that info to work because, as we saw with a net story, you can know what to do, and still just not do it. So examine your thoughts and beliefs about money this week. And if you find some negative ones, do the work to slowly start changing them to positive beliefs and actual strengths of yours. One way that you can do this is by surrounding yourself with people who can actually encourage you. When those negative thoughts start to creep in. You can join almost 15,000 people who want to pay off debt and build wealth by heading to winning to wealth.com slash teammates that is winning to wealth.com slash teammates. Also, if you enjoyed this episode, be sure to not only just apply the info you learned, but also leave a five star review. I really appreciate those and they go a long way in helping the show grow and be recognized. So again, consider leaving a five star review if you enjoyed this episode. But hey, that's all the time I have for this week. So until we talk again, keep racking up those wins one at a time. Take care.

Unknown Speaker 44:37

You've wrapped up another episode of the winning to wealth podcast. To learn more about how you can start making winning money decisions head over to winning to wealth.com

Related Episodes

See also  How Eliminating $490,000 In Debt Brought This Family Closer Together
See also  New Budgeting Style Helps Mom Escape $84k In Debt

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment