The Fiscal Fitness Podcast

Episode 102:

Why is Managing Our Money So Hard?

Host name: Kelsa Dickey

Listen to the episode and read the companion blog post here.

Download the PDF version of the transcript here.

Hey, there it’s coach Kelsa and I am excited to talk with you today about why is learning to manage our money. So darn hard. And I am going to give you some steps you can take to make it a little bit easier, but also just reassure you that if it is hard, chances are you’re actually on the right path.

So in psychology, there is a concept known as the four stages of competence. I don’t love that name, but I’m not the one that picked it. So what it relates to is the psychological state involved in the process of progressing from not being great at something or incompetent at something to competence, but particularly in a skill. So it is essentially a learning model. Again, I don’t love the name stages of competence, but it’s this idea of how do you go from not knowing how to do something to being a master at something?

And what are the stages of that process? And believe it or not, we’re going to follow this psychological process for every skill in life that we want to learn. And I want to start there by reminding you, if you’ve been listening to this podcast for a while, you probably know already that managing your money is a skill. Just like any other skill, take cooking. For example, I am a terrible cook. You do not want to eat anything that comes out of the kitchen if I have cooked it, but there are some skills that I am naturally good at managing money is one of those things.

Now, some skills, like I said, we’re all going to be naturally good at, or you might find yourself naturally good at it. And then some, you might find yourself just really like the process of learning. It is really hard.

You know, there are some people who can pick up a second language fairly quickly. There are some people who are just very athletic or very coordinated and they can pick up a new sport relatively quickly cooking arts and crafts. If you think about something like painting, some people are just much more gifted at those types of skills than others, but we guard lists of where you’re starting from or how easy the journey is, how natural you feel at it. No matter what the skill is, you can learn to become better at it. You can continue to make progress and managing your money is one of those skills that even if you don’t feel like you’re naturally good at it it doesn’t mean that you can’t learn how to be a master with your money, which I just think is really cool.

So I want to talk about the stages of this journey first. So there are four different stages. And if you go to the show notes of this podcast, you’ll see a diagram that really illustrates these stages and what they look like. So if you’re a visual person and obviously we’re in a podcast format, so you can’t see what I’m looking at, then I want to recommend you go to our website and click on the show notes for this episode. And you will see a diagram and it will really help to make it much more visual for you. If you are sitting down and you’re at your desk, or you’ve got a pen and paper handy, you can actually draw this out. And I’m going to describe to you what to draw that way. You’re looking at something while I’m explaining it. So I want you to think of like steps.

So a staircase and you’re going to have four different steps. The very bottom step is unconscious incompetence. So I want you to think about these words, we’re incompetent at something. So we’re not great at it. And we’re unconscious about it. So in this stage where we first start is that we don’t even know what we don’t know. Right? So if you’ve ever had one of those moments where you discover that there’s this whole part of the world, that’s out there and you didn’t even know it exists, and you kind of feel like your eyes just got opened up to it. That is right before that moment, you were in unconscious incompetence. So we don’t understand or know how to do something. And we don’t even realize that there’s a deficit in that skill. We don’t realize that we don’t know something, or we don’t know something, but we don’t see why knowing it would really matter or how that skill would be useful anyway.

So we just kind of like keep it at bay and the unconscious incompetence stage. So the length of time that a person spends in this stage depends on their desire or the strength of their aha moment or the aha trigger to learn more so in order to get to the second stage. So the second step up is called conscious incompetence. So in this stage, we’re still not good at this skill, but we’re fully aware of how bad we are at it. And in order to get from the first step to the second, we have to have an aha moment a trigger. We call this the Eureka session in our coaching program, because that’s exactly what happens is you realize just how much more cool things you could be doing with your money during that session. And what it helps is it helps you to get up to the next step, which is, the goal of the stages of competence, this whole learning model, your goal is to stay on the model to keep going, do not abandon it, do not get off of it, no matter how hard it gets, no matter how clunky it feels or challenged you are or unnatural something is no matter how badly you want to give up your goal when learning a new skill is to keep making progress, keep going, and don’t abandon the journey.

And one thing that can help with that is that aha moment of, Oh, there’s so much more that I can do. So in order to get from unconscious incompetence to conscious incompetence, again, we’re still not great at it, but we’re at least fully aware that we can get better at it. And we’re recognizing our deficit and we see the value in addressing that deficit. So we actually see that that gap is causing us harm or damage or costing us a lot of money, that kind of thing. And so it, it’s what allows us to keep going. And the reason that it’s so important is because in the stage, the second stage conscious incompetence, it is hard.

It is where a lot of learning and a lot of changes are happening. It feels extremely clunky. In this stage, chances are not only are you aware that there is this deficit, but if you look around and you are fully aware of just how much you don’t know, right? And so it can be really overwhelming, can feel really burdensome if you will, where it’s like, I don’t even know where to begin. I don’t know where to start. I don’t even know how I could possibly get through all of this. So again, if we’re not careful, we can just abandon it and we can say, so why does it matter? Or I’ll never get good at it. There’s too much to learn. There’s too much that I don’t know. This is also where your own core beliefs on your own abilities can creep in where, so if you, if you tend to think things like, well, I’ll never be good at with money anyway.

So what does it matter? Why would I put in all this work, if that’s the case or I’m not smart enough to figure this out, or I don’t have the time. I don’t really care enough anyway, like it’s not going to really matter for me. I’ll always be broke. So like the broke mentality of these are some things that you think often they’re going to creep up really bad in the stage. So in the conscious incompetence, which again is just the second stage of the four stages. So we’ve got a little ways to go and it’s already hard, right? And I want you to know that because managing money is a skill, just like a lot of other skills. This is the same for everything. It’s not money that is hard. It is learning a new skill that is hard.

And in our example, we’re simply trying to learn how to manage our money better. We’re going to feel all of these same journeys with anything that we do. So now let’s say you want to learn a new sport. This is really where imposter syndrome can creep in. You can look at the people on the team who are better than you, and you can kind of think like, Oh, I’m the weakest link, or I can’t, I’m not as good as these other people and that kind of thing. And we can really beat ourselves up a lot in the conscious incompetent stage. Again, the word to think about here is sort of like ouch, right? Like this is a pretty painful stage to be in. We have to unravel so much information that it can be really overwhelming. And we don’t know how to do that very well in this stage.

Sometimes we can go to Google and start searching things, or we maybe hire too many coaches because, and then we get inundated with too much advice. And we don’t take enough action. You know, you kind of freeze cause you’re not sure what to do. So that’s conscious incompetence. The third stage, if you keep moving forward in the second stage, so you keep learning and taking action. Both, we’ve done an episode on this podcast before all about the difference between passive and active learning, passive and active growth. And in this stage, it’s really where you want to balance those two. So you’re probably going to be learning a lot passively. So you’re going to read books or Google things, read articles, watch YouTube videos, that kind of thing. But you also want to make sure that you are applying that new knowledge and sort of experimenting and testing it and seeing what works and doesn’t work for you.

And knowing that failing at something is part of that journey to narrow down the steps that you’ll be successful at. So I definitely think this is the initial couple of months of coaching with us can feel so hard because what we’re doing is putting in place a whole bunch of learning and changes all at one time. And we are paying attention to really small nuances. How did that change feel? Did you like it? What did you not like about it? Did it work? Did it have the intended intended consequence? Did it have any unintended consequences and let’s continuously reflect and make adjustments and tweak those things until we get it just right. So we know how to do that and stay very logical and rational about it and make stay focused with it and make sure that we’re not looking at those things that don’t go well and tell ourselves Oh, that didn’t work.

I’m bad at this. Right? So we know that those, that growth is part of the journey in this stage, that the painful part is part of it. Right? And if you think about cooking or baking you might start by learning how to cook or bake and make nine out of 10 things wrong first. And in this stage, what you do is you keep cooking, you keep baking new things and you maybe get to five out of 10, things are, are wrong and the other five are really tasty, right? And then you start to get to three and then two and that kind of thing, but it really takes that active learning. You can’t just like read a cookbook and not actually try to cook something in the kitchen to get better at cooking. You know, you really want to make sure you’re being an active participant in the stages of learning.

And when you do that, what happens is you in those actions, you get to the third level. So the third step is conscious competence. So think about those two words conscious. So we’re aware of it, competence though. So this is the first stage that you get to where you’re actually feeling good at that skill. You’re actually feeling competent in it versus incompetent, but you’re very aware of that skill. So this is where you understand how to do something and yet demonstrating the skill requires focus and concentration. So it’s not something that comes super easy to you yet, but you are able to do it so long as you focus and so long as you concentrate. So in the first couple of months that we’re working with somebody we’re in that stage two, like I said, and we’re doing a little bit of experimenting and we’re keeping an eye on what works and what doesn’t work.

And we really figure that out. And in the last couple of months, what we’re doing is we are, we already know what works and now we’re just doing them over and over and over again, we’re in the conscious competence stage. So we’re doing them over and over again, but we’re very aware of what we’re doing. We probably need to block things off on our calendar to make sure we remember to do them. And we really need to probably like set time aside and say, okay, this is the time I’m going to update my budget. Cause when I sit down to update my budget for the first time, I’m getting better at it, but I still have to think really hard about what I do first and then what I do second and what I do third. But those steps are now the same every time.

And they’re getting easier for me to duplicate, right? So the conscious competence, the third stage, this one that we’re in feels easier. And it also feels a little boring. So the word we usually use for this stage is “blah”. So you might feel a little blah about your learning or your growth. And so in, in here’s why that is. So when you first discover something we have that aha moment where like, Oh my God, I want to get better at this. Here’s how I’m feeling. I know there’s so much more I can be doing. And we get excited and in the second stage there’s so much changing and so much growth. That’s happening. That as hard as it can be sometimes, and as challenging it can be, you’re also making massive, usually the progress in the first couple of months in the second stage is pretty significant.

And those changes are what keeps you going. You can see the progress, you feel different you’re proud of yourself for getting through the hard part, you’re trying new things, all of those lead to this idea of like feeling good about the changes you’re making. And then you get to the third step, this conscious competence. And now we’re just repeating the same thing over and over and over again so that we can get really good at it, but it becomes a little boring. Sometimes what happens in this third stage is that the progress you’re making, isn’t quite as tangible or obvious to us as the second stage. So even though the second stage is harder and a bit more painful, we see massive growth. Usually we can feel the growth, we can feel ourselves changing. And in this one, we don’t really feel ourselves changing the progress.

Progress, maybe feels a little slower or a little less dramatic. And so it can be harder. It can feel like, you know what we’re doing. Like we start to question it like, is it really working as well? Should I be doing something even better? Should I be doing this faster? Like all that kind of stuff. When in reality, that’s exactly how it should feel because what we want when it, especially when it comes to managing our money is, I want managing your money to be a little boring for you. I really do. Like, I don’t want it to take up so much time that you really have to overhaul your whole schedule for it. I don’t want it to be so dramatic that you really have to like emotionally prepare yourself to do it, managing your money. We want to put some systems in place that become like rinse and repeat.

They’re easy. You become so good at them that you do it without even thinking about it. That kind of thing where I want you to feel excited about your money is with the possibilities and the things you’re creating with your money, but not the actual managing and the logistics of it. So this stage can actually feel a little boring and I think that’s okay. So what we try to do in this stage, we’re very aware. We know it’s coming with our clients. We can see when it’s about to happen. We like to infuse some fun into this stage. So we like to find some ways to have more fun with your money. Little reward systems, little perks goal and reward systems get created at this point where typically the goal itself is motivating enough.

Before here, you can see yourself making progress and that motivates you enough when you get to this third stage, it’s kind of like the progress is slower. So we need something else to keep you excited and motivated. But again, we’re totally ready for it. And you know, we get excited about this stage because we also know what we’re doing is we have found the sustainable system and you know, something that you can manage your money in a certain way for the rest of your life. And it works for you because if it’s not sustainable, then you’ll abandon this journey and you’re going to find yourself back at square one all over again. So we actually want this stage to be a little boring that actually that tells us that we’re on the right track of your money mastery.

Okay? So in this stage, what we need is time. So time and experience is what helps us to move through from conscious competence, which is the third stage that we’re in. So we’re just rinse and repeat doing things over and over again. We’re practicing them, we’re doing it even on days. You know, I think about days that I don’t want to work out. And sometimes I think those are the most important because just getting yourself to move your body, to lift weights or go for a run or something like that, what you’re doing is you are building the habit regardless of your desire that day, right. Which is super important. And that’s what we’re really focusing on in the conscious competent stage.

And we do that over and over and over again until we get to the fourth and final stage, which is unconscious competence. So again, we’re competent in it. We’re good at it. And we don’t even need to be conscious of that. So we’re unconscious competence in this last stage. So this is where we have so much practice with a skill that it has become second nature and can be performed easily, or feels like effortless, or you can do it.

And I always think about if you can be updating your budget, paying bills, doing all of that and doing something else at the same time, like homeschooling your children or, supervising your children or something like that. Like you can multitask while you’re doing it. If you can be performing your money management tasks while executing another tasks, that is a good sign that you were at the unconscious competence level. Okay. So in this stage, there are actually some things that we can do to strengthen your competence even more. And really what we’re shooting for is ultimate mastery with your money. And I really want to ask you a couple of questions really quickly before I dive into those things that we can be doing.

The first question is, have you ever considered the possibility that managing your money could be performed easily? That it is something you could do and feel as if it’s just second nature, it’s just something you do without even thinking about it? Have you ever considered that that’s even a possibility for yourself? I’m here to you, that it is. It’s the skill that we want to help you build. That’s the level we want you to get at. And so I want you to know that it is absolutely possible. It does not mean that it’s all automated and you never look. I want to make sure I’m super clear on that. It doesn’t mean that you don’t invest any time or effort into managing your money. What it means is that you can do it and it’s easy and natural, and it doesn’t feel hard or clunky.

And it all just, it like it’s all in alignment, right? Like the effort you put in feels very balanced with what you’re hoping to get out of your money, what you’re hoping to get out of your money, you feel so connected to it, that it helps keep you motivated for those daily or weekly efforts you’re putting in. So it’s all like a really great circle of life, if you will, when it comes to managing your money. So I do know that it is possible. The other thing that I want to ask you before we move on is where are you today,

Today on this path? So I’ve shared with you, The four stages, unconscious incompetence is the first stage. You don’t even know what you don’t know, and you’re not even thinking that managing your money is worth it. Why should I care if you’re asking yourself, why should I bother? Why would I ever invest in being better with my money? Why would I ever try to care anymore? You’re probably in the unconscious incompetence stage. Okay.

The second stage is conscious and competence, like we said, and in this one, you’re not great at it, but you’re trying, you’re fully aware that you’re not great at it, and you’re wanting to get better at it, but maybe you’re feeling overwhelmed. You’re not sure where to start. There’s a lot of different things that you’re reading or trying. And it all just feels a little chaotic. If you will, if that’s how you’re feeling, you’re probably in the conscious and competent stage.

The third one conscious competence. This is where you are working at something. You’ve got some skills in place, but you have to work really hard at those skills at those habits. This stage conscious competence, you are doing it, but it feels hard still. Okay. So if that’s the stage that you’re in, that is stage three conscious competence,

And then the last one, unconscious competence, you are amazing at money essentially. You are consistent, you’ve got it dialed in. It feels like something you could do while performing another task. So if that’s how you feel with managing your money, you’re in the stage four, which is unconscious competence. I believe one of the best things we can do is simply identify where am I, where I’m I in this, these stages of learning when it comes to managing my money better? 

Okay. So let’s say you’re in stage four and believe it or not, even though if you were to Google this idea, the psychology concept of the four stages of competence, a lot of them stop here at unconscious competence.

We like to say that they’re like an asterisk or a fifth one, which is true mastery. And in this one, it really does take more time, right? So you’ve gotta be doing unconscious competence. So you’re good at it. And you don’t even need to try very hard to be good at it for a really long time. And we’re going to challenge that a little bit more to become a true master and what we love to encourage our clients to do when they get to this stage is lead by example, share with others, teach it to other people, find ways of sharing your journey and inspiring others with that journey. So it is so good at this stage to reflect back on your growth and sort of like reverse engineer, some of those things and say, well, I remember I did it this way, and now I can look back and see why that worked so well for me or why that wasn’t going to be good for me.

So anytime you can reflect back in this stage and really give yourself credit for the things you did well and better understand why the things that didn’t work well for you didn’t work well for you. It helps with your self awareness. And it also gives you that more clear guidance so that when you’re sharing your journey with somebody else, you can tell them, here’s why that didn’t work for me, but here’s maybe my personality yours might be different. To me, the ultimate mastery level with money is, is sharing your journey with others and a very well rounded, a very grounded sort of humble and yet proud and confident way, all at the same time, I’m not talking about lecturing here. I’m not talking about trying to help somebody who doesn’t want the help. I’m simply saying leading by example, and being proud of your growth so that other people could possibly feel that ah-ha trigger that thing that they need.

Remember at the beginning of this, in order to even get on the journey of growth, everybody has to experience an aha trigger. You have to have that moment where you’re like, enough is enough. I’m going to get better at this. I’m going to try to get better at this. Everyone needs that. And to become a true master with your money, you could be someone else’s aha trigger by simply showing them what is possible in our opinion, that is the ultimate level of mastery with your money.

So I hope this was helpful for you. Some questions you can ask yourself, like I was saying do I even believe these additional stages of money management are possible for me? Did I even have them in my know consciousness as possibilities? And if not, how come?

The second question is, simply ask yourself, where am I today? And where would I like to be? So if you are in any of those first, second stages, and you want to be better with your money. That is what we’re here for. We want to keep you moving along these stages of growth. We want to help you through the hard we want to keep you motivated through the boring. And we want to challenge you to take it up even a little bit more in that fourth stage that you can reach mastery. And if you are in the first stage and you haven’t experienced your aha moment yet, ask yourself what would need to happen in order for you to feel motivated with your money. What’s like the rock bottom that you need to feel. It’s different for everybody. Some people they don’t want to overdraft their checking account. Just one more time. They’re so sick of it.

Other people it’s, they don’t want to fight with their spouse anymore, or they’re just sick and tired of being sick and tired, or the next thing that goes on their credit card, they think I can’t possibly do this anymore. I just paid off my credit card. And now I’m putting one more thing on it. Or maybe it’s that your credit card balance at the end of the year is greater than what it was when you started the year. And you thought this would be the year that you got ahead of it.

And ultimately what you want to ask yourself is what does that aha moment need to be for you? And why? Wait till it happens to experience it, use the motivation of preventing that aha moment from happening to start your journey. That way you’re not feeling the pain of the aha moment. You can actually find the motivation ahead of time. You can be proactive and start your stages of learning ahead of time.

I hope this was helpful for you. Again, check out the illustration on the show notes. If you need help making this visual for you, we are here to help you with your money. Thank you for tuning into this episode. It was so much fun to share these four stages of competence with you today.

If you would like more information about how we can help you take the stress out of money with one-on-one financial coaching feel free to join our private Facebook group by going to And if you have a passion for personal finance and are interested in helping others, take the stress out of money by becoming a financial coach, check out our financial coach training program at and join our free Facebook group for financial coaches by searching Facebook for financial coaches unite. We’ll see you next episode where we’ll help the world take the stress out of money.