The Fiscal Fitness Podcast Episode 66 Transcript

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Kelsa Dickey: Hello. Hello, Hello everyone coach Kelsa here and WOO-WEE BOY, has it ever been a hot minute since I have recorded a podcast episode. I am so sorry for that, but hopefully you have been tuning in to some of the most recent episodes that coach Jill has recorded. They have been amazing. I just love listening to them. Did you guys catch her money mistakes episode? It’s episode number 65. So if you haven’t listened to that yet, I highly recommend it. I loved it and I realized, I love talking about mistakes that we’ve made. Which ,maybe sounds a little strange, but hear me out. I think that the easier it becomes to reflect on your past mistakes, analyze them and learn from them, the smarter we feel and the easier it becomes to anticipate future mistakes and maybe even then ultimately prevent them from happening, which I think is pretty cool.

The better we get at owning our mistakes, the easier it is to take them in stride when they happen. The result is that you can actually be better at taking action. Overall, I think, at least it’s easier for me to take action because I don’t live in fear of making another mistake. It’s like, okay, I’ve made a mistake, but likely because I’ve anticipated so much of them, the mistakes become a bit more minor, a bit less intense, if you will. The impact of them becomes smaller and if we can focus on what we’ve gained from that mistake or what we’ve learned as a result of it and how we’re better because of it, then it actually just becomes not that big of a deal. And we know that this happens with people and money that they have done some things wrong in their past.

And so instead of embracing the mistake and sort of owning it, they’re frozen towards trying anything new because they fear another mistake so badly. And it’s when we shy away from talking about them where we try to brush them under the rug. Maybe we don’t take personal responsibility over them that they become bigger than necessary. And we try to do this in our business as well and with our team, we try to talk very openly about the poor choices that we’ve made or the snafus or something that we thought was a good idea at the time. And it turned out to not really pan out the way we wanted and we just address them head on. We talk about them. We usually do what we call a debrief meeting after we do something new, maybe it’s like a new course or for our event once a year.

We always do a debrief afterwards and during a debrief we talk about all the things that went really well what we’d like because we want to make sure we duplicate those things. We want to do those things again. But we also talk about like, yeah, that didn’t go the way we wanted or that didn’t really have the impact that we were hoping for and it maybe costs money or it took a lot of time or a lot of effort and it really fell flat sort of thing. So we talk about them both openly and then guess what happens after that? We move on. That’s it. It’s super freeing! Let’s just get it out there. Let’s not get into our head about it. And we just move on and it’s been pretty freeing. So this episode I’m going to share with you my five mistakes that I’ve made.

I loved listening to Jill’s episode with her mistakes. I appreciate so much her humble approach in sharing them. I love that she just owned them. I appreciate her for sharing what she learned as a result of those mistakes. Hopefully you guys learned some pretty cool lessons from that as well. Anytime we can learn from someone else’s mistake, that’s always nice, right? And so it’s now my turn. Yay. I am going to debrief with you guys the five mistakes Mr. Fiscal Fitness and I have made in our lifetime. So I want to be really clear when I start that I don’t actually regret any of these. I don’t know if you guys can relate to this, but I feel like regret is such a strong word and all of these I’m somewhat grateful for the lessons they’ve given me. I feel better because of the insights I now have to do it differently and I feel in so many ways these mistakes have made me who I am today.

They have definitely made me a better financial coach because when a client faces something after a bad choice and they have to just look at it head on and learn from it and move on, I know exactly what that feels like. So to look at a mistake square in the eyes and have to clean it up afterwards, it has made me a better coach I think makes it so I can relate to my clients on an emotional level so much more. And I feel like they’ve made Michael and I better overall with our money, just personally, even if we weren’t financial coaches. I just feel like our communication is better because of these things. And so I don’t regret any of them, but I’ve certainly learned from them.

Money Mistake Number 1

So number one on my list is getting my master’s. So my master’s degree, I have an MBA with a concentration in accounting and as a financial coach, I don’t doubt that there was not quite a bit learned from my master’ s.

So I don’t think it was a total waste. Of course. And that’s not what I’m saying with this being on my list. It’s more about the process that I didn’t take when deciding to get my masters. I did it because everyone thought that’s what I should do. People with business degrees, finance degrees, I had met a lot of them were getting master’s so I thought I should do it. I didn’t question it and I know for a fact I didn’t think through it properly. What I wish I would have done is look at the break even on the master’s. So based on how much it’s going to cost me, which I believe my masters cost me about $35- $36,000. This was about 15 years ago now, so quite a long time ago. I know I was working in corporate America at the time and I know that I received a $2,000 salary increase that year when I got my masters, after I graduated. Now I think if I would have stayed in corporate America, you could probably sort of do the future value of that. So $2,000 and then every raise after that is based on a higher amount and that kind of thing. But I didn’t take any of that into consideration of what I decided to get my master’s and go back to school. I didn’t think about whether or not it would actually pay off. I took out student loans for my master’s and we did pay them off quickly. I believe it was within two years or so. So we did tackle them with a vengeance, thankfully. But again, I look back and I think I’m not really sure that I got the return on my investment that I had hoped for or that I hadn’t even thought I would get.

I mean, again, I didn’t even think about is this really going to have a good ROI? I just did it because everybody else was doing it and it costs a lot. At that time I was newly married. I remember on the weekends if I, if we would go out to the movies or go out with friends or at that time we used to hold poker night at our house with a bunch of friends and I would always be thinking about the paper that I needed to write or the project I needed to get done. And it was just a very large distraction for those two years of my life. So there was definitely an energy cost as well as well as a financial one. And I didn’t even stay in corporate America. So I definitely question my thought process for doing that.

I don’t think that it was a game changer in my life by getting it. A very few people ask me about my credentials as a financial coach. So I’m not sure that too many people even know that I have my masters. I don’t put the letters MBA after my name ever and I’m not sure why. It’s just not something that I think is, makes me a good coach one way or the other. I think there’s a lot of other things that contribute to my coaching ability and getting results with clients and my master’s is not really high up on the list and so I don’t include it. So yeah, getting my master’s was probably a $36,000 choice plus interest on those student loans. But I didn’t think through very well.

Money Mistake Number 2

Mistake number two, Mr Fiscal Fitness and I bought house right after we got married. So we got married on September 30th and I believe it was January or February, just five months later that we bought a house. And again, another theme where everyone was doing it, we didn’t really question it and we thought you get married, you buy a house, that’s just what you do. Right. God, shame on us. Right? And you guys, we bought a big house. We bought a four bedroom, two bath house, but it was just the two of us, I think back on that and I’m like, Oh God, what were we thinking? And maybe we thought we’d live there forever or we’d have a family in that house, maybe, I’m not sure because if I’m being honest, I don’t think we even thought of any of that. I think it was just way too big of a house for us.

We didn’t even have kids for another 10 years. It took us 10 years. We were married for 10 years before we decided to start a family. And so we had rooms in that house that were definitely not used ever. It was not smart. And then also we didn’t really get multiple quotes. We didn’t shop around. We didn’t look at a ton of houses at that time. We didn’t do a low ball offer. I think we offered a little bit less than what they were asking. We didn’t really negotiate. We didn’t tour a bunch of houses before, decided that this was the right one. And just overall the way we made that decision; I always say that the larger the financial decision, the longer it should probably take you to make decisions. And I often times give the example of this house.

I don’t remember how many weekends we spent looking at houses. It might’ve been two weekends and decided to buy this house, which was obviously six figures and it was almost as if we just bought a pair of jeans, but I bought a house how so we didn’t put enough time and effort and energy into making a really smart choice at that time. And didn’t question whether or not that was the right call for us. Early in our marriage, we were not there long. I don’t even think we lived in that house for two years. And then we moved from Michigan to Phoenix, so 2000 miles away and still had to carry that house for a couple of more years because we bought in 2006 we decided to move in 2008 and definitely not the best timing ever. And so we carried it for a couple of years before finally being able to sell it.

But certainly one of those things where I look back and I’m like, why did we think buying a house five months into our young marriage was a good move?

Money Mistake Number Three

So mistake number three is not setting ourselves up for flexibility with our income and our expenses. And part of this, it really boiled down to lifestyle creep early on where it was we would more money and we would spend more money. And at the end of the day, what it resulted in is us not having flexibility in our life. And I believe that this mistake turned out to be one of the best lessons of mine and Mr. Fiscal Fitness’ marriage. And so I’m really grateful that it happened so early on and that we were able to rebound so quickly afterwards. I’ve talked about this time of our life in subtle ways here on the podcast, but I want to give you guys some more details around it now.

So when Michael and I first moved to Phoenix from Michigan, we had our house in Michigan that we were carrying and we both got jobs out here. I was actually promoted out to Phoenix. And so I had the job lined up and he was able to get a job pretty quickly. We had two car payments at that time. I do remember that. I don’t remember the specifics of our expenses necessarily, but I’m willing to bet there were very normal. So nothing extreme, no really large expenses, no frivolous spending necessarily, but also no frugality either. So no intentionality behind the choices we made. We found ourselves in a new city in a new place. So there’s this feeling of needing to explore and you need to check out the area and make new friends.

I think a lot of it was just our social lifestyle at that time was pretty expensive. And so we were here we found ourselves in a position shortly after moving here where Michael wanted to leave his job and he was miserable. You guys, and if Mr. Fiscal Fitness, he’s pretty easygoing, chill guy. He’s got a great work ethic and he cares about doing a good job each day. That’s something that’s really important to him. Feeling as if he’s making a contribution every day through his effort is just really important to him. So for him to despise what he does every day is a big deal. He had this boss that was truly rotten and just made his life miserable. And first of all, let me tell you, so since where he worked, there were already two other guys named Michael.

And so one of them was given the name Michael, the other was called Mike. And then Mr. Fiscal Fitness was hired and he was the third Michael since there was already a Michael and there was already a Mike, guess what Mr. Fiscal Fitness’s name became… Mikey. Yeah. So he went from being called Michael his whole life. So really rarely ever even called Mike being called Michael to Mikey, day in and day out. So I mean, no wonder he hated at let’s be honest. No, I’m just kidding. In all seriousness, he would’ve been fine with that. Really. At the end of the day, he probably wouldn’t have cared a whole lot, but in all seriousness, it was just not a positive work environment. He would come home every day and I could just see it taking a toll on him. His self confidence was getting lower by the day.

His self worth was declining by the day, you name it. It was dwindling and it was really heartbreaking to watch. And I think the even more heartbreaking part was that he couldn’t leave and he couldn’t leave because we needed his paycheck. We were tied to two incomes. And I just remember thinking at that time, we will never find ourselves in this position again. It was this really beautiful and yet painful reality that our financial position wasn’t bad, but it didn’t give us options. And I swore we would never find ourselves in that position again. We swore at that time to live off and spend differently from that day forward and we ensured that we would always live off of one income. So that was something, a commitment we made really early on in our marriage because at that point I think we’d been married about three years.

So pretty early. And when I think about adding an expense today or thinking about breaking this principle that we’ve had for now 11 years, we’ve been married 14 years. So for 11 years we’ve, we’ve promised to this commitment of only living off one income. And there’s times where we were tempted to go against that. And I just think back to that time and I think about what Mr. Fiscal Fitness his face looked like as he would walk in the door each night after work. And I’ll tell you the trade off is never worth it. We will never be in that position again where we are so tied to our income and, and really what that boiled down to is just lifestyle creep. The more money we make, the more money we would spend. And we just decided that we would draw a line in the sand very quickly and make it so that as we made more money, we would not spend more money.

And I’m really grateful for that very painful choice or lesson that we had to learn. So that was mistake number three was experiencing lifestyle creep.

Money Mistake Number 4

Number four: baby brain decisions. Oh, there’s actually two ways that this showed up, but actually lots of ways, but two main ways. So when I was pregnant with Carmen I can think back on that time and how I just really yearned and grasped for control of things. And I don’t think I realized just the impact that that was making on my decision making at that time. So I don’t know any of you moms out there or soon to be moms. I hope that you, you hear this because I’m a pretty rational, logical decision maker and I didn’t realize it at the time, but I can reflect back now and think about just how bizarre some of the choices were that I made at that time.

So the first one was in regards to our lease for our office space. So my office lease was ending the same month Carmen was due to join us into this world. And so I had to make a decision, while I was pregnant, of were we going to stay, were we going to leave? That kind of thing wasn’t going to find a new space and there was a lot of uncertainty. There’s a lot of uncertainty when you’re pregnant, lots of unknowns. I didn’t have an easy pregnancy so there was a lot of fear around that for me of what to expect and how it was going to go. And I can look back now and see so clearly how I was just grasping for control of something during that time. I needed a distraction from the nerves of how things would go. And I threw myself into finding a new office.

We ended up renting a beautiful 1500 square foot office that was just a shell. And so what that means is there weren’t any walls. It was just the shell of the outer perimeter. And that means I got to pick the flooring and paint colors and where the walls would go and how big my office would be compared to someone else’s office and whether there would be windows or dry wall. And it was so much fun. Don’t get me wrong. I had this massive vision for where our business would be in just a couple of years and this office was a really big part of that. What I didn’t understand was how a baby changes you and your value system. Say what?! What’s that you say Kelsa?A baby changes you? No way!! Oh yes. And in all sorts of really great ways I think, but I did not understand and I don’t think it’s possible for a parent to understand that until you’ve experienced it.

Just how a baby will change sort of what you care about. And now that I have two young kids, I want to be home as much as possible and in my office as little as possible. And so now I have an office at my home and my entire team is virtual and I love it. But at the time, so just three and a half years ago, I thought for sure I was going to have this big office. We were going to have this team there every day. And I just, I realize now how really what I was doing was just grasping on to something because there was a big transition in my life coming. And so I was looking for stability. And so I signed a lease because I wanted there to be a stable place where I could go every day.

The idea of my lease possibly ending and not knowing where I would be was just, just one more unknown. And I look back now and it’s so obvious to me how I made that decision a lot out of fear, a lot out of a sense of trying to have control over something and ultimately a really big decision financially. If you were to amortize how much that lease cost us over the cost of the lease every month for four years a really big expense. And luckily after about a year after Carmen was born, I was able, we were able to find someone to sublease the office because I mean, it happened that quickly. You guys, I think it was there a year and then a year later I was like, I don’t want this office.

Oh my gosh. Wow. What would we have done? We found someone to sublease it. I will be so grateful when the lease is officially done and out of my name. Luckily it has not, knock on wood cost us a lot financially because we’ve been able to find a subleaser who essentially covers all the cost of it. What a decision, big decision I made at a time and I tell clients all the time: when you’ve got a lot of change going on and there’s a big transition in your life try not to make too many permanent decisions at that time because it’s likely once the dust settles of that big transition, you would make a different decision. And that’s exactly what happened in this case. As soon as Carmen was here and I felt easier and calmer about that and I knew everything was going to be okay with the delivery and all of that, the need for control or stability just sort of went away.

But of course I made the decision when I was yearning for stability. So the other thing when it came to baby brain was just buying stuff. Stuff that articles would say you absolutely needed. I would buy things before I actually needed it, thinking that I was being proactive, thinking, Oh, I’m going to be ahead of the game. And thinking that I would probably need this and then so many things we had that we ended up not using or just for some reason I don’t think I realized. I mean we live a mile from target. We live two miles from Costco. We live two miles from Walmart or Amazon has same day delivery here in Phoenix because we have so many distribution centers right here in Phoenix. I am not sure why I thought that you can’t, after the baby comes, ever walk into a store. I’m not sure why that was or where that idea came from.

And again, I can look back. Baby brain was certainly a thing for me. I just was nesting so hard that I didn’t want us to have to quickly run to the store to grab anything. I wanted to have it all figured out beforehand. And the end result is I spent a lot of money on things I didn’t end up using or needing, but some articles that I would absolutely need it. And again, here I was yearning for control of trying to be as prepared as possible and really I should have just waited, should have just waited until the day we thought we needed it. And either Mr. Fiscal Fitness could’ve run to the store or I could in front of the store and probably taken that break and said, just run to Target really quickly and buy the thing we absolutely need it. And it would’ve saved a lot of money, I believe. So I do encourage new parents to, to wait to buy things unless you absolutely need it. Just because I have learned that mistake the hard way.

Money Mistake Number 5

So mistake number five is a bit of an overall pattern that I know Mr. Fiscal Fitness and I had really early on in our marriage where we didn’t ask questions, we didn’t really negotiate and we didn’t research or shop around as well as we should. I would say that we were not engaged consumers, we were not very responsible in the decisions that we did make. We didn’t know which questions to ask. And so a lot of times we just wouldn’t ask any. And this has shown up a few times in my life around money and it’s something I still work really hard on overcoming today.

When we bought that first house, we didn’t ask many questions. We didn’t do a ton of research and we didn’t tour a lot of other houses first. When we bought our first vehicles, I’m not sure we did much digging or negotiated the price all that well. When we hired our very first contractor early in our marriage, I don’t think we got multiple bids. We bought new windows and I don’t think we had multiple bids for windows. I mean, it’s sort of this theme early on in my financial life that I’m so aware of now and I had so much time to reflect on it. And I think it has come from a few different areas. And I want to talk about those in case you’re experiencing any of them yourself. The first is trust. I would say Michael and I are definitely very trusting people and I think early on we were naive in our marriage and I like to think that we’re good people and we follow through on our commitments and we do what we say we’re going to do.

And overall living with integrity is just sort of the way we operate. So it was really hard for us early to realize that not everyone lives the same way. And it resulted in us just sort of trusting what the person was telling us and not asking for proof or not checking references, not asking more questions or reviewing the contract ahead of time. And overall it just came down to, this is a good person. We can trust exactly what they’re telling us. And I think that there’s balance here to be had. So I don’t want to become an overly skeptical person and I don’t want to distrust people initially right away. But I also think we can do our due diligence and, and it’s not because we don’t trust the person, it’s because we want to verify. And so that’s sort of the approach we take now is that I don’t want to go the other extreme where it’s like now I’m ultra skeptical and a cynic. But at the same time I think it’s good to just do a bit more research and digging first.

The other thing that I think caused this is if I knew to question things I know early on, and I’m wondering how many women can relate to this. I was nervous about being seen as assertive or bitchy. Especially when we were in Michigan. I definitely think the contractor that we first hired for the house and that sort of thing. I remember thinking that they really look to Michael for answers. And if I was so nervous about wearing the pants and being the more assertive one and I wouldn’t call myself a people pleaser, but I do to make the person who is sitting across from me feel comfortable. So putting them on edge by asking direct questions or for proof or telling them no, so I can do more research was really hard for me to do at first.

I now teach clients, and I also use this in my own life, that there is a research phase of every choice we make. And then there’s the actual decision phase of that choice. And in the former, in the research phase, you aren’t making any decisions. You’re simply researching. And I teach that because it has helped me immensely. So I will tell a person, I’m not making a decision today. I’m just researching and I’m not going to feel badly about that. This is my process. And if you can respect that, it’s going to go a lot more smoothly for both of us. Oftentimes the more respectful the salesperson can be of my process, the more likely I am to hire them anyway. To me it has definitely taken the pressure off to feel as if I need to make a decision right then or that I have somehow swindled that person.

And now they spent all this time explaining things to me and now I’m going to tell them I’m not ready to make a decision. And for some, I don’t know why that makes me feel so bad. And yet I have to own the fact that that is not a reason to buy something. So I’m just being super honest here that this is definitely something that I’ve noticed that I have done in the past. And so I have to work really hard to stay present to how I’m feeling and what I’m thinking and how that might be showing up in the way I make decisions when I commit to things financially. So, and then the third cause of this, I believe, is that I felt stupid asking. I thought I should know the answer to this question, as if there’s some shame for not knowing.

And again, I think this is just the early on Michael and I got married young and I think there’s just this time of your life where we feel like we know it all and so it’s embarrassing to admit you don’t know. and now, I don’t know when this shifted exactly, but I’m just really good at owning what I don’t know. I now consider this a true strength of mine that I do not shy away from saying, “I have no idea what you’re talking about right now.”

I will just own that because I feel like it makes me more open to learning. It helps me to just be a sponge when they are talking. It’s almost like this invisible wall goes down. I can be more receptive I’ve said many times, “I’ve never heard of that before. Can you tell me more?:”

And I don’t shy away from sometimes we’ll be in a group talking and they’re like, “Oh, this book, have you heard of this book? Or a podcast or something.”

And I think it’s easy to get wrapped up and be like, “Oh my God, am I the only one that’s gonna raise my hand right now and say, I don’t know what everyone’s talking about. Everyone seems to know this.” And I’ve just really gotten over that and I now will be the first one and be like, “Wait, what? What’s this podcast about? Somebody tell me about it.” Especially when it comes to personal finance stuff. I feel like so many newer coaches tend to listen and read everything out there about personal finance. And at some point I think you just become really confident in who you are as a coach and what you teach and how you get results and your own process.

And so you need less of that inspiration from other personal finance experts. And so it’s really normal that a bunch of personal finance people will be talking about this really popular blog. And I’ll just say, “I’ve never heard of it. I’ve never read it, but tell me more. I’d love to check it out.”

I definitely felt stupid for asking questions that I thought maybe I should know the answer to really early on. And that has led me early to not to ask questions or to not negotiate or to not shop around or do more research.

So let me recap my five mistakes.

Number one: my master’s degree, really just not thinking through it properly and making that decision with all the right parameters.

Number two:the big house we bought right after we got married. It’s just what you did. So we did it and we bought a big house that was not even necessary for two people.

Number three was a lifestyle creep; where our expenses matched our income and made it so we had no flexibility towards our life and what we’ve truly needed to feel happy.

Number four: baby brain and not realizing just how much my decision making was being impacted during this time of my life.

And then number five: not asking questions or not being engaged or curious like we are now with money decisions.

I hope you enjoy listening to my five money blunders. I’m wondering, can you relate to any of these? I would of course, love to hear from you. Please tell me, make me feel better by telling me that I’m not alone in these, these blunders of mine. I know I’m not alone. I talked to clients about them all the time. I know I’m not unique in these experiences. I hope that you found them valuable. If you have not made some of these mistakes yet, I hope that this prevents you from making them, that you are able to learn from my mistakes. What a beautiful world that we can live in if that happens for you.

Until next time I will talk to you guys later. Bye.