Today, Paula Christine and Producer Jon cover two key questions. Do I have enough money to survive on my own? And if not, how do I get there?
Paula has been having this conversation a lot lately with people who want to get out of a bad relationship or move out of their parent's home. The first step is figuring out how much money you need to survive. That means looking at the money coming and the money going out. Is there a gap? If so, how do you close that gap?
The solutions are going to be different for everyone. Maybe it's a second job or returning to school to raise your earning potential. But maybe you can't because you have childcare issues. You might have start by shopping your cell phone bill or cutting cable if you watch mostly streaming services. It becomes critical to 1) think outside the box and 2) change your mindset.
A scarcity mindset will have you living paycheck to paycheck and finding excuses for not breaking this cycle. An abundance mindset involves appreciating what you have and planning for a positive outcome. Money can be emotional, so changing your mindset may not be easy initially, but it is worth it in the long run.
Paula has two webinars coming up that can help you get started. The first is on budgeting for groceries next Tuesday, February 28th. And you can also check out her Making Money Matter course.
https://learn.paulachristine.com/budgeting-for-groceries
https://learn.paulachristine.com/mmm
Want to know more? Email Paula: Paula@PaulaChristine.com
Jon: Welcome back to Beyond the Paycheck. I am producer Jon Gay. I'm joined by our host as always, Paula Christine. Great to be with you.
Paula: Great to be with you Jon.
Jon: So we were talking offline a few minutes ago. Paula. Seemingly you've been having the same, or at least very similar conversations with several clients just in the last week or so, and this is a really important topic we're gonna cover today.
Paula: Yeah. I've met with several clients and actually even had a conversation sitting next to someone in a bar the other night while we were having dinner, and it's all about how do I know how much I need to earn and what I'm spending to support myself. That thing about financial independence so that I don't have to depend on anyone, no significant other, my parents or whatever, that I can go out on my own and I'm gonna be okay.
Even if I'm in a relationship, I know that I will be okay.
Jon: And that really is so important no matter what the situation you're in, because if you are dependent on somebody else for income and for survival, something can change in the drop of a hat. We know that all too well.
Paula: Hey, if I look at my own personal situation when I got divorced a few years ago, that was the first thing I had to do was say, okay, I'm, I have to move.
I'm only dependent on myself. Where can I afford to live? What expenses am I gonna have? And I had to total all that up to make sure that I had enough income coming in to support my lifestyle. And if I didn't, I would have to make changes. So I was talking to a woman the other day who was just a little frustrated with her, significant other.
And I'm like I'm not telling you to leave him, but I said one thing that I would consider. What does it take for you to stand on your own? So even if it was time for you to leave that person, or that person passed away, what do you need to stand on your own? And she couldn't answer it.
So we had to break it down. So we had to sit down and say, okay, this is how much the mortgage was. The taxes, the car. We had to list all of her expenses and then we had to compare that against her net income, and she didn't have enough to stand on her own. She was making 25 an hour, and ideally if she made 30 an hour. She would be tight, but she would be able to stand on her own.
Jon: So that's the first step is adding up, what's going in, what's going out for you personally, independent of anybody else in your household, and figuring out where that gap is. If there's a gap, how much that gap is. And like you said, in that situation the friend of yours needed to make an extra $5 an hour.
What do you do with, maybe you go in and ask for a raise is probably the easy one, but that doesn't always work. What are some other things you can do to try to bridge that?
Paula: That is a difficult question to answer because we did start talking about that and having two minor children. If she takes on even an extra job, a part-time job, it increases her daycare costs. So does that make it beneficial for her to do that?
Jon: And with the cost of daycare these days, she might end up coming out behind.
Paula: Yes. Sometimes it one spouse, sometimes they're working just to pay for the cost of daycare. Yeah. Then you have to wonder even if it's worth working.
But also we looked at, does she go back to school and pick up a career that's gonna pay that $30 an hour or more, but then how does she afford to go back to school? And then it goes back to the kids. So it's a really hard question to answer, and I don't think that there's a short term quick solution to that, but I think it's just having the knowledge. And this is what you need to accomplish that goal. And then you can try to think of some ways along the way that you can get there.
Jon: We talked about it on the podcast before, knowledge being power, and it is very easy when you are in a difficult financial situation or even a difficult personal situation if that's the case, to be overwhelmed by the emotion of it.
And I'm sure that was the case. You've talked about your divorce on the show before. When you're caught up in the emotion and money can be very emotional when you're caught up in that emotion, you can be so overwhelmed, another job, a raise, going back to school. You can't, it's almost like analysis paralysis.
You just freeze and you don't know what to do. So it seems like the first step is just looking at those hard numbers and ask someone a financial coach, a friend, a family member. Ask someone you trust to help you with that so that you can look at the numbers objectively and figure out where you are and temporarily at least take the emotion out of it. Is that a good place to start?
Paula: Oh yeah. You can't have emotion when you're talking about money, right? I know it's hard, but you can't have emotion when you're talking about money. And you're right, she reacted in the same way. Like when I was telling her all these things. She had I don't wanna call it an excuse, but she kept saying, but this, but that, but this, and I can't do that.
It doesn't offer a solution, but it also doesn't make you open-minded enough to think about some things that you could potentially do.
Jon: A lot of times, whatever the solution might be, you could be pushing yourself outside your comfort zone, and that can be scary, especially when you're in emotional state.
Paula: Correct. Always going outside someone's comfort zone is scary, but that's where you grow, right? That's where you change. That's where you need to be, is always outside your comfort zone. I met with a person today actually, and it was a little heartbreaking. story, but she divorced. She had a really decent income coming in.
She had no idea, absolutely no idea where her money was going. And when we sat it down and I'm like, oh, you have $1,500 extra a month, where is it? She had no idea and no clue. I set her on the path to keep track of her expenses for the next 30 days on everything she spent so she could figure it out.
She felt like she was always broke, but she really isn't. She just doesn't have a grasp on where her money's going.
Jon: Was she just spending and not tracking it super well? Is that the issue?
Paula: To be honest with you, I don't know. I don't know if that she doesn't really think about things. . Like she started to say, oh, don't forget, I have my prescriptions and, it's probably being spent somewhere. I'm not saying she's blowing it. , but she just doesn't have a clue. And when you don't have a clue, you can't have security. If you feel like you're broke all the time and you have to go around life thinking like that. We'll go back to emotions. It has to be causing anxiety, depression. Yeah. And it doesn't have to be that way.
Jon: It's like we've talked about in a previous episode of the podcast, that abundance mindset versus that scarcity mindset. If you're always like feeling like you're behind the eight ball, you're in that scarcity mindset. You're always hand to mouth, paycheck to paycheck, Peter to pay Paul. Insert your cliche here. Once you really get a better feel for where the money is, where it's going, and where you are at the end of the week, month, year, whatever, I think once you get a better handle on it, intellectually it becomes easier to change your mindset.
Paula: And then you get to think about, do I really need something?
Jon: Wants versus needs?
Paula: Yes. Do I have to have those new boots? And do I have to have the nails? Spend $90 a month on my fingernails. I'm not picking on women. I just know what us women spend things on. What do men spend things on Jon?
Jon: Beer? I'll give you a small example. When I'm in a really bad mood, I've had a really bad day at work, or I'm just frustrated with whoever in my life, my go-to thing is I go out and I get like a terrible fast food burger and fries. It's like my vice and it used to be like seven, eight bucks for the combo meal.
Now it's like $15, it seems, to go to, whatever fast food place I'm going to. And if that happens more often than I would care to admit that adds up or just going out to eat. We were talking about this in our last episode, my wife and I both being too busy to cook, so takeout, and that adds up.
Or, going out for fun and having a couple drinks. Oh, you know what? I'm gonna have two or three drinks tonight instead of one. All those things add up, or here's an even better one. Amazon. Oh, you know what? Yeah, that looks good. Or Facebook targeted ad. Oh yeah. Let's just, it's just all digital. It's all my phone. It's not real money. I'm just playing on my phone and pushing buttons. Oh no. It's real money. Cuz that credit card bill comes at the end of the month. There are things that I will spend money on that I definitely kick myself over.
Paula: Yeah. I had that Amazon conversation with someone last week too.
We're like, okay, we are having the same thing. Where's your money? Where's your money going? Oh, I don't know. You know what? I spent about a thousand dollars a month on Amazon.
Jon: Whoa!
Paula: I'm like, what are you buying? What are you buying? Stuff for the house. Do you really need it? No. No. I don't really need it.
Jon: Amazon told me I needed this really nice $500 crystal bowl for my bedroom. It looked fantastic. Yeah. I did the virtual reality thing. It looked great in my living room, on my phone screen it's funny, those targeted ads, all those apps are listening all the time. You start talking about something you're interested in and it's oh yeah,
Paula: I know. It's crazy stupid stuff.
Jon: Like my wife really likes sloths. She thinks they're cute. We were talking about it one day, I get a Facebook targeted ad for a stuffed sloth. I'm like, oh, that's cute. $35 later, and it comes over. Apparently, it didn't tell you it comes on a slow boat from China. It took three months to get here, but eventually it did. And she's you spent $35 on that thing. I'm like, man, it's a Facebook targeted ad and I'm a sucker for good marketing.
Paula: Wow. Here's the thing, you never tell someone you like it because then you get a million of 'em, right? So Jon's wife does not like sloths, because she doesn't want a million of them coming to our house.
Jon: Because my phone is listening to me, both of us right now.
Paula: That's always true if you say, oh my God, like you go to someone's house and you're like, oh, you like cows? No, I didn't like cows. I bought something. I thought it was cute. And so everybody thought I liked cows enough for every birthday Christmas gift I get a cow. It's something as silly as that.
Jon: Bart Simpson said it best, don't have a cow man.
Paula: Yes. It's weird that I had to have the same conversation with multiple people in the last week and all about the same thing, and it's all about financial independence, feeling that financial independence, that financial security that we all strive for. And how do you get there?
Jon: And that's really the second key part to our conversation. We alluded to this earlier. The first part is doing the math and figuring out where you are and arming yourself with that information. But the second part is how do you make up the difference? What are some of these things that you're telling your clients, Paula?
Paula: A lot of 'em is you can cut expenses. With the woman we were talking about, the Amazon, of course, she cuts that out. That's huge. Thousand dollars a month. But she was also talking about how she shopped her cell phone bell. She shopped her cable. And she decided to get rid of cable because she was paying for the streaming services anyway.
Oh geez. And watching more of those. And she wants the cable so she gets rid of the cable that was sign gonna save her like a hundred dollars a month. Just different things that you can look at, but if you can't cut, like some people are living bare bones and they don't have anywhere to cut, and that becomes where you have to think outside of the box.
If you wanna pick up a side hustle or a part-time job. And again, we go back to that. I know about people with daycare issues and then you gotta even think more outside of the box. Is there something you can do at home? A lot of people are working from home now. Is there something you can do when the kids who go to bed at night?
It's just keeping your eyes open for opportunities. It's that whole thing ask and it is given. So yeah, say, hey, I need some extra money. How am I gonna get that? Please God give that to me. And then, look for the opportunities that are coming your way.
Jon: What is the word that's big right now? Manifesting?
Paula: Yes.
Jon: Manifesting something to happen, right? But even thinking outside the box, like you said, maybe you're hesitant to get a part-time job because you have childcare issues. Is there a friend, a neighbor, a family member that might be able to watch your kids for a couple hours a day for the part-time job?
It's just finding a way to make things happen as opposed to finding a reason not to do something.
Paula: Correct. You could always come up with an excuse. Always come up with an excuse. But when you stop coming up with excuses and you look for solutions and opportunities, that's where your life is gonna change. And that's where you're gonna find those solutions to the issues that you're having with your budget and your money.
Jon: Absolutely.
Paula: But you gotta be open for it.
Jon: You've gotta be open, you've gotta be honest, and you've gotta be in the mindset of finding a solution and not making excuses. And I'm not trying to be hard on our listeners here. Thems the facts.
Paula: Those are. When I think a lot about, the changes in my life, a lot of it did come through opening my mind up to new opportunities, manifesting, affirmations.
All the things that I can do to change that scarcity mindset into more of a positive, things are good. Even sometimes when I'm having a bad day, I try to find all the grateful things in that day. To keep that positive mindset and it really does change the way that you look at things.
Jon: It is really so easy, with so much negativity in this world to really fall into that scarcity mindset or that negative mindset.
And then you, like you said, you turn into that positive or abundance mindset. Thinking about things differently and changing your perspective really can make a huge difference. Paula, if one of our listeners wants to come talk to you about their finances, about planning their financial future, what are the best ways for them to find you?
Paula: You can reach me at paulachristine.com. That's my website. Or email me at Paula@PaulaChristine.com. There's also two webinar opportunities that we have coming up. How to budget for groceries February 28th. It's a free workshop. There's one at 11:00 AM and 8:00 PM Eastern. And also I have a six part course on Making Money Matter that talks about in the first week is about money mindset, and then we go into budgeting and taking control of your finances through that workshop.
So there are two opportunities there. You can find them both on the website, paulachristine.com.
Jon: Great stuff as always, Paula, you've given me something to think about and we'll talk next week.
Paula: Thanks, Jon.