BiggerPockets Money Podcast - 7 Maxed Out Credit Cards to Money Expert by Making a BIG Mental Shift

Starting point is 00:00:00 Are finances impacting your mental health? You're not alone. In today's episode, we're joined by financial therapist Stephen M. Hughes, and we'll unpack the often overlooked ways our financial habits affect our mental well-being. We'll discuss where money struggles typically begin, exploring how the pressures of debt, spending patterns, and how financial uncertainty can lead to cycles of stress, anxiety, and depression. Stephen will offer insights on recognizing these patterns and how to create healthier relationships with money, even if you consider yourself good with money.

Starting point is 00:00:36 Hello, hello, hello, and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen, and with me as always is my therapeutic co-host, Scott Trench. Thanks, Mindy. Great to be here and enjoy you with our goal on Bigger Pockets Money at helping you shrink your financial anxiety. You are in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone no matter when or where you're starting or what your emotions around money are like. Stephen, we are so excited to have you on the Bigger Pockets Money podcast today. Thank you so much for joining us. Yes, thank you for having me. It's surreal being here. I've loved the show for a long time,

Starting point is 00:01:11 long time listener, so let's get into it. Yes, let's get into it. And specifically, Stephen, I want to know about your money background. Where did your journey with money begin? So my journey, I would say, began in Jamaica. Both of my parents are from Jamaica. They, immigrated here and I was born in New York. But like a lot of people, we didn't grow up talking about money and we also grew up with some humble beginnings. It was eight of us in a three-bedroom house, sometimes 10, depending on who is here from Jamaica. And because we didn't talk about money, I went to college and made every money misstep possible. Like seven maxed-out credit cards, overdraft fees at a point they closed all of my bank accounts and told me to ease on down the road.

Starting point is 00:01:52 repossessions, plural, and eviction. My credit score was a 385. I didn't know it could go that low at the time. And yeah, I just didn't, I wasn't really managing my money well, let's say. But a mentor of mine, he gave me a book called The Richest Man of Babylon. Y'all might be familiar with it. And after I read it, I started making some changes in my financial life. And that led me to start volunteering in financial education after I dropped out of college in 2010.

Starting point is 00:02:21 And that was what led me to start my nonprofit organization at the time, no money. And after a few years of doing some financial coaching for people and hosting community events, I realized that there were people who were asking me to come back to the financial coaching. And I started as somebody who was really focused on financial literacy. But as I saw people getting the information they needed, I realized that it wasn't just the education that they needed. They needed some accountability. They needed some resources on how they think and feel. And that's when I turned specifically to financial psychology, behavioral finance, and

Starting point is 00:02:59 financial therapy around 2015. And I was nerding out. Like, I was reading textbooks, but I wasn't in class. And that's how I knew, like, oh, this must be for me. Did you have any guilt about your 385 credit score and the fact that, I mean, I'm assuming that with a 385 credit score, you weren't making on-time payments on your credit cards, right? No, those credit card payments oftentimes like slipped by the wayside. And so I did have guilt because like when you have a 385 credit score and you're in college, like you're renting an apartment so you have to apply for an apartment. And that also led to me like renting a house instead of an apartment from a landlord who had a house from his family who wasn't I guess as stringent as like an apartment complex. And so, you know, credit scores do change. the options that you have. But I was definitely, I definitely felt guilty about like, dang, how did I

Starting point is 00:03:54 get here? How did it get so bad? Did you ever think maybe I should stop spending money? Or did you, were you just like, I guess I'm just going to have bad credit my whole life? It wasn't I thought I should stop spending money. I was just trying to get a handle on things. Because there were some people around me who, even though we didn't talk about money, it looked like things were fine for them. Like, they had a car, they could drive, they had gas in it all the time, they could eat whenever they wanted to. They had a roof over their head. They didn't worry about evictions or late bills or fees. And I also know that back in college, like I am somebody who, you know, loves family and friends. I'm a very selfless person. And I was managing my money that way, too.

Starting point is 00:04:38 And so there were times where I would spend money on people or things that I wasn't going to get the money back, but I felt like, you know, I want to feel good at this point. or I want to help somebody feel good if they're, you know, in a situation. You have to take care of yourself first, Stephen. Yeah, that mask. You got to put it on first. 18-year-old, Stephen? Yeah, I wish.

Starting point is 00:05:00 I wish I could holler 18-year-old, Stephen. So walk me through, you said in 2010, you dropped out of college, and you were talking about the stuff in class. So we're we setting up to really move into this career, drop out of college, pursue this career of helping be a nonprofit, bring awareness about financial college, to folks and that's what you dropped out of college to do or how did that translate? No, I dropped out of college because I failed the last class I needed to graduate and I didn't

Starting point is 00:05:26 want to stay any longer. And so the last class that I needed to graduate, my family was like, what? You're not graduating? But at the time, I had five job offers because I was a power networker. I'd been, I had sales experience and so I jumped into the world of business to business sales, something I still love. But the dropping out of college was not saying, like, oh, I'm going to pursue this financial education thing because I still didn't have my money together when I dropped out of college. And I didn't even know this was a thing that people did as like a profession. Okay, so we have two journeys here that I really want to get into. One is your personal financial story and the second is no money and how you built that out.

Starting point is 00:06:05 So where do these interweep? Like, when did your personal financial situation begin to really improve? And you started making big changes there. And, you know, you said it was after the The Witches Man in Babylon. Was that in college or was that immediately after? when you got this job. So I started making better financial decisions before the end of that year, but maybe not the best academic decisions because I fill that class in that summer. But then as I continue to just delve more into personal finance, I started to turn my financial life around 180. And in 2011, I started volunteering with junior achievement. And so teaching the students that I was working with about money, I could feel like, okay, this is something that I like to do. And

Starting point is 00:06:48 I had already been a speaker because of some of the leadership positions I had in college. And so it just started to develop itself. And in 2012, I started no money, but I hadn't done anything with it. I was like, oh, I guess it's something I should do so I could rent bigger rooms at like the rec centers and the libraries that I was talking at. But it wasn't until like 2013 where I really quit my full-time job for the first time and decided like, okay, I'm going to focus on this thing. I'm going to get it cranked up and grow it. And I really started doing community events at least once a quarter and started doing more speaking engagements and workshops. All right. We've got to take a break, but more from Stephen after this. We're going to discuss how to have a healthier money mindset this year.

Starting point is 00:07:32 Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going. and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments,

Starting point is 00:08:00 net worth and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in a needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year.

Starting point is 00:08:28 That's 50% off at Monarch.com code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes? But somehow, every small business owner ends up doing it. Your dreams of creating, selling, and growing get report. placed by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money.

Starting point is 00:08:54 It automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting. You can set aside money for business goals, control spending with virtual cards and find tax write-offs you didn't even know existed. It saves time, money, and probably a few years of life expectancy. Found has over 30,000 five-star reviews from owners who say, Found makes everything easier. expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity. Open a found account for free at found.com. That's f-o-u-undd.com. Found is a financial technology company, not a bank. Banking services are provided by lead bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found.

Starting point is 00:09:32 Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leen or Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful is its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible

Starting point is 00:10:12 has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. All right. Let's jump back in with Stephen. So let's say somebody's listening to this. They want to get their finances in order. They are totally identifying with 18-year-old Stevens' money management approach of just like,

Starting point is 00:10:36 whatever I'll figure it out later. What's the first step you would tell them if they've decided? Yes, I want to make a change. What are those changes they need to be making? The first step is instead of focusing on the fruit, which is like the bad spending or the ways that you're managing your money now, like really focusing on the root. So why is it that you think or feel about money the way that you do? And really uncovering somebody's money story, like some of the things I shared with y'all, how did you grow up with money? What are the things that, what are the things you heard about money? What are the things you saw around money? What are the things you experienced around money?

Starting point is 00:11:14 What did your parents experience around money when they were growing up and their parents? Because all of those things have impact on how we think and feel and behave with money now. And so for people who decide like, all right, I'm wilding. Like, I'm doing a little too much. Really, it starts with your money story and becoming more aware of where you were in the past. Because we start putting the equation of money and value together at a very young age. before we can even really form full sentences. And so from then till now, we've had a lot of time to develop these things that we feel and think about money.

Starting point is 00:11:52 And if you're at the same place that 18-year-old Stephen was where you develop these things, even though there weren't money conversations directly happening with you, then you've got to take some inventory of how you think and feel about money. Before you decide, like, oh, I'm going to switch gears and just do these things differently and hit these financial goals, it may not happen like that, my friend. You've got to start from the foundation. I love that. I think that there's a lot of people who find themselves in these situations and they're like,

Starting point is 00:12:20 well, I guess I'm just going to be bad with money my whole life. Or I guess I'm just going to have a bad credit score my whole life. Or this is just the way it is. I'm not going to make any changes. And changes aren't going to happen to you. You have to be the driver of those changes. And I would love for there to be an easy button just be like, oh, push this easy button and then all your finances will be fixed.

Starting point is 00:12:40 But the easy button is you doing the work and you stopping spending more than you have, you have $5,000. You can only spend $5,000. If you have $500, you can only spend $500. So however much you have, look at how you can support your life first before you go buy pizza for the house, Stephen.

Starting point is 00:12:59 Yes, for sure, for sure. So can you tell me a little bit about after you read The Richman in Babylon, you know, the next two, years or so. You had a 385 credit score. You had all this debt, seven maxed out credit cards. What was the total amount of debt? And how did that change once you started putting in complaints any more healthy financial practices? Yeah, I can't, I don't know the number, but I know that in terms of the debt, I have student loans. And so I had them at that point,

Starting point is 00:13:28 but I also was paying back student loans for a degree that I hadn't finished. And that wasn't a good feeling, of course. And then with the credit cards, they probably totaled around a couple thousand dollars but it felt at the time insurmountable because it was just money that was more than one single check that I was making and so after reading the richest man of Babylon like I really started to get a little bit clear on okay well how do I put some of the how do I put one foot in front of the other get rid of some of this debt and then also start saving so I can invest because I was listening to things like bigger pockets early on. I was listening to, or I was reading books that was talking about real estate investing

Starting point is 00:14:12 and the stock market. And I said, I want to get to that. But really, I was just taking the steps to knock out the debt after reading The Richest Man in Babylon. And it was the first time that I heard of this thing, like saving for the future and emergency funds. And so I was like, oh, that sounds pretty cool. Like having money to do the things that come up, like, that's a novel idea. And so, you know, these are the things I started putting in place, super basic, right? But things I started putting in place that really helped me launch into the work that I'm doing now. When did you move into this nonprofit or this work of financial therapy specifically? What year was that? That was around 2013. Okay. Can you tell us a little bit about that transition and how

Starting point is 00:14:58 your career changed from there? Yeah, so early on with no money, I really focused on facilitating workshops and then also creating curriculum. So for nonprofit organizations, for companies, for colleges and universities, they would bring no money on campus to talk to their students about money or organizations like nonprofits would bring us in to host workshops or events around money that weren't like your stale bank financial education workshops that were like free, right? we didn't walk into a workshop and say like, hey, you should budget, you should be budgeting, this is a budgeting workshop. We might make a list of all the things that we want to spend our money on, including our vices, and show people like how to manage their money around all these

Starting point is 00:15:45 things. And so that's what, you know, taking off look like for us. Awesome. And when did the concept of financial therapist come out, come about? How did that, how did, what, what is, can you explain what that is and where that comes into play? Sure. So a financial therapist is someone who helps an individual feel better about their finances so they can make decisions in the present and the future that are financially healthy. And if they're doing their job right, this is going to impact that person holistically. So not just their financial life, but usually their mental, physical, emotional, spiritual health are all the things that are going to improve. And in terms of like when that came into picture, Like, as I was doing the financial education side of things early on, there were financial advising firms that would reach out to me and say, like, hey, are you interested in coming on board? And at first, I was like, oh, maybe I want to be a financial advisor. But then as I learned more about a financial advisor, I was like, I'm not really interested in managing anybody's investments. But it's not something that I want to do.

Starting point is 00:16:52 And then as I went along, I was trying to figure out, like, where I, like, fit into the financial professional. I started delving a little bit deeper into how people thought and felt about money and financial psychology and behavioral finance became a real thing for me. I got a graduate certificate in behavioral finance. I decided to start a financial psychology and behavioral finance program at Creighton University. And from there, I was like, well, this, I started to learn about financial therapy and financial therapists and leaned head first and into it, really before the pandemic started. This particular FinCon that we just had in 2024 was the first time I had really heard

Starting point is 00:17:38 about the concept of financial therapy. I met you. I met like six different financial therapists at FinCon. And at first I was like, oh, I wonder what this is about. And then I started thinking about it. I'm like, this is so perfect. This is such a need because when people aren't good with money, typically they're not good with money, you know, and they're bad with money, like really bad with money. They've got debt,

Starting point is 00:18:04 they've got low credit scores, they've got all this stress. And, you know, how many times, Scott, have we talked to people who are like, oh, I never learned about money growing up? I think this is episode 6001. So what, like 599 of the people that we've talked to, never learned about money growing up? And yet, you have this huge amount of guilt that you don't know how to make your finances work for you. So the concept of financial therapy really seems to have an excellent place in society today because there's all this guilt. You should not have all of this guilt that you don't know how to make your money work for you. What are some of the most common money-related challenges that you're seeing people facing? Every day, we're reminded that somebody is doing well with

Starting point is 00:18:54 money, whether they bought a car or they bought their dream house or they paid off their loans or they're dead or they've got all these investments. And so sometimes like because you don't have the education information or the experience of doing things positively with money, you see these things happening with other people and you're like, oh, I'm the same age or I'm older than this person. And then you feel this guilt like, dang, why don't I know what I'm doing with my money? This doesn't make any sense. And, but in terms of the things that I see most common, with the people who come to me, they may feel that guilt or shame around money. They also may feel shame around making a lot of money. So for people who may have had humble beginnings and they

Starting point is 00:19:38 are making more money than their parents had ever seen combined throughout their life, sometimes they feel a little shameful about like, oh, I have so much money and I'm doing a job that is a 10th or 25% of the effort that my parents had worked because they labored, they did all of these things to make the little bit of money that they did. And I'm making so much money now. It feels kind of weird. It feels kind of, and they attach an emotion to that. Other clients that I have, and my clients, there's some of them that make $50,000 a year.

Starting point is 00:20:16 There are some that make $50,000 a month. Some of them in terms of like the way that they feel about money, they may feel like I just can't get right or they don't have the peace of mind and clarity around their spending. And so even if they are making enough money, they are living paycheck to paycheck. Like I worked with somebody who they were making $400,000 a year and every month they were like, I just don't know where the money is going. I was like, gosh, there's so much money to not know where it's going. A lot of the things that we just have in our lives can kind of derail you and make you feel away about money. But something that I mentioned to my clients

Starting point is 00:21:00 is that even if you solve the income problem or the income challenge, that doesn't mean that you've solved all the life challenges that are going to happen that will directly relate to your income. And so as you're experiencing these life things, you have to acknowledge that, OK, well, there may be some money, tied to this. There may also be some thoughts and feelings tied to this because this is something that's you're experiencing before you, you know, spend $25,000 a month on a condo in South Carolina.

Starting point is 00:21:33 I can't think of one apartment that would cost that much in the state of South Carolina. But, you know, those things. We've got to take one more final ad break and then we'll be right back. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, investment. the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually

Starting point is 00:22:01 make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all in one tool that makes money management simple. Use the code pockets at monarch.com

Starting point is 00:22:38 for half off your first year. That's 50% off at Monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed's sponsored jobs helps you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored posts. The best part? No monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired. through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash bigger pockets right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash bigger pockets. Terms and conditions apply. Hiring, Indeed is all you need. When you want more, start your business with Northwest Registered Agent and get access to thousands of

Starting point is 00:23:48 free guides, tools, and legal forms to help you launch and protect your business all in one place. Build your complete business identity with Northwest today. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the U.S. with over 1,500 corporate guides who are real people who know your local laws and can help you and your business every step of the way. Northwest makes life easy for business owners. They don't just help you form your business. They give you the free tools you need after you form it, like operating agreements, meeting minutes, and thousands of how-to guides that explain the complicated ins and outs

Starting point is 00:24:22 of running a business. And with Northwest, privacy is automatic. They never sell your data, and all services are handled in-house because privacy by default is their pledge to all customers. Visit Northwest Registeredagent.com slash money-free and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money-free. Thanks for sticking with us. Let's jump back in. Can you give us some examples of how you think about healthy, use the word attach emotion. This is a fact about their financial situation and this is the emotion they attach to it, which I think is a very powerful fundamental concept that you probably apply every day in your work here.

Starting point is 00:25:03 Walk me through some healthy examples of healthy emotions and how they tie to finances and unhealthy emotional attachments to financial situations. Yeah. So unhealthy emotional attachments will be like that shame, that guilt, the resentment that we talked about before, those feelings of like not feeling positive about your money. And so when it comes to positive emotions, the other thing that I talk to my clients about is that emotions or energy and emotion. They're not supposed to be the thing that is the captain of the boat with your financial decisions. they're also not supposed to be the thing that you throw out on the waistline on the wayside just because people tell you that you should take your emotions out of money decisions and so some of the positive e like emotions that people tie to different money decisions is happiness right

Starting point is 00:26:03 you can buy happiness if you know where to shop but joy uh like peace of mind clarity um you'll you'll have these different feelings and really, you know, I'm somebody who's very mindful. So I try to help people get to that point as well, not only in their financial lives, but outside of that as well. But really, the ways that you want to feel about other things in your life, not just money, are the emotions that you're going to attach to these money decisions and these money experiences when they happen. And if you aren't careful, that emotion, negative or positive, will stick to that experience. So when you relive that through another experience that you have or something triggers you that reminds you of something that happened in the past, it also may change your

Starting point is 00:26:56 behavior of how you really want to behave. So do you view your job as a financial therapist as changing the way people feel about money or making them wealthier in some way, a context of building their wealth? They happen to make better financial decisions. Might be another way to put it. So my job is to be a guide to make healthier financial decisions. And being a guide, it may look like me referring you to a financial advisor or a talk therapist because this is what you need right now. Me being a guide may also be me breaking down how you can increase your awareness around your own money story or examining the relationships that you and the people that you love have with money. But really, it's, I can't say that it's either or is really both and. Because I know

Starting point is 00:27:48 when you're saying wealthier, you're talking about like money in the bank, digits on a bank account number. But, you know, when it comes to wealth, I don't only like sift it down to financial means. Because we have so many other resources that we're coming into contact with that are going to impact our money. It wasn't exactly what you asked for, but, It's a little both-hand. Okay, so almost two years ago now, my husband and I sat down with Ramit Zati, and we were guests on his show talking about learning, you know, how to spend the money that we have. A bit of a different problem from somebody who is spending more than they have. But this is something that we really struggle with.

Starting point is 00:28:33 And after the show aired, we were inundated with comments from people who said the same thing. I have this same problem. I've been on the path to financial independence. I don't have the ability to spend money. I have this scarcity mindset. I feel bad when I'm spending money. What advice would you give someone who is struggling with this fear of spending money after hitting financial independence?

Starting point is 00:28:59 So first I would tell them, congrats on hitting the fire number. But then I would let them know, like, hey, the money journey that you took to get here is not the same money journey that you're. running going forward. So we should stop and consider what your new non-negotiables are and what are the things that you're willing to sacrifice for those non-negotiables. Because when somebody hits their fire number, they may get very focused on lifestyle. They may get very focused on like how they spend their time. And that's what we want them to do. Like we also want them to be conscious of how much money they have and how they spend their

Starting point is 00:29:39 money, but it's just a different situation because you pursued fire for additional choices to decide, hey, am I going to stay at this full-time job that I don't like? Or I would like to retire early and decide that I'm going to have financial independence and do the things I want to do. So as you're running really hard to your fire number and then you hit it, sometimes you may feel like, I still have to accumulate this money. I still have to get to this fire number. I still have to get money in the door, but not stopping and acknowledging like, hey, this is a part of the journey, just like my run-up to financial education was a part of the journey, and then my pursuit to fire was a part of the journey. This is a new chapter, and this new chapter is going to take

Starting point is 00:30:25 some new tools and some new living. And so we should take a step back to decide, like, hey, what are the things that you really want to focus on? And it may not be making more income. it may be spending more time with the family or traveling the way you want to or, you know, going to that house more than you have in the past that you have up in the mountains. Or maybe you're splitting half of your time in the United States and half of your time in Jamaica because it's literally paradise. And so, you know, those are things that I would give to someone who's hit a fire number but has a challenge of like really spending their money now.

Starting point is 00:31:03 I like that. What are your new non-negotiable? because my old non-negotiables don't really count anymore. They've changed. But I also, honestly, I say that they've changed. I know that they will change, but I don't know that I have really sat down. Or actually, I do know that I haven't really sat down and thought about that. I like that a lot.

Starting point is 00:31:26 So now my husband's like, thanks a lot, Stephen. Now I've got to go have this conversation and think about these things. Stephen, do you have any tools that you use or that you wish other people knew about managing their emotions around Mike? Like, for example, labeling the emotion. Like, that's, I think, a very basic tool that folks have and done with their emotions. Do you have anything like that that is very simple that folks can begin to apply to make some progress if they have unhealthy relationship with them? Yeah. So labeling the emotion is one thing that's very helpful.

Starting point is 00:32:02 going through your non-negotiables and the things you're willing to sacrifice is also helpful. And when I say non-negotiables, I mean, what are the things that you're going to do, no matter if you have $10 in the bank, $100 in the bank, or $1,000 or more in the bank? Some of those things for me is that I'm going to hang out with my friends and family. I'm going to spend time with my fiance. I'm going to find a way to dine out because I'm a foodie. I love eating my money. And just learning these things that these are non-negotiables for me.

Starting point is 00:32:35 Well, what are the things that I'm willing to sacrifice? I'm not a big shopper. I mean, you can see this T-shirt. It's a brand of T-shirt from my company. I think it costs me $11. I'm not somebody who's huge into cars. So I still have my paid-off Jeep from 2015. There are things that I just don't care about financially that I can push into the non-negotiable bucket.

Starting point is 00:33:01 And I think for people who can make a short list of five things, that will help you kind of move further down the road where you want to go. Another thing that I'll mention that I think a lot of people could use as a resource is we know that as we were growing up with money, that there was somebody in our house who managed the money. It may have been our mom. It may have been our dad. It may have been a joint effort. It may have been another family member depending on your living situation. There are some talks that I've had and somebody's like, it must have been Jesus because no one is managing money in my household. And, you know, there's somebody is doing something with money in your household or in your community.

Starting point is 00:33:43 An activity that you can do is write down a list of the five people who are like closest to you or closest to you as a kid. And as you write down each of these people's names, under their name, write down the five characteristics that you believe that they, like, feel or think when it comes to money. So maybe there's someone who is conservative with money. Maybe there's somebody who is a risk taker. Maybe they like to live lavishly. Maybe they like to maybe they're a big spender when they're friends and family in town. Maybe they love to do events, right? And as you make this list of five things from each of these people and you get to the fifth person, one thing that you can go through as you look at these experiences or these ways that people think and feel is you can circle the things that you have

Starting point is 00:34:36 also adopted. They're also aligned with you. And for some people, the first time they do this, they realized that when they left their parents' house, the one thing they decided was that they weren't going to be like their parents with their money and that they've turned exactly into their parents with their money. And so really just taking a step back and getting like a 10,000 for overview of your thoughts and feelings about money is something that will help people as far as tools. I was talking about money personalities earlier in terms of the frugal entrepreneur and the dreamer. There's an app from a nonprofit called the Singleton Foundation on Financial Literacy and Entrepreneurship called GrooveMoney. And if you go to groovemoney.org, you can take

Starting point is 00:35:25 your money personality test and it'll spit out like one of eight money personalities about you and I was gonna send it to y'all so we could talk about it on here but I just ran out of time but I think that you know for for people who are trying to learn more about themselves and just really get a snapshot of like what they can do to change before you can change and take these steps really you have to understand yourself right there are a couple of stages of change and so before you can start the action stage you have to make some contemplation and and some things that you're going to think about of how you're going to get to this point.

Starting point is 00:36:04 So hopefully those a couple of tools will help. Those are awesome. Thank you. That's a really powerful one. I'm thinking about how my, you know, people that were prominent in my upbringing, where how their, what their relationship with money was. And it's like you always, you always think about your parents, who I think had a pretty reasonably healthy relationship with money.

Starting point is 00:36:23 And then, you know, there's up. But the other people, I think, are also, is really a big one. I can think of several people who really impacted the way I think about. it. And I'll have to go back and do that myself. So that's awesome. But then groove money. I have taken a financial personality test. I forget by results. It was a different one, but also go check that one out here as well. So thank you. Cool, cool. You're welcome. Yeah. And I quickly sent a note to my husband because I don't want to forget. I said, oh, I'm chatting with a financial therapist. What are your non-negotiables? What's your money personality now? He's like,

Starting point is 00:36:53 oh, that's really interesting. And I'd be interested in hearing what yours is, me, me personally. And I'm like, yeah, we're going to have a conversation about this. We're probably turning it into a podcast episode because why not. But I love that. There's something that's interesting here in finance that's probably different than other parts of life where like it's always a good idea to eat healthy, take care of yourself, you know, be fit, you know, all those kinds of things. But money is not like that, right? Like what is it like, Mindy, Stephen needed more of this unhealthy frugality back when he was 18. Right. And, and that's really important to get started in the financial journey or pay off debt. That's a healthy dynamic, at least, at least in relationship to giving someone some semblance of independent, like, remove separation from dependence and into this world of independence. And then to build wealth, to build that first couple hundred thousand or first million dollars in wealth, which is a long ride needs that discipline. And then once you have this financial dependence, you know, abundance that you have, Mindy, for example,

Starting point is 00:37:58 then that mindset becomes in. And so there's this evolution that I think is very difficult for people because their financial position probably changes faster than their mindsets. I'm going on on this for a while. Stephen, I see you nodding. It sounds like you're agree. But like that's a dynamic that doesn't exist in other parts of your life, really, right? Yeah.

Starting point is 00:38:15 What you just said in terms of like our experiences moving faster in our mindset is exactly right. Let's go back for a second to something you said here around the family fund. because I think that this is a dynamic that we encounter occasionally on bigger pockets of money. But the fact of the matter is that people who listen to a personal finance podcast in their free time, hundreds of episodes of it, are likely to have different sets of problems than other people who are, you know, perhaps, you know, where you were 18 years ago struggling to get out of debt, right? Our typical listener is someone who's interested in fire. in a dynamic that impacts a lot of people.

Starting point is 00:38:57 And I know this from my time volunteering with folks in kind of lower income or poverty situations in teaching personal finance. Is this concept of the family or throw in the friends fund? There's a community that really holds these folks that are struggling up. And then when they get money, they feel like they need to give back to that community, throw a pizza party for the block or these types of things. Do you encounter this frequently? Am I articulating this appropriately, this problem?

Starting point is 00:39:30 And is that a tool that is commonly needed in folks that you're working with from a financial therapy standpoint? Yeah, I'm picking up what you're putting down. And in terms of people encountering this, as I mentioned before, they, like, that person may be financially well, and they feel guilt or they feel some shame because they're that they still know people who are their same age or maybe older who they don't believe is going to encounter this type of financial security or financial independence. And so they want to help.

Starting point is 00:40:05 But you also don't want to turn yourself into the financial faucet for your family. That anytime somebody needs something, they just come to you and you just pour out the money. And so this is something that I do encounter, especially with my high income or higher net worth, financial net worth clients. And I always say financial net worth because your money can't ever equate to like you, your value as a person. But when it comes to somebody having enough money where they can make decisions to say like, hey, I'm going to help another family. You want to help that other family, but you also want to put your mask on or keep your mask on. And so I'm somebody who is huge into community.

Starting point is 00:40:45 I believe that there are community savings tools that work for our benefit and also this. This is a community financial tool. Like a family fund is something that also sparks new conversations for people. Like I was talking to a client, they said, I put that family fund in place. And the next family reunion, we talked about how to put more of our money together so we can grow a bigger family fund. And then we start investing together in the family, with the family fund, instead of only giving people emergency like loans. And so these financial actions, as we unpacking, some of the emotions around them and we get resources to go a little bit further down the road

Starting point is 00:41:25 really impact they have a ripple effect on our family on our friends and our community if we do take the the road of the work that we have to do to get to that point you know this is so fascinating because because this this is a this because of my privileged background around this like it is unfathomable for me to have a situation it's just so unlikely that my parents would ask me for money for example, and my brother would ask me for money or another family member there. But this is a real issue that holds back tens or hundreds of millions of Americans, right? Because that's how this is working. And this is a great tool to think about that, right?

Starting point is 00:42:04 Because it's one thing to knock out your debt. Once your debt's knocked out, then I become a provider for other folks in my life. And that is a real problem that I saw a number of times among other folks and perhaps other listeners who may have enjoyed similar privileges are not really thoughtful about out there. And I love that as a tool. That's a great concept here. And hey, there's just a percentage that's going to that purpose and the rest is not. That's going to help everybody.

Starting point is 00:42:28 Now everyone's going to get more, going to participate in this. So thank you for sharing. Yeah, absolutely. I love that. And this is perfect for the top of the year. Like, you know, this is the conversation we're going to have. Yeah, I even like the idea of a family fund. You know, it's January.

Starting point is 00:42:42 And maybe I'm going to throw a few hundred dollars a month into my family fund. And maybe I'm not going to tell anybody about it. But if somebody reaches out and they need money for XYZ, and it's a family fund. Don't reach out to me and be, hey, I heard you talking about you have extra money. No, I don't. There's no such thing as extra money. Is there a Bigger Pockets money family? Yeah, for anybody in the Bigger Pockets money family wanting to borrow from the family fund,

Starting point is 00:43:10 it's Scott at BiggerPockets.com. But, you know, there have been people in the past who have asked me for money. And my thought is always first, are you going to be able to pay me back? And there are some people that I would never lend money to because I would never get it back. But it's not lending from the family fund. It's giving from the family fund. And if they return it, then it's a loan. I feel the same way with people who are in the personal finance community who a lot of people see me as a financial wellness or financial therapist who's also a speaker.

Starting point is 00:43:45 And as they see me speaking, they're like, well, how can I, how can I, how can I, to do what you're doing. And if I give you some insight on like how you can grow your speaking career and then you come back to me later and like, hey, how do you do this? And I'm going to ask you, did you do what I mentioned to do before? And if you did not, it's very hard for me to help you going forward. And my fiance also told me like, hey, stop helping so many people with so much of your time. And so that's how I, you know, quantify if this is worth my time. Like, did Did you take action? Are you in the position to take action and did you take action?

Starting point is 00:44:22 So I love that. Okay. Steven, this has been such an awesome conversation. I'm so thankful for your time today. Where can people find you online? So they can find me at my website, stepan-M-Hughes.com. So that's S-T-E-V-E-N-M like money, h-U-G-H-E-S dot com. So stephenem-Hughes.

Starting point is 00:44:44 And then they can also find me on LinkedIn and Instagram-Hus. Instagram, that's where I'm most active. I don't do a lot on social media just because a lot of my work is offline. But yeah, if people want to connect me there, feel free to reach out. And then on my website as well, I know we talked about affirmations a little bit. If they go to Steven M. Hughes.com slash affirmations, they can download the affirmations that I use and that my clients use as well. Awesome. And there's another tip I got from Stephen. It's not Mindy, M like Mary. It's M like Monday. M like money. Yeah. All right, Stephen M. Hughes, thank you so much for your time today. It's always good to chat with you. And we will talk to you again soon.

Starting point is 00:45:25 Yes, sounds good. I appreciate you. Peace. I appreciate you. Bye-bye. All right. That wraps up this episode of the Bigger Pockets Money podcast. He is the Scott Trench. And I am Indy Jensen saying farewell, Snowbell.

BiggerPockets Money Podcast - 7 Maxed Out Credit Cards to Money Expert by Making a BIG Mental Shift

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.