Why money is like a soap opera and how to ditch the drama.
Have you ever watched a soap opera? All the drama is caused by one thing. Lack of communication.
That’s it. All the conflict could be easily cleared up if people just talked. This makes for great television. But this lack of communication — drama-causing story line — can wreak havoc on your finances.
And, unfortunately, this is how most people interact when it comes to talking about money. You can blame it on our culture. By osmosis we have learned the unspoken code: Don’t ask. Don’t share.
It’s taboo, cheap, or rude to ask people how much they make. To ask how much they paid for their house. We feel dumb if we have financial problems. So, what have we been trained to do?
Hide it! Go out with friends, and silently cringe when the bill comes. Or not go in the first place because of some “fill in the blank” reason when, in reality, it’s because you don’t have the money.
I often encourage my clients to talk about money with their family and friends. But this is the last thing they want to do. They don’t see how talking about it can help their problems go away. They are afraid they’re going to look dumb or stupid. As one of my clients put it, “’Cause I should have my sh*t together by now!!!”
Let me show you how much “talking about money” could change your world for the better.
I have a client as glamorous as Sarah Jessica Parker. She works for a fashion house, and she makes great money. $78,000 to be exact. She had about $160,000 in private student loans that we negotiated to $38,400. She had to put $8,400 down right away. * Then she had to pay $1,200 monthly for 25 months. If she missed a payment the deal was off. Her take-home pay after health insurance and taxes was $3,800. After you subtracted rent, utilities, phone, and groceries she would only have $710 left. That doesn’t include any haircuts, clothes, pet food, or financial planning service. Nothing. $710 goes fast.
When I asked her what’s the strategy, she said she could sell some clothes. That’s a good start. But, I’m sure you, dearest Reader, realize we need something more than that. The clothes will run out. And how much can you make at selling your clothes? (Turns out about $90 a month. )
I took her up on the selling her clothes offer, but told her that we were going to need a little more ammunition. It’s at this time that it’s easy to start fantasizing about winning the lottery or coming into some windfall of money. But that’s a low probability event, to put it mildly. So how could we win without getting more money? What would give her the highest chance at success? You see it on all sport channels. Encouragement!
Put more simply: Share your dreams and ambition of being debt-free. Talk about the unbearable weight of the financial stress. Share how you are going to have to add a little imagination and planning to your pay-for-play activities ’cause you got dreams to conquer!
Miss SJP always thought about this situation as super shameful and embarrassing, thus she was reluctant to share, but she was overlooking one fundamental truth. Your friends and family want you to succeed. When the situation is very dark and challenging, they want to help you even more.
How would you feel if your friend told you, “I have the deal of a lifetime. I can finally stop hiding from my student loans and have them paid off in 25 months. But cash is going to be skinny jean tight.” Would you think …
“What a loser.”
You would say, “Go get that freedom, Wonder Woman. Crush it!”
Just because something is hard doesn’t mean it sucks, and we should try to remove that feeling ASAP. Anything worth fighting for is usually a challenge! SJP has only 5 months left before she is debt-free forever! She has been able to pay $1,200 to her student loan debt for the past 18 months. And she went to London, and Paris! WTF?!
Like living in a tiny space makes you think about what items you want or don’t want, the same thing happens with having “a little” money. SJP has become a master at only spending money on things that bring her outrageous value. This is a skill she has mastered, and she can keep using it for her entire lifetime. Do you see how priceless that can be?
It’s important to note that her friends and family did not pay her way. She simply started suggesting activities that allowed her to pay off her student loan and have a good time. She told everyone about her progress. And you know what? Her friends started to open up about their money troubles too. Because she did, it unconsciously gave them permission to do the same. (What a gift!)
Joe Cocker said it best. We all get by with a little help from our friends. Talk about money. If this scares your socks off, start small. Your future self will thank you.
*We knew this because we had called a couple years before. It took SJP 18 months to save this loot. The very interesting thing to note is that, try as she might, she was only able to save an average of $466 a month. But, as soon as she started sharing her situation with her friends, and committed to squashing the debt she was able to save $1,200 a month, for 18 months and counting!