At some point, you will experience a financial setback. Unexpected expenses require charges on a credit card or dipping into savings. This perceived “loss” can lead to personal judgment and shame when you have an all-or-nothing mindset about money management.
In today’s episode, I help you reframe financial setbacks as evidence of growth. You have the financial tools to pay off debt and readjust your budget to get back on track. A financial setback does not mean you don’t know how to manage money. So don’t bury your head in the sand or feel shame around financial setbacks. Instead of seeing the loss as an excuse to bury your head in the sand and feel shame, turn that financial setback into a data point to help grow and refine your money journey.
Stay tuned to hear insights on these key topics during this episode:
[02:20] Financial setbacks & judgements
[05:35] What do you let financial setbacks say about you?
[07:11] Reframing financial setbacks as evidence of growth
[10:30] Translating financial setbacks into data for budget adjustments
[14:44] Allowing yourself to ask for help
[16:23] Questions to help you get through a financial setback
Tune into this episode of Money Files to learn how to reframe financial setbacks and maintain a positive money mindset.
Are you ready to start asking for help with your finances?Apply to work with me, and let’s start working towards your financial goals.
IF YOU LOVED THIS CONVERSATION ON WHY YOUR BANK ACCOUNT DOESN’T MATCH YOUR BUDGET, CHECK OUT MY EPISODE ON MOVING FORWARD AFTER A FINANCIAL FAILURE!
Transcript for “How To Overcome Financial Setbacks”
Intro: Hi, and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Keina: Hello and welcome back to another episode of Money Files. So today I want to talk to you, which I think is a very common thing that so many of you experience, whether you’re my client, whether you’re a podcast listener, just like if you are a human that handles money, you’ve experienced this and you’ve experienced some type of financial setback. And what I notice a lot with the clients that I work with and the people that I talk to is that most often when you experience a financial setback, you go into some form of all or nothing thinking. So you have to pay for car repairs and it has to go on your credit card. And so then you start thinking about how, like, see I can’t ever get ahead or you start to save money and you put it into a savings account and then you have to use it to repair something in your house.
It’s like reaffirming for you that you’re not good at saving money so you just stop saving money because it’s like either I’m going to go all in on saving, or if I have to touch it, then that means I can’t save, so I’m either going to save or not save. And so you experience these different financial setbacks that can happen in your business when maybe you have been doing a good job managing your monthly cash flow in your business, but then you have a lower income month or some unexpected business expenses and you’re like oh my goodness I’m back to where I started two or three months ago. And so when we’re experiencing financial setbacks, we can have the tendency to just look at the setback and make a judgment about what that means about us and how we’re able to handle money.
And we look at this moment in time, which is, if we think about all the moments in our life, it is like a little bitty dot. It’s like as small as a grain in sand, but we look at it as like Mount Everest. It is huge and that financial setback that you’ve experienced in that moment, you make it mean that you are not able to manage your money well or that you’re never going to get ahead. I actually was just talking to a client and we were talking about she has some credit card debt that she wants to pay off, and she also has a 401k loan that she wants to pay off. And so she also has $10,000 in her savings account and the 401k loan and her credit card debt, it’s about $10,000. So if we’re just looking at it as like black and white, we’re like oh my goodness, these two zero each other out.
I was celebrating her because she has $10,000 saved. She’s like yeah, I have $10,000 saved, but I need to use it for these things. And I was like, okay, that’s one way of looking at it. Or in between like right now, which it’s December and May or June of next year when you’re thinking about leaving your job and the 401k loan is due, one, your 401k loan is going to be less than it is right now because you’re making payments on it every single month. And I was like, think about all the ways that you could earn additional income in between now and June. You could have a contract job that you take advantage of that could completely wipe out both debts. I said you could have your tax refund that could come in, it could be higher than expected and it could wipe out both debts.
You also could land a job before your timeline that you’re considering, which is in June when you want to leave the job. And so with this new job, one, we have a salary that you are thinking about, and so you’re going to be earning more money. This new job could come with a bonus that could also completely wipe out the debt and your 401k loan. But I wanted her to see that there was other options beyond just, yeah, Keina but I have no savings because this savings is like the exact amount of the debt and the credit card debt that I need to pay off. And so as a coach, I always like to present different options because of the fact that we’re so often times in the same cycles and patterns of thinking that we can only see the normal pattern we have.
And so if you have a thousand dollars in your bank account and you have a thousand dollars on your credit card, you’re like yep, I have no money. And it’s like, is that true? What else could be true? It could be true that especially if you’re a business owner, you’re like yeah, I’m going to go make, an additional $5,000. I’m going to build a plan to be able to pay off my debt and I’m going to keep the thousand dollars in my account and I’m going to pay the thousand dollars off on my credit card and I’m going to continue to make more money and know how to manage it well. So I say that to say that when we are experiencing a setback, we have to be able to ask ourself, what am I making a setback mean about me and my ability to move forward?
So if you are someone who’s experienced a financial setback this year, I want you to take a step back and think about, list three financial setbacks you’ve had this year, or maybe three financial setbacks that you’ve had in the lifetime of you being alive for 30 decades, 40 decades, 50, whatever. And I want you to think about those past setbacks what have you made them mean about you? Like what automatic negative thoughts did you possibly have? And maybe you don’t even necessarily have to have automatic negative thoughts, but what I oftentimes find is that the people that I work with, they’re like all or nothing. So if I had to dip into my savings account to be able to pay to repair my car, then I’m making that mean I’ll never be able to save again. And so just think about like what are the situations that I’ve experienced this year?
And if I’m thinking about the fact that I’m never going to be able to get ahead, that’s stopping me from actually dreaming about where I desire to be financially, it’s going to result in me being stagnant because I’m so focused on what I can’t do because I’ve had a financial setback. What I want you to do is to be able to reframe it. And I want you to be thinking about, okay, what growth is present for me here? So let’s take the example with the car, because I think the car is one of the ones that like, it is the thing that keeps coming up. I saw a reel recently where it was like you get caught up on bills and then this is your breaks. And it was like just a screeching sound. It was a singer that was singing. And I think so many of us can relate to that where you’re okay, I’m ahead and then something breaks, your house needs something, your car needs something, a kid calls you, whatever it is.
But the question that I want you to ask when you experience what might be for you, a financial setback, is I want you to ask yourself what growth is present for me here? Because I believe that when I’m looking through clients accounts, when I’m looking at my own finances even, and I might, get caught off guard by an expense or something that I didn’t expect. It’s like that’s just a data point. It’s nothing more than a data point. It doesn’t mean that I’m bad with money. It doesn’t mean that my financial situation can’t be different 30 days from now, six months from now, a year from now. But when I think about the growth that is present, I mean there’s are a lot of things that I can think in the car situation. So if I’m thinking about the car, which this actually happened to one of my clients, she was like I had to dip into my savings to pay for my car. Like one, be grateful that you have savings.
Think back to prior versions of you and you may not even have had the savings to be able to put into your car. So if you had a thousand dollars repair that needed to happen on your car, in the past you probably would’ve had to put that on a credit card but this time I actually had it in a bank account. I was able to use my savings to get my car repaired. So you have grown financially just by the fact that you actually thought about the fact that let me save money for something like a car repair. And the other thing that you can think about that is like okay, I estimated that maybe I would need $500 a year for auto maintenance, but what my car has been telling me is that it’s getting older and I actually need to save more money to accommodate for car repairs.
So the other thing that you can think about in terms of thinking about your own growth here is going back and looking at how you’re planning if you have a budget and say you were saving, $50 a month, which would be $600 a year, and you’re like alright, I need to increase that to $100 a year because I’m really spending about $1,200 and that number feels better. So yes, you had a setback in the sense of like you didn’t plan for that expense, and you may be a little bit bummed about it, but thinking about what skills do you have that you didn’t have in the past that will allow you to take this opportunity to celebrate your own growth and continue to move forward because you know how to better plan for situations like that. You don’t have to take this loss as like an all or nothing. You are constantly going to be learning about yourself and you’re going to be learning about your numbers.
That’s one of the things that I always like to keep in mind for my clients and always telling them, and that’s why I think your budget is like a working document. It is not like a set and forget. It happens all the time when we think about groceries and people are like, I think I spend $300 a month on groceries, and then we go through a month and I’m like I don’t know, you’re a little bit over. And then we go through another month and they’re a little bit over again. And so that data tells me, oh, we probably need to just bump your grocery budget up from $300 to $400. Does that feel more true for you than trying to make your groceries fit into a $300 box? Those are the things that we consider. And so when you’re experiencing a financial setback, you have to also ask yourself, what else do I need to consider? What is this data point? What is it telling me about in terms of how I want to best prepare for future expenses? And not take this opportunity to belittle yourself and talk to yourself about how you’re not good with managing your finances.
So setbacks are really an opportunity to identify how we desire perfection, and to be able to change that narrative for yourself that this journey, your financial journey doesn’t have to be about being perfect. We can move the needle and you can still move the needle towards building wealth without being perfect. I want you to focus on how can you show up for yourself in a consistent way. And that could be like I’m going to have my weekly money dates and I’m going to look at my numbers. Sometimes there are going to be things that I’m disappointed about, but I’m going to be thinking about what’s the opportunity for me to experience growth here? What is different about this version of me than would’ve been a year ago or two years ago? So being able to celebrate what’s working for you. And I think setbacks also challenge our fear of falling back into old patterns, which is why I want you to really be able to focus on the growth aspect and asking yourself, how is this different than it would’ve been in the past, even if it comes to like oh my goodness, I’m in debt again and it’s I just paid off $10,000 worth of debt.
I need you and I want you to go back and be like okay, well what’s the growth that’s present here? Maybe in the past you would’ve had $20,000 worth of debt and maybe right now you have $3,000 worth of debt. And so you’ve started to have a different conversation with yourself about debt sooner. Maybe that’s an area of growth where it’s like okay, in the past I would’ve gotten to $20,000. Right now I’m at $3,000, especially if you’ve worked with me and this is something that you’ve experienced. It’s like you have tools in your toolbox to make a plan to pay off this debt and that’s an opportunity for you to build your financial muscle and not belittle yourself about the fact that dang, I’m back in debt again. Here we go, like it’s old patterns because your debt, or like financial setbacks, they can make you want to put your head in the sand. And the questions I’m asking you today, and the reframes I’m giving you today is to make sure that you don’t put your head in the sand.
Putting your head in the sand, that’s the thing, it’s going to solidify your limiting belief that you’re not good at managing money. It’s not that you’re actually not good at managing money, it’s that when you think you’re not good at managing money that you tend to hide and the result of hiding is that you don’t manage your money. It doesn’t mean that you’re not good at managing your money, it just means that you don’t manage your money. So that’s why we want to once again, focus on the growth that’s present and be able to call ourselves out on what are we making a financial setback mean about our ability to move forward. So I need you to have some real tough conversations with yourself, roll your neck, roll your eyes, whatever you need to do to get the version of you that is committed to your financial growth to be able to show up.
And I need you to decide if you are in the midst of a financial setback, I want you to decide what is my next best step. For some of you, it’s going to be booking a call with me to work with me for five months. And it’s about being able to say I am going to ask for help because I want support in being able to move forward. My clients, they come back to me, some of them come back and we work another five months together not necessarily because of financial setbacks, but they realize like okay, there’s a different level of growth I want to go to and it’s doesn’t look the same as when I first worked with Keina. And so we’re able to work through that or some of my clients that have worked with me, we do a one-off coaching session and we’re able to refresh the tools that they have.
And so being able to set a clear path that they can follow for the next six months, for the next year, like your next best step might be asking for help, your next best step might be let me actually sit down and have a money date or let me open up the credit card statement. Let me open up the bank statement. Think about the thing that you want to avoid and block out on your calendar, 10 minutes, 15 minutes, 30 minutes to do the thing that you want to avoid because of the fact that you’ve experienced this setback. Because the quicker you can talk to yourself about what you’re making the setback mean and what you’re making it mean about your ability to move forward, the quicker you’re going to see a shift in your result and the shift in how you feel, and you’re going to get back on track.
So in closing, for today I want you to really be able, like I’ll just leave you with these parting questions. So you’ve had a financial setback, you can think about the last financial setback that you had and ask yourself what opportunity do I have right now? And what do I want to believe about myself today and what do I want to believe about myself a month from now? What do I want to believe about myself in six months from now? Because I really want you to be able to take the financial setback and make it just a dot in the grand scheme of things, because that’s truly what it is, guys especially when you stop shaming yourself about how you’ve managed your finances in the past and making that mean something about how you’re managing your finances right now. So if you are like oh my goodness, Keina, this is me, this is me, this is me, please, please, please reach out.
I want you to reach out because there is nothing better than being able to get the support that you desire. My financial coaching container is shame free. You may come in with some shame because it can be really embarrassing or you feel really vulnerable, I should say talking about your finances. But I want to be able to hold a space for you to be able to talk about your finances, especially you may have shame about feeling like you’ve never learned about how to manage money or you have shame about how much money you make and how little you have to show for it because maybe you don’t have any savings or maybe you have a lot of debt. What I do in my five month coaching partnership is I am going to take the judgment out of managing money.
We’re just going to look at what’s there, and I am going to tell you exactly where to put your money, exactly what order to put it in. We’re going to talk about what’s coming up for you and you’re like Keina I’m thinking about a client that I’m working with right now, and when she came to work with me, she was like Keina, I have two trips planned and I need to go on my trips. And so we were able to work in the two trips that she had planned. There was no shame with like oh my goodness, why would you plan these two trips and you say you’re not good at managing money? No, we’re not doing that. She’s actually a business owner. So we plan the two trips. She has like $3,000 saved in her business accounts right now.
She has like over $7,000 in her compensation accounts so she can pay herself. We got the system, built a financial system in her business so she can pay herself consistently so she can manage her business expenses consistently and she went on her trips. And guess what guys nobody was hurt, nobody’s been hurt at all. And we’ve actually had to do some of the work around this financial setback, like she had an unexpected expense that was $2,500. We’re able to figure that out. We’re working through the things as they come up. We have 45 minute coaching calls three times a month. And so you’re able to bring real live active financial challenges that you’re experiencing because once we get the system in place, we start to use the system so it can help you feel more clear about what your plan is to manage your money.
But then as things come up when you’re like oh yeah, I told my mom that I would give her $500 or I want to donate to this organization, we talk about what does that actually look like? So you’re able to say yes to the things that you desire to say yes to, but also you can work on building your wealth at the same time. So budgeting is not a consequence as a six, seven figure earner, it’s really the tool to be able to help you build and create a life where you can spend money drama free. So if that’s something that you are looking to work on in the New Year, my calendar is open. So if you go to the link in my show notes, you can book a one-to-one call with me. Or if you go to Wealthovernow.com, you can see the link there and it says book a call and you can apply to work with me. We’ll spend an hour together, I’ll talk to you about your specific needs, your specific challenges, and I’ll create a plan for you right there on the call and we’ll choose a date to get started. So thank you so much for tuning in. I hope everyone has a fabulous holiday season and I will talk to you guys next week.
Outro: Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment and let’s get started.
