Your financial well-being shouldn’t hinge on your next paycheck. If you are potentially affected by the impending government shutdown or can’t take time off of work because missing a pay cycle means you can’t pay your bills, this episode is for you!
If the thought of missing your next paycheck scares you, I want you to start prioritizing your financial health this year and start managing your money intentionally. In this episode, I guide you through practical and actionable steps to break free from this cycle. From crafting a comprehensive budget to identifying essential expenses and establishing a robust emergency fund, I will help you create a future without financial anxiety.
I might ruffle some feathers with this episode, but that’s okay because discomfort often leads to positive change, and my message is an opportunity for you to get out of the paycheck to paycheck cycle.
Stay tuned for insights on these topics:
[03:27] Stop quiet quitting
[05:29] Implications of a government shutdown
[10:58] You shouldn’t be living paycheck to paycheck
[13:36] The difference a financial plan makes
[16:16] Actionable steps to improve your financial health
Tune into this episode of Money Files to learn how to break free of the paycheck-to-paycheck cycle and take control of your financial health!
Are you ready to experience less stress with your finances? Apply to work with me, and let’s change your relationship with money.
IF YOU LOVED THIS CONVERSATION ON, WHY YOU SHOULDN’T DEPEND ON PAYDAY CHECK OUT MY EPISODE ON RIPPLE EFFECTS OF COACHING: TWO YEARS LATER WITH MUHAWU!
Transcript for “Why You Shouldn’t Depend on Payday”
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 I just want to warn you before we get into today’s episode that some of you might be offended and I’m okay with that because I need you to be offended so you can create a change in your life. I’ve worked with over a hundred some couples, some business owners, some men have slipped in as well and the reason that I can speak to you the way that I’m speaking to you about money is because I know what’s possible. You live in the same muck that exists in your life each and every single day. You’ve been living there probably for decades and you just think that what you have created financially, like that’s just the status quo. And that doesn’t have to be the status quo. And I don’t want it to be the status quo. And I’m okay if I make you feel uncomfortable from a place of love, but also because I want to inspire change within you.
Actually this morning, one of the things I was thinking about and y’all, I’m going to talk about nutrition again, but I was meal prepping and I listened to a podcast, gosh, I think it was like a year or two ago now, but it was talking about, I think the title was called like Quiet Quitting. And I was thinking about my meal prepping, which if y’all know anything about me, I go in and out of these cycles where I’m like really good. And I’ve gotten to a point though, where I’m like, I’m going to continue to show up for myself even if that looks like me not being perfect every single day because I am attached to the outcome and the result that I want to create and I’m attached to the person that I’m becoming.
And so today I was just like in my kitchen and I was thinking, and I was like, you know what? I’m so glad that I haven’t quit on myself with my nutrition. And when I say quit, I mean like just ultimately given up. I’m not talking about like days where you’re like, dang I was supposed to do the right thing and I didn’t do the right thing or a week that you didn’t do the right thing, whatever that looks like. But I am talking about just throwing in the towel and giving up altogether. And I wrote a post, which who knows how many people saw it in the world. But I want to say it to you because I want you to think about this. You can use it for different areas of your life, but I want you to think about it with your finances.
And I’m talking about this because I’m going to say things that are going to make you feel uncomfortable, but I want you to feel uncomfortable because I want to help you. And sometimes we don’t get help unless we feel uncomfortable. Most times when people apply to work with me in my five-month partnership, it’s because they’re at this place of discomfort and they need the discomfort to create change. And discomfort helps us create change. But what I was thinking about and what I put on social media is if you are going to quit on a goal this year, make sure you say it out loud so you don’t quietly quit on yourself. And if quitting isn’t what you want, I want you to dust yourself off and choose the 1% that will move you forward today. I’m going to say that again because I know some of you listening are also former clients and maybe you have some goals, financial goals even where you’re like, dang, I ain’t doing what I’m supposed to do.
But I need you to dust yourself off and you have the tools for sure if you worked with me to choose like what’s the 1% that will move you forward today? So I’m going to read it again. If you’re going to quit on a goal this year, make sure you say it out loud so you don’t quietly quit on yourself. And if quitting isn’t what you want, dust yourself off and choose the 1% that will help you move forward today. So I have to do this in my business. I’m doing it in my personal life. Like if you’re going to quit on a goal that you set, if you’re like, hey, I said this year I’m going to budget and you got to two months into the year and you haven’t budgeted and you’re not making that 1% movements each day, or even 40 of the last 60 days of this year or what have you, I am asking you, I want you to say out loud that like I’m quitting on budgeting for 2024.
And the reason that I want you to say that is because that is going to create a decision point for you. And do you actually want to quit? Like do you want to quit on yourself? And if you do want to quit on yourself, there’s no judgment, but I want you to say it out loud instead of quietly doing it and then being frustrated when your results haven’t changed. Because if you can tell yourself, no, I’m actually not going to quit, it’s going to help you reframe the story that you create and the story that you have around budgeting, around shifting your finances this year. So just a little side tangent, somethings that I needed you to know.
So the reason I told you that this episode might ruffle your feathers is because I want to talk about the pending government shutdown. So when this podcast comes out, it’s going to be March 5th. And if the government hasn’t made a decision by March 8th, there are a lot of people’s jobs on the line. Like you got TSA that’s impacted, you have contractors, you have federal employees, like some people will get their paycheck and some people won’t ever get their paycheck returned to them. Some people have to still show up at work even though they’re not getting paid, like there are a lot of different circumstances. And I’m not talking about this from a political side, that is not my cup of tea, that is not where I’m going. But what I want to tell you is that you shouldn’t care if the government shut down.
And I’m saying that from a financial standpoint because if you, especially if you are in the government and you know the impact of this, it can create a looming fear for you of what is going to happen if I don’t get paid. You can have a pit in your stomach, you can start thinking about all your bills that are going to be overdue, like just flood in when you think about the fact like, oh my gosh, I can’t afford to miss a payday. And for those of you who aren’t in the government, this episode is still for you because maybe it’s not the government closing down, but maybe you need to take a leave of absence from work and maybe you need to take a leave of absence from work that you don’t even know about right now, but it’s in the future. If you listen to my episode with Laru, she was talking about like she needed to actually take some time off work and she’s like, I can’t afford to take time off work because I don’t have any money saved.
It could look like the payroll processor at your job is failing and you don’t get paid on the fifth of the month because that’s the day you’re supposed to get paid and you’re stressed out about your paycheck not hitting your account or maybe it’s another covid like situation. I had a client whose husband is in the restaurant industry and their income looked very, very different when covid hit because people weren’t going in and out of the restaurant. But here’s the thing, you shouldn’t care if any of those things happen from a financial standpoint. And I mean I want you to care because it impacts your life, but I want you to be in a financially healthy state where you can actually be thoughtful about life’s circumstances when they happen, like my client that I was just telling you about when Covid hit and her husband wasn’t getting paid because restaurants, you got to have customers and people were trying to figure out what’s the transition, like we can have takeout and we can do this and we can do that, we can be creative.
But in the immediacy, what she was able to do is look at her accounts and be like, okay, we have $10,000 so we’re good. We don’t need to stress and I can talk to my husband and we can talk about how is the business doing. What does this look like? What do we need to cover? What can we move around financially? Because the finances weren’t a stressor, they could actually tend to the actual problem and the actual problem wasn’t finances. It’s like looking to see how can we be creative to help my business generate income. Similarly, if you need to take a leave of absence from work and I had a client that actually she just had surgery, she needed to take off two weeks and so that’s going to impact her paycheck in the next like 30 to 45 days. She shouldn’t be worried about her paycheck. She should be using her energy to pay attention to how can I heal?
How can I make sure that I’m getting the nutrients that I need and making sure I’m getting the sleep that I need? That’s where her focus should be. Her focus should not be on lack of income or a decrease of income. And the same is true if we’re talking about the government shutdown, like you shouldn’t be focused on the government shutting down. Like for some of you, honestly, you should be like, good, guess what I get to go? I get to go take a vacation and basically the government’s paying me, especially if you’re someone who knows that you’re going to get your paycheck back whenever the government opens again. But if you have the space to not be financially fearful, you’re going to be able to think about other things. You’re going to be able to think about like okay, I know my bank is doing cash advances for those people that are in the government, or I know what my essential expenses are and I’m going to be okay.
If you’re in the position where you’re a contractor and maybe you’re not going to get back pay for the weeks that you missed. But in order to get to that space, you can’t be in the paycheck to paycheck cycle. And the only reason that you would be scared of the government shutdown from a financial standpoint is that you can’t afford to miss a payday and that you are in the paycheck-to-paycheck cycle. What’s happening is that you get a dopamine hit on payday because your bank account has money in it again. But if you don’t have a payday, then that means you have no money. And you just shouldn’t be living like that. Point blank, whether you’re a contractor, whether you’re a federal employee, whatever it is, anybody under the sound of my voice, like you should not be in a position where you get a dopamine hit when your payday comes.
You shouldn’t be thinking, oh my goodness, thank God I got paid today. I have money again. My clients don’t even know their pay dates anymore. The people that are in debt, the people that have been in the paycheck-to-paycheck cycle, multiple six figure earners, they’re no longer worried about when their paycheck hits. Now do they know when their paycheck hits? Of course. But they don’t have the same feelings that they had prior to working with me where they needed their paycheck to hit, they needed their paycheck to pay the mortgage, they needed their paycheck to pay the utilities. They don’t need their paycheck. They don’t need their paycheck because they always have money in their account. They have a different level of security, they have a different level of financial safety and they created it with the exact paycheck that they have right now.
So those of you who are waiting on the sky to open up and a light to beam down because you think you need a savior when it comes to you getting out of this paycheck to paycheck cycle, that’s not true. You make enough money, you just aren’t managing your money in a way that’s intentional. And the only thing that you’re paying attention to is paying your bills. You can’t just pay attention to paying your bills. Like that is like level zero of being an adult. You don’t get any points for paying your bills because that’s your basic responsibility. What we’ve got to do is get you to a place where you’re able to be like, oh, these are all the ways that I like to spend money. I like to shop, I like to go out to eat, I like to travel. I also know that every once in a while, my car needs some work. I also love landscaping outside of my house.
We got to get you thinking about all the things that you love to do outside of just paying your bills. But because you think that the mark of adulthood is to pay your bills, you are not giving any attention to anything else. So you pay your bills and then you go and basically blow the rest of your money. You pay your bills, you blow the rest of the money. You’ve created this cycle for yourself because you don’t know your numbers. That’s it. You don’t know your numbers because with any one of these situations, even if there were $0 coming in, there’s a way for you not to be stressed. And it’s because you actually have a plan. And so like with my clients, I help them have an automatic buffer in their account. They have a month worth of expenses in their account.
And so when we first start together, they’re like, okay, what’s happening? And then they get this financial fairy godmother, which is me. And then they start to see, like I had a client the other day, she was like, Keina, I have $6,000 in my account right now. I’ve never had that much money in my account even when I was married and we had two incomes, nothing has happened for her besides the fact that we got really clear on how she wants to spend money, she’s paying bills, bills are paid, but she’s also spending money on a round of drinks for her friend. She’s going to concerts on the weekend. She’s also celebrating her birthday.
She has a clear picture of how she likes to spend money. And so she’s able to actually spend money drama free and we’ve been able to increase the amount of money that she has to spend and we’ve been able to increase the amount of money that she’s able to save by just helping her look at her numbers, get to know her numbers outside of just paying bills. So if you’re sitting there and you are like, dang, oh, I can’t afford to miss a payday. Like you have a problem, that’s not okay, I want you to be able to afford to miss a payday. I don’t want you to know when your paycheck hits your account. I want you to know. But it’s more so like a checkbox that it happened versus a, hey, I’ll buy that on next payday. We need to lose that language. If you’re in the government, I don’t want you being fearful of a government shutdown, like if you have a health situation, I want you to be comfortable being able to take time off work because your company payroll doesn’t dictate your feelings about your bank account. That’s the level of agency that I want you to have over your money.
So you are like, okay, Keina, so what am I supposed to do with it? Yes, I need you to stop outsourcing your financial security to your payday. That just has to be done with. And I want you to know that the real problem is that you are living paycheck to paycheck. It’s not the government shutdown. The real problem is that you’re paycheck to paycheck and you don’t have any savings and any one thing can throw you off. So what I need you to do first is I need you to create a budget and I need your budget to have all of your expenses. That’s not just mortgage. That’s not just rent. I need you to be thinking like, okay, there are home repairs I need to be paying attention to because those air filters are really expensive. I like to shop, let me give myself a clothing allowance. I want to be able to save for Christmas. Those are the things that I need you to put into your budget. But also in this budget is I need you to build in consistency with saving money.
I don’t want your saving money to be because I was able to save money when the world shut down or I’m able to save money when I don’t spend that much each month, like you are not really a saver. You save out of different circumstances. In order to be a real saver you put saving into your budget. And you also put spending into your budget. And so you’re able to be honest and realistic about both of those things. And so they don’t ever have to be in a fight. Your budget is in a fight or your money’s in a fight because you are like, oh dang, I was going to save $500, but then I saw these shoes and I had to buy the shoes.
Nah, your budget’s in a fight. It’s because in your budget you don’t have space for spending and you don’t have space for saving. I would rather you say, I’m going to commit to spending or saving $200 a month and I’m going to spend $300 a month. At least you’re being honest. And so those two things don’t have to be in a a fight. So you need your budget. But then after you have your budget, the thing that’s going to help you not be in the scared mode when life happens, maybe it’s a government shutdown and I’m praying that the government doesn’t shut down. I don’t want that to happen. But I want you to be prepared for anything that life can throw at you because you are an adult. We bought this membership, there are no refunds and anything can happen. And so I want you to actually know now that I have my budget, what are my essential expenses?
And so when I think about essential expenses, I think about what do you need to keep the lights on? Those are truly your bills. What are those bills that you want to make sure you’re paying for? You would need to pay your mortgage or your rent, need to pay your utilities. You would need to pay your car payment. You had some debt payments, you would need to pay those off because sometimes creditors will work with you, sometimes they won’t. But get really clear, what are my essential expenses? And so I want you to know your essential expenses because that’s what you would need in order to be able to cover your life for a month, in the event that you lost your job. If you needed to carry yourself through a government shutdown, if you needed to carry yourself through a leave of absence from work, that would be your essential number.
And then from there, I want you to build some goals around helping build your emergency fund. So let’s say your essential expenses are $3,000. The first thing that you can think about and generally I’ll answer this question really quick because sometimes people are like, Keina, how much should I save? I love to see people that save like 10% of their net income and then eventually I do like to get them to 10% of their gross income. And the gross is the one that’s bigger before the taxes. It has more letters and the net is the one that’s smaller after taxes, it has fewer letters. But I love to see people like if that can potentially be your starting point. Sometimes it’s not. If you’re like, hey, I bring in $5,000 a month, I would love to be able to save $500, but I can’t, start with four, start with three, start with 250 but make saving a priority.
So if you know that your essentials expenses are $3,000 a month, the first milestone that I want you to hit is to have a thousand dollars in your emergency fund. And this is just a rainy day in the event that any catastrophic thing happened and you need to cover your bills. Your emergency fund is not for you to go to Tahiti. That’s your travel fund, your drama free travel. These are not the same bucket of money. Then the next thing I want you to plan on, so maybe you already have a thousand, you’re like, yep, got it. I want you to plan to hit one paycheck saved. So if your paycheck is $2,500 because you make $5,000, then I want you to, so you go from a thousand dollars to 2,500 that’s saved in your emergency fund, then I want you to hit a month of expenses.
And so in the example where I’m telling you that $3,000 is the essential expense, well if you’ve already have like one of your paychecks in there and it’s $2,500, you only need another $500 to get to the $3000. And then I want you to have three months of essential expenses and then six months of essential expenses. For some people it may be wise for them to go all the way up to 12 months of essential expenses. That really is about like how long would it take you to replace your salary if you lost your job, or maybe you’re planning on maternity leave or something like that. So you would want to think thoughtfully through that in terms of why your goal is your goal. But at a basic level, three to six months of expenses is generally great.
Getting out of the paycheck to paycheck cycle, there are other pieces to it, but so much of fearing whether or not you’re getting paid or fearing a pending event in your life is because you don’t have money in the bank to support you. And so you need to know your essential expenses and then you need to actually build saving into your plan. And I want you to call it emergency fund savings. You can also build in travel savings, but I want those to be separate and then actually track and motivate yourself by the milestones. If you’re listening to me and you’re like, Keina, I already have a thousand dollars, great, let’s get to one paycheck. Now let’s get to a month of essential expenses. Let’s get to three months of essential expenses. And what you’re going to start to see is that you have this compound effect. Saving is going to be something that you do. And if any one of these events happen to you, you’ll be able to have the emotional capacity to ask yourself like what else do I need in order to move through this situation? And you won’t just be in fear of money.
I hope you made it all the way to the end of this episode. And like I said, I was apologizing if you felt uncomfortable, but you can do this and I want to help you do this. So if you’re at a place where you’re like, Keina, if one of these things happened to me, I would be like, maybe you are the government person and this government shut down I’ve been in DC, I remember one that happened and it lasted for a couple of months. People were really stressed. I did a couple of free consults for people that were worried about whether or not they would be able to pay their rent. But don’t wait until you’re totally uncomfortable and your back is against the wall. Let it be from the discomfort in this podcast episode where you’re like, dang, I don’t know if I could deal with that. Let that be your prompt right now to actually come and work with me.
I’m going to help you not only have your emergency fund and know your essential expenses, but I’m going to help you create this drama free plan. I’m going to help you have money where you have a drama-free account and you can spend it. Your drama-free account can help you save money. Your drama free account can help you travel, your drama-free account can help you pay off debt, whatever it is. But I want you to have a financial life that has a lack of drama. You have too much drama in your life already, whether it be with your boss, one of your girlfriends, whatever that is, you have too much drama already. I want you to be able to focus on the things that actually matter in life and to put your finances in a drama free mode. So if that’s you, go ahead and go to my show notes. You can apply to work with me there or you can go to my website@wealthovernow.com/appointment. And if you enjoyed this episode, share and tag me on Instagram. I love to get to know you guys and you’re my people even if we’ve never met. So have a great Tuesday or whatever day you’re listening to this and I’ll talk to you later. Bye.
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.
