S3, E11: Stories from the Other Side with Sarah K Charles
Mar 20, 2024
Join Erica Bennett on The Crazy Ex-Wives Club as she invites financial advisor Sarah K. Charles to share her transformational journey from post-divorce financial ruin to financial empowerment. Dive into a frank conversation about the realities of money management, the emotional hurdles of debt, and the power of rewriting one's money story.
Erica and Sarah unpack actionable strategies for budgeting, savings, and managing credit card debt and offer a fresh perspective on achieving financial independence. Whether you're navigating the choppy waters of divorce or seeking to strengthen your relationship with money, this episode is a beacon of hope filled with practical advice.
Tune in for an enlightening session that promises to reshape your financial mindset and put you on the path to true fiscal freedom and empowerment.
Learn More About This Week’s Guest: Sarah K Charles
Sarah is a champion of women’s financial empowerment and an advocate for increasing women’s confidence when it comes to investing. Sarah spent over two decades at top advisory firms advising clients and advancing innovative approaches to client service before launching Sanctuary with her husband Jim in 2023.
Sarah is committed to shining a spotlight on hourly planning in order to democratize the planning process and increase access to independent objective financial advice. She is a passionate storyteller known for connecting authentically with stakeholders, a mission-driven thought leader on developing female leaders, and a Swiftie.
If you would like Sarah's journal for money mindset, message her directly and she will send it over. 💕
Stories from the Other Side with Sarah K. Charles FULL TRANSCRIPTS
Erica Bennett [00:00:00]:
On today's episode, we have another amazing Stories from the Other Side. We have a real-life story of divorce and triumph, and all tied up in that wonderful topic of money. How do we come out on the other side and rewire our money beliefs while also rewiring our heart? Super excited to have today's guest on let's get started.
Erica Bennett [00:00:28]:
Welcome to The Crazy Ex Wife's Club, a podcast dedicated to helping women navigate the emotional journey that is divorce. I'm your host, Erica.
Erica Bennett [00:00:37]:
And if you're trying to figure out life after the big D, welcome to the club. Whether you're contemplating divorce or dealing with the aftermath or any of the many phases in between, the club has got you covered. Each week, you'll hear stories from women who have been in your shoes. This isn't about spilling tea on divorce details. This is about giving you the tools to take control of your own healing journey. Listen in weekly for advice, tips, and tools to help you move through each stage of the process.
Erica Bennett [00:01:08]:
Hello. Welcome to another episode of The Crazy Ex Wives Club. I'm your host, Erica, and today is a Stories from the Other Side. My guest, Sarah Charles, is a financial advisor at Sanctuary Financial Planning. But it wasn't always like this. I invited Sarah on to talk about her divorce transformation story because it 100% rewrote everything she had lived prior into becoming who she is now and really set her up for wonderful learning, growth, success, of all those pieces. So welcome, Sarah. Thank you for joining us.
Sarah K Charles [00:01:44]:
Thank you for having me, Erica. I am delighted to be here.
Erica Bennett [00:01:48]:
Yeah. I know we had known originally, we were talking, it's like, oh, wonderful to connect with another financial planner, right? I'm always looking to learn more and to network more, but as we started talking, you were like, oh, wait a second. We need to talk about my divorce story and kind of how I got to where I'm at. Tell our listeners, because it really is probably one of my favorite stories.
Sarah K Charles [00:02:13]:
Oh, wow. Okay. Well, my divorce is the reason I am where I am today and why I do what I do. Let’s rewind to 1997, and I have just graduated college. I've moved back home to New York City. I'm 20-stupid years old and living the good life with my best friend. We are out to dinner, out to drinks. I shop Erica, like it's my job.
Sarah K Charles [00:02:43]:
And I'm doing all of this on a starter salary of $30,000 a year. So pretty quickly, I find myself in debt. And, hey, I don't care. I'm having a great time. About a year into this, I meet a man who's older than me and established. He certainly has more money than I do. And more importantly, he likes to spoil me. He wants to take care of me, and I am like great.
Sarah K Charles [00:03:13]:
I do not need to be fiscally responsible, because I have found a financial white knight. As a result, I ignore all the advice that I receive from my parents. When I tell my mom that, well, my ex and I, I was going to give him a name, we'll just call him my ex. When I tell my mom that we're moving in together, she looks me in the eye and she says, Sarah, always keep some money for yourself. A woman should always have her own money. And I look at her, and I smile, and I nod, and I'm like, okay, mom. And meanwhile, I'm thinking what money. I don't have any money.
Sarah K Charles [00:03:51]:
I have a closet full of expensive shoes and a bunch of credit card debt. When we got engaged, my dad comes to me, and he gives me a book called prenups are for lovers. That is the actual title of the book.
Erica Bennett [00:04:06]:
Did you ever actually read it? I was listening, and I was wondering. I was like, is this a good book? Should we be reading this book?
Sarah K Charles [00:04:11]:
We probably should be reading it. I didn't read. You know, my dad is telling me, Sarah, protect what you have. And I'm thinking, but what do I have? I have nothing. And here's this man who is, again, older, established. I just kind of laughed it off. I didn't pay attention to anything that I signed. Tax returns, mortgage applications, credit card applications.
Sarah K Charles [00:04:36]:
You just tell me where to sign, and I will sign. And ultimately, I made a pretty significant mistake. I went to consolidate my debt and wound up signing up for debt insurance, which essentially means I was paying extra to protect myself against my inability to pay at some point in the future. A year into trying to pay down my debt, and holy hell, I owe more than I started with, right? And at that point, it became pretty clear to anyone who was paying attention that I was no good with money. My ex took over everything. He just took over our entire financial life, and I was so happy to let him do it. By the same token, money then becomes a weapon. It becomes a tool.
Sarah K Charles [00:05:31]:
It becomes something that you can use to control the other person. And we did not have a healthy relationship around money. We certainly didn't talk about it. We didn't share financial responsibility. We didn't have a shared sense of financial purpose. And all of this comes back to bite me in the ass a decade or so later when we're getting divorced. And at this point, we were living in North Carolina. North Carolina requires you to live separate and apart for a year.
Sarah K Charles [00:06:04]:
We had moved out. We weren't living together, but we hadn't disentangled financially yet. And one day I was working from home, and I get an email from Citibank saying, we've missed some payments on a line of credit. And as a result, I'm being reported to the credit bureau. So, first of all, I was being reported to the credit bureau because this particular account at Citibank was in my name, my name only, and yet he paid all the bills. Now, this is where I like to chime in and say it was a complete oversight. There was no mal intent on his part. Your listeners understand if they'd gone through a divorce, they could see it in your face. It's a stressful time.
Sarah K Charles [00:06:44]:
You get distracted. But nonetheless, that really unnerved me in a way. Know, probably isn't normal for most people. I don't know. I'm sure if people are like, oh, yeah, ding on my credit score, no big deal. But I was like, oh, my God, this is the beginning of total financial ruin. But really, what it was, Erica, it was this giant slap in the face, and it's like, holy hell. How did I get here? I'm 33 years old.
Sarah K Charles [00:07:12]:
I have no money. Literally, I have no money. I have no clue, and I have no one to blame but myself. And this is the moment that I have this transformation and I start to write a new money story. And so that was about 15 years ago, and today I'm a financial advisor for a living. I advise people on how to invest and manage their money and help them plan financially. And really beyond that, I help people eliminate their money shame. And really develop financial confidence.
Sarah K Charles [00:07:48]:
I have a very healthy relationship with money. My new husband and I have a healthy relationship with money, one that's grounded in open communication and trust. But it was a journey to get to where I am. But it all goes back to how I started.
Erica Bennett [00:08:06]:
And I think it's such a common story. I was in college. I did the west coast. You went east to spend your money. I went west to spend my money. But college student sitting there, what are they doing - giving away credit cards at lunch? Signing up for my credit cards, and it's California. It was expensive. So school was cheap.
Erica Bennett [00:08:24]:
School was incredibly cheap back in the day, right? I think it was a semester, and I was like, this is fantastic. And then rent was $1,000 a month. I was filling up these credit cards. I had gotten into a car club. I was buying car parts and cars and shipping them in from Texas. Right. And I'm all of a sudden like, oh, I got three credit cards. They're all maxed out.
Erica Bennett [00:08:49]:
I'm using one to pay for the next one. And what do I really want? Somebody to come in and save me. Right.
Sarah K Charles [00:08:55]:
Yeah.
Erica Bennett [00:08:55]:
I think we all hope that we can just turn it over to somebody else who has the money mindset flowing, that we can just have that sense of security. I'll even say from leaving a corporate w2 paycheck job to launching my own business where it's consulting and it changes. Right. That sense of security is completely different. I think it makes a lot of sense that you're like, oh, this person. This person can bring that sense of security, but there's the other side of that, which is the sense of control.
Sarah K Charles [00:09:27]:
Yeah. I don't know why, but I never had a big desire to take care of myself when I was younger. And if I think about my life in third, I always feel like the first third of my life was about dependence on other people, going back to childhood and my parents taking care of me. But then my first marriage was just an extension of that. I wanted somebody to take care of me. And it wasn't until we got divorced that I got to focus on the second 3rd, which was the idea of independence. And what does it mean to take care of myself? And what's that balance between being able to take care of myself, knowing when to ask for help, but really getting my arms around that. And that's what set me up for the third 3rd, which is the idea of true partnership, which is what I enjoy with my now husband.
Sarah K Charles [00:10:22]:
But, gosh, I mean, I'm 48 years old. It was a lot of work to get to where I am.
Erica Bennett [00:10:29]:
Right. And it's also a good reminder that it's never too late to start.
Sarah K Charles [00:10:33]:
Oh, my gosh.
Erica Bennett [00:10:34]:
Divorce was a big restart. I was 35 when mine was final, and I had that same. I'm like, holy shit, how do I ever get this started again? How do I get back on track? Right. Everybody else has got two salaries. Everybody else has a big house. Everybody else… Right. And I'm behind this mindset that I'm behind, and I have to catch up.
Erica Bennett [00:10:54]:
And it's lacking. It's not about lacking. It's about different priorities.
Sarah K Charles [00:10:58]:
Yeah.
Erica Bennett [00:11:02]:
Are you at a crossroads contemplating whether to stay or go in your marriage. It's okay to feel lost, to feel scared and even uncertain. Hey guys, this is Erica. And I get it. I felt the same way. I was afraid to make the wrong choice. But I also knew that I wanted more. I want to invite you to join The Crazy Ex-Wives Club Cohort.
Erica Bennett [00:11:23]:
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Sarah K Charles [00:11:58]:
I remember being in the Miami airport. I had been down there for a girl’s weekend with one of my best friends from high school, and I had just gotten paid. And I remember looking at my spreadsheet, I used to track everything. And by the time I paid all the bills I was responsible for, I was going to have $200 left to get me through the next two weeks. And I remember how terrifying that was and thinking, how am I ever going to emerge from this? How am I ever going to get back to a place where I feel financially in control and financially solid?
Erica Bennett [00:12:39]:
I think that's the danger of credit cards. I too had to learn how to control what my spending was. My debt spending, right. The money I didn't really have. And then once I got to a place of no longer carrying credit card debt, how gross credit card debt feels. Right now I have actually been tasking myself to not use a card at all and to use cash and to set allotment each week, only because I was curious to understand where was it all going? I was still paying it off every month. It still was fine. But I was like, gosh, it just keeps getting bigger.
Erica Bennett [00:13:16]:
Where is this money going? Because it's so easy to swipe and be completely unaware or to do the impulse purchase, which, you know, when you're going through divorce, sometimes you just shop for yourself, which is not always the right answer, but it feels good in the moment. I'm a serial returner. I really am. I buy it and then I let it sit for like a week, and then I look at it again and I'm like, oh, this can go back.
Sarah K Charles [00:13:39]:
I think that's helping. I mean, at least you take it back. You don't just let it pile up in a closet and then twelve months later, you're like, where did all this stuff come from?
Erica Bennett [00:13:49]:
I think there's probably a little of both as I'm, like, looking around at all the stuff. I live in a townhouse. We have outgrown the townhouse. And I'm like, why did we used to fit? And I'm like, well, Erica, you had a lot less crystals and stuff that you've accumulated.
Sarah K Charles [00:14:03]:
And you know what? I get it because I like stuff. I like stuff. I actually enjoy shopping. Part of it is just, again, having a budget, understanding what you need, and finding that intersection of not everything has to be about what you need or what's going to give you some financial return. There is what's going to bring you joy, what's going to give you an emotional return on what you spend and just striking a balance.
Erica Bennett [00:14:34]:
Yeah. And finding for me, I just set amounts. If I used to get a bonus or something like that, I knew what dollar amount I could use, just for fun and what dollar amount was going into this account or that account. And that helped me. The irony is that prior to going to college, I was really good with money because I liked money. I had a whole system. At like 18, I was bartending, right? Small town, Wisconsin, pizza shop, whatever. But I knew that every time I reached $100 in cash tips, 20 went into fun, 80 went into the bank, and it just rolled right. And I had all these systems in place.
Erica Bennett [00:15:11]:
But then you get a little older and literally credit card comes into it, and you get to live beyond your means. Let's talk a little bit about when you had that moment. Okay, so the email comes in, you missed a payment because for other divorced women out there, money is a big worry. And they're sitting in that same place of like, shoot, how am I going to start managing my money or how am I going to pay these bills? What did you do? Do you remember what some of those first initial steps were?
Sarah K Charles [00:15:45]:
One of the first things I did was I had to get my arms around what we had. As I said, I had been sitting on the sidelines. It wasn't like I was totally in the dark, but I just wasn't very engaged. I had to figure out, okay, how many credit cards do we have? Whose name are they in? What balances do we potentially owe? What kind of bank accounts do we have? The first thing I did was take an inventory, and then the second thing I did was go down to the bank and open up my own checking account and my own savings account and essentially established a home base for my new financial life.
Erica Bennett [00:16:26]:
Yeah. And I think whether you are in partnership or contemplating divorce or in the process of divorce. Right. It's so important to understand all the places the money is because it's interesting how it's like one at a time, another one gets added. Like, I was surprised when I went through and put my paperwork together. I was like, oh, I didn't even realize there was money sitting in all of these different places. Which is why your other tip of create one home base is so crucial to where you're starting. It doesn't mean, like, I'm not going to leave my money sitting in a low interest savings account.
Erica Bennett [00:17:00]:
I'm going to move that to a high interest savings account. But I have one starting place where all the money pours into so that I know. And then there's this savings account and then there's this investment account, and it's like, how many wallets can you manage? So having that first place to start at is so important.
Sarah K Charles [00:17:18]:
Well, yeah. And simplicity is helpful at a time when there's a lot of noise and there's so much distraction and so much competing for your attention. Anything you can do to simplify until you're through the worst of it. My big surprise when we started gathering all of our paperwork was there was a significant balance on a credit card that I knew nothing about. That had been a credit card in his name that he used to pay for our lifestyle. And I just never occurred to me to ask, how can we afford these things? Hopefully you're surprised to the upside, right? Like, oh, hey, there's this investment account, or there's extra money in the bank I didn't know about.
Erica Bennett [00:18:08]:
But I found a pension account that I thought was a joke and it was real, and I was like, I won the lottery. Right. But that's not typical.
Sarah K Charles [00:18:17]:
No, but I mean, be prepared for surprises in either direction.
Erica Bennett [00:18:22]:
Yes. Because I had the same experience. We never opened a joint checking account. We were both working. We both already had all our accounts established. We said, hey, great, we'll just divide and conquer, right? If my salary makes a little bit more than yours, I cover some of the bigger bills. I'm covering more of the bills now. You're saving for retirement is what we had set up.
Erica Bennett [00:18:43]:
I was not putting a max amount in my retirement. I was putting the minimum amount that the company matched, and he was supposed to be doing the max. Turns out he had taken out a loan on the 401K that he had because that's what he was using when he was out just living life. He was trying to find his happy, too. And so different choices because you got two people are in it. So being able to have those conversations, and I find it so important, and it's a hard conversation to sit down with your partner and be like, we need to bring all the accounts to the table and lay them out. And now we really need to have a big conversation around, how much debt are you carrying? And I'm carrying and what's the plan? How much risk are you comfortable with? How much risk am I comfortable with? Each person is going to be different.
Sarah K Charles [00:19:30]:
Yeah. We actually created, when we launched, my husband and I launched this planning practice, sanctuary financial planning, this past summer, and we actually created a planning package called yours mine ours, geared towards couples to really help facilitate the development of financial intimacy and eliminating those financial frictions.
Erica Bennett [00:19:53]:
I love that. Because that's something. I had no idea. Right?
Sarah K Charles [00:19:57]:
I had no idea.
Erica Bennett [00:19:59]:
You're like, hey, we're married now. It's one big pot. We're both making the same choices to benefit the US in the middle, and that's the same even in the divorce. Why the divorce? Why the marriage didn't work, I thought, we're both making the same decisions for us, but we weren't. It's that clear communication.
Sarah K Charles [00:20:17]:
I go back to the advice my mom gave me early on, and if I could go back and do anything different in my life, I feel like heeding that advice would be top of the list. Because if I had preserved any semblance of financial independence, not because I didn't believe my marriage wouldn't last, but because I wanted to prioritize myself and my own well-being and because I wanted the independence. But again, as I said, I was very happy to be taken care of in all ways, shapes, and forms when I was much younger, and so I just turned it over to this other person.
Erica Bennett [00:20:59]:
I think the other thing to acknowledge is that if you're stuck in a place where it feels like you're never going to get to the other side, that you have zero idea or very limited idea about where the money's going or what's happening, or maybe, you know, but you're like, oh, my God, the credit card debt keeps going up every month. It's about taking steps, making choices every single month, because you can dig yourself out. I mean, it took me years to dig myself out. I think my credit card debt was like 35,000 because each one was, right, about ten grand. Twelve grand. Something like that is about all they give you on each card in college. But I had three and California.
Erica Bennett [00:21:37]:
Bay area before the break. Bay area before the break. It was not cheap. We had to have a roommate once we were a couple in a teeny, tiny little two-bedroom townhouse because we couldn't afford anything else. I think that rent was $2,500 for a two-bedroom townhouse. But once it starts snowballing, it starts moving quickly. A super old method, but tried and true.
Erica Bennett [00:22:05]:
I took that smallest bill and I put as much as I could on that one to pay it off fast, and now moved that payment, plus the minimum of the other one onto the next lowest one instead of trying to. Where I started was dividing it equally across all three. Still paying interest across all three. It was like, get to the lowest interest, but then pay off one and roll it over. And roll it over. And that eventually became fun. If you're sitting in that place where you're like, I don't know how to climb out of this.
Erica Bennett [00:22:33]:
It's literally by maybe making 20 extra dollars a month on one credit card payment.
Sarah K Charles [00:22:38]:
Yeah. Anything that will allow you to see progress. The two common methods for paying down debt are what you said, which is start with the smallest balance, but knock it out. So that, again, you have that sense of accomplishment, and then you can double down on another balance or go for your highest interest balance first and just minimize the total amount of interest. The end of the day, as long as you have a plan and you're committed to it, and then you're willing to potentially accelerate it as resources become more available to you. But, yeah, it's such a good feeling when it's gone, isn't it?
Erica Bennett [00:23:19]:
Right? Or the other one. That was really delightful. And now it's not been true for a lot of years, but when I paid off my car. So I had some used cars, then I fell into the trap of how cheap a lease is versus buying the car, which was fine, actually. It worked for me for a lot of years. I wasn't going over on mileage, right. I had leased a brand-new Honda in college, and I felt amazing, right? I got a brand-new car, even though it's a little tiny, like, four-cylinder Honda Civic. You've got the pedal to the floor, and it doesn't go anywhere.
Erica Bennett [00:23:53]:
But it sounds like it is. But it's a brand-new car and had that car payment. Rolled that over to another car payment, rolled that over to another car payment. And that was actually one of the, like, I can celebrate the ex-husband, he had always paid his cars off. And I was like, this is so stupid. It doesn't matter. I'm just renting the car. A lease is renting a car.
Erica Bennett [00:24:13]:
Until I paid off that first car, and all of a sudden, I had this extra $500 a month, and all of a sudden, I was like, wow, I just rolled that straight into savings. And I'm like, I'm saving $500 a month. Look how fast this thing is going. You have to make the choices that are right in the moment. I went back and leased a couple more times afterwards because the payment plan was better than buying something and I didn't plan on keeping the car. But I really look forward to the day when my current car, which is going to be paid off. Right. And I'm like, that payment comes back to me, it's going to feel so good.
Sarah K Charles [00:24:47]:
Yeah. There's so much you can do with that money. I remember how excited I got. Very similar as I started chunking away at some of the debt paid off the car, and then it's like, okay, well, I can really amp up how much I'm putting into my emergency savings fund. I can increase how much I'm contributing to my four hundred and one k. I remember the first year I maxed out my 401K. It felt so empowering. And I was like, wow.
Sarah K Charles [00:25:13]:
I waited a long time to enjoy this feeling. I sort of wish I would have started sooner because it feels really good.
Erica Bennett [00:25:23]:
Yeah. And that's the thing. Gradually, then suddenly, right? We've talked about this before. A relationship falls apart gradually, then suddenly. Well, your money builds gradually, then suddenly everything is incremental.
Sarah K Charles [00:25:35]:
There's no question.
Erica Bennett [00:25:36]:
Okay. You just drop a little bit in and all of a sudden, you're looking at it and you're like, wow, that's like a valid number in my savings account now. And it got there a little bit at a time. And then you got to love the high interest savings accounts right now, because when I see my little monthly interest, I'm like, that's free money. My money is making me money.
Sarah K Charles [00:25:54]:
Yes, it is.
Erica Bennett [00:25:55]:
Super fun times, right? You can all get there. And money is just so emotional. It's just we all have relationships with money that are different and how we want to spend it. I think one of the other things that I really had to look at was my impulse purchases. I've already confessed I am a serial returner. But what I also learned about myself is if I just stayed out of the dang store, I didn't need any of the things I was buying anyways. Shifting from, oh, I'm just bored. I'm going to go walk around target to, I'm going to go walk around the park or I'm going to go somewhere else, because I just know myself that if it's a good deal,
Erica Bennett [00:26:31]:
And, ooh, it's cute. And I just have always really wanted this. It kind of gets me every time. And I know that either I can, yes, rework that mindset or I can create some safety behaviors to not put me in that position. When I'm ready to go shopping, I want to have a budget to go shopping with. I don't want to be stressed about it. I had to change that behavior myself to just be like, stay out of it, because, you know, if you're going to walk around, you're going to spend $50 or $100.
Sarah K Charles [00:26:57]:
I think it's so important for us to be willing to look in the rear-view mirror at our past. I talk a lot about money story, which is the narrative we all have in our heads around money. And it comes from our unconscious. It comes from how we grew up, it comes from our parents, our teachers, our social settings. And we all have a personal narrative and belief system around money. And I have found when you're willing to look at your money story and understand it, it can help explain your behaviors today. And then it really gives you the tools you need to say, okay, which behaviors aren't serving me well, and how do I change those behaviors so that I can be on the path to long term financial health and well-being?
Erica Bennett [00:27:49]:
Yeah, I definitely have a childhood money story of having to shop on value. Right. We were a single income family with three kids, and I never felt stressed for money. I got McDonald's after school, and I got new clothes every year for school. Right. And all that kind of stuff. But there definitely was the mindset, know, it's got to be a good value before you put your money into it, which meant that every time something was on sale at a good value, like, I remember in college at Walmart, and I saw like, a crock pot kind of a thing, or like a dehydrator, like a large kitchen appliance. I lived in a tiny studio apartment.
Erica Bennett [00:28:32]:
My kitchen literally was as big as my refrigerator door. It had a refrigerator and the little, tiny stove next to it. And that was it. But it was, oh, my gosh, this is only $40. I need to buy this. And I brought it home and it sat in my closet, and I never opened it up, but it was a value. And that still, sometimes when I'm not doing the work to allow my money to flow and I'm feeling some fear around money, that is the one mindset and behavior that pops up again, I better hold on to it because I can't rebuy it again, or I better buy this because it's on sale right now, because when I'm going to need it in a month, what if I don't have the money to buy it? And I think those fears, right? Being scared of money and our fears around money stop us from making some smarter decisions or stop us from being able to move forward.
Sarah K Charles [00:29:21]:
Oh, no question. And I would add in that we carry a lot of shame. We carry a lot of shame about the bad choices we've made or the things we haven't done. One of the reasons I'm so candid about the money mistakes I've made, and believe me, I feel like I've made most of them, is because I want other people, especially women, to know you are not abnormal, you are not alone. I feel like this is a very normal part of human existence. And I think it's a combination of the fact that one we're not taught about money. In school, I learned how to dissect a frog. I never learned how to put together a budget.
Sarah K Charles [00:30:02]:
But money is so taboo, we don't talk about it. There's a lot of shame. And we have a lot of shame either around again, the bad choices we've made or the things we have failed to take action on, like, oh, gosh, I really meant to start contributing to my 401K, but then I forgot. Or, oh, gosh, I really need to build up my emergency savings fund. But hey, it's the holidays, and now I need to buy gifts for 18 people at work and in my family. So, understanding that it's never too late and really coming at it from a growth mindset with the idea that you can make changes to your behavior, yeah.
Erica Bennett [00:30:44]:
Let’s give them some things. I did a lot of work. I mean, I had some foundations. I understood the smart saving, the whatever else, but let's give them some mindset, fear-based, rewiring things partnered with some logical steps that they should start. Like rewiring my fear based one. When I feel stressed about money, I can feel the same fear, the tightness in my chest. And then what I know is that I need to do some deep breathing. And I love my go to is always the karate chop.
Erica Bennett [00:31:14]:
My right hand is open into a flat palm and my left hand is tapping that pinky side and the side of your hand, just like you're doing a karate chop. Chopping that to relieve the anxiety. Breathing. You know what? I'm safe right now. The bills are paid. I'm going to figure this out. It's going to be okay. There are things that I can return or there are different choices I can make.
Erica Bennett [00:31:38]:
When that big fear washes over you about money, that is an easy start. Doing it now. And all that's going to do is relieve the anxiety. Get your nervous system back on track because we can't think, and we can't action appropriately when our nervous system has taken over. So breathing, tapping, calming yourself down. Don't use fake mantras. Use as positive of a statement as feels logical for you.
Erica Bennett [00:32:04]:
It's shit right now, but it's going to get better. It's not always going to feel this way. I've got people I can rely on if I really need help. There are options for me out there, right? Don't jump into. I'm going to manifest $50,000. This is not going to work. Use a realistic statement. Right.
Erica Bennett [00:32:20]:
Once they get calm, what's one of the first things they should look at doing?
Sarah K Charles [00:32:25]:
It's interesting that your description of your process, because there's a complement to that, which is to write it down, right. Whether you keep a journal or a notebook or your phone but write down the thing that triggers the reaction. Write down the physical reaction you're feeling whether it's nausea or sweaty palms. And then look at the old money story. What are you telling yourself? And then give yourself permission to reframe it in a new money story. And what can you tell yourself about the decision you're making? And that's one exercise I actually really recommend to help people work through some of those triggering events.
Erica Bennett [00:33:12]:
I love that. I love that. You guys, big fan of journaling. Get the journal out. Write it down. Random factoid of the day. It's different to type it. Typing it doesn't commit it to memory as much as actually pen to paper in writing.
Erica Bennett [00:33:25]:
And I know that it's because I can unconsciously type, and the fingers are flying, and things are going. But if I have to write, I actually have to slow my mind down. I have to be present and focus on the words that I'm spelling. Write it out, not just type it out. What else? What else should they start doing?
Sarah K Charles [00:33:43]:
Well, I think taking an inventory of what you have, understanding what's in your name, what's in your partner's name, what is in joint titled understanding credit cards, balances, understanding bank accounts, investment accounts. It feels like a lot, and there is some work that goes into putting together an inventory. But once you have an inventory, it puts you in a position of more control because you understand the landscape.
Erica Bennett [00:34:18]:
Yeah. I think the other one to get clear on is understanding what does your monthly spending look like.
Sarah K Charles [00:34:25]:
Budget.
Erica Bennett [00:34:26]:
What was my mortgage amount? If I know how much I have in credit card debt and how much is out there already, I need to also understand, how much do I need? What's my car payment? What's my mortgage, right. What's my utilities or cell phone or whatever else? And then what's my spending, my credit card spending? And which ones of those can you shift some behaviors to change?
Sarah K Charles [00:34:47]:
One of my favorite approaches to budgeting is the 50 30 20 rule. The thought is you look at your take home pay, your after-tax take home pay, and 50% of that is earmarked for essentials, mortgage or rent, car payment, any minimum balances due on credit cards or student loans, groceries, utilities, the bare essentials, what you need to get by. You need to earmark 50% of your take home pay for that. 30% is earmarked for the fun stuff, the discretionary spending, getting highlights in your hair, getting a manicure, going out to eat, taking a vacation, going to see a football game, whatever it is, the stuff that you enjoy doing and makes you feel good.
Erica Bennett [00:35:36]:
I'm laughing because I will tell you that my hair is not a discretionary fund. I mean, after 20 years of working in the beauty industry, I was like, that's non-negotiable. Could I absolutely go to a haircut? Less expensive? Yes. Will I? No. I will skip Starbucks for a month instead.
Sarah K Charles [00:35:56]:
You know that that's important to you. And by the way, I'm the same way. I get my hair colored every four weeks because I have grays. However, if I had to, I could walk myself down to the drugstore, buy a bottle of color and could start doing it myself for a fraction of the cost. Everything becomes about choices. So 50 30 20. 50% on your essentials, 30% on the fun. Nice to have and then 20% for savings, because I hear time and time again, so many people say, well, gosh, I just don't have any money left over to save.
Sarah K Charles [00:36:30]:
And you have got to make that part of your budget.
Erica Bennett [00:36:35]:
In fact, I think of my savings as another bill I have to pay. In college, I started at $20 because that's all I could automatically transfer over. And each year, I'm like, or when my checking account becomes stable at the new amount, then I increase it again. Now it's at 50. Right? Or now it's at 100. But my savings is a bill that gets paid just like all the other bills so that I can avoid carrying credit card debt.
Sarah K Charles [00:36:59]:
If that's the last thing you take care of in your budget, it's easy to essentially not address it. I would say make that the first thing you do each month. Right. Whatever your take home pay is, figure out 20% and have that money automatically go to a savings account. As you pointed out, right now, we're in an environment where you can set up a high yield savings account, and you can earn upwards of 4% on your money. And that's your emergency fund. That's your freedom. That is your financial freedom and flexibility at some point in the future.
Erica Bennett [00:37:33]:
Yeah. And if you're looking at it and you calculate your 20% right now, and you're like, I can't do that. Just start somewhere. Because again, I started with a small amount, and then as I realized, wow, my checking account, we're staying at about the same balance. Once all the bills are paid and everything goes out, I'm at the same balance. Can I move over a little bit more? I can. And then you adjust. Right? And, oh, okay.
Erica Bennett [00:37:56]:
I'm not feeling any tightness around money. Okay. This is a new normal, and I can adjust. And I would say one of the really easy ways, especially as food costs are so expensive right now, is I know if I go grocery shopping three times a week, that I pick up more impulse. Ooh, the raspberries look really good, and raspberries are really healthy for me. And I can get those right now. Versus the gift of COVID. During COVID when we had to actually meal plan out for the week and you could only go to the grocery store once.
Erica Bennett [00:38:25]:
Remember, you went through the grocery store only touching everything with one hand. So I'd have my phone list in one hand, and the other hand was, like, the cart and touching things in the store, and could you get out and all of a sudden I was like, $200 a week, maybe, on groceries. And we had home cooked meals three times a day. And I was like, what is going on? I was like, oh, you're not buying $10 raspberries three times a week. Because they looked so yummy.
Sarah K Charles [00:38:55]:
For us, we stopped going out. One of the defaults is like, oh, God, there's no food in the house or there's nothing we want to eat. Let's go out. And it doesn't have to be an expensive dinner, but even if you do fast casual, probably going to run you $20 a person, and that starts to add up, right?
Erica Bennett [00:39:14]:
I was in the same boat, especially after my divorce, right? I work all day. I pick up my son. My son at that point is like four and five, right? He's young, he's full of energy. He's not self-entertained yet. We'd go out to eat because I just was too exhausted to have one more thing to do. And a couple of years into it, I looked at him and I was like, you know what? Why are we wasting our money on going out to eat when we're exhausted? Why don't we go out to eat when we're excited? Why don't we go out to eat when we're in a good mood and save the ”we're exhausted” for quick meals at home. But it took a few years to make that shift.
Erica Bennett [00:39:49]:
But look at, it's those reoccurring charges. How are you spending your money on food? You need to eat. I'm not saying don't eat. I'm saying how much waste. How much food waste is going out the door? How much eating out is going out the door? Can you shift just a little bit of those? I invested in an espresso machine for my house. It's like, I don't know, $150 or something. It wasn't crazy, but it's really delightful. And I don't go buy a $7 late four times a week anymore.
Erica Bennett [00:40:19]:
Paid for itself really fast. Do I still get Starbucks? Heck, yes. But now it's like, do I want it? Do I want to put my money in this? Because I have a different choice. I have a different choice of a great, delightful coffee I make at my house, or do I just need my little Starbuck’s mermaid on the cup? Because I just need a little extra today? But they're all choices, and they were made little by little to get to a place that then felt stable.
Sarah K Charles [00:40:45]:
Well, and again, I can't emphasize enough once you start to see a little bit of progress and success. It feels so good, and it becomes motivation to take it even further. I did not have an emergency savings fund when I separated from my ex. I had nothing. I remember creating a budget, and I was putting money in, so I started saving in my 401K again, nominally, but I started saving. That felt good. I started putting money in a savings account, and then I kept another bucket for things I wanted to buy. One of the first things I remember I wanted to buy was an iPad.
Sarah K Charles [00:41:29]:
And it took me several weeks to save the money from my paycheck to get enough so that I could go out and buy an iPad. And at the time, it was like, this feels pretty good. Taking care of myself is actually a whole lot better than I could have anticipated. It's little things like buying yourself an espresso machine, buying an iPad. But when you have ownership and it's your choice and your resources and your efforts, that feels really good. Like, really good.
Erica Bennett [00:42:07]:
Right? And again, you guys, what a beautiful story of complete shopaholic debt, living life for the moment to being in a place where you now help empower other women to invest wisely and to own their money story, because that's the biggest piece. We avoid it because we don't want to own it. But once you start getting into it, it can be really fun. I think you have an offer for the listeners, don't you?
Sarah K Charles [00:42:35]:
I do. I have a money story workbook. We're putting the finishing touches on it. It will be ready very shortly. And it's a workbook to just help women work through their money story. We start by asking the question, what was money like growing up? And just take you through a series of exercises to start identifying that personal narrative so you can understand how it informs and influences your behaviors today.
Erica Bennett [00:43:05]:
I love that. If you're sitting in a place where you're worried about money, this is the perfect first step. First step is you got to look at what you think about it and how what you think about it drives what you do. Right. The see do get paradigm. How you see something drives what you do, which creates the results that you get. To get long lasting differences, you got to see it differently. I love that. We'll have all the details for you guys to be able to get your hands on that.
Erica Bennett [00:43:31]:
They're in the show description. They're also on the crazyxwivesclub.com under episodes, where you can read the full transcripts from today's episode. And I have all of Sarah's info tagged in there as well so that you can track her down, give her a follow, and continue to learn from her wisdom, from all of the experience she has gleaned through her money mistakes transformed into huge success stories. Thank you Sarah, so much for joining us. You guys, as always, go to the www.crazyexwivesclub.com if you're looking for more support. The group coaching program is always open and here to help you, so you definitely do not have to navigate all of the crazy healings of divorce alone. Thanks for listening. Until next week, give yourself grace.
Erica Bennett [00:44:20]:
Take a little extra time to invest in yourself.
Erica Bennett [00:44:25]:
And that's it. Another great episode of The Crazy Ex-Wives Club, a podcast for women learning how to heal from their divorce. Tune in next week for more advice and tips to help you figure out life after divorce. And until then, give yourself grace. Do the best you can and know that this is all part of the process.
