288 | Ask Hilary: Late Starts, Establishing Financial Space, and Responsibly Supporting Others

[INTRODUCTION]

[00:00:34] Hilary Hendershott: Welcome to Love, your Money^®, where we’re flipping the script on traditional financial advice. This is an Ask Hilary episode where I answer your real questions about investing, tax planning, money mindset, and more. Because Ask is one of the 7 Steps to Wealth, and whether you’re asking questions that help you learn more and empower yourself or seeking out the support you need to take the next step in your wealth building journey, asking is an essential step to building clarity, confidence, and momentum with your money. Let’s dive in.

[EPISODE]

[00:01:10] Hilary Hendershott: And we’re back with another Ask Hilary. In this episode, I’m answering three questions from women who are navigating big shifts personally, professionally, and of course, financially. Whether you’re entering your thirties, becoming the breadwinner, or wrestling with family responsibilities, as so many of us do, this episode will help you make empowered and values-aligned decisions with your life and your money, because the truth is money is not separate from your life. It is your life, your relationships, your choices, your values. It’s your future, and you deserve to feel in control of all of it. So, let’s get to it.

[00:01:46] First question. “I’m about to turn 35, and I’ve just started thinking about money. Is it too late? Hilary, I spent most of my twenties just trying to survive, traveling, freelancing, couch surfing, changing jobs a bunch. Now, I’m 34 with no savings, no investments, and a tiny 401(K) I haven’t touched in years. I feel so behind. Everyone around me seems to be buying houses and planning for kids, and I can barely look at my bank account. I need to get serious. I know that, but part of me wonders, is it too late to build real wealth?” Oh, I wish we could have a glass of wine. Honestly, there are so many words I want to say right now. First of all, the answer is no, it’s not too late.

[00:02:27] Second of all, I don’t know, 65% to 70% of women I meet have this same narrative. Certainly, I realized that I was in the financial ditch when I was in my late twenties, but it took me till my late thirties to dig fully out of it to be a person with a meaningful net worth. I think this is a female thing, this whole feeling. I have a hypothesis that the frontal lobes of our brain are where we get our financial sense and that those don’t develop until we’re at like around mostly happens around 35. So, no, it’s not too late. You’re totally normal. My guess is 70% of the population is in your same situation. I guarantee you, there are women listening who are 45, maybe even 50, that had the same money timeline, and they’re going to get a ton out of this conversation because they still feel guilty.

[00:03:19] And I hate hindsight regret. I hate guilt. I hate feeling bad about the past. I don’t want that for you. I try not to do it myself. I give you full permission to release feeling bad about not realizing that you needed to get serious about money until you’re 35. We all have that reticular activator that we sit around with our friends who like they bought their first condo at 20 years old, and they’ve bought up and bought up and bought up, and now they have a beautiful four-bedroom suburban home with a little rectangle front yard and a nice backyard. And everywhere we look, we see those people, and we compare ourselves to them, and we come up short.

[00:04:03] But I promise you, if you look around, if you really sit for a minute and take stock, you also know a lot of people who are not moving forward financially, who are not financially responsible, who are not paying attention to spending less than they make and saving, et cetera, et cetera, et cetera. Okay, so this is normalized. I don’t know if you recall, I had a guest on my show named Anne Lester, and she said in our episode together, “It’s never too late to make it better. You can do something today, no matter how old you are, that’s going to make it better. The longer you’ve waited, the more you’re going to have to start adjusting.”

[00:04:37] So, that’s really it. And I always say to people, there’s no way around. That going from spending 100% of your net income to saving 20% or 30% of your net income feels like tightening the belt. Obviously, it’s literally a zero-sum game. They call economics the dismal science. Economics is the science of allocating scarce resources. This is your personal economics, and I’ve done that. I don’t mean to overtalk it, but I did live on $8 a day for food for two years. I did not buy a cup of coffee. This is before I stopped drinking coffee. I did not buy a cup of coffee for two years. I went to free cafes, people’s offices. I’m not kidding you. I would change floors in the building to go to the kitchen of the company that had a coffee maker in the kitchen.

[00:05:27] Okay. I would go to networking events, not to network, but for the free food because I was hungry and I didn’t have no money. So, it happens, and it’s life, and you can get through it. You just want to make sure that you put as much mental attention on earning more as you do on spending less. Okay? If you listen to this show, you understand how compounding works. You put your money in the stock market, and it compounds slowly. You don’t need to be perfect. You just need to be consistent. There’s a saying, time in the market is more important than timing the market, and that is what I see. That is what I see in my clients. Most of my multimillionaire clients drive Toyotas. They just do.

[00:06:14] And so, this is the life you want to establish, is a life where you spend less than you make, and you may have to do some radical savings years in order to catch up. You may want to do that. But get a plan in place. In the beginning, I think when I made my financial turnaround, I think at that time my compensation was about $65,000 a year, and I just sat down and I created a radical plan. In the beginning, to raise my net worth, I was paying off debt, and that– paying off debt does the same thing to your net worth. I was saving money. I saved a little because I wanted to see the balances grow. I needed that to be happy and satisfied and feel accomplished. You’ll do what works for you.

[00:06:56] Okay. The point is the math has to math, okay? It’s arithmetic. It’s not multiplication or long division or calculus. I know you can do it. Maybe you have a buddy who can help you. There are lots of online tools, so you can do this with your financial advisor if you have one. Your financial journey doesn’t have to look like anyone else’s, and it won’t. Just start with what you can control. It sounds to me like you’ve already made your decision to change, to make a life change. Let me tell you, I’m 48 today, and I’m always making life changes. It’s okay. It’s just that this one feels so daunting because you think, “Oh, I should be at a million, or I should own my fourth house, or I should have a FICO score of 800.” Right? And it’s slow to get there.

[00:07:41] Don’t worry. Don’t worry about the future. Just do what you can do today. The first step is to automate your money. So, I’ve talked about this before. You can find resources on my website. Maybe we’ll put a link in today’s show notes. We will put a link in today’s show notes. I have a guide to financial automation. I believe it’s called Profit Boss Automation. That is a brand I used to podcast under. So, that’s– profit bosses automate their money. But the point is you’ve got to know how much money you can spend on a day-to-day basis. You must know. This is where I came up with my $8-a-day food budget. You must know how much you can spend.

[00:08:19] And by the way, that– grocery shopping, restaurants, everything, cafes, everything, you’ve got to know how much you can spend right now, today, and in every moment in order to stay on track with your new financial plan. And that requires automation. So, you’re going to do what you can to automate. I don’t recommend budgeting by spreadsheet. Nobody likes that. Nobody’s loyal to those kinds of things. It’s just overwhelming. So, use automation instead and just figure out what you need to do to build up those account balances, and then spend what’s left over. That’s your new financial theme. Until you get to the next phase of your financial life, your motto is, “I spend what’s left over.” So, you save first and you spend second. All right. Good luck. Keep listening to the show, and I know you can get there.

[00:09:03] Alright. So, taking that first action, even if it feels small, could shift your entire relationship with money. But what happens when the numbers aren’t the issue? What if it’s the dynamic with your partner? I have so much new thinking on this subject. I used to say, “Oh, he won’t work with you on the money? He’s a jerk. Divorce him.” But no, that doesn’t have to be the way. Question number two. “I’m the breadwinner now, but I’ve never felt less in control of my money. Hilary, my husband, left his job to pursue entrepreneurship, and I now make 90% of our income. We used to split things 50/50, but now everything goes into a joint account and he tracks every dollar I spend.” Wow. Okay. “Even though I’m covering most of the bills, I don’t overspend, but I’m starting to feel parented.”

[00:09:51] I’m starting to feel parented just reading about this. “Is it wrong to want financial independence in a marriage?” No. No, it is not. You are a grown ass woman and you need financial autonomy, you need respect, you need personal control, and you’re in a financial partnership. Okay? So, I’m surprised he has time to watch over your spending. I mean, I’ve started a business. It is time-consuming. I’m surprised he has time to do all that. You should tell him, instead of watching what I’m spending, you should spend more time growing your business so that we don’t have this financial imbalance anymore, right? He’s got to allocate his time carefully.

[00:10:34] You should help him understand the things that are most important to growing and scaling a business. You’ve got a financial partnership. You and he arranged whatever systems you did. You made the agreements that you did. Okay. Do those agreements still work for you? We talked in the previous episode about doing a life review. You have full permission to review the agreements you made in the past and rescind your agreement if it no longer works for you. Okay? This is what I always start with when people talk about the relationship stuff, it’s like it’s important to give yourself the freedom. If you don’t embody that you have the freedom to bow out of a relationship or an agreement, then you will be in that relationship and/or agreement with a modicum, a molecule, or a massive amount of obligation.

[00:11:21] I want you free of obligation. Okay? So, I’m not saying leave. I know that’s what the “Am I the Jerk” people on Reddit always say. “Leave him. Leave him.” I’m not saying that. I just want you to be in this relationship with full–all of you, with your full self in this relationship, this financial partnership. Okay, so once we’re there, you want a spending plan. As a partnership, as a financial partnership, you and he need to have a spending plan. So, I’m thinking, why is he even reviewing your expenses? What is he doing in there? What’s happening? Why is that? Because you must have an agreement about how much you’re going to spend.

[00:11:57] So, either you don’t have an agreement or you’re breaking that agreement. Or you’re not breaking that agreement, and he’s like not trusting you. So, we got to diagnose which of those phenomenon/phenomena is happening. Then you want to stick to that spending plan together. And in the beginning, when someone’s starting a business, you kind of need to plan for 6 to 12 months without income. So, it’s interesting you say that you’re earning 90% of the income. I’m super curious. Like, is he earning that 10% consistently? Is that consistently coming in? And if so, how long has he been in business? Like, are you going to do a review as a partnership? Is this business thing working out? Can I go back to my job if I’m not making the money I want and need to make?

[00:12:37] And yes, being in business isn’t about making as much money as you think you can. In other words, just making as much money and being happy with how that number ends up, you’ve got to have goals, and you’ve got to be growing, and you’ve got to be willing to quit doing things that aren’t profitable. Okay. So, then getting back to what’s wrong in this, that he’s reviewing all of your expenses. So, we covered, if you don’t have a spending plan, get you a spending plan. The second thing is you have an agreement and you’re overspending. So, if you’re overspending, well, honey, then you don’t deserve his trust.

[00:13:13] I mean, come on. If you made the agreement, you got to stick to the agreement. You can’t break your word in a relationship. You know this. So, if that’s your truth, then apologize to him. Take responsibility and abide by the agreement or rescind the agreement. And then the last one is, you’re abiding by the agreement. You have an agreement, you’re abiding by the agreement, but he doesn’t trust you. Couples therapy? Yeah, you know, which would be bad. Hopefully, he can knock that off because you don’t necessarily have the time or money for couples therapy. You want to be a fully functioning machine as a couple so that he can go focus on making more money in his business, right?

[00:13:52] Because he’s not going to feel like a fulfilled, happy, proud human until his business is up and running and profitable, and he’s contributing to the relationship like at the level of the provider he wants to be. Okay. Yeah. And then in terms of what should be separate, I do think a husband and wife, or wife and wife, or husband and husband, two members of a romantic partnership should have separate accounts. There should be small pots for you to spend from that you don’t have to answer for, that that person doesn’t get oversight to. And maybe that’s 5% of your spending budget like it should be small. And then if your budget is $100 a month and you want to save for 10 months to buy a $1,000 bag, you can do that.

[00:14:33] You can spend $100 a month on Sephora, or you can save up–I don’t know how you would not buy beauty products for 10 months, but more power to you. You can save up and buy that $1,000 bag. I was going to say Louis Vuitton, but you can’t get a Louis Vuitton for that price, can you? It’s really not wrong to want financial space. It’s really healthy. You need your autonomy. So does he. The key is really having that conversation and bringing this to him with the intention to work it out before that resentment builds. All right. I wish you luck. So, I think everybody listening knows that relationships definitely bring financial complexity, and so does family, right? Especially when you’re building financial momentum and someone you love needs help.

[00:15:16] Question three is, “I want to help my mom, but I’m scared I’ll end up broke too. Hilary, I finally started saving and investing in my thirties after years of debt. I’m single with no kids, and I’m proud of how far I’ve come. But now my mom’s asking for help with her rent. My mom has always struggled with money, and I love her, but I’m afraid that if I step in, I’ll derail my own future. How do I balance caring for family with protecting what I’ve built?” Ugh. I feel for you. I really do. This is one of the hardest and most emotional, I mean, it’s a money conversation, but it’s really like a life conversation, right?

[00:15:55] Our parents gave us life. It’s hard to make it in this world. You have to thread the eye of that needle over and over and over again. You have to do so many things right to get ahead in life. And then at the end of the day, during your peak earning decades, do you owe your parents who gave you life and paid for your life, and maybe paid for you to go to college, but ultimately weren’t great at saving for their own financial futures? Do you owe them money? Gift-giving guilt is different than giving from a place of generosity or sufficiency. It’s terrible. And there are trade-offs either way because, look, most people are fundamentally selfish, right? And that’s not bad. We have a self-oriented view. No one is going to focus on your happiness like you are.

[00:16:46] Your mom, if she needs money, obviously, she’s shared that with you, and now that she’s shared that with you, she probably has an expectation that you give. And if you don’t, there’s probably going to be upset. Maybe it’s going to impact your relationship negatively. Maybe your family’s going to get involved, and you’re going to be seen as greedy or selfish, right? I mean, it just amazes me the way people are willing to pass judgment on other people’s lives. The easiest thing to say when someone declines to give someone money who asks for it is, “Well, that’s selfish. You can afford it. Why wouldn’t you just give? That’s your mom. Don’t you owe her? You owe her your life, right?”

[00:17:22] Yeah. I don’t understand how people think they know these things. Anyway, I hope you hear in my speaking a different viewpoint, a different opinion, I don’t have an answer for your question. Of course, I don’t. First, if you’re going to do this a healthy way, start with the assumption that it has to work for you. And I don’t know what the answer is, whether it’s giving 5% of what she asked for, 50%, 90%, or 100% of what she asked for, or even more, start with what you can afford. Of course, just like on the airplane, you have to affix your oxygen mask before you do the mask of any of the children around you. If you cost yourself or tank your own financial plans in order to pay her rent or give her what she’s asked for, then you ultimately are putting yourself in a position where you’re going to have to do the same thing with other people, your kids, your friends, your spouse, your husband’s parents, whatever that may be.

[00:18:15] You can consider boundaries that honor both you and your mom. You can set a dollar amount. So, anywhere from what she asked for to less. You can set a defined timeline. “Mom, I’ll give you $1,000 a month for a year.” Or you can offer resources other than direct cash. You know, “Mom, can I, oh, I don’t know. How about you come live with me for a year to decrease your expenses? My friend has an executive admin job. It’s twice your current salary. How about you go work there?” I mean, that seems unlikely. I’m just making this up. But anyway, there’s resources other than direct cash that you could consider.

[00:18:54] And then, as I’ve said before, your financial plan can reflect your care for others. If I were to answer this question in my wealth management practice, I would say, “Let’s plan on you giving the interest, not the principal.” The interest, not the principal, right? That’s both a specific number, but it’s also a life choice, if that makes sense. I’m not going to give more than I can afford, and I’m not going to give what takes my net worth down, but I’m willing to give you the earnings so that my wealth remains regenerative and sustainable. So, money lover, as I’ve said before, your financial plan can reflect your care for others, but you have to protect your foundation first.

[00:19:36] Key lessons from today’s episode include no matter when you start, the key is to start. Let’s give ourselves permission to free ourselves of hindsight regret and guilt when it comes to money. Never helps, always hurts, just get started and know that you are the rule, not the exception. Also, healthy financial systems honor your relationships and your goals. It is okay to have it work for you, and trust is required in romantic and financial partnerships. And finally, you don’t have to choose between being generous and being secure. Don’t let guilt rule the day. It is okay to say no. And you can be both generous and secure if you have a plan and stick to that plan.

[00:20:26] Thanks for listening to this Ask Hilary episode of Love, your Money^®. If you’re ready to get intentional with your finances, I recommend you start with the framework we use with our clients and in our own lives every day, The 7 Steps to Wealth. You can download the free guide at HendershottWealth.com/7steps.That’s the number 7 steps. And don’t forget, you can send your own Ask Hilary questions to hello@hendershottwealth.com or just go to HendershottWealth.com/AskHilary. Until next time. Keep loving your money so it can love you back.

[END]