Almost everyone in the world who has to work day in and out is subject to financial stress, most especially when it feels like you’re barely earning to survive. With it, we feel financial shame, doing us more harm than good because reaching out for help seems very difficult to do. Helping ease the burdens of financial stress, Jen Du Plessis interviews Kate Phillips, wealth coach at Total Wealth Coaching, financial writer, and singer-songwriter. On a mission to banish financial shame, Kate imparts a story full of lessons and wisdom about overcoming financial stress. She lays down some financial stress solutions that not only you can benefit but your clients as well, especially in this difficult pandemic time. Take a deep dive into this insightful conversation as Kate reminds us that we’re not out on an island by ourselves and that we, too, can find the way out of this challenging state.
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Financial Stress Solutions To Get You Through Difficult Times With Kate Phillips
I have a special guest, Kate Phillips, a wealth coach, financial writer, and singer-songwriter. She writes newsletters for over 6,500 investors every single week and she co-authors top financial advisors, co-authors books with them and helps them grow their business. Her real passion is helping everyday people free themselves from the burdens of financial stress, which we’re going to be talking about. Kate, welcome to the show.
Thank you, Jen. It’s great to be here.
I’m happy to have you. Before we get into the financial stress part of it because I have lots of questions for you there, you were also a real estate agent for eight years. You are in the context of our show here, but you will have a story that everybody needs to hear because we need to hear that we’re not out on an island by ourselves with some of the financial stresses that we have had in the past or are experiencing now. Would you mind sharing with us your story?
It is one of my missions to do whatever I can do to banish financial shame. Shame is a low vibration state to be in, and yet money is one of those areas where many people are stressed, but they don’t feel like they can say it. Everybody hides it, pushes it down and most people are not where they could be or should be financial. I’ve got people beat with my story if it’s a contest because I struggled with money through my 20s and my 30s. I got to a point where I felt like I had money figured out. I was a single mom, but I was earning six figures as a realtor. I was starting to build up rental properties. I had money in the bank, was learning and transforming my relationship with money. I had bought a new home by a lake and this was in King County, east of Seattle, wraparound front porch and this rolling backyard that went into rolling pastures. I felt like I’m sad. I’m on my way and that was in 2007.
I was teaching workshops for women around money, other realtors, mortgage people, friends, people that I knew, and felt like I had found my calling was helping people especially women up-level whatever was going on in their financial world. I went through this financial storm. It was this perfect storm of bad decisions, bad economy, and bad timing. I ended up becoming my father’s caregiver. I went through a breakup and ended up solo on the big house by the lake on the mortgage. I had left real estate and moved an hour away from my old market and had launched myself as a wealth coach. I became the wealth coach who lost it all. We all remember the Great Recession. My tenants stopped paying rents and I was caregiving my father and my own health collapsed. I lost everything including my savings, my retirement. I lost my own home. I was a single mom with my father living with me as well, and we had to go find a new place to live.
It was a crazy and difficult time but it was also this amazingly transformative time because I lost everything. All of these outward signs of financial success. I lost the outward identity of a successful woman. I had to dig down deep and find that unshakable abundance within myself and I had to know for myself that I’m worthy. I had to learn to believe in myself again. I had to learn to deal with shame. I had several properties that I lost or short sale. One of them was my former home and I remember walking into the Windermere Real Estate, the people that were once my colleagues, and listing my home that was going to be a short sale with a friend. Knowing that my name was going to be on it and people were like, “Didn’t she used to do the wealth coaching a couple of years ago?”
Every home that I owned lost 45%. All of my assets turned into liabilities. I was underwater and I had to define for myself what success looked like. I had to go back to basic gratitude, self-care, taking walks, and getting in touch with the present moment. I learned. I had left real estate. When I abandoned wealth coaching for quite some time, I had to learn this flow of giving and receiving. I learned that was the magic. That was where it all was, learning to give, receive, believing in myself, loving myself, taking care of myself and it slowly started rebuilding.
I love that story because a lot of people have that similar story. They may not be saying it, but they have that similar story. I imagine that a lot of people that are reading have been through it and maybe on the other side like you, they’ve now come full circle and can now breathe a little bit more. There’s this undertone of fear of that happening again. I’ve experienced it with some of the people that I coach is that they’re saying, “I’m afraid to do anything because I’m afraid that all will be taken away from me again.” I’ve honed in on and talked about a lot is creating a good strong foundation for yourself. Thank you for sharing and being real about that because I know it’s still hard to do.Whatever experience and challenge you are having, we need to learn to empower ourselves at that moment. Click To Tweet
When we think about financial stress because that’s one of the things that we’re going to be talking about is the financial stress solutions. There is a white paper out there and I have it. It’s a little older now, it’s probably 4 or 5 years old about the impact on the productivity of employees due to financial stress. The impact on their health, which then leads to them missing more work and having more health bills and things like that all because of financial stress. It’s a great topic for us to be discussing not only to help those that are reading but for those that are reading to also be able to see some signs and help their clients through any challenges that they see that they might be having if their job is the type of job that could warrant that guidance. Let’s dig in and talk about the importance that you see in the financial stress solution and how someone can get started and recognizing, “Am I walking around like this?” I don’t realize fear and overcoming that. I know you’ve got four steps to this, but some steps to come out of that and say, “I am in control of me and my finances.” Take it away with your thoughts about how to identify.
One of the first steps is realizing how many people are financially-stressed. Survey after survey says 7 out of 10, it might be 6 out of 10 in one survey and 8 out of 10 in another. It’s 7 out of 10 Americans name money as their top stressor. I’m going to give you a different formula because my financial stress formula, we used the PEACE formula in it. The P stands for Perspective of Prosperity. It all starts and it’s a mindset shift. It’s becoming acquainted with the present moment. Here’s what most people try to do, and somewhere on my website, I have a Financial Stress Quiz. I did it years ago, even before my storm and I was shocked when I realized this big thing about the quizzes. The quiz was asking people, “Are you having trouble sleeping at night? Are you worried or fearful about the future? Is your health being impacted?” All these questions about how financial stress is impacting them.
When I got done with this quiz, I looked at it one day and I thought, “It didn’t ask people about their money. I didn’t ask them if they had an emergency fund.” I realized how much financial stress exists in between our ears, even more so than inside of our bank accounts. That’s where the transformation has to start. We have to get ahold of our mindsets and start to believe in ourselves again. When we’re in panic and fear, we have these negative habits, people get stressed and they’re drinking too much caffeine, too much alcohol, self-medicating, not sleeping and it’s then a downward cycle.
I would say even from a business perspective, they’re like cats on a marble floor. They’re hungry that people can see it and it’s a deflector from your success.
We used to call it commission breath. We’ve got to learn to manage our interpretations and whatever’s happening in the present moment. Be able to create what we want instead of be in reaction. Take those stories even if we’re having a challenging time with money. You can label yourself a loser or you can say, “This isn’t working. What should I try next?” We don’t need all of the drama. There was so much drama in the Great Recession and one of the ways that I got through my storm was disconnecting from the drama even when my home got foreclosed on. I realized I needed to go find a new home. I had no credit. I had no cash reserves and I realized that I’ve moved fifteen times in my life and there doesn’t have to be any drama and moving. I can make a decision. This home didn’t work for me. I need to find a new home and go and do that without all of the drama attached to it.
Do you think at that point though maybe your shame was bigger than the drama? It’s easy to disconnect and say, “I’ve moved fifteen times, I’m just moving again.” Do you think the shame was the overlying blanket that was pushing you down a little bit?
I’ve busted through that and I needed to bust through that before I even moved. When I went out and found a new place, I had to argue for my worth and why I was going to be the best tenant ever. I knew that I was competing against tenants that had good credit scores. I had to convince the landlord why she should rent with me and I did. The P is the Perspective of Prosperity, and that’s key. Number two, along the same lines is to empower your experience, whatever experience you are having, whatever challenge you are having. We need to learn to empower ourselves at that moment and that includes self-care. That includes stress management. That may include yoga. It may include journaling or meditating, and learning to handle whatever it is we are up against at the moment so that we are taking back control. We can do difficult things well. We can do difficult things with grace. Our circumstances do not have to be perfect. We can empower ourselves even in challenging circumstances.Renting is one of the most dangerous things people can do with their money because they have no control. Click To Tweet
That’s important too. What I’m receiving from that is about taking action and not wallowing in what’s happening. You could stay in bed all day. You could lose sleep all night. Believe me, I’ve had those nights too where I’m like, “Where’s the money going to come from to do something?” I can wallow in it or I can think about ways that I could take action to get out of what’s becoming a spiral down. Something mindset or physical or it could be talking to somebody, it could be putting your foot down and doing something that you need to be doing and you know you need to be doing. Beginning on top of that hill so you don’t become the victim and that becomes the enabler. That’s why empowerment word is good because the opposing word is enabling. You’re enabling yourself to wallow in this situation rather than doing something to get you out of it. We have perspective and empowerment.
The third one is Action. You’re leading into it because one leads naturally into the next one. It may be habits. It may be looking at what we’re doing with our day. It could also be our habitual how we talk to ourselves or that sort of thing, but we’ve got to look at what we’re physically doing with our bodies. What we’re physically doing in our businesses. Is it working? Is it not? Do we need a new strategy? It might be something like time blocking. It might be planning our week and having a sense of priority about what is important. Brian Tracy talks about eating the frog. It involves doing something every morning.
The nastiest thing.
The thing that we’re trying to avoid doing that.
The opposite of action then is sitting and wallowing. I’ve seen people do that. My brother goes through that. He wallows in it. It’s negative. I don’t even want to talk to him. He is not taking action to get out. I’m giving him actionable items all the time, “Did you this? Did you that?” I don’t think he did, but that’s okay to try to get out instead of caving in and becoming a hermit. I get that you have to think about it and you say, “I’m going to power myself to take some action. What happens next that gets us out of this?”
The C stands for Care for your Cash, and mindset and action is fantastic. Empowering ourselves and reducing our stress. All of those things are important and we’ve got to pay attention. What is going on in our cashflow? Are we earning enough? Are we spending too much? Not sticking our head in the proverbial sand, but having those open eyes and part of caring for our cash is some strategy because one of the things that have been normalized by a lot of financial advice is put it all in the stock market, put everything in the stock market. Even when a young person in 20s or 30s is getting started in their first few jobs. They’re told to max out your 401(k), put everything in there and if you follow that advice, you may forget to build yourself an emergency fund first. It was either 46% or 56% of people in the great recession, they were rating their 401(k)s and then they were taking losses on the investments plus paying 10% penalty plus paying the taxes. Maybe they had put in $100,000 and they’re liquidating it and they’re only pulling out $40,000 or $45,000.
It was a losing game. When I talk about care for your cash, when you care for your children, you let them go play in the street. You’re not going to do that. You’re going to make sure your pets are safe. Your loved ones are safe, but it’s become normalized to put our money at a great number of risks. It was one of the mistakes I made was over leveraging myself in real estate because I had been in real estate for so long. I felt smart about it. Almost nobody had the experience of that kind of a market cycle before because I was over-leveraged and I did have an emergency fund and I did have cash, but it wasn’t enough to get me through that storm. People, who are afraid of, “What if this happens again?” They need to be looking at where is their cash, how leveraged are they and making sure that they don’t have a large number of their assets at risk. When we don’t have control over our assets, that freaks people out and it should freak people out when they don’t have control over their assets.
One of the things that I was thinking is another C-word, but it’s a consideration about caring for your cash. It’s easy to swipe a card, swipe a phone, swipe an iWatch, pay for something with an app or sit around and look at Amazon, eBay, Etsy, whatever it is as your advice. It’s easy to let money slip through your fingers. It’s not the saving part. Darren Hardy says that he always asked everybody if they got bit by an elephant and the answer is no, we’ve never been bitten by an elephant, but we’re bitten by mosquitoes. It’s seemingly insignificant little choices that we make that can add up all the time. I see that happen all the time, “Save 15% by getting a credit card at this store at Christmas.” All those crazy little things that people are sucked into. I love that you’re saying care for your cash because now it has this meaning to me. It’s not just money, it’s that I have to take care of it. I have to coddle it and it’s being nicer to your cash. What is the E then?
The E is Envisioning the extraordinary. We have to have a vision of the future that pulls us forward, especially when times are challenging. It was through those visions of what I knew I wanted my life to be. I went for 3 or 4 years with no vacation. I remember when I was trying to get a loan modification, but I had to give a written explanation of why I had spent $11 at a Starbucks. I didn’t internalize that stuff. You’re looking at yourself from a distance and observing, you become the observer like, “Look what I’m going through now. This is interesting.” I t will not always be this way. Sometimes people go through challenging times and they get used to it. There can be even an emotional, psychological addiction to certain emotional states. We can become addicted to frustration, to pain and it’s important to be envisioning what it is that we want that future to feel like, what we see ourselves doing, what it looks like, what it smells like, what it sounds like? I envisioned myself on beaches, traveling, having more time freedom, and more cashflow, and those things have come about.
I’ve been able to travel for the last few years. I’ve gone to Bali, to the Caribbean, to Mexico, to Italy, to France. I’m taking my fourth trip back to Hawaii. This is since the financial crash, all of those trips on cash. I’ve been able to create that life that I was envisioning for myself and I’m doing it a little differently now. I’m not as leveraged as I was. I am more conservative about what I do with my cash. I’m paying attention.
If people can hear what you’ve had to say, heed your advice and say, “Don’t let it happen to me. Let me take the steps that I need to beforehand that they’re going to be better off in the long run. No doubt, no question.” Those are the four steps: Perspective, Empowerment, Action, Care of Cash and Envisioning. All that adds up to PEACE. Peace of mind, sleeping at night, comfortable, and I’m sure there are more steps that need to be taken to ensure that all this comes to fruition. I wanted to ask you. If that’s taking care of yourself and someone reading could take that and give that to their clients as well, what are some recommendations?
You having been in the real estate space and know real estate mortgage and entrepreneurship. What are some of the things that people could do to help their clients with this? If they have the ability to do this or if their line of work allows them to talk about finances with their clients. What are some strategies that they could use aside from just saying “Go have perspective, empower yourself?” What are some things that the average person who’s reading can say, “If I could remove some of that stress from my clients because they all come especially in these big-ticket items They come in and they’re stressed out?” What are some things we could do?
The woman that I work with in my day job and helping her build her business. She’s got the list of the 6,500 investors, Kim Butler. We and I say we because it’s really her and I together creating the messaging. We are talking about gratitude constantly. I did a Ten Days to Abundance Challenge. We’re talking about Kim and I did a 30-day gratitude challenge. We need to be modeling and encouraging gratitude constantly. I realized this is a mindset thing, but the importance of it cannot be overemphasized. I’m encouraging people always and modeling, talking about gratitude. We do that a lot in that business.
I would say from a more strategic standpoint if you’re in financial advising and mortgages, we need to be cognizant of those market cycles. It’s clear looking at history, we could be going into another stock market crash, could be going into another housing downturn. I know we’ve seen some things flattened in a lot of markets. Being wise and not encouraging people to take risks, but to look at cashflow. Any time when we’re making a bet that this investment is going to go up, this house is going to go up rather than looking at what is the cash on cash return. Right now is a great time to do some boring things with your money. To put some money into having maybe some CD ladders and finding that whole life insurance can be a great long-term place to put money.
When it comes to real estate, right now is a horrible time to go flip houses. There are too much uncertainty and volatility. Looking at and making sure people can afford whatever it is that they’re buying, that they’re comfortable, that they’re checking in with themselves and at peace with that payment. I bought a townhome last year. I’m a homeowner again. That took me too long to get back into it. Prices were high in the Seattle area. I decided I didn’t want to do that so I rented a little longer than I could have while I was making decisions. I found a home that I love and my payment went down $500 from what I was paying rent. I downsized a little bit. My father’s no longer with me, my daughter’s out on her own now so it was a great time to downsize. We need to be making decisions that we can live with. They don’t need to be risky. We don’t have to be rolling the dice and trying to take some kind of risk that we hope will pay off in the future.
If I’m putting myself and envisioning for myself in the mortgage perspective, and though I’m not doing mortgages anymore. If I’m sitting with a client, it has to be that we remove ourselves from commission breath because we go at such a pace, in both of these industries, that is just the next transaction, next person and next transaction. Maybe if we eliminate that undertone of that commission breath and push papers aside and say, “Tell us what your biggest fears are, tell us what you learned about most.” Maybe ask them some more poignant questions that get them to think. We’re not trying to outsell them out of buying a house, but we are trying to get them to be realistic in their approach.
I can tell you, if you give a client a mile, if you give them an inch, they will take five miles. If you tell them that they could qualify for something higher, they will go in that direction so maybe is not the time to even talk about that until after because maybe you don’t do it either, but until after you had a conversation, a real adult conversation with them about money, about where they stand and how they think they’re doing. That for me is also towards gratitude because we want to be thankful that we have a house. We want to be thankful that we get good terms. We want to be thankful that we get all the wonderful things that will make us be thankful for this house rather than resent it later.
Or worse, lose it. Nobody wants to sell somebody a house, make somebody a mortgage and have them go into foreclosure later.
I’m thinking in-between like, “I resent this. I shouldn’t have bought this. I should have taken the time to learn more.” Let’s give them the time now. I think that when they’re happy like that, then we don’t have to be financially stressed because then we have a revolving door of referrals because of the time that we took to care about them.
People appreciate it when a service person is not rushing them, “Here, sign the dotted line,” but they’re asking them those questions like, “Are you sure? How do you feel about this?” From a financial perspective, there’s a simple handful of things that we can be doing for ourselves and encouraging others to do. It’s building that emergency fund. It is raising our savings rate. Americans are saving about 2% and you look at a place like China where people do not earn nearly as much and they are into the double digits of savings. We do have one of the worst savings rates in the world. If you’re saving 5%, how do you get to 10%? If you’re saving 10%, how do you get to 15%?An important part of loving ourselves is learning how to forgive ourselves for whatever we've done. Click To Tweet
Even though I know I’m saying, this is maybe not the best time to run out and buy a house, it’s never a good time to rent. Encouraging homeownership and encouraging it in a wise sustainable way, not going overboard and putting 45% of your income towards a mortgage is not going to be a good idea. We’ve got to be encouraging homeownership because renting is one of the most dangerous things people can do with their money because they have no control. They’re taking 35% or whatever of their income and they’re lighting it on fire every month.
I’m doing the same thing but I’m flushing it down the toilet. By the same token, you don’t want your mortgage to be a glorified rental. That a lot of people in their mind shift say, “We own our house with the same payment. It’s the same everything, it’s a glorified rental.” There are ways to manifest the equity in your house whether it’s prepaying, improvements, or diverting other funds. There are all kinds of ways to continue to make sure that it’s not a glorified rental and it does help you create wealth rather than letting the market do that for you. That’s what we experienced in 2007 was everybody was letting the market determine what their equity was going to be in their house versus me having control over what my equity was going to be in my house.
For the audiences, everybody who’s reading, financial stress is something that we experience. It’s things that our clients are experiencing and it’s important for us to be talking about it as we are here talking with Kate Phillips. Kate as we end our time together, thank you so much. This has been informative. I have a sense of peace, which is hilarious, in the talking about it. I haven’t thought that in every interaction that we have with people and our clients, we need to take the time to ensure that they’re going to have peace in the decision that they’re making. I feel that way is, “Slow down a little bit. Let’s make sure that they’re happy clients and that we’re doing the thing.”
That is well said. We want them to have peace in their decisions. We want them to know that the relationship that they have with us, we have a business relationship, we enjoy our commissions if we are in a commission business but it’s based on also caring for that person. When I was a realtor, as I’ve worked with realtors or with mortgage people, whenever there’s a situation when there’s a transaction that for whatever reason is not going to finish, it is not going to complete and we’re fine with that. We want it to be right and if this isn’t the thing then let’s go find the home or find the investment that is going to be the one. It does give you a sense of being cared for. We want our businesses to be built on relationships.
I think of it as a client cash care program. Kate, let me ask you, what book are you reading that’s making an impact on you, whether personal or professional?
One that I loved that I want to read again is James Clear’s Atomic Habits. It’s a wonderful book on habits that gets into psychology. Some fascinating stories and habits as something that I come back to again and again. I’m an abstract person and artistic go by my intuition and as we talked about with caring for your cash, you’ve got to look at your bank account. I have to constantly review what is happening with my time, “Am I making efficient use of my time?” I found that book very helpful. I have recommended it to others.
Thank you. I’m all about habits, good habits. Kate, if someone’s reading and they’d like to get ahold of you, what’s the best way to reach you?
I’m Kate@TotalWealthCoaching.com or through Facebook at Facebook.com/totalwealth. I do live videos every Wednesday. I’m active on Facebook and sometimes I get messages simply at TotalWealthCoaching.com. Those are all the places you can find me.
Thank you so much for sharing all this. My hope is that everybody who’s read it can take a deep breath and say, “I’m not stressed anymore. I’m going to slow everything down. I’m going to make sure I’m taking care of my clients and myself. I’m going to recognize that money has an impact on me.” Let’s make sure that it’s a positive impact as opposed to the stressful impact. Thank you for sharing all of your great wisdom with us.
Thanks for having me. I’m going to share one last thing that popped up, which is if you are in a situation that you wish it was a better one financially, forgive yourself. That’s such an important part of loving ourselves is being able to forgive ourselves for whatever we’ve done. We’re not going to change the past and that gives you the perfect place to move forward from. Whatever situation you’re in, embrace it.
I love leaving on that note. Thank you for reading. Learn what Kate just shared. We’ll catch you next time on the show. I hope you have a great week.
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About Kate Phillips
Kate Phillips is a wealth coach, financial writer, and singer-songwriter. Her “day job” is writing newsletters for over 6,500 investors each week, co-authoring books with top financial advisors and helping them grow their businesses. Kate’s passion, however, is helping everyday people free themselves from the burden of financial stress. During the Great Recession, Kate lost everything in a perfect storm of bad circumstances, bad decisions, and a bad economy—including her own home. Today, she draws from lessons learned about gratitude, prosperity, personal growth and money hack to address the REAL reasons why so many people struggle with money—no matter how much they make.
7 out of 10 Americans say they are stressed about money, and it doesn’t have to be that way. Too many people are neglected (or even misled) by a financial services industry that chases after those already succeeding. Kate helps people “unshamed” themselves and move forward.
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