Season 2, Episode 8: Budgeting While Still Getting Takeout

How to create a budget that reflects your values, lets you get the small splurges that make life worth living and still work towards your financial goals

You can take that takeout pad thai out of my cold, dead hands. If budgeting means not being able to splurge on a stressful Tuesday anymore, then let’s go for broke.

But we’re supposed to have a budget, right?

How do we create budgets that take into account our mental health now and financial health later? We invited budget coach Kara Perez, founder of the finance education company Bravely Go to help us figure this out.

We talk about how to adapt a budget to the realities of your life without cutting out all of the joy, and making conscious choices about where your dollars go, and when.

Also, Caitlin tries to get Sara and Kara to square off on different money management approaches. Instead, they agree there are many ways to take on your finances, as long as you do something. Anything! (Well, not anything, but not get paralyzed by the choices to the point that you never start.)

For more of Kara’s financial wisdom, sustainable investing approach and budgeting tips, follow her on Instagram and YouTube.

Oh! And do you have a passive income story? A success? A failure? Tell us about it in a voice memo and e-mail it to: womenonthevergepodcast@gmail.com

Ask us your dumb investing and finance questions for Season 2 on our Ask Us page!

This episode was edited by our co-producer Kelly West. Music by Bad Bad Hats and Devmo.

Transcript for Season 2, Episode 8: Budgeting While Still Getting Takeout

Caitlin Welcome to Women on the Verge of a Financial Breakthrough, a podcast where we're figuring out finance. One dumb question at a time. I'm the dummy. Caitlin Meredith, a coach and mediator based in the Bay Area.

Sara And I'm Sara Glakas. I'm an investor advisor and founder of Black Barn Financial and the Austin Women's Investing Group, which can be found on Meetup and Facebook.

Caitlin Before we start, do you know a woman who might be on the verge of a financial breakthrough? Will you text her a link to our show and maybe to other friends while you're at it? Also, please, if you can leave us a review. This helps other women on the verge find us and we read them and they make us happy. Cry. Today we have a special guest that Sara is going to introduce. So, Sara, tell everybody who we're talking to and why.

Sara Yeah, I'm really excited about this. So we have Kara Perez, the founder of Bravely Go, as our guest speaker today. She is the founder of this amazing award winning international financial education company. And I think we both met each other at a time when we were trying to figure out what each of our businesses was going to become. And so I know she was a sounding board for me. I hope that I was a sounding board for her. She has spoken at several Austin Women's Investing Group meetings on a variety of topics, and I've done a few of her events as well. So I think we've always had this like fun, Austin based collaboration of being in the same space of focusing on women and money and investing. We knew we had to get her on the podcast and I'm just delighted that she's here. So thank you, Kara, for joining us.

Kara Thank you so much for having me. It's great. It's great to be here.

Caitlin On our little screen. So Sara mentioned a little bit about your business, but why don't you say, like, what was your inspiration? Was money always your thing where you got at it from birth, or what was your kind of arc to get to where you are now?

Kara Oh, my gosh.

Caitlin In like five words or less. You know, just like real quick statement.

Kara No, money was not always my thing. I was not good at it as a youth. I went through a period of time in my twenties of being very, very low income, of being very, very financially stressed, carrying student loan debt, only working part time jobs. And that was kind of my like wake up call that if I didn't figure money out, no one was going to do it for me. And so in my mid-twenties is when I kind of got on the financial train and we're still chugging along today.

Caitlin That's so much earlier than many other people I know.

Sara All right. We should point out that Kara is quite a bit younger than either Caitlin or myself, so she's like the next generation, right? Financial educators.

Caitlin And so inspiring because in my twenties, if I thought of financial future at all, it was something that you worry about, like in your fifties or 60, like something so old later and boring and slash scary, intimidating and whatever. So it was and I heard that anyway, for you it was it activated some curiosity about like how what would it be like to live without this stress or can I conquer this?

Kara Yeah, it's very generous to use the word curiosity. I think it activated fear, stress and anger.

Speaker 4 But I think in a good way.

Kara So I'm originally from Massachusetts, but I was living and, you know, still living in Austin, Texas, and I was living with three roommates who had gone to the same college as me, but I only knew one of them from college. The other two were a year behind me, and they all came from families that were significantly wealthier than my family. My family is not wealthy. I grew up with a single mom and two siblings and we were like on food stamps, which is now the SNAP program for about six years in my childhood. And just I did not have very much money and did not have any financial literacy. And they all had both financial literacy and parents who could pay for college out of pocket. One of them was being supported by her parents. It's under 1500 dollars every single month. And, you know, we were like 23, 24. That's not uncommon. But that was so, so strange to me. And so it sucked. Honestly, it sucked. I compared myself to them a lot. I was like, why am I so far behind? But I could just very clearly see the financial benefits that they had because of their family that I did not have. And the gap between us was already starting to widen, even though they were all working. Like one of my friends was working as a tutor, one of them was working as a caterer. The other one was working at the Boys and Girls Club, but they weren't making, you know, hundred K as a financial analyst or anything. We were all kind of working these service industry jobs. But the fact that they didn't have to pay.

Speaker 4 Student loans.

Kara And that they did like get some sort of money from their parents made a huge difference.

Caitlin Well, also, the safety net that that provides just the psychological safety that you get from knowing, like no matter how much you screw up, there's a landing place that would, you know, have the resources to get you to the next place that it sounds like you just had no feeling that was not that was not your reality.

Kara Exactly. So it was just sort of this, you know, it sucked. Again, I want to be clear. Like it sucks. At the time, I was really sad. I was really.

Caitlin Yeah.

Kara I guess I'd angry at the differences between us, but it did make me. You realize, okay, well, if you want this kind of security that they have and if you want the literal cash dollars that they have, you are going to be the one who needs to figure it out. Your mom is obviously has not done this for the first 23 years of your life. What makes you think she's going to start doing it now? So that was kind of part of the springboard into it.

Caitlin And what was your first step? I promise I won't ask you every single step to now. It's a short podcast, but I'm curious just for you, what was waking up and doing something different? What was the entryway to getting that kind of control over your financial future?

Kara Well, I'm a millennial, so the first thing I did was Google it. I was like, Well, I don't really know anything about money. I can't I don't really know who to ask in my real life. So I'll ask Google. Google knows everything. And I literally Googled how to pay off student loans faster because my student loans felt like the biggest financial obstacle in my life. And I just kind of honed in on them and said, If I can eliminate this, it will make everything else better. I didn't I wasn't thinking about investing. I didn't know what the stock market was. I didn't care. I just wanted to get rid of the debt. So I Googled that and found all of these news stories that now I think are even more common. But from like CNBC and MarketWatch and even CNN of like, you know, firefighter and teacher pay off $200,000 in mortgage, you know, in five years. Right. This kind of like fabulous financial stories we see a lot in the financial media of debt payoff. And I found those really inspirational, even though I didn't have a house, even though I didn't have a 60 days salary, I was making like 14,000, $18,000 a year. But I still felt like, Oh, here's proof that it can be done. So that was the first step. I just needed to convince myself that could be done. And then the biggest piece of advice you see in these articles is like, sit down and review your finances. So I sat down and reviewed my finances and I made my first budget, and then that was kind of the next springboard into Here's what I've got to work with. Here are the changes I want to make so that I can reach the debt payoff goal.

Caitlin Kara I'm so curious about that because I've definitely gone through those periods of my life where like that idea of budgeting spelt like something a rich person would say. Like every dollar that I had was going to pay a bill and was going for the cheap cheddar instead of the more expensive age chatter. Like I was making financial decisions. It felt like every hour of my life. And the answer was like, No, no, no, no. And so I'm curious when there's so little to cut, when you have, you know, so little left over after you pay the bare minimum. How did you not get discouraged by that? Because I think a lot of my resistance to budgeting came from that period of my life where I was like, Are you kidding me? I don't have any like, I'm not living some lavish lifestyle where I need to cut out the, like daily Starbucks, Like I don't get Starbucks.

Caitlin So how did you. I'm like, me. It sounds like you got over that and felt some empowerment.

Kara Yeah, I honestly never really felt the which what you're describing, which I do think is very common and a very understandable reaction. I didn't feel that way personally, and I think it was because of my specific life circumstances where I was already so. Upset and so depressed that I was spiraling. I was definitely spiraling down and this felt like someone threw me a rope, even if it was not even really quite a rope, but maybe just like a vine. Like it wasn't very stable.

Caitlin But it was something.

Kara It was a direction to go in. And I had no direction. I had no plan. I needed something to grab on to. So I wasn't like dissecting it. I wasn't looking at it through kind of like a class conscious lens. I wasn't looking at it through a well, I'm like, Yeah, the tone deaf piece of advice of like, Stop drinking coffee. I wasn't like, I already don't drink coffee. Therefore this can't work for me. I was like, I need anything to work for me. I'll give this a go.

Caitlin Yeah, it sounds like the research part of it, like the project part, the sort of challenge of it became, rather than the little piddly details that I focused on. You sort of figure it out like this is a personal challenge to me. And that resonated to you. And so like a focus for your Google searches, which sometimes is like what gets us through.

Kara You know, it was I just was looking for I was like in the ocean and I was just looking for a piece of driftwood. I wasn't even thinking, Oh, there could be a boat. I just needed a piece of driftwood. And that's what this kind of first attempt at budgeting was. And yeah, because I was so low income, it wasn't as if I was freeing up hundreds of dollars a month. I was freeing up. Like I remember in Austin, there's this bar called Shangri-La on the East Side and classic really recommend it for anyone visiting Austin. And my friends and I, my roommates and I used to go every Tuesday because they were due to Da Tuesdays.

Caitlin Yeah, I've been to the Shangri-La $2 Tuesday.

Kara It's great they don't do it anymore, unfortunately, which is really upsetting. But then I was looking at my credit card statement and I was like, all these charges for like ten bucks? What could that possibly be? Oh, it's Shangri-La. Because, you know, to download is you can get three, four or five drinks pretty cheap. But that's where I started. I said, Oh, I'm going to stop going to $2 Tuesday, and that will reclaim me ten bucks every week. So now it's and I have $40 I can put towards my student loans. And $40 is so much money to me. I was.

Caitlin Like, Yeah, this is crazy. Yeah.

Kara And then I just repeated that with everything. I mean, I went full, truly like crazy person, frugal. I stopped paying for everything, including health insurance. Like I went six months without having health insurance because I was like, It's too expensive. So I was not buying all the immediate things. Right? Like restaurants, clothes, movies, all of that immediately went. But I also worked as a caterer and I stopped buying kind of like I stopped buying vegetables at the grocery store because I would just bring.

Caitlin Home.

Kara Already cooked vegetables from catering events like I was living off of these.

Caitlin Left works.

Kara And so I just kind of I mean, sliced and diced. I was living that year, the year that I got serious about, I lived off $11,000. So everything else, you know, that extra $4,000 went to my loans. And then the next year, 2015, I started earning a little bit more money. That year I brought home like 32 grand and then I was still living off of I think I bumped it up to like $13,000. But because I did, I did get health insurance as I think this is dumb, you should have it. But because I had increased my income, you know, then it was like, Oh, now I can put $8,000 towards debt. And it just kind of snowballed. That's why they call it the debt snowball. And boom, then I was done because I also didn't have a huge amount of debt left I had when I got serious, I only had 18 grand left. So that was also a motivational thing of this is small enough that if I work really, really hard, I can do this pretty quickly, like within two years. And I got it done within I think was like ten months or something. I can't quite remember.

Caitlin I So when I hear you talk, I have to keep in mind you were doing this for a temporary time because on the one hand, like, yes, cut out the $10 per week, but the other is like, that's when I see my friends. That's when I get to feel like, you know, a lady on the town. So I get so confused about cutting out those things because if it represents like real social time, which like and is not super lavish, that seems important too. And I think my my continuing pushback against budgeting always have to do with like I have this image of total deprivation, like I will be alone in a room with my beans and cheese and a tortilla and like, can't do it. So how did you ut that together? You were in your twenties to like, you want to have a social life. Was it the temporary goal? Part of it like I'm going to. It's like training for a marathon. Like one day this will be over and I don't have to do 15 mile runs at 6:00. The morning on a Saturday.

Kara Yeah, it definitely that was a huge part, but I'd say that was 60% of it that I knew if I just worked hard this would be over soon. And the harder I worked, the sooner it would be over. That was a direct correlation causation thing, but also because I was in my twenties and I was like 25, 26 at this time and I was living with those friends. So I had built in Friends time because I had three roommates, right? And we would do for all that. They do come from much more financially stable backgrounds. I will say like shout out all three of these people. They were so willing to do free things. So we would go for a lot of walks. We did a lot of like secret drinking in parks. You know, we did a lot of Netflix and movie nights at home. And so I had built in friends. So that is a specific lifestyle circumstance not everyone has, so it's not really replicable. But that was my experience. And on top of that, I started working all of these other part time jobs. So at one point I had five different part time jobs.

Caitlin Oh my God.

Kara So yeah and it is like it was a lot. It was crazy. But it also I was seeing a lot of other people and the catering, you know, that was Friday and Saturday nights every single weekend. So it also wasn't you go to these fabulous weddings and it was kind of fun. I mean, catering is terrible hard work and I would never want to do it again. It's not like I feel.

Caitlin Like we're at a party. Oh, I know, But yeah, but you have, like a social feeling, like. Yeah. Yeah.

Kara Yeah. So it was like I said, that kind of lifestyle, not 100% replicable, but lends itself to actually being hyper frugal in some ways.

Sara Hey, Kara, I have a question about some of the coaching that you've done with some of your clients. So you have money coaching practice, right? So you've had clients in groups who have gone through this. What Caitlin has kind of described some of her mental blocks when it comes to budgeting, and I have my own mental blocks. What are some of like the common resistance to either creating a budget, sticking to a budget? Have you seen other clients who've had similar or different roadblocks and how have they been able to overcome that over time?

Kara Oh, for sure. I would say, you know, Caitlin's word, deprivation. I see that a lot from my clients. It feel like people think that if they sit down and they look at their money, the money itself is going to run away like you're going to leave or that.

Caitlin You're going to take it from me.

Kara Exactly. What I always tell people is, you know, money doesn't care about you. It doesn't money doesn't have a brain. And you're in control ultimately. So you can either choose to not be in control and to just kind of spend however you want, even though that is causing you anxiety. Like a lot of the people who come to me for money coaching, they are craving a budget, they're craving structure because they're feeling out of control. They know the debt is piling up. Even if they're not really checking the credit card statement. They know it's there. They know that they want to save more. They know they have this 401k. They're not utilizing the right way. And so this ignorance doesn't feel good, but they tell themselves, oh, but looking at it is actually the problem. I need to stay here. This is actually the good place. I just need to make this work better. But then as it plays out in their life, they just build more and more financial anxiety because they don't have that control. I do not advocate for budgeting the way I was budgeting when I was 25. That is no longer the case.

Caitlin Oh, that's a relief. Now we can be friends.

Kara Yeah, don't worry, Don't worry. I needed that at the time. Now it's almost ten years later and I do not live that way now. I would never ever. I call it rubber banding. So often people sit down by themselves to do their budget and they pull so tight that then they snap back a month later. Right. And they have to dieting like anything. Yeah. Yes. That yo yo dieting but with money 100%. So instead what I tell people and what I practice myself is called values based budgeting, which I'm sure you too are familiar with. But for any listeners who might not be familiar are podcast co-hosts or if I guess, or anyone on this call right now, it's nice. It's building a budget around your needs. Yes, but also around your values. So the work that I do with clients now is getting. So, for example, when I see a lot is people consistently going out to eat and loving it and then feeling frustrated that they have so many restaurant charges. And normally what the value they're practicing, there is time with loved ones. Well, that's when I get to see my sister. That's when I get to go out with my boyfriend. That's when I get to have girls night. And of course, it costs $75 because life is expensive and I'm willing to pay that money to see my friends and. Family. And so what I say is we don't have to give up restaurants. But instead of feeling out of control with this, let's start to build some structure around that. And let's also build in hangings that instead of costing you 75 a hundred bucks a pop, they cost you ten, 15 bucks a pop. And so those are those kind of like walks, picnics, movie nights at home, things like that with friends where you're still practicing that value, but they come with a much cheaper price tag.

Caitlin Yeah. So the value then is the time with friends and we've just put restaurants like shimmied that in there as the act the value. But actually underlying it is that time with friends and a certain kind of time with friends too. I mean it's sort of I think of it when I'm the most worried about money, like having a great dinner at the bar at 630 with Sara is like a way to escape it. Like, let's live this, like movie lifestyle just for this evening. And that's dangerous. I get it. But it's also works like because you're not worried while you're there. Like, if you turn that off, you could really enjoy it. It's then later, like, you know, two weeks later, when you're looking through your bills where you're like, Oh my God, I'm what do they say? Like living champagne lifestyle on a beer budget?

Kara Yeah, like, right. Yeah. Financial escapism, right? Yeah. You don't have Cardassian money, but you're acting like a Cardassian and a little bit, you know, And I think that's so interesting. And what I always tell people when it comes to that is no one wants to take joy out of your life. I don't want to take happiness and pleasure out of your life. But what I do want is to change the places that you find happiness and pleasure and also change your need for financial escapism. So let's get to the root issue of you're not getting paid enough at work, so then that's why you're going to these happy hours afterwards to blow off steam. The fundamental issue there is you don't have a job that's working for your lifestyle. We need to start looking for a new job, right? Or you're afraid to talk to your partner about money because every time you do, they get really defensive and now you feel like you've attacked them, even though you're just trying to figure out who spent $500 at Target. You know, you're just on an information seeking mission, but it somehow has become a fight. Okay. So the fundamental issue there is that your partner has a sensitivity around money. Let's figure out a way that we can talk to them in a healthy manner and find spending habits that work for both of you.

Caitlin Yeah, the emotional component here is not insignificant as we keep talking about. Again and again, I have a question for Sara right now.

Sara Oh, no.

Caitlin Kara, I need a witness. Sara has been so dismissive of budgeting. Like, I don't care what your family spends every year. Like, she is much more interested on the investing side and like, what you're doing with the excess. Just give me the number. I'm not going to piddle around with you about this. And I'm curious, Sara, is that because of your own psychological fears and challenges, but or is it just because you're so into investing like it seems like a speed bump on the way to where you really want to go?

Sara I mean, I don't think it's either one of those. I think with my approach with clients and not getting into the weeds on their budget, it comes more from recognizing the emotional triggers that that brings up for people and not wanting people to get stuck there. I think over the years, I mean, like, you know, Kara is working with clients who are trying to work through this roadblock. I'll put a pin in it and try to leapfrog over it by saying, you know, as of now, your budget is what it is. What is the amount that you're saving? And can we start that saving and investing path at the same time so we don't get stuck at, you know, stage one, create a budget because most people will be like, peace out, I'm out. I'm not I'm not doing this right. And so I kind of like leap frog to stage three, which is, you know, invest your savings, leapfrogging over, start a budget and leapfrogging some of those triggers where people will kind of shut down before they get going so that it doesn't become okay. I need to check these boxes. One, have a budget to fully fund my emergency fund. Three, right where you're kind of going through a checklist or the approach that I typically take as, okay, how many of these things can we do? At the same time, sometimes you have to go through checklist on it, right? Like credit card debt. All right. Let's just hammer it out. You know, for these reasons, you know, if there is like a real spending problem, we have to figure out. How to get through that. And sometimes the carrot can be, well, if you want to generate wealth, which you say you do, you have to save money. This is how it happens in this might change over time, like as my practice changes, but I don't want people to shut down on me because almost every person comes into my office with an overwhelming amount of guilt and shame that they don't already have all of the answers that I want, and I don't want them to get stuck in that.

Caitlin Does that like you're nodding, Kara. I have so many comments about it, but I want to hear what you what your experience is as another financial professional working in this like very murky territory with full of shame, regret, fear.

Kara Yeah, I think there's a lot of value to Sara's approach. I also think, though, it's a little bit precarious because in my opinion, from budgeting comes freedom. I really do believe that. I know a lot of people think of budgeting as. The opposite of freedom. But it's it's the power of information. And that tells me, oh, if I have $5,000 coming in and I have 400, $4,900 in expenses, that tells me that either I need to make more money or change some of my expenses so that I can be doing the saving and investing that Sara is talking about. Because for the you know, for the vast majority of Americans, only 55% of Americans are investing in the stock market. So that means it's not the majority, but 45% of Americans are not even able to do that, probably because of the way the wealth works in this country. That is a systemic problem. But then for a chunk of people, it is I can make changes in my personal life, and that's where I like to come in with people and say, let's give you the power of budgeting so that we can invest more, we can save more, we can leave a crappy job, we can stay home with the kids for three years, whatever it is that you want. And if we jump straight to the investing, I get nervous that people don't have that kind of foundation of being able to review expenses, understanding or want versus a need understanding the flexibility that they have in their own decision making.

Caitlin I hear both of you and I feel like what is so clear is that someone like Kara, you are motivated by I don't have to feel this way forever. I'm going to take control of my financial and there's no details too small for me to attack and understand and have be part of my plan for me. If Sara had told me that I needed to come up with a restaurant budget, a monthly restaurant allowance before I could invest, I still wouldn't have started because that had so much baggage with it for me. So it it does sound like there's a lot of individual. What works with any given individual either is the terrible baggage that they have from one area or the huge incentive they have. Like if it's building generational wealth like so for you care, it could have been like, God, my parents didn't have, you know, couldn't pay for my college. I am going to pay for my kid's college and like everything will flow from there versus like if someone tells me I can't eat $2 tacos, I will retreat from capitalist society forever. And so it's really needs like all approaches and at different times of our life, like I could not have had this conversation in my twenties, It would not have seemed relevant, interesting. And then, you know, later in life, obviously also having a kid, completely different things become relevant and interesting.

Sara I mean, but but Caitlin, I want to kind of piggyback off that because I think you hit on something where Kara and I have different approaches to how we communicate with our clients and kind of the journey that we want to take them down. And there are lots of different financial professionals that have different approaches, right? There are so many different people with so many different money stories and so many different issues and so many different goals that having a lot of different opinions in this space is important because we're trying to help as many people as we can, but no one person can help everybody. No one person has the magic bullet to this is how you know you achieve financial freedom or security, whatever you're going for. And so having all of the different opinions out there in the world is really, really important, right? Like across ages, across genders, across all races, ethnicities, like everything, because everyone is bringing kind of their own special sauce in the way that they communicate with clients in order to motivate that client to do the best that they can.

Kara Yeah, completely agree and.

Caitlin Not get stuck, as you say, on like one challenge that is or is not the key to building your financial future, but becomes so daunting that they it blocks any sort of forward momentum because it seems like just unachievable. And for some that might be creating a budget. For others it might be like me literally looking at what the 401k they had from work was for ten years. Like I there is something about even finding out information about that that was so intimidating to me. And so that was going to be my sticking point. Kara I'm curious, here's one thing in my own like extreme budgeting, by necessity, transition to then, you know, being more experienced in my career and making more money is that I couldn't figure out what to let into my budget after I was making a little bit more money. And, you know, you mentioned health insurance. I think we could. I'll agree that that's like a really that's a really good one to let back in after you're making some more money. But I after you go from like austerity measures to a you know, where it's almost easier because, like, the answer is no, the answer is no, I will not go. You know, meet everybody for dinner at the steakhouse, whatever. Like no, no, no. When the answer can be yes, sometimes I have found that period of my financial life even more stressful because I couldn't figure out what to say yes to what I could allow for in a more like relaxed and luxurious lifestyle versus keeping the budgeting habits so that my savings could increase. How did you navigate that?

Kara Oh my gosh, not very well. I'll be honest with you. Not very well. I do wish my partner could be on this call because he was really there. We had started dating right before I got really, really serious about paying off my debt. And then I was living hyper frugally for those first two years of our relationship. And now we're on the other side and I'm like, I make more money than him. So I'm like, I got that for you, don't worry. But making that transition was very hard because exactly what you said, the answer was no for so long. And I did learn to go without it really recalibrated my level of like what comfort is into a place of discomfort. Like for so, so long, I, I was viewing like the bare minimum as totally fine. And I mean this in a way of like, I didn't buy this new pillow. I had this awful pillow. It was awful. Half of it was just paper flat. All of the stuffing had gotten into one end of it and I couldn't get it to go down. It was so lumpy. It was awful. And I kept that pillow for years because I was like, Well, spending 899 at Target for a new pillow is unacceptable.

Caitlin Because clearly you can live with it because you have I have this argument all the time.

Sara Yeah.

Kara Yes, exactly. And I had to go through honestly, I probably should have gone to therapy to like deprogram my extreme frugal out of my brain. But I had to have serious conversations with friends. I had to be in really embarrassing positions like this. This this is embarrassing to admit, but shame is a fantastic motivator for me personally. And I remember one time, maybe about a year after I had paid off my debt and I was now making like 45 grand, which is still not very much money, but like enough. So and I was still living. I was living with my partner in my room and a roommate. So my costs were fairly low. And I got invited to this dinner party and I was in charge of bringing dessert. So I brought these three cupcakes. There were five of us there. I brought three cupcakes and I brought four chocolate chip cookies thinking, Oh, total, there's seven treats here. And everyone, everyone at the was said, you should have brought seven cupcakes. Like, what the hell is wrong with you? Everyone should get one. That's the social norm. And I. I missed that social norm card because I was like, Well, there's enough here. Or I should've brought five cupcakes because there are five people as opposed to like because a cupcake versus a cookie. Now someone had to kind of settle for the less delicious and I was like, Oh my God this is a crazy hangover from when I just wouldn't have gone at all because the expectation was that I needed to bring five cupcakes.

Caitlin Yeah. I have stuff that trips me up all the time like that, like I'll have the flu I covet and like, everyone's like, just get Instacart. And then I'm like, Yes, that's what someone does when they're I'm a solo parent. Like, that's what you do. But then I start looking at thing. I'm like 750 for a half gallon of milk. Like I cannot pay that. And then I got all up in my head about like, Well, wait a second. Like, isn't this what money is for? Isn't this what I'm working so hard for? But after living so long where that would like, the idea of Instacart just would was a no. There was no way. I don't know how to ease into it has to be blind. Like if I was doing it for someone else, if I was sending it to someone else's house because they were sick, I'd be like, yes. So somehow generosity or helping somebody else overrides it. But it's when it's for myself and it's the 799 target pillow. I'm like this I have lived for my whole life without this thing. How can I justify getting it now? That becomes very confusing to me.

Kara Yeah, and I think that's confusing for a lot of people. Like especially the depths of your frugality, the need in your life, the amount of money are now making. Those are all really personal, different experiences for all of us. But what I did find helpful was kind of what you were saying about generosity. So in 2020, right after COVID hit, one of my very good friends who was living alone and had had a health crisis in 20 right at the end of 2019, she was just coming out of it and then bam, lockdown. And she was like, I'm completely alone. My health is still kind of questionable. And then she had an issue with a family member that she couldn't go see. That family member's health was in crisis and just felt like her world was collapsing. And so I bought her groceries for a month. I was like, Absolutely, I'm sending you cash. We're going to instacart everything so you don't have to leave the house. And it was like $320 or something. And I didn't even blink about it. And that was very freeing to me. So what I started to do was I call it the Friend Emergency Fund. So now I have this savings account for when my friends are having emergencies and I want to be financially generous and it ranges for everything. I sometimes use it for gifts. One of my friends just had a baby and I sent them. I just been mowed her 25 bucks for pizza, you know. But it came out of this friend emergency account, so that helped my frugal brain say, Well, now it's organized, it has a place in my budget and I can use this money. And that began to roll into other things. You know what, Kara? It's been a really long day. You got into a fight with your partner and there's no food in the house. Do you really want to spend the next 2 hours meal prepping for the rest of the week? Or can you just go to torchy's? Can you just spend 20 bucks at Torchy's for this one meal and give yourself that grace? And just having that kind of structure, starting with loosening my spending with other people, started giving me permission to. You also treat myself with that generosity?

Caitlin Yeah, I think so much of what you're saying resonates. And I also think I'm about to experience the slippery slope where I'm also like, You know what? You know, Monday I'll be like, I'm tired. I worked and Tuesday I'm like, It was also a hard day today and so by Thursday, I'm like. Okay, I need to chop some carrots. Like, you know, but I am I hope that equilibrium sort of comes up to the surface each time, but I'm nervous about all the justifications I give myself for indulgence because like, you know, you can get really I can get into that routine pretty easily. Okay. But now that we've tackled all of Caitlin's personal. I feel like Sara hasn't shared as much. But when people are coming to you and they're like, okay, I'm ready to look at expenses, what does that look like for you? Are you immediately like restaurants cross it all out. You said values based. So just give us a sense for what that looks like, what areas people are supposed to be sort of, you know, evaluating to see where there's room.

Kara Yeah, no, there's nothing. So when someone comes to me, I have them fill out a budget spreadsheet and so we can look and see. And I asked them to do the last three months of their spending. So they come to me and they say, one in September, I spent $900 at restaurants. In October I spent 500, and in November I spent a thousand. And usually just that exercise is very eye opening for them. And they come in saying, I'm doing too much here. They they come in, I want to say 80% of the time, and they've already preselected areas they want to come back in. But for the 20% of people who don't. And just in general, I never say, well, only bad people eat at restaurants Like that's a very Dave Ramsey shaming thing, and that's not my approach. Instead, we go through every single line item of their budget, which I know is nitty gritty and a lot of people hate. But I have had a 100% success rate with people coming out of that feeling. Good feeling empowered, feeling really clear on what's happening. And as we're doing that, they're like, Yeah, you know what? I would spend on $1,000,000 a month if I could? My dog. Like, this is an area I will never cut back in and restaurants is an area I'm happy to cut back. And I was doing 500. Let's go down to 400. I think the other thing too, what people get scared of with budgeting exercises is if it's $500 on restaurants, it has to go to zero. Now it can go to 250, it can go to 300, it can go to 450. You know, it could go to 600. I worked with a client recently who is a single mom with two children in middle school. So they're somewhat independent, but also not. And food was a huge thing for her. And she had a ton of anxiety over how much she was spending. And I was like, look, we have to let this go. You're doing an amazing job as a single parent. You need to have snacks because your kids are still growing. You need to have the flexibility of picking up pizza on a Friday after a long week when you're burnt out and you need to have personal time and time. Meal prepping is not restorative because. It is not restorative. So what we did instead for her was we increased her grocery budget because I wanted her to spend some money on tools that would make cooking easier so that she didn't have a crockpot, she didn't have a food processor. And I was like, I bet if you had these things you'd be more likely to meal prep and then we can bring down the restaurant budget over time. So it's about making the investments in the area that are valuable to you based on your values. And that also makes sense for long term financial changes.

Caitlin So they bring you their expenses and you guys look together at like, these are the hotspots, these are the areas where it don't matter and you come up with a plan. And what are the areas that like here? I remember when I watch any videos you talked about, like transportation, housing, like sort of creative solutions to each of those things. If they were a bigger chunk than someone could afford or wanted it in their budget, what what can you go through what each of those sort of categories are that you have found? People can think of creative solutions that we might not have just on our own.

Kara Yeah, I always tell people the three this is I think, something that like Sara and I have in common, you know, you really don't need to nickel and dime yourself to build a solid budget. So instead of stressing out about trying to get your cable bill from $60 a month to $40 a month, it's not going to move the needle in a huge way. Whereas if you refinance your car and you can save 120 bucks a month on that loan, that's a much bigger area to focus on. So the big three areas I tell people to focus on and that I always start with is housing, transportation and food. So did your rent just go up? Okay, let's take a look around in the neighborhoods that you want to live in that make sense? So I just worked with another client who's a single mom in Las Vegas, and she was like, I can only live in certain areas because I don't have a car, so I need to be able to walk to the bus and I need to feel safe when I'm doing that. I can't have a 45 minute walk that I have to take at 10 p.m. at night and Vegas like, I'm just not going to do that.

Caitlin Yeah.

Kara And I was like, great. So that locked her into some more expensive areas and that was fine because that's life and safety and what she needed to do. So then we looked at these other three areas and it turns out for her income level, the city offers a reimbursement on if you buy a month long bus pass. So we were able to get her transportation down. So that's what I always tell people to start with. And then when I say think creatively, it's within your own personal boundaries, but also looking at what does my city offer, what does my state offer? What if I post this in a Facebook group with 100 people and I just say, here's my scenario, here's what I'm trying to change? What do you all think? What's the feedback I'm going to get from people who live different lives and think differently than I do? Maybe there's going to be a solution I haven't thought of or didn't know about in in this other person's brain, and I'm going to get that via Facebook. So creativity is a broad brush that we're going to paint with.

Caitlin I think housing we've talked about this in terms of like as we get older, like sharing housing costs and stuff and sort of bucking the trend of everyone owning their own house and living in it with one or two people for the rest of their lives figuring out how to make an impact there.

Kara You really hit on it a kind of a new. Like value point of me. I have been saving for a house for seven years. I started saving for a house when I was making 15 K a year. There was no way I could afford a house but I as like one day and just last week I had a conversation with a good friend of mine about maybe buying property together because, you know, the market's gotten so expensive so quickly and it's like sort of coming down. But when it jumps 40% in two years and then it comes down 20%, it's still up 20%. But that is something I think creativity as kind of a broad word, but just freeing yourself from these societal expectations or societal norms that just don't make sense for you. I'm a huge fan of that, like a huge, huge fan.

Caitlin I think about that with housing a lot. Like, easy for me to say. I bought my house in Austin 2006. Like it. It's another time, another space, another reality. But I think how organizing a principle it is saving for a house, it's a goal, it's tangible, It's all of these things and it's the American dream. It's it's so powerful. And I really wonder how we tell the difference between a dream fantasy that totally makes sense with our financial reality versus a lie. We've been fed that we can't get away from, and that makes us artificially unhappy if we can't attain and if that money would be better somewhere else. And I don't know the answer to it.

Kara Me either. Really, I don't think there is one answer. I think it really depends on your personal circumstances and also your personal goals. Some people want to buy a house in the woods and live there by themselves right there. I don't want to. I need to have this kind of island done to myself. I want to have an island on to myself. And other people want to have a duplex with their parents on one side so that they can, you know, raise their kids in community. And I think there is a lot of pressure to do it one way. Move out when you're 18, get a college degree, pay off any debt. If you took it out on for college, buy a house, get married, have 2.5 kids. Right. That's definitely the predominant norm. But I think the more people step out of that and the more that we just don't react to stepping out. I think I remember when I told my mom I might not ever get married and she was horrified. And that horrified, which is hilarious because she's divorced. I had like a really bad divorce and she was mayor and then a couple of years ago, because I've been with my partner eight and a half years and we're not legally married. And she was like, you know what? I don't care. I don't care. Whatever you want to do, I don't care. But she had that outsized reaction at first. I kind of think the more that you could just not react when someone says, I'm going to buy a house with the friend. Oh, that's cool. You just normalize it instead of like, what? That's crazy. What if they screw you over? Oh, my God, blah, blah, blah. Like, just kind of chillin on stuff and recognizing that newness doesn't mean badness is such a valuable thing we should be doing.

Caitlin Yeah. Any deviations from the script that we have all grown up with and have so much attached to, you know, an unknown ways, I think, you know, we're not always super conscious of how the story it feels very personal. Like I it's my dream to buy a house. Well like meanwhile you know that's a lot of people's dreams and it you know can the rest of their financial future can really be negatively impacted by it because they that money could be much more useful somewhere else. And how are we supposed to know the difference in the psychological safety maybe of of keeping that dream and having what seems like stability, but also is like a lot of money to own and maintain a house over a period of time and pay the kind of insurance and pay for trees that fall, etc..

Kara Oh my gosh. For sure. For sure.

Caitlin Okay. Will you talk about like you do you have individual clients, but you also have some programs or like courses or workbooks. Tell us what you got so that people know what kind of resources there are.

Kara So I do work with people one on one in my money coaching, but then, yeah, I have this values based budgeting workbook, which is an editable PDF you can download that's available on my website and that's eight chapters that really does do this kind of emotional and psychological digging that we have been talking about here on this podcast. It also comes with two spreadsheets. One is a 30 day spending tracker, so you can get into that nitty gritty, you can spend time tracking your spending. And then it's also a budget spreadsheet template that you can customize. So I find that to be a really helpful first step for people because the eight chapters it goes through like setting your financial goals, finding and identifying your money leaks, what you know, how many kind of just fades away from you and you're not even really aware of it. Yeah, talking through how to diversify income so that you can afford something specific. You want to go to Thailand with your girlfriend for, you know, your 40th birthdays. Okay. How are we going to pay for that? If you make four grand a month from your main job, do you want to pick up a side gig to pay specifically for the trip? Do you want to divert money from the. Okay, what's how we're doing that? So I find that to be really helpful for a lot of people. And then my focus outside of the budgeting is really on sustainable investing and sustainable spending. So we do have a course on ethical investing, ethical investing, 101 how to make money and still be a good person. And I do want to say like caveat, obviously, like there is no one perfectly ethical investment. So if you're looking for that company release, that release that expectation. But I do think there's a lot of exciting things developing around how to put your money in companies via the stock market, via real estate investing, via things like co-ops that align with your values and do have a financial return. So I also teach on that.

Caitlin Okay.

Caitlin Sara, do you poor Sara is still suffering from her cold and so is having coughing fits.

Sara I think I can say this and I just chatted it just in case I have a coughing fit breakout. But Kara, I was so curious after going through this journey and starting the business, talking to people, talking to clients, learning. Is there anything you would do differently as a 20 to 23 year old if you could go back in time? Or is there anything that you would tell yourself that's different from the way that that girl decided to do things?

Kara Oh, my gosh. Yes, so many things.

Kara I like the way I did. It worked and that's fine. Doesn't mean it was the best way to do it. I think I would have learned about investing earlier because I like I said earlier, I was really focused on just eliminating the debt. And I said, you know, I'll figure out the rest of this money world later. So I didn't even know about high yield savings accounts. I didn't know about the stock market. It would have been smart, I think, because when I was 25, before I even got into the debt payoff sprint, I had opened an IRA and put $500 into the money market account. And then I left it there for two years. Yeah, I would have loved to get that $500 out of that money market. But I also think in terms of things I would have done differently. I would have focused on trying to earn more money faster immediately out of college. I really flopped into food service. And this is not a decent food service at all. It's a dis on myself. I just couldn't get my headspace right around what I wanted to do. I was really hung up on like my job defining me. And so in the meantime I was like, Oh, wait tables. I wait tables. And then it just spiraled until I was 26. I had done nothing but wait tables or work as a caterer. And then I felt like I couldn't get a job anywhere. And I think if I had just had the confidence to understand that more money earlier and like a full time job earlier would have made my life easier. This five part time jobs side hustling was a really difficult way to try and make more money. I think if I had been more strategic and just try to find a better paying full time job, if I gotten 45 K from one job.

Caitlin Yeah. Whew.

Kara What a life I would have led. Oh, my God.

Caitlin Watch out to Dollar Tuesday.

Caitlin Okay.

Caitlin Well, that makes sense. And you're so young, so it's hard to beat. But like I, Sara and I have talked before about people that are so focused on paying off debt to, like, the sort of ignoring every other aspect of their financial future. And for people like me in their late forties, like, we got to do it all. We can't just say, you know, unless Sara says, like the credit card debt that, you know, depending on the interest rates of your debt, that to have that single focus. On the one hand it was so motivating for you. It like got you into this world that then was and you were so young that you had the years to make up for whatever you weren't putting in your IRA. And I think later in life we have it like it's not really a choice to do only debt payoff, that it's doing all things at once, which is a little bit trickier, but also doable.

Sara Yeah, I think I think that that's really good, you know, thinking about like all of the questions that people have when they're getting out of college. Right. I love what you said because it sounded like you were on a mission for the perfect like finding your life's purpose, what you were put on Earth to do, if you would kind of settled for something that maybe just, you know, just gone to work for, you know, something you wouldn't necessarily have chosen, that you would have made your life a little bit easier on your way towards finding the thing that you were meant to do.

Kara Yeah, I was on my high horse about it for sure.

Caitlin But it's also a reminder that all these things that we do that feel temporary, I'm not. I'll invest next year, you know, like right now it's too precarious. I'll. I'll do savings next year. You know, I'll stop waiting tables. I'll get a real job next year, whatever. Like, we do have a good sense of time when we're living our daily lives. And so these things that we think of are temporary can last a real long time. And then, you know, I think as regrets go in your twenties, , I feel okay about yours. I mean, I, I see it as like a very natural thing for someone in their twenties. I certainly had a bunch of crazy jobs all over the world doing crazy stuff that, like my liberal arts education didn't exactly like. It was kind of a funny set up for leading bike trips and luxury places and Italy and France. But like also are the material that not like I think my year's waiting tables or huge and understanding money, people, everything. So I think all those experiences, even if they didn't lend to your like building your financial future, are huge towards building your character and your sort of understanding later in life.

Kara Totally. I say now like I just trust people who have like worked in retail or worked in food service more that people who have never had that experience like as their yeah, it does change you fundamentally when you work like a 12 hour shift and then somebody is mean to you and you're like, I understand humans to a core you know. And so, yeah, I do think there was a lot of value in those years, but not a lot of financial value.

Caitlin Kara What would you say the one thing a woman on the verge of a financial breakthrough could do today in the realm of budgeting or the kind of things that you work in that could make a difference in sort of building her financial future.

Kara I think getting clarity around your biggest financial goals. Do you want to be investing more? Do you want to reach, you know, 50 and be able to retire early? Do you want to put your kids through college? What is the biggest thing you want to achieve? Because then you can reverse engineer from there. So that clarity is going to help you have that breakthrough.

Caitlin Yeah, and motivate and the times where it's hard to achieve it.

Sara That's awesome. I love some good reverse engineering. That's. That's perfect. Yes. And I just want to remind everyone that, well, first, thank you, Kara. This has been amazing. And for everyone listening, go and find Kara on Twitter, Instagram, her website, all of the other social places. Definitely worth a follow because she's always posting good ideas, links to really interesting articles and studies and little motivational tidbits that I think will kind of keep you interested in going down this down this path.

Caitlin Yeah, and we'll include all of those in the show notes so people can find. Just click on all the links. Thank you.

Kara Thank you for having me. This is fantastic.

Caitlin We got real deep.

Kara We did get really deep.

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Caitlin Hey, before we go, thank you so much to Kelly West, who co-produced and edited this episode.

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Sara If your partner is making you ask for money, giving you an allowance are not letting you know about family income. This could be economic abuse.

Sara Learn more at thehotline.org, or call one 800 799 safe.

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Devmo I know the first thing you notice is that I'm covered in gold, the flick of the wrist it could turn a hot bitch cold, to get what you want in life girl you gotta be bold. Now Imma die rich, and I know...

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