Why You Feel Broke and How to Manage Your Cash Flow Effectively

Do you truly lack the money you need, or does it just feel that way? On today's episode, we're going to dive into reasons why it may just be a feeling and not a reality. You're listening to the Wealthy After 40 podcast, helping you overcome financial challenges by learning to be your best financial advisor.   So today's question, do you truly lack the money you need or does it just feel that way? I've had several clients approach me and say, I don't have enough money and I need your help. So the first client, she came to me and she said, I don't have enough money. I don't think I should have retired. Now. I don't know if my husband will retire in two years, like we planned. I just, it's, I don't have enough money. And if this was true thinking feelings, right. And so if you know me, you've been here for a while, you know that I am all about clarity. And so first session, we take clients into the clarity and understanding. Answering that question, did she have enough money? So before I go on with her story, I want to share another client. She came to me. Same thing. I don't have enough money. I'm shuffling from my bank accounts to my credit card to back again, and I have all these overdraft fees. Really very similar situations, but they identified different problems. And ultimately, they had the same issue that needed to be solved. So I'm going to ask you, does it feel like you're constantly shuffling your money from account to account to cover the bills? Is this just a perception or is this reality? So a lot of times with money, it is very emotional. We have a lot of feelings around it. And so within that frame, of, you know, filling all the fills, we try to find the problem and trying to find the solution. It is within these emotions that our financial decisions, our financial judgment, can be very clouded because we are thinking more emotionally than practically. So, as my clients came to me, and I began working with them, I lay it out on the spreadsheet, and if you have not downloaded the financial clarity checkup, this is the same exact spreadsheet I worked with my clients. And by doing so, hopefully you'll be able to find if yours is perception or reality. So completing that, I identified with my client and I said, you have more than enough money. And she says, well, then why does it feel like I don't have enough money? So I said, all right, what are you doing? What do things look like? Where's your money going? How are you paying bills? You know, asking all of the logical, practical questions. So her and her husband, she was receiving a pension check. He was receiving a paycheck. Their money was going into a money market account to take advantage of the high interest earnings. Great. I don't discount that. However, with that move, okay, before I share a money market account, you cannot make any payments from, you cannot use a debit card out of it. It is just a savings account. So if she's receiving all of her money into this, she has no way to pay her bills. And so her expression of when the mortgages due or when these other bills come due, I look at my bank account and I don't have any money. You're money is not going there. Same with the other client. She was sharing, you know, I have many accounts. She was taking advantage of a bank account that her paycheck would get there sooner. There are several of those out there. Not saying that's wrong in any way, but with that, she had set herself on automatic pay. Not in the account where her paycheck was going to. So the same issue, the same problem. And they both were making enough money, but they were lacking a money management system, also known as a cashflow system. So what is a cashflow management system? Okay. So we create a budget and people are like, okay, good. I'm good to go. There's a next step. The next step is to create a system that flows with your plan. So where you're paying bills from is where your income should be coming in. Where your spending is should be separate from your bills, just to support the flow and the ease. So, cash flow management is something that I don't think is talked about enough you know, shared enough. In fact, I really didn't learn about it for a very, very long time, which would have freed up so much more of my time. So, when I say the question, why does a money management system matter? That is one of the things. It will free up the time you are spending with your money. It's not saying that you won't spend time, but it will free you time. And what complaint do we hear from people more than anything right now? I don't have enough time, right? I can't get things done in the day. So creating a cash flow system that can support you will free up the money or free up the time, excuse me, but it will also save you money. Remember back to my client, she had her automatic pay for bills coming out of a different account than her income was coming in. And so automation for the bills was great, right? No money was there, she got into trouble with overdraft fees. So having a cash flow system set up will save you money. It will save you money. And on the flip side of that, if your account for savings, like my other client, is set up properly, you will be earning money. You will be saving money. It will be working for you. Doing all of this can save you from decision fatigue. So my client who is like, I check my bank account when the bills are due, there's not enough money there, then I've got to move it over and she's thinking, how much do I move over? Do I need all of it? Do I have enough of it? What about the other things? All of this thought process is going on and the decision making power is dwindling, right? We get tired from all the number of decisions we have to make in a day. So how can you create your own money management system? So today I'm going to share a key element of my power of three framework to help you succeed in planning and managing your money. The success from NIMS, this comes from being built upon a plan, a money plan, a spending plan, a budget, right? Whatever you want to call it. You need to have that first before you create a cash flow management system. If you are thinking, I don't know how to make a budget, I've never been successful at a budget, I need help with a budget, you are in luck. I am releasing a pop up podcast, which is coming soon. Is a three part podcast episode series called the budget breakthrough, where I will walk you through the first part of this framework of my power of three and help you create a very simple budget. And within that budget, I will identify the three pieces we are also going to talk about today and the money management. So go check out the link in the show notes, get yourself registered The first episode drops July 9th. They will release one a day for three days. You will have seven days to listen and find your budget breakthrough. Then you can come back to this episode and figure out how that plan fits in with this. For you, two parts of my power of three warm framework, and you are well on your way to financial success. All right. So my cashflow success method, which is the solution that I gave both of those clients to be able to quit feeling like they were shuffling their money, quit feeling like they had lack of money. Both situations had more than enough money. They were easily saving 500 a month or more. They just didn't have it in a flow system that made sense, that, you know, didn't lean into the scarcity issue. So, as I said, what you're going to do is make sure your income is coming into the account where you are either automatically paying your bills from, where you manually pay your bills from, but where you are paying bills needs to be the same bank account that your income is coming into. That right there takes the process of a way of worrying if you have enough money for bills, if you need to move some in there, it's all thought out in that situation. Then your next success is to take your spending money out of your bills account. So I worked with a client recently, and after helping her set up the Power of Three framework, We got that all set up. She says, I says, how is it working? And she said, Oh my gosh, moving my spending money out of my bills account has made such a big difference. Before that I would look at my account, go, I've got plenty of money. I'm just going to go buy that. Not remembering she had the 20 or so bills that needed to come out before payday. So again, it removes that decision. That figuring process by moving it out into a spending account. And then you truly know how much you have available. This is going to be for things like groceries and fuel and eating out and entertainment and all of those things that you do regularly. There, you know, you're wanting to buy something on Amazon. Give it a look and look at that count. You're not going to have any bills come out of there. That is a true number that you can use to move you forward. So the final step is to do, like my other client did, is take advantage of a higher yield savings account. So whether it's a true HYSA or it is a money market account, but you're going to move the extra money. Into that savings account, the money that you don't need for bills, the money that you don't need for spending is your extra money for savings. Having that in a different account creates the ability to start seeing your savings. Start building your towards your goals and start growing and the advantage of a high yield savings account is that your money is working for you. It is working hard. It is earning and it is growing. So if you are feeling like you don't have enough money or you spend a lot of time transferring money from here to there, you're probably lacking an efficient cash flow system. Like I said, listen to these steps. implement them see if that can help support you. If you're feeling overwhelmed with this information, I invite you to join me for my four week financial foundations intensive, where we cover the first two parts of that framework to build a budget, get it implemented with a cashflow system, and I can let you know what that third is that we do in my long term program. But being able to create a cashflow system. Lessens your decision fatigue, lessens your financial stress, saves you time, helps you be able to start progressing and moving towards the goals that are going to mean something in your future. So, I hope we have answered the question today. Is your lack of money perception or reality? Again, like I shared earlier, if you're curious, run, grab my Financial Clarity Checkup. That right there will help you answer that question first and foremost, and then to quit feeling like you're lacking, set up and create your cash flow management system. Till next week.