Today’s Podcast is featuring Whitney Hansen, a personal finance coach who works with people from all over the world. She specializes in everything from managing your everyday expenses to clearing a large debt that may be weighing heavy on your shoulders.
One of the problems you might have if you own a business is you don’t know if you’re going to be financially independent and be able to leave your business. This episode will help you figure out what you need to be doing to get past this.
Whitney also offers very informative courses concerning all of these situations, which you can find on her website: http://whitneyhansen.com/
Some things you will learn from this episode:
- The importance of managing your everyday spending money.
- How to manage finances sufficiently and easily.
- Tips and ideas on how to pay off debt.
- Analyzing Spending Habits and correcting them in your favor.
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick and you are at The Sustainable Business.
Today, our guest is Whitney Hansen and our topic today is going to be personal finance. Whitney is just a very interesting young lady. I hope she doesn’t mind saying young lady. I’m old and she’s definitely younger than I so I can say that. She works as a personal finance coach. She’s an entrepreneur. She’s got lean startup methodologies per courses that she sell. She works with people all over the world. All kind of cool things.
And instead of listening to me talk about Whitney, let’s bring her in and let her talk for herself.
Hey, Whitney, how are you today.
Whitney: I’m so good, Josh. Thank you so much for having me.
Josh: And thanks so much for being on the show. This is a topic that we normally don’t cover because we’re already working with people who have created businesses and we’re trying to help them go from a successful to sustainable business. But there’s one thing that’s true about everybody that has a business, that has employees, is employees need to figure out a way to get the financial stability themselves. And if you, as an entrepreneur, know something about that or a business owner knows something about that you’re likely to be more useful to helping your employees get to the same goal you probably want to go to. Does that make sense?
Whitney: It makes perfect sense. When you’re stressed about money, it trickles over to all areas of your life. And if you are managing people that are consistently stressed about money, it’s definitely going to impact your bottom line as a business owner as well.
Josh: If I own a business and I’ve got employees who are making $30,000, $40,000 or maybe $50,000 a year, what can I do to help them be responsible around money?
Whitney: Oh, it’s such a good question. I think the first thing you can do is start to bring in professionals from your area that can talk about specific topics that will be impactful for your employees. I think one of the best places to start is teaching a basic budgeting workshop, so having somebody teach maybe an hour long for your employees. I don’t think they need to be required to be there. I think it’s a nice value add. But giving them the skills that they can start to learn how to manage their own money and not stress as much about that later. I think that’s a good place to start is to give them the education they need.
Josh: Are you familiar with the principle of open book management?
Whitney: I don’t think I am, no.
Josh: Okay. Well, essentially, what you’re talking about fits in perfectly with open book management. What open book management is you share the numbers in your business with all your employees.
Whitney: Oh, right. Yes.
Josh: Something that I’ve been advocating for years. I think it’s idiotic not to do that. And part of the process you often see in an open book management company is budgeting. Would it make sense that if you have an open book management company, that you talk about business budgeting but then you try to relate that to personal budgeting?
Whitney: Yeah, I definitely a deadly think you could. From what I’ve seen with some of the open book management and the different levels of transparency is sometimes, depending on the size of the company, it can be very department specific. Maybe the information you share is more geared for that specific department. But I think it makes sense.
I personally would separate the two because I think it shows a different level of personal investment. And to me as, an employee, when I see that my employer is giving me access to these workshops and not just trying to key it into business as usual, I feel like they’re investing more in me as a human. And to me that’s more meaningful. But I think, start where you are. If resource is an issue, sure, combine the two. Absolutely, that’s fine.
Josh: When you work with your customers, clients or whatever you call them, where do you start and what do you do?
Whitney: This is really nerdy, Josh. I think you’re going to love it.
I start with having them print off the past 30 days of their statement, of their bank account or their credit card, depending on which one they use. Sometimes it’s both. And I have them think through three areas that they tend to overspend on. For most people, eating out, coffee, some form of entertainment but it’s unique to you.
And then, line by line, you go through with highlighters and you group each of those transactions. And the beauty of it is, when you’re manually doing this process, you can immediately see, “This is where my money is going. Oh my gosh.” I did this with a group of people one time and a guy looked up and was like, “Oh, my gosh.” I’m like, “What’s up? What’s going on?” He’s like, “I spent $400 on eating out.” I’m like, “Okay, is that good or bad?” “Well, I only make $800 a month.” So immediately, I’m like, “Well that could be problematic.”
But when you see that, when they’re physically seeing the line items, it’s a different level of connection in your brain to accountability. And then, usually, they can start making adjustments as needed. But I like that approach better than like a mint.com where it just automatically groups all your transactions because it kind of dehumanizes that a little bit so that’s where I start.
Josh: In your case, you’re working with somebody who’s making $800 a month, that’s not a livable wage.
Whitney: No. And that specific scenario is a college student that I worked with. I teach personal finance at college as well.
Josh: Oh, okay.
Whitney: That was that circumstance.
Whitney: If it were a paid coaching class, I actually would not be working with them because I feel that’s a disservice at that income level.
Josh: So you don’t say, “Look, here’s how you go about getting government support if you’re not making enough money.”
Whitney: Typically, I don’t. No. Most of the people that I work with, as coaching clients, are typically in a level where they have the income. They can survive. They just need to start to rethink some of their purchasing habits.
Josh: It looks to me like you work with people who are in pretty significant debt. How do you help these folks get out of debt?
Whitney: Yeah, it’s such a good question. Getting out of debt is not hard. It’s actually very easy. But the steps to getting out of debt is very difficult because we’re trying to change our behaviors that have been ingrained for years
And so, what I do with people is I usually start with the bank statement exercise. We go through that. And then we take those numbers and we start the basic budget. What’s your monthly income? What are your expenses every month? If you have any leftover money, can we reallocate that towards your debt. And so, for most people, it’s just a simple reallocation. But it’s that awareness of their spending habits that allows them to pay off debt much more quickly. I don’t typically run into circumstances where refinancing or consolidation is the best route because a lot of people pay off debt pretty quickly when they’re working with me. That’s one of my big goals.
Josh: So if somebody has $200,000 in debt, now I’m assuming that $200,000 does not include their home mortgage, or does it?
Whitney: It usually doesn’t.
Josh: So $200,000 in debt is a huge number. How long does it take people to pay that off?
Whitney: You know, I haven’t worked with anybody with $200,000 of debt yet. I know that day is coming.
Josh: Oh, okay.
Whitney: It’s a coming. I know it is.
Whitney: Most of the time it’s $50,000 to $60,000 tends to about the average debt load, not including mortgage, of people I worked with.
Josh: Okay, so how long would it take them to pay off $50,000 or $60,000?
Whitney: If they have a decent income– so that’s where it starts, right?
Whitney: If they have a decent income and they have a disposable income as well, and they’re aggressive and willing to work hard or side hustle, get a part time job, to pay off the debt, they can pay that off within three to four years so it can be really quick.
Josh: One of the things you’ve been talking about or, at least, we talked about a little bit beforehand was taking a hobby and turning it into a business. Do you help people do that?
Whitney: I do a little bit because I’m super passionate about that. I think that’s a fun way to learn a lot really quickly and make a little extra cash.
Josh: How do you go about doing that? I mean, if you’re coaching somebody and say, “Okay, you need to pay off this debt and you’re probably not going to make a whole lot more money at your job but you do have this hobby over here that could be turned into some cash.” What would somebody do if that was in fact what you’re recommending?
Whitney: It depends on what the hobby might be, depending on what types of channels you would use to get out into the market place. But let’s say it’s a hobby of I like to make custom figurines that are of comic book people and interesting things like that. This has happened before. If that’s the case, if that’s what you’re making is really unique kind of quirky, weird little figurines, where do those people hang out that would potentially buy your figurines? Where are they hanging out? Is it online? Is it in person? Do you have to go to Comic-Con? So thinking through all of those different channels of where your ideal customer might hang out. And then just taking a few of those and trying to sell them.
A lot of the stuff, we think side hustles are so hard to start but it just takes a little bit of grit. You just have to put yourself out there and ask for that sell and see how it goes, in most cases. That’s probably where I would start, is just encouraging them to get out there and try to sell and see what people say.
Josh: Do you walk people step by step through these side hustle businesses or do you just say, “You know, you’ve got these figurines, you should go out and figure out how to sell them”?
Whitney: It really depends on the level of of coaching package that they are working with me on. If it’s a basic financial get-you-out-of-debt kind of plan, I will help guide them but that’s not the core of our conversation. Most of our conversations are more geared on the budgeting side and the expenses side.
If they are very interested in entrepreneurship, absolutely, I’ll hold their hand. I will show them, “This is what I would do if I were you. Let’s create some experiments and see how they pan out.”
Josh: Going back to the budgeting process and personal finance, are you familiar with the envelope system?
Whitney: I am. I like the envelope system.
Josh: And do you you ask your customers to use them?
Whitney: It depends on how comfortable they are with the envelope system. What I found is a lot of people don’t like to carry cash. It stresses them out.
Josh: First of all, can you explain what the envelope system is?
Josh: Because I bet that we have some listeners who don’t know what it is.
Whitney: Good point, Josh. Good point.
The envelope system is essentially taking every line item of your budget, say, it’s eating out, gas in your car, it’s groceries, and writing groceries on an envelope, eating out on another envelope. Whatever that budgeted amount was for, like let’s say groceries, you’re budgeting $250. So if you’re budgeting that much, you would take cash out of your account, put it into that envelope and that’s all you can spend for that month. And so, it kind of works because it’s a checks and balance. You can see when you’re getting a little low on cash. It works for that reason but it depends on if you’re comfortable carrying cash or not.
Josh: Could you do the same sort of thing with a credit card or checking?
Whitney: You can. One of my good friends, Jen Hemphill, she has a podcast herself. She is a big fan of the virtual envelope system which is essentially exactly what you’re describing. For most people, when I explain that to them and I tell them, “We can set this up.” They just look at it and say, “I’ll just track my expenses. That’s just easier.”
For a lot of people, that’s what they would prefer. It’s just, “I’ll write it down in a notebook. I don’t care. Just don’t make me carry multiple cards because it gets confusing.”
Josh: One of my friends is a guy named Mike Michalowicz who is the author of Profit First. Mike has taken the personal envelope system and applied it to small businesses. And if you’re listening and you say, “Oh, well, yeah, I know about the envelope system. That’s for individuals.” Think about reading Profit First or listening to Mike’s podcast or listening to his audio book. He does a really good job of explaining how to use the envelope system in your business. Essentially, it comes down to “you pay yourself first” which has always made some sense to me, except when I first got into business but we won’t get into that argument I had with my father which went on for years and years and years. And as it turns out, he was right and I was wrong.
Whitney: Don’t you hate it when that happens?
Josh: Not especially but– you know, I was talking with somebody earlier today about this, is that working for your parent is very, very difficult because you not only have work relationship dynamics, you have family dynamics also. That was probably part of that.
Let’s talk about your courses because a lot of the stuff that you’re talking about, people probably can do with a self-study course, I would assume.
Josh: Explain to me how your courses work and why that might be a good option for somebody who says, “I really want to get control of my personal finances. I know it’s not where it should be but I would like to see it at some place much better.”
Whitney: Yeah, so break up my courses into a couple of different options. I have a ton of free content that are also free, really quick 15- to 20-minute courses, that people can go through and get some good trainings specific to their area. If you want to learn about boosting your credit score, I’ve got a course on that. If you want to learn about paying off debt really quickly and that’s your focus area, there is a quick workshop on that as well. Those are free courses.
Some of my paid courses are specific to values-based budgeting, so spending money on what you truly care about and not just all the other stuff and then feeling unfulfilled with your financial life. Most of that comes from not spending in the areas that are important to you. I have a course on budgeting. I’ve got a course on more encompassing of paying off debt and building up your financial life. I have got the budgeting course. It’s all across the board. Basically, any area of personal finance that you want to work on, excluding side hustling, I have a course on.
Josh: You should put a course together on the side hustle.
Whitney: I definitely have heard that.
Josh: Yeah, you should.
What is values-based budgeting? I mean, that sounds interesting.
Whitney: Yeah. Let’s go take like a quick example, Josh. What are like three areas of your life that are truly valuable to you or that you hold to the most value?
Josh: Simplicity, personal responsibility and rights and respects. Those are my three biggest personal values.
Whitney: Ooh, I like it.
If you had to break that down into spending habits or things that you would invest in, what kinds of things might you invest in that would be unique to those specific values?
Josh: Probably more what I wouldn’t invest in versus what I would invest in.
Whitney: I like it.
Josh: I’m a big fan of electronic toys but they don’t really help my values much but I still spend too much money on electronic toys. It used to be on CDs but now that Spotify, Deezer, Apple Music is out there, there’s very little reason for me to actually buy music that lives in my house.
Whitney: I get that. I absolutely get that. So, in that example, if you’re looking at your spending habits and you’re saying that, “Simplicity is a big one. Personal responsibility–” and I don’t recall your first one, but if those are your your primary values and you’re looking at your transactions, do your spending habits align with what you say you value? Let’s say one of your values was health, if you say health is very important to me and we’re looking through your spending habits. And every single, you’re going to Jack-in-the-Box. That’s not quite in line with what your overall life vision is, so let’s start to reallocate and get you spending on what you care about which, in this case, is health.
Josh: That assumes that people know what their values are. How do you help people figure out their values in the first place?
Whitney: Oh, it’s actually super easy. When you look at what their spending habits are– for you, you mentioned that you liked to buy gadgets and cool, little, unique things. If that’s the case, if that’s where you’re spending a big chunk of change on, that likely is a value for you. Some form of entertainment. Maybe it’s escapism. Whatever that might be, that is important to you.
And so, we can look at their spending habits and if I see Monday through Friday you’re going out for drinks with your friends every single night you probably value friendship and networking and social time. If you were not spending on social time, it would make you feel a little unfulfilled. You wouldn’t be very happy with your life. You have to build into your budget those things that are really truly important to you.
Josh: In that particular case, we’ll use that as an example because I think it’s a good one. You’re going out with your friends. You’re having drinks every night and you’re spending a lot of money on that. Would you ask people, “What other ways could you get the same result without going out and having drinks every night with your friends?”
Whitney: Yeah. Yeah, definitely. If their goal is to pay off debt more quickly or they’re trying to be very aggressive with their budget in their financial life, absolutely. Can you grab a cheaper cup of coffee? Can you hit happy hour instead? Can you invite them over to your house? It’s little, tiny tweaks that still give you that same result which is the social time without the bigger ding to your budget. Yeah, absolutely.
Josh: I’m going to make a suggestion to you because values is one of the five areas of sustainability that we talk about all the time with our clients. And I would encourage you to do an exercise that’s outside of money about what values are. And then say, “How are you manifesting these values with your financial life versus looking at–” because a lot of times we spend money on things that really aren’t of value. And if we look at what our values are you’d say, “What you’re doing there really isn’t supporting your values in a manner that they should be supported in.”
Whitney: Right. Yeah. No, that’s great. And I will definitely check into that a little bit more too. I think that’s a great suggestion.
Josh: Yeah. In my opinion, too many of us just kind of go through life and we don’t live values-led lives.
Whitney: We don’t.
Josh: So when you figure out what your top five values are and you start living those top five values, you find that not many of them are money based. Like personal responsibility, there’s nothing around personal responsibility that causes me to spend money. Rights and respect, there’s really nothing around that that causes me to spend money except for my philanthropic activities.
Whitney: That’s true. That’s true.
Josh: A lot of times we haven’t really thought through what our personal values are and how our personal values should manifest itself in our money life.
Whitney: Yeah. Oh, you’re spot on.
Josh: So, to me, it makes a lot of sense that I would want to really focus on that area. And I’m going to encourage you to do that. Whitney, we are just about out of time for our podcast.
Whitney: It flies when you’re having fun, Josh. Darn it.
Josh: Yeah, it really does. I’m fascinated with what you do.
Whitney: Thank you.
Josh: And I’m hoping that some of our listeners are fascinated with what you do also. How would they find you if they were looking for you?
Whitney: Yeah. It’s pretty easy. The best place to go is WhitneyHansen.com and it’s H-A-N-S-E-N. And from there, you can get access to courses, to free blog posts resources and my podcast as well.
Josh: Cool. So that’s WhitneyHansen.com. And if they wanted to email you, I assume, or contact you, there’s a “contact me” button some place on your website?
Whitney: Correct. Yup, exactly.
Josh: In fact, I know there is because I looked at it yesterday so.
Whitney: Good. It’s still there.
Josh: I know that’s true.
I also have an offer for you. It’s called the Financial Freedom Project. It’s designed for private business owners. It’s to get you to the point where you have financial freedom from your business. It doesn’t mean you’re leaving your business but it means that you’ve achieved financial freedom for your business.
To get my 45-minute CD about the Financial Freedom Project, it’s really easy. You just take out your smartphone and you text the word RETIRE1 to 44222. And you do not do this while you’re driving, especially when I’m on my bike. Don’t do this when you’re driving but take out your smartphone, text the word RETIRE1 to 44222. You’ll get a link. You give us your name and your address. I’ll mail you a physical CD which you can play in your car. And if you happen to have one of those newfangled cars where there is no CD player, just send me an email and I will send you an audio file with that in there. My email address is Jpatrick@stage2planning.com and that’s the number 2 – Jpatrick@stage2planning.com.
You’re at the Sustainable Business. Thanks a lot for stopping by today. I hope to see you back here really soon.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at firstname.lastname@example.org.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.