Today Josh speaks with Jennifer Hemphill. Jennifer is a entrepreneur, mentor and money coach. She also has her own podcast, which you can find HERE.
This episode is focused on financial myths – Beliefs a lot of us have, which could be fatal to how we view and deal with money, whether it is our personal finances or our business finances. Jennifer helps us bust some of these myths.
Some of the things you will learn today:
- Getting to the root of your financial problems
- Money conversations and how to approach them
- How childhood can affect your attitude towards finances
- Budgeting / planning your money effectively (Whether you’re a business owner, notorious spender, etc)
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’re at The Sustainable Business podcast.
Our guest today is Jennifer Hemphill. We’re going to be talking about money myths today. Jennifer is a Latina. She works with military folks a lot. And we’re going to find out some money myths that she thinks are true. And hopefully I’ll agree. Otherwise, we have to argue about it.
Jennifer: That’s completely okay.
Josh: So instead of me wandering on round and round, which I have this bad habit of doing, we’ll bring Jen in.
Hey, Jen. How are you today?
Jennifer: I’m doing good. Thanks so much for having me, Josh. It’s a pleasure being here.
Josh: So let’s start off with talking about your first money myth I’m seeing which is “making more money will solve your financial problems.” Isn’t that true? I mean, everyone tells me it’s true.
Jennifer: It seems like it would help. Making more money can help but really you need to get more to the root of what’s causing the financial problems. You have to assess, let’s say, if you’re an impulse spender, why you’re impulse spending – because no matter how much more money you’re making that impulse spending is going to continue if you don’t get to the root of the problem. So why is that happening? Is that stress? Is that your surroundings? What is going on in your life that’s causing you to impulse spend, for example.
So, you have to get to the root of that financial issue. Or maybe it’s your money talk– money talk is very taboo and we don’t like to talk about money. And specially in a relationship, it can be a very stressful conversation, depending on the couple. So there’s different things you have to assess what the root of the the financial problem is. Is it a lack of communication? Maybe one’s a spender, one’s a saver. That’s what’s typical in a a relationship and they’re not having that money conversation. That’s going to cause some issues in terms of making financial decisions and so forth. So you really have to understand what the root of the problem is – what’s causing that because no matter how much more money you make, it’s not going to solve it.
Josh: So let’s go back to that we’re having– I mean, I can see why people don’t want to have conversations around money because if one is a spender and one is a saver, that’s going to be a guaranteed argument.
Josh: So why would I want to have that conversation and have an argument?
Jennifer: Well, with money conversations, it doesn’t have to be about the money, granted you have to get there. But you really need to get to know each other as a couple, as an individual, in terms of your money stories. So how did you grow up around money? Maybe you grew up around money where you heard a lot of “We can’t afford this. We don’t have the money.” So those stories that you grew up around with, those stories that you form, in turn, really affect your relationship with money, affect how you see money, affect how you feel money which, in turn, affects how you manage and the decisions that you make around money.
Josh: Okay. So I’m still back at the point where I’ve got one spouse and I’m assuming this is, you know, a committed relationship who is kind of a spendthrift and the other one is kind of a saver. And I don’t really quite see where that’s going to help with getting any change made. It seems to like we’re going to have this intractable argument which probably, more often than not, ends up in a divorce.
Jennifer: So, really, it’s also as well, besides getting to know the money is understanding each other as an individual and how you grew up. You also have to figure out, “Do you have the same common goals?” Maybe you differ in that. Maybe one’s image of retirement and what that looks like might be different from the other one’s. So it’s understanding– and that’s why it’s important to talk about it because you have to understand, “Are you both really aiming at the same goals? Do they look alike? Or are they different? And if they are, how so?” It doesn’t have to be about who’s spending more, who’s spending less. But really, the bigger picture of your finances.
And then, from there, if you understand those goals and if they are aligned, if you are having the same goal or very similar goals, then you are going to be able to work easier on getting to because you agree on the goal. So if you agree on the goal, then you work backwards, “How do you get to that? How do you achieve? What actions do you take?” And from there, you’re going to have an easier time. Of course, there’s personality differences.
Josh: It sounds to me like you should be having these arguments before you get into a committed relationship and not afterwards.
Jennifer: That’s ideally. Absolutely. But that doesn’t happen.
Josh: Well, it seems to me that if you’re having this sort of disagreement, after you’re in a committed relationship, you ought to be in therapy – not just having conversation with each other.
Jennifer: Yup, absolutely. Absolutely.
You see, ideally, of course, before you get married, you should be having that conversation. But sometimes I don’t think we even know to do that because it’s not talked about enough. The budgeting is talked about. Saving for retirement is getting more known. But in terms of having that money talk, before the marriage, I think, needs to be emphasized more, for sure.
Josh: Let’s take a little pivot and let’s move to being an owner of a private business. And let’s say you’re a private business owner who likes to spend money. What is the danger with that?
Jennifer: It’s not a danger but what you need to be careful of is– so, it’s a private business owners that likes to spend money. So it’s really having clarity on (1) your financial situation at home and having clarity on the financial situation in your business.
So what does that mean? So you need to know in tangible numbers. In terms of your of personal finances, what does it look like? Do you need some of your business income to support what you need to do at home? Like the monthly bills. Let’s say that’s what you rely on.
Josh: If I own a business, I’m going to need income from my business to have a personal lifestyle. I mean, that’s– you know–
Jennifer: Right. It all depends.
Josh: That would never be a question. It’s just a fact.
Jennifer: Right, so you have to know what that tangible number is. And then, if you like to spend, you can build that in to your budget. So when you spend, what does that mean? Like, you like to spend. What kind of things do you like to spend on? What does that look like – in tangible numbers and built that in to your plan and to your budget. So therefore, you know how much money you’re needing so it doesn’t interfere with your expenses – your other expenses, your bills, your mortgage – all those other things. So it’s really about building it into your plan.
Josh: So you keep talking about a budget. Why do we need a budget?
Jennifer: Well, why we need a budget. A budget’s really a plan for your money. And it’s really to help you plan out.
I’m a big believer in mapping those dollars to the penny. It’s because if we don’t map out the money that we’re making and where it’s going out, it’s going to disappear. And if we see the money and it doesn’t have a plan, it disappears.
I’m sure you’ve heard before people talk about, “Well, I’ve made this money. Where did it go?” So if you have a budget, if you have a plant to map out where those dollars go, it helps you manage your money. It helps you make sure that you stay in the parameters, if you will, to be able to have that money to put away for wealth, for the vacations, for those things that you like to do aside from the paying the mortgage and paying the bills.
Josh: So it seems to me that having a budget feels like a punishment.
Jennifer: A lot of people look at it that way where it’s restrictive but it’s a plan. So the numbers are numbers on the budget.
Josh: But it still feels like a punishment.
Jennifer: Well, yeah, if you look at it. But it’s all how you perceive it.
Josh: Okay. So how can I perceive it as not a punishment?
Jennifer: If you look at it as your plan for your money.
Josh: But you’re still not answering why it’s not a punishment. And I’m sorry but I’m going to keep pushing.
Jennifer: Oh. No, you’re good. And I’m getting there.
Josh: I’m going to keep pushing back until you answer this.
Jennifer: You’re good. You’re good.
So basically it’s not a punishment because you’re in control of your money. And the way to be in control, and in order to continue to be in control of your money, you have to tell it what to do. And the budget is helping you map out – tell it what to do.
So if you want to splurge, put that in the budget. Is that a punishment? Let’s say, you’re a spender and you look at your money – the money coming in and the money going out, and you have that money to splurge. You spend it as you will. That’s not a punishment. It’s about taking control and choosing where that money goes to.
Josh: Okay. I have yet to meet a spender who would not see a budget as a punishment.
Now, if you’re a saver, a budget is something you’re going do. I’ll give you that. And there’s no problem with savers. And, frankly, you know, savers don’t need a lot of money advice because they’re already saving, and they budget, and they’re , you know, anal retentive about how they live their financial life – or at least that’s my viewpoint.
But a spender is not. A spender is going to say, “You’re restricting me. I don’t care if you tell me to budget for a splurge. You’re still restricting me.”
Jennifer: Like I said, it’s all a mindset, as a perception.
Josh: So how do you change the mindset?
Jennifer: It takes some time.
Josh: By the way, for business owners who are listening to this podcast, you’re probably thinking, “We’re talking about personal finance. This has nothing to do with me.” All the stuff we’re talking about from the personal point of view is also true in your business.
Josh: There is one difference between a business budget and a personal budget. And that difference is, in your business, other people are spending your money so you better budget for how they spend your money. In your personal life, you’re budgeting how you spend your money and you might see that as a punishment. And so, either way– you know, I’ve seen business owners who are short-term business owners because they spend too much money in dumb places. I’ve been known to do that once or twice myself so.
Jennifer: We’ve all done this.
Jennifer: We’re all guilty.
Josh: So the point I’m trying to get to here is, “Okay, if I’m a spender and I resist budgeting, I need to have a mindset change.” So Jen, how do we do that?
Jennifer: It goes to– and I’m going to go back to the money stories. So you have to really look at how you grew up around money because I know. Personally, I grew up around hearing a lot of, “We don’t have the money.” So that, in turn, affected how I perceive money in terms of I had a scarcity mindset for a long time. So it’s about knowing how you grew up and are you repeating that cycle? So it’s knowing that, surrounding yourself with like-minded individuals.
Josh: What do you mean by like-minded individuals?
Jennifer: Like-minded individuals – meaning, are you surrounding yourself with people that have like a broke-minded mindset? Or, are you surrounding yourself with individuals that – especially in business, that are very motivated, have big aspirations to do well with business, to grow their business? So who are you surrounding yourself with?
So it’s a matter of looking back at what you grew up around with. Are you repeating that cycle? If you are, you can change those things. You know, I’m going to get a little woowoo. I’m not too woowoo but there’s affirmations. There’s books. There’s podcasts like this that if you– it’s basically what you put in your mind is what you get out.
So it’s important to surround yourself with like-minded people. Listen to whether podcast if that’s– obviously, you’re listening to this, so a podcast is a way to go. Reading good material – positive and inspirational material. And that will change. And it’s a matter of what you want your life to look in the future as well and having that clarity and that vision of what that is and why you want that.
Josh: Okay. So you just clicked on something. So when you get into the why you want that, that’s been my experience of how I change behaviors, I get a stronger why.
Jennifer: Absolutely. The why that makes you cry.
Josh: So when you’re going into why’s, how should somebody do that?
Jennifer: So when you think of why’s– I always thought I had a why. So I thought my why was my kids, my husband – my family which that is a part of your why. But I think what people need to do is get really detailed and writing it down. I think there’s a lot of power in putting that pen to the paper and writing down that why.
So writing down, yes, let’s say, in the instance of kids, you’re doing this because your kids are important. But why? What will that do? Maybe it allows you to set a good example for them and so forth. So you need to get into the details, not just general information of “For my kids, for my husband, for my family, this is my why”. It gets into more details as to why. What about that?
Josh: So how many levels deep should you go on your why before you get to the right one?
Jennifer: It depends on the person. I say, “Until it touches you inside you.” I mean, that’s why I say the why that makes you cry. The one that as you are writing it down– like I said, I think is really, really important not to think it but write it because sometimes we think but as we write we’re able to elaborate our thoughts more. So it’s a matter of how it touches you – how deep does it touch you. And if it feels good and it feels like “Wow, it made me tear up.” Then you can do that. Or you can delve deeper. There’s really no wrong or right way but it’s just a matter of it being strong enough for you because that why is what’s going to propel you when life happens and things go wrong, and thinking you have to go and reflect back to that why. And so, it needs to be strong enough that in those tough times, you can think and read through that why to get you to move forward, to continue to move forward in life.
Josh: Okay. So there’s a guy I know in Great Britain named Bryan Mayne who has invented a process he calls goal mapping.
Jennifer: Oh, interesting.
Josh: And with goal mapping, we start with why. We go to what. We go to who. And then we go to how. And my experience is, if I do all those four things – in that order, by the way–
Jennifer: I like that.
Josh: I start off with the big thing like “Have a good life” would be my– that actually is one of my– that’s my overarching goal. And then, I’ll say, “Okay, why is that important?” And then I drill down five times in each of my why’s. And I have several why’s that go with that.
I then go into “what is it do I need to do to fulfill that why?” And then I say, “Okay, it’s just we never do anything by ourselves.” We all start off with– and I start with, “Who’s going to help me?”And then, finally, it’s, “How do I get there?” which are the tasks that I have.
Jennifer: Yes. I love that.
Josh: And the truth is, without those four pieces, I have never been able make anybody or help anybody change their behavior.
Jennifer: Yes. True. I like that. I really like that.
Josh: And the hardest thing in the world is to work with a 30-, or 40-, or 50-year-old person. And the older you get, the harder it is to make these life changes without having a really strong, compelling reason to do so. And I think that’s what you’re saying.
Jennifer: Yes. And the person that you mentioned really broke it down really, really beautifully in a way that I didn’t break it down – so the different components – the why, the what, and the how.
Josh: And the who.
Jennifer: And the who. That’s right. That’s perfect.
Josh: Don’t forget the who.
Jennifer: Yeah, the who’s important.
Josh: People forget the who all the time.
And the other issue is when you start doing this sort of stuff, people will often jump into the how before they have a good why or a what.
Jennifer: Exactly, yup.
Josh: And the how is actually the least important of the four pieces, I think. So it’s just one of my things.
Now, you’re an accredited financial counselor.
Josh: What is that?
Jennifer: Well that is a good question, right?
Jennifer: Because, always, people think that I’m a certified financial planner, because that’s what is known. Like you are.
Josh: I am a CFP.
Jennifer: So basically, as an accredited financial counselor, I do more education. I don’t give financial advice in terms of wealth building or I can’t teach you about what a Roth IRA is versus a traditional, and those type of things. Unlike financial planers, I do not get into the bigger picture in terms of the long-term picture – “What do you need to [inaudible 00:18:03] higher. These are the funds that would be adequate for what you have.” I don’t get into that. So it’s more education and guidance in terms of the personal finances so they can have the cashflow. So they can then, in turn, go and work with a financial planner. So that’s what I do.
Josh: Okay, cool. Okay. So like you said, “Pay yourself” which is really an important issue, I think. So, can you explain what you mean by “pay yourself first”?
Jennifer: Yes. So that’s a phrase that I’m sure those listening and watching have heard before. “Pay yourself first” because your income goes in your bank account and, again, it goes to planning. And that’s why I am a firm believer in budgeting but there’s another thing I’m going to mention that maybe we’ll get into later. But you have to separate that money, paying yourself first – savings towards your wealth building, towards whatever fun goals, vacation – whatever it is. You have to separate that first because if you just leave it, it disappears like we have mentioned earlier. So it’s always about paying yourself first.
I always teach my clients to– in those instances of those financial goals – fun, wealth building, those type of things, that you treat that like a bill. I think we treat it secondary. Saving for emergencies and all that. Well, let’s see what’s left over. But we have to shift that mindset and just treat it like a bill and pay yourself first.
Josh: Yeah, well, that’s essentially– especially business owners–
Josh: –they tend to look at profit as “what’s left over” and not planning for it. And there’s a bunch of issues that cover around that that we talked about. So it is something that is a big, big deal.
Hey, Jen, unfortunately, we have run out of time for the podcast but we’ll continue on with BeLive a little bit.
Josh: So I’m going to imagine people are going to want to find you. And if they wanted to do so, how would they?
Jennifer: Very simple. You just go to JenHemphill.com. You can find me there. My podcast and my upcoming book as well.
Josh: Okay. Well, tell me a little bit about your upcoming book.
Josh: And I’m going to spell Hemphill because people won’t get it. It’s JenHemphill.com, J-E-N-H-E-M-P-H-I-L-L.com.
And your new book coming out, what’s it about?
Jennifer: So basically, the book is called Her Money Matters: The Missing Truths from Traditional Money Advice. And what I focus in that book is not how to budget, how to save – those things. Those are some money skills. But I focus on what’s missing.
So we talked about the money stories earlier and the importance of that. I basically break it down into what I call the money headquarters which is composed of your money stories or the mindset, money actions, and money skills. And, really, traditionally we focus a lot of the money skills – the budgeting and the saving. And all that’s good and dandy but you have to have a good mindset. You have to be able to talk money. You have to have financial confidence to really propel yourself forward with your financial goals.
So I just talk about what I call the missing truth. So not how to save and how to budget but what I feel, in my experience, has been missing.
Josh: And I’m assuming that you’ll find that book on Amazon when it comes out?
Jennifer: Yes, absolutely.
And I also have a book that will be out in Amazon by the time you listen to it–
Jennifer: That is awesome.
Josh: It’s called Sustainable: A Fable about Creating a Personally and Economically Sustainable Business. It’s available on Amazon at the end of January.
And if you’re still listening – I hope you are, I also have an offer for you. I have a free one-hour CD which is about what we call our Financial Freedom Project which is a freedom project financially for private business owners. Really easy to get it. Just take out your smartphone. And you don’t do this while you’re driving. But you take out your smartphone and you text the word RETIRE1 – that’s RETIRE1 to 44222.
And this is Josh Patrick. You’re at The Sustainable Business. Thanks so much for sticking around today. And 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.