108 | How Kenny Got Out of the Credit Card Debt Cycle

My client Kenny found himself making good money but consistently owing more on his Amex than the amount of his paycheck.

He decided he wanted to make a change and reached out for help. During our time working together, Kenny got out of that debt cycle, started intentionally planning his spending, and started saving more than ever before.

In this episode, Kenny shares how he turned his finances around and his thoughts on the power of financial coaching.

Topics Discussed

• Kenny’s experience with money before coaching
• when he realized that he already had some good money skills that he could hone
• the common expectation of coaching vs. the reality of coaching
• Kenny’s biggest area of weakness in his budget and how he fixed it
• how becoming intentional with his spending helped him get his credit card usage under control
• his biggest takeaways from coaching
• a big money goal he was able to accomplish for the first time in his ten years of working
• how it feels to have his money under control
• his thoughts on the value of working with a coach

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Resources mentioned

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Email: hello@rhothomas.com

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Lightly Edited Transcript

You’re listening to Wealthyesque. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey, friend, welcome back to the show. I hope you’re doing well and having an amazing day so far. So today, I’m introducing you to my client, Kenny. Kenny and I go way back. He’s known my husband and me since freshman year of college, we were all fresh out of high school. And he was actually a groomsman in our wedding. So when he reached out about working with me to improve his finances, I was honored and of course happy to help. During our time working together, Kenny got out of a cycle of running up his Amex every month and started saving more than ever. I can’t wait for you to hear his story and how he did it so let’s dive in.

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Rho
Welcome to the podcast, Kenny.

Kenny
Hey, Rho, how you doing?

Rho
Doing well. Thanks. How are you?

Kenny
Feeling pretty good just like on Wednesday evening here in DC, almost through the week, so I can’t complain.

Rho
I love it. So tell us what was your money journey like before you and I started working together as we just finished working together last month. What was your money journey like before our work together?

Kenny
Before I reached out to you, it was kind of all over the place I had been relatively good with my money in some regards, I was able to buy a place in DC a couple years ago. And I was really proud of that. But after getting into, like my home, things just slowly start to kind of go astray in my budget. And that’s kind of what forced me to reach out to you in a sense. And for me, it was just that I kind of lost some clarity on where my money was, I was spending a bit too much on this Amex card I bought, I was chasing the points, trying to do do all the things to get those points and not really paying much attention to like how I was spending on a consistent basis. And overall, I just I wasn’t sure where my money was going. That’s really what it was about.

Rho
Yeah, and one thing about you is you actually had a lot of insight into your finances more so than I think you gave yourself credit for that you’re like, oh, yeah, I don’t know what’s happening. And then our first call you’re like, so here, my spreadsheets like here are all the things. And so that is one of the things I think that’s so important to pull out in coaching is like to show people you actually know more than you’re giving yourself credit for you’re better with money than you think you are. What are your thoughts about that?

Kenny
Yeah, there’s definitely a lot to unpack there. And I think part of it, too, is just taking the time to acknowledge what you’ve done. Because I think, you know, I recall that first meeting, I pull up my spreadsheet, my net worth and this and that has happened into and I was already starting to think of like the things that were like, wrong about this, you realize it’s like you have the spreadsheet, most people don’t even have this, you know, and so just that perspective you gotta gave me on that was helpful. And just like the realization that you may have the skills that you already need to kind of get better with your finances, but you may just spend some time refining and getting better over time. And that’s kind of where I was just like I was on a good track, I kind of fell off after a big purchase, and I had to realign and kind of re sharpen those tools that were already there.

Rho
Yeah, so what made you reach out for a consultation?

Kenny
It’s so interesting. I actually was looking at the first message that I sent to you asking about, like the coaching service. And it was based on a podcast that you, you sent out sometime last year. And it was also around September was my birthday last year. And I think I was probably in a moment of reflection and trying to think about how I was trying to like improve my life and things like that. And for some reason that podcast I forget the potential nugget that was there for some reason that clicked. I was like, You know what? Reach out to rho to see if she works for folks that aren’t lawyers. So that was like your main market based on what I saw, like on your podcast and on your blog. But yeah, I was like I need some help. And just what I heard on that podcast, I can’t recall what it was exactly, but just inspired me to reach out.

Rho
And when you reached out what were you expecting to get out of coaching or like what did you think coaching was or would be?

Kenny
Honestly I was still not 100% sure I’ve done like group coaching for different parts of like life and things like that. But individual one on one coaching, and never had any experience with. And so I wasn’t quite sure what to expect, but I kind of had some initial kind of guesses. I was like, she’ll make me like spend, she’ll be like, you can’t spend any money on XYZ, you’re going to be having no spend weekends, no spend Mondays, like, I thought, for sure. I just thought restriction, but I need that enforcement anyway. It’s not a restriction of some sort.

Rho
And when you got into coaching, did I tell you, you cannot spend on all the things and you have to do no spend Mondays?

Kenny
You did not do that at all, never came up once.

Rho
I think that is a common misconception that people have about coaching. It’s like, No, I’m gonna have to, like, spend nothing, I’m gonna have to like really, you know, restrict and not do all of these things that I enjoy. And I think that’s the way that people often think about managing their money better in general. It’s like, oh, that means that I’m not going to be able to do anything, oh, can go out to eat. I’m on a budget, you know, like we say things like that. And so it’s so funny that that was your thought about what coaching was. So what then was your reaction, when that is not what we were doing?

Kenny
Or definitely was a good thing, because my, my food budget was a lot. So that was like a weakness that we addressed from the jump. And just realizing that I could still spend money on food I like to do and just like so go out to eat and hit my goals was a big revelation to me. So yeah, it was just like, This is not what I expected in a very good way.

Rho
Can you talk a little more about your food budget, because yes, that was one of the big things that we worked on, during our time together. But I would love for you to dive a little bit deeper into that as far as you’re willing to or as far as you’re comfortable, of course, but talk to us about the food budget and figuring out how you’re going to spend how much we’re going to spend and how that was going to fit with your other goals.

Kenny
Yeah, I can speak to that. It definitely starts with like, seeing what the actual baseline is what the data actually was showing. I think in our second or third meeting, we kind of went through all my expenses on that Amex already mentioned before, and we add up all the food and dining and it was it was pretty aggressive. I think it was upwards of like 1000 bucks, at least I was spending on eating out. And so I honestly had no clue. So first of all, even knowing that was a I was kind of shocked. But um, I need to kind of get that real data to kind of understand where I was at. And, you know, after I saw how much I was spending, I definitely had to, I wanted to make some adjustments. And from that point, you and I just kind of worked on making a more kind of sustainable approach that made sense. You know, you weren’t saying you can’t spend any money at all, you’re like, Alright, you’re at this, like, $1400. Mark, how do we get that down slowly over time. And that’s kind of what we did, I remember us can’t remember the exact amount. But even just knowing that spent that much, I think naturally also just became more cognizant, as I was spending all those weekends. I’m like, I want to be spending like almost a grand just on food and dining. And so I’m just like setting up kind of a small goal to get away from that grand amount, really helped me hone in on my finances.

Rho
And I remember you are a little resistant to it at first, because we were looking at your budget and trying to figure out where we could fit in these different goals that you had. And I remember asking you like, Are there any areas that you saw that you might want to tweak and you were looking at everything but the food budget, you’re like, oh, maybe I can take something from here. And maybe I can do something there. And so that was so interesting to me. But you know, I didn’t push it because I knew just based on some of our conversations that that was important to you, right. And it goes back to what we were just talking about, that budgeting does not have to be cutting all of the things that are most important to you. You know, if you want to spend this much on food, then we’re going to find other areas that you don’t care as much about that you can decrease to be able to have the food budget that you want, but still be able to hit some of those goals. But then over time, you were like, Yeah, I really think I need to start tackling this food budget, and you came up with a plan to keep yourself within a lower limit that you set. And then were able to do some of the other things that you wanted to do as well. So what would you say are some of the biggest takeaways that you have from our time together? Like what are the things that really stand out to you?

Kenny
So a lot, I think initially, just spending time on a weekly basis to see how much I was spending was really important. I wasn’t doing that on a consistent basis ahead of time. I think before I was trying to track it on some kind of monthly basis and I wasn’t really doing it at all. And so just kind of re honing in on that skill of like every Friday, right after I sign off work. I see how much I spent and also forecasts how much I plan to spend in the coming weekend. And so that’s been super helpful and continues to be and really good thing about spending that moment on Friday to kind of realize how much I can I want to spend on during the weekend kind of speaks this idea of like intentionality. And when I just kind of reflect back on some of our meetings that we had, I remember this one meeting, you’re like, you know, your money doesn’t happen to you, you are in complete control of your money. And that was a big a big moment. Because like, I can hit those goals, I can save this money, but like, I have to want to do it. And the intentionality piece I feel like I have in other aspects of my life, and my money just wasn’t there. And that was the like, the second biggest thing that I learned from this as well. And then like, there’s also it kind of it’s kind of tied to intentionality. But there were a few times where like, I knew I want to buy something that was like not within my budget, per se. And you’re like, as long as you make the decision ahead of time that you want to make that purchase. That’s completely fine. Just know that it has to come from another bucket in your budget. And just knowing those kind of like, how the pieces all line up together, and your budget was another big thing for me as well.

Rho
Can you speak more on the intentionality piece and the different feelings that you had when you affirmatively planned how much you’re going to spend for the weekend or you affirmatively plan how you’re going to cover a different purchase? Because I remember at one point, it was like you would spend money, and you felt anxious about it, or like, oh, I don’t know where this is going to come from or kind of uneasy. And then like we talked about the intentionality about the fact that your money isn’t happening to you that you can make these intentional decisions about what you’re going to do with your money and follow through with them. So can you talk a bit about the power of that intentionality a little bit more?

Kenny
Yeah, definitely. Intentionality is really about being assertive. And if you’re setting a goal, financially, any kind of any kind of goal, I think, being assertive, and knowing what you want, has to be at the forefront of that. And that really was what it came down to, with me hitting my goals working with you. Month by month, day by day, week, by week, the same things are happening, it’s like, Friday comes around, we’re out to eat, do I do the same thing I was doing before and spend too much, and then be bitter about it when the money is gone? Or do I stop that and try to like, have some fun, but still hit the goals I want to hit. And that’s what it was really about. It’s just like being assertive. And realizing that this kind of like small, short term, I don’t even say it’s a sacrifice, it’s kind of a strong way to put up with this kind of small deviation from what you think you want, it’s going to be worth it way more in the long run, if you just have more money or account to hit your goals versus having like that one, one off meal or drink, or that one time on a Friday or Saturday night.

Rho
And I think that goes to something that I talk about. And I know we have talked about before the trade offs that you make with your money, right? Every time you spend money, it’s a trade off, because this money that you’ve spent on this thing is now money that you don’t have available to spend on something else. And so it’s being intentional about those trade offs and recognizing, okay, this goal that I have is more important to me than the random meal or the random item that I want to buy. And so I’m going to choose not to spend on this or to spend maybe less than I would have in service of this larger goal that I have. Alright, so talk to us about where you are now with your finances versus where you were, when we first started working together.

Kenny
I definitely have seen a lot of progress. As I mentioned, I’m checking my finances on a weekly basis, which is something I didn’t do before consistently at all. So that’s been super helpful. I’m still using your your monthly budgeting sheet to keep track of all my expenses throughout the month. That’s been super helpful as well. And I’d say overall, it just kind of speaks to just like this awareness of my money that I didn’t have before. And I remember a few times before we met, when I was using that AmEx, there are times in which I would get my work paycheck. And that work paycheck would be less than the balance of what’s on my Amex. So I owed Amex money each time I got my paycheck. And that was sort of frustrating. It’s like I’m making a good amount of money, don’t have any dependents. And this shouldn’t be I shouldn’t be stressed, like financially just based on you know how my life is. And finally getting that under control was was really big. Because I’m at the point now where that that Amex balance is consistently beneath the paychecks I get from my job and that’s been a really eye opening experience. I’m still as I mentioned, so dining, treating myself here and there. And I’m hitting my goals and I have money in my account, which is really awesome.

Rho
Yeah, I think what you said is so key there that you have taken this control of your finances, you’ve started being more intentional. And whereas before you were spending, you weren’t really paying close attention to it, and then you’re getting this bill that’s larger than your paycheck. And then you’re like, oh, man, every single time I get paid, I have to pay it out to someone else. Like just the power of being more intentional, you’re still living the same quality of life, like it doesn’t sound like your lifestyle has changed a whole lot. It’s just that you are paying more attention to the money that you’re spending on what’s important to you, and maybe cutting out some things that weren’t as important. So that then you can put that money toward your other goals. Talk to us about how you feel now about money versus how you felt before.

Kenny
Before I hop into that I actually have one more thing I want to share, as well, just on the idea of like the paycheck, because this past month, I for the first time ever, I’m paid on a bi weekly basis. And so there are a few times a year where I get three checks in a month. And I’ve never been able to save one of those checks, despite working 10 plus years, and getting a biweekly paycheck. And for the first time ever in April, I was able to put that whole third paycheck directly into my savings. And that’s a big deal. You know, that just kind of shows me that like, I have full control over my money. I learned what you taught me and I lived it out. So I want to make sure I shared that.

Rho
Congratulations, I am so proud of you for that. So talk to us about how you’re feeling now about your finances. Because you’ve mentioned all of this that you’ve done to get your finances under control, you are even to the point that you’ve saved an entire paycheck for the first time in your working career. So how are you feeling?

Kenny
I’m feeling really good. I think I didn’t realize this. But before we started working together, I had this kind of like this weight or pressure I felt on myself. And I think a lot of it had to do with me not knowing where my finances were, and just getting a bit more control on them. And understanding that I make more than enough money to hit my goals and to save things has been immensely helpful. And I just feel relieved, overall, I’m not just stressed about, you know, if a big purchase comes up, I know I can cover the bill, and I’ll have some money that I’ll save it next month are already having savings to help me offset that expense or that change. So just overall, I’m thinking about money weekly to make sure I’m keeping track of things. But it’s actually not a burden at all. And it feels like, because I’m doing that tracking, I have much more freedom over how I can spend.

Rho
I think that is different from what most people would think or counter to what most people think because a lot of times people think about budgeting, as we talked about the beginning of the conversation as this restrictive thing. And you know, it’s burdensome, it’s tedious. But when you have that intentionality with your finances, and you are planning, where you’re gonna spend your money, how much you’re going to spend, it does give you that freedom to spend how you want to without the pressure, or the anxiety, or some of those negative feelings that we might feel when we’re spending money and don’t have that clarity around what’s going on. So I really appreciate that you said that because I think that is spot on.

Kenny
Yeah, and also spending that money when you know you can spend it, it feels good. There’s something about that, you know, you go in there like I can buy this thing I want to buy. And it’s in my budget like that, that feels good. It’s really free.

Rho
Yeah love it. And it just, you have a lot more control a lot more flexibility. When you know, this is the amount that I’m going to spend, right? Like I know exactly how much is going toward this category. I know exactly how much I have that’s going toward these goals. And so I know that when I spend this money, it’s not impacting anything else that I have going on.

Kenny
100% Well said.

Rho
Alright, so what advice or words of encouragement do you have for anyone who is where you were when we first started working together and maybe they’re on the fence about coaching?

Kenny
Financial coaching is super helpful. A lot of folks may not realize that like spending time to see how much you’re spending each month and kind of face the facts so you may be spending your spending too much money on XYZ is a realization that’s really helpful. And I think the biggest thing about coaching that’s of value that you have someone objective to help you look at your finances. I think you could try to have someone else like a family member or someone to try to keep you accountable, but it’s different when you have someone that song doesn’t have skin in your personal game. That’s the right phrase, and they can just help you out. Because there are a few times when rho call me out, there was just one time we were like, near the end of the month. And I was like, I kind of want to buy some gym clothes. She was like, You know the way you spent last weekend, you already ate your gym clothes from a call, but it was like a super dramatic kind of interpretation of the event. But it really helped me kind of like, pull myself together for that next week to put our hands together. Coaching to also provides that time for reflection. Every Sunday, Rho and I would meet. And I knew I had to my numbers to have it ready to discuss things with her. And that was really helpful and freeing. And a lot of the calls that we had, were a good way to close out the week and start the next week as well. So I just think that you know that time for introspection, that time for reflection on what you spent, is really valuable in doing that on a consistent basis is really what is the game changer in terms of changing your finances.

Rho
Well, I am so glad that our time together was so useful for you. And I think to something that you said earlier, the point about having someone objective to help to look at your finances to question things in a way that maybe someone in your personal life might not is really helpful, right? And then also to help you question some of the thoughts that you have some of your reasoning behind spending certain things, things like that, where you can justify things to yourself and rationalize things to yourself. But then when you’re talking to someone who’s objective, and questioning that and poking holes in it, and like helping you to see what the real thought is behind this thing that you’re doing, or the reasoning that you’re bringing to it. I think that that’s super helpful as well, because it’s hard to do that on yourself, right? Like when you’re inside of your own brain. It’s hard to really question those thoughts on your own.

Kenny
I agree in that reminds one more thing. Spending money is an emotional thing. It’s very easy to get caught up and being like, you know, I had a tough day at work or tough week at work, I want to buy XYZ or do or do this thing. And having someone there to kind of like check you. It’s helpful, because otherwise I would be on this path of still running up that AmEx and then wonder where money is at based on some emotional quick decisions that maybe feel good in the moment, but weren’t the best for my long term financial health.

Rho
Well, I am so proud of you, Kenny, and all the work that you’ve done. Thank you for coming on to share your story with my audience. I really appreciate you being here.

Kenny
No problem. I’m glad to help out any way I can. You have really changed my finances for the rest of my life. So it was well worth it to come on here. And share my perspective and experience.

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All right, I hope you enjoy hearing Kenny story. I’m so proud of all the work he’s done. And I’m excited to see the future impact of all our work together. If you saw yourself and Kenny story and feel like you don’t know what’s going on with your finances. You know what you’re doing isn’t working. Please feel free to reach out to me. I can help you. So just head to rho thomas.com/call. And let’s talk about how to get started. All right. That’s it for this week’s episode. Come connect with me over on social media. I am most often on LinkedIn, rho Thomas, and Instagram at I am rho Thomas. Subscribe to the show and leave a review both of which help more people to find it. And think of a friend or two who would really benefit from this story and share this episode with them. As we close out friend, I pray that you take the information you learn here, apply it in your life and open up to the realization that wealth is available to you. As you do that consistently week after week you’ll continue to take steps to regain control of your time, build wealth, and live the life of freedom and choice you deserve. Talk to you later.

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