259. How to Get Out of Financial Survival Mode

0:00Tiffany Aliche:You're not bad with money. You're just trying to survive in a system that wasn't built for you. I have taught millions of people how to overcome financial survival mode. And today I'm sharing the exact tips and tricks I've taught women to go from scarcity to freedom over the next 25 minutes. But first, a word from our sponsors. Fourth of July savings are happening now at the Home Depot with select appliances starting at$398. Plus, get free delivery on appliance purchases of$398 or more, no membership required. Upgrade your kitchen with a modern and sleek GE profile refrigerator featuring hands-free autofill for the perfect pour every time.

0:33And make laundry day easier with two-in-one washer-dryer combo innovation that completes laundry in about 90 minutes. Shop top brand appliances now at The Home Depot. Offer valid June 17th to July at the US only C-Store online for details.

0:46Tiffany Aliche:This podcast is brought to you by Squarespace. One of the things that so many business owners believe they need is a custom bespoke website that they have hired somebody to code for them. And I'm here to tell you that, yeah, you need a website that's functional and beautiful, but you don't need to pay somebody to code. This is where Squarespace comes in. When I first started Her First 100K, I turned to Squarespace. They were the first investment I ever made in our business to start and grow. And they had so many incredible tools baked in. You can buy domains on Squarespace. They have SEO tools that you can use to get seen.

1:18Tiffany Aliche:And they have cutting edge design tools that don't require you to know anything about code. Head on over to squarespace.com for a free trial, and when you're ready to launch, use offer code FFPOD to save 10 % off your first purchase of a website or domain.

1:44Tiffany Aliche:Hi, financial feminists. Welcome back. If you're new, my name is Tori. I run Her First 100K, which is a money and career platform for women. I believe I was put on this earth to fight for Women's Financial Rights. My work has been featured in the New York Times, Good Morning America, CNBC, The Today Show, and more. And I've taught over 5 million women to be better with money through my New York Times bestselling book and this podcast, Financial Feminist, the number one money podcast for women in the world. And today we're talking financial survival mode. So before we can talk about how to get out of it, we got to talk about what it is.

2:11Tiffany Aliche:Financial survival mode is kind of what it sounds like. You are just making game time decisions. You are going from day to day, maybe even moment to moment, and you never feel like you're financially ahead. You are constantly reacting rather than acting. You never feel in control of your money. You feel instead like money controls you, and you are living paycheck to paycheck. It might be literally paycheck to paycheck, but probably most likely, you just have no idea what's going on with your money. So when boxes arrive at the door, you're like, I don't remember what's in them. Or when you check your bank account, if you check it at all, you're like, I don't know where my money went.

2:50Tiffany Aliche:And if this sounds like you, then you need to stay for this whole episode because we're going to fix that. So now that we know what financial scarcity mode actually looks like, let's talk about if you're in it, how to know if this is something that is impacting not only your money, but just your mental health and general well-being. The first emotional and practical sign is you feeling anxiety anytime you check in on your money. So you feeling anxious when you open your bank account. You feeling anxious when you look at your credit card statement. You feeling anxious when you get physical mail and they look like bills.

3:24Tiffany Aliche:If this sounds familiar, you're probably living in financial scarcity mode. Second example is if you're not looking at anything at all. If you're like, oh, yep, those look like bills. I'm not going to open them. Or I know my bank account or my student loan balance is crazy. I'm not going to log in. I'm not going to check out of my money. This is like the accelerated version, which is not only do you feel anxiety about your money, you feel anxiety about what you think is going on with your money. Like money has caused you to feel so anxious that you're not even paying attention to it anymore. You don't even know what it looks like.

4:00Tiffany Aliche:If that is happening to you, if you have fully ostriched yourself, meaning that you have put your head in the sand and you've dug your heels in and you're acting like your problems don't exist, you're in financial scarcity mode. Absolutely. The third sign that you might be in financial scarcity mode is if you're using your credit card to bridge financial gaps, meaning, oh, I don't know how I'm going to afford this thing I want. So I'll just put it on a credit card and I'll figure it out later, right? The credit card has now become the safety net that is not actually a safety net. It's the thing that you are using as a crutch or as that just, okay, I'll figure it out later kind of procrastination mode around money.

4:45Tiffany Aliche:And the final sign that you're in financial scarcity mode is if you feel like you're bad with money. And not only you feel like you're bad with money, but you've internalized that as your identity. I see this happen with women all the time. They don't just think they failed, which might be a fact, right? I failed at this thing. But you internalize it as I am a failure, right? As opposed to thinking, you know what? I don't have the skills right now to be good with money. You just go, I'm bad with money. That's an internalized identity, right? Or you believe you were born with the good with money gene or the bad with money gene.

5:25Tiffany Aliche:Here's the deal. Getting good with money is a skill just like any other skill. Like playing an instrument or learning a language. These things are learned skills. But if you're feeling like you're bad with money and you've internalized it, you're just actually overwhelmed. You're just actually overwhelmed and you don't know where to get started. And all of those things, if you're experiencing one or many of these, then you are in financial scarcity mode. Before we keep going, I want to give you a resource right now. We're going to spend the rest of this episode talking about all of the things you can do to get out of financial scarcity mode.

6:00Tiffany Aliche:I want to give you a resource right now because we've done all of this emotional upheaval, okay? And I want to make sure that you have something that you can start doing to immediately make you feel better about your money, okay? It is our five-day debt challenge. If you go to herfirst100k.com slash FFpod, financial feminist podcast, herfirst100k.com slash FFpod, you can sign up for this free five-day debt challenge, okay? It is going to give you step-by-step ways to start eliminating your debt, start paying it off, and potentially save thousands, if not tens of thousands of dollars on your debt with interest rates, with all of that.

6:37Tiffany Aliche:So if you are overwhelmed, especially when it comes to debt, student loan debt, credit cards, any of that, stay tuned for the rest of this episode. But also, while you're listening, go to herfirsthundredk.com slash ffpod, sign up for that a five-day debt challenge, I promise you it's going to help. Okay, let's talk about the psychology of what's going on here with this financial scarcity mode, okay? The scarcity mindset that's happening right now is narrowing your decision-making. It is putting blinders on you to the point where you're so laser-focused, but in a way that's keeping you reactive rather than proactive, right?

7:15Tiffany Aliche:Money is controlling you rather than you controlling it, right? It's like, I never have enough money or I don't know what's going on with my money. All of these are what's going on in your brain that are preventing you from taking ownership because money is in control right now. Money is controlling your decisions, controlling your mindset, rather than you taking control over it. And at the end of the day, you need to know that you're not lazy, you're not irresponsible, you are not bad with money, okay? You're doing really well. You're doing great, okay? You're just in survival mode. Your brain is doing exactly what it thinks it needs to do in order to survive.

8:02Tiffany Aliche:We get stuck in the scarcity mode of feeling lazy, a feeling unmotivated, a feeling stressed because there are so many factors that put you in financial scarcity mode that you have no control over. This is why I feel so gaslighty when you hear financial experts tell you, well, just work harder or stop buying lattes, right? Because we know that there are structural factors at play here, like low wages, high cost of living, racism, sexism, ableism, homophobia, climate change, war, natural disasters, like all of these things have a much bigger impact on your money than whether just like you have a good budget.

8:40Tiffany Aliche:There's also emotional factors here. When I ask people what is the number one emotion that they associate with money, it is not joy. It's not ease. It's not abundance. It's not excitement. It's shame and guilt every time. Shame, guilt, embarrassment, this fear of looking at numbers, this avoiding your problems. And my first tip for you, I'm going to insert it right here, okay, as we're talking about all of the ways you're getting stuck in scarcity mode, is that you feel like looking at your money is the cause of your stress. So that's why you're not doing it, right? You think, oh, I don't want to look at my money.

9:22Tiffany Aliche:I don't want to look at my credit card statements or my debt balances or my bank account because that will cause me stress. So your brain has associated money and looking at your money with stress. So you avoid it. Your brain doesn't like feeling uncomfortable. Like that's evolution. Okay. So your brain tells you doing that thing makes you stressed. So don't do it. I'm here to tell you you're wrong. Your brain is incorrect. Your brain is lying to you. The cause of the stress is not looking at your money. The actual cause of your stress around personal finances is because you have no idea what's going on with your money.

10:05Tiffany Aliche:That's what's actually causing you stress. The metaphor I like to give is I'm driving a car, right? And I'm going on a road trip, but I don't have a gas gauge in my car. So I'm just driving and I have no idea when this car is going to break down. Okay? I could get two miles. I could get 200 miles and end up broken down on the side of the road at 2 a.m. with no cell service. That is more stressful than a gas gauge that says, hey, you're at a quarter tank. Or, oh, my light, my empty light is on and I need to get gas soon. that is actually less stressful because at least you know what's going on, right?

10:50Tiffany Aliche:Oh, okay. I do need gas soon. And that's a little nerve wracking, but I know there's a gas station in a mile. That is less stressful than, I don't know, like raw dogging life and just being like, I could break down at any time, right? Oh, I'm going to spend money on this thing. I don't know if I can afford it. That's what's happening. So you're thinking, oh, I'm stressed with money. I'm stressed looking at my money money stresses me out. So i'm not going to look at it No The stress you're feeling is actually because you're not looking at your money My second metaphor if the car one didn't connect with you is horror movie monsters, okay?

11:29Tiffany Aliche:It is scarier to not know what the monster looks like We've all seen the horror movie where we never see the monster Right, we never actually see what it looks like. That's a lot scarier right? If we know what the monster looks like, we can at least know how to kill it, right? We can at least know how to run away from it or what we need to do, what the plan is. So if you've been using the ostrich effect as your excuse, I'm going to bury my head in the sand. I'm going to act like my problems don't exist. And you think that's why you're stressed with money. You're not. You're stressed about money because you're not looking at it.

12:04Tiffany Aliche:You're stressed about money because you're avoiding it. You're stressed about money because you have no idea if you can actually afford the very things that make life worth living. And nothing tastes worse than a pina colada on the beach with a side of guilt, right? Nothing tastes worse than you having a beautiful vacation or going to the Aeros tour and then getting a huge credit card bill later because you had no idea what was going on with your money. Okay. So how do we get out of financial scarcity mode? this section is the actionable part of this episode okay this is your homework we want to make sure that this is doable for you and we want to make sure that this is a positive experience so i know you listening you're overwhelmed with money you probably wouldn't be listening to this show if you didn't feel a little bit of stress about what's going on with inflation and how expensive things are but also just managing the money you do have and this is where I have used and recommended Rocket Money for years now.

13:07Tiffany Aliche:One of my favorite things about Rocket Money is that they're tracking subscriptions and they have the ability to cancel unwanted ones within the app in just a few taps and they've saved users over$880 million in canceled subscriptions. That's almost a billion dollars. They also have the ability to automatically categorize your transactions plus customizable categories and tags to actually reveal your spending patterns so you can make great changes. Rocket Money users save$70 on average within the first 30 days when they create a financial goal inside Rocket Money. Rocket Money is a personal finance app that helps you find and cancel unwanted subscriptions, monitors your spending, and helps lower your bills so you can grow your savings.

13:48Tiffany Aliche:Let Rocket Money help you reach your financial goals faster. Join at rocketmoney.com slash FFpod. That's rocketmoney.com slash FFpod. rocketmoney.com slash FFpod. I am so excited to restock my summer pieces from Quince. I'm literally looking at their website tonight to decide what I need because I have their tank tops and I absolutely love those. I've kind of like worn them into the ground. I'm thinking jeans. I'm thinking some more like tank toppy type shirts that are really cute. I'm so excited for Quince summer looks. The other thing I love that I've been living in from Quince is their linen pants.

14:25Tiffany Aliche:Oh my gosh, they have an elastic waist. So when I go to Italy and eat a bunch of pasta or eat a bunch of poke in Hawaii, they've got me covered, but they're still so light. Everything at Quince is priced 50 % to 80 % less than similar brands. And they work directly with factories and they cut out the middlemen. So you're paying for exceptional quality, not any brand markup. Make your summer wardrobe feel easier. Go to quince.com slash ffpod for free shipping on your order and 365 day returns. That's a full year of returns. Now available in Canada too. That's Q-U-I-N-C-E dot com slash ffpod for free shipping and 365 day returns.

15:03Tiffany Aliche:Quince.com slash ffpod.

15:11Tiffany Aliche:So when I was talking about knowing how much gas is in your car, knowing what the monster looks like. The easiest way to do this is through what I call a money date. This is my signature practice. We have an entire chapter in my book that goes into more detail about this. But basically what a money date is, is you want to date with your money. You're looking at what's going on with your money. You're looking at your spending. First things first, you need to know where your money's currently going, right? What's coming in and what's going on? Where are you spending your money? And are you spending your money on things that actually bring you joy.

15:44Because if not, change it.

15:47Tiffany Aliche:If you have an idea of where your money's going, you need specifics. You need to distinctly know where your money's going. It is hard to keep track of your spending with guesses. Guesses are not real answers. So this means pulling up your transaction history, pulling up your budgeting tool, any data you have about where your money's going. Now, before I go any further about what this money day looks like. If you are so far into financial scarcity mode that I just said that, and the very prospect of doing this makes you break out in hives, make it something you look forward to. Wrap yourself in a down comfort or cocoon.

16:25Tiffany Aliche:Order takeout from your favorite restaurant, okay? Say, this is the time I'm going to look at my money. And I promise both Tori and myself that I'm going to do this without judgment. I'm not going to yell at myself. I'm not going to beat myself up. I'm just going to look at my spending, look at my money like I'm an anthropologist in my own life. Like, oh, interesting. She spent money that she did not have because she had a really shitty day at work. Interesting. That's it. Okay. When we're doing this money date, we're looking for a couple of things. One, we are looking for patterns. Again, are you spending money emotionally?

17:01Tiffany Aliche:Do you hate your job and it causes you to spend more money? Is the world shit and it causes you to spend more money? The answer is probably yes. When you're with that one group of friends, do you spend more money? Are there specific days or seasons that you spend more money in certain places? Okay, then your budget needs to account for that. That doesn't mean necessarily you can't spend your money. For me, like summer, I'm going out a lot more. I'm going out to eat a lot more. My spending is going to be higher. That's okay. I just need to account for that. The second thing is you're looking for purchases you completely forgot about.

17:31Tiffany Aliche:Like, you blacked out. You're like, I don't remember doing that. I don't remember purchasing that thing. I don't even know what this box is on my front porch, right? If you're like, oh, that dress, I had to have it. And now you kind of forgot you bought it, right? Or maybe it's like that coffee that you keep spending money on in the middle of the day that you don't really need because your caffeinated body is like, no, I'm good. I don't need more of this. But you're like, this is my excuse to like take a walk. Those are the kind of purchases we're talking about. The purchases you forget are the ones that are so mindless that they're not actually benefiting your life.

18:08Tiffany Aliche:And we're also looking for recurring expenses, okay? Maybe you forgot about that free trial. Maybe you signed up for Starz a year ago to watch Moulin Rouge and then forgot to cancel it until just now. Definitely not talking about anybody I know. Cancel them. You're not using them. You're not using that. And you're also looking for fraud or inaccuracies. We're looking for double charges. We're looking for missed refunds or anything that seems off, okay? beyond just getting clarity on these spending habits, you're using a money date to reflect on how your spending makes you feel, but also your progress towards goals.

18:41Tiffany Aliche:Because this right here, if you've been like half paying attention, I need you to come back. The reason we do this money date is yes, optimization and looking at our money and setting goals, blah, blah, blah. But the other reason we do it is because you have no idea how much progress you're making unless you know how much progress you're making. Again, I know it sounds obvious, but the amount of people who embark on a savings journey or a fitness journey, right? There's a reason if you are trying to get stronger, you take photos when you first start. Because when you live your life and when you're in your body every day, nothing feels like it's changing.

19:18Tiffany Aliche:So you don't feel motivated to keep going, right? Because you don't know what's happening. But when you look at your progress photos or when someone comes up to you and says, oh, you're looking really strong, right? Like that validates all of the hard work you're putting into this. It's the same thing with money. You have to see, oh, I paid off$500 of debt. Great, right? You're going to keep motivated that way. So that's the other reason we do the money date. We do the money date to optimize and set goals and blah, but we also do it so that we keep going, that we feel motivated and strengthened in our financial resolve so that when shit gets hard, it's easier to stay the course.

19:59Tiffany Aliche:And again, we are not judging ourselves. We are just noticing what's going on. So with our money date, we're reflecting on our spending. We're checking in. We're also setting goals. A quick way to set sustainable goals, okay? We have done other episodes about this, other videos about this, but my favorite way to set goals is making sure that you are specific, timely, and mission-driven. specific meaning that you have like a specific dollar amount. So whether that's, I want to save X amount of money or I want to pay off X amount of debt. Timely being the time period I want, for me, it was 100K at 25, right?

20:34Tiffany Aliche:That was very specific. It was specific and timely. I knew the exact amount of money and then the exact timeline. Okay. So maybe it's, I want to pay off my$10 ,000 of credit card debt in the next six months. Okay. And the last thing, this is the thing everybody misses, okay, is I need you to have a mission behind this goal. It is not enough to just say, I'm going to be better with money because that's not achievable or measurable. What does being better with money even equate to, right? There is no check mark that you can make that says, yep, I'm better with money, right? Or like, I want to save.

21:12Tiffany Aliche:Okay, that's better, but that doesn't tell me anything. So we want it to be specific, timely, but also we want to give ourselves a reason to care. Because when shit gets hard and when you want to give up, you need to remind yourself why you're doing this. For me, my 100K at 25, specific, timely, was so that I could start her first 100K and take it full time because I didn't like my corporate job anymore. I didn't want to do this anymore. So when you're setting goals, it's not enough to just make sure you know what the goal is. You want to make sure you know why you're doing the goal at all. My final tip for goal setting is a goal without a plan is just a wish.

21:55Tiffany Aliche:It's just a fantasy. So if you're like, yeah, I'm going to save 100K at 25 to quit my corporate job, but then you don't figure out what the plan to get there is, you may as well not set the goal at all. That's not going to actually help you. So if you know what you want to do or what you need to do with your money, set the goal and work backwards. Okay. I set my 100K goal at 22. I knew I had three years. Here's what I needed to be saving slash investing every single month in order to have that goal happen. You can do the same thing with debt. You can do the same thing with a savings goal. Okay.

22:30A goal without a plan is just a wish.

22:32Tiffany Aliche:And we have a great episode on goal setting. So if you want further listening on it, episode 207 with Caroline Adams Miller from January of this past year. It is phenomenal. It's so good. So if you're amped up about goal setting, that's a great resource after this episode.