Transcription of Kate Northrup for the show Financial Fitness, #110
Dr. Lisa: Many of us have, let’s just say, conflicted feelings about money. We don’t always think about money and love in the same sentence. The person who’s here with me today actually does think about money and love in the same sentence and that’s because she wrote this book Money: A Love Story or maybe she wrote this book because she thinks about money and love together.
At any rate, we’re talking with Kate Northrup who is the author of Money: A Love Story: Untangling your financial woes, creating the life you really want and living your purpose. Thank you for coming in and talking with us today.
Kate: Thanks for having me.
Dr. Lisa: It was interesting because I was reading through this book and it came … I’m sure you’re like books always comes at the right time in your life. They show up and you go, “Oh, well this is what I needed today.” Your book came just at the right time. I have a new job that I’m going to be starting. I have kid in college, thinking about lots of financial things. I start reading through your book and I think there’s some very interesting things here about thinking about money in an abundant way versus in a fearful, I don’t have enough kind of way which is important.
Kate: That’s a different perspective than most financial advice or works out there that are really focused on only the knots and bolts, only the dollars and cents. To me, money is a lot more than that. It’s so emotional for people. We don’t want to leave that off the table.
Dr. Lisa: You came to this conclusion that money and love are interwoven. Really it’s not that you have to be in love with money. Its just that it enables you to do the things that you want to do. It’s a currency. That’s what it is. You came to this after having spent quite a long time yourself talking about money with people. I’m not saying anything to disparaging when I say you were acting like the money expert, going around the country lecturing. In the meantime, you had this deep, dark secret.
Kate: What happened is I fell by accident into this role of teaching people about money because I built a successful business in the network marketing industry. I had a team of people that I was working with. Then I started giving workshops. My business was doing well but I was only focused on the making money part and I had completely ignored the part about how much you spend and what you actually do with the money once it comes in.
That’s a really important part of the equation. It’s at least half; if not more. I got myself into over $20,000 worth of credit card debt. As I’ve been going around telling the story and meeting people, I found out that’s actually not that uncommon which is really unfortunate. Behind the scenes, my financial life was fairly chaotic.
I was certainly in avoidance around it while I was out there teaching some concepts around business and cash flow and passive and residual income which was all good stuff. I wasn’t teaching people how to get out of debt luckily. But there was a disconnect. There was that friction. It started to feel inauthentic.
Dr. Lisa: I was surprised and pleased to read about back in your genealogy a bit and talked about your father’s approach to money versus your mother’s approach to money and how this really shaped you because your parents got divorced when you were relatively young. You had a chance to watch both of them become their own individual people and have their own individual approaches.
Talk to me a little bit about that, that honesty that you’re able to actually I guess write about it in the book.
Kate: One of the things that’s really important is when you tell a story in public, I feel like you have to have cleaned it up with the people ahead of time. I did that a lot of work with both of my parents so that I felt like I could share the story from an open hearted place for education and to help other people, not just to tell a juicy story.
My mom’s approach to money versus my dad’s approach to money shaped how I fell somewhere in the middle and watching their different approaches and being … I was 16 when they got divorced; really interacting with them around money individually for the first time. Up until that point it was their shared common interest. I didn’t learn as much about it with them together because both of their money views got watered down by the other one for better or for worse.
Seeing this contrast was cool because I saw two different approaches that really worked in certain ways and didn’t work in other ways. I was able to appreciate and pick and choose some of the perspectives that I wanted to take with me. It’s really important for everybody to look at their money history and their money love story as I call it. I coach people to go through that in the first chapter because we are so shaped by what’s modeled for us growing up, whether it’s our health habits, whether it’s our relationship habits, or our financial habits.
The only way to make positive change is to first become aware of those things and go down that road. You don’t have to spend years of therapy or anything. I mean, maybe you do but I’m not saying you need to do that. Just spend a little time saying, “Oh yeah, that is what my mommy used to say. That is what my daddy used to say. This is what I witnessed. How is that affecting my behavior now?” It’s a really important question to ask.
Dr. Lisa: This is a big part of what you’re asking people to do. It’s not just track your expenses everyday for three months and set up a retirement fund. It’s not just those things, it is really dug deep. It’s to have a money love journal. It’s understand where you’ve been and where you’d like to go and where you are in the process. It’s a different approach than I think a lot of financial consultant sorts have to offer.
Kate: Absolutely. The thing that I found in my own journey of getting myself into and then out of $20,000 worth of debt was that the nuts and bolts of it, the spreadsheets and the planning and the savings and all that stuff, I wasn’t able to actually continue to do them until I figured out the emotional stuff first. I had to rewire myself emotionally and mentally and change some of the perspectives and beliefs I had about money and myself.
Then those strategies for getting out of debt, for building my savings, for increasing my income worked. I actually stuck with them. I can’t even tell you the number of times I tried starting a new financial program. Just kind of like a similar, like a new nutrition program or new exercise program. If you’re just doing the strategies without the inner work, it doesn’t stick and it’s not sustainable.
Then three months later, you’re on a new program. That’s the piece that I wanted to bring to the table, the emotional piece. When we change how we feel about something, then that really rewires our beliefs and rewires our activity as opposed to just starting with the activity. It’s too far down the line and it won’t stick.
Dr. Lisa: Another one of the important things for you was to finally realize your own value. In your description of your relationship with your parents, you’d talked about a partnership you formed, a financial partnership you formed with your mother. You described a series of health issues that kept taking place and kept taking place and kept taking place. You couldn’t figure out what was going on. Then one day you went, “Oh my gosh, I know what’s happening here and it has to do with this financial relationship.”
Dr. Lisa: That’s very complicated.
Kate: Yes. Certainly not something that most people would put together. My mom is Dr. Christiane Northrup. A lot of people listening, I would imagine might be familiar with her. She wrote Women’s Bodies, Women’s Wisdom. As a child growing up, I really learned how our emotional lives affect our physical bodies. Anytime I have anything going on with my body, my immediate reaction is “Okay, what’s going on in my life right now? What is my body trying to tell me?”
I knew this issue I was having was in the second shockra, which is the area that has to do with money, sex and power. It’s around the reproductive organs. I knew that it probably had something to do with it. The thing that’s funny about the body is it will manifest stress. Our stress goes into our body usually when we’re not ready to be aware of it mentally and consciously. That’s why it goes into our body.
Of course, I couldn’t figure it out for a long time because I wasn’t ready to and then I was. What ended up happening is my mom and I worked things out and I realized I was remaining in the business with her because I felt like I wasn’t enough to be out in the world doing things on my own. I felt like she has this existing brand. She had been so successful. It would be so much safer if I just didn’t really have to put myself out there and if I was just behind the scenes in her brand.
What was happening is my body was saying, “That’s not okay.” It wasn’t anything my mom did. It was something I did. After a while, I felt like that relationship business-wise was keeping me small. What I realized is after we had some conversations around it and unraveled things; it was also keeping her smaller than she needed to be. That’s how it is in relationships.
When one of us playing small in a relationship, the other one is too even though the other person may not be aware of it at the time. We’re never serving anybody by staying when it feels constrictive.
Dr. Lisa: You decided to make this radical shift? You worked through this relationship with your mom and it’s taken a while. When I say relationship, I mean financial relationship. It seems as though you were able to largely keep things on a positive level personally. Then you decided to do a 180 and get rid of everything and create your own tour. “Let’s go across country and let’s do something different.” Tell us about that.
Kate: What happened is I was living in New York and I was chipping away at my debt. I was making progress but I wasn’t making progress as fast as I wanted to. I would do the projection. It was like, “At this rate, you’ll pay off your debt in seven years or whatever.” That just felt too long for me. It just felt like, “Uh, I want to do something else.”
What I did is looked at, “Okay. Well, I could move home to Maine and live …” My mom has an apartment attached to her house. I thought, “Great. I’ll go move to Maine. I’ll pay off all my debt really fast because I’ll have no living expenses and I’ll take care of that.” Everytime I thought about that and I started telling people about it, I felt constricted and almost this darkness, sort of emotional darkness started to surround me.
That was my sign that it probably wasn’t a good idea because it didn’t actually feel physically that exciting. All of a sudden, I just got this idea, what if we got rid of this apartment in New York? What if I sold all my stuff? What if I bought a Prius and took off around the country teaching workshops about creating financial freedom as I was doing it myself. I’ll call it the Freedom Tour and it’ll be this great adventure.
That’s what I did. Back to the physical aspect, that felt really expansive. Everytime I talked about it, I felt energized. Everytime I talked about it, I felt really excited. That was my sign that it was the way to go.
Dr. Lisa: It also clearly created some rise in your energy levels and what you were projecting out into the world because somehow you end up finding this guy.
Kate: I did. I had met this guy six months before in Chicago. We had kept in touch a little but nothing in particular. Then all of a sudden when I was leaving on the road trip about two weeks out I thought to myself, “I really probably shouldn’t drive alone from Buffalo to San Diego in the middle of the winter when I’ve just changed my entire life and I’m feeling a little emotionally shaky.” I just got an intuition to invite this guy Mike. I was like, “That’s crazy. You don’t know him.”
I did it anyway. I consulted a few friends. I said, “This is totally nuts. Should I do this?” First, I sent him a really neurotic e-mail which was like, “I’m inviting you on this thing but it’s okay if you can’t come.” I mean, 50 million disclaimers. Luckily, I showed it to a girlfriend of mine. She looked at it and she said, “You cannot send this. This is a crazy girl e-mail.” She deleted it and took my phone and sent him the text, “I had this really fun idea. Do you want to drive across the country with me?” to which he replied, “Yes.” That was two and a half years ago and we’re actually getting married next summer. It worked out.
Dr. Lisa: Is it not something that you have found over time is that when you start doing things that are more foundationally sound for yourself that the right other things come in to help you be more of who you’re already are.
Kate: That is such a good point. I think whether we’re looking for a relationship or a romantic relationship or financial well being, there is this feeling of like, “Oh, I should go to chase doing the “right things”. I should go on match.com. I should do the right things.” What I found was the more I focus on taking care of my own well being and doing the things that I knew I needed to do, absolutely. I found a great guy. I managed to reorganize my financial life.
I paid off all of my debt really soon after I left for the Freedom Tour. Things got better in my relationship with my mom. All of those things started to work out when I prioritized what needs to happen to take care of you on the foundational level like you said.
Dr. Lisa: You became your own as you said, prince charming.
Kate: Yeah. That’s a concept of Barbara Stanny who’s been one of my mentors. She wrote a great book called Prince Charming Isn’t Coming, which is a somewhat depressing title. However, the concept of the book is really become your own prince charming. I had noticed for myself, I was waiting for somebody else to take care of me. I’m shocked even saying that right now.
I was raised in a household with two doctors. I have an Ivy League education. I’ve had so many things supporting me in being all that I can be. Yet, I was still thinking, “Well maybe some guy is going to come around and take care of it for me,” or “Maybe my mom is just going to do it for me.” I really saw the way I would step back and not take action because I kinda hoped somebody else would do it.
I did become my own prince charming. I took the bull by the horns and said, “You know what? I’m not going to wait for somebody else to do this. I am going off on this trip. I’m doing it by myself.” Ultimately, I ended up not doing it by myself but the intention was to do it by myself. “I’m going to create the life I want right now and not wait for something else to come along.” That was a really powerful choice.
Dr. Lisa: Walk me through some of the other steps that you suggest to people and steps that people can find when they go out and buy your book.
Kate: One of the things that you can do is honesty and telling the truth are just such a key aspects to living a whole-hearted life but also getting your finances together. I was living in financial avoidance as I mentioned. Literally, I wasn’t opening my credit card bills. I avoided doing this for so long. When I finally sat down and added up everything I spent, added up everything I made, added up everything I owed and to whom and by when and the APR rate was.
The energy that I got from doing that exercise and telling the truth was tremendous. I felt like a superhero. I felt like I could do anything. In order to know where we want to go, in order to get the directions for where we want to go like you’re typing it in to a GPS, you have to know your current location first. I was living in Lala Land around on my current location. I have found in talking to people that’s the common scenario.
There’s a lot of vagueness around money. If you cut the vagueness and get honest, then you can set about creating the financial reality that you really want. You can’t do that unless you know where you’re starting from. Tell the truth is really one of the most important steps that I find. Also when you tell the truth, it also diminishes a lot of the shame surrounding money.
Money can be such a source of shame in our lives. One of the best ways to alleviate shame is to talk about it. That immediately lightens the emotional load so telling the truth to yourself. Then also finding somebody you trust, who loves you unconditionally to tell the truth too as well can be incredibly healing.
Dr. Lisa: You also talked about … I don’t think you call it payments but blessings already received which is an interesting way to look at I guess we would call the… Some people would call them debts or invoices but you’re looking at it as … this is money that I’m paying for the chance to have made a lot of texts to people I love last month. I’m going to thank AT&T for that chance. Is it reframing also that is useful as people are going through this process?
Kate: I think it’s hugely useful because money is … we just made up money as humans. It doesn’t exist. It really has this very strong energetic component. Some people would say money is just energy. I like to stray away from that slightly just because it’s a little too woo-woo for some people. Really money is a stand in for what we value.
To use money properly, what we need to do is align it with our values and get into valuing tremendously what it brings us because money is just a tool to create certain experiences, to buy certain things, to invest in certain things, to grow certain things. When it comes to paying your bills every month, I love renaming them invoices for blessings already received. That just changes the whole energy of it.
Yesterday, I was paying some invoices. One of them was for my assistant. One of them was for some food and one of them was for some video editing. I took a moment as I was writing checks to get into a place of how often is it that I now have these five beautifully edited videos that I can put out to the world? Thank you Stuart for that. How great is it that I had two weeks that help from Jessie who helped me out. She’s awesome. How often is it that I have this incredible food from Jenny and a great birthday cake for my fiancé?
Really taking that time as you’re paying those invoices for blessings already received to relive the value of the things that you have gotten instead of saying, “Uh, I have to pay bills again.” That’s an awful way of going through life. You’re going to have to pay bills for the rest of your life. Why not make it a fun, juicy, joyful, grateful experience?
Dr. Lisa: You also approached spending and buying things the same way where you know that … all of us know that we need to “cut our expenses” if we’re going to try and save money and put it towards our debts or put it towards our invoices for blessings already received. You talked about it in a way that makes it more palatable. If I save this money, then it’s more money for me.
Kate: Yeah, there’s this concept of a Money For Me account. You can open it as a free savings account online. You could stash it in a tin coffee candle, whatever you want to do. The idea is when you are spending money to ask yourself, “Would it feel better to spend it and have this thing I’m about to buy or would it feel better to essentially pay myself and put this money in the Money For Me account?”
Everytime you have unexpected income, everytime you ask for a fee to be taken off your credit card or your bank account, everytime you were about to spend money but you decided not to, everytime you have a captured expense like a child who’s in daycare but then is going to kindergarten which is free, take the $800 or whatever and put it in the Money For Me account every month. Otherwise it just gets lost in your family’s expenses.
At the end of the month, you can look at that Money For Me account and see and really feel how good it feels to pay yourself instead of buying stuff. Then you can do what you want with it. You can put it in savings. You can put it towards paying off debt. You can put it in your child’s college fund, whatever it is. What you’ve begun to do is rewire yourself so that saving money and paying yourself begins to feel more abundant than spending money. It’s actually creating a different emotional experience and you’re training yourself like Pavlov’s dog.
Dr. Lisa: How much time do you suggest people spend on I guess understanding their money and setting plans? How long does it usually take before people get into a place where things are looking good again?
Kate: That’s a great question. Studies have shown that it takes 21 days about to form a new habit. Then those new habits have to take hold so that your reality shifts. Actually, I had somebody who’s reading the book right now. I have a Facebook group for people who are reading the book and anybody can join in on that. She just did the first chapter, which is telling her own money love story.
She said that she actually didn’t have the money on her credit card to buy the book and she had to wait a few days to put together the $10 to buy the book. She was in a serious financial pickle. She said within a few days of doing some of the exercises and shifting her energy, she had a $2500 windfall and now is able to pay her overdue electricity bill, pay her mortgage and have a little breathing room this month.
She only did chapter one. She’s just getting started and the shift and energy can be fast and profound. I really invite people to have a quantum shift like that and to say, it is possible to change things fast. It doesn’t have to take years. It doesn’t have to be hard.
Dr. Lisa: That last part is important and in fact you addressed this that even as you’re saving money, you don’t want to throw it all towards your past debts because that can be very disheartening.
Kate: Absolutely. A lot of people will go from getting into debt to getting into deprivation and feeling like, “Oh my gosh, I’ve been bad. Therefore, I need to punish myself by not allowing myself to eat out, by never buying anything that’s not absolutely necessary, by keeping my house freezing cold which would be awful in Maine, things like that.
Then they spend years suffering as a way of “atoning” for their sins of going into debt. The reality is you made the decisions you made in the past. You were a different person then. We all have things that we wish we had not done in our past. Beating ourselves up for it in the present doesn’t actually help us change because beating ourselves up in the present for things we did in the past just makes us feel bad.
When you feel bad, you don’t make great decisions. The idea is allow yourself to enjoy the process today of digging yourself out of debt, of living abundantly no matter what. How can you get that feeling of abundance from not spending very much money. That can be a really fun game. Is it doing an at-home manicure and pedicure with your daughters which would not cost you more than a bottle of nail polish. Is it taking a bubble bath which it turns out is free? All those different things can really create that consciousness of abundance without needing to spend a lot of money.
Dr. Lisa: Where do people find out more about your book? It sounds like you’ve got some DVDs coming out. I know that you have a very strong online community. What’s the best place for people to go to?
Kate: If you go to katenorthrup.com, you can find all of that. I do a series on Fridays called Financial Freedom Friday and those videos come out over e-mail and there are all sorts of free content on my website including a quiz about what your relationship with money says about you that you can take for free.
Dr. Lisa: What are your favorite things to do when you’re not thinking about your career and the book that you wrote, and you’re not planning your wedding? What do you like to do?
Kate: I love to be on the water in Maine. I just can’t imagine living somewhere not on the water. Paddle boarding, sailing, just sitting on the beach, I love that. I love to dance, whether it’s a classic Casco Bay movers or just heading over to Zumba. Those are my favorite things. Then I practice a lot of yoga as well. I love to practice yoga.
Dr. Lisa: Do you think that the time that you spend with Julia Littlefield in her drama camp in Yarmouth, Maine, do you think that has contributed positively to your life now?
Kate: Absolutely. Absolutely. It’s so funny. I’ve spent a lot of time doing theater and performance growing up with Lynn Erkinnen and the playmakers and all these different things and I do. Funny I feel like now some of what I do is a little bit … it’s not a performance because it’s real life but it’s also like you’re standing in front of people speaking or whatever. I’m so glad I had that training to practice.
Dr. Lisa: In some interesting way, everything has led up to the person that you are now and to what you’re doing right now.
Kate: Absolutely, yeah.
Dr. Lisa: We’ve been speaking with Kate Northrup who is the author of Money: A Love Story. She’s also so much more. I really encourage people to go and spend some time on her website and also pick up her book and give it a look. I really appreciate you’re coming in and talking to us today Kate.
Kate: Thank you so much. This was a lot of fun.