7 Money Practices (To Grow Over Your Lifetime) | Episode 153
One Big Happy Life's Scarlett Cochran is here to talk about the 7 Money Practices you’ll want to grow over your lifetime to help you become an inevitable millionaire. Scarlett is an attorney, financial expert, and entrepreneur. Scarlett wrote the book "It's Not About The Money"y to help people become inevitable millionaires and live "One Big Happy Life." For more information on the episode head to www.sincerelyfutureyou.com
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Full Transcript Below
*Disclaimer: the transcript is autogenerated.
Scarlett Cochran 0:00
Someone out there right now is starting from lower than where you are right now starting from further back, and they're doing the exact thing that you want to do, and they're gonna succeed at it. So why not you? If they can, why not you? And that's the question I asked myself all the time if they can, why not me?
Jessica McKinley Uyeno 0:21
Welcome to sincerely future you a podcast that helps ambitious women like you make decisions today with the future you in mind. Hey, hamsters and welcome back to sincerely future you this week. We have Scarlett Cochran back to talk about seven money capacities. And I heard from you guys, you could not wait for part two of this episode, where she's going to talk to you about the seven money practices, you'll want to grow over your lifetime to help you become that inevitable millionaire. To refresh your memory. Scarlett is an attorney, financial expert and entrepreneur, as well as a friend and colleague and she just launched a book. It's called it's not about the money. And you're going to hear all about it here in part two, not just on earning, but in terms of what you teach. I'd be curious like, in the book, are you giving a lot of your like any of your practices that you teach in one big happy life? What's that look like? What can we expect in the book?
Scarlett Cochran 1:25
Yeah, I do. So what's funny is in writing a book, I actually developed new frameworks and new ways of thinking about the things that I was teaching. So there are things in there that I've never talked about, and I actually purposefully didn't talk about, because I knew that I was teaching it in the book, which is the seven money capacities, which are really tangible ways of thinking about the skills that you need to develop in order to be really effective with money. So things like understanding, making good financial decisions, losing money well, right. So being comfortable with risk, recovering from loss, and not making those losses caused you to then make even worse decisions, because you're so upset about the loss that happened in the past. So those money capacities, I really do feel are a core learning that everyone needs to understand that these seven things are really important and capacities that they should be looking to grow over the course of their lifetime. But I also teach very specific money practices that I teach inside of wealth builders society is my program. And some of them are the one year spending plan, which I swear by which is having a year long spending plan, where you plan your spending out for the whole year, it truly only takes like 1520 minutes, especially when you're used to doing it. But what it does is help people take just a slightly longer term view when it comes to their finances. Because I truly believe that people need to think beyond the next paycheck. Because there are things that are coming three months, four months, 12 months, like holiday spending anyone that we know they're coming. And the best time to plan for them is not November, at Black Friday, yes, January at the beginning of the year. So the one year spending plan, I walked them through that understanding and calculating their network. And also a big one for me is automating your finances. And this is something that I really took to heart when I got divorced. And that was really the first time in my life, my adult life since figuring out my finances, because I used to like not pay bills and stuff like that early, early on, right? We're talking 1920 years old, figuring out how to pay bills on time. But when you're going through a divorce, and you're also you know, a working mom, you're trying to keep it all together. And even again, like I had an amicable divorce, it wasn't like this knockdown drag out horrible thing. But it was still very emotionally overwhelming and stressful for me like all of that uncertainty. And I wasn't checking them out, I wasn't paying the bills. And next thing you know, I'm 30 days late on something and it deemed my credit, you know, for the first time in however many I don't know, almost a decade since I've been late on something maybe not that long, like five, six years. But I was so upset about it. And that's what I'm like, You know what, that was my mistake. I should have just had everything on auto pay. And so just walking them through the process of doing that and how to set up your Finances so that they are easy. I feel managing your money shouldn't take a lot of time. It shouldn't. And I believe it should be as simple as possible. So you focus on the big rocks, the most important things, you put everything else on autopilot so that you're not making the same unnecessary decisions over and over and over like your water bill is coming at the same day, same month every year. Just make it every month. Just make it easy for yours. though so absolutely. I walked them through creating a money practice as well.
Jessica McKinley Uyeno 5:03
So good. Yeah. Because I know I follow you over i one big happy life and you work with people, not just entrepreneurs like all human beings and personal finance. And I work with entrepreneurs and which is like a very different thought process. Specifically, like with them, like we I talked about the six areas of engaging with money like earning spending, saving, investing, having and giving and thinking about it like more holistically, like you said to. But for those of you who are listening, who are not an entrepreneur, like, I know that it's just a different way of thinking, and I absolutely 10 out of 10. I mean, if you're, if you've been listening this far, you can tell that Scarlett knows her stuff, I think that I just wanted to have you on the show to to give that more well rounded picture of what it can look like if you're listening. And a lot of people are like, Oh, I wish I was an entrepreneur, sometimes I just listened to your show for the mindset piece. But I'm like, No, the money piece is important, whether you're an entrepreneur, and you have the capacity to increase what you're earning, like, any day rather than at the end of the year, when you're getting a raise, you can still increase your net worth. And I know that that, obviously is what you speak to. So I if you if you had kind of one or two things that you wanted to make sure that an entrepreneur heard about this, like, I would be curious because I think a lot of my entrepreneurs, they really only want to talk about earning. And that's where an entrepreneurs brain is. So where Yeah, speak to your entrepreneur ideas. If you
Scarlett Cochran 6:47
so my, my my entrepreneurs. So one of the things that I tell entrepreneurs first of all, like you keep your business finances and your personal finances separate, right, too often, we treat them as the same. And they're Yes, your personal finances can inform your business decisions, right? How much you are going to pay yourself how much you want to grow your revenue based on how much you want to increase your personal lifestyle, and I get it, but keep those two things separate and actually pay yourself. My one of the biggest mistakes I made my first year of full time entrepreneurship is that I didn't kind of have a set pay, I would just kind of pay myself as good, right, which is the worst thing that you can do. Because then you're always the last to get paid. And Joe's I remember back in the day like this is only like five years ago, Joseph would say the business owes you money. Like my husband slash accountant, Joseph, the business owes us money, because the business wasn't always able to pay me. And so one of the best decisions I made was to just go w two in my business and get that baseline salary. But also entrepreneurs, we fall into the million dollar business owner trap, where we defer taking care of our personal finances because we're waiting on the windfall of the million dollar business. We want the easy button because it's like, oh, yeah, the year when I make a million dollars, first of all, you're not going to take home a million dollars. Let's also just like dash
Jessica McKinley Uyeno 8:21
rocks is horrible. That was one of the reasons why I did that annual report because I was like, I wanted people to understand that, like my business revenue was $200,000. And then I spent over $50,000 in coaching, like from that. So my take home pay was actually slightly less than 100,000, which still is like for a business owner, like 50% or six, like revenue is like very good. But it was like less, but I'm like, I I don't think that people understand what it means to have revenue and then to have your take home. So yes, yeah, I
Scarlett Cochran 9:01
mean, just to run my business, because you know, I have a membership. So you know, we'll have we might serve 1000 people a year. But so just to run the systems of my business is around 25 to $30,000 a year. And this is not this is not people, this is not labor, this is not paying me, this is not paying my team. So yes, a million dollar business doesn't mean you take home a million dollars. But I also let's be realistic. It's almost like saying, I'll only be a lawyer if I go to Yale, which is the number one law school which I did go there. But look, I was open to other alternatives. Okay. Gail admits I think it's something like 5% 6% Maybe less of the people that apply. So if you're saying the only way I'm going to be a lawyer is if I go to Yale, your your odds of success are much lower. And I say this because the number of people the number of businesses Small Businesses that actually become million dollar businesses. And this is not at all to dissuade anyone from setting that amazing goal. I think we absolutely should, especially women, because we need more women business owners making a million dollars a year. It's a lower percentage, right? It's like 6%. But the good news is you don't have to have a million dollar business to become a multimillionaire. And this was something that I shared, when we were at, you know, the mastermind like, early 2022, gosh, where's I know, right on. But you can have a multiple six figure business, you could make three 200,000, even 100,000, just depending on what else is going on in your life and what your expenses are, and still end up with 235 1015 $20 million in your nest egg. Because you take the easy path, the easy, lazy path to building wealth, which is that you just invest small amounts of money over a long period of time. And that's the mistake that entrepreneurs make, they're not investing in other investments. So they're not diversifying, they're putting all of their eggs back into their own business, which, again, I get that urge. But you diversification allows you to mitigate risk, right? To minimize the risk that you're taking, you don't need to put all of your eggs in your own business basket, spread out the investments into some other people's businesses, so that money is working for you and growing. So then you don't have as much pressure on your business, you can allow your business to grow on its own timeline, versus beating yourself up that you're not already at a million dollars in revenue. It's so
Jessica McKinley Uyeno 11:36
good. And so like, that's the investing piece. And then we've talked about the earning piece and investing and saving kind of like hitting the same buckets here. And when I think about spending to, uh, you mentioned about the, the cappuccinos, and I couldn't agree more. First of all, I we literally just upgraded our Nespresso because I was like, oh, Nespresso. I'm so fancy for a while. And then I was like, this isn't good enough. I love a latte. I don't drink coffee regularly. I want a luxury experience. I used to live in Spain, when I had coffee. It's a whole experience. And that's how I think of it. And I was like, You know what, when I when I think about what my take home was, which is still very good. I realized, like I'm a lot further along than I was for a little while. I still think people are confused. If I told people what my take home was obviously like post taxes. I think people would be like, How can you live? The life like I'm going to Costa Rica this August when you think about your spending when you're meticulous with where your money is going. And when you put it towards your actual priorities. And when I say like, Hey, you know what, it's not important for me to have a house keeper, because like, I'm like, oh, that's just not important. To me. What is important to me is that I'm able to do a super luxury vacation once a year, it is important to me to have cappuccinos. I like clothes. But do I need a ton of clothes? No, I like to buy one really nice piece of clothing per month. And when you're really thoughtful about the way that you're spending, it's easier to spend less money in a more impactful way.
Scarlett Cochran 13:20
Would you agree? 100%? Yes, so much of our spending is really the default spending. We're just spending and not really thinking about it. We're not being intentional. And that's another reason why I recommend the one year spending plan because guess what else you're planning for you're planning for the vacations, and vacations I know this firsthand are one of the first things that would get pushed out of the budget with the stereotypical story like, oh, I can't afford that. We just tell ourselves, we can't afford it. But we never actually sit down to look at the numbers and ask ourselves, well, if I want this, if this is a priority to me, how can I make it happen? And what am I willing to not do instead? And yes, you will have to make trade offs. But the thing is here that you decide on what really excites you what you look forward to doing. And so for me, it's also vacation. So like we're getting ready to take my daughter to Disney for her 21st birthday. So Alexis, the daughter I had when I was 19 is now about to turn 21. And I did get a little bit of sticker shock because the post pandemic prices are very different from the pre pandemic prices. But you know, I'm adjusting like this is the reality of the world that we live in now. And so now the question is, what are we going to do about it? But it's making sure to prioritize those things. And yes, those luxury things. So one of my long term eyes on the prize is I want to add an extension onto our house and add a pool and that's like 300 $400,000 of expenses that I'm planning for the house I have to have but I want to have I want to add a gym to our house. So for my health, I want to add a pool to my backyard to make memories with my family in our backyard pool. And it's okay to say those are the things that you want. But that also means well, I won't be spending three or $400,000 on some other things. And also it means that I'm looking at my income and I'm saying, Alright, income, here's what we need to be doing within the next like, ideally three years. So how are we going to make it happen? And that's why I say, you know, it's not about the money, you start with the thing that you want. And then you start asking the question, like you said, asking, if you want a different life, you've got to ask yourself better questions. And so are you like, before this, I wasn't asking myself, hey, how do I just like make three or $400,000. So I can have this thing. But now that I am asking myself that question, it now becomes possible for me, because I'm at least considering how to do it.
Jessica McKinley Uyeno 15:49
One of the things that you brought up about, like, Oh, when I get there, which is Do you understand the math of what it would cost to have the thing that you want when you're a millionaire. And for me, that was a private chef, I was always like, I would love to have a private chef. I don't enjoy cooking. I love to eat healthy foods, but I only want healthy foods that are like really, really gourmet. Same Yeah. And so I had a client that owns a private chef business, she cooks vegan food for Justin Timberlake and JLo and all the things and I was like, I want to hire her. But like, even like, it's ridiculous, like per meal. It is. I don't even want to say out loud how much it is per meal, right? And like, please know, you've got to tell it would boil down to about $3,000 a month and that's for for lunches for dinners for me, my husband and my six year old, right? So notice, like my six year old,
Scarlett Cochran 16:49
that's only like half the week.
Jessica McKinley Uyeno 16:51
Okay, okay. So it's like $750 a week, which I would say my grocery budget on average is about, like, maybe $1,000 a month for groceries, then maybe I have $1,000. In dining out like I mean, you transparent, maybe I spent $2,000 on food a month. And this would be $3,000 for four days a week? I'm like, I don't know. And then I just decided to ask myself those questions like, What would have to shift amongst the six areas that we engage in money is like, do I want to up my earnings? Do I want to put all of the pressure in the earnings basket? Or do I want to have some of it on reducing my expenses? Do I want to pull some from savings? Am I more focused on this current thing versus that future thing? And when you're clear about all the future things, it becomes easier to say no to that. If it's just generally the future I see my clients be like, oh, yeah, like, let's do this now. Because like the future can wait. But it's like, when you're really clear about in three years, I want to pull in the backyard. That's harder to say no to then like I want to, I'm gonna like retire at 65 and have a nice life. I think it's important to have like those midway, milestones to keep, yeah, gosh.
Scarlett Cochran 18:16
So I have two things to say about it. And I want to touch on the retirement piece and how we can prioritize that. Because I do feel like investing. I believe that investing for retirement is one of those Keystone money habits, it's not something that you get to not do. So that's I will put that out there that we do. It's like brushing your teeth. You could not do that, but all of your teeth are going to fall out. Okay, so like it is it is required. I felt that way to do that and move your body. You brush your pee. Yeah, that's an I'm trying to lean into working out is something that I just do. But it's just like for other people with money. That is a skill that you're going to have to develop in your mind that if not a month goes by where I'm not investing for my future period. But the fun thing about because I've been having the same private chef thing because food is the thing that somehow is the hardest for us still to get together and always have especially when you want healthy food that is going to nourish your body and help you live a long healthy life. It's it can be challenging to get that food on the two and you want delicious food.
Jessica McKinley Uyeno 19:25
I'm right there with you when you want it like I'm done. I'm hungry. I don't want to be hangry
Scarlett Cochran 19:29
and I want it now. Exactly. And so but what I thought if I did this exact same math, how much will a personal chef costs and it's true, I was because I'm like all my meals so 4000 $5,000 But then I asked myself, you know, what else am I doing? That I could be outsourcing for less than the food part because it's not that I mind cooking. It's that I feel like I don't have the time to make the kind of food that I want to have. So could I I do $2,000 to outsource, maybe I don't do my laundry anymore. Maybe I don't do my cleaning anymore. Maybe someone else also does my grocery shopping and my meal planning, but the only thing I do is cook. And also how can we make this like, blend it with something else that I enjoy doing, like family time? Yeah. So maybe we spent 45 minutes together as a family in the kitchen cooking catching up on our day, and we sit down when we eat that meal together. But that's the only chore that we're all dealing with on a day to day basis. And so when you put $1 amount to that, then you can start asking yourself, Oh, well, maybe I don't want to spend, maybe my actual problem is not that I don't want to cook, but I would rather put like have half the money like 2500, towards solving all these other problems so that I can cook and then I still have this other 2500 a month to do some other thing like luxury travel.
Jessica McKinley Uyeno 20:50
So good. What I call it is like solving for x, you can't solve for x until you have all the other pieces of the equation. If you don't know the math, you don't know what it is, if you don't know the time that you want to spend and where your priorities are like the things that are not about the money, then you can't do that. And most importantly, this podcast is called sincerely future you because all of the decisions that I want entrepreneurs, and really just everyone to be thinking more about is like, not just thinking about yourself as the person you've been up until now and the person that you are today, but also the person that you're going to be and you're looking forward to be and how do you make your decisions now from that future self rather than from today. So like you said to it's like family time, like your daughter is not around all the time. And so you want to maximize the time that you do have with her and you want that to be special. So you're gonna factor that into the equation too. And just so everyone in case Everyone's curious, I did actually solve for my chef problem. And I did pitch them because she has a new partner that has a new like celebrity chef. And so I am going I'm doing bartering which I never do. And I do not recommend that people do but we're doing two months of meal prep for a, like a partial barter on my six month coaching program. And it is a win win and truly a value match for both of us. And I never would have come up with that solution. Because it's a policy of mine that I don't really barter for services. If I wasn't really clear about like, this is the goal. How do I make it happen? This is the deadline and I put a deadline on it for June like I want this to be solved for by June, even if I have to pay all of it for one month, I just want to try it and experiment and go there. And so high quality questions, my friends. But I just want to make sure that everybody is left with you having like the final say, I really think that you have so much to teach our generation of women, I think that your words are very precise, and they're thoughtful. And that is something that is very important to me, I don't have too many guests on the show. And so when I do if they're not hap stirs themselves, if they're not clients, they're people who I think really just sharing the same core values about thinking about the future self thinking about the audience of women and money. And also especially single moms and entrepreneurs. And I know you speak to all of those people. So if you had one thing that you didn't really get to say that you want people to think about as they're considering their future selves, anything that you want to add Not to put you on the spot.
Scarlett Cochran 23:38
Yeah, I would say probably the biggest life lesson that I've learned now, like now, after all these years is really realizing that I can shape my life to look like whatever I want it to look like. I think so often we get caught up in the box that we're born in when it comes to societal rules, and the way of doing things that we lose the perspective that this way of doing things is, by the way, just something someone made up some time and everybody just agreed to follow it. But we but we know our history, we know that if we look back, things used to be done a very different way. Right? As women, we used to have very different lives. That just a short like 50 years ago, 60 years ago, a man could just beat a wife and it's not a problem. That was okay. And so just recognizing that we don't have to follow any of those rules. We can just decide no, I'm just going to do something different. And just live our lives and allow ourselves to see what happens right? We can be the first someone out there right now is starting from lower than where you are right now starting from further back. And they're doing the exact thing that you want to do and they're going to succeed at it. So Why not you? If they can, why not you? And that's the question I asked myself all the time if they can, why not me, I mean, I'm, I'm a person too, we can both do it together. So that's my my bit of advice, just like go after the life that you really want. And use this opportunity to live the fullest version of your life and lean into the person that you are and you can be successful just being the person that you want to be so good money as a tool to
Jessica McKinley Uyeno 25:30
have the life that you design for yourself. I love it. Thank you, Scarlet, so much for gracing sincerely future, your podcast and for telling us all of the sneak peeks of what we can look forward to for your book coming out. If you haven't, you can now currently right pre order. It's not about the money by Scarlet Cochran. We'll link that in the show notes for you. And I think I I'm pretty sure I just printed it on Audible,
Scarlett Cochran 26:00
or I saw it pop up. Yeah, it's, it's in all the places. So yes, I narrated the audiobooks. It's available on Audible. Yes. But it's also available everywhere where books are sold. So target Barnes and Noble, your local bookseller, shop local, if you can to support your local booksellers. And yeah, just or you can go to one big happy life.com forward slash book, which is in the show notes, I'm sure. And all the links are there as well. international audiences too awesome.
Jessica McKinley Uyeno 26:29
And I'm so proud of you. I know sometimes, like, it's like, we just keep it professional, but I just, you said it, too. Like you're a person too. You're a human being too. I know that when you were like a single mom, and you were grinding and you were hustling, and when we didn't know what we know now, I don't know, Did you always know you were gonna write a book. I did not
Scarlett Cochran 26:53
always know. And so here's the funny thing. And maybe this is also a good thing to leave the audience with. So in my acknowledgments, which, you know, my publisher told me, no one reads, but it's fine. I read it. I actually acknowledged myself, I'm the last person that I acknowledged like my, I acknowledged my younger self, like talking to myself, like, wow, you know, we have come such a long way. I'm so proud of you. And it felt really like a little a little audacious to be like how we think and myself in my own book. Yeah, but I think as women, we don't pat ourselves on the back enough, it's like not okay, for us to say, Wow, I did a really good job. And I'm so proud of myself. And I was scared to put that in there. But I wanted it in there for myself. And so I just leave that with everyone listening to be proud of yourself and unabashedly so. Right? Because you should be your number one cheerleader,
Jessica McKinley Uyeno 27:52
and no matter where you're at, because you're on your way you guys are learning. And even if you don't have any money in retirement, be proud of yourself, because you're gonna start today, right? Yeah. Amazing. All right. Thank you, Scarlett. We'll talk soon. Hey, hamsters. If you want to learn more about today's topic, head over to whatshappyning.com/podcast If you're a business owner, and you're resonating with what we talked about here, what are you even doing come hang out with me over where the party's at on https://www.instagram.com/whatshappyningwjess/
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