#30 - Fear Costs More Than Inflation: Change Your Money Energy

Feeling the weight of today's unstable economy? You're not alone. In this crucial episode, I cut through the noise and fear surrounding rising prices, interest rates, and recession talk. I name the anxiety that's in the air and then zoom out to uncover the deeper lessons this moment is trying to teach us. 

Key Highlights:

1. Naming the Fear: Understand and acknowledge the collective anxiety surrounding the current economic instability, from rising costs to job insecurity.
2. The Power of the Pause: Learn why this "universal pause" offers a valuable opportunity for introspection and re-evaluation of your financial priorities and habits.
3. Mastering Your Financial Equation: Discover the fundamental equation of income, expenses, and savings, and how to actively adjust both sides to build a more secure financial foundation.
4. Shifting Your Perspective on Budgets: Reframe your view of budgeting from a restrictive measure to a tool for creating spending boundaries and protecting your financial freedom.
5. Identifying Opportunities in Uncertainty: Understand how those who are financially prepared can navigate economic downturns to their advantage through strategic investing and a long-term mindset.

Discover how to shift your perspective, take control of your financial equation, and even identify potential opportunities amidst the uncertainty. If you're feeling overwhelmed by the current economic climate, this episode offers a path toward calm, clarity, and proactive financial strategies.

Links:

1. Get Notified - Personal Finance Course!

Always and Never About Money Episode Links:
Video Podcast: https://www.youtube.com/@MoneyMasteryWithChelsea
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Money Mastery Website: www.moneymastery.work
Reddit: https://www.reddit.com/r/AlwaysandNeverMoney/

Transcript

Let's be honest. The energy in the air right now is heavy. The economy feels unstable. Prices are up, interest rates are high, and everyone seems to be holding their breath. People are talking about layoffs, tariffs, market crashes, AI taking over jobs, and whether we're heading into a full blown recession or just getting started, a lot of people are feeling this by way of increased cost of living.

Groceries and gas are significantly more expensive. Squeezing our everyday budgets, utilities and rents have gone up, and in some areas renters are seeing double digit percentage increases year over year. This is big. There is an increased credit card dependence and rising debts. More people are using credit cards just to get by, and now with interest rates at 20% and above, that balance is getting harder and harder to pay [00:01:00] off.

Household debt in the US is at a record high and delinquencies are starting to kick up. There are mortgage and housing strains. Those that are trying to buy houses right now are priced out by high interest rates. A 7% or higher interest rate is no longer a shock like it used to be. It's the norm. Even homeowners who want to move are stuck because they don't wanna give up a 3% interest rate for a 7% one and pay more for the house than they would have when they got theirs.

There is volatility in the retirement and investments sector. 4 0 1 Ks and IRAs have taken a hit, especially for those near retirement that can be terrifying. Some are pulling back from investing altogether due to fear and uncertainty while inflation eats away at their savings and it doesn't stop here.

There is job and [00:02:00] income insecurity. Layoffs in tech and other industries have created an atmosphere of fear and am I next? Freelancers and entrepreneurs are seeing slower months and delayed client payments. There is overall financial anxiety and burnout. Constant budgeting, saying no to joy purchases or guilt after spending on self-care is leading to money, shame, and emotional fatigue.

People feel like they're working harder. But getting less ahead. The media is loud and so is the fear. And it's not just economic. It's emotional. It's in our bodies, it's in our decision making. It's in the conversations at the dinner table. The stress when checking your bank account and hesitation before making even small purchases is something most of us are feeling.

There's a collective nervous system overload happening, and I get it. [00:03:00] When nothing feels secure, everything feels threatening. But here's what we're gonna do today. We're gonna zoom out and we're gonna name the fear for what it is, and then we're gonna get curious because if you know how to listen through the panic, there's a deeper question waiting for you.

What is this moment trying to teach us? I had a publication ask me for my opinion before the election took place around what is going to happen if so and so gets elected to people's finances? How is this going to hurt us? And my response, they were confused by, but they actually reached out to me two weeks ago and they were like.

I get it. I see it. [00:04:00] And what I told them was, I don't consider politics when I am considering my financial game plan. Politics come and go. It's never as bad as it seems in the moment, and even in the seemingly worst economic downturns, people somewhere. Are navigating it successfully without the financial struggle.

In times like these, when headlines scream, recession, confidence is shaken and fear runs high. What I find helpful to remember is that in times of struggle, be still because it never is as bad as it feels in the moment. When we can step outside of the noise, outside of the collective anxiety, we can begin to see clearly again, [00:05:00] because here's what happens, and this is also why I personally do not watch the news.

News tends to spread fear and because we are energetic beings, and this goes along with the saying of you are who you hang around. We are energetic beings. We absorb the energy of the people in the environments around us. Subconsciously when something like this happens, we have a choice. We can join the fear crowd or we can see through it and choose not to take on that fear-based energy ourselves.

The funny thing is when you're operating from a place of fear and scarcity. Things are not going to work out for you financially in the long term. And look, [00:06:00] yes. The economic changes we're experiencing are significant tariffs, market contractions, and declining consumer sentiment. They feel overwhelming, but let's acknowledge the real source of the fear and that is change.

We as human beings do not like change. We like consistency, familiarity, and to be comfortable. It's why some of us will chain will stay in a place that feels comfortable, even though we're struggling in that place, we've become comfortable with the struggle and we would rather stick with a comfortable struggle, then move to an uncomfortable change that will get us out of that struggle.

The truth about change is that it's always been with us. It is always happening around us, and so we have to learn how to embrace and navigate change. Change is [00:07:00] not the enemy. Complacency is actually the enemy right now. I would say that we are in what I call a universal pause, just like Covid. Covid was.

Quite literally a pause button. I mean, we were stuck at home. We couldn't go to work. When we did go to work, there was distancing with everybody. It was, it felt very isolated and detached. But the gift in COVID and what a lot of people experienced is when they were stuck with themselves, they weren't happy with who or what they saw in the mirror.

And when we see what we don't like, we then have the opportunity to change what it is that we're not happy with. Some of us were so busy before Covid hit, we didn't [00:08:00] even have time to stop and think about, well, I'm not really, this isn't really bringing me happiness. I don't really enjoy this job. I don't really get value from this friend group.

When we were forced to stop and pause and really look at our lives for what it was and what it was not, it gifted some of us the opportunity to change it. And a lot of us did. Covid had a lot of silver lining. In it, which goes to prove that it is never as bad as we think it is in the moment. There were a lot of great things that came out of Covid.

For example, remote positions opened up the work home life balance became more equal. We were given the opportunity to balance that out in a way that wasn't self-destructive. [00:09:00] And a lot of people have carried those new standards for what they're willing to invest and what job they're willing to take so that they don't risk the balance between their work and their home and their personal life.

That was a gift that Covid gave us. It was the gift that we can find inside of these universal pauses, because there is a lesson in Universal pauses. The question is, are you going to pause and reflect long enough to get it? So just like Covid, you can choose to step outside of the fear and chaos and pause and reevaluate.

This economic slowdown offers us a rare invitation that is to stop, look inward and ask what actually matters? What do I need and what have I been consuming to [00:10:00] avoid myself? What have I been doing to stay distracted? Where have I been spending money to stay distracted from the root? Of the issue because there are no money problems, only problems showing up in our money.

This is not the time to absorb the fear that you're hearing around you or in the media. It's the time to transmute it. Don't absorb the energy in the room affect it. Just because others are panicking doesn't mean you have to. The people who grow their wealth in moments like this are not the ones who react.

Impulsively, they are the ones who pause, reassess, and move with calm conviction. When it comes to money, this is the time to simply spend less, but spend meaningfully invest not in distractions, but in your healing, your growth, and your values. If you find yourself reaching for something to fill a hole through [00:11:00] money, through buying a thing, pause.

We are only buying a feeling whether it is paying your rent or your mortgage for peace of mind, whether it is buying alcohol or drugs to numb your mind. We are always purchasing a feeling if you are in a financial position where you need to cut back on your spending. Pay attention for those impulses to buy something.

When your budget tells you to hold off and think about the feeling that you are trying to buy with that purchase. Because what you might find is that purchase is filling a gap that you can fill emotionally and for free. And that's going to stop you from making unnecessary emotional purchases in the future.[00:12:00] 

And here's the truth, if you are in a financial crunch right now because of this commodity, the hard truth that I have to tell you is that what you missed was preparation. The difference between you and the people that are getting wealthy right now in the same exact commodity is that they were prepared what you can do to prepare for the next time.

Because there will always be a next time, and the best thing you can do is to prepare for it. Is to build a financial cushion, a financial peace of mind, so that in times like this, when everybody else is freaking out and going crazy, you have the calm mind and the ability to see the opportunities. There are opportunities in this economy right now and the [00:13:00] people that were positioned and prepared for what's happening.

Are benefiting financially from them that can be you. And just because it's not you during this universal pause does not mean that it cannot be you during the next universal pause. If you only take the right steps before it happens. And I want you to understand how people are building their wealth while other people are struggling to survive.

That is one very simple thing. They are investing. They're investing in things like the stock market, EFTs, precious metals, cryptocurrencies and assets, and this is the strategy of the most successful investors while everybody else is freaking out and pulling their investments out of the market. That is where they [00:14:00] save their money to dump into the market.

When everybody else is running in fear, they are dumping their investments into the market. And think about it this way, I. When everybody runs from something, the market value decreases. So if you have the cash on hand to buy up a share of that market, eventually it's going to bounce back. It's been proven since the birth of the stock market, while we see twists and turns by day, maybe even by year.

Overall, the stock market trend looks like this. So what they have positioned and prepared themselves to do is to wait for the opportunity when everybody else is running and prices plummet. They dump and invest, and then 3, 5, 7 years later. Their wealth has compounded because the market [00:15:00] has always bounced back in the long run, and that is what they understand.

They're not making moves for today, this week, this month, this year, the next five years, they are making long term strategic moves, and that is how they have the ability to rise above the current climate. Of stress and fear and freaking out and think past that moment because it is never as bad as we think it's gonna be.

There's always something to learn, and the best thing you can do for yourself is embrace the change and stop resisting it and be prepared for the opportunities that most everybody else are gonna miss. And sometimes, yeah, that does mean giving up what we think we really want. So let's go back to the list of how we are feeling this financially right now with the increased cost of living, [00:16:00] groceries and gas are going up, utilities and rent are going up.

My brutal honesty around this is that if your finances are so tight that. Even if groceries, utilities, and rent go up, you are stressed, then you are not managing your money well enough. Cost of living should never be the reason why your finances suffer. And I wanna give you an idea of how to change this equation.

Everybody is living in the same equation. We all. Go by the equation of how much we make, minus how much we spend equals how much we keep. And if you are in a position where the cost of living is what's going to break you, you were probably [00:17:00] living in a net zero equation. And what I mean by that is everything that you made was spent leaving nothing kept or not enough kept.

And there are two ways to rebalance your equation. The first of which is what everybody goes to, which is, how can I spend less money? And yes, that is important because the truth is a lot of us spend money that we really don't need to, and a lot of us spend money on things that are, again, filling a void that we need to heal instead of spend money on to patch.

We also have to think about this part too, for the people that are living paycheck to paycheck. You are coming off of a few years of an inflated idea of how much money you have during Covid. Some of the financial relief that lower to middle [00:18:00] class America received was in the form of checks. They literally paid us.

During Covid, and we got used to that money. Some of us went out and locked ourselves into a seven year car loan. Some of us went out and bought a house that we felt like we could afford then. But when those covid checks stopped coming, we realized we made a mistake. We can't really afford this. So recognize, if that's you, what happened there that led you to increase the second part of your equation?

How much you spent? So this is a great piece of the equation to look at. Yes, you do need to evaluate where your money is going and get control of it so that the goal is to leave money that you can keep, save and invest. Now, the other piece of the equation that can really change your position and the one that people [00:19:00] don't think about as often is how much you make.

You can only cut so much from your budget. At some point, you're just not going to be able to cut anything else to be able to live and survive. But how much you make is unlimited. Unlimited. The only thing stopping you from making more money is your mind what you believe you are worthy of making. What you negotiate as what you are making at your current job.

Your willingness and confidence in yourself to start a profitable side hustle. Your attention is best spent on focusing on how you can make more, and if you address these two pieces of the equation, you will find that how much you make. How much you [00:20:00] spend equals what you keep, what you save, and eventually what you invest.

And this is what the people that are profiting off of this current economy did. Right? They prepared by living below their means. Stashing money away so that when this opportunity came, they could invest and profit off of it. And because so many people are living in even a negative equation right now, they're spending more than they make.

That is what is leading to credit card dependence and rising debt. And what you might have to accept at this point in time is that you're not gonna pay that debt off right now. Something is going to have to change in your equation. Before you can start paying off that debt. But what I need you to hear right now is that that's okay.

It can be done. Focus on the variable that you control, how much money you make and how much money you spend. [00:21:00] Because if you do that for long enough, there will come a day when your equation changes and you do have money that you can keep, save and invest. Your game is the long game. The key to making it is consistency and honoring your spending boundaries, which means having a budget.

But what some of us need to do is shift our perspective on how we see a budget. A lot of people view a budget as a restriction, something that limits them. It's gross, it's ick. I don't wanna live restricted. But what I encourage you to do is get a perspective shift on what a budget is. If you create a budget for your equation and you put down how much you make, and you list the things you're willing to spend on in a way that leaves you money to keep what that budget becomes for you is a boundary.

It is your [00:22:00] spending boundaries and what those boundaries are protecting is your future financial freedom. And view those boundaries as not only a protection, but freedom to spend however you want within the boundaries of your budget, because that is what is going to take you from where you're at now to where you really want to be.

I. And then we come to the mortgage and housing strain. Now, when I was younger of the age of looking for a house, it was they, the houses were, and the rent were incredibly affordable. It was more in balance with what the cost of living was and how much we made. I have been saying more and more lately that what I.

Accomplished as a 20-year-old single mother and the way like, look, I hustled my ass off. I worked two jobs, went to [00:23:00] school full-time, paid rent, everything financially I was responsible for and I did it. I not only survived, but I positioned myself and did the work and put in and had the patience for time.

I did it and I'm here and it worked. But if I was that same 20-year-old single mother now in today's economy, my strategy wouldn't work. And so my heart goes out to the people who are in this position right now. Timing is key and patience will give you the space to find the right time. We are brought up to have the goal of owning a house, and that goal is no longer realistic for people that don't already own a home.

And what I think you need to hear now is that. That's okay. Number one, I believe we [00:24:00] were given this false, this false perception of owning a home is the way to go. It should absolutely be a goal. It's an asset. All of the reasons why people told us we have achieved something. If we can own a home. More and more I hear financial experts talking about the fact that owning a home is not as glamorous as we were believe, as we were told to believe.

Number one, there are a lot of phantom costs in owning a home. It costs a lot of money. If one big thing on your house could go out, and if you don't have thousands of dollars in the bank to repair something like a roof or cut down a tree, or replace a furnace. That's a situation. Not only that, but it's a lot of work and time and effort to be responsible for a structure and the land.

And so what you really have to ask yourself is if it's your goal to own a home, is that actually your goal? Like when you [00:25:00] understand what is really involved with owning a home, and number two, it's not as profitable as an asset if you don't make a strategic buying decision. And this market right now.

There aren't many strategic buying decisions when it comes to housing. So you can buy a house, but if you paid too much or your interest rate is too high, or you take out a home equity line of credit and you extend the payments, it's not actually a profitable asset for you. So when you truly let go of what people have led you to believe about owning a home and look at it for what it factually is.

Do you really want to own a home? Because what a lot of people have been shifting to the wealthy included is renting because there's no financial responsibility outside of that monthly rent of the utilities, and they are not responsible for maintaining the property. They're valuing their time more than their valuing this asset that requires them to take care of it.

So [00:26:00] not owning a home is okay. It's okay. And this is your permission slip not only from me, but other financial experts. You don't have to own a home to be wealthy or to feel like you've accomplished something. Heck, when I leave this house, whenever that might be. 'cause I love the home I'm in right now, but when I move.

I am not owning another home. I am one of those people who sees way more value and return of my time to rent, as opposed to owning a home and being responsible for it. So it's okay. And here's the thing. You have no idea how the economy is going to look three to five, to seven to 10 years from now. If there is likely going to be a window of opportunity for you to buy a home, if you do decide, yeah, that is my dream.

I still wanna buy a home. I still see value in that. There is going to be a window down the road when that is more [00:27:00] realistic for you. So what you can do now is focus on balancing your equation to keep and save money so that when that opportunity comes up, you're positioned to not only buy a home, but put enough money down that you increase the return on your investment, making your asset more valuable and beneficial to you.

Now the next one is an interesting one, retirement and investments volatility. Here's the reality. The stock market has its dips from day to day, month to month, year to year, and there is always a certain level of risk when you're investing in something like the stock market that is subject to volatility.

And it is incredibly unfortunate when people who are at the age of retirement. That lines up with an economic downturn. The only thing, [00:28:00] number one, it's a fact that the market is volatile in short spurts. But again, look back, uh, the birth of the stock market to now, and it is completely upward. These downturns you can't even see on the graph.

What you would benefit from understanding is. Learning about investment strategies and paying close attention to your risk level because if you were to work with a, an investor, uh, a retirement advisor, the stereotypical advice that they tell you is when you are young. You can afford to invest in something that is higher risk because you have this whole timeline ahead of you.

You can experience the losses in between because at the end of that timeline, you're gonna come out on top despite these early losses. As you age and get older, you start [00:29:00] reallocating your investments to lower risk investments. Because you don't want to be in a position where all of your retirement is in these high risk accounts that are really feeling it during a violent economic environment.

So there are strategies to try and a void to the best of your ability being stuck at an age where you wanted to retire, and the market happens to be in a bad place in that time. If you are not at retirement age, but you invest in the market and you find yourself pulling back from investing altogether right now due to fear and uncertainty, while inflation eats away at your savings, I want you to really think about the fact that the best investors position themselves for and view this type of situation as an [00:30:00] opportunity.

Step out of the fear bubble and step into really thinking factually about your plan. If your plan is not to lean on your investments to fund your retirement or your lifestyle for the next three to five years, your fear is unjustified and you might be hurting yourself by taking a loss now. And sitting back and waiting.

Now that I wanna talk about job and income insecurity. Well, yeah, I can talk about that. And lastly, the pain point of job and income insecurity. Let's go back to the top of that equation that we are all living in. There are more opportunities out there and more ways to make money than you think. If you [00:31:00] only open yourself up, come from a place of curiosity and see how people are doing it.

People are absolutely making money right now. People, there are people who have job security because they've positioned themselves to have job security. The biggest block that we all have around the money we make. Part of our equation is tied to our perception of self value. How much we are worth, how much are we capable of making?

How much is it okay to make? Is there an amount that is not okay to make? Is it bad if you make too much money? Much money. We get in our heads the most about this part of the equation, what we need to do. Is identify our own [00:32:00] limiting beliefs around how and how much money we can make and start healing them.

Because when you do that, it opens up an entire new world of possibility. And I promise you, if you do the work to shatter your mental blocks around how much money you're worth, how much money you can make, and what you are capable of doing to make it. You will find an opportunity that completely changes your equation.

So we are in a universal pause. I encourage you not to take on the fear-based energy around you. Instead tap into the energy of the top 1%. Look at your equation. Look at your current situation. Look at where you want [00:33:00] to be. Be intentional with where you spend your money. Be intentional about healing the parts of you, the voids that you are filling with the things that you are buying.

Create a plan. Fix your equation now and prepare to be patient. Wealth is almost never accumulated overnight. Warren Buffet was 10 years old when he started investing, and his wealth was not realized until he was over 40. What he has mastered is the art of patience, and if you truly want financial freedom, you have to rise above the here and now and focus on that long-term goal.

If you liked this episode, be sure to show us some love by subscribing and turning on those notifications. You can find me on Instagram under [00:34:00] the Money Whisper, and also where we encourage you to contribute to join the conversation, ask questions, and share your thoughts. So we can create more episodes tailored exactly to what you wanna know about money.

I'm your host and your personal money whisperer. Until next time, remember, it is always and never about the money.