164. Reactive vs. Proactive Money Management | Why You Still Feel Behind (Even With a Good Income)
episode
Becoming The Wealthy You | How to Save Money, Stop Overspending, Get Out of Debt, Budgeting & Personal Finance for Women
24 min
1 speaker
5 chapters
transcribed 1 month ago
Transcript
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Transcript generated automatically by AI and may contain errors.
What is the main topic discussed in this episode?
You are listening to the Becoming the Wealthy You podcast with Jermaine Foley.
If you're a woman who makes good money in your career or business, but you're not building wealth like you want to, then you're in the right place. In this podcast, you'll learn how to stop overspending, break free from the cycle of debt, save lots of cash, and become the wealthy woman you were born to be. Let's dive in. Well, hello, everyone. Welcome back to the podcast. Okay, today I want to introduce to you a brand new concept, and I think it will explain a lot about your finances. especially if you find yourself feeling like you should be further along, like you are constantly overspending, you find yourself stuck in the cycle of credit card debt, or that you just can't really save or get ahead, even though you make good money.
For many of you, there are a lot of reasons why this is happening. It's very complicated. It's not just one thing. But I believe the concept I'm going to share with you today is going to shine a light on one of the things that could be happening. And today we're gonna talk about it. And that is all about reactive versus proactive money management. Okay, so there are two ways to manage your money. You can manage it reactively or proactively. And most women who feel behind financially, they handle their money very reactively. And this is not a knock on them. It's not that they're irresponsible or that they don't, have what it takes to manage money well, or that they're undisciplined. It's just that they're being reactive and it's just by default.
It's not deliberate. It's not on purpose. It's not intentional. It's just the unintentional way they've been socialized to handle money. And this is why a lot of times they're not where they want to be. So let's talk about what reactive money management actually is. So really all it is, is short-term thinking when it comes to your money. So you deal with your money on a month to month basis. You wait until something is close to being due to figure it out. You're not thinking long-term at all. You're not thinking about what's due six months from now. You're only worried about what's coming up, what's close, what feels urgent. So In other words, you handle expenses as they show up instead of preparing for them ahead of time or in advance.
So it could look something like this. You know Christmas is coming and you know Christmas is a very fun time for you. It's a time where you usually spend a lot of money. So instead of preparing for that, you just spend. think I'll figure it out when we get closer, right? You wait until November or December to figure Christmas out, even though you know it's coming. Maybe you're a part of an organization and you have annual dues, right? You know, they're coming in August. They're going to be doing August, but it's March. And you're just like, yeah, I'll figure that out in July or August. You don't make a plan or prepare for it so that when it comes, it's not a burden. Or maybe you have a vacation on the books and it's months away.
And instead of setting up a fund and planning for it ahead of time, you think, you know what? I make good money. I'll figure it out. It'll be fine. I'll either pull it from savings. Worst case scenario, I'll throw it on a credit card and pay it right back off. You reassure yourself. You soothe it over in your mind. And what you really do is you move responsibility from your present self forward to your future self. So you put all the responsibility and the figuring out on your future self. And the thing to really remember about all of the examples I just gave you is that none of them are surprises. We're not talking about an unexpected expense here. We're talking about something that you know is going to happen
It just doesn't happen every single month. It's irregular. And instead of planning for that, you just kind of wait until the last minute and then you scramble to figure it out. And that causes a lot of stress. It causes you to do one or two things I already mentioned. You either dip into your savings.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–5:41
2
What is reactive vs proactive money management and why does it matter?
5:41–8:18
3
How does reactive money management show up in everyday spending?
8:18–10:16
4
Why do predictable but irregular expenses create financial stress?
10:16–22:13
5
What is present bias and how does it make you postpone financial planning?
22:13–24:11
Speakers
1 identifiedMore from Becoming The Wealthy You | How to Save Money, Stop Overspending, Get Out of Debt, Budgeting & Personal Finance for Women
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188. The Biggest Financial Mistake Women Make After Getting a Raise
187. Making Good Money Isn’t the Same as Building Wealth
186. Why Making More Money Can Still Leave You Feeling Behind
185. Your Past Money Habits Created Your Current Financial Life
184. Why Money Keeps Coming In and Going Right Back Out