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Navigating and Managing Windfall Money · Cash Confident with Brie Sodano

• 0:01
  Speaker 1: Welcome to the Cash Confident podcast.
• 0:03
  Speaker 1: I'm Brie Sedano, your fearless host, personal finance expert and the visionary behind the revolutionary Cash Confident community.
• 0:10
  Speaker 1: Get ready to embark on an electrifying journey where we redefine the rules of money and empower women to harness the immense power to craft a life they truly, truly desire.
• 0:22
  Speaker 1: This podcast is the ultimate resource, meticulously crafted, for women who are ready to unleash their financial prowess and embrace a life of abundant success.
• 0:32
  Speaker 1: We leave no stone unturned as we delve into the depths of money management, mindset mastery and the undeniable influence of emotions on your financial decisions.
• 0:43
  Speaker 1: Prepare to rise above the societal limitations and break free from the chains that have held you back, as we equip you with the tools and knowledge to make bold, confident choices with your cash.
• 0:55
  Speaker 1: We believe that true financial power begins with knowledge, and that is exactly what we deliver.
• 1:02
  Speaker 1: So buckle up, my fierce and ambitious friends, as we embark on this transformative journey to becoming Cash Confident together.
• 1:10
  Speaker 1: Hello, hello, everyone, super excited to be here with you today.
• 1:20
  Speaker 1: Today, we were going to be talking about how to handle a windfall, a big tax refund, a big cash influx.
• 1:27
  Speaker 1: This is actually a reason that you'd be surprised that a lot of people hire me when maybe they get an inheritance or a really big bonus, or somebody sells a business or a house and there is a lot of cash hanging around, and so I'm going to teach you some of the things that I've learned over the last 10 years working with people on such things.
• 1:49
  Speaker 1: So I'm going to teach you some of the things about how to not blow it.
• 1:53
  Speaker 1: Right, that's always the biggest concern.
• 1:55
  Speaker 1: People are like I'm afraid I am going to blow it, I'm going to get rid of this money, I'm going to buy stupid things, and oftentimes, when they're coming at such a situation with that attitude, they end up usually actually blowing the money anyways.
• 2:10
  Speaker 1: So that's what we're going to work on in today's episode, all right, so before I get into what to do with a windfall, I want to just kind of explain some of what goes on in your mind and body when a big cash influx comes in.
• 2:29
  Speaker 1: Now, the first thing I want you to understand is that money provides limits to the size of our life.
• 2:34
  Speaker 1: Like we have mental frameworks for what we could imagine or not imagine when it comes to money.
• 2:40
  Speaker 1: We have emotional frameworks for how good we're willing to let things be, or the realm of constriction in the body or openness that we're used to.
• 2:53
  Speaker 1: So some people have lived in poverty emotionally, even when their income goes up, like I've seen clients who are making a half a million dollars and really, really truly suffering in poverty, even though it's self-created like there's actually enough resources.
• 3:15
  Speaker 1: You know their expenses are bigger and there's a ton of stress, and so I just want you to understand that these feelings inside your body are real and what exacerbates that oftentimes is like feeling like, well, I should be, I should be good, and I'm not, and it's, there's just this dissonance.
• 3:32
  Speaker 1: So when a big influx of money comes in, what can end up happening, or what often often ends up happening, is the mental limits for how we think about things dissolve and so our mental landscape increases in size all at once.
• 3:51
  Speaker 1: So it's a very, very quick thing.
• 3:53
  Speaker 1: That happens because all of the places where money was the reason that you could or couldn't or you know, you didn't even bother imagining to such things because there was just not the financial resources.
• 4:04
  Speaker 1: When you have big money and your bank accounts, all of a sudden that mental limit can end up dissolving and can really cause your brain to just be very busy with the exploration of the new place, and so your brain may be be looking at like, oh, we could do this now, we could do this now, we could do this, now you could get a new couch, you could pay off your debt, you could do this because all of the priorities that you've thought about but money was a limit to then all become possible, they all come into range and your mind really does have to explore those things.
• 4:39
  Speaker 1: And so a lot of times when people even even sometimes they don't even get a windfall, but all of a sudden you know they've been saving their money and their money crosses like a certain threshold, that triggers something in their mind and some of those mental limits dissolve.
• 4:55
  Speaker 1: You know people will say things to me like my mind will not shut up, like my mind is really spinning, like it's giving me all of these options, it's trying to spend the money on this and it wants new couches and that's it, and that's a normal part of having a windfall.
• 5:11
  Speaker 1: And so I just want you to understand that that's.
• 5:13
  Speaker 1: That's something that if you're unaware of, an unaddressed it can really, really torture you.
• 5:18
  Speaker 1: It can drag your focus all over town and your brain will be wanting to make decisions on some of these things, because all of that unknown can be incredibly uncomfortable to your psyche and to your body.
• 5:31
  Speaker 1: And so another thing that happens when we can end up with a really big windfall even though it seems like a really great thing is it can feel deeply unsafe in our body.
• 5:42
  Speaker 1: And the reason for that is is because our subconscious brain doesn't really look at things as better or worse.
• 5:46
  Speaker 1: It just looks at them as familiar, as safe, and anything unfamiliar is dangerous.
• 5:52
  Speaker 1: So having a big, you know, a big influx of cash can actually feel really, really dangerous to your body.
• 6:01
  Speaker 1: And it's not because it is, it's not actually dangerous, but for your body, it's just a way outside of your comfort zone.
• 6:08
  Speaker 1: And I'll tell you a quick story just so you kind of understand what I'm talking about.
• 6:12
  Speaker 1: So when I first started my business, I had a few really big months of clients hiring me and actually I had a big influx of clients paying me in full.
• 6:21
  Speaker 1: So I had I made like $50,000 in two months, right.
• 6:27
  Speaker 1: So I had like two, 20, you know, 20 to $30,000 months in a row and in two months I'd made what I was used to making in about a year, and so I had money in my bank account.
• 6:38
  Speaker 1: Like I had like $35,000 sitting in my bank account, and at this point in time, when I first started this business, that was the most money I'd ever had.
• 6:44
  Speaker 1: And I will tell you, I felt absolute panic.
• 6:48
  Speaker 1: Like my body, it felt the same as if I was going to be so short on cash I wasn't going to be able to pay my mortgage.
• 6:55
  Speaker 1: And again it did like to my logical brain that had been working and earning this money and doing this thing and like had set these goals and now, like how to tame them, my brain was like what's, what's going on?
• 7:09
  Speaker 1: Like my brain was like, logically, like this doesn't even make sense.
• 7:12
  Speaker 1: What are you talking about?
• 7:15
  Speaker 1: But my body was, it felt really unsafe and at the time I didn't know any of the stuff that I'm, that I'm teaching you.
• 7:21
  Speaker 1: There's no school for what I do.
• 7:22
  Speaker 1: I've learned all of this through experience.
• 7:24
  Speaker 1: And so I sat on my deck for like a month until, like my money started to run out.
• 7:30
  Speaker 1: Like I don't know what happened.
• 7:31
  Speaker 1: But like my brain, just what?
• 7:33
  Speaker 1: Like my body was like we're not going to go make more money, we have too much money.
• 7:36
  Speaker 1: This is like freaking myself and so, anyways, it ended up being fine, but I really did lose some momentum because I didn't know how to emotionally handle all of that good Like it was outside of my comfort zone, and I really did freak out.
• 7:53
  Speaker 1: And this sort of thing happens to people frequently when there's, you know, anything from like bonuses, big months in business inheritances, tax refunds, and so that that discomfort really drove me to to kind of stop working for a little bit.
• 8:12
  Speaker 1: Like you know, I did my job but I stopped selling, I stopped marketing and that way I was required to use that money on very like basic necessities and then after a month or two of paying team and doing all the things, like it was low again and I was back to where I was comfortable.
• 8:31
  Speaker 1: And had I known some of this stuff, I probably would have been able to manage myself through that challenge a little extra fast.
• 8:39
  Speaker 1: All right, and so one thing I want to, one other thing that I want to say that is just normal.
• 8:45
  Speaker 1: So if this happens to you, it can really feel like something's wrong, but so when that mental barrier dissolves and goes away and all of the things that you've ever thought about buying or investing in or whatever then become available it is, you can really work yourself into scarcity from a state of windfall Like so let's just say I'm getting $100,000, I don't know, for some reason, speaking fee inheritance, whatever I might have a million dollars of desire that had kind of been put off onto the back burner, right, travel houses, I want a lake house, I want to be an investor, I want to do, you know, more investing, I want to, et cetera, et cetera.
• 9:30
  Speaker 1: And so once that million dollars of priorities and ideas then becomes available right, because that mental wall comes down I can totally start to look and see, well, I can't do all of it.
• 9:44
  Speaker 1: And I can from there think myself all the way into scarcity.
• 9:48
  Speaker 1: And so then, instead of being like happy and celebrating this money, I can really get to the place where it's not enough, and that's just part of the process, right.
• 9:58
  Speaker 1: So I just want you to know, because a lot of times that's another thing where people really like will beat themselves up for having these kind of thoughts, where you know it's just normal, it's just generally part of the process.
• 10:12
  Speaker 1: So here are some things that you can do with a big windfall.
• 10:17
  Speaker 1: So one of the things that I suggest to clients is often to set yourself a period of time like a definitive time 30, 60, 90 days to get used to the money, where you're going to commit to not making any decisions with it.
• 10:30
  Speaker 1: And if you're somebody who doesn't have a ton of trust with yourselves and money, what you could even do is go talk to your banker and set up a short term you know again, 30, 60, 90 days CD, where the money is like invested, but you're going to get a minimal amount of interest and you should be able to see it when you log into your bank account if you do it through your regular bay.
• 10:54
  Speaker 1: Now, the reason that I suggest doing this is one is to give yourself time and space to have that mental exploration time without having any pressure for decisions.
• 11:06
  Speaker 1: So when I say, put the money in a CD, there's a feature on CDs where you can't really get your money out Like.
• 11:12
  Speaker 1: I mean, you can, you can pay a fee if you really wanted it, you can, but the point of that is to leave that money in for that set amount of time.
• 11:19
  Speaker 1: And what this does is it.
• 11:20
  Speaker 1: It lets you have that mental exploration place without the pressure of having to make a decision.
• 11:25
  Speaker 1: Because when, when a big influx of money comes in, very likely you're going to be uncomfortable and so you want time to stretch into that discomfort before you're making decisions.
• 11:37
  Speaker 1: Because that pressure to make a decision especially if you don't trust yourself, then then your mind will kind of probably sound like I better do something good with this money before I do something stupid with this money, like I better spend this money right now on things that I really want and need so that way I don't accidentally spend this money on stuff that I don't want and need and generally that's going to, you know, just show you that there's some trust issues with you and yourself in regards to money.
• 12:02
  Speaker 1: So taking some time to just get used to having the money.
• 12:06
  Speaker 1: And while you're in this period of time, what I suggest doing is, every day, log into your bank account, look at the money that you have and tell yourself it is safe for me to have this money.
• 12:16
  Speaker 1: It is safe, like it is safe for me to have this money because that helps you to you to just be aware that, like you are in discomfort and also you are safe that the discomfort isn't dangerous.
• 12:30
  Speaker 1: While you're doing this, you may have really experienced a lot of sensation in your body.
• 12:34
  Speaker 1: You may really be feeling a flush in the face or not in the stomach, or a lot of tension in the body, and I encourage you just to, while you're looking at your money, to really just be with those sensations, move your attention into your body, find do they?
• 12:48
  Speaker 1: Do these sensations have a color, a texture?
• 12:50
  Speaker 1: Do they have a message for me?
• 12:52
  Speaker 1: Is there something I need to know?
• 12:53
  Speaker 1: Right, and the reason that we do that is because once our emotions are seen and acknowledged, a lot of times they really just release, they move on and we can end up in a more common, peaceful place.
• 13:06
  Speaker 1: So also during this 30, 60, 90 days depending on how big a chunk of money in is and how long you can wait to be making decisions I encourage you to let your mind do some exploration.
• 13:19
  Speaker 1: Like your mind is really going to want to be looking at all of these new priorities very carefully and considering the options, and that really can run quite a bit of mental bandwidth, so just be aware of that.
• 13:32
  Speaker 1: So what I encourage you to do is I find that journaling.
• 13:35
  Speaker 1: You know, when I have clients, I suggest journaling because once you get the words onto the paper and out of your mind.
• 13:41
  Speaker 1: Your mind gets a little quieter, so you can start to explore options, priorities, even like fun ideas like, oh you know, maybe I'd want to Lakehouse in Italy, right?
• 13:53
  Speaker 1: So you can start to just explore those ideas.
• 13:56
  Speaker 1: And so, while you're in that space where there's no decisions to be made, being with the discomfort of the money and letting your body get used to having it and letting your mind have time to explore the vastness of the new space that is now available to you, those are two things that are really really helpful in being able to have this money in a longer, longer term way and to also use this as an opportunity to increase your having this level and to really stretch.
• 14:28
  Speaker 1: You know your mental, financial comfort zone as well as, like you know you're in your body, your emotional, you know your nervous system, levels of comfort zone, all right.
• 14:39
  Speaker 1: And so then, in time, give yourself some time to do these things.
• 14:45
  Speaker 1: This isn't a very fast process.
• 14:48
  Speaker 1: You want to give yourself, like I said, 30 to 60, 90 days.
• 14:51
  Speaker 1: As that time starts to come up, you can start to look at the things that are really important to you and start to prioritize.
• 14:57
  Speaker 1: Now, when clients have a windfall.
• 14:59
  Speaker 1: I'm generally looking at what are the changes that you want in your lifestyle.
• 15:03
  Speaker 1: What are the things that you want to be different in your life?
• 15:07
  Speaker 1: That is a different approach than what's best for the money, because oftentimes what's best for the money isn't the same thing that is the best for your life.
• 15:16
  Speaker 1: The way that I look at money is money is a tool for lifestyle creation.
• 15:19
  Speaker 1: That's going to be the place where you want to start to look.
• 15:22
  Speaker 1: If I do this, you want to start to really explore your options in terms of what you're looking for with your life.
• 15:30
  Speaker 1: That may even be upgrades to your home or upgrades to the way that you do business.
• 15:36
  Speaker 1: You may want to invest the money for future use.
• 15:39
  Speaker 1: You may want to spend some of it.
• 15:41
  Speaker 1: You may want to pay down some debt.
• 15:43
  Speaker 1: You want to start to look at like, all right, I'm going to do these things.
• 15:46
  Speaker 1: What do I get out of it?
• 15:47
  Speaker 1: What is the lifestyle change?
• 15:49
  Speaker 1: How does this make my life better?
• 15:50
  Speaker 1: This is really an important question to be asking yourself, because there's just a lot of turmoil that happens with a really big cash influx.
• 16:00
  Speaker 1: You want to start to prioritize and start to make plans based on the truth of what you want.
• 16:06
  Speaker 1: You're going to balance that with what's a good idea, financially responsible, what's going to make the most sense.
• 16:17
  Speaker 1: Some things I've seen happen that are sometimes unwise.
• 16:21
  Speaker 1: Sometimes somebody will have a windfall and buy something they can't actually afford.
• 16:25
  Speaker 1: At one point I had a young man who had a big chunk of money for some military service.
• 16:34
  Speaker 1: He bought a car and he put a big chunk of the money down on the car.
• 16:39
  Speaker 1: He actually didn't make enough money to pay the increase in insurance, the increase in taxes and the car payment.
• 16:48
  Speaker 1: That windfall ended up turning into a giant anchor on him financially.
• 16:56
  Speaker 1: It was really a problem for a while for this person.
• 17:02
  Speaker 1: We want to avoid situations like that.
• 17:10
  Speaker 1: Then, depending on the size of the money that you got and what you're trying to do with it, you may need to consult with some experts.
• 17:17
  Speaker 1: You may need to consult with your lawyer on trusts or estates or business agreements, things like that.
• 17:24
  Speaker 1: If you want to get some tax advice, you're going to want to consult your accountant on such things.
• 17:28
  Speaker 1: If you're looking at buying investments, you may want to consult with an investment advisor.
• 17:33
  Speaker 1: You want to get some expert opinions.
• 17:37
  Speaker 1: Just because you have money doesn't.
• 17:38
  Speaker 1: Sometimes people think that it gives you qualifications that it doesn't.
• 17:42
  Speaker 1: It's a really interesting phenomenon to watch.
• 17:44
  Speaker 1: You're going to want to just be aware of where your expertise ends and where you may need to bring somebody else in.
• 17:52
  Speaker 1: I have a couple of things that you probably want to avoid with windfalls.
• 17:57
  Speaker 1: The first is paying off debt.
• 17:59
  Speaker 1: Using all the money to pay off debt.
• 18:01
  Speaker 1: While this can be fine most of the time it doesn't really go well because if you listen to some of my prior episodes we talk about, debt has its own financial comfort zone.
• 18:14
  Speaker 1: If you, let's say, you're used to having $30,000 in debt, you get $100,000 windfall.
• 18:21
  Speaker 1: You pay all that credit card off.
• 18:24
  Speaker 1: You still have the habit of being in debt.
• 18:25
  Speaker 1: You're still used to being in debt.
• 18:27
  Speaker 1: Very likely that debt will come back within a year or two.
• 18:33
  Speaker 1: Additionally, oftentimes people be like I'm gonna pay off this debt to free up this cash flow, to save the money, and I'm like, well, you could do that, but then what we've really done is really like you already have the lump sum of money.
• 18:47
  Speaker 1: So you could just do what you were gonna do with the lump sum of money if you were already able to afford the debt and then be able to play with time and money faster.
• 18:56
  Speaker 1: It just depends.
• 18:58
  Speaker 1: That's not the best advice for every single person and every single set of circumstances, but that's valid.
• 19:05
  Speaker 1: So I'll give you an example.
• 19:07
  Speaker 1: So at one point I had a client who got a very large EIDL loan, which was the COVID loans for her business, and she had some business debt and that's it.
• 19:15
  Speaker 1: And she was like and she was paying on the business debt.
• 19:18
  Speaker 1: The business debt was reasonable and she was like all right, well, I could take this money, which wasn't even actually a windfall, it was just a big cash influx.
• 19:25
  Speaker 1: I mean, it was debt.
• 19:27
  Speaker 1: It was that she was borrowing this EIDL money and she was like I could pay all this off and then I could be able to do these things and I'll be able to invest in my business.
• 19:35
  Speaker 1: I'm like you already have the money to invest in your business right now with the CIDL loan.
• 19:38
  Speaker 1: So let's I mean, you're gonna have to pay this, the EIDL loan, back in a couple of years, so let's work on making investments in the business that are gonna make paying all of this debt back much easier, rather than using a substantial chunk of it to pay off the debt.
• 19:57
  Speaker 1: Like with different debt, it didn't exactly make sense and so she didn't, and so she invested the money and now she's thriving, she's doing great and she's paying off the EIDL loan in addition to her other business debt which was reasonable for her to carry at the time.
• 20:12
  Speaker 1: And the last thing to avoid is just really manifesting emergencies, which is a little bit out of your control, and giving money away.
• 20:18
  Speaker 1: Sometimes, when clients have a windfall, they're so deeply uncomfortable that they get super generous, over generous, where it's actually to their detriment.
• 20:28
  Speaker 1: So anyway, so let's, we will just go ahead and wrap up for right now.
• 20:34
  Speaker 1: So what to do with a windfall is you wanna take some time with that money to get used to it.
• 20:39
  Speaker 1: You wanna feel you wanna really intentionally stretch that financial comfort zone.
• 20:44
  Speaker 1: You wanna let your mind have time and space to wander and really just be in the discomfort of that.
• 20:50
  Speaker 1: Then we wanna start to prioritize what we want this money to be doing for our life, how we want our life to be different, the things that we want to change like in our day to day, and then we can start to prioritize.
• 21:02
  Speaker 1: Then, if it's appropriate, we're gonna consult with our legal or accounting or investment teams.
• 21:09
  Speaker 1: We're gonna get the things in place that are required and we're gonna avoid getting rid of the money very quickly, either in paying off debt, giving it away or other opportunities to get rid of that money very, very quickly.
• 21:21
  Speaker 1: So I hope this helps you stay on track with any windfalls and prioritize it and really use that money to maximize your quality of life, your financial freedom and your stability in the long term.
• 21:36
  Speaker 1: All right, I hope you learned something good.
• 21:37
  Speaker 1: Please, please, share this episode with anybody.
• 21:41
  Speaker 1: Everybody that you think would benefit Bye everyone.
• 21:45
  Speaker 1: It was my pleasure and joy to talk with you today.
• 21:52
  Speaker 1: Thank you for listening.
• 21:53
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• 22:00
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• 22:05
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• 22:14
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• 22:17
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• 22:30
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