Episode 5 of our Law & Finance Series.
0:00:00.4 S1: Welcome to the Legal Learning Podcast. I’m Jolene, your host, and with the Legal Learning Center, I help pre-law students and law students with their legal journey. Today, we will chat with Christine Luken a financial lifeguard. I love that visual. Afterwards, I will give you my top takeaways, but first, a quick word from our sponsor, Financially Free Aspiring Attorneys is a course with over $300,000 in money saving tips. If you wanna go to law school, but I don’t wanna pay for it, visit legallearningcenter.com/financially-Free. For more information on how you can avoid law loans.
0:00:44.6 S2: Thanks for having me. First of all, I am Christine Luken, I am known as the financial lifeguard. I am a Certified Financial Counselor With over 12 years of experience coaching both individuals and couples, really just helping them to create a system to manage their day-to-day money in a way that’s simple and easy and fun, that actually allows them to enjoy life while they are achieving their long-term goals, and I don’t teach this type of stuff and coach people because I’ve always done it perfectly. In fact, it’s quite the opposite. I crashed and burned financially in my 20s, despite having an accounting degree, and that was a very embarrassing situation, however, it taught me a lot about personal finance, and the most important thing I think I learned is that money is emotional, and we can… Know a lot of things in our head about money, and yet it doesn’t always translate into our behavior, and for a lot of people that causes stress and even shame and anxiety around money. Because we feel like we should know better.
0:02:04.0 S1: Yeah, I think that’s definitely a problem with lawyers is a lot of us are very type A, so we think we have everything organized in a row, and we don’t like to admit that we’ve made mistakes, and in our case, we are… Once we become lawyers, mistakes are malpractice, so we definitely don’t like… I think we’re trained even before we become lawyers, to not admit to mistakes…
0:02:28.8 S2: Right, and that can set up a very dangerous cycle of ignoring issues that need to be dealt with, and if you’ve graduated from law school, even if you’ve gotten into law school and you haven’t even graduated yet, you have to be smart to do that. Right, they don’t let dummies be lawyers. And so I think it’s very… It can be very hard to admit that I need help, because when you’re in a profession like you’re a lawyer, you’re a doctor. It’s expected that you’re smart. That you’re professional. That you have your life together. And so to admit, Hey, I need help with this, and I’m struggling here. That’s probably the first and hardest obstacle to overcome.
0:03:14.1 S1: How do you help people, if they actually do reach out to you, overcome that obstacle…
0:03:24.1 S2: The toughest part is to say like, Hey, I do need some help, and I think the way that I do that is I always lead with my own story, and I am very open about the fact that I crashed and burned Financially, I was actually working as an accountant for a multi-million dollar business, helping to prepare their budget, and yet I was bouncing my own checks at home, I had a dismal credit score, if it’s possible to have a negative one, I probably did. I was in debt, I owed three different payday lenders money, and my first step in rectifying that situation was reaching out to someone and getting help and admitting, I’ve messed up. I need help to get out of this. And even though I knew in my head what I was supposed to do, most of us know we shouldn’t spend more than we make, we shouldn’t have excessive debt, we should be saving money, but when you’ve got a mess financially, especially if there are some sort of emotional issues surrounding that. So in my case, I broke off an engagement and the guy that I was engaged to had terrible money habits, it was a very unhealthy, unbalanced relationship, and so there was a lot of drama around the relationship and leaving the relationship.
0:04:46.0 S2: And sometimes when you’re in a mess like that, it can almost be like walking into your house after a tornado hits it, so it’s like you walk in and everything just looks like such a disaster and you don’t know what to even start with, and because it feels so overwhelming, you just don’t do anything, you just slam the door and you walk away, but if you have someone who tells you, Hey, look over here, you see this closet, I just want you to organize this closet today… That’s all I want you to do. don’t even look at anything else. Just do this. And so that’s essentially what I do with my clients. And that’s the same thing that my dad did with me. My dad was my financial life guard, he was the person that I reached out to and I said, Hey, I’m not happy, I wanna leave this relationship, this is the mess I’ve gotten myself into. Financially, can you help me? And he basically said, Well, I’m not gonna lend you money, I’m not gonna give you money, but I will give you a safe place to stay, you can come in and live with your step-mom and I for free for several months, and we will help you make a plan to get back out on your own two feet, and so just having someone that wasn’t emotionally attached to my mess was very liberating, and just to have somebody say, Do this one thing first…
0:06:06.5 S2: Or do these two things. And then we’ll talk again next week, and I don’t worry about anything else. Just do these two things, that just helped to take the overwhelm out of it, that was what I needed, because when you try to look at the whole thing and see everything that needs to be fixed, it does just feel overwhelming and you’re like, Oh, why bother is just such a mess.
0:06:29.3 S1: It is, it’s so hard. I think, especially for law students, whatever undergrad that they have, they then add something like $200,000 to it. Right. I know even for myself, before I went to law school, I had no credit card debt I’d never had a problem with credit cards because I was a cash person, that was just my mentality, and when I graduated from law school, I still technically… I guess I had that mentality, but I was so drowning in debt, I graduated in a really bad economy, I couldn’t find a job, and so it just started snowballing from there out of necessity and trying to get back on your feet and just make that little bit of money, and where is that little bit of money go and like you were saying, people are afraid, so it’s emotional, and especially not only the lawyer mentality, but also I had that I am a cash person mentality, so this isn’t me, so I don’t want anyone to see this… And so, yeah, it was really hard. And so I would… Luckily, made it, it worked. I got out of the credit card debt and I started advancing on my student loans and…
0:07:33.5 S1: Yay. But it’s hard, and I think that not only hard work, but also just some lucky help me out of that, but I love your term financial life card, ’cause when you are drowning in debt, you literally feel like you’re suffocating… You’re under water, and we use those terms, but no one uses that term financial lifeguard, and it’s so great ’cause it just matches so perfectly like I need to grab a hold of someone or something, and that sounds like… Yes, I’m gonna pull you out of… This is such a great term…
0:08:07.1 S2: Right, well, and the reason why I like it is if you think about a lifeguard on a beach, someone is waving their hands, they’re obviously drowning, they need help, I’m the type of financial professional that I am going to run towards you and dive in and swim out to you and get you to that safe place so you can catch your breath. And then I’m gonna teach you how to swim. And there’s a lot of financial coaches and financial planners who just wanna bark orders from the lifeguard tower, so to speak, like, Hey, I can see you’re drowning out there, let me tell you all these… Let me give you this list of things that you should do… That’s not helpful, right? You need someone who is willing to get down there into the struggle with you, especially someone who knows how it feels to be in that place, and a lot of… I think a lot of people… And you are probably in the situation too, where you were stuck in the money shame cycle, and what happens is you make a mistake and you feel bad about the mistake, and you kind of have two choices there, right.
0:09:29.3 S2: So you say, Oh man, I’ve really messed up. One of two things happens, you either say, I’ve messed up, so now I need to go seek some help or find some information so I can fix this, or we take those bad feelings and turn them inward, so what becomes… I’ve done a bad thing. All of a sudden, I’m a bad person because I’ve done this. And when those feelings turn to shame, then shame makes us wanna hide, there’s no productive use of shame, and I frequently tell people there is a difference between guilt and shame, because guilt is that feeling that tells us we’ve done something wrong, I’ve either done something wrong against myself or somebody else, and I need to make this right. So if we don’t make the choice to make it right, but instead we turn it in on ourselves and say, I’m a bad person because I’ve done this, that makes us wanna hide, and so then we don’t seek the help that we need, we don’t seek the information that we need… And so then the cycle continues because if we don’t get help, then we’re gonna make another mistake, right.
0:10:50.6 S2: And so the longer that cycle continues, the worst things are, and so it is hard to overcome that shame and say, maybe I’m not a bad person, maybe I just need some help, and I frequently have people tell me, most of my clients are six-figure income earners, I do have a lot of attorneys who are clients and they will say, I know I’m smart, I’m making a good income, and yet I feel like I’m either drowning financially or treading water financially, like I’m not really making any progress, and they’ll say… They’ll ask the question, What’s wrong with me? And I tell them, that’s the wrong question to ask. The right question to ask is, what happened to me? What happened to me that’s causing me to interact with my money in this way, because there is something under the surface that’s causing us to spend emotionally or that’s causing us to avoid dealing with our money. And it’s just a matter of getting to the bottom of what that is.
0:12:13.8 S1: So I know on your blog, you state that budgets are like extreme diets and have high rates of failure, which I love that because I try to budget all the time, and what I have found for me is I need something a little looser than that, I’m just too busy to kinda keep strictly on it, and so I constantly feel like I’m failing, even if I’m doing okay on a budget, it’s just… It’s too hard for me to dollar for dollar, keep track of everything when I’ve got kids and I’ve got activities and work, and… So I love that concept. So if you’re not recommending budgets though, what are you recommending?
0:12:54.0 S2: So I call it a prosperity plan, and my clients love it so much more than a traditional budget, and one of the problems with traditional budgets, as you said, they’re very strict and just the word budget, like people are like… Yeah. Yuck. No, thank you. It’s just like saying a diet, who’s excited to go on a diet? No one, I’m excited for donuts, I’m not excited for diets, but if you go on to a healthy eating plan, then you understand that, Hey, I can still have some portion-controlled fun on my eating plan and still achieve my goals. Now, I may not lose 20 pounds and 30 days, but it’s gonna be easier to stick with, I don’t have to completely give up certain food groups or… If I love mac and cheese, and I go on a strict diet, I’m never gonna be able to eat that, but if I have a healthy eating plan, I might say, Okay, once a week, I can have one cup of Macaroni and she’s like, That is my treat I still get to enjoy it, but the rest of the time I’m gonna be loading up on my salad and my healthy proteins and I’m gonna be exercising, but just knowing like, Hey, I get to have that treat at the end of the week, then that gives you a fuel to keep going.
0:14:29.8 S2: Plus… You’re seeing the number on the scale. Move. Yeah, it’s the same concept with a prosperity plan. So first of all, the prosperity plan is, it’s all encompassing with your finances, so typically when you talk about a budget, you’re saying like, Okay, here’s your income, don’t spend any more than your income, so it’s really just dealing with income and spending… A prosperity plan, of course, is dealing with your income and you’re spending, but there’s also a debt reduction plan, and there’s also a savings plan, and we’re also looking at goals for the future, so it’s much more holistic looking at your finances as a whole versus just looking at your income and you’re spending, and what I do with my clients is exactly like what I was talking about with the cards, we actually work in breaks, so first of all, we ensure that there is money for fun every month, unless someone is in a dire financial situation, which almost none of my clients are… Almost all of my clients make six figures, so it’s not really about cutting everything to the bone, it’s really about being more mindful as to where our money is going, and so there’s a specific spending tool that I use with people, so it’s an app that they download to their phone, and I actually help them get everything set up, put all their categories in, and so we make sure that there’s categories and therefore fun.
0:16:05.3 S2: But the beautiful thing about it is, like you said, if you don’t have a tool that makes it easy for you to track, it’s so easy to lose track and not really know where everything’s going, and so the beautiful thing is you pull out your phone, you always have it with you, and you can just pull up the app and see. Okay, I have said We can spend 400 bucks on eating out this month, and I can see that we have already spent 300 of that 400 and we’re not even halfway through the month yet, so guess… What? We’re eating at home, but we still get to eat out… Right, so I’ve had clients who, when we first start coaching together and we start digging into some of those things, and of course, I’m picking on eating out and food just because I know that’s typically a category that people over-spend on almost across the board, but sometimes people say like, Oh my gosh, I can’t believe I’m spending $600 on eating out. We need to cut that in half. And typically, I’ll say, No, let’s not do that. Let’s just try to spend 500. Next month is set to 600, and that way if they actually beat it, and let’s just say they only spend 450, then they’re like, Oh my gosh, I did even better than what you wanted me to do, but on the flip side, if we had said, Okay, we are gonna cut it in half.
0:17:35.5 S2: And it’s only gonna be 300, but we end up spending 450, then we focus on the fact that we’re 150 short of meeting our goals versus, Hey, this is 150 improvement or over the last month before we started working together, like, this is already working.
0:17:52.4 S1: Right. Yeah, I know, that makes so much sense to me, ’cause that’s exactly where I started when I was doing financially well, again, and I started wondering, Where is my money going? And so I started re-establishing a budget, or again, we didn’t have one ’cause it was kind of… Everything was working okay, but I wanted to do better. And so I looked and we were spending like $1000 a month on food, just between groceries and going out, and it was just like, why… That’s a lot. And so, yeah, and so like you said, my goal was, let’s cut it in half, and for us though, we weren’t doing stake dinners, this was like just maybe a one dinner a month out, and not even super fancy. And then just a bunch of junk food and over grocery spending, I think, and so I just focused more on the grocery spending and the eating out, and that brought it way, way, way down, and it was just like, Okay, so now we know we don’t buy quite so much junk food,
0:19:10.5 S2: Well, and the other thing I tell my clients is, it’s really about what’s important to you, I don’t have this budget formula that says you should be spending X percent on food, and you should be spending X percent on your car payment and X percent on your housing I mean, yes, there are sort of general rules of thumb that if someone’s way over, then that would be like a big red flag if someone is 50% of your income is going toward your car payment… That’s obviously a big red flag. However, I have had clients who… I had one woman who took her… Having a Cadillac was something that she had always dreamed of, and it meant that she had arrived and in looking at her finances, I told her, I was like, This would be a lot easier if you could part with this car and this car payment, if this is really important to you, then we can make it work. But there’s some other things that are gonna have to be rearranged so we can make this work, and we did, and she since paid off that car and she just loves it, she just loves it to death.
0:20:19.2 S2: Whereas another financial guru, I might be like, sell the car. You gotta sell the car, you gotta buy a beater, and that doesn’t work, especially for people who are in a profession like law, because I think that’s one of the other things that professionals like doctors and lawyers, they have this lifestyle expectation once they graduate and get a real job. So all of a sudden you get hired by a prestigious firm, you can’t drive a Toyota Camry anymore, you need to get a Lexus or you need to get a Mercedes, and that can be a dangerous trap to get into, especially if you start that right out of the gate, if you can have that little bit of discipline to say, I’m gonna put this extra money and hammer on my student loans, and do that before you get married, before you have kids, you are gonna be so far ahead of everyone else because I’ve got clients in there, I’ve got attorney clients in their 40s, so I’m even approaching 50 and they still have student loan debt now, and it’s because of that lifestyle, if they had… Right out of law school, basically said, Okay, I’m gonna live like I’m still in law school for the next two or three years, and I’m just gonna keep my belt tight, maybe I will enjoy a little bit and I’ll take a vacation here or there, but for the most part, and then a buckle down.
And get this paid off. Let me tell you, if there’s somebody listening and you’re in that position, your older self is gonna travel back in time, and thank you.
0:22:10.3 S1: For sure, there’s a phrase, If you live like a lawyer while you’re a law student, you’ll live like a law student while you’re a lawyer, and what I have found is that you really need to live like a law student while you’re a lawyer anyway. And because of that, I think that’s an old phrase from before law school was quite, so expensive. Right, and so I try to make sure people hear this, that you need to live like a law student while you’re a lawyer, and again, before you have kids and potentially before you get married, but especially the kid part, right. If you can, and you live at home or live in a horrible apartment or whatever it is, and just keep that older car and just get it paid down if you can get paid off, great, but at least get paid down and life happens. So who knows where you’re gonna end up with kids and whatever, but it’s… Right, yeah, ’cause it is very common to buy that car in that first year, the brand new, and it doesn’t have to be super expensive, but a lot of times it’s a nice BMW or whatever, and it’s like, okay, yeah, so it wasn’t a small fortune or a big fortune, I should say it was a small fortune. It’s something you should have maybe put off a little bit, right.
0:23:22.1 S2: Or even just having an incremental upgrade where you can say, Alright, maybe I’m not gonna live like I’m poor, I don’t wanna eat at Taco Bell and have a car that’s held together by duct tape, but I’m not gonna go for the beemer right out of the gate. I’m not gonna go buy a house immediately right out of the gate, maybe I’ll upgrade my apartment, I’ll upgrade the car, so that it’s nice, and that gives me that professional image yet that still leaves me $50 or $600 extra to be hammering on the student loans.
0:24:12.6 S1:
Now, as far as seeking financial advice, now I know, again, if we’re drowning in debt, we feel like I can’t seek financial advice, I need to wait till I’m rich or whatever. What about those students who, let’s say just graduated from law school, they don’t quite have their job yet in place, they just took the bar exam, so they are drowning in debt, they’re looking for that job and they obviously could use some financial advice. Should you seek it at that point or should they really have study income, at what point is it a good time to seek out.
0:24:34.6 S2: Now, right now, right now was the time… And one of the things that I recommend to people right out of the gate, which is a very affordable, easy way to get great information is to grab a copy of my book, money is emotional, prevent your heart from hijacking your wallet, because what it is, is it’s an introduction to the mindset and the stuff that is going on in your unconscious mind that causes some of these emotional money issues, but it’s also just good solid financial advice on how do I start saving, how do I start that process of paying off my debt and… Starting to build that spending plan, and anybody at any stage can read this book, and I say it’s like the least boring money book you’ll ever read, ’cause it’s like half tabloid of my life as I crashed and burned financially, and half financial how to… The chapters are really short, so even people who say like, Oh, you know, I’m not great at reading, I tell people, I said, Look, take that book, put it on the back, your toilet, you’re in the bathroom for at least five minutes a day, you can get through one chapter a day, within two months, you’ll have read the book from cover to cover, or you can listen to it on Audible.
0:26:02.8 S1: Audible is great, especially pre-covid when I was driving around to a lot of court houses and things like that, drive my kids around, having Podcast Audible, things like that is so great. I struggle a little more with that in covid times, but that’s okay, I just read…
0:26:22.9 S2: I listen while I’m like washing dishes or on the rare occasion that I have to put on make-up, we can always multi-task right.
0:26:33.5 S1: Now, for this law student who, let’s say, wants to start their own firm out of law school, or even somebody who is older and is starting their own firm, so their income is extremely variable, especially in the beginning, so one minute they have $1000 in income the next they have 10 and just… It’s all over. How, first of all, again, should they come right away, even if they’re not making that much to get advice, and then… How do you work with someone like that?
0:27:04.6 S2: Yeah, well, and I hear that as a big excuse, like, I can’t budget my money, ’cause I don’t know how much I’m gonna be making, and so a lot of times, I’ll point them to my second book, which is manage money like a boss, and it’s for entrepreneurs. I dive into how you can create a spending plan when you have variable income, but one of the first things that I tell people who are thinking about starting their own business is, the best thing that you can do to ensure the long-term success of your business is to get your personal finances in order. Because the habits that you take, the habits that you have in your personal finances, you’re gonna take those into your business finances, and that can be really dangerous, so you don’t… If you’ve got excessive debt, if you don’t have adequate reserves in your savings, then you could end up making very poor decisions in your business because you’re thinking about short-term cash flow, so you might take on a partner where that might not be in your best long-term interest, or you take on a high maintenance client because you’re desperate for the cash and you want to provide yourself with as much financial runway as possible to launch your business successfully, and I tell people, it’s probably gonna take longer than you think, and it’s probably gonna cost more money than you think to get things up and running.
0:28:48.5 S2: I don’t ever hear an entrepreneurs say, well, that was easier and faster and less expensive than I thought it was gonna be… I don’t think I’ve ever heard anybody say that.
0:29:01.2 S1: No, it Is definitely. I think no matter what you plan for as a business owner, there are so many pitfalls, and whether it is internal or external, whether it is just… I didn’t know creating a website was that difficult or… Or, Hey, there’s a major economic recession that’s hitting my business, it’s just… It can come from all angles,
0:29:39.4 S1: Okay, so if somebody did wanna work with you, where can they find your… They want to just get more info about…
0:29:46.1 S2: Yeah, so they can just go to my website. Is my name Christineluken.com. And if they can’t remember that they can go to moneyisemotional.com, that’ll actually take them to the book page on my website, they can download the first three chapters and see if it’s something they wanna invest a little money in, and then there’s information on there relative to coaching, if someone says, Hey, I feel like I need that one-on-one attention from someone who isn’t gonna judge me, who I can trust to be confidential, who’s worked with other attorneys and knows the challenges that we have with the peer pressure and what it’s like to run your own firm that… I understand.
0:30:35.1 S1: I understand what those pressures are, like I think it’s so important to not just have a financial coach, there’s coaches out there, but one that actually does understand where a law students lawyers are coming from, because we do have so many pressures, and it is an industry where it is that keeping up with the Joneses kind of a thing, and even if we aren’t normally like that, it’s hard. I’ve worked for firms where every single person had the brand name, and I’m talking like the Gucci type purses, and yet we weren’t making that money at all, so it come from home or something, ’cause that was not from the job, and it just… It’s harder because you’re sitting there… I was actually quite lucky, the one firm I worked for that was so high and they were just so… And there was no keeping up with the Joneses, so I didn’t even have to try because it was just too much, you know, but there’s so many levels of that. And if they had been somewhere in the middle, I might have tried and wasted a lot of money I didn’t have, but I’ve seen the car thing and even just…
0:31:46.8 S1: What city should I live in? Let’s get theam more expensive apartment, even though it’s smaller because it’s in a more prestigious are… Or, it’s in the Cool downtown area, and it’s like, Well, go live from the duplex in the suburbs, have the money and they don’t wanna do it because then when they have their party its at the duplex in the suburb instead of the cool downtown loft.
0:32:13.1 S2: It’s really all a matter of what is important to you, because the whole point of making money isn’t the money itself, it’s the freedom and the options that it provides, and so sometimes we’ve been sold this image, and it’s not something that we really want, it there’s some people who they wanna travel and have adventures and experiences, and that’s more important to them, but next thing they know, like they’re living in this expensive three or four bedroom house with this huge house payment and they don’t have the money to travel and do this stuff that they want to… So sometimes we have to stop and say, What do I really want and what is really important to me, and let’s make sure that we’re directing our resources towards those things that are important to us and our families.
0:33:11.4 S1: Yes, definitely. Well, thank you so much, Christine, for joining us today. I really appreciate your time. Your expertise? Yeah, anyone check out Christineluken.com or moneyisemotional.com for sure. Get the help early.
0:33:28.1 S2: Yes, yes, there’s no shame in getting the help, in fact, the only shame is if you ignore the issue, so please, please, please get those resources that you need, if it’s not for me, then get them from somebody else. And thank you so much for having me on today.
0:33:44.1 S1: Before we get into top takeaways, a quick word from our sponsor, Juno. If you need to take out student loans, check in with Juno 1st. Juno can often offer law students one to 2% lower interest rates than the federal government, and not only with no cost to the student, but oftentimes cash back as well. Visit joinjuno.com/p/legalLearningCenter for more information on how you can save money. Alright, my top takeaways from this chat with Christine one budgets are like diet who wants one? So make a prosperity plan instead. Two, she uses an app to help her clients track their prosperity plan. So it makes things really easy. Number three, you are unique, and so your posterity plan should be too, so if you want that Cadillac, she’s gonna work that in for you, Number Four, it’s always a good time to get financial guidance, don’t worry about your lack of income, don’t worry about an uncertain situation, reach out, she’s been there and she can help you through it. Alright, that’s it for this episode. All the links and notes and so forth will be in the show notes, a full transcript will be available at legallearningcenter.com/ChristineLuken, and next week, be sure to tune in when we talk to Ariella, creator of the blog, the Wellness Esquire.
0:35:31.0 S1: And then if you learn something today, please like share, comment, subscribe, so that this show is more visible to others who may need it.
0:35:39.2 S2: Thanks.
Be sure to check out all 4 prior episodes in our Law & Finance series.
