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What if you could get more of what you want in life? But not through pushing, forcing, or pressure.
You can.
When it comes to money, time, and energy, no one’s gonna turn away more.
And Kate Northrup, Bestselling Author of Money: A Love Story and Do Less and host of Plenty, is here to help you expand your capacity to receive all of the best.
As a Money Empowerment OG who’s been at it for nearly 2 decades, Kate’s the abundance-oriented best friend you may not even know you’ve always needed.
Pull up a chair every week with top thought leaders, luminaries, and adventurers to learn how to have more abundance with ease.
You may find that actually there's no reason to even have any shame. Maybe you actually made a really smart investment in some way, and there actually was a situation where you were getting a spread, and you were making money on that money, making more money on that money than you were paying. Right? So maybe you were actually being really smart, but because you're so conditioned to have shame about debt, you couldn't even see that. Welcome to Plenty.
Kate Northrup:I'm your host Kate Northrup and together we are going on a journey to help you have an incredible relationship with money, time, and energy, and to have abundance on every possible level. Every week, we're gonna dive in with experts and insights to help you unlock a life of plenty. Let's go fill our cups. If you were to sit in a room full of a 100 successful women, I guarantee you a higher percentage than you think would be sitting there with a degree of secretive debt shame. We assume that because people look a certain way, or their careers are a certain way, or they have some sort of external trappings of success, that they don't have any money shame, that they don't have any debt, that they've never made a financial mistake.
Kate Northrup:And so today I wanted to talk about debt, shame, and secrecy, and the stories we don't tell, and how important it is to tell these stories because shame will absolutely halt your financial progress, honestly, completely unnecessarily. When we're carrying around shame, we're often also telling ourselves financial lies or operating with some level of financial secrecy that's just completely unnecessary. Brene Brown is a shame researcher who you may very well know her work, and she says that shame cannot exist in the light. And as soon as we share our shame, we are set free. Now one of my favorite, I think it's a Gloria Steinem quote, she says the truth will set you free, but first it'll piss you off.
Kate Northrup:So it may be that you actually have some level of financial secrecy that you're keeping from yourself. You may have financial secrecy within your family, within your marriage. And let today be my rallying cry to start telling the truth. Not to everyone. I don't think you need to like post your numbers on the Internet for your entire community, or you know, for all your friends and family.
Kate Northrup:That is not what I'm talking about. People have to earn the right to our truth. People have to earn the right to receive our vulnerability. But when it comes to financial shame, one of the most powerful steps you can take is to tell someone safe. Now I would like to be super clear that having debt is not inherently something you need to feel ashamed about.
Kate Northrup:Every major company for the most part, and certainly the United States government has tons of debt, and actually, there are really positive ways to use debt to grow your wealth. And so if you are carrying around shame just because you have debt, please let today be an invitation to dissolve it. Like, you don't need to carry around the shame. And if you do have debt that needs to be paid back, if it's a high interest consumer debt, and I'll get into a little bit about the different kinds of debt and which one you need to take steps on to get rid of, and which one you can actually use to grow your wealth. Regardless of the kind of debt you have, having shame around it will prevent you from doing what you need to do to either dissolve your debt or to use it to create wealth.
Kate Northrup:So many people who honestly don't have proper financial education think that debt is just bad. Like blanket across the board, debt is bad. I have friends who are wildly successful in business, and are so proud that they've never even had a credit card, which is lovely. It's lovely to be financially solvent, but that means in The United States, you don't have any credit. And then that means, you know, you can't use your credit to be able to use leverage to your wealth and make investments in in your own company, in assets that would bring you more money.
Kate Northrup:So all of that to say, you don't need to feel bad about your debt. And if you're new here, you may not have heard me before say that I call debt invoices for blessings already received. So there are many countries where you can't buy anything unless you have the cash in your bank account or the cash in hand. In The United States, if you're not United States based, we have a really strong credit economy. I think there's some problems with that.
Kate Northrup:It leads to lifestyle inflation, it leads to our eyes being wider than our bank accounts, it leads to a lot of problems in The United States, you know, multi I don't know how much the national debt is, but it's really high. So I'm not saying we're doing it right, but it is important to understand that actually having credit and being able to receive something before you have the cash to pay for it is a privilege. That people, many people do not have that privilege in other countries, and certainly not everybody in The United States does depending on their credit score. So just know this. Debt is neither good or bad.
Kate Northrup:It's just that you have received a blessing ahead of time, and now you have an outstanding invoice for it. So maybe you have student loans, and you received your education ahead of time, and now you're still paying for it. Maybe you bought a pair of shoes on a credit card, and you received the shoes ahead of time, and now you're paying for it. Maybe you were able to live in your whole house ahead of time when you didn't have the cash to pay for your whole house, but because you have a mortgage, you're able to pay for that over time. It's an invoice for a blessing that you have already received.
Kate Northrup:So that reframe may be enough for somebody to dissolve their shame and heaviness around their debt to begin with. Now there are two different kinds of debt, Some people will call them good debt or bad debt. I think it's a little bit more nuanced than that. I think we need to be mindful of false binaries where everything is good or bad. Honestly, our nervous systems are wired such that when we get into all or nothing thinking, right or wrong thinking, good or bad, black and white, that and when we lose track of any sense of nuance, we are in a trauma response.
Kate Northrup:So a dysregulated nervous system goes into good, bad, right, wrong, black or white, all or nothing. And anytime you're in there, just know you're dysregulated, and it is time to do something, use a nervous system healing tool to signal safety to your body so you can see more possibilities of nuance. And when you can see more possibilities of nuance, that is where you can begin to see the world through the eyes of opportunity. What people who understand how to use debt to make money understand because they can see the world through the eyes of opportunity, they've had the proper education, and they also are able to feel safe enough to look at the world this way. When you can receive money at an interest rate that is less than what you can make with that money by investing it elsewhere, you have something called a spread.
Kate Northrup:And that spread means that is a positive financial decision. So here's an example. If I take out a loan at a 4% interest rate, so let's say I have a business line of credit, and my business line of credit has a 4% interest rate, So I take out $100,000 on my line of credit, and then it has a 4% interest rate, so over time I'm going to owe $4,000 on that money, because that's 4% of $100,000 But if I can take that $100,000 and then invest it elsewhere, whether it's in a piece of property, a stock index fund, something in my business, like if I know that in my business if I spend $100,000 on Facebook ads and I'm gonna make $200,000, that's a 100% return on my money. Would it make sense to take out a line of credit and pay $4,000 extra, 4% interest, to then go and make a 100% on my money? Right?
Kate Northrup:Does it make sense to pay $4,000 in interest to be able to turn that $100,000 into $200,000? Yes. It does, my friend. And that is called the spread. So people who think and see the world through the eyes of wealth and resources and opportunity think in that way.
Kate Northrup:So that would be a positive use of debt. That's debt that makes you money. Versus I go to the Design District in Miami, and I have a shopping spree at Gucci and Louboutin and Dior and wherever else, and I spend $50,000 in clothes, shoes, and jewelry that I don't have in the bank, that is on now a credit card, and maybe that credit card is charging me a 20% annual percentage rate, and so every single month I'm paying 20% on those purchases really really fast, that $50,000 is gonna grow into, I I can't do the math right now the top of my head, but it, that interest rate compounds real fast. And I don't want to be paying 20% compounding interest, I only want to be receiving 20% compounding interest. So that's the difference between high interest consumer debt versus debt that makes you money.
Kate Northrup:I would never feel ashamed about taking out a business line of credit for 4% interest and then doubling that money by investing it in Facebook ads in a funnel that I know is going to get me a 100% return. Right? Like, I'll build that funnel all day. I will take all the cash I can get from anywhere and put it in there. I'm not gonna feel shame about that because I am being smart with my money.
Kate Northrup:So the only way we can start to share these stories and learn from one another is if we remove the film on the lens, which is debt shame, and start talking about it. I'll never forget, I was sitting with a friend who I was an affiliate of. This is many, many years ago. She was had a much bigger business than I did. I was like a baby business owner at the time.
Kate Northrup:And I was sitting next to her, we were at a conference, and she I got a notification from her that I had just been paid by her on PayPal for promoting her affiliate thing, and I was like, oh, that's fun, I just you just sent me money, which you know, she hadn't done manually, but it was in her business, and she looked at me and she goes, that's on a credit card right now. I was like, what? And she was going through a change in her marital situation, and things were all up in the air and whatever. And it was such a sobering moment for me, and it was so helpful. Number one, she did not have financial shame in that moment that would prevent her.
Kate Northrup:She was just reporting in on the math. And the math at that moment was that her company didn't have the money to pay her affiliates cash right then. She was reorganizing things behind the scene, and she just told me. And right then, I felt so much possibility and power because she was dissolving these false hierarchies of, you know, shame and secrecy, and this is the way it should be, and whatever. And she was just saying the truth, which is that sometimes in business, you have a what's called a quote unquote float, where from month to month, in order to pay payroll or whatever expenses, sometimes you gotta just float it.
Kate Northrup:And the float, right, from one shore to the other floor, sometimes that float requires the help of MasterCard or American Express or a line of credit or whatever. Now of course do I teach Inside Relaxed Money and our Relaxed Business financial system how to build up your cash reserves in your business and when to do so and what percentage and you know, how to know how much and all that stuff? Of course I do so that you have the cash to float you ideally. But the truth is most of us in business have had moments where we have not had the cash and we've needed to use the float from, you know, and that float is made out of debt. That float is made out of like, rather than just torch my business because I can't pay my expenses in full this month, I'm just gonna float it.
Kate Northrup:And that's what credit is for, honestly. And I don't want us to be going around using that all the time by any means because we're paying interest for something that we wouldn't need to, but I also want to normalize that sometimes that's just the way it is. I also have a friend who, you know, talked publicly about the fact that in 2020, she had credit card debt. Right? So she had credit card debt in 2020.
Kate Northrup:Now she's making over $10,000,000 a year buying luxury real estate, you know, investing in a hotel, like creating an absolute unbelievable empire very quickly. And relatively recently, right, like within the last four and a half years, she had credit card debt. I know a lot of people who make tons of money, and because they're dysregulated, and because they have fear, unconscious fear patterns operating behind the scenes with their money, and running their unconscious and subconscious, they'll have money on a credit card that is a high interest, and they just won't pay it off because they're afraid, what if I use the cash I have to pay off the credit card, and then I don't have the cash? So they're using their credit card as their emergency fund in this sort of bizarre, twisted way. So if you're doing that, stop doing that.
Kate Northrup:That makes no makes no sense. One of the things that happens, though, is when we are dysregulated, we do not have the mental capacity to actually just do the math and figure out, does it make sense to keep this money on a credit card and pay the interest rate, or does it make sense to pay it off with this other money? Right? A lot of the times when someone asks me a question in Relaxed Money about where do I put this money? Do I pay off this invoice for a blessing already received?
Kate Northrup:Do I pay off this line of credit? Do I did a Honestly, it's usually a math question, but because we have so much fear and shame and secrecy because we think we screwed up, we weren't the good girl, right? We screwed up, I got in debt, whatever, we don't actually have the capacity to do the math, because our mental bandwidth and our energetic bandwidth is so taken up by telling secrets and by feeling shame. So there's two things I'm talking about here today. One of them is telling someone safe.
Kate Northrup:Right? Find a business bestie. Find a group of people that are telling the truth about what it took to get where they are. We do that inside Relax Money. We do that in my spaces because having a safe space that is shame free, that's really here to figure out where are we now, and where do we want to go, as opposed to where are we now, now let's throw a shame and judgment party around it.
Kate Northrup:Like that doesn't help at all. And it does make sense that we have these patterns, but it doesn't mean these patterns are doing us any favors, and we can absolutely heal them now so that we can move forward more effectively, more efficiently, with more ease, and with more joy. So tell someone safe. If you have debt shame, tell someone safe. Start to do something about it, and you may find that actually there's no reason to even have any shame.
Kate Northrup:Maybe you actually made a really smart investment in some way, and there actually was situation where you were getting a spread, and you were making money on that money, making more money on that money than you were paying, right? So maybe you were actually being really smart, but because you're so conditioned to have shame about debt, you couldn't even see that. That happens a lot in inside our programs. People say, oh, wow. I was so avoidant, and I had so much money shame that I never even looked at the numbers.
Kate Northrup:And now that I'm looking at the numbers, there's actually it's like way better than I thought. And I've spent so many years feeling bad about my financial situation, and actually it's much better news than I ever could have imagined. Like, I want you to have that experience, but you never will unless you dissolve the shame enough to take a look at what's really going on. And no matter what's going on, trust that someone you admire has been there before. She has made some of those same financial decisions.
Kate Northrup:I'm not even going to say financial mistakes, because we learn from absolutely everything. And so they're all learning opportunities. I certainly made some decisions financially that if I could go back in time, I wouldn't make those same decisions now. However, the thing is, if we don't actually take a look, we can never integrate the lesson. And so we'll keep making the same decision over and over again without having integrated the lesson if we don't look to begin with.
Kate Northrup:And then the other thing is we talked about the difference between high interest consumer debt and debt that actually makes you money. And you can only begin to see the world that way and see those opportunities and do the math when you invest in the healing work to dissolve the money shame or the debt shame so that you can even have the mental capacity to be logical and make those smart money choices. If you have debt shame, I hope this has released some of that weight. If you know someone who is struggling, please send this to them. We don't need anybody walking around the world feeling emotional shame and weight around their past financial decisions.
Kate Northrup:Any past financial decisions can be turned into wealth, but we cannot do that if we keep telling the story that there is something wrong with us, and that is the story that shame tells. So start telling the truth to yourself to save people, start seeing the world through the eyes of opportunity, and we can all dissolve our debt shame together. See you next time. What if managing money felt effortless? You've worked so hard to earn money, so why does it feel stressful?
Kate Northrup:Well, I wanna introduce you to something brand new that I've created called the money reset because abundance starts in your body, not in your bank account. This free audio experience will help you rewire your nervous system for wealth, stop the money in money out cycle and create a foundation for true wealth, and relax into a new relationship with money. Plus, it comes with the five minute calm cash flow ritual, so you can have financial clarity and magnetism anytime you want. All you need to do to get the free money reset is go to katenorthrop.com/reset.