Kate Northrup: Financial codependency is when you are using money to make someone else feel okay so that you can feel okay. And it is a red flag. And there are so many things we can do about it, but the number one place you wanna start is getting clear boundaries a k a abundance agreements in place. Welcome to Plenty, a weekly recalibration of power, money and safety for high capacity humans. I'm Kate Northrup, best selling author and creator of Relaxed Money, and this is where neuroscience meets ancient wisdom meets real wealth strategy.
This is the sacred conversation at the intersection of money, the body, and the life you're truly here to live. If you're ready to reimagine what's possible for yourself and for the world, you're in the right place. Let's go. Today, we are talking about an uncomfortable but illuminating topic, which is codependency, financial codependency. As I was crafting the money leaks episode, which was in the four part recalibration series, it was part three.
So if you haven't listened, you can go back and do that after this episode. The link will be in the show notes. As I was crafting the money leaks, after I had sealed up that episode and sealed up the recalibration field guide, which by the way, you can get at katenorthrup.com/field, or you can get it by sending me a DM on Instagram that says field. That field guide goes with the four part recalibration series that we just wrapped up here on Plenty to rave reviews. People have been telling me how incredibly helpful and illuminating it's been for them.
But after I wrapped it up, I identified one more money leak that can be happening in your hidden money ecosystem. Brief recap for those of you who don't know. Welcome. I'm so happy you're here. And I have a concept called the hidden money ecosystem, and it's two parts.
Everybody has a hidden money ecosystem. Whether you know it or you don't, you still have one. And it's everything that's underneath the surface. It's everything that runs under your money that happens before the actual results come in your financial life. The results meaning bigger income, bigger net worth, bigger growth.
One part of your hidden money ecosystem is the energetics. That's the stuff that is truly invisible. It's it's your emotions. It's your nervous system. It is your energetic and emotional relationship with money.
It's how you feel about money. Then the other side of it is your engineering, and your engineering is what are you actually doing with money? What sort of system and container do you have set up for your money? How are you tending to it? So the energetics is how do you feel about it, and the engineering is how are you tending to it?
Both of those things put together are your hidden money ecosystem. And when your hidden money ecosystem is functionally functioning in an optimal healthy way, you get a healthy financial expression. You get a sense of plenty. There's abundance. There's more than you need.
You're able to steward it well. You're able to do with it what you want in the world. You're able to invest well to grow your money, and also to give it to causes that or towards the kind of world that you wanna see. So that's your hidden money ecosystem. We have leaks in our hidden money ecosystem that we have identified in the Good With Money workshop.
And by the way, if you're just new here, if you're just tuning in, it is not too late. You can go to katenorthrup.com/good, or you can send me a DM on Instagram with the word good, or you can go to the link in the show notes, and you still have tons of time to join us for good with money. You can join in live. You can access the replays for a limited time. It is one time a year when I teach the world's most holistic, most powerful financial upgrade workshop.
And in it, one of the things we identified was the 10 most common money leaks. And the one that I had identified late before I could get it into the recalibration series was money and codependence or financial codependence. So first of all, when I taught codependence as a concept, it was earlier it was about six months ago. It was at a mastermind that I did as a bonus for people who enrolled in my friend James Wedmore's program, business by Design. So we did a live mastermind, and by the way, BBD is coming up.
Business by Design is BBD for short, so keep an eye out. Make sure you're on my email list. You can go to Kate Northrup dot com. Get on my email list. Make sure you hear about that.
If you are a course creator, you have a digital program of any kind, you have a membership, you do any kind of coaching, thought leadership, teaching online, this program is for you. So keep an eye out for that. So I did this mastermind, and the night before, I just got such a hit that I needed to teach about financial not financial codependency, but codependency as it relates to business. So codependency in your relationship with your business, codependency in your relationship with your clients, codependency in relationship with your team, etcetera. But today, I wanna talk about financial codependency because that conversation around business codependency blew up so much awareness and so many breakthroughs for a bunch of the attendees, and I'm still getting feedback about how much it helped them in their businesses and how much it helped them to recoup money that was leaking, and also to make more money in a way that requires them to work less, not work more.
How I described codependency on that day was that codependency is when you don't feel okay unless somebody else feels okay. So that's basically the state in which your own well-being depends on someone else being okay. So if you're okay, I'm okay. If you're not okay, I'm not okay. Codependency shows up in so many families, especially around addiction, where there's an addict and then everyone around them is in a whole dance around the behavior, around enabling codependency.
I am not an addiction specialist, but there are certainly plenty of places where you can learn more about that. But I do know that codependency also shows up in families where there's not explicit addiction, but where there's a tendency to have a lack of emotional boundaries, and just a lack of boundaries in general. You If wanna learn more about boundaries, go find my episode with my friend, Teri Cole. She wrote a great book called Boundary Boss. I believe it's called Boundary Boss.
We'll link it in the show When it comes to money, codependency can show up in several different ways that I'm aware of that I'm gonna name. You might have a different example. If you think of one, DM me. Number one, I see it show up with parents and adult children, or parents with young adult children around money, where parents will over give, give without boundaries, give without agreements, and give to a child, especially an adult child or a young adult child, because the parent is afraid that the child, even if they're an adult, even if they're past 18, is going to fall on their face if the parent does not support them financially. Now I am not giving hard and fast rules about how long to support your adult children, if you should at all.
I'm not the one to set rules around that. I though advocate so strongly for what I call abundance agreements, otherwise known as boundaries. So if you have a child who is capable of making their own money, but is not doing so or is not doing so to the degree that it would allow them to support themselves fully, and you're in the mix financially whether it's paying rent, paying for a mortgage, they're living at home, you're supporting them to one degree or another, my recommendation is to have clear agreements about it. So it's not about a hard and fast rule like, oh, you should pull support by any means, unless that feels right for you. What I do advocate for though is clarity.
And one of the things we do in Relax Money is we work on our abundance agreements together because I've never met anybody who came into my world already with abundance agreements in place. Most people have unspoken assumptions, unspoken expectations, and leaky boundaries to one degree or another. What this does with adult children or even children in their teens, and again, it completely depends on this scenario, is when there's money coming from the parent to the child, and there's not a clear boundary about what it's for, how much, what the child is expected to contribute or cover, etcetera, how long this support is gonna last, there's nebulousness. And when it comes to money, any lack of clarity is a drain in your money ecosystem. Money loves clarity.
Money is attracted to clarity. Money is detracted to clear boundaries and clear containers, But so often, parents will over parent, and they'll provide for their children well beyond the time that their child can provide for themselves without clear explicit agreements. And that is financial codependency. Because what it's saying subtly, subconsciously is, as a parent, I don't believe you are capable of doing this on your own, and therefore, I am going to do it for you, which is diminishing your child's inherent personal power and capability, and it enables them to not need to find out what they're made of. Now in my situation, I'll just share my own personal story.
I wrote about this quite a bit in my first book, Money, A Love Story. So if you want the full story, please check it out. I was very blessed to have some financial support when I left college. So I had a business. I worked in the network marketing industry.
I made a super solid income, but I also moved into an apartment in New York City that my mother purchased. And it was part of our business agreement that I would live in that apartment, and she would pay the expenses for it, and then I would pay x y z thing. But we did not have super clear agreements. There was like a lot of gray area and room for assumptions and misinterpretations. We never had like a clear contract.
We never spelled it out. So I had this financial support, but over time, I started to feel limited by it, and I could feel myself playing small because I didn't have a fire under my ass to go out and handle all of my living expenses. I handled most, but still it wasn't all of. And it's not that the support was a problem. It was that the lack of boundaries and agreements around it was a problem.
Once I turned 25, 26, it was somewhere around there. I started to feel how this was a money leak for me, and I ended that financial agreement with my mother, which took a little bit of unraveling, but it's the best thing I ever did because I was standing fully on my own two feet, and I was paying for my entire life, and wouldn't you know it, that same year that I cleared our financial agreements and disentangled myself from that financial codependence, I tripled my income, doubled my savings, and got out of debt. Coincidence? I think not. Because it was a profound act of personal financial power to disentangle the financial codependence.
So if this is showing up in your life on either end, if you're the person receiving the financial support and there's unclear boundaries, or if you're the person giving the financial support and there's unclear boundaries, and there's a sense of I'm doing this because I don't, on some level, believe that my kid can do it on their own, you really need to look at that because that will keep them small, and it will be by accident because obviously you want your kid to thrive. Every parent does. So it shows up there with adult children or older children and their parents. The other place it shows up that I see a lot is with business owners and employees or contractors, where the business owner, because they're the usually or often the revenue driver and they're the one in leadership, there's a sense of it's their job to take care of all of their employees, which I love. We have a value in our company, which is we really care.
That is one of our company values, and I do genuinely care about our employees and our contractors. However, their financial life is not my responsibility. My responsibility is to give them clear roles and responsibilities and to pay them according to the contract that we both have signed, which was the agreed upon salary or the agreed upon, you know, retainer or whatever it is, and the agreed upon package of benefits and all of that stuff. All of that stuff is agreements. It's in a contract, and it's very clear.
So as long as I uphold my end of the deal, that's what I'm responsible for, and then they hold up their end of the deal, they're responsible for it. All of this is incredibly explicit, and it is paperwork that we've both signed. What I see though, I've seen this with my clients, I've seen this with close friends, I've seen this all over the place, and I have made this mistake as well. It's been years, thank goodness, but I've made this mistake where as a business owner, somehow there's a subconscious contract that we sign where suddenly we feel like it's our responsibility to pay our people beyond the agreed upon amount or to pay them more than the business can sustain. And I've seen this put business owners in a tremendous amount of financial trouble where they've had to take out a second mortgage on their home, or they've ended up having to close the business because they've overextended and they've over given past the point that it makes sense for their particular business structure and their business financials, which is really why it's so important that we know our numbers, and that's why we call module one in Relaxed Money, safety in numbers.
There's a tremendous amount of safety and then power that comes from knowing what your lifestyle can sustain and what your business can sustain. The business conversation is a little bit of a different business a little bit of a different conversation, but it's still important to note that knowing your numbers personally and knowing your numbers business wise and knowing how those two things interact is one of the greatest acts of power that you can have because then it helps you to determine how much makes sense for my business. What percentage makes sense to pay my people? What percentage makes sense to pay taxes? Well, of course, you have to pay the amount of taxes that you have to pay, but but you can be strategic about that.
What percentage do I need to put aside for taxes? What percentage should I be setting aside to pay myself, owners pay? What percentage should I be paying in overheads for other expenses? What percentage should I be putting aside for investing and growing the business? And then what percentage can I put aside for actually like growing my wealth as a business owner?
One of the things within it's not included within Relax Money, but we have an offshoot, like an optional additional add on that you can bring in to address this in your own business if you're a business owner. You do not have to be a business owner in order to do Relax Money though. Now if you're a business owner and you're overgiving, you're overpaying your people to the detriment of your own income, to the detriment of not being able to pay other expenses, to having to shuffle things around. That is a problem, and that is financial codependency. You are not responsible for your employees' financial well-being.
You're responsible to pay them the amount that you agreed upon. Full stop. So notice if it comes up that even if it's subtle, that sense of, oh, I'm responsible for, or I'm supposed to take on all the financial well-being of my employees as though you are somehow their source. No one is our source. You are not your children's source.
You are not your employee's source. You are not your contractor source. You are not your friend source. You are not your family member source. You're not your spouse's source.
We are not the source of anything emotionally, financially, or any which way for anyone except for when we have small children who fully depend on us. You know, when I had newborns and I was exclusively breastfeeding, I was absolutely the source of their sustenance, and that was really important. Still, you know, my girls are still relatively small. They're eight and 10. I am definitely the source of their, you know, of their financial life, food, you know, shelter, all of that stuff.
Very, very important. But there comes a weaning off of that with children that I see a lot of people not actually doing, and then with everyone else, you've never been the source for them. So just notice where it comes up. The other place so we've talked about parents and children, you know, older children. We've talked about employers and employees or employers and contractors, and then the other place it shows up is with family members.
So maybe a sibling, maybe it's your parents, maybe it's close friends, or maybe you're the big earner in your friend group, and you feel like it's your responsibility to always pick up the tab or always pay for the hotel on the girls' trip, or I don't know where this may show up, but it's frequent that it shows up when there is a disparity in income levels, and the person who makes more money can feel in a codependent way that it's their responsibility to always pay for the other person or the other people. Now I wanna name that this is different than generosity. I love being generous. I love treating a friend for coffee. I love treating a friend for lunch.
I love taking a friend to a concert for her birthday or getting, you know, him a massage or something like that. Right? Like, I love that. That's different than financial codependency. Whether I give that gift or I don't, I trust that this other person is going to be emotionally fine, and my emotional well-being does not depend on me over giving to them financially.
So that's the distinction that's really important to ask yourself. Does your emotional well-being, does your ability to be okay depend on them being okay? And are you using money as a way to make them feel okay so that you can feel okay? Or are they doing that? And that's all you need to ask.
So financial codependency can show up in a lot of other places. I would imagine it shows up quite a bit in couples as well where there may be one or the other person who is taking on more of the brunt of the earning. Again, if it comes from a place of I'm doing this because I'm using money to make that person feel better so that their well-being is improved, which will probably be temporary because any amount of well-being beyond the foundational fundamentals that's being propped up by just money is going to be kind of a house of cards that's gonna be fragile. But anyway, that being said, if in a relationship, romantically, if you're using giving someone money or paying for things to make them feel better so that you fundamentally can feel better inside, that is a red flag. This was kind of like a little bit of a gnarly episode, but I really trust that there's at least one person of the thousands who listen to this show who needed to hear this message today.
So if it was you, will you send me a DM? I would love to know if this was impactful for you. Send me a DM. If you're watching this on YouTube, leave me a comment, below this video. Of course, subscribe.
Next week, we're gonna be talking about couples and money beyond codependency. It's not another episode about codependency, but it's a really important conversation about money and couples, especially for people who ask me, how do I get my partner on board with this work? So if you're asking that question, you're gonna wanna listen in. Thank you so much for listening. Again, financial codependency is when you are using money to make someone else feel okay so that you can feel okay, and it is a red flag.
It is a red flag. And there are so many things we can do about it, but the number one place you wanna start is getting clear boundaries, aka abundance agreements in place. And if you want help around this, register for Good With Money now. Go to katenorthrup.com/good. The link is also in the show notes.
You can also DM me the word good on Instagram, and you'll get all the information. The workshop is still happening. You are not too late, and I would love to see you there because you can absolutely go from financial codependency to financial health and strength within any relationship. I've done it. I've seen it done a million times, and you, my friend, are no different.
Thanks for tuning in, and I will talk to you next time. One last thing, and this is important. The difference between where you are now and where you wanna be financially is not effort. It's architecture. Join me for good with money, my free three day live financial upgrade experience, and we will close that gap together.
Tens of thousands have already done it, and you're next. Join us at katenorthrup.com/good. Again, that's katenorthrup.com/good.