WEBVTT - Financial Lessons Learned During Covid #239 0:00:00.040 --> 0:00:02.400 Welcome to How the Money. I'm Joel and I and 0:00:02.520 --> 0:00:06.120 Matt and today we're discussing financial lessons learned during COVID 0:00:06.519 --> 0:00:27.960 m Yeah, Joe, it's safe to say that our lives 0:00:27.960 --> 0:00:30.000 look a lot different now than they did at the 0:00:30.000 --> 0:00:32.320 beginning of the year. You know, a lot of our 0:00:32.360 --> 0:00:34.559 personal finances have really taken a hit, a lot of 0:00:34.600 --> 0:00:37.120 our incomes are are maybe a good bit lower than 0:00:37.159 --> 0:00:39.680 they used to be. This pandemic that we've lived through 0:00:39.760 --> 0:00:42.479 has certainly taught us a lot of lessons. And the 0:00:42.520 --> 0:00:44.400 thing is, these are lessons that we knew to be 0:00:44.440 --> 0:00:48.279 true before, but the coronavirus has heightened, you know, our 0:00:48.320 --> 0:00:50.600 awareness of these truths and the impact that we have 0:00:50.920 --> 0:00:52.800 on our lives. And so that's what we're gonna talk 0:00:52.840 --> 0:00:55.120 about today. Man, We're gonna talk through these different lessons 0:00:55.160 --> 0:00:56.640 that you and I that we've learned, that others have 0:00:56.760 --> 0:00:59.760 learned during this time of financial stress. Yeah, Matt. And 0:00:59.800 --> 0:01:02.320 it's been said that those who cannot learn from history 0:01:02.360 --> 0:01:05.160 are doomed to repeat it for that before, right, It's 0:01:05.160 --> 0:01:07.800 a popular phrase. Uh, And and so I think, yeah, 0:01:07.800 --> 0:01:09.880 if we don't learn these lessons, if we don't kind 0:01:09.880 --> 0:01:13.080 of document them, discuss them and basically learn from what 0:01:13.080 --> 0:01:15.399 we've gone through, right, I mean, we are learning a 0:01:15.400 --> 0:01:18.040 lot on the health front that is gonna hopefully help 0:01:18.120 --> 0:01:21.080 us in the case of, you know, a potential future pandemic, 0:01:21.080 --> 0:01:23.240 which I hope never happens, because this one's been pretty 0:01:23.240 --> 0:01:26.080 horrible in and of itself. But there are financial lessons 0:01:26.120 --> 0:01:28.080 that we should all be learning and we should put 0:01:28.080 --> 0:01:30.080 to use for our future, because I think you can 0:01:30.160 --> 0:01:33.720 help us whether upcoming storms, hopefully not pandemic storms in 0:01:33.720 --> 0:01:36.240 our financial future, but but other financial storms that we 0:01:36.280 --> 0:01:38.959 are going to go through, because they inevitably happen in 0:01:39.000 --> 0:01:40.839 life to all of us at one point or another. 0:01:40.959 --> 0:01:42.960 But before we get to that, Matt, I think a 0:01:43.000 --> 0:01:45.440 couple of weeks ago, I mentioned a new power line 0:01:45.480 --> 0:01:48.680 internet solution that that we purchased uh for homeschooling to 0:01:48.760 --> 0:01:51.800 help increase the Internet in our house. And I'm sure 0:01:51.960 --> 0:01:53.520 people have heard of this on the show before, but 0:01:53.760 --> 0:01:55.640 you know, Emily and I are family. We basically live 0:01:55.680 --> 0:01:59.000 in this duplex that we used to have somebody living 0:01:59.000 --> 0:02:00.360 in the back of our house, and now we kind 0:02:00.360 --> 0:02:02.440 of taking it all over, but we still have this 0:02:02.640 --> 0:02:05.480 kitchen in the back like a second kitchen, and we're 0:02:05.520 --> 0:02:07.919 five people. We don't need two kitchens. Almost nobody actually 0:02:07.960 --> 0:02:10.560 needs two kitchens. This is our breakfast kitchen, and lunch 0:02:10.600 --> 0:02:12.520 and dinner kitchen is up front. Yeah, that sounds like 0:02:12.919 --> 0:02:15.560 something a fancy person would have, right, you are pretty fancy, 0:02:15.639 --> 0:02:18.959 that's true. But yeah, so this kitchen basically there, it's 0:02:19.040 --> 0:02:20.640 used to storage, Like we put our bikes back there 0:02:20.639 --> 0:02:22.840 and stuff right now, and we realize, man, this is 0:02:22.840 --> 0:02:25.760 a perfect space to try to do homeschooling with the kids. 0:02:26.040 --> 0:02:29.200 And so I'm in the process of ripping everything out 0:02:29.240 --> 0:02:32.320 of the kitchen and selling off everything I can and 0:02:32.360 --> 0:02:35.480 just making it a conducive space to do homeschooling. And 0:02:35.480 --> 0:02:38.600 it's something that we probably wouldn't have thought about, and 0:02:38.680 --> 0:02:41.320 we probably would have just left it as is for 0:02:41.680 --> 0:02:44.320 a while longer or it not for this realization that, like, 0:02:44.360 --> 0:02:47.079 we need extra space. We can't just be doing everything 0:02:47.160 --> 0:02:49.560 in the girl's bedrooms. They already share a bedroom. If 0:02:49.600 --> 0:02:51.560 we put all the schooling in there plus their toys, 0:02:51.560 --> 0:02:52.880 I mean, it's just gonna be it's gonna be a 0:02:52.880 --> 0:02:56.120 close lot of stuff. Yeah. So yeah, I'm curious to 0:02:56.160 --> 0:02:58.440 know kind of what our listeners are doing and maybe 0:02:58.520 --> 0:03:00.720 what you're doing to Like, I'm sure so many people 0:03:00.800 --> 0:03:04.800 are reconsidering their the space in their home for how 0:03:04.800 --> 0:03:07.880 they're going to do childcare and schooling and all that 0:03:07.919 --> 0:03:10.480 kind of stuff, because we're all in a completely different 0:03:10.520 --> 0:03:12.720 boat right now. Yeah, man, And you know that's something 0:03:12.760 --> 0:03:14.520 that a lot of families here in Atlanta, I guess 0:03:14.639 --> 0:03:17.360 l A just other cities where schools are not opening 0:03:17.400 --> 0:03:21.440 in person, where they're only opening virtually or online this fall. 0:03:21.800 --> 0:03:23.480 But the thing is, in order to do that, you 0:03:23.520 --> 0:03:25.800 have to have somebody to help facilitate that, someone to 0:03:25.919 --> 0:03:28.000 watch the kids actually during the day. And men, you 0:03:28.040 --> 0:03:29.920 and I were our families are in a position where 0:03:29.960 --> 0:03:32.639 our wives it's maybe a little old school, but we're 0:03:32.720 --> 0:03:34.880 lucky enough to have them be stay at home moms. 0:03:34.880 --> 0:03:37.920 Those are some decisions that we have proactively made. But 0:03:37.920 --> 0:03:39.600 what that means is that we're lucky enough to have 0:03:39.920 --> 0:03:42.840 someone to oversee and facilitate that learning while the kids 0:03:42.880 --> 0:03:44.960 are at home. But man, we know that that is 0:03:45.000 --> 0:03:47.560 not the case for everyone. There's a lot of individuals 0:03:47.680 --> 0:03:50.360 who you know, we're both parents need to work, or 0:03:50.360 --> 0:03:52.520 if it's a single parent household, like that parent has 0:03:52.600 --> 0:03:54.560 to go back to work. Uh, and they're in a 0:03:54.560 --> 0:03:56.840 tough position to where they're having to figure out what 0:03:56.920 --> 0:03:59.360 childcare looks like for them as they go back to work, 0:03:59.400 --> 0:04:02.120 you know. And the thing is, not very many employers 0:04:02.280 --> 0:04:05.920 are offering any type of backup childcare or any additional 0:04:05.960 --> 0:04:09.400 benefits to help take care of those situations. Yeah. Sure, 0:04:09.480 --> 0:04:12.880 that's a stressfhold place to be in if especially if 0:04:12.920 --> 0:04:15.200 you have to go into a physical location to work. 0:04:15.360 --> 0:04:17.320 If you're working from home, that's hard enough, right to 0:04:17.440 --> 0:04:19.839 multitask and do both, But if you actually have to 0:04:19.880 --> 0:04:22.680 hop in the car go somewhere for work, how in 0:04:22.720 --> 0:04:25.920 the world if you're a single parent or both parents 0:04:25.920 --> 0:04:28.200 have to go into work, do you even come close 0:04:28.279 --> 0:04:30.480 to making sure your kids taken care of. We talked 0:04:30.480 --> 0:04:32.920 about pod schooling a while back, and that's one thing 0:04:32.960 --> 0:04:34.800 that some people are considering, and I think that can 0:04:34.839 --> 0:04:37.600 be helpful a small group of people and in your 0:04:37.640 --> 0:04:40.680 community doing school together with other kids that are in 0:04:40.720 --> 0:04:43.400 the same class or same grade. I think too, it's 0:04:43.400 --> 0:04:46.440 really important for a lot of parents right now to 0:04:46.600 --> 0:04:50.040 petition their their boss, to talk to someone in HR 0:04:50.400 --> 0:04:53.040 and see what's available, and to see if that company 0:04:53.080 --> 0:04:55.760 is willing to make more resources available when it comes 0:04:55.760 --> 0:04:58.359 to childcare, because obviously we're all just kind of winging 0:04:58.360 --> 0:05:00.000 it at the end of the school year last year. 0:05:00.360 --> 0:05:02.560 But at this point, I think employers have had enough 0:05:02.600 --> 0:05:05.240 time to kind of put some thought into Okay, I'm 0:05:05.279 --> 0:05:06.760 asking you to come back to work, I need you 0:05:06.839 --> 0:05:08.880 to be this productive. But at the same time, the 0:05:08.920 --> 0:05:11.560 options are pretty slim when it comes to how you 0:05:11.600 --> 0:05:15.000 handle childcare. And and so, yeah, I think employers do 0:05:15.080 --> 0:05:17.920 have a role to play in this conversation. And as 0:05:18.080 --> 0:05:20.680 an employee, I think you have every right to ask 0:05:20.720 --> 0:05:22.599 for your employer to help be a part of the 0:05:22.680 --> 0:05:26.040 solution in that case. Yeah, And personally, what I wouldn't 0:05:26.080 --> 0:05:28.320 want to see is like an employer trying to create 0:05:28.360 --> 0:05:31.320 their own daycare but instead, like you kind of hinted 0:05:31.360 --> 0:05:34.000 at this, but like just compensation, right, like additional funds, 0:05:34.000 --> 0:05:38.000 additional money, uh, that's kind of earmarked for childcare, you know, 0:05:38.320 --> 0:05:40.640 and then allow the individual employees to to figure out 0:05:40.760 --> 0:05:43.120 what is going to work best for them, because maybe 0:05:43.120 --> 0:05:45.400 for someone they were going to have a parent come 0:05:45.400 --> 0:05:47.599 and watch the you know, the kids, the grandkids, but 0:05:47.920 --> 0:05:51.160 knowing that there's compensation evolved might make that decision a 0:05:51.200 --> 0:05:53.720 lot a lot easier. Um, it's not a matter of 0:05:53.920 --> 0:05:56.880 having to create, uh, you know, this daycare program there 0:05:56.920 --> 0:05:59.600 on site or something crazy like that, although some employers 0:05:59.600 --> 0:06:01.320 are doing at But I think it would be more 0:06:01.360 --> 0:06:04.520 efficient and just a smarter use of time and money 0:06:04.760 --> 0:06:06.839 if you're able to to leave it up to the individual. 0:06:06.960 --> 0:06:08.880 But yeah, I couldn't agree more though. It's just to 0:06:09.000 --> 0:06:11.960 advocate for what it is that you need, because I mean, 0:06:12.000 --> 0:06:14.280 in the end, it's sort of supply in demand, right 0:06:14.320 --> 0:06:16.719 Like if employeers are seeing that, man, a lot of 0:06:16.800 --> 0:06:19.719 employees are demanding this, there's this other employer that is 0:06:19.760 --> 0:06:21.960 offering this. Well, you know, those employees are gonna see 0:06:21.960 --> 0:06:24.880 that that's a benefit that another company offers and they 0:06:24.880 --> 0:06:26.840 don't want to lose those those great employees. You know, 0:06:26.880 --> 0:06:31.160 It's it's expensive to train and recruit rehire employees. And 0:06:31.360 --> 0:06:33.920 at the very least, I think if your employer isn't 0:06:33.960 --> 0:06:36.599 doing anything to help you out when on the childcare front, 0:06:36.839 --> 0:06:39.000 you need to start the conversation now based on kind 0:06:39.000 --> 0:06:41.680 of what your school is doing, whether your kids going 0:06:41.720 --> 0:06:44.520 back to school or whether your kid is is homeschooling 0:06:44.720 --> 0:06:47.040 for the fall. You need to have that conversation now 0:06:47.080 --> 0:06:49.440 about what your work days look like and what the 0:06:49.760 --> 0:06:53.719 level of productivity expectation can be. And employers are definitely 0:06:53.720 --> 0:06:55.640 gonna have to be flexible on that front. I know 0:06:55.680 --> 0:06:57.600 if I was a single parent with two kids at 0:06:57.640 --> 0:07:00.240 home going to school trying to work as well, my 0:07:00.279 --> 0:07:03.040 productivity would would suffer greatly and I would hope that 0:07:03.080 --> 0:07:05.320 my employer would be understanding. And that's a conversation. I 0:07:05.360 --> 0:07:08.600 think that needs to start now, if if it hasn't already, Yeah, 0:07:08.760 --> 0:07:11.160 the sooner the better, for sure. On that, Let's go 0:07:11.160 --> 0:07:13.240 ahead and introduce our beer for this episode. Man, we 0:07:13.280 --> 0:07:16.480 are having Modus the Vendi and this is by the 0:07:16.520 --> 0:07:19.120 Wild Beer Company, and I'm looking forward to sharing our 0:07:19.160 --> 0:07:21.440 thoughts on this one, Buddy at the end of the episode. Yeah, 0:07:21.480 --> 0:07:23.640 this breweries out of the UK. Looking forward to having 0:07:23.800 --> 0:07:27.320 a foreign beer on today's episode. Yeah, so all right, 0:07:27.320 --> 0:07:29.840 But let's get onto the topic at hand, financial lessons 0:07:29.920 --> 0:07:32.800 learned during COVID, Matt. I don't think any of us 0:07:32.800 --> 0:07:35.200 ever expected to live through a pandemic. It wasn't not 0:07:35.240 --> 0:07:37.640 my radar. I know my mom was reading books about 0:07:37.640 --> 0:07:41.120 ebola back in the nineties and she's a nurse. She's 0:07:41.160 --> 0:07:43.200 a nurse, so she's like an upper ally. Yeah, she's 0:07:43.240 --> 0:07:45.040 interested in that stuff. And and so I was always like, 0:07:45.080 --> 0:07:47.080 all right, cool, that sounds like that's it's like a 0:07:47.120 --> 0:07:49.400 Grisham novel or something like that, But it never felt 0:07:49.400 --> 0:07:52.040 like it could actually be reality. But it is our 0:07:52.080 --> 0:07:54.920 reality right now. Right the current health crisis has had 0:07:54.960 --> 0:07:57.720 this domino like effect on so many other areas of 0:07:57.720 --> 0:07:59.600 our lives. We just talked about childcare, but of course 0:07:59.760 --> 0:08:02.400 finances as well. Some of our listeners have filed for 0:08:02.440 --> 0:08:05.200 unemployment for the first time, others have been furloughed, and 0:08:05.240 --> 0:08:07.680 others have just kind of seen what's happening around them 0:08:07.680 --> 0:08:10.240 and felt this keen sense of a need to say 0:08:10.280 --> 0:08:12.160 more money. Right. And so today on the show, Matt, 0:08:12.200 --> 0:08:13.920 you and I were gonna share some of the financial 0:08:14.000 --> 0:08:16.120 lessons that really seem to stick out like a sore 0:08:16.160 --> 0:08:18.240 thumb due to the impact of COVID on our lives. 0:08:18.520 --> 0:08:21.000 Because again, there are things we can take away there, 0:08:21.040 --> 0:08:22.960 there are lessons we can learn that are gonna help 0:08:23.000 --> 0:08:27.240 improve our financial trajectory from today moving forward. Yeah, man, 0:08:27.280 --> 0:08:29.120 And you know, some of these lessons we're going to discuss, 0:08:29.320 --> 0:08:32.480 they are probably something you've thought of already because you know, like, 0:08:32.480 --> 0:08:35.199 how could you not, especially if you've you know, listened 0:08:35.200 --> 0:08:37.040 to the show for a while. But there are gonna 0:08:37.040 --> 0:08:38.920 be some other financial lessons that we're gonna share that 0:08:39.000 --> 0:08:41.320 might feel brand new to you. But the impact of 0:08:41.360 --> 0:08:44.640 COVID has certainly taught us all a good bit. There 0:08:44.640 --> 0:08:47.400 are some broader macro money lessons that we've learned as 0:08:47.400 --> 0:08:50.200 a just as a whole society, But we're gonna stick 0:08:50.280 --> 0:08:52.960 mostly to you know, personal finance in this episode because 0:08:53.000 --> 0:08:54.920 that's what we do, man, That's what we talk about. Yeah, 0:08:54.960 --> 0:08:57.200 for sure, Matt. I think one of the first lessons 0:08:57.200 --> 0:08:59.160 that we need to mention that sticks out to me 0:08:59.640 --> 0:09:02.320 that I've learned through going through a pandemic was that 0:09:02.559 --> 0:09:06.280 emotions influence how we handle money in just a major way. 0:09:06.600 --> 0:09:10.520 Human emotion can be this simultaneously wonderful and terrible thing. 0:09:10.760 --> 0:09:13.400 Emotions can create the most beautiful feelings that lead to 0:09:13.720 --> 0:09:16.920 wonderful action, right, like like an incredible piece of art. 0:09:17.160 --> 0:09:19.800 Often those are inspired by an overwhelming emotion, right, But 0:09:20.040 --> 0:09:22.080 it can also lead us to eat a whole pint 0:09:22.080 --> 0:09:24.000 of ice cream in one sitting. I know you're eating 0:09:24.000 --> 0:09:25.640 the all the ice cream though in one sitting Matt, 0:09:25.679 --> 0:09:27.640 if if that happens to you, I have been known 0:09:27.679 --> 0:09:29.640 to lack some self control when it comes to eating 0:09:29.679 --> 0:09:32.480 ice cream, especially the good all these stuff. Right, But yeah, 0:09:32.559 --> 0:09:34.400 we're we're all dealing with a lot right now from 0:09:34.480 --> 0:09:37.480 the pandemic. Racial injustice is a real issue in our 0:09:37.520 --> 0:09:40.560 country right now, and it's an election here, so emotions 0:09:40.559 --> 0:09:42.800 are running high, and because of that, many of us 0:09:42.880 --> 0:09:46.920 are dealing with wider emotional swings. And it's just to me, 0:09:46.960 --> 0:09:50.319 it's so clear that the emotions that are happening around 0:09:50.400 --> 0:09:53.600 us interpersonal emotions to Matt with with people that were 0:09:53.600 --> 0:09:57.000 close to It's harder on parent child relationships, it's harder 0:09:57.040 --> 0:10:00.439 on partner relationships right now. And I think the increased 0:10:00.440 --> 0:10:03.959 emotional tension is affecting the way people actually handle their 0:10:03.960 --> 0:10:06.560 dollars and cents too. Yeah, like you mentioned, even on 0:10:06.600 --> 0:10:08.240 a personal level, right you know, Like we just talked 0:10:08.280 --> 0:10:11.560 about childcare difficulties at the top of the show, but 0:10:11.640 --> 0:10:15.520 even that can create higher psychological distress levels. Our emotions 0:10:15.559 --> 0:10:18.760 can cause us to follow these different urges to maybe 0:10:18.760 --> 0:10:21.080 spend more money or to sell stocks in a panic. 0:10:21.559 --> 0:10:23.920 Even just being aware of the fact that emotion can 0:10:24.040 --> 0:10:26.480 wreak havoc on our finances that can help us to 0:10:26.480 --> 0:10:29.800 take solid action to do something hopefully differently, in something 0:10:29.840 --> 0:10:32.280 that's a little bit more smart. You might just need 0:10:32.320 --> 0:10:35.000 to to reframe things mentally, or you know, you might 0:10:35.120 --> 0:10:36.920 need a trusted friend to talk to you off the 0:10:36.960 --> 0:10:41.240 ledge before maybe making a harmful money move. Yeah, sometimes 0:10:41.280 --> 0:10:44.480 it's hard to recognize kind of the emotion that's overtaken 0:10:44.559 --> 0:10:47.600 us until we've made the poor decision, Until we see 0:10:47.640 --> 0:10:50.800 the empty ice cream pint on the couch next to us, 0:10:50.960 --> 0:10:53.960 we're like, oh, yeah, that's what happened. And that's just 0:10:54.000 --> 0:10:55.560 common for so many of us. It's hard to see 0:10:55.559 --> 0:10:57.280 it coming on. It's hard to know that the emotion 0:10:57.600 --> 0:10:59.959 is overtaking us and is leading to disastrous results. And 0:11:00.080 --> 0:11:02.440 so yeah, I think Matt kind of putting things in 0:11:02.480 --> 0:11:06.040 place that can help you realize those emotions. Having, like 0:11:06.080 --> 0:11:08.480 you said, uh, someone to bounce something off of so 0:11:08.559 --> 0:11:12.240 you don't make a catastrophic money money move in a 0:11:12.280 --> 0:11:16.120 particularly emotional time is incredibly beneficial. And then right if 0:11:16.160 --> 0:11:18.440 you've made a bad financial move, I feel like that 0:11:18.640 --> 0:11:21.400 then feeds into feeling more stressed and it becomes this 0:11:21.480 --> 0:11:24.240 kind of perpetuating cycle if we can't stop it, and 0:11:24.320 --> 0:11:27.360 over time, like money in security leads to poor mental health. Matt, 0:11:27.360 --> 0:11:29.040 We've talked about this on the show before, but but 0:11:29.160 --> 0:11:32.319 not having a solid financial foundation leads to increased levels 0:11:32.320 --> 0:11:34.760 of stress and that UH studies then show that your 0:11:34.760 --> 0:11:37.720 i Q decreases by about a dozen points when your 0:11:37.720 --> 0:11:40.080 stress levels go up. There are very few of us 0:11:40.080 --> 0:11:43.200 who perform better at work and make better financial decisions 0:11:43.320 --> 0:11:45.040 when our brains feel fried. And so I just think 0:11:45.040 --> 0:11:47.199 that's where a lot of people are right now. And 0:11:47.320 --> 0:11:50.520 it's so so important to realize the impact that emotions 0:11:50.520 --> 0:11:52.439 can have on the way that we we handle our 0:11:52.440 --> 0:11:55.040 money because they have so much more power than we 0:11:55.080 --> 0:11:57.640 typically realize. And on a personal finance show, Matt, we're 0:11:57.640 --> 0:12:00.200 talking about the steps are the numbers, But emotion play 0:12:00.280 --> 0:12:03.559 such a huge part of how we handle our personal finances, 0:12:03.600 --> 0:12:05.400 and I think that needs to be acknowledged and it's 0:12:05.400 --> 0:12:08.280 something that more people in the personal finance fear should 0:12:08.280 --> 0:12:10.560 be talking about. Yeah, that's a lot of talk about 0:12:10.600 --> 0:12:12.640 emotions in our minds, right, but you know, we do 0:12:12.720 --> 0:12:15.320 feel that that's an important place to start because so 0:12:15.400 --> 0:12:18.600 much of personal finance has to do with what goes 0:12:18.640 --> 0:12:20.840 on inside of our heads. It's not just about knowing 0:12:20.880 --> 0:12:22.920 the right actions and right steps to take, you know, 0:12:22.960 --> 0:12:25.640 it's not just about the tips and tricks. Psychology and 0:12:25.640 --> 0:12:28.720 our our human behavior that plays a large role. You know. 0:12:28.760 --> 0:12:30.400 Now that we've covered all of that, let's go ahead 0:12:30.400 --> 0:12:33.160 and get to some more of these, maybe more tangible 0:12:33.240 --> 0:12:36.040 financial lessons that we've learned due to COVID and we'll 0:12:36.080 --> 0:12:48.319 get to those right after the break. We're back from 0:12:48.320 --> 0:12:50.680 the break. We're talking about financial lessons that we've learned 0:12:50.720 --> 0:12:52.960 during the pandemic, and Matt, let's talk about some of 0:12:52.960 --> 0:12:55.520 the takeaways that that we've had, things that we knew 0:12:55.600 --> 0:12:59.600 but but things that have become even more apparent of 0:12:59.720 --> 0:13:02.360 their level of importance. And one thing I think that 0:13:02.440 --> 0:13:05.240 just sticks out like a sore thumb, probably the thing 0:13:05.360 --> 0:13:08.400 that most people are feeling right now, is the importance 0:13:08.440 --> 0:13:12.000 of having a solid emergency fund, of having cash on hand. 0:13:12.280 --> 0:13:14.960 Right even though I think over the last ten years, 0:13:15.000 --> 0:13:18.120 in particular, the idea of having more cash in the 0:13:18.120 --> 0:13:20.440 bank has become downplayed. A lot of people were prone 0:13:20.480 --> 0:13:23.040 to prode you to invest that money, because why are 0:13:23.040 --> 0:13:25.880 you letting it sit around? And savings earning very little, right, 0:13:26.120 --> 0:13:28.800 especially as the stock market has been performing incredibly well, 0:13:29.240 --> 0:13:31.480 it just became more popular to frown on holding cash 0:13:31.760 --> 0:13:34.040 in those savings accounts, but then having money in the 0:13:34.040 --> 0:13:37.320 bank a minimum of roughly tred but you know, you 0:13:37.400 --> 0:13:40.160 and I are fans of people having six plus months 0:13:40.200 --> 0:13:42.640 of living expenses in the bank that they have a 0:13:42.679 --> 0:13:45.400 liquid access to. It became so much more vital as 0:13:45.440 --> 0:13:48.360 Americans were were no longer able to work and earn 0:13:48.400 --> 0:13:51.720 an income. So many Americans I think of Americans the 0:13:51.760 --> 0:13:54.840 last I saw, had their income negatively affected because of 0:13:55.000 --> 0:13:57.240 the pandemic, whether that was a full on job loss 0:13:57.320 --> 0:13:59.680 or even just being able to earn less because of 0:13:59.679 --> 0:14:02.560 what's opening. Yeah, and having cash on hand. Essentially, what 0:14:02.559 --> 0:14:04.760 we're talking about here is an emergency fund, right and 0:14:04.840 --> 0:14:07.439 hopefully you rarely need to tap that emergency fund, but 0:14:07.520 --> 0:14:10.640 if you do, it is important to have a financial 0:14:10.679 --> 0:14:14.400 fire drill in place, knowing how you'll respond to different 0:14:14.400 --> 0:14:17.680 financial scenarios that can take the stress down quite a bit. 0:14:18.040 --> 0:14:21.320 Even if you're barely saving any money currently, Knowing what 0:14:21.480 --> 0:14:23.840 and how much you can cut back if times get tough, 0:14:24.200 --> 0:14:26.320 that's gonna be comforting to you, you know, man for us, 0:14:26.360 --> 0:14:28.840 I know that we typically spend around four hundred bucks 0:14:28.880 --> 0:14:31.160 every month just to go about to eat, but I 0:14:31.200 --> 0:14:33.360 know that we don't need to do that every month. 0:14:33.400 --> 0:14:36.400 We also put a set amount towards saving for Christmas 0:14:36.440 --> 0:14:39.120 gifts as well as vacation every year. But again, I 0:14:39.160 --> 0:14:41.720 know that if we were in a tight spot, we 0:14:41.760 --> 0:14:44.720 could hit pause and get by on a whole lot less. 0:14:44.720 --> 0:14:47.760 And so having that plan and knowing how it is 0:14:47.840 --> 0:14:49.560 that we could cut back, you know, just knowing that 0:14:49.600 --> 0:14:51.880 there's some legal room there that definitely gives me some 0:14:51.960 --> 0:14:54.640 peace of mind. Yeah. I think in in middle school 0:14:54.680 --> 0:14:56.640 or something like that, Matt, we were supposed to kind 0:14:56.640 --> 0:14:59.040 of figure out our house how we would escape in 0:14:59.080 --> 0:15:02.680 the event of a fire. And I totally remember that right, like, 0:15:03.000 --> 0:15:04.600 we were supposed to meet as a family in one 0:15:04.640 --> 0:15:06.680 particular area, this is the best way to get out 0:15:06.680 --> 0:15:08.720 of the house, all that kind of stuff, And and 0:15:08.760 --> 0:15:10.600 that's a good exercise to go through as a family, 0:15:10.640 --> 0:15:12.720 to actually think about what would happen in the event 0:15:12.760 --> 0:15:15.800 of a legitimate fire in your house. But then, but 0:15:15.880 --> 0:15:18.840 I agree, doing something similar with your finances and thinking through, Okay, 0:15:19.000 --> 0:15:21.680 if stuff hits the fan, what do we do and 0:15:21.680 --> 0:15:24.520 and what are the first things that we cut immediately? 0:15:24.800 --> 0:15:26.840 What could our budget look like? What could we live on? 0:15:27.120 --> 0:15:30.080 That's so so helpful and and having that financial fire 0:15:30.160 --> 0:15:32.600 drill in place is something I think so many people 0:15:32.640 --> 0:15:35.240 would would benefit from. Yeah, man. And you know what's 0:15:35.280 --> 0:15:38.440 interesting too, is that we've seen people make changes to 0:15:38.520 --> 0:15:41.440 their spending. I think even if they haven't really thought through, 0:15:41.800 --> 0:15:44.520 you know, what steps they could take. We've seen because 0:15:44.520 --> 0:15:47.000 of the pandemic that upping your savings rate by spending 0:15:47.040 --> 0:15:49.880 less that it is almost always possible. Hopefully a less 0:15:49.880 --> 0:15:51.720 in our country has learned from the pandemic is that 0:15:51.760 --> 0:15:54.200 we don't need to spend as much as we are 0:15:54.240 --> 0:15:58.320 actually guilty of spending. Uh. The recent increased savings rate numbers, man, 0:15:58.360 --> 0:16:01.480 that's evidence that it actually can be done. As job 0:16:01.480 --> 0:16:03.960 losses piled up there, there were just millions of people 0:16:04.160 --> 0:16:06.920 getting laid off in an incredibly short period of time, 0:16:07.160 --> 0:16:08.720 but at the same time, we saw the savings rate 0:16:08.760 --> 0:16:12.000 in America that it was actually increasing. That is in 0:16:12.080 --> 0:16:15.040 large part because we couldn't go out and spend money 0:16:15.080 --> 0:16:17.600 like we usually would, and that has led to a 0:16:17.640 --> 0:16:21.120 realization for many that we can get by by spending less, 0:16:21.160 --> 0:16:23.600 and that our budgets are more in our control than 0:16:23.760 --> 0:16:26.560 you know we sometimes think. Yeah, So another lesson learned, 0:16:26.640 --> 0:16:30.680 upgrading your savings rate by spending less is almost always possible. 0:16:30.880 --> 0:16:32.800 I feel like that's one of the most common excuses 0:16:33.000 --> 0:16:35.880 when people talk about personal finance. It's I can't cut anymore, 0:16:35.920 --> 0:16:38.560 like there's nothing left. And for so many people that's 0:16:38.560 --> 0:16:40.320 just not the case. We found that out. And if 0:16:40.360 --> 0:16:42.640 you actually look at your budget and you actually comb 0:16:42.720 --> 0:16:44.560 through your credit card bills and you see what you're 0:16:44.560 --> 0:16:47.520 spending money on every single month, I guarantee there's something 0:16:47.520 --> 0:16:50.440 that ninety five plus percent of us could find that 0:16:50.600 --> 0:16:52.960 doesn't need to be there, or a bill that can 0:16:52.960 --> 0:16:55.680 be slashed in some way, form or fashion. And so yeah, 0:16:55.760 --> 0:16:58.400 upping your savings rate it's almost always possible. I think 0:16:58.400 --> 0:17:00.920 that's something that we've we've learned as we've seen, like 0:17:00.960 --> 0:17:04.560 you said, historic job losses, and yet UH savings rates 0:17:04.600 --> 0:17:07.720 increases across the board at the same time. Another lesson, though, Matt, 0:17:07.760 --> 0:17:11.000 that we've learned during the pandemic is that prioritizing debt 0:17:11.040 --> 0:17:14.000 payoff is almost never a bad idea. And I do 0:17:14.040 --> 0:17:15.840 stress almost and I'm gonna get to that in just 0:17:15.880 --> 0:17:18.400 a second. Why. But yeah, working towards not having debt 0:17:18.680 --> 0:17:21.760 is this foundational, uh personal finance principle right at the 0:17:21.800 --> 0:17:24.439 core of wealth building. It's in the fact that we 0:17:24.480 --> 0:17:26.520 need to be earning interests and not paying it out 0:17:26.560 --> 0:17:29.680 to the banks that it puts us in a tough position, right, 0:17:30.000 --> 0:17:32.359 And so you and I were fans of helping people 0:17:32.640 --> 0:17:35.280 think through debt payoff in order to get in a 0:17:35.320 --> 0:17:38.240 stronger financial position. But at the same time, while eliminating 0:17:38.240 --> 0:17:41.200 debt is so helpful to a person's financial journey, it's 0:17:41.200 --> 0:17:44.879 actually even more important when the infected respiratory droplets hit 0:17:44.880 --> 0:17:47.359 the fan, right, the entire country stays at home and 0:17:47.400 --> 0:17:50.200 you lose your job. So like, while student loan deferments 0:17:50.200 --> 0:17:53.000 and other programs to postpone debt payments, they've been nice, 0:17:53.040 --> 0:17:54.679 but think about how much better it would be if 0:17:54.720 --> 0:17:57.240 you didn't have those loans altogether, if you had come 0:17:57.320 --> 0:17:59.600 up with a plan to pay off those debts quickly. 0:18:00.040 --> 0:18:02.120 I did say that the lesson was that it's almost 0:18:02.240 --> 0:18:04.080 never a bad idea, right. So on the flip side, 0:18:04.440 --> 0:18:06.919 eliminating that emergency fund that we just talked about in 0:18:07.000 --> 0:18:09.960 order to get rid of your debt more quickly. Places 0:18:10.080 --> 0:18:13.240 too high of a priority on debt elimination in most cases, 0:18:13.600 --> 0:18:15.840 because in the event of job loss, it's nice, of 0:18:15.840 --> 0:18:18.160 course to not have a student loan payment, It's nice, 0:18:18.200 --> 0:18:20.439 of course to not have a mortgage, but if you 0:18:20.480 --> 0:18:22.520