WEBVTT - Recession Proofing Your Finances (Bestie) #125 0:00:00.040 --> 0:00:03.480 Why hello there, Matt. I was like, going, man, all right, 0:00:03.520 --> 0:00:05.280 so we've never started a show like that. I know 0:00:05.400 --> 0:00:07.880 this is a weird beginning, but there's a reason for that. 0:00:07.920 --> 0:00:11.119 This is our first bestie episode, and the reason that 0:00:11.160 --> 0:00:13.960 we're releasing what we're calling a bestie episode is there's 0:00:13.960 --> 0:00:16.280 there's no reason for it, no reason, yeah, other than 0:00:16.320 --> 0:00:17.520 you and I just we want to be able to 0:00:17.560 --> 0:00:19.119 kick back and hanging on the porch and have a 0:00:19.160 --> 0:00:22.440 beer without talking. Right, No, man, I got diapers to change, now, Okay, 0:00:22.480 --> 0:00:25.280 both of us do. That's right. Our babies have been born, 0:00:25.760 --> 0:00:28.720 so we're pretty excited. We got two little dudes each, No, 0:00:28.960 --> 0:00:31.280 just one each one each. You've do total. You've got 0:00:31.280 --> 0:00:34.320 Ezra David. That's right, Yeah, Ezra David. He was born 0:00:34.680 --> 0:00:37.840 just like his dad, super long, super skinny, so twenty 0:00:37.840 --> 0:00:41.159 two inches long, d percent for height already. It's a 0:00:41.280 --> 0:00:44.040 joy having him around. But the sleepless nights, it's kind 0:00:44.040 --> 0:00:45.920 of one of those things. It's a jarring experience to 0:00:45.920 --> 0:00:47.760 have a new boy. Yeah, I forgot you did it 0:00:47.760 --> 0:00:50.440 more recently than me. Yeah. It feels awesome now kind 0:00:50.440 --> 0:00:53.000 of being a family five, whereas before we were just four. Man, 0:00:53.040 --> 0:00:55.800 I forget how sort of physically ill I feel when 0:00:55.800 --> 0:00:57.320 I don't get enough sleep, Like I wake up in 0:00:57.320 --> 0:00:58.800 the morning when I haven't gotten a lot of sleep, 0:00:58.840 --> 0:01:00.400 and I literally feel like I'm gonna throw up, like 0:01:00.440 --> 0:01:04.360 I feel nauseous. But yeah, Weston James, he has joined 0:01:04.400 --> 0:01:07.040 our family as well. At the moment. He's got those 0:01:07.040 --> 0:01:09.720 bright blue eyes, which is odd because neither my wife 0:01:09.920 --> 0:01:11.920 or I have blue eyes. Were loving it. We think 0:01:11.920 --> 0:01:14.440 it's the best thing ever. Both your wife and Kate, 0:01:14.520 --> 0:01:17.480 my wife, they're doing awesome. Healthy babies, healthy mamas. We 0:01:17.480 --> 0:01:20.440 could not be any happier. Quick question for you. Have 0:01:20.560 --> 0:01:24.360 you been initiated yet by your son on the changing table? Oh? Yeah, 0:01:24.360 --> 0:01:27.400 you know talking about so we've only had daughters. Apparently 0:01:27.480 --> 0:01:29.880 when you have a boy and you're changing the diaper, 0:01:30.000 --> 0:01:33.679 you gotta cover up. And my wife totally got initiated 0:01:33.720 --> 0:01:35.680 when all over the place, my wife and oldest daughter, 0:01:36.520 --> 0:01:38.440 she was like watching and then she's like, wait, whoa, 0:01:38.520 --> 0:01:42.040 it's going upwhere? Yeah? Yeah, Weston all over himself, all 0:01:42.120 --> 0:01:44.440 over the table, all over the wall. You hear stories 0:01:44.440 --> 0:01:46.080 about it and you think, sure, I guess that will 0:01:46.080 --> 0:01:48.880 happen at some point, But it's still incredibly surprising, and 0:01:48.960 --> 0:01:51.320 you learn quickly to have an extra cloth there to 0:01:51.360 --> 0:01:53.080 be able to cover up while you're changing that diaper. 0:01:53.160 --> 0:01:55.800 So no word to the wise. Nobody ever expects to 0:01:55.800 --> 0:01:58.680 get urinated on, and then it happens. PM. Man, these boys, 0:01:58.680 --> 0:02:00.720 we got them together the other day. They're awesome. It's 0:02:00.720 --> 0:02:02.600 gonna be so much fun having sons and Dude, they 0:02:02.600 --> 0:02:04.360 were only born two days apart, so I'm pretty sure 0:02:04.360 --> 0:02:06.680 they're gonna be best friends too. And I'm just excited 0:02:06.720 --> 0:02:09.800 to hear their podcast about like passifiers and onesies. That's 0:02:09.919 --> 0:02:12.520 what that newborn life is all about. Man. But speaking 0:02:12.560 --> 0:02:15.280 of episodes, speaking of podcasts, this is gonna be our 0:02:15.320 --> 0:02:18.400 first bestie episode, and we are releasing this one again. 0:02:18.520 --> 0:02:21.800 This is the recession Proofing your Finances episode. Man, this 0:02:21.840 --> 0:02:23.840 is gonna be our first best episode. And this was 0:02:23.880 --> 0:02:26.920 all about getting your your personal finances in order. Yeah, 0:02:26.919 --> 0:02:29.040 basically on this episode, we talked about how to view 0:02:29.120 --> 0:02:33.000 your employment in light of a potential upcoming recession, how 0:02:33.040 --> 0:02:36.040 to think about investing when a recession is potentially looming, 0:02:36.200 --> 0:02:38.600 and Matt, We've gotten so many questions, so many people 0:02:38.880 --> 0:02:42.320 concerned because headlines CNBC, there's a lot of recession talk. 0:02:42.320 --> 0:02:44.120 A lot of people are worried, and so I think 0:02:44.160 --> 0:02:46.160 there are some solid steps that people can take that 0:02:46.200 --> 0:02:48.400 we outline in this episode that can be really helpful 0:02:48.600 --> 0:02:50.720 for folks to to consider and to implement so that 0:02:50.760 --> 0:02:53.280 they feel a little sturdier. And you know what, even 0:02:53.320 --> 0:02:56.320 if a recession doesn't hit, even if the economy stays 0:02:56.400 --> 0:02:59.320 chugging along, these are not bad things to think about anyway. 0:02:59.400 --> 0:03:01.680 So we got eight responses from listeners when this was 0:03:01.720 --> 0:03:04.400 originally released, and I know we've got a lot of 0:03:04.440 --> 0:03:06.720 new listeners who haven't delve back this far, and so 0:03:06.760 --> 0:03:08.240 I think there are a lot of good nuggets in 0:03:08.280 --> 0:03:10.679 here for for everybody. Yeah, it's just great to have 0:03:10.840 --> 0:03:13.320 a solid grasp of the fundamentals, regardless of what the 0:03:13.680 --> 0:03:16.200 market and regardless of what the economy is doing. These 0:03:16.200 --> 0:03:18.600 are the building blocks of our financial lives. And so, 0:03:18.720 --> 0:03:21.880 without further ado, we hope that you enjoyed this episode. 0:03:21.960 --> 0:03:23.560 All right, now, I'm gonna go get some cuddle time 0:03:23.600 --> 0:03:26.680 with my little dude. Welcome to How to Money. I'm Joel, 0:03:26.880 --> 0:03:49.800 I'm Matt, and today we're talking about recession proofing your finances. So, Joel, 0:03:49.840 --> 0:03:53.600 I know how much you love diapers where I'm all 0:03:53.640 --> 0:03:57.520 the time, Dude, I'm going to mention a personal fail, 0:03:57.680 --> 0:03:59.760 which is my my wife and I, Kate and I, 0:03:59.840 --> 0:04:02.400 we thought that twenty nineteen would be the year that 0:04:02.440 --> 0:04:05.240 we kicked diapers to the curb. Our third daughter just 0:04:05.320 --> 0:04:07.200 turned two, and we thought, you know what, it might 0:04:07.240 --> 0:04:09.440 be time. We think she's she's pretty smart, she's pretty sharp, 0:04:09.840 --> 0:04:11.760 she's pretty with it, and get her on that potty 0:04:11.760 --> 0:04:14.520 train band wide. Yes exactly. Well, she's got two older sisters, 0:04:14.520 --> 0:04:16.159 and we thought with her seeing it all the time, 0:04:16.240 --> 0:04:19.400 she'd be ready for it. And I was really excited 0:04:19.400 --> 0:04:21.680 about being able to cut diapers from the budget. And 0:04:21.880 --> 0:04:23.560 and I talked about it, and we decided that if 0:04:23.600 --> 0:04:25.960 we were going to cut diapers, that we would keep 0:04:26.000 --> 0:04:28.039 that amount of money in the budget and then just 0:04:28.080 --> 0:04:29.640 be able to eat a little bit nicer. So we're 0:04:29.640 --> 0:04:32.880 not actually increasing our food budget, but we would be 0:04:32.920 --> 0:04:36.760 able to get say, nicer cheese, is nicer meets the sharkutie, 0:04:37.080 --> 0:04:41.000 to get to eat the diaper money. Yeah exactly, But man, 0:04:41.040 --> 0:04:43.479 we totally failed. We we came back at the beginning 0:04:43.480 --> 0:04:46.640 of the year, beginning of January, and we're hoping that yeah, 0:04:46.720 --> 0:04:48.680 we'd be able to kick it off. But that's not 0:04:48.720 --> 0:04:51.480 on you. That's on Dottie. Okay, that's her fault, and 0:04:51.560 --> 0:04:53.080 I will talk to her about it. She needs upper 0:04:53.120 --> 0:04:56.400 game in all fairness, though she's only twenty four months, 0:04:56.600 --> 0:04:58.760 and with the other girls, we waited until I think 0:04:58.800 --> 0:05:01.160 like twenty six and maybe twenty eight months, but we 0:05:01.240 --> 0:05:02.680 just we just thought we were ready. We thought she 0:05:02.720 --> 0:05:05.520 could handle it. And really we're most excited about being 0:05:05.520 --> 0:05:08.200 able to cut diapers from the budget. So who knows, man, 0:05:08.200 --> 0:05:09.440 it might be a few more months now that we're 0:05:09.480 --> 0:05:12.920 gonna rock those diapers and no nice cheese. Is any 0:05:12.960 --> 0:05:15.640 parents out there listening, They totally know or remember the 0:05:16.240 --> 0:05:19.120 potty training stage, And it's different for every kid. Like 0:05:19.160 --> 0:05:22.920 I swear our first daughter, Selma, like overnight, she had 0:05:22.960 --> 0:05:26.320 like one accident maybe, but no overnight accidents. It was amazing. 0:05:26.400 --> 0:05:28.560 And then our second daughter still did pretty well, but 0:05:28.800 --> 0:05:30.560 it was completely different. It took a lot longer than 0:05:30.600 --> 0:05:32.560 we thought and we had to keep wearing the pull 0:05:32.600 --> 0:05:34.920 ups at night, and so it's different for every kid, 0:05:34.960 --> 0:05:36.839 and some kids don't get it till later, and some kids, 0:05:36.839 --> 0:05:39.080 well boys as well, Like yeah, with boys, it takes 0:05:39.200 --> 0:05:41.280 much longer. So typically, I mean a lot of times 0:05:41.320 --> 0:05:43.160 I think boys are around three years old before they 0:05:43.160 --> 0:05:45.440 even consider potty training. But yeah, like it said, it's 0:05:45.440 --> 0:05:47.000 different for all kids. So you were just hoping that 0:05:47.080 --> 0:05:50.200 dotty was like a bathroom Mozart, like a proud of basically, yeah, 0:05:50.440 --> 0:05:53.039 we we were even ambitious enough to say, do we 0:05:53.080 --> 0:05:54.919 even need to pull up the little toy potty, you know, 0:05:54.960 --> 0:05:57.159 like the little kid one, because she would climb up 0:05:57.320 --> 0:06:00.159 onto the stool and hop up on the on the 0:06:00.160 --> 0:06:03.200 toilet like the big girls do. Nope, Ye, huge fail. 0:06:04.080 --> 0:06:06.640 All right, speaking of goals, so we're you're well into 0:06:06.720 --> 0:06:09.000 January at this point, but I think it's okay for 0:06:09.040 --> 0:06:11.560 people still to set a goal to kind of improve 0:06:11.680 --> 0:06:14.320 in a way in one way or another. And I 0:06:14.360 --> 0:06:16.720 think sometimes maybe at this point, maybe you're two and 0:06:16.720 --> 0:06:18.279 half weeks in and you've already failed at a goal 0:06:18.360 --> 0:06:21.400 or two like Dottie did, right, Dottie completely failed. Yeah, 0:06:21.440 --> 0:06:24.240 it just fell flat on her face. Yeah, so maybe 0:06:24.240 --> 0:06:26.200 you haven't met your goal. I think, like we talked 0:06:26.200 --> 0:06:28.200 about in the Creating a Money roadmap, sometimes it's those 0:06:28.240 --> 0:06:30.440 little things. It's it's not necessarily the end goal that 0:06:30.520 --> 0:06:32.120 is the good goal to have. It's it's the little 0:06:32.120 --> 0:06:33.920 incremental things that you can do along the way they're 0:06:33.920 --> 0:06:36.200 going to help you achieve that bigger goal. And one 0:06:36.240 --> 0:06:38.040 thing I wanted to mention that's been kind of helpful 0:06:38.040 --> 0:06:40.880 to me recently is when I really need to buckle 0:06:40.920 --> 0:06:43.279 down and get some work done is putting my phone 0:06:43.360 --> 0:06:46.720 in airplane mode. And just like I mentioned a long 0:06:46.800 --> 0:06:49.120 time ago that it's been helpful for me to put 0:06:49.120 --> 0:06:51.720 my phone in gray scale mode because I just want 0:06:51.760 --> 0:06:53.960 to look at it less. It just makes me less 0:06:54.320 --> 0:06:57.000 interested in looking at Instagram or Facebook. In the same 0:06:57.040 --> 0:06:59.479 way again, if I really want to buffle down at work, 0:06:59.520 --> 0:07:01.720 it makes it look like a kindle, which exactly I 0:07:01.839 --> 0:07:05.560 tell you that I got my kindle by the all right, anyway, 0:07:05.600 --> 0:07:07.840 sorry to interrupt. So yeah, I mean, I think for 0:07:07.880 --> 0:07:09.640 anybody that really wants to buffle down and get something 0:07:09.680 --> 0:07:12.160 done and they feel like their phone is constantly distracting them, 0:07:12.320 --> 0:07:15.400 you know, set an hour or two hours or even 0:07:15.440 --> 0:07:17.760 just thirty minutes in a row of having your phone 0:07:17.760 --> 0:07:19.960 on airplane mode, you'll just kind of forget that it's 0:07:19.960 --> 0:07:22.920 even there, and you'll you'll actually get more done. Because 0:07:22.920 --> 0:07:25.400 we don't realize how how often we're interrupted by our phone, 0:07:25.400 --> 0:07:27.800 by a text message, by notification, by an alert, and 0:07:27.880 --> 0:07:29.720 so just kind of putting it completely out of sight, 0:07:29.760 --> 0:07:31.240 out of mind is like a great way to kind 0:07:31.280 --> 0:07:34.000 of boost your productivity. Yeah, man, I totally agree, you know, 0:07:34.080 --> 0:07:36.720 And past few months, I've actually had my phone on 0:07:37.120 --> 0:07:39.320 when it's on silent mode that it doesn't vibrate, so 0:07:39.320 --> 0:07:42.160 it's basically completely silent. Which the reason I did that 0:07:42.240 --> 0:07:44.080 was because I would have my phone sitting on my desk, 0:07:44.560 --> 0:07:46.400 and you know, you get all the spam calls and 0:07:46.400 --> 0:07:48.200 you can recognize them because their area codes that you 0:07:48.200 --> 0:07:51.240 don't recognize. But I still would reach over towards it 0:07:51.320 --> 0:07:53.040 to silence. It would hit the little button to make 0:07:53.040 --> 0:07:55.640 it stop vibrating because I don't want to burn my battery. 0:07:55.880 --> 0:07:58.720 But just the fact of reaching towards my phone, I 0:07:58.720 --> 0:08:00.640 would kind of pick it up and then hop over 0:08:00.680 --> 0:08:03.200 to an app and it would Yeah, it was another distraction. 0:08:03.360 --> 0:08:05.800 It's a total attention breaker. Yeah, But that being said, 0:08:05.800 --> 0:08:07.960 it doesn't break my attention nearly as much if it 0:08:07.960 --> 0:08:09.680 just kind of pops up if I see the notification, 0:08:09.920 --> 0:08:11.640 because I won't reach for it. For for me, it 0:08:11.720 --> 0:08:14.000 was the physical act of reaching towards it is what 0:08:14.080 --> 0:08:16.280 threw me off. But I can kind of dart my 0:08:16.320 --> 0:08:18.360 eyes over and see that it's just an unknown caller 0:08:18.440 --> 0:08:20.600 or a number I don't recognize and keep moving on 0:08:20.640 --> 0:08:22.000 with life. But yeah, I'm with you, man, If I 0:08:22.040 --> 0:08:24.800 need to really buckle down, flipping it over to airplane 0:08:24.800 --> 0:08:27.120 mode is is truly the only way just to to 0:08:27.160 --> 0:08:30.480 get quality, deep work done, which is which is key. Yeah, 0:08:30.520 --> 0:08:33.440 And sometimes, honestly, doing something like that actually means you 0:08:33.520 --> 0:08:36.079 might have fewer hours of work that you actually have 0:08:36.120 --> 0:08:38.960 to put in, because if you're more productive while you're 0:08:38.960 --> 0:08:41.080 working with your phone and airplane mode, you might not 0:08:41.120 --> 0:08:43.120 have to work as many hours in the day because 0:08:43.120 --> 0:08:45.000 the hours you're working are so much more productive now 0:08:45.040 --> 0:08:46.880 you don't have that restart time. They say that anytime 0:08:46.920 --> 0:08:48.720 you have a break in your concentration like that, sometimes 0:08:48.760 --> 0:08:50.839 they can take up to fifteen minutes to kind of 0:08:50.840 --> 0:08:53.040 get your train of thought back completely where you're back 0:08:53.040 --> 0:08:55.520 in the groove. And man, I completely agree with that, 0:08:55.800 --> 0:08:58.079 Sweet Matt, So let's tell everybody the beer we're drinking 0:08:58.120 --> 0:09:00.840 in today's episode. Today's beer was sent to us by 0:09:00.840 --> 0:09:04.720 a listener, Philip from Chico. California, which is where Sierra 0:09:04.760 --> 0:09:07.800 Nevada's base. So I don't think he works there, but 0:09:07.880 --> 0:09:09.960 he lives there, and I love that he sent us 0:09:10.000 --> 0:09:14.560 this beer in particular, Mathmer. Yeah, this beer is called Resilience, 0:09:15.000 --> 0:09:18.679 Butte County Proud I p A. And if you're not aware, 0:09:18.800 --> 0:09:21.960 there have been a lot of wildfires in California and 0:09:22.040 --> 0:09:25.120 a lot of the employees of the brewery Sierra Nevada, 0:09:25.200 --> 0:09:27.120 which is one of the biggest craft breweries in the 0:09:27.240 --> 0:09:31.360 nation right were affected, were displaced by the wildfires surrounding 0:09:31.360 --> 0:09:34.080 their brewery and surrounding where their employees live. And so 0:09:34.400 --> 0:09:37.560 Sierra Nevada decided to brew this beer Resilience UH and 0:09:37.640 --> 0:09:41.160 donate all the proceeds to a fund that helps those 0:09:41.200 --> 0:09:43.800 that were impacted by by the fire. And the really 0:09:43.800 --> 0:09:46.720 cool thing, Matt, my favorite part about this story of 0:09:46.760 --> 0:09:51.000 this beer is that other breweries, hundreds of other breweries 0:09:51.040 --> 0:09:54.920 around the country have banded around Sierra Nevada to brew 0:09:55.120 --> 0:09:58.640 this same recipe at their breweries and they're selling it 0:09:58.840 --> 0:10:01.160 and doing the same exact thing. Yeah, so totally awesome. 0:10:01.200 --> 0:10:03.320 I went to a brewery recently and they had their 0:10:03.320 --> 0:10:05.920 own version of Resilience it's the same exact recipe because 0:10:05.960 --> 0:10:07.400 here and about to put the recipe out there for 0:10:07.440 --> 0:10:10.959 everyone to use. And they said so they're calling it Resilience, 0:10:11.240 --> 0:10:13.320 and and they're saying that all the proceeds are going 0:10:13.360 --> 0:10:15.720 to to the same camp fire fund, helping, you know, 0:10:15.720 --> 0:10:19.000 people that were impacted by the by the fires in California. Yeah, man, 0:10:19.040 --> 0:10:21.199 I love that. And even if you don't love craft beer, right, 0:10:21.240 --> 0:10:23.920 you can admire the community and the support that is 0:10:24.040 --> 0:10:26.720 rallying together in order to help change people's lives that 0:10:26.720 --> 0:10:29.240 were affected by those fires. I love that. Yeah, such 0:10:29.240 --> 0:10:32.440 a cool way to use the beer. And I already 0:10:32.600 --> 0:10:36.080 love the packaging. It kind of reflects the beauty of 0:10:36.160 --> 0:10:38.040 that part of the world. And also just like those 0:10:38.120 --> 0:10:40.160 roots kind of coming out of the name Resilience on 0:10:40.160 --> 0:10:43.560 the can reminds you of that community, grassroots effort, the 0:10:43.640 --> 0:10:46.400 roots run deep. I love it. It's got the Yosemite look, 0:10:46.400 --> 0:10:49.920 which is basically my favorite place on earth. So I 0:10:49.960 --> 0:10:53.600 already love it. But let's go ahead and taste it. Man. Cheers. Man, dude, 0:10:53.600 --> 0:10:56.120 that's awesome. And before we mentioned our one word, I 0:10:56.160 --> 0:10:57.720 wanted to share why we have a beer every week, 0:10:57.760 --> 0:10:59.600 which is craft beer. Is something that you and I 0:10:59.640 --> 0:11:02.679 love obviously, and so we have a beer while we 0:11:02.720 --> 0:11:04.679 talk about money, and it's just one of the things 0:11:04.720 --> 0:11:06.360 that we care about, and it's one of the things 0:11:06.400 --> 0:11:09.000 that we're not depriving our life of. It is something 0:11:09.040 --> 0:11:11.480 that we value and because that we spend money, right, Like, 0:11:11.520 --> 0:11:13.559 we were not looking to cut back in every single 0:11:13.600 --> 0:11:15.839 aspect of life, but we try to be intentional with 0:11:15.880 --> 0:11:17.720 our money. Craft beer is one of the ways that 0:11:17.760 --> 0:11:20.360 we are intentional and do spend money. So just keep 0:11:20.360 --> 0:11:22.160 that in mind when you're seeking to kind of get 0:11:22.200 --> 0:11:25.080 your financial life and order right. It's okay to spend money, 0:11:25.120 --> 0:11:26.640 just make sure you're spending money on the things that 0:11:26.679 --> 0:11:29.240 matter to you, all right. Ji. Also, what's your one 0:11:29.240 --> 0:11:32.000 word to describe this beer? Alright? My word is gonna 0:11:32.160 --> 0:11:35.120 involve the use of a hyphened So I'm going old school. 0:11:35.440 --> 0:11:37.600 I don't even know if that's hyphenated, but I'm going 0:11:37.640 --> 0:11:39.880 for it. That's not only way to get both those words. 0:11:39.880 --> 0:11:41.040 You just say, yeah, you just wanted it to be 0:11:41.160 --> 0:11:45.000 hyphen it is so you can get two words and cheater. Alright, Matt, 0:11:45.040 --> 0:11:48.120 what word would you use to describe this week's beer? Yeah? Man, 0:11:48.120 --> 0:11:50.319 my word is multi, So a little bit later on 0:11:50.360 --> 0:11:52.640 the show, we'll get into why we use those words 0:11:52.640 --> 0:11:55.040 to describe this beer, but for now, let's get to 0:11:55.080 --> 0:11:58.240 the subject at hand, Matt, recession proofing your finances. And 0:11:58.280 --> 0:12:00.360 we really wanted to tackle this topic, Matt, because there 0:12:00.400 --> 0:12:04.079 are so many people doom and gloom naysayers that saying 0:12:04.120 --> 0:12:07.120 that the economy is going to crash any moment, And truly, 0:12:07.120 --> 0:12:09.280 the economy has been doing really well for the past 0:12:09.320 --> 0:12:12.080 pretty much decade, right, And I think it's really important 0:12:12.280 --> 0:12:14.480 for our listeners to know that that we shouldn't be 0:12:14.520 --> 0:12:18.480 paying super close attention to these predictions of a recession, 0:12:18.920 --> 0:12:21.280 but it is good to be prepared right for whatever 0:12:21.520 --> 0:12:25.160 might occur, And in particular, preparing for a recession is 0:12:25.280 --> 0:12:28.320 really more than anything being prepared for short term bumps 0:12:28.360 --> 0:12:29.959 in the road. And so that's kind of what we're 0:12:29.960 --> 0:12:32.000 going to cover in this episode. Yeah, there can be 0:12:32.040 --> 0:12:34.560 two extremes when it comes to our outlook towards the 0:12:34.559 --> 0:12:36.800 coming years of our economy. Right, you can either be 0:12:37.040 --> 0:12:41.199 overly positive and optimistic due to near sightedness, thinking of 0:12:41.240 --> 0:12:44.680 that our current situation will continue on like it has forever, 0:12:45.080 --> 0:12:48.520 which is like human nature, which is human nature. Yeah, 0:12:48.760 --> 0:12:50.400 So you might think you'll continue to get those raises 0:12:50.440 --> 0:12:52.400 at work, you might get great returns to the stock market, 0:12:52.600 --> 0:12:54.240 might think that gas prices are going to continue to 0:12:54.240 --> 0:12:56.760 go down because that's what's happening right now. Or you 0:12:56.840 --> 0:12:59.600 might be overly negative in thinking that the market is 0:12:59.640 --> 0:13:01.520 going to crash. You know, just like you said, you 0:13:01.679 --> 0:13:03.880 like the naysayers. We think that it might just be 0:13:03.920 --> 0:13:06.680 too good to be true. And either way, we can't 0:13:06.679 --> 0:13:09.360 control our economy, we can't control the markets, but what 0:13:09.400 --> 0:13:13.000 we can control our our personal finances. This reminds me 0:13:13.040 --> 0:13:16.040 too of Stephen Covey. He's got that classic books, Seven 0:13:16.040 --> 0:13:18.439 Habits of Highly Effective People, and he talks about how 0:13:18.440 --> 0:13:20.800 you have your circle of concern. Right, there's a lot 0:13:20.840 --> 0:13:23.160 of things that impact you and that you are interested 0:13:23.160 --> 0:13:26.080 in and that concern you. However, within that circle of concern, 0:13:26.320 --> 0:13:29.400 there's a smaller circle, which is your circle of influence. 0:13:29.960 --> 0:13:32.160 And the idea is to focus on the things that 0:13:32.200 --> 0:13:34.439 you can control, focus on the things that you have 0:13:34.559 --> 0:13:37.920 influence over, and that's personal finance. Right. Like you can 0:13:38.000 --> 0:13:40.640 read all the news reports, you can follow the stocks 0:13:40.640 --> 0:13:43.520 and the charts all you want, but that's not going 0:13:43.559 --> 0:13:47.200 to change what the market actually does. What you can change, though, 0:13:47.440 --> 0:13:50.400 are your own personal finances. And before we get into 0:13:50.440 --> 0:13:52.760 the nuts and bolts of how you can prepare your 0:13:53.000 --> 0:13:56.160 personal and your families finances for a potential recession, I 0:13:56.200 --> 0:13:58.840 did want to just quickly address to like a mental 0:13:58.960 --> 0:14:01.320 mindset shift that needs to take place for a lot 0:14:01.360 --> 0:14:04.640 of people. If you're somebody that logs onto CNBC every 0:14:04.720 --> 0:14:08.320 day or has the news on and here's people crying 0:14:08.360 --> 0:14:11.920 about potential recession and predicting the all the potential bad 0:14:11.960 --> 0:14:14.000 things that could happen, that can be a recipe for 0:14:14.080 --> 0:14:16.320 you making moves that are not in the best interest 0:14:16.400 --> 0:14:19.800 of your long term financial future. So be careful about 0:14:19.840 --> 0:14:22.440 the news that you're consuming and the people that you're 0:14:22.440 --> 0:14:24.880 listening to, because if you adopt more of a long 0:14:25.000 --> 0:14:28.400 term strategy towards your personal finances, those day to day naysayers, 0:14:29.080 --> 0:14:31.080 it really they have a lot less impact on what 0:14:31.160 --> 0:14:34.120 you actually do with your money. And so after the break, 0:14:34.120 --> 0:14:36.320 we're gonna talk about some specific things that you can 0:14:36.360 --> 0:14:39.160 do to recession proof your finances. And again, these are 0:14:39.200 --> 0:14:42.400 things that you can do proactively versus reacting to the 0:14:42.400 --> 0:14:53.560 news and the market. So there are a lot of 0:14:53.600 --> 0:14:56.360 important things you need to consider when your recession proofing 0:14:56.400 --> 0:14:58.800 your finances, and the first one is to build a 0:14:58.920 --> 0:15:02.080 strong emergency on if you feel like a recession might 0:15:02.120 --> 0:15:04.920 impact you in a meaningful way, it's really important to 0:15:05.000 --> 0:15:08.440 squirrel away more cash. When the economy is roaring, an 0:15:08.440 --> 0:15:10.960 emergency fund is still meaningful, right, We've talked about that 0:15:11.000 --> 0:15:13.960 before the show, but it's even more meaningful when we're 0:15:13.960 --> 0:15:17.040 talking about a potential recession because in the event of 0:15:17.200 --> 0:15:20.800 job loss or decreased pay or fewer hours that you're 0:15:20.840 --> 0:15:24.320 able to work for your incurrent employer because of a recession, 0:15:24.440 --> 0:15:26.880 it's important to have kind of more money uh scrolled 0:15:26.880 --> 0:15:29.000 away in your bank account so that you can be prepared. 0:15:29.280 --> 0:15:30.760 So how much we're talking about here, we're talking about 0:15:30.760 --> 0:15:33.040 like a hundred bucks bucks that won't get you very far. 0:15:33.200 --> 0:15:36.560 Usually a typically the sort of initial emergency fund that 0:15:36.560 --> 0:15:38.320 you want to put together is like a thousand bucks, right, 0:15:38.360 --> 0:15:41.160 A thousand dollars will get you far, but ideally we're 0:15:41.160 --> 0:15:43.640 talking three to six months, maybe even a little bit 0:15:43.680 --> 0:15:45.360 more if you like to have a little more margin, 0:15:45.760 --> 0:15:47.360 a little more of a buffer and when it comes 0:15:47.360 --> 0:15:49.600 to your finances, but at least three to six months 0:15:49.640 --> 0:15:51.880 of expenses is what you want to have when it 0:15:51.920 --> 0:15:56.120 comes to setting aside money for a strong emergency fund. Yeah. 0:15:56.160 --> 0:15:58.320 For a lot of years, cash has been considered like 0:15:58.320 --> 0:16:01.560 a terrible investment, and rightly so, it's not an investment 0:16:01.560 --> 0:16:03.840 at all, right, right, and for rightly so, right for 0:16:03.880 --> 0:16:06.840 that reason, and because returns on cash have been really low, right, 0:16:06.880 --> 0:16:09.480 the low interest rates paid out on cash accounts. But 0:16:09.600 --> 0:16:11.960 in the current state of things, interest rates are rising 0:16:12.040 --> 0:16:14.400 on the savings accounts, and so it's not actually a 0:16:14.480 --> 0:16:16.520 terrible place to put your money right now. Um, So 0:16:16.600 --> 0:16:19.280 at the same time that it's not a terrible place 0:16:19.280 --> 0:16:21.640 to store your money, it's also more important to put 0:16:21.680 --> 0:16:24.520 your money there because of a potential recession and because 0:16:24.560 --> 0:16:25.760 of the impact that it could have on you and 0:16:25.760 --> 0:16:28.600 your family. And and we did an entire episode dedicated 0:16:28.640 --> 0:16:31.600 towards setting aside money for an emergency fund. And again, 0:16:31.640 --> 0:16:34.560 that might mean investing less and saving more in the 0:16:34.640 --> 0:16:36.840 short term, and that is okay, But but look that 0:16:36.880 --> 0:16:39.440 one up. That's episode number twenty one, where we talk 0:16:39.480 --> 0:16:42.040 about everything you need to know about an emergency fund. Yeah, 0:16:42.080 --> 0:16:45.560 and speaking of investing less, that it might make sense 0:16:45.600 --> 0:16:48.800 to potentially back off your ira A contributions or your 0:16:48.840 --> 0:16:51.440 four oh one K contributions through an employer. Let's say 0:16:51.440 --> 0:16:53.840 you're investing tend to twelve percent of your pay in 0:16:53.880 --> 0:16:56.720 a four oh one K, you're backing that automatic deduction 0:16:56.840 --> 0:16:59.240 off to like six or wherever it is, you know, 0:16:59.360 --> 0:17:01.760 just making sure you of course get the company match 0:17:01.840 --> 0:17:06.080 through your employer priority exactly, and then after that making 0:17:06.119 --> 0:17:08.280 sure that you're not investing any more than that until 0:17:08.280 --> 0:17:10.160 you feel like your emergency fund is where you want 0:17:10.160 --> 0:17:12.600 it to be. Excellent man. And the next you want 0:17:12.640 --> 0:17:15.640 to attack high interest rate debt and don't take out 0:17:15.640 --> 0:17:17.880 more debt. And so this makes sense from a number standpoint, 0:17:17.960 --> 0:17:19.840 right from a number is an interest rate standpoint, you 0:17:19.840 --> 0:17:21.679 want to attack the loans that you have to have 0:17:21.720 --> 0:17:24.520 the highest interest rate. If a recession hits, it's so 0:17:24.600 --> 0:17:26.879 important to tackle that high interest rate debt. That's the 0:17:26.920 --> 0:17:29.840 most important. Let's say you've got five thousand dollars in 0:17:29.960 --> 0:17:32.560 student loan debt at a three percent rate and ten 0:17:32.560 --> 0:17:35.240 thousand dollars of credit card debt at a nineteen percent 0:17:35.280 --> 0:17:39.000 interest rate. I think it makes right, which it could be. 0:17:39.200 --> 0:17:40.600 I think it makes a lot more sense for people 0:17:40.600 --> 0:17:43.600 to try to tackle that credit card debt, because a 0:17:43.640 --> 0:17:45.639 three percent interest rate isn't gonna kill you, but a 0:17:45.720 --> 0:17:49.680 nine interest rate is. Ultimately it's gonna crush you. Because 0:17:50.000 --> 0:17:52.200 it's really hard to gain an advantage. I would recommend 0:17:52.200 --> 0:17:55.240 putting every extra dollar that you have towards a really 0:17:55.280 --> 0:17:58.080 high interest rate debt like that before attacking anything with 0:17:58.160 --> 0:18:00.760 a super low interest rate. You definitely need to be 0:18:00.760 --> 0:18:03.800 smart about it. Yeah, and you also mentioned not taking 0:18:03.800 --> 0:18:05.720