Speaker 1: Welcome to How the Money. I'm Joel and I in
Speaker 1: Matt and today we're discussing essential habits for financial success. Alright, Joel,
Speaker 1: you know this is gonna be a great episode, in particular,
Speaker 1: a great episode to follow up our conversation that we
Speaker 1: had on on Monday with economist Katie Milkman. During that convo,
Speaker 1: she dived into the science behind why it is that
Speaker 1: there are certain decisions, certain changes that we're able to
Speaker 1: make that we stick with, and why there are other
Speaker 1: changes that we make and when the first bump in
Speaker 1: the road comes along, we just immediately fall off that wagon,
Speaker 1: throwing the towel exactly. But the fact is, when it
Speaker 1: comes to some of the larger financial goals that we
Speaker 1: have in our lives, there aren't a lot of folks
Speaker 1: that have like this grand tenure plan. They're like, I
Speaker 1: don't know, like I don't even know what I want
Speaker 1: to do by the end of this year, let alone
Speaker 1: at the end of ten years. But they do know
Speaker 1: that they need to make some healthy changes in their lives.
Speaker 1: When it comes to how it is that they handle
Speaker 1: their money. They don't know exactly where they want to go,
Speaker 1: but they know they need to start taking some positive steps,
Speaker 1: you know. And this is exactly where this episode comes in.
Speaker 1: This is this episode is especially for the folks who
Speaker 1: are saying, like, just tell me what to do, Like
Speaker 1: I don't exactly know what it is I'm pursuing, like
Speaker 1: the big things are gonna bring about happiness in my life,
Speaker 1: but I do know I need to be smarter with
Speaker 1: my money. Tell me what I need to do. I
Speaker 1: think this episode is definitely going to connect with those folks,
Speaker 1: but just for for everyone out there who is looking
Speaker 1: to get better with their money as well. They might
Speaker 1: not have like a big, hairy, audacious goal of achieving
Speaker 1: fire by the time their thirty three or something like that,
Speaker 1: but it doesn't mean that they don't want to make
Speaker 1: progress and leave themselves more options. And so yeah, we
Speaker 1: think these these habits, implementing some some of the habits
Speaker 1: that we're gonna talk about today are going to help
Speaker 1: put you on the right path, even if you don't
Speaker 1: know where that path is going to lead exactly. But
Speaker 1: before before you get to that, man, I wanted to
Speaker 1: mention something in one of our listeners told us about
Speaker 1: the other day via email. Thanks thanks to listener Nate,
Speaker 1: by the way a listener who has some inside knowledge
Speaker 1: when it comes to how the insurance industry works. Yeah,
Speaker 1: and so he is an independent insurance agent himself. And
Speaker 1: and you and I always talked about how great independent
Speaker 1: insurance agents can be for individual consumers because they're not
Speaker 1: beholding to a specific company. And so instead of saying, like, yeah,
Speaker 1: let me quote you prices from Progressive only or All
Speaker 1: States only or whatever it might be, they say, no,
Speaker 1: I'm gonna I have the ability to shop with eight
Speaker 1: or nine companies on your behalf, and I'll tell you
Speaker 1: what the best prices are, which I think is super valuable,
Speaker 1: including a bunch of companies you've never heard of. Because
Speaker 1: they don't put any money towards marketing, right, they're also
Speaker 1: able to offer sometimes the best rates. Yeah, they don't
Speaker 1: have a cute green get go or something like that, like,
Speaker 1: which means they can offer you better rate sometimes because
Speaker 1: they're not spending so much on marketing exactly. And the
Speaker 1: website that Nate mentioned, I've not heard of this website before.
Speaker 1: We've talked about finding an independent local insurance agent, but
Speaker 1: he mentioned the site trusted choice dot com, which is
Speaker 1: a great site for finding a local agent. Where you are.
Speaker 1: So if you're like, hey, one of my goals this
Speaker 1: year is to save money on insurance. I know, like
Speaker 1: my insurance cost just went up big time. How am
Speaker 1: I going to be able to lower that cost in
Speaker 1: a meaningful way? Well, one of the easiest ways to
Speaker 1: do that is to find a local independent agents and so, yeah,
Speaker 1: we will link to that site in the show notes
Speaker 1: for this episode. But finding a local agent having them
Speaker 1: shop on your behalf is one of the easy things
Speaker 1: that you can do to potentially save hundreds or maybe
Speaker 1: even a thousand dollars or more in the coming year
Speaker 1: on on insurance costs, definitely without giving up a ton
Speaker 1: in coverage in order to do so. About exactly that,
Speaker 1: that's where we don't want you to cut corners in
Speaker 1: order to save There are other ways and one of
Speaker 1: the reasons he pointed out to local agents oftentimes they
Speaker 1: know the specific nuances and the laws associated with the
Speaker 1: state where you live, and so they oftentimes can provide
Speaker 1: better coverage because they know exactly what it is that
Speaker 1: you are going to be required to have, but then
Speaker 1: also what you don't necessarily need to have, and uh,
Speaker 1: they'll probably ask more about your specific situation sometimes, and
Speaker 1: I think that's helpful totally. All right, let's introduce the
Speaker 1: beer that you and I are going to enjoy during
Speaker 1: this episode. Uh, this is a liquid Hop Magma. This
Speaker 1: is our last beer donated to the show by Mutation Brewing.
Speaker 1: A big thanks to Jack and all of our friends
Speaker 1: over there at the brewery. But I'm looking forward to
Speaker 1: enjoying this one and we will share what we think
Speaker 1: about it at the end of the episode. For sure,
Speaker 1: we're like happy beers. We'll keep our thoughts on this
Speaker 1: one in just a bit. But Matt, but let's get
Speaker 1: onto the subject at hand. Let's talk about the essential
Speaker 1: habits for financial success. And it just makes me think
Speaker 1: of high school for some reason that like, remember we
Speaker 1: were always told back to school essentials, right, remember, well
Speaker 1: kids are going back to school for the second semester
Speaker 1: in just a couple of days. But like, uh, in
Speaker 1: high school, we were always told that we needed to
Speaker 1: get good grades. But it always thought a little arbitrary
Speaker 1: to me, like nobody was connecting the dots and so
Speaker 1: I was. I personally was more than happy to trade
Speaker 1: like hours of studying for a solid be instead of
Speaker 1: like busting my butt to getting it always felt like
Speaker 1: the gap in effort needed between getting a B in
Speaker 1: an A was significant, so I was just always content
Speaker 1: to get a slightly lower grade, but it was still
Speaker 1: solid right, And I think I choked it up to
Speaker 1: the fact that I had no desire to attend a
Speaker 1: prestigious school like the IVY leagues were out of the
Speaker 1: question for me. No, no Yale for Joel Little Little
Speaker 1: High School JOLS. No. I wasn't thinking about Yale or
Speaker 1: Harvard or Standford or any of that stuff. But it
Speaker 1: turns out, though, I think there were good reasons that
Speaker 1: my parents were pushing me to try harder, even though
Speaker 1: I wasn't planning on going to Colgate or one of
Speaker 1: those nice schools. Right, and better grades meant a wider
Speaker 1: range of options and the potential for more financial aid
Speaker 1: to no matter what school I went to. It makes
Speaker 1: me think recently, I was talking to my wife Emily
Speaker 1: one of her cousins, and he talked told me about
Speaker 1: getting a thirty two on his A. C T took
Speaker 1: it three times and he just couldn't get past that
Speaker 1: that mark. But if he'd gotten a thirty three, he
Speaker 1: would have gotten all his housing paid for at the
Speaker 1: school he went to. So it's just like one point
Speaker 1: man costs him a lot of money. But he said, man,
Speaker 1: I just I couldn't stomach taking that test again at
Speaker 1: that point in time. And I don't think he realized
Speaker 1: at the time, when he was eighteen how much it
Speaker 1: was gonna cost him. And so both his parents and
Speaker 1: my parents, I think, could see past our lethargy, my
Speaker 1: you know, lack of focus and dedication and his lack
Speaker 1: of wanting to take that test again, and they knew
Speaker 1: that that trying just a bit harder would have long
Speaker 1: term positive financial consequences for both of us, not to
Speaker 1: mention a stronger work ethic right that would provide dividends
Speaker 1: for years to come. So your parents wanted to see
Speaker 1: your full potential, Joe. They knew that you were capable
Speaker 1: of so much more. But but but what you're saying, though,
Speaker 1: is like, I mean, you're not just going to focus
Speaker 1: on getting good grades because you know that you have
Speaker 1: to achieve a certain g p A to get into
Speaker 1: a specific school, Like that is not the only reason
Speaker 1: that you're doing it. And you know, when it comes
Speaker 1: to like the big financial goals that we have in life,
Speaker 1: it can be overwhelming, you know, like when you hear
Speaker 1: Life Grows out there saying that like, you've got to
Speaker 1: start with the end in mind. And I'm pretty sure
Speaker 1: that that's something we've even said before, even though we
Speaker 1: don't at all consider ourselves gurus. And the reason though
Speaker 1: that that can be overwhelming, I think is because sometimes
Speaker 1: you just have no idea what end it is that
Speaker 1: you're actually pursuing. And plus, you know, we think this
Speaker 1: is also a great way to tackle the new year,
Speaker 1: because you know, you may not even know what you
Speaker 1: want to accomplish by the end of three let alone
Speaker 1: by the end of the decade. You might not have
Speaker 1: a specific crystallized goal yet. And that's okay, But it's
Speaker 1: about moving in the right direction. It's about getting that
Speaker 1: momentum started, getting that ball rolling, even if the end
Speaker 1: goal is subject to change. And so just like with you, Joel,
Speaker 1: so you didn't know exactly where it was that you
Speaker 1: wanted to go to college, but by having a good
Speaker 1: g p A, by giving it your best shot on
Speaker 1: the on the s a T. That was going to
Speaker 1: open up the potential for you to go to some
Speaker 1: different schools that you might have changed your mind to
Speaker 1: down the road and developing the right financial habits. We
Speaker 1: think that that will similarly help folks to start moving
Speaker 1: in the right direction, even if you don't know what
Speaker 1: your ultimate destination is going to be. Yeah, And the
Speaker 1: truth is that most of us have goals that are
Speaker 1: subject to change right now. None of our goals are
Speaker 1: are very few of our goals are set in stone.
Speaker 1: This is and we know them on like a multi
Speaker 1: decade long timeline, and life throws us curveballs and we
Speaker 1: have to adapt. That doesn't necessarily mean that you've failed, right.
Speaker 1: It's often that as you grow up and evolve as
Speaker 1: a person that what you want out of life changes,
Speaker 1: which is totally fine and totally understandable, and it's actually
Speaker 1: a good thing. What it feels like we live a
Speaker 1: new life, something like every seven years, we're turning over
Speaker 1: a new leaf. Matt. There are certain things that people
Speaker 1: might have told me three years ago, but pre pandemic,
Speaker 1: and they would have said, Hey, you're gonna end up
Speaker 1: doing this, this and this, making these choices. You're even
Speaker 1: gonna move from the neighborhood that you can love so
Speaker 1: much right now, and you're gonna end up in a
Speaker 1: new place and I would have been like, you're crazy,
Speaker 1: like there's no way out of your mind. But life
Speaker 1: here we are throws us her balls. We have to
Speaker 1: react accordingly. And you and I we moved our families
Speaker 1: right last year, but we want you to have the
Speaker 1: financial ability to be able to make those changes without
Speaker 1: freaking out. And the earlier you adopt the financial habits
Speaker 1: that we're gonna cover in today's episode, the quicker, you're
Speaker 1: gonna be on your way to increase levels of margin
Speaker 1: and financial flexibility, which directly equates to the likelihood that
Speaker 1: money isn't going to be the thing holding you back
Speaker 1: from the lifestyle you want to lead and the changes
Speaker 1: you want to make. Man, it would have been so
Speaker 1: much more stressful if we felt like we wanted to
Speaker 1: move our families somewhere else, but we didn't have the
Speaker 1: financial backstop to make that decision exactly. And so that's
Speaker 1: what we want for people. Like, as goals start to crystallize,
Speaker 1: you're like, Hey, the habits I've been implementing are you know,
Speaker 1: have gotten me to the place where I can now
Speaker 1: achieve that without having to to fret, without having to
Speaker 1: like freak out that you don't have the financial wherewithal
Speaker 1: to to make those decisions you want to make. That's right, man, Yeah,
Speaker 1: I can agree. More so let's get into it. Where
Speaker 1: do you start? And we would argue that gathering the
Speaker 1: facts that that is step number one. Uh, and that
Speaker 1: means tracking your spending. We think that this is the
Speaker 1: number one habit that folks who handle their money do
Speaker 1: without fail. Last month, actually we talked about how people
Speaker 1: underestimate what it is that they spend on their monthly subscriptions,
Speaker 1: and not just by like a little bit of money,
Speaker 1: like almost always it was by at least a hundred bucks.
Speaker 1: And so the reason I bring that up is we is,
Speaker 1: if you don't know where your money is going, it
Speaker 1: becomes really easy to let those precious dollars slip through
Speaker 1: the cracks, and that makes it harder to actually reach
Speaker 1: whatever goals it is that you are either currently pursuing
Speaker 1: or that you might end up pursuing at some point.
Speaker 1: Every dollar counts when we're looking to make changes, uh.
Speaker 1: And if you don't track where those dollars are going,
Speaker 1: it's like you're on a ship with a perpetual leak.
Speaker 1: You gotta fix that leak in order to get where
Speaker 1: you're trend to go. It makes me think of that.
Speaker 1: So the conversation we had with Katie on Monday, one
Speaker 1: of the things she wrote about in the book, she
Speaker 1: one of the similarities between Benjamin Franklin and Jerry Seinfeld
Speaker 1: was that they were incredibly disciplined in tracking their progress.
Speaker 1: There were changes that they both I would say probably
Speaker 1: very different changes that they both wanted to implement in
Speaker 1: their lives. Uh, and they were both able to basically
Speaker 1: chart their progress and that allowed them to achieve the
Speaker 1: results much faster. And specific to Jerry Seinfeld, one of
Speaker 1: the things she said that he would often do um
Speaker 1: is that he would maintain these streaks, and so I
Speaker 1: think maybe it was something like every night he was
Speaker 1: trying to do and like an open mic nights somewhere
Speaker 1: in order to just hone his craft. And once he
Speaker 1: got that going, he didn't want to stop, specifically because
Speaker 1: he didn't want to break break the streak that he
Speaker 1: had going to like in a sense, he was almost
Speaker 1: kind of gamifying it. And when I read that, I
Speaker 1: realized that's one of the reasons why I track my
Speaker 1: spending every single penny, every single month, and I've done
Speaker 1: that since two thousand and seven. Like literally, for I'm on,
Speaker 1: I'm on like a fifteen year streak where every single
Speaker 1: month that that is something I've been able to maintain.
Speaker 1: There's no way I'm gonna break that streak. I'm not
Speaker 1: gonna let a busy month allow me to not do
Speaker 1: this thing that I've done for so long that has
Speaker 1: allowed me to achieve the financial progress and the financial
Speaker 1: success that I have. And you're living up now to
Speaker 1: the moniker that everyone has for you, which is the
Speaker 1: Jerry Seinfelder personal finance if only No, I think you're right.
Speaker 1: I mean, I think those things, those things matter, right,
Speaker 1: And the longer we do something, the more habitual it becomes.
Speaker 1: But something as simple as tracking your money is crucial,
Speaker 1: Like it's it's like the first building block really personal
Speaker 1: finding so many ways, and if you're not doing that
Speaker 1: basic thing, the likelihood of you being able to achieve
Speaker 1: bigger goals that you've set out for yourself becomes a
Speaker 1: lot more unlikely if you're not willing to do the
Speaker 1: small stuff. Exactly. Yeah, I think I mean that's worth
Speaker 1: sharing too, because I think they're gonna are saying, oh great,
Speaker 1: how the money, guys, They're they're talking about tracking or spending,
Speaker 1: but like, this is something that folks who have accomplished
Speaker 1: a lot in their lifetimes. This is what they do.
Speaker 1: This is where you start. Yeah, and it sounds basic,
Speaker 1: but the realities most people don't do it, and so
Speaker 1: they don't know where the leaks are. They don't know
Speaker 1: how to go about plugging them. And the truth is
Speaker 1: there are lots of ways to track. Right. You can
Speaker 1: go old school spreadsheet like you do, Matt, and we
Speaker 1: can link to your budget spreadsheet that people can copy
Speaker 1: and use however they like. In the show notes for
Speaker 1: this episode, if you're like, hey, I do like I
Speaker 1: do like the Matt's grandpa approach to budgeting and tracking.
Speaker 1: That's cool. Feel free you go use it. Or you
Speaker 1: can use a software like Mint or wineap. If you're like,
Speaker 1: I'm hip, I'm with it, then go for that, like
Speaker 1: sign up for one of those sites Mints free, wineap
Speaker 1: costs money, But whatever system works best for you is
Speaker 1: all good with us. But if you opt to avoid
Speaker 1: tracking your spending, your progress, it's just it's gonna be stunted.
Speaker 1: Just like if Jerry Sinnel wasn't if he wasn't tracking
Speaker 1: those open mic nights, and he's like, I think I've
Speaker 1: done it like the last thirteen days, but I'm not
Speaker 1: a shure. There's something about, yeah, documenting it that helps
Speaker 1: keep that progress alive. And then the next step after
Speaker 1: tracking is budgeting. It was once you know you know
Speaker 1: where those funds are going, it's so much easier to
Speaker 1: then tweak your spending to better align with your values,
Speaker 1: and you start asking questions like do my current expenses
Speaker 1: makes sense for what I care about? How do I
Speaker 1: feel about the money that I'm spending? Do I feel
Speaker 1: good about it? And if not, it's time to readirect
Speaker 1: where those dollars are going? And again like they're you know,
Speaker 1: excellent software packages to help you out with this, but
Speaker 1: you don't need software to help you do this either,
Speaker 1: like pen and paper write. It can be as simple
Speaker 1: as that. But yeah, tracking and budgeting are like two
Speaker 1: unavoidable p's in a pod if you're doing those things consistently.
Speaker 1: We actually we have a new article up on our
Speaker 1: website at how money dot com. There's like different budgeting
Speaker 1: methods I think that work better for different personality types,
Speaker 1: and so will link to that so you can hopefully
Speaker 1: find a budgeting method that works for you how you
Speaker 1: think about money, and then kind of like how you
Speaker 1: personally handle it. It's not necessarily it doesn't have to
Speaker 1: be a one size fits all approach. That's right, And
Speaker 1: I will say I'll give a slight caveat because I
Speaker 1: said that this is something that everybody who's successful with
Speaker 1: their money, this is something that they do. And while
Speaker 1: I think it would be helpful for the majority of folks,
Speaker 1: I will say, there are folks out there who don't
Speaker 1: budget as much. I mean, I think you would even
Speaker 1: kind of fall into that camp. But that's actually the
Speaker 1: fourth budgeting style in that article I referencing is is
Speaker 1: people who don't budget. But like my favorite budgeting style
Speaker 1: is to not budget. But what I wanted to say though,
Speaker 1: is you, I think initially it is incredibly helpful. Yes,
Speaker 1: like maybe in the day to day, like the month
Speaker 1: a month, you're not you know, you're not doing like
Speaker 1: a zero some budget where you're tracking every single penny,
Speaker 1: which is one of the other ones in there. But
Speaker 1: I think initially, at least at the very beginning, like
Speaker 1: you gotta face the facts, you know, like you got
Speaker 1: to face the music and be shocked with the reality
Speaker 1: of your spending because you might think that you've got
Speaker 1: a certain level of spending, you know, going on in
Speaker 1: your life, but guess what. Lifestyle inflation happens in conjunction
Speaker 1: with actual inflation, which is caused a lot of are
Speaker 1: are spending to increase. And so I think it's so
Speaker 1: important to truly face the facts, and at the very
Speaker 1: least doing that once at the beginning can help you
Speaker 1: to get sort of like, uh, I don't like, almost
Speaker 1: like a tune up, Like when you go into and
Speaker 1: you take your car in, if you take it to
Speaker 1: somebody who knows what they're doing, they're hopefully able to
Speaker 1: give you a good diagnosis. Uh. And I think that
Speaker 1: that I can tell you what you can do, what's
Speaker 1: coming up with your carly Hey in maybe like a
Speaker 1: few thousand miles, those front brakes might need to be
Speaker 1: looked at again. And I don't know, maybe you're gonna
Speaker 1: need that ninety mile check up where we do this,
Speaker 1: this and this, prepare for it. Yeah, exactly, start thinking ahead,
Speaker 1: which is great, And I think that's what kind of
Speaker 1: tracking and budgeting can do for Yousolutely. It's also true
Speaker 1: that somebody like Jerry Seinfeld doesn't need to do an
Speaker 1: open mic night every single night at this point because
Speaker 1: of all the work he's put in throughout the years.
Speaker 1: So exactly, if you're that far along, you don't need
Speaker 1: to necessarily feel guilted into continuing a system that helps
Speaker 1: set you up for success, and it might continue to
Speaker 1: help you be success. But he also might not need
Speaker 1: it in the same way that somebody's just starting. Yeah,
Speaker 1: I mean it's trade offs because like simultaneously, like even
Speaker 1: the best coaches out there and the best players, they're
Speaker 1: watching tape, you know, like they are reviewing and looking
Speaker 1: back over their performances and like, and so I think
Speaker 1: even Jamaican a sports reference. But yeah, I don't want
Speaker 1: to do that off. But I get I think even
Speaker 1: the folks who are crushing their financial goals would see
Speaker 1: an increased level of performance were they to track and budget.
Speaker 1: It's just it just kind of comes down to whether
Speaker 1: or not that that is enough of a priority for
Speaker 1: them to want to do that. I remember seeing a
Speaker 1: Kobe Bryant interview where he talked about just out working
Speaker 1: everybody else, and he's like, they's say, the average athlete
Speaker 1: works out, has two good workouts in a day. Well,
Speaker 1: what if I wake up earlier in the morning, and
Speaker 1: I'm getting somewhere between three and four workouts in every
Speaker 1: single day. He's like, it doesn't matter if they were
Speaker 1: their butt off over the summer, because for the last
Speaker 1: five years, I've been doing an additional workout or two
Speaker 1: more than they have for years now, which in compounds. Yeah,
Speaker 1: and it's like those the kind of things, those actions
Speaker 1: really matter, right, That's a that's a habit that he
Speaker 1: got into that paid massive dividends, making him one of
Speaker 1: the best basketball players of all time. But you gotta
Speaker 1: you gotta let your body rest, though, too, write like,
Speaker 1: aren't you faced with like the reality of science? Yeah,
Speaker 1: I think that now that I've been working out. I mean,
Speaker 1: the guys that's a guy to work for Kobe, I'm
Speaker 1: gonna trust it. But there's there's certain guys that like
Speaker 1: work out every single day. I'm just like, how are
Speaker 1: you not sore the next day? Like when I work out,
Speaker 1: I can't I feel like I can't do Jack squad
Speaker 1: the next day. But we definitely don't need to turn
Speaker 1: this into physical fitness sports metaphor of an episode. We're
Speaker 1: going to continue to talk about the essential habits for
Speaker 1: financial success. And we have a handful more of different
Speaker 1: habits that we are going to cover right after this.
Speaker 1: All right, Matt, let's keep going. Of course, you and
Speaker 1: I we want everybody listening to this. We want them
Speaker 1: to be financially successful. We want them And that doesn't
Speaker 1: mean and you and I've talked to talk about this
Speaker 1: all the time. That doesn't mean having like Bill Gates
Speaker 1: levels of wealth. That doesn't mean being on the four
Speaker 1: List or something like that, like that is uber insanely
Speaker 1: rich and wealthy. That we don't care about that. But
Speaker 1: we do want people to have more choice in our lives.
Speaker 1: We do want people to have more money in their
Speaker 1: bank account to allow them to have more choice over
Speaker 1: over the years, more autonomy over their lives and the
Speaker 1: decisions that they're able to make in the future. And
Speaker 1: so that often means having better habits, making better choices,
Speaker 1: even if the end goal isn't and for most of
Speaker 1: us probably isn't going to be to be, you know,
Speaker 1: to become one of the uber wealthy elites. But another
Speaker 1: habit that's successful financial nerds partake in is to regularly
Speaker 1: assess and cut their spending. And so this kind of
Speaker 1: aligns with tracking your spending. But it's a little different
Speaker 1: because this is like when you're actually not just seeing
Speaker 1: the holes in the boat, but you start plugging the
Speaker 1: leaks and you make it a habit. We would say
Speaker 1: to institute a waiting period before buying something, something like
Speaker 1: a forty eight hour rule where you're shopping and you
Speaker 1: see something and you're like, oh, I need that. Well,
Speaker 1: if you have a forty eight hour rule, you don't
Speaker 1: buy it, and maybe you forget about it, or maybe
Speaker 1: you come back to it knowing, hey, that's actually something
Speaker 1: I really want to buy. Or if you're shopping around
Speaker 1: for items that you're definitely going to purchase, you know
Speaker 1: you want that thing, you've been like thinking about it
Speaker 1: for a while, Compare prices before you actually take the
Speaker 1: plunge and buy that item and add it into your
Speaker 1: life as well. Also, you know, work to spend less
Speaker 1: on recurring expenses. These are all habits that you're going
Speaker 1: to want to develop in order to grow the gap
Speaker 1: in your life between incoming and outgoing. So we would
Speaker 1: say start with those big expenses, right like housing. What
Speaker 1: are some ways that you can keep this one to
Speaker 1: a minimum. Do you really need a big, fancy apartment
Speaker 1: for all the stuff you're tired of keeping up with.
Speaker 1: Or let's say you own a house, maybe it's time
Speaker 1: to start house hacking. Can you, uh, can you rent
Speaker 1: out a room in your house to turn that expense
Speaker 1: into less of an expense or maybe maybe even into
Speaker 1: a little bit of profit. How can you trim um
Speaker 1: what you're spending on transportation? Can you get rid of
Speaker 1: a car from your life? Matt? How are big advocates
Speaker 1: for this? If there's a lot more people who could
Speaker 1: afford to ditch your car then think they can. In
Speaker 1: the average price of owning one single car for a
Speaker 1: a year or something like ten thousand dollars, that's insane.
Speaker 1: That's a lot of money. Can you cut that back
Speaker 1: in your life? Also, like shop insurance rates, we talked
Speaker 1: about that at the beginning of that episode. They're all
Speaker 1: of these little leaks that are in our lives, these
Speaker 1: ways that we can address them. But the habit that's
Speaker 1: important to develop is to regularly assess and cut. Assessing
Speaker 1: and cutting spending is going to go a long way
Speaker 1: when it comes to moving the needle creating more margin,
Speaker 1: more financial margin in your life. Yeah, but don't forget
Speaker 1: about the all those little leaks as well, you know,
Speaker 1: because like the successful money habits, like like saving in
Speaker 1: small ways, that is also going to propel you down
Speaker 1: the path of financial success as well. I'm starting to
Speaker 1: sound like Ben Franklin. A penny saved as a penny earned,
Speaker 1: you know, I feel like, uh me have been Franklin,
Speaker 1: would we would have gotten alone. But like, you know,
Speaker 1: just like the small tweaks that were able to make right, Like,
Speaker 1: as we adopt, say a more positive view of frugality,
Speaker 1: I think that's the cherry on top as we're working
Speaker 1: to optimize our money. Uh, and these are moves that
Speaker 1: most any anyone out there can do. We're talking about
Speaker 1: things like biking more often as opposed to getting in
Speaker 1: the car, Like that's one of the ways that you
Speaker 1: are able to downsize the second largest line item on
Speaker 1: the Americans monthly budget. But then something as simple as saving, storing,
Speaker 1: and actually eating your leftovers. I'm I'm like the King
Speaker 1: of leftovers, man, don't just scrape it into the garbage can.
Speaker 1: Like literally today my leftovers I had, um, there's just
Speaker 1: like too much brown rice in there. And so I
Speaker 1: like the pork and the mushrooms and the spinach, but
Speaker 1: I scraped the rice back into the container. That's like
Speaker 1: that back in the fridge because now I've got leftovers
Speaker 1: of leftovers and later this week I'll be able to
Speaker 1: bring some vegetables, some protein, uh and complete that meal.
Speaker 1: But you know, even something as basic as we're using
Speaker 1: as the black bags, financially successful folks realize the value
Speaker 1: of a dollar and like they're just always doing just
Speaker 1: the little things that add up. And you kind of
Speaker 1: you touch on this a little bit, but like finding
Speaker 1: ways to keep those smaller recurring expenses minimal as important
Speaker 1: as well, because you're not looking to bring in new
Speaker 1: expenses into your life just on a whim, right, because
Speaker 1: those that's that's how those small expenses really add up
Speaker 1: when you multiply times twelve and you get you kind
Speaker 1: of get used to the action of doing those little
Speaker 1: things and not thinking a thing of it, and they grow.
Speaker 1: Like it's not just the one ten dollar subscription, but
Speaker 1: it's the fact that, like you're the kind of person
Speaker 1: however many years that you did that, that you maintain
Speaker 1: that subscription. But then just what you're talking about, Yeah,
Speaker 1: the frame of mind that you enter into as a consumer,
Speaker 1: and it's like, now, cool, Yeah, that's not if ten
Speaker 1: dollars isn't a big deal, the next time the twenty
Speaker 1: dollar decision isn't a big deal, and then we need
Speaker 1: to make them big deals in our lives, right, yeah, Keeping,
Speaker 1: we want you to basically keep this recurring payments as
Speaker 1: low as possible because that's going to open up the
Speaker 1: widest range of financial possibilities for you in the future,
Speaker 1: and that's what we want for you. And plus, you know,
Speaker 1: keeps your stress levels lower, which is massively underrated. We're
Speaker 1: not even gonna talk about stress and mental health. We're
Speaker 1: just talking about like the nuts and bolts today, but
Speaker 1: keep that in mind as well. Yeah, it's like these
Speaker 1: habits do have a ramification on your mental acuity right
Speaker 1: on the bandwidth that you have to tackle other more
Speaker 1: important things in life. That's not the focus of this episode,
Speaker 1: but it's h Yeah, it literally loads your key points
Speaker 1: having a lot of debt on hand. Right, there's like
Speaker 1: studies the show that it's something like a twelve to
Speaker 1: fourteen point i Q drop and we want you to
Speaker 1: avoid that because we want you to be smart and happy.
Speaker 1: But another habit that you're gonna want to adopt is
Speaker 1: to avoid high inter straight debt like the plague. And
Speaker 1: so yeah, when you when you take on debt, what
Speaker 1: you're doing is you're giving your future self fewer options.
Speaker 1: And so you want to be darn sure that the
Speaker 1: debt you're taking on is fueling the future you want,
Speaker 1: not preventing future possibilities. And the problem is most debt sucks, right.
Speaker 1: Personal loans, revolving credit card debt, car loans like these
Speaker 1: are the kind of things that allow you to consume
Speaker 1: more now, leaving future you though on the hook for
Speaker 1: those payments potentially seven, eight, nine years in the future.
Speaker 1: When you're talking about something like all those kinds of debt,
Speaker 1: but spec like, say car loans, there's a lot of
Speaker 1: people taking out eight nine year car loans now, Matt,
Speaker 1: and so like, yeah, by the time you're done with
Speaker 1: that car, hate it, you're halfway through the car payments
Speaker 1: and not sending you up for the opposite of financial success.
Speaker 1: And so yeah, savvy financial folks they make it a
Speaker 1: habit to avoid all the above debts. They don't want
Speaker 1: to mess with any of them, and they don't want
Speaker 1: to play with fire because they don't want to get burned.
Speaker 1: So we also stress on this show that not all
Speaker 1: debt is bad. It's possible to use debt wisely to
Speaker 1: give yourself more options in the future. For talking about
Speaker 1: like a smart mortgage or a reasonable amount of student
Speaker 1: loans to get a degree that's going to improve your
Speaker 1: earning potential. Those things, you know, those aren't bad versions
Speaker 1: of debt. But avoiding the worst debts and keeping even
Speaker 1: the potentially helpful debt in check is a wise habit
Speaker 1: to get into. Honestly, another reason too that it's good
Speaker 1: to avoid debt. And we we've talked about this towards
Speaker 1: the end of last year when we were talking about
Speaker 1: pursuing happiness in all the wrong ways. We're just poor
Speaker 1: predictors of what it is that is going to make
Speaker 1: us happy. We think that this is going to be
Speaker 1: something that's gonna make us happy, it's gonna make us fulfilled.
Speaker 1: And when those items oftentimes uh that we have to
Speaker 1: purchase when we finance them, we are stick in our
Speaker 1: future selves. Like you said, Joel, with those payments, we
Speaker 1: are like, I don't trust myself today to make something
Speaker 1: like the right decision on when it comes to taking
Speaker 1: on debt oftentimes, so still be something that I think
Speaker 1: is going to be worth it down the road. It's
Speaker 1: it's I mean, that's why student loans and mortgages are
Speaker 1: typically the only things that we like to see financed.
Speaker 1: If there's one thing I feel like I've learned about
Speaker 1: myself over the years is that I changed my mind
Speaker 1: sometimes and again there's it's I've had this one path
Speaker 1: in my mind and I think, oh, this is gonna
Speaker 1: make me happier. Oh, this is gonna make life easier.
Speaker 1: But then as time progresses, as I'm mature, as different
Speaker 1: events present themselves and the facts on the ground change, well,
Speaker 1: oftentimes that warrants changed the game plan as well. And
Speaker 1: anytime you are looking to take on any serious amount
Speaker 1: of debt, we think you should probably think long and
Speaker 1: hard about bringing that debt into your life. Yeah. I
Speaker 1: think that the habit of reflexively avoiding debt is a
Speaker 1: good one to get into. It's not that, like we said, occasionally,
Speaker 1: some kinds of debts and small amounts aren't you know,
Speaker 1: they're they're not rible for you. But kind of not
Speaker 1: buying into the popular American notion that taking on debt
Speaker 1: isn't that big of a deal is a good thing. Yeah,
Speaker 1: we're saying no is probably like a good knee jerk
Speaker 1: reaction when it comes to take taking on debt. So
Speaker 1: I feel like that we've kind of covered them, like
Speaker 1: the frugal portion of our episode where we're just talking
Speaker 1: about cutting expenses and saying no to yourself and uh,
Speaker 1: but that being said, we're not opposed to splurging occasionally, right,
Speaker 1: finding your craft beer equivalent in finding ways to amplify
Speaker 1: the joy that you receive from certain expenses in your life.
Speaker 1: Let's move on from expenses and shift our focus to investing,
Speaker 1: because another habit that financially successful folks emblement in their
Speaker 1: lives is to invest with regularity, right, Like, they don't
Speaker 1: care much about what the market is doing with what
Speaker 1: it did yesterday, what is doing today, but they want
Speaker 1: to take advantage of the market's wealth generating capabilities over time.
Speaker 1: And so with that mind, they suck money away with
Speaker 1: each and every paycheck into an employer sponsored retirement plan
Speaker 1: like a four one K, or by contributing without fail
Speaker 1: to their own retirement account, their individual retirement account, their IRA,
Speaker 1: and doing that regularly means that they're often opting for
Speaker 1: the dollar cost averaging approach, which you know, ensures that
Speaker 1: you're doing the right thing on repeat, no matter what
Speaker 1: the current micro trends are going on in the financial world.
Speaker 1: And so when it comes to the specific types of
Speaker 1: investments that we once you invested, we're not talking about
Speaker 1: single stock investing, we're not talking about crypto. We want
Speaker 1: to make sure that you're invested in widely diversified, low cost,
Speaker 1: if not free, index funds that represent the entire market,
Speaker 1: or or something like the SMP five funder, which is
Speaker 1: where like percent of my all of my investing dollars
Speaker 1: are in are in different indexes that track the SMP. Yeah,
Speaker 1: and I think it's important to make investing a regular habit,
Speaker 1: and that is what is going to lead to financial
Speaker 1: success down the road. As those dollars compound on top
Speaker 1: of each other, that's what's gonna help you build wealth.
Speaker 1: Just like it's the small lends constantly overtime, Well, it's
Speaker 1: gonna do a whole lot more. Not that having money
Speaker 1: to say, news account isn't important, but it's gonna do
Speaker 1: a whole lot more because your money is going to
Speaker 1: grow into much more, much quicker pace being invested in
Speaker 1: the economy as a whole as opposed to just sitting
Speaker 1: there in static saving stuff. Right, Yeah, we want we
Speaker 1: want to move you beyond being a saver and instead
Speaker 1: of taking those dollars and actually investing. Yeah yeah, but
Speaker 1: automating your investments is is one of the most surefire
Speaker 1: ways to actually be able to achieve that success. And
Speaker 1: and so I like this. We are going back, going
Speaker 1: back to referencing our episode with Katie on Monday. But
Speaker 1: it means you're able to take action one time and
Speaker 1: then you don't really have to think about it again
Speaker 1: or revisit that choice really like you set it and
Speaker 1: forget it. And so automation helps us do the right
Speaker 1: thing without having to continue to decide to do that thing,
Speaker 1: which I think is really important. It makes us less
Speaker 1: reliant on our own discipline. It sets us up for
Speaker 1: success when we'd otherwise be much more likely to become
Speaker 1: our own worst enemy. Automation is just crucial on the
Speaker 1: investing front, so that you don't have to Like, habits
Speaker 1: are great, but uh, a habit that you can set
Speaker 1: and forget so that you don't have to tenually have
Speaker 1: the willpower to push yourself in the right direction is
Speaker 1: massively important to exactly, and that's where setting that percentage
Speaker 1: of your paycheck that comes out every two weeks that too,
Speaker 1: to go into investments is definitely the easiest way to
Speaker 1: go about it. But then for all the folks who
Speaker 1: don't have a work sponsored retirement account, I think one
Speaker 1: of the best nuggets of advice that Katie was able
Speaker 1: to give us on Monday, based on research is to
Speaker 1: make it fun and that jold this is like one
Speaker 1: of the things I think this was your big takeaway
Speaker 1: from that episode. But find a way to to transform
Speaker 1: something that feels like drudgery or even as like deprivation. Right,
Speaker 1: it's like you're thinking, oh, this is money that I'm
Speaker 1: not able to spend on the fun things here and now. Well, hey,
Speaker 1: remind yourself that this is actually something that you are
Speaker 1: doing for future you. But there are very small ways
Speaker 1: that you can make investing that money fun in the
Speaker 1: here and now where you are able to take advantage
Speaker 1: of that sort of immediate gratification that you would realize.
Speaker 1: And like, one of the things that Kate and I
Speaker 1: do is at the beginning of every single year that
Speaker 1: like we don't do dollar cost averaging, we saved out
Speaker 1: the previous year. That way, we're able to release those
Speaker 1: dollars now basically at the beginning of every single year.
Speaker 1: And we just did that recently, and we mark the
Speaker 1: occasion by me going out and buying an extra fancy beer.
Speaker 1: And that night, after we put the kids down, we
Speaker 1: correct that bad Boy open and Kate was just like, Okay,
Speaker 1: why we what's what's what's the special occasion? And I
Speaker 1: remind her that, like, hey, this is knocks out this
Speaker 1: or this is what we just did, and it's just
Speaker 1: a very small way just to mark the occasion. Um.
Speaker 1: But also by associating this fun thing that we do,
Speaker 1: it's not again, just this thing that works in the
Speaker 1: background without us realizing that is happening, is something that
Speaker 1: we are actually enjoying and partaking in the here and now,
Speaker 1: just via something like a delicious craft beer. Yeah. I
Speaker 1: do think that attachment to fund is important, but and
Speaker 1: I think it's important to mention too that automation it
Speaker 1: doesn't just apply to investing, like I think that is
Speaker 1: one of the best easiest places to implement automation into
Speaker 1: your life, but it also applies to paying your bills
Speaker 1: on time hopeful as well. Right, because if you have
Speaker 1: to manually pay your credit card bill every month, there's
Speaker 1: a chance that you're going to forget right, which might
Speaker 1: incur you penalties and rist and so for a lot
Speaker 1: of folks, it's gonna best to set up recurring payments
Speaker 1: that pay off the statement in full, right. And so
Speaker 1: the more we automate, the less we have to rely
Speaker 1: on our flawed selves to make smart decisions. Habits, they're important,
Speaker 1: but automation is just the best tool for folks who
Speaker 1: who think of themselves as weak willed, which I do, Matt,
Speaker 1: I'm not. I don't feel like I've gotten the most
Speaker 1: discipline guy in the world. I certainly no James clear
Speaker 1: who wrote the book Atomic Habits and well, and even
Speaker 1: for the most strong willed person, they're always gonna be
Speaker 1: times when they fail. Yeah, you know, you just that's
Speaker 1: just how it is, forget right, which happens, which is
Speaker 1: one of the things we talked about as well on Monday.
Speaker 1: But while I'm all for cultivating better habits in my life,
Speaker 1: I'm certainly I'm more than open to taking those easy
Speaker 1: automation wins wherever I can. Sure, But with that in mind,
Speaker 1: I think I think this is gonna sound like the
Speaker 1: exact opposite of what you just said about automation. Nothing.
Speaker 1: It's not contrarian, I promise us not. But we also
Speaker 1: want you to revisit the things that you've automated, and
Speaker 1: often times on an annual basis, because we don't want
Speaker 1: you to over rely on automation. And the reason for
Speaker 1: that is because, like mostly so they you can crank
Speaker 1: up at that savings in that investing rate, right and so,
Speaker 1: for instance, going back to the work sponsor retirement account,
Speaker 1: if you're contributing three automatically now and you're not getting
Speaker 1: the full match, well, we want you to have a
Speaker 1: plan to raise that in the coming months and in
Speaker 1: the coming years. Uh. And so automation is great, but
Speaker 1: we just don't want you to completely forget about it
Speaker 1: to the point that you're never increasing those amounts, that
Speaker 1: you're never challenging yourself to sock away more for retirement.
Speaker 1: That being said, there are some for win K providers
Speaker 1: actually that uh that lets you schedule increases in advance
Speaker 1: as well, which is super cool. You can automate your
Speaker 1: automation exactly. It's got this escalator built in. And so
Speaker 1: that's the downside of automation. On the investing front. But
Speaker 1: there's the downside when it comes to your expenses as well,
Speaker 1: because if you have automatic payments, you're also to a
Speaker 1: certain extent, you're being insulated from fluctuations that you might
Speaker 1: see in your bill. And this is specifically, let's say,
Speaker 1: on utilities, which is something I still have it set
Speaker 1: up on automatic payment, but I look at that bill
Speaker 1: every month because I want to know my want to
Speaker 1: feel that pain. I want to feel the pain even
Speaker 1: though I'm still auto paying it. I don't just like
Speaker 1: forget that it exists exactly and forget how much I'm spending.
Speaker 1: And this is kind of an argument again for tracking
Speaker 1: and budgeting again because because I too all of my
Speaker 1: utilities are set up on auto pay that way, I'm
Speaker 1: never going to get a late payment, uh, any sort
Speaker 1: of fee associated with not paying that on time. But
Speaker 1: because I manually enter all my expenses into the budget,
Speaker 1: that allows me again to to kind of feel that pain.
Speaker 1: Um And because of that, like, this is something I
Speaker 1: did recently, Joel, like once it's started getting cold a
Speaker 1: few months ago, and I was shocked to see the
Speaker 1: amount that we're paying when it came to gas, our
Speaker 1: our energy bill and so since we've been in the
Speaker 1: new house, I've never uh programmed the thermostat. But you
Speaker 1: know what, seeing that bill caused me to say, oh,
Speaker 1: it's time to fit. And partly it is because it's
Speaker 1: not a nest thermostat, which makes it so stink and
Speaker 1: easy to like schedule the week. It's one of the
Speaker 1: traditional ones where you have to like go to program
Speaker 1: it are wake up time, leave home, arrive at home, sleep,
Speaker 1: like that whole thing. They don't make it easybe at
Speaker 1: some point you replace. But but that they said that
Speaker 1: caused me to be like, you know what, I'm going
Speaker 1: to spend a few minutes figure the stupid thing out
Speaker 1: and guess what. The next month's gas bill reflected that change.
Speaker 1: There you go. I like it well. And okay, so
Speaker 1: we talked about investing in automation here, but we say,
Speaker 1: like another habit that financially successful people partake in is
Speaker 1: investing in themselves, right, which that would say that contributes
Speaker 1: to a whole lot of financial success over time. And
Speaker 1: this this doesn't mean that you've got to fork over
Speaker 1: like forty or fifty dollars for an advanced degree. That
Speaker 1: doesn't mean you got to go back to school for
Speaker 1: three more years. I mean that time for that n
Speaker 1: b A. I mean that might be what you opt
Speaker 1: to do, and that might be the best choice for you,
Speaker 1: but we're also talking about spending the time, the energy,
Speaker 1: and sometimes the cash to grow as a person and
Speaker 1: to learn the skills that are going to allow you
Speaker 1: to earn more money. Investing in yourself it's not just
Speaker 1: good for your bottom line, but it's also super rewarding
Speaker 1: right at the most basic human level. It feeds your
Speaker 1: thirst for knowledge and growth, and not to mention, it's
Speaker 1: fun because it means often making new social connections, which
Speaker 1: allows you to widen your network. And so we would
Speaker 1: say make it a habit to find multiple ways each
Speaker 1: year to grow as a person, and that can be
Speaker 1: something directly related to your current career or the one
Speaker 1: you want, or just embarking on a new hobby, because
Speaker 1: stretching yourself in new ways is a game changer for
Speaker 1: us as humans. And this is the habit, this stretching
Speaker 1: yourself habits and growing yourself and investing in yourself that
Speaker 1: we think is is something worth continually partaking in. And
Speaker 1: plus I think folks would be surprised too at what
Speaker 1: i'll call the spillover effect, which is they start participating
Speaker 1: and like it's like maybe a hobby that they think
Speaker 1: is completely unrelated to their nine to five, but then
Speaker 1: they find there are certain little lessons that they're learning
Speaker 1: from their new hobby, or there's certain new friendships that
Speaker 1: are able to be made while they're working out, Like
Speaker 1: there are all these additional unexpected in direct ways that
Speaker 1: ultimately it really can boost your bottom line and it
Speaker 1: really can boost your income over time. But similar to
Speaker 1: investing in yourself in order to make more money, we
Speaker 1: think it's also important to prioritize financial education as well.
Speaker 1: And so you know, whether that's doing exactly what you're
Speaker 1: doing right now, which is listening to a personal finance
Speaker 1: podcast a few times a week, or like just picking
Speaker 1: up one money book to read each and every quarter
Speaker 1: of the year. But folks who are successful with their
Speaker 1: finances are all about regularly upping their knowledge. It's interesting
Speaker 1: because money it's his fascinating space because it's not like
Speaker 1: there are a bunch of like new rules, Like there's
Speaker 1: not a bunch of new things that you need to
Speaker 1: learn on an ongoing basis. It's not constantly changing or
Speaker 1: something No, Yeah, it's it's it's kind of like astronomy.
Speaker 1: It's like maybe every now and then they're gonna decide
Speaker 1: that Pluto is not a plane anymore, uh, and then
Speaker 1: they'll change it back port Pluto. I miss it. But
Speaker 1: you can go far, you know, just by knowing and
Speaker 1: practicing the fundamentals. But that doesn't mean that the world
Speaker 1: of personal finance isn't isn't changing and involving uh in particular,
Speaker 1: whether that's like the focus on like the behavioral psychology
Speaker 1: of personal finance. I feel like that's something that's gotten
Speaker 1: a lot more attention given to it over the the
Speaker 1: past few years. But yeah, continuing education and looking at
Speaker 1: the different sources of personal finance information out there, it'll
Speaker 1: allow you to just make some subtle changes that will
Speaker 1: help you in your progress. So we're going out all
Speaker 1: these different sports and analogy sports analogies, Joel, But just
Speaker 1: like like sports go through different phases like this as well,
Speaker 1: Like makes in the NBA, like back in the day,
Speaker 1: you're looking for these dudes that could freaking dunk the ball,
Speaker 1: Like do you go down the lane? Is it go
Speaker 1: up the lane? Is that? Is that how it goes
Speaker 1: in the paint maybe, yeah, But like I know, down
Speaker 1: voters were all the rage twenty years ago, and now
Speaker 1: it's more of the shooting guard. You're looking at the
Speaker 1: guides that can that can shoot the three pointers. Well.
Speaker 1: Personal finance also has some similar shifts that we've seen recently.
Speaker 1: For instance, for years, if you were a saver, it
Speaker 1: felt like, uh, you were totally getting the shaft. But
Speaker 1: now there are a lot of different places that savers
Speaker 1: can put their money, and like, specifically I'm thinking about
Speaker 1: I bonds, the different high yield savings accounts that are
Speaker 1: available to a lot of savers out there. Given the
Speaker 1: high amount of inflation, uh that we are now experience. Ye,
Speaker 1: spend less than you earn is like duh, right, And
Speaker 1: that's like basic, the most basic of basic personals in
Speaker 1: the middle. Yeah, but you're right, as different things change,
Speaker 1: as inflation soars in one area and not as much
Speaker 1: in another, like it should influence our habits, how we
Speaker 1: buy things, and it should influence how we save and
Speaker 1: where we save and stuff like that too. So you're right.
Speaker 1: It's like it's not like the the uh generic advice changes,
Speaker 1: but sometimes the specific actions that we take do need
Speaker 1: to shift based on what's happening so totally. I think
Speaker 1: it's a good point. But there's some less tactical habits
Speaker 1: that are worth implementing as well, that are going to
Speaker 1: help I think our listeners in massive ways in the
Speaker 1: coming years when it comes to achieving their financial goals.
Speaker 1: Let's get to those. We'll talk about that right after this.
Speaker 1: All right, we are that, Joel, and you know, we're
Speaker 1: continuing our discussion on the essential habits for financial success,
Speaker 1: and so let's kind of keep that gravy train roll man.
Speaker 1: Another thing that financially successful folks do is they hang
Speaker 1: out with like minded folks. And not only that, but
Speaker 1: they also avoid comparing themselves to folks who they don't
Speaker 1: want to be like. The folks we spend most of
Speaker 1: our lives with are going to influence us more than
Speaker 1: we think we are. We're social beings, and you know
Speaker 1: what we think of just as normal day to day
Speaker 1: decisions and our world views like they're often a construction
Speaker 1: of what the like the four or five people that
Speaker 1: were closest to what it is that they are doing,
Speaker 1: what it is that they think about those things. And
Speaker 1: so if our best friends are downsizing their car fleets,
Speaker 1: in order to save money. Well, guess what, that's gonna
Speaker 1: influence us in a positive way as well, helping helping
Speaker 1: us to curb consumption. But on the contrary, if they're
Speaker 1: buying a lake house that's out of the price range
Speaker 1: and they're buying a boat or something like that, if
Speaker 1: they're draining the four oh n K in order to
Speaker 1: make expenses like that happen, while we're also going to
Speaker 1: be more likely to follow suit. And so it's just
Speaker 1: important to keep that in mind. Right, It's not that
Speaker 1: we can't be friends with folks who think about the
Speaker 1: world definitely, who handled money differently than we do, but
Speaker 1: just make it a habit to spend maybe more time
Speaker 1: with folks who handled their money well and who will
Speaker 1: also motivate you to do the same. I just recently
Speaker 1: hung out with a friend who hadn't seen in quite
Speaker 1: a while. And you have other friend I know, right, shock,
Speaker 1: but it's not allowed. But he has a brand new
Speaker 1: Ribby and sub we have talked, we have talked on
Speaker 1: this show that there's like only eight and something of
Speaker 1: them in existence, and so goodness, it was pretty impressive
Speaker 1: to see, Like I've been obsessed with ribbians for ever
Speaker 1: since I heard about them. Basically, I think they're now
Speaker 1: you're gonna get one, right, one of the most beautifully
Speaker 1: designed vehicles in the world. And so I was like, man,
Speaker 1: I'm excited to hang out with him, but I'm also
Speaker 1: excited to use in this far and they are dope.
Speaker 1: I got a chance to write in it, and I
Speaker 1: was like, man, if I hung out with this buddy
Speaker 1: too much, I would be so enticed to do to
Speaker 1: spend the money differently to buy a fancy new car.
Speaker 1: But I actually walked away from that being like, man,
Speaker 1: it's I'm not I don't care anymore, Like like, I'm
Speaker 1: so glad that we're not closer. I'm so glad that
Speaker 1: I made about not to see him again for at
Speaker 1: LEAs two more years. You got to get your ratios
Speaker 1: and check right. But it's I mean, it's cool, but
Speaker 1: I get I totally understood after that hang how just
Speaker 1: spending more time together would lead me down this path.
Speaker 1: And so you have to be cognizant of who you're
Speaker 1: spending time with because it does impact the decisions that
Speaker 1: you make. And and part of that means I think, uh,
Speaker 1: we need to be we need to be making it
Speaker 1: a habit to talk about money more in general. And
Speaker 1: it is like it's obviously it's a taboo topic for
Speaker 1: a lot of people. Most people try to avoid it.
Speaker 1: Most of your friends probably don't want to talk to
Speaker 1: you about money if you try to bring it up.
Speaker 1: But whether you're making it something like a formal monthly
Speaker 1: conversation amongst friends over a beer, like a money club, yeah,
Speaker 1: something like that. Yeah, I mean, however you can, you
Speaker 1: can even use that name. It can be like formal
Speaker 1: or informal, like however you want to tackle it. But
Speaker 1: we would say like having money conversations is going to
Speaker 1: move the needle for you over time. So offer it
Speaker 1: up an opinion, share a struggle, or discuss the money
Speaker 1: goal that you're trying to achieve this year with some
Speaker 1: people you care about, some people that are close to you.
Speaker 1: You might find encouragement, accountability, or insight that you'd otherwise
Speaker 1: be missing out on. But I think that's a habit
Speaker 1: that also has lasting impacts. The more we kind of
Speaker 1: avoid this topic, the more it's like an elephant in
Speaker 1: the room that we just like never ever brooch broach
Speaker 1: the subject of the more we relegate it to like
Speaker 1: and never being spoken of, the less likely we are
Speaker 1: to to make progress in our own lives. I think
Speaker 1: we it just shows how uncomfortable we are with money
Speaker 1: as a whole. Totally. Yeah, I mean, And while like,
Speaker 1: if you're listening to the show, like there's a chance
Speaker 1: that you might make pretty decent decisions when it comes
Speaker 1: to your money, if you're not opting to talk about
Speaker 1: it with your friends who aren't listening to our show,
Speaker 1: there's a good chance that they're going to make poor
Speaker 1: decisions because of that. They say that, like sunshine is
Speaker 1: the best disinfectant, right, and so in that way, we
Speaker 1: want to bring these financial conversations to light. And we
Speaker 1: I mean, we talked a lot about this, like during
Speaker 1: the early days of our podcasts. By the way, this
Speaker 1: does not mean beating your friend over the head with
Speaker 1: the book or something like that, but it does mean,
Speaker 1: like like I said, there's all sorts of soft ways
Speaker 1: to get discuss, casual ways to go about it. And
Speaker 1: we just want folks to talk more about money because
Speaker 1: the more you talk about it, the more interesting is
Speaker 1: going to become, and the more you'll be able to
Speaker 1: challenge each other to make wiser financial decisions. Like there's
Speaker 1: a degree of accountability and honestly, just the ability for
Speaker 1: you to provide a differing opinion. You know, like somebody
Speaker 1: they might be surrounded by their four or five people
Speaker 1: in their neighborhood and they're being encouraged to make certain
Speaker 1: purchases in life because that's just what everybody in the
Speaker 1: neighborhood is doing. But what they really need is that
Speaker 1: frugal contrarian that you might be. Uh, that might be
Speaker 1: the role that you need to play in their life,
Speaker 1: and that's going to allow them to perhaps get much
Speaker 1: fur their along with the different financial goals that they've
Speaker 1: got in their life. Yeah, I mean, I think the
Speaker 1: truth is we're social beings, right, and there's there's a
Speaker 1: reason that lots of folks have to work out at
Speaker 1: the gym instead of at home. There's a reason folks
Speaker 1: whore willing to pay a ton of money to go
Speaker 1: to a concert or to go see like, uh, let's
Speaker 1: say an NFL playoff game, right, how much how expensive?
Speaker 1: Or Super Bowl tickets every year they're they're not cheap.
Speaker 1: And part of that is not just seeing the game,
Speaker 1: but it's it's being around like a bunch of people
Speaker 1: cheering in the same direction that you are and that
Speaker 1: can be kind of an experience. And I think the
Speaker 1: same is true of money progress, right, There's something magical
Speaker 1: about incorporating other humans even as we're striving towards accomplishing
Speaker 1: distinctly personal and unique goals with our money. There's something
Speaker 1: about the accountability, but also like being able to make
Speaker 1: progress forward together together. Ye dude, absolutely, Like I'm gonna butcher,
Speaker 1: I'm not. I don't have a specific quote here, but
Speaker 1: I think it's it was C. S. Lewis who actually
Speaker 1: was speaking about friendship in this way. I think it
Speaker 1: was him, uh, And one of the things he said
Speaker 1: was that, like, what is at the core of our
Speaker 1: friendship is being able to stand next to somebody and
Speaker 1: for both of you to look at something and point
Speaker 1: to that and be like, oh, look at that. Isn't
Speaker 1: that awesome to kind of have a shared interest or
Speaker 1: passion about something you're basically both agreeing that the thing
Speaker 1: you're looking at is lovely. Uh. And you know this
Speaker 1: sounds maybe a little too mushy and poetic, but you
Speaker 1: can also do that about money, Like that is something
Speaker 1: that you can do with your friends, with your coworkers.
Speaker 1: And I think that's that's just super cool. It's just
Speaker 1: really and that doesn't mean lording your fur oh one
Speaker 1: k balance over them. Look at how gross way of
Speaker 1: doing it. You know, it's other way, better ways of
Speaker 1: doing We've talked about that in the past, maybe lining
Speaker 1: to that episode in the show notes. But yeah, you
Speaker 1: don't have to give even specific numbers. There's ways to
Speaker 1: have that money conversation without being like, look at my income,
Speaker 1: here's my pace stub, and instead you can talk about
Speaker 1: instead of specific numbers, percentages. That's a great way of
Speaker 1: talking about the general habit and the behavior without getting
Speaker 1: overly specific or goals or maybe a piece of personal
Speaker 1: finance content you've come across that kind of change your
Speaker 1: perspective on something. Those are good ways to initiate the
Speaker 1: conversation without making someone else who's not where you are
Speaker 1: feel like an idiot exactly. But another financial habit we
Speaker 1: would say would be important to implement this year would
Speaker 1: be to write your goals down because in this habit
Speaker 1: really can make a massive change when it comes to
Speaker 1: actually take the action. If you're putting pen to paper,
Speaker 1: if you're outlining what you're working towards, the likelihood that
Speaker 1: you're going to prioritize that thing goes up substantially. There's
Speaker 1: something about like penda paper and how it affects our memory,
Speaker 1: Like if you're listening to someone speak and you're taking notes,
Speaker 1: you're going to retain more information. And it's the same
Speaker 1: thing when you write down your goals, like there's no
Speaker 1: waffling and guessing what you should be doing when extra
Speaker 1: money comes into your account. Let's say another stimulus check
Speaker 1: worre to occur unlikely, but let's say let's say did
Speaker 1: or a tax refund that's kind of similar for a
Speaker 1: lot of people. That's like an annual stimulus check that
Speaker 1: comes along. A lot of people make or get like
Speaker 1: a multi thousand dollar tax refund, and that is a
Speaker 1: way for you to jump start financial progress in your life.
Speaker 1: But being in tune with the goals to the point
Speaker 1: that you have committed them to writing is a method
Speaker 1: of personal accountability. It shows that you take your own
Speaker 1: hopes and dreams seriously. And like we said earlier, a
Speaker 1: lot of these habits can be implemented even if you're
Speaker 1: unsure about your larger money goals. But this one is
Speaker 1: a game changer. Once you've kind of started to figure
Speaker 1: out those out. Once you've decided where it is you
Speaker 1: want your money to go, like writing that goal down,
Speaker 1: and it almost ensures that your money is gonna follow
Speaker 1: suit us. Right, But you also want to limit the
Speaker 1: number of goals that you're striving after as well, right,
Speaker 1: because yeah, like successful financial nerves, they set goals, but
Speaker 1: not too many of them, because it's gonna be hard
Speaker 1: to achieve thirty two different goals that you've got set in.
Speaker 1: In fact, the person I think who sets a fewer
Speaker 1: goals is more likely to then accomplish the goals that
Speaker 1: they didn't call out from the from the outset. Right.
Speaker 1: And so just simply by limiting your scope by by
Speaker 1: narrowing your focus that that laser like attention on on
Speaker 1: just like one, two, three different goals that that you
Speaker 1: have on, you know, on the biggest wins that you
Speaker 1: want to see that is going to translate to a
Speaker 1: higher success rate, uh, and you know, to doing it
Speaker 1: more quickly, I think, so that you can then just
Speaker 1: move on to the other goals that you have more quickly.
Speaker 1: And one of the other things that that Katie had
Speaker 1: talked about was basically implementing a plan to achieve these
Speaker 1: different goals, because we don't want you to just stop
Speaker 1: at writing down your goal, but literally right out some
Speaker 1: of the steps necessary in order to break down that big,
Speaker 1: so somewhat overwhelming goal down into small, bite size actions.
Speaker 1: Right those enlist those things, those steps out as well.
Speaker 1: So for instance, if you're thinking, by the end of
Speaker 1: this year, I want to have a fully funded emergency
Speaker 1: fund set up, cool, what does that leaven look like?
Speaker 1: That's a great goal to have. I bet you can
Speaker 1: have five, six, seven steps easily take absolutely ward. Step one,
Speaker 1: track your expenses. Figure out how much it's it costs
Speaker 1: for you to survive on this planet over a thirty
Speaker 1: day period. Step two, uh, multiply that by three or
Speaker 1: four or five or six, depending on how many months
Speaker 1: of reserves that you want to have. But then beyond that,
Speaker 1: right like figuring out how much you need to sit aside,
Speaker 1: Like divide that out by twelve uh, so that you
Speaker 1: know that each paycheck, I want to make sure I
Speaker 1: set this amount of money aside. But figure out and
Speaker 1: literally start solving the problems. Start cracking that nut now
Speaker 1: by not just writing up the goal, but some of
Speaker 1: the specific steps that are going to allow you to
Speaker 1: achieve that ultimate goal, and like the truth is ultimately
Speaker 1: matt like habits make or break us, and uh, it's
Speaker 1: it's not the self discipline is dumb or a waste
Speaker 1: of time. But thinking that greater levels of willpower are
Speaker 1: going to elevate us to where we want to be,
Speaker 1: it's kind of naive, right. It's one of those things
Speaker 1: where I've said that a lot over the years, like
Speaker 1: hoping that I would rise to the occasion. You can't
Speaker 1: just will it into existence, like the emergency fund, like no,
Speaker 1: like there are very some very practical steps as opposed
Speaker 1: to just being like I gotta figure that out. Yes,
Speaker 1: it's like, well, well what does that mean? Like that
Speaker 1: is a response and and we've all had at different times,
Speaker 1: especially on the subject of money, where it feels like
Speaker 1: we need more information where we can always say like
Speaker 1: we don't know enough, or there's all sorts of excuses
Speaker 1: we can give for not doing the thing that we
Speaker 1: need to do and for not implementing the tactics that
Speaker 1: are gonna help us get where we want to be.
Speaker 1: But like we would say, implementing just a few of
Speaker 1: these habits, it's gonna put you on the path to progress,
Speaker 1: making it so much more likely that you're going to
Speaker 1: take strides, and you're gonna take them more quickly. You
Speaker 1: don't even have to have specific goals like ac crewing
Speaker 1: a million dollar net worth by the time you're forty
Speaker 1: five or something like that. It doesn't have to be
Speaker 1: that intense or that ridiculous. But those goals are going
Speaker 1: to come into focus as you habitually make smart moves
Speaker 1: and gain confidence. I think that's actually going to give
Speaker 1: you the confidence to make and set goals that are
Speaker 1: bigger and more audacious. And uh a quote that stuck
Speaker 1: out to me about from James clear Actually he said,
Speaker 1: tell it to me. Action relieves anxiety. And I think
Speaker 1: that the habits that we choose to implement are directly there,
Speaker 1: directly under our control, and implementing even just one or
Speaker 1: two of those could really kick start a financial transformation
Speaker 1: in our lives. So action is the key getting these
Speaker 1: habits started, at least a few of them. Is. You know,
Speaker 1: we might look back at the end of this year
Speaker 1: and say, Wow, those three habits took me a long way.
Speaker 1: It took me a long way towards the goals I
Speaker 1: wanted to I wanted to reach. That's right, man. Yeah,
Speaker 1: hopefully folks have been encouraged to take some practical steps,
Speaker 1: steps that lead to action when it comes to their
Speaker 1: personal finances. Let's shift back to the beer during this episode,
Speaker 1: You and I enjoy it a liquid hop Magma Austin
Speaker 1: Powers reference. What were your thoughts on this beer? Uh?
Speaker 1: So this one leaned in the fruity direction, I say,
Speaker 1: and I pa, that's definitely more fruit forward, even though
Speaker 1: done have fruit in the making of this beer. It's like, literally,
Speaker 1: that's what I'm all constantly amazed at hops and how
Speaker 1: different combinations of those hops can can create a completely
Speaker 1: different flavor profile and and and it kind of makes
Speaker 1: me think of is it the different jelly beans where
Speaker 1: they've got all the different flavors, but by the different
Speaker 1: combinations of putting together you can make like different dishes.
Speaker 1: Uh yeah, that's right, that kind of I think. Let's
Speaker 1: combine this hop with this op with this hop, and
Speaker 1: all of a sudden it tastes like a key line.
Speaker 1: That's true. I mean yeah, And that's that's what's crazy
Speaker 1: about these little green They like Brussels sprouts, but somehow
Speaker 1: they make beers taste fantastic, and this one was like
Speaker 1: more passion fruit. Um, I'm notes that I'm getting way
Speaker 1: more citrusy. Yeah, for sure, So I will say I
Speaker 1: liked it. It was fantastic. And this is probably even
Speaker 1: more up your alley because you like the sweet the
Speaker 1: sweet or yeah, this is I mean it's not like
Speaker 1: an orange cream sickle or anything like that, but it
Speaker 1: definitely kind of had those smooth, creamy vibes going on.
Speaker 1: And this is our last beer that we are going
Speaker 1: to enjoy from Mutation. But more than anything, man, I
Speaker 1: am just glad that we have yet another fantastic craft
Speaker 1: brewery here in the city of the Atlanta. The merrier
Speaker 1: the more, the merrier, for sure. The guys over at
Speaker 1: Mutation are doing a great job and we still look
Speaker 1: forward to heading up. I mean they just opened up, yeah,
Speaker 1: just a few months ago. Go soon. It hasn't been
Speaker 1: that long. I will say, we haven't been there yet.
Speaker 1: We need to make it a habit to go to
Speaker 1: more breweries, but we've already made it a habit to
Speaker 1: drink beer on the show, and we've had something close
Speaker 1: to five beers on How the Money Now in our
Speaker 1: five years, five plus years of existence, so it makes
Speaker 1: it sound like romaniacs, but but we're not. What do
Speaker 1: you think, Well, that's the thing is like when you
Speaker 1: break it down into smaller increments, that's two beers a week. Alright, guys,
Speaker 1: that's not that's not intense, that's not overwhelming. But we
Speaker 1: are thankful that we get to do this job every
Speaker 1: single week, that we get to hang out with each
Speaker 1: other talk about money and and really it's you, listeners
Speaker 1: who make this podcast possible. So thank you and we
Speaker 1: wish you the best of success this year informing salad
Speaker 1: money habits that are going to change your future. That's
Speaker 1: what we want to see for you. That's right, and
Speaker 1: we would love for you to hear our next episode,
Speaker 1: which comes out on Friday. So if you are not
Speaker 1: already a subs griber, mash that subscribe button so you
Speaker 1: don't miss the next episode. But if you are a
Speaker 1: long time listener and you haven't left us a solid
Speaker 1: review yet, head over to Apple Podcasts or wherever you listen,
Speaker 1: give us a solid rating, solid review over there, and
Speaker 1: a big thank you in advance for that. Will make
Speaker 1: sure to link to any of the different resources that
Speaker 1: we mentioned up on our website at how to money
Speaker 1: dot Com Joel, it's going to be a buddy for
Speaker 1: this episode until next time. Best Friends out, Best Friends Out,