Speaker 1: Welcome to How the Money. I'm Joel and I and Matt.
Speaker 1: Today we are explaining why these financial rules were made
Speaker 1: to be broken. So, Joel, as you said that, it
Speaker 1: made me realize that this is an episode that I
Speaker 1: don't want listeners to listen to if they have never
Speaker 1: listened to our show before, because I'm planning this episode
Speaker 1: under the start here section exactly. Yeah, this is like
Speaker 1: a two thousand level class at your local university. We
Speaker 1: want to make sure that folks have truly like a
Speaker 1: foundation of a foundation of knowledge when it comes to
Speaker 1: personal finances. Because in this episode, we're going to talk
Speaker 1: about some concepts, uh, and we're gonna we're essentially we're
Speaker 1: gonna flip them on their head a little bit because
Speaker 1: we're making the argument that you can't take all the
Speaker 1: different financial rules that are out there at face value.
Speaker 1: We're gonna ask you to dig a little bit deeper
Speaker 1: and we're gonna explain why it is that we feel
Speaker 1: that there are certain financial rules that we can break.
Speaker 1: We're gonna talk about where you can place back and
Speaker 1: where we a little bit we can fight the man,
Speaker 1: you know, a little bit when it comes to the
Speaker 1: financial rules that we have all heard like these are
Speaker 1: These are common rules that you have probably heard a
Speaker 1: time or two or dozens of times, and and some
Speaker 1: of them, Um, there's there's certainly a kernel of truth
Speaker 1: that there's some good advice in there, but there are
Speaker 1: a lot of ways that you can break those rules
Speaker 1: and actually benefit your personal financests. Right exactly before we
Speaker 1: get to that, dude, I wanted to share a quick
Speaker 1: little story with you. Kate and I were on a
Speaker 1: belated anniversary trip. We were driving back from North Carolina.
Speaker 1: We went hiking up in the North Carolina Mountains. You
Speaker 1: spotted a bear while you were there too. I did
Speaker 1: we should post two bears, a mama and a cub,
Speaker 1: and I'm the cub was cute, but we quickly realized
Speaker 1: that there was a mama bear that was closely following.
Speaker 1: I was glad you didn't go like Leonardo in the
Speaker 1: revenues style thought my pocket knife. Uh No, Kate would
Speaker 1: not have let me do that. That would have been
Speaker 1: a bad ending to our anniversary of one of our
Speaker 1: anniversary hikes, but I was gonna share. Driving back from
Speaker 1: North Carolina, it was obvious there's a car up ahead
Speaker 1: of us that we're catching up to it was all
Speaker 1: decked out and the we just got married kind of look.
Speaker 1: You know, when I'm talking about the cans hitting the roads,
Speaker 1: No cans, I think that's dangerous actually, but the cans
Speaker 1: hitting windshield behind them? No. They had the window pant
Speaker 1: and it said, you know, just married, you know Mr
Speaker 1: and Mrs whatever their names were. I forget. That's always
Speaker 1: a super fun thing to do, right, you know, you're
Speaker 1: I guess they're driving to their honeymoon. They looked all happy,
Speaker 1: ready to get on with their their lives together. But
Speaker 1: something else that we noticed that was also written on
Speaker 1: the window was their Venmo handle, their their name. And
Speaker 1: I couldn't believe when I thought, I was like, wait what?
Speaker 1: And I realized that I guess they're hoping that folks
Speaker 1: driving down the interstate might see that, might want to
Speaker 1: congratulate them, might want to pass them some money, uh,
Speaker 1: in order to to help them celebrate a little bit.
Speaker 1: But before I share my thoughts, what do you think
Speaker 1: is that frugal? Is that cheap? Is that a tasteful
Speaker 1: move or do you feel like that that lacks class.
Speaker 1: I'm gonna say it's clever. I don't know if it's
Speaker 1: frugal or cheap, but it's clever because I think there
Speaker 1: are a lot of people who are going to see
Speaker 1: that driving down the side of the road and they
Speaker 1: are going to remember their wedding day and they're gonna
Speaker 1: remember all the excitement and they're gonna be compelled to
Speaker 1: drop bucks. Maybe maybe who I don't know. If some
Speaker 1: people would just be like, congrats, you guys made my day.
Speaker 1: That was pretty funny. I was because it's it's almost
Speaker 1: to me like when I'm walking through downtown Atlanta and
Speaker 1: I see, uh, someone like a homeless person who has
Speaker 1: a clever sign, like with a joke on it or
Speaker 1: something like that, it makes me more compelled to give.
Speaker 1: And I don't know what that is. But when they've
Speaker 1: kind of like just made me smile, you appreciate that creativity. Yeah,
Speaker 1: I'm like, I like the creativity. And I'm like, all right, yeah,
Speaker 1: here's here's five bucks. You know. Um. So I don't know,
Speaker 1: it's not like everyone's doing it. It's kind of a
Speaker 1: one off thing. I'm like, oh yeah, that is Collogum
Speaker 1: I ten bucks. Okay, So I kind of revealed I
Speaker 1: guess how I feel about it, because I truly when
Speaker 1: when I first saw I couldn't believe it. I was honestly,
Speaker 1: I was a little bit offended because I I have
Speaker 1: such uh like pull yourself up by your bootstraps, like
Speaker 1: self reliance kind of mentality that literally when I saw it,
Speaker 1: I just can't. I mean, I thought, you gotta be
Speaker 1: kidding me like that they're actually expecting people to give
Speaker 1: the money just because they got married? How dare they?
Speaker 1: That was like the old man side of me. But
Speaker 1: then I think it off my law on. Yeah, but
Speaker 1: then I thought, well why not? You know, like I
Speaker 1: think it would be maybe lacking taste if they expected
Speaker 1: you to give them money, but like there's no like
Speaker 1: or else. Well yeah no, and they weren't doing that.
Speaker 1: It was just kind of written on there. It's like
Speaker 1: almost like an afterthought, and it was much smaller than
Speaker 1: than what else was written up there. And what's the
Speaker 1: worst that could happen? Right? I mean, somebody driving down
Speaker 1: the road like me might see them and like judge
Speaker 1: them and never see them again. Who cares? But it
Speaker 1: never hurts to ask. It's like what we're talking about
Speaker 1: when it comes to asking for a discount, And like
Speaker 1: the downside, what's the downside. We're all so scared to
Speaker 1: make that ask. But really the person can only say no,
Speaker 1: they're not kind of like punch you in the face
Speaker 1: usually exactly. And so because of that, I was kind
Speaker 1: of like converted and right there on the spot, and
Speaker 1: so I pushed him five bits. Ye see, give me
Speaker 1: a dap, dude, Okay, I like that, Like I probably
Speaker 1: would have done the same if I've seen it, because
Speaker 1: it took me a second, because my natural inclination was
Speaker 1: just like, you gotta be kidding me. You went through
Speaker 1: all the realm of y. Yeah, that was like the
Speaker 1: journey of me and uh seeing you know, some newly
Speaker 1: wids on the interstate. But but yeah, I thought that
Speaker 1: was an interesting clever way. So if there are any
Speaker 1: new newly wids out there, that could be a way
Speaker 1: that you maybe pay for a nice dinner around on
Speaker 1: your honeymoon. Yeah. Make it fun, though, Make it fun,
Speaker 1: and people will I think probably be excited to drop
Speaker 1: you five bucks, like Matt finally got to the point
Speaker 1: of doing. Alright, let's mention the beer that we're having
Speaker 1: on this episode. This one is called Indefinite Staycation. It's
Speaker 1: by dog Fish Hed Brewing. Matt my buddy Ryan brought
Speaker 1: this beer back from Delaware. He actually visited the brewery.
Speaker 1: He goes up there once a year and he's always
Speaker 1: like nice enough to bring me bring us a bottle back.
Speaker 1: So big thanks to Ryan for um jad dropping this
Speaker 1: one off. We actually share to be together. He gave
Speaker 1: it to me, um and so yeah, looking forward to
Speaker 1: drinking this is like a really nice looking sour beer.
Speaker 1: So yeah, it came corked and caged. Always a fancy
Speaker 1: kind Yeah, one of those fancier beers. Looking forward to
Speaker 1: this and uh yeah, thank you Ryan for donating this
Speaker 1: one to Joel therefore to me. We'll give our thoughts
Speaker 1: on it at the end of the episode. But let's
Speaker 1: get on to the subject at hand, financial rules that
Speaker 1: were made to be broken. And Matt um, you know,
Speaker 1: speaking of going on a drive, seeing people you know
Speaker 1: on the interstate with they're just married signs up. I'm
Speaker 1: wondering if any how the money listeners out there are
Speaker 1: the type that always obeyed the speed limits. I don't know, um,
Speaker 1: that I've necessarily met anybody in my life who can
Speaker 1: claim to never have ever gone over the speed limit. Um,
Speaker 1: but maybe some of those people exist and Uh, yeah,
Speaker 1: I guess, like, do you consistently try to drive under
Speaker 1: the speed limit of the sign that you're seeing? If so,
Speaker 1: I think you are an anomaly like that is not
Speaker 1: your robot. That's the case exactly. So I'm of the
Speaker 1: belief and maybe some of our listeners will disagree, but
Speaker 1: speed limits were kind of made to be broken, and um,
Speaker 1: I'm just just trying to be honest here, and I'm
Speaker 1: not trying to insinuate that any of us should be
Speaker 1: reaching like formula level one s. Yeah that my oh
Speaker 1: six minivan, I'm gonna go like one tent only interstate
Speaker 1: or anything like that. Do you think Homer can reach
Speaker 1: those speeds? I think so. I think think so. Yeah,
Speaker 1: you still got some fight left left in him. But yeah,
Speaker 1: even like in a fifty five mile per hour zone,
Speaker 1: I often find myself going sixty five. Um, And I
Speaker 1: don't think I've met a person yet who never breaks
Speaker 1: that rule. And it's not that rules aren't helpful, right,
Speaker 1: that the speed limit isn't helpful. We like rules, and
Speaker 1: speed limits I think are overall a good thing. And
Speaker 1: these financial rules that we're gonna talk about, well, they
Speaker 1: can aid us on our financial journey, and there are
Speaker 1: sometimes when we need to rev the engine and blow
Speaker 1: past not just the you know sign that says fifty
Speaker 1: five an hour, but also we have to blow past
Speaker 1: some of the financial rules that we've heard our entire
Speaker 1: lives that are maybe cramping our style, um and not
Speaker 1: allowing us to make as much progress as we'd otherwise
Speaker 1: like to make. Totally. Yeah, when we believe, you know,
Speaker 1: that the rules are just black and white, it can
Speaker 1: limit what we're able to get done. Uh, and not
Speaker 1: only in our day to day lives, but also with
Speaker 1: our money. So kind of going back to your example,
Speaker 1: if you're driving sixty five instead of fifty five, that
Speaker 1: just means that you'll be able to arrive at the
Speaker 1: mountains or maybe the beach a little bit sooner. And
Speaker 1: we'd also argue that you can break this rule while
Speaker 1: still being responsible, still driving safely. Uh. And so similarly,
Speaker 1: there's a lot of financial advice out there. Some would
Speaker 1: even call them rules that are you know, etched into stone,
Speaker 1: as if they can never be broken. Where we believe
Speaker 1: a certain amount of liberty can be taken. So we're
Speaker 1: gonna cover some of those rules as well as why
Speaker 1: it's okay to be a conscientious objector to some of
Speaker 1: these financial rules. We're gonna give you the uh basically
Speaker 1: the ammunition that's going to inform you why it's okay
Speaker 1: to break some of these rules. Yeah. Yeah, we want
Speaker 1: to give the why behind it, not just be like
Speaker 1: this one's crap, toss it out, but giving kind of
Speaker 1: the ideas for then how you proceed, creating maybe a
Speaker 1: new framework for how you think about it, so that
Speaker 1: you're not just living your life by rigid rules, but
Speaker 1: that you have a fuller picture and understanding of kind
Speaker 1: of how they should be implemented, implemented into your life.
Speaker 1: For maybe you know where they shouldn't be. And so
Speaker 1: let's let's start with Matt. Matt, with some of the rules.
Speaker 1: Maybe they get a little judge. When it comes to
Speaker 1: how we live our personal lives, a few lifestyle rules
Speaker 1: are often cited, and then people begin to live their
Speaker 1: lives by these rules, often subconsciously, they get filtered in
Speaker 1: and then we just assume that we have to react
Speaker 1: this way because that's what the rules say. And then
Speaker 1: those rules can cause us to put off important, meaningful
Speaker 1: things in our lives because we've been led to believe
Speaker 1: that we're not in the financial position to make those
Speaker 1: uh to make those decisions for ourselves. And I think, Matt,
Speaker 1: one of those rules that I have heard stated countless
Speaker 1: times is that you shouldn't get married or start a
Speaker 1: family unless you are financially prepared to do so. And
Speaker 1: that sounds like a smart rule, doesn't It's like, Yeah,
Speaker 1: you don't want to have you know, negative net worth
Speaker 1: to your name by hundreds of thousands of dollars and
Speaker 1: then get married and attack yourself to someone else who
Speaker 1: has the same Like, I get why this rule is
Speaker 1: held out there as fact, But you don't have to
Speaker 1: have necessarily a fully funded emergency in order to get
Speaker 1: married to the love of your life, Like, there is
Speaker 1: no actual rule stating this. There's no rule that you
Speaker 1: have to own a home or you can put that
Speaker 1: emergency fund together while you're driving down the interstate exactly
Speaker 1: after you got other people funded for you. Yeah, and
Speaker 1: there's also no rule that you must have started saving
Speaker 1: for retirement before you tie the knots getting married. You
Speaker 1: do so because you love somebody else. You love that
Speaker 1: person that you want to spend the rest of your
Speaker 1: life with. And so we wouldn't say to not consider
Speaker 1: money at all when you're thinking about tying the knots uh.
Speaker 1: We're fans of pre marital counseling and getting what's called
Speaker 1: financially naked by like revealing kind of what's going on
Speaker 1: with your personal finances and your credit score before you
Speaker 1: actually do get married. You need to be honest and
Speaker 1: you need to share, you know, what your income is,
Speaker 1: if you have any debts. These are all things that
Speaker 1: don't need to be a surprise. You know, you don't
Speaker 1: need to save those until after you get married. Do
Speaker 1: talk about these things ahead of time, but things just
Speaker 1: don't have to be perfect exactly. Yeah. They don't think
Speaker 1: that you have to continue to push that wedding date
Speaker 1: down the road until you've reached like the most stringent
Speaker 1: financial goals possible. And I think it's important to note
Speaker 1: that nobody actually feels financially ready for these things, like
Speaker 1: you don't. You don't get to this point where you're like, ah,
Speaker 1: now I have enough money and we're going to live
Speaker 1: in what it bliss because we have we we've reached
Speaker 1: the financial status that we were looking to achieve. This
Speaker 1: this is one of those things I feel like it's
Speaker 1: important to push back on um and not to be
Speaker 1: stupid when it comes to getting married and spending tons
Speaker 1: of money on a wedding when you are in massive
Speaker 1: amounts of debt, you want to be thoughtful, but it's
Speaker 1: also important not to continue to put it off because
Speaker 1: you don't feel like you're quite in the financial position
Speaker 1: you want to be. There's always gonna be another problem,
Speaker 1: right because if you have say you say you've a
Speaker 1: massed a pretty decent net worth and you're looking to
Speaker 1: get married, well, then all sorts of other questions start
Speaker 1: coming up that you have to grapple with. As opposed
Speaker 1: to before when you're both broke right out of college.
Speaker 1: Things were a lot simpler back then, weren't they. And
Speaker 1: so you know, Joel, you mentioned family. I think likewise,
Speaker 1: like bringing kids into the world, if you've got massive
Speaker 1: amounts of debt and maybe little to no income, that
Speaker 1: doesn't make much sense. It's going to be really hard
Speaker 1: to give them the care that they need if you
Speaker 1: can't afford diapers, whether you're talking about disposable or cloth diapers.
Speaker 1: And similar to getting married, it always feels like a
Speaker 1: stretch to start having kids. Um. I think in many
Speaker 1: ways you're completely unprepared for it, and there's nothing that
Speaker 1: you could have actually done to fully prepare for having kids.
Speaker 1: It just takes it's like actually having kids. It's similarly similarly,
Speaker 1: you'd be like saying, you have to read all these
Speaker 1: parenting books before you begin having kids, and not I'm
Speaker 1: not against parenting books. I've brought a couple of myself,
Speaker 1: but even those like they don't really prepare you for
Speaker 1: having kids. And so yeah, it's probably helpful advice to
Speaker 1: say read a parenting book or two, but it's also
Speaker 1: like you don't. You don't have to before you have
Speaker 1: kids exactly. And when it comes to the money, like
Speaker 1: it's important maybe to talk to another friend who is
Speaker 1: maybe has a kid who's a year old or two
Speaker 1: years old and be like, hey, how much did it
Speaker 1: cost you? How much do you now spend going to
Speaker 1: the doctor. These are all good things to be aware of,
Speaker 1: and that's something you can figure out in a fifteen
Speaker 1: minute conversation. You don't have to spend you know, an
Speaker 1: entire semester going through your own child reading class. Uh,
Speaker 1: you know, based on reading books and so having some
Speaker 1: of your financial ducks in a row before you start
Speaker 1: trying to bring it as into the world is smart,
Speaker 1: don't you know, get us wrong, Like we we do
Speaker 1: think that it is worth preparing for a little bit.
Speaker 1: But don't let this rule cause you to to over
Speaker 1: prepare and wait too long when you really maybe you
Speaker 1: want to get that family started now. Uh, And by
Speaker 1: kicking that down the road, you're maybe sacrificing years of enjoyments,
Speaker 1: you know, years of us satisfied life that you would
Speaker 1: be able to enjoy were you to have those kids sooner,
Speaker 1: no doubt. Yeah. And I think another one in the
Speaker 1: lifestock category. The another matra or rule that has become
Speaker 1: ingrained is that you should retire when you reach retirement age.
Speaker 1: Makes sense, I guess because like it's in the name
Speaker 1: retirements called that's what do you do it. That's when
Speaker 1: we were tired. Kind of like speed limit Joel, you
Speaker 1: shouldn't go faster than with the speed limits. Say, I know,
Speaker 1: I'm an idiot, But when you reach full retirement age
Speaker 1: in your mid sixties and then you can start taking
Speaker 1: social Security funds. That that's why people really have started
Speaker 1: to equate that date that time in their lives with
Speaker 1: not working any or like they go together hand in hand. Right. Well,
Speaker 1: it's also when you have access to your own retirement
Speaker 1: accounts penalty free. But that rule overlooks the fact that
Speaker 1: we all have different goals. You know, Warren Buffett Man,
Speaker 1: he's still working at the age of ninety one. He
Speaker 1: did not take that retirement date up on its promise.
Speaker 1: He's like required minimum distributions. I laugh in the face
Speaker 1: of those. But he's working because he gets a kick
Speaker 1: out of it, like he enjoys it. It's it's obviously
Speaker 1: not because he needs more money, right, um, And so yeah,
Speaker 1: there's there's no need to stop working. If you love
Speaker 1: what you do, you can keep working as long as
Speaker 1: you want. Others find that retiring a whole lot sooner
Speaker 1: works best for them, right, Some of our friends in
Speaker 1: the Fire movement, they have found that not working past
Speaker 1: the age of thirty five or forty has been great
Speaker 1: for them, and they've gotten to pursue other things that
Speaker 1: they love just as much, and they haven't had to
Speaker 1: worry about providing an income for themselves, you know, for
Speaker 1: decades where most people do have to work. We would say,
Speaker 1: just don't let that arbitrary date define like when you
Speaker 1: decided to take extended breaks from work, or ultimately when
Speaker 1: you decide to hang it up, Like, there's no magical
Speaker 1: rule that says that at fifty nine and a half
Speaker 1: or at sixty six, like either of those dates. They
Speaker 1: are magical from the fact that you can take money
Speaker 1: from your retirement accounts or that you have reached full
Speaker 1: Social Security age, but they're not magical from the standpoint
Speaker 1: that it's a rule that you have to follow and
Speaker 1: you should really stop working at that point, right. I mean, basically,
Speaker 1: we want folks just to be intentional with what it
Speaker 1: is that they're doing. It's a good number to be
Speaker 1: aware of because yeah, there are laws that govern the
Speaker 1: with you know, the withdrawal of funds from your retirement accounts,
Speaker 1: but that doesn't mean that you personally aren't necessarily ready
Speaker 1: for retirement. There are a lot of other things that
Speaker 1: you also want to keep in mind, and so Joel.
Speaker 1: There are also a lot of rules in the area
Speaker 1: of debt paying off debt. I feel like it's fraught
Speaker 1: with the different things that you're supposed to do, things
Speaker 1: you that you should do, things you shouldn't do, rules
Speaker 1: to obey. Yeah, some of those rules are helpful, others aren't. Uh,
Speaker 1: And one of these things. Just generally speaking, in regards
Speaker 1: to debt, there's just a whole group of folks out
Speaker 1: there who feel that, you know, being debt free, like
Speaker 1: that's the way to be, or they kind of take
Speaker 1: the mantra that like debt is dumb and that's the rule,
Speaker 1: like don't take on debt or you're an idiot no
Speaker 1: matter what. And you know, we would ask the question like,
Speaker 1: is that actually a good goal to have? You know,
Speaker 1: is this a decent rule to live by? We do
Speaker 1: feel that there are um what we would call worse
Speaker 1: rules out there for sure, because we're not fans of debt.
Speaker 1: We'd love to see how the money listeners paying off
Speaker 1: their debts quickly. Lots of folks, for instance, prize having
Speaker 1: that paid off mortgage. Uh. There's nothing inherently wrong with
Speaker 1: not having any debt, but we believe that the responsible
Speaker 1: use of debt in your life can be an approach
Speaker 1: that makes a ton of sense for a lot of folks.
Speaker 1: If you have your eyes open and you know what
Speaker 1: you're doing. Often times it comes down to what you
Speaker 1: are planning to do with that money instead of paying
Speaker 1: it down, you know, towards that mortgage payment. Uh, and
Speaker 1: so we just wanted to mention that there are times
Speaker 1: when you know, debt makes sense, and we talked about
Speaker 1: that back in episode one, and again it comes down
Speaker 1: to being intentional with that money, right, Because if you
Speaker 1: want to say I want to get rid of all
Speaker 1: of debt in my life because I am really going
Speaker 1: to benefit from the psychological piece that's gonna be able
Speaker 1: to bring me, well, that's great. Do it for that reason.
Speaker 1: Or if you're like, well I don't really care if
Speaker 1: I have debt, well, what can I do instead with
Speaker 1: that money? Well, if you're gonna take that money and
Speaker 1: then invest it, well, then you're utilizing leverage in order
Speaker 1: to see a higher return on your investment versus that
Speaker 1: money that's going towards that mortgage, which can burn you
Speaker 1: depending on what sort of leverage you're taking on. You know,
Speaker 1: totally you don't want to over leverage. Yeah, and that's
Speaker 1: the reason why Matt, like, if we're talking about credit cards,
Speaker 1: that's one thing, but if we're talking about mortgage that
Speaker 1: that's another. Right. And so like paying off your mortgage,
Speaker 1: there's a reason why it's number seven. It's on the
Speaker 1: seventh money year out of seven money years. Like there
Speaker 1: are all these other things you want to do before
Speaker 1: that that really takes like last precedence doing a really
Speaker 1: low interest rate debt like a mortgage. There are a
Speaker 1: lot of smart people holding on to that mortgage so
Speaker 1: that they can do better things with that money. Right,
Speaker 1: And speaking of credit cards, I think that's another rule
Speaker 1: that we should bring up when it comes to debt,
Speaker 1: is that credit cards or the devil. And uh, I
Speaker 1: can just imagine you remember the Waterboy. I can imagine
Speaker 1: Fool's ball, Fool's the devil, Bobby Boucher, I can imagine
Speaker 1: his mom saying the same thing about credit cards. But yeah,
Speaker 1: you know, we're all for moderated intelligent usage of credit cards, right,
Speaker 1: utilizing the benefits that they offer and never paying the
Speaker 1: credit card company's interest on purchases that you're making. But
Speaker 1: avoiding credit cards altogether, well, that's a rule that isn't
Speaker 1: worth following unless you know yourself that it's not gonna
Speaker 1: end up well for you. Like if you know your
Speaker 1: own behavioral tendencies and it's like, you know, if I
Speaker 1: got a credit card in my life, I wouldn't be
Speaker 1: able to handle it, then it's probably a rule that
Speaker 1: you should never break. But for most Town of Money listeners, um,
Speaker 1: they can break that rule and break it frequently because
Speaker 1: they're paying their balances off in full, on time at
Speaker 1: the end of the building cycle. Honestly, I guess we
Speaker 1: just trust our listeners more, right, because essentially we're trusting
Speaker 1: you to be in an adults and to make the
Speaker 1: wise informed decisions based on what you know about yourself. Um.
Speaker 1: I think that's a big reason why these rules we
Speaker 1: feel can be bent a little bit. And again in
Speaker 1: our case, I mean, the reason we talk about credit
Speaker 1: cards so much is because, first of all, I mean,
Speaker 1: the benefits are real, right when we're talking about serious
Speaker 1: cash back, we're talking about serious sign up bonuses that
Speaker 1: you get, serious protections that that you get as a
Speaker 1: consumer when you use those cards. But secondly, and you
Speaker 1: touched on the show, but I mean I have not
Speaker 1: paid a single sense and interest ever to a credit
Speaker 1: card company, like I know myself in same with you.
Speaker 1: And so because of that, these are benefits that we
Speaker 1: have a little more flexibility, a little more freedom around.
Speaker 1: We're not as concerned about the temptation to spend. For us,
Speaker 1: it's just not something we have to wrestle with and
Speaker 1: when you have a bunch of debt, how you go
Speaker 1: about paying that debt off is another rule that you
Speaker 1: often hear. For instance, the debt snowball method is the
Speaker 1: most effective way to pay down debt. Well, not necessarily right,
Speaker 1: That's a rule that you often hear. And we actually
Speaker 1: did an episode about the debt snowball approach versus going
Speaker 1: the avalanche route, and we kind of came down somewhere
Speaker 1: in the middle. The avalanche route is best for paying
Speaker 1: the least overall amount in interest, but it doesn't have
Speaker 1: the helpful psychological component of picking off your smallest debts quickly,
Speaker 1: which gives you momentum. And so we kind of prefer
Speaker 1: the both and approach, you know. And so if the
Speaker 1: interest rates are similar, go with the smallest balance, because
Speaker 1: then you'll, you know, realize some of that psychological momentum,
Speaker 1: and you clear a hurdle by knocking off a balance
Speaker 1: that's really small, and it's like, exactly gives you the
Speaker 1: fortitude to keep pressing on. Sure, Yeah, but if you've
Speaker 1: got a car loan, say maybe just at four percent,
Speaker 1: but then you also have credit card debt, say at nineteen,
Speaker 1: you'd be crazy to pay off that car Loan first,
Speaker 1: and so that's an instance where you need to actually
Speaker 1: look at what you've got going on. There is no
Speaker 1: clear black or white answer when it comes to a
Speaker 1: lot of things in life, including when it comes to
Speaker 1: paying down your debt. And so those are a few
Speaker 1: rules that effect not only our lifestyle, but how does
Speaker 1: that we go about paying uh and interacting with our debts?
Speaker 1: And so, Joe, we've got a few other areas, a
Speaker 1: few other ways that we handle our money, and we're
Speaker 1: gonna talk about some of the rules that pertain to
Speaker 1: those aspects of our personal finances. And we'll get to
Speaker 1: those right after this break. All right, we are back,
Speaker 1: and Matt, let's keep talking about some of the crappier
Speaker 1: personal finance rules and how we can break them. I'm
Speaker 1: trying to think of have you done the milk crate challenge?
Speaker 1: I've seen that going around. We want to break them.
Speaker 1: I haven't in the milk crates? Well, first of all,
Speaker 1: where do people find all these milks? Either? I don't
Speaker 1: know where do you get? Like? First, I mean, I
Speaker 1: didn't think those were what am I thinking of? I'm
Speaker 1: thinking of like the old post office mail crates? Remember
Speaker 1: I used to work an be safer, I think than well, no,
Speaker 1: those were made of like this kind of plastic thing.
Speaker 1: But even still your hang like they're like this is
Speaker 1: a government property. Like where do these people get all
Speaker 1: these milk crates? I guess a lot of folks working
Speaker 1: at all they or something. Yeah maybe, but uh they
Speaker 1: got that hook up from from leetle. We want to
Speaker 1: smash them. These personal finance rules, the way people are
Speaker 1: specting their bodies as they fall off this car pile
Speaker 1: of milk rates. But yeah, we just talked about some
Speaker 1: of the rules that shape our lifestyle, how we pursue
Speaker 1: the meaningful events in our lives, and how sometimes those
Speaker 1: hold us back from doing the things that we want
Speaker 1: because there are these ingrained rules that we listen to,
Speaker 1: and the same when it comes to debt and debt payoff.
Speaker 1: We believe these things without questioning them, and if we
Speaker 1: were to question them, we would be able to maybe
Speaker 1: proceed in a different way that would be better for
Speaker 1: our lives. Um. Now, let'shift to like saving an investing
Speaker 1: mat and some of the rules that define those areas
Speaker 1: that we think are off base, and let's specifically talk
Speaker 1: about emergency funds for seconds. There are quite a fuel
Speaker 1: rules that we think have some been to them in
Speaker 1: this arena. You know, you and I we've done our
Speaker 1: fair share of talking about emergency funds and the priority
Speaker 1: that they should take in your financial life. We really,
Speaker 1: we think they're important. They provide a lot of stability
Speaker 1: for people. It's nice to know that if the crap
Speaker 1: hits the fan, that you've got money in the bank
Speaker 1: account to back you up. But there are more ways
Speaker 1: than just one to skin a cats And the rule
Speaker 1: that many financial experts give is that you should have
Speaker 1: six months of savings on hand to combat a potential emergency.
Speaker 1: Some go further and they make their rule twelve months
Speaker 1: of cash on hand, which, honestly, I feel like it's
Speaker 1: actually kind of demoralizing for most people because are like,
Speaker 1: how in the world am I ever going to get
Speaker 1: to that? I mean, I remember thinking that in my
Speaker 1: early twenties, like, that's a lot of money. That feels impossible.
Speaker 1: I've got all these other things to do. What you're
Speaker 1: saying is going to take me eight years to achieve.
Speaker 1: But but yeah, there are other ways that you can
Speaker 1: have access to emergency cash without running up the credit cards, right,
Speaker 1: and maybe we should consider some of these other avenues
Speaker 1: as opposed to just having ridiculous amount of money in
Speaker 1: savings totally. Yeah, So having a helock a home equity
Speaker 1: line of credit as a backup, that's one way to
Speaker 1: make this rule more of a helpful recommendation that you
Speaker 1: can do without if you so choose. Helocks are great
Speaker 1: backup emergency funds because they usually cost zero dollars to
Speaker 1: set up and you don't pay interest on that money
Speaker 1: unless you make a withdrawal. So this is only available
Speaker 1: for homeowners obviously, but it could be worthwhile to have
Speaker 1: a helock backup in case just kind of sitting there
Speaker 1: in the wings. That way you can retain a smaller
Speaker 1: emergency fund. But now that this is only something that
Speaker 1: we would recommend if you're trying to invest more of
Speaker 1: your money. Basically want you to do smart things with
Speaker 1: your money, not have less cash on hand so that
Speaker 1: you can blow that money, so that so that you
Speaker 1: can spend it in an absorb it into your life
Speaker 1: trying to go to the heat. So I'm gonna blow
Speaker 1: my emergency fund and have the helock is the backup. Yeah,
Speaker 1: And and even with that, we still think that a
Speaker 1: good minimum emergency fund goal of three months worth of
Speaker 1: expenses on hand uh is important, But even still, it's
Speaker 1: worth mentioning that he locks. And we saw this with
Speaker 1: a pandemic last spring, but some banks actually stopped offering
Speaker 1: those products because their risk here. Uh. And so it's
Speaker 1: important to keep that in mind that they may not
Speaker 1: always be available. If you're like, you know what, I'm
Speaker 1: just gonna get myself a new helock, because it's important
Speaker 1: to keep in mind too that sometimes they only are
Speaker 1: available to you for like five or ten years, at
Speaker 1: which point they basically expire, so they kind of have
Speaker 1: a shelf life. And if you'd been counting on that
Speaker 1: helock as your emergency fund and it kind of disappeared
Speaker 1: and all of a sudden, you might be sitting without
Speaker 1: that money in the bank, uh and without a product
Speaker 1: to rely on if you needed it. Yeah, And and
Speaker 1: that another question that we get when it comes to
Speaker 1: emergency funds. People want to know if they can invest it,
Speaker 1: and usually you know, we're saying no, no, no no no.
Speaker 1: For in particular or three months worth of expenses, that
Speaker 1: money needs to stay in your same news account. For us,
Speaker 1: that is a hard and fast rule. But when it
Speaker 1: comes to that six to twelve month realm that a
Speaker 1: lot of other people talk about. We think that you
Speaker 1: can invest some of that emergency fund and and and
Speaker 1: in particular, it needs to be in a wrath I
Speaker 1: RA that allows um it can act as another buffer,
Speaker 1: which can let you roll with that smaller bucket of
Speaker 1: savings as opposed to feeling like you have to have
Speaker 1: this fully funded, enormous emergency fund. And if you've been
Speaker 1: maxing out a wrath over let's say the last five years,
Speaker 1: then this should provide you with a really nice backstop,
Speaker 1: allowing you to feel a whole lot more comfortable having
Speaker 1: less cash in your account. It's still ideal, of course,
Speaker 1: to not take money out if you're off like, uh,
Speaker 1: you want to tap your savings money in the case
Speaker 1: of an emergency first, not the money you have invested
Speaker 1: in the wrath. In a perfect world, you put money
Speaker 1: in the wrath and you never touch it until you
Speaker 1: reach retirement age. UM. You know when you're whether you're
Speaker 1: still working or not. Uh. And and then yeah, if
Speaker 1: you need to tap those those roth funds, it's important
Speaker 1: to only take out the contributions, not the earnings, because
Speaker 1: that's what you have access to tax and penalty free.
Speaker 1: But a wrath that you have been consistently funding, uh,
Speaker 1: and it's been growing across the years can allow you
Speaker 1: to skirt that hefty fun rule unspent HSA dollars. That's uh.
Speaker 1: That's another place math that people can look to. I
Speaker 1: think that those that money that's been growing consistently over
Speaker 1: the years can provide similar peace of mind, allowing you
Speaker 1: to have less money in savings. And you've got the
Speaker 1: receipts for some of those healthcare procedures that you've had done,
Speaker 1: yet you've left that money growing in the hs A. Well,
Speaker 1: when an emergency comes along, you can grab that money
Speaker 1: from the hs A and pull it out. Um. They're
Speaker 1: just like this really flexible account that, if used well,
Speaker 1: can act as a helpful fund backup. So yeah, the
Speaker 1: six to twelve month figure, Like I get why people
Speaker 1: say that it's really hard for most people to achieve.
Speaker 1: And using some of these other ways to kind of
Speaker 1: use as a backstop for a smaller e fund I
Speaker 1: think can make a lot of sense. That's right. And
Speaker 1: so when it comes to so that's saving, right, we're
Speaker 1: talking about emergency funds. When it comes to investing, a
Speaker 1: rule that we often hear is you should be saving,
Speaker 1: you should be investing of your paycheck. And this is
Speaker 1: actually a rule that you've heard on this show before.
Speaker 1: Because we're gonnareak own rules. We we kind of are
Speaker 1: here like the height of anarchy. I appreciate that about us. Uh,
Speaker 1: you know, we believe that this is a great goal
Speaker 1: for most folks to aim for, because only putting a
Speaker 1: side ten percent of your income over your entire working life,
Speaker 1: that probably isn't going to be quite enough to provide
Speaker 1: the financial security that we think most folks should be
Speaker 1: aiming for. But yeah, we're gonna break our own rule here.
Speaker 1: Let's say that you're one of those overachieving coast firefolks
Speaker 1: who's been maxing out the retirement accounts for a decade
Speaker 1: or longer, maybe even you know, maybe potentially you've been
Speaker 1: saving and investing, say fifty percent of your salary. Uh
Speaker 1: So now you might be asking, can you cut back
Speaker 1: save only five to ten percent of maybe what you're
Speaker 1: bringing in? Sure, you've already done the hard work of
Speaker 1: putting aside massive amounts of earnings earlier in your life,
Speaker 1: and so putting aside fifteen percent of what you make
Speaker 1: each year is a great goal, but doing a little
Speaker 1: more or less to sending on your specific near term
Speaker 1: goals is okay as well. And again I don't want
Speaker 1: to kind of gloss over the saving more side of it.
Speaker 1: Percent is great, but if you can save five percent
Speaker 1: of your income, that's even better. We don't want you
Speaker 1: to think that just because there's this rule of oh,
Speaker 1: you should be shooting for, that doesn't mean you can't
Speaker 1: save more. You should be, you know, shooting for at
Speaker 1: least fifteen percent. Yeah, we don't want to set the
Speaker 1: bar too low for how the money listeners who are
Speaker 1: energized to save more and the ultimately what happens Matt.
Speaker 1: The more you're able to save at younger ages, the
Speaker 1: more options you open up for yourself later on down
Speaker 1: the line. And for many of us, we don't know
Speaker 1: what the future holds like. We don't know what it's
Speaker 1: gonna look like family wise, we don't know how our
Speaker 1: goals are going to change. A job that we like
Speaker 1: now might be a job that we don't like a
Speaker 1: few years from now, And so the more we save,
Speaker 1: the more flexibility we really are setting ourselves up for
Speaker 1: later on down the line. Another rule when it comes
Speaker 1: to investing is don't buy single stocks and don't speculate,
Speaker 1: and in particular, UH, I think people are saying don't
Speaker 1: speculate on cryptocurrency right now, and you'll you'll hear this
Speaker 1: rule a lot, and it's a rule that we mostly
Speaker 1: like and also follow. But breaking this rule in small
Speaker 1: ways is fine and actually potentially a smart move because
Speaker 1: if you keep those investments, the super speculative or single
Speaker 1: stock investments, to five percent of your portfolio or less,
Speaker 1: you know, blowing off some steam by doing small amounts
Speaker 1: of trading UH. In that way, that can be smart
Speaker 1: if it allows you to stay the course with the
Speaker 1: massive chunk of your money and sticking to index funds,
Speaker 1: which is our favorite approach to investing with of your
Speaker 1: long term dough Sometimes just dabbling with with that can
Speaker 1: actually provide the mental fortuity to kind of stick to
Speaker 1: it with the other stuff, do the boring stuff. If
Speaker 1: you have just like a little bit that that exposure
Speaker 1: to the investing excitement that usually actually leads to regret
Speaker 1: for most people. UM. But it is one of those
Speaker 1: ways I think which you can learn a lesson if
Speaker 1: if you're doing too much of it. UM. But doing
Speaker 1: it in small amounts, I think, really isn't that big
Speaker 1: of a deal. And so that's a rule that it
Speaker 1: can be broken, at least, you know, in a small way,
Speaker 1: that's right. Another rule that we've often heard is that
Speaker 1: if you love your kids, you'll start saving for their college.
Speaker 1: Now that's why I tell my kids that I don't
Speaker 1: love them, because I'm not saving for your college. You know.
Speaker 1: Uh no, this rule was definitely made to be broken
Speaker 1: because there are so many ways to pay for college,
Speaker 1: but there are only a couple of ways when it
Speaker 1: comes to funding your retirement, and so this should be
Speaker 1: a much lower priority for most parents. You know. All
Speaker 1: that to say, we're not anti five accounts, but we
Speaker 1: do think that you should only open one if you're
Speaker 1: in money gear number seven and you're already crushing it
Speaker 1: with your own personal money goals. And remember that not
Speaker 1: funding their college costs from the day that they're you know,
Speaker 1: that they're born. That does not mean that you love
Speaker 1: them any less. So I can start telling my kids
Speaker 1: contrary to what you love, saying yeah, yeah, you can
Speaker 1: look good. Okay, all right, I'll tell him what I
Speaker 1: get home, tell him tonight. They'll be so glad to
Speaker 1: hear it. Uh and yeah, so I but I agree, Matt.
Speaker 1: I think that's another money year number seven thing. You know,
Speaker 1: we talked about paying off the mortgage, saving for your
Speaker 1: kids college, like those are decent uh olds to have,
Speaker 1: But there are goals that you have once you reach
Speaker 1: an immense amount of financial stability, not earlier on in
Speaker 1: the process. Um. And it's not a hard and fast
Speaker 1: rule either. You're more than welcome once you get to
Speaker 1: money your seven to do all sorts of other things
Speaker 1: instead of saving for your kids college if you want,
Speaker 1: or saving and investing at all. I mean, if you're larger,
Speaker 1: money goals have to do with spending a lot more money.
Speaker 1: That's up to you. You know, as long as you've
Speaker 1: taken care of those other steps, you're essentially you're kind
Speaker 1: of free to do whatever you want exactly. Yeah, and
Speaker 1: uh yeah, there's some financial rules that feel like they're
Speaker 1: a bit more rigid than others. Like earlier we were
Speaker 1: talking about the roth IRA and uh you might know
Speaker 1: that in one a single tax filer needs to have
Speaker 1: a modified adjusted gross income of a hundred forty dollars
Speaker 1: or less in order to be able to contribute to
Speaker 1: one and married filing jointly, You're Maggie needs to be
Speaker 1: less than two eight thousand dollars, right, But even when
Speaker 1: it comes to the I R s, there are ways
Speaker 1: that you can bend and actually break these rules. Make
Speaker 1: sure you kind of know the tax rules are around
Speaker 1: the backdoor wrath, but there are no income limits when
Speaker 1: it comes to doing these conversions. Um, and yeah, so
Speaker 1: this is what people refer to commonly as the backdoor wrath.
Speaker 1: And uh, yeah, this is how you would go about
Speaker 1: allowing your contributions and earnings to grow tax free. So
Speaker 1: there's this rule that we've all heard, Matt that says
Speaker 1: if you make up a certain amount of money, you
Speaker 1: can't contribute to the roth ira, which is an account
Speaker 1: that you and I we love and we've sung the
Speaker 1: praises of over the years. But it turns out that
Speaker 1: that rule can be broken, um, if you're doing a
Speaker 1: backdoor rath, which is not nearly as publicized and not
Speaker 1: many people know about it, but it allows you access
Speaker 1: to putting money into a wrath account, which can be
Speaker 1: really really helpful from a tax planning perspective. You're just
Speaker 1: gonna want to make sure you know all the details
Speaker 1: before you jump in. So hopefully we just smashed a
Speaker 1: few investing rules maybe that you had in your mind
Speaker 1: that aren't as helpful as maybe previously thoughts. We've got
Speaker 1: more restricting preventing you from doing something that you should
Speaker 1: be doing with your money when you've really wanted to.
Speaker 1: But you're like the rule series, and yeah, we want
Speaker 1: to give you the freedom to kind of to fight
Speaker 1: back against some of those limiting rules. But yeah, let's
Speaker 1: get to some more rules map in particular about spending
Speaker 1: and earning. We'll get to some rules that are maybe
Speaker 1: holding us back in those realms right after this. All right,
Speaker 1: we're back from the break. We're talking about some of
Speaker 1: the different financial rules that we come across and why
Speaker 1: it is that we think you should be breaking these
Speaker 1: rules and jel you know, I was thinking about why
Speaker 1: it is that we're drawn to rules, and it's because
Speaker 1: it's easy. It's easy to point to something that you
Speaker 1: know you are allowed to do. It's either yes or no.
Speaker 1: It's binary rights, yes or no, black or white, correct
Speaker 1: or incorrect. Uh, And folks don't like landing in that
Speaker 1: in between no man's land, the shades of the land
Speaker 1: of nuance and that's what we try to do honestly
Speaker 1: with our show overall, but specifically with this episode where
Speaker 1: we're kind of diving into the additional questions that should
Speaker 1: come after you hear one of these rule is where
Speaker 1: it's just like, well, maybe like you should also consider
Speaker 1: this in this there are other ways to accomplish these
Speaker 1: goals that we're trained to achieve. Yeah, and let's be
Speaker 1: honest to the people that the voices they get amplified
Speaker 1: the most in our culture are the black and white
Speaker 1: lest they are the most extremes. Um. Really in the
Speaker 1: world of politics, in the world of money, like you're
Speaker 1: gonna take it, there they are. And so the people
Speaker 1: that we hear from you you feel you're almost like
Speaker 1: forced into one of these two camps. Um. But really,
Speaker 1: when you look at even like political statistics, most Americans
Speaker 1: identify as independents, Like they don't identify as being fully
Speaker 1: with one party or the other. They don't identify on
Speaker 1: the extremes. And I think in money it's the same.
Speaker 1: It's the same way. There are a lot of people
Speaker 1: who hear maybe the more stringent types are the really
Speaker 1: incredibly loose liberal types with money, and they're like, I don't.
Speaker 1: I don't know, man, Neither of those really fits me.
Speaker 1: And so while we might not be the most amplified voices,
Speaker 1: like we're going to use our platforms to say no,
Speaker 1: no, no no, there is a gray area here. Some of
Speaker 1: these rules are made to be broken, but you still
Speaker 1: need to be smart with your money. That's right. We're
Speaker 1: bringing that moderate, nuanced conversation to personal finance to money.
Speaker 1: Hopefully we'll see a trickle down effect. That's another political reference,
Speaker 1: like the Rossbaro of personal finance. Alright, let's talk about
Speaker 1: some classic spending rules that you offer for our gen
Speaker 1: Z listeners. I don't think they know what. Maybe link
Speaker 1: to like his Wikipedia page in our show notes. Uh,
Speaker 1: but we wanted to talk about some different spending rules
Speaker 1: that we often hear about and the personal finance realm,
Speaker 1: and we're gonna bust up some of these rules. The
Speaker 1: first one we're gonna tackle is that you must have
Speaker 1: a budget. Now, of course, I specifically I am a
Speaker 1: huge fan of budgets, but that doesn't mean that everyone
Speaker 1: must have one. Most folks, I know what pains you
Speaker 1: even to say that. Okay, so it really does pain
Speaker 1: me to say that because I kind of feel that
Speaker 1: anybody would benefit from a budget because someone who's maybe
Speaker 1: an oversaver, they're incredibly frugal, Well, it could free them
Speaker 1: up to spend a little bit more, a little more freely,
Speaker 1: with a little more intention. And somebody who is an
Speaker 1: overspender they don't have, you know, they've got a lot
Speaker 1: more month than they do money. I think if they
Speaker 1: were to budget, then they're going to be able to
Speaker 1: maybe achieve some of those financial goals. And I think
Speaker 1: that's for the overwhelming majority of folks, But I do
Speaker 1: think that there are some naturally frugal folks who don't
Speaker 1: necessarily have to be beholden to a budget. Uh. And
Speaker 1: so if there's someone out there who's investing a healthy,
Speaker 1: good chunk of money in their retirement accounts automatically, maybe
Speaker 1: you've got a healthy savings account, maybe you're naturally averse
Speaker 1: to spending uh an overwhelming amount of money, well you
Speaker 1: might fit into that category of a person who can
Speaker 1: stop budgeting. Especially I think if you find it to
Speaker 1: be a painful process and instead you're able to just
Speaker 1: naturally achieve the goals that you're trying to achieve, your
Speaker 1: naturally able to spend with a plan without a written plan,
Speaker 1: then I think that's the kind of person who doesn't
Speaker 1: have to have a budget. But again that being said,
Speaker 1: I I do think that I think most folks could
Speaker 1: benefit one way or the other from having a written budget. Yeah,
Speaker 1: and it is a rule that can be broken, but
Speaker 1: it's I agree, Matt, I think it is a helpful
Speaker 1: tool for most people. I was listening to Front of
Speaker 1: the Show Daniel Crosby talking about budget re cently, and
Speaker 1: he's one of those guys who's like, I can't do it,
Speaker 1: and it just I hate it, and so I'm not
Speaker 1: going to. And he can afford not to because he's
Speaker 1: done really good things with his money over a long
Speaker 1: enough period of time that he doesn't he doesn't have
Speaker 1: to pigeonhold himself into the classic budgeting trope that he
Speaker 1: has to has to have one of those in his life.
Speaker 1: And so, you know, I appreciate that I used to
Speaker 1: roll without a budget until I got married and then
Speaker 1: it was like, actually it's a necessary communication tool for
Speaker 1: my wife and I. But it is one of those
Speaker 1: things where I agree it is a rule that people
Speaker 1: feel like, even if they're really really good with money,
Speaker 1: that they have to do and we think there are
Speaker 1: ways that you can make budgeting less miserable to We've
Speaker 1: talked about that before and we will continue to talk
Speaker 1: about why budgeting does not have to be an awful
Speaker 1: thing in your life. But also know that it is
Speaker 1: not a requirement to be a part of the personal
Speaker 1: finance And another spending role that that constantly gets thrust
Speaker 1: at people is that they should always beginning a deal.
Speaker 1: This used to be me too, write like I've talked
Speaker 1: about this on the show, that paying full price was
Speaker 1: kind of anathema to who I was. Like it was,
Speaker 1: I was like, there's there's no way I could ever
Speaker 1: pay full price for anything, And yeah, I took deal
Speaker 1: hunting to the extreme. I still personally prefer not to
Speaker 1: pay full price for something, Like I I hear some
Speaker 1: people in the personal financi world say I only pay
Speaker 1: full price for things because it helps me not fall
Speaker 1: prey to this lifestyle of like deal hunting. Um, and
Speaker 1: I get that, I understand it, But I feel like
Speaker 1: I've been able to realize the error of my deal
Speaker 1: obsessed ways and like not not do as much deal
Speaker 1: hunting and I actually keeping it to a minimum because yeah,
Speaker 1: really the best deal isn't off. It is getting something
Speaker 1: in a hundred percent off by not getting that thing
Speaker 1: at all, if I'm by avoiding it altogether. And like,
Speaker 1: you only get that when you stop shopping. When you
Speaker 1: shop lass, buying fewer, nicer things also can lead to
Speaker 1: more enjoyment of those things. I've realized that too, is
Speaker 1: that I just had more things, too many things, and clutter. Uh.
Speaker 1: And yeah, so if you're you're living by the rule
Speaker 1: the big discounts are king, then you will likely need
Speaker 1: to kick that one to the curb because it's probably
Speaker 1: hurting more than it's helping you. If you want, we
Speaker 1: can set up some sort of accountability and I can
Speaker 1: see how often you're actually visiting slick deals or or
Speaker 1: deal news. Let's do it. If you want me to
Speaker 1: really hold you accountable. Uh, let's talk about splurges. Man. Uh.
Speaker 1: There's this rule out there that if you're in debt,
Speaker 1: you have to stop spending on anything that you enjoy.
Speaker 1: And again, let's let's go ahead and side with that
Speaker 1: rule here for a second. Debt is not ideal. We
Speaker 1: do encourage how the money listeners to create a plan
Speaker 1: to attempt to pay down their debt quickly. You know,
Speaker 1: whether it's the snowball or the avalanche approach, we want
Speaker 1: you to the middle of the road approach that we love,
Speaker 1: oh yeah, both and approach. We want you to choose
Speaker 1: just the approach that's gonna help you to get there faster. Uh.
Speaker 1: And one of the reasons for that is because debt
Speaker 1: actually makes us dumber. We've talked about the studies that
Speaker 1: show that the stress that debt causes to our bodies
Speaker 1: has an impact on our i Q. It's something like
Speaker 1: twelve by que points that you lose when you're you know,
Speaker 1: overwhelmed with that exactly. So the quicker that you're done
Speaker 1: with that, the better off that you're going to be
Speaker 1: from a mental health perspective. And so that means getting
Speaker 1: rid of it QUI. That should be a top priority.
Speaker 1: But if it took you years to get into that
Speaker 1: debt conundrum in the first place, it will likely take
Speaker 1: you years to get out of it. And it is
Speaker 1: hard to live an austere monastic existence for years and years.
Speaker 1: And so make sure that you still include a few
Speaker 1: important spending items within your budget so that you don't
Speaker 1: get burned out while you're pursuing debt elimination, you still
Speaker 1: want to have those craft beer equivalents in your life, uh,
Speaker 1: to kind of carry you over from day to day,
Speaker 1: from week to week, whatever it is that you're gonna
Speaker 1: splurge on just a little bit. Uh. And you can
Speaker 1: even kind of set those up as little rewards. Maybe
Speaker 1: as you're chiseling away or as you're chipping away at
Speaker 1: your debt, you can have these little rewards that spur
Speaker 1: you on to achieve your goal even faster, no doubt, man.
Speaker 1: All right, yeah, and there are also some uh you
Speaker 1: talked about spending rules. Let's talk about some well defined
Speaker 1: rules in the arena of earning more money and that
Speaker 1: we that we really kind of take as stock or standard.
Speaker 1: But there's room for pushback on these rules too. And
Speaker 1: I think, Matt, one of the biggest rule was out
Speaker 1: there is that you need to go to college in
Speaker 1: order to get a high paying job. And pretty classic rule.
Speaker 1: And that is a classic rule, right, parents told me
Speaker 1: definitely fed me that rule like my entire I mean,
Speaker 1: I think ever since I was a kid, I don't
Speaker 1: think I knew there were alternatives to go into college. No,
Speaker 1: it was I mean basically, Okay, so I will say
Speaker 1: my dad. We did have a conversation I think when
Speaker 1: I was like a sophomore or something like that in
Speaker 1: high school, and he's just like, you know, you don't
Speaker 1: have to go to college. But mom would be devastated.
Speaker 1: She would stop loving it. And You're like, I guess
Speaker 1: I'll do. You totally put that out there, and I
Speaker 1: was just like, okay, well, I mean college sounds school.
Speaker 1: You know, you see movies about college. I was kind
Speaker 1: of I think more into it, like more into it
Speaker 1: from like a lifestyle standpoint. It's just like, yeah, that's
Speaker 1: just what all my friends are doing. I didn't have
Speaker 1: a whole lot of drive. I would say that's the
Speaker 1: high school. I'm like, everybody else is doing it. I'll
Speaker 1: do it too. You're the fault of the crowd kind
Speaker 1: of guy. What definitely was then, Well, yeah, like that
Speaker 1: the last decade though, really, since we went to college,
Speaker 1: we've kind of seen this rule disintegrate before our very eyes,
Speaker 1: like the reality that getting a college degree automatically equates
Speaker 1: to a high paying job. It's not the case like
Speaker 1: it used to be. And it's not like getting an
Speaker 1: advanced degree doesn't still work out for lots of folks,
Speaker 1: but it's just the value proposition has changed in a
Speaker 1: big way. It's not a slam dunk um like it
Speaker 1: was when we were younger, and in particular our parents.
Speaker 1: Generation to right and COVID has likely hurt that value
Speaker 1: proposition even more. Like you might not be getting the
Speaker 1: same experience on a college campus these days, and in
Speaker 1: all likelihood you're not. And so yeah, it's more important
Speaker 1: than ever to do the math yourself and to run
Speaker 1: the numbers with your kids before blindly believing that college
Speaker 1: is the essential move and that it of course it
Speaker 1: makes sense, um, And it's core the decision to go
Speaker 1: to college or not is an investment decision. And not
Speaker 1: that there aren't lifestyle benefits right to going um, But
Speaker 1: if it means inundating your kids or yourself with copious
Speaker 1: amounts of debt that you can never pay off, then
Speaker 1: it's not worth even that social experience that you were
Speaker 1: able to gather. You can get that in other ways. Uh.
Speaker 1: And it's also important to remember that blue collar jobs
Speaker 1: are seeing a revival right now. They're seeing higher amounts
Speaker 1: of pay and rightly so, because we haven't incentivized people
Speaker 1: to go in that direction. We talked about more about
Speaker 1: that in episode two seventy seven with Ken Rusk, and so, yeah,
Speaker 1: if you kind of feel inclined towards working with your
Speaker 1: hands anyway or being entrepreneurial, don't assume that you have
Speaker 1: to go to college. I mean, we still think it's
Speaker 1: a great idea for a lot of people. And even
Speaker 1: in that decision, you would be really smart. So you're
Speaker 1: getting a degree that's gonna pay off for you and
Speaker 1: so that you're not taking on more death than you're
Speaker 1: gonna be able to handle. But yeah, that rule that
Speaker 1: says college equals great job just doesn't hold water the
Speaker 1: way it used to. That's right, man. It'll be really
Speaker 1: interesting to see where things are when our oldest kids
Speaker 1: start going to college, to see if it's see if
Speaker 1: things shift honestly between now and then, or if they
Speaker 1: kind of continue um at the rate that they've been.
Speaker 1: We're talking about earning money and so what kind of
Speaker 1: While we're on that note, let's talk about replacement of income.
Speaker 1: Let's talk about life insurance. Uh, And the rule that
Speaker 1: you'll often hear when you're shopping around for life insurance
Speaker 1: is that you need to have a policy that can
Speaker 1: cover ten time is your income which you know, that's
Speaker 1: not a bad rule, but it certainly is not one
Speaker 1: that you have to follow. Joe and I, we actually
Speaker 1: both just got new policies, new life insurance policies. H
Speaker 1: And many insurance salespeople they're gonna kind of frown when
Speaker 1: you don't have a policy that's ten x your annual income. Yeah,
Speaker 1: they will try to convince you. Yeah, they will. I
Speaker 1: mean it's in their best interest to kind of upsell
Speaker 1: you a little bit. But there are other factors that
Speaker 1: you can take into accounts, things like other sources of income.
Speaker 1: That's real estate for you and me, Joe. Also, how
Speaker 1: close are you are to actually achieving financial independence? Uh,
Speaker 1: some of the different responsibilities that you have, depending on
Speaker 1: the number of kids you have, the different liabilities, these
Speaker 1: are all things that you want to keep in mind.
Speaker 1: Not You don't just want to blindly follow the rule
Speaker 1: of oh, you must have ten x your current income.
Speaker 1: And so if you're further along that road, say towards
Speaker 1: financial independence, you know there's no necessity to stick hard
Speaker 1: to this ten next income rule. And also just remember
Speaker 1: to having some life insurance coverage is better than just
Speaker 1: not having anything at all. Yeah, And when I think
Speaker 1: sometimes people hear the ten X and they get the
Speaker 1: price quotes and they're like, oh, that's it's gonna be
Speaker 1: a bigger chunk of my monthly budget than I wanted
Speaker 1: it to be, and so they settle for, you know,
Speaker 1: a smaller policy. And I think having something, you can
Speaker 1: always get another policy down the road, and you can
Speaker 1: do what's called laddering, right, And so if you're turned
Speaker 1: away by the price, although term life insurance incredibly cheap, like,
Speaker 1: hopefully you're not turned away by the price because because
Speaker 1: it really shouldn't be too terribly expensive. But but you
Speaker 1: might say, you know what, I'm gonna get half as
Speaker 1: much as the life insurance industry says I should get,
Speaker 1: and I will have some coverage at least, because you're right,
Speaker 1: something is better than nothing. But yeah, it rules, Matt, infummation.
Speaker 1: Rules can be great and and you're right, they often
Speaker 1: help point us in the right direction. Without rules, we
Speaker 1: can be lost and breaking rules without giving any thought
Speaker 1: as to why you're doing so. Uh, it's really it's
Speaker 1: more of a recipe for some catastrophic mistakes. And uh, yeah,
Speaker 1: but I think there's like the letter of the law,
Speaker 1: and then there's the spirit of the law, Matt Right.
Speaker 1: For instance, going back to that speed limit example, most
Speaker 1: policemen are not supposed to pull you over unless you're
Speaker 1: going ten miles over the speed limit. Right. Uh, it
Speaker 1: is this limit that you're supposed to adhere to, But
Speaker 1: there's a grace range for you even in that. Uh.
Speaker 1: And yeah, and also there's something to be said for
Speaker 1: driving with the flow of traffic. And as you grow
Speaker 1: in your financial education, you're likely going to find other
Speaker 1: points in time where you can bend or break a
Speaker 1: rule that you've heard because your specific situation really it
Speaker 1: needs a different tactic. And so it's important to know
Speaker 1: the fundamentals before you start improvising, right, Like a like
Speaker 1: a jazz musician, before they can get crazy with with
Speaker 1: their music, they have to know their scales and they
Speaker 1: have to know them really well. But knowing that it's
Speaker 1: okay to break some of these rules, I think it
Speaker 1: can be freeing to And so yeah, our advice to
Speaker 1: you guys just to go break some of these rules,
Speaker 1: like don't don't go haywire. But but some of these
Speaker 1: rules really, um, they're helpful to know, but then they're
Speaker 1: they're not meant to be followed blindly. That's right, man,
Speaker 1: Let's go ahead and get back to the beer that
Speaker 1: you and I enjoyed on this episode, which was called
Speaker 1: Indefinite Staycation, and this was a barrel aged fruited sour
Speaker 1: ale by dog fish Head. Before we talk about the beer,
Speaker 1: hold this bottle. Did you realize how heavy this thing is?
Speaker 1: That is not a normal weighted glass bottle? And I
Speaker 1: guess it's because since this was one that was I
Speaker 1: assume bottle conditioned. Uh, and it was corked and caged.
Speaker 1: There may be worried about the pressure. I don't know,
Speaker 1: but it is like twice as thick as a normal bottle.
Speaker 1: It's just a little guy, but he's got weight that's
Speaker 1: at least twice the size of what it looks like
Speaker 1: it should be. I just kind of caught me off
Speaker 1: guard here when I picked it up. But what were
Speaker 1: your thoughts on this actual beer? First? I like the name,
Speaker 1: except for it feels like indefinite stacation, feels like our
Speaker 1: lives That is not right now. Yeah, I want indefinite
Speaker 1: vacation now. But yeah, I think this this beer was
Speaker 1: worth the two year white that it took to make
Speaker 1: this beer. This beer was aged for over two years
Speaker 1: in French oak and the it had I don't think
Speaker 1: we mentioned it had blackberries and wild main blueberries in
Speaker 1: this beer, and so it had just delicious levels of fruitiness,
Speaker 1: delicious levels of like oak presents a little bit of funkiness.
Speaker 1: I love fruited sours, and this one goes in like
Speaker 1: the pantheon of the greats of great fruited hours. I
Speaker 1: think it's it was really delicious. It was really good, dude.
Speaker 1: I agree. It was incredibly acidic. I feel like that's
Speaker 1: the first thing I noticed when I took a took
Speaker 1: my first sip, Like I noticed the acid, and then
Speaker 1: kind of and then right after that, I noticed like
Speaker 1: the wood notes you kind of have, like those like
Speaker 1: the sharp sour, and then it fades into the kind
Speaker 1: of the fruit sweetness going on. That sweetness really kind
Speaker 1: of broke through there, I feel like on the end um.
Speaker 1: And you know, earlier I was telling you the story
Speaker 1: about how Kit and I went we went hiking. Well,
Speaker 1: during one of our hikes, we actually like near you know,
Speaker 1: at the top of like near Mount Mitchell, we came
Speaker 1: across a bunch of wild blueberries and blackberries. I'm not
Speaker 1: even kidding, actually have a maybe I'll post another photo
Speaker 1: make your own beer. But well, here's the thing, Mount Mitchell.
Speaker 1: It's the highest peak east of the Mississippi. And so
Speaker 1: Kate was saying that she's pretty sure that these are
Speaker 1: the same kind of blueberries that grow wild in Maine.
Speaker 1: Uh and because it was at such a high elevation.
Speaker 1: Normally you don't see these blueberries in North Carolina, but
Speaker 1: where we were hiking, you do. And so I I
Speaker 1: feel like it came full circle. But yeah, this is
Speaker 1: a really great beer. And thanks again to Ryan for
Speaker 1: donating this one to the show. Yeah, thanks Ryan, appreciate
Speaker 1: your man, and we appreciate doctors shed Man. They've been
Speaker 1: doing making good beer for decades now. So all right,
Speaker 1: that's gonna do it for this episode. For folks who
Speaker 1: want the show notes with any links, including that Ross
Speaker 1: Pero Wikipedia pagell we'll put that on there. For all
Speaker 1: you gen zeers who don't remember who he was, you
Speaker 1: can find those up on our website at how to
Speaker 1: money dot com. That's right, And if you have not
Speaker 1: subscribed to the show yet, we would love it if
Speaker 1: you mashed subscribe so you don't miss any future episodes.
Speaker 1: If you haven't left us a review yet, we would
Speaker 1: greatly appreciate that, especially over at Apple Podcast. And you
Speaker 1: can also take your grandma's phone and mash subscribe to
Speaker 1: she wants to hear us talk about craft beer. She
Speaker 1: does at the end of the episode. Joel, that's gonna
Speaker 1: be it for this episode until next time. Best Friends Out,
Speaker 1: Best Friends Out,