Speaker 1: Welcome to How the Money. I'm Joel, I'm Matt. Today
Speaker 1: we're talking budgeting like a beast with Jesse Meekom. That's right,
Speaker 1: Jesse Meekom. He is joining us on the podcast today
Speaker 1: and we are going all in on budgeting. I'm guessing
Speaker 1: there's a number of folks listening who might recognize his name,
Speaker 1: but I'm guessing even more folks are familiar with the
Speaker 1: company he started back in two thousand three while he
Speaker 1: was still in college. You need a budget, or why
Speaker 1: NAB as it's commonly known what we call it. Millions
Speaker 1: of individuals have now used why NAP to get on
Speaker 1: a budget, which has allowed them to achieve their life
Speaker 1: changing financial goals. And so whether that's simply paying off
Speaker 1: debt or the complicated endeavor of getting on the same
Speaker 1: page as your partner, that's difficult. Uh. Jesse has likely
Speaker 1: thought more about budgeting over the past twenty years than
Speaker 1: anyone else out there, so we're excited to talk with
Speaker 1: him about all the things that he's learned and observed. Jesse,
Speaker 1: thank you for joining us today. I am so glad
Speaker 1: to be here. Thanks guys, Jesse. We're glad to have
Speaker 1: you and the first question we ask everyone who comes
Speaker 1: on the show is what's your what do you like
Speaker 1: to sport on? We call it your craft beer equivalent
Speaker 1: because Matt and I we spend more money than most
Speaker 1: people would think is normal on craft beer because we
Speaker 1: love it. But we're happy to do that because we're
Speaker 1: saving and investing well for the future while we're spending
Speaker 1: a lot of money on beer. So what do you
Speaker 1: what do you spend a lot of money on that
Speaker 1: maybe people might think is kind of crazy. Yeah, I
Speaker 1: wouldn't mix beer and what I spent a lot of
Speaker 1: money on, but I would say my my wood shop
Speaker 1: there is it is a it is a money pit,
Speaker 1: and there's always another thing you can buy. I'm I'm
Speaker 1: currently in the shop for a floor or in the
Speaker 1: market for it like a floor standing variable speed drill press.
Speaker 1: So what are you making into this wood shop? Are
Speaker 1: you making? Like canoes? Ron swantson style? What are you doing?
Speaker 1: If I had these skills of Ron Swanson, I would
Speaker 1: have arrived. But I he's in real life. He is
Speaker 1: a killer woodworker's yeah, I mean making a beautiful handcrafted canoes. Yeah,
Speaker 1: it's insane. So yeah, anyway, my I have his book
Speaker 1: here actually got good clean fund by Nick Offerman. It's
Speaker 1: it's excellent. But the yeah, I will make anything. But
Speaker 1: right now I'm working on shop furniture like I'm because
Speaker 1: you can kind of learn like it's if it's if
Speaker 1: it looks bad, it doesn't matter because it's all in
Speaker 1: your shop. So I'm learning a lot of the basics.
Speaker 1: I'm I'm taking like a general like basic woodworking course
Speaker 1: where they go through all the different jointry, kind of
Speaker 1: the foundational joinery. And I love just being a novice.
Speaker 1: So I have a shop that looks like I'm a professional,
Speaker 1: and I am a novice, and I'm not ashamed to
Speaker 1: admit it. I just I think it's fun to get
Speaker 1: the new tools. So whenever I can squeeze it into
Speaker 1: the old plan, I do it very nice. So are
Speaker 1: you pursuing this purely out of just with it, you know,
Speaker 1: with it being a passion as you know, as oh yeah,
Speaker 1: an interest, not something that you foresee being able to sell.
Speaker 1: You know, fine, I would have ruined it. I don't
Speaker 1: want to ruin my hobby by monetizing. He's gonna open
Speaker 1: up like a woodside stand. People are gonna be like
Speaker 1: I'm not paying for that, Jesse. Jesse might get so
Speaker 1: good that folks are saying, please let me buy that babe,
Speaker 1: that beautiful I will give. I will gift it to them.
Speaker 1: I will, but I refuse to transact in this way.
Speaker 1: I don't want to taint it. Don't take, don't ruin it. Jesse,
Speaker 1: I love it. Well, let's kind of start talking about money,
Speaker 1: not just the wood, but so unlike most folks, it
Speaker 1: sounds like your parents actually had like a positive influence
Speaker 1: on you when it comes to, uh, getting you started
Speaker 1: down the path of personal finance. How is it that
Speaker 1: you first started learning about money? So, I, uh, my
Speaker 1: parents modeled it well. They modeled frugality well, I will say, um,
Speaker 1: they were really good at just saying we don't have
Speaker 1: money for that, we're not gonna spend money on it.
Speaker 1: We we lived, I mean we were, you know, middle class,
Speaker 1: but we lived below our means as far as I
Speaker 1: could gather as a as a kid and kind of observe.
Speaker 1: So they were just very, very frugal. I used to
Speaker 1: think that the word vacation meant driving ten hours to
Speaker 1: Grandma's house. I didn't know that there were other options
Speaker 1: besides just driving up there and then literally one time,
Speaker 1: starting to read the Encyclopedia at a I got to avocus.
Speaker 1: I didn't make it very far, but like I just
Speaker 1: boared on my vacation, so that, I mean, that's just
Speaker 1: what we did and I didn't know any different, and
Speaker 1: it was great and they were loving, and so you
Speaker 1: can't complain at all. But one thing that that my
Speaker 1: dad in particular did. I think I was fourteen, and
Speaker 1: he said, hey, you should read these books. And so
Speaker 1: he didn't just say I want to teach you about money.
Speaker 1: He's just like, you might find these interesting. And he
Speaker 1: gave me a couple. He gave me Ramsey's book that
Speaker 1: was Financial Peace, and I think now The Total Money
Speaker 1: Maker was kind of there, his more flagship book, but
Speaker 1: Financial Peace was the one that I read. And Ramsey
Speaker 1: taught me not to like debt at all, to hate
Speaker 1: debt even as a fourteen year old, and I thought, okay,
Speaker 1: that sounds good. And then he gave me The Millionaire
Speaker 1: next Door, another great one to kind of learn like
Speaker 1: it's not about what you see, but it's about what's
Speaker 1: kind of under the covers a lot of the time.
Speaker 1: And then the final one was the richest man in Babylon,
Speaker 1: which is probably my favorite overall, just those principles approachable.
Speaker 1: It's the same first one I would give, you know,
Speaker 1: I give my kids when they are like, hey, I
Speaker 1: want to learn something. I don't want to sit down
Speaker 1: and teach him. I just want to say, well, here's
Speaker 1: a book. And I think as a kid it's easier
Speaker 1: to learn sometimes from someone else, and so I think
Speaker 1: it was wise of my dad just to say, well, hey,
Speaker 1: learn it from these you know, from these books, and um,
Speaker 1: it formed a lot of my early opinions. Some of
Speaker 1: them have developed over the years a little differently, but
Speaker 1: it was early informative. And I am forever grateful that
Speaker 1: I I had a disdain for debt early on and
Speaker 1: avoided in college because of that, and that I saw
Speaker 1: early on that I should start with start with investing
Speaker 1: and get an early jump on it. So yeah, I
Speaker 1: will be forever grateful for the to the authors of
Speaker 1: those books and to my dad for giving them to me. Well,
Speaker 1: you talk about modeling your parents, modeling the right behaviors,
Speaker 1: but then not being the ones to necessarily preach it
Speaker 1: at you, you know, over and over, and I think
Speaker 1: that's really important because I think modeling goes the farthest.
Speaker 1: Then let someone else do the preaching and maybe that's
Speaker 1: the best combo. And it's interesting you mentioned your kids too.
Speaker 1: You've got seven kids, which is uh as much as
Speaker 1: Matt and I have to catch up. You need a
Speaker 1: spreadsheet to run that many kids, right, you guys would
Speaker 1: be fine? But yeah, well it's easier for us. I've
Speaker 1: got family five, has got family six, but you got it.
Speaker 1: You got a massive family. So how does that how
Speaker 1: has that impacted your did that like make you feel
Speaker 1: like you needed a budget? Obviously you started your journey
Speaker 1: even before that, but you have you found it to
Speaker 1: come in even more handy, haven't. I've been big of
Speaker 1: a family. Well, honestly, the first the thing that made
Speaker 1: me and my wife's name is Julie, that that made
Speaker 1: us feel like we had to really be careful early
Speaker 1: on was we were we were dirt poor, and we
Speaker 1: were both in school and just eking by, and then
Speaker 1: we were gonna get married. And so combining these meager
Speaker 1: finances together it doesn't do any There's no synergy there.
Speaker 1: You're just like, okay, now we both make I mean,
Speaker 1: there was just no win and we were actually paying
Speaker 1: more in rent than we would have been as single
Speaker 1: kids anyway. So I'm just like, man, Julie, we gotta
Speaker 1: be really careful. So we get married. I build this
Speaker 1: little spreadsheet that later became wine Nop, but at the
Speaker 1: time it was just for me and for Julian. We
Speaker 1: start watching everything really close. But the thing that pushed
Speaker 1: me to say, hey, maybe I could sell this spreadsheet
Speaker 1: was it had worked for us for that year. We
Speaker 1: were able to start saving money and then um, we
Speaker 1: saw that a baby was coming. It was it was planned,
Speaker 1: but we were still not making a lot of money,
Speaker 1: like ten bucks, you know, eleven bucks an hour and
Speaker 1: trying to get through school and so to have a
Speaker 1: baby inbound, that was what made us think, Okay, we
Speaker 1: gotta try and figure out some way to let Julie
Speaker 1: exit the workforce, uh and have me be able to
Speaker 1: try and balance maybe earning some side money and finishing
Speaker 1: at school. So the push of of providing for kids, oh,
Speaker 1: that was what gave us that that that drive, and
Speaker 1: so I'm grateful for it. It's not fun in the moment,
Speaker 1: but it does kind of squeeze the creativity out of
Speaker 1: you at times. Kicking the pants nothing like another human
Speaker 1: being being depended on your ability to manage your own
Speaker 1: finances in order to provide for them. So that's certainly
Speaker 1: can be that, like you said, you'll kick in the pants,
Speaker 1: But like, what would you say, Jesse, to folks who
Speaker 1: or otherwise than just repulsed by the idea of making
Speaker 1: a budget? Essentially, I would love for you to maybe
Speaker 1: make a case for budgets for those out there who
Speaker 1: don't necessarily feel like it's something they need to do. Yeah,
Speaker 1: I mean I I don't even like the word budget.
Speaker 1: I wish that our company was named something really I
Speaker 1: don't know, fancy, like it sounds like a perfume. Maybe
Speaker 1: I don't know, something different. Because people they hear the
Speaker 1: word budget and they think restriction, no more fun, diet um.
Speaker 1: It's just like everything is just going to kind of
Speaker 1: bear down on them, and maybe their their spouse or
Speaker 1: significant other tells them, hey, we need a budget, and
Speaker 1: then it's like double worse. It's like, Okay, not only
Speaker 1: will be a budget, but you're going to be running
Speaker 1: the budget and I'm gonna be the one that's making
Speaker 1: all the mistakes and just nothing is good about it.
Speaker 1: So a budget is really it's just a plan. And
Speaker 1: all we really care about is that people are intentional
Speaker 1: with their money, and that's it. That's the end of it.
Speaker 1: We want people to love how they spend their money
Speaker 1: instead of having their spending just stress them out, strain
Speaker 1: their relationship, suck the fun out of everything. I mean,
Speaker 1: people are so worried about a budget taking the fun
Speaker 1: out of life, But they will go on vacation with
Speaker 1: this like this low burn, like kind of simmer in
Speaker 1: the back of their mind as they're racking up credit
Speaker 1: card debt. They're just like, I know this isn't good.
Speaker 1: I know this isn't good. And so I'm trying to say, well,
Speaker 1: maybe try the thing where you save up for the
Speaker 1: vacation and you actually get to spend money guilt free.
Speaker 1: So a budget is just a plan, and it's it's
Speaker 1: your plan and you get to make it however you want.
Speaker 1: But if it means that if you have to do
Speaker 1: a budget in order to have a pile of intention
Speaker 1: kind of like rising up behind your money, then that's
Speaker 1: that's what we want, and that's what we're going to
Speaker 1: call it. Were you got. You gotta love how you
Speaker 1: spend your money. If you feel guilty about it. There's
Speaker 1: a problem, right, If you're arguing with your spouse, it
Speaker 1: means there's a problem. And so we want to get
Speaker 1: that spending lined up with your real priorities. And then man,
Speaker 1: you're off to the races that that's when money becomes fun.
Speaker 1: And I don't know, I can't imagine any other way.
Speaker 1: So do we just rename you need a budget? Two?
Speaker 1: You need a money plan, wineamp something like that, or
Speaker 1: the can thing. I can you know, mystique or something
Speaker 1: I don't know. Okay, all right, well, yeah, you let
Speaker 1: me know when you're ready for that rebrand. I'm curious
Speaker 1: to hear how cool water I think when it's the
Speaker 1: middle school was a good one. Uh well, Jesse, some
Speaker 1: folks in the financial independence community, they're just supernaturally frugal, right,
Speaker 1: and so they would say, I am intentional with my money,
Speaker 1: but I don't feel like I need the budget part.
Speaker 1: And so based on what you just said, what would
Speaker 1: you say to someone like that who says, like, I'm
Speaker 1: handling things pretty well, I've got a huge gap between
Speaker 1: incoming and outgoing um investing a lot for the future,
Speaker 1: Like do I need to sit down and actually like
Speaker 1: mess with the numbers every single month or every other week. Yeah,
Speaker 1: I know, now they don't if if they're if you
Speaker 1: have some massive gap between you know, money in and
Speaker 1: money out, and the net worth keeps climbing even if
Speaker 1: the markets doing what it's been doing, especially, then you're
Speaker 1: good to go. You have a plan and the plan
Speaker 1: is working because the score that we're keeping is net worth,
Speaker 1: and especially I would say the score is how much
Speaker 1: you are sending to your investment pile. Not so much
Speaker 1: fluctuations in the market. You can't totally control that, but
Speaker 1: the fact that you're you're you know, you've got a
Speaker 1: big shovel and you're flinging tons of money over the
Speaker 1: wall into that retirement bucket. It's you're winning. So I
Speaker 1: wouldn't change a thing now for someone that's like, hey, Jesse,
Speaker 1: um my net worth it's you know, I'm not really
Speaker 1: saving a ton, but I know that I'm frugal. Then
Speaker 1: I'd be like or they say, or they like, already
Speaker 1: how much? Yeah, they I already know how much I spend.
Speaker 1: I'm like, no, or I I I know that I
Speaker 1: just I eke by anyway, So I already am tight.
Speaker 1: I don't need to Look, that's all just ways of
Speaker 1: saying like I don't really want to be aware, or
Speaker 1: I'm actually unaware, or I think I'm aware and I'm not.
Speaker 1: All those things we want to make sure we iron out.
Speaker 1: So but for the person that like literally their money
Speaker 1: just keeps growing and growing, Yeah, you hit it, You're
Speaker 1: you're doing it. You just don't. You aren't super granular
Speaker 1: in your plan for your spending, but you're you're nailing
Speaker 1: it on those big, big movers, you know, those big goals.
Speaker 1: Then yeah, you're you're good to go. I wouldn't have
Speaker 1: you change a thing. I don't want to say those
Speaker 1: people are unicorns, but they're not. It's just I'm not
Speaker 1: worried my market's going to disappear by just you know, Yeah,
Speaker 1: that's that's maybe one percent of the population that really
Speaker 1: isn't that isn't that realm of managing their finances. But
Speaker 1: I do think it's important to mention that that some
Speaker 1: of those folks is exist and they might not need
Speaker 1: a budget. In the same way that if I could
Speaker 1: interject one more thing, um someone that's uh, you know,
Speaker 1: Elon Bezos, these massively wealthy people, they still hopefully with
Speaker 1: all of those resources hopefully are being extremely intentional with
Speaker 1: all of that value that's there. So when when you
Speaker 1: have something that's like I make tons Jesse, I don't
Speaker 1: have to worry about it. I would kind of turn
Speaker 1: around and say, listen, man, you you have been gifted this,
Speaker 1: You've worked for it, however you want to say, this
Speaker 1: came into your possession. You have something tremendously valuable in
Speaker 1: this world. Let's not be so cavalier and so flippant
Speaker 1: about the fact that you have this massively useful resources
Speaker 1: that could potentially be, you know, deployed to have some
Speaker 1: great effect in the world. And I'm not even meaning, hey,
Speaker 1: you know, shame on you for not giving it away.
Speaker 1: There are plenty of charities that I'd be like, oh,
Speaker 1: that probably wasn't a great use of money, if you know, Like,
Speaker 1: I'm no judge of that. But just let's take you
Speaker 1: and make sure that all of your intention, all of
Speaker 1: the best parts of you are Chamma behind that big
Speaker 1: pile of money, and then it becomes something great and grand.
Speaker 1: Let's not have it just be frittered away. So for
Speaker 1: those that have a fantastic pile of resources, I think
Speaker 1: it's incumbent on upon them even more so to be
Speaker 1: really intentional, really thoughtful, careful about what they do with it. Yeah,
Speaker 1: maybe maybe that looks like a budget, but like you said,
Speaker 1: it's it's having a plan. And I think even those
Speaker 1: folks would be able to benefit from a plan because
Speaker 1: you take a high reformer and you put them under
Speaker 1: the direction of an amazing coach, and all of a sudden,
Speaker 1: they're doing stuff that they never thought was possible. Right,
Speaker 1: if making millions came easy to them, we'll just think
Speaker 1: what you could do otherwise. But I like what you
Speaker 1: said to like from a at least from an investing standpoint,
Speaker 1: they're they're kind of knocking it out of the park.
Speaker 1: But I mean, one of the reasons that are one
Speaker 1: of the ways I guess my wife and I were
Speaker 1: able to Kate and I that we were able to
Speaker 1: get on the same page just when it came to budgeting,
Speaker 1: is because we saw it as a way essentially, as
Speaker 1: a way for us to have some freedom in how
Speaker 1: it is that we spend our money, because I think,
Speaker 1: I mean, my natural tendency might be to not just
Speaker 1: be frugal, but just to seriously deprive ourselves. And yeah, exactly,
Speaker 1: we saw an ability for us too, Like you said,
Speaker 1: be intentional with our money, but just we had the
Speaker 1: freedom to then spend our money in the ways that
Speaker 1: we said we wanted to. But maybe in practice we
Speaker 1: found that to be harder. Moving it from the head
Speaker 1: and what we said we're gonna do on paper into
Speaker 1: reality for us was difficult. Yeah, absolutely, it's it's it's
Speaker 1: liberating to have the plan allow you to do things.
Speaker 1: It's weird because you set up the plan, you agreed
Speaker 1: to it, you wrote it down a week before or whatever.
Speaker 1: It's weird that we suddenly divorce ourselves from the plan
Speaker 1: as if it's not us, but it is. But it
Speaker 1: allows us to kind of push, like differ back to
Speaker 1: it and say, well, what did the plans say I
Speaker 1: could do all the plans that I could buy these
Speaker 1: fantastically expensive boots that will last forever. And I say
Speaker 1: that because it's a real example that I'm in the
Speaker 1: market for, so splurge again. But I you know, it's like, Okay, this,
Speaker 1: this would be really cool. I'm really excited about this.
Speaker 1: But push came to shove. If the plan weren't telling
Speaker 1: me that I actually could do it, I think I
Speaker 1: would struggle with it because I'm just naturally wired to squeeze,
Speaker 1: you know, squeeze those dollars. So I love that it
Speaker 1: gives you the permission, like you give yourself the permission,
Speaker 1: but in this indirect way that allows it to feel
Speaker 1: a little more free flowing. Yeah. Again, I don't know
Speaker 1: what percentage of the population those natural, ridiculously frugal people are.
Speaker 1: I think Matt and I might both be those, and
Speaker 1: and actually making a plan for our money has helped
Speaker 1: us feel free to spend in the ways that we
Speaker 1: otherwise would probably not do. And it's really it's helped
Speaker 1: my marriage out because then I'm not like saying no
Speaker 1: to everything, even though those are things we want to do.
Speaker 1: But I guess, Jesse, I want to I want to
Speaker 1: know more too about wine app and you talked about
Speaker 1: kind of how it started with a spreadsheet that you
Speaker 1: created just to be able to get by making very
Speaker 1: very little money and to help your wife stay at home.
Speaker 1: But how did it turn into a fintech company and
Speaker 1: a wildly successful one. I mean, I saw at the
Speaker 1: end of last year the Wall Street Journal said why
Speaker 1: NAP was the best budgeting gap, Like, that's huge, that's like, yeah, so,
Speaker 1: so how did it? How did you get to that point? Uh? Well,
Speaker 1: you know, almost twenty years in you get the Washer
Speaker 1: Journal to write about it, you know what I mean.
Speaker 1: So it's like, yeah, like that would have helped a lot.
Speaker 1: But I've always loved the topic. I've always loved teaching
Speaker 1: people about it, and I am a teacher at heart,
Speaker 1: and so we've always had the model. Now, the software,
Speaker 1: the spreadsheet has been long gone as of like I think,
Speaker 1: oh six or something, but then we had some really
Speaker 1: um you know, some great software that you would download
Speaker 1: and install and paste a license keeper people that grew
Speaker 1: up without apps and whatnot. But then the apps came along,
Speaker 1: and now the web app and so it just keeps.
Speaker 1: The software keeps kind of hopefully keeping pace with what
Speaker 1: technology is allowing us to do. But the method behind
Speaker 1: it has has always been kind of like the special juice,
Speaker 1: the thing that makes it work. So we always say
Speaker 1: that the software is second fiddle to the method, to
Speaker 1: the thinking. And if someone can take what we teach
Speaker 1: method wise, these four rules, and I'm sure we'll get
Speaker 1: into later, but if they can take that and run
Speaker 1: with it, no matter how they implement it, it'll work
Speaker 1: really really well because the method works very very well,
Speaker 1: even though the technology has changed. There are four rules
Speaker 1: in particular that you wrote down a long time ago.
Speaker 1: So we're gonna talk about those rules. We're gonna talk
Speaker 1: about them in stone tablets. Actually, we're gonna talk about
Speaker 1: maybe some just general budgeting strategy as well. We'll get
Speaker 1: to all of that right after this break. All right,
Speaker 1: let's keep rolling. Let's talk about budgeting like a beast.
Speaker 1: We're still talking with Jesse Mecum And if there's Matt
Speaker 1: anybody to cover this topic well with us, it is Jesse.
Speaker 1: It's the guy that's a woodworker who's saving up for
Speaker 1: some nice leather boots to wearing his woodshot exactly. I
Speaker 1: don't want to don't want to puncture those toes. It's
Speaker 1: like some mistake happens or anything like that. But Jesse,
Speaker 1: you talked about the four rules. You're alluded to them
Speaker 1: before the break, but that's where everything starts, when it
Speaker 1: comes to the wine app software. Can you give us
Speaker 1: an overview of those four rules and why you think
Speaker 1: that that's kind of the revolutionary, like Matt said, secret
Speaker 1: sauce to making budgeting work for people. Yeah, So I
Speaker 1: mean we I have mentioned earlier that we want people
Speaker 1: to love how they spend their money, and spending is
Speaker 1: just decision making at the end of the day, and
Speaker 1: people try and dress it up and make it some
Speaker 1: other thing. That money is different, but it is just decisions.
Speaker 1: And the method that Wine teaches is four rules that's
Speaker 1: essentially just to help you make better decisions. So our
Speaker 1: first rule, we call it giving every dollar a job.
Speaker 1: And what that means is, if you decide to spend
Speaker 1: money on you know, tool A, you can't spend money
Speaker 1: on tool B. If you decide to go out for sushi,
Speaker 1: you maybe can't also go out for you know, drinks
Speaker 1: another day. It's that if I spend here, I maybe
Speaker 1: can't spend over there. And it's the it's acknowledging that
Speaker 1: we have finite resources. And while while finance capital left large,
Speaker 1: industry wants you to feel like you have infinite resources
Speaker 1: and you can spend and swipe and buy now, pay
Speaker 1: later and all that stuff. They want you to feel
Speaker 1: like you never run out, but you have to acknowledge
Speaker 1: that you run out because that helps you crystallize what
Speaker 1: your priorities are and start to make better decisions. So
Speaker 1: when you operate with a zero based budget, whether it's
Speaker 1: with wine app or any number of other tools that
Speaker 1: do that, it's that idea of it's finite. So with
Speaker 1: that in place, you're now weighing your priorities and good
Speaker 1: decisions come from that. We then moved to rule two,
Speaker 1: where we call it embracing your true expenses, and essentially
Speaker 1: that's looking ahead and thinking about large or less frequent
Speaker 1: expenses and then dividing those up into more manageable monthly amounts.
Speaker 1: So I mentioned sushi. It's kind of like me saying,
Speaker 1: all right, I want to go to sushi today, but
Speaker 1: also I'm looking at Christmas that just happened, and I'm saying, oh, well,
Speaker 1: Christmas is in twelve months or whatever. Is this gonna work?
Speaker 1: Is Christmas and sushi today going to work? And people
Speaker 1: don't make they don't do that kind of calculus. Or
Speaker 1: it's a lot like if you're standing, like I don't know,
Speaker 1: in the tire store or something, and you're tire just
Speaker 1: blue and the guys there and he's like, okay, the
Speaker 1: four tires are gonna be let's let's pray that's they're
Speaker 1: only like eight hundred bucks, right, the four tires are
Speaker 1: gonna be eight hundred dollars, and you have the money
Speaker 1: for the four tires. So you're like, man, I'm feeling good.
Speaker 1: But it's like a pizza delivery guy walks into and
Speaker 1: he's just like, Jesse, I know those tires, your eight hundred,
Speaker 1: and you have the eight hundred, but don't you want
Speaker 1: to spend a hundred bucks on pizza for your kids
Speaker 1: and their friends and maybe they're friends and just have some.
Speaker 1: And you're like, uh no, I absolutely do not want
Speaker 1: to do that, not because of all the kids in
Speaker 1: the house, but because I want to pay for the tires.
Speaker 1: And so it's this interesting situation where with rule one,
Speaker 1: we're prioritizing and with rule two, we're prioritizing with future
Speaker 1: priorities and current priorities, and they're getting equal footing during
Speaker 1: our decision making process. So Fae, my my youngest daughter,
Speaker 1: I have to refer to my spreadsheet to make sure
Speaker 1: I get that straight. But you know Faye, my youngest daughter,
Speaker 1: she she's like, Okay, I want to say about for
Speaker 1: this Christmas gift for Faye, and I also want to
Speaker 1: buy this thing right now. And suddenly you have a
Speaker 1: really interesting prioritization. That's happening. Now do I sit there,
Speaker 1: I'm always like, oh, am I going to take a
Speaker 1: gift from face Christmas? No, of course not. But as
Speaker 1: you're doing the decisions, you are. And so this idea
Speaker 1: of future you and current you and then future Julie
Speaker 1: and current Julie, we're all sitting at the table, you know,
Speaker 1: table together negotiating and there's one that's like I want
Speaker 1: money for tires, and other ones like I want pizza tonight,
Speaker 1: and we're weighing that. So between rule one and rule two,
Speaker 1: decision making starts to really improve. I'll pause there just
Speaker 1: in case you guys have questions. But I'm like an
Speaker 1: Automa town. If you put a quarter in me or
Speaker 1: ask me about the four rules, I just kind of
Speaker 1: go So I get, yeah, let's go ahead and jump
Speaker 1: in here before you move on with the additional rules,
Speaker 1: because you know, when you talk about giving every dollar
Speaker 1: a job like, it makes me think about just budgeting
Speaker 1: in general. Right, Like, if if we asked you to
Speaker 1: define the word budget, I'm curious to hear what you
Speaker 1: would say, because you know, you did say a plan earlier,
Speaker 1: but it seems like at the heart of budgeting is
Speaker 1: the first rule, giving every dollar a job where you
Speaker 1: are just being intentional when it comes to like you said,
Speaker 1: the decisions that you're making, is does that seem accurate? Yeah?
Speaker 1: I think I would say if I were to define
Speaker 1: I've never done this before, perhaps, but if I were
Speaker 1: to define it off the cuff, a budget is a
Speaker 1: plan attached to finite resources given a specific time frame
Speaker 1: as well, you know, when it comes to racing this
Speaker 1: true expenses, because I think a big part of those
Speaker 1: those true expenses is the fact that I think there's
Speaker 1: so much in our life that feels urgent, that seems urgent,
Speaker 1: and so oftentimes we're just looking to whatever pops up
Speaker 1: in front of us and we think, oh, okay, that
Speaker 1: is now something I have to tackle, That's something we
Speaker 1: have to spend money on, And it's just about it's
Speaker 1: almost about getting in front of that a little bit
Speaker 1: and knowing that it's on its way. As opposed to
Speaker 1: you just reacting to something passively. It's proactively managing those
Speaker 1: expectation is absolutely to the pike. Yeah, absolutely, it is.
Speaker 1: It is completely and totally proactive. You know, if you
Speaker 1: manage your day the way you manage your money. I'm
Speaker 1: speaking to that. Don't do it well, um, you you'd
Speaker 1: be a wreck. You know, you're a train wreck. You're
Speaker 1: just reacting to everything that comes along. At the end
Speaker 1: of the day, you're always like, well, jeez, I didn't
Speaker 1: get the important thing done. That happens with with people's
Speaker 1: money all the time. They're just like we managed time.
Speaker 1: We're just trying to manage another finite resource that also
Speaker 1: can essentially travel through time, and we're looking at how
Speaker 1: our future will look. How are you know the current
Speaker 1: environment looks, and we're trying to weigh that together. It's
Speaker 1: it's interesting to do it this way because what we
Speaker 1: want people to get in there kind of in practice
Speaker 1: is not that budgeting is where you're forecasting your income.
Speaker 1: You're saying, I will learn this, I will learn this.
Speaker 1: We tie it back to the finiteness of their money,
Speaker 1: and we say, how much is in your checking account
Speaker 1: right now? Okay, what do you want that money to
Speaker 1: do before you're paid again? And that question whether you're
Speaker 1: making a d grand, year, three grand, fifty grand, doesn't matter.
Speaker 1: That question and starts to push on the priorities and
Speaker 1: starts to force the decisions. So then you can say well, okay,
Speaker 1: I've got all these current needs, but then we get
Speaker 1: future you to come to the table. Also, it's like, well,
Speaker 1: you know what about in three months when you wanted
Speaker 1: to go on vacation. You know, do you do you
Speaker 1: want to throw some money there. So it's more about
Speaker 1: allocating not just for now, but also almost like you're
Speaker 1: allocating to these different jobs along a timeline, and in
Speaker 1: that way you can be be really ready for the future.
Speaker 1: It's funny too, because people mentioned when they've started using
Speaker 1: wine up for they've used it for a while, they
Speaker 1: stop needing the traditional kind of personal finance emergency fund
Speaker 1: because they're finding that they are having fewer emergencies. Because
Speaker 1: the car tires that wear out, that is an emergency
Speaker 1: only if you don't have the money. But if you
Speaker 1: do have the money, it's no emergency at all. Or
Speaker 1: if the h v a C goes out or property
Speaker 1: taxes are due, it's whenever we have the money. We
Speaker 1: never label it an emergency. We're just like, well, now,
Speaker 1: if physical harm is you know, if there's a fire, okay, yeah,
Speaker 1: that's an emergency physical harm. But when there when the
Speaker 1: financial ramification can be handled by cash on hand, we're
Speaker 1: pretty resident reticent to say like, oh, yeah, that was
Speaker 1: an emergency. Oh no, no no, it really wasn't you know
Speaker 1: that you have the money. Yeah, we're planning ahead for
Speaker 1: some of those known irregular expenses to like car tires, right,
Speaker 1: that's I don't know, every fifty sixty miles you're gonna
Speaker 1: need new new tires, and so that's something you can
Speaker 1: kind of start to plan ahead for. Or a new roof.
Speaker 1: You know, the timeline of a roof is twenty five years,
Speaker 1: but you can see if your roof is starting to
Speaker 1: get decrepit. It's not typically this massive unknown I need
Speaker 1: a full roof replacement and I had no idea what
Speaker 1: was coming. And some of those things that we we
Speaker 1: like to categorize as an emergency, but it's usually just
Speaker 1: a lack of preparational, lack of planning and okay, but
Speaker 1: I want to knowe to Like the one of the
Speaker 1: things that we get questions on a lot, and we
Speaker 1: try to answer the best we can is for folks
Speaker 1: who are paid irregularly, right, folks who work for themselves,
Speaker 1: they run their own business, or they're a contractor, Like,
Speaker 1: how should they think about budgeting when they're not sure
Speaker 1: how much money is coming in month to month, whereas
Speaker 1: the person gets paid every two weeks. It's it's so
Speaker 1: much easier to know exactly how much you're gonna have
Speaker 1: on hand. So never ever, ever budget with money that
Speaker 1: you don't have on hand. Never forecast. Now, if you
Speaker 1: want to dream and kind of plan big and start
Speaker 1: to say, like, oh, what would it be like if
Speaker 1: I landed these three other clients and I sold these
Speaker 1: three houses or whatever. Yeah, you want to do that
Speaker 1: kind of big picture planning and dreaming, that's cool. But
Speaker 1: when it comes to decision making about your spending, you
Speaker 1: only ever talk about money that is in the account,
Speaker 1: not that you're going to get that is there already.
Speaker 1: So for a variable income person, there's there's that rule
Speaker 1: is number one, do not plan with money that you
Speaker 1: do not have in hand. That's that's the first. The
Speaker 1: second rule is, because your income is variable, you have
Speaker 1: to build more buffer. And that's kind of jumping to
Speaker 1: rule four, but you have to essentially build more runway
Speaker 1: for yourself, just more breathing room to allow yourself to
Speaker 1: roll with the fact that it's it's not you know
Speaker 1: that it is irregular. Um and I I can. I mean,
Speaker 1: I've been down that road for a years, you know,
Speaker 1: years and years where we had a very variable income,
Speaker 1: and it just is what it is. So only ever
Speaker 1: plan with money you have and build more buffer than
Speaker 1: your friend that's paid every two weeks by the city,
Speaker 1: you know, and that's just that's just your reality. But
Speaker 1: once you do that and you start looking to the
Speaker 1: future with rule two, and when there are flush months
Speaker 1: because variable income, a lot of times people are like, oh,
Speaker 1: variable income is tricky, because when I don't have any money,
Speaker 1: I'm I have a problem. They never mentioned how they
Speaker 1: had a lot of money two weeks ago, you know,
Speaker 1: And so it is just up and down, up and down.
Speaker 1: And so when you are flush, when you are like,
Speaker 1: oh my gosh, honey, we are rich, your first thought is,
Speaker 1: let's celebrate. We landed the big deal. Let's celebrate. And
Speaker 1: yet cool do celebrate, but also recognize they're going to
Speaker 1: be some lean times and do a little bit of
Speaker 1: like Joseph and Egypt where it's like seven years feast
Speaker 1: and famine, and start to look ahead and say, well,
Speaker 1: you know what, I'm gonna fund half of our mortgage
Speaker 1: for a month from now, and then three months later
Speaker 1: you're like, I'm going to fund the rest of our
Speaker 1: mortgage for next month, and I might fund half of
Speaker 1: our mortgage for two months out. And we'll get people
Speaker 1: that are running wine app that are on very extremely
Speaker 1: variable incomes that have funded their kind of their core
Speaker 1: you know, must have fixed expenses. They've funded them three,
Speaker 1: four or five months out because they know that there
Speaker 1: there can be some lean times. But and I'll just
Speaker 1: add one little thing just to pitch for this. When
Speaker 1: you are operating on a variable income and you've eliminated
Speaker 1: the variability in your stress level tied to it life changing, well,
Speaker 1: you think that the biggest reason to make this plan,
Speaker 1: Like is there anything better? Is? Yeah, we want people
Speaker 1: to get their money together. We want them to be
Speaker 1: confident and how they handle their money. But the biggest
Speaker 1: problem when you're not confident with how you hand your
Speaker 1: money and you are living paycheck to atcheck is the stress.
Speaker 1: The rain cloud of stress that hangs over you every
Speaker 1: single day and it's weighing you down. Yeah, and it
Speaker 1: makes your decision making in your business and elsewhere. It
Speaker 1: really has a negative effect on it. You start to
Speaker 1: be really um, you react really quickly, um, you take
Speaker 1: clients that you actually don't want. Um, you don't stop
Speaker 1: jobs that you hate that are low profit because you're
Speaker 1: just taking anything you can and we want you to
Speaker 1: be choosy, We want you to be really selective. We
Speaker 1: want to be making the best decision for you and
Speaker 1: your whole life, and all of that starts to kind
Speaker 1: of be hurt when we're just so stressed out and
Speaker 1: so reactive. So those two rules fixed variable income. You
Speaker 1: kind of alluded to this, but we can We'll give
Speaker 1: you a chance to get back to rules three and four,
Speaker 1: but we kind of touched on how that variable income
Speaker 1: having more cash in hand. That that's rule four of
Speaker 1: the four rules, right, Like you're talking about aging your money,
Speaker 1: you're about you're talking about, like you said, only spending
Speaker 1: money that you have on hand, and in some ways,
Speaker 1: like when it comes to that variable income, you're kind
Speaker 1: of like pushing that money off into the few. Yes,
Speaker 1: you know, it's it's money that you're you're you're marking
Speaker 1: for future purchases, like you said, must have things like
Speaker 1: a mortgage, paying for food. So we kind of covered four.
Speaker 1: What's the third rule that you think is important for
Speaker 1: folks to keep in mind? In order to have a
Speaker 1: successful budget. Yeah, and remember we're talking about really good
Speaker 1: decision making. It's just a decision making framework to make
Speaker 1: sure that spending lines up with priorities. And that's where
Speaker 1: the magic happens. So if we're giving every dollar a job,
Speaker 1: and we're also looking ahead to future dollars, and we're
Speaker 1: giving those jobs and we're weighing our priorities. The third rule,
Speaker 1: it's interesting that we have to have it be a rule,
Speaker 1: but we call it rolling with the punches, and it's
Speaker 1: essentially saying, uh, be flexible, change your mind if you
Speaker 1: need to as new information comes in, change the plan
Speaker 1: you would alluded to, like a coach that can really
Speaker 1: capitalize on someone with a lot of great raw talent.
Speaker 1: And there's also the coach that has a really solid
Speaker 1: game plan. And then as soon as the ball is
Speaker 1: hiked or the tip off happens or whatever it is,
Speaker 1: as soon as that happens, the coaches making adjust ones
Speaker 1: and you're seeing how your opponent is reacting to your plan,
Speaker 1: and you're reacting to that plan. And it's this big
Speaker 1: game of chess, which is another great example of reacting
Speaker 1: and acting. And so we want the plan that you've
Speaker 1: set in place this budget, we want you to be flexible.
Speaker 1: Rigid budgets break, and flexible budgets last a long long time.
Speaker 1: Too many people, first of all, they've never budgeted before,
Speaker 1: and so they think that they're just going to suddenly
Speaker 1: be this like wunda kint, that's gonna be like, oh
Speaker 1: I got this nailed and you don't. So you want
Speaker 1: to give yourself lots of grace. And when we talk
Speaker 1: about being flexible, give yourself the flexibility to say like,
Speaker 1: oh I thought I wanted to do this with my money,
Speaker 1: but then my friend called me and they said, hey,
Speaker 1: should you know, do you want to come out to eat?
Speaker 1: And you're like, yes, I do. So reallocate some money,
Speaker 1: shift things around, change your priorities a little bit. You're
Speaker 1: you're good to go. You know. It's like you're planning
Speaker 1: a beach day and then it starts to rain and
Speaker 1: you think vacations don't work. You know, we don't like no,
Speaker 1: it's just that it's raining. So you just make some
Speaker 1: adjustments and keep rolling. Yeah, okay, so quick follow up here.
Speaker 1: Would you recommend for folks to revisit their budget every
Speaker 1: single month and make small tweaks is this like a
Speaker 1: quarterly thing. I say this because I recently my wife
Speaker 1: and I had are big end of the year sort
Speaker 1: of meeting where we look back on it. Yeah, we
Speaker 1: look back at the past year when we know we
Speaker 1: make some of these larger changes. But yeah, I'd be
Speaker 1: curious to hear your thoughts on making these adjustments, how
Speaker 1: often they should be and to what extent. So it
Speaker 1: depending on how much progress you are trying to make
Speaker 1: and how much room you have between how much you
Speaker 1: spend and how much you make. So if you have
Speaker 1: a lot of room in there, then you don't need
Speaker 1: to be quite as engaged. You don't need to be
Speaker 1: you may it's still still may serve you well. But
Speaker 1: as people are really trying to transform their finances, maybey're
Speaker 1: trying to get out of debt, They're trying to reach
Speaker 1: some financial goals, and maybe not in the same spot
Speaker 1: you all are or your listeners are. They need to
Speaker 1: be actively in their budget. I mean a lot of
Speaker 1: people like to at least weakly sit down and say, okay,
Speaker 1: where are we at. But when someone is first starting,
Speaker 1: just be be in the budget every day. Replace Instagram
Speaker 1: with scrolling through your categories and being like this looks good.
Speaker 1: This looks good, And when you're about to spend money,
Speaker 1: you want to look at the app and say, well,
Speaker 1: can I spend the money here? And if you can
Speaker 1: spend it joyfully, no guilt recorded, or the bank, maybe
Speaker 1: we'll send you the transaction we hook up at the
Speaker 1: bank or whatever. But at the end of the day,
Speaker 1: you want to be actively always kind of reallocating based
Speaker 1: on how the spending is shaping up. As you get
Speaker 1: more wiggle room in the budget, this becomes less necessary.
Speaker 1: But if you are trying to make real, meaningful progress
Speaker 1: with your finances, which means real behavior change, the more
Speaker 1: frequently you are in the app kind of exercising a
Speaker 1: muscle that's been dormant for a long time, the better
Speaker 1: results you'll get. Yeah, that makes sense. It's like the
Speaker 1: longer you've been doing anything, the better you get at it,
Speaker 1: the less intense you have to be about focusing on it. Um,
Speaker 1: I want to ask you to You just mentioned scrolling
Speaker 1: on Instagram, which is a problem for a lot of people.
Speaker 1: When it comes to that could be like a budget
Speaker 1: buster in their lives. The rise of buy now, pay later,
Speaker 1: or someth thing that we have talked about a lot
Speaker 1: on the show We Hate Its start getting ads for
Speaker 1: nice boots now they just get them, Go get them, guys.
Speaker 1: It's going to spend some of the money on this stuff.
Speaker 1: So so it feels like everything around us is conspiring,
Speaker 1: leading us towards making worst decisions, towards money outflowing. Do
Speaker 1: you do you feel like it's harder for folks to
Speaker 1: resist impulse spending these days, and do you feel like
Speaker 1: that's part of what's leading leading to like an inability
Speaker 1: for folks to budget and to to come up with
Speaker 1: a good plan for themselves. Yeah, it absolutely is. It's
Speaker 1: uh And I don't like um framing it as like
Speaker 1: you're you know, you're a victim of the the man,
Speaker 1: the system is out to get you. At the end
Speaker 1: of the day, I have to side on the on
Speaker 1: the side of take responsibility, take action. You can control
Speaker 1: your situation. You can change, because anything else would be
Speaker 1: a disservice to a person that desires change. Right, Um,
Speaker 1: so you can change, you can do this now. Conspire
Speaker 1: ring though, I love that word because I mean I'm
Speaker 1: a profit seeking business owner just like everyone else, and
Speaker 1: all of these all this financialization of everything is for
Speaker 1: profit and you can say it's good or evil or
Speaker 1: whatever you want, but it just is. So knowing that
Speaker 1: they're kind of out to get you does help you
Speaker 1: maybe feel a little bit of motivation to be like,
Speaker 1: oh no, you don't and a little bit of like
Speaker 1: some gumption that might come along. So that could be helpful.
Speaker 1: But you also want to make sure that when you
Speaker 1: do want to spend the money, that you enjoy it.
Speaker 1: So I don't want to I don't want people to
Speaker 1: to associate spending as bad. It's not. It's just spending
Speaker 1: when it's out of alignment with what you really want.
Speaker 1: That's that's where we don't want to have all them misses.
Speaker 1: And again that's where the craft beer equivalent for us,
Speaker 1: that's something we talk about all the time on the sea.
Speaker 1: That is something we hammer home, like find the things
Speaker 1: that do move the needle for you, because there are
Speaker 1: there's there's a lot of deprivation mentality in the personal
Speaker 1: finance space and we don't want to contribute to that. Jessie,
Speaker 1: I'd love to hear your thoughts on lifestyle creep as well,
Speaker 1: because like, as individuals make more money, like I think
Speaker 1: it's it's fine to use some of that to like
Speaker 1: give some folks more breathing room to spend to maybe
Speaker 1: not have to revisit their budget quite as often. But
Speaker 1: it can also be a slippery slope, right, And so like,
Speaker 1: how do you want people to react, say, when they
Speaker 1: get a pay raise, when they see their income go up?
Speaker 1: How would you encourage folks going back to a word
Speaker 1: that you've already said, prioritize how it is that they spend. Yeah,
Speaker 1: I wish I had a better answer for this. It's
Speaker 1: no different like if you get double the money all
Speaker 1: of a sudden, you just got a sweet raise, I
Speaker 1: mean awesome high five, Like, let's this is awesome, you know,
Speaker 1: so you just gotta go back and say, okay, how
Speaker 1: much you know, what does this money need to do
Speaker 1: before I'm paid again? And now you have more money,
Speaker 1: and so you think, well, what does this this money
Speaker 1: need to do before I'm paid again. I don't like
Speaker 1: the phrase lifestyle creep. I used to use it all
Speaker 1: the time. It's one of those things I mentioned early
Speaker 1: on where I was like, oh, you know, you should
Speaker 1: just always be ending less, And lifestyle creep makes it
Speaker 1: sound like it's snuck up on you. Um, it just
Speaker 1: kind of like it sounds creepy and that seems negative,
Speaker 1: so um, I don't like anything about it. I think
Speaker 1: when people are talking about lifestyle creep they're really talking
Speaker 1: about the the slow, almost imperceptible misalignment of spending and priorities.
Speaker 1: And with that, I'm like, I'm on it, like, yes,
Speaker 1: let's get rid of that. But if you're saying, hey, Jesse,
Speaker 1: you make I don't know how much more than when
Speaker 1: Julie and I when we first started wineap I mean, gosh,
Speaker 1: I don't even know, guys, ten twenty thirty times more.
Speaker 1: I mean, it's in some insane amount. Are you saying
Speaker 1: that I still should be living in the same basement
Speaker 1: apartment that gave us respiratory issues the whole time? You know?
Speaker 1: And it's like, well, no, no, that's okay, you know,
Speaker 1: but we just don't want life. It's like, when is
Speaker 1: that line drawn? Well, I'm not going to draw the
Speaker 1: line for your listeners or for you guys, and it's
Speaker 1: up to everyone too, especially when you're sharing finances YouTube
Speaker 1: hand in hand. You know, you grab the sharpie. Actually
Speaker 1: it's not a sharpie, it's some in erasable and you
Speaker 1: draw the line together, and then you recognize that you're
Speaker 1: going to revisit it regularly every year. I promote the
Speaker 1: idea of a budget burned down, meaning you just you
Speaker 1: drop all assumptions. It's like, should we have health insurance?
Speaker 1: Should we not? You know, of course, get get catastrophic
Speaker 1: health insurance? Should we rent or should we buy? Should
Speaker 1: we have five roommates or should we get rid of
Speaker 1: our five roommates? Should we get rid of all of
Speaker 1: our cars? I mean, just burned down every single assumption
Speaker 1: to kind of start fresh. And it's a way to
Speaker 1: make sure that this lifestyle creep or misallignment of priorities
Speaker 1: and spending hasn't happened to you. I mean it will
Speaker 1: have happened, like it happens to all of us all
Speaker 1: the time. It allows you to rethink what you truly love.
Speaker 1: And we trually want to spend money on right because
Speaker 1: we get used to doing things and we that we
Speaker 1: continue those things in perpetuity. And we might say, wait
Speaker 1: a second, the second car doesn't matter to us anymore,
Speaker 1: but the trip to Europe does, and so I want
Speaker 1: to strip that out. And that's a big, massive change,
Speaker 1: but probably in reality, the same amount of money that
Speaker 1: you're gonna spend in a year. So I think that's
Speaker 1: a really yeah, really cool concept. Yeah, Jesse, I want
Speaker 1: to hear your updated thoughts on debt because you just
Speaker 1: talked about how some you talked about at the beginning
Speaker 1: about reading Dave Ramsey and how maybe that influence your
Speaker 1: view of debt. But I wonder if that's changed. Well,
Speaker 1: we'll get to a couple of questions on that with
Speaker 1: Jesse Meekom right after this. All right, we are back.
Speaker 1: We are talking about just the different ways that you
Speaker 1: can budget, the different strategies that take, whether or not
Speaker 1: you are using a specific software or not. Uh, and Jesse,
Speaker 1: just before the raik Joel brought up debt, let's let's
Speaker 1: talk about that. I'm curious to hear your thoughts on
Speaker 1: credit cards specifically, right just because I mean, you know
Speaker 1: you're massively pro budget. Does that mean you are anti
Speaker 1: credit card? What is the what's the widenab approach to
Speaker 1: credit cards? So, um, I'll start with the wine I've approach. First.
Speaker 1: We are agnostic as to the spending instrument you use. Now,
Speaker 1: that means that we done our best in the software
Speaker 1: to create a system where a credit card acts like
Speaker 1: cash because we've talked a lot about finite resources and
Speaker 1: a credit card lets you not acknowledge finite resources. And
Speaker 1: people can say all they want about well, I do
Speaker 1: this and I always pay it off. But at the
Speaker 1: end of the day, you are spending money and it's
Speaker 1: not money you have. Now you can say, oh no,
Speaker 1: it's in the checking account, but the cash has not
Speaker 1: left your system yet, so you just straight up that's
Speaker 1: how it is. Now. What we've done in wine app
Speaker 1: is tried to make it act like cash, where if
Speaker 1: you spend on the credit card, let's say hundred bucks
Speaker 1: for groceries, Um, no cash left your system, but we
Speaker 1: take a hundred dollars from your grocery category and we
Speaker 1: move it to your credit card payment category, so that
Speaker 1: when that you know, when the credit cards do or
Speaker 1: whatever it's on auto pay, if you're doing it, well,
Speaker 1: it's just the cash is there. So we've done our
Speaker 1: best to say, hey, this, this is, this is like cash.
Speaker 1: Treat it like now. If someone's coming off of a
Speaker 1: lot of credit card problems, I say, just don't use
Speaker 1: them for a while, like, hey, that though they bit
Speaker 1: you already, Like let's not let's not mess with those
Speaker 1: for a while. They are more complicated than just swiping
Speaker 1: with a card and having money go out. Um, this
Speaker 1: psychological element, absolutely, the reconciliation is more complicated. The bank
Speaker 1: transactions come in and do weird things. Sometimes a refund
Speaker 1: will hit and it hit from it hit two months before,
Speaker 1: and you'll see the refund go back, and so you'll
Speaker 1: be sitting there with your software like what happened. It
Speaker 1: makes it more complicated. That's bit me in the past.
Speaker 1: So I say that all to be like, we're trying
Speaker 1: to get the credit card to not be a credit
Speaker 1: card in our system, which is funny, which just tells
Speaker 1: you how negative they really are because we're trying to
Speaker 1: I don't know whatever the opposite of negate is this
Speaker 1: negative thing. And um, that's just it's telling my personal
Speaker 1: experiment this year, and this is this is early days.
Speaker 1: But I, um, I didn't cut our credit card or
Speaker 1: whatever I threw in a drawer, but I moved all
Speaker 1: of our spending off of what was basically our primary
Speaker 1: spending card. For Julian, I'm and we are using our
Speaker 1: debit cards. My theory, my theory, and I don't care
Speaker 1: about the rewards of the points like, there's one way
Speaker 1: to tell there's a little bit of a diversion. There's
Speaker 1: one way to tell if banks like the rewards or
Speaker 1: don't like the rewards, and it's that they keep pushing
Speaker 1: the rewards. So the fact that they exist, they exist.
Speaker 1: They exist, and the banks are wildly profitable institutions. So
Speaker 1: you can say, oh, Jesse, I'm not a sucker. I
Speaker 1: don't pay those rewards, but they still get paid every
Speaker 1: time you swipe. Every time you swipe, a bank get
Speaker 1: a banker gets its wings or whatever. However that goes right.
Speaker 1: So when when you swipe, you are giving the bank
Speaker 1: money because they get a cut. They get a little cut.
Speaker 1: And there are a few people that there's a processor
Speaker 1: that gets a cut. There's a gateway that gets a cut,
Speaker 1: and there's a bank that gets a cut, and sometimes
Speaker 1: there's another bank that gets a cut, like the issuer
Speaker 1: and then the holder. There's are there's weird words word
Speaker 1: but like so many people have their fingers in this pie.
Speaker 1: That's these transaction fees that we all pay that the
Speaker 1: merchant pays on our behalf that we all end up
Speaker 1: paying because the merchant's paying it, right, if if you
Speaker 1: assume that you're in a fairly competitive market, so in
Speaker 1: that instance where we are paying it, so when someone
Speaker 1: says when I get one percent back, well the bank
Speaker 1: got more than one percent for you swiping, so there's
Speaker 1: still totally okay with this. So that's one way to
Speaker 1: view it, is just like, oh, maybe I maybe that
Speaker 1: the banks are okay with this, not just okay, but
Speaker 1: that they love it. So that's one thing. The other
Speaker 1: thing you could do is say, well, who pays for
Speaker 1: all these rewards? If it's not me, well, it's someone
Speaker 1: that's paying late fees and interest. And so you might
Speaker 1: approach it from an altruistic sense, which, honestly, to be
Speaker 1: totally frank, it doesn't like move me. I'm just like,
Speaker 1: I'm gonna do this because I don't want someone else
Speaker 1: to have to pay for my reward. It doesn't. But
Speaker 1: I know a lot of people that for whom that
Speaker 1: really is the moving factor, and they just say no, altruistically,
Speaker 1: I don't want someone else that's struggling to be paying
Speaker 1: my reward fees also an interesting view. There's a third
Speaker 1: view that I'm curious about from my year of experiment,
Speaker 1: and that is we've always talked about how a credit
Speaker 1: card is handled in wine app as if it's a
Speaker 1: debit card, as if it's just cash. So we kind
Speaker 1: of feel good about it. And so we're like, whenever
Speaker 1: you want something, you just will adjust the budget to
Speaker 1: make sure it happens. And if you're using a credit
Speaker 1: card or not, it's fine, but you're always kind of saying,
Speaker 1: I want something, I make the budget allow me to
Speaker 1: have that thing done. My theory is that the credit
Speaker 1: card specifically might be upstream and be actually affecting our wants.
Speaker 1: And this is early for me, so I'm gonna I'm
Speaker 1: putting myself out there in this way not fully formed thoughts.
Speaker 1: But if the credit card, if the use of a
Speaker 1: credit card actually affects your wants center like your dopamine
Speaker 1: hit center, and there's good research to say that it does,
Speaker 1: then it's actually affecting your wants, and then you're forcing
Speaker 1: your plan to adjust to this newly influenced want that
Speaker 1: came about because of credit card usage. So man, that's
Speaker 1: like another level level deeper right there. Yeah, And so
Speaker 1: I'm just curious about it. So I'll be back next
Speaker 1: year or whatever, and I'll let you guys know that
Speaker 1: I'm like filthy rich now because I don't use it.
Speaker 1: You just you know that's not gonna be the case.
Speaker 1: But I will say one other one other win is
Speaker 1: it's far simpler. It's just far simpler. Just to have
Speaker 1: one instrument that you use. Fraud protection on debit cards
Speaker 1: is as good as it's ever been. So I don't
Speaker 1: that one really doesn't hold water anymore like it did,
Speaker 1: you know fifteen years ago. Well, you know the points guy,
Speaker 1: if he was to talk to you, Jesse, he'd be like,
Speaker 1: I guess you don't want that free trip to Tahiti, bro, Like,
Speaker 1: what's your problem? You are telling? Well, you're talking to
Speaker 1: a guy that has literally millions of points because because
Speaker 1: we spend in the business where we know in business
Speaker 1: you don't even you can't even have corporate spending without
Speaker 1: it being on a some kind of a credit system.
Speaker 1: And so even if you try and avoid it, you
Speaker 1: you almost can't. It's like built into all of your
Speaker 1: corporate spending. Employees have cards and things. So yeah, you're
Speaker 1: talking to a guy that has loads of points, and
Speaker 1: you know, does it make us spend more on the business? Man?
Speaker 1: I sure hope not, because those millions of miles are
Speaker 1: way more expensive than being able to spend less. The
Speaker 1: fact that the banks love it so much. That's as
Speaker 1: my eighth grade uh, you know, as my eighth grade
Speaker 1: daughter would say, that sounds a little suss you know. Yeah,
Speaker 1: no it does. Yeah, I totally get where you're coming from.
Speaker 1: And I think it is an interesting thing to consider. Um,
Speaker 1: And I think you make some good points, and it's
Speaker 1: worth thinking about whether or not the we're being short
Speaker 1: sighted credit card usage. And I think I think some people,
Speaker 1: a lot of people probably are. And but I want
Speaker 1: to know too about maybe your take on like a
Speaker 1: bigger debt question, like good debt versus bad debt. Some
Speaker 1: people would say, we've had, for instance, Michelle Singletary, who
Speaker 1: writes for the Washington Post, who we respect, a ton
Speaker 1: who's been writing about personal finance for decades, and she
Speaker 1: says there is no such thing as good debt. And
Speaker 1: then other people would say, oh my gosh, you have
Speaker 1: a mortgage or two and a half percent and inflations
Speaker 1: you know, running hot at seven percent right now, you
Speaker 1: better just hold out of that thing. That thing is
Speaker 1: good for you. Do you have a take on that? Yeah? I, Um,
Speaker 1: it's it's more of a personal take. I um pay
Speaker 1: off my mortgage as fast as I could when I
Speaker 1: when we bought our first house, and then we sold
Speaker 1: that house and we bought a more expensive house, and
Speaker 1: I had a mortgage on that for a few years
Speaker 1: and paid. I just wanted to pay it off as
Speaker 1: fast as I could, so then I was sitting mortgage
Speaker 1: free with the first one, so I kind of jumped
Speaker 1: ahead and we bought a town home as like a rental,
Speaker 1: and so I had a I put down. This was
Speaker 1: back when real estate didn't cost you like your firstborn.
Speaker 1: This is like two thousand and twelve or something like that,
Speaker 1: and uh so I got a mortgage on that and
Speaker 1: it was kind of my own. It was our only mortgage.
Speaker 1: And then I bought another town home and end up
Speaker 1: with with four town homes that we're all over this
Speaker 1: period of years with very modest mortgages, totally cash flowing.
Speaker 1: At the end of the day, after we'd paid off
Speaker 1: our personal in our second home that we had bought again,
Speaker 1: I still ended up just paying off those even the
Speaker 1: real estate. So I just don't want to be stressed
Speaker 1: like I and that's that it's worth so much to me,
Speaker 1: and I do benefit from a business that's profitable, and
Speaker 1: so it's not like I'm trying to make real estate
Speaker 1: my my livelihood, where I'm really like I got to
Speaker 1: eke out finding like real financial return from this UM.
Speaker 1: And so in that instance, I can be more handwavy
Speaker 1: about the financial upside to leverage UM. But push comes
Speaker 1: to shove as far as personal goes, I just I've
Speaker 1: never liked it. I feel like it UM it messes
Speaker 1: with your decision making in a real way and not
Speaker 1: in a good way. And so I like the idea
Speaker 1: of paying cash for stuff, saving up for things. And uh,
Speaker 1: I just I've just never seen anyone say, you know, gosh,
Speaker 1: I really wish I were in more debt. I just
Speaker 1: I just never hear anyone dropped that line. So I
Speaker 1: guess I I agree with your friend at the Washington Post.
Speaker 1: I don't really think that there's good debt. I think
Speaker 1: if a lot of people could own their home free
Speaker 1: and clear, they absolutely would, regardless of how crazy low,
Speaker 1: artificially low, like crazy low, those interest rates are. I mean,
Speaker 1: that's that out in and of itself is a financial
Speaker 1: camera almost how low they've been for you know, it's
Speaker 1: like our age that you know, I'm guessing we're all
Speaker 1: about the same age. We we think it's normal to
Speaker 1: be at that rate, you know, two, three, four, And
Speaker 1: that's nothing that's nothing normal about that. It's just that
Speaker 1: it's all we've known for the last twenty years. We're
Speaker 1: even talking about, Oh I saw an article today, interest
Speaker 1: rates are so high and it's curbing the house of market.
Speaker 1: It's like they're not high historically. They're high compared to
Speaker 1: what we've experienced lately over the past, you know, a
Speaker 1: few years, but they're not historically high. They're they're still
Speaker 1: pretty low. Absolutely. And we were talking about you know
Speaker 1: yapp specifically, the software that you founded. How can folks
Speaker 1: learn more about wine app? And I'm actually curious too,
Speaker 1: Yell specifically you have a thirty four day free trial.
Speaker 1: Uh so, ay, where can folks learn about wine app?
Speaker 1: And b why why is it a thirty four day trial? Ye? So,
Speaker 1: the they can learn about it at windam dot com
Speaker 1: and uh, take classes, jump on YouTube, watch the videos.
Speaker 1: It's a different it's a really different way of thinking
Speaker 1: about money. So I would hope that they wouldn't just
Speaker 1: be like, oh, I used to use Quicken, so I'll
Speaker 1: just replace it like it's different. And so you really
Speaker 1: want to make sure you see where the thinking is
Speaker 1: coming from and then look at how the tool integrates
Speaker 1: with that. As far as the thirty four day trial,
Speaker 1: we want you to see how it works with a
Speaker 1: month rolling over. So no matter when you start, if
Speaker 1: with a thirty four day trial, you'll always have a
Speaker 1: month plus a little to kind of see like, oh
Speaker 1: I set aside money this month, that money is available
Speaker 1: next month, and they can start to see that rule
Speaker 1: to in action and things starting to you know, cash
Speaker 1: starting to build up. It's liberating for people to see that.
Speaker 1: So yeah, thirty four day trial all day long helps
Speaker 1: people kind of make that early connection on what it's
Speaker 1: going to be like to save up for stuff, you know,
Speaker 1: like save now by later instead of whatever. Oh gosh,
Speaker 1: let's make that a trend. And and and it's always
Speaker 1: free for students to write. Yeah, we we give a
Speaker 1: free year for students, so okay, graduate student, high school student.
Speaker 1: And also we we launched wine app together. So if
Speaker 1: you're listening to this and and you're like, oh man,
Speaker 1: this would be great for me, but also for like
Speaker 1: my teenage kid. Um, you can buy you know, you
Speaker 1: buy a subscription's a hundred bucks a year, so it's
Speaker 1: it's certainly reasonable. But then you can have I think
Speaker 1: up to five other people and we intend for this
Speaker 1: to be like family, you know, close family, but you
Speaker 1: could put your kids on it. You don't have to
Speaker 1: pay an extra subscription fee things like that. Once your
Speaker 1: kid flies the nest, which you hope happens, they get
Speaker 1: the free year and then they can go off on
Speaker 1: their way. So honestly, we really want the kids to
Speaker 1: be hooked on this, like we wanted just to think, oh, yeah,
Speaker 1: this is how you do money. You save up for stuff,
Speaker 1: you evaluate your priorities, you spend guilt free. We want
Speaker 1: to check all those boxes for these kids. I love it. Jesse,
Speaker 1: thank you so much for joining us on the show today. Man.
Speaker 1: We appreciate it. I appreciate him alright, Joel, what a
Speaker 1: great conversation man, talking about something that is a fundamental
Speaker 1: building block when it comes to your personal finances. Talking
Speaker 1: with Jesse about budgeting but specifically why NAB the software
Speaker 1: that he pioneered, that he founded. What was your big
Speaker 1: takeaway from our conversation with him today? Well, one, I
Speaker 1: feel like, you love budgets more than you love me.
Speaker 1: That's your best friend. And so I feel like this
Speaker 1: was probably like your favorite episode everything everything he said.
Speaker 1: I was just like, yes, I can see over there,
Speaker 1: you're just like you're jooling a little bit as he talked, Yeah,
Speaker 1: you're really into it. So no, I really appreciate every
Speaker 1: all the quint was he was diving into like the
Speaker 1: whole time, like the time space money continued very much
Speaker 1: learning out one of those things. I was going to
Speaker 1: say this, It is one of those things that it's
Speaker 1: hard for us to conceptualize, but software can help us
Speaker 1: actually understand how that's working and then make plans accordingly.
Speaker 1: But like our feeble human brains have a hard time
Speaker 1: with that. But the software actually really I think helps
Speaker 1: drive that home for people, which is something we need
Speaker 1: to wrap our minds around if we're gonna you know,
Speaker 1: save and invest effectively. But I think my big takeaway
Speaker 1: from this combo yeah, he said, knowing that you'll run
Speaker 1: out of money helps crystallize your priorities and the realities
Speaker 1: that we're all going to run out of money at
Speaker 1: some point. Depends on how quickly, depends on how much
Speaker 1: money we're making and how fast it's going out. But
Speaker 1: knowing that it's going to run out is going to
Speaker 1: help you crystallize those priorities. And so, uh, what is
Speaker 1: it that is most important to you? It's all about
Speaker 1: trade offs, right, And a lot of people look at
Speaker 1: look at our family, and they're like you guys, You
Speaker 1: guys are like, make enough money to afford two nice cars,
Speaker 1: what do you do and driving one old, beat up
Speaker 1: junkie minivan. It's like, we just don't care. But knowing
Speaker 1: that it's going to run out helps us crystallize our priorities.
Speaker 1: And our priorities lie elsewhere. Someone on Twitter today said,
Speaker 1: what if you just got a million dollars, which one
Speaker 1: thing you would not upgrade? What's one thing you would
Speaker 1: not spend more money on? And I'm like, my car,
Speaker 1: I just don't care enough and I would rather see
Speaker 1: that money go elsewhere. You think about the rivian, but
Speaker 1: you wouldn't pull the trick. I think about it. I'd
Speaker 1: lustily look at pictures on the internet. But then after that,
Speaker 1: I would say now and and so I just think
Speaker 1: that's really important for you to know because we all
Speaker 1: everybody has limits, right, and there's only so many yachts
Speaker 1: that Jeff Bezos can even buy. Yeah, that's probably bad example,
Speaker 1: but uh, like we all are going to run out
Speaker 1: at some point, and so let that crystallize in your
Speaker 1: mind the positive ways that you can use your budget
Speaker 1: to funnel money towards the areas that really matter. Nice man,
Speaker 1: I like that mine has to do with how it
Speaker 1: is you spend as well. He was basically at some
Speaker 1: point earlier, and I don't know his exact words, but
Speaker 1: he said that essentially, you shouldn't have any spending on
Speaker 1: your books that you feel guilty about. Essentially, everything that
Speaker 1: you spend money on, it should be something that you
Speaker 1: are maybe not necessarily excited about, but it shouldn't be
Speaker 1: something that you feel bad for doing. Uh. And that's
Speaker 1: because hopefully you have aligned how it is that you
Speaker 1: are spending your money with the ways that you want
Speaker 1: to spend your money. And so if there are ways
Speaker 1: that you don't want to spend your money, well, certainly
Speaker 1: it could have arisen from previous decisions that you made.
Speaker 1: Maybe that we're poor decisions. So if you're making like
Speaker 1: credit card payments or payments towards something that you have
Speaker 1: changed your mind on, well, that might be a case
Speaker 1: where things aren't aligned, but that's because you made a
Speaker 1: you know, you made a poor decision in the past
Speaker 1: about pushing those expenses into the future as opposed to
Speaker 1: do Yeah, yeah, absolutely, as opposed to pushing your money
Speaker 1: into the future. Um. But yeah. I think if you
Speaker 1: do have something in your life that you are spending
Speaker 1: on every single month, and not only is it not
Speaker 1: providing you you joy and it's not providing you value,
Speaker 1: but you feel like it's something that like like you
Speaker 1: have some sense of guilt associated with that, I would
Speaker 1: encourage folks out there to stop and to think why
Speaker 1: is it that you feel that way? Because it can
Speaker 1: It might either be something super simple. It could be
Speaker 1: a practical reasons that oh, well this is a category
Speaker 1: maybe that we shouldn't be spending this money in this way.
Speaker 1: So not only is it can it can it be
Speaker 1: fixed in a very practical way and that you just
Speaker 1: change how it is that you're spending. But maybe it
Speaker 1: could lead to you taking some time to self reflect
Speaker 1: and to think, why is it that I don't you
Speaker 1: know that I don't feel great about how it is
Speaker 1: I'm spending my money in this way? I think it
Speaker 1: could potentially lead to change in both areas. But I
Speaker 1: like that that you should not have any spending on
Speaker 1: your books that you feel guilty of. That I love
Speaker 1: too when you talked about the budget burned down, and
Speaker 1: it's this way to like completely reassess everything because you
Speaker 1: might have just listened in your like big old resets.
Speaker 1: There's a bunch of stuff that I really want to
Speaker 1: do that I can't actually afford. But I got all
Speaker 1: these other old expenses laying around in my life, and
Speaker 1: if I could just cut a couple of those out,
Speaker 1: then maybe I could actually spend more money, money more
Speaker 1: freely on the things that I really actually care about.
Speaker 1: And so you might have three cars in your driveway
Speaker 1: and you're like, listen and budget burned down. I'm gonna
Speaker 1: sell one of them, and really I'm gonna rent the
Speaker 1: other one out on tour. But if we only had one, yeah,
Speaker 1: wait a minute, those are the decisions. But but if
Speaker 1: you just uh, there, there is that sort of thing
Speaker 1: that happens to all of us inertia bias. We start
Speaker 1: we've done something, we kind of keep it going in perpetuity.
Speaker 1: But the budget burned down allows you to reassess everything
Speaker 1: and I think that that can be helpful. You might
Speaker 1: not want to change a bunch of stuff, but you
Speaker 1: might you might want to change a lot this year,
Speaker 1: so it's worth thinking about. All right, let's get back
Speaker 1: to to the beer that we had on this uh,
Speaker 1: this episode. This was igneous I p a by Hutton
Speaker 1: and Smith or your thoughts on this one. It's really good, man,
Speaker 1: this is a dry hops ip. These guys are out
Speaker 1: of Chattanooga, And yeah, it was tasty. It was dry
Speaker 1: hop Oftentimes you expect some of those I don't know,
Speaker 1: I guess I saw dry hopped, and I saw the
Speaker 1: color of the cannon. I was expecting like a New
Speaker 1: England like dry hot beer. But it definitely was kind
Speaker 1: of more in that traditional I p a bas uh
Speaker 1: And it had some some of those sharper notes that
Speaker 1: you get from a dry hot beer, a little more piny,
Speaker 1: little more bitter. Yeah, yeah, but not like over the
Speaker 1: top with like that West Coast resin. It's still had
Speaker 1: some sweetness that still had a multi backbone to it
Speaker 1: as well. But it definitely enjoyed it. What were your
Speaker 1: thoughts on this one? Similar Basically it tasted really like
Speaker 1: a classic I PA and it reminded me of like
Speaker 1: some of those olds here and about it I p
Speaker 1: a s that are just classics, but they don't make
Speaker 1: them like that very much anymore. Like the the tendency
Speaker 1: is towards the juicy Hayes bombs, and so this one
Speaker 1: has that more those like more piney, traditional bitter characteristics
Speaker 1: to pedo a little bit, but not over the top either.
Speaker 1: So yeah, I liked it. I liked it. It it's
Speaker 1: and it's nice to have a change up in I
Speaker 1: p a s. Because we do drink so many of
Speaker 1: those orange juice I A Yeah, big juicy one, so
Speaker 1: it's fun to try something, you know, a little more
Speaker 1: old school. Absolutely all right, Well, we'll make sure to
Speaker 1: link to wynab where you can learn more about you
Speaker 1: Need a Budget their budgeting software. You can find that
Speaker 1: link up in our show notes at how to money
Speaker 1: dot com. Joel, that's going to be it for this episode, buddy,
Speaker 1: until next time, Best Friends Out, Best Friends Out.