Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we're discussing money Simplicity breeds better results. Joel,
Speaker 1: would you be offended if I called you a simple name?
Speaker 1: I don't think so. No, I think I'll be all
Speaker 1: right with that. Well, because we have been talking about
Speaker 1: this episode, we know that simplicity is is a good thing.
Speaker 1: A lot of times when it comes to our money,
Speaker 1: complexity can be the enemy of what we actually need
Speaker 1: to do to make progress when it comes to our money.
Speaker 1: So I'm excited man, that we are going to talk
Speaker 1: about simplicity, how it plays a role in our personal finances,
Speaker 1: and how it is that we can go about simplify
Speaker 1: our money. Yeah, I completely agree. I think simplicity is
Speaker 1: far more important than we give it credit for in
Speaker 1: so many areas of our life. And so we're gonna
Speaker 1: talk about what simplicity brings to the table, how we
Speaker 1: can get rid of complexity as much as possible when
Speaker 1: it comes to how we handle our money, and how
Speaker 1: that actually does benefit us in a long run. And so, Matt,
Speaker 1: but you know what another important thing is when it
Speaker 1: comes to for our money, transparency. You like that see
Speaker 1: through cash well, so not actually see through cash, although
Speaker 1: that would be neat if that was possible. Or I
Speaker 1: used to have a credit card that was transparent. It
Speaker 1: was the first time Amex did the kind of clear
Speaker 1: transparent card, reminding that old school pepsi product Pepsi crystal
Speaker 1: or crystal pepsi whatever. Yeah, that's not natural. I like
Speaker 1: my high frucitose cords beverages to have some opaqueness to them,
Speaker 1: exactly right. I don't want to be able to see
Speaker 1: through that. But what I really wanted to get out
Speaker 1: with transparency is is how you know, the more we
Speaker 1: can understand, the more we know about the cost were
Speaker 1: incurring when we're buying something, the more we can understand
Speaker 1: whether it's worth it or not. And Matt recently on
Speaker 1: the show, we talked about getting increased financial aid. How
Speaker 1: you know students right now, if their household has experienced
Speaker 1: kind of a drop in income, that they can appeal
Speaker 1: for more financial aid from from school. And I just
Speaker 1: recently saw something about this, this website called tuition fit
Speaker 1: dot org and it allows students to upload their own
Speaker 1: financial aid award letters to see whether other people like
Speaker 1: them with the same academic profile and financial status could
Speaker 1: get a better deal from their school or from similar
Speaker 1: schools if they wanted to switch university. Yeah. So it's
Speaker 1: like basically, you upload it, you see what other people
Speaker 1: are paying for college, and you might realize, you know what,
Speaker 1: I'm getting a raw deal, and maybe I should consider
Speaker 1: transferring if I want to graduate with a whole lot
Speaker 1: less student loan debt. Nice man, I love that. I
Speaker 1: love the ability that we have now in pooling our
Speaker 1: information and our resources together. Uh, and in this case
Speaker 1: create a tool that students and in parents to other
Speaker 1: students who are oftentimes footing the bill, to to come
Speaker 1: together and see what is and what isn't a good deal.
Speaker 1: It also makes me think of what other areas in
Speaker 1: our life might a tool like this be be beneficial?
Speaker 1: You know, I'm thinking of maybe the largest expense that
Speaker 1: a lot of people have, which is their homes. How
Speaker 1: cool would it be if we could upload the quote
Speaker 1: that we received from some of these different lenders and
Speaker 1: maybe compare that to other quotes that others received to
Speaker 1: have a similar just a gross income, maybe maybe similar
Speaker 1: credit score exactly. Yeah, And so like, I think it
Speaker 1: would be really beneficial there. I could see it also
Speaker 1: being awesome. Maybe even in healthcare, like what are you
Speaker 1: paying for health insurance? And what kind of quotes are
Speaker 1: you receiving on certain procedures, because there's are really things
Speaker 1: we talk about because a lot of times, at least
Speaker 1: when it comes to healthcare vis it's like it's not
Speaker 1: that big of a deal. You don't really think about it,
Speaker 1: but it all adds up, you know, and so you
Speaker 1: don't really think about it because it just feels kind
Speaker 1: of petty to be like, hey, how much do you
Speaker 1: guys pay to go for a wellness check out for
Speaker 1: your one year old? You know, like that's not really
Speaker 1: something I've asked you, but actually that's is something we
Speaker 1: should talk about. But certainly when it comes to bigger
Speaker 1: expenses like mortgages, I could really see that being valuable. Yeah,
Speaker 1: and it seems like it's been valuable for the roughly
Speaker 1: six thousand people that have uploaded their profiles on tuition
Speaker 1: fit dot org. Yeah, so for our listeners who are
Speaker 1: currently in college or have a kid in college and
Speaker 1: they're looking to see if the school they're currently enrolled
Speaker 1: at can increase, you know, the allocation of funds their way,
Speaker 1: or they're potentially looking to go to another their school
Speaker 1: in order to save money. I think this website can
Speaker 1: be some help, so we'll we'll be sure to link
Speaker 1: to that one in the show notes. Yeah, man, we
Speaker 1: will definitely do that. Let's go ahead and introduce our
Speaker 1: beer for this episode, which is called Let's see Scorpius Morchella.
Speaker 1: Is that how you say that? You think? I think so. Yeah.
Speaker 1: This is another one by Toppling Goliath, which was donated
Speaker 1: to the show by Kelsey again up there in Iowa.
Speaker 1: So Kelsey thinks again for sending this one our away.
Speaker 1: And we're gonna share our thoughts on this beer at
Speaker 1: the end of the episode. Yeah, we will. But let's
Speaker 1: get onto money, simplicity, breeding better results. Matt and Yeah,
Speaker 1: we're talking about simplicity and finances today because learning how
Speaker 1: to simplify your approach to your money, it really is
Speaker 1: a game changer. Right. Our lives have so much complexity already.
Speaker 1: Most listeners out there probably have two, maybe three different
Speaker 1: email accounts on your phone. That alone can feel a
Speaker 1: bit overwhelming as notifications just continue to pop in emails
Speaker 1: from work, personal emails, all sorts of things. Even just
Speaker 1: talking about it right now has been a little sweating
Speaker 1: under the brow. I have five different email accounts. That's
Speaker 1: that's way too many for the five different lives that
Speaker 1: lead the different families you have. Stuff like that just
Speaker 1: getting Yeah, and the more complex our our lives get,
Speaker 1: the more of those seemingly beneficial things tend to drain us. Right.
Speaker 1: Email initially gives us this ability to connect and to
Speaker 1: write people when we need to, But when we have
Speaker 1: multiple accounts that we're having to check on on a
Speaker 1: daily or hourly basis, it begins to feel like it's
Speaker 1: too much. That's certainly true of technology, but the same
Speaker 1: can be true of our finances. The more complicated the
Speaker 1: approach that we take to our money, well, the more
Speaker 1: likely the wheels are going to come off as we
Speaker 1: bagged the system altogether down the road. Yeah, man, I
Speaker 1: like what you said about it being draining, you know, Like,
Speaker 1: how is it that technology is actually making us more
Speaker 1: exhausted when it's purpose should be to make things easier
Speaker 1: for us? Also, how is it that with so many
Speaker 1: different great financial tools and products at our disposal, so
Speaker 1: many people are having a difficult time getting ahead with
Speaker 1: her money? Um, I think it's because they're overwhelmed, you know,
Speaker 1: we have too many complex options available to us, and
Speaker 1: it's actually keeping us from doing the right things. So
Speaker 1: we'll highlight the importance of simplicity and discuss how to
Speaker 1: make your personal financial life a winning mix straightforward yet
Speaker 1: thoughtful actions. Yeah, that's the goal, right, Simplicity breeding something
Speaker 1: that that isn't too dumb down, that we're not effective,
Speaker 1: but that it makes it easier for us to actually
Speaker 1: do the things that need to get done. And yeah, this,
Speaker 1: I would say, Matt is kind of the financial version
Speaker 1: of a recent episode that we had with Joshua Becker
Speaker 1: where he came talk about minimalism, right, yea yeah, And
Speaker 1: in that combo we talked about the kind of clarity
Speaker 1: that owning fewer things can bring. Well, the same thing
Speaker 1: is true when we're talking about our money. We'll have
Speaker 1: heightened clarity, the ability to achieve things that we might
Speaker 1: have not thought possible if we prioritize simplifying things. And
Speaker 1: I'm seeing this more and more of my own life
Speaker 1: as I get older. Our financial lives tend to get
Speaker 1: more complicated, which can bmudy the waters and distract us
Speaker 1: from the tasks that we truly need to focus on.
Speaker 1: Whether their money related or not. And this actually makes
Speaker 1: me think about you know, a professor I don't remember
Speaker 1: his name off the top of my head, but he
Speaker 1: developed like this, this index card. He wrote, aything you
Speaker 1: need to know about finances in just this one little place,
Speaker 1: and it kind of became this viral sensation. People are like, oh, really,
Speaker 1: all you actually need to know can fit on this
Speaker 1: index card. Yeah, and and in so many ways it's true,
Speaker 1: when we're taking a simple approach, the things that we
Speaker 1: actually really do need to know can fit on an
Speaker 1: index card. It's kind of funny though. He ended up
Speaker 1: writing a book about it later and like the opposite
Speaker 1: of the whole premise of the card exactly. I thought
Speaker 1: that that was really funny that he turned it into that.
Speaker 1: But it's true. You know, there isn't this this incredibly
Speaker 1: wide breadth of information that we need to have knowledge on,
Speaker 1: you know, Like one of the benefits of simplifying is
Speaker 1: that we're able to narrow our focus on the areas that,
Speaker 1: you know, where we can have a deeper impact. Um.
Speaker 1: You know, there are many different ways to invest your money,
Speaker 1: but it takes a long time to feel that you've
Speaker 1: mastered how to invest well. You know, I could certainly
Speaker 1: learn about commercial real estate investing, but because of like simplicity,
Speaker 1: I'm gonna stick with single family homes residential investing inside
Speaker 1: a limited geographic area. And instead of learning how to
Speaker 1: trade options, maybe shorting stocks, becoming an expert commodity trader
Speaker 1: that I think you can handle that one. I probably could.
Speaker 1: Maybe I don't know. I like to overcomplgate stuff. I
Speaker 1: could think that these are ways that I'm gonna outperform
Speaker 1: the market in the coming years. But instead I'm gonna
Speaker 1: stick to the index funds that I know are going
Speaker 1: to do well. They're gonna mirror the entire stock market.
Speaker 1: And you know, you can't really go with a simpler
Speaker 1: approach than that. Yeah, simple as can be, that's for sure.
Speaker 1: I think to simplicity, Matt, it can breed confidence. Right
Speaker 1: through simplifying, you're gonna have a thorough understanding of the
Speaker 1: things that you do per take in. It feels so
Speaker 1: good to actually understand where you're putting your money and
Speaker 1: why you're doing the things that you're doing. And in fact,
Speaker 1: people can get into real big trouble when they don't
Speaker 1: fully comprehend the financial products that they're participating in. That's
Speaker 1: where scames and rip offs come into play. Well, we'll
Speaker 1: talk about that in just a minute. And also too,
Speaker 1: it's where we get taken advantage of by salespeople who
Speaker 1: want to sell us products that are more expensive than
Speaker 1: they're much simpler versions that we can easily understand and
Speaker 1: purchase ourselves. And one major example of that something like
Speaker 1: life insurance. Yeah, that's right, man, that's why we like
Speaker 1: term life insurance is pretty simple. And you know, no
Speaker 1: one's looking to sell you a term life insurance plan
Speaker 1: because there's not a whole lot of money involved in it.
Speaker 1: You're not gonna get ripped off. It does exactly what
Speaker 1: you wanted to do, which is provide benefits, provide a
Speaker 1: payouts in case you die. Right, that's what you need
Speaker 1: life insurance to do. Yeah, And there are all these
Speaker 1: complicated types of life insurance that muddy the waters we
Speaker 1: need that include investing inside of your life insurance policy,
Speaker 1: and those are the things you want to stay away from.
Speaker 1: There too complex that even really fully understand for most
Speaker 1: of us at least, that's right. And so we're talking
Speaker 1: about the benefits of simplicity. Another way that we can
Speaker 1: talk about those benefits are by talking about the drawbacks
Speaker 1: of complexity. We'll get into some of those right after
Speaker 1: the break. All right, Matt, we're back from break. We're
Speaker 1: talking about simplicity in the importance of keeping your personal
Speaker 1: finances simple, and to kind of drive that point home,
Speaker 1: let's talk about some of the problems that come when
Speaker 1: we do increase the level of complexity when it comes
Speaker 1: to our personal finances. There are a lot of drawbacks
Speaker 1: when things get out of hand and things become too
Speaker 1: complex in our personal lives when it comes to our money,
Speaker 1: and one of those big problems is in action. Right,
Speaker 1: we we tend to avoid doing things that are overly
Speaker 1: complicated or that we perceive to be too difficult. One
Speaker 1: of the reasons I think that people hate thinking about
Speaker 1: their personal finances or sometimes even getting started budgeting or
Speaker 1: anything like that when it comes to their money is
Speaker 1: that they imagine or they believe that it's too complex.
Speaker 1: There's just too much to think about, and so then
Speaker 1: we just tend to throw up our hands and stop
Speaker 1: thinking about our money at all. And if we do that,
Speaker 1: it's highly unlikely they were actually going to be in
Speaker 1: a strong position financially. If we've just thrown our hands
Speaker 1: up and said no way. But if we're able to
Speaker 1: keep things simple, then the likelihood that will be able
Speaker 1: to take action to increase our debt, slashing our our
Speaker 1: savings accounts and and wealth building efforts, well, the likelihood
Speaker 1: goes way up that are actually going to do something
Speaker 1: and get started and start to positively impact our financial future.
Speaker 1: And this is such an important point, right, the fact
Speaker 1: that when things get complicated, we resist them, and I
Speaker 1: think that the vast majority of folks kind of fall
Speaker 1: into this, into this boat. However, there's a flip side
Speaker 1: to it, right there is the potential that complexity can
Speaker 1: cause you to take too much action. With complexity, you're
Speaker 1: in the risk of your finances maybe taking up too
Speaker 1: much of your time, maybe you get obsessed with it.
Speaker 1: If you're the type of person who likes to give
Speaker 1: something you know, or someone who maybe focuses on the
Speaker 1: details too much, then an overly complicated financial life has
Speaker 1: the potential to dominate your life. This is, you know,
Speaker 1: the opposite of inaction, and this is where it takes
Speaker 1: over your life. Things can get really out of whack
Speaker 1: if you're devoting way too much of your time towards money.
Speaker 1: You know, even if you do try to, you know,
Speaker 1: make it sound responsible or sophisticated by calling it, you know,
Speaker 1: your personal finances, it's still just your money. And so
Speaker 1: we try to approach our money in a way that
Speaker 1: is balanced. You know, we know the importance of handling
Speaker 1: our money well now, but we also don't want that
Speaker 1: to become what characterizes our life. If that becomes all
Speaker 1: of who we are, then that's maybe an example of
Speaker 1: having won the battle that law the war. Yeah, basically,
Speaker 1: then money has taken all the way over and that
Speaker 1: complexity has basically ruined our lives as we let money
Speaker 1: become the number one priority. And I wanted to share
Speaker 1: that one specifically to man because that's kind of a
Speaker 1: personal struggle of mine. You know, like we kind of
Speaker 1: joke about how I over complicate things and make things
Speaker 1: overly sophisticated, and I analyze stuff way too much, get
Speaker 1: way too bogged down into the details. And on one hand,
Speaker 1: like it is good to have those details, but on
Speaker 1: the other hand, if you let it get carried away,
Speaker 1: then it's going to be something you find yourself having
Speaker 1: to kind of push back against, uh in the future.
Speaker 1: So just a little warning there, yeah, Yeah, And I
Speaker 1: think so. Another thing about complexity to Matt is that complexity,
Speaker 1: at least on the surface, can seem impressive. A lot
Speaker 1: of financial products, apps, or philosophies can seem flashy, but
Speaker 1: then underneath the surface they don't actually offer much reward.
Speaker 1: There might be very little that was really gained because
Speaker 1: this out of complexity is often accompanied by higher fees. So,
Speaker 1: for example, there are all sorts of high priced investment
Speaker 1: funds that you could stick your money in. You can
Speaker 1: talk to some smart people that make them sound like
Speaker 1: they're totally worth their money, that they're going to outperform
Speaker 1: the market as a whole, or that you're just dumb
Speaker 1: if you're not going that route right and and and
Speaker 1: seeing that complexity just on its face can make it
Speaker 1: seem like, well, if I take the simple route, maybe
Speaker 1: I'm the stupid one. Maybe I don't actually understand, and
Speaker 1: that lack of understanding causes us to actually feel drawn
Speaker 1: to the more complex offering. But having all of your
Speaker 1: assets in one to three low cost funds that you
Speaker 1: can actually understand, it's so much better. Right. It's not flashy,
Speaker 1: but it works. And there's this quote from Paul Samuelson.
Speaker 1: He says investing should be more like watching paint dry
Speaker 1: or watching grass grow. If you want excitement, taking a
Speaker 1: Hunter Bucks and go to Las Vegas. And I totally
Speaker 1: agree with that. Right, Simplicity might be boring, but at
Speaker 1: least you can wrap your mind around it, and that's
Speaker 1: something that works. Like to be able to be a
Speaker 1: good investor, we have to be able to look past
Speaker 1: the things that on the surface look impressive, they sound smart,
Speaker 1: but if we can't fully understand them, if they're too
Speaker 1: complex for us to get our minds around, then it's
Speaker 1: something that we really shouldn't be partaking in. Yeah, it's
Speaker 1: easy to overpay, get charged these unnecessary fees when it's
Speaker 1: something that's complex and you don't understand it. Complexity, man,
Speaker 1: it also makes us more susceptible to scams or even
Speaker 1: just bad products that are out there when we don't
Speaker 1: understand what's going on. Right. Uh, there's an article every
Speaker 1: week in some newspaper around the country about maybe a
Speaker 1: Ponzi scheme, you know, being vested up. Investors were promised
Speaker 1: astronomical returns for trusting a certain individual with their net worth,
Speaker 1: and yet almost always that money was spent to enrich
Speaker 1: that person until everything comes tumbling down like a house
Speaker 1: of cards. If instead we decided only to invest in
Speaker 1: ways that we can fully understand, like simpler ways, then
Speaker 1: we make it much less likely that we'll get taken
Speaker 1: in by these get rich promises. Yeah, it's not necessarily
Speaker 1: stupidity that causes people to invest with someone who's running
Speaker 1: a Ponzi scheme. Oftentimes it's just a desire to to
Speaker 1: do something good with their money, but it's something that
Speaker 1: that seemingly complex that they can't understand, and it seems
Speaker 1: appealing for precisely that reason, right, But ultimately, actually posi
Speaker 1: schemes are are super simple. It's it's usually someone just
Speaker 1: completely bilking you of of your money and running off
Speaker 1: with it, which is obviously terrible. And actually one of
Speaker 1: my favorite authors, Matt ben Carlson, wrote a book called
Speaker 1: Don't Fall for It about It's this brief history of
Speaker 1: financial scams. I'm reading it right now. It's really crazy
Speaker 1: to see the different things that people fall for. We're
Speaker 1: gonna have him on the show soon, which I'm excited about.
Speaker 1: That's gonna be a great interview coming up in the
Speaker 1: upcoming months. Yeah, and but it's not always scams, right,
Speaker 1: Sometimes it is just bad products and and it just
Speaker 1: makes me think of like home warranties or extended warranties,
Speaker 1: and these are the sorts of things that we're super
Speaker 1: susceptible to buying. It might cost us fifty bucks on
Speaker 1: a new TV that we purchased, or bucks on a
Speaker 1: home that we bought. Those things add up, but oftentimes
Speaker 1: those products aren't really worth the money we've paid for them,
Speaker 1: not even close, right, And if you look at the
Speaker 1: mice type on a lot of those things, there are
Speaker 1: many issues with that potential product that aren't covered. There
Speaker 1: are deductibles that you have to pay in order to
Speaker 1: get your item fixed. On their surface, they're touting something
Speaker 1: really easy, but underlying is something really complex that costs
Speaker 1: a lot of money and doesn't really offer you much
Speaker 1: in return. And Jel, we wanted to share one other
Speaker 1: drawback of complexity, and and that is of rigidity. Another
Speaker 1: downside to complexity might be that you're more likely to
Speaker 1: be inflexible, maybe when it comes to how you budget
Speaker 1: you created this machine. You know, like this process that
Speaker 1: you adhere to no matter what you're a robot. And
Speaker 1: while in some cases this can be a good thing,
Speaker 1: you know, like sticking to the plan, right, Like, if
Speaker 1: something comes up, you stick to the plan, You bide
Speaker 1: by the rules that you set forth. But like, this
Speaker 1: also doesn't really leave you for a lot of room
Speaker 1: to be a little more spontaneous and to actually enjoy
Speaker 1: the fruits of your labor. And I'm thinking about the
Speaker 1: stimulus checks earlier this year, like how many people just
Speaker 1: kind of took that check, plugged it into their machine,
Speaker 1: into their budgeting machine, and just kind of absorbed it
Speaker 1: without ever really seeing the results of that. Right, on
Speaker 1: one hand, I think that that's a good thing, right,
Speaker 1: like maybe at least ten or that at the very
Speaker 1: least was invested. But on the other hand, you know,
Speaker 1: could you have maybe spent some of that money in
Speaker 1: a way that kind of moved the needle for you emotionally,
Speaker 1: you know, like that could have gone a long way,
Speaker 1: maybe even as a sort of a morale boost. And
Speaker 1: this is another one of these drawbacks that I kind
Speaker 1: of straw with myself. Man. You know, it's easy for
Speaker 1: for some to become obsessed with their personal finance and
Speaker 1: you know, and their budgeting systems, the different spreadsheets that
Speaker 1: they've created over the years that direct where their money goes.
Speaker 1: Um But at the same time, they can also suck
Speaker 1: the fun out of lots of other areas in our life,
Speaker 1: you know. And it can also prevents you from being
Speaker 1: more generous as well. There's lots of different personal drawbacks
Speaker 1: that you know on the service you would say, oh, no,
Speaker 1: that's important to me, But are you actually going to
Speaker 1: do those things or are you slave to these systems
Speaker 1: that you've created. I wanted to mention this one because
Speaker 1: while oftentimes we do, you know, to how the benefits
Speaker 1: of budgeting and creating these different systems, there can be
Speaker 1: a dark side to it as well. Yeah, I think
Speaker 1: we were made to run budgets, not to let budgets
Speaker 1: run our lives, right, And I think that's kind of
Speaker 1: what happens sometimes when we let it become too complex
Speaker 1: and overbearing. Is we let the budget run us even
Speaker 1: when we want to make shifts in our own lives.
Speaker 1: Let's say we want to change jobs, we want to
Speaker 1: work in a completely different sector, we want to start
Speaker 1: our own business, and yet we have this rigid formula
Speaker 1: that we have to max out a roth ira every year.
Speaker 1: And you know what if I keep doing that I'm
Speaker 1: not gonna be able to launch my own business. I'm
Speaker 1: not gonna have the capital, the startup capital in order
Speaker 1: to do that. And that would be a case right
Speaker 1: where complexity gets in the way of the bigger, more
Speaker 1: important goals that we have. And Matt, we just kind
Speaker 1: of dogged on complexity a good bit. But the positive
Speaker 1: side of that is simplicity. And there are so many
Speaker 1: ways in which simplicity can be a huge benefit to
Speaker 1: our personal finances. We'll get into some specific ways that's
Speaker 1: the case, and then how to kind of create more
Speaker 1: simplicity in your financial life. Let's get to that right
Speaker 1: after the break. All right, Joe, we're back from the
Speaker 1: break talking about money simplicity and how that breeds better results.
Speaker 1: And I was just kind of dogging on myself for
Speaker 1: having an overly complicated financial System's for my favorite parts
Speaker 1: of the show when I talk about myself. You can
Speaker 1: be like an American Injina Warrior when it comes to
Speaker 1: your your budget and your personal finances. My self flagellation, well,
Speaker 1: just your intensity out say maybe you know and for
Speaker 1: us this cone opsal course of a budget that you
Speaker 1: have to get through every every month. It's a good illustration.
Speaker 1: It's a good thing we have like a counselor for
Speaker 1: me after every episode of record, I kind of like
Speaker 1: lift me back up, you know, out of the depths
Speaker 1: that I lower myself into. And so while you know
Speaker 1: the system though is good for us, I will say,
Speaker 1: we've got to a place where that's fantastic and it's
Speaker 1: great for us. Every penny has a name, like literally
Speaker 1: every penny goes accounted for. But for most folks that's
Speaker 1: not the case, especially if you're just getting started with
Speaker 1: your personal finances. And so in that case, what we
Speaker 1: would recommend, man is for those folks to have a
Speaker 1: simple budget. You know, we talked about this back when
Speaker 1: we discussed the best budgets for different personality types and
Speaker 1: big picture, a simple budget is just gonna be way
Speaker 1: better than no budget at all. So instead of no budget,
Speaker 1: just simplify it to a basic eight twenty budget. Uh,
Speaker 1: that's where of your money goes towards day to day
Speaker 1: expenses and you're saving. Or you can even look to
Speaker 1: a fifty thirty twenty budget. That's where fifty percent is
Speaker 1: going towards needs, towards once and then you're putting towards retirement.
Speaker 1: You know, just the goal here is to get you
Speaker 1: moving in the right direction and to reduce any barriers
Speaker 1: that might be keeping you from taking action altogether. We
Speaker 1: talked about earlier how when things are overcomplicated, it keeps
Speaker 1: you from taking those first steps to begin with. Well,
Speaker 1: if that's you, they just look at a twenty budget.
Speaker 1: I love the simplicity of that. How just make sure
Speaker 1: that you're setting aside of your income and the rest
Speaker 1: do what you want. You want to spend it all
Speaker 1: on housing, Sure you want to, you know, have a
Speaker 1: really nice car, that's fine. But as long as you
Speaker 1: said aside that, that's an awesome start. Yeah, and it's
Speaker 1: super simple, super easy to actually adhere to. Now, let's
Speaker 1: talk about debt too, because that's something that can truly
Speaker 1: complicate the financial picture of our lives. And you know,
Speaker 1: we talk about the debt snowball versus the debt avalanche.
Speaker 1: You know, we we did an episode all about how
Speaker 1: you tackle your debt problem and which one of those
Speaker 1: methods is better. And I think you and I ultimately
Speaker 1: decided on the fact that whatever method you can stick to,
Speaker 1: whichever one is simpler for you to implement, is actually
Speaker 1: the best one right right. And on another note, when
Speaker 1: it comes to debt, well, getting rid of your debt
Speaker 1: as quickly as possible can be the other simple method.
Speaker 1: I think sometimes we wave approach of investing versus paying
Speaker 1: off debt. And the thing that we don't bring into
Speaker 1: the picture is is that having that debt, well, it's
Speaker 1: another bill to pay. It's something else weighing on your mind.
Speaker 1: And Matt, when we had Andy Hill on the show
Speaker 1: a while back, who is the host of the Marriage,
Speaker 1: Kids of Money show, he talked about why he paid
Speaker 1: off his mortgage in four years. Obviously he had this
Speaker 1: just laser focus to getting rid of that mortgage debt,
Speaker 1: like he didn't want to have any sort of debt
Speaker 1: in his life. That's what he prioritized. And I understand
Speaker 1: the motivation behind that. It's the simplicity in it, all right,
Speaker 1: to not have any sort of bill do every single month?
Speaker 1: How good does that feel? And there are so many
Speaker 1: people in the personal finance space that would give Andy
Speaker 1: a hard time for that decision. They would run the
Speaker 1: numbers and they would say, well, here's how much more
Speaker 1: your your net worth is going to be over ten
Speaker 1: or twenty years by instead of paying off the mortgage
Speaker 1: by investing the difference. And honestly, Andy's path is not
Speaker 1: the path that I'm on, but I can appreciate it.
Speaker 1: I can appreciate his desire for simplicity and how that
Speaker 1: fueled his mission to crush that mortgage sooner. I just
Speaker 1: think that's really cool, and that's something a lot of
Speaker 1: people should at least take into consideration, because if simplicity
Speaker 1: can actually move the ball forward, whereas the complex solution
Speaker 1: feels a little more unapproachable, unattainable, then I would say,
Speaker 1: go simple every day, all day. Yeah. And so if
Speaker 1: you're finding yourself in that position, right, that's you don't
Speaker 1: worry necessarily about juggling paying off debt and investing at
Speaker 1: the same time. Focus on whatever is going to get
Speaker 1: you moving, you know. And so in this case, pay
Speaker 1: off that debt. Don't worry about investing at the same
Speaker 1: time until you touched on actually paying off debt. Like
Speaker 1: how to go about paying off debt? Well, this is
Speaker 1: a huge argument in favor of the debt snowball approach. Right,
Speaker 1: you could create a super complicated plan to your if
Speaker 1: your debt by listening out what you owe, the interest rates,
Speaker 1: the length of the term, maybe even trying to figure
Speaker 1: out like how paying off certain debts are going to
Speaker 1: impact your credit. But if you haven't gained any traction
Speaker 1: with an approach like this, then maybe going with a
Speaker 1: simple debt snowball is going to be better because regardless
Speaker 1: of the interest rate, if you're focusing on, you know,
Speaker 1: whatever debt is the smallest and you're able to move
Speaker 1: forward and you kind of get that emotional high, well,
Speaker 1: that's gonna spur you on to pay off that next
Speaker 1: debt and that's going to allow you to to breed
Speaker 1: better results. Yeah, it's one less paperless bill in your
Speaker 1: email inbox, and it's one fewer piece of mental accounting
Speaker 1: that you have to do because it's one fewer bill
Speaker 1: that you have in your life. So I think you're right.
Speaker 1: I mean I think that that if we're our desires
Speaker 1: for simplicity in paying down debt, the debt snowball is
Speaker 1: the best approach. Matt. Let's talk about to something else
Speaker 1: that helps directly create simplification in our life, and that's automation.
Speaker 1: And we dove deep into automation and how that impacts
Speaker 1: your personal minuses back in episode one one and setting
Speaker 1: up automatic four O one K contribution increases or direct
Speaker 1: bill pay means that those financial tasks are gonna get
Speaker 1: done without you having to think about it. So in
Speaker 1: your attempts to make your financial life simpler, look to
Speaker 1: automation as a big part of that process. I think
Speaker 1: I specifically mentioned in that episode my super weird desire
Speaker 1: to actually physically go in to the back end of
Speaker 1: Vanguard and manually increase the amount that I'm investing. I
Speaker 1: think I'm by far the exception to the rule in this, though.
Speaker 1: I think most people should have it on autopilot for
Speaker 1: simplicity and for the fact that it's actually gonna get
Speaker 1: done if they let an algorithm take are of that
Speaker 1: increase as opposed to trying to manually do it every
Speaker 1: so often. And another way, man, that we can simplify
Speaker 1: our money even more is to have fewer accounts with
Speaker 1: the different companies in our lives. And the byproduct of
Speaker 1: this means that, like you need less apps on your phone,
Speaker 1: uh and there aren't as many passwords to remember, which
Speaker 1: is definitely something that comes as a benefit, right Gosh,
Speaker 1: I hate remembering passwords, and I know they have those
Speaker 1: password apps. I should probably give one of them a
Speaker 1: shot like dash Lane, right, Yeah, Actually, you know what
Speaker 1: we should actually devote and maybe an entire show to that. Well,
Speaker 1: I should devote my life actually getting one of those.
Speaker 1: That's because I know all of your passwords were the same.
Speaker 1: I have like two passwords I've ascalated between. You might
Speaker 1: be one of those guys at least it's not password
Speaker 1: one or something like that. But the benefit of consolidating
Speaker 1: and into fewer companies, though, is that you can see
Speaker 1: more of your information. Anytime I'm able to streamline and
Speaker 1: reduce the number of accounts that I have did I'm
Speaker 1: all for that. But even still, if you feel the
Speaker 1: need for maybe some different accounts to help you do
Speaker 1: better at saving for maybe a specific goal. But then
Speaker 1: you can look to a bank like our I They've
Speaker 1: got these different savings buckets that you create within the
Speaker 1: savings account. It's really sweet, really easy to set up.
Speaker 1: That's a great way for you to have some of
Speaker 1: that differentiation, some of that detail while also just having
Speaker 1: a single account. Do you have a bucket, uh set
Speaker 1: up directly for my birthday present that you're saving for.
Speaker 1: Well that this kind of goes contrary to a simplification.
Speaker 1: But I do have a bucket that's labeled birthdays forward
Speaker 1: slash parties. I think you had one more forward slash job,
Speaker 1: Joel as well, like you deserve your your own title
Speaker 1: within that bucket. I mean, I think so well for you,
Speaker 1: maybe I'll just open up an entirely new account now
Speaker 1: that's what I'm talking about them better for you. That
Speaker 1: might be too complex, but but I agree, I think
Speaker 1: the savings buckets in the back end of ally are
Speaker 1: pretty sweet. Another example of having fewer accounts with fewer
Speaker 1: companies might be having fewer credit cards. And I think
Speaker 1: having to credit cards can kind of help people maximize
Speaker 1: most of the rewards they're seeking while at the same
Speaker 1: time not over complicating finances and not having too many
Speaker 1: pieces of plastic in their wallet, which also the complexity
Speaker 1: of having too many credit cards can get you into trouble, right,
Speaker 1: So so that's one area if if trying to open
Speaker 1: up new credit cards and get the sign up bonuses,
Speaker 1: which I love, I know you do, yeah, but for
Speaker 1: so many people it just becomes too much, right, It's overwhelming,
Speaker 1: And so yeah, something that that is good on the
Speaker 1: surface becomes overwhelming to you and it's just not worth it. Yeah,
Speaker 1: but that Chase the Fire sign up bonus so good.
Speaker 1: It's so good. It's the big fan. So, Matt, I
Speaker 1: think at this point in the show, people should consider
Speaker 1: giving themselves a list of of super simple money tasks, right,
Speaker 1: maybe one a day for a month, or even just
Speaker 1: one a week, whatever you can handle, right, but focus
Speaker 1: on achievable tasks that move you in the direction of
Speaker 1: simplifying your finances. It's important to have like this sense
Speaker 1: of accomplishment along the road, right. Even if the immediate
Speaker 1: financial impact is small, the effect that it has on
Speaker 1: you mentally is huge. So the next step in battling
Speaker 1: complexity and embracing simplicity is to have those simple money
Speaker 1: tasks that you can set out to accomplish in a
Speaker 1: reasonable timeframe. And these are these really daunting tasks, man,
Speaker 1: We're talking about these tiny, little, bite sized tasks. Like
Speaker 1: we're talking about cutting maybe some of those streaming services
Speaker 1: that you don't even use anymore. Maybe you can start
Speaker 1: to you know, track your spending with Mint, go ahead
Speaker 1: and sign up for that account. But then after that
Speaker 1: you can move maybe to some of these slightly larger
Speaker 1: tasks like switching banks, if you haven't opened an online
Speaker 1: account yet. If you can start doing these things, you'll
Speaker 1: be setting yourself up for success with this kind of
Speaker 1: initiative by focusing on those achievable tasks. Yeah, and that
Speaker 1: would be like a simple Google doc of simple money
Speaker 1: tasks that you want to accomplish. Sit down at your computer,
Speaker 1: if you have a partner, sit down with them and
Speaker 1: create a task list together that feels easy enough to
Speaker 1: accomplish in in a reasonable time frame, because that's what's
Speaker 1: going to actually make it happen. Set calendar reminders too,
Speaker 1: if that, If that's helpful in the process. And I
Speaker 1: think it's helpful to to realize that getting your money
Speaker 1: in a good place it's not a series of heavy lists.
Speaker 1: I think it feels like that from the outside. It
Speaker 1: feels like that when you're getting started. But getting good
Speaker 1: with money is actually a lot of really small, simple
Speaker 1: moves that grow in importance over time. Right, These are
Speaker 1: simple tasks that all of us can perform, and each
Speaker 1: and we implement well. It grows our confidence that we
Speaker 1: are handling our money in a smart way and that
Speaker 1: we can pay off that debt, grow our savings, and
Speaker 1: increase our net worth. So let's get rid of complexity
Speaker 1: embrace simplicity, knowing that the simple approach is actually gonna
Speaker 1: cause us to avoid a lot of headache. It's gonna
Speaker 1: cause us to obsess less over our finances over time. Well,
Speaker 1: also so much in the financial realm, when it comes
Speaker 1: down to it, the simple choice is often the better choice. Yeah,
Speaker 1: you know, kind of what we're talking about here is
Speaker 1: behavior modification, right. The goal isn't necessarily to keep things
Speaker 1: simple forever, because over time, like things do, tend to
Speaker 1: get a little more complicated in detailed. But by then
Speaker 1: you'll have gained some of the experience that's needed to understand,
Speaker 1: you know, what will and what won't work for you.
Speaker 1: If you can start with those heavier lifts, those more
Speaker 1: daunting tasks, uh, the more power to you, But for
Speaker 1: everyone else, starting from a place of understanding can get
Speaker 1: you moving in the right direction while keeping a balanced
Speaker 1: life and avoiding some of those costly mistakes along the way. Yeah, Matt,
Speaker 1: simplicity so underrated so much of the time, and in
Speaker 1: particular when it comes to how we handle our money.
Speaker 1: Such a hidden little gym. Simplification it is, it is,
Speaker 1: And yeah, so hopefully this was encouraging for a lot
Speaker 1: of people out there who think personal finances need to
Speaker 1: be complex. It's not a subject that needs a ton
Speaker 1: of complexity. So much of what you need to know
Speaker 1: breaks down to just a couple easy rules to understand.
Speaker 1: The simplest of which to understand is don't spend more
Speaker 1: than you make. Right. So that's the absolutely most simplified
Speaker 1: basic version of personal finance. Right there, A nice little
Speaker 1: final maxim to end on. All right, man, let's switch
Speaker 1: it back to the beer. This episode, we enjoyed a
Speaker 1: Scorpius Morchella. This is a double I p A from
Speaker 1: Toppling Goliath out of Decorah, Iowa, Man, what were your
Speaker 1: thoughts on this beer? All right? So I was getting
Speaker 1: that tingly hop sensation math that you mentioned sometimes when
Speaker 1: it comes to fresh hops. I think it had a
Speaker 1: little bit of tangerine, a little bit of pineapple notes,
Speaker 1: and that touch of sweetness because double I pas often
Speaker 1: have a little more sweetness than than just a single
Speaker 1: I p A. And this one brought some good sweetness,
Speaker 1: but it wasn't overly sweet. It kind of hit that
Speaker 1: that perfect note. And so, yeah, I really like this one.
Speaker 1: If I had to compare it to the the other
Speaker 1: one from Toppling Goliathe that we had on Monday's episode,
Speaker 1: the Pseudo su I think I picked the pseudo suit
Speaker 1: over the Yeah, but but this one was really tasty
Speaker 1: to the see was a really good beer. Yeah, this
Speaker 1: is a different beast. This was a double I p A.
Speaker 1: And with a double a lot of times you get
Speaker 1: really bold flavors, and I feel like that's what this
Speaker 1: beer is delivering. I feel like it's got a nice
Speaker 1: hot punch, so am I telling it kind of has
Speaker 1: a touch of that kind of blue cheese funkiness going on,
Speaker 1: which actually really enjoy even though it sounds weird every
Speaker 1: time I say it out loud. But I also saw
Speaker 1: on the can that they brew this beer every spring
Speaker 1: to celebrate when the brewery takes off and they all
Speaker 1: go moral hunting, like mushroom hunting. Yeah, which is super cool.
Speaker 1: I saw that on there while we're recording this episode,
Speaker 1: and it made me so happy inside. I can just
Speaker 1: picture the whole brewery shutting down and then like venturing
Speaker 1: out into the woods trying to find these wild mushrooms
Speaker 1: with their little canvas sacks. Is that is that what
Speaker 1: you put mushrooms in. It feels appropriate, right, That's what
Speaker 1: I would put mushrooms in. But it just makes me
Speaker 1: feel good about the kind of community that they fostered
Speaker 1: there within their brewery, even if it is just for
Speaker 1: marketing purposes. I don't know if it's true or not,
Speaker 1: but I've got nothing but great things to say about
Speaker 1: Top Link Lithe They're great, and we are incredibly appreciative
Speaker 1: of Kelsey for sitting this one our way. Yeah, thanks Kelsey.
Speaker 1: All right, Matt, that's gonna do it for this episode.
Speaker 1: For folks that want show notes, they can go to
Speaker 1: our website how to Money dot com. That's right, man,
Speaker 1: And I want to take one second as well, and
Speaker 1: just to think all of our listeners out there. We
Speaker 1: have amazing listeners who not only help each other out
Speaker 1: when it comes to their money, you know, like there's
Speaker 1: folks in the Facebook group answering each other's questions, making recommendations,
Speaker 1: looking out for each other. But we're just appreciative of
Speaker 1: all of our listeners out there who have subscribed to
Speaker 1: the show, and so I wanted to just say thank you. Right,
Speaker 1: Joel and I, we couldn't do this show. We couldn't
Speaker 1: have this podcast without all of our devoted listeners out there,
Speaker 1: so we appreciate you completely agree. Man, got the best
Speaker 1: listeners out there, that's for sure. All Right, Matt, that's
Speaker 1: going to be it until next time. Best friends out,
Speaker 1: best friends out, don't bo