WEBVTT - Recession Proofing Your Finances #055 0:00:00.120 --> 0:00:02.520 Welcome to how to Money. I'm Joel and I'm Matt, 0:00:02.640 --> 0:00:25.000 and today we're talking about recession proofing your finances. So, Joel, 0:00:25.079 --> 0:00:28.840 I know how much you love diapers where I'm all 0:00:28.840 --> 0:00:32.760 the time, dude, I'm going to mention a personal fail, 0:00:32.920 --> 0:00:35.000 which is my my wife and I, Kate and I 0:00:35.120 --> 0:00:37.720 we thought that nineteen would be the year that we 0:00:37.840 --> 0:00:41.000 kicked diapers to the curb. Our third daughter just turned two, 0:00:41.159 --> 0:00:42.840 and we thought, you know what, it might be time. 0:00:42.840 --> 0:00:45.199 We think she's she's pretty smart, she's pretty sharp, she's 0:00:45.240 --> 0:00:47.160 pretty with it, and get her on that potty train. 0:00:47.200 --> 0:00:49.720 Band wife, Yes, exactly. Well, she's got two older sisters, 0:00:49.760 --> 0:00:51.400 and we thought with her seeing it all the time, 0:00:51.479 --> 0:00:54.600 she'd be ready for it. And I was really excited 0:00:54.600 --> 0:00:56.880 about being able to cut diapers from the budget because 0:00:56.880 --> 0:01:00.280 we spent around fifty bucks every month on diaper and 0:01:00.320 --> 0:01:01.840 Kate and I talked about it and we decided that 0:01:02.040 --> 0:01:04.320 if we were going to cut diapers, that we would 0:01:04.400 --> 0:01:06.479 keep that amount of money in the budget and then 0:01:06.560 --> 0:01:08.080 just be able to eat a little bit nicer. So 0:01:08.080 --> 0:01:11.399 we're not actually increasing our food budget, but we would 0:01:11.440 --> 0:01:14.640 be able to get say, nicer cheeses, nicer meets the 0:01:14.680 --> 0:01:18.319 sharkutie to get to eat the diaper money. Yeah, exactly, 0:01:18.920 --> 0:01:21.720 but man, we totally failed. We we came back at 0:01:21.720 --> 0:01:23.800 the beginning of the year, beginning of January, and we're 0:01:23.840 --> 0:01:26.560 hoping that, yeah, we'd be able to kick it off. 0:01:26.640 --> 0:01:29.320 But that's not on you. That's on Dotti. Okay, that's 0:01:29.319 --> 0:01:31.080 her fault, and I will talk to her about it. 0:01:31.120 --> 0:01:34.000 She needs upper game. In all fairness though she's only 0:01:34.200 --> 0:01:36.759 twenty four months, and with the other girls, we waited 0:01:36.840 --> 0:01:39.199 until I think like twenty six and maybe twenty eight months, 0:01:39.480 --> 0:01:41.000 but we just we just thought we were ready. We 0:01:41.000 --> 0:01:43.640 thought she could handle it. And really we're most excited 0:01:43.640 --> 0:01:45.800 about being able to cut diapers from the budget. So 0:01:46.240 --> 0:01:47.680 who knows, man, it might be a few more months 0:01:47.720 --> 0:01:51.080 now that we're gonna rock those diapers and no nice cheese. 0:01:51.080 --> 0:01:53.640 Is any parents out there listening, They totally know or 0:01:53.680 --> 0:01:57.360 remember the potty training stage, And it's different for every kid. 0:01:57.640 --> 0:02:01.280 Like I swear, our first outer Selma like overnight, she 0:02:01.600 --> 0:02:04.920 like one accident maybe, but no overnight accidents. It was amazing. 0:02:05.000 --> 0:02:07.160 And then our second daughter still did pretty well, but 0:02:07.400 --> 0:02:09.200 it was completely different. It took a lot longer than 0:02:09.200 --> 0:02:11.160 we thought, and we had to keep wearing the pull 0:02:11.240 --> 0:02:13.480 ups at night. And so it's different for every kid, 0:02:13.560 --> 0:02:15.399 and some kids don't get it till later, and some kids, 0:02:15.480 --> 0:02:17.720 well boys as well, Like yeah, with boys it takes 0:02:17.800 --> 0:02:19.919 much longer. So typically, I mean a lot of times, 0:02:19.919 --> 0:02:21.760 I think boys are around three years old before they 0:02:21.760 --> 0:02:24.040 even consider potty training. But yeah, like it said, it's 0:02:24.040 --> 0:02:26.000 different for all kids. So you're just hoping that Dottie 0:02:26.040 --> 0:02:28.880 was like a bathroom Mozart, like a proud of basically, yeah, 0:02:29.040 --> 0:02:31.640 we we were even ambitious enough to say, do we 0:02:31.680 --> 0:02:33.520 even need to pull up the little toy potty, you know, 0:02:33.560 --> 0:02:35.720 like the little kid one, because she would climb up 0:02:35.919 --> 0:02:38.720 onto the stool and hop up on the on the 0:02:38.720 --> 0:02:41.800 toyle that like the big girls do. Nope, Yeah, huge fail. 0:02:42.720 --> 0:02:45.680 Are speaking of goals, So we're you're well into January 0:02:45.720 --> 0:02:47.959 at this point, but I think it's okay for people 0:02:48.000 --> 0:02:50.360 still to set a goal to kind of improve in 0:02:50.360 --> 0:02:53.120 a way in one way or another. And I think 0:02:53.160 --> 0:02:55.359 sometimes maybe at this point, maybe you're two and a 0:02:55.360 --> 0:02:56.880 half weeks in and you've already failed at a goal 0:02:56.960 --> 0:03:00.120 or two like Dottie did. Right, Dottie completely failed. I 0:03:00.160 --> 0:03:02.920 just fell flat on her face. Yeah, so maybe you 0:03:02.960 --> 0:03:05.040 haven't met your goal. I think, like we talked about 0:03:05.080 --> 0:03:07.320 in the Creating a Money roadmap, sometimes it's those little things. 0:03:07.320 --> 0:03:09.280 It's it's not necessarily the end goal that is the 0:03:09.280 --> 0:03:11.359 good goal to have. It's it's the little incremental things 0:03:11.400 --> 0:03:12.720 that you can do along the way. They're going to 0:03:12.760 --> 0:03:15.080 help you achieve that bigger goal. And one thing I 0:03:15.080 --> 0:03:16.880 wanted to mention that's been kind of helpful to me 0:03:17.000 --> 0:03:19.800 recently is when I really need to buckle down and 0:03:19.800 --> 0:03:23.000 get some work done is putting my phone in airplane mode. 0:03:23.280 --> 0:03:26.399 And just like I mentioned a long time ago that 0:03:26.480 --> 0:03:28.240 it's been helpful for me to put my phone in 0:03:28.280 --> 0:03:30.720 gray scale mode because I just want to look at 0:03:30.760 --> 0:03:33.760 it less. It just makes me less interested in looking 0:03:33.800 --> 0:03:36.760 at Instagram or Facebook. In the same way, get if 0:03:36.800 --> 0:03:38.360 I really want to buffle down at work, it makes 0:03:38.400 --> 0:03:40.720 it look like a kindle. Yeah, exactly, tell you that 0:03:40.720 --> 0:03:44.880 I got my kindle by all right? Anyway, sorry to interrupt. 0:03:45.560 --> 0:03:47.080 So yeah, I mean, I think for anybody that really 0:03:47.080 --> 0:03:48.960 wants to buffle down and get something done and they 0:03:48.960 --> 0:03:51.160 feel like their phone is constantly distracting them, you know, 0:03:51.200 --> 0:03:54.560 set an hour or two hours or even just thirty 0:03:54.600 --> 0:03:57.200 minutes in a row of having your phone on airplane mode, 0:03:57.360 --> 0:03:59.560 you'll just kind of forget that it's even there, and 0:03:59.760 --> 0:04:02.200 you'll you'll actually get more done because we don't realize 0:04:02.200 --> 0:04:04.200 how how often we're interrupted by our phone, by a 0:04:04.200 --> 0:04:06.800 text message, by notification, by an alert, and so just 0:04:06.880 --> 0:04:08.600 kind of putting it completely out of sight, out of 0:04:08.600 --> 0:04:10.280 mind is like a great way to kind of boost 0:04:10.280 --> 0:04:12.800 your productivity. Yeah, man, I totally agree. You know, and 0:04:12.880 --> 0:04:15.320 the past few months, I've actually had my phone on 0:04:15.760 --> 0:04:17.919 when it's on silent mode that it doesn't vibrate, so 0:04:17.920 --> 0:04:20.800 it's basically completely silent. Which the reason I did that 0:04:20.839 --> 0:04:22.679 was because I would have my phone sitting on my desk, 0:04:23.160 --> 0:04:25.000 and you know, you get all the spam calls and 0:04:25.040 --> 0:04:26.800 you can recognize them because their area codes that you 0:04:26.839 --> 0:04:29.880 don't recognize. But I still would reach over towards it 0:04:29.920 --> 0:04:31.640 to silence. It would hit the little button to make 0:04:31.640 --> 0:04:33.960 it stop vibrating because I don't want to burn my battery. 0:04:34.520 --> 0:04:37.280 But just the fact of reaching towards my phone, I 0:04:37.320 --> 0:04:39.240 would kind of pick it up and then hop over 0:04:39.279 --> 0:04:41.839 to an app and it would Yeah, it was another distraction. 0:04:41.960 --> 0:04:44.400 It's a total attention breaker. Yeah, but that being said, 0:04:44.440 --> 0:04:46.560 it doesn't break my attention nearly as much if it 0:04:46.600 --> 0:04:48.360 just kind of pops up if I see the notification, 0:04:48.560 --> 0:04:50.279 because I won't reach for it. For for me, it 0:04:50.320 --> 0:04:52.599 was the physical act of reaching towards it is what 0:04:52.680 --> 0:04:54.880 threw me off. But I can kind of dart my 0:04:54.920 --> 0:04:56.960 eyes over and see that it's just an unknown caller 0:04:57.080 --> 0:04:59.200 or a number I don't recognize and keep moving on 0:04:59.240 --> 0:05:00.800 with life. But yeah, with you, man, if I need 0:05:00.800 --> 0:05:03.640 to really buckle down, flipping it over to airplane mode 0:05:03.680 --> 0:05:06.520 is is truly the only way just to to get quality, 0:05:06.680 --> 0:05:09.240 deep work done, which is which is key. Yeah, And 0:05:09.240 --> 0:05:12.320 sometimes honestly, doing something like that actually means you might 0:05:12.360 --> 0:05:14.800 have fewer hours of work that you actually have to 0:05:14.800 --> 0:05:17.920 put in because if you're more productive while you're working 0:05:17.960 --> 0:05:19.800 with your phone and airplane mode, you might not have 0:05:19.839 --> 0:05:21.800 to work as many hours in the day because the 0:05:21.839 --> 0:05:23.720 hours you're working are so much more productive. Now you 0:05:23.720 --> 0:05:25.599 don't have that restart time. They say that anytime you 0:05:25.600 --> 0:05:27.480 have a break in your concentration like that, sometimes they 0:05:27.480 --> 0:05:29.600 can take up to fifteen minutes. They kind of get 0:05:29.640 --> 0:05:31.719 your train of thought back completely where you're back in 0:05:31.760 --> 0:05:34.920 the groove. And man, I completely agree with that, sweet Matt, 0:05:34.960 --> 0:05:37.680 So let's tell everybody the beer we're drinking in today's episode. 0:05:37.800 --> 0:05:40.719 Today's beer was sent to us by a listener, Philip, 0:05:40.880 --> 0:05:44.960 from Chico, California, which is where Sierra Nevada's base. So 0:05:45.160 --> 0:05:47.080 I don't think he works there, but he lives there, 0:05:47.120 --> 0:05:49.440 and I love that he sent us this beer. In particular, 0:05:49.440 --> 0:05:54.320 Maths Homer. Yeah, this beer is called Resilience, Butte County 0:05:54.400 --> 0:05:57.560 Proud I p A. And if you're not aware, there 0:05:57.560 --> 0:06:00.560 have been a lot of wildfires in California, UH, and 0:06:00.640 --> 0:06:03.719 a lot of the employees of the brewery Sierra Nevada, 0:06:03.800 --> 0:06:05.760 which is one of the biggest craft breweries in the 0:06:05.839 --> 0:06:09.960 nation right were affected, were displaced by the wildfires surrounding 0:06:10.000 --> 0:06:12.680 their brewery and surrounding where their employees live. And so 0:06:13.000 --> 0:06:16.160 Sierra Nevada decided to brew this beer Resilience UH and 0:06:16.240 --> 0:06:19.760 donate all the proceeds to a fund that helps those 0:06:19.800 --> 0:06:22.400 that were impacted by by the fire. And the really 0:06:22.400 --> 0:06:25.360 cool thing, Matt, my favorite part about this story of 0:06:25.360 --> 0:06:29.600 this beer is that other breweries, hundreds of other breweries 0:06:29.640 --> 0:06:33.520 around the country have banded around Sierra Nevada to brew 0:06:33.720 --> 0:06:37.240 this same recipe at their breweries and they're selling it 0:06:37.440 --> 0:06:39.880 and doing the same exact thing, So totally awesome. I 0:06:39.920 --> 0:06:42.080 went to a brewery recently and they had their own 0:06:42.200 --> 0:06:44.719 version of Resilience. It's the same exact recipe because Sierra 0:06:44.800 --> 0:06:46.760 about to put the recipe out there for everyone to use, 0:06:47.200 --> 0:06:50.400 and they say so, they're calling it Resilience and and 0:06:50.440 --> 0:06:52.440 they're saying that all the proceeds are going to to 0:06:52.520 --> 0:06:55.400 the same campfire fund helping people that were impacted by 0:06:55.400 --> 0:06:58.039 the by the fires in California. Yeah. Man, I love that. 0:06:58.080 --> 0:06:59.880 And even if you don't love craft beer, right you 0:07:00.000 --> 0:07:02.960 and admire the community and the support that is rallying 0:07:03.000 --> 0:07:05.480 together in order to help change people's lives that were 0:07:05.480 --> 0:07:08.120 affected by those fires. I love that. Yeah, such a 0:07:08.160 --> 0:07:11.400 cool way to use the beer. And I already love 0:07:11.440 --> 0:07:15.000 the packaging. It kind of reflects the beauty of that 0:07:15.120 --> 0:07:17.040 part of the world. And also just like those roots 0:07:17.120 --> 0:07:18.880 kind of coming out of the name Resilience on the 0:07:18.920 --> 0:07:22.480 can reminds you of that community, grassroots effort, the roots 0:07:22.520 --> 0:07:25.000 run deep. I love it. It's got the Yosemite look, 0:07:25.000 --> 0:07:28.520 which is basically my favorite place on Earth. So I 0:07:28.560 --> 0:07:31.800 already love it. But let's go ahead and taste it. Man, cheers, Man, dude, 0:07:31.800 --> 0:07:34.360 that's awesome. And before we mentioned our one word, I 0:07:34.400 --> 0:07:35.920 wanted to share why we have a beer every week, 0:07:35.960 --> 0:07:38.640 which is craft beer is something that you and I love, obviously, 0:07:39.160 --> 0:07:41.720 and so we have a beer while we talk about money, 0:07:41.880 --> 0:07:43.720 and it's just one of the things that we care about, 0:07:43.840 --> 0:07:45.880 and it's one of the things that we're not depriving 0:07:45.920 --> 0:07:48.080 our life of. It is something that we value and 0:07:48.120 --> 0:07:50.160 because that we spend money, right, Like we we're not 0:07:50.200 --> 0:07:52.640 looking to cut back in every single aspect of life, 0:07:52.720 --> 0:07:54.800 but we try to be intentional with our money. Craft 0:07:54.800 --> 0:07:56.800 beer is one of the ways that we are intentional 0:07:56.800 --> 0:07:59.000 and do spend money. So just keep that in mind 0:07:59.040 --> 0:08:01.240 when you're seeking to kind of get your financial life 0:08:01.240 --> 0:08:03.520 and order right. It's okay to spend money, just make 0:08:03.520 --> 0:08:06.640 sure you're spending money on the things that matter to you, alright. Also, 0:08:06.880 --> 0:08:09.600 what's your one word to describe this beer? Alright? My 0:08:09.640 --> 0:08:12.000 word is gonna involve the use of a hyphen So 0:08:12.040 --> 0:08:15.040 I'm going old school. I don't even know if that's hyphenated, 0:08:15.320 --> 0:08:17.440 but I'm going for it. That's not only way to 0:08:17.440 --> 0:08:18.880 get both those words. You just say Yeah, you just 0:08:18.880 --> 0:08:20.200 wanted it to be hyphen it is so you can 0:08:20.200 --> 0:08:23.960 get two words and cheater. Alright, Matt, what word would 0:08:24.080 --> 0:08:26.720 you use to describe this week's beery? Man, My word 0:08:26.760 --> 0:08:28.840 is multi, So a little bit later on the show, 0:08:28.840 --> 0:08:31.320 we'll get into why we use those words to describe 0:08:31.320 --> 0:08:33.800 this beer, but for now, let's get to the subject 0:08:33.840 --> 0:08:36.760 at hand, Matt, recession proofing your finances. And we really 0:08:36.760 --> 0:08:39.040 wanted to tackle this topic, Matt, because there are so 0:08:39.080 --> 0:08:42.520 many people doom and gloom naysayers that saying that the 0:08:42.559 --> 0:08:45.880 economy is gonna crash any moment, And truly, the economy 0:08:45.880 --> 0:08:48.719 has been doing really well for the past pretty much decade, right, 0:08:48.920 --> 0:08:51.400 And I think it's really important for our listeners to 0:08:51.440 --> 0:08:54.160 know that that we shouldn't be paying super close attention 0:08:54.280 --> 0:08:57.880 to these predictions of a recession, but it is good 0:08:57.960 --> 0:09:01.480 to be prepared right for whatever might occur, And in particular, 0:09:01.559 --> 0:09:04.880 preparing for a recession is really more than anything being 0:09:04.880 --> 0:09:07.320 prepared for short term bumps in the road. And so 0:09:07.400 --> 0:09:09.760 that's kind of what we're going to cover in this episode. Yeah, 0:09:09.760 --> 0:09:11.920 there can be two extremes when it comes to our 0:09:11.960 --> 0:09:14.400 outlook towards the coming years of our economy. Right, you 0:09:14.400 --> 0:09:19.120 can either be overly positive and optimistic due to near sightedness, 0:09:19.120 --> 0:09:21.880 thinking that our current situation will continue on like it 0:09:21.920 --> 0:09:26.720 has forever, which is like human nature, which is human nature. Yeah, 0:09:27.000 --> 0:09:28.320 so you might think you will continue to get those 0:09:28.360 --> 0:09:30.040 raises at work, you might get great returns to the 0:09:30.040 --> 0:09:32.040 stock market, might think that gas prices are going to 0:09:32.080 --> 0:09:34.160 continue to go down because that's what's happening right now. 0:09:34.720 --> 0:09:37.280 Or he might be overly negative in thinking that the 0:09:37.320 --> 0:09:39.640 market is going to crash. You know, just like you said, 0:09:39.679 --> 0:09:41.960 you like the naysayers. We think that it might just 0:09:42.040 --> 0:09:44.520 be too good to be true. And either way, we 0:09:44.600 --> 0:09:47.360 can't control our economy. We can't control the markets, but 0:09:47.440 --> 0:09:51.120 what we can control our our personal finances. This reminds 0:09:51.120 --> 0:09:53.959 me too of Stephen Covey. He's got that that classic books, 0:09:53.960 --> 0:09:56.520 Seven Habits of Highly Effective People, and he talks about 0:09:56.520 --> 0:09:58.840 how you have your circle of concern. Right, there's a 0:09:58.880 --> 0:10:00.920 lot of things that impact you and that you are 0:10:00.960 --> 0:10:03.760 interested in and that concern you. However, within that circle 0:10:03.800 --> 0:10:06.760 of concern, there's a smaller circle, which is your circle 0:10:06.840 --> 0:10:10.080 of influence. And the idea is to focus on the 0:10:10.080 --> 0:10:12.280 things that you can control. Focus on the things that 0:10:12.320 --> 0:10:15.800 you have influence over, and that's personal finance. Right, Like 0:10:15.840 --> 0:10:18.400 you can read all the news reports, you can follow 0:10:18.440 --> 0:10:21.560 the stocks and the charts all you want, but that's 0:10:21.559 --> 0:10:24.400 not going to change what the market actually does. What 0:10:24.520 --> 0:10:27.680 you can change, though, are your own personal finances. And 0:10:27.760 --> 0:10:29.679 before we get into the nuts and bolts of how 0:10:29.720 --> 0:10:33.200 you can prepare your personal and your families finances for 0:10:33.240 --> 0:10:35.800 a potential recession, I did want to just quickly address 0:10:35.880 --> 0:10:38.800 to like a mental mindset shift that needs to take 0:10:38.840 --> 0:10:41.240 place for a lot of people. If you're somebody that 0:10:41.280 --> 0:10:44.439 logs onto CNBC every day or has the news on 0:10:44.760 --> 0:10:49.160 and here's people crying about potential recession and predicting the 0:10:49.240 --> 0:10:51.440 all the potential bad things that can happen. That can 0:10:51.480 --> 0:10:53.679 be a recipe for you making moves that are not 0:10:53.720 --> 0:10:56.080 in the best interest of your long term financial future. 0:10:56.360 --> 0:10:59.760 So be careful about the news that you're consuming and 0:11:00.160 --> 0:11:02.760 people that you're listening to, because if you adopt more 0:11:02.800 --> 0:11:05.480 of a long term strategy towards your personal finances, those 0:11:05.559 --> 0:11:08.280 day to day naysayers, it really they have a lot 0:11:08.360 --> 0:11:10.839 less impact on what you actually do with your money. 0:11:11.240 --> 0:11:13.360 And so after the break, we're gonna talk about some 0:11:13.400 --> 0:11:16.520 specific things that you can do to recession proof your finances. 0:11:16.600 --> 0:11:18.880 And again, these are things that you can do proactively 0:11:19.320 --> 0:11:31.079 versus reacting to the news and the market. So there 0:11:31.120 --> 0:11:33.120 are a lot of important things you need to consider 0:11:33.280 --> 0:11:36.000 when your recession proofing your finances, and the first one 0:11:36.120 --> 0:11:39.360 is to build a strong emergency fund. If you feel 0:11:39.360 --> 0:11:42.000 like a recession might impact you in a meaningful way, 0:11:42.320 --> 0:11:45.480 it's really important to squirrel away more cash. When the 0:11:45.520 --> 0:11:48.520 economy is roaring, an emergency fund is still meaningful, right, 0:11:48.559 --> 0:11:50.640 We've talked about that before the show, but it's even 0:11:50.720 --> 0:11:54.199 more meaningful when we're talking about a potential recession because 0:11:54.360 --> 0:11:57.880 in the event of job loss or decreased pay or 0:11:58.160 --> 0:12:00.760 fewer hours that you're able to work for your incurrent 0:12:00.760 --> 0:12:03.640 employer because of a recession, it's important to have kind 0:12:03.640 --> 0:12:06.200 of more money, uh scrolled away in your bank account 0:12:06.280 --> 0:12:07.960 so that you can be prepared. So how much we're 0:12:07.960 --> 0:12:09.640 talking about here, we're talking about like a hundred bucks 0:12:10.000 --> 0:12:12.360 bucks that won't get you very far usually, and so 0:12:12.480 --> 0:12:15.000 typically the sort of initial emergency fund that you want 0:12:15.000 --> 0:12:16.640 to put together is like a thousand bucks, right, A 0:12:16.640 --> 0:12:19.679 thousand dollars will get you far, but ideally we're talking 0:12:19.720 --> 0:12:22.079 three to six months, maybe even a little bit more 0:12:22.120 --> 0:12:24.080 if you like to have a little more margin, a 0:12:24.080 --> 0:12:25.640 little more of a buffer, and when it comes to 0:12:25.679 --> 0:12:27.960 your finances, but at least three to six months of 0:12:28.000 --> 0:12:30.360 expenses is what you want to have when it comes 0:12:30.400 --> 0:12:34.319 to setting aside money for a strong emergency fund. Yeah, 0:12:34.400 --> 0:12:36.560 for a lot of years, cash has been considered like 0:12:36.559 --> 0:12:39.800 a terrible investment, and rightly so, it's not an investment 0:12:39.800 --> 0:12:42.040 at all, right, right, and for rightly so right for 0:12:42.080 --> 0:12:44.840 that reason, and because returns on cash have been really low, 0:12:44.920 --> 0:12:47.640 right the low interest rates paid out on cash accounts. 0:12:47.640 --> 0:12:49.840 But in the current state of things, interest rates are 0:12:49.920 --> 0:12:52.520 rising on the savings accounts, and so it's not actually 0:12:52.559 --> 0:12:54.760 a terrible place to put your money right now. Um. So, 0:12:54.840 --> 0:12:57.480 at the same time that it's not a terrible place 0:12:57.520 --> 0:12:59.839 to store your money, it's also more important to put 0:12:59.840 --> 0:13:02.760 your money there because of a potential recession and because 0:13:02.760 --> 0:13:04.439 of the impact that could have on you and your family. 0:13:04.640 --> 0:13:07.920 And we did an entire episode dedicated towards setting aside 0:13:07.960 --> 0:13:10.560 money for an emergency fund. And again, that might mean 0:13:10.880 --> 0:13:13.440 investing less and saving more in the short term, and 0:13:13.480 --> 0:13:15.520 that is okay, But but look that one up. That's 0:13:15.559 --> 0:13:18.320 episode number twenty one where we talk about everything you 0:13:18.320 --> 0:13:20.840 need to know about an emergency fund. Yeah, and speaking 0:13:20.880 --> 0:13:24.480 of investing less that it might make sense to potentially 0:13:24.480 --> 0:13:27.440 back off your IRA contributions or your four oh one 0:13:27.520 --> 0:13:30.640 K contributions through an employer. Let's say you're investing tend 0:13:30.640 --> 0:13:32.440 to twelve percent of your pay in a four oh 0:13:32.520 --> 0:13:35.520 one K, you're backing that automatic deduction off to like 0:13:35.600 --> 0:13:38.160 six percent or wherever it is, you know, just making 0:13:38.160 --> 0:13:40.320 sure you of course get the company match through your 0:13:40.320 --> 0:13:44.520 employer if priority exactly, and then after that making sure 0:13:44.559 --> 0:13:46.600 that you're not investing any more than that until you 0:13:46.600 --> 0:13:48.480 feel like your emergency fund is where you want it 0:13:48.480 --> 0:13:50.960 to be, excellent man. And the next you want to 0:13:51.000 --> 0:13:54.280 attack high interest rate debt and don't take out more debt. 0:13:54.320 --> 0:13:56.320 And so this makes sense from a number standpoint, right, 0:13:56.320 --> 0:13:58.199 from a number is an interest rate standpoint, you want 0:13:58.200 --> 0:14:00.040 to attack the loans that you have to have the 0:14:00.080 --> 0:14:03.280 highest interest rate. If a recession hits, it's so important 0:14:03.320 --> 0:14:05.800 to tackle that high interest rate debt. That's the most important. 0:14:06.040 --> 0:14:08.719 Let's say you've got five thousand dollars in student loan 0:14:08.760 --> 0:14:11.480 debt at a three percent rate and ten thousand dollars 0:14:11.480 --> 0:14:14.040 of credit card debt at a nineteen percent interest rate. 0:14:14.320 --> 0:14:17.640 I think it makes right, which could be I think 0:14:17.679 --> 0:14:19.320 it makes a lot more sense for people to try 0:14:19.320 --> 0:14:22.360 to tackle that credit card debt because a three percent 0:14:22.360 --> 0:14:25.720 interest rate isn't gonna kill you, but nine interest rate is. 0:14:26.120 --> 0:14:28.840 Ultimately it's gonna crush you because it's really hard to 0:14:28.840 --> 0:14:31.720 gain an advantage. I would recommend putting every extra dollar 0:14:31.800 --> 0:14:34.360 that you have towards a really high interest rate debt 0:14:34.400 --> 0:14:38.280 like that before attacking anything with a super low interest rate. Yeah, 0:14:38.280 --> 0:14:40.280 you definitely need to be smart about it. Yeah, and 0:14:40.480 --> 0:14:43.360 you also mentioned not taking out more debt. I think 0:14:43.360 --> 0:14:46.640 a lot of people think that taking out a home 0:14:46.680 --> 0:14:50.160 equity loan or refinancing your house that now is a 0:14:50.200 --> 0:14:52.320 good time to do that. And if you're actually gonna 0:14:52.360 --> 0:14:55.040 lower your rate and get better terms, it might still 0:14:55.040 --> 0:14:56.760 make sense for you. But you don't want to take 0:14:56.800 --> 0:14:59.880 on more debt, and so doing a cash out refinance 0:15:00.040 --> 0:15:02.680 on your personal home in order to have some extra 0:15:02.680 --> 0:15:05.200 cash to pad your lifestyle, well, that ultimately is going 0:15:05.240 --> 0:15:08.120 to bite you in the end. Usually you're refinancing into 0:15:08.440 --> 0:15:11.560 longer term debt at a higher rate and with a 0:15:11.640 --> 0:15:15.080 higher principal balance, So you definitely want to stay away 0:15:15.080 --> 0:15:17.760 from taking out more debt when we're talking about recession 0:15:17.840 --> 0:15:21.120 proofing your finances. And the next make yourself an invaluable 0:15:21.160 --> 0:15:23.840 employee at wherever you work, right, and then just make 0:15:23.880 --> 0:15:26.320 hay while the sun shines. Like you're not guaranteed to 0:15:26.400 --> 0:15:28.960 keep that job. You don't know how long that's gonna last. Right, 0:15:29.080 --> 0:15:30.960 And so now is just not the time to slock 0:15:31.000 --> 0:15:33.320 off focus on your career, especially if you start to 0:15:33.360 --> 0:15:37.400 see signs of a potential recession potential bearer market coming up. 0:15:37.680 --> 0:15:39.400 You don't want to slack off at work, right, Like, 0:15:39.440 --> 0:15:41.920 this is the time to maybe leads initiatives and do 0:15:42.000 --> 0:15:44.880 something where you're even stepping beyond the role that you 0:15:44.920 --> 0:15:48.280 currently have to take on more responsibility and hopefully that 0:15:48.280 --> 0:15:51.680 will just cement your position in your place at your employer. Yeah, 0:15:51.720 --> 0:15:54.200 you never want to be the person that says, that's 0:15:54.200 --> 0:15:57.720 not my job description or that's not really what I do, 0:15:58.120 --> 0:16:01.760 and taking any opportunity to make yourself invaluable to make 0:16:01.800 --> 0:16:05.480 your employer realize that they need you. You want to 0:16:05.480 --> 0:16:07.800 be the least expendable person there. That's that's your goal 0:16:08.120 --> 0:16:09.880 and I think that's a really important thing to to 0:16:09.880 --> 0:16:11.960 think about in the line of a potential recession. Probably 0:16:11.960 --> 0:16:13.960 wouldn't hurt Ntill like SHOWU with doughnuts either, right, you know, 0:16:14.040 --> 0:16:16.200 like if Joel's always showing up with donuts but Matt 0:16:16.280 --> 0:16:18.200 never brings the donuts and they both do equal amounts 0:16:18.200 --> 0:16:20.400 of work, well we know who's on the chopping. Matt 0:16:20.480 --> 0:16:24.200 might get axed again. On the topic of employment, Matt, 0:16:24.280 --> 0:16:27.280 if you can create an additional stream of income by 0:16:27.440 --> 0:16:30.280 putting together a side hustle, that you might even be 0:16:30.280 --> 0:16:32.480 able to convert it into a full fledged business in 0:16:32.520 --> 0:16:35.440 the event of a job loss. I think having some 0:16:35.480 --> 0:16:38.760 sort of side hustle, side income, multiple streams of income. 0:16:38.920 --> 0:16:40.520 You know, we talk about real estate on the show, 0:16:40.560 --> 0:16:42.680 and that's been helpful. If you could rent out a 0:16:42.760 --> 0:16:45.080 room in your house on Airbnb, whatever it is. A 0:16:45.160 --> 0:16:48.240 side hustle and multiple streams of income, those are great 0:16:48.280 --> 0:16:50.120 things to to think about, really, And we've got a 0:16:50.160 --> 0:16:53.320 whole episode dedicated to side hustles. That's episode number thirty five. 0:16:53.440 --> 0:16:56.080 You can check out creating a Dope side Hustle, which 0:16:56.120 --> 0:16:57.920 is kind of funny, right, Like the reason we titled 0:16:57.960 --> 0:17:01.200 it that is because not all hustles are created equally, 0:17:01.240 --> 0:17:03.040 and we wanted to shine a light on that, because 0:17:03.040 --> 0:17:06.040 there are some side hustles that are kind of dead end, right, 0:17:06.080 --> 0:17:08.280 and then there's some side hustles that could lead, like 0:17:08.320 --> 0:17:10.560 you said, Joel, to an actual business. And dude, this 0:17:10.640 --> 0:17:12.680 is exactly what Kate and I did ten years ago, 0:17:13.000 --> 0:17:15.399 back when the Great Recession hit. And you know, two 0:17:15.440 --> 0:17:18.600 thousand and eight, we started our photography business in the 0:17:18.640 --> 0:17:21.600 midst of a recession, which is crazy, right, but that's 0:17:21.640 --> 0:17:24.119 the whole reason we went that direction. The company I 0:17:24.160 --> 0:17:27.200 was working for is a small advertising agency. We weren't 0:17:27.240 --> 0:17:29.000 doing so great at the time. We were losing some 0:17:29.040 --> 0:17:30.720 clients that we you know, we lost a couple of 0:17:30.760 --> 0:17:32.720 big ones, and I kind of saw the writing on 0:17:32.760 --> 0:17:35.320 the wall. I didn't necessarily think I was gonna get fired, 0:17:35.400 --> 0:17:36.960 but I also knew it wasn't my calling. I wasn't 0:17:36.960 --> 0:17:39.560 having a great time in my position there, and so 0:17:39.800 --> 0:17:42.240 finding an outlet where I can make money and find 0:17:42.240 --> 0:17:43.800 all the things that you're looking for in a job 0:17:44.080 --> 0:17:47.320 on the side was incredibly valuable for us. I was 0:17:47.359 --> 0:17:50.120 able to keep those both going for gosh, maybe about 0:17:50.119 --> 0:17:52.119 six months, where I kind of had this side hustle 0:17:52.160 --> 0:17:54.240 going on, but after that we went full on, went 0:17:54.280 --> 0:17:56.920 full time and I've been doing photography full time for 0:17:56.960 --> 0:17:59.760 over ten years now, which is honestly crazy to even 0:17:59.800 --> 0:18:02.320 say allowed that I haven't had a real job and 0:18:02.400 --> 0:18:05.360 ten years, but man, I wouldn't have traded it for 0:18:05.440 --> 0:18:09.879 almost anything. That's awesome, man. And And also on the 0:18:09.920 --> 0:18:13.160