June 18, 2024 • 48 mins
Money can be such a stressful topic, and many of us can feel like we’re always playing catch-up when it comes to our personal finances. Your income never feels substantial enough to get ahead, and budgeting feels intimidating and intense.
With the help of special guests Jannese Torres (“Yo Quiero Dinero” podcast and author of “Financially Lit!”) and Austin Hankwitz (“Rich Habits” podcast and “Rate of Return” Newsletter), Matt and Molly try to make money a little less scary and lean into the importance of financial awareness and tracking.
Learn tips for building a budget and discover which accounts will help you grow your money. Now if only Molly could stop sweating when she looks at a spreadsheet.
Do you have a topic or question you want to learn about on the podcast? Send us a note or voice memo to GrownUpStuffPod@gmail.com and we may feature your message on an upcoming episode.
Cited Sources:
- “Survey: The average American feels they’d need over $200K a year to be financially comfortable” - Bankrate
- “Income in the United States: 2022” - US Census Bureau
- “Bankrate’s 2024 annual emergency savings report” - Bankrate
- “Lifestyle Creep: How To Avoid the Trap and Save More” - MarketWatch
- “82% of Americans don’t use this kind of savings account that earns over 5% a year — here’s how much money you may be missing out on” - CNBC Select
- “American Savings By Generation: How Balances And Goals Vary By Age” - Forbes Advisor
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Some people will say it's ghosh to talk about money,
which is probably why I feel so ill prepared when
it comes to really tackling my financial tracking and budgeting.
And I know I'm not alone. As inflation continues to rise,
though albeit at a slower rate now, it can feel
like each year you're struggling to stay out of the
red when it comes to your finances. In a recent
survey from the personal finance website bank rate, Americans said
(00:27):
they feel like they'd need to earn roughly two hundred
and thirty three thousand dollars a year to feel secure
with their finances. But according to the US Census Bureau,
the average annual income for a full time worker is
still shy of seventy five thousand dollars. So what do
we do? Prices are increasing, and another pull from bank
rate reported that thirty six percent of US adults have
(00:48):
more credit card debt than emergency savings. Until we hit
the lottery or land our dream salary. The best option
to take hold of our finances is to start tracking
all of the ins and outs and budgeting. But where
do we start. How much should we have in our
savings and what counts as a necessity under the fifty
twenty thirty rule of budgeting. Start taking notes, because this.
Speaker 2 (01:11):
Is grown up Stuff.
Speaker 1 (01:17):
Hello to all my friends and grown ups out there listening.
Welcome to another episode of grown Up Stuff How to Adult,
the podcast where we try to answer all the important
life questions about being grown, like what's a budget? And
do I really need one? This is me Molly, a
fellow passenger on this crazy train of adult life, and
as always I'm joined by my money minded and financially
(01:41):
responsible friend and co host, Matt Stillo. If you have
been listening to this show at all over the past
two seasons, then two things are very clear to you.
One I am very clueless about a lot of things.
And two, Matt kind of loves money like he loves
talking about it, reading about it, and researching financial trends.
(02:01):
He's investing, he's trading, he's saving, he's budgeting. He does
it all. So, Matt, before I ask you about your
experiences of money, I want to let our dear, smart,
cherished listeners know that I remain your ever vigilant but
sweet summer child. I will not let this episode go
over your heads, because my eyes genuinely start to glaze
(02:22):
over when someone starts talking about investments or budgeting just
gives me hives. But you know what, I'm dedicated to
overcoming this fear here and now, and you know what,
who knows, maybe I'll even end up making myself ah
a budget. I don't even like that word. Why is
that word so hard for me to say? Makes me ill?
(02:43):
But Matt, now over to you. Were you always this way?
Did you enter into this world reading books about financial planning?
Speaker 2 (02:49):
You know it's funny as you were describing me as
someone who budgets and reads about finance and is saving
and investing. My entire family is listening to this podcast, going.
Speaker 3 (02:59):
Is she what?
Speaker 1 (03:01):
Matt?
Speaker 2 (03:01):
Is she talking about the same math too that they
encouraged to go to finance school? And he was like, no,
I hate finances. I'll never learn. I don't wanna.
Speaker 1 (03:11):
One year, my.
Speaker 2 (03:12):
Dad was trying to explain something about my taxes to me,
and I was like, Dad, I would pay you to
never have to know about this ever again. I was
so financial. I was like, I don't get it. I
don't want to know. Money freaks me out. I don't
want to think about it forever. For the longest time
I hated finance years of my life, I just coasted
(03:32):
by on vibes. I was like, it feels like I've
spent probably about as much money as I have until
I looked at my Chase balance and I was like,
doing well this month, I got fifty bucks left. So
for anyone who's listening to this, I really you were
in good hands because like I was exactly that way
if you feel that you're that way for a very
(03:53):
very long time. And what I will say is I'm
lucky because I have a very very generous friend who's
our first guest on this podcast. His name is Joana Batista,
who is very kind. He's very smart, and he's very
generous with his time and his words, and he kind
of gave me like a come to Jesus moment and
he explained to me in very simple terms like what
I could be doing, what I should be doing, and
(04:16):
he didn't judge me. He was like, Matt, I love you,
I'm here for you, and like I worry about you
and I want you to like have these tools that
I that I've spent my life like learning about so
that you can be good because I want you to
be good because you're my friend, so let Molly and
I be that friend for you. Right now, let's talk
about your situation.
Speaker 1 (04:33):
I don't like to budget because it stresses me out,
but I track my expenses. I currently have no credit
card debt, which is a big deal, so I can't
have to worry about that.
Speaker 2 (04:43):
Ye's so huge.
Speaker 1 (04:44):
But I've had some really big expenses in the last
year that have dwindled my savings, and it's stressful as
hell to not have that same cushion anymore. So I'm
really hoping our very special guest today can and help
me find the best path to get to more understanding
(05:05):
and less stress about it.
Speaker 2 (05:06):
I think they will. Today we are joined by personal
finance experts Janice Torres and Austin Hankwitz. Janie is the
host of the personal finance podcast Yokiero Dinero and the
author of the brand new book financially Lit, The Modern
Latina's Guide to level up your d naro and become
financially Bodorosa.
Speaker 1 (05:26):
Austin is a personal finance TikToker and creator of the
popular personal finance newsletter The Rate of Return. He also
co hosts the financial literacy podcast Rich Habits Jennie Torres
and Austin Hankwitz. Thank you so much for joining us
on growing up Stuff how to Adults. You and I
(05:48):
work together on another podcast called Mind the Business small
Business success Stories, and that's in partnership with QuickBooks. Anyone
out there with a small business please go and listen.
So that's a great project that I know you both from.
But today we're going to step out of your expertise
as small business owners and into your expertise of personal finance,
(06:11):
because you both are experts in personal finance, and here's
where I want to start. You're both very successful and
have your financial shit together. Can you tell us a
little bit about your journey and becoming just more fiscally
responsible Denise, I'll start with you.
Speaker 3 (06:31):
Yeah. I love that because that was the complete opposite
of my situation for the majority of my twenties. I
thought I had my financial shit together, and I thought
that just meant like knowing how to make money. So
I was on this pursuit in my twenties to make
one hundred thousand dollars a year by the time I
turned thirty. This was like the pinnacle of success for
(06:52):
me in my head. And then when I turned thirty
and I was making one hundred K. I was still
leaving paycheck to paycheck, and I was like, wait a minute.
I thought this magical number was going to resolve all
my financial issues. And I quickly realized that it's not
about how much you make, it's about actually telling your
money what to do so that you don't find yourself
(07:14):
in a situation where you're making a ton of money
but literally have nothing to show for it. So I
started listening to podcasts, reading a lot of books. I
found out about the financial independence movement or the Fire movement,
and slowly but surely I created a plan to get
out of student loan debt, get out of credit card debt,
and I was able to pay off thirty nine thousand
dollars of debt in seventeen months, and that set me
(07:37):
onto trajectory where now I am investing for early retirement.
I am fully self employed. I was able to quit
my job just because knowing that you don't owe anybody
money and being debt free is a very powerful position
to be. That gives you a lot of options.
Speaker 1 (07:52):
And for our listeners who are unfamiliar with the Fire movement,
it's an acronym for financial independence, retire early so you know,
save now so you don't have to work forever. Yeah, right, Austin,
how about you.
Speaker 4 (08:06):
I'm right there with you, Janie. Being debt free and
having control of your income is one of the most
powerful places to be. And I started this journey actually
in high school. Weirdly enough, I was visited by Dave
Ramsey Kinway High School because his headquarters is here in Franklin, Tennessee,
and the state of Tennessee is the number one state
(08:27):
for bankruptcy per capita, which, if you guys mean that
or not, I did not wow. And so once Dave
saw that statistic back in like twenty ten, He's like, oh,
I'm going to just you know, start the kids early,
meet him allut their high schools, and teach them about
the baby steps. And that was my first foray and
just understanding, wait, what is debt, what is investing? What
are finances? And then I took that to college. So
I went to the University of Tennessee and I studied
(08:49):
finance and economics. I am a self proclaimed super nerd.
And after I graduated, you know, I got my first
job and I was like, Okay, I'm ready. I'm ready
to start budgeting. And I saw Dave was talking investing.
I want to get to investing, right. That sounds sexy
and fun, and then once you know you go through it,
you're like, wait a second, lifestyle creep is real, healthcare
is real, transportation costs and food and all these other
(09:10):
different things like this is real, Like I really need
to figure this out. So that was my first foray
into sort of personal finance and investing, and that has
since now exploded. Back in March of twenty twenty, I
decided to stop doing this by myself and instead bring
people along with me. So by that, I mean I
was posting videos on TikTok, so instead of like lip
syncing and dancing, I was talking about how to build
(09:30):
my credit score or you know, aspire to go buy
my first house one day, invest to her retirement, things
of that nature. And that has since now allowed me
to be a content creator and podcaster. But the journey
to becoming financially independent has been a roller coaster and
I can't wait to dig in.
Speaker 2 (09:45):
So much of what you guys said resonates with me,
and I think that that's one of the most important
things for people to hear genius is like, it does
not matter how much money you make, but like the
biggest thing is is how much you're you're saving.
Speaker 1 (09:56):
Yeah, So what does it mean to be financially aware?
To the both of you, I.
Speaker 3 (10:01):
Think the first step to becoming financially aware is to
know your overall financial situation aka knowing your net worth.
So when I first calculated that number, which is essentially
all of your assets minus all of your liabilities, if
that number is positive, then that means you have more
assets than debt essentially, so you have some positive network equity. Yeah, right.
(10:23):
And then if the number is negative, then that basically
means you have more debts than you have assets. And
so when I did that calculation, I was like a
negative a four hundred and fifty thousand dollars between a
mortgage and student loan debt and credit cards and card notes.
And I'm like, oh my god, this is the first
time I'm seeing just the culmination of all my financial
(10:46):
decisions in one place. And it was a very stark
realization where I'm like, if I don't do something about this,
I'm literally going to be working until I died pay
off this debt, right, And so it's very easy in
that moment to just like put your head in the
sand and be like, well, whatever, you know, it's fine.
The world revolves around debt. This is just normal. And
(11:08):
I could have had that approach, but for me, the
idea of being in debt meant something a lot more.
I was very unsatisfied in my engineering career at the time,
and so I knew I wanted to make a career pivot,
potentially go off and work for myself. And that number
represented I got to keep working this damn job until
I get out of this debt. So the faster I
(11:28):
can get out of this debt, the more options I
have to reinvent my career. And so yeah, calculating that
number was the first wake up call for me. I
used a tool that used to be called Personal Capital,
it's now called Empower. It's a free app. You literally
link all of your investment, banking accounts, credit accounts, and
it gives you that calculation and that first bird's eye
(11:50):
view I think is really important part of becoming financially aware.
Speaker 2 (11:54):
And Austin for you, what does like financial awareness mean
to you?
Speaker 4 (11:57):
I think becoming financially aware where means you understand opportunity cost.
And it's so funny too, because as people begin to
understand investing in compound growth and how much inflation is
eating at their purchasing power, becoming financially aware means that
I know if I take one hundred dollars, one hundred
(12:18):
and fifty dollars, twenty five dollars, whatever that number is
for you, and I'm investing it rather than spending it
on lifestyle creep or spending it on some sort of
variable expense is what I call it in the budget,
something that is like a pair of shoes or a shirt,
or an experience or something that I don't need to
survive and be happy, but I'm doing that just because
(12:39):
I want to. And the opportunity cost of not investing
that money turns into thousands of dollars throughout your life.
So I think coming to one the conclusion of Okay,
I understand now I'm aware enough to know that I
can either spend money or I can invest money. Right,
so if I'm spending it, I'm not investing it for
my future. And if I'm not in a place where
my future is rock solid, which is a place that
(13:00):
I want everyone to obviously be, and I think that
that is a place a lot of people can get
to if they have the right tools and resources. But also,
unfortunately Joanees, including myself, we all start with a negative
net worth, and I think the biggest thing people need
to realize is one, it's okay to start there, because
we're all there, right But two, now is time to
(13:21):
make the decisions of do I want to move in
the right direction if that means investing or paying off debt,
or do I want to sort of move laterally, which
is staying exactly where I am, kind of just marinating
in my bad decisions. And yeah, I think being financially
aware is having that realization that you can make a
change and there are steps to take.
Speaker 2 (13:39):
There's this really wonderful book that I'm probably gonna reference
a lot, and I wonder if you fret. It's called
Your Money or Your Life that I just absolutely love,
and it's talking about the more aware you can be
and not judge yourself for where you are, the more
that you have the tools and the knowledge to start
building back in the other direction.
Speaker 4 (13:57):
Unfortunately, a lot of people drift with their money. They
don't really have any like direction, right, They're not taking
the action where we take action with our career. We
take action with our friendships and our relationships and you know,
our family life. We take action with a lot of
these different things in our life to move forward and
progress towards something, but we don't with our money. And
so having the realization of I don't know where I am,
(14:18):
but I know I need to take action and I
know I need to make that first step is so
so important.
Speaker 2 (14:23):
And Instagram isn't life, you know, like see like I
think people see like, oh, my friends are going on
Like I deserve to go on vacations too, Like, oh
my friend is a car I should Like it's just
like to realize, like those people are probably going into debt,
Like they're probably just throwing money on their credit card
and they're going to Fiji and whatever, and like they
don't actually have the money.
Speaker 1 (14:44):
You've heard us mention lifestyle creep a few times now.
Even if you haven't heard this term, you may be
doing it and not realizing it. Essentially, it's an increase
in your spending, and most commonly, lifestyle creep happens when
you get a raise or a pay bump and instead
of pocketing all that additional income and to savings, you
increase your standard of living and just start spending more.
Instead of building your emergency fund or paying off your debt,
(15:07):
you opt for the nicer apartment, or you decide to
get the new car, or maybe it's as sneaky and
small as a lavender almond milk macha late every morning
from your favorite coffee shop. I'm super guilty of this,
but apparently I'm not alone. The website MarketWatch found twenty
twenty four data from the US Bureau of Economic Analysis
that showed that even though wages have increased over the
(15:27):
last four years, personal savings rates have actually decreased. Speaking
of lifestyle creep, which I am completely susceptible to, we
are seeing just record inflation rates right now, or at
least what feels like record inflation rates, and it's slowing,
but it's still rising. According to a bank Rate survey,
(15:49):
sixty three percent of Americans say that high inflation is
keeping them from being financially comfortable or secure. What advice
do you have for those of us? And I include
myself in that because I just feel like I'm spending
because everything else is more expensive So, what advice do
you have for those of us who feel like the
cost of living is getting higher and higher but our
(16:09):
paychecks aren't changing.
Speaker 3 (16:12):
Yeah. Well, I don't think that it's a coincidence that
the inflation rate is at an all time high and
the amount of credit card debt that Americans are getting
into is also at an all time high. It's actually
surpassed any other kind of debt at this point because
a lot of folks are literally having to rely on
credit cards for like everyday living expenses. I going to
buy groceries, which is insane for me. I realized that
(16:33):
I was treading water financially even though I had a
six figure paycheck because of all the debt that I was,
you know, continuing to rack up, and you know, with
things like vacations where I didn't have a plan for
how I was going to pay for them. I just said,
I'll put it on a credit card and we'll deal
with it later, right, And then you have that spending
hangover after the fact, and it just becomes this vicious cycle.
(16:53):
So for me, the most important thing that I did
to kind of mitigate the cost of living was finding
different ways to make money, you know, at the end
of the day, there's only so much that your job
is going to pay you. You know, most of us
will not be able to negotiate a fifty percent raise
just with a simple conversation with your boss saying, hey,
you know, life is expensive, I need to pay my
(17:15):
bills and you give me more money. Right, That's usually
not how it works. But I think a lot of
us have skills that we can potentially turn into a
side hustle. And I'm really a big proponent of figuring
out how to diversify your income because money is one
of those things where when you learn how to create it,
it can potentially become an infinite resource. Yeah.
Speaker 2 (17:35):
You know, for the people who out there who would say, like, well,
I've got a checking accounts and I've got my debit card,
or I've got a credit card and my credit card account,
what does budgeting do that simply like looking at my
bank state and every week or every month doesn't do.
Speaker 3 (17:49):
Yeah.
Speaker 4 (17:50):
Something I want people to think about whenever they use
the word budgeting is wealthy. People don't use the word budgeting.
They use forecasting because they're looking forward, not reacting to
a mistake they made. They're forecasting for what they want
to spend, and they're giving every dollar in assignment.
Speaker 3 (18:07):
Right.
Speaker 4 (18:07):
So for example, I use Dave Ramsey's budgeting app called
every Dollar, and before the month even starts, I've already
done this for the month of June. Here I forecasted
what I would spend in June. But I want people
to not think about budgeting as like this knotty word
that makes them feel gross inside. Like I want them
to think like budgeting is a way to reimagine that
(18:28):
into a way to forecast the future, and it kind
of gives you the sense of empowerment.
Speaker 2 (18:33):
I think that's a great mindset shift to think about it.
And the other thing that I think is interesting for
people who are starting budgeting is I mean, looking back
can also be kind of helpful to and again there's
no vari you shouldn't judge your past. But like, since
Mint went away, I've started using just an Excel spreadsheet
that I found on at scene, and I actually, whereas
(18:53):
I did enjoy how automated Mint was. What I love
about the spreadsheet is that, like I have to physically
input every expense. By doing I'm like, yep, spend that
much money there and then it kind of allocates where
everything's going. You can look at it in categories, and
so when you can kind of like amass all that together,
you can go like, WHOA, I'm spending so much money
(19:14):
on going out and maybe that's fine. So it can
be a great way to look back and go, Wow,
where can I change?
Speaker 1 (19:21):
Yeah.
Speaker 3 (19:21):
I like that approach Matt too, because I feel like
the mistake that a lot of people make with budgeting,
especially when they have like a specific savings or investing goal,
is they will you pay the bills, they will see
what's left over and then try to save from what's
left over, versus treating your savings goal like a bill.
And so this is why I'm a really big fan
of what's called the anti budget or the pay yourself first.
(19:46):
So the pay yourself first method is the method that
I use to budget, and essentially what that means is
I make sure that I am automating the money that
needs to go towards my fixed expenses, so we're talking
rent anything that's like it's a must. And then I
actually have automated my savings and investing goals as well,
so I know I want to invest five hundred dollars here.
(20:07):
I want to save two hundred dollars here, and that
stuff is all automated. So essentially what's happening is like,
whatever's left over is what I have to play with.
And let's say, you know, I have to have a
lean month because what's left over is not going to
let me go buck wild and go to brunch, you know,
every Sunday. But at least I know future Genie is
taken care of, and current Genie is just going to
(20:29):
have to figure out how to survive with what's leftover.
Speaker 4 (20:32):
I love that so much. Let's be intentional with our money.
And to your point too, Matt, that I love that
you said, if you want to enjoy that five hundred,
six hundred dollars a month going out and eating and drinking,
I love that for you. I'm the exact same way.
But because of that, I don't really buy new shoes
that often. Right, I have to bring something out of
a different line item so I can enjoy that thing.
(20:53):
And so intentionality with budgeting and forecasting is so important
because it allows us to feel happier with the decisions
we're making and how we're spending our money.
Speaker 1 (21:02):
Well, I'm wearing a lot. Besides keeping track of the
ins and outs of your money, are there other things
we should be tracking or aware of in our finances
that people are losing out on money or opportunities to save.
Speaker 3 (21:18):
I think so absolutely. One of the things that I'm like,
why is this still a secret in twenty twenty four
is a high yield savings account. It's the easiest way
for folks to literally get paid for saving money. A
lot of accounts that you'll find online. These are typically
online only accounts, so you won't be able to open
them at like traditional banks. Typically, these online accounts offer
(21:40):
much higher interest rates because they don't have the physical
infrastructure and all of the expenses that come with running
a traditional bank. And you can get like four percent
or more right now with the current interest rates just
for having your money in these accounts. So if folks
are afraid of like let's say, you know, you know
you should be investing, but you're a little freaked out
just because you don't know what to invest in. Put
(22:00):
some of your money in there. You know, you can
use it to save your emergency fund, you can use
it to save a down payment fund, and it's literally
just free money for putting your money in a bank account.
So I think that's one thing that everybody should be doing,
because if you're using a traditional savings account, you're earning
little to no interest in these accounts, and it's like,
what's the point if there's another option.
Speaker 1 (22:21):
CNBC Select reported last year that a whopping eighty two
percent of the population does not have a high yield
savings account, and currently I'm included in the step. When
you put money in a high yield savings account, you're
letting your money grow with interest. It's what's known as APY,
or annual percentage yield. Now, when you're looking to take
out a loan, then it becomes an APR, and you'll
(22:45):
want to find the lowest APR because that indicates how
much additional interest you're paying on top of what you borrowed.
But for things like a high yield savings account or
a treasury bill, it's an APY and you are essentially
the lender. So you want to find an account that
will give you the highest APY possible because that's how
much interest you're owed. This is free money. Honestly, what
(23:08):
are we doing with standard savings accounts?
Speaker 2 (23:14):
Well, and I'm also curious to get your perspective then
on how much money do you think should be in
an emergency fund and what is the best place to
park it? Because you know, genius, you talked about savings accounts,
but there's also money market funds and I don't know
if either of you get involved in that, but would
love to hear about that.
Speaker 3 (23:31):
So for me, you know, the standard practice for folks
who have and I do this in air quotes, a
stable career. You have little to no fear of, you know,
potentially losing your job anytime soon. I think three to
six months of expenses is a reasonable amount. I, as
an entrepreneur, operate from a place of cautiousness, and so
(23:54):
I like to have a year's worth of my expenses
saved because obviously my income is very variable. And so
that's what it looks like for me. But I think
folks need to take into account several things like how
stable is your career, what is the likelihood that if
you were to lose your job, how long would it
take you to replace that job? A lot of those
things have to factor in as well as like are
(24:16):
you partnered, are you single? Do you have children? It's
your career flexible where you could make a quick move
to a lower cost of living area if you were
to experience some sort of income hit. So there's just
a lot of things to factor in. I think, err
on the side of caution.
Speaker 4 (24:31):
I'm right there with the three to six months of
expenses For me, I keep between six and eight months.
For people who are literally just getting started. I would
feel really good if all my friends and family have
ten thousand saved for their emergency fund.
Speaker 3 (24:44):
I'm considering They say that, like the average person can't
weather like a what is it a four hundred dollars, Yeah,
I can see or something. It's like, oh, yeah, you know,
anything's better than that at this point.
Speaker 1 (25:00):
Not far off. A recent poll from Forbes Advisor found
that one in four Americans had less than one thousand
dollars in a savings account. If you're going by generations,
the percentage is a smidge higher for millennials and gen z,
and this year, forty nine percent expect to save the
same amount or less than they did the previous year.
Nerd Wallet recommends that if you're starting off, set aside
(25:22):
enough money that would cover an unexpected but essential bill
like a car repair, payment or a medical bill. Maybe
that number is four or five hundred. Start there, but
keep going until you have about six months worth of
average expenses saved.
Speaker 4 (25:39):
Yeah, So an emergency fund is insurance against you doing
something stupid with your money, which means, oh my gosh,
I popped my tires, I've got to go buy a
new set, or my dish washer broke. I gotta go
do something, but I don't have the cash. Therefore I'm
going to swipe a credit card at thirty percent. Or
my dad just died and the funeral is going to
(26:00):
cost fifteen thousand dollars and I don't have any of
that money. I got to go get a four to
one k loan. Right, bad things don't do those things.
So that's the point of an emergency fund. It's insurance.
It's not an investment. It's literally wiggle room between you
and life. Right, So keeping that mindset, now places to
park it. I think two places are great, and one
Finance is what I use. I also use public dot
(26:21):
COM's highield cash account paying five point one percent. So
how do these high yield savings accounts that Genie was
just talking about, how are they able to pay you
four percent five percent on your money. They do that
because they take your money and they buy treasury bills
with your money, six month, nine month treasury bills. These
are short term debt instruments that are issued by the
(26:43):
US government pretty much saying lend us money for six
months and will pay you, you know that five percent
on an annualized basis, and they take a spread of like,
you know, a very little bit, which is how they
make their money. So you know, they're happy when more
people give them money. But we're happy because we don't
have to directly communicate with the government to try and
buy their debt. We're just like you know, parkting it in,
you know, in whatever these yield savings accounts are. And
(27:05):
so the money market funds that you're alluding to, Matt,
those are very similar accounts.
Speaker 3 (27:09):
Right.
Speaker 4 (27:09):
The way they do that is either through CDs, treasury bills,
things of that nature, and they're all just debt instruments CDs.
Speaker 1 (27:17):
Like compact discs. I used to use those.
Speaker 5 (27:19):
I think it's some deposit okay, thanks to NISE and
they're able to do you know, it's the exact same stuff,
and so they are incentivized to get as many people
as possible to give them money because they make a
little bit of a spread there on let's call it
the five point five percent, and they earn five point
five percent, which is interest, and then they pay you
five percent, so they kind of keep that half percent
(27:41):
for themselves.
Speaker 4 (27:42):
And that's why a lot of these technology companies we've
seen Public, dot Com and so Fine, now, Robinhood even,
you know, all these random companies are getting into these
high yield savings. Well there's a lot of money in
it for them, for sure, if they're able to attract
the right kind of customers.
Speaker 2 (27:54):
But the important thing is that your emergency fund should
be liquid, meaning that you can pull it out in
a second and use it as quickly as possible, because
if it were tied up in a like let's say
you're using your four one K or any other sort
of investment count as your emergency fund, well, you can't
get that money right away. Let's say, or maybe your
house is your insurance, like, you cannot get that money immediately.
(28:15):
So the important thing about the emergency fund is that
you can grab that money exactly when you need it.
Speaker 4 (28:19):
And what happens here To come back to this idea
that Molly talked about of inflation. Right, everything right now
is between thirty and fifty percent more expensive than it
was January of twenty twenty. So by not parking your
savings when you do not earn this five percent four
percent in these different types of funds, you are just
giving your money away to inflation.
Speaker 3 (28:37):
Right.
Speaker 4 (28:38):
To keep up with inflation, you must be using these
types of accounts to ensure you have the same amount
of purchasing power Matt one year later now as you
did last year, because inflation is going to be eating
away at that regardless of what you do with.
Speaker 1 (28:49):
Your money now real quick like money market funds, So
I take that as investing. Am I also going to
risk losing my money then too?
Speaker 3 (28:57):
Now those accounts are FDAC insured, just like a regular
savings or checking account, so you don't have to worry
about that. And also there's another type of account that
a lot of folks are not aware of that are
available at like major brokerage firms like Charles Schwab and Fidelity,
which are called cash management accounts. And so these accounts
can typically offer similar rates to a high old savings account,
but instead of having the restriction on how many times
(29:20):
you can withdraw in a month, because typically savings accounts
have a six time withdrawal limit in a thirty day period,
and if you go beyond that, you can potentially pay
a fee. Cash management accounts operate very similar to a
checking account, so you can get a debit card that's
associated with them, and you can withdraw your money through
an ATM. So it's another way to potentially have your
(29:40):
emergency fund saved. And what's cool, like, let's say you
have an account with Fidelity and you invest through Fidelity.
You can have your cash management account linked to your
investment portfolio and then just like put money in your
investment accounts. That's access funds, that's savings, and it's just
a really seamless process for you to continue to bulk
up your investments and having all your stuff in the
same brokerage firm.
Speaker 1 (30:03):
Coming up on grownup stuff, how to adults.
Speaker 3 (30:07):
I just had to work five hours to get these shoes.
When you think about it, it's like do I really
need the shoes.
Speaker 1 (30:15):
We'll be right back after a quick break, and we're
back with more grown up stuff how to adults.
Speaker 2 (30:27):
When it comes to budgeting, Like we've heard a lot
about this fifty thirty twenty budget, and I think that
can be a really great system for when people do
look through the ins and outs of the finance, how
much money is coming in, how much is going out,
and then put those into buckets. So around fifty percent
should be used for what you need, thirty percent for
your wants if you want to go to the movie,
you want to go, get some food, and twenty percent
you should be saving. I'm curious what you guys think
(30:50):
of this fifty thirty twenty rule, and if what other
sort of systems you guys put in place, like pay
yourself first that people can kind of cling on to
to start their budgeting journey.
Speaker 3 (31:00):
I mean, I think it sounds nice on paper, but like,
let's be honest. You guys live in New York City,
and I know most people in New York City are
using way more than fifty percent of their income on
their basic necessities.
Speaker 1 (31:11):
I would say, like most of that fifty probably eighty
percent is just rent for me, eighty ninety percent is
just rent.
Speaker 3 (31:17):
There you go. So those percentages, I think when people
first see them, they're kind of just like, Okay, well
that's great, but that's ridiculous. You know, how am I
supposed to do that supporting a family of four on
like seventy five thousand dollars a year. And so I
think the first thing is to realize that the numbers
are a suggestion, and obviously you need to customize them
(31:37):
to fit what makes sense. There's like a lot of
things that factor into this stuff, and so I think
sometimes if you are looking at your numbers and they
just are not adding up, the math is not mathing
as they say, you're gonna have to start getting a
little creative and you're gonna maybe have to start making
some short term sacrifices for some folks that might be
(31:58):
taking roommates, you know, that might be using your home
as an airbnb. There might be opportunities for you to
like rent out your car on touro, or start taking
on some gig economy work to like boost your income,
to pay off some debt and free up some savings.
So I think it's okay to come to the cool
conclusion that you know, we're gonna have to make some
(32:19):
short term sacrifices, but there is a long term perspective
that's going to help keep us motivated during that transition period.
Speaker 2 (32:26):
And I also just wanted to say, like, you know,
if we're going to set aside twenty percent for savings,
like that could mean a lot of things. You know
that you're putting money into your emergency fund. That could
be that you're putting money into your four one K plant,
or you're investing. That could also mean like if you
don't have that much money and you're setting aside money
for like maybe a trip for the weekend for you
and your kids, as long as you were taking twenty
percent and you were using it to save for whatever
(32:48):
is the most immediate goal for you, whether it's paying
down your debt or anything like that. Like, there's a
lot of different ways to save, but the important thing
is that you're putting a name or a number to
that much money, and you're you know where you're putting
it totally.
Speaker 3 (33:01):
I think the important part, too, is taking the manual
decision making process out of this as much as possible,
because human nature is like, if you see the money,
you're not gonna want to save it. You're going to
want to do something with it. But if you can
automate it so that when you get paid, if your
employer offers this where you can split your payroll and
(33:22):
you can have a certain amount of money going automatically
into your high old savings account, or you can automatically
increase the percentage that's going into your four oh one
K every six months or something like that. That automation
will help you get so much further because it's like,
think about how many times you've told yourself, I'm going
to the gym today and then something happens and you
(33:44):
don't go to the gym. But if you know there's
an uber that schedule to take you to the gym,
and if you cancel it, they're going to charge you
a fee, you're gonna go to the gym, right, So
it's just like set it up so that you have
a greater chance of success because you don't have to
think about it, cause there's a million decisions we have
to make every day and you having to go in,
log into your bank account, transfer this money, make sure
(34:07):
that it happens. Like, there's just so many things that
can get in the way of that happening, So automate
as much as possible.
Speaker 2 (34:12):
I love that. There's another great book. It's called Atomic
Habit's by James clear, and he calls that a commitment
device that you know, by setting aside like twenty percent
of your pretext income to go into your four one K,
that is a commitment device. And yeah, I love the
idea of like, don't give me money I can't spend.
Speaker 3 (34:29):
Yeah, I don't want.
Speaker 1 (34:29):
To see it.
Speaker 3 (34:30):
I know you mentioned the book Your Money, Your Life,
which I'm obsessed with because that book is the whole
origin of the financial independence movement. And when they talk
about this concept of understanding how many hours of your
time you're trading for something? Right, like that one hundred
and fifty dollars pair of shoes. I just had to
(34:53):
work five hours to get these shoes. When you think
about it, it's like do I really need the shoes?
This has five hour This is a long time, you know.
And so just like having that value based approach, where
is this worth the amount of time to buy these
damn shoes?
Speaker 1 (35:08):
And I do the opposite effect where I'll be like, hmm,
how much is my time worth that it's worth paying
for the delivery service?
Speaker 3 (35:19):
Yes, I absolutely agree with you. I think there's a
benefit to convenience. I'm a big proponent of buying convenience
investing in convenience, because the less that you're doing activities
that are basically just time sucking but are not adding
to your bottom line, the more you can open up
space for what I talked about earlier, which is side
(35:39):
hustles Molly. And so I think just reframing how you're
spending your time is a really good way to then
be able to optimize it so you can work on
those things that are going to help you make more money.
Speaker 1 (35:49):
Okay, I feel a little bit better about myself. And
speaking of feeling better, I will say, if I'm being
honest with myself, doing the research and preparation for this
interview and just thinking about the general economy right now
sends me into minor panic territory. How do I calm
myself down about my financial situation while being responsible and
(36:11):
not just like straight up becoming a hermit and never
doing anything. Well.
Speaker 3 (36:17):
I think you have to just decide what you're going
to prioritize, you know. I think there can be this
idea that once you start getting into like the world
of personal finance, you want to do everything. I gotta
do a budget. I got to say my emergency fund.
I have to invest for retirement, I have to renegotiate
all my credit card debt. And it's just like, relax,
Let's pick one thing to tackle. Let's pick the thing
that is holding you back the most right now. Focus
(36:39):
on that because there will always be something else to
deal with when it comes to money. So just get
to a place where you make a priority list of
what is most important, what is going to get you
to the next goal, and relax because we're all navigating
the world of money and it's a lifelong journey, so
you don't have to do everything right now.
Speaker 2 (36:59):
And it's also like an a lot of peop don't
talk about this. Money is really emotional.
Speaker 1 (37:02):
Yes, this is why I'm having panic. We'll talk about
it right now.
Speaker 2 (37:05):
Because they feel well, they feel shame, they feel like,
you know, they're always comparing themselves to their friends or
their family or whoever, and like it is so so
incredibly important too, especially if you're in a relationship to
have the discussion about money, because you know, if your
partner's doing something that you're not aware of and they're
taking your credit card, you know, there just needs to
be like a mutual understanding about it. And so I'm
also curious, like if you guys have any advice for
(37:28):
people who like they want to talk about money, but
they're maybe afraid to do it or to discuss it
with their partner, Like, if any advice for people in
those situations.
Speaker 3 (37:36):
Yeah, I wrote a whole chapter of this in my book,
because honestly, this is one of those things that people,
especially when you start talking about like pre nups and
you know, how do you find out about somebody else's debt.
I'm a big fan of money dates, so you know,
if you're in a partnership and you guys are already
living together and you just want to like feel like
you're working on something collectively. Monthly money dates are a
(37:57):
really good idea. Not after a stressful day work, not
after the kids have been like you know, driving you insane.
You want to like take some time out, go to
a neutral spot, maybe get a margarita, sit down, talk
about what the goals are, talk about things in a
way that are positive, that are not accusatory, because most
of the time people are not actually doing things maliciously
(38:20):
with money. You know, you just have two different philosophies,
you have two different upbringings, you have different money trauma,
and those are things that you have to figure out
how to coexist peacefully.
Speaker 4 (38:31):
I couldn't have said it better myself. I think the
biggest thing that helped me after I graduated college move
forward from a financial perspective was having my accountabil buddy. Right,
Having someone that can walk with you in that journey
romantically that's great too, but just having a friend that
is around there to hold you accountable and say, hey,
wait a second, you said that you were not going
(38:52):
to rack up more credit card debt. I see you
want to go on that vacation. What are we doing here, buddy?
Speaker 1 (38:56):
You know.
Speaker 4 (38:57):
So just having that accountability and having a friend there
that's going to be in your corner, I think it
was great too.
Speaker 2 (39:01):
And I think people are like, you know, maybe it's
a scary thing, but on the other side of it
can actually you can bring you closer together. Like my
wife and I have had many many financial discussions about
our future, about where we're at in our careers, about
our goals, about what you want to buy a house,
and like being on the same page and working together
towards those goals has brought us so much closer together.
And if there are people in your life who are
(39:23):
good with money, are very financially on top of it,
or like they're progressing their career, like talk to them
about how they got there. Because through me talking with
my friend about where I'm at and like my fears
and my worries, like, they brought us closer together and
I learned so much too.
Speaker 1 (39:36):
And that is why I also brought in Jenise and
Austin because they are my friends as well, or I
like to consider them my friends, and they know way
more about this stuff than I do. So I and
listen Jenny's and Austin. I'm going to be seeing you
next month, so be prepared for me to ask you
more questions for asking for a friend, of course, asking
for a friend, it's a date.
Speaker 2 (39:54):
I'm curious, you know, we talked a little bit about
your financial journeys up top. I'm curious to hear about
kind of what resource is that we're out there that
really helped you that you enjoy sharing with people. Like
for me, it's I don't know if either of you
are on Reddit, but there is a subreddit called personal finance.
It has an incredible amount of resources. It's been huge
for me, and that's where I found out about your
money or your life, and also The Simple Path to Wealth,
(40:16):
which is another green book on investing. So are the
resources that both of you love that are out there
that you typically find yourself sharing with people.
Speaker 3 (40:24):
So I'm an audio file so I am a lover
podcast when it comes to learning, just because I'm a multitasker.
I have them on all the time. I'm always learning
on the go. So some of my favorite podcasts when
it comes to learning about personal finance are So Money
by Far, New Sharabi, Journey to Launch by Jimilisu Front,
and I am a big Wall Street Journal podcast fan.
(40:46):
So just like staying in touch with what's going on
in the money world, it makes you feel empowered, you know,
and knowledge is power. So find the creators, find the
folks who you feel inspired by, and just make it
a habit.
Speaker 4 (40:58):
One hundred percent, you know, think what could really be useful.
And it certainly helped me back in the day when
I was really listening to Dave Ramsey all the time
and just hearing the people call in and talk about
their own situations. There's a YouTuber, Caleb Hammer that does
these really cool sort of one on one interviews he
calls them the financial audits, So he'll have someone on
his show and he'll go through all of their checking, transactions,
(41:20):
their savings, if they have any credit card, debt, investments, everything,
And it's really cool, I think from a resource perspective,
to see how other people are handling their money, both
good and bad, as well as getting his professional opinion
on what to do about it. I think Copilot is
an awesome app for people who are looking to create
the budget. They do all the automations on the back
(41:41):
end somewhere how mits would have kind of plugs it
in like that, And if you're trying to think about
investing or how to approach that, The Little Book of
Common Sense Investing by John C. Bogel is a really
really good book. He founded Vanguard small company, who know
if you know anything about them, but it's a little
Book of common sense investing and it is a very
(42:04):
straightforward beginner's guide to just thinking about how to perceive
opportunity cost as it relates to investing, twit retirement.
Speaker 2 (42:12):
That's fantastic. Last thing is anything that we didn't cover
today that you guys wanted to mention to the listeners
before we hop.
Speaker 4 (42:17):
Off you are exactly where you need to be. Do
not overstress, Do not feel like you are having a
panica Tachnic Volley was alluding to earlier, you were doing
everything correct. Inflation sucks. We're all right there with you.
Figure out ways to have fun on a budget. That
might mean just going outside, have a bagel, walk around
(42:38):
your neighborhood. Don't think that Instagram is reality. And oh,
wealth happens when intentionality and discipline meet. So if you're
intentional with your money and you stay disciplined with that
sort of process, you will build wealth. It is inevitable
love that Austin beautifully put.
Speaker 2 (42:56):
So where can people find you if they want to
learn more about what you do and how they can
learn from your journeys.
Speaker 3 (43:01):
So you can find me at Jociero dinetto podcast wherever
you're listening to grown up stuff how to adult. And
you can find out more about my book at financially
litbook dot com.
Speaker 4 (43:12):
That was a really good plug. I don't have a book.
I do a podcast, though, Rich Habits Podcast. We're a
top ten business podcast on Spotify. Tens of thousands of
people tune in every Monday and Thursday to check us out,
so super grateful. There again, that's Rich Habits podcast, and
I'm on TikTok and Instagram at Austin Hankwitz and I
post short form videos about personal finance and investing. So
(43:34):
if you thought this budgeting stuff was nerdy, you're gonna
hate my content.
Speaker 2 (43:41):
Really dive deep.
Speaker 1 (43:42):
Thank you both Jenny's and Austin so much for being
with us today on the podcast. I have learned so
much from you and we might be asking you to
come back and share more insights with us than not
too distant future.
Speaker 4 (43:54):
Looking forward to it.
Speaker 2 (43:55):
Yeah, thank you both so much. This has been wonderful.
Speaker 4 (43:57):
Thanks everyone.
Speaker 3 (43:58):
Thank you.
Speaker 1 (44:03):
Denise and Austin together, you are both such a calming
presence on a topic that really deeply stresses me out.
I am forever grateful, along with a newfound sense of calm.
Here's what else I'm taking with me on my financial
journey from this conversation. Knowing your net worth is crucial
for financial awareness. Just knowing where you're starting is half
the battle. And don't be ashamed. Know that this is
(44:26):
just the beginning of taking control of your finances, trying
to accomplish all of your financial goals at once. Can
be overwhelming, so know where you're at and try to
focus on one goal at a time, and if you
have debt, focus on that first and foremost, Pay yourself first.
After you pay your rent and your mortgage and all
of the other essentials, put money into your savings and
(44:49):
use what's left over for the rest of your expenses.
You can often choose to have a portion of your
paycheck automatically go into a savings account. This can help
you achieve your financial goals. It money into a high
yield savings account or a money market fund. They offer
high interest rates and can be a good place to
park your emergency fund and help grow your money. Remember
(45:11):
that interest on it is free money. Don't leave it
on the table. Open communication about money is important, whether
it's with a partner or a friend. It can also
really bring you closer together. Consider taking on a financial
accountability buddy to help you stay on track with your budgeting.
And finally, knowledge is power. Knowing your options and what
(45:31):
information is available about personal finance is empowering, not scary.
Resources like podcasts and books can provide valuable insights and guidance.
Matt I saw a fire and a passion in you
when you talked about money in this episode. I feel
like I'm seeing another universe where maybe you did not
go into theater or sound engineering or podcasting, and you
(45:53):
listen to your parents and went to school for finance,
but you've never considered that route today or in the past.
Speaker 2 (45:59):
I mean, look, I don't want to look back in
my life and say I have regrets. We're in a
very cool place, we have a cool job, this is fun,
this is but I do want to continued learning and
growing in my financial life because the older I've gotten,
the more I've realized how important it is. Not that
you have to be super involved in it, but it's
(46:19):
so important to know how it works so you can
take care of yourself and your family.
Speaker 1 (46:23):
It's very important stuff. And honestly, it did give me
a little anxiety hearing about it. I won't lie to you,
but I'm feeling motivated in maybe like a shameful way,
but I think it's still motivation nonetheless to use some
of the tools that Cheni's and Austin talked about. But Matt,
what's next on GUS, which is what we like to
sometimes call the show for short, Sometimes it reminds me
(46:46):
of that plump little mouse and Cinderella and it makes
me smile. But what is our next episode?
Speaker 2 (46:50):
Reminds me of the Father from my Big Fat Greek
Wedding and oh that's right, Gus, which is one of
my favorite movies.
Speaker 3 (46:56):
Great film.
Speaker 2 (46:57):
Well next up on Gus, not wind X. But we
are going to be in the kitchen learning some basics
of cooking like an adult. We'll figure out what you
should always have in stock in the fridge, pantry and
spice rack. What are some of the basic go to
dishes and techniques that will set you up for success
at meal time?
Speaker 1 (47:12):
Matt, you may have money on lock, but I really
feel like I can bring something to the table. Pun
very much intended in this next episode.
Speaker 2 (47:22):
Stay hungry and join us again in two weeks on
our season two finale of Grown Up Stuff, How to
Adult And if you're enjoying the show, don't forget to
follow or subscribe wherever you are listening so you don't
miss an episode. We also want to hear from you,
so go ahead and leave us a rating or review
on your podcast player of choice.
Speaker 1 (47:39):
Or you can send us an email tell us what
kind of adulting stuff you're trying to figure out and
want us to cover on the show. You can send
us an email or voice note to grown Upstuffpod at
gmail dot com. You might hear us say ging you
on an upcoming episode. And remember you might not be
graded in life, but it never hurts to do your homework.
Speaker 2 (48:00):
This is a production from Ruby Studio from iHeartMedia. Our
executive producers are Molly.
Speaker 1 (48:05):
Sosia and Matt Stillo. This episode was engineered by Matt Stillo.
Speaker 2 (48:10):
And written by Molly Sosha.
Speaker 1 (48:12):
This episode was edited by Sierra
Speaker 2 (48:14):
Spree and special thanks to our teammates at Ruby Studio,
including Ethan Fixel, Rachel Swan Krasnoff and Bra Smith, Deborah
Garrett and Andy Kelly.
Some people will say it's ghosh to talk about money,
which is probably why I feel so ill prepared when
it comes to really tackling my financial tracking and budgeting.
And I know I'm not alone. As inflation continues to rise,
though albeit at a slower rate now, it can feel
like each year you're struggling to stay out of the
red when it comes to your finances. In a recent
survey from the personal finance website bank rate, Americans said
(00:27):
they feel like they'd need to earn roughly two hundred
and thirty three thousand dollars a year to feel secure
with their finances. But according to the US Census Bureau,
the average annual income for a full time worker is
still shy of seventy five thousand dollars. So what do
we do? Prices are increasing, and another pull from bank
rate reported that thirty six percent of US adults have
(00:48):
more credit card debt than emergency savings. Until we hit
the lottery or land our dream salary. The best option
to take hold of our finances is to start tracking
all of the ins and outs and budgeting. But where
do we start. How much should we have in our
savings and what counts as a necessity under the fifty
twenty thirty rule of budgeting. Start taking notes, because this.
Speaker 2 (01:11):
Is grown up Stuff.
Speaker 1 (01:17):
Hello to all my friends and grown ups out there listening.
Welcome to another episode of grown Up Stuff How to Adult,
the podcast where we try to answer all the important
life questions about being grown, like what's a budget? And
do I really need one? This is me Molly, a
fellow passenger on this crazy train of adult life, and
as always I'm joined by my money minded and financially
(01:41):
responsible friend and co host, Matt Stillo. If you have
been listening to this show at all over the past
two seasons, then two things are very clear to you.
One I am very clueless about a lot of things.
And two, Matt kind of loves money like he loves
talking about it, reading about it, and researching financial trends.
(02:01):
He's investing, he's trading, he's saving, he's budgeting. He does
it all. So, Matt, before I ask you about your
experiences of money, I want to let our dear, smart,
cherished listeners know that I remain your ever vigilant but
sweet summer child. I will not let this episode go
over your heads, because my eyes genuinely start to glaze
(02:22):
over when someone starts talking about investments or budgeting just
gives me hives. But you know what, I'm dedicated to
overcoming this fear here and now, and you know what,
who knows, maybe I'll even end up making myself ah
a budget. I don't even like that word. Why is
that word so hard for me to say? Makes me ill?
(02:43):
But Matt, now over to you. Were you always this way?
Did you enter into this world reading books about financial planning?
Speaker 2 (02:49):
You know it's funny as you were describing me as
someone who budgets and reads about finance and is saving
and investing. My entire family is listening to this podcast, going.
Speaker 3 (02:59):
Is she what?
Speaker 1 (03:01):
Matt?
Speaker 2 (03:01):
Is she talking about the same math too that they
encouraged to go to finance school? And he was like, no,
I hate finances. I'll never learn. I don't wanna.
Speaker 1 (03:11):
One year, my.
Speaker 2 (03:12):
Dad was trying to explain something about my taxes to me,
and I was like, Dad, I would pay you to
never have to know about this ever again. I was
so financial. I was like, I don't get it. I
don't want to know. Money freaks me out. I don't
want to think about it forever. For the longest time
I hated finance years of my life, I just coasted
(03:32):
by on vibes. I was like, it feels like I've
spent probably about as much money as I have until
I looked at my Chase balance and I was like,
doing well this month, I got fifty bucks left. So
for anyone who's listening to this, I really you were
in good hands because like I was exactly that way
if you feel that you're that way for a very
(03:53):
very long time. And what I will say is I'm
lucky because I have a very very generous friend who's
our first guest on this podcast. His name is Joana Batista,
who is very kind. He's very smart, and he's very
generous with his time and his words, and he kind
of gave me like a come to Jesus moment and
he explained to me in very simple terms like what
I could be doing, what I should be doing, and
(04:16):
he didn't judge me. He was like, Matt, I love you,
I'm here for you, and like I worry about you
and I want you to like have these tools that
I that I've spent my life like learning about so
that you can be good because I want you to
be good because you're my friend, so let Molly and
I be that friend for you. Right now, let's talk
about your situation.
Speaker 1 (04:33):
I don't like to budget because it stresses me out,
but I track my expenses. I currently have no credit
card debt, which is a big deal, so I can't
have to worry about that.
Speaker 2 (04:43):
Ye's so huge.
Speaker 1 (04:44):
But I've had some really big expenses in the last
year that have dwindled my savings, and it's stressful as
hell to not have that same cushion anymore. So I'm
really hoping our very special guest today can and help
me find the best path to get to more understanding
(05:05):
and less stress about it.
Speaker 2 (05:06):
I think they will. Today we are joined by personal
finance experts Janice Torres and Austin Hankwitz. Janie is the
host of the personal finance podcast Yokiero Dinero and the
author of the brand new book financially Lit, The Modern
Latina's Guide to level up your d naro and become
financially Bodorosa.
Speaker 1 (05:26):
Austin is a personal finance TikToker and creator of the
popular personal finance newsletter The Rate of Return. He also
co hosts the financial literacy podcast Rich Habits Jennie Torres
and Austin Hankwitz. Thank you so much for joining us
on growing up Stuff how to Adults. You and I
(05:48):
work together on another podcast called Mind the Business small
Business success Stories, and that's in partnership with QuickBooks. Anyone
out there with a small business please go and listen.
So that's a great project that I know you both from.
But today we're going to step out of your expertise
as small business owners and into your expertise of personal finance,
(06:11):
because you both are experts in personal finance, and here's
where I want to start. You're both very successful and
have your financial shit together. Can you tell us a
little bit about your journey and becoming just more fiscally
responsible Denise, I'll start with you.
Speaker 3 (06:31):
Yeah. I love that because that was the complete opposite
of my situation for the majority of my twenties. I
thought I had my financial shit together, and I thought
that just meant like knowing how to make money. So
I was on this pursuit in my twenties to make
one hundred thousand dollars a year by the time I
turned thirty. This was like the pinnacle of success for
(06:52):
me in my head. And then when I turned thirty
and I was making one hundred K. I was still
leaving paycheck to paycheck, and I was like, wait a minute.
I thought this magical number was going to resolve all
my financial issues. And I quickly realized that it's not
about how much you make, it's about actually telling your
money what to do so that you don't find yourself
(07:14):
in a situation where you're making a ton of money
but literally have nothing to show for it. So I
started listening to podcasts, reading a lot of books. I
found out about the financial independence movement or the Fire movement,
and slowly but surely I created a plan to get
out of student loan debt, get out of credit card debt,
and I was able to pay off thirty nine thousand
dollars of debt in seventeen months, and that set me
(07:37):
onto trajectory where now I am investing for early retirement.
I am fully self employed. I was able to quit
my job just because knowing that you don't owe anybody
money and being debt free is a very powerful position
to be. That gives you a lot of options.
Speaker 1 (07:52):
And for our listeners who are unfamiliar with the Fire movement,
it's an acronym for financial independence, retire early so you know,
save now so you don't have to work forever. Yeah, right, Austin,
how about you.
Speaker 4 (08:06):
I'm right there with you, Janie. Being debt free and
having control of your income is one of the most
powerful places to be. And I started this journey actually
in high school. Weirdly enough, I was visited by Dave
Ramsey Kinway High School because his headquarters is here in Franklin, Tennessee,
and the state of Tennessee is the number one state
(08:27):
for bankruptcy per capita, which, if you guys mean that
or not, I did not wow. And so once Dave
saw that statistic back in like twenty ten, He's like, oh,
I'm going to just you know, start the kids early,
meet him allut their high schools, and teach them about
the baby steps. And that was my first foray and
just understanding, wait, what is debt, what is investing? What
are finances? And then I took that to college. So
I went to the University of Tennessee and I studied
(08:49):
finance and economics. I am a self proclaimed super nerd.
And after I graduated, you know, I got my first
job and I was like, Okay, I'm ready. I'm ready
to start budgeting. And I saw Dave was talking investing.
I want to get to investing, right. That sounds sexy
and fun, and then once you know you go through it,
you're like, wait a second, lifestyle creep is real, healthcare
is real, transportation costs and food and all these other
(09:10):
different things like this is real, Like I really need
to figure this out. So that was my first foray
into sort of personal finance and investing, and that has
since now exploded. Back in March of twenty twenty, I
decided to stop doing this by myself and instead bring
people along with me. So by that, I mean I
was posting videos on TikTok, so instead of like lip
syncing and dancing, I was talking about how to build
(09:30):
my credit score or you know, aspire to go buy
my first house one day, invest to her retirement, things
of that nature. And that has since now allowed me
to be a content creator and podcaster. But the journey
to becoming financially independent has been a roller coaster and
I can't wait to dig in.
Speaker 2 (09:45):
So much of what you guys said resonates with me,
and I think that that's one of the most important
things for people to hear genius is like, it does
not matter how much money you make, but like the
biggest thing is is how much you're you're saving.
Speaker 1 (09:56):
Yeah, So what does it mean to be financially aware?
To the both of you, I.
Speaker 3 (10:01):
Think the first step to becoming financially aware is to
know your overall financial situation aka knowing your net worth.
So when I first calculated that number, which is essentially
all of your assets minus all of your liabilities, if
that number is positive, then that means you have more
assets than debt essentially, so you have some positive network equity. Yeah, right.
(10:23):
And then if the number is negative, then that basically
means you have more debts than you have assets. And
so when I did that calculation, I was like a
negative a four hundred and fifty thousand dollars between a
mortgage and student loan debt and credit cards and card notes.
And I'm like, oh my god, this is the first
time I'm seeing just the culmination of all my financial
(10:46):
decisions in one place. And it was a very stark
realization where I'm like, if I don't do something about this,
I'm literally going to be working until I died pay
off this debt, right, And so it's very easy in
that moment to just like put your head in the
sand and be like, well, whatever, you know, it's fine.
The world revolves around debt. This is just normal. And
(11:08):
I could have had that approach, but for me, the
idea of being in debt meant something a lot more.
I was very unsatisfied in my engineering career at the time,
and so I knew I wanted to make a career pivot,
potentially go off and work for myself. And that number
represented I got to keep working this damn job until
I get out of this debt. So the faster I
(11:28):
can get out of this debt, the more options I
have to reinvent my career. And so yeah, calculating that
number was the first wake up call for me. I
used a tool that used to be called Personal Capital,
it's now called Empower. It's a free app. You literally
link all of your investment, banking accounts, credit accounts, and
it gives you that calculation and that first bird's eye
(11:50):
view I think is really important part of becoming financially aware.
Speaker 2 (11:54):
And Austin for you, what does like financial awareness mean
to you?
Speaker 4 (11:57):
I think becoming financially aware where means you understand opportunity cost.
And it's so funny too, because as people begin to
understand investing in compound growth and how much inflation is
eating at their purchasing power, becoming financially aware means that
I know if I take one hundred dollars, one hundred
(12:18):
and fifty dollars, twenty five dollars, whatever that number is
for you, and I'm investing it rather than spending it
on lifestyle creep or spending it on some sort of
variable expense is what I call it in the budget,
something that is like a pair of shoes or a shirt,
or an experience or something that I don't need to
survive and be happy, but I'm doing that just because
(12:39):
I want to. And the opportunity cost of not investing
that money turns into thousands of dollars throughout your life.
So I think coming to one the conclusion of Okay,
I understand now I'm aware enough to know that I
can either spend money or I can invest money. Right,
so if I'm spending it, I'm not investing it for
my future. And if I'm not in a place where
my future is rock solid, which is a place that
(13:00):
I want everyone to obviously be, and I think that
that is a place a lot of people can get
to if they have the right tools and resources. But also,
unfortunately Joanees, including myself, we all start with a negative
net worth, and I think the biggest thing people need
to realize is one, it's okay to start there, because
we're all there, right But two, now is time to
(13:21):
make the decisions of do I want to move in
the right direction if that means investing or paying off debt,
or do I want to sort of move laterally, which
is staying exactly where I am, kind of just marinating
in my bad decisions. And yeah, I think being financially
aware is having that realization that you can make a
change and there are steps to take.
Speaker 2 (13:39):
There's this really wonderful book that I'm probably gonna reference
a lot, and I wonder if you fret. It's called
Your Money or Your Life that I just absolutely love,
and it's talking about the more aware you can be
and not judge yourself for where you are, the more
that you have the tools and the knowledge to start
building back in the other direction.
Speaker 4 (13:57):
Unfortunately, a lot of people drift with their money. They
don't really have any like direction, right, They're not taking
the action where we take action with our career. We
take action with our friendships and our relationships and you know,
our family life. We take action with a lot of
these different things in our life to move forward and
progress towards something, but we don't with our money. And
so having the realization of I don't know where I am,
(14:18):
but I know I need to take action and I
know I need to make that first step is so
so important.
Speaker 2 (14:23):
And Instagram isn't life, you know, like see like I
think people see like, oh, my friends are going on
Like I deserve to go on vacations too, Like, oh
my friend is a car I should Like it's just
like to realize, like those people are probably going into debt,
Like they're probably just throwing money on their credit card
and they're going to Fiji and whatever, and like they
don't actually have the money.
Speaker 1 (14:44):
You've heard us mention lifestyle creep a few times now.
Even if you haven't heard this term, you may be
doing it and not realizing it. Essentially, it's an increase
in your spending, and most commonly, lifestyle creep happens when
you get a raise or a pay bump and instead
of pocketing all that additional income and to savings, you
increase your standard of living and just start spending more.
Instead of building your emergency fund or paying off your debt,
(15:07):
you opt for the nicer apartment, or you decide to
get the new car, or maybe it's as sneaky and
small as a lavender almond milk macha late every morning
from your favorite coffee shop. I'm super guilty of this,
but apparently I'm not alone. The website MarketWatch found twenty
twenty four data from the US Bureau of Economic Analysis
that showed that even though wages have increased over the
(15:27):
last four years, personal savings rates have actually decreased. Speaking
of lifestyle creep, which I am completely susceptible to, we
are seeing just record inflation rates right now, or at
least what feels like record inflation rates, and it's slowing,
but it's still rising. According to a bank Rate survey,
(15:49):
sixty three percent of Americans say that high inflation is
keeping them from being financially comfortable or secure. What advice
do you have for those of us? And I include
myself in that because I just feel like I'm spending
because everything else is more expensive So, what advice do
you have for those of us who feel like the
cost of living is getting higher and higher but our
(16:09):
paychecks aren't changing.
Speaker 3 (16:12):
Yeah. Well, I don't think that it's a coincidence that
the inflation rate is at an all time high and
the amount of credit card debt that Americans are getting
into is also at an all time high. It's actually
surpassed any other kind of debt at this point because
a lot of folks are literally having to rely on
credit cards for like everyday living expenses. I going to
buy groceries, which is insane for me. I realized that
(16:33):
I was treading water financially even though I had a
six figure paycheck because of all the debt that I was,
you know, continuing to rack up, and you know, with
things like vacations where I didn't have a plan for
how I was going to pay for them. I just said,
I'll put it on a credit card and we'll deal
with it later, right, And then you have that spending
hangover after the fact, and it just becomes this vicious cycle.
(16:53):
So for me, the most important thing that I did
to kind of mitigate the cost of living was finding
different ways to make money, you know, at the end
of the day, there's only so much that your job
is going to pay you. You know, most of us
will not be able to negotiate a fifty percent raise
just with a simple conversation with your boss saying, hey,
you know, life is expensive, I need to pay my
(17:15):
bills and you give me more money. Right, That's usually
not how it works. But I think a lot of
us have skills that we can potentially turn into a
side hustle. And I'm really a big proponent of figuring
out how to diversify your income because money is one
of those things where when you learn how to create it,
it can potentially become an infinite resource. Yeah.
Speaker 2 (17:35):
You know, for the people who out there who would say, like, well,
I've got a checking accounts and I've got my debit card,
or I've got a credit card and my credit card account,
what does budgeting do that simply like looking at my
bank state and every week or every month doesn't do.
Speaker 3 (17:49):
Yeah.
Speaker 4 (17:50):
Something I want people to think about whenever they use
the word budgeting is wealthy. People don't use the word budgeting.
They use forecasting because they're looking forward, not reacting to
a mistake they made. They're forecasting for what they want
to spend, and they're giving every dollar in assignment.
Speaker 3 (18:07):
Right.
Speaker 4 (18:07):
So for example, I use Dave Ramsey's budgeting app called
every Dollar, and before the month even starts, I've already
done this for the month of June. Here I forecasted
what I would spend in June. But I want people
to not think about budgeting as like this knotty word
that makes them feel gross inside. Like I want them
to think like budgeting is a way to reimagine that
(18:28):
into a way to forecast the future, and it kind
of gives you the sense of empowerment.
Speaker 2 (18:33):
I think that's a great mindset shift to think about it.
And the other thing that I think is interesting for
people who are starting budgeting is I mean, looking back
can also be kind of helpful to and again there's
no vari you shouldn't judge your past. But like, since
Mint went away, I've started using just an Excel spreadsheet
that I found on at scene, and I actually, whereas
(18:53):
I did enjoy how automated Mint was. What I love
about the spreadsheet is that, like I have to physically
input every expense. By doing I'm like, yep, spend that
much money there and then it kind of allocates where
everything's going. You can look at it in categories, and
so when you can kind of like amass all that together,
you can go like, WHOA, I'm spending so much money
(19:14):
on going out and maybe that's fine. So it can
be a great way to look back and go, Wow,
where can I change?
Speaker 1 (19:21):
Yeah.
Speaker 3 (19:21):
I like that approach Matt too, because I feel like
the mistake that a lot of people make with budgeting,
especially when they have like a specific savings or investing goal,
is they will you pay the bills, they will see
what's left over and then try to save from what's
left over, versus treating your savings goal like a bill.
And so this is why I'm a really big fan
of what's called the anti budget or the pay yourself first.
(19:46):
So the pay yourself first method is the method that
I use to budget, and essentially what that means is
I make sure that I am automating the money that
needs to go towards my fixed expenses, so we're talking
rent anything that's like it's a must. And then I
actually have automated my savings and investing goals as well,
so I know I want to invest five hundred dollars here.
(20:07):
I want to save two hundred dollars here, and that
stuff is all automated. So essentially what's happening is like,
whatever's left over is what I have to play with.
And let's say, you know, I have to have a
lean month because what's left over is not going to
let me go buck wild and go to brunch, you know,
every Sunday. But at least I know future Genie is
taken care of, and current Genie is just going to
(20:29):
have to figure out how to survive with what's leftover.
Speaker 4 (20:32):
I love that so much. Let's be intentional with our money.
And to your point too, Matt, that I love that
you said, if you want to enjoy that five hundred,
six hundred dollars a month going out and eating and drinking,
I love that for you. I'm the exact same way.
But because of that, I don't really buy new shoes
that often. Right, I have to bring something out of
a different line item so I can enjoy that thing.
(20:53):
And so intentionality with budgeting and forecasting is so important
because it allows us to feel happier with the decisions
we're making and how we're spending our money.
Speaker 1 (21:02):
Well, I'm wearing a lot. Besides keeping track of the
ins and outs of your money, are there other things
we should be tracking or aware of in our finances
that people are losing out on money or opportunities to save.
Speaker 3 (21:18):
I think so absolutely. One of the things that I'm like,
why is this still a secret in twenty twenty four
is a high yield savings account. It's the easiest way
for folks to literally get paid for saving money. A
lot of accounts that you'll find online. These are typically
online only accounts, so you won't be able to open
them at like traditional banks. Typically, these online accounts offer
(21:40):
much higher interest rates because they don't have the physical
infrastructure and all of the expenses that come with running
a traditional bank. And you can get like four percent
or more right now with the current interest rates just
for having your money in these accounts. So if folks
are afraid of like let's say, you know, you know
you should be investing, but you're a little freaked out
just because you don't know what to invest in. Put
(22:00):
some of your money in there. You know, you can
use it to save your emergency fund, you can use
it to save a down payment fund, and it's literally
just free money for putting your money in a bank account.
So I think that's one thing that everybody should be doing,
because if you're using a traditional savings account, you're earning
little to no interest in these accounts, and it's like,
what's the point if there's another option.
Speaker 1 (22:21):
CNBC Select reported last year that a whopping eighty two
percent of the population does not have a high yield
savings account, and currently I'm included in the step. When
you put money in a high yield savings account, you're
letting your money grow with interest. It's what's known as APY,
or annual percentage yield. Now, when you're looking to take
out a loan, then it becomes an APR, and you'll
(22:45):
want to find the lowest APR because that indicates how
much additional interest you're paying on top of what you borrowed.
But for things like a high yield savings account or
a treasury bill, it's an APY and you are essentially
the lender. So you want to find an account that
will give you the highest APY possible because that's how
much interest you're owed. This is free money. Honestly, what
(23:08):
are we doing with standard savings accounts?
Speaker 2 (23:14):
Well, and I'm also curious to get your perspective then
on how much money do you think should be in
an emergency fund and what is the best place to
park it? Because you know, genius, you talked about savings accounts,
but there's also money market funds and I don't know
if either of you get involved in that, but would
love to hear about that.
Speaker 3 (23:31):
So for me, you know, the standard practice for folks
who have and I do this in air quotes, a
stable career. You have little to no fear of, you know,
potentially losing your job anytime soon. I think three to
six months of expenses is a reasonable amount. I, as
an entrepreneur, operate from a place of cautiousness, and so
(23:54):
I like to have a year's worth of my expenses
saved because obviously my income is very variable. And so
that's what it looks like for me. But I think
folks need to take into account several things like how
stable is your career, what is the likelihood that if
you were to lose your job, how long would it
take you to replace that job? A lot of those
things have to factor in as well as like are
(24:16):
you partnered, are you single? Do you have children? It's
your career flexible where you could make a quick move
to a lower cost of living area if you were
to experience some sort of income hit. So there's just
a lot of things to factor in. I think, err
on the side of caution.
Speaker 4 (24:31):
I'm right there with the three to six months of
expenses For me, I keep between six and eight months.
For people who are literally just getting started. I would
feel really good if all my friends and family have
ten thousand saved for their emergency fund.
Speaker 3 (24:44):
I'm considering They say that, like the average person can't
weather like a what is it a four hundred dollars, Yeah,
I can see or something. It's like, oh, yeah, you know,
anything's better than that at this point.
Speaker 1 (25:00):
Not far off. A recent poll from Forbes Advisor found
that one in four Americans had less than one thousand
dollars in a savings account. If you're going by generations,
the percentage is a smidge higher for millennials and gen z,
and this year, forty nine percent expect to save the
same amount or less than they did the previous year.
Nerd Wallet recommends that if you're starting off, set aside
(25:22):
enough money that would cover an unexpected but essential bill
like a car repair, payment or a medical bill. Maybe
that number is four or five hundred. Start there, but
keep going until you have about six months worth of
average expenses saved.
Speaker 4 (25:39):
Yeah, So an emergency fund is insurance against you doing
something stupid with your money, which means, oh my gosh,
I popped my tires, I've got to go buy a
new set, or my dish washer broke. I gotta go
do something, but I don't have the cash. Therefore I'm
going to swipe a credit card at thirty percent. Or
my dad just died and the funeral is going to
(26:00):
cost fifteen thousand dollars and I don't have any of
that money. I got to go get a four to
one k loan. Right, bad things don't do those things.
So that's the point of an emergency fund. It's insurance.
It's not an investment. It's literally wiggle room between you
and life. Right, So keeping that mindset, now places to
park it. I think two places are great, and one
Finance is what I use. I also use public dot
(26:21):
COM's highield cash account paying five point one percent. So
how do these high yield savings accounts that Genie was
just talking about, how are they able to pay you
four percent five percent on your money. They do that
because they take your money and they buy treasury bills
with your money, six month, nine month treasury bills. These
are short term debt instruments that are issued by the
(26:43):
US government pretty much saying lend us money for six
months and will pay you, you know that five percent
on an annualized basis, and they take a spread of like,
you know, a very little bit, which is how they
make their money. So you know, they're happy when more
people give them money. But we're happy because we don't
have to directly communicate with the government to try and
buy their debt. We're just like you know, parkting it in,
you know, in whatever these yield savings accounts are. And
(27:05):
so the money market funds that you're alluding to, Matt,
those are very similar accounts.
Speaker 3 (27:09):
Right.
Speaker 4 (27:09):
The way they do that is either through CDs, treasury bills,
things of that nature, and they're all just debt instruments CDs.
Speaker 1 (27:17):
Like compact discs. I used to use those.
Speaker 5 (27:19):
I think it's some deposit okay, thanks to NISE and
they're able to do you know, it's the exact same stuff,
and so they are incentivized to get as many people
as possible to give them money because they make a
little bit of a spread there on let's call it
the five point five percent, and they earn five point
five percent, which is interest, and then they pay you
five percent, so they kind of keep that half percent
(27:41):
for themselves.
Speaker 4 (27:42):
And that's why a lot of these technology companies we've
seen Public, dot Com and so Fine, now, Robinhood even,
you know, all these random companies are getting into these
high yield savings. Well there's a lot of money in
it for them, for sure, if they're able to attract
the right kind of customers.
Speaker 2 (27:54):
But the important thing is that your emergency fund should
be liquid, meaning that you can pull it out in
a second and use it as quickly as possible, because
if it were tied up in a like let's say
you're using your four one K or any other sort
of investment count as your emergency fund, well, you can't
get that money right away. Let's say, or maybe your
house is your insurance, like, you cannot get that money immediately.
(28:15):
So the important thing about the emergency fund is that
you can grab that money exactly when you need it.
Speaker 4 (28:19):
And what happens here To come back to this idea
that Molly talked about of inflation. Right, everything right now
is between thirty and fifty percent more expensive than it
was January of twenty twenty. So by not parking your
savings when you do not earn this five percent four
percent in these different types of funds, you are just
giving your money away to inflation.
Speaker 3 (28:37):
Right.
Speaker 4 (28:38):
To keep up with inflation, you must be using these
types of accounts to ensure you have the same amount
of purchasing power Matt one year later now as you
did last year, because inflation is going to be eating
away at that regardless of what you do with.
Speaker 1 (28:49):
Your money now real quick like money market funds, So
I take that as investing. Am I also going to
risk losing my money then too?
Speaker 3 (28:57):
Now those accounts are FDAC insured, just like a regular
savings or checking account, so you don't have to worry
about that. And also there's another type of account that
a lot of folks are not aware of that are
available at like major brokerage firms like Charles Schwab and Fidelity,
which are called cash management accounts. And so these accounts
can typically offer similar rates to a high old savings account,
but instead of having the restriction on how many times
(29:20):
you can withdraw in a month, because typically savings accounts
have a six time withdrawal limit in a thirty day period,
and if you go beyond that, you can potentially pay
a fee. Cash management accounts operate very similar to a
checking account, so you can get a debit card that's
associated with them, and you can withdraw your money through
an ATM. So it's another way to potentially have your
(29:40):
emergency fund saved. And what's cool, like, let's say you
have an account with Fidelity and you invest through Fidelity.
You can have your cash management account linked to your
investment portfolio and then just like put money in your
investment accounts. That's access funds, that's savings, and it's just
a really seamless process for you to continue to bulk
up your investments and having all your stuff in the
same brokerage firm.
Speaker 1 (30:03):
Coming up on grownup stuff, how to adults.
Speaker 3 (30:07):
I just had to work five hours to get these shoes.
When you think about it, it's like do I really
need the shoes.
Speaker 1 (30:15):
We'll be right back after a quick break, and we're
back with more grown up stuff how to adults.
Speaker 2 (30:27):
When it comes to budgeting, Like we've heard a lot
about this fifty thirty twenty budget, and I think that
can be a really great system for when people do
look through the ins and outs of the finance, how
much money is coming in, how much is going out,
and then put those into buckets. So around fifty percent
should be used for what you need, thirty percent for
your wants if you want to go to the movie,
you want to go, get some food, and twenty percent
you should be saving. I'm curious what you guys think
(30:50):
of this fifty thirty twenty rule, and if what other
sort of systems you guys put in place, like pay
yourself first that people can kind of cling on to
to start their budgeting journey.
Speaker 3 (31:00):
I mean, I think it sounds nice on paper, but like,
let's be honest. You guys live in New York City,
and I know most people in New York City are
using way more than fifty percent of their income on
their basic necessities.
Speaker 1 (31:11):
I would say, like most of that fifty probably eighty
percent is just rent for me, eighty ninety percent is
just rent.
Speaker 3 (31:17):
There you go. So those percentages, I think when people
first see them, they're kind of just like, Okay, well
that's great, but that's ridiculous. You know, how am I
supposed to do that supporting a family of four on
like seventy five thousand dollars a year. And so I
think the first thing is to realize that the numbers
are a suggestion, and obviously you need to customize them
(31:37):
to fit what makes sense. There's like a lot of
things that factor into this stuff, and so I think
sometimes if you are looking at your numbers and they
just are not adding up, the math is not mathing
as they say, you're gonna have to start getting a
little creative and you're gonna maybe have to start making
some short term sacrifices for some folks that might be
(31:58):
taking roommates, you know, that might be using your home
as an airbnb. There might be opportunities for you to
like rent out your car on touro, or start taking
on some gig economy work to like boost your income,
to pay off some debt and free up some savings.
So I think it's okay to come to the cool
conclusion that you know, we're gonna have to make some
(32:19):
short term sacrifices, but there is a long term perspective
that's going to help keep us motivated during that transition period.
Speaker 2 (32:26):
And I also just wanted to say, like, you know,
if we're going to set aside twenty percent for savings,
like that could mean a lot of things. You know
that you're putting money into your emergency fund. That could
be that you're putting money into your four one K plant,
or you're investing. That could also mean like if you
don't have that much money and you're setting aside money
for like maybe a trip for the weekend for you
and your kids, as long as you were taking twenty
percent and you were using it to save for whatever
(32:48):
is the most immediate goal for you, whether it's paying
down your debt or anything like that. Like, there's a
lot of different ways to save, but the important thing
is that you're putting a name or a number to
that much money, and you're you know where you're putting
it totally.
Speaker 3 (33:01):
I think the important part, too, is taking the manual
decision making process out of this as much as possible,
because human nature is like, if you see the money,
you're not gonna want to save it. You're going to
want to do something with it. But if you can
automate it so that when you get paid, if your
employer offers this where you can split your payroll and
(33:22):
you can have a certain amount of money going automatically
into your high old savings account, or you can automatically
increase the percentage that's going into your four oh one
K every six months or something like that. That automation
will help you get so much further because it's like,
think about how many times you've told yourself, I'm going
to the gym today and then something happens and you
(33:44):
don't go to the gym. But if you know there's
an uber that schedule to take you to the gym,
and if you cancel it, they're going to charge you
a fee, you're gonna go to the gym, right, So
it's just like set it up so that you have
a greater chance of success because you don't have to
think about it, cause there's a million decisions we have
to make every day and you having to go in,
log into your bank account, transfer this money, make sure
(34:07):
that it happens. Like, there's just so many things that
can get in the way of that happening, So automate
as much as possible.
Speaker 2 (34:12):
I love that. There's another great book. It's called Atomic
Habit's by James clear, and he calls that a commitment
device that you know, by setting aside like twenty percent
of your pretext income to go into your four one K,
that is a commitment device. And yeah, I love the
idea of like, don't give me money I can't spend.
Speaker 3 (34:29):
Yeah, I don't want.
Speaker 1 (34:29):
To see it.
Speaker 3 (34:30):
I know you mentioned the book Your Money, Your Life,
which I'm obsessed with because that book is the whole
origin of the financial independence movement. And when they talk
about this concept of understanding how many hours of your
time you're trading for something? Right, like that one hundred
and fifty dollars pair of shoes. I just had to
(34:53):
work five hours to get these shoes. When you think
about it, it's like do I really need the shoes?
This has five hour This is a long time, you know.
And so just like having that value based approach, where
is this worth the amount of time to buy these
damn shoes?
Speaker 1 (35:08):
And I do the opposite effect where I'll be like, hmm,
how much is my time worth that it's worth paying
for the delivery service?
Speaker 3 (35:19):
Yes, I absolutely agree with you. I think there's a
benefit to convenience. I'm a big proponent of buying convenience
investing in convenience, because the less that you're doing activities
that are basically just time sucking but are not adding
to your bottom line, the more you can open up
space for what I talked about earlier, which is side
(35:39):
hustles Molly. And so I think just reframing how you're
spending your time is a really good way to then
be able to optimize it so you can work on
those things that are going to help you make more money.
Speaker 1 (35:49):
Okay, I feel a little bit better about myself. And
speaking of feeling better, I will say, if I'm being
honest with myself, doing the research and preparation for this
interview and just thinking about the general economy right now
sends me into minor panic territory. How do I calm
myself down about my financial situation while being responsible and
(36:11):
not just like straight up becoming a hermit and never
doing anything. Well.
Speaker 3 (36:17):
I think you have to just decide what you're going
to prioritize, you know. I think there can be this
idea that once you start getting into like the world
of personal finance, you want to do everything. I gotta
do a budget. I got to say my emergency fund.
I have to invest for retirement, I have to renegotiate
all my credit card debt. And it's just like, relax,
Let's pick one thing to tackle. Let's pick the thing
that is holding you back the most right now. Focus
(36:39):
on that because there will always be something else to
deal with when it comes to money. So just get
to a place where you make a priority list of
what is most important, what is going to get you
to the next goal, and relax because we're all navigating
the world of money and it's a lifelong journey, so
you don't have to do everything right now.
Speaker 2 (36:59):
And it's also like an a lot of peop don't
talk about this. Money is really emotional.
Speaker 1 (37:02):
Yes, this is why I'm having panic. We'll talk about
it right now.
Speaker 2 (37:05):
Because they feel well, they feel shame, they feel like,
you know, they're always comparing themselves to their friends or
their family or whoever, and like it is so so
incredibly important too, especially if you're in a relationship to
have the discussion about money, because you know, if your
partner's doing something that you're not aware of and they're
taking your credit card, you know, there just needs to
be like a mutual understanding about it. And so I'm
also curious, like if you guys have any advice for
(37:28):
people who like they want to talk about money, but
they're maybe afraid to do it or to discuss it
with their partner, Like, if any advice for people in
those situations.
Speaker 3 (37:36):
Yeah, I wrote a whole chapter of this in my book,
because honestly, this is one of those things that people,
especially when you start talking about like pre nups and
you know, how do you find out about somebody else's debt.
I'm a big fan of money dates, so you know,
if you're in a partnership and you guys are already
living together and you just want to like feel like
you're working on something collectively. Monthly money dates are a
(37:57):
really good idea. Not after a stressful day work, not
after the kids have been like you know, driving you insane.
You want to like take some time out, go to
a neutral spot, maybe get a margarita, sit down, talk
about what the goals are, talk about things in a
way that are positive, that are not accusatory, because most
of the time people are not actually doing things maliciously
(38:20):
with money. You know, you just have two different philosophies,
you have two different upbringings, you have different money trauma,
and those are things that you have to figure out
how to coexist peacefully.
Speaker 4 (38:31):
I couldn't have said it better myself. I think the
biggest thing that helped me after I graduated college move
forward from a financial perspective was having my accountabil buddy. Right,
Having someone that can walk with you in that journey
romantically that's great too, but just having a friend that
is around there to hold you accountable and say, hey,
wait a second, you said that you were not going
(38:52):
to rack up more credit card debt. I see you
want to go on that vacation. What are we doing here, buddy?
Speaker 1 (38:56):
You know.
Speaker 4 (38:57):
So just having that accountability and having a friend there
that's going to be in your corner, I think it
was great too.
Speaker 2 (39:01):
And I think people are like, you know, maybe it's
a scary thing, but on the other side of it
can actually you can bring you closer together. Like my
wife and I have had many many financial discussions about
our future, about where we're at in our careers, about
our goals, about what you want to buy a house,
and like being on the same page and working together
towards those goals has brought us so much closer together.
And if there are people in your life who are
(39:23):
good with money, are very financially on top of it,
or like they're progressing their career, like talk to them
about how they got there. Because through me talking with
my friend about where I'm at and like my fears
and my worries, like, they brought us closer together and
I learned so much too.
Speaker 1 (39:36):
And that is why I also brought in Jenise and
Austin because they are my friends as well, or I
like to consider them my friends, and they know way
more about this stuff than I do. So I and
listen Jenny's and Austin. I'm going to be seeing you
next month, so be prepared for me to ask you
more questions for asking for a friend, of course, asking
for a friend, it's a date.
Speaker 2 (39:54):
I'm curious, you know, we talked a little bit about
your financial journeys up top. I'm curious to hear about
kind of what resource is that we're out there that
really helped you that you enjoy sharing with people. Like
for me, it's I don't know if either of you
are on Reddit, but there is a subreddit called personal finance.
It has an incredible amount of resources. It's been huge
for me, and that's where I found out about your
money or your life, and also The Simple Path to Wealth,
(40:16):
which is another green book on investing. So are the
resources that both of you love that are out there
that you typically find yourself sharing with people.
Speaker 3 (40:24):
So I'm an audio file so I am a lover
podcast when it comes to learning, just because I'm a multitasker.
I have them on all the time. I'm always learning
on the go. So some of my favorite podcasts when
it comes to learning about personal finance are So Money
by Far, New Sharabi, Journey to Launch by Jimilisu Front,
and I am a big Wall Street Journal podcast fan.
(40:46):
So just like staying in touch with what's going on
in the money world, it makes you feel empowered, you know,
and knowledge is power. So find the creators, find the
folks who you feel inspired by, and just make it
a habit.
Speaker 4 (40:58):
One hundred percent, you know, think what could really be useful.
And it certainly helped me back in the day when
I was really listening to Dave Ramsey all the time
and just hearing the people call in and talk about
their own situations. There's a YouTuber, Caleb Hammer that does
these really cool sort of one on one interviews he
calls them the financial audits, So he'll have someone on
his show and he'll go through all of their checking, transactions,
(41:20):
their savings, if they have any credit card, debt, investments, everything,
And it's really cool, I think from a resource perspective,
to see how other people are handling their money, both
good and bad, as well as getting his professional opinion
on what to do about it. I think Copilot is
an awesome app for people who are looking to create
the budget. They do all the automations on the back
(41:41):
end somewhere how mits would have kind of plugs it
in like that, And if you're trying to think about
investing or how to approach that, The Little Book of
Common Sense Investing by John C. Bogel is a really
really good book. He founded Vanguard small company, who know
if you know anything about them, but it's a little
Book of common sense investing and it is a very
(42:04):
straightforward beginner's guide to just thinking about how to perceive
opportunity cost as it relates to investing, twit retirement.
Speaker 2 (42:12):
That's fantastic. Last thing is anything that we didn't cover
today that you guys wanted to mention to the listeners
before we hop.
Speaker 4 (42:17):
Off you are exactly where you need to be. Do
not overstress, Do not feel like you are having a
panica Tachnic Volley was alluding to earlier, you were doing
everything correct. Inflation sucks. We're all right there with you.
Figure out ways to have fun on a budget. That
might mean just going outside, have a bagel, walk around
(42:38):
your neighborhood. Don't think that Instagram is reality. And oh,
wealth happens when intentionality and discipline meet. So if you're
intentional with your money and you stay disciplined with that
sort of process, you will build wealth. It is inevitable
love that Austin beautifully put.
Speaker 2 (42:56):
So where can people find you if they want to
learn more about what you do and how they can
learn from your journeys.
Speaker 3 (43:01):
So you can find me at Jociero dinetto podcast wherever
you're listening to grown up stuff how to adult. And
you can find out more about my book at financially
litbook dot com.
Speaker 4 (43:12):
That was a really good plug. I don't have a book.
I do a podcast, though, Rich Habits Podcast. We're a
top ten business podcast on Spotify. Tens of thousands of
people tune in every Monday and Thursday to check us out,
so super grateful. There again, that's Rich Habits podcast, and
I'm on TikTok and Instagram at Austin Hankwitz and I
post short form videos about personal finance and investing. So
(43:34):
if you thought this budgeting stuff was nerdy, you're gonna
hate my content.
Speaker 2 (43:41):
Really dive deep.
Speaker 1 (43:42):
Thank you both Jenny's and Austin so much for being
with us today on the podcast. I have learned so
much from you and we might be asking you to
come back and share more insights with us than not
too distant future.
Speaker 4 (43:54):
Looking forward to it.
Speaker 2 (43:55):
Yeah, thank you both so much. This has been wonderful.
Speaker 4 (43:57):
Thanks everyone.
Speaker 3 (43:58):
Thank you.
Speaker 1 (44:03):
Denise and Austin together, you are both such a calming
presence on a topic that really deeply stresses me out.
I am forever grateful, along with a newfound sense of calm.
Here's what else I'm taking with me on my financial
journey from this conversation. Knowing your net worth is crucial
for financial awareness. Just knowing where you're starting is half
the battle. And don't be ashamed. Know that this is
(44:26):
just the beginning of taking control of your finances, trying
to accomplish all of your financial goals at once. Can
be overwhelming, so know where you're at and try to
focus on one goal at a time, and if you
have debt, focus on that first and foremost, Pay yourself first.
After you pay your rent and your mortgage and all
of the other essentials, put money into your savings and
(44:49):
use what's left over for the rest of your expenses.
You can often choose to have a portion of your
paycheck automatically go into a savings account. This can help
you achieve your financial goals. It money into a high
yield savings account or a money market fund. They offer
high interest rates and can be a good place to
park your emergency fund and help grow your money. Remember
(45:11):
that interest on it is free money. Don't leave it
on the table. Open communication about money is important, whether
it's with a partner or a friend. It can also
really bring you closer together. Consider taking on a financial
accountability buddy to help you stay on track with your budgeting.
And finally, knowledge is power. Knowing your options and what
(45:31):
information is available about personal finance is empowering, not scary.
Resources like podcasts and books can provide valuable insights and guidance.
Matt I saw a fire and a passion in you
when you talked about money in this episode. I feel
like I'm seeing another universe where maybe you did not
go into theater or sound engineering or podcasting, and you
(45:53):
listen to your parents and went to school for finance,
but you've never considered that route today or in the past.
Speaker 2 (45:59):
I mean, look, I don't want to look back in
my life and say I have regrets. We're in a
very cool place, we have a cool job, this is fun,
this is but I do want to continued learning and
growing in my financial life because the older I've gotten,
the more I've realized how important it is. Not that
you have to be super involved in it, but it's
(46:19):
so important to know how it works so you can
take care of yourself and your family.
Speaker 1 (46:23):
It's very important stuff. And honestly, it did give me
a little anxiety hearing about it. I won't lie to you,
but I'm feeling motivated in maybe like a shameful way,
but I think it's still motivation nonetheless to use some
of the tools that Cheni's and Austin talked about. But Matt,
what's next on GUS, which is what we like to
sometimes call the show for short, Sometimes it reminds me
(46:46):
of that plump little mouse and Cinderella and it makes
me smile. But what is our next episode?
Speaker 2 (46:50):
Reminds me of the Father from my Big Fat Greek
Wedding and oh that's right, Gus, which is one of
my favorite movies.
Speaker 3 (46:56):
Great film.
Speaker 2 (46:57):
Well next up on Gus, not wind X. But we
are going to be in the kitchen learning some basics
of cooking like an adult. We'll figure out what you
should always have in stock in the fridge, pantry and
spice rack. What are some of the basic go to
dishes and techniques that will set you up for success
at meal time?
Speaker 1 (47:12):
Matt, you may have money on lock, but I really
feel like I can bring something to the table. Pun
very much intended in this next episode.
Speaker 2 (47:22):
Stay hungry and join us again in two weeks on
our season two finale of Grown Up Stuff, How to
Adult And if you're enjoying the show, don't forget to
follow or subscribe wherever you are listening so you don't
miss an episode. We also want to hear from you,
so go ahead and leave us a rating or review
on your podcast player of choice.
Speaker 1 (47:39):
Or you can send us an email tell us what
kind of adulting stuff you're trying to figure out and
want us to cover on the show. You can send
us an email or voice note to grown Upstuffpod at
gmail dot com. You might hear us say ging you
on an upcoming episode. And remember you might not be
graded in life, but it never hurts to do your homework.
Speaker 2 (48:00):
This is a production from Ruby Studio from iHeartMedia. Our
executive producers are Molly.
Speaker 1 (48:05):
Sosia and Matt Stillo. This episode was engineered by Matt Stillo.
Speaker 2 (48:10):
And written by Molly Sosha.
Speaker 1 (48:12):
This episode was edited by Sierra
Speaker 2 (48:14):
Spree and special thanks to our teammates at Ruby Studio,
including Ethan Fixel, Rachel Swan Krasnoff and Bra Smith, Deborah
Garrett and Andy Kelly.
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