Second Cup: What does it cost to be you?

A smart way to think about your financial goals

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Episode Transcript

Speaker 1 (00:03):
Welcome to Before Breakfast, a production of iHeartRadio.

Speaker 2 (00:08):
Good Morning.

Speaker 1 (00:10):
This is Laura. Welcome to the Before Breakfast podcast. Today's
tip is to figure out what it costs to be you.
How much money is required to fund your life and
your family's life in the way you'd like to live it.
When you know this, you can make smarter choices about

(00:31):
your finances and know what you need to aim for if.

Speaker 2 (00:36):
There's a way you'd like to live in the future.
Today's tip comes from Bobby Rebel, a certified financial planner
and author of the book Launching Financial Grownups. Bobby was
a guest on my other podcast, Best of Both Worlds,
and she suggested people ask this question, what does it
cost to be you? In other words, what do you

(00:59):
spend to cross all purposes and categories to lead your life? Rent, childcare, vacations,
dog walking, gym membership, makeup, groceries, insurance premiums and everything else. Now,
I know on some level that this is just getting
at the old fashioned concept of a budget. People who

(01:23):
are wise with their money tend to know exactly what
is coming in and what is going out. But I
think this question what does it cost to be you?
Is a slightly better way to frame this matter because
it can be more aspirational as well. Let's say you
figured out what it costs to be you. You have

(01:45):
added up all your expenses and recurring payments and four
one K contributions and so forth. The good news is
that this amount is slightly less than what you and
any other adult household members bring in after taxes. Excellent. However,
you and these other adult household members would like to

(02:07):
start traveling internationally with your kids to see the world
before everyone moves out. Ideally, what it costs to be
you in the future will be higher because you're hoping
that you as an entity includes two international family trips
per year. So you price this out, add on whatever

(02:28):
the taxes would be to gross it up, and now
you have a different number. This is what it costs
to be ideal future you. To live the life you'd like,
you need to bring in this new number between the
two of you, so you can start looking for ways
to make that happen, or perhaps one of you would

(02:49):
like to take a year off of work. When you
know what it costs to be you as a family,
you can figure out if you can still have that
number without one person's income. Is the other person's income
sufficient maybe? If not, will savings cover it without compromising
all other goals? If so, amazing. If not, then the

(03:14):
family will either have to revise what it costs to
be them or figure out ways to replace that income
or save it up. Or maybe the party that wants
to take time off work can take a little less time,
but you won't be guessing about what is feasible. The
point is to make these decisions in a more rational way.

(03:36):
Money can be a source of a lot of angst.
But when you know what it costs to be you
and what it costs for your family to live in
the way you'd like, then you can make mature decisions
about how to bring in that amount of money. The
good news is that it may be possible to bring
in more money in various ways, but that is an

(03:56):
entirely different subject for a different episode. In any case,
just like knowing where your time goes, knowing where your
money goes is a tool that can help you design
the life you want. If you figure out what it
costs to be you, I'd love to hear your insights.
You can reach me at Laura at Laura vandercam dot com.

(04:21):
In the meantime, this is Laura. Thanks for listening, and
here's to making the most of our time. Thanks for
listening to Before Breakfast. If you've got questions, ideas, or feedback,

(04:42):
you can reach me at Laura at Laura vandercam dot com.
Before Breakfast is a production of iHeartMedia. For more podcasts
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