September 2, 2020 • 34 mins
We could share the best money tips out there with you every single episode, but it would never really matter if you haven’t identified proper money goals for your life. What good is it to know the best ways to earn more, spend less, and invest your money if you don’t even know why it is that you’re doing those things? And unfortunately if you haven’t identified your money goals and the ‘why’ behind your money, then it’s easy for money itself to become the end goal. Gaining more wealth can become the default metric that you think will make you happy, but in reality that happiness is fleeting. So this episode is all about discovering our passions, figuring out what we want to spend our money on, and thinking through how we want to spend our days. And then we talk through the SMARTER approach to goal setting to ensure that we are taking the steps to get us where we want to be.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel and I and Matt.
Today we're discussing designing smarter money goals. Angel the a
(00:26):
student podcast listener, may have noticed that smarter was written
in all caps on our outline or maybe in their
podcatcher where we have this episode. But a lot of
folks have seen smarter maybe within a business context, you know,
when it comes to different business metrics that their employer
is trying to reach. But I'm not sure a lot
of folks have thought about smarter goals when it comes
(00:47):
to their their personal finances, when it comes to our
own goals when it comes to our money, And that's
exactly what we're gonna talk about this episode, buddy. Yeah,
it's like a method that can help us, I think,
be more effective in our goal planning. And you know it,
sometimes in the in the work context, smarter goals or
smart goals have not been great, I think, and and
sometimes that's like a communication issue or a bureaucracy issue.
(01:10):
But I think in our own personal lives, when it's
like us in our goals, that it can be an
effective method for actually achieving greater things when it comes
to our money. So yeah, we'll talk about that on
this episode, Matt. Before we get to that, though, I
wanted to mention that I saw this interesting article and
consumer reports about dash cameras that you put in your car,
and you can get those for bucks something like that.
(01:32):
They're not really terribly expensive for a cheap one. Well, yeah,
twenty bucks. I'm not gonna spend twenty bucks get like
a FO dash game. I don't know if you're gonna
if you're gonna get him, man, go all in get
that primo dash cam. Why well, if you're actually gonna
go through getting one, I mean, what would be more
frustrating than actually not being able to see what it
is that you need to see? And you did spend
some money on the actual item. I'm not saying go
(01:52):
out and like spend all of your hard savings on,
you know, a FO one, but maybe not a twenty
dollar one. Yeah, I probably wouldn't go with it. Yeah,
I find on a sale it's a two dollar camera normally,
but no, it's twenty dollars. I would give you my
stamp of approval, my two thumbs upright, that was you. Well,
I'm not up for spending like massive amounts on something
that like a dash cam necessarily, but I think like
(02:13):
even a cheap dash cam can actually give you what
you're looking for in regards to like, you know what,
this article was saying that it's helpful for and actually
for insurance purposes. I guess yeah. And actually it's interesting
that insurers don't offer their customers free dash camps, because
I think it helps insurance companies most of all. But
in this article they referenced a guy who was driving
got pulled over for talking on the phone. He wasn't
(02:33):
talking on the phone, and his dash camera could prove
it because it takes video of outside the car and
then inside the car at the same time. So three
six action. Yeah, I bet you can't get that with
the twenty dollar dash came Maybe maybe that's the eighty
dollar one, but but yeah, like that's huge for him.
He just was able to go down to the courthouse
and say, hey, I've got video and I wasn't on
my phone, take a look, and they dropped all charges.
(02:56):
And so that's the kind of thing where like a
small amount of money could actually prevent um us having
to come out of pocket for a lot more money
later on down the road. Yeah, I would definitely install
one of those if my insure was providing one for free.
If you're driving all the time, like like your dad,
he's on the road a lot for work, I think
it could make a lot of sense for someone like him.
But man, like these days, seriously, I feel like I'm
(03:16):
biking just as often as I am driving, which actually
makes me think. Didn't you win a bike cam that
you're that you like stick on your bike or something
like that Streets Alive last year. So it's a bike
festival here in Atlanta. It's like a dash cam pour
my bike. Yeah, yeah, that way, if there's a motorist
that cuts you off or you know, God forbid hits
you something like that, you have proof that they did that.
(03:38):
But what's the deal. I haven't seen that on your bike,
and I remember you talking about it, but yeah, give
me an update on that. No, it was on my
rad Wagon and then I sold my rad Wagon waiting
on the next iteration. So yeah, yeah, I never saw
in action. Yeah, well, dang it, it's pretty slick. You
should have taken that off and like given it to
me or held on to it for your next bike.
I'm glad I won that one. Because that one was
like a four camera something that really you included it
on the bike? No, no, no no, no, I kept that. No,
(03:59):
I up the camera. Oh I thought you said you
had it on your Okay, I did took it off.
I'm gonna put it on the next iteration. But yeah,
if if you need convincing that a dash cam might
be appropriate for you, we'll post a link to a
YouTube video of the craziest like dash cam accidents in
our show. Notes Man, I think a lot of them
are like Eastern European videos, but there's some crazy stuff
(04:21):
that happens over there, and dash cams are documented like
a lot of weirdness, a lot of hitting runs, a
lot of crazy like natural disasters, cows flying through the
air in a tornado like whatever. This isn't Twister from
the nineties. Yea, all right, maybe I made that one up,
but there's a lot of crazy stuff in those videos. Well,
I think there would be just as much craziness going
on if we had those mandatory in the US. I
(04:41):
think they're actually mandatory in Russia because of all of
the fraud that goes on when it comes to insurance claims.
But but certainly, I mean That's the biggest reason for it,
I think would be if you were involved in an
accident and you had somebody that was trying to make
an insurance claim and they're falsifying it, right, well, that's
gonna come back and hurt you. If you're insured, has
to pay for that, and so it's great, you know,
(05:01):
in that case, would be amazing to have some actual
video footage to back it up, to back up your
side of the story. That would totally be an instance
where it would be worth it. Have you ever actually
been in an accident where there is a disagreement on
actually what happened between me and the motorists, but not
between like the police and what actually happened. Yeah, oh yeah,
I had literally had a dude, I was in the
far right lane. Guy, I was two lanes over on
(05:22):
the left, cuts across all lanes to try to take
a right and yeah, and and then he was like,
you ran into me. What are you talking about? So, yeah,
I didn't need a dash cam for that, but it
probably would have helped at least. Yeah, That's what I'm
talking about. Man. Uh So, I've never had an instance
like that myself, but yeah, if you happen to do
a lot of driving, certainly something to consider. It would
also be amazing too if insurers took that into account
(05:43):
and you know, to give you a discount on your insurance,
you know, because you had that proof. Yeah, like having
a security system at your home, you typically get a discount.
Having something like a dash cam on your car makes sense.
You should get a discount, absolutely, But you should buy
the ones. That's all I'm saying. Yeah, get get that
nice one on sale. All right, man, this episode, were
drinking in Alpha Abstraction Double I p A Volume thirteen
(06:04):
and this is my Wild Leap brew company out of Lagrange, Georgia.
We've had a couple of their beers before on the show.
I'm looking forward to enjoying this one with you, man,
and we will share our thoughts on this brew at
the end of the episode. Sounds good man, All right, Well,
let's get onto the topic at hand. We're talking about
designing smarter money goals, and Matt, there were just like
so many ways that we can evaluate ourselves for how
(06:24):
we're doing in life. Yeah, like how much you can
afford to spend with a nice dash cam? You Richie
rich Over there all of a sudden, Man, I'm just
in a weird mood. I don't know why I'm I'm
harping all about these dash caams. I'm gonna take your
credit cards away because you are in an interesting mood today.
I don't want you spending anything you regret. I have
wanted a go pro before, Like I've kind of gone
through these phases where picture having a go pro, like
(06:45):
especially on vacation, and just how fun that would be,
you know, like just take in the ocean, coming in
and out of the water with the kids. I don't know,
you'd be a better version of yourself with a go pro.
I just like cameras. You know, I'm a photographer. Maybe
that's the part of it that I'm drawn to. Like,
I got cameras here, you know, my house. I got
cameras on my phone. I when it camera in my car,
Well get them all, man, have cameras everywhere. But again,
(07:06):
we digress, We digress, all right, Let's get back to it.
So often we're measuring ourselves in so many different ways
in life, and and I think obviously money is just
one thing that we measure kind of how we're doing
by And it's certainly not like the most important measurement
of how we're doing. Typically, there are other categories that
we place more importance on, right, like wellness or you know,
our relationship status is and how how those are going,
(07:28):
and generally are like our overall happiness and well being,
that's what we're really concerned with. But money is something
that can be used intentionally to aid us in some
of these other important categories. But on the opposite side
of the spectrum, it can kind of turn into an
idol of sorts, right, I think, and have this opposite effect,
and it can lead us down kind of a path
that never satisfies because when is enough enough? Right? And
that's a thing that any of us who have tried
(07:48):
to get good with our money have had to combat
and had to think about as well. Matt I saw
this article and it talked about how actor and comedian
Martin Short actually came up with nine categories that he
evaluates every single years. Yeah, And I was like, man,
I was really impressed, because I think that looking at
all of those non categories could be really helpful to
kind of have an overall evaluation for for how I'm
(08:10):
doing as a person too. And the categories were self,
immediate family, original family, which meant his friends from growing up,
his current friends, money, career, which means like doing fulfilling work, creativity, discipline,
and lifestyle. And I mean I think like sometimes we
as humans tend to be kind of like ships where
our rudders turned just slightly, and then you know, just
(08:32):
a few years down the road, we could be Uh,
we could be a heck of a lot more off
course than we thought we would be. We can end
up in a place that we didn't intend to be.
So yeah, I think we can find ourselves in a
state of drift and it can have a massive impact
on our happiness. And the same thing with our money,
like we can we can find ourselves in a state
of drift over spending in certain areas, and it's time
to reevaluate. It's time then to to rethink our money goals,
(08:54):
designed some smarter ones that that we can actually stick
to and that we can consistently implement. Yeah. You know,
on the the topic of happiness, I think a lot
of people have heard of this twenty twin Princeton study
where they found that happiness how it doesn't necessarily increase
a lot once you earn more than seventy five dollars
a year. Well, guess what, there's this new study that
that seems to disagree and the points to the fact
(09:14):
that people with incomes over a hundred thousand are a
good deal happier than folks who make less. And it
also shows that the correlation between income and happiness has
steadily risen over the years. Maybe that's due to inflation,
who knows about. The methodology was different in these studies,
and obviously you know that plays a role. But the
reason I bring this up, though, is it is important
to see that money and having financial security it does
(09:37):
play a role in our happiness, even though it isn't
necessarily the end all be all right. I think the
real problem is when we confuse having lots of money
with the things or the experiences that the money can
afford us. Nobody sets out to hoard money, you know,
like we all laugh at the idea of becoming scroogement
ducks where swimming and skiing down all of our you know,
all of our gold. But that can easily become our
(09:59):
def vults when we don't identify and reevaluate our larger
money goals. Yeah, man, we actually got an email recently
from listeners Shay that actually, I think kind of spurred
on our idea for this episode, and she wrote, I
had never heard the term financial independence before listening to
how the money then and the current COVID situation has
made my husband and I realized it's okay to slow down, reevaluate,
(10:21):
and think about our true values. She says, hint, we'd
give away our cars before we gave away our six
little chickens. And she says, I came up with a
manter to reflect this newfound wisdom, and I've put it
on the bottom of my computer. I'm looking at it
right now and on my two credit cards. I just
wanted to share it, and I think your listeners might
benefit from coming up with our own mantra and placing
it around their house, on their credit cards or even
(10:42):
on their computer every time I try to shop online
or might be wasting time instead of working on my
side gigs. I asked myself this question. Does this support
my journey to financial independence in a simple, liberated life?
She says, it does. Wonders seeing that before she goes
shopping online or before she makes a big purchase, and
I love that idea. Of as we're making these goals,
(11:02):
putting those goals front and center, sending them in front
of us, like on the things that we see the most,
whether it's your mirror as you're getting ready in the
morning or on your computer, to remind you of what
is indeed valuable and meaningful, because like, once you've got
that goal and you've got that kind of simple mission statement,
it can really guide you in in the follow through. Yeah, exactly, man,
I love that she totally has the right mindset here
(11:22):
for her. It's it's not about amassing huge sums of wealth.
It's about continually realizing what is actually important. You know,
in her case, that's a simple and liberated life with
some chickens. Maybe even she'll get a goat someday, or
maybe not because that's too complicated. Whatever she wants to do,
it's up to her. But you know, taking these small
steps to remind her of that helps to enforce behavior
that will help her to continue in that direction. Basically
(11:45):
sort of like you're saying earlier, Joel, SHA's rudder, it
seems to be working perfectly. You know, it's pointing her
in the right direction that she knows that she wants
to go. So that's what this episode is gonna be
all about. We're gonna talk about re evaluating our current
money goals so that we can pursue more of what
actually and really matters in our lives. So we'll get
into the specifics of what that means for you right
(12:05):
after the break. All right, we're back from a break
and we're talking about designing smarter money goals. We're gonna
get to kind of the smarter system and how to
come up with your own money goals because they're different
for all of us. Right, we just talked about listeners.
(12:26):
SA one of the most important things in her life
was her six little chickens, and that's so cool. So
it's probably not like the specific chickens, although maybe I'm
sure she loves them dearly, but it's probably if you
dig a little bit deeper, it's what the chickens represent
in her life, right, which is maybe self sustainability, the
pace of her life, you know, maybe her connection with
the earth. I think a lot of times, Uh, these
different things in our lives represent something deeper than what
(12:48):
you can actually just you know, see with your eye, Yeah,
for sure, And we're about to get to kind of
maybe a system that can help. But before we get
to that, matt Um, it's so tough to reevaluate goals
that you haven't even really gun to create, right to
design smarter goals if you don't have money goals in
the first place. And so like, the first step that
I think you and I would would recommend for folks
is to spend some time in introspection. So much of
(13:11):
creating money goals comes with knowing yourself better. And say
obviously knows herself, she knows what's most important to her.
She'd give away certain high price items before she gave
away her access to taking care of awesome little chickens
in her backyard. It's pretty hard to create proper goals
without really knowing yourself. And you think it might even
be easier to do this given some of the social
(13:32):
distancing constraints that have been placed on many of our lives.
But we're pretty inventive when it comes to ways to
distract ourselves from doing the things that truly matter. So
while most of us have a little more time, a
little more space to actually do some of this introspection
to figure out what do we want our lives to
truly look like many of us have avoided it, and
COVID feels like the perfect excuse to avoid it, even
though it is actually the perfect excuse to pursue some
(13:54):
of those things. It's the perfect time to slow down
and actually look inside yourself a little bit. But instead
we've we turned to flicks. Yeah, and also we like,
we don't just turn to entertainment, but we looked at
to other people. You know, so many of us are
are used to making decisions based on what we see
our neighbors, what our friends or coworkers doing and whatever
it is up they're buying, or maybe like we're even
following the lead of whatever media companies are feeding to us.
(14:15):
You know, we're showing a constant stream of goods based
on digital marketing algorithms. Uh. And unfortunately we haven't taken
enough time to figure out if this is actually adding
to our happiness in our our own satisfaction. We went
pretty in depth on this on an episode way back
in the day called The Why Behind Our Money? This
is episode twelve, and figuring out your own personal you
(14:36):
know why behind your money is so crucial to helping
you accomplish those goals. Yeah, it's so much harder to
stick with a goal if there's not like a really
good solid why that you've thought through behind what you're doing.
And Matt, it just makes me think of like in
in school when we would get busy work from a
teacher and I didn't care about those assignments, and I
know most of the kids around me knew that it
was just busy work. Also, busy works the worst, yeah,
(14:58):
and and like you have to get this done, but
you don't care at all, You don't put much effort
into it. And I think that's the way it works
sometimes when we set goals but we don't have a
good why behind it, there's just less of an attachment
and less of an interest in pursuing it. Well, the
busy work wasn't necessarily helping you get where you needed
to go. It was just to keep you occupied. And
I think it's the same thing with with some of
our goals. If we don't have a strong and healthy
(15:20):
attachment to those goals that are pushing us in a
direction that we definitely want to go, that it's easy
to fall off the wagon for sure. Yeah, you know,
on the flip side, the best teachers gave assignments and
they're able to explain well the why behind the assignment,
and knowing that why can make all the difference in
terms of motivation. In a similar way, it right, not
many of us aspire to have, uh, you know, Warren
(15:41):
buffet like wealth, and if we're honest about the real
priorities in our lives, it would actually mean shaking things up,
maybe living our lives a little differently. Uh and you know,
spending our money in incredibly different ways. In order to
figure out your why in your goals, it's vital to
not be inhibited by what you see around you, you know,
but by what you're being fed by media or by
what your friends are doing. Instead, we want you to
(16:03):
think big about what your life could look like and
realize that you can make meaningful changes by consistently taking action. Now, yeah, Matt,
When I initially kind of went through the why behind
money exercise in my own life, I found it to
be so helpful. It clarified a lot of things for me,
and it changed some of the things that I was
actually pursuing. So let's get specific here, Matt. When I
was young, first starting out in my career, you consistently
(16:24):
took some action I well, honestly, the the introspection, the
thinking about the why behind my money had a massive influence.
There were things that I thought were out of reach
for me. But when I did do this exercise and
I took the time to see that, you know what,
my money wasn't necessarily aligning with my actions in every way.
And if I did do a little more of that,
then I could pursue some of those things that I
(16:45):
thought I couldn't afford, like traveling to really cool places.
I had to make some sacrifices to be able to
go on a cool trip to a place like Shanghai
or Norway. Those didn't come easily right. Um, But at
the same time, you're living in a sub hundred thousand
dollar home with a roommate to help pay most of
the bills. Was totally worth it. Yeah, man, you do
some house acking, you can definitely do some international travel. Yeah.
And I think it would have been easy to see
(17:07):
what my friends around me were doing and try to
imitate that, like living in a fancy apartment complex with
all the great amenities, but without that like intentional look inward,
writing these things down, doing some real soul searching, I
would have found myself missing out on some of those
great opportunities, and I probably would have spent my money
in a way that that really didn't resonate with what
I actually wanted to achieve. Yeah, and for you, Joel,
(17:28):
it sounds like you were able to be a little
more intentional about that time, right. You're able to think
through what it was that was making you happy. Like,
I don't necessarily remember a specific time where I sat down,
but I did know that this is what I wanted
my life to look like, right, Like, there weren't specific
things that I knew I wanted to except that I
did know I didn't want to necessarily have to go
into a like a traditional nine to five job, and
I was tempted to, right because health insurance is expensive,
(17:49):
and especially to when when you're looking at growing a family,
it's it's certainly something you consider. You get a corporate gig,
you get a normal quote unquote normal job, and you
got your benefits covered, you got health insurance. But I
knew I really didn't want that. That just wasn't It's
just not a part of I guess who I am.
I didn't want that. Kate didn't want that for us
as well. We just love the flexibility that we had
from working for ourselves. But the problem there was that
(18:11):
our income was inconsistent, and so for us, one of
the big steps we took in order to maintain that
work flexibility and kind of control over our time was
that we saved up a lot of money and we
invested that money in real estate. By by having long
term renalms man, that allowed us to kind of diversify
our streams of income so that even though we were
self employed, those ups and downs, you know, throughout the years,
(18:32):
that wouldn't have an impact as much on us. And
so in our case, it was something that we identified
and it wasn't like a specific thing like like you know,
with you as traveling, you're like, I want to be
able to travel every single year, going these awesome trips.
For us, it was kind of like the opposite. I
was just like, I just want to be able to
stay home and not go outside. Uh, and before us
to commute to work. So obviously everyone's motivation is going
to be different, and even arriving to that motivation can
(18:54):
look different for different folks as well. You know, so
if you haven't done that before, right, if you haven't
taken the time to figure out know what the y
is behind your money. Seriously, there's no better time than now,
and so for real, like right now, grab a pin
and a piece of paper, switch your phone to airplane mode,
and just take fifteen minutes to think through what you
want your life to look like. If you are in
your twenties, think through what it is that you want
(19:15):
to spend your time on when you're thirty. Maybe if
you're in your thirties, like, think about what you want
to be spending your money on by the time you're
forty years old. Think through what you want your typical
mornings to look like, what you want your vacations to
look like. We want to encourage you to think through
what your ideal life would look like, so you know,
right now you can go ahead and hit pause on
this episode. We're serious. We're also going to take a
break ourselves, but when we come back, we'll outline how
(19:37):
to make sure you're actually achieving goals to get you
to that ideal life, and we'll get to that right
after this break. All right, we're back from the break
and hopefully back from your break thinking about your fifteen
(19:57):
minutes of introspection exactly, which is I'll really take right now.
And sometimes you know you might need to meet with
your partner or significant other or a good friend to
bounce some of these things off of You're typically not
gonna get it done in fifteen minutes solo, but maybe
maybe you did, and at least I think you can
get somewhere. And hopefully you realize too that the things
(20:17):
that you wrote down, the things that are the most important,
many of them don't cost that much money. Some of
them might be closer to getting a used chicken coop
on Facebook, getting those six chickens and starting your own
little urban farm. It doesn't really cost that much money
in order to make that happen. But Matt, let's keep
going on from there. Having a Y is like this
essential motivation that can influence the goals that you end
up coming up with. It will influence how much you're saving,
(20:38):
how much you're investing, all that kind of stuff. But
you can't just stop at the motivations. It's time to
get practical, and I think that's where the smart or
smarter approach can be really helpful. And I mentioned at
the beginning of the episode that the smart goal system.
We've had it actually in my workplace for a lot
of years, and I've actually seen it fail in a
lot of ways. In the corporate context, the follow through
is not often good. The intentionality when it comes to
(21:01):
coming up with these goals and all that great, and
I think that's where the disconnect is. But I do
think that on an individual level, or a familiar level,
this system can actually work to help us create goals
that we can follow through with and that are meaningful
enough that that it's worth pursuing. Yeah, and the goal,
you know, for taking this smarter approach is to essentially
link this big y you know, like hopefully you've identified
(21:24):
it already, but if not, over time you'll kind of
develop what it is that drives you your motivation, like
Joel said, But we have to find a way to
link those bigger goals to our daily actions, to the
things that we we do every day. On the RAG,
we're trying to bridge that gap between the theoretical the
things that we think will make us happy in our minds,
to the practical the things that we do every single day.
(21:46):
So let's go ahead and talk through this man so smarter.
It's an acronym right, each letter of smarter stays for something,
and that's what we're gonna talk through. Now, we're gonna
talk through how these different terms apply to us and
our money. And we're gonna start with S. Let's go
on H. S is for specific while identifying your why.
You know, we talked how that can be great motivation.
(22:07):
It can be pretty vague when it comes to money goals,
you know. So for example, if you know that you
want to save a lot more money, well, getting specific
and then saying that I'm going to save up for
a down payment on my first house, that's gonna be
a lot more successful because you're being specific. You're telling
it to a very clear and identifiable goal. Uh. If
we just set out to save more money, well you
(22:28):
can't really put your finger on that, but you can
put your money on a specific dollar amount, yeah, or
even just I'm going to save up a down payment
for a home, and yet there's nothing else going on there.
I think that specific number creates something tangible. It creates
a real goal worth achieving, as opposed to yeah, I'm
gonna funel more towards saving up for the down payment,
but not getting specific with it. And the next letter
is M, which stands for measurable and it's it's pretty
(22:49):
closely related to specific, but oftentimes when it comes to
our personal finances, there are two factors that we need
to make sure are measurable, uh, the time and the
dollar amount. So let's tell about the downpayment again, Matt,
fifty dollars. That's a great specific goal, but the measurable
part of that goal is what's the time period I'm
gonna be able to achieve that in. If it's saving
up fifty dollars in the savings account in the next
(23:12):
four years, then it's measurable, like, did I hit my goal?
Did I get it in the timeframe that I was
aiming for? And that's where the M and the S
kind of work together really well. It's a specific number
in a measurable time frame, which really helps you zero
in on that goal that you're aiming for. Yeah, man,
that data needs to be quantifiable. Uh. So the next
letter is A. UH. Within the Smarter acronym, A is
(23:35):
for attainable, right. Uh. We don't want you to necessarily
shoot for the moon like we want you to stretch yourself,
but make sure that you're being realistic about what you
can achieve, as well as the time frame which you
can do it in, so that you don't immediately give
up on the goal. You know, a good place to
start is by looking at what you've been able to
accomplish in the past and then go from there. So,
for example, you can look at how much you previously
(23:57):
saved every single month, and then you can channel yourself
to maybe save a little bit more. You're basing that
number on something that you know is certainly doable because
you have done it before. You're not just shooting from
the hip saying that like I'm gonna say three thousand
dollars every single month. You know, like that's not going
to be very attainable. There's a similar advice to to
what we say when we're when we're talking about budgeting, right,
and we talk about starting like before you budget, start
(24:19):
with tracking your money, because if you're able to set
a budget based on what you have set previously, you
are going to be more likely to be successful. Yeah,
it makes me think about our podcast goals and aiming for,
like Joe Rogan download numbers. That's unattainable, man, that's just ridiculous.
Don't even include that you want something that that is
actually within your reach. With this within your grasp, So
don't overshoot, because that's a recipe for ditching your goals
(24:41):
altogether when they become depression or depression. Yeah, it's so
easy to ditch goals because they're unreachable. So it definitely
has to be something that you can attain, all right.
The r and the Smarter goal system is for relevant.
Do you ever go back to it to do list
and add items that you've already completed? Guilty yet just
so and cross it off and you're like, oh, yeah,
I got it, feel a little sense of accomplishment. Yeah,
(25:04):
and it does add that, right, But this point is
for people like that, people like you, Matt, and make
sure that your immediate financial goals are moving you towards
the true bigger goal of the why behind money. This
goal has to be relevant to what you're actually pursuing.
So we just gave the example of a down payment
on a home. Maybe you don't care about homeownership, and
in fact, you don't need to care about homeownership. We've
(25:24):
talked about that on the show before. It's not best
for everybody, although it works great for some people. And
so this goal not only needs to be specific, measurable,
and attainable, it needs to be relevant to the things
that you're actually trying to pursue, what you want to
become your reality essentially of what the good life looks
like in the coming years. Yeah, and when it comes
to some of the smaller goals that you might be
crossing off your list, that's where in my mind that
(25:46):
you need to make sure that you're moving towards that
larger goal. Right. I understand the need for a psychological
win here and there, but it's really important to make
sure that the small money wins align with that larger
money goal. Um. And that's actually where our next point
kind of plays into that stands for timely. This is
where we're acknowledging that smaller goals that you can reach
on a shorter timeline, how they are just really crucial
(26:07):
for success, you know, just the the bigger goal, the
longer it's going to take you to actually achieve that goal.
So we know that it's important to aim for bite
size goals that will create momentum and keep you on track.
And so we keep bringing up, you know, this down
payment example, because a lot of folks have a goal
of owning a home. Some don't, some do, But in
full years that might seem really overwhelming, and it might
(26:29):
be easy for someone to kind of get off track
of that saving his goal, Like how do you actually
go about saving that much money up in four years?
You know? But if you break it down, what you're
looking at is setting aside, you know, a little more
than a thousand bucks every single month. It's very clearly defined.
It's it's set at smaller intervals of time, and it
will be a lot more difficult for you to get
off track saving up that fifty grand for that down payment,
(26:51):
you know, by breaking it up into into monthly bites.
Until I know, even when it comes to our budgeting,
if I don't check and update our budget like a
couple at least a couple of times a month, I
know what that means is that at the end of
the month, we're eating literally like beans and rice and leftovers,
because we'll blow through our grocery budget. We'll blow through
our entertainment budget. So we're not going to be eating
nice cuts of meat, We're not going to be going
out to eat, going out on a nice fancied date.
(27:13):
The last week, maybe even the last two weeks of
the month if I haven't done a good job of
staying on top of that budget. And so I'm not
necessarily going to advocate for, you know, moving to a
weekly budget, but I do know that's important for us
to kind of set these small little milestones throughout the
month where we were able to update our budget numbers. Yeah,
I mean Rome wasn't built in a day. Uh what
do they say if you want to eat something like
(27:35):
like a huge animal, it's one bite at a time,
Like that's the way you do it, Like an elephant,
I believe. Yeah, yeah, an elephant like you, You're not
gonna eat it in one sitting, like super quickly. Why
would people want to eat an elephant? Anyway? They're gentle creatures,
are very sweet. But like that is the kind of
thing that we're getting at here. Is is the timely
portion of it. You only accomplish these things over a
(27:56):
period of time going in the same direction. It's like
that rut or turning just slightly to get you on
that path to saving a little bit more every month
to help you reach this goal. But fifty bucks in
four years seems ridiculous. It seems absurd. Until you break
it down into those bite sized chunks and then you
can actually accomplish it. That's the important part of what
team brings to the table. It actually makes me think
(28:16):
of you remember the episode when I was talking about
World Cup tickets because they announced how that how North
America was going to host World Cup and six I
think six years from now, hopefully we can watch in
person soccer matches them by then. I'm sure we will,
but uh, but yeah, I mean I based the numbers
on what the tickets in Russia we're going for, and like,
it's ridiculous. I mean, it's thousands of dollars, and if
(28:38):
we were to take our whole family, it would be
a lot of stinking money. And in my mind is like, okay,
there's no way we would ever go to that. But
based on some calculations, I figured that if I just
set aside thirty bucks a month, we would be able
to attend the World Cup no problem, all six of
our family members, which is crazy. Yeah, to think that
we would take that many people. It's like that planning ahead, right,
And yeah, it just takes planning ahead and just and
(28:59):
bring can get it up into into the small bytes.
But now it doesn't feel insurmountable, right, not at all,
whereas it did. You know when you initially got the
sticker shock of this is how much it would take
to go to one World Cup match. It's like, that's crazy,
that's not gonna happen. But breaking it down makes it
possible totally. Alright, let's get down to the e R.
So smart goals are kind of the way it's typically
talked about, but you can add this e R onto
the end smarter and and and that's what we're doing.
(29:22):
And I think that helps even more because our goals
need to be continually evaluated and reevaluated. That's the e ER.
I know, some of the goals that I said back
in the day just aren't relevant to my life anymore.
For instance, travel, I'm really glad I've gotten to see
a lot of the places that I've been, but international
travel as a family just isn't as important to me.
And so our goals have changed in a lot of ways.
(29:44):
So it's important to evaluate and then re evaluate those
goals along the way. Your goals are going to look
different as you grow and as you change. I would say,
just like Martin Short, who we mentioned at the beginning
of the episode, he evaluates himself on an annual basis
according to those kind of nine markers of how he's
doing it and what his life looks like and and
if that's what he wants it to look like. So
maybe revisiting your goals on an annual basis can give
(30:05):
you that ability to see whether they're still meaningful or
whether you want to pivot and go in another direction.
Are you still trying to go to Mexico for an
all inclusive vacation with your with your partner, that to
Loom to to Loom, that's like the hotspot or it
was like last year, a couple of years ago, I'd
go to Koom, I'd hit that up. Yeah. But but
maybe now you're expecting a baby and you're like, no,
(30:26):
that's not our goal anymore. No, now we're saving up
money to do some home renovations to make it feel
like a better space to bring our baby home to.
It's important to be intentional, and I think using a
system kind of like the Smarter Goal system can be helpful.
But it's also only really helpful if we continue to
look at those goals that we've set and make some
changes when they just don't fit into our plan like
(30:47):
they used to. Yeah, so there we go, Joel, that's
the smarter system when it comes to our personal finances
and goal setting. But man, you know what, we're not
always going to get it right, and so we feel
it's important to note that, like, we have to be
able to give ourselves a break, you know, when we fail.
We're not gonna always get it right the first time.
But at the same time, don't be afraid to immediately
hit reset and set another goal straight away. There might
(31:09):
be an unexpected bill and that could derail your savings
for the month, but that's okay. You don't have to
throw in the towel altogether. You know. You just were
talking about evaluating and re evaluating. Continue to do that regularly, uh,
and and just stay committed to the larger money goals
that you have by revisiting the different things that are
going to be important to you. Yeah. Mat At the
beginning of the episode, you kind of talked about a
(31:30):
couple of different studies that talked about the impact of
money on our happiness and there's not a direct correlation
after a certain point in time. The idea of just
building massive amounts of wealth in order to hoard it
for ourselves. That doesn't appeal to many of us. It
doesn't appeal to you and I, right, But it is
important though, to identify what it is that truly will
(31:50):
make us happy. Right And in many instances, saving well,
investing well, being more thoughtful with our money does make
a difference, does make a drastic difference in helping us
to be able to achieve of things that actually do matter,
many of which aren't even terribly money dependent, but so
much if it starts with knowing ourselves and then implementing
something like the Smarter Goal system. You can obviously choose
to go a different route when it comes to implementation,
(32:12):
but I hope that thinking through how we assess and
then implement money goals for ourselves and how that kind
of fits into the broader context of our lives was
helpful for everyone today. Yeah, and Joel on a related note,
away that you and I that we are able to
implement uh a goal, albeit a pretty small goal, into
our lives, and even on the show is craft Beer.
(32:33):
You know, this is sort of like Shay. This isn't
a major thing, it doesn't cost a ton of money
like her chickens. Right. Craft beer doesn't cost a ton
of money, but it's something that we are able to
enjoy and it moves the needle a lot for us. Uh.
And so every episode we have a craft beer man.
This episode we enjoyed an Alpha Abstraction, volume number thirteen
by wild Leap. What were your thoughts on this brew? Yeah,
(32:54):
this is another I p A in a long list
of I p A s by Wild Leap, who's just
around the corner from Atlanta, and this one packed massive
melon flavors in the hops. It was super sweet, Like
a lot of their I p s are actually just
incredibly sweet and sometimes a little too sweet for my
my palette. I don't love it when an I p
A is this sweet, But I like what they're up to.
I like the direction they're going in. Even though this
(33:16):
isn't like top ten for me, it's still a really,
really solid I p A from a great brewery just
around the corner. Yeah, I'm with you man as far
as the melon flavors, but I feel like, in my opinion,
it balances really well with the bitterness that accompanies those hops.
You know, It's like they included the cantelope, but they
also included like some of the skin as well, and
you have to also eat that, right, But in my opinion,
(33:37):
it's a nice balance. It's a really juicy beer, and
we'd recommend for you to swing by that brewery if
you're heading down the interstate here in Georgia. Maybe you
might even see Joe and I there. We have yet
to hit them up, but we will one of these days.
It's gotta make it happen for sure. All right, that's
gonna be it for this episode. Our listeners can find
our show notes up on the website at How's money
dot com. Yeah, and just a quick reminder, put your
(33:59):
money where your goals are and then put those goals
in plain sight, put them on your computer. Whatever it
takes in order to remind you consistently of the things
that actually matter and the things that you're trying to pursue,
and maybe it helps you avoid spending money in an
errant way. So all right, Matt, that's gonna be it
until next time. Best Friends Out, Best Friends Out.
Welcome to How the Money. I'm Joel and I and Matt.
Today we're discussing designing smarter money goals. Angel the a
(00:26):
student podcast listener, may have noticed that smarter was written
in all caps on our outline or maybe in their
podcatcher where we have this episode. But a lot of
folks have seen smarter maybe within a business context, you know,
when it comes to different business metrics that their employer
is trying to reach. But I'm not sure a lot
of folks have thought about smarter goals when it comes
(00:47):
to their their personal finances, when it comes to our
own goals when it comes to our money, And that's
exactly what we're gonna talk about this episode, buddy. Yeah,
it's like a method that can help us, I think,
be more effective in our goal planning. And you know it,
sometimes in the in the work context, smarter goals or
smart goals have not been great, I think, and and
sometimes that's like a communication issue or a bureaucracy issue.
(01:10):
But I think in our own personal lives, when it's
like us in our goals, that it can be an
effective method for actually achieving greater things when it comes
to our money. So yeah, we'll talk about that on
this episode, Matt. Before we get to that, though, I
wanted to mention that I saw this interesting article and
consumer reports about dash cameras that you put in your car,
and you can get those for bucks something like that.
(01:32):
They're not really terribly expensive for a cheap one. Well, yeah,
twenty bucks. I'm not gonna spend twenty bucks get like
a FO dash game. I don't know if you're gonna
if you're gonna get him, man, go all in get
that primo dash cam. Why well, if you're actually gonna
go through getting one, I mean, what would be more
frustrating than actually not being able to see what it
is that you need to see? And you did spend
some money on the actual item. I'm not saying go
(01:52):
out and like spend all of your hard savings on,
you know, a FO one, but maybe not a twenty
dollar one. Yeah, I probably wouldn't go with it. Yeah,
I find on a sale it's a two dollar camera normally,
but no, it's twenty dollars. I would give you my
stamp of approval, my two thumbs upright, that was you. Well,
I'm not up for spending like massive amounts on something
that like a dash cam necessarily, but I think like
(02:13):
even a cheap dash cam can actually give you what
you're looking for in regards to like, you know what,
this article was saying that it's helpful for and actually
for insurance purposes. I guess yeah. And actually it's interesting
that insurers don't offer their customers free dash camps, because
I think it helps insurance companies most of all. But
in this article they referenced a guy who was driving
got pulled over for talking on the phone. He wasn't
(02:33):
talking on the phone, and his dash camera could prove
it because it takes video of outside the car and
then inside the car at the same time. So three
six action. Yeah, I bet you can't get that with
the twenty dollar dash came Maybe maybe that's the eighty
dollar one, but but yeah, like that's huge for him.
He just was able to go down to the courthouse
and say, hey, I've got video and I wasn't on
my phone, take a look, and they dropped all charges.
(02:56):
And so that's the kind of thing where like a
small amount of money could actually prevent um us having
to come out of pocket for a lot more money
later on down the road. Yeah, I would definitely install
one of those if my insure was providing one for free.
If you're driving all the time, like like your dad,
he's on the road a lot for work, I think
it could make a lot of sense for someone like him.
But man, like these days, seriously, I feel like I'm
(03:16):
biking just as often as I am driving, which actually
makes me think. Didn't you win a bike cam that
you're that you like stick on your bike or something
like that Streets Alive last year. So it's a bike
festival here in Atlanta. It's like a dash cam pour
my bike. Yeah, yeah, that way, if there's a motorist
that cuts you off or you know, God forbid hits
you something like that, you have proof that they did that.
(03:38):
But what's the deal. I haven't seen that on your bike,
and I remember you talking about it, but yeah, give
me an update on that. No, it was on my
rad Wagon and then I sold my rad Wagon waiting
on the next iteration. So yeah, yeah, I never saw
in action. Yeah, well, dang it, it's pretty slick. You
should have taken that off and like given it to
me or held on to it for your next bike.
I'm glad I won that one. Because that one was
like a four camera something that really you included it
on the bike? No, no, no no, no, I kept that. No,
(03:59):
I up the camera. Oh I thought you said you
had it on your Okay, I did took it off.
I'm gonna put it on the next iteration. But yeah,
if if you need convincing that a dash cam might
be appropriate for you, we'll post a link to a
YouTube video of the craziest like dash cam accidents in
our show. Notes Man, I think a lot of them
are like Eastern European videos, but there's some crazy stuff
(04:21):
that happens over there, and dash cams are documented like
a lot of weirdness, a lot of hitting runs, a
lot of crazy like natural disasters, cows flying through the
air in a tornado like whatever. This isn't Twister from
the nineties. Yea, all right, maybe I made that one up,
but there's a lot of crazy stuff in those videos. Well,
I think there would be just as much craziness going
on if we had those mandatory in the US. I
(04:41):
think they're actually mandatory in Russia because of all of
the fraud that goes on when it comes to insurance claims.
But but certainly, I mean That's the biggest reason for it,
I think would be if you were involved in an
accident and you had somebody that was trying to make
an insurance claim and they're falsifying it, right, well, that's
gonna come back and hurt you. If you're insured, has
to pay for that, and so it's great, you know,
(05:01):
in that case, would be amazing to have some actual
video footage to back it up, to back up your
side of the story. That would totally be an instance
where it would be worth it. Have you ever actually
been in an accident where there is a disagreement on
actually what happened between me and the motorists, but not
between like the police and what actually happened. Yeah, oh yeah,
I had literally had a dude, I was in the
far right lane. Guy, I was two lanes over on
(05:22):
the left, cuts across all lanes to try to take
a right and yeah, and and then he was like,
you ran into me. What are you talking about? So, yeah,
I didn't need a dash cam for that, but it
probably would have helped at least. Yeah, That's what I'm
talking about. Man. Uh So, I've never had an instance
like that myself, but yeah, if you happen to do
a lot of driving, certainly something to consider. It would
also be amazing too if insurers took that into account
(05:43):
and you know, to give you a discount on your insurance,
you know, because you had that proof. Yeah, like having
a security system at your home, you typically get a discount.
Having something like a dash cam on your car makes sense.
You should get a discount, absolutely, But you should buy
the ones. That's all I'm saying. Yeah, get get that
nice one on sale. All right, man, this episode, were
drinking in Alpha Abstraction Double I p A Volume thirteen
(06:04):
and this is my Wild Leap brew company out of Lagrange, Georgia.
We've had a couple of their beers before on the show.
I'm looking forward to enjoying this one with you, man,
and we will share our thoughts on this brew at
the end of the episode. Sounds good man, All right, Well,
let's get onto the topic at hand. We're talking about
designing smarter money goals, and Matt, there were just like
so many ways that we can evaluate ourselves for how
(06:24):
we're doing in life. Yeah, like how much you can
afford to spend with a nice dash cam? You Richie
rich Over there all of a sudden, Man, I'm just
in a weird mood. I don't know why I'm I'm
harping all about these dash caams. I'm gonna take your
credit cards away because you are in an interesting mood today.
I don't want you spending anything you regret. I have
wanted a go pro before, Like I've kind of gone
through these phases where picture having a go pro, like
(06:45):
especially on vacation, and just how fun that would be,
you know, like just take in the ocean, coming in
and out of the water with the kids. I don't know,
you'd be a better version of yourself with a go pro.
I just like cameras. You know, I'm a photographer. Maybe
that's the part of it that I'm drawn to. Like,
I got cameras here, you know, my house. I got
cameras on my phone. I when it camera in my car,
Well get them all, man, have cameras everywhere. But again,
(07:06):
we digress, We digress, all right, Let's get back to it.
So often we're measuring ourselves in so many different ways
in life, and and I think obviously money is just
one thing that we measure kind of how we're doing
by And it's certainly not like the most important measurement
of how we're doing. Typically, there are other categories that
we place more importance on, right, like wellness or you know,
our relationship status is and how how those are going,
(07:28):
and generally are like our overall happiness and well being,
that's what we're really concerned with. But money is something
that can be used intentionally to aid us in some
of these other important categories. But on the opposite side
of the spectrum, it can kind of turn into an
idol of sorts, right, I think, and have this opposite effect,
and it can lead us down kind of a path
that never satisfies because when is enough enough? Right? And
that's a thing that any of us who have tried
(07:48):
to get good with our money have had to combat
and had to think about as well. Matt I saw
this article and it talked about how actor and comedian
Martin Short actually came up with nine categories that he
evaluates every single years. Yeah, And I was like, man,
I was really impressed, because I think that looking at
all of those non categories could be really helpful to
kind of have an overall evaluation for for how I'm
(08:10):
doing as a person too. And the categories were self,
immediate family, original family, which meant his friends from growing up,
his current friends, money, career, which means like doing fulfilling work, creativity, discipline,
and lifestyle. And I mean I think like sometimes we
as humans tend to be kind of like ships where
our rudders turned just slightly, and then you know, just
(08:32):
a few years down the road, we could be Uh,
we could be a heck of a lot more off
course than we thought we would be. We can end
up in a place that we didn't intend to be.
So yeah, I think we can find ourselves in a
state of drift and it can have a massive impact
on our happiness. And the same thing with our money,
like we can we can find ourselves in a state
of drift over spending in certain areas, and it's time
to reevaluate. It's time then to to rethink our money goals,
(08:54):
designed some smarter ones that that we can actually stick
to and that we can consistently implement. Yeah. You know,
on the the topic of happiness, I think a lot
of people have heard of this twenty twin Princeton study
where they found that happiness how it doesn't necessarily increase
a lot once you earn more than seventy five dollars
a year. Well, guess what, there's this new study that
that seems to disagree and the points to the fact
(09:14):
that people with incomes over a hundred thousand are a
good deal happier than folks who make less. And it
also shows that the correlation between income and happiness has
steadily risen over the years. Maybe that's due to inflation,
who knows about. The methodology was different in these studies,
and obviously you know that plays a role. But the
reason I bring this up, though, is it is important
to see that money and having financial security it does
(09:37):
play a role in our happiness, even though it isn't
necessarily the end all be all right. I think the
real problem is when we confuse having lots of money
with the things or the experiences that the money can
afford us. Nobody sets out to hoard money, you know,
like we all laugh at the idea of becoming scroogement
ducks where swimming and skiing down all of our you know,
all of our gold. But that can easily become our
(09:59):
def vults when we don't identify and reevaluate our larger
money goals. Yeah, man, we actually got an email recently
from listeners Shay that actually, I think kind of spurred
on our idea for this episode, and she wrote, I
had never heard the term financial independence before listening to
how the money then and the current COVID situation has
made my husband and I realized it's okay to slow down, reevaluate,
(10:21):
and think about our true values. She says, hint, we'd
give away our cars before we gave away our six
little chickens. And she says, I came up with a
manter to reflect this newfound wisdom, and I've put it
on the bottom of my computer. I'm looking at it
right now and on my two credit cards. I just
wanted to share it, and I think your listeners might
benefit from coming up with our own mantra and placing
it around their house, on their credit cards or even
(10:42):
on their computer every time I try to shop online
or might be wasting time instead of working on my
side gigs. I asked myself this question. Does this support
my journey to financial independence in a simple, liberated life?
She says, it does. Wonders seeing that before she goes
shopping online or before she makes a big purchase, and
I love that idea. Of as we're making these goals,
(11:02):
putting those goals front and center, sending them in front
of us, like on the things that we see the most,
whether it's your mirror as you're getting ready in the
morning or on your computer, to remind you of what
is indeed valuable and meaningful, because like, once you've got
that goal and you've got that kind of simple mission statement,
it can really guide you in in the follow through. Yeah, exactly, man,
I love that she totally has the right mindset here
(11:22):
for her. It's it's not about amassing huge sums of wealth.
It's about continually realizing what is actually important. You know,
in her case, that's a simple and liberated life with
some chickens. Maybe even she'll get a goat someday, or
maybe not because that's too complicated. Whatever she wants to do,
it's up to her. But you know, taking these small
steps to remind her of that helps to enforce behavior
that will help her to continue in that direction. Basically
(11:45):
sort of like you're saying earlier, Joel, SHA's rudder, it
seems to be working perfectly. You know, it's pointing her
in the right direction that she knows that she wants
to go. So that's what this episode is gonna be
all about. We're gonna talk about re evaluating our current
money goals so that we can pursue more of what
actually and really matters in our lives. So we'll get
into the specifics of what that means for you right
(12:05):
after the break. All right, we're back from a break
and we're talking about designing smarter money goals. We're gonna
get to kind of the smarter system and how to
come up with your own money goals because they're different
for all of us. Right, we just talked about listeners.
(12:26):
SA one of the most important things in her life
was her six little chickens, and that's so cool. So
it's probably not like the specific chickens, although maybe I'm
sure she loves them dearly, but it's probably if you
dig a little bit deeper, it's what the chickens represent
in her life, right, which is maybe self sustainability, the
pace of her life, you know, maybe her connection with
the earth. I think a lot of times, Uh, these
different things in our lives represent something deeper than what
(12:48):
you can actually just you know, see with your eye, Yeah,
for sure, And we're about to get to kind of
maybe a system that can help. But before we get
to that, matt Um, it's so tough to reevaluate goals
that you haven't even really gun to create, right to
design smarter goals if you don't have money goals in
the first place. And so like, the first step that
I think you and I would would recommend for folks
is to spend some time in introspection. So much of
(13:11):
creating money goals comes with knowing yourself better. And say
obviously knows herself, she knows what's most important to her.
She'd give away certain high price items before she gave
away her access to taking care of awesome little chickens
in her backyard. It's pretty hard to create proper goals
without really knowing yourself. And you think it might even
be easier to do this given some of the social
(13:32):
distancing constraints that have been placed on many of our lives.
But we're pretty inventive when it comes to ways to
distract ourselves from doing the things that truly matter. So
while most of us have a little more time, a
little more space to actually do some of this introspection
to figure out what do we want our lives to
truly look like many of us have avoided it, and
COVID feels like the perfect excuse to avoid it, even
though it is actually the perfect excuse to pursue some
(13:54):
of those things. It's the perfect time to slow down
and actually look inside yourself a little bit. But instead
we've we turned to flicks. Yeah, and also we like,
we don't just turn to entertainment, but we looked at
to other people. You know, so many of us are
are used to making decisions based on what we see
our neighbors, what our friends or coworkers doing and whatever
it is up they're buying, or maybe like we're even
following the lead of whatever media companies are feeding to us.
(14:15):
You know, we're showing a constant stream of goods based
on digital marketing algorithms. Uh. And unfortunately we haven't taken
enough time to figure out if this is actually adding
to our happiness in our our own satisfaction. We went
pretty in depth on this on an episode way back
in the day called The Why Behind Our Money? This
is episode twelve, and figuring out your own personal you
(14:36):
know why behind your money is so crucial to helping
you accomplish those goals. Yeah, it's so much harder to
stick with a goal if there's not like a really
good solid why that you've thought through behind what you're doing.
And Matt, it just makes me think of like in
in school when we would get busy work from a
teacher and I didn't care about those assignments, and I
know most of the kids around me knew that it
was just busy work. Also, busy works the worst, yeah,
(14:58):
and and like you have to get this done, but
you don't care at all, You don't put much effort
into it. And I think that's the way it works
sometimes when we set goals but we don't have a
good why behind it, there's just less of an attachment
and less of an interest in pursuing it. Well, the
busy work wasn't necessarily helping you get where you needed
to go. It was just to keep you occupied. And
I think it's the same thing with with some of
our goals. If we don't have a strong and healthy
(15:20):
attachment to those goals that are pushing us in a
direction that we definitely want to go, that it's easy
to fall off the wagon for sure. Yeah, you know,
on the flip side, the best teachers gave assignments and
they're able to explain well the why behind the assignment,
and knowing that why can make all the difference in
terms of motivation. In a similar way, it right, not
many of us aspire to have, uh, you know, Warren
(15:41):
buffet like wealth, and if we're honest about the real
priorities in our lives, it would actually mean shaking things up,
maybe living our lives a little differently. Uh and you know,
spending our money in incredibly different ways. In order to
figure out your why in your goals, it's vital to
not be inhibited by what you see around you, you know,
but by what you're being fed by media or by
what your friends are doing. Instead, we want you to
(16:03):
think big about what your life could look like and
realize that you can make meaningful changes by consistently taking action. Now, yeah, Matt,
When I initially kind of went through the why behind
money exercise in my own life, I found it to
be so helpful. It clarified a lot of things for me,
and it changed some of the things that I was
actually pursuing. So let's get specific here, Matt. When I
was young, first starting out in my career, you consistently
(16:24):
took some action I well, honestly, the the introspection, the
thinking about the why behind my money had a massive influence.
There were things that I thought were out of reach
for me. But when I did do this exercise and
I took the time to see that, you know what,
my money wasn't necessarily aligning with my actions in every way.
And if I did do a little more of that,
then I could pursue some of those things that I
(16:45):
thought I couldn't afford, like traveling to really cool places.
I had to make some sacrifices to be able to
go on a cool trip to a place like Shanghai
or Norway. Those didn't come easily right. Um, But at
the same time, you're living in a sub hundred thousand
dollar home with a roommate to help pay most of
the bills. Was totally worth it. Yeah, man, you do
some house acking, you can definitely do some international travel. Yeah.
And I think it would have been easy to see
(17:07):
what my friends around me were doing and try to
imitate that, like living in a fancy apartment complex with
all the great amenities, but without that like intentional look inward,
writing these things down, doing some real soul searching, I
would have found myself missing out on some of those
great opportunities, and I probably would have spent my money
in a way that that really didn't resonate with what
I actually wanted to achieve. Yeah, and for you, Joel,
(17:28):
it sounds like you were able to be a little
more intentional about that time, right. You're able to think
through what it was that was making you happy. Like,
I don't necessarily remember a specific time where I sat down,
but I did know that this is what I wanted
my life to look like, right, Like, there weren't specific
things that I knew I wanted to except that I
did know I didn't want to necessarily have to go
into a like a traditional nine to five job, and
I was tempted to, right because health insurance is expensive,
(17:49):
and especially to when when you're looking at growing a family,
it's it's certainly something you consider. You get a corporate gig,
you get a normal quote unquote normal job, and you
got your benefits covered, you got health insurance. But I
knew I really didn't want that. That just wasn't It's
just not a part of I guess who I am.
I didn't want that. Kate didn't want that for us
as well. We just love the flexibility that we had
from working for ourselves. But the problem there was that
(18:11):
our income was inconsistent, and so for us, one of
the big steps we took in order to maintain that
work flexibility and kind of control over our time was
that we saved up a lot of money and we
invested that money in real estate. By by having long
term renalms man, that allowed us to kind of diversify
our streams of income so that even though we were
self employed, those ups and downs, you know, throughout the years,
(18:32):
that wouldn't have an impact as much on us. And
so in our case, it was something that we identified
and it wasn't like a specific thing like like you know,
with you as traveling, you're like, I want to be
able to travel every single year, going these awesome trips.
For us, it was kind of like the opposite. I
was just like, I just want to be able to
stay home and not go outside. Uh, and before us
to commute to work. So obviously everyone's motivation is going
to be different, and even arriving to that motivation can
(18:54):
look different for different folks as well. You know, so
if you haven't done that before, right, if you haven't
taken the time to figure out know what the y
is behind your money. Seriously, there's no better time than now,
and so for real, like right now, grab a pin
and a piece of paper, switch your phone to airplane mode,
and just take fifteen minutes to think through what you
want your life to look like. If you are in
your twenties, think through what it is that you want
(19:15):
to spend your time on when you're thirty. Maybe if
you're in your thirties, like, think about what you want
to be spending your money on by the time you're
forty years old. Think through what you want your typical
mornings to look like, what you want your vacations to
look like. We want to encourage you to think through
what your ideal life would look like, so you know,
right now you can go ahead and hit pause on
this episode. We're serious. We're also going to take a
break ourselves, but when we come back, we'll outline how
(19:37):
to make sure you're actually achieving goals to get you
to that ideal life, and we'll get to that right
after this break. All right, we're back from the break
and hopefully back from your break thinking about your fifteen
(19:57):
minutes of introspection exactly, which is I'll really take right now.
And sometimes you know you might need to meet with
your partner or significant other or a good friend to
bounce some of these things off of You're typically not
gonna get it done in fifteen minutes solo, but maybe
maybe you did, and at least I think you can
get somewhere. And hopefully you realize too that the things
(20:17):
that you wrote down, the things that are the most important,
many of them don't cost that much money. Some of
them might be closer to getting a used chicken coop
on Facebook, getting those six chickens and starting your own
little urban farm. It doesn't really cost that much money
in order to make that happen. But Matt, let's keep
going on from there. Having a Y is like this
essential motivation that can influence the goals that you end
up coming up with. It will influence how much you're saving,
(20:38):
how much you're investing, all that kind of stuff. But
you can't just stop at the motivations. It's time to
get practical, and I think that's where the smart or
smarter approach can be really helpful. And I mentioned at
the beginning of the episode that the smart goal system.
We've had it actually in my workplace for a lot
of years, and I've actually seen it fail in a
lot of ways. In the corporate context, the follow through
is not often good. The intentionality when it comes to
(21:01):
coming up with these goals and all that great, and
I think that's where the disconnect is. But I do
think that on an individual level, or a familiar level,
this system can actually work to help us create goals
that we can follow through with and that are meaningful
enough that that it's worth pursuing. Yeah, and the goal,
you know, for taking this smarter approach is to essentially
link this big y you know, like hopefully you've identified
(21:24):
it already, but if not, over time you'll kind of
develop what it is that drives you your motivation, like
Joel said, But we have to find a way to
link those bigger goals to our daily actions, to the
things that we we do every day. On the RAG,
we're trying to bridge that gap between the theoretical the
things that we think will make us happy in our minds,
to the practical the things that we do every single day.
(21:46):
So let's go ahead and talk through this man so smarter.
It's an acronym right, each letter of smarter stays for something,
and that's what we're gonna talk through. Now, we're gonna
talk through how these different terms apply to us and
our money. And we're gonna start with S. Let's go
on H. S is for specific while identifying your why.
You know, we talked how that can be great motivation.
(22:07):
It can be pretty vague when it comes to money goals,
you know. So for example, if you know that you
want to save a lot more money, well, getting specific
and then saying that I'm going to save up for
a down payment on my first house, that's gonna be
a lot more successful because you're being specific. You're telling
it to a very clear and identifiable goal. Uh. If
we just set out to save more money, well you
(22:28):
can't really put your finger on that, but you can
put your money on a specific dollar amount, yeah, or
even just I'm going to save up a down payment
for a home, and yet there's nothing else going on there.
I think that specific number creates something tangible. It creates
a real goal worth achieving, as opposed to yeah, I'm
gonna funel more towards saving up for the down payment,
but not getting specific with it. And the next letter
is M, which stands for measurable and it's it's pretty
(22:49):
closely related to specific, but oftentimes when it comes to
our personal finances, there are two factors that we need
to make sure are measurable, uh, the time and the
dollar amount. So let's tell about the downpayment again, Matt,
fifty dollars. That's a great specific goal, but the measurable
part of that goal is what's the time period I'm
gonna be able to achieve that in. If it's saving
up fifty dollars in the savings account in the next
(23:12):
four years, then it's measurable, like, did I hit my goal?
Did I get it in the timeframe that I was
aiming for? And that's where the M and the S
kind of work together really well. It's a specific number
in a measurable time frame, which really helps you zero
in on that goal that you're aiming for. Yeah, man,
that data needs to be quantifiable. Uh. So the next
letter is A. UH. Within the Smarter acronym, A is
(23:35):
for attainable, right. Uh. We don't want you to necessarily
shoot for the moon like we want you to stretch yourself,
but make sure that you're being realistic about what you
can achieve, as well as the time frame which you
can do it in, so that you don't immediately give
up on the goal. You know, a good place to
start is by looking at what you've been able to
accomplish in the past and then go from there. So,
for example, you can look at how much you previously
(23:57):
saved every single month, and then you can channel yourself
to maybe save a little bit more. You're basing that
number on something that you know is certainly doable because
you have done it before. You're not just shooting from
the hip saying that like I'm gonna say three thousand
dollars every single month. You know, like that's not going
to be very attainable. There's a similar advice to to
what we say when we're when we're talking about budgeting, right,
and we talk about starting like before you budget, start
(24:19):
with tracking your money, because if you're able to set
a budget based on what you have set previously, you
are going to be more likely to be successful. Yeah,
it makes me think about our podcast goals and aiming for,
like Joe Rogan download numbers. That's unattainable, man, that's just ridiculous.
Don't even include that you want something that that is
actually within your reach. With this within your grasp, So
don't overshoot, because that's a recipe for ditching your goals
(24:41):
altogether when they become depression or depression. Yeah, it's so
easy to ditch goals because they're unreachable. So it definitely
has to be something that you can attain, all right.
The r and the Smarter goal system is for relevant.
Do you ever go back to it to do list
and add items that you've already completed? Guilty yet just
so and cross it off and you're like, oh, yeah,
I got it, feel a little sense of accomplishment. Yeah,
(25:04):
and it does add that, right, But this point is
for people like that, people like you, Matt, and make
sure that your immediate financial goals are moving you towards
the true bigger goal of the why behind money. This
goal has to be relevant to what you're actually pursuing.
So we just gave the example of a down payment
on a home. Maybe you don't care about homeownership, and
in fact, you don't need to care about homeownership. We've
(25:24):
talked about that on the show before. It's not best
for everybody, although it works great for some people. And
so this goal not only needs to be specific, measurable,
and attainable, it needs to be relevant to the things
that you're actually trying to pursue, what you want to
become your reality essentially of what the good life looks
like in the coming years. Yeah, and when it comes
to some of the smaller goals that you might be
crossing off your list, that's where in my mind that
(25:46):
you need to make sure that you're moving towards that
larger goal. Right. I understand the need for a psychological
win here and there, but it's really important to make
sure that the small money wins align with that larger
money goal. Um. And that's actually where our next point
kind of plays into that stands for timely. This is
where we're acknowledging that smaller goals that you can reach
on a shorter timeline, how they are just really crucial
(26:07):
for success, you know, just the the bigger goal, the
longer it's going to take you to actually achieve that goal.
So we know that it's important to aim for bite
size goals that will create momentum and keep you on track.
And so we keep bringing up, you know, this down
payment example, because a lot of folks have a goal
of owning a home. Some don't, some do, But in
full years that might seem really overwhelming, and it might
(26:29):
be easy for someone to kind of get off track
of that saving his goal, Like how do you actually
go about saving that much money up in four years?
You know? But if you break it down, what you're
looking at is setting aside, you know, a little more
than a thousand bucks every single month. It's very clearly defined.
It's it's set at smaller intervals of time, and it
will be a lot more difficult for you to get
off track saving up that fifty grand for that down payment,
(26:51):
you know, by breaking it up into into monthly bites.
Until I know, even when it comes to our budgeting,
if I don't check and update our budget like a
couple at least a couple of times a month, I
know what that means is that at the end of
the month, we're eating literally like beans and rice and leftovers,
because we'll blow through our grocery budget. We'll blow through
our entertainment budget. So we're not going to be eating
nice cuts of meat, We're not going to be going
out to eat, going out on a nice fancied date.
(27:13):
The last week, maybe even the last two weeks of
the month if I haven't done a good job of
staying on top of that budget. And so I'm not
necessarily going to advocate for, you know, moving to a
weekly budget, but I do know that's important for us
to kind of set these small little milestones throughout the
month where we were able to update our budget numbers. Yeah,
I mean Rome wasn't built in a day. Uh what
do they say if you want to eat something like
(27:35):
like a huge animal, it's one bite at a time,
Like that's the way you do it, Like an elephant,
I believe. Yeah, yeah, an elephant like you, You're not
gonna eat it in one sitting, like super quickly. Why
would people want to eat an elephant? Anyway? They're gentle creatures,
are very sweet. But like that is the kind of
thing that we're getting at here. Is is the timely
portion of it. You only accomplish these things over a
(27:56):
period of time going in the same direction. It's like
that rut or turning just slightly to get you on
that path to saving a little bit more every month
to help you reach this goal. But fifty bucks in
four years seems ridiculous. It seems absurd. Until you break
it down into those bite sized chunks and then you
can actually accomplish it. That's the important part of what
team brings to the table. It actually makes me think
(28:16):
of you remember the episode when I was talking about
World Cup tickets because they announced how that how North
America was going to host World Cup and six I
think six years from now, hopefully we can watch in
person soccer matches them by then. I'm sure we will,
but uh, but yeah, I mean I based the numbers
on what the tickets in Russia we're going for, and like,
it's ridiculous. I mean, it's thousands of dollars, and if
(28:38):
we were to take our whole family, it would be
a lot of stinking money. And in my mind is like, okay,
there's no way we would ever go to that. But
based on some calculations, I figured that if I just
set aside thirty bucks a month, we would be able
to attend the World Cup no problem, all six of
our family members, which is crazy. Yeah, to think that
we would take that many people. It's like that planning ahead, right,
And yeah, it just takes planning ahead and just and
(28:59):
bring can get it up into into the small bytes.
But now it doesn't feel insurmountable, right, not at all,
whereas it did. You know when you initially got the
sticker shock of this is how much it would take
to go to one World Cup match. It's like, that's crazy,
that's not gonna happen. But breaking it down makes it
possible totally. Alright, let's get down to the e R.
So smart goals are kind of the way it's typically
talked about, but you can add this e R onto
the end smarter and and and that's what we're doing.
(29:22):
And I think that helps even more because our goals
need to be continually evaluated and reevaluated. That's the e ER.
I know, some of the goals that I said back
in the day just aren't relevant to my life anymore.
For instance, travel, I'm really glad I've gotten to see
a lot of the places that I've been, but international
travel as a family just isn't as important to me.
And so our goals have changed in a lot of ways.
(29:44):
So it's important to evaluate and then re evaluate those
goals along the way. Your goals are going to look
different as you grow and as you change. I would say,
just like Martin Short, who we mentioned at the beginning
of the episode, he evaluates himself on an annual basis
according to those kind of nine markers of how he's
doing it and what his life looks like and and
if that's what he wants it to look like. So
maybe revisiting your goals on an annual basis can give
(30:05):
you that ability to see whether they're still meaningful or
whether you want to pivot and go in another direction.
Are you still trying to go to Mexico for an
all inclusive vacation with your with your partner, that to
Loom to to Loom, that's like the hotspot or it
was like last year, a couple of years ago, I'd
go to Koom, I'd hit that up. Yeah. But but
maybe now you're expecting a baby and you're like, no,
(30:26):
that's not our goal anymore. No, now we're saving up
money to do some home renovations to make it feel
like a better space to bring our baby home to.
It's important to be intentional, and I think using a
system kind of like the Smarter Goal system can be helpful.
But it's also only really helpful if we continue to
look at those goals that we've set and make some
changes when they just don't fit into our plan like
(30:47):
they used to. Yeah, so there we go, Joel, that's
the smarter system when it comes to our personal finances
and goal setting. But man, you know what, we're not
always going to get it right, and so we feel
it's important to note that, like, we have to be
able to give ourselves a break, you know, when we fail.
We're not gonna always get it right the first time.
But at the same time, don't be afraid to immediately
hit reset and set another goal straight away. There might
(31:09):
be an unexpected bill and that could derail your savings
for the month, but that's okay. You don't have to
throw in the towel altogether. You know. You just were
talking about evaluating and re evaluating. Continue to do that regularly, uh,
and and just stay committed to the larger money goals
that you have by revisiting the different things that are
going to be important to you. Yeah. Mat At the
beginning of the episode, you kind of talked about a
(31:30):
couple of different studies that talked about the impact of
money on our happiness and there's not a direct correlation
after a certain point in time. The idea of just
building massive amounts of wealth in order to hoard it
for ourselves. That doesn't appeal to many of us. It
doesn't appeal to you and I, right, But it is
important though, to identify what it is that truly will
(31:50):
make us happy. Right And in many instances, saving well,
investing well, being more thoughtful with our money does make
a difference, does make a drastic difference in helping us
to be able to achieve of things that actually do matter,
many of which aren't even terribly money dependent, but so
much if it starts with knowing ourselves and then implementing
something like the Smarter Goal system. You can obviously choose
to go a different route when it comes to implementation,
(32:12):
but I hope that thinking through how we assess and
then implement money goals for ourselves and how that kind
of fits into the broader context of our lives was
helpful for everyone today. Yeah, and Joel on a related note,
away that you and I that we are able to
implement uh a goal, albeit a pretty small goal, into
our lives, and even on the show is craft Beer.
(32:33):
You know, this is sort of like Shay. This isn't
a major thing, it doesn't cost a ton of money
like her chickens. Right. Craft beer doesn't cost a ton
of money, but it's something that we are able to
enjoy and it moves the needle a lot for us. Uh.
And so every episode we have a craft beer man.
This episode we enjoyed an Alpha Abstraction, volume number thirteen
by wild Leap. What were your thoughts on this brew? Yeah,
(32:54):
this is another I p A in a long list
of I p A s by Wild Leap, who's just
around the corner from Atlanta, and this one packed massive
melon flavors in the hops. It was super sweet, Like
a lot of their I p s are actually just
incredibly sweet and sometimes a little too sweet for my
my palette. I don't love it when an I p
A is this sweet, But I like what they're up to.
I like the direction they're going in. Even though this
(33:16):
isn't like top ten for me, it's still a really,
really solid I p A from a great brewery just
around the corner. Yeah, I'm with you man as far
as the melon flavors, but I feel like, in my opinion,
it balances really well with the bitterness that accompanies those hops.
You know, It's like they included the cantelope, but they
also included like some of the skin as well, and
you have to also eat that, right, But in my opinion,
(33:37):
it's a nice balance. It's a really juicy beer, and
we'd recommend for you to swing by that brewery if
you're heading down the interstate here in Georgia. Maybe you
might even see Joe and I there. We have yet
to hit them up, but we will one of these days.
It's gotta make it happen for sure. All right, that's
gonna be it for this episode. Our listeners can find
our show notes up on the website at How's money
dot com. Yeah, and just a quick reminder, put your
(33:59):
money where your goals are and then put those goals
in plain sight, put them on your computer. Whatever it
takes in order to remind you consistently of the things
that actually matter and the things that you're trying to pursue,
and maybe it helps you avoid spending money in an
errant way. So all right, Matt, that's gonna be it
until next time. Best Friends Out, Best Friends Out.
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