March 18, 2024 • 46 mins
On this episode of the Finding Time podcast, we connect on one of our favorite & most requested subjects, MONEY!
Discover the line that people hesitate to cross when it comes to disclosing their income, explore the misconceptions around economic class, and learn valuable tips for having open, non-judgmental income-related discussions.
We also address financial compatibility among couples across different generations. You’ll learn why more than 20% of couples consider financial matters as their primary challenge, and get practical tips for overcoming these difficulties.
Explore budgeting methods from old school, physical cash & envelop methods up to modern digital options. Gain crucial tips for categorizing expenses, planning for unforeseen expenses, adhering to the 50-30-20 rule of budgeting, and maintaining a balance between essentials and discretionary spending. With anecdotes, crisp advice, and relevant statistics, we aim to improve your financial understanding and promote money management endeavors.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
All right. Welcome back to the Finding Time podcast.
Hello. We are Finding Time once again. Yes, we are.
We had a little bit of a break there, but we've been working through all of
the topics that people have kind of thrown at us and recommended.
And the one that has consistently come out is our topic of today.
(00:21):
Which is finances. I was a little shocked when he told me we were going to talk about this.
Why were you shocked? Just because we don't necessarily find time to talk about this.
No, no, for sure. But we're not here because we have all the answers.
I think we're just here to talk about it and hopefully ask the right questions.
(00:41):
That's true. And I'm assuming you did some research?
Of course. Okay. And there's even a little quiz during this one. Oh, boy. I love numbers.
Okay. So why don't we start off with, I think, the obvious question, which is,
why do you think when you asked for recommendations of topics and what do you
(01:05):
struggle to find time with your partner about, this one was,
I think, number one or two on your responses.
It came up a couple times. And honestly, I just think it's because it's not
really talked about. out.
I mean, maybe it's talked about amongst couples, but with your friends,
with your family, it is kind of shied away from because it is more of a private topic.
(01:28):
It is. Yeah. I think that's like a big part of it.
I think people are uncomfortable about talking about it.
They've been conditioned to be uncomfortable in talking about it.
I think the one thing that kind of is interesting related to that is that millennials
are actually the most most willing to discuss salaries and all that kind of stuff.
(01:50):
I could see that, though, because I think millennials maybe are the least private
with talking about even relationship things with their friends.
Yes. Yeah, they're fairly public. It was kind of funny when I was trying to
do some background research and looking up topics related to how generations discuss money,
(02:11):
like four different articles that kept talking, kept popping up.
Were how millennials are the most willing to talk about money and mental illnesses.
Basically, they just can't keep anything.
So are they tying mental illness with money? There seemed to be a correlation.
For whatever reason, the articles and it was different websites,
(02:32):
different authors, they like
to just kept saying millennials love talking money and mental illness.
I think part of the reason is because so much of it is transparent. parent.
I mean, millennials obviously are in a very tricky financial place that's been
documented all over the news and things like your student loans,
(02:53):
which was kind of a very heavy millennial issue.
We definitely have talked about with our friends, like, oh, we pay 400, we pay 800, we pay 1200.
Like that is something that has come up and rents and mortgages and sale prices.
I I mean, if anyone buys a house, you can look it up on Zillow.
When people have a rent, a lot of our friends and counterparts will say,
(03:15):
oh, I'm paying $1,800 for rent, $2,400 for rent.
Outside of those two big expenses, you kind of know that.
I mean, you know, they spend money on food, but you don't have to get into the nitty gritty.
You see when they take expensive vacations to wherever they go because they're
documenting all of it. You kind of have a fuel like based on the cars or even
(03:36):
again, our friends will bring up car payments.
Like we've really because of those two things, the mortgage rents and student
loans being transparent.
Everything else is pretty obvious where I feel like older generations didn't
mind talking about their food costs, their car costs.
So now you have the whole picture. There really is no need to hide that information.
(03:58):
I think that's really accurate.
You can honestly just look up so much about what money is spent.
However, I think that's what makes the question of finance so big on people's
minds is because you're seeing maybe what someone just bought on a vacation
or the house they just mortgaged.
(04:20):
And then you're like, but wait, how?
And then that leads to what's their salary, which is where the topic gets really
tricky and honestly not really talked about. Yeah, that's still fairly taboo.
People don't talk about that much.
Although, again, millennials are the most willing to talk about it.
What I thought was interesting as I was trying to think about this and look
(04:43):
some stuff up is there's such a clear divide.
Could not find any articles or anyone who's done this. So I'd love to see someone do this work.
But there's an amount where you stop talking.
Because certain hourly wage jobs you talk about, especially just starting out,
whether you're in high school, college,
(05:04):
you got 15 bucks an hour, 20 bucks an hour, you kind of know some of these employers
who are starting to really advertise it, whether it's warehouse workers, labor workers,
retail workers, you know, 22, 24, whatever, 30 bucks an hour,
you kind of know, and that's just been publicized.
So people are okay talking about it then. Man, you hear people,
(05:25):
especially in that segment, comfortable talking about it to say,
hey, I'm happy to get some overtime.
It's time and a half on 28 bucks. Perfect.
But there just seems to be a point where people stop talking about it,
which I thought was interesting.
I don't know what that point is, but they just stop.
I think too, if someone's saying that to me, I don't want to ask too many questions
(05:48):
either because of that stigma about not talking about it.
So sure, they're throwing out to me, hey, I make $20 an hour,
but I'm not going to dig in more just because you don't know where that line
is to stop talking about finances.
Yeah. Yeah, that's true. I think that's part of the issue and maybe why it gets
lumped in with mental illness so much is people sometimes want to talk about
(06:11):
it because they want help or they want guidance.
They don't want judgment, but they're terrified of that. You don't want to be judged.
That was something I saw a few years ago and I don't want to say it was a trend,
But it was something that was going on because there was such a massive sort
of pay disparity among people our age who were in completely different career fields.
(06:33):
They were all over the country where geography is a huge factor in your income.
And they were kind of just playing an over-under game where you're not going
to dig into what someone makes.
You're not going to pry them for questions, but it was just, give me one shot.
Do you make over-under this amount? out? And then you answered and then it was,
okay, we'll move along with our day and kind of talk money without getting into specifics.
(06:56):
And I thought that was an interesting approach to take without diving all the
way in. And then again, I think a lot of this comes back to trust and judgment.
There's not, I would say a lot of people that we've ever discussed this with,
but I know of a couple of people where I've talked pay pretty specifically.
And it just kind of helps because if you're going through similar career progressions,
if you're going through through similar promotion discussions,
(07:18):
especially people who leave a company and you want to know, was it worth it? Did you get more?
Were you grossly underpaid at your last job or did you get a great package at your new job?
There's a lot of nuance there, especially without getting specifically to the scent.
But if you can find someone who you think is trustworthy and won't judge you,
(07:40):
you can make $100,000 different in pay and still have a good friendship and
a good conversation. I think it really comes down to.
A deep, fair friendship. That's true.
And getting the advice either from someone who is on the same similar finance
track as you or above is really helpful.
(08:02):
But again, I think that was the right word to use, trust.
You want to be able to trust who you're going to bring that up with.
So that way, they're giving you, first of all, the right advice,
but also, you know, hey, I can go to them if I'm really torn on how this will
help us or how this might hinder us.
It will. Yeah. And you get that just that extra input. And it's kind of a double edged sword, too.
(08:25):
It works both ways. If you have a friend in a completely different career situation,
then it's just kind of general advice.
But you can't compare apples to oranges.
However, if you have a friend in the exact same career space, same education,
maybe same age, same same experience and you find out there's a massive pay
gap, it could help one of you in having some different discussions,
(08:47):
but there's a lot to unpack there.
There might be some uncomfortable truths about why you're underpaid and it might
be performance related. It might be bias related.
It could be all sorts of nasty stuff. It also might be market geography.
So there's a lot to unpack there, which is probably why people don't like to talk about it.
And in the big picture of of finances when it comes to, let's say, a budget.
(09:12):
Income is a huge factor, but it's also not the only factor.
So we'll talk about some budgeting tips and things like that in a minute.
But first, how about we hit everybody with some numbers?
So are you ready to play a little bit of a guessing game?
I am. Okay. I only have one question for you here, but we can go over some of
(09:36):
this because I think it helps frame the conversation too in terms of what everyone's
going through and where everybody fits in.
So a big part about the stigma around money and income and class and all that
is just a comparison, right?
Nobody likes to be lesser than they think they are. Nobody likes to be compared to some people.
(09:58):
So as of 2022, what do you think the median household income? Maybe 60,000 to 70,000.
Can I make a gap like that?
Sure. You are close, but wrong. It was 74,000. Okay. That's higher than I thought.
But again, everything is going up.
(10:20):
So maybe that's considered fair as well. Yeah, 2022 is, you know,
there's a lot of wage inflation over the last couple of years that kind of led to that.
So I did not look up what it was in, let's say like 2016, but it was probably notably less.
And so, you know, I think I find comfort in that.
Not everybody is the same way, but I do like a clean, clear kind of structure.
(10:44):
And so I wanted to look up where these classes fall. So I could just understand
what income level are they saying would put you into what class.
This is different than what your net worth level would put you into class.
For example, you might have a lower income because you've retired or you're
semi-retired, but you've got different properties and no debt and all that kind of stuff.
(11:06):
So income and net worth are connected, but they don't necessarily go hand in
hand proportionally. So keep that in mind.
So this is just income based in the U.S. as of 2022.
So right after COVID, which would be kind of interesting.
Yes. All right. So let's start with upper class.
So upper class is anything over $153,000.
(11:28):
Dollars upper middle then starts at
ninety four thousand dollars and goes to
the hundred fifty three thousand and again this is the
household income so it's both salaries or one salary depending on who you have
working in the home middle class is anywhere from fifty eight thousand to ninety
four thousand which then puts lower and lower middle class anywhere under fifty eight 8,000.
(11:55):
Yeah. And I think the cutoff for lower middle was 58, lower was like 37.
And those are pretty broad categories. I don't think there's anything too surprising in there.
They've definitely risen over the last couple of years.
And if you look at someone just graduating college,
let's say, and making somewhere between 20 and $30 an hour or an annual salary,
(12:20):
40 to 60,000, And right off the bat, you're lower, lower middle class.
And again, on top of that, you probably have a ton of student loan debt and
expenses you have to pay back and whatever, unless you're in a great situation. So.
I think that's kind of been the biggest complaint economically in this country
is you're just lower class right off the bat in terms of economic status and
(12:43):
escaping that class is very difficult, you know, unless you have the tools and the opportunities.
I think then that sets the tone because it is hard after you go to school where
to go from there, at least with who we associated with.
Most of us went to college, but then it was what happened after that that may
(13:06):
have really impacted everyone one way or another. other. Yeah.
I mean, what you choose to do. And I think there's an argument to be made,
or at least a point to be made,
that should you really have an expectation at 24 or 25 or 26 years old with
no experience in your first job to be anything other than lower,
(13:28):
lower middle class, you kind of should work your way up.
But it shouldn't be as hard as it is today. I thought I thought that was worth pointing out.
Not for sound. You're showing our age because we were 22 when we graduated college,
starting our first jobs.
Not 24, 25 year olds ending school.
Well, even more so. A 23 year old should not be comfortably middle class.
(13:50):
I just, you know, you gotta work your way up. You gotta earn your keep a little
bit. There's, we are the generation of entitlement.
Stereotypically. So I'd like to push back on that where I can.
I think now the generation before us or after us is now getting that title.
Yeah, they're a bunch of brats.
But they're a little bit smarter because they know, oh, how can we not get these loans?
(14:12):
How can we stay with our parents for a little bit longer?
I have some interesting data on that actually later in the show.
So class warfare, I honestly think this is more of a topic that news people
use and political people use and whatever.
I don't think it's something people in their day-to-day lives care about at all.
(14:33):
It's just a talking point and it's a framework that is pretty flawed in a lot
of different ways if you really look at the number.
And just in case we have any very, very successful listeners,
I thought it was worth pointing out since everybody always harps on like upper
class and top 1%, whatever, that's always a a talking point.
So the upper class household income starts at over 153,000.
(14:56):
To be in the top 10% of earners in America, you have to be making over 175,000.
And then to be in the top 1%, you have to be over 823,000.
So these lines I think are a little silly in some cases.
While they break up the country into thirds for sure, there's a lot of severe
(15:17):
poverty at the bottom them, you know, under $37,000 and there's a lot of wealth
at the top over $175,000 too.
So again, I think it just gets people riled up about nothing when really most
people are just sitting comfortably in the middle with a pretty close spread mathematically.
(15:39):
And that's why income is only part of the battle because it really comes down to other factors.
We kind of talk about this a lot when we're talking about our own finances,
just to get a little bit personal, because I know people want to hear personal
stories, is that you do hope to increase your household income.
(16:00):
But with that, and I don't know why this is so true and it just happens,
your bills start to increase because you want the newer car or the bigger house
or you have four kids in four years.
And that is something that just happens, which probably then,
I don't know, maybe almost levels the playing field in some ways.
(16:22):
Sure, it's easy to get a 10% raise.
And if you go and just loosen the belt a little bit on your grocery budget,
you're eating out, dining out budget and buy a new car, your 10% is gone.
You're back at the same lifestyle. It's back at the same budget.
All right, so finances by the numbers.
(16:44):
Over 20% of couples report finances are their number one challenge.
What do you think about that? I think that's probably pretty accurate.
I think that makes sense. That's probably why when you pose the question to
people, like, what should we talk about?
What do you struggle to find time to talk about? This is it.
You know, people really come back to money because it's such a major stress
(17:07):
point for us and people our age, but all the way on up.
I mean, you know, pretty much any different generation, younger,
older, everyone stresses about money at certain points until they reach a certain comfort level.
And we saw a lot of that growing up. I would say we know a lot of people whose
families went through financial turmoil, who had parents that divorced over
(17:27):
money like we've seen that.
So I think our generation is is specifically sensitive to it. it?
We have been really good. I will pat ourselves on the back.
We are not in that 20% that this is our number one challenge.
But I think that's because right from the start, we knew that this is something
we have to keep the communication lines open.
(17:50):
At least if you don't want to talk about finances with your friends or your
family, you do want to make sure to talk about it with your partner because
essentially your money is being spent together,
especially if you plan on having a family down the road or sharing bills under the same roof.
Exactly. So let's play a little survey game while I was looking this up.
(18:12):
What percent of couples surveyed said they are incompatible with their partner
when it comes to money preference and spending habits?
I don't know. Would it be under 20% because that's like the challenging part?
I want to say it's probably like 35%.
64%. Oh, my goodness. I'm not surprised by that, but that is kind of sad.
(18:36):
It is. It's a shame to kind of think that. Now, incompatible means we just disagree
on money and we let it be, or incompatible meaning this is going to ruin us
are two different situations, but that is a big number, 64%.
Or is it, wow, you don't make enough money. See ya. That sounds very one-sided.
(18:56):
So next up, what generation is the most aligned financially with their partner's views?
I would say maybe the boomers are the ones right before the boomers,
just because it seems like that was more the one income household.
So that just was a system that they had.
(19:18):
That is true. True. They said they are 54%. But still, that's kind of a smaller
number. But yes, 54% aligned.
I didn't see all the results. I'm just going to assume the silent generation,
I think, is the one older than them, was not part of this survey because they don't have email.
I think maybe it's the boomers, too, because there was not much much fluctuation
(19:41):
amongst spending and even salaries.
Right. Unless you were really towards the very bottom or the very top at that
point. It was a lot of middle class. It was.
Yeah. They grew up with the quote unquote American textbook,
you know, do get good at something, whether it was a trade or a job or whatever,
(20:02):
get good at it, get a job with it, have a family, buy your house, get your essentials,
save and spend wisely, and you'll be set for life.
A lot of them have more attractive benefit plans, retirement plans,
much more affordability in terms of cost of living in a lot of cases.
Their home prices, as we've seen, a lot of that generation, if they stuck in
(20:27):
their house and they bought it for $140,000 and now they're selling it for $800,000,
they are making out just in terms of a 30-year or 40-year investment.
So it was a very different playbook than you or I are going to get to enjoy. joy.
So lastly, what generation is the least aligned with their partners?
I mean, is it us at this point just because this is when the divide is starting?
(20:52):
I wouldn't even say, I mean, we're at the younger end of millennials.
So I would say like this younger end of millennials to who's before us,
Gen X or Gen Z. I messed that up.
Gen X is older than us. Gen Z is younger. Okay. So definitely younger millennials and Gen Z.
You're probably right. Right. Millennial came in last at 23% aligned,
(21:15):
which is a surprisingly small number.
I don't know. I'd have to think through that a little bit, but that is,
I mean, that's 75% of millennials are saying they're not really aligned with
their partner. That's a big gap.
We are seeing, and there is no right or wrong way to do this with your partner,
that everything is being more split down the middle, which in our case wouldn't work very well.
(21:38):
Some people are making that work, but I would think maybe that's why the communication
is lessened then because you think as long as I'm handling my side of things,
I don't really need to tell you what's going on otherwise.
That's true. You kind of have your income, your budget, and if you're doing
your part, you think you're fine, but you're kind of missing the big picture.
(21:59):
I could see that. We've seen that work really well for some of our friends,
and we've seen it work not that well. usually when the couples just don't have
good communication skills as it is, or their income is grossly misaligned or something like that.
But that is one approach that we've seen more so out of this generation is you
even, you know, you just keep things separate and it's really,
(22:19):
really interesting to see it, you know, kind of come into action.
But again, it seems like it only works if you're communicating and sharing and
trusting your partner to kind of move things around. But that is, that's one approach.
The last thing from that study that was, you know, kind of interesting in terms
of their findings was they actually reported younger generations find a financial connection is a,
(22:43):
it's a turn on like that. It's an attraction in a partner.
So if somebody offers to split a bill when you're just dating or when you're
more serious or married, having a joint spreadsheet or having a joint bank account,
you know, saving each other's banking login, that kind of thing.
Like it actually was a huge attraction point.
I think think it was 20%. Yeah. 20% of Gen Z and millennials said that is a
(23:05):
top turn on when it comes to finding a partner was financial compatibility and
sharing financial responsibilities.
Is that why you were attracted to me? I would always offer. Sure.
That was one of the many reasons why I was so, so attracted to you.
Although you stashed a lot of money away while I was paying a lot of the bills
(23:27):
when we were first dating, which
in reality came around to Ben and fit me later. So I guess I'm happy.
That's a pro tip. If you're going
on a date, you just expect that you're going to pay or pay half of it.
If you don't, then save that money and that becomes just money then you can use down the line.
(23:48):
You know, eventually a down payment on a house if you go on enough dates.
I don't think that much, but sure.
Okay. So let's talk specifics then. You know, I mentioned this before,
income is part of the battle for sure.
But when it comes to budgeting, there's a couple of different approaches that people can use, right?
(24:10):
And everyone kind of has to find what's comfortable for them.
I wouldn't ever recommend not budgeting or reconciling your money.
But yeah, I mean, there's a few different ways that you can go about managing
your budget and income and expenses.
So there's obviously the bank connected, which is through apps,
which I think you do have to be pretty much invested in your partner at that
(24:32):
point, because that's sharing a lot of personal information.
So I would suggest that if you're married or living together or just very serious about your partner.
Otherwise, I would say that's probably a no. What do you think?
Yeah, don't go giving out your banking info until you're very serious or living
(24:53):
together, married, whatever. It's not something I would take loosely.
We sort of started this with our own cash fund when we were dating right at the end of college.
And then eventually that became our first bank account when we got out of college.
But before college, maybe the end of high school during college,
we used this other method, which was the envelope method.
(25:16):
And we went to school long distance, but whenever we would see each other,
we would bring, I think it was $50 each and we would put it in an envelope.
And then one of us would keep the envelope until the next time we saw each other.
And that envelope is actually what opened up our first bank account.
Yeah, it was. That's what started our first bank account.
(25:37):
And then also, you know, birthdays, holidays, graduation, whatever,
when we had some extra money, we would just throw it in there and we started
building up our own little fund.
So that was our first kind of savings account, the envelope method, I'll say.
This is super old school, but you can kind of take the fundamentals of it and apply it to your life.
(25:57):
I think your grandparents talked
about this once. I know my aunt and uncle had talked to us about this.
And this was back in the olden days when you literally got a check,
you had to go to a physical bank, give that check to them, and then they gave
you cash. And then you could decide if you take all the cash or save some, whatever.
It's just funny to think through like what it was, but that that's literally what life was.
(26:20):
So anyways, you would have envelopes broken up by your needs.
You'd have one labeled for rent or your mortgage.
One for your loans, one for groceries, one for dining out, and then one for fun and savings.
And every time you and your partner got paid and you came home with your cash,
you would split up the money into the envelopes. And you always had to have
(26:41):
enough money in your mortgage envelope to pay the mortgage, obviously.
This was back at a time when you could take cash to a bank to pay your mortgage
or write a check or whatever. But anyways, that's what you would do.
You always wanted to have money in your envelope for groceries,
but you would kind of let it waterfall down the line.
And when you would fill up your fun envelope, you could also do some fun things.
(27:03):
And it's such a simple concept.
I honestly think that's why so many older people through that time also manage
their money well, even if they weren't high earners, because it's so basic. It's so fundamental.
It puts it right in your face. I always really liked that. And that's kind of
where our first envelope came from.
It's interesting how we are finding time to connect these shows.
(27:27):
Because as you were saying that, I was thinking we were talking about learners
in a recent podcast, and we were saying that there's such a thing as hands-on learners.
So for the people who are hands-on learners, but never are able to touch that
cash or that envelope, that could really affect how they are able to budget their money.
(27:47):
Oh, it definitely is. I think there's a huge connection between the absence
of physical money these days and the struggle people have to manage it.
There's obviously inflation, rising costs, wage gap.
There's things that hurt people, but there is just that lack of physical connection
where you're giving someone money.
It definitely pays a toll. And anyone who's bought a movie on their TV,
(28:11):
who's bought something from their phone, who's bought anything digital without
having to collect the money, you know, it's just so much easier and it's just so much less real.
That's so true. We just had this issue with our oldest. He's five.
He bought like the upgraded version on all of our Alexas for music.
And it was simply by like saying, sure, Alexa, I want that.
(28:36):
But he didn't realize, oh, I just charged my dad's debit card or my mom's credit
credit card with all this money.
And that is funny because it's something he doesn't see. He doesn't see cash.
He does see coins because we let him make a piggy bank, but he doesn't see that cash flow.
So even explaining that to kids now makes it harder than maybe the older generation
(29:01):
that had the envelopes because you could really show them, look,
I just spent that and now this is taken out.
Yeah, that's very true too. I think the starting point in terms of financial
management is so much worse today than it was...
Back then too. I think at 18, 20, 22, you were pretty fiscally responsible.
Now kids, you kind of don't learn unless your parents are really on you or until
(29:24):
you get burnt a couple times in your early to mid twenties. And that's, that's unfortunate.
So this is an interesting tip for any parents too.
We'll do a whole episode with like kids and money. Cause I think that's a really
important topic too, but we did have our Alexa locked down so that he shouldn't
have have been able to do that.
However, we had it locked down so he couldn't buy movies and TV episodes because he also did that.
(29:46):
He bought like an episode of Transformers one time.
And so we did lock it down so he couldn't do that, but he was still able to
upgrade our music subscription.
So we got that fixed luckily. But if you have a kid in Alexa,
watch out for these things.
We didn't do the second one because I went from the bank to the envelope,
But the last method was a personal managed method, which is Excel or paper-based.
(30:12):
I don't necessarily do well with numbers, but someone like Dan,
he will put our monthly, yearly even, finances on an Excel sheet and later at
some point. Sometimes we try to do it monthly.
Sometimes the weeks get ahead of us, but we'll look at the spreadsheet and see
maybe where we need to rein it in a little bit or maybe where we can spend a
(30:37):
little bit more if we're trying to upgrade something in our lives.
That's one of my favorite things to do. I like having my own control over it.
I look through all of our accounts.
I pull out all the expenses for a month and then we have our categories and
it's just a big Excel spreadsheet.
You know, our top couple categories are at the top, about the mortgage,
you know, the gas, the utilities, the cars, whatever.
(30:58):
And then it's all alphabetical below that. And it's just whatever we spent money on.
If it was at a store, if it was a medical expense, if it was taxes,
if it was insurance, if it was something for the kids, if it was food,
blah, blah, blah. It's just, you know, home repairs.
And so I can always kind of look back over the last couple of years and see
what we spent on car repairs or home repairs or what month of that,
you know, bill came, that kind of thing.
(31:19):
And then it just takes those expenses and totals them up, averages them out.
It takes our income, totals it up, averages it out. And we can kind of keep
track of how much we're keeping a surplus or a deficit.
And I think that's the reason why that method I like the most that it's so important
is I have to do a little bit of work, not a lot, but I have to do the work to
categorize it. And it puts it in front of my face.
(31:41):
If we have to say, hey, we're spending a ton of money on Amazon.
Like we need to cut it out, you know, or to say, hey, we're doing okay.
We can afford to splurge at, you know, a store or have some fun,
either way, it benefits you to have that information.
I think although I don't like this way because I can't do the numbers as well,
I do like having a partner who does this because it also really points out things
(32:07):
that pop up during the year, the month, the week, which does happen.
I think he shed light on it a little bit, but a car repair might just pop up
at the month of March, but then, you know, okay, we were able to handle that.
But I like it because then at the end of the year, we're able to say these were
kind of of the miscellaneous things that popped up.
Let's set aside this amount or this kind of money just in case something else pops up.
(32:34):
It's really, really important to me that we always have some money to compensate
for daily life happenings because we have four kids.
So you just never know.
No, you don't. It's always important to save for a rainy day and using data,
in my opinion, of historical data and expectations is how you plan for that.
(32:56):
One common tactic that I saw thrown out there is very popular.
It's called the 50-30-20 rule. It was a guideline for managing your money.
It sort of takes the thought process of the envelope method and puts it into
percentages so you can manage like bank account.
50-30-20 rule. Okay, I find myself doing this one again. I'm on a roll today.
(33:20):
50% after-tax income is for needs.
So like we said in the envelope system, that's your rent, your mortgage,
your utilities, your food, your loan payments, just things you know you need
every month or that have to be paid.
30% goes to once.
That's actually high. I wouldn't have have thought that. That is a very loose
(33:42):
budget, but yeah, we definitely don't spend 30% on once. Some months we probably do.
So once is things like just spending, you know, I decide I'm going to take my
oldest to Target, then we know we're spending, or eating out, treats.
I also feel like maybe holidays could be in that category.
Not that it's a want, but that's always like like extra treats,
(34:06):
you know, if you can do more around the holidays or less, it kind of depends.
And then 20% to saving and paying down debts.
Extra payments could go to your mortgage or your car or your student loan.
So this 50-30-20 rule is good, but it does seem like almost hard for the average person right now.
(34:27):
It does. Yeah. And this kind of goes back to what I was saying before.
It's all about controlling your expenses.
I mean, a budget is pretty simple if you think about it maximize your
income and if you make as much as you're going
to make then you make as much as you're going to make if you can make more figure out
a way to make more so increase your income decrease your
spending where you can and you've got to figure out what you can do is it cutting
(34:49):
apart a car payment and getting a cheaper car is it finding a cheaper rent which
is very hard these days is it cutting down on food you know and those are kind
of the needs so that's all very unlikely but it might be cutting down on the
wants and the splurges and the fun and all all that kind of stuff.
So managing your budget comes down to that is how balanced or out of balance is your budget.
(35:10):
The whole thought process, I know on the 50% at the top category is making the
minimum payments on your loans where you need to.
And then in the savings category, that 20% paying more.
And I know there's a lot of financial gurus out there. We are obviously not any of them.
So seek out financial advice with these specifics. But one of the big things
they always say is to cut out interest.
(35:32):
And there's a lot of different tactics to that. Some people recommend taking
out loans to pay businesses and blah, blah, blah. and other people say have no loans ever.
So even the financial guys are completely torn on this subject.
But one thing they agree on is if you do have debt to pay down the interest,
overpay on it, get rid of it if it's burdening you.
And there's a lot of different things you can do. I know when it comes to a
(35:54):
mortgage, if anyone has a house.
So if you have, let's say like a $300,000 mortgage, $100 extra per month,
it saves you four years in payments.
It saves you $70,000 in interest. If you can afford $250 extra each month,
it cuts out eight years of your mortgage.
That's $152,000 in interest.
(36:15):
So that's a lot of money. And that is really the power of paying down debt.
And that's something that people should look into.
You mentioned before, if you get a raise and then you go out and buy a car,
you are kind of much better off paying down your debt first.
If you got $250 extra each month, put it towards that.
If you don't have a mortgage, then you can put it towards something else,
(36:35):
put it towards a different rent or put it towards.
Bills, credit card debt, that kind of thing. So even Dan just sitting here and
saying these tactics, I think is a conversation that some couples or partners don't have,
which is the reason why there is possibly a lot of conflict around finances,
(36:57):
because obviously your personal beliefs are going to influence what you want to do.
Some people might be fine with a 30-year mortgage.
They know they're going to stay in their house that long.
But again, it's just finding that compromise and that agreement with where you
want to be putting the money.
It is. And it's important to get aligned on it, going back to one of the original
(37:19):
topics, to avoid the conflict.
That was kind of the basis of a lot of the initial discussion was people are
just so misaligned on these things.
I looked into that too. And it's funny because the most common common issues
that arise in terms of finance are pretty obvious, but it's your rent and your mortgage.
And one thing, again, don't trust us, do some research for yourself.
(37:41):
There is a percentage, honestly, just of your income that your rent or your
mortgage should take up.
And if it's over that percent, you're probably going to have a problem.
If it's under that percent, you're going to be okay. And so if you're under
30%, you're killing it. If you're under 40%, it's probably probably okay.
Most banks, if they're going to give you a mortgage, they look for like a 42%
(38:02):
debt to income ratio, anything in the mid to high forties now still get by,
but now you're pushing it.
If your rent is 60% of your income, you're going to come onto some financial hardship.
So again, I take comfort in numbers with your partner, use the numbers and just
say, look, this is where we're falling.
Now, hopefully your rent and mortgage are in line, but this is where where car
payments come in. We are not car people.
(38:24):
I know some people are, but we never have and definitely never will splurge on.
Although we had to be forced to splurge on cars when we had to get basically
a van to house four car seats at once.
Yes, but that was splurging for us.
And I think a lot of people easily would have spent 50% more than we spent or
(38:49):
double what we spent just going big.
That was going big for us. And that was going very big to get into that car.
We knew that our kids are not worth new cars.
No, no, no. I'm not putting our kids in a new car ever. They just are too filthy.
So the last couple of things are spending habits and spending on children,
(39:11):
family members, that kind of thing. So that's always a sensitive subject.
Some people have hobbies. Some people have expensive hobbies.
And you have to balance how much of this is hurting us financially versus I
want to have fun. I want to enjoy life.
I don't want to live my life from a budget that says I can't spend money this month.
So there is a balance there. I definitely don't recommend complete restriction.
(39:34):
You got to enjoy things a little bit. And then the last thing to avoid major
conflict would be planning for the unexpected, which I also brought up earlier.
You just need to always have something, even if it's a credit card with some
money left on it, that will help you if there is some kind of emergency.
Yes, because financial hardship is usually what forces the stress of a financial
(40:01):
disconnect between couples.
It can happen in high earners, it certainly does, but it's usually that financial
hardship that forces people to have these uncomfortable conversations.
Have them before something bad happens. Plan for the unexpected.
That's always good advice.
And yeah, so get aligned with those couple of topics to avoid serious issues.
And also just remember that life happens. So this is doing what you can to the
(40:25):
best of your ability financially, but life happens and you just have to hope
for the best, stink or swim sometimes.
Yeah, so there's a lot to unpack with money.
I think we'll probably wind up having to do a whole nother like discussion on
all sorts of other connected topics because I feel like this is one we could
talk about for a very long time and that seemingly people want to hear about
(40:49):
or hear different perspectives about.
I would say too, if you do have any questions, let us know because we would
like to answer the questions that you may have around finances without being so personal,
but we're not opposed to sharing things that might be helpful to other people,
especially people with children.
(41:10):
That was a big scare of ours starting a family.
And I feel like we were able to maintain that now pretty well.
But again, that started with communication on finances and just aligning with
what we knew needed to be done and needed to be spent.
The need for more control and predictability in our wallets was a big driver
(41:32):
to us getting getting aligned and saying, here's what we're going to agree to spend.
Here's what we're going to agree not to spend that kind of thing and set up
a budget tracking method.
So we can look back over several years and see, here's how we done.
You know, we've been doing all right in this category.
We've been struggling in this category. We've been overdoing it here,
(41:52):
whatever it is, but having that data again is always really important to me.
And the more your expenses balloon with kids or just the unexpected,
the more important that is to kind of reflect back on.
Okay. And then we will just end
this episode with ideas for people to make additional money or save money.
And the first one is figure out what your time is worth. That's right.
(42:15):
There's a pretty simple calculation here. It varies for everybody.
Roughly the average is 2,080 hours per year.
That's how much you work per year. Some people work a lot more.
Some people work a lot less.
That's pretty much just 40 hour weeks over 52 two weeks, but you take that many
hours and what you paid, it's tax season.
So you got your W-2. You can easily figure out this is kind of like your hourly
(42:37):
rate, but don't forget to add on a surcharge.
You know, like you are not an employee of yourself that, you know,
your hourly rate by doing that math, but also your time, your personal time
is worth more than let's say your working time because it's your free times.
Take that into consideration. Some people will add on a little bit.
(42:59):
If they figure out their time is worth $40 an hour, then so be it.
Some people might say it's worth $25 an hour. Some people might say it's worth
$100 an hour, but this is where you can decide this is what my free time is
worth and don't go filling it up with stupid things that don't give you necessarily
the return on investment.
A good example on that is if you're going to try to save $15 or $20 and you're
(43:24):
spending three hours to do it, think about what your time is worth.
It might not be worth it to save that much.
If you're gonna spend three extra hours trying to save $1,000, now it's worth it.
Unless you think your time is worth $400 an hour, it's gonna be worth it.
So this just kind of helps you contextualize where you seek out savings,
where you try to replace experts, where you try to learn something yourself
(43:48):
so you can do it, that kind of thing.
But there's plenty of other ways that you can sort of save a little bit of money
or make a little bit of extra money in your free time?
The one way to save money is through social media.
I see so many posts just offering up things that people probably want out of their house.
We're the same way. We're in a buy nothing group and the amount of things we've
(44:10):
given away is a lot just because we're clearing out, right?
We are trying to. So yeah, that's a good group. I was a little iffy on in the
beginning, but yeah, you just post things for free. You're just looking to get
rid of. And a lot of times you make that connection.
So people kind of offer you things they know in your wheelhouse.
So buy nothing groups, donations, even consignment shops, if you have children.
(44:34):
But I know there's like women and men's consignment shops around too. Also-
Right now is really big. There's a lot of side hustles people are getting into.
They sell their crafts, their services, there's weekend work,
just kind of getting that passive income.
We are, again, no experts in this. We don't really have that time right now.
(44:56):
But if you do think your time is worthwhile to have some kind of side hustle,
then I would definitely say look into to what it will get you.
Yes, definitely. And that is one thing to just figure out. Again,
figure out what your time is worth.
If you're going to make a side hustle and it's just for fun, then it's just for fun.
If you're trying to make money on it, then make sure you're investing your time
(45:19):
correctly and getting back what you want.
But there's a lot of ways out there to kind of boost your income,
even a little bit to cover the little expenses and take some of that pressure off.
So hopefully everybody can take away a little financial tidbit from this and
help further the conversation, you know, between either in their relationships or among their friends.
(45:40):
And we will certainly revisit this topic at least a couple more times. I think so, too.
And we are, again, by no means experts, but we have always kept this communication
open to avoid conflict on this.
So if you have any questions, we will answer them as well. Gladly.
Thanks, everybody. Bye.
All right. Welcome back to the Finding Time podcast.
Hello. We are Finding Time once again. Yes, we are.
We had a little bit of a break there, but we've been working through all of
the topics that people have kind of thrown at us and recommended.
And the one that has consistently come out is our topic of today.
(00:21):
Which is finances. I was a little shocked when he told me we were going to talk about this.
Why were you shocked? Just because we don't necessarily find time to talk about this.
No, no, for sure. But we're not here because we have all the answers.
I think we're just here to talk about it and hopefully ask the right questions.
(00:41):
That's true. And I'm assuming you did some research?
Of course. Okay. And there's even a little quiz during this one. Oh, boy. I love numbers.
Okay. So why don't we start off with, I think, the obvious question, which is,
why do you think when you asked for recommendations of topics and what do you
(01:05):
struggle to find time with your partner about, this one was,
I think, number one or two on your responses.
It came up a couple times. And honestly, I just think it's because it's not
really talked about. out.
I mean, maybe it's talked about amongst couples, but with your friends,
with your family, it is kind of shied away from because it is more of a private topic.
(01:28):
It is. Yeah. I think that's like a big part of it.
I think people are uncomfortable about talking about it.
They've been conditioned to be uncomfortable in talking about it.
I think the one thing that kind of is interesting related to that is that millennials
are actually the most most willing to discuss salaries and all that kind of stuff.
(01:50):
I could see that, though, because I think millennials maybe are the least private
with talking about even relationship things with their friends.
Yes. Yeah, they're fairly public. It was kind of funny when I was trying to
do some background research and looking up topics related to how generations discuss money,
(02:11):
like four different articles that kept talking, kept popping up.
Were how millennials are the most willing to talk about money and mental illnesses.
Basically, they just can't keep anything.
So are they tying mental illness with money? There seemed to be a correlation.
For whatever reason, the articles and it was different websites,
(02:32):
different authors, they like
to just kept saying millennials love talking money and mental illness.
I think part of the reason is because so much of it is transparent. parent.
I mean, millennials obviously are in a very tricky financial place that's been
documented all over the news and things like your student loans,
(02:53):
which was kind of a very heavy millennial issue.
We definitely have talked about with our friends, like, oh, we pay 400, we pay 800, we pay 1200.
Like that is something that has come up and rents and mortgages and sale prices.
I I mean, if anyone buys a house, you can look it up on Zillow.
When people have a rent, a lot of our friends and counterparts will say,
(03:15):
oh, I'm paying $1,800 for rent, $2,400 for rent.
Outside of those two big expenses, you kind of know that.
I mean, you know, they spend money on food, but you don't have to get into the nitty gritty.
You see when they take expensive vacations to wherever they go because they're
documenting all of it. You kind of have a fuel like based on the cars or even
(03:36):
again, our friends will bring up car payments.
Like we've really because of those two things, the mortgage rents and student
loans being transparent.
Everything else is pretty obvious where I feel like older generations didn't
mind talking about their food costs, their car costs.
So now you have the whole picture. There really is no need to hide that information.
(03:58):
I think that's really accurate.
You can honestly just look up so much about what money is spent.
However, I think that's what makes the question of finance so big on people's
minds is because you're seeing maybe what someone just bought on a vacation
or the house they just mortgaged.
(04:20):
And then you're like, but wait, how?
And then that leads to what's their salary, which is where the topic gets really
tricky and honestly not really talked about. Yeah, that's still fairly taboo.
People don't talk about that much.
Although, again, millennials are the most willing to talk about it.
What I thought was interesting as I was trying to think about this and look
(04:43):
some stuff up is there's such a clear divide.
Could not find any articles or anyone who's done this. So I'd love to see someone do this work.
But there's an amount where you stop talking.
Because certain hourly wage jobs you talk about, especially just starting out,
whether you're in high school, college,
(05:04):
you got 15 bucks an hour, 20 bucks an hour, you kind of know some of these employers
who are starting to really advertise it, whether it's warehouse workers, labor workers,
retail workers, you know, 22, 24, whatever, 30 bucks an hour,
you kind of know, and that's just been publicized.
So people are okay talking about it then. Man, you hear people,
(05:25):
especially in that segment, comfortable talking about it to say,
hey, I'm happy to get some overtime.
It's time and a half on 28 bucks. Perfect.
But there just seems to be a point where people stop talking about it,
which I thought was interesting.
I don't know what that point is, but they just stop.
I think too, if someone's saying that to me, I don't want to ask too many questions
(05:48):
either because of that stigma about not talking about it.
So sure, they're throwing out to me, hey, I make $20 an hour,
but I'm not going to dig in more just because you don't know where that line
is to stop talking about finances.
Yeah. Yeah, that's true. I think that's part of the issue and maybe why it gets
lumped in with mental illness so much is people sometimes want to talk about
(06:11):
it because they want help or they want guidance.
They don't want judgment, but they're terrified of that. You don't want to be judged.
That was something I saw a few years ago and I don't want to say it was a trend,
But it was something that was going on because there was such a massive sort
of pay disparity among people our age who were in completely different career fields.
(06:33):
They were all over the country where geography is a huge factor in your income.
And they were kind of just playing an over-under game where you're not going
to dig into what someone makes.
You're not going to pry them for questions, but it was just, give me one shot.
Do you make over-under this amount? out? And then you answered and then it was,
okay, we'll move along with our day and kind of talk money without getting into specifics.
(06:56):
And I thought that was an interesting approach to take without diving all the
way in. And then again, I think a lot of this comes back to trust and judgment.
There's not, I would say a lot of people that we've ever discussed this with,
but I know of a couple of people where I've talked pay pretty specifically.
And it just kind of helps because if you're going through similar career progressions,
if you're going through through similar promotion discussions,
(07:18):
especially people who leave a company and you want to know, was it worth it? Did you get more?
Were you grossly underpaid at your last job or did you get a great package at your new job?
There's a lot of nuance there, especially without getting specifically to the scent.
But if you can find someone who you think is trustworthy and won't judge you,
(07:40):
you can make $100,000 different in pay and still have a good friendship and
a good conversation. I think it really comes down to.
A deep, fair friendship. That's true.
And getting the advice either from someone who is on the same similar finance
track as you or above is really helpful.
(08:02):
But again, I think that was the right word to use, trust.
You want to be able to trust who you're going to bring that up with.
So that way, they're giving you, first of all, the right advice,
but also, you know, hey, I can go to them if I'm really torn on how this will
help us or how this might hinder us.
It will. Yeah. And you get that just that extra input. And it's kind of a double edged sword, too.
(08:25):
It works both ways. If you have a friend in a completely different career situation,
then it's just kind of general advice.
But you can't compare apples to oranges.
However, if you have a friend in the exact same career space, same education,
maybe same age, same same experience and you find out there's a massive pay
gap, it could help one of you in having some different discussions,
(08:47):
but there's a lot to unpack there.
There might be some uncomfortable truths about why you're underpaid and it might
be performance related. It might be bias related.
It could be all sorts of nasty stuff. It also might be market geography.
So there's a lot to unpack there, which is probably why people don't like to talk about it.
And in the big picture of of finances when it comes to, let's say, a budget.
(09:12):
Income is a huge factor, but it's also not the only factor.
So we'll talk about some budgeting tips and things like that in a minute.
But first, how about we hit everybody with some numbers?
So are you ready to play a little bit of a guessing game?
I am. Okay. I only have one question for you here, but we can go over some of
(09:36):
this because I think it helps frame the conversation too in terms of what everyone's
going through and where everybody fits in.
So a big part about the stigma around money and income and class and all that
is just a comparison, right?
Nobody likes to be lesser than they think they are. Nobody likes to be compared to some people.
(09:58):
So as of 2022, what do you think the median household income? Maybe 60,000 to 70,000.
Can I make a gap like that?
Sure. You are close, but wrong. It was 74,000. Okay. That's higher than I thought.
But again, everything is going up.
(10:20):
So maybe that's considered fair as well. Yeah, 2022 is, you know,
there's a lot of wage inflation over the last couple of years that kind of led to that.
So I did not look up what it was in, let's say like 2016, but it was probably notably less.
And so, you know, I think I find comfort in that.
Not everybody is the same way, but I do like a clean, clear kind of structure.
(10:44):
And so I wanted to look up where these classes fall. So I could just understand
what income level are they saying would put you into what class.
This is different than what your net worth level would put you into class.
For example, you might have a lower income because you've retired or you're
semi-retired, but you've got different properties and no debt and all that kind of stuff.
(11:06):
So income and net worth are connected, but they don't necessarily go hand in
hand proportionally. So keep that in mind.
So this is just income based in the U.S. as of 2022.
So right after COVID, which would be kind of interesting.
Yes. All right. So let's start with upper class.
So upper class is anything over $153,000.
(11:28):
Dollars upper middle then starts at
ninety four thousand dollars and goes to
the hundred fifty three thousand and again this is the
household income so it's both salaries or one salary depending on who you have
working in the home middle class is anywhere from fifty eight thousand to ninety
four thousand which then puts lower and lower middle class anywhere under fifty eight 8,000.
(11:55):
Yeah. And I think the cutoff for lower middle was 58, lower was like 37.
And those are pretty broad categories. I don't think there's anything too surprising in there.
They've definitely risen over the last couple of years.
And if you look at someone just graduating college,
let's say, and making somewhere between 20 and $30 an hour or an annual salary,
(12:20):
40 to 60,000, And right off the bat, you're lower, lower middle class.
And again, on top of that, you probably have a ton of student loan debt and
expenses you have to pay back and whatever, unless you're in a great situation. So.
I think that's kind of been the biggest complaint economically in this country
is you're just lower class right off the bat in terms of economic status and
(12:43):
escaping that class is very difficult, you know, unless you have the tools and the opportunities.
I think then that sets the tone because it is hard after you go to school where
to go from there, at least with who we associated with.
Most of us went to college, but then it was what happened after that that may
(13:06):
have really impacted everyone one way or another. other. Yeah.
I mean, what you choose to do. And I think there's an argument to be made,
or at least a point to be made,
that should you really have an expectation at 24 or 25 or 26 years old with
no experience in your first job to be anything other than lower,
(13:28):
lower middle class, you kind of should work your way up.
But it shouldn't be as hard as it is today. I thought I thought that was worth pointing out.
Not for sound. You're showing our age because we were 22 when we graduated college,
starting our first jobs.
Not 24, 25 year olds ending school.
Well, even more so. A 23 year old should not be comfortably middle class.
(13:50):
I just, you know, you gotta work your way up. You gotta earn your keep a little
bit. There's, we are the generation of entitlement.
Stereotypically. So I'd like to push back on that where I can.
I think now the generation before us or after us is now getting that title.
Yeah, they're a bunch of brats.
But they're a little bit smarter because they know, oh, how can we not get these loans?
(14:12):
How can we stay with our parents for a little bit longer?
I have some interesting data on that actually later in the show.
So class warfare, I honestly think this is more of a topic that news people
use and political people use and whatever.
I don't think it's something people in their day-to-day lives care about at all.
(14:33):
It's just a talking point and it's a framework that is pretty flawed in a lot
of different ways if you really look at the number.
And just in case we have any very, very successful listeners,
I thought it was worth pointing out since everybody always harps on like upper
class and top 1%, whatever, that's always a a talking point.
So the upper class household income starts at over 153,000.
(14:56):
To be in the top 10% of earners in America, you have to be making over 175,000.
And then to be in the top 1%, you have to be over 823,000.
So these lines I think are a little silly in some cases.
While they break up the country into thirds for sure, there's a lot of severe
(15:17):
poverty at the bottom them, you know, under $37,000 and there's a lot of wealth
at the top over $175,000 too.
So again, I think it just gets people riled up about nothing when really most
people are just sitting comfortably in the middle with a pretty close spread mathematically.
(15:39):
And that's why income is only part of the battle because it really comes down to other factors.
We kind of talk about this a lot when we're talking about our own finances,
just to get a little bit personal, because I know people want to hear personal
stories, is that you do hope to increase your household income.
(16:00):
But with that, and I don't know why this is so true and it just happens,
your bills start to increase because you want the newer car or the bigger house
or you have four kids in four years.
And that is something that just happens, which probably then,
I don't know, maybe almost levels the playing field in some ways.
(16:22):
Sure, it's easy to get a 10% raise.
And if you go and just loosen the belt a little bit on your grocery budget,
you're eating out, dining out budget and buy a new car, your 10% is gone.
You're back at the same lifestyle. It's back at the same budget.
All right, so finances by the numbers.
(16:44):
Over 20% of couples report finances are their number one challenge.
What do you think about that? I think that's probably pretty accurate.
I think that makes sense. That's probably why when you pose the question to
people, like, what should we talk about?
What do you struggle to find time to talk about? This is it.
You know, people really come back to money because it's such a major stress
(17:07):
point for us and people our age, but all the way on up.
I mean, you know, pretty much any different generation, younger,
older, everyone stresses about money at certain points until they reach a certain comfort level.
And we saw a lot of that growing up. I would say we know a lot of people whose
families went through financial turmoil, who had parents that divorced over
(17:27):
money like we've seen that.
So I think our generation is is specifically sensitive to it. it?
We have been really good. I will pat ourselves on the back.
We are not in that 20% that this is our number one challenge.
But I think that's because right from the start, we knew that this is something
we have to keep the communication lines open.
(17:50):
At least if you don't want to talk about finances with your friends or your
family, you do want to make sure to talk about it with your partner because
essentially your money is being spent together,
especially if you plan on having a family down the road or sharing bills under the same roof.
Exactly. So let's play a little survey game while I was looking this up.
(18:12):
What percent of couples surveyed said they are incompatible with their partner
when it comes to money preference and spending habits?
I don't know. Would it be under 20% because that's like the challenging part?
I want to say it's probably like 35%.
64%. Oh, my goodness. I'm not surprised by that, but that is kind of sad.
(18:36):
It is. It's a shame to kind of think that. Now, incompatible means we just disagree
on money and we let it be, or incompatible meaning this is going to ruin us
are two different situations, but that is a big number, 64%.
Or is it, wow, you don't make enough money. See ya. That sounds very one-sided.
(18:56):
So next up, what generation is the most aligned financially with their partner's views?
I would say maybe the boomers are the ones right before the boomers,
just because it seems like that was more the one income household.
So that just was a system that they had.
(19:18):
That is true. True. They said they are 54%. But still, that's kind of a smaller
number. But yes, 54% aligned.
I didn't see all the results. I'm just going to assume the silent generation,
I think, is the one older than them, was not part of this survey because they don't have email.
I think maybe it's the boomers, too, because there was not much much fluctuation
(19:41):
amongst spending and even salaries.
Right. Unless you were really towards the very bottom or the very top at that
point. It was a lot of middle class. It was.
Yeah. They grew up with the quote unquote American textbook,
you know, do get good at something, whether it was a trade or a job or whatever,
(20:02):
get good at it, get a job with it, have a family, buy your house, get your essentials,
save and spend wisely, and you'll be set for life.
A lot of them have more attractive benefit plans, retirement plans,
much more affordability in terms of cost of living in a lot of cases.
Their home prices, as we've seen, a lot of that generation, if they stuck in
(20:27):
their house and they bought it for $140,000 and now they're selling it for $800,000,
they are making out just in terms of a 30-year or 40-year investment.
So it was a very different playbook than you or I are going to get to enjoy. joy.
So lastly, what generation is the least aligned with their partners?
I mean, is it us at this point just because this is when the divide is starting?
(20:52):
I wouldn't even say, I mean, we're at the younger end of millennials.
So I would say like this younger end of millennials to who's before us,
Gen X or Gen Z. I messed that up.
Gen X is older than us. Gen Z is younger. Okay. So definitely younger millennials and Gen Z.
You're probably right. Right. Millennial came in last at 23% aligned,
(21:15):
which is a surprisingly small number.
I don't know. I'd have to think through that a little bit, but that is,
I mean, that's 75% of millennials are saying they're not really aligned with
their partner. That's a big gap.
We are seeing, and there is no right or wrong way to do this with your partner,
that everything is being more split down the middle, which in our case wouldn't work very well.
(21:38):
Some people are making that work, but I would think maybe that's why the communication
is lessened then because you think as long as I'm handling my side of things,
I don't really need to tell you what's going on otherwise.
That's true. You kind of have your income, your budget, and if you're doing
your part, you think you're fine, but you're kind of missing the big picture.
(21:59):
I could see that. We've seen that work really well for some of our friends,
and we've seen it work not that well. usually when the couples just don't have
good communication skills as it is, or their income is grossly misaligned or something like that.
But that is one approach that we've seen more so out of this generation is you
even, you know, you just keep things separate and it's really,
(22:19):
really interesting to see it, you know, kind of come into action.
But again, it seems like it only works if you're communicating and sharing and
trusting your partner to kind of move things around. But that is, that's one approach.
The last thing from that study that was, you know, kind of interesting in terms
of their findings was they actually reported younger generations find a financial connection is a,
(22:43):
it's a turn on like that. It's an attraction in a partner.
So if somebody offers to split a bill when you're just dating or when you're
more serious or married, having a joint spreadsheet or having a joint bank account,
you know, saving each other's banking login, that kind of thing.
Like it actually was a huge attraction point.
I think think it was 20%. Yeah. 20% of Gen Z and millennials said that is a
(23:05):
top turn on when it comes to finding a partner was financial compatibility and
sharing financial responsibilities.
Is that why you were attracted to me? I would always offer. Sure.
That was one of the many reasons why I was so, so attracted to you.
Although you stashed a lot of money away while I was paying a lot of the bills
(23:27):
when we were first dating, which
in reality came around to Ben and fit me later. So I guess I'm happy.
That's a pro tip. If you're going
on a date, you just expect that you're going to pay or pay half of it.
If you don't, then save that money and that becomes just money then you can use down the line.
(23:48):
You know, eventually a down payment on a house if you go on enough dates.
I don't think that much, but sure.
Okay. So let's talk specifics then. You know, I mentioned this before,
income is part of the battle for sure.
But when it comes to budgeting, there's a couple of different approaches that people can use, right?
(24:10):
And everyone kind of has to find what's comfortable for them.
I wouldn't ever recommend not budgeting or reconciling your money.
But yeah, I mean, there's a few different ways that you can go about managing
your budget and income and expenses.
So there's obviously the bank connected, which is through apps,
which I think you do have to be pretty much invested in your partner at that
(24:32):
point, because that's sharing a lot of personal information.
So I would suggest that if you're married or living together or just very serious about your partner.
Otherwise, I would say that's probably a no. What do you think?
Yeah, don't go giving out your banking info until you're very serious or living
(24:53):
together, married, whatever. It's not something I would take loosely.
We sort of started this with our own cash fund when we were dating right at the end of college.
And then eventually that became our first bank account when we got out of college.
But before college, maybe the end of high school during college,
we used this other method, which was the envelope method.
(25:16):
And we went to school long distance, but whenever we would see each other,
we would bring, I think it was $50 each and we would put it in an envelope.
And then one of us would keep the envelope until the next time we saw each other.
And that envelope is actually what opened up our first bank account.
Yeah, it was. That's what started our first bank account.
(25:37):
And then also, you know, birthdays, holidays, graduation, whatever,
when we had some extra money, we would just throw it in there and we started
building up our own little fund.
So that was our first kind of savings account, the envelope method, I'll say.
This is super old school, but you can kind of take the fundamentals of it and apply it to your life.
(25:57):
I think your grandparents talked
about this once. I know my aunt and uncle had talked to us about this.
And this was back in the olden days when you literally got a check,
you had to go to a physical bank, give that check to them, and then they gave
you cash. And then you could decide if you take all the cash or save some, whatever.
It's just funny to think through like what it was, but that that's literally what life was.
(26:20):
So anyways, you would have envelopes broken up by your needs.
You'd have one labeled for rent or your mortgage.
One for your loans, one for groceries, one for dining out, and then one for fun and savings.
And every time you and your partner got paid and you came home with your cash,
you would split up the money into the envelopes. And you always had to have
(26:41):
enough money in your mortgage envelope to pay the mortgage, obviously.
This was back at a time when you could take cash to a bank to pay your mortgage
or write a check or whatever. But anyways, that's what you would do.
You always wanted to have money in your envelope for groceries,
but you would kind of let it waterfall down the line.
And when you would fill up your fun envelope, you could also do some fun things.
(27:03):
And it's such a simple concept.
I honestly think that's why so many older people through that time also manage
their money well, even if they weren't high earners, because it's so basic. It's so fundamental.
It puts it right in your face. I always really liked that. And that's kind of
where our first envelope came from.
It's interesting how we are finding time to connect these shows.
(27:27):
Because as you were saying that, I was thinking we were talking about learners
in a recent podcast, and we were saying that there's such a thing as hands-on learners.
So for the people who are hands-on learners, but never are able to touch that
cash or that envelope, that could really affect how they are able to budget their money.
(27:47):
Oh, it definitely is. I think there's a huge connection between the absence
of physical money these days and the struggle people have to manage it.
There's obviously inflation, rising costs, wage gap.
There's things that hurt people, but there is just that lack of physical connection
where you're giving someone money.
It definitely pays a toll. And anyone who's bought a movie on their TV,
(28:11):
who's bought something from their phone, who's bought anything digital without
having to collect the money, you know, it's just so much easier and it's just so much less real.
That's so true. We just had this issue with our oldest. He's five.
He bought like the upgraded version on all of our Alexas for music.
And it was simply by like saying, sure, Alexa, I want that.
(28:36):
But he didn't realize, oh, I just charged my dad's debit card or my mom's credit
credit card with all this money.
And that is funny because it's something he doesn't see. He doesn't see cash.
He does see coins because we let him make a piggy bank, but he doesn't see that cash flow.
So even explaining that to kids now makes it harder than maybe the older generation
(29:01):
that had the envelopes because you could really show them, look,
I just spent that and now this is taken out.
Yeah, that's very true too. I think the starting point in terms of financial
management is so much worse today than it was...
Back then too. I think at 18, 20, 22, you were pretty fiscally responsible.
Now kids, you kind of don't learn unless your parents are really on you or until
(29:24):
you get burnt a couple times in your early to mid twenties. And that's, that's unfortunate.
So this is an interesting tip for any parents too.
We'll do a whole episode with like kids and money. Cause I think that's a really
important topic too, but we did have our Alexa locked down so that he shouldn't
have have been able to do that.
However, we had it locked down so he couldn't buy movies and TV episodes because he also did that.
(29:46):
He bought like an episode of Transformers one time.
And so we did lock it down so he couldn't do that, but he was still able to
upgrade our music subscription.
So we got that fixed luckily. But if you have a kid in Alexa,
watch out for these things.
We didn't do the second one because I went from the bank to the envelope,
But the last method was a personal managed method, which is Excel or paper-based.
(30:12):
I don't necessarily do well with numbers, but someone like Dan,
he will put our monthly, yearly even, finances on an Excel sheet and later at
some point. Sometimes we try to do it monthly.
Sometimes the weeks get ahead of us, but we'll look at the spreadsheet and see
maybe where we need to rein it in a little bit or maybe where we can spend a
(30:37):
little bit more if we're trying to upgrade something in our lives.
That's one of my favorite things to do. I like having my own control over it.
I look through all of our accounts.
I pull out all the expenses for a month and then we have our categories and
it's just a big Excel spreadsheet.
You know, our top couple categories are at the top, about the mortgage,
you know, the gas, the utilities, the cars, whatever.
(30:58):
And then it's all alphabetical below that. And it's just whatever we spent money on.
If it was at a store, if it was a medical expense, if it was taxes,
if it was insurance, if it was something for the kids, if it was food,
blah, blah, blah. It's just, you know, home repairs.
And so I can always kind of look back over the last couple of years and see
what we spent on car repairs or home repairs or what month of that,
you know, bill came, that kind of thing.
(31:19):
And then it just takes those expenses and totals them up, averages them out.
It takes our income, totals it up, averages it out. And we can kind of keep
track of how much we're keeping a surplus or a deficit.
And I think that's the reason why that method I like the most that it's so important
is I have to do a little bit of work, not a lot, but I have to do the work to
categorize it. And it puts it in front of my face.
(31:41):
If we have to say, hey, we're spending a ton of money on Amazon.
Like we need to cut it out, you know, or to say, hey, we're doing okay.
We can afford to splurge at, you know, a store or have some fun,
either way, it benefits you to have that information.
I think although I don't like this way because I can't do the numbers as well,
I do like having a partner who does this because it also really points out things
(32:07):
that pop up during the year, the month, the week, which does happen.
I think he shed light on it a little bit, but a car repair might just pop up
at the month of March, but then, you know, okay, we were able to handle that.
But I like it because then at the end of the year, we're able to say these were
kind of of the miscellaneous things that popped up.
Let's set aside this amount or this kind of money just in case something else pops up.
(32:34):
It's really, really important to me that we always have some money to compensate
for daily life happenings because we have four kids.
So you just never know.
No, you don't. It's always important to save for a rainy day and using data,
in my opinion, of historical data and expectations is how you plan for that.
(32:56):
One common tactic that I saw thrown out there is very popular.
It's called the 50-30-20 rule. It was a guideline for managing your money.
It sort of takes the thought process of the envelope method and puts it into
percentages so you can manage like bank account.
50-30-20 rule. Okay, I find myself doing this one again. I'm on a roll today.
(33:20):
50% after-tax income is for needs.
So like we said in the envelope system, that's your rent, your mortgage,
your utilities, your food, your loan payments, just things you know you need
every month or that have to be paid.
30% goes to once.
That's actually high. I wouldn't have have thought that. That is a very loose
(33:42):
budget, but yeah, we definitely don't spend 30% on once. Some months we probably do.
So once is things like just spending, you know, I decide I'm going to take my
oldest to Target, then we know we're spending, or eating out, treats.
I also feel like maybe holidays could be in that category.
Not that it's a want, but that's always like like extra treats,
(34:06):
you know, if you can do more around the holidays or less, it kind of depends.
And then 20% to saving and paying down debts.
Extra payments could go to your mortgage or your car or your student loan.
So this 50-30-20 rule is good, but it does seem like almost hard for the average person right now.
(34:27):
It does. Yeah. And this kind of goes back to what I was saying before.
It's all about controlling your expenses.
I mean, a budget is pretty simple if you think about it maximize your
income and if you make as much as you're going
to make then you make as much as you're going to make if you can make more figure out
a way to make more so increase your income decrease your
spending where you can and you've got to figure out what you can do is it cutting
(34:49):
apart a car payment and getting a cheaper car is it finding a cheaper rent which
is very hard these days is it cutting down on food you know and those are kind
of the needs so that's all very unlikely but it might be cutting down on the
wants and the splurges and the fun and all all that kind of stuff.
So managing your budget comes down to that is how balanced or out of balance is your budget.
(35:10):
The whole thought process, I know on the 50% at the top category is making the
minimum payments on your loans where you need to.
And then in the savings category, that 20% paying more.
And I know there's a lot of financial gurus out there. We are obviously not any of them.
So seek out financial advice with these specifics. But one of the big things
they always say is to cut out interest.
(35:32):
And there's a lot of different tactics to that. Some people recommend taking
out loans to pay businesses and blah, blah, blah. and other people say have no loans ever.
So even the financial guys are completely torn on this subject.
But one thing they agree on is if you do have debt to pay down the interest,
overpay on it, get rid of it if it's burdening you.
And there's a lot of different things you can do. I know when it comes to a
(35:54):
mortgage, if anyone has a house.
So if you have, let's say like a $300,000 mortgage, $100 extra per month,
it saves you four years in payments.
It saves you $70,000 in interest. If you can afford $250 extra each month,
it cuts out eight years of your mortgage.
That's $152,000 in interest.
(36:15):
So that's a lot of money. And that is really the power of paying down debt.
And that's something that people should look into.
You mentioned before, if you get a raise and then you go out and buy a car,
you are kind of much better off paying down your debt first.
If you got $250 extra each month, put it towards that.
If you don't have a mortgage, then you can put it towards something else,
(36:35):
put it towards a different rent or put it towards.
Bills, credit card debt, that kind of thing. So even Dan just sitting here and
saying these tactics, I think is a conversation that some couples or partners don't have,
which is the reason why there is possibly a lot of conflict around finances,
(36:57):
because obviously your personal beliefs are going to influence what you want to do.
Some people might be fine with a 30-year mortgage.
They know they're going to stay in their house that long.
But again, it's just finding that compromise and that agreement with where you
want to be putting the money.
It is. And it's important to get aligned on it, going back to one of the original
(37:19):
topics, to avoid the conflict.
That was kind of the basis of a lot of the initial discussion was people are
just so misaligned on these things.
I looked into that too. And it's funny because the most common common issues
that arise in terms of finance are pretty obvious, but it's your rent and your mortgage.
And one thing, again, don't trust us, do some research for yourself.
(37:41):
There is a percentage, honestly, just of your income that your rent or your
mortgage should take up.
And if it's over that percent, you're probably going to have a problem.
If it's under that percent, you're going to be okay. And so if you're under
30%, you're killing it. If you're under 40%, it's probably probably okay.
Most banks, if they're going to give you a mortgage, they look for like a 42%
(38:02):
debt to income ratio, anything in the mid to high forties now still get by,
but now you're pushing it.
If your rent is 60% of your income, you're going to come onto some financial hardship.
So again, I take comfort in numbers with your partner, use the numbers and just
say, look, this is where we're falling.
Now, hopefully your rent and mortgage are in line, but this is where where car
payments come in. We are not car people.
(38:24):
I know some people are, but we never have and definitely never will splurge on.
Although we had to be forced to splurge on cars when we had to get basically
a van to house four car seats at once.
Yes, but that was splurging for us.
And I think a lot of people easily would have spent 50% more than we spent or
(38:49):
double what we spent just going big.
That was going big for us. And that was going very big to get into that car.
We knew that our kids are not worth new cars.
No, no, no. I'm not putting our kids in a new car ever. They just are too filthy.
So the last couple of things are spending habits and spending on children,
(39:11):
family members, that kind of thing. So that's always a sensitive subject.
Some people have hobbies. Some people have expensive hobbies.
And you have to balance how much of this is hurting us financially versus I
want to have fun. I want to enjoy life.
I don't want to live my life from a budget that says I can't spend money this month.
So there is a balance there. I definitely don't recommend complete restriction.
(39:34):
You got to enjoy things a little bit. And then the last thing to avoid major
conflict would be planning for the unexpected, which I also brought up earlier.
You just need to always have something, even if it's a credit card with some
money left on it, that will help you if there is some kind of emergency.
Yes, because financial hardship is usually what forces the stress of a financial
(40:01):
disconnect between couples.
It can happen in high earners, it certainly does, but it's usually that financial
hardship that forces people to have these uncomfortable conversations.
Have them before something bad happens. Plan for the unexpected.
That's always good advice.
And yeah, so get aligned with those couple of topics to avoid serious issues.
And also just remember that life happens. So this is doing what you can to the
(40:25):
best of your ability financially, but life happens and you just have to hope
for the best, stink or swim sometimes.
Yeah, so there's a lot to unpack with money.
I think we'll probably wind up having to do a whole nother like discussion on
all sorts of other connected topics because I feel like this is one we could
talk about for a very long time and that seemingly people want to hear about
(40:49):
or hear different perspectives about.
I would say too, if you do have any questions, let us know because we would
like to answer the questions that you may have around finances without being so personal,
but we're not opposed to sharing things that might be helpful to other people,
especially people with children.
(41:10):
That was a big scare of ours starting a family.
And I feel like we were able to maintain that now pretty well.
But again, that started with communication on finances and just aligning with
what we knew needed to be done and needed to be spent.
The need for more control and predictability in our wallets was a big driver
(41:32):
to us getting getting aligned and saying, here's what we're going to agree to spend.
Here's what we're going to agree not to spend that kind of thing and set up
a budget tracking method.
So we can look back over several years and see, here's how we done.
You know, we've been doing all right in this category.
We've been struggling in this category. We've been overdoing it here,
(41:52):
whatever it is, but having that data again is always really important to me.
And the more your expenses balloon with kids or just the unexpected,
the more important that is to kind of reflect back on.
Okay. And then we will just end
this episode with ideas for people to make additional money or save money.
And the first one is figure out what your time is worth. That's right.
(42:15):
There's a pretty simple calculation here. It varies for everybody.
Roughly the average is 2,080 hours per year.
That's how much you work per year. Some people work a lot more.
Some people work a lot less.
That's pretty much just 40 hour weeks over 52 two weeks, but you take that many
hours and what you paid, it's tax season.
So you got your W-2. You can easily figure out this is kind of like your hourly
(42:37):
rate, but don't forget to add on a surcharge.
You know, like you are not an employee of yourself that, you know,
your hourly rate by doing that math, but also your time, your personal time
is worth more than let's say your working time because it's your free times.
Take that into consideration. Some people will add on a little bit.
(42:59):
If they figure out their time is worth $40 an hour, then so be it.
Some people might say it's worth $25 an hour. Some people might say it's worth
$100 an hour, but this is where you can decide this is what my free time is
worth and don't go filling it up with stupid things that don't give you necessarily
the return on investment.
A good example on that is if you're going to try to save $15 or $20 and you're
(43:24):
spending three hours to do it, think about what your time is worth.
It might not be worth it to save that much.
If you're gonna spend three extra hours trying to save $1,000, now it's worth it.
Unless you think your time is worth $400 an hour, it's gonna be worth it.
So this just kind of helps you contextualize where you seek out savings,
where you try to replace experts, where you try to learn something yourself
(43:48):
so you can do it, that kind of thing.
But there's plenty of other ways that you can sort of save a little bit of money
or make a little bit of extra money in your free time?
The one way to save money is through social media.
I see so many posts just offering up things that people probably want out of their house.
We're the same way. We're in a buy nothing group and the amount of things we've
(44:10):
given away is a lot just because we're clearing out, right?
We are trying to. So yeah, that's a good group. I was a little iffy on in the
beginning, but yeah, you just post things for free. You're just looking to get
rid of. And a lot of times you make that connection.
So people kind of offer you things they know in your wheelhouse.
So buy nothing groups, donations, even consignment shops, if you have children.
(44:34):
But I know there's like women and men's consignment shops around too. Also-
Right now is really big. There's a lot of side hustles people are getting into.
They sell their crafts, their services, there's weekend work,
just kind of getting that passive income.
We are, again, no experts in this. We don't really have that time right now.
(44:56):
But if you do think your time is worthwhile to have some kind of side hustle,
then I would definitely say look into to what it will get you.
Yes, definitely. And that is one thing to just figure out. Again,
figure out what your time is worth.
If you're going to make a side hustle and it's just for fun, then it's just for fun.
If you're trying to make money on it, then make sure you're investing your time
(45:19):
correctly and getting back what you want.
But there's a lot of ways out there to kind of boost your income,
even a little bit to cover the little expenses and take some of that pressure off.
So hopefully everybody can take away a little financial tidbit from this and
help further the conversation, you know, between either in their relationships or among their friends.
(45:40):
And we will certainly revisit this topic at least a couple more times. I think so, too.
And we are, again, by no means experts, but we have always kept this communication
open to avoid conflict on this.
So if you have any questions, we will answer them as well. Gladly.
Thanks, everybody. Bye.
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