March 20, 2024 • 32 mins
On this episode we had a ton of fun covering finances this is the 102 version of the episode. We covered CSP not a budget. This is borrowed from Ramit the CSP is conscious spending plan.
Net worth on topline just to have it.
Fixed Cost -50% to 60% of income (rent, insurance, utilities, fee's etc)
Investment -10% (Roth, 401K)
Savings -5% to 10% (trips, emergencies, gifts, weddings)
Guilt Free 20% to 30% have fun do what you want
Reach out to us give us insight!
Find our contact info on our website: https://adultingdecrypted.com/contact/
Learn more from Ramit Sethi through his website:
https://www.iwillteachyoutoberich.com/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Adulting Decrypted.
We are your hosts.
I'm Gene, and I'm starting myfirst year of college.
I'm Ashton.
I'm a music performer, composer,and educator.
I'm Gene, a high school senior.
I'm Roscoe, the dad.
Those are my three sons, andthis is Adulting Decrypted,
where we discuss ways to becomeadults and the things we need to
(00:22):
know to be successful in life.
Dad (00:24):
Welcome to Finance 102.
For a quick recap for thelistener.
What did we talk about last timewhen we were doing the financial
episode?
What did we talk about?
Gideon (00:33):
Talked about net worth.
Dad (00:35):
Perfect.
Love it.
Yep.
We talked about net worth.
Anything else you guys gleanedfrom that conversation?
Gene (00:39):
Financially secure versus financially independent.
Dad (00:43):
Perfect.
listener, have you thought moreabout being financial
independent versus financiallysecure?
Have you guys thought any moreabout it since our last meeting?
A little bit.
It's crossed my mind made anydecisions or any aha moments
from it.
Not yet Okay fair.
So I thought a lot about it, thefinancial independence and I
think I ran it past you ashtonThe other day it was fire
(01:05):
financially independent retireearly And you heard fired and
you're like, you got fired.
No, no, I'm trying to get fire.
Ashton (01:11):
I heard the deans.
I was trying to figure out wherethat went in the I was gonna say
anagram.
That's not the right thing.
What's the word for when there'slots of letters and it makes
words acronym acronym.
Yep.
Dad (01:21):
thank you.
good point.
financially independent for memeans that my investments are
making enough money that I havenot him to work.
For somebody else that I get todecide how I want to spend my
day.
It doesn't mean that I'm goingto stop working, right?
I joked with you guys all thetime that I'm going to work
until I'm dead.
And truly I love what I do.
I love podcasting.
if we can figure out how tomonetize this, I'll do it
(01:41):
forever.
If I can figure out how toteach, I would do it forever.
It's just, it's in my blood.
So for me, financialindependence means that, right
now I'm okay doing RV trips orliving up at the cabin and
renting out the house.
You know, I'm okay with a littlebit less of a lifestyle.
I'm actually fine not eating outmore than Once or twice a month,
I don't need those lavishvacations, but that's for me mom
(02:03):
and I had an interestingconversation She said for her
it'd be more travel.
She'd like to go do some notluxury travel What did we just
do recently mexico?
Did we do that on a budget?
Do you guys think or did we goall out?
Gideon (02:15):
It felt all out
Dad (02:16):
Interesting.
Ashton (02:17):
it was definitely on a budget for sure.
Yep.
I definitely know there wasplenty of sky a mile points and
other.
Okay.
Gideon (02:24):
Okay.
I know there were money savinghappening and backing up on
other things, but at the sametime, We did a lot.
Dad (02:32):
We did do a lot.
And that's one thing that momand I pride ourselves on.
Like we did a big New York trip.
We were gone for almost 30 days.
Back actually, I think you were16.
So that's been what, nine years,nine years ago.
We did that.
And we did almost 30 days and I,bragged to everybody that would
listen, how cheap I did thattrip.
You know, I was like, we weregone for this long and I spent
8, 238.
(02:53):
sounds like a lot, but it was 30days.
How many times did we eat out?
Hardly at all.
What did you guys joke about?
If I have to eat one more, what?
You're gonna, you're gonna hitsomebody.
You guys remember these?
Gideon (03:03):
Peanut butter and jelly sandwich.
Dad (03:04):
Peanut butter and jelly sandwiches, that's right.
A mom normally made them when Iwas driving 90 miles an hour
down the road.
And she's in the middle seatwith the seat down making you
guys all sandwiches.
We probably ate out three timesat Chicago was one of them cause
it was a big deal.
Just like in Mexico, we only ateout once, but, for me,
financially independent isn'tluxury, but it might be for you,
(03:25):
right?
You guys need to experience whatyou want to in your life.
I just had a person that workedfor me say, They make about 15
an hour.
And they were talking aboutgoing on a 6, 000 vacation this
summer.
Do you think I belittled them?
Gideon (03:36):
No,
Dad (03:36):
no, not at all.
Good for them.
If that's how they want to spendtheir money, more power to them
as long as they've covered thebasics.
And that's what we're going totalk about today.
A lot of times we talk aboutbudgets right out of the chute.
So financially independent, keepthinking about that, what that
means to you.
And as well as financial secure,there's a form that I've stolen
from a, I don't know that it'sstolen.
He sent it to me.
Rameed.
he'd.
(03:57):
Runs, I'll teach you to be richand a shout out to him That's
where I'm going to get a lot ofmy information from.
And then I'm going to couple it,sprinkle in some Dave Ramsey or
maybe some, Gordon Ramsay anyGordon Ramsay Gordon sprinkles
and some stuff in his food.
There you
Gene (04:10):
go I don't know if you want to take all your eating
habits from a Gordon Ramsaycookbook If you want to keep
your pocketbook in check, butagain, that's up to you that's
your choice of financiallyindependent Whatever makes you
feel good.
Honestly at this point.
Dad (04:22):
I like that gene.
I like that.
That's a good point and AshtonThat's fair.
As long as you made the decisionand that's why this conscious
spending plan at the very bottomgives us guilt free money.
And so to your point, Ashton,Hey, if you feel good about it,
spend the money on it, but weneed to take a step back and
look at what's in the first fewlines and I'll share this.
It's obviously a resource thathe's willing to share and put
out there.
the first thing you do is youlook at your net worth.
(04:45):
We discussed our net where dideverybody get a chance to go
look at their net worth?
And where they were at.
How did we calculate net worthjust to remind everybody
Gideon (04:52):
You calculate your assets like how much that is
your investments your savingsand then take that number And
minus out your debt.
Dad (05:00):
What kind of debt
Gideon (05:01):
like student loans credit card debt mortgage, etc
Dad (05:04):
All that We live in utah.
So more than likely you're gonnahave a car, But like we see up
there at the asset.
He even puts cars and asset onhis account Where other people
would debate that but it'sreally if you've paid for it
It's an asset if you're stillpaying on it There's gonna be a
little bit of an asset and maybea little bit of liability if you
actually owe more than yourcar's worth, you want to do
different kinds of insurance.
And we've talked about that.
(05:25):
So we'll talk more aboutinsurance, maybe in like
financial one Oh five and whatinsurance means.
But in one Oh two, we're goingto just spend a lot about this
conscious spending plan.
What's the big dreaded word thata lot of people use is a budget,
How many times have I said youneed to budget your money?
If you guys were to guess.
Have I ever shared that with youguys?
Have I ever talked budget?
Yeah.
Oh, once or twice.
(05:45):
I'd say maybe, maybe threetimes, maybe seven.
Okay.
So here's the question.
45 get in.
Do you have an active budget?
Gideon (05:53):
No, sir.
Dad (05:53):
Gene, do you have an active budget?
Nope.
So obviously my teaching isn'tworking.
Ashton, budget or no?
Funnily enough,
Ashton (06:01):
Kind of, but I have a very specific budget for other
programs that I run.
I was thinking on the irony ofme having budgets that I'm
following very diligently forprograms and not for myself.
Thought there was some ironythere.
Dad (06:12):
Oh, that is actually kind of interesting, isn't it?
When you're held accountable tosomebody else to actually
account for the money, you'remore conscious with it.
We talked the other night.
I thought it was veryinteresting that you said, well,
I need to make sure that I'vegot everybody else paid first
and you're very line itemed onit versus with your personal.
Sometimes you might not think,as detailed as that.
Right?
So this is a little bitdifferent.
(06:34):
Mom and I have budgeted andthere's, multiple ways you can
do a budget, There's theenvelope method.
there's the, Dave Ramsey likesthe zero sum budget.
you get to the bottom of yourlist and there's no money left
over.
But the reality is, is most ofus struggle with doing a budget
like that.
So when I was listening to Rameetalk to some of his clients,
he's got a great podcast.
I'll teach you to be rich.
(06:55):
He's got some YouTube videos.
They're a lot of fun.
Get more education there.
He's got a lot of information,but what I enjoyed about it is
that he actually said, look,most of us don't budget.
we hate the word budget.
And so what he's challenged usto do is to think of it
different and think of it as aconscious spending plan.
So instead of some budget thatyou have to hold yourself
accountable, you're saying, Hey,this is what I've decided.
(07:15):
He was studied at Stanford.
Is that a popular school?
Big school.
Stanford is a big school.
Yeah, and he was actuallystudying psychology of all
things and then he realized thatpeople have this weird
Psychology with money.
I was sharing today withsomebody that when you grow up
very poor there's threedifferent ways to think about
money They're really not notmoney But poverty has a very
distinct way of thinking aboutmoney and if you think about it
(07:37):
in the way you eat is theeasiest way for me to think of
it if you're in poverty, whatquestion do you think's being
asked?
go ahead might have shared this
Gene (07:44):
is there enough is there
Dad (07:45):
enough right if you're middle class, what's the
conversation taste?
How does it taste and then ifyou're?
super wealthy How does it look?
That's right.
You know, and that's why I thinkbuffets are kind of fun to go in
there and look at the waydifferent people respond and how
they act at a buffet.
and it leads you to understandthat concept a little bit
better.
think of this conscious spendingplan and saying, Hey, I'm going
(08:06):
to make a decision.
I'm going to be conscious aboutwhat I'm buying because at the
very end of this.
plan there's what's called guiltfree spending.
How many times have we hearddon't buy the avocado toast or
don't buy rock stars?
Don't buy don't don't don't oryou just need to give up and
then we insert that favoritething I should I probably said
that about your audio gear.
Hey, you don't need to buyanother Would be true, but it's
(08:29):
not my place as long as you'vecovered your conscious spending
plan if that's what you'vedecided if that's your guilt
free money the difference isthat's a business Expense for
you, so up there might be anasset.
I think you could list some ofyour Equipment is an asset when
you think yeah, I think so.
Yeah, cuz it's got some value Icould sell it and get me some
money Back from it.
Yeah.
So the first thing you got tocome up with is how much do you
(08:50):
make a month?
Now this one's a little bitweird for how many of us sitting
around this table?
No for me in particularGideon's, you know much make
your month.
Gideon (08:58):
No, I don't
Dad (08:59):
Ashton and
Gideon (09:00):
Wait, I do zero zero
Dad (09:04):
times zero is still zero.
So gross monthly income.
So this would be all your incomebefore taxes added up.
So Ashton, for you, you couldsit down and look at what you
made this month, Cause you'regoing to go out as a matter of
fact, tonight, you're going togo hang out with cousin Paul.
And you could add that up.
You could add up all thedifferent ways I make money.
Now, the hard part is, with youbeing in the gig economy and
(09:24):
then junior in school, getting,you're still in school, you
might want to look at that andsay, okay, how much do I make
each month?
And you say, okay, I reallydon't know.
So then what you need to comedown to here, start looking at
your fixed.
Costs like what stuff has tocost and this is why I challenge
us as a gig economy guys to dothis math and Almost set goals
(09:46):
for us.
How much do we need to earn sothat these work out?
Right.
So the fixed cost rent mortgageHow much is everybody's rent?
Gideon?
Gideon (09:55):
My rent is zero dollars.
Yeah, your parents are prettynice.
Dad (09:58):
Gene?
Gene (09:59):
my rent for next semester is going to be like 1, 700.
Dad (10:03):
Yeah, 1, 700, but it's divided by four months, right?
So you could actually break itup by month.
But you're right.
It is all in one chunk.
So if I were you, I would putthat in, divide it by the, four
months that you're going to workover the summer and put that in.
It was a number because you'regoing to work over the summer to
earn enough money.
You say, okay, how much do Ineed to cover that rent?
My rent, it's a mortgage, It's1350.
(10:25):
So I know what my mortgage is.
Ironically though, then you getinto the variables because my
mortgage isn't held at atraditional mortgage company, so
I don't have my property taxesor my homeowner taxes put in
there, but most people do.
They put in property taxes andhomeowners insurance in there.
So I would add mine back inthere and say, okay.
My mortgage is 1, 300 a month,but my taxes and some of these
(10:47):
other things are about threegrand.
I'm going to add that but dividethat out by 12 and I'm going to
put an extra 400 in there.
So I'm going to put like 1, 800a month in a mortgage.
Does that make sense?
Yeah.
It's all part of what it coststo live in a house that would
normally be tied to a mortgageutilities.
What are some of the utilitiesthat you covered?
You cover any utilities, Gene?
Gene (11:06):
yeah, I have to pay for electric and heating but it's
split amongst the four peoplethat live there.
Ashton (11:12):
Yeah, you can get electric, gas internet, it's a
big one, water, oh yeah, water,I was like, are you playing the
piano?
Gideon was trying to give mesigns.
Gideon (11:20):
Yeah, I was trying to give you water signs.
Ashton (11:22):
That was better, I would have gotten that one.
Thank you.
He did waterbending.
Dad (11:25):
Internet.
Do you have to pay for internetseparate from where you're at,
Ashton, or is that all includedin your utilities?
Separate?
Yeah.
Ashton (11:31):
Yes.
Dad (11:32):
The internet's separate.
Yeah.
so that's stuff to be aware of,right?
And you'd list all that inthere.
And this is what we call fixedcost.
Does it change very much?
Sometimes my electricity billgoes down a little bit, but not
much.
And if I know that I'm going tohave some peak, when would I
peak on my electric bill inUtah?
Gideon (11:47):
In the winter.
Dad (11:48):
Or summer.
Or summer.
Yeah.
I don't, I really peak in thesummer because we run our AC.
In the winter because our,heater doesn't draw as much.
But different Gideon up at thecabin.
I never run the AC up at thecabin.
Oh, wait, cause we don't have ACup at the cabin, but we do have
heater use when you don't haveit, but we do have electric
heaters.
And so I have to add that there.
So I just take my, I'd look atmy utility bill, and then divide
(12:11):
it by 12.
If I had to multiply it, youknow, look at my biggest months.
Nice thing is you can pull up astatement from your bank and
just kind of do the math on it.
Insurance, Is that mandatory?
Actually, not you and I weredebating this the other day.
I dislike the principle, butyes.
Yeah.
In order to drive in Utah, it'sa mandatory that you have
insurance for your car, butthere's also other there's
medical, And the home andrenters is down here and that
(12:34):
probably makes more sense.
I said, maybe I'll put mymortgage, but maybe I'll put it
down there because it doesfluctuate a little bit.
My mortgage wouldn't.
And you guys might need to haverenter's insurance.
Do you have renter's insurancewhere you're at?
Gene
Gene (12:45):
I haven't set anything up, so I don't think so.
Dad (12:46):
And really all you've got is a computer down there.
So if it burns up, you're like,okay, big deal.
Right.
Ashton (12:51):
I've done renter's insurance.
You had to
Dad (12:53):
have renter's insurance because of the value of your
gear.
Ashton (12:55):
Well, that, and it was required by the landlord.
There you go.
So kind of dual, dual purposethere.
Dad (13:00):
Yeah.
You put in your car payment orany transportation.
like we talked about here inUtah, you have a car payment.
You'd also put in transportationif you lived in a big city, you
know, you're taking the bus,you're taking the subway, you're
taking an uber groceries.
This one's a hard one.
How much do you spend a month ongroceries?
Well, if it were me, thequickest way to find what I
spent last month is where do youthink I see that at?
Gene (13:23):
an online banking app.
Dad (13:25):
Yeah, my banking app, but it shows me right now on food
and dining.
I spent 770 I think that's alittle bit high So I might go
and I might look at the month Imight open up and look at all
transactions because i'm notgoing to do this every month
This is to do it one time So i'mgoing to spend a couple hours on
this Right this one time.
(13:45):
So I'm gonna go do the math andsay, okay, really is it 769 or
768 or whatever it was?
It might be it might be 805.
I don't I don't know until I tryit Oh debt payments You need to
put your debt payments in there.
Yep.
What what are you paying on yourmonthly debts?
Then close if that's a if that'sa category you spend in gene.
How much do you spend on yourclothes?
Gene (14:05):
I have not spent money on clothes since I've moved out.
Dad (14:09):
so some people are going to buy clothes a lot.
That's their thing, but otherpeople won't.
Right.
So this clothes to me is one ofthose.
Holding areas.
If you have something that youlike to spend money on phone, I
love phone.
That's in there because most ofus have separate from our cell
phone plan.
We are making payments on sometype of a phone, right?
Or something.
Subscriptions.
This is where you'd put inDisney plus for me what did I
(14:31):
just get rid of last month?
Ashton (14:33):
Prime.
I think, yeah.
Amazon
Dad (14:34):
prime said, you know what?
You guys can raise the pricesand start putting ads on, and
I'm not going to play.
So I took my 150 they wanted tocharge me and I'm going to put
it to work somewhere else.
That being said, I still boughtenough crap and I just bought it
all at one time.
So I still got free shipping.
It's just here four days laterand I'm, not bugged at all.
It works fine for me.
But you know, so you'd stillhave other stuff in there, maybe
(14:55):
a gym membership and stuff likethat.
miscellaneous.
I love this.
I love that, that he put this inhere because Ramit has told all
of his people go through thereand that those brown boxes and
put all your different lineitems in there and then add 15
to 20 percent because you missedsomething.
You didn't think about somethingthat you normally spend money on
and then you'd come up with thatfixed cost total.
(15:16):
So any questions on the fixedcost?
Gene (15:18):
Yeah, so part of that 15 percent would that include gas
or like bus tokens if that's onesomething that someone would
use?
Dad (15:26):
I would actually put that up maybe under my
transportation, maybe, maybeit's not car payment.
Maybe it's up in utilities.
The reason why I wouldn't put itin that 15%, I think that 15
percent is saying, Hey, I don't,I don't know exactly what it's
going to be.
And one thing I liked that Ramitalked about is that we're doing
these all as a percentage.
and the fixed cost as apercentage of your take home pay
(15:48):
should be somewhere between 50and 60 percent of your take home
pay is all your fixed costsshould be.
And you know, what's cool aboutthat for me as I'm thinking of
that now, for those of us whoare on variable incomes, we can
do the math off of this and say,my fixed costs are to keep it
real simple.
So, if my fixed expenses are 3,000 and I need 50 percent of it
(16:09):
in that fixed cost category, andI say my fixed costs are 3, 000.
It's like 6, 000.
Yeah, 6, 000 would be a realeasy number to say, okay, I got
to figure out how to make thatevery month.
I mean, it's almost, it's almosttoo simple.
It reminds me of, and Gideon, Ithink you mentioned it do you
want to share your analogy ofwhat, what you thought it
reminded you of?
(16:30):
The budget and, and yeah, theconscious spending plan.
Gideon (16:33):
Just as we were talking, I thought about all the
correlations a budget had to adiet.
Cause we talked about like thenegative correlation they're
involved, Like how we see abudget is like negative, I
guess.
And a lot of people see diets asnegative when really it's
dissecting it.
Cause I do a lot of healthstuff.
Like I really like fitness andhealth and losing weight.
(16:54):
Isn't about a diet.
It's about counting yourcalories and just decreasing the
amount of calories that youintake.
And so a budget's the same thingin my brain, just calculating
all the money that you have, allthe calories.
How much you need to spend, howmuch you make, like how much
calories you need to eat tosurvive versus how many are
excess.
and I think it's just aninteresting correlation.
Dad (17:16):
Yeah, I like that.
And I liked that you tied it tobudgets.
Now I'm going to take it onestep further and say, how would
it correlate to a consciousspending plan?
Cause that's one thing.
This isn't, this isn't a budget.
this is really a consciousspending plan, meaning you're
going to decide.
Gideon (17:30):
Yeah, for sure.
And a lot of people that wewould look at as fit are not on
diets, It's a lifestyle.
Dad (17:37):
They made a conscious decision.
Gideon (17:39):
Yeah.
to the point where a consciousdecision to the point where they
don't really have to worry asmuch as a budget would.
Dad (17:46):
Correct.
Because you already know, likeyou already know, Gideon, that
you're going to have so many,and you're a great example of
it, is say, I'm going to havethis much protein in the
morning, I'm kind of know wheremy protein load is, I know where
I need to eat these two or threemeals, and you're like, nah,
I've already had sweets today.
Where a guy like me would haveto look at that and say, okay,
I've eaten, I can't remember, Iate two eggs for breakfast, you
(18:08):
know, I'd really try and thinkthrough that.
But if I had a consciousdecision and say, look, my goal
is to have a calorie deficit.
I would be more conscious of myeating, versus I'm going to
track everything I do.
Cause for me, it hasn't beensustainable.
I've done a calorie.
I've done a budget.
I get off them because they'rehard.
They're hard to keep track of.
That's what I'm hoping.
This is easier.
So that you have one number thatyou have to review maybe once
(18:30):
every six months, not everymonth.
You should be able to open upthat app that we talked about
for us, it's America first.
It's where we bank.
I'm not saying it's the best.
I'm just saying it's there.
put it in month, categorize itonce and don't think about it.
Hey, this is Verizon.
a, utility.
Boom.
I don't care.
Call it a phone.
Boom.
I don't care.
(18:50):
You know, whatever you call it,just call it that move on.
I'm going to buy a computer insix months I need to have a
conscious spending plan for it.
You know, where am I going toput that?
You know, I need a new phone insix months.
Where am I going to put that onthis line item?
Boom.
I don't think.
Cool.
So that should be about 50, 60percent of it.
And then the next one is,Finance 101 investing invest 10
percent of your take home.
(19:11):
This one's going to be hard,especially when you don't have a
take home.
So you actually have to think ofit different.
Oh, one more thing I'd put on myfixed expense for me would be
Gideon's mission.
You know, I'd put it up on myfixed expense for at least two
years, just so I know that it'sthere.
Cause I don't have to pay it outall at one time.
Then I'd also put charitablegivings because I know that I'm
going to do A tithing, and soI'd put that up in my fixed
(19:33):
because I just know it's goingto happen.
And then the next one is theinvestment and I'm going to take
10 percent of my take home pay.
And so what they're asking youis to look back over that chart
and if I need to make 6, 000every month, I'm going to take
600 of that and put it at a posttax retirement.
Makes sense.
We'll talk about what you dowith your investments.
This is an emergency fund.
This is.
(19:53):
Truly, this is longterm.
I'm going to touch it when I'm70 and I'm not going to touch it
until then.
And that's what it's for.
And then stocks, if you want toplay the market and you know, I
want to take a percentage ofthat.
I'm going to put a little bit instocks, I'm going to put 8
percent in my retirement.
I'm going to put 2 percent instocks, and then there's a slot
to add your own.
(20:13):
We're going to talk like that inone Oh three about what we do
with our investments when we'reready.
Now what?
just think of it there.
The next one is your savings.
This is where you'd save forstuff like a vacation.
And Ramit actually suggests thatyou actually have a different
account that says Hawaii andthat every month you're just
routing your paycheck money andsome of it goes into your
checking account to cover your50 to 60 percent a percentage of
(20:36):
it goes into vacation.
You don't even think about it.
It's an auto withdrawal thrownin here.
So much of it is thrown ingifts, cause it's, big and
different cultures to give giftslongterm emergency fund, to say,
Hey, I want to be at that sixmonths.
I want to be financially secure.
I'm going to divert some of themoney to there.
in my book, where we're at rightnow, I'd say, Hey, I don't need
to fund that.
So I probably wouldn't throw anymoney in that.
(20:58):
I might throw a little bit morein vacation or gifts.
or maybe even reduce just mylittle bit of take home.
And then he has add your own.
What are some things that youguys might add in the add your
own something that you want tosave for for me right now?
I think cars are great.
Ashton (21:11):
I'd probably say gear for me.
Dad (21:13):
Yeah.
Your next big purchase, right?
You're like, Hey, I know if Idon't set it aside, I'm going to
be frustrated.
And at some point in time, I'mjust going to throw down the
credit card and buy that 3, 000unit because now I need it.
I don't have a choice versus Icould start saving up to it
slowly.
I like that.
Get anything on your thoughts?
Gideon (21:29):
Yeah.
As you're talking, I've beenthinking about wanting to get a
bass guitar, but at the sametime, I'm not making money, so I
struggle spending money.
So when I start making money, Ithought about, putting a little
bit every time I make some to.
Cause I don't need it.
Right.
Dad (21:43):
Yeah.
And the other thing I'd like tosee you put in there is your van
savings, to say, Hey, I'm goingto save for this van, you know,
for me, I'm, putting a truck,I'm going to put a truck in mine
because.
My truck's got 120, 000 miles.
It's not going to last muchlonger.
Cybertruck's hitting the marketsoon and not going to buy it.
I changed my mind.
We can talk more about thatlater, but, but no, I've changed
my mind.
then they're saying go onvacations.
(22:04):
and honestly, that's what we didfor her Cabo.
I think I already said that, butfor Cabo mom and I set that
money aside way early.
I didn't want to spend it.
I wanted to back out like Ishared, but you know, I'm glad
we did it.
And I'm glad that you guysdidn't think it was on a budget
cause it was super on a budget.
And then the last one, and thisone surprises me.
has everybody got theirconscious spending plan pulled
up?
Yep.
What is it?
Guilt free spending.
(22:26):
What does that really mean?
Make it rain.
Make it rain, baby.
And this is where you put inthose.
I don't care if 20, at thatpoint in time, if you've already
invested 10%, 12 to 15% of your,he says investment's only 10.
But if, you're behind like I am,I'm gonna change that.
I'm gonna go like 15% and I knowthat I'm gonna reduce my
guilt-free spending down to that20%.
(22:46):
I'm okay with it.
But that's the stuff where I'mgoing, Hey, let's buy pizza
tonight.
Let's buy ice cream.
that's not gonna be part of mynormal food budget.
He talks about, people who arespending, 2, 000 on a dinner.
That's not me, but I can't faultanybody that's doing that.
You know, if they're followingthis method, more power to them
because it truly is guilt freeand that's a hard concept I've
(23:07):
trained you guys all to feel alittle bit guilty about spending
money, whether you want to admitit or not, I've trained you to
do that.
And it wasn't intentional.
It came from my upbringing, Iwould go there and I have to
look at the price of something.
And my mom, who's ever beenshopping with, grandma Allen.
I have.
What was it like?
I don't know if she's changed.
Here's the question.
Has she ever, Grandma, we loveyou.
(23:28):
I love you.
You're my favorite mom.
You're the best mom I could everask for.
she listens to all of these too.
I know.
I know.
She's gonna text me and eitherbe real mad at me or real happy
at me.
That's fair.
But did she, have you been on ashopping trip where she loads up
her cart and then leaves it?
No.
No, I haven't.
Yeah, I've been there where shedoes that because she starts
feeling guilty about spendingthe money.
Ashton (23:50):
Yeah,
Dad (23:50):
she's put the the stuff in there that she decided that she
didn't need and I've done it Youguys have seen me do it.
I'm like, oh, okay I load thisup and then I'm like as I get
closer to the cash register.
Gideon (24:01):
Have you noticed it?
Well, I have a pretty funnystory We were literally at a gas
station and we filled up drinksfor this like road trip We were
at the counter and we realizedthat they would be an extra what
was 10 cents 50 cents a drinkYou Because the price that we
had looked at was for membershipat this gas station and here you
(24:21):
were like we're in too much of ahurry we're just not gonna buy
it and we just left it on thecounter even though it was a
dollar max for two of them
Ashton (24:28):
my social anxiety could never
Gideon (24:30):
i know i like i mouthed the guy i was like i am sorry
like what and then we likehuffed out of the store i was
like because he was making
Dad (24:39):
me sign up for membership and i wanted to keep my buck It
doesn't make any sense.
No.
Not to me,.
Ashton (24:46):
Yeah, the one I've seen is where it's like there becomes
a perceived inconvenience I'veseen a lot of that and I've felt
myself with that But then whatdo you mean perceived
inconvenience?
Well, like you'll be going likenot you know, I'm okay But like
call me out.
I call grandma out.
She's gonna be mad at me tryingto think well, like you'll be
you can be walking through astore and it could be something
(25:08):
as simple as like, I don't wantto have to carry all this out.
It just then becomes thejustification for not having to
purchase something.
Dad (25:13):
I don't know.
I'd probably admit that I'mguilty of that.
Cause all of a sudden myanxiety, cause I don't know
where my budget is, but if Iknew I had guilt free spending
and I'm going to have toconvince myself, I mean,
everything I've bought, I'veregretted for a period of time
because I feel like there's abadge of honor in that.
And I promise I'm going to workon that.
That being said, this is finance102.
(25:33):
When we get to one Oh three, I'mstill going to talk about
haggling because I think that'simportant.
I think haggling we're justafraid of it as a group, but
let's not, that's not what thisis getting.
I wasn't haggling with the guysbeing a punk.
I was mad, right?
For no real reason.
Yep.
I know.
Ashton (25:49):
The difference between that and haggling, it's like,
Especially when you're going toa store like Walmart's not gonna
say hey Well, you know whatsince you talked to real nice we
can drop the price by 20 bucksBut your point is if you know
the extra money you can spendthen it's never a problem Right.
It
Dad (26:07):
truly should be guilt free Right.
So the challenge for thelistener the challenge for you
young man is to go through andfill this out On your mandatory
and then we can figure out whatwe need to earn every month And
that way you can build this offof what you need to bring in
monthly And then you can buildyour emergency fund to
accommodate that so you mightneed to put more into your
(26:29):
emergency fund ashton, let'sassume next month you get seven
thousand dollar check You mightwant to chunk some of that
towards some of that collegedebt.
Ashton (26:35):
Yeah.
Dad (26:36):
Who knows?
It might not be that much, butyou might want to chunk some of
that and you say, Hey, wait asecond.
Instead of doing that, let meput it, let me put some towards
debt and let me figure out areasonable percentage.
Yeah.
Let me put a reasonablepercentage to this and, we can
talk about negotiating debt andall that in our next
conversation in one Oh three,but for right now, let's just
get this conscious spending planfilled out.
(26:57):
And realize it's not a budget.
It is a way that you're going toset it up and you're going to
glance at it for minutes, nothours every month.
You're not going to categorizeevery little thing you spent.
Gideon (27:08):
And how can the listener find this again?
Dad (27:11):
It'll be linked to the show in the show notes as well as
look on an adulting decrypted.
We'll put a blog post out aboutit and we'll also be find it on
Reddit and I'll have it a coupleof different places.
Gideon (27:21):
Sweet.
And for anybody looking to talkto us about it, we would love to
hear your stories about spendingand any information that you
have or anything that you wantto share.
We'd love to hear at any of oursocial medias, which can be
found on our website as well asour email and we will talk to
you next time.
Thank you for listening to thisweek's episode of Adulting
(27:42):
Decrypted.
We really enjoyed having thisweek's conversation and we hope
you did as well.
If you ever want to comment onour topics, you can send us a
message through our websiteadultingdecrypted.
com, our email adultingdecryptedat gmail.
com, Or, through our Instagram,Facebook, and LinkedIn accounts
at Adulting Decrypted.
(28:02):
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(28:25):
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Welcome to Adulting Decrypted.
We are your hosts.
I'm Gene, and I'm starting myfirst year of college.
I'm Ashton.
I'm a music performer, composer,and educator.
I'm Gene, a high school senior.
I'm Roscoe, the dad.
Those are my three sons, andthis is Adulting Decrypted,
where we discuss ways to becomeadults and the things we need to
(00:22):
know to be successful in life.
Dad (00:24):
Welcome to Finance 102.
For a quick recap for thelistener.
What did we talk about last timewhen we were doing the financial
episode?
What did we talk about?
Gideon (00:33):
Talked about net worth.
Dad (00:35):
Perfect.
Love it.
Yep.
We talked about net worth.
Anything else you guys gleanedfrom that conversation?
Gene (00:39):
Financially secure versus financially independent.
Dad (00:43):
Perfect.
listener, have you thought moreabout being financial
independent versus financiallysecure?
Have you guys thought any moreabout it since our last meeting?
A little bit.
It's crossed my mind made anydecisions or any aha moments
from it.
Not yet Okay fair.
So I thought a lot about it, thefinancial independence and I
think I ran it past you ashtonThe other day it was fire
(01:05):
financially independent retireearly And you heard fired and
you're like, you got fired.
No, no, I'm trying to get fire.
Ashton (01:11):
I heard the deans.
I was trying to figure out wherethat went in the I was gonna say
anagram.
That's not the right thing.
What's the word for when there'slots of letters and it makes
words acronym acronym.
Yep.
Dad (01:21):
thank you.
good point.
financially independent for memeans that my investments are
making enough money that I havenot him to work.
For somebody else that I get todecide how I want to spend my
day.
It doesn't mean that I'm goingto stop working, right?
I joked with you guys all thetime that I'm going to work
until I'm dead.
And truly I love what I do.
I love podcasting.
if we can figure out how tomonetize this, I'll do it
(01:41):
forever.
If I can figure out how toteach, I would do it forever.
It's just, it's in my blood.
So for me, financialindependence means that, right
now I'm okay doing RV trips orliving up at the cabin and
renting out the house.
You know, I'm okay with a littlebit less of a lifestyle.
I'm actually fine not eating outmore than Once or twice a month,
I don't need those lavishvacations, but that's for me mom
(02:03):
and I had an interestingconversation She said for her
it'd be more travel.
She'd like to go do some notluxury travel What did we just
do recently mexico?
Did we do that on a budget?
Do you guys think or did we goall out?
Gideon (02:15):
It felt all out
Dad (02:16):
Interesting.
Ashton (02:17):
it was definitely on a budget for sure.
Yep.
I definitely know there wasplenty of sky a mile points and
other.
Okay.
Gideon (02:24):
Okay.
I know there were money savinghappening and backing up on
other things, but at the sametime, We did a lot.
Dad (02:32):
We did do a lot.
And that's one thing that momand I pride ourselves on.
Like we did a big New York trip.
We were gone for almost 30 days.
Back actually, I think you were16.
So that's been what, nine years,nine years ago.
We did that.
And we did almost 30 days and I,bragged to everybody that would
listen, how cheap I did thattrip.
You know, I was like, we weregone for this long and I spent
8, 238.
(02:53):
sounds like a lot, but it was 30days.
How many times did we eat out?
Hardly at all.
What did you guys joke about?
If I have to eat one more, what?
You're gonna, you're gonna hitsomebody.
You guys remember these?
Gideon (03:03):
Peanut butter and jelly sandwich.
Dad (03:04):
Peanut butter and jelly sandwiches, that's right.
A mom normally made them when Iwas driving 90 miles an hour
down the road.
And she's in the middle seatwith the seat down making you
guys all sandwiches.
We probably ate out three timesat Chicago was one of them cause
it was a big deal.
Just like in Mexico, we only ateout once, but, for me,
financially independent isn'tluxury, but it might be for you,
(03:25):
right?
You guys need to experience whatyou want to in your life.
I just had a person that workedfor me say, They make about 15
an hour.
And they were talking aboutgoing on a 6, 000 vacation this
summer.
Do you think I belittled them?
Gideon (03:36):
No,
Dad (03:36):
no, not at all.
Good for them.
If that's how they want to spendtheir money, more power to them
as long as they've covered thebasics.
And that's what we're going totalk about today.
A lot of times we talk aboutbudgets right out of the chute.
So financially independent, keepthinking about that, what that
means to you.
And as well as financial secure,there's a form that I've stolen
from a, I don't know that it'sstolen.
He sent it to me.
Rameed.
he'd.
(03:57):
Runs, I'll teach you to be richand a shout out to him That's
where I'm going to get a lot ofmy information from.
And then I'm going to couple it,sprinkle in some Dave Ramsey or
maybe some, Gordon Ramsay anyGordon Ramsay Gordon sprinkles
and some stuff in his food.
There you
Gene (04:10):
go I don't know if you want to take all your eating
habits from a Gordon Ramsaycookbook If you want to keep
your pocketbook in check, butagain, that's up to you that's
your choice of financiallyindependent Whatever makes you
feel good.
Honestly at this point.
Dad (04:22):
I like that gene.
I like that.
That's a good point and AshtonThat's fair.
As long as you made the decisionand that's why this conscious
spending plan at the very bottomgives us guilt free money.
And so to your point, Ashton,Hey, if you feel good about it,
spend the money on it, but weneed to take a step back and
look at what's in the first fewlines and I'll share this.
It's obviously a resource thathe's willing to share and put
out there.
the first thing you do is youlook at your net worth.
(04:45):
We discussed our net where dideverybody get a chance to go
look at their net worth?
And where they were at.
How did we calculate net worthjust to remind everybody
Gideon (04:52):
You calculate your assets like how much that is
your investments your savingsand then take that number And
minus out your debt.
Dad (05:00):
What kind of debt
Gideon (05:01):
like student loans credit card debt mortgage, etc
Dad (05:04):
All that We live in utah.
So more than likely you're gonnahave a car, But like we see up
there at the asset.
He even puts cars and asset onhis account Where other people
would debate that but it'sreally if you've paid for it
It's an asset if you're stillpaying on it There's gonna be a
little bit of an asset and maybea little bit of liability if you
actually owe more than yourcar's worth, you want to do
different kinds of insurance.
And we've talked about that.
(05:25):
So we'll talk more aboutinsurance, maybe in like
financial one Oh five and whatinsurance means.
But in one Oh two, we're goingto just spend a lot about this
conscious spending plan.
What's the big dreaded word thata lot of people use is a budget,
How many times have I said youneed to budget your money?
If you guys were to guess.
Have I ever shared that with youguys?
Have I ever talked budget?
Yeah.
Oh, once or twice.
(05:45):
I'd say maybe, maybe threetimes, maybe seven.
Okay.
So here's the question.
45 get in.
Do you have an active budget?
Gideon (05:53):
No, sir.
Dad (05:53):
Gene, do you have an active budget?
Nope.
So obviously my teaching isn'tworking.
Ashton, budget or no?
Funnily enough,
Ashton (06:01):
Kind of, but I have a very specific budget for other
programs that I run.
I was thinking on the irony ofme having budgets that I'm
following very diligently forprograms and not for myself.
Thought there was some ironythere.
Dad (06:12):
Oh, that is actually kind of interesting, isn't it?
When you're held accountable tosomebody else to actually
account for the money, you'remore conscious with it.
We talked the other night.
I thought it was veryinteresting that you said, well,
I need to make sure that I'vegot everybody else paid first
and you're very line itemed onit versus with your personal.
Sometimes you might not think,as detailed as that.
Right?
So this is a little bitdifferent.
(06:34):
Mom and I have budgeted andthere's, multiple ways you can
do a budget, There's theenvelope method.
there's the, Dave Ramsey likesthe zero sum budget.
you get to the bottom of yourlist and there's no money left
over.
But the reality is, is most ofus struggle with doing a budget
like that.
So when I was listening to Rameetalk to some of his clients,
he's got a great podcast.
I'll teach you to be rich.
(06:55):
He's got some YouTube videos.
They're a lot of fun.
Get more education there.
He's got a lot of information,but what I enjoyed about it is
that he actually said, look,most of us don't budget.
we hate the word budget.
And so what he's challenged usto do is to think of it
different and think of it as aconscious spending plan.
So instead of some budget thatyou have to hold yourself
accountable, you're saying, Hey,this is what I've decided.
(07:15):
He was studied at Stanford.
Is that a popular school?
Big school.
Stanford is a big school.
Yeah, and he was actuallystudying psychology of all
things and then he realized thatpeople have this weird
Psychology with money.
I was sharing today withsomebody that when you grow up
very poor there's threedifferent ways to think about
money They're really not notmoney But poverty has a very
distinct way of thinking aboutmoney and if you think about it
(07:37):
in the way you eat is theeasiest way for me to think of
it if you're in poverty, whatquestion do you think's being
asked?
go ahead might have shared this
Gene (07:44):
is there enough is there
Dad (07:45):
enough right if you're middle class, what's the
conversation taste?
How does it taste and then ifyou're?
super wealthy How does it look?
That's right.
You know, and that's why I thinkbuffets are kind of fun to go in
there and look at the waydifferent people respond and how
they act at a buffet.
and it leads you to understandthat concept a little bit
better.
think of this conscious spendingplan and saying, Hey, I'm going
(08:06):
to make a decision.
I'm going to be conscious aboutwhat I'm buying because at the
very end of this.
plan there's what's called guiltfree spending.
How many times have we hearddon't buy the avocado toast or
don't buy rock stars?
Don't buy don't don't don't oryou just need to give up and
then we insert that favoritething I should I probably said
that about your audio gear.
Hey, you don't need to buyanother Would be true, but it's
(08:29):
not my place as long as you'vecovered your conscious spending
plan if that's what you'vedecided if that's your guilt
free money the difference isthat's a business Expense for
you, so up there might be anasset.
I think you could list some ofyour Equipment is an asset when
you think yeah, I think so.
Yeah, cuz it's got some value Icould sell it and get me some
money Back from it.
Yeah.
So the first thing you got tocome up with is how much do you
(08:50):
make a month?
Now this one's a little bitweird for how many of us sitting
around this table?
No for me in particularGideon's, you know much make
your month.
Gideon (08:58):
No, I don't
Dad (08:59):
Ashton and
Gideon (09:00):
Wait, I do zero zero
Dad (09:04):
times zero is still zero.
So gross monthly income.
So this would be all your incomebefore taxes added up.
So Ashton, for you, you couldsit down and look at what you
made this month, Cause you'regoing to go out as a matter of
fact, tonight, you're going togo hang out with cousin Paul.
And you could add that up.
You could add up all thedifferent ways I make money.
Now, the hard part is, with youbeing in the gig economy and
(09:24):
then junior in school, getting,you're still in school, you
might want to look at that andsay, okay, how much do I make
each month?
And you say, okay, I reallydon't know.
So then what you need to comedown to here, start looking at
your fixed.
Costs like what stuff has tocost and this is why I challenge
us as a gig economy guys to dothis math and Almost set goals
(09:46):
for us.
How much do we need to earn sothat these work out?
Right.
So the fixed cost rent mortgageHow much is everybody's rent?
Gideon?
Gideon (09:55):
My rent is zero dollars.
Yeah, your parents are prettynice.
Dad (09:58):
Gene?
Gene (09:59):
my rent for next semester is going to be like 1, 700.
Dad (10:03):
Yeah, 1, 700, but it's divided by four months, right?
So you could actually break itup by month.
But you're right.
It is all in one chunk.
So if I were you, I would putthat in, divide it by the, four
months that you're going to workover the summer and put that in.
It was a number because you'regoing to work over the summer to
earn enough money.
You say, okay, how much do Ineed to cover that rent?
My rent, it's a mortgage, It's1350.
(10:25):
So I know what my mortgage is.
Ironically though, then you getinto the variables because my
mortgage isn't held at atraditional mortgage company, so
I don't have my property taxesor my homeowner taxes put in
there, but most people do.
They put in property taxes andhomeowners insurance in there.
So I would add mine back inthere and say, okay.
My mortgage is 1, 300 a month,but my taxes and some of these
(10:47):
other things are about threegrand.
I'm going to add that but dividethat out by 12 and I'm going to
put an extra 400 in there.
So I'm going to put like 1, 800a month in a mortgage.
Does that make sense?
Yeah.
It's all part of what it coststo live in a house that would
normally be tied to a mortgageutilities.
What are some of the utilitiesthat you covered?
You cover any utilities, Gene?
Gene (11:06):
yeah, I have to pay for electric and heating but it's
split amongst the four peoplethat live there.
Ashton (11:12):
Yeah, you can get electric, gas internet, it's a
big one, water, oh yeah, water,I was like, are you playing the
piano?
Gideon was trying to give mesigns.
Gideon (11:20):
Yeah, I was trying to give you water signs.
Ashton (11:22):
That was better, I would have gotten that one.
Thank you.
He did waterbending.
Dad (11:25):
Internet.
Do you have to pay for internetseparate from where you're at,
Ashton, or is that all includedin your utilities?
Separate?
Yeah.
Ashton (11:31):
Yes.
Dad (11:32):
The internet's separate.
Yeah.
so that's stuff to be aware of,right?
And you'd list all that inthere.
And this is what we call fixedcost.
Does it change very much?
Sometimes my electricity billgoes down a little bit, but not
much.
And if I know that I'm going tohave some peak, when would I
peak on my electric bill inUtah?
Gideon (11:47):
In the winter.
Dad (11:48):
Or summer.
Or summer.
Yeah.
I don't, I really peak in thesummer because we run our AC.
In the winter because our,heater doesn't draw as much.
But different Gideon up at thecabin.
I never run the AC up at thecabin.
Oh, wait, cause we don't have ACup at the cabin, but we do have
heater use when you don't haveit, but we do have electric
heaters.
And so I have to add that there.
So I just take my, I'd look atmy utility bill, and then divide
(12:11):
it by 12.
If I had to multiply it, youknow, look at my biggest months.
Nice thing is you can pull up astatement from your bank and
just kind of do the math on it.
Insurance, Is that mandatory?
Actually, not you and I weredebating this the other day.
I dislike the principle, butyes.
Yeah.
In order to drive in Utah, it'sa mandatory that you have
insurance for your car, butthere's also other there's
medical, And the home andrenters is down here and that
(12:34):
probably makes more sense.
I said, maybe I'll put mymortgage, but maybe I'll put it
down there because it doesfluctuate a little bit.
My mortgage wouldn't.
And you guys might need to haverenter's insurance.
Do you have renter's insurancewhere you're at?
Gene
Gene (12:45):
I haven't set anything up, so I don't think so.
Dad (12:46):
And really all you've got is a computer down there.
So if it burns up, you're like,okay, big deal.
Right.
Ashton (12:51):
I've done renter's insurance.
You had to
Dad (12:53):
have renter's insurance because of the value of your
gear.
Ashton (12:55):
Well, that, and it was required by the landlord.
There you go.
So kind of dual, dual purposethere.
Dad (13:00):
Yeah.
You put in your car payment orany transportation.
like we talked about here inUtah, you have a car payment.
You'd also put in transportationif you lived in a big city, you
know, you're taking the bus,you're taking the subway, you're
taking an uber groceries.
This one's a hard one.
How much do you spend a month ongroceries?
Well, if it were me, thequickest way to find what I
spent last month is where do youthink I see that at?
Gene (13:23):
an online banking app.
Dad (13:25):
Yeah, my banking app, but it shows me right now on food
and dining.
I spent 770 I think that's alittle bit high So I might go
and I might look at the month Imight open up and look at all
transactions because i'm notgoing to do this every month
This is to do it one time So i'mgoing to spend a couple hours on
this Right this one time.
(13:45):
So I'm gonna go do the math andsay, okay, really is it 769 or
768 or whatever it was?
It might be it might be 805.
I don't I don't know until I tryit Oh debt payments You need to
put your debt payments in there.
Yep.
What what are you paying on yourmonthly debts?
Then close if that's a if that'sa category you spend in gene.
How much do you spend on yourclothes?
Gene (14:05):
I have not spent money on clothes since I've moved out.
Dad (14:09):
so some people are going to buy clothes a lot.
That's their thing, but otherpeople won't.
Right.
So this clothes to me is one ofthose.
Holding areas.
If you have something that youlike to spend money on phone, I
love phone.
That's in there because most ofus have separate from our cell
phone plan.
We are making payments on sometype of a phone, right?
Or something.
Subscriptions.
This is where you'd put inDisney plus for me what did I
(14:31):
just get rid of last month?
Ashton (14:33):
Prime.
I think, yeah.
Amazon
Dad (14:34):
prime said, you know what?
You guys can raise the pricesand start putting ads on, and
I'm not going to play.
So I took my 150 they wanted tocharge me and I'm going to put
it to work somewhere else.
That being said, I still boughtenough crap and I just bought it
all at one time.
So I still got free shipping.
It's just here four days laterand I'm, not bugged at all.
It works fine for me.
But you know, so you'd stillhave other stuff in there, maybe
(14:55):
a gym membership and stuff likethat.
miscellaneous.
I love this.
I love that, that he put this inhere because Ramit has told all
of his people go through thereand that those brown boxes and
put all your different lineitems in there and then add 15
to 20 percent because you missedsomething.
You didn't think about somethingthat you normally spend money on
and then you'd come up with thatfixed cost total.
(15:16):
So any questions on the fixedcost?
Gene (15:18):
Yeah, so part of that 15 percent would that include gas
or like bus tokens if that's onesomething that someone would
use?
Dad (15:26):
I would actually put that up maybe under my
transportation, maybe, maybeit's not car payment.
Maybe it's up in utilities.
The reason why I wouldn't put itin that 15%, I think that 15
percent is saying, Hey, I don't,I don't know exactly what it's
going to be.
And one thing I liked that Ramitalked about is that we're doing
these all as a percentage.
and the fixed cost as apercentage of your take home pay
(15:48):
should be somewhere between 50and 60 percent of your take home
pay is all your fixed costsshould be.
And you know, what's cool aboutthat for me as I'm thinking of
that now, for those of us whoare on variable incomes, we can
do the math off of this and say,my fixed costs are to keep it
real simple.
So, if my fixed expenses are 3,000 and I need 50 percent of it
(16:09):
in that fixed cost category, andI say my fixed costs are 3, 000.
It's like 6, 000.
Yeah, 6, 000 would be a realeasy number to say, okay, I got
to figure out how to make thatevery month.
I mean, it's almost, it's almosttoo simple.
It reminds me of, and Gideon, Ithink you mentioned it do you
want to share your analogy ofwhat, what you thought it
reminded you of?
(16:30):
The budget and, and yeah, theconscious spending plan.
Gideon (16:33):
Just as we were talking, I thought about all the
correlations a budget had to adiet.
Cause we talked about like thenegative correlation they're
involved, Like how we see abudget is like negative, I
guess.
And a lot of people see diets asnegative when really it's
dissecting it.
Cause I do a lot of healthstuff.
Like I really like fitness andhealth and losing weight.
(16:54):
Isn't about a diet.
It's about counting yourcalories and just decreasing the
amount of calories that youintake.
And so a budget's the same thingin my brain, just calculating
all the money that you have, allthe calories.
How much you need to spend, howmuch you make, like how much
calories you need to eat tosurvive versus how many are
excess.
and I think it's just aninteresting correlation.
Dad (17:16):
Yeah, I like that.
And I liked that you tied it tobudgets.
Now I'm going to take it onestep further and say, how would
it correlate to a consciousspending plan?
Cause that's one thing.
This isn't, this isn't a budget.
this is really a consciousspending plan, meaning you're
going to decide.
Gideon (17:30):
Yeah, for sure.
And a lot of people that wewould look at as fit are not on
diets, It's a lifestyle.
Dad (17:37):
They made a conscious decision.
Gideon (17:39):
Yeah.
to the point where a consciousdecision to the point where they
don't really have to worry asmuch as a budget would.
Dad (17:46):
Correct.
Because you already know, likeyou already know, Gideon, that
you're going to have so many,and you're a great example of
it, is say, I'm going to havethis much protein in the
morning, I'm kind of know wheremy protein load is, I know where
I need to eat these two or threemeals, and you're like, nah,
I've already had sweets today.
Where a guy like me would haveto look at that and say, okay,
I've eaten, I can't remember, Iate two eggs for breakfast, you
(18:08):
know, I'd really try and thinkthrough that.
But if I had a consciousdecision and say, look, my goal
is to have a calorie deficit.
I would be more conscious of myeating, versus I'm going to
track everything I do.
Cause for me, it hasn't beensustainable.
I've done a calorie.
I've done a budget.
I get off them because they'rehard.
They're hard to keep track of.
That's what I'm hoping.
This is easier.
So that you have one number thatyou have to review maybe once
(18:30):
every six months, not everymonth.
You should be able to open upthat app that we talked about
for us, it's America first.
It's where we bank.
I'm not saying it's the best.
I'm just saying it's there.
put it in month, categorize itonce and don't think about it.
Hey, this is Verizon.
a, utility.
Boom.
I don't care.
Call it a phone.
Boom.
I don't care.
(18:50):
You know, whatever you call it,just call it that move on.
I'm going to buy a computer insix months I need to have a
conscious spending plan for it.
You know, where am I going toput that?
You know, I need a new phone insix months.
Where am I going to put that onthis line item?
Boom.
I don't think.
Cool.
So that should be about 50, 60percent of it.
And then the next one is,Finance 101 investing invest 10
percent of your take home.
(19:11):
This one's going to be hard,especially when you don't have a
take home.
So you actually have to think ofit different.
Oh, one more thing I'd put on myfixed expense for me would be
Gideon's mission.
You know, I'd put it up on myfixed expense for at least two
years, just so I know that it'sthere.
Cause I don't have to pay it outall at one time.
Then I'd also put charitablegivings because I know that I'm
going to do A tithing, and soI'd put that up in my fixed
(19:33):
because I just know it's goingto happen.
And then the next one is theinvestment and I'm going to take
10 percent of my take home pay.
And so what they're asking youis to look back over that chart
and if I need to make 6, 000every month, I'm going to take
600 of that and put it at a posttax retirement.
Makes sense.
We'll talk about what you dowith your investments.
This is an emergency fund.
This is.
(19:53):
Truly, this is longterm.
I'm going to touch it when I'm70 and I'm not going to touch it
until then.
And that's what it's for.
And then stocks, if you want toplay the market and you know, I
want to take a percentage ofthat.
I'm going to put a little bit instocks, I'm going to put 8
percent in my retirement.
I'm going to put 2 percent instocks, and then there's a slot
to add your own.
(20:13):
We're going to talk like that inone Oh three about what we do
with our investments when we'reready.
Now what?
just think of it there.
The next one is your savings.
This is where you'd save forstuff like a vacation.
And Ramit actually suggests thatyou actually have a different
account that says Hawaii andthat every month you're just
routing your paycheck money andsome of it goes into your
checking account to cover your50 to 60 percent a percentage of
(20:36):
it goes into vacation.
You don't even think about it.
It's an auto withdrawal thrownin here.
So much of it is thrown ingifts, cause it's, big and
different cultures to give giftslongterm emergency fund, to say,
Hey, I want to be at that sixmonths.
I want to be financially secure.
I'm going to divert some of themoney to there.
in my book, where we're at rightnow, I'd say, Hey, I don't need
to fund that.
So I probably wouldn't throw anymoney in that.
(20:58):
I might throw a little bit morein vacation or gifts.
or maybe even reduce just mylittle bit of take home.
And then he has add your own.
What are some things that youguys might add in the add your
own something that you want tosave for for me right now?
I think cars are great.
Ashton (21:11):
I'd probably say gear for me.
Dad (21:13):
Yeah.
Your next big purchase, right?
You're like, Hey, I know if Idon't set it aside, I'm going to
be frustrated.
And at some point in time, I'mjust going to throw down the
credit card and buy that 3, 000unit because now I need it.
I don't have a choice versus Icould start saving up to it
slowly.
I like that.
Get anything on your thoughts?
Gideon (21:29):
Yeah.
As you're talking, I've beenthinking about wanting to get a
bass guitar, but at the sametime, I'm not making money, so I
struggle spending money.
So when I start making money, Ithought about, putting a little
bit every time I make some to.
Cause I don't need it.
Right.
Dad (21:43):
Yeah.
And the other thing I'd like tosee you put in there is your van
savings, to say, Hey, I'm goingto save for this van, you know,
for me, I'm, putting a truck,I'm going to put a truck in mine
because.
My truck's got 120, 000 miles.
It's not going to last muchlonger.
Cybertruck's hitting the marketsoon and not going to buy it.
I changed my mind.
We can talk more about thatlater, but, but no, I've changed
my mind.
then they're saying go onvacations.
(22:04):
and honestly, that's what we didfor her Cabo.
I think I already said that, butfor Cabo mom and I set that
money aside way early.
I didn't want to spend it.
I wanted to back out like Ishared, but you know, I'm glad
we did it.
And I'm glad that you guysdidn't think it was on a budget
cause it was super on a budget.
And then the last one, and thisone surprises me.
has everybody got theirconscious spending plan pulled
up?
Yep.
What is it?
Guilt free spending.
(22:26):
What does that really mean?
Make it rain.
Make it rain, baby.
And this is where you put inthose.
I don't care if 20, at thatpoint in time, if you've already
invested 10%, 12 to 15% of your,he says investment's only 10.
But if, you're behind like I am,I'm gonna change that.
I'm gonna go like 15% and I knowthat I'm gonna reduce my
guilt-free spending down to that20%.
(22:46):
I'm okay with it.
But that's the stuff where I'mgoing, Hey, let's buy pizza
tonight.
Let's buy ice cream.
that's not gonna be part of mynormal food budget.
He talks about, people who arespending, 2, 000 on a dinner.
That's not me, but I can't faultanybody that's doing that.
You know, if they're followingthis method, more power to them
because it truly is guilt freeand that's a hard concept I've
(23:07):
trained you guys all to feel alittle bit guilty about spending
money, whether you want to admitit or not, I've trained you to
do that.
And it wasn't intentional.
It came from my upbringing, Iwould go there and I have to
look at the price of something.
And my mom, who's ever beenshopping with, grandma Allen.
I have.
What was it like?
I don't know if she's changed.
Here's the question.
Has she ever, Grandma, we loveyou.
(23:28):
I love you.
You're my favorite mom.
You're the best mom I could everask for.
she listens to all of these too.
I know.
I know.
She's gonna text me and eitherbe real mad at me or real happy
at me.
That's fair.
But did she, have you been on ashopping trip where she loads up
her cart and then leaves it?
No.
No, I haven't.
Yeah, I've been there where shedoes that because she starts
feeling guilty about spendingthe money.
Ashton (23:50):
Yeah,
Dad (23:50):
she's put the the stuff in there that she decided that she
didn't need and I've done it Youguys have seen me do it.
I'm like, oh, okay I load thisup and then I'm like as I get
closer to the cash register.
Gideon (24:01):
Have you noticed it?
Well, I have a pretty funnystory We were literally at a gas
station and we filled up drinksfor this like road trip We were
at the counter and we realizedthat they would be an extra what
was 10 cents 50 cents a drinkYou Because the price that we
had looked at was for membershipat this gas station and here you
(24:21):
were like we're in too much of ahurry we're just not gonna buy
it and we just left it on thecounter even though it was a
dollar max for two of them
Ashton (24:28):
my social anxiety could never
Gideon (24:30):
i know i like i mouthed the guy i was like i am sorry
like what and then we likehuffed out of the store i was
like because he was making
Dad (24:39):
me sign up for membership and i wanted to keep my buck It
doesn't make any sense.
No.
Not to me,.
Ashton (24:46):
Yeah, the one I've seen is where it's like there becomes
a perceived inconvenience I'veseen a lot of that and I've felt
myself with that But then whatdo you mean perceived
inconvenience?
Well, like you'll be going likenot you know, I'm okay But like
call me out.
I call grandma out.
She's gonna be mad at me tryingto think well, like you'll be
you can be walking through astore and it could be something
(25:08):
as simple as like, I don't wantto have to carry all this out.
It just then becomes thejustification for not having to
purchase something.
Dad (25:13):
I don't know.
I'd probably admit that I'mguilty of that.
Cause all of a sudden myanxiety, cause I don't know
where my budget is, but if Iknew I had guilt free spending
and I'm going to have toconvince myself, I mean,
everything I've bought, I'veregretted for a period of time
because I feel like there's abadge of honor in that.
And I promise I'm going to workon that.
That being said, this is finance102.
(25:33):
When we get to one Oh three, I'mstill going to talk about
haggling because I think that'simportant.
I think haggling we're justafraid of it as a group, but
let's not, that's not what thisis getting.
I wasn't haggling with the guysbeing a punk.
I was mad, right?
For no real reason.
Yep.
I know.
Ashton (25:49):
The difference between that and haggling, it's like,
Especially when you're going toa store like Walmart's not gonna
say hey Well, you know whatsince you talked to real nice we
can drop the price by 20 bucksBut your point is if you know
the extra money you can spendthen it's never a problem Right.
It
Dad (26:07):
truly should be guilt free Right.
So the challenge for thelistener the challenge for you
young man is to go through andfill this out On your mandatory
and then we can figure out whatwe need to earn every month And
that way you can build this offof what you need to bring in
monthly And then you can buildyour emergency fund to
accommodate that so you mightneed to put more into your
(26:29):
emergency fund ashton, let'sassume next month you get seven
thousand dollar check You mightwant to chunk some of that
towards some of that collegedebt.
Ashton (26:35):
Yeah.
Dad (26:36):
Who knows?
It might not be that much, butyou might want to chunk some of
that and you say, Hey, wait asecond.
Instead of doing that, let meput it, let me put some towards
debt and let me figure out areasonable percentage.
Yeah.
Let me put a reasonablepercentage to this and, we can
talk about negotiating debt andall that in our next
conversation in one Oh three,but for right now, let's just
get this conscious spending planfilled out.
(26:57):
And realize it's not a budget.
It is a way that you're going toset it up and you're going to
glance at it for minutes, nothours every month.
You're not going to categorizeevery little thing you spent.
Gideon (27:08):
And how can the listener find this again?
Dad (27:11):
It'll be linked to the show in the show notes as well as
look on an adulting decrypted.
We'll put a blog post out aboutit and we'll also be find it on
Reddit and I'll have it a coupleof different places.
Gideon (27:21):
Sweet.
And for anybody looking to talkto us about it, we would love to
hear your stories about spendingand any information that you
have or anything that you wantto share.
We'd love to hear at any of oursocial medias, which can be
found on our website as well asour email and we will talk to
you next time.
Thank you for listening to thisweek's episode of Adulting
(27:42):
Decrypted.
We really enjoyed having thisweek's conversation and we hope
you did as well.
If you ever want to comment onour topics, you can send us a
message through our websiteadultingdecrypted.
com, our email adultingdecryptedat gmail.
com, Or, through our Instagram,Facebook, and LinkedIn accounts
at Adulting Decrypted.
(28:02):
If you have any topics for theshow that you would like us to
talk about, or if you are aparent and want us to talk about
something your kid should know,send us a message on any of the
accounts mentioned.
If you would like to be a guestor have an idea for someone you
think we should have on ourshow, feel free to send us an
email detailing your thoughts toadultingdecrypted at gmail.
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(28:25):
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(28:49):
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