Have you ever wondered why even those with six-figure incomes can feel the money crunch at the end of the month? Join me, KJ, and my insightful sidekick, Mr. Aaron Banks, as we dissect the perplexing trend of affluent Americans tethered to the paycheck to paycheck lifestyle. Our latest episode of Money Conversations walks you through the maze of lifestyle inflation, the subtle pitfalls of 'keeping up with the Joneses,' and why budgeting is not just a practice for those on a tightrope of financial survival. We promise you'll walk away with practical steps to stretch your dollar further, regardless of the size of your paycheck.
There's a sweet spot between earning and saving, and we're here to help you find it. Mr. Aaron Banks and I crack open the realities of a $100,000 yearly income, from the bite taxes take out to the monthly dance with expenses that can leave your wallet feeling light. We don't just stop at problems; we serve up solutions, discussing the power of compound interest, strategic budgeting, and the immense psychological rewards of watching your savings blossom. Whether you're aiming for a mortgage down payment or padding your retirement nest egg, we share personal stories and expert advice to keep you motivated on your journey to financial freedom.
As the series wraps, we don't gloss over the rough patches. We empathize with the stress of inflation—how a trip to the grocery store can evolve from a pleasure to a pressure point. With an open heart, we reflect on the realities of credit card debt and the emotional toll it takes on American families. Our ongoing Money Talks series is your weekly dose of fiscal wisdom, aiming to arm you with the knowledge to navigate the choppy waters of personal finance. Remember, it's not about how much you earn; it's about how you manage, save, and invest. So, keep us dialed in, and we'll keep the insights coming.
Don't forget to subscribe, like and share it with a friend or two!
Have you ever wondered why even those with six-figure incomes can feel the money crunch at the end of the month? Join me, KJ, and my insightful sidekick, Mr. Aaron Banks, as we dissect the perplexing trend of affluent Americans tethered to the paycheck to paycheck lifestyle. Our latest episode of Money Conversations walks you through the maze of lifestyle inflation, the subtle pitfalls of 'keeping up with the Joneses,' and why budgeting is not just a practice for those on a tightrope of financial survival. We promise you'll walk away with practical steps to stretch your dollar further, regardless of the size of your paycheck.
There's a sweet spot between earning and saving, and we're here to help you find it. Mr. Aaron Banks and I crack open the realities of a $100,000 yearly income, from the bite taxes take out to the monthly dance with expenses that can leave your wallet feeling light. We don't just stop at problems; we serve up solutions, discussing the power of compound interest, strategic budgeting, and the immense psychological rewards of watching your savings blossom. Whether you're aiming for a mortgage down payment or padding your retirement nest egg, we share personal stories and expert advice to keep you motivated on your journey to financial freedom.
As the series wraps, we don't gloss over the rough patches. We empathize with the stress of inflation—how a trip to the grocery store can evolve from a pleasure to a pressure point. With an open heart, we reflect on the realities of credit card debt and the emotional toll it takes on American families. Our ongoing Money Talks series is your weekly dose of fiscal wisdom, aiming to arm you with the knowledge to navigate the choppy waters of personal finance. Remember, it's not about how much you earn; it's about how you manage, save, and invest. So, keep us dialed in, and we'll keep the insights coming.
Don't forget to subscribe, like and share it with a friend or two!
Hey, welcome back everybody. Money Conversations with KJ. I'm your host, kj. Today we're starting a new series called Money Talks, so this series here is going to be talking to you guys about how we can help you, the problems that are out there and how we're going to be able to help you, and also with this podcast, I have a guest that's come on board. It's going to be my sidekick, mr Aaron Banks. Welcome to the podcast, mr Banks.
Speaker 2:Well, thank you, kevin. Thank you, glad to be here Awesome.
Speaker 1:So today I just want to refresh some of you guys out there that listened to me on a regular basis probably heard Mr Banks podcast. He was actually the first podcast that I did, which is about three and a half years ago. Great story Been retired 10 plus years, did things right. When I say right, he did things correctly. That got him to retire at age 55, which I think most people would aspire to do so. But we want to talk about certain. You know, I look up, I read what articles are out there, like from CNBC and other formats, and we want to go over those things today, right, and so let's just kind of dive right in Mr Banks and see what the world is saying basically. So I found this article on CNBC that the title of it says here's why even Americans making more than $100,000 a year live paycheck to paycheck. Now when I tell you that title, how does that make you feel? What's the first thing that comes to your mind?
Speaker 2:Well, it just means that people are having a tough time out there. They're trying to manage their finances, they're trying to save, they're trying to do things that in some cases are not necessary. But you know, you can't tell someone how to live their life. They have to make their own choices, and sometimes those choices are not very good.
Speaker 1:Right and again. But some people would believe, as they hear this, if someone's out there making 50, 60, 70,000 a year, they think of themselves what do you mean literally being paycheck to paycheck, making 100,000 a year? I would be perfectly I would. I would not be living paycheck to paycheck if I made 100,000 a year, right, would you agree that a lot of folks have that mindset, thinking that like how could you live paycheck to paycheck if you're making 100,000 a year?
Speaker 2:Well, they're not being realistic with themselves at that point, because if you have a mortgage and a car note and insurance payments and taxes, you have money that's going out. Oh, the key word is budget. Are you bringing in more than you're paying out?
Speaker 1:Yeah, so it all just breaks down the lifestyle. So I want to read here what the article says. It's not a real long article, so but I'll just go through it. It says it seems like most of your paycheck to paycheck disappears as quickly as it hits your bank account. You're not alone. More than 60% of Americans live paycheck to paycheck as of September of 23,. According to Lending Club report, even people in higher income brackets are affected. More than half of Americans earning over 100,000 a year live paycheck to paycheck. So more than half who make over $100,000 a year are living paycheck to paycheck. That's a big number. So what's going on?
Speaker 1:Many experts point to the phenomenon called lifestyle inflation as one of the culprits. Right, lifestyle inflation or lifestyle creep, is the pattern of spending a little more as a person's income increases. Right, I think the simplest terms. You and I will recognize this term, but maybe the younger generation won't. Keeping up with the Joneses. You know what I mean.
Speaker 1:You're always trying to impress people with the nicer car, nicer clothes, nicer home, all those types of things, and so it doesn't really matter how much money you make if you're going to try to have that. So it says here. I think people hold these benchmarks in their mind. If I reach this position or I get this promotion or I make it to this age, then I can live this life or then I deserve to have these things. I deserve to have these things Said. Sabrina Romanoff, a clinical psychologist who works with clients, is struggling with financial stress, says here then the kind that go a little crazy or a little wild on it and then becomes a little as a trade off, like they can only enjoy their present happiness. They're not able to save or plan for the future. You see the cycle that's happening out there.
Speaker 2:Well, something that you and I have talked about over the years is that people get in their mind that when you bring in income and you're working, you deserve certain things, and that's fine and dandy if it's within your means. But there's something on a little phenomenon that I kind of used as my pre retirement ages is I try to make sure that I don't spend more than I have on my budget, and the X factors going to be is that do you have the philosophy of paying yourself first? For in this particular case, I living paycheck to paycheck is because I said to myself if I live paycheck to paycheck, then how am I going to save? What am I planning for for the future?
Speaker 2:So that means that you didn't have a roadmap. You didn't have a path to get to the destination that you were chosen, whether that be retirement early, whether that be being able to support, maybe, some family members that are needing your help. But there's something, something simple, as, like, christmas time rolls around, christmas times comes and all of a sudden, all the budget stringencies and go out the window. You can't just spend without replacing that money. Are you saving? Are you paying yourself first? If you aren't asking those questions, you're going to be living paycheck to paycheck.
Speaker 1:Great observation with you, and we both have kids and we'll talk about them in a minute. But I mean, I can see the pattern across America. Right, everybody wants, especially this younger generation. They want instant gratification. They're not willing to wait for the bigger prize, right, and I know in your life you did so.
Speaker 1:Some of the key factors that you just mentioned are the reasons of why people are living paycheck to paycheck, which, and then they stress about it. Right, and stress can now can have a domino effect, because stress can affect you physically, it affects you mentally, it affects your habits and, at the end of the day, as I try to teach people because I'm a financial coach, not an advisor, but a coach, right Is, it's a mindset, it's all how we're going to learn how to think and act with our time and money. And if you guys have listened to any of the podcasts, you all know. My first question is how old were you when mom and dad set you down and taught you about money? And we know now 95% of people say mom and dad never did. So that means all these people that are out there making that $100,000 a year or more, right and under for sure, or living paycheck to paycheck, because no one ever taught them what to do.
Speaker 1:They didn't become proactive of what to do, yeah.
Speaker 2:And the sad thing is that that's continuing and, thank goodness, you have a plan for people to get out of that rut. But if you don't have the desire to study your own financial situation, such as you know, $100,000. That's a lot of money, that's that's $8,300 a month.
Speaker 1:Let's break down. What do you think? The average family today, now we know the housing cost today is way different than when you and I bought houses, you know, 20, 30 years ago. They're expensive and mortgage payments are high, right, comparatively as far as generations go. But people are making more money today than what you and I made at 30, let's say, 30 or 40 when we were 30 or 40. But if we had to break it down today can? If you were raising a family of two, do you think you would? You could live on $100,000 a year paycheck.
Speaker 2:Me personally? Yes, because, again, I have a plan, I have a budget, I have income. And there's another saying that says it's not what you make, it's what you keep. So if you're working and you have a certain cost overhead, and that overhead doesn't change if you're not getting a break on your mortgage, if you're not getting a break on your rent, if you're not getting a break on your electric bill, your you know, especially if you live on your own, you have to have an offset. So what is the offset? Well, I'm going to get a pay raise. Well, the pay raise is. Maybe even think in terms of I'll get a pay raise, but the pay raise goes straight into my savings.
Speaker 2:There's a novel idea I, just because I'm getting the money, doesn't mean I have to spend it. And that goes back to what you were saying. It's a mindset. If your mind is not right, if you aren't using the tools that are available to you, such as your roadmap, that you have, and if you aren't getting good advice from people, if you aren't looking up to someone who's in a position that you'd like to be in maybe it's your boss, maybe it's a friend of yours If you don't have anything to shoot for then what are you doing? Are you just floating out there?
Speaker 1:Well, why do you think these people are I mean again, when they talk about 60%, little over 60%, of Americans living at six out of 10 people? Every day, you go anywhere and you look, see a big, you know, in the restaurant. There's 400 people in there. Right out of 400 people, 240 of them are living paycheck to paycheck. They're having dinner in the same place you are. So we know they're hurting, but why are they hurting? Right, and there's multiple reasons that they all would have different, slightly slightly different stories as far as how and why.
Speaker 1:But $100,000 a year is a lot of money, right. 8,300 a month right, that's a little over $2,000 a week. Now, if we break down that now, if the salary is 100, you're not taking home 100. You got to pay taxes, right, you're probably in the 25% tax bracket. That means you're bringing home $75,000, right? So if we break down $75,000 that you get to take home every year, let me just do the math real quick. So, guys, we all know that $75,000 divided by 12 is $62.50 a month.
Speaker 1:Now, in today's world where, although I did yesterday, gas was the least expensive that I've had in a while it was like 305, and I filled up my truck for $60. But there was a time there last year, the year before, it would cost pretty much $100 to fill up my truck. Right, and that's a lot of money. So if you're a household with two cars, you got to keep them gassed up. You got kids. That means you're driving a lot taking them to school, picking them up soccer practice. You know a lot of driving. You know maybe you don't live real close to work and you're putting on more miles than you want On a car. You could easily be spending $500 a month just on gas out of that $62.50, right. But we start with housing. What do you think the average mortgage in America is today?
Speaker 2:Well, there's two ways of looking at that too, because it's not just the mortgages, it's rent Right. So if you're paying a mortgage, your overhead starts with the mortgage, property taxes, property insurance, and that's the other part. We talked about the vehicle. You know you have two vehicles, you have car insurance. A lot of it has to do with where you live.
Speaker 2:For example, the state taxes in California are like 10.99% of your income. So if you live in California or another high tax state, you have the issue of how much of that $6,200 do I give. So if you move to my budget and say, okay, I need to have what dollars, what dollars of that $6,200 are going to be spent on me, meaning I pay myself, right? So that's not part of your plan, part of your strategy to restart your strategy. Restart your plan because what ends up happening is, if you don't have a budget, if you aren't looking at the expenses like you just did the $62.50 versus the $100,000 a year and breaking it down by 12 months then you're fighting a uphill battle and you'll always be living paycheck to paycheck.
Speaker 1:Well, let's talk about it because, again, some people out there that are making 50, 60, 75 or even 80,000 gross a year don't take even home that much money. But what does it cost to live in America today? Right, and let's just take. Again, we talked to, you just talked mentioned about depending where you live. Right, we know, california is an expensive state to live in with their tax structure. We live in Nevada. We have, we don't have a state tax, so that helps a lot, especially if you're retired. But but the housing cost differs, you know, from state to state. The swing is about 100 grand when we look at the median price, right, so let's talk about what we know, which is Vegas that's where we're at in the medium house right now to purchase about $475,000. Okay, to purchase a house for 475,.
Speaker 1:You know, I was gonna say with a 10% down, but a lot of people can't even put 10% down, right, which would be about 50,000 bucks with closing costs and whatnot, it's a little over 50,000. So a lot of people are like, hey, I wanna get in a house and they'll try to get in at that three and a half rate, right, and even that's gonna cost you now about 10, 12,000, coming in with that low one, but your payment right with where the mortgage rates have been and they're barely starting to drop right now, but your payment's upwards of about $3,000 on average, right, so I'm gonna just mark down 3,000. If your mortgage, or even your rent, is 3,000, we'll just classify rent mortgage as the same and you're bringing in 62.50,. You're bringing in slightly. You're bringing in about 48% of your money goes to rent slash mortgage. Is that a good decision or a bad decision?
Speaker 2:Well, if you're looking at a mortgage and you're saying to yourself I am going to buy a property, but I am also gonna take advantage of the fact that that property's gonna appreciate, but you can't spend appreciation no, you cannot. But there's good debt and there's bad debt. Revolving charge debt is not good debt. A mortgage if you're gonna classify debt, if you're gonna go into debt, at least go into debt with an appreciating asset such as a mortgage. So and there's something that you look for from a generational standpoint owning a home. If you and your mind say I don't own a home right now, I'm renting. I wanna own a home, I'd like to be a homeowner, I'd like to be able to go in my backyard or I'd like to be able to go in my garage, and you look out and you say there's some type of pride and ownership when you buy a property. But in order to get in that position, you're going to have to finance the property. So that means a loan. That's a good loan.
Speaker 2:If you're in a situation where you're renting and you say one day I'd like to buy and that's really a target of yours. You just gave the numbers. It takes quite a bit of cash. $50,000 is not something somebody has laying around the house. So what are you gonna do to get that? And your roadmap? Really, it does a really good job of explaining and defining the process of saying I want to save, I need to save. Living paycheck to paycheck means that you're probably not saving, you're probably don't have a savings account, you aren't making that one of your bills, so that's because that's a mindset, right?
Speaker 1:People with money understand the concept of paying yourself first. People without money don't understand this concept, right? They investing, which is investing, is a form of paying yourself first. Saving is a form of paying yourself first. So maybe we should classify and verify the definition of paying yourself first, cause I'm sure everybody's heard that term right, all the financial experts out there. To all these again, 62% of Americans is 175 million people, right, and they hear that term right, pay yourself first, and a lot of them are like they don't even know what that means. How about we start there and help in the folks understanding what that means? I'll start and we'll hear what you have to say.
Speaker 1:So, paying yourself first the way that I teach people is putting your money to work. Okay, your money needs to make money. This is the object of the game. We grow up, we get educated, we give value to the society and whatever that is, and in trade for your value, you're gonna get money, right. And now what do we do with this money?
Speaker 1:People who live in paycheck to paycheck, as their article says over here, are just upping their lifestyles, so they're not quite understanding the game that we're all thrusted into. And so when we use the term pay yourself first, that means, oh, I need the money that I traded time for most people trade time for money. I need to make that money, make money. But people don't think of it that way. They think I just traded that heart. In some cases people work really hard physically for their money, right, and they figure they deserve, as the article says, they deserve the nicer car, the nicer house, the nicer clothes, the nicer vacay, all these things they feel they deserve because they worked really hard, right, and so these people aren't doing what they're not sacrificing for their future. So what we mean when we say learn how to pay yourself first, learn how to save and invest, make your money, make money, because I teach people, nothing makes more money than money because money works 24, seven, three, six, five. You and I don't, nor do we want to, right. So I think understanding the term pay yourself first is probably should be at the forefront of what the message we're trying to portray to people and helping them. Right, maybe they never looked at it that way. Right, we talk about how money is a mindset, so this is a mindset of learning how to think differently. And so if you wake up tomorrow where you guys that are listening out there like I need to learn how to think.
Speaker 1:I always say my term is think and act different with your time and money. Right, time is our most valuable asset, not your money. Your time is more valuable, the most valuable. And so if we say you must pay yourself first, I mean you're gonna get dollar X from your paycheck, weekly, bi-weekly, monthly. However you get it, it doesn't matter. And in this case we'll use the same example hundred grand a year, paying your taxes, you're gonna end up with 75. How much should I put away? Well, we listen to the experts. It would be really, really good.
Speaker 1:If you get in the habit of putting away, it's paying yourself first, 15% of that check. So when you got your paycheck, your employer paid you. Right, they paid you. Now it's time for you to pay yourself.
Speaker 1:It's like a double payday.
Speaker 1:Every time it's payday. If payday is every Friday, guess what? Friday there's two paydays, one's from your employer and the other one's from you. If your paycheck's $2,000 that week and you're gonna put away 15% of your money, that's $600. So $600 now goes to a dedicated account or multiple accounts, I like to say multiple buckets of or roadmap where are we going, what are the things we want in life? And so we don't just put it in one bucket. Right, it could be some in our future. Retirement accounts could be a bucket of separate accounts.
Speaker 1:Just because I'm saving to buy a house, a car, a vacation I always like to share with people. Don't co-mingle money, don't co-mingle it. Every one of these buckets have a different destination how much money they each have in them. But so when you get paid on Fridays, guys, whatever they get paid, then all possible 15% is you paying yourself. Nobody else is getting that money, right? So I think some people have the mindset like, well, if I do that, then I have less money to do these other things that I need to do. What do you feel about when they think that way, when they think like, well, then I can't go, you know, this weekend to the concert, or I can't go this weekend out to take my wife to dinner or whatever these things that these people are out there doing with their money. Talk to me about. How does that make you feel when we start to break it down that way? Well, first of all, that's true.
Speaker 2:That is very true. You won't have as much money left to do the things that you want. So there's needs and there's wants. So if you're in a situation where you're trying to decide whether I need this or I want this, that's a starting point. The other part of that is going to be the vehicles that you use. If your employer offers a 401k, take full advantage of it, and a lot of the employees offer a match program. If you put so much money of your paycheck into your 401k, they'll match it up to a certain dollar amount or a certain percentage If you can take advantage of that. That makes it easy because it's done before your check arrived, before the final part of your check. So, like you said, there's two different accounts You're receiving your paycheck and you're also paying yourself. So the double payment that option is if it's available to you 401k. There's other vehicles out there.
Speaker 2:As a result of my track record of retiring at age 55, I learned something. Here's what I learned. I learned that the 401k is an excellent tool if your employer offers a match. If the employer doesn't offer a match and the 401k money is available to you, or the 401k account is good if you're good at managing finances, then you don't need the 401k. There's something out there called a Roth 401k and the Roth 401k. The only difference is is that the money's paid into your Roth after taxes.
Speaker 1:After you cash your check.
Speaker 2:After you've cashed it. So if you're a good manager of money, then take advantage of that. If you're poor manager of money, then the 401k may be your forced way of saving, a forced way of putting money and paying yourself. If you are in that, how do you say this? If you're trying to decide what's right for you, you have to sit down with a pen, a piece of paper and say to yourself I know myself, this 401k forces me to say because I'm just not good, temptation gets in the way and I end up buying something instead of paying myself. So the 401k from your employer would be a good option.
Speaker 1:So that's true, but there's a lot of folks out there that don't have that option. And so for those folks that don't have that option, right, and the self-discipline right. That option's great because it takes the burden off of you having that self-discipline to pay yourself first. Right, because it inadvertently happened, because the employer did it. I agree that if your employer is matching. But there's other ways if you can be self-discipline. And what's great about it?
Speaker 1:Today's world, mr Banks, compared to 20 years ago, 30 years ago, when you were out earning your money and putting your money in those accounts, because of technology, today there's so much automation that automation helps people be disciplined with their money. So you can open up, maybe, your account, like I'm with Vanguard. I have an automatic deposit into my Vanguard account. That happens every month, I don't even look at it, it just does it automatically. And there are other apps and different things that we can do out there that will automatically put money in your savings or whatever account you want. There's apps out there that will, every time you use and you gotta put these cards in there, whether it's your debit card or a credit card you do what's called rollup, meaning I bought something for $14.37, let's just say right, the balance of that money that 53 cents will roll up into my savings automatically.
Speaker 1:So these tools that didn't used to be available to you and me when we were in the younger years are available today for folks. I highly encourage people to use these tools right? Because when you're going through life just going to Starbucks or out to eat with your wife, whatever, and the bill is, whatever the bill is, it never lands. The bill's exactly $47, right, it never lands that way. It's always got some change in there 22 cents, 47 cents, 98 cents, whatever the amount is, doesn't matter. But there are apps out there that will roll your money automatically into a savings. How do you feel about that?
Speaker 2:It's another solution and another tool. Kevin, I think, listening for those folks out there that are listening to this podcast, you understand the concept of living paycheck to paycheck. You would like to get out of that. You'd like to break the chain, get into a mindset that says I'm going to force myself to save, however small the amount might be. There's a theory called if you continue to add to things and it's when I say things I mean an account, for example, like the roll up the money goes into the account. The account has an investment vehicle in there. The investment vehicle may invest in a stock or a bond or any other way of taking that money and allowing it to grow, putting the money to work. So if you take advantage of the compound interest that you have and you continue to add to it, especially if you don't know about it, it just rolls up and you look at your balance or your statement and says every number's even and you think to yourself well, it's even because I'm rolling up. It's just another solution, another tool for your audience to listen to and to take advantage of, Because if they're listening to this, they want to get out of the paycheck to paycheck rut.
Speaker 2:I would say take some notes. If you're not already taking advantage of the roll up, if you're not already finding a way to get yourself into a saving mindset, a pay me first mindset, what a great way. Because, to be honest with you, Kevin, I didn't have parents that told me these things. They didn't say hey, Aaron, do you understand what saving is, and are you bought into the fact that you have to pay yourself first? No, they didn't tell me that. I had to figure this out on my own. And here you have a tool, you have a podcast, you have a roadmap, you have a book. These are vehicles or tools to use for advancing yourself, feeling good about yourself, Because I tell you what? There is a certain amount of satisfaction that comes with you hit a goal, especially a savings goal, Kevin.
Speaker 1:It does, it does. Let me read a little more about this article. This is more from personal finance. Women are significantly more likely to live paycheck to paycheck. Did you know that I did not? Here's where to invest your cash to save taxes in 2024. The new FAFSA will be available December 31st. Right, that's automatic savings, but spending may not be as simple as people wanting to indulge. Many Americans simply don't have enough money to make ends meet because their incomes have not been keeping up with the rise of cost of living. So we went back to the $100,000 a year. $100,000 a year? Well, here we are in 2024. $100,000 a year in 2024 is not the same $100,000 a year as 2004, right, well, or 1994.
Speaker 2:Just think of the word inflation.
Speaker 1:Inflation, right, and everybody's heard that on the news that wages don't keep up with inflation for sure. But if you already know this, you hear this on the news wherever, watching it at home, in your car. Wherever you're hearing it, it doesn't matter. You have to take heed to this information that you're hearing. Right? It says the idea that people say and they just hit a point where they feel like they deserve to spend more. I fully disagree with that, says Sabrina Allen, a budget coach who offers insights and guidance to more than 100,000 TikTok followers on how to be more conscious about spending With. Most people don't have $1,000 in the bank, like most cannot handle a tire blowout or they're going to put it on its credit right? Allen breaks it down to lifestyle inflation in two buckets. One that is general idea that lifestyle inflation is, which is the buying fancy cars, the buying nice things along those lines, she said. The second bucket said it's more about everyday things if you're living paycheck to paycheck, that you're going without. These may be necessary goods or services, such as going to the dentist or getting in the car's oil change regularly, right, there was a time in my life when an oil change was just like, not even a priority. Allen said I'm trying to keep tires on my car, I'm trying to keep it running, I'm trying to keep the registration paid, I'm not concerned about oil change. And we all know what happens you and I know, owning vehicles for 50 plus years If what happens when you don't change oil regularly, right, the longevity of your car shrinks by half. So now you have bigger car expenses because you don't lay out the in today's world.
Speaker 1:I just had an oil change two days ago was $80. I remember oil changes to be $30. Now it's $80, right. These are good points, right? When people work out their budgets and they don't put money in there for the things that don't happen every month? Right, oil changes don't happen every month. For most people, they happen every three or four months. Right, but you still so budget and put money away for it. Tires that's not a monthly expense, but guess what, on average, every two years you gotta buy tires. And how much are tires today? You just bought tires for your car recently, right? Would you end up spending for tires on your car?
Speaker 2:I believe it was $1,100.
Speaker 1:$1,100, right. And if you live in paycheck to paycheck and you need $1,100 for a set of tires, what do you do? Says here, you gotta go put it on credit Now. We now know that credit card debt surpassed $1 trillion, right. It also said in here that most Americans don't have a thousand dollars put aside for an emergency. Is buying tires an emergency for your? Is that an emergency? Would you consider buying tires for your car because you know the tread's all gone? Is that an emergency? Yeah, pretty easy.
Speaker 2:That's an emergency.
Speaker 1:Right, I wouldn't say an oil change is an emergency. An oil change is something that there are repercussions. If you don't do that, and if you don't do that, instead of spending $75 on an oil change you're gonna have to pay $1,000.00. Three to four times this year.
Speaker 2:The following year you can have a car maintenance bill that could surpass, say, $2,000 because you didn't change the oil, plus the downtime of having your vehicle to research the downtime right maybe you gotta go rent a car or you're like hey, asking people can I get it right here, can I get it right there, Right?
Speaker 1:so this is a very interesting article, and especially learning that, as far as the people that live in Paycheck to Paycheck, women are more likely to be living Paycheck to Paycheck. That's a whole different psyche. Why do you think that is? If you had to think about why are women more likely to live Paycheck to Paycheck than men?
Speaker 2:You know, I'm not sure of the exact answer. I can only speculate and say that my speculation would be that women have a tendency of ignoring things that are minute in detail. The fact that you mentioned an oil change Well, you know most guys back in the day we just change our own oil. I mean we could go to the auto parts store and spend $20 on six cans of oil and another $10 on a filter and we'd get up underneath the car and crank that plug loose, let all the oil drain out. We had a little can we put the oil in and then we pulled the filter off, put the new filter on, get the six cans of oil, get a little can opener and pop that can opener and put the oil in the crank case and off we go. So it's a little bit different when you do things yourself.
Speaker 2:Now, today, today's modern vehicles, you know you have to make a schedule schedule in a time in your schedule and get to the auto parts store or the not the auto parts store but the oil change locations or the car dealership. Wherever you go, get your oil change and you have to make it a regular part of your schedule. If you don't, the consequences. You know, back in the old days the car would freeze up on you, the motor would just lock up. You know, because you're not checking your oil. If you're not checking your oil and your light comes on and says, oh you need an oil chain or you need to check your oil and you aren't familiar with what the process is, you know the women might look at that and go. I'll ignore it, maybe it'll go away. I don't know the true answer for women versus guys, but I could only speculate.
Speaker 1:I mean you could be right. I mean it could be again. There's, I'm sure, a bunch of reasons out there, but let's just say there's some women out there. You've been married for five plus years. It's the type of thing your husband always took care of and all of a sudden you find yourself divorced or a widow or something of that nature, and it's not something you normally was on top of your mind. You would ignore that, like you said, right, until something happens. The car doesn't start, doesn't want to move, right, you're like crap, something's wrong. Well, yeah, you didn't keep up on the maintenance of it. So there's, I'm sure, a variety of reasons why women are more susceptible of living paycheck to paycheck. I wanna for sure make sure that we don't think that women are definitely not inferior to us. It's not that they're not smarter than a man. I think there's just things that just aren't top of mind, that are certain things that are out there, hard to say, but that was an interesting quote that I saw there, that it was women.
Speaker 1:Let's go move on to this next article that I found, which is titled the majority of Americans feeling financially stressed and living paycheck to paycheck right. So it goes on to say here. Cnbc First, business Worldwide and Survey Monkey today announced the results of their latest CNBC Money Survey. Right? The survey, which polled over 4,000 adults in the US, finds that three quarters of working Americans 74% say they are stressed about their personal finances these days, which is slightly higher than last year's money survey of 70%. And more than half of Americans 61% consider themselves living paycheck to paycheck we talked about that which is up from 58% March of the previous years. Now, seven to 10 Americans work workers say that they would need an annual salary of more than 150,000 a year to feel financially comfortable. So let's talk about that real quick, right? So the surveys are done. We need to know what's going on in America.
Speaker 1:Think about when you go see your doctor. What's the doctor gonna do? He's gonna ask you why you're here. What's going on? He's gonna ask you questions. Oh, I have pain. Where does it hurt? Does it hurt here? Does it hurt when I do this? Right, doctors have all these questions. They can't help you until they find out what's wrong with you, right, and you have to tell them, whatever those symptoms may be. Same with your money, right?
Speaker 1:So people are feeling financially stressed, right? They're seeing the numbers going up right From 22 to 23, which is these are big numbers, and they're feeling stressed about living in paycheck. Of course, you're gonna feel stressed about barely making your bills right. Living paycheck to paycheck means you're just making your bills. You really don't have that. We talked about trying to put away 15% of your paycheck, that they're likely not able to do that, and we talked about why they're not able because they're living beyond their means. But it says here seven out of 10 workers, seven out of 10 people, say right now and today and this is two months old, this article that they need to make 150,000 a year to feel financially comfortable. That's 50,000 more than the example used before Now. 150,000 a year, that's a lot of money. How do you feel about this new statistic? That's what they believe now. That's a belief system out there. They need to make a minimum 150,000 a year. What do you feel about that?
Speaker 2:The main reason they feel that way is because there's something comfortable about looking and going shopping and taking care of your monthly expenses. If you look in your checking account and you say it's a week before payday and you look at your low balance in your checking account and you say to yourself, I've gotta do grocery shopping, I've gotta do this. There's a few things you have to do before the next paycheck arrives. There's a certain amount of stress that you feel when you realize I probably don't have enough money in my checking account in order to keep up with my expenses for this next week before the next check arrives. That's stressful. So you say to yourself if I had more money in my checking account and replaced it with more money, then the stress goes away. I can deal with anything that comes my way from an expense standpoint because I have money to cover it.
Speaker 2:If you don't have that money, if you're in a situation where you've got grocery shopping to do and typically you know your grocery bill is $150. When you go grocery shopping and you're looking in your checking account and the balance is $89, you say to yourself well, I've gotta go grocery shopping. What can I not buy until the next paycheck arrives. What can I get by on? That's gonna get me through and to that next paycheck. That is highly stressful, kevin. I don't even know how to even give someone the encouragement to hang in there when we kept a week and month after month, you find yourself in a situation where you don't have enough, and what's going to be the thing that you're not going to purchase? Are you gonna tell the kids that we're gonna have pancakes for dinner Because I can make pancakes pretty inexpensively and we're not gonna have anything to go with that? Are you a single person and you realize oh, my car insurance is due at the end of the month, my balance and my checking account is.
Speaker 1:I know, but banks, we're talking about people who say they can't live comfortably unless they make $150,000 a year. Let me ask you, okay, because you retired at 55, 12 years ago in your highest wage earning years, did you make 150 grand a year? Yes, okay, and what was your lifestyle? Because I wanna break this down, what I see out there in America as I drive around all over, right, and I'm gonna get into what today's average car payment is, which is, I don't know if you know what it is, it's mind boggling, it's crazy to me. But and we know what mortgages are high now, right, but at 150 grand a year, what was your lifestyle? It was fine, I mean. So talk to me about again, 150 grand a year, which breaks down after taxes, about $8,700 a month. Okay, and if you were bringing in $8,700 a month, was your lifestyle? Were you driving? So this? Let's just say for you, 20 years ago, and 20 years ago you could drive on a high end about $75,000 car. Today they're $100,000. So, were you driving a $75,000 car? I was not, okay. Were you living in a home that was below or above the median price of your area? In my area, it was below, below, okay, so already, two things, that some of the biggest you know payments that people have is their mortgage in their car, right, so you already were living below what most people were living on. That's correct. This is why, and but you were living that way because and I know you now and I know your story because you were putting away 15 or actually a little more percent of a paycheck put away for the future. This is why you retired at 55, right? This is why, as I read this article and it's telling me that they think they need 150, you know why? Because they think they need that $100,000 car.
Speaker 1:And I was gonna use the Cadillac Escalade as an example, but the Cadillac Escalade today is about 110 to 120,000 for an automobile. If you're ready to buy an automobile for 120 grand, you should probably be making minimum 400,000 a year, right, but these people aren't. They're making the 150 grand a year. You don't want a Cadillac Escalade. Payment is today, I have no idea, about $2,000 a month. The average car payment in America today is right at just a shy of $800 a month. Right, that's a big number. That's back in the day. A mortgage, right, mortgage used to be 800 a month and now today people are using that as a car payment. So If you're out there and you're making that hundred or even hundred and fifty, and you're still living paycheck to paycheck, it's why you live in above your means.
Speaker 1:Meaning, if you had a roadmap, if you had a plan for your life and you had it mapped out. Now, when I say these things, I want people understand that Just because you map out a plan, you sit down and you're let's I'll just use an age 30 and you want to retire by 60, you know you're gonna work 30 more years. You're probably gonna own two, maybe three homes in that 30 years span. I mean, map these things out, map them all out, what they're gonna cost and then reverse engineer what you shouldn't shouldn't be spending now. Are they gonna change as things go along in life? A hundred percent? These are.
Speaker 1:You typically change for people Once or twice a year, right? They change because we either make more money or make less money. We get out of debt or we get more in debt. All these factors when these things come across your plate, or or factors that you need to take in consideration when you're filling out an Actual roadmap of where your finances should be and where you want to go right now. For some people you tell me, mr Banks, for how many years would you say your finances stayed pretty tight, really the same, and that you just there's a term out there and I know you and I've heard it Just put your head to the grindstone and just full steam ahead. Don't worry about the outside noise, Just go to work, do the right things with your money. The money will take care of you. You take care of the money, the money to take care of you. How many years of your life Do you think that you stayed the status quo?
Speaker 2:Well, I mean, once I made my mind up, when I hit the age 45, for example, I I realized, wow, my retirement is within my grasp 10 years from now. Okay, so if I get to Retirement, will I be able to retire when I have to continue working because I didn't manage my finances? And the answer was well, you're gonna have to get rid of debt. And I tried to use that as my kind of Target. How much debt can I get rid of in the next 10 years? Well, I can't get rid of my mortgage. I bought a 30-year mortgage when I bought the home. I'm only 15 years into that, so that's not gonna work.
Speaker 2:I just in my mind. I just took a piece of paper and a pen and I started looking at my expenses and I said to myself okay, I want to live a certain lifestyle that I'm already living. So any pay raise that I get between now and the next 10 years, I'll bank it. I'll just pretend like I didn't get it and I'll continue living the way I am now because I'm happy with it. I'm able to pay my expenses, pay my bills, I'm saving, so I'm gonna maintain that. And then, as time went on, I picked up a couple pay raises. I got lucky enough to get a couple nice pay raises and I just banked that money and what I Real quick, real quick.
Speaker 1:So people understand when you say you banked the money. I don't want people to think that mr Banks just shut that money in a savings account because I know you didn't Explain to them when you said that I banked the money. What does that mean?
Speaker 2:Well, in my particular case is a little different, because I had a 401k. My employer offered one. They offered a match, so I Put enough money into the 401k to reach the match. Then, as I got a pay raise, that took the additional money and put it in the 4k over and beyond the match, even though the company wasn't gonna match it, I put the money back into the vehicle. So that way I didn't have to see it. I got the pay raise, whatever the dollar amount was that month. I just took that money and said, okay, don't give it to me, put it back in my 401k. If you're gonna pay it to me, pay it into the 401k.
Speaker 2:And I lived off that, that 10 year income level that I was starting at for the rest of the 10 years, and I was able to accumulate enough money To pay off my debt. Because and you know, let's be honest if you have a car and you say to yourself, okay, I'm paying a car note and insurance Insurance is not gonna go away, but what happens if I didn't have that car note? I could bank that money. And so you work and you say to yourself, okay, I got the car, I'll have the car paid off in three years. Okay, I'll pay the car off. My target is three years. Can I go the rest of the seven years and we're using that 10-year Time frame? Can I go the rest of the ten years with this same vehicle? I don't need to buy a replacement car. This car works just fine. And that's what I did, kevin. I just started.
Speaker 1:I turned myself into a hoarder of cash but let's talk about, so most people who want Gratification for what they do. Right, you got to feel good about it. What? And I'm gonna ask you, and I'm not sure, and answer it the way that you want, but it seems to me that I Did things similar. And what makes you excited by Buckling down and living that same lifestyle for ten years is that you got to watch your account grow. And so, by watching that account grow your one, your two, your three years in, your five years, your seven years in Was that enough excitement in your mind, knowing that you were gonna reach that ten-year goal, that kept you going and didn't allow your mind to say, yeah, but I've had this car nine years. I want a new car. Everybody always wants a new car, right, but what made you keep going? This is what's people are struggling with. I think they understand what you're saying and they want to do those things, but they don't do those things. So what? What motivated and pushed you to to do? And the biggest part of this story that I really love, guys, is Ten years.
Speaker 1:Mr Banks did this and ten, he made a decision. It was a ten-year goal, right, he wrote it down as a goal. I'm going to live this same exact lifestyle, which was a comfortable lifestyle. We'll talk about what that lifestyle wasn't a minute. But and he, everything over and above, he put that money to work. Remember I talked earlier about it's our Responsibility to make money, make money, and that's what you were doing back then making money, make money, but what kept you motivated? This is. I think this is the most, this is the biggest thing we can do to help people right? This conversation is about people that are out there listening. What can I do? I know what you did. What can I do? So what can we do to share with them that motivated you, that might be motivating them, what motivates you to stay in that ten-year plan?
Speaker 2:I think it was a combination of success and saving and Accomplishing a task. So the task was my ten-year plan, put it together. But there was something exciting, kevin, about watching a account whether it's a savings account, an investment account for one K, whatever the vehicle you are putting the money in and that you watched that thing grow. And there was a certain let's just say, after the end of the first year, I had about I don't know $4,500 and free cash just sitting somewhere and I looked at that. You know something, I can take that $4,500 and do whatever I want with it. And then it was 5500, and then it was 6500, 7500. And when you get to ten thousand dollars and just sitting there in free cash, you say to yourself I did that, I Start it with zero and I'm up to 10. Thou, wow, I'm only five years into this thing and I'm at ten thousand dollars free cash, and it excited me. So I thought to myself Okay, so I have less debt now. So now the the compounding of that savings becomes easier because you have less expenditures per month.
Speaker 2:Well, I got rid of my car note. I got rid of Another expense, whether it was a credit card or some of the revolving debt. It was gone and I thought to myself I'm not, I'm not a slave to my debt. I don't have to say to myself, well, wow, I got that money two years ago and I charged up that credit card account, but I've been paying them 24, 25% interest, and why am I giving them my money? Well, let's pay off that credit card, let's pay off that revolving debt. I got rid of the car note and then the ability to save becomes a larger amount over a shorter period of time and, next thing, you know the success. It just felt so good.
Speaker 1:Kevin, let me ask you how often Would you look, would you watch, would you look in that account? How often would you look and go? It's up $100, it's up $75 or whatever that number is. How often would you look at it? Right, because you know, for some folks out there today, because everything cost so much money today right, $50, $60 to fill your tank you can't get real excited that it took you six months to make 100 to save $100, right, that's, that's something hard to get excited about. So, but how often were you looking at your balances and it said, ooh, it's moving more than I thought and I'm gonna keep going because I like watching that needle move, so to speak? How often were you looking at it? Should we look out? And what's your suggestion of the folks that are out there? Should we look at it or should we not look at it?
Speaker 2:Well, in my particular case, there was a statement that came in from the brokerage house of the brokerage company. That's once a month, once a month, and that statement would come in and I would salivate of Opening the mail to see what happened in the previous month. But or for month to month. But there's also another factor is going to be is that, even as you're putting money away, even if you're looking at that statement, you're also realizing that if I'm managing this properly, I'll have less debt. So each month, I have less outlay. So you're you're winning on two ends. So if you're managing debt so I'm gonna share anything with anybody out there just listening on this podcast is that if you Are monitoring something and you look at it and you say to yourself, what can I do to make it better? That's a starting point. If you're not monitoring it, if you're not doing things that are gonna help that Either reduce your debt, increase your income, then your thought prior, your success with money is not going to be Something that you can be proud of.
Speaker 2:It made me happy to see that I got rid of my car note or I Got rid of a credit card or some revolving charge card, you know, and I did some things and I said to myself Wow, I did that by planning. So if I can teach an idea, I taught both my my kids. The same thing is that you know, once you Start paying yourself and you start looking at what the concept of compounding can do, it really is a satisfying. As I'm looking at my statement, I'm really satisfied going. I did that, I stuck to it and look now, that was that, that was what drove me, kevin.
Speaker 1:All right, let me finish. This article here. Says after it says they need, if they feel that they need, to make hundred fifty thousand year to feel financially comfortable. Says. However, the survey reveals that homeowners feel significantly less financial stress For those who own a home. So if you own a home, you have less stress. If you rent, you have more stress. Right, is what it's saying in here. Now it says, with only 30% of homeowners saying they are very stressed, compared to almost half of those who do not own a home, 46% feel stressed. So if you're a renter, 46% of you are feeling stressed. If you're a homeowner, only 30% of you are feeling stressed. So there does come a significant stress level change when you're a homeowner. Maybe it's because, like we just talked, the fact that you know your money's working and it's growing, maybe that helps you feel not stressed, right?
Speaker 1:The survey also highlights that most American workers 60% have a retirement plan through their work, either 401K or 4 or 3B. Among those who contribute to their retirement plans, almost half 40% contribute as much as they can afford and just more than half 54% who contribute to the 401K say they know that investments compromise it. And majority of those with 401K 56% say they are not on track with their retirement, their annual 401K savings to live comfortably, meaning they're not putting enough in that you're supposed to be putting in right. Again, experts tell us we need to say 15%. If you're not saving 15%, you're not staying on track. Right, and that's what that's saying here. It says here those with lower incomes are less likely to say that they are on course in. Slightly majority of workers over the age of 65, 53%, say they will be able to retire comfortably with their savings. So, just as you did, right, you put that 15% plus percent away and you retire to 55 and you've been living comfortably ever since Earlier.
Speaker 1:When you stated that when you made that decision, you had that final 10 years from 45 to 55 because you retired at 55, you made that decision that, hey, the lifestyle I'm living right now is a lifestyle that I can ride the way through, right, and I think that's the difference between you and someone parallel to you who was making the same money but didn't make those decisions. They decided on the new car. Instead, they decided on the bigger, lavish vacation. They decided on, say, nicer clothing, watches and shoes and all that type of stuff, and they didn't retire at 55, like you did, and living the same comfortable lifestyle. I wanna make sure that people are understanding our conversation and putting it into perspective. Meaning without getting in full detail, can you just talk to the people the lifestyle that you chose to live, to ride that last 10 years out? Because I don't want people to think that you lived in a pover's manner, because I know you didn't. But what was just roundly, without getting too specific, was the lifestyle that you lived.
Speaker 2:But it starts with in my particular case, I had a spouse, so I had a spouse, I had two children.
Speaker 1:You had two incomes.
Speaker 2:Yeah, well, her income wasn't very much, so she worked because she wanted to work. So it's a little bit different there. Could she have stayed home and not had an income, or we didn't have that second income. Sure, it would have been a little bit tougher, but I had gotten to the point where in the last I wanna say last three years before I retired my wife's paycheck, we banked completely, and anytime you have a situation where now I've raised two kids, both kids are away to college or out on doing living their own life, so the expense of having two other people in the house gone. My electric bill was less, my water bill was less, so now it's just me and my wife. But I'm unique because that satisfaction that you're after as far as keeping up with the Joneses, she didn't have it and I didn't have it. She wasn't a spouse that.
Speaker 1:She wasn't a spender.
Speaker 2:She wasn't a there we go, that's right. She wasn't a spender and she wanted to be happy, and I provided everything that she needed, based on what her requests were yeah, but let's again lifestyle.
Speaker 1:You lived in a average modest home. You didn't live I'm sure you're I mean, I didn't know you back then, I didn't ever see your house, but I know how you live today and if you lived anywhere similar to like you live today. You lived in a nice, clean home, good, decent neighborhood, drove just your average nice car, nothing over the top. We talked about cars. You definitely stay within your means on that. So you still lived a comfortable lifestyle where you went out to dinner regular, did an annual vacation, these types of things. All of that.
Speaker 2:I even had a timeshare and even at night, I remember I shared that with you. So you know. So it's not like I didn't splurge on nothing. You know we did have a timeshare. We take off and use our timeshare and go different places Hawaii or any of the other locations that the timeshare offered but you know you had to pay into that. So that was an expenditure, that was a monthly expense. We had agreed to do that because we figured in our retirement years we would really take advantage of that timeshare and visit places that we hadn't visited before.
Speaker 2:So you know it's not like we didn't, we weren't living happily. So that was one of the targets we had is, you know, even though we're saving and we're gonna be frugal in our expenditures, we still wanna live life, we wanna have a good time, we wanna be able to go out to dinner every once in a while when we feel like it and, you know, not worry about what it's gonna cost. And I think that satisfaction and that happiness, especially in those last three or four years before we retire, knowing that retirement was right within our reach, we just had to maintain that, stay healthy. And you know, as we got to the last year, that last 12 months. I can tell you it was a great feeling knowing that all of my planning had paid off. I was debt-free and I was about to retire.
Speaker 1:It was a good feeling. Well, I think it sounds like and again, for a lot of you folks that are out there if you're married, if you're in, hopefully, a similar situation, and I wanna talk about how your wife didn't have to work what she did and the last three years all of her income was put towards the savings in the investing for the retirement plan. Right, you had a retirement plan that had this hugely springboard, that final last surge, that last three years, right, because I can only guess that your wife probably made 30, 40, 50,000 a year. Let's just say, would that be fair? To say, yeah, it's a ballpark right there.
Speaker 1:I mean, that's a significant amount of money to save. And, guys, when you could save that kind of money in understanding how compounding works, if you could save 30 grand a year, three years in a row, 90,000 and it's compounding. Oh my goodness, now you're receiving literally thousands of dollars monthly from you didn't do anything to put except put your money to work. So we go all the way back to the beginning. Where I share with people like your, job in life is not to go give value to people, get a paycheck and then go buy stuff. Yeah, I want you to buy all the stuff that you want after you pay yourself first, because compounding is going to take an effect. It's one of those things. It's snowballing, it's. You know, snowball starts just a tiny little nothing and if you roll it down from the top of the hill, by the time it gets to the bottom it's a giant 10 foot round ball. Right, that's money and you didn't do anything. Compounding is like gravity, it's just going to happen. You can't stop it. You cannot stop compounding, it's going to happen. Let me read here Inflation is still the primary source of stress for Americans these days, but this survey reveals pockets of relief for certain lucky people. This is what Laura Ronsky, director of research for the Survey Monkey. If you're lucky enough to own a home, you probably have a very low mortgage rate. If you bought it in 19 or 20, that alone clearly relieves some of the day to day financial strain. Additional key findings from the CNBC monkey survey. So I guess we could say you're lucky if you were one of the and it's a lot of Americans out there that did buy homes 19, 20, 21 when the rates are really low before, below 4%, and they're never going to go there again. Guys, just trust me when I tell you that, right, I'm in real estate, I can study. I don't think in history we'll see it go below 5% ever. So if you were less she says one of the lucky ones and you have a mortgage, that means it's typically almost free money and the rate that your home is growing, the appreciation is all yours. You don't have to worry about giving that to Uncle Sam. Right, that's huge, that's really big and I guess I'll agree with her using that term. If you're one of the lucky ones, right, because not everybody purchased a home in that two and a half year time period when those rates were two, two and a half percent, which was incredible.
Speaker 1:Inflation remains the top financial stress impacting Americans. Inflation meaning everything costs more money. I hate going to the grocery store. I went I was there a few days ago with my wife. I usually don't like going. I let her go, I don't want to see it or know what she spends. Because every time I go there and you put whatever on the conveyor belt, they tack tallied up a hundred bucks and it's two or three bags only, where 10, 15 years ago, a hundred dollars would completely fill a shopping cart full of everything that you wanted, right, like a lot of food, and now a hundred dollars only gets you two, three bags with a groceries. It's a little depressing and that's why that's what's stressing people out. They can't even afford to buy food. A hundred dollars doesn't go where it used to go.
Speaker 1:More than half Americans 61% say inflation contributes to their financial stress, up two points in March, holding the top spot as the primary financial stressor. They're all worried about inflation. Banks, all of them Years. I'm comfortable, you're comfortable. How much in your mind does inflation stress you out?
Speaker 2:I hate to use the word stress when it comes to inflation. It's just frustrating.
Speaker 1:More than for me Okay, so there's stress and there's frustration two different things.
Speaker 2:So for you, it's not stress, it's frustration, it's frustration because, just like you described, you grow grocery shopping. I love grocery shopping. You don't like grocery shopping. I love grocery shopping. I don't know what it is about my personality, but I enjoy going into the store. And my wife, when she used to shop with me, she'd say why are you going up and down every aisle? I thought we just were here to get this. I said, well, you know, this is part of the shopping experience, honey, you have to understand. I'm a shopper. So with that in mind, I say to myself you know, I just bought a can of tuna and I paid $3.75. Now you're telling me I have to pay $5. It's the same can. So is the tuna better? Is it richer? I'm using that as an example.
Speaker 2:It's just frustrating when you go there and you go, somebody is making more money on a product that's the same product it was when it was at the other price. And that frustration translates over when you go to the buy milk or you buy an eggs and you say to yourself wait a minute. I remember and part of it is my age, because I remember back in the days when my shopping with my mom and we'd go into the store and a box of cereal was $1.75. $1.75. And we'd have a full box of Captain Crunch. I was a happy camper, kevin. So nowadays you go to buy a box of Captain Crunch. It's $3.89. And we go wait a minute, it's the same size box, it's the same cereal. I still have to put milk in it. So you have to say to yourself okay, this is the sign of the times.
Speaker 2:And as you get through the process and frustration sets in for me some people would stress out it's like I used to be able to afford to pay for a cereal and a box of oatmeal and a carton of milk.
Speaker 2:Now I'm stressed out because I can get the milk and maybe some oatmeal or cereal. It's going to have to be one or the other I have to rotate through. So that can be stressful. And when you have children at home and it's not an option as to whether you're not, you feed your kids and you're thinking to yourself oh, my goodness, how much money do I have in the check? I think I have $101 left. This grocery bill is going to be $99. I'll get less items and I have to go home and tell everyone we're going to have to make this work. That's stressful, that is very stressful. And when you're a young, maybe a young couple, or you're a young person and you're saying to yourself I didn't even notice that the prices are different, my money doesn't go as far, I can't get as many items as I used to get. That's stressful.
Speaker 1:Well, I think the grocery store, as an example, is one of the places where people would go and feel like I'm going to do a little extra. Maybe you saved on something else. Let's say, you saved $1,000 for tires and you only spent 800. You get $200 extra and you go to the grocery store and you're like, hey, I got a little extra money, I'm going to buy a couple extra steaks. Or maybe I'm going to buy some food that we probably shouldn't be eating anyway, but dessert food, right, you're just going to spend a little more at the grocery store, right? That's how I think, how people used to think If I say there I like, I like, like you, you like to splurge at the grocery store.
Speaker 1:But nowadays, with inflation where it's been, people don't feel that way. It says here. I mean, they are financially stressed about inflation. Everything costs more money Food, gas, going to dinner, going to a movie, doing anything that we all want to do outside of our homes costs more money.
Speaker 1:And unfortunately, people in today's world are not spending their money. They're spending OPM money, credit card money, and that's why the credit card debt has gone and reached surpassed a trillion dollars. Now some folks need to spend that credit card money to buy food because they don't actually have the money. Those people I really feel I feel bad for them. They're in positions that I have to use my credit card or I can't feed the kids, I don't, I don't get paid for another three days, five days, however many days, and I have to use it. Right, but I still think there's some bad spending habits out there.
Speaker 1:Because if you're in that position where you have to leverage a credit card to buy your groceries because it's Tuesday and you don't get paid till Friday and there's no milk in the house and cereal for the kids and dinner and whatnot, but then payday comes, you don't pay your credit card off. You decide, hey, you feel mentally I have that extra. Let's say, you spend $75 at the store on Tuesday. You feel like, mentally, I have $75 extra dollars and you go spend that on something else.
Speaker 1:This cycle repeats itself week after week after week. Next thing you know your $100 in credit card debt, $200 in credit, $300, $500, $2,000 in credit card debt. Next thing, you know your thousands of dollars in credit card debt because it's slowly creeped up on you, because you're doing things that you told yourself on Tuesday I'm going to use my credit card right now, but I'm going to get paid Friday and pay it off, right? Have you ever found yourself having that, that, that verbal warfare, in your mind? I'm going to do this today because I'm going to pay it off later. Did you ever do that?
Speaker 2:Well, and the worst part of that is when you get the credit card bill, you're paying the minimum amount of payment on the credit card, so that money that was there last month is going to pay. You're going to have to give the credit card company 24% on that money. The next money, the next month, you add more credit debt and you're still paying on the previous balance another 24%.
Speaker 1:So now the compounding is going the other direction. The compounding is not in your favor, the compounding is against you, and this is why people struggle to get out of debt. Now there's ways to get out of debt, right. So it's it's mind warfare out there with finances for people in America. This is why they're living paycheck to paycheck. I say they're living paycheck to paycheck because they don't know where they're going, right. This is what I teach.
Speaker 1:This is my book, my book breaking the paycheck to paycheck cycle. You could pick it up on Amazon right now. Right, it's been out about a month. It's doing good sales. I hope people are out there and reading it and I'm slowly getting some testimonials in so people understand it's a great book, it's a good read. It's designed to get you to start to think and act different with your time and money the rules of the game, so to speak. I have my new roadmap to financial literacy creating a lifestyle by design. See, that's what Mr Banks did from the age 45 to 55. He created a lifestyle by design. He put it together Right, and this is what we need. And so this booklet here. It's fillable, and you guys can pick this up on my website at moneymasterinstitutecom. It's digitally fillable or you can print it out and fill it out with pen or pencil or whatever you want to do. It's a great guide to get you to know where you're going, how you're going to get there.
Speaker 1:You've got to write these things down. I know you're an advocate. You wrote a lot of your stuff down and you still write stuff down In today's world. The younger generation's banks. They don't write nothing down. They just do it on their, either in their handheld computer, their phone, or they just go to their computer and take all their notes and stuff down. Very few people write things down in today's world and I don't know if you've noticed. I've noticed. If I see someone under the age of 40 write anything down, oh my gosh, is their penmanship horrible. It's terrible. I can't even read it anyway. So yeah, don't write it down. If you don't have good penmanship, don't write it down, put it in your computer. But listen, here we are. It's wrapping this thing up. What a good first money talk series and good solutions that you've offered.
Speaker 2:I hope people take advantage of the fact that you have a book available and a workbook available, and these are tools, solutions for those out there that are listening to this podcast and listening to it for all the right reasons, but now you have something that you can take away that book and the roadmap. I think it should be on anybody who is in a situation where they are lost and they're looking for direction.
Speaker 1:So if you've been on this podcast before, you probably subscribed. If this is your first time here. Thank you for listening. I hope you got a lot out of it. Please subscribe to the channel. Banks and I are going to start this new series. We're going to try to get at least one, maybe even two of these out a week, talking about the different problems that are out there and try to help find solutions for you guys. So if you're on YouTube, subscribe that channel, that like button, and we'll see you guys next week on the next one, Take care.