Talk Wealth to Me

#023: How to Create a Financial P-L-A-N

October 18, 2019 Felipe Arevalo, Chase Peckham, Katie Utterback Season 1 Episode 23
Talk Wealth to Me
#023: How to Create a Financial P-L-A-N
Show Notes Transcript

One word that pops up frequently when talking about finances or a budget is "plan." A seemingly simple word, but in reality, it's our "plan" for our money that really makes a difference in our wallets.

What does a financial plan look like?

It's different for every person/family/couple. But some common examples include buying a home. Most of us can't afford to wake up in the morning and purchase our dream home later that same day. For a majority of us, we need time to save up money for a down-payment.

So what do we do?

We come up with a plan to buy a home. We determine how much we can afford, we research neighborhoods, school districts, our commutes, etc. Similar plans are made when adopting a pet, having a child, getting married, buying a car, and even going on a vacation.

When we don't have a plan or a goal we're working toward, we're not always mindful of where we're spending our money. And sometimes that can get us into trouble.

In this episode, Chase, Felipe, and Katie chat about why we need financial planning, how a plan helps you stay out of debt, and how to get started.

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Intro:

Welcome to Talk Wealth to Me! A safe space podcast where we chat about anything and everything related to personal finance.

Felipe Arevalo:

The information contained in this podcast is for educational and entertainment purposes only. It does not constitute as accounting, legal, tax or other professional advice.

Chase Peckham:

Hello and welcome to another edition of Talk Wealth to Me where we talk personal finance on a weekly basis and this week the three of us sit and talk about something that really comes up every single week and that one four letter word is what Katie?

Katie Utterback:

Plan!

Felipe Arevalo:

Plan! Phil, what does that a metaphor for? It's your road trip. It's your map.

Chase Peckham:

We're going to talk about mapping out your life, so stay with us. You're already starting to pack for Hawaii when that's three weeks from now?

Katie Utterback:

Well, so I'm going on my honeymoon at the end of the month and I have been counting down to this very exciting vacation since the count was like 200 something days and you can Felipe sits next to me. So I literally have been counting down the days.

Felipe Arevalo:

She has. I asked her this morning, I was like, Hey Katie, you're about three weeks from Hawaii. And she was like, actually, it's,

Katie Utterback:

yup. I was like, yep , 17 days.

Chase Peckham:

So we talk about how time just literally flies as we get older and you turn around in one day, you got kids that are all grown up. But if you are literally counting down for the last 200 days, this, it has gone slowly for you.

Katie Utterback:

Yeah. But I read something that the longer that you plan something like a vacation in advance , the more you actually enjoy it because you've been building up, looking forward to it for so long that if there's something that goes wrong or isn't like exactly as you imagined, you're just so excited to be there. You don't care.

Chase Peckham:

That is, there's a lot to that there . There's a lot to that. And that brings us to our topic for today and what I think is inherently important , um, that you know, it's come up over and over and over again. If you've listened to these podcasts, we talk about it all the time. That, that crazy four little four letter word that , uh, comes up over and over and over again is really the backbone , um, to everything that we as human beings do and do efficiently comes down to that word plan. And yet it's so funny how many of us hate the word plan unless as you pointed out, it's your vacation, right? That a nd a honeymoon to boot, which obviously is a step up in the vacation category, right? I mean, we all look forward, Felipe, you've been on a honeymoon, I've went on my honeymoon couple of years ago, 15 and, but yet I still remember it like it was yesterday and it's one of the most fond memories I have. Um , and, and it probably will be for you as well, and we talk about that word planning over and over and over again when we do our budget presentations , um, savings, you know, when it comes to taxes, whatever different type of financial literacy, financial capability presentation that we do, that word comes into play over and over and over again. Period. Yeah, right. Phil?

Felipe Arevalo:

I mean we talk about, in fact all the time it's in pretty much all of our presentations that we're talking about.

Chase Peckham:

almost all of them. Yeah , we have a metaphor right from the beginning that is a map of the U S and we talk about , uh, if you're going to take a trip and you're going to drive across this fine country of ours, what do you have to do before you leave? And it's lots of different things come up from where you got to stay to snacks. Some kids will be funny and go budget money. You need money, you need money . Really. But that's the idea is that if you're gonna first of all, do something and come up with something such as your honeymoon that I am guessing you have been planning for a very, very long time if not kind of been toying around with since before you were ever even met your husband.

Katie Utterback:

Actually, no,

Chase Peckham:

you weren't into it?!

Katie Utterback:

Well, here's the thing. I always wanted my honeymoon and wedding to be a reflection of both of us. So there were things that like I wanted, like I wanted to get married by water, but I didn't ever have like a specific requirement. Like it has to be this location.

Felipe Arevalo:

So it could have been a pool?

Katie Utterback:

Oh my gosh. My dream was to get married at the end of a dock or by a pool. And then when you say I do to take the plunge, literally. Yeah, that's what I wanted.

Chase Peckham:

I have a friend who did that.

Felipe Arevalo:

That's kind of cool.

Chase Peckham:

in Fiji. Yeah. I didn't get to go to that wedding. I wasn't invited to that one. The idea though is that for something that is that important to you and that exciting planning is no problem. Right. In fact, we look forward to it. Um, it's something we do for vacations. We talk about it over and over again about, you know, if you're going to go on a vacation, I mean, how often are you looking at weather reports months and months in advance and they're not even close to accurate yet. You have no idea, but yet you look because you want to know, do I need to bring a pair of jeans to this Hawaiian vacation and probably chances are no, because it's never that cold in Hawaii

Katie Utterback:

unless you go up to the summit. Right. So there there goes planning, right?

Felipe Arevalo:

Certain hikes?

Katie Utterback:

Right! Now I know if I want to go.

Chase Peckham:

Felipe and his hikes. Are you going to Maui?

Katie Utterback:

I am going to Maui.

Chase Peckham:

We're talking Haleakala. I have done the Maui downhill by the way. back when I was a kid that was super, super fun, but it's freezing up there in the morning and then you get down to the bottom and you are just peeling off layers. But it's a whole lot of fun. But we're going to get off track here.

Katie Utterback:

That goes right back into planning.

Chase Peckham:

It does . Yeah . All the different things you want to do. And some people are, you know, the more efficient that they think that they want their vacation to be because you're trying to make the , the time in your day add up and you're trying to take advantage of all the different things that you can do when you're in Maui, which is a lot. So you're thinking, I got five days there, we're going to try a lot of different things. Some things are all day things, some days are half day things. Are we going to do it in the morning? Are we going to do them in the afternoon? Where are we going to eat? There are restaurants all over the Island. Are we going to just, you know, think about just what I'm saying right now, there's so many things.

Katie Utterback:

Oh yeah.

Chase Peckham:

And, and a lot of them are going to depend on where you're staying. Um , what's easy? Are you renting a car or you're not renting a car or are you going to do the road to HANA? I mean , are you going to do all those things that could make or break your vacation or just enhance it? Or maybe you just want to lay on the beach more often and it really doesn't matter. It's what's best for you. And if we could tie up budgeting and finances, it's exactly that. Except it's just not as much fun that people, we don't look at it that way. You know, we tend to look at finances is our paychecks and the household income. Let's just say we're a family and um, I have one, or you have one paycheck, your husband has another, and together that is your income and you have so much coming out of your checks and then you have what you're going to live on and you've got to make that stretch throughout the month until you get paid again. Right? Whether it's every other week, what have you. So you've got to stagger payments and all those kinds of things. And so you have to make your life work and pay for everything under that amount that you make. Right. Seems simple enough.

Katie Utterback:

if you look at it like that. Yes. It seems simple,

Chase Peckham:

but it's not.

Katie Utterback:

Nope.

Chase Peckham:

As we all know because there's so many other factors that come into it, right?

Felipe Arevalo:

Yeah. It's even the, you know, you have the unexpected expenses, you have the, and those are the ones that people forget about. Um, people can usually remember what their cell phone payment is and car payments and rent. It's those expenses that change or that happen every few months or the tires on the car that people forget to plan for. And those are the ones that usually get them into trouble.

Chase Peckham:

Right. And think about all the different things that when you're planning for your vacation that you don't remember. Like sunscreen, you're going to Hawaii on your honeymoon, right? You're fairly light skinned. Yeah. Would you say so would you say the sun is a little harsh, but it's one of those things where you think, I've got everything planned. I've got it all. And then you get there and you go, Oh, I forgot sunscreen. And then you have to buy sunscreen in Hawaii.

Felipe Arevalo:

And I think they may different sunscreen requirements or something.

Katie Utterback:

They do you have to use a , um , reef safe sunscreen

Chase Peckham:

There you go.

Katie Utterback:

I planned, I did research, cause I know Hawaii is an Island. The cost of sunscreen is going to be about.

Chase Peckham:

off the charts.

Katie Utterback:

I don't even want to mess around with that. So I did research. I know exactly what brands are reef safe. I purchased sunscreen here. Oh it's lucky for me in San Diego I can get sunscreen year-round . Right. But I mean like when I lived in Minneapolis this time of year, there's a sunscreen sale. Go stock up on sunscreen.

Chase Peckham:

Right. And that's, that's my point is you're planning well ahead and you are looking at all the different scenarios that can come with this vacation. So life is kind of a metaphor for, it's just one giant long vacation. And I know people are gonna go, are you kidding me? We work, we do all these things. Their life is hardly a vacation all the time. Well we could talk about whether you have the right mindset for your life in general. Right. And just being a happy person. We are not psychotherapists. So we're , you know, that's a whole different, that's a whole different podcast. I have thoughts on it and I'd love to discuss it, but it's not what we're talking about today. But the idea is that life, your outlook for your life is just one long, let's just say vacation or plan. And you're going to have lots of little mini plans throughout your life, but for the most part, you're gonna kind of have ideas of where you see or you want your life to go and there's going to be lots of different little arm and branches in your life like career where I want to go, right? So when we're talking to college students, what do you want to do for your career? And they probably think one way and they go through their education for that and they might branch off a little bit because of lots of different reasons, right? Circumstance, found out they really don't like what they thought they wanted to do. Um, career changes all the way through. So what I'm saying is you can plan for all kinds of things, but there's gonna be lots of different maneuvers along the way, which Felipe brings us back to those emergencies and those things that come up that we don't quite expect, right.

Felipe Arevalo:

Even when we do the presentation and we're doing the little analogy with the road trip and the map , um, you know, I like to bring it up to the students that would , if you're in the middle of this road trip and you're somewhere through Kansas or something, and um, for some reason the roads closed, like whole bunch of cattle got loose in there, roaming the highway, and they're letting you know it's going to take a few hours to get them back off the road. You know, you could sit there and complain for a couple hours or you could pull out your Google your waze or whatever, get off and find a way around it and just kinda continue on your way.

Chase Peckham:

It's an inconvenience.

Felipe Arevalo:

Yeah. I mean it's the same thing with finances. You know, you can have a perfect plan, but life will throw obstacles at you. And you can,

Chase Peckham:

as it does.

Felipe Arevalo:

complain about it. Yeah, it will to all of us and then, or you could figure out what are you gonna do to get around it and just kinda continue on your financial journey.

Katie Utterback:

I had an obstacle thrown at me this last weekend. Our vacuum died, so.

Felipe Arevalo:

She did mention it.

Katie Utterback:

I did, that's not like all of the money. So we, we actually booked our honeymoon through Costco travel, so our vacation will be paid for before we go, which is amazing. But you know, we wanted to have some fun, extra fun money to go on excursions like the Haleakala sunrise tour, jet skiing or whatnot. We had to use some of that money to buy a new vacuum, which is not a fun expense. Entirely necessary one . But I mean that's just a perfect example from my recent life where, you know, I'm glad that we had a plan to, you know, have an emergency savings so that I didn't have to go into debt over something like a vacuum.

Chase Peckham:

Yeah, because you hit, you couldn't have painted a prettier picture because what is more boring on this planet than to buy a vacuum?

Felipe Arevalo:

Very few things.

Chase Peckham:

Very few things. Because all it reminds you of is that one, your house is gotta be cleaned because it's dirty and it , most people hate vacuuming. Now there's going to be some people like Monica from friends who just enjoyed the heck out of cleaning and nothing owed to my son. So there you go. Klein who loves friends at 11 years old, which we can talk about my parenting after.

Katie Utterback:

I watched that show too I'm more of a Phoebe.

Chase Peckham:

Just find out how adult that show is when you're watching it with an 11 year old. But it's still really funny man. It plays today like it did that. But the idea that you now have to go into Costco, let's say, and buy a new dust devil or whatever vacuum you're going to buy . You're probably in line sitting here going, we're buying a vacuum when we could be doing sunset cruise on a really cool catamaran out in front of mile of Maui. Um, which I have a couple that I can recommend to you, by the way, if they're still around, but that's a metaphor for life. That those are the kinds of things that happen at, you know, that's small, a trivial, right? But there's going to be larger things. Um, you know, you could be that you have to go to the ER because you thought you were going to have that you had appendicitis and there's no way of knowing whether you have appendicitis and you go and you spend all night and it ends up that you have something else. It's gas, but that's a $300 deductible that you're going to the ER for. Right? And you're going doggone it, but that stuff happens, right? And so those are the kinds of things that life throws at you that you want to try to be prepared for, even if it's indirectly not prepared to buy a new vacuum, or you know, go to the ER because you have a pain in your stomach. But those things happen.

Felipe Arevalo:

Well, if you have that emergency savings, that money put aside, at least you take the financial component out of the emergency, I mean, you're still have to face the hassle of going and picking a new vacuum or the fear of having to go to the ER. If you're like me, just anywhere within viewing distance of the hospital, you , your blood pressure goes up. Um, but so you still have to face all those other things. But at least if you can remove the financial component by setting aside money and planning ahead and having that emergency fund, at least you can then concentrate your energy on taking care of the other things,

Chase Peckham:

right? Yeah. The things that really matter to you, the things that you want to enjoy. You mentioned just now, which is how much more are you gonna enjoy that honeymoon, knowing that you're not going to be paying it off for the next year, two years. Three years.

Katie Utterback:

Oh, it's amazing. So good.

Chase Peckham:

You're going done deal.

Katie Utterback:

I've never been on a vacation like this everywhere. It's been paid in advance. You know, so I, I think it's going to be a shock to me when I just get to walk away and be like, that's it. Aloha.

Chase Peckham:

That's fantastic. Hello. Goodbye. Yeah, no, that's absolutely, you're going to enjoy that so much more than that. And again, you know, we can talk about the idea of that plan, whatever that plan is, and consistently creating a budget. You know, we use the word budget and how many people find the word budget is being , uh , a negative word.

Felipe Arevalo:

Well , we always ask the students like, what feelings does budgeting bring? It's always stress. I noticed that boring and.

Chase Peckham:

all over the place.

Felipe Arevalo:

It's all negative though.

Chase Peckham:

typically.

Felipe Arevalo:

Yeah, for the most part.

Chase Peckham:

except, a couple people will say well, it makes me smile and then somebody will say, well, when we have it, and it's right, I mean money can do that to people. And a lot of times people don't want to budget. They don't want to do that because they're afraid that the word. But you know that they're going to be told that they can't do something, that they're going to have to do a way with something they enjoy doing and yet would they not plan their vacation because they're afraid they're not going to get to do with it. No. You plan for your vacation and all those steps so you get to actually do exactly what you want to do.

Katie Utterback:

I'm even planning after the honeymoon too , cause AJ actually asked me, he was like, what are you going to be looking forward to when this countdown runs out? You've been doing this for like two hundred days. So we have a new plan. Like this was kind of something that we had talked about before, but we're saving to buy a puppy, so that's going to be our back from honeymoon, Christmas present to each other. But that's something like we haven't been really going out to eat and instead of it being like, we're sacrificing eating out in the name of our budget, it's like, no, we're getting a puppy. We're saving for our puppy.

Chase Peckham:

You're receiving something.

Katie Utterback:

Yeah.

Chase Peckham:

By not doing things as often as you once had .

Katie Utterback:

Right. And so instead of viewing that as a punishment, like I'm on a budget, it's like, no, that's , this is my puppy plan. You know, and changing that mindset has made it so much easier.

Chase Peckham:

And that's what I'm getting down to is why not? Why? How can we help people flip the mindset,

Katie Utterback:

flip that script.

Chase Peckham:

flip the script and thinking that it's not about what's being taken away, but it's what now I'm going to be able to accomplish and do.

Felipe Arevalo:

And that's a hard thing cause this is this as a society , uh , that instant gratification seems so much more appealing to most people.

Chase Peckham:

without question.

Felipe Arevalo:

Yeah. I could put off eating out, but then I could just go out and eat and then I get to eat now.

Chase Peckham:

Right. And we're all guilty of it. All of us. I mean, we do this for a living and not, you think that my wife and I make great financial decisions all the time. Most of the time, but not all the time. I mean, we're, we're emotional too, you know, and then when you've got four people in that group and then they're emotional, sometimes you're just, I'm tired and I, I, we got nothing in the refrigerator that I can make. And you know what? Tonight, on a Monday night when we should be eating at home, we're going to go out tonight just because I have nothing in me and the kids are going I want Chipotle, I want Chipotle. Because they always want Chipotle. No [inaudible] someday Chipotle's gonna sponsor this, but I want to have.

Felipe Arevalo:

Katie's a big fan. I haven't been in like 10 years.

Chase Peckham:

We're all human. We're all human. And that's the point is, but when it comes down to creating a budget or creating it, it's , it's just coming down to planning. And the , the , the, the fact is that some people are just born planners, are great planners and they're just that type a personality that just, you know, it's just in their DNA that planning comes easy. There's not very many of us that are like that.

Felipe Arevalo:

That would be the minority.

Chase Peckham:

They are definitely the minority. Yeah . And then there's those of us like myself who just.

Felipe Arevalo:

the complete opposite,

Chase Peckham:

the complete opposite,

Felipe Arevalo:

I'm the complete opposite .

Chase Peckham:

I don't like to plan. I, it comes hard for me. I kinda like to live life as it comes. But as you grow up and you grow older, you find out that that doesn't work out so well for you.

Felipe Arevalo:

Not in a lot of aspects. It does not.

Chase Peckham:

It does not.

Felipe Arevalo:

It just gets you into trouble usually.

Chase Peckham:

most of the time. And there's a reason that I went into credit card debt as a young man. My wife didn't, she's a planner. I wasn't, you know, and , and that fear of getting into credit card debt or whatever she had growing up, that was something that stuck with her that I, I don't, I want to make sure that I only spend what I have and even less than what I have. And that's a good thing. But that came naturally to her where just the opposite came to me. I had to learn this was a learned thing and I didn't necessarily like it, but what I found and what I've, other people that we have coached and other people that we have found is that when they do start to make these plans and they do start to see successes and they do start to see savings build and they do get to experience vacations without going into debt for the first time, they start to realize that, man, this is a good feeling. Oh my gosh, we , we can actually do what we want to do. It's just when I did what I wanted to do before it ended up, we'd have to pay it off over the next several years, which then can hinder what other goals that you in your mind wanted to accomplish. Yeah. So why not kind of set out that roadmap, set that course like you would a vacation for the little things in your life, whether it be I'm wanting to buy a new car or put your child through college , um, move to a specific new neighborhood. Um , go to a different school district. The list goes on and on and on and it's very personal. But all those little things matter and if you write them down and you discuss them as a, as a couple, like your new puppy, I mean, you didn't just walk in with your puppy one day and go, look, honey, look, I got.

Katie Utterback:

no, but he knows that I probably could do that.

Chase Peckham:

You could, but it probably wouldn't have gone over as well because you weren't invested in that decision together.

Katie Utterback:

Yeah, you're absolutely right.

Chase Peckham:

And now you're in that decision together. You're both going towards the same thing. So together you made that decision as a couple and man,

Katie Utterback:

you know what you just saying that right now, I realized that if AJ were to come home with a puppy, I wouldn't be mad that he came home with a puppy. It was that he went and he did it without me. Like he,

Chase Peckham:

that's a big decision.

Felipe Arevalo:

cause you'd probably love the puppy.

Katie Utterback:

Oh yeah, I would .

Chase Peckham:

But the idea that you make such that he made such a large decision without discussing it with you, as much as you would want to surprise, let's just say he bought it for your birthday and it's a big surprise. You're ultimately going to love the puppy. Ultimately. You're not going to be mad at him forever. But that's a big decision to make. And it's a life decision, right? You're not talking about whether he , he bought you a lifetime supply of Inn-N-Out, right? We're talking about,

Katie Utterback:

Oh gosh idea.

Felipe Arevalo:

We're just talking about Inn-N-Out.

Chase Peckham:

Good idea, huh?

Katie Utterback:

We're not foodies at all.

Chase Peckham:

No not at all. Can you tell we're hungry?! But the idea that that puppy or are you going to be the only one that takes care of it, he's going to have to take care of it. He's gonna have to feed it. You're gonna have to pick up dog. poop. Kind of have to walk him gonna have to take him to the vet when he gets sick sometimes . So that's a , you know, this isn't something that you're just handing off and going, yeah. All right.

Katie Utterback:

No and to be quite honest, I actually asked all of those questions before even agreeing to get a puppy together, even though I wanted one desperately.

Chase Peckham:

Sure. But there's a lot of things to think about when you're thinking about moving and you want to move into a house from an apartment to a house and you're thinking that that's always what I've wanted. But what do you have to look at? You have to look at, per the square footage. Do I want to pay more for that square footage because it doesn't share a wall with somebody and, or do I want that because it's in the right school districts. It's second two levels that I've always wanted. It's something that we collectively can afford, but do we want it together? And if you're not as a couple comfortable with that decision, then that's something to discuss and move down the road. You don't just go buy a house because you think your wife would want, they'll like it. They'll like it.

Felipe Arevalo:

It checks all the little boxes they had.

Chase Peckham:

Right.

Felipe Arevalo:

That wouldn't end well.

Chase Peckham:

No it wouldn't. But that's the whole thing is if we thought about the household budget, if we thought about it in a way like that, you think about creating your, your vacation, you're gonna want to stick with the plan much more than you would if you just kinda threw caution to the wind and hope it works out. Because most of the times when you throw caution to the wind or you , you just throw it out there to the universe, that's not always going to get you there.

Felipe Arevalo:

Or you might miss things along the way. You might still get there, but you might spend a lot of extra time, money and effort and you might miss on some of the fun things that you could do along the way.

Chase Peckham:

And your husband asked a fantastic question too, by the way, when he said, well, now that we're coming up to the end of this vacation, what else are you going to have to look forward to? That is true in life. We've always got to think what's next? What are we doing next?

Felipe Arevalo:

Yeah, you gotta keep moving,

Chase Peckham:

got to keep moving. So when you're thinking about what's next, it's like, okay, it , at the beginning of the year, we get , uh , my wife, let's say we gets a 4% raise and I get a 4% raise and now we're collectively making 8% more than we were. What do we do with that? Do we put it away? Do we start a new IRA? Do we start a 529 Plan? I mean, think about the little steps that we do. Otherwise it's just, it gets into your paycheck and you do the same thing. How is it, right? Yeah . You don't know any different. Yeah. So you, those are the little things that you want to take a look at and go, what can we do with that? And then it might get you excited, Hey, if we do this now and we start this IRA and we put this much extra into it, man, we, with our 401ks and everything else we have because our financial planners working with us, we might be able to retire here at age 65 when we didn't think that we could, or we might be able to pay a lot more of our kids' college fund than we ever thought that that was possible.

Felipe Arevalo:

Well, it's also the thing of having those , uh, reoccurring small victories along the way that get people motivated to continue to push towards their bigger longterm goals. Yeah, no , they, that's part of the thing when we go over goal setting with students is these longterm goals. You need to set short term little stepping stones so that you can kind of measure your progress A and two so that you can have successes along the way. Successes and or failures, which are also important. Um, so the, you could see if you're on the right track, cause if you wait till the end to figure out if you're on track or not, if you're not, it's too late.

Chase Peckham:

right, Or yeah, it's just in or it could be a, just a step backwards. Um, you're going to have to maneuver, right? You're going to have to take highway 80 instead of highway 70 because there was a snow storm, but you just, you're going to have to account for not keeping up with understanding how and how you're doing along the way. And that's just, if you could think about the way and the steps you're gonna take to accomplish that goal, again, there's going to be times when those steps, there's going to be a misstep, circumstance, whatever it might be, that you're going to be able to make better decisions about which way you go and think about it. I mean, life is full of decisions, right? Where we're going to go on vacation, where we going to live, what we're going to do. Think about this. When you wake up in the morning, when you go to bed at night, what's the last thing you're thinking of as you go to bed? Typically,

Katie Utterback:

typically I'm usually doing some sort of sound bath and like meditating. So I'm probably not the best person to ask.

Felipe Arevalo:

I'm just hoping please baby sleep through the night.

Chase Peckham:

That's great. And that's good. But what before prior to the learning that and how to do that and go to bed so you can rest more peacefully. What would you be thinking about?

Katie Utterback:

Anxiety. Everything I had to do, everything I didn't do.

Chase Peckham:

So typically you're thinking about what I got to do the next day and you're doing the list of countless things that you've got to do when you wake up, when you wake up. Then when you wake up in the morning, what do you tend to think about? What do I have to do today? So you're recounting all these things and you can, I mean, anxiety comes from, Oh my God, the laundry list that we have. And a lot of times if you just narrow those down, it becomes a lot easier to navigate. So you're talking about those small goals, those small term goals , um, that , that's the same thing with money. All those little things. Oh, we're going to buy a house. We're not gonna be able to buy a house for years. But if you get started and you go, Oh my gosh, we're this much closer. We accomplished this. Now we have this much, and you know what? Now that you have this much, we might be able to adjust our thinking. We might be able to buy that home now in the next two years versus the five that we thought, okay , yeah, and we want, we have , and then you're making a decision from a place that's an educated decision. You've got a lot more information. It's a lot easier to make a decision when you have the information at your disposal than it is then when you're just going, all right, okay, I hope this works.

Katie Utterback:

Right. Yeah. I noticed too that even when I go to Target now that I have like this puppy plan and I have like a house, like all of these things that I want that are going to cost a pretty large sum of money and so now even at Target I used to go in, I wandered through the dollar section. I wandered through the clothing just because I had to see what was in and then all of a sudden I wanted 15 different things. I have them in my basket. I'm contemplating if I should buy it or not.

Chase Peckham:

You're describing my nine year old daughter right now ,

Katie Utterback:

but now I'm like, I don't even want to walk through that dollar section because I know it's crap. For the most part, I don't really use any thing that I've ever purchased in there unless I've given it to a kid. Then it's served its dollar value very well, but it's so much easier now that I have this plan in place. I'm like, is this worth delaying a puppy over? And it's completely changed how I look at it.

Felipe Arevalo:

They make you wander through that dollar section though.

Katie Utterback:

They have Disney stores in there now.

Felipe Arevalo:

Oh and they're bringing back toys R us. Target's is bringing it back towards arrest. I saw on the news today.

Katie Utterback:

Oh wow.

Chase Peckham:

Well another reason to, to , to make crazy decisions , um, that you wouldn't normally make. Let's funny. And they're smart marketers when they do that.

Katie Utterback:

Oh, I was telling Katie they had the PlayStation five announcement today. It's gonna come out holidays next year and it actually makes, it goes perfectly with planning because I was telling Katie, if you put away $50 a month from here to then you can have $600. I don't have a price yet to go buy the , not your best financial investment. But if that's what you want and you know you're going to buy one anyways, start putting $50 away. Now when it comes out sometime holiday 2020 you'll have $600 cash just sitting there so that you can go buy it without having to fall into debt.

Chase Peckham:

And by the way, what is fantastic about that idea is along the way, when you have that $600 now you may decide, Oh, I don't want it.

Felipe Arevalo:

You're right. You might think I worked so hard for this $600 I don't want to spend it on a video game console.

Chase Peckham:

That's right. So you may decide all that time it took me to save, this is, this is this best where it's going to go. Or you might just decide, heck yeah man, I'm not going into debt for it. Whatever is, you know, whatever happens. But then what happens is, again, you get to make a very educated decision on what you want. Not just, I mean my, if you ever want to really, if , if you're a parent or if you just, if you have nieces and nephews or friends with kids, well you should talk to them about just watch the kid and how they, they go to a Target or someplace like that. And you can see in their personalities right away how they shop. What , because they get instant gratification with a kid. But we , that doesn't change when we're adults. We are still those kids in sheep's clothing in adult clothing, right? Yeah. We still get excited about buying things. We all do.

Felipe Arevalo:

It's funny though, cause you mentioned kids and I have one that's too little still to tell what he's going to be like, but sometimes they're just naturally savers. Spenders. I know you've mentioned it a couple of times with your kids. Oh yeah. Like Barrington will not spend his money. He has spent one dollar.

Chase Peckham:

He'll spend your money.

Felipe Arevalo:

Oh in a heartbeat in a heartbeat. And I even tell him, I'm like, Hey buddy, what are you getting mom for her birthday or Christmas or something? I was like, well with my money, like no, I will give you X amount of dollars. Oh, if it's your money. Yeah. Okay. I'll come up with some ideas. If it's his money, he was going to be like nothing. I'm going to draw her card.

Chase Peckham:

Yeah. Well let's flip the script on that kid. Want a birthday present. You think mom and dad are going to spend their money.

Felipe Arevalo:

Yeah I'm gonna draw him a card too .

Chase Peckham:

But that's a good, that's a good lesson though. Yeah, we, you know, we try our hardest as parents. And you know, the thing is we try to teach our kids how to handle money and do those kinds of things. But do we listen to ourselves? And chances are probably not. And the reason is, is a lot of us just kind of think, well, I work for it. I work hard so we can rationalize with ourselves that I deserve this. And maybe you do, but you still have to come from an educated decision on whether this is something that you can afford to do right now and that you want to do it as a collective group. That if you're married or, or you're living with somebody and you're in your sharing expenses, that you have to come to these decisions together. And what better way to come decisions together than if you do them in advance.

Katie Utterback:

How do you recommend people, I guess, kickoff this conversation with their spouse and you include your kids if you're trying to create a plan?

Chase Peckham:

It depends on what it is, but yeah. So, for instance, if , um, yeah, so if we want to go on a vacation, if it's something that we want to do, like my wife, let's just say , um , she's kicking around the idea that uh, it's our year to go back East for Christmas. Um, and we've decided or sh and she's looking at it going, well, you know what we're thinking about doing it in Florida this year instead of doing it at , um, my, my brother-in-law's , um, but in, in, in on the surface that's like no big deal. We're going to the East coast, big deal. But the thing is is we would normally stay with her brother so we wouldn't incur an expense to stay somewhere. So now this whole trip could be a 1500, $2,000 more expensive trip than it was. So that's not something where Carrie would just come out and say, Hey, Chase, we're doing it in Florida this year. She would come and she talk to him and say , Hey, Mike or, Michael and I discussed maybe doing it in Florida. What do you think? And we would do the pluses and minuses to all of it and say, well, okay, you know , could be much better weather in Florida. We can go into the water, you know, the kids might enjoy it more. Um, but then there's the added expenses. It may do. We want to be in Florida when it's really warm during Christmas when we could be in Carolina, we could get, you know, kind of wintery little, you know, little things, but all the different things that you could take into account. We would discuss and then come up with a decision that has been thought out and we might decide, you know, what do you know? Presents may not be as good, won't be as good this year if we decide that might be the present to the , to all of us that we're going to Florida instead of having a couple extra presents while we're at uncle Mikey's in North Carolina. You've got to weigh those kinds of things. And in that case we might bring in the kids and say, Hey, we're thinking about going to Florida and here's the key . Here's the pluses and the minuses. And the kids are going to , what are they going to think of right away? Ah , not as many presents. We don't care about Florida. Right. You go to Florida another time. You mean we wouldn't get presents. We'll get presents from Santa but we won't get presents from you guys. Well they just won't be as plentiful with say it won't be as exciting. Right and they may come up with the decisions that they come up with. Carrie and I will take that into account. We'll talk to Michael about all that stuff and then we make a decision because it impacts all of us but bottom line it's going to that decision. Carrie and I have to be very comfortable with the fact you know the financial side of it.

Katie Utterback:

I want to ask a followup question? Sure . How do you handle, I guess the outside pressure on your plan? Like how do you make sure that Carrie's brother is not influencing like you feel compelled that yes, we have to go to Florida if even you and the kids don't want to go, how do you handle that?

Chase Peckham:

The good, the good news is, is that we have the relationship with Michael to where I can just call or we call. It would probably be Carrie and just say, you know what, the kids really, we could do it one of two ways. Now it might be a financial decision and Carrie has a relationship with her brother that she could just say, Michael, we don't have a ton of extra money. It's already expensive enough to fly back to Carolina. And we, you know, and plus the kids really just love waking up and having Christmas morning at your house, you know, instead of a condo or something different. And in Florida.

Katie Utterback:

So you guys are open in terms of finances?

Chase Peckham:

Yeah we, okay , we, we're not embarrassed to say it's time , you know, we financially, it's better for us to do this because when it comes down to it, all of us have to make financial decisions. He does too. He doesn't have kids to think about. So he doesn't have four plane tickets to buy versus the one he versus the two that he does for. He and his wife circumstances are going to be different. So, you know, no, the answer is no. We would not have that problem. But other things that comes up all the time, there might be friends that make a lot more money than us. So making decisions for them is a lot easier. Right? They can afford more. It's where Carrie and I flat out have to tell friends of ours, sometimes T you know, we just don't have the funds to do that trip right now. We'd love to, but we just don't have it. And we've run into that a couple times this year and there's honestly, the truth is we've probably done a trip or two with groups of friends that we're stretching it to , to do. Um, but for other reasons said yes or whatever it might be, you know, but everything we do is pretty calculated , um, in, in, in , uh, but we still, you know, might have buyer's remorse afterwards.

Katie Utterback:

Even so on the vacation where you are stretching it a little bit, it was maybe a little bit more tight. Did you enjoy yourself as much?

Chase Peckham:

Yeah. We would never put ourselves in a situation where we're, we have a GI . If we have a giant pit in your stomach, we will never do it.

Katie Utterback:

Okay.

Chase Peckham:

It's just a matter of our thinking is, you know, do we really want to spend this money right now? Okay . On this. And then we'll, again, we'll weigh the pluses and the minuses. We are going to be with some great friends that we have. Um, this opportunity doesn't come along very often because we're getting to go to a place for a certain amount of money when normally a trip like this might be this much. So there's going to be those gives and takes . But sometimes you've just got to tell your friends and you know what's really funny is they understand, we may think that, Oh well they make, but they still make the same decisions as we do. They just might be different. We all have to take into considerations that we have to do what's best for us, our family. And that's making future decisions, whatever it might be. And so those roadmap, that roadmap that we talked about at the very beginning of this podcast is a roadmap that essentially if you've laid it out, you want to try to follow it as best you can. You might find that there's a better route along the way. You might find out that there's, we're going to have to stop because the roads closed and we might have to find a new way, but all along it's easier to make those decisions when you've tried to map it out as best as you possibly can. And that's what it comes down to. It's, it's flipping the idea that a budget following of spending plan is not going to limit what you can do. It's only going to enhance what you want to do because you were making the conscious decision. You're not making the decision based on what's leftover. That's hard to do. So I don't know about you guys, but uh, I'm hungry.

Katie Utterback:

I am too, my stomach is growling.

Felipe Arevalo:

I know Katie bringing up Inn-N-Out and then chase brought up Inn-N-Out now. Gosh.

Chase Peckham:

Yeah, and Chipotle a , sorry about that. 10 years. It's been.

Felipe Arevalo:

at least.

Chase Peckham:

wow. My kids love it. absolutely love it.

Felipe Arevalo:

I didn't even know they had tacos.

Katie Utterback:

Oh yeah, he did. Yeah. Yeah.

Chase Peckham:

They have Carne Asada now too, by the way.

Felipe Arevalo:

I saw the commercial for that. Yeah.

Chase Peckham:

Yeah. Chipotle, he needs to sponsor this show. All I'm saying.

Katie Utterback:

we'll take any sort of taco shop sponsor I think.

Chase Peckham:

we'll take lifetime Inn-N-Out, which by the way, I will say in and out , it's a pretty good deal as burgers go still.

Katie Utterback:

Oh, for sure.

Chase Peckham:

You can . As a family, you can eat for under $20 very easily. Very easily. A family of four I should say.

Katie Utterback:

It's delicious.

Felipe Arevalo:

As long as you don't mind waiting in occasional line, but yeah.

Chase Peckham:

Yeah, that is true. What else we got? Nope. Good talk everybody.

Katie Utterback:

No, I think this is a hard one cause I think it really is about your mindset and if you view your budget as something that's limiting you, it's going to be a really rough, not so enjoyable journey, but if you decide to take that power back from your budget and call it a plan, you can still call it a budget. If you want to, but if you're using it as a map to guide you to getting a house, to getting a puppy, to traveling the world to wherever you want to go, you're gonna have so much more fun and it's gonna be so much easier to walk past the Target clothing that's calling your name.

Chase Peckham:

You're going to be excited for what's coming and that's, that's what's important. I mean, a lot of times you say, and not that you're trips not going to be great, but sometimes the anticipation and the planning is almost as much fun as the actual vacation itself.

Katie Utterback:

Well, they say that too about cooking right. That part of the cooking, part of the eating experience is cooking,

Felipe Arevalo:

sitting there, smelling, tasting it,

Chase Peckham:

having a beer with it while you're doing it. Yeah.

Katie Utterback:

How many of us have cooked in, elaborate, not even an elaborate meal, have cooked dinner and you're the only person who's not really hungry, right? Yeah. Yeah. That's a fact. And it's like those are the meals. I find that I actually have a more balanced meal or something.

Felipe Arevalo:

That example you just came up with is what Philippe just talked about with the game console. You saved up, you had a plan, you wanted to do it, and then as you've done it and now that you have it, you're looking at it twice now and you're going, I've got the money. Then it becomes, is it a priority? Is it a priority right here ? And it might be still to you and it might not, but if you go up there and you just go, Oh my gosh, it's coming out now in the marketing is phenomenal. And look at what these graphics are and you're going to go, heck yeah, I want that. Well, you're going to be pretty up to buy it and then you're going to someday down the line go, you might have that buyer's remorse. You might not.

Katie Utterback:

Yes, there won't be a lot of game stops to sell it back. Or like resell it.

Felipe Arevalo:

That's true. They're struggling. But Katie asked earlier the , um, you know, what's that first step? And I think it goes back to also having that , uh, setting aside and like , again, we use the word planning the time to have that conversation cause schedules are busy and you're running around doing this and that and setting aside a specific time if , if it's going to be a couple who are going to talk about budgeting for the first time and say, look, this afternoon from this time, like starting at five, we're going to sit down, we're going to maybe do it over dinner or wine or beer or whatever it is. And actually set aside a time to have that conversation. Because if you just assume that the conversation's going to happen, it never will.

Chase Peckham:

1000%.

Felipe Arevalo:

right?

Chase Peckham:

1000% and it comes down to this. If you want to know how to get started, you know, we would , this is all we've been talking all metaphorically, right? We've been, it's been a , you know, people honestly then are going to go, how do you get started? And really it comes down to, if you are going to treat it like a business treated like a business meeting, we're gonna meet and we're going to meet and we're going to get together and we're going to first, we're going to , we're gonna figure out where we're spending our money. You know, that's the hardest part. The hardest part is starting. The hardest part is looking in the mirror and going, okay, where's our money going in? It's , you know, it's sometimes give ,

Felipe Arevalo:

Could be alarming.

Chase Peckham:

it could be alarming and a lot of times it might be, and we'll be , um, but at the same time, once you get over that initial shock or that initial wave, you're going to go [inaudible] and it's going to be like a weight lifted off because you're going to go, man, I knew that the money was going somewhere, but I didn't know where now you do. And now you can make the conscious decision on where it goes. And there's nothing more empowering than being it's in control of something is you can be. So that's what you is. You worry about what you can, what you can handle, and you don't, you let the other stuff just kind of fall off, right? You can control what you can control and what you can't. You don't stress about it. You let it go. You know, for right now, for this year, you can't control what you make. Let's just say, cause you're a salaried employee. Okay?

Felipe Arevalo:

Gas prices.

Chase Peckham:

or gas prices, there's nothing you can do about that. That's right. Um, you've got to figure out how to make this work with what it is. And once you get to that point, you're gonna , you're going to be shocked at how much better you get along with your spouse, how much better you get along with yourself, how much less stress you have, because you know where that money's going. And you get to make conscious decisions on what you do with it. And that doesn't mean that you can't do anything. That just means if you're going to want to golf and you'd like to golf, put money away to do that. If you like getting your nails done and having pedicures, nobody should say you shouldn't do that. You do that, that's a priority. You, you go do that. But what it basically it comes down to is what's the goal of a business? We always say this with the goal of a company,

Felipe Arevalo:

make more money,

Chase Peckham:

make a profit. Yeah . And so your goal as a couple, as a single person, as a household, your goal is to make a profit every month.

Katie Utterback:

I like that.

Chase Peckham:

That's your goal. How do you do that and you make you create your roadmap. How do you find out? I mean, do you just set across the country? No , you would do your research. So you go, you say, okay, it's probably gonna take me six and a half hours to get to Arizona from San Diego. Do we want to stretch it a little bit further or do we want to stay there? You know what , let's stay there because economics wise, we're probably gonna find an a hotel that's a little bit cheaper or whatever it might be. And then we'll go from there to Colorado the next day. We'll enjoy ourselves. We'll see the Rockies. We'll get to enjoy the beauty of it. Right? These little steps. You wouldn't just go, all right , let's go and then stop. When do you want to stop? I don't know. When do you want to stop? I dunno. Should we find the next hotel? Sure. What GPS says there's not a hotel for another 150 miles. Well man, you talking about, we already went through Phoenix and now there's no hotels. The rest of the trip. Are you kidding me? We've got to go to grand junction. Wherever that is. You know, and you're going, Oh my God, but I'm so tired. Yeah, me too. In fact, why didn't you listen to me? We should have stopped back in Phoenix. Do you see what I'm saying here?

Katie Utterback:

This sounds like the start of a horror movie where your car breaks down on this tiny little grounds or could it be [inaudible] road ?

Chase Peckham:

But if you laid out the map a little bit, then you are going to go, okay, yeah, here you go.

Katie Utterback:

You're right.

Chase Peckahm:

So that's just, that doesn't mean it's , you know, we can talk about your vacation where some people, you know, but you made all the plans that you need to have a very comfortable vacation. You don't, that doesn't mean you need to structure your vacation every minute of every day. It just means you've got all the necessities down and you might decide, you know what today could be tomorrow, could be a fun day for a cruise. Do you want to do that? Yes, let's do that.

Katie Utterback:

Yeah, that's exactly our plan.

Felipe Arevalo:

Yeah. Don't build an itinerary like a minute by minute.

Katie Utterback:

I pass it out at the airport,

Chase Peckham:

but yeah, but you're , you laugh. But there are people, I know people do literally feel uncomfortable if they don't have every minute of every hour planned while they're on that vacation. So they get everything in. But I'm not that way.

Felipe Arevalo:

Vacation is kind of the time to get away from a schedule. Just slightly.

Chase Peckham:

That example is, that doesn't mean you ha you're not going to be able to account for every single penny everywhere it goes. Even though people may try. But what you have to do is for the mace, the necessities, the basic things that has to be accounted for. You've got to figure out what it is. And not only that, but the essential is that you're paying for and what are the possibilities. There you go. Everybody's is different. There's no right or wrong, and that's, that's the beauty of it. [inaudible] Everybody is unique. Everybody's budget is unique. How often do you ever tell somebody where they should absolutely cut?

Felipe Arevalo:

It's not possible. This is not my budget's theirs . They're the ones got it home and live with it.

Chase Peckham:

Bingo.

Felipe Arevalo:

I could tell them they don't need cable, but.

Chase Peckham:

who are you to tell me.

Felipe Arevalo:

Who am I to tell them that they don't need cable?

Chase Peckham:

100% but bottom line is you can look at it and you can go, this is how much you're bringing in and this is how much, how much is going out. Yeah.

Felipe Arevalo:

Here's some suggestions.

Chase Peckham:

Got to get it under there.

Felipe Arevalo:

Yeah. Right. We need to cut X amount of dollars. You can do it by cutting back here on your cable. Are you telling me you need your cable? Okay. Then maybe we need to cut back and look somewhere else. Yup . If that's more important to you, you have cables more important to you, then eating out one , don't eat out as much. Right? And then prioritize which expenses you're going to allocate your money to . Right.

Chase Peckham:

Bottom line. Just get started, get started, have the conversation and if it's, if you're not married, have the conversation with yourself. Sit down, take a look. Oh yeah. Figure out a line . Figure to have a glass of wine, figure out the beer, whatever , whatever. Whatever tastes you have. Figure out how it is that you're going to accomplish what you want to accomplish. Figure out where you're spending your money. I mean, it's really easy to track. Nowadays technologies , they're very, very easy and if you realize that you're going to Starbucks four times a day, that that's probably adding up. And then you might think about the fact that you could be saving 15 to something $20 a day, by just going once.

Felipe Arevalo:

And that can be a big compound . Even going once in one of our presentations, we have a slight fee, spend $4 a day on coffee for the next 30 years you'd have spent, so basically someone's working life, they would have spent over $43,000 on coffee.

Katie Utterback:

Yeah . I wonder how many of those people too deemed like a nicer coffee machine. Too expensive.

Chase Peckham:

Yeah. And in reality, how much you could save because you've got a nice coffee machine.

Felipe Arevalo:

I always joke that until the AirFryer came along, I joked that I would first , if my whole, all my utilities went away, I had replaced the Keurig first. Now I'm not sure, but they cause they're friends, but that, that just having that Keurig, I buy the little Cubs in bulk at the business. Costco, I get 120 of them in a box. Um, I buy the little creamer things in at Costco. Um, I spend 40 cents on a cup of coffee where I would, would have spent $5 and change.

Chase Peckham:

I'm a dollar a dollar at 7/11, [ iunaudible]? But that's not what they're after . Everything else there. And you don't even have to bring your app out now. You just put your phone number in that thing . And I never even look at that app anymore, but every seven days or I get a free one, and it's now they've got this thing, if you have the app, it's, it's, it's literally a dollar. And I mean, but still, that's 300 if I'm drinking coffee every day , that's $365 a year that I'm spending on coffee. But I enjoy the walking in. I know the owner now, so it's, you know, it's kinda just a process and other people. What's the human side of things.

Katie Utterback:

I could see like that's a need for you.

Chase Peckham:

Like I like to say hi to people and smile at them. Yeah, that's true. It's the experience. Yeah. Shoot, I'm, even today they were out of hazelnut. I walked in, picked up the hazelnut , like I worked there, put it over to the copy machine, opened it up. I did everything but refill the coffee. I set it up for him and I said, you're out of hazelnut, but I set it up for you. And he's like, he rolled his eyes. Thank you. I just figured out, you know, it was kind of busy, so I figured I don't got them out of there . You need a little, selfishly, it's, I wanted some Hazelnut, what are you going to do? All right. What do we got on deck , Katie ? Anything?

Katie Utterback:

Yes. So October is domestic violence awareness month. So on our next episode, we're actually going to have an attorney talking to us about a form of domestic violence, which is financial abuse.

Chase Peckham:

Alright. Yeah , there. That's huge, by the way. Huge. That's a whole thing. I don't even think people think about when they think about abuse. So, no, that'll be really, really interesting. [inaudible] .