How to Never Worry About Money Again with Jesse Mecham

Transcript:

There's no such thing as saving money. You're just deferring spending. So when someone says, "I wanna save more," what they're really saying is, "I want to spend more later," like save up for things and then spend it. But they actually aren't saying that yet, and that's the problem. They're literally just saying, "I don't want to spend it," and that is good.

They haven't even said what the savings will be for. So when they have a savings account and a checking account, I'm gonna autopilot money into my savings, auto-transfer, I'm gonna automate everything. Okay, so they start saving money, boom, boom, boom. And they're like, "I feel good. I'm saving money." But to get over that hump that you're describing of not wanting to ever touch it like it's this sacrosanct special money, no, it is meant to be an emergency.

What's weird, YNABers will start to think about what large, less frequent expenses bother them, what they need to be prepared for. And it's weird how if you prepare for something, it's not an emergency anymore. On this episode of the Personal Finance Podcast, how to never worry about money again.

What's up everybody, and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney.co, and today we're gonna be talking to Jesse Mecham from YNAB about how to never worry about money again. Now, Jesse is someone who has transformed millions of people's relationship with money, and I will tell you right now, I am one of those people.

I got to this point in time where I was living paycheck to paycheck. I found Jesse's rules and his philosophy around money, and it transformed the way that I think about money. And so in this episode, we're gonna get into how to think about your money and spend it intentionally so that every single dollar that you earn, you can identify a purpose and a job for those dollars.

We talk about how to save money in your emergency fund and how to actually put money to work month over month. Plus, Jesse and I talk about something that you may have not heard in personal finance before. Every single dollar that comes into your world is actually meant to be spent, and we dive deep into why that is.

We also talk about how he's building wealth in his life, how he talks about money in his relationship, and how he helps his kids learn how to manage money from when they're young all the way up until their college years. But most of all, the big message that we talk about in this episode is how to figure out what you want your money to do within your life, and then using those dollars...

And then using that philosophy to put those dollars towards what you actually want out of life. Now, Jesse has a new book called Never Worry About Money Again. It took me an hour to read that book, and I highly recommend anybody out there to check his book out because it really does reframe the way that you think about money.

And a quick favor before we dive in. The majority of people who listen to this show have not hit follow yet on their favorite podcast player or on YouTube. So if you can, and if you want more out of this episode and help us spread this message that we believe that anybody in this world can build wealth, would you please hit subscribe?

And if you are really enjoying it, leave a five-star rating and review. It would really, really help us out in this episode. Now, without further ado, let's welcome Jesse to the Personal Finance Podcast. So Jesse, welcome to the Personal Finance Podcast. Thanks for having me, Andrew. I appreciate it. This is gonna be, uh, this is gonna be a good one, I can tell.

I am really excited to have you on here, and I think this is... And I want the listeners to know this, because I think one of the, the things when I first started my journey, and I just told you this re- right off air. But one of the things when I started my journey was I discovered YNAB, and I discovered YNAB's four rules from you, and you kind of taught this, this framework on, on- Mm-hmm

a way to think about money, and how to spend on your values, and how to reframe the way that you actually think about your dollars. Mm-hmm. And that your dollars should be spent, and they should be something that, uh, you utilize as a tool to get what you want out of life. Mm-hmm. And those four rules that you, you implemented absolutely changed my life, they changed my wife's life, uh, and our entire family in the way that we kinda set this up.

So many of the listeners know my, my story early on where I was living paycheck to paycheck. Well, I found YNAB during that timeframe, and that's what helped me figure out exactly kind of how to get out of this situation and how to transform my finances. So first, I'm excited to have you here, and I wanna thank you for, for creating YNAB and the rules, and everything else beyond that.

But for listeners who don't know you or listeners who haven't heard you before, can you tell us your story and how all of this got started? Yeah. I mean, uh, I've been at this, uh, since, I mean, t- over 20 years. But, um, we launched YNAB in 2004, but the beginning of it was before. Um, you know, my, my wife Julie and I married young, and we made very little money, and I still had a lot of school left.

She had just graduated with a bachelor's degree in social work, which is not the most lucrative situation, you know? Um, so she was making 12 bucks an hour, and I was just really keen on getting through school without borrowing any money. Um, and being newly married, we also had, like, no money baggage. We could just kind of, like, how do we wanna do this?

So we built this little spreadsheet and worked with it And at first, I'll be honest, like I, I've always taken to the personal finance topics. Like e-even as like a 14, 15-year-old, I found them interesting. You know, read like "The Richest Man in Babylon," "The Millionaire Next Door," "The Wealthy Barber." I, I've read all these books and been like, "Okay, I'm gonna do this."

And when we first set up our, uh, our very first plan with our money, it was so tight and so, um, oppressive, I will say, that I... And I include this in the book, but the very beginning, I remember walking past this donut shop, you know, and, um, it was 50 cents for this donut. Didn't even include sales tax. And they-- I, I realized I couldn't buy it.

And I think, I'm like, "I'm majoring in accounting. I should be good at money. How is it that I, I have the money, but I don't feel like I can spend it?" And we, we were... It was our first learning, realizing like you're-- what you do with your money, when you realize what it's for, that is a personal endeavor, you know?

And I had kinda let all these books and best practices, if you wanna call it that, um, kinda tell us, "This is, your money's for this and this, and then save, save, save, save." And it wasn't until we kind of claimed some of that money as, uh, for us that the breathing room, you know, was felt, and you, you're like, "Okay, I can do this now."

So that was the very, very beginning of me being like, "Man, I'm actually pretty bad at money. I'm supposedly doing it all right, and I feel crappy." Um, but we got, we got good at money over the years, and the book tries to walk people through my own learning on how to do that. And I hope people will find that the YNAB method as people, you know, listeners may know it already, it's still totally there.

But this new framing is, I hope, much more approachable and more quickly understandable for people where they're like, "Okay, I can do this." I think it is, and I think it's-- it, the way that you structured this is something that, uh, I think a lot of people can relate to, and they can kind of think through their own finances and how this is going to, to kind of help them operate with that.

Now, you've seen so many different people from different walks of life come through, uh, and, and learn about YNAB. You guys have done, you know, webinars and things like that for years where you are kind of actually actively working with your customers, uh, to make sure that they are, you know, educated when they, when it comes to budgeting, when it comes to managing their finances and their money.

Why do you think so many people are bad with money? Oh, man, we just... It's a skill, you know? It, like, when we say, when I, when I say bad at money, I mean bad at spending it. I don't mean, I don't mean anything else. So someone might be like, "Oh, I'm good at money. I earn a lot." Nope, that's not what I'm talking about.

That's great that people earn a lot of money. I love it. Like, go earn more, you know? But yeah, being bad at money, as, as the book explains it and as I say it here, it means bad at spending it. The, the sole purpose of money is to be spent, full stop, the end. And so when you wanna get good at it, you have to get good at the sole purpose of the thing, and that is to spend it.

Most people are bad at it because they just haven't acquired the skill. I used to be bad at swimming when I was really, really little, and now I'm at least decent. You know, I took lessons. You learn how to do it. And no one... You know, like, Andrew, if I were to be like, see you flail in the pool. You know, like, let's say you don't know how to swim.

I could be like, "Andrew, you're bad at swimming," and you wouldn't be like, "How dare you? I find that offensive." You know, you'd be like, "You're right, I am. You know, I almost drowned right there." And but with money, for some reason, because there's so much baggage, so many stories we have about money, when I or someone else says, "Hey, man, you're pretty, you're pretty bad at money," it's, it can come off as, uh...

Well, it's a little hard, hard to hear. But I mean it in the most loving way. You're bad at money, and you can totally turn it around, as you started the show off by saying. Absolutely. That transformation can happen at any point in time, and it could happen today just from listening to this episode. There's a lot of things that, that people can learn a- and take away where they can really just...

You could transform your finances. It can happen in the blink of an eye, and having that light bulb moment can, can be one of the best things that you ever have. And I think you nailed it, because the skill of s- spending is a skill, and it's a skill that can be developed over time. Many people feel as though, "No, I just buy things that I need and/or I spend money on, on some of the necessities, and maybe I buy some stuff for myself."

But it is a skill over time that you can develop. I can tell you even, you know, early on, I ch- was working towards developing that skill. And in my 20s, I was overly frugal. I was overly frugal, and it was coming from this place of being someone who, uh, came from, you know, living paycheck to paycheck, and I was like, "I don't wanna ever go back to that point in time-" Yeah.

You're doing it out of fear ... "in my professional career." Yeah. Exactly, and so it was out of fear, and I didn't wanna go back to that. And over time, I learned how to develop this skill and how to kind of build this skill of spending, which I think a lot of people can relate to. And you could be all the way on the other side of the spectrum, where you're looking at something, uh, and you are making good income, and you are spending the majority of that income.

In fact, we were just looking at stats that 47% of people making over $150,000 per year are still living paycheck to paycheck. Yeah. Absolutely. So it can go on both ends of the spectrum, which is absolutely, which is absolutely, uh, interesting. So since money is meant to be spent and spending is a skill, how can people kind of rewire their brain to- Mm-hmm

to think about it this way? And then how do they spend intentionally? How can they make sure that they are actually spending on what they value? Yeah. The, there's only one question. The whole book is built around one question, and you have to answer the question. The question is simple, and it's what is it for?

What is the money for? What's it for? The answer to that question is not easy in the sense that you and I could talk for two more hours. You know, we could be like, "Hey, uh, it could be for this. It could be for that." Yeah, ad nauseam, you know? Even just between the two of us, our answers could be so wildly different, and, um, that doesn't make them wrong or right.

It just makes them what they are. So answering the question of what is this money for is far harder than saying some money should be spent, some money should be saved. There's no such thing, and just sit with this for a second, everybody. Pull over if you need to. No, I'm just kidding. There's, there's no such thing as saving money If you think about it, you're just deferring spending, okay?

Now, the reason I-- it's important to note that so that we don't do this convenient but useless exercise where we say saving's good, spending bad. That's a very common bifurcation that people deal with. It's like, "Hey, what do you-- I wanna get better at money." "Well, what do you wanna do?" "Well, I wanna save more."

That-- like, everybody says that. Or, "I wanna get better at money." "Well, what do you wanna do?" "I wanna spend less." Boom, done again. It's like the m- it doesn't move any needles. There's no skill acquisition in there at all. So when someone says, "I wanna save more," what they're really saying is, "I want to spend more later."

Like, save up for things and then spend it. But they actually aren't saying that yet, and that's the problem. They're literally just saying, "I don't want to spend it," and that is good. They haven't even said what the savings will be for. So when they s- when they have a savings account and a s- and a checking account, and they're like, "I'm gonna auto, I'm gonna autopilot money into my savings, auto-transfer, I'm gonna automate everything," blah, blah, blah.

Okay. So they start saving money, boom, boom, boom. And they're like, "I feel good. I'm saving money." Then something happens. Uh, the car makes a weird noise. My car yest- you know, two days ago, my car started, like, shaking. Like, the transmission's doing something weird. You're like, "Okay, that's, that sounds expensive," you know?

So this starts to happen, and then they have to spend their savings. They are not patting themselves on the back. They're not, like, shooting confetti cannons. They're not attaboy-- there's no attaboys at all. They're mad. They're, they're disappointed even in themselves that they have to spend their savings And that is the breakdown right there.

We have to get past this idea that it's one or the other. It is only spending and then on a different timeframe. So if I'm like, "Andrew, you wanna go to Tahiti next year?" You're like, "Yeah, how much will it be?" I'm like, "10 grand." You're like, "Okay, I have 10 months to do Tahiti, 10 grand, $1,000 a month saving up for Tahiti.

Boom, we're done. We're going to Tahiti." Like, that money is meant to be spent the whole way. Like, every month we're talking about, "Are you ready for Tahiti? You getting ready for Tahiti?" It's always meant for Tahiti. The problem is we don't label our savings. We don't say what it's for. We don't answer the question of what is it for.

It's just for saving, and that's for n- that's nothing. And so it leaves the person feeling bad if they spend it. Um, it leaves them without any kind of number as to what they could reach. It leaves them, when they do spend it, um, s- second-guessing the whole time, even if they don't feel bad, just like that little second-guessing.

It's just all broken. The worst advice-- I feel like some of the worst personal finance advice is save more. You know, l- live on less than you earn. You're like... I mean, over a lifetime, I wanna live on exactly what I earned. Yep. You know? Even if it meant I leave some to my kids, cool, whatever. But Like, it's all meant to be spent.

It's the only thing you can do with it. You're like, "Oh no, I wanna give it away." He's like, "Yeah, but then the charity spends it." If they're a good charity, like, they put it to use, you know? Anyway, I ranted for a while, Andrew. I'll let you- I love it ... try and corral that into something. It's, it's amazing the way that, that you can reframe that in a way where it, it makes complete sense, 'cause that's ultimately what's going to happen.

And even like, you can even think of a book like Die With Zero, for example, where like you go through that book and you realize, okay, well, I don't want to get to the point in time where I have way too much money that I don't know what to do with, and my kids are inheriting way more, and I just worked all these extra years that I didn't want to work so that I could, you know, accumulate this massive nest egg.

But in reality, if you reframe this as something that's gonna be spent, I think that there's just a lot of really cool stuff that you can, you can kind of think through, and I love that reframe for, for most things in, in reality, 'cause that's what's going to happen. Yeah. That's exactly what is happening.

And over the course of the long term, you know, when you save, you... And you've said this for, for a long time, but like there's this, you know, there's this group of people or there's a, a large portion of people. We have a lot of listeners this same way, and I have to kind of try to massage this and help them kind of go through this process, is they build up an emergency fund, and then they don't wanna touch that emergency fund ever.

The intended purpose of that emergency fund is to go and spend it and to utilize it to protect your finances from anything that can happen in life, and they don't wanna spend those dollars. And so you have to reframe and train your brain to understand, well, this is what it's for. This is what it's for, is to have it in this spot.

So I just love that. I think that's a great way to think about it. I would urge people with the emergency fund to just be a little more specific with it and, um, name it, like name it more specifically. So like let's say you got 12 grand in there, and then just say like two grand is for car repairs. Yes.

Four grand is for HVAC. Start naming it stuff. And then when it happens, you look like a, you know, like clairvoyant. You're like a superhero. And so when the HVAC goes out, you're like, "Oh my gosh, I'm amazing. I have six grand sitting there for the HVAC," and, you know, done. The, the, the blanket emergency fund advice It is good to just give people breathing room.

Like, maybe they don't know what will hit them yet, so like get them... I mean, let's be honest, having cash versus not having cash, we're in a better state if we've got the cash. I don't care what you name it. But to get over that hump that you're describing of not wanting to ever touch it like it's this sacrosanct special money.

No, it is meant to be an emergency. What's weird, YNABers will start to think about what large, less frequent expenses bother them, what they need to be prepared for, and it's weird how if you prepare for something, it's not an emergency anymore. And so you will get this weird thing, like a lot of YNABers don't do an emergency fund, but they have categories for all kinds of things that other people would be like, "Those look like emergencies."

And you're like, "Well, they're not because I have money." It's only an emergency when you don't have the money. You're like, "Oh, geez, what are, what are we supposed to do now?" You know? Then you're like, "Oh, this is an emergency." But if you got the money, you're like, "Oh, this is annoying." Like the cover on our pool just broke.

I'm like, mother of all... Like good grief, you know? People that they're like, "Hey, pools are cheap." No, they're not. Anyone that says like a pool, no. They are maintenance, maintenance, maintenance. So love the pool, whatever. I, I'm not, not knocking pools. Julie would never not have that pool. Favorite thing she's ever owned.

But The dumb maintenance. So it's an inconvenience. It is annoying. They're literally out there right now getting that pool fixed, and it's gonna be some amount of money, and it'll be annoying, but it's not an emergency, right? That's-- There, there's a feeling there that's completely different. One has worry attached to it, and the other one is me sitting here on this podcast complaining and whining, but I'm not in an emergency situation.

Absolutely. Yeah. I think that's one of the-- the m- and it's the most freeing feeling because the first time that you start to save, like in the car repair fund or the home maintenance fund or whatever other fund that you have in place, all of a sudden... I remember the first time that happened, I had to replace like an oil pan in my car, and- Yeah

it was this whole thing. It was like a $2,500 expense, and I thought forever I would've been so stressed out about this. Yeah. But the money was just there, and there's power in just having the money there, where all the stress and anxiety just melts away. Yeah. And that is the best possible feeling that you can ever have, I think.

Yeah. Just think anyone that's like, "Wait, how do I do that?" Just think what large, less frequent expenses will I experience in the next year or something. Go back through your old bank credit card bills, scan, do a squint test, and scan for large numbers that were like big pops. Think if that'll ever happen again, whatever it was.

Yeah, brainstorm it. But anything-- Like, everything will wear out, and, um, the big stuff is what you wanna hit first. You know, home, car, those are big. Um, and then fun stuff too. Travel, you know, um, quarterly taxes. I'm, I'm not-- I'm going not fun again with that one. Property tax is not fun. Um, anniversary trip, fun again, right?

So Christmas, fun, and we can, we can really just prep for them, where Christmas morning you're just there with the kids doing Christmas. You're not like doing, you know, this totally freaked out back of the napkin math, wondering what January's credit card statement's gonna look like. Exactly. It really does, it does free up.

Like, one of the things that I love to do for, for Christmastime, for example, is I'll go look at last year's spend, I'll divide that by 12, and just start saving it every single month. Boom. There you are again. And it'll, the money's just there. Yeah. Every single time, and I think that's just such a powerful position to be in.

And, and one of your... One of the folks that you have in the book, and the book has a bunch of, uh, YNABers who are in there and kind of giving comments and ways that some of this stuff has worked through, uh, their life. And one of them mentioned something that they called random attacks of money, or RAMs, where it was, you know, uh, for me specifically, I feel as though, like, every single time you have a bunch of expenses pop up, when it rains, it pours.

Like, a bunch are just gonna happen all at once, and it's these random attacks of money. What causes these, and what can kinda, what can kinda people do to defend against this? We kinda talked about it or alluded to it already, but is this something that you feel as though it's just kind of, hey, let's set aside, you know, cash on hand into some of these different categories so we can ensure that this just doesn't happen and derail us?

Yeah, random attack of money stress, right? It's just... I thought that was funny that they, they use, like, yeah, call them RAMs. I'm like, "Oh, that makes sense." Like, that's a good, that's a good acronym. I love a good acronym. It's life. Like, that's what you're, what you're seeing when someone's describing that.

They are describing being alive and things happening. And the, you know, that's it. The only thing that will, will stay the same is that things will change all the time. That's, that's our only constant is change. So all you can do is say, "Well, how can I be more ready for change?" And the way you do that is with cash.

Cash is the ultimate option. It gives you an... Like, you can always get rid of cash. You can always be like, "I don't want it anymore. I'm gonna get rid of it." But you can't always get it, right? So if you have it, you have the option. If you don't, you don't. So have... When someone's like, "I don't know how much a car repair will cost," we know it'll cost more than zero, so save more than zero.

Just set a little aside. We used to set aside money for our Honda Civic way back in the day I think it was 150 bucks a month. I just, out of the air, I was like 150 bucks a month set aside for the Honda Civic. It was an '02. It was probably at that point 10 years old, and we had just been putting money away.

And one, one day I look in our, our Civic repair category, and we had like $6,500 in there. So I go onto Blue Book, and it was worth like 4,200, and I'm like, "Oh my gosh, I actually... Like there's no way I'm gonna drop 6,200 on that car for repairs." So we literally moved some of that money. We were saving up for this Disney cruise, like it was probably 14 years ago.

Sa- And I was like, "Oh my gosh, Julie, we're gonna move some of the money toward the Disney cruise." And we were both like, "We just found free money." You know? Like this is amazing. But the money was there as an option, and we just redeployed it once I realized I was basically over, you know, over-saving in that, in that situation.

But the fact of the matter is, I had just pulled out of thin air 150 bucks a month for this apparently mega reliable car that never broke. So that's all we wanna do is just set money aside for it. Average American spends just over $900 a month on Christmas. I don't know if that includes travel. Um, so walk that through, you know, and kind of think through it for yourself.

Think about travel, extra food, hosting maybe, gifts. But that's one example where you can just say, "I'm not gonna have that be an emergency anymore." Um, there are no normal months in life. People will so-- Andrew, y- you've seen this, I'm sure. People so often will be like, "All right, we'll put it on the card, whatever it is.

We'll put it on the card. Next month we'll pay it off. We'll just wait for a normal month. We'll be able to pay off the card." Waiting for a normal month, that is a fool's errand, man. They never, ever... I mean, look, I was just complaining about my pool cover. Boom. I was com- I just mentioned how the car is vibrating.

There's another one. Like, God, when is a normal month gonna happen? If to me comes, I don't know. You know? We are yet to see one. So there is no normal month. There's just cash that you've set aside for life. And when you name it those specific things Um, you spend it not happily, but you spend it confidently.

And you can be like, "Look at me. I was totally ready for it. You know? I'm a superhero." It's one of the best feelings, and I think for a lot of people listening right now, they may be saying to themselves, "Well, I, I don't have that much margin left over to do this kind of stuff." But the key is, and this is something that I think most people need to understand, is just put something towards it.

All of a sudden, what's gonna happen is once you start to put some of your dollars towards some of these different categories and some of these different goals, you're gonna realize, "Oh, I'm gonna get a tax return, and when that tax return comes in, I can put a little more towards this," or, "Oh, I just got this bonus, and when this bonus comes in, I can put a little bit more towards this."

And just getting it started means that you are starting to roll that snowball downhill, and it's just really getting a little bit of momentum going. And you mention this in the book. If, like, let's say for example you have a car repair that needs to happen, and you have $700 in your car repair fund. But then all of a sudden that car repair is $850.

Well, then all of a sudden, all you have to do is come up with an extra $150 instead of the full $850 that would've completely stressed you out and- Yeah ... derailed your finances for the month and made you feel as though you were in this massive anxious state. No, instead, you've done most of the work, and then all you have to do is come up with the difference.

And I think that's just so incredibly powerful for people out there who are just trying to figure out, like, "How do I figure this out? How do I make these ends meet?" This is how you do it, just slowly over time contributing to these funds. Yeah, I liked that you mentioned the windfalls, um, tax return and things like that, or tax refund.

People underestimate, uh, how many windfalls they get, like how much extra money just kind of appears. Three paycheck months are a common one. And so, yeah, n- note that, like I said, there's no normal month, and that also can be to the upside, like windfalls happen. And, uh, yeah, make sure you are aware of them and, and use them as appropriate.

Most people, when they're looking for margin, I don't mean to like take away the magic of this transformation for everybody, but when people are looking for margin, we've done so many interviews, and I personally conducted, uh, well over 100, and I've gone with people that have paid off mountains of debt.

And you're always like, "Okay, you were 30 grand in debt, and now you're debt free, and it's been a year and a half, two years. Like, what? How?" And I'm not kidding you, Andrew, 100% of the responses when I say, "How did you find the money to pay off all that debt?" 100% say, "We ate out less Wow And it, like I hate saying that because it, it's so not interesting as an answer 'cause you're like, "Well, hold on."

And, and then, and then you s- and then I have this existential moment where I'm like, "Wait a minute. Are you telling me my whole existence, my whole career has basically been helping people become aware of how much they eat out, and then they decrease it, and then they have money?" You know? And you're like, "Yeah, that basically.

That, you could-- You summed it up. You know, we have cool software or whatever, but it's just tell- telling people not to eat out as much." Anyway, I'm, I'm a fan of eating out if it lights you up, but I am serious when people... Like, that's where they find the money. That marg- You, you used the word margin. That's what kinda tripped me up.

That margin is found... I mean, look there first. People talk about subscriptions. They're like, "I'll find subscriptions you don't use." Sure. Yeah. The... I'm telling you, that is not the needle mover. The needle mover is the eating out. Right. It's that- It's just crazy ... it's that. It, it really is, and I think there's, there's even along a similar line.

I've, I've talked to people, you know, in the past where I've said, "Hey, how much, how much are you spending on groceries per month?" And a lot of people, if they don't budget, they'll say, "Oh, I'm spending, you know, $800 per month on groceries." And then I go, "Okay, let's go add it up over the course of the last three months."

And they'll add it up, and they realize they're spending $2,000 on groceries 'cause they're just grabbing stuff and putting it in the cart. And there are little things like this that you can do where you can really look at needle movers, things that are gonna really, really shift and, and move the needle.

Obviously, a lot of people talk about housing, food, transportation. Those are the big three- Yeah ... that I think a lot of people look at when it comes to this. Daycare can be kind of like a, a fourth, depending on the season of life they're in. Daycare's big, yeah. Yeah. And that's a, that's another big one for sure.

And those are some of the areas that if you can really, you know, nail those in, you can make huge progress on things like paying off debt or things like, you know, achieving financial freedom. You and I both know many people who have achieved financial freedom in their 30s and even, you know, early 40s where...

And it's because they do stuff like this. Yeah. They think through this stuff. Um- Yeah, and, and it's not me saying like, "Don't eat out." Like, I, I don't care. Like, I truly don't. You can do... You, you... Your money's yours. You can do what... I mean, the whole book is about do with your money what you want to do. I just want you to do with your money what you want to do when you are aware of what you are trading.

Once you are aware of those trade-offs, asking what it's for and answering that question and realizing that if I do it here, I can't do it over here. If you're aware of the trade-offs, I really... I, I just haven't seen people make poor decisions. They really do make good decisions. They're like, "Oh, I, I wanna get rid of this credit card bill.

This is killing my cash flow," you know? Um, yeah, they do it. And they don't do it in a way where they feel deprived either. They do it in a way where they're like, "No, I didn't want my money going over there." So now using eating out as an example, again, couldn't care less, people. I don't. Like, eat out all you want.

Just be aware. But if someone were like, "Oh my gosh-" A lot of times people will spend usually what they spend on groceries, they will at least spend eating out. And I mean, that's the kind of the numbers that we, we've, we see. And when they see that, that when you transform an eating out number into more groceries, it's usually like, you know, you, you can reduce that by 80, 90%, right?

So They'll see it, and they don't feel like suddenly life is sad, you know? Because what they're doing is they're redeploying money from a place that wasn't adding value to their life to a place that is. And it, it's just a question of being like, "Well, is this what I, what I want my money to be for or not?"

And when it's not, you don't feel deprived. You feel good. So we're not talking about being frugal for its own sake, but it's just someone being like, "Okay, I was spending money here and it was adding a lot of worry to my life. Now I'm clear on what I want my money to be for and it's not that thing," so they spend less, and then the worry is gone.

So you're spending less with the worry gone, and then you have more money, and then you have to decide what that more money is for. And for a lot of people, it's getting out of some debt, freeing up more cash flow that way, you know, starting to do some stuff for retirement, thinking about financial independence, things like that.

So I love that I don't have to tell people what to spend their money on. Yep. You know? Like that's... It's very, it's very fun. And I love when I can get to a point where I'm like, "Well, what do you like to spend your money on?" And then you kind of get to know the person. You know? It's, it's a... it's fun. I love that part of things.

So we get things cleaned up. We make sure their money's doing what they want it to do, and their, that margin is found usually by just, by redeploying, and they're paying off debt and just killing it. Yeah. And not making more money. Like that's another thing we haven't really talked about. Like you mentioned it a little briefly, but, you know, people making over 150 grand or whatever.

Like we're talking about people that are making good money that if their 25-year-old self saw them making that money, they'd be floored by how much they're making, and they're carrying around the same stress as the 25-year-old. Maybe even more, because the 25-year-old was still probably a little clueless and naive.

So they're just carrying this stress and making so much. Like more money does not solve a money spend- a lack of, of skill around money spending. Exactly. Yeah. It's the, it's the area that I think you can do a tremendous amount with the money that you already currently are earning and the money that you already have, is what we say all the time.

And I think that's where, for many people, once you learn this skill, you're gonna realize pretty quickly that the, the... this is freeing. I think the resistance for a lot of people is like, "Ah, this is gonna be so restrictive. How am I gonna do this?" No. There-- It's actually freeing, because all of a sudden now you're taking your dollars and you're identifying those priorities, and you're spending more on the things that you love.

And this transformed, you know, my life when I was starting to do this, when then all of a sudden I realized, "Oh, this isn't restrictive. This is actually putting the dollars towards what I want. I'm not just taking random trips to Target and just throwing things in the cart and, you know, just walking out with the checkout and have a $200 bill all of a sudden I didn't plan for."

No, I'm, I'm being intentional about this, and that's where, that's where all of this comes into play. Yeah, it really is the in- I mean, you hit it with being intentional. That's the whole, that's the crux of it Exactly. That, that's the, that's the, the, the best thing about this. And one of the things that I love that you talk about too is you talk about, you know, identifying some of this money as you start to get through some of these goals and start to accomplish some of these things, but making sure you have some money for you, and having, um, a way for you to identify some of the things that you really want to do out of life.

And I remember a long time ago, you had a, an episode that you were talking about going through, and you were saving for something. I can't remember exactly what it was. But you were saving for something, and you're like, "I just started to put, like, 20, 30, $40 a month towards this specific thing." And I think it was a bigger ticket item.

It was, like, a, a something that was out there, and you started to just save small amounts of money, and it seemed like it was so far away, and it was something that it almost felt silly to save- Yeah ... this amount of money. But then all of a sudden, over the course of the next couple of years, you went back and looked, and it was one of those things that, uh, you had the full amount there, and it was, it was just there.

And I think that is really, really powerful for a lot of people to think about. Maybe someone right now, they've got their debt paid off, or they've got their goals achieved, and they wanna buy a boat, for example, and they wanna go out and buy that brand new boat. It's, it's just setting aside a little bit of money now, even if it's 50 bucks, 100 bucks.

If it feels silly to you, I think it's still worth doing, no matter how small the amount of money is. Can you kinda talk about people kind of identifying what they wanna do with their money, and how they can kind of spend a little more on themselves? Yeah. Especially those who maybe are not used to spending on themselves.

Yeah. It's a, it's a trick. Sometimes, like, we, we maybe have been raised just to think that spending is, um... you know, only spend on needs. You, you mentioned the word needs early on, and, you know, people only spend on needs and maybe a little bit on wants. I, I don't even like the distinction of needs versus wants.

I just call them all wants. Like, I want electricity. I want shelter, you know, badly, right? Yep. Um, and so, like, we don't need to have any kind of arbitrary distinction that we have, where, where we have to quibble. Need, want, need, want. Eh, all wants. We just want it all. Um, and so then it just comes down to, well, what do you want?

And it's interesting to think through when people have a hard time spending on themselves, I just think they need to do the exercise of asking themselves what really lights them up. Like, sometimes it takes-- it's worth elevating money in their mind and showing them what they're trading to get money.

They're really... And the book goes into this in the ear- in the first half. Like, I, I say first half. It's a short book, everybody. Like, I purposely- Yeah ... kept it tight. Uh, we self-published it. We didn't have to hit any arbitrary limit. I'm really, really happy with the length. Um, so first half of a very approachable book.

But we talk about how money is you. Not that your value is tied to how much money you have. Of course not. But when you look at what you give to get money, you give of your time, your, your knowledge, your know-how, your network, like, how you were raised, all the stories, everything kinda rolls up where it's you.

And you offer yourself to the market and provide some service or value, and you get money in return. So sometimes when someone's having a hard time spending money on themselves, I will take that tack where I'll say, "Well, listen, look what you give up for this resource." Time away from family, you know? Like, 40 hours of your week if you're lucky, right?

If you're normal, it's more like 50, 60. And look, like, look at everything you give up for it. Sometimes we, we give up our health for it. Sometimes we're like, "I can't, I can't exercise because of my job. I can't eat right because of my job." I mean, on and on and on. "I can't do these hobbies 'cause of my job." So look at what you sacrifice for it, and then just when you look at how much of you you give for the thing, you can then turn around and say, "Well, isn't it okay and totally appropriate and maybe even beautifully symmetrical if I also had some of me on the spending side?"

Right? Like, this just lights me up. And that's an introspective exercise for people. Like, that's them Really having to think deeply. Like, put away the social media, stop scrolling, get out a pencil and paper, and m- like laundry list, like what would light me up doing my money in this way? What would... Like, what could I spend on?

What could I buy? Um, what-- how could I give it, deploy it? Name your verb, but what is my money for that lights me up? And, uh, and then tell me about it, because I love hearing those stories. Those are the most interesting stories when people have figured that out. I agree, and I think it's just so fun to start to do that a- and to start to save up money in, in small amounts and, and really just see the, the growth over time.

And if you automate this, like you don't even have to think about it. It just kinda- Yeah ... goes into whatever, you know, whatever structure you have, whatever account, and you can automatically save for some of this stuff, and it's, it's very, very simple. Now, I think one of, uh, one of the cool things about your story is how good that you and your wife are at kind of communicating about money and how, how good you are at like having these conversations about money.

And, you know, I've noticed that, like just from your content and some of the stuff that you've talked about in the past, where you guys really do have these conversations that, that go deep when it comes to, to money. What does a good money conversation have? Do you guys have like a routine of how you talk about money, or is it just as things comes up?

And w- what does that look like in your relationship to, for people who are listening who are trying to figure this out with a partner? It's pretty ad hoc hon- honestly. Um, I'm the budget guy. Like, I'm the guy in YNAB. You know, I mean, obviously we're using our software. Um, and Julie is not in it. Like, we tried one time for one of my annual experiments.

She agreed to this, and I was like, "Okay, Julie will run the budget. You know, she'll run YNAB." It did not work very well. Like, it's just not her thing. So many other things are totally her thing, and she kills it, but it just, it's never been her thing. Um, so we're at peace with the fact that I'm totally in the app, and, and I have to do things like, "Hey, Julie, there was a $60 Venmo You know, "What was that?"

And she's like, "It was horseback lessons, remember?" And I'm like, "Oh yeah, that's right. 60 bucks every time is usually horseback." So in that way, this, like, the division of responsibilities, it works well. I'm in the app, and she can tell me if-- when I have questions, you know. She'll be like, "Oh, it was this or that."

The cool thing is she never feels attacked when I'm like, "Hey, what was that 60 bucks?" She doesn't feel like I'm coming down on her, 'cause that's after years of knowing what our money's for. We don't live paycheck to paycheck. The stress isn't there. It's really just a benign question. Now, if you were to ask Julie, "Well, what are your goals for your money?"

She would know. Um, we're in the process of building a new home. We, we've been in that process for forever it feels like. We're on the home stretch. And so she knows, like, oh, our money primarily, we're just funding that. You know? Like, there's not a lot else. But, um, then she'd say, "Well, where else do you like to spend money for the family where it's important?"

And she would tell you travel. Absolutely. Um, you know, nothing crazy. Spring break, fall break. We just-- whenever the schools will let us leave, you know, that kind of thing. So our big goals were just totally clear. Now, I've been in the business the whole time, and we raised, we've raised-- I mean, we aren't done raising some of them, but we've raised seven kids.

And so she's never worked out of the home, uh, since the first one arrived, and that's just been always what we've, how we've chosen to divide things. So she runs the house like a champ, and that's allowed me to just come to work, kill it at work, hopefully, and then come home, and the house is, it, it's running great.

So she-- like, if you were to ask me, like, what shoe size is your six-year-old? I, I, I have no idea. You know? Like, I don't even know. I have no clue. So we have very much division of responsibilities. As it comes to, as it relates to money, I find it v-extremely important that she is very well-versed on the business.

Like, the f- the finances. It's co- It's, it's not complex, but I would, this, I'll, I'll just say it frankly. If I were to die, I don't want her to be sad and also have this horrible financial black box where she's like, "Okay, Jesse for 20 years just kind of did his thing." Never d- not dishonestly, nothing hidden, right?

But just not clear, not, like, not easily conveyed. So I'm very, very keen on... Well, I'll tell people. I, we, I do this thing called the green box. That's like, that's a phrase that we use. I learned it from a guy 15 years ago. And Julie knows in our, in our password vault, if I were to die, she would just type in green box, and it's just everything she needs to start figuring stuff out and making sure she knows what's going on.

So that was a long answer to your question, Andrew, but it's super important. I w- I wanted to hit on two things. One, it's totally cool and appropriate and fine for a major division of responsibilities. But at some point, you gotta make sure that you are, you both know the direction you're headed, you head that direction, and if there is someone that's heavier in one arena, like I am with the finances, it's super important.

Just, like, literally for just the worst of worst things to happen, super important that she doesn't have that massive burden to carry as well as, you know, the grieving and all that. So All, that, that was a lot for people, but, um, green box. You can probably Google it and find someone's written up about it.

It's not like, it's not my idea. Um, so people should- I love that ... Google that and just like, you know, you know, just get your things tidy. It'll take you three hours to tidy things up, and, um, yeah. And I think that's, that's perfect in terms of like how... I think a lot of households are like that, like that, where they are trying to...

You know, there's a division of someone's usually the budgeter. They're, they're on top of- Yeah ... a lot of times the, the- Just paying the bills or whatever ... the family CFO. Yeah. Exactly. And so a lot of times that, that can happen. I can tell you the wrong way to do this, 'cause the way I started was the absolute wrong way, where I finally was like, okay, I'm, I put everything into YNAB, and I had it all structured.

And immediately what I did was I took YNAB, and I ran over to my wife, who I didn't even talk about this to yet, and I said, "We are spending way too much in all these different areas," and I'm showing her the, the computer and kind of going through this whole, this whole category thing. And then all of a sudden she had this like resistance immediately.

Yeah. Whereas then I get... I stepped back, and I thought about it, and I reframed it, and I said, "Actually, you know what? Let's talk about our goals- Yeah ... and what we wanna do and the, the ultimate, the destination, where we're going." And this reframe kind of transformed it for her as well. So for anybody out there who has like got someone, you know, who they are, you know, married to or they're in a relationship to who is not on board, this is the way I did it, was I, I looked at kind of looking at our why and the reason where we're going, and that we wanna pursue financial freedom.

We wanna do these different things. We wanna travel the world. And that was w- what allowed the shift to happen in my household. So don't do what I did and kind of throw a spreadsheet in someone's face. I've done that. I've done that before. I'm like, "Oh my gosh, groceries. Why do we spend, spend so much in groceries?"

And finally, like literally a decade in, I'm like, "Okay, I'm, we're just gonna put more money in groceries." Like that's, that's what we're doing. And, and- Exactly ... and until I start grocery shopping and cooking and managing it, and like pulling my, like pulling my weight there, I need to just accept this is how Julie's gonna run it.

And I did, and then I was like, "Oh, we're, we're good." You know? It's, that's, that's the reality. Um- Exactly ... yeah, the reluctant spouse, um, reframing them where you have them where you're like, "We're gonna work toward this goal. This is what our money is for," being really strong there versus of, not avoiding, but it's less about our money is not for this, this, this, and this, and more just this is what our money is for in this positive framing, uh, tends to go a, a pretty long ways.

Absolutely. And I think that's the thing that I saw immediately where the shifts happened for, for our family. Now she's- Awesome ... probably more, more on board than even I am at times now, where she spends less than I do. So I love it, and I-- that, that's been one of the, the coolest things. Now, you've also, you just mentioned it, you've, you've raised a big family.

Are there things that you are doing when it comes to, to your kids to, to teach them these principles? And are you building any kind of wealth building accounts, or are you having them kind of figure it out on their own? Or how are you thinking about that? Yeah. We, we've told them, and we've pretended, like, uh, they won't listen to this episode, so I can say this, you know?

Yeah. But we're, uh... Like, we just tell them, like, "You save half your money." We just made it sound like it's the most obvious thing in the world. So they all think that that's, like, the most normal thing to do, just save half of it. And the half is for, like, college, a church mission, um, basically once they're out of the house, you know?

And then the other half, um, they, they tithe on it, um, on the whole amount, and then they save half, spend half. And so that's just been kind of like you just do that, um, and they've accepted it as truth, and that's worked out. I will say when they're eight is when I actually will give them a YNAB account.

Or I, I use my same account 'cause I think YNAB lets you do... I think we allow, like, up to five maybe different users all under one account. So you don't have to, like, have multiple subscriptions, just one subscription. But, um, you... So I, when they're eight, I put them on there, and then we'll figure out how much money they have.

It's usually in a little separate account. And we start to... I show them how to set up categories, and every first Sunday of the month, I'll sit down with them And we'll reconcile their account. They've spent almost nothing, you know? And we'll just get them all square again, and then we'll assign new money.

They work for the business sometimes. They, they do mundane things. You know, I try and find work for them to do, um, where they actually get a paycheck from the company, and, um, they-- so they do work like that, getting mail, you know. You can imagine the kind of little kid stuff that you can give them to do.

They used to clean the office and things. Well, they still do sometimes. Um, when they're like 13, 14, they can start to run YNAB on their own, and then they'll inevitably, like, break it or get it out of balance or something, and they'll come to me, and we'll, we'll figure it out. So it's pretty hands-on for the first, you know, when they're little.

Um, and that's worked really well. Like, my favorite thing is when my kids will say things like, "I can't go to the movies 'cause I don't have money for movies," but they've got, like, thousands in their account. Like, they've got money. Like, they're-- they have one account for their savings, for their spending.

It's all, like, that 50% savings is just sitting in the account still. They only see it in YNAB as, "Here's my savings." And they act like it's as gone as gone could be. And that's, that is the ultimate. That's what I want, is where they're like, "That's not it." They look at their movie category, and they see nothing's in there, and they're like, "Oh, I don't have any money."

I love when that happens. Um, all that to say, though, the most important thing, most important, is that they see their parents talking about money positively Um, spending intentionally, um, saying why you say no. Like, "Can I have this?" "No, because we're gonna use our money for this." And don't just say, "We don't use our money for that."

Say what you use your money for, right? Like, it's an... I- it's, it's a trade-off. Tell them the full trade. Um, but and then seeing you talk to your spouse, see, you know, mom or dad, seeing mom and dad talk in that way that's, um, positive about money, what you want money to do. Um, yeah, when you go on some cool vacation, tell them like, "Guys, we saved up for 18 months for this vacation.

This is gonna be so freaking fun," you know? Like, "This will be so fun." And let them know, like, "This is... One of the reasons this is so fun is 'cause Mom and Dad have b- have worked on this for 18 months," you know? "We set aside $1,100 every month for 18 months." That, that'd be a sweet vacation. And, and then they'd be, like, mind-blown.

One is 'cause $1,100 is a ton of money for a kid. Yeah. And two, because they're like, "Wow, I can't believe how easy it is to spend that much money," and it kinda starts to put prices on things. But also, you show them, like, this is how you win, you know? Like, deferred gratification, the whole thing. So it's, it's so much them observing and you just having it be positive because you're good at money, and then they see you good at it, and they'll follow along.

You know they- And sometimes they'll, like, they'll spend the, on the funniest things, and you're like, "Oh, man, I wish... I really wish you wouldn't buy that. It's such a waste." Yeah. But you gotta stay quiet 'cause they gotta figure it out on their own. That leads me into exactly what I was about to ask you, which is have you noticed that some of your kids have different personalities when it comes to the way they spend?

Oh, God, yeah. Like, let me give an example. Completely. I have three kids, and my oldest is eight, so they're still young. Yeah. But my oldest will not even spend a single dime. He hoards every single- Mm-hmm ... every single dollar that he has come in. He goes and he will not spend a single dollar. He waits till his birthday to, to buy anything, and he wants us to buy it for him during, you know, as a present, that type of thing.

My middle son, I gave them... For example, we went on vacation just recently to the Bahamas, and I gave him, each of them, like $25 to go spend at the arcade. So they go to the arcade. My middle son is on the claw thing and just spending it in 20 seconds, like spending the entire money. Yes. He doesn't save whatsoever.

Uh, and then my youngest is still too young. She's only one and a half. But, like, have you noticed that? And how do y- do you, do you actually kind of guide them in different ways when you see those personalities come out? I tried. Like, I had one that was a spender, was like if the money, if the money was there His task was to figure out what to buy.

Like, and I, I try as I might, I'd be like, "Don't you wanna save up for something?" "Nope. If I have money, I wanna spend it." He's my oldest. And now, um, he worked all summer, saved up. He's in college and stuff, and, and he's... And I was like, "How... You know, you got, you know, all that summer money." He's like, "Yeah, I'm budgeted out through April."

So he picked it up along the way, you know? Um, but yeah, at the time, I was like, oh my gosh, this kid. It's like it's burning a hole in his pocket. And then I have like my-- I have to like do so much math to figure it out. My fifth, she, uh, she like just loves how much money she has. Like the number itself is meaningful.

So you have to be like, "Do you wanna buy anything?" But she just likes that she has more than her older brother. So, you know, we'll just take it, see where that goes. Um, yeah, they all come so different, and you think like you figured out the parenting thing, and then the next one comes and you're like, oh my gosh, no we didn't.

This is totally new. Um, yeah, they all have different personalities with it. And, um, I'm, you know, controlling and OCD and all these things, so I have to really Um, I have to be a cheerleader, not a coach a lot of the time. Just be like, "You got this. You'll figure it out." And instead of being like, "Hey, if you would just blah, blah, blah," it's like, "Nope, nope, just, hey man, you got this.

You'll figure it out." I think that's great, and I think that's one of the things that, you know, as time goes on, as they get older, my, my goal is to just continue to, to implement those lessons, talk through money, elaborate on, on some of the things just like you talked about. Yeah. And I think that's gonna be, um, really, really powerful.

Well, Jesse, thank you so much for coming on here. This is absolutely amazing. Where can people find out more about you, the book, and everything else? Yeah, so the, the, uh, I mean, ynab.com if you're interested in the software. The book is neverworryaboutmoneyagain.com. And I'll just tell people, go to the website because the, we- we're having, with this new age of AI, so many pirated versions.

Like I have... There was a copy of an audiobook. Like we're, we haven't released our audiobook yet. I have recorded it. And there was an audiobook released of our book of my fake AI voice that, I, I'll be honest, didn't sound... It sounded a little bit like me, but it wasn't me. And, uh, that kind of stuff's happening now.

So neverworryaboutmoneyagain.com, make sure you go there and don't get some pirated, you know, fake version. Um, and it's a quick read. I wanted people to accidentally read it in an hour. I really wanted it to not just be this tome, you know? Like the message is simple, not easy work, but it's a simple message.

People really can do it. I mean, at the end of the day, if people, more and more people know what their money truly is for, I think, uh, I think I will have, I will have led a good life leading people in that direction, be very content with that. Absolutely. And, and again, I read it in, uh, in just about an hour.

It is an easy read, so I highly recommend every single person take a look. And we'll have it linked up down in the show notes below so that you guys can check it out. Well, Jesse, thank you so much again and for all the, the good that you've done in this world when it comes to money. I, I truly appreciate you coming on here and, uh, and loved h- this conversation.

Thanks for having me, Andrew.