Ever wondered how to make financial plans so simple that even a fifth grader could understand them? Join us in this episode of Balanced Blueprints where Justin Gaines and John Prober share their insights on the art of uncomplicated financial planning. We tackle the challenges of finding reliable financial advice and the common pitfalls of relying on friends or family. Learn how to establish accountability within your circle once you've set a budget, and discover strategies to track and adjust your spending to avoid financial pitfalls.
But that's not all—we also dive into the delicate balance between financial discipline and treating yourself. Understand why it's essential to celebrate financial milestones, like taking a weekend trip after paying off a loan. We discuss the dangers of extreme approaches and advocating for a balanced and sustainable financial strategy. Finally, we emphasize the importance of accountability in relationships, especially in marriage, and how having an accountability partner can transform not just your finances, but also your health and fitness goals. Tune in for practical advice and relatable stories that will guide you on your journey to balanced financial freedom.
Ever wondered how to make financial plans so simple that even a fifth grader could understand them? Join us in this episode of Balanced Blueprints where Justin Gaines and John Prober share their insights on the art of uncomplicated financial planning. We tackle the challenges of finding reliable financial advice and the common pitfalls of relying on friends or family. Learn how to establish accountability within your circle once you've set a budget, and discover strategies to track and adjust your spending to avoid financial pitfalls.
But that's not all—we also dive into the delicate balance between financial discipline and treating yourself. Understand why it's essential to celebrate financial milestones, like taking a weekend trip after paying off a loan. We discuss the dangers of extreme approaches and advocating for a balanced and sustainable financial strategy. Finally, we emphasize the importance of accountability in relationships, especially in marriage, and how having an accountability partner can transform not just your finances, but also your health and fitness goals. Tune in for practical advice and relatable stories that will guide you on your journey to balanced financial freedom.
Welcome to the Balanced Blueprints podcast, where we discuss the optimal techniques for finances and health and then break it down to create an individualized and balanced plan. I'm your host, justin Gaines, here with my co-host, john Prober. In this episode, john and I step a little bit further away from the numbers and talk more about the psychological, emotional and relational aspect of creating the budgets, maintaining your budgets and just finding your way to that financial freedom. Thank you for listening. We hope you enjoy the episode.
Speaker 1:
Yeah, it's funny. I was at a cousin's wedding this past weekend and he was in the financial services industry for a short while two, maybe three years and had some mentors in it and one of his mentors he maintained a relationship with the guy was at the wedding, didn't know anybody else, and so we just happened to bump into each other at the water cooler and got talking and spent most of the wedding party talking and having a good time. But we got talking a lot about how your financial plan should be very, very simple, easy to understand, able to explain to a four-year-old type thing. You know you should be able to explain it.
Speaker 1:
you know four-year-old might be a little bit excessive, but you should be able to explain it to a fifth grader and they should be able to understand it and ask you know basic questions, and you'd be able to explain the answers to those questions. And if it's more complex than that, then you know you're probably doing something wrong. And so we got talking about the aspects of how do, how do you, make sure that you're making the right decisions? How do you how do most people end up finding that financial advisor or that financial mentor that educates them through the circles Doing all these things, how to jump through the hoops, what things to do, what things not to do, what's good advice, what's bad advice.
Speaker 1:
And this gentleman specializes with a lot of police departments. This gentleman specializes with a lot of police departments. When the cops get out of the academy then he helps them figure out their comp plans, how they should save for retirement, what they should do working with—because they have pensions, how to maximize that. What should you be putting aside outside of your pensions. Make sure you're set up. And he said you know, the toughest conversations he has is with the guys that when they were in the academy and they wanted advice, they turned to their left shoulder and said, hey, what are you doing?
Speaker 1:
turn to the right shoulder, say what are you doing, and then everybody just agreed on what they would do and rest is history, and a lot of you know most people don't have a financial background because it's not taught in high school, it's not taught in college. Your financial education 90% of the time comes out of what your parents taught you if they taught you anything at all, if they talked about money at all and that's just because it's been perceived as taboo to talk about wages. It's been perceived as taboo to talk about income. And so it's funny when you're in a wedding setting and you're talking to somebody, because at one point we actually talked about oh, how much do you make? What do you do? And we were having that conversation. It wasn't rude, we didn't even flinch or balk like whoa, why are you asking that question? It was because we're in that space. We're talking about that. Stuff is just normal, and we were talking about it from. You know, based on where each of our respective incomes were.
Speaker 1:
Are there different tax strategies that we're using in order to offset and just make it so that we can get, you know, financial gains quicker, or make it so that we can lower a tax bill to have more money to invest or start a business or do any of those sorts of things, and I guess you know long, long story, short, short, and what I'm kind of beating around on the bush here is 90 of people get financial information from their parents initially and then after that they start to get it from their peers. But we should be pausing, making sure that our peers are financially educated and in a position to actually make that judgment, call that decision, give that advice. But what the peers are good for so not every peer is necessarily a good source of information for financial planning planning but what every peer is good for you know every peer that you have a solid relationship with that you would talk about these things with what they are good for is once you've created the budget. You know, say you've listened to our podcast and you've done the budget, you've done zero dollar budgeting and, like we talked about a few weeks ago, where you have to not only create the budget but actually stay on top of, actually track, look at your bank statements, make sure that you're actually doing that. What your peers are great for is that piece of it Making sure that there's the accountability that you actually went through, tracked the numbers, made sure that you were on budget. And if you weren't on budget and you were over. What are you doing in order to make sure that that doesn't happen again in the future? What are you doing in order to make sure that that doesn't happen again in the future? Because if you're fortunate enough to be in a position where, okay, you were $200 over budget, we'll just take that money out of long-term savings, our emergency fund, move that into the account so that we don't overdraw anything, or you may have had a buffer in your account, so it's not actually that big of a deal. You don't have to move anything Now. How do you make sure next month you replenish that? Because most people end up in financial trouble not because they spent $5,000 one time over, that's because they overspent $100 here, $200 there, and then they continue to do that every single month for three years before it started to actually get painful and they realized that, wow, I have a credit card bill. Now that's five thousand dollars and you know possibly even more than that once you take into account interest, and you know if you're only paying minimums and how that's going to grow and build over time. And so it's those moves that slowly move you into that position of financial stress. But just like when you're working out, going to the gym and having an accountability partner is what's going to allow you to continue going to the gym, continue to make those gains. The same thing is true in your financial position. If you don't have somebody that you can be honest with, that can look at your budget and look at you actually writing in your transactions, and look at your bank statements and verify that you're actually doing what you're saying you're doing and you're not lying to yourself. You're actually doing what you're saying you're doing and you're not lying to yourself. If you don't have somebody like that in your financial journey, it's going to take a lot more personal resilience and dedication and discipline to actually execute on that financial plan than it would if you had somebody right by your side saying hey, you know your budget, you're pretty tight on your budget this week. Why are you going out to eat this week? Why don't we go to the grocery store and said spend 15 to be able to cook that meal that we were going to eat out for, and 20, 30 and so having an accountability partner on the financial side, I think, is something that is very rarely discussed and talked about, but plays a crucial role in you being able to be successful in it.
Speaker 2:
Definitely. I think it also plays into the fact that emotional regulation and being that open, feeling safe with people isn't talked about at a young age or through your parents. Maybe your parents didn't talk about it, you don't learn about it in school. Because that's definitely at least I think seen in today's world of like being that open about your financials, like you said, even when you're at the wedding. The setting made it a lot easier to talk about with someone. But normally I feel like people are a lot more closed, even with close friends. So it's like first you need that ability to be able to be seen and not embarrassed or feel like you're judged or you don't or not get upset when your friend says that exact thing of like why are you eating out? Let's, you know, let's cook instead, because I feel like a lot of people just get triggered instead.
Speaker 1:
So it's definitely start even with like well, right, and I think a lot of people get triggered because you know there was I think it was five to seven years ago there was that big push of you know your Starbucks coffee is what's making it so that you can't buy a house, and you know it's, you're overspending on that, and it was. It was just such a hyperbole that made it so that people just didn't listen to it and just completely ignored it, because they're like how is my ten dollar cup of coffee making it so I can't buy a house? And I think if you, if you run through the financial picture, the habit of spending ten dollars on coffee once is not impacting your ability to buy a house.
Speaker 1:
it's, it's not, however, if your habit is to buy that ten dollar cup of coffee every single day before work that is impacting your ability to buy a house, and the reason being is that that $10 cup of coffee every single day go to work. So even say it's only four out of the five days Say Friday you're feeling good and you don't need that cup of coffee. That's $40 a week. Most people will work 45 to 48 weeks in the year. The other ones they take vacation. So we'll say when they're on vacation they don't spend that money, which it's probably an exaggeration because more likely than not, you're spending that money spending more you're spending it in different areas.
Speaker 1:
But we'll, just for sake of argument, we'll take the 48 weeks and you know, ten dollars a coffee and you're doing that four days each week. So just doing some quick math here 16, 19. That's 1920 dollars now. If you do that Now, if you do that for 10 years, that's 20 grand and that's just the pure dollars. That's not interest, that's not, you know, putting into a high yield savings and making 5% on that. And I can tell you that the houses that I bought with FHA or conventional first time home buyer loans even just a conventional owner-occupied home you're going to be at a 5% down payment and so you can get into a starter home for less than 20 grand. You can do it. I've done it myself Even with the crazy high prices. I've acquired property during the crazy high price markets with owner-occup occupied down payments and you can move into a property for less than that $20,000 number.
Speaker 2:
Especially these days.
Speaker 1:
Yes, it is $10 a day. Yes, it is four days a week most of the year. And yes, it took me 10 years to get to that number. Yes, it took me 10 years to get to that number. But the point I'm trying to make here is that it's the habit that impacts the financial position. It's not necessarily the $10 cup of coffee. It's the habit of spending $10 on a cup of coffee every single day before work for 10 years and not putting that money in elsewhere. I'm not saying that you can't have Starbucks.
Speaker 1:
I'm not saying that you shouldn't indulge in these things because that's another part of the psychological element of maintaining your finances and being in that position is if you have a goal of deleveraging, clearing out debts, and you say, okay, I want to clear out debts, that's what I want to do this year, that's my goal, that's my New Year's resolution is I'm going to clear out debts. If you do that throughout the entire year and the next New Year's resolution you make another financial goal that requires you to be financially conservative and not go on vacations, not spend money on extra things, not buy a cup of coffee every single morning, not do all of these things, and you do that every single year. Eventually, you're just going to drown yourself out and just drain yourself completely of the ability to maintain your financial freedom and your financial trajectories, because you're going to get to a point where you're like what am I this for? Why am I giving up all these things? And so you know there's the emotional balance there of making sure that you have enough life satisfaction and you're having enough life's pleasures.
Speaker 1:
That do cost money. Not everything is free. Hardly anything is free. There are things you can do, but most things require you to spend a little bit of money. It's not about not spending that money. It's about not spending that money every single week, every single day. It's about building those habits so that you then use them as a reward system, so that, as you, if you're trying to pay down debts, once you pay off one of those cards, take the payment that you're paying towards that every single month to pay it down and use that payment next month to go do something fun to reward yourself.
Speaker 1:
It's not going to impact your financial position one bit, because you were rolling all that money towards that payment even if it was $100.
Speaker 1:
Say you were taking and you were just paying an extra $100 towards your car loan and you got your car loan paid off. So now your car loan, and we'll go super low numbers here. Say you've had the car and you were in a crazy long thing and you had low rates, you were paying $350 a month and you were paying an extra $100 on that. So you're paying $450 to get it paid off Next month.
Speaker 1:
Go take a long weekend or just go take a two-day trip and go spend the night somewhere with a friend and reward yourself for having that accomplishment. Because if you do that, it's going to, in your brain, connect paying down debts with these highly enjoyable things that you're doing. If you do that, you're going to engage the reward system to make it so that your brain starts to think in a way where it's like, okay, I'm going to achieve this goal financially and then I'm going to have freedom after it. But if you constantly jump from one goal to another and it's always a matter of you know a starvation tactic of you know, minimize my expenses.
Speaker 1:
Put all my money in this one basket. Don't spend any money anywhere, don't do anything, don't overspend, don't go on vacation, don't take a weekend trip, don't even buy a cup of coffee. You're going to be so upset with the amount of money that you're making, even if it's good money, that you're just going to say to heck with it. I'm going to do whatever I want and I'm not going to focus on my budget anymore, and I'm not going to do any of these things because you're going to be burnt out. So you have to find the balance there. No-transcript. Stick with it for the long run.
Speaker 2:
Yeah, you see, today it's so focused on rough it rough it being tough. Delayed gratification that it's that that reward system has really been lost yeah, and I'm not saying that that's a bad mindset, I'm just no it's give and take.
Speaker 1:
I think you should rough it. I think you should, you know, delay gratification, because I think there's way too much instant gratification but you have to. Part of delayed gratification is that the gratification is delayed yeah, it's not eliminated, it's delayed.
Speaker 2:
Yeah well, everything's always tipped to one side or the other. That's what I mean it's. It's either instant or it's never. It's like right, just pick in the middle.
Speaker 1:
So yeah, and the hard part is is that because everything's so polarized and you know people operate in the extremes, it's like it's equally the problem for both sides. If you're somebody who just constantly delays gratification and just never constantly pushes it off and never takes that gratification, or you're somebody who just instantly takes it, those people are having opposite but equal struggles.
Speaker 2:
I feel like I've seen people actually experience both, because you fall into a cycle of, let's just say, being motivated. For example, you're doing lots of instant gratification things, you're not achieving your goals scrolling on social media, so then they'll flip to the. I have to make up for all that. I'm now going to do only work and not have any, you know, because I need to counteract how much instant gratification I've been taking in, how lazy I've been being, so I feel like they even experience they find?
Speaker 1:
the balance that way. If I'm on this side of the teeter-totter, let me just jump on the other side of the teeter-totter which doesn't work, yeah, and just keep going back and forth.
Speaker 1:
yeah, you're never creating a balance that way. You're just, you know, but hopefully because I definitely fell into that category of you know I was on one side and then I jumped to the other. I, I think what you, you know, hopefully, what you're doing, though, is you're jumping a little less into the other side each time, so that, eventually, you end up finding that happy medium in the middle, where you're not jumping to the complete polar extreme. You're jumping, yeah, you're going a little bit that way and pulling it back in and going back and forth, but I think, if you outline what your goal is and then attach the reward to it and show yourself the timeline, your ability to stay in that happy middle zone is a lot easier, because you can tell yourself okay, once I pay this off, I'm going to get this.
Speaker 1:
The problem that I have personally is once I do off, I'm going to get this. The problem that I have personally is once I do this, I'm going to get this or get that, and I never get that. I never give it to myself. You know, I, I, I'm guilty of it right now.
Speaker 1:
I said I was going to pay off one of these loans and then you know I wasn't. I was going to stop getting massages until I did this, pay off these loans. And now I've paid off the loans and I'm still like, eh, I could use that same thing for this. And it's like no, you need to go get a massage. That's the thing you need to do. You need to step into that space and actually give yourself the reward. Otherwise, the next time that you use that as the carrot, your body is going to say that's not a real carrot, that's just. It's just what you're telling yourself. You're just going to keep pushing it off. So, you know, maybe after we get off this call, that's what I'll have to do is schedule myself a massage and, you know, eat some of my own medicine here definitely and this is another great way, I think, to pull in the peers and you using other people of like.
Speaker 2:
like you said, you need to write down the goal and the reward and maybe a timeline for it, and your friends can help you stay on track with that and make sure you check up, make sure you're staying on track with your timeline, obviously adjust if needed, but then also making sure you're get your carrot.
Speaker 1:
Right?
Speaker 1:
No for sure. Having the accountability partner on this is huge. It's absolutely. I mean, there's a reason why married couples grow their net worth at a much faster pace than non-married couples, and I think the reason being is it's not a dual income piece, because even as non-married couples, you still have a dual income. I think the difference is is the attitude around it. The attitude is that it's our money, versus the split money concept.
Speaker 1:
Now I'll back up a minute, because I am a huge proponent of, even when you're married, having three accounts a joint account and then two personal accounts but it's the attitude of what are we doing together to achieve this goal, and so the minute somebody starts to veer off target, the other party steps in and says no, no, no, this is what we agreed to, this is what we're doing and this is going to be our reward at the end. So let's make sure we stay on track so that we can get to this reward and you have that checks and balance system. I think you can do it with friends if you have the right relationship, if you share the right amount of information and, most importantly, if you're willing to take the feedback. Accountability partners Accountability partners only worth it if, when they actually say, hey, I'm recognizing this and you said that you did not want to be doing this, but you are, if you react with aggression or being upset towards them or you know anything other than thank you, I appreciate you pointing that out to me and then taking the habit to actually correct it it's not going to have that benefit.
Speaker 1:
But when you're married, as long as you don't have a mindset of divorce, when you're married, you know you're in it and so you know, know you can be upset that they pointed that out, but at the end of the day you have to turn around and say I did say that I do want that. Let's, let's move forward, let's do something else now, let's get right, let's get this bandwagon moving. And so you know that accountability part is huge for financials, health, health, fitness. You know it really doesn't matter what category you go into If you're trying to achieve something. Having an accountability partner is a huge part of it.
Speaker 2:
Thanks for listening to our podcast.
Speaker 1:
We hope this helps you on your balance freedom journey.
Speaker 2:
Please share your thoughts in the comments section below.
