Dec. 8, 2020

Why You Need a Budget - Four Rules to Manage Your Money

Why You Need a Budget - Four Rules to Manage Your Money

Our guest is Jesse Mecham. He is the founder and CEO of YNAB (You Need a Budget).


In this episode, we’re joined by Jesse Mecham. He is the founder and CEO of YNAB (You Need a Budget). His popular personal budgeting app is helping more than a million people gain control of their finances, get out of debt, and save more money.

In this episode you’ll learn:

  • How to break the paycheck to paycheck mindset
  • The importance of giving every dollar a job
  • What you can discover by reviewing your spending habits
  • The Four Rules of budgeting
  • Why budgeting is not about restricting spending
  • How a budget can lower stress and improve your marriage
  • Why money doesn’t buy happiness but it can buy some fun toys if you plan for them!

Resources

Check out YNAB

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Transcript

54-YNAB_You_Need_a_Budget

Jeremy: [00:00:00] This 

is the fit 

mess with 

Zach and Jeremy taking a slightly different approach to wellness. This week, we will be talking about your money. 

Zach: [00:00:12] Whoa. You can't talk about money. 

Jeremy: [00:00:15] That's taboo. Well, but that's. That's what we do here. We talk about the things that generally are considered not okay to talk about.

So, like I said, we will be talking about your money. We are going to be talking about a tool that is available to help you get your finances under control. Uh, at least as much as you can possibly predict and how that does play into your mental health, your emotional health, and can lead to an overall.

Happier life. If you're not dealing with the constant stress of money, we're going to do that with our guest. His name is Jesse Meekum. He is the founder and CEO of why NAB it's a acronym for you need a budget. He also wrote a book about it a few years ago called you need a budget, the proven system for breaking the paycheck to paycheck cycle, getting out of debt and living the life you want.

That's really what we talk about on this show every week is living the life that you want and the things that you need to do to make sure that you can accomplish that and overcoming the various obstacles that get in your way. So typically people are not comfortable talking about money. In fact, you know, Zach, you and I run a business called the other day with, uh, a marketing person.

And in the middle of it, they were asking us how much we make and how much we wanted this business to offset that. And I just remember thinking like, you, you can't ask me that you don't ask someone how much they make. 

Zach: [00:01:25] Yeah. That was my initial reaction to, it was like,  no way. I mean, granted, we didn't answer them because.

You know, it was a sales call and that would've just led to other issues, but, but you're right. My initial reaction was how dare you. 

Jeremy: [00:01:39] Yeah. And you know, money that maybe for some are, you're wondering why we talk about this, but for me anyways, uh, my relationship with money is a huge strain on my mental wellness.

If I'm constantly worrying, you know, can I pay that bill? Can I pay the rent? Can I, you know, put food on the table? That's going to put a huge strain and has for most of my life put a huge strain on my mental health and, and my ability to function and perform the way that that I want to for my family and for myself.

Zach: [00:02:12] And that's just your, uh, worry about money specifically, right? There's the whole other Avenue of. Talking finances with your spouse and the level of stress that that involves. Right. I don't have the data in front of me, but, um, money issues is like probably in the top five of things that people, uh, spouses fight about.

Jeremy: [00:02:32] And I think probably leads to divorce more than most other things. My take on this, I have largely been the one in our house that is in charge of the money. I manage the budget. But I'm not the one that spends the money. It's a very complicated thing, but you know, my wife does all of the grocery shopping.

She buys the clothes for the kids. She does all the stuff. And then I'm the one that has to kind of make all the numbers work out the right way and it creates, uh, it, it can create tension. When, you know, she's asking me, Hey, we need to spend 50 bucks on shoes for the kids. And if we don't have it. I feel like the bad guy.

That's just a feeling that I take on where I'm the one that has to say no, I'm sorry. Or I have to go, well, we need it. And now it creates this stress where I've got to figure out where does that money come from? So that's an incredibly challenging thing. And that's, that's kind of a best case scenario that the more worst case scenario is the way that I've lived my life, mostly for, you know, up until just very recently.

Sort of, uh, you know, the paycheck comes in, you figure out how far it's going to go. It's not going to go far enough. And then you have to kind of play these games where you move money around to cover what you can until there's more there to bail you out or go deeper in debt. And for a lot of people, that's, that's been the reality.

It's just going deeper into debt because there's not more money. Companies are not paying the kind of wages they should be paying. There's just not enough opportunity for people to. Work one job and survive and thrive. Honestly. I mean, survival is one thing, but to be able to go on a vacation once a year, go out to a fancy dinner every now and then, like those kinds of things are just not options.

Certainly not for me right now. And I imagine for probably most of the people that are listening to this. 

Zach: [00:04:20] So we talk a lot on the show about managing your, your mental health, your physical health, you know, and it's a daily struggle and, you know, in my world, You know, managing your money is just as critical as managing your health and your, your, your mental wellness.

And you have to do it. You know, it's not a once a month thing. It's a, almost a daily thing that you need to have checks and balances on and have a good management program in place in order to, you know, not just, not only get out of the paycheck to paycheck, but to actually thrive. Um, and everyone's situation is different, of course, right.

You know, the more management you can put around that money, the. Less stress. There's going to be the less fighting. There's going to be less, um, mental anguish. You're going to have around it, in my opinion, 

Jeremy: [00:05:08] what Andy and I can testify to that. I mean that it has been the case for me. And it's largely because of the tool that we're talking about this week.

It's, uh, an online, um, money management app. It's called wine app. It's an acronym for you. Need a budget. And this is the most recent and in the line of things that I have tried to manage my money, you know, uh, before banking was all online for us, we did it all on paper. It was very tedious, lots of room for error.

We moved online and, and my wife kind of checked out at that point. Like it was like managing it online was just something that she couldn't get into for whatever reason. Um, and then from there I tried different apps, uh, that. I can look back now and look at my current situation and go, well, clearly they didn't work because we're not healthy financially.

We're trying to get things under control. And that's where this tool, why NAB has really been different. And it's, it's almost like this Buddhist approach to money that I never considered before. I always went into budgeting with the idea of, well, I'm going to make this amount of money this month. These are the bills that are going to come in this month.

And as long as the money coming in was more than the money going out, everything should've worked out fine. However, you can never budget for the radiator going out the flat tire, the car accident, the sick kid, the sick pet, whatever. And something about the way that YNAB sets up their management system has completely changed my perception of money.

And it is a very much, uh, they always say every dollar has a, uh, a job. And it truly does when every single day I spend maybe two minutes on my budget, just looking over hope. Yep. Everything's exactly where it's supposed to be. And the concept is how much money do you owe today and how are you going to pay for it today?

And thinking about my money in that way has been a complete game changer. We've been able to pay down some debt, but most importantly, Emotionally, mentally, I don't wrestle every week or two with, Oh God, what are we going to do now? Oh, we don't, we don't have it. Where's this going to come from? And this, by the way is with my wife laid off for the last three months, four months.

Wow. So, so imagine if she was working, full-time like, it would just be night and day from where I was even a year ago. Uh, and that was using, you know, online free programs. Uh, you know, I'll just, I'll throw them under the bus. I was using mint. Um, and it's fine for what it is. And if you can think of your money that way, and, and you'll find out some of the principles you're about to learn about, you could even apply to that and make it work better, but it's unfortunate for them and other programs that they don't teach it the same way that Y NAB does so that more people could have a healthier relationship with their money.

Zach: [00:07:51] Yeah, it is. But it is a different way of thinking. So, yeah. I have always historically budgeted the other way. Right? Same, same as you. I'm going to make X this month. Here's what I know I need to spend this month. And here is hopefully the leftover. Right. 

Jeremy: [00:08:09] But 

Zach: [00:08:09] then there's all the little things, right. And it's a month worth of little things that, you know, at the beginning of the month, I said, well, I have this much leftover so I can do little things.

Jeremy: [00:08:19] Right. 

Zach: [00:08:20] But after a month of little things that adds up to one big thing. Yup. That was more than the leftover. And then we have to draw on savings to pay things. And that has worked for me, you know, full disclaimer. I've been really good with managing my money and I've had a lot of good luck and fortunate jobs, but, you know, even at any level you're at right, you, if you don't plan appropriately or if you don't plan enough at the end of the month, you're going to have surprises.

You're going to have a Oh shit moment. And, you know, That has, it's always been interesting. Right? And it's always caused friction because once a month, my wife and I would have a big blow up. Right. Have you spent money on this? And I didn't do anything. And it was just this crazy thing. And now with the YNAB approach, it's, it's the complete opposite, right?

Every night we're having a five minute conversation of what do we need to spend tomorrow? What do we need to spend tomorrow? Here's how much we have to spend tomorrow. We still butt heads and they're still heat. But it's a whole bunch of really small, heated conversations as opposed to one big blow up conversation, right?

Yeah. It's, it's been, but it is definitely a different, um, style and approach. To what most people are used to. So 

Jeremy: [00:09:36] it's interesting talking about our, uh, you know, marital issues regarding finances. And that is really where, YNAB was born our conversation with Jesse Meekum, he's the founder and CEO of YNAB.

He also wrote a book it's called you need a budget and a proven system for breaking the paycheck to paycheck cycle, getting out of debt and living the life you want. Jesse was a young guy getting married and, you know, it was sorta came to the same realization that like, you know, we've got to get our finances under control.

And that is really what launched his career and this service that has been beneficial to so many people like us. And we think you can benefit from it too. So that's why we invited him on. And, uh, we started talking to Jesse about. Just that story. How, why YNAB came to be and how it completely set his life on a new course.

Jesse Mecham: [00:10:20] So when I first built the spreadsheet that we ended up selling, uh, that was just for me and my wife, Julie. So we were newlyweds. I got married when I was 22. She was the ripe old age of 21, and I still had three years of school left. And, uh, I chose the accounting track cause I saw that they had like a 99% job placement, I thought.

Okay. That's that sounds good. Sure. Um, And, uh, a few, a few months into our new marriage. I, I just recognized we've got, I mean, we we're just living on nothing. We've gotta be really careful with our money. And so I, I built a spreadsheet based on a class that I'd been taken in school, like, you know, ISIS, 100 or something.

And there's like, here, these are spreadsheets. They add things up. And I, I built a little spreadsheet for us and I come to Julian cause we're, you know, we're newlyweds still. I'm like, Hey honey, uh, What do you think if we tracked all our money in this and, and I could do no wrong during that time. So she's like, cool, that's fine.

You know, like we had no baggage, we had no habits to unwind. We have nothing to unpack there. And so that part was yeah, was easy. Uh, the sooner you can start in the relationship, the better for sure, but, um, all doable at any point, but that was easier for us. And then, um, as we use the spreadsheet and it really was just one guy's thing for one guy situation, you know, with his new wife, um, I just noticed that there were things that I could tweak and kind of ways I could improve it.

And that, that went for about a year. And then we found out we were going to have a baby. It was on purpose, but, um, you know, we found out that that had worked. And so we ended up deciding this is kind of one of our non-negotiables that Julia would be able to stay home. It's like, she's gonna be a mom. She was the breadwinner at the time making, I think, 12 bucks an hour.

So. With her income going out of the picture. I just thought, well, I gotta be able to cover this shortfall in some way. And then I had this fairly egotistical idea that, you know, Hey, maybe people would want to buy this spreadsheet that we. That we've been using. And, uh, that was, that was that. So I launched it a few months after my baby was, was born, uh, September of Oh four and, uh, the rest, as they say is history.

Jeremy: [00:12:30] Yeah. Did you, 

Zach: [00:12:31] did you, did you actually sell the spreadsheet in the beginning or did you convert that into an application? I'm 

Jesse Mecham: [00:12:37] curious. It's a good question. I did both. So I sold it out of the gate. Um, very for sale. We, I had to refund cause I couldn't get it to work on this woman's Macintosh computer. And I was like, what's a Mac.

I never even heard of that. You know, it was, I had to go to like this lab at the, at the university where they had designers and be like, are there Macintosh? And they're like, they're right here. And I, I remember I, I looked it up the spreadsheet in that and it was like errors all over the place. So I refunded the very first purchase ever made, but I did sell enough of it.

To, uh, it was like 20 bucks a pop, you know, um, I sold them enough to make the money that I needed about a year and a half later when, um, my now business partner and CTO, when he came along and said, Hey, I could improve the spreadsheet. I said, well, why don't we, why don't we build some real software at that time, there was no concept of an app or, you know, the mobile phone, but.

Standalone software was, was the obvious way to go. So I, any earnings that we had been squirreling away for a house down payment, because you guys would probably appreciate, I mean, back at that time, it was like homes were on a tear and you thought if you don't buy a home, now you'll never be able to buy a home ever again.

So we were thinking we've got to save for this house down payment. So anything that wind I was earning through this spreadsheet, we were putting there. But then, uh, when Taylor came along and said, I could build this for you, make separate, you know, make a separate. Application. I came to Julia and said, Hey, what if we didn't use the down payment?

And instead paid this random guy I met on the internet to do that, you know? Okay. Wow. 

Jeremy: [00:14:08] That's that's that's love right there. That's trust. 

Jesse Mecham: [00:14:10] Yeah. Is love crazy love, maybe. I don't know. 

Zach: [00:14:14] So, uh, so yeah. That's awesome. I love, I love hearing that, that full circle story to how you got to where you are now. A little history.

I, my wife, when my wife and I met, we were both horrible with finances and I recognized that one of us needed to step up and take care of finances or we'd be in big trouble. So I have always had like this big, complicated, um, you know, spreadsheet that worked really well for me. Yeah. But my wife was never interested in getting into.

You know, helping me with managing the money. So it was always me. The, the, the spreadsheets were so complex that even when I tried to show it to her, she was super, highly anxious about it. And it caused more problems than it was really worth. So I always pulled it back. So then we, you know, um, I heard about YNAB and signed up for it.

And this is a concept that. You know, my wife was able to get on board with, and now she's, she's kind of working with it a little bit. Now it's a partnership. Um, so, um, I'm a big fan of, of, of your software. And I, you know, I guess I'd love to just go right into how does your software work and why, why do people really need budgets?

Jesse Mecham: [00:15:23] Yeah, a budget is, I mean, just to kind of clear up a myth out of the gate, like people hear budget and they think. Loss or restriction or depravity or jail or some other just horrible situation. And so people naturally attach a budget with spending less, and we're trying to slowly break that paradigm a little bit.

A budget is just a plan for what you want your money to do. And if you, if you want to spend less go for it, but if you want to spend. More elsewhere, uh, budget we'll, you know, we'll help you with that. So it's not about spending less, it's just about spending with intention. Um, the, the software is extremely important to us.

It's how we make our money. So that's how we pay all the bills. But when we're teaching people, we're just teaching them a way of thinking about their money and the software lines up with that thinking nicely. But for anyone that's listening, you could. Take the principles we teach, you could attend one of the classes we teach online and you could roll your own spreadsheet.

You could probably use a competitor's app pretty easily for it. My point is that the principles they stay. Okay. And the software just kind of greases the skids. So I just want to put that out right though. Like I love selling the software. I want to sell as much as possible, but at the end of the day, it really is a way of thinking about your money.

That's the big difference maker, 

Jeremy: [00:16:46] right? I want to jump in there because that's something that, um, you know, my wife and I have been married for 20 years. Uh, I have tried over 20 years and, you know, catastrophes, financial, big and small, like all of the things I've done, all of the apps I've ever used. I end up in the same place, deeper in debt.

I'm not really sure where the money went, even though I can look back and go, well, God, what was that? And w why do we have all this money now? I just, I felt, have felt lost and just had no answers. And, uh, you know, and not to turn this into an infomercial for your app, but, but my God, how much it has changed in the what five months or whatever I've been using it.

Um, and I'm not even talking about like having a massive amount of savings or whatever. I can see that we're sort of whittling away at debt. Um, excellent. And the biggest thing is I used to every week have almost a panic attack going, how are we going to cover the costs this week? Yeah, just this constant mental battle of we don't, we don't have it.

Where's it going to come from? And the way that, that you guys do, I was so has I'm hesitant to pay for anything because money's always been a problem 

Jesse Mecham: [00:17:52] like that. 

Jeremy: [00:17:53] So I was like, do I want to pay for an app? That's going to help me manage my money, which I've failed to do miserably for 20 years. It sounds ridiculous.

But I did, but I did the free trial. And then your company was amazing. I reached out to them. Um, at some point we were, I just had questions or something and I explained that my wife was on furlough and they're like, Oh, here have, have three more months, uh, on us. And so that was really cool that they did that.

And I needed that time to really get my head around the concept of only spending or only having a plan for the money that you have. I fell into this trap constantly of I'm going to have this much money this month. Here's how I want to plan it. And then of course it never goes that way. And so sort of building in the steps that you have of categorizing, um, the long-term things, you know, the memberships, you know, you're gonna have to pay for the, the auto, you know, the car expenses, those kinds of things.

And just thinking about this is what I have, where is it going to go right now has been a total game changer. Is that. I mean, not to sound completely ignorant to all things finance, but is that unique to, to what you guys do? Or is that kind of the, the golden rule? 

Jesse Mecham: [00:19:01] I think, I think it is a golden rule. I think it's very, very powerful in the sense that, uh, the idea of sinking funds of, you know, saying, Hey, we've got Christmas coming up and it's going to be, you know, unfortunately it's not to, you know, maybe you think about it before it's two weeks away.

Maybe you think about it, like. Six months before, but be that as it may, you're looking ahead and you're saying, okay, these larger, less frequent expenses will pop up. And that's our second rule. And we call them true expenses. And a lot of the time people are spending money and they're looking at what they make and they're looking at their expenses and you're saying, well, what are your expenses?

And they'll naturally fall into. My cable bill. Well, hopefully they've cut cable, but you know, my other monthly bills that are kind of on that, on that thing. And they don't think about all of the other expenses that are like, well, do you celebrate birthdays? Do you ever go to a wedding? Do you have, I mean, do you have a, you know, life insurance premium that comes due?

Do you want to go on vacation? All of those are not just like, Oh yeah, that was a little expense there actually a lot of the time, like, Quite large expenses as well. And so it's kind of a, it's kind of a double, double whammy there. And so when you're looking at those and you're breaking them up into monthly amounts, it starts to give you a picture of what your real expenses are like.

And then if you roll back to Rwanda and I'll just zip through it really quickly where we say, we said, give every dollar a job. Yeah. But we're only talking about money that you have on hand right now. Yeah. And we're, we're actually building in this feeling of scarcity that. The scarcity that, that anxiety that you had every week, that's real, and that's not what we want, but we do want to introduce the idea of finite money so that people then have to prioritize and what we've done and marketers and banks and all the, all the bad people, you know, they're, they're all conspiring to take as much as you can from, from you as much as they can from you as possible.

And so you have to just kind of recognize, okay, everything's kind of stacked against me. So. I need to be painfully aware of what is, what my money needs to do, and everything is set up for us to spend money as easily as possible and to not feel like we're ever running out. Yeah. And we're trying to get people to feel what it's like to run out.

And it might mean you're paid in four days, but. Run out for a day or two and see if your mind doesn't really easily tell you what's most important. Yeah. And as you do that cycle over and over, which is just budgeting where you're like, okay, we got money. Let's, let's give every dollar a job. Let's think about those larger, less frequent expenses.

And let's say, Hey, we want to go out to eat. Oh, but we also have Christmas in six months, suddenly you and your wife are sitting there. It's like you have future the future. Two of you that have been married six months longer. Now they come in and they're like, Hey, just so you guys know, we don't want to be up a Creek at Christmas time.

Yeah. So when you're debating, whether or not you should go out to eat tonight, Just let that into your psyche a little bit, decide and weigh that. And then the four of you were at the table and you're like, okay. Yeah, I think we can do that. We'll do, we'll go out to eat here instead of somewhere, a little more expensive.

We'll send you guys some money for Christmas. If people imagine that they're having that conversation with the future, you are future couple. It really helps crystallize. What's most important. And then you find that it's not that you're cutting back and you're like, battening down the spending hatches and all that.

You're really religious saying, Oh, I care about this six months away. More than I care about this right now, which is exactly the opposite of what, what, um, anyone trying to sell you, something is going to say. And so you naturally just lined those priorities up nicely and things work without making more money or without feeling like you're.

Uh, depriving yourself, uh, on, you know, so I wish that it was secret, but when you think about it for a few minutes, you're kind of like, Oh, it feels a little obvious, but 

Jeremy: [00:22:48] it is funny. I'm in a lot of the groups, you know, the Facebook groups, cause I was, there is a learning curve. I mean, if you're, if you're used to, I'm going to make this much I'm, these are my bills.

Like there is a kind of a hurdle to get over. Um, and it's so funny whenever new people join. And, and hearing them, like, I don't understand that, like, just that, that learning curve is so steep at the beginning. And it's funny once you get over it to look back and go, Oh God, I remember that feeling that was so scary.

But you know, to your point, I've as a relatively new customer, the last five or six months. I'm now reaping the benefits of what you're talking about. There have been expenses where I'm, where I would have forgotten about them. But six months ago, when I set this up, I went, Oh, that's going to come in November.

I better put that. Put five bucks aside or whatever to make sure that that gets paid. And those, those are starting to come through now. I'm like, Oh, look at that. I'm not panicking going, Oh, where's that money going to come from? I knew about, so it's just the system you guys have built is just genius. And, and, and I can't say enough good things about it.

And again, You know, I don't, I don't know how much I'm saving because of it. I think I clearly am, but the mental stress is worth every penny. It's fantastic. 

Jesse Mecham: [00:23:54] It's tough. It's tough to quantify that. What, that, that weekly stress that you have to deal with. Yeah. I mean, people do this song and dance whenever they get a paycheck and they're timing their bills to their paychecks.

And it's a valueless activity. I mean, truly if it's at least at best, it's neutral. But at worst, it actually is causing a lot of stress. That's just totally unnecessary. And, and it's not that we, I mean, here we are in 2020 recording this, like it's not that there aren't stresses in life and crazy things that could happen, but let's reduce the stress.

That's unnecessary. And then just deal with all the stress that comes because we're alive and, you know, we gotta do this thing. So, um, the money, a lot of the money stress that people carry is unnecessary. And we're just trying to get that down to as low as we possibly can. 

Zach: [00:24:38] Yeah. I, I, I can speak from experience now, you know, in, in the past it was 

always 

the conversation that I had to have with my wife was went along the lines of, well, we over, you know, we overspent here or.

You know, me accusing her, you overspent here and it was a fight. And now it's, as we're going through, you need a budget, you know, where before we've even spent the money, you know, I, I, you know, the conversation is easier because I say, well, we're out of money. Like we don't have any more to allocate. So you can't do that.

And it's not a fight. It's a sad little moment, 

but it's not a fight. 

I really do feel like this, this shift in thinking of, you know, only spending the money that you already have is, is really important for, you know, Even just mental health and stability. 

Jesse Mecham: [00:25:30] Yeah. And the nice thing about that is you're, you're kind of, you're no longer, you know, Zach, like the budget czar that like, you always have had to say no, and that's not a fun spot to be in.

It's also not fun for your wife to always feel like. There's these gotchas like, Oh, I want this. No, sorry. You can't because of the czar. And so neither party is having a good time in that situation. And so you can end up just kind of say, Hey, the budget says this, and as long as your wife is on board, as long as you're chatting about the plan upfront, And you're kinda like, we want to spend here.

We want to spend there, then it may be that you decide to follow rule three and roll with the punches. And you're saying, Hey, we're out of money, but let's look around. Like, let's see, like, if our priorities shifted a little bit in the last five days or 10 days, and you can move money around or sometimes you just kind of say, well, we'll have to wait a week or, or a month or two, but you're having that conversation.

That's a lot more around the, the budget is the enemy. If there is an enemy in this situation, it's now the budget and not you or her. And it's a nice place to be. My wife and your wife were probably equally or similarly wired. I do the heavy lifting of the management, but, uh, it's important that you are of the same mind when it comes to goals and you, you know, you can't skip that otherwise, uh, cards totally before the horse situations.

Uh, 

Jeremy: [00:26:46] a couple of thoughts generally on budgeting, especially it's Christmas time everyone's going to spend, I think the predicted average is about a thousand bucks per household on, on Christmas costs. Uh, this is something that until this year caught me off guard every year and we always spent more than I thought we were going to.

What, uh, do you have any kind of basic advice for people that, you know, Hey, is it too late? It's already December. Is it too late to really come up with a good plan? Uh, and, and how can people sort of manage this, uh, This time that this cost, especially with so many people unemployed, so many people just trying to make ends meet right now.

Um, what would you say to folks that are trying to come up with the a Christmas budget plan? 

Jesse Mecham: [00:27:26] Yeah. One is January, 2021 and be a great time to start for the next one. So, you know, okay. I'm going to do it differently next time. That's fine. Um, and then you've got 12 months to build up for it and if it is $1,200 a month for easy math on my part, it's like a hundred dollar Christmas bill every month in 2021.

Um, you, you should probably question just. It's okay to question how many people you give gifts to and, and just let them know, like, Hey, I'm not doing the gift giving thing this year. I do want you to know, like, I, I just totally appreciate you. I appreciate your friendship. I, but I'm just, I'm skipping gifts.

Um, you could say, Oh, COVID. You know, and they'd be like, Oh yeah, serious. I mean, if there's ever any silver lining to this crazy, crazy pandemic, maybe it's just that everyone's like, COVID sorry. And Christmas spending can kind of re regulate a little, I don't know. I mean, not to make it sound trite, but, um, you can be realistic with people.

And if there was any ever a time where people would understand, I think it would be now also, I think we overestimate how much people care about getting a gift. A lot of the time, like we have attached, Oh, I don't want to, I don't want to disappoint. And it turns out they may not care at all. Matter of fact, you may just come to an agreement.

Like my uncle Taylor and my dad, when they would dry each other for Christmas, they would just meet up and be like, Hey yeah. So no gifts, right? Yeah, no gift. I mean, they were actually relieved to not have to do the extra work of buying themselves something they didn't really care about. So there may be situations like that, but there are ways to get creative.

And, um, make sure that you're not spending in a way that's just going to, you're just kicking that stress can down the road a little bit. We don't want that. So like try and make it Mary, and then January 21, you know, do it differently, make yourself flush when it comes to December and go crazy. That'd be awesome.

Jeremy: [00:29:11] Yeah. And then I think sort of on the day-to-day a lot of the advice that I've, that I've fallen into over the years is always, um, you hear a lot of people say like, It seems like a lot of the budgeting advice that people who are poor that don't have a lot, a lot of what they hear is, well, you're just spending badly, but I know that for me over the years, you're, you're cutting and you're cutting.

You're like at some point it's, it becomes the groceries and you can, you can only do so much there until you're like, this has been an argument that I've had with my wife for years is that she would, she does a lot of the grocery shopping and I do the money management and I see the grocery bills and I'm like, Dude.

And she's like, yeah, but dude, do you want to eat? 

Jesse Mecham: [00:29:50] Yeah. 

Jeremy: [00:29:50] So for people that are just strapped and they've cut everything, they can cut. You know, for me, I kind of found the answer was I did have to go out and make more money, but it, is it that simple? Is there, is there something, some magic wisdom that, that people that are just really hosed, uh, need to hear.

Jesse Mecham: [00:30:09] Uh, there is not magic wisdom. One thing is the people that have the least are the best at stretching a dollar. So anyone that is like, Oh, you just need to manage your money better. There they're totally misinformed. The people that, I mean, they live on so little and they're so creative and so ingenious and how they stretch that dollar that they would, they could put on a masterclass for anyone that's, you know, middle-class or above.

Um, the, so that has to be kind of just. Sat down like you, you, I would never question someone that's living on very meager means I've been there and I was more creative back then than I am now. And I did put a lot more effort into stretching that dollar out of necessity. Um, the other side of it is, for some reason, we are hesitant to.

I think that it should just be that we earn more money. So if you really are managing your money well, and if you're following our four rules, don't buy the software, follow four rules, though. If you're following those rules and you're like, okay, I'm managing my money. Well, and it's still, I'm just not going to get ahead.

You do need to make more money. And for some reason, Uh, we're hesitant to say that as a thing. I'm not, I'm not sure why. I think it might come off as just flippant, but at the end of the day, you've got to be able to make more money. And I am forever grateful for that time where I was crunching numbers and this baby's coming and I'm, and I had that realization, Jesse, if you want to not borrow money for school, if you want to eat by.

And just squeak into that full-time accounting position. You're going to have to make more money and being stuck up between that rock and hard place of like, I want my wife to stay home. I don't want her to have to work. I don't want to borrow money. Those two non-negotiables for me, that created a situation where my brain couldn't help, but come up with some solution.

To help me actually solve it. And thankfully, I didn't just take what I would say the easy road was and just say, well, I'll borrow seven grand. That's a very reasonable amount to borrow for a master's in accountancy. Yeah. And people go, Oh man, you only abroad seven. You're a genius. I didn't go that route.

Instead. I let that scarcity, um, fuel that creativity. And I think a lot of people, um, do themselves a disservice. And I say this carefully, because. There's a lot of stress and there's a lot of emotion and a lot of heartache here, but a lot of people do themselves, a disservice by going too quickly to borrowing, to get themselves out of 

Jeremy: [00:32:41] a tight situation, what I've done for 20 years.

I mean, and I keep making the same mistakes and, and you're right, that there's something there's a mental block in the idea of making more money. And to me, I've sort of realized that it was admitting that I was failing. Right. Like I like, or maybe not admitting I was, but, but sort of accepting that what I was doing wasn't enough.

Jesse Mecham: [00:33:04] Yeah. Coming up short. 

Jeremy: [00:33:05] Yeah. And I, I just that label, I was like, I'm not willing to accept that I'm a failure, but somehow I was willing to accept, not changing and things getting worse. And once I made that switch where it's like, this is just the reality, there's no judgment. This is just the thing that has to change everything.

Everything got on track and into a better place. 

Zach: [00:33:25] You mentioned earlier blaming cost cutting on COVID right. As a, you know, as an excuse and you know, in my family growing up, you know, talking about money was just not something that anyone did. No one showed me how to manage money. People don't, you know, I think it's getting better now, but like, people just don't talk about it.

Um, As much as I think that we should be talking about it. And you know, on the other side, you know, there's the cost cutting measures of, you know, a lot of the arguments that my wife and I have had over the years of what was, you know, we can't afford that, but we have to do it because everyone else is doing it.

Like, you know, keeping up with the Joneses in some cases. Right. Uh, I'm just curious, you know, have you seen, you know, your whole job is talking about money, but have you seen, you know, Society as a whole, you know, starting to accept that it's okay to talk about money. It's okay. To be vulnerable about it.

It's okay to ask for help. Have you seen a shift or do you think it's still really heavily? One-sided where people aren't 

Jesse Mecham: [00:34:26] talking about it? I think it is, but there is a shift. Um, a reason wall street journal article was talking about this was highlighting women that were kind of texting each other in these group texts, uh, money, things that would have been.

I, you know, last year, even kind of like, well, that's a little different, but COVID had kind of made people a little more vulnerable, a little more open. And so that's an interesting sign. Um, if there is the blogosphere back 15 years ago and kind of blogs started becoming a thing and people started kind of bearing on their finances in this anonymous way.

I think that helped to break down a little bit of the, of the taboo. And we're seeing that now in social. That if there is a silver lining to social, and it's tough to find one in my opinion, but if there is one, it might be that people can more easily share taboo things in a semi-anonymous way. Um, or with a group of like-minded people, if it's very easy for me to talk about some, you know, money issue I have, if I know that person is, um, maybe, you know, they also run a company about the same size that I run.

And so they've had that they have that same lens and I've enjoyed being in a group where. There are a lot of CEOs that are running various sized companies and you can kind of be a little more open because you recognize, Oh, we're all kind of in the same spot. I think social media is allowing people to find each other and then share in that way.

And I mean, windup has these little groups that kind of pop up all over the place. You know, if you've got a expectant parents that love wine app or people that love Disney and love wine, having these weird kind of intersections, but at the end of the day, um, they're finding each other and then they're able to share.

So maybe it's not so much that you're. It's easier to chat about it with your brother or sister, but you're finding outlets and I'm hopeful that at the end of the day, um, that it becomes that we become more open in a constructive way around it. Um, we're all, we're all on the other side of socialism, people are very open about how great everything is.

Yeah. And that can, that, that Jones, anything can be. You know, it can be a problem there too. So now you don't just have to see what your neighbors across the street did. They just installed some new thing or they just did solar panels or name your thing. Now you're like, Oh everyone around you, there, you have 10 X, the number of Jones families you're looking at.

And that can be a tricky. So you got to kind of go in eyes wide, open. Monthly looking at what your money is doing for you, what you want it to do. And if you're sharing finances with that significant other, making sure you're on the same page, that's the best antidotes to keeping up with the Joneses.

Cause that as a strong force to recognize, 

Zach: [00:37:02] yes, it is. 

Jeremy: [00:37:04] As, uh, as we wrap up here, is there any kind of like takeaways that you would, uh, offer sort of some, some final thoughts for somebody who's considering, uh, how to get their finances under control? If it's something they're struggling with. 

Jesse Mecham: [00:37:17] Yeah. I mean to take it one day at a time it's, it's, you know, like any endeavor where you're trying to improve yourself, you know, your mental health, your emotional state, your, your, uh, health, uh, you know, physical health.

Yeah. It all, anything that's good takes effort to do. And so recognize that there'll be some effort. And then if there's one specific tactic, if they're, if they're interested in YNAB specifically, you've got to do one of our classes where it's, they're like 20 minutes long and it will really connect these principles and kind of like, um, the abstract, it will bring it down to here's how you do it in the software.

And I've, I think people get a lot of mileage out of doing those classes and they're live and the teachers are extremely helpful. Um, write into us and ask questions. Uh, like you said, our support team is second to none and, and just, we hire people that we, I don't know how we do it, but we find people that just can't help, but be super helpful.

And, and so, yeah, right in and have us help you out. I mean, we. We're good at it. We've been doing it for a good long while and, uh, we can get, we can get the ship turned around. You know, if we've got a willing participant, 

Jeremy: [00:38:28] I know you guys do amazing work and I can vouch for the, the, um, the customer service.

It's just, you guys are, are incredible. Uh, I was going to ask you one last, fill in the blank question if I can. And it's just a, you know, the obvious old saying money, can't buy happiness, but what can money buy? 

Jesse Mecham: [00:38:45] Oh, boy, you know, they say, if you have money and you have a problem that you don't have a problem, you know?

So I, I don't know if that's totally true, but, um, I ask our team. I've been doing these kinds of interviews with our team that we'll eventually put out on the podcast. And I would say like, what's your budget done for you lately? Kind of a thing. Like tell me a win, you know, and some of it's like, I've paid off a student loan, we paid off this or that for me.

A year and a half ago, I bought a table, saw that I'd been saving up for, for a while. It's a soft stop. It, you know, if, if my finger ever heaven forbid gets too close to that blade and it gets that it senses that it's this crazy tech and the saw blade drops and saves your finger. And, um, it's, it's 36 inches wide on one side, I've got a router table built in on the other.

I mean, I. It, it took me two weeks just to put the, put the thing together. It's a cast iron it's heavy. And I just, anyway, so yeah, money like money bought me that, you know, and, uh, And I can't get enough of 

it. 

Jeremy: [00:39:47] That's awesome, man. Well, thank you so much for this conversation. Uh, and for your idea, it's a, it's made a huge improvement in my life and, uh, it's just, uh, I probably get to meet you and talk to you like this.

Jesse Mecham: [00:39:57] Absolutely. Well, thanks for sharing such kind words. I appreciate it. You bet. 

Jeremy: [00:40:00] All right, man. Well, best to you and your family and happy holidays. 

Jesse Mecham: [00:40:03] Thank you, you too. 

Jeremy: [00:40:04] I think. Thank you, Jesse.

Again, that was Jesse Mecham. He is the founder and CEO of YNAB or do you need a budget? He also wrote the book. You need a budget, the proven system for breaking the paycheck to paycheck cycle, getting out of debt and living the life you want really timely stuff to be talking about is everyone is spending probably way too much on the holidays.

I just went out and spent way too much money on stuff to decorate our house bought the most expensive Christmas tree I've ever bought. Um, bought some crazy lights to put on the house and it's this sort of, you know, and I'm hearing this more and more from more and more people that this year has been so crappy that it's just been such a challenge for everybody, you know, not only financially, but just emotionally with COVID and everything.

People are kind of going all out for this Christmas just to like throw some sort of a farewell to the end of this year and to have something to feel good about because it's going to be a hard Christmas for a lot of people that can't be with their families. Can't travel the way they normally do. It's just, it's another thing that is so different and so changed by this year.

So, um, so, you know, I'm, I'm moving some, some dollars around to, to make these crazy purchases, uh, make sense, but, um, you know, he had some really good advice there about, you know, maybe taking this lesson into next year and start planning in January for what you're going to spend in, in December. That's a tool that has already been working for me when I started this program.

I don't know, six months ago, something like that. I put in a Christmas budget and over these last few months, my wife has stumbled across a few things that are like, Oh, you know, kind of get this for so-and-so for Christmas. Like yeah. Yes, we have money for it. It's it's really great to, to know that in that it's already paid for it.

The money's there. Go for it instead of like, yeah. December 20th. Oh, we've got to buy another thing. Oh, we don't have any money for that. So, uh it's you know, again, this is for me has been the game changing system. There is a learning curve. If you've been doing it the way that most people have been doing it, the way I was doing it for years, uh, there is a learning curve, but like you said, they have some of the best, um, Like Facebook group programs, teachers they're really responsive online.

Uh, so we just, we can't recommend them enough. And if you do want to try it out, you can go to our website and click on the little shop link on the top of our website, the fitmess.com. There's a link in there to, uh, to wine app and you can click on there and you can get, I think it's like 34 days for free.

Yeah. 

Zach: [00:42:31] 34 day trial so that you can actually see one month to the next 

Jeremy: [00:42:36] yeah, totally worth it. And, uh, I hope you'll check it out cause it's, uh, it's, it's made a huge difference, um, again, in my life financially and also just emotionally not having the same stress that I had with money before. Yeah, 

Zach: [00:42:48] I'll, I'll say it again.

Like I've, I've never had a ton of stress around money. I've been really good about managing it, but getting my wife on board with, you know, knowing where the money is and where it's going and how we're spending. It has always been really problematic because I have really complicated spreadsheets and my own internal thinking and, and it was just, you know, it, it always ended up being a big fight when I tried to get her to learn my way, um, But since moving over to YNAB it's not my way anymore.

So sh a she's less resistant, right. Um, because it's somebody else's way and, and they just make it, you know, again, it's a steep learning curve to change your thought process, but they do make it really easy with a lot of really good, um, you know, tools and, and, and teaching methods. Um, but since then, you know, my wife is actually involved in like right after dinner the other night, she's like, Do you want to go do the budget?

I've been waiting 20 years.

Jeremy: [00:43:50] That's awesome. 

Zach: [00:43:51] You know, and it's, and it happens every night. It's five minutes. It's, it's really quick and easy. And like I said, there's no big arguments. Yeah. And we're aware and we're being really mindful about what we're spending money on. And then during the day, it's like, you know, if we didn't budget for it, we don't spend it.

Jeremy: [00:44:07] Yeah. That's so smart. That's I still have a little bit of, of that. Um, that's not even an obstacle. I have a lot of insecurities, particularly when it comes to how poorly I've managed our money for so long. So involving someone else and pulling back the curtain and going, well, this is what I'm thinking.

It's probably terrible. Right? Like I'm really scared to sort of share that with her. And so I'd rather just be like, Oh yeah, no, yeah, you can, you can buy that. That's fine. I'll figure it out. And I go over, I'm like, fuck, how am I going to figure that out? So I really need to get better at it, including her, because for me, it is in the morning.

It's like five minutes. Oh, okay. Oh, she spent that. Oh, okay. Well I'll move this over there to cover that. Oh, all right. We're good. But I love the idea of looking at it together. And so that it removes me from the permission role. I think Jesse referred to it as the, the, the budget czar or whatever, like, uh, you know, removing that responsibility that, that bad guy label from yourself and putting it on the computer has just got to be a tremendous stress reliever for relationships.

Zach: [00:45:13] Yeah. Can't say enough. Good things about it. I mean, And at whatever level you're at, like this tool can help. I, I wasn't sure if I was going to see a whole lot of difference just because I had put so much time and effort into, um, managing our money, but it actually has been helping in it's really, the long-term planning that's really helped out a lot for us.

So yeah. You know, some of the like Christmas budgeting was in place a long time ago. I usually would budget something on December 1st. Right. Right. So it's helping us with the longterm stuff, but this is, you know, again, this is my opinion. People may not share it, but you know, money management, isn't just a day to day, week to week, month, month to month thing, especially if you're married, right.

This is a lifelong process that, you know, at the end, you need to have something. 

Jeremy: [00:46:10] Ready, right? 

Zach: [00:46:12] Yeah. You need to be making decisions today that you're, you know, 67 and a half year old self. Yep. We'll be okay with yup. It's so, you know, getting there, yeah. Getting a handle on the day to day will allow you to get a handle on, you know, the 20, 30 year long 

process.

Jeremy: [00:46:28] Well, and what a great analogy for life. I mean, everything that you do in wellness should have a long-term goal. You should be able to think about how am I going to feel when I'm 70. And what can I do today at 40 or 30 or 25, whatever you're doing to your body and think about, I need to be worried about how I'm going to be doing then, because what I'm doing today makes that difference.

Zach: [00:46:49] Man, my 67 year old self is going to be okay, angry, 

Jeremy: [00:46:54] lots of regrets. Uh, one thing you should know, regret is signing up for our newsletter. Speaking of finances, we want to help out a little bit. So we're offering a $25 gift card to Amazon. Uh, we're going to go random drawing. I believe I said on December 21st.

So you have until the 20th to sign up for our newsletter, you can do that on our website or through any of our social media channels. We've posted the link there. We'll post it again a few more times between now and then, uh, but please do sign up for the newsletter. It's a great way to keep up with what's going on with the show and make sure you don't miss episodes, uh, share on social media, however you like.

And, uh, like I said, when the $25 gift card from amazon.com. So, uh, thank you for, for doing that if you have already, or if you're about to. And as long as we're thinking people, we should thank the athletic brewing company for being a sponsor still. Uh, you've been drinking. I know that can, is that the run wild?

It's the run wild IPA. And I actually had one of these last night while we were sitting down talking about the budget. There you go. I enjoyed the beer, but I didn't actually need it for the conversation was great. 

Right? Again, non-alcoholic beers. You can get them. You can also get them through our website.

Again, go do the fitmess.com. Click on shop. There is a link there in our shop where you can order directly from the athletic brewing company website. You can also just go to your local beverage store and get them there. And what the heck, while you're on our website, go ahead and follow us on social media and subscribe to the podcast.

Wherever you get your podcasts, whether that's Apple or Spotify or however, you're listening to us. Now, 

Zach: [00:48:20] make sure you tune in next week for a show all about anxiety, because I know I've got tons of anxiety built up over all the money I just spent. 

Jeremy: [00:48:30] Yeah, that, that is one thing about looking at the budget every day.

Is it, it can be a little anxiety inducing if, uh, Everything's not quite going the way you thought it would. For example, like when I got a letter from the IRS the other day that I am not happy about and did not budget for, so I won't bother you with the details of that, but let's just, it's not good. It's really not good.

All right. So with that, we'll get out of here. Uh, so looking forward to talking about, uh, more tips on how to manage your anxiety, we'll get into that next week. So make sure you do subscribe and don't miss that episode. You can do that at our website, the fitness.com. Thanks so much for listening. We'll see you next week

Zach: [00:49:09] see everyone. 

We know 

Jeremy: [00:49:10] this podcast is amazing 

and does not seem to lack anything, but we do need a legal disclaimer, Jeremy and Zach are not doctors. They do not play them on the 

internet. And even if they did 

play them on the internet, they would be really bad at it. Please consult your physician prior to implementing any changes that you heard on this 

podcast, 

pollution or assumes that Jeremy and 

Zach do not know what they are talking about and 

that you will do your own research on the topics talked about on this podcast.

 

Jesse Mecham

Founder and CEO of YNAB

Jesse Mecham is a recovering CPA that started You Need A Budget (aka YNAB) while in college. YNAB teaches people their unique Four-Rule Method that completely transforms how they view and manage their money.