Why Money is Important: Podcast
Please be aware.
When you think about it, you will only have more
responsibilitymoving forward. So it’s not like you can say, well, in my 20s, I can spend all my money because in my 30 years, I’ll be making a lot more and so I’ll be able to save more then. What happens if you end up getting married? Well, that’s a lot of responsibilities. Some of your spendingis outside your control,because now there’s two of you decidingon where that money is going to go.
Please be aware.
This is techie personal finance boot camp, where I help tech professionals in their 20s and 30s. Balance a great life today without sacrificing their future possibilities. I’m your host Lucas Casarez, certified financial planner and founder of Level Up Financial Planning, where I help educate coach and build strategies with my clients to help them take their financial confidence to the next level.
Why Money Matters 01:01
In this episode of Techie Personal Finance Boot Camp, I’m going to cover Why does money actually matter it and if
Life Changing Expenses 01:32
You think that buying coffee from Starbucks isn’t life changing, but it is in it not just in how you interact with the people in your day, maybe you’re a nicer person, because your Starbucks. And so that’s how it’s changing your life. But it’s also could potentially be changing it financially. As far as what your future possibilities and opportunities are, and don’t want to pick up pick on Starbucks, or coffee or Luna, it’s any decision you make, it’s really any choice you make is really changing that future opportunity and possibilities.
Money Mindset 02:04
And that’s why I think it’s very important to just reflect on what is actually valuable to you. And there’s, this is still early in my podcast. And I think a lot of the things are still going to be very broad overview just kind of ways of thinking about your money thinking about what’s important to you, then we’ll start dive in a lot more into the nitty gritty like, this is how a 401k works. This is how to approach your your debt and things like that. So I think initially early, I know be a little bit more conceptually and ways of thinking about stuff, and then we’ll start narrowing in.
Money in Your Life 02:32
Let’s think about all the different ways that money plays a role in your life. So you work for money. So you probably do that about 40 hours a week, that’s important and takes up a lot of your life. And I imagine, you may be enjoying what you do. But at the same time, you wouldn’t be doing it for free. In most situations. If you decide to go home and watch TV or Netflix, most the time those things aren’t free, what you’re the device, you’re watching it on, whether it’s on your phone now or your TV, those things are not free. So all these things are financial decisions that you have to make.
Range of Choice 03:15
And there’s a wide range, right, there’s, there’s almost always such a wide range and the different choices you can make, you can do a Netflix subscription, where I don’t know they keep raising my prices there, it’s probably like in the 15 $16 range right now. But when I first started getting it was like $6. And comparing that to a cable bill where it’s like 100, hundred $50, those, those are two very different ends of the spectrum. And then there’s still that choice of doing nothing right, you might be so busy that you don’t do any of those, and you’re just saving $100 a month that every other
And you had to choose individually, where you’re placing that value, what’s going to be the most important for you, and then part point in your life. And I think it’s important
And if you’re just doing it by doing something else, where you live, how you furnish your house, what you decide to eat, think eating is really the biggest weakness, almost all my clients where we had to do a deep dive into stuff and we start to see really where they can start to change their life dramatically. As far as their financial decisions and their financial confidence and control over their financial situation. eating out tends to be a big one, as well as vacations is an important one. But then just again, understanding there’s two different ends of the spectrum, you could go camping for a lot cheaper than you can travel to Italy and stay there for a week or two. So very wide ranging, and differences. And it really just depends on what your financial situation is.
Don’t Forget Saving 05:37
Life Gets Busy 06:18
And a lot of times people do get just kind of caught up in busy with life where they don’t keep track of stuff. And then yeah, they are overspending. And so let’s figure out what’s not adding value and start to slowly weed those things out.
The Whole Picture 06:18
I really enjoyed kind of looking at the whole situation, the whole financial situation before I even start digging
Background on Money 07:29
So let’s give you a little bit of background on
So they were bartering, which sometimes you could still do now, if you go to like a thrift store, or whatever those types of things are reading kind of go to a market and just kind of haggle with people. That’s, that’s all they had to do before. And they didn’t have money to haggle with either. So what they were doing is they’re exchanging goats, they’re exchanging fruits, vegetables, tools, different things like that.
Imagine Bartering 08:19
And so imagine if you went to work today and thought about
Value Inefficiencies 08:46
And those things are all very subject to to, to value, like, what if, what if you don’t like the way, goat me tasted or goat milk tasted like a goats and that is valuable to you, or the person you’re trying to sell it to, if they don’t like those particular everything. So like, you could be trying to trade with someone that they have something of value, but what you’re trying to give them they don’t value at all. So that’s very tricky. And so there’s no standard value. And it just makes sense, complex, and really hard to navigate, kind of those situations. And things used to be a lot simpler back then to admit.
Standards and Value 09:19
So what money does is it does create a standard acceptance and devalue where if you have $100 bill, someone can look and say, Yep, that’s $100 bill, or now, with debit cards and credit cards, the computers kind of exchange that information up, there’s $100, that we’re going to transfer, it’s all that gets validated. So it’s a standard amount, everyone recognizes as being the real deal, there’s no like, I don’t really value $100 to be $100. That’s not really a concern anymore.
Store of Value 09:47
Another great feature of money, one that I’m very fond of is that it can be stored now. So if you have money instead of destroying goats, which you’d either be eliminated and kind of the ability to kind of wrangle those in a individual area, but then you also have to upkeep dominate, just get to be pretty crazy to store them and make sure that they stayed good long term. With money, it’s a lot easier to do especially in by putting into banks and investments and things like that. And so it does allow you to make larger purchases by saving up and larger investments and things like that. So you can really start now to not have to worry about money start to build it up. So where it can be used for an emergency or long term investments. And I see that as just really a foundation on being able to build wealth before. The only way you could build wealth in the past was truly by acquiring land, other than like charging people to be on your land. Now you can save up your money, you get paid for your skills and services. And now you can start to save that up and build wealth and invest in other things that will work on your behalf.
So it’s really
First Money Memory 11:06
My first money memory actually isn’t about money at all, actually dates back to when I was in fifth grade, we had a cool teacher and she would actually give us different points based on the grades would get in class. And I’ve always been a pretty high performer, especially in fifth grade before I got distracted by other things. So I was kind of thinking you know, a lot of points, a lot of rewards as far as how they were building up and tracking. And then what you do should raffle off different goodies and prizes, whether it be candy, pencils, toys, like things like that beanie babies were big when I was in fifth grade.
Spend Points 11:41
So all those things. And so what happened is, every time that that opportunity came to do those, and you can use them for cool stuff to like get in at a test or get out of assignments, doing fun stuff. And so those are where I valued
What Is Your First Money Memory? 12:46
It’s it’s one of the questions I actually asked my clients pretty often have, like, what’s their first memory of how things work money wise, and, and a lot of times they think about either their first job, or maybe you’re thinking right now, your
Money Algorithm 13:25
And if we want to tie this into some type of
Good Money Algorithms 14:07
Now, good behaviors are mostly good behaviors are going to be the algorithms you’re going to want to create. So obviously, you don’t want to just save all your money, because that you could be missing out on life opportunities there. But I really enjoy helping my clients understand is really that fine line of straddling both living the best life now and then also keeping your door open for opportunities and building your wealth up over time to to give you different opportunities and possibilities that you may have not even thought of yet, it’s important to start creating those good behaviors, because then it gives you those options available,
Bad Money Algorithms14:44
a destructive behavior or behavior that can cause dramatic mistakes. That would be if I had to tie it to something, I’d consider it similar to use them like a new
Common Good Money Algorithms 15:42
good algorithms that you can start to create for your financial life. And these really could just be considered, like sneak peeks into future potential topics and episodes
Save First 15:51
, but saving first. And so if you’re thinking about how that code in order to be telling your money to hang tight, be ready for further orders. It could be for their orders to protect against an emergency or it could be for further orders to remain investment opportunities. So maybe there’s
Participate in 401(k) 16:15
participate in your 401k. So that’s definitely more of a long term type relationship. So maybe you’re telling your money that you really want it to work for you and you don’t, you’re not going to be reliant on it in the short term. So this, when you’re talking about 401k retirement accounts really thinking long term, especially when you’re going to be investing your money in any capacity. If there’s any degree of risk, you really want it to be a long term investment, so that you’re able to have the best opportunity to write out that risk and, and reap the rewards of that opportunity.
Avoid High-Interest Debt 16:50
Look for Sales 17:43
I could start looking for sales. So there’s a huge correlation in your frugality. And actually, with my clients, we take an assessment to navigate what their wealth potential is, as well as their financial confidence. And one of those big factors is their frugality. And it’s not necessarily just meaning that they’re cheap, it just means that they’re not in a rush to spend money, it means that they’re more open to the opportunity that Yep, this, this looks cool. I want this thing. But let me see if I do a quick search if there’s a sale for or maybe that’s not a hot pressing item.
Plan Ahead to Avoid Regrets 17:43
So I’ve learned a high interest is going to be huge in just allowing me to keep more of your money and allowing you to use more of your money for things that you actually enjoy, rather than financing it or paying for something that you made a decision of long ago. And a lot of times that comes back to student loans. And credit cards are really the big components, their credit cards, by far the biggest, but even student loans, sometimes people maybe if you’re listening to this, and you have student loans that are not even for your tech career that you’re in now. And you’re just kind of kicking
Be Frugal 19:08
So right now it is
Slow Down Purchase Decisions 19:40
And sometimes it’s fun. Some people, once they get to that point, they actually enjoy that slow
Be Self-Aware 20:54
Another one to be thinking of is just your awareness and of your tendencies and the influence of others on your behavior. So I don’t know if this relates to us specifically, but I know just looking at my wife, her sister, her family, a lot of times when they make certain purchases or decisions, all of a sudden it becomes top a topic of mine of Oh, maybe we should think about getting something like this. Sometimes they get the same things. Sometimes it’s
Better Purchase Decisions 22:39
And one way of doing that, and I kind of mentioned it with my process of purchasing those few smart lights was just slowing down the process. So it’s exciting, obviously to see something and then buy something and then have it shipped, show up
Questions to Think About 23:16
Why do you handle money,
Understand Your Money Mindset (23:55)
What about those vacations, though, because, again, there’s that wide range. So is it the things that make it super expensive that you enjoy? Or is it the fact that you’re with your family, the thing that you enjoy the most, and so we can weed out some of those things, you still get the same benefit or 95% of the benefit for 50% of the cost.
So having these internal conversations with yourself and and ultimately, if you do have a significant other, you do want to have that money conversation with them. But understanding your own personal thoughts about money and how money impacts you. And how you think about money is all going to be super important into just kind of navigating your financial life and then having those very productive conversations with your spouse, once you kind of take it to that next level.
looking into the future is also a huge way to kind of build in that algorithm. So not just be thinking about today, next week or next month, that’s not far enough in the future, it also thinking about what you want your future to look like. And what’s important to you, is really going to help you implement some of these behavior changes.
Focus on What Matters (26:06)
So if we get down to it, or you get down to and you decide that you know what I really am not making the best moves financially, I’m not doing the things I should be doing. Like I really, I really wish I could be better, I really wish I could do more understand stuff so that I make the right decisions. It’s not enough to wish and hope it’s enough to get motivated. And actually, that the way you’re going to do that is by tying into things that matter to you. So think about your family, think about what you want your future to look like, and not just in broad strokes. Think about it in as much detail as possible. What are you doing five years from now on that would really make you happy, where were you at family wise,
Not only is money needed in the short term, but the possibilities and opportunities in the future that will also require money, or way more than what they are short term. So there’s a thing called inflation. And if, if you’re not aware of inflation, inflation increases at about 3% a year annually. And so that’s kind of the average, it varies from year to year. But what happens is, if that does hold true, the cost of everything or not everything, but almost everything could double, in just 24 years. So think about that. If you went in the grocery store and bought groceries today, and it came to 100 $50, well, 24 years from now, when you go to the grocery store to be $300 to get the very same items that you purchased today. So that’s one reason why you do want to not have that short term view of your money.
Finding Balance Between Today and Your Future (28:13)
And I know a really common question. And this is actually, like I said, one of the reasons why I started my podcast is to balance your life decisions today. So have an awesome life today, but not sacrifice
And there’s there’s only a few times and there’s something wrong with is if you’re not doing some of the other
And then also thinking out for some of my listeners way into the future, maybe 40 years from now. But for some of you maybe less, maybe 10 years, or maybe you want to reach early retirement, it’s possible, you have to do a lot of crazy things in order to make early retirement possible. But what happens is, once you retire, whenever that occurs for you, it’s
And so you need money to wise, when your incomes not coming in and Social Security is out there, I don’t know how relevant it’s going to be for a lot of my listeners, but you’ll probably still get something. But if you’re used to working in the tech industry, and you’re used to being paid X amount of dollars, Social Security
And so you want to make sure that your lifestyle isn’t is not going to be capped at some point in the future because of you just going a little bit too crazy. And I believe there is a way to walk that fine line and really enjoy your life now and, and just actually enjoy it more to
Time Relativity (30:15)
Because you’ll still be able to do probably everything that you want to do. It’s just a matter of saying you know what, I’m going to be the discipline to wait and save, and do the responsible thing for my family, do the responsible thing for for yourself and your career so that you’re not stressed out and not enjoying life, because you’re constantly stressed about the financial situation at home. So all these things are important.
So making poor financial decisions, and really limiting your possibilities and opportunities. That feature greatly increases your stress later on in life. So you’re probably increasing your stress
And sometimes that’s why people spend all their money is because they have a very weird thought process on
Starting Early vs. Starting Late 31:24
to the people that are wealthy, a lot of the people that are wealthy, are kind of first generational wealthy. And it’s because they understood early on to do the right things, they could really empower themselves and put themselves in the position where money really helps leverage their life and live in a way that other people are not able to without the stress. And it’s just by prioritizing Stuff and Being more strategic about how they handle their money.
So having less wiggle room is really going to force you to make mistakes in the future. And if you think about it, you’re only going to have more responsibility moving forward. So it’s not like you can say, well, in my 20s, I can spend all my money because in my 30 years, I’ll be making a lot more and so I’ll be able to save more than I’ll worry about it, then what happens if you end up getting married? Well, that’s a lot of responsibility, some of your
Your goals will change 33:03
Tip: Rule of 72 (34:59)
Before we close out the show, I do want to give you a fantastic kind of quick calculation that you can do. And it’s called the rule of 72. And it’s pretty amazing, it allows you to quickly calculate the time that you could expect it to take your investment to double. And the reason why it’s so quick and easy is you just take that number 72 and divide it by the expected investment return that you would expect. And I always say, lean on the side of conservative. So don’t
So hopefully all this information was helpful. I know we covered a lot of things about money. Hopefully you found some of it interesting and new information for you. But this is definitely more of an intro to personal finance, introduce you to a lot of personal finance concepts and pretty similar to like a boot camp or any type of education that you get anywhere else. This is really just kind of ground zero, you’re just starting now to build that foundation. And so obviously, this isn’t giving you all the answers, this isn’t instant success, you listen to one episode, and you’re automatically know everything that’s that’s impossible. And one of the things I enjoy about working with the tech community is you do tend to be really invested in growth. And so just kind of come back weekly to this with that growth mentality and planning on to gain a little bit of knowledge every single episode and I will be doing the same, I’ll be constantly trying to improve and implement any changes that you recommend as you reach out to me. Um, but yeah, I appreciate you taking the time. And obviously, there’s still a lot to cover a lot to be discovered and built upon. And so feel free to continue doing the research on your own or just kind of stick with me, we’ll continue on the techie personal finance boot camp to provide you information that’s very relevant to where you’re at in your career. And also we’re going to be having a special guests that will give you insight to different career stories and, and backgrounds and different kind of financial aspects of their life and story as well. So hopefully you found this first episode enjoyable.