Avoiding Blanket One-Size-Fits-All Money Advice with Dana Miranda - 156

[00:00:00] Welcome to Money Talk with Skyler Fleming, where talking about money is encouraged. Let's get talking.

[00:00:06] Hello Money Buddies and welcome to this week's episode of Money Talk with Skyler Fleming.

[00:00:11] Today we're talking about some alternative financial advice and I'm sure you've heard

[00:00:15] the normal one-size-fits-all advice that everyone gives. Well today's episode is going to go against

[00:00:21] some of that and to help you see some different ideas when it comes to managing your money. I'm

[00:00:26] also looking forward to today's Money Talk to help challenge some of my own beliefs when it comes to

[00:00:29] managing money. I think conversations like the one we're going to have today are very helpful to

[00:00:34] anyone whether you're managing money for years and years or just getting started. Pushing back

[00:00:39] against normal advice can help you learn some of the alternatives when it comes to handling your

[00:00:42] money and help you see that other people may have a different and potentially better way of handling

[00:00:47] their money. I'm excited today to challenge some of my own thoughts around money and one piece I struggle

[00:00:52] to think differently about is how we can invest or save for retirement in a way that maybe doesn't

[00:00:56] include a 401k and I've even had a hard time sometimes thinking about ways to invest outside

[00:01:01] of low-cost index funds. So today we're going to hit on some investing topics directly so I hope

[00:01:06] you're as excited for today's interview as I am but before we get into it let me introduce today's

[00:01:10] guest. Today's money buddy is Dana Miranda. Dana is a certified educator in personal finance,

[00:01:16] creator of the Healthy Rich newsletter and author of You Don't Need a Budget, Stop Worrying About Debt,

[00:01:21] Spend Without Shame and Manage Money with Ease. She writes about how capitalism impacts the way we

[00:01:26] think, teach and talk about money. Dana is expert behind the nationally syndicated Dear Penny

[00:01:31] financial advice column and a regular contributor, business insider, fortune seen at money in salon

[00:01:37] and founding member of the Kiplinger Advisor Collective. Dana grew up in a working class family

[00:01:42] in a small town in Wisconsin when she joined the ranks of personal finance media in 2015. She found

[00:01:47] the niche led mostly by advice and admonitions from middle class white men ignoring the broad diversity

[00:01:52] of our relationships with work and money. After leaving a leadership position with a popular financial

[00:01:57] media startup and spending two years as a freelance writer, she created Healthy Rich to help change how

[00:02:02] we talk about money. And I'm really excited for today's conversation with Dana. She's been on the

[00:02:06] podcast before so you're probably recognizing her name. The money talking points for this week are,

[00:02:11] do you view budgeting in a way that's damaging to your relationship with money?

[00:02:15] What does your money map look like? And third, how can you use debt to support your life goals?

[00:02:20] So without further ado, let's get into today's conversation. Welcome to today's interview on

[00:02:35] Money Talk with Skylar Fleming. Joining me today I have Dana Miranda and this is a return guest. We're

[00:02:40] here to talk about her new book that's coming out and I'm excited to talk with you again, Dana.

[00:02:45] Would you go ahead and introduce yourself for everyone? Sure, thanks for having me back. My name is Dana

[00:02:50] Miranda and I am a personal finance journalist. I write the newsletter Healthy Rich on Substack

[00:02:57] and my new book is You Don't Need a Budget. It'll be out at the end of December.

[00:03:01] We talked previously on my podcast about budgeting, budget culture, some of the main things around that.

[00:03:06] So that's a great episode to go back and listen to to get a head start on this one. But could you give

[00:03:11] a quick overview of what budget culture is? Sure. It's the way that I talk about the ways that we think

[00:03:22] and teach and talk about money in our culture, sort of the dominant approach that is rooted in

[00:03:29] restriction, shame and greed. So we have a focus on individual responsibility, just like we do with a

[00:03:36] lot of things in our culture. If somebody's financial circumstances are not what they want them to be,

[00:03:42] or someone struggling financially, we lean on shaming them and prescribing restriction in order to meet

[00:03:51] kind of an arbitrary set of financial goals. It's kind of like that general idea of,

[00:03:56] oh, you shouldn't be spending that. You should feel bad if you overspend, things like that. Is that a

[00:04:01] fair summary, I guess? Absolutely. Yeah. Just anything like you said, should a lot. Anytime

[00:04:06] you're hearing like you should be doing this with your money, a lot of times that's rooted in budget

[00:04:10] culture beliefs. How can that be bad for people? What is the harm in all those shoulds?

[00:04:17] The biggest issue that I see with the ways that we teach money and talk about money in our culture is

[00:04:23] the lack of nuance. So anytime one person is saying another person should do something,

[00:04:29] that advice is coming from, if I'm telling you, you should do something with your money. That advice

[00:04:35] is coming from what I know and from what I have experienced. And it's not taking into account

[00:04:42] your individual circumstances and needs and best interests.

[00:04:46] That makes sense. Because yeah, everyone will say personal finance is personal, but then we go out and

[00:04:51] give this blanket advice that everyone has to follow. How do we be aware of stuff that's commonly

[00:04:58] in budget culture? What are some of the key things we can notice when that's the direction of advice

[00:05:03] we're being given? Yeah. So it's really valuable to kind of read about personal finance and try to learn

[00:05:10] about how our systems work and how different financial products work and things like that,

[00:05:15] because there's just so much that we don't know and we don't have a lot of formal education on the

[00:05:20] subject. So it's good to keep reading like personal finance media and seeking financial education,

[00:05:26] but definitely look out for those places where someone is making that kind of blanket statement

[00:05:32] about what is right or wrong, or what someone should or should not be doing. Good versus bad spending,

[00:05:39] good versus bad debt. A lot of times, anytime someone is trying to lay something out as really black and

[00:05:45] white, that should raise a red flag and maybe just kind of be a cue to you to ask some more questions,

[00:05:52] dig a little bit deeper and see how that might actually fit in with your personal circumstances.

[00:06:00] Awesome. Yeah. Look out for that blanket advice. Like you said, if they're trying to make it black

[00:06:03] and white, that's probably somewhere to maybe steer clear of, which makes sense in my book because like

[00:06:08] I said, personal finance is personal. So we do have to be careful for those. You have to do it this

[00:06:13] way or that way. But one of the things your book and kind of your message is called, you don't need a

[00:06:18] budget. And I do kind of want to just talk through budgeting a little bit here because my wife and I,

[00:06:22] we like the way we manage our budget. It's been good for us. We sit down once a month, split up our

[00:06:27] last month's income for the next month's transactions that a typical way someone might budget is budgeting

[00:06:34] something we should avoid altogether, or can it be helpful for people? In the same way that I think

[00:06:42] other financial gurus and financial experts shouldn't be giving blanket advice, I try not to do that as

[00:06:48] well. I personally don't steer people toward budgeting. And I talk a lot about the research

[00:06:54] that we see on how budgeting can be harmful and ways that it doesn't work. But ultimately,

[00:07:01] I always recommend that you do what makes sense for you. So if you and your wife are in a place where

[00:07:07] that is making sense, then I wouldn't just come out and say that is something that you should stop,

[00:07:14] or that's something that you should avoid. What I do encourage if for to push back on people who say,

[00:07:20] my budget is working for me, it's really helped to categorize or track spending or to restrict

[00:07:24] is to just step back and ask why that seems to be working for you. Think about what are your

[00:07:31] financial and personal goals? What what's in your best interests? What are you,

[00:07:35] what kind of life are you trying to live? And how can money support that? And then ask yourself how

[00:07:42] keeping a budget or some kind of budgeting or spend tracking habit is serving that those goals or not,

[00:07:48] you might find ways that it could actually be holding you back or that it's hurting your relationship

[00:07:55] with money, your mindset about money. If it's something that feels like it's encouraging restriction,

[00:07:59] I would definitely take a step back and see if there's another way that you could manage money to

[00:08:05] avoid that. Yeah, I love that. I love the approach of saying, if someone is budgeting, you're not going

[00:08:11] to just come in with the blanket of advice of just saying don't budget, which which is good to see it

[00:08:15] both ways. I do like that. That's awesome. I honestly struggle to wrap my mind around some,

[00:08:20] some way of budgeting that's not budgeting, like I don't even know what to call it,

[00:08:24] I guess, so to speak. So when we're trying to look at other options, what are what are some of those?

[00:08:30] So I recommend managing money in with a more intuitive approach. And the way that I look at

[00:08:39] money management, budgeting and budget culture is kind of in parallel to what we see in diet culture.

[00:08:45] And with dieting, I look to that to see how are people responding and intuitive eating is a really

[00:08:50] common and you can do the same kind of thing with spending to tap into what you need. Again,

[00:08:58] I go back to a lot of what are your goals and needs and best interests to think about what is

[00:09:04] the day that you want to have, the life that you want to live, the goals that you want to achieve,

[00:09:09] and how can money support that. And so with each spending decision, you can ask yourself that same

[00:09:14] question, how does this support, you know, whatever goal it is. And that doesn't have to mean

[00:09:19] restriction, that doesn't have to mean avoiding what a lot of people call impulse spending,

[00:09:24] or, you know, or even spending with debt using credit cards, things like that. It's just about

[00:09:29] how does money serve you in this moment or this season? And how does it serve, you know, you in

[00:09:36] the long term, and getting an idea of that. And from a more practical standpoint, I recommend in the book,

[00:09:44] I lay out a series of exercises that I call a money map, which is kind of a just a general term that a lot

[00:09:51] of people use. But the way that I recommend it is just laying out the resources that you have access

[00:09:55] to the financial commitments that you've made, the goals you want to achieve, and then taking all that

[00:10:01] information, and ending up with a number that I call a yes fund, which is kind of the money that you can

[00:10:06] spend without thinking about it. So you don't have to track it, you don't have to restrict certain

[00:10:10] categories, things like that. And you don't have to do it like a budget where you're like planning

[00:10:16] you're spending ahead of time or tracking your spending as you go. But a money map just helps

[00:10:20] you see your financial situation, so that you have a clear understanding of if you decide to spend on

[00:10:27] a vacation today, or a dinner out, or whatever it is that people a lot of times are apprehensive about,

[00:10:31] how does that impact other areas of your life? You know, are you going to have to take on an extra

[00:10:36] freelance assignment? Are you going to contribute less to a savings goal this month, when you can

[00:10:41] understand what those implications are in your financial situation, you can make a more informed

[00:10:49] decision and kind of a decision from an empowered place instead of just following a set of rules or

[00:10:56] setting sort of arbitrary restrictions for yourself that you don't quite know why they exist.

[00:11:02] If you're just restricting spending because, oh, I heard I'm only supposed to spend 5% to go out to

[00:11:06] eat or something like that, or you hear those percentages that commonly get thrown out. And yet,

[00:11:10] if it was just 6%, maybe that's what you need. Like, maybe that's that empowering number that

[00:11:14] you're talking about, where that little bit of a difference is that restriction versus feeling a

[00:11:20] little more confident in your spending. But because you're following that one size fits all rule,

[00:11:24] that can make it a little bit more challenging. That's where the shame then comes in is when you

[00:11:28] have this rule, I need to be saving 10% toward various goals and retirement. If you're doing things

[00:11:34] that don't allow you to do that, then you can start to feel guilty, even as you're sort of living

[00:11:39] your life the way you want to. But understanding that you don't have to follow those arbitrary rules

[00:11:44] can help you let go of that shame and just enjoy the life that you're living now.

[00:11:49] You answered the question that I was going to ask about rules of thumb and things like that. So

[00:11:53] that's perfect. But I heard you mention something you called a yes fund. And that really stood out to

[00:12:00] me there. Do you think that is a useful tool for people to start implementing even just a small step to

[00:12:05] stop feeling like they're restricted? I do. And I the name I think is kind of cheesy, but

[00:12:11] the yes fund I stuck with and stand behind because it's kind of the opposite of the way that we often

[00:12:19] approach budgeting, which is restrictive. It's about saying what you can't do or what your limits are.

[00:12:24] And what I want you to be able to do with managing money is as often as possible when you're wondering

[00:12:32] if you can use money a certain way, if you can spend money a certain way to be able to say yes.

[00:12:37] Because if it's something that you want, I want you to be able to say yes to it. So how can you

[00:12:42] organize your life and your finances and your goals to be able to do that as much as possible?

[00:12:48] And that tool I came up with based on an online bank account that I had been using, which had

[00:12:57] something called a safe to spend account, which was basically that the way that it organized

[00:13:01] your money in sort of different buckets within the bank account would fund any savings goals that

[00:13:08] you set. It would fund financial commitments, expenses that you needed sort of throughout the

[00:13:15] month. And then the money that showed up in your bank account, just like if you were looking at

[00:13:19] your checking account balance, was safe to spend. And that for me was a really freeing way to manage

[00:13:26] money. It's kind of the pay yourself first model. But what I really like about it is that I can

[00:13:31] look at my bank account and see, yes, this is how much I have to spend. I don't have to wonder,

[00:13:35] well, I have certain bills coming up. I have to contribute so much to savings or whatever out of

[00:13:41] that pool. The pool that I'm looking at is the amount that I can spend. I created the yes fund.

[00:13:46] So you can sort of use that as a guide to organize your money regardless of what tools you're using.

[00:13:52] Yeah. And I'm hearing you're describing something like a bucket almost that you can use as that fund.

[00:13:57] And I know there's several banks out there that do have buckets that you could set one up and you

[00:14:02] could title it the yes fund. And then you put your money in there and that's the one that you mark as

[00:14:06] spending comes out of that one. So I like that idea because then it gives people a little bit more

[00:14:10] freedom. And I'm really anxious to start talking about investing and long-term savings with you

[00:14:15] as well. But I know that's going to come a little bit later in our discussion, but I do want to talk

[00:14:19] about debt and maybe some of society's views and how debt can be helpful because so many people try

[00:14:25] so hard to steer completely clear of debt. There's very popular financial media talking heads out

[00:14:32] there that tell you to stay completely away from it. How can debt be useful? How can it help us support

[00:14:37] our life goals? Debt is another resource that's available to us. Just like income, just like

[00:14:47] government or community support and benefits that we have access to, debt is a resource that can

[00:14:54] expand your access to whatever you want to buy. So if you think about, you know, if your bank account

[00:14:59] goes to zero, but you have a credit card with a certain credit limit, you have that additional

[00:15:05] resource that you can continue to live your life, whether that is to make ends meet because you have

[00:15:11] to pay bills and buy groceries or whether it is because you just absolutely need something that

[00:15:16] you would consider a luxury or a comfort this week. Rather than think of it as kind of this

[00:15:24] sort of like evil thing that exists in our society, I reframed that as a resource. It's a way to expand

[00:15:32] the resources available to you. And you can do that in a way that's helpful to your financial situation

[00:15:39] by understanding how debt products work. I think a big reason that a lot of people feel really out of

[00:15:46] control with debt is because they don't understand how loans and credit cards tend to work and what

[00:15:53] the consequences are of using those. And so it can be really overwhelming and really intimidating and

[00:15:58] really stressful to try to manage those when you don't actually know how they work and what the

[00:16:03] implications of different financial decisions actually are. So understanding the fees and interests

[00:16:11] on your credit cards, you know, based on the payments that you make. Understanding when your

[00:16:16] credit card debt actually starts accruing interest, which a lot of people don't know. You know, it's not

[00:16:20] until the end of the billing cycle. You usually have about a month to pay that before any interest is

[00:16:25] accrued. Understanding how that impacts your credit score. Understanding how compound interest works so

[00:16:31] that you can kind of see what that looks like long term if you're going to be carrying a balance, things like

[00:16:36] that. Understanding what your options are for student loan debt in particular so that you can handle that

[00:16:42] in a way that fits into your life. I think debt can be really helpful to expand your resources and access

[00:16:48] to the life that you want to live as long as you have an understanding of how those products work so

[00:16:54] that you can, again, make decisions from a more empowered and informed place.

[00:16:59] Yeah, I'm hearing a lot of it's all about awareness is kind of the notes I'm taking here. We have to make

[00:17:04] sure we're aware of the things we want to spend on and the way that debt is actually used because like

[00:17:09] you said, most people don't get how a credit card repayment works. And when I worked at a call center

[00:17:14] for a credit union, that was one of the most common questions we'd get. They'd be like,

[00:17:17] why wasn't there any interest on my credit card this month? But there was last month, but they

[00:17:21] didn't understand statement balances and things like that. So I'm hearing like you can use all these

[00:17:26] tools if you understand how they actually work. It's when we don't understand how they work that

[00:17:31] we're suddenly in eight, $10,000 of credit card debt and we don't get it. Then you feel frustrated.

[00:17:36] You start taking the blanket advice that's shaming you and guilt tripping you into feeling so bad for

[00:17:41] just simply not understanding one of the rules with debt. When as you start to gain that understanding,

[00:17:47] you can feel more confident with those tools. If people get to a point where they're feeling bad,

[00:17:52] how do you kind of overcome that a little bit? And even though you still probably want to work out of

[00:17:57] debt, I don't think you're saying let's stay in debt, but how do you overcome that shame that

[00:18:02] maybe comes with it? That's the really hard part. And I want to say on that too, when I say you need

[00:18:07] to understand how these products work, that's not to shame people who have credit cards or student

[00:18:13] loans and don't understand the debt that they've taken on because that's really all by design.

[00:18:19] That's part of budget culture. Part of the way that we approach money in this culture

[00:18:23] is to push debt on people or put people in situations where they can only get by by tapping

[00:18:32] into that resource, but never giving them the information that they need to actually deal with

[00:18:38] it in a way that's going to work for them. And so that's the first thing is just understanding

[00:18:43] that whatever situation you're in, it's by design. It's not because you have done something wrong

[00:18:51] or that you have failed necessarily. The system is really designed to put you in that situation with

[00:18:57] debt products, especially those are really designed to just get people to use them and to pay interest

[00:19:03] on them. And that's kind of the bet that credit card companies and lenders are, are taking is that

[00:19:08] you won't fully comprehend how to make those work without it costing you a lot of money.

[00:19:14] So it's not your fault. I think, is that the line from Goodwill Hunting? I feel like everyone,

[00:19:20] every financial planner just needs to start sessions there. Just give people a hug and tell

[00:19:24] them it's not your fault because we live in a system and a society and a culture that is intended

[00:19:31] to put you in a difficult situation financially.

[00:19:34] I've said on a couple of different episodes when I'm thinking about it, because credit card interest

[00:19:38] subsidizes those credit card rewards that are so tempting and things like that. And as I was

[00:19:44] talking about, I was like, I would have no problem with credit card rewards not existing if the credit

[00:19:48] card debt on the other side of it didn't exist either. But as you start thinking about that,

[00:19:52] our entire economy would have to change because people are instructed, you put everything on

[00:19:57] debt, you pay that monthly payment. That's the way things are set up because things are so expensive

[00:20:01] or they're like teased with these crazy deals that are actually just going to make a ton of money

[00:20:07] on the backend. And everything would have to change if we got rid of credit card debt as a whole.

[00:20:12] And that I think is a key into what you're saying about how the system is kind of set up around you

[00:20:17] to put you in a hard place. Because if that didn't exist, everything would be different,

[00:20:22] which is just a, once you start thinking about that, you start going down that wormhole and that

[00:20:26] rabbit hole that there's, there's so much around us that makes things hard for us. Cause like you

[00:20:30] walk into any retail store and there's pamphlets and signs about their credit cards. You get 10% back at

[00:20:36] their store, but they don't mention the interest rates 20% or something like that. So I completely see the

[00:20:41] point you're saying there that, that is honestly true. Let's start it with. It's not your fault.

[00:20:46] Yeah. I think that's really important to overcoming that shame. And that was one of

[00:20:49] the biggest questions that I got actually from beta readers on my book was how do you overcome that

[00:20:54] shame? And that's a really big question. I wish that I could really just say here are the five steps

[00:20:59] to overcome budget culture shame. But I think that's the most important thing is just understanding

[00:21:04] it's not your fault. And then asking questions about how things work,

[00:21:08] because I think you'll feel a lot less shame if you feel informed and able to make decisions with

[00:21:16] the full information, rather than just feeling like you're trying to follow a set of rules

[00:21:21] that don't quite make sense to you and that you can't quite achieve.

[00:21:25] Yeah. And as you start to ask questions, you'll understand, wow, I just didn't have this key piece

[00:21:29] of information. If I would have known this six months ago, I could have paid off the credit card before

[00:21:33] the statement balance was due and had none of this reverse compounding interest. Let's talk a little

[00:21:38] bit about how debt can support life goals. Because recently I've had an experience with this as well.

[00:21:42] I'm doing the coursework to become a CFP. And we got a credit card offer in the mail for a 0% for 18

[00:21:50] billing cycles or something like that. And I was like, oh, this lines up well with what I want to do

[00:21:54] there. And I think that's an example of being educated with debt, that I could put this maybe

[00:21:59] more expensive than we can pay right now program on a credit card and let it go over that 18 months

[00:22:04] and pay it back. How can debt support us in our life goals with maybe stuff similar to that or other

[00:22:10] options? That's a great example. It's something that when you look at your resources right now,

[00:22:17] when you look at your goals right now, so your goal of getting that certification might not line up

[00:22:23] with the resources you have available. Or maybe you could pay that up front right now, but then

[00:22:29] you're really going to have to restrict on other things. That's where the money mapping, getting that

[00:22:34] comprehensive view. Maybe you have the cash, but it would drain your savings so that you don't have

[00:22:40] a rainy day fund and you're a lot less comfortable for the next 18 months. So that's one way that it just

[00:22:46] makes things accessible to you that you might not otherwise be able to access. It makes life more

[00:22:51] comfortable. It also helps the kinds of things that financial experts call good debt, like student

[00:22:58] loans or mortgages or something that are always recommended because they help you sort of buy

[00:23:04] skills or assets that could potentially build wealth in the future. It gives you access. Most of us

[00:23:12] in the United States don't have just cash on hand to purchase a house, which the way that our

[00:23:19] systems are set up is really important to wealth building, especially generational wealth building.

[00:23:24] And so being able to take on mortgage debt is a way to do that and take that step, which can be

[00:23:30] transformative for a lot of people. So there's a lot of things that debt can buy for you. But

[00:23:36] essentially, I just think of it as a way of expanding your resources because a lot of times it's not

[00:23:42] easy to be able to buy everything that you need to live a life and to live safely and securely and

[00:23:51] comfortably, comfortably without having those additional resources just within the resources

[00:23:56] that you could earn from working. Yeah. And a little bit of what I'm thinking about is if we're

[00:24:01] only shaming against debt or there's so much shame, you can't go into debt, any sort of debt at all.

[00:24:06] It's kind of like saying, hey, can you hang up this picture, but you're not allowed to use a hammer.

[00:24:10] Like you're only allowed to use a screwdriver. That's, and, but it just doesn't work like that.

[00:24:14] That's, that's kind of the picture that I'm painting in my mind that there's, there's multiple

[00:24:18] tools in our hands that we can use either one to help us accomplish our goals instead of just

[00:24:24] like removing one for seemingly no reason. That's a fantastic way of framing it. I will,

[00:24:30] I will pass that on. Yeah. TM, I trademarked it. There we go. Yeah. Now, is there a type of debt

[00:24:35] that should be avoided? I kind of think of payday loans. There's kind of those ones that are

[00:24:39] probably also predatory, like the culture builds around it, but is there maybe some that we should

[00:24:45] just keep out of our mind? I wouldn't give a blanket rule for that. That's definitely like

[00:24:50] payday loans and buy now pay later apps come to mind for a lot of people. There's a lot more warnings

[00:24:55] against those than against credit cards or mortgages or student loans. They're all predatory to some

[00:25:02] degree because the idea is that like some bank or some person or, or entity with more resources gets

[00:25:10] to hoard that resource that the rest of us don't have access to, and we have to pay them for access

[00:25:15] to it. And so payday loans in particular are just one that costs a lot more to access that resource,

[00:25:21] but they can also be very valuable to people who can't access debt in any other way. People don't

[00:25:29] tend to use payday loans without understanding how costly they are. People tend to go into those

[00:25:37] situations with eyes wide open. It's just difficult to manage that debt once you have it because it

[00:25:46] really adds up. So I wouldn't set a blanket rule on any types of debt that you absolutely should avoid.

[00:25:52] I think using any kind of debt follows that, just follow that same kind of guideline of understand

[00:25:58] how it works and, and what you might deal with kind of on the back end. And even if you can't,

[00:26:04] a lot of times the advice is like, you know, know how credit card interests work and make sure that

[00:26:09] you have a plan to pay that off by the end of the month or whatever, if you're going to make a purchase,

[00:26:14] even if you know that that's not going to be an option, if you're taking out a payday loan or doing

[00:26:18] a buy now, pay later, and knowing that you're not going to be able to pay it off before whatever

[00:26:22] deadline to avoid fees and interest, just knowing that is already empowering. Cause you just at least

[00:26:28] know what you're going to be dealing with on the other end. Sometimes you just, you're just in a

[00:26:33] situation where you have to dig that hole for yourself, but as long as you know where it's

[00:26:37] going to be, it's a lot less stressful. I've definitely been in that situation where I'm in

[00:26:42] the hole, but once I understood what was going on with all of my debts, it was much less stressful

[00:26:49] to kind of deal with them and manage them on the other end. Yeah. I love it. I love it. I knew,

[00:26:54] I figured with that question, I was like, she's not going to come in here and give us some blanket

[00:26:57] rule. That would just be against the whole first half of the episode. But I love the way that you

[00:27:01] painted that, that we still just need to be aware, even if it's going into a type of lending product

[00:27:07] that is more expensive, it's all just still about that awareness that if you know what it's going to

[00:27:11] cost ahead of time, it makes it a little easier to stomach a little less frustrating on yourself

[00:27:16] when that like confusing product is presented and you don't understand, that's where I think that

[00:27:21] shame it's kind of built into the product where you're like, why is the interest $400 this month?

[00:27:26] And why is it growing every day or something like that? When you understand it, you at least know

[00:27:30] what's coming, whether it's good or bad. It just helps you, like you said, feel a little bit more

[00:27:33] empowered about what is going on, but it's time to talk about investing. I want to talk about this a

[00:27:39] little bit more with you from your perspective. I can see how people have different ways of budgeting and

[00:27:44] using debt and things like that. But investing is one where I struggle to think differently than the

[00:27:49] typical way that I've been taught to invest, low cost index funds, funnel it all into a 401k,

[00:27:55] things like that. Is there even a different route when it comes to investing?

[00:27:58] If you're talking about investing, like the actual term investing, which is sort of

[00:28:04] passively putting money into somewhere where it's going to grow passively and then pay on the back

[00:28:09] end. That's basically it. We have the stock market and investment funds, like you mentioned,

[00:28:15] low cost index funds are the most kind of widely recommended for most people because they're low

[00:28:21] risk and low cost. And so that is kind of where we're at with investing. But I do have a whole

[00:28:28] chapter in the book that talks about the ethical situation that investing puts us in because it's

[00:28:39] really extractive in our society rather than even though it might feel additive because you're like,

[00:28:46] oh, I can grow my money for free like that money has to come from somewhere. And so it's exploiting

[00:28:52] workers somewhere. It's exploiting resources. It's exploiting consumers by building profit. And then

[00:28:58] we are all benefiting from those profits in the stock market. So it's not a great way for our

[00:29:04] society to be organized. It's just the way that we have done it. But I do encourage people if you

[00:29:11] feel sort of like you have the fortitude to kind of experiment with your long term savings that or a

[00:29:19] different lifestyle that you could try to think about different ways that you could plan for the future

[00:29:24] without necessarily relying on the stock market. I do like the potential of peer to peer lending

[00:29:31] as basically an alternative investment strategy. There are a lot of different ways that it's done.

[00:29:37] And some of them basically just look like investing. But some are a little bit more kind of human and

[00:29:42] focus on the human side of things where you're making a loan to an individual. You're, you know,

[00:29:48] you're basically acting as the bank if you're doing it as the lender or the investor. And then they

[00:29:52] can pay back with a fee of their choosing. You're still making money off of somebody needing debt.

[00:29:59] So there's always if you're going to make money off of money, there's going to be some question there.

[00:30:04] But it's there's just a way to kind of bring it down to a more human level instead of just

[00:30:10] passively making money off of money. Yeah. Yeah. My money just magically makes more. But there's also

[00:30:16] you could you could build a business that you sell, you could invest in local businesses, which is

[00:30:22] essentially what you're doing, you know, in the stock market, but just investing in smaller businesses

[00:30:26] where you, again, have more of kind of a human contact with the people actually working in that

[00:30:31] business and the communities that it impacts. There are ways that you can invest to grow your money,

[00:30:38] sort of cut down on the level of exploitation that you're participating in.

[00:30:41] But all of those are a lot riskier than investing in low cost index funds. They don't come

[00:30:49] with the tax advantages that retirement accounts come with. Everything is really set up for us to

[00:30:55] be investing in in those traditional investment accounts. So I always caveat that I wouldn't I don't

[00:31:01] like directly recommend that people do one thing over another. But I just start I want to pose the

[00:31:07] questions to get us thinking about what are some alternatives and see if we can maybe turn the ship

[00:31:13] just a couple of degrees. Yeah, to even get some sort of tax favored product that is locally smaller

[00:31:19] businesses would be huge if there was some way to do that. Because what I'm hearing is the similar

[00:31:23] sort of setup that companies or the system is set up in a way to funnel the money in this direction

[00:31:30] that kind of goes back to the credit card debt and shaming and things like that. But this one's a

[00:31:34] little bit harder to crack. It's kind of what I'm hearing like we can say it's not your fault about

[00:31:38] credit card debt and things like that and explain that one. But it sounds like the investing take

[00:31:43] around budget culture and investing culture. That one's a little bit more challenging because like

[00:31:47] you said, it comes with more risk because there's just bigger numbers involved in this system,

[00:31:52] which makes it challenging. Yeah, absolutely. And I have talked with some financial planners who,

[00:31:57] in part because of some of the ethics of investing, but also just because of the realities

[00:32:02] of our financial situation that younger generations like Gen X and younger are a lot of times not

[00:32:11] saving enough money to retire anyway. Like they're not following the kind of recommended savings rates

[00:32:18] because everything has been more expensive as time has gone on relative to the income that we're

[00:32:24] making. So it has become harder and harder to save for retirement. And the options available to us,

[00:32:31] like pensions and social security and stuff have sort of become less and less of a safety net.

[00:32:36] Also, people are also talking about alternative ways of planning for retirement that include some

[00:32:42] investment. But because you don't have enough retirement savings, you might have to think about

[00:32:46] what kind of work can you do longer term and how long can you realistically work? And might you want

[00:32:53] to work part time to be earning income? Might you, if you could afford it, could you own property and

[00:33:00] rent that out and for some kind of income? So there's kind of different ways that people are

[00:33:04] approaching retirement too, just because of our financial realities. So I think there's,

[00:33:10] especially as millennials age and as Gen X moves into retirement, we're going to have

[00:33:15] a lot of bigger conversations about this kind of just relying on investment accounts for our

[00:33:22] long-term financial stability. That'll be interesting. That'll be very interesting to see how that plays out

[00:33:28] in the next 10 or 20 years or however long it'll be. But let's talk about your book for a moment here

[00:33:33] as we're coming to a close. You have a book coming out. What is it called? How can people find it?

[00:33:39] So the book is called You Don't Need a Budget. In it, I investigate our cultural relationship with money

[00:33:45] as we've been talking about. And I offer a guide to an alternative budget-free approach

[00:33:51] that doesn't rely on budget culture's focus on restriction and shame. You can find it anywhere

[00:33:58] that you buy books. It's available for pre-order, including through local bookstores. So from Amazon

[00:34:04] to Barnes & Noble to your local bookstore, and you can find out more information about it at

[00:34:09] youdonntneedabudget.com.

[00:34:11] Fantastic. When does the book release again?

[00:34:13] December 24th.

[00:34:14] So it'll be out in just a few weeks. That's fantastic. Real quick, our final question here

[00:34:19] as we're wrapping up. I always like to ask everyone something similar to this. What is one

[00:34:23] of the favorite things that you teach about in the book that you wish you could have told yourself

[00:34:26] maybe 10 or 15 years ago?

[00:34:29] I loved pondering this question. I think the big thing would be, I wish I could have learned how

[00:34:36] the common debt products work. I talk through that in the book, how student loans, mortgages,

[00:34:42] credit cards work. And I think if I'd have had a better understanding of how credit scores work,

[00:34:48] I might've gotten a secured credit card sooner and had more access to resources for a few years

[00:34:54] if I had understood how my student loans worked, which I had no idea when I left college and just sort

[00:35:00] of buried my head in the sand about those for a few years. If I knew how those worked, I could have

[00:35:04] gotten on an income-driven repayment plan right away instead of waiting for years and going into

[00:35:10] default and accumulating a bunch of interest and penalties. So I would have, I think, been in a much

[00:35:16] better situation. There were a lot of years where I didn't have a lot of income and I didn't have a

[00:35:22] lot of access to resources because of a low credit score. And I think understanding how those debt

[00:35:26] products work a lot sooner might have helped ease that a little bit.

[00:35:31] What a great way to tie the bow on this episode. The whole time we've been

[00:35:34] talking about, be aware of how your money's working for you. Be aware of those credit tools

[00:35:39] that you have available. And we'll wrap it up with that, that everyone should go out and learn

[00:35:43] what their common credit tools or debt tools are doing for them and how they can utilize them and

[00:35:48] use them a little bit better. But Dana, thank you so much for joining. This has been a fantastic

[00:35:52] conversation. Thank you for having me. Thank you so much to Dana Miranda for coming on today's

[00:36:06] episode. And make sure you check out Instagram because we're going to be doing an Instagram

[00:36:10] live. If you're listening to this on the day that this episode releases, we're going to be doing it

[00:36:14] this evening, but make sure you head over to Instagram to follow both Dana and I on Instagram

[00:36:19] and check out some of the content we're producing. But let's start on the first money talking point.

[00:36:23] Do you view budgeting in a way that's damaging to your relationship with money? What if you view

[00:36:28] budgeting in a way that's restrictive? I think that this can be a great place for you to use personal

[00:36:32] categories in your budget. If you don't want to stick to a very hardcore restrictive budget,

[00:36:36] my wife and I both have categories in each of our name that we can spend on whatever we really want

[00:36:41] without a direct need to ask each other. If it's still a large purchase, we'd like to ask each

[00:36:46] other and talk about it. But we found that my wife likes to spend money on little things,

[00:36:50] smaller increments as she goes, where I like to save my Skylar fund for a long period of time and

[00:36:56] then spend it suddenly. And this works really well for us. I like to buy big tech things. She likes to

[00:37:01] do more hobbies and crafts and projects as time goes and use her money for that. But my biggest

[00:37:06] takeaway is that the harm of blanket advice, especially when you view budgeting in a big

[00:37:11] blanket one size tries to fit all away. I talked about with Dana that she doesn't like to give

[00:37:15] blanket advice and she did a great job of sticking to that in our podcast interview. So I think the

[00:37:20] take on money is really healthy when you have this kind of wide open, ignore the blanket advice,

[00:37:26] kind of seek something that works for you because it allows us to see that there's a lot of different

[00:37:30] perspectives and opportunities because maybe budgeting is the right way for you. Maybe it works

[00:37:35] really well and that's what you need to stick to. And that's okay. But maybe a regular money talk is

[00:37:39] all you need to do. And maybe both of those aren't the right way at all. I think that's the thing we

[00:37:44] really need to keep our mind open to is that there could be other options we need to consider that

[00:37:48] might be a better option for you. And I really like the idea that Dana mentioned of a yes fund.

[00:37:53] I think that a yes fund kind of goes hand in hand with what I was talking about of my wife and I

[00:37:57] having our Skylar and Rebecca funds. If you have a yes fund, that means you have a place where

[00:38:02] you're telling yourself, I can spend the money that's in here without any form of restriction,

[00:38:07] any form of shame, nothing of that sort comes with spending your yes fund because that's what it's

[00:38:12] called. You think, Oh, I want to spend money on this. Yes. That's where that money comes from. Oh,

[00:38:16] I want to spend money on this. Yes. Pull the money from your yes fund. I really like that. And I think

[00:38:22] as I think about the yes fund, I'm thinking of episode 153 with Julia Carlson, where we talked about

[00:38:27] the anti budget. And this can be a great way to give yourself permission to spend money. I'd recommend

[00:38:32] you go back and listen to episode 153 once you're done with today's episode, because it's a really

[00:38:36] good one. If you're intrigued by the idea of a yes fund, go and check out that episode. It's going

[00:38:41] to be really good for you. So that does it for this first money talking point. I want to move into the

[00:38:46] second one here, but just to wrap up the first one is do you view budgeting in a way that's damaging

[00:38:50] to your relationship with money? I'd be really interested to hear what you have to take. So head on over to

[00:38:55] Instagram, leave a comment on one of this week's posts. Let me know what you think. What is your

[00:38:59] view on budgeting? The second money talking point for today is what is your money map look like?

[00:39:05] Early in the interview, I asked Dana what she would recommend to do since budgeting seems to be

[00:39:10] working well for my wife and I, and she gave some advice that I wanted to touch on. And it is going to

[00:39:14] help you figure out the direction that you want to go with your money. She mentioned in her book,

[00:39:18] what she has developed called the money map, and that it's going to help you with your money by

[00:39:22] figuring out several things that impact your spending and so forth. So check out her book if

[00:39:27] you want to learn more about that specific principle. But I want to talk about some of the things she

[00:39:31] mentioned in the interview when you're considering budgeting as an option for managing your money or

[00:39:36] other options for that matter of fact. But let's consider a couple things here. What are your goals?

[00:39:41] What are your interests? What kind of life are you trying to live and how can money support that?

[00:39:46] How does keeping a budget or a tracking habit serve your goal? And could your current money

[00:39:51] management method be hurting your mindset? And that's a little bit of a plugin for the first

[00:39:55] money talking point. But let's go through each one of those. What are your goals? I think it's great

[00:39:59] to be thinking about your goals, no matter how you're managing your money, whether it's with a budget or

[00:40:03] not, whether it's with an anti budget, whether it's with a spend first plan that you want to make sure

[00:40:08] you're not restricting yourself. However, you're managing money goals are, I think, a good thing to

[00:40:12] consider, and especially your interests as well. It'll help you identify some ways that you want to spend

[00:40:17] your money. If you're thinking about traveling, and that's your interest, well, then you know,

[00:40:21] you're going to need to spend some money in that way. And you're going to need to take off that

[00:40:24] restriction of spending several hundreds of dollars at a time on a plane ticket, you're going to need

[00:40:29] to be okay with that. So you need to make sure you have your goals and interests in mind. So you know,

[00:40:33] when it comes to spending money on that thing, you can look back at this money map that you're

[00:40:37] developing with your goals and interests and say, yes, that checks that goal that checks that

[00:40:42] interest. So consider those when you're thinking about how you want to spend money. Another thing that

[00:40:46] Dana mentioned is what kind of life are you trying to live? And how can money support that?

[00:40:49] Are you trying to travel a lot? Are you trying to be frugal to save for a goal? Maybe savings is

[00:40:54] something that you want to do. The important thing here is to not just take a blanket piece of advice

[00:40:58] and apply it. What kind of life are you trying to live? And how can you have money support that?

[00:41:03] Or how do you want to spend money in support of that life you're trying to live? If it's traveling,

[00:41:08] maybe you do need to spend money to do that. And that's okay. If it's trying to be frugal to save for

[00:41:13] some goal like a down payment for a house or something like that, maybe there's some frugal steps you

[00:41:17] need to take. But identifying that is going to help you a lot with figuring out how you want to spend

[00:41:22] your money. How can keeping a budget or a tracking habit specifically help you with your goals? I

[00:41:27] think tracking is so much of a bigger deal for my wife and I. To be able for us to see where we've

[00:41:32] spent money, that's fantastic. It's great for us. It allows us to talk about and identify patterns

[00:41:37] in our spending. And I'm just telling you this story from my perspective, because maybe there's one

[00:41:42] week that we did eat out more than we wanted to, or more than our goals and our interests really are

[00:41:47] going to allow us to, because we're kind of allowing those things that we've set, the parameters that

[00:41:52] we've set to guide our money management. And maybe eating out too much one week isn't aligned with

[00:41:58] those goals. I think tracking allows us to see what's actually happening there and for us to point

[00:42:03] at that and identify, hey, that wasn't necessarily aligned with our goals. But tracking allows us to find

[00:42:10] that for ourselves and not only have to go based on some blanket one size tries to fit all advice.

[00:42:16] We're not going solely on some recommended percentage for eating out because we know what

[00:42:20] fits into our goals and date nights, things like that. So make sure you understand is your tracking

[00:42:25] habit serving you and how can it do that? And then another thing to think about is could your money

[00:42:30] management method be hurting your mindset? And I think it can tend to put me in a mindset of not

[00:42:36] wanting to be free with my money. I don't want to be impulsive, I guess, so to speak, but it kind of

[00:42:41] does put me in that restrictive mindset. Like I think Dana has been talking about, I'm wanting to

[00:42:46] restrict myself because of the sake of keeping these numbers low, which can be good or bad, but I've

[00:42:52] worked on this a lot. I am much more willing now to be spontaneous with money than I ever used to be

[00:42:56] before. It was a no go before I didn't want to spend money. I didn't want to spend it freely, of course,

[00:43:02] but I think I've grown in that way because we track our money and I can feel confident with what

[00:43:07] we're doing now. Because if you're not tracking it, in my opinion, I think the lack of tracking leads to

[00:43:14] this over control where you don't really know what's going on with your money. So you feel like

[00:43:18] you have to control it all very aggressively. That's why I think just a bare bones amount of

[00:43:23] tracking to see categories can be really helpful because then you know where your money is actually

[00:43:27] going. Maybe you're saving more than you're spending and you didn't even realize it because

[00:43:31] you're not tracking it. So that's why I think tracking can be a huge tip or tool for people

[00:43:36] to implement into how they want to manage money. But tracking can also be harmful if my spending

[00:43:41] aligns with my goals and interests, but some random spreadsheet number says that I can't do

[00:43:46] something. So make sure you're still being aware of those goals and interests and not solely following

[00:43:50] a spreadsheet. But I think as you continue to work through those conversations to develop your money

[00:43:55] map, you're going to get better and better and better with it. But let's move on to the third

[00:43:58] money talking point here. How can you use debt to support your life goals? I really, really,

[00:44:03] really like this question. How can debt support your life goals? Let's think about it because

[00:44:08] maybe you're in a stage of life where taking on some debt can be a really good thing. And I know

[00:44:13] that's a little weird to say, but I like the idea that Dana suggested about being aware of what your

[00:44:19] debt products do and understanding how they work. Let's think about right now as we're talking about

[00:44:23] this money talking point. What are some ways that you could use debt to support a life goal? Maybe

[00:44:28] there's a job that you do unfortunately need a car to get to. So maybe an auto loan can help you with

[00:44:33] the goal of getting a specific job. Maybe a personal loan can help you achieve some goals that you have

[00:44:38] with a friend or a family member. It's all about understanding the costs and not being manipulated by

[00:44:43] a system in place that tries to land us in debt. Maybe you need to use a credit card to get through a

[00:44:48] tough spot. The system will probably try to mask your credit card usage in some sort of a

[00:44:52] promotion, a 0% promotion that can be good, but you need to make sure you understand how it works.

[00:44:57] That's where the real power comes in managing our money is understanding the, I guess, terms and

[00:45:01] conditions for lack of a better term behind our debt products. If you find yourself in debt,

[00:45:06] remember what Dana and I were saying, it's not your fault. It's extremely common. And I've seen it so

[00:45:11] many times that people find themselves in poor financial situations due to marketing and sales

[00:45:16] of these giant organizations that are just set up to take our money. So give yourself some slack and begin

[00:45:21] to understand your debt products and move forward. Understand how the interest works, understand how

[00:45:27] the different benefits that your credit union is offering can actually help you or can hurt you.

[00:45:32] Because I think so many times people here skip a payment for Christmas and they think, oh,

[00:45:37] we're just going to magically move one payment to the end of the loan, but you're actually increasing

[00:45:40] your overall costs to borrow by letting more interest accrue on your next payment at a higher balance.

[00:45:46] If you begin to understand that, you'll understand how they're just trying to siphon more money from you

[00:45:51] by offering this thing that looks nice or looks like a helpful tool, which maybe it is a helpful

[00:45:56] tool. But once you understand how it's actually working, that's when you can have the most power

[00:46:00] in your financial life to continue to do better with debt. So if you do want to get out of debt,

[00:46:05] I think that's a great thing to do. But if you need to use debt, make sure you understand how it can

[00:46:09] support your life goals. You heard in the interview, I was telling Dana a story about how I used a credit

[00:46:14] card to purchase the CFP course that I'm doing. And I used a credit card that came at the right

[00:46:20] time with a 0% promotion, but I made sure I understand how that promotion worked. My wife

[00:46:24] and I talked about how we could use this card with its 0% interest over the next 18 billing cycles

[00:46:29] to pay for this CFP program over time. And we have the money to pay for it. It wasn't that expensive,

[00:46:37] but by being able to spread it out, it makes it a whole lot easier to cover. We're not suddenly

[00:46:42] draining our emergency fund or some other sort of savings that we have set up like a trip or

[00:46:48] something that's coming sooner than we could take to pay off the credit card. So there's a lot of

[00:46:53] different options that debt can bring into your life. You just need to make sure you understand

[00:46:56] how it works so you can use it well. But I want to wrap up today's episode. We're coming here to a

[00:47:01] close and I appreciate all of you for listening. I hope you found this episode helpful and I hope it

[00:47:06] helps you have a money talk with a friend or a family member. Simply share this episode with them

[00:47:11] and then go and have a money talk with them about it. I found that sharing episodes with my

[00:47:15] friends from other podcasts leads to fun and engaging conversations about that topic. So

[00:47:19] give it a shot. Click share and let your friend know what you liked from the episode. And also,

[00:47:24] this is my first episode back in a while. You probably heard the trailer that came out last

[00:47:27] week and I hope you liked it. That trailer is really going to help me stay focused on who we're

[00:47:32] serving, who we're talking to, and the kind of money talks we're having. So make sure to share with

[00:47:37] your friends and get them on board with this money buddy community. And you may have noticed the

[00:47:41] new format in today's episode. I'm going for slightly longer interviews with some focused

[00:47:45] extra conversation solely on the money talking points. So you can take those talking points

[00:47:49] and then go discuss them with a friend or family member or someone, you know,

[00:47:52] and if you have any feedback at all, or any sort of suggestions or comments on the show,

[00:47:57] head over to money talk with Skylar Fleming.com slash contact and submit the form.

[00:48:01] I'd be happy to make any adjustments you'd like to see to the show, especially if it's going to

[00:48:05] help make it better. And that form is also a great place to submit guest recommendations. So if

[00:48:09] you heard someone on a podcast that you listened to that you'd like to hear them on here and maybe

[00:48:13] have us battle it out over one of your favorite topics, submit a recommendation through that form.

[00:48:18] I'd love to see them, but let's wrap it up here. Today's conversation was a great one

[00:48:21] about avoiding the blanket. One size tries to fits all advice out there. It can sometimes do more harm

[00:48:28] than good. Really. It's all about awareness of our own financial situation and understanding the cost

[00:48:33] of what we're doing. And don't forget to check out Dana's book when it comes out in a few weeks.

[00:48:37] Thank you for listening to this week's episode of money talk with Skylar Fleming.

[00:48:40] I'm your host Skylar Fleming. Have a great week.

[00:48:44] Thank you for listening to money talk with Skylar Fleming. This show is provided for informational

[00:48:49] and entertainment purposes and may not be specific to your unique situation.

[00:48:53] Please be sure to do additional research before making any financial decisions.