Spend your Money! Spaving and Intentional Spending with Nick Garofalo - 161

[00:00:00] Welcome to Money Talk with Skyler Fleming, where you learn what you weren't taught in school. Let's get talking!

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

[00:00:10] What is spaving? Well, spaving is spending to save. Doesn't make a whole lot of sense, right? But once I explain it, you'll get it.

[00:00:17] Spaving is things like at the store where you see buy two, get one free, buy three, get three free.

[00:00:21] The store is encouraging you to spend in order to save. You see this in all sorts of different ways.

[00:00:26] Bogo deals, buy two, get 50% off, save 10% when you buy $50 or more. Annual subscriptions that are cheaper than the monthly subscription.

[00:00:35] Getting a larger drink when the medium or small would have sufficed just because it was a little bit more expensive

[00:00:40] but not as much more expensive as the gap between the small and medium. So you're like, why not go up to a large? It's only 10 cents more.

[00:00:46] Those sort of things are spending to save. Anything that gives you a discount once you spend a certain threshold is spending to save.

[00:00:52] In today's episode, we're going to talk more about this idea of spending to save or spaving as well as touch on intentional spending.

[00:00:58] Spending is okay and I don't ever want to make people think that you shouldn't spend anything.

[00:01:02] While I do find a ton of value in no spend weeks, which I'm going to talk about in this episode,

[00:01:06] there is value in enjoying life with the money you do have.

[00:01:10] A quick tip before we get into the episode for those of you who need a quick tip

[00:01:14] because you're super busy and you got to get on to the next task.

[00:01:17] Make sure to reframe your savings opportunity in a couple different ways, especially when it comes to spaving.

[00:01:22] If it's BOGO, consider the full cost for two instead of just one.

[00:01:25] Are you willing to pay that price for two things?

[00:01:27] Make sure you realize that BOGO is the same thing as buy two get 50% off.

[00:01:31] So use reframing in a way to consider the sale and see if it's worth it.

[00:01:35] Also, do you really need two of the thing?

[00:01:37] Maybe you only need one and you realize I really just don't need two.

[00:01:40] Can you maybe find a better deal on just one of them?

[00:01:43] Or maybe the store is going to give you half of that price for just one of them.

[00:01:47] Consider those sort of things that might be possible.

[00:01:49] Or maybe shop elsewhere. Maybe you can find a better deal.

[00:01:52] And you only need the one item so then you don't bother getting more than you need.

[00:01:56] But let's introduce today's money buddy, Nick Garofalo.

[00:01:59] Nick Garofalo is a CFP candidate and founder of OpenHanded Wealth.

[00:02:03] His goal in business and in his podcast is to help Christians align their life goals and vision with biblical wisdom.

[00:02:09] Transforming stress into clarity and solving the client's pain points.

[00:02:12] He talks about the intersection of faith, business and generosity.

[00:02:15] Empowering listeners to find financial peace and give freely and leave a lasting legacy.

[00:02:20] One small choice at a time.

[00:02:21] The money talking points for this week are, have you ever spave?

[00:02:24] How can a no spend week help me?

[00:02:26] And third, what is something I enjoy purchasing intentionally?

[00:02:29] With the money talking points in mind, let's get talking.

[00:02:41] Welcome to today's interview. Joining me today, I have Nick Garofalo.

[00:02:45] He's a CFP professional and I'm excited to talk today about spaving some intentional spending tips and tricks.

[00:02:51] Nick, would you go ahead and introduce yourself for everyone real quick?

[00:02:53] Skylar, thanks for having me. I'm glad to be here.

[00:02:55] My name is Nick. I live in North Atlanta.

[00:02:57] I'm the owner of OpenHanded Wealth, an investment firm and financial planning company headquartered in Holly Springs.

[00:03:04] I talk to business owners all the time and I find that a lot of them are struggling just with exhaustion.

[00:03:09] Usually they're feeling overwhelmed by the sheer volume of financial fires that they're constantly trying to put out every day.

[00:03:15] And so I help them gain clarity and make more strategic financial decisions so they can keep more of what they earn, build wealth and make a lasting impact on those around them.

[00:03:25] Yeah. Who doesn't want to make strategic financial decisions?

[00:03:27] I'm hoping we can help people make some strategic purchasing decisions when they're at the store next.

[00:03:31] I want to kick us off by talking about how companies try to get us to spend more by making it look like we're saving money.

[00:03:37] And what I'm referring to is spaving. I heard this term a couple months ago and I was like, that sounds weird. What is that?

[00:03:43] A good example of this is buy one, get one deals. Anything that's maybe slightly more expensive, larger sized options.

[00:03:49] Like maybe you've been at a store and they're large is only 50 cents more than their medium.

[00:03:54] And then their medium is like a dollar more than their small.

[00:03:57] So pricing structures, annual subscription deals, things like that.

[00:04:01] Anything that gets us to spend a little more to make it look like we're saving money.

[00:04:07] Have you ever bought something because of a deal like this? I know I have.

[00:04:10] Oh my gosh. Yes. Who hasn't, right? How many of us have somehow not fallen prey to Amazon's slick marketing?

[00:04:16] Yeah. Like free shipping stuff. Lightning deals. Those are examples. Yeah.

[00:04:20] Yes. So this is a topic that I actually care a lot about because we want to get a good deal. We want to save money and make smart financial decisions, but the tendency to spend a little more because it was a good deal.

[00:04:33] Amazon does this to us all the time. And black Friday is probably one of the most horrible examples of this where they'll show you, oh, this thing is 40% off.

[00:04:41] Normally it's 49 99, but right now it's only 27 99 or whatever. But what you don't know, and you can actually, I love this little trick. You can copy the link. You might know this. Have you heard of camel camel camel.com?

[00:04:52] I used it this year extensively to do what I'm imagining you're about to describe.

[00:04:57] So you, you go to this camel camel camel.com. You go there, you can input the URL of an Amazon item and it will show you the price history for as long as they've been cashing it. And in a lot of cases, this, you know, great 40% off deal. It's totally fake. What they did is they dropped the actual price from 29 99 to 27 99, but they plugged in a $50 MSRP and made it look like it's this great deal.

[00:05:19] It's illegal. Like it should, it should not be allowed because I, like you did, like you just said this year, I specifically wanted to watch very closely on that. Cause I was going to try to time some purchases around black Friday for Christmas and things like that. Try to save some money where those deals. I saved all my tabs for those orders and products. I looked at them the next week and a half later. And the prices were all still the same. I'm like, where's the savings? What happened? Once you start to realize that you're like, wow, this is just a big scam. I just need to accept that. I need to spend money.

[00:05:47] And you're not going to get as great of a deal as you thought, because there's so much data out there. They can toy with these prices like this. And it's like a toy with us. Yeah. I bet it's crazy. How is that so enticing for people? How does that get people to spend money?

[00:06:01] Um, because we all want a good deal. There's some behavioral biases at play here too, where we're more likely to feel better about saving a little than the feeling bad about spending a lot.

[00:06:13] Hmm. It feels more bad to lose $20 than it feels good to find $20. It's that loss aversion that we're like, Oh, I don't want to miss out on a good deal. I'd rather buy it. And even if I'm not getting as good a deal as I thought, maybe it's still not a bad deal, but I sure don't want to come back next week and find the price doubled. And I missed it. I can't believe we'd rather avoid that at all costs. And this plays out everywhere in our financial decisions.

[00:06:38] Well, I, I even got, I got an email the other day of a program that was doing a giveaway when you had to submit a form. So I was like, Oh, maybe this is like, it's like an application, maybe a scholarship kind of thing. And then I got an email a couple of days later saying you've been awarded a discount. And as I thought about it, I was like, that was just them gathering my info and then giving me the sale they were going to give me anyways. I was like, I was like, Oh man, did I just get scammed? But it was something that I was interested in. But those kinds of things where it's like, you've been awarded this discount. That is such a, like play on emotion.

[00:07:08] So I think, Oh, I won. But they're probably giving that discount to everyone who wants it because that's how they make money. They're not limiting it because that's just not going to make them the most money. So it's those sorts of things that once you start to notice them, I think really begins to unlock for you the realization that you're just being like we said earlier, toyed with, with all these different pricing strategies and things like that.

[00:07:29] A quick thought on that. This is dangerous for me to even throw this out because I'll throw it out and I'll say why it's dangerous. So I love to shop on wirecutter.com. Wirecutter is now owned by the New York times. It is a gear review website that covers everything from pots and pans and bed sheets to hiking shoes and computers and headphones. I mean, it just all your consumer goods you can usually find.

[00:07:51] And especially when you're looking for something where there's 50,000 options and you don't know what you don't know.

[00:07:59] And like I first did this with, I was looking for an external hard drive.

[00:08:03] Well, external hard drives, you can buy cheap or you can get like really expensive.

[00:08:08] And I didn't really know what I didn't know. So I went to the wire cutter and I learned in maybe five, 10 minutes of reading enough to know, okay, here's the type I want. Here's some of the basics.

[00:08:18] It's better to go with name brands, but I don't have to overspend links to all of these referred products that are good, that are reviewed.

[00:08:27] They're incentivized to be honest because if they're not and people buy stuff and it's bad, I mean, so like there's a natural incentive for them to take care of the consumer.

[00:08:36] But here's why it's dangerous for me to say that because what I just did is I gave you a hack.

[00:08:43] Well, hacks are the toss up of whether the hack is some actual solution or another scam, right?

[00:08:51] It would not be hard for the wire cutter to manipulate me because they've earned so much of my trust.

[00:08:56] Same with camel, camel, camel.

[00:08:58] So as soon as we start to put our trust in any of these particular entities, just like Amazon, people trust Amazon because I don't know why we do.

[00:09:06] And so as soon as I give a recommendation of like, oh, you should do this to outsmart the system.

[00:09:11] Just know the system is probably going to catch up with you eventually.

[00:09:14] That's true.

[00:09:15] One of the earliest instances of the system catching up with people is I can't remember what book it's from, but the story of target using data to know when people were pregnant and deliver them ads.

[00:09:25] That was one of the first instances of large data being used against consumers.

[00:09:30] You might build up this trust with your local target and then data comes into play and these computer are able to process it so quickly.

[00:09:37] One of the things that I'm afraid of that I think it's out there, but maybe it's not out there as much as, and maybe this is me being naive to be hopeful, but like dynamic pricing is a thing where you see a different price than someone else sees because they have info on how much money you make a year.

[00:09:52] And they know you'll spend 50 cents more on this item.

[00:09:55] That is wild to me.

[00:09:57] It's not hard to do.

[00:09:59] It's totally possible.

[00:09:59] No, it's not hard to do.

[00:10:00] It's possible.

[00:10:01] It's easy.

[00:10:02] You can get geo-based income data.

[00:10:05] People know my zip code online based on a thousand other data points about me.

[00:10:10] Sure.

[00:10:10] You can get all that.

[00:10:11] You can incorporate it and then poof dynamic pricing for me.

[00:10:14] Yeah.

[00:10:15] So your price could be completely different than your friend down the street.

[00:10:18] That's crazy to me because that's where I think the spending to save can be so dangerous because they know you'll pay a little bit more.

[00:10:25] So maybe they show you a sale that's slightly different, but in all in all, it's going to cost you more than anything else.

[00:10:30] But should people look for these opportunities because they do exist like BOGOs and buy three, get three, things like that.

[00:10:36] Are they all bad?

[00:10:37] Should people still be looking at these if they need to buy something or should we just kind of avoid them all together and get just what we need?

[00:10:44] They're all bad, Skylar.

[00:10:45] Avoid them all.

[00:10:46] No, I'm just kidding.

[00:10:47] So it's a great question.

[00:10:48] And I'm glad you teed that up.

[00:10:49] I think we should approach this.

[00:10:52] A couple of things to keep in mind.

[00:10:53] I would approach it kind of like couponing, right?

[00:10:55] The classic advice about couponing is only buy the things you actually need, right?

[00:11:00] Who cares if you got 50 bars of soap for 10 cents a piece if it's a soap that gives you hives when you wash with it, right?

[00:11:08] Who cares that you got a good deal on it?

[00:11:09] Yeah, exactly.

[00:11:10] So there are instances where it makes sense to spend a little more, to get a better product, to get the level of service you need, to get more of something at a lower per unit cost that you know you'll use.

[00:11:27] So kind of an easy example here is let's say that I could buy a t-shirt every month.

[00:11:34] Let's say it's pretty poor quality and only lasts me a month and it costs me $10.

[00:11:38] So I could buy $10 t-shirts every month.

[00:11:41] That's $120 every year in t-shirts and they all wear up at the end of the month, okay?

[00:11:45] Or I could buy one nice t-shirt for $80.

[00:11:49] Well, pretty simple math.

[00:11:50] And I think this is the math we all try to do in our heads.

[00:11:52] That will go ahead and buy the $80 shirt.

[00:11:57] Unless you don't like the $80 shirt as much as the $10 shirts.

[00:12:01] And if you're not going to wear it as much and then you're just going to buy the $10 shirt anyway, then you shouldn't be weighing.

[00:12:06] So like we can talk ourselves into a purchase because it's a spaving decision, right?

[00:12:12] That term you coined.

[00:12:15] Or because we feel like it's the right decision.

[00:12:18] We should always seek to minimize our spending.

[00:12:21] Not necessarily.

[00:12:22] So it depends.

[00:12:23] Another classic, and I see this a lot with, so like I said, I work with a lot of business owners and the ones that are tired from putting out those financial fires.

[00:12:30] Often a big source of headaches is their relationship with their CPA.

[00:12:34] Okay.

[00:12:37] So for an individual, you know, simple tax return situation, you can usually get your taxes done for a few hundred bucks.

[00:12:45] If you open a business, you should double or triple that.

[00:12:48] So maybe it's $800 to $1,000.

[00:12:50] If you have a bigger business, maybe it's $1,500.

[00:12:53] But once you grow to a level of complexity that you need more tax planning, and that's where a lot of my clients get to.

[00:13:02] It's like, I need to talk to my CPA every three months because I've got a question for them, but they're slow to answer my calls.

[00:13:08] They don't return my emails.

[00:13:09] You get this much level of service because you're paying them this much.

[00:13:13] And they're like, well, I'm paying them $1,500.

[00:13:15] I'm like, that's nothing for a CPA.

[00:13:18] They're rubber stamping your return and moving on with life.

[00:13:22] They may like you, but you need to pay more to get more because you need more.

[00:13:26] Ultimately, that will give you a good return because taxes are a huge tail on the proverbial dog.

[00:13:34] But for a lot of people, that $1,500 tax return you think you're saving money on is really costing you a lot more because you're paying a lot more in taxes that you shouldn't be paying because your CPA doesn't have time to give you the attention you need.

[00:13:46] That's a fantastic illustration of how sometimes you need to spend a little bit more to get the quality that you actually need.

[00:13:54] I think that's a great way to put that.

[00:13:56] Let's move on to talking about intentional spending and how it can be good.

[00:14:00] What is something you enjoy spending on?

[00:14:02] And then let's talk about how you can be intentional about that.

[00:14:05] I enjoy spending on dates with my wife.

[00:14:07] Probably a good one for your long-term happiness.

[00:14:10] My wife, she is a classic saver.

[00:14:13] And so whenever – and we go out on dates relatively infrequently.

[00:14:19] I mean, we're talking probably every three months or so.

[00:14:23] We have four kids.

[00:14:24] Honestly, for most of our special times together, just kind of at the end of the day catching up.

[00:14:28] But when we do get to go out to dinner, I try to not say no to whatever she's feeling that day, whether it's something more fancy or further drive away or whether it's like, hey, let's get some food and dessert.

[00:14:39] No, let's go in this – let's walk around and buy something nice for her to wear.

[00:14:44] It's not spending a lot, but it can be $100 or $120 a night.

[00:14:48] And again, that's not a lot.

[00:14:50] Hear me.

[00:14:50] But that's something that we don't spend $100 every day.

[00:14:54] You know?

[00:14:55] Yeah.

[00:14:55] But that's an intentional way I like to spend on her because she wouldn't do it on herself.

[00:14:59] How did you identify that?

[00:15:01] What clicked for you that said, that's my intentional spending that I want to make sure it gets done?

[00:15:05] Well, first off, if you don't have a budget, that's really key.

[00:15:08] You've got to have a way you give every single dollar a job that comes into your family and into your household income pool.

[00:15:16] I prefer to a budget as having a money fight before you've spent the money.

[00:15:20] Yes.

[00:15:21] No, that's a great way to put it.

[00:15:22] You challenge each other on what are we going to use this for instead of saying, why did we use it for this?

[00:15:27] Yeah.

[00:15:27] And why did you spend – so before it's a fight, have the fight, and then it won't be a fight.

[00:15:31] If you give every dollar a job, when we go through our budget, it was about us putting a dollar amount in the dates category and saying, this matters to us.

[00:15:40] We want to spend money here.

[00:15:42] Another thing is on our kids.

[00:15:43] Our kids are young, and so we could easily spend money on stuff for them.

[00:15:49] But we actually really try to curb that.

[00:15:51] We would rather invest in experiences for them.

[00:15:53] Putting them in a nice school where they'll meet great folks and make great friends and get a solid biblical foundation in their education matters a lot to us, which is why we're investing in that.

[00:16:03] Letting my son play baseball.

[00:16:04] He's six.

[00:16:05] He loves it.

[00:16:06] It's just the rec league.

[00:16:07] It's nothing crazy.

[00:16:08] It's not like travel ball or anything.

[00:16:10] Man, seeing his face when he hits that ball.

[00:16:13] It's worth every dollar you're spending on it.

[00:16:15] The money doesn't matter.

[00:16:17] It could be triple what we're spending on it, and it would still be worth it.

[00:16:20] And we're getting it out in the community and meeting people.

[00:16:22] That's an experience that we'll never miss that money.

[00:16:26] To answer your question, Scott, it was about prioritizing.

[00:16:29] It's the same thing I do with my clients.

[00:16:30] Let's first have a conversation about your values before we talk about your money, because what's most important to you if it's experiences, travel, and making memories, that's going to dictate a lot of what we do in your financial plan.

[00:16:43] Yeah, that's a great way to put it.

[00:16:45] How do people identify this good spending for them?

[00:16:47] How do you start that values conversation?

[00:16:49] If someone were to come to you and say, I am spending money like crazy.

[00:16:52] I don't know where it's going.

[00:16:53] I'm not sure what it's doing.

[00:16:55] Where do you start to help identify what spending is actually good?

[00:16:57] Somebody comes to me and they're like, I don't know where my money is going.

[00:17:00] We go back to the budget conversation.

[00:17:02] And you can pull three, six months of your spending history if you have decent spreadsheet skills.

[00:17:06] You can figure out pretty easily nowadays where your money went.

[00:17:09] There's a lot of really great apps out there that you can download and connect to your bank accounts through some secure platform.

[00:17:15] And you can figure out where your money went.

[00:17:17] To answer your real question of where do you start with the values conversation, I walk my clients through a values exercise where we've got a list of about 100 words.

[00:17:27] And they go through and they circle the ones that matter most to them.

[00:17:33] That's a really helpful process if you've never been through something like that to try to put words to your values.

[00:17:41] A lot of people, especially younger folks, don't know what our values are in terms of our finances.

[00:17:46] We're in the accumulation phase of life where when money comes in, it goes right back out.

[00:17:50] We've got a lot to spend money on, like food, housing, clothes, and kids.

[00:17:54] And we don't have a ton of discretionary income.

[00:17:56] So usually you don't see the values as much until you get into the discretionary.

[00:18:00] But there's still a lot of really good identifying that can happen there.

[00:18:03] Honestly, by looking at where you spent your money, you can be surprised at what's actually most important in your spending habits.

[00:18:09] Yeah, it can come out pretty obviously.

[00:18:11] And that's one of the things I like to tell people is that you can't figure out what to do with your money if you don't know where it's actually going.

[00:18:16] Before budgeting, you need to track.

[00:18:18] Make sure you know where your money is coming from and where it's going.

[00:18:21] Most credit unions, honestly, have in their app, they have a tool built in where you can connect other accounts or if you use their debit card.

[00:18:28] And it automatically categorizes it based off those merchant codes.

[00:18:31] Even before you have to do all the detailing of, oh, this was this category, the kind of stuff that scares people with a budget when you have to outline every expense.

[00:18:39] It'll automatically show you based off those merchant codes that the cards use a quick glance at your categories.

[00:18:46] And most of the times I think people are going to find that they spend way more eating out than they think.

[00:18:50] They're going to find they spend way more on gas than they think.

[00:18:53] Things like that that just kind of creep up.

[00:18:55] And then once you realize that it's so much easier to scale it back because you can just say, oh, I don't actually value that that much as high as it was being put in the percentages in those auto categories.

[00:19:06] So that's my suggestion.

[00:19:08] Absolutely.

[00:19:09] Look at it.

[00:19:09] It really helps people just get an understanding of what their money is actually doing.

[00:19:14] Man, awareness has to be, I don't know what the statistic is here, but let's just say awareness is 90% of the way there.

[00:19:19] Right.

[00:19:20] If you can just become aware of whatever problem you're trying to solve, your brain will start to work out the solutions.

[00:19:29] There's an idea called an invisible hand.

[00:19:31] Once you start to look at those numbers, there's this thing that starts working in your mind.

[00:19:35] The conversation I always hear is tracking your net worth, just tracking the data.

[00:19:38] You'll naturally start making decisions.

[00:19:41] That's going to move that in the right direction.

[00:19:42] My old boss used to say, whatever's measured is monitored.

[00:19:46] The point is like, whatever you're tracking and whatever you pay attention to, it's getting attention.

[00:19:51] Right.

[00:19:51] And just by tracking it, you'll start to address any bad trends or problems you see.

[00:19:55] Yeah.

[00:19:56] So now that people, they've been listening to us, they're starting to think through some of their values.

[00:20:01] What's the power behind them identifying the places that they want to spend money?

[00:20:04] Like, how does it bring purpose and power into your life to spend money intentionally?

[00:20:10] Yeah, that's a great question.

[00:20:13] Money is a tool.

[00:20:15] A lot of people think that money is the destination.

[00:20:21] Money is more like the gas in the tank of the car that you're driving to the destination.

[00:20:28] The money is just a tool.

[00:20:30] And so when you recognize where your money is and where it's going, and then you really wrestle with what's actually most important to you,

[00:20:40] now you can leverage the tool that God's given you to make an impact in the places that matter to you.

[00:20:48] So whether that's investing in your kids, whether that's investing in your church, when you clarify your values, a lot of the fog of life will lift.

[00:20:58] And you can then start really making the change that makes you sleep better at night.

[00:21:03] It gets you out of bed in the morning.

[00:21:04] I like what you said there about once you start to clarify it, the fog will lift.

[00:21:08] And I think so many people have that fog around their finances that they just feel like they can't get out of.

[00:21:13] How can even like saying like giving money away, spending money, like not keeping money for ourselves, in what ways can being intentional about that help curb the spending that isn't good for us?

[00:21:24] How does that fog begin to lift?

[00:21:26] Oh man.

[00:21:27] I mean, that's as easy as just saying that you have a goal, go get it.

[00:21:32] Once you clarify your financial situation and where you actually want to go, all of your competitive like umption will kick in because you want to see that goal happen.

[00:21:42] You want to hit it.

[00:21:43] I heard a story of a young couple making about $85,000 a year.

[00:21:47] This was maybe 20 years ago.

[00:21:48] So it was decent money, solid middle-class income 20 years ago.

[00:21:52] Yeah.

[00:21:52] And these folks wanted to, they're meeting with a financial advisor and they were talking about retirement savings.

[00:21:59] And the advisor kind of flipped the conversation on its head and he said, I'm going to throw out a goal idea for you guys.

[00:22:05] And these were some sweet Christian folks.

[00:22:06] I want to throw out a goal that you guys can give a million dollars away in your lifetimes.

[00:22:13] That's a big number.

[00:22:15] Even 20 years ago.

[00:22:15] Well, if you ran the math on their current giving, it was supposed to take them like a hundred years to get there.

[00:22:21] Yeah.

[00:22:22] And 25 years later, they called the guy back and said, do we hit it?

[00:22:25] We passed it.

[00:22:26] And it didn't take a hundred years.

[00:22:28] But once you set your sights up, what you get clarity and drive and excitement and you're like, we can do this.

[00:22:34] And then it's off to the races.

[00:22:36] Yeah.

[00:22:37] I love that.

[00:22:38] And that competitive fire within you starts working.

[00:22:40] Like you said, you have that target and things will just naturally start lining up for you in your life too.

[00:22:45] Like you said about that giving one.

[00:22:47] I'm sure there was times in their life where they're like, how are we giving so much money away?

[00:22:51] Right.

[00:22:51] Like, I'm sure that happened.

[00:22:53] Yeah.

[00:22:53] How are we living when we're giving this much away?

[00:22:56] And yeah.

[00:22:57] Well, I got another story for you.

[00:22:58] So this is my brother-in-law.

[00:22:59] He and my sister, when they got married, they had about a hundred thousand dollars in debt.

[00:23:03] It was my sister's student loans.

[00:23:05] She went to nursery school and got a great education, but came out with a solid amount of debt from it.

[00:23:10] God gave them a vision and a desire to be debt-free by the end of that calendar year, which is like 10 and a half months away.

[00:23:16] We didn't have to, you didn't really have to look at too many numbers to figure out like they were probably going to make a hundred thousand dollars combined that year.

[00:23:24] There's no way they were going to pay all of that debt off.

[00:23:28] And one tiny step after another, they got a little bit of inheritance money, a little bonus at work, a little of this, a little of that.

[00:23:34] They had that debt paid off by the end of the year.

[00:23:36] But the psychology of that, it was a super cool story.

[00:23:40] I way oversimplified it, but the psychology though, and this is people bicker online all the time about the payoff strategies.

[00:23:47] And Dave Ramsey kind of gets, you know, people love to pick on Dave because of his more simplified standardized advice.

[00:23:56] The whole point behind the debt snowball is that there's something that just clicks in your brain when you pay off a debt.

[00:24:03] It doesn't matter if it was the highest interest or if it was, you know, the largest or the most quickly accruing.

[00:24:10] The point is you paid something off and that's really exciting.

[00:24:12] When you pay off one thing and then roll that payment into the next, you pay that one off quicker.

[00:24:17] And then the next one, and then it grows and it's a snowball.

[00:24:21] That's the whole point.

[00:24:22] But like what it does in the fire, it gives you an excitement.

[00:24:25] When you can apply that same concept toward, you know, intentional spending, toward giving, toward debt, toward whatever your financial kind of target is.

[00:24:35] Magic works.

[00:24:36] It just does.

[00:24:37] Yeah.

[00:24:37] Yeah.

[00:24:37] That's fantastic.

[00:24:38] I love both of those stories.

[00:24:40] I love that momentum that you get to build when you start to identify those and you start to drive towards it.

[00:24:45] But let's maybe, as we come to the final minutes of this interview, let's talk about maybe some ways people can take a step back and potentially reset or get a hold on their spending.

[00:24:55] One of the things I've done with my wife multiple times and we like to do is no spend weeks where we'll commit a week where we say, okay, we can only get groceries if something runs out that we haven't gotten in a while.

[00:25:05] We identify a few things that we can still get, but those are absolute needs.

[00:25:08] But we have no spend weeks where we say we can't order anything on Amazon.

[00:25:12] We can't go get soda from the gas station or anything like that.

[00:25:15] And those are super helpful and it can be a good reset for us when we feel like we're getting out of hand.

[00:25:21] Have you ever done some sort of purposeful step back from spending to reevaluate it?

[00:25:25] Yes, absolutely.

[00:25:27] Thanks to my wife because when we got married, I was and I still am an avid Costco fan.

[00:25:35] Are you buying everything in bulk even if you don't need it?

[00:25:38] Not that bad, but Costco is one of those places that's really easy to spave, as you're saying.

[00:25:48] They have generally really great prices on a lot of things.

[00:25:52] And at the beginning of the conversation, I was talking about that per unit cost being lower and you buy more because you can use it.

[00:25:58] I actually did a podcast episode on my podcast about this principle called Parkinson's Law.

[00:26:03] And it's this fascinating kind of like behavioral bias that there's a couple of ways you can say, but basically it's that the demand will expand to match the supply.

[00:26:16] If you have a huge jug of peanut butter in your pantry, you will be much more generous slathering peanut butter on your sandwich than if you have a tiny bit left in the jar.

[00:26:29] Yeah, those little bit of toothpaste last me forever.

[00:26:32] Right?

[00:26:34] That's the silly example I gave on that podcast episode that like, you know, you get a fresh tube, you squeeze it out.

[00:26:40] Who cares if half of it falls into the sink?

[00:26:42] You just squeeze some more.

[00:26:43] But the way we can stretch that last tiny little bit of toothpaste, that's the same concept though with your money.

[00:26:48] If you had a no spend week and you knew that you had to live on $100 for the rest of the month and you had three weeks left, you'd get really creative on how to survive on just $100 because the demand will expand to match the supply.

[00:27:03] Okay. So this is why I tell people, I've got a client right now I'm working on implementing this framework with, instead of automating your savings, which is a great plan, I would suggest more let's put all the money here in your savings account and automate your spending into the checking account for you to spend.

[00:27:25] Everything that goes into the checking account will just disappear.

[00:27:27] Let's put everything into the savings account and then we'll just monthly transfer your living expenses.

[00:27:33] And, you know, sure.

[00:27:35] If something comes up, if there's a big purchase, if you need whatever.

[00:27:38] Talk about it.

[00:27:39] Yeah.

[00:27:39] It's your money.

[00:27:41] Do whatever you want with it.

[00:27:41] But that way, instead of spending by default, because it's in the checking account, you're saving by default because you're not seeing it.

[00:27:49] That's such a great way to flip it because so often we hear pay ourselves first.

[00:27:52] The biggest way to do it is just put everything in savings and then pay yourself by letting yourself spend whatever you want to.

[00:27:58] It's kind of an anti-budget approach as well, where you say, here's the money you have and you are allowed to spend all of it on whatever you want.

[00:28:05] But you know that the rest of your systems are set up in the back working for you.

[00:28:09] I like that kind of flip on it to take a pause and give yourself some money to spend.

[00:28:13] Constrain it.

[00:28:13] I really like the idea of that Parkinson's law you shared.

[00:28:16] That's something I'm going to have to tell a lot more people about because that really makes sense in my mind, especially that toothpaste example is a perfect one.

[00:28:23] If you buy the big jars, the cost per unit is lower, but maybe you're using more units with each time you try to use it and it's probably equaling out.

[00:28:29] So this was a great reset for us in our grocery budget because I would go to Costco and I would spend a week's worth of grocery money in one trip on four or five items that would give my wife some anxiety.

[00:28:39] I'd come home and I'd be like, but honey, look at all of the Nutella that I bought.

[00:28:44] You know, we're going to use it.

[00:28:46] The whole box of it.

[00:28:47] It's, you know, I got, look at all of the, you know, chocolate covered raisins or whatever.

[00:28:51] And it's like, we're going to enjoy it.

[00:28:52] She's like, yeah, but it was $15 and $15 could have gotten these four or five other things instead.

[00:28:58] But so the reset for me was to just stop going to Costco and instead focus on getting fewer units at perhaps a higher cost because you'll be more careful with the use of those.

[00:29:10] But yeah, you know, there's something psychological about seeing an abundance of something that triggers that, well, I don't have to be careful here mentality.

[00:29:17] In some cases that's wonderful.

[00:29:19] And you should embrace that.

[00:29:21] I have to coach people in this a lot too.

[00:29:23] I'm sure you do as well.

[00:29:24] Do you ever have to like tell people to spend their money because there's such a saver and a hoarder and they're scared to spend it?

[00:29:29] I've had to learn that myself where it's like, hey, we can go get ice cream.

[00:29:32] We have enough money to go and get ice cream one night and that's okay.

[00:29:35] I've had to learn that myself too.

[00:29:36] Well, so whether it's ice cream or whether it's a vacation or whether it's something even more than that, sometimes you have to let go of the tight grip and relax into, okay, I've saved.

[00:29:47] I'm being responsible and I'm going to enjoy this ice cream cone.

[00:29:51] I'm going to enjoy spending a little more on a vacation for the experience with my family.

[00:29:55] Like I have to spend half my time telling people who are good hard earners and savers to actually go and enjoy the money that they're making.

[00:30:03] Well, and that's understanding those values and finding that intentional spending can be a huge piece for that because like everyone on my podcast has heard this before, but we went to Hawaii a couple months ago.

[00:30:12] And that was an instance of we had saved and saved and saved for this.

[00:30:16] We're good at saving.

[00:30:17] And then it was time to spend it.

[00:30:18] And we spent a lot of money, but we had the time of our lives just doing whatever we wanted to do.

[00:30:23] We weren't worried about it because we knew in the background that we had given ourselves that freedom to spend on something we value.

[00:30:28] So I love that.

[00:30:30] That's a great way to spend intentionally, identify it, and then spend on it.

[00:30:34] That's a great place to leave it.

[00:30:35] Fantastic.

[00:30:37] Well, this has been a great interview.

[00:30:38] I've learned a lot from you, Nick.

[00:30:40] Thank you for coming on.

[00:30:41] As we're wrapping up, people are probably wondering where they can find you.

[00:30:44] How do they learn more?

[00:30:45] Maybe tell them a little bit more about that.

[00:30:46] Where can people find you?

[00:30:48] Well, Scott, thanks for having me.

[00:30:49] It's been a pleasure.

[00:30:50] I've really enjoyed getting to know you and being on your show.

[00:30:53] So you can find me, Nick Garofalo, on the different social platforms.

[00:30:56] Or just go straight to openhandedwealth.com.

[00:31:00] And you can schedule a call, email me, give me a shout.

[00:31:03] I'd love to connect.

[00:31:05] Fantastic.

[00:31:05] And then if you could go back in time, tell yourself some sort of tip or trick about spending, what would it be?

[00:31:11] Invest it all in Apple.

[00:31:12] Yeah, that's the easy one.

[00:31:14] You got to give me something a little more than that.

[00:31:16] Of course, if you go back in time, we'll invest it.

[00:31:19] That's a really great question.

[00:31:21] I'd probably say you're not going to miss spending on memories.

[00:31:28] That was some advice I got eight and a half years ago.

[00:31:33] We went on a trip.

[00:31:35] My wife and I, right before we had our first child.

[00:31:39] And a mentor of mine at the time, he said, Nick, I know it sounds like a lot of money, but spend the money and enjoy the trip because you will.

[00:31:48] You'll probably never get this chance again like this.

[00:31:51] Yeah.

[00:31:52] Yep.

[00:31:52] And that was good advice.

[00:31:54] Yeah.

[00:31:54] We made memories.

[00:31:55] We made memories.

[00:31:56] We made memories.

[00:31:56] I mentioned.

[00:31:56] I think about it all the time.

[00:31:57] It's still fresh for us, but I'm sure you think about that opportunity, that memory much more than you would think about those dollars ever.

[00:32:04] Absolutely.

[00:32:05] That's a fantastic place to leave it.

[00:32:06] You're going to remember the memories a lot more than you're going to remember the money, no matter how much compound interest it makes.

[00:32:11] Nick, this has been a fantastic episode.

[00:32:14] Thank you so much for joining.

[00:32:15] Thanks for having me, Skylar.

[00:32:26] Thank you so much to Nick for that fantastic interview.

[00:32:28] Let's dive right in here to the first money talking point.

[00:32:31] Have you ever spaved?

[00:32:33] I know I have.

[00:32:34] I love taking advantage of BOGO deals.

[00:32:36] My wife and I do this a lot with something like Subway.

[00:32:38] They often offer buy one, get one free or buy one, get one half off.

[00:32:42] And these are good to keep an eye out for.

[00:32:44] They can come in handy, but you got to make sure you're already intentionally planning to buy multiple.

[00:32:49] That's the thing we're always looking for.

[00:32:50] I'm not saying, oh, I'm going to go get Subway, so I should just get two sandwiches instead.

[00:32:54] No, that's going to make me fat.

[00:32:55] I don't want to do that.

[00:32:56] The key thing is to make sure you know it's going to be beneficial.

[00:32:59] Look for it when you know you can use it.

[00:33:02] Don't succumb to BOGO when it's presented to you.

[00:33:05] You have to search them out.

[00:33:06] That's my general rule of thumb.

[00:33:08] And that would be my tip to you.

[00:33:09] Make sure you're searching them out instead of allowing them to control your spending.

[00:33:13] Marketing and sales departments are very good at crafting sales that appeal to people's interests

[00:33:18] and make it appear like a good deal when they weren't even really planning to buy things in the first place.

[00:33:23] A 24-hour rule is a great thing to implement here when you're tempted by an unsolicited spaving deal.

[00:33:29] So the next time you see a deal that you weren't planning on purchasing, give it 24 hours.

[00:33:33] And if the deal's gone within that 24 hours, you don't need it.

[00:33:35] The odds are very high that you're going to forget about it and not even need to purchase the thing.

[00:33:40] And you won't even really want to go back to the store just for a spaving deal.

[00:33:43] You're not going to want to worry about it.

[00:33:45] So implement a 24-hour rule.

[00:33:46] It can be very helpful.

[00:33:48] But that wraps up the first money talking point.

[00:33:50] The second one is, how can a no-spend week help me?

[00:33:53] Well, let's start by defining what is a no-spend week.

[00:33:56] It's committing to not spend any money for an entire week.

[00:33:59] You've maybe heard some crazy people do this for a no-spend month, which can be very interesting.

[00:34:03] My wife and I have never tried that.

[00:34:05] Maybe we should.

[00:34:05] But it's committing to not spend any money for a specific period of time.

[00:34:09] Of course, there are necessities that you may still need to spend on.

[00:34:12] Transportation, groceries, living expenses, rent, just to name a few.

[00:34:16] But it will stop you from spending places like Amazon or shopping online.

[00:34:20] It keeps you from buying impulse items at the store and will ultimately save you a great deal of money and space when you think about all the junk you don't buy that you don't really need.

[00:34:29] How does it help my wife and I?

[00:34:30] Well, it helps us because we like to implement this when we feel like our spending has gotten out of control.

[00:34:34] We'll bring it up and set a specific time period where we can't spend, except for the required categories.

[00:34:40] And it really helps realign our priorities and curb unnecessary spending.

[00:34:44] How can it help you?

[00:34:45] Well, figure out what you really value.

[00:34:47] It can really help with that really quickly.

[00:34:49] You'll recognize that many of the purchases you make don't bring you that true value that you're beginning to understand.

[00:34:54] And you'll be thankful that you didn't purchase most of the things that the no-spend week stopped you from buying.

[00:34:59] And you can always buy something after the no-spend week.

[00:35:02] Perhaps you did identify something that you do need and it's not one of the required categories.

[00:35:07] Wait till the no-spend week is over and then you can purchase it.

[00:35:10] It'll feel liberating to exercise that self-control and be like,

[00:35:13] Wow, I actually waited five days before purchasing this thing and the world didn't end.

[00:35:18] No-spend weeks can be extremely liberating because they give you a sense of self-control over your finances.

[00:35:23] So honestly, give it a try and then shoot me an email of how it worked for you.

[00:35:26] The third money talking point is what is something I enjoy purchasing intentionally?

[00:35:30] For my wife and I, it's travel, which I know sounds obvious and cliche because it's one a lot of people say, but it's true.

[00:35:37] Thinking back to our Hawaii or Tampa trip that we took, I don't remember how much money we spent, but it was so worth it.

[00:35:43] We had a blast being able to go spontaneously to Disney World.

[00:35:46] And we had such a great time in Hawaii that I don't remember or care how much money we spent there.

[00:35:51] What's something you'd like to spend on intentionally?

[00:35:54] Is it travel, cars, bikes, food, eating out, your children, your pets, your technology?

[00:35:57] Because there are so many things we can spend our money on.

[00:36:00] And it's important to identify what you enjoy intentionally spending on because it can save you a lot of headache when you do spend on that item because you know you enjoy it and it's intentional.

[00:36:09] And it's also going to make it so much easier to eliminate other forms of spending that don't bring you true joy and happiness.

[00:36:16] Because when you say, I do like to spend on this one thing, the others are so much easier to get rid of.

[00:36:20] And I found four tips online to help do better with spending that came from the RightPack Credit Union.

[00:36:25] And I'll link this article in the show notes.

[00:36:27] But the four tips are track your expenses, look for expenses to adjust, reduce, or eliminate, give your money a purpose, and stay flexible.

[00:36:33] I love telling people to track your expenses because it's going to make things automatically click for you when it comes to figuring out what you don't like spending on.

[00:36:42] So make sure you're tracking your expenses so that everything else can begin to automatically fall into place for you.

[00:36:47] But that does it for today's episode.

[00:36:49] Thank you so much for listening and thank you to Nick for being today's money buddy and for that great interview.

[00:36:53] In today's episode, we explored the concept of spaving or spending to save and how companies use deals like BOGO and pricing strategies to encourage us to spend more than we intend.

[00:37:03] I shared some personal tips about intentional spending and the 24-hour rule that can help you avoid impulse purchases.

[00:37:11] Nick brought some incredible insights into the psychology behind these marketing tactics and how we can outsmart them.

[00:37:16] We discussed why people often feel good about saving even though it meant spending more, when it's actually worth investing in higher cost options for better value sometimes.

[00:37:24] The key takeaway, know your needs and align your spending with your values, and don't let clever advertising dictate your decisions.

[00:37:29] We also explored the power of intentional spending, focusing on what truly aligns with your priorities and brings joy.

[00:37:36] For me, travel tops the list.

[00:37:38] Creating experience that my wife and I cherish for a lifetime is priceless.

[00:37:41] By identifying what you love to spend money on, you don't have to cut back on purchases that you truly enjoy and that bring real value to your life.

[00:37:47] Finally, we talked about no spend weeks, a practice that helps me and my wife recalibrate and curb unnecessary spending.

[00:37:53] If you're feeling overwhelmed by your expenses, try it out.

[00:37:56] It's amazing how much clarity and control you'll gain.

[00:37:58] But thank you for listening to today's episode.

[00:38:00] The best way to stay up to date and connected with all things Money Talk is to sign up for my email list.

[00:38:05] Head over to moneystalkwithskylarfleming.com and submit your name and email right there on the homepage.

[00:38:09] You can also use the contact page on my website to send me any questions or crazy money stories you might have.

[00:38:14] Remember, the best way to learn from today's episode is to go and have a Money Talk about today's topic.

[00:38:18] Thank you for listening to this week's episode of Money Talk with Skylar Fleming.

[00:38:21] I'm your host, Skylar Fleming. Have a great week.

[00:38:23] Thank you for listening to Money Talk with Skylar Fleming.

[00:38:26] This show is provided for informational and entertainment purposes and may not be specific to your unique situation.

[00:38:32] Please be sure to do additional research before making any financial decisions.