Building a Guilt Free Budget | Listener Intervention

I feel like it needs to be doing better. It's seem like I'm behind today. I'm talking to Kate She has some good money habits, but she wants to know specifically what she should be doing now to better set herself up to reach her money goals

“I think I do best when I have a goal but every time like I say goal like that goal just keeps moving further and further and further away”

Your first 100k saved is the hardest But that is actually the level where compounding gets very exciting with the high yield savings count I really want to build this out. I'm working with so far because I've truly truly legit love theirs Every dollar is maximized up to eight times the national average savings rate with eligible direct deposit So that means every dollar is working smarter is the common overtime to look at a certain stock and

Just go all in on that. I

Never say go all in on a single stock. It's just yeah, too risky. What's great about index funds or ETFs is that it's a basket of a bunch of different stocks all with one purchase

I feel like it money in finance of pleasant ever ending game I want to be able to have at the end of the month end and still feel like I have a cushion underneath me What would you say is your biggest financial problem right now? I would say I'm Nicole Lathen the only financial expert you don't need a dictionary to understand It's time for some money really

You guys I'm so excited. I'm about to do one of my most favorite things which is talking to a money rehabber who has a wealth Question and today I'm talking to Kate and as you'll hear she wanted to talk to me about leveling up her finances You know what my DMs are full of people asking the very same thing and I love this question. Okay, to be honest I love all money questions, but this truly is one of my most favorites. We work so hard for our money

“I think we need to make sure that it is returning the favor and no matter where we are on our financial”

Turnings, there is always something we can do to take us one step further. Kate knows she has some good money habits

But she wants to know specifically what she should be doing now to better set herself up to reach her money goals like being a better investor And perhaps most of all she wants to know what she doesn't know don't well We dig into that and a lot more so let's get into it. All right, Kate welcome to money rehab Yeah, thank you. Thank you so much for having me. I love that you're here and I love that you have some Money questions about leveling up your finances like

Once you have an emergency fund now what right do you mind if I ask you how we'll do or yeah No from I'm 22 first of all to be 22 amazing I have to give you mad frogs because I would probably give anything to go back in time and tell my 20 to your old self To have your financial mindsets. You are already killing in the game. That's so great to hear I feel like it's each day. It's like something new. I feel like I'm so overwhelmed by just everything being out there and

Like news outlets social media just being so involved in my 20s so it's like To be here today and just ask some questions. It's really what I need to Here and it's nice to hear that I I'm not behind and I'm only 22 You're only 22 you have so much time and and we can talk about how time really factors into Compounding in for us, which is the most beautiful force in all of finance. So help me get a sense

To whatever extent you're comfortable with what's coming in and what's going out right now

Yeah, so I started my first real job about six months ago and really before then I never

Had Much everything I made I spent right away. There was no retirement funds. There was nothing like that. It was working at an ice cream shop, which I deeply miss now I'm just trying to save for retirement with my paycheck that comes every two weeks Have enough for savings, have enough for my needs of groceries and then try to do some fun stuff in there too

“Approximately how much is coming in approximately how much are you spending?”

Yeah, so I spend about 3,000 a month That's between everything of like rent and then I take in about 4500 a month and then where is the 1500 going? Missillaneous because I try to Come up with a budget and it's very much loose numbers because

Walking by a store that looks really nice or

My energy bill was really high this month because it's really hot and all the air conditioning and I'm like well Thank God that I plan for that because it was triple last month. So little things like that I kind of like count for But also I have 10% of my Income going into a high yield savings count and then I also have

some student loans so I'm paying off Those about 400 a month and then another 100 is going towards I just started doing this

100 towards a brokerage account and a Roth. I love that we 100 in each

Yes, or 100 altogether each yeah Awesome, so you Subitween the high yield savings account

“The loans so it sounds like you have student loans or do you have any other kind of debt?”

No, just the student loans and that payment The 100 for the Roth the 100 for the brokerage you're at 10 50 and so you really have like the cushion is about 450 for that energy bill the

random retail therapy Anything else that might come up yeah and you have this debt repayment plan that's pretty consistent you feel like it's manageable Yeah, I feel like it's manageable right now I'm lucky that I don't have a high interest rate on it. I think it's about 4.9 and Since it's not a really high interest rate. I'm like I don't want to do anything outrageous of like paying it off of just doing

like an outrageous amount just because it's high interest. So I feel like it's manageable yes

“Okay, and how is the savings account and the Roth retirement that's dead going?”

They're going with the high yield savings account. I I really want to build this up build up the high yield savings account. I started from zero like I didn't have any other prior savings. So I feel like that's very slow for me where I'm like okay like I look at it and I'm like okay It hasn't moved and I got an interest payment of 67 cents. So that's I'm like a but for me honestly I'm I'm a big spender like anytime it hits my account

I'm just like I want to spend this. So for me it's honestly more or less like having a place where I can just park my money and I know when my brain like I'm not touching that like there's nothing that comes in my way unless it is literally an emergency then I will touch that money. So that's the high yield savings account. The Roth and the brokerage have been a challenge and I think I'm definitely one who learns their experiences and this is one of them and it's just from the

start of it of like I went into the an app and I'm like why can't I just buy it? Like no you

“need the cash, you need the cash and the accounts that's how things work. So just little things like”

that of just understanding I know that I want to consistently do this and I know it's going to be trial and error but like what's a buy and like which account does it does it need do I buy certain things in the brokerage where's the Roth? So little things like that are I'm starting to think about more and now that I know how to actually buy something. Yeah I mean a lot of people what I see happen is that they fund those accounts but they don't actually put that money to work. So they

put the hundred dollars in the Roth but then they leave it just in the vehicle. So the Roth doesn't actually do anything you have to tell it what to do. It's just like a wrapper basically for the retirement account and then the brokerage is the same thing if you transfer money into that brokerage but you don't actually tell it what to do you have an invested yet. That's crazy that I like wouldn't that that would be the hardest thing to know about this. Like I've known what to do all these

years what I had to build my wealth and just create freedom for myself but I never knew like

the more actionable parts the buying parts the nitty gritty stuff that do matter that I feel like it's it's a whole job within itself of just even trying to understand that kind of stuff and the fatigue that comes with it too. It doesn't have to be it's like you set it up once and then you forget it truly. It doesn't have to be a full-time job. Don't don't let that get in your head.

that people twice a rage don't know. So don't be hard on my new friend. How much approximately is in your

high yield right now? About 700. Okay. So you've only started automating. It sounds like for a couple

“of months. Yeah. Okay. And then for your Roth what's in there? Like how much? Yeah. How approximately?”

I think it's 200. This is where you sent to the both the Roth and the brokerage. Okay cool. So you just started automating a couple of months ago. So you have 700 in your high yield. You have 200 in your Roth and 200 in your brokerage. Cool. Okay. I know you also had a question about retirement accounts versus brokerage accounts. Is that right? Yes. Okay. Tell me. So Roth versus brokerage. I know there's different tax implications and honestly for me they're meant

for two different things. Like a brokerage I think of it's more like short term. Maybe fun is the word that I would use. And then Roth I know is 100% going towards my retirement and how I

“want to live my retirement. To me those are very two separate things. So does that mean I invest”

in different products or different things? I know the time horizon's necessarily different. But I don't know how that looks or what maybe you can give an example of how that would look. Yeah. For sure. So think of your retirement account right as the do not touch this until you are old and gray money because that's the literal deal you're making with the IRS and exchange for some sweet tax benefits. So with a Roth that money is tax free when you take it out with a traditional

IRA or a 401k it's tax deferred. You are going to have to pay taxes when you take that money out. So that's where you want to max out contributions for stuff like index funds or target date funds

“where you're playing the long game with the overall market. So ideally you're not looking at”

that balance every day. You're putting it in. You've already automated it which is incredible.

You're setting it and forgetting it. But contributions for retirement accounts should be in relatively safe stuff. In other words does that make sense? Yeah. Yeah. And for your brokerage, you know, that's your, I love that you call it the fun money. You can't spell fun without fun. So I would think of it as your grown-up freedom fund. There's no contribution limits there for a IRA. It's 7500 a year right now and by the way it changes all the time. So make sure that you know

what the max is. But for a regular brokerage account, you don't have any penalties when you pull the money out. So you can do that at any time. But you also don't get any tax perks there. So that's your spot for money that you might need before you're 59 and a half. Whether it's a down payment, if it's a big trip or it's, you know, just extra investing once you've already stuffed your retirement accounts for the year. Does that make sense? Yeah. Yeah. That makes sense. So with, like if you,

if we were to talk about like my situation, would you go all in on the Roth right now before I

feel like I can hit that contribution limit? Yeah. The Roth is a super powerful vehicle. So not paying

it tax when you take the money out is a huge, huge benefit. And right now, I would just say, you know, you're in the lower tax bracket. You assume that as you go on in your career, you're going to be making more money. Yes. Awesome. Me too. My money is on you, sister. So as you make more money, you pay more taxes, right? And then generally just in the world, do you think taxes will go up or taxes will go down? Right. So if you're in the low tax bracket and taxes are potentially who knows

what ends up happening going up, then right now you're putting in post tax money into the Roth IRA for the privilege of taking that money out tax free later on. And that's huge. So with a traditional IRA or a 401k, the tax treatment is flipped. You put in money pre tax, but you pay taxes later on. So the idea is to maximize your growth, putting money in post tax after you've already pay taxes in a lower tax bracket, which is exactly where you are right now. And the investments

index funds target date funds in both of them. Even for the brokerage like being a beginner

“investor, I feel most comfortable doing like the index funds. Even if it is more riskier if it's”

like in tax, for example, that may be more risky. Some might think that I don't know. I don't even know if it is, but like for now that feels comfortable, but then is the comment over time to look at a certain stock and just go all in on that the brokerage account, if I'm understanding

correctly, is that account and is the place to do that? I never say go all in on a single stock.

It's just yeah too risky, right? And what's great about index funds or ETFs is that it's a basket of a bunch of different stocks all with one purchase. So if one of them goes down, then you're propped up in theory by the others. And so it is more risky for sure than something that's principle protected like a bond or a CD or any sort of fixed income asset. So there's equities and then there's fixed income. And so equities are always going to be more risky, but the more risk, the more return

you get. So that's the trade off. So the overall stock market has yielded 7 to 10% over time. And so

if you're investing in index funds, they could be more risky, but compared to what? Exactly.

More risky compared to a CD or a bond where you know you're going to get your money back. It's principle protected. You don't get your money back exactly in the same way from the stock market. But in exchange for that, there's over time been much higher reward. I don't think it matters whether it's a retirement account or brokerage account. Generally, it's not advisable to go all in on one

“individual stock. Regardless of the account that it's in. Okay. And I was just, I feel like I think”

very negatively about a brokerage compared to a Roth because of the tax implications. And I just like the idea of, you know, pay taxes now, well, like you would set them in the lower tax brackets. Like all that money is my money 100%. Like just to know that everything that's in the account is mine. Like there's nothing that's going to be taken from me. So, is there what are the percentages of for a brokerage if I was to take money out eventually? Like what percentages

going to the IRS? Well, you're only paying on the capital gains. So, the money that you put in is yours. But the gains, because that's post tax money, right? The gains are what's taxed. And so, hopefully you're going to have a whole bunch of gains, right? And then that depends on whether they're short-term capital gains or a long-term capital gains. So, if you sell it before a year, which I do not advise, then you're going to pay short-term capital gains. So, it's the same as

your ordinary income tax bracket. If you wait past one year, then you pay long-term capital gains, which is a more favorable tax rate. But these are high-class problems. You could go the other way, right? You could have capital losses. And so, when we're thinking about capital gains, if you're holding on to something for a long period of time, those are going to be taxed at more favorable rates. But don't let the tax tail wag the investment dog. If you wouldn't buy

something, if it had a different tax treatment, then I wouldn't buy it at all. This is like people talking about, you know, I should buy a home because of the tax deductions. No, can you buy a home

first? That the question is about the bigger purchase, and then taking into account the tax benefits.

It's so smart of you to take into account all of the different tax implications here. But I would just say, overall, don't let the tax tail wag the investment dog, if that makes sense. Yeah, yeah, no hundred percent that makes sense. Don't let it dictate my entire purchase. Yeah, especially when we're talking about big purchases and big investments here. Tax implications are really important. But it's not the whole thing. So let's dream a little bit, Vauy. Let's

“let's fast forward two years and your finances are exactly where you want them. What's different?”

What can you do then that you can't do now? I would say my freedom of going on vacation and

cost or really wanting to do the excursion while you're on the trip. But then you're like,

you think about the overall cost of the trip and that drags me down and feels like too much or just going out for a nice dinner and some drinks and not feeling the guilt with that. In knowing that, I still have more than enough in the account for all my needs for the month. And that I can still live how I want to.

“Yeah, beautiful. Where are we going, by the way, on a trip?”

Let's go to Hawaii. Yes, please. What island are we going to? All of them. Why did one? Is there a number attached to that? Where is this just more of a feeling, like less stress, more choice? I think it's a feeling, 100% it's definitely a feeling and I think it's

a feeling of guilt. I feel like I feel the guilt because it feels wrong. It's always like,

for example, I went shopping this weekend. I had even a lot of free time and I got this amazing new dress and then I get home and I'm like, did I like it? So, and then I rationalize it. So it's like, it's definitely the feeling part of it of taking away that guilt and having to rationalize each purchase in my mind of, will I still be okay? Will I still be able to afford these things and still feel comfortable? Right? The sweet spot is somewhere in between thinking you're going to live

“forever and thinking you're going to die tomorrow. And I think people end up hanging out in one of the”

extremes, like overspending because, you know, yellow, right? So let's try to dig a little bit deeper here. What trips you up with the finances do you think? Is it knowing what to do or is it actually doing the thing? Doing the thing? Because I think it's really nice to have the plan and I think the plan helps me sleep at night and just makes me feel good, but it's fully executing on it. That's the heart for it. So let's go a little bit deeper. Where did you learn how to handle money? Was it family,

trial and error? I told myself everything growing up, I was had to make every dollar that I wanted to spend and I love my parents, but I've paid through college and everything after that. I feel very supported by them and not saying anything that, but I've just had to work hard to be able to get the things that I want in life and everything that I have up until this point is with the dollar that I've worked very hard for. So it's like every dollar that comes in still feels very

“important or tracked. I know of everything that's coming in and out. And I feel like that's why”

soon as like I get that paycheck, it's like act. Like what do I need to do? Like fight or flight, figure it out, spend it right. Like so there's a lot of urgency and importance around it. Well it sounds like you're not freezing and you're not running away. So are you fighting? Are you fighting yourself? I don't know. I just feel very overwhelmed and I think something that I struggle with is I think I do best when I have a goal but I feel like every time like I say a goal

like that goal just keeps moving further and further and further away. So it's like in the beginning whenever you had said like oh you're 22. Like you're you're you're far from retirement. You're doing great and it's like I feel like I need to be doing better. I could be doing X, Y, and C. So it's like oh it's just moving that goal post further away makes it seem like I'm behind. Well first of all, both things can be true. You are so young and you do have so much time and also

there could be more things that you could do. Both things are true. At the same time and a lot of ambitious people move the goal post on themselves mid game. This is a thing that happens to myself to a lot of people who create financial goals and then as soon as they hit them they're like no

no no no I'll just be happy but when I get this other thing and you never get your brain to the

other side of it. So let's try to come up with a financial goal together. What would you say is your

Okay. Because I say that because I think right now like my having my savings and a lot of my

“investment vehicles be automated that it's like it's not a choice for me and that's what works for”

me and that's what I needed to do. But if I can stick to a budget where at the end of the month I do have some money left over and I'm not at ground zero or feel like I need to compensate work over time or do something to to make up for because I spent too much like I want to be able to have the end of the month at the month end and still feel like I have a cushion underneath me.

Okay. So right now you are saving 10%. If you saved 15% that be instead of 450 would be 675.

How would that make you feel? Good. Do a goal. Okay. So let's say that 675 is the overall goal. I would say just getting 75 more bucks in there and you're at 15% of your overall I like to call a spending plan not a budget by the way. It feels more sustainable. So 15% to the end game 15% to the extras and then 70% to the essentials. So if you're taking 4500 a month we have 15% to the end game. You're so close. I would add 75 more bucks into the Roth account. I would take 65 as the most

“you would spend on extras a month. Does putting a number on it make you feel less anxious?”

It's all above board. So if we're saying, hey, here's you have 65 to do whatever that you worked for. You'd be want to buy an awesome dress, buy an awesome dress, but keep it within this parameter. And then it doesn't feel like, you know, this buyers or more should I have bought the dress. I mean, you're creating what a business would create, right? Where you where you work has an overall P&L, right? A profit-in-law statement. It has an overall balance sheet. It has an overall spending plan.

Right? They're not buying staples. I'm saying, like, oh, I don't know. If I should buy these staples, I feel bad about it. It's like it's there. It's accounted for.

“And so I think the same thing can apply for you. It's accounted for. We have to account for those”

extras. It would be unrealistic to not spend anything extra on yourself. Yeah. And I think do you think that that would help diminish a little bit of that guilt? Because it's if I know that, hey, you have $675 and you can spend exactly how you want to. Everything else is taking care of because I've done the math. I think having a number would make me feel better. So let's have a number. It's having a number. And the beauty of it is that having that

number for right now might just be a good North Star for you. And say, it's not nebulous. Right? You're not going to the, where did you go about shopping? Is there even a mall anymore? I don't know. I went to Anthropology. Okay. So you went to a store and you're not like, who can I afford it?

Like here, here's what you can afford. 675 bucks. How does that sound? Good. Good, doable.

That's feels doable. Yeah. So obviously you're saving, you're growing your heart or money, which the steps that you've taken in the last couple months are awesome. And it's just about staying consistent in working toward those saving schools. So where do you keep your savings right now? Right now, I keep my savings in a high yield savings account under a mix. But listen, you're not alone. Most of us leave it on autopilot, a paycheck lands. It sits in a

checking account doing nothing. I mean, you're earning something. What's worse is most traditional banks will give you, you know, less than 0.1% APY on your savings. It's literal pennies. So that's not great. I know you're crushing it in your high yield savings account. Like, do you are you happy

legit love theirs. Every dollar is maximized up to eight times the national average savings rate with eligible direct deposit. No account fees, no minimum deposit to open and a bonus when you join. So that means every dollar is working smarter. So let's just put finding the best high yield savings account for you on or to do list. Okay, your goal is $5,000 and when you hit $5,000 in your high yield savings account, how are you going to feel? The same. I feel like it's like the gold post thing.

“Like, yeah, I'm just going to keep doing what I'm doing. Honestly, like being 22, I live in an apartment”

right now. And I don't foresee myself buying a house within the next five years. But maybe after that 10 years down the road, I would look to buy a house. And then I would like to have more money for a down payment and such. But whenever there is an emergency to know that I'm going to be okay to have that, I feel like it's just going to be like, okay, check it off the list. Well, the good news is that you're going to hit that your current rate in less than a year.

That's great. And there is a threshold. So I think your first 100k saved is actually the hardest.

It feels like you're not making any movement. There's no momentum on your side. But that is actually the level where compounding is very exciting. So capital grows capital. And so it's a slog until you actually get there. And then compounding really, really does its thing. But your goal, I love this, this time next year, you're going to already be there. And if you look for a little bit of a higher yield on the high yield savings account,

you could get there faster. So at that point, if I'm like having these goals, then what? Like, do I just make more?

I feel like it's money in finance is the never ending thing. And it's a never ending game.

And a good way, it helps me do a lot of things in life. But then what? What do I do? Yeah, you do. You do come up with other goals. You know, as you grow in all aspects of your life,

“you're going to have new goals. Your life is going to change. You might move. Who knows what's”

going to happen, right? We didn't know there was going to be a pandemic. We didn't know anything. You know, overall, we have no crystal ball. I wish I had one for your life. And whatever happens there, career personal or the macro economy or the overall world. Like, it's about understanding the rules and then playing the conditions on the field. So you have these awesome goals now and you will hit them. No doubt. Like, my money is on you. You are a winner. And when you hit them,

you might be in a different spot in your life, or you might use that to get a certification, or, you know, invest in yourself in some way or start a business. Who knows what will happen? But what I love is that you are using a high yield savings account. You're absolutely crushing it.

“And for anyone else listening, the name kind of says it all. It's a savings account that gives”

you a higher yield than a traditional account. And so you're already doing the thing that a lot of people are doing. They're leaving their money in their checking account and it's not growing at all. And inflation is growing at about 3% year over year. So you want to try to earn more than that to just keep pace with inflation. Okay. So let's work backwards. So in order to save the five K, are we good with this contribution plan? So we have 450. We're going to put 175 now in our Roth.

We're going to put 100 in our brokerage account. Do you have everything that you have so far

is automated, right? And first I was like, okay, I'm going to try 20 dollars. And we're going to see if

I can even figure this thing out. And then once I figured it out and kind of understood it a little bit more and let's into what to buy, then I was like, okay, let's just do $100 a month. See how that works? That feels doable for me. And yeah, I'm like, we'll see how that goes. And if it does feel too tight one month, there's something that I wouldn't do it. And that's me. It's like, it's okay. The world wouldn't end. So and then for my the 400 for the student loans,

that was really not calculated at all. I was like, with something that seems a little bit aggressive,

Yeah, that makes that big struggle sense. But you're also really smart about understanding where that interest rate is that it's relatively low, like you're not dealing with consumer credit rate

there. Okay, so we have, it sounds like we have a plan right now. Here's what we talked about,

taking advantage of the beauty of a high yield savings account. Love determining how much we want to contribute monthly. So 400 to the high yield savings account, 175 to the Roth, 100 to the brokerage, that's 675, 675 to extras that you decide what your extras are. It's your fun money. You're hard for your money. Do whatever you want with it around 675 a month. Automate your contributions. So increase the contribution that we talked about. And you have 1350 there.

“So you have 31 54 essentials. How does that sound? Good. Good. Yeah, more than enough, I think.”

We have our next steps. Yeah. How do you feel? Good. I feel like it's nice to have a plan and it's

comforting to hear. I think the part that I just think about was like the spending money in the like the less skill I feel with that, just still know that I'm putting a lot towards my savings and building, even trying to invest and starting that as soon as I can, but also having the high yield savings account, making that automated and that I don't have to think about that is just very hopeful. Awesome. So I stand by it. You're killing it. You're doing awesome. And also,

“there are ways to level up. And that's what you just did. But with the leveling up look like”

you just came up with the whole spending plan. What do you mean? What do you want to

level like? No. Once I hit those goals, like, one year from today, they call me. I'll talk to you next year. Goodbye. You're good. I struggle with being in the human Hawaii. Goodbye. Take that trip. Enjoy it. I'll sign you on Maui. Yeah. We'll talk about next year's goals next year. But by this time next year, you'll have $5,000 at least in your high yield savings account. You'll have $2,100 in your Roth. You'll have $1,200 in your brokerage.

Look at look at those amounts. This time next year. And we'll be stepping in my time. Drinks on you. Okay. Stay from the high yield savings account. That's right. That's right. But yeah, definitely look and see in, like, no pressure whatsoever, but, you know, high yield savings counts that you earn more than what you're getting. Okay. I'll look into it. Thank you. For sure. So, we have our year goal. And then if we sort of zoom in in the next few months after sticking to this plan,

which is going to get you to the goals that you outlined. Like, it sounds like, don't let me put words in your mouth. But my goal for you would be to have this plan and to have more peace of mind.

“What's up again? What do you think? Yes, I think. 100% and just, I think it's executing the plan,”

too, of just knowing that, if I tell myself, like, if I execute this plan with the numbers, which I do feel good and nothing feels too short or too much, then be able to have that peace of mind and still be able to spend how I want with that 600 and just be able to still be in the moment and not thinking about the future of next year. I think that's really hard and I think talking about money just makes me think of the future of the future and getting there and how do I get there?

How do I get there? But just starting with this step, like I said, like step one, really just honing in on this and knowing that I did the work and it's okay and it's going to work out how it shouldn't.

that people fall into when they're coming up with the spending plan is not allowing for small

indulgences. The reason that I call it a spending plan instead of a budget is similar to an

“eating plan. The idea of a crashed diet is not sustainable. It's just not. You have to allow yourself”

small indulgences or you'll end up bingeing later on. So any crashed diet that doesn't allow for a Hershey's kiss. You're going to end up in the middle of the night now showing on a big old hunk of chocolate cake because you're so hungry and you're so deprived. And that's what ends up happening when people stick to a budget that's not sustainable. That doesn't allow for these small indulgences. That doesn't allow for the 600 or 675 that you're spending on your extras.

Because then people say in the beginning of the year oftentimes to me, I'll be so proud of me.

I came up with this great budget and I cut out the latte and I cut out all the stuff and I'm not buying the cute dress that Anthropology or I'm not buying the thing that I really wanted. Okay, and then a few months later, it's like, well, I got a Gucci purse, so I got a fancy purse, so I got a fancy thing because I was so good. Well, you could have just gotten those little things along the way and kept yourself content and helped yourself on track so that you wouldn't

binge later on. I mean, a lot of this is the psychology behind it, too, that you want something that's sustainable and a spending plan that's sustainable allows you to spend on yourself.

“And it allows you to spend on your future self. So I even like rethink the idea of the savings, right?”

Is it savings? Because that feels like, oh, it's a dark hole, a dark abyss. Like,

when am I ever going to see that? I'm 22 right now. Like, it's so far away. I'm so proud of you that you're investing so much in your retirement. So young, I wish I could go back to my 22 years old self, slap her around and have her talk to you and be best friends with you, so that she would get those habits. But it can feel like, oh my gosh, what am I doing? It's just taking more money out of my paycheck who knows like what's going to happen at that point. But if you

reframe it and you think like, I'm spending on my cool old lady self. I'm spending on her. Like, I'm investing in her. You know, I think just some of the word changes too in the way you talk to yourself about money. And I'm so proud of you that you've taught yourself so much and you're so independent

“and you're on your own right now. People that do take money from their parents and don't get”

me wrong. Like, I would love to have parents who gave me money. That'd be awesome. I'm not knocking it. I'm for sure jealous of it. But that comes oftentimes with strings attached, right? And so like, there's no free money. There's no free money. And so what you're doing is that you're creating your own path and you're also creating your own story or rewriting whatever narrative and we didn't get into all of that. But I'm sure there's more there of how money was talked about in your house

hold or what money meant or the the word association that comes up with it. But you get to write that now. And you get to decide. And you get to think, you know, just because it was done a certain way. It doesn't mean it's the way it needs to be done moving forward. And, you know, this idea of the dialectic that both things can be true, right? Just because, you know, I did certain habits in the past, maybe those were not okay. And I give my former self forgiveness and also my future

self some tough love. And that's okay. Like, I can forgive my former self for what she didn't know. She didn't know how much she should be spending on the extras before this conversation. And that's cool. And she had some anxiety and she bought the cool dress and, you know, she had some buyers remorse and, you know, the mean girl was in her head. But we can tell the mean girl to sit down now. Like, we have a plan. So forgive our former self for which she didn't know before we have this

conversation. But then moving forward, you know, it's a little bit of tough love too. That's now that we have a plan. It's about sticking to it. We've done the work. Now, I just I'd skip the plan. We've done the work. Now, we execute. And that's on you, boo. So no, no, no, I'll do it. I got this. You think little tweaks. Little tweaks. You got this. You're so good. For today's tip, we can take straight to the bank. We talked a lot about how you'll savings

accounts as a nest egg for overall savings. But it's also a really good place to park your emergency fund. And if you're an OG listener, you know that I like having at least three to six months of bare bones expenses saved away just in case. You know what, I had to have into my emergency fund

then I backed back into the garage and I hit my left side view mirror off. Seriously, that is not a

“joke. I wish it was. But that's the thing life happens. And when it does, you'll be thankful you”

have an emergency fund. And if you have one in a high yield savings account, that money is

working hard for you until you need it most.