Month: June 2023

Last week I listened to the Ramit Sethi podcast episode where he interviews Carl & Mindy Jensen. Mindy is the host of the BiggerPockets Money Podcast, and Carl writes at 1500 Days to Freedom.

Before sharing my thoughts on this podcast episode, I should say that one of the things I’ve always appreciated about Dave Ramsey is how caring he is when people are in a rough situation. The conversations are very therapeutic. He speaks truth in a sometimes harsh way, but you can also tell that he cares deeply and wants to help them. Ramit understands the psychology of money in a way that few others do. He’s great at asking questions, and most of the time they make people feel very uncomfortable. This interview was definitely the case.

The tagline of the episode is “We achieved FIRE with $4.3M. Why can’t we enjoy it?” Even though the Jensen’s are financially independent and only work because they want to, they are honest about the fact that money still has a strong grasp on their lives. At one point in the interview Ramit asked Mindy to share about a recent trip to Germany. Her initial response was a negative one, and this was due to how much they spent on airfare. And the reason this was her first response is that she felt bad because she didn’t use points. She paid full price. She’s supposed to be the money expert. How would those in the FIRE community feel about her? As Ramit pressed for more about the trip, she shared about all of the great experiences they had. But this lack of optimizing still loomed over everything.

I’ve listened to several of Ramit’s interviews. There’s often one partner who holds so tightly to the money, which is frustrating to the other partner. That partner wishes his or her partner would stop being so cheap, especially when the amount of money they have in the bank tells them that they don’t have to be cheap. In the case of Carl and Mindy, it seems like both have been called cheap.

I have mixed feelings about this interview. I on many occasions have been labeled as cheap. And while others might have scoffed, I looked at it as a badge of honor. I remember in college even redefining it. Cheap was a negative word. I preferred the word “simplicity”. It’s been 25 years since that revelation, and in the time since I have continued to wrestle with the role of money in my life. I want to continue to listen to Ramit because it doesn’t seem like he struggles with a scarcity mentality when it comes to money. At the root that’s what I struggle with, and it seems to be what Carl and Mindy struggle with as well. There is a fear that our money could run out. It’s not a rational fear, but it’s a fear nonetheless.

At the same time, I often feel like Ramit doesn’t give enough space to allowing people to spend their money on what makes them happy. When I spend money on something that I think isn’t worth it, it leaves a bad taste in my mouth. At this point in my life I know what makes me happy, and I have absolutely no problem spending money on those things. Here are some examples…

I enjoy cooking. I actually prefer cooking to going out to eat. Therefore I am ok spending a higher amount of money on good food to cook at home.

I enjoy traveling. While I love optimizing travel through credit card rewards, we still spend a good chunk of money each year on travel. We don’t feel bad about that.

We spend a lot of time at home. Mandy works from home a couple of days a week, and I work from home every day of the week. We enjoy our evenings at home, and therefore have spent money on making this a restful and enjoyable place. Over the years we’ve invested in a screened in back porch, a hot tube, and a pretty backyard.

As important as knowing what it is that makes me happy, it’s perhaps even more important to know what doesn’t make me happy. Here’s a few of those things…

• New cars
• Fancy meals
• Going out every night
• Nice clothes

My list isn’t important. What is important is to come up with your own list. Be bold in spending money on the things that make you happy. And be equally bold about saying no to those things that don’t.

There are two exercises that I encourage anyone who desires to begin mastering their money to do.

The first is to track your spending for a month. This should lead to you becoming more pro-active in spending your money on the things that matter most. Here is a worksheet you can download. There are also lots of Google Sheet or Excel templates you can download if you prefer a digital option. After going through the exercise you may decide that one month isn’t enough. I still track mine. It’s something that I’ve done for a long time.

The second is to calculate your net worth. How do you do this? You write down all of your assets in one column, and then you write down all of your liabilities in another column. Add up both columns, and then subtract your liabilities from your assets. The number you come up with is your net worth. Here’s a worksheet you can download.

I’ve discovered in my own life and in the lives of friends that there is one primary reason that we don’t take the time to know our numbers. It’s not busyness. It’s fear. We’re afraid that we won’t like what we see, so we choose to remain ignorant. Yet we know that awareness is the first step of any vision. And that’s why it’s important that we know and understand our numbers, even if at the beginning we don’t like what we see. Once we have awareness, we can now make goals.