#092 | Pet Peeves + Power Moves

April 12, 2021

Episode Summary:

 

In this week’s episode, we dive into our biggest financial pet peeves that drive us crazy, and then our best financial power moves that make us happy.  These pet peeves range from slightly annoying to the type of things you should try to avoid at all cost, and these power moves can have such a positive impact on your financial situation.  Our pet peeves include shaming others, not taking your company’s 401-k match, buying your kids everything they ask for, mortgage misconceptions, misleading sales tactics, and more.  Our power moves include tracking your net worth, spending less than you make, maxing out your 401-K, 15-year mortgages, HSAs, working hard, accountability partners, and more.  We encourage everyone to avoid these financial pitfalls and rack us as many power moves as possible.  

 

Episode Notes:

 

After discussing our recent covid vaccinations, we dive into a probably too-long vent about our pet peeves. Eventually, we get to the power moves that we recommend everyone strive for.  

 

Financial pet peeves that drive us crazy:

  • Shaming others about their financial decisions.  It’s personal finance.  You can share what you’d do, but once someone else has made a decision, let it be, it’s their money.  On that note, please know we don’t mean this list of pet peeves to be shaming; this podcast is our personal views on finances.    
  • Not taking advantage of your company’s 401k match.  It’s free money, and that’s 100% immediate ROI. 
  • How retailers convince you that you saved money on something when you actually bought something you didn’t truly need. That’s not how saving money works.  
  • Letting your kids have whatever they want.  We are parents of 5 kids, so we are talking from experience here.  Kids will ask for lots of stuff; it’s your job to manage what they need vs. want.  And kids will throw fits and not like you briefly when you say no, but they’ll learn boundaries, and they’ll be okay. And they’ll slowly learn that stuff doesn’t create happiness.
  • The sneaky way banks convince you that refinancing your mortgage and adding 30 more years to whatever you had saves you money.  It might save money in the short-term on your monthly payment and future interest, but often the total cost of the loan is more if you add up the ten years you’ve already had a mortgage to the 30 years you just extended it to.  You’ve now spread your mortgage over 40 years.    
  • The idea that because mortgage interest is deductible, that means it’s good to have.
  • The idea that the bank tells you “how much house you can afford.”
  • That renting a house is throwing your money away.
  • Unscrupulous and misleading sales tactics.  I know they work, but that doesn’t make them OK.  Just share the price upfront, and be clear + simple about what you’re selling and why.  Be cautious, ask questions, assume someone else is trying to sell you something.
  • Retiring after only a few years in the workforce.
  • That insurance companies are somehow your friends.
  • I work hard for my money, and I deserve X item.
  • When people dismiss saving money because they “want to enjoy their money.”
  • Buying crap you don’t need, especially if it’s to impress other people or just mindless shopping.  
  • Using credit cards to buy things you can’t afford and don’t need.  

 

Financial power moves that make us happy:

We’ve broken out our power move recommendations into four main buckets. It’s important to keep in mind that power moves, like interest, compound. So the more you do, the more your wealth and happiness will grow. Strive to do all of them. Don’t just pick the ones you think are easier or are already doing. If they seem hard, that probably means they will be valuable to you!

 

  • Foundational:
    • Tracking your expenses and net worth.  What gets measured gets better.  
    • Spend less than you make.  
    • Save as much as often and as early as you can.  
    • 15-year mortgage, or paying your longer mortgage off faster.
    • House hacking. 
    • Driving a shitty car.
  • Investing:
    • Investing in index funds when you’re young. Power of compound interest.  
    • Maxing out your 401k.
    • Maxing out an IRA each year, on top of your 401K.
    • Leveraging an HSA.  
    • Superfunding a college fund early, and then letting it grow longer.  Power of compound interest.  
  • Work and Development:
    • No matter how much you want to retire early, work for 10-15 years like you’re planning on working until 70. 
    • Work hard and take pride in your work. Don’t be lazy.  This isn’t a get-rich-quick scheme.
  • Other:
    • Finding an accountability partner.  This is why we did this podcast, to encourage friends to talk to friends about money.
    • Not caring what people think about you.
    • Using credit cards for all of your purchased to earn cash back, points and miles, and then paying it off each month.  Amazon Visa and Delta Skymiles are Maggie’s favorite two cards for daily purchases.  And level this up with travel hacking with credit cards, if you can handle it.  

 

Top 3 takeaways:

  1. Financial education and literacy improve all of our financial situations.  The more we know, the better we can do.  
  2. Avoid financial missteps as much as possible.
  3. Take advantage of as many financial power moves as possible.  

 

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