The Behavior Gap: Why You Don't do What You Say You Want to with Carl Richards

to the Frugal Friends Podcast. My name is Jen, my name is Jill, And if you listen to our book club episode, you'll know one of the books that we're reading is The Behavior Gap by Carl Richards, and we are lucky enough to get to have him on the show today, so you guys can hear from him and hear a little bit more about what's inside the book. If you haven't read it, or if you have read it, you can hear kind of its updated version for what has been going on in the past few years. This

is such a great interview. I'm very much looking forward to sharing this with you all. So much expertise, simplicity, kindness, humility pours out of Carl, and I think you're really

going to pick up on that. Yeah, I think if you didn't know, if you didn't know, if you wanted to read the book before, I think once you hear this episode, you'll be interested because it's not a play for play um there, it's a you know, a little different than what's in the book, but you get a good idea of like the kind of person Carl is and and what his philosophy is. So but first before we get into episode, this episode is brought to you

by the real heroes. So on this day, October one, eighteen seventy nine, Thomas Edison tested the first successful incandescent electric light bulb that lasted thirteen and a half hours.

So before you clap, he thought it would take him three to four months, and it took him fourteen months, forty other researchers and thousands of failed tests, hundreds of different materials, And actually Edison was barely even there because he was fixing stuff on his other invention, in quotes a telephone, which was already invented by Alexander Graham Bell, So like, what was he even doing? But that didn't

stop him from working his assistance to the bone. They tested hundreds of materials and when they found the combo that worked, Tommy Edison took all the credit and profit. So today we are reclaiming this day for the real heroes, the people who made the lightbulb that you are probably sitting under or next to possible because ideas are free, but the hard work is gonna cost you. It's gonna cost the real heroes. So claps and snaps for the

real heroes. Did oh amazing? I feel educated, inspired, empowered, embittered, sad, and unfortunately we don't know their names. We often will never know the names of the true heroes. Amen, and you listening, you are a true hero. Know that you are one of these true heroes the work. We don't know your name, Amen, but we're we would love to

know your name. That's not the question snaps for you. So, now that we've gotten off that soapbox, let's get into some values based financial choices and talking about the phenomenon behind why you don't do what you say you want to do, Because isn't that life? Isn't that budgeting and financial planning in its essence? So. Carl Richards is a certified financial planner and creator of the Sketch Guy column, which appeared weekly in the New York Times for ten years.

Uh So, through his simple sketches, he's very well known for just really simple sketches. He makes complex financial concepts easy to understand, and the sketches serve as the foundation for his two books, the One Page Financial Plan and the one that we're reading, The Behavior Gap. So we are so excited to have him on. This was a great, great interview, so excited to share with you. There's such alignment with our ideas here, and so if you don't want to listen to us, you'll be able to hopefully

listen to Carl. You know, sometimes it's just out of a different voice. But also he's got a lot of expertise and things to share with us, so let's give him the platform. Carl, Welcome to the Frugal Friends Podcast. We are excited to have you here, so excited to be here. Thank you for having me. You are clearly an accomplished human being, and we're so thrilled that we can share this space with you and learn from you.

You've got a plethora of things to share on. We are primarily going to focus on I know we chatted before we hit record, going back to the archives, this book you wrote ten years ago that we are now reading in our Fall book club. So really excited to talk with you about that. But then also make it relevant for what we're walking through today. So just to jump in, Carl, we're curious to hear from you this concept that you kind of came up with, the behavior gap.

What is it and to bring it relevant today? How have you seen it affect the way that we manage money, particularly in the last two years. Yes, such a good question, and thanks for starting there, because it's it's one of my favorite topics. So the behavior gap has like a very specific meaning, and then what it's grown into be over the last you know, fifteen years, really is more broad. So the specific meaning is related to investment behavior specifically.

And this is really kind of hard, at least it was hard for me to I'm sure your audience is way smarter than I am, but it was hard for me to get my head around at first. So it's it's the difference between and this was I remember actually the first time I realized it was like, that's great, there's a difference. This is like a little secret. There's a difference between invest doors and investments, right, like this is this is a crazy idea that there's a difference,

But you are not your investments. And so the way this shows up is imagine if you're reading the newspaper or magazine or you see an ad online and it says that there was an investment that had a ten year return of ten percent. And this isn't a trick question, so it doesn't involve math like ten percent a year for ten years. Well, that's the investment return. That's the

investment return. Right. The question becomes if you're an investor and you bought that investment at the beginning of the ten years, and you held it for the whole ten years, and you didn't add or take any money away. You just put money in at the beginning of the tend the exactly to the day, and you held it for the whole ten years. Your return would be the same. The investor return would be the same as the investment return.

But the problem is we don't behave that way. Like nobody buys and this is I'm being a little facetious here, but nobody buys long term investments and holds onto them for the long term. That would be a silly idea, right. What we do instead is we buy things and then the market changes, they go down, we get scared and we sell. They go up and we suddenly want to buy more like this normal sort of herd behavior. And what ends up happening is the investment return. Sorry, the

investor return is always lower than the investment return. And I kept seeing that in my work as a as a big investment firm, that people would buy something that made sense to buy is a good idea, and then it would go down and they would get scared and nervous, which is also normal, and we can talk about that if we want to normal to feel scared and nervous,

and then they would sell. A couple of years later, that same investment would go up a bunch and everybody to be talking about on the news, their friends would be talking about it, you know, the the Financial Pornography Network SANBC would be talking about it, and people would get really excited and they would buy it. And so what we would do is we would buy high and we would sell low. And that's the opposite of what we want to be doing. So that's that's what created

that behavior gap. Now, the broader version of behavior, the behavior app is any well intentioned financial behavior. It's well intentioned, but it is producing a suboptimal result. And we can talk about specificals what we want. But that's that's the meaning of the behavior. I love the way that you

just broke that down. I feel like my mind expanded a bit, just the way that you simplify it and and explain the difference between an investor and an investment and how that can impact us as the people who are the investors engaging with this other thing. And this is a little bit adjacent, but I just want to comment here your ability to simplify as quite remarkable. Obviously you've done a lot around you know, the drawings that

you create and the way that you explain things. Jen and I recently talked in a podcast about how children's books are often favorite and I realized it's because usually we're breaking down complicated concepts and you've got to know You've got to know the concept well in order to simplify it. And that's clearly the case for you. You know this so well, and because of that, you're able to explain it in kind of a layman's terms a

way that we can all kind of grasp onto. So I just I appreciate that about you and what you bring to the education of finances. And now to get back on let me just let me just comment real quickly, just for all of your listeners to understand something. It's really really important. You are not alone in not understanding

the words that the financial services industry uses. And the people around you, and I don't mean to be gender based here, but especially the men around you who are all nodding, pretending like they understand there, and they don't. They're just they're just pretending. Like I've been through this conversation thousands of times and it's always quiet and over in the corner where nobody else can see, and they look around and they say, hey, do understand that word

you use? Standard deviation or volatility or risk or diversification or so please. And I'm seeing this more and it makes me so happy. And I hope that especially your listeners understand that they are the ones in charge. It's their money, and so you can say, you can raise your hand and say hey, and I'm gonna use the term because it often is males in our industry. Unfortunately, hey, bro, I don't understand the word you just used. Will you

back up and explain that to me? And I think the more we sit in that spot where we're like stop stop stop, stop, stop, stop with all these like fancy war words that you wave your hands around and say and will you please explain that? And I don't know if it's an age, if it takes time, but I've gotten so comfortable lately, and I just had this experience yesterday. It was in a meeting where I was

the one like I was. People were in the meeting to listen to me, but somebody used a word that I didn't understand, and in the past that would have pretended and this time I just said, Hey, could you I'm not sure I know that word. Would you explain that word to me? And nobody cared like the people were like and I'm sure other people in the room were like, So, I'm just trying to emphasize that, especially your listeners, like please understand, you're in charge. It's your money.

So if you're in a meeting where you don't understand something, it is not your fault. It's their job to explain that to you. And you can say with confidence, Hey, back up a minute. You used a word back here. I'm not sure I understand I understand the word. Will

you please explain that to me? And if there is any resistance to that you're out right like like if so, I just I think that's just really important because we're all playing this game where we all pretend that we know what's going on, and there's some nefarious intent on

the side of the industry. Often that like complexity is a selling tool, and even in the good parts of the industry where it's not nefarious, it's like they just forget, Like the people who really actually know what those words mean and are are good people trying to do good work, they just forget that. The rest of us. If we took a statistics class in college, we tried to forget it as fast as possible, Like we don't know what

those words mean anymore. So please understand, you hold the power and it's their job to explain it so that you are on the same page. Because these things like risk, risk is the key one, Like you cannot assume that what you think they mean by risk is what they actually mean, And it's so pay for you to ask those questions. Thank you, Carl for that encouragement. I think

we need it often. And as I'm hearing you say it, I'm reflecting on how whenever I've been in meetings and someone who is an expert in many ways kind of pauses and says, WHOA wait, explain that to me. I love it because it's it takes such courage and shows humility and a desire to learn and a freedom and permission for others to say, yeah, speak up. If you don't know what this means, it is not a reflection on the entirety of who you are. We don't know

all things about all things. But I think, especially as you're kind of pointing out for women, that can be a we already can feel ten steps behind, especially in this male dominated space, like how do we play catch up and not give away that we might not know something? But I think, yeah, having that confidence to say just a second, I matter here and this is my money, and can you explain this to me? And I love what you're saying as well that if there's resistance to that,

they're not the ones for us. If they are going to make us feel less than in the explanation, then are they people or an organization or a company that we really want to be engaging. And it's so helpful

to hear from you. Thank you for sure. Yeah, sure, So I'm interested to see how you have seen the behavior gap play out in the last two to three years when this has been I mean because you wrote the behavior gap like ten years ago, So um, what have you been seeing over the last like two and a half years with the behavior gap playing out not just like in investments, but also in the whole picture of finances for people. Yeah, so this is a story

as old as humans. And that's the interesting piece of this, Like this this sense and that that's the thing we need to understand about money, Like we expect that we expect it to be about spreadsheets and calculators. Like it's if we if we were taught anything about money in high school or college or anywhere, we were always taught about this sort of rational thing. It's it's a math problem. Two plus two always equals four, right, Like it's it's but then we go to touch it and it's it's

a it's. I like to think of it as like an electric fence that you didn't know was electric. Like you touch it and you're just like WHOA, how why am I feeling this way? Or why am I fighting? Or why? Is? Why is what my dad said to me to not be spoiled coming up, Like why? Like why why? Well, because it's really more about emotion than

it is about numbers. And so when you understand that, you start to understand some of the behavior, like the bad quote unquote bad behavior that we engage in when it comes to budgeting or spending or investments is actually like hardwired in us. It's there if we look at it from a historical perspective, some of this behavior kept has kept us alive as a species. Right, That's how hardwired it is. We are wired to get away as fast as we can from anything that's causing us pain.

And we're wired to get as much as we can of anything that causes security and pleasure. Why it's around, you know. So if you understand that, then you understand you can be a little bit more empathetic with yourself because I like to think of this conversation is like a mixture of like an empathetic hug and a punch in the nose, and we just have to sort of go back and forth between those And the empathetic hug is just like you're wired. So let me give you

Let me give you an example. So if you and there's words for all this from the academic literature, I mean Knamen want to know about prize for a bunch putting words on a bunch of this stuff. So if you got a raise every year for the last three years, you know, let's actually just use bonus. You've got a bonus every year and no raises a better raise. You get a raise every year for the last three years.

Going into November, you're thinking about buying a new house or renting a new apartment, and because you've gotten a raise every year for the last three years, it's pretty it would be normal and reasonable for you to expect to get a raise in January of the fourth year. And so you therefore might, right, you might plan when you buy the house or at lease in rent a new apartment. You might say, oh, you know what, I

can afford it because I'm going to get a raise. Well, that that's called recency bias, right, And and that's just us taking the recent past and projecting it into the future. And so that would be reasonable for you to do. But we have to put guard rails in our life because what if you made that plan, made that commitment, and you didn't get the raids right, And so that's an example of of something that would be reasonable and we can be empathetic to it, and it's something that

we should protect against. And so the way we've seen that play out, I mean, that's an example of I've seen that play out housing. You know, should I buy a house is like this big decision for so many people, and it feels so out of resent my younger, my older kids and soon to be twenty one, like they don't believe they'll ever be able to buy a house, just because it's gotten so out of reach, right, And so having those conversations around well should I rent, should

I say for down payment? What should I do? Those there's a there's an element right now of well, it's never going to be possible. Well we don't know, Like we're taking the recent past really like the last three years, and we're projecting it into the future. Now. Another place we've seen this play out with investments specifically is is And I almost hesitated even bringing up but Crypto, that's

exactly what I was thinking the whole time. You're talking yeah, like and I don't it's so hard, right, you don't know, you don't know. I mean, that's an interesting example of something that's been going on forever, right, Like the tulip. We can go all the way back to tulip bulbs if we want to. And we certainly saw this in when I believe it or not, when Google didn't exist, right and Netscape went publicly because it was the first browser. Right Like, we've seen this, Oh, we saw it in

two dozen seven with real estate. We see this over and over and over where something gets really exciting, something new and novel. We feel like we've ever seen it before, and indeed we haven't. We haven't seen this specific thing before, but we've seen this behavior before. And then we say everybody's doing it, and so you can already feel all the like I've got to get in or I'm gonna

missed it. We've got this fear of missing out. We've got herd behavior, We've got how how hard is it to resist, even if you're like disciplined, It's really hard to resist when everybody you know and people are retiring. It's a new model. And so that's one way we've seen it play out and to two really painful consequences. And the way to avoid that is too. Both of

these things are around herd behavior and recency bias. That the key to them is to expand your definition of the recent past, like just stop and go, hey, wait, three years ago, this didn't exist if these people all right here, here's one conversation that I love around the crypto like and I call it. I call it the overconfidence conversation. So one conversation you can have is to just say, I'm thinking about making a major change, like I knew people who moved every penny they had and

borrowed money. Right. We we all heard tons of those stories, and the problem is they were rewarded in the short term, like you saw the reward like some of them, you know, retired in front of you. So one conversation you can have is if you're thinking about making a change like that, just ask yourself three questions. The first question is, Okay, if you make the change, how would your life be different?

If you're right now, I've asked that question, certainly hundreds that probably not thousands, but almost a thousand times, right, And normally the answer that question because we're not talking about making these giant bets like and it's almost always the answer that question as well, I'd go on an extra trip a year, like my life's not gonna change dramatically like it's gonna be nice, but it wouldn't change

a lot. So okay, we have defined that. The second question is if you're wrong and you make this change and it goes against you, and it's not hard to imagine that, like it goes to zero, like you lose all this money, you lose half this money, you can define how much it goes against you. But if you're wrong, and then the question is how would your life change then?

And normally, because we're hardwired to feel loss more painfully than we are to feel gain in terms of how happiness, normally, the answer that question is whoa, my life would really change, like I'd have to go back to work or I'd have to I'd have to retire later, I have to sell something, like my life would really change. And then the third question is have you ever been wrong before? And that's just it's that intended to make you feel bad. It's just intended to remind you that we are almost

always wrong. So then what do we do with that? Well, we dick with stuff the kind of more timeless principle so that that it's not should I invest in crypto? And my answer had always been like probably not the way you're thinking. And then people say, oh, that's because you think crypto is not going to go up. No,

actually I don't know. I promise if we don't invest in crypto, speaking broadly here, right like, I promise if we don't invest in crypto, it will quadruple if we don't, and if you do, I promise it will get cut in half. That's not the reason we're making a decision. We're making this decision to because there's principles here, longer term principles like being diversified. So that would lead me to, hey,

this is really interesting. Is there a diversified way to take ten percent of my money and put it in this crypto thing? Right? That's that's the process I've seen people go through. I'm a hundreds thousands of times the last couple of years. That's amazing. Just last extreme and I think we talked about this a lot, living in the radical middle, calling it radical because not many people live there, but we can be drawn to the extremes, the whip lash decisions, the recency bias. I love that term.

That's a new one for me. And I've seen this so much, like everything's going to crap or everything is so wonderful, and it's all just based off of like the last few months or the last few years, and for some reason we can't seem to pull ourselves broader and say, but what about the past decades? What has what have I seen over years and years? What can I learn from those who are a little bit older, who have seen more decades than I have, and make

decisions based off of that. We just it's going to take a little bit more processing, not just related to finances, related to all sorts of stuff. We get so wrapped up and what's happening right now and how it might be the worst thing ever, and it's like, well, maybe not, we could temper this a little bit. And that's what I'm hearing from you, is this tempering around making financial choices.

And speaking of that, you recommend ignoring most financial advice that you hear in the media and having being empowered to make your own financial decisions. What recommendations advice do you have on how to discern how to make one's own financial decisions, like not just to follow whatever radical idea is out there at the moment. Yeah, it's so hard, and I would just I would as a blanket statement.

And I actually would go toe to toe with anybody on defending this, like I would just ignore almost everything on TikTok, right, like just like almost everything. And and the the reason is, is there some good stuff being said on social media generally speaking? Yes, The amount of stuff that will actually kill you is infinite though, and that's the problem. And and so I just think it's a general I would stick with. I would, I would

think more like books, I would. I I would try to get to first principles is what I'd really try to get to. I know that's like the big language, Like what does that even mean? I'm not even sure executly what it means, except that there are first principles when it comes to handling our money. And those first principles are typically researched, right, They've been tried, they've been tested, they've been around a while, like diversifications. At first principle, Right,

how do I spend my money? How do I but tracking my spending? That's the first principle, Like until we get there. It's so tempting, especially in this like short and by the way, it's not just limited. I didn't need to pick on Tektok, but it's also the Financial pornography Network like those they and they're all dressed up with ties and suits and and they look really fancy and they've got big words on the thing and they've a ticker, and so it feels really credible. Well that's

just it's exactly the same thing. It's just meant they're not there to give you advice. They're there to sell advertising and to get you to keep watching. Now, if they said, every day by good quality things and hold them for a long time, spend a little bit less than you make and save the difference, build a rainy day fund for whatever you want to define it for. Like if they said that every day, none of us would watch so that But that just sounds, you know,

so simple and basic. And that's radical, I know, And I think that's I think I liked. I like this sort of what did you say? Radical? What radical metal? Radical? Radical metal? I love that term, Like if we could celebrate like I mean, let me just point. I hate to be over like I'm not actually really all that interested investing, but it's my background and it's really interesting

to hear Warren Buffett talk about his investments. So this isn't This is a quote, right, he said, the hallmark of our investment success has been benine neglect, bordering on sloth. So we can somehow celebrate the idea that this single best thing to do with your money is almost always boring. It's almost always boring. So if we could just somehow if it feels exciting, and I love what you said earlier, like just put some space between you and the excitement,

take a walk. Delay, like any big financial decision, delay, like you don't. There's almost nothing that you have to do today. If it feels like you have to do it today, I please don't do it today, Like go on a walk, like I have a little trick on spending. It's called the seventy two rule, and it's it's an Amazon I noticed on Amazon once I became an Amazon

Prime member whatever ten years ago. Oh, I noticed books would magically appear at my house, Like I was like, how did I Like I would hear it on a podcast, I would go to Amazon. I would see it. I would say, by now, and then it would be there. In the day and a half between when I sent I was sure I had to read this book. And the day and a half later when it arrived, I was like, I'm not sure I need to read this

book anymore. So I designed a I've got a wish list, so in Amazon you can have this wish list or is it called Yeah, I think it's called a list, just a list, just called the list I designed. I set up a list called the seventy two hour holding bid seventy two hour rule, I think it's named. And I decided that every single book had to go into the seventy two hour been before I bought it, and then if I came back seventy two hours and I still wanted it, I had total permission to buy it.

There's hundreds of books in my seventy two hour but that I've never bought. And so I think just putting space between you and that decision and an investment, they're even more important. Like just wait, just wait right, Carl, I feel like you're giving us a blueprint, not all the specific answers, but the ancient paths, the well worn ways of engaging with finances and little by little experiencing growth. And this again is a principle that can be expanded

across our personhood. Not just finances, but what are the ancient paths of rest? What are the ancient paths of community building? What are the ancient paths of smart financial decisions? And this is it the patients, the research, the What have the decades before shown us? What? What do we know of the way that we've engaged in this concept before and not just chasing after like the new shiny, glittery gem that we don't know yet what it's gonna do,

or at least being cautious with it. No, I was just thinking through, like I can almost promise you, I can almost guarantee you that if you focused on paying down your mortgage, you would be happy twenty years from now that you did, Like I can almost it makes no sense financially, because I mean it does make sense, but everybody will tell you you could take that money, especially if you're mortgage is at three and I don't learn more like three and we just happen to get

lucky and time things well, like it was three in the quarter. It wasn't by any skill. I just want to be clear, but like, it makes no sense for us to pay down a three and a quarter mortgage. I promise. I'm my wife and I know that if we focus on that for the next ten years, we will be happy we did despite the fact that everybody waving their hands is going to tell me it's stupid. I know more people, and I like, I just please believe me, I know more people in there. Let's just

say fifty five. Let's just say say I don't know more people at around the age of sixty that would trade if you said I will trade you all you're in astment decisions, all your financial decisions for just having your cash back right, Like was that I can't remember who said that. Will Rogers somebody said, don't talk to me about the return on my money. Talk to me

about the return of my money. I know more people that that's true for that would just they would gladly just say, you know what, just give me my money back, because all this hunting for the best investment, all it did was leading me to make stupid decision over and

over and over again. And so that's one of those areas where I just think, like, if if you just bought the SMP five index at Vanguard with fifty bucks a month and you pay down your mortgage, you would be ahead of your neighbors in twenty years and the rest of them are going to run around and you're gonna feel stupid the whole time. You're gonna feel boring the whole time. And I'm trying to get to the point where we can celebrate that, Like I want to

have t shirts made, like I'm a lazy investor? How

do you like me now? Like just I want to somehow for a car, like some celebrate this sort of just radical boring, right, So anyway that would be a subset of the radical never oh man, So I love I love the concept of of like the simplicity, and I feel like that's one of the ways, Like I wanna I want to just get like a few actionable tips before we wrap up, like how do we close that behavior gap like in our day to day and are investing, Like what do we how do we do

that and set ourselves up to make better, more logical decisions. It's so it's really really hard. Kneman who wrote probably the the book on this, thinking fast and thinking slow. You know, it's a three inch I have a one inch stick cruel. It's beyond my one instick cruel. But I've managed to still get through it. But in the first chapter, I believe it's really quite was kind of I thought when I first read, I thought it was depressing,

but now I understand it. He said, Look, I don't have I have any hope that reading this book will actually change your behavior because I know all these things and I still do the same. I still make the mistakes,

he said. My only hope is that next time you do something silly, you'll know what to call it, right, And so I think it's it's the point is it's really really challenging, and so the simpler you can make things, So that's the first step would just be anything complex, like just my wife's grandfather is he's passed away now, but he was a cattle rancher in Wyoming, and like he's the real deal. He had he has the Wyoming

license plate of beef. Like like if you have the Wyoming license plate beef, you're like the real deal, right exactly just be And of course it was like a you know, it certainly wasn't a Toyota because you know it was an American made car, but so it was like a Chevy like something like the the the Chevy version of a Toyota Corolla whatever that is like basic car with Liza Blaces beef. It wasn't on his truck and he had enough one fifty like all that normal stuff.

But I remember being up there one time and he had the paper open in the morning and up at his ranch and he was looking at the cattle futures and I was Mr Smart Financed, and I was like, Grappa, what are you doing? He shouldn't be trading futures. And he's like, what are you talking about? I'm just trying to figure out how much I can sell my beef for in a month. Like that's what these things were designed for, right, what else do you do with them?

And I remember that, like what else? His look on his face of like what else do you do with them? It was always served as a reminder to me, like let's just keep things really really simple, like really like the purpose, Like okay, so what what could we do practically? I think practically the first thing I would do is put space between you the stimulus and the response, so like I need to go buy this just a little space.

And this applies like new shoes new ever, like I can't believe how many things I have not bought just by putting space. And again like I'm not an anti buyer, like buy things like awesome that I want to spend extravagantly on the things that matter to me and cut ruthlessly on the stuff that I don't care about. It's just hard to get clear about which one of those

it is in the moment. So if I could just put a little space, a little space, so space keeping things super simple, Like just buy the SMP five hundred index at Vanguard, Like, go to Vanguard. They have a mutual fund called the SMP five Index. It costs you almost nothing to own and buy. The reason that matters is that gets you exposure to five hundred of the biggest best companies in the world. It means you're super diversified.

The way to invest that's better than that, there might be one or two, but the ways to invest that are worse or infinite. So like, that's an example, just keep it super simple, right. The other thing I would do I would love to see more of us doing is just in that space between our use of money and our our thought of using money in any way. And I'm talking about investing, spending, saving, whatever, and actually doing it, just ask why, like just like, well, that's interesting,

why am I What am I solving for? Here? What's the What? What am I solving for? Because if you like I'm spending because I want, I'm going to take my friend to lunch? All right? This is an example. My wife and I for a while we would go to dinner and a movie with friends, and we do this every month, and we were like one day we were like, why are we doing that? Well, we're doing

it because we like to connect with friends. Oh so going to a noisy restaurant and then sitting in a movie theater or where we don't actually ever get to talk to anybody, isn't giving us the connection? Oh? What would you know? Maybe if we got all the ingredients for dinner and they came to the house and we spent two or three hours preparing eating, sitting there. Oh turns out just aside benefit that was cheaper. That doesn't even That's not even the reason we did it. It

was a better expression of the value. And the only way to get clear about the value was to pause long enough to go, hey, do we really like going to the beach? I mean, my life stances would be yes, but your answer may not be right. Do I really need another pair? Of that, because I promise you most of the spending you're doing is too. We've given money a job that it cannot do, and the job is is to fulfill some other hole, right, to make us

feel a little better. It's self medicating, it's all of those that now you may need to do that, but if you could find what if I went on a walk instead, what if I watch the Netflix show I like instead? Like well I and all of that. Those answers come from asking, just pausing, noticing what you're gonna do. My favorite phrase in that space is like interesting and no shame, no blame, no judgment, just interesting. You're thinking about buying another backpack? You know you have seventy two

of those in the garage, Like like just interesting. And so those are the things that I would do. I know they're not as concrete, but I'm there's plenty of those concrete Susie Go reads the Orman's books if you

want concrete examples. To me, the frameworks more important because personal finance is so personal, right yeah, Oh my gosh, I am if obsessed with everything you just said because it's things like that we say all the time, like that was actually the dinner thing was an exact experience that I had when we were trying to get out of debt, and I was like, I don't want to give up, you know, doing happy hours with friends on the weekend. And I was like, what is the what

is the need I'm actually trying to meet? Because it's not like I value the actual like drinks and food all that much. I mean, I like them, but it's not the setting that I value. It's the connection with the people. And so how can I get that and fulfill that a hundred percent instead of just like so like that's an exact example, like I said all the time, So I'm glad to hear other people have the same

You're not going to listen to us. Listen to Carl, right, speaking of simple and straightforward, we got our next simple straight shared experiences radical middle of the Bill of the Week. That's right. It's for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you've paid off your mortgage, maybe your car died and you're happy to not have to pay that bill anymore. To Bill Buffalo Bills, Bill Clinton, this is the bill

of the week, Carl. Every week we invite our listeners or our guests to share with us their bill for the week. And we sprung this on you right before the interview, and so I hope this um half hour has given you enough time to prepare. That's it's such an interesting question. I am Luckily I'm kind of removed from this because my wife and my financial planner have kicked me out of these discussions, which is awesome. They

were like, look, we don't need you involved anymore. You just mess everything up by all this talking, talking talking. You just go do your thing at work. And so I don't. I don't, but the the oh, you know what just this morning? Apple is it? Apple one? I got like seventy two ads for Apple one this morning and it's a bundle apparently of iCloud music and TV

and all the other Apple services. And I literally two days ago was like, how come I get an Apple charge every Like there's six of us in the family, like our four kids, and how come there's an Apple n and like it's so hard to keep track of And I was like, oh my gosh, Apple one for the family will actually be even if it was just a tiny bit more expensive, like an extra dollar a month, it would be worth it to not have to deal

with the seven transactions, but it's actually cheaper. So I'm about to incur a new bill which will be taking all these little peck to death by ducks charges and bundling them into one charge. And it's even if it was a little more expensive, would be worth it to me. But it's gonna be cheaper. How about that. We are here for the more simple bill. I do love that

simplifying transaction the bank account statement for sure. If you all listening have a bill that you want to share, whether it's about bundling or not being pecked by tiny chickens, visit for bol Friends podcast dot com slash bill. Share your bill with us, you know we love to hear it. And now it's time for pew. I was reading our

reviews the other day. I was reading our reviews the other day, which is something I don't typically do, but somebody specifically said they enjoyed the like at the one of one of the best strikers on the U S women's team soccer team is I think it's Natalie, but her last name is Pew and when she scored. My daughter is a soccer fanatic. And we were at the game when the national team played here in Salt Lake and Pugh scored and everybody just goes, it's amazing. I

love that man. Okay, So this is the part of the show where we all answer one question, um, and we tend to get a little vulnerable, but we don't require that of our guests. Um. But today's question is like, what's a unique value that guides your financial planning, like a core value or something? So, yeah, the top of my so my second book was called the one page Financial Plan. Of the top of a one page financial plan is what I call I don't think I called it.

This is in the book, but what I now call a statement of financial purpose. And the goal of a statement of financial is to get underneath, like what's what's really driving all this? And mine is um time with my family mainly outside, and then service in my community and my church. That's really like that to me is the value that I want. Now, I want to I want to give a secondary answer to this because that's the value I want driving all my decisions. That's the

value I hope drives all my decisions. You know, it drives a lot of my decisions that I'm working on deeply is fear right, Like I'm still worried there's a lion in every bush. And I've done this thing that men my age were told we were supposed to do, protect and provide, and I've done it like that's been what I was told I was supposed to do. And so that's led to tomorrow. Like I don't open my email seventeen times a day because good news is in there.

I opened my email seventeen times a day because I'm sure that tomorrow's the day or today is the day that it's all going to go away, right, Because that's my job is to scan the landscape and make sure there's not lyons. And so this hyper vigilance has led to massive problems like just physically and mentally and emotionally that I've had to really work hard on. And I think I've been shocked at how many people relate to that.

And so I'm I'm unwinding that and making it more about no way and it's not actually there isn't turns out there's not lyon in any of the bushes, and there's always been enough and really that this gets slippery really quickly. When we get into the secret, which I think is the most dangerous personal finance book ever written,

this idea that the universe will always provide. But I think that is essentially what the Earth is saying, is like there, if we can just get clear about what we really need, having some for our needs, there's enough for everybody. It's it's when we get this need that more than for our needs, then there suddenly we live in a scarcity world instead of an abundance world. And so I'm trying to unravel that. So the value I want is time with my family mainly outside. The value

that's often driving my decisions is fear. Mm hmm. Thank you so much for sharing that. I think, Yeah, I I know a lot of people can relate to that, and so it's like, it's nice to know that somebody with so much expertise and so much experience still has to parse out that that like fear and logic, like going through that to know that it's not I mean, it's it's you're not a bad person. If that's like what you're making your choice is based on, it's just

something to identify into work through. That's amazing. How about you, Jill, While I'll match your level of vulnerability, Carl and Jen loves this round to be quite vulnerable. But I would say, and our listeners who are longtime listeners would know this. My values and what I hope that my spending is wrapped around is community, generosity and beauty, and a lot of things fall into that. There's many subcategories within that.

And so I engage with my finances at a deeper level at least twice a month, so it is at the forefront. But I can't say I'm always making stellar decisions.

Sometimes it's lifestyle creep that is drawing me to I want this, and I want that, and I want to have this, and and that curiosity with self does need to enter in of okay, but why and then what is that actually going to provide to me other than the potential of stress around spending more money When I used to be content living in a hundred seventies square feet, like, what is going on for me at this point? And

how do I get back to that sufficient level? But when I when I'm my my best version of myself, my finances are aligned with community, generosity, beauty, and that comes all the way down to the way that I budget. I made a spreadsheet that I find beautiful with really soft colors that it actually works. As I plug in numbers, the tally changes and I feel like a million bucks because I created this spreadsheet that I find beautiful, and so I love engaging with it and having this at

the forefront of my mind. That's yeah, what about you, Jen, Um? So mine mine is similar to your carl. Here's carl is to spend have more time with my family. So flexibility has been like a big goal in creating income and a level of investing that will will provide like being able to have work flexibility, but like not necessarily working hard enough to where we're going to retire super early.

I am coming off of, like we we transitioned from this like super saving mode to having a baby and totally pretty much ignoring um we were we were just saving one income without really any purpose um. And then when we were able to think again to like think about real estate investing and that that became like all consuming And I didn't any on any of the extremes were not I didn't really like I didn't like the

extreme saving. I didn't like the extreme disregard. I didn't like that backlane gave me anxiety, um, and I didn't like the extreme, like everything you had to put into getting real estate, like so so now I'm looking for like flexibility. I thought I had these things that were aligned end with my values. I thought those were the things that we're going that we're going to be the result, Like those were the plan, and now I'm kind of

finding a new route like that. I really just want to have flexibility in work and when we retire, just like saving enough to retire before and you know, eventually we'll need like a double knee surgery or something. I don't know, that's looking like it's coming. That's that's where I'm at. And I said this. I said this to a friend the other day, and it sounded so bad when it came out of my mouth, but he echoed

the feeling. It was like, I just want to make money and I want to do as little work as possible, and that I think it's the guiding value of my life and work being things I don't enjoy, Like I love this podcast, so it doesn't feel like work. So I wanna I want to like make money doing things I enjoy, and then I want to like go be with my family, which I enjoy. That will not make me money, So let's do it. Carl. We were already reading one of your books as part of our community.

But where else can people get more from you? Probably the best place to go is to behavior gap dot com and get the weekly newsletter. Um I my weekly newsletter is different than most in the sense that we took fifty two of our greatest hits. So these are the New York Times columns. We got feedback from readers from the New York Times, obviously hundreds and hundreds of emails. We refined the column and we narrowed it down. I wrote that column for every week for ten years. There's

five plus columns. We narrowed it down the fifty two best. So I like to think that the sub title of the be a reapp news letter, we call it the weekly letter, is better than the New York Times because we we we we took those columns, made them better, and so that's what you get. You don't get this timely tips and tricks and here's the news of the day. It's literally like, here's the fifty two best. And at the end of fifty two weeks, we may actually add

another fifty two. But right now, at the end of fifty two weeks, we say you've been all the way through, like there's start again. It's fine or run along. So the Behavior Behavior Weekly Letter is probably the best place. Oh that's yeah. We didn't even get into all of your drawings that are great, so yeah, definitely people should sign up for that and see those. You want more simplicity, get at Carl. Carl, thank you so much for being here. It's been a joy and a pleasure to learn from you.

Here's my my it was my pleasure. Thanks for the work you do and the great questions you ask and um super excited see did actually continue to make Yes. Sometimes you don't know what to you're going to get from, like a guest that you don't know. And I just love it when someone, especially with a platform as big as as Carl Richards with writing for the New York Times and two books like is so like deserving of that platform because he's such a good guy. I love it.

I love everything he said. Carl felt so relatable and I just experienced such alignment. And that's not to puff us up. I'll look at these great ideas, but I think it does affirm that, Okay, we're onto something good when others are saying it that come from very different backgrounds, and to hear also the expansion, I am walking away with new terms, new ideas, new perspective from what Carl shared,

and I'm so grateful for that. And I really do hope that you all join us in reading his book checking out more from him, because I think what he's offering is truly genuinely, authentically helpful and not just a platform for him to walk away a rich, wealthy person, but truly helping people understand and make wise stewarding decisions. So thank you all so much for listening, thanks for

also sharing this space with us. As many of you know, we also, in addition to this podcast, have a private community where we do monthly money challenges and we offer accountability groups the opportunity to engage with other like minded people. And we want to take this time to congratulate one of our members for a big win. This is Wendy. This comes from one day. They titled it, we recovered

nine eight dollars from credit card. So I was going over the budget numbers last night with my husband and finally reviewed the card with the balance. I know. Turns out there were things on there I had charged as subscriptions but forgot. We're there to the tune of nine eight dollars. Well, I canceled those suckers before I went to bed and moved the other expenses to the debit cards, so we can truly attack this debt by not creating more.

Not only that, but one of the companies gave me a refund of thirty seven fifty for the unused portion of the service. What a relief to not see those charges anymore. Well done, Wendy, as you're saying, it's not it's not massive, but it's these little chunks and little dings against that and not replicating the problem, just kind of plateau ing it and then taking stabs at it. It's excellent. And this is an interesting um strategy that you brought up, Wendy, because we're trying to pay off

credit cards. If our subscriptions are still coming out of the credit card every month, then you are kind of shooting yourself in the foot a little bit so too when you decide to pay off a credit card moving those subscriptions to your debit card, just for the time being, You've got to get control of your spending and pay off those credit cards before you can use credit cards responsibly. Again, moving those to the debit cards so that you can really focus on not going into more debt on the

credit card is so wise. So good job, Wendy. I hope others will will take note and do that today that the real heroes. Thanks everyone for listening. If you are interested and you want to check out our monthly challenge community, head to Frugal Friends podcast dot com slash club to see what challenge we have coming up next. See you next time. Frugal Friends is produced by Eric Syrian.

So what four and a half years in and I forgot to check my microphone, So apologies for my audio being different from the intro outro to the actual interview. You know, part of it was my mistake because after four and a half years, I trust you so much and I think so highly of you that I gave you the benefit of the doubt that you were recording natively in your mic. It was just a zoom that was off. I don't think that highly of zoom. I do think that highly of you, and I just I

won't make that mistake again. Lesson, learn, don't give me the benefit of the doubt. It's it. Mistakes are made, but it uh the it wasn't that bad. Hopefully not. Hopefully the message spoke through and you can get over how terrible I might sound. Christian works magic, though Christian dy he works magic. So maybe there are people listening to this that didn't even notice. Maybe they didn't could be Yeah, here's to you, Christian, the real hero, the real hero. Yeah. Bringing in full circle,