Budgeting Like a Beast with Jesse Mecham #619

NAB as it's commonly known what we call it. Millions of individuals have now used why NAP to get on a budget, which has allowed them to achieve their life changing financial goals. And so whether that's simply paying off debt or the complicated endeavor of getting on the same page as your partner, that's difficult. Uh. Jesse has likely thought more about budgeting over the past twenty years than anyone else out there, so we're excited to talk with

him about all the things that he's learned and observed. Jesse, thank you for joining us today. I am so glad to be here. Thanks guys, Jesse. We're glad to have you and the first question we ask everyone who comes on the show is what's your what do you like to sport on? We call it your craft beer equivalent because Matt and I we spend more money than most people would think is normal on craft beer because we

love it. But we're happy to do that because we're saving and investing well for the future while we're spending a lot of money on beer. So what do you what do you spend a lot of money on that maybe people might think is kind of crazy. Yeah, I wouldn't mix beer and what I spent a lot of money on, but I would say my my wood shop there is it is a it is a money pit,

and there's always another thing you can buy. I'm I'm currently in the shop for a floor or in the market for it like a floor standing variable speed drill press. So what are you making into this wood shop? Are you making? Like canoes? Ron swantson style? What are you doing? If I had these skills of Ron Swanson, I would have arrived. But I he's in real life. He is a killer woodworker's yeah, I mean making a beautiful handcrafted canoes. Yeah, it's insane. So yeah, anyway, my I have his book

here actually got good clean fund by Nick Offerman. It's it's excellent. But the yeah, I will make anything. But right now I'm working on shop furniture like I'm because you can kind of learn like it's if it's if it looks bad, it doesn't matter because it's all in your shop. So I'm learning a lot of the basics. I'm I'm taking like a general like basic woodworking course where they go through all the different jointry, kind of the foundational joinery. And I love just being a novice.

So I have a shop that looks like I'm a professional, and I am a novice, and I'm not ashamed to admit it. I just I think it's fun to get the new tools. So whenever I can squeeze it into the old plan, I do it very nice. So are you pursuing this purely out of just with it, you know, with it being a passion as you know, as oh yeah, an interest, not something that you foresee being able to sell. You know, fine, I would have ruined it. I don't want to ruin my hobby by monetizing. He's gonna open

up like a woodside stand. People are gonna be like I'm not paying for that, Jesse. Jesse might get so good that folks are saying, please let me buy that babe, that beautiful I will give. I will gift it to them. I will, but I refuse to transact in this way. I don't want to taint it. Don't take, don't ruin it. Jesse,

I love it. Well, let's kind of start talking about money, not just the wood, but so unlike most folks, it sounds like your parents actually had like a positive influence on you when it comes to, uh, getting you started down the path of personal finance. How is it that you first started learning about money? So, I, uh, my parents modeled it well. They modeled frugality well, I will say, um, they were really good at just saying we don't have money for that, we're not gonna spend money on it.

We we lived, I mean we were, you know, middle class, but we lived below our means as far as I could gather as a as a kid and kind of observe. So they were just very, very frugal. I used to think that the word vacation meant driving ten hours to Grandma's house. I didn't know that there were other options besides just driving up there and then literally one time, starting to read the Encyclopedia at a I got to avocus.

I didn't make it very far, but like I just boared on my vacation, so that, I mean, that's just what we did and I didn't know any different, and it was great and they were loving, and so you can't complain at all. But one thing that that my dad in particular did. I think I was fourteen, and he said, hey, you should read these books. And so he didn't just say I want to teach you about money. He's just like, you might find these interesting. And he

gave me a couple. He gave me Ramsey's book that was Financial Peace, and I think now The Total Money Maker was kind of there, his more flagship book, but Financial Peace was the one that I read. And Ramsey taught me not to like debt at all, to hate debt even as a fourteen year old, and I thought, okay,

that sounds good. And then he gave me The Millionaire next Door, another great one to kind of learn like it's not about what you see, but it's about what's kind of under the covers a lot of the time. And then the final one was the richest man in Babylon, which is probably my favorite overall, just those principles approachable. It's the same first one I would give, you know, I give my kids when they are like, hey, I want to learn something. I don't want to sit down

and teach him. I just want to say, well, here's a book. And I think as a kid it's easier to learn sometimes from someone else, and so I think it was wise of my dad just to say, well, hey, learn it from these you know, from these books, and um, it formed a lot of my early opinions. Some of them have developed over the years a little differently, but

it was early informative. And I am forever grateful that I I had a disdain for debt early on and avoided in college because of that, and that I saw early on that I should start with start with investing and get an early jump on it. So yeah, I will be forever grateful for the to the authors of

those books and to my dad for giving them to me. Well, you talk about modeling your parents, modeling the right behaviors, but then not being the ones to necessarily preach it at you, you know, over and over, and I think that's really important because I think modeling goes the farthest. Then let someone else do the preaching and maybe that's the best combo. And it's interesting you mentioned your kids too. You've got seven kids, which is uh as much as

Matt and I have to catch up. You need a spreadsheet to run that many kids, right, you guys would be fine? But yeah, well it's easier for us. I've got family five, has got family six, but you got it. You got a massive family. So how does that how has that impacted your did that like make you feel like you needed a budget? Obviously you started your journey even before that, but you have you found it to come in even more handy, haven't. I've been big of

a family. Well, honestly, the first the thing that made me and my wife's name is Julie, that that made us feel like we had to really be careful early on was we were we were dirt poor, and we were both in school and just eking by, and then we were gonna get married. And so combining these meager finances together it doesn't do any There's no synergy there.

You're just like, okay, now we both make I mean, there was just no win and we were actually paying more in rent than we would have been as single kids anyway. So I'm just like, man, Julie, we gotta be really careful. So we get married. I build this little spreadsheet that later became wine Nop, but at the time it was just for me and for Julian. We start watching everything really close. But the thing that pushed me to say, hey, maybe I could sell this spreadsheet

was it had worked for us for that year. We were able to start saving money and then um, we saw that a baby was coming. It was it was planned, but we were still not making a lot of money, like ten bucks, you know, eleven bucks an hour and trying to get through school and so to have a baby inbound, that was what made us think, Okay, we gotta try and figure out some way to let Julie exit the workforce, uh and have me be able to try and balance maybe earning some side money and finishing

at school. So the push of of providing for kids, oh, that was what gave us that that that drive, and so I'm grateful for it. It's not fun in the moment, but it does kind of squeeze the creativity out of you at times. Kicking the pants nothing like another human being being depended on your ability to manage your own

finances in order to provide for them. So that's certainly can be that, like you said, you'll kick in the pants, But like, what would you say, Jesse, to folks who or otherwise than just repulsed by the idea of making a budget? Essentially, I would love for you to maybe make a case for budgets for those out there who don't necessarily feel like it's something they need to do. Yeah, I mean I I don't even like the word budget. I wish that our company was named something really I

don't know, fancy, like it sounds like a perfume. Maybe I don't know, something different. Because people they hear the word budget and they think restriction, no more fun, diet um. It's just like everything is just going to kind of bear down on them, and maybe their their spouse or significant other tells them, hey, we need a budget, and

then it's like double worse. It's like, Okay, not only will be a budget, but you're going to be running the budget and I'm gonna be the one that's making all the mistakes and just nothing is good about it. So a budget is really it's just a plan. And all we really care about is that people are intentional with their money, and that's it. That's the end of it. We want people to love how they spend their money instead of having their spending just stress them out, strain

their relationship, suck the fun out of everything. I mean, people are so worried about a budget taking the fun out of life, But they will go on vacation with this like this low burn, like kind of simmer in the back of their mind as they're racking up credit card debt. They're just like, I know this isn't good. I know this isn't good. And so I'm trying to say, well, maybe try the thing where you save up for the vacation and you actually get to spend money guilt free.

So a budget is just a plan, and it's it's your plan and you get to make it however you want. But if it means that if you have to do a budget in order to have a pile of intention kind of like rising up behind your money, then that's that's what we want, and that's what we're going to call it. Were you got. You gotta love how you spend your money. If you feel guilty about it. There's a problem, right, If you're arguing with your spouse, it means there's a problem. And so we want to get

that spending lined up with your real priorities. And then man, you're off to the races that that's when money becomes fun. And I don't know, I can't imagine any other way. So do we just rename you need a budget? Two? You need a money plan, wineamp something like that, or the can thing. I can you know, mystique or something I don't know. Okay, all right, well, yeah, you let me know when you're ready for that rebrand. I'm curious to hear how cool water I think when it's the

middle school was a good one. Uh well, Jesse, some folks in the financial independence community, they're just supernaturally frugal, right, and so they would say, I am intentional with my money, but I don't feel like I need the budget part. And so based on what you just said, what would you say to someone like that who says, like, I'm handling things pretty well, I've got a huge gap between incoming and outgoing um investing a lot for the future, Like do I need to sit down and actually like

mess with the numbers every single month or every other week. Yeah, I know, now they don't if if they're if you have some massive gap between you know, money in and money out, and the net worth keeps climbing even if the markets doing what it's been doing, especially, then you're good to go. You have a plan and the plan is working because the score that we're keeping is net worth, and especially I would say the score is how much you are sending to your investment pile. Not so much

fluctuations in the market. You can't totally control that, but the fact that you're you're you know, you've got a big shovel and you're flinging tons of money over the wall into that retirement bucket. It's you're winning. So I wouldn't change a thing now for someone that's like, hey, Jesse, um my net worth it's you know, I'm not really saving a ton, but I know that I'm frugal. Then I'd be like or they say, or they like, already how much? Yeah, they I already know how much I spend.

I'm like, no, or I I I know that I just I eke by anyway, So I already am tight. I don't need to Look, that's all just ways of saying like I don't really want to be aware, or I'm actually unaware, or I think I'm aware and I'm not. All those things we want to make sure we iron out. So but for the person that like literally their money just keeps growing and growing, Yeah, you hit it, You're

you're doing it. You just don't. You aren't super granular in your plan for your spending, but you're you're nailing it on those big, big movers, you know, those big goals. Then yeah, you're you're good to go. I wouldn't have you change a thing. I don't want to say those people are unicorns, but they're not. It's just I'm not worried my market's going to disappear by just you know, Yeah, that's that's maybe one percent of the population that really

isn't that isn't that realm of managing their finances. But I do think it's important to mention that that some of those folks is exist and they might not need a budget. In the same way that if I could interject one more thing, um someone that's uh, you know, Elon Bezos, these massively wealthy people, they still hopefully with all of those resources hopefully are being extremely intentional with

all of that value that's there. So when when you have something that's like I make tons Jesse, I don't have to worry about it. I would kind of turn around and say, listen, man, you you have been gifted this, You've worked for it, however you want to say, this came into your possession. You have something tremendously valuable in

this world. Let's not be so cavalier and so flippant about the fact that you have this massively useful resources that could potentially be, you know, deployed to have some great effect in the world. And I'm not even meaning, hey, you know, shame on you for not giving it away. There are plenty of charities that I'd be like, oh, that probably wasn't a great use of money, if you know, Like,

I'm no judge of that. But just let's take you and make sure that all of your intention, all of the best parts of you are Chamma behind that big pile of money, and then it becomes something great and grand. Let's not have it just be frittered away. So for those that have a fantastic pile of resources, I think it's incumbent on upon them even more so to be really intentional, really thoughtful, careful about what they do with it. Yeah, maybe maybe that looks like a budget, but like you said,

it's it's having a plan. And I think even those folks would be able to benefit from a plan because you take a high reformer and you put them under the direction of an amazing coach, and all of a sudden, they're doing stuff that they never thought was possible. Right, if making millions came easy to them, we'll just think what you could do otherwise. But I like what you said to like from a at least from an investing standpoint, they're they're kind of knocking it out of the park.

But I mean, one of the reasons that are one of the ways I guess my wife and I were able to Kate and I that we were able to get on the same page just when it came to budgeting, is because we saw it as a way essentially, as a way for us to have some freedom in how it is that we spend our money, because I think, I mean, my natural tendency might be to not just

be frugal, but just to seriously deprive ourselves. And yeah, exactly, we saw an ability for us too, Like you said, be intentional with our money, but just we had the freedom to then spend our money in the ways that we said we wanted to. But maybe in practice we found that to be harder. Moving it from the head and what we said we're gonna do on paper into reality for us was difficult. Yeah, absolutely, it's it's it's liberating to have the plan allow you to do things.

It's weird because you set up the plan, you agreed to it, you wrote it down a week before or whatever. It's weird that we suddenly divorce ourselves from the plan as if it's not us, but it is. But it allows us to kind of push, like differ back to it and say, well, what did the plans say I could do all the plans that I could buy these fantastically expensive boots that will last forever. And I say that because it's a real example that I'm in the

market for, so splurge again. But I you know, it's like, Okay, this, this would be really cool. I'm really excited about this. But push came to shove. If the plan weren't telling me that I actually could do it, I think I would struggle with it because I'm just naturally wired to squeeze, you know, squeeze those dollars. So I love that it gives you the permission, like you give yourself the permission, but in this indirect way that allows it to feel

a little more free flowing. Yeah. Again, I don't know what percentage of the population those natural, ridiculously frugal people are. I think Matt and I might both be those, and and actually making a plan for our money has helped us feel free to spend in the ways that we otherwise would probably not do. And it's really it's helped my marriage out because then I'm not like saying no to everything, even though those are things we want to do.

But I guess, Jesse, I want to I want to know more too about wine app and you talked about kind of how it started with a spreadsheet that you created just to be able to get by making very very little money and to help your wife stay at home. But how did it turn into a fintech company and a wildly successful one. I mean, I saw at the end of last year the Wall Street Journal said why NAP was the best budgeting gap, Like, that's huge, that's like, yeah, so,

so how did it? How did you get to that point? Uh? Well, you know, almost twenty years in you get the Washer Journal to write about it, you know what I mean. So it's like, yeah, like that would have helped a lot. But I've always loved the topic. I've always loved teaching people about it, and I am a teacher at heart,

and so we've always had the model. Now, the software, the spreadsheet has been long gone as of like I think, oh six or something, but then we had some really um you know, some great software that you would download and install and paste a license keeper people that grew up without apps and whatnot. But then the apps came along, and now the web app and so it just keeps. The software keeps kind of hopefully keeping pace with what

technology is allowing us to do. But the method behind it has has always been kind of like the special juice, the thing that makes it work. So we always say that the software is second fiddle to the method, to the thinking. And if someone can take what we teach method wise, these four rules, and I'm sure we'll get into later, but if they can take that and run with it, no matter how they implement it, it'll work really really well because the method works very very well,

even though the technology has changed. There are four rules in particular that you wrote down a long time ago. So we're gonna talk about those rules. We're gonna talk about them in stone tablets. Actually, we're gonna talk about maybe some just general budgeting strategy as well. We'll get to all of that right after this break. All right, let's keep rolling. Let's talk about budgeting like a beast.

We're still talking with Jesse Mecum And if there's Matt anybody to cover this topic well with us, it is Jesse. It's the guy that's a woodworker who's saving up for some nice leather boots to wearing his woodshot exactly. I don't want to don't want to puncture those toes. It's like some mistake happens or anything like that. But Jesse, you talked about the four rules. You're alluded to them before the break, but that's where everything starts, when it

comes to the wine app software. Can you give us an overview of those four rules and why you think that that's kind of the revolutionary, like Matt said, secret sauce to making budgeting work for people. Yeah, So I mean we I have mentioned earlier that we want people to love how they spend their money, and spending is just decision making at the end of the day, and people try and dress it up and make it some other thing. That money is different, but it is just decisions.

And the method that Wine teaches is four rules that's essentially just to help you make better decisions. So our first rule, we call it giving every dollar a job. And what that means is, if you decide to spend money on you know, tool A, you can't spend money on tool B. If you decide to go out for sushi, you maybe can't also go out for you know, drinks another day. It's that if I spend here, I maybe can't spend over there. And it's the it's acknowledging that

we have finite resources. And while while finance capital left large, industry wants you to feel like you have infinite resources and you can spend and swipe and buy now, pay later and all that stuff. They want you to feel like you never run out, but you have to acknowledge that you run out because that helps you crystallize what your priorities are and start to make better decisions. So when you operate with a zero based budget, whether it's with wine app or any number of other tools that

do that, it's that idea of it's finite. So with that in place, you're now weighing your priorities and good decisions come from that. We then moved to rule two, where we call it embracing your true expenses, and essentially that's looking ahead and thinking about large or less frequent expenses and then dividing those up into more manageable monthly amounts.

So I mentioned sushi. It's kind of like me saying, all right, I want to go to sushi today, but also I'm looking at Christmas that just happened, and I'm saying, oh, well, Christmas is in twelve months or whatever. Is this gonna work? Is Christmas and sushi today going to work? And people

don't make they don't do that kind of calculus. Or it's a lot like if you're standing, like I don't know, in the tire store or something, and you're tire just blue and the guys there and he's like, okay, the four tires are gonna be let's let's pray that's they're only like eight hundred bucks, right, the four tires are gonna be eight hundred dollars, and you have the money for the four tires. So you're like, man, I'm feeling good.

But it's like a pizza delivery guy walks into and he's just like, Jesse, I know those tires, your eight hundred, and you have the eight hundred, but don't you want to spend a hundred bucks on pizza for your kids and their friends and maybe they're friends and just have some. And you're like, uh no, I absolutely do not want to do that, not because of all the kids in the house, but because I want to pay for the tires.

And so it's this interesting situation where with rule one, we're prioritizing and with rule two, we're prioritizing with future priorities and current priorities, and they're getting equal footing during our decision making process. So Fae, my my youngest daughter, I have to refer to my spreadsheet to make sure I get that straight. But you know Faye, my youngest daughter, she she's like, Okay, I want to say about for this Christmas gift for Faye, and I also want to

buy this thing right now. And suddenly you have a really interesting prioritization. That's happening. Now do I sit there, I'm always like, oh, am I going to take a gift from face Christmas? No, of course not. But as

you're doing the decisions, you are. And so this idea of future you and current you and then future Julie and current Julie, we're all sitting at the table, you know, table together negotiating and there's one that's like I want money for tires, and other ones like I want pizza tonight, and we're weighing that. So between rule one and rule two, decision making starts to really improve. I'll pause there just in case you guys have questions. But I'm like an

Automa town. If you put a quarter in me or ask me about the four rules, I just kind of go So I get, yeah, let's go ahead and jump in here before you move on with the additional rules, because you know, when you talk about giving every dollar a job like, it makes me think about just budgeting

in general. Right, Like, if if we asked you to define the word budget, I'm curious to hear what you would say, because you know, you did say a plan earlier, but it seems like at the heart of budgeting is the first rule, giving every dollar a job where you are just being intentional when it comes to like you said, the decisions that you're making, is does that seem accurate? Yeah?

I think I would say if I were to define I've never done this before, perhaps, but if I were to define it off the cuff, a budget is a plan attached to finite resources given a specific time frame as well, you know, when it comes to racing this true expenses, because I think a big part of those those true expenses is the fact that I think there's so much in our life that feels urgent, that seems urgent, and so oftentimes we're just looking to whatever pops up

in front of us and we think, oh, okay, that is now something I have to tackle, That's something we have to spend money on, And it's just about it's almost about getting in front of that a little bit and knowing that it's on its way. As opposed to you just reacting to something passively. It's proactively managing those expectation is absolutely to the pike. Yeah, absolutely, it is. It is completely and totally proactive. You know, if you manage your day the way you manage your money. I'm

speaking to that. Don't do it well, um, you you'd be a wreck. You know, you're a train wreck. You're just reacting to everything that comes along. At the end of the day, you're always like, well, jeez, I didn't get the important thing done. That happens with with people's money all the time. They're just like we managed time. We're just trying to manage another finite resource that also can essentially travel through time, and we're looking at how

our future will look. How are you know the current environment looks, and we're trying to weigh that together. It's it's interesting to do it this way because what we want people to get in there kind of in practice is not that budgeting is where you're forecasting your income. You're saying, I will learn this, I will learn this. We tie it back to the finiteness of their money, and we say, how much is in your checking account right now? Okay, what do you want that money to

do before you're paid again? And that question whether you're making a d grand, year, three grand, fifty grand, doesn't matter. That question and starts to push on the priorities and starts to force the decisions. So then you can say well, okay, I've got all these current needs, but then we get future you to come to the table. Also, it's like, well, you know what about in three months when you wanted to go on vacation. You know, do you do you

want to throw some money there. So it's more about allocating not just for now, but also almost like you're allocating to these different jobs along a timeline, and in that way you can be be really ready for the future. It's funny too, because people mentioned when they've started using wine up for they've used it for a while, they stop needing the traditional kind of personal finance emergency fund

because they're finding that they are having fewer emergencies. Because the car tires that wear out, that is an emergency only if you don't have the money. But if you do have the money, it's no emergency at all. Or if the h v a C goes out or property taxes are due, it's whenever we have the money. We never label it an emergency. We're just like, well, now, if physical harm is you know, if there's a fire, okay, yeah,

that's an emergency physical harm. But when there when the financial ramification can be handled by cash on hand, we're pretty resident reticent to say like, oh, yeah, that was an emergency. Oh no, no no, it really wasn't you know that you have the money. Yeah, we're planning ahead for some of those known irregular expenses to like car tires, right, that's I don't know, every fifty sixty miles you're gonna need new new tires, and so that's something you can

kind of start to plan ahead for. Or a new roof. You know, the timeline of a roof is twenty five years, but you can see if your roof is starting to get decrepit. It's not typically this massive unknown I need a full roof replacement and I had no idea what

was coming. And some of those things that we we like to categorize as an emergency, but it's usually just a lack of preparational, lack of planning and okay, but I want to knowe to Like the one of the things that we get questions on a lot, and we try to answer the best we can is for folks who are paid irregularly, right, folks who work for themselves, they run their own business, or they're a contractor, Like, how should they think about budgeting when they're not sure

how much money is coming in month to month, whereas the person gets paid every two weeks. It's it's so much easier to know exactly how much you're gonna have on hand. So never ever, ever budget with money that you don't have on hand. Never forecast. Now, if you want to dream and kind of plan big and start to say, like, oh, what would it be like if I landed these three other clients and I sold these three houses or whatever. Yeah, you want to do that

kind of big picture planning and dreaming, that's cool. But when it comes to decision making about your spending, you only ever talk about money that is in the account, not that you're going to get that is there already. So for a variable income person, there's there's that rule is number one, do not plan with money that you do not have in hand. That's that's the first. The second rule is, because your income is variable, you have

to build more buffer. And that's kind of jumping to rule four, but you have to essentially build more runway for yourself, just more breathing room to allow yourself to roll with the fact that it's it's not you know that it is irregular. Um and I I can. I mean, I've been down that road for a years, you know, years and years where we had a very variable income,

and it just is what it is. So only ever plan with money you have and build more buffer than your friend that's paid every two weeks by the city, you know, and that's just that's just your reality. But once you do that and you start looking to the future with rule two, and when there are flush months because variable income, a lot of times people are like, oh, variable income is tricky, because when I don't have any money,

I'm I have a problem. They never mentioned how they had a lot of money two weeks ago, you know, And so it is just up and down, up and down. And so when you are flush, when you are like, oh my gosh, honey, we are rich, your first thought is,

let's celebrate. We landed the big deal. Let's celebrate. And yet cool do celebrate, but also recognize they're going to be some lean times and do a little bit of like Joseph and Egypt where it's like seven years feast and famine, and start to look ahead and say, well, you know what, I'm gonna fund half of our mortgage for a month from now, and then three months later you're like, I'm going to fund the rest of our mortgage for next month, and I might fund half of

our mortgage for two months out. And we'll get people that are running wine app that are on very extremely variable incomes that have funded their kind of their core you know, must have fixed expenses. They've funded them three, four or five months out because they know that there there can be some lean times. But and I'll just

add one little thing just to pitch for this. When you are operating on a variable income and you've eliminated the variability in your stress level tied to it life changing, well, you think that the biggest reason to make this plan, Like is there anything better? Is? Yeah, we want people to get their money together. We want them to be

confident and how they handle their money. But the biggest problem when you're not confident with how you hand your money and you are living paycheck to atcheck is the stress. The rain cloud of stress that hangs over you every single day and it's weighing you down. Yeah, and it makes your decision making in your business and elsewhere. It really has a negative effect on it. You start to be really um, you react really quickly, um, you take

clients that you actually don't want. Um, you don't stop jobs that you hate that are low profit because you're just taking anything you can and we want you to be choosy, We want you to be really selective. We want to be making the best decision for you and your whole life, and all of that starts to kind of be hurt when we're just so stressed out and

so reactive. So those two rules fixed variable income. You kind of alluded to this, but we can We'll give you a chance to get back to rules three and four, but we kind of touched on how that variable income having more cash in hand. That that's rule four of the four rules, right, Like you're talking about aging your money, you're about you're talking about, like you said, only spending money that you have on hand, and in some ways, like when it comes to that variable income, you're kind

of like pushing that money off into the few. Yes, you know, it's it's money that you're you're you're marking for future purchases, like you said, must have things like a mortgage, paying for food. So we kind of covered four. What's the third rule that you think is important for folks to keep in mind? In order to have a successful budget. Yeah, and remember we're talking about really good decision making. It's just a decision making framework to make

sure that spending lines up with priorities. And that's where the magic happens. So if we're giving every dollar a job, and we're also looking ahead to future dollars, and we're

giving those jobs and we're weighing our priorities. The third rule, it's interesting that we have to have it be a rule, but we call it rolling with the punches, and it's essentially saying, uh, be flexible, change your mind if you need to as new information comes in, change the plan you would alluded to, like a coach that can really capitalize on someone with a lot of great raw talent. And there's also the coach that has a really solid

game plan. And then as soon as the ball is hiked or the tip off happens or whatever it is, as soon as that happens, the coaches making adjust ones and you're seeing how your opponent is reacting to your plan, and you're reacting to that plan. And it's this big game of chess, which is another great example of reacting and acting. And so we want the plan that you've set in place this budget, we want you to be flexible. Rigid budgets break, and flexible budgets last a long long time.

Too many people, first of all, they've never budgeted before, and so they think that they're just going to suddenly be this like wunda kint, that's gonna be like, oh I got this nailed and you don't. So you want to give yourself lots of grace. And when we talk about being flexible, give yourself the flexibility to say like, oh I thought I wanted to do this with my money, but then my friend called me and they said, hey, should you know, do you want to come out to eat?

And you're like, yes, I do. So reallocate some money, shift things around, change your priorities a little bit. You're you're good to go. You know. It's like you're planning a beach day and then it starts to rain and you think vacations don't work. You know, we don't like no, it's just that it's raining. So you just make some adjustments and keep rolling. Yeah, okay, so quick follow up here.

Would you recommend for folks to revisit their budget every single month and make small tweaks is this like a quarterly thing. I say this because I recently my wife and I had are big end of the year sort of meeting where we look back on it. Yeah, we look back at the past year when we know we make some of these larger changes. But yeah, I'd be curious to hear your thoughts on making these adjustments, how

often they should be and to what extent. So it depending on how much progress you are trying to make and how much room you have between how much you spend and how much you make. So if you have a lot of room in there, then you don't need to be quite as engaged. You don't need to be

you may it's still still may serve you well. But as people are really trying to transform their finances, maybey're trying to get out of debt, They're trying to reach some financial goals, and maybe not in the same spot you all are or your listeners are. They need to be actively in their budget. I mean a lot of people like to at least weakly sit down and say, okay, where are we at. But when someone is first starting,

just be be in the budget every day. Replace Instagram with scrolling through your categories and being like this looks good. This looks good, And when you're about to spend money, you want to look at the app and say, well, can I spend the money here? And if you can spend it joyfully, no guilt recorded, or the bank, maybe we'll send you the transaction we hook up at the bank or whatever. But at the end of the day, you want to be actively always kind of reallocating based

on how the spending is shaping up. As you get more wiggle room in the budget, this becomes less necessary. But if you are trying to make real, meaningful progress with your finances, which means real behavior change, the more frequently you are in the app kind of exercising a muscle that's been dormant for a long time, the better results you'll get. Yeah, that makes sense. It's like the longer you've been doing anything, the better you get at it,

the less intense you have to be about focusing on it. Um, I want to ask you to You just mentioned scrolling on Instagram, which is a problem for a lot of people. When it comes to that could be like a budget buster in their lives. The rise of buy now, pay later, or someth thing that we have talked about a lot on the show We Hate Its start getting ads for nice boots now they just get them, Go get them, guys. It's going to spend some of the money on this stuff.

So so it feels like everything around us is conspiring, leading us towards making worst decisions, towards money outflowing. Do you do you feel like it's harder for folks to resist impulse spending these days, and do you feel like that's part of what's leading leading to like an inability for folks to budget and to to come up with a good plan for themselves. Yeah, it absolutely is. It's uh And I don't like um framing it as like you're you know, you're a victim of the the man,

the system is out to get you. At the end of the day, I have to side on the on the side of take responsibility, take action. You can control your situation. You can change, because anything else would be a disservice to a person that desires change. Right, Um,

so you can change, you can do this now. Conspire ring though, I love that word because I mean I'm a profit seeking business owner just like everyone else, and all of these all this financialization of everything is for profit and you can say it's good or evil or whatever you want, but it just is. So knowing that they're kind of out to get you does help you maybe feel a little bit of motivation to be like, oh no, you don't and a little bit of like

some gumption that might come along. So that could be helpful. But you also want to make sure that when you do want to spend the money, that you enjoy it. So I don't want to I don't want people to to associate spending as bad. It's not. It's just spending when it's out of alignment with what you really want. That's that's where we don't want to have all them misses. And again that's where the craft beer equivalent for us, that's something we talk about all the time on the sea.

That is something we hammer home, like find the things that do move the needle for you, because there are there's there's a lot of deprivation mentality in the personal finance space and we don't want to contribute to that. Jessie, I'd love to hear your thoughts on lifestyle creep as well, because like, as individuals make more money, like I think it's it's fine to use some of that to like give some folks more breathing room to spend to maybe

not have to revisit their budget quite as often. But it can also be a slippery slope, right, And so like, how do you want people to react, say, when they get a pay raise, when they see their income go up? How would you encourage folks going back to a word that you've already said, prioritize how it is that they spend. Yeah,

I wish I had a better answer for this. It's no different like if you get double the money all of a sudden, you just got a sweet raise, I mean awesome high five, Like, let's this is awesome, you know, so you just gotta go back and say, okay, how much you know, what does this money need to do before I'm paid again? And now you have more money, and so you think, well, what does this this money need to do before I'm paid again. I don't like the phrase lifestyle creep. I used to use it all

the time. It's one of those things I mentioned early on where I was like, oh, you know, you should just always be ending less, And lifestyle creep makes it sound like it's snuck up on you. Um, it just kind of like it sounds creepy and that seems negative, so um, I don't like anything about it. I think when people are talking about lifestyle creep they're really talking about the the slow, almost imperceptible misalignment of spending and priorities. And with that, I'm like, I'm on it, like, yes,

let's get rid of that. But if you're saying, hey, Jesse, you make I don't know how much more than when Julie and I when we first started wineap I mean, gosh, I don't even know, guys, ten twenty thirty times more. I mean, it's in some insane amount. Are you saying that I still should be living in the same basement apartment that gave us respiratory issues the whole time? You know? And it's like, well, no, no, that's okay, you know, but we just don't want life. It's like, when is

that line drawn? Well, I'm not going to draw the line for your listeners or for you guys, and it's up to everyone too, especially when you're sharing finances YouTube hand in hand. You know, you grab the sharpie. Actually it's not a sharpie, it's some in erasable and you draw the line together, and then you recognize that you're going to revisit it regularly every year. I promote the idea of a budget burned down, meaning you just you

drop all assumptions. It's like, should we have health insurance? Should we not? You know, of course, get get catastrophic health insurance? Should we rent or should we buy? Should we have five roommates or should we get rid of our five roommates? Should we get rid of all of our cars? I mean, just burned down every single assumption to kind of start fresh. And it's a way to make sure that this lifestyle creep or misallignment of priorities

and spending hasn't happened to you. I mean it will have happened, like it happens to all of us all the time. It allows you to rethink what you truly love. And we trually want to spend money on right because we get used to doing things and we that we continue those things in perpetuity. And we might say, wait a second, the second car doesn't matter to us anymore, but the trip to Europe does, and so I want

to strip that out. And that's a big, massive change, but probably in reality, the same amount of money that you're gonna spend in a year. So I think that's a really yeah, really cool concept. Yeah, Jesse, I want to hear your updated thoughts on debt because you just talked about how some you talked about at the beginning about reading Dave Ramsey and how maybe that influence your view of debt. But I wonder if that's changed. Well, we'll get to a couple of questions on that with

Jesse Meekom right after this. All right, we are back. We are talking about just the different ways that you can budget, the different strategies that take, whether or not you are using a specific software or not. Uh, and Jesse, just before the raik Joel brought up debt, let's let's talk about that. I'm curious to hear your thoughts on credit cards specifically, right just because I mean, you know you're massively pro budget. Does that mean you are anti

credit card? What is the what's the widenab approach to credit cards? So, um, I'll start with the wine I've approach. First. We are agnostic as to the spending instrument you use. Now, that means that we done our best in the software to create a system where a credit card acts like cash because we've talked a lot about finite resources and a credit card lets you not acknowledge finite resources. And people can say all they want about well, I do

this and I always pay it off. But at the end of the day, you are spending money and it's not money you have. Now you can say, oh no, it's in the checking account, but the cash has not left your system yet, so you just straight up that's

how it is. Now. What we've done in wine app is tried to make it act like cash, where if you spend on the credit card, let's say hundred bucks for groceries, Um, no cash left your system, but we take a hundred dollars from your grocery category and we move it to your credit card payment category, so that when that you know, when the credit cards do or whatever it's on auto pay, if you're doing it, well,

it's just the cash is there. So we've done our best to say, hey, this, this is, this is like cash. Treat it like now. If someone's coming off of a lot of credit card problems, I say, just don't use them for a while, like, hey, that though they bit you already, Like let's not let's not mess with those for a while. They are more complicated than just swiping with a card and having money go out. Um, this psychological element, absolutely, the reconciliation is more complicated. The bank

transactions come in and do weird things. Sometimes a refund will hit and it hit from it hit two months before, and you'll see the refund go back, and so you'll be sitting there with your software like what happened. It makes it more complicated. That's bit me in the past.

So I say that all to be like, we're trying to get the credit card to not be a credit card in our system, which is funny, which just tells you how negative they really are because we're trying to I don't know whatever the opposite of negate is this negative thing. And um, that's just it's telling my personal experiment this year, and this is this is early days.

But I, um, I didn't cut our credit card or whatever I threw in a drawer, but I moved all of our spending off of what was basically our primary spending card. For Julian, I'm and we are using our debit cards. My theory, my theory, and I don't care about the rewards of the points like, there's one way to tell there's a little bit of a diversion. There's one way to tell if banks like the rewards or don't like the rewards, and it's that they keep pushing

the rewards. So the fact that they exist, they exist. They exist, and the banks are wildly profitable institutions. So you can say, oh, Jesse, I'm not a sucker. I don't pay those rewards, but they still get paid every time you swipe. Every time you swipe, a bank get a banker gets its wings or whatever. However that goes right. So when when you swipe, you are giving the bank money because they get a cut. They get a little cut. And there are a few people that there's a processor

that gets a cut. There's a gateway that gets a cut, and there's a bank that gets a cut, and sometimes there's another bank that gets a cut, like the issuer and then the holder. There's are there's weird words word but like so many people have their fingers in this pie.

That's these transaction fees that we all pay that the merchant pays on our behalf that we all end up paying because the merchant's paying it, right, if if you assume that you're in a fairly competitive market, so in that instance where we are paying it, so when someone says when I get one percent back, well the bank got more than one percent for you swiping, so there's

still totally okay with this. So that's one way to view it, is just like, oh, maybe I maybe that the banks are okay with this, not just okay, but that they love it. So that's one thing. The other thing you could do is say, well, who pays for all these rewards? If it's not me, well, it's someone that's paying late fees and interest. And so you might approach it from an altruistic sense, which, honestly, to be

totally frank, it doesn't like move me. I'm just like, I'm gonna do this because I don't want someone else to have to pay for my reward. It doesn't. But I know a lot of people that for whom that really is the moving factor, and they just say no, altruistically, I don't want someone else that's struggling to be paying

my reward fees also an interesting view. There's a third view that I'm curious about from my year of experiment, and that is we've always talked about how a credit card is handled in wine app as if it's a debit card, as if it's just cash. So we kind of feel good about it. And so we're like, whenever you want something, you just will adjust the budget to

make sure it happens. And if you're using a credit card or not, it's fine, but you're always kind of saying, I want something, I make the budget allow me to have that thing done. My theory is that the credit card specifically might be upstream and be actually affecting our wants. And this is early for me, so I'm gonna I'm putting myself out there in this way not fully formed thoughts.

But if the credit card, if the use of a credit card actually affects your wants center like your dopamine hit center, and there's good research to say that it does, then it's actually affecting your wants, and then you're forcing your plan to adjust to this newly influenced want that came about because of credit card usage. So man, that's like another level level deeper right there. Yeah, And so

I'm just curious about it. So I'll be back next year or whatever, and I'll let you guys know that I'm like filthy rich now because I don't use it. You just you know that's not gonna be the case. But I will say one other one other win is it's far simpler. It's just far simpler. Just to have one instrument that you use. Fraud protection on debit cards is as good as it's ever been. So I don't that one really doesn't hold water anymore like it did,

you know fifteen years ago. Well, you know the points guy, if he was to talk to you, Jesse, he'd be like, I guess you don't want that free trip to Tahiti, bro, Like, what's your problem? You are telling? Well, you're talking to a guy that has literally millions of points because because we spend in the business where we know in business you don't even you can't even have corporate spending without it being on a some kind of a credit system. And so even if you try and avoid it, you

you almost can't. It's like built into all of your corporate spending. Employees have cards and things. So yeah, you're talking to a guy that has loads of points, and you know, does it make us spend more on the business? Man? I sure hope not, because those millions of miles are way more expensive than being able to spend less. The fact that the banks love it so much. That's as my eighth grade uh, you know, as my eighth grade daughter would say, that sounds a little suss you know. Yeah,

no it does. Yeah, I totally get where you're coming from. And I think it is an interesting thing to consider. Um, And I think you make some good points, and it's worth thinking about whether or not the we're being short sighted credit card usage. And I think I think some people, a lot of people probably are. And but I want to know too about maybe your take on like a

bigger debt question, like good debt versus bad debt. Some people would say, we've had, for instance, Michelle Singletary, who writes for the Washington Post, who we respect, a ton who's been writing about personal finance for decades, and she says there is no such thing as good debt. And then other people would say, oh my gosh, you have a mortgage or two and a half percent and inflations you know, running hot at seven percent right now, you better just hold out of that thing. That thing is

good for you. Do you have a take on that? Yeah? I, Um, it's it's more of a personal take. I um pay off my mortgage as fast as I could when I when we bought our first house, and then we sold that house and we bought a more expensive house, and I had a mortgage on that for a few years and paid. I just wanted to pay it off as fast as I could, so then I was sitting mortgage free with the first one, so I kind of jumped ahead and we bought a town home as like a rental,

and so I had a I put down. This was back when real estate didn't cost you like your firstborn. This is like two thousand and twelve or something like that, and uh so I got a mortgage on that and it was kind of my own. It was our only mortgage. And then I bought another town home and end up with with four town homes that we're all over this period of years with very modest mortgages, totally cash flowing.

At the end of the day, after we'd paid off our personal in our second home that we had bought again, I still ended up just paying off those even the real estate. So I just don't want to be stressed like I and that's that it's worth so much to me, and I do benefit from a business that's profitable, and so it's not like I'm trying to make real estate my my livelihood, where I'm really like I got to eke out finding like real financial return from this UM.

And so in that instance, I can be more handwavy about the financial upside to leverage UM. But push comes to shove as far as personal goes, I just I've never liked it. I feel like it UM it messes with your decision making in a real way and not in a good way. And so I like the idea of paying cash for stuff, saving up for things. And uh, I just I've just never seen anyone say, you know, gosh, I really wish I were in more debt. I just

I just never hear anyone dropped that line. So I guess I I agree with your friend at the Washington Post. I don't really think that there's good debt. I think if a lot of people could own their home free and clear, they absolutely would, regardless of how crazy low, artificially low, like crazy low, those interest rates are. I mean, that's that out in and of itself is a financial camera almost how low they've been for you know, it's like our age that you know, I'm guessing we're all

about the same age. We we think it's normal to be at that rate, you know, two, three, four, And that's nothing that's nothing normal about that. It's just that it's all we've known for the last twenty years. We're even talking about, Oh I saw an article today, interest rates are so high and it's curbing the house of market. It's like they're not high historically. They're high compared to what we've experienced lately over the past, you know, a

few years, but they're not historically high. They're they're still pretty low. Absolutely. And we were talking about you know yapp specifically, the software that you founded. How can folks learn more about wine app? And I'm actually curious too, Yell specifically you have a thirty four day free trial. Uh so, ay, where can folks learn about wine app?

And b why why is it a thirty four day trial? Ye? So, the they can learn about it at windam dot com and uh, take classes, jump on YouTube, watch the videos. It's a different it's a really different way of thinking about money. So I would hope that they wouldn't just be like, oh, I used to use Quicken, so I'll just replace it like it's different. And so you really want to make sure you see where the thinking is coming from and then look at how the tool integrates

with that. As far as the thirty four day trial, we want you to see how it works with a month rolling over. So no matter when you start, if with a thirty four day trial, you'll always have a month plus a little to kind of see like, oh I set aside money this month, that money is available next month, and they can start to see that rule to in action and things starting to you know, cash starting to build up. It's liberating for people to see that.

So yeah, thirty four day trial all day long helps people kind of make that early connection on what it's going to be like to save up for stuff, you know, like save now by later instead of whatever. Oh gosh, let's make that a trend. And and and it's always free for students to write. Yeah, we we give a free year for students, so okay, graduate student, high school student.

And also we we launched wine app together. So if you're listening to this and and you're like, oh man, this would be great for me, but also for like my teenage kid. Um, you can buy you know, you buy a subscription's a hundred bucks a year, so it's it's certainly reasonable. But then you can have I think up to five other people and we intend for this to be like family, you know, close family, but you could put your kids on it. You don't have to

pay an extra subscription fee things like that. Once your kid flies the nest, which you hope happens, they get the free year and then they can go off on their way. So honestly, we really want the kids to be hooked on this, like we wanted just to think, oh, yeah, this is how you do money. You save up for stuff, you evaluate your priorities, you spend guilt free. We want to check all those boxes for these kids. I love it. Jesse, thank you so much for joining us on the show today. Man.

We appreciate it. I appreciate him alright, Joel, what a great conversation man, talking about something that is a fundamental building block when it comes to your personal finances. Talking with Jesse about budgeting but specifically why NAB the software that he pioneered, that he founded. What was your big takeaway from our conversation with him today? Well, one, I feel like, you love budgets more than you love me.

That's your best friend. And so I feel like this was probably like your favorite episode everything everything he said. I was just like, yes, I can see over there, you're just like you're jooling a little bit as he talked, Yeah, you're really into it. So no, I really appreciate every all the quint was he was diving into like the whole time, like the time space money continued very much

learning out one of those things. I was going to say this, It is one of those things that it's hard for us to conceptualize, but software can help us actually understand how that's working and then make plans accordingly. But like our feeble human brains have a hard time with that. But the software actually really I think helps drive that home for people, which is something we need to wrap our minds around if we're gonna you know,

save and invest effectively. But I think my big takeaway from this combo yeah, he said, knowing that you'll run out of money helps crystallize your priorities and the realities that we're all going to run out of money at some point. Depends on how quickly, depends on how much money we're making and how fast it's going out. But knowing that it's going to run out is going to help you crystallize those priorities. And so, uh, what is

it that is most important to you? It's all about trade offs, right, And a lot of people look at look at our family, and they're like you guys, You guys are like, make enough money to afford two nice cars, what do you do and driving one old, beat up junkie minivan. It's like, we just don't care. But knowing that it's going to run out helps us crystallize our priorities. And our priorities lie elsewhere. Someone on Twitter today said, what if you just got a million dollars, which one

thing you would not upgrade? What's one thing you would not spend more money on? And I'm like, my car, I just don't care enough and I would rather see that money go elsewhere. You think about the rivian, but you wouldn't pull the trick. I think about it. I'd lustily look at pictures on the internet. But then after that, I would say now and and so I just think that's really important for you to know because we all everybody has limits, right, and there's only so many yachts

that Jeff Bezos can even buy. Yeah, that's probably bad example, but uh, like we all are going to run out at some point, and so let that crystallize in your mind the positive ways that you can use your budget to funnel money towards the areas that really matter. Nice man, I like that mine has to do with how it is you spend as well. He was basically at some point earlier, and I don't know his exact words, but he said that essentially, you shouldn't have any spending on

your books that you feel guilty about. Essentially, everything that you spend money on, it should be something that you are maybe not necessarily excited about, but it shouldn't be something that you feel bad for doing. Uh. And that's because hopefully you have aligned how it is that you are spending your money with the ways that you want

to spend your money. And so if there are ways that you don't want to spend your money, well, certainly it could have arisen from previous decisions that you made.

Maybe that we're poor decisions. So if you're making like credit card payments or payments towards something that you have changed your mind on, well, that might be a case where things aren't aligned, but that's because you made a you know, you made a poor decision in the past about pushing those expenses into the future as opposed to do Yeah, yeah, absolutely, as opposed to pushing your money

into the future. Um. But yeah. I think if you do have something in your life that you are spending on every single month, and not only is it not providing you you joy and it's not providing you value, but you feel like it's something that like like you have some sense of guilt associated with that, I would encourage folks out there to stop and to think why is it that you feel that way? Because it can

It might either be something super simple. It could be a practical reasons that oh, well this is a category maybe that we shouldn't be spending this money in this way. So not only is it can it can it be fixed in a very practical way and that you just change how it is that you're spending. But maybe it could lead to you taking some time to self reflect and to think, why is it that I don't you know that I don't feel great about how it is I'm spending my money in this way? I think it

could potentially lead to change in both areas. But I like that that you should not have any spending on your books that you feel guilty of. That I love too when you talked about the budget burned down, and it's this way to like completely reassess everything because you might have just listened in your like big old resets. There's a bunch of stuff that I really want to

do that I can't actually afford. But I got all these other old expenses laying around in my life, and if I could just cut a couple of those out, then maybe I could actually spend more money, money more freely on the things that I really actually care about. And so you might have three cars in your driveway and you're like, listen and budget burned down. I'm gonna sell one of them, and really I'm gonna rent the other one out on tour. But if we only had one, yeah,

wait a minute, those are the decisions. But but if you just uh, there, there is that sort of thing that happens to all of us inertia bias. We start we've done something, we kind of keep it going in perpetuity. But the budget burned down allows you to reassess everything and I think that that can be helpful. You might not want to change a bunch of stuff, but you might you might want to change a lot this year,

so it's worth thinking about. All right, let's get back to to the beer that we had on this uh, this episode. This was igneous I p a by Hutton and Smith or your thoughts on this one. It's really good, man, this is a dry hops ip. These guys are out of Chattanooga, And yeah, it was tasty. It was dry hop Oftentimes you expect some of those I don't know, I guess I saw dry hopped, and I saw the color of the cannon. I was expecting like a New

England like dry hot beer. But it definitely was kind of more in that traditional I p a bas uh And it had some some of those sharper notes that you get from a dry hot beer, a little more piny, little more bitter. Yeah, yeah, but not like over the top with like that West Coast resin. It's still had some sweetness that still had a multi backbone to it as well. But it definitely enjoyed it. What were your

thoughts on this one? Similar Basically it tasted really like a classic I PA and it reminded me of like some of those olds here and about it I p a s that are just classics, but they don't make them like that very much anymore. Like the the tendency is towards the juicy Hayes bombs, and so this one has that more those like more piney, traditional bitter characteristics to pedo a little bit, but not over the top either.

So yeah, I liked it. I liked it. It it's and it's nice to have a change up in I p a s. Because we do drink so many of those orange juice I A Yeah, big juicy one, so it's fun to try something, you know, a little more old school. Absolutely all right, Well, we'll make sure to link to wynab where you can learn more about you Need a Budget their budgeting software. You can find that link up in our show notes at how to money

dot com. Joel, that's going to be it for this episode, buddy, until next time, Best Friends Out, Best Friends Out.