How To Balance Work + Play + Spending + Saving

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[The following is a partial transcript of this episode of The Scott Alan Turner Show. Listen to the full episode to hear this story, listener questions, money hacks, and inspiring stories of people that are changing their financial lives. Subscribe to the free podcast on iTunes or Google Play]

In This Episode / Listener Questions

  • Should my 50-year-old dad pick a Roth 401(k) or regular 401(k)(Legolas)
  • We are struggling to pay off a home renovation (Rebecca)
  • I feel guilty about taking vacations while paying down debt (Vincent)
  • Should I pay off my car if the interest is the same as what I’m getting in my savings account (Anna)
  • Can you front-load a 529 College Savings Plan (Anon)
  • Best way to save for retirement in Canada (Denise, Nova-Scotia, Canada)
  • Should I invest in a 401(k) if I already have an ESOP (Tony, Ohio)
  • Thanks for writing a book my husband would read (Lori)
  • Using apps to avoid toll roads
  • Red Alert Warning – crypto-scams

Resources/links:

The average American spends $18,000 a year on nonessential items, and people were not happy when other out-of-touch dinosaurs told them how to spend their money.

The dinosaurs, dishonest, and disconnected of personal finance faced a back lash of epic proportions in a recent USA Today article.

“It’s one thing to spend a bit of money treating ourselves to life’s various luxuries, but it’s another thing to splurge to the point where it hurts our finances. Many Americans are guilty of the latter.”

It’s interesting, because what is non-essential? And who defines it? Is soap with lavender nonessential because I can buy Eucalyptus bath gel for 50% less?

I believe the gateway to financial freedom has a toll bridge. What’s it take to cross over?

USA Today taking heat for calling what some people spend ‘non-essential.’

  • $200 on restaurant meals
  • $190 on drinks
  • $180 on takeout
  • $170 on lunch
  • $100 on personal grooming
  • $100 on subscription boxes. I guess that would be the $100 shave club.
  • $100 on ride shares

I know you’ll love these tweets getting the most attention.

Kyle: “Here I thought people got rich from inherited wealth and laws that benefit the already wealthy, but it turns out those folks just weren’t getting hair cuts”

Sal: I’m sorry i groom myself. i’ll stop. thanks USA today.

Sven: OMG oh my god i’m going to save so much money on showers and corn

Lord Omlet Toes: I do my grocery shopping online. But I thought spending money on restaurants was bad? How do they want me to eat? Mist myself like an air plant?

Mike: yeah who the heck needs, uh, “lunch”

Matt: Millennials spend too much, and not enough at the same time and are also spoiled, and also choosing to live in pods. We can’t afford a house, but we can afford pounds and pounds of avocado toast.

Follow up from Matt: Maybe we should make a house built out of avocado and toast.

“Americans aren’t using their money for more important things. A good 38% of Americans claim they can’t afford to fund a retirement plan because they don’t have enough money. Meanwhile, 35% say they can’t afford a life insurance policy, 28% can’t afford to pay off credit card debt, and 26% can’t afford car repairs.”

Come on dinosaurs. The problem isn’t the $18,000 a year on non essential items. The problem is people start the month with no plan for their money. If a person spends $50 a month eating out or $1,500 a month eating out, big whoop if they are putting away at least 15% in savings. BTW – That’s a lot of sushi for $1,500 a month.

I know you’re probably thinking ‘I don’t want to stop going to Starbucks, out to lunch, cookies from the vending machine!’ right? Well, actually if you make that a part of your spending plan, then keep doing those things, my friend. Congratulations on your afternoon cookies.

Spending plans include essentials and must haves, and non essentials like supporting local bakeries and buying pie. Which as you already know, helps both the economy, the environment and social causes.

No, like most people you are probably thinking – it’s time to cancel my USA Today subscription. It’s nonessential.

As usual, this article was cherry picked and the data was taken out of context. Just like people take things from the Bible out of context all the time to pursue their own agenda. Like that time Jesus said ‘I have food to eat that you know nothing about.’ Some people say he had a secret stash of candy bars in a fanny pack. Not true!

I say to you – get a life! Which means having a life now and a life in the future. People shouldn’t kid themselves. Everyone knows – nobody, NOBODY is skipping take out pizza for the next five years while they dig themselves out of a hole. Isn’t that true?

Everyone knows – NOBODY is wearing the same underwear for the next five years while they pay off some student loans, right? Gonna get some new Mack Weldons or whatever Target sells.

Everyone knows – NOBODY is putting the entertainment budget at $0, never seeing a movie, concert, play, Monster Truck Jam, putting the kids in sports, for five years while recovering from some prior bad money situation. Isn’t that right too?

So if we’re not putting our life on hold, and someone is going to spend some money on ‘non-essentials’:

Someone may be paying 50% of their income towards housing. They can have financial freedom.

Someone may be spending 50% of their income on traveling. That’s non essential. They can have financial freedom.

Someone may never go out to eat and spends all their free cash on shoes, purses, and fishing poles. Camo purses to hide from the fish. They can have financial freedom.

Isn’t that freeing to know your unique plan – I hope you have one – your unique financial freedom plan, it’s best for you. What the dinosaurs say doesn’t matter.

The end of the article had the action plan:

If someone has been spending $18,000 on nonessentials,

  • first create a budget,
  • then get an emergency fund,
  • then get some life insurance,
  • then some retirement savings.

So, what is the toll to crossover to financial freedom? Well because you are an amazing unique individual, you have to decide for yourself. Each person must decide what they are willing to pay, how much, and for how long.

You can get there eating smashed avocado on toast for $19 for breakfast, lunch, and dinner. Might take a tad bit longer than eating mayonnaise sandwiches without bread for breakfast, lunch, and dinner.

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