• An Interview with Carl Richard’s, author of “The Behavior Gap” (some of my favorite highlights were posted on the blog as well).
• An Interview with Baker from ManVsDebt.com.  Baker asks a single question that will certainly get your gears turning.
• Success Story: From “Doing Fine” to “Awesome”.
• Ignoring Life’s Biggest Expense is Folly. (This is a podcast version of one of my favorite blog posts re: taxes.)

You can always subscribe to the podcast via iTunes, or with your favorite RSS reader.

If you’d like me to discuss a specific topic in a future podcast, leave a comment below!

Then, in November of 2002 I proposed to Julie.  Since that day, I’ve wished that I could travel back to my Past Self and not share stock tips, but rather, popping-the-question tips. Honestly, if I could do one thing over that I’ve done in my life, it would be to grab my Past Self by the collar and hogtie him until I (Present I) could talk some sense into myself (Past Self).

But I can’t talk to my past self. So I try and make up for that every February with our anniversary. Oh my word. It’s in two weeks.

I can talk to my Future Self. And you can talk to Future You.

A Dialog with Future You

When you’re budgeting, you’re having a chat with Future You. This can get confusing, because if you’re budgeting with your spouse, you’re going to really be dialoging with four people.

You: “Let’s plan on $150 for eating out…$950 for rent…and a bajillion dollars for diapers.“

Future You: “Um, the tire’s going to blow out.”

You: “Oh yeah, when?”

Future You: “Eventually.”

You: “Right. No need to get snarky.”

Future You: “Don’t make me purse my lips at you (again). It’s not comfortable for either of us.”

You: “Right. So… $80 for eating out, $70 into car repairs for the next couple months.”

Future You: “You mean, $70 into car repairs for the next infinity months.”

You: *sigh* “I think we’re done!”

Future You: “What about Christmas?”

You: “What about it? It was 30 days ago!”

Future You: “Well, it’s coming (again). It’s recurring, even though it’s really, really far away.”

You: “We’ll deal with it when we get there.”

Future You: “Ha! Like the last time? Where you were stressed about not having any money for gifts? So instead of hiding in a cave, as I suggested, you just gave up, and started charging stuff on the card?”

You: “Your cave idea was so unbelievably dumb.”

Future You: “I got excited at the prospect of a debt-free Christmas. So sue me. How much do you want to spend on Christmas this year?”

You: “Maybe $600?”

Future You: “Really? Because last year you spent $1,200. What makes you think this year will be any different?”

You: “Okay, $1,200.”

Future You: “I like it.”

You: “You like that I’m going to spend more on Christmas?”

Future You: “I just like that you’re being realistic. $1,200 saved for Christmas means $100 per month goes to the Christmas category.”

You: “Hrm. There’s not a lot of wiggle room just with the month-to-month stuff.”

Future You: “This is reality though. These are real expenses that you can’t put off. What do you want to do?”

You: “I’ll stop eating out.”

Future You: “No you won’t.”

You: “Yes. I will. Cold turkey.”

Future You: “You won’t. You’ll last three days and then end up binging on waffle fries at Chick-Fil-A.”

You: “I’ll eat out less.”

Future You: “How much less? You already took $70 from your eating out budget to pay for eventual car repairs.”

You: “I’ll cut the cable.”

Future You: “I admire your spunk. But come on…”

You: “I’ll cut $20 from miscellaneous, $40 from groceries, $10 from entertainment, and $30 from furniture.”

Future You: “You cutting $30 from furniture means you’ll get that new coffee table three months later than you were shooting for.”

You: “Yeah, I know. That’s not a big deal though.”

Future You: “And you can realistically swing the deductions from miscellaneous, groceries, and entertainment?”

You: “Entertainment, for sure. One less movie. Easy. Groceries, no problem there as well. I felt like I already had some cushion in there anyway. Same with miscellaneous. I usually end up with $30 or so left in that category at the end of each month anyway.”

Future You: “I like it! You’ve covered eventual car repairs, and you’ll have a Merry Christmas.”

You: “Yeah. Doesn’t actually feel as bad as I thought it would.”

Future You: “Hey, I gotta jet. Something BIG is going down her—”

You: “What? Hello?! What?! Whaaaaat?!”

Rule Two

Rule Two is all about Future You. You bicker, compromise, and eventually come to a consensus on what should be done now so you don’t have to be stressing about things later.

If you have a friend that could benefit from a cash-only holiday for this year, spread the word!

I find them full of the same standard advice, forecasts, projections, etc. And half of them say budgets are worthless (the other half avoid budgets all together).  That’s reason enough to avoid them :)

But I read The Behavior Gap, by Carl Richards, and I loved it.  It’s a personal finance book that doesn’t talk much about personal finance. It talks about you.

I won’t give a chapter play-by-play or anything like that. If you want to grab an excerpt of the book, the introduction is available here.  I just want to highlight a few points that stood out to me.

Before I get to highlights though…I had the chance to interview Carl and that podcast is posted today, so make sure you check it out (iTunes, or here’s a direct link).  He shares some killer insights into our (dumb, but normal) behavior when it comes to money.

But back to the highlights.

We’re wired to avoid pain and pursue pleasure and security. It feels right to sell when everyone around us is scared and buy when everyone feels great.

How do you shake that tendency? You set up a plan based on your goals and your values and you avoid the flood of information that is there for entertainment purposes (and to sell ads), not to advise us.  But heck, just being aware of this tendency is valuable.

Overconfidence is a very serious problem. If you don’t think it affects you, that’s probably because you’re overconfident.

I just liked that zinger.  Not much else to say to it :)

My favorite chapter, by far, is Financial Life Planning.  I wish that one was available as an excerpt!  It emphasizes the uniqueness of YOU and asks you to decide what makes YOU happy. Then you plan your life accordingly. Your finances, just follow that life plan.  (A plug: budgets are a mini life plan.)

The ability to build and protect wealth is often inversely related to knowing what’s going on in the market. And it’s certainly inversely related to acting on that knowledge.

The implication is that investing is simple (not easy, Carl’s quick to add). You set up a plan, automate away the day-to-day decisions, and avoid news meant to cause anxiety, fear, and greed. “Go for a bike ride” is Carl’s advice. That’s good advice.

And finally, a great blurb on how financial plans are worthless (Wait, what? Jesse, haven’t you been talking about setting up a plan, and then sticking to it this whole time?).

Financial plans are worthless, but the process of financial planning is vital. A plan assumes that you know what’s going to happen—even though you don’t. By contrast, planning in its truest sense is a reality-based process that allows for life’s unpredictability. It requires us to make decisions based on what’s actually happening, rather than making decisions based on what we hope or expect or fear will happen.

It’s the process that’s valuable, and I think that’s a key insight.  This is also why I have no qualms about people adjusting their budgets mid-month. New information, new plan, but always governed by your values.

The Behavior Gap has me thinking about money in a new way.  I loved it.

Oh! I almost forgot, Carl wanted to give every YNAB purchaser a copy of his free print Focus, if they purchase his book (thanks Carl!).  If you do decide to purchase it, send an email to book@behaviorgap.com with your receipt and they’ll get you squared away.

(Disclaimer: nothing disclaim. YNAB doesn’t stand to make a dime if you purchase Carl’s book.)

• Christmas, Weak Reporting, but the Best Report of All (Dec 5)
• 3 Tiny Habits, Big Takeaways (Dec 12)
• Success Story: A Quicken Junkie Converted! (Dec 19)
• YNAB’s New Site Design (Dec 23)

You can always subscribe to the podcast via iTunes, or with your favorite RSS reader.

Big takeaway for me? An entire page dedicated to each rule.

But my favorite page on the internet, by far, is all about YNABers who are working hard and succeeding.

Subscribers on iTunes probably already caught this. If you just want the direct download, you can grab the mp3.

You can subscribe to the podcast in iTunes, or download the mp3 directly.

This list is meant to get your introspective gears turning. All generalizations are false.

1. Do you live well below your means?
2. Do build your wealth by spending your time, energy, and money efficiently?
3. Do you care very little about social status?
4. Have you received no financial help from your parents?
5. Do your adult children pay their own way (popular ways to help, but still prohibited: down-payment for a home, and private schooling)?
6. Are you married?
7. Just once?
8. Do you own your own business?
9. Do you spend less than 7% of your wealth each year to live?
10. Is your net worth about six and a half times the average net worth of your neighbors?
11. Do you work 45 to 55 hours per week?
12. Do you save and invest about 20% of your annual income?
13. If you wear a watch, is it a Timex or Seiko?
14. If you’re wearing a Rolex, was it a gift?
15. Have you purchased two or less vehicles in the past 10 years?
16. Are those vehicles Fords, or Toyotas?
17. Ladies, was your last haircut about $45?
18. Men, was your last haircut about $16?
19. Are you happy?
20. Do you own a home?
21. Is your home’s value less than 10% of your net worth?
22. Have you lived in the same house for more than twenty years?
23. Are you college-educated?
24. Were your parents still married before you turned 18?
25. Was your mother’s primary role as a homemaker?
26. Was your father a blue-collar worker, or a business-owner/self-employed?
27. Is a typical meal at your most-frequented restaurant about $20?
28. Do you give at least 5% of your income to charitable causes?
29. Have you never paid more than $41,000 for a vehicle?
30. Do you have little to no debt (including the mortgage)?
31. Do you feel balanced between work, family, socializing, and your community or church?
32. Do you spend time planning investments and consulting with a tax advisor?
33. Do you maintain a budget?
34. Do you have integrity?
35. Do you possess high levels of self-discipline?
36. Do you get along well with all types of people?
37. Is your spouse supportive?
38. Do you work harder than most people?

I’d focus on the questions over which you have control, and not agonize over the rest!

Here goes.