Transcripts
1. Introduction to Personal Finance: Hello there. This is gonna be personal Finance 101 on mindful spending. My name is John. I am the founder and coach here at Newcastle Financial Coaching. I do this because I want to help you rethink and then rebuild your financial life. And I want to help you live your best life later. Not now. Because right now we got work to Dio. This is my first class on skill share the first of many. And because of that, I want to get some introductory things out of the way. First things first. If you are someone that is not yet sold on skill share premium and you want to know more about the platform before you jump into a free trial or by a discounted years membership, um or you're not sure about me. And if you're this classes for you, I don't want to spend this whole time talking about myself. But on my skill share profile, you will find that information. Maura, about my story, why I do this and why Skill share premium is a great investment. So hop over there and then just bookmark this class and come back when you're ready But I also want to cast vision for what I'm doing here on skill share. This is not going to be a whole bunch of one off course is like, this is one skill I have. This is one school I have. I've designed what I'm gonna upload to skill share as a curriculum of what I believe to be a comprehensive look at what personal finance can look like from my own unique perspective . And I hope it's valuable to you. There's gonna be three courses personal finance one along 1 to 103 Those are gonna be foundational. That is a really gonna look. A theory and principles were not in a hurry into the doing because I wish finance was easy . I wish I could just make a one video that something like here are the five things you gotta do to be financially successful. And it's we were young. We watched that many video and you live happily ever after. It's not like that because you've got a whole lifetime of financial patterns that believes about money. If we're gonna be successful, we have to break in and unpack those things and maybe help you get onto a right path so these three things will be foundational and perm. And mindful spending is just the 1st 1 After that, we're gonna have a 200 level finance two a 12 of a 22 or three to a four. There was there gonna be about strategically how to be going month by month, building wealth, paying off debt. That's the strategy and the action of it that builds upon the foundation. So you'll have the foundation, and then we'll have the rebuilding phase. After that, I might do a couple more detailed, specific classes on how to invest, Well, how to optimize. But I really think it's gonna be a lot of, um, value and just doing those 1st 7 courses. So this is the start. I hope you're ready for it. Personal finance 101 Let me do an overview. What will go over on? Uh,
2. Class Overview: All right. So with mindful spending personal finance 101 This is what we're going to get into. We are going to start at the very beginning. We're gonna try to move fast, but it's important to start at the very beginning and ask a very foundational question of what? His money. What were the first lessons we learned about finance? How can getting back their help us to let get back onto a right track? But from there, what we're gonna do is talk about how spending is the key. The foundation of a good, healthy financial life is not that you would be saving and saving and saving and and slapping your hand. No, no note everything. We're gonna talk about how if you are spending money on the things you truly want and need , that is the foundation. So we're gonna want to talk about that, Why? It's about spending and not saving. First, we'll talk about what bad spending looks like in four ways for common problems people like you and me have. When it comes to spending in ways that will regret, we'll take some time to unpack that, and then we're gonna think about a strategy on how we can be continually going as we go with our spending to assess whether we should buy something, what the decision we need to make is and then how we can reflect on those things. Lastly, what we'll do is we will go over our class project asking that you do it because it's gonna help cement the concepts that we're gonna go over today. And then when I'm convinced if you sit through this whole class, take it in, he might need to watch it twice. If you participate in the class project, find yourself conversing with other classmates down in the project section. I'm convinced you'll be on your way to a healthy financial reset and you'll be thinking about money and in a new, fresh way and you'll be ready for personal finance one of two. So that's where we're going. I hope you have a little bit of excitement. I hope you a little bit of hope, because I think we can. We can make some change happen, so I want you to spend your money. Well, that's what this course is gonna be like. Let's ask that question. What is money? Let's go
3. What is money?: our journey begins with spending because if we're going to start a new financial journey together, we have to start at the beginning. So I want you to imagine that your child again learning about money, it might have gone something like this. Somebody gives you a dollar or somebody gives you some change. And then just before you know it, you're just throwing it around, maybe forgot about it and then that personal come back and say, Hey, listen, you gotta hold on to this. This is not just papers is not just a toy, This is money, and it's valuable. It's valuable because you can exchange it for goods and services. You can go to a store and find what you want and by exchange it for that thing that you want. And then you would take that knowledge and you would put it to the test. So maybe is a little kid. Maybe what you really want is ah is a candy bar for $1. So you go to the dollar store or at wherever you go and find that that candy bar and you're you're almost like a disbelief like we I can actually have that I can actually have that candy bar. And then you give the cashiers of $1 bill and you forget about it. The the money is worthless to you. It is gone out of your life because all you ever wanted was this candy bar and you got it. And you're filled with this joyful feeling. This is what mindful spending is and we need to get back there. We need to spend our money on purpose and love. The things were buying. Now what I'm going to sneak into this is this financial concept called opportunity cost. I won't be throwing too many of these economic type phrases, but this was so important that we get opportunity. Cost means that if you spend money on one thing, you lose the possibility on spending that money on everything else. So if there was 50 things you could have bought for that $1 As soon as you buy that one candy bar, you lose the opportunity to buy those 49 other things. So what we have to build into our spending is one we absolutely need spending on things that make us joyful and make us want to spend our money. Money exists to be spent. But we also have to consider that if we spend our money unwisely, if we spend our money on things we don't actually want, we're losing that possibility of having that kid in a candy store feeling we are not spending our money mindfully. I don't know if you've had an experience like this where you're maybe checking out at a store and then you see a $1 candy bar that you kind of want. Maybe you've had a rough day. Maybe you're hungry. But something about you just really wants that. If a wealthy person gets in that situation, they're either gonna buy the candy bar or they're not. They're not to think too much about it. But if you're in financial stress, if you've been trying to budget and save, you might be having, like, this life, whole life crisis have. Can I buy it? Should I buy it to justify it? And it it it becomes this difficult ordeal. It doesn't have to be that way, and my hope is that it wouldn't be that way. The way the wealthy people treat their money is they just by the things they want and need , and they don't even actually have to think about the money. The more you build a solid financial foundation, the more you're going to gain the freedom to do that. If you take all of these courses and you start making positive changes, its very likely you're gonna have a good amount of disposable income. Maybe it's $50 a month. Maybe you get $500 a month, who knows? But you'll just be ableto buy a candy bar, and it's just gonna be light and simple. And that's just gonna be the smallest taste of financial freedom you're going to get and you'll be able to just start spending your money where you want Teoh. That's the freedom we're looking for. And you don't get that unless we understand opportunity cost that we want to save our money for things we truly want. They're really gonna make us happy. That's how we need to be thinking about spending. So what is the answer to the question? What is money? Money is not some powerful force that's over us that's controlling us. It is not something wealthy. People used to hold us down money is a tool, and when we get to that point where we start taking control of our money, we provide ourselves the opportunity to spend our money well. And we start to realize just how important it is to protect our money from unwanted, ful, unwanted or unhelpful spending. It's worth saving, and it's worth spending on purpose because money is not an end in itself. We don't live here. We're not here on this Earth to have as much money as possible. But when we have money and we use it well, it allows us to have the lifestyle that we want. The purpose that we want tohave can be achieved as we spend money in that direction. So that's what money is. It's our tool. It's our way of pushing forward our life, and it's worth thinking about how we spend our money like
4. Spending is the key: So let's unpack this idea that spending is the foundation of personal finance. But it's it's not just about saving. It sounds a little backwards because saving is important. But if we begin spending our money mindfully what that hopefully will increases thankfulness, we will enjoy the way that we spend money, and we will also value it mawr because we're gonna be more connected with the things that were buying and the services were paying for having extra money at the end of each paycheck cycle at the end of each month. That really has to be priority number one for your personal finances, but you'll get there by spending on purpose. You can't just hole up and just not by the things you want and not need. If you're lacking in those things, it's just only a matter of time before you just release and say, I'm done with the budget. I got to spend money and then that I want you to continually believe that personal finances for you, that for you to be engaged in your finances, thinking really mindfully about what you're doing with your money is the best thing that you can dio. You're not gonna get that right. Sticking to someone else's plan or my plan, you're gonna have to find it out for yourself. So that's why we're thinking about money. That's why we're trying to build a foundation here. When we think about how we could get extra money at the end of the month, there's two things we can do right. We can earn more where we could spend less earning more, growing our careers and incomes That is going to be the subject of a later class. It is important, but you gurgle. As you might know, pushing incomes higher is a little bit more tricky than it is to just save money and push your spending down. So that's why where we're gonna go, I want to talk about how some of us don't spend enough. It might not be a lot of us, but some of us you maybe have brought been brought up in a way where you go cheap all the time or you don't buy a lot of things. Maybe you associate kilt and fear with money they don't want. You don't want that feeling of having wasted money, and you're just afraid that something's gonna happen where you're gonna need a lot. So you're a hoarder of money? Uh, I hope that we can understand that's not the best way to view money. What's an important topics to actually understand for saving too much money? If maybe you can be a affording to doom or or do something different. So it's topical later classes, actually, to get to this idea of how to know how much you should be saving. Um, but what it was I just want to touch on right now is the money does not necessarily equal security. You have to spend your money in ways that help you, and you've got to live your life. So if not, spending is something that is a problem for you, you've got to learn to spend money. Well, most of us, though we, of course, we have the opposite problem when we spend too much. Um, even after years or decades of living, we still are sort of childish with our money. Maybe we're impulsive or emotional, and it's also worth noting that a lot of our spending is not on purpose. We have emergencies come up. We have people in our life that we have to care for. Accidents happen and money just goes out the door that you can't control. This makes it so much more important that we have extra money left, that we do have savings and that we're not wasting money on things we don't need because there are times when more money is demanded of us that we even expect. So I want you to think about your financial situation, that you're not living in some kind of unplanned shack, that you kind of just put it together. I want you to think about your financial life as a castle that we're building on purpose. And right now what we're doing is relaying the groundwork. We're trying to build a foundation, getting the blueprint for what a good, healthy financial life looks like. So by default, a lot of us, what we want to do is we want to spend more than we can afford and a lot of times what that means. It will spend her last dollar or will borrow money to spend more. If we can get around that, and if we can fix that, then we will have disposable income and from there. That's where the snowball happens. Because if you have disposable income and you have that for months and months, you'll start asking like, man, all the sudden I've got $1000 in my checking account. Maybe 5000. Should I be doing something with this? And then you start the game. It took role as an investor. Um, you start making wise or decision to get your head above the waters. You can start navigating your life better. So much of your mental health and your ability to live life well depends on this priority number one of having extra money left at the end of each month and spending your money mindfully. Getting there is not gonna be easy. We're going to get into that. There's some problems that stand in the way. I've started out into four different problems we have when it comes to spending our money
5. Problem #1: Spending is emotional: All right. So problem number one that keeps us from spending our money mindfully is this idea that we are emotional, A lot of financial plans say, Well, of course, you should only spend this much money on this category in this much money here. But as we go day to day, that's not how it goes. We actually don't even think about money so much. It's not our brains that make the decision. Think about how you spend your money yesterday. If you don't really believe me, we're gonna do a class project at the end where we're gonna talk about the way we spend money and we're gonna I want you to do a private thing. I'm not gonna ask you to share it with the class, but I'm not gonna ask you to look at how you spend your money. In this past month. I hope you'll see that there was some emotions involved. It wasn't exactly rational thought. What you don't need is some real stars, and I hope you can understand That's not my energy. I'm not here to tell you what you can and can't do what you don't need some kind of plan either. That says like, Okay, you can only spend $40 on gas this month, and because you've spent that, now you have to walk. Just see, you know, that's like treating you like a child, and I don't want to do that. But what you will need to do is kind of transform into a financially healthy person. You don't want to just be someone following the diet, because if you are, it's only a matter of time before you just give it up. So I want you to re really rethinking your emotions and what part your emotions play into your spending. When you we begin to understand ourselves, understand our spending habits and be able to navigate those without guilt or shame or self judgment, Um, that's where we can start making some changes. What I'm getting at sort of sounds like budgeting if you're familiar with that concept, and we're definitely going to get to that in a future class. But you're not gonna hold to a budget if you don't want one, so the key is getting you to a point where you'll want a budget. We need something to kind of rein in or emotions a little bit because when we're having a bad day, you know you can ruin a whole week of good saving and spending habits. Um, I just blowing it real quick. So we want to be somebody that can kind of live with our emotions as far spending goes, and we're not just, um, enslaved to them, if that makes sense. So that is problem Number one is that spending his emotional? The solution is to address it. We need to spend our money more mindfully. We need to be aware of our emotions but not enslaved by them. And then we need to just get to the point where we're spending our money on purpose without our emotions, of blowing too much money on things we don't ultimately won't need.
6. Problem #2: Future spending: problem. Number two is we're not thinking about the future. We're spending our money now in ways that are gonna lead the future. Spending one of the big ones may be the biggest one where you could probably think of its financing large purchases, buying a house. It's too big buying a car that's too big. And as I say this, this might be a little triggering to you because you're thinking about something you book did in the past that month by month, by month, you've had to pay for. So what I would tell you to do is just realize that is in the past. Don't judge yourself because you know you don't know better back then and, uh, you're getting you're getting your act together, so that's a good thing. Do your future self a favor, though, and start being mindful about those things before you sign that paper. Think about all those dollars you're going to be spending. And if it makes sense, I'm not saying that all debt is bad. It might make sense in certain situations to take on some debt. If you're buying something that you really truly want, that's something that we have to think through and and handle. But but this is one of those ways. What we spend more than we truly want is not with dollar bills going out. But it's with your signature on that financing paperwork. Another way that we spend money in ways that are not strategic, is we don't buy in bulk. If you're gonna be using the product and you're not gonna waste it, why not buy more? If you can get more value from it, you might think, well, should I buy $5 of paper towels or $10 paper towels? Some of you will always think, Well, I'm saving money. I'm saving money. I only got so much of my wallet. I'm only gonna spend $5 on paper towels. That's a very scarce way of looking at it. Because if you got some room, some closet in your house, read and store them, you might get three or four times as much Twitter, toilet paper, paper towels, whatever it is if you pay double. So you got to be thinking, What is the cost per item? You got to really do that. Check this, Am I gonna actually use it But if you're gonna use it, it's not gonna go bad. You're not buying too much food or something like that. Go ahead and buy in bulk. My family made the switch to Costco about two years ago, and I buy this huge thing, that toilet paper. It's Ah, it's comical. How large the Kirkland Twitter papers I buy, but I buy it every time and I love it and it lasts my family longer than our cars we buy put to other paper every five years. All right, that's a joke. But I feel good spending whatever amount of money it is. Some like 15 bucks on a lot of toilet paper because I know that I'm saving money over buying a smaller package in the store. So think about buying and bull can do that strategically. That's one way that you could save more money. Another thing what we'll do is we will buy cheap the first time, and it's a saying that if you buy cheap, you buy twice. I'm guilty. Let's myself. We just need to really think through our purchases because some things that are cheaper really are not as good quality, and it makes more sense to buy the better thing. You could all usually get into a trap of always buying the best thing, and that's an expensive way to live as well. But this is something to be considered of that if you are going to buy something cheap, make sure that it's gonna work for you doing sort of a rix of risk assessment. Otherwise, you end up with buying the expensive thing anyway and record it regretting your initial purchase. So just to wrap this little section up about problem over to what we should be doing is being mindful of our needs and buying the right thing to reduce future expenses. This is how wealthy people think about money. They don't worry about just spending what they have now or what they can afford. But they really think about what's the the whole cash outlay and, um, I overspending. Where am I truly getting what I want as I'm signing this paperwork as I'm buying this product, etcetera. Think about the future when you're spending
7. Problem #3: Chasing an image: problem Number three that keeps us from spending our money. Mindfully is one that pry resonates with all of us, especially in this generation of social media. The idea is that we're chasing a lifestyle that we can for we may be perceive ourselves to be people that should be spending money in these ways. But we really can't afford that. If you think about the cars that we want, the neighborhoods we want to live in, we ultimately want to stretch her money and those those ways. We start asking questions like, Well, how much can I afford? Could I make that payment? And when you're making asking those kind of questions, you are already signing yourself up for spending more money than you can afford. So what you should say is, what is enough for me, I guess, is the idea. We will do things like what we'll do is we'll compare ourselves to our parents, and our parents have spent lifetimes building themselves up to a certain level of wealth that when we left their houses in high school or college age, we thought, Oh, this is what life looks like, But if you're gonna be going into that earlier season of life where you are figuring things out, starting out in a career and maybe stretching, because now you have kids that you have to pay for and care for. Your quality of life will be lower than your parents, and that's not something you should be ashamed of. You just need to be aware of it and be strategic about it. One thing worth considering is that everyone is crazy, that that everyone is out here over spending. And if we try to just be normal, that we're gonna be crazy, too. There's an interesting statistic that across income levels, whether you're were over here just making $20,000 a year or if you're making 700,000 1,000,000 a year, bankruptcies are consistent across those income levels. What that tells you is that there is never enough, and everyone is chasing a lifestyle that they can't afford. The next class is going to be about minimalism, and it's gonna be a good topic toe look at, because how could we ever stop spending money? How could we ever control our spending if we simply believe that we have to spend more than we have. It's worth looking at in the future class, but just just think about this, that we need to stop chasing on image. We need to stop comparing ourselves to our piers, and we need to focus on fulfillment. What is what I want to spend my money on. And if you can do that, um, that should be a win for you, and you might not have the car that other people admire or you might not be able to afford or have the things that your friends and peers have. But if what's more important than you is living in life on purpose and being financially healthy, then ultimately you're putting yourself on a path where he will be a little Ford. Those things later. Meanwhile, your friends that might be spending money on those things now they might not be able to afford them in three or four years, so we want to build ah healthy foundation. That's fine, Ah, healthy Financial Foundation and I just realized that the what we might need to rein in spending that we do to keep up with the Joneses
8. Problem #4: Not seeking alternatives: lastly, here, as far as problems go from, what keeps us from spending our money well is we don't think about alternatives. Sometimes in life, we're gonna be trapped. Sometimes there's literally nothing we can do. We just have to spend money. But most of our life is not like that if you're salesman or if you got trained in sales. Salesmen are karake at helping hue to not have alternatives. They want you to think that the time to buy is now. The only thing you can buy is the proper putting right in front of you, and this is what you have to do. Do it now. It's gonna be great. That's a salesman's job. But the reality is we always have more alternatives than we think we dio, and the applications of this are really endless. There's so many things you could do. You could start. You could eat turkey burgers instead of beef and you'll still get full. It could be a decent meal. You Scott gotta have the right condiments, but you might save $10 on feeding your family turkey burgers instead of beef. You could plan to hang out in someone's house and have, like a potluck slash happy our get together at someone's home instead of going out to a bar and you'll save plenty money. That way, you might actually have a better time again. The ways you can apply this are endless, But the goal is Are you flipping that switch to say, Is there an alternative if and what if I don't do by this shoe? But I buy this you is there somewhere else where I can find a better deal? When we started asking that question, we're adding more value to our lives because we can make our money go further.
9. Spending Mindfully with E.A.R.: All right. So how do we spend our money? Well, when? When? When we have done watching this. We transition in the living our life. This next week. What can we do? Better? I have a little acronym for you. It's your e a r have you use your ears. We need to be people that are attentive that are listening to ourselves on becoming a great spender. Mindful spenders, someone that's really keyed in with our finances. That takes time. It takes work. It takes reflection. That's the are. So when we're presented with an idea of something weakened by, the first thing we need to do is he we need to evaluate. We need to think through kind of those problems we just discussed. Is this spending? Really? Some thing I want is going to give me that candy bar feeling of man. I'm just I don't even want that money that I just spent because this is just absolutely what I want and what I need today evaluate alternatives. Is this the time? Is this one? I should buy it. We can do this for anything we spend money on. Next thing we need to do is we need to a take action. We have to act. Um, some people will. Ah, no sit and not to poop, you know, saying it's cheesy. Anyway, we cannot spend our whole life evaluating paralysis by analysis. We have to go. You got to spend. You can't be afraid to spend if you've done the evaluating. If you done enough, you either said make a do or don't decision. I am gonna buy it or I'm not gonna buy it and move on with the rest of your life again. This is how wealthy people think about money. They don't have a crisis of character Every time they go to buy something because they can thing know what they can afford, They have a good sense of what they want, and you will get there with time. That but this act stages important is going to make a decision. Once you've done that, once you've made the purchase or what? You didn't make the purchase lasting attitudes to reflect on it. Was this a good use of the wealth that I have of the money I have was that was a good decision, Or should I have bought it? Um And that's the cycle that will go through. And I'm gonna use this E a r principle and a lot of my other classes as well, because we are going through cycles. We're learning how to spend. We're developing these new skills and we're listening to ourselves. We have to be attentive, locked in to what we're doing financially. So spending on purpose, this is the model I have Think about the purchase. Do I want it or not? Want it? Are there alternatives? Is this really something I'm gonna wanna have in a year? And then you make the action and then you reflect on it, and your your future spending this will become natural. I do this all the time on I hope this is a good way to help you think about it. E a r evaluate, act, and then reflect
10. Thankfulness: So here we are. We, as we try to rein in all these thoughts we had about what is money. What is the what is mindful spending about? What are the problems that keep us from it? How do we actually do it? The goal of mindful spending is ultimately thankfulness if we are not content and thankful we are, as creatures are just going to spend, spend, spend, try to fill ourselves up. But if we can replace the this greed that kind of tears apart our financial life, if we get rid of that Faried and replace it with contentment and thankfulness, then we're on our way to living on inherit, inherently healthy financial life. But as I hope, you can see how much that influences your whole life. If you could just be thankful, even spending things on mundane things like your electric bill, your house payment, whether it's rent ra mortgage, you should say I'm living my life on purpose and I'm glad I have electricity. I'm glad I live where I live. I don't want to live anywhere else. Every dollar bill that goes out the door, you should be getting that candy bar feeling of saying I absolutely want to spend my money where I just did. And I feel good about it from the reflective standpoint, because you've done the work and evaluating what you should be spending your money on because you acted and you're spending your money the way you want. Teoh, you're gonna reflect and say I'm thankful. The reason you will be saving is not to hoard money out of fear. Well, you're going to save money because you just know there's so many better things out there for you, and you don't need all these things that everyone else is spending their money on. So I hope for you after going through this class and thinking through this content that you're gonna be building your way towards having a little bit of extra. At the end of each month, the world strategically help you get there. The more classes you go, Teoh. But this is the groundwork for it that you're spending your money on what you want. You're not spending your money on the things don't want because you understand opportunity cost. So this brings us to an interesting point. We have talked about a whole lot so I want to just congratulate you and recognize the good job you've done just by hanging on. You might have someone settled energy because we're kind of poking at the ways you spend money that you probably don't never even thought about. I want you to take that energy and take that into our class project if you want. Maybe what you do is you can bookmark this page, save this and come back and do the class project another day. But this class project is designed to help you cement these things into your mind and also to help you take a look at your own financial situation. So instead of being less general, it gets more specific to you. So let's take a look.
11. Class Project: Let's just wrap it up real quick by looking at the class project. There's two worksheets that I'm going to give you, and that's on purpose because the first one's private. I want you to save it somewhere where you can look at it and refer to it later. But that's something you and your significant other. If you have one that you do finances together with can look at and really think about how you're doing finances privately and personally. You know, again, I'm not gonna ask you to share that stuff with everyone else. And then there's a second work. She that's more of a reflection that is going to be productive to share with other students . I want to see how you reflected on it, so we want you to share that in the project below. I am uploading them in a PdF format that's just so that as many people as possible can get access to it. What you can do is just save the tax or take a picture of it however you want. However, you can, um, just upload your reflections in the project area. I look forward to seeing what you come up with so that that's our time. I look forward to seeing your projects. I want you to thank you for considering how you can spend your money mindfully. I look forward to seeing you in personal finance. Wanted to When we do talk about minimalism, that'll be coming up soon. Otherwise, great job sticking through the class again. I'm John. Feel free to reach out. I want to know what you think about the class and how you are growing until then, man, I hope you make big changes, and I hope you go. Where do you want financially? And I hope you know that you can do it. So I'm here for you. And I hope you know that you have within you what you need to make a change. So go out there and spend your money on purpose. All right. Thanks.
New Castle Financial Coaching, PF 101
