Where’s Your Money Going? How to Track, Cut, and Align Spending – Episode #649

Is it time to spring clean your spending habits? On this episode of the Dentist Money Show, Jake, Will, and Taylor talk about how easy it is to accumulate unnecessary expenses and how those hidden expenses can throw off your financial plan. They discuss the importance of tracking spending, understanding the real impact of “big-ticket” items, and making sure your money reflects your values. Tune in to help bring clarity and intention to your spending habits, ultimately leading you to more freedom and better retirement planning.

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Podcast Transcript

Intro: Hello everybody. Welcome back to another episode of the Dentist Money Show, brought to you by Dentist Advisors. We have a super cool show for you today. we have three of our very own advisors. We got Jake, will and Taylor, you know that’s right. No. Matt and Ryan today on this episode, they call themselves the other guys or the role players. I prefer to call them the rising stars of our team. And, uh, they jump in and talk about. all things spending and, they bring so many great metaphors, analogies, different frameworks, things to think about around being super intentional about spending ways to think about it. there’s so much value in this episode. I know you’re gonna get a ton out of it. Again, from our, rising dream team of Jake Will and Taylor. I’m excited for this. Hope you enjoy the show.

Jake Elm: Welcome to the Dentist Money Show. We have an awesome, really special, really extravagant episode today. my name is Jake. We have Will and Taylor joining us today. How you guys doing?

Will Gochnour: Are doing good. Excited to be here.

Jake Elm: I know. I’m excited for this. This is a little bit different than the typical. Matt and Ryan. We’re giving them a break for a little bit this week and we figured we’d come on and talk about some really cool, important finance stuff.

Taylor Sutterfield: We were joking. We were joking earlier that we’re the other guys. So you guys are getting

Will Gochnour: The

Jake Elm: We are the other advisors.

Will Gochnour: Kind of like the role players

Jake Elm: Role

Will Gochnour: Important to the team, hit some threes.

Jake Elm: Yeah. I’ll sit in the corner. I’ll space the floor. I’ll play some defense. If you wanna throw me an op or anything that, that’s what I’m here

Taylor Sutterfield: Will’s the stretch five that you use in the spots.

Jake Elm: Will’s our stretch. Five. I’ll sit in the corner. What is your

Taylor Sutterfield: I, I might be done, I might be the defensive energy guy.

Jake Elm: You’re a Draymond Green, where it’s just like, I’ll take a lot of fouls, I’ll get in your face and make sure if there’s a fight happening, that’s what you’ll, that’s,

Taylor Sutterfield: Undersized undersized at my position. Yep. Yep.

Jake Elm: Cool guys, well, I really am super excited for this today. Uh, we just wanted to make this more of a discussion. Talk about a few things that are top of mind. I know we wanted to talk about spending in particular. I dunno, where do we wanna start with this? Taylor, did you have a, a metaphor or something, or analogy to get us into this topic? What did you wanna start with?

Taylor Sutterfield: So again, we were, we were discussing earlier, and just to give you guys a peek into our lives here, between the three of us, we have 10 kids under the age of seven,

Jake Elm: Is that true? I didn’t even realize that.

Taylor Sutterfield: Yeah. 10 kids under the age of

Will Gochnour: The,

Jake Elm: Yeah. Will’s carrying the load. Will has,

Taylor Sutterfield: The most. But, uh, you know, Shelby and I were trying to catch up to that, So we, we’ve, we’re just a lot of young dads and there’s nothing that makes me feel more like a dad than spring cleaning. Uh, I love more than anything else cleaning out my garage after the winter and just, I take every single thing outta my garage and I blow it out with the, you know, with the blower. And then I get the power washer and I power wash the ground, and then I re-put everything in and I throw away the junk. And I just love cleaning

Jake Elm: What’s the junk? What junk are you accumulating in your garage throughout the winter.

Taylor Sutterfield: When you have three kids, all you do is accumulate junk.

Will Gochnour: My neighbor brought over like three pairs of roller blades and they’re like, here, you can have the, and they’re like old roller blades. My kids can’t ride roller blades yet, so.

Jake Elm: So you took them, you didn’t say?

Will Gochnour: Took ’em, but then we like, you know, sent some off to Goodwill and so that it was, you know, you kind of take ’em and then you’re like, well, maybe we won’t use these. There’s just stuff you get, stuff we have like, we literally have like six strollers.

Taylor Sutterfield: There, there was a last spring our, there was like flood warning and so the city was given out sandbags by people who were by the river and then they just let people keep ’em. And Shelby was like, let’s get a sandbox. So we bought a sandbox and then put in a bunch of a, a sandbox, and that’s now in our garage because you know, it gets gross after one season and you don’t want it anymore. So.

Will Gochnour: Play with it in the garage during the winter?

Taylor Sutterfield: No, but we, we dumped all this stuff out and got rid of it, but it’s now we have, like you said, we got some hand-me-down skis, we got a sandbox. We have just junk that accumulates over time. So anyways, you just accumulate junk and I, I think this applies to your finances a lot when it comes to in particular spending. Right. And I think, Jake, you’ve written articles about this and just, we’ve had a lot of conversations about spending. with regards to our clients and just observations that we’ve had with client spending across, you know, between the three of us and between all of our advisors. We have, we talked to six, 700 dentists in a two, three month span, right? And so we’ve been talking about spending quite a bit, and I just think there’s a lot of good nuggets that we can pull from these discussions that we’ve been having with hundreds of dentists across the country.

Jake Elm: Yeah.

Will Gochnour: Junk is the right way to put it because the reason you accumulate junk is you spend money on stuff and then you end up having more stuff than you need. We just got, uh. A ninja creamy swirl dropped off on our porch. ’cause Amazon can deliver stuff like within six hours.

Jake Elm: So I have a ninja creamy that I bought for my wife last year. She actually loves it. She uses it all the time. Even last night, she was making, you know, like she does a chocolate protein ice cream or something that she uses. So what’s the swirl?

Will Gochnour: We will see. They, they do, it’s the creamy plus. They make soft serve from it. So you like do the creamy and then you make it into this little soft serve. I, I’m hopeful we’ll use it. I’m like a big ice cream guy. I need to maybe eat healthier ice cream, which is kind of the. You can make your own ice cream mixtures with healthier ingredients. I guess we’ll see how it goes. I bet we use it four times. We also bought a juicer like a month ago, ’cause Olivia was gonna start drinking like, uh, celery juice, I think. And then we’ve used it like twice.

Jake Elm: Not to call her out yet, but has she been drinking cery

Will Gochnour: well, she did like a at the first, and then it’s kind of tailed off. You know how those things go. So I, and I, I know I’m not alone in this. I know I would say 80% of people how there have juicers that they use. Maybe once or twice, so

Jake Elm: Yeah. I wanted to tackle spending here. I wanna be careful of as we’re going through the different aspects of how to talk about spending, I really don’t want to have the tone of the Dave Ramsey type of discussion of spending, right. Where it’s like I. This is all big, dim and gloom, and if you’re not saving enough money, you need to be eating rice and beans for every meal and you have to cut back and you shouldn’t be enjoying anything if you’re not saving X amount of money. You know, that’s, I feel like that’s a very traditional personal finance way of viewing spending is, it’s a really bad thing. I don’t think any of us are coming from that point of view as spending as bad. It is not bad. It’s more of. I feel like we just need to have more discussions about it and how to spend appropriately and aligning, aligning, spending with what you value and just being more open about it in general. Right. Is I think, the point of what we want to talk about here. So, do we wanna start with just talking about how important spending is in the framework of how this impacts long term? Finance goals, how this impacts spending. Um, I dunno. Do one of you guys want, Taylor, do you wanna hit on like a TT overview? Want to talk about that financial independence number? Do we wanna start there?

Taylor Sutterfield: Yeah, let’s, I, I think spending is probably the most underrated finance number that gets overlooked, right? Um, people really hone in on their net worth. They hone in on their investment returns, you know, the number of assets that they have. And time and time again, you know, people will have everything dialed in and they’ll know all these numbers, and then you’ll ask ’em what they spend. And they won’t know that number. Right?

Will Gochnour: Or they’ll underestimate it.

Taylor Sutterfield: A hundred percent right. And I think, what’s the number you hear? Like, I think, um, on average people underestimate their spending by 30%, right? So.

Jake Elm: See this consistently, right? Taylor? What we’ll have as part of our process, we’ll have dentist sue Collin. They wanna do a consultation with us, and as part of the intake form, we ask them to solicit out, like, give us your just annual or monthly spending number. Just give us a guest just to see where you stand. And we always see those numbers. And then if they two do become a client of ours and we actually do a deep dive on their spending. We see what almost 100% of the time that they are underestimating their spending by what,

Taylor Sutterfield: I, I, I almost,

Jake Elm: Would you say that’s

Taylor Sutterfield: Find it, I find it laughable at this point because those survey questions, just to kind of give you guys an idea on that initial intake form, we’ll ask them what their income is. We’ll ask them what they’re spending and then we’ll ask them what they’re saving. And a lot of times they’ll be like, I’m making 400,000. And then they’ll say, I’m spending 10,000 a month. And then they’ll say they’re saving two grand a month. Right? And when I see that, I’m like, okay, so what’s, where’s the rest of this money going? Right? If you’re spending, if you’re making 400,000 and you’re only spending 10, right, you’re gonna have a lot more than 2000 left over. To save every month. And so I just think time and time again, to your point, Jake, people just don’t have an appreciation of what their actual spending is. And if you’re not tracking it, it makes sense because it’s hard. It’s hard to know what you’re spending. I. Right. Because if you’re just doing back of the num napkin math, it’s really easy to add up what your mortgage and your bills and your average grocery bill is. But it’s harder to add up the ninja juicer. Right. And the Christmas and birthdays and the, you know, three, three, $10,000 vacations that you took and, and all the things because. Truly spending should not be. What are my fixed expenses? Spending is a representation of your entire lifestyle and your entire lifestyle does include things that happen every so often, right? We were just all discussing our yards before we jumped on this podcast, right? How much are we just spending every year to make sure our grass is green, right? And we have flowers in the pots and all of the random

Jake Elm: Crazy. It feels important though, Taylor, to have my green grass. It’s when I look outside, I want to have nice green grass, you know?

Taylor Sutterfield: So long story short, spending can be really hard if you aren’t tracking it, but it is one of the most underrated numbers to be tracking because spending then tells us how much we need to be saving. Spending, tells us how much we need to have amassed in our net worth so that we can eventually retire. Right? And one of the big numbers and metrics that we use here when tracking retirement readiness or how you’re doing from a long-term planning perspective is a metric called total term, right? And total term is really simple. We just take your total net worth and we divide it by your annual spend, right? So one point of total term is just in your net worth. You have one year’s worth of annual spend. Right. So if you don’t know what your annual spend is, you obviously can’t calculate that total term. And if you’re underrepresenting what your annual spend is, well then what’s gonna happen is your total term’s gonna be inaccurate, and we’re not gonna have a accurate picture of what you need to replace down the road.

Jake Elm: Yeah, I think that’s a great point. So I think that one of the first things we need to get to is you need to know what your spending is, right? Just bottom line, whether

Will Gochnour: Out the garage, the proverbial spending garage in

Jake Elm: Clean out the proverbial spending garage and just sit down. Again, you can do this. On an afternoon where you don’t have anything going on, it shouldn’t take super long, and you can use a budgeting tool that are out there. You, if you want, most bank apps now, I feel like will track your spending, whatever, you know, if you’re using Chase or whatever credit card company or bank you’re with, they’ll keep track of your transactions. But just sitting down and figuring out, okay, what is my spending? This isn’t a budget review, right? This is then trying to figure out

Will Gochnour: Yeah, you’re not trying to budget. You’re just trying to stay accountable to what the number is,

Jake Elm: Exactly. You gotta look into your garage and see what is there and just like, what, what are we dealing with? Right? Is the first thing. So that’s, yeah, that’s a great place to start is just know where your spending’s at.

Will Gochnour: Why don’t people do that? Is it scary? Like, is it hard? You know, I, I think, uh, it, it feels like a little overwhelming to get in there and like figure it out. Right. And I think some people have some pretty unhealthy relationships with, you know, how much, what they spend, how much they spend. It’s like a taboo subject to talk about with your significant other sometimes. And. You know, like you don’t want to get into that where it’s like, oh, you spend too much, or I spend too much, or, you know, it just, it feels hard and I want to acknowledge that. ’cause it’s not as easy as just saying like, Hey, thumbs up. Go track your spending and figure it out, and then you’ll be all great and good to go.

Taylor Sutterfield: Yeah. Think about when you drive down the street and you see people’s garages open, right? A lot of times people aren’t parked in their cars in their garage because they have so much. Junk in there and it’s overwhelming to go in and actually see what you’ve accumulated, what you’ve amassed. And I think the same thing happens with that spending number, right? Nothing. Spending is a true reflection of what you love, right? Because money doesn’t lie, right? Money is showing you what you spend on is showing you what you’re actually spending your money doing and what you’re buying and what, so there’s nothing more emotional than going through your spending with someone else.

Jake Elm: Yeah. Yeah, I think that’s true. I think what your, to answer your question, it’s just I think we’re scared when we actually sit down and look at our spending. We’re scared what we’re gonna find, Right? Or we’re scared what the number’s going to be. We’ve, I think we’ve all had experience with this as we’re sitting down with dentists and talking about their spending number, and we have our own software that can track and we say, okay, here’s your top line spending number. And oftentimes I’ll hear like, oh. Ouch like that. They’re like, oh, that feels like a lot. But you’re probably right. Right? And it’s just uncomfortable to be confronted with what that number actually is. ’cause in our minds, like we said, we like to think it’s a little bit less, or we like to think we have control over it. And so, yeah, I think we’re just scared as humans just to find out what we actually do spend, because, so I like you pointing that out, will, even if it’s uncomfortable, even if it’s scary, you kind of have to do it.

Will Gochnour: Well, and I’ll, I, I think like too, it helps, I think it helps to have, this is why I think an advisor, it really helps to have an advisor to have somebody else look at it and then. Like kind of, I mean, it feel, I don’t wanna like go take my own white blood cell count and go figure that out and do it, right? Like, it helps to have somebody else look at it and tell me if it’s good or bad and then like, help me know how I need to proceed. And so, honestly, a good advisor is somebody that’s gonna push you on your spending or at least help you understand how much you’re spending. And I think, you know, there’s, there are far too many financial advisors in the country that maybe don’t, that maybe don’t talk about spending at all. Like they only talk about investments and. I love the quote that’s like spending is the real financial plan. Investments, just finance it. Investments are obviously important, but if like knowing how much you spend, like as Taylor was alluding to with the total term number you all we’re doing here is trying to figure out how much money you need in retirement and your money you need in retirement is predicated on how much money you spend. So it it, when you boil it all down. S we gotta, if you, if you can really get dialed in on how much money you spend, you’ve got a huge head start on anyone trying to prepare for retirement.

Jake Elm: Yeah, we can’t even plan for where you’re going to go or what you need to do savings wise or invest investment wise or anything if we don’t know what your current lifestyle looks like. Right. So just to revisit that, just to reiterate, you know, the total term, that financial independence number. If we generally like to say you need about 25 to 30 times your annual spending and assets to be able to retire comfortably, right? Once you can get to that point, you can invest your money in such a way that theoretically, right? The returns you’re getting from your accounts every year can cover your lifestyle, right? So at that point, you do not need an active income. You can live off the gains you’re getting from your investments once you get to a, again, 25 to 30 times your annual spending, right? So to give an example, let’s say you spend a hundred thousand dollars a year. what we would say, what we’d wanna plan for is, okay, well you need about 2.5 to $3 million right. In retirement to cover that spending. As I was saying that Will was saying I needed to up to a hundred thousand dollars

Will Gochnour: No one spends a hundred grand a year anymore.

Jake Elm: I think there are people that do, yes, our, the clientele, most of the dentists that we work with, a hundred thousand seems low. Taylor, do you agree with that?

Taylor Sutterfield: Well, I, we know it’s low because we’ve done benchmark surveys and we’ve gone through our clients and we track their spending, and we know on average our clients spend $18,000 a month, right? So on average, our clients are spending well over a hundred thousand a year.

Jake Elm: Yeah, we’re at about 18,000. Yeah, we did that survey. You can go, we have a few webinars we did about that. Yeah. We’re at about average 18,000 a month. Right. For the dentist that we work with. So if we did the math for 18,000 by a hundred thousand dollars number, let’s say it was low, so let’s do it with 18,000 a month. So if we did 18,000 a month times by 12 and then you want to times that, but let’s say 25. That’s about five and a half million, right? Would get you to that 25 times annual spending about, so five and a half to six ish

Taylor Sutterfield: It’s worth Jake. Let’s just break down that math because it’s instructive to, you know, what you need to replace when it comes to spending, but why do we say 25 to 30.

Jake Elm: Yeah, so this is based on what we call the withdrawal rate is what, if you read like a personal finance textbook or investment textbook, what it’ll be called. Essentially what that’s saying is if we look back over the history of the stock market or the history of different types of investments, we feel pretty comfortable that in a conservative portfolio you can get like an at least a four to five to 6%

Will Gochnour: Is the num, like four is the literature out there, right? Four is the withdrawal rate number that if you can sustain a 4% withdrawal rate, which I think can be kind of lazy to just stick a number four, like a four on it. And say it’s good. And so I think that’s why you give it a range.

Jake Elm: Yeah, that’s like essentially what I’m saying is we feel comfortable, like the history of the stock market and the returns have proven that if you take 4% from your portfolio, you should be able to sustain the amount of money you have in your accounts indefinitely, right? Like you’re gonna grow a higher than a 4% rate

Taylor Sutterfield: And, and what I, what I like to use with my clients with regards to this 4% is like a usable net worth is the term that I use because again, all of this depends to what Will was saying earlier, like we need to have a range and we need to have a little bit of a ballpark because everyone’s situation is different. But for example, if you have a really, really large primary residence. That’s making up half of your net worth. You know, a 25 total term may not be enough, right? Because if half of your total term is com comprised of non-usable net worth, right? Then it’s different. So that 25 times your spending really needs to be in assets that are usable,

Jake Elm: So this wouldn’t include a house. Typically, you do not wanna sell your house to fund financial goals. You always have to have somewhere to live. So that’s what I say. Yeah, ex this, that net worth number would be excluding your house. Excluding like a cabin you have that you don’t wanna sell you kids accounts. Sorry, I interrupted you, Taylor. Anything you would add there?

Taylor Sutterfield: No, I, I, I think the, the reason why I wanted to highlight that math is ev, it may seem small, but let’s just say if you spend, so another way to look at this is if you have a million dollars of net worth and we can withdraw 4%. That is about $3,500 a month of spending, right? So every $3,500 extra that you spend, or if you get a home that’s that much more expensive or whatever it may be, your lifestyle is $3,500 more. You need to add a million dollars of net worth to your retirement planning.

Jake Elm: That’s kind of crazy to think about, right? Like it feels like it’s pretty easy, like if it’s like, oh, we bought a bit of a nicer house, or we paid for this extra subscription, or we’re doing a personal trailer, like it feels like it’s not hard for a lot of people to increase their spending by a couple thousand dollars a month. That seems very easy to do, but it’s crazy to see the flip side and the consequences of that are, okay if I increase my spending by 3000 a month, I need an extra million dollars in net worth in retirement by doing that. Pretty crazy. To think about. I’m glad that we have that at that, ’cause I don’t think people think about that in that way. Now I know there are probably some listeners out there thinking, well, I’m gonna increase my spending now, but once my kids are out of the house and once I’ve paid off some debt, like my spending’s going to go down in retirement, right? I think a lot of people think that like my spending’s a lot now, but once I get to that point where I do wanna retire, I’m gonna spend way less.

Taylor Sutterfield: When the

Jake Elm: Be true.

Taylor Sutterfield: Paid off and my kids aren’t in college and they’re out of the house, then I’ll spend less.

Jake Elm: But yeah, that’s what people think. Studies show that’s not true. Again, that may be true for your personal situation, but in the aggregate studies show that people don’t actually spend any less in retirement. So even if you have, let’s say, a mortgage that’s paid off or you’re not paying for kids’ sports teams or things like that, I. Other expenses will come up to fill the void, whether that’s extra travel you want to go on, or extra medical expenses that may come up as you get older, or if you have kids, those kids maybe you don’t have to pay for their sports teams, but now they’re asking for help with cars or down payments on houses or grandkids coming to the equation that you wanna spend on. There’s always things that will come to fill the void of whatever expenses you may have dropped during your middle earning years. Hopefully that makes sense. So I wouldn’t plan on it. I don’t think that’s a good plan to be like, I’m gonna spend less in retirement. Typically, that’s not the case.

Will Gochnour: Right. And you, you want to, I mean, you want to live a comfortable retirement. You want to know that you’ve set yourself up to be able to spend your money. You’ve worked your butt off all these years. Like, you know, you would hope that you could get to retirement and not have to like limp to the finish line. So that’s what these numbers that we’re talking about, this 25, 30 total term, it’s a pretty conservative number. So we want you to. Be conservative in a way to get to the point where you know you’re going to be okay in retirement. And that’s, that’s, that’s the idea, is spending shouldn’t be. It shouldn’t be this boogeyman. It shouldn’t be this scary topic. You it, as long as you can build it into your life and be accountable to the numbers. Then you should feel liberated and free to spend what you want. And that’s our goal is to not have spending be this like dark cloud over you, is to have it be this, this thing that, you know, I really loved what you said, Taylor is like spending is a like, what did you say?

Spending is a reflection of what you love. And I think that’s true. Like my, one of my favorite quotes is, the goal isn’t to be frugal, it’s to be ruthlessly intentional. And I, I like, that’s goes to what you were saying at the very beginning, Jake, we’re not trying to be like Dave Ramsey, rice and beans guys, like, don’t spend any money

Jake Elm: Spending’s not evil. Like spending is not inherently evil.

Will Gochnour: Life’s all about at the end of the day, kind of.

Jake Elm: Yes, like every dollar that we make is eventually going to be spent, right? Either, whether it’s spent by us or spent like spent now, spent later on, spent by people we give our money to, like every dollar we make is going to be spent at some way. It’s like spending inherently is not an evil,

Taylor Sutterfield: Yeah, and I think, I think our point here is that ignorance isn’t bliss, right? Like if. Close your eyes and grin and bear it and just like hope it all works out. You’re gonna be sad, right? And you’re not gonna be happy. You’re not gonna have that bliss. But if you rip the bandaid off and you start tracking your spending number and you know what it is, even if at first it hurts a little bit. Right. In the long run, you’re gonna be so much more healthy for it because it’s going to do several things for you. It’s going to, one, give you a clear vision of what you’re actually spending day to day, but two, it’s gonna give you a clear vision of if you continue these spending habits, this is how much I need to replace this type of lifestyle.

And then from there, that’s where the planning begins. That’s where you have, to your point earlier, like. Spending is the planning, because depending on what you’re spending and what we’re doing currently, that tells us how much do you actually need to save? Do you actually need to spend less or you know, and this is the thing we, we talked to so many different people about their spending. Right. And you know, Jake, you were joking about it earlier, but it feels like every time we show people what they’re spending almost, if not without fail, they’re always saying, that’s too high, that’s too much. You know, I’ve never been to someone be like, oh. That’s less than I thought. Like I’ve never once heard that. But I have told clients after putting that spending number in context of their financial life, that you’re actually spending a healthy amount, right? You aren’t spending too much. It’s okay to spend as much as you’re spending. Right. And

Will Gochnour: I’ve had clients, I’ve told clients they need to spend more money. I’ve had that conversation multiple times where it’s like, you’re making enough money, you should, you should spend some more money. Enjoy your life. Enjoy a little bit

Jake Elm: Or even it can be just like that. Yes, you can go on that trip you’ve been putting off. Right? You have an like, you can do that thing. You can buy that road bike that you’ve been wanting to buy, whatever. Which can be freeing. Yeah.

Taylor Sutterfield: But that’s the thing is ignorance isn’t bliss. You need to know, right? You need to know that number. You need to know how healthy is it, right? Is it enough? Is it too much or is it the right amount? Right, and then you can go from there.

Jake Elm: Yeah, so know your number and then just to, I want to get to what you said will about spending intentionally. Here is our next segment, I guess if we want to call it, but just to wrap this up, just like the reason we went through the whole mathematical example is I think it just highlights. How every increase in spending really does make a pretty big impact on your finances, right? Like it actually negatively, if you want to call it that, impacts your finances twofold. The more you spend every month, the less you have leftover to save every month, and then it also creates more need. So that’s why I just wanna be very cognizant about that, of like, as you’re going through different stages of life, buying a new house, buying a new car, getting a boat, doing these different things, we’re not saying you should not be doing those things, but just be really conscious of, okay, if I’m jumping up my spending a little bit here, I really need to consider the consequences of, okay, that means I need to keep my saving at a good spot, and that’s gonna increase how much I’m gonna need to retire with, right? So,

Will Gochnour: It lifestyle creep. It’s a thing. It happens as you make more money. You inherently spend more money usually, so the goal is to be know your number so that you know, like it’s okay to have it creep up, but it has to be in context. Just like Jake said, you gotta maintain the same savings rate, so if you’re, if your spending’s gonna increase, your savings has to increase as well.

Jake Elm: Probably. Yeah. Which makes it, yeah, a little more. Okay, so let’s get into. More of this intentional spending idea. ’cause I, none of us are saying, Hey, don’t go spend any money. We want you to spend money, but we really wanna focus on spending money on things that you value and things that you enjoy doing and make sure we’re intentional about that. I always like, I wanted to talk to you guys about. I feel like when people are trying to, when they’re looking at their spending, they found out their number. Like, okay, we need to cut back here or do different things. I find that people tend to focus on the wrong things sometimes. Right. Where let’s say that just, this is an example I. If someone looks at their spending, like, Hey, I’m spending a little bit more than I want to, I actually think I want to cut this down. Oftentimes in my conversations I’ll hear people say like, oh man, that dang Disney plus subscription. It’s $15 a month. I gotta cut that out. Or my Netflix

Taylor Sutterfield: Never, they would never say. Disney plus, they would say Netflix or

Jake Elm: I’ve heard Disney plus before Taylor. But yeah, Netflix is the one where I’ll hear like, oh, I’m paying, you know, $25. To the gym or something every month, and I can cut back on a few of those things. And I feel like most of the time those small subscriptions aren’t making that big of an impact on their spending. Like that’s not the problem here for like if you think you have a big spending number in my mind, you wanna start with the big ticket items, right? So like look at how much are you paying for a house, obviously is a huge one, right? Like what is your mortgage payment? What is your rent payment? How does that impact your wealth spending number? Cars are a big one, right? As we’re looking at cars, I mean, if you have one or two cars, they’re both paying loans for, I mean, if you had to have a car payment that’s a thousand dollars a month that you’re paying on, that may fit within your budget, and that’s okay, but that’s a lot of Disney plus subscriptions, right? Account for a thousand dollars a month, that’s a lot of different outings you can do or going like, it’s like I would focus on like mortgage first. Car expenses. Are there any other big loans or debts that you have that are making up a big portion of it? Focus on those first and then you can kind of make your way down the list of other things. Maybe you can cut out. Do you guys agree with that?

Taylor Sutterfield: I agree and it’s the, the problem with all of this is what we said at the beginning is if you really do have a spending problem, right, you kind of have to take a hard look in the mirror. Right. And, and recognize that you’re the pro. You, you may be the problem, right? And that’s okay, right?

Jake Elm: Yeah.

Taylor Sutterfield: And then I wanna be like sensitive to this because it is, you know, it’s hard and spending as hard, but I will say I’ve never met a problem that spending wasn’t the main reason for that problem when it comes to personal finances.

Jake Elm: Like if you’re feeling tight, you feel like you can’t save enough money, it’s usually like you should look at how much you’re spending is usually the number one culprit.

Taylor Sutterfield: Even like you might say, well, it’s all my debt payments, but a lot of times when you get in trouble or behind on your debt payments, a lot of times it’s due to spending. Right. You know, a lot of times it’s the credit card debt and then the debt consolidation loans and the things that snowball and you could say, oh, well that’s my debt payments, but those debt payments are coming from. Spending habits, right? They’re coming from previous spending things that you did. And now in your current life, you not only have to afford your current spending, but you have to pay the tax on your past spending that you didn’t pay off at that time, right? And so if someone does truly have any. Tightness when it comes to their cash flow, nine outta 10 times, it’s gonna be due to their spending. Right? And you have to be willing to be honest with yourself and hold yourself accountable to that and be willing to have some tougher conversations. Maybe you are driving cars that are too nice for your income level, right? Maybe you do need to switch from the Audi and and drive the red Honda Fit, right.

Jake Elm: Yeah, cars are a big one.

Will Gochnour: I, I think that’s like, it is important to look at the big ticket items. ’cause that’s where like you buy the outdoor furniture, that’s whatever, four grand or something. And it’s like, that’s. That’s your big purchase for the month, it feels like. But that adds four grand a year spending that month, and it’s so, it’s like you can always find something large. The little stuff like the Starbucks and the Disney pluses and all those things definitely add up and it, like I, I do think you need to do like a full. Look at the big picture. ’cause again, Jake’s right, cutting Disney Plus doesn’t solve the spending problem. It just doesn’t. So, you know, I, you have to have a house and you have to have cars. And so it’s like, and, and again, we’re, we’re not to requote myself, it’s not about being frugal, it’s about being intentional, right? So if you are driving a fancy BMW and that’s makes you the happiest person in the world because you love that car and it brings you joy to roll down the windows and crews to your. Job and it’s the best thing you’ve ever spent your money on. Keep. Keep the B and w. Heck yes.

Jake Elm: But you may have to look at the trade offs, right? It’s okay. I love this BMW. It’s awesome. It brings me so much joy, but maybe I need to see a couple less movies a month, or maybe I need to eat out a little bit less in

Will Gochnour: A thousand dollars less on your vacation. Maybe you don’t stay at the nicest five star resort. Maybe you stay at the four star resort. So these are things that it’s like, it’s okay to spend this money. It’s for sure. We want you to enable you to spend your money. It’s, it’s easier to if, if you’re not, if, if the things at the top of the list, the big ticket items don’t fit into your being intentional. Those are the easiest things to cut. They make the biggest impact. If you live in a, a house that’s too big for your needs and your kids are moved out and you don’t need that big of a house downsize, that’s gonna save you thousands of dollars a month.

Jake Elm: Can we talk about vacations a little bit? Will. ’cause you brought that up. And I think this is important to touch on because in today’s day and age, everyone has to go on a few vacations a year, right? That’s just that you’re not living a normal life if you’re not going on multiple vacations a year. but I think in talk, in conversations with people, they’ll say like, yeah, I, I kind of went through my numbers and this is, it said, this is what I’m spending. Like, I feel like this is my monthly bills, but my spending’s a lot higher than that. And I think one of the biggest issues with that or why your spending’s gonna be inflated when you look at it on an annual basis is maybe you went on two or three vacations in one year, and let’s say those vacations cost 25 to $30,000 all in. Essentially what that does for your spending is that’s adding on three grand a month, right? 2,500 or $3,000 a month to your spending that you’re not factoring in to your monthly budget. But it’s still spending nonetheless. So those bigger one-off items, whether it’s vacations or Christmas or Valentine’s or anniversaries or all these other things that come up kind of on an um, irregular basis, you have to fit those into that spending equation too, which I think those are some of the things we miss when we’re

Taylor Sutterfield: And those are the things that, like, if you like them now, you will only like them more in retirement. Right? So you can’t ignore those, you know, they have to be included in that spending total. Right. Because I. Travel specifically is one thing that you will see increase when people retire, right? That’s going to happen.

Will Gochnour: Well, and increases throughout your life too is you have fan, like more children that you’re traveling with or fancier taste. You maybe feel like you need to stay at a nicer place the next year than you did the last year. And so that’s like one place that I’ve noticed personally. Is like really easy to see this lifestyle creep. I’m buying more plane tickets. I need a bigger place to stay. I want to stay at a nicer

Taylor Sutterfield: Will, will, will not get on a Southwest flight. Right? It’s gotta be.

Will Gochnour: Here’s the deal. I’m a Delta snob. They got the TVs. It’s easy. It’s

Jake Elm: What are the airlines that have been crashing? I’m not really What’s, what are the ones that are malfunctioning?

Will Gochnour: I don’t know. It’s

Jake Elm: What airlines are those? Those, that’s probably Southwest.

Will Gochnour: Was it Delta? Maybe Delta did have the one that flipped over. I don’t know. Anyways, I, I’ll say it, it’s the best money I spend the whole year is taking the vacation with my kids. It is truly like, and it’s the best money I’ll probably spend the rest of my life. Like I will look back on the pictures from us going to the beach in California and cry myself to sleep as a 70-year-old. ’cause I’m like, I miss these days. And so like to me, it. This is playing devil’s advocate. A little, a little bit like devil’s advocate. Can I say that word? Devil’s advocate a little bit. Spend the money on the trip. You should go on trips. Take trips. They’re the be like that’s, vacations are an important, if you value them, it’s a very important part of life and in my mind, those are the only best memories you’re gonna have. What are your thoughts?

Jake Elm: I agree. Do you ever think about this? I agree. I think that’s become, we are all millennials here. That’s a very millennial way of viewing things. I think millennials travel and vacation more than maybe previous generations and things that we love to travel and I think we grew up on that. Yeah, like make the memories you only live once, like let’s do that. I agree. I have been wondering though, recently, maybe this shit is me getting older and becoming a middle-aged dad like I would think sometimes like, okay, we can go on this vacation that’s gonna cost, let’s say three or four grand and it’s gonna be a whole week. You know, it’s be a extended weekend, it’s gonna be really fun or. It’s like, what if we got new carpet at our house that’s gonna be like four grand Or what if we got a new couch that’s two grand that’s gonna last us for the next 15 or 20 years. I actually have started thinking like, are physical things making a comeback? Like I’m like, man, we could waste all this, well not waste, but we can spend all this money in a week or we can improve our house a little bit and have it last us for 15 years. I dunno, what do you guys think about that? I’ve been thinking, debating that in my head recently.

Taylor Sutterfield: Well, I’ll tell you. I have been on three Disney trips in the past

Jake Elm: Oh yeah, we need to note that for the audience, will and Taylor are Disney fanatics. Okay, keep going. Big Disney people.

Taylor Sutterfield: And I’ll say the first time I went it was like, man, this is amazing. I want to go back and, and I just to put in context, we’re at an age with our kids where I have a 6-year-old girl and a 4-year-old girl, and they could not be more magical when we go to Disney. Like few things make me happier than seeing their reactions, right? Meeting these characters that they love and lighting up and just the joy that they feel. But I went the first time and it was like, this was amazing. We gotta go back. I went the second time and it was like, oh, that was so great going The third time, I was like, maybe I went too many times. Right. Maybe I’ve reached, maybe I’ve reached the.

Jake Elm: The diminishing returns point.

Taylor Sutterfield: The diminishing current returns. And I, I, I had the thought, Jake, like we’ve been looking at getting an e-bike to enjoy for the summer and I was like, this Disney trip was the cost of like an e-bike with this setup and that we could have used this all summer. Did I make the right choice in this vacation? But I think these types of conversations are the important things, like kind of to will your point earlier of like. and even what I was saying earlier, you really need to like sit down and go through your spending and be honest with yourself and see exactly where your spending is going, because that’s gonna tell you what you’re spending your money on. And then you need to have another conversation with your spouse or you know, whoever you’re talking to about, well, what are my values? Right? This is what I spent my money on last year. Did it align with what is truly bringing me joy? Right. Or is there or there, are there things that I spent money on that were stupid, right. That I probably should not have done

Jake Elm: A ninja, creamy swirl, maybe

Taylor Sutterfield: Maybe, right. Maybe a thousand dollars on flower beds. Right. Maybe you didn’t need to to spend it on the flower beds. Right. You named, insert, whatever it may be. But I think there’s a lot of. Good, interesting and instructive conversations that can happen by being accountable, seeing what you spent, and then looking at, well, what are your values? Did my spending align with my values? Right. Did this actually bring me the joy and fulfillment that I was hoping it would? And if it did, great, right? And if it’s healthy, great, but if it’s not right, and if there’s room for improvement, what can you cut? As Will said earlier, what can you ruthlessly cut? And then spend, you know, intentionally on the things that are gonna bring you that

Jake Elm: And hopefully that frees up. ’cause I think sometimes too we’ll spend on stuff that align with our values, but because we’re not seeing the whole picture, we feel guilty about it. Right. I want to give one example of this. I’m a, I’m a golfer. Um, for people who may not know, I like to golf. It’s really fun. terrible hobby though. If anyone’s out there wondering about getting into a terrible hobby, it takes up all your time. Um, it takes all your money. So I would say stay away. But if you’re already in it like I am, um, and I like doing it. I remember a couple of years ago. I was spending on golf and golf’s not cheap, right? And so I was spending some money. I’m like, man, I kind of, this kind of sucks a little bit. Golf’s really expensive and I, should I be spending on this? I felt a little guilty about it, and then I had a bit of a moment to myself where I thought, man, well I really like this thing. I. Like, if I’m not spending on this, what am I gonna spend my money on?

Like, I really like this thing. Why am I feeling guilty about putting my money here? Um, and I, that kinda shifted my whole mindset. So now it’s like when I’m going up to the counter to pay for my rounds, it’s like I’m gladly paying for this thing because it’s bringing joy to my life. I go play with my family and my dad and my brother and it’s good for me. So I like this idea of it’s not only identifying way you can cut, but it should free up. Like, okay, if you do love vacations, spend the money and don’t think twice about it. Enjoy it when you’re there. Don’t be like, dang, I spent $300 for this dolphin watching trip that we’re going off on a knife. You feel guilty about it as I’m watching the dolphin, it’s like, no, just enjoy the time with your family doing what you’re doing. Hopefully part of this exercise can free up that part of your brain too, which I think is awesome. okay. Can we, I want to end on two questions for you guys. I need you to answer them very thoroughly. The first is, can we go through, ’cause I know we’ve, we’ve shared a bit of our like, Hey, if you’re spending too much, you probably need to reign that in. It’s really important for your finances. But I’m just curious if you guys, do you have a purchase you’ve made recently that you’re like, man, this was awesome. I’m so glad I spent the money on this thing.

Will Gochnour: Mine would probably be like a, I mean, I didn’t technically buy this. My wife was like one track mind on this for about eight months where she, that’s all she could talk about and think about. Uh, we bought a new outdoor dining table ’cause we didn’t, well we had one, but it was like you would get slivers on it when you’d sit on it. So like, you know, it was just a bad setup. So we got a new outdoor dining table. We chose to get a nicer one so that it’ll lasted longer. And like eating, something about eating outside. In like the springtime when it’s like kind of cool I I that like, we just, we did it last night and it was like, this was a great purchase. I feel great about it. I mean, we probably spent too much money on it. We could have gotten like a IKEA one that maybe would’ve been cheaper and, but you

Jake Elm: But you don’t regret it.

Will Gochnour: Is great. I don’t regret it. It’s nice. It looks nice. It hopefully will hold up for a longer period of time and I’m happy about it.

Jake Elm: Sweet. Taylor, what do you got? I.

Taylor Sutterfield: So mine was that e-bike purchase. Uh, we had

Will Gochnour: Bought the eBike?

Taylor Sutterfield: Uh.

Jake Elm: So you did both. You went to Disney and the eBike. That’s the thing too, is if you know, if you’re in that position, just do both of the things. Right. That’s that’s a great place to be in save and spend, which is awesome. Yeah.

Taylor Sutterfield: Well, so we, we had one e-bike, and then we didn’t have the second. And my wife was, you know, I could take the kids on these rides, but she couldn’t come, or, or vice versa. Right. And so it was a matter of like getting two so we could go out and take the kids. And, but I’ll tell you like we were like similar to Will, we were just out last night. You know, spring evening, 60 degrees, and we went on this big long ride to, um, some family’s house, and the kids were just loving life. You know, my 18 month old was so happy he, he could not have been enjoying himself more than on this like outdoor e e-bike. Ride. And was the E-bike $2,000? Yes, it was. But you know, I hope that it, uh, pays itself off in, in just the memories and the time together as a family.

Jake Elm: That’s the point. I, thanks guys. That’s what I wanted to highlight a little bit. Um, mine. Well, the golf thing’s a big one. We’re starting golf season now. We’re here in Utah and it’s finally getting warm. And so I’ve been playing a few rounds of golf and just always I go play with my, my brother and my dad a lot and I never regret it once. Um, it’s amazing. and it’s like spending the money on those things. I never regret it ever. so that’s one. Another smaller one is there’s quite a few mosquitoes where I live and they start coming out here in the spring. My wife bought these like mosquito. Killer repellent, like posts that you can put in your yard. And we bought those and it’s actually been pretty nice getting rid of the mosquitoes.

Will Gochnour: Important. That’s

Jake Elm: There we go. It’s, it’s like we wanna enjoy it outside again. We have two, I have two rambunctious boys who are dying to get outside anytime they can. And so to get rid of the mosquitoes, it’s, it’s amazing. It’s

Will Gochnour: Yeah,

Jake Elm: Um, okay, here’s my other question before we wrap up here. Two Disney people. Tell me your, um, all time favorite Disney movie. Let’s get it on the record for our listeners here. Taylor, you can go first.

Taylor Sutterfield: Well, I know Wills and Jake, so I’m gonna offer one that I, so we don’t have the same, but I, I’m gonna put Beauty in the Beast up there.

Jake Elm: What

Taylor Sutterfield: Yeah.

Jake Elm: And the Beast? All time favorite Disney movie.

Will Gochnour: What’s yours, Jake? Give us yours. We know yours.

Jake Elm: So yeah, I, I have young boys. I am. Typically I like in before kids, I did not watch a lot of kids’ movies, but I feel like I’m now watching a lot because they’re getting into the age. And so I’m revisiting all these movies and that’s why I talk to Taylor and Will a lot about, here’s my new take on the movie ’cause I hadn’t watched this in 20 years. We’ve been watching Lion King recently, and I think without a shadow of a doubt, that is the best Disney movie ever made. it, the music is great. The performances are great. The animation is great. The story is good. what it’s, I just think it’s the best. The Lion King. I, it, it would be hard to dethrone that. Yeah.

Will Gochnour: That’s probably my number one. I’d probably, I, I may go with like a. What, what is mine? Taylor, what did you say? Mine was

Taylor Sutterfield: Well, I knew Jakes was Lion King, and that’s on my Mount Rushmore, but I wanted to throw Beauty and the Beast scare, throw her bone, you know?

Will Gochnour: Yeah. I’ll throw like toy story in the ring. This is a classic Disney, Pixar. Good story. Friendship.

Jake Elm: My boy’s favorite movie is Toy Story two. Um,

Will Gochnour: I think all of ’em. Three. Three’s good too. Four. Okay. But

Jake Elm: The opening scene with like when Buzz Lightyear is fighting Zer kind of in the video game.

Will Gochnour: Gets, that gets ’em dialed in.

Jake Elm: They’re, they scream like they audibly gasp and shout. Like they’re like this, this is cinema right here. okay guys, this has been awesome. This is fun for the people who are still listening to this point. Thank you for listening. any other takes, spending last

Taylor Sutterfield: Yeah. I mean, the one thing I do want to just keep in mind when it comes to, to spending, like spending is one of those things that if people do have problems, spending’s probably there, right? And so just when you’re listening to this last bit, you know, keep in mind I, I think. We take for granted. I know Jake will specifically have really healthy savings rates, so it’s really easy to be like, Hey, it’s okay that I spent this money here, here, and here. But just be aware if you do have a spending problem, right? You know, we may have to make some cuts. Even if you enjoy that spending, even if there is a reason for it, there will be trade-offs and those trade-offs. You have to have that conversation because it’s the most important conversation that you could have for your future is making sure that your spending is healthy relative to your income.

Jake Elm: Gosh, we should not have saved this until minute 45 of the P ’cause I think this is huge. I wanna echo that Taylor by saying, you know, we talked about spend on what you like and what you enjoy, and if you do like doing that stuff, like don’t feel bad about the spending. However, if you feel like you’re not in a place financially where you wanna be, if your savings rate is not where you want it to be, there may have to be some cuts in your spending. Even like on the things you enjoy or like, even if it’s like, man, I’m gonna have to like cut back a little bit here for the sake of my family and find a financial future. Even if it means cutting back on a vacation or a car I like, or spending places you

Taylor Sutterfield: Do enjoy driving that BMW,

Jake Elm: Like you just may have to like

Taylor Sutterfield: You have to wait on.

Jake Elm: Wait on that a little bit, which

Will Gochnour: Self will. Thank you

Jake Elm: Yes. I think that’s an important point where we’re so into like self-help and like self-care these days where I do think there comes a point financially where you may just have to, um, what’s the word I’m looking for? Where it’s like, um, refrain or like, you just may have to, yeah, just refrain from a few of those things. You may have to like lower your enjoyment in life for a little bit in favor of some smarter financial moves.

Taylor Sutterfield: Yeah.

Jake Elm: Okay. thanks everyone for listening. Will and Taylor, this is super fun. I think now the audience just has a peek, but this is what we talk about just on our own side conversations and we just let people listen to it. So that was super fun for me. thank you everybody for listening. We will see you next week. Bye.

Will Gochnour: Bye.

Keywords: spending, financial planning, retirement, budgeting, financial independence, personal finance, financial advisors, lifestyle, money management, intentional spending, budgeting, tracking expenses, saving money, financial discipline

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