Prime Day Tips and Reddit's Brutally Honest Money Confessions

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20:24Elizabeth Ayoola:Now, today we're going to be all up in people's business. You like that, Sean, don't you? It's a favorite pastime of mine. All up in your business, all up in our listeners' business, everyone's business. But today we're going to be in Reddit posters' business. We found a few juicy posts that we're going to chat about because we're doing another, as you can guess, as seen on Reddit episode. We are going to cover a gamut of topics from what made millionaires lose all of their money to how to restructure your budget with elevated inflation. Okay, let's get to the first post. and this comes from the high earner not rich yet aka henry subreddit the post is 250k a year and broke four years ago i made 120k and was happier this poster said now i make way more and i'm broke it's like i went nuts and don't know how to stop dumb spending i do have four kids still in the house three driving age and pay for private school it feels like everyone in my house is static except me.

21:18I'm curious what they mean by static. Anyway, they said, I'm just mad at myself for letting spending get out of control. Besides two 401ks, 100k-ish, and a small investment slash crypto account, 8k, I don't have anything in the way of savings. What are your first impressions here, Elizabeth?

21:36Elizabeth Ayoola:Oh my gosh. Well, when I saw the headline, the first thing I thought about, I don't know about you, but I've been really into threads lately. And I came across a threads post. It's a social media app from Instagram for those who don't know. And they were talking about people who have left six figure jobs or high paying jobs to go and become maybe work at the local library or take a job at the local Starbucks so that they could have peace of mind versus the stress that sometimes comes with the money. So when I initially saw the post, I thought, I wonder if this is in the Reddit post's future. Remember, they said they were happier with 120K.

22:09Elizabeth Ayoola:So I wondered if it was if it's the job or if they just need a lifestyle reset. because like they said, they're overspending. And also this makes me think of the big elephant in the room lifestyle creep is that as you earn more money, you tend to spend more money on these non-essential things. Like you used to be driving a Toyota Corolla, maybe now you're driving an Audi because you have extra money and buying a lot of stuff doesn't often make you happier. Although studies have shown that earning more money continues to make you happier and happier. There's a bit of like a false piece of information out there that people think that past a certain point, you actually don't get any happier year when you earn more money.

22:45And that's actually not true. More money does often equal more happiness, but it depends on how you're allocating that money partially.

22:51Elizabeth Ayoola:That's right. And it sounds like the Reddit poster is overspending. And also it sounds like what I got from them saying that people in their house seem static about it is that maybe they're static that she's making more money or they, wherever the poster is, but they don't seem to be happy inside. Yeah. I almost took that as they're static in the sense that they're not spending more, which if there are mostly kids in the house, that would kind of make sense. But one thing that stood out to me is that they're paying for private school. That could be really expensive if they're paying for three or four kids to go to private school.

23:24You know firsthand, Elizabeth, how expensive that could be. So maybe that was one area where they wanted to provide some lifestyle creep for their kids just to provide them more opportunity. But is it really necessary? If the public schools are perfectly fine in your area, that's still a viable option. That's way less expensive than private school.

23:42Elizabeth Ayoola:Absolutely. And I can't even imagine private school times four. We talk a lot about lifestyle creep and that it's something that we shouldn't let bite us, so to speak. But it made me think, like, what actually can you do to prevent lifestyle creep? And why does it happen? Aside from, hey, I just want to spend money. And I don't know if you've ever heard of the term hedonic adaptation or hedonic treadmill, Sean. I have. It's the idea that as you get more things, you have a happy experience. You buy something that makes you feel good. You get this spike. And then that spike that you get kind of brings you back to a baseline.

24:15You have this kind of new level of feeling good. And even though you'll have a big jolt of excitement after buying something, you kind of get back to your regular baseline feeling of happiness. So you're not going to be on an incline treadmill of happiness as you're buying stuff. It's sort of a baseline.

24:31Elizabeth Ayoola:And it makes me think that at the end of the day, we can have all the money in the world, but sometimes our appetites are insatiable. So we have to put practical things in place to ensure that we are not increasing our spending as we earn. What are some things that you have done, Sean? Because hopefully your income has continued to increase over the years. How have you put a nip in the bud for lifestyle creep? I try to focus on what I actually care about and what I do want to spend more money on when it comes to having more disposable income. So for me, that was getting a somewhat nicer car when I bought a car years ago.

25:04It's going out to nicer restaurants in town because we have so many good restaurants in Portland and I really value that. But on the other end of the spectrum, like I won't be spending a ton on getting my hair done. I don't know. I get simple haircuts that aren't too wild. I like to buy nice clothes, but I try to buy fewer items at a time so I don't have an overflowing closet. I don't spend my money where I don't care about things or I don't spend money as well to try to impress people. I want to make myself feel good and enjoy the things that I have. And if you're buying something to try to keep up with the Joneses, I think that's a big sign that you're letting a lifestyle creep take you into an unhealthy place.

25:46Elizabeth Ayoola:Yeah, the latter is key. But then it still makes me think about what are the practical things. And for me personally, I feel like sometimes I have to trick my brain. Like, yes, I'm earning more money, but I don't need to increase my spending. And I think something else that helps me is increasing my savings rate as my income increases, right? So that I'm still getting closer to the same amount I was getting before versus seeing a whole bunch of more money and saying, well, I have more money to spend. Yeah. We talk often on the show about aligning your financial habits and your spending with your values.

26:16And saving should be a value that we all have because that brings you financial resilience. Well, one last thing I wanted to touch on with this post is how they actually don't have a lot in savings. And that should be something that they're focused on as their income is increasing. They have very little in their 401ks compared to how much they're making. And I think that as they want to build some sort of resilience or security for them and their family, that would be a smart place to focus any kind of income increases, putting that into their 401ks or other savings vehicles.

26:44Elizabeth Ayoola:And I don't know about you, but saving always helps me feel better about spending. Then one tiny last thing I thought to myself, is lifestyle creep always a terrible thing, especially if you're coming from a place where you don't have much and maybe you're living in an uncomfortable way? You can't buy yourself good food to eat. I think in some instances, lifestyle creep is OK as long as it doesn't go overboard. Completely agree. All right. Let's move on to post number two. It's from the personal finance Reddit. CPI, and for those who don't know, that's Consumer Price Index, just came in at 3.8%.

27:15Elizabeth Ayoola:Food at home up 0.7 % in one month. Airline fares up 20.7 % over the year. Is anyone else restructuring their budget around this or are you just absorbing it? Sean, what are you doing? Elizabeth, I am absorbing and adapting because of what else can you really do? There are certain areas where I need to spend more because things are more expensive, like on groceries. I've talked over so many years about how I'm always outraged at how my beloved cream cheese is just more and more expensive every time I go to the grocery store. Sean and his cream cheese. I know. But I'm adapting because I am such a committed Costco shopper now that I go and I get their Philadelphia cream cheese in this big tub that lasts me weeks and weeks.

27:57And I'm kind of scared as to why it lasts so long. I'm sure it's some preservatives. But anyway, it's way more economical to shop at a store like Costco. So that's how I'm adapting. And then in other ways, like I am pulling back on some travel. I wanted to go down and see some family in California, but the plan didn't come together quickly enough. And by the time I left the airfares, I just couldn't swing it financially. So that's a sacrifice that I'm making just because I need to keep my budget intact. How are you handling all the changes over the past few months? Because I feel like just since this year started, prices have gone even more bananas than they already were.

28:30Elizabeth Ayoola:I feel like you've been in my head, Sean. Why am I so soppy lately? This makes me a little emotional because I've been really hard on myself lately with my budget, forgetting that the cost of living has gone up. And it's interesting because on Reddit, I came across a post that said everyone should get a Costco membership. And I am not a fan of Costco because I just find it overwhelming. But I said to myself, you are buying the same things, a lot of the same things every week. you might as well go and get them in bulk. And actually, my boyfriend added me to his Costco membership. Long story short, what you just said is a sign, Sean.

29:01Elizabeth Ayoola:I need to take my tail over to Costco and go and start shopping over there to cut costs there. And same with travel. As much as I really want to go to Florida this year, I'm asking myself, do I need to go? Will it kill me if I don't go one year and I can use that money instead to continue bulking up my emergency savings fund? But in some ways, it feels like psychologically like I'm failing or I'm doing bad with my budgeting when I'm not remembering, hey, I'm not in this alone. And actually, the cost of living is going up. Yeah. And we've seen that the real average wages dipped 0.3 % annually. So we're now earning less as things are getting more expensive.

29:37And I think we're all feeling the squeeze in some way. I mean, I don't even drive that much. And I spent$75 filling up my car last week. And I'm just getting around town. I don't even have a commute. So I really feel for those who are commuting. But Elizabeth, my Costco hack, because I also can find it really overstimulating. It's like the worst kind of Disneyland ride, but you're all just crammed in together there. Go right when they open or go maybe like a Friday evening at 6 p.m. before you go out for the night or something because people aren't often there at that time. From what I hear from a friend who does this, the hour before closing is often deserted.

30:14So check that out.

30:15Elizabeth Ayoola:Yes, I think those two things would help me. And the third hack, don't take your kid with you. Yeah. Although it sounds kind of fun because then they get all the samples, but then they want to grab everything else off the shelf too, I imagine. Yes. No, we don't want none of that. I'll bring the samples home. But yeah. So to be honest, I'm doing the same things as you in terms of budget restructuring, just not buying non-essentials right now. You will be shocked to know that I've not been scouring the internet for new clothes lately. Proud of you. And yeah, just thank you. Thank you. And just, yeah, maybe cutting low on travel this year.

30:45Elizabeth Ayoola:There's always next year as long as I'm healthy and still here. And just save the difference, right? That way you can have that vacation fully funded. Yeah. Okay. Well, let's get to the next post. This is from the FIRE subreddit. That's Financial Independence Retire Early. And the topic is dating after FIRE. Hi, folks. I'm mentally preparing myself to chubby FIRE next year as a 51-year-old divorced guy. I'm trying to figure out what my dating life might look like. My guess is that everyone will still be working and probably not have retirement on the near horizon. I'm predicting awkward conversations around careers and work.

31:18Has anyone else here retired as a single person and had dating experiences? How did it go? Any tips? Any experiences you'd like to share? Thanks. Okay, this is classic Reddit because no one on Reddit who spends a lot of time there knows how to date. I'm sorry. I really respect and admire the savings that this poster has put into retiring at 51. But I think a lot of people on the internet simply spend too much time on the internet. And you can just get out into the world and realize, hey, I'm just a guy who happened to achieve something amazing with my finances. And I don't think people are going to be as awkward or weird about it as he's probably thinking.

31:54Elizabeth Ayoola:So it sounds like projection is what I'm hearing, Sean. Maybe, yeah, just a little bit of self-consciousness. And just I think that they need to go out into the real world and talk with people. They might have to do a lot of that. We're hiring early anyways. Might as well get started now. We've talked about fire a lot on this podcast, but I hadn't really heard about chubby fire that much. I think it's a pretty funny term. Can you explain what that means for folks who don't know Elizabeth? I can. And then some people may not be familiar with all the types of fire anyway. So just very quickly, I'm going to run through them.

32:22Elizabeth Ayoola:You are the fire queen. I am the fire queen. And that's why I like this post. But anyway, some of the most popular ones are lean, fat, barista, and coast fire. Lean is for the minimalist who's like, I ain't got time to be spend all that money. I just want to live on a little. Fat is for the big money spenders who want to live luxurious in retirement. That would be me. Of course it would be. Barista is for people who are not ready to fully retire and want to semi-retire, but they don't want that stressful job anymore. And then we have Coast Fire for people who actually don't plan to retire early, but want to stop saving for retirement early and enjoy their money.

32:57Elizabeth Ayoola:Now, where does Chubby Fire fit into all of this? It's less talked about, like you said. I barely heard of it before either. It's like the cousin of lean fire and fat fire. That's where chubby fire comes in the middle. So it's for people who don't want to be extremely frugal, but who also don't want to be overly luxurious. So what do you think about their dating prospects? I love that this is their main concern is they've been saving for so long, so diligently to be able to retire early on what they've tucked away. And their dating life is their concern. I think to me, it kind of speaks to how your life shifts so fundamentally sometimes after retirement.

33:31You have all this free time. You're not tied to a workplace, which is where a lot of people meet spouses. And you're just out there and you have to create your own life.

33:40Elizabeth Ayoola:Yeah, you're just out there in the wilderness. And actually, it reminds me of a post that I read years ago about someone. No, it was about several people who did fire and retired early. And one person in particular stood out to me because they had retired early. And the main thing that they reported in that piece is feeling lonely because all of their peers were still working. And they had done all the things. They traveled. They picked up hobbies. They did all the things they thought they would want to do in retirement. And they were missing that social connection. You want to know what they did?

34:10Started volunteering at a community center or something?

34:12Elizabeth Ayoola:They went back to work. No! They went back to, yes. Oh, that breaks my heart a little bit. I'm glad they found their community again, but there are other ways to do it, right? There are, but they went to your job. They are, yeah. So anyway, this reminds me of that. So it sounds like the poster is afraid of loneliness. That's one. And two, yeah, like what if you meet a partner when you retire early who is still working? What do you do with your free time? And I don't know about you, Sean, but when I envision retirement and partnership, I envision retiring with my partner. And yes, doing my own thing, but also doing things together versus, you know, me being doing my own thing and then going to work every day.

34:50Elizabeth Ayoola:So anyway, my bigger question for you, inspired by this post, is how do you envision retirement? Do you want it to stack up with Garrett? it? Yeah, 100%. I imagine, I hope that we'll retire somewhat early and then we'll be able to travel and tend to our garden and just hang out and do things around town together. That's what I'm currently envisioning for retirement. But if one of us has to retire earlier than the other, that's a fact of life. And I think there are other ways that we can find fulfillment. Like I go to a local dog park in my neighborhood a lot and I see the same group of people meeting up at the same time every single day.

35:23Some of them are retired, some of them are working, They're a huge range of ages. And they've found a habit that they share together every single day. And I think that's how you can build connection and community when you're not working or even when you are. Just get out there and meet people.

35:39Elizabeth Ayoola:So it sounds like maybe the Reddit poster just needs to find a day job of socializing and doing things that bring them joy, assuming they find a partner who's still working. And then, you know, after work, I guess him and the partner or them and their partner can hang out, right? Yeah. And in the meantime, get off the internet and meet people in the real world. You'll realize it's not so scary. But I do think people assume, oh, if I have all this money, then dating will come easy. And that's not the case. Moving on to post number four, and it's from the Ask Reddit subreddit. Ex-millionaires of Reddit.

36:09Elizabeth Ayoola:What made you lose all your money? Now, I like to this one personally, Sean, because I'm not a millionaire and I love to know what millionaires are doing with their money. And even more, I want to know how millionaires are losing all their money. Yeah, this was a great one to dig through all of the comments, which is part of why I just love Reddit is people sharing their stories. And, you know, part of me always wonders how much of any of these stories is actually real. But there were some wild stories about people gambling their money away or just making bad business decisions. One that really stood out to me was this person's father, who was pretty successful in businesses.

36:47He had, I think, three different businesses that were each worth a million dollars each. And they ended up going bankrupt because he wasn't able to delegate responsibility and management of these companies. So you can have the best work ethic in the world and you can be a really savvy business person. But if you don't have the right system in place to manage these businesses long term, it can all just fall away, which is kind of tragic.

37:09Elizabeth Ayoola:It is tragic. And once upon a time, I used to be trying to be actually that's not true because I kind of am a business owner technically, but I used to want to have employees. Let me put it that way. And I was in many groups of other aspiring entrepreneurs and the amount of people that struggle with delegating was very shocking. And not only like this poster said, could it lead to you losing money, but it also can lead to burnout when you don't know how to delegate. Yeah, I get it, though. When you create something from scratch, you know it better than anyone and you want it to be successful. And so bringing other people, they're going to do things a different way.

37:42They might have different ideas. It can lead to conflict and some things might slip through the cracks. But also to sustain a project like a business that's worth a million dollars, you need more than one person to do it.

37:54Elizabeth Ayoola:Absolutely. And I come across this comment, Sean, which makes me think all these things are interconnected. Now it says, I work in finance and my team and I work with all very affluent clients. I've seen so many millionaires lose it all, not from investing in the markets, but from taxes, lifestyle and poor business decisions. Once had a client who was making$50 ,000 a month but was spending$60 ,000 a month and perpetually dipping into his investments. They were months where payments bounced because he was living a lifestyle and always wanted more. My favorite investment advice. Same car, same house, same spouse.

38:31Elizabeth Ayoola:I like that. Catchy. The same spouse can crack me up. Yeah. Can you imagine spending$60 ,000 a month? What are you spending that money on? It's bananas. I can't. But what did we say earlier? It's insatiable. Like there's always something to spend money on. So you got to rein your own self in, right? We all need to find out what is enough for each of us. And then anything beyond that, donate it, save it, invest it wisely. Don't keep buying random crap just to make yourself feel good in the short term because it's not going to work. You're going to end up broke, as we all learned. And I don't know how I would feel if I was once a millionaire and then I'm just like, wow, wonder what all that money I had went, you know, I feel really bad.

39:11Yeah, I would feel horrible. I would feel maybe like a failure and I don't want to feel that way. So if and when I become a millionaire, I'm going to do my best to hold on to it and not spend it frivolously.

39:21Elizabeth Ayoola:If I know that nobody's going to overspend when they become a millionaire, it's you, Sean. Thank you. Well, the thing is that I do like to spend my money, but I also like to save. So I try to find the balance. Always in balance. That's my goal. OK, let's get to our final post. This is from the Money Diaries subreddit, which actually I just learned about. Elizabeth, thank you for sharing this subreddit with me because I'm always about people's money diaries. The title is How to Get Out of Money Comparison. I realized recently that one of my acquaintances has probably$20 to$50 million in equity from joining an AI startup early.

39:54Wow. I don't know why, but it's been making me feel so bad about myself. It feels like my accomplishments financially and career-wise mean so little comparatively, and the things I've been excited about for the future still won't even measure up. Like, say I save$5 million, it will still be nothing in comparison. How do I get over this? I know objectively other people's wealth has no impact on my life, but it is triggering all sorts of things for me emotionally, like wanting to be the best in the class, but someone else already got an A++++. Does anyone else feel like they fall into money comparison?

40:26If so, how have you gotten past it?

40:28Elizabeth Ayoola:Oh, that last line made me feel so sad for the Reddit poster. I don't know about you, But I definitely have and maybe sometimes do fall into money comparison. I think in finances and with other things, because we're social beings, we always comparing ourselves to other people to determine how we're doing or where we rank, because that's just what we do as humans. I do know something that helps me significantly. It's just looking at how far I've come from, looking at my own personal journey and not anybody else's makes me feel one proud of myself. so it doesn't feel like, oh, well, I only have 50 ,000 and someone else has 100 ,000.

41:06Elizabeth Ayoola:And it also makes me see that I have all the tools that I need to keep going further. So I don't need to compare myself to anyone else. I love that. Yeah, I mean, the saying is that comparison is the thief of joy, and it is. I mean, appreciate what you have. There's always going to be someone who has more money or who has less money. But I really like what you pointed out about comparing where you are to where you were in the past. Because even if you maybe aren't as rich, maybe you're one of those people who was a millionaire and isn't anymore. I'm sure you learned some valuable lessons along the way, and you can take that moving forward because that's all you can do is focus on your own finances.

41:40Don't be too worried about whatever else anyone else is going on because that person who has 20 or 50 million in stock, they may not have the same sort of non-financial wealth and fulfillment in terms of their community, their loved ones, their hobbies, their passions. You don't know what's going on with them really, and just a dollar figure isn't a great thing to base your self-worth off.

41:58Elizabeth Ayoola:Love that. The last part of what you said, I think is key. Your value as a person is not tied to how much money you have. And I think that can be a hard thing for people to believe because we live in a society that tells us that we are as valuable as the car that we drive or the house that we have, or basically the material things that we own, right? So I think it's more about your self-worth and your self-work that you need to do in order to feel valuable as a person, independent of your job, your money, and any other thing you own. Yeah. And one of the top comments in this post really stood out to me.

42:30They said, I say this with gentleness, but as someone who has lived in Silicon Valley and does not work in tech, like millions of other people in this region, please expand your social circle to include people who are not in tech. I feel like part of the issue here is thinking that having 50 million in equity in an AI company is a normal thing to happen and not an outrageous and rare flash of luck. I'd also like to keep in mind equity is basically worthless 90 plus percent of the time. I'm sure someone had$50 million in equity from Enron in 2000. Not worth much anymore.

43:01Elizabeth Ayoola:And again, which is why you shouldn't compare because we also don't also have the same, we don't start from the same place and we don't finish in the same place, right? We all have different opportunities, different access to different resources. So it's just not a good way to measure yourself or your self-worth. I see a comment here that says, I know someone with an even higher net worth than you're describing who is suffering from incurable blood cancer and is dying. The key is to have gratitude for what you have, even if it's just your health. If that's not going to remind you to just be grateful for where you are, I don't know what is.

43:37Yeah. I mean, health is wealth, right? So if you can focus on that and appreciate what you have, I think that will make you grateful for what you do have, even if it's not 20 to$50 million.

43:45Elizabeth Ayoola:dollars all right are we at the end of our reddit journey today sean maybe for this podcast recording but i will be scrolling on reddit later today are you going to be in the money diaries make sure you text me yes i need to follow that immediately thank you okay well i think that's all we have for this episode remember that we are here to answer your money questions and lurk on your reddit posts so turn to the nerds and call it or text us on the nerd hotline at 901-730-6373 It's 901-730-NERD. You can also email us at podcast at nerdwallet.com or drop us a comment on Spotify or YouTube. And while we love to yap, we want to hear your thoughts and your opinions too.

44:24Elizabeth Ayoola:So if you have any thoughts on any of the Reddit posts that we read today, please leave us a comment on this episode on Spotify or on YouTube because we're over there as well. Or you can just email us if you don't want to do all the social media stuff. In the meantime, join us next time to hear about what to do when your teen receives a windfall. Follow Smart Money on your favorite podcast app. That's Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

45:01Elizabeth Ayoola:This episode was produced by Tess Vigeland. Hillary Georgie helped with editing. Eve Krogman edits our audio and our video. And a big thank you to NerdWallet's editors for their help. And with that said, until next time, turn to the nerds.

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