EPISODE 34: Being Logical About Your Money: Balancing Dreams and Reality

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THE LOWDOWN

In this episode, I share my personal experience with managing finances, including the perks of summer Fridays at my company, enjoying time off, and the challenges of financial planning.

I discuss the importance of having a logical mindset when it comes to money, despite the common adult frustrations like paying bills. I cover the need to have a clear understanding of your income and expenses, making informed decisions about significant investments like buying a house, and setting realistic financial goals. I also share personal stories about financial mistakes and the importance of having contingency plans.

The main takeaway is to dream big, but approach your finances with a logical and actionable plan to achieve your goals successfully.

MENTIONED IN SHOW:

Website: www.lovealwaysjess.com/getstarted

Instagram: https://www.instagram.com/love.always.jess

SHOW NOTES:

Episode begins at [00:00:54]

TRANSCRIPT:

[00:00:00] Hey, I hope that your week is off to a good start. I am [00:01:00] sitting here on Friday enjoying my, one of my last summer Fridays. It's something that my company does where between, I think it's Memorial Day and Labor Day, they give us half Fridays, which is Very, very nice. But being in finance, I don't always get to take advantage of it.

And so today I told myself we are logging off at noon and we're going to enjoy the afternoon. So I have been. watching Reality tv. I've been reading a book and I've just been Enjoying being lazy, which is very nice During the summer also earlier this week. I got to go hang out at the beach with some friends so It's just been a really, really lovely week.

I'm [00:02:00] happy. Not that I'm never not happy, but I'm just in a good mood this week. It's, it's been good. So I hope that as you're listening to this, whatever's happening in your life, I hope that there's some good coming from it. Today, we are going to talk about the mindset around money from a logical perspective.

And I know a lot of you are probably sitting here thinking, Oh, logic, it sucks. It's boring.

Why do we have to talk about it? Being logical when it comes to money, probably is not the most fun. Um, I know a lot of people don't like to be. I know oftentimes,

as I'm sure majority of you have the same mindset of being an adult sucks. I was listening to the radio today and. They were doing, like, a challenge between two people [00:03:00] where they ask you a question and you're supposed to figure out what the top five responses of that question was. And one of the questions was, what do adults hate the most?

I'm sure it was worded differently. And the number one thing on that quiz or questionnaire was paying bills. And obviously paying bills comes from money. So it was one of those things where it made me chuckle a little, but we all feel it. We all feel the dread and the boring aspects of being an adult. We don't like to make decisions.

We don't like that we have to pay for things, buy groceries, pay for mortgages or rent, pay for cars, pay for insurance. We don't like that we get taxed up the wazoo in the United States. And it really is not [00:04:00] a fun part about being an adult. We love getting a paycheck. We love being able to spend our money on things that we enjoy, like vacations, or going out to dinner with friends.

Or a book or the gym class or whatever it is. But when it comes to our bills and when it comes to the things that we have to spend our money on to realistically stay alive and survive and also thrive, it's. It's not fun, and it's hard, and it's a pain in the ass. We all know this. I feel the same way. And so it just made me chuckle that, as I was listening to the radio today, that that was one of the questions, and that was the number one most annoying thing about being an adult, is paying bills.

I think , number two was waking up early. So I thought that was interesting. Now, obviously, since that [00:05:00] is the most annoying part about being an adult, we have to look at paying bills with a logical perspective. I talked last week about dreaming about spending your money.

I talked about having a money mindset where you're open and you're Dreaming and changing your mind and shifting it to have these big goals and to look forward to a future where amazing things are happening with her money. And then I talked the week before about not forgetting her money. That we oftentimes will create ceilings for ourselves and we'll tell ourselves that there's a limit and that we can't surpass it.

And all of that is great and all of that is wonderful to keep in the back of our mind. But in order to be able to break those ceilings and in order to be able to achieve [00:06:00] those goals that we're dreaming of when it comes to our finances, we have to have an Action plan. We have to sit down and logically think about what we can realistically do with our money.

And again, I know for most people, this is not the fun part being a finance person, being somebody who loves to work with money, this is fun for me. But I totally 100 percent understand if you're sitting here and listening to this intro of this episode and you're like, well, we're going to skip that because this is about to be boring.

This is about to make me cringe. This is about to make me not want to look at my money. I 100 percent understand where your brain is at. But one of the things I want to ask you before you either skip this episode completely, or before you pause and contemplate what it is that you want out of [00:07:00] life. Let's think about

when in your past have you encountered an instance with your money. That you were not happy with your money.

Thinking back to that time, did you have any of those ceilings or any of those limitations in place? And did you have any big dreams for where you actually want it to be? And I'm sure if you're like most people, the answer is yes, because just like every single human on earth, we're all constantly changing and growing and becoming better versions of ourselves.

And in order for that to happen, we clearly have to surpass where we're at.

Now, thinking back to that time, what was it that helped you get to where you are now? Or helped you achieve maybe that goal you had back then. And maybe you can't think of anything [00:08:00] related to money, but maybe there's something else. Like maybe when it comes to working out, or eating healthier, or planning a trip, what types of things Made that dream or made that thing possible?

Was it the constant just like and drive for, I can't wait for this thing to happen, or did it require you to stop and think about the path from A to B in a logical perspective? I'm willing to bet even if you don't remember doing it. It was taking a pause and logically thinking about each of the steps in the process.

Because at the end of the day, if we're just wandering around willy nilly, and we have no path in mind and no logical, like, sequence and order of how to get from point A to point B, we're not going to get there. We might get there. But it's going to take a [00:09:00] lot longer. And I think we've heard of that quite often that sometimes we will get to an end result.

We will get to an end destination. And depending upon the path that we took, it could take longer or shorter.

You know, I think we see those memes all the time on Instagram or TikTok or wherever you're on social media, where it talks about, if you start today, you'd be closer to your goal. Then if you started a week from now, two weeks from now, or if you kept telling yourself tomorrow, tomorrow, I'll start. I do that quite often.

And it sucks. I can't tell you how many times I've said we're going to start today, and then today happens, and it doesn't happen. I don't start whatever I want to start, and then I don't get where I want to get.

And sometimes I don't like that, but realistically, it's the decision I made, it's the choice I made, and I have to live with it. And if I really set my mind to it, I will make what I [00:10:00] want happen. When I'm ready.

So what does it mean to be logical when it comes to our finances? First and foremost, it means actually knowing what your income and your expenses are. And I talk about this In previous episodes about how to organize things and how to budget for things, but realistically at the end of the day, you need to know what is coming into your bank account and what is going out.

Because without understanding, Those parts of your money, you aren't going to be able to make a game plan for where you want to go. And I'm not just talking about your checking account or your savings account. I'm talking about all of your accounts. If you have student loans, if you have any other type of loans, credit cards, investment accounts.

Know everything. Understand everything.

Because, once [00:11:00] you wrap your head around that, you can be so clear on the picture of this is where I'm at. And we want clarity in our lives. We don't want any guessing games. We don't want to be sitting here thinking, hmm, do I have it all? Am I sure that's all I spend my money on? Because, clarity?

is extremely, extremely helpful.

We can't see the end game and we can't see the full picture without that clarity. So thinking about where I'm at, I've talked about it many times. I have a goal to buy a house. My goal was January 2025. I am in the middle of August of 2024. Realistically, where am I at? I have 15, 000 saved for a [00:12:00] down payment and I live in California.

Housing prices, if I want a decent house that isn't going to force me to do major upgrades, we're talking 700 to 1, 000, 000 price tag.

That's expensive. 15, 000 down payment isn't going to get me far. That's realistic. That's reality. That is 100 percent clarity on where I'm at. Could I make it happen? 100%. But also taking a look at what my income is. That would make my mortgage payment more than 30 percent of my income. That is not where I want to be sitting when it comes to my mortgage payment,

because at the end of the day, I still want to live. So when I look at the reality of things. I have to make [00:13:00] decisions.

I've mentioned on here that I've been having trouble with my upstairs neighbors. And so, I've been in the process of making some decisions. Do I buy a house early? Do I move apartment units? Or do I suck it up and stay longer? Now my lease is up in January of 2025.

Realistically at the end of the day, I'm not ready to buy a house. So I don't want to put myself in a situation of desperation or having to make things work. I want to feel secure and solid in the decision that I make when buying a house. I also personally. I don't want to move. I love the apartment unit that I have,

and the idea of packing everything up for a short term stay, like a year, doesn't sound appealing to me. So,

I made the decision [00:14:00] that I'm going to stay. Now, from there, I have three choices. Do I just stay through the end of my lease and buy a house in December so that I can move out in January? Do I talk to management about extending my lease for six months at the same rate? Um, because I've been fighting with the upstairs unit neighbor issue for six months, or do I see what other options they have to offer?

I went and talked to management this week. And I asked them if they would be willing to extend my lease for six months, rate unchanged. And they said, we'd be willing to do that, but we had to talk to our boss. And more than likely they were going to counter offer with extending an additional 12 months, which would put me to January of 2026.

And they said an additional 12 months, [00:15:00] rate unchanged. Ideally. That would be awesome because that would give me more time to save up for a down payment and It would just give me more time. It would align with my partner's, , lease end. So there are positives to the potential of extending 12X from up.

One of the drawbacks, actually two drawbacks, would be that it'd be good to buy a house during the summer because that's when a lot of people end up moving due to school, being out and stuff. And two, I'd have to deal with the neighbors. They've gotten about 85 percent better, so I don't want to complain too much.

But, is it something I can deal with for another 17 months or so? If I extend for 12 months. I have not heard back from management yet. I'm assuming they're still having their conversations, figuring things out. But, logically, that's where I'm at. I am not ready to buy a house. And again, I said I could make it work.

I could figure it out. [00:16:00] And I think we've all been in that situation with our money where we're like, we can figure it out. But you know what sucks about being in that situation? Is the actual figuring it out part. Because it causes stress. And it causes uncertainty and fear sometimes about whether or not we're going to make it.

Whether or not we've made the right decision. And I don't want to be in that position. I don't want to put myself into a situation where I'm stressing, where I'm wondering if I'm going to make it, where I'm wondering if I'm going to be able to enjoy life still, go on trips, go out with friends, you know, that type of stuff.

I don't want to be there. And so logically looking at my income and my other expenses and realizing that if I were to buy a house now, it would put my mortgage at a much higher position and percentage of my income than I [00:17:00] realistically want it to be. I understand that for some of us, we don't have the options to be able to stay put or to be able to We don't have the space and the opportunity to make these decisions, and we are thrust into having to figure it out.

And in those moments, yes, you're going to be stressed. Yes, you're going to have to find some way to make it happen. But being able to have the logical mindset of, this is how we're going to make it happen, a thousand percent makes it easier to deal with. It doesn't make it fun, and it doesn't make it go away, and it doesn't make it the best scenario for us, but being able to sit down and be like, okay, my rent, my mortgage, my child's school or daycare, [00:18:00] or the medication that I need for my partner's Diabetes or whatever your situation might be, sitting down and actively looking at your finances and finding ways to make it work will ease that burden.

It might be tough, you might be scrounging for pennies every single month,

but at least when you go into the situation, you know at the back of your mind, That you can make it happen because if you

are trying to pay for something and you're not sure if all of your bills are paid and you're not sure exactly how much more money you're going to need for the month, that's going to scare you even more. That's going to cause fear inside because of the unknown, but if you can feel secure in walking into the daycare center and writing the check for your child's daycare for the month and saying, okay, I've [00:19:00] paid my rent, I've paid for my groceries, I've set money aside for gas for my car.

I've got enough money to pay for my child's daycare, and then at the end of the month when my car payment is due, I just need to come up with 300. I have two weeks to do that. Great. You've got a game plan in place. You know that you've paid for your child's daycare, you've paid for everything else and set money aside for everything else that you need for the month.

And the only thing you need to do is come up with 300 to pay for your car payment. So you get to work your butt off for the next two weeks to come up with that 300 and everything else is set. But if you walk into the month and you're like, oh, I'm just going to go pay the check and then the check bounces because you didn't realize that you overpaid on your groceries or that the car payment was actually due the first week of the month instead of the end of the month, and then your child can't go to daycare [00:20:00] because your check bounced, that would create so much more of a headache.

So logically we have to sit down and we have to say to ourselves, where am I at? What can I realistically afford? What can I realistically do? And what do I realistically have to do?

And having that game plan in place, it changes the whole entire scenario. Again, it doesn't make it perfect and it doesn't make it a hundred percent, but it makes it a little bit easier. It releases a little bit of that stress and that worry.

I've been there. Years ago, I was planning our 10 year high school reunion, and I collected all the money, and I was writing all the checks to all the vendors, and then I went to go pay, um, one of the organizers, and while I was writing all the checks to all the vendors, [00:21:00] I accidentally double paid one All of my bills for the month and it put me near close to the negative because I wasn't paying attention and I wasn't setting up a game plan in my head of what bills was I going to pay and when was I going to pay them.

So I paid all my bills the first day of the month and then I was writing checks to vendors and I was like, oh shit, I haven't paid my bills yet. I'm going to go pay my bills again. And I was near negative in my bank account and I had to tell one of the organizers, hey, can you please not cash my check for two weeks until I get my paycheck.

They so kindly didn't cash the check for two weeks. It was nice to have all my bills paid two months in a row because then the next month I didn't have to pay anything. But because I didn't have the game plan in place for what I was doing for the month, I screwed up and I almost had checks bouncing and I almost went into the negative [00:22:00] and I panicked.

And that's reality. We are human and we're gonna make mistakes and we're going to Overpay things or underpay things or checks are going to bounce, you know, I accidentally didn't pay my rent one month here at the apartment complex. It was on accident. They had emailed me and asked me to add an extra 15 or something to my check.

And I went online to the portal. Put in all the information, added the extra 15, and hit submit, but I didn't check the box. And then I closed out of everything. And I emailed them and I said, Hey, just sent in the payment. Extra 15 is added. Please confirm. A few days later, they emailed me and they're like, Hey, you didn't pay your rent this month.

And I was like, No, I did. And they were like, No, you didn't. And I checked my bank account. And I was like, Fuck. My rent did not leave my bank account. I didn't pay it and I emailed them back and I was like, hey, [00:23:00] can you not charge me a late fee because my email to you clearly told me and you that I actually thought I paid it and they were nice and because I had never defaulted, they foregoed or whatever, um, didn't charge me the 10 or the 100 late fee deposit, which I was thankful for, but things happen.

We're going to be late on things and taking that ownership helps taking accountability for the mistakes you made helps and voicing and laughing about it helps, but I've since implemented steps in my process when I go to pay my rent. That I make sure to check the box. I always check my email to make sure that I get the notification that my rent has been paid.

And the other thing I check my bank account within a few days after paying rent to make sure I see the money [00:24:00] leaving. And then if I don't see the money leaving, I call the office and I go, Hey, is there a delay? Like what's going on? Because I know I paid it. I have the notification. So setting up those logical steps in place to make sure that you aren't overpaying or that you are paying on time.

I think a lot of us especially in today's day and age, set up these online automatic withdrawals, which are great, but then we forget about them.

And sometimes

we forget to cancel a subscription, or sometimes we forget that we need to have money in our bank account in order for that thing to leave, and then we get a bouncing notification because we didn't have enough money in our bank account. Or something didn't get paid because we aren't checking every single month to make sure that the bills are actually leaving our bank account.

Because I don't know about you, [00:25:00] but technology can be our greatest friend, but it can also be our greatest headache and systems glitch. You might have it set up for automatic payment, but they could have an outage in the system the day that your automatic payment was supposed to go through and it doesn't get paid.

You never know and this is where having logical checks in place and having these money mindsets of let's be realistic, we can have these big audacious dreams and we can want to chase after these goals and we can want to break through the ceilings and the limits that we set for ourselves, but life also happens.

And life is always going to happen. You're always going to have something that distracts you, or you make a mistake, or a system glitches out. It's life, and we would [00:26:00] be dumb To sit here and blame everything else but our own personhood. Because yeah, you can have the perfect system set up. You can make sure everything is automatically withdrawn.

You can make sure that your paycheck from work gets split between bank accounts. You can make sure that you have everything automated, 100 percent fine tooth combed, but something is always going to happen and you're We're sometimes going to need to change something

and we have to embrace that.

It's fun to think about the big goals and it's fun to plan the vacations and it's fun for me to figure out the type of house that I want and the city that I want to live in. I get asked that all the time. Where do you want to go? What houses are you looking at? How much do you want to spend?

And to be honest, I don't have all the [00:27:00] answers. But the reason I don't have all the answers is because I've realistically looked at my finances and I've been like, you know what? I need a little bit more time. I am a thousand percent proud of myself for saving 15, 000 so far this year for a down payment.

I made strides. I saved money. I've done great things, but I also recognize that I'm nowhere near where I need to be and that's okay. Does it suck that I have to wait another six months to a year before I can get that house?

Yeah, because I want a house now. I'm itching to move. I'm itching to move to a house, not another apartment. But like I said, I don't want to rush into it. And I'm sure all these decisions that you have to make as an adult, all these bills that you have to pay, it sucks. But you also don't want to rush into a decision or set your finances up to fail,

because at the end of the [00:28:00] day, money is what makes the world go round. And we have to make sure that we're paying our bills on time, paying our taxes on time, and working towards the end game that we want. And none of that is going to happen. without steps in place to make it happen. You know, I was talking to my friend who I'm going to interview in a couple of weeks for this podcast episode or this podcast.

Sorry. She's a realtor. And I was like, Oh, I'm going to go look at this house this weekend. And she was like, okay, can I give you some advice? And I was like, sure. And she goes, okay. So there are other expenses that go in besides the down payment. And. Have you talked to a lender? Do you know what you're approved for?

Do you know where you can be? And I was like, uh, no, but um, you know, like I've gone on Zillow and figured out the calculation and this is what it says my mortgage would likely be and I could afford [00:29:00] that. And then she was like, so most lenders have caps on how much of your income, debt to income ratio, they will approve you for it.

And I was like, okay, cool. Um, So realistically, I'm not ready because I had those conversations. And again, I could make it work. I could figure it out. But. It made me realize like I was focused on the dream. I was focused on get a house, move out, get away from the neighbors, achieve that dream, get after it.

I was focused on all of that. The fun, the energy, you know, the goodiness that happens in your system when you're talking about the dream. I was so focused on that and I was giddy and I was like, I'm going to go look at this house. It's pretty, you know, it's, within my budget, all that kind of stuff. She had to like, be like, Hey, cool.

Let's have a [00:30:00] conversation. And I appreciate her for that because you brought me back to reality. And she said, here's the logical. Like answer. Are you ready? And if you're not that's fine. You can still go look at the house But oftentimes what happens is people go look at a house They fall madly in love with it and they're like I'm just gonna do what I need to do to make it happen And they end up hurting themselves in the future.

I mean, we might talk about it when we do the recording, but I know that she's had clients and we see this all the time on like TV shows that are real estate related where it's like my budget is 1, 500 and then they go into something and they're like, I'm madly in love with this, but it's an 1, 800 a month.

So it's 300 more a month. Okay. I love it. We're going to make it work. We're going to figure it out.

You know, I remember back, um, I forget how many years ago, but there was a new development in the city that I [00:31:00] lived in with my parents. And all of a sudden, all these homes, five to seven years after the development opened were being foreclosed on. And it was because everyone had their sights set on brand new homes, feasible mortgage, like it's possible.

But what was baked into the contract were these balloon payments that were due. And everybody was like, Oh, it's five years from now. It's seven years from now. I, of course, I'm going to sit down and spend the money or sorry, not spend, save the money to be able to afford that balloon payment. So we're good.

We can do it. And then when it came time for the balloon payment to be due, they hadn't set themselves up for success. And so then they lost their homes because they were focused on the dream. I have this dream to own this big house. That's brand new in this nice community.

And I have five to seven years to [00:32:00] find the money, but because they didn't have the steps in place to make sure that they were saving and putting away for the balloon payment, the balloon payment came due, they didn't have the money, and they had to leave their house. And it sucked. So lessons are learned, sometimes the hard way.

And when it comes to money, it really sucks to learn the the hard way.

So dream big. Crash. Crush, not crash. Crush those limits. Crush those ceilings. Break through. Chase after your goals. Chase after your dreams. But make sure you're also bringing yourself back down to earth and figuring out how to do it in a feasible, doable, realistic. I want you to get out there and I want you to achieve everything you set your mind to.

Because I believe it's possible. I believe we can all do it. We just have to be logical. We get to break through [00:33:00] ceilings. We get to dream big and we had to do all of it logically. And those three things together are going to make you successful in whatever you want to do financially and more than likely, In other areas of your life too.

So get after it, sit down today, come up with the game plan. What is it that you're dreaming of? Stop just dreaming about it and make it happen. You've got this a thousand percent. You do get after it. I love you all. Have a good day. [00:34:00]