Afford Anything - How to Combat Lifestyle Inflation, with Julia Kelly

Episode Date: November 21, 2016

#52: Imagine transitioning from making $8.50 per hour and sharing a crammed apartment with 5 people, to becoming a six-figure business owner doing what you love.   That's the journey that Julia Kelly, caricature artist and founder of JK Expressions, took.   Sounds great, right?   Well, as they say, more money = more problems.   When Julia earned $25,000 - $30,000 per year, she had fantastic money management skills. She had no debt and plenty of savings.   But when her business started making six figures, she began ignoring her finances, stopped saving money .... and racked up thousands in personal credit card debt.   Why?   Some of us write this off as life getting more expensive as we get older, but it's actually a classic case of lifestyle inflation -- when you make more, you spend more.   After Julia began earning six figures, she decided she was no longer happy with $12 haircuts from Supercuts. She happily splurged for $75 salon style cuts instead.   She started paying for convenience. One-click Amazon order? Check. Ordering an Uber or Lyft so she didn't have to deal with parking at the airport? Check. Eating out? Check.   She became lazy about saving money, assuming that she could always earn more. Money was coming into her bank accounts at an unprecedented pace – so her finances would take care of themselves, right?   Wrong.   As Julia discovered, when you "upgrade" certain aspects of your life, you may find it difficult to downgrade. You keep spending more and more, trapped on a consumer treadmill. You’re forced to work to fuel your spending addiction.   Left unchecked, this saps every ounce of freedom from your life.    Ouch.   In this episode, you'll learn: · Why you shouldn't take lifestyle inflation lightly · How to stop lifestyle inflation before it happens · What Julia regrets buying … and what she doesn’t · The easiest, most effective antidote to lifestyle inflation · How Julia differentiates between saving time vs. wasteful convenience spending · What Julia's advice is to those who are increasing their income, but don't want to succumb to lifestyle inflation -- Paula   Resources Mentioned:     •    Gretchen Rubin's episode, The Power of Habit Formation     •    Julia's story on the Afford Anything blog
     •    Cal Newport's episode, The Incredible Value of Deep Work, Instead of Distraction     •    Julia's site, JKExpressions.com __________________________ I also want to take a moment to thank the sponsors for this episode. First, huge thanks to Nerdwallet. Their new app lets you have one-on-one conversations with financial advisors. You can chat about anything related to money, such as retirement, investing, insurance, or paying off debt. You'll get personalized, one-on-one advice -- available at no cost to you. Check it out at no cost to you by visiting nerd.me/paula. _________________________ If you've been listening for a while, you've heard me interview many best-selling authors. Before I interview these guests, I need to read or refresh my memory of their books. Sitting down to physically read the books can take a long time. That's why I listen to their audiobooks, thanks to my subscription to an audiobook service called Audible. If you want to give them a try for free, head to audible.com/trynow for a free 30-day trial. _________________________ For a full list of show notes, visit http://podcast.affordanything.com/52-how-to-combat-lifestyle-inflation-with-julia-kelly Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. How you spend your most limited assets, money, time, focus, energy, attention. The decisions you make about those will impact the course of your life. So how do you make better decisions in order to create a better life? I'm Paula Pant, host of the Afford Anything podcast, where we tackle these issues. And on today's show, I invited Julia Kelly to discuss a problem that a lot of entrepreneurs and hustlers face. Lifestyle inflation. For those of you who aren't familiar with the concept, lifestyle inflation is the notion that as you make more, you spend more. And this is a problem because sometimes

it means that even though you're making more, your net worth isn't going up, you're not investing more, you're not saving more, you're no closer to financial independence, despite the fact that you're making more now than you were five or six years ago. Today's guest, Julia Kelly, unfortunately, can tell that story firsthand. About five or six years ago, Julia used to earn a total of around $25,000 to $30,000 a year. And at that time, she was a diligent saver. She was careful with her money. She always had savings.

She had zero debt. She was contributing to retirement accounts. She was living a well-managed life on between $25,000 to $30,000 per year. Today, Julia runs a six-figure business. And as she is about to tell us, when that happened, she became so lax about her money and she allowed lifestyle inflation to creep in so much that she ended up in credit card debt. So think about that for a second. $25,000 a year and you're saving money versus more than $100,000 a year and you're in credit card debt. This is the same person, same lifestyle, same family circumstances, nothing external about.

her life changed other than the amount of money that she was making and subsequently the mentality around money that followed. So in today's episode, Julia shares her story of how she succumbed to lifestyle inflation and how she was able to pull herself back out of it. Without further delay, here's Julia on how to combat lifestyle inflation. Julia, you were making $8.50 an hour. It was a dark time. All right, take us back to that. You're 21 years old.

Tell us about your life at that point. Basically, as soon as I got out of high school, I had a job as a graphic designer with a small nonprofit. And then when I was 21, I decided I wanted to go to college. So I switched to a part-time job with the nonprofit. So I was working with them three days a week and then going to school two days a week and everything was great. But I had always wanted ever since I was a little kid to be a caricature artist. That was like my dream, what I wanted to do when I grew up. And I wasn't aware that you could actually make a career out of it.

And if you work in an amusement park, it's very hard to do that because of the aforementioned 850 an hour. So during the summertime, I just thought, you know what, I'm just going to give it a shot. I'm going to apply. I'm going to see, you know, what happens. And so I sent in an application. They got back to me a couple weeks later. and I did my test interview and the drawing came out absolutely horrendous because I didn't know how to draw caricatures at the time. But during the summer months, their standards get really low because they need to

hire just a whole bunch of basically warm bodies to sit in the chairs and draw people. So, yeah, so I got my job at the amusement park doing caricatures for 8.15 hours. So I looked at it as just kind of like a paid education. I wasn't really in it for the money. I was. just doing it because I like to do it. But yeah, it is kind of a bummer to work for, you know, two weeks and get like $200 in your paycheck. Wow. So you were not a baller. Not a baller. I lived in a 1500 square foot apartment, three bedrooms with five people living in it. But I mean, it was cheap as hell. My rent was like $250 a month. So $250 a month? Yeah, because we're splitting rent Five ways.

Yeah. Yeah. How else did you save money during that time, actually? I don't want to divert too far into that, but I'm curious. You know what's crazy is like in that situation, I feel like I saved so much more money than I save now. And I'm actually quite ashamed of myself. Like when I look back on the amount of money, I was able to save, like I was maxing out

my retirement accounts. I was like saving money for investing and all this, saving money for school and all this stuff. And I'm like, how the hell did I do it? I mean, I guess the reason is I was living completely dirt cheap and my rent was $250 a month and I was sharing a room with my best friend in this like, I don't know, 10 by 10 foot room and it wasn't the great living situation, but it was really cheap. But yeah, I don't know. I just feel like I was able to save so much more back then.

Life just gets expensive as you get older, it seems. Does life get expensive or do our standards just rise? Oh, absolutely. When I say life gets expensive, what I mean is I've gotten spoiled. So what's tricky about the whole, like, as you make more money, you start to spend more of it is it's very hard for me at least for if I raise my standards in one area, it's very hard to go back to a lower standard. So for instance, haircuts. Like I used to get my haircut at supercuts and for like 12 bucks. And then I had my first like $75 haircut.

and it was amazing. And now, every time I get my haircut, I have to get the $75 haircut because I know how great it is. And I can never go back. So I'm very cognizant of lifestyle inflation. And I really try not to upgrade things in my life unless it's the right time. Because I know, like, once I upgrade, just the way my mind works is this going to be really hard for me to go back to the cheaper, more economical option. So like, for instance, I had, you know, the,

option this year to live alone and not have a roommate. And I was thinking about it for a while. And then I thought, you know what? Once I live alone and I don't have a roommate, I don't think I'll ever be able to go back to having a roommate because you'll get so used to it, your space, and then it'll become so important to you to live alone and everything else. So I really thought about it. But then I was like, yeah, it would be nice. It would be cool to live alone. But is it $9,000 a year worth it to live alone, and then I can never go back to having a roommate or I'll feel like I'm taking a step backwards. So I still have a roommate. Nice. Yeah. I went through exactly that same thought process. I had a roommate. I had roommates

until I was 31, almost 32. I had roommates until I was almost 32. And I was, I don't think I've ever even said this publicly. I had it, at that point, I was making six figures and I had a net worth that was over a million. And I had roommates. It was just, there's just those frugal habits that, you know, I developed. I, just like you said, I don't take lifestyle inflation lightly. Yeah. Yeah. And, you know, I actually need to do better on it because it's so easy to spend money these days because you have one-click Amazon ordering and, you know, you just call a car on Uber and it doesn't feel like money is leaving your wallet and like all those things just add up. And then all of a sudden you're way over budget. So yeah, it's like a constant struggle to try to like stay frugal.

You know, we actually just went on an Amazon fast. Really? Yeah, we were having an Amazon spending problem because I initially started buying things on Amazon because it's a time saver. Yep. It's much more efficient to buy a product on Amazon than it is to get in your car or on your bicycle and drive or bike to target, but especially if you only need one or two items. Yep. And They're items that you can't wait for. You know, like toothpaste, you have to have it. So initially that was why we started buying things from Amazon, but then it just became like... It's a total money hog.

Exactly, because it makes it so easy to spend. Mm-hmm. Yeah, we realized we were getting a little out of control with it, and so we decided to fast from it for a month just to reset the clock. So how's that going? Like, do you miss it? Is it hard? It is. You know, it's funny because now that I don't think about buying things on Amazon, I find that there's not actually a whole lot of stuff that I quote unquote need. Target, again, being a good example. Like, there are a couple of staples that I'm going to have to go there for, but they're not that urgent. And, you know, the hour that I spend going there will be a cost-effective hour given how much money I'm saving by not buying things.

things on Amazon. Yeah, it can turn into a very bad habit. I'm just going to fast forward your story and to the listeners who are interested in reading your story. It's available at afford anything.com and we're going to link to it in the show notes. But now you make six figures. And so tell me about your spending habits now. You know, they've been all over the place. So I used to be like super all about the budget and very much, you know, like I didn't go over and I would recalculate it like sometimes every day or like once a week and just always make sure that I was on track and everything else. And then as you make more money and you have more disposable income, at least in my case, like I did get pretty sloppy for a while. You know, just spending money on. So what I tend to

spend the most money on is convenience. Like for instance, if I'm going to a movie theater and I don't want to have to look for parking. I'll just take an Uber, which is like not a super smart thing to do in the long term and a lot because it tends to eat away at your budget. And it's just all these little things they add up. And then, you know, oh, I see something on Amazon that I like one click ordering and everything else.

Yeah, so mostly just things of convenience is what I tend to waste money on. So I'm trying to curb that at this time. What do you mostly eat these days? So back then you were eating mostly popcorn and vegetables. Yes. What does your food intake look like today? It's, okay, so I just got a new roommate, and she moved everything in, and she looks in my fridge, and she goes, where's your food? And I said, I don't know, it's nowhere. Like, my fridge basically is empty all the time.

What I usually end up eating is, like, protein powder and yogurt, lots of coffee. and then I'll get like salad stuff and I think it's going to last me a whole week and it only lasts me like four days. So for the rest of the four days, I don't know what I do. Like I go out to eat probably once or twice a week. I don't spend a lot on groceries. I spend a lot of money on eating out. Ah, okay. So it sounds like you've avoided lifestyle inflation in the grocery department.

I have. But not so much in the restaurant scene. Yes. Because I'm guessing that when you were making eight bucks an hour, you weren't going to restaurants. No. not at all. I remember the first fancy restaurant I ever went to that I paid for. I was 21. And it was Tony Roma's and I got ribs. And the whole meal cost like 17 bucks. And I felt so guilty driving away from that. I was like, I can't believe I just spent 17 bucks on a meal. Yeah. You know,

I remember my freshman year of college, I went once to Olive Garden and my meal was $30. I paid for two people. And that was just such an overwhelming amount of money. Yeah. I know. And now it's like, you could drop that on drink somewhere.

Right. Yeah, it's nuts. So now, like, now I take my dad out to dinner. Like, my dad used to take me out to dinner and pay for it.

So, like, now I take him out to dinner. So it's things like that, you know, like. But that's nice. No, right. Of course,

it is nice. Of course, I always try to make him pay, but he doesn't, Let me. Or you go out on a date and then these days, you know, feminism and all that good stuff is fantastic, but it means that, like, dinner is not always free because I usually offer to pay. So, you know, there's all that fun stuff. So yeah, just you eat out and it gets expensive, especially if you drink. As you started making more money, were you also thinking about lifestyle inflation in either way, whether positive or negative? Yes. So especially in the beginning, I was so savings conscious. Like I saved so much money. Like I look at my spreadsheets and I look back on like how much I was able to save when I was making like 30 grand a year or less like 24 grand a year. And it was a lot like a huge percentage.

And then because I wanted to have, you know, investing and I wanted to max out my retirement accounts and then I also had school to pay for and everything else. I was just on this like savings kick for a really long time. And I was able to save up a lot. And then like I was able to pay cash for my braces, which were expensive. And then there was, it was around like 2014. Like 2014, I just got lazy. I did. And I moved and I had all these moving expenses with that.

And I like wiped out my entire. I had like three months worth of savings. And it took that much to like move and get set up in my new place. so then I didn't have like my emergency fund anymore. And I just didn't care at that point. I guess because, you know, money was kind of coming in and I was making a lot more than I was used to. So I just thought, oh, it'll take care of itself. You know, I'm making money.

So it's all good. I don't need to worry about it. And then like over 2015 and 2014, I just, I racked up some credit card debt and it was not good. It turned into like this huge source of stress for me. And so this year, 26. I was just like, you know what? I need to get back to like budgeting and the things that I know I'm supposed to do. I need to pay off these credit cards. And I did. And so this year has been kind of contracting in the sense of like I'm just like getting my financial house in order again. It feels really good. Like it feels great to not have credit card debt anymore. It feels good to be able to like max out retirement accounts and everything else. So I feel like I'm getting back on. track. What I think is fascinating about this is that when you were making $8 an hour, you were so careful about your budget that you were able to save quite a percentage of your income. But then

once your income, once your business revenue got to six figures and your personal take of that got to, we'll just say, significantly higher than the $30,000 that you used to make, it was when you achieved success that counterintuitively, that's when the credit card debt happened. Yeah, isn't that weird? Yeah, I find that fascinating. So I want to dive deeper into that because it wasn't a logistical shift. It was a mental one. So what was it that changed? I think when you're making less, I think this is what it is, right? So you talk a lot about how there's a limit to how much you can save and there's no limit to how much you can earn, right? So for a long time when I wasn't hardly making any money, I was very much in the saving mentality because that's all I had. That was my only option. I couldn't make more.

So that's where my focus was and I was very conscientious of that. And then as I started to grow my income and realize that my income potential was a lot more than I thought it was, I started to focus on that. And that's great. You know, that's very important for people to do it. I'm glad I did it. But I stopped focusing on the saving side of it and just kind of had this attitude of like, well, the money's coming in. I don't really have to worry about it. But it's like more money, more problems, right? Like I, yeah, there's more money coming into the business, but that means I have more

independent contractors to pay and more hours for my assistant to fill and greater internet expenses and software expenses and all that type of thing. So it's not like your money grows and your expenses stay the same just in the business, right? right? So yeah, I was focused on the earning side of it and it outpaced the saving and there was a tipping point to where I really wasn't saving enough or I wasn't making enough to justify how much I was spending. So it's, I think it might actually throughout life for me, at least it might be kind of a constant rebalancing act, right? Because when I'm focused on saving and being frugal and stuff. That takes mental energy and that takes work and that's time that's not being spent

thinking about ways to earn more. So it might just be like a constant thing that I need to bring back into equilibrium. So that's an interesting concept. So maybe the answer is not to be on the middle path, but rather to live your life a little bit like a roller coaster or a little bit like the analogy that I use is interval training, sprint, then rest, then sprint, then rest. Or in this case it would be like focus on earning focus on saving focus on earning focus on saving yeah and then things just like there's a lot that I could have done I could have you know automated my saving more like like now I know there's you know there's certain places I want to travel to and there's travel expenses that I have coming up so I mean this should be like blindingly obvious but I just started to do this is like so now

it just automatically gets deducted for my account every month and before I used to think like oh if I have a good I'll just use all of that money on my travel. So like, you know, December will be my travel month and all the revenue will go towards travel. But it never really works out like that. Stuff always comes up and there's always other things to spend money on. So now I've just kind of automated saving for the upcoming expenses that I have. And that's helped a lot. Like I have a trip coming up in Ireland for New Year's and I've been saving for it for the past six months just automatically.

And it's great. Like now my Ireland travel fund is completely taken care. of and I'm still in a good place financially and it took no mental energy or it didn't take any extra work on my part other than just, you know, automating the transfer six months ago. So like just little simple things like that. And that wasn't like new information for me. I knew I was supposed to do it. I mean, if you read Rameit at all, that's his big schick. But yeah, it's just a matter of actually sitting down and taking the time to do it. Have you ever thought to yourself?

You know, all this general advice is great, but I have a specific question about my personal situation. Who can I talk to? Well, guess what? NerdWallet has an app that allows you to get advice from a financial advisor through your phone, and it's available at no cost to you. This cool new app allows you to talk to an advisor about anything you want, retirement, investing, insurance, how to pay off your debt, any topic that's related to money,

you'll be able to get feedback about your own situation. And again, it's all at no cost to you. To check it out, head to nerd.m.me. slash Paula. That's nerd, n-e-r-d-m-E-slash-P-A-U-L-A. Do you think that it was necessary for you to take your focus so far off savings in order to grow your income from $8.50 an hour to $250 an hour or more? No, no. I don't think it was necessary because it's not like it's so hard to be frugal and save and avoid lifestyle inflation. Like, yes, it does make things somewhat inconvenient sometimes, but it isn't impossible. I don't think it's impossible. to do both. I think I just allowed myself to get kind of lazy is really what it was. I got lazy when it came to the savings side. And then the business that I'm in, too, it's like some months you have really, really bad months where you're barely covering expenses. Like I had a month, you know,

this year when I was actually in the red by a couple hundred bucks. So, I mean, especially when the income goes up and down and up and down. Like you just can't have this very large monthly budget to support because my current business does not really support that model. But I don't think it's necessary. I think that was just, you know, a lesson learned on my part and something that I am hopefully remedying. As your income started to grow, were there ever certain conscious decisions that you made to

spend more on certain things? That's a good question. Yes, I would say yes. You know, it's funny. There's these patterns that I find where I will just kind of go on autopilot and like not even not even care what I'm spending on at certain times. And they usually tend to come around vacation and when I'm about to go travel somewhere for vacation.

So it's like, oh, I'm going on vacation. I need to get a cute bathing suit or a new pair of shoes or like all these things that where I would usually tell myself like you don't need it. You're fine. You know, you don't need to buy anything expensive. My mind just kind of switches into this. Yeah, you're going on vacation. Everything's great.

You can spend money or it's like stupid things. Like I took an Uber to the airport one time just because I didn't feel like driving and having to do the long term parking and everything else. and it wasn't that expensive to get there, but on the way back, this was like a $100 Uber ride. You know, and just stuff like that. So like I'm a sucker for convenience,

and if things are convenient, then I will generally spend money on it because I'd rather do that than have to, like, do the extra work of, you know, parking my car and taking a shuttle and stuff like that. And that kind of thing always tends to happen around vacation. So now that I'm aware of that, and I'm aware that like, okay, my mind just goes into this, like, I don't want to have to worry about money.

This is my fun time and everything else. And, you know, that's great, except you come home to, like, a massive credit card bill. So now that I know that about myself, I can put safeguards in place and, you know, not do stupid things. Hmm. What safeguards would you put in place for something like that? When I get to where I'm going, pull out a certain amount of cash, don't take my credit cards anywhere. and when the cash is gone, the cash is gone. That's straight up Dave Ransy school. Yeah, kicking it old school, man. Yeah, because freaking credit cards, man,

it's so easy to just whip it out, spend, and there's no pain of, like, my wallet is now lighter than it was before I spent this money. Like, there's none of that. And with all the apps we have on our phone, like the Amazon app where it's just one-click ordering or the Lyft and Uber app where you really don't feel the pain of the money like you used to. So kind of, I guess what Gretchen Rubin was saying, like treating yourself like a two-year-old,

like, no, this is the amount of money that you have to spend. And when it's gone, it's gone. So that actually seems to work pretty well for me. So yeah, just stuff like that tends to help. You mentioned earlier that you're a sucker for convenience. as a business owner and therefore as someone who, for you, time is money, how do you differentiate between genuine time savings versus wasteful convenience spending? Well, my attitude towards business and convenience is quite different than my attitude

towards what it should be, at least in my personal life, because convenience in business to me is pretty paramount because I have a limited amount of mental energy every day. And every amount of time that I spend on something that I don't have to do and that drains me mentally is inefficient and unproductive and ultimately I'm going to lose money on that time. So I try to spend my time on the things that are going to bring the most return. And so it's very much worth it for me to spend, you know, $100 a month on a piece of software that eases my cognitive load. And that I don't look at as like, well, this is just me being lazy. It is in a sense being lazy, but you're being smart about it because I can't work 16 hours

a day on repetitive, annoying tasks, right? That's not a good use of time. That's not productive. So if I can automate that or if I have a piece of software that's, you know, slightly expensive, but that can do that for me. That frees up my mental energy and my time to actually focus on the things that are going to grow the business. So I don't have rules about you can't spend money on convenience in my business. Generally, if I can get it done quicker and easier at not too outrageous of a cost, it's generally not even a question. I'll just pay for it. And I found

that to be beneficial in the business. But, It's not the same when it comes to my personal life. Like, sometimes I can just get in my car and go to the store and buy what I need to buy and not order, like, a ton of stuff on Amazon that I don't need. Right. So, like, I value my time as a business person a lot more than I value my time is just, you know, little old me hanging out, drinking friends, you know what I mean? Okay.

But then the follow-up question to that, you could theoretically work for any number of hours per week because it is your own business. so you could work 30, 40, 50, 60, 70 hours a week. Where do you draw that line? What's your business time? What's your personal time? How do you escape the gravitational pull of saying, well, I'll just work more? Where are those boundaries?

Well, for me, it's extremely easy. I have probably five hours a day where I can focus. And that's it. And that's it. And I've tried. I've tried to do productivity hacks and like stay focused longer and, you know, hustle and grind and all that good stuff. And, you know, probably a lot of people are able to do it. I have not found a way to be able to get more than five truly productive hours out of myself.

So that just makes it easy. Like, I know that I'm truly productive for five hours. Now, that doesn't mean I can't work for longer than that. But any work I do outside of those hours is going to be stuff that doesn't. require a lot of mental energy, which is like a lot of the type of work that I do. Like there's plenty of things that I can do that don't really require energy. I can send invoices. I can update my books.

Like all that stuff is very easy. But when it comes to like productive copywriting, which I hate, but you have to do it as a business person or writing processes for my assistant or, you know, creating strategy, creating marketing funnels and all that type of stuff. like I can only do it for five hours a day. So I have to be very, very guarded with that time because when it's used up, it's used up. That's it. It reminds me actually of another podcast guest that we had Cal Newport who described the difference between deep work and shallow work. Right. And he very much said the same thing, that the capacity for deep work is per day,

not very much, you know, could be as little as one hour for some people. It could be, you know, up to four or five. Yeah. Yeah. Exactly. I call it monkey work. Like the work that a monkey could do is, is the stuff that I can do when I'm not particularly focused. So at the nonprofit I used to work out, we had to do a lot of collating because we would send out these mailers and stuff. So we called it the monkey work. And it always stuck. Okay. And so then that is how you differentiate between spending money to protect your time versus wasting money for the sake of conveniences. Exactly.

Yeah. If you preserve your deep work hours, then that is an investment in your time versus... Versus just being lazy. Like, go buy a stamp and stick it on your envelope and mail the envelope. You don't have to sign up for some subscription service, which I have done, that, like, mails your stuff for you. Like, come on. Grow up a little. Yeah, I guess I just, I think it's fascinating how someone with, you clearly had very strong financial habits in your lean hungry days. You know, when you are making $25,000 a year, you clearly have that capacity for being an excellent money

manager. And so the shift that comes about when you have so much more discretionary income. You know, I think in a sense, too, I just got a little tired of having to pinch my pennies and be frugal. And once I got to the point where I didn't have to, I just kind of let it go. You know, it's like exercise. Like exercise is really good for you and you should do it every single day. and there have been times in my life where I have. And then I just get tired of it because I'm like, this sucks. I don't want to be running. And then you just give up exercise entirely for a little while and then go back to it?

I have absolutely done that. Right now I'm in an absolutely no exercise phase, and it's amazing. I love it. I know exercise is good for me, but I really don't like it. So what would you say to any listeners who are, hoping to earn more in the future than they do today. What advice would you give to people as their discretionary income hopefully grows? I would say automate things.

That's really important because anything you can do to reduce your cognitive load just makes your life easier. So if you have to remind yourself every week, I need to save money, right? That's a bummer. If you have money just taken out of your account every month for your savings, and you really never have to think about it again. So just make it easy on yourself. That's the thing too.

Don't make saving money hard on yourself. Put yourself, set yourself up in a position where it's easy to win. And I don't know what that means for different people, but for me it's automation and, you know, little hacks like, okay, I have $50 in cash that I can spend this weekend on drinks. And after that, that's it. No more drinks. Tiny hacks. I like that. Because what strikes me about that is it's not some super sophisticated high-tech system. It's not a new app. You know, it's just putting your money in an envelope. Yeah. And little wins. I'm all about little wins. Because I think, too, if we get too complicated and we try to come up with some all-encompassing system that's going to change our financial lives and make us so much more efficient or frugal or whatever. Like, yeah, you're going to stick with it for a week. And then you're not going to do it.

anymore. So like, do small things that you know you can actually stick to, which is why automation is so great, because there's really nothing to stick to. You set it up once and then it's completely taken care of. You never have to make a decision again. So, like, find those little things that you can do. What would be some examples of that? I mean, I know I keep coming back to automation, but that's really the way to go. Let's see, what other little hacks do I do? Oh, well, like, I just deleted the lift an Uber app off my phone, so now I have to drive places. Yeah. Or like what you're doing, like, you know, take an Amazon break for a while.

And if you have stuff where it's super easy for you to spend money, like, if you have apps on your phone where you can just like order something in one click, maybe just delete those apps and see that your life probably isn't meaningless and empty with those apps off your phone. Right. If you find that you're spending money, a lot of money in an arena that you don't want to be spending money in, make it inconvenient. Exactly. Basically.

Because you could go to the app store and re-download the Uber app, but you're not going to because you've created that inconvenience for yourself. Yeah, exactly. You've put a barrier between you and spending your money. And now you have to go back and do a whole bunch of steps to be able to spend the money again. So chances are you're not going to do it. I mean, hopefully. I know this is going to make me sound like a total lush, which I'm not. But like another thing that I've been doing is like I don't need mixed drinks.

Like mixed drinks are so much more expensive than just a beer. And beer makes me just as happy. So why do I need to be all like fancy with my like, ooh, I'll have an old fashion please. Like no, just get a corona. And it's not like the quality of your experience is going to be diminished by a whole lot. if you're with friends and you're having a good time and you're having fun, like, just drink cheaper beer. Well, Julia, we need to wrap up.

Do you have any parting words for the people who are listening? Don't rack up credit card debt because it sucks. And it feels it's such a bummer to like take like this big beautiful pile of money and then just use it to pay off a credit card debt. Like in some ways it feels nice. And in other ways you're like, oh, there's so many better things I could be doing with this, but you have to get yourself out of the financial holes that you dig as I learned this year. So don't rack up credit card debt. Pay off your credit card. Automate your savings.

Read Paula's blog. Listen to her podcast. Thank you, Julia. So much. If people want to learn more about you, where can they find you? Well, you can see what my company is up to at jk.expressions.com. If you have questions, you can email me, Julia at jk.expressions.com. Thank you so much for tuning in. My name is Paula Pan. This is the Afford-Anything Podcast. Head to podcast.offord-anithing.com, where you can read show notes from today's episode, as well as subscribe to email updates for future episodes. If you enjoy the show, please head to iTunes and leave us a review. You can browse past episodes either on iTunes or on our website, podcast.offord-anything.com. Thanks so much for tuning in. See you next week.