George Kamel - Top 4 Things That Will Make You Happy (Financially)

Episode Date: January 29, 2024

💵 EveryDollar Budget Deal: Get a 14-day free trial and $15 off your first year of the premium version of EveryDollar About this episode: Do millennials really need to make $500K a year to be happy? That’s half a million dollars! In today’s video, we’ll go over the top four things people said would make them financially happy, and we’ll see if it would really take a $500K salary to get there. Next Steps: ❄️ Debt Snowball Video: Best Way to Pay Off Debt Fast (That Actually Works) 📗 Order George Kamel’s new book, Breaking Free From Broke. Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

It's an age-old question. Can money buy happiness? Well, according to the Empower Financial Happiness study, six and ten Americans say yes. Yes, definitely! And when they asked how much your annual salary needs to be for you to feel happy or less stressed, the answer was different for each age group.

Get this. Gen Z, $128,000. Gen X, $130,000. And boomers, $124,000. Now, those numbers are all pretty close. But millennials, a whole other story. They said that in order to be happy, they need a salary of $525,947. Did they pull the cast of rent during the rendition of seasons of love?

$525,947. You're welcome. But seriously, that's over four times that of other generations. In the words of Phil Dunphy, WTF, man. L-O-L-L, laugh out loud, OMG, oh my God, WTF, why the face. That's a pretty significant difference. So what's actually behind that number? What do millennials think it means to be financially happy?

Is this a private island with a Tamagachi-shaped pool and a yacht named All Hands on Shrek? Well, it turns out we don't have to guess because they asked them about that too. So in today's video, we'll go over the top four things people said would make them financially happy, and we'll determine if it would really take a $500,000 salary to get there. But before we jump in, make sure you like this video,

subscribe to the channel, and share this with all of your friends who hurt All-Star for the first time, on the Shrek soundtrack, because if you're a real one, you heard it first by buying Astro Lounge on compact disc. Okay, so the question this study asked was, what does financial happiness mean to you? We're going to start at the number four answer. 53% of Americans said financial happiness means being able to afford experiences with loved ones.

Okay, experiences can mean a lot of things, and some of those things can have a hefty price tag. But there's so much you can do with friends and family that doesn't cost a lot of fortune and definitely doesn't require a $500,000 salary. So this one is bunk, I think is a very attainable financial goal to have those experiences without a huge income. Even if you want to do something crazy expensive, like a two-week trip to Hawaii or a ticket to a Taylor Swift concert, you can still make that happen on a very normal income. You got to plan ahead and you've got to start a sinking fund, but it's very much possible. So here's how sinking funds work. Every month, you save a certain amount of money for a specific purpose to use at a later date.

So let's say you want to go to Comic-Con next year, and once you add up the cost of flights, hotels, meals, and that bandit healer costume, you realize that's going to cost 1,200 bucks. So you start a sinking fund to start saving up $100 a month for the next 12 months. That way, in one year, you're at Comic-Con. Think of it as a piggy bank for grown-ups without actually having to stick pennies in the dorsal coin hole of a little pink porcelain porker.

That's a tongue twister. So syncing funds are a great way to help you pay for those experiences without going into debt and without making $500,000 a year. All right, let's move on to the number three answer. 54% of Americans said financial happiness means enjoying everyday small luxuries without worry. Again, a totally achievable financial goal. And this all comes down to budgeting. And if the word budget makes you throw open your mouth a little bit, hear me out for a second. A budget is just an intentional spending plan.

Okay, it doesn't limit your freedom. It actually gives you freedom. It's you literally taking control, getting intentional, and telling your money what to do. And that's how you can enjoy those everyday small luxuries without feeling guilty about it. Like adding the extra guac, even though there's a $2 upcharge, or going with oat milk in the latte, even though it's a dollar more. So is a $7 coffee expensive? Sure, but if that little cup of warm bean water is a big part of your morning ritual and it sparks joy, then maybe it's worth setting aside a chunk of change specifically for that cost without derailing your other financial goals.

goals. That's the beauty of a budget. You get to tell your money where to go. You're the boss. All right, let's move on to the number two answer. Sixty-five percent of Americans said financial happiness means being debt-free. And I get why this one was a popular answer. The total household debt in America is now at $17.29 trillion. So a lot of Americans are probably feeling financially held back by the weight of those credit card balances, the car loans, the student loans, you name it. I'm in debt up to my eyeballs. But just like numbers three and four on this list, being debt-free is totally attainable and you don't need to make a half million dollars to do it.

And I've seen firsthand folks come on the Ramsey show, do their debt-free scream, and they're making $40, $50, $100,000 and paying off a ton of debt. So how do you do it? Well, a little thing called the debt snowball method. Here's how that works. You're going to list your debts out from smallest to largest regardless of the interest rate. Make minimum payments on all of the debts except for the smallest one. You're going to attack that little one with a vengeance, with all the extra money you can find by selling stuff, slashing expenses, side hustles.

And once that smallest debt is gone, you're going to free up a payment. And you're going to roll that payment into the next debt and the next one. And you can see how the snowball rolls and suddenly you're debt free with a whole lot of momentum and motivation. And this is a proven method that has worked for a ton of people, including myself. So if you want a more in-depth guide to the debt snowball, I made a whole video about this and I'll post a link below. All right, the number one thing people said would make them happy is paying bills on time and in full. That was the number one answer for 67% of the people surveyed. And it's kind of sad because it implies lots of people are broke and struggling to pay those everyday bills.

But there's also some hope here because there is a proven way to break the cycle of living paycheck to paycheck. If you're not able to pay your bills on time, it probably means you don't have any financial margin. So how do you get margin? It's a simple, simple formula. You got to spend less and you got to make it. more. It's all about living on less than you make and finding the margin to throw the rest at your debt and paying those bills and saving for the future. And the best way to do that is by getting on that budget that I talked about. So when you're budgeting, we're going to start with some

priorities here. And it starts with the four walls. That's food, utilities, shelter, and transportation. We got to cover those if nothing else gets covered. So once your true necessities are taken care of, then you can fill in the rest of the categories in your budget, including any other bills you might have. You don't need a $500,000 salary to have enough margin to pay your bills. If you do, your lifestyle is out of control. If you don't have any money, you should not buy anything. Hmm, sounds interesting. Sounds confusing.

And you can make a zero-based budget, which means your income minus expenses equals zero. You gotta assign every single dollar a job, and you're gonna be okay. So let's recap the list here. Enjoying experiences, small luxuries, becoming debt-free, and paying the bills. And millennials think they need $525,000 to do that? Well, it's time for a reality check. You can do all those things with way less. So this still begs the question, why did millennials respond with such a high number?

Well, I think if you ask them, they would tell you they've seen financial setbacks over the years that other generations maybe didn't feel as much. Things like the 2008 financial crisis, which was when a lot of them were entering the workforce. And the financial uncertainty brought on by the pandemic. And they're currently looking at some of the highest inflation and housing prices. and mortgage rates that we've seen in decades. But if you ask me, I think it has more to do with some of the things that are in their control.

Things like large amounts of debt and lifestyle creep and trying to keep up with their friends and have a lot of yolo because they have a lot of fomo instead of focusing on what they really need to do, focusing on building a financial foundation. And according to the Federal Reserve Bank of New York, American Millennials' total debt has reached more than $3.8 trillion. And we've seen how social media makes it easy

to compare ourselves to other people's highlight reel. And if we're not careful, we can end up spending money we don't have to impress people we don't even like. And yes, the cost of living has gone up, but so has our standard of living. All right, we want to live a lifestyle that took our parents decades to get to, and we want it today. We need to have that delayed gratification and know that it's going to take a while. And get this, according to one report, in December of 2022, 51% of consumers earning more than $100,000 annually said they live paycheck to paycheck. That is insane.

And if that's the case, maybe we don't have an income problem. Maybe we have a contentment problem and a lifestyle problem. And here's one more interesting bit of info from this financial happiness study. Seven and ten believe that a solid financial plan would bring them happiness. In fact, those with a detailed financial plan seem to experience greater overall life happiness with a significant boost in their financial well-being. So that's all you need is a good financial plan. But where do you find one of those?

I have no idea where to even start. Oh, just kidding. It's right here. Breaking free from broke, the ultimate guide to more money and less stress. My new book, you can get a copy with the link below, and it's going to help you build wealth the right way, have less stress, regardless of your income, and without needing to make a half million dollars.

And if you're wondering why millennials seem to be struggling with money more than other generations, check out this video to find out why. As always, don't forget to hit the like button on this video, subscribe to the channel, and share this video with your friends who make a but ton of money and are still as miserable as Lord Farquod. Thanks for watching. We'll see you next time.