Money Rehab with Nicole Lapin - Encore: "I want to spend 10k on tattoos… how much can I afford?" (Listener Intervention)

Episode Date: June 11, 2022

Originally aired on July 29th, 2021 Money Rehab listener Adam calls Nicole for advice on whether he can drop ten grand on his next sleeve. To treat yourself or not to treat yourself? Listen to find out!

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. It's time for one of my favorite segments that we do on Money Rehab, a listener intervention.

Today, I'm talking to Money Rehabber Adam, who is totally a brother from another mother when it comes to financial advice. He wrote to me asking whether he's in good enough financial shape to spend $10,000 on tattoos. So I called him up so we could make the decision together. Adam, welcome to Money Rehab. Thank you. I appreciate you having me. Big fan. That's how I start every day. But I'm like very anti Dave Ramsey. And like he's who I kind of was brought up on. So I was trying to find something new. So you broke up with Dave for Nicole Lappin? Yes, I did. So what is your question?

So my question is, I've been on the road to retirement since I turned 18. I've been big into. Whoa, whoa, whoa. How old are you? 27. You're on the road to retirement right now? Sorry, I shouldn't have phrased it like that. I just mean I started investing for my retirement at age 27. It's a long journey. We're all about the index and chill vibes, but like, I'm not saying like I'm going to retire now. Sorry. I just mean like I've been interested in investing for my retirement since I was, you know, since I could open an account at Vanguard.

you know, since I could open an account at Vanguard. That's great. And I'm investing 26% of my income into retirement. And the problem is tattoos, as you know, are expensive if you want to get a good artist. And I just don't know how much I should be able to spend on those. And I have a problem with, I always feel guilty when I spend money. So it's like, I just need to hear an expert's opinion on like how much is okay. And yeah, it's just hard for me because I know they're expensive and I want to get like my legs and my back and my chest done and stuff. But I don't know if that will like shoot me in the foot for my retirement and stuff. So that's kind of the gist of it. Well, 26% of what you're making is awesome. You make $50,000 a year? Yeah, that's another thing.

Well, I'll have to read like Boss Fish or something, but my career stuff I'm not totally happy with. But yeah, yeah, right now, yeah, 50. Well, making more money for sure will obviously make the saving feel not as painful. For easy math, what you're putting about 10 grand? Yeah, yeah. 10 to 12, depending. Yeah. And where are you putting that? fund at Vanguard that that's my Roth IRA. And then I have just like a non-retirement account, same thing at 2060. It's a VTT SX. Um, that's a ticker at Vanguard, but, uh, I have that.

And then I put, um, $50 and then my Roth I've maxed out every year. And then I have my 401k at work, which I contribute five and they match 4%. So, and what about an emergency fund? I have like forty three thousand in a just a savings account, which is kind of stupid. I think that's another thing I'm like, I feel like that's too much money to have and not growing because obviously the interest rates on the holding money market like savings accounts are trash. Well, first of all, don't talk about my new friend like that. You are not stupid. You're crushing it. You're doing so well. These are champagne or high class problems to have for a lot of people who haven't started any of this stuff or thought about it by

27. So I'm really proud of you for starters. Do you know how many months 43 grand covers for your i like to call it the brown rice and beans diet this is like basic stuff if god forbid you lost your job or it couldn't work i think so it's well over a year probably close to a year and a half i would say me, my vision of it is like a 20% down payment on a house or something. Yeah. I mean, but for that, where your other money is, is essentially liquid and you could get it out if you needed that for a down payment as well. So I'd love to see it doing something like being put to work in some way. I would say the first thing to do is to calculate how much a year of living expenses would cost you. Do you have any sub savings accounts?

No. I think these are really helpful for organization and also visualization. I know that sounds kind of squishy and woo-woo. But if you name your savings accounts, you're more likely to stick to them. So I would create a tattoo savings account within your bank. And so I would take whatever the difference is between how much a year is. And I think a year is fine. That's what I have.

For me, my income is precarious. I obviously work for myself. And so being a W-2 employee is a different story. You know, you have a lot more consistency. But if you're a freelancer, if you're a model or a real estate agent or something like that, having more is better. What's your job? I'm an operations analyst at an investment firm. And that seems like a job that you could get at another firm relatively quickly. Yeah, for sure. Yeah. So I think, you know, a year is generous, but this is one of those discussions that isn't rooted

in economics. It's rooted in how you can sleep at night. And I get that. And that's as good a reason as any to have more in your emergency fund than not. So I would sit down and calculate what that would be for a year, cut it off there, and then put the rest into a subsavings tattoo account. So I'm not sure how much is going to be in there just by doing that. But it sounds like you can get your second sleeve, right? Yeah, I'm finishing my second sleeve right now. Okay, so you have what? So that's like 10 grand, you think? Oh, for the rest of my sleeve?

Yeah, I could tell you exactly. So far, she's 1200 a day, and then I tip 20%. So that's 1440 a session or a day. So we're going to do about three more sessions. So I'd say it's probably around 10, eight to 10. Yeah, depending on how quick it goes. But yeah, I would say to pay for the rest of it there and then look at about 5% of what you're making. I mean, that's on the lower end of what a lot of people do for their extras. I break down a spending plan to the essentials, endgame, and extras, where 70% goes to the essentials and then 15% to the endgame.

You're putting more than that. And then 15% to the extras because I really, really advocate doing nice things for yourself. This is why you work so hard. I am never going to tell people not to buy a latte. I'm never going to tell you not to get tattoos because you love tattoos. I mean, I can imagine other financial experts would not get the idea of tattoos. I have tattoos myself. They make me happy every time I see them. They look like jewelry. They are really valuable to me. They're really personal. They're meaningful. And I understand that. And that's,

you know, those are the good things and why we work so hard. So just figuring out how to plan properly is, you know, it sounds like a super easy fix for you. So taking about, I mean, 5% is conservative. So $2,500 would be 5% of your income right now. So I would just set an automatic transfer from your paycheck into your new sub-savings account. So before it hits your checking account, before it does anything else, it sounds like the rest of your savings is automatically transferred anyway. Yes. So you can

either talk to the HR department or set up through your bank where it comes from your paycheck into this particular sub savings account. And I think you, when you're ready, can just take from that account and continue to tat yourself up. That's awesome. Like I said, I get so much guilt for like spending money and stuff. So it's like really not that complicated, but I just kill myself over this stuff. It's like, oh, I can't afford to do this or whatever because it just pains me.

Like, okay, I'm spending 14. I just don't spend money like that in my other life. Like I'm a guitar player and like, you know, sometimes there'll be expensive equipment, but it's never like, oh, I'm doing a tattoo session and it's 1440. And then like, oh, I got to go back like in a month and do it again and again and again. So yeah, it's just kind of intimidating. But like you said, it's something that I love and I enjoy a lot.

So it makes sense to do that sub-saving account, especially like to me, that's perfect because it's, I don't don't even think about it. That's my favorite type of thing with, you know, with investing and saving is just just set it and forget it type of thing. So I love a good set it and forget it. Yeah, totally. And it just safeguards yourself from yourself and it sets it up without you having to stress over it monthly.

Hold on to your wallets, boys and girls. Money rehab will be right back. Now for some more money rehab. It sounds like you are more in the world of I'm going to live forever and not spend on myself, which is maybe a better extreme to the opposite of folks who think they're gonna die tomorrow and go balls to the wall spending. But I think that the best place to be with your finances is somewhere between I'm gonna live forever and I'm gonna die tomorrow. Because you can't take it with you. And you don't want to be the richest untatted dude in the graveyard. I hate to be morbid, but we're all walking each other home. So I think that spending on yourself is a mindfuck. Like all of money is a mindfuck, whether you have money, whether you don't have money.

I think the biggest enemy to any of this stuff is in between your ears. And so it sounds like you've done a lot of work on your own finances logistically and also with your mindset, which, by the way, I think matters more than anything else when it comes to financial management. I know diet experts who say think thin to be thin, and that's bullshit. Like, you want to be thin or you want to get in shape? Go to the gym. Stop eating as much. But I think with finances, the way you talk to yourself and the way you think about it is everything.

It matters so much. I think you're doing great. You're really, really all over all this stuff. I mean, for anyone, especially a 27-year-old who has a net worth of $135,500 to be exact, and you're saving 26% of your income, you're doing great. Allow yourself to treat yourself because you've worked really hard for it. And some people shouldn't treat themselves because they're reckless in other parts of their finances.

But you are not. I mean, you, Adam, are very, very responsible and very all over this. And I just want you to feel motivated as you're continuing to save and invest that you can enjoy the fruits of all of your hard work. Thank you. I appreciate it. Yeah, I definitely needed to hear that. That was kind of part of the reason why I came on. I was like, Nicole thinks I'm doing a good job, then

I do. Yeah, I think you're crushing it. I think you're doing a great job. The other suggestion when I was reading your question that I was going to have, but it sounds like your job might not allow for it. But honestly, unless you want to go to a specific person, and maybe it sounds like for this project you do, but for future projects, calling and doing a barter might be interesting. And I don't know if you have a big social following or if you play the guitar for a band and can promote, but it's just always something to keep in mind. You never know if you don't ask for a discount or for some sort of quid pro quo where you do something for the artist, let's say, and they give you a tattoo for free or they do a

highly discounted rate or something like that. I just feel like everybody can barter. It's not old school. It's still alive and well. And I wish I did it more when I was younger. And I'm always surprised when I try how much I get actually hooked up from a basic, hey, what can we do for each other and help each other? We both need these things. Yeah, for sure. I actually, my first sleeve, my artist was also a guitar player and i like i was selling my guitars he's like yo i'll give you eight hours of tattoo time or whatever if you give me that guitar i was like yeah we'll do that so stuff like that happens yeah yeah you can do that obviously it uh with tattoo stuff it can get dice like obviously you don't go in and be like

you know i i feel like tattoo artists get very you know uh which they should like offended if people go in like you know to an artist like a bang bang or something if someone went in there like i can only spend 200 like they're gonna laugh at you like it's just um the way it is like it they are part of the service industry and i think people should you know treat it that way with tips and all that stuff but yes i i agree especially like there's random stuff if you follow um tattoo artists um like i um my ex like she got tattooed and the the artist um needed like his house cleaned and like she just did that because that's like what she did for a job at the time anyway so it's just like she got free work done. So you never know. It's always, like you said, it's always worth checking out to see if you can, you know, hook each other up.

So, yeah. For today's tip, you can take straight to the bank. When you're looking at that 15% of your spending plan that's going to the extras, you can absolutely divide that lump sum into smaller percentages dedicated to your goals. divide that lump sum into smaller percentages dedicated to your goals. For example, say that you were like Adam and you want to work towards something special, tattoos or something else. Make a sub-savings account and contribute a recurring amount that falls within that 15% dedicated to the extras. Consider putting away one quarter of the money you're saving for extras, depending on how much that special something is going to cost you and when you have to have it. And you will be tatted up from head to toe before you know.

Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lams, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.