Debunking The 5 Worst Money Myths

Summary

Frugal Friends Podcast Episode Summary Episode Title: Debunking The 5 Worst Money Myths
Release Date: January 28, 2025
Hosts: Jen Smith & Jill Sirianni
Produced by: iHeartPodcasts

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Introduction

In Episode 480 of the Frugal Friends Podcast, hosts Jen Smith and Jill Sirianni delve into the pervasive misconceptions surrounding personal finance. Centered around debunking five common money myths, Jen and Jill provide listeners with insightful discussions, practical advice, and relatable anecdotes to foster better financial habits. Additionally, they introduce a bonus myth, expanding the conversation beyond the original five points.

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Myth 1: Rent Money is Dead Money

Timestamp: [06:19]

Jen and Jill challenge the widely held belief that renting equates to "throwing away money." They emphasize that renting can be a strategic financial decision, especially when homeownership isn't feasible or desired.

Jill:
"Rent money is not throwing away money... renting is not a bad thing, especially if the security of homeownership is not something you are ready for or want, frankly."
[06:19]

Key Points:

• Renting offers flexibility without the long-term commitment of a mortgage.
• Homeownership can still be a sound investment, but it's not the only path to financial stability.
• Unexpected costs like maintenance, taxes, and insurance can make homeownership more expensive than anticipated.
• Jen shares a successful Instagram reel about how their mortgage payments are just the minimum housing costs, highlighting the hidden expenses of owning a home.

---

Myth 2: Credit Cards are Better Than a Personal Loan

Timestamp: [07:03]

The hosts explore the misconception that credit cards are universally preferable to personal loans, especially in scenarios of zero-interest offers.

Jen:
"The average interest rate for a credit card is between 20 to 24%, whereas the average interest rate for a personal loan is about 8 to 12%."
[11:45]

Key Points:

• While zero-interest credit cards can be advantageous, unexpected life events can lead to accumulating high-interest debt.
• Personal loans often offer lower interest rates compared to credit cards, making them a better option for sizable, planned expenses.
• It’s crucial to assess the necessity and ability to repay before taking on any debt.
• Jill notes that having an emergency fund can prevent the need to resort to high-interest credit options.

---

Myth 3: Owing on a Credit Card is the Only Way to Build a Good Credit History

Timestamp: [12:33]

Jen and Jill dispel the notion that maintaining credit card debt is essential for building credit. They advocate for responsible credit card use without carrying a balance.

Jen:
"The payments, the on-time payments, at least in minimum, making minimum versus full payments does not change how your credit score would be."
[16:47]

Key Points:

• Credit scores primarily depend on payment history and credit utilization, not the mere act of owing money.
• Paying off credit cards in full each month can build a strong credit history without accruing interest.
• Keeping credit utilization below 30%, ideally at 0%, positively impacts credit scores.
• The importance of a diverse credit mix and avoiding excessive new credit applications.

---

Myth 4: A Bit More Money Will Make You a Bit Happier

Timestamp: [22:43]

This nuanced myth explores the relationship between income and happiness, highlighting that while more money can increase satisfaction up to a point, it doesn't guarantee lasting happiness.

Jill:
"If you are already satisfied and content, more money can increase that satisfaction up to a certain point."
[23:03]

Key Points:

• Studies show that happiness increases with income up to around $60,000, but plateaus beyond that.
• The perception of how much money is needed for happiness varies across income brackets and generations.
• Cultivating contentment and mindfulness is essential for lasting happiness, regardless of income level.
• Jen references their book, "Buy What You Love Without Going Broke," to discuss strategies for finding contentment without relying solely on increased earnings.

Bonus Insight:

• They share an Adam Sandler SNL skit analogy, emphasizing that changing your environment or increasing your wealth doesn't inherently change your emotional state.

---

Myth 5: High Income Earners are Wealthy

Timestamp: [32:10]

Jen and Jill clarify that a high income does not automatically equate to wealth, underscoring the importance of financial management over mere earnings.

Jill:
"Time in the market beats timing the market or even income."
[32:10]

Key Points:

• Wealth accumulation is more about how money is managed, invested, and saved rather than the amount earned.
• Overspending and lack of investment can lead to high earners not achieving true wealth.
• Financial education and strategic investing are critical for building and maintaining wealth.
• The concept that business owners often amass more wealth than high-income professionals like doctors or lawyers through prudent financial practices.

---

Bonus Myth: We are Either Spenders or Savers

Timestamp: [34:06]

Expanding beyond the five myths, Jen and Jill address the binary perception of personal financial behavior, advocating for a balanced approach.

Jen:
"We all spend and we all should save... it's a spectrum entirely."
[34:06]

Key Points:

• The spender-saver dichotomy is limiting; individuals exhibit behaviors along a continuum.
• Building skills in both spending wisely and saving is essential for financial health.
• Automation of savings can help balance between spending and saving without rigid self-identifications.
• Emphasizing that spending does not define one's identity but can be managed to align with personal values and financial goals.

---

Bill of the Week

Timestamp: [35:23]

Listeners are encouraged to share their financial victories, such as paying off debt. This segment celebrates achievements and motivates others.

Listener Highlight: Sarah from Michigan

• Debt Paid Off: $22,951
• Method: Values-based spending, bi-weekly debt payments, automatic savings deposits, and strategic allocation of savings towards debt payoff.

Jen:
"Congratulations, Sarah. You did it. You made it and you did all the things to get it down. We're celebrating with you."
[36:37]

---

Lightning Round

Timestamp: [41:19]

The hosts share personal reflections on financial advice they've received, highlighting lessons learned from past misconceptions.

Jen:
"Personally, it was cutting up my credit cards... I quickly learned that I can manage a credit card and enjoy its benefits without falling into debt."
[41:33]

Key Points:

• Rejecting extreme financial habits (e.g., eliminating all credit cards) can be detrimental.
• Learning to manage credit responsibly is more beneficial than complete avoidance.
• Recognizing and overcoming internalized myths about money is crucial for financial growth.

---

Closing Remarks

Jen and Jill reiterate the importance of dispelling financial myths, embracing a balanced financial approach, and continuously educating oneself. They encourage listeners to adopt a middle-ground perspective, promoting both frugality and mindful spending to achieve a richer, more fulfilling life.

Jen:
"Just keep dispelling myths. But bust these myths. Refuse the binary. Go for the both and find the radical middle. Embrace frugality. Live a richer life."
[52:55]

---

Notable Quotes

• Jill on Renting:
  "Rent money is not throwing away money... renting is not a bad thing, especially if the security of homeownership is not something you are ready for or want, frankly."
  [06:19]

• Jen on Credit Utilization:
  "Your credit utilization is under 30%, it's going to be the same as having 0%. But we want you to have 0%."
  [19:10]

• Jill on Financial Identity:
  "Spending is not who we are. It's what we do."
  [34:59]

---

Conclusion

Episode 480 of the Frugal Friends Podcast serves as an enlightening guide to navigating common financial misconceptions. Through thoughtful analysis and personal experiences, Jen Smith and Jill Sirianni equip listeners with the knowledge to make informed financial decisions, fostering a community dedicated to financial independence and mindful spending.

---

For more insights and episodes, visit frugalfriendspodcast.com.

Transcript

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[A]

Here are your hosts, Jen and Jill.

[B]

Welcome to the Frugal Friends Podcast. My name is Jen. My name is Jill, and today we are talking about money myths. Maybe the worst, maybe not the worst, but definitely some of the most common.

[A]

As usual, we turn to the Internet to see what they have to say about this and we actually did like this one article that listed out five. So we're going to go through those. But also we'll add in a bonus because you know us, we can't stop there. We got to add in our own two cents.

[B]

We got to. But first, this episode is brought to you by Two Truths and a Lie. All right, let's play. One, our book is out now. Two, we have not stopped promoting this book for six months. Three, we don't care if you buy it. Where's the lie?

[A]

Ding, ding, ding. The last one. We care ton correct.

[B]

We care greatly if you buy it because it supports the work that we do here. And we're not online course girlies. We're not trying to sell all kinds of digital things things online. We're very bad online influencers.

[A]

But we're minimalist with the things we sell. We got one thing.

[B]

We are obsessed with this book. We think it is going to change so many lives and we think the success of it will pave the way for similar ideologies from more diverse voices. It will pave the way for them to come after us. And so we really do care deeply about the success of this book. So we care a lot if you buy it. It's called Buy what yout Love Without Going Broke. It is available now wherever books are sold. And you can head to buywhatyoulovebook.com to see our favorite retailers on it. Well, the most common retailers, Our favorite is bookshop.org or your favorite local bookstore. But they're, they're on there.

[A]

So yeah, get it please. We're not begging, but we are kind of begging.

[B]

Kind of. Okay, so let's talk about money myths before we list the myths. A couple good episodes to queue up after this one. Episode 365 Rich Friend Secrets with your Rich BFF Vivian Too is probably my next favorite episode to go into after this. Vivian is a gem. She is a treasure. She is just as amazing offline as she is on and she really, she challenges me to expand the way I think and when you can find a friend that challenges you to expand your ideas and challenges the myths that you have about some things, that's a friend to keep that, that as a treasure. So 365 and then episode 244, how to improve your money mindset. We're not woo woo over here on the Frugal Friends podcast. We don't think mindset is the end all be all but we do think is a strong foundation.

[A]

So we do think your Brain Matters.

[B]

Yeah. So you can search those numbers on our website, frugalfriendspodcast.com or you can search the title with Frugal Friends, and it'll come up in your favorite podcast player.

[A]

So let's get into this article for today. It comes from Society One, and it's called let's Bust Five Big Money Myths. And we're going to go through all five of them and we're going to bust them. We're going to bust them together.

[B]

Let's bust. Let's bust. Okay, the first one, Rent money is dead money. So renting is throwing money away. And I think we are all at a point where we know that's not true. Whether it is by choice or just you can't afford to get a house right now. Rent money is not throwing away money. A lot of, A lot of people, even Dave Ramsey agrees with that. So, like, if he agrees with it, there's something there because he doesn't agree with a lot of. A lot of realities in personal. That is not the bonus thing.

[A]

Just back up from anything. Ramsey Solutions.

[B]

But so homeownership, we still believe that that is a good investment. We still think it's a good goal. Both Jill and I own homes. I own two homes. Real estate is still a good investment. The home you live in isn't. Isn't an investment like people will say it is. But there are so many times where you can get to a point like closer to retirement, where if things have happened and you weren't able to save enough, your house and the equity in it and the fact that it is paid off can. Can really, like, save you a lot of money and it can really push you over the edge to being able to afford to retire. And so while I do not think that it is the American dream and that it will save your life, like, I, I don't think it's as important as some people will make it out to be. Still think it's really great. But ultimately renting is not a bad thing, especially if the security of homeownership is not something you are ready for or want, frankly. Yeah, security was a bad word. It's more like marriage. Owning a home is like a marriage. I think you're married to that house.

[A]

Yeah, it's been a little bit disillusioning to me, this process, because it is so talked about. As you know, that's just a step you take. It's a milestone that everyone should be aiming at. And I think I've come to this realization that it might not be for everybody, and that's okay. And also wishing that those who are just blindly walking into homeownership that we've been a little bit more primed with knowledge and education about what to expect. One of the reels that have has been the most successful on our Instagram account in the last couple of weeks is one that we posted about how our mortgage amount is the least amount of money we're going to end up paying monthly for our housing. That the realities of tax increases and insurance increases and just maintenance costs of the home because you're responsible for it all can really cause housing to be exponentially more than maybe you would have thought when you were signing those papers at the lender's office. So, again, agreed, I own a home. I think it is. It can be a really great thing. But I think just like softening the tone around it and bringing some reality to it is what needs to happen in this space to really level the playing field here. The second myth on this article that we also agree with is credit cards are better than a personal loan. And so this is something that we can believe, especially with the zero interest credit cards, that it's better to just put it on that credit card, get the zero interest, pay it off in time rather than taking out a personal loan. And that could be a good theory if life didn't then come into play. I love the example that they give here of you think that you're going to be able to pay off this credit card in time until the car breaks down or you go on vacation or various fees, unexpected fees and bills are due, your best friend gets married or you. I love the like crazy example that they end with. But all of these things can happen and we can become distracted and especially if we're holding multiple credit cards to kind of pay for different things. This can become really overwhelming where the average interest rate for a credit card is between 20 to 24%, whereas the average interest rate for a personal loan is going to be about 8 to 12%. So less than half most of the time as far as interest rates go for a personal loan. So if you are in a circumstance where you need to take out a loan, we would agree that it would be better to consider a personal loan. But also we want to be looking at the reasons for taking out loans and be sure that we are ready to incur that type of debt. We will not encourage people to take on debt for holidays or vacations or luxuries, but an auto loan or of course a Mortgage, student loans. There are times when debt can make sense, but just to be checking. What is my reasoning for needing to take on this debt? What is the most reasonable time frame that I can pay it off and what's the lowest interest rate I can get? And recognize that if we are not a person who can pay it off in the amount of time needed, that a personal loan can be better than a credit card.

[B]

Yeah. This article in full transparency is written by a company that offers personal loans. But I still agree with it. And in my mind, like I would take out a credit card before getting a personal loan because I will think I'm better like I am if I'm instead of doing a personal loan for 10,000, I'll just take out a credit card with a $10,000 limit because I'm not going to outspend that. But time and time again, we see when there is no li like people, when there is a limit, people will spend to that limit. So unless you are able to pay off a credit card in full every month, pay no interest, and take advantage of the rewards on the credit cards, that's another way people think credit cards are better than personal loans. They are equal and they have equal. Like they have equal but separate uses. So one is not better than the other. But it can you a credit card, if you are not paying it off in full every month, will 100% cost you more than a personal loan. It just will. So there are. If there is something you haven't prepared for and you don't have an emergency fund for, and you're like, oh, I'll just get a credit card and I'll put it on the credit card. That is where I would say do not look into personal loans first before you try to get a credit card. But ultimately we hope you will have an emergency fund so that you won't have to resort to to a personal loan. But yeah. All right, myth number three. Owing on a credit card is the only way to build a credit history or a good credit history. This comes up so often. I think everybody thinks this and it is absolutely not true. We pay off our credit card in full every month. The only thing we will pay on it is we have a few that have a $99 annual fee. And what we get from it is worth way more than $99. So we will pay that fee annually, but that's it. No interest beyond that. So. And we have credit scores in the 800s. So what they want to see is not utilization. That is a part of it they want to see you stay under a 30% utilization, but you do not have to be at 30% or 10 or 20 to create a good credit history. They would love to perpetuate that myth because it makes them money, right? So they'll never correct you on it. But it's the payments, the on time payments, at least in minimum. Making minimum versus full payments does not change how your credit score would be. If I was making minimum payments every month, it would be the same thing. But by making full payments, I get the same benefits as making a minimum payment, but then I also don't have to pay interest. And it's those on time, at least minimum payments. That's what really gets your credit score higher. And it's having a utilization over 30% that would lower your credit score. So that's why we say under 30%, ideally 0% every month. And you're going to have a, and after a while, it takes a little time. After a while you're going to have a really good credit score. You don't need to pay anybody to do that, unless you need to like pick it up real quick, which we don't recommend. But yeah, don't pay to increase your credit score. You don't need to, especially interest to a bank.

[A]

The paying the minimum amount though would affect your credit score in the sense of credit utilization. So the components that make up your credit score is your payment history, your credit utilization, length of credit history, credit mix, and whether or not you are applying for new credit. The top two of those categories is the payment history and the amounts owed. So with the payment history, it's how likely are you to be paying back these loans? Are you paying on time? Are you making regular payments? So that's 35% of your score is based on that. Another 30% is based on the credit utilization. So that's the amount of credit you're utilizing compared to the amount of credit that's available to you. So this is where only making those minimum payments can come into play. Because if you have a credit balance rolling over month to month, that's going to decrease that percentage between the amount that you're utilizing and the amount that you still owe. So if you are able to bring all of your credit cards down to zero, that makes your available credit even higher, thereby giving you a better credit score. It's one of the reasons that we encourage people when they are looking to increase their credit score that you call your various lenders and ask them to increase your credit limit. That doesn't mean that you want to utilize all that credit. It just puts a bigger gap in between how much you're utilizing and what's available to you and the other ones. You know, the length of history, how long long you've been engaging with credit makes up 15%. Having a mix of different types of credit accounts is 10%. And whether or not you are engaging in new credit is 10% new credit. Meaning you don't want to be opening up a lot of credit cards all at once. That is a potential sign that you are desperate for credit. You need it to get by. So making sure that we are not regularly opening new accounts is also helpful.

[B]

Yeah, and as long, as long as your credit utilization is under 30%, it's going to be the same as having 0%. But we want you to have 0%. That's where we're being a little selfish is we want you to have 0% credit utilization every month so that you're not paying interest. To banks, trust isn't just earned, it's demanded.

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[A]

On this list, number four is the last one I'm going to mention and it is A bit more money will make you a bit happier. And this is such a huge topic of conversation that I'm actually going to answer it with some or respond to it with some of the things that are in our book we talk about that.

[B]

Wait Jill is the truth a lot more money will make you a lot happier? Is that the truth?

[A]

That is the real truth. Here's the ta da. This is a Myth, but it's also a little bit true. So here we go.

[B]

Every good man is slightly true.

[A]

Yeah, right. There's something to it. So we talk about this a lot in chapter nine of Buy what yout Love Without Going Broke. It's actually my personal favorite chapter. Jen's is chapter 10. So really, you gotta get the book and you gotta read the whole thing.

[B]

Whole thing, yeah.

[A]

But this first. So I'm gonna reference two studies. The first comes from Empower Financial, where they Talked with over 2000Americans in all various types of income brackets and asked them what they thought they needed, the amount of money they thought they needed to earn in order to be happy. Every single income bracket thought they needed to earn more with the top income earners. Those making $250,000 or more annually believed that they needed to make an additional 150 to $200,000. So bringing them up to more. So the $500,000 mark or 450 would be what would make them happier. In contrast, all the other brackets listed about 20 to $50,000 increase annually would make them happier. I can commiserate with this. I can believe this. At times. I'm more in that lower bracket. Like, if I could just make $20,000 more, I think that would really set me straight. But the takeaway I think for me in this study is that everyone believes they need more in order to be happy. With the kicker of it being those who make the most think they need nearly double, whereas even those in more of the middle income brackets aren't even list. You know, they're not listing double. So that was super interesting to me that those at the top think they need even more. There's something to consider. Ponder, if you will. Okay, so then there's this other study along these same lines that talked with these different generations, asking them how much money did they think that they would need in order to be happy? Different generations listed out different markers, with millennials listing $525,000 would be enough to make them happy. And here's the thing. There was some adversarial research that happened. There was a study that came out at one point that listed happiness actually does increase as your income increases or satisfaction increases up until a certain marker, and that marker at the time when was $60,000. They decided to revisit this research because they were finding some different takeaways from the study. And so these two researchers collaborated to relook at the results of the study. And what they actually found is that satisfaction increases up until the $500,000 mark. Very interesting that the millennials were kind of on point there with our guesses on how much money would I need to earn in order to be happy. Yeah. And then that was the plateau that once, once people reach that $500,000 mark, more money did not increase their level of satisfaction. That was kind of the. The enough mark. But what's also interesting here is that it did not increase levels of happiness or satisfaction for those who were already dissatisfied, discontent, unhappy. So you needed to already have some level of satisfaction, contentment and happiness at your current level of earning in order for more earning to be able to increase that satisfaction. It's not an automatic. More money is going to change your outlook on life or your level of contentment. So there's the kind of yes and no to it. And I think the important takeaway with this one when it comes to this myth is how do we find contentment and enough in our current circumstances so that we take that attitude, that mindset, those practices and habits with us into higher earning brackets as we're able to achieve them?

[B]

My favorite example that we did not actually get to use in the book is of the Adam Sandler SNL skit where he is a travel agent or travel tour guide. He's a tour guide in Italy, and he's saying, one thing I would like to tell to you is that Italy will not make you happier. If you are sad in America and you come to Italy, you will be sad in Italy. If you are happy in America and you go on vacation in Italy, you will most likely be happy in Italy. And just saying, like, it's not the vacation, it's not the money, it's not the stuff. Like, if you're sad with a little, you're gonna also be sad with a lot. Just like at a bigger. With more stuff. So figuring out, like, how do I. How do I cultivate joy, happiness, and contentment without complacency, so that we're still. We're still growing, we're still exercising those higher needs, which are creativity and innovation and respect, without letting them control us? The next myth is, well, high income earners are wealthy. So this is. It's a. Okay, so this is a little. This is the last one on the list. And it's saying, so this is an Australian company. It says in Australia, people who earn more than $180,000 a year are in the top tax bracket. But even if you make enough to fit this bracket, it doesn't necessarily, necessarily mean you are wealthy. If you spend all your income, you will not build wealth. And this is so true. I think we've all seen. I just saw a quote from oh my gosh, Jim Carrey, who retired from acting. And then they asked him, they gave him a ridiculous sum of money to come back for Sonic and they're like, why'd you come out of retirement? And he's like, frankly I bought a lot of stuff and I need money. Kind of like tongue in cheek. But there's a little bit of truth to every joke, right? And we all know that Jim Carrey is probably not struggling for income. Like he's made a lot so but that doesn't necessarily mean he's invested it well for passive income and growth. So time in the market beats timing the market or even income. If you. We've all seen these charts where somebody who invests from 20 to 25 and then never invests again and retires at 65 has more money than somebody who starts at 25 and invests to I think it's 45 or 50 or just all the way up until retirement. Same amounts invested monthly. But the person who has more time in the market out earn like out earns in interest and growth. The person who waited. And so obviously we all can't go back in time and invest, you know, at 20 years old. But it is true the math maths that it is truly where you choose to invest and how you choose to invest your savings that dictates your wealth versus income. And I'm also like looking at studies right now showing how business owners just time and time again become more wealthy than W2 employees, even lawyers, doctors, these so called high income earners. And so it's just a testament to being wise about how you where you where you put your money and obviously controlling your spending will help you have more margin to invest.

[A]

The Psychology of Money book was helpful for me with this concept in particular. It was really encouraging to me, kind of a typical middle income earner to know that I can still build wealth even without a high income, that there is so much thought that oh, you can only do these things, you only have access to some of these wealth building resources and opportunities if you make a lot of money. And it's just not true. It might be easier for people who make a lot of money if that's what their sights are set on. But for many it's not. Their lifestyle will just creep up to meet the amount of money that they make. And so we have the same ability as high income earners to just make Wise spending and investing and saving decisions. And so we can start now and they will follow with us if we do end up finding ourselves making more money. And now for our bonus. The article is done. But from our perspective, one of the money myths that we've been identifying and talking about a lot lately, we also talk about in our book is this binary that we've been sold, that we are either spenders or we're savers. And that it's a personality trait that you're born with and you either spend or you save. And we say we all spend and we all should save, that this is something that we should find ourselves on the spectrum entirely. And that if we don't feel like we are good at spending money or understand the mechanics of it in ways that are going to benefit us, we can build that skill. And we can also build the skill or just automate our savings. And so really identifying a both and here rather than an either or.

[B]

Yeah. And I think when we take away this identity of, of spender, it gives us more power to spend wisely and know that everybody spends, everybody saves. It's not who we are, it's what we do. Spending is not who we are. Much like skating, skating is not who we are. Skateboarding, skating, skating is not who we are. It's what we do. And same as Brinker. So yeah, it empowers us to spend on what we want and not rationalize it or justify it. Spend on what we love and say more confident no's to the things that we don't love.

[A]

That's beautiful. And you know what else is beautiful that I can feel confident about that I do love?

[B]

No myths here, just truths. Just honest, authentic truths.

[A]

The Bill of the Week.

[B]

That's right. It's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you paid off your mortgage, maybe your car died and you're happy to not have to pay that bill anymore. Duck bills, Buffalo Bills, Bill Clinton. This is the Bill of the Week. Hi, Jen and Jill.

[A]

My name is Sarah and my Bill.

[B]

Of the Week is officially paying off my debt of $22,951.

[A]

This debt was acquired from pet care surgeries, a new couch, a $10,000 timeshare.

[B]

Mortgage, and out of pocket nursing school tuition not covered by government loans. I'm from Michigan and I've been a.

[A]

Loyal listener for the past year and a half. I began my payoff journey last September.

[B]

By implementing a values based spending mindset. In April, I got Serious and began.

[A]

Bi weekly debt payments and automatic deposits.

[B]

Into my new High Yield Savings account.

[A]

My final payment was a balloon payment of $12,832.

[B]

When I realized some of my High Yield Savings account savings were better allocated to debt payoff.

[A]

I want to say thank you to my frugal friends and I look forward.

[B]

To calling back when my student loans are paid off.

[A]

Ciao for now.

[B]

Yes. Congratulations, Sarah.

[A]

Yay Sarah. You did it. You made it and you did it and you did all the things to get it down. We're celebrating with you.

[B]

Yeah. I mean debt free songs. If you've paid off your debt and you want a debt free song, leave a bill of the week and we will sing you a debt free song. That's it. That's the thing.

[A]

Made it on the spot.

[B]

Yeah. I don't care. When you've paid off your debt, just call in and tell us about it and we will sing you a debt free song.

[A]

You just hopefully, hopefully we'll remember that we made that promise.

[B]

But I'll never forget, Jill. I'll never forget about debt free songs.

[A]

Good. I love the reference, Sarah to values based spending and how this was helpful to you in your debt payoff journey. Also the High Yield Savings Account, that that's just a great old hack and well done and how great this feels and we would love to hear from you when you do finally get your student loans paid off. That's so exciting.

[B]

Sarah's paying off her debt. Yeah. Yeah. 22,000 from value based spending. Get it out of here. Get it out of here. Out.

[A]

It's gone. If you are listening and again, if you want to submit your bill of the week, if it's a bill about debt freedom and you want us to sing or if it's a bill or.

[B]

You don't want something else, you would like to leave a bill so that we never sing again.

[A]

Either will work. Frugalfriendspodcast.com Bill. Can't wait to hear it.

[B]

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[A]

And now it's time for the lightning.

[B]

The lightning round. All right, looking back, what's the worst financial tip you ever believed was good advice?

[A]

Jill Boom boom boom. For me personally, it was cutting up my credit cards. I did that. I did that thing. I was a part of that movement, that group. Think experience.

[B]

Careful, Jill, careful.

[A]

Where scissors were passed around and you were peer pressured to getting rid of your credit cards. And while I think that it can be a good place to start for some people, it can be a trap for many people to utilize credit cards. You know, us, the frugal friends, we are out here being flexible and individualized with our understanding of personal finance and that this doesn't have to be the case for all people. There is a responsible way of engaging with credit and credit cards and that a good credit score does matter for us low to medium income earners. We have to engage in credit if we want to be driving around out here keeping a roof over our heads. There isn't a world where we can show up to lenders with zero credit and expect it to go well or easy for us. So yeah, that's, that's my two cents on that one. And I did not live that lifestyle for long. I quickly learned that I can manage a credit card. I can pay it down to zero every single month and I can enjoy the benefits of a credit card. So for me, that wasn't great financial advice. I think learning the skill of managing my money would have been better for me at that stage rather than believing that I just can't do this. I'm incapable of being responsible. That's just not true.

[B]

Yeah, we never got rid of our credit card. We always kept it on the silent DL and felt a little shame about it, which I think is so gross. But there are times where it does behoove you to cut up your credit card until you have reached a point where you can use credit cards responsibly. And that comes from learning the skill of spending. So that, that is the real thing to focus on, not the credit cards. Yeah. So it's. There's a time and a place for it, but they are not evil. I think mine was that debt is dumb. That careful. I know.

[A]

Careful.

[B]

I know. That made me feel dumb knowing that debt is dumb. And I went into debt willingly. It made me feel dumb and that led me to be influenced to stay in this very. I have been learning that I am stuck in a very middle class mindset that keeps me stuck in the income bracket that I am currently in and that I am responsible enough with money to use debt wisely. And I can experiment and I can play and I can make mistakes and I can come back from them. And thankfully we haven't like made any mistakes yet because we're competent and we're cautious and we're not like gambling, you know, with our, with our Learn from mistakes.

[A]

Like, it's not bad to fail either. I don't think we have to be so afraid of ourselves failing because we will learn and we will adjust from there.

[B]

But I am still living with this internalized. Like, nobody taught me about money, so I am dumb. And I am always learning. Which is so funny to have written a personal finance book and lead a personal finance podcast. But it's why we don't talk about, like, starting businesses. Right. We stay in our lanes where we feel confident, where we feel like experts. And I am starting to explore other areas that I did not feel not worthy. But what. What would be the right word? I don't know.

[A]

Maybe that is the word capable.

[B]

Yeah.

[A]

Find yourself in that space.

[B]

Yeah. But some of it may have to do with worth. Yeah. So I think that has been. It was a gateway that was helpful at first, but ended up being extremely detrimental in the long run.

[A]

I do think what we're both describing here is that concept of shu ha ri that we also talk about in our book.

[B]

We've talked about it several times in interviews lately. That's been something that hosts have brought up.

[A]

Right. And so it's this concept, it's a martial arts concept that speaks to shu, meaning follow the rules, ha. Break the rules, retranscend the rules. And so initially with anything, it's talking about skill building. So with anything that we are learning or wanting to become competent in, we choose one master, one teacher to follow, and we follow them without question, and we do exactly as they tell us to do until we start to kind of understand the components and the dynamics of that skill and we start to feel competent. And then it's at that point we can move into the. The ha part of it where we are bringing in maybe some other voices, starting to learn some other types of techniques, ways of looking at the skill, trying our hand at a few different things. And then we can find ourselves at a point of re. This kind of transcendence where we make the skill our own. We understand the mechanics of it so much. We've listened to so many different people, heard from so many different perspectives that we now have our own unique perspective on it way of individualized implementation that we feel really good, competent and adept at. And we believe that this is the same for personal finance management as well as the skill of spending that you can tell for both Jen and I, we followed one person in the beginning, and that's great. There's nothing wrong with that. We would encourage people, follow, find who that is. Someone that you resonate with. Follow them implicitly, but don't stay there. There is then a time and a space where you start to feel my muscles are growing here. What else can I incorporate into this? Listen to some other people, practice the skill in new ways and eventually make it your own. And I think that that's where we have found ourselves. You can hear it in the podcast of we're looking at this article, but we're adding in our own tip and tricks with this as well. We did at one point believe debt was dumb. I did at one point cut out my credit cards. But I don't think that that's the pathway for me individually now that I have grown my muscles in this skill set. So I hope that that's an encouraging and helpful framework for you all wherever you find yourself, that it is okay and right and good to start with one teacher. But don't stay there. Keep moving on. Keep listening to other voices. There's plenty of us out there and room for more. We hope more people write books on this topic, make podcasts on this topic, give us resources on this thing. So thanks so much everyone for listening. We've had a great time hanging out with you all and we also love reading your kind reviews like this one from Sen 12:37. It says enjoyable and informative. Started listening after hearing Liz from Liz Gets Loaded recommended this podcast. Wow. Easy to listen to and very relatable. Lots of great ideas to incorporate saving into your life.

[B]

Well, thank you Liz gets loaded and Sen 12:37. We appreciate that so much. And if you enjoyed this show, please take a minute to leave a rating and review on Apple Podcasts or a rating and comment on Spotify. It helps people see who's recommending the show and who the show is helping and lets potential new listeners know what it's all about.

[A]

Thanks so much.

[B]

Frugal Friends is produced by Eric Sirianni.

[A]

As we're recording this, we only have a few more scheduled interviews to promote our book.

[B]

For 20. Yeah, for 2024. We will end the year with with 50 interviews for podcasts on other people's podcasts.

[A]

Yeah, on other people's podcasts. At least three interviews with different media like art writers for newspapers and articles.

[B]

I don't know if you know, that would be 154 podcast episodes recorded this year because we'd have 104 of our own show and 50 on other shows.

[A]

Wow.

[B]

154 podcast episodes. 154 hours essentially of talking.

[A]

I think that makes us professionals.

[B]

It should I think it definitely makes us masters of the craft. I think we have transcendental, transcended podcasting as well.

[A]

Like, we're doing our own thing.

[B]

Yeah, we are absolutely doing our own thing.

[A]

Like making songs for people who pay off debt that just happened. That's us innovating.

[B]

We are innovating. And so you look at the places where you are a. Where you are a master and just innovate. Just do it. And don't ask permission. Just start.

[A]

Do it. I love that. You just start singing. That has to be the thing is.

[B]

Song, dance, and don't stop until somebody asks you to stop. There you go.

[A]

And make sure they also assert their voice.

[B]

Yeah.

[A]

And you know what? Just keep dispelling myths. But bust these myths. Refuse the binary. Go for the both and find the radical middle. Embrace frugality. Live a richer life. Wow.

[B]

It's like we pay her.

[A]

It's like we're trying to kill time. Oh, actually, we don't have to do that anymore. We just realized.

[B]

Yeah, okay, I'm gonna stop recording.

[A]

We don't need to filibuster anymore. Here we go. Bye.

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