Is Aggressive Saving Derailing Their Short Term Goals?

Summary

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Money Guy Show: "Is Aggressive Saving Derailing Their Short-Term Goals?"

Hosts: Brian Preston & Bo Hanson
Guests: Joey & Leah
Release Date: July 6, 2026

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Episode Overview

This episode spotlights Joey (24) and Leah (25), an ambitious, engaged couple living in the Bay Area. Despite impressive early-career incomes and a combined net worth of $238,000, they wrestle with the tension between aggressive wealth accumulation, short-term liquidity, and life milestones like marriage and homeownership. Brian and Bo help them unravel whether their diligent saving is crowding out their near-term goals, and together, they map out tactical shifts to bring greater balance and peace of mind.

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Key Discussion Points & Insights

1. Meet Joey & Leah: Their Backgrounds & Money Mindset

(Timestamps: 00:53 – 05:47)

• Joey: Central California native, one of five brothers, graduated from Cal Poly SLO with an accounting degree, now a forensic accountant in the Bay Area.

  "Most people think I'm in the FBI catching criminals. Not quite—but I love my job!" (Joey, 03:15)

• Leah: Sacramento-raised, pursued a blended BS/MS in science, now a product development scientist and adjunct professor.

  "I get to work on new products from discovery to large-scale manufacturing...it's very consumer-forward." (Leah, 04:15)

• Both value smart financial planning: Leah credits Joey for introducing her to the Money Guy Show and the power of early investing.

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2. Financial Snapshot: Achieving Early Success

(05:48 – 09:50)

• Combined Net Worth: $238,000 (Investments: $208k, Cash: $27k, Debt: $37k, includes a family cabin and student loans)

• Household Income: Nearly $200k

• Living Expenses: $6,000/month (living in Walnut Creek, Bay Area)

• Housing Reality:

  • Rent for a one-bedroom apartment hit nearly $3,000/month.
  • To buy a modest home: $800k–$1.2M price tags are the norm.

  "It’s almost $3,000 a month to rent a one-bedroom—but housing is so out of reach, it’s hard to prioritize buying." (Leah, 08:48)

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3. Aggressive Saving: The Balancing Act

(09:51 – 16:02)

• Joey: Saves 20% in a Roth 401(k), gets a 5% match, maxes Roth IRA. Total savings rate: ~25-30%.

• Leah: Puts 30% into her 401(k) (plus match), maxes Roth IRA.

• Leah also teaches as a side hustle, saving all that income for future goals.

• Concern: Cash reserves are low relative to big upcoming expenses, especially their 2027 wedding.

  "We're very investment heavy. We've had some big expenses so our cash balance is actually lower right now." (Joey, 13:14)

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4. Wedding & Short-Term Liquidity Challenges

(12:06 – 18:08)

• Wedding budget: Targeting $30,000, paying mostly themselves, parents helping a bit.

• Available Cash: $27,000—but after accounting for life and wedding deposits, there's little buffer.

• Leah’s side-hustle as a professor nets ~$2,800/month (10 months/year), which she's earmarking for the wedding.

  "It's looking like a cross-our-fingers budget...of course we have a spreadsheet because Joey’s an accountant." (Leah, 13:57)

• New Rental: Found a 3-bedroom house for $2,900/month—same as their 1-bedroom. A big win for their quality of life, especially for their two cats.

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5. Homeownership: Dream, Reality, or Deferred?

(19:31 – 25:45)

• Homeownership Rationale: Joey wants the stability and pride, Leah craves flexibility.

• Hosts’ Reality Check:

  • Buying would mean a $6,100/month mortgage (just principal/interest on $1M). Renting is less than half.
  • Renting preserves flexibility and opportunity (and a better shot at their near-term goals).

  "The internal narrative is separated from the reality...buying right now could be 125% more expensive than renting." (Brian, 27:06)

• Advice: Don't rush—enjoy the rental, focus on tomorrow’s needs, especially with wedding expenses and potential relocation down the line.

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6. Family Cabin: A Unique Asset

(34:31 – 41:19)

• Joey co-owns a rustic family cabin near Sequoia, purchased with his brother for $80k (seller-financed, $650/mo shared payment, no running water).
• Legacy play: Family tradition, future childhood memories.
• Hosts encourage proactive communication with Joey’s brother to avoid future disputes over upgrades, usage, and costs.

  "While it's low on life-priority, hash out your expectations now—avoid weird dynamics later." (Brian, 40:26)

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7. Merging Finances: Navigating 'Ours'

(41:24 – 48:42)

• Joey & Leah currently split major expenses 50/50 and use Venmo for fairness.

• Planning to open a joint checking and keep separate credit cards post-marriage.

• Discussion about not letting small purchases be a source of resentment.

  "Assign enough value to what the other person values...communicate early and you can avoid a ton of future drama." (Bo, 46:48)

• Homework from Brian: Listen to past Money Guy episodes chronicling Bo’s marriage and financial adjustment, highlighting real-life evolution and the value of open communication.

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8. The Big Takeaway: Saving Intentionally, Not Excessively

(52:00 – 56:32)

• By following a 25% savings rate (instead of 34%), switching from Roth to Traditional 401(k) contributions for tax efficiency, and using Leah's teaching income, they can:
  • Fully fund their $30k wedding
  • Maintain a healthy emergency fund
  • Still be on track for a multi-million dollar retirement

"They could still reach $12 million by age 55 or nearly $20 million by 60 saving only 25%—the heavy lifting is already done." (Bo, 55:32)

• Philosophy Shift: It's okay to throttle back savings for short-term living; liquidity enables freedom. Homeownership can wait. Marriage and memories take center stage.

"We want you to enjoy life—save for the wedding, make memories. You’re going to be okay!" (Brian, 57:48)

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Notable Quotes & Memorable Moments

• Brian to Joey & Leah:

  "You literally are the perfect example of what personal finance is—'personal.'" (Brian, 52:23)

• On Saving Too Much:

  "They're so retirement rich, but not enough margin to fund other important things."
  (Brian, 53:14)

• On the Emotional Pull of Homeownership:

  "Why do you want to buy a house?"
  "It's just what successful people do, right?"
  (Brian & Joey, 25:45)

• On Relationship & Money:

  "The earlier you can have those [value/expenses] conversations, the more valuable."
  (Bo, 46:48)

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Key Actionable Advice

• Throttle Savings Temporarily: Adjust down 401(k) contributions, leverage pre-tax savings for a temporary margin.
• Fund the Wedding with Side Hustle + Freed Cash Flow: Let Leah’s teaching gig and new savings create the cash needed.
• Keep Homeownership Flexible: No rush—Bay Area market makes renting the smarter play currently.
• Open Communication is Key: Combine finances transparently post-wedding but respect each other's spending values.

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Important Timestamps

| Segment | Timestamp |
|-----------------------------------------------------|-----------| | Meet the Couple, Backgrounds & Degrees | 00:53–05:47| | Financial Snapshot, Housing Costs | 05:48–09:50| | Aggressive Saving & Investment Details | 09:51–16:02| | Wedding Planning & Side Hustle Income | 12:06–18:08| | New Rental, Homeownership Debate | 18:08–27:06| | Family Cabin Story & Asset Management | 34:31–41:19| | Merging Finances, Relationship Dynamics | 41:24–48:42| | Summary Advice: Scaling Back, Future Goals | 52:00–57:48|

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Final Take

Joey and Leah exemplify strong early-career financial planning, but their focus on max savings left little room for near-term joy. By scaling back a bit, staying flexible, and maintaining open conversations—both as partners and as planners—they’re set not only for a memorable wedding but also long-term prosperity and fulfillment.

Money Guy Mantra:
"Enjoy your life and your money—don’t let an aggressive savings plan steal the best moments from today."

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Transcript

[Joey]

So good, so good, so good.

[Leah]

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[Joey]

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[Brian Preston]

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[Leah]

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[Brian Preston]

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[Joey]

your favorite rack store for free.

[Leah]

Great brands, great prices.

[Brian Preston]

That's why you rack.

[Bo Hansen]

This episode is brought to you by Google Chrome.

[Joey]

You think you know a browser, but Gemini and Chrome, that's new.

[Bo Hansen]

It can help you with practically anything

[Joey]

on the web, like restoring a vintage motorcycle from a 50 page restoration blog.

[Bo Hansen]

Or finally break down that long article you've had open for weeks.

[Joey]

Gemini and Chrome is here for it.

[Bo Hansen]

Ready to make anything online make sense. There's no place like Chrome.

[Joey]

Check. Responses, setup required. Compatibility and availability.

[Brian Preston]

Various.

[Joey]

18.

[Brian Preston]

That's one of the biggest things I have with Achievers. You're running an internal checklist. You're like, you know what? Good student, Check. AP classes, Check. Y' all been rewarded for every one of these decisions. But I'm here to tell you, you're running up against the internal narrative is separated from the reality.

[Bo Hansen]

Give us the background. Who are you guys? Right? So obviously you come from San Francisco. What? What got you from birth to San Francisco, now here today.

[Joey]

I grew up on the central coast of California. Went to. I'm one of five sons, so I have four brothers. Let's go. Full basketball team. I kind of knew.

[Brian Preston]

Where are you in the order?

[Joey]

I'm number four.

[Brian Preston]

Number four.

[Joey]

Okay, number four. So almost the last one. Younger brother.

[Brian Preston]

Do they have a female name for you?

[Joey]

You know.

[Leah]

Yes, I'm sure.

[Joey]

Probably Josephina, because I'm Josephina.

[Brian Preston]

I'm just curious. Cause you know that every time they're like, okay, here's the daughter, here's the daughter. So this is gonna be the girl's name, just in case.

[Joey]

Well, that's what I said. I don't know if I'd exist if

[Bo Hansen]

a daughter came before.

[Joey]

And then after five, they're just like, okay, I guess it's just not happening. But yeah, grew up there, went to college locally. Kind of knew that I would have to cover most of college. So I was kind of researching. When I was in high school, I knew the college I wanted to go to, I knew I wanted to go into business and I was researching, you know, which AP credits are going to transfer to this college because I knew I was going to have to front that cost. Ended up going to Cal Poly San Luis Obispo. Which is where Leah went. And I graduated with an accounting degree.

[Bo Hansen]

How old are you now?

[Joey]

24.

[Bo Hansen]

24. What do you do? You do accounting? Is that what you do now?

[Joey]

Yes. So I got my CPA license a few years ago, was working in tax while I so graduated and got a job locally, tax job, which I did enjoy. And then Leah actually ended up getting a job offer in the Bay Area. Started looking for different jobs. Wasn't sure if I wanted to stay in tax or kind of branch into something different. But I found a really cool opportunity and went into forensic accounting. Nice. So I am really loving that I'm about two years into that. Forensic accounting can mean a bunch of different things. Most people think I'm in the FBI, catching criminals, stuff like that.

[Bo Hansen]

He's at the crime scene, right?

[Joey]

Yeah. Have you seen the movie the Accountant? Ben Affleck?

[Bo Hansen]

That's exactly what I was thinking about.

[Brian Preston]

Not quite, but you presented that the most accountant way ever too. I love that. That's so great.

[Bo Hansen]

Leah, what about you? What's your backstory?

[Leah]

Yeah, so I was born and raised in Sacramento, California. My dad always did science experiments with me growing up and we're always working on something and that really sparked my curiosity. And I had a great chemistry teacher in high school and my college actually offered like a blended BS Ms. Program. I'm getting my ROI because I can still I work a side job as a professor at a local community college in addition to my day job as a research and development scientist for a consumer packaged goods company in the San Francisco Bay area.

[Bo Hansen]

So what does that mean? Like what give us? I understand all of those words individually

[Leah]

when you put them all together.

[Brian Preston]

That's all on my paper and development scientist. I was like, that sounds cool. Job title.

[Joey]

He's going to start breaking out big words and stuff.

[Leah]

No, today I'm a product development scientist. It's called like product process development. So we carry products and early phases through discovery work and then we lead them all the way to activation and large scale manufacturing.

[Bo Hansen]

So like new flavors of Doritos that like, like that's the kind of stuff

[Brian Preston]

that you packaging or is it the flavoring and the actual product?

[Leah]

All of the above. We have special scientists that focus on packaging development and like oftentimes they have like material science backgrounds or they study packaging specifically. So my role is more of like the product development. How do we slap a great claim on the package? How do we sell this? So it's very cross functional and like very consumer forward.

[Bo Hansen]

You said you guys are engaged, not Married yet? Right. So you met in college, stayed together through graduation in the working world, and now you're preparing to get married. When, when's the. Have you set a wedding date yet?

[Joey]

Yeah, it's in July of 2027, so about a year out.

[Bo Hansen]

Okay, so we're a year away. And how long have you guys been out of school working?

[Joey]

Three years.

[Bo Hansen]

Three. Okay.

[Leah]

I've been working for two years.

[Bo Hansen]

Full time years. All right, so you guys are not fresh out of school, but you've been in the working world for a while. And what's wild is as you guys are sitting here thinking about, okay, what's the path? We're getting married. We're going to talk about like joining finance, how this worked. You guys were kind of to share with us a net worth statement of kind of where you are today. And for you said how.

[Joey]

How would you say you are 24.

[Bo Hansen]

24 and I'm 25. 25. So for 24 and 25, you guys have a total net worth of $238,000. When you look at both of your individual net worths combined. And it's pretty wild. Of that, $27,000 is in cash or like liquid assets. Investments represent about 208,000. There is a cabin that's in there. That's a thing. And then we have only debt is we have some debt on said cabin and then we have some student loan debts. You have about $37,000 of debt.

[Brian Preston]

Not even a bad interest rate though.

[Joey]

Oh, it's super low because we were in college during COVID So

[Bo Hansen]

when we look at this 24 and 25, $238,000 net worth, almost $200,000 household income combined. Do you guys recognize how unique that is? Just the situation that y' all are in, Kind of where you're starting from?

[Joey]

Yes, we are extremely grateful. We have great jobs. I think we set ourselves up very well with our majors and careers that we've gone into. We're obviously just in a very high cost of living area and we're trying to balance that. And also housing is an expensive thing. Wanting to break into owning a home one day, which seems a little out of reach. And it's hard to prioritize that when you know, the power of your dollars and what they can grow to at our age.

[Brian Preston]

Multiplier.

[Bo Hansen]

That's it.

[Brian Preston]

Multiplier.

[Joey]

I love it.

[Brian Preston]

Yeah.

[Joey]

So it's, it's hard to know like when to scale back that savings.

[Bo Hansen]

Can you give us some context? Like in the cause you said you Guys live in the Bay Area, right in San Francisco. Give us for folks who don't know, like, what's the housing market like there? Like, when you're talking about we want to be homeowners, what does that mean in sort of like real dollar terms?

[Joey]

Well, we are not in the city of San Francisco. We're in a suburb. But a single family home is probably somewhere between 800,000, $1.2 million.

[Bo Hansen]

And like, for context, how many square feet is that on average? I'm just trying to like, because, you know, different parts of the country, different cost of living, I want to kind of level set that.

[Joey]

That's probably a couple thousand square feet.

[Leah]

Okay.

[Joey]

Yeah.

[Leah]

When we first moved to the San Francisco Bay area, we were kind of unfamiliar of like what suburb. We are not city people. We just wanted to live like, you know, somewhere in a nice downtown area. There's parks, you know, maybe some gated parking just for that peace of mind. And the, the first one bedroom apartment we got was around like 770 square feet, which is considered to be on the larger side of a one bedroom. You know, we chose a place that's, you know, close to downtown. We live in like this town called Walnut Creek. Beautiful place, but it comes with a pool and a barbecue and a gym. So it's like one of those all inclusive, like copy paste apartment complexes. And then we signed our first lease in 2024 at like 2660 base rent. But then that comes with like paying for an extra parking spot a month and utilities. So that's added like probably another $300 to our bill each month. And then over the past couple of years, we just got a notice of renewal for our lease because our lease is up at the end of July and they renewed us at like 2890. So we're like, we need to search for something else. You know, we have two cats. The cats need more space. We really wanted to break into a cat.

[Bo Hansen]

It's not us that need more space, Brian, it's the cats.

[Leah]

It's who? The cats we're doing it for, man.

[Bo Hansen]

It's almost $3,000 a month to rent a one bedroom. But you said something so interesting, Jerry. You said, man, I feel like it's hard to even prioritize saving for a home because the goal of homeownership seems so unattainable when you have to start at 800 to 1.2. Did I paraphrase that correctly? I think a lot of people, especially in this moment right now, a lot of recent grads and young professionals feel that exact same way, man. Okay. There's no point in me even doing that, so why would I even try? So you guys are saying homeownership is a goal that you have, right? That's a goal that you want to work towards. What are you doing with, like, your current dollars? Like, like, if you're not sucking it all the way to buy a home, where's your money currently going?

[Joey]

We're investing a lot. I. So I'm trying to reach, you know, that 25%. I currently do 20% into my Roth 401K. I get a 5% match on that. And then I'm also maxing my Roth IRA each year. So it's about, I don't know, between 25, 30%, something like that. And then you invest a lot, too.

[Leah]

For my full time, my scientist job, I put away 30% into my 401k. And then he. When I met him, I had $30 in my Roth IRA when I was 21 years old. And he, you know, put me onto the money guy show and the power of the money multiplier.

[Joey]

So here we are times $30.

[Brian Preston]

You gu. Crushing it in that aspect.

[Bo Hansen]

It's wild. Okay, so 30% going in your 401k. Do you have an employer match through the.

[Leah]

We do, yes. It's like a 4% and then invests with an additional contribution over a certain period of years.

[Brian Preston]

Look, a lot of people are going to see y' all situation be like, you know, y' all were wicked smart, you went to college, fell in love, you got great jobs. Okay, we want a house. What are other drama, what other struggles or goals do y' all have that we can address? Because we can talk about the housing here in a second.

[Joey]

I don't know about drama. We actually don't. We don't have much conflict over finances. We're not married yet. We haven't combined finances. But, you know, there hasn't really been conflict there. And I think we're really aligned in our goals. I mean, housing's a big one. We want kids one day. And that's a hard thing, especially, you know, if we are to stay in the Bay Area, knowing whether that can be done on one income, how to prepare for that. Hopefully our salaries, you know, go up over time.

[Leah]

An additional question that I had especially, we're in this season of Life where we're preparing to get married. Everything around the word marriage, bridal, anything,

[Joey]

there's a tax that goes on top

[Brian Preston]

of this, but there's a Whole industry helping you try to relieve you of your money.

[Leah]

Luckily, we have some help. You know, we're very grateful that his brother is a caterer. Yeah, my brother's a wedding caterer planner.

[Brian Preston]

So that's extra set up in the area.

[Joey]

Just need more relatives.

[Brian Preston]

Well, that's really helpful because you probably got some ins on locations and stuff too, hopefully.

[Joey]

Yeah. So, I mean, venues are just expensive. Everything else that comes with a wedding is expensive. Photographer, dj, everything.

[Brian Preston]

But there was a question probably coming. So where was there.

[Leah]

Is there a point of reference we can have when planning for something like that? Because when I speak with people, they're like, okay, we were able to have a very like micro wedding at 20k. And then I hear people that spend like 80 to 100,000. And I don't think that's realistic for us. And we don't, of course, want to spend all of our savings on this event. But of course we wanted.

[Brian Preston]

Who's paying for the wedding? You guys paying for the wedding?

[Joey]

Most of it.

[Brian Preston]

Yeah.

[Leah]

Yes, My, my parents are assisting with

[Joey]

some of that, but.

[Brian Preston]

But they don't, they don't have like a big pot of money waiting to, to spend.

[Leah]

We don't have 100,000 waiting, you know, for this wedding.

[Brian Preston]

Yeah, that changes the algebra a lot when you know when you guys are funding it because you've, you've already given the head start knowledge that you know about the wealth multiplier.

[Bo Hansen]

So how much you plan on spending on the wedding. What conversations have you guys had around that?

[Joey]

Our estimate based on where things are currently going, we have like, you know, a few vendors locked in and stuff. It's probably going to be around 30ish.

[Bo Hansen]

Hard stop at 30 or, hey, we think that's what it's going to be. But maybe so hard.

[Joey]

It's so hard to know. I mean, we want to have, you know, a fairly large wedding, like 150 people.

[Brian Preston]

Oh, wow.

[Joey]

It's just hard to gauge, I think, our net worth. We're very investment heavy. We don't have. I think we've had some big expenses. So our cash balance is probably lower than what is even shown there right now.

[Bo Hansen]

Well, you're doing the math for me. I'm like, all right, $30,000 for a wedding next July. So we're a year out from. And we have $27,000 readily available in cash in total.

[Joey]

So they got to come up with that.

[Bo Hansen]

There's a mismatch there.

[Leah]

Right.

[Bo Hansen]

First question, right? You're estimating it's going to be 30 I really do want to know is 30 a hard start? Like hey, we will not spend more than 30 or hey, we're going to spend on this wedding and we're going to do this and it's going to be 150 and we're going to have this, we're going to have this and we're just going to cross our fingers and hope that it's under 30 because those are two different, those are two different things.

[Leah]

Right now it's looking like the cross our fingers. And of course we have a spreadsheet because Joey's an accountant.

[Joey]

I more keep track of it. I would say I'm not like with our expenses. I don't actually budget and keep track of every dollar. I just know what we bring in and an idea of what goes out. And there's money in the bank account at the end of the month. So I don't think I'm the best at. Because we don't have that amount of money right now to spend. So that's a little nerve wracking.

[Bo Hansen]

You have laid out for us that we begin with the end in mind. I chose this major and I did this. I looked at the AP class like you guys are thinking. So I know this is not something you're thinking for the first time. What's your plan for how you're going to come up with that 30,000 between now and then or over the course of the next year?

[Leah]

I've been teaching on the side and that's been a great source of extra income in terms of like putting cash away because I'm like, you know, with my full time job, I'm putting 30% away in my 401k and after taxes and everything, it's kind of like I have my bare bones cash amount and then everything I receive for my monthly teaching paycheck just goes right into the high yield. So I don't recommend.

[Brian Preston]

So is one of these a sinking fund for the wedding already?

[Joey]

It is not, no.

[Brian Preston]

Okay.

[Bo Hansen]

So when we think about the side gig teacher income, how much is like a set amount? How much is that on average monthly that you have coming in?

[Leah]

Net net would be around like 28.

[Bo Hansen]

Okay. And it's exclusively just getting parked in high yield savings. It's not getting spent or used for anything like this.

[Leah]

I don't see much of that unless we have like emergency funds. You know, recently if we just got an opportunity to rent a home and there's some overlap in our rent. So it's like that security deposit, you know, first Month's rent. You know, we're really feeling the hit because this happened like, you know, a couple days ago. So. Yeah, that's just been a lot of cash right now.

[Joey]

Awesome.

[Leah]

But we're trying to use that pot of money for.

[Brian Preston]

But you got a year. I mean, that's the thing I don't want. You don't have to force it because you've got a year and you just. I gotta be honest with you, you just solved half the problem. I mean, right there. Now can you do that consistently for six months?

[Joey]

That's okay. So she teaches. Leah works extremely hard. She has a full time job and then she's also teaching this class on the side which is a class plus a lab. And so this class goes until 10pm at night.

[Leah]

Oh wow. 5 minute general chemistry course.

[Bo Hansen]

Yeah.

[Joey]

So she teaches full time job, then goes straight to school, teaches until 10 o'.

[Leah]

Clock.

[Joey]

That's two days a week. And then she has office hours the other day days. Obviously there's more hours that go into all of that, you know, grading.

[Brian Preston]

So this isn't a completely. This isn't sustainable for six months.

[Joey]

I know. That's one of the things we wanted to bring.

[Brian Preston]

Give us a reality then on. $2800 a month for three months. What do we do actually?

[Leah]

So I'm teaching both semesters this year, so spring semester and fall semester of 2026.

[Bo Hansen]

So through the end of the year we feel pretty comfortable in that 20.

[Leah]

Yeah, so I'm getting paid 10 months out of the year. Okay, you're paid monthly. And you know, I'm receiving paychecks 10 months. So I think that is a substantial amount of cash to be saved.

[Joey]

It's about like 15,000 per semester that you teach about.

[Leah]

But I am taking a break next spring and you know, that was a heavy.

[Bo Hansen]

We got a wedding to plan for

[Leah]

obviously, you know what I mean? Like, maybe I should try to, you know, enjoy life, have more of a balance. Because it has been such a grind the past like year and a half so far. And I love that job. Like, you know, it gives me the best of both worlds. I can work my industrial scientist job, but I can also, you know, like exercise my passion for teaching and getting to know students and you know, build your classroom community. So it's been a great learning experience. But also like I'm tired at the end of the day and I'm grateful for Joey because, you know, I'll come. Yeah, he folds the laundry and cooks dinner. So yeah, he is like the accountant right?

[Bo Hansen]

You remember the movie that's. He did all that stuff. That's it. Okay, so six more months, right? That's gonna get us somewhere. 14, 16,000. Depending on when the pay hits of cash, you'll be able to bank up and you've already got $27,000. But we want to make sure we don't get too, too lean on cash. When we think about your monthly burn rate, do you guys have an idea of what your baseline burn rate is?

[Joey]

Okay, the slide is helpful. Yeah. We tried to put this together the best we could. Some of it is an estimate, it's around $6,000.

[Bo Hansen]

Okay, great.

[Brian Preston]

I was going to ask you because you all let something slip that y' all just potentially are renting a house now. So give us the scoop on that.

[Joey]

Yeah, so this all just happened in the last week. So our previous landlord, we're still living there in the meantime, but big corporate landlord, big apartment complex.

[Brian Preston]

We heard copy and paste. Apartment complex. I never heard it said that way, but I was like, that makes a lot of sense.

[Joey]

So I mean, in the Bay Area, because housing is so unobtainable for a lot of people, there are a lot of these huge apartment complexes everywh. Because that's what a lot of people have to do. You know, when we moved here, we chose that to start, but they kept raising our rent every year pretty consistently. Even this last increase, which I thought was pretty ridiculous, they raised it to. They post their current rental prices online and the exact same unit that we could rent today, sign a lease. They want $200 less than what they're trying to renew us for the switch.

[Bo Hansen]

You sign up different, it's him and her and her and him.

[Joey]

So we were like, you know what, I think it's time to get out of here.

[Brian Preston]

So tell us about this house. What's the deal on that?

[Joey]

So we got a really good deal. It is 2,900amonth. That's for a three bedroom house.

[Leah]

Amazing. Yeah, we're so excited.

[Joey]

Pretty close to where we currently are. That's almost the same rent that we were paying for this one bedroom apartment.

[Brian Preston]

What's the story of the people that are renting it? The landlord, what's their goal with why they're renting this house? Is this like a rental house or is this a house that they moved out of the area and they're just now renting it?

[Joey]

So he's owned it for a long time. Tenant just moved out and he was looking for some long term tenants. And we, this was a Pretty competitive house to get. There were a lot of people interested, so we really jumped on it when we saw it come up and really grateful that we got it. So owning a house, a lot of that was just, you know, we kind of want to be in a house in a single family home. And so now that we have that, you know, I. I'm fine with staying here until we're able to eventually, you know, make that purchase, so.

[Brian Preston]

And not. Not to, because, man, I feel like the. The cr. Uncle here asking y' all, like, family questions before you even are married, because you got a year before we get married or whatever. But y' all come from big families, so, you know, and you've already let it out the cat out of the bag. And the fact that you've said we're going to have kids. When are y'.

[Leah]

All.

[Brian Preston]

What's yalls timeline on that? Y' all are planners. I've already. I bet y' all had this conversation.

[Joey]

Yeah, we've talked about it around 5 to 7ish years.

[Brian Preston]

Okay.

[Joey]

Which is also kind of the home timeline.

[Brian Preston]

Five to seven years. How many kids y' all want?

[Leah]

Well, I.

[Bo Hansen]

They both looked at each other. How many do we want?

[Leah]

Well, Joey comes, he's one of five, so maybe he has a different perspective, but I don't know. I'm like two max, perhaps, but two to three, we'll see how we're doing. But I feel like our finances are a big part of, like, do we feel ready? Do we feel comfortable? Can we afford childcare? You know, our families live far away, so it's not like we can have grandma babysit during the day, unfortunately.

[Joey]

Yeah. And we both, I mean, we both bring in similar incomes, so if one of us were to not work, that's obviously a big hit.

[Bo Hansen]

Are y' all career trajectory? Is it the same, like, if you both continue working, do you both have the same career trajectory? Does one of you have a more rapid increase in income potential than the other or a higher ceiling than the other?

[Joey]

Fairly similar. I mean, so my career goal is to one day become. To be able to provide expert testimony in, like, the counties surrounding the Bay Area and potentially become a partner at a firm. But, you know, that's going to take some time, require me to get more experience. But that's my goal one day. And if I get there, there would obviously be a considerable bump in pay.

[Brian Preston]

How about your opportunities?

[Leah]

Yeah, I think it really depends on how the company is doing overall. But personally, I like where I'm at. My goal is to Continue, like trying to climb that corporate ladder, you know, use my opportunities while I can and just try to build up a diverse set of skills. Because I know, you know, research and development sometimes could be limiting depending on the area. And I think that's why we're living in the Bay Area, just because it's like a technology hub. So it's a great place for us to start our careers.

[Joey]

Yeah, I think my career, I have more flexibility in where we would end up living. But Leah, you know, a job in as a scientist or a chemist, those are more concentrated in urban areas. So not like quite as much flexibility.

[Brian Preston]

Well, and I don't mind asking that question because we just before I don't know how much makes it into the show we were just talking about, y' all couldn't believe how incredibly green and beautiful Franklin, Tennessee is. I mean, are y' all set to staying in California? Because we already know it's a high cost of living area. I mean, since you guys are young, you're both highly educated, you're talented, you know, really, you can do anything. So that's why I feel like it's worth asking the question, are y' all staying in that area for a long time or is that open ended?

[Leah]

Well, I've tried to convince Joey.

[Joey]

She's trying to plant the seed.

[Leah]

Yes, actually, because I got the chance to live in North Carolina for like an extended co op, which is like a long term internship. And it was with the company that I'm at right now. But it was like as I was finishing my master's degree at Cal Poly at the college, you take your classes and then the last sort of nine months of that program is either doing a thesis with like, you can choose to do research at the university and work with companies to fund your research, or you can physically go do an internship for nine months and write your thesis based off of the technical work that you've been doing there. So I wanted work experience. So I thought this would be a great time to work and be in grad school, you know, like, this is a great opportunity to do so. So moved to North Carolina. It was in the Raleigh Durham area. Beautiful. The grass is green, the trees are green. Not used to the hurricanes or the humidity. It reminded me of where I grew up because it's like two hours from the mountains, two hours from the beach, and I had a very bougie one bedroom apartment for fifteen hundred dollars.

[Brian Preston]

Living like a king defies gravity, doesn't it?

[Leah]

It does. So I'm flexible, but I totally Understand, like our families are in California. He has a cabin in California.

[Bo Hansen]

So tell us about this cabin. This is the first time it's come up since the network before.

[Brian Preston]

I want to hear about the cabin, but what are your thoughts on the moving? I want to make sure we close that loop and then talk about the cabin.

[Bo Hansen]

He's going to say, I can't because

[Brian Preston]

the cabin, I would actually close it.

[Joey]

No, I am open to it. Family is here. I do love California. It is very expensive. But as long as we can afford it, I would like to stay at least for, I mean, we're both aligned on staying here for at least the short term, near future, you know, five to 10 years. Just because we want to stay with our jobs for a while.

[Bo Hansen]

You said one of the goals is to like own a home. But then you said, well, I really want to be in a home. And then you said, well, maybe in five to 10 years we might be open to not being here. Does that seem, is homeownership as big of a goal or not so much now that you're going to be in a three bedroom that's affordable and that, you know, you get the homeowners the home experience without having the homeownership?

[Joey]

I keep going back and forth on it because again, just when you look at the cost of renting versus buying a house and what you can do with that extra money and the power of those dollars, it's just really, really hard to justify it. Especially at our age. And now that we're in the home, I'm like, so why do you want

[Brian Preston]

to, why do you want to buy a house?

[Joey]

I just like the idea of it's built into the.

[Brian Preston]

This is what the American dream is. This is what successful people do, right?

[Leah]

Like put nails in the wall. Without the landlord.

[Joey]

You'll have to ask the landlord.

[Brian Preston]

Did you watch our episode on is it better to rent or buy?

[Joey]

Currently I did, yeah.

[Bo Hansen]

What'd you think?

[Joey]

It seemed like a pretty clear answer to me.

[Brian Preston]

I mean, I did the math for you guys and I still want to hear about the cabin. But what's funny is I took a $1 million house, I only had you put down 3% because, you know, on a first time homebuyer, we give you lots of grace and so you only had to put down 3%. But then we financed the other $970,700,970,000. Public math, man. Be careful. Anyway, the monthly payment at six and a half percent. $6,100. And that's not property Taxes, that's just, that's just the principal and interest. That's not even the property taxes. That's not the insurance, not maintenance. And I just heard you tell me that you've got a three bedroom house not too far from where you are for $2900. Do you know why they can give you that house for $2,900?

[Joey]

Because it's either paid off or he's got a really low.

[Bo Hansen]

Yeah.

[Brian Preston]

The interest rate on that house is. It's either exactly what you said paid off or there's probably a less than 4% mortgage rate on there. And so that you're getting the, the benefit of that plus the purchase price was substantially lower before we had the, the 2021 run up in real estate where it almost doubled, you know, in that three to five year period there. Financially, it doesn't make sense to buy a house, especially with at least not all the life stuff that y' all just said. You just, yeah, you just answered your own question. And that's one of the biggest things I have with achievers is y' all think you're on a check. You're running an internal checklist. You're like, you know what, I'm been a good student. Check AP classes. Check hard major. Because I want to flex this muscle I have in my brain that can do a lot. Check. And you've been rewarded for every one of these decisions. But I'm here to tell you, especially in this high cost of living here you're running up against the internal narrative is separated from the reality of what you could do because that is twice as expensive and it's actually going to be more than that. It's going to probably be 125% more expensive than you just renting that house that you're in right now.

[Joey]

Yeah, that's wild.

[Brian Preston]

You run that by the wealth multiplier I'm talking about. This is at Yalls age changes your life in the future. It really does.

[Joey]

I agree. I still want that to be a long term goal for us. And it's just so hard with the current market. I know we're probably not expecting prices to increase at the rates that they have in the past five years. It's just hard to know when to jump in and especially if we aren't completely set on staying in the Bay Area. You know, if I buy in at the wrong time, that's the biggest red

[Bo Hansen]

flag in our opinion.

[Joey]

And then we decide to move. Well, I'm Art Shermanning. I'm Madison Skinner.

[Brian Preston]

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[Bo Hansen]

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[Brian Preston]

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[Leah]

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[Joey]

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[Joey]

You know, if prices went down, you know, you're kind of stuck.

[Brian Preston]

Yeah, that's the problem with levered debt is because you lose 10% in the market of the value of the house, you know, because you have to sell it, you have to move, to relocate.

[Joey]

Yeah. You fill all that hundreds of thousands of dollars.

[Bo Hansen]

Yeah, yeah. And you know, people often pose it as oh well, renting is just throwing money away. Throwing money away. I would. You just laid out the perfect case. Well, it's not throwing money away, it's buying yourself options and flexibility. I'm only committed for 12 months or 24 months, whatever your lease term is. And then I can choose to do something else if I want to. I can just Once you buy that, you are sort of at the mercy of what happens with the housing market, what happens with that particular home. And if that stuff isn't set, I would be careful rushing into it, especially in a super high cost of living area like the Bay Area. So even if you were going to do that, you got to save up for down payment, he said 3%. It's $30,000. We already have this wedding that we're trying to save up for as well. That's 30. So now we're like having these multiple goals we're stacking up. You guys said that your monthly burn rate is about $6,000, right? Even with this new house. And there's somewhere in that ballpark, you also said that your incomes are roughly equal. So it's not like there's a wide disparity. So I would argue that in that sort of environment, a three month emergency fund is probably prudent. It's probably not like a crazy thing to think about. So you take $6,000, times three months, it's $18,000.

[Brian Preston]

Just go ahead and have a 20,000.

[Bo Hansen]

So 20,000. So when I see your current emergency fund, the cash that you have on hand, according to your net worth statement right now, I can see that it is $27,000, right? So we're about seven. All right, so in my mind I'm thinking if I'm trying to fund goals, all right, I got $7,000 to move

[Joey]

that to another bucket for the wedding, right?

[Bo Hansen]

Like I got 7,000 for the wedding. We've already laid out that if you just can continue this pace of teaching for the remainder of the year, that's going to be another 14, 15,000. All right, well now we're at like 21, $22,000 of this $30,000 goal. How are we going to bridge the last seven to 8,000?

[Joey]

So that was one of my questions on whether we can scale back on the savings, at least temporarily. One of my thoughts also was to. I think we're kind of on that borderline Roth versus traditional contribution because California tax rates are quite high. We're looking at around 30, 31% marginal rates. So we're kind of on that borderline. We've been contributing to Roth in the past, but if we switched to traditional, we could free up some cash flow that way big time. Or just dialing back the percentage that we contribute.

[Brian Preston]

And you're still gonna be putting money into the Roth IRA too. I mean, you could. Even if we, I mean, cause y' all's structure, even if you started blowing through the income thresholds, you could start doing structured as a backdoor Roth contribution.

[Bo Hansen]

But there's a good chance you won't have to do that. Your income, you're not gonna necessarily be there, but you are at the income where pre. You just said 31. So you said you're putting in 20%. You're putting in 30%, right. So how much total you have going into your 401k annually? I'm asking, I'm sure you probably.

[Joey]

It's about 20,000.

[Bo Hansen]

All right, so 20,000 between the two of you or just yours?

[Joey]

Just fine, just yours.

[Bo Hansen]

20,000 for you. And the 30% of your pay barely

[Leah]

missed the mark on maxing out.

[Bo Hansen]

So it's like 40 to $45,000 a year going in. Do you recognize if all you did was switch your contributions from Roth to pre tax at that 31% tax bracket, that alone would save you $12,000 in taxes.

[Joey]

Wow.

[Bo Hansen]

Just doing. That's an extra thousand dollars a month in savings that you guys could have to still fund Roth IRAs because you're below the Roth limit, or if income increase, you get to the back door or to fund some of these other goals that you guys have. It's why, and we love Roth and you guys are young and Roth makes tons of sense, but you are the case study. Why, if I told you, hey, by clicking one button, you could potentially have an additional $12,000 every year. That's pretty substantial. That's pretty significant, right?

[Joey]

Yeah. And I think that could just be, you know, a temporary thing. We don't even necessarily. With the numbers you brought up, I mean, we don't even necessarily need to dial back the percentage and we can still get to that 30,000 ish goal for the wedding.

[Bo Hansen]

So the wedding is a goal. And the homeowner. I don't even know if homeownership is going to go. Homeownership? Is that a thing?

[Brian Preston]

I think it should be put on the shelf for a while. Sure.

[Bo Hansen]

All right, so it's come up a few times, but I want to address. Cause when we're looking at your net worth statement, there was this cabin, this thing that showed up. You don't own a home. You don't see a lot of 20

[Brian Preston]

year olds with a cabin.

[Joey]

I know.

[Bo Hansen]

Walk us through. What is this thing? Where did it come from?

[Joey]

Okay, so kind of a unique situation. There's this cabin that's been in my family for about 100 years.

[Brian Preston]

Really old cabin, wow. So this has got a family legacy to it.

[Joey]

Not this cabin, but not this one.

[Brian Preston]

Tell me about the one that you thought he was about to go.

[Bo Hansen]

I was like, oh, it's an old family. Like, we can't let this cabin go.

[Joey]

So what happened was, yeah, that family's been in our. That cabin's been in our family for a long time. Great, great. Grandpa bought it. Very rustic. It's in California, near Sequoia and Kings Canyon national Parks. That was a big part of my childhood, going there every summer, going there Memorial Day weekends recently. It's part of this group of cabins. There's like, 13 of them.

[Brian Preston]

Is this near the cabin that your childhood memories are in?

[Joey]

Yeah. So it's in this, like, community of cabins where they rarely, if ever, come for sale because they've been in families for, you know, a long, long time.

[Brian Preston]

Okay.

[Joey]

And opportunity came up three, four years ago. Someone was selling, and they wanted to keep it within, you know, the group to offer it to somebody. First I got approached to ask if I was interested in purchasing it. And, you know, I had, like, just started my first big job out of college. Didn't have a ton of money saved up. But then I asked my brother, hey, do you want to go in on it with me? Because, you know, this might not come up in the future. And he decided to go in on it with me. We bought it for $80,000. It's, again, very rustic. It's more of a glorified wooden tent at the moment, built, like, 100 years ago. There's technically, electricity, no running water, so there's a lot of work that needs to be done. So we bought it, put down $20,000. We're financing the rest, seller financing, at, I think, 5% interest rate. So we're paying about $650 a month total on it combined. We're spreading that over 10 years, and we're, I think, like a year and a half into the payments.

[Brian Preston]

Does that pay it off or is that balloon it. Does it balloon in 10 years?

[Joey]

No, no. That is even. Yeah. Evenly amortized over the 10 years. So, yeah, if we pay the 650 bucks a month for the next eight and a half years, it'll be paid off.

[Bo Hansen]

Okay, so the idea is one day this will be a place where your kids spend time.

[Joey]

Exactly. Yeah. And I didn't want to miss out on this opportunity that I just didn't think was going to come up again, even though it felt like a very premature move when I made it, especially when I made it, because my accounts, my Roths and everything were not funded to where they are today at that point.

[Brian Preston]

So it didn't hurt you. It doesn't sound like.

[Joey]

I don't.

[Brian Preston]

You've obviously maxing out your Roth.

[Bo Hansen]

It was risky, but it didn't bite you when you did.

[Brian Preston]

Exactly.

[Joey]

I think there's still enough margin to, you know, those payments. I'm only paying for half of it. And then there's. My brother and I are aligned on, you know, there's a ton of things we could do to the cabin. And right now it's more. More of a campsite. And you know, it's still usable in its current state and it's more of a long term thing. We'll get to those.

[Brian Preston]

I have a few quick questions.

[Joey]

Yes?

[Brian Preston]

Any chance you're inheriting the family cabin that's down the street?

[Bo Hansen]

The one that's been in the family for 100 years?

[Brian Preston]

Yeah, the one I thought you were telling us about originally.

[Joey]

The issue is it's because my great great grandfather bought it. So now it's split a bunch of relatives.

[Brian Preston]

So there's a good chance you won't have access to go back and use it as much as you wanted to.

[Joey]

Maybe use it, but not exclusively.

[Brian Preston]

That's a solid answer. The next question is, what does your soon to be wife think of this?

[Leah]

You know, I think Joey made this purchase when we were like kind of freshly dating and he was like 21, 22. And I was like, really? You're gonna buy a cabin right now? But being able to go up there with the family and, you know, experience.

[Brian Preston]

Have you been to the cabin location?

[Joey]

Yeah, I was just there a few weeks.

[Leah]

Yeah. Yes, I will say the only bad thing is the mosquitoes, but it's a gorgeous place.

[Bo Hansen]

No running water sounds like a bad thing too. You said the mosquitoes are the only bad thing. The no running water sounds not great.

[Leah]

Well, there's a creek that runs right by it, so you know, there is literally running it.

[Joey]

Hook up a pump.

[Brian Preston]

Definitely marry this one.

[Bo Hansen]

Yeah. Go ahead and lock this down.

[Brian Preston]

Go ahead and lock this down. If running water is not the issue, then you.

[Leah]

I saw how important this was to him and his family and it made more sense over time once I could actually see it for myself. But like totally, like months into dating and him buying a cabin, I'm like, whoa, I gotta think about. No, I'm just kidding.

[Brian Preston]

And do you. From a blossoming memory standpoint, does this seem like something that'll be fun for you to do with Yalls future kids as well?

[Leah]

Absolutely. Like, I had so many wonderful memories going to like Lake Tahoe with my parents growing up and you know, having the privilege of like a secondary space to enjoy summer is like awesome. So I'm here for it. It's gonna. I'm. I don't think we have the cash to invest in those renovations immediately, but I'm Glad that we're all on the same page. That's gonna take some time.

[Joey]

And yeah, we're not in any expectations.

[Brian Preston]

That's the next question is what's your brother's timeline on renovating and building this cabin up? Similar.

[Joey]

We're both not in a rush.

[Brian Preston]

Okay, so you're not in a rush. Y' all are on the same page. Do you foresee a problem? Cause there will fast forward 10 years. You're just rocking and rolling. I mean based upon your net worth statement, you're like, you know what, we got a few kids now. I want to start making those awesome memories. Is there going to be any drama with you and your brother when you want to start throwing money at it or is he going to not be. Is it going to be weird? Is he going to be able to financially do it when you want to do it?

[Joey]

Yeah, I mean I hope not because we are.

[Brian Preston]

You hope he will or hope not?

[Joey]

There won't be any dramas. There won't be any drama. Yeah, I mean there hasn't been thus far and I was a little weary about, you know, going into anything 50, 50 with somebody, you know, that you're not like married to. And so we're. That's something we'll have to approach.

[Brian Preston]

That's the biggest advice I could give you is go ahead while it's on the scale of life concerns. This is like at the bottom. As long as you just have the carry cost. Go ahead and have a conversation with your brother. Be like, hey, when do you think? I just want to kind of. We're just trying to figure out what the next 10 years looks like. I want to make sure we don't have some weirdness down the road. Y' all figure out the push pull system that's going to create the, the action element on this. There's nothing wrong with just because land is. It's one of those great lock ins of value and then.

[Joey]

Exactly.

[Brian Preston]

This sounds like it's going to have a scarcity of access to it in the anyway. So I see nothing wrong with it as long as you've had good communication with what the expectations are. Because you don't want to get into a weird dynamic where you want to renovate this cabin but your brother doesn't and, or, or exactly.

[Joey]

Or one of us, you know, has the money.

[Brian Preston]

So go ahead and have those conversations while it's really low on the priority Sc.

[Bo Hansen]

I am curious though because you said right now you guys are separate finances. Like you are, you are separate finances.

[Brian Preston]

I want to hear about that.

[Bo Hansen]

What's going to happen? Fast forward to July. What happens? How does that work? What's that look like? And even I think it'd be valuable for some couples out there who are perhaps dating right now or engaged. How do you guys navigate finances now and what will change when you get married?

[Leah]

I want to start off by saying, like, first of all, Joey really impressed me because he's a financial mutant by nature for sure. But I feel like he's always been very generous when we first started. Not when we only first started dating. But I feel like the way you handle money and the way you, of course, treat me, and we enjoy our money, but I also respect the fact that you prioritize saving and you encourage me to do the same in a respectful way. And just like, learning that about you has made me feel very much comfortable with the idea of combining finances during marriage. Especially if it's like, I don't want to feel any sort of anxiety if I. Not that I have. Like, I don't feel like we don't spend a lot on material.

[Joey]

I mean, I think we're both aware of what we spend money on, and we don't really spend on extravagant things and haven't really had much conflict over money. There's a lot of venmos happening, you know, and all that stuff. Just because.

[Bo Hansen]

Is that what you do? You square up via Venmo?

[Joey]

Yeah, yeah. I mean, just with rent and utility, like, the big stuff, you know, and then the other stuff.

[Bo Hansen]

Y' all split everything 50, 50? Is that the way it works for the big stuff?

[Joey]

And then, you know, smaller things, it's just we pick things up here and there.

[Leah]

Yeah, but it's never. I don't want to feel anxiety if we go. Like, if I go buy a shirt, for example, it's like, oh, I see $40 on the account, you know? Like, I feel like that's not going to be a concern going into.

[Bo Hansen]

Do either one of you use some sort of budget tracking? Are you using Monarch or something like that to see the transactions?

[Leah]

No, no.

[Bo Hansen]

When you combine, will you. Will you see all the transactions that she has and you see all the transactions that he have? Like, when that happens?

[Joey]

Yeah, I mean, I imagine we'll have a joint checking account and then separate credit cards that you can spend what you need to spend. Okay, but how are you gonna pay for those credit cards from the joint account? Okay.

[Bo Hansen]

Okay.

[Joey]

I think. I mean, as long as you just

[Bo Hansen]

said spend what you want to spend. So, like, what if this month Is like I spent like a thousand on mine, but you spent like 2,000 on yours. We gotta.

[Leah]

Most of the time it's like eating out together. I feel like that's our crutch is just food right now. But I feel like I trust you with your money. Hopefully you can say the same about me. But not too concerned about the transactions.

[Joey]

I'm not too concerned, but I mean, it's obviously hard to say until you get there, right? I guess.

[Leah]

We went to Costco for 500 bucks last week.

[Joey]

Who did go.

[Bo Hansen]

Who did go to Costco for 500?

[Leah]

I know you went without me.

[Bo Hansen]

That's every dramatic as this show gets right here.

[Joey]

We like Costco. It's easy to do.

[Brian Preston]

He probably bought it probably because every time I go to Costco, I feel like I come home with some pillows, some mixed nuts, and then I end up with like a case of like some flavored drink that I didn't know I needed.

[Bo Hansen]

Let me ask you this. So we were asking you questions about, like, combined. Are there questions that we could answer as two guys who've kind of gone through that threshold? Anything that you are curious about that we could speak to that might be valuable as you guys have your conversations moving forward?

[Leah]

I guess, going into marriage, do you have any advice in terms of approaching finances? Because I feel like we have pretty stable, you know, relationship with money, similar values going into this. But of course, like, life ebbs and flows. There's going to be big expenses here and there. Of course, like, there's going to be a purchase made where we're like, what the heck? Why did you do that? So would you recommend, you know, what if we have a personal savings that, you know, we can make our fund purchase on, or how could we mitigate or prevent future conflict with money like going into marriage?

[Bo Hansen]

I'd like to speak to the what the heck Question, because my wife and I never really had conflict over finances. However, we had a very different understanding of what was justifiable expenses, what were not justifiable expenses, and where I struggled early on and sweetheart, I love you, this was on me is I did not assign enough value to the things that she valued because I didn't value those things. So when she'd spend X number of dollars on X thing, in my mind, it was wasteful. And I'd see the transaction come through and I'd, you know, we'd have our miscellaneous bucket or a home furnishings bucket, and I'd categorize it in the app and I'd be like, hey, hey, you're blowing through. Then she's like, yeah, I'm blowing through it because I care about the shampoo that I use. I'm not gonna use Suave. I care about.

[Joey]

Not Kirkland.

[Brian Preston]

The throat.

[Bo Hansen]

Right, Right. And so I think having an understanding around, because what it felt like early on in my marriage is that I began micromanaging. Hey, why are you doing this? Why did you do this at Target? Why'd you buy this. Hey, why'd you go buy this thing at Whole Foods when we could have gone to Walmart to get there or whatever the thing is. And we had to have like a very sincere conversation on, hey, just because you don't think this is important, just because you don't think this is valuable doesn't mean that it's not. It means that that's your opinion. And if I feel differently, we need to figure out how to reconcile that. The earlier you can have those conversations, in my opinion, the more valuable, because what happens is, at least in my case, new Marriage in Love, all the wonderful stuff. You don't want to say anything, so you just let these thoughts just fester and they get. And then you start making these, like, passive aggressive comments and you start. And it just turns into this nasty thing that if you can communicate on the early end, I think you can avoid a ton of that.

[Brian Preston]

Let me give you all some homework. Beau got married on June 9th of 2012, and we've been creating content for 20 years now, if you can believe it. And we're. We. It's all out there. So we're crazy. So you can hear this thing from the amateur beginning all the way through where we are now. And right around that June of 2012 period, I did a show with Beau where we interviewed him on what he thought was going to happen with his upcoming wedding. So this was either in May, and it's just probably going to be entertaining for anybody. Maybe we can even help everybody out by giving. Giving.

[Bo Hansen]

Oh, my goodness.

[Brian Preston]

No. We did. We did a One year episode. Oh, you did a One year update. We did a one year update. Go listen to the one before. Before his marriage. And I want you to listen the One Year later episode. And you're going to hear a lot of growing up that went into it. Now, Bo's been married over a decade now, so he's. He's a. He's a veteran. You're hearing us at veteran level status here on this. But I think it would be good for anybody who's struggling, because I remember Beau and I was Trying to sit here. Was it $40?

[Leah]

$40?

[Brian Preston]

40. Bo said any transaction that she spent over $40. And I can remember that's why. That's why he brought it up is because I was like, bo, her shampoo cost more than $40.

[Bo Hansen]

He was.

[Brian Preston]

He's like, no, it's $40 a bob. That's three years worth of shampoo. You can tell I. This was still. This had a. Not a scab on it. It's probably got a scar on it at this point because we're old enough that it's. But that's why he brought up the whole suave thing is because I told him on that show that her shampoo is going to cost $40. And he was like, no, she can go suave, just like I do or whatever else. So I think if you go, listen, that there is a growing element that. Because what you. Any couple has to do is. And y' all have already done a great job, y' all have already probably graduated beyond a budgeting. I mean, y' all don't even have to. Really, really. You just answered it. Y' all aren't using Monarch or anything like that, because your money is going where it's supposed to through automated savings. So you don't feel any pressure about doing budgets.

[Joey]

Exactly. And I think that's one of the reasons, like, why this hasn't been an issue yet, because, I mean, we have currently, we have the margin.

[Brian Preston]

Y' all been blessed that y' all make enough money, that money just goes where it needs to. There might be a future to where y' all have to do. When you're doing the family planning, where y' all say, you know what, we're going to take a few years where maybe we live off one income, and we got to figure out how that's to going. I encourage you, when that happens, do a budget. You know, do something where you're actually tracking. You're already kind of, you know, doing it. But there's tools that make it easier. But then once you get to that point, what I'm trying to help you do, take the power out of the money is because so many people. It's a struggle when, you know, you put value to what people are spending. And then my money is my money, her money is her money. And it creates these weird dynamics to where. Where you don't want to get a situation where. When you'll decide one of you is going to stay home with the child for a while, or children, and then just for a moment in time, you don't want the other person feeling like they're in this situation where you have to go ask the other spouse for the money because then, holy cow, what a weird dynamic that is. So that's why I love that you're already planning, when you cross those thresholds, two become one. Open the joint checking account. Account. Go ahead and redo your direct deposit forms for your employer where they're, they're going right into that joint checking account. So that way it just seems like we are two became one. Our household expenses are one. You know, the good news is the government's already protecting, you know, your Roth IRAs. Those aren't joint Roth IRAs. They're not joint Roth 401ks. I mean they're, they are individually tied to your, you know, there's already some protections on some of that stuff on what you have brought into the marriage. But I love everybody kind of of setting up a joint checking account, setting up maybe a joint brokerage investment account at one of the low cost providers, and then y' all build this thing together. So it's you two in you versus the world.

[Bo Hansen]

I'm excited about the plan we're put together because I'm thinking we're going to be able to build a plan to get you from today to the wedding and then we're going to show you what happens. Okay. Post wedding, what does life look like at a reasonable savings rate for you guys? I do have one clarifying question. You got 20% going your 401k. You said you're maxing your Roth IRA. You said you got 30% going to your 401. Are you also maxing your Roth IRA?

[Leah]

Max.

[Bo Hansen]

Perfect.

[Brian Preston]

Just.

[Joey]

Of course, just to clarify, the 30% you were contributing. 20, 25. But since her teacher paychecks aren't having any investments withheld, that's why we increased it.

[Bo Hansen]

You increased her to get her to 25% gross. Got it. Makes sense. I'm excited to be able to put this together and I don't want to give away what's going to happen, but it's going to be an awesome picture because you guys have done a lot of really great stu early on. And I don't see, I don't see you guys stopping to do that. Brian, what a great conversation with Joey and Leah.

[Brian Preston]

I mean, think about this. What do you get when you get a scientist and an accountant walk into a bar?

[Bo Hansen]

I don't know, Brian, what do you get?

[Brian Preston]

You get a very successful young couple named Joey and Leah. I mean, this is A great time. They got a lot of great stuff going on. And I got to tell you, I'm shocked that the problem we're going to save for them is they over save.

[Bo Hansen]

Yeah, it's not something we often do here.

[Joey]

Right.

[Bo Hansen]

Like we don't often talk to people that are over saving, but they have a lot of big goals coming up. Obviously have a wedding coming up in July, home ownership. They're trying to figure out is that the right move, Is it not the right move? But there's this pressure I feel like they're putting on themselves that they are saving so much. Perhaps it's crowding out some of these other goals that they could be pursuing and could putting, be putting resources to.

[Brian Preston]

Well, they are, they literally are the perfect example of what personal finance is. Personal is, because you just said it with the, with the wedding coming up, they want to know, is homeownership something they ought to consider? Well, how can they have these goals when they're going to be so retirement rich but not have enough margin or leftover to even fund some of these other important things that are coming up?

[Bo Hansen]

Yeah. So when we look at their current savings, it's pretty wild right now. Joey's putting 20% in his 401k and getting a 5% match. Leah is putting 30% into her 401k getting a 4% match, and they're both maxing out the Roth IRA. So with an annual savings of almost $67,000 a year, it puts them at a 34% savings rate, which for two young folks at their age is a super heavy big time savings rate that I don't think is absolutely necessary.

[Brian Preston]

Well, and they also know they have a time, certain wedding coming. And when you look at the funding of that, you're like, wait a minute, how are we so wealthy but cash poor?

[Bo Hansen]

Yeah. And I think what's happened is they know that saving is a good thing. They know that Roth is a good thing. And so they're doing, doing all these noble good things. But perhaps, and I say this lightly, maybe there is a little too much of a good thing going on for them. Because when we thought about, all right, if we were going to triage, if we were going to adjust this, what would we think about, well, we'd say, okay, well what if we reverse engineered to figure out what would it take for them to be able to hit a 25% savings rate as opposed to 34? Well, for them, what that would look like. Again, if they're going to follow the financial order of operations. Max out Roth IRA 7500. Max out Roth IRA 7500. And then we said, hey, let's back down both of their 401k contributions. Let's take Joey's down to 14% and let's take Leah's down to 15%.

[Brian Preston]

And instead of just not only backing it down, we flipped the script and actually turned it into traditional. They're in a high tax situation even though they're young. I get it. And there's a lot of pressure when you're young. Do Roth. And we love it too, because you get more time for compounding growth. But at the tax rates that they're currently paying, this could actually save them over $2,000 a month.

[Bo Hansen]

Yeah, that's right. Back down. Those contributions plus the tax savings is going to end up with Almost an additional $25,000 a year. $2,000 a month they're going to be able to save. And what's great is the math works out wonderfully. We know that right now they know that their cash is right about $7,000 into this wedding fund. And we asked them, okay, how much do you think you're going to have to spend the wedding? And they said, I don't know, maybe something like $30,000 somewhere in that ballpark. Well, if you just take the timeline from now until next May, June, July, and they have an extra $2,100 a month, if they just took that 2100 and parked it in a high yield savings account between now and then, they would get that wedding fund fully furnished up to $30,000.

[Brian Preston]

Is the term serendipity?

[Bo Hansen]

Yeah, that's a term.

[Brian Preston]

Isn't it kind of amazing that the two is right around $2,100 a month savings they're going to have if they change this from a tax standpoint, you multiply it by the months they have until the wedding, it gets them more target within like a thousand dollars or so.

[Joey]

That's pretty magical.

[Brian Preston]

I almost think it's like a big wedding gift.

[Bo Hansen]

But I know the question they're going to be asking is, okay, guys, well, if we do back this down, if we're not saving at this same clip, what does that ultimately mean long term? Are we actually going to be able to reach our financial goals? And what's amazing is they've done so much heavy lifting and hard work thus far at such a young age at 25 years old with over a $200,000 portfolio portfolio, if they were to just save the 25%, not the 34% they're currently saving. They're on path, on track that by the time they get to 55, they could have almost a $12 million portfolio. By the time they get to 60, almost full retirement age, almost $20 million. So they've done the hard work and heavy lifting where they don't have to be in this hyper save, hyper accumulation mode unless they have some crazy financial goal they haven't told us about, like super, super early retirement retirement, big time fire. And what they've been able to do by building up the pot of money they've done is now they're going to give themselves options and flexibility as they move forward in their life.

[Brian Preston]

Yeah, I think they're definitely on a healthy path for a great retirement. The thing that I did want to circle back on, this house, I could tell that we hit on something. I felt a little guilty because it's usually considered such a noble cause to save for a house. But when they shared what they can rent this three bedroom house for in the Bay Area versus if they had to buy, it just didn't make sense. Oh my gosh. I mean, if we're talking about maximizing the opportunity of wealth building, there's a little bit of disconnect. So I would, I would encourage them. Look, we like homeownership, but in their specific situation, once again, personal finance is very personal. Don't get in any hurry to fund paying for that house well.

[Bo Hansen]

And again, they're just getting married. And so yeah, homeownership may be something that they want to pursue at some point in the future. But I, I think that right now they have enough slack, they have enough margin in the system. Even when they get that wedding fund fully built out and they get married, if they still stick to 25% savings, they're going to have excess liquidity. They can move towards one of these other goals like saving for a house or like doing the family thing or like whatever that thing for them may be. I don't think they have to worry about getting all of it as much as possible into the retirement accounts. I think they're going to appreciate the liquidity.

[Brian Preston]

Joey, Leah, hopefully you feel like we just released the pressure valve on you because y' all can got some big life stuff going on. We want you to enjoy that. Go save for that wedding. Make beautiful memories for that. You're going to be a. Okay Bo. For those who want to come on Making a Millionaire, how do they apply?

[Bo Hansen]

Yeah, if you'd like to be a guest, you can go to moneyguy.com apply. Or if you want to check out any of our tools or free resources, go to moneyguy.comresources I'm your host, Brian

[Brian Preston]

joined by Mr. Bo money got team Out.

[Leah]

The Money Guy show is hosted by Brian Preston and Bo Hansen.

[Bo Hansen]

Brian and Bo are partners with Abound Wealth Management.

[Leah]

Abound Wealth Management is a registered investment

[Bo Hansen]

advisory firm regulated by the securities and Exchange Commission.

[Leah]

In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through Making A Millionaire. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment or legal advice. All investments involve a degree of risk, including the risk of loss. The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.