How to Spend Your Money with Farnoosh Torabi

Summary: We’re going back to basics. Today we will discuss how to spend your money with Farnoosh Torabi.<br> Some of you are OG LMM listeners, but we gain new listeners every day. For those new to the podcast, we want to spend this month teaching essential money skills everyone must know.<br> Smart Splurges<br> There are certain things that we should splurge on. When we spend more money on things like good food, a good mattress and bedding, and good medical care, we improve all the other aspects of our lives.<br> You can’t function properly if you don’t eat and sleep well. Spending money to see a functional medicine doctor rather than a pill pushing doctor can preserve your quality of life for decades. When the inputs are quality, the outputs will be quality.<br> Time and Money<br> Some people don’t understand that time can be more valuable than money. Do you work 70 hours a week and spend your weekends doing things like cleaning the house, doing the laundry, and mowing the grass?<br> Is that how you want to spend the little bit of free time you have? Some people hate to pay for anything that they can do themselves. Sure if you only work part-time, it doesn’t make sense to pay someone to do those kinds of jobs and you might not have the money anyway.<br> But if you work a lot, have money coming in, and limited leisure time, outsource some of the life’s more mundane tasks. I can never understand why DINK couples don’t at least hire a cleaning person to come in once a week and instead fight over whose turn it is to clean the bathroom.<br> Money Buckets<br> We shouldn’t keep our money in one big pile; it should be kept in individual “money buckets.” One bucket is your long term savings. That money is kept in <a href="https://www.listenmoneymatters.com/401k-loan/">401k’s</a>, IRA’s, and ETF’s like <a href="https://www.listenmoneymatters.com/go/betterment-review-link/">Betterment.</a> Short-term savings, any money you are planning to spend in the next five years, saving for a house, for example, should be kept somewhere safe like a checking or savings account.<br> Money for your monthly expenses is kept in your checking account. Your <a href="https://www.listenmoneymatters.com/importance-emergency-fund/">emergency fund</a> can be kept either an investment account or your checking or savings account, depending on how risk averse you are.<br> Where is my Money Going?<br> Personal Finance 101 is to know where your money is going. The only way to know is to have a <a href="https://www.listenmoneymatters.com/school/budget-like-a-badass/">budget.</a> <a href="https://www.listenmoneymatters.com/go/mint/">Mint</a> is our favorite budgeting tool because it’s free and easy to use. You can break down your <a href="https://www.listenmoneymatters.com/budget-categories/">budget categories</a> as broadly or as narrowly as you want.<br> If you are doing well financially you can keep them broad. “Food” can encompass groceries, work meals, dinners out, and the snacks you bought at the drug store. If you’re struggling to figure out where you money is going, you should break your categories down further.<br> The Right Way Costs More<br> Sometimes extra money spent means less aggravation. Yes, it’s cheaper to fly with stopovers than to fly direct. But how often do you get to go on vacation? If you’re <a href="https://www.listenmoneymatters.com/take-back-vacation/">American</a>, not much. If spending an extra $100 means you get to your destination sooner and less frazzled than if you had done a couple of layovers, isn’t that worth it?<br> And if you’re over six feet tall, fork out for the extra leg room seats while you’ve got your wallet out.<br> Moving is another good example of this. Moving is one of life’s most stressful events, why make it worse by trying to do it yourself or tricking...