The Jesse Mecham Show

Jesse examines how the recent panic buying of food, home goods, and other staples highlights the intrinsic value of certain things that we take for granted. When demand for historically safe assets like bonds and gold falls, yet demand for household goods like flour and toilet paper soar, it shines some light on the practical value of things. In short,  you can eat flour, but you can't eat a bar of gold!   In the future, Jesse encourages us to consider saving not only for future expenses and retirement, but also for some staples and basic goods for unexpected times.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Jesse muses on the impact the coronavirus will ultimately have on people and their habits. When society reopens, will people return to their previous habits? Or will they grow, having spent their time in isolation examining themselves and their priorities, their Rule Zero?   Jesse hopes that people do use this time to reflect, to re-examine their life and rediscover their priorities, and, most importantly, write down the wisdom that comes from that process!   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Last week Jesse discussed the importance of Rule #1, giving every dollar a job. Rule one is always important, but in uncertain times like these it takes on renewed significance. Jesse has often talked about the rule before the rule, though, the so-called Rule Zero.   Rule Zero is understanding what's important to you, why you're bothering to give your dollars a job in the first place. At the end of the day, to what end are you budgeting? What's the purpose?   In the wake of the pandemic and economic woes gripping the country, consider whether the answer to Rule Zero has become clearer to you. Perhaps in these times you can find not only the resolve to budget like you've never budgeted before, but also to clarify why you're budgeting in the first place.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

With the world at a standstill due to the COVID-19 pandemic, one thing is certain. We’ve never budgeted at a time like this!   Jesse offers some comforting words in this time of crisis, and reminds us to follow Rule #1: Give Every Dollar A Job. Never stop budgeting. Even if it’s only a week ahead, a day ahead, staying engaged and continually planning will give you the best chance to survive financially in these times, and, eventually, thrive. Budgeting is one area of our lives that we can control, in the midst of so many things we cannot.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

At YNAB there is a document called the Vision Doc, which spells out the “commander’s intent” for the company, how to behave and act on the company’s behalf. Employees must make many decisions on a day to day basis, but with a clear commander’s intent they have the freedom to make those smaller decisions while adhering to the company’s greater goal.   It’s useful to develop the same commander’s intent for your budget. With a clear goal and aim for the budget, it becomes easier to make those small, day to day money decisions that, as we know, can add up to big dollars over the course of a year!   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Jesse reads an excerpt from the book The End of Average by Todd Rose. In the late 1940's the Air Force had a dangerous problem on its hands -- aircraft of all kinds were malfunctioning and crashing at alarming rates. The Air Force brought in scientist  Lt Gilbert S Daniels to diagnose the problem. Daniels discovered that the Air Force had designed cockpits based on thousands of physical measurements taken from its ranks of pilots, then averaged. Daniels ascertained that despite the rigor and breadth of the measurements, not a single active pilot in the Air Force actually matched up with all the averages. In short, the Air Force had designed their planes around an average pilot that didn't actually exist, causing pilots to have trouble controlling their planes.   We can take a lesson from Lt. Daniels discovery when it comes to our budgets. It's tempting to come up with an average for each line item, and compare your budget to someone else's or perhaps even a regional or national "average." Designing your budget around averages may not actually fit your life, and, going back to Episode 420, may leave your budget rigid and inflexible.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

We often talk about the budget as if it’s a noun. Is it “in the budget”? Did you check the budget? When you treat the budget as a noun it takes on a rigid, inflexible quality, like the budget is set on stone tablets.   But what if we thought about “budget” as a verb? As an action, an activity, budgeting becomes a process, a thing which can change and evolve with each iteration.   Jesse discusses the importance of budgeting and not just setting a “budget.” Thanks to Hannah who shared this revelation in her video My 5 YNAB Beginner Mistakes on the YNAB YouTube Channel.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com  

Money is made to spend. We all want something, and that something usually costs money. Some of the “wants” are fleeting desires, spurred by mood or peer pressure or perhaps just a whim. Other “wants” are genuine desires and items or experiences that actually add value to your life.   Whichever it is, Jesse argues that you should wait. Wait before you buy anything, even the genuine wants. For one thing, waiting helps you parse out the genuine from the ephemeral.   Jesse keeps a running list of wants on his phone. If he wants something, he adds it to the list rather than buying it right away. If he still wants it when he checks the list again later, he buys it. Many times, however, he will find things on the list that he hasn’t thought about in a while, and that he really doesn’t want. So the list can act as a simple filter and a sanity check for purchases.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com   Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

There's a cliche in TV and film whenever something bad happens in a crowd of people, inevitably someone in the crowd shouts "why doesn't someone do something!" This is usually the cue for the superhero to enter stage right. We hear this sentiment all the time, not just in bad cinema, but in real life. Anytime a problem reaches a level of widespread concern -- whether it's a local neighborhood issue or a national one -- something must be done about it.   Some problems have no easy answers, and we often forget that inaction is a valid response. The same goes for our budgets! Not every budget problem can be solved right now. Sometimes you don't have the right information, or enough of it, to fix every issue in your budget. That's OK. Sometimes your budget is working just fine, and there's no reason to tinker with it. That's OK too. Don't fix it if it ain't broke!   Whatever your situation, remember doing nothing is still doing something.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com   Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!  

They are prepared for emergencies, for setbacks, for unexpected life changes. In fact emergencies don’t seem to happen as often to them. YNAB’ers are a lucky set, it seems, but maybe there’s more to the truth than a roll of the dice.   Survivorship bias is a logical fallacy in which you focus on a group of people or things that made it past a selection process, without considering those that failed. This bias can lead to a number of erroneous conclusions. In finance, survivorship bias occurs when evaluating the returns of, say, companies in a certain sector of the economy. If you only look at current technology firms, you might look at the technology sector and determine that it radically outperforms the market… but those same returns may look very different if you consider all the technology firms within the same time period that went bankrupt.   Survivorship bias appears everywhere in life, and YNAB’ers are no exception. At first glance it may seem like those in good financial health just didn’t have the same number of setbacks that those in poor financial health did. But maybe it’s not just luck. Maybe those with good financial health stay that way because they budget responsibly.   Sign up for a free 34-day trial of YNAB at www.youneedabudget.com   Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!