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Talking With Your Clients: Spending (Br)

How do you talk with clients about their spending and explain why their current lifestyle directly affects their ability to live comfortably in the future? It’s easy to burn through money—but it’s a difficult conversation for an advisor to tell clients about the pitfalls they need to avoid right now when they’re enjoying living in the moment.

For this episode of the Elementality podcast, we’ve gone into the Dentist Money™ Show archives for an episode about spending. It illustrates how Reese explains to dentists why current spending habits may affect their finances over a lifetime. Many advisors have requested examples for how to talk to clients about the key Elements of financial health. What better way than to hear Reese do it himself?

 


Podcast Transcript

Reese Harper:
My grandpa told me once… He’s probably… I think he’s in his late 90s now.

Ryan Isaac:
I like your grandpa stories, man. 90-year-old farmer. He still works on his farm, doesn’t he?

Reese Harper:
He’s more of a rancher.

Ryan Isaac:
Okay.

Reese Harper:
But he does have a farm in the ranch.

Ryan Isaac:
For us city folk, that seems like the same thing.

Reese Harper:
For you city slickers. So he told me, he said, “It’s sure a lot easier to borrow than it is to pay it back.” He probably said it more like, “It’s easy to borrow it, but it’s really hard to pay it back.” And he probably… He may have cussed there somewhere.

Ryan Isaac:
Like a pig analogy. Something like anatomy of a farm animal in there.

Abby Morton:
Hey, Elementality listeners. We thought we’d mix it up a bit this week. For this episode, we’re going to replay a portion of a Dentist Money Show that was hosted by Reese and co-hosted by Ryan Isaac. Many advisors have asked for examples of how to explain elements to their clients. But what better way than for you to hear Reese himself. This show is titled: Why Dentists Spend Too Much. And while the message is specific to dentists, it covers things you should be telling your clients about burning. For example, how to avoid lifestyle creep, why it’s easy to put the burden of savings on the future and why tracking spending is so important. Enjoy.

Reese Harper:
I think what we wanna talk about today is spending really as kind of a slippery, slow slide. And it’s really sticky to have spending go down. Like you can’t… You don’t lose… Spending does not decline regularly.

Ryan Isaac:
You can make it… No, no it is easy to increase but it’s almost impossible to decrease.

Reese Harper:
Yeah, and it’s just as important to have really accurate spending data in your financial plan as it is to have a really accurate net worth calculation. And so we wanna talk about a few areas today of personal spending that we think will be good reminders for everyone on how they need to be able to focus on this issue.

Ryan Isaac:
Or reasons why… The question, do I spend too much money? The answer’s yes.

Reese Harper:
Yeah.

Ryan Isaac:
And why? So why? What’s happening? Reason number one is, we don’t downgrade stuff.

Reese Harper:
That’s a good point.

Ryan Isaac:
We see that all the time. And all of us, everyone listening, everyone in this room can acknowledge something in our lives that… I mean, it’s crept up. It’s gotten better, higher quality. Maybe it’s food. Maybe it’s clothing. Maybe it’s cars, housing. Maybe it’s all of it, theater tickets.

Reese Harper:
Justin’s golfing habits.

Ryan Isaac:
Yeah, the golfers. Any golfer listening is like, “Yeah, I definitely… I have spent more money on clubs and dues as time has gone on.”

Reese Harper:
And I’m at a country club but I’m not at the country club.

Ryan Isaac:
Yeah, but well, I mean… Okay, so downgrade, Justin. Get the clubs that cost half as much as the ones that you have right now, you know.

Justin Copier:
Well, the problem is, when you get the country club membership, you gotta get all the other things that go along with the country club membership, like the car and the nicer clubs and the nicer clothes and…

Ryan Isaac:
You better look good.

Reese Harper:
So Ryan’s clubs wouldn’t be good to bring to the country club.

Justin Copier:
I mean…

Ryan Isaac:
Trick question. Don’t own any. [laughter]

Justin Copier:
You have to have a lot of self-confidence to bring Ryan’s clubs to your country club.

Ryan Isaac:
It’s so funny man. It’s so true. But there’s just so many things. The point is that we don’t downgrade. One good example is housing. We have an interesting perspective. Because we get to see people at the beginning of their… Just getting out of school, getting the first house that they’re likely not gonna stay in. We see the people in mid-career getting their dream home and all the stuff they always wanted. And then we see the people at the end of career… You just eat some popcorn. I’ll just talk, you eat popcorn.

Reese Harper:
Thank you.

Ryan Isaac:
We see people at the end of career that are in the huge house, everyone’s gone. There’s landscaping maintenance. There’s high utilities. There’s furniture costs, repairs, all that kind of stuff. And the thought is always, “When I’m older and my kids are gone, and I don’t need all this room, I’ll totally downgrade. I’ll totally downgrade.” But what really happens is you spend all the time paying off that mortgage. You have all the equity in the house. And then do people downgrade? Do people get downgraded houses in retirement just because now the kids are gone and they don’t need the space anymore?

Reese Harper:
Well, usually they might be smaller but they’re pretty nice. When they downgrade they’re really nice…

Ryan Isaac:
They don’t downgrade quality, is the point.

Reese Harper:
Yeah.

Ryan Isaac:
We know a fair amount of people in retirement that are still in very, very large homes that they won’t leave. They just won’t leave.

Reese Harper:
Yeah, and a lot of it has to do with the fact that you’ve got kids and grandkids that have grown up and they’re visiting and you wanna have that space and a lot of people don’t end up sizing down their properties.

Ryan Isaac:
They don’t size down. And the ones that do size down if you have, let’s say, a half a million dollar house that you live in and it’s really big, you just go get a half a million dollar house that’s small and super, really nice. Nicer neighborhood. Nicer furnishings. Nicer finish, right?

Reese Harper:
Yeah, and having gone through some of these decisions the hard way, I think that the thing I’ve learned is that there isn’t anything that you… There is always something that you probably shouldn’t buy. There’s always something that you probably shouldn’t spend your money on, even if you can afford it. Even if you can afford it, there’s probably a line… There’s a line for everyone. And the line that you cross is different based on your income, your net worth, your liquidity, your career trajectory, like what you believe will happen and kind of confidently know will happen. I think there’s a difference between hoping and dreaming about the future and being realistic about it. And so I think that one of the things that I don’t want people to feel like is that there isn’t room for splurging and enjoying life. I’m not gonna give up my season tickets to my theater tickets. I’m sorry, Ryan, even though…

Ryan Isaac:
No, I don’t think you should.

Reese Harper:
And I probably shouldn’t, you know. ‘Cause that’s how you get your tickets.

Ryan Isaac:
‘Cause that’s how I get mine too. So I totally don’t think you should give them up.

Reese Harper:
Yeah. And isn’t that funny? We know it happens with all of our friends… All of our friends have something that we use, that we love using.

Ryan Isaac:
Something like the boat.

Reese Harper:
It’s like, “Yeah, I think that’s a good idea for you. I’m glad you have it.”

Ryan Isaac:
In general, you should never buy a boat. Total waste of money. But my buddies who take me all the time, great investment. They should totally keep the boat.

Reese Harper:
Yeah, love that. I love that they’ve done that. Such great memories. Great memories.

Ryan Isaac:
Yeah.

Reese Harper:
So, I think the point here is that if you’re not constantly evaluating whether you can keep up with this threshold you’re gonna get to, for example, one of the really big thresholds that end up hurting people is can you afford two houses? I think that’s one where there’s a lot of people that pick up that second home because they want a cabin or they want a vacation property, they don’t want to stay and move from different resorts.

Ryan Isaac:
They wanna create memories.

Reese Harper:
They wanna create memories in a place. Nothing against that. Some people can afford it and make it worth.

Ryan Isaac:
I’ve got great memories because we had a family cabin. It’s great.

Reese Harper:
Yeah. But that’s like a level… That’s an example of a level you move to that you can’t go back from. Take away the family cabin from everyone, and you’re like the worst person in the world.

Ryan Isaac:
Yeah.

Reese Harper:
Right? You have to be ready to move to that level and make sure that you… That that fits your net worth, your income, your budget, and your savings, and everything is gonna be fine. I think cars are another great example, right?

Ryan Isaac:
Yeah, we listed that.

Reese Harper:
Yeah.

Ryan Isaac:
Well, just think of the car you drive now compared to the car you drove 10 years ago. Likely, it’s better. I’ve met a few people who were like, they got so sick of… I mean, there are some people that are like, “I don’t even care anymore.”

Reese Harper:
That’s an easier one to ditch on though. Cars are an easy… It’s hard, but if you were in a bind… I know a few people who bail on it but housing is a little harder to bail on, but cars are still hard. If you’ve ever driven a car that is silent on the freeway…

Ryan Isaac:
Has nice Italian, comfortable seats.

Reese Harper:
Really quiet, great tech, great AC.

Ryan Isaac:
Powerful engine.

Reese Harper:
Really comfortable seats, accelerates nice. And then you go to something that’s…

Ryan Isaac:
Loud and noisy.

Reese Harper:
Takes forever to heat up and the AC doesn’t work good, and brings in all this nasty air somehow, and you’re like, “How is this getting inside my car?”

Ryan Isaac:
The easy thing to justify with cars though too is that it’s literally… If you have a payment, it’s like a few hundred dollars of difference [chuckle] between that one and the nice one, it’s not that much.

Reese Harper:
Yeah.

Ryan Isaac:
But it’s tough. It’s easier to go, “It’s 400 bucks, man. Let’s just get the nicer car, it’s totally worth it. It’s hard to go back from it.”

Reese Harper:
Yeah. And once you hit that level, it’s difficult. And so people usually end up hitting a point where they just migrate sideways on cars, but they usually don’t downgrade. So that’s a good one. Food, groceries, restaurants, we’ve talked about that.

Ryan Isaac:
Yeah.

Reese Harper:
It really is hard to… Once you’re used to eating nice food, you just have to be conscious of like, hey, spending hundreds of dollars on a meal isn’t… That’s not a normal thing. You don’t have to do that every time you go. You don’t have to spend hundreds of dollars for two people. Now, does that happen…

Ryan Isaac:
Is this self-reflection?

Reese Harper:
That happens for me a lot, and I’m always like, where are the days when my ticket…

Ryan Isaac:
Was like 30 bucks.

Reese Harper:
Was not three digits? Where are those days?

Ryan Isaac:
Yeah. There was a decimal after two.

Reese Harper:
Yeah, mostly because you guys always come… Everyone comes with me.

Ryan Isaac:
So true.

Reese Harper:
And then expects me to pay for everything, Jeff.

Ryan Isaac:
Hey, you are a very…

Reese Harper:
Just kidding.

Ryan Isaac:
You have an incredible sense of finding good food and you’re a very generous fooder.

Reese Harper:
I feel bad I can’t have a good meal while Jeff’s eating asparagus.

Ryan Isaac:
Yeah. Shoutout to asparagus.

Reese Harper:
Alright. Thank you, Justin, you can cut that out. Just don’t get Jeff involved here.

Ryan Isaac:
What about other, like there’s a queue… We were talking the other day, he was like, “Think about your budget in the line item, even the small stuff, the little incidental lifestyle things that we pay for.” Who has Netflix? Like $10 to Spotify every month is the best $10 I spend. I use Spotify more than any other service I’ve ever…

Reese Harper:
Apple Music.

Ryan Isaac:
Really? I’m a Spotify guy. Really?

Reese Harper:
I use it. I just enjoy it.

Ryan Isaac:
Okay, that’s fair. Think about how many little things do you pay for in your personal little P&L that if you had to get rid of it, you’d kinda be like, “I don’t really wanna… I don’t wanna go without unlimited playlist ever again in my whole life.”

Reese Harper:
My Pluralsight membership.

Ryan Isaac:
Pluralsight? Really?

Reese Harper:
Yeah. My Pluralsight. I get to learn new things all the time. When I’m just randomly sitting there in bed, I take a class on UX or maybe I’ll read up on the latest charcoal drafting designs or learn how to type certain mathematical formulas into a spreadsheet. I like this stuff.

Ryan Isaac:
Okay.

Reese Harper:
So, I can’t give it up though ’cause I’ve had it now, I feel like I have a little teacher…

Ryan Isaac:
You’ve got something.

Reese Harper:
Always by the side of me. I’m like, “I don’t know that.” So, it’s enjoyable, but I look at it and it…

Ryan Isaac:
A gym membership.

Reese Harper:
Yes.

Ryan Isaac:
There’s a lot of little things, too, that would just be hard to… And so the point of this, all this, is it’s hard to downgrade this stuff, it’s really difficult to downgrade this stuff.

Reese Harper:
Time to discuss personal spending problems number two. Saying no is really hard to do.

Ryan Isaac:
Yep.

Reese Harper:
That’s what I would summarize the second one at. The more money you make, the more people just start to show up.

Ryan Isaac:
There’s more stuff to buy.

Reese Harper:
To sell you stuff, and bring you things.

Ryan Isaac:
It’s amazing how many…

Reese Harper:
And opportunities.

Ryan Isaac:
There’s so many things to buy when you have higher income.

Reese Harper:
It’s like, how do I say no to all these requests? And the second thing that starts to come is family members start to ask more questions too. That’s a hard one. Saying no to salespeople is really hard, but saying no to family members is hard too.

Ryan Isaac:
Yeah. We talked about this in Episode 19 of The Dentist Money Show. It was called “Will Your Personality Cost You a Better Retirement?” There’s a personality characteristic called, if you wanna explain it a little bit, the family steward.

Reese Harper:
Yeah. The family steward, you can read up on it in Episode 19, listen up on it, but it basically is someone who everything… Someone who has a high propensity to help their family or wants to help their family more than…

Ryan Isaac:
At the expense of other things sometimes.

Reese Harper:
Anything else. At the expense of their own personal finances.

Ryan Isaac:
We have met people who have higher savings rates into kids college funds than their own retirement.

Reese Harper:
Yeah. Yeah, and for a short, short period of time that might be okay, but it shouldn’t…

Ryan Isaac:
Sometimes those are the personalities too. And even more than thought out planning for a family member, sometimes it can just be cleaning up messes for family members. Some people just have bleeding hearts and they happen to have good incomes too, and they end up paying for things that maybe hurt them a little bit, it’s not healthy and that’s another reason why spending can be difficult and go up without really knowing it’s gonna go up, it’s hard to say no to family.

Reese Harper:
Yeah, I think it’s hard to say no to yourself sometimes that’s probably the hardest one. ‘Cause I think everyone wants to get rewarded for the hard work that they put into their lives, and sometimes that results in vacations, cars, houses, shopping, just things that we want. I can think of 30 things I want right now that I can’t buy, and I’m sure everyone can think of those same things.

Ryan Isaac:
Yeah, there’s one on my mind.

Reese Harper:
Like, well, yeah, I do want that and I want this and I want that, and ultimately there will never be a point in your life where you don’t struggle with those emotions, there’s not a moment when it’s like, “I finally have all the stuff that I wanted.”

Ryan Isaac:
No, it’s funny, I think about this a lot, if you just compare where you’re at, most people to where you were 10 years ago, you have most of the stuff, the stuff in life that you thought 10 years ago you always wanted, and in 10 years, you’ll probably think the same thing, but it doesn’t really change much.

Reese Harper:
Yeah, I think it’s just… This is just a good checkpoint to kinda say, I think if you’re not saying no to things that you want often enough, you’re going to find yourself being… You’re gonna find yourself over spending so long that you’re just out of cash and liquidity, and your working life gets extended, and I think it’s really just about peace of mind every day knowing that you have stability. That’s an important aspect of this.

Ryan Isaac:
I was just gonna say too, just for a little context, I think it’s easy for everybody to get into a trap of thinking about people who make more money and think like, “Well, they probably don’t struggle with wanting stuff they can’t have,” or “They probably don’t struggle with overspending, ’cause there’s just so much money there.” But I would just give… And I know that’s a common feeling, everyone feels that way, but I would just kinda give people the context that even very, very high income people, like seven-figure high-income people, still over-spend, they still spend more than they should, even though the money is just rolling in or, there’s still things that they can’t buy that bothers them, that they still want. It’s kind of what you were saying, there’s not a limit, there’s not an income limit where you get to be like, now it doesn’t matter what I spend, and there’s no… And I can… Everything’s fine.

Reese Harper:
Yeah, I’ll give you an example of this happened to me this week, I was talking to somebody and they were frustrated about the fact that they couldn’t afford to buy this $5 million boat on their own, it’s a boat that you live on in this really nice lake in a certain part of the country, and you…

Ryan Isaac:
It’s big enough.

Reese Harper:
You live in this boat and… It’s a vacation boat, it’s a vacation boat that can only be used like six months out of the year based on the weather of this lake, and this boat was costing $5 million and this person was frustrated they had to share it with four other people, and they’re just mad that they only get like a fourth of the year, a fourth of the season in this $5 million boat.

Ryan Isaac:
It’s pretty frustrating.

Reese Harper:
Yeah, it’s like… That’s the example of where you get like… You know, and I’m just…

Ryan Isaac:
Some people are like I want air conditioning in my car.

Reese Harper:
Yeah, like…

Ryan Isaac:
Remember in the student days, I don’t wanna share.

Reese Harper:
One of my big things I’m sure a lot of people listening to this probably already have this item, I like want a boat that is a fraction of the cost of this like life mansion boat. And I’m just hearing the story and the person’s telling it to me like we’re peers, like, you know…

Ryan Isaac:
You get it, you know how that goes.

Reese Harper:
You get it, dude.

Ryan Isaac:
You know how frustrating that is. Like… Yeah.

Reese Harper:
And I know that like people that I’m friends with, probably people in this room, I know I’ve said stuff about my own finances where everyone else is looking at me like, “Bro, I wish I had your problems.”

Ryan Isaac:
I don’t get that.

Reese Harper:
It’s a waterfall of… It’s all relative, and we never will have enough stuff to keep us totally happy unless that stuff isn’t where we get our happiness from, and it’s okay to want things. And I think that’s a good… It’s good to have those goals to look forward to, like I’m working my tail off every day so that I can have that vacation or I can get that home, or I can get that boat one day, or I can have that kind of lifestyle that I want, I want that country club membership, these are good goals to shoot for.

Ryan Isaac:
Yeah, I’m a big fan of that. I mean, I’m totally a big fan of… You gotta enjoy some of it now. The whole point of financial planning isn’t to wait till you’re 70 to finally do something fun in life.

Reese Harper:
No. No.

Ryan Isaac:
It’s so lame, that’s so boring. It’s not how it works.

Reese Harper:
Well, and when you’re between 60 and 80, at the point you’re gonna slow down, you’re not really… It’s a different phase of life… You’re moving at a different pace. Your life is definitely not as hectic as it used to be, some of our clients are probably more active in their 70s and 80s than I will be in my 50s okay, but ultimately, I think the point we’re making is when you want stuff and you really want it, it’s not okay to accelerate the timeframe that you get things by leveraging yourself, by borrowing, by living too much in debt with too little cash and just using credit to get everything you want, and so there really is an unlimited way… There’s an unlimited like amount of money that you can borrow to buy things if you really want to, and I was…

Ryan Isaac:
Which is kind of the third point that it’s so much easier to get stuff now because of that, and then just worry about… It’s so easy to just be like, my future income will handle this payment later, I’m getting it now.

Reese Harper:
Yeah, like I’m gonna make good money. So I’ll figure it out later.

Ryan Isaac:
Yes.

Reese Harper:
My grandpa told me once, he’s probably… I think he’s in his late 90s now.

Ryan Isaac:
I like your grandpa stories man, 90-year-old farmer, he still works on his farm, doesn’t he?

Reese Harper:
He’s more of a rancher, but he does have a farm in the ranch.

Ryan Isaac:
For us city folk that seems like the same thing.

Reese Harper:
For you city slickers. So he told me, he said, “It’s sure a lot easier to borrow than it is to pay it back,” he probably said it more like it’s easy to borrow but it’s real hard to pay it back. And he probably he may have cussed there somewhere.

Ryan Isaac:
Yeah, like a pig analogy, some anatomy of a farm animal in there.

Reese Harper:
Yeah, but the point was, it’s like, “Why buy the cow?”

Ryan Isaac:
Yeah. You can milk a cow with three udders, but you sure can’t… Yeah. You’re like, “Okay, it’s debt. Right? Debt.”

Reese Harper:
So, what he was saying was it’s just really easy to borrow it, it’s easy to borrow, but paying it back is always frustrating. And I’ve been in that situation before where everyone listening to this is like, yeah, like a 15-year amortization schedule or a 10 year loan, a 30-year mortgage, like a 20-year loan, even a seven-year loan or a five-year loan on equipment, it’s like… I got it really fast, I got the thing that I wanted really quickly, and I gotta use it right away, but within a couple of weeks, it wasn’t that cool anymore, and then I had to spend seven years paying for something…

Ryan Isaac:
Paying the thing.

Reese Harper:
I didn’t really like, after a while I didn’t really like it. I could say a house kind of gets to that point from a lot of people, but that might be the only thing that you’re like, “Oh, I gotta… ”

Ryan Isaac:
You gotta…

Reese Harper:
But yeah, I still have people that… They get over-leveraged and they look back and go, “I’m still paying for this thing, and I don’t know if I really wanted it, maybe I overdid it.”

Ryan Isaac:
It’s highly likely you need to get a mortgage for a house.

Reese Harper:
Yes.

Ryan Isaac:
That’s highly likely. But you still can get too much house where at first you’re like, “No, that’s totally worth the extra debt, that extra 3000 square feet for sure.”

Reese Harper:
Paying it back is hard, it’s just painful.

Ryan Isaac:
Yeah, you never visit that west wing of the house after you’ve bought.

Reese Harper:
Yeah, you and me were on a mountain bike ride yesterday in the top of the hills with Queue, and we saw a house that is probably like 25,000 square feet.

Ryan Isaac:
There’s a few of them over there.

Reese Harper:
And we knew the original buyer/construction owner of this home, and we were like, “They didn’t even visit like most of that house.”

Ryan Isaac:
You don’t even spend time in it.

Reese Harper:
Most of that house.

Ryan Isaac:
I feel that way now and my house isn’t a super big house. And it is, you can over-extend yourself. So there’s probably things that are worth financing that you have to at some point… We don’t tell our clients to pay cash for everything they ever have to buy in a practice over 30 years.

Reese Harper:
There’s a lot of things worth financing.

Ryan Isaac:
Yeah, there’s things in the business, if you’re gonna build out a space that’s gonna cost you $300,000, it’s probably worth getting easy, cheap financing that the dentists can get so easily, versus ripping 300 grand out of your investment accounts.

Reese Harper:
And we’re not… I don’t know that there’s a lot of examples we can give of like, “You know what stuff you shouldn’t borrow money for.”

Ryan Isaac:
Don’t borrow for a couch.

Reese Harper:
But you know stuff… We don’t even need to list the things.

Ryan Isaac:
I said couch, but don’t list them.

Reese Harper:
We don’t need to list the things, ’cause you know what things you should not be borrowing money for.

0:22:29.3 RI: You could feel it in your gut.

Reese Harper:
The more nuanced point here is that you don’t need to borrow as much as you think you do for the things that you want, that excess that you might choose to have in that one area, it’s going to come at the expense of another area in your life, and that’s okay. You just need to make sure that you’re not able to splurge in all of the areas that you would ideally like to, ’cause an excess in one area has to come at the cost of another. So because I have my theater tickets, I still drive a Chevy truck. Alright? I still drive a Chevy truck and it’s not the best truck in the world, I would have rather had…

Ryan Isaac:
You bargain shopped it.

Reese Harper:
I could have had a truck that would have cost me another $30,000 or $40,000, but I spent less money on my truck because…

Ryan Isaac:
You had that theatre box seat staring you in the face. So let’s recap then. Do I spend too much money? Maybe, probably, yes. One reason could be, we don’t tend to downgrade and be conscious of that every time you’re upgrading a house, a car, food, clothing, something, vacations, once you have stayed in a nice hotel, if you’ve been in a nice hotel before or rented out a nice vacation home or a nice condo or something, it’s hard to go back to the crappy one. It’s really, really hard. So be aware that it’s… We don’t downgrade very well, and don’t fall into the trap of thinking, once I’m in retirement and the kids are gone, I kinda just won’t care about as much, and so I’ll totally downgrade, I’ll totally live in the smaller house, I’ll drive the cheaper car, I’ll eat at cheaper restaurants, I won’t travel as much. That’s totally not true. We don’t downgrade. Number two, saying no is really hard to do, it’s hard to say no to sales people, to the family members and to ourselves.

Reese Harper:
Yeah.

Ryan Isaac:
Number three was, it is just easier to worry about stuff later, it’s easy to just put the burden on our future income and get what we want now.

Reese Harper:
Yeah. And the reason this is such an important topic is that spending is an essential part of your retirement calculation, it’s a variable that we have to be honest about in order to assess how much money you’re gonna need. I know that the fact that I am a theater going…

Ryan Isaac:
Truck driving.

Reese Harper:
Slightly more expensive meal person…

Ryan Isaac:
Restaurant eating.

Reese Harper:
Means I have to accumulate more for my retirement than someone else might, and I know what number that is, and I’m gonna work to get to that number, but I’m not gonna work harder than that goal, and I’m not gonna work any less hard, I’m just gonna work towards that goal, and I think the trick is knowing what you’re spending allows you to finally set realistic life goals, ’cause you’re able to say, this is kind of the lifestyle that I want and restricting the things you want completely all the time isn’t gonna be sustainable. Just telling yourself no all the time, I can’t have it, I can’t have this, I can’t do that, eventually, you’re just gonna get frustrated and go and just spend all your money.

Reese Harper:
So what’s important is, say realistically, this is what it’s gonna take for me to be happy. And I know I’m gonna have to make some trade-offs and say no in this area, but I want my lifestyle to feel and look like this, and so if there are things in your current budget that you want to be able to have in the future, but you can’t yet afford or you’re not paying for, that all comes in to this calculation of what your spending really is, and I think right now what you’re currently spending, if it’s inflated above and beyond what it should be, and you’re having a hard time doing any of these things that we talked about today, the amount of money you need for retirement could be extraordinarily high if you can’t make adjustments.

Ryan Isaac:
How long you need to work.

Reese Harper:
How long you need to work, so it’s just important with your financial advisor to have an actual conversation, not about some estimate of what you think you’re spending, but tracking your spending in a realistic way, having an advisor who’s understanding of the choices you wanna make and not be overly judgmental about the lifestyle decisions that you’re choosing to make, but help you build a retirement plan that matches up with those goals, that’s really crucial, and I think that your advisor, a good advisor, can help build the financial plan that supports the kind of lifestyle that you wanna have and give you appropriate push back when you’re starting to probably get… When your spending gets to a point where it’s outside of what’s realistic for your career.

Abby Morton:
Next time on Elementality.

Reese Harper:
Clients are paying attention to the way that you’re showing up more than they’re listening to the words that are coming out of your mouth, ’cause most of the things coming out of your mouth are not… Or you could say whatever you want and they’re not processing it, really, it’s jargon to them, it’s finances, it’s a topic they don’t care about that much, but they know it’s important and they’re kind of… They’re doing… They’re eating their vegetables with you, they’re eating their financial vegetables, but how you show up, the energy you bring, the way you feel, the way you feel when you’re asking the questions, when you’re at the meeting, like it is the most important thing.

Abby Morton:
You can learn more about the elements of financial planning system at getelements.com/meet, and schedule a time to speak with one of our friendly financial planning experts. Elementality’s executive creators are Reese Harper and Matt Glazer. Elementality is produced by Abby Morten and directed by Jordan Haines. Have a good one.

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