Are You a Spendthrift or a Skinflint? – Episode 171

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[00:01] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler and No BS Money Guy, Todd Strobel. Hey everybody, welcome to the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, we have our co-host and bestselling financial author, Kim Butler with us today. Today we’re going to put Kim on the spot. I’m looking at the February-March 2017 issue of AARP Magazine, again that’s AARP, and there is a quiz in here called, are you a spendthrift or a skinflint? Take the quiz to discover where you fall on the spending spectrum, and Kim has graciously agreed to, without ever seeing this before, to answer these questions.

[01:03] Welcome, Kim. Hello, Todd. I’m excited to hear it, but I have a question. I don’t know what a skinflint is. I hadn’t even think through that word. I’ve never heard that before. That would be the opposite end of the, of course, spendthrift means that you spend more money than you have. Okay. Skinflint would be the exact opposite in that, you know, you probably have more money in your mattress when you die than you ever spent in your lifetime. All right, well, let’s go for it. So the question is, what we’re trying to determine is, are you a wild spender living lusciously in the moment, or are you a penny pincher who worries deeply about every single purchase, or do you fall somewhere in between?

[01:53] All right. Are you ready? Yeah, the scale on the score, you’ll tell us, I guess, when we’re done. Well, yep. Yep. I will score it. So that’s a zero to 20 score. Okay. Okay. Question number one. This is Truer Falls. I have more than 18 rolls of toilet paper in stock at my home. Yes, that is correct. Okay. I bring water or home brewed coffee on long car rides rather than stopping for drinks. That is correct. Isn’t this kind of fun? I have a second refrigerator or freezer so I can stock up on food. That is correct. Do I get to like, like back up my reasoning for any of this or I just got to go with it? Well, I mean, I’m open for comments at any time. Okay, I’ll keep my mouth shut for now. I’m not feeling too embarrassed yet.

[02:46] I buy the generic or house brand over the name brand when I think the quality is comparable. I’m going to say no most of the time. Okay. I belong to three or more loyalty programs at groceries or drug stores. No. See, it kind of goes back and forth. Yeah. I have never paid full price for clothing at a high end department store such as Nordstrom’s or Bloomingdale’s. Okay, maybe like one time. So I, all right, I’ll go with never because that’s generally the facts, the truth. Meaning that you, you know, you’re trying to get more clothes for the same amount of money. Correct. TJ Maxx is my favorite. I have more than $100 in coins in a container somewhere in my home. True or false? True. I have never paid more than $150 for a wristwatch.

[03:47] False. We’ll watch for that too. I have used a discount coupon at a restaurant in the past three months. False. If a museum suggested donation is $20, I’d likely donate less. False. I can’t remember ever tipping more than 20% for dinner at a restaurant. Definitely false. Given the choice of a $5 turkey sandwich from Subway or an $8 turkey sandwich and a nice deli, I’d opt for the Subway. I’m going to go with yes. It takes me at least 20 minutes to book a hotel room online because I’m checking out all the possibilities and price first. False. If a wedge is, I’m sorry, go ahead. I’m dying for my score so I’m not going to comment. If a wedge of cheese has a spot of mold, I cut it off and eat the rest.

[05:00] Absolutely yes. Which by the way, if you’ve ever been to Wisconsin, which is the home of cheese country, they have cheese there that is 250 years old and it molds all the time and they just cut, no, I mean seriously, that’s part of the curing part of cheese. You cut the mold off and eat it. I’m all right with the mold. The 250 years is the challenge. I’ve just said, you know, I’m just saying cheese ages. I mean, it gets better. So, you know, that is that’s there’s nothing wrong with that. I mean, that comes from the people in cheese country. They’ll love it. Even if I could, I would never pay for business or first class airline tickets. Uh, false. I would drive five extra miles to save 20 cents on a gallon of gasoline.

[05:58] No, I would never pay more than ten dollars for an alcoholic drink. And we’re going to have to go zero. Let’s see, would would Todd, would my husband pay more than 10? Yeah, I think he would. Yeah, he would. I mean, just because the quality, I mean, exactly respects the quality of the drink more than the quantity. Yep, you know him well. Not that well, but I mean, I have been out with him a few times. So I would rather spend four or more hours handling a home repair myself than pay an expert to make the fix in 30 minutes. Absolutely false. If my smartphone screen cracked, I would continue using the phone as long as it worked. Correct. True. I keep a car until it’s at least eight years old. True.

[06:56] OK, all right, let’s figure out how we do this. Find out how many times you answer true to the following 20 statements and then check your score. So there’s one, two, three, four, five, six, seven, eight, nine, ten. Ten is a six to ten is a savvy spender. You are open to savings when they present themselves. But overall, you aren’t too concerned about keeping spending in check. Interesting. I would say knowing you, that’s true. Yeah, I would say that’s dead on. Exactly right. How funny. So here’s the things that I wanted to comment on. But like I said, I was so dying for my end result score that I didn’t want to interrupt the process. So and how interesting this is, and we’ve talked about this

[07:52] on the podcast before, when you prioritize savings, like we pay our life insurance premiums. That is our savings are the act of savings as a verb, as well as the noun of having a saving account. It gives you so much freedom to be able to spend money on the things that are important to you. And I will readily admit that this comes with age, because as we get older, I think we get clearer and clearer about the things that are important to us. And also, I think there’s a real issue within marriage, because, for example, like the subway question was hilarious because Todd would rather starve than go to subway. But I would happily go to subway. But when we’re together and this is your husband, Todd,

[08:43] this is Todd, my husband. Yes. Thank you for clarifying. When we’re together, I know that food is really important to him. And so, in fact, I remember when the guy that suggested that Todd and I date, who both knew us very well, when we were just kind of talking about, oh, like Kim and Todd should date, this guy, John Baker is his name, said, just so you’ll know, Todd does not have a food budget. Like there’s no such thing as budgeting or limiting the amount of money that he spends on food. And that’s a real challenge for me because I will absolutely go with less expensive food. I’m careful about quality and I will happily spend money on the weird things that I like to eat, like chia seeds and other bizarre food items.

[09:31] But I’ve had to really just adjust my approach to food because if Todd wants to go to steak, we just go to Rizcris or the high-end local steakhouse in the area and absolutely do not hesitate to do that. But when I’m traveling by myself, I refill my water bottle at the airport. I bring all kinds of snacks in my bag, largely out of health, because of course now in the airport, you can get healthy snacks. But I think I got in the habit of it earlier on when you couldn’t really get healthy snacks in the airport. So it’s so helpful, so freeing to know what’s super important to me. And I need to look nice when I wear clothes, but I cannot stand spending an extra amount of money on clothes. I’ve done it in the past,

[10:18] but I don’t get any joy out of it. And so that’s what’s so cool. Like I will happily spend money on a cool new healthy snack that’s ridiculous in price or some new healthy thing. Like I did cryotherapy. We’ll have to talk about that in a little bit, but I will save money on food unless I’m with Todd. And then I don’t save money on food. I think the point is, is that you’re making your decisions based upon what you want, not based upon what you can or cannot afford, which I mean, to me, that’s one of the greatest luxuries in the advancement of our human race. Absolutely. And to be clear on your values and that you’re spending money either on what you want or on what keeps the relationship solid,

[11:12] because obviously there are times when we’re dealing with relationship decision that is more for the relationship and less for the money and not on what society tells me to spend money on. That’s, I think the critical distinction, especially for those younger listeners that are still more swayed by what society tells us. And thankfully, I think more and more in today’s world, the younger set is getting clearer on their values first making their spending decisions accordingly. I just talked to my daughter this morning and she is saving money for a trip to Prague. Her boyfriend’s gonna be over there studying for a little while. And she’s already, I mean, this is like a year away and she already has the bulk of the money saved.

[11:56] And we’re talking, I mean, that girl has put away single dollars, dollars at a time to get this trip saved for. That is so awesome. And she’s totally willing to give up the whatever it is that is not as important to her because the trip to Prague is important to her and her own sense of appropriateness and not continuing to ask her mom, she’s in college, but not continuing to ask her mom for money. That’s important to her. And so I think the younger set’s doing a better job of that these days than I know I did when I was in my 20s and even probably 30s. Don’t you feel like the younger set’s picking that up a little quicker? I think we, as in our generation, naturally trusted what we read always

[12:44] and what we heard most of the time. And what we have found out is that many times it’s marketing or opinion disguised as news. And again, we have a new president, whether or not you wanted him or not, not trying to get political, but I mean, this week he made a statement that the single greatest enemy to the American public is the American media. Oh, wow. I love that. Well, and I just heard a comment from somebody that’s got a wide reach about finances being the number one stress in individual lives. So it wasn’t even a relationship thing. It was just finances are number one stress. And the media is, in my opinion, the number one source of incorrect information about our finances. So holy cow, when you put those two comments together,

[13:44] there’s just a real mess on our hands there. And so that’s the job that you and I have as podcasters, as writers on our blog, as people that help people all across the country with their finances to get them the right information, the correct information, the truth, and the whole truth about various financial decisions. Now, sometimes peace of mind or some particular value might override that decision, but people deserve to have the whole truth about their financial decisions. And when they do, I think that lessens stress. Oh, absolutely. And I mean, sometimes some of the worst information you can receive comes from the people who care about you the most. So. Absolutely. We were just- We’re talking about people that have, you know,

[14:36] I mean, our lifespan has changed so much that what worked before won’t necessarily work again, but yet there are some values that are worth holding onto. Absolutely. We were just at truth training last week for advisors. And one of the things that Todd Langford, my husband likes to say, is in speaking about his grandpa, a recommendation of the only way to buy anything is 100% down and nothing a month. And it always takes a moment or two for people to process that. In other words, to pay cash for it. And we know that that isn’t always the best thing. Sometimes it is. Sometimes peace of mind overrides the true financial, but the general public has forgotten or never learned that their own money has a cost.

[15:30] And so if you pay cash for something, you still have an interest cost. You may not have an interest payment, but wherever you took the cash from, now, okay, if it is in the mattress, then we could argue that technically you don’t have an interest cost in literal terms, but you still do because you could have had that money sitting in, for example, cash value of life insurance, where it’s earning three or 4% these days. And so in essence, the quote cash payment that you made still had an interest cost of three or 4%. We call that opportunity cost. And that is something that people don’t understand about their finances and consequently, they make wrong decisions. And it’s just the job of you and me

[16:11] and other people that like to tell the whole truth to help get us set straight. Super. I think that must be a grandpa thing. I can remember when my grandpa, who I was very close with said he was gonna buy a boat and that meant that he started saving that day and three years later, he bought the boat and I never was so frustrated in my entire life. Yeah. Yeah. Yep, but you are correct. That is a grandpa thing. That’s cute. Awesome. Well, anyway, this is the No BS Money Guy Todd Strobel along with Kim Butler. We thank you. We appreciate all of our listeners. We invite your questions at what email address, Kim? Hello at partners. The number four, Prosperity.com. Our special email for podcast listeners.

[17:00] Hello at partners number four, Prosperity.com. Super. And if I could ask you again, just give us a shout out, let us know how you think we’re doing something that might interest you. We’ll be glad to do a show on it and we’ll see you all again real soon. Thank you for listening to the Prosperity podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.