Check out this couple’s REAL spending

Time for some real numbers. I had way more to say about it than expected! Can't view this email properly? [View in Browser]() [Podcast Newsletter Header Final.png]() {NAME}, Time for some real numbers of how people actually spend their money! Anyone can easily give you generic tips on how much to spend on groceries or rent. You and I don’t need more tips. We need to see real numbers. So today, I’m going to show you a REAL couple’s spending — the real numbers of how much they make, their debt, and what they’re spending it on. Then I’m going to tell you what I would do if I were them. Read on to see their spending…I had way more to say about it than expected! --------------------------------------------------------------- Make being healthy more convenient in 2024 [AG1]() AG1 makes taking care of your health convenient by giving you a comprehensive nutrition supplement. 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NET WORTH $ Assets (current value of car, home, property, business) $87,000 Investments (include 401K, non retirement — all investments) $460,465 Savings $1,300 Debt (student loans, credit card debt, mortgage) $135,000 TOTAL NET WORTH $413,765 COMBINED INCOME CURRENT MONTHLY $ Gross monthly income (all income before taxes added up) $11,110 Net monthly income (how much you take home after taxes) $7,883 FIXED COSTS 91% Rent / Mortgage $2,020 Utilities (gas, water, electric, internet, cable, etc.) $450 Insurance (medical, auto, home / renters, etc.) $550 Car Payment / Transportation $660 Debt Payments $1,870 Groceries $1,200 Phone $250 Subscriptions (Netflix, gym membership, meal services, Amazon, etc.) $175 FIXED COSTS TOTAL $7,175 INVESTMENTS 0% Post-Tax Retirement Savings $0 Stocks $0 INVESTMENTS TOTAL $0 SAVINGS GOALS 8% Long Term Emergency Fund $0 Kid's sports $600 SAVINGS TOTAL $600 EVERYTHING ELSE 1% EVERYTHING ELSE (Dining out, movies, anything you want) $108 My thoughts: - Looks like a couple that likely rents (housing would have shown a higher asset value) which means that debt is either student loans, CC debt, or some combination - $133,320 household income - Fixed cost is 91%, which is way, way too high. From just looking at this number, I can tell they’re under significant financial duress. Couples in this situation are *always* stressed about money, usually fighting about random expenses like Target. But the actual problem is this 91% Fixed Costs. To find out why… - Housing cost is not the problem. Rent/Mortgage + Utilities is still only about 22% of gross. Not bad at all. - Ah, debt payments. At $1,870/month, I’m guessing they have substantial credit card debt and they’re being eaten alive by debt payments. (In fact, if I zero out the debt payments, their Fixed Costs are 67% — still too high, but at least manageable.) - Groceries are $1,200, probably too high. Let me explain why I say that without even knowing the size of their family (people get extremely sensitive about anyone suggesting they spend too much on groceries, saying things like “But…inflation!”). If you have $1,870/month in debt payments and Fixed Costs of 91%, you are losing money each month. That means that groceries — which few people ever really comparison shop for — should be one of the first places to focus on. An extra $200/month savings on groceries could be redirected to debt and shorten it by months. - Other things that could be cut are more complex, such as transportation. Once you buy a car, it’s hard to get out of it because even if you sell it, most people still have to find another vehicle. When people factor in how much it would cost to sell/buy another vehicle, they often realize they’d only save a little bit. - This is why it’s so important to be careful what you elevate into Fixed Costs. Once you start spending on it, IT’S ALMOST ALWAYS FIXED!!!!! - I’d cut those subscriptions by 50% and redirect the money towards debt. - Moving on, I’m not surprised to see 0% invested, although I suspect they’re actually saving thousands/month to a pre-tax 401(k). - Savings: $600/month for “kid’s sports.” For a couple in their early 50s to only have $1,300 in savings makes me very, very nervous. I hate to say it, but I would eliminate this and put the money towards their own savings. In a financial situation like this, you have to have several tough conversations. - Guilt-Free Spending (“everything else”): Says 1%, but I doubt this. Undoubtedly they’re spending more and simply not tracking it, including eating out more, travel, random expenses, things for the house, etc. They are spending more than they make every month. - I consider this a massive RED ALERT and would make massive changes to pay off debt quickly: Eliminate expenses drastically — specifically Fixed Costs and Kid’s sports — and redirect those to debt. I would also call the company that owns the debt and ask if they can help me. Sometimes, companies will lower your APR or even give you a 6-month 0% allowance. HOWEVER, THIS IS NOT THE END GOAL. Too many people in debt play interest-rate games instead of doing what actually matters: paying the debt off. What surprised you the most about seeing this couple’s spending? Do you want to see more of these? Write back and let me know. [Signature] P.S. This week on the podcast: MLM’s, crypto, real estate — I can’t stop falling for get rich quick schemes [Check out Part 2]() of my fascinating conversation with David and Halima as they start to understand the stakes of the position they’re in. [Podcast]() [Programs]() [Podcast]() [Netflix show]() [Books]() [Website]() [IG]() [in]() [X]() [YT]() Was this forwarded to you? [Sign up here](). [Unsubscribe here](. 548 Market St #89946 San Francisco, CA 94104-5401