"You Obviously Haven't Been Listening To The Show"

Brought to you by the EveryDollar app. Start budgeting for free today. Well, throughout the marriage with my wife in the last three and a half years, we have been using our one credit card for covering some of the four walls, like groceries and transportation, but we've been covering mortgage and utilities with our checking account. And we also use the credit card for health insurance, premium, and medical expenses, and even some other life expenses. So we pay it off every month, and it feels like we give ourselves some room before we pay off the credit card each month, but then using our savings as quickly. So I guess one of my thoughts or one of my questions is, what are your thoughts on using the credit card for some of the four walls, even if it's not the long-term solution? Yeah. You've obviously not listened to the show much, right? We've listened a lot, but I guess one of the reasons that we're holding under the credit card is some of the... I mean, you understand that your question is completely perpendicular to everything we teach for the last 30 years, right? Yeah. Okay. So I just want to... I mean, I'm trying to understand if you understand what you're walking into. It's a warning. I'm asking. I mean... I'm not trying to beat you up. I'm just saying. So the answer to your question is that's dumber than crud, okay? Now, why is it dumb, right? Several reasons. Number one is there's not a singular piece of wealth-building research that indicates that what you're doing causes you to build wealth. Not a single instance. We studied 10,167 millionaires. The number of them that do what you're doing is precisely zero. Rich people don't do what you're doing. Broke people do. Okay? So that's a bad sign. Now, is it going to cause you to go bankrupt? Probably not. But the problem is, is that you actually have somehow used your decision-making framework around money to convince yourself that this is a good idea and that this is somehow going to get you ahead more than simply investing. Investing is where money comes from. Living on less than you make is where money comes from. Not from trying to trick Citibank. And so the number of millionaires that became millionaires by adding up all their airline miles is precisely zero. None of them. Not one. Broke people chase airline miles. 78% of the airline miles are never redeemed. And yet people spend a lot of brain calories chasing this bullcrap that these rip-off huge banks are screwing America with and then convinced you that it's a good idea to dance to their tune. How much money do you have to make where budgeting is just optional? If you chose C, watch this. She makes about 170. I make about 115. Hold on. Did you go back after you paid off everything? Borrow some more money? Oh yeah. Oh no, Carly. I would like to go here and there and get this Mercedes. Oh no. You went full South Beach. It's not just about how much you make. It's about having a plan for what you've got. So start budgeting with every dollar for free today. And then convinced you that it's a good idea to dance to their tune. I mean, now are you losing money when you pay a health insurance bill that is a health insurance bill? Whether you pay it with cash, it's exact same amount. Can't possibly change. No, you're not losing money doing that. Are you losing money when you pay an electric bill that is going to be the same amount, whether you pay it with a card or whether you pay it with cash? You're not losing a dime. When you go and you're buying your groceries, you're spending more. The best merchandisers on the planet are grocery stores. When you walk through a grocery store, you are walking through a scientific lab that is very carefully designed. What is on what shelf at what level and what color more than any other type of physical product on the planet. Grocery stores are brilliant merchandisers. The chances that you walk out of there spending more than you meant to, regardless of what methodology you use are very high because they're very, very good at it. And it started back in the 1950s with a simple thing. If they put the necessities at the back of the store, the bread, the milk and the eggs, because so you had to walk through the rest of the store and impulse on the candy and Wrigley's became multi bazillionaires. The Wrigley family have a fabulous mansion in Phoenix. Fabulous by putting sticks of gum where at the checkout, the impulse proper. So this is, these are just the beginnings of the sophistication that I'm talking about. So a hundred percent chance you spend more in a grocery store than you meant to. And when you put it on a credit card, all the data, all the research says that you are spending somewhere between 12 and 18% more than you would have spent if you spent cash because cash activates the pain centers of the brain and credit cards don't. When you lay down a hundred dollar bill and uncle Ben looks at you and says, what are you doing? What are you doing? When you laid out a credit card, city bank says, thank you. What's in your wallet? Samuel L. Jackson. My money is in your wallet. Not my money, but his money is in your wallet to pay for them stinking commercials that you did. That's what's in your wallet. We know what's in your wallet. A lot of city banks money. Here's the fun math on this. Let's say you put $60,000 of your take-home pay on that credit card to cover these bills and you got 2% cash back. $1,200 is what you got, right? I'm exhausted for $1,200. For the year. So here's what I want to challenge Frank with. Frank, if no one's has taken me up on this challenge, for one year, switch to on a budget using debit card and cash and see if you don't spend less than that $1,200 a year, which then negates all the rewards you got. And my guess is you're going to find that you spent thousands less by using your own money, leaving your bank account now versus using someone else's money that you can pay back later. A hundred percent chance. Take me up on it. Yeah. You're stepping over, stepping over dollars to pick up nickels, stepping over dollars to pick up pennies. And so here, and so no, Frank, I would not do what you're doing. That's the reason. The biggest reason though, is not the $1,200. The biggest reason is, is while you were focusing on the $1,200, you were missing the real way to build wealth because you had your eye on the wrong thing and you were thinking this method works. It's a distraction. It's the exact same. Here's, it's the same problem I got with Acorn. With Acorn's that app? Yeah. Yeah. Where you put pennies, you know, you round everything up. Your spare change. You put your spare change in there and, and people are screwing around with that with, with 14 cents while they should have been putting 350 bucks in her 401k. And they use the same brain calories to chase down the 14 cents that they would have done to set their 401k up and retire a multimillionaire. So in their mind, they've checked the box that I am investing. If I ask them, are you investing? You've scratched the itch. I have the Acorn's app. You're not investing. You're a child with a piggy bank. That's not investing. Children with piggy banks have $14 when they're four years old. And that's what you're going to have in your freaking Acorn's app. It's the same thing. There's nothing evil about it. They're not ripping people off, but they took your eye off the ball and you're, you're focusing your decision-making paradigm and framework around the wrong things. And so that's the problem. And a hundred percent of the time, the city bank tells you to do something. It's something you should not do. It is in their best interest. It's not for you. It's for Samuel L. Jackson. They got to pay him. He's expensive. Jennifer Garner is not cheap either. A hundred percent chance that Patrick Mahomes cost State Farm a bunch of money. Who do you think paid for that? Oh, you people that buy from State Farm. If you're not priced your dadgum homeowner's insurance, you can beat it with almost anybody if you got State Farm. Because you got to pay Patrick Mahomes. Create your free every dollar budget today. The simplest way to budget for your life.