The Jesse Mecham Show

Latest Episodes:

You've Never Budgeted At A Time Like This Apr 06, 2020

Show notes

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.

The Commander's Intent Mar 30, 2020

Show notes

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!

Don't Be Average... You Can't Be Anyway Mar 23, 2020

Show notes

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.

Budget. No, Budget! Mar 16, 2020

Show notes

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.

Wait! Mar 09, 2020

Show notes

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.

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Doing Nothing Is Something Mar 02, 2020

Show notes

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.

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Budgeting for Lady Luck Feb 24, 2020

Show notes

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.

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Opting Out of Credit Cards (A Bit) Feb 17, 2020

Show notes

In episode 411, Jesse decried the ubiquity of credit cards and the fact that they enjoy a number of benefits that plain old debit cards do not... at the risk of getting yourself in debt. Since then, he's learned of a few strategies for managing fraud risk with debit cards.

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Scratching the Gambling... Er, "Investing" Itch Feb 10, 2020

Show notes

Jesse admits he's got an itch to scratch. He likes to invest gamble in the stock market from time to time, using an app that allows him to trade at the swipe of a finger.

At least he's honest -- it's gambling with fun money, not investing. And that's the key. It's money he can afford to lose, and it's not much.

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Optionality and Managing Your Fixed (or Growing) Expenses Feb 03, 2020

Show notes

Wealth is not a dirty word. After all, wealth can allow us to do many interesting and fulfilling things with our lives. At the very least, it provides options, opening up the range of possibilities before us. Simply put, wealth can allow us to live the life we want to live.

The only problem is that the accumulation of wealth is often followed by increasing expenses. Some of these are obvious -- a bigger, newer house usually costs more than a smaller, older one -- while others are insidious. A larger house requires more energy to heat and cool, more time and effort to clean and landscape, and more things to fill it up. That's just one example. We could say the same about cars!

Left unchecked, these growing expenses can once again eat into our wealth, robbing us of the optionality of wealth. As Thoreau once wrote, "he who owns little is little owned."

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

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