- Hey, it's Nolan Matthias and this is the
"Thrive and Give Show", where we talk about
how to thrive in your personal finances,
in your personal life and in your business
and all we ask in return is that you pay the favor forward
and today we're talking about the seven
biggest drains in your finances.
And, at the very end of the show,
I'm gonna tell you my biggest personal financial drain
I've ever had in my life and the lesson I learned
from that experience, so stay tuned 'til the end.
But, before we get into it, do me that favor,
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So let's get into the seven biggest drains
in personal finances.
So let's start with number one, which is wasted food.
Now, think about this, 69%,
it is estimated in North America, of all food is wasted.
All edible food.
So this means the stuff
that you could've finished at the restaurant,
this means the produce that went bad in the fridge,
the milk that went sour, 69% of all food goes wasted.
So think about that from a personal finance perspective.
If you're spending between restaurants and between groceries
$1000 a month, up to $690 of it is completely being wasted.
Now maybe, maybe you aren't one of the people
that's wasting all that food, maybe you're only
wasting a smaller percentage of it,
but let's face it, we all do it, we all throw out food
that's questionable but probably edible.
You know, if we just ate it a little bit faster
or we thought a little bit more
about whether the food was actually going bad,
we could probably save ourselves a heck of a lot money
and probably take a little bit of pressure
off the food supply chain as well.
Now keeping on that same line of thought with food,
the second biggest drain on people's
personal finances is fast food.
Yes, that's right, the food that you get
to drive through to the drive-through window and pick up
for what seems like a really, really cheap price
can end up being a huge expense
over the course of somebody's year.
Think about it this way, if you're going to Starbucks
every single day and there's two of you
and you're spending $10 per day on coffee
and two or three times a week you hit the McDonald's
or the Wendy's or the A&W or maybe the full restaurant
and you're spending 10, 15, $20 at a time,
well over time that adds up.
And what we find is that a lot of people
end up spending significantly more
than what they thought they spent
when they add it up at the end of the year.
So that really cheap $20 meal
can end up being really expensive.
And when you put it against what you could get
at the grocery store as an equivalent,
like let's say you wanna get a burger
and you go in and you buy the pound of beef
and that's five or six bucks and it makes you five burgers.
And you buy a few buns and you buy the cheese,
and the lettuce, and the mustard, and the ketchup,
and the pickle, and the tomato, all the accoutrements,
for basically $20, you can get five, six burgers.
If it's even $20, it's probably closer to $10,
and the quality is significantly better
when you're cooking it at home than it's going to be
when you actually get it at the fast food joint.
So think about that.
Not only are you saving money by cooking it yourself
but you're also getting a better product.
And I'll give you a tip on how to cook a great burger.
Barbecue? Forget it.
The way you wanna cook the burger?
Cast iron skillet.
A little bit of salt, little bit of pepper,
no filling, just beef, and you can get that burger
pretty damn close to what you would get
at that fast food joint.
Our third biggest money drain for those who still do this,
and if you do this, you're insane,
because it not only affects your health
but also your money, is smoking or vaping.
Now this can be a huge inline item
for people who are smokers and vapers.
We've seen clients in our mortgage business
who spend five, six, seven hundred dollars
per month on vaping and smoking.
In fact, a lot of smokers, get this,
when we do a budget for them,
they won't put the fact that they smoke on the budget.
I mean, they walk in and you can smell it on them
and you go, "Well, you filled out your budget
"but where's the cigarettes?"
and they go, "Well, ah, I forgot about that."
Because they don't wanna face the actual cost
and, if you can eliminate just that one thing
from your budget, that smoking and that vaping,
you're not only doing a huge favor to your health
but you're doing a huge favor to your personal finances.
So get rid of the smoking and the vaping.
Drain number four in your personal finances
is subscriptions, so that Netflix, that Crave TV,
that Apple Music, that newspaper subscription,
that workout subscription, the gym subscription.
Whatever it is for you, subscriptions,
those things that they get you by saying,
"Well it's free for the first five months"
and then all of a sudden we're gonna start charging you
an insane amount of money for it,
those things are expensive.
My wife, just yesterday, we had this fight
because she had a Sirius XM bill
and, you know what Sirius XM does to you
every single time you call and cancel?
They go, "Why don't you take it free for a year?"
And then you know what happens?
All of a sudden they turn on the bill a year later,
when you've completely forgot about it
and you're back to paying 60, 70, $80 a quarter
for that radio, it's absolutely insane.
So watch out for the subscriptions
and especially the, "Hey, you know what,
"it's free for this amount of time
"and you don't have to pay for it 'til later."
Because you will always forget to turn the subscription off,
it's just human nature, that's why they do it.
So number five on our list of most expensive items
when it comes to personal finance is designer fashion.
Now this one I've got mixed feelings on
because I'm the guy who 10 years ago
bought a pair of Prada shoes
and they lasted me for 11 years and they're still going.
They just don't quit, they're indestructible.
So I would say that that was a great use of money
because, at the end of the day,
they're gonna cost me way less than what buying
a new pair of shoes every single year would cost.
But that's because I bought quality
and something that's timeless.
So something that will stand the test of time
as far as fashion goes.
Now, if they had been this star studded shoe
that was wild and crazy,
I probably would've only worn 'em for a year.
But because they were that classic look
and they were a well made product, they lasted forever.
So I think that designer fashion,
if it is being bought for quality and longevity
can be a great thing.
But where designer fashion kills people
is on the pieces that go out of fashion the next year
and you look like a complete idiot for wearing them.
And let's face it, when you get that brand new purse
or you get that flashy flower jacket,
you might get one or two comments where people go,
"That's really nice, I love it."
And you get that moment of pride.
You know what's better than that moment of pride
that you get when somebody goes, "Wow, I love your purse"
or your fancy jacket?
It's knowing that you can afford
to buy another nice jacket, a high quality jacket,
because you didn't spend all your money on things
that are trendy and went out of style.
Okay, so moving on from designer clothing,
let's talk about alcohol.
Alcohol is one of those things that can also be
not only bad for your wallet but bad for your health.
But let's leave the health argument aside
for now on drinking and let's just talk about
the effect it has on your wallet.
Because alcohol can be one of those things
that sneaks up on you.
You know, you go for that nice dinner somewhere
and you think it's gonna be a $50 dinner.
You know, you get two dishes, a $20 dish for the missus,
a $20 dish for you and then an appy and it's fifty bucks
and then all of a sudden you go,
"You know what, it would be nice
"to have a glass of wine with this meal."
And you think, well there's no point
in me buying just a glass, maybe we should buy a bottle.
And before you know it, the cost of your meal
has doubled or tripled because of alcohol.
Add a couple cocktails in, it gets even higher.
So alcohol can be one of the biggest drains on our wallet
and that's just when we're going to a restaurant.
Now think about your habits on the weekend
and what you're drinking on a daily basis
and it can be almost a bigger expense than groceries.
So what we need to know and realize about alcohol,
is that it is not something that should be a grocery,
it should be something that should be a treat.
And my wife and I, we're drinkers,
having a glass of wine right now,
I don't believe for a second that you should not
be having a nice drink when you want it
but I do think you need to be careful
about buying a $60 bottle of cabernet,
when you could be drinking a $10 bottle
of Chianti that's just as good.
So I promised you I would share the story
of my biggest financial drain of my lifetime
and that leads us to number seven, which is luxury vehicles.
The biggest financial drain in my lifetime
was a BMW M5, this was the car I dreamed of.
I bought it in 2009, it was brand new.
And over the course of a 12 month period,
between putting new tires, a new clutch and oil changes
and the payments I had to make on that vehicle,
it cost me $25,000 to drive that car for just 12 months.
Now to put that in perspective,
the vehicle I got after it, traded it in on a Ford F150.
Now this truck was as nice, if not nicer,
than the BMW inside.
It was an incredible vehicle.
I drove it for seven years.
And you know what it cost me to drive it for seven years?
That's right, $25,000.
I bought it for $50,000 in 2010,
drove it all the way 'til 2017 and sold it for $25,000
for a total cost of driving it of $25,000.
It broke once, once, and it wasn't the truck's fault,
it was my fault, because I heard the brakes squealing,
I ignored it and I blew the brakes on my own truck,
so that was the only time it broke,
cost me about $1200 in repairs
and other than that, the thing was bullet proof,
and as nice, if not nicer, a vehicle
than what the BMW was long term.
Family loved it, I loved it, dogs loved it,
had room to haul stuff and never had to worry
about it breaking, which was one of the things
that always happened with that BMW.
And to further put that in perspective,
I still have a love of fast cars and really nice cars
and back in 2014, I got back into the high performance
car market but this time I was smarter.
I didn't buy a brand new luxury car,
I bought a 1965 Cobra replica.
Now what was smart about this purchase,
is this car wasn't purchased as a toy,
it was purchased as an investment.
And it was a vehicle that I bought for $42,000
and three years later sold for $67,000.
Now, interestingly enough, that $25,000 theme
keeps coming back into play but what it goes to show
is that if you're going to get into nice luxury cars
and nice things, sometimes instead of owning
a brand new Ferrari, it's better to own a 1967 Ford Mustang
that is probably valued about the same price
and probably just as unpractical to drive
but will at least hold it's value long term.
So luxury vehicles are a thing
that I think can absolutely destroy your finances,
especially if you buy them when you can't afford 'em,
like I did in 2010 and they're one of the most
important things to avoid.
So, again, that's my seven things
that are the biggest drains on people's finances.
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