Our next speaker, Jesse Mecham, is a personal finance expert seen on Forbes, Wired, New York Times. He is the founder of YNAB, which means you need a budget. He is the founder of the YNAB app and money method that has inspired millions to spend, save and live joyfully. He's also the host of the YNAB podcast and author of the best-selling book, You Need a Budget.

Jesse started YNAB in 2004 with just a spreadsheet. Back then he was cash-strapped, newly married, college student trying to cover the cost of tuition without going into debt. So you're going to -- and by the way, you'd be amazed at the amount of people I speak with that have no idea how much they're spending.

And it doesn't matter whether you're young or old, especially if you're going into retirement, you really need to know what your budget is. So here's Jesse. >> Thank you. We could have saved Rick some time and told him that it's called YNAB. So we lost about five minutes with him saying every letter, but I think we'll be okay.

Yeah, we actually don't -- we don't swear up here either. So I don't say the word budget anymore. It was a huge mistake, the biggest mistake of my life. There was a while ago, I was driving north on Interstate 15 in Utah and we were on a road trip.

And I drive and my wife, she watches the road or naps. And then I've got a bunch of kids in the back and they were all either asleep or if they were like in the angsty teen age, they probably had headphones on. They were just kind of doing their thing, you know.

So it was super quiet in the car. And I distinctly remember seeing mile marker 318 go by. And I was, of course, thinking about money because it's kind of all I think about. And I don't know why, I'm just -- I'm wired that way. And about mile marker 320, I had this epiphany that's the most obvious epiphany of all time, not worth a story, where I realized that money, it's sole purpose, there is no other purpose.

The sole purpose of money is to be spent. And you could say, "No, it's to be saved." And I would just say, "You're just talking about future spending." And then you would say, "Oh, yeah, you're right." You could say, "Well, what about when I give it away?" And I could say two things, the next person spends it, the charity spends it, you know, your neighbor spends it, whoever you gave the money to.

Or I could say, "You just spent it on the feeling of giving." Right? That might also work. But either way, we just spend money. All we do is spend money. And when you start to think about money as only being, like the sole purpose of it is to be spent, it -- all of the other cruft starts to kind of fade away.

And I think we get some clarity. So where this session was supposed to be about budgeting and learning to save, it's -- I don't say budgeting anymore. And I'm offended that that's on the slide. And we'll be the -- I'm just kidding. I'm totally kidding, Rick. Kidding. We just met, so I'm going to tease him, you know, a lot and -- yeah, I'll blame Alan.

I don't know who Alan is. Are you Alan? Well, Alan, come on now, you know. Thank you. So we -- here's this next 25 minutes is me basically telling you my story of moving from a company that taught people how to budget to a company that teaches people how to spend.

And we've done it for millions of people. It's so far so good. So the interesting thing about spending, and if we talk about meant to be spent, I want to add one little bit to meant to be spent. Meant to be spent well, okay? I mean, it's meant to be spent well.

And we'll get to why. Actually, no, let's do it right now. The main -- I'm curious sometimes when we think about money, we have pretty fancy definitions for it. We talk about how money is a dollar. And I'll say, oh, that's not -- you didn't define money there. You just told me, you know, what a government-sanctioned money is, is called a dollar or a currency or something like that.

And so then an economist might come at us with a smarter definition that I quite like where they would say, well, money is a medium of exchange. And I like that. I actually like that quite a bit. Lately, I've been thinking that money is both nothing and -- I was going to say everything, but maybe it's better to say anything.

Money is nothing because until you spend it, you just don't know. So if you could say, well, Jesse, I don't know what that is, then I would say, well, then we can probably call it nothing for now. And you say, no, it's definitely something. And I would say, well, what is it?

And then you could maybe start to name it a little bit. And so when people save, when they're told to save -- now, S.C., she taught us this saving is for a very specific purpose. She's doing it right. Many times when people first come and we're working with them, they'll say, well, I was told I need to save money.

And they're just told I need to save. That's it. And so when they set up a savings account, and they're feeling really good about this savings account, and they put money in the savings account, and they're maybe even smart, and they auto-deduct it so that it can do the smart thing where they don't have to re-decide every time.

I thought two weeks was the right answer also on how long motivation lasts. And so they're feeling good about their savings, and then someone smashes in the back window of their Civic and steals their radio, or their cat spills a lot of water on their laptop, or whatever it may be.

And so they have to -- and this is a word they use. They say they have to raid their savings like they're Vikings attacking it. It's theirs, but they act like they don't even own it. So they use very negative words to describe accessing, using their money. And we found that interesting.

We call it the revolving door of savings and shame, where they put the money in, and then for whatever reason, they have to pull the money out. It's like the cat broke your laptop. You work from home. You need the laptop. This is a justifiable thing to spend money on, and yet they're like, "I just can't save.

I'm not a good saver." And what they're missing here is a little bit of what Essie taught us already. Their savings needs to have a name. Otherwise, money is just nothing. But when we label the money, it starts to give the money purpose and starts to maybe bestow a little bit of resolve for that person.

So if I have lots of different names for my pile of money, let's just put it all in my checking account, and I say I've got 10 grand in there and $1,000 in each of these 10 places, and one of them is for the laptop, a Chromebook. You can't get a nice laptop.

You get a Chromebook, especially with inflation. My numbers are pre-inflation, so just go with it. But when you need that new laptop and you see that this money is labeled new laptop, there's no rating of a fortress. There's no shame. It's just, honestly, you feel a little bit like a rock star.

You're just like, "Look at me. Am I a fortune teller? Am I a little prescient? Should I play the market just a little?" No, no, of course not. But you kind of feel like, "Man, I'm handling things." The only difference was two people with $10,000 of savings, one person that's named them and one person that hasn't.

Now, you might be a little more dialed in, and you'll say, "Well, it's my emergency fund," but then you know what happens? You don't really know what an emergency is, and so the laptop thing happens or whatever, and you're still like, "Oh, my emergency fund. That was for emergencies." You just haven't given yourself the permission.

You haven't labeled the money with its purpose, and so until you label it, I would say that money is nothing. That's perhaps a good definition. The reason it's anything, though, is why. Why is money anything? Because I can pull money out and just literally have it be anything, a villa in Italy or a coffee, it's anything.

But to go back to the medium of exchange bit, I was playing with my son, my littlest, I have seven, so I have to kind of count on my hand and figure out the name, and his name is Brooks, if I recall. Now, he's a fantastic little four-year-old learning to swim.

We're in the pool, and I was showing Brooks how if we both go underwater, kind of trying to teach him not to be afraid to go underwater, right? So I wanted to have a really good reason to go underwater, and the reason was I was teaching him that snapping, you could hear it really well, and I'm no physicist or whatever a person would be that knows about water and sound, but he thought that was pretty neat, and I realized later, I was like, "Oh, water's a great medium for sound." We were way across the pool.

He's in that shallow end. I say, "Brooks, stick your head underwater," snap. He hears it. He pops up. He's like, "I could hear it, Dad. I could totally hear it." And if water is a good medium for sound, then money is a great medium for what? Well, we say, "Oh, it's a medium of exchange," right?

Exchange? That sounds boring. It's a medium for what, really? The important part of that definition isn't medium. It actually is the exchange part, and I mean, we don't barter anymore, right? I mean, maybe we barter a little bit. Maybe to optimize taxes, you might do a little trade here and there or whatever.

Maybe we barter slightly, but I didn't buy my house for 65 table saws, and a few of you could figure out what brand, and I'd say SawStop, and you're like, "Oh, that was smart," you know? That one's smart. And then a few of you would be like, "65? Okay.

I know how much that house costs in terms of dollars," right? That's what you get to. And if we were really to work hard, we could all get together and we could make these massive lists, this item exchange for this item, this item exchange for this item, and we're trying to figure out the denominator for all of these different things, so a house is 65 table saws or whatever else it may be, but it becomes unwieldy, obviously, and so all humans forever have always just gotten rid of the bartering quickly, and they've recognized we've got to figure out a medium of exchange, but the denominator is such an interesting question.

So when I exchange, like I've got a burrito numerator and then $10 or 20 in this day for the burrito, right, and it's like, "You better have guac on that for 20 bucks," but the $20 is the denominator, and so we're doing the exchange, right? Now, to kind of loop it back to money well spent, the spending exchange, 20 bucks, burrito, that works pretty well.

On the earning bit of the exchange, what's the denominator? The $10 or the paycheck, right? That's our numerator. And what are we exchanging for it? And you all, you know this, like we know this, I'm here exchanging right now, right, all of our money, not money, our effort, our time, our energy, calories, worries, stressors, all of our, "Hey, get good grades," the entire time we're told, "You start school, get good grades." Why?

"So you can get a good job." Why? "So you can make more money." "Study this in school." "No, no, don't study that, study this." No one gets paid doing that. "Study this instead." "Why, dad?" "I have two boys that started college." "You make more money." "Okay, so this is all for money." "Right, it's all for money." "Oh, have a good network, talk to lots of people, meet people that are further along, have them help you move along in your career, you know, so go to these networking events." So you're like, "Okay, so networking is important." Yes, that network is important, all for money, right?

"Get good sleep so you can be more creative." So, you know, "Don't be financially stressed at work so you can be more valuable, so you can earn more money." This exchange we do, blood, sweat, money, tears, calories, it's all for money. That's that earn side of the equation. It's money at the top, numerator, and all those things I listed as the denominator.

And for shorthand, I would maybe say, instead of me having to, for the rest of this presentation, I have to say blood, sweat, money, tears, it starts to sound kind of gross anyway, I think we should just say you, I mean, you think about this for a moment, like you all are here and all of your experience, this entire room, all experience, whether you remember it or not, everything that formed you, formed every thought, I don't know how well that works, not a psychiatrist, psychologist, therapist, none of that, but all of it kind of rolls up into that moment.

And then we go off and we earn money. So what else could we say besides you are the exchange? You are exchanging you for money. And as uncomfortable as it might be, because not in this room so much, I don't think, but in many others, money is a little bit taboo, as SC said, it's a little bit dirty, it's, I mean, we were told like, even in the Bible, like, "Hey, the love of money is the root of all evil." And we have to kind of make sure we tell people, "Hey, hey, it's the love.

It's the love of money. It's not money itself." We have to actually caveat even like, "Yeah, I like money. I like to earn money. I find money useful. It gets me anything." Right? But we, we distance ourselves from it. So we, we make it at best a chore, right?

For you, an obsession, but you guys are so rare, you know, compared to the norm. Like you, you may be, you're wired a little bit different to, to enjoy the pursuit, to enjoy the investing, the challenge, and it's, it's lovely. But on the spending side, there's still just this little bit of, well, money's just a little bit dirty.

And if pressed, you'll, you'll yield. You'll say, "Well, no, I appreciate the fact that I can buy a house with it and I can provide for my kids. And yeah, I do have to drive around in a van and it could be a Porsche, but my friends would be lousy.

I appreciated that quite a bit. Um, I haven't tested it either. I think we both should and just see what happens. Um, Honda Odyssey for the win. Um, but this distancing from money, I, what we try and teach people is the opposite. We try and teach them that money that you're trying to push away.

That is just, and only you, all of your effort, energy, expertise, network, blood, sweat, tears, calories. It's all you. Why, why would you push it away? Why would you make it less than, why would you not treat it with, I guess, self-respect almost. Couldn't I say that? Let's treat it with respect.

Let, with, yeah, self-respect. I'm going to run with that. So when we're talking about money being spent well, and we have this, it is dangerous to do public math, but if I recall, if you have two fractions, you have numerator, denominator, numerator, denominator. And I said, numerator over here on the earning was the money.

And then you, all of you are the denominator, the exchange. And then over here, we put the burrito, right? And then we had the money also. And if you have a numerator, denominator, the same, they're both money, we can just cancel that out. So now we have you and the burrito, which feels kind of weird, you know?

So I probably should use a different example besides a burrito, but I guess what I'm getting to is the money kind of does cancel out and what you end up with is you doing everything you can to earn this thing, and then you, not you guys in this room, but most people telling me I'm just not good with money.

And the effort on the earning side, and then the disconnect on the spending side drives me absolutely crazy. You have the brain surgeon that literally does surgery on brains. Who's tells me I'm just not good with money and I'm just like, fix your brain. I guess I, what else should I tell him?

You know? Um, it just, it gets me because you see all of the sacrifice all of the time, not with family. All of those things were perhaps trying to get back as we look to retire, maybe a little bit quicker than the next guy. We have these things we want.

Those very things are what we're giving up in order to get this money. So what I say here is not anything to do with budgeting or saving, but when you recognize all that you offer for the earning, all I want is for everyone to also recognize that they need to put effort into the spending side of it.

And what's great about this is if that equation really is just canceling down to be, you know, simplifying down to be you, the work necessary for you. Is to figure out what you want to spend your money on truly. And one fun thing that we do at YNAB is we never, ever tell people what to buy, how to spend at all.

How dare I, I'd be telling them to buy clamps for their woodworking shop. It just doesn't land. Well, you know, but what moves me doesn't move you. And my favorite thing is to hear people tell me the crazy. And those that's Jesse saying crazy, the crazy things that they spend their money on.

Now, do they end up spending less? No, they spend differently. There's no such thing as a spending cut, a spending fast. I'm going to cut back. You're just going to spend differently. You're going to spend money on some stocks and bonds. Yes, because you know, you're going to spend it on something even better later.

Right. And it might be a little bit of healthcare. It might be, we were just on an Alaskan cruise in July and this lovely couple won the event of how many cruises have you been on? They had been on 61. I did the math thinking five nights. That's that's I did the math back then.

I'm not doing it in front of you now. Three, I mean a year, it's a year of cruising, like on a boat. I lasted five days. That was enough for me. But, um, but I, I was watching them. They love it. They love something about cruising. They just love not for me once every 10 years.

Cool. I'll go not for me at all, but I could, I'm looking at their faces realizing they thoroughly enjoy this. They really, really do. And how dare I question at all their value placement on this is what we love. How dare I, they spent all of that time, effort, and energy to earn that money.

They have every right to spend it. They're spending of themselves. And so what we teach people isn't how to save. It's not how to budget. It's how to spend. We just teach four very simple rules. We want people to feel the trade-off of if I do this here, I can't do this over here.

Um, as you mentioned, buy now, pay dearly later. That's what I call them. I never will just say pay later. You always have to say, buy now, pay dearly later. And, um, we did a little funny April fool's video a while ago. You know, there's one called after pay.

And so we, we launched a fake product called, uh, well, there it was called before pay, you know, like, Hey, uh, save up for it and then buy it kind of a thing. Um, and that it just look up the video. I thought it was funny, but, um. We have all of these things, all the FinTech, like people will sometimes place my company in FinTech.

They'll say, well, you're a FinTech app because we use a computer basically. Um, but we're, we're really an education company that sells software to keep teaching people. That's what keeps us afloat, but we're teaching people a way of thinking about their money. And a lot of FinTech, if I can throw them all with a large, you know, broad brush under the bus, a lot of FinTech is built for speed because technology gives us speed out of the gate and it is built to.

Um, Distance people from their money quickly to have them not understand what after pay does to have them, to have things be a little more obfuscated, to have them not feel, to have them hear the Bing of Apple pay. That's been heavily engineered to be. Oh, so delightful and to be fast and just to not feel it.

Now, should you spend money at Chick-fil-A? Oh, I forgot. You mentioned Chick-fil-A. I see. So that wasn't, that wasn't for you. That was for me, but should you spend money at Chick-fil-A and should it be fast and convenient if that's what you want to do, but if all of FinTech is trying to have you be unaware, unintentional, thoughtless about where your precious money goes, what we try and teach people is to have them be intentional and aware and thoughtful about where their precious resource goes.

It deserves that respect. It deserves that little bit of intensity. It deserves the neurosurgeon sitting down and saying, I spent 12 years learning that. I think I can spend, you know, two or three hours learning this. It really is helping people do the self work of figuring out how you will spend.

So while this is a beginner track where you're kind of saying, Hey, I'm just getting started and I have no idea where you're all at on this bogleheads journey, but make sure, you know, at the end of the day, as you accumulate this wealth, and that is a fantastic thing.

As you accumulate this wealth, be very thoughtful, do the work necessary to know exactly how you want to spend that wealth also, it could be for inheritance. That's lovely. It could be for some charity. That's lovely. It could be for 50 cruises. That's lovely. All of it is right.

If it's resonant with you, you did all of the work to earn it. You did all of the work to spend it on investing. I'm going to say, and you need to do some work, important work to figure out to make sure that resonance carries through where that money that you earned is also spent well.

Thank you. you