♪ California's top casino and entertainment destination is now your California to Vegas connection. Play at Yamaha Resort and Casino at San Manuel to earn points, rewards, and complimentary experiences for the iconic Palms Casino Resort in Las Vegas. ♪ Two destinations, one loyalty card. Visit yamaha.com/palms to discover more. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less.

Today on the show, we're gonna talk about some money games that you can play to help you achieve that goal of financial freedom in less time, hopefully 10 years or less. And no, when I say money game, I'm not talking about Monopoly or Cash Flow Quadrant, although that's a useful topic, perhaps that's a worthy topic for another day.

Today on the show, everything I ever learned about wealth building, I learned from playing Monopoly when I was a child. That's true. But we're not talking about board games today. No, we're gonna talk about some psychological games that you can play with yourself to change your behavior. There's a real balance in life between knowledge, information, and behavior.

You need to know, but at the end of the day, it's changing behavior that makes a difference. It's action that makes a difference. You can sit around and dream all you want about checks floating into your life and money flowing into your mailbox, but unless those dreams and those visions actually change your behavior, nothing will actually change.

Now, the paradox is this. If you can change your thoughts, if you can change your information, if you can change the ideas that you hold in your head, then you can naturally change your behavior a little bit. But it goes the other way too. Sometimes you can just change your behavior.

You can change the ideas, you can change the thoughts, you can change the things that are in your head. You can change your ability to believe in the future. So these two things function together. But I wanna focus today on little behavioral tricks, behavioral games that you can play with money.

And my hope is that these little games will help you to make changes. At the end of the day, for most of us, our money is generally not a matter of life or death. Very few of us are at death's door where a quarter misspent is going to make a difference.

We're just not at that level. Some people are, but you and I are not at that level. And so it can be hard to keep your focus on actually behaviors that matter, keeping engaged in those behaviors that matter, if you don't have some fun games. And the reality is, without games, without benchmarks, it's harder to stay the course over years and decades that it may take you for you to get out of debt, for you to save money, for you to become financially independent.

So you need games. And you'll see this if you study a little bit about design, modern design. You'll find that most people who are designing some form of financial program or some form of really any kind of app now, it's kind of standard for application development for a mobile device, there's gotta be some game associated with it.

That's why when you're driving around using your GPS program, if you're using a program like Waze, you've gotta collect candy as you drive or get points for helping certain things. This is called the gamification of life. Basically, let's have levels, let's have benchmarks. And you can see this in successful personal financial advice as well.

You see this in Dave Ramsey's Baby Steps. You gotta have these benchmarks that you can reach. You see it in the stages of financial independence that I espouse and that I teach. All of these benchmarks really can make a big difference in time and in your life. But some of them are just too big.

And some of them are not everyday. So today I wanna give you some everyday games that you can play. I generally like to start with income, but for this show, I'm gonna start with expenses. And more importantly, I'm going to start with debt repayment. And let's flip the order a little bit because most of my games really are on the expense side and the debt repayment.

I have a few on the income side, but it's a little harder to keep this concept running through. So let's begin with that. So first, let's assume that you are in debt. If you are in debt, and if you are working to get out of debt, which is a majorly important component of gaining your freedom.

As an individual, if you are an individual that does not owe anybody any money, you will have huge amounts of personal freedom as compared to another person who does owe people money. If you owe a house and you don't have any mortgage payment on it, you will be much easier, it'll be much easier for you to move from where you live now to a place that you'd like to live than it will if somebody has a house that has a mortgage payment on it.

Why? Well, if you don't have a mortgage payment, you can keep your current house empty while you put it on the market, and you can go and buy another house. It's even better, of course, if you're renting, if you don't have any debt there where you have to even sell the house.

But the point is, if you don't have debt, you have more flexibility. If you don't have credit card debt, then you have tremendous flexibility with your ability to downsize your income, change your location, change your job, et cetera, if you don't have a lot of expenses being pulled out to make credit card payments from previous overspending.

If you have no payments, no required payments, you can maintain tremendous flexibility in your life. If you don't have a house payment, if you don't have a car payment, if you don't have a credit card payment, you can go and you can hike the Appalachian Trail, you can go and backpack around South America, you can go and start a new business, because you could probably get by on what you can earn minimum wage.

So, being free of debt is a massive step in your goal of achieving financial freedom. But often, if you've been deeply in debt, as I sure have in my life, you find that it's a long, hard slog. And you probably have found that it's hard to stay focused on getting out of debt.

So let me give you some games that I have played and that I recommend when you are getting out of debt. Let's start with credit card debt. The first game that I like to play if I have credit card debt and I wanna get rid of it, is I like to keep it front of mind.

And I like to make sure that I make progress on paying off that credit card debt every single day. And this is really easy in the modern world. It's much easier than if you were writing out a check in the old world, paper-based world. But today, when you have a smartphone app or a computer connection to your credit card company, and they can do automatic transfers from your bank accounts, you can make little micro payments.

And so, when I've been in credit card debt and wanted to get out, and this is my number one goal, for whatever reason, I use the credit card, I built up the balance, but now I'm getting out of credit card debt, then I make it a daily goal to every day owe less money.

What I do is every single day, I make a micro payment on my credit cards. That micro payment might be $1.11, but I make a payment every single day. Now, in terms of the actual impact on your debt, it ain't much. $1.11 comes out to what, $30 something in a month?

So it really doesn't make that big of a difference in terms of the numbers. But it makes a big difference in my psychology. It makes a big difference in my keeping that goal front and center. If I recognize my goal is to get rid of this debt, I'm gonna make a payment each and every day.

Now, long-term listeners will, of course, recognize that this strategy might be in contradiction with another strategy that I've talked about, namely the value of accumulating money and having it available to you in a checking account or a savings account, and then making large lump sum payments on your debt.

Both of these things, I think, can be true. Generally, how I have handled this in the past is I accumulate money in a separate account, but then when it's time to get rid of the credit card debt, then I just simply focus on it and I make a little payment every day.

And by simply doing it literally every day, which only takes a couple of minutes, yeah, it can be a little annoying to have to open up the websites. It can be a little bit annoying, but it's easier if you put the applications on your phone for the financial institution and just make those micro-payments.

But if you do it every day, it keeps it front and center. And any time that I've ever had debt and wanted to get rid of it, any time I've ever had credit card debt and needed to get it gone, that strategy is the thing that has always kept me focused.

And it feels like you're winning. When you get into debt and you're trying to get out of debt, you're working your way out of debt, I think you face a situation wherein you look at it and you say, "This is enough. "This is too much. "For whatever reason I use these cards, "this is now time to get rid of these things." And then I make it a goal.

Every single day, I'm going to owe less money than I did the day before. And you can do that. Now, the game I play is the day that minimum payment posts. I pay that big chunk then, and then you pay just bigger chunks along the way. A couple of practical tips, things I enjoy doing, is rounding out the numbers.

And often, let's say that you owe $10,000 on a credit card debt. You make $1.11 payment, payment of $1.11. Well, now, of course, your balance is $9,998.89. Well, that 89 cents is kind of annoying. So you make a payment of $1.89. Now, your balance is 9,7-- 900, let me do my math right.

$9,997. Then you look at that $7 and you think, "Dollar is just really silly. "I'm just going to go ahead and make a $7 payment." And you make a $7 payment. And then the next day you look at that and say, "I have a $9,990 balance. "That's annoying. "I'll make a $90 payment." And you make a $90 payment.

And then you don't have any money left in your checking accounts. You make a $1.42 payment the next day. And then a $1.01, and then a $1.03. But every day you make a payment. And along the way, you just cut it down. Some days you pay a dollar. Some days you pay $4.13 to get it to an even number.

Some days you pay $100. Some days you pay $900. But that daily focus on paying down the credit card debts a little bit every day has for me always been so motivating. So motivating. Just a practical tip for you. If you have multiple cards, I think generally anybody who, I always have, it's what I would teach.

It's what I do teach. I have a whole course on this. But if you're using credit cards and you have multiple cards, a very practical way to handle the accounting of it is make sure that you always just use a slightly different number for each transaction so that you can identify what's actually coming in in your bank statements.

Because you'll have so many payments posting, 'cause you're posting one every day, you'll be disconnecting. You don't know which is which, so you can reconcile everything in your bank account. So you make $1.01 on card A, $1.03 on card B, $1.05 on card C, $1.07 on card D. And then the next day when you make tomorrow's payments, you start at $1.11 on card A, $1.13 on card B, $1.15 on card C, $1.19 on card D.

So when on Monday morning you have 15 transactions that all hit, you can reconcile everything very easily. So there's just a little practical tip. If you're trying to get out of debt and you're struggling or you're not making much progress, give my idea a try. Give it a shot.

See if it is helpful to you. Because for me, it's always been something that has kept getting out of debt at the front of my mind. Now, I've been in debt, I've been out of debt. I prefer to stay out of debt, but there are situations when it just simply just makes sense to use debt.

But I think when you're in that situation, if you've experienced the freedom and the joy of not owing any money, it's really nice to be debt-free on the other side. So give my strategy a try. See if it makes a difference in your behavior. Now let me couple that one with one that's also related to expenses.

When you save money, and here I actually mean you save money by not spending it, not you save money by buying something that you don't need. But when you come to a financial decision and you decide not to spend money, I think you should reward yourself by actually making a transaction.

So if I'm at the bookstore and there's a book for $19.99 and I look at the book and I say, I'd really like to read this book and I really wanna own this book. But right now I'm focused on frugality. I'm gonna choose not to buy this book for $19.99.

I'm gonna wait and I'm gonna put it on a list. What I recommend you do is pull out your phone and make a micro transfer of $19.99 out of your checking account into whatever your highest financial goal is. If you're saving money for a goal, just make a $19.99 transfer into the account that's earmarked for that goal because all your accounts really in my opinion should be earmarked for specific goals.

Or if you're getting out of debt, pull out your phone and make a $19.99 transaction, pay an extra $19.99 towards your credit card or towards your car payment or towards your mortgage, something like that. To just pull it out and actually make the transfer. Or let's say that you are going out to dinner and have been in this situation so many times.

You go out to dinner, you wanna have a glass of wine or you wanna have the dessert. You look at it and you say, "I don't really need it. "I'm already having a nice experience here. "Do I really wanna spend the extra $7.99 "or the extra $12 on this thing?

"I don't really need it." Now of course if you wanna spend it and you decided that's worth it to you and you can afford it, fine, go for it. But when you make those decisions, you look at it and say, "I'm not gonna do it." Reward yourself by funding a goal that you have.

If you've got a travel account and you're saving for a big trip, go ahead and make a $7.99 transfer into that account. And then that way when you're drinking a glass of wine in Florence instead of drinking a glass of wine in Missoula, then you have the opportunity to say, "Hey, I'm glad that I said no in Missoula "so that I could have this glass of wine in Florence." So just reward yourself by actually making a transfer.

Next, you can do this with other debts as well. So what about a car payment? Well, try to make an extra payment. And here, the strategy is the same with a car payment and/or with a mortgage payment. The mortgage payment is a little bit more feasible. But here's what I recommend.

Create an amortization schedule for your mortgage. And if you don't have, if you didn't do one right at the beginning when you had your first monthly payment, then just start wherever you are. But create an amortization schedule and calculate how much of each month's payment is going to the principal of the mortgage versus going to interest of the mortgage and create the amortization schedule.

And then what I do is simply make two payments. And make your normal payment, let's say your normal mortgage payment is $1,500. But your principal payment for next month is $232.75. Or write two checks. Write your $1,500 check and write your $232.75 check. Now it would be really hard for you to make two $1,500 checks.

But it's not that hard for you to make a $1,500 check and a $232.75 check. It's not that hard. But yet that makes a massive difference in your timeline of paying off your mortgage. And it makes a massive difference in your overall interest costs, et cetera. And because you can create the amortization schedule and because in the beginning of having a debt payment, so little is going to principal, you can make those extra checks.

And once you get in the habit of it, then you just keep it up. And if you run an amortization schedule, if your normal monthly payment is $1,500 a month, yes, because you're paying your principal, your interest, your taxes, and then your insurance, your total bills will be $18,000 in that year, in your first year.

But your total cost of making those extra principal payments will be less than $3,000. So with an extra $3,000, you can cut a year off of your mortgage. And so you wind up naturally paying a 30-year mortgage like a 15 or whatever your personal term is. Those little extra payments go into making a big difference.

But because they're small and they're weird numbers and such, you can fit them in. You can fit in an extra $232, but you'll thank yourself decades down the road. Any kind of debt that you have, make it a game and try to pay a little bit extra, and you'll be out of debt much more quickly.

This has become, to make these micropayments, for most of us, it has become largely really free to do it to you. If you, I think most of us would do this, but if you use electronic access to your bank, electronic credit card payments, if you use some sort of electronic bill pay, then you can do this for free, and you can play these games with these micropayments.

Will your mortgage company really want to receive 22 different checks in a month? Probably not, but that's not your problem. Let them figure it out. So the way that I do this is I use an automatic bill pay service from my bank. I personally prefer to initiate all payments to debts except credit cards.

So what I teach, even in my credit card course, I think credit cards should always, credit card payments, a minimum monthly payment, should always be initiated by the credit card company. That way you make sure that, and it should go to a separate account that's just for credit card payments.

That way you make sure that you never, ever, ever miss a payment, because you know that no matter what, a minimum payment is gonna be paid on every single one of your credit cards. So I believe that's a superior strategy than you manually paying credit cards, because it's a danger that, especially if you have a lot of credit cards and a lot of payments, and minimum payments due here and there throughout the month, it's just too big of a danger that it would harm your credit score to ever be late on a payment.

And so the goal is never be late on a single payment. And you can do it. If you're someone who's struggled with being late in the past, you can do it. I am in my mid-30s. I have had credit accounts since I was 18 years old on my 18th birthday.

And to date, I have never been a day late on a single payment in my life. And that helps massively on your credit score. It's one of the most important things. Well, it's not that hard to do. You just sit down and you analyze the problem and say, "I can never afford to be late on this." So either need a really good tickler file, maybe you have a 43 folder system or something like that, that you actually sit down and use.

But my observation, very few people are that diligent. Very few people sit on a desk every single day. Very few people have a good paper system. So if that's not you, if you're not gonna become that kind of hardcore nerd, set up an electronic system that works for you.

So with your credit card payments, make sure that every credit card always has an automatic bill pay so that you never miss a payment. Now, with other things, sometimes generally mortgage companies, you have to initiate the check. So when there's a debt that's on your credit report, make sure that debt gets paid no matter what.

So it's good for you to have a standing automatic mortgage payment. But generally, if that's your only other debt, you can remember that. But if you have a car payment or whatever, make sure that your bank initiates sending of a check. It's a little safer in any kind of debtor situation for you to keep all the control and use your bank's functionality of sending out a check or sending out a payment than to give your creditor electronic access to your checking account.

I concede the argument that it's not perfectly safe to let a credit card company access your checking account on their end automatically. That's not perfectly safe. But I think the benefits outweigh the risk in terms of the benefits of making sure that you can juggle multiple credit cards and never be behind or be late on a payment.

You feel free to run your own finances as you like. But in these situations, given bank bill pay, et cetera, you can use your bank service, and most banks don't charge for bill pay. They want you to use the service. So here's what I do. Set up an automatic bill pay for your standard account.

Let's say you're paying your mortgage, and your standard mortgage payment is $1,500 a month. Set that up so it goes out automatically on the first of the month for $1,500 a month. But then set up a second biller that just clearly, where your checks are clearly gonna be labeled principal payments.

And then feel free to make micro payments to your account. Super easy. You save $200 by not buying something. You decide, I'm gonna pay off my mortgage, and I'm putting a little bit of extra money towards my mortgage payment. Pull out your phone, click that second option for the second bill pay entry.

Put $200, click send right away. Your bank will mail a checkout to your mortgage company. It'll go out in a day or two, and so what if your mortgage company has to process 10 different principal checks? That's their problem, not yours. Won't cost you any money, but it will help you get out of debt faster.

I want to again reemphasize that what I'm describing to you, the system that I'm describing here, contradicts advice that I have frequently given not to make small extra payments on something like a mortgage. The assumption here is that you've decided that at this stage in your financial life, it makes more sense for you to pay off the mortgage.

The assumption is that you have cash, and the assumption is that you're in the kind of situation where you have a regular income. If I didn't have a regular income, and if I hadn't decided to pay extra on a mortgage, I wouldn't do that, and we'll talk about games of saving money in just a moment.

But I still think this is worth discussing, because first, there is big benefit in being out of debt. People who are in a stable income situation do benefit by making payments on, on extra payments on debt. And in this, by using these games, you can change your actual spending behavior.

There is a question that we always face in personal finance. Is it better to pay off debt or invest? Well, there are, the answer to that question is mathematical. I've done an hour and a half show on it, so I'm gonna skip, refer you back to the archives for that hour and a half show.

But the answer is mathematical. Whichever option gives you a higher rate of return is the superior option. So in general, if your debt is at a low interest rate, such as 0% credit cards, such as low mortgage rates, et cetera, kind of good, safe debt that's at low interest rates, well-financed, in general, you're better off investing than you are paying off debt.

Unless, in my opinion, unless there's a behavioral change that you can make because of the nearness of being able to pay off debt. And unless you can gain benefits of being debt-free that you can't gain with having extra money in the bank. So being out of credit card debt can give psychological benefits that are very motivating.

Not having a home mortgage can give psychological benefits that are very motivating. There are some people who are very comfortable with investing who won't have any behavioral change if they have a $200,000 mortgage and $200,000 in their investment account. And they'd rather invest the money than pay off the mortgage.

Those people exist. My guess is you're probably not one of them. Because I think, maybe if I make it up a percentage, maybe 20%. 80% of people, I think, would be far happier, far more confident if they had no mortgage. And then they were just a little bit behind in building up their investment account again.

Now back to modifying behavior. If getting out of debt is such a pressing, close personal goal that it causes you to change your behavior, it's worth pursuing it. When you look at the success of the gazelle intensity that Dave Ramsey teaches, and you look at the millions of dollars of debt that have been paid off, it comes not because of the mathematics of paying off debt being superior to the mathematics of investing.

It comes because of the change of behavior. When somebody grabs onto a short-term goal, such as, I'm gonna get out of debt, and if that goal is within an appropriate timeline, a year, two years, something like that, where they can grasp it and they can believe it, then it changes, it has the opportunity to change the behavior.

So it has the opportunity to cause a person to work more, so that they earn more. It has the cause of a person to spend less, so they can pay extra on debts. And it seems to be much more motivating than the people who change their behavior to just put more money in their 401k.

Now the trick that you can use if you are investing, let's move now to investing. The trick that you can use if you're investing is try to make your goals very close at hand, and try to always take and put a game for yourself where you believe you'll be able to, so that you'll be able to achieve a certain goal within a measurable timeframe.

Make sure those goals are not so big that it's gonna take you 10 years to reach them, and make sure that there's a reward associated with them. For some people, spending rewards are appropriate. For example, if I can save $10,000 towards my financial freedom, and I can put it in this account here, towards my big Fi account, and I can do that by June 1st, then I'm going to allow myself to spend this money on this thing that I really would like, but I don't really need it over here.

So some kind of trade-off like that. To game an investment strategy is gonna require a little bit more thought and some more personal application than as simple as paying off debt. But here are some thoughts, so some recommendations. First, it's relatively easy to have many different bank accounts in today's world.

And I would recommend that you always name your bank accounts, especially if they are accumulation goals. So if you're saving for a house, make sure your bank account is named House Savings Fund. If you're saving for a car, make it Car Savings Fund, and keep that separate. Don't just have one account where everything is in there, unless you have, maybe you have a bookkeeping system where it's everything in one account, but you keep separate accounts in an artificial structure, that's fine.

But make sure you have a separate account so you know how much is going in there. And then have a first and foremost goal. So if you're gonna change your behavior so that you can fund an investment account, you've gotta have a primary goal. Now you can put savings and investments on auto payment.

If you have a regular income, and you say, I'm gonna put this money, defer this money into my 401k, I'm gonna automatically put aside $200 into this account, $300 into this account, and $1,000 into this account. But then have another account that you're going to play the game with yourself.

Of if I don't spend this, I'm going to save this money into this other account. Probably that's an account that's fun for you. Something like travel, or something that you think is fun, giving account, I don't know. But have something where it's gonna be meaningful for you to defer that $20 expense to the future, and then simply put it into a certain account.

And hopefully the account is at a scale where you can actually see it grow. That is the key. If you're having behavior modification, where you're forcing yourself to spend less so that you can accomplish something, now you can start to make some progress. The end of the day, most of the games that you are going to play are going to be related to having a reward for lowering your expenses.

The goal with expenses is to get all the ones that there's not a positive benefit to as low as possible. There are categories of expenses that you gain a benefit from. Give you an example, that book example I used. 1999 at the bookstore. Should I spend the 1999 or not?

Well, welcome to the wrestling of my life for the last, for all of my life. Do I spend the 1999? On the one hand, I probably don't need to spend the 1999 because I've got plenty of books that I haven't read. I probably should read all those books first.

And it adds up quick when you spend 20 bucks here, 20 bucks there, pretty soon you're talking real money. But on the flip side, the idea that may come from a 1999 book, or the motivation that may come from a 1999 book, could allow me to make $9,999 next month.

It could allow me to save $900 this month because I learned some, I gained some benefit. So the way that I handle expenses like that is by trying to set a target and funding them. So for example, one of the fun games that I think you should make is set aside about 10% of your income and earmark that 10% of your income of always investing in yourself.

Investing into developing yourself. Most of us are, we are the economic engines that drive us. And so we wanna invest first in ourselves. And so set aside a budget where you're just simply choosing a percentage of money that goes into this so that you can spend freely on things that you're investing in yourself.

I think you pick the number, 5%, 10% is fine. But let's say 5%. Well, 5% of $50,000 is $2,500 a year, a little about $200 a month. Now, if you give yourself a self personal development budget of $200 a month, you can do really well. And now you always have an account so you can make that $1,999 purchase.

You just simply look and say, do I have money left in my personal development account? Yeah, I do, so I'll buy the book and make sure it's earmarked under personal development. Expenses like that should be done intentionally. Think of it like research and development for a company. A company who's gonna grow and is gonna have a long-term future has to commit to spending money on research and development at every stage along the way, really regardless of how they're doing.

If the company is doing poorly and they cut back on their research and development budget, are they really gonna start doing better? And if a company is doing well and they cut back on their research and development budget, are they going to keep doing well? Think of personal development as research and development for yourself.

So you should always have an account. That's the account that you buy books out of. That's the account that you buy courses out of. That's the account that you buy conference tickets out of. That's the account that you pay consulting fees out of. This is all self-development, personal development.

And what I do is I categorize those accounts based upon percentage. I'm gonna invest a percentage of my income. Now, as your income goes, it can be tough to spend the money, right? It's one thing to invest 5% into yourself when you are making $50,000 a year. That's really doable.

Couple of conferences a year, couple of dozen books a year, audio course here or there, you've spent the money. It's a little harder to invest 5% in yourself when you're making half a million dollars a year. More than that. But the principle still holds the same. That's your research and development budget.

Now, that's very different than an expense that's simply a consumption expense. So the glass of wine example at the nice dinner out, that's obviously a purely a consumption expense. Would it be pleasurable to have the glass of wine? Sure, probably. Could I save the money on it? Yeah, I do, I could.

Is it gonna cost me anything if I don't drink the wine and save the $9? No, it's not gonna cost me anything. I can't make an argument that somehow I'm gonna be wealthier or happier because I had the wine. Yeah, you would enjoy it, but it's just one of those things.

So expenses like that, you set it as a goal of saying, I'm gonna get this as low as possible. Now, when you have a pressing goal and you can identify expenses that don't serve you in some way, it's not your vitamin budget or your nutritional supplement budget or your personal development budget, which needs to be managed in some way that really makes sense, but not put to the zero, then play the game.

So you'll see people who are getting out of debt. They'll do things like not spending any money this week or not spending any money this weekend. If you are prone to thoughtless spending on a weekend, set yourself a goal of saying, how can I not spend any money this weekend?

Doesn't mean you have to sit at home and can't do anything fun. It just means that you have to make different choices with the things that you do consume such that they don't cost you money. Or you say, I'm not gonna buy any new clothes during this year. I have plenty of clothes.

If your weakness is something like clothes, I'm not gonna buy any new clothes this year. We're assuming you have enough clothes to look presentable and you do clothes spending because that's just something fun or if the guy is, I don't know, I'm not gonna buy any new guns this year.

So, or whatever, I don't know, think up your own thing. But by setting a target that's long and stretch it out, you change your behavior. So I'm not gonna spend any money this month. We're not gonna buy food this month. We're gonna eat the pantry. And then make sure you save that quickly over into your savings.

Or another thing, another game that I play with myself when I have an expense is, let's say I have an expense. This is not an expense that needs to be maximized like a personal development budget or an education budget, things like that. Rather, this is an expense that needs to be managed.

Can I come up with a way to do this thing and not lose money on it? Assume for a moment that you would like to buy a new car. Well, calculate how if I bought this new car, could I make sure that I pay for this car exclusively from money that I earn with the car so that I don't lose money?

You have a normal income, normal expenses, you're building wealth, you're saving money, but you'd like to buy the new car. Well, are you willing to drive the car at nights and on weekends, three or four days a week, to make money with Uber until you can pay for the car with your after-tax earnings from Uber?

That would be the kind of game that changes your behavior. You wanted to buy a thing, but you didn't wanna spend money on it, so you changed your behavior and you worked more in order to buy the thing. Now, Uber is not a particularly financially productive thing. You're making six, seven bucks an hour, basically.

Most people who drive for Uber don't know how to calculate true cost. So as a full-time thing, it doesn't actually work very well. But where it does work well is as just a part-time thing. So your monthly car payment is gonna be $300 a month, and your goal is to earn $300 every month driving on Uber here and there when it's convenient for you.

There's a game. Now, you can justify to yourself your new car in a way that you couldn't before because you've changed your behavior. You can do this when you buy things. For example, you want to buy a boat. Can you find a boat that's such a good deal that you can buy it, use it for three or four years, and then sell it at the end of three or four years and not lose money on it?

That's a real skill involved with that, but I think it's doable. I recently did this with my campers and trucks and things. I wound up buying a total of two campers and two trucks. I bought them all, used them all for about a year or so, put money into them, fixed them, et cetera.

But at the end of the day, because I bought them right, I was able to eventually sell them all, and I didn't come out with any net loss. I didn't make money, but I didn't come out with any net loss of money. So I recouped all the money out of them.

Was it a totally a win? No, I could have invested the money probably productively, but I wanted to have them. I wanted to use them. I did use them. And so the goal was simply, can I buy right and can I be really good with how I manage things such that I can sell them eventually and not lose money?

Now, in my case, the only reason that worked out the way that it did was because one of my trucks got stolen and I negotiated pretty tough with the insurance company. And I got a very nice insurance settlement, which made up for some of the depreciation that I suffered on other things.

But one of my campers, I bought it and doubled my money when I sold it, my truck camper. I bought it for half price, used it for six months, and then sold it for double my money. So it wasn't much money, but it's the game of it. It's the game of saying, okay, I wanna have this thing that I'd like to do.

This is a consumptive expense. This is a bit of a luxury. How can I play a game so that I can justify this so that I'm changing my behavior? How can I adjust my behavior? Because if I just keep spending, spending, spending and buying all the fun things that I'd like to have, I won't have any money.

I won't be financially independent. I won't be financially free. I have a lot of nice stuff, but I won't be financially free. I wanna be financially free, but I'd also like to have some fun. I don't wanna sit around and be a miser just stacking my gold coins up to the roof and never doing anything interesting.

So is there a game I can play that allows me to do that? Can I come up with a way to buy this thing and not lose money? You're living in an apartment. You'd like to buy a house, but you can't justify it. Well, what's your game? Buy the house and get two or three roommates.

Are you willing to have the two or three roommates in your house paying your mortgage for you? Go for it if so. Now you can play a game that makes you enjoy having your own pool and your own big kitchen and your own garage and your own things that you can entertain or do whatever you want with, and your roommates pay the mortgage payment for you.

That's the kind of game that makes a difference. Notice that every example that I've given you so far is changing your behavior in some way so that you can actually make progress. With investing, I did a whole show on get a little bit richer every single day. Make it a goal to get a little bit richer every single day.

Well, how do you do that? It can be difficult, depending on the swings of your investment accounts if you're tracking your net worth on a daily basis, but in general, it just simply means saving money every single day. So if you're committed to getting a little bit richer every single day, just make sure that you save money every single day.

Many people do this with the simplest and lowest of budgets with regard to how they manage their cash. Knew a guy one time, he was using the strategy of funding a vacation. He wanted to fund a vacation. So his rule was anytime he got a $5 bill, he had to save it.

You got a $5 bill, given it and change, $5 bill went into saving every single day. Well, if you do that, and if you spend cash and go here and there, I mean, it adds up pretty quickly. He needed a few hundred dollars so he could go on vacation, and his way of playing his game to get it out of his budget was anytime there was a $5 bill in his wallet, that was saved.

I think it's a good game, a really good game. You can play this with rounding up. Some people do it with, if you ever get coins as change, they always save the coins. Or some banks offer this program where you spend $1.62, they'll round it up and put 38 cents into a savings account.

I say do it with an automatic transfer. Set up an automatic transfer every single day into your wealth building account, where every day, a dollar goes from your checking account into your savings account. And then set yourself a goal of once a month doubling it. Things like that, where it's a mental game, where every month I'm gonna double this.

I'm gonna start with a dollar a day, but then a month from now I'm gonna do $2 a day. Then another month I'm gonna do $4 a day. Then another month I'm gonna do $8 a day. Well, how much are you saving if you can play that kind of game with yourself at the end of a month?

Sorry, I meant at the end of a year. Well, it's a couple thousand dollars, too much. So the game, probably that's unbelievable for many people that they could actually do it. So set a more reasonable game, 10% increase. That might be a better thing. I'm gonna save a dollar a day, and then I'm gonna increase it by 10% every month.

That's probably a more reasonable way. So at the end of the month, you're saving hundreds of dollars. These games, where you really commit to it, make a big, big difference. Now, let's talk about income. Income, I think, is a harder game to play depending on how your income is structured.

But what I would say is set yourself some kind of target. If you are in a game, if you're in an income-creating situation where there's a direct connection between your activities and your income, like sales. If I do a certain number of sales calls, I'll generate a certain number of transactions in the fullness of time.

So I'm gonna make a game of doing this number of transactions. That's easier to play games with your income. But you could still set it. Set yourself a target of a certain size of bonus. Set yourself a target of increasing your income by a certain amount. If you've got something that you'd like to do, some kind of frivolous experience, I'll give you one of mine.

There's a company that makes leather bags called Saddleback Leather. They're super cool if you like leather bags. I do. They last forever, blah, blah, blah. It's a luxury item. I cannot justify it whatsoever. I just think they're super, super cool. They're not particularly practical, but they're beautiful, and they fit my, I like it.

I like the guy who started the company and his family live in tents, which I think is pretty cool. Tents in, safari tents in Texas. But this kind of thing, that's one of my rewards, I have an income goal. When I reach this certain income goal, I'll go ahead and buy the Saddleback Leather bag that I want.

Now, I can't justify, it's certainly not a, it's certainly not an expense that I can defend. It's not something that I can say this has to be done. But it motivates me, and it's a token of a certain level of financial income that I'd like to create. Now, your token may vary.

Your token might be to go ahead and buy the Maserati. Your token might be to go ahead and buy the Beach House. Your token might be to go ahead and buy the new pair of shoes. We all would have different tokens. But the point is, if the token is causing you to make a change, it's not actually an expense, it's an expense that you can justify from the business perspective.

Let's say your goal is to buy the Maserati. Well, you set yourself the goal. When I get the job, earning this amount of money, then I'll go ahead and buy the Maserati. If the Maserati is motivating to you, then it actually is having a behavioral change on you, and you do the steps needed to get the certain kind of job.

And so that's how I like to justify kind of frivolous expenses. I would never justify a silly leather bag as making a difference, but because it's one of those frivolous things that I'd like to have, well, how am I gonna justify it? Can't justify it, just say I have the money.

Of course I have the money. Could go and do it any time. You could go buy the Maserati. But when you justify it and say, how can I change my performance, then there's, you can, the game is afoot. It really works. I'm gonna change my performance in order to get this certain outcome, and then with this certain outcome, then I'll go ahead and get this thing.

So that's the best I've got with income. I struggle to know other things, I guess other than to say this. One of the things, I think I did a show on this. If not, it's still on my list, but of changing expenses to a very reasonable level of expenses that you can understand.

In my case, it's daily expenses. For example, if you're starting a business and you want a digital business that has a certain level of recurring revenue that comes in every single day, well, set yourself a goal. First goal is to earn a dollar a day. That's doable. Once you earn a dollar a day, you can go to $10 a day.

And once you go from $10 a day to $100 a day, now you can afford to live on your recurring income. And so the money game is just simply daily. How can I build a system where I have $100 a day coming in every day? I'm selling something, doing something, whatever it is.

And that $100 a day is more valuable to you than the $100,000 a year job, because the $100 a day comes in without your direct effort. The $100 a day comes in no matter where in the world you are and now with that $100 a day, you can achieve your first level of financial freedom.

That's the type of game you can play with income that's really powerful, really effective, and it'll change your behavior. Your behavior is gonna be, how do I build the business? How do I automate the business, et cetera? Make up your own games. I think there are other percentages or something that I think a lot about.

For example, a game I always used to recommend to clients. When you make a raise, save half, spend half. Save half, spend half. It's simple, it's intuitive, and it's a game. Anytime you get a raise in income, before you get the first paycheck, set up a new automatic transfer of half of the raise, half of the increased paycheck to your most important savings goal.

Or simply with levels of expenses. How do you do it with levels of expenses? Really good one is save half. If you always save half of your expenses and set that to be the goal, then if you wanna increase your lifestyle and spend more money to have other luxury things that you care about, well, you can do it.

It's not like you have to save everything of the increased money. Just always save half and spend half. And you'll automatically achieve your goal of financial independence while also simultaneously automatically achieving your goal of luxury lifestyle and luxury living. Those are some ideas to get you started. The most important game is gonna be the game that makes sense to you.

So whether it's putting a big glass jar on your desk and putting a dollar in it every single day into your financial freedom jar, whether it's paying a dollar and 11 cents every day on your credit card debt, whether it's setting a goal to earn a dollar a day in a way that doesn't require the hourly wage of your effort, in a way that is sustainable, that grows over time, your goals are the ones that are gonna matter.

But if there's something that's motivating to you and you can connect it to a behavior modification, don't let anyone tell you it's dumb. It's hard for me to, in public, talk about making a dollar and 11 transfer to a credit card 'cause I concede it's dumb. It's a dollar 11.

But you know what? It works. Has worked again and again and again. Every time I've needed it, it's always been there. It's brought confidence. It's hard for me to talk about, it's gonna be hard for you to talk about the things that are silly. But whatever your game is, if it's pulling the $5 bills out of your wallet and saving them up for vacation, do it.

Do the thing that changes your behavior because if you can change your behavior, you change your outcomes in the fullness of time. Those are my ideas. I hope that you have enjoyed them. As I close, I will give you an ad for my credit card course. I have a course called How to Borrow Money Safely and Never Pay Interest Using Credit Cards.

This course was created because I observed a not very helpful argument in the personal finance space where generally people in personal finance are pitted between two camps, either the maximized debt and maximized points or we don't use credit cards whatsoever. I don't have a beef with either of those positions.

Frankly, I think for most people, if they just never use credit cards, they'd probably be better off. But the percentage of those of us who actually do that is very, very small. And I think there are huge benefits that credit cards specifically provide. And credit card lending, if understood how it works and exercised properly and carefully, provides for Americans and I think Canadians and Europeans, although I don't know how much my ideas translate into those economies, but credit cards provide the safest, most secure, lowest cost form of financing that exists.

Now, whether you use it or not, that's up to you. But I do think it's silly not to have it as a backup plan. And I can list out as I do in the course, example after example. And it seems like a paradox. I don't like being in debt.

I'll tell you what, I can tell you a bunch of times where I would go into debt, have been there, done that. I'd do it again if it meant a certain level of results. But to do it well and to do it right requires you to put in preparation long before you ever need it.

A couple of days ago, I was working with a family who went through bankruptcy. And the details aren't important, but the point was that although they went through bankruptcy, they had to, in order to escape a very dangerous situation, they needed money. And the ability to access money using credit cards allowed them to escape a very dangerous situation so that they could keep their family intact so that they could then put things back together, satisfy their creditors, and solve the problems.

But to do it well, you need to be prepared years in advance. Because the worst time to ever get a credit card is when you need one. The best time is when you don't need one, don't owe any money, et cetera. And you can do the stuff that I talk about in that course.

If any of that piques your interest, I encourage you to go by radicalpersonalfinance.com/store, radicalpersonalfinance.com/store, and sign up for my "How to Borrow Money Safely" and never pay interest using credit cards. I have had many, many, many students, and thus far, I've only ever had one refund request for that course.

Some of my other courses haven't gone so well. I've had other people who've said, "Ah, Josh, it was okay." But with the credit card course, I've only had, I'm just thinking, with my financial crisis course and the credit card course, I've only had a handful of requests for a refund.

That tells you something about the quality of it. I've had more refund requests for my career and income course. I still think it's good, but certainly I've had many more refund requests for that one. The credit card course is very, very good. And the one refund request I've ever had for it was a guy who said, "Really good, I just already knew all this stuff." So you judge for yourself.

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