Why you don't have enough money

So pretend you're this guy and you're in bed typing in random country names on Google Flights, checking the prices because you know after the pandemic is over, you're gonna travel the world and see and taste things you've never seen or tasted before. But then you remember, I'm broke. If you've ever been in this situation, then you're not alone. Throughout most of my life, I always found that no matter how much money I made per hour in any of the weird jobs I worked, by the end of the month, I was always broke. It's like somebody had a giant tube connected to my bank account and was just siphoning money away gradually until by the week before payday, I was living on like ramen and eggs.

But I noticed something: the reason I was broke wasn't because there was some third party involved; the problem was me. I was succumbing and falling prey to the three most common money mistakes that most people make. Unless you correct these three things, you'll probably end up in that exact same situation. But if you do correct the mistakes, then you may find that at the end of the month, you'll just be a little bit, you know, your wallet will be a little bit fatter and your tummy just a little bit more full. I said tummy again; I hate that word.

Okay, mistake number one: you're succumbing to lifestyle inflation. Lifestyle inflation is when you start making more money and then, as a result, you start spending more money. You think to yourself, "Sick! I just got a raise. I'm making an extra 300 every month! Now I can probably afford a Disney Plus subscription, I can buy those Nike Air Force Ones, and I can hit the pub tonight with Jim and Rand." Lifestyle inflation, in essence, comes from the weird fallacy that, okay, rich people have nice things, and since I'm making a little bit more money and getting a little bit more rich myself, then I should start buying nice things like the rich people.

But in reality, somewhere deep in your subconscious mind, you know that the reason people are rich is because they have money, and when you spend money, you no longer have money. But you probably already know this; I'm not saying anything new. So how do we solve this problem? Well, first of all, it's an awareness thing. We have to be aware of this thing called the hedonic treadmill. The hedonic treadmill is a metaphor for the idea that an individual's level of happiness tends to return to where it started, a set point, regardless of good fortune or negative life events the person experiences.

So, in essence, you can go balls to the wall and spend money on the most lavish and ridiculous things in life. You know, if you got millions and millions and billions of dollars, you'll always be able to find things to spend the money on, and those things can be really shiny and really cool. But the fact of the matter is, within a couple of days, a couple of weeks, you're just gonna return to that baseline happiness. So if you want to fix your lifestyle inflation and your incessant need to buy things all the time to make you happy, first be aware of the hedonic treadmill.

The next thing to do is to fix mistake number two: you don't pay yourself first. Since you're super efficient at spending every little nickel in your bank account with Jim and Rand, you need to create a safeguard mechanism that protects you from doing that. Something that has your back, even in your weakest, most primal moments, and that is to pay yourself first.

Every single month, you pay the internet company, the phone plan company, you pay Disney, you pay Apple. You're handing out your hard-earned cash like it's a free money day. You're paying all these other people, but you can never get rich if you don't pay yourself. Give yourself some of your own income. Why does everyone else have to take it? Pretty much everyone, regardless of their financial situation, can afford to live on 90% of their monthly income. Like if you learned next month that instead of making three thousand dollars, for instance, you'd be making only twenty-seven hundred dollars, you'd find a way to make it work. You'd stop buying lattes; you'd cut corners on certain things.

It happens to a lot of people all the time. They find out they're not going to be making as much next month or they're not going to be getting as many shifts. They make it work; they survive. But get in the habit of treating your income like it's a 90% thing. Ninety percent you can spend on whatever else you want to spend it on, but that 10% you give to yourself, you put it away and you save it.

We can talk about investing in another video, but if you're not already saving 10% of what you make as a minimum, your net worth isn't growing and you're not improving your situation ever. Just briefly, though: if you have debt, which is a lot of you watching probably, I've been there. It's called college. One of the best techniques that I've heard of is the debt snowball tactic, which was developed by Dave Ramsey. That's basically just the idea of paying off your smaller chunks first. So, your smaller loans—maybe it's a small credit card—then you move up to your bigger credit card, then you move up to your car, and then your student loans.

This kind of goes against the notion that you have to tackle the debts with the highest interest rates first, and while that's mathematically true, a lot of people just don't do it. You know, they didn't get into debt because they were smart with math; they got into debt because they make weak financial decisions based on impulse and emotion. So you need to get impulse and emotion on your side. It's really motivating to pay off your small debts first; it gives you momentum and it gets you stoked to pay off your bigger debts.

You can move on to your other debts, and then you can use the interest that you were spending on the smaller debts to pay off your bigger debts, and you create this debt snowball where you're just used to paying off debts all the time, and it's great. But you can't do any of that if you're just paying the minimum payments on everything and then spending the rest of the money everywhere else. Take that 10% and use it to improve your situation.

Okay, so mistake number three is that you're falling for consumer traps. Now, these can be extremely insidious. So have you ever been going about your day? You know, you went to work and then you went to the gym like a good strong boy, you know, and then you get home and you start browsing the computer and you're on YouTube. Your favorite tech reviewer says, "The all-new iPad 10 point whatever inch," and at the end of the video, he says, "Now is the time to buy an iPad. This is a great iPad; you know, lots of improvements over the last one. You should go ahead and buy it now."

So sure enough, you go onto Google and you type in Apple iPad, and you add it to your cart, and you think to yourself, "I actually have like 300 more than I thought I would, and this iPad's only 300. Let's get it done." So you add it to your cart, you buy it, and you pretend you just didn't even do anything. You walked away from the computer trying to pretend that you didn't actually just buy an iPad. You ignore the negative thoughts, and you just focus on the positive. You're like, "Oh, that was a nice thing to do."

But here's the weird thing that not very many people notice about that kind of situation: you went your entire day without even thinking about an iPad. You know, you were just living your life unaffected by this iPad, totally content without needing an iPad, and had you not watched that YouTube video, you'd have had a great night's sleep and you would have been 300 dollars richer. But because of how marketing works, all of a sudden, when you come across the ad for the iPad or something promoting the iPad, it becomes the most important and tempting thing in your entire world.

You have this deep sense of lack about not having this thing, and buying this thing would really just put that to rest. That's marketing; that's a consumer trap. It's like a bunch of little fruit loops on a trail leading you to spending money. In my own life, the biggest consumer trap in my entire existence is camera equipment. My brain has this rationalization that, oh, I'm a YouTuber and I'm really into video stuff, so I gotta stay on top of the latest tech. But every time I stay in this consumerist mentality, I produce way less.

If I've learned anything about being a YouTuber, it's that in order to succeed, I need to produce a lot more than I consume. That's kind of the way it goes in life. If you're constantly on social media, on YouTube, and you've subscribed to all these equipment reviews or yacht club catalogs or whatever, it's basically just a consumer trap. It's a gateway into spending money; it's a gateway to giving away your money to everyone else other than yourself.

So the solution is to start deleting the traps. You know, my favorite camera reviewers, I had to click on YouTube and say, "Don't recommend this kind of [ __ ] to me." You know, it's heartbreaking, but you gotta eliminate these traps as you see them. In "Atomic Habits" by James Clear, he talks about how willpower is kind of for losers in a way. Like, most people have optimized their existence and their homes and their online life so that they don't have to use willpower all the time.

They don't have to sit there resisting urges; they've just deleted it ahead of time. They've gotten rid of the traps so that they can just go about their business undisturbed, without all these companies just kind of tugging on you to go spend money on their stuff. So don't succumb to lifestyle inflation, pay yourself first, and then eliminate these consumer traps, and you'll be so much better off. You'll have so much more extra money lying around.

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Once again, to sign up for your free 30-day trial, click the link in the description below or text "better ideas" to 500-500. So this is my first personal finance video. Let me know what you guys thought of it in the description below. Do you guys want me to go into more detail next time, or do you like these more general, easy-to-understand concepts?

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