As American workers across multiple income levels face inflated prices on food, gas, housing and more, saving – wherever possible – has become a widespread goal. In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Gordon Stein, an international keynote speaker, blogger, personal finance expert and author of Cashflow Cookbook: $2 Million of Financial Freedom in 60 Easy Recipes. Together, they break down some of the concepts in his book and provide actionable money-saving tips to increase your cashflow.
In this episode, you will learn:
- Minimal effort strategies for reducing your monthly expenses.
- How small changes in the way you manage your money can lead to big results, like financial freedom.
- Other takeaways from Cashflow Cookbook: $2 Million of Financial Freedom in 60 Easy Recipes.
- And more!
Resources:
cashflowcookbook.com | Cashflow Cookbook: $2 Million of Financial Freedom in 60 Easy Recipes | Bautis Financial: 7 N Mountain Ave Montclair, New Jersey 07042 (862) 205-5000
Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Welcome back to The Agent of Wealth Podcast, this is your host Marc Bautis. On today’s show, I brought on a special guest, Gordon Stein. Gordon’s an international keynote speaker, blogger, personal finance expert and author of Cashflow Cookbook: $2 Million of Financial Freedom in 60 Easy Recipes. He delivers transformational talks that help people crush the number one stressor: finances. Gordon, welcome to the show.
It’s a pleasure to be here, Marc. Thank you.
As a Financial Advisor, I love talking about finances. And obviously, stress is a big issue – not just with finances, but with everything else going on in life right now. So this conversation is definitely relevant right now. Your book, Cashflow Cookbook, how did you come up with the idea to write it?
Well, I’ve always been interested in helping people with their personal finances. When you read the stats, it’s shocking how bad of shape people are in when it comes to financials – at all income levels.
The concept of the book started when I found out how to get car washes for free – this is legally, by the way. This discovery I made saved me about $25 a month. It’s not a lot of money, but it got me wondering where else I could save. I then stumbled into a way to cut my monthly home security costs in half. I just kept wondering, what else can I do to save?
I started making a list of minimal effort, minimal sacrifice items that could free up cash flow. It was a bit of a hobby. Over time, the list grew to $13,000 worth of monthly savings.
I took that list to my accountant to ask, “Where is my math error here?” He said, “There’s no math errors here. This would make a great book.” That’s all I needed to hear. 230 pages later, out came Cashflow Cookbook. It’s been a fabulous way to help people with their finances.
That’s great. In the book’s introduction, you recommend that everyone should save 10% of their income. I recommend some form of that to everyone I talk to, too. But when you mention “minimal sacrifice” you bring up a good point. It’s not easy to all of a sudden flip a switch and save 10% if you haven’t been already. So I like the concept of offering minimal effort, minimal sacrifice changes.
You broke the book up into what you call “recipes.” Why made you format it in that way?
Before I answer your question, I want to touch on saving 10%… people see it as a tug of war – they have to give up what they like spending their money on in order to save. But I think you can save 10% without giving up anything.
The original concept for the book was for it to be a novel. But then I realized how much math is involved in each idea I had, and it just wasn’t going to work. Under my breath I said, “Geez, this just isn’t a novel. It’s more like a cookbook.” And I said, “Oh my goodness, it is a cookbook.”
So Cashflow Cookbook is a lot like a recipe book, and you can read it like one. For example, there’s a section on transportation that contains a lot of ideas for saving money related to your car. If you don’t have a car, you can just skip those recipes. It’s no different than if you’re having a dinner party with chicken dishes, you skip the veal recipes in a cookbook.
At the end of each recipe, there’s a space where a reader can record their own savings. So when you read a recipe that you like, and you implement it, you can work out your exact savings. Soon enough you’ll be flipping through the cookbook and see savings of $160 on one page, and $240 on the next.
That’s how the reader can really see the benefit, right? It compounds. What’s the most you’ve ever heard a reader saved by executing your suggestions?
I worked with a financial advisor who had a client that freed up $1,950. But I would say just about every reader will be able to save $500 a month using the tips from my book. Again, with minimal effort and minimal sacrifice.
That’s great. Can you talk a little bit about how the changes don’t lead to sacrifice?
Saving Does Not Mean Sacrifice
There’s really nothing in the book that involves any kind of a sacrifice whatsoever. The changes are easy – some of them taking only 10 minutes of your time. They’re the kinds of things that make people go, “Are you kidding me?”
The first recipe that I came across in Cashflow Cookbook was about homeowner’s insurance. Even before reading your book, I was a big promoter of shopping around for homeowner’s insurance… but a lot of people don’t. They get a policy and stick with it for 10-15 years. But the insurance carriers – they change. The premiums change. What are some of the other areas that you see people saving big?
Minimal Effort Strategies for Reducing Your Monthly Expenses
It’s possible in every single area, Marc. Cashflow Cookbook starts off with housing – which is typically the biggest expense – then transportation and food. We then move on to household, lifestyle and financial. So the savings are all across the board.
To give you an example, I had to start taking statin pills to lower my cholesterol. I did what everyone does: I went to the doctor, I got a prescription and I went to the pharmacy. The pharmacist told me that the prescription was $108 a month. That’s a lot of money, especially since I have to take the pills for the rest of my life.
The pharmacist said I could get a drug card, which would reduce the cost of the prescription to $68. I thought, ‘Wow, $108 to $68… that’s a big drop. I asked how much the card was, and it was $20 a year.
So I was quite pleased with the deal, and brought it up to my brother-in-law over dinner. I was bragging about this brilliant job I did chopping $40 off my prescription. He mentioned GoodRx, a discount prescription website which I hadn’t heard about before. Not the prices fluctuate a little bit, but the same prescription was something like $13 a month at the time. It was unbelievable: $108 to $68 to $13.
I thought to myself, ‘How far does this go?’ So I started looking around more online. I now get my pharmaceuticals from Blink Health, and I pay $7 a month for my cholesterol pills. Whats more is that they’re delivered to my house – I don’t even have to pick them up.
So having conversations and doing an internet search was all it took for me to save almost $100 a month.
Yeah, that’s amazing. One of the areas that a lot of people have trouble with is food… for all different reasons: food going waste, people eating out too much, and so on. Can you share a money-saving tip for food shopping?
Money-Savings Strategies for Food & Drinks
Yeah, I think one of the greatest tips is to get a loyalty card at your grocery store. It doesn’t take more than 5-10 minutes to sign up for a card that you can scan each time you buy groceries. At the bottom of the receipt, you should be able to see how much you’ve saved in the last 12 months. The last time I looked, my wife and I had saved $1,250 in the last 12 months. That’s $100 a month. I don’t do anything differently – I don’t run around to 12 grocery stores, I’m not clipping any coupons… none of that stuff. So again, I’m not giving up anything.
Another idea is to bring in lunch to work 10 times a month. That will save you about $10 per lunch. And 10 days isn’t even half the work days in a month, so you can save more. Plus, making your own lunch gives you a chance to eat something healthier than what the cafeteria has to offer. This requires a bit more effort, but it has those added health benefits.
I’ll throw in one more tip that’s quite interesting… Big box stores like Costco routinely sell gift cards for restaurant chains at about 75 cents on the dollar. So that’s a bit of a no brainer, especially if it’s a restaurant you enjoy going to.
Yeah, not bad. In your book, you talk a bit about the importance of tracking your net worth. Why do you think that’s so important?
Well, it’s interesting. People tend to focus on their budget. If that works for you, great. But I find it leads to a lot of marital discord, so I’ve never enjoyed budgeting.
I recommend people set up two checking accounts: One is the bill account, for cell phone bills, insurance, mortgage and all other monthly recurring bills. That account receives, through paychecks or income sources, enough money to cover all of the bills every month. What that does now is it does two things. It distills your regular checking account and it provides clarity regarding what money is left over.
If you do that, I think in many cases, you can get rid of budgeting because you’ve already ground down the bills. That stuff’s spoken for. And then you just let go into your checking account, the money you can. And spend the whole thing, just go right ahead. But you’ve already pulled off money out of grinding down these expenses to send it over to people like yourself, Marc, to invest.
I don’t like the term net worth, though. I call it wealth. It’s just the difference between what you own minus what you owe. I like the idea of tracking your wealth monthly for a year, then transitioning to tracking quarterly or annually. What this does is it really sharpens your focus. Instead of the marketers out there gamifying you to buy more stuff, you’re gamified in terms of your wealth number. You’re constantly checking: Is it growing? Am I shrinking what I owe and am I growing what I own?
Yep. In talking about headspace, how do spouses best coordinate how they think about money?
That’s a big one. I think, like any other aspect of a marriage, it’s all about communication and getting in alignment. Being able to visualize things makes a big difference. I think both parts of that partnership, if they’re each working, should have a set of bills that they’re responsible for finding ways to save. So let’s say one partner works on the mobile bill while the other figures out the TV and internet bill. When they work together, there’s more ground that’s covered. They can free up, let’s say, $200 a month, then move to the next.
They can also work together to set some wealth targets. I think working with a financial advisor is helpful when it comes to building wealth.
Another issue I see is a person works on their finances, then falls back into their old patterns over time. I guess you could equate it to weight loss. How can someone prevent that from happening?
They have to focus on the vision. There’s a million temptations. Marketers are doing functional MRIs of our brains to figure out what makes us buy… A lot of stores have sensors to track consumer’s patterns of moving around the store… we’re kind of powerless as consumers. They know exactly how to fire up the endorphins and get us to buy all kinds of things.
I think the most important thing is to set a long term goal, and this is where wealth comes in. If you actually have wealth, you have choices. Some approach me at the end of a talk and say, “I don’t really care about adding another $3 million to my wealth.” To which I say, “Well, what is it you really want to do?” Some want to leave the working world early. Others want to go build schools in Nepal. I tell them, “Well, great. Let’s talk about your goals then.”
When you do that, you create a target. And I don’t think there’s anything you can buy that’s as blissful as having financial freedom.
On the topic of financial freedom, how should someone approach it?
In Cashflow Cookbook, I lay out a series of steps. Using a cooking analogy, because there’s lots of cooking puns in my book, I say that step one is to broil a bill. Just pick one. Say you want to start with car insurance… jump online to zebra.com or insurify.com and in 10 minutes, you can see 10 or 12 options for savings. If you’re going to change car insurance carriers, make sure the coverage lines up, and so on and so forth. But I bet you can free up at least $100.
Then, if you’re working with a financial advisor, call them up and tell them you’re going to save another $100 a month that they can put into your investment plan. Now you’ve made a change.
That’s how you can get that momentum going, and you can see it snowball from there.
I like the idea of starting by reducing debt – whether it’s a high credit card bill, a personal loan or student loans, that’s definitely a good first place to start. So, what’s next for you? Do you have a plan for another book?
So I’ve done six editions of the book, and I’m working on the seventh now. The first six editions were all in Canada, so this is actually the start of my US editions. I’m originally from Canada, but now I’m living in Ohio.
It’s interesting because I’m finding there’s a lot more opportunity for Americans to save, as compared to what I saw when I did research for the Canadian book. For example, 77% of Americans only look at one mortgage alternative when they take out a mortgage on their house. That’s crazy.
But by the time this podcast episode goes on the air, the US edition of Cashflow Cookbook will be available on Amazon.
I also do a lot of work with the Financial Planning Association – I help financial advisors and their clients free up more cash.
And I have a blog at cashflowcookbook.com. I can give you an example of a blog post I wrote. It’s about how I got a $7,000 expense for free.
Yeah, let’s hear it.
I lost my hearing quite early in the game. Like most people, I delayed getting hearing aids for 7-10 years after I needed them. I did this for two reasons:
- Vanity. I didn’t want to be the guy who had hearing aids.
- Expense. Hearing aids are about $7,000!
But I got mine for free. Here’s how.
I went to a couple of hearing places. At all of the locations, they were $7,000. One stressed that the hearing aids come with free batteries for life, though. So I thought, ‘Okay, that’s important, the batteries.’ Then, on a bit of a fluke, I was at Costco and saw that they sell hearing aids by their brand Kirkland. You can get Kirkland corduroy pants, Kirkland tilapia fillets and Kirkland hearing aids… who knew?
So I asked how much the hearing aids were, and they were $1,500. I said, “$3,000 for the pair… That’s quite a discount from the $7,000 I’ve been seeing.” They said, “No, that is the pair – $1,500.” And I said, “Well, what’s wrong with them?” Turns out there was nothing wrong with them.
Now, this was when I was living in Canada. Canada has a government benefit where they will give you $500 per ear, $1,000 per year, towards hearing aids. I think it’s every five years or something. So I said, “Great, these things are $500.”
Then I did something that just about no one does: I went to my company benefit book, and lo and behold, there’s a hearing aid benefit for $500.
So what was going to be a $7,000 expense, I walked out paying nothing. A little bit of shopping around and some research can go a very long way.
That’s incredible! Well, we’re just about out of time. Gordon, I’d like to thank you for being on The Agent of Wealth Podcast. You gave some great tips on how people can free up some cash. How best can my listeners find out more about you and your book?
You can reach me through my website, cashflowcookbook.com. My book, Cashflow Cookbook: $2 Million of Financial Freedom in 60 Easy Recipes, is available on amazon.com. I also do a lot of speaking engagements, so if you’re looking for a speaker you can reach out in the Speaking section of my website.
Great, we’ll link to all that in the show notes. Thanks again, Gordon. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.
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