'I'll start panicking': Comedian Bobby Lee says he doesn't know how much money he has, what his mortgage is, or even how to pay his phone bills— 3 ways to deal with financial reality

Know your expenses

One of the most shocking facts Lee revealed during the podcast was how little he knows about his expenses.

“I don't know what I pay for my mortgage. I don't know what I pay for my car. I don't know what insurance costs. I don't know what my utility costs — all that's taken care of … every bill. I don't even know where the phone bill — I don't even know where to go to do it,” he said.

Stephan remarked that “it kind of sounds nice” to never have to worry about missing a payment.

Of course, if you don’t have a "money guy" managing your bills, it’s best to understand your own spending habits.

You can start by tracking all your expenses for a month to get a clear picture of where your money goes. Categorize your expenses into necessities (like rent, groceries, and utilities) and discretionary spending (like dining out, entertainment, and hobbies).

This will help you identify areas where you can cut back and allocate more funds towards savings or paying off debt. Regularly reviewing and adjusting your budget ensures you stay on top of your financial situation and avoid getting into unnecessary debt.

Discover how a simple decision today could lead to an extra $1.3 million in retirement

Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.

Discover the full story and see how you could be on the path to an extra $1.3 million in retirement.

Read More

Build a safety net

Having an emergency fund is essential for financial security — it can prevent you from relying on credit cards or loans during tough times, helping you maintain financial stability and peace of mind. This cushion will provide a buffer in case of unexpected events like job loss, medical emergencies, or major car repairs.

While Lee prefers not to know about his finances, he has built a substantial financial cushion.

He said, “I asked my money guy, ‘How long can I not work until I run out of money?’ And he goes, ‘A long, long time. So you can go a long, long time without working and you'll be fine.’”

For the average person, how large should the financial cushion be?

Personal finance expert Dave Ramsey suggests having an emergency fund that can cover three to six months worth of living expenses.

Of course, this amount may vary based on individual circumstances, such as job stability and personal financial obligations. You can start by setting aside a small portion of each paycheck until you reach your goal.

Invest for retirement

Legendary investor Warren Buffett famously said, “If you don't find a way to make money while you sleep, you will work until you die.”

In other words, if you don’t want to work forever, you need to find ways to generate passive income through smart investments.

Lee’s investments are, as you’d expect, managed by his "money guy."

“Fifteen years ago, he bought me like a condo or apartment complex or something. And we went in with a group, and it's doing well … so I just kind of like let him do it,” he said.

An apartment complex can indeed be a smart investment, offering the potential for rsteady rental income and property appreciation over time.

Of course, with elevated home prices, acquiring multi-unit properties can require significant capital today. The good news? There are real estate investment trusts (REITs) and crowdfunding platforms that provide everyday investors with access to real estate assets.

Remember, there’s no need to start big. Consistent investing, even in small amounts, is aided by compounding over time, ensuring you have a comfortable nest egg for retirement and other future needs.