Practical Budgeting Tips To Make Your Life Easier
No matter how much you make, tracking your spending not only helps you feel better, but allows you to make informed decisions.
A budget isn't there to cut costs or live like a miser, it's there so you know what's going on in your financial life.
3 takeaways from this episode:
Focus on Large Items: Cars, homes, loans - keeping the cost of these items low, allows you to spend more freely in other areas.
Embrace Financial Awareness - Track!: Use a software like YNAB (You Need a Budget), will help you see where you money is going. By constantly monitoring your spending habits and identifying areas to cut costs, you gain more control and make informed decisions to enhance your savings.
Plan For Irregular Expenses: Budgeting isn’t just about monthly expenses; it’s about preparing for those non-recurring costs like auto insurance, holiday shopping, and emergency funds. Setting aside funds for these will help alleviate financial stress.
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The Importance of Budgeting
I am a certified financial planner and licensed realtor, and today we are going to be talking about basic budgeting, tips and tricks. This is a request from a listener. It is something that used to be near and dear to my heart because I would needed it.
Honestly, I really think I got into this business because I needed to know what, I don't even know if it was the value of money, but like really paying attention to the details. And so I think this is a great topic. It's something that everybody struggles with no matter how much you make. And I wouldn't say everybody.
Is like really struggling with it, 'cause sometimes you can make enough that it's not a big deal. But I always think it's a great idea to be paying attention to what money is coming in and what money is going out, just so that and it makes you feel more in control of your financial life.
And it's really where the tire meets the road. And I say that all the time. Your spending habits are where the tire meets the road. You could not make a lot. [00:01:00] And have very frugal spending habits and then save millions of dollars. We all know this, right? And it's not to say that you need to feel guilty about whatever your spending level is.
So if you're spending $15,000 a month on just your monthly budget, then I don't think you should feel guilty about that as long as it's something that you want to do and you're aware of it. But if you have guilt about how much you spend, doing some of this basic budgeting and knowing what is coming in and out can really help you just, again, to feel more in control of your life and to know where your savings is.
And I think it actually helps you make more money because you know what's coming in. And so then it's like a game and I'll talk about that. It's, I make it a game anyway, and. I took on a client recently. I'm trying to like, kind of branch out and help younger people and how can I help them because I feel like they need the [00:02:00] financial help more than just videos and things on social media and on YouTube that they need some help in.
Just advice and one-on-one and how can they get that? And so I took on a client and he needs basic budgeting help, and he said something that is so true and that you become, you get used to looking at the budget versus looking at your account.
Creating a Spending Plan
And that is what happens when you start looking at, and you start having a spending plan is what I'm gonna, I want to call it, but we all know what budget is.
A spending plan is where you just know where your money is going, you know what you're spending it on, and you know how much is coming in. And when you have a spending plan, you start to look at that versus, okay, I've got, $2,000in my checking account. I have enough to do blah, blah, blah, blah.
Well, you don't know if your insurance is due, if your AAA membership is coming up, if your HOA, whatever, all these little yearly fees that you've got going on, you don't know if that's coming [00:03:00] up right? But if you have a spending plan, you know that this is coming up. You know what you, if you have the money to pay for it, and that's what it helps.
Tracking and Adjusting Your Budget
The first thing that I think that you need to do to track all of these things is just get on some sort of program. I really like You need a budget, which is why NAB and it. Truly brings in your credit cards and you link all of your accounts, you link all your credit cards, and then you can plan how much you're going to spend that much.
So my mortgage is gonna be this much and my gas is gonna be such and such. And the things that you really need to plan for that we all get caught with is like shopping clothing. Hair. Hair like haircuts gifts, and then that yearly stuff that just like pops up and if I pay my, auto insurance every six months.
And so I need to put that in. I'll usually put that in the month before it's due, and then make sure that I have enough money in there to pay for that. Things like that, the stuff that [00:04:00] just isn't on a monthly and there's tons of stuff that is not on a monthly budget, and you need to plan for some of those things.
And if you're constantly putting money away for clothing, for example. So we barely spent anything on shopping and clothing over the summer. And now, we're getting into fall and Christmas and all of that and we have been spending so much money the last month. Just constant Amazon boxes at our house.
And if I hadn't been, putting money into that category every single month, I would probably be thinking to myself, man, we are spending a lot of money. What the heck's going on here? But because we have all of that built up, it's nota big deal. Because your money ebbs and flows. You're spending ebbs and flows.
Your income ebbs and flows sometimes, so it's, your money isn't like the same every single month. And it again, it just, it flows, it changes and your emotions change, 'cause money is half numbers and then it's [00:05:00] half emotions. And having something like you need a budget. Can help you just know what's going on and it's not even that you need to plan what's going on, I just want you to know what it is.
So just know what the numbers are in there and that is gonna take you so far. 'cause you know what's gonna happen is you're gonna get in there and you're gonna start tracking things and putting them in all the different categories. And then you're gonna say, oh, I didn't wanna pay for Netflix for another month, or I didn't wanna play for Disney plus for another month.
And then you're gonna start digging into the weeds and you're gonna go cancel that. Or you're gonna say, oh, I'm gonna log into Verizon and I'm gonna save$10 because I'm gonna link my debit card instead of my credit card, or whatever. You know how they do those different things. I'm gonna go cancel.
One time I went to go cancel, I think it was Paramount Plus, and then they offered it to me for 299 a month. So I took it for 299 a month. So different things like that. That's what's gonna happen. You're gonna start to investigate the different charges and. You're gonna save money because it becomes, it does become like a [00:06:00] game.
You don't, nobody wants to just waste their money and throw it out the window. And and this is, it becomes that I go, I call it going down the rabbit hole because I go down the rabbit hole and then all of a sudden I've, canceled like three things and. Then upped something else and it just happens that way.
I remember one time when my husband and I first got married and I was doing the doing YAP and I went in and I was like, you know what? I'm gonna try, and this is when we were on my health insurance, which I worked for myself, so it's not that great. And and then our auto insurance and I shopped that, or I was like, I'm gonna shop this around.
And I ended up saving $600 a month. By shopping all that stuff around. 'cause I hadn't done it in so long, so it does add up sometimes. So other basic budgeting tips that I would talk about besides just tracking it. Okay. You do not need to analyze it or anything. Just go in and just track it just to get started.
And you are gonna fall off the wagon. You're gonna not do it for a [00:07:00] while. And the need to get back in, not do it for a while and get back in. I just feel like that's how like healthy eating is too. If you're trying to quit diet Coke, you quit for a while and then people get back on it, or that's how I was with lemonade.
I loved lemonade. It took me a long time to kick the lemonade habit. So I feel like that's the same thing with this is like you feel like doing it for a while and then not, I would just set up a time that you like to do it. I loved doing mine every single week. I don't have time to do that now.
I usually do it like every other weekend. And just see what we spent. And then again, I go down the rabbit hole of, why did we spend such and such on this? And then it makes you aware, right? Because then you're like. I don't wanna spend that much on this. I don't want to spend, $600 on my yard guy, whatever it is.
I don't wanna spend that much. I'm gonna go try to find something else. So it does make you aware and again, in more control of your finances than what you want to do. And then. The other thing that you're gonna start [00:08:00] tracking too, is like your automatic savings. So then you're gonna start to see, Hey, I'm saving this much into the 529 into the emergency fund.
I'm gonna save for a new car. Whatever the different things are, then you're gonna be able to redirect that and do some automatic savings. And I'm also going to recommend, and I'm gonna take this back to an episode that I did a few weeks ago. It's a review of a book called No Worries by Jared Dillion.
And I love his book. I wish I would've written it honestly. It is my favorite financial book out there. It talks about how if you make your home your mortgage payment low and your car payment low. Then you're not gonna have any worries. And I really find that true. That, I don't worry about how much we spend anymore.
We got Christmas, you got Thanksgiving, whatever. I don't care. I'm gonna buy the expensive Turkey. I'll buy it. It doesn't matter anymore. [00:09:00] Part of it's my age, but part of it is that we have a cheap mortgage and very low car payments. And if you can keep those low. As a certain percentage of whatever your income is, then you're not gonna have a lot of worries with your finances later on.
You're going to have more to spend on life. Because let's be real, right? You're earning money and you're out working so that you can live life, not so that you can just pay your car payment or your, cell phone or something like that. So I really would recommend getting that book if it's something that you are interested in.
It's a great book. As I said, it is by far my favorite book so far because I feel like after being doing. This job for 20 years, I have realized like how complicated we make things and that you don't need to make it that complicated. Again, going back to eating. That's what everybody says about eating too, right?
It doesn't need to be that complicated. We make it so complicated. It's what people say about social media marketing. Every single person that has experience in anything says it. [00:10:00] We make it so complicated. It doesn't need to be that complicated. You keep these big things low, then you can spend on all the other things.
Your income does matter. If you're not making a lot of money, then you know, obviously there's nothing to spend. But you get what I'm saying? Most people are gonna fall in this category. The other things that I feel like, and I was just gonna do this, like as the tips and tricks that I do.
Travel Hacking and Credit Card Points
I started travel hacking, which is doing the credit card points. It has been really eye-opening. Like it is a whole world, you guys, but essentially what travel hacking is you get the credit cards, you get the signup bonus. And you spend, the $6,000 or whatever, you get the points and then you can transfer it to get airlines.
Years ago, I hate paying to stay places, like paying for hotels and Airbnbs. I just don't like spending money on that stuff. It's almost like I'd rather sleep in my car, honestly, but I don't is that. So then I got the Hilton card, and I have a[00:11:00]Marriott card, so I get like the free night rewards with just like our daily spending.
And if you're using something like YA credit cards are not an issue. Because you're tracking the credit card inside of YA and then that's automatically saying, okay, we're earmarking this amount of money that's in your checking account to pay for that credit card and we're gonna take it out and we're gonna put it over here into the credit card payment area.
And so then you pay your credit card and then, you start the process over again. So it's, it becomes just not a big deal to use these credit cards and to not have credit card debt and but if you have issues with debt, that's a whole another issue. That's spending and tracking your spending and paying that down and not using the credit cards.
If you don't have an issue with debt, you could get, use your YA on the other side of it after you pay your debt off, and you could use YA to just do what I'm talking about and it's just pay attention to what you're spending. So that it then becomes you're just, [00:12:00] when you pay attention, then you just choose the person that you know you wanna be in your financial life, really.
And it's empowering, that would be a good word for it. So I, these are the things that I do. I've really enjoyed the travel hacking. I just, I like this website called 10x. I tried to get them to come on. Actually, I hope that they write me back because I think their website's really good and some of it you can there's all these different apps where you can put in your credit cards and it will tell you like when you opened it, what the signup bonus was, how much the yearly fee is.
And then where they can transfer to. So it is complicated of where the points transfer to and how to maximize different things. But, I've gotten some flights I, my flight to Europe this summer. My one way was 20,000 points. In what $5 that I had to pay for the TSA thing.
Like that's so cheap. And so I really like this travel hacking thing. Am I gonna be able to use it for everything? No,[00:13:00]but can I use it for a couple trips a year? Absolutely. And it's awesome. And then I don't even have to worry about that expense. Or maybe there's two things outta the trip that are paid for and then we pay for the rental car.
Just different things like that. I enjoy playing the game like that. I feel like it's like moving all the little puzzle pieces around of how you can fit them together.
Streaming Services and Food Delivery Savings
The other thing that I do is with our streaming, I have T-Mobile with the Magenta plan, I get like Hulu and Apple Plus and Netflix.
So we don't pay for any of those. And so then if we're doing anything else, I'll turn it on and turn it off. So I will, get Disney Plus for a month and then we'll turn it off for three months. So we only binge it. I'm saying binge. We don't really do that, but we binge for a month and then I turn it off.
So I don't have any of that extra stuff. And the other things that I've seen people spending a lot of money on that I've been working with is food delivery. That one has just, I've never been into it, [00:14:00] but that one has gotten like. So popular and it is so expensive. Your food's double the price or something.
That one, if you are wanting to save some money, I think the food delivery, like just go to Chipotle and bring it home. If you can, or get extras while you're there and put it in the fridge and then warm it up. I don't know. But that one seems to be pretty expensive too. That's really it. I have on my basic budgeting tips, but just I the getting the right program I think YA is the best.
The other ones I've seen. I don't think are as great. They don't assign the categories in the same way. They tell you more after the fact. It's okay, well that's how much I spent last month. And so now I see it. And I think that's why people have such a hard time with this budget thing is because they go, well, last month I spent this much on food and so I'm trying to spend less.
But you have no idea where you are in the month of how much you're spending, like right now. And that's what you need a budget. Gives you is that you can goin on the phone app and look and say, I have [00:15:00] $700 left and I can spend it. And I have, two weeks left. And so yes, I can whatever, go out to dinner or go buy this.
And, you can budget whatever you want to do. Maybe you're gonna eat at home more because you'd like to take $200 from that budget and put it into something else. So again, it puts you in control of things rather than looking at it in the rearview mirror of this is what I spent before and oh, well, there's nothing I can do about it now.
And so that's what I feel like a lot of the other budgeting softwares do is they don't allow you to look at it in the moment, in the way that Y NAB does. I would be totally open to listen to some other ones that are out there. I've just, I've checked out three or four in the last couple of years just to see if I should switch and I didn't.
See any that I thought were comparable I do not work for them or anything. I'mjust telling you like I really love them and a lot of other people that I know. Love it also.
Conclusion
So let me know if you have any [00:16:00] questions about this. I would love to hear your feedback and if you have some time if you could review the show, that would help me tremendously.
It helps with the algorithm and it helps people find it. And if you have any other topics or anything please reach out and let me know what you'd like to hear. I would love to hear from you. Thank you so much for listening, you guys. This podcast is a lot of fun to do and I enjoy doing it. So I appreciate you.
Have a great day.
Disclaimer: The information provided in this podcast is for general informational purposes only and should not be construed as professional financial advice. Always consult with a qualified financial advisor or professional before making any financial decisions. The hosts and guests of this podcast are not responsible for any actions taken based on the information presented.