WEBVTT NOTE This file was generated by Descript 00:00:15.691 --> 00:00:18.921 . Booth: If your budget is in need of a revamp, or maybe you haven't 00:00:18.921 --> 00:00:23.451 been budgeting at all this episode will help get you on track. 00:00:24.041 --> 00:00:28.751 Any time is a good time to start budgeting and creating one that 00:00:28.761 --> 00:00:30.851 works for you and your family. 00:00:31.816 --> 00:00:37.366 Inflation has greatly changed the landscape of family finances, and a 00:00:37.366 --> 00:00:39.686 budget is more important than ever. 00:00:40.346 --> 00:00:44.256 So here are my top 10 budgeting tips. 00:00:45.386 --> 00:00:52.196 Number one, do an assessment of the last few months of spending so that you 00:00:52.206 --> 00:00:54.356 know where your money has been going. 00:00:55.046 --> 00:00:58.486 Are you spending more than the income you're bringing in and 00:00:58.496 --> 00:01:00.706 actually creating credit card debt? 00:01:01.326 --> 00:01:05.936 Are you paying for a subscription that you never use and could cancel? 00:01:06.326 --> 00:01:09.416 A lot of people are paying for subscriptions that they do not use, 00:01:09.426 --> 00:01:11.196 so that is definitely one to check. 00:01:11.936 --> 00:01:17.546 Knowing where your money has been going is essential to creating an accurate budget. 00:01:17.926 --> 00:01:22.266 Because if you think you've been spending If you spend $600 a month 00:01:22.306 --> 00:01:29.756 on food and it's actually $1,000 a month, then you know that there's other 00:01:29.766 --> 00:01:32.746 areas of your budget that probably are going to need some tweaking. 00:01:34.026 --> 00:01:36.736 So let's go on to tip number two. 00:01:37.981 --> 00:01:44.741 To create your budget, you need to assign a purpose for every dollar of your income. 00:01:44.771 --> 00:01:50.481 So you want to take that take home income number, and then when you've allocated 00:01:51.021 --> 00:01:55.371 a purpose to every dollar of that with your expenses, you want to get to zero. 00:01:55.736 --> 00:01:57.966 You don't want to be negative because that means you're going into credit 00:01:57.966 --> 00:02:02.066 card debt or some form of debt, but you want to assign a purpose for 00:02:02.106 --> 00:02:07.886 every single dollar so that it is being useful to you and your family. 00:02:09.256 --> 00:02:14.456 So if you have like a salary type job, you know your after tax income, it's 00:02:14.486 --> 00:02:16.426 pretty straightforward of a process. 00:02:17.161 --> 00:02:22.131 But if you have what's called an irregular income, maybe a commission, uh, on top 00:02:22.131 --> 00:02:27.481 of a base pay or something like that, then plan for the worst to cover the 00:02:27.481 --> 00:02:32.481 essentials and then have a plan for any additional income you earn and those 00:02:32.501 --> 00:02:37.441 commissions and things like that so that that commission is used in a very 00:02:37.441 --> 00:02:42.231 smart way towards either paying down debt or saving, anything like that. 00:02:43.536 --> 00:02:49.026 Additionally, if you are paid weekly, you want to plan that monthly 00:02:49.026 --> 00:02:52.186 budget off of four weeks of income. 00:02:52.806 --> 00:02:56.506 There will be a few months during the year where there will be an 00:02:56.506 --> 00:03:02.656 additional week of income, so you want to have a plan for that money, ideally 00:03:02.656 --> 00:03:05.416 putting it towards debt or savings. 00:03:06.760 --> 00:03:10.810 Number three, prioritize your necessities. 00:03:10.890 --> 00:03:12.500 These are your essentials. 00:03:12.840 --> 00:03:18.970 So, there are four expenses, often called the four walls, which is your home, 00:03:19.160 --> 00:03:24.220 transportation, food, and utilities, that you've got to prioritize those. 00:03:24.240 --> 00:03:25.660 Those are absolute essentials. 00:03:26.040 --> 00:03:30.310 And then after that, you'll prioritize your saving, debt payment, 00:03:30.360 --> 00:03:36.225 giving, and then miscellaneous type spending into that budget. 00:03:36.805 --> 00:03:40.725 So food is both an essential and a non essential. 00:03:41.035 --> 00:03:45.125 So you want to prioritize the essential, like your groceries, and then if there's 00:03:45.125 --> 00:03:50.705 room in the budget, maybe add in some non essential food, such as eating 00:03:50.705 --> 00:03:52.695 out once or twice during the month. 00:03:52.695 --> 00:03:56.525 If you have a lot of debt, you want to get it up there in the priority. 00:03:57.150 --> 00:04:03.570 Uh, and then you also want to prioritize an emergency fund if you don't have one. 00:04:03.610 --> 00:04:06.110 So an emergency fund is really key to have as well. 00:04:06.409 --> 00:04:14.989 Tip number four, know if your category percentages are on track. 00:04:15.229 --> 00:04:19.619 So there's a link in the show notes to my blog where there's a little more detail 00:04:19.619 --> 00:04:21.989 on this um, so that you can visualize it. 00:04:22.549 --> 00:04:25.609 But the main categories here, like your house. 00:04:26.249 --> 00:04:30.889 25 percent of your budget is what that number needs to be, and that includes 00:04:31.289 --> 00:04:34.389 insurance, property taxes, HOA. 00:04:34.679 --> 00:04:37.679 If it's over 30%, it's getting really high. 00:04:37.679 --> 00:04:42.069 Transportation generally needs to be 10 15 percent of your budget. 00:04:42.479 --> 00:04:46.979 If you have a car payment, it could be higher, and that car payment actually 00:04:46.979 --> 00:04:49.259 may be getting that percentage too high. 00:04:50.114 --> 00:04:55.184 Your food, this is your essential food, maybe one or two eating outs, 00:04:55.244 --> 00:04:57.834 okay, 10 to 15 percent of the budget. 00:04:57.834 --> 00:05:01.014 Utilities, about 5%. 00:05:01.194 --> 00:05:03.594 And then you're going to start putting in your saving and 00:05:03.594 --> 00:05:05.554 your debt pay down, about 15%. 00:05:06.534 --> 00:05:09.054 Giving of 10%, if that's your thing. 00:05:09.804 --> 00:05:14.924 The other things to think about here though, if you have to buy your own health 00:05:14.924 --> 00:05:19.839 insurance, It's going to take up a big percentage of your budget compared to 00:05:19.839 --> 00:05:22.769 people that have it employer provided. 00:05:22.839 --> 00:05:26.989 So if that is an item in your budget, you definitely need to make sure you've 00:05:26.989 --> 00:05:29.449 got room for it in those percentages. 00:05:29.449 --> 00:05:33.469 Additionally, if you have expensive child care, things of that nature, 00:05:33.709 --> 00:05:36.629 that is going to take up a percentage of your budget that's going to 00:05:36.639 --> 00:05:39.649 have to come from another category. 00:05:39.649 --> 00:05:45.009 Tip number five, be on the same page with your spouse. 00:05:45.539 --> 00:05:49.969 So do your budget together, review it together, be honest with 00:05:49.969 --> 00:05:51.569 each other about your spending. 00:05:51.949 --> 00:05:57.899 Money does cause a lot of marital issues, but you don't have to let it. 00:05:58.029 --> 00:06:00.689 Communication is key here. 00:06:01.629 --> 00:06:05.199 And there may be a lifestyle change getting on this budget 00:06:05.199 --> 00:06:07.029 and prioritizing certain things. 00:06:07.419 --> 00:06:11.459 So give each other some grace as you make these changes in your life. 00:06:12.389 --> 00:06:16.419 Additionally, if you're single, maybe you need a friend to help hold 00:06:16.419 --> 00:06:20.129 you accountable, but get someone that's going to support you in these 00:06:20.129 --> 00:06:22.679 changes in your spending choices. 00:06:23.306 --> 00:06:30.262 Number six, review your spending weekly to keep it on track and adjust for any 00:06:30.492 --> 00:06:36.012 unexpected things that may pop up so that your total budget doesn't go over. 00:06:36.787 --> 00:06:39.627 Your budget's going to change month to month. 00:06:39.717 --> 00:06:42.197 It is not set it and forget it. 00:06:42.687 --> 00:06:44.137 So stay on top of it. 00:06:44.807 --> 00:06:50.957 Plan the big items at the beginning of the month and get them checked off. 00:06:51.376 --> 00:06:52.906 Tip number seven. 00:06:53.576 --> 00:06:56.616 Food is a common category to overspend. 00:06:57.331 --> 00:07:01.271 Make a meal plan, eat at home, eliminate food waste. 00:07:01.501 --> 00:07:06.181 Not only does that meal plan save you money, it's less stress in the evening. 00:07:06.191 --> 00:07:08.551 So I'm a real big stickler on this one. 00:07:09.061 --> 00:07:13.141 And if you do really want to eat out, add it into your budget. 00:07:13.171 --> 00:07:16.661 Don't pretend like that expense doesn't exist. 00:07:17.361 --> 00:07:19.641 Just recognize it and account for it. 00:07:21.251 --> 00:07:22.761 Tip number eight. 00:07:23.301 --> 00:07:28.141 Plan for quarterly and annual expenses in your monthly budget. 00:07:28.221 --> 00:07:32.571 We're talking vacations, a Christmas, all of those kind of things. 00:07:33.031 --> 00:07:34.281 Prepare for them. 00:07:34.831 --> 00:07:39.521 throughout the year so that they're not an unexpected, well they'd be expected, but 00:07:39.761 --> 00:07:44.561 a large expense that you end up putting on credit card or something like that. 00:07:44.591 --> 00:07:48.541 So if you budget for it throughout the year, you're going to be able to 00:07:48.541 --> 00:07:51.501 pay for it in full when it occurs. 00:07:52.231 --> 00:07:53.771 Home repairs are another one. 00:07:53.791 --> 00:07:59.381 If you know that you're going to need a new roof in the next year or two, go ahead 00:07:59.381 --> 00:08:02.131 and start saving for that expenditure. 00:08:03.421 --> 00:08:05.221 And also your tax refund. 00:08:05.231 --> 00:08:10.191 If you get a tax refund every year, make a plan for that money. 00:08:10.431 --> 00:08:13.321 Just go ahead and say it's going straight towards debt pay down or 00:08:13.321 --> 00:08:14.771 it's going straight to savings. 00:08:15.271 --> 00:08:17.721 Do not let it be a shopping spree. 00:08:18.145 --> 00:08:19.685 Tip number nine. 00:08:20.265 --> 00:08:25.135 If you have credit card debt, cut them up and prioritize paying off 00:08:25.135 --> 00:08:30.365 the debt and only use cash or a debit card throughout this process. 00:08:31.135 --> 00:08:35.145 Credit cards can regularly tempt you to overspend, so if you're in that 00:08:35.145 --> 00:08:40.435 category, go ahead and get rid of them so that they don't wreck your budget. 00:08:40.435 --> 00:08:41.975 Tip number 10. 00:08:42.485 --> 00:08:44.515 Create savings goals. 00:08:45.115 --> 00:08:48.565 Make a priority list of what you're saving for. 00:08:48.965 --> 00:08:50.745 Remember that emergency fund? 00:08:50.755 --> 00:08:54.605 You need to have three to six months of expenses in that fund. 00:08:54.615 --> 00:08:56.425 That should be first and foremost. 00:08:56.845 --> 00:09:00.205 If you have that, then you can start focusing on other things. 00:09:00.540 --> 00:09:03.820 Maybe you're saving for a down payment on a home, starting to 00:09:03.820 --> 00:09:08.510 save for retirement, maybe you have kids to save for, for college. 00:09:09.085 --> 00:09:13.825 So these different categories all have different savings tools, such 00:09:13.825 --> 00:09:20.345 as savings accounts, maybe an IRA, 529 plans, so you need to create 00:09:20.645 --> 00:09:25.165 different goals for them and a priority list of saving towards them. 00:09:25.665 --> 00:09:31.045 And of course, track your progress to make sure you're staying on track with 00:09:31.145 --> 00:09:33.535 those goals that you're trying to achieve. 00:09:33.535 --> 00:09:36.925 So I hope this helps create your budget and keep it on track 00:09:36.935 --> 00:09:39.535 to reach your financial goals. 00:09:39.535 --> 00:09:43.155 These are just some helpful little tips to just think about throughout 00:09:43.155 --> 00:09:47.245 the month as you're spending and doing your budgeting and all of those kind 00:09:47.245 --> 00:09:53.780 of things just to Achieve those goals and keep inflation from wrecking your 00:09:53.780 --> 00:09:57.630 budget, because if you don't go ahead and account for the increases in some of 00:09:57.630 --> 00:10:00.040 these prices, they will wreck your budget.