Welcome to Financially Speaking with Greg and Rachel. Today we're going to be talking about budgeting basics. We're going to talk a little bit about where we started, what worked for us, what didn't work for us, kind of what clicked and propelled us forward when it came to when it came to budgeting. So, I would say that this episode is for someone that is not currently budgeting and is thinking about budgeting or hasn't really thought about budgeting and would like to start or or consider it. So, I

00:00:24 would say this would be budgeting 101. Budgeting basics, maybe. Budgeting basics. Yes. When you hear the word budget, if you immed if you immediately start to sweat or start to think about your credit card and how you didn't pay it off or you start to get nervous, this is definitely the podcast for you because we've all been there. We've all felt that way about budgeting before. And today we hope to give you tools to help make it easier and just more practical. So tools, speaking of tools, we use

00:00:53 Google Sheets because I like to work on my computer. So I I like to do it on my computer. So we use Google Sheets. It's free. Everybody's got a Gmail account and it was really really simple. So, if you use your computer, that's what I would suggest for a tools. We also used the Dave Ramsey's Every Dollar app, but I didn't like it. It worked fine. It just it didn't work for us because I didn't like to do it on my phone. It was like a complicated, not too complicated, but like the the manually, whatever. It

00:01:17 was easy for me to do it on my computer. So, that's what we use. We use Google Sheets and not like a pre-built template, just a blank template. and we just started fresh and just literally just did a bunch of pluses and minuses and really just really really basic. So stressors before we kind got our budget in intact. What what what feelings did you have, Rachel? I really wanted to have a budget because I wanted to be able to enjoy spending money. I wanted to feel like maybe once a month I could get that

00:01:47 $5 coffee and not feel guilty about it, not feel like it was throwing us into debt. And I also felt scared to start a budget because to me budget means you can't have. Oh, I'm I have a budget. So that means I can't have fun. I can't have anything I want. And that that part of it I I really didn't like. But I I actually found a lot of freedom in our budget once we started creating it because you you pre-spent all of that money. So when you go to actually spend it, it's already spent. Yeah. You're

00:02:15 planning every dollar so you know where your money is going. That's totally true. So if someone was starting from from scratch right now, they don't have a budget or if we were going to restart again, what assuming that a majority of people use their credit cards or their debit cards, probably most likely credit cards though, what would be your advice to start first step? Probably figure out where your income is like every month. Some people get paid, you might get paid twice a month, you might get paid once a

00:02:40 month, you might be paid every three months if you're like contractor or something. So what do you really make every month? That's really good. So, to what's a hack to figure out what you should be budgeting? So, we're not going to talk about categories yet. We're going to talk categories later. A hack? I don't know. You're You're always This is This is her thing. I'm trying to get This is why I'm trying to get her to say it because this is her thing. The 90 days. Oh, yes. That is a really good

00:03:08 hack. She came up with it. She tell we I am a genius. Who would have known? We met we led a a financial class at our church. And this this was her idea. This is something we ever heard before. She was like, "Yeah." So that's like I said, "You want to figure out the last three months, where has your money gone? You want to know where every single dollar, every single nickel, every single penny went." And so you're saving all your receipts. You're looking at your credit card bill. You're saving all the bills.

00:03:36 You might bill online. Some people still get their bills in the mail for like the light bill or whatever, just depending on where you go. bill sitting on the desk right there. Yeah. So, you want to really take every single bill, every single time you paid for something and write it down. So, this is for the last 90 days. The last 90 days. Yes. So, if you started today, it might take a couple months to build your budget. You can definitely get started right away, but you you do need to kind of figure

00:04:01 out where is your money going. Or you could go ahead and look at your old credit card statements. So, since we mostly use our credit card, I think that would be a great place to get started. figure that out and then look at the last month to really narrow in on what your categories are. So, for example, this is this is April right now. So, for if we want to figure out, hey, we're going to create our our budget. We're going to start we're going to start in May or whatever. We're going to start today. So, we're going to go back and

00:04:26 look at the last three months of this is just a practical example. Yeah, you could just go back and look. You don't go back and look three months of hey, we do our grocery shopping at Aldi. Well, how much did I spend at Aldi in January? And then how much did I spend at Aldi in February and then March? So, well, when we make our budget for April and our budget for May, we already know based on how much we've spent statistically how much we need a month, how much we're going to spend. Okay? Because it's

00:04:52 different, you know, because if you're just winging it and there's there's two people, whatever, you're like, "Oh, I need 500 bucks a month for groceries, but the two of you spend 350." Well, then just just budget 350. I think that was a It helps with accuracy. Plus, you might have a bill. What's a bill that we don't pay every single month, but is a bill that we pay? Home owners insurance. Your homeowner's insurance or auto insurance. So, you want to just be aware, right, of those things because

00:05:16 you're going to budget those in. Yes. Yeah. Yeah. Yeah. That's that's true because those come by. That's why I say go back every car insurance is every six month. Yeah. Yeah. Figure out the average of what you're spending at the grocery store, on clothes, on fast food. All right. So, when we were first getting started at budgeting, what what do you think that Do you remember what the time commitment was? I don't. It it wasn't really a whole lot. I would say that the Oh, like sitting down and talking about it. I would in my mind I

00:05:40 was thinking more creating it. I think that it took significantly longer to create it than it did to follow it and keep up with it. It's kind of one of those things where once you get it set, it just continues and you just tweak it. Small tweaks as time goes on. I think it's an initial investment of your time. Um probably takes a couple hours, but then after that you're just tweaking it to fit like, oh, you know what? We really do need more money for this category. Let's make it this much. Or we

00:06:04 really don't need to buy so much clothes every month. We don't need $300 for clothes a month. Maybe we only need 50 bucks. Okay, let's make it 50 bucks. I think you'll spend more time I think either you'll spend more time or we spent more time figuring out what to budget, how to budget, what we should be budgeting than it did to actually take to create it. Because yeah, it does take a little bit of effort to follow it. I'm at the grocery store. I can only spend this or what is that? There was that

00:06:28 same mentality. I can only I can't have this or whatever. But I've pre-spent this much. So, this is this is what I'm going to spend at the grocery store. Uh, but all that leg work could have been done already because we'd already pre-spent it on paper. So, let's talk about some real life benefits of creating a budget. So, we'll use our life for example because we're the ones talking. We're the ones talking. We can't use anybody else's life. This should be dumb. So, for us, I think debt was our motivator. We really wanted to

00:06:55 get out of debt and we needed a practical way to do it. It wasn't You know what? That was funny because you say debt. It wasn't debt for me. Although I I did want to get out of debt. It was our emergency fund. You wanted to build an emergency fund, our six-month emergency fund. That was really the motivator for me. And I would say that we cuz we had had some if you don't if you're not familiar with our story, we had paid off some some student loans. And then a couple of months later, so we're totally debtree. A

00:07:23 couple months later, we bought your car and then we bought a house and then we bought a motorcycle and then we bought my car and the motorcycle we paid cash for. But everything else we put on a payment plan, which is not how we do it now. No, it's not how we do it now. But it it goes to show you that you can accumulate debt very fast. Yeah. Yeah. Exactly. And it's not hard to to be broke. And we we made some good choices and got out of debt and then we made a bunch of bad choices. We made a lot of

00:07:51 bad choices which all of them ended up working out but how we did it was not a good idea. So some things we were able to pay off debt but to pay off our cars. Yep. We were able to generate a six-month emergency fund. We were able to generate a I think a 9month emergency fund. We're more at like 9 months 12 months now. And we paid off our house. House. I was trying to think of something funny to say in there in the middle. Yes. Then we paid off our house, which was really, really freeing. And so

00:08:24 we went into it having goals. My goal was to be debtree and feel that that freedom that no one could take this from me, no one could take that from me, like it was ours, I think. And that's I think really important in the emergency fund. I agree. Just the safety of that. And we've actually used that. We've had emergencies happen in our in our in our little family and we have definitely used that emergency fund when we need to. All right. All right. So, as we get into a more practical aspect, just to

00:08:52 recap, we have Google Sheets or the every dollar app. We have figure out how much you make every month or every two weeks or every week. Total that up. What's your income? And then what you spend is your your outgoing. So, when you are thinking about outgoing or what you're spending, you have to think about categories. So, let's talk about some categories for your budget that we think that you you might have. You might going to have some of these. You won't have some other ones. Uh, so we'll just rattle some off.

00:09:20 Uh, feel free to go back and listen to this and pause it or whatever because, uh, we'll probably you can probably write some of these down because you're going to have homework. So, I would say first is groceries, clothing, any subscriptions. Those can add up quickly. That that's Netflix, Canva, Hulu, Max, Prime, Disney Plus, YouTube Red, and the makeup boxes. I don't get makeup boxes clearly. Thrive, but any of those. What are those other ones? I don't know. So, what else would we put on there? Car

00:09:50 insurance, homeowners insurance, renters's insurance, car payments, maintenance on those cars. So, I would be pre on I would add that as a category. I would be pre-saving for maintenance. So, if you've got oil changes, breaks, just things that come up. You have to spend money in your car. Just it is what it is. After school activities for your kids, meals, going out to eat. Do you have a baby or a young one? Diapers and wipes. Diapers, wipes, health insurance, fun money, vacation, future vacations, not a past

00:10:19 vacation. That would be considered debt that you're fast food or going out to eat category. Date nights if you're just or entertainment. It could even just be a broader category of entertainment. Maybe you're single or maybe your whole family does something. So, I'd probably just do entertainment. PlayStation Network, Xbox Live, your internet. Like I mean, I don't know. It's one that's so obvious that everyone forgets it. How you're watching us. Utilities. These are ones that you're so obvious you never

00:10:45 think about it. Lights, water, sewer, gas bill, medication comes to mind. Medication. That's good. Do we say health insurance? Yeah, I said health insurance. Toiletries. So, there's a lot of things. So, what you're going to do is you're going to go look back at your last 3 months, see where your money's going, and then you're going to really narrow in on this last month and try to make sure that every single purchase is going into a category. And feel free to create other categories that work for

00:11:15 you and your household. It's not just limited to the ones that we said. It's everyone's budget's different. You know, the more you look at them, the the longer and and longer they'll look at some other people's budgets and be like, "Oh, that's a great category. Oh, that's a great category. You can have 50 categories. Yeah, you can have whatever you need. Maybe your family does you have a big family. You all get your haircut every once in a while. So, you have to put that in your in your budget or you some people cut their own hair.

00:11:40 But, I'm just saying that can add up if if you have a lot of kids or you get your hair dyed, all those things. So when you come back on next week, we would love for you to have to know what you make every single month and then have created categories and every single thing that you have bought in the last month be in a category. That is our homework for you. Next week we're going to be diving into debt. And so we are so excited for you to live debtree to really find freedom in your finances to achieve the goals and dreams that you

00:12:11 have for your family. And that starts with paying off your debt first. And so next week we'll be finishing up budgeting and then diving into debt and why it matters. Thanks so much for joining us on Financially Speaking with Greg and Rachel. Hopefully you enjoyed this topic of budgeting basics. If you're on YouTube, make sure to smash that like button for the YouTube algorithm and let us know down in the comments what is your craziest budget category. But anyways, we'll see you in two weeks.