WEBVTT - Different Approaches to Budgeting #176 0:00:00.080 --> 0:00:02.280 Welcome to How the Money. I'm Joel and I and 0:00:02.400 --> 0:00:25.000 that today we're discussing different approaches to budgeting. Yeah, Joe, 0:00:25.079 --> 0:00:27.479 what's so great about this episode is that we're not 0:00:27.480 --> 0:00:29.640 only going to talk about why it's so important for 0:00:29.720 --> 0:00:32.280 us to budget that the many benefits, and how we 0:00:32.280 --> 0:00:34.519 can achieve the different goals that we've set for ourselves, 0:00:34.520 --> 0:00:37.120 but we're gonna specifically talk about some of the different 0:00:37.280 --> 0:00:41.240 methods of budgeting. Depending on your personality, right, just depending 0:00:41.280 --> 0:00:43.000 on the type of person you are, there's gonna be 0:00:43.000 --> 0:00:45.559 some what your anagram number is, that's actually what we 0:00:45.560 --> 0:00:49.839 should have called it, like anagram budget. You're really into that, 0:00:49.880 --> 0:00:52.400 aren't you know? I'm not my wife is I'm not? Well, 0:00:52.760 --> 0:00:55.680 you keep calling me, uh four? Is that what you say? 0:00:55.720 --> 0:00:57.360 I am? And you're you know you're a five? I 0:00:57.360 --> 0:00:59.840 think five. But literally, I only know that because of 0:00:59.840 --> 0:01:02.640 what other people say about types. I haven't read a 0:01:02.640 --> 0:01:05.120 book listen. I listened to one podcast episode because my 0:01:05.120 --> 0:01:06.959 wife asked me too, but like, you must listen to this. 0:01:07.280 --> 0:01:09.880 But other than that, I don't know what they're about it. Yeah. 0:01:09.880 --> 0:01:12.240 The fact is, if you have tried to budget before 0:01:12.840 --> 0:01:14.520 and have failed, I think there's a good chance that 0:01:14.560 --> 0:01:16.720 maybe you try to budget in a way that didn't 0:01:16.720 --> 0:01:19.560 necessarily fit to how you naturally think about things. And 0:01:19.600 --> 0:01:21.759 so that's what we're gonna talk about this episode. Yeah, 0:01:21.800 --> 0:01:25.120 we personal finance is personal for a reason. We all 0:01:25.200 --> 0:01:27.520 have like things that click in our brain make more 0:01:27.520 --> 0:01:29.280 sense to us. And so if we can talk about 0:01:29.280 --> 0:01:32.000 budgets and help people find a way of budgeting that 0:01:32.040 --> 0:01:34.440 makes sense for kind of how they think about things, 0:01:34.760 --> 0:01:36.800 then we want to do that because we want people 0:01:36.840 --> 0:01:39.360 to master their money, no matter what their personality type is, 0:01:39.400 --> 0:01:42.160 no matter what their tendencies are. But Matt, before we 0:01:42.200 --> 0:01:45.240 get into that, I saw recently that our good friend 0:01:45.280 --> 0:01:47.960 Warren Buffett are Yeah, are good, buddy? Pause, He's on 0:01:47.960 --> 0:01:49.880 speed out. He's in my t mobile phave five. He's 0:01:49.880 --> 0:01:53.080 one of my favorites. Yeah, he just ditched his flip phone. 0:01:53.280 --> 0:01:55.000 He finally went to a smartphone for the first time 0:01:55.040 --> 0:01:57.120 at the ripe old age of eighty nine. Nice. He 0:01:57.160 --> 0:01:58.680 got with the times. Man, he's gotten too old to 0:01:58.680 --> 0:02:00.640 teach the dog new tricks. You have the newest version 0:02:00.680 --> 0:02:03.160 of the iPhone, I think, so where you go? Good 0:02:03.160 --> 0:02:05.160 for him? But man, how cool is that this guy 0:02:05.200 --> 0:02:07.600 who's one of the richest guys in the world, and 0:02:07.880 --> 0:02:09.919 he says, you know what, I don't I don't need 0:02:09.960 --> 0:02:12.079 the trappings of new technology. I don't need the latest 0:02:12.080 --> 0:02:14.200 and greatest. And he's just kind of that. He's that 0:02:14.280 --> 0:02:15.720 kind of guy. He's lived in the same house for 0:02:15.800 --> 0:02:19.160 like fifty years or something, and he's been rolling with 0:02:19.200 --> 0:02:22.080 his flipphone for such a He's a stubborn old man, 0:02:22.200 --> 0:02:25.000 is what it sounds like, Like how much how much 0:02:25.000 --> 0:02:27.840 of that is himning frugal versus you know, him not 0:02:27.880 --> 0:02:29.799 wanting to learn the new technology. That's a good point. 0:02:29.840 --> 0:02:31.600 But the fact is, though that he is older than 0:02:31.639 --> 0:02:33.239 he was and he's just like, dang it, I guess 0:02:33.280 --> 0:02:35.200 I'm gonna have to learn the new technology. I could 0:02:35.240 --> 0:02:38.000 see him in his office playing candy Crush, like just 0:02:38.040 --> 0:02:40.440 swiping all over the place. Right. It does make me 0:02:40.480 --> 0:02:43.399 not feel so great about rocking my iPhone se which 0:02:43.440 --> 0:02:45.079 I still am. By the way, I've got I got, 0:02:45.160 --> 0:02:47.720 I got the iPhone sc and I kind of wear 0:02:47.760 --> 0:02:49.519 it as like a badge of honor, the fact that 0:02:49.560 --> 0:02:51.880 I still have this crazy old iPhone. But you know 0:02:51.880 --> 0:02:54.079 what I mean, it still works. I still take really 0:02:54.080 --> 0:02:56.720 good photos. With it, throw pictures up on Instagram, take 0:02:56.720 --> 0:02:59.520 pictures of the kids. It still makes phone calls, maybe 0:02:59.560 --> 0:03:02.919 more than maybe Warren would trade with you. He doesn't care, yeah, 0:03:02.960 --> 0:03:04.760 because he's like, I don't really need it, Like I'll 0:03:04.800 --> 0:03:07.160 take an older version. That's fine. But it's funny too 0:03:07.240 --> 0:03:11.080 because what his company, Berkshire Hathaway, owns like over five 0:03:11.560 --> 0:03:15.000 of Apple stock. So I'm sure he would have thought 0:03:15.000 --> 0:03:16.840 that they would have like thrown in a free iPhone 0:03:16.919 --> 0:03:18.560 right in there, right, and maybe maybe they did. I 0:03:18.600 --> 0:03:20.320 don't know, but I mean, I don't know. I just 0:03:20.360 --> 0:03:22.359 appreciate that. I think we can all learn a lesson 0:03:22.440 --> 0:03:25.400 from someone who has, you know, more money than they 0:03:25.400 --> 0:03:27.000 could ever spend more money than they know what to 0:03:27.040 --> 0:03:29.679 do with, and yet they still live simply that That's 0:03:29.680 --> 0:03:32.280 something that that I strive for, no matter where I'm 0:03:32.320 --> 0:03:34.640 at in my earning cycle, no matter what my life 0:03:34.639 --> 0:03:38.920 looks like, I want my life to have simplicity to it. 0:03:38.960 --> 0:03:40.680 And so, yeah, I don't know, I respect him for that. 0:03:40.720 --> 0:03:42.560 And by the way, one other thing that he said 0:03:42.640 --> 0:03:47.600 recently at their the annual shareholders meeting of Berkshire Hathaway 0:03:48.000 --> 0:03:50.440 is he said, you should think about buying stocks as 0:03:50.480 --> 0:03:55.680 buying a business. And I think that specifically that the 0:03:55.760 --> 0:03:59.240 change of phrase, using terminology in that way, it can 0:03:59.240 --> 0:04:02.680 really frame things appropriately for us. And so I loved 0:04:02.720 --> 0:04:04.800 what he said there. Instead of saying I'm buying stocks, 0:04:05.080 --> 0:04:07.160 say I just you know, bought a portion of a 0:04:07.200 --> 0:04:09.080 business today. I like that approach. I think it makes 0:04:09.080 --> 0:04:11.000 a lot of sense. Yeah, I think that the temptation 0:04:11.040 --> 0:04:13.560 with stocks is that you you buy and sell right like. 0:04:13.600 --> 0:04:15.880 That's that's that's what he's fighting against our day trading 0:04:16.279 --> 0:04:18.440 people who are getting in and out of the market quickly, 0:04:18.480 --> 0:04:21.120 because that's when you lose when he's looking for value 0:04:21.160 --> 0:04:24.240 inequity within the business and people aren't buying businesses and 0:04:24.279 --> 0:04:27.679 selling businesses left and right, although folks do that with stocks, 0:04:27.720 --> 0:04:29.560 And so I agree, I think that's a great way 0:04:29.560 --> 0:04:31.400 to frame it, except that you're buying a business that 0:04:31.440 --> 0:04:33.719 you don't have to tend to, which is like, sounds 0:04:33.720 --> 0:04:35.480 like the best kind of business down in the easy 0:04:35.480 --> 0:04:37.720 button on that business purchase. Yeah, all the way, man, 0:04:37.839 --> 0:04:39.839 Let's go ahead and introduce our beer for this episode, 0:04:39.920 --> 0:04:42.839 we are drinking another beer from Goose Island. This is 0:04:42.839 --> 0:04:46.080 Bourbon County Wheat Wine Ale and again This one was 0:04:46.120 --> 0:04:49.400 sent to us by listener friend of the show, Alex, 0:04:49.480 --> 0:04:51.560 So thank you so much, Alex. Yeah, all right, Matt, 0:04:51.600 --> 0:04:54.760 let's get onto the subject at hand. We're talking about 0:04:54.800 --> 0:04:57.720 different approaches to budgeting, and we're not going to dissect 0:04:57.760 --> 0:04:59.839 anyagram numbers here, but we are going to talk about, 0:05:00.120 --> 0:05:02.600 you know, how people can figure out what budget is 0:05:02.600 --> 0:05:05.160 going to work best for them, because in all likelihood 0:05:05.240 --> 0:05:07.640 you need some sort of a budget. But budgets are 0:05:07.640 --> 0:05:10.599 often viewed as like a four letter word. I envision 0:05:10.680 --> 0:05:13.240 people screaming budget when they stub their toe, as opposed 0:05:13.279 --> 0:05:16.440 to you know, another unsavory words would be a curse 0:05:16.480 --> 0:05:20.720 word for you, right, budget, But only couples keep a 0:05:20.760 --> 0:05:23.200 written budget of any kind, and I can't imagine that 0:05:23.240 --> 0:05:25.680 the numbers are much higher for single folks either. So 0:05:25.760 --> 0:05:28.880 let's say you do find the audacity to start creating 0:05:28.880 --> 0:05:30.800 a budget. Well, there are so many different ways that 0:05:30.839 --> 0:05:33.760 you begin, and that can be overwhelming for folks. Right there, 0:05:33.800 --> 0:05:36.120 there are different apps that offer to help us in 0:05:36.480 --> 0:05:40.240 various methods, and different money experts claiming that they're gonna 0:05:40.360 --> 0:05:43.000 be able to help us actually stick to it this time. 0:05:43.400 --> 0:05:45.839 So Matt, I think it's our goal on this episode right, 0:05:45.880 --> 0:05:48.120 to make budgeting a little simpler and a little more 0:05:48.160 --> 0:05:52.720 approachable for people and how they live life. In this episode, yes, 0:05:52.760 --> 0:05:55.760 completely man, Most people like they buck at the idea 0:05:55.839 --> 0:05:58.680 of starting or you know, keeping and maintaining a budget. 0:05:58.880 --> 0:06:00.880 But we want to help you read lines that budgeting 0:06:00.880 --> 0:06:03.680 can actually help you achieve your greater goals and provide 0:06:03.720 --> 0:06:05.480 you with some piece of mind when it comes to 0:06:05.680 --> 0:06:08.680 your money situation. Budgeting can help you live within your 0:06:08.720 --> 0:06:11.120 means and achieve your goals that you've never been able 0:06:11.160 --> 0:06:13.560 to and maybe it can help you avoid the fights 0:06:13.920 --> 0:06:16.640 that plagued your relationship when it comes to money. And also, 0:06:16.720 --> 0:06:18.360 you know, like we said, we're not only just going 0:06:18.400 --> 0:06:20.800 to highlight the benefits of budgeting, but we're gonna show 0:06:20.800 --> 0:06:23.839 how it can look different based on the different personality types, 0:06:23.839 --> 0:06:27.000 based on your personal preferences. Yeah, and the biggest reason 0:06:27.080 --> 0:06:30.520 for any of us to budget, the whole reason behind it, 0:06:30.640 --> 0:06:34.560 is that budgets help us achieve our goals. Right, because 0:06:34.680 --> 0:06:37.440 money is a limited resources for most of us except 0:06:37.480 --> 0:06:40.120 for our friend Warren, but we all have to prioritize 0:06:40.120 --> 0:06:42.240 and to put money towards the different goals that we 0:06:42.279 --> 0:06:44.520 each have. So it's important for us to focus on 0:06:44.560 --> 0:06:47.400 those greater wise behind our money, like why we do 0:06:47.440 --> 0:06:50.159 things what we want for our life, and then letting 0:06:50.160 --> 0:06:52.640 our money kind of fall in line with those greater 0:06:52.720 --> 0:06:56.600 goals before we take a deep dive into the actual 0:06:56.640 --> 0:06:59.080 specific numbers. So, Matt, let's go over a couple of 0:06:59.120 --> 0:07:03.160 the common goals and reasons that people do find themselves 0:07:03.160 --> 0:07:04.839 in need of a budget. And I think the first 0:07:04.880 --> 0:07:09.200 one is kind of out of complete necessity, right, just 0:07:09.200 --> 0:07:11.760 just to be able to make ends meet. Budgeting is 0:07:12.320 --> 0:07:15.120 a crucial factor for a lot of people who have 0:07:15.240 --> 0:07:17.600 to stretch the dollars that they make in a given 0:07:17.640 --> 0:07:19.880 month to fit all the needs that they have in 0:07:19.880 --> 0:07:22.280 that very same month. Right, And so even if you 0:07:22.280 --> 0:07:25.200 have a steady W two job, if there's not enough 0:07:25.240 --> 0:07:27.600 money to go around, a lot of folks will will 0:07:27.640 --> 0:07:31.080 need to find discipline inside of a budget with their 0:07:31.120 --> 0:07:33.720 money in order to just survive, just to be able 0:07:33.800 --> 0:07:36.640 to put food on the table, pay rent, and make 0:07:36.680 --> 0:07:38.320 sure they have gas to fill up their car to 0:07:38.360 --> 0:07:40.640 get to and from work. So yeah, just to avoid 0:07:40.720 --> 0:07:42.880 going into debt, to be able to make ends meet 0:07:42.920 --> 0:07:45.800 every month, let alone to achieve you know, potential other goals. 0:07:45.960 --> 0:07:50.200 Budgeting is just a necessity for tens of millions of Americans. 0:07:50.440 --> 0:07:52.040 And so if we can get some of those people 0:07:52.040 --> 0:07:54.559 on the budgeting track, I think we'd be we'd be happy, 0:07:54.680 --> 0:07:57.280 right absolutely, man. And you know, in addition to folks 0:07:57.680 --> 0:07:59.880 trying to get by, there's a lot of folks as 0:08:00.040 --> 0:08:02.520 well who are in careers where they're not on a 0:08:02.560 --> 0:08:05.040 fixed wage, right, Like, it's important to make a plan 0:08:05.360 --> 0:08:08.679 in order to have enough money to invest, save, and spend. 0:08:09.240 --> 0:08:12.800 There is incredible flexibility, right that I personally absolutely love 0:08:12.880 --> 0:08:15.440 as a freelancer owning my own business, but the income 0:08:15.520 --> 0:08:17.600 is flexible as well, and that can really be a 0:08:17.680 --> 0:08:20.120 challenge if you don't have that steady paycheck coming in 0:08:20.200 --> 0:08:22.880 every two weeks. Yeah, Matt. And another reason why budgets 0:08:22.920 --> 0:08:24.440 are are such a good thing to have for so 0:08:24.480 --> 0:08:27.720 many people is to save up for those bigger goals. 0:08:28.160 --> 0:08:30.800 And I think so many times without a budget, we 0:08:30.840 --> 0:08:32.760 see what we bring in every month, and we kind 0:08:32.760 --> 0:08:34.960 of dole it out every month to the things that 0:08:35.120 --> 0:08:37.760 seem like the most urgent. And if we do that, 0:08:37.800 --> 0:08:40.480 we avoid being able to save and invest for longer 0:08:40.600 --> 0:08:42.800 term goals that we have saving up for a trip, 0:08:42.880 --> 0:08:45.560 or a new car, hopefully a new use car, but uh, 0:08:45.800 --> 0:08:48.480 but down payment on a house. I mean, most folks 0:08:48.600 --> 0:08:52.000 default to spending every single penny they make, and sometimes 0:08:52.000 --> 0:08:54.680 more going into credit card debt. And while those immediate 0:08:54.720 --> 0:08:57.439 needs and wants can be put on credit cards, this 0:08:57.520 --> 0:08:59.640 is a dead end path, right because you can't put 0:08:59.679 --> 0:09:02.360 your hirement on a credit card. And so for folks 0:09:02.480 --> 0:09:05.680 that find that they constantly have to put their larger 0:09:05.760 --> 0:09:10.040 goals on hold, well, a budget is a perfect solution 0:09:10.120 --> 0:09:12.120 for someone like that. Yeah, totally, man. We know we 0:09:12.160 --> 0:09:14.280 talked about how achieving goals is one of the biggest 0:09:14.280 --> 0:09:18.120 reasons that we budget, but specifically achieving savings and financial 0:09:18.160 --> 0:09:20.440 goals is is such a huge part of that. Personally, 0:09:20.480 --> 0:09:22.280 for me, one of the reasons I like the budget 0:09:22.480 --> 0:09:25.760 is just having an understanding and having knowledge about what 0:09:25.800 --> 0:09:27.880 I'm spending my money on. Right, Like, some folks are 0:09:27.880 --> 0:09:29.720 a little nerdier like me, and they'd like to know 0:09:29.760 --> 0:09:31.600 all the details, and so I know, for me, when 0:09:31.640 --> 0:09:33.840 I'm able to understand and wrap my brain around the 0:09:33.840 --> 0:09:37.560 big picture, I'm able to stick with whatever plan I've 0:09:37.800 --> 0:09:40.280 you know, decided I'm gonna do because I understand the 0:09:40.280 --> 0:09:42.959 why behind that, right, And so for me when I budget, 0:09:43.160 --> 0:09:45.040 if I know why it is and how it is 0:09:45.120 --> 0:09:46.880 i'm doing this and I can I'm able to kind 0:09:46.880 --> 0:09:48.280 of see it from the start all the way to 0:09:48.320 --> 0:09:50.439 the finish, I have a much better chance of completing 0:09:50.480 --> 0:09:52.080 that and seeing it to the end. I remember being 0:09:52.080 --> 0:09:54.520 a kid and I would ask my parents why a lot, 0:09:55.640 --> 0:09:58.080 as most kids do. I could especially see you being 0:09:58.160 --> 0:10:02.080 the white kid why, And yes that I was just 0:10:02.280 --> 0:10:05.040 much more likely to actually obey or follow through when 0:10:05.080 --> 0:10:07.040 something when I knew like why I was doing it. 0:10:07.240 --> 0:10:09.200 And I think all of us have a little bit 0:10:09.240 --> 0:10:11.680 of that to ourselves, right, and so much more than others. 0:10:11.679 --> 0:10:14.640 But the more we can understand kind of how things work, 0:10:14.960 --> 0:10:17.360 why we're doing it, what direction we're going in, the 0:10:17.400 --> 0:10:19.760 easier it is to actually follow through on that thing. 0:10:19.800 --> 0:10:22.360 And so, yeah, sorry mom and dad that I was 0:10:22.400 --> 0:10:25.360 that kid. It's like, well, why, it's because I said so. 0:10:25.960 --> 0:10:28.000 Maybe later I'll explain it to you. Definitely douse that 0:10:28.080 --> 0:10:30.360 at some point in my parenting already. Uh well, And 0:10:30.400 --> 0:10:33.240 another great reason for folks to start budgeting as well 0:10:33.280 --> 0:10:35.880 as to avoid money fights, right, if you have a 0:10:35.880 --> 0:10:39.520 significant other, budgeting can get you both on the same page. 0:10:39.679 --> 0:10:42.520 It's easy to talk in generalities, but money is a 0:10:42.600 --> 0:10:45.520 very specific and concrete thing, and so there's no better 0:10:45.520 --> 0:10:48.240 way to talk about the specifics of money than with 0:10:48.280 --> 0:10:51.439 a budget. Like that's speaking money is a budget, right, 0:10:51.440 --> 0:10:52.920 Like you want to learn how to speak money. It's 0:10:52.920 --> 0:10:55.560 a budget, Like that's the textbook easiest way to communicate 0:10:55.559 --> 0:10:57.920 about it. Yeah, but just can really improve how you 0:10:57.960 --> 0:11:01.040 communicate about your money with a signal again other, Yeah, 0:11:01.080 --> 0:11:04.400 we've received a listener email recently, so I'm talking about 0:11:04.400 --> 0:11:07.599 how budgeting is actually really helped change their life and 0:11:07.640 --> 0:11:10.319 their their dynamic as a couple, and that the budget 0:11:10.320 --> 0:11:12.439 has essentially been that place for them to be able 0:11:12.440 --> 0:11:15.320 to communicate well about money, and money is kind of 0:11:15.360 --> 0:11:17.800 the the diving off point to be able to talk 0:11:17.840 --> 0:11:20.240 about bigger goals, the things that you guys want to 0:11:20.280 --> 0:11:23.440 achieve together. And so, yeah, I just enjoy getting emails 0:11:23.440 --> 0:11:26.400 like that because it's really fun to see that money 0:11:26.400 --> 0:11:30.160 has this much greater impact beyond just the excess and 0:11:30.200 --> 0:11:33.319 the ohs, beyond the dollar signs and the decimal points. 0:11:33.360 --> 0:11:36.240 That being able to as a couple communicate well about 0:11:36.240 --> 0:11:40.320 money has led to just increased clarity in their discussions 0:11:40.360 --> 0:11:43.640 on a lot of topics in their marriage. That's awesome, man, right, 0:11:43.679 --> 0:11:45.800 I know, yeah, so cool. And I always enjoy seeing 0:11:45.840 --> 0:11:48.760 how talking about money well and a budget being that 0:11:48.920 --> 0:11:51.080 exact thing helping you to be able to talk about 0:11:51.080 --> 0:11:55.000 money well actually leads to good conversations for couples in 0:11:55.040 --> 0:11:57.240 all these other areas of life. For sure, it's really 0:11:57.320 --> 0:11:59.800 encouraging to see budgets being talks about as something that 0:12:00.040 --> 0:12:02.880 rings a couple together, not as something that like one 0:12:02.960 --> 0:12:05.959 is hitting the other person overhead with, right exactly. And 0:12:06.040 --> 0:12:08.040 I think the reason that a budget can be especially 0:12:08.080 --> 0:12:10.400 helpful for couples as well is because essentially, like all 0:12:10.400 --> 0:12:12.439 it is is a plan for your money. Like it's 0:12:12.440 --> 0:12:15.080 a plan that you both agree to or that you 0:12:15.240 --> 0:12:17.880 just agree to yourself if you're single, but it's something 0:12:17.880 --> 0:12:20.520 that you've created to help you achieve your goals, right, 0:12:20.800 --> 0:12:24.280 whatever those goals might be. It's just an intentional approach 0:12:24.360 --> 0:12:26.280 to what you're going to do with your money so 0:12:26.320 --> 0:12:28.800 that you don't get to the end of your working 0:12:28.840 --> 0:12:31.880 career of your lifetime wondering where all of your money 0:12:31.880 --> 0:12:34.400 has gone. And that's easy to do. I mean, I 0:12:34.440 --> 0:12:36.520 know that we feel that which is like the hours 0:12:36.520 --> 0:12:38.920 in our day sometimes that we we waste them more 0:12:38.920 --> 0:12:41.040 like what did I even do today? I think I 0:12:41.080 --> 0:12:43.400 especially remember some of those days when I was younger. Well, 0:12:43.480 --> 0:12:44.959 now I've got kids pulling on me, a lot of 0:12:45.000 --> 0:12:47.280 stuff to do, but I totally remember the days like 0:12:47.320 --> 0:12:50.320 that in my early twenties where I don't know what 0:12:50.320 --> 0:12:52.640 I got accomplished that day, but you're like, it's six thirty. 0:12:52.640 --> 0:12:55.920 I guess it's time to eat. Yeah, and and so yeah. 0:12:55.960 --> 0:12:57.719 I think the same thing can definitely be true of 0:12:57.760 --> 0:13:00.120 our money, that if we're not thoughtful about it, if 0:13:00.120 --> 0:13:02.559 we don't have kind of a plan, we can waste 0:13:02.640 --> 0:13:04.680 that money and miss out on the bigger goals that 0:13:04.720 --> 0:13:06.880 we that we have that are buried underneath that we 0:13:06.920 --> 0:13:09.400 just haven't even gotten around to finding out what they are. Sometimes, 0:13:09.640 --> 0:13:12.040 And Matt, that plan is the budget. And we're gonna 0:13:12.080 --> 0:13:14.359 talk more about that and get into kind of specific 0:13:14.360 --> 0:13:17.600 budgeting styles for different personality types right after the break. 0:13:26.800 --> 0:13:28.199 All right, we're back in the break, Matt. We're talking 0:13:28.240 --> 0:13:32.559 about budgeting and different approaches to budgeting. One approach would 0:13:32.559 --> 0:13:34.360 be to not have a budget at all. That doesn't 0:13:34.360 --> 0:13:37.200 really sound like a method or an approach. It is 0:13:37.200 --> 0:13:40.280 an approach some people take, and I guess it begs 0:13:40.280 --> 0:13:43.440 the question, though, are there people who don't need to budget? 0:13:44.000 --> 0:13:45.840 And so I think you and I actually kind of 0:13:45.840 --> 0:13:48.640 disagree on this point, so let's hash it out. I 0:13:48.679 --> 0:13:52.280 would say that, yes, there are some folks, a small 0:13:52.360 --> 0:13:55.880 sliver of folks that can get away with not having 0:13:55.880 --> 0:13:58.480 a budget. I think budgets are best at helping us 0:13:58.559 --> 0:14:01.320 put our money towards the areas that we value in life, 0:14:01.559 --> 0:14:03.600 and they can be a pivotal part of of increasing 0:14:03.679 --> 0:14:06.160 what we save and invest. But if you are kind 0:14:06.160 --> 0:14:10.959 of this natural saver, someone that generally likes to max 0:14:10.960 --> 0:14:13.240 out there for oh one k, who's always looking to 0:14:13.280 --> 0:14:16.080 put more money aside, you might not need a budget. 0:14:16.480 --> 0:14:18.080 And and Matt, that was that was kind of me 0:14:18.240 --> 0:14:21.280 before I got married, was I I didn't feel like 0:14:21.280 --> 0:14:22.760 I needed a budget because I felt like I was 0:14:22.840 --> 0:14:25.720 naturally just looking for ways to save more of my 0:14:25.800 --> 0:14:28.200 money and invest for the future, and so taking the 0:14:28.280 --> 0:14:30.480 time to create and stick to a budget just didn't 0:14:30.480 --> 0:14:33.680 feel necessary for me. And again, I don't think that 0:14:33.720 --> 0:14:38.400 this is something that is applicable to most folks out there. 0:14:38.520 --> 0:14:40.400 I think most folks need a budget, Like, they need 0:14:40.400 --> 0:14:42.160 that to build communicate with their spouse, and they need 0:14:42.200 --> 0:14:44.280 that to allocate their money in a way that aligns 0:14:44.280 --> 0:14:46.680 with their values. But I think for a few people 0:14:46.720 --> 0:14:51.320 at least, not budgeting can be a method that makes sense. 0:14:51.360 --> 0:14:52.960 All right, Matt, I see you roll in your eyes, 0:14:53.000 --> 0:14:54.960 So tell me why I'm wrong. Well, here's the thing. 0:14:55.200 --> 0:14:57.640 I don't think it necessarily has to do with, you know, 0:14:57.680 --> 0:15:00.880 whether or not you are saving or seeing enough money, 0:15:01.080 --> 0:15:03.440 right Like, So I would argue that everyone needs to 0:15:03.480 --> 0:15:06.920 have a budget. Most Americans have a really tough time 0:15:07.080 --> 0:15:09.880 saving and putting enough for their income towards retirement. Like, 0:15:09.960 --> 0:15:12.280 that's one of the biggest reasons to budget, right, That's 0:15:12.320 --> 0:15:14.280 what we've been talking about. But let's say there is 0:15:14.320 --> 0:15:16.720 someone who is one of the rare folks who is 0:15:16.760 --> 0:15:20.000 frugal and saves a ton of money. Right, retirement is 0:15:20.040 --> 0:15:23.120 getting maxed out. Extra money is going towards other investments. 0:15:23.200 --> 0:15:26.080 Maybe money is going towards smart real estate deals. And 0:15:26.120 --> 0:15:28.000 so in this example, I would argue that the budget 0:15:28.040 --> 0:15:30.320 needs to be there not to get that individual to 0:15:30.480 --> 0:15:33.560 save more, but to spend more of their money, right, Like, 0:15:33.640 --> 0:15:36.080 chances are if that you were to sit that person 0:15:36.120 --> 0:15:38.520 down and ask them, like, what are the important things 0:15:38.520 --> 0:15:40.800 in your life that you value? Like they'll name a 0:15:40.800 --> 0:15:43.200 few things, and then I would ask them if they're 0:15:43.200 --> 0:15:46.120 spending their money in a way that reflects those values, right. 0:15:46.280 --> 0:15:48.240 It's like, so, for example, a lot of folks will 0:15:48.240 --> 0:15:50.960 say that they value friendship or relationships. I think that's 0:15:50.960 --> 0:15:53.320 one of the ways that folks who are super savers 0:15:53.760 --> 0:15:55.560 and who are really unto the money might get carried 0:15:55.560 --> 0:15:57.640 away and they're like, oh, you know, like I don't 0:15:57.680 --> 0:15:59.240 want to go out for drinks because I'm trying to 0:15:59.280 --> 0:16:01.120 I'm trying to say, Or they're like, I don't want 0:16:01.120 --> 0:16:03.480 to go on that vacation because that's gonna that's gonna 0:16:03.480 --> 0:16:06.240 put my five date, my financial independence date back, you know, 0:16:06.240 --> 0:16:08.160 it's gonna push it down the road another year, like 0:16:08.240 --> 0:16:10.200 that kind of thing. But if you ask them like, 0:16:10.320 --> 0:16:12.600 is this something that's valuable to you? Like is this important? 0:16:12.600 --> 0:16:14.520 They would say yes, and and so it would It 0:16:14.560 --> 0:16:17.520 takes sometimes, I think a budget to highlight that, Like 0:16:17.600 --> 0:16:19.560 there are lasting memories that you might be missing out 0:16:19.600 --> 0:16:22.400 on were you to to skimp in those situations. See, 0:16:22.480 --> 0:16:23.960 that's why I like you. I like being your friend 0:16:24.000 --> 0:16:26.040 because I feel like you bring a perspective sometimes that 0:16:26.080 --> 0:16:27.600 I don't have. I'm trying to get you to spend 0:16:27.640 --> 0:16:30.840 your money, well, not you specifically. This is a hypothetical, right, 0:16:30.920 --> 0:16:32.680 but I mean that that honestly, that kind of like 0:16:32.920 --> 0:16:35.000 was me for a while back in the day, and 0:16:35.040 --> 0:16:37.000 I feel like having a budget, talking about it with 0:16:37.000 --> 0:16:39.560 Emily and are us having shared goals together, it's been 0:16:39.600 --> 0:16:42.360 really really helpful. And now it would be hard for me, 0:16:42.960 --> 0:16:45.880 you know, to to live life with that one because 0:16:46.000 --> 0:16:48.640 I do feel like it informs kind of the values 0:16:48.680 --> 0:16:50.920 that I have and it does force me in a 0:16:50.920 --> 0:16:52.680 good way to spend money on the things that do 0:16:52.760 --> 0:16:55.040 matter to me. And that is something that I like 0:16:55.120 --> 0:16:56.840 you and I we we fight for for people. We 0:16:56.880 --> 0:16:59.080 want people to experience that where they are able to 0:16:59.120 --> 0:17:01.440 save and invest well for the future while well also 0:17:01.480 --> 0:17:03.480 spending money today on things that they care about. Right, 0:17:03.520 --> 0:17:05.520 I mean, that's that's the magical place. That's a good 0:17:05.520 --> 0:17:07.560 place for people, and that's what a budget can, I agree, 0:17:07.600 --> 0:17:09.520 really help people do. Yeah. I feel like so much 0:17:09.560 --> 0:17:11.199 of of what I guess I'm trying to communicate here 0:17:11.280 --> 0:17:14.800 is that, uh, folks see budgets as being something that 0:17:14.800 --> 0:17:17.240 that are restricting, right, but in reality that I'm trying 0:17:17.240 --> 0:17:18.919 to like flip that around and trying and turn it 0:17:18.960 --> 0:17:21.480 around for folks and say, like, no, there's freedom in 0:17:21.520 --> 0:17:23.840 a budget. And I've seen this specifically with my wife 0:17:23.920 --> 0:17:26.720 Kate as well, Like she feels and she's always felt 0:17:26.760 --> 0:17:28.720 this way, but she'll feel a little guilty for spending 0:17:28.760 --> 0:17:30.399 money because she knows that, like, oh, I know I 0:17:30.440 --> 0:17:32.359 could save this and that would be a smarter thing 0:17:32.400 --> 0:17:35.040 to do. But if we've identified that, like, no, this 0:17:35.119 --> 0:17:37.240 is important for us to do, this is something that 0:17:37.280 --> 0:17:39.480 we want to put our money towards, well, then if 0:17:39.480 --> 0:17:41.200 you look at the budget and there's still money left, 0:17:41.359 --> 0:17:44.560 there should be complete freedom to spend that money and 0:17:44.600 --> 0:17:47.199 not feel guilty about it at all. Yeah. No, I 0:17:47.240 --> 0:17:49.080 love that, all right. So let's talk about the other 0:17:49.160 --> 0:17:52.720 methods besides the non method of not budgeting that we've 0:17:52.800 --> 0:17:54.760 kind of thought out here and and and we What 0:17:54.800 --> 0:17:57.000