WEBVTT - You Need a Bare Bones Budget #362 0:00:00.160 --> 0:00:02.679 Welcome to How to Money. I'm Joel, and too, I 0:00:02.720 --> 0:00:06.160 am Matt, and today we're discussing why you need a 0:00:06.200 --> 0:00:07.080 bare bones budget. 0:00:25.800 --> 0:00:28.080 You know, a bare bones budget. It's got that BBB 0:00:28.240 --> 0:00:31.240 action going on, some nice alliteration for our listeners today, 0:00:31.360 --> 0:00:33.839 like a better business bureaud. Okay, So here is what 0:00:34.080 --> 0:00:37.000 this episode makes me think of. You know, when you 0:00:37.040 --> 0:00:39.680 start acquiring items for your closet, like your wardrobe, and 0:00:39.840 --> 0:00:41.400 you kind of just add another hanger in there, and 0:00:41.440 --> 0:00:43.160 you're like, oh, you know, I ran out of hangers. 0:00:43.200 --> 0:00:45.240 Let's buy another pack of hangers, and you start filling 0:00:45.280 --> 0:00:48.080 your closet, it starts bulging. It's about the bus at 0:00:48.120 --> 0:00:52.080 that seems. I feel like our budgets can act that way, right, Like, 0:00:52.200 --> 0:00:55.120 over time, as we add line items to our budget, 0:00:55.200 --> 0:00:57.480 it can start to swell. Maybe now that we're you know, 0:00:57.520 --> 0:00:59.600 we've got a legit job. Maybe you go on like 0:00:59.800 --> 0:01:02.360 acation every year with your friends or something like that, 0:01:02.600 --> 0:01:05.240 or maybe you like clothing, like that's something that you 0:01:05.280 --> 0:01:08.000 really value, or maybe you really like electronics. It's okay 0:01:08.080 --> 0:01:10.480 to spend money on the things that you enjoy, the 0:01:10.480 --> 0:01:12.720 things that bring you value, but the effect that that 0:01:12.840 --> 0:01:15.440 has on our budget is it. It starts getting kind 0:01:15.440 --> 0:01:17.840 of thick, it gets a little bit plump. And so 0:01:17.920 --> 0:01:20.040 with this episode, we want to introduce this idea of 0:01:20.560 --> 0:01:22.920 essentially like a thought experiment for folks, Right, we want 0:01:22.920 --> 0:01:25.880 folks to think through what would happen if you were 0:01:25.920 --> 0:01:28.520 to pare down your budget to the bear essentials. 0:01:28.600 --> 0:01:30.840 Yeah, we're not going to force you to create and 0:01:30.840 --> 0:01:32.880 then adhere to this bear bones budget, but we do 0:01:32.920 --> 0:01:35.440 think there's a whole lot that could be gained by 0:01:35.800 --> 0:01:37.720 by just trying it out and seeing what happens by 0:01:37.760 --> 0:01:40.280 at least creating one. And so we're going to talk 0:01:40.319 --> 0:01:42.240 about how you do that and what you're going to 0:01:42.280 --> 0:01:43.600 gain by doing that in today's. 0:01:43.360 --> 0:01:47.160 Yeah, there's a lot of benefits from partaking in this exercise. 0:01:46.760 --> 0:01:48.360 No doubt. Before we get to that, mat, I want 0:01:48.360 --> 0:01:51.360 to quickly mention listener Holly send us an email and 0:01:51.480 --> 0:01:54.080 she had mentioned this app that I hadn't heard about, 0:01:54.080 --> 0:01:56.320 and I feel like we had to look into it 0:01:56.360 --> 0:01:59.960 called Giveling, and it's this like student loan app or 0:02:00.080 --> 0:02:02.800 people come together they play trivia games and sometimes say 0:02:03.280 --> 0:02:06.920 pay money to play more trivia games and see if 0:02:06.960 --> 0:02:09.240 they can move up the standings in order to win 0:02:09.240 --> 0:02:11.680 a big prize to help pay off their student loans. 0:02:12.040 --> 0:02:14.160 And yeah, I mean I know you took a look 0:02:14.200 --> 0:02:15.640 at this too. Yeah, what would you think about it? 0:02:15.720 --> 0:02:17.320 Dude? Yeah, it seemed a little too good to be 0:02:17.360 --> 0:02:19.000 true because one of the things they say is that 0:02:19.040 --> 0:02:21.079 once you get to the number one spot, you're eligible 0:02:21.080 --> 0:02:23.880 for the grand prize, which is a fifty thousand dollars 0:02:23.919 --> 0:02:25.280 student loan payoff. 0:02:24.919 --> 0:02:26.919 Which you know, to anybody who has a bunch of 0:02:26.960 --> 0:02:30.359 student loans is like, that's that's music to my ears exactly. 0:02:30.360 --> 0:02:33.000 And here's the thing, dude, I was almost even hesitant 0:02:33.040 --> 0:02:34.399 for us to even talk about it because I don't 0:02:34.400 --> 0:02:36.760 want people to get the idea that this is something 0:02:36.800 --> 0:02:38.640 that they need to do, because there are some serious 0:02:38.680 --> 0:02:41.560 red flags, right because you're able to move up that 0:02:41.680 --> 0:02:44.440 queue by acquiring I think what they call Q points, 0:02:44.680 --> 0:02:47.240 and you do that by you can answer trivia, you 0:02:47.280 --> 0:02:50.600 can watch ads within the app. You can also make 0:02:50.639 --> 0:02:54.520 purchases like from their just different companies that they've partnered with, 0:02:54.840 --> 0:02:57.440 and also by referring people from reading up on it. 0:02:57.480 --> 0:02:59.320 Those are all ways that you can get closer to 0:02:59.440 --> 0:03:02.760 that kind of prize, but specifically that last way of 0:03:02.760 --> 0:03:06.120 getting points, referrals, pulling your friends in, dude. That's the 0:03:06.440 --> 0:03:08.360 part of this that makes me feel like that this 0:03:08.440 --> 0:03:10.400 is more of a pyramid scheme than anything else, right, 0:03:10.440 --> 0:03:14.040 because essentially they are counting on the additional people that 0:03:14.080 --> 0:03:17.519 are coming in in order to pay off the prizes 0:03:17.600 --> 0:03:19.880 for the folks at the top, right, And anytime you 0:03:19.960 --> 0:03:22.600 have any sort of model like that that's dependent on 0:03:22.919 --> 0:03:25.359 the acquisition of more customers in order to be successful, 0:03:25.360 --> 0:03:28.600 because there isn't truly an actual product. It makes me 0:03:28.639 --> 0:03:31.040 feel that at some point if there are not enough 0:03:31.040 --> 0:03:33.600 folks kind of at that base of the pyramid, you 0:03:33.639 --> 0:03:36.720 know what happens that the pyramid essentially gets inverted, and 0:03:36.760 --> 0:03:39.120 so you've got a fewer number of people at the 0:03:39.160 --> 0:03:41.200 bottom paying into it. You've got a lot of people 0:03:41.240 --> 0:03:43.800 invested who are waiting for that big payout at the 0:03:43.800 --> 0:03:48.240 top exactly, and it's going to fail. And so something 0:03:48.280 --> 0:03:50.480 like this, you can have so many people who are invested, 0:03:50.600 --> 0:03:53.120 like literally invested. The We can link to an article 0:03:53.120 --> 0:03:55.080 that we came across, but there's folks who have paid 0:03:55.120 --> 0:03:58.040 in thousands of dollars and there's nothing really keeping a 0:03:58.080 --> 0:04:00.600 company like this from going bankrupt. Now, next year or 0:04:00.600 --> 0:04:01.760 like tomorrow. 0:04:01.400 --> 0:04:03.600 Right, Yeah, I think it is. It's one of those 0:04:03.600 --> 0:04:05.839 things where people get excited to think that they could 0:04:05.880 --> 0:04:07.480 win a big sum of money that would help them 0:04:07.480 --> 0:04:09.200 in a massive way, maybe pay off all their student 0:04:09.240 --> 0:04:11.440 loans or at least pay off a huge chunk of it. 0:04:11.560 --> 0:04:13.760 But it's kind of like the lottery in my opinion. 0:04:14.080 --> 0:04:16.440 It might be a perment scheme. I'm not sure, but 0:04:16.760 --> 0:04:20.320 it definitely has some lottery feel to it. And they 0:04:20.360 --> 0:04:22.360 get you in there and you start to pay money 0:04:22.400 --> 0:04:24.039 so you can continue to move up this leader board, 0:04:24.160 --> 0:04:26.640 making you think you have a greater chance of winning 0:04:26.680 --> 0:04:28.160 a big chunk of money that's going to help you 0:04:28.200 --> 0:04:30.160 in a big way. And I think, yeah, there are 0:04:30.200 --> 0:04:32.799 certain free ways that you can participate in this app 0:04:32.920 --> 0:04:34.760 where you don't have to spend a time, and I 0:04:34.800 --> 0:04:37.360 would say, like, even be careful doing that, because I 0:04:37.400 --> 0:04:40.479 think it might get you in the mental state where 0:04:40.600 --> 0:04:42.560 you're more willing to part with some of your money 0:04:42.640 --> 0:04:44.520 to try to move up and to try to win 0:04:44.560 --> 0:04:46.840 some cash. And I think the likelihood that's going to 0:04:46.880 --> 0:04:50.480 happen for you is skim, just like winning the lottery. 0:04:50.320 --> 0:04:53.039 So I would say, yeah, avoid givling I think it's 0:04:53.320 --> 0:04:56.039 an app that doesn't make sense for almost anybody. 0:04:56.120 --> 0:04:57.920 Yeah, the free aspects of it we don't have any 0:04:57.920 --> 0:04:59.800 problems with. But like you said, it's like the prime 0:04:59.880 --> 0:05:01.480 the pump a little bit and then gets you ready 0:05:01.560 --> 0:05:03.800 to pay a little bit more money into it. And 0:05:03.839 --> 0:05:06.400 specifically because it's the leader board, Like, I think that's the. 0:05:06.360 --> 0:05:08.279 Part of it that the gamification of this. 0:05:08.440 --> 0:05:10.280 Yeah, and I get it, Like I understand how it's 0:05:10.360 --> 0:05:14.280 kind of fun, but essentially there's the expectation that at 0:05:14.279 --> 0:05:16.479 some point you're going to reach the top. Right with 0:05:16.560 --> 0:05:18.920 a lottery, When folks you know, play the lottery, they 0:05:18.960 --> 0:05:21.000 know that there's a slim chance of them getting any money. Right, 0:05:21.680 --> 0:05:24.080 there's not a leader board where it's like, Okay, eventually, 0:05:24.160 --> 0:05:27.400 if I work hard enough, I will I will achieve it. Yeah, 0:05:27.440 --> 0:05:29.480 it's chance. And so there's in my mind, there's a 0:05:29.560 --> 0:05:32.919 huge difference between working towards something where you're expected to 0:05:32.960 --> 0:05:35.360 pay out versus you know, one and I don't know, 0:05:35.480 --> 0:05:37.359 ten million chance of winning the lottery or something like that, 0:05:37.360 --> 0:05:38.320 where there's a huge payout. 0:05:38.400 --> 0:05:41.360 Yeah, and gamification, we think can be a really healthy 0:05:41.360 --> 0:05:43.800 and good part of personal finance. Right that we've talked 0:05:43.800 --> 0:05:45.640 about that before on the episode. There are ways that 0:05:45.680 --> 0:05:47.920 you can gamify your own personal finances that are gonna 0:05:47.920 --> 0:05:51.479 help you in your pursuit of saving more and building wealth. 0:05:51.720 --> 0:05:54.960 This is a way that's like praying on that behavioral tendency, 0:05:55.360 --> 0:05:57.720 that a llure of gamification that's actually gonna part you 0:05:57.760 --> 0:06:00.159 from your money. So, yeah, don't participate. 0:06:00.160 --> 0:06:03.839 Games with friends that could cost you thousands of times right. 0:06:04.080 --> 0:06:05.680 Well, so, all right, Matt, let's mention the beer that 0:06:05.680 --> 0:06:07.920 we're having on the show today. This one's called Ethereal 0:06:08.000 --> 0:06:11.279 Vibrations by Monday Night Brewing, one of our favorite local breweries, 0:06:11.279 --> 0:06:14.480 and they collabed with Burial out of Ashville to make 0:06:14.520 --> 0:06:16.680 this really good looking IPA. Looking forward to having this 0:06:16.720 --> 0:06:17.839 one on the show today with you. 0:06:18.120 --> 0:06:19.680 Yeah, it's hard to go wrong when you've got one 0:06:19.720 --> 0:06:21.840 of your favorite local breweries teaming up with one of 0:06:21.880 --> 0:06:25.080 your favorite national breweries to make a delicious beer. Looking 0:06:25.080 --> 0:06:26.799 forward to enjoying this one on the show. 0:06:26.640 --> 0:06:28.280 Dude, me too. All right, But for now, onto the 0:06:28.279 --> 0:06:31.000 subject of the hand. Why you need a bear bones budget. 0:06:31.000 --> 0:06:33.279 That's what we're talking about today, And Matt, I don't 0:06:33.279 --> 0:06:35.360 know if you've seen this show there's a History Channel 0:06:35.400 --> 0:06:36.800 show called Alone. Have you seen it? 0:06:36.839 --> 0:06:40.080 I have not? Okay, so basically sounds like your worst nightmare, 0:06:40.160 --> 0:06:41.800 though it does. 0:06:41.720 --> 0:06:43.000 I like people, I would be sad. 0:06:43.480 --> 0:06:44.719 I would probably deal okay with it. 0:06:44.920 --> 0:06:48.640 You probably would. But basically what happens is that folks 0:06:48.680 --> 0:06:50.880 are allowed to bring ten items with them as they're 0:06:50.920 --> 0:06:53.880 dropped off in this remote section of the wilderness to 0:06:53.920 --> 0:06:58.760 survive amongst like okay, bears, bobcats, other various treachery. But yeah, 0:06:58.800 --> 0:07:00.600 so like ten people, they're competing against each other to 0:07:00.600 --> 0:07:03.240 see who can stay out there the longest, whether it's 0:07:03.279 --> 0:07:05.760 like thirty days, forty days, Like how long can you 0:07:05.760 --> 0:07:07.839 be out there? And you don't know how everyone else 0:07:07.920 --> 0:07:10.960 is doing. You're just trying to survive, And like the 0:07:11.000 --> 0:07:14.040 idea of doing that with only ten items, with like 0:07:14.160 --> 0:07:17.800 bare bones resources makes a show so much more interesting 0:07:18.200 --> 0:07:20.840 than if those folks were able to bring any or 0:07:20.880 --> 0:07:23.480 all of their possessions with them, right, Like, like I'm 0:07:23.480 --> 0:07:25.640 thinking of dropping them in the woods with a tiny 0:07:25.640 --> 0:07:28.200 house and a wood burning stove, and like it's like 0:07:28.920 --> 0:07:30.040 not as interesting as a show. 0:07:30.160 --> 0:07:33.240 I'd pay to go there, Yes, Like that's what's on 0:07:33.280 --> 0:07:35.040 the first page of Airbnb right now, it's just like, 0:07:35.080 --> 0:07:37.760 you know, these secluded cabins in the woods with a 0:07:37.800 --> 0:07:38.840 wood burning stove, right. 0:07:38.840 --> 0:07:39.960 And maybe an Xbox or something. 0:07:40.040 --> 0:07:42.840 Yeah. Yeah, so with panels, it's all set ready to go. 0:07:42.920 --> 0:07:44.880 Yeah, and I'm just thinking, like, not a very fun 0:07:44.920 --> 0:07:47.360 TV show to watch a dude play Xbox in the woods, right, 0:07:47.360 --> 0:07:50.800 But like seeing what people can do with limited resources 0:07:51.120 --> 0:07:53.800 is actually kind of fascinating and for some of the 0:07:53.840 --> 0:07:56.240 individuals who've gone on the show, even if they don't win, 0:07:56.480 --> 0:07:58.400 it seems like it can be like this meaningful and 0:07:58.440 --> 0:08:02.560 empowering experience. Well, we think that having a bare bones budget, 0:08:02.760 --> 0:08:04.440 it's not going to make you the next Bear Grills. 0:08:04.480 --> 0:08:06.000 You know, you're not gonna be able to survive in 0:08:06.000 --> 0:08:09.080 the wilderness for months on end, like sleeping inside dead animals. 0:08:09.080 --> 0:08:10.320 I think I saw him do that once. Dude, he 0:08:10.360 --> 0:08:12.960 does a weird stuff that's a Star Wars reference. Yeah, 0:08:12.960 --> 0:08:15.520 I guess that's true too. But he's an impressive man. 0:08:15.640 --> 0:08:17.840 But we do believe that having you know, one of 0:08:17.840 --> 0:08:21.280 these bare bones budgets in your back pocket is necessary, 0:08:21.400 --> 0:08:24.040 is helpful, and it can be powerful in the case 0:08:24.280 --> 0:08:25.400 of an emergency popping up. 0:08:25.480 --> 0:08:28.400 Yeah, essentially, we think that having a bare bones budget 0:08:28.920 --> 0:08:32.400 is about prioritizing your needs, not your once right, so 0:08:32.640 --> 0:08:36.720 it reflects only those most essential monthly expenses, and having 0:08:36.800 --> 0:08:39.199 one comes in handy in a lot of ways. So, 0:08:39.280 --> 0:08:41.760 for instance, you may feel trapped working in a high 0:08:41.800 --> 0:08:44.880 paying job that you hate, but because the pay or 0:08:44.880 --> 0:08:47.199 the benefits are so good and you need that income, 0:08:47.320 --> 0:08:50.000 you're stuck, or at least you feel like you're stuck. 0:08:50.600 --> 0:08:52.760 Maybe you don't get treated as well as you should, 0:08:52.880 --> 0:08:55.359 or the hours or the demands of that job are overwhelming. 0:08:55.600 --> 0:08:57.920 You're not going to be left with many options if 0:08:57.960 --> 0:09:00.640 you don't think you can seriously downsize your b and 0:09:00.720 --> 0:09:03.920 so creating that barbones budget can help you to see 0:09:04.000 --> 0:09:06.800 the path to exit that job, even if you don't 0:09:06.840 --> 0:09:09.320 have a new one lined up yet. Or maybe it 0:09:09.320 --> 0:09:11.080 can even help you to realize that you can take 0:09:11.760 --> 0:09:14.200 a job or a position that pays less because your 0:09:14.240 --> 0:09:17.000 finances are still going to be okay. It's essentially about 0:09:17.000 --> 0:09:20.360 giving you options, flexibility, and the freedom to act in 0:09:20.400 --> 0:09:21.440 ways that you want to act. 0:09:21.559 --> 0:09:23.920 That's right, Yeah, And so I guess, like, who is 0:09:23.960 --> 0:09:26.839 a bare bones budget for? We would say that it's 0:09:26.880 --> 0:09:30.839 for everyone, that everyone should really attempt this experiment. Right, 0:09:31.559 --> 0:09:34.040 even if you love your job, there's no guarantee that 0:09:34.120 --> 0:09:37.040 your employer keeps you around as long as you'd like 0:09:37.080 --> 0:09:38.840 to stick around. So some people might be like, but 0:09:38.880 --> 0:09:40.720 I really like what I'm doing. I probably don't need 0:09:40.720 --> 0:09:43.120 a bearbones budget because I plan on working, you know, 0:09:43.160 --> 0:09:45.320 here for a long time. But you know what if 0:09:45.320 --> 0:09:48.080 your employer goes to a rough patch, or the economy 0:09:48.120 --> 0:09:49.720 in the general goes to a rough patch, and you 0:09:49.720 --> 0:09:52.160 don't have that job anymore, Right, So we think it's 0:09:52.320 --> 0:09:54.959 important for everyone. You know, I personally have seen the 0:09:55.000 --> 0:09:59.720 difficulties that unexpected employment can create firsthand, and it's not pretty. 0:10:00.000 --> 0:10:02.480 I would say two, Having that bear bones budget on 0:10:02.520 --> 0:10:05.920 hand before an awful event like that happens to you 0:10:06.280 --> 0:10:08.480 can help you whether the storm much better than you'd 0:10:08.480 --> 0:10:11.440 otherwise be able to. It's so much harder to try 0:10:11.480 --> 0:10:14.600 and slash expenses when you're in the midst of the 0:10:14.640 --> 0:10:17.959 emotional and financial turmoil that you're going through in the 0:10:18.000 --> 0:10:20.640 aftermath of something like a furlough, a job loss, or 0:10:20.679 --> 0:10:23.240 a reduction in hours. Trying to get your budget in 0:10:23.320 --> 0:10:25.400 order and pair it down in the middle of the 0:10:25.440 --> 0:10:29.400 emergency is overwhelming. So that's why we would suggest getting 0:10:29.400 --> 0:10:32.080 this bear bones budget done now, and it can be 0:10:32.160 --> 0:10:34.840 a helpful resource for you in the future if you 0:10:34.880 --> 0:10:35.160 need it. 0:10:35.400 --> 0:10:37.560 Yeah, dude, rarely do we think that the worst things 0:10:37.600 --> 0:10:38.959 are going to happen to us. But it's good to 0:10:39.240 --> 0:10:41.520 start thinking about these things ahead of time. It actually 0:10:41.559 --> 0:10:44.360 makes me think of have you ever changed a tire 0:10:44.480 --> 0:10:45.080 like on your car? 0:10:45.160 --> 0:10:46.280 I have, It's been a while. 0:10:46.559 --> 0:10:48.679 Most people haven't done it, but if they were to 0:10:48.760 --> 0:10:50.160 get a flat tire, they've never done it, and so 0:10:50.240 --> 0:10:52.800 it's like they're stuck in the position of being like, Okay, wait, 0:10:52.880 --> 0:10:55.400 do I have a spare tire like on this vehicle? 0:10:55.640 --> 0:10:57.880 Where is it? How do I go about it? You know? 0:10:57.960 --> 0:11:01.200 Should I put the parking brake on? Yes, it's going 0:11:01.240 --> 0:11:02.440 to be really important that you do that. 0:11:02.840 --> 0:11:03.959 I even have a jack in my car. 0:11:04.080 --> 0:11:06.200 Yeah, And so there's all these things, and I mean, honestly, 0:11:06.240 --> 0:11:08.560 it sounds a little bit like prepping, but it's just 0:11:08.600 --> 0:11:10.920 thinking through the worst case scenario a little bit and 0:11:10.920 --> 0:11:13.080 making sure that you're familiar with what you're gonna need 0:11:13.120 --> 0:11:15.800 to do if that situation ever arises. I feel like 0:11:15.800 --> 0:11:17.520 that's a part of the reason why we're recommending for 0:11:17.559 --> 0:11:20.079 folks to start thinking about this ahead of time. The 0:11:20.480 --> 0:11:22.800 bare bones budget. It's almost like a fire escape plan 0:11:23.000 --> 0:11:24.640 that you had to come up with in elementary school, 0:11:24.640 --> 0:11:28.200 you know. I remember my folks, like you remember back 0:11:28.200 --> 0:11:30.160 in the nineties, there's those ladders, like if you had 0:11:30.240 --> 0:11:31.880 a bedroom in the second floor, you're supposed to get 0:11:31.880 --> 0:11:33.599 one of those ladders that you can like you know, 0:11:33.720 --> 0:11:36.040 roll out the window. Yes, so you could escape. 0:11:36.120 --> 0:11:37.920 I tried to, you know, tell my parents that we 0:11:37.960 --> 0:11:40.000 needed one of these things, because like I think every 0:11:40.000 --> 0:11:42.800 elementary school kid did, and I feel like they didn't 0:11:42.800 --> 0:11:44.200 love because we never got that. 0:11:44.679 --> 0:11:47.200 Okay, so my bedroom was there was actually this column 0:11:47.200 --> 0:11:49.200 outside my bedroom window, and we never got one of 0:11:49.200 --> 0:11:51.360 those things. But I remember thinking, okay, well you can 0:11:51.400 --> 0:11:53.760 slide down that. Yes, I remember thinking, well, at least 0:11:53.840 --> 0:11:55.680 I bet I could jump out my window, grab onto 0:11:55.720 --> 0:11:58.040 that and just kind of slide down like fireman polls FID. 0:11:58.920 --> 0:12:00.920 But I mean, in the same thing, just even as adults, 0:12:00.960 --> 0:12:03.200 if you work in an office building or an office park, 0:12:03.320 --> 0:12:05.040 you know, like once a year you have a fire 0:12:05.120 --> 0:12:06.920 drill and everybody goes out to the parking deck or 0:12:06.960 --> 0:12:09.360 the parking lot. Hopefully they have the ice cream truck 0:12:09.360 --> 0:12:11.160 there where everyone gets the free ice cream, that kind 0:12:11.160 --> 0:12:13.160 of thing, And it always kind of seems silly for 0:12:13.160 --> 0:12:15.800 adults to be doing that, but it was an important 0:12:15.800 --> 0:12:17.480 thing to do to make sure that we knew where 0:12:17.520 --> 0:12:19.240 to go, knew how to get out of the building 0:12:19.240 --> 0:12:21.520 in case there was a fire. It's not likely to happen, 0:12:21.920 --> 0:12:24.160 but planning for the worst is still a good idea. 0:12:24.440 --> 0:12:26.640 And in regards to your budget, knowing that you will 0:12:26.800 --> 0:12:28.959 you know that you have this bare bones budget made, 0:12:29.320 --> 0:12:31.319 and then just being able to just easily flip the 0:12:31.320 --> 0:12:34.079 switch in an instant to spending a good bit less 0:12:34.080 --> 0:12:37.280 than you currently are. This just offers some peace of mind, 0:12:37.320 --> 0:12:39.320 you know, And it's truly helpful if you find yourself 0:12:39.320 --> 0:12:42.120 in a precarious financial spot just down the road. Yeah. 0:12:42.280 --> 0:12:44.920 So I'm man, I'm an optimist. You know this about me. 0:12:45.040 --> 0:12:47.439 That's true, maybe to a fault, some might say, and 0:12:48.240 --> 0:12:49.439 I might even say that I don't know. 0:12:49.480 --> 0:12:52.920 And I'm a realist. I'm more the prepper type. Yeah, 0:12:53.000 --> 0:12:54.760 I know exactly where the jack is on my van, 0:12:55.559 --> 0:12:56.719 you know where yours is? Yes? 0:12:56.760 --> 0:13:00.760 See, yeah, okay, I do so. Yeah, it's I gotta say, 0:13:00.760 --> 0:13:02.600 like I think it's good to be an optimist. I 0:13:02.600 --> 0:13:04.319 think hoping for the best is a really good thing. 0:13:04.760 --> 0:13:07.200 But we would say, and I would say, yeah, even 0:13:07.200 --> 0:13:10.280 as an optimist, budgeting like a pessimist and planning for 0:13:10.320 --> 0:13:12.559 the worst is just a smart thing to do, right. 0:13:13.280 --> 0:13:16.080 And that doesn't mean that you can't have a normal, 0:13:16.160 --> 0:13:19.160 healthy budget where you use up all of your money 0:13:19.200 --> 0:13:22.240 every month, with hopefully a healthy amount headed towards savings 0:13:22.280 --> 0:13:24.720 and investing goals. But it does mean that you should 0:13:24.760 --> 0:13:27.120 at least have this bare bones budget in case you 0:13:27.200 --> 0:13:30.440 need it. Right. It's the budget equivalent, I would say, 0:13:30.679 --> 0:13:33.600 of an emergency fund. You're hoping to never have to 0:13:33.720 --> 0:13:36.800 use it, but having it is clutch, right if the 0:13:36.840 --> 0:13:39.559 worst were to happen, if job loss does occur. I 0:13:39.600 --> 0:13:42.800 think both of those things actually work really well in tandem, 0:13:43.040 --> 0:13:45.040 right if something hard does come along. 0:13:45.400 --> 0:13:47.520 Yeah, Plus, having that bear bones budget can also be 0:13:47.559 --> 0:13:50.560 a confidence builder, right, if you've got a solid emergency 0:13:50.559 --> 0:13:54.280 fund and a bear bones budget that's far less than 0:13:54.320 --> 0:13:57.680 your normal monthly budget, it can really boost the assurance, 0:13:57.840 --> 0:13:59.680 right that your finances are going to be okay no 0:13:59.679 --> 0:14:02.439 matter what. But it can be an eye opening experience 0:14:02.480 --> 0:14:05.480 to realize that you actually can live on far less 0:14:05.520 --> 0:14:08.160 than you might have previously thought, because you know, like 0:14:08.240 --> 0:14:10.319 fear of the unknown that is such a real thing, 0:14:10.640 --> 0:14:12.760 especially when it comes to your money. But the bear 0:14:12.800 --> 0:14:15.440 Bones Budget can just bring some concrete reality to quell 0:14:15.480 --> 0:14:17.240 some of those fears. You don't have to stay awake 0:14:17.280 --> 0:14:19.000 at night wondering like, well, what happens if I lose 0:14:19.000 --> 0:14:20.760 my job? Like what if I'm ridding my bike and 0:14:20.800 --> 0:14:22.800 I fall off and I break my arm and I 0:14:22.800 --> 0:14:24.720 can't go to work, or you know, I guess I 0:14:24.720 --> 0:14:27.320 could still talk you and I can continue to podcast. 0:14:27.560 --> 0:14:30.160 Like then you start thinking, oh, do I need accident 0:14:30.320 --> 0:14:32.560 you know, income replacement insurance? You know, do I need affleck? 0:14:32.920 --> 0:14:34.560 Like no, Like, we wouldn't point you in that direction, 0:14:34.640 --> 0:14:37.160 but we do think that this is a really valuable 0:14:37.160 --> 0:14:39.760 step to making sure that you've got that peace of mind. 0:14:39.960 --> 0:14:42.160 We want you to know that you would have options. 0:14:41.760 --> 0:14:43.760 Yeah, that you're going to be okay in the event 0:14:43.800 --> 0:14:45.800 of an emergency, and the E Fund and the bar 0:14:45.840 --> 0:14:49.000 Bones Budget simultaneously is really going to provide I think 0:14:49.040 --> 0:14:49.840 a lot of that peace of mind. 0:14:49.840 --> 0:14:51.120 It's like a nice one to two punch. 0:14:51.240 --> 0:14:53.720 Yeah, for sure, I think too Matt. This exercise of 0:14:53.760 --> 0:14:55.440 creating a bar bones budget. We're going to talk about 0:14:55.440 --> 0:14:57.600 how to get there in just a second. It might 0:14:57.880 --> 0:15:01.680 present some helpful questions about the expenses that are in 0:15:01.720 --> 0:15:04.040 your current budget too. I think this is a healthy 0:15:04.080 --> 0:15:07.720 exercise to realize that the expenses in your life they're 0:15:07.720 --> 0:15:09.560 not fixed. I mean, some of them are, we're gonna 0:15:09.560 --> 0:15:12.080 talk about that, but many of them are actually just 0:15:12.240 --> 0:15:15.080 spending choices that we've made, and we all make them. 0:15:15.680 --> 0:15:16.680 Yeah, this lifestyle. 0:15:16.840 --> 0:15:19.840 Yeah, and there are some things obviously, like we think 0:15:19.880 --> 0:15:24.320 it's okay, and it's actually good to prioritize certain expenses 0:15:24.360 --> 0:15:27.200 in your life that others might think are crazy, purely 0:15:27.280 --> 0:15:30.240 because you love them and you enjoy them. Use your 0:15:30.280 --> 0:15:33.960 fancy socks, like my fancy socks. Yeah, I don't know, 0:15:34.000 --> 0:15:34.880 I like my socks. 0:15:34.920 --> 0:15:36.920 I mean that's a lifestyle thing, you think. You know, 0:15:36.960 --> 0:15:39.160 I'm an adult now, I'm not gonna wear socks that 0:15:39.280 --> 0:15:41.600 have holes in them, Whereas I am cheap in that way, 0:15:41.640 --> 0:15:43.640 like I don't care man like, so in my mind, 0:15:43.680 --> 0:15:45.400 I don't call it cheap. It's frugal. Like I am 0:15:45.400 --> 0:15:47.960 willing to have socks with holes in them because I 0:15:47.960 --> 0:15:49.880 don't care. But then of course I spend money on 0:15:49.920 --> 0:15:51.800 other things that you would you know, you might think 0:15:51.880 --> 0:15:54.600 is our foolish, Like I got this new bike bag 0:15:54.640 --> 0:15:56.600 that I can wear around town or you know, while 0:15:56.600 --> 0:15:58.640 I'm riding my bike. It's fancy like my old one. 0:15:58.920 --> 0:16:01.840 It totally still carries it contained things. It's just that 0:16:01.840 --> 0:16:03.480 I kind of wanted one that was updated, that looked 0:16:03.520 --> 0:16:04.200 a little more sleek. 0:16:04.320 --> 0:16:06.600 Yeah, but I think that's what my priorities like. I 0:16:06.600 --> 0:16:08.960 know we have different priorities, and that's okay, But I 0:16:09.040 --> 0:16:11.080 think as we go through this exercise, it's good to 0:16:11.120 --> 0:16:12.520 point some of those things out, and it's good to 0:16:12.640 --> 0:16:15.520 realize that some of the things that are currently in 0:16:15.600 --> 0:16:18.360 your budget they are there because of choice and not 0:16:18.440 --> 0:16:21.840 because of necessity. And creating a bare bones budget figuring 0:16:21.880 --> 0:16:24.680 out the minimum amount that you could live on, can 0:16:24.840 --> 0:16:27.720 be a helpful mindset shift in how you think about 0:16:27.880 --> 0:16:30.880 the money that's going out of your account every single month. 0:16:31.040 --> 0:16:33.400 So we're gonna talk more about what's included in a 0:16:33.400 --> 0:16:35.920 bare bones budget and how to create one, and we'll 0:16:35.920 --> 0:16:37.200 get to that right after this. 0:16:46.480 --> 0:16:48.880 All Right, dude, we are back, and we just covered 0:16:48.880 --> 0:16:50.960 all the different reasons why it is that we should 0:16:50.960 --> 0:16:54.080 all have a bare bones budgets in our lives. And 0:16:54.120 --> 0:16:56.360 so now let's talk about what is actually in a 0:16:56.400 --> 0:16:57.840 bare bones budget. And at the top of the list 0:16:57.840 --> 0:17:02.720 we're gonna put beer because beer is the essential to life. No, 0:17:02.840 --> 0:17:05.640 actually it's not right. I mean, water is virtually free, 0:17:05.680 --> 0:17:07.639