Hello, I'm your host, Mr. Chuck, I retired accountant turned truck driver, I reduce my debt in a relatively short period of time, debt reduction to achieve financial freedom takes commitment, confidence determination, option to doing a budget during a budget too much time and want a different approach to help reduce spending. How about find out the amount of money available to spend on a weekly basis to spreadsheet will give you that information. And then later in the episode, I'm going to talk on a newer topic concerning that traditional budgeting process, allocation of money received to an expense to ensure the timely payment is made, how to incorporate this into additional budgeting spreadsheet, I have a spreadsheet that I've been using off and on for well last four months or so. And it's called the happy draft.org. If you go to my show notes, I have a link in my show all my show notes on every episode to this spreadsheet. And I find it very interesting and easy to use. It's free to download this free training on that website, they got three videos that explains how to use this. I'm gonna go over basically it's a bunch of pages. And the first page you come to you put in what your start date and the number of weeks you want to do it, then you need to do at least a year, but he could project his out for two years, the current and your currency then the next page is income. He started out with putting in your current bank balance how much is currently in your checking account. This works with one checking account. So it'd be your main checking account that you pay all your bills through, and all your money is going into. And then below that you have income sources where you would list out your income sources, how often you get paid your net, take home pay, and your next pay date. So if your two of you husband and spouse, husband and wife, you put each of your income in and in their net pay, and your next payday for both of us. So that's two, if you have a part time job, you would put that in. And that's all you got to do. And if you don't know what your take home pay is as an average, say your pay is different from week to week, go back a month, add them up divided by four, and put your average take home pay in there. And then that is your next pay period. The next week whenever the next pay would be, they recommend starting this on a Monday, I started at the first of a month and go month to month, it doesn't much really matter. But you still have to track all your spending through your checking account. And you need to know all the expenses that you're gonna be paying through your checking account for the next year. And it starts out on the next page is fixed expense, things that you pay on a regular basis. And I have a column here for weekly, he put a description in$1 amount, then I have a monthly that's where a majority of your expenses are gonna go. Your weekly expenses would be like day care, child care, pet care, things like that. And then your monthly expenses would be MK you don't need to include your gasoline and or your groceries. Because that's money you're gonna be used from this weekly amount that you're figuring out. And then you put in how much you want to save per month and then you put in all your monthly expenses on our monthly all utilities all your loan payment, all your credit card payments, which should be if you're on a debt reduction plan, the minimum amount of each credit card that you owe on the monthly basis. And you can also put in there how much you want to transfer into savings and on there every month. Next to that you put in a description and an amount and the day of the month of that comes out pretty precise on that day of the month because it changes from week to week, if you go back in there and look at the detail, if the day and the month is, say you're starting Monday to Monday, and the day of the month tends to be a Sunday, well, it might not be in the previous week, or might be in the next week before it clears your checking account, kind of look at that you're at those times. So you might want to fudge that number that due date a little bit. But it really doesn't matter in the long term scheme of things. Then you have a column for yearly, it's just like the monthly one. And that's where I put my car insurance because I pay it. Every quarter, I put my real estate taxes twice a year, I paid out, I put in all my income taxes, estimated payments are gonna make my quarterly payments, my trash pickup my water, and sewer, and all those types of things. And I also include like my motorcycle insurance, that's once a year, my home insurance is once a year. So if you have an item that you pay quarterly, you put it in there four times, if you have an item that you pay semiannual, you put it in there two times, and you put the due date, when's the due date of that item for each individual line item, then we have at the end a one time where you could like, I had one time payments me see what I had, like passport renewal, one time payment, I had a credit card payment, a one time payment, I had health care, a one time payment are some medical expenses, I should say, that was a one time payment that I paid after I started this particular spreadsheet or my start date of you know, money that came out of that checking account. So if it's not something you pay on a regular basis, and is not included anywhere else, you included on this one time payment, then the next page is called Happy money. It tells you it figures it all out for you. It gives you total income, it figures out your total expanse, it figures out your spendable money, and then you know over 52 weeks a year because I'm doing it for a year, and it gives you you maximum allowance. Mine was $263.44. And then down below, you put in your actual weekly allowance, this is what I put in that I want to limit my spending to, and I put in $175 which is gonna pay for groceries, gasoline, and spending money for me. And which means that if I follow this and don't spend more than pay all my regular bills like I normally do, and don't spend more than$175 a week, I'm gonna be saving at $3.10 per week for the whole entire year. And even tells me what my lowest bank pounds gonna be $325 And that basically was at the beginning. The next page is a flowchart is a visual of what's going on. Then you have a page that's called a Jess cash flow. And you have a cotton you got a bunch of columns and that what it is, is bringing those expense when you Pam into this spreadsheet, on that particular day it's due. So a monthly expense on the second of the month would be there every month, that same dollar amount is going to be throughout the entire year. If you come up with something adjustment, and what I was doing, I quit doing it because I thought it was waste of time. It really wasn't a waste of time. But what I was trying to do is see if I could keep this and my the bank balance to actually match my bank balance and I was able to do that for about three months. Some of the adjustments would be the $175 allowance that I was using to spend automatically comes out of my bank at the beginning of the week. If I didn't spend $175 I had to figure out how much I didn't spend and add that back in to adjust my bank balance which the first week was $7.36 then it was$62 and then I went over $32 Then it was $18 So I was pretty close 64 It was above and below vary from you know go a couple of weeks were I was under I go a week I was way over but it was made up because I was way under before So I really was still in line with day I'm on track with my spending, it is a different approach to doing a budget, I find it interesting, it's easy to do, if you're tracking your spending in your income, if you have a app, where you enter in all your transactions for your checking account. Now for this spreadsheet, you would do a report only, by that one checking account, you don't take in consideration your credit card, the credit card should be taken in consideration when you make a payment. So if you have to figure out, you make a credit card payment, once a month, what's the average amount you pay is a $300 a month, $400 a month, and then you put that in there, and then that helps you with your spending. If you're on a debt reduction, plan, II shouldn't be using your credit cards at all. And if you're not using them, you're not using credit, and you're making a minimum payment, then you know, your minimum payment, what's the minimum payment of all your credit cards, you know, this is gonna work for you. Because it's keeping track of what you had in your checking account, and what's going in, and what's coming out. And it's given you$1 amount of what you can spend where your checking account will never go negative. I think it could be helpful for a lot of you out there that you still need to know what your fixed expenses are. So if you do tracking for at least 30 days, through an app, that you'd be able to do a report by category for the month only money from your checking account, put it in a spreadsheet, and you shouldn't have a fake idea of what you have available. Remember I said$175 a week, groceries gasoline, I don't go to grocery store and I do the wife pays for it. So really is not coming out of mine. And gasoline I pay for gas on both cars. But the wife's car gets really good gas mileage since you don't drive too far. So it's not a whole lot of money. So my $175 a week goes a long way. And most weeks, I've probably nine come close to it. So that's how I'm able to keep everything under control. Next up, I'm going to talk about what I've been in the last couple episode, traditional budget process, the allocation of money to an expense to ensure the timely payment is made of that particular expense. And what am I talking about? If you've been tracking, tracking gives you the history of what where your money came from and where your money went, it's too late to change it because it's already gone. A budget is your control center, where you with set how much money you need to have, or that's gonna cost you to pay for things. And we start out paying for our needs first, and then our wants second. And once again, some of your goals and things that you want to buy or have some time in the future. Well, that's good. So we set a budget, and then we pay for those items. We come back and we put in the actual how's that helping you with your future? Well, it really is a little bit but it's not. That's why I advocate. I was watching a YouTube video from a app that's out there is called you need a budget. Why an A B? They have a lot of YouTube videos on how to use the app. And that's what I was watching. And I thought that was a really good idea. And then I started thinking, how can we do this, apply it to a spreadsheet for the people who can't afford the $15 a month for that app, or the $100 a year for that particular app. Now getting that app would make this process a whole lot easier. I kinda liked the program. I'm not gonna pay for it. They're not I'm not promoting it. I'm not getting paid to promote it. I just found it. I learned about it. I like it. So good process. So I need to tell the people listening to this podcast about it. But I started thinking, how can I do this and the spreadsheet on my own And that's what I've come up with, I kind of gave you some ideas in the past, he just add another column allocated money, is what you're gonna call it. You have your column, your budget, you have your actual, I know rethink the order. Also, he got your description, he got your budget amount, that's the budget amount is your past history of what you spend. And those categories, your actual amount is the actual amount of money you spent in the current month in that particular category. The allocated money is money that you set aside from your checking account to pay for those categories, then you have percentages, and any percentages only apply to your actual column. If you want to know how much of my income, my gross income is going to my home payment, my mortgage, or how much is going to housing versus how much is going to transportation, how much is going to medical, that percentage, it only applies you only one apply it to the actual amount. And that gives you an idea if you're on track or not. But the allocated amount is, every time you get a paycheck, you get a deposit of money and your checking account, he right away, you want to allocate that money, or as they call it, put that money to work for you. So we're what bills are you going to pay. So in your allocation column, you have your income at the top. And then this is when it hits your bank account, you put in how much it was. So if you get paid weekly, which is four times a month, you should have four rows there. So you can put in your weekly pay. If your spouse gets paid weekly, he needs eight rows there so you can put in your spouse's weekly pay. And then you need one more line there for monies carried forward allocated money he carried forward from the previous month. And you put that number in there, if you have any, then you go down the same categories as for your budget, at the bottom, you have a total. And then at the very bottom, we're talking about the allocation column, you take your total amount of money, last year total amount expenses, and that should come to zero. So if you receive that guy $1,000 deposit in your checking account, and you allocate $1,000, then that balance should be zero. When that balance is a positive number, that means you put money in your checking account, and you have have not allocated it, or you may have allocated part of it. If that's a negative number, that means you allocated a more money to a category expense, then you received into your checking account. And it should never be negative. If anything, if it's a positive, that means you have money that you haven't assigned a job to at that particular time. When you then go and pay your bills. And you pay some of these categories that you've allocated money to, you need to subtract or reduce the allocated amount by the amount of the actual payment. So let's say you have a mortgage of $1,000 is your budget. You have allocated$1,000 You got your paycheck, he allocated that $1,000 And then on the fifth of the month, you paid your mortgage $1,000 You put that in the actual so your budget and your actual are equal comes to zero there's no difference. Now you take that$1,000 That was in your mortgage category and subtract 1000 from it. I'm saying subtract 1000 from it, because you might have allocated 2000 You might be two months ahead on set aside a money to pay your mortgage. But let's say you didn't say you only had $1,000 allocate, you make that zero. Now you're out of balance because you got has gone to tell you that you you took out an expense on there. Now you need to remove the income of $1,000 the money that you received is now gone. on. So you got to have another column up there, money paid out and subtract $1,000 from the income, I guess that would work. And then your balance at the bottom of a free allocation column should be zero, and everything set in stone, whatever amount of money is left in your income, a portion, at the end of the month, whatever the balance would be up, there is what you take forward to the next month, because that's money that's been allocated, but not yet spent. I hope all this makes sense. And I hope you can use it to your advantage. If you find this podcast useful, and you'd like to make a contribution, I have a link contribution link in my show notes, you can go to my show notes of all my episodes and click on it. Or you can go to reduce debt, increase wealth.com. Click on support and do it. They're not a live thank all of you have made contributions in the past. I'll be back in one moment with my final thoughts. If you're interested in learning about an online software that helped myself get out of debt, it does tracking, budgeting, and keeps track of all your assets and all your debt. And even tells you how much and when to transfer money into your savings account. And how much and when to transfer money to your debt and which debts to pay off and order. First. It's not cheap. It's a one time payment. But it will definitely be an investment, something and yourself and an investment in your personal financial life. If you're interested, send me an email at reduce debt increase wealth@gmail.com. And I'll send you the information about this online software that worked great for me. Remember, if you don't want to do a budget or a budget don't work for you, and you haven't trouble or think it takes way too much time too big of a commandment. Look at happy giraffe.or/donation They have a spreadsheet, you can download for free, they have training on that website to different page probably. And you go through that and learn how to use it, you still need to keep tracking your income and your expenses, and then do a report to help you fill out this particular spreadsheet. And it's only on your fixed expense. Things that you pay on a regular on a regular basis, whether it's weekly, monthly, yearly, quarterly semiannual, or one time. It'll tell you how much money you have to spend on a weekly basis based on what the information you put into it. That works really good. And that if nothing else, if you're having trouble with overspending, and your checking account goes negative, or you got to use credit cards too often, then this spreadsheet can help you get your spending under control, it will give you $1 amount of how much you have to spend every week for anything that you buy. That's not on that spreadsheet, that's not an expense, fixed expense. As far as the allocation of money, that is optional and up to you. I believe that if you do it right, he should be able to keep your check in about checking account and a positive balance if you never overspend a category. And if you assign money, say allocate money to entertainment of $100 a month and you only spend $75 That doesn't mean you have to spend it. You can always move that money to a different category. You can set up categories for your savings goals. You can set up categories for your hobbies and anything you want. And you can set aside money and you can also use it as a tool. Like if you're thinking about buying something big and expensive, and you have to get a loan and you know the loans gonna be $500 a month for five years say a car payment. Set aside before you do it. Set aside money car payment $500 can fund it, allocate money to it for at least three months? How's that affect your budget? And if it does, do you really need that car? Maybe you can buy a lesser car or lower money and say you want to do $300? How does that affect your budget? And the good part if you do that, and you don't spend the money, when you decide to buy a car, you're gonna have a down payment, you're gonna have three months or 500 or $1,500, maybe more if you wait longer, and you know, you'd be able to afford it. And if you do it for a long enough period of time, before you go out and make that commitment, you will you would run into about every expense that will pop up over time, and you're not going to be surprised and you have a good idea. That'd be something you can afford. I hope this helps you