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. tuning up budget, once a budget or Control Center has been established, staying on the budget is important. As time passes, some of the fixed expenses may change. So the control center needs to be updated. I do this every month, but it's not necessary, every quarter is enough for an update. Once you know that a bill has changed, gone up or down. For the end, it's going to be that same amount for the foreseeable future, whether it's one year, six months or whatever, you need to update your budget amount. And when I'm talking about updating the budget dollar amount I'm talking about in the first column that says budget, when you do your monthly budget, if you're doing a spreadsheet, you got your description, you have your budgeted amount, you had your actual, then you have your difference, and then maybe you have some percentages. So that second column is your budgeted amount. So for example, usually in the fall, my gas bill electric bill, which I have set up on a budget with the utility company, so I paid the same amount every month. So usually September, October, my gas bill will be updated. And what they do is they look back to see how much I owe him. And if I came up short, then they gonna increase what I need to pay, or I make a payment in that particular month to get everything to zero out. And then they estimate what these gonna be for the next 12 months based on my usage, and then they reset the dollar amount. Once that happens, I need to update my dollar amount in my budget. For instance, this past fall, my gas bill was usually around $80 a month, and it went up to $122 a month. So I had to go in and update my gas, budget dollar amount. And that one thing you do is go in that second column that says budget amount, find the category that it's in, it's under Utilities under housing, I found the gas and natural gas was I have it probably in there by the name of the utility company. And I just updated, I just changed it from what it was to what it is. And you do that with all your fixes, Spence through our time as we go through life. Because even if you have everything fine tune, and you can budget in a giving and doing a budget for a long time, six months or longer, and you come within a few dollars of every category, you don't need to really adjust it because you're close enough that when you have in utility company we're at jumps up or goes down by a significant amount, you need to adjust it. And I always adjusted because it should always come to zero. I pay the same amount at month in and month out, I make all my payments on time. So that is what tuning a budget is all about. You start doing this right away. Now if you listen to my past podcast, you probably have heard me say the number one thing you do is tracking, which is the track all your income and all your spending through some type of an app. And then you can create a report by category, then that's gonna help you with your budget. Take that report and you create your budget. So now you can update it fairly easy. II got to keep tracking, it's a nonstop you got to do it the rest of your life as long as you're able to do it as part of keeping your budget under control. Now, if you were new, I say go back 30 days, enter in all your information. And that's your starting point for creating your budget. And that's the starting point of what's going on in your life the last 30 days. A lot of those expenses are gonna be the same your mortgage payment, your car payments, they're gonna be the same month in the month out he never changed. Your credit card payments go up and down depending on how much you charge. Your utilities can go up and down depending on how you have it. Setup might go up and down once a year, but I have it set up that way with the utility companies. Now some people don't like doing that, because they say, Well, I don't want to be paying $80 a month in the summertime for my natural gas, when the actual usage is like $7 a month, or $10 a month. Nice, it's fine, it all evens out. And I just don't want to get nailed, with a $300 gas bill in the middle of the winter, if it's extremely cold, that's why I do it, I try to even out my expenses throughout the year, that way I know and I'm consistent. So that's what it's all about. And if you just did that the first 30 days in your in your second 30 days, or your first month of actually tracking a budget, you're probably noticing a lot of things are not adding up, you may have your actual amount could be way under your actual amount could be way over. Because you don't have a deep enough history of what's going on in your finances. Like your grocery bills could vary from month to month, like February is a short month. So from February grocery bills could be lower because he got maybe way of falls, you missed one or two trips to the grocery store that was included either before the month or after the month. It's not like you're not spending any less this is how it's fallen. Remember, your budget is just a snapshot of what's going on in your financial life. Your tracking is the continuous tracking of what's going on. And your your personal life, your incomes are coming in every pay day you got more income, every time you leave the house, you go to the store every time you pay a bill. It's continuous, it's always changing. So we want to take a budget or your control center, and take a snapshot of that on a monthly basis. Now in the past, what I do is I up date, my budget, my control center, every pay day. So I do a report, I update on my tracking, keep that up every day, or at least weekly. So it's always current. So I always know how much money I have in my checking account how much I owe on all my credit cards, or whatever the deal is, I know what's going on in my personal life, my financial life. And then once every payday if you get paid weekly, it'd be once a week, I create a report by category from the beginning of the month to that particular day. Then the next week, I do the same thing from the beginning of month through this second or third pay day. So as we go, those numbers are gradually getting bigger week by week. And then they go in my actual in my budget, my control center. And I update that the numbers now some of the numbers don't get updated every week. So I'm going to get update at once a month, such as your mortgage payments, such as your car payments. But then you have other categories that get updated every week, groceries, gasoline, they care, whatever the case would be. And it's an ongoing thing. If you've been doing this for a while and you feel like you're not making any progress. Maybe you know you're making progress on getting your credit card debt paid down. But you feel like you're not doing any better than anybody else. You think you're still struggling. But let's ask yourself one question. Are you paying all your bills, timely? Question to that, yes. You're putting money in the savings no matter how little 1% or two or 3%? Doesn't much matter. But are you putting a little bit of money aside? He asked, Do you have an emergency fund where you can cover at least a $400 expense without using a credit card? Yes, you're better than 90% of the people out there. You're doing much better than what you think you are. You need to keep growing your emergency fund. So you have three to six months worth of expenses $1 amount to cover three to six months worth of your expenses, and then anything excess of that you need to start investing more, increase the amount of money you're investing for whatever reason whether it's for retirement, whether it's for your children's education, whatever the reasons are, you can start increase in that and if you think you're not doing any better name, buddy else, you got to ask yourself, why are you thinking that the people you're comparing yourself to to They have a different type of education, are they in a different field? Do they maybe they have a masters or PhD? Who are you comparing yourself to the gotta compare yourself to the same person that you are. So if you just have a bachelor's degree from college, and you're in a certain field, you need to compare yourself to what those other people were doing. If nothing else, don't compare yourself to somebody that's way ahead of you, or somebody that might have family money to start with, and they had a head start on whatever they're doing in their life, everybody's life is different. So don't compare yourself to not even to your neighbors, your neighbors may appear like they're doing better than your, maybe they have a more expensive car, maybe they have lawn service that you don't have, because you can't afford to pay for it. Maybe they have a swimming pool in the backyard and have a pool service. But you got to think if the economy goes bad, keep an eye on those neighbors. Why are they doing if all of a sudden they're moving out? Maybe they're better, worse off than what you are, they just make the illusion that they're doing better than you. So don't compare yourself to other people. If you just ask the questions, are you making all your bills timely? How do you have put in a little bit of extra money in your savings, whether it's investing or your savings? Do you have significant amount of money in your emergency fund, at least $400 or more to cover anything that might come up as an emergency, and you're making progress on paying off your debt, you're way ahead of most people, you're probably in the top 90%, you're 90%, you're way ahead. He may not think you are but you really are. And he can look that up as a fact if you want to. But I can assure you, you're doing better than 90% of all other two people. Top 10% I guess is what I should have said, for those of you that are just listening to this might be your first episode from reduce debt, increase wealth, I'm going to go over the basics of how to make a personal budget that you can live with, I recommend you do tracking first. And then create your budget second, because that's the easiest way to do it. But I have an article in my show notes I'm gonna refer to and budgeting is hard. Anybody who has a family budget knows how difficult it is to keep up with month after month. But the other truth about budgets, they work, personal budgets are more than a way to track spending. They're also a way to help plan for the future and set goals like saving for retirement or a big purchase. If you need a budget. Here's a simple guide on how to create one there. Number five is track your budget. I think they're referring to keeping track of your budget month in and month out. That for me tracking is tracking your income and your expenses. And that's the first thing you got to start doing. Whether you use an app, whatever one doesn't matter, I use count about because it's inexpensive, and it works great. It's an online, I don't download it, I just log into it. I put in my information. I do not link my bank accounts to it in any way, shape, or form. I manually enter everything that so I know what the hell was going on. I know what's going on with my spending and reminds me that oh, maybe I'm spending too much. So when you're doing a budget the first thing it should look like at the top. Start with your income. A budget is more or less a measure of money in versus money out. Your income is the starting point. Begin by figuring out your total income if you work like a payroll job. That's after tax pay you bring home that's your amount you deposit in your checking account. If you work more than one job, add your net pay together. If you're self employed, try your best to estimate your average monthly income. If you're self employed, it's the amount of drawers you take every month to pay your personal bills. Give yourself some wiggle room if your income changes from season to season. But as I said, if you're self employed as the amount of the draw that you take to pay your personal bills, that your personal income for purposes of budgeting, add up all your expenses. This is why you need to have a app that tracks all your income and spending, you can do a report by category that lists out all your expenses much easier. They got living expenses, grocery debt payments, like credit cards, or student loans, utility bills, insurance payments, and everything else in between, you subtract your costs from your income, a minus b equals c. And that will tell you on a monthly basis, whether you're over or under, now, your spreadsheet should in which they do even say this here, your spreadsheet should be multiple columns. Column A is your description, where you live, whatever it is, Column B is your last 30 days, your budgeted dollar amount, how much are you budget for that particular expense, for your mortgage payment for your car payments should be the amount of the actual payment for your insurance, defer your utilities, all your entertainment, your groceries are gonna vary your car, gasoline is gonna vary. So you figure out on average and plug in number, a few just figure out what you've done in the last 30 days and use that as a starting point. And then column C is your actual amount for the particular current month. And column D is the difference, which is if c is less than b, you spent less, that's good, especially at the end of the month, if c is greater than b, you spent more than your budget. Now there could be a reason for it, maybe you're just getting started, you don't have a good number yet. So you need to update your budgeted amount. And you keep doing that month in and month out until you get it down. So where are you going off by a few dollars? And why are you doing all this because you're doing this to keep track of your spending to take control of your personal finance, keep control of your money, so that you can do the things you want to do. And life, whether it's saving for retirement should be the number one for saving for your children's education, savings for a bigger down payment on a new home, or newer home, saving for a down payment on buying a good used car. Whatever it is you want to do, you set your goals throughout your life. As you meet your goals, you reevaluate everything and you set new goals, the budget or your control center is gonna help you reach those goals. A lot of you listening your goals are probably to get rid of your credit card debt, very minimum, get rid of all your high interest debt, that should be a goal for everybody. And once you start achieving the goals, then you can look at, well maybe I can get rid of my car payments. And then once you achieve those goals, your next goal is well maybe I can get rid of my mortgage. And then once you achieve that goal, I can increase the amount I'm saving, maybe I can increase the amount I'm investing on and on it goes. But you need to track your spending and track your income. And you need to have a control center. So you can keep track of things. And it also helps you pay off your credit card debt faster. Because if you have it in a budget, and you see things you're paying for that you no longer are using, you can cancel them, you can do away with it, which frees up more money that's going to go in your savings. And the faster you build up that emergency fund. And the more access you have, the more you can put against your credit card debt. And the quicker you get out of debt. I kind of forgot to mention from top to bottom income less expenses than whatever is at the bottom. A minus B gives you see as that's a positive number. That meant you don't spend more than what you make. So the amount on your savings could increase. But if that's a negative number, that means you're spending more than what your income is. So you need to look at yours spending categories and cut back until you can get that number to zero. He don't want to spend more than your income, that's going top the bottom, from left to right, where you're comparing your budgeted column to your actual column. That's where you're just comparing how close to the budget are you stay in? Are you within parameters is your budgeted amount of money that you sat, close and correct, or is a way out of whack, which means you need to fine tune it, and adjust it. That is what this episode is kinda about. If you'd like to support this podcast, you can go to reduce debt, increase wealth.com, click on the support button and make whatever contributions you wish. Or in my show notes, I have a support link. And you can click on the link that takes you the same place. And I really appreciate any money to help keep this podcast going. 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 Beto definitely be an investment, something and yourself and an investment in your personal financial life. If you're interested, send me an email at reduced debt increase wealth@gmail.com. And I'll send you the information about this online software that worked great for me while keeping track of all your spending and your income, and doing your records by category, and keeping your control center up to date will help you improve your personal finances. But that's not the only thing that's gonna help you improve your personal finances. You have to look at how and what you're spending your money on. Whether you're trying to keep up with the Joneses as to say and go, or you're buying brand new cars every two years, you got to ask yourself, do you really need a new car every two years? And how many miles are you putting on it? And why you should not buy a new car period. buying a new car is keeping a lot of people broke and struggling paying the paycheck. If your car payment is more than $1,000 a month, you pay too much for your automobile. And if you're buying a brand new car, you're paying too much for it. And why do I say that? Because an automobile is an asset. But it's an asset that goes down in value. And you're gonna lose money on it no matter how short of a time or alongwith time you keep it. So if you just shift your thinking and buy a good used car, you're gonna have it for the same amount of time or longer is gonna drop less in value because it's already dropped in value for her new card loses 30 to 50% of its value within the first few months of ownership. And you got to you guys still got that big payment. If you buy a car that's two to three years old. You're not paying for all that lost depreciation or that lost value that it lost in the first couple years. And if you keep it and take care of it, it can last you a long time. And if you get rid of it, and it's two years old when you buy it, and you sell it five years later, it's a seven year old car, you can recoup some of your money, so you're much better off. So buying a new car is probably the number one thing keeping most people living paycheck to paycheck. Keeping Up with the Joneses is probably the number two thing. Keeping people living paycheck to paycheck. You may think it's because you have all those credit cards charged up. But why is that? Even got to look at your spending. What are you spending money on? If you have to use As a credit card to buy groceries or pay for food, whether it's dining out, or however, you're in bad shape, because you're financing your day to day living expenses, and you cannot survive very long doing that. So quit using credit. make the minimum payment or all your credit cards, start to your emergency fund savings account, loaded up to a minimum$1,000. Then once you build it up two to 3000, over that, apply the extra amount over 1000 to one of your credit cards and pay it down. And you do that time in and time out over time. Watch where you're spending, keep your budget, keep up with your tracking, and do away with things you don't need to be spending money on and watch how you spend your money. Do you really need to buy a new car every couple years? Do you really need to buy whatever, if it's gonna cost you more than$200 You need to think about it for at least 24 hours. Don't make rash buying decisions. Tried to justify in your mind or in your spouse's mind or justify to your spouse, why you need whatever it is you're gonna buy. And with this over time, you can get your credit cards under control you and get your other debt paid off. You're gonna increase your savings. You got increase your retirement, and overall, you're gonna be much happier and better off in life.