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. Budget upkeep. Keeping a budget up to date is helpful and staying on top of personal finances, what to do and when will be discussed with tips on staying on track. The information from tracking should include everything checking credit cards, everything that you post into your tracking software. When you do your report by category, you must include all accounts, I've failed to mention that in the past, but when you do this for your budget, he got to include your checking your credit, all your credit cards, everything everywhere you're spending money. That's why it's important to keep everything up to date. So what is budget upkeep? Once you go through the mechanics of setting up a budget and doing your format and copying it out and setting up your months, the upkeep comes with keeping the numbers up to date for the current month, so that you always know what's going on. If you just do a budget for a whole year, it's gonna take you close to a whole year before you know that you've made some problems that you're overspending. So you break it down month to month, you keep it up to date, and you up date, the actual amount that you're spending and income on a weekly basis. So you're thinking other than paying off your debt? Why are you going through all this trouble. And believe me, once you get in the routine of doing it, updating your tracking every week is gonna take you five to 10 minutes, depending how much funding you've done, up and date, your budgets gonna take you out three or four minutes, because you're doing all the work on your with your tracking app. Now, if you're using an app, or it's all in one place, such as you need a budget, then it's gonna be a lot more streamline and lawless trouble. But in that case, you need to look at your budget, he need to look at what's going on and be aware of maybe you're overspending in this category, but you got extra money in that category, those type of things. So a budget is simply a spending plan that takes into account estimating current and future income and expenses for a specific period of time period. Usually a month, the article says usually a year, I have a link in my show notes. And that's the PDF. And it's not really estimated current because you know, based on the previous month, what your actual spending was, you pretty much pretty close to knowing what your actual income is. It may go up or down a little bit each month, especially if your paycheck changes if you're not on salary. If he on salary, there's no estimate estimation of your income because it's the same every pay, the only thing that changes if you change your tax withholding. Or if you increase your 401 savings, or you get a pay raise, that's the only time it's gonna change. But if you're paid my case, I was getting paid by the mile because I was a truck driver. So every week might be a lot more or could be a lot less it was changing. So I used an average that got me close. As far as your monthly expenses, they should be somewhat close over a period of time, over three to six months, you should have got a pretty good average course your mortgage payment, your rent payment are set in stone for at least 12 months or a year your mortgage payments up to 30 years or until you refinance. But that shouldn't be changing a whole lot. It should be the same. So it's not an estimate. It's a known fact, you know how much it's gonna be. It keeps your spending in check and make sure that your savings are on track for the future, if you're not trying to save is definitely gonna keep your spending under control. If you're looking at it, and if you're analyzing it and you're seeing what's going on, and the trend being set in you can fix a problem before it becomes a problem. That's the beauty of having this budget and it can help you set long term financial goals keep you from overspending helps shut down risky spending habits and, of course, more. Now the financial goals, or maybe it's saving for your retirement saving for a down payment or home, saving for your children's education, saving the pay off some debt at all helps you with doing that. And the key thing to keep in your spending under control, it allows you to set some money aside in your savings account, or emergency fund, that when something unplanned four happens, that's unplanned, uneventfully, you know, unknown type thing that pops up on occasion, such as you need new tires for your car, or your refrigerator goes out in your home, or you need a new furnace, child gets injured some way, you have some more emergency money to use to help pay for that event that might happen. So if you want to look that up, there's an article out there in my show notes for why you should be doing a budget, if you've gotten this far, you probably have a reason why you're still listening. And the reason is, you're probably working on paying off some debt, I said a little bit earlier that you need to include all your spending on your credit cards. But if you're working on your debt problem, you shouldn't be using those credit cards, because that's rule number one, quit using your credit. Because how you gonna pay it down and eventually pay it off. If you keep putting new charges on it has gotten to be near to impossible. And that keeps you in the debt cycle, which we're trying to break out of. So you gotta quit using all your credit cards to get less to post this think of it that way. And then everything's gonna run through your checking account, and you only gonna spend the amount money that's coming into your checking account. And part of that spending includes setting money aside in your savings account, and building up that emergency fund. So all that is working together, we're tracking in order to know what's going on, we have a budget to control I call it the control center. And then we're gonna have a debt reduction plan to help us give us guidance on what to do to reduce our debt. And that's coming up in the next episode, using the tracking software is important. And being able to create your report that you use to do your budget is also important. And you can set that report up and save it as your monthly budget report. So you at least you got all the requirements set. He wants to do it from the first of the current month two, the current date here and everything must be posted and up to date. Before you do this. You include all of the accounts that you have in there, your checking your savings, your and all your credit cards and loans and whatever you may have, so that you catch everything that you're spending money on. And it's properly categorize. And when you're posting and you're tracking and account, you don't post to the heading account, such as housing is the heading accountant and underneath that, which is the master account, then everything below that are the ones you post to. Same thing with utilities, you have a heading account for utilities, you don't post to there, but you post to each individual one under that. So it totals up into there and gives you a good number. It's easy. If you look at it, you can do a report to see where numbers are been posted to. And if something's been posted to a heading County and go in and edit it and change it and put it where it should go editing your category lists in order to get it to print out similar to your budget as also makes life a little bit easier. So when you go to post it, you're in the same order then when you go down your budget, your incomes at the top that will happen with your category list the income will be at the top and then all your expenses will be in the order that you put them in the either alphabetical order or if you rearrange that what however whatever key or I call it index key that you use to put it in the order in which you want it to be some I got mine is housing, transportation, food savings, credit card debt, and then whatever else entertainment, whatever categories you come Come up with a lot of my stuff are included in housing and transportation and food, that's probably 95% of everything. And then my savings, and then I don't really have a lot of credit card debt, because I paid it off. And I pay it off every month. And that feels good. And that really frees up a lot of money for you to use. And it actually makes it so that you have more money to do the things that you want to do. I know it sounds crazy, but believe me, once you get done paying off the banker, you'll have a lot more money for yourself. So in a matter of keeping your budget, you also have to keep up your tracking software, and post everything that you've done on a regular basis, you can do it every day, if you want to. Over time, you'll do a weekly, if you set up reoccurring charges, where the most of the information is done for you, he changed the date, you put the right dollar amount in and boom, you're done. That makes it a lot faster and less time consuming. So learn to use your tracking software and learn and set up your software for your budget so that you can use it to your advantage. I'm going to cover your debt reduction plan. And what is it? What are you going to do and how it works was all this? Well, the first thing on your debt reduction plan is you got to quit using credit, which I mentioned a little bit earlier. The second thing you want to do is make the minimum payment. The third thing you want to do is take any money that you saved from reducing the extra payment you've been doing on your credit cards trying to pay off debt and money that you've reduced from your spending. So you can he want to set up an emergency fund. And you need to have a minimum of$1,000 in the emergency fund. And if you think that's a lot, you're not alone, because about 80% of the people in United States couldn't even afford to pay a $400 expensive one would pop up without using credit, of course. And maybe some of them can't even do that because their credit cards are maxed out. So we want to build up an emergency fund to have a minimum balance of $1,000, I recommend doing that the same bank that you have your checking account. And then because that makes life easier, I know they don't pay a whole lot, but you're not at the point where you're worried about that, because you're paying a lot more out in interest on your credit, then you're going to ever receive from your savings. So we're going to then continue keeping our spending under control, we're gonna continue doing our monthly budget and looking for places to save money, and where to reduce money. And then we're going to take whatever money that we have, I recommend keeping the least $300 minimum balance in your checking account, don't let it go below that, that way have some unexpected little thing comes up, he can cover it. Or if your gas bill, your electric bill is 20 to $30 more, you have the extra money there to cover it. And then anything over that you got to transfer to your savings account once your bills are been paid and cleared. Now this is something that you would do maybe once a month. And that's where you need to know what's coming up in the future. You always gotta be aware what bills you got to be paying, and the next between pay period to pay period. What do I need? Do I have my electric bill, my gas bill, my trash bill, my rent, my mortgage, my car payments, all those things, because every week you're gonna be buying groceries and putting gas in the automobile. So you need to be aware of what's coming up in the future. So you don't overspend today, because we want to have the money available to pay our bills on time. Because that's how you get a better credit rating. The better the credit rating you have, the cheaper you're going, the less you'll be paying for insurance for your car, your house and life or whatever insurance you have. Because if you have a poor credit rating, they're going to charge you more for insurance and it's going to be harder to get insurance. So everything financially revolves around your credit rating, and how you manage your money. And those who don't manage money that spin whatever they want, whenever they want, and then they pay their bills late And then they have a lot of debt. And those people are just working, digging the hole deeper and deeper and deeper. And as they go is getting faster and faster. Because the deeper you get, the worse off you're gonna be, and the longer it's gonna take to get out. So you need to have a focus and a plan. So if you're trying to get out of debt, whether it's just credit card debt, that should be your first plan, get rid of all that high interest debt first, and then work your way down. Your first goal should be pay off your credit cards in second goal should be pay off your car isn't a third core goal should be pay off your line of credit on your home. And then your final goal is to pay off that first mortgage. And as you go through this, the time it takes to do this cycle. And the cycle is paying all your bills on time, live in your life, set an extra money, the money that you have in your checking account that you don't need to pay bills with putting it in your savings account, building that up and then taking two $3,000 out and leaving a minimum of 1000 in there, out and applying it to your credit card, one credit card that you owe on and paying it down and then eventually paying it off, and then work on your next one. That is the cycle you're going through. And that could take you years or months, there's no easy, quick fix. The only easy quick fix is you win millions of dollars in the lottery, and you use the money to pay off all your debt. And don't forget, if you win that kind of money, pay off your debt, and invest enough so you're set for life and then spend the rest. And that's my plan has never happened probably never will. That is the thinking you have to do you always got to be looking forward. What is coming due next week, what's coming due next month, I know I have a monthly cycle. I know this amount of money I have to pay out every month. I know this is about how much income I'm gonna I know that I have X amount I can put in savings. That is the cycle you should always be thinking about and working on. Now how to reduce your spending? Well, the first thing is, look for things that you've been paying that you no longer use that step number one, look for things that you're paying and duplicate. Maybe you have software virus for a computer, but you have three of them that you're meant paying on three different subscriptions, because 10 years ago, you buy a new computer, you got a subscription. Then five years ago, he got a computer and he got a new subscription. And then two years last year, you got a computer and you got another so you're paying for three different ones, you only need one. And usually one subscription can cover multiple computers. So you need to cancel those duplicates. And then you need to cancel the things you no longer use. That's step one. Step two is then looking at things that you can do without a good example is cable TV. If you have cable TV, and you got all the premium channels, and you've had it for five years or 10 years, you're probably paying$150 plus a month for that. And then you're streaming maybe some sport channels, okay, and you're paying for internet. So why don't we take we got three different things there. You got internet, you have streaming, and you have cable? Do you need all that you can get rid of that cable, go with an antenna for your local TV and stream whatever channels you need or want to watch. He need to cut back some because he shouldn't limit your streaming to no more than three different streaming platforms, he probably get away with one. And that 150 plus bill is now 50 to $70. So about half and you limit what you watch and what you get. And you try to keep your spending under control. And that's an area you can save quite a bit of money. I don't have my streaming platform is all the cable channels that I don't have news or sports. If the only sports I want to watch is college football bowl games that's only on the ESPN, I will then mid to late December, sign up for a service, watch what I want to watch. And then as soon as the last games over, I cancel it, and it's all prorated and flat 30 bucks, maybe. So it's not gonna cost me a normal a lot cheaper than going to the game. But then I'm not paying for something 12 months out of the year, for some like watch two, three weeks out of the year. That's the type of thinking you got to do in order to reduce your spending and keep your spending under control. He got to be thinking that, Hey, you gotta think for ways, how can I reduce the cost of my cell phone? Okay, well, I have a cell phone, my husband has a cell phone, like children, we all have three separate accounts, that may be the best way to go. Or maybe heaven one account and where you combine them all together, may be cheaper. Those type of things is you have to look into on a regular basis and see what's out there, you need to contact your current provider and see what they have. Now, I want the same type of service, but I'd want to pay less. And you might be able to reduce that 10 $15 a month, he's thinking well, that's not a whole lot.$10 a month is $120 a year, that's money that could go in your savings, like a paid off that whatever you save is gonna go into your savings, and it's gonna help build that savings faster, and it's going to help you pay off your debt faster. So don't think anything is too small, you have to focus on everything down to the dime, Penny nickel, whatever you want to do. But you got to be focused, and you have to work on it. And don't be too embarrassed to reduce a bill to $2 a month. If you can reduce something, reduce it, 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 in 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 and 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 works great for me. If you're interested in checking out the software I just got done talking about, you can go to my show notes. And I have a link shop financial a copy and paste it and it will get you to the website. So you can check it out this process, you have to be dedicated and you have to be smart, and you got to be thinking ways how to save money. You might have noticed I never mentioned anything about using coupons at the grocery store because I don't do that. But that's a way to save money. I don't do it because I never get coupons for something they would use. So I would never buy something I'm not going to use so I don't I don't use them. Because I don't need them. But there's ways to save money, I use a Gas Buddy for instance, I may save five cents a gallon, every time I fill up my car, I they send me a card I add I link it to my bank card and and when I go to the gas station, I use that card. And the advantage of that is you get five cents less per gallon. And it takes a couple of days before it hits your checking account. So if you're needing gas for the car, and that's two days before, before pay day, you can still use this thing a couple days ahead go to work or two days and then it by the time it hits your checking account, you got money there. I don't buys doing that. But you could do that. That's called being smart with your money. And again, planning ahead. If you're really struggling for cash, and you really look for ways a knockin to reduce your spending with this, but you can use your cash in different ways. One thing I did was and still instead of filling up my tank and spending$75 I'll put $20 in my tank, enough to get me to say the end of the week and then I would keep the difference In my checking account, and in case I need it for bill like this a little bit more than I planned on, where if I needed to buy groceries or something else, I'll have it. And then I'll put another $20. And the following week, it just enough to get me through the week. And that way, I'm not putting all my money as I call it, and to my gas tank, yes, it may be more pain and, uh, but you got to be careful, you don't run out of gas, and you got to stop more times and put gas in. But it's a way to manage your cash flow. And that you need to look for those type of things to do also, remember our goal here is to quit using credit. So we need to start paying for cash every for everything. And maybe there's times we're gonna have a timing difference where a bill is due before we get paid. So those are type of things you want to look out for, and plan ahead. That's why it's important to look ahead two weeks, three weeks a month to know what's coming up so that you have the money there in your checking account to pay the bill when it comes to when it's due. The next episode, I'm gonna cover a debt reduction plan, go a little more detail. Maybe come up with some other ways to save your money. Stay focus, keep everything up to date. Keep on top of your budget, looked for ways to reduce your spending, increase how much your savings, and you'll be glad you did. So