Welcome together, we're going to explore our personal finances and figure out how to improve them. Whether you're just getting started in life on your finances, or you may already have a home, a car payment, and you're struggling to get credit cards under control, or you may be getting a late start in life on saving for retirement, reduced debt increase wealth.com is a podcast to educate those to improve personal finances, whether it's eliminating debt, or making smart investments. Hello, Mr. Chuck here, and how are we doing this week? Last episode, I talked about happy numbers. And do you know what your happy numbers are? And have you got your budget setup? And if you're thinking, why do I go to the trouble of setting up a budget, if only thing is going to help me do is save more money or to get out of debt? That those two things are not important to you? Then I guess you Why are you listening to this podcast is what I would question. So I'm saying you have some interest. So I'm going to give you the benefits of budgeting. So it's worth your while to do a budget and take some time in my show notes. I have an Excel spreadsheet form for a budget already set up. If you use a spreadsheet on your computer, you can download it. And even though it's Excel format, most of the programs will format them into their format, Google whichever numbers, whichever spreadsheet you may be using. And I also have a PDF of paper one that you can just print out at home, on your printer and fill in the numbers and figure out where you are. And I'm trying to make it easy. So we can get you started. And once you get started, you'll see the benefits and the benefits. You might ask since you got me started, here's a list of some of the amazing benefits of budgeting. One save more money. Do you know how much money you saved last month? Do you know how much you spend on food gas clothes? Right random stuff you probably didn't even need an already forgot about? If you answer no to either of these questions, you're likely missing out on being able to save a ton more money than you currently are. By simply beginning to track your expenses, it will be so much easier to find the areas of your budget, you can trim to put more money in your pocket for the things you really care about. And remember is not how much you make. It's how much you keep that really counts and a budget, we'll help you keep your money. That random stuff that you're already forgotten about. You probably don't need to buy that you can be putting that into your savings. Number two, have a peace of mind. Sometimes when people think of budgeting The first thing that comes to their mind is depreciation. I don't think I'm saying that right? That is honestly the exact opposite of how budgeting should feel. If you have a budget, you can have a peace of mind knowing that you count it for expenses and are planning for a better future. Budgeting doesn't mean not spending money. Instead, it just means that you can rest easy knowing you have a plan. Number three, plan and prepare for the future. If you know where your money is going and how much you do or don't have left over every month, that gap, you can more easily plan for the future. When you know that your monthly expenses will be. You are also able to pay yourself by contributing to savings and not just adding whatever you have leftover. The more in the future you can project this the better off you're gonna be. If you can project your expenses for 30 days or 60 days and know what's coming up. You can better plan and prepare for the future. That's part of my plan. Say you decided you want to buy a house you can look at your budget to determine exactly how much money you can save towards a down payment and calculate how long will it take you to get your target down payment. The same can go for any other major purchases or life changes. Want to have kids and be a stay at home parent budgeting can help you determine what needs to be changed to make that happen. Is it your goal of yours to stay debt free budgeting will help you determine how to pay cash for your next vehicle purchases and you get the idea. Number four, stop feeling guilty for spending money. I'm a huge saver by nature, not me personally, the writer here. There are definitely nothing wrong with that, and it's helped me get ahead financially. But what is problematic sometimes is the guilt I feel for spending money. If I make a purchase that isn't necessary, I justify the purchase over and over to myself or just feel bad for making it. Even if it was well thought out plan purchase. And with budgeting of Pacific mountain of spending money each month, I can now make these kinds of purchase without feeling guilty for them. This has been a huge benefit of budgeting for me, there is nothing wrong with doing something for yourself and a budget can help you remember that. Plus, if you budget some discretionary spending, you're less likely to go on I am the prey and emotional spending free that you really will regret later. Though some people say to budget 20% of your take home pay for once. I really feel like it's a bit overkill if you're paying off debt. I give myself$30 every month to go into my discretionary purchase account. I also spend between 50 to $100 on fun like activities, like dates. This is more than enough for me, but you have to decide for yourself what you will spend on once in order not to feel deprived and give up. Number five, don't get caught off guard by expenses. And this is why I say project your expenses for 30 to 60 days and you'll know what's coming up. Another advantage of budgeting is being financially prepared for every month. When you budget for the month and take note of rIq occurring yearly or semi yearly expenses, such as car insurance, Christmas present, etc. You can start saving for those in advance. By doing this, you'll be able to avoid going into debt simply because you forgot to plan ahead. So what you're doing is you're you're not creating new debt. By having a budget you can plan ahead. That's one of your goals quit creating new debt to get out of debt. Number six have a safety net. I know the biggest benefit of budgeting is that it decreases the chances that you'll be caught off guard in case of an emergency. by determining ways to say more money, you can build up savings to help pay for unexpected expenses. Things like car accidents, major repair for your home or a trip to the hospital can wipe out your budget. Because it's an unplanned event by budgeting can find ways to contribute extra money to building emergency fund each month. Number seven, invest in your future. And when you make your budget, it's important to factor in a monthly retirement contribution. Even if it can't be much right now the important thing is that you start remember, it's not the amount you contribute and that is impactful. It's the length of time that's impactful. By starting early, you can take advantage of compounding interest to grow your small amounts by hundreds of thousands of dollar by the time you retire. Eight, I know where your money is going. Budgeting makes it so much easier to know where your money is going every month. I know your numbers, happy numbers and you may even discover you have automatic purchases or subscriptions for things you don't even use being charged to your account every month. being organized will also help you keep track of your expenses and that way you can easily tell if your costs go up dramatically and make changes as needed. This could even include negotiating with your utility companies and the only way you would know this is because you're paying attention to your spending thanks to your budget. Number nine strengthen your relationship and monthly budgeting provide us a great time to talk with your partner about money, like coming together at least monthly to work together on your budget and perhaps even more frequently if needed. You Make sure that you and your partner are on the same page financially. money problems are huge because of relationship problems. And unfortunately as often due to simply not talking about money enough, and today's culture, there is a taboo around talking about money, which is just really ridiculous and ends up hurting everyone more than helping them. So don't be afraid to talk about money. Having a monthly budget meeting will allow you to have open honest communication about money doing this, you can avoid problems before they arise and also teach your children the value of money, that earning money and how to save a little bit so they have a bigger amount for a future purchase and number 10 is stay focused on your goals. A monthly budget will help you remember each and every month that you are working for. It will help curb unnecessary spending so that you can stay focused on the big financial goals in your life. If you're paying off debt, a budget is a myth. Number 11 direct your money not the other way around. If you don't have a budget, there's a very good chance you're aren't in control of your finances. You may never feel like you can say or might be living paycheck to paycheck. When you don't have a plan for your spending, it has a tendency to disappear. On the other hand, if you have a well defined monthly budget, you tell your money exactly where it's allowed to go. Budgeting also allows you to pay yourself first so you are guaranteed to be able to say more money. Number 12. start developing better money habits. Now that you have a budget you can use the information you have gathered through tracking to develop better habits. We all have bad spending habits, that when you have a budget, you're more likely to be able to recognize and decrease those spending habits. And getting rid of bad habits will have a huge long term benefit for you for naturally. And it all starts with budgeting and 13 pay off debt faster. Budgeting ensures that you have a clear understanding of your monthly debt payments. It can also determine how much you're paying towards the principal versus the interest every month. Another one of the amazing benefits of budgeting is the extra money you find from your monthly paycheck. When you cut expenses that are unnecessary, you'll be able to redirect all that money towards paying down debt. This in turn helped cut down on the interest you would otherwise had to pay over the life of the loan. Knowing your numbers last month, it comes right into this. And again, your goal is to quit creating new debt and build a emergency fund. First, make sure you have more than adequate enough to keep putting money in to your merch into the savings or emergency fund until you have a large amount of money to make a lump sum 234 thousand dollars towards that credit card debt. That way, you'll never come up short. You'll never be surprised by an on a plant event in your life. 14 live a better life the biggest benefit of budgeting is that it really allows you to live a better life. Did you know that there's actually scientific research showing that budgeting can increase your happiness. Getting rid of our student debt and contributing to retirement at such a young life has set ourselves up for a better future. we're now able to make decisions based on what is important to us. We're then solely based on money. And that's all thanks to budgeting. You control your money, don't let the money control you. If you think you can't do a budget, I've have a PDF that has a budget prepared you just got to print it out and fill in the numbers related to your life and I also have a link for an Excel spreadsheet that's even more detail. If you have a spreadsheet you can use that and get your budget started today. Knowing your numbers, your happy numbers, your net income, your monthly expenses and your total debt. Your individual debt and the interest rate on all that debt if you don't know that how you know which one to pay off first and your savings, how much can you save every month, how much is your rate of interest on your savings and the balance or that gap how much is left over every month after you know all these numbers that will start your emergency fund and that will increase your savings and you'll have a easier life going forward. Budgeting makes your life easier, because you know what's gonna happen and then the near future or the next month or two. In my next article 10 amazing benefits of budgeting your money I'm going to go through this real quick. You know, you avoid it because it's extra work. But in the in the long term doing a budget is gonna save you time because once you get it gone and you just fine tune the numbers a little bit here and there. And it's not much work at all but you can recognize what's going on before it happens. And this article has a free monthly budget template that you can get they'll send it to you if you leave your name and your email address. The benefits of budgeting provide you 100% control over your money yes let you track your financial goals and your personal financial plan you know what your goals you guys short term goals you should have midterm goals you got long term goals. short term goals might be saving up down payment to buy a car or downpayment for a home. long term goals or saving for retirement, maybe some long term goals could be your children's college education, or some midterm goals could be a college education. So it helps you track your goals and know where you are, keeps you on point of where you're trying to do. Budgeting will open your eyes and you will realize where you're wasting your money and you can adjust your spending habits and it will help organize your spending. You get your spending down to where it really should be a cable internet, mortgage insurance, groceries, entertainment, restaurant gym membership, and it's all things that you do if you're using these items included in your budget. If you're spending money on something you're not using, cancel it. That's how you say more money. And a budget will help you identify that will help create a cushion for unexpected expenses and what they're saying here, you will have some savings set up for an emergency fund. So that if something that you have not planned on happens in the near future, you don't create new debt in order to pay for it. Budgeting makes talking about finances much easier. When you're working on a budget, you and your spouse are going to work on it together. You're a team and when you got the budget that gives you an excuse to talk about your finances. If you have a partner that spends too much money on clothing or too much money on something. He can talk about it, they can adjust their spending and you can get on the same page to meet the goals that you both of us should have decided on much earlier. Having a budget let you save a safety net was same thing emergency fund allows you to pay down debt quickly and as I would like to say it helps you stay out of debt or it helps you minimize the amount of debt you have. Because you got that emergency fund to rely on to fall back on. Now there's are some big purchases like your mortgage on your home a new car that you would probably have to have alone to do they will give you some downpayment so that you can make your monthly payment more manageable and keep within the percentages. A car shouldn't be more than an eight to 12% a mortgage, a home, your mortgage, real estate taxes insurance and some repairs. 30 to 40% or less 25 to 35 would be a good range. Clothing eight to 8%, eight to 10%. If you know these percentages, and you can stay in the realm, you're always going to have some money left over, that's a percent of your net income. So if you can stay in within your percentages, and you know their percentages, happy numbers, again, if you're gonna have a happy savings account. Budgeting helps you invest. Yeah, if you know where your money is going, the money will work for you contribute your retirement early and often should be on your radar. So you can retire as plan. And people used to rule whatever is left and the month I'll put in my retirement that is backward thinking. Try changing your mindset to paying yourself first, meaning knowing how much you need to put away for retirement and paying yourself before anyone else. Obviously, it takes time to learn how to balance it correctly, so your bills still get paid. But this is by far the best way to reach your investment savings goals. If you know your numbers, how many years to retirement and how much money you think you'll need. Once you retire, you can figure out how much you need to say, for the length of time you got to meet your retirement goals or maybe for that early retirement, and staying out of debt gives you freedom to do and pursue what you're interested in. staying out that gives you the financial freedom to pursue what you want to do. If you're trapped with debt, you're gonna think twice before quitting that job that you hate. Because you got all that debt you got to pay. And you'd rather be trapped in a job you hate versus a job you love. And then maybe that job you love pays less money. Or maybe you're looking to be self employed and you're gonna go a period of time. Without income, you got too much debt. You can't do that. You live a happier better life overall, when you have a budget because you can plan for things you know what's coming up. And if you project forward a month or two months, like I've always been talking about, you will be able to plan even better so that you can want to quit creating new debt to build up your emergency fund. And three, be able to get out of debt sooner and quicker, which saves you entrust which saves you money so you can have more and savings overall. That's the end of another episode. I hope you found it useful. And if you'd like to share this episode with your friends, please do so. I'm open for any suggestions for improvement, or for information that you would like to talk about in future episodes. You can go to my Facebook page and leave me a message. I am more than glad to respond. To find my Facebook page go to reduce debt increase wealth.com and click on the Facebook icon