How to Make a Budget That Actually Works For You


Transcript

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- Did you know 60% of
Americans don't budget?

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It's time to fix that.

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So, in this episode we're going to talk about

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how to make a budget work for you.

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(upbeat music)

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All right, it's 2020. I
cannot believe it's the start

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of a new year.

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Now remember, I shot some of these videos

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before I went out on maternity leave.

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So yes, I am still pregnant.

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But when you look back and
reflect over the last year

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I don't know about you, but it flew by.

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And I feel like I didn't get
everything done last year

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I thought I wanted to get done.

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So, to start out 2020, I
want us to all start out

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with a bang and hit the ground running.

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So, if you're like most
people, you're trying

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to get your money in order.

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So, in this episode we're
going to go back to the basics.

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I'm going to show you
how to create a budget

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that actually works for you.

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And I'm going to bring a
couple on to talk about

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how they budget on an irregular income,

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which is a huge problem
for a lot of people.

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Now, when you look at people's
top New Year's resolutions,

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paying off debt and saving
money is always at the top.

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And, here's the good news:
We have a proven plan

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to help you achieve those goals.

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So, if you follow our plan at all,

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you probably are familiar

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with the baby steps.

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But for those of you that are not familiar,

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there are seven steps that you do in order

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with your money.

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So, really quickly, Baby
Step 1 is a starter

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$1,000 emergency fund.

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Baby Step 2 is paying
off all of your debt

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by using the debt
snowball. Baby Step 3

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is saving 3–6 months worth of expenses—

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a huge emergency fund. Baby
Step 4 is saving 15%

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of your income into
retirement. Baby Step 5

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is funding kids college. Baby Step 6

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is paying off the house
early. And Baby Step 7

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is building wealth and
being extremely generous.

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So, those steps in that order.

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Now, it can seem overwhelming,
but again, you start

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with the first Baby Step.

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But the beautiful thing
is, no matter where you are

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on the baby steps, you have got to budget.

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(slow music)

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All right. The budget is
great. The budget is awesome.

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I love the budgets.

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And you may be watching this
video, and you're thinking,

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yes I agree with you Rachel, but my spouse,

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I have to get them on board.

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Listen, I get that,

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because Winston actually had to get

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me on board to do the budget.

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Because here's the thing:
You marry your opposite.

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And so Winston, in our relationship,

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is actually the nerd.

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He's the one that loves doing the budget.

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He loves to be organized.
He loves details.

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He can get in it and
analyze it. He loves it.

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And I'm more the free
spirit, where I'm like listen

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it's all going to work out.
Let's just have some fun.

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And I'm a spender on top of that,

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so I'm like yeah, we'll just go.

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It's going to be fine. Don't worry about it.

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So, that's all good and
dandy when you're on a budget,

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and you have boundaries and restrictions,

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and you're mature, and you
take it seriously,

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which I am now.

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But 10 years ago, that
was not always the case.

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And so getting your
spouse on board is huge.

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So, let me just say out
there for all of you nerds

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that are watching this
video . . . Again, you nerds

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love doing the budget.

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So, I'm not worried about
you doing the budget,

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because you're probably already budgeting.

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But when you're talking
to your free spirit,

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couple of things to remember:

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Tell them that a budget
does not limit their freedom.

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A budget gives them freedom.

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In fact a budget gives
you permission to spend.

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And you actually get to say,

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hey, this is where we
want to spend our money.

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Because you get to create your budget.

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You get to decide. Where do
you want your money to go?

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And so that's the beautiful thing.

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Now, will there be
sacrifices and boundaries

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and limits involved?

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Possibly, yes, depending on
where you are financially.

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But when the free spirit
sees the numbers down on paper—

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or visually, wherever that is—

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it's going to help them see it.

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And tell them, hey we're
going to have a lot grace

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in this conversations. Because you nerds

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out there watching:

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I'm sorry, sometimes you're
just big rule followers

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and you don't give us a lot grace.

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And so, you have to chill,
nerds. Chill a little bit

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and tell your free spirit, listen,

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this is not going to be a perfect process,

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but let's work on it together.

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So, free spirits and nerds unite.

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It's a beautiful thing when it happens,

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and it is possible,
I'm telling you, it is.

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All right, coming up next, let's talk about

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how to actually do a budget.

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(upbeat music)

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Family is one of the most
important parts of my life,

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and making sure everyone is taken care of

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is a top priority.

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That includes more than
just meal planning,

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entertaining the kids, and taking care

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of all the day-to-day needs.

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That's why I recommend
having life insurance.

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Now, when you're shopping
for it, you might wonder,

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should I get term life insurance
or whole life insurance?

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I always recommend term insurance.

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It's going to save you tons of money

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that you could put toward
paying off your debt

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and funding your emergency fund.

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For a 30-year-old male, a
20-year/$250,000 policy

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would cost $15 a month for term life.

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However, the same policy for whole life

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would be $190 per month.

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That is a huge difference!

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Winston and I use Zander Insurance.

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They do all the work
for you by finding you

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the best prices and options,
customized to your needs.

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To learn more, call Zander
today or go to Zander.com

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because that's who we trust
to take care of our family.

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(upbeat music)

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All right, a simple budget
you guys—this is all it is.

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Are you ready for this? Fifth grade math.

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Your monthly income minus
all of your expenses

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should equal zero.

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So, every dollar coming in
is assigned to a category.

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Now, that's easier said than done, okay,

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because here's the deal:

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There's a lot of moving
parts, and if you've never

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done a budget before, it's going

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to be very very overwhelming.

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So, the first thing you have to do

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if figure out what you make a month.

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For some people, it's different every month,

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so we'll talk about that
later on in the episode.

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But for most of you, it's
like okay, here's your salary.

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You know exactly what you're going to make,

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so dig in and figure it out. After taxes—

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this is take-home pay.

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What are you bringing
in the door every month?

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Figure out that number.

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And then you're going to
list out all of your expenses.

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So, this is everything
from rent or your mortgage,

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to food, groceries,
restaurants, your cell phone,

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your insurance, pet care.

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Anything you spend money on, list it out.

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And then put dollar amounts next to each

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of those categories.

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Now, your first month
doing a budget, go back

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and look the last like three months

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and just kind of average out.

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Okay, here is what we're spending on food.

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Here's what our
insurance payment looks like.

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Just ballpark to at
least get some numbers down.

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And then you may realize,
wow, we're spending

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a lot of money because we
have not been purposeful,

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which means your going to adjust
some of those categories,

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which is totally fine
for that first month.

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But again, your goal is
that income minus all the

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expenses will equal zero.

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Every dollar has a name, okay?

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So, stick with this because
every month is going to be different.

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So, I'm telling you, you have to put it

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visually somewhere.

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This can be on a sheet of paper,

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or you can use EveryDollar,
which is our budgeting app.

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And it's amazing. Seriously,
I love EveryDollar.

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EveryDollar Plus connects
your bank accounts,

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so when you swipe your debit card,

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automatically those
transactions come in the app

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and you can drag and drop them

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into the correct categories.

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Or if you're taking cash
out of the bank, then

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that'll come up and then
you'll be okay. Yes!

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You know, $200 went to food here,

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and you can break it out.

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It is like, I'm telling
you as a free spirit,

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even though I'm a free spirit.

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It's one of the most
satisfying things in the world

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when you see that little
bubble pop up in the

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EveryDollar app and you
get to drag and drop

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and it does the math for you.

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Then it starts subtracting
so you don't

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even have to do the math.

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I mean, it is unbelievable.

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It will change your budgeting game.

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So, download EveryDollar.
Do your first budget.

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And the great thing is,
here at Ramsey Solutions,

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we have the solutions for you.

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We help you. So even within the app,

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we have so much there to talk about

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how to do the budget.

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So dig in there and look
and see.

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This is huge.

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Now, a budget can get complicated

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because there are a lot of problems

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that people will come up with.

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So, one problem I hear a lot is,

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well, Rachel, every month is different,

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so I really can't plan ahead.

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I'm sorry. Yes, it is different.
Welcome to the world.

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Yes, everyone's month is different, guys.

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That is life.

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And so what you do is,
you do the best you can.

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You look ahead and say, okay,
we're going on vacation

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so we're going to put
Nala, our dog,

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at the vet for seven days.

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How much is that going to cost?

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And we put that in EveryDollar.

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I mean you have to actually take the time

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and intentionally look ahead.

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Now, are there things
that are going to come up

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throughout the month
that you forget about?

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Yes. That's why we have
miscellaneous category.

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Your niece's birthday
comes up and you forget,

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and it's a princess tea party,

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and you need a gift.

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Thank you, miscellaneous
category. Just put it in there.

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Right, I mean, it's all there for you.

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That's your catchall. Okay.

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Now, if you notice that
your catchall things

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keep being the same thing,

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that means you need to budget for those.

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That needs to be its own category then.

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So, it's going to take some
time, but, yes, you have

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to plan ahead.

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And if it's your first time budgeting,

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it's going to take 90 days
for your budget to work.

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Give yourself some grace.

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Figure out what your months look like

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and just say, okay, this
is what we're doing.

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Now, another problem I see is that people

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that are living paycheck to paycheck,

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and they're using their credit cards

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to pay for bills. They may not have enough money

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in their bank accounts

251
00:09:24,353 --> 00:09:26,183
to plan for the month ahead.

252
00:09:26,183 --> 00:09:29,828
So, this is going to take a mindset shift.

253
00:09:29,828 --> 00:09:30,953
Okay, if this is you,

254
00:09:30,953 --> 00:09:32,820
because you've been
functioning in the past.

255
00:09:32,820 --> 00:09:33,958
You've been functioning saying,

256
00:09:33,958 --> 00:09:35,652
okay, I'm paying bills on things

257
00:09:35,652 --> 00:09:37,538
that already happened in the past.

258
00:09:37,538 --> 00:09:38,556
But what you have to do is you have

259
00:09:38,556 --> 00:09:39,389
to be thinking ahead,

260
00:09:39,389 --> 00:09:41,045
which means, yes, you are going to have to have

261
00:09:41,045 --> 00:09:42,442
some money in the bank

262
00:09:42,442 --> 00:09:44,029
in order to live this way,

263
00:09:44,029 --> 00:09:45,867
because you're basically
living a month ahead.

264
00:09:45,867 --> 00:09:47,602
So, when your paycheck comes on the 31st

265
00:09:47,602 --> 00:09:48,564
or the 1st,

266
00:09:48,564 --> 00:09:49,918
take that amount and say, okay,

267
00:09:49,918 --> 00:09:51,934
this is what I have until my next paycheck,

268
00:09:51,934 --> 00:09:54,251
and cash flow as much as possible.

269
00:09:54,251 --> 00:09:56,096
And maybe you take a month between now

270
00:09:56,096 --> 00:09:57,561
and doing your first budget

271
00:09:57,561 --> 00:09:59,021
and just save as much as you can

272
00:09:59,021 --> 00:10:00,389
to have some buffer there.

273
00:10:00,389 --> 00:10:03,019
Now, if you find that you
cannot get ahead financially,

274
00:10:03,019 --> 00:10:04,931
then you're going to look
and say, okay, maybe I have

275
00:10:04,931 --> 00:10:06,467
an income problem versus
a budgeting problem.

276
00:10:06,467 --> 00:10:07,805
And you may have to get your income up,

277
00:10:07,805 --> 00:10:09,427
which is really hard.

278
00:10:09,427 --> 00:10:11,799
But, in the moment, it's
going to be so worth it

279
00:10:11,799 --> 00:10:14,150
because you're able to
function that month ahead

280
00:10:14,150 --> 00:10:15,903
by doing the zero-based budget.

281
00:10:15,903 --> 00:10:17,514
Another problem I see people have is

282
00:10:17,514 --> 00:10:19,919
that a budget is just defeating.

283
00:10:19,919 --> 00:10:23,572
Like, doing a budget, it's just
so hard every single month.

284
00:10:23,572 --> 00:10:25,474
And I do see people with this,

285
00:10:25,474 --> 00:10:27,637
because it's a draining process

286
00:10:27,637 --> 00:10:29,863
because they're not making progress.

287
00:10:29,863 --> 00:10:32,204
It's like a budget is not exciting and fun

288
00:10:32,204 --> 00:10:35,030
because it's
revealing the problems

289
00:10:35,030 --> 00:10:35,939
that they have.

290
00:10:35,939 --> 00:10:37,193
And so the problem may be

291
00:10:37,193 --> 00:10:38,715
that they're income is too low

292
00:10:38,715 --> 00:10:40,732
or their lifestyle is just too high.

293
00:10:40,732 --> 00:10:42,518
And so there's going to have
to be some adjustment there.

294
00:10:42,518 --> 00:10:44,515
It's kind of this reality
check, is what a budget is

295
00:10:44,515 --> 00:10:45,348
for some people.

296
00:10:45,348 --> 00:10:46,971
Or they say, wow, we really have been

297
00:10:46,971 --> 00:10:48,673
living way beyond our means.

298
00:10:48,673 --> 00:10:51,556
And, so we're going to have to
be uncomfortable for a while

299
00:10:51,556 --> 00:10:53,111
and sacrifice our lifestyle—

300
00:10:53,111 --> 00:10:55,150
things we're not use to sacrificing

301
00:10:55,150 --> 00:10:56,578
in order to get this correct.

302
00:10:56,578 --> 00:10:58,966
Because listen, we're not
in Congress. We can't

303
00:10:58,966 --> 00:11:00,600
just keep spending money, you guys.

304
00:11:00,600 --> 00:11:03,799
We have an income—a set
income every single month—

305
00:11:03,799 --> 00:11:04,633
each of us does.

306
00:11:04,633 --> 00:11:07,499
You have to budget within that,

307
00:11:07,499 --> 00:11:09,533
and that's how you're going
to get ahead financially.

308
00:11:09,533 --> 00:11:11,753
You will never be able
to live above your means

309
00:11:11,753 --> 00:11:14,294
and win over the long term.
It's just not going to happen.

310
00:11:14,294 --> 00:11:16,760
And so, it's a hard
reality, but I'm telling you,

311
00:11:16,760 --> 00:11:18,068
once you get the budget under control

312
00:11:18,068 --> 00:11:21,583
and you say, oh wow, our
income is absolutely

313
00:11:21,583 --> 00:11:23,786
funding the lifestyle that we have now,

314
00:11:23,786 --> 00:11:25,363
then you start to gain traction.

315
00:11:25,363 --> 00:11:27,154
You start to gain control.

316
00:11:27,154 --> 00:11:29,644
But a budget isn't easy—I'll
be the first to admit it.

317
00:11:29,644 --> 00:11:31,431
It can be really hard.
The beautiful thing is,

318
00:11:31,431 --> 00:11:32,801
the more you do it,

319
00:11:32,801 --> 00:11:35,835
and the more consistent
you are, it becomes a habit.

320
00:11:35,835 --> 00:11:38,066
And me, I can't believe I'm
saying it . . . 10 years after

321
00:11:38,066 --> 00:11:39,937
doing a budget consistently—

322
00:11:39,937 --> 00:11:41,924
the free spirit—I don't
know what I would do

323
00:11:41,924 --> 00:11:42,893
without a budget.

324
00:11:42,893 --> 00:11:44,060
I'm not going to lie to you,

325
00:11:44,060 --> 00:11:46,667
my bank account did not
connect to EveryDollar

326
00:11:46,667 --> 00:11:49,096
for about two days, two days ago,

327
00:11:49,096 --> 00:11:50,838
and I could not track transactions.

328
00:11:50,838 --> 00:11:52,134
And I was like, I don't
know what is happening.

329
00:11:52,134 --> 00:11:53,215
I don't know what is happening.

330
00:11:53,215 --> 00:11:55,734
That would never have been
me 10 years ago, you guys.

331
00:11:55,734 --> 00:11:57,897
But that's me doing a
budget every single month.

332
00:11:57,897 --> 00:11:59,653
It becomes a part of who you are,

333
00:11:59,653 --> 00:12:01,337
and there's such safety in it.

334
00:12:01,337 --> 00:12:03,889
I'm telling you, the best
way to get ahead financially

335
00:12:03,889 --> 00:12:05,816
is to be intentional.

336
00:12:05,816 --> 00:12:07,742
All right, coming up next is a couple

337
00:12:07,742 --> 00:12:09,679
who had a tough time with budgeting.

338
00:12:09,679 --> 00:12:11,443
But they stuck with it,

339
00:12:11,443 --> 00:12:13,517
and they're going to share
their inspiring story.

340
00:12:13,517 --> 00:12:16,100
(upbeat music)

341
00:12:16,936 --> 00:12:20,019
- I felt trapped, like I had no say in

342
00:12:20,954 --> 00:12:22,627
where our money was going.

343
00:12:22,627 --> 00:12:25,406
- I just felt kind of
oblivious, you know. We'd get

344
00:12:25,406 --> 00:12:26,730
to the end of the month,

345
00:12:26,730 --> 00:12:28,966
and I'd be like, why do
we only have $100

346
00:12:28,966 --> 00:12:30,117
in our bank account?

347
00:12:30,117 --> 00:12:32,619
(slow music)

348
00:12:32,619 --> 00:12:34,670
- I've always been budget-conscious.

349
00:12:34,670 --> 00:12:36,152
I've always been aware of the finances.

350
00:12:36,152 --> 00:12:38,501
I've always sort of managed the finances,

351
00:12:38,501 --> 00:12:40,348
and it was easier to just do it

352
00:12:40,348 --> 00:12:41,594
and not talk about it

353
00:12:41,594 --> 00:12:43,643
and avoid any potential fight.

354
00:12:43,643 --> 00:12:46,664
So, it was just manage it and move on.

355
00:12:46,664 --> 00:12:49,101
I was just finally so fed up,

356
00:12:49,101 --> 00:12:51,709
and we had started
communicating better about it.

357
00:12:51,709 --> 00:12:53,764
- I think we both knew that a change had

358
00:12:53,764 --> 00:12:54,597
to be made.

359
00:12:54,597 --> 00:12:56,428
But I think I was a little more reluctant.

360
00:12:56,428 --> 00:12:58,818
It's not that I didn't want to budget

361
00:12:58,818 --> 00:13:01,871
or to make a difference.
It's just like, at the time,

362
00:13:01,871 --> 00:13:03,126
I didn't think it was necessary.

363
00:13:03,126 --> 00:13:07,679
But once we both got on
the same track, it really

364
00:13:07,679 --> 00:13:10,050
sort of opened the door for us.

365
00:13:10,050 --> 00:13:12,286
- Our income can vary
up to $7,000 a month,

366
00:13:12,286 --> 00:13:14,197
and that's crazy to try to manage.

367
00:13:14,197 --> 00:13:16,156
You can't just say what's my annual gross,

368
00:13:16,156 --> 00:13:18,011
and divide it by 12,
and then live that way.

369
00:13:18,011 --> 00:13:18,865
It just doesn't work.

370
00:13:18,865 --> 00:13:21,041
With our inconsistent income, it felt like

371
00:13:21,041 --> 00:13:22,839
we can't do anything about it this month.

372
00:13:22,839 --> 00:13:24,348
We can't. We don't have the income,

373
00:13:24,348 --> 00:13:25,628
so we're going to charge it.

374
00:13:25,628 --> 00:13:27,720
And then we're going to deal with
it when the income comes in.

375
00:13:27,720 --> 00:13:29,642
It took us a few months to figure it out,

376
00:13:29,642 --> 00:13:32,314
and the whole budget was completely crazy.

377
00:13:32,314 --> 00:13:34,404
Like, it was not even close
to where it needed to be.

378
00:13:34,404 --> 00:13:36,810
I had no concept of what
we were spending where.

379
00:13:36,810 --> 00:13:39,125
But we didn't add to debt that month,

380
00:13:39,125 --> 00:13:41,828
and that was such a
huge win for month one.

381
00:13:41,828 --> 00:13:44,048
- Once you've change your mindset,

382
00:13:44,048 --> 00:13:45,820
or even your collective mindset,

383
00:13:45,820 --> 00:13:47,506
and you really look at this as not

384
00:13:47,506 --> 00:13:49,218
that you're losing something, but

385
00:13:49,218 --> 00:13:52,283
that you're gaining something much bigger,

386
00:13:52,283 --> 00:13:54,762
which is like this piece of mind,

387
00:13:54,762 --> 00:13:57,257
it's a complete game changer.

388
00:13:57,257 --> 00:14:00,829
Now that we're budgeting, I
really feel more in control.

389
00:14:00,829 --> 00:14:02,664
It's done wonders for our relationship

390
00:14:02,664 --> 00:14:04,457
and for our pocketbook too.

391
00:14:04,457 --> 00:14:07,306
- Even though we have a
inconsistent income, I feel free.

392
00:14:07,306 --> 00:14:10,825
I feel like I have control
over where my money's going,

393
00:14:10,825 --> 00:14:13,285
and it honestly feels like
we have more money to spend

394
00:14:13,285 --> 00:14:15,741
because we're telling
our money where to go.

395
00:14:15,741 --> 00:14:17,780
(slow music)

396
00:14:17,780 --> 00:14:20,746
- Thank you guys so much for
coming on. I really appreciate it.

397
00:14:20,746 --> 00:14:25,315
So when we talk about budgeting,
it is a tough topic anyways.

398
00:14:25,315 --> 00:14:28,060
But you add inconsistent
income on top of it,

399
00:14:28,060 --> 00:14:29,710
and it's really difficult, isn't it?

400
00:14:29,710 --> 00:14:30,820
- Really difficult.

401
00:14:30,820 --> 00:14:33,298
- Yeah, so I'm in that boat. 
You guys are in that boat.

402
00:14:33,298 --> 00:14:34,544
So, let's talk about it.

403
00:14:34,544 --> 00:14:35,377
- [Sarah] Yeah.

404
00:14:35,377 --> 00:14:36,507
- You guys started budgeting.

405
00:14:36,507 --> 00:14:37,392
So I'm curious,

406
00:14:37,392 --> 00:14:39,464
what made you start budgeting in general?

407
00:14:39,464 --> 00:14:43,644
- So, we've always been
aware of how we should

408
00:14:43,644 --> 00:14:44,818
handle our money.

409
00:14:44,818 --> 00:14:46,401
But our most recent

410
00:14:47,426 --> 00:14:48,926
get serious moment

411
00:14:50,942 --> 00:14:52,054
just came from looking at the numbers

412
00:14:52,054 --> 00:14:54,143
and being like, we're done.

413
00:14:54,143 --> 00:14:56,416
We're going to buckle down on this again.

414
00:14:56,416 --> 00:14:57,515
We're going to make it happen.

415
00:14:57,515 --> 00:15:00,846
- Because we've been debt-free,
but then it all came back.

416
00:15:00,846 --> 00:15:02,031
- So, yeah.

417
00:15:02,031 --> 00:15:03,411
- Yeah, it came back.

418
00:15:03,411 --> 00:15:05,891
And, so you looked and
you said okay, we're done.

419
00:15:05,891 --> 00:15:07,144
- We have to get out again,

420
00:15:07,144 --> 00:15:09,516
and the budget is
the main tool. Right?

421
00:15:09,516 --> 00:15:10,349
- Yeah. It is.

422
00:15:10,349 --> 00:15:11,182
- To help you do it.

423
00:15:11,182 --> 00:15:12,634
So, when you started budgeting again,

424
00:15:12,634 --> 00:15:14,487
did you feel the freedom come?

425
00:15:14,487 --> 00:15:16,652
- Not at first. It's hard at first.

426
00:15:16,652 --> 00:15:19,239
You fall into the normal traps

427
00:15:19,239 --> 00:15:21,093
of well, with my income,

428
00:15:21,093 --> 00:15:22,162
I can't make this budget

429
00:15:22,162 --> 00:15:24,451
because this month is a slow month,

430
00:15:24,451 --> 00:15:26,572
and I don't even have
enough for the Four Walls.

431
00:15:26,572 --> 00:15:29,563
But if you look at the big picture,

432
00:15:29,563 --> 00:15:31,488
after a few months,

433
00:15:31,488 --> 00:15:32,779
it started to fall into place.

434
00:15:32,779 --> 00:15:34,615
- Yes. Okay, so what was the biggest hurdle,

435
00:15:34,615 --> 00:15:36,964
would you say, when it comes
to having an inconsistent

436
00:15:36,964 --> 00:15:38,106
income and budgeting?

437
00:15:38,106 --> 00:15:39,848
- I mean, it's all like the big changes

438
00:15:39,848 --> 00:15:42,714
that have to come, like all the small,

439
00:15:42,714 --> 00:15:45,093
you know, no coffee trips in the morning.

440
00:15:45,093 --> 00:15:45,926
(laughing)

441
00:15:45,926 --> 00:15:47,839
Just all the small,
little lifestyle changes—

442
00:15:47,839 --> 00:15:50,059
they tend to be a little
annoying at first.

443
00:15:50,059 --> 00:15:50,925
- [Rachel] Yes.

444
00:15:50,925 --> 00:15:54,011
- And then I think, when you really start

445
00:15:54,011 --> 00:15:56,458
to work at it as a team and focus

446
00:15:56,458 --> 00:15:58,110
and be like, hey, we're doing this together.

447
00:15:58,110 --> 00:16:01,099
We're making all these big changes now

448
00:16:01,099 --> 00:16:03,610
so that we can make bigger, cooler,

449
00:16:03,610 --> 00:16:05,352
awesome changes later on.

450
00:16:05,352 --> 00:16:06,226
- [Rachel] Yes.

451
00:16:06,226 --> 00:16:08,534
- And just get our family
in a more financially

452
00:16:08,534 --> 00:16:09,628
healthy position.

453
00:16:09,628 --> 00:16:11,943
- Totally, yeah. So when
you started budgeting

454
00:16:11,943 --> 00:16:14,009
and you realize okay,
the inconsistent income,

455
00:16:14,009 --> 00:16:16,163
it's a real thing. Numbers
are changing every month.

456
00:16:16,163 --> 00:16:18,357
We don't know how to predict
it, and then it's hard.

457
00:16:18,357 --> 00:16:20,840
How many months would you say it took

458
00:16:20,840 --> 00:16:23,578
to kind of get a footing—
kind of get your groove?

459
00:16:23,578 --> 00:16:25,045
- I would say probably about three.

460
00:16:25,045 --> 00:16:26,299
- Yeah.

461
00:16:26,299 --> 00:16:28,079
- And I don't think we could of done it

462
00:16:28,079 --> 00:16:30,186
if we didn't have all of the resources

463
00:16:30,186 --> 00:16:33,115
that we had and support
of people around us

464
00:16:33,115 --> 00:16:34,241
to help us do it.

465
00:16:34,241 --> 00:16:35,903
- Yes. So what resources were those?

466
00:16:35,903 --> 00:16:36,922
What did you use?

467
00:16:36,922 --> 00:16:39,976
- Well, we started with
your 14-day challenge.

468
00:16:39,976 --> 00:16:41,519
- Oh yes, the 14-Day Money Finder!

469
00:16:41,519 --> 00:16:42,500
- It was excellent.

470
00:16:42,500 --> 00:16:43,333
- Oh good, good.

471
00:16:43,333 --> 00:16:46,977
- That gave us enough to
create a little bump.

472
00:16:46,977 --> 00:16:49,260
So that was great getting us rolling.

473
00:16:49,260 --> 00:16:53,383
And then we got the EveryDollar
app and got it upgraded,

474
00:16:53,383 --> 00:16:56,347
and that has been super useful.

475
00:16:56,347 --> 00:16:59,140
Because before that, I was
literally writing down everything—

476
00:16:59,140 --> 00:17:01,658
like writing it down from
our bank account

477
00:17:01,658 --> 00:17:02,491
and it was ridiculous.

478
00:17:02,491 --> 00:17:03,324
- Yeah, it's hard right?

479
00:17:03,324 --> 00:17:04,157
- [Sarah] Yeah.

480
00:17:04,157 --> 00:17:05,104
- And you see the
convenience of this app—

481
00:17:05,104 --> 00:17:06,021
it's pretty easy.

482
00:17:06,021 --> 00:17:07,095
- [Sarah] It's so great.

483
00:17:07,095 --> 00:17:07,995
- Yes.

484
00:17:07,995 --> 00:17:10,988
So I know, I can speak
for Winston and myself

485
00:17:10,988 --> 00:17:12,050
because we did this.

486
00:17:12,050 --> 00:17:13,842
And it's like, some
months you're like, oh man.

487
00:17:13,842 --> 00:17:15,347
It's just lower than you're expecting.

488
00:17:15,347 --> 00:17:17,729
You have to go in change
the numbers, some months

489
00:17:17,729 --> 00:17:19,357
it's bigger, and you're like, that's nice.

490
00:17:19,357 --> 00:17:20,230
- [Sarah] Yeah.

491
00:17:20,230 --> 00:17:21,453
- Well, those months.

492
00:17:21,453 --> 00:17:23,228
So, do you still feel that you have

493
00:17:23,228 --> 00:17:24,709
to change it month to month?

494
00:17:24,709 --> 00:17:27,598
Because of not just life
changes within your expenses,

495
00:17:27,598 --> 00:17:29,848
but also because of your inconsistent income?

496
00:17:29,848 --> 00:17:34,134
- Yeah. I definitely think we
have to make a lot of changes

497
00:17:34,134 --> 00:17:36,814
and be very aware of not just

498
00:17:36,814 --> 00:17:38,127
what is in this month.

499
00:17:38,127 --> 00:17:40,245
But what do we have of like, 3 or 4 months

500
00:17:40,245 --> 00:17:42,516
down the road, that we
have to prepare for?

501
00:17:42,516 --> 00:17:43,349
- [Rachel] Looking at it.

502
00:17:43,349 --> 00:17:45,777
- So, yeah, and with the
income fluctuating,

503
00:17:45,777 --> 00:17:46,699
it's a challenge.

504
00:17:46,699 --> 00:17:47,532
- Yeah.

505
00:17:47,532 --> 00:17:48,875
- So, people that are
watching, they're like okay,

506
00:17:48,875 --> 00:17:50,066
so how are you doing this?

507
00:17:50,066 --> 00:17:50,899
- [Sarah] Yeah.

508
00:17:50,899 --> 00:17:51,732
- What would you say?

509
00:17:51,732 --> 00:17:52,565
Like what are a few tips like you look

510
00:17:52,565 --> 00:17:53,398
and you say.

511
00:17:53,398 --> 00:17:54,231
- [Sarah] Yeah.

512
00:17:54,231 --> 00:17:55,542
- I'm just going to
project as close as I can

513
00:17:55,542 --> 00:17:56,959
of what I think we're going to make here.

514
00:17:56,959 --> 00:17:57,792
- Yeah so the money we know is coming.

515
00:17:57,792 --> 00:17:59,279
- [Rachel] Okay.

516
00:17:59,279 --> 00:18:01,903
- Because sometimes we have freelance jobs

517
00:18:01,903 --> 00:18:03,880
or commissions that we
know are going to come in

518
00:18:03,880 --> 00:18:04,827
at certain times.

519
00:18:04,827 --> 00:18:06,342
And so those are projected out.

520
00:18:06,342 --> 00:18:09,548
And then I look forward on the assumption

521
00:18:09,548 --> 00:18:12,544
of, okay, there will be more.

522
00:18:12,544 --> 00:18:14,546
There will be stuff
we don't know of yet.

523
00:18:14,546 --> 00:18:17,629
You know . . . So, it's more of saying

524
00:18:18,506 --> 00:18:19,947
these are the things that are necessary.

525
00:18:19,947 --> 00:18:21,258
These are the things that come next

526
00:18:21,258 --> 00:18:22,831
if it comes in, and if not, we roll them

527
00:18:22,831 --> 00:18:23,664
to next month.

528
00:18:23,664 --> 00:18:25,737
And then these are the
things that come after that.

529
00:18:25,737 --> 00:18:26,887
And we're in Baby Step 2,

530
00:18:26,887 --> 00:18:28,921
so then everything else goes to debt.

531
00:18:28,921 --> 00:18:30,820
- Yes, so the things that are necessary.

532
00:18:30,820 --> 00:18:31,653
- Yeah.

533
00:18:31,653 --> 00:18:32,845
- For people watching, it's
what we call the Four Walls.

534
00:18:32,845 --> 00:18:33,678
- [Sarah] Four Walls.

535
00:18:33,678 --> 00:18:36,187
- You mentioned that
earlier. So food, shelter,

536
00:18:36,187 --> 00:18:38,502
utilities and transportation.

537
00:18:38,502 --> 00:18:40,631
- But some months still
it's not even enough

538
00:18:40,631 --> 00:18:41,599
for the Four Walls.

539
00:18:41,599 --> 00:18:44,366
It's important that I
have that, the little bit

540
00:18:44,366 --> 00:18:47,388
of bump already in our checking account

541
00:18:47,388 --> 00:18:49,548
so that I'm not going
all the way back into our

542
00:18:49,548 --> 00:18:51,695
emergency fund or something in the event

543
00:18:51,695 --> 00:18:52,771
that we have a slow month.

544
00:18:52,771 --> 00:18:54,173
- Yeah, I think that's a great point.

545
00:18:54,173 --> 00:18:55,688
Because on those slower months

546
00:18:55,688 --> 00:18:56,522
- [Sarah] Yeah.

547
00:18:56,522 --> 00:18:58,449
- you have to be able to make
sure your bills are paid.

548
00:18:58,449 --> 00:18:59,282
- [Sarah] Yeah.

549
00:18:59,282 --> 00:19:00,115
- And so you have to have that cushion.

550
00:19:00,115 --> 00:19:01,009
So, on the months that are good,

551
00:19:01,009 --> 00:19:02,187
setting some of that money aside

552
00:19:02,187 --> 00:19:03,533
and making sure you have
that cushion is such

553
00:19:03,533 --> 00:19:04,795
a pro tip.

554
00:19:04,795 --> 00:19:05,861
- [Sarah] Yeah. (laughing)

555
00:19:05,861 --> 00:19:06,694
- That's so good. So good.

556
00:19:06,694 --> 00:19:09,054
So someone watching—they've
never budgeted before.

557
00:19:09,054 --> 00:19:10,367
They think, okay, how to get started?

558
00:19:10,367 --> 00:19:11,200
- [Sarah] That's good.

559
00:19:11,200 --> 00:19:13,551
- Maybe they do freelance work. Maybe their

560
00:19:13,551 --> 00:19:15,414
income is so inconsistent.

561
00:19:15,414 --> 00:19:17,765
So, what's the number
one thing you would say

562
00:19:17,765 --> 00:19:19,415
you have to do is?

563
00:19:19,415 --> 00:19:21,837
- Track your expenses, because when you see

564
00:19:21,837 --> 00:19:22,896
where your money's going,

565
00:19:22,896 --> 00:19:24,484
you change where your money's going.

566
00:19:24,484 --> 00:19:27,205
- Like when you see that you're spending

567
00:19:27,205 --> 00:19:29,942
too much money at Chick-fil-A
every month . . .

568
00:19:29,942 --> 00:19:32,641
- You hurt my heart Sarah. You
hurt the heart a little bit.

569
00:19:32,641 --> 00:19:33,870
- It's always Chick-fil-A.

570
00:19:33,870 --> 00:19:34,703
- Yes.

571
00:19:34,703 --> 00:19:36,714
- You say, okay, we need to make Chick-fil-A

572
00:19:36,714 --> 00:19:40,950
an occasion situation and
not a convenience situation.

573
00:19:40,950 --> 00:19:43,339
Or you say, okay, I need to
start making my coffee at home

574
00:19:43,339 --> 00:19:44,877
instead of stopping at the gas station

575
00:19:44,877 --> 00:19:46,416
or at the Starbucks every day.

576
00:19:46,416 --> 00:19:50,247
- It's liberating to have
this feeling of control

577
00:19:50,247 --> 00:19:53,414
over what, like with all of the income

578
00:19:54,685 --> 00:19:56,483
that we just don't know and there's just

579
00:19:56,483 --> 00:19:58,993
this feeling of helplessness sometimes.

580
00:19:58,993 --> 00:20:00,689
Especially when you
get in those low months . . .

581
00:20:00,689 --> 00:20:03,051
And just being able to grab
some of that control back,

582
00:20:03,051 --> 00:20:07,367
and being like, this is
not going to change my mood.

583
00:20:07,367 --> 00:20:10,226
I'm not going to—we're not
going to—argue over money.

584
00:20:10,226 --> 00:20:12,883
Understanding that you're not telling me

585
00:20:12,883 --> 00:20:15,276
that I can't have coffee in the morning.

586
00:20:15,276 --> 00:20:17,619
You're just telling
me that $2

587
00:20:17,619 --> 00:20:19,121
every couple of days.

588
00:20:19,121 --> 00:20:22,091
You know, 52 weeks out of the year—

589
00:20:22,091 --> 00:20:24,478
that adds up to a lot of money over time.

590
00:20:24,478 --> 00:20:27,143
And seeing that I've been
doing it for 4 or 5 years,

591
00:20:27,143 --> 00:20:30,236
I'm like shoot, that's,
that's a vacation at the

592
00:20:30,236 --> 00:20:31,069
end of the day.

593
00:20:31,069 --> 00:20:33,402
Or you know something
important that we need to buy—

594
00:20:33,402 --> 00:20:35,336
school supplies, whatever.

595
00:20:35,336 --> 00:20:37,964
But I mean, it's got to be a team—

596
00:20:37,964 --> 00:20:39,149
it's got to be a team effort.

597
00:20:39,149 --> 00:20:41,445
- I love that. There's usually one spouse

598
00:20:41,445 --> 00:20:42,410
that's not always on board.

599
00:20:42,410 --> 00:20:43,446
I get that question all of the time.

600
00:20:43,446 --> 00:20:44,289
How do I get my spouse on board?

601
00:20:44,289 --> 00:20:45,122
- [Sarah] Yeah.

602
00:20:45,122 --> 00:20:47,235
And you did one of the
things I always tell

603
00:20:47,235 --> 00:20:48,703
the spouse that is on
board—usually the nerd.

604
00:20:48,703 --> 00:20:49,536
- [Sarah] (laughing)

605
00:20:49,536 --> 00:20:51,430
- Is to run the numbers
and to visually

606
00:20:51,430 --> 00:20:53,649
be able to see that this
is what's happening.

607
00:20:53,649 --> 00:20:55,839
So, would you say that helped you a ton?

608
00:20:55,839 --> 00:20:58,702
- For sure, 100%. I mean, being able

609
00:20:58,702 --> 00:21:01,197
to see the numbers and they might

610
00:21:01,197 --> 00:21:03,051
of done some floating and stuff like that.

611
00:21:03,051 --> 00:21:04,289
(laughing)

612
00:21:04,289 --> 00:21:06,842
But when you see the colors
help, she put deficits

613
00:21:06,842 --> 00:21:07,675
in red.

614
00:21:07,675 --> 00:21:11,387
I'm like, I understand colors
as an illustrator artist.

615
00:21:11,387 --> 00:21:12,495
I'm like, this makes sense to me.

616
00:21:12,495 --> 00:21:13,805
And there's a lot more red on here

617
00:21:13,805 --> 00:21:15,472
than there is green.

618
00:21:16,663 --> 00:21:19,166
- I would say, in those three
months of getting lined up,

619
00:21:19,166 --> 00:21:21,583
getting on the same page
was a big part of that.

620
00:21:21,583 --> 00:21:22,416
- Yes.

621
00:21:22,416 --> 00:21:24,447
And so, how's that changed
your marriage in general?

622
00:21:24,447 --> 00:21:25,944
- Oh, it's so much more peaceful.

623
00:21:25,944 --> 00:21:27,920
I mean, everybody fights about money.

624
00:21:27,920 --> 00:21:31,303
It's the number one
marital dispute is money.

625
00:21:31,303 --> 00:21:32,136
- [Rachel] Yeah.

626
00:21:32,136 --> 00:21:34,476
- So, that's been huge.

627
00:21:34,476 --> 00:21:35,309
- Yeah.

628
00:21:35,309 --> 00:21:37,580
- And the achievements
are our achievements.

629
00:21:37,580 --> 00:21:39,653
They're wins together, and that feels good.

630
00:21:39,653 --> 00:21:40,626
- I love that. You're like,
working toward a goal

631
00:21:40,626 --> 00:21:41,459
- [Sarah] Yeah.

632
00:21:41,459 --> 00:21:42,473
- And it sounds kind of cheesy to be like,

633
00:21:42,473 --> 00:21:43,626
set a goal together.

634
00:21:43,626 --> 00:21:45,951
But truly, when you are and you hit it,

635
00:21:45,951 --> 00:21:46,880
it's like we did that.

636
00:21:46,880 --> 00:21:47,713
- [Sarah] Yeah.

637
00:21:47,713 --> 00:21:48,755
- We did that as a team.

638
00:21:48,755 --> 00:21:49,588
- [Sarah] Yeah.

639
00:21:49,588 --> 00:21:50,421
- You guys. You are like . . .

640
00:21:50,421 --> 00:21:51,254
(laughing)

641
00:21:51,254 --> 00:21:53,871
- It's amazing. It's
amazing just seeing people

642
00:21:53,871 --> 00:21:55,781
that stick to the plan. They do it—

643
00:21:55,781 --> 00:21:57,305
persevere—even when it's hard.

644
00:21:57,305 --> 00:21:58,757
- And there's a month that it's like,

645
00:21:58,757 --> 00:22:00,020
what in the heck are we doing?

646
00:22:00,020 --> 00:22:01,366
But you stick with it because at the end

647
00:22:01,366 --> 00:22:02,365
of the day, you're
getting that peace. You're

648
00:22:02,365 --> 00:22:04,298
getting that control.
And ultimately, you guys

649
00:22:04,298 --> 00:22:06,741
together have a stronger
marriage because of it.

650
00:22:06,741 --> 00:22:09,111
- So, you're like a
living testimony to it.

651
00:22:09,111 --> 00:22:09,944
(laughing)

652
00:22:09,944 --> 00:22:10,908
So, really amazing.

653
00:22:10,908 --> 00:22:12,918
Seriously, thank you
so much for coming on.

654
00:22:12,918 --> 00:22:13,938
- It was our pleasure.

655
00:22:13,938 --> 00:22:16,424
- It's just filled with hope,
and you're doing exactly

656
00:22:16,424 --> 00:22:17,708
what you should be
doing, and I'm loving it.

657
00:22:17,708 --> 00:22:18,541
(laughing)

658
00:22:18,541 --> 00:22:19,374
- Thanks for having us.

659
00:22:19,374 --> 00:22:20,486
And I'm glad you're getting the wins.

660
00:22:20,486 --> 00:22:21,319
- That's the best part.

661
00:22:21,319 --> 00:22:22,152
- Yay!

662
00:22:22,152 --> 00:22:23,614
- All right, you guys, we
mentioned it like eight times

663
00:22:23,614 --> 00:22:24,447
in there, but it's true.

664
00:22:24,447 --> 00:22:27,036
EveryDollar Plus, if you've not checked out

665
00:22:27,036 --> 00:22:28,371
that app, make sure you do that.

666
00:22:28,371 --> 00:22:30,428
Now, if you sign up for
Financial Peace University,

667
00:22:30,428 --> 00:22:32,090
you should get the app for free.

668
00:22:32,090 --> 00:22:34,220
So make sure that you do
that, because it's going to help

669
00:22:34,220 --> 00:22:36,219
your budgeting journey
be so much smoother.

670
00:22:36,219 --> 00:22:38,802
(upbeat music)

671
00:22:43,696 --> 00:22:46,074
- Man, I love that Sarah
and Cory stuck with it

672
00:22:46,074 --> 00:22:47,498
and got their money under control.

673
00:22:47,498 --> 00:22:49,848
And they figured out how
to make their budget work.

674
00:22:49,848 --> 00:22:52,236
Now, if you have irregular
or inconsistent income,

675
00:22:52,236 --> 00:22:54,252
I have a worksheet in the show notes

676
00:22:54,252 --> 00:22:55,938
that will help you budget for it.

677
00:22:55,938 --> 00:22:58,156
Now, don't forget to subscribe to the show

678
00:22:58,156 --> 00:23:02,403
and to my podcast. Just
search The Rachel Cruze Show.

679
00:23:02,403 --> 00:23:04,702
I hope you guys found this episode helpful,

680
00:23:04,702 --> 00:23:07,495
because once you get
budgeting down, everything else

681
00:23:07,495 --> 00:23:09,585
works so much better.

682
00:23:09,585 --> 00:23:12,833
As always, remember to take
control of your money

683
00:23:12,833 --> 00:23:15,166
and create a life you love.