Different Approaches to Budgeting #176

methods of budgeting. Depending on your personality, right, just depending on the type of person you are, there's gonna be some what your anagram number is, that's actually what we should have called it, like anagram budget. You're really into that, aren't you know? I'm not my wife is I'm not? Well, you keep calling me, uh four? Is that what you say? I am? And you're you know you're a five? I think five. But literally, I only know that because of

what other people say about types. I haven't read a book listen. I listened to one podcast episode because my wife asked me too, but like, you must listen to this. But other than that, I don't know what they're about it. Yeah. The fact is, if you have tried to budget before and have failed, I think there's a good chance that maybe you try to budget in a way that didn't necessarily fit to how you naturally think about things. And so that's what we're gonna talk about this episode. Yeah,

we personal finance is personal for a reason. We all have like things that click in our brain make more sense to us. And so if we can talk about budgets and help people find a way of budgeting that makes sense for kind of how they think about things, then we want to do that because we want people to master their money, no matter what their personality type is, no matter what their tendencies are. But Matt, before we get into that, I saw recently that our good friend

Warren Buffett are Yeah, are good, buddy? Pause, He's on speed out. He's in my t mobile phave five. He's one of my favorites. Yeah, he just ditched his flip phone. He finally went to a smartphone for the first time at the ripe old age of eighty nine. Nice. He got with the times. Man, he's gotten too old to teach the dog new tricks. You have the newest version of the iPhone, I think, so where you go? Good

for him? But man, how cool is that this guy who's one of the richest guys in the world, and he says, you know what, I don't I don't need the trappings of new technology. I don't need the latest and greatest. And he's just kind of that. He's that kind of guy. He's lived in the same house for like fifty years or something, and he's been rolling with his flipphone for such a He's a stubborn old man, is what it sounds like, Like how much how much of that is himning frugal versus you know, him not

wanting to learn the new technology. That's a good point. But the fact is, though that he is older than he was and he's just like, dang it, I guess I'm gonna have to learn the new technology. I could see him in his office playing candy Crush, like just swiping all over the place. Right. It does make me not feel so great about rocking my iPhone se which I still am. By the way, I've got I got, I got the iPhone sc and I kind of wear it as like a badge of honor, the fact that

I still have this crazy old iPhone. But you know what I mean, it still works. I still take really good photos. With it, throw pictures up on Instagram, take pictures of the kids. It still makes phone calls, maybe more than maybe Warren would trade with you. He doesn't care, yeah, because he's like, I don't really need it, Like I'll take an older version. That's fine. But it's funny too because what his company, Berkshire Hathaway, owns like over five

of Apple stock. So I'm sure he would have thought that they would have like thrown in a free iPhone right in there, right, and maybe maybe they did. I don't know, but I mean, I don't know. I just

appreciate that. I think we can all learn a lesson from someone who has, you know, more money than they could ever spend more money than they know what to do with, and yet they still live simply that That's something that that I strive for, no matter where I'm at in my earning cycle, no matter what my life looks like, I want my life to have simplicity to it. And so, yeah, I don't know, I respect him for that.

And by the way, one other thing that he said recently at their the annual shareholders meeting of Berkshire Hathaway is he said, you should think about buying stocks as buying a business. And I think that specifically that the change of phrase, using terminology in that way, it can really frame things appropriately for us. And so I loved what he said there. Instead of saying I'm buying stocks, say I just you know, bought a portion of a business today. I like that approach. I think it makes

a lot of sense. Yeah, I think that the temptation with stocks is that you you buy and sell right like.

That's that's that's what he's fighting against our day trading people who are getting in and out of the market quickly, because that's when you lose when he's looking for value inequity within the business and people aren't buying businesses and selling businesses left and right, although folks do that with stocks, And so I agree, I think that's a great way to frame it, except that you're buying a business that you don't have to tend to, which is like, sounds

like the best kind of business down in the easy button on that business purchase. Yeah, all the way, man, Let's go ahead and introduce our beer for this episode, we are drinking another beer from Goose Island. This is Bourbon County Wheat Wine Ale and again This one was sent to us by listener friend of the show, Alex, So thank you so much, Alex. Yeah, all right, Matt,

let's get onto the subject at hand. We're talking about different approaches to budgeting, and we're not going to dissect anyagram numbers here, but we are going to talk about, you know, how people can figure out what budget is going to work best for them, because in all likelihood you need some sort of a budget. But budgets are

often viewed as like a four letter word. I envision people screaming budget when they stub their toe, as opposed to you know, another unsavory words would be a curse word for you, right, budget, But only couples keep a written budget of any kind, and I can't imagine that the numbers are much higher for single folks either. So let's say you do find the audacity to start creating a budget. Well, there are so many different ways that

you begin, and that can be overwhelming for folks. Right there, there are different apps that offer to help us in various methods, and different money experts claiming that they're gonna be able to help us actually stick to it this time. So Matt, I think it's our goal on this episode right, to make budgeting a little simpler and a little more

approachable for people and how they live life. In this episode, yes, completely man, Most people like they buck at the idea of starting or you know, keeping and maintaining a budget. But we want to help you read lines that budgeting can actually help you achieve your greater goals and provide you with some piece of mind when it comes to

your money situation. Budgeting can help you live within your means and achieve your goals that you've never been able to and maybe it can help you avoid the fights that plagued your relationship when it comes to money. And also, you know, like we said, we're not only just going to highlight the benefits of budgeting, but we're gonna show how it can look different based on the different personality types,

based on your personal preferences. Yeah, and the biggest reason for any of us to budget, the whole reason behind it, is that budgets help us achieve our goals. Right, because money is a limited resources for most of us except for our friend Warren, but we all have to prioritize and to put money towards the different goals that we

each have. So it's important for us to focus on those greater wise behind our money, like why we do things what we want for our life, and then letting our money kind of fall in line with those greater goals before we take a deep dive into the actual specific numbers. So, Matt, let's go over a couple of the common goals and reasons that people do find themselves in need of a budget. And I think the first one is kind of out of complete necessity, right, just

just to be able to make ends meet. Budgeting is a crucial factor for a lot of people who have to stretch the dollars that they make in a given month to fit all the needs that they have in

that very same month. Right, And so even if you have a steady W two job, if there's not enough money to go around, a lot of folks will will need to find discipline inside of a budget with their money in order to just survive, just to be able to put food on the table, pay rent, and make sure they have gas to fill up their car to get to and from work. So yeah, just to avoid going into debt, to be able to make ends meet every month, let alone to achieve you know, potential other goals.

Budgeting is just a necessity for tens of millions of Americans. And so if we can get some of those people on the budgeting track, I think we'd be we'd be happy, right absolutely, man. And you know, in addition to folks trying to get by, there's a lot of folks as well who are in careers where they're not on a fixed wage, right, Like, it's important to make a plan in order to have enough money to invest, save, and spend.

There is incredible flexibility, right that I personally absolutely love as a freelancer owning my own business, but the income is flexible as well, and that can really be a challenge if you don't have that steady paycheck coming in every two weeks. Yeah, Matt. And another reason why budgets are are such a good thing to have for so many people is to save up for those bigger goals.

And I think so many times without a budget, we see what we bring in every month, and we kind of dole it out every month to the things that seem like the most urgent. And if we do that, we avoid being able to save and invest for longer term goals that we have saving up for a trip, or a new car, hopefully a new use car, but uh, but down payment on a house. I mean, most folks default to spending every single penny they make, and sometimes

more going into credit card debt. And while those immediate needs and wants can be put on credit cards, this is a dead end path, right because you can't put your hirement on a credit card. And so for folks that find that they constantly have to put their larger goals on hold, well, a budget is a perfect solution for someone like that. Yeah, totally, man. We know we talked about how achieving goals is one of the biggest reasons that we budget, but specifically achieving savings and financial

goals is is such a huge part of that. Personally, for me, one of the reasons I like the budget is just having an understanding and having knowledge about what

I'm spending my money on. Right, Like, some folks are a little nerdier like me, and they'd like to know all the details, and so I know, for me, when I'm able to understand and wrap my brain around the big picture, I'm able to stick with whatever plan I've you know, decided I'm gonna do because I understand the why behind that, right, And so for me when I budget, if I know why it is and how it is i'm doing this and I can I'm able to kind of see it from the start all the way to

the finish, I have a much better chance of completing that and seeing it to the end. I remember being a kid and I would ask my parents why a lot, as most kids do. I could especially see you being the white kid why, And yes that I was just much more likely to actually obey or follow through when something when I knew like why I was doing it. And I think all of us have a little bit of that to ourselves, right, and so much more than others.

But the more we can understand kind of how things work, why we're doing it, what direction we're going in, the easier it is to actually follow through on that thing. And so, yeah, sorry mom and dad that I was that kid. It's like, well, why, it's because I said so. Maybe later I'll explain it to you. Definitely douse that

at some point in my parenting already. Uh well, And another great reason for folks to start budgeting as well as to avoid money fights, right, if you have a significant other, budgeting can get you both on the same page. It's easy to talk in generalities, but money is a very specific and concrete thing, and so there's no better way to talk about the specifics of money than with a budget. Like that's speaking money is a budget, right,

Like you want to learn how to speak money. It's a budget, Like that's the textbook easiest way to communicate

about it. Yeah, but just can really improve how you communicate about your money with a signal again other, Yeah, we've received a listener email recently, so I'm talking about how budgeting is actually really helped change their life and their their dynamic as a couple, and that the budget has essentially been that place for them to be able to communicate well about money, and money is kind of the the diving off point to be able to talk about bigger goals, the things that you guys want to

achieve together. And so, yeah, I just enjoy getting emails like that because it's really fun to see that money has this much greater impact beyond just the excess and the ohs, beyond the dollar signs and the decimal points. That being able to as a couple communicate well about money has led to just increased clarity in their discussions on a lot of topics in their marriage. That's awesome, man, right,

I know, yeah, so cool. And I always enjoy seeing how talking about money well and a budget being that exact thing helping you to be able to talk about money well actually leads to good conversations for couples in all these other areas of life. For sure, it's really encouraging to see budgets being talks about as something that rings a couple together, not as something that like one

is hitting the other person overhead with, right exactly. And I think the reason that a budget can be especially helpful for couples as well is because essentially, like all it is is a plan for your money. Like it's a plan that you both agree to or that you just agree to yourself if you're single, but it's something that you've created to help you achieve your goals, right,

whatever those goals might be. It's just an intentional approach to what you're going to do with your money so that you don't get to the end of your working career of your lifetime wondering where all of your money has gone. And that's easy to do. I mean, I know that we feel that which is like the hours in our day sometimes that we we waste them more like what did I even do today? I think I

especially remember some of those days when I was younger. Well, now I've got kids pulling on me, a lot of stuff to do, but I totally remember the days like that in my early twenties where I don't know what I got accomplished that day, but you're like, it's six thirty. I guess it's time to eat. Yeah, and and so yeah.

I think the same thing can definitely be true of our money, that if we're not thoughtful about it, if we don't have kind of a plan, we can waste that money and miss out on the bigger goals that we that we have that are buried underneath that we just haven't even gotten around to finding out what they are. Sometimes, And Matt, that plan is the budget. And we're gonna talk more about that and get into kind of specific budgeting styles for different personality types right after the break.

All right, we're back in the break, Matt. We're talking about budgeting and different approaches to budgeting. One approach would be to not have a budget at all. That doesn't really sound like a method or an approach. It is an approach some people take, and I guess it begs the question, though, are there people who don't need to budget? And so I think you and I actually kind of

disagree on this point, so let's hash it out. I would say that, yes, there are some folks, a small sliver of folks that can get away with not having a budget. I think budgets are best at helping us put our money towards the areas that we value in life, and they can be a pivotal part of of increasing

what we save and invest. But if you are kind of this natural saver, someone that generally likes to max out there for oh one k, who's always looking to put more money aside, you might not need a budget. And and Matt, that was that was kind of me before I got married, was I I didn't feel like I needed a budget because I felt like I was naturally just looking for ways to save more of my money and invest for the future, and so taking the time to create and stick to a budget just didn't

feel necessary for me. And again, I don't think that this is something that is applicable to most folks out there. I think most folks need a budget, Like, they need that to build communicate with their spouse, and they need that to allocate their money in a way that aligns with their values. But I think for a few people at least, not budgeting can be a method that makes sense. All right, Matt, I see you roll in your eyes, So tell me why I'm wrong. Well, here's the thing.

I don't think it necessarily has to do with, you know, whether or not you are saving or seeing enough money, right Like, So I would argue that everyone needs to have a budget. Most Americans have a really tough time saving and putting enough for their income towards retirement. Like, that's one of the biggest reasons to budget, right, That's what we've been talking about. But let's say there is someone who is one of the rare folks who is frugal and saves a ton of money. Right, retirement is

getting maxed out. Extra money is going towards other investments. Maybe money is going towards smart real estate deals. And so in this example, I would argue that the budget needs to be there not to get that individual to save more, but to spend more of their money, right, Like, chances are if that you were to sit that person down and ask them, like, what are the important things

in your life that you value? Like they'll name a few things, and then I would ask them if they're spending their money in a way that reflects those values, right. It's like, so, for example, a lot of folks will

say that they value friendship or relationships. I think that's one of the ways that folks who are super savers and who are really unto the money might get carried away and they're like, oh, you know, like I don't want to go out for drinks because I'm trying to I'm trying to say, Or they're like, I don't want to go on that vacation because that's gonna that's gonna put my five date, my financial independence date back, you know, it's gonna push it down the road another year, like

that kind of thing. But if you ask them like, is this something that's valuable to you? Like is this important? They would say yes, and and so it would It takes sometimes, I think a budget to highlight that, Like there are lasting memories that you might be missing out on were you to to skimp in those situations. See, that's why I like you. I like being your friend because I feel like you bring a perspective sometimes that I don't have. I'm trying to get you to spend

your money, well, not you specifically. This is a hypothetical, right, but I mean that that honestly, that kind of like was me for a while back in the day, and I feel like having a budget, talking about it with Emily and are us having shared goals together, it's been really really helpful. And now it would be hard for me, you know, to to live life with that one because I do feel like it informs kind of the values that I have and it does force me in a good way to spend money on the things that do

matter to me. And that is something that I like you and I we we fight for for people. We want people to experience that where they are able to save and invest well for the future while well also spending money today on things that they care about. Right, I mean, that's that's the magical place. That's a good place for people, and that's what a budget can, I agree,

really help people do. Yeah. I feel like so much of of what I guess I'm trying to communicate here is that, uh, folks see budgets as being something that that are restricting, right, but in reality that I'm trying to like flip that around and trying and turn it around for folks and say, like, no, there's freedom in

a budget. And I've seen this specifically with my wife Kate as well, Like she feels and she's always felt this way, but she'll feel a little guilty for spending money because she knows that, like, oh, I know I could save this and that would be a smarter thing

to do. But if we've identified that, like, no, this is important for us to do, this is something that we want to put our money towards, well, then if you look at the budget and there's still money left, there should be complete freedom to spend that money and not feel guilty about it at all. Yeah. No, I

love that, all right. So let's talk about the other methods besides the non method of not budgeting that we've kind of thought out here and and and we What we're trying to do in these is trying to ascribe kind of a personality style and kind of what budget might be best for you. So let's go through them. The first one we want to cover is kind of like the newbie budget, or if you are kind of new to the game, you've never really created one before,

and you have no idea where to start. Well, then we would suggest considering a fifty budget that's probably best for you. That means that of your budget is for your needs, is for your wants, and twenty of your

budget should be dedicated towards savings. This is kind of like a less rigid approach and can kind of act as like a guiding light if you're looking to keep things simple, because we can make budgets as simple or complex as we like, and if you're new to the game, keeping it simple with UH with essentially three main categories, that's just kind of a good way to ease yourself

in to the process of budgeting altogether. And at the same time, apps like Mint and Wine app can help you keep track of your spending to make sure that you're sticking to the budget that you've set up for yourself. Yeah. What's great about those apps specifically too, is like there's a good amount of automation built in, but then as you kind of progressed down the path, you can get

a little more advanced, kind of complicated with it. As needs arise, you can personalize it and so you know, like you said, so that's maybe for someone who who doesn't know where to start. Well, maybe like you're someone who just really doesn't like the numbers, right, like maybe

you're more of a free spirit. You can simplify things even more by going with the eight twenty budget, and that's where you're setting aside of your income towards retirement and then everything else, like, well, it doesn't matter what you spend your money on, like it is completely up to you. You've already prioritized what's arguably the largest financial goal of maybe being financially independent at some point, but otherwise, like you get to do what you want with your money.

And so an easy way to implement this is that if you have a job as a four o one K, well, you can increase your contributions towards your four oh one K to that percentage you know, And we say, but it just depends on where you are, Like maybe for you that's just ten percent for now, uh, and then slowly over time you can crank that up to fifteen. That's up to you. But what we're trying to point out though, is that we want you to prioritize saving

for the future without too much complexity. We want to make sure that you get that one thing right and then everything else. It doesn't really matter so much as long as you're surviving. You just want to make sure that you're taking care of those long term goals. It's also worth mentioning Joel that, to you know, operate with the uh the free spirit budget, you're operating from the

standpoint of having enough money. Not everyone has enough, and so if this is you like, realize that this is a bit of a luxury to say I'm just gonna worry about retirement and then I'm going to spend my money on whatever else I want. That's not the case for most folks. Yes, the pre spirit budget a ka that treat yourself budget right or you're still at least at minimum prioritizing that timber cent contribution. Yeah, like it does your future self because you need that exactly it is.

I guess what we're pointing on here is that it doesn't have to be more complicated than that, at least for now. I think over time, as your budget becomes slightly more sophisticated, that can be a healthy thing. But that this is a great first step. All right, let's talk about Matt. Probably the category you fall into, just just to guess, is the type a budget. And we think that a zero based budget makes a lot of sense for the person who wants everything lined up down

to the penny. Right. So if you're highly organized and great with spreadsheets, you can use those strengths to really make your money work for you by giving every single dollar a name. Yeah, man, this is me all the way. I am all about this sort of highly mechanized process of of handling my money. Uh. And the biggest reason for that is because I'm able to remove emotions from

the equation. Right, Like when you have this this process basically in line where you don't really have to think about it, you follow the rules that you've you know, predecided ahead of time. Uh, it removes human error from the the equation. And that's what I love about having a budget this way. That's when you become like Ivan Drago and Rocky for You're you're basically like a robotic version of a human. Yeah. I love that, like punching machine.

You don't need emotions, right exactly, just train hard every day, eight hours a day. No, I mean, it's it's true. But for people that have that kind of personality that really that need the specifics to be on point in order to feel comfortable about things. I think a zero based budget makes a lot of sense because you're you're able to to usher everything that comes in to a specific category, and I think that brings a lot of calm, a lot of zen into people's lives. Who who's speaking

my language? Yeah, you thrive basically on the ability to know exactly what's coming in, exactly what's going out and where that's going. And you know, if if you were trying to get a type a person to do a free spirit kind of budget, that would make them to go bonkers vice versa tough time with that, right, And I think that that's why these different kind of personality types and budgeting accordingly is so helpful. Yeah, everything is

in its right place, man. And with a zero based budget, you have the added benefit of being able to see exactly what you're spending your money on, and you can see trends over time as well. Recently, we look back at our spending and because I've been known this for a decade now, like we were literally able to compare what we spent at the grocery store to the past, you know, thirteen years, which is but I mean, I think it's totally awesome. I think maybe other people think

that that's insane, but I love it, dude. I feel like we could use your budget track overall national inflation,

you know, like in every category. Uh, you want to hear something that's really interesting though, by the way, like specifically to grocery, Like why I brought that example up, please tell me is because so obviously we saw we've seen our our grocery budget go up over time, but I've also calculated the overall budget per person and not surprisingly, such a nerd um, we are still spending just about the same amount that we're spending when it was just

me and Kate proportionately to the size of a family because you only feed your children one meal a day, exactly one meal, just like Kate and I eat no snacks. But for real, like we we've seen an increase by the number of you know, members we have in our family, which is really cool. It's cool to see that that is one area in our life that we have not seen inflate at all, when there have been other areas

that have inflated, right, like entertainment. We've seen that go up over time for you know, various reasons, but it's really cool to see some specific areas like grocery. We're kind of really sticking to like our original roots, which is a lot of fun. Yeah, yeah, that's that's impressive, dude. All right, Let's talk about the next budgeting method that works for a specific personality type, and that is the

over spender. So if you tend to spend too much and bust your budget every single month through credit card spending or or even just spending on your debit card, and you're getting over draft notices and having to pay extra money to the bank because of that, well, then

the envelope budgeting method might be best for you. The way that it works is to have actual physical envelopes that you fill with the money every month at the beginning of the month for categories like eating out, groceries, clothes, and whatnot. So it's it's pretty straightforward and it helps you actually stick to your budget because there is truly

a finite amount of cash in these different envelopes. Matt, I've never actually done this, but for somebody who is battling the temptation to overspend consistently because they just can't keep the plastic out of their hands, and they're racking up credit card debt because of it. I think going to something as strict as the envelope method, uh specifically, that's a really good way for the overspender to kind of combat those urges and to to be able to

actually stick to a budget. Yeah, and I think a lot of folks might laugh at the idea because like, what are you gonna carry around like five different like paper envelopes? But so old school and it it is old school. But I wanted to mention that there are specific special wallets made, you know, exactly for the envelope

budgeting system. They've got their little dividers in there, and you can slide your bills in there that you're not like walking around with, you know, wads of cash like folded over on themselves, like stuff in your stuff in your back pocket. I gotta imagine that's a thick wallet though. But but yeah, I mean, I think the envelope method is is certainly not ideal. And you know we talk about how you know we prefer if you can use credit cards, Well we we much prefer you to use

a credit card over overpaying in cash. There's just a lot of advantages to to using credit cards instead of cash. But desperate times call for desperate measures. And if you are a person who is tempted to overspend consistently, then then you have to resort to a budgeting method that is going to act actually help you live within your means. And I think the the envelope method is is definitely one that you should strongly consider. If that's the case,

most definitely a man. And let's let's cover two as well. This isn't necessarily a personality type, but I wanted to cover if you have a variable income, whether your income is steady every two weeks or if it bounces around throughout the year, budgeting is still going to be important for you. You you might just need to use a slightly different technique or maybe a combination of some of

the different techniques that we've mentioned. But I think one of the most important things to do is to make sure that you have some financial margin in order to weather these ups and downs of having a variable income. Just because you have a variable income, I don't necessarily think that means that your expenses need to go up and down based on your income. For most folks, they know that it takes a certain amount of money to live, right like month to month. I know that this is

this is what it takes for us to live. And so when you have enough margin built in, when you have an emergency fund, like that's just what we call our cushion, our margins, just our emergency fund. When you have that there, you're able to weather those ups in the downs, and you're able to kind of even out your income because you know that, like okay right now, And dude, I'm saying this out of experience. This month for us super lean. Not a lot of folks are

getting married this time of the year. Uh in Atlanta, and I had to take two thousand dollars out of our emergency fund. Maybe they aren't, they just didn't book you. Dude, Hey, you know what, maybe that's the case. I don't think we're not talking about that, but I know that next month is going to be fantastic, and so having those funds set aside to to get us through, you know,

a leaner month, that's all you need. Like it would be kind of silly to say, oh, no, we need to really cut back this month because we don't have the right income when we know that next month is going to be more than enough. Yeah, man, I completely

agree with you. You know, I think that financial additional financial margin is super helpful for for folks who live life with variable income and and then you know what, the lean month, you've got the money to to fund your lifestyle for that month, and then the next month you make up for it with your increased income, and you'll be able to put that additional income back towards that cash cushion and replenish it most definitely. Yeah. So I'm glad we were able to talk about some personality

types and how different people can approach budgeting. But Matt, there are also some kind of universal principles that we need to talk about that really apply to anybody doing any of these different budgeting methods, and we'll get to some of those right after the break. All right, Joe, we're back from the break. We're talking about some different

methods to budgeting. So the next step is to actually create a budget for yourself with real dollar amounts, right regardless if you're the person who has a plan and thinks you know exactly what your category amounts should be, or if you are completely clueless and have no idea where to start. If you're either of these people, I think regardless, everyone should begin with tracking their expenses. All you need to do is look to last month's spending

and start there in order to be successful. The idea here is to start with numbers that are going to be realistic and are gonna get you close versus pulling you know, random numbers like out of the air. And then maybe halfway through the month, you know it's the fifteenth thing, you look down and you realize, oh, we're over budget already. Well that's not fun. Oh I was way off exactly. So if you're if you're going to fail at somebody, nobody wants to do anything that they're

going to continue to fail at. So set yourself up for success and be realistic. Yeah, you're gonna drop that budget quick if that's the case. So all right, Yeah, I agree tracking is huge, Matt. I think auto tracking is an easy way to do it, and of course I think it's the way a lot of us are going to choose to do it because there are apps and tracking software that can really kind of aid us

in this process. And we mentioned wine app and Mint earlier and those are kind of the top tier apps when it comes to budgeting and helping you do do better and and auto tracking what you're spending and helping you keep that budget, and it requires less personal monitoring to make sure expenses or categorized properly. There's even the service called Tiller Money. I don't know if we've talked about this before, but they will automatically import expenses into

Excel or into Google sheets to to save time. I personally don't use it, uh, and that's primarily because of the acts of actually manually entering these expenses in like that can help me to realize and you know, truly

feel those expenses. We've talked before about how automating your money there's a lot of benefits to that, but what we kind of want to shy away from is automating all of our expenses because you know, like for a lot of us, if we don't see it, like we don't really think about it out of sight, out of mind, and so if we are not looking at what we're spending our money on, sometimes it can be hard for us to make those changes and make sure that we're spending our money on the things that we want to

be spending our money on. Yeah, man, And speaking of writing things down, you know, there's a Japanese budgeting method if we're talking about manual tracking. We just talked about auto tracking and how those those apps can help you. Well, if you do it manually, I think there's there's a great deal of benefit we can derive from that to This Japanese budgeting method is called kakaibo. I think that's right. Okay,

all right, that's my guess. And yeah, I think that what it does is it prioritizes actually physically putting pen paper and writing things down, keeping a written record of the things you've purchased and what you're doing with your money. And there's such a powerful association that's made in our brains when we put pen to paper. That's why people journal, That's why people keep a diary. I mean, essentially, this

is like an expense diary. You're writing down all the different things that you spend money on, and it's it helps you to reflect on those things. Yeah, And I think where you come down on this, I think it's gonna come down to your comfort level with technology, like your personal comfort level whether you use apps frequently and and they kind of fit into your lifestyle or whether you kind of write things down is going to have more of a sustained impact and ability to help you

stick to your budget. What I mean, whatever is going to help you the best, whether it's more automatic or whether it's more manual, we definitely want you to go in the direction that is going to most allow you to actually stick to a budget and keep doing it month after month. It also depends to you on how much of romantic you are, right, Like if you if you have an old soul and you want to have like a scroll with like a fountain pen, you know, like,

if that's what works for you, go for it. I've got this old peach of piece of parchment paper from ancient Egypt, and that's where I keep my budget every month. Papyrus and that like the original paper was like papyrus. Yeah, this is not just like that crappy font. Also keep my budget in hieroglyphics too, so that random people that peek at my budget they don't really know what it means. But also to Matt, another app by the way, that can be helpful to people. We've mentioned it before in

the show A couple of times. Dollar bird, and that's kind of like a monthly It almost combines these two things of kind of a manual budget keeping technique by tracking expenses on a calendar. And and so yeah, we love that app too. It's it's really neat. Whatever works best for you, that's what we want you to do, though.

And let's real quick talk about budget busters, right starting with your previous month's expenses, like we just mentioned, like that's a great way to get started with those realistic numbers. But then don't stop there. Make sure that you are looking at prior year budget busters, those big expenses that only occur maybe once or twice a year. And then once you identify those things, you want to start saving

monthly amounts for those now. So for example, what I'm thinking of are some of the different insurance premiums that you have, or or car maintenance that always kind of creeps up when you at least expect it. And it doesn't have to be like crappy things as well. It can be fun things like saving up for Christmas or birthday presents, or maybe going on that vacation, Like you know that you're you're gonna want to go on a trip, start saving for that now, so it doesn't totally can

completely wreck your budget when the time comes. Also, you have to be flexible with a budget, right. A budget doesn't necessarily rigidly conform, even for the type a budget or who has a zero based budget. Even those folks know that the budget doesn't always go according to plan. Even though we zero based budgets might strive for perfection, doesn't always end up perfect. Right. You're not gonna be able to do it every single month, that's for sure.

And that's because no month is completely normal, and so it's really important to address your overspending quickly. Yeah, and so that if that happens to be you, like, all you need to do is just move that budgeted money from one category over to another in order to ensure that you're not going over for the entire month. It's not a huge deal money, it's fungible. Just because it had one name on it at one point doesn't mean you can't switch it up and slide it over to

a different category. So, for example, maybe you overdid it unclosed this month, Well, it's not a big deal to cut back on eating out in order to make up for it. This will help you to master your budget and to make it more fun because it's something that you're actually succeeding at and when you're winning at something, that will also make it way more enjoyable. Yeah, for sure.

And I think when I think about budgeting at its core, essentially it's imposing at least some amount of current hardship on yourself so that hardship doesn't get imposed on you by outside forces in the future. By budgeting well and spending less than you make, you'll much more easily avoid the real money hardships that so many people have to

deal with in life. And I think if you can find the budgeting style that works best for you, and you can find a way to make it work for you when it comes to the way you track and being flexible with that budget, we truly believe that you can have a much greater sense of control over where

your money is going. You can be happier about where you're spending your money and even the places that other people might look and say that's ridiculous, I can't if you spend money on that, you can take joy in it, you can be happy about it, and at the same time, by creating some constraints in your life. It's going to actually lead to a greater sense of freedom by having this budget. Because having a budget where the money that comes in every month goes out in ways that actually

reflect your values, it's just such a freeing way to live. So, yeah, budgeting not a four letter word, and in actuality, budget is a a six letter word, and it's actually a helpful six letter word. Yeah, man, most definitely. All right, next time you stop your toe, don't yell budget. Now you can yield something else budget. All right, man, let's take it back to the beer. This episode, we were enjoying Bourbon County wheat wind Ale by Goose Island. Joel,

what were your thoughts on this beer? Man? I thought this beer was intense in all the right ways, and it was really unique too, because a wheat wine. I mean, that's not many people make wheat wine. It's not a real popular style, right, but I will say it doesn't have wine in it, like it's called wheat wine. But

like in reality, it's just a very maul t beer, Okay. Yeah, And you can tell that like and and it it has kind of some like dark fruit notes, I would say, And at the same time it has like a touch of honey as well, so it felt a little light at the same time. I thought it kind of hit both ends of the spectrum, and so yeah, I think with the dark fruits the light honey touch, there's a bit of complexity to this one. Uh, and it was

really tasty. I enjoyed it nice. Man. Well, I want to want to back it out and I want to talk about the bottle because you and I we're kind of discussing the bottle before we hit record earlier. And it's such a classy bottle, Like it's all black for the most part, and it's got this label hanging off of it. Um, it's almost like kind of got this cool little tag like a flag, Yeah, like a little flag kind of wave, and uh, it's just got this really classy look to it. So first of all, it's

got that going for it. And then for me, when we poured this beer, it almost had the sweet banana kind of smell to it. And when I took that first sip to me was super bready almost like a like a caramel flavor to it. I think it's awesome that you mentioned honey because it also makes me think of did you ever have bit oh honey, it's the old school candy. It's like this little brown Oh, I know what you're talking about, kind of sugary, kind of

CARAMELI I'm thinking. I guess they just kind of reminded me of some of those dark, old, kind of classic flavors. That's what this being reminded me of. Tasty one. Glad to enjoy it on this episode with you, my friend. All right, Well, that's gonna do it for this episode. For anyone who wants the show notes, just check out

our website. It's how to money dot com. Yeah, Juel, And in addition to our episode notes, we have some other articles up on the website, and specifically, if you're looking for a new credit card, we would recommend you checking out how to money dot com forward slash credit cards. We want to make sure that you are using your credit card in a way that gives you the maximum benefit based on the way that you spend your money.

That's what that article is all about. And if you do sign up for a new card via any links in that article, it helps out the show. So thanks in advance. All right, Joel, that's gonna be it for this episode, Buddy. Until next time, Best friends out best friends out the boo