You Need to Create a Budget #002

very different. I'm not sure we'll find out. I think I think we do have pretty different takes on budgets, and so I think it's really interesting getting into it, and hopefully a lot of takeaway from people who are frightened the budgets or you know, really want to do a budget. I think this podcast is going to kind of help people sort through those issues. Yeah, I feel like that's one of the good things we've got going for us. We like similar things, but we're very different dudes.

We have a lot of same end goals in mind, I think, but our means of getting there often differs great a different buddy, which is why I think it's awesome. I'm kind of more go with your go with your gut, and you're definitely more planned out. Let's put every I'm the numbers guy. You're like Excel spreadsheet to the max. Empirical data. Give it to me, that's right. Uh. And as always on the Porn Poor podcast, we crack a beer every time and today, Matt, you got you picked

up the beer today and what are we drinking? This is tweak, a stout with coffee. It's aged and bourbon barrels. I had this a few years ago. Oh, you were actually over at our house and I give you a sip, right, I saved some for you. Yeah, that's that's when you first had it. So my brother in law got this for me one Christmas. You got me a six pack of a bunch of different beers that we don't get here in Georgia. With this being a higher a BV.

This is a six beer, so yeah, we get every beers here, but we don't get the big time stouts that they make because they're big time stouts could go up to eighteen percent, and so this one's at sixteen. And Georgia the cap on a b V is fourteen, so we don't get these big stouts here. But this is Yeah, it's fantastic. Excited to have this again. It's been it's been a while since since I've had this one.

So Matt's Poor and the beer right now. At the end of the podcast, as always, will give you kind of our tasting notes what we think about the beer. And this is, if I remember correctly, one of my favorite stouts of all time. I'm pretty pumped to be having it again. We'll give you our tasting notes in just a little bit. I did make it out to the Avery Brewing Company, I guess about a year and

a half ago. It was absolutely beautiful. The beers were there in Colorado, uh outside of Boulder, obviously in Colorado, just outside of Boulder, I think, And oh my goodness, their facilities amazing. They make some amazing so hours. Oh so, by the way, Matt Avery just last month sold of their brewery. And this is a hot topic and craft beer. We're both in the craft beer in a huge way.

But breweries are selling out. It seems like almost every other week you hear a report of a brewery selling part their steak or their whole brewery to a big conglomerate. And Avery just soldt to a Spanish company. How do you feel about craft breweries that are selling parts or their whole business to other companies, and especially like I guess, the big one was wicked weeds. Telling to Budweiser that that kind of stuff scared scares the craft that was kind of big. I mean, I don't know, man. My

question is is the beer gonna taste different? Yeah it is? Well no, no, no no, I'm not saying is. I'm saying that's a big question, because then yes, then I have

a problem with that, right. You know, these are companies where they've been working hard over years and sometimes decades to make something fantastic, and as the owners, my natural tendency is to think that oh, if you own it, this is something you've worked for, is something you built, and if you want to sell a portion of it, and especially it means you said the only sold thirty percent,

I mean they're obviously maintaining control over the company. And I think there's a big difference in the way that a company sells, and it's especially in craft beer. And we'll get to the topic at hand budgets in just a second. I think it in craft beer, the way you sell makes such a big difference because if it's a Spanish company and kind of keeping similar structure and the same brewers in place, all that stuff, keeping the

same mindset and company culture. For instance, like I think when Heineken bought Lagunitas, they kind of wanted to everyone to kind of remain in place, and you know, status quota, continue, change of management, changing capital. Yeah it's under a new name. But but with something like wickul Weed sells a percent of Budweiser that people start to wonder, Okay, well you also you kind of sold to the people that they want to stamp out craft beer, you know, so it's

as seen as articles. Yeah, so it's I think it's that kind of thing um And I don't think we know what the overall effects is going to be, but it's just interesting that a lot more of those are

things are happening in the craft beer world. And if you're super into craft beer, you do care if you're brewery sells a steak, If your local brewer right down the street from you sells steak or sells out to another company, it could affect the quality and and that would absolutely be a bummer, right Yeah, But fortunately for us, I guess there's and just how it affects the industry

as a whole, I guess as well. It's something it's sorry for me sometimes to think beyond the immediate What is this due to the beer, right, and if it's fine, then maybe it's gonna be okay. But I remember reading some on that and just how it affects the craft beer industry as a whole and what some of the big brewers are trying to do so well, a lot of it comes down to tap space and shelf space, and if you've got the big money, you contributors, you can buy shelf space and tap space and we don't

have to get in all the nuances. But it it does that kind of stuff, it affects that stuff in the bottom line for everybody involved. So cheers, tweak, let's drink smells so good? All right, We'll get to tasting notes later on, but so fights it to say at this point that's real good. This is fantastic. That warms you up like your drinking bourbon too. It's just perfectly balanced. We'll talk more about this later, all right, Matt, moving on to the topic at hand today, budgets, and for

a lot of people that's a really scary word. So let's kind of define it and talk about why maybe it's not as frightening as it initially sounds. Yeah, man, absolutely, so to me, a budget is just us deciding, like where we're going to spend the money before you actually spend it. Right, It's not some sort of list of rules that you have to follow or abide by or you swear to. It's just having a plan. That's the

easiest way to describe it. It's saying that this is how much income I'm going to half of the month. It's listing out your expenses. It's deciding where you're going to spend that money and then just sticking to it. It's just I mean literally, it's just a plan you and you get to decide that plan, right. It's not like somebody else is gonna say, oh no, you must

do it this way. Certainly, there's tactics and ways and approaches to creating a budget, but when it comes to the actual amounts within the budget and you in your different categories, you're gonna put your dollars on the things that you value. That's what That's what makes it yours as well. So what would you say to someone that thinks that a budget is limiting. No, a budget is not limiting per se. You're not sort of keeping yourself from doing things unless that's what you want to do.

You're deciding now what you're gonna do down the down the road and in the in the weeks to come in that month. And so if you know at the beginning of the month that like, oh, it's I'm gonna want to do these other things because I can't. I'm not gonna behave and I'm gonna spend my money as soon as I get it, well, it's good at the beginning of the month to sit down and think ahead a little bit. Really, all it is is just thinking

ahead and making a plan. Yeah. I think most people think that a budget is about depriving yourself, so you spend as little money as possible and you allocated to the right places. But really, when it comes down to it, you're living a water and gruel lifestyle to try to skip by because that's what it takes. That's what budgeting is. It's it's that sort of a process. It's a it's a slog and I think that's probably where people get

bogged down. Initially. I don't want to do a budget because it means it's gonna restrict me in all these ways. I want to be able to go out and eat right. Yeah, folks are like, well, I still want to go and get my nails done, or whatever arguments there are against it. That's what keeps people, I think a lot of times right,

that's what keeps people totally from from doing it. And in the trick is I guess that you you have to prioritize those things, and some of those things you will have to cut back if you want to meet other goals that you have. So you have to make decisions sometimes now in the short term that will impact your long term budget, and so it might take cutting back on certain things that you deem not as important in the immediate in order to achieve that long term success.

If you want to take a trip next year to Europe, you can start budgeting for that, start saving now absolutely, as opposed to the typical finances sort of model is don't plan ahead, you do it when you want, and then you end up paying for it after the fact. But what are you you also paying for after the fact if you've financed it, you're paying for financing, you're paying interest. Yeah, you're paying interest on it as opposed to saving ahead of time. So it's it's almost like

a reverse payment program. Instead of paying a bank or a lender. After the fact, you're you're just saving up and paying yourself ahead of time. I think one of the most difficult aspects of budgeting for me sometimes is I forget to make it personal. And I think that when it comes down to it, I'm better at budgeting when I truly make it personal to what I need.

And sometimes I guess we all do this. We begin to think, well, this is what everyone else is doing, or this is this is what my budget should look like. But really you have to make it personal. And if you want to drop four thousand dollars a year on travel, you can do that, but you just need to budget for it. Just put it on there the every month

that you're gonna set aside. However, many you know four thousand about about by twelve months, and now you know that, like every month, we need to set aside this much money towards that one trip at the end of the year, or for the two trips that we have. If it's a priority for you, man make it happen. It's just about making those decisions before they happen. That way, you

have time to prepare for it. So do you always budget so like before and well, specific to before you and Emily got married, did you budget when back when you're single? No, I didn't budget, and I'll tell you why. And and Emily and I've had a difficult time at times trying to figure out budgeting in our marriage because I do have a kind of this like mental roadblock, aversion to budgeting, and part of it is and I wrote an article actually a few years back on my

personal blog about why I didn't budget. And I think it's okay for some people at different times in life to not have to budget, but not for most people, only for a few And the reason I think it works for me is because I was so frugal. I was so into not spending money for quite a long period of time, and I liked seeing my balance grow every month. I just didn't really buy needless things, and in lifestyle creep wasn't really a factor for me at

that point in time. You're you're living so cheap that making a budget for you maybe wasn't the wisest used to your time, because it's fine you were, you were spending nothing on everything, right, And I felt like, I think at that point in time, I was probably like working more hours and so less time to spend and I was just really kind of focused on building something. I see the need for a budget in our lives

more now than I have in quite some time. And so this actually, this next year, it's gonna be really big focus for us to actually kind of adopt a budget again and try to because we have a goal in mind. Because actually, and here's the goal. We bought a rental property recently, and we did take out a small portion of our home equity loan UH in order to put down to get this rental property. And so we want to pay that off in months. Yeah, we want to pay that off quickly, and I gotta have

a plan if you want to do that, do that exactly. Yeah, And so we're like, we're not terribly uncomfortable with it being there, but we'd rather get rid of it. And the only way for us to do that, well, I think, is to budget for the first six eight months, get back into it, pay it off quickly, and then you know what, I think that that that we're just in a phase where we're gonna be budgeting for a while.

But then maybe at some point we'll be in another phase of life where we don't feel the strong need to budget and sit down every week or month and do that. But we are in a phase in life where we're getting back into that and we're really excited to get back into it. Yeah. I think the biggest thing with that is especially if you have a partner,

especially if you have a wife. And this is where it came down for me and Emily, where budgeting actually really begin to help us get on the same page about money, was that I was so frugal and she would feel bad if she spent money, even though like

I didn't want her to feel bad. I didn't want her not to be free to make that decision to buy something, but because of my mindset and her knowing my mindset about money, she felt uncomfortable making that spend, buying that item of clothing or going out to eat. It was always kind of, well, should we go to the restaurant that's where we're only going to spend like forty bucks or is it okay if we go to

the restaurant, we're gonna drop seventy five dollars tonight. And because it wasn't down on paper and it wasn't something that we discussed, it was this thing that we just didn't talk about and it was this unsaid like difficulty in our marriage. And so that's where budgeting for us really comes out. If it was just me, I could get by without a budget, but because it involves my wife and feelings and how we process things together, it's

really really helpful for us to be on the same page. Yeah, for us, it was didn't want to do it at all, Like she she saw it sort of like we talked about initially, where it was this thing where we're gonna be enslaved to the numbers and whatever, whatever the charts or whatever the numbers say, that that's what we have to do. So after talking with her about it and learning what it really is, she saw basically the freedom

in that. And so she saw that, Okay, at the beginning of the month, we're both going to talk about this and we're gonna decide together what we're going to spend on whatever it's going to be, say, you know, going out to eat. Well, then once you've decided what that number is, like we have to I mean, and this is how we approached it, was that you we had to spend that money because we've decided that's what we're gonna do, and so there was no guilt at

all associated with, say, going out to eat. It was a matter of that, you know, we decided that this is what we're gonna do, so let's do it, let's have fun. And once that sort of clicked for definitely for Kate, then we were able to man totally get on the same page. She saw it as a as a a tool that sort of got rid of that guilty. Do you let things roll over or from month to

month in your budget? Let's say you and Kate each have like a personal expense account and you usually have a certain amount of lotted into it where Matt can buy whatever he wants that month that's fifty bucks or under. But let's see you're saving up for something that's do you roll that over? How does that work in your budget? Yeah, so we actually we do. We do roll it over, so we don't have a monthly we we don't have a monthly amount where we're basically forcing ourselves to spend that.

And if you don't think it's just sort of gone, that kind of goes for us. I've we've got this overly complicated budget because I'm a nerd, but where we each get a certain amount that we've decided that we're gonna get every month, and and if you spend it, then you spend it. But otherwise, for the most part, we're saving up in the in those in those buckets.

Is another way to look at it that we've that's how we've talked about it before as well, that we're sort of letting the bucket grow because we know that, Yeah, in my case, oh, I'm gonna get it. I'm gonna get a bike. Uh, and it's gonna cost thousand, two thousand bucks and I'm not gonna be spending a whole lot of money on other other other things. All right, what if you buy that item early on in the year and so you're in negative in your personal account

on the budget, how do you tell that? So it's it's just as there as a as a negative that we try not to let that happen. But when it does, it since there as a as a negative, and then it slowly takes back up as the as the months progress. And yeah, in general, we try not to dip down into the red. General good rule of budget, good rule of thumb, don't get in the red. I mean that's one of the reasons why, right, it's just if you're on the same page with your spouse, it helps two

work as a team. When you can work as a team, you're just going to be able to get so much more done having that accountability to your significant other. And even if it's not a spouse or I think having a friend or somebody that you can sort of talk to and about your goals, I think that's really helpful as well. I don't I don't think there's very many

people at all that do that. But the reason that I say that is because this is something that not just couples can do, but yeah, somebody that's not in a relationship as well. Well. It's interesting. I feel like a lot of people actually have found kind of some therapy in starting like a blog to document how they're

doing with budgeting. And actually a lot of successful online entrepreneurs started off as budget bloggers talking about getting out of debt and how they kind of pulled themselves up out of their out of their debt hole and now they're budget masters, and so those people are always interesting to read. And there's just a lot of people like that.

So maybe for you, maybe it's not even public. But maybe it's just journaling about it, but writing it down and keeping track of your progress and having some sort of visual record of what you're working towards and what you've what you've done. I mean for me, So I started making my budgets back in ten years ago, right out ten years ago. Now what's kind of crazy is that I can look back and see what I was saving towards back then, see see how much I was spending.

It was significantly less than what we spend now is a family of five. But it's actually, it's it's really cool, I think to be able to it's sort of a a time machine in a in a sence, you know, to kind of be able to go back and look and say, oh, this is we thought this was such

a huge deal. It was not. Or we saw, you know, this came up and this kind of wrecked us for a couple of months there, but in reality we saw how it kind of ended up being okay, and we kind of stuck to the plan and because of that where where we are today. So yeah, I wanted to talk to about how just in general, so we're I mean, we're talking about why you need to budget, right, So

as a tool. What a budget does essentially is takes this plan that you want to have right in regards to your finances and your money, and it takes it and it links your plan that you have in your head two your behavior and how you actually live throughout the month, because you can we can think that we want to do something all day long, but if we don't really have a plan for it or have it written down, we're just gonna do what we're gonna do.

Our friends are gonna go out and oh this is coming up, or oh man, this show is in town. Oh man, there's so much fun stuff I want to do and things I want to buy, and you misbehave and then you're you look at back at the end of the month and you think, oh my gosh, where did where did all my money go? The budget is there to keep you in line, and it's yourself keeping yourself online. It's not like it's somebody else. You get

to do this to yourself. It's like your your past self telling your future self how you're gonna behave and sticking to it. So, Joel, are you act like are you naturally a spender or a saver? I mean so and I asked this because earlier this morning, we're having a conversation and you're taking some anagram, any aramagram or something, and you're talking about how, oh, man, maybe I'm not actually a sort of a minimalist, saver, kind of frugal type, right.

Do you think you're naturally a spender or say so? I think, deep down, at my core, I'm probably a little bit of a spender. But I think some of the circumstances that happened in my life and in childhood have driven me to be frugal, to be a saver, to desire security in that way. I don't think I'm naturally this minimalist, frugal guy, but that is part of me, and it's ingrained in me at this point because it's something that I've learned over years and years and years.

It's kind of yeah, it's kind of shaped you to to kind of be who you are today. Yeah, but you I gotta I gotta imagine that you are to the core. Man. I It's tough because there's things that come along and I think, oh I need this, or oh I really want this for for me, I want this for our family. These are these are now priorities, and a lot of times those things involved a lot of money, and so therefore we're spending We're spending money but kind of left to my own so my own devices.

And if it was just me, if I was a single dude, I would be a sad single dude living by myself, not spending any money, without a life, and nobody would want to be my friend. Dude. I'm serious. Uh, Having Kate to kind of balance me, bounce me out and that in that sense has been very good for for who I am. But I do so because of that. Yes, at my core, I do think I'm a saver. I'm a organized saver, and the budget helps me get there.

All right, Well, let me give you my quick breakdown my approach to budgeting, how when I do it, how I've done it, how Emily and I've done it together, because you're more of a free spirit when it comes to numbers, and you mentioned going with your going with your gut. You think that's how you approach it. Uh, yeah, pretty much, so, I'll say. But when we are and Emily,

it's just like Kate is for you. Emily is a great balance for me and she really helps me stick to a budge it, look at the numbers, think through, especially if we're on a mission on a goal, and then how to kind of feel free inside of that. And so with the way we approach it. There's a bunch of different apps, as we've said, a bunch of different websites, a bunch of different formulas that people use. I use Mint, the Mint app, Mint dot com. I mean,

I think it's the most widely used budgeting tool. Yeah. Yeah, we we tried it for a while there to see if it would work for us. Yeah, I think for us, we use Mint specifically as a way to just track all of our expenses. So we use credit cards and checks for pretty much everything, and like almost no checks anymore. It's pretty much all credit cards, right, and get get

those points, get that catch back, Yeah exactly. And so but that can be a problem for people who because because credit card doesn't register the same mentally when you make a transaction as actually taking cash out of your pocket and handing it to somebody. So that's again, if you're going to be using plastic, the budgeting really can kick in if you're not super frugal. It's really important because you could find yourself spending a lot more freely

using plastic as opposed to cash. I totally ability that as far as like the emotional impact, Oh yeah, yeah, you just swipe it and forget. I don't you have to swipe it in more, you just hand it over like or online make it swipes it for me. How easy is it to make an online purchase now or like Amazon one click or whatever. There's all these kind of things that make it so easy, and then two days later the things shows up your doorstep and you forget you just spent twenty eight dollars on it. You

forget that you even ordered it. Sometimes, but I feel like that's a tendency for people, right especially in today's day and age, with easy online ordering, that's just kind of goes hand in hand with it, all right. So I use Mint and we basically filter all of our credit cards in there, and so use it as a tracking exactly, and so in an instant I can get a snapshot of kind of where we're at for the month,

you know, up or down. It's just got the cash balance first, the credit card how much we owe on the credit cards? Right then, obviously we don't care a credit card balance, but it just gives me a snapshot kind of where things are at, and then on top of that weekend at the end every month, go through all those transactions. Mint doesn't do a great job of

categorizing it. Yeah, I was gonna say that was one of the things I remember being annoyed with having to manually say, no, this actually needs to go here now where like the very next time there's a purchase there, it needs to go to this other category. It kind of bounces back and forth, and so that that can

be a tough one. Uh We that's why we kind of actually go manually through all the transactions and then entered into Google sheets and we kind of sit down and then we're like, okay, well, did you would you buy here for this amount? Because we don't always tell each other before we buy something that's ten or twenty bucks, so then we can kind of say, okay, you're at eighty bucks for this month, and we're at this much

for groceries. And so we try to sit down once or twice a month go through it so we're on the same page and kind of see where we're at. And that's the easiest, simplest way we found. There's all these other I've heard so many people rave about you need a budget uh also called wine ab for short. So there's a lot of people to rape about that budgeting app and website. We've just found that meant for

us it's simple. We've already kind of got everything flowing into there, and then we just use Google sheets to kind of track and see where we're at for the month and then overall and how we're progressing that years. Okay, So then on the Google sheet, is that where you set here how much you're you're wanting to spend in different categories, So say with groceries, okay, so at the beginning of the the month, you've already you already had that set.

So we know, yeah, we're gonna drop four five dollars a month on groceries, and we're gonna do a d and fifty on entertainment which includes our date nights right every month, or you know, this is how much our mortgage is. Obviously the set things like that, and so that's kind of how we use it. And then we've all right, at the end of the month, we've we've got fifty bucks left for going out, or we've got five bucks, and so we stay in and make dinner.

Got you all right, So what about you? What's your approach? So okay, so yeah, we we take the more nerdy, uh all numbers approach. So basically since the beginning, when I first created my first budget, I've always created a zero sum budget, so meaning that at the beginning of the month, I set the my projected income list out all my expenses, and literally at the end of the month it should be zero. So your income minoster expenses

equal zero. And within those expenses includes goals, right, so it's like saving for that vacation or that trip in addition to investment savings in retirement and things like that, I've got those within my I call it. I call it an expense, but it's just a way for me to say that my goal is this month, to say, you know, to put aside towards my roth ira A. So those numbers are also included in the expenses. So my goal is that at the end of the month

there's not a single penny. I mean literally, there's not a single penny that is unaccounted for because I've essentially spent it already at the beginning of the month with the you know, with the goals that Kate and I have set in mind, and then we you know, we

move moved numbers around month the month. If we're like, well, this is gonna be a month where we're gonna focus on this, maybe a little bit more, say, oh, actually we're gonna need to ramp up our our savings towards vacation because we didn't take into account the beach was gonna be more expensive or something like that. I don't know.

That's the general approach for me and so and the tools I used then for that excel, I mean just the basic excels, you know, multiple I got two or three spreadsheets, and do you just pour over all your statements in order to about once a week if I'm if I'm diligent and on top of it, once a week, I just export stuff and just plug it into plug it in our spreadsheets, and then I do manually move them. How long is that process when I do it once

a week, maybe like thirty minutes. Takes me about thirty minutes to look over those numbers, plug those into the proper categories and then kay, I mean, we don't even have meetings anymore. I just send Kate a text, I'll say, you know, budget update, dash, dash dash, and then I say grocery hundred under entertainment, a hundred, fifty dollars under gas, you know, forty dollars under things like that, And that's basically what kind of helps dictate and point us in

the right direction for the rest of the month. All right, but let's say this. So let's say, particularly on a line NIGHTE and like gas, you're doing zero some budget. But if every money should be at the end of the month directed somewhere, what happens if you've budgeted seventy for gas and you only spent thirty five, or vice versa, you aren't on a road trip and you spent more, how do you handle that in the budget? And where

does that money go? Yeah? So does it look like so in the first example, if there's additional money left over, that's just money that we then it's just additional month that's going to go into whatever we decide it's going to go into. So typically it's the following month or

that same month that the same month. Yeah, so, and say that specific month we had planned to set aside eight hundred dollars to go to a roth Ira, Then if we're forty bucks under in gas, well instead of eight hundred, it's eight forty that month, and so we just kind of make some changes on the fly. And obviously sometimes you just have to drive somewhere, right, and so sometimes we do go over. But like you mentioned, the road trip, well that kind of comes out of vacation,

and so that's something we've already planned for. We know that, Okay, this is gonna include all of our expenses for that trip, and so that's that's how we know reconcile it in that in that case. All right, So here's another interesting question, and there's probably a lot of people listening that are in the same position as Matt is. I am a regular forty hour week employees somewhere with a paycheck that I can count on that looks pretty much the exact

same every two weeks. But you, sir, have vastly different incomes from month to month. So what do you how do you budget when you make ten thou one month in two thousand in the next. Yeah, so that's when margin comes into play. So sort of like you mentioned, you're asking about the sort of personal categories with like okay, so do you roll over you know, like if you don't spend all of your all of your map money for the month. And so the my answer to that was, yes,

the same thing kind of goes. So we have I mean, basically we kind of roll it into what we call our emergency fund, but we have a more loose, sort of liberal emergency fund, and what that acts as is our margin. So in the months where we do have that additional income, right, so, say like the ten thousand dollar month, that additional money, we know that that's a fat month. It's not like we're like, oh man, this is our life, now, let's get used to spending it all.

We know that we have to set aside some like a good chunk of that for some of the leaner months, and so when that happens, we basically stockpile our emergency fund a little bit, knowing that there's gonna be some leaner months ahead, and that way when those months do inevitably come along, we're able to kind of dip into that and all that all balances out. It would be nice to have a consistent income because it would absolutely make budgeting easier. But for us, I mean, I've been

doing this for for so long now, with ten years. Honestly, I don't even really think about it. So here's it's something that's always kind of been hard for me when it comes to budgeting, because I'm good at like saving up money, not spending, not spending a ton, and always saving every month and not spending more than we make. What happens when and in some I touched on earlier make your budget personal for me. We try to allocate

money to the things that we love. And there's a few things that we have said aside, like, for instance, I have three things that I'm okay spending more money on than probably most people do. And those three things are craft beer. Obviously we're drinking a good one now. Uh. Folk art. I love folk art, and so I buy a piece every year, sometimes two. We Emily and I just share a love for folk art and travel. We travel usually one domestic and one international every year. We

try to allocate money for those things. But if there's a deal on something, I have this kind of thorn in my side that I have to I almost have to pull the trigger. And so let's say there's a great deal on a trip somewhere where tickets to Barcelona, Spain are normally and there's a round trip ticket for foreigner and fifty dollars. I just have a built up savings can I pull the trigger on it? That's that's the thing. I guess. It's it's like a different way

of like brain compartmentalization. And my brain isn't saying I budgeted it out over twelve months. It's saying I put all the excess in the savings account and I'm spending out of there. That's kind of the way my brain thinks about it. Yeah, So I mean, so, yes, we try to take advantage of the deal. I'm I'm with you. We're not so rigid that when we see a fantastic deal or an opportunity to come along that we're like, nope,

we only were still working towards that, you know. So again, like you mentioned, well, what if there's a big purchase, and I mentioned how when I when I got like a recent bike that I purchased, it took me into the red. And but that's so that's still like something I'm still slowly kind of building, you know, rebuilding and getting back up to zero and then beyond that, trying to start saving again to be able to get something

else on one. So when we see a deal on a flight, even though we necessarily may not have all of that money saved up for that vacation, it's not in the vacation fund in that category exactly. Again, we have enough margin in our you know, in our emergency fund that we're able that we've stockpiled because we know that we've we do that in the you know, the in the fatter months, we're able to kind of dip into that. So it's not like we're overdrafting our account

or anything. We're sort of overdrafting that little category. Yeah, and and and that category is sort of hurting there for a couple of months until we're able to kind of rebuild it. But we're never overdrafting. We're never It's not like our bank our account bounces ever zero or honestly even close to that, because we like to maintain a cushion. Yeah. No, I think that's a great way to put it. Never going to credit card debt for lifestyle,

no way. Never over debit your account for lifestyle. If this is a decision and you have the savings built up to make that choice and pounce on the deal, I think it's okay. In moderation with the knowledge that you immediately want to start building that back up when you get back from your trip or whatever it is, if it's the bike that you bought or the trip you went on, immediately you start working towards building that

cushion back up. But if you have that cushion, I think you need to be able to give yourself a little bit of freedom. I think probably a really important caveat for people to hear in that is, if you're going to do that, make sure it is for one of those personal categories for which you put major importance.

I think, for instance, let's say you know, we we just recently got done with the Christmas shopping season, Black Friday, Cyber Monday, blah blah blah blah blah, bah blah blah blah, and people like bought a bunch of ship it they didn't need because it was a deal. That is where you get yourself into trouble is you just bought an Amazon kindle in a fire stick and blah blah blah blah blah blah, all these things that you had not budgeted for I didn't think you needed until the deal

popped up. And if you're super intelectronics, and that's when you're lining up like that's one of your calling cards. Hey, that's what I'm super into. That's personal for me, that's that's the line out of in my budget. It's okay to make that purchase within reason, even if you go over. For us, it's travel, right, that's what we're talking about

our bikes. But if that's your thing, that's okay. You you need to want to replenish it quickly, but don't do it for something that's not one of those main categories, those main things that drives you, because that's what leads to the hangover and to the ruination of your budget. I feel like if you're pouncing on deals from all these other categories that you don't really care about in the end, And what you're describing to basically is how

we approach money in general. Like we're not so by the numbers that we're just trying to be rich, Like that's not our goal is to amass tons of money. One of our goals is to sort of live a moderate life where we're spending money, you know, some money now we're trying to save, obviously for for the long term, so that we have money down the road to to either become financially independent on or to retire or buy a yacht. Is that your thing you're gonna you're gonna

be the yacht guy? Could be someday, But couldn't you see me with those little sailor hats or whatever if somebody else is driving the yacht. Maybe we're trying to find ways to focus on the things that matter to us now and to also plan ahead so that we're not broke down the road. Totally agree with that. Yeah, we're not so extreme that we're just only saving now and not spending a single dime. That's where I was maybe ten years ago. And we're not also obviously not

advocating a lifestyle where there's just excessive consumption. We're you're just making these silly purchases that aren't gonna mean anything to you, and even like a couple of days later, like you said, where you kind of have the the purchase hangover and you're just thinking, man, why did I do that? Yeah? Yeah, And I think if you find yourself continually going over like that, making purchases that then you later regret. There's a couple things that you can

do to kind of change your mindset. You can change some of your habits, some of the ways that you shop online, some of the ways that you shop in stores. And even if you buy something, you can give yourself like a forty eight hour period or something to decide without taking the tags off and causing the receipt whether

you really want to keep it. There's a couple of things you can do in your life, yea, to prevent yourself from maybe you made the mistake in the heat of the moment, but then you go return the item if you decide that it doesn't fit your budget and it doesn't fit your lifestyle. So you know, you mentioned how you guys. Essentially you kind of track all of your spending vehemin and then you kind of plug that

into sheets on the Google sheets. I mean, how do you actually go about creating your dollar amounts for your different categories, like within your budget? Yeah, well so that obviously there are certain items that are fixed like your yeah, mortgage right yeah, right, so insurance stuff like that, and then the other ones basically started off by looking at previous months. Oh hey, how much did we spend on groceries last month? Was it? Do do we feel like

that's normal. Hey, how much do we spend on entertainment? Oh? Hey, well we want to do more in this. Can we cut down in that a little bit, be a little more focused on our entertainment spending so that we can add a little more towards the paying off debt bucket or whatever. And like I said, we we don't really have We just have mortgage. That that's it except for this small home equity and that's what we're going after.

Oh and a little bit emily student loans. So those are the two things that we want to we want to tackle this year. She's got to knock it out like five or six grand left, right, Yeah, No, it's so yeah, it's not very much super low interest rate. So it's not like we're terribly concerned. We're we're kind of like, let's do this. Eighteen is going to be the year, just like a bunch of that. Yeah, yeah,

it's gonna feel so good. Yeah. So it's it's usually it's based on previous months and on then Okay, can we pinch a little more there so we can breathe a little more here, priorities shift a little bit or I recently shopped our insurance, so that dropped a little bit, so we can decided to put a little bit more in this bucket if we want, or save a little more. So it's kind of it's kind of that combo of

history versus where we desire money cultures kind of moving forward. Yeah, and I think that So that's I think that's true as well for anybody that doesn't have a budget and so you're taught, you're saying based on previous months, if you've never even done a budget. Ever, that's I think that's exactly how you need to start as well. And maybe that's what you're saying, right, but yeah, that's how

we initially came up with the number exactly. So instead of like you can think through that like, oh, this is what I want to spend or this is what I think I'll spend the month on groceries or entertainment things like that, like some of the more variable expenses, right, the things that you that are kind of more dependent on your behavior, Like it's so much more effective to look at what you've actually done, because you can think all day long that this is what I would like

it to say, but what's more effective and just honestly easier is just to look at what you've done, like, let's look at your past, let's look at your patterns, and then you can kind of base your numbers around that and obviously, hopefully from your first one there you're once you have your income and then you've got your previous month's expenses, Hopefully you're not spending more than you're actually making because then there's going to be some serious

changes that that need to happen. But step one, just do it, you know, make it happen. Like there's never gonna be a perfect month, because every month is going to be different, Like there's always gonna be something that comes up that you're gonna think, oh, but this isn't something that I'm going to have to deal with all

the time. Well, there's always gonna be something, So just start, you know, starting moving forward, put the numbers down, start tracking those expenses, and then and checking in with it as well. For us, it doesn't do us very very much good if we are if we wait till the very end of the month before we look at where we've done, it's it's more of a sort of oh, how did we do this month? As opposed to how

are we doing. How can we modify our behavior to make sure that we're sticking sticking to our goals and staying on track to what we want to do. Yeah, so there's there's two things I want to say to that. One. I think it's probably like you said, it's really important to do a check in. Maybe I mean every week would be ideal, but most honestly, we don't. I feel like we kind of do it every ten days. You do it every two weeks, right like middle of the month,

end of the month. That's that's probably a great way to do it that way. If you're by yourself or with somebody else, you guys can update each other, or you can just be updated about your individual budget. But being able to look at it twice a month probably the most helpful way to do it, and better looking at it, you know, zero times a month, that's for sure, right, Right, Like anything that anybody does is going to be better

if it's something that you haven't done before. Right. So, just as long as you're moving in the right direction, man, I'm happy, and we'll probably take you longer at the very beginning to Yeah, you know, and but but now that you're kind of budget master, thirty minutes every ten days. It's not that bad, but it might take you longer and you might need to set aside one night of the week or one night every other week where you're like, I'm not watching Netflix, I'm not doing anything. I'm I'm

checking my budget out. And one of the other part of being an adult, right right, just not watching TV and instead doing the things that you don't really want to do. Then someone's gotta do it. Yeah, it's the kind of adult stuff that sucks. Yeah, honestly I say it sucks, but in reality, I kind of when I sit down and put on some music and start plugging in some numbers and seeing where we're at, I know

you love it. Oh man, that's that's put on some slow jams and uh start start getting in with the numbers. There one other thing I want to say too, I think it's really helpful to have kind of like a big goal in mind with your budget. And depending on what phase you're in, where you're at in your life and where you're at with your debt levels, it could be something different. But for Emily and I this next year, like I said, we want to kill that home equity line.

That's it's not that big even, but and then we want to kill the rest of our student loans. And if we can do those two things, how good are we going to feel at the end of it. And So, wherever you're at, whether it's eliminating student loans or another debt in your life, or whether you know what you're doing pretty good with debt and you just want to you want to be able to take an awesome vacation to Europe, or you want to stay it for that

new bike, whatever it is. If you can have a big goal in plan, they can help keep you focused and no matter where you're at, you can come up with that big goal this year. Hey, I'm gonna set this goal for myself and that's gonna help me stay focused throughout the year. Without Without that, it's hard to stay focused. Absolutely. Yeah, that's as sort of the why am I doing this? Right? Yeah? Yeah, totally. The budget is there as sort of a tool, like right, it's

it's like a month a month. This is like boots on the ground, like getting kind of down and dirty with it. But it's easy to kind of get lost into why am I even doing this? Like just let me just do what I want to do. But then if you're able to step back and sort of look at it for maybe, you know, maybe for a lot of a lot of folks. Yeah, it's the year, like

what do I want to accomplish this year? And having goals like that, then you can say, oh, well, this is why I'm doing this because I know that if I set aside a thousand bucks every month, we'll shoot I can do a lot with twelve grand by the end of the year. Like, think of the stuff I could either pay off or think of the you know, how much more I can put towards retirement or you know, investment or in another rental property like you mentioned earlier.

That's the kind of stuff that when you get to the end of the year, you're stoked about because you know that you've set these every month, you've set these goals with you know, within your budget to achieve. Yeah, and it might not be the sexiest goal. Somebody's goal might be a freaking trip of the Galapagos Islands and swimming with turtles. Yeah, that's that's nice and that's cool. But yours might just be to have an emergency fund

because you don't have one yet. Yeah, having some more margin in your life that allows you to take advantage of, say some of these deals that pop up, or just to not be stressed, you know, to to know that you're not living paycheck to paycheck. I think for a ton of people would feel amazing. I know it would feel like I mean, I've talked with folks and I know that having that sort of hanging over them where they know that if they don't get paid, they don't

get their next check. All of a sudden, there upside down on stuff, and and in a world of hurt. You can't make unrealistic, crazy budgets, and you can't make changes for a month to month that are huge, like you just need to make these you know, these slight tweaks and these slight changes to where you know that if your goal is to say, save more, and you kind of want to tighten the beat a little bit on some other categories, make make sure you make small changes.

First of all, once you base your budget on your previous most expenses, like that should be pretty dang realistic. And from there I think you should most definitely be able to make slight you know, these these small changes and tweaks too, to bring about the changes and goals that you're trying trying to achieve. There might be some really big changes that you haven't considered. Maybe you think that this line item in your budget for maybe you

haven't shopped your insurance in a while. I think there's there might be some big moves that you can make in that budget that you just haven't considered to help you make the other line items, and again, look up, make it personal, look back to your goals. What's your

what are your goals? If you don't care about driving a fancy car, sell your two thousand twelve vehicle, riding a two thousand two vehicle, and save a bunch of money on insurance and on taxes, and start changing some of those things, some of those bigger things, bigger picture of things that are actually taking a big chunk out of your monthly budget it and that can help you

get your budget in line. I think if you find yourself butting up against it or going over every month because it's not worth the stress of not being able to meet your budget, because you own things that are too expensive or aren't worth it to you, that just don't provide the value, look at some of those things. Maybe in your life that are a big, outgoing item that doesn't meet your value. Maybe you're paying too much on rent because you two people living in a square

foot house. Maybe you can downsize living an eight hundred square foot house, save yourself six dollars a month. Your budget becomes a whole lot easier to meet. There's tons of different tactics, right and like ways to get creative about either bringing in more money or cutting your expenses. But if you don't have a budget to know what you're spending on things, you've got no clue to what what what even to make changes on. And so to me, that's the biggest value that a budget brings about is

that it it's the formation. I think it's one of the things that you're sitting down. It should reflect those primary values. And if it doesn't, that's when you start making changes and you start cutting things, You start shopping things around, start making different buying decisions, and you re prioritize because you can take that trip next year if you really want to, if that's something you care about,

if you budget for it and you can do it. Yeah, folks say that, like there's so many things in life where folks are like, oh, I can't afford that. Well, it's like, well, you could afford that if you if

that was something you valued. So for instance, that trip or travel or other or saving for the future, saving for retirement, these are things that you could afford to do, but maybe instead you value something else you value, you know, hanging out with your friends and going out Like there's nothing wrong with that, but it's it's just kind of being honest with yourself and paying attention to what you're

actually doing with your money. Right. Yeah. My friend Paula has a podcast called Afford Anything, and she says you can ord anything, but not everything. And one of the things she talked about was she went on a three month trip I think the Indonesia or something like that, and everyone was like, how how can you afford to that? That's crazy? And I think it. I don't remember how much it cost her, but it was five or six thousand dollars or something like that for three months in Indonesia.

And she's like, why does no one question when Joe at your work buys a twenty six dollar hunday but everyone thinks I'm ridiculous for taking three months and drop in sixth grand to go to Indonesia, and I think that's exactly that's exactly correct, and so many people they think it's insane and that nobody can do that, nobody can afford that. It's because you don't prioritize it. Because you don't because you prioritize when, really does it align with your values? And it's okay if it does, but

does it align with your values? Constantly be questioning that? And I think that will help make the budget process. Having that end goal in mind and wanting your budget to reflect your values will help make it personal and help make it something that you can actually stick to and not feel like deprivation. Yeah. Absolutely, all right, Matt, let's talk about the beer. So obviously the podcast is poor,

not poor. We poured a beer earlier. It was Avery Brewing Company Tweak a uh stout with coffee aged bourbon barrels. It's sixteen percent, so we might be feeling it a slight amount at the end of this podcast. What's your take on the beer? Very delicious, incredibly well balanced. It's a little bit sweeter, which I like. Yeah, it is sweet, a good sweet, not like a fake sweet. It's got this real nice like bourbon sweetness. It's like real. It tastes like real coffee with like a little bit of

I don't want to say maple. It's not like maple syrup, but there's definitely like a sweet oakness to it totally, and it's just, yeah, it goes down really smooth for sixty So I picked this up when I was in South Carolina. I was in Greenville. I was that at the local store there and I saw it on the shelf. You can't get the stuff here, man, Yeah, you can't get it. Can't get it in Georgia. And next time I'm out there, I'm going to pick up a few

more of those, that's for sure. So yeah, I would recommend picking up if you see these in your local package store, pick up an avery Tweak. It's a fantastic beer. Still one of your one of your favorite stops. Ever. Do you think I think it's up there? I think it's probably a touch sweet for my favorite. I prefer just a little more like dark chocolate and uh, some more bitter notes. Maybe some more bitter notes going on. But it's really good and the coffee really balances it

out and gives a little bit of that bitterness. I'm a I'm a huge fan, and it's it's pretty light on the coffee. Huh, yeah, it could, it could. I feel like maybe in the years past there's been more And then I thought about that, but I think so. So I think tweaks of beer they make every year and it changes every year, and so maybe this year not. It's like a little chillier, you know, a little sweeter. It's like a like a like a caramel cube or something in my mouth. And that's totally how you know

someone's a beer nerd. By the way, too, if they start comparing a beer to the beer of beers past. So we we definitely hit that we're complete beer nerds. Right, So that beer was fantastic. Let's wrap up on budgeting, Matt, what are the main takeaways for people if they just want it budgets in thirty seconds? Well, and for the first thing, budgets are just a tool. They're not some

sort of weird cult that you're going to join. All it is is you saying that this is what we're gonna spend this month and deciding that before you actually spend the money. It's having a plan. That's step one, and you know what, we have a plane in almost everything in life. Don't be afraid. Plans aren't bad. Budgets you're scary. Call it your money plan. Okay, maybe that's easier. No budgets. Instead, we're gonna have a plan for our money. Yep, yeah,

it's it's it's a budget. And use the approach that's the most most comfortable to you. Test out a couple. Don't be bound by the medium. And sometimes maybe it's just paper and pencil, right, like I mean, if if, if you want to go that straightforward and not be distracted by some of the other aspects of the applications that are out there. Man, just a pad and paper is all you need, Like, you don't need all these

other tools to to make it work. But essentially, start with your income, list out your expenses and your your goals and what you want to spend on different categories for that month, and then track it. Yeah, track it.

And then if you see yourself starting to get get too high and say groceries, well maybe not get the organic avocado instead, you could you know, dive towards of peanut butter and jelly or something I don't know, like whatever it takes for you to to to keep your groceries if you've got to eat Ramin and PBNJ for the last four days of the month to meet your

budgets to nothing wrong with that. You know and always have that big goal in mind, because I think that that so much helps the motivation and the stick stick tuitiveness of a budget if you can keep that big goal in mind in front of your face all the time. This is what I'm aiming for, and it's something that really matters to you, that helps the budget stick and helps it not to feel quite as much like the drain. Thanks so much everyone for listening. Our home on the

web is how to Money com Check it out. We'll have our shown us up there for you. Yeah, and don't forget to hit the subscribe button wherever you're listening to your podcast. We'd really appreciate it. Our buddy. Until next time, Best Friends Out, Best Friends Out.