DESCRIPTION

Having control of your finances has never been more important. In episode 6, we take a closer look at how each of us budget our money. We are creating a positive space to talk and learn about money.

WHO ARE YOU TO TALK ABOUT MY MONEY?

• We understand money can be a sensitive topic.
• Surround yourself with people who want to see you do better.
• "For Christmas two years ago, Jon and Rose gave Maggie and I a book called 'The Total Money Makeover' by Dave Ramsey." 

JON'S BUDGET: (Time: 8:40)

• TWO KEY POINTS
  • Spend less than you earn 
  • Automate savings
• BUILD YOUR BUDGET
  • Track all fixed costs (mortgage/rent, car payment, insurance, utilities, other recurring essentials) using pen/paper or app like Mint.
  • Find your total monthly fixed costs, and divide by your number of paychecks each month.
  • If you are in debt, or trying to save money, eliminate all NON-ESSENTIAL items from your budget at this point.
  • Create two checking accounts (with automated direct deposits from every paycheck).
    • Bill account - Automatically deposit the amount from above from your paycheck into this account to cover your fix costs
    • “Allowance” account - This account is yours to spend on fun and non-recurring costs like groceries, gas, etc.
    • If you’re married, create a third checking account which is a joint checking account to cover joint fun and non-recurring costs.
  • Create Multiple savings accounts
    • Long Term Savings account (with spouse) for big ticket items (wedding, new car, new house, etc)
    • Short Term Savings account (without spouse) This money comes from “allowance money” but is set aside for vacations/adventures, or larger “toys” that I couldn’t buy after only one paycheck.
  • Save toward 3-6 month Emergency Savings to cover you in event of job loss, major injury, etc. 
    • This amount can be based on your current living expenses. 
    • OR you can base this off a leaner living style by cutting out non-essential items.
• MORE ON INVESTMENT STRATEGY IN FUTURE EPISODES

STEVE'S BUDGET: (Time:15:05)

• SPREADSHEET - My wife and I combine finances and put everything on an excel spreadsheet. At the beginning of every month, update the spreadsheet and track progress. (Visual Learners)
  • Fixed costs
  • Categories we regularly spend money on
  • List amounts in every account for net worth
  • Checking, 401k, HSA, Roth IRA
• EMERGENCY FUND
  • Work towards a 6 month cushion and beyond
• SAVINGS GOAL
  • 12-36 month chart
  • Calculate how much needs to be saved per month in order to reach goal
  • Write down what your bank account should look like every quarter based on that goal. (Visual Learners)

KEY POINTS:

• EMERGENCY FUND  (Time: 16:30)
  • Start small and gradually build up cushion
  • Save a $1000 Emergency Fund before establishing your budget or paying down debt
  • Once Debt is paid off and/or budget is established, increase 'Emergency Fund' to 3-6 months of expenses so that you are prepared in emergency situations like job loss or injury
  • "Expect the best. Be prepared for the worst."

HOW DO WE GET STARTED (Time 20:00)

• Ask yourself really good questions and then plan accordingly.
  • What is my current situation?
  • What are my bills?
  • How much debt do I have?
  • What do I want to accomplish?

RECOMMENDATIONS TO SAVE MORE:

• Pick up more hours at work or a second or third job to increase earning potential
  • Jon likes to work