352. Do You Even Need a Budget If You're Already Saving Enough?

The word “budget” often brings to mind complicated spreadsheets, spending guilt, and tracking every coffee purchase. While that level of detail can be helpful for some households, it may become unnecessary once saving, debt management, and cash flow are consistently under control.

In this episode of A Wiser Retirement® Podcast, we discuss how to determine whether a traditional budget still serves a purpose in your financial life.

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Transcript

Budget Dread And The Big Question

SPEAKER_04 0:00

Most people hear the word budget and immediately think of spreadsheets, guilt, and cutting back or tracking every latte. But what if you are already maxing out your 401k, building cash, avoiding bad debt, and living within your means? Do you still need a budget, or have you earned the right to stop caring about every dollar? Stay tuned to find out.

SPEAKER_01 0:19

Welcome to a Wiser Retirement Podcast, where we cut through the noise and bring you real, honest conversations about investing, retirement, and building lasting wealth. No sales pitches, no gimmicks, just insights to help you stop guessing and start planning your financial future.

SPEAKER_04 0:38

Welcome to a wiser retirement

Personal News And Family Talk

SPEAKER_04 0:40

podcast. I'm Casey Smith. Today I'm joined by financial advisor William Medcalf. We will be discussing do you even need a budget if you're already savvy enough? Hey, William. Hey, how's it going? Pretty good. So you have an important announcement.

SPEAKER_03 0:52

Yeah, that's right.

SPEAKER_04 0:53

Are we ready to make this public? I think you made it public enough already. Yeah.

SPEAKER_03 0:57

So number two is on the way. Number two. I should clarify. Baby number two is. He doesn't have to go to the bathroom. That's why he's having the baby.

SPEAKER_04 1:05

And it's gonna be a boy.

SPEAKER_03 1:07

So we're very excited about that.

SPEAKER_04 1:09

A girl, first boy. Yep. Will there be more? Or is this enough? Probably the question. But we'll see. I know. Yeah. Well, we had three. We have three. Um the first one I feel like everybody was there. The second one, most people were still there. So it was like boy, girl, and then we had a third, and people were like, Yeah. Like, why why did you do that? Like you already had one of each. Yeah. I think I think people just kind of kind of drove by the hospitals and hey, how you doing? And then left. You know, nobody's like waiting outside, you know, for the special moment.

SPEAKER_03 1:44

Yeah. There's definitely a crowd the first time. We'll see how it how it goes the second time, which I think it'll be kind of similar to what we're doing. It should be yeah, it should be pretty similar. Yeah. Because it's a boy, and yeah. We've had a run of girls in the family recently on my wife's side. So now it's the boy's turn. So yeah.

SPEAKER_04 2:00

I I met a family one time that had like, I think 12 kids or something like that. Maybe maybe even 14 actually. Yeah. By number five, they're probably just like, oh, you had another baby.

SPEAKER_03 2:09

Yeah. Well, yeah. So my wife's a triplet. And so that they had three and then triplets. So they have six. And so there's a lot of grandkids in the family. Oh, yeah, absolutely.

SPEAKER_04 2:20

Yep. That's awesome. Big, big, hopefully big fun family reunions. Yeah. Or Christmas time. Chaos. But it's fun. Yeah. Well, when they're all that little, I'm sure. Yeah. All right. Well, let's get started.

What “Saving Enough” Really Means

SPEAKER_04 2:32

Um, so before we can even answer whether some someone needs a budget or uh we we we have to define what saving enough actually means. So saving enough is not just a feeling, which I feel like most people who haven't done like official financial planning operate on how they feel about things. I feel things are good or feel things are bad. Yeah. We have a lot of very wealthy people, um, and mean you know, based on the averages that uh feel like they don't have enough, but they're not living their best life because of it, right? So you gotta get away from the feelings and look at look at data. Um so it really depends on uh uh your age, income, uh your retirement timeline, your lifestyle, uh do you have debt, uh, emergency fund? Uh, what's the balance? Uh do you have enough in emergency reserve or is your credit card emergency reserve, which is not the best idea. Right. Um depends on your employer benefits. Are you have you have your health care partially subsidized? Are you paying for it yourself? Uh your overall tax situation, uh, your family obligations. Uh, you know, do you take care of other people in the family, uh, especially financially, right? And then obviously your long-term goals. Uh, if you are making $200,000 a year and you want to retire with $15 million, you got some savings to do.

SPEAKER_03 3:51

Right. Right. Yeah. I mean, and it's again going back to the percentages thing, you know, there's a lot of things. If you go online, there's some great resources out there just about building a budget, um, lots of sort of heuristics. But, you know, if you're saving 15%, that doesn't really mean anything unless you put it in the context of what you're actually trying to do, um, and how much you're making, like you said, how much you need to retire on. So, you know, saving less money potentially could be on track for your goals. So, um, you know, as an example, and we we work with a lot of pilots here, so I'll bring that up. They have the large employer um contribution that goes into their 401k. So, for you know, I've had a client once that was trying to get out of debt, and I had them basically for a short period of time, a very short period of time, with an end goal insight saying you're not saving to the 401k, let's eliminate debt. So that may you may not have that option. Um, but that's an example where for their plan, it made more sense for them actually not to be saving for a very brief period of time and basically get out of the hole. Yep. Um, if that makes sense. So again, this is all just very uh driven by your goals. Um, and just going by percentages isn't necessarily the best thing to do. Um, Vanguard puts out an annual study. I think Fidelity does too. A lot of these places put out studies just on all of the data that they have, you know, running employer plans and things like that. Um, they said that the average uh basically contribution to a defined contribution plan, which is basically like 401k, 403b, was about 7.7% in 2024. And the median was 6.8. So again, that's not necessarily to tell you that that is what your goal should be. Yeah. But it does tell you what sort of the average is and then what the middle is. Um basically they also said that they most people should probably be targeting 12 to 15 percent, you know, contribution mark, which means based on that, you know, those two figures, most people are probably under saving. Um, you know, again.

SPEAKER_04 5:59

And maybe don't even realize it.

SPEAKER_03 6:01

Yeah, exactly. And it again, it all goes back to what is your goal and what is what is your plan say that you need to save um in order to meet your goals.

SPEAKER_04 6:09

So when someone says, Am I saving enough? Uh the follow-up should be enough for what? Um, enough for when, enough to support what kind of lifestyle in retirement, um enough in the right account types, right? So Roth, um pre-tax 401k, or just a brokerage account, no annuities. Uh enough after taxes and inflation are considered. So people don't always um don't always take into account inflation when they're doing long-term planning. That that's that's really important to look at. So you know, I think a lot of people walk in and that is the question, I don't need I don't know if I'm saving enough for retirement. And those are all the things, all the steps we go through in a planning process to try to figure that out.

SPEAKER_03 6:57

Yeah, and that's why we I would say we start with goals, we work off of that and sort of work backwards. Um, and so for some people that may mean that we get into the nitty-gritty and say, you know, go down to the transaction level of, you know, essentially your spending and say, okay, like, you know, what can we do differently here? And how do we get to the saving number that we need to retire? Um, but that's why we start with the goal first, as opposed to um, you know, just diving into the cash flow first. Because, you know, a lot of our clients are in a situation where they may not need to have that granular, and we'll we'll talk about some of the different approaches to this, but why they may not need that granular level of budgeting.

Who Can Ditch Line-Item Budgets

SPEAKER_03 7:43

All right.

SPEAKER_04 7:43

So who doesn't need a traditional budget? Uh, there's obviously some people who may not need a detailed line-by-line budget. Um, they I would argue that they still need awareness, uh, but they may not need to track every category every month. And we I see uh some really inspiring young people as they come through for planning and they have spreadsheets on everything. Like, you know, we're not using soft scrub anymore. We're now switching to something else because this one, this one's costing us a dollar more than the you know what I mean? Yeah, uh, and you see that and you're like, man, that's awesome that you have time to go figure that out. Like, I just grabbed, I just I mean I don't go shopping, but yeah. The point is I just grab whatever because you know I'm at the point in my life where that's not as important to me. It's more about my time, right? How can how can I be in this office more? Right. Doing the things that I need to do for for the people who pay us good money. That's that's that's my um that's my goal. But other families, especially younger ones starting out, um may need to think differently and have line by line budgets. Uh there's also there's also um the whole total flip side of that where you're now debt free, you don't even have a mortgage. And as long as you're still paying yourself first, um, and you have a goal in mind, which is typically something to do with retirement, yeah. Um, then then maybe you don't you well, you definitely don't need to have line by line budgets anymore, right?

SPEAKER_03 9:09

Yeah. So another an example of that is like basically automatic savings. So this is sort of a version of the pay yourself first system, if you've ever heard of that. Basically, you know, any of your retirement contributions are going to be automatic. Usually, you know, you have an auto draft set up to your savings account. So whatever uh, you know, monthly amount that you are planning to save to cash is automatically getting pulled out. Um, you know, debt payments maybe are automatic as well. Um, and then obviously you're not it's it's less of a retroactive uh approach. So you're saving up front as opposed to waiting until you know you you're at the end of the month or the end of your pay period to see what's left over and then just saving the remainder. Um, so that's sort of the the first type that we looked at here.

SPEAKER_04 9:56

Yeah, for this person, uh major parties are handled uh before discretionary spending even happens. So all that money is out and gone. Uh they they typically um uh can make a traditional budget a lot less a lot less necessary. Uh I call it the pay your first system, pay yourself first system, as long as the money's going where it's supposed to be going, uh and in the end you could take your checking account to zero theoretically, and you'd be just fine.

SPEAKER_03 10:23

Yeah, so then there's kind of a flip side to that. And I would say, I would say most people probably fall into that first category, um, at least between these first two. Um, the second is basically if you really have a very tight, I don't mean tight from a limitation standpoint, but tight in that, you know, you know exactly what you spend down to the dollar, you know, maybe you don't necessarily save everything first. So if you have a very fixed budget and, you know, for whatever reason that's the way that you want to build your budget out and then save the remainder, then that's another thing you could do there as well. Um, I would still say that between those first two, it makes more sense to do the typically pay yourself first. Um I I I just I prefer automation and I I just think that it makes more sense for you to basically take the human element out of any of this as much as possible. Um, because humans are you know able to make errors, whereas an auto draft is a little more consistent.

SPEAKER_04 11:27

Yeah. Yeah. Uh I I mean going back to the steady spender, um, they don't need to track every restaurant subscription or target run. Uh they just may need periodic check-ins, right? Right. So that that's um they're not relying on credit cards, you know, to bridge any gaps, cash flow is their cash flow positive.

SPEAKER_03 11:46

Right. And I guess that could also apply to retirees too, maybe where like maybe they're not budgeting, but they live on a certain amount and they kind of know exactly what it costs for them to maintain their lifestyle. Um, so the other, you know, option here, and this is typically what you're following when you're working with a financial advisor, is basically the goal-funded household.

Goal-Funded Planning And Cash Priorities

SPEAKER_03 12:08

And so um, if you've done planning and you've identified exactly what you're trying to work towards, as opposed to just kind of saving with the, you know, the future still kind of in front, and you're maybe that's like less defined for you, kind of in that first situation. This is where we, you know, like we would go through in our financial planning process and we build a plan. We, you know, obviously the the first thing we're working for is retirement, but um, in terms of the planning, but there's other things we can always build in there, whether it's, you know, as basic as setting an emergency fund or, you know, there's college, there's travel, there's home renovation projects, there's second home purchases, there's all of those things that we can build in and look at. And then you can base your budget sort of off of what we need to do to get there. And so that's, I would say, you know, our our planning kind of ends up being kind of a hybrid between type three and type one, if that makes sense. Because you're really like the, you know, like some people at the firm here, they call it like the heart of the plan. You know, so whatever your family mission statement is that we come up with, um, that may be the driving force behind it. And so these those things I just listed out, you know, maybe it's travel or maybe it's you want a family gathering place in the future um for, you know, your kids and your grandkids to to go to the mountains or something like that. Um you know, if that's like what's driving the plan, maybe how we actually get there is by auto drafting or by setting those percentages properly after we've done the planning. So that's what I mean by it could be some sort of hybrid, basically.

SPEAKER_04 13:45

So the for them, the question is that can we can we afford it? That that's not really the question. It's really more where should excess cash go next. And they would go down that list of their goals and and fund opportunity money for uh a second home or you know, add more to college or whatever.

SPEAKER_03 14:02

That's a good point. And and for some people, you know, depending on, you know, maybe they get a large inheritance or they sell a business or something along those lines where they have a large windfall, maybe they weren't planning for, um, or maybe just their goals are more limited in scope. And so they have a lot of excess funds. That's kind of where sometimes the plan or or maybe what you're on track for dictates the plan a little bit as opposed to the goals dictating it. And what I mean by that is sometimes you just have a lot of excess um net worth, I guess you could say, um, that maybe you've met all your goals, you've done all the things that you really want to do. And then it's like, okay, well, how do we structure this and how do we actually, you know, make sure that you're living out again that family mission as opposed to just checking off boxes on the list of, okay, we got the travel budget, we got the second home, we got, you know, you know what all those things, but that's where it becomes a little bit broader scope.

SPEAKER_02 14:59

Not

When “No Budget” Hides Problems

SPEAKER_02 15:00

all financial advice is created equal. Available now. Everything your financial advisor won't tell you. An eye-opening book that reveals what's really happening inside the financial industry and what it takes to build a plan that actually works. Because what you don't know could be costing you.

SPEAKER_04 15:19

When I don't need a budget is actually a warning sign. So a lot of people think they don't need a budget. So there's a so there's an other side to what we just talked about. Um, some sometimes people feel like they don't need a budget because everything's fine. They have they make good money. Um, but it's fine, can hide a lot, right? Yeah.

SPEAKER_03 15:37

Yeah. So sometimes being a high earner or even just earning a comfortable salary can cover up a lot of problems. And so like today may feel really good, but that doesn't mean you're setting yourself up well for tomorrow. Um, so that's one thing that obviously we can address in planning. Um, and like we referenced that Vanguard study earlier, a lot of people are saving and kind of just assuming everything's gonna work itself out. Whereas um we're not, you know, they're maybe not starting with the end in mind. And so that's that's one thing that a large income can cover up. And because it everything feels good now, you have a you know, a lifestyle that you're used to. And the problem then is okay, you have a lifestyle that you're used to, but can you fund that when you stop working? Um, and that's that's a problem that that people run into. Um yeah, so I mean there's there's a some other things baked in there. Maybe you have a large uh amount of investment accounts, but you don't have enough liquidity. So that's another example. You and that could really just be more than um investment accounts. So maybe you have a large net worth, but it's all tied up in illiquid assets, so you don't actually have liquidity to fund your lifestyle. Um bank rate is another one of those examples that we had where they do annual studies about savings and basically trying to get a finger on the pulse of what the average American is experiencing. And it said that only 47% of Americans had enough liquidity um basically to cover a thousand dollar emergency. Um, so you know, the same report also found that 60% of Americans are uncomfortable with their current level of emergency savings. So that's one of those things where in meetings with clients, I'm like going through their assets, usually in the second meeting, and we set an emergency target. And it's like, this is not a very like sexy recommendation, you know, but it's like this is just kind of table stakes. You need to make sure that you have adequate emergency reserves.

SPEAKER_04 17:31

So, what are some warning signs that someone may need more structure?

SPEAKER_03 17:34

Yeah, I would say I mean, obviously, credit card balances. I would say that's the number one thing that I see because it's another way, kind of like we mentioned with higher income. It's another way for people to cover up a spending problem because they are still up, still able to spend. Um, but they're accruing debt to do that. Um, you know, um, obviously, I think I mentioned this on a previous podcast, like maybe once, you know, back in college, like I had an overdraft fee or something like that. It's like, you know, things like that are are obviously signs that you need to make sure you know where what you're spending and what's getting auto-drafted, with, you know, that's the flip side of the auto-drafted, you know, we we're talking about auto drafting savings, but now it's like all your bills are automated. So if you're not paying attention to what's in your account, then that's a problem too. Um, if you don't have a clear emergency fund goal, so maybe you're just saving kind of indefinitely and you don't actually know what that should be. Um, you know, feeling like you don't make enough money when you actually are making a good salary, I feel like that's a that's another one. And I feel like that is pretty common. Um, you know, saving for retirement, but neglecting short-term needs. Um, we mentioned, you know, if you're a pilot client, this is actually one that I've seen kind of frequently with that too, because there's, and it doesn't necessarily have to be pilots, but sometimes people think I have to be saving for retirement. And again, because they're not necessarily planning ahead, they're kind of maybe they're on the saver end of the spectrum, but they're not funding their current needs as much either. So they're they're living a miserly lifestyle or something, you know, and and it's just like that's where we have to decide where to make those trade-offs. Um, because if you're saving everything into the future, but your kid needs shoes, that's probably not the the right thing to do, right? Right. Yeah. So I mean, there's some other listed here. I feel like that covers the the gist here. Um, lifestyle creep's another important one, too.

SPEAKER_04 19:29

Yeah. That that's I think that's probably the most important. Um you know, sometimes the issues that someone's not irresponsible. It's just that they work hard, they keep grow, you know, they grow into club memberships and other things, right? And it keeps it keeps building and building. Uh so that that income becomes quietly becomes part of uh their necessities, right? It's no longer the you know, I think if anybody listening to these podcasts thinks about what their life cost them when they were in their 20s uh versus their 40s, it's a big difference, uh especially if there's kids, right? Yeah, but you end up having bigger houses, nicer trips, more more convenience spending, more subscriptions, more activities. None of these are bad. None of that's bad. Uh, but you just you have to have a line item for those things to make sure that you don't creep into the point where you still can't save uh for the future. Um so let's let's talk about the uh the anti-budget.

The Anti-Budget With Automation

SPEAKER_04 20:25

So this is a great option for people who hate budgeting but are financially responsible. So what is anti-budgeting?

SPEAKER_03 20:33

This is a again, I would call this probably pay yourself first, but the idea again is I mean, people hear the word budget, some people and they just shut down. So I think that getting away necessarily from calling it a budget is one thing that if if that's what it takes to trick you into doing this, then then that's what I would do. Um, and then also it's like, okay, maybe you know, I know some people, some people that work here that put all their expenses into Excel and they look at it, that's how they budget and more power to you. You probably have a better, you know, idea of what you're spending than I do. Um, you know, but the you know, the flip side of that is as long as you are again automating the important things that you need to do to save, and then spending, you know, what you don't need to save. Um, basically treating your paycheck, or so think about your savings like your paycheck. You know, you get, you know, your healthcare and your taxes and your um, you know, 401k contributions all withheld. So if you kind of treat it like you're withholding from yourself, then that kind of solves a lot of the problems as long as you're not spending what you need to be doing to stay on track.

SPEAKER_04 21:42

So this works best when income is stable. Uh you don't have crazy credit card debt or high interest credit card debt. Uh emergency savings are already in place, retirement savings are automated, uh, major short term goals are funded. So the car you need to buy next year, the room for the HVAC. uh and then spending is not uh consistently exceeding income. That that's when uh all this automation part can work uh can work really good. I I will say too for business owners it is tough keeping on on track in a growing business on your tax liabilities. Um our business grows twenty to thirty percent a year and every year I stare at a number and go this is crazy. And it's and so I say that to be empathetic to our business owners it's it's so tough you have you have to you have to constantly stay on top of it to say okay where's my business trending right now and in some cases you got to look at it every single quarter. And the years that I haven't done that it's it's been uh almost debilitating like you know you just I go out and just hit a golf ball as hard as I can for like two days just in anger. Yeah partially because I should have known better and partially because you know this is ridiculous how much tax they they charge in this country. Yeah. Yeah and other countries are way worse but but um for business owners you you have to stay you have to have a tax plan tax strategy so you're not surprised because that can that can wipe away all your reserve at the end of the year if you're not careful. Um so so anyway but that that's something that can be automated.

SPEAKER_03 23:12

I would say that also applies to pilots too because the the irregular piece and then you know knowing what you owe in tax at the end of the year is important too because that can come out of nowhere for some people if they're not planning ahead. So that that same thing basically applies in that situation. Yeah so I mean basically in order to implement this you basically would need to cover your fixed obligations automate retirement contributions automate your you know cash or emergency fund um automate any savings for short term things so this is really getting into the nitty gritty but basically automating your budgeting so like if you have just a uh you know a separate account or maybe a bucket if your uh you know bank allows you to do those um for car expenses and just sort of things like that. Um tax money is also another important thing like we mentioned and then after that then you can spend the rest with flexibility. So it's a way of sort of amortizing what's to use a nerdy word right amortizing your expenses over you know a a a period of time as opposed to paying for it all at once. So anti-budging is not really careless spending it's just you don't budget but you have automated savings going to different places that you know you that you structured it you sat down and structured at some point almost like a budget I guess um but it it's it's a little more free I guess uh in and just how it operates right well yeah it it allows you to maybe feel like you're spending carelessly but right it's you're not because you've you've basically created all these other accounts or buckets or whatever your system is um that allow you to spend you know to zero in that other amount so and then actually uh anti-budget works better uh than a detailed budget for some people simply because they'll actually follow it you know you go and create a detailed budget and say okay we're not gonna eat out more than thousand dollars this month and then you know at the end of the month you're like oh we blew through that yeah well that's the thing is like a lot of budgets are retrospective and and sort of like oh well we didn't do that this month and then you know it it's also time consuming even like you know like I use a a tracking software where they need you like it tracks everything and and but it still wants you to go in and and basically approve the transactions so that and I think that's a behavioral thing uh with they're trying to make you look at it basically but it's still annoying and time consuming. Um and then if you have the other side of things where it's literally just uh tracking everything and then you basically just go in and look at it it's again it's like a retrospective so it's not really proactive whereas this approach is more proactive.

SPEAKER_04 25:45

Yeah.

Irregular Expenses And The Two-Account Fix

SPEAKER_04 25:46

Um so let's talk about the real problem with budgeting which is irregular expenses you can have the best intentions you write down a budget any of these processes right you write down any any of these budget techniques you could you could pick one uh but so that what happens is a lot of people think they're bad at it because this the car breaks down or the you know there's school fees you didn't think about geez man welcome to that world you got you got you get a few a few years a few more years before you get into that but uh but yeah there's a fee for this and a fee for that and after a while you're like oh my gosh like even the public school people probably feel like they're in private school because all the all the all the expenses yeah um sports and all that too well sports are that's a whole different yeah especially travel sports but because um of irregular irregular expenses uh they think oh I blew my budget I blew my budget so how how do you work around this yeah I mean just building that cushion and then that would be the baseline recommendation but again going back to kind of what we've already talked up talked about is making sure that you have those those buckets um for you to cash into if you need to um things that are you know are gonna happen if you have a car you know that over time you're gonna have to start repairing things or um you know even just doing regular maintenance so yeah that's something that you know is gonna happen it's just when is it gonna happen?

SPEAKER_03 27:09

Your wife's gonna have a birthday every year. You know it's coming. Right. Yeah there's gonna be a Mother's Day every single year. Yeah whatever it is right that that definitely comes every year.

SPEAKER_04 27:17

It's almost like you should have two accounts you'd have you emergency reserve that sits over here then it just needs to be general savings. Right. And that that's gonna go up and you're gonna spend some of it down it's gonna go up you're gonna spend some of it down right but but the the true I lost my job or I'm disabled temporarily that money sits in a different account.

SPEAKER_03 27:35

Exactly but I have seen people who have uh multiple accounts and this is my travel fund this is my home maintenance fund this is my future car fund this is that's a lot of checking account yeah I've heard of the system with like multiple debit cards and it's like the like have you ever heard of like the Dave Ramsey thing where they they do like the envelopes it's like a digital version of doing the envelope system which is just crazy to me that you like I would not even be able to keep track of that. No I just sounds like how big is your wallet like like a book you know but well all your all your different accounts but I would definitely use the wrong one. Yeah no I don't I don't think that's very manageable but but making like you said I think the two account structure is probably the way to go you have the the large emergency savings and then you have a this is my you know yearly you know insurance and uh repairs and all that sort of stuff in one account how does someone know which system they need that's a great question um you know if you carry credit card debt or obviously if you're spending more than you earn you don't know where your money goes you see all of those you know basically red flags that we talked about earlier then you probably need to get into the transaction

Choosing The Right Budget System

SPEAKER_03 28:48

level detailed analysis of doing a trend a traditional budget. Honestly you probably should do it in Excel and just or or on paper how whatever way works best for you but like literally where you're planning it out. Because if you're negative cash flowing like you definitely have a problem and you need to fix that because that especially if you're putting that on credit cards that just multiplies over time and you're really getting into a bad position. So you need to rip the band-aid off and like get serious about that. So I would say the traditional budget goes in that category of um you know if you're there's you're experiencing some of those those warning signs, that's where you really need to to start with a very detailed budget. If that's not you then you may only need guardrails uh if you're saving well but your spending feels inconsistent um you have maybe competing goals uh you have frequent large purchases you want more clarity without tracking every dollar um or you need limits around categories like travel dining out hobbies home projects so some examples would be like a monthly discretionary spending cap so you know that that I can only spend X amount of dollars on anything that's not part of part of like the core right of living or you could have a separate travel account you could have an automatic uh taxable investing yeah uh quarterly cash flow review so you kind of look every three months go back and look see where your cash flow is gone um or an annual spending review you know bank accounts now do this for you um most bank accounts have have uh anything that transacts through that account they try to put it into a category I think it's the credit union is like it's money management or manage money something like that it's a tab uh I I've seen it in in client accounts also uh at at various banks yep um separate account talked about this earlier separate account for irregular expenses uh could be could be beneficial um you may not need a traditional budget yeah like if you're basically if you're following the plan you know you've got the appropriate savings that's obviously driven by whatever goals you're working toward you have an appropriate emergency fund you know no really bad high interest debt from spending essentially um your spending is stable you know you actually have a plan for where your excess cash should go so you get that bonus or you have a really good month you know maybe it's a sales position or you you know pick up some extra trips if you're a pilot, you have a really good month, you know where that extra cash should actually go. And ultimately if you have an advisor that that also helps too because um as long as long as you're at least for retirement or these other goals, you know, you're filling up those buckets or um you know maybe it's a retirement account or something like that. You know you're on track for that as long as that's actually you know been recommended, approved and then you're actually doing it you may not need a traditional budget and you could kind of default to one of those other options that we mentioned where you're doing sort of like pay yourself first or the anti-budget you know those those sorts of options.

SPEAKER_04 31:52

So the goal is to graduate from budgeting completely and and and find or at least find the the the system that's least restrictive but keeps you on track.

SPEAKER_03 32:01

Right. Yeah I would say know what you're spending but it doesn't mean that you have to have a an Excel sheet of every single transaction you're you you know you're doing yeah um you probably should graduate from that at some

Wrap Up And How To Reach Us

SPEAKER_03 32:13

point.

SPEAKER_04 32:13

All right well that was very insightful uh William thanks for putting this together yeah of course uh thanks for listening to today's episode if you want to learn more about wiser wealth management or speak with one of our uh fiduciary financial advisors you can do do so by going to wiserinvestor.com thanks for listening we'll see you guys again next week thanks for listening to a wiser retirement podcast we hope you enjoyed today's episode make sure to subscribe wherever you're listening that way you don't miss any new episodes we'd also appreciate if you could leave a rating and review.

SPEAKER_00 32:43

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