Talk Wealth to Me

#001: I'm on a Budget

April 26, 2019 Felipe Arevalo, Chase Peckham, Katie Utterback Season 1 Episode 1
Talk Wealth to Me
#001: I'm on a Budget
Show Notes Transcript

You're listening to Talk Wealth To Me, the safe-space money podcast where we discuss anything and everything related to personal finance.

One of the first questions you may be asked when you ask for help with your money - whether that be through a wealth manager, tax preparer, or financial advisor - is whether or not you have a budget.

Myth #1: Budgets are for the Mega-Wealthy
Did you know nearly 93 percent of the public believes everyone should create a budget, but a majority of us are not creating budgets?

Yep, about 63 percent of us are not creating a budget whatsoever. The number one reason why? Most of us don't think we earn enough money to necessitate the use of a budget, but a budget is even more valuable when you have less.

How can that be? When we use a budget, we are tracking our income and our spending to ensure that we are not spending more than we are earning.

Myth #2: Budgets are great for limiting big-ticket spending
You may think if you're not in the market to purchase a home, a new car, boat, or plan a vacation, you don't need to create a budget.

Oftentimes we view those in debt as individuals who were irresponsible with their money and used a credit card to purchase an item out of their price range. But as it turns out, most budget-busters are items that cost on average $20 or less. Why? Because we are not thinking about how these little items add up over time and cost us big time.

You've likely heard the example of getting coffee from a coffee shop in the morning. If you plan to spend $5 on coffee every morning in your budget, you likely won't be surprised by the amount of money you spent on coffee in a month. However, if you think your $5 daily habit isn't that expensive, what do you think about spending $25 on coffee per week or $100 a month? Is it more than you realized you were spending?

Myth #3: I have to cut cable if I'm on a budget
Another myth about budgets is that if we're in debt we can't spend any money on any entertainment. A budget is a PERSONAL decision. Meaning, if you don't drink coffee or you're content with brewing your own at home, you can apply the money you save from coffee toward an HBO or Disney Plus subscription.

The point is that a budget is a personal decision. The only MUST with a budget is that your spending MUST not be greater than your earning. If it is, well, that's a topic for another day.

Comments, questions or suggestions for the show? Email us at [email protected]

To learn more about DebtWave Credit Counseling, visit our website or connect with us on Facebook, Twitter, Instagram, and LinkedIn.

To learn more about the San Diego Financial Literacy Center, visit our website or connect with us on Facebook and Twitter.


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Intro:

Welcome to Talk Wealth to Me, the safe-space podcast where we chat about anything and everything related to personal finance.

Felipe:

The information contained in this podcast is for educational and entertainment purposes only. It does not constitute as accounting, legal, tax, or other professional advice.

Chase:

Hello and welcome to Talk Wealth to Me the very, very first edition. I am Chase Peckham, I am the director of community outreach here at the San Diego Financial Literacy Center and DebtWave Credit Counseling, who are bringing us this incredible podcast and I am here with Katie Utterback and Felipe Arevalo. We are here to talk what today fellas?

Katie:

Wealth.

Felipe:

Money.

Katie:

Money.

Felipe:

Yeah.

Katie:

Budgeting. Oh and happy financial literacy month guys. It's April

Chase:

Financial literacy month

Felipe:

Oh yeah!

Chase:

April it is. April it is, we're coming almost to the end of April.

Felipe:

It's almost May.

Chase:

It is almost May, but financial literacy month has been a big topic of conversation around here and the fact is as Felipe and I commonly laugh or giggle at to ourselves is that financial literacy month is every month.

Felipe:

It's every month. Otherwise, those 11 months, you can't make up for it just in April.

Chase:

Well, it's kind of like everything else. It's like is July national diet month? I mean, no.

Katie:

Not July for me. The Fourth of July without a hot dog?!

Crosstalk:

Yeah, that's true. Can't do it.

Katie:

I'm not really willing to give that up.

Chase:

Can't do it. Yeah, I agree with that. I mean, so the point is is that we want it to get to a point where everyone is consistently thinking and working on their finances without having to think about it. Right. It's not something that you, you want people to just go, oh, it's financial literacy month. I think I'll follow a budget this month.

Felipe:

Yeah, you want to turn it into a habit and just make it into something that is your everyday life and it's something that you just do constantly. It makes it easier. You don't have to concentrate on it after it's become a habit of yours.

Katie:

But you know, I think for a lot of people myself, I used to include myself in this. I was a journalist. I didn't like money and numbers. That was hard for me, but I considered myself to be intelligent. So to say that I needed help with a credit card that seemed a little like something felt wrong, like it was almost too embarrassing to ask for help.

Chase:

And that's common theme with the majority of people that we work with, that we meet, upwards of 25,000 of them a year. That is the common thought processes. They only ask and reach out for help or for information when it tends to be a little bit late in the process. There's a crisis going on right here. Either they're drowning in credit card debt and, and they're getting phone calls from creditors or they're possibly not going to make the mortgage payment or rent payment. That's when people tend to reach out for help. And uh, that, that's a little bit, honestly, it's never too late, but that's about as close as it gets.

Felipe:

Yeah. Oftentimes it's, you're, you're hearing the story and you're, you're telling yourself you'd have so many more options. If you're called me months ago and, and we would, you'd have more options. You'd have more things that you can do and now it's, you know, you're, you're very limited to what you can do at this point.

Chase:

Yeah.

Katie:

It's like going to the doctor you go when you have a slight tickle in your throat, you may find out that you had strep or something within 24 hours if you get that shot, you're good to go or something, you know, or even something a little bit more serious, like your appendix or something. Yeah. You catch that early on your chances are better.

Chase:

That's right. If you look at the symptoms a little bit earlier and reach out for help or, or look at least look into the information prior to, you're going to be much more apt to handle the situation that you're in, but again, it gets back to people wanting to talk about money and that can be very difficult and embarrassing for some people because it is a very private thing knowing how much money, you know, letting people know how much money you make versus you know, how much debt you have. And, and honestly looking in, a lot of people don't even want to know the real situation they're in. They don't even want to look in the mirror and really be honest with themselves. They'd rather just kind of ignore it because as anything goes right, we don't want to necessarily take on negative information. It's easier to just kind of ignore it.

Katie:

I agree with that

Felipe:

that's true and happy things are easier to deal with.

Chase:

Yeah. But the fact is though, that that situation's still might be there. And, and one of the major ways of, of handling that, and I know that this is something, uh, that we talk about often that we do the majority of our presentations, uh, have to do with the budget.

Katie:

That's your number one presentation? Budgeting?

Felipe:

It is in one form or another. Uh, you know, depending on who we're presenting to. But budgeting. Yeah.

Katie:

Interesting.

Chase:

And why is that? Because everybody knows what the word budget is. Right. And we will commonly ask people in our, in our presentations is what is a budget to you? What do you think of when, when you hear the word budget? So Katie, I'm going to put you on the spot. What comes to mind when you hear the word budget?

Katie:

Originally when I used to think of budget, I used to take that as you're putting a limit on how many new clothes I can buy. That's what I thought and worse than that I thought I didn't need a budget because on a journalist's salary of $28,000 once I paid my rent, the rest was for champagne or like whatever, whatever I wanted. I thinking about it. I think I had one class with Felipe when I first started working here, I suddenly learned what a budget was. It was making sure that I wasn't living beyond my means. My whole life changed.

Chase:

It's a big deal.

Felipe:

Oftentimes we get things like word budget, what feeling does it bring? Scary? Stress? And when a good budget can be quite, quite the opposite. It can be a stress reliever. It could be remove fears about money because you know now where your money's supposed to go and now you're aware of the situation and you have a clear plan to move on and you know, accomplish whatever those, whatever your financial goals are.

Speaker 3:

Yeah, you hit it right on the head. And, and Katie mentioned it right at the beginning, but it's limiting, which is a negative kind of connotation, right? And you hit it on the head 100% is that we have a tendency to think that a budget would be limiting to us when it's not. It's just the opposite. That's knowledge, right? Budget. We say it all the time. A budget is knowledge. And I mean we, we talk about how many, how many do you use a calendar ?

Katie:

For events? Oh yeah.

Chase:

Here's a calendar for your day.

Katie:

Absolutely I have, I would be lost without it.

Chase:

You'd be lost without it. Right? So you'd feel like you'd forget all about it. I know Felipe, with the amount of stuff we have going on every day,

Felipe:

Multiple calendars

Chase:

Personal calendar. Right. And if we didn't have that, we would forget that. We had an appointment here or we had a presentation there, or we had to get the kids to soccer practice and baseball practice and everything else and essentially we're doing what with our time. It's time management. Right. That's a nice way you would put it. But essentially we're budgeting our time to use it in the most efficient way and not forget. So why wouldn't we do that with our own personal finances? That's the question that most people have to ask themselves is how can we do something efficiently if we don't know how we're really doing it? We're just kind of spinning our wheels through the days and it's not that hard. But yet as you'd said earlier, that as a journalist student that you felt like I hated numbers, I wasn't good with them and everything else. The honest truth is you don't have to be good cause I'm not either. But you don't have to be good with numbers.

Katie:

You're right, I was limiting myself to use your own word, and I was coming from this place of like scarcity almost where it was, I wasn't necessarily thinking about a budget as being a roadmap to get what I wanted. I viewed it as this thing is limiting what I'm trying to spend. But now after I listened to Felipe, he was like, Hey, are you paying yourself first? You're going to work, but are you actually making sure that you're saving money so that if something happens to you, you're okay? And then it hit me. I was not doing that.

Chase:

Most of us don't. Most of us save last. Yeah, whatever's leftover. And the fact is that most of the time there aren't, there isn't any leftover. And what there is leftover, you're not going to deplete and put into your savings because you want that little nest egg to be there in case something happens at the end of the month. So yeah, it's got to, you've got to flip the thinking. You know, we pay everybody else at the beginning of the month. Why not us? Why not pay yourself, pay the most important people in your life yourself. And then, I mean, we do it with our 401k's, right? That comes out of our paychecks. Um, all the different. Um,

Katie:

But even with a 401k - when I was making $28,000, I didn't feel like that was enough money that I had time to save. I didn't contribute. I didn't choose to contribute to a 401k at that point because that was again where every dollar was like, I need to spend you. You are limiting me.

Chase:

Gotta have that champagne? (laughter)

Katie:

When you interview attorneys all day, there's sometimes a need, for a little bit of bubbles.

Chase:

I can only imagine as much as I had a father that was an attorney too. Yeah. I would imagine you need a lot of bubbles. So Felipe, when we, when, when you meet with people, uh, and you'd get, you get the opportunity to meet with people one on one, uh, here at the SDLC quite a bit. Yeah. So how is it that you go about with talk, this sensitive subject, people that are typically scared or frightened? Um, just very apprehensive. Uh, how is it that you handle, uh, working, uh, and talking about money with them?

Felipe:

Yeah, the first step is going to be trying to put them at ease because if they're coming to you, oftentimes you, as you mentioned earlier, they've reached a point where they realized, Oh wow, I really need help now. So it's a matter of, you know, trying to put them at ease and trying to gain their trust is important to have that trust between, uh, who, who you're talking to. Otherwise, why would you share a very personal information like your money with someone you don't trust. Um, and then the first step of the actual talking about money is going to be finding out what their goals are. Finding out why do you want a budget, why do you want to save? And we all have financial goals, whether we have sat and thought about them as financial goals or not because we all have something we want to buy, something want to save for. And you know, nothing out there is free. So you have to, you know, figure out what their goals are and then have that be the motivating factors so that they stay on budget. So that that I could put numbers on a piece of paper and say, here's your budget. But if they don't go home and live that budget, it doesn't have no good.

Chase:

Yeah, and that's that is exciting, right? It's putting something in front of you that you can accomplish and if you are, have something to work towards, if you have something that you are, no matter what the motivation is, if you have something to work towards, you're going to tend to stick with it. You're going to tend to want to accomplish it. Where if just the opposite, if you have nothing to work towards, you're just spinning your wheels and there's not really that motivate. It's just out of desperation and fear that you might do the budget for a little bit. But that longstanding short term goals and long term goals is incredibly important.

Katie:

How often do you guys recommend people buy budget? I mean, is this something that people should be updating weekly, daily, monthly? Every six months.

Felipe:

Initially, I think it'll take a little bit more, uh, attention is if you've never budgeted before, if this is your first go at it, you may fail the first time. In fact, you may fail the first few times. Uh, it doesn't always come naturally to most people because as it more fun to save money or spend money. And sometimes for most people it's spend. Uh, but you know, initially it will take a lot more revising a lot more until you get it right. And then, you know, you can do it maybe like a monthly budget checkup if you have a significant other, you want to schedule a budget date night or personal finance night where you just talk about money and anytime you have any big change to your personal finances, you move, you, uh, your pay changes in any way. You buy a car or you planning on buying a car. Hopefully you look before you buy it. Uh, you know, you end up having kids or adopting a puppy, you know, it's all going to be a different, shifting your finances. So you want to go ahead and revisit those, uh, preferably before you, you make the expenditure so that you're prepared for it.

Chase:

Yeah, I mean that's the funny thing is, is budgeting really, honestly, eventually will become a daily thing. Um, as you are watching what you're, you know, where you're kind of documenting where you're spending your money. Now, when I say a daily thing, that doesn't mean you're spending consistent time on it every day. It could just mean that you happen to, you're, you're keeping track of what you spent on an, on an APP or, or in a software that you like to use on your home computer or your laptop or whatever it may be. But it's really just kind of being an accountant for you are the CFO of your, of your home. Right? I mean, I'm married and she's probably the president, CFO, and I'm the, I'm, I'm the director in there somewhere. But the point is we discuss kind of where our money's going. We know, um, once a month it's like a meeting, just kind of where we are, how we're doing. Oh, you know, this month, oh man, you know, Clay's, uh, baseball, travel, baseball team came out and we, uh, we owed, you know, so much for that. So that's gonna that's gonna put a little dent in us. So we're going to have to be caring, you know, we're going to have to figure out taking somewhere from something. Uh, but that's something that we do. It's now a consistent thing and that that takes a while. It's not always the way it is, but it eventually will become a whatever's best for the individuals. The, the important thing is is that they just do it and the more often they do it, the more they see that they're gaining ground on things, that they're actually putting money away that they are actually not, you know, having to use the credit cards every month to, to spread that gap to try to, you know, as Brad began, I used to say all the time and it made me laugh as you want to make sure that there's a more month than money instead of a year or there isn't more month than money that you, that you have more money than month. And that's really, really important to kind of think of it that way. And once you get into that kind of style, that lifestyle, it just becomes like anything else when you wake up in the morning, like when you're, if you never worked out and now you get up and you're trying to get up at four o'clock in the morning to work out because you don't have any other time, that first couple of weeks, that month is going to be excruciating. It could be really, really tough. Once you do it every so often or you're doing it every day, then it just becomes of your everyday life. It's part of you. It's something that you just do naturally, so it's not something that you're working a that's out of the norm for you. So if it's just a matter of literally creating those goals that you talked about earlier, finding out what it is that you're going to, it's going to take that you think it's going to take to accomplish those goals and taking those baby steps to do that. Once you do that, it just becomes like your everyday life.

Felipe:

Yeah, and you mentioned working out, it's like if you're in the habit of working out all the time and you skip a day or two, you start to feel bad about it and you started saying, Whoa, I didn't go to the gym. Why did I skip it? You know, budgeting becomes the same way. If you budget all the time and then all of a sudden you go out and buy something you shouldn't have bought, you start to second guess yourself and say, Oh wow, why did I buy that? Because it's become proper money management has become so ingrained in what you do that when you fall out of it, you know, and, and we, we all can fall out of it from time to time is, you know, you start to ask yourself, why did you do that? Why'd you buy that? You know, well, why didn't you hold back?

Chase:

And that's always easier said than done because there's the human element. That's true. Most purchases that we make, most decisions we make are emotional. And we're, we're, nobody's above that. My wife is extraordinarily at type a personality, but yet even she, and even, I mean, we both, even though we do this for a living, we still go by things that we wouldn't normally go do because it's, it's emotional where at a certain point where I really needed those genes or I really needed that car, or whatever it might be, you try to make the most educated guess you can. But if you're just keeping track enough to where you know that, okay, this purchase isn't going to affect my rent or this purchase isn't going to affect, uh, the kids' school, or it's going to affect whether I can put gas in my car, then that, that you're in a better state. If that's the case, it's you got to leave. That's what the budget does. It allows you to have room to make those purchases that you mentioned, and I think you said it at the very beginning of the podcast here is, is that it's going to let you feel, feel more freeing. You're going to have the better ability to spend money than you thought. Yeah.

Felipe:

It'll make it easier.

Katie:

What I think too what you guys are saying is that a budget is a living kind of thing that will evolve and change.

Crosstalk:

Absolutely. Constantly

Katie:

I think for a lot of like this podcast, yes, but they, for a lot of newer people to budgeting like myself, when you first start out, it's very intimidating. Like you were saying, do you use a program on your computer or do you use an app or where do you go? How do you even start the process?

Chase:

That's the hardest part for most people.

Felipe:

Yeah. Just finding the right, the one that works for you and the one that works for you may not be the one that works for Chase or myself. Everybody has their own method that works best for their personality type for their family and, and it's just guessing and checking sometimes which format or which type of budgeting you feel more comfortable with. The basics are be honest with yourself, right? What is it that you're doing? How do you be honest with yourself? And the number one way is not guessing how much you spend at the grocery store every month, right? I mean, we don't know how much we spend at Starbucks every day. We can guess. You can kind of do probably close math. Oh, I go probably six days a week. All the only way to really know is to actually track your spending and how do you do that?

Chase:

People often say, uh, I'm not going to do that. That, that's crazy. Well, yeah, it, it, it, it can be tough, but it, that will literally guarantee you that you will find that you are spending money at a, at a, at a rate that you couldn't possibly fathom. And it not that you're doing that with everything, but it, it could be something. And I, we bring this up over and over and over again in our presentations, but coffee tends to be, poor Starbucks always gets a bad rep. It's sure, does

Felipe:

I love coffee

Chase:

Yeah, absolutely. But it also shows the Starbucks is incredibly popular. Uh, and I wish I'd of bought a stock on it much earlier than I did, but the idea is that if you're spending on average, you know, let's not even ever [inaudible] cost of a coffee on average is around $4. All right? For whatever machiatto something or other that that's your buy. And a lot of people will go once or twice a day, every day. And so if you're doing that at $8 at 365 days a year, that's a lot of money that you're spending.

Katie:

Even just during the week ?

Felipe:

where you were saying that was, that was my college scenario. How'd you get that one?

Chase:

Yeah, that's $2,920 that you're spending on coffee

Katie:

but now if you budget for that, like let's say you put it in your budget, that you're going to Starbucks every day. As long as you're not borrowing money from rent or guests, you're okay.

Chase:

Not, not only, okay. It's encouraged because this, as you said at the very beginning, that's not limiting that you're going to spend, it's just appropriate it. It's putting it where you want to put it and there's no wrong answer. We say that to people all the time. We'll put a budget up in it and the person's over budget and we'll look at this classroom of 40 people and all of them and look at him and go, where would you cut? You know, we know now that you're about $95 over your budget. You're spending $95 on average more than you're making. So we got to do something. So where do you cut? And it's amazing. Everybody will always say entertainment and then they'll say, well, clothing, I mean, why are you spending $125 a day or a week or month on clothing? Everybody's got kind of a different thing though. They're all saying, well that in order the phone or this or that. And, and the funny thing that everybody always laughs at us, but we commonly say that there's no wrong answer. There really isn't. It's, I don't know what Felipe does on a daily basis. I know him pretty well, but I don't know what is really important. I don't know what is really important to you every single day. So how can we as a, as a, as somebody that's helping somebody with a budget tell you where you should cut now it might be, you know, we might say, well, you're $75 in the hole. You should, you have direct TV, you should cut the directv package down and now you should do Hulu or whatever. Well, what if that person doesn't like movies and he really likes something on direct TV. That's not for us to say, but what we do know is that we need to cut $95 from something.

Felipe:

Yeah, so you tell me where

Katie:

so this goes back to you really have to be honest with yourself and you have to be able to be comfortable on a constant basis. This is what's important to me. This is what I need to have in my budget.

Chase:

That's correct. Yeah. And and so budgeting for the coffee. Absolutely. A perfect example is my wife and I will talk about, she loves to get pedicures and manicures. She just, she likes to get her nails done. She likes to, she looks professional. It's part of her career to look nice and everything else. But she really enjoys that too. And I have no interest in any of that. I don't want people touching my feet, although I have to admit, she made me want to go once in it and it wasn't bad. But for the most part, I don't like being touched.

Felipe:

I've been once.

Chase:

She doesn't care for golf. But when we put out and we know that we have so much money, I have some, we have so much earmarked for golf during the month and we have so much earmarked for that nails and and those kinds of things and we have so much earmarked for the kids sports that's it's like paying a bill, right? Without it being a regular occurring bill. We are. We are. We know this is what we like. This is what we enjoy. Golf for me as a release, golf for me makes me feel happy. You need to be happy. You need to live a life that brings you joy and what this does is this takes stresses. That money brings into the equation and just takes a lot off. It makes it takes a lot off your shoulders and that you can feel better about the decisions that you're making because you're making educated decisions and what you're buying where most of the time we feel guilty about buying stuff and purchasing stuff or playing golf or getting our nails done because we really don't know when we do it. If there's going to be enough money. At the end of the month to do it. We guess we think there is. There might be, but we don't know. And as that the old cliche of knowledge is power. There's no doubt about it. That there is power in understanding things and money is that, I mean I would argue that there's no bigger thing to understand and know then your personal money situation and how you're going to create it. So when you go back and you make that budget for yourself, it may at first be a little painful because what? You're going to cut things out, you're going to find things that you do on a regular basis, right? That you're probably going to go, man, I spend too much money there. But does that mean you give up coffee? No. No. But you might instead [inaudible] you might have won. All right. And you might find that, oh my gosh, not only did I save half instead of $2,920 I split that in half. Right. And I also lost 10 pounds. Yeah. Cause he's all of a sudden sugar in your coffee. That's correct. As the coffee shop. Right when I quit the diet coke thing right now, that was originally because I realized how much money I was spending on it and we use that example in my presentations all the time. I was drinking five, six, seven diet cokes, Diet Pepsi's a day and it from all different kinds of places to 15 at a Wendy's.

Felipe:

There was a time he could tell you where every Mcdonald's with a drive thru was.

Chase:

I think I still can. It's true and that's because I realized that you know, Oh, if I go to Mcdonald's it'll be a dollar, but that cut down my intake too because Mcdonald's as many Mcdonald's is, there are, it wasn't like when I was going to Jack in the box indoor seven 11 and or amp m I was going to Mcdonald's a because their diet cokes tasted better than anybody else's, the premixed or whatever, but two, they were a dollar, so a dollar eight with tax and I knew, okay, that me, that's my wife laughs that's why I have change in my, in my car all the time because I would use that 8 cents or whatever it was to get me that dollar coke. But then it was after that time I realized I was drinking less and then I started reading up about, that's probably not the most healthy for me. Um, and so I just eventually now it's just water and you know, and well and bubbly water.

Felipe:

Do you miss it.

Chase:

I did, but I don't anymore at all. I don't,

Katie:

Did you ever figure out how much money you saved then?

Chase:

When we first figured out how much I was spending, I was tracking my expenses because as we were teaching people to do that, right, probably just do it myself. Um, the textbook says the realistic part of it is, is it's true. You really do. And I was spending upwards of almost $300 a month in just 32 ounce diet cokes with extra ice. I, my wife was like, oh,

Katie:

But you're right. That's the perfect example of it adds up over time. But dollar transactions here and there, it seems like nothing.

Chase:

If somebody would've asked me how much I spent on diet, I probably would've said, man, maybe 30 or 40 bucks. I mean I was off by two or three,

Katie:

maybe just a little off

Chase:

just a little bit. Because when you're using change, are you using just a dollar out of your wallet? Um, that we don't realize how much that adds up. And if you were to take that dollar or think about it, if I was to take that, what nine, $10 that I was spending every day on diet cokes and I put half of that into a shoot into and when IRA or into something like that, put it away. How much money would I save? How much would I have? And that's kind of the way you need to think about it is. And it doesn't have to be just savings, but it could be that that diet coke money paid for HBO that I really, really like right now you can watch and now I can watch game of Thrones. Instead of having my fifth, sixth, seventh diet coke and I'm healthier or I can just still not have game of Thrones and I can put that money into start a college fund for my kids that they never had. Right. Or putting it away for, um, they're a birthday surprise that we wanted to give them maybe even an extra special Christmas or something.

Katie:

Take your wife out to dinner.

Chase:

Sure, take my wife out to dinner. That sounds like that too. That's a great idea.

Felipe:

She was saying that so you can tell her husband

Chase:

but that's exactly the point that I think that we were trying to make here in and trying to get to the idea for everybody is that budgeting doesn't have to be as sad, as bad as it sounds.

Katie:

No. And it's a roadmap for what you want. Getting what you want out of life.

Chase:

Absolutely. It's letting you afford the things that you want. It's affording the vacations that you want to go on. I don't know how many times we hear over and over and over again. Oh, a week. We don't go on vacation. I don't, we don't, we never, we can go on vacation. Uh, we're working all the time. And that might be the case. That might be the case. But I would also probably say that you probably haven't put enough into it to plan it

Katie:

that or like you were saying, you make one adjustment in your life. If you stopped drinking diet coke, that's $300 toward a trip. That's maybe one or two nights in a hotel depending on where you go.

Felipe:

That's right. That's true. That's a big deal. Save it for a few months and then he got some are a little more outlandish.

Chase:

Yeah, that's right. And it's, it's all it's in you. Maybe you can afford, um, that the house payment that you thought you could never afford a new one because you were just running the entire time and how, and buying a home was always going to be too far off for you. Uh, and that's just not the case. The case is that you can make a mortgage work for you if you're willing to look and find it in the right spot. And, and that, that is the honest truth that if your budget is being, I mean, who's driving, who's steering this ship? Right? You are. So the WHO says what that budget has to be You're making it what you want out of it. The one common denominator is there's a certain amount of money coming in. If you're single, it's your paycheck or your allowance or whatever it is that where you are in life. If you're married and you have both people working, then it's your two salaries. And that's really what it comes down to. And that's where it becomes very, very important. If you're married, Katie, your brand, brand spanking new, married, congratulations, by the way. But I would imagine that there's a lot of things that you're learning about each other now in, in, in, in married life. And we tell people all the time that communication is probably know is the most important thing that you can do. And communication about money.

Katie:

It's a tough topic but it's also one of the top two reasons why couples will divorce. Money is the top reason. Sex is number two

Chase:

and I can tell you without hesitation that a lot of times because of money there'd become sex problems. It's true. Stress Causes Issues in the bedroom. It causes issues with everything it does.

Katie:

And there are certain things like, cause we had to have an honest conversation with each other. Going back to what you were saying before, you have to have an honest conversation with yourself. What is important to you? What do you want to spend money on? My husband is very into entertainment. He likes getting lost in a really well told story. So for us HBO is a must. Netflix is kind of, again non negotiable. We have youtube TV to try to lower the cable bill. But there there were things that were important to me. I like pretty things. So for me one of the largest chunks of my budget is getting my hair done. If I have a cheap haircut and my hair looks all frizzy, I don't feel confident. I don't really want to do anything. It doesn't work for me. So that's one thing where it's almost like I spend more, but I view it as an investment in myself.

Chase:

And you're not going to get your hair cut as much.

Katie:

That is the absolute truth. If you're doing things though, that make you feel better about yourself, that doesn't mean that you're going out and buying a haircut. You can't afford. What you said is, is I'm prioritizing my hair over other things that aren't quite as important to me. And that's really, again, that comes down to decision making. And what do we tell people all the time? Felipe. This isn't a budgeting presentation. This is about decision making.

Felipe:

It's, it's your choice at that point. Your coffee's not important to you, but your hair is so don't drink coffee and go get a haircut. And you know, again, it to pick on coffee. But I love coffee, so I'd rather, it's unfair because my haircut is conversation. W you know, my haircut is far more, uh, uh, as far less expensive,

Katie:

I just got hit with an extra charge too.

Felipe:

Oh, I know I could cut my own hair if I really feel out. And then if I mess up, I'll just go get a haircut and we can fix it. It be back in a week or two,

Katie:

I got an extra charge now with my hair cut because I have thick hair. It is getting stacked against me. I have blonde, curly, thick hair and the curls and the blind and the thickness are now all extra money.

Chase:

You know, that is, that's a pretty incredible, considering most blondes are pretty fair and their hair is typically pretty thin. So you're a one lucky young lady that you have thick hair.

Katie:

I am a true mutt

Chase:

And blonde. That doesn't happen very, very, very often at all. So I think where we've really shown here is that that budgeting is going to make your life better. Uh, and it may be painful at first. It may not be something that you enjoy very much. Um, but it's going to do the things for you that you honestly want to get out of life. And we all want more. As we get older, we all want more, you know, as, as our financial situations, uh, increase as we get older in our careers, move on, um, and we evolve. There's going to be the chances that we're going to have decisions to make about where we put the money. And the more, you know, the more you know, that's uh, this NBC, NBC Moreno. There you go.

Katie:

No, and there's a learning curve and I'm not going to pretend that there isn't one and it's, it can be rough when you're not used to budgeting is, I found some statistics to from our friends over at debt.com 93% of respondents believe everyone needs a budget. Only about 67% of people have a budget.

Chase:

Yeah, that's a high number. Yeah. Yeah.

Katie:

And it breaks down to between men and women, a lot of people don't budget because they think that they don't need to budget, they don't make enough money,

Chase:

which is crazy to me,

Felipe:

just the opposite.

Katie:

I see that now. But as somebody who used to be there, it does make sense. Like, well, I don't really have much. Why do I need to budget?

Chase:

Budgeting is also, I mean, the thing is, even people that are high wealth, the typical thing is is they have people to budget for them. Sure. Um, but at the same time, I know plenty of people that make plenty of money that are up to their eyeballs in debt. So it doesn't mean that you, because you make a large sum of money that you don't have to pay attention all of a sudden because it's just money, money, money. The fact is you can always spend more than you make. Yes.

Katie:

Trying to keep up with the Kardashians.

Chase:

Keeping up with the Kardashians. That's okay.

Katie:

They're not, the Jones' anymore. It's not.

Chase:

That is so funny. She said that, that's actually on one of our presentations. It's really we had one keeping up with the Joneses. And then we had a young intern, cooler and younger, and he said, keeping up with the Kardashians. That would make us cool. Yeah. I'm not sure if that's the case. No, it really, really doesn't. It really, really doesn't. So where I guess as we, as we finish this podcast and this episode, I think people are gonna want to walk away from this. How do I get started? And the first thing is start making goals for yourself. What are things that you really need to do?

Katie:

And write it down

Chase:

Yup, for sure and not only your needs but your wants and deciding what are those, you know there's cause there is a difference between needs and wants as much as you want your hair to be nice and you were budgeted for it. If it, is it really a need at the end of the day it might, it might not be. It just depends on the time, right? It, it might be something that you'd have to give up for awhile and then go back to, because if something, I'm not saying you would give up your hair and you could argue about that day all day long. But that's the thing is it's, it becomes a decision

Felipe:

or maybe spread them out a little further and that could be too,

Chase:

but you know, he got to deal with those split ends and all that stuff. So we don't want, we don't want to deal with that. Second is once you figure out what your goals are and what your needs versus your wants are, but those goals that are very important is you want to keep track of your spending. People will always say, I don't have enough money. I guarantee you that if you track your expenses, your going to find money, you're going to get yourself a pay raise indirectly, but you will because you're going to figure that, uh, where it is that you're putting money that you didn't really think you were

Katie:

definitely

Felipe:

It will definitely relieve stress.

Chase:

It will definitely relieves stress for sure. Without question. I think we've done a pretty good job here for our first podcast, wouldn't you say?

Felipe:

I think so.

Chase:

I think we've done pretty good. And um, I know that we're going to come back next week. This is our first one. So Katie, why don't you got to give us, what are we going to, what do we have to look forward to?

Katie:

Next week we're going to dive a little bit deeper into credit scores. We're going to explain what it is, why you need to care about it, what kind of makes up your credit score. And we're also gonna talk a little bit about credit reports.

Chase:

They all go together, they all tie together.

Felipe:

It's this whole big picture

Chase:

This financial literacy world, Felipe, that you and I and, and Katie live in. Uh, it's very broad. It is the budgeting. And the reason we started off with this one is it's, it's the foundation for which all the rest of it works. But those credit scores are pretty darn important.

Katie:

They are

:

People and especially you young ones need to know, uh, how to, how to build it. And for those of you who have built yours, uh, unbeknownst to you in a very negative way, there are distinct ways in how to rebuild it. Turn it next week. And don't forget for more information. If you're interested in learning more about all things financial literacy, you can go to the San Diego Financial Literacy Center. You can visit SDFLC.org if you're interested, if you, if you have credit card debt, if you, if there are, you want to talk to a counselor about debts that you might have and you want to pay some, but you've got to figure out how to pay them back. A good place to go is debtwave.org. Of course you can go to the questions and comments. They're always welcome. Katie will be happy to get back to you. Uh, we will get back to, you can find us on Facebook as well. Um, and you can also Twitter, don't miss those with you guys. If you can plug those, what are those Twitter chats? Some of those products? Correct. Of the Experian credit chat is Wednesdays from, it's at noon Pacific, three eastern Pacific at three eastern cash. Take credit chat hashtag credit. That's all you need. It's all you need. Really like that in and you'll start to see some answers. You can also email us at [email protected] until next time.