Episode 1: Spending Plans and Budgeting

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Everybody likes to talk about other people’s money. Everybody likes to talk about, you know, these millionaires and billionaires, how to get rich quick how other people earned their money. But nobody wants to talk about, you know the dollars and cents of, Hey, I make this much. I’m saving this much. Good afternoon. Good evening, and Good morning. Welcome to the pocket change investments podcast.

This is season one, episode one. I’m your host Basheer and today we are going to talk about budgeting more specifically, we’re going to talk about the spending plan portion of the budget. I’m not a fan of budgets. But it’s imperative that you have a budget. Me personally my story, I started investing and then investing led me to saving and that led me to budgeting once you have a budget, you have a plan to spend your money. And once you have a plan to spend your money, you can dedicate a portion to be saved. And then once you have some savings stacked up, you can start investing.

So that’s the idea pattern. And those will be our first three episodes. But today, like I said, we’re going to focus on the budgeting. And once we get into that, we will move on to our second third episode, which will be saving, and then investing. So without further ado, let’s get to the spending plan because I hate budgeting. But the spending plan is the foundation of the budget, it only takes about five minutes. And once you get a good spending plan together, you don’t even have to have a budget Personally, I did a spending plan and didn’t start my actual budget till about a year later. And just having a spending plan and operating from the spending plan.

I save so much money. And I have so much better insight into my finances, that when I finally got to put my budget together six months later, and finally started trying to stick to it a year later that budgeting became easily and I like I said, I’m no fan of budgets because a traditional budget is very rigid, you get your net income, or your paycheck and you divide it up into these categories and you try your best to stick to these categories. You drive yourself crazy, traditional budgets is just madness. I’m not the type of person, I don’t like to follow directions, I don’t like to follow my own rules alone was a buy set for me.

I love it, it works for me because the spending plan is literally just a list of your reoccurring monthly bills that you pay every month is predictable. And you can do a spending plan and about five minutes literally if you know exactly how much you spend. So things like rent, utilities, cell phone bills, loans, car payments, things like that will go into your spending plan. And once you get that all of those bills that you pay every month like a car insurance is for one like you everybody knows off the top of your head about what they pay for these single things.

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But very few of us total up how much these things cost us every month, although they hit us every month, and they hit us hard most of the time, especially if you’re living check paycheck to paycheck, especially if you you know just have a busy life that these bills pop up and you say, oh crap got to pay this bill. That’s the important thing of a spending plan. It just lays out your bills and it lays them out in a chronological order. So you want to list your bills from the first one that comes into the last one it comes this do. So basically, with a spending plan, you just list your bills in chronological order from the first bill of the month to last bill in a month.

And you write your due dates as they change sometimes but an example is my electric bill. It’s always due on or before the 15th. So I know that around the 15th, that I’m going to have to pay an electric bill and it’s probably going to be at least $100. So I can throw that in my budget winter, spring or fall, I’m paying at least $100. For my budget. During the summer, I try not to use the air conditioner too much during when I tried to use, you know, the heat too much or, you know, things like that, because I don’t like my bills to fluctuate too much. But that’s not the purpose of a spending planet purpose of a spending plan is just to map out your bills, and how are you going to pay him throughout the month.

And for me a spending plan, it was just the best thing that ever happened to me when I got my spending plan down because I realized that a lot of my stress, I realized that a lot of my problems being caught up with my bills wasn’t because I was bad with money. It was because I had too many bills due at the beginning of the month, and not enough income. And really, that’s the reason why a lot of people live check the check, a lot of people are living check to check not because they’re poor, not because they’re bad with money, but because at the beginning of the month, they have, let’s say $800 worth of bills coming in, and they only get paid $400.

So is no way you will ever be able to pay $800 worth of bills on a $400 paycheck bi weekly. So you have to wait until the second half of the month to pay off those other half a bills. And that’s when you get late charges, that’s when you get interest, that’s when you get into trouble because the more interest late charges and fees they tack on, that’s the less money you get to spend. And so what the purpose of the spending plan is for you to map your paycheck out and create a plan. And this plan is to make sure you have enough money to pay your bills. And that may sound like it’s a fantasy, but a lot of people don’t know that you can actually change your bill due dates for some bills, rent mortgage, those dates are pretty much all the time set in concrete.

“the one thing I do know is that because of my spending plan, all my bills are paid in advance. And if I have to go without something, it’s going to be a non essential item.”

But let’s say your phone bill, your insurance, your car insurance, some things and don’t quote me on those particular categories. But some bills, you have the flexibility, I know which student loan because I’ve changed my student loan due date several times. And it may take a while to go into effect. But if you can change your due dates on certain bills and have them hit later in the month, then if you get paid bi weekly or weekly, then you have more of your first paycheck to enjoy. Because you have your bill spread out.

And the month and if there are bills that can’t be moved, these bills generally are able to be set up on a payment plan if you get behind. So the beauty of the spending plan is just to let you know where you are with your finances. It’s a snapshot, it gives you an ideal look at your finances for the month. And if you are smart, or if you want to I don’t want well. It gives you an ideal look at your finances for the month. And the whole point of a spending plan is to let you know that. And that hypothetical.

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And the whole point of a spending plan is to let you know that, as I said, if you hypothetically have $800 worth of bills to pay on the first day of the month, and you don’t get paid to the 15th. And you’re only going to get for pay $400 that that stress that those money problems. All of that is not necessarily your problem. But it becomes your problem when you become late on bills. And if you don’t do nothing about it, then you will always be stressed and you will always have money stress. And I’m not saying money is the cure for all stress.

“if after you get your spending plan together, you find out that you only have $20 of free cash to spend for the rest of the month. I want you to know that ahead of time, rather than finding out later, or having that $20 eaten up by late charges and fees.”

But a lot of stress can be caused by money. And a lot of problems can be remediated, especially if they are caused by bills if you take care of them early or beforehand or have a plan for them. I like the spending plan because a lot of us don’t know our monthly finances and the spending plan is the quickest, easiest fastest way to get on top of your finances. And to become an expert. The spending plan is the quickest, easiest, fastest way to become an expert at your personal finances. And it’s also the quickest, fastest, easiest way to get back on top of your finances. So that you can free up money to do other things like save, invest, or just buy yourself something nice.

This is your money. spending plans don’t lock you into anything where you feel guilty, or you feel like you can’t spend your money, the whole point of a spending plan is to put you in control of your money. So when you get your paycheck, you can put your money to work for you, you give each of your dollars a job, and their job is to pay off your bills. And since your money is working for you, you have less stress. And you can go out and enjoy your money because I’m not the type of person that tell you what to do with your money, how to spend it, or to tell you to section off your paycheck and suffer or be strict or stick to some type of regimen. I don’t want that for you, I want you to enjoy your money.

And I want you to have the freedom to change the due dates. And I want you to have the freedom to know at the beginning of the month. Even if things are really, really tight, even if you’re not making enough money that if after you get your spending plan together, you find out that you only have $20 of free cash to spend for the rest of the month. I want you to know that ahead of time, rather than finding out later, or having that $20 eaten up by late charges and fees. I want you to enjoy your money in this savings plan. The spending plan is the first step to getting in control of your money, so you can enjoy it so you can live your life the way you want to. And it’s not always going to be easy, it’s not always going to have the best results. Sometimes we just don’t make enough money.

But I like to leave you with a piece of advice, it’s always easier to do more than what you have than it is to try and get more. So if you’re thinking about getting a second job, I would still tell you to start a spending plan with what you have get this gig job or you bring in a second income, make sure that you have all of your old bills satisfied and all your bills paid before you get this new source of revenue. Because it’s always easy to find work for money to do because money is a finite resources, there is never more money in our checking there never be enough money in our check. Even when you get the second job, that money will be spoken for. So before you even start thinking about what you’re going to do if you’re waiting for your tax refund or whatever, I want you to think about what obligations Do you have coming each month.

And what will be the best strategy for paying these off, either spread out throughout the month, if you get paid once a month, then you need to create a plan that take care of all of your money beforehand. And I’m not talking about a traditional budget here. Although if you that’s your thing you can go ahead. I personally don’t care what you spend on food, I don’t care what you spend on clothing. I just want to make sure that right now that we have all of your bills paid. So going forward, you can enjoy your life and you can make the choice not to buy groceries and buy sneakers. Or I personally have a problem with accidental shopping, I walk into a mall and next thing I know I’m walking out with a whole bunch of stuff I can’t afford or shouldn’t abroad or you know spent on my credit card.

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But the one thing I do know is that because of my spending plan, all my bills are paid in advance. And if I have to go without something, it’s going to be a non essential item. And I’m not going to have to pay a late fee because I overspent in a category. If I had a traditional budget or I’m not going to find out at the end of the month Did you know buying those sneakers were a bad idea buying that new cell phone was a bad idea because now I’ll have money for blank, take it or leave it. That’s the purpose of a spending plan or savings plan. A lot of people call it different things but it’s just a list of your reoccurring bills. And it’s a plan for how you’re going to take care of those bills.

And if you enjoy traditional budgeting, I have nothing against that are nothing against you. And I will not talk you out of creating a traditional budget. But for me, I created my spending plan and my budget came from my spending plan. And it gave me the flexibility to even know that even if I messed up on my budget that I could always fall back on my spending plan because I had a plan for each dollar and each dollar that I earn. I was putting to work so I wasn’t slaving for my money. My money was actually working for me and saving me from myself.

So, have a great day. Thank you for listening. If you like this podcast, we have a whole bunch more there will be more coming. This is only episode one and the next episode we’re gonna talk about saving and then we’re going to move on to investing. Make sure you follow us on Instagram and Twitter. And be sure to join our pocket change investments conversation group on Facebook, if you have any questions or comments. Thank you very much. Have a great day. I started investing and I just immediately fell in love with you because I could see my money growing

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