October 8, 2023 • 34 mins
There is another way to account for finances but before starting on that option going to follow up on some control center items.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Charles McDonald (00:04):
Hello, I'm your host, Mr. Chuck, I retired
accountant turned truck driver,I reduce my debt in a relatively
short period of time, debtreduction to achieve financial
freedom takes commitment,confidence determination.
(00:25):
alternative to the controlcenter, there is another way to
account for finances. But beforestarting on that option, going
to follow up on some controlcenter items, if you don't know
control center is it's basicallyyour budget. I call it a control
center because that's where youcan arrange your expenses and
(00:49):
your income and the order that'sgood for you. And you can see
the dollar amounts you spend inthe past and what you budgeted
the budget column to pay in thecurrent month. at a quick
glance, as you keep it up todate, you'll be able to identify
(01:09):
if you're overspending in aparticular area, and you'll be
able to correct that before itgets out of hand, justify why
it's happening, and make somecorrection. So some other
categories, so you don't end upwithout some money, or having to
use your credit cards to pay forsomething in the future because
(01:32):
you forgot about a bill comingup. Last episode, I talked about
how to get started, and how toset up your budget or your
control center, and how to do itfor the first month, every pay
period, you need to update yourtracking. And once you get that
(01:53):
you print out a report bycategory, and then you go into
the actual column, when I sayprintout report is from the
first of the month, to thecurrent date. And that's always
gonna be changing, it's gonna bemaybe the first week of the
month, and then through thesecond week, first of the month
(02:13):
through the second week, firstmonth through the third week,
first of the month to the end ofthe month, you're doing this
month by month. So if the end ofthe month ends in like on
Wednesday, and it's not a payday that you're tracking, do the
report to the end of the month,and update your actual. Now when
you update the actual you'regoing to be putting in the new
(02:35):
total amount. So you're notdoing any math to add it to the
actual column, you're justputting in a new number, the
spreadsheets gonna figure outthe difference for you. And you
can see what's going on. So it'snot all that difficult. If you
have a tracking application thatdoes that for you where you can
(03:00):
get a report by category andmost all of them do it. The
problem is the order that yourreport comes out might be in
alphabetical order, by theexpense and income, you know,
income is going to be groupedtogether and all your expense is
going to be grouped together.
But they're going to be inalphabetical order. So your
utilities might be under you atthe bottom. Your food and
(03:23):
groceries could be depending onthe categories you're using
could be all over the place. Hemight have dining under D, he
might have groceries under g, hemight have entertainment under
eat, I mean, it could be allover the place, and we want to
group them together. That's whyyou do the budget. The budget is
set up by needs first and thenonce needs housing,
(03:48):
transportation, food, savings,insurance, that's not anywhere
else. And debt. These are thingsthat you pay every month now
your insurance might be paidquarterly, might be paid
monthly, might be paid yearly,but it's something they got you
have to pay. So when I sayinsurance, that's insurance is
(04:12):
not in any other category, yourhomeowners insurance would be
under housing, your autoinsurance would be under
transportation. So this would beother types life insurance,
maybe you pay quarterlydisability insurance, all kinds
of different types. I'm nottalking about health insurance,
if you're paying healthinsurance through your employer,
(04:34):
and sorry, out of your paycheck,there is no need to budget for
it. No, you need to account forit because it's already gone.
It's already paid and the amountof money that you're tracking is
the net result after you paidthat item. Same way. thing with
your retirement plans, your 401kwhatever, you may have the same
(04:55):
thing. You do that for the firstmonth. fairly easy. Now we go
into the second month, do yougot two choices, you can use
this original budget dollaramount, you can copy and paste
them over to the second month.
Or you can look at your actualif you've been making changes to
(05:16):
your users, maybe you changedsome plans and you got a better
plan for a lower price, or youcancel some subscriptions, you
may want to use a new numberthere. Now it's going to take a
subscriptions that you cancelledmight be a month or so before it
flows through and yay, quitscomes you know quits coming out
(05:39):
your checking account, dependingon your timing, if you use the
original budget dollar amounts,copy and paste them into your
second month, and then do youractual, again for the second
month. If that difference of theactual x will become smaller and
smaller, and at different startbecoming more than 50 or $100.
(06:01):
Now you want to update thatoriginal budget amount for the
third month to the new actualnumbers. Now in May, the ones
that are coming to zero as theinto same amount every month, no
matter what those are good, youdon't have to change those, the
(06:21):
ones that have gone downsignificantly, you can update
those, what I would do is justcopy and paste. The one year at
the end of the second month whenit's all done, everything's
updated. You copy and paste theactual over into your third
month's budgeted amount. Andthen start again, this is a
(06:44):
never ending process, you'regoing to always be updating and
changing that budget dollaramount to tune it and to be what
you are actually spending. Andthat's true for groceries and
gasoline for your automobiles,we have inflation. So these are
(07:06):
ever changing numbers. If you'restarted out and your groceries,
you had a $10 He was like $10over budget at you meaning you
had $10 more on your budget thanwhat you actually spent, you're
doing good. And then a monthlater, you're pretty much even.
And then the month after that.
So three months down the road,you might be $10 to the
(07:29):
negative, well, you need toupdate that because your cost of
your foods going up, the cost ofgasoline may be going up. Same
thing when the prices drop,gasoline might go up 60 cents a
gallon, and then a month or twolater might be 50 cents a gallon
cheaper. So you might adjust itup and then you just back down.
(07:50):
So it's gonna be a never endingprocess for some of these
categories. But the reasonyou're doing this is so that you
know how much money you're gonnaneed to be able to pay for these
expenses as you go through life.
(08:10):
Looking forward, our goal andthe long term is to pay all your
bills timely, and crease youremergency fund up to at least a
minimum of $1,000 and thenreduce your debt and then
increase your savings. That'swhat you want to do. If you're
(08:31):
always in debt, and you have alot of debt, you're never gonna
get ahead of whatever's goingon, you're always gonna be
behind, you're always going tobe struggling to pay for things,
and you're gonna seem likeyou're working for somebody
else, no matter what you do,because you've always come up
(08:54):
short every month and there'sthings you want to do that you
can't afford to do. Maybe youdon't take a vacation, maybe you
don't buy new clothes, or maybethat new US car that you were
looking at you can't reallyafford it or your insurance is
too high because you got a badcredit rating so your insurance
(09:15):
is higher. Everything affectseverything else. So before you
can get anything started youhave to start tracking and this
is true for the alternative tothe control center. And it's
really just a different way ofapproaching the same solution
(09:39):
doing a budget having a controlcenter keeping it updated and
all that kind of do stuff itweek in and week out he had
turned the method which is Ihave a link in my show notes
actually the be in there twicebecause I have a link for this
episode and and my footnotes onmy show notes I got that same
(10:00):
link again, if you find hispodcasts useful, and you'd like
to subscribe, you can go to myshow notes, click on
subscription page, and you canmake any contributions you want
for any length of time you wish.
Now, the alternative to doingyour control center, you're not
going to get out of tracking,you still have to track, go to
(10:22):
happy draft.org For slash live,happy giraffe.or NFT go to the
page forward slash live has twospreadsheets, they're set up
free that you can download. Thefirst one is called budgeting
(10:45):
spreadsheet. That's the one I'mgoing to talk about. The second
one is fairly new, I didn't evenknow they had it until today
when I was getting ready toproduce this episode. And it's
called debt payoff spreadsheet.
So if you're on my debtreduction plan, this debt payoff
(11:06):
spreadsheet can help you becauseit helps you organize your debt
and tell you how much to pay. Itkinda is good. It's not exactly
the same as my plan. But I'llnot talk about that later. We're
in the budgeting spreadsheet,it's fairly straightforward.
It's easy to use. I set it up inUSD it and was able to keep
(11:30):
track of my bank balance guidecard the numbers and match my
bank balance. I did that forfour months. And I didn't have
much problem is not designed todo that. But I was able to keep
everything up to date. And I wasable to look in this spreadsheet
(11:51):
for the current date and know,at the end of the week it was
this a weekly thing. And knowYep, that matches my bank
balance. So I know all theinformation I have in there is
absolutely correct. And I didthat for four months is not
designed to do that is notdesigned to be used as your
(12:11):
check register. And I didn'tfind found that out when I asked
the creator of it that can youdo that? He said, Well, nobody
ever asked me. He goes, give ita shot. So I did. And I was able
to do it for four months. Andthen I just went I don't need
it. So I didn't quit using it tocreate or update it the
budgeting spreadsheet kind ofmade it better. I don't have the
(12:33):
newest one download it because Iwas using the older version. But
the changes are not that much.
The only change I can see is hetook out on the expense side.
For those of you that don't knowwhat I'm talking about, that's
(12:55):
fine. He took out the weeklycolumn. And at the end put in
other which is good because Inever use weekly, I know have
expenses I paid every week. Nowif you have childcare, you
probably have a weekly expense,or dog care or whatever the case
may be, you could have a weeklyexpense, but instead of put it
(13:18):
on weekly just put it over thereon the other. So you still have
to track to use a spreadsheetbecause it doesn't do any good.
If you don't know your numbers,you still need to know numbers.
It starts out the period and thedate you start I started on the
first day of a month washappened to be a Wednesday. I
(13:39):
think if you watch his video, hehas a video that explains how to
use it also has a book a few thebooks free if you got a
subscription somewhere or youcan download a PDF, but it
explains how these things work.
So the first page and this mayhave changed is you put in your
(13:59):
start date the number of weeksyou want to for i did for one
year for the two weeks. And Iput you know a year from there
which was January 30 Because Istarted on February 1 So that
was 12 months that currency type$1 So I guess if you live in
other countries yes he has othercurrency amounts for people live
(14:24):
in another countries. But thisis all an English show is not
that difficult. At least theversion I got it's all in
English. The at the bottom ofthe page. This is a spreadsheet
that has pages to it or sheetsso it's everything is right
there in front of you. So at thebottom says one period to income
(14:44):
income source, the beginning ofthe income source he asked for
your bank balance so I went intomy bank account and got my
balance and plugged in number.
And by the way, that was thelowest dollar amount for the
whole Will year was my beginningbank balance, and then your
(15:04):
sources of income, you know,name type, I'm retired, so I
have two monthly pensions, thedollar amount, and the next time
you're gonna get paid. I startedon the first of the month. So my
next pay was, you know, on thefirst Tuesday or the second
(15:26):
Tuesday and my one is on thevery first I was the same day,
that was it. Now if you work,and you have two jobs and you
get paid weekly, you need to putin job a weekly, take home pay,
and the date. Now if your weeklypay is different, every week, go
(15:50):
back for a month, go back forfour or five pays, add them all
up and come up with an average.
And if you have a second job,same thing, put that
information, your spouse orsignificant other works. Put
that income in there. If youhave a hobby that you get, I say
a hobby that you get income froma has to be some that's on a
(16:12):
regular and ongoing basis, saymaybe like $100 a month, or
something like that is if thisan occasional income, don't
worry about it, don't includeit, because it's not going to be
enough. And it's not going to beon any regular basis to help
you. Then the third sheet isfixed expenses is where he made
(16:33):
some changes, he took the weeklyout which I wasn't using, you
have monthly. So you listeverything you pay every month,
the description, the dollaramount, and the day in the month
it's due, not when you pay it.
But when it's due the daythey're supposed to pay it. So
(16:56):
if you have rent is due on thefirst day, you always pay it on
the 10th. Don't put the 10th inthere, put the first in there,
because that's when you'resupposed to pay it. Remember,
goal one is to pay our bills ontime. Goal two is to quit using
(17:17):
credit and reduce our debt. WellI goal to really is build up
your emergency fund to at leasta minimum of $1,000 and go
through it. Three is reduce ourdebt and part of reducing your
debt. If you have a checkingaccount that has a negative
balance, that's considered debt,you need to work on that first,
(17:39):
you need to get your checkingaccount up to a positive
balance. And those bank feeswill go away, keep it in the
positive,the bank fees are go down, keep
that money in your own pocket,put it in your savings, build up
your emergency and they'll gotowards helping you pay down
your debt. For those of youdon't know my debt reduction
(18:00):
plan that's going to be comingup in the next episode. But it's
pretty basic, quit using credit,make the minimum payment, build
up your emergency fund to aminimum of 1000. After that,
build it up to three to $4,000take the amount over the minimum
(18:20):
of 1000 ply it to one of yourdebt. That is it in a nutshell.
We're gonna go that in detail mynext episode. So in this
spreadsheet, we have monthlyexpenses. So you've put down my
dis, I had a buffer $1 amount,my electric, my telephone, my
internet, my my cell phone, mynatural gas, my TV streaming
(18:45):
about it, I have no mortgages, Ihave all my debts paid off. So
if you have a mortgage payment,you have car loans, all that
would be in there on monthly.
Again, it's a description ofwhat it is. So you know what it
(19:06):
is the dollar amount and the dayof the month, you pay it. And
that should be the day of themonth, it's due that their
monthly we have yearly. Now whatthat happens, I use this columns
for car insurance, I pay my carinsurance semi annual or twice a
year. So I just broke it down. Iput in car insurance. The first
(19:31):
time is due for the year. Andthen the second time is to I
know that my auto insurance isdue in March and September every
six months. So March andSeptember. I have two car
insurance. I pay every year. Myhomeowners insurance is once a
year, put that in there onetime, my real estate taxes so
twice a year. So I put that intwice. Now we're gonna remember
(19:55):
your starting date lookingforward one year, so for the
current year year, my first realestate taxes already paid
because I pay in January. Istarted this in February. So I
gotta look at June, January ofthe following year, I put it in
twice and what I think it wouldbe. Now I know what it is for
the 2023. But in 2024 isprobably going to go up. So I
(20:20):
increased it about 100 bucks,and it's close, and have
estimated income taxes you havewhen your tax return, if you owe
taxes on your federal when youfile your return or your state
when you file if you makeestimated payments, all those
things. And then I includesubscriptions for things that
(20:44):
pay once a year. And then I havemy local trash pickup is
quarterly. So that's in therefour times, my water and sewer
is quarterly. So that's in therefour times that's under yearly.
Then there's a column called onetime, he changed that to other,
he might have put in a notherone for semiannual or for
(21:10):
quarterly, I'm not sure I didn'tlook at it that close. But if he
did, instead of putting it downyearly and put it in four times,
he just put it on the semiannualand put the when the first ones
do, then it figures when if it'sif he's got a quarterly one, he
put it in one time, put whenit's due, then it will figure
(21:32):
when the next one's do the nextone too. And the next one do
going forward. So you only haveto enter one time. And then he
has a one time column, and thenhas other other would include
anything that's not paidmonthly, yearly. semiannual is
anything that you're gonna paythat's not included somewhere
(21:55):
else. When you get all thatdone, it tells you happy money.
And what is happy money is whathe's calling it, that takes your
total income for the wholeperiod takes all your expenses
for a period. And it figures outhow much money you have
available to spend, then itdivides that by the number of
(22:15):
weeks and gives you your maximumweekly allowance. In my case, it
was $263.44 much more than Ithought it was gonna be every
week $263. But if I actuallyspent that I might get myself in
trouble. So yeah, go down towhere it says actual weekly
(22:37):
allowance is what I'm willing touse. I'm using $175, it's got
three columns got days youraccount go negative, it's green,
it says negative zero, your lowis balance, as well as my
starting balance. You areunderspending by $83 a week. So
(23:00):
if I only spent $175 a week,that's for groceries, gas and
whatever, you know credit cardif I go to Home Depot and buy
some on credit card that goestowards that $175. So if I spend
$20 a month on credit card $20 aweek on credit card to force at
(23:23):
$80 a month that I've set asidethis 175 to pay for my credit
card, then a has a cash flowchart where you can actually see
in green, it's like a graph thatyou can see how your checking
account doing. If you're goingred, you can see when that's
gonna happen. There is a columnthat I use to keep this in
(23:48):
balance was my checking account.
And it's called adjusted cashflow. This was something that
happened one time thing, and youcan go in here to the adjuster
column and put a positive ornegative number in what
happened. Let's say that I setup my credit card is a monthly
payment due on the second of themonth. And I used a $600 average
(24:09):
that first month my credit cardpayment was $400. That's $200.
So I could take and subtractunder adjustment $200. And it
would because when I put it inmy credit card payment, it
didn't use up to 600 going 400.
(24:30):
So I can do an adjustment forthe 200. And now everything is
imbalance. Or I can actually addmore whatever the case is plus
or minus and adjustment, my bankbalance to whatever's happening,
because it's already subtracted600 from my bank balance, I need
to add in $200 that I didn'tspend so my bank balance matches
(24:56):
this spreadsheet. I hope thatmakes sense. Because everything
you put in here is automaticallytaken out on that day. And then
if it's less or more than that,you got to make an adjustment to
stay in balance with your bank,he don't have to do that. Then
(25:16):
he has a next steps asking theseguys tutorial, he talks about
tracking, there's a app that herecommends, and or make a
donation. If you liked thisparticular flow. I'm gonna be
upfront with you, I don't make acash donation, I told him, I'm
promoting it, and I got it in mypodcasts and people I'm helping
(25:41):
him get the news out about thisspreadsheet. I'll be back in one
moment with my final thoughts.
If you're interested in learningabout an online software that
helped myself get out of debt,it does tracking, budgeting, and
keeps track of all your assetsand all your debt. And even
tells you how much and when totransfer money into your savings
(26:05):
account, and how much and whento transfer money to your debt,
and which debts to pay off inorder. First, it's not cheap.
It's a one time payment. But itwill definitely be an
investment, something andyourself and an investment in
your personal financial life. Ifyou're interested, send me an
(26:30):
email at reduce debt increasewealth@gmail.com. And I'll send
you the information about thisonline software that worked
great for me happy giraffeforward slash lie.
They also have anotherspreadsheet, which is new debt
(26:55):
payoff. So if you're strugglingto pay off your credit cards, he
only put in your credit carddebt, or the debt you're trying
to pay off. So once you got yourcredit card debt paid off, then
maybe you can put your car loansin here and use it that way. I
(27:15):
do things a little bit differentbecause I don't know why I like
to be different. We need anemergency fund, this debt owns
looking at your debt as notconsidering you building up an
emergency fund. So you way mydebt reduction plan works is you
(27:36):
have a minimum in your emergencyfund, then you continue building
it up. So you have roughly 4000It could be 3030 by any number
between 3004 $1,000 Then youtake the money above your
minimum for your emergency fund,which is thought to start as
(27:56):
1000 and apply it to a debt,what this spreadsheet does, you
put in all your debt, and thenyou put in how much extra you
can pay. We're not paying anyextra until we build up the
amount of money in my emergencyfund. So to get this spreadsheet
(28:18):
to kind of work. To give you anidea what's going on, I guess
would be the best thing is statemy situation. That's where you
put in all your credit card.
What I did was put in a savings,I called one of them savings.
And I want to build it up to$4,000. So I said my balance is
$4,000. And I just used a highrate of interest, the highest
(28:43):
rate of interest hired and allmy other credit cards. That way
the money goes there first. Andbecause when we start doing the
plan is gonna tell you thesecond, or the third page is
going to tell you, you selecthow you want to pay out a down
(29:04):
highest interest first or lowestbounce first. So I did highest
interest first that way I put mysavings at the highest. So my
extra payment is gonna go insavings. Don't worry everything
else you put in your minimumpayment. But for your savings,
how much can you put in there?
(29:27):
Is it $75 A week, you got tofigure out how much per month 75
times for $300. It doesn't haveto be exact. Get what you think
you can do at this point. Thenwhen on this spreadsheet, it has
an option called tracking. Thisis where you put the actual
(29:50):
information in. You put in whatyour payment was for that
particular month. So what I didfor savings, I just said I made
five on all was a month paymentof 500, my balance 500, the next
month 500,000. So I just didthat I enter $500 a month and
(30:11):
kept increasing my balance by500 on, this doesn't affect
anything else, once I got up to3500, and then I applied 3000,
or how much I needed to pay offanother credit card, which was
$15, less than 3000, I paid itoff. So that left me $15, you
(30:35):
know, little balance there ofabout $500 $515, something like
that. And then the next month, Iput in another 500. And I put my
new running balance in there. Sothe balance on the tracking part
of this spreadsheet is thebalance in your savings, and the
(30:57):
balance on your credit cardstatement. If you if your
interest rate changes, you canupdate that, here's what he said
in his video, I never tried todo that. If you can update, you
can change the interest rate towhatever the new rate is. Or if
you maybe got the wrong rate orwhatever, you can update it
(31:17):
here, whether that goes back andchanges anything, then they got
the nerdy planned facts, whichgives you an amortization table
of what's going on. But it'sonly gonna work for the first
$4,000 Because I set up mysituation was my savings,
balance $4,000 Or I could setthat up as zero. But then when I
(31:40):
go to my plan, it's gonna bepaid off in zero months. So it
can do it either way. Becausethis other information than
facts kind of gives youinformation. That tracking is
where you're gonna use the most,where you enter the your
payments in and your runningbalance. And you do that for the
(32:03):
savings account and all yourdebt that you're wanting to pay
off. And by doing that, you cansee what's going on, he can see
you're making the minimumpayment, he can see what your
balance is, because the minimumpayments gotta be paying
interest in principle. So yourbalance is going to be coming
down ever so slowly. And thenwhen you make these, so you have
(32:26):
a good idea what it would be topay off at that particular date.
But then again, you'd go to yourcredit card, online account and
get to a day paid off. Whateveryou pay, it's probably going to
be off a couple of bucks. So youhad to come back next month, and
pay it to zero. But eventuallyyou'll get there. But this gives
(32:49):
you a visual of what you'redoing all in one place. All your
credit cards and your savings,you see the savings coming up to
a balance, then it drops down.
He then when the month itdropped down, you see that we're
at one at want to pay off firstcredit card. And now that credit
card has a zero balance. Now youknow you're working on the next
(33:10):
one, you build up your savingsagain, the 4030 500 whatever you
then applied to 3000 on and onyou go and you have a visual. So
this will work with my plan. Oryou can use it as he does if you
want to pay $20 extra a month,he'll tell you how many months
(33:31):
it's gonna take to pay off thefirst debt the second debt, if
you're gonna do it the way hedoes. Don't put in a savings
account there. I'm just doingthis for a savings account to
track what's going on. On mydebt reduction plan to do it the
way I do it. You need to dosomething, it doesn't matter how
(33:52):
you do it. The Happy giraffe isgood. budget spreadsheet, good
debt reduction spreadsheet. He'sgot videos you could learn how
to do it. And if you make adonation, let them know how you
found out that you heard aboutit from reduce debt increase
(34:12):
wealth podcast, you'd be gladyou did. So
Hello, I'm your host, Mr. Chuck, I retired
accountant turned truck driver,I reduce my debt in a relatively
short period of time, debtreduction to achieve financial
freedom takes commitment,confidence determination.
(00:25):
alternative to the controlcenter, there is another way to
account for finances. But beforestarting on that option, going
to follow up on some controlcenter items, if you don't know
control center is it's basicallyyour budget. I call it a control
center because that's where youcan arrange your expenses and
(00:49):
your income and the order that'sgood for you. And you can see
the dollar amounts you spend inthe past and what you budgeted
the budget column to pay in thecurrent month. at a quick
glance, as you keep it up todate, you'll be able to identify
(01:09):
if you're overspending in aparticular area, and you'll be
able to correct that before itgets out of hand, justify why
it's happening, and make somecorrection. So some other
categories, so you don't end upwithout some money, or having to
use your credit cards to pay forsomething in the future because
(01:32):
you forgot about a bill comingup. Last episode, I talked about
how to get started, and how toset up your budget or your
control center, and how to do itfor the first month, every pay
period, you need to update yourtracking. And once you get that
(01:53):
you print out a report bycategory, and then you go into
the actual column, when I sayprintout report is from the
first of the month, to thecurrent date. And that's always
gonna be changing, it's gonna bemaybe the first week of the
month, and then through thesecond week, first of the month
(02:13):
through the second week, firstmonth through the third week,
first of the month to the end ofthe month, you're doing this
month by month. So if the end ofthe month ends in like on
Wednesday, and it's not a payday that you're tracking, do the
report to the end of the month,and update your actual. Now when
you update the actual you'regoing to be putting in the new
(02:35):
total amount. So you're notdoing any math to add it to the
actual column, you're justputting in a new number, the
spreadsheets gonna figure outthe difference for you. And you
can see what's going on. So it'snot all that difficult. If you
have a tracking application thatdoes that for you where you can
(03:00):
get a report by category andmost all of them do it. The
problem is the order that yourreport comes out might be in
alphabetical order, by theexpense and income, you know,
income is going to be groupedtogether and all your expense is
going to be grouped together.
But they're going to be inalphabetical order. So your
utilities might be under you atthe bottom. Your food and
(03:23):
groceries could be depending onthe categories you're using
could be all over the place. Hemight have dining under D, he
might have groceries under g, hemight have entertainment under
eat, I mean, it could be allover the place, and we want to
group them together. That's whyyou do the budget. The budget is
set up by needs first and thenonce needs housing,
(03:48):
transportation, food, savings,insurance, that's not anywhere
else. And debt. These are thingsthat you pay every month now
your insurance might be paidquarterly, might be paid
monthly, might be paid yearly,but it's something they got you
have to pay. So when I sayinsurance, that's insurance is
(04:12):
not in any other category, yourhomeowners insurance would be
under housing, your autoinsurance would be under
transportation. So this would beother types life insurance,
maybe you pay quarterlydisability insurance, all kinds
of different types. I'm nottalking about health insurance,
if you're paying healthinsurance through your employer,
(04:34):
and sorry, out of your paycheck,there is no need to budget for
it. No, you need to account forit because it's already gone.
It's already paid and the amountof money that you're tracking is
the net result after you paidthat item. Same way. thing with
your retirement plans, your 401kwhatever, you may have the same
(04:55):
thing. You do that for the firstmonth. fairly easy. Now we go
into the second month, do yougot two choices, you can use
this original budget dollaramount, you can copy and paste
them over to the second month.
Or you can look at your actualif you've been making changes to
(05:16):
your users, maybe you changedsome plans and you got a better
plan for a lower price, or youcancel some subscriptions, you
may want to use a new numberthere. Now it's going to take a
subscriptions that you cancelledmight be a month or so before it
flows through and yay, quitscomes you know quits coming out
(05:39):
your checking account, dependingon your timing, if you use the
original budget dollar amounts,copy and paste them into your
second month, and then do youractual, again for the second
month. If that difference of theactual x will become smaller and
smaller, and at different startbecoming more than 50 or $100.
(06:01):
Now you want to update thatoriginal budget amount for the
third month to the new actualnumbers. Now in May, the ones
that are coming to zero as theinto same amount every month, no
matter what those are good, youdon't have to change those, the
(06:21):
ones that have gone downsignificantly, you can update
those, what I would do is justcopy and paste. The one year at
the end of the second month whenit's all done, everything's
updated. You copy and paste theactual over into your third
month's budgeted amount. Andthen start again, this is a
(06:44):
never ending process, you'regoing to always be updating and
changing that budget dollaramount to tune it and to be what
you are actually spending. Andthat's true for groceries and
gasoline for your automobiles,we have inflation. So these are
(07:06):
ever changing numbers. If you'restarted out and your groceries,
you had a $10 He was like $10over budget at you meaning you
had $10 more on your budget thanwhat you actually spent, you're
doing good. And then a monthlater, you're pretty much even.
And then the month after that.
So three months down the road,you might be $10 to the
(07:29):
negative, well, you need toupdate that because your cost of
your foods going up, the cost ofgasoline may be going up. Same
thing when the prices drop,gasoline might go up 60 cents a
gallon, and then a month or twolater might be 50 cents a gallon
cheaper. So you might adjust itup and then you just back down.
(07:50):
So it's gonna be a never endingprocess for some of these
categories. But the reasonyou're doing this is so that you
know how much money you're gonnaneed to be able to pay for these
expenses as you go through life.
(08:10):
Looking forward, our goal andthe long term is to pay all your
bills timely, and crease youremergency fund up to at least a
minimum of $1,000 and thenreduce your debt and then
increase your savings. That'swhat you want to do. If you're
(08:31):
always in debt, and you have alot of debt, you're never gonna
get ahead of whatever's goingon, you're always gonna be
behind, you're always going tobe struggling to pay for things,
and you're gonna seem likeyou're working for somebody
else, no matter what you do,because you've always come up
(08:54):
short every month and there'sthings you want to do that you
can't afford to do. Maybe youdon't take a vacation, maybe you
don't buy new clothes, or maybethat new US car that you were
looking at you can't reallyafford it or your insurance is
too high because you got a badcredit rating so your insurance
(09:15):
is higher. Everything affectseverything else. So before you
can get anything started youhave to start tracking and this
is true for the alternative tothe control center. And it's
really just a different way ofapproaching the same solution
(09:39):
doing a budget having a controlcenter keeping it updated and
all that kind of do stuff itweek in and week out he had
turned the method which is Ihave a link in my show notes
actually the be in there twicebecause I have a link for this
episode and and my footnotes onmy show notes I got that same
(10:00):
link again, if you find hispodcasts useful, and you'd like
to subscribe, you can go to myshow notes, click on
subscription page, and you canmake any contributions you want
for any length of time you wish.
Now, the alternative to doingyour control center, you're not
going to get out of tracking,you still have to track, go to
(10:22):
happy draft.org For slash live,happy giraffe.or NFT go to the
page forward slash live has twospreadsheets, they're set up
free that you can download. Thefirst one is called budgeting
(10:45):
spreadsheet. That's the one I'mgoing to talk about. The second
one is fairly new, I didn't evenknow they had it until today
when I was getting ready toproduce this episode. And it's
called debt payoff spreadsheet.
So if you're on my debtreduction plan, this debt payoff
(11:06):
spreadsheet can help you becauseit helps you organize your debt
and tell you how much to pay. Itkinda is good. It's not exactly
the same as my plan. But I'llnot talk about that later. We're
in the budgeting spreadsheet,it's fairly straightforward.
It's easy to use. I set it up inUSD it and was able to keep
(11:30):
track of my bank balance guidecard the numbers and match my
bank balance. I did that forfour months. And I didn't have
much problem is not designed todo that. But I was able to keep
everything up to date. And I wasable to look in this spreadsheet
(11:51):
for the current date and know,at the end of the week it was
this a weekly thing. And knowYep, that matches my bank
balance. So I know all theinformation I have in there is
absolutely correct. And I didthat for four months is not
designed to do that is notdesigned to be used as your
(12:11):
check register. And I didn'tfind found that out when I asked
the creator of it that can youdo that? He said, Well, nobody
ever asked me. He goes, give ita shot. So I did. And I was able
to do it for four months. Andthen I just went I don't need
it. So I didn't quit using it tocreate or update it the
budgeting spreadsheet kind ofmade it better. I don't have the
(12:33):
newest one download it because Iwas using the older version. But
the changes are not that much.
The only change I can see is hetook out on the expense side.
For those of you that don't knowwhat I'm talking about, that's
(12:55):
fine. He took out the weeklycolumn. And at the end put in
other which is good because Inever use weekly, I know have
expenses I paid every week. Nowif you have childcare, you
probably have a weekly expense,or dog care or whatever the case
may be, you could have a weeklyexpense, but instead of put it
(13:18):
on weekly just put it over thereon the other. So you still have
to track to use a spreadsheetbecause it doesn't do any good.
If you don't know your numbers,you still need to know numbers.
It starts out the period and thedate you start I started on the
first day of a month washappened to be a Wednesday. I
(13:39):
think if you watch his video, hehas a video that explains how to
use it also has a book a few thebooks free if you got a
subscription somewhere or youcan download a PDF, but it
explains how these things work.
So the first page and this mayhave changed is you put in your
(13:59):
start date the number of weeksyou want to for i did for one
year for the two weeks. And Iput you know a year from there
which was January 30 Because Istarted on February 1 So that
was 12 months that currency type$1 So I guess if you live in
other countries yes he has othercurrency amounts for people live
(14:24):
in another countries. But thisis all an English show is not
that difficult. At least theversion I got it's all in
English. The at the bottom ofthe page. This is a spreadsheet
that has pages to it or sheetsso it's everything is right
there in front of you. So at thebottom says one period to income
(14:44):
income source, the beginning ofthe income source he asked for
your bank balance so I went intomy bank account and got my
balance and plugged in number.
And by the way, that was thelowest dollar amount for the
whole Will year was my beginningbank balance, and then your
(15:04):
sources of income, you know,name type, I'm retired, so I
have two monthly pensions, thedollar amount, and the next time
you're gonna get paid. I startedon the first of the month. So my
next pay was, you know, on thefirst Tuesday or the second
(15:26):
Tuesday and my one is on thevery first I was the same day,
that was it. Now if you work,and you have two jobs and you
get paid weekly, you need to putin job a weekly, take home pay,
and the date. Now if your weeklypay is different, every week, go
(15:50):
back for a month, go back forfour or five pays, add them all
up and come up with an average.
And if you have a second job,same thing, put that
information, your spouse orsignificant other works. Put
that income in there. If youhave a hobby that you get, I say
a hobby that you get income froma has to be some that's on a
(16:12):
regular and ongoing basis, saymaybe like $100 a month, or
something like that is if thisan occasional income, don't
worry about it, don't includeit, because it's not going to be
enough. And it's not going to beon any regular basis to help
you. Then the third sheet isfixed expenses is where he made
(16:33):
some changes, he took the weeklyout which I wasn't using, you
have monthly. So you listeverything you pay every month,
the description, the dollaramount, and the day in the month
it's due, not when you pay it.
But when it's due the daythey're supposed to pay it. So
(16:56):
if you have rent is due on thefirst day, you always pay it on
the 10th. Don't put the 10th inthere, put the first in there,
because that's when you'resupposed to pay it. Remember,
goal one is to pay our bills ontime. Goal two is to quit using
(17:17):
credit and reduce our debt. WellI goal to really is build up
your emergency fund to at leasta minimum of $1,000 and go
through it. Three is reduce ourdebt and part of reducing your
debt. If you have a checkingaccount that has a negative
balance, that's considered debt,you need to work on that first,
(17:39):
you need to get your checkingaccount up to a positive
balance. And those bank feeswill go away, keep it in the
positive,the bank fees are go down, keep
that money in your own pocket,put it in your savings, build up
your emergency and they'll gotowards helping you pay down
your debt. For those of youdon't know my debt reduction
(18:00):
plan that's going to be comingup in the next episode. But it's
pretty basic, quit using credit,make the minimum payment, build
up your emergency fund to aminimum of 1000. After that,
build it up to three to $4,000take the amount over the minimum
(18:20):
of 1000 ply it to one of yourdebt. That is it in a nutshell.
We're gonna go that in detail mynext episode. So in this
spreadsheet, we have monthlyexpenses. So you've put down my
dis, I had a buffer $1 amount,my electric, my telephone, my
internet, my my cell phone, mynatural gas, my TV streaming
(18:45):
about it, I have no mortgages, Ihave all my debts paid off. So
if you have a mortgage payment,you have car loans, all that
would be in there on monthly.
Again, it's a description ofwhat it is. So you know what it
(19:06):
is the dollar amount and the dayof the month, you pay it. And
that should be the day of themonth, it's due that their
monthly we have yearly. Now whatthat happens, I use this columns
for car insurance, I pay my carinsurance semi annual or twice a
year. So I just broke it down. Iput in car insurance. The first
(19:31):
time is due for the year. Andthen the second time is to I
know that my auto insurance isdue in March and September every
six months. So March andSeptember. I have two car
insurance. I pay every year. Myhomeowners insurance is once a
year, put that in there onetime, my real estate taxes so
twice a year. So I put that intwice. Now we're gonna remember
(19:55):
your starting date lookingforward one year, so for the
current year year, my first realestate taxes already paid
because I pay in January. Istarted this in February. So I
gotta look at June, January ofthe following year, I put it in
twice and what I think it wouldbe. Now I know what it is for
the 2023. But in 2024 isprobably going to go up. So I
(20:20):
increased it about 100 bucks,and it's close, and have
estimated income taxes you havewhen your tax return, if you owe
taxes on your federal when youfile your return or your state
when you file if you makeestimated payments, all those
things. And then I includesubscriptions for things that
(20:44):
pay once a year. And then I havemy local trash pickup is
quarterly. So that's in therefour times, my water and sewer
is quarterly. So that's in therefour times that's under yearly.
Then there's a column called onetime, he changed that to other,
he might have put in a notherone for semiannual or for
(21:10):
quarterly, I'm not sure I didn'tlook at it that close. But if he
did, instead of putting it downyearly and put it in four times,
he just put it on the semiannualand put the when the first ones
do, then it figures when if it'sif he's got a quarterly one, he
put it in one time, put whenit's due, then it will figure
(21:32):
when the next one's do the nextone too. And the next one do
going forward. So you only haveto enter one time. And then he
has a one time column, and thenhas other other would include
anything that's not paidmonthly, yearly. semiannual is
anything that you're gonna paythat's not included somewhere
(21:55):
else. When you get all thatdone, it tells you happy money.
And what is happy money is whathe's calling it, that takes your
total income for the wholeperiod takes all your expenses
for a period. And it figures outhow much money you have
available to spend, then itdivides that by the number of
(22:15):
weeks and gives you your maximumweekly allowance. In my case, it
was $263.44 much more than Ithought it was gonna be every
week $263. But if I actuallyspent that I might get myself in
trouble. So yeah, go down towhere it says actual weekly
(22:37):
allowance is what I'm willing touse. I'm using $175, it's got
three columns got days youraccount go negative, it's green,
it says negative zero, your lowis balance, as well as my
starting balance. You areunderspending by $83 a week. So
(23:00):
if I only spent $175 a week,that's for groceries, gas and
whatever, you know credit cardif I go to Home Depot and buy
some on credit card that goestowards that $175. So if I spend
$20 a month on credit card $20 aweek on credit card to force at
(23:23):
$80 a month that I've set asidethis 175 to pay for my credit
card, then a has a cash flowchart where you can actually see
in green, it's like a graph thatyou can see how your checking
account doing. If you're goingred, you can see when that's
gonna happen. There is a columnthat I use to keep this in
(23:48):
balance was my checking account.
And it's called adjusted cashflow. This was something that
happened one time thing, and youcan go in here to the adjuster
column and put a positive ornegative number in what
happened. Let's say that I setup my credit card is a monthly
payment due on the second of themonth. And I used a $600 average
(24:09):
that first month my credit cardpayment was $400. That's $200.
So I could take and subtractunder adjustment $200. And it
would because when I put it inmy credit card payment, it
didn't use up to 600 going 400.
(24:30):
So I can do an adjustment forthe 200. And now everything is
imbalance. Or I can actually addmore whatever the case is plus
or minus and adjustment, my bankbalance to whatever's happening,
because it's already subtracted600 from my bank balance, I need
to add in $200 that I didn'tspend so my bank balance matches
(24:56):
this spreadsheet. I hope thatmakes sense. Because everything
you put in here is automaticallytaken out on that day. And then
if it's less or more than that,you got to make an adjustment to
stay in balance with your bank,he don't have to do that. Then
(25:16):
he has a next steps asking theseguys tutorial, he talks about
tracking, there's a app that herecommends, and or make a
donation. If you liked thisparticular flow. I'm gonna be
upfront with you, I don't make acash donation, I told him, I'm
promoting it, and I got it in mypodcasts and people I'm helping
(25:41):
him get the news out about thisspreadsheet. I'll be back in one
moment with my final thoughts.
If you're interested in learningabout an online software that
helped myself get out of debt,it does tracking, budgeting, and
keeps track of all your assetsand all your debt. And even
tells you how much and when totransfer money into your savings
(26:05):
account, and how much and whento transfer money to your debt,
and which debts to pay off inorder. First, it's not cheap.
It's a one time payment. But itwill definitely be an
investment, something andyourself and an investment in
your personal financial life. Ifyou're interested, send me an
(26:30):
email at reduce debt increasewealth@gmail.com. And I'll send
you the information about thisonline software that worked
great for me happy giraffeforward slash lie.
They also have anotherspreadsheet, which is new debt
(26:55):
payoff. So if you're strugglingto pay off your credit cards, he
only put in your credit carddebt, or the debt you're trying
to pay off. So once you got yourcredit card debt paid off, then
maybe you can put your car loansin here and use it that way. I
(27:15):
do things a little bit differentbecause I don't know why I like
to be different. We need anemergency fund, this debt owns
looking at your debt as notconsidering you building up an
emergency fund. So you way mydebt reduction plan works is you
(27:36):
have a minimum in your emergencyfund, then you continue building
it up. So you have roughly 4000It could be 3030 by any number
between 3004 $1,000 Then youtake the money above your
minimum for your emergency fund,which is thought to start as
(27:56):
1000 and apply it to a debt,what this spreadsheet does, you
put in all your debt, and thenyou put in how much extra you
can pay. We're not paying anyextra until we build up the
amount of money in my emergencyfund. So to get this spreadsheet
(28:18):
to kind of work. To give you anidea what's going on, I guess
would be the best thing is statemy situation. That's where you
put in all your credit card.
What I did was put in a savings,I called one of them savings.
And I want to build it up to$4,000. So I said my balance is
$4,000. And I just used a highrate of interest, the highest
(28:43):
rate of interest hired and allmy other credit cards. That way
the money goes there first. Andbecause when we start doing the
plan is gonna tell you thesecond, or the third page is
going to tell you, you selecthow you want to pay out a down
(29:04):
highest interest first or lowestbounce first. So I did highest
interest first that way I put mysavings at the highest. So my
extra payment is gonna go insavings. Don't worry everything
else you put in your minimumpayment. But for your savings,
how much can you put in there?
(29:27):
Is it $75 A week, you got tofigure out how much per month 75
times for $300. It doesn't haveto be exact. Get what you think
you can do at this point. Thenwhen on this spreadsheet, it has
an option called tracking. Thisis where you put the actual
(29:50):
information in. You put in whatyour payment was for that
particular month. So what I didfor savings, I just said I made
five on all was a month paymentof 500, my balance 500, the next
month 500,000. So I just didthat I enter $500 a month and
(30:11):
kept increasing my balance by500 on, this doesn't affect
anything else, once I got up to3500, and then I applied 3000,
or how much I needed to pay offanother credit card, which was
$15, less than 3000, I paid itoff. So that left me $15, you
(30:35):
know, little balance there ofabout $500 $515, something like
that. And then the next month, Iput in another 500. And I put my
new running balance in there. Sothe balance on the tracking part
of this spreadsheet is thebalance in your savings, and the
(30:57):
balance on your credit cardstatement. If you if your
interest rate changes, you canupdate that, here's what he said
in his video, I never tried todo that. If you can update, you
can change the interest rate towhatever the new rate is. Or if
you maybe got the wrong rate orwhatever, you can update it
(31:17):
here, whether that goes back andchanges anything, then they got
the nerdy planned facts, whichgives you an amortization table
of what's going on. But it'sonly gonna work for the first
$4,000 Because I set up mysituation was my savings,
balance $4,000 Or I could setthat up as zero. But then when I
(31:40):
go to my plan, it's gonna bepaid off in zero months. So it
can do it either way. Becausethis other information than
facts kind of gives youinformation. That tracking is
where you're gonna use the most,where you enter the your
payments in and your runningbalance. And you do that for the
(32:03):
savings account and all yourdebt that you're wanting to pay
off. And by doing that, you cansee what's going on, he can see
you're making the minimumpayment, he can see what your
balance is, because the minimumpayments gotta be paying
interest in principle. So yourbalance is going to be coming
down ever so slowly. And thenwhen you make these, so you have
(32:26):
a good idea what it would be topay off at that particular date.
But then again, you'd go to yourcredit card, online account and
get to a day paid off. Whateveryou pay, it's probably going to
be off a couple of bucks. So youhad to come back next month, and
pay it to zero. But eventuallyyou'll get there. But this gives
(32:49):
you a visual of what you'redoing all in one place. All your
credit cards and your savings,you see the savings coming up to
a balance, then it drops down.
He then when the month itdropped down, you see that we're
at one at want to pay off firstcredit card. And now that credit
card has a zero balance. Now youknow you're working on the next
(33:10):
one, you build up your savingsagain, the 4030 500 whatever you
then applied to 3000 on and onyou go and you have a visual. So
this will work with my plan. Oryou can use it as he does if you
want to pay $20 extra a month,he'll tell you how many months
(33:31):
it's gonna take to pay off thefirst debt the second debt, if
you're gonna do it the way hedoes. Don't put in a savings
account there. I'm just doingthis for a savings account to
track what's going on. On mydebt reduction plan to do it the
way I do it. You need to dosomething, it doesn't matter how
(33:52):
you do it. The Happy giraffe isgood. budget spreadsheet, good
debt reduction spreadsheet. He'sgot videos you could learn how
to do it. And if you make adonation, let them know how you
found out that you heard aboutit from reduce debt increase
(34:12):
wealth podcast, you'd be gladyou did. So
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