September 1, 2024 • 23 mins
Setting up control center is easy once tracking has been complete for at least 30 days. Why 30 days to make sure almost all expenses are included. Will be going more into detail on how to set up categories and sub categories.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Charles McDonald (00:03):
Hello, I'm your host, Mr. Chuck, a 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.
Setting up budget, setting up acontrol center is easy once
(00:27):
tracking has been completed forat least 30 days. Why 30 days?
Well to make sure almost allyour expenses are included.
noname be going into more detailon how to set up categories. And
most important subcategories. Ifyou're wondering what a control
(00:48):
center is, that's my name for abudget. Tracking is your
lifeblood of your personalfinances. Your budget is your
control center, because it helpsyou get a grasp on what's going
on, and helps you control yourfinances, whether it's through
(01:08):
trying to reduce spending,trying to monitor where your
money is going, or justbasically trying to figure out
how much you can save or howmuch you can do for future goals
and purposes. It's why I call ita control center. Why do I say
(01:29):
you had to do tracking for atleast 30 days in need a lease 30
days, because that's genuinely amonthly cycle, everybody goes
through, you're gonna payeverything you need to pay on a
monthly basis. Now there's someexceptions to that. There may be
(01:52):
some insurance charges or someother fees you pay once a
quarter or every three months,there may be some bills you pay
twice a year, such as realestate taxes if you have your
mortgage paid off. But if youjust getting started trying to
set up a budget, you need toknow at least the last 30 days,
(02:16):
because that will give you allyour monthly bills you pay, it
will give you an idea how muchyou spend on groceries, how much
you spend on gasoline. And thenyou need to fill in the blanks,
the things you pay once aquarter, twice a year, maybe
(02:36):
even once a year. So over time,you'll fill in all the details,
you need to have your budget setup completely. Now I'm not
telling you to quit spendingmoney at this point. I'm not
telling you, you need to cutback on your spending. Because
(02:58):
reality we don't know if you ifyou can even cut back on your
spending. Because you don't knowhow much of your money is going
where. So if you track for 30days, now you have an idea of
the money coming into youraccount and the money going out
(03:20):
of your account. But you stillmay not be aware that you're
spending more money than whatyou have in income. So what's
included in the budget,everything that goes through
your checking account isincluded in your budget, and all
your credit cards. What youdon't include is things that's
(03:42):
automatically payroll deductedfrom your paycheck, could be
child support, could be healthcare, could be retirement
contributions. We're not worriedabout those because they're
being paid, and the money isalready gone. We're trying to
(04:02):
manage the money that getsdeposited into your checking
account on every payday. Ifyou're one of those persons.
That still gets a manual check.
You go to the bank and you cashyour check in you deposit all
but $200 of it. And you keep$200 for slush funds. Well if
(04:23):
you have a debt problem, or ifyou're struggling paycheck to
paycheck, you gotta quit doingthat. You need every penny you
make to be accounted for. Nomore slush funds guys. Got to
let your wife know how muchincome you're really bringing
(04:47):
home. Now that doesn't includeany deductions for health care,
retirement, child supportWhatever you may have
automatically deducted. But yougotta be honest up to that
point, you can't get your debtunder control, if you keep
(05:08):
sucking money out of youraccount, and not using it, to
pay your needs first, and thenapply it to your debt. So we
need categories, when you set upyour tracking your, if you use
an app, which that's what Ihighly recommend, you have an
(05:31):
item area, that's calledcategories. That's a starting
point for your budget. Butthat's not exactly how your
budgets gonna look, when you doa report is most likely going to
come out in alphabetical orderwith alphabetical order probably
make sense, if you don't havethem grouped any other way. But
(05:55):
we don't necessarily live inalphabetical order of everything
we do. We're needing to groupall of our categories together.
And we can't and we do that byhaving a heading or a main
category. And we're gonnaconcentrate on needs housing. So
(06:17):
you'd have a category calledhousing, but you do not post any
dollar amounts to that. It'smore like a heading. And every
subcategory that you list withinhousing is kind of total up to
the housing. So if you do atotals only, you know,
(06:40):
streamline report, it will havehousing in the total, what you
what you spent, I havetransportation, and the total
what you spent, it's not goingto show you the breakdown is
gonna give you some four basicnumbers, that within housing you
got you should havesubcategories. The subcategories
(07:03):
are the where you post yourdollar amounts to say you'd have
your mortgage payment, whichcould include your escrow, which
be your insurance in real estatetaxes, you'd have maintenance,
you have utilities. Now,utilities is a subcategory under
(07:25):
housing. But under Utilities,each individual utility company
is a sub category underUtilities. So you could have the
detail of how much you pay foreach individual utility. And
then that totals up into onenumber for your total utilities,
(07:49):
then that totals up into onenumber for your total housing
costs. It's fairly easy tofigure out once you're sitting
down and doing it. So if you'redoing a spreadsheet, okay,
you're gonna have column A isgonna be your descriptions. So
you're gonna go down, you got tohave your income is gonna be at
(08:13):
the top income by spouse, andthen by job or career, whatever
you're doing. If you have morethan one jobs, you list your
main job first, and then yourpart time jobs underneath that
by a spouse. If you have anyside hustles that you have a
(08:35):
regular monthly income, or ahobby where you have a regular
income, regular meaning everycouple of months at the bare
minimum, then you need toinclude the gross amount that
you receive from that. Thenunder that you're going to have
expenses. Your needs areeverything that you pay every
(08:59):
month plus what you need tolive. So it's going to be
housing, transportation, food,clothing, paying your credit
card debt, savings, someinsurance that's not included
under housing or transportation,maybe childcare or daycare. But
after that, pretty mucheverything else that you pay for
(09:23):
is going to be a want somethingthat you want to do that you can
live without that you don'tnecessarily need to have an
order to get through life asyou're going down your column A
he got expense, you knowexpenses and under that let's
(09:48):
call it housing. So housing isyour main heading. It should be
alright to left. Then you wantto end debt in one time. And
list everything.
That's a subcategory, mortgagepayment, maintenance, cell
phone, internet, utilities, thenthe utilities yet and then in
(10:15):
two times for the list all theindividual utility companies you
pay, I include cell phone underhousing because a phone used to
be a landline was connected toyour house, he couldn't take it
nowhere. So um, this leaving thecell phone, under housing,
internet the same way it'sconnected to your house, you
(10:36):
really can't take it anywhereunless it's in your cell phone.
But that's your phone service.
I'm talking about the internetservice that you pay to use at
home, when you post numbers tothis category, you got housing,
you don't post anything to thatyour mortgage payment is calm to
(10:57):
be. If you're doing this in aspreadsheet, and is not
necessarily doing a budget, IIwould it would look similar to
it's hard to explain thenumbers, you'd go like the first
indent and would be in column B.
And then the second indent andwould be at column C, you just
(11:21):
move them over. When you totaleverything up. For column A,
that would be in column B. Imean, everything could be I
don't know, he gets a jest ofit. If you're using a program
that have all that figured outfor you, he does need the now
when you're doing a spreadsheetfor your budget, you can indent
(11:42):
on the description. But all thenumbers are gonna go in column A
for you control numbers, andColumn B, Column B free control
numbers, Column C for youractual numbers. Okay, I guess
I'm getting kinda confusing onmy descriptions. Your category
(12:05):
starts with a heading. And theheading is to general category
like housing. And then withinhousing, you have subcategories
such as mortgage payment, orrent, utilities, which could
include your cell phone and yourinternet under utilities,
(12:25):
maintenance, real estate, taxes,insurance. And whatever else may
fall under housing, I justlooked up in my app. And I use
like a one. And I quote a onefor everything under housing,
(12:46):
and a two for transportation, athree, food and dining. And then
my those are my wants. And thenmy needs repeat. So everything
was a b one, b two is all mywants. When I do a report, I go
transactions, month to date,totals, income and expense, that
(13:10):
way your income is going to beat the top than your expenses or
be in alphabetic order belowthat. Now my alphabetical order
is a one than a two than athree. And it shows housing,
payment utilities. And it showsall you know it shows the total
(13:32):
for housing. But it also showseach individual line. And that's
great because that's what you'regoing to use for your budget. So
that's a transaction reports.
month to date. That's when youonce you got your budget set up.
If you're doing your controlnumbers, that would you you
would use your previous month asyour report. And you can do a
(13:58):
comparison report similar and doprevious month to the current
month to date. And it will showall the numbers and columns. And
that might be easy to look at,you can use a ruler and go down
and put it in to your budgetspreadsheet. Or you kinda can
print it out and save it and usethat as your budget numbers or
(14:22):
your budget. And you can seewhat's going on. That's the main
thing as long as you can seewhat's going on in your personal
finances. No matter how you doyour budget, or your control
center. It's going to behelpful. Each app is going to be
different. Maybe you have an appwhere you can't be won't be able
(14:46):
to edit your categories, but I'mpretty sure most all of them you
can edit categories. So if youcan edit categories come up with
a system the group area Anythingrelated to housing together,
everything related totransportation, they gather
everything related to food anddining together, everything
(15:07):
related to close together. Now,these are all the different
categories that may be on yourlist, and they're in
alphabetical order. So thatcould be all over the place, we
want to group them together bythe categories. For your budget
report, I don't use the budgetin my app, because one, it's
(15:29):
kind of confusing, that I don'tthink it's working correctly.
But maybe it's I'm not using itcorrectly. And I tried hard to
do that. If you're a novice,see, I'm sure you're gonna have
the same problems I do. That'swhy I just do the transactions,
I do my tracking in there. Andthen I create a report. And
(15:54):
again, it's transactions, totalsonly income and expense among
them to group them by income andexpense. That way, it kind of
comes out in an alphabeticorder, but your incomes can be
at the top and then yourexpenses can be below that it
should show each individual lineand it should show the total pie
(16:14):
category, you can then set up aspreadsheet, and then plug those
numbers into it so that you haveit. And you can apply other
formulas to figure out differentpercentages of what's to present
two income as your housing coststo your transportation costs,
which is useful information. Asyou develop your budget, and you
(16:39):
fine tune your control numbers,the difference will be strong
noun to ferry minimum amounts,the only time you're going to
have a big difference is ifthere's a big jump and an
expense says the real estatetaxes went way up or your
insurance went way up. Or ifthere's you don't pay it, for
(17:02):
some reason, would be a bigdifference in in in that budget.
But your insurance for yourhousing should be under housing
insurance for your auto shouldbe under autos, and then all
other insurance, if it's payrolldeducted, you don't have to
account for it. Pay if you havedisability income insurance, or
(17:23):
whatever other type of insuranceyou may have, you put that under
its own categories. See yourneeds are going to be housing,
transportation, food, clothing,credit card debt, or all other
debt savings. Maybe take care ifyou have children, and you both
(17:45):
work. And then anything afterthat would be at once, which
would be your hobbies, maybe youcan have some dining out as they
want. If you'd have a specialoccasion type thing, birthday
parties, celebrations, all thatkind of stuff would be under
once on their food, you'd havegroceries, dining out home
(18:09):
delivery, at least those threecategories, see see how much
you're spending on each one. Andthat's good way, as over time,
the news looking for ways to cutsome spending, he can say well,
maybe I no longer have homedelivery on food on meals. But
(18:29):
I'll just go to the grocerystore and cook my own. Or maybe
I can cut back on my dining out.
Last month I spent $500. Maybe Ineed to reduce that down to $200
is a good way to figure out howto reduce spending so that you
(18:52):
can increase your emergency fundquit quicker. So you can apply
it to a debt. You have. Wetalked about tracking, you
identified a problem. We'reidentifying how to solve that
problem. You're trackingeverything going through your
household income and expenses.
You've create some sort of abudget, even if you just print
(19:17):
that report from your app, andsave it for your budget for that
particular month. You had theprevious month, a comparison
report my transaction theprevious month, the current
month to date. And then once youget the current month and you do
it finalize, you can see Did youreduce your spending at all from
(19:40):
the previous month to thecurrent month? And if you did
you That's good. If you didn't,why not? Where did you go wrong?
We need to start looking atwhere you're going wrong and
correcting the problem as you gobefore you do it. So that you
can put more money into youremergency fund, so you can build
(20:05):
it up quicker, so you can applyit to your debt sooner. That's
our goal here. I'll be back inone moment with my final
thoughts are the articles Ireferred to, in my episodes,
have a link in my show notes. Ifyou're interested in checking
out the software that Ipersonally use to get my demo
(20:26):
control, it's in my show notesunder shop financial, you need
to copy and paste the link, andit will take you to the website.
Any questions, you can justcontact me through that
particular website. If you valuethis podcast, and I like to make
a contribution, I had acontribution link in my show
(20:48):
notes also, give whatever youfeel is appropriate for the
information I am providing. Ithank everyone for listening to
my podcast. Next week, we'regoing to talk about final piece
of your puzzle to get your debtunder control. And that's a debt
reduction plan. And youunderstand why I say you need to
(21:13):
control your spending toincrease your emergency fund.
And if you don't know whatemergency fund is, you're going
to learn that next week. And thereasons for it, and how you can
make it work to your benefit.
But for your control center.
Once you get it set up, assumingyou're doing a spreadsheet and
(21:33):
you got it, you did some type ofreport, he was able to rearrange
your categories. So it comes outclose to the order. He set up a
spreadsheet, he got the numberstotal and income should be at
the top of your budget, alwayswith a total line, then your
expenses that each categoryshould have its total, and then
(21:55):
your total expense. And thenyour total income less total
expenses, your net available ornon available money. And that
that's negative, that meansyou're spending more than what
you make. And how do you dothat? Well, you do that by using
your credit card, and thenyou're making a minimum payment
on your credit card, you're notgetting ahead. That's why you
(22:17):
have to quit using your creditwe need, you need to get your
spending under control, you needat least start with it in your
wants under control and cut backthere first, then cut back on
your your needs. Where can youreduce your spending on your
(22:38):
knees. Our goal here is to keepas much of our own money and our
own pocket as possible. And youcan only do that by controlling
what you spend. You couldincrease your income. But if you
increase your income and youincrease your spending, you're
(22:58):
no better off. If you increaseyour income, decrease your
spending, you're gonna be betteroff. If you just decrease your
spending, you're gonna be betteroff. It may take you a while,
but you'll be better offoverall, because you're living
within your means. And that'simportant to do. Give up those
(23:21):
credit cards. Use them foremergency situations only. We're
gonna talk about that next week.
You'll get all your debt undercontrol a whole lot faster than
you think was ever possible. Sowork on getting your budget set
up or doing a budget, printingout that report from your app,
study in it and figure out ifthere's any way you can reduce
(23:47):
your spending in any of thoseparticular categories.
Hello, I'm your host, Mr. Chuck, a 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.
Setting up budget, setting up acontrol center is easy once
(00:27):
tracking has been completed forat least 30 days. Why 30 days?
Well to make sure almost allyour expenses are included.
noname be going into more detailon how to set up categories. And
most important subcategories. Ifyou're wondering what a control
(00:48):
center is, that's my name for abudget. Tracking is your
lifeblood of your personalfinances. Your budget is your
control center, because it helpsyou get a grasp on what's going
on, and helps you control yourfinances, whether it's through
(01:08):
trying to reduce spending,trying to monitor where your
money is going, or justbasically trying to figure out
how much you can save or howmuch you can do for future goals
and purposes. It's why I call ita control center. Why do I say
(01:29):
you had to do tracking for atleast 30 days in need a lease 30
days, because that's genuinely amonthly cycle, everybody goes
through, you're gonna payeverything you need to pay on a
monthly basis. Now there's someexceptions to that. There may be
(01:52):
some insurance charges or someother fees you pay once a
quarter or every three months,there may be some bills you pay
twice a year, such as realestate taxes if you have your
mortgage paid off. But if youjust getting started trying to
set up a budget, you need toknow at least the last 30 days,
(02:16):
because that will give you allyour monthly bills you pay, it
will give you an idea how muchyou spend on groceries, how much
you spend on gasoline. And thenyou need to fill in the blanks,
the things you pay once aquarter, twice a year, maybe
(02:36):
even once a year. So over time,you'll fill in all the details,
you need to have your budget setup completely. Now I'm not
telling you to quit spendingmoney at this point. I'm not
telling you, you need to cutback on your spending. Because
(02:58):
reality we don't know if you ifyou can even cut back on your
spending. Because you don't knowhow much of your money is going
where. So if you track for 30days, now you have an idea of
the money coming into youraccount and the money going out
(03:20):
of your account. But you stillmay not be aware that you're
spending more money than whatyou have in income. So what's
included in the budget,everything that goes through
your checking account isincluded in your budget, and all
your credit cards. What youdon't include is things that's
(03:42):
automatically payroll deductedfrom your paycheck, could be
child support, could be healthcare, could be retirement
contributions. We're not worriedabout those because they're
being paid, and the money isalready gone. We're trying to
(04:02):
manage the money that getsdeposited into your checking
account on every payday. Ifyou're one of those persons.
That still gets a manual check.
You go to the bank and you cashyour check in you deposit all
but $200 of it. And you keep$200 for slush funds. Well if
(04:23):
you have a debt problem, or ifyou're struggling paycheck to
paycheck, you gotta quit doingthat. You need every penny you
make to be accounted for. Nomore slush funds guys. Got to
let your wife know how muchincome you're really bringing
(04:47):
home. Now that doesn't includeany deductions for health care,
retirement, child supportWhatever you may have
automatically deducted. But yougotta be honest up to that
point, you can't get your debtunder control, if you keep
(05:08):
sucking money out of youraccount, and not using it, to
pay your needs first, and thenapply it to your debt. So we
need categories, when you set upyour tracking your, if you use
an app, which that's what Ihighly recommend, you have an
(05:31):
item area, that's calledcategories. That's a starting
point for your budget. Butthat's not exactly how your
budgets gonna look, when you doa report is most likely going to
come out in alphabetical orderwith alphabetical order probably
make sense, if you don't havethem grouped any other way. But
(05:55):
we don't necessarily live inalphabetical order of everything
we do. We're needing to groupall of our categories together.
And we can't and we do that byhaving a heading or a main
category. And we're gonnaconcentrate on needs housing. So
(06:17):
you'd have a category calledhousing, but you do not post any
dollar amounts to that. It'smore like a heading. And every
subcategory that you list withinhousing is kind of total up to
the housing. So if you do atotals only, you know,
(06:40):
streamline report, it will havehousing in the total, what you
what you spent, I havetransportation, and the total
what you spent, it's not goingto show you the breakdown is
gonna give you some four basicnumbers, that within housing you
got you should havesubcategories. The subcategories
(07:03):
are the where you post yourdollar amounts to say you'd have
your mortgage payment, whichcould include your escrow, which
be your insurance in real estatetaxes, you'd have maintenance,
you have utilities. Now,utilities is a subcategory under
(07:25):
housing. But under Utilities,each individual utility company
is a sub category underUtilities. So you could have the
detail of how much you pay foreach individual utility. And
then that totals up into onenumber for your total utilities,
(07:49):
then that totals up into onenumber for your total housing
costs. It's fairly easy tofigure out once you're sitting
down and doing it. So if you'redoing a spreadsheet, okay,
you're gonna have column A isgonna be your descriptions. So
you're gonna go down, you got tohave your income is gonna be at
(08:13):
the top income by spouse, andthen by job or career, whatever
you're doing. If you have morethan one jobs, you list your
main job first, and then yourpart time jobs underneath that
by a spouse. If you have anyside hustles that you have a
(08:35):
regular monthly income, or ahobby where you have a regular
income, regular meaning everycouple of months at the bare
minimum, then you need toinclude the gross amount that
you receive from that. Thenunder that you're going to have
expenses. Your needs areeverything that you pay every
(08:59):
month plus what you need tolive. So it's going to be
housing, transportation, food,clothing, paying your credit
card debt, savings, someinsurance that's not included
under housing or transportation,maybe childcare or daycare. But
after that, pretty mucheverything else that you pay for
(09:23):
is going to be a want somethingthat you want to do that you can
live without that you don'tnecessarily need to have an
order to get through life asyou're going down your column A
he got expense, you knowexpenses and under that let's
(09:48):
call it housing. So housing isyour main heading. It should be
alright to left. Then you wantto end debt in one time. And
list everything.
That's a subcategory, mortgagepayment, maintenance, cell
phone, internet, utilities, thenthe utilities yet and then in
(10:15):
two times for the list all theindividual utility companies you
pay, I include cell phone underhousing because a phone used to
be a landline was connected toyour house, he couldn't take it
nowhere. So um, this leaving thecell phone, under housing,
internet the same way it'sconnected to your house, you
(10:36):
really can't take it anywhereunless it's in your cell phone.
But that's your phone service.
I'm talking about the internetservice that you pay to use at
home, when you post numbers tothis category, you got housing,
you don't post anything to thatyour mortgage payment is calm to
(10:57):
be. If you're doing this in aspreadsheet, and is not
necessarily doing a budget, IIwould it would look similar to
it's hard to explain thenumbers, you'd go like the first
indent and would be in column B.
And then the second indent andwould be at column C, you just
(11:21):
move them over. When you totaleverything up. For column A,
that would be in column B. Imean, everything could be I
don't know, he gets a jest ofit. If you're using a program
that have all that figured outfor you, he does need the now
when you're doing a spreadsheetfor your budget, you can indent
(11:42):
on the description. But all thenumbers are gonna go in column A
for you control numbers, andColumn B, Column B free control
numbers, Column C for youractual numbers. Okay, I guess
I'm getting kinda confusing onmy descriptions. Your category
(12:05):
starts with a heading. And theheading is to general category
like housing. And then withinhousing, you have subcategories
such as mortgage payment, orrent, utilities, which could
include your cell phone and yourinternet under utilities,
(12:25):
maintenance, real estate, taxes,insurance. And whatever else may
fall under housing, I justlooked up in my app. And I use
like a one. And I quote a onefor everything under housing,
(12:46):
and a two for transportation, athree, food and dining. And then
my those are my wants. And thenmy needs repeat. So everything
was a b one, b two is all mywants. When I do a report, I go
transactions, month to date,totals, income and expense, that
(13:10):
way your income is going to beat the top than your expenses or
be in alphabetic order belowthat. Now my alphabetical order
is a one than a two than athree. And it shows housing,
payment utilities. And it showsall you know it shows the total
(13:32):
for housing. But it also showseach individual line. And that's
great because that's what you'regoing to use for your budget. So
that's a transaction reports.
month to date. That's when youonce you got your budget set up.
If you're doing your controlnumbers, that would you you
would use your previous month asyour report. And you can do a
(13:58):
comparison report similar and doprevious month to the current
month to date. And it will showall the numbers and columns. And
that might be easy to look at,you can use a ruler and go down
and put it in to your budgetspreadsheet. Or you kinda can
print it out and save it and usethat as your budget numbers or
(14:22):
your budget. And you can seewhat's going on. That's the main
thing as long as you can seewhat's going on in your personal
finances. No matter how you doyour budget, or your control
center. It's going to behelpful. Each app is going to be
different. Maybe you have an appwhere you can't be won't be able
(14:46):
to edit your categories, but I'mpretty sure most all of them you
can edit categories. So if youcan edit categories come up with
a system the group area Anythingrelated to housing together,
everything related totransportation, they gather
everything related to food anddining together, everything
(15:07):
related to close together. Now,these are all the different
categories that may be on yourlist, and they're in
alphabetical order. So thatcould be all over the place, we
want to group them together bythe categories. For your budget
report, I don't use the budgetin my app, because one, it's
(15:29):
kind of confusing, that I don'tthink it's working correctly.
But maybe it's I'm not using itcorrectly. And I tried hard to
do that. If you're a novice,see, I'm sure you're gonna have
the same problems I do. That'swhy I just do the transactions,
I do my tracking in there. Andthen I create a report. And
(15:54):
again, it's transactions, totalsonly income and expense among
them to group them by income andexpense. That way, it kind of
comes out in an alphabeticorder, but your incomes can be
at the top and then yourexpenses can be below that it
should show each individual lineand it should show the total pie
(16:14):
category, you can then set up aspreadsheet, and then plug those
numbers into it so that you haveit. And you can apply other
formulas to figure out differentpercentages of what's to present
two income as your housing coststo your transportation costs,
which is useful information. Asyou develop your budget, and you
(16:39):
fine tune your control numbers,the difference will be strong
noun to ferry minimum amounts,the only time you're going to
have a big difference is ifthere's a big jump and an
expense says the real estatetaxes went way up or your
insurance went way up. Or ifthere's you don't pay it, for
(17:02):
some reason, would be a bigdifference in in in that budget.
But your insurance for yourhousing should be under housing
insurance for your auto shouldbe under autos, and then all
other insurance, if it's payrolldeducted, you don't have to
account for it. Pay if you havedisability income insurance, or
(17:23):
whatever other type of insuranceyou may have, you put that under
its own categories. See yourneeds are going to be housing,
transportation, food, clothing,credit card debt, or all other
debt savings. Maybe take care ifyou have children, and you both
(17:45):
work. And then anything afterthat would be at once, which
would be your hobbies, maybe youcan have some dining out as they
want. If you'd have a specialoccasion type thing, birthday
parties, celebrations, all thatkind of stuff would be under
once on their food, you'd havegroceries, dining out home
(18:09):
delivery, at least those threecategories, see see how much
you're spending on each one. Andthat's good way, as over time,
the news looking for ways to cutsome spending, he can say well,
maybe I no longer have homedelivery on food on meals. But
(18:29):
I'll just go to the grocerystore and cook my own. Or maybe
I can cut back on my dining out.
Last month I spent $500. Maybe Ineed to reduce that down to $200
is a good way to figure out howto reduce spending so that you
(18:52):
can increase your emergency fundquit quicker. So you can apply
it to a debt. You have. Wetalked about tracking, you
identified a problem. We'reidentifying how to solve that
problem. You're trackingeverything going through your
household income and expenses.
You've create some sort of abudget, even if you just print
(19:17):
that report from your app, andsave it for your budget for that
particular month. You had theprevious month, a comparison
report my transaction theprevious month, the current
month to date. And then once youget the current month and you do
it finalize, you can see Did youreduce your spending at all from
(19:40):
the previous month to thecurrent month? And if you did
you That's good. If you didn't,why not? Where did you go wrong?
We need to start looking atwhere you're going wrong and
correcting the problem as you gobefore you do it. So that you
can put more money into youremergency fund, so you can build
(20:05):
it up quicker, so you can applyit to your debt sooner. That's
our goal here. I'll be back inone moment with my final
thoughts are the articles Ireferred to, in my episodes,
have a link in my show notes. Ifyou're interested in checking
out the software that Ipersonally use to get my demo
(20:26):
control, it's in my show notesunder shop financial, you need
to copy and paste the link, andit will take you to the website.
Any questions, you can justcontact me through that
particular website. If you valuethis podcast, and I like to make
a contribution, I had acontribution link in my show
(20:48):
notes also, give whatever youfeel is appropriate for the
information I am providing. Ithank everyone for listening to
my podcast. Next week, we'regoing to talk about final piece
of your puzzle to get your debtunder control. And that's a debt
reduction plan. And youunderstand why I say you need to
(21:13):
control your spending toincrease your emergency fund.
And if you don't know whatemergency fund is, you're going
to learn that next week. And thereasons for it, and how you can
make it work to your benefit.
But for your control center.
Once you get it set up, assumingyou're doing a spreadsheet and
(21:33):
you got it, you did some type ofreport, he was able to rearrange
your categories. So it comes outclose to the order. He set up a
spreadsheet, he got the numberstotal and income should be at
the top of your budget, alwayswith a total line, then your
expenses that each categoryshould have its total, and then
(21:55):
your total expense. And thenyour total income less total
expenses, your net available ornon available money. And that
that's negative, that meansyou're spending more than what
you make. And how do you dothat? Well, you do that by using
your credit card, and thenyou're making a minimum payment
on your credit card, you're notgetting ahead. That's why you
(22:17):
have to quit using your creditwe need, you need to get your
spending under control, you needat least start with it in your
wants under control and cut backthere first, then cut back on
your your needs. Where can youreduce your spending on your
(22:38):
knees. Our goal here is to keepas much of our own money and our
own pocket as possible. And youcan only do that by controlling
what you spend. You couldincrease your income. But if you
increase your income and youincrease your spending, you're
(22:58):
no better off. If you increaseyour income, decrease your
spending, you're gonna be betteroff. If you just decrease your
spending, you're gonna be betteroff. It may take you a while,
but you'll be better offoverall, because you're living
within your means. And that'simportant to do. Give up those
(23:21):
credit cards. Use them foremergency situations only. We're
gonna talk about that next week.
You'll get all your debt undercontrol a whole lot faster than
you think was ever possible. Sowork on getting your budget set
up or doing a budget, printingout that report from your app,
study in it and figure out ifthere's any way you can reduce
(23:47):
your spending in any of thoseparticular categories.
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