July 14, 2024 • 32 mins
Tracking is financial lifeblood, it is a must to keep track of all the money going into and out of household. Before I get started going to talk about lifestyle change that should be made to get debt under control.
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https://bethebudget.com/reasons-to-track-your-expenses/By Zach Buchenau
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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.
Tracking for debt reduction,tracking is financial lifeblood,
(00:26):
it is a must to keep track ofall the money going into and out
of household. Before I getstarted, I'm going to talk about
wildstyle change that should bemade to get debt under control.
I was listening to otherfinancial podcasts and I came
across this subject. And it'svery important, if you're
(00:47):
struggling with that podcast Ilistened to was basically high
income individuals who are stillliving paycheck to paycheck,
they had over 330,000 A yearincome, it doesn't matter what
your income is, everybody couldhave the same type of problem
that's causing them to get introuble with their debt
(01:09):
situation, you have a mortgageon your home, and maybe you have
two car payments,you gotta look at what you're
doing. First of all, you don'twant to sell an asset that's
going to appreciate in valuethat would be your home, no
matter what the payment is, orhow long you've been there.
Generally speaking, when you buya home, you got to stay there at
(01:31):
least five years to build up alittle bit of equity. So you can
sell it pay all your expensesand have a little bit of cash to
walk away with. But that's notwhat I'm talking about. If
you're struggling to pay yourbills, and you're living
paycheck to paycheck, which alot of Americans a lot of people
are doing these days, he got tolook at everything that you're
(01:55):
paying for, and focus on whatyou might be able to get rid of.
And that would be a lifestylechange. So if you have two car
payments, doesn't matter whatthe cars are. But if you got two
loans on two cars, and if that'staken more than 40% of your take
(02:16):
home pay, that is probably oneof the reasons why you're
struggling paycheck to paycheck,you've over bought your
vehicles, and you may be theirvehicles you can not afford at
this time. So what do you do?
(02:38):
Well, you got to figure out howto get rid of that debt. So if
you've got vehicles, you canalways sell whatever you have,
you don't want to sell your homebecause you need a place to live
and a home appreciates in value.
So it's a good investment. Soyou don't really want to sell
that unless you're gonna movefor whatever reason for your job
or whatever. But you got to lookat your car loans, how much of
(03:02):
your income is being eaten up bythose car payments. And that's
something you can sell, get ridof buy cheaper, like calm beater
cars, less expensive cars, maybeeven pay cash for them if you
have the ability to do so to getout from under those car
(03:25):
payments. And that's going tohelp your financial situation
greatly. And that's a lifestylechange. Everything on the
outside may look good, you'redriving nice cars, you got a
nice home, you dress well allthem things and you make decent
income, but you're spending toomuch on your vehicles. Too much
(03:46):
of your income is being eaten upby those two car payments.
That's about the one of theproblems you might run into is
the vehicle is worth less thanwhat you owe on the credit
cycle. So in order to sell it,you might have to give up some
cash to pay off the loan, so youcan get out from underneath that
(04:11):
loan. So your step one is figureout what's the market value of
your car today. Based on thiscondition, mileage and that kind
of stuff. Can you sell it andpay off the loan and get out
from under the loan. If you havetwo of them, you might want to
look at both vehicles. If you'reupside down, meaning you owe
(04:33):
more on the vehicle than whatyou can sell it for. Then your
next step would be to saveenough money until you have
enough to get rid of one ofthose vehicles and pay it off
and have enough money to buy aused less expensive automobile
that you can hopefully not haveto finance And then work on
(04:58):
getting rid of the other one.
And that's gonna free up a lotof your cash flow, and gonna
help you with your other debt.
I'm not saying you can't ownthose cars sometime in the
future, but let's get your debtunder control now. So that's one
step he can change, it's alifestyle change. And then if
(05:21):
you reduce your spending down,so you can get out from all your
other loans, whether it'sstudent loans, mortgage,
personal loans, whatever elseyou might have. And same thing
would go for if you have a boator camper, and you got loans on
those, he might consider sellingthose items. For now, get your
(05:43):
debt under control, getcomfortable in life, save up
some money. And then if you haveto refinance, have a bigger down
payment, so you have a muchsmaller payment. So let's get in
to tracking and what is that isall about. So what is tracking?
Tracking is nothing more thankeeping a journal, a log, where
(06:07):
you can do it manually, or youcan use an app, I recommend
using some type of app. Becauseif you have an app that
categories are already set up init, he can do reports, the
reports are almost set up inthere. So it makes it much
easier to take the informationand make it useful. If you do it
(06:29):
manually, it's gonna be moretedious, it's gonna be manually
doing reports, and it's just notgoing to be good. There's a lot
of apps out there that you canuse, I pay less than $10 a year
for the one I use, and it doeseverything I needed to do. And I
can change the categoriesaround, rename them, and put
(06:53):
them in order. So when I printout my report, I get it in the
order, I want to do my controlcenter or my budget. So that's
everything that goes throughyour checking account, all your
credit cards, you're usinganything do money on a you
should be keeping track of whatmoney you're spending and what
(07:17):
money you're paying towards thatitem, your checking account will
be the primary, he can also doyour savings account, because
we're going to be putting moneyin the savings account. And
occasionally we're going to takemoney out. So no one do proper
balance at all times isimportant. So you can know you
have the minimum of 1000 or themaximum of 3000, or somewhere in
(07:41):
between when you're doing yourdebt reduction plan. So that's
all tracking is but why shouldyou do it. And short the main
reason you should track yourexpenses to identify and
eliminate wasteful spendinghabits in your financial life.
Moreover, consistently trackingyour expenses will help you
maintain control of yourfinances, and promote better
(08:03):
financial habits like saving andinvestments, there's quite a few
benefits to keep tracking yourspending behavior. And once you
got started this, you never stopyou even when you get your debt
under control, you still gottado your tracking. Back in the
old days, we used to call it acheck register. But now with the
(08:24):
apps and computers, you cantrack everything, your credit
cards that you're using, weshouldn't be using any of them.
But the credit cards that youowe money on that you're trying
to pay off, the need to trackeverything that's going on with
them, everything in and out ofyour checking account everything
in it and now your savingsaccount. You can also include
(08:46):
all your other loans, so youknow that you're making timely
payments and things like that.
So it's beneficial. The moreinformation you put into that
app, the better information yougonna have when you get a
report. Number one ismaintaining your financial
(09:07):
control. Number two is holdingyourself accountable because you
can see where your money isgoing. You have tracking your
financial progress and if you'remaking gains or if you're going
backwards, and it keeps yourfinances organized. It proves
your financial security makes iteasier for you to sleep at night
reducing your stress and findingmore ways you can save money or
(09:32):
are there items you're payingfor the you no longer need or
want or use. If there is you getrid of them and cancel them and
helps you reduce impulsespending because you know how
much money you have. And overtime you'll know when your next
bills are going to be do whatneeds to be paid for this pay
(09:53):
period to the next pay periodand things like that and helps
you avoid debt because you knowyou can't afford any more And
that keeps you focused. So thoseare the reasons why you should
be tracking. So maintainingfinancial control when it comes
to personal finances being outof control. And it's not
(10:13):
something anyone would strivefor. There's nothing financially
worse than feeling like youdon't have any idea what's going
on with your money. If you don'thave any idea where your money
is going and what you're payingfor your and you know, you're
you have a problem. The goodnews is when you make an effort
to record every financialtransaction you make your are
essentially taking the reins oneverything, and anything
(10:37):
involving your money. At any onetime, you will know exactly how
much money is sitting in yourbank account and how much you
can spend. In other words, youcan track your expenses take
complete, control your finances,holding yourself accountable. If
you have any plans on saving,investing, getting out of debt
or building wealth, what isholding you accountable. I mean,
(10:57):
we all can set goals and havefinancial dreams. But if you're
not tracking your expenses,there's nothing to hold you
accountable when you make badfinancial decisions. Tracking
your expenses hold youaccountable for your future
goals. And in the long run. Thatcan be the difference between
broke and wealthy track in yourfinancial progress in addition
(11:19):
to hold yourself accountable,tracking expenses on a day to
day basis help you see yourprogress on the road to your
financial goal. Sure, there aremany times when you need to
answer to yourself for a badfinancial decision. But keeping
track of your positive progressis just as important. Think
about if you have a goal ofsaving 25,000 A year and you
(11:41):
track your expenses every day,you can celebrate all the little
wins along the way. For example,if you're for forego an expense,
expensive dinner out, andinstead cook food at home
tracking expense will help yousee the impact of that decision.
And regards to your savingsgoals. Keeping your finances
organized throughout my life Mydad has saying it's easier to
(12:03):
keep cleaned, and then to makeclean. What he means is that in
any area of life, it's easier tostay organized. And it's than it
is to organize a messy financialsituation. And this saint has
guided me throughout my life,and short, disorganized finances
lead to financial problems. Oras you spend five minutes
(12:24):
logging expenses and look atyour bank account every day,
you're much less likely to letanything slip through the cracks
and proving your financialsecurity. If you go for weeks or
worse months without checkingyour bank account and logging
your expenses into a budget, yourisk your financial security.
What if somebody steals yourdebit card information or your
(12:46):
credit card, you lose, and theymake charges. If you're tracking
on least once a week, you lookat your statements online, and
you know something is out ofplace. Because you can remember
what you've done. The more oftenyou do it, the better off you're
gonna be. But over time, youshould do it at least once a
(13:09):
week, or at least every payperiod. I do it. If you go out
and do a lot of shopping onFriday or Saturday, then you
want to enter all the expensesright away when you get home.
That way, you know what youspent the money on. He might go
to Walmart, but did you buygroceries? Or do you buy
(13:29):
clothes. So getting yourcategories correct is very
important. And you got to beconsistent on that. So just
being aware of what's going onwhat you personally did and or
your spouse personally did isgonna help you identify those
things that pop up, that you maybe unaware of that you might
(13:51):
just pay in the past, you mighthave got your credit card
information online or somethingyou're not aware of it. Then all
sudden you got these chargescoming in, they're gonna start
small to see if they can getaway with something. But if you
stop it when it starts small,yes, it's a pain in the butt.
Because you got to call yourcredit card company they
canceled that car and they gotto mail you a new card and it
(14:13):
takes a while. But it's a lotbetter than paying for somebody
else's purchases. And that'sgonna help you stay focused and
stay towards your goal ofreducing your debt. Reduce
impulse spending when you makepurchases are well think
thinking that through orconsulting your budget it can
have a loud lasting negativeimpact on your financial life.
(14:37):
Somewhat from what I observe andexperience impulse spending is
an m&e a wealth of thought Ialso learned that the closer
your pay attention, yourpersonal finances track your
expenses, the less likely you'dlike to make impulse purchases.
Now I can't be 100 sure why thisis but I have a theory. When you
track your expenses every dayyour financial well being comes
(15:00):
from much bigger focus andpriority in your life. So when
you see something you mightotherwise spend money on without
second thought, you pause andexamine in context of your
overall financial picture. Andthat pause can be the difference
between a foolish impulsepurchase and the decision to
walk away. Also, if you'relooking at the buy something
(15:20):
that's gonna cost you more than$500, and you got to set this
number of yourself, maybe $200.
II gotta give yourself a 30 daya 10 day time period where you
think about it, do you reallyneed it? Can you get by without
it, maybe buying it in thefuture might be a better idea.
At this time, you should beprimary focus on on reducing
(15:42):
your debt. And you can't do thatif you're doing impulse buys. So
any dollar amount purchasethat's large, where you said
that at $200, or $500 isimportant to take a pause and
think about it. Like for me, I'dlike to have a new big screen TV
55 inch, and I like one of thesenew ones with a really good
(16:06):
picture. But I can't justifyspending $1,200. But what I'm
gonna do is save up my moneywhile my TV goes out. Because it
will someday sooner than later.
I'll have the money saved up tobuy the new TV
I want. But I don't need it.
Now. I could use it in thefuture, though. avoiding debt. I
(16:27):
don't think of it. It's anysecret that the here at be the
budget, that's the article isthat be the budget. We're not
fans of debt. So to be honest,I've never met anybody that
loves paying interest and makingmonthly debt payments. Sure,
they may love the car theyfinance or the expense of bank,
they put on a credit card, ifyou ask them, if they love
(16:48):
making the payments on it, I canalmost guarantee they say no.
For that reason, trackingexpenses can be a powerful
motivator to steer clear ofthat. Because you know what you
can afford. And when you can payit, you got to treat your credit
cards like cash. And if youcan't pay it off, whether at the
end of the week, or the next payperiod or whatever without
(17:11):
hurting your budget, then that'san item you cannot afford to
buy. And you can have to gowithout. And fat one, the
original reason why I personallydecided to get out of debt, and
stay out debt forever is becausewe started tracking our
expenses, though I did. And wewere discussed but how much
money we're spending on debteach month. It was overwhelming
(17:33):
to say at least. But thank God,goodness, we did it. So the more
debt you have, and it's it'sgood to know, add up all your
loan payments, how much is that?
What percent of your income isthat? If it's 90%, that's why
you're struggling because youdon't have money left over to
(17:55):
pay for groceries, car, gas forthe car and things you need on a
daily basis to go to work and tosurvive and live. He also gotta
remember that more than yourhome is more than his making
that mortgage, you got to payall the utilities and all the
expenses related to the home,such as maintenance and stuff
(18:18):
like that. Maybe you need to getsome light bulbs. Well, light
bulbs are not cheap anymore.
That could be a $50 you round byfour or five light bulbs that
could be 50 $60 own in your homeor where you live is not a cheap
endeavor. So you got to makesure you have the money
available to pay those monthlyexpenses because that's a need
and not a once everything needsjust going out impulse buying is
(18:41):
most likely a want. And that iswhere you got to cut back on
your lifestyle and cut back onthose things and focus on
getting out of debt, and howimportant that is to you. That
should be the most importantthing in your life, because
you're not going to move forwarduntil you get your debt under
(19:02):
control. Now I'm going to gointo some of the mechanics, he
gets yourself an app, find onethat works for you. You don't
want to pay 14 or $15 a monththere are good ones out there.
If you're struggling with that,you want to try to keep your
expenses down. I use countabout.com It's less than $10 a
(19:25):
month, I don't pay for anyextras that works just great.
You can customize yourcategories and you can do a lot
of stuff. And they're easy touse. But so what you want to do
with the current month, whereveryou are whichever the current
month, whatever the day is,whether it's the second day of
the month or the 15th of themonth, if you go back to the
(19:48):
previous month, and start withthe first day of the month. And
you probably if you're doing itfor the first time you got to
put in you what your bankbalance was at that time. And
then all the transactions fromthe first of the previous month
up through the current date, hemay struggle at first because
(20:09):
there might be some charges onyour checking account your
credit cards, you may notremember what they were for,
especially if there's somestrange name. Because you know,
some things you buy online, maynot just say might be Amazon,
but what you buy at Amazonbecause you gotta get into
(20:29):
proper category. So you mighthave buy clothes at Amazon, you
might have bought householdgoods, you could bought
anything, electronics, if that'simportant, do the best you can,
because being consistent on yourcategories is an important
factor at this point. Thecategories are already there and
set up and their process likelyin alphabetic order. So go
(20:51):
through, and when you've put inyour first transaction, you put
in the date, the words comingout of your checking account,
let's say a description, or youknow, word you buy was a
Walmart, Kroger, Kroger,whatever the name of the store,
the category what you buy, well,it's Kroger, it's groceries,
(21:12):
Walmart could be groceries oranything close. So try to
remember, you know, on the day,was it a Friday, did you go to
Walmart and buy groceries everyFriday or whatever people are
creatures of habit. So you tendto do the same thing on the same
days of the week. If it's someoff day, then you probably
(21:33):
bought something different, likesome hardware, or something that
you needed for the home or yourcar or some cleaning supplies or
something like that. So gothrough, and then put in the
dollar amount, hit Enter. Whenyou get to items, such as your
mortgage payment, it's the sameevery month, you can set it up,
(21:54):
enter it the first time, createa reoccurring journal entry, or
reoccurring entry, and set it uponce a month, the same thing,
all the same information startedthe next month that you're in.
So when all happened and give itto three days before it comes
(22:15):
due, is gonna pop up for you toapprove, don't have a post
directly into your register, buthave a go to place where you can
review it and change the date,get the exact day changed maybe
the dollar amount change,especially on utilities, and set
up recurring journal entry andthen the next month will pop up
(22:38):
an OB there. So it'd be lesswork over the long run. The
beginning is gonna take you sometime. So you go through and you
get everything entered in to thecurrent date, maybe some of the
things you entered twice,because the beginning of the
month in you're already past thebeginning of the month. So you
(22:59):
entered again, the recurrentjournal entries may not work
right away and might work overtime though. So the next month
will pop up, you can approvethem, change the date, update
the dollar amount if necessary.
So all your loan payments, allyour credit card payments, the
minimum payment, all yourutilities, everything you pay
(23:20):
each and every month, he shouldset up some type of recurring
journal entry or recurringentry. And that will help speed
up the process. Now once you sayyou go to target, or Walmart or
whatever, and you set it up thefirst time, the next time you
enter it, the date a new date,type in Walmart's gonna pop up
(23:43):
and the category is gonna bethere. But if the first time you
enter Walmart, and it wasgroceries, the second time, it
may not be grocery, so you gotto be aware, you might have to
change the category. If it's thesame, the only thing you'd have
to do is put in the dollaramount, hit enter, and you're
done. But if the category issomething different, then you
(24:04):
got to be aware of that. So it'simportant. So once you get that
all done, what you want to do isgo back and create a report from
the first of the previous monthto the 30th of the previous
month by category and print itout. And then you can just look
through it and see if there'sany maybe you created two
(24:27):
different categories for thesame thing. And tried that you
can go back and edit it.
Anything you enter can be fixed.
So don't worry about makingmistakes because you can always
go back and fix it. And when youget to the current date the bank
balance on that your app shouldmatch the bank balance online of
(24:50):
what the current balances sodon't enter anything until it
clears the bank even though youmay know well tomorrow this is
till the payments gonna come dueand I know how much it is, but
don't post it until it's clearedthe bank. That way your, your
balance on your app is alwaysgonna match the bank balance.
(25:12):
Now if you want to do that, evenyou look at the restaurant
detail, you got to remember,while these items I'm cleared
yet, so you got to look for yourbalance to make sure it matches
below those items, one or twoitems or whatever it would be.
So that's what I do. So I canmake sure I got all the correct
(25:32):
dollar amounts entered. Andthat's the reason you want it to
match your bank pounds. Now whenyou first start, that may not
match, you might entereverything exactly correct. But
maybe your beginning balancethat you use was off a little
bit. So you go back and adjustthat to get everything to
balance. And then over time, itwill work its way through. And
(25:54):
if it gets off again, you goback and readjust it. And sooner
or later over a few weeks. Itshould match your online abouts
and you do the same thing withall your credit cards. The
reason you want to put thedetail in for your credit cards
is you want to know where you'respending your money. What are
(26:15):
you using your credit cards fora using it for the pay monthly
needs?
Are you using it just to buythings like clothes, maybe
groceries and stuff like that.
Remember, if you're working on adebt reduction plan, you should
no longer be using your creditcards for anything, he should be
using that debit card, and youtrying to live on the money that
(26:38):
you have coming in. If you trackeverything, you know how much
money you got, you should beaware eventually what's coming
up. And you'll be knowing forsure I going can spend X amount
of money at the grocery store.
Now, because I got these billscoming due. I'll be back in one
(27:01):
moment with my final thoughtsare the articles are referred to
in my episodes, have a link inmy show notes. If you're
interested in checking out thesoftware that I personally use
to get my demo control, it's inmy show notes under shop
financial, you need to copy andpaste the link. And it'll take
(27:25):
you to the website can anyquestions, you can just contact
me through that particularwebsite. If you value this
podcast and I like to make acontribution, I had a
contribution link in my shownotes also give whatever you
feel is appropriate for theinformation I am providing. I
(27:46):
thank everyone for listening tomy podcast. So it may take you a
couple tries on your creatingyour report. The first time you
do it, he create a report bycategory for the month. Just do
it with your checking accountonly and get that perfected. And
(28:08):
then work on your credit cards,maybe you got two or three
credit cards that you owe abalance on. So every credit card
you owe or balance on, he shouldgo back to previous month and
put in all the detail and getthat to reconcile to the online
statement of what you owe. Soyou have all the good numbers in
(28:30):
there, that's what we'restriving for, at the beginning
is going to be a little bit timeconsuming, but it's going to be
worth your effort. So once youget that caught up, then it's
just a matter of keeping thatway. Every time you go out and
spend money. Keep the receipt,keep the paper receipt, bring it
back and enter it in right away.
That way, you know, you know,when you did it, where it was,
(28:53):
what you bought, and how much itwas, every time you go online.
And look, it may not be onlineyet. And if you post it right
away, now your checking account,it probably will be because
they're pretty quick if you'reusing a debit card, but your
credit card may be a day or twodelay before you see the charge
(29:14):
there. But don't worry, just goahead and put it in. And you
know it's coming up. And youknow what it was for? That way
of something else appears onyour credit card statement. You
can be wow, I didn't buy that. Iwonder what that was? Ask your
significant other did they buysomething Oh yeah, I did about
(29:36):
this well, then you can enterthat information. But if
neither, if nobody seems to knowwhat it was and then call the
vendor, what the charge was amaybe ask them. Can you tell me
this charge for X amount on thisday And about this time? What
did I buy? Can you remind me ofwhat I buy because I don't have
(29:57):
a receipt for it. That couldhave been something some scammer
they Oh, that was an onlinepurchase. And that was from the
Netherlands. Now, that's not me.
And then you can contest thatwith your leak and look at the
detail. Now, I'll tell you also,because I had that, where
somebody stole my, my creditcard information was buying
(30:19):
something in the Netherlands.
And it's like two or threeitems, and I challenged it in
the bank blocked it. So it neverwent through. Again, I had to
wait that time period to get mynew card and all those things.
But it's that is what I did toavoid paying for somebody else's
purchases. I never put any of mycredit information, credit card
(30:40):
information, I never save itonline. i It's a pain in the
butt to enter it every time. Butthat way, it won't have to worry
about getting stolen becausethey don't have it in their
computer are in their account.
So if somebody would hack them,they're not going to steal your
credit card information. Sothat's why I do that. And I it's
(31:04):
a pain at times. But it's alsosecurity that I do. Once you get
through and you're happy andeverything's up to date. And you
got you're getting to the pointwhere you're kind of getting the
know what all your monthlyexpenses are. And it's important
to know what they are and aboutwhen they're due. Like your
(31:27):
mortgage payments do the secondof the month, your utilities are
due the eighth or ninth. Andthen this other payment more
utility is due around the middleof the month. My Water payments
always do once a quarter, andthings like that. So you know
what's coming up. And that'simportant to know what's coming
up in the future. So you don'toverspend the money that you
(31:51):
have. You have it available topay your bills that are your
needs. And you're not going tocome up short. That is an
important concept to grasp andget taken care of. When you
create your report to do yourcontrol center, it needs to
(32:14):
include all your accounts herechecking in all your credit card
accounts because you want thetotal amount of money that you
spent for that first 30 daysthat you're this is our
beginning point for creating ourcontrol center. You want
everything that you purchasespent money on included in those
(32:39):
numbers. And that is ourstarting point that we're going
to use for setting up andcreating your control center.
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.
Tracking for debt reduction,tracking is financial lifeblood,
(00:26):
it is a must to keep track ofall the money going into and out
of household. Before I getstarted, I'm going to talk about
wildstyle change that should bemade to get debt under control.
I was listening to otherfinancial podcasts and I came
across this subject. And it'svery important, if you're
(00:47):
struggling with that podcast Ilistened to was basically high
income individuals who are stillliving paycheck to paycheck,
they had over 330,000 A yearincome, it doesn't matter what
your income is, everybody couldhave the same type of problem
that's causing them to get introuble with their debt
(01:09):
situation, you have a mortgageon your home, and maybe you have
two car payments,you gotta look at what you're
doing. First of all, you don'twant to sell an asset that's
going to appreciate in valuethat would be your home, no
matter what the payment is, orhow long you've been there.
Generally speaking, when you buya home, you got to stay there at
(01:31):
least five years to build up alittle bit of equity. So you can
sell it pay all your expensesand have a little bit of cash to
walk away with. But that's notwhat I'm talking about. If
you're struggling to pay yourbills, and you're living
paycheck to paycheck, which alot of Americans a lot of people
are doing these days, he got tolook at everything that you're
(01:55):
paying for, and focus on whatyou might be able to get rid of.
And that would be a lifestylechange. So if you have two car
payments, doesn't matter whatthe cars are. But if you got two
loans on two cars, and if that'staken more than 40% of your take
(02:16):
home pay, that is probably oneof the reasons why you're
struggling paycheck to paycheck,you've over bought your
vehicles, and you may be theirvehicles you can not afford at
this time. So what do you do?
(02:38):
Well, you got to figure out howto get rid of that debt. So if
you've got vehicles, you canalways sell whatever you have,
you don't want to sell your homebecause you need a place to live
and a home appreciates in value.
So it's a good investment. Soyou don't really want to sell
that unless you're gonna movefor whatever reason for your job
or whatever. But you got to lookat your car loans, how much of
(03:02):
your income is being eaten up bythose car payments. And that's
something you can sell, get ridof buy cheaper, like calm beater
cars, less expensive cars, maybeeven pay cash for them if you
have the ability to do so to getout from under those car
(03:25):
payments. And that's going tohelp your financial situation
greatly. And that's a lifestylechange. Everything on the
outside may look good, you'redriving nice cars, you got a
nice home, you dress well allthem things and you make decent
income, but you're spending toomuch on your vehicles. Too much
(03:46):
of your income is being eaten upby those two car payments.
That's about the one of theproblems you might run into is
the vehicle is worth less thanwhat you owe on the credit
cycle. So in order to sell it,you might have to give up some
cash to pay off the loan, so youcan get out from underneath that
(04:11):
loan. So your step one is figureout what's the market value of
your car today. Based on thiscondition, mileage and that kind
of stuff. Can you sell it andpay off the loan and get out
from under the loan. If you havetwo of them, you might want to
look at both vehicles. If you'reupside down, meaning you owe
(04:33):
more on the vehicle than whatyou can sell it for. Then your
next step would be to saveenough money until you have
enough to get rid of one ofthose vehicles and pay it off
and have enough money to buy aused less expensive automobile
that you can hopefully not haveto finance And then work on
(04:58):
getting rid of the other one.
And that's gonna free up a lotof your cash flow, and gonna
help you with your other debt.
I'm not saying you can't ownthose cars sometime in the
future, but let's get your debtunder control now. So that's one
step he can change, it's alifestyle change. And then if
(05:21):
you reduce your spending down,so you can get out from all your
other loans, whether it'sstudent loans, mortgage,
personal loans, whatever elseyou might have. And same thing
would go for if you have a boator camper, and you got loans on
those, he might consider sellingthose items. For now, get your
(05:43):
debt under control, getcomfortable in life, save up
some money. And then if you haveto refinance, have a bigger down
payment, so you have a muchsmaller payment. So let's get in
to tracking and what is that isall about. So what is tracking?
Tracking is nothing more thankeeping a journal, a log, where
(06:07):
you can do it manually, or youcan use an app, I recommend
using some type of app. Becauseif you have an app that
categories are already set up init, he can do reports, the
reports are almost set up inthere. So it makes it much
easier to take the informationand make it useful. If you do it
(06:29):
manually, it's gonna be moretedious, it's gonna be manually
doing reports, and it's just notgoing to be good. There's a lot
of apps out there that you canuse, I pay less than $10 a year
for the one I use, and it doeseverything I needed to do. And I
can change the categoriesaround, rename them, and put
(06:53):
them in order. So when I printout my report, I get it in the
order, I want to do my controlcenter or my budget. So that's
everything that goes throughyour checking account, all your
credit cards, you're usinganything do money on a you
should be keeping track of whatmoney you're spending and what
(07:17):
money you're paying towards thatitem, your checking account will
be the primary, he can also doyour savings account, because
we're going to be putting moneyin the savings account. And
occasionally we're going to takemoney out. So no one do proper
balance at all times isimportant. So you can know you
have the minimum of 1000 or themaximum of 3000, or somewhere in
(07:41):
between when you're doing yourdebt reduction plan. So that's
all tracking is but why shouldyou do it. And short the main
reason you should track yourexpenses to identify and
eliminate wasteful spendinghabits in your financial life.
Moreover, consistently trackingyour expenses will help you
maintain control of yourfinances, and promote better
(08:03):
financial habits like saving andinvestments, there's quite a few
benefits to keep tracking yourspending behavior. And once you
got started this, you never stopyou even when you get your debt
under control, you still gottado your tracking. Back in the
old days, we used to call it acheck register. But now with the
(08:24):
apps and computers, you cantrack everything, your credit
cards that you're using, weshouldn't be using any of them.
But the credit cards that youowe money on that you're trying
to pay off, the need to trackeverything that's going on with
them, everything in and out ofyour checking account everything
in it and now your savingsaccount. You can also include
(08:46):
all your other loans, so youknow that you're making timely
payments and things like that.
So it's beneficial. The moreinformation you put into that
app, the better information yougonna have when you get a
report. Number one ismaintaining your financial
(09:07):
control. Number two is holdingyourself accountable because you
can see where your money isgoing. You have tracking your
financial progress and if you'remaking gains or if you're going
backwards, and it keeps yourfinances organized. It proves
your financial security makes iteasier for you to sleep at night
reducing your stress and findingmore ways you can save money or
(09:32):
are there items you're payingfor the you no longer need or
want or use. If there is you getrid of them and cancel them and
helps you reduce impulsespending because you know how
much money you have. And overtime you'll know when your next
bills are going to be do whatneeds to be paid for this pay
(09:53):
period to the next pay periodand things like that and helps
you avoid debt because you knowyou can't afford any more And
that keeps you focused. So thoseare the reasons why you should
be tracking. So maintainingfinancial control when it comes
to personal finances being outof control. And it's not
(10:13):
something anyone would strivefor. There's nothing financially
worse than feeling like youdon't have any idea what's going
on with your money. If you don'thave any idea where your money
is going and what you're payingfor your and you know, you're
you have a problem. The goodnews is when you make an effort
to record every financialtransaction you make your are
essentially taking the reins oneverything, and anything
(10:37):
involving your money. At any onetime, you will know exactly how
much money is sitting in yourbank account and how much you
can spend. In other words, youcan track your expenses take
complete, control your finances,holding yourself accountable. If
you have any plans on saving,investing, getting out of debt
or building wealth, what isholding you accountable. I mean,
(10:57):
we all can set goals and havefinancial dreams. But if you're
not tracking your expenses,there's nothing to hold you
accountable when you make badfinancial decisions. Tracking
your expenses hold youaccountable for your future
goals. And in the long run. Thatcan be the difference between
broke and wealthy track in yourfinancial progress in addition
(11:19):
to hold yourself accountable,tracking expenses on a day to
day basis help you see yourprogress on the road to your
financial goal. Sure, there aremany times when you need to
answer to yourself for a badfinancial decision. But keeping
track of your positive progressis just as important. Think
about if you have a goal ofsaving 25,000 A year and you
(11:41):
track your expenses every day,you can celebrate all the little
wins along the way. For example,if you're for forego an expense,
expensive dinner out, andinstead cook food at home
tracking expense will help yousee the impact of that decision.
And regards to your savingsgoals. Keeping your finances
organized throughout my life Mydad has saying it's easier to
(12:03):
keep cleaned, and then to makeclean. What he means is that in
any area of life, it's easier tostay organized. And it's than it
is to organize a messy financialsituation. And this saint has
guided me throughout my life,and short, disorganized finances
lead to financial problems. Oras you spend five minutes
(12:24):
logging expenses and look atyour bank account every day,
you're much less likely to letanything slip through the cracks
and proving your financialsecurity. If you go for weeks or
worse months without checkingyour bank account and logging
your expenses into a budget, yourisk your financial security.
What if somebody steals yourdebit card information or your
(12:46):
credit card, you lose, and theymake charges. If you're tracking
on least once a week, you lookat your statements online, and
you know something is out ofplace. Because you can remember
what you've done. The more oftenyou do it, the better off you're
gonna be. But over time, youshould do it at least once a
(13:09):
week, or at least every payperiod. I do it. If you go out
and do a lot of shopping onFriday or Saturday, then you
want to enter all the expensesright away when you get home.
That way, you know what youspent the money on. He might go
to Walmart, but did you buygroceries? Or do you buy
(13:29):
clothes. So getting yourcategories correct is very
important. And you got to beconsistent on that. So just
being aware of what's going onwhat you personally did and or
your spouse personally did isgonna help you identify those
things that pop up, that you maybe unaware of that you might
(13:51):
just pay in the past, you mighthave got your credit card
information online or somethingyou're not aware of it. Then all
sudden you got these chargescoming in, they're gonna start
small to see if they can getaway with something. But if you
stop it when it starts small,yes, it's a pain in the butt.
Because you got to call yourcredit card company they
canceled that car and they gotto mail you a new card and it
(14:13):
takes a while. But it's a lotbetter than paying for somebody
else's purchases. And that'sgonna help you stay focused and
stay towards your goal ofreducing your debt. Reduce
impulse spending when you makepurchases are well think
thinking that through orconsulting your budget it can
have a loud lasting negativeimpact on your financial life.
(14:37):
Somewhat from what I observe andexperience impulse spending is
an m&e a wealth of thought Ialso learned that the closer
your pay attention, yourpersonal finances track your
expenses, the less likely you'dlike to make impulse purchases.
Now I can't be 100 sure why thisis but I have a theory. When you
track your expenses every dayyour financial well being comes
(15:00):
from much bigger focus andpriority in your life. So when
you see something you mightotherwise spend money on without
second thought, you pause andexamine in context of your
overall financial picture. Andthat pause can be the difference
between a foolish impulsepurchase and the decision to
walk away. Also, if you'relooking at the buy something
(15:20):
that's gonna cost you more than$500, and you got to set this
number of yourself, maybe $200.
II gotta give yourself a 30 daya 10 day time period where you
think about it, do you reallyneed it? Can you get by without
it, maybe buying it in thefuture might be a better idea.
At this time, you should beprimary focus on on reducing
(15:42):
your debt. And you can't do thatif you're doing impulse buys. So
any dollar amount purchasethat's large, where you said
that at $200, or $500 isimportant to take a pause and
think about it. Like for me, I'dlike to have a new big screen TV
55 inch, and I like one of thesenew ones with a really good
(16:06):
picture. But I can't justifyspending $1,200. But what I'm
gonna do is save up my moneywhile my TV goes out. Because it
will someday sooner than later.
I'll have the money saved up tobuy the new TV
I want. But I don't need it.
Now. I could use it in thefuture, though. avoiding debt. I
(16:27):
don't think of it. It's anysecret that the here at be the
budget, that's the article isthat be the budget. We're not
fans of debt. So to be honest,I've never met anybody that
loves paying interest and makingmonthly debt payments. Sure,
they may love the car theyfinance or the expense of bank,
they put on a credit card, ifyou ask them, if they love
(16:48):
making the payments on it, I canalmost guarantee they say no.
For that reason, trackingexpenses can be a powerful
motivator to steer clear ofthat. Because you know what you
can afford. And when you can payit, you got to treat your credit
cards like cash. And if youcan't pay it off, whether at the
end of the week, or the next payperiod or whatever without
(17:11):
hurting your budget, then that'san item you cannot afford to
buy. And you can have to gowithout. And fat one, the
original reason why I personallydecided to get out of debt, and
stay out debt forever is becausewe started tracking our
expenses, though I did. And wewere discussed but how much
money we're spending on debteach month. It was overwhelming
(17:33):
to say at least. But thank God,goodness, we did it. So the more
debt you have, and it's it'sgood to know, add up all your
loan payments, how much is that?
What percent of your income isthat? If it's 90%, that's why
you're struggling because youdon't have money left over to
(17:55):
pay for groceries, car, gas forthe car and things you need on a
daily basis to go to work and tosurvive and live. He also gotta
remember that more than yourhome is more than his making
that mortgage, you got to payall the utilities and all the
expenses related to the home,such as maintenance and stuff
(18:18):
like that. Maybe you need to getsome light bulbs. Well, light
bulbs are not cheap anymore.
That could be a $50 you round byfour or five light bulbs that
could be 50 $60 own in your homeor where you live is not a cheap
endeavor. So you got to makesure you have the money
available to pay those monthlyexpenses because that's a need
and not a once everything needsjust going out impulse buying is
(18:41):
most likely a want. And that iswhere you got to cut back on
your lifestyle and cut back onthose things and focus on
getting out of debt, and howimportant that is to you. That
should be the most importantthing in your life, because
you're not going to move forwarduntil you get your debt under
(19:02):
control. Now I'm going to gointo some of the mechanics, he
gets yourself an app, find onethat works for you. You don't
want to pay 14 or $15 a monththere are good ones out there.
If you're struggling with that,you want to try to keep your
expenses down. I use countabout.com It's less than $10 a
(19:25):
month, I don't pay for anyextras that works just great.
You can customize yourcategories and you can do a lot
of stuff. And they're easy touse. But so what you want to do
with the current month, whereveryou are whichever the current
month, whatever the day is,whether it's the second day of
the month or the 15th of themonth, if you go back to the
(19:48):
previous month, and start withthe first day of the month. And
you probably if you're doing itfor the first time you got to
put in you what your bankbalance was at that time. And
then all the transactions fromthe first of the previous month
up through the current date, hemay struggle at first because
(20:09):
there might be some charges onyour checking account your
credit cards, you may notremember what they were for,
especially if there's somestrange name. Because you know,
some things you buy online, maynot just say might be Amazon,
but what you buy at Amazonbecause you gotta get into
(20:29):
proper category. So you mighthave buy clothes at Amazon, you
might have bought householdgoods, you could bought
anything, electronics, if that'simportant, do the best you can,
because being consistent on yourcategories is an important
factor at this point. Thecategories are already there and
set up and their process likelyin alphabetic order. So go
(20:51):
through, and when you've put inyour first transaction, you put
in the date, the words comingout of your checking account,
let's say a description, or youknow, word you buy was a
Walmart, Kroger, Kroger,whatever the name of the store,
the category what you buy, well,it's Kroger, it's groceries,
(21:12):
Walmart could be groceries oranything close. So try to
remember, you know, on the day,was it a Friday, did you go to
Walmart and buy groceries everyFriday or whatever people are
creatures of habit. So you tendto do the same thing on the same
days of the week. If it's someoff day, then you probably
(21:33):
bought something different, likesome hardware, or something that
you needed for the home or yourcar or some cleaning supplies or
something like that. So gothrough, and then put in the
dollar amount, hit Enter. Whenyou get to items, such as your
mortgage payment, it's the sameevery month, you can set it up,
(21:54):
enter it the first time, createa reoccurring journal entry, or
reoccurring entry, and set it uponce a month, the same thing,
all the same information startedthe next month that you're in.
So when all happened and give itto three days before it comes
(22:15):
due, is gonna pop up for you toapprove, don't have a post
directly into your register, buthave a go to place where you can
review it and change the date,get the exact day changed maybe
the dollar amount change,especially on utilities, and set
up recurring journal entry andthen the next month will pop up
(22:38):
an OB there. So it'd be lesswork over the long run. The
beginning is gonna take you sometime. So you go through and you
get everything entered in to thecurrent date, maybe some of the
things you entered twice,because the beginning of the
month in you're already past thebeginning of the month. So you
(22:59):
entered again, the recurrentjournal entries may not work
right away and might work overtime though. So the next month
will pop up, you can approvethem, change the date, update
the dollar amount if necessary.
So all your loan payments, allyour credit card payments, the
minimum payment, all yourutilities, everything you pay
(23:20):
each and every month, he shouldset up some type of recurring
journal entry or recurringentry. And that will help speed
up the process. Now once you sayyou go to target, or Walmart or
whatever, and you set it up thefirst time, the next time you
enter it, the date a new date,type in Walmart's gonna pop up
(23:43):
and the category is gonna bethere. But if the first time you
enter Walmart, and it wasgroceries, the second time, it
may not be grocery, so you gotto be aware, you might have to
change the category. If it's thesame, the only thing you'd have
to do is put in the dollaramount, hit enter, and you're
done. But if the category issomething different, then you
(24:04):
got to be aware of that. So it'simportant. So once you get that
all done, what you want to do isgo back and create a report from
the first of the previous monthto the 30th of the previous
month by category and print itout. And then you can just look
through it and see if there'sany maybe you created two
(24:27):
different categories for thesame thing. And tried that you
can go back and edit it.
Anything you enter can be fixed.
So don't worry about makingmistakes because you can always
go back and fix it. And when youget to the current date the bank
balance on that your app shouldmatch the bank balance online of
(24:50):
what the current balances sodon't enter anything until it
clears the bank even though youmay know well tomorrow this is
till the payments gonna come dueand I know how much it is, but
don't post it until it's clearedthe bank. That way your, your
balance on your app is alwaysgonna match the bank balance.
(25:12):
Now if you want to do that, evenyou look at the restaurant
detail, you got to remember,while these items I'm cleared
yet, so you got to look for yourbalance to make sure it matches
below those items, one or twoitems or whatever it would be.
So that's what I do. So I canmake sure I got all the correct
(25:32):
dollar amounts entered. Andthat's the reason you want it to
match your bank pounds. Now whenyou first start, that may not
match, you might entereverything exactly correct. But
maybe your beginning balancethat you use was off a little
bit. So you go back and adjustthat to get everything to
balance. And then over time, itwill work its way through. And
(25:54):
if it gets off again, you goback and readjust it. And sooner
or later over a few weeks. Itshould match your online abouts
and you do the same thing withall your credit cards. The
reason you want to put thedetail in for your credit cards
is you want to know where you'respending your money. What are
(26:15):
you using your credit cards fora using it for the pay monthly
needs?
Are you using it just to buythings like clothes, maybe
groceries and stuff like that.
Remember, if you're working on adebt reduction plan, you should
no longer be using your creditcards for anything, he should be
using that debit card, and youtrying to live on the money that
(26:38):
you have coming in. If you trackeverything, you know how much
money you got, you should beaware eventually what's coming
up. And you'll be knowing forsure I going can spend X amount
of money at the grocery store.
Now, because I got these billscoming due. I'll be back in one
(27:01):
moment with my final thoughtsare the articles are referred to
in my episodes, have a link inmy show notes. If you're
interested in checking out thesoftware that I personally use
to get my demo control, it's inmy show notes under shop
financial, you need to copy andpaste the link. And it'll take
(27:25):
you to the website can anyquestions, you can just contact
me through that particularwebsite. If you value this
podcast and I like to make acontribution, I had a
contribution link in my shownotes also give whatever you
feel is appropriate for theinformation I am providing. I
(27:46):
thank everyone for listening tomy podcast. So it may take you a
couple tries on your creatingyour report. The first time you
do it, he create a report bycategory for the month. Just do
it with your checking accountonly and get that perfected. And
(28:08):
then work on your credit cards,maybe you got two or three
credit cards that you owe abalance on. So every credit card
you owe or balance on, he shouldgo back to previous month and
put in all the detail and getthat to reconcile to the online
statement of what you owe. Soyou have all the good numbers in
(28:30):
there, that's what we'restriving for, at the beginning
is going to be a little bit timeconsuming, but it's going to be
worth your effort. So once youget that caught up, then it's
just a matter of keeping thatway. Every time you go out and
spend money. Keep the receipt,keep the paper receipt, bring it
back and enter it in right away.
That way, you know, you know,when you did it, where it was,
(28:53):
what you bought, and how much itwas, every time you go online.
And look, it may not be onlineyet. And if you post it right
away, now your checking account,it probably will be because
they're pretty quick if you'reusing a debit card, but your
credit card may be a day or twodelay before you see the charge
(29:14):
there. But don't worry, just goahead and put it in. And you
know it's coming up. And youknow what it was for? That way
of something else appears onyour credit card statement. You
can be wow, I didn't buy that. Iwonder what that was? Ask your
significant other did they buysomething Oh yeah, I did about
(29:36):
this well, then you can enterthat information. But if
neither, if nobody seems to knowwhat it was and then call the
vendor, what the charge was amaybe ask them. Can you tell me
this charge for X amount on thisday And about this time? What
did I buy? Can you remind me ofwhat I buy because I don't have
(29:57):
a receipt for it. That couldhave been something some scammer
they Oh, that was an onlinepurchase. And that was from the
Netherlands. Now, that's not me.
And then you can contest thatwith your leak and look at the
detail. Now, I'll tell you also,because I had that, where
somebody stole my, my creditcard information was buying
(30:19):
something in the Netherlands.
And it's like two or threeitems, and I challenged it in
the bank blocked it. So it neverwent through. Again, I had to
wait that time period to get mynew card and all those things.
But it's that is what I did toavoid paying for somebody else's
purchases. I never put any of mycredit information, credit card
(30:40):
information, I never save itonline. i It's a pain in the
butt to enter it every time. Butthat way, it won't have to worry
about getting stolen becausethey don't have it in their
computer are in their account.
So if somebody would hack them,they're not going to steal your
credit card information. Sothat's why I do that. And I it's
(31:04):
a pain at times. But it's alsosecurity that I do. Once you get
through and you're happy andeverything's up to date. And you
got you're getting to the pointwhere you're kind of getting the
know what all your monthlyexpenses are. And it's important
to know what they are and aboutwhen they're due. Like your
(31:27):
mortgage payments do the secondof the month, your utilities are
due the eighth or ninth. Andthen this other payment more
utility is due around the middleof the month. My Water payments
always do once a quarter, andthings like that. So you know
what's coming up. And that'simportant to know what's coming
up in the future. So you don'toverspend the money that you
(31:51):
have. You have it available topay your bills that are your
needs. And you're not going tocome up short. That is an
important concept to grasp andget taken care of. When you
create your report to do yourcontrol center, it needs to
(32:14):
include all your accounts herechecking in all your credit card
accounts because you want thetotal amount of money that you
spent for that first 30 daysthat you're this is our
beginning point for creating ourcontrol center. You want
everything that you purchasespent money on included in those
(32:39):
numbers. And that is ourstarting point that we're going
to use for setting up andcreating your control center.
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The Clay Travis and Buck Sexton Show
The Clay Travis and Buck Sexton Show. Clay Travis and Buck Sexton tackle the biggest stories in news, politics and current events with intelligence and humor. From the border crisis, to the madness of cancel culture and far-left missteps, Clay and Buck guide listeners through the latest headlines and hot topics with fun and entertaining conversations and opinions.