How to Budget and Save Money

Lesson 1 of 8

Class Introduction

 

How to Budget and Save Money

Lesson 1 of 8

Class Introduction

 

Lesson Info

Class Introduction

We're gonna kick it off talking about budgeting, especially when a lot of us don't like it, because we think of it in very negative terms. But I'm going to try from reframe that for you today. First, we are going to talk about the terrible reputation that budgeting has pretty much with anyone. It doesn't matter what generation you come from. I feel like almost unequivocally, people hate the word budget. So I'm going to rebrand it for you a little bit here today. Then we're going to talk about the 101-style budgeting. It could be for the early years, depending on the phase of life you're in. It might be because you've realized I need strict rules. I really need to kinda clamp down and regulate, and these are styles that really give you that kind of rigid structure that might not be the best for you long-term, but for right now it's exactly what you need. And then we're going to talk about some 201-budgeting styles. You're more confident. You got your money under control a little bit mor...

e. Maybe life has evolved and changed in a way that you need to revamp how you budget, and you're willing to put a little bit more flexibility in there for yourself. So what some of those styles might look like. Then I also wanna talk specifically for my fellow self-employed people, freelances, contractors, anyone with a variable income. Maybe you're traditionally employed, but really work on commission, so again, this idea of dealing with a variable income. I want to tackle ways and strategies that you can get your financial life together with your budget. And then finally, this idea of developing your own unique budgeting style. Maybe what works for you is something complete tailored that you come up with yourself. I'm going to share a little bit about what I do personally, and how I've kind of taken ideas from a bunch of different styles to mash something that I like to use personally. First, let's get over this bad reputation that budgeting has. What are some words that come to mind when you hear this term, budget? No. Did you say no? I like that one, no. Very quick reaction. Anyone else want to share terms or ideas that pop into their head? Maybe the gut feeling that you're experiencing when I say budget with a hard B? Stringent? Stringent is a good one, strict. And, you know, that's a great word to kind of kick off what I usually hear is restrictive, difficult, annoying, I think that ties into no and ugh. That may be the other way to express that. Here's why I want you to kind of reframe how you think about budgeting. Instead of it being restrictive, instead of it being limiting, I want it to be a way in which you are able to relentlessly focus on spending on what you personally value. Now part of this process is, of course, identifying what it is that you value. We'll get into that a little bit today. But a key concept in both budgeting and throughout your entire financial life needs to be focusing on spending money on what you personally value. Now the problem is, we get a lot of messages out there from our family, our friends, the media about what we should be valuing, and it can be hard, because what we actually like and want to do might not align with the people around us are doing. You might be a little bit swimming upstream, if you will, on that one. So I want you to kind of start to pivot and think that a budget should be aligning with your priorities, and it should be giving you the opportunity to spend where you get the most pleasure. Now, I will admit, some of this stuff is not necessarily pleasurable. You've gotta do some basics. We gotta put into savings, we gotta start thinking about the future, but it also is a way for you to take back control, and instead of it being a restriction, I want you to think of it as an empowering tool that really makes sure that you are in the driver's seat when it comes to your money, and you are complete control over your financial life. Now it's all about that cash flow, and this is the term I'm gonna start using, because I don't really like budget, since everyone hates the word. But I do like the idea of cash flow, because no matter what you are doing, no matter the style, whether you make it up yourself or use something that's tried and true method for a bunch of people, you need to know your cash flow. And it's very simple. So step one is writing down exactly how much money comes in each month. Now, of course, if you have a variable income, that is going to fluctuate. You gotta be a little bit more hands on than maybe someone with a steady paycheck. But it's how much comes in every month, and then minus your bills, your debts, and I also include savings, because as we're gonna get to in the next segment, savings needs to be something you prioritize. And the remainder is monthly spending money that you have. Now next I want you to set guidelines for the week or the month in order to ward off debt. So you know much is coming in, you know how much is going out, and that difference... So let's say the difference is $800, you have $800 you can spend in the month. Now sometimes that step one gives you a negative number, and we will talk later about how to handle that, but let's say that you have a positive number left after you've paid off all your bills, after you've put a little bit of money into saving, after you've paid debts, you had $800 left. Now this is also gonna go towards things like food, things that are variable costs, maybe transportation, and then your discretionary spending on maybe it's household items, perhaps entertainment, other things that you wanna be doing. But setting guidelines for how you wanna spend that money really does help protect you. And for some people, maybe it's looking at $ and saying, "Every week I have $200 to spend. "If I don't spend it all, I'll roll it over." And for other people, it might be like, "Meh, I'm just gonna check in on it every week, "see how I'm doing, and just make sure "I don't overspend the amount of money that I have." But I love this idea of doing a 15-minute weekly check-in with yourself and your financial life. No matter the budgeting style you're using, checking in on all of your credit cards, looking at your bank accounts, making sure that you didn't make a purchase three weeks ago on your credit card that you totally forgot about and you definitely are about to blow your budget because you didn't remember you made that purchase. So that is just some basics about how cash flow works, but at the very beginning, just this idea of how much money is coming in, how much money is going out. That is your cash flow. That is the fundamental understanding of cash flow, and that is truly the beginning of any budgeting style that we're gonna be discussing today.

Class Description

Say the word “budget” and most people instantly feel a sense of dread—as if the walls are closing in on them. Most of us don’t like the idea of restricting our spending and feeling deprived of the things and experiences that we believe will make our lives better and more fulfilled.

But according to Erin Lowry, budgeting doesn’t have to be painful. Instead, it’s a great tool for helping you feel in control of your money. By setting a budget, you can change your bad spending habits and focus on purchasing the things you value most.

Once you’ve got your cash flow under control, then it’s time to start saving. Erin will give you a whole host of practical advice on how to save so you can avoid sinking deeper in debt, build a critical buffer in case of an emergency or streak of bad luck, and achieve true financial stability.

In this class, you’ll learn how to:

  • Figure out how much you spend each month and track every penny.
  • Identify the budgeting method that’s right for you.
  • Evaluate your spending categories and prioritize them.
  • Create an emergency fund and decide how much to put in it.
  • Automate your savings to ensure you reach your goals.
  • Find ways to slash your spending and increase your income.

Reviews

dario-lentini-adventhealth-com
 

It was a very quick and easy way of breaking down the complexities and intimidating connotations of personal finance topics like savings, budgeting, and debt. But, for the short=attention spanned, willing learners, seeking out financial freedom? This is the best course to help understand that,