Hey guys, I am here with Kylie and Elijah
and I'm really excited that they're here,
that you all are here because we're gonna hear their story
but most importantly we're gonna go over
their budget as newlyweds.
So congratulations you guys.
- Thank you. - Thank you.
- You just got married, right?
How long ago?
- Three weeks about. - Three weeks!
Okay, I didn't realize it was so soon.
Okay, that's awesome.
So how did you guys meet?
- We met through a family friend of ours.
- So great.
And you guys, age wise, you're out of college, in college?
- I just graduated three weeks ago.
- Yes, okay, so did you graduate and then have a wedding?
- Yeah, the day after.
- Yeah you did girl.
How you doing, you feeling good? That's a lot!
- Yeah, I've just been relaxing at home
until I start my job.
- Okay, so when it comes to your money,
I'm curious, did you guys talk about money
a lot before you got married?
- We kind of just talked about it
right before we got engaged just to see
if we could actually get married and make it work
but other than that we don't talk about it too much.
- Yeah, so you guys have never
done a budget together really?
- Not really.
- Well this is perfect, this is great.
But something I always tell couples in general
but especially newlyweds and for you guys out there
that are newlyweds or even married a while,
some important things,
some three do's when it comes to money and marriage.
Number one is you have to change your pronouns.
So it doesn't go from like it's my money and your money,
it's our money.
Make sure that you guys have changed those pronouns.
Also, have the same bank account.
I'm gonna put you on the spot,
do you all have the same bank account
or are y'all still separate checking?
- Still separate.
- We have a joint account.
- Oh yeah, we have a joint.
- We have a joint together and then two separate.
- She's like, yeah we do.
- So we have one together that we're gonna pay
all of our major expenses and stuff out of
and then we still have our separate accounts
so that like presents and birthdays
and stuff like that can come out of those
and he won't see when I buy stuff for him and vice versa.
- Totally, okay.
A little word of encouragement, combine it all.
So, when the presents do come though,
you can just like get a gift card and be like,
"Hey, I'm just taking a Visa gift card,"
or if it's a birthday you guys know
that you're gonna be buying gifts so be like,
"Don't look at the checking account, I'm gonna buy a gift."
Because really, I've found that for so many people
when you do join that account, so much changes.
Like it's like amazing when every cent of your money,
especially when it comes to your checking, is one.
The unifying feeling that you're gonna have is unbelievable.
So you can do it, I promise.
Okay, and then also, do your budget together,
which is what we're gonna talk about.
And for you couples out there,
again, sitting down and talking about your money,
doing a budget is so important.
So those were the three do's.
Now there's three don'ts that I always tell couples.
Don't hide purchases.
So the Target bags need to be shown
to everyone in the marriage.
Don't be stubborn, okay? Because there is gonna have to be
some compromise because one of you
is probably naturally a spender,
one of you is probably naturally a saver.
Oh, who's who?
- She's the spender. - I'm the spender.
- Me too, girlfriend.
Man, I know, it's so fun, isn't it?
And you're the saver?
- Yeah, I buy food and that's it.
(laughing)
- You're like, I survive in life
but that's about all I do.
Okay, so you're gonna have to understand
that you guys are different but coming together,
you totally will be fine,
especially when you do the budget together
which is beautiful.
And then also I like to tell people don't be hard on each other
as well, give yourself grace
because we're all gonna make money mistakes, right?
I mean even my husband and I,
we still have to be like, "Okay, I'm so sorry I did that."
You just give each other grace when you mess up.
Those are some good just things to think about,
especially the joint checking.
I'm gonna check on you guys to make sure you did that.
Alright guys, well let's get to the budget.
So this, what you're seeing, is EveryDollar,
and it's my favorite budgeting tool.
You can do it on your laptop,
you can do it on your phone, there's an app,
and it just makes things so much easier.
So one thing EveryDollar does that I love
and that I always tell people is
to make sure that your budget is zero-based.
Meaning everything coming in
is already assigned to a category
and make sure you're doing your budget
before the month begins, you guys.
And you guys too, before the month begins is key.
So, what I have here is you guys are here
and I'll type in your incomes.
You have $5,300, almost $5,400, that's a great income,
especially for newlyweds.
So giving, we always put this at the top
because it is the most important thing
that we do with our money.
If you are to give— - 10%.
- Where do you guys give?
- We tithe, tithe to our church.
- To church? Okay.
And then your emergency fund.
Do you guys have savings now, currently?
- We're right at like $7,000.
- Oh, that's awesome.
Okay, so one of the basic things that I talk about
is getting a $1,000 emergency fund.
So you guys have that. Check.
But as of now, I'll keep this at zero
because your emergency fund is funded
with the starter emergency fund of $1,000.
I didn't see anything under mortgage
so tell me about your living situation.
- My parents and I about a year and a half ago
bought a condo in cash so that we don't have to pay anything
until it comes time to move.
- That's amazing.
Everyone watching's like, "Oh my God,
you're starting off marriage without even a mortgage?"
Seriously, that's huge.
And the amount of money that you would pay for rent
or a mortgage and what you can do with it to get ahead,
I mean, amazing you guys.
That's a huge, huge blessing for sure.
Alright, so you have HOA fees for $137.
Water is $35.
So your electricity bill is $70.
Your cell phone, around $100.
Cable, $62.
Next is to do transportation, so around $200.
On groceries, how much do you think you guys
will spend a month?
- Around $300.
- Around $300? Okay.
Okay and then restaurants?
- [Elijah] I would guess around $200, something like that.
- $200.
And places like restaurants especially,
are usually the categories if there is some debt
and if you're gonna get out of debt really intensely,
it's a great category to cut altogether.
So just keep that in mind as well.
Okay so I saw nothing on clothing
but I noticed you're—
- I like to shop.
- You do like to shop.
Realistically, what do you think on average you will spend
this coming month?
- Probably between $250 and $300.
- Okay, let's do $250 for now.
And again, an area that you have to have, right?
Clothing is a need.
So not excluding that but again,
if it's for leisure and pleasure
depending on the debt situation,
it may be one that you're gonna cut back for a few months.
But that will be in the future.
School tuition, good?
- Yeah, I will just have student loans
to pay for tuition for myself.
- You will?
Girl, we'll talk about that in the debt section.
We'll talk about that.
Miscellaneous, so miscellaneous or entertainment,
on average what you do think entertainment-ish will be?
- Probably only like $100 a month because we don't do much.
- And then miscellaneous is a category
that some people skip over but it's my favorite category
because it's like the catch-all
so things are gonna happen and you're gonna be like,
"Oh my gosh, we forgot to get a leash for our future dog,
I gotta run out," or whatever it is.
It's like all this random stuff that ends up happening
and as you do your budget more and more,
the more disciplined you'll get and the more you'll say,
"Okay, that's not miscellaneous,
that really goes into housing,"
or, "that really goes into other things."
But again, especially starting out,
this is a good place to have.
So considering that we have still $3,300 left to budget,
for right now we're gonna put it at $200.
Again, your catch-all, hopefully that can start to minimize
'cause you'll be a little bit more diligent with it.
Alright, now we get down to insurance and tax.
So health insurance, it comes out of your paycheck, right? And—
- And I'm on my parent's insurance still.
- Okay perfect, so it's about $51 a month.
And you have here $620 a year.
So when it comes to these yearly things
I like to break them up into 12
and say for every 12 months.
And this will be basically an expense
that you don't spend this month
but when you go to write that big check,
all the money's still in your bank account. It's there.
Auto insurance is about $208,
and then property tax, $54 a month.
And then you have your homeowner's insurance,
about $50 a month.
There, alright.
The debt section.
One student loan, are they broken up into multiple?
- There's one from undergrad
and then they'll be one from grad school too.
- Okay, there will be one from grad school.
You keep saying that.
We gotta talk about that Kylie in just a second.
Okay, so for the student loan one,
you're like, "Why did I let her do our budget?"
Okay, so what's your total?
- $5,000.
- So what I'm gonna do is something radical
when I'm gonna take every cent here
because you have your emergency fund
and you have saved $7,000,
you need to pay off your student loan
when you walk out this door.
You need $1,000 emergency fund
and then what you're going to do
is you're going to go and you're gonna write a check
for $5,000 and pay it off.
Which means you'll have $2,000 left
but technically you'll have close to $5,000
because of what's left in your EveryDollar budget.
Promise me you'll pay it off.
Because what's gonna happen is,
is it's gonna stick around
and you guys are gonna have it and billed
and then you're gonna get in this mind-set
that debt is normal and it's just what you do
because you've made a few comments already
that you're gonna be going back to school.
So tell me about that, I wanna hear—
- So I'm getting my Masters at Vanderbilt.
- In what?
- Medicine, Health and Society,
it's the same thing as my major.
So that's a yearlong program.
- And how much student loans are you taking out?
- $30,000.
- You're taking out $30,000.
Okay, so I'm gonna challenge you guys to do,
this is gonna make you uncomfortable
but it really is the best advice you're gonna get
is I want you to pause for a year to a year and a half
and not do grad school right away.
You have a job that you're starting out
and you've already got accepted, right?
- Yeah.
- So you're like game on and you're gonna pump the brakes
and what you're gonna do is you're gonna work
for about a year, year and a half,
but really, you can look up in a year and a half
and close to be able to start going to school
and cash flowing it as you go.
I want you to go talk to five different people
that took out students loans
and I want them to be around 30 years old
and be like, "Okay, was it worth it?
"Was it worth it?"
- So I have a question.
Why wouldn't she go to school, get it done,
and then we do the snowball effect after that
and then save it off and pay it off
in a year like we have planned?
- Totally, number one, interest is miserable.
So you're gonna be paying a whole lot more for that degree
than that $30,000.
And then also what you're gonna learn
is you're not encountering risk.
So you just painted a very utopia picture of
well, in two years we could just go to school
and that we'll be debt-free later.
You have no idea what's gonna happen.
You have no idea if you're gonna get pregnant
and it's like okay, I wanna be home,
I don't actually wanna do this anymore.
Or maybe with or without a kid,
you get into the practice and you're like,
"This is not exactly what I wanna do."
You go take another job, it takes lower pay.
Life happens.
Trust me when I say that.
Life happens and so when you take on debt,
you're taking on risk and you're limiting your options.
So always, always, always cash flow everything.
A mortgage is the one type of debt
I say it's okay to take out
but everything else, cash flow it.
So, the key here is that you want this to be zero.
So because you have your money
to pay off your student loans,
what you wanna do now is to get
three to six months of expenses saved up.
Your expenses really are about $2,500-ish, right?
So if you look at that, say,
okay, three to six months, whatever that's gonna be,
whatever amount you decide,
that's gonna be your next goal is to save up
for that solid emergency fund
of three to six months of expenses.
So, what I'm gonna do is just put it in this line
the rest of this money, so $2,830 will go to savings.
And then do this for a few months,
I would say, again the next four to five months
you'll have a ton of savings there.
That six-month emergency fund is key.
And you can just keep this separate
so I would go and get a standard savings account
or even a money market account you can do at your bank
and keep that emergency fund there
and you don't touch it.
So once that's fully funded, put the $1,000 in there first
and then as you start saving
and you don't touch it.
And then once that happens,
then you can start saving up for a down payment on a house.
You're ahead of like 90% of America right now.
I mean, the fact that you have this in savings is insane
and to be able to go and do what you want.
So I'm really excited for you guys.
So, that's it.
It's an EveryDollar budget right there
and to have a step forward we have a class called
Financial Peace University and it's nine weeks long
going through it, and it helps you with not only budgeting
but everything from debt to savings to insurance,
all the above to get you guys a really solid foundation
on money knowledge so I wanted to give you guys
that class for free and it's great to go through together,
you can find a church that does it,
you can do it online, whatever.
But it takes nine weeks and it really will help you
tactically get this information more in your head.
So for those of you that are not familiar with
Financial Peace University, that is what it is,
a nine-week class that helps you really gain control
of your money and give you a road map, but also what it does
is you get a free year of EveryDollar Plus.
So what this is, is this EveryDollar that you guys saw
but EveryDollar Plus actually goes to your bank account
so when you get transactions in from Nordstrom,
I'm gonna go on the shopping theme,
whatever it is, you can drag and drop that transaction
to the clothing line item and it automatically
deducts it so it keeps up with exactly
what's going on in your budget
and that is worth every penny.
It is so, so nice.
So if you guys have more questions about
Financial Peace University, just click the link below
and I wanna thank you guys for coming out.
Seriously, I so appreciate it.
I'm really, really excited for you guys.
- Thank you. (upbeat music)