Have you ever wanted to improve your money management skills but felt like
budgeting was overly restrictive and downright tedious we've all been there
it seems like every day people are telling us how to spend our hard-earned
money and after working two long weeks to earn our paychecks being told how to
spend that money is something we simply don't want to hear
luckily boss in this video i will share with you the money tool that will not
only improve your financial position but will quite frankly change your life and
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life-changing content as i just mentioned many people hate the thought
of managing their money either because they lack the skills to do so or hate
how restrictive limiting your spending can be
not to mention budgeting is probably the most boring of all financial activities
at least when you're working a side hustle or investing there is the
excitement of making money however with budgeting that element of excitement
doesn't exist that is until you use the tool i am about to share with you you
see there is one type of budget that allows you to spend on the things that
truly make your life more enjoyable such as going on vacations buying a new car
every few years or eating at your favorite restaurants
sadly most people are unaware of this type of budget which keeps the financial
chore of budgeting well just a chore in this video i'm going to share with you
the story of my friend monica and tell you how she went from being a money
tight stressed out i t professional to someone who while earning the same money
has been able to fit in all of her favorite activities into her day-to-day
life meet monica monica is a 28 year old i.t
professional working in seattle after graduating college monica began working
for ibm and has always been a very driven person in fact in her first two
years of working at the company monica received a promotion and has been given
leading responsibilities amongst many of the company's corporate initiatives not
surprisingly monica brings that same intensity to the management of her money
monica is a diligent money manager every month she sits down at her office desk
at home and reviews her prior month's expenses while making adjustments for
the upcoming month needless to say monica is good with her money
unfortunately every time monica is reviewing her expenses she feels a sense
of sadness come over her monica loves to travel but ever since she bought a house
she's felt extra restricted in her ability to spend you see back in college
monica did a term abroad in spain and ever since she returned to seattle from
that time away she's been counting down the days until she could return
however life gets busy and expenses pile up and five years later she has yet to
return to beautiful spain one day after work monica met up with her friend jenny
for coffee after buying your typical six dollar latte the two girls sat down to
chat they started talking about work men and their plans for the summer jenny
began to go on about how she had just booked a two-week vacation to ireland
and how she was just in the middle of planning the activities she would do in
each of the major cities as monica listened she was happy for her friend
however she also felt a little disappointed as she knew she couldn't
afford a trip to europe in fact at the same time monica began to wonder how
jenny could afford to go on such a trip because she had all the same financial
obligations as her she had a house a car and of course all the other typical
day-to-day expenses monica decided to stop wondering and asked jenny how she
could afford it jenny smiled and said one simple word
values monica was a bit confused and asked her to explain jenny explained
that for the last few years she's been using a value-based budget which has
allowed her to tap into her ultimate passion of traveling while still saving
money and managing her living expenses jenny explained that a values-based
budget is a budgeting method that prioritizes what you value and how you
allocate and spend your money monica was immediately intrigued as she thought
that maybe this type of budget could help her realize her dream of traveling
back to spain so she asked jenny to explain how she herself could get
started with this budgeting method jenny mentioned that values budgeting requires
you to take some time out for introspection to think about what really
matters to you and adjust your spending habits accordingly she said that a fun
way to think about it is like this if your employer paid you in something
other than money what would you want it to be plane tickets designer clothes the
latest tech gadgets jenny explained that you can't ignore paying for the
necessities like a roof over your head and food on the table but this budgeting
method asks you to make mindful choices about how you spend the rest jenny knew
that monica was a detailed money manager and she suggested that she look at her
monthly expenses for the past three months and analyze white items she could
eliminate from future spending in order to make room for the expenditures that
would bring her the most amount of enjoyment monica became very excited as
her dream of going back to spain may be achievable
if she could get this values-based budget to work she asked jenny where she
could find more information on this type of budget if she had other questions
jenny said that she learned the values-based budgeting method from the
book i will teach you to be rich by ramit seti where he explains the concept
of money dials and how you can modify your spending to be able to enjoy
activities that bring you the most pleasure and cut out the ones that don't
jenny then recommended that monica pick up the free audiobook through audible
and that if she wanted to learn more that audible was just 15 a month
monica rushed home got a free copy of the book and began listening while it
was great to learn the basics of this budgeting technique from jenny the book
went into much more detail and provided some easy to understand examples for
instance if you are someone who's been spending a ton of money on clothes when
you really wish you could travel more it's time for some budget adjustments or
if you're someone who needs to upgrade to the newest phone every year then
cutting out expensive dinners may be a way to cover this cost the book
recommended that you funnel the bulk of your disposable income which is the
money you have left over after the bills are paid and your needs are met to stuff
that you value the best part is that there is no judgment on what that extra
money is put towards it's about what matters most to you if you're a techie
then it may be buying the latest gaming system or phone if you're into fitness
then it may be buying an expensive membership at a gym in your city or in
monica's case this money may be put aside for a few months until it will
cover a trip abroad in the book where you spend your money are referred to as
your money dials when using the values based budget you are turning up the
money dials on the items that bring you the most enjoyment and turning down the
dials that don't the best part is that by turning down those less important
dials it gives you the income to put towards your most important dial the
point is that this is money you can spend guilt-free which dramatically
takes away the sense of restriction that most budgets impose however one aspect
of this budget many people fail to implement properly is continuing to save
for future goals to retirement you see the budget is set up to cover routine
expenses with the rest of your money going into those items you truly enjoy
but where does saving fit into this equation it doesn't which is why before
you identify how much money you can spend guilt-free you must also add in
amounts for your savings emergency fund and investing with this knowledge of the
value space budget under a belt monica decided to dive into her last three
months of financials and determine which items she could cut from her spending
that she could use to fund her long overdue trip to spain monica began to
review her credit card statements line by line and sum the total of all of her
common expenses like meals and entertainment clothing housing costs car
payments and everyone's favorite tax after adding up all these costs from the
last month alone she realized the sum was thirty seven hundred dollars leaving
her a monthly savings of three hundred dollars
now this was not shocking to monica because she was always diligent in
reviewing your expenditure totals against her four thousand dollar
take-home income so she knew that every month she was still saving some money
however when she looked deeper she was shocked at how that money was being
spent in the last month alone monica had spent 320 on lattes or won six dollar
latte for every working day of the month she also would spend 130 on new clothes
and a hundred dollars going out for drinks with friends well all these
expenses did add some value to her day-to-day life monica had to ask
herself that these items were worth more to her than realizing her dream of
traveling back to spain the country that had captured her heart back in her
college days after reviewing not only last month's expenditures but the months
prior as well monica began to realize that she was routinely spending hundreds
of dollars a month that she could be putting to better use this was an
important discovery because often there are one-time expenses like car repairs
or new appliance purchases that when removed wouldn't provide ongoing savings
however these were expenses that kept showing up after spending a large
portion of her evening monica had made some important financial decisions she
would keep her monthly budget of 100 for nights out with her friends in her
spending plan but she would completely eliminate those pricey lattes and
clothing purchases both of which only detracted from her ability to travel
with an anticipated savings of 450 a month monica knew that in six months she
could save up enough money for a trip to spain and realize her dream of heading
back to europe fast forward some time and jenny had just returned home from
work after a long and busy day she walked into the kitchen and began to
open up her mail after scrummaging through her bills she saw an envelope
with a stamp she didn't recognize on it curious she opened the envelope and in
it was a handwritten letter and a picture of a beach the letter read dear
jenny spain is just as beautiful as when i was here last i wouldn't have realized
it without you and the values-based budget thanks love monica hey it looks
like youtube thinks this next video is the one that will change your financial
life forever give it a watch and let's see if they're right