So I do, I have budget bootcamp
and today I am going to cover some
really quick tips that will help
everyone watching that you can start right now to
help you get over that holiday budget hangover.
Starting with a spending freeze
have you ever heard of that? For seven days
you don't spend any money and what it does is
cleanses you from that habit of pulling out
your credit card every time you need something
running to the store but the most important
thing is that money that you save for a week
put it toward that credit card, put it toward
that holiday debt. If you do that once a month
you will have your debt paid off in no time.
Alright so a lot of people traditionally bank
by having one savings account and
one checking account so today I am going to
recommend not having just two bank accounts
but at least seven, k.
Wow. You can get a lot of free posters
and calendars for that.
Everyone check your pulse, stay with me
I promise this will make your life easier.
I am going to run with them real quick.
We are going to start with this top drawer
which is our checking account.
So you're going to start out with your family
checking account which is your basic checking
account that pretty much everybody should have
you know, that is where when you get paid,
when you get you get a pay check that goes
into there. That account is really your home base
account that's where all your bills
are paid that's where your money
kind of sits and you use it for things.
But you're married, right?
Correct.
So there is husband checking and wife checking.
And this is why it's not my money, your money
but think about any company that functions well
you don't have two high powered people
doing the exact same thing you would
kill each other your company would collapse.
Do you ever fight about money?
Raise your hand if you fight about money,
you're all liars everybody fights about money.
If you open a yours and mine account
then what you do is you just divide up those
spending responsibilities, divide and conquer.
[Audience Applause]
There are many more you can have in checking
but lets talk about savings for a second.
You have a regular savings account I hear
that you guys are working on this right now.
That's just a standard savings account
try to have three months to live on in this
account in case something short term happens
like a job loss or whatever else.
Or that's what you would use to save up
for a trip or even christmas or whatever.
But then you need an emergency savings account
so I recommend that 20 percent of your income
should go into savings every month throw ten percent
into here and ten percent into there
and then in case of a dire emergency you are
not wiping out every bank account you have money
set aside to cover you in a time of need.
I also recommend having a health savings account
or an HSA, so there is a formal HSA
where any money you put in is tax free.
Yes you get a little debit card with it
and so it can only be used for medical expenses
and if you talk to your health insurance
or your bank or credit union, or even
your employer to see if you qualify.
If not just open a savings account
set some money aside so that when you go to
the doctor it's not eating up your grocery money.
And then everybody needs a fun money account,
for heaven sakes. Alright this is easy
and this is something everyone can do
all you need is an envelope there are
lots of envelope systems out there
and I tried them and it was a lot for my head
to manage. All you need is one,
one envelope and what I recommend doing
is taking, I am going to pretend that this here
is my envelope for sake of visual.
So what you do is you take that envelope
just split it in half and from now on
instead of having ten envelopes
with ten budgets, two, that's all I want
you to focus on is two budgets.
One of them is grocery because aside from our
mortgage that's usually what we spend
the most money on and then other,
everything else, miscellaneous.
The big trick is don't budget per month
that's a lot to track just divide it up
per week instead. So I am going to divide
this by four pretending that there are
lets say there are four weeks in this month.
And what I recommend, you have a family
of four right, you've got two kids.
I do.
So for groceries a good starting budget
obviously do what works for you and what you can
afford a good starting budget is 100 dollars
per person in your family per month starting
at 300 dollars so for you guys
that would be 400 dollars a month but remember
we are breaking it up so that is 100 per week.
It may not sound like a lot but really it is
only six or seven days, you can buy what you need
use what you have, make things from scratch
this will cut your bill down so much
and then give yourself a budget each week
to cover everything else, lunch with the kids
new soccer chin guards whatever it is.
Lets say for math sake it's 100 dollars
and that's it on this little envelope
keep it in your wallet when you go to the
store lets say you spend 70 dollars
and lets say you go buy something else
whatever else just keep track like an
old school check register keep your receipts
in the envelope and at the end of the year
you have twelve beautiful little envelopes
with all the receipts you need with everything
you have spent it's all right here
you can do it with cash and card
Very cool.
The one tip I will say is if you run out of
money don't borrow from the next week or
you are going to do that to yourself for the rest
of your life but you can borrow side to side all
you need if you have a big heavy grocery week.
If you have excess here you can
put it over here.
Totally.
[Audience Applause]