- Well, if you've not done your Christmas budget,
it is not too late.
You might be thinking, "Okay, that's awesome, Rachel,
but where do I start?"
Well, you're in luck.
Thanks to my friends at SimpliSafe,
I was able to bring on a couple
onto the show and show them how to do
their very first Christmas budget.
Now, they're in week seven of Financial Peace University,
and they have vowed to stay out of debt this Christmas.
Now if you've not taken Financial Peace University,
you need to.
You guys, this is the best thing you can do
to get in control of your money,
so make sure to click the link below.
And I want you to take it because I want you
to see progress when it comes to your money.
Now they have never done Christmas
without going into debt,
so I am so pumped to show them how it's done.
Alright, so take a look at their story.
(gentle music)
- We were just swiping four grand in a month,
and we didn't even realize that.
We didn't budget ever,
and we didn't plan,
we just spent what we needed to,
when we needed to.
You just swipe it, and you don't realize.
And I wasn't looking at numbers.
He was seeing them. - Yeah, I was seeing them.
I was just feeling the stress of the debt.
- We realized that we had to do something,
and so I thought, you know, we need to get a plan,
and he was always like, kind of push back,
you know, like, "I don't want someone
or something telling me how to spend my money."
- I was more worried about
what I would be restricted in doing
'cause I was the spender.
She's the saver.
- When we sat down together and listed everything,
I thought it was gonna be here,
and it was here.
And it took probably a couple years, maybe more,
for him to finally hit that wall this summer
and go, "We need help."
- I didn't want it to go out of control
'cause I wanted to do something
before something really bad happened.
- So we challenged ourselves for that month
to cut our spending down,
and in that month, we cut it in half.
In about six weeks, seven weeks,
we had paid just over $8,000.
It was exciting.
We never thought that would be possible.
So this will be our first year
- Doing the Christmas budget. - Doing the Christmas budget,
yeah, so Christmas won't follow us anymore.
When we swipe our debit card,
it's gonna be done.
- Well, thank you guys so much for coming
and chatting with me about the Christmas budget.
- Yes. - You're welcome.
- Okay, so I want to know first and foremost,
what made you guys want to say,
"Okay, this Christmas we're actually gonna
do a budget and not go into debt for Christmas"?
- That's one of the things that we needed to do.
We wanted to be gazelle-focused on this kind of stuff.
- Yeah, 'cause y'all are paying off debt currently.
- Exactly. - Yeah.
- And it's perfect timing, too,
because we just started to learn to budget
and we're still in those ironing out stages.
- Yes, okay, so I love that this is a part of your journey
'cause as you guys are working to pay off debt,
you just did your first budget,
your first household budget,
about two months ago, right?
- Yes. - So how's that going?
- It's going good. (laughing)
- It takes about three months
to kind of really get it going,
so you're two months in.
- We keep telling ourselves that.
- Yeah, so I always tell people when you do a budget
for the first time, you feel like you got a raise.
What would you say?
True or false?
- Yeah - No, absolutely.
- Yeah, it was definitely, you know,
to see where we're telling it to go
versus it's just flying out the window
faster than you can keep track of it, really.
- Absolutely, okay, I love it.
You guys are, like, doing so well.
The fact that you're even budgeting
and even getting out of debt
is remarkable 'cause most people aren't.
So this Christmas is gonna be a little different,
'cause you guys are like, okay,
we're not going into debt for this Christmas
because in past, you have, right?
In the past, you've gone into debt,
so tell me about past Christmases.
What did that look like?
- I stopped working a couple years ago.
So before that, we had double income.
And so we just spent and we never thought twice.
- Credit cards spent? - Yes.
- Or you had the cash to do it?
- No, this was all credit cards.
- Just swipe the credit card.
And so you guys would swipe everything with credit cards
and then, when would you pay it off?
- I'd strive to pay it off in January,
but it ended up trickling down to February sometimes.
- So a few months after, yeah. - Yes, a few months.
- And I feel like maybe that's what made us feel
like we were doing okay,
because it wasn't following us all year.
When, in fact, it shouldn't follow us at all.
Like we're learning new habits.
- Okay, so Barry, you were the one in charge
of paying off the bills and all of that after Christmas.
So what was that like?
When January came and you knew, okay,
this probably is a year
that we won't be able to make the bill.
What did that feel like?
- Well, when I'd seen the balance,
I'm like, oof, that's a lot.
And it's a lot more than I was expecting,
so I would just kind of finagle my way through it,
and if it didn't make it in January,
I said, "Okay, fine.
We'll just push it to February
and hope it doesn't go into March."
- So did you feel like you were in control?
Or did you, was it a little isolating
knowing that she wasn't a second brain helping?
Do you know what I mean?
- Yeah, it was very, no.
I felt like I was more reactive to things.
It was definitely not something that was like,
I had a plan and the plan failed.
It wasn't like that at all.
It was more like, okay, I'm just gonna take whatever comes
and just, I didn't really talk about it with her
all that much.
I would just try to make it work within myself
so that way, she didn't have to worry about it so much.
- I didn't know.
Like I literally, we did the numbers,
and I was blown away.
It was double what I thought it was.
- The debt or the expenses? - The debt.
And so now that we've sat down,
we know what it is, we've got a plan,
we've got a budget, and it will only get better.
We got this.
- And I do want to point out that it wasn't
like you were intentionally hiding the debt.
It was just completely not communicated about.
- Correct. - It was not talked about.
- So you've kind of got budgeting a little bit under your belt.
I was looking at last month's budget
'cause you guys sent it to me,
and as I was looking over it,
I thought, really, you guys for the most part
are very responsible with your spending.
I looked at most of your categories
and I was like, okay, there's not a ton that you have to cut
'cause a lot of it is needs.
- Right. - It's your insurance,
it's your food, it's cars, it's all that kind of thing.
And so, I did see debts in there,
and you guys are talking about working your way out of that,
which is huge - Starting our snowball.
- Yes, and so, because it's about 25% of your income
is going to debt.
So you're feeling those payments for sure.
And so Christmas this year may look a little different
because you're not going into debt for it
and you're being intentional.
So as I was looking through,
really, the biggest things I saw
was that you still had about $250 left to budget
in your EveryDollar account,
which was awesome.
So again, giving every dollar a name
and being purposeful, is huge.
So I'm like, hey, that's a great place.
You could literally add Christmas line item
and just drop that money right in, $250.
Now on average, the average American,
how much do you think
the average American spends on Christmas?
I'm putting you on the spot.
I'm gonna be judging some of you watching this, too.
- I would imagine it would be like a thousand or more,
because you feel like you need to buy for everybody.
- Yes, so it's on average $700 to $1000.
Different studies show different amounts.
But I read that, I was like, God, that's a lot of money.
I mean that's a lot going out,
and so, for you guys, my goal would be
that you're not average, right?
That you're not normal.
So I would even go below that,
so the $250 that you have extra can totally go to Christmas.
And then there were two areas in your lifestyle
that I think were October-specific.
So a $20 one, a $40 one, and another $40.
So then that sum you can throw at there.
So, really, on average, you're about $350
that you could budget for Christmas.
And you guys, I think that that's great
because when you do it, you're gonna name out,
okay, here are all the people. You list them out,
of who you're gonna buy for,
and the dollar amounts next to each of those names.
So who, just off the cuff, who are people
you would buy Christmas gifts for normally?
The two kids, obviously.
- Yeah, the kids. - Yeah.
- We gift for my sister and his brother.
My mom has requested a gift.
Sorry, Mom.
And then my dad is usually, it's never anything crazy.
- So that's encouraging for me to hear
because I'm like, you can do that for 350 bucks.
Like, you really could,
'cause I would say the spender,
because I'm a spender like you,
you said that earlier, I am too,
so part of me was like, oh, you could still
probably keep that 350 number into December as well,
and that's $700 total, but I'm like, no.
You don't need to, you really don't.
And so, I would so encourage you guys,
if you can, challenge yourselves and say, okay,
"We're gonna just take this $350
that we're gonna get in November,
and that's gonna be it."
And it's kind of a hard pill to swallow,
but where you guys are with the debt,
I would say, I would do that.
That's exactly the goal I would make.
And you just write it down.
It's so easy, and it's not a lot of people,
which is awesome. Six people. - No, not at all.
- And so, okay, this Christmas, it's gonna look
a little different, and even prep the kids
'cause you guys have two kids
and their ages are . . . - Nine and five.
- So sweet, they're adorable.
I met them earlier.
Your daughter, I was like, give me a hug.
- She ran right into your arms.
- She's so sweet, so sweet.
And so, kids, that's still a great age.
They're not like teenagers that their expectations
are off the roof - They're not.
- And even when I was home with the kids,
we decided to do instead,
because they get so many gifts,
and we had mentioned this earlier,
is breaking it down into the four.
The need, want, read and wear.
So even though that wasn't budgeting,
to me, it felt kind of budgeting.
- Like there was a boundary.
There was kind of this limit.
- Yeah, there was a limit, yeah.
- It's just a great season of life for you guys
to kind of edge this new habit in,
and I think you can do it.
Most family members are pretty encouraging with that.
- We've been pretty vocal with everything,
and open with our story on Facebook,
so I think at this point, everyone is pretty aware.
- They know your journey.
Well, thank you guys so much, again,
for coming in and sharing your story, so huge.
You guys, if you're motivated to budget now,
especially for Christmas,
make sure you download EveryDollar.
It's a great budgeting app.
But if you want a Christmas-specific budget,
click the link below.
(upbeat music)