The Best Budgeting Advice! YNAB #EEP Entrepreneurship Elevated Podcast with Phylecia Jones

In today's episode, we're going to talk about personal finances.

Yes.

An entrepreneur's business life and personal life, especially when it comes to profitability, are tied in together. And you're going to discover how to address that with Felicia Jones in today's episode. You're about to hear all of it on the Profit First Podcast. Oh, there you go, Amy.

I did the Elvis lip and everything. You did.

You like the lip?

I did the curled lip and everything.

I can't tell you how many people, Amy, I meet that love the grunting.

Yeah?

The grunting started like with our first or second episode. We started doing it, and some people will come up to me after speech and just go, "Ugh!" So thank you for that.

So you get booms and "ugh!" Exactly.

Boom, ugh! All right, what are we talking about? We're talking about the grunting, and we're talking about the Profit First podcast, and I am your host. My name is Mike Michalowicz. I am the author of Profit First and Clockwork and The Pumpkin Plan and other books. And you, my friends, you're listening to the Profit First Podcast. This is the only show in the entire world that we believe is dedicated to focusing on the bottom line, not the top, but the bottom line, and making the bottom line your top focus. I'm joined in studio by my good dear friend Amy Cartelli. Hi.

Uh, you can find us on iTunes, Stitcher, TuneIn Radio, Google Play, Spotify, profitfirstpodcast.com, any podcatcher, anywhere you hear a podcast.

—And you can call her Gumperson.

—And you can call me Gumperson. Screenshot your review and we'll mail you a Profit First for free.

Yeah, so now here's how you do it. Mail kelsey@mikemichalowicz.com. This is a total bribe, right, Amy? We're bribing people. Totally a bribe. But it works. Yeah, so send us a screenshot of your finished review on iTunes. That's where we prefer to have it. But if you're using Stitcher or something else, Google Play, whatever, Grab it, send it to Kelsey, Mike Michalowicz, and say, send me the free book, bribe Matt, and then, oh, give us your address where to mail it to. Okay, uh, by the way, this is only for US listeners. I forgot to mention that. It's only for US-based listeners, um, and your Canucks, and, and anyone in Mexico. So anyone like in the North America area, we can mail to. Outside of here, it's pain in the butt. Actually, even Mexico is difficult, right? Didn't we get—

we're getting returned books from Mexico.

Yeah, we gotta return candy.

We got return candy and games. Who doesn't want games?

Who doesn't want games? And candy. So, my dear listeners, we sent a gift down to a good friend, Rodrigo Ladaga. Rodrigo Ladaga. Rodrigo Ladaga. His son Eugenio was hurt in a bicycle accident. He was riding his bike and it flipped and he hurt himself. He actually had to go to the hospital. He's okay. He broke his nose. And so we wanted to send a little— Care package. Care package, yeah. And there's no better medicine than candy, in my opinion. Candy and toys. So Skittles. Twizzlers, Swedish Fish, the very best, best stuff. And we sent to Mexico, and it took a month, I would say. I'm like, hasn't gotten there, hasn't gotten there. It bounced back, it was rejected, package was torn apart, candy was taken, except for the Twizzlers.

And who ate it? Me and you.

Me and you. Me and Amy. It could be poison. They could have replaced it with rat poison. They could be like, oh, those gringos, we're gonna get them. You know, you and I scarfed it down.

Oh, we had no shame.

And neither of us, like, shame. And we didn't even, like, honor Eugenio. We didn't, like, bite down and say, "Oh, I knew this is for you." You would've said, "This is for us!" I love Twizzlers. I do too. Is that what your favorite candy?

I don't know. I think it's Swedish Fish, I think. Then a good Snickers bar.

Oh, good Snickers bar.

Does it every single time. Yeah.

How about you? I think it's Twizzlers. I think it really is. I have, this is embarrassing, receding gum lines. Aww. And so I'm very sensitive to sweets, so Snickers bar, I would normally be a high-ranked thing for me. So does it hurt? Oh yeah, if I bite into it. Oh, it's like exposed nerve type? Yeah. Oh my God, the sugar gets up there, this stinging pain is— oh, I don't like this so hard. Yeah, yeah, yeah. But Twizzlers don't do it, so I'm firing down Twizzlers.

Yeah, Twizzlers are good because that's all just molar action.

It's all molar. That's all molar action. That's what it's all about.

And you know what, it's a stress release when you're— when it totally is. Unless somebody gives you one of those big buckets of the individually wrapped Twizzlers. That's a stress cause. Sort of mean. That's Torturous.

Yeah, it's the reverse of stress relief. It actually gets you more anxiety, which then is balanced out when you have one, and therefore becomes relentless. You open one, you're so angry, you chew on one, you feel relief, then you open one, and you start cycling. You can't stop eating it.

It's a whole thing. Terrible cycle.

All right, well, that's an interesting, that was a very non-interesting fact. A couple last things before we get started. If you want Surge, another book I wrote, you can get it for free at mikemichalowicz.com Or you can go to MikeMotorbike.com. That's the little shortcut, because McCallowit's so hard to spell. But now while you wait for your free Profit First book, because you did the review, you can get another book totally for free just by going to the website and giving me your email address.

Um, do we have any listener mail? Uh, we have a— yes, we do have listener mail. Uh, from Twinkle Martellano. Uh, I'm having a bit of trouble. I live in Canada and the banks here suck. "How do I find a good bank?" Twinkle, I am—

first of all, awesome name. Secondly, I am with you. What you do is find local banks. Now, in the US you can find a credit union or a local small bank. Typically they're the most flexible. Just go to websites where it says find credit unions or local banks. There's usually a small business equivalent. Anywhere I've traveled internationally. So in, in Canada land, I expect it's there too. And just do a search for local small banks, regional banks, or credit unions or federal credit unions. Inevitably, they're the most flexible. Here's the final thing. If your big corporate bank is not willing to give you what you want, realize they are a vendor for you. You're, you know, you're selling them, they're selling you services. If you're not willing to negotiate, that shows how interested they are in your business. Cool. All right. So we kind of swapped around. I just noticed. So we'll do the shout out. That was our listener mail that we do at the end. So we're gonna do the shout out at the end. So make a mental note of that. You got it. I messed that up there. I do want to thank our corporate partners who make this show a reality. Both Receipt Bank and Nextiva. We love you. Yes, we do. If you've been listening to the last couple of weeks, you know what Receipt Bank fix is. What does Receipt Bank fix?

Do I have to say?

You don't have to, but you want to.

You have to say it. No, you say it.

No, you say it.

No, you say it. Jeremy, you want to say it? What, what does Receipt Bank fix?

Ass welts. Ass welts.

We'll explain how in just a little bit. Okay. Uh, with that, let's get to the business at hand here. Why? Okay. I'm looking at the wrong notes. We are going to talk about, uh, managing your personal finances and there's no one better I could have thought of than Felicia Jones. Now Felicia and I met at Podcast Movement. I was down there. They had a breakout that I did not want to go to. It was a bowling thing. I stink at bowling. And I had to get home. But I'm like, I'm gonna meet so many cool people here. I just got to get my ass in gear and get down there. And I did. Thank God I did. I met Felicia Jones and some other amazing people. But let's talk about Felicia right now. As the creator of Keep Up with Mrs. Jones, get it, LLC, host of the daily morning show called Ask the Budgetologist, Felicia Jones is the savvy go-to budgeting nerd, international speaker and trainer. After serving as a civilian scientist and engineer for the US Navy, thank you for your service, Felicia launched her skills into changing the world one budget at a time. Felicia, it's our honor to have you on the show.

Welcome. Welcome. Hey, I am so here for the candy and the grunting. Wait, let's get back to that.

I love it. What's your favorite candy?

You know what, I actually like, I like Twix. I like the little Twix things.

Oh yeah, chocolate. No, there's no nougat.

No, it's just like caramel with the crunch.

Yeah, I like the left side better.

She's a left side girl. Yeah, don't confuse her with one of those right side girls. She's a left side Twix girl.

So, uh, so many business owners struggle with their personal finances, yet they lean more on their business to fix it. Business is struggling, they get in deeper financial personal trouble. You know, do they need to bifurcate, Felicia, their business and their personal finances? Are these two separate things going on, or should they be mixing them together like, like so many do?

You know what, I honestly believe that business owners should separate their business and personal finances because one, I mean, and you know this, how do you know if your business has a leg to stand on if you're always pulling money from your personal side? And, and looking at the personal side, you know what, you know, we have spouses and partners and cats and dogs that get really upset when you spend all the money from the house. That is not cool.

Okay, so we gotta separate out— separate it out. You are a specialist in the personal finances. Entrepreneurs, I think, typically neglect that the most. What— how do we get started in getting a good budget in place for our personal finances?

You know what, what I do with a lot of, um, solo business owners and entrepreneurs is I actually have them start with the business. And it's not much different than if people were to read Profit First, but it is kind of starting at that point of how much money does your house need to survive while you're running a business? And so I force everybody to go back into the personal side and answer that question because, you know, that is so important for us to get— give ourselves a salary, but most of us don't even know what that is. So I always ask the first question, how much does it cost for you to run, to keep your house alive? While you're running this business. And that's where I get started with figuring out what's going on at home. And we break it down from all the basic things. I call them the commitments. That's the rent, the mortgage, all of the bills that we must pay. And then we start looking into the debt and then also into the savings, because what happens with a lot of us business owners, especially when we have families, we forget that they still want to operate as normal and take vacations and go do fun things, you know? So we have to remember that.

Yeah, so actually that speaks to a really interesting challenge. When I started my first business, um, you know, we had a certain expectation for our lifestyle and the business couldn't support it, yet to compromise our lifestyle seems very hard. How do you prepare your family for potentially a financial dip, or can you even do that as a business owner?

I, I actually think you can. It just takes a lot of communication, and you have to— it's a lot of communication, and I And I tell my friends that are going through this, I was like, you know what, you're going to have to sit your spouse or partner down and the family and tell them exactly what you're trying to do. They may not understand everything in the business, but you gotta have to reassure them every time what you're doing, what's going on and what we do in our house when we're doing big, big decisions. I have to actually create a PowerPoint presentation. Really? Yeah. Yes, for the whole— well, my family includes my husband, a cat, and a dog, so yes, but everybody gets a vote.

That is awesome. Everybody. That is great. I'm a visual person, so that would totally work for me if my husband did that for me to explain how things were going to go, how things needed to go in order for the business to be successful.

How do you— so your husband's had a long-time job with one company, right? I know he travels a little bit.

Yes, he makes Sandy Waggett.

Oh, I'm talking to Amy. I'm sorry, first. Please, I'm sorry. I was actually asking Amy first. I want to ask you. Sorry. So your husband— So Amy, I'm sorry, I didn't say that, but from your, um, your perspective, are you involved in the financial decisions or do you, how do you work on the budget at your house?

I am, but I have to say, I think Christopher takes on, you know, 80% of it at least. I mean, I pay bills. I, I know where the accounts are. I know where the money is and everything, but, um, I do tend to leave it to him when it comes to deciding where the money's going to go and what has to happen. Um, just because he is a more business-minded person than I am.

Yeah. So Felicia, my question— I was curious about that because I think that may be kind of standard. You have the entrepreneur man or woman making the, the primary breadwinner, and then the other spouse maybe is a little bit in the dark. And it sounds like Amy, you're actually more into it than most. Felicia, what's the norm for that spousal relationship when it comes to a primary breadwinner and the budget?

You know, it's so interesting that I see it goes both ways. I've seen it where sometimes the entrepreneur is the one who manages the business and personal finances and they get a little stressed out, but it seems the majority, the majority is that the spouse or the partner takes care of the money so that the business owner can go do what they need to do. But I'm definitely one of those, you need to be a part of all of it. And, and I sometimes I call this, uh, the married person disease where somebody else takes care of the money, but single folks, they don't have that issue. They have to take care of everything.

What if your spouse is resistant? You're a business owner. And your spouse is like, I just don't want to deal with the money. Um, is that— that means it's not fair to you, but they got to know about the budget because they're still possibly spending. How do you address that?

You know, I, I'm just one of those— I, I tell my business owner friends and everyone I work with that you're gonna have to force the conversation. And I know a lot of people don't want to do that, so you're gonna have to force the conversation. And, and what I have started doing for people in that situation I typically just recommend doing a monthly rundown, no matter what. Like, my husband— I kind of— I actually manage both sides of the money for the business and the personal, and he knows what's going on. But at the end of the month, I literally do like, hey, here's 1 hour. I'm going to tell you everything that's happened in our personal finances. I give him the rundown of how much money in all the bank accounts, where the money went, so that he at least knows what's going on and he's just not completely clueless. And then we kind of go back and forth and making some decisions of what to cut, what we can keep and, you know, things like that.

So when you said starting with the, the realistic budget, you know, how much do you need to run your house? That all— that sounds like it can immediately become very nebulous. I can make numbers up and I can justify and play games in my own head. Do you have any tricks or strategies for people being realistic about their numbers?

You know, of course I do. I actually, I actually, um, I recommend going and looking back at the last 3 to 6 months of everything that you've been doing with your finances. Pull every financial record, every credit card. And I know it's not the sexiest thing to do in the world, but you're going to have to do it. And you know, if you owe Grandma or your Aunt Kate some money, pull that out and put it on the list as well, because we got to look at how much money we are spending monthly and, and start to really get control of that because that is kind of the basis for us business owners to know, like, based minimum, what, what kind of salary we need to bring in, and how much money we need to be making in the business to keep it going. And, and I do it this way, because there are some people who absolutely refuse to change their personal lifestyle. So that puts more pressure, unfortunately, on the business owner to go out and do that other side of the budget, and that is make more money. But definitely start with the last 3 to 6 months of every bank account, every credit card statement, everything that's going out. And I actually like to use Post-its. I like to take those little Post-its and put those different expenses on a Post-it and stick it on a wall so everybody in the house can see how much money is going out. Oh, wow.

That's a great visual. That's Sandy for me, the person who likes the visuals. I love the idea of being able to like see it out there against the wall like that.

I love that.

It really brings it home. I love that too. I almost suspect that I think that would be terrifying.

That's what I'm saying, it'd be terrifying. I think it would be terrifying. A lot of people cry, unfortunately.

Do some people start adjusting their behavior just by having sticky notes up and saying, oh my gosh, I'm not, I'm not going to spend that?

They do. And, and it's, um, so I make people do the sticky notes of how much is going out, how much is coming in, and then of course I do one complete section for how much debt is in the, in inside of the house. But And I usually tell people, don't make any changes right now, because what a lot of us try to do is go try to solve all the world's problems right then and there. It's like, nope, I actually just want you to let this sit up on the wall for one week. And I want everybody to look at it, just pass by it and stare at it. And then you start to get into your head that, you know what, what was going out is a lot more than what's coming in. So we got to figure out what do we want to do? And at that point, that's where we have the conversation of what's our priority. And when you do the sticky notes, it's so interesting. I usually, I tell people, I can usually tell your priorities even though you say something different. But if you're spending $800 a month on shoes, you know, I mean, you know, I don't tell you what not to spend it on. Just, just be a little bit more aware, you know, aware.

Back to self-awareness again.

Yeah. You know, you don't have to eat. I mean, you can get rid of the food sticky note and buy your shoes. I don't care. We're all adults here.

But I guess that's the reality. Is we are picking shoes over food. Um, but that being said, we don't feel the pain because so many people are bridging it with credit cards, right?

Oh yeah. And that's why we have that column with the debt, like, because I actually separate that out with how much debt total that you owe and how much you're putting toward it each month on a sticky note as well.

So why not try to fix everything right away? That's what entrepreneurs do. We, we fix problems. You're saying actually leave things status quo for a week.

Yeah. Leave things status quo because it's a behavioral issue. Sometimes we can go and fix a lot of things. You know, when I was getting out of debt, it's easy for me. You know, I can go— which you shouldn't do— cash out a 401(k). I can cash out investments and pay off the debt. But technically, I didn't really learn anything, you know, and you find yourself back in that situation again. So that's why I say just look at it and and see what's going on and start having some conversations about priorities and, and be realistic. That's what my husband and I did. Like, what is it that we want, you know, with our finances, and where is it that we're trying to go? And that's where you really start to clean up everything and get rid of expenses that you just don't need anymore.

You mentioned, uh, in your strategy that you suggest setting up multiple bank accounts. That's something we do with Profit First. How do you do this with personal finances?

You know what, with personal finances, once you go through this little exercise of trying to see where everything is going, what my husband and I did, or actually I did this when I was single, and I just couldn't figure out how to do, I call it the old school budget, like a line item budget. I kind of failed at it because I would actually write things down and then go spend more money. But like, okay, there you go. There's the budget. But I actually love allocation budgeting for my personal life. And so I created these 4 bank accounts and one was for commitments, one was for long-term savings, one was for fun. And I actually had one for short-term savings. And I would put 25% of everything I make between— distributed between those 4 different accounts so that, you know, and I move some things up if I needed to have more savings and things going on. But I wanted to make sure my life was broken down into things I must pay, I have long-term savings, I have short-term savings, and of course I like to have fun. And that's how I did it.

Okay, so I like these accounts, but let's go through each one. So let's start with commitments. Commitments is— that's the rent or the mortgage. What's in commitments?

Commitments are all those things you have committed to giving to someone else. That's how I say it. You know, when you got that credit card, you've committed to paying those people back. You pay your mortgage, you pay your rent. These are kind of the things that we really can't get rid of, but also some things that we just like. You know, if If you like listening to your music and you pay for a service, you've committed to paying for that. So I call that the commitment bucket. And when it comes to short-term savings, I call it the— this is the oops, I forgot that I have to pay the DMV this year. That's what I call the short-term savings so that, you know, when the car needs fixing or when we have to, you know, there's a pipe that busts and it's not an extreme emergency, we can pull it from the short-term account. The long-term is where I actually have the emergency fund. And in our house, in order to tap the emergency fund, again, another PowerPoint presentation, and the earth needs to be burning before anybody touch the emergency fund.

Okay, so this is, uh, someone got very ill maybe, and, and you may need to use money to bridge that health concern.

Oh yeah, that's like extreme emergencies, not the, okay, we forgot to pay the deal, you know, we've got a pair of shoes. Yeah. Okay. We don't need a car this year.

Right, right, right, right. I got you. Okay. Now you also said the fun account. What's the fun account?

The fun account is for all those things that I always went over budget for, getting my nails done, getting my hair done, you know, traveling and going out to eat with friends and stuff. So that was the fun account. And that actually evolved once I got married into, I call it the adult allowance. So we do things a little bit different now that I'm married, but no, the fun account was, you know, all that other stuff that I like to do and blow money on. And do it without feeling bad. What about— I love it.

What about, um, because you— I presume you and your husband both share in these accounts, right? You both have equal access to it?

Yes, we have. Um, we combine all money, and the only money that we don't combine is the adult allowance. And every month everyone gets the same amount of allowance unless somebody does a really good PowerPoint presentation. I love it. I love it. You know why they need to go buy shoes like I did yesterday. But you know, okay, but yeah, Everybody gets the same amount of money for an allowance, so you can go spend whatever you want, no questions asked. My husband is a gamer, so he likes to buy video games, and I like purses.

So his interest is video games. So if he wants to get them, he uses his allowance. He has a debit card connected to that?

I was going to ask, how do you pull the money for these things?

So we have one main bank account. So we have the main savings. And the main, um, the main checking account. The emergency— the emergency fund is in a different bank somewhere else, but everything else we both have access to it. But for the adult allowance accounts, we each have our own checking account, and every month the money is auto-withdrawn from the main— we call it the house. The house pays each person their allowance, and it goes into their own account, their own debit card, and Um, we actually share credit cards, so that's at the end of the month when we go through the numbers, it's like, hey, somebody needs to pay the house back. So that's when the house comes calling for his money back, um, if you're using the credit cards and things like that. So that's how we do it. Gotcha.

And when it comes to that personal money that you spend and your husband spends, does that— is it questions like, do you ask, hey, what did you spend your money on? Or is it just whatever you want, it's your money?

Is your money, no questions asked. Um, yeah, it really is, is no questions asked. You do whatever you want with your own money.

Okay, cool. So that's, that's super cool. What about the contribution? I presume you make more money than your husband, or your husband makes more money than you. I presume it's not 50/50 split in income. I, I've yet to meet a couple that's that way. So my question is, if you don't contribute equally Uh, do you distribute equally? Is that even relevant? Does that even come into play?

You know what, we made the decision, um, I think like right when we were dating, I was actually making more money than him. Funny how that works. But, uh, he now— he, he started making more money than me when we moved from California to Colorado. But we just decided that we were going to be in this all together, so it didn't really matter. And that was just one of the decisions we made, because I know you can— there's different ways, you know, you put in what you make and percentage manages, but we just decided we're all one family, we're all going to do it together. So all money goes into the pot. The house is the most important priority. Everybody else gets, um, gets whatever after that in the allowance. Got it. Okay.

Um, what about, um, future goals? So say an entrepreneur is looking to, I don't know, buy a new home one day, or buy— maybe buy that vehicle, or what you mentioned earlier, How do I start allocating for that?

So what we do in— and I'm just going to work off of the idea that a business owner might already be making some money and they're already meeting their salary needs inside of their business. So I will just pretend that that is happening because we know sometimes it can be a little crazy. But if you are able to give yourself a salary from your business, then everything should operate as quote unquote as normal. But when you— when we want to make big purchases, like for right now, my husband wants a boat, and I literally went and created another savings account, and I call it the boat. And, and it depends on how serious we are. We'll probably do like minimum of putting $25, $100 until we decide that, hey, this is like actually a big decision and something we really want to do. Then we go back and look at all of the commitments, we pull out the Post-its, readjust all the numbers and decide what we can get rid of so that we can start putting more money into this account. And then that's when we get into the percentages again. So it's kind of a— I call it a disruption, but it requires a lot of communication on what are the priorities are for the, for the family all of a sudden. And that's where I really want to get across that all of this requires you talking to someone and having a really good communication structure to understand, like, if this is really important or if it's just, this is a cute idea, so we'll just put $25 over into it until we, until we figure it out later.

You know what I love about your system, Felicia, is, is it's forced thought. So what I just heard is your husband says, I want to buy a boat, and maybe a flippant thing, he sees an ad, it's like, oh, I gotta have a boat. But now you're allocating $25 a week or a month, whatever. It's such a small portion, you can't buy a boat for, you know, that much money. No, you can't. So now it forces time, but at the same— forces time to be consumed, meaning it's going to take time before you can buy that boat. Money's being saved toward it. His thinking may change. He may say in 6 months or a year, you know, I know we're saving toward this, but I don't want a boat anymore, I want an ATV or something, or I don't want anything. Do you see that people's thoughts change, uh, when they actually have to have a disciplined savings mechanism?

It, it does change because, um, I, I like to say because our lives change because we You get different interests over time. And, and it's so funny that you brought this up because my husband's been talking about this boat for years and we created this account. And, and sometimes he was like, it's serious, sometimes it's not serious. And I, I've, I've learned to adjust to my husband because literally in 6 months he's Mr. GQ and the next thing you know, he wants to be a mountain man. So it's like, you know, just let me know when you are serious and then we can have a better conversation about the money. But until then, I would put like $25 over into that account. And actually this year, It all flipped over because he wanted to get an RV to pull his boat. There you go. Yeah. But, you know, we're saying that the boat will be a dream in the next 10 years. But yeah, it all changed and we got an RV. So it's almost like you do have to be very intentional and have conversations about it because, yeah, people, people change over time, ideas change over time. But the one thing that doesn't change is that, all right, we can start putting some money toward it right now just in case. Just in case, you know, we actually want to do it for real.

And it sounds like also it eliminates guilt, meaning if I buy something, whatever it is, and I use a credit card, there's this, oh cool, I'm getting it, and then there's this guilt, like, what'd I do? I really shouldn't.

I put us in debt. I put us in debt, at least temporary debt.

Yeah, yeah, yeah. And you feel that weight. Now, feeling Felicia, following your system, is, uh, the guilt starts to go away. I— you, you buy those shoes, you're effectively paying cash for it, right?

Yeah, you're paying your own money and there's, and there's no guilt around it. And that was one of the things, because, you know, I came into our marriage, we got married a lot later. I got married in my mid-30s and I was making a lot of money. He was making a lot of money. And it's kind of hard to go from like the traditional of like, we, you know, I have to get permission to buy things. I was like, yeah, I like shoes too much to keep asking all of a sudden. That's not gonna happen. Yeah, I know. So we made up this system to like, all right, you can do what you want to do. If it's a huge purchase, like if it's a huge purchase, then yeah, the house has to be involved. And the house means the cat and the dog have to get a vote as well. And, and then we'll sit and decide, you know, if it's worth it or if we can handle it. But other than that, you know, we both feel like we work very hard for the money that we earn. So you know what, go use your money, go have fun. And, you know, go do things. Now I will say we don't have kids, so that makes things a little different for us, uh, because we don't have kids. But I don't know. And, you know, and plus we decided— we had a week-long conversation about priorities and we decided like travel was our biggest priority. So that's where we had to clean up all of our act, you know, paid off all the debt some years ago so that all the majority of our money actually goes to travel. Oh, that's nice.

Wonderful. One little tidbit about Amy. She is a frequent traveler. You carry United Platinum status, I dare say. I do. Yeah, she's terrified of flying.

I'm terrified of flying. That's so funny.

When they reward you with the million-mile traveler award, you'll be shaking.

I hate planes. Exactly.

Felicia, what about, um, what about addressing debt? I mean, how do we use your system to once and for all permanently eradicate our personal debt?

You know, I, I love this because I actually do it with my business owners as well. So we have all the different accounts. So we have a commitment, we have a short-term, we have a long-term, we have fun, and depending on the other accounts you want to add in. But I say treat debt— when I tell my business owners, you have to treat debt like an employee that, that you can't really fire because they just don't go anywhere. And it's the same way. It's like me, right? Right. Like, I can't fire you. But I also say the same thing with debt. It is, it's like having a third person in your bed that you don't want to be there. So it's in your best, best interest to get rid of them really fast. And I actually created another bank account just for debt, where I would stash enough money over there so that when you know it's time to pay off things, like, we can just get rid of That's great.

Yeah, I like that strategy. And it sounds like debt is a, uh, it's a process. It's not a moment. I think some people I've seen Felicia say, you know, I need to get out of debt and by the end of this year I'm gonna get out of debt. And then they're really thinking about at the end of the year. But what I'm hearing is this is that chip away process, like $25 a week or whatever. Is that the approach to eradicating debt?

Yes, it can be because not everybody has the finances to just, uh, just take care of it. I, I, the, the approach that I I used to get out of debt many, many years ago. I call it the scorched earth approach. I literally cleared out all of my bank accounts and everything. And I said, I was never going to get into debt again. And it was a very interesting process. I was slightly homeless for about 8 months doing all of that. Slightly homeless. Yeah. I was slightly, meaning I put up a house for short sale. I took on a project in Omaha, Nebraska, and I was going, I put my cat into my husband while we were dating. I put her up and I paid rent for her and I was just back and forth in hotels. Wow. But, you know, but I also know that not everyone has that ability, so you just have to chip away at it. But also that means when debt is part of your life, some of that other stuff, that fun account actually goes away for a short amount of time. The fun account goes away and some of the other things, I just call them temporary sacrifices until, until it's gone. And then and, you know, life is just a whole lot easier. So there's a lot more fun when it's gone.

There's no funding the debt account and the fun account at the same time then?

Basically, you can't have fun when you have debt.

Okay, come here a little bit. I mean, because I, I think the flip side is people can go so focused on debt that they start hating their lives, right? They, they're living off ramen noodles.

Yeah, you don't want to do that because you— there's still things you can do for free. Uh, you know, I— like, we have a vacation account, and when we blow all of the vacation account, we go camping. We already have the gear. So, right, that's when you know, um, when you know the Joneses have no more money is when we're camping. Get creative. We've been— yeah, we've been doing a lot of camping this year. So how does someone get started?

So I, I suspect a lot of our listeners like, you know what, I need to take home profit first. I'm doing my business, I got to do a version at my house. You have the answer. But does someone just go into the entire system from day one, or do you step into get into it? How do you get started?

Actually, you just step into it. The first step is actually looking at what's going on currently with your personal finances. So pull out those records, pull out the bank accounts, and just look at everything. And pull out the sticky notes and just stick it on the wall and just like look at all the expenses and see what's going on. And then start making the priorities. Have that long conversation of what's the priority with all this, you know. Do we want to travel? Do we want to pay off debt? You know, some people may not want to pay off debt. You know, actually just figure out what the priorities are And then it's not much different than what, um, for all of you who are listening, is not much different than Profit First. You start easing into it, easing into it with the percentages and with the bank accounts. But the biggest thing is you got to figure out what's going on before you try to solve the problem. Got it.

Felicia, where can people learn more about you and maybe get their budget started with your help?

Oh cool, uh, you can actually find more about me at keepupwithmrsjones.com. I actually live stream every day at 7:30 in the morning, uh, 7:45 10:00 AM Mountain Time on a show called Ask the Budgetologist. So I answer any questions about business money, and you can watch me lose my lip gloss every morning. But, um, but you can go to keepupwithmrsjones.com.

So we'll have that link in the show notes along with some other links. Uh, you've been live streaming since July of 2017, a year straight, every single day. Does that include holidays too?

Every single day, including the holidays. I will admit I do miss a few days if I'm traveling or if I'm in the woods Okay. But every day. Well, we'll allow that. Yes, every day.

Lisa Jones, thank you so much for joining us today. Thank you.

Thank you so very much for having me.

You're welcome. All right. So in a second, we're going to share what we learned, AIM. We're going to, we got a little listener shout out. But first, whoops, that's the wrong button. But first, that's the wrong button. What's going on here? But first, there we go. But first, I want to thank our corporate partners who make the show a reality.

Nextiva and Receipt Bank. Nextiva and Receipt Bank.

Receipt Bank. You know, what was that? Did you hear that weird noise?

That sounded horrific.

Oh my God, did someone just get killed? Yeah, that was weird. It didn't get picked up on the mic, so people are like, what did they hear? We just heard someone like, it sounded like a dying cat or something. Car screeching and car screeching. Yeah, people screaming. That sounds, um, so that's off the rails. So Receipt Bank, you know, if you have a budget, you gotta track your receipts. Why not use Receipt Receipt Bank. Just scan it in. Now, it's really designed for your business, but all your receipts are tracked. And Jerry, Jerry Lynch was an advocate. You heard him last week. Yeah. He came on the show and said, "I recommend Receipt Bank." Yes, sir. I recommend Receipt Bank. I've been using it now for 4 or 5 years. Ron is a huge advocate for it. Great way to track all your expenses. Uh, the other corporate sponsor is Nextiva. That's our voice over IP phone system. Ever since the inception of the company, company. J-Bone, I don't know if you remember, but ever since we were working together, J-Bone was, was with the company right when we're getting started. I don't know if you ever made any calls out, it was on a Nextiva phone system. Did you know that? Yeah. Can you hear me? Yeah, I can hear you. Yeah, yeah, I remember. Yeah, yeah. Amazing.

How— you've had them for quite a while then.

You've— Nextiva or J-Bone? Both. Both. Yeah. No, Nextiva, uh, 10 years. When, when did you start working for the company? That was like 7 years ago.

2009, 10, 2000. Well, we were doing stuff in '08, '09. Yeah. And then like, yeah, 2010.

So J-Bone started working— we were in Bootin' for a short period. I think you were here. Then we moved up to the Cookie Factory. That's when we worked together the longest. And, uh, that was a grueling time. Eating cookies. Oh, we ate a lot of cookies, right? Yeah. Every so often we'd get get a pallet and bring them up. Nice. But the office was so freaking hot. Oh, hot. We— it was intolerable at times. It must have been 90 degrees in there. Higher, higher.

And you could smell the cookies when you walk in, and it was, it was great. Sounds good. But then after sitting in cookie smell for like 10 hours, right?

Yeah, it's just rotten stuff. Cruel. All right, um, do we have a shout out? Um, Um, we do have a shout out from Yvonne Kroon from the Netherlands.

Yeah. Uh, in July 2017, I bought your book and started with Profit First. Last year I took the biggest step and changed my financial management structure, and I'm in the best way since more than 25 years ago. All right.

That's awesome. Bazinga. I gotta give you a hallelujah. Good job, Yvonne. Very proud of you. Um, you know, I'm also be proud of is, is to share our tips. We've got a little bit of sequence here. What did you learn today, Amy? So what'd you learn? I keep pushing that at the wrong time, I know, I'm sorry.

I absolutely love the reality check that the sticky note process provides.

Yes, I saw you light up over that. Phenomenal. Do you think your husband would go for that? Yes. Your family?

I think my husband would love to do that with our sons present. Yes. Because there is so much money that, I say it, escapes scapes the house. Um, it's like we've got like Xbox and Microsoft subscriptions and nobody's using the stuff that you're paying subscriptions for. Oh my God, subscriptions are a big thing.

Subscriptions are super dangerous.

Yeah, and there's all kinds of little ones. Like I think I— everybody has Spotify, but I think I'm still paying for some other music service and it's just hitting my credit card every month and nobody's really paying attention to it. So that's a fantastic one. And if you could visually see like wall space that's getting consumed by the debt. Yeah. Versus the wall space that gets consumed by the income.

I think that would be phenomenal. I love it. Yeah, we have the same issue at our house. Now, our children all have their own credit cards and debit cards, so they pay for their own subscriptions. Um, but you do have the subscription creep even on their own cards. Like, oh, I don't know what that is. I'm paying $12 a month. It's only $12. Yeah, you're me. That starts adding up. Yeah, I like this visual because then you start seeing in front of you. Yeah, a $12 hit. You were gonna say something?

Can I share a budget tip? Yeah. So for a while, um, when I was working in retail at the grocery store, yeah, I was spending way too much on food. So I would buy myself a gift card for the amount that I was going to use for my budget. That's cool. And then once I spent it, then I didn't spend it.

That's it. Yeah. So Jeremy, Jeremy's a professionally trained chef. You, you were managing a Trader Joe's, I think, right? It's an awesome store. You cannot stop by. Were you buying your food at Trader Joe's? Yeah, yeah, yeah. You could spend a million dollars there in a heartbeat. Their stuff is so good. Yeah, so unique stuff.

I was probably spending like $500 a month on food. Jeez. This is me, just you.

Jeez. But I bet you the food was— but it was phenomenal.

I'd spend $500 if I could cook like—

I know, incredible. That's a good Good tip. All right. Um, here's what I learned. Um, I learned that you should have multiple accounts set up. It's the Profit First method from day one. Uh, you should have that, the long-term savings, short-term savings, and then she started tweaking the, the, the fun account, the commitments account. I loved all that. Um, I really like to look at the last 3 to 6 months of finances to see what you spent to get a very realistic vantage point. Yeah. And, and then the other thing which caught me off guard, but it's right. Don't try to fix it all right away. That— I think that's what we try to do. We dive into it and then it doesn't work, so we get frustrated and say, this will never work for me, and we throw it out. She said, just observe it, sit on it, and then we'll start chipping away. I thought that was huge.

That was smart, because you do usually move too suddenly and maybe not make the right move. So it's best to absorb it and really come up with a good game plan of how to attack it.

Exactly. And we want to know from you too, our dear listener friends, what did you learn today? Maybe you could post that in iTunes and Stitcher. Where else could they post it?

Any podcatcher, really. Exactly. Do take a screenshot of your view and we'll mail you a profit first for free. Yeah.

Now, where do they send that screenshot?

Who's it mailed to? Send that to Kelsey at MikeMikalewicz.com. Kelsey at MikeMikalewicz.com. I will be sure that that book goes out to you.

And Amy will package it up, ship it out to you. Maybe we'll throw in a special treat like a— what do we have here? Here. Maybe one of those Nextiva squishies we have up there, or a receipt bank. Is that a koozie, that orange thing right there? Yeah, it's for luggage. What is— oh, it's a luggage tag. Whoo! One lucky person will get a luggage tag with receipt bank money. All right, my friends, do that right now, uh, and, uh, please do leave the comments and ratings on iTunes, Stitcher, wherever you listen in. And if you want your free copy of Surge, that's my other book, uh, you can get that immediately. So you can get 2 for 1 day by going to mikemotorbike.com. It's always a pleasure talking with you. I'm wishing you tremendous profitability in your business. We'll see y'all later. Bye!

Do it!

You leave me a soundboard, I just keep pushing buttons. Who gave you