Building a Legacy with Sabrina Clark | Importance of Financial Preparedness

Hi, I'm Sabrina Clark. Welcome to Design Your Family's Legacy. I'm doing this summit to help families prepare for their family's future so they will have provision, protection, and peace of mind. And to help you do that, I've asked experts to help you learn more ways to become more self-sufficient. Today we have Penny Kidd from Pennywise Coaching with us, and I asked her to be with us because many people's finances were hit very hard with the shutdown and job losses., and we have more increased expenses with all the family members home when normally they're off at work or school and eating there, and the electricity bills go up, the water bill goes up, and all those things need to be preplanned for. So I've asked her to come and help us figure out how to get our finances in order so these types of things won't be such a burden to us all. Hi, Penny, how are you today?

I'm great. Thank you for having me.

Well, thank you for being here. This is very important subject to our families. Now, can you tell us a little bit about yourself and how you became the budgeting expert?

Yeah.

Yeah.

I'm actually, um, I live in Colorado and I, uh, have been a financial coach about 7 years, but before that I was a social worker. So, I spent almost 30 years in a career as a social worker, mostly in child protection and working with families in all kinds of crisis modes, right? But my own journey got started when one of my caseworker friends came to me and said, "Hey, you seem really good with your money. Will you come help me because we're always living paycheck to paycheck?" And while I didn't think I was necessarily good with my money, I was paying my bills and balancing my checkbook. That was more than she was doing, right? So, um, I sat down with her and started looking at, you know, asking a million questions. Well, what do you owe for this? And how much to give the kids for that? And all the answers were, I don't know, whatever, you know, whatever comes along. And so, uh, we decided to start the journey together to kind of get our finances in order. I realized I wasn't really a whole lot ahead of her. She, when I left that night, realized that she had about $40,000 in debt. Including her mortgage, or plus her mortgage. And I went home and realized I had almost $30,000 and decided, oh, I'm not really any better than she is. So we decided to kind of help each other be accountability buddies and learn a process to start being intentional with our money. And unfortunately, she was hit and killed 2 months later by a drunk driver. So it just rocked my world and made me realize that you don't always have time to kind of get things in order, you need to start doing whatever you're doing today. And so my husband and I decided, um, it took us a while to kind of get on the same page, but eventually paid off all of our consumer debt and then went on to pay off our mortgage and just finished cash flowing two kids through college. So without a whole lot of pre-planning on that, you know, I didn't really even start planning college until my daughter was in 9th grade. So It's possible. And what I've learned is that it's more about behavior than it is about math. And we need to start doing something today. And a lot of it becomes, okay, what am I going to do with my income? Because truly our income is our biggest wealth-building tool. And if we just let it go slipping through our fingers, you know, we don't have much left to make last for the long haul. And so in terms of, you know, my beliefs really changing and realizing between that experience and then also dealing with my mother who came to the end of her life and was running out of money, and the stress as a kid trying to help your parent figure out, you know, how to survive without having to lean on her children. That was kind of an epiphany for me that I didn't want to be that. I didn't want to do that to my kids. I don't think my parents ever intended to do that, but didn't quite have the planning in place, right? So, so after learning how to budget and realizing that, you know, everybody kind of knows we're supposed to budget and we don't like that word because it feels restrictive, like being on a diet or something. And really it's just a spending plan. What are you going to do with your money? And how much and when. And, you know, how do you keep more of it and give less of it to creditors, right? And because you can do better with it than anybody else. So that kind of became our journey in realizing that a budget is a living document. It has to change with your life. It doesn't just— you don't just kind of go to the mountaintop and think you've come down with the budget. And, "Oh, I have the budget and we will be, you know, we will live with this," because then surely the next month something gets thrown and there's a curveball and you break the budget and you don't stick to it. So I work with people now to realize that it's a matter of starting to think ahead and start planning the what-ifs and what's coming. And I think that ties in nicely with what you're seeing as a big issue right now is that a lot of people were caught unaware right now. And obviously, who can plan for a pandemic, right? But we all have our own little pandemics, our own little— I guess they're not pan— whatever, you know, crises in our lives. And whether that's a job loss or an illness or a death or, you know, many things that can cause big stumbling blocks in our finances, we have to start sometime. So, you know, some of your listeners may, may not have been really hit hard by this pandemic. They might have been fine because they didn't lose their job, you know. But the what-if kind of thing should motivate us to be like, ah, that could have been me. And how do I win? Say that again.

And the car breaking down, that happened to me this week, you know.

Exactly.

Also, you got to buy an expensive part and there's a repair bill, right?

And while we always think those are surprises Cars break down, right? It should not be a huge surprise. We need to start planning that cars require some cost other than— most people plan the payment. Oh, I can afford that payment. But they don't think about the fact that, you know, it probably needs some maintenance to keep it going. And truly, the payment is the easy part, really. It's the planning for the unusual maintaining of it. You know, so yeah, I think just, I really feel like this time in our society has probably made a lot of people wake up to the, hmm, I better, you know, kind of take a look at that. What can I do? And yet it can be super overwhelming and stressful because we don't know how to do it or we don't know what to do or who to reach out to. And I think realizing that somebody else does know it and maybe you need to reach out to those people is huge to be able to say, okay, I have this skill set right here. I need to find other experts who do what I don't do, whether it's your financial advisor or your tax accountant or your lawyer or whatever, right? But there's some, you know, smart people reach out to other smart people to kind of up their game.

Well, How important is it to people who have a large debt or they don't have a lot of income and they're kind of afraid, well, I don't have any money to fix this anyway. Can this still help them do that?

Yeah, I feel like, you know, there's lots of choices. You know, you can either find a way to make more money or you can spend less, or a great combination of those two really helps move the needle. Right? So sometimes it might be you have to work a little harder, you have to take another job, you need to up your skills so that you get paid better for what you do. Because obviously, if you're living really close to the wire and you're barely above poverty, it is really hard to get ahead. I get that. Um, but do you have to stay stuck there, right? And what are the things that maybe you could do to improve your situation? And if you just kind of give up and throw your hands up in there and say, oh well, it is what it is, and you keep going a little further in debt, a little further in debt, then, you know, you're not going to get ahead of it. But if you determine that, okay, I can set aside this number, you know, for savings, for, you know, for the next unknown expense or for the next kind of known expense like car repairs. That's really what helps you start winning the race because then you need some buffer between you and the next emergency, you know, whether it's $500, $1,000, $5,000, whatever. So, you know, the general rule of thumb is to have some money in savings anywhere from maybe $1,000 to $3,000 before you really start attacking your debt so that when the next thing comes along, like the car repairs or you know, your tooth breaks or whatever, you don't go put it back on credit. You have money to pay for it. Yeah, your emergency fund shrinks a little bit. And then I think one of the things I misunderstood for years was that if you dip into your emergency fund, you kind of stop your attack on your debt and you replenish that because you always want some kind of line of defense between you and the next emergency. Because there will be. And I think sometimes people think that, um, the fact that we don't have any debt means we don't have any emergencies. It's just they're less stressful when they come up. They don't take your breath away. You're like, oh well, yep, okay, gotta take money out to do that now. Whereas before it was always this big crisis and like, oh my gosh, stressful and angry and whatever, because that thing happened to us, whether it was you know, a car accident or, um, I don't know, your kid broke his arm or whatever, right? Um, there are things in life that— that's part of being human, I think, is that we're going to have— nobody has—

what do they say?

None of us get out alive. You know, we— it's— we're always going to have something. It's just a matter of are we choosing to be somewhat prepared for it. We can't always be prepared for the biggest thing But you can get better at it every year. You know, you can make choices.

It can't be such a disaster. Yeah, we can lessen the effect of the disaster whenever it happens.

Right, right.

What's the first step that somebody needs to do if they want to start working on making a budget?

They have to be aware of where they're at today, right? They need to kind of know their numbers. And be looking at how much income do they have, where's, where's it coming from, when does it come in, what are their fixed bills, what are their variable bills, what are their debts, you know. And if you get it all in one place, it's a whole lot easier than having sticky notes all over the place or trying to retain in your head because you just really can't. There's too much going on in life to just know that. So when you're learning to kind of create a spending plan, the first step is to gather the information. And sometimes that means looking back at the last 2 or 3 months of your statements, you know, checking accounts or credit card statements, however you've been paying for things, and say, oh wow, look how much we've been spending in groceries. Look how much it costs to get us to and from work every month, right? We have, we have expenses. So how do you make sure that you're planning for those versus being surprised when you got to fill your tank up? Well, that's part of the joys of, you know, having a job is usually got to get there somehow. So just knowing where those go, and that's one of the things that, that I have prepared, just a, a little set of 3 sheets for people to gather those numbers in one place. And that's the The gift that I want to give to your people today is to have them, you know, go to the link that's in the email that they received to watch this video or others and download the little Spending Starter Sheet that we created to say, you know, they've got some mind jogs on there. Oh, don't forget this. So that's usually the first step is to just know your numbers.

Now, does this work, um, for incomes that are not a regular paycheck, like weekly paycheck, they get paid more irregularly, like a month or—

Yeah.

Or something like that.

Yeah, on this, on this sheet, you're gathering kind of an average of the monthly, but when you actually get down to creating your spending plan, I really recommend that people do that by paycheck. You need to kind of see your month, but, you know, sometimes you're paying the water bill and sometimes you're paying the cell phone bill in You may be each paycheck needs some grocery money. And so there's some nuances for sure to learning how to budget, but setting aside money for the irregular things like holidays, you know, if you celebrate Christmas, that only comes once a year, but it's usually a big ticket item for people. So it's a whole lot easier if you're setting aside a little bit for that into a savings account or cash or however you want to give yourself that boundary. And then when it's done, it's done, right? You can't spend anymore because you've set a limit for that. But also planning for the irregular expenses. Maybe seems like a lot of people have a quarterly bill for something like trash or insurance, something. Yeah. And a lot of times people don't realize you can actually get a deal on your insurance if you pay it twice a year or once a year versus every month. So You know, if you can get ahead of this a little bit, you start spending less money for the things you still needed. So by— and you can buy things when they're on sale when you have some money set aside versus waiting to the last second and having to pay full price for things. Um, so planning ahead on the irregular stuff really helps you stay the course for the long haul for your ultimate goals.

Okay, and you mentioned that it has more to do with behavior instead of the numbers. Can you explain that a little bit?

Well, because, you know, math is a fixed thing, but behavior is our— we're always kind of struggling against either how we were taught, how we were raised, our impulses, our want. I want that, and I deserve that. And it, it gets in your way sometimes when, you know, You, you think you want to, you know, have money for retirement, but if you're impulsing everything that comes along and makes you feel good, you don't ever seem to have the money to do that. So by setting up behaviors and systems in place, we're more likely to be successful because I think, you know, money is emotional. We have a lot of baggage and people are embarrassed sometimes by their spending and their situation. And I really feel like, you know, we're not taught this very well in, in schools, and we should be talking money from the time we're, you know, 5 years old and learning the value of money and the choices that we make. For every choice we make, there's a consequence. Sometimes it's a good consequence, sometimes it's a bad consequence, right? But If you don't start connecting your emotions and your behavior to your spending, it's really hard to make it change. Couples, you know, that's— they say it's the number one cause of divorce because of the conflict around money. And, you know, he wants to spend it this way and she wants to spend it that way, and they both think the other one's wrong. And, you know, so it's— that's the emotional and the behavioral part of money that I think if we don't get it out there and bring it into the light and look at it, it's— it stays, you know, to be this big monster that's in the closet. I tell people, you know, turn the light on. The monster is less scary when you've got the light on. So we just need to look at it.

You mentioned, um, like $30,000 and $40,000, um, of debt when you were talking earlier when you were working with your friend. Is that pretty common for most people to have credit card or debts with their mortgages that up in the tens of thousands of dollars.

Yeah, yeah, um, I read the numbers all the time and they don't stick in my head, but they always kind of take my breath away about what the average American debt is. I saw something the other day that I thought said 50-some thousand, um, and you know, there's, there's probably three-quarters of the population that have none, and so that's cool, but we're talking 75, 60% of Americans really have a bunch of debt and no savings. Um, I've read statistics that say 60% of Americans could not lay their hands on $500 if they had an emergency without borrowing it from somebody or putting it on a credit card. So, you know, it's mind-blowing to me, and yet really, that's what I love working with is people who make a lot of money and don't have any in the bank. They don't have savings. They might have done some retirement stuff, but of course we don't want to touch the retirement spending for debt reduction. So they're not keeping any close at hand for, um, you know, day-to-day kind of cost of living expenses. And there's a huge percentage of baby boomers on down that did not plan for retirement. And so they're getting into their mid-60s and still having to work and still having a mortgage. And, you know, then it becomes that trickle-down problem into the family because then that delays when the kids, you know, in their 40s and 50s then can be getting themselves ready to be sustainable. And, you know, our society's living longer. We, we, we're healthier than ever. We're living many more years than ever expected. And I think a lot of people were raised thinking, oh, well, I've got Social Security because I had to pay into it all those years. Well, the reality is Social Security doesn't hardly touch the cost of living for most seniors, especially if you still have a mortgage and you're carrying debt and you have car payments and you have healthcare costs that are going up. So, we need a lot more money in our nest egg for the long haul because most People when they retire now are— they— well, I don't know if it's most— many people could live longer in retirement than they worked. You could have 30 years. If you retire at 65 and you don't die until 95, right? So that's a long time to not have an income coming in. And you can't really count Social Security. It's Social Security Insurance, right? It was designed for people at a time when people were dying at the age of 55. So they set the age to 65. You know, like, yeah, we'll start, we'll start giving them some money if they make it to 65. It was not designed to be a retirement plan. And so we need to be responsible for ourselves because we know that the government is kind of notorious for not being a great steward of money, and we can't really rely on them to take care of us in our old age. So that's where I get really passionate about this is the time to do it. And You know, some people say, oh, you know, I'm too old, I'm 50, I'm 60, it's— I'm too old to— no, you're the youngest today that you're ever going to be. So just start doing something. Now, what can you do to clean it up? Will you have to work longer? Maybe. You were probably going to have to work longer anyway, but your, you know, ability to have some cushion and not be, you know, dependent on the system and I can tell you as an old social worker, that's not really the lifestyle you want to have, um, is whatever the government can cover, right? Um, so yeah, it's, it's harder definitely when you're low income, but the problem is not just those in low income. The problem is across the middle class and above where people should have— I mean, I work with lots of people that make over $100,000 a year and they don't have anything to show for it. They might have a big house, they might drive fancy cars, but, you know, they don't have any money in the bank to eat, I think. So it's a house of cards just waiting to fall if we don't kind of take care of it today.

If people were to start saving, how do they determine what amount they should be setting aside for that? Is there a formula, or they just pick a number? What do they do?

Well, It really depends on what their income is. I think a good rule of thumb is to start with 10%, um, if you can. Hopefully you can, and you may only get to 10% by cutting out something else. You know, you, you start with your income and then you subtract your expenses and your groceries and the fixed and variable expenses, and in that also includes those little things you might be saving for, for you know, your license plates that come due once a year, or the trip, or whatever. Those have to be little parts of your budget. But then if you can pay yourself first before you do the rest of the budget— so maybe you set aside— I figure if you can't live on 90%, you're probably not living on 100% either. So if you just started setting 10%, $10 out of every $100 aside— now that's a lot for people, but it's because they don't necessarily want to give up where the other 90% is going. You know, lots of us have a fair amount of waste in our, in our budget, whether it's subscriptions to everything from, you know, Netflix to Spotify to— those are not have-tos, those are want-tos. And so if you trim out first, you know, and kind of look at what are the things I have to put in my budget And maybe have to is 10% of my income has to go to my emergency fund. So obviously, the more you make, the more 10% is, but it's, it's a good rule of thumb. And if you're so strapped or you're trying to pay down debt, maybe you can't do a full 10%, but you could set $50, you know. But if you just set some money aside, times 12, within a year, you know, you've got a decent emergency fund. Now, The thing I have seen when people are first starting to budget is that they're trying to learn how to do this, and sometimes you feel like you're taking two steps forward and one step back, two steps forward, one step back, right? But you're still— if you're moving ahead, you're winning. So I think for me, I know I felt like I've done that budgeting thing, it doesn't work, I've tried it before. But what I didn't realize is that you have to hang in there long enough to get the behavior and to get the knowledge to where you get better at it. You know, the ballerina didn't just jump up on stage and start dancing. She had to learn the steps, right? She did a lot of back work to practice. And people who have, like me, I didn't just grow up wealthy and have money rained on me. I had to set money aside and be intentional and make choices, which are sometimes hard. Sometimes it's like, oh, but I want to go do that too. So-and-so's going on this trip, or they drive this car, I should be able to drive that car, I do the same job. Well, then you go back again to your behavior, your goals, your wishes. What do you want out of your life? I'm not responsible for them. And yet those people that I saw doing those trips and driving those fancy cars sent kids off to college, and those kids had $40,000 to $100,000 worth of student loans because their parents didn't have any money. And I feel like, you know, so yeah, we made some sacrifices and we had to tell our kids no a lot, and yet they still had a decent life and they learned how to work and we were able to then help them pay for college, you know. And graduate two kids out of school without student loans today is a huge accomplishment. I'm very proud of that because it didn't come without some blood, sweat, and tears, right? Um, we didn't— nobody gave us money. No, we didn't have any ace in the hole. We just had to learn how to make our own money do that and make some choices along the way, like where are they going to go to school and what, what part do they have to contribute. So I think it all comes down to choices. Again, a lot of people tell me, I don't have any money to save. But when I get in there and help them look at their numbers, there's usually some fluff.

Usually, you know, there's the latte every day. Yeah, that adds up more than you think if you add it up.

Exactly. How much we eat out, oh my gosh, that's almost everybody's, uh, Achilles heel is eating out. And yet if we can just trim it up— I don't ever tell people you have to never go out to eat. I don't think that's realistic. It wasn't for me. We need some joy in our lives. We go to work for something fun. So have a latte, but do you have to have one every day? You know, could you have it once a week and really enjoy it when you get it? And it's a treat instead of just a function of getting through your morning. 'Cause it's fascinating when you start realizing, oh, I spend $5 to $10 every time I walk in that coffee shop. What if I put that $5 to $10, that's $50 a week right there, right? $70 if you count the weekends. So, there's usually some cushion in your life. But if you can't see it, again, if you don't know your numbers and you're not looking at it, you emotionally feel like there's no extra. I'm already to the wire. Well, you know, sometimes it's a tough conversation with yourself or with your spouse saying, what really could I do without for the long haul? It's worth it. And you can always add things back in. It doesn't have to be forever. You just, if you're trying to attack high-interest credit card debt, which is where most people come to me and they go, you know, "Oh, we've got, you know, $30,000 on various credit cards," and those cards are charging minimum nowadays, I'm seeing probably 15 to 18% and quite frequently 29% in interest. So you add a third onto everything you're buying and what kind of deal did you get when you thought It was on sale, so I put it on my credit card and bought it. Well, if you're not paying it off, you didn't get a great deal, right? You're faking yourself out.

You're actually paying more for it than if you bought it on regular price.

Regular price, right? Yeah.

Well, what do couples do? Because I used to practice family law, and you're very correct, the money is a huge thing that torpedoes the marriage. How do partners get on the same page?

You have to start talking about it, and you have to have some grace for the other person and some understanding that we're both learning something new. And even if one— mostly I always see that one person handled the money and the other didn't. You know, it's like the— you typically have a saver and a spender in, in a couple, and so then it is a bone of contention. But I know for us, our marriage got stronger when we started talking about the money every week or every payday at least, and saying, okay, we've got this much came in this week, where's it going to go? Oh, and you know, this kid needs shoes and I need to go get my hair done or whatever, you know, our expenses are. If we're not talking about it and prepping the other person, then when the big things come up, there's some negotiating that has to happen. I I do a fair amount of mediation in my practice where it's like, okay, he says 50 and she says 500, what's the number going to be? Because there's not one right answer, but you both got to live with it and get to the place of saying, okay, I don't love that, but I'll concede on this one if you'll concede on that one. You know, there has to be some give and take, but it's super important that you both have the same goal. If we have the goal of getting out of debt or saving for retirement or, you know, buying the place in the Bahamas, you know, then we have to find ways to get there together. One person cannot do it if you're, if you're part of a committed relationship. It really does take two to make that happen. And sometimes there's so much damage in the relationship where the other person won't come along. It's not their agenda. They don't care. It's not bothering them. Then it's much harder, you know, to make progress because you feel like you're constantly fighting about in your own boat, I guess. You know, you're like, we're supposed to be in this together, and yet you're going one way and I'm going this way. How can we get our, you know, our direction together?

Does it help for them to write down what their goals are so they can actually see them on paper and they can refer back and say, we both decided we want to go down this path, or say for a house, or—

Sure. Yeah, yeah. No, I think written goals are great. And, um, and just spending some time alone, I think, is, is huge, is just having that time to, um— sorry, my phone's ringing— um, to think in your own head, like, what are my goals, you know? And so maybe it's a walk, or it's an evening, or a glass of wine on your back porch, whatever. But if you don't know what you want, it's pretty hard to combine it with what somebody else wants. But then sitting down and having sort of a budget date where you sit down with your partner and say, here's what my goals are, these are my priorities, what are yours? And they don't always line. I would say probably they're not ever going to align 100%, but then you can, you can pick and choose Okay, what's next? What's our next priority? Maybe it's house repairs that we need to get done, and you know, one wants to fix the fence and the other wants to buy a couch. Well, where— how do we do that? How do we plan for which one comes first? Which one's priority? Is one a need and one's a want? You know, but talking about it is paramount. And when you have a spouse, I think it's important to have a date with them when payday comes around and looking at the budget together. It's one person can do the pay the bills stuff or balance checkbooks or kind of the nitty-gritty, but you both need to be involved in the plan. You know, how much do we need for this category? How much do you— how much are you planning to spend and how are we going to stick to that? You know, I think cash is the easiest way to stick to a plan because when it's gone, it's gone. And you can see it. So if you pull out, you know, $500 for your variable envelopes and stuff, when it's gone and you pinky swear that we're not going back to get any more because this was our plan, we can usually wait to get to the store until next payday. You know, we can usually not buy clothes or golf clubs or, you know, whatever. You can plan it in the next payday, and that's where it gets better over time. We say it takes 3 to 6 months to get a good working spending plan because it's a new experience. You're thinking about things you've never done before. It's a new habit. You've got to build those muscles and practice and fall down and get back up. So it won't happen overnight. So if people are thinking, oh, I watched that 30-minute chat with Penny Kidd and I got it. No, you're just, you're just planting. I planted a little seed right now. We got to water it and see if you can grow it.

Homework.

Yeah. Yeah.

Now you mentioned the envelope system. What if they come to the end of the month and maybe they have a couple bucks left in something? Do you recommend that they put it in savings or move it to something else they want to have?

You know, I think that's really custom and personal. It depends on the, on the category, probably. So like clothing, I always like people to just let it ride. You know, you're not going to spend clothing every month. But if you put $20 in there, $40 every paycheck, then when you need to go to the store for shoes or underwear or coats or whatever, there's going to be some money there. And then that's your boundary. We've got, you know, $150 left in the envelope. That's all we get spent. And, um, and then there is the philosophy about if I didn't spend it, it goes towards the debt. I pull it out, put it towards the debt, and start fresh again next month. I kind of go back and forth between those, and it really depends on the person or the category. I don't think there's one right way. I would say for us personally, we mostly just pulled the amount, and we could vary the amount by paycheck. So we would pull, you know, $300 for these 8 envelopes or whatever, and we put them in there. If we didn't spend it, it just meant it, it was bigger next month. And it could even be on your, like, dining envelope or something like that. You can say Well, this month we didn't spend it all, but when we have enough, we can go do a really nice steak dinner or whatever. So I think it's really personal. I think there's one way to do it. If you're really trying to kill debt, then it probably does make sense for most of those, especially like maybe entertainment or dining or something like that. We didn't spend it.

Cool.

We take that out, put it towards debt. We start over again at the beginning of the next month or the next pay period. And then that way we're finding a little extra towards those, you know, that debt snowball kind of thing.

So they should also just make a decision ahead of time when they're starting. If we do have a little bit left over, which way are we going? Which way are we going to go with it and how we're going to make this?

And it could be, yeah, it could be different for each category. Like I said, for clothing, we don't tend to, even as a family, we didn't spend it all in one month. And we needed sometimes more than what we could afford to put in on any given month or paycheck. But then when back to school happens, you've got a slush fund of money there, right? Or the season changes. For, for us in Colorado, you know, all of a sudden it's May and June and you need summer clothes and you need sandals or whatever, right? So, and then winter comes and you need winter coats. And so there's, there's definitely a cycle to clothing that you can kind of plan ahead. Oh, we better beef up our clothing money this month. Or if you're doing the same amount, then let that money ride so that it's there when you need it. And it's not uncommon for people to rob envelopes when they first get started and be like, ah, shoot, we didn't plan enough. But I would say there's some you can rob from and some you shouldn't. You shouldn't rob from your gasoline envelope if you're using cash. Most people want to use debit with so they don't have to go into the store. But if there's, you know, I would protect groceries, but dining is, you know, okay, fine. If we need, you know, if I need a pair of socks and I need to take from the dining envelope, you know, one became a need and that's okay. So you can kind of pick and choose which one to rob from, but just remember, if you take from that envelope, it isn't going to be there when you need it. Next. You gotta wait until payday to replenish it.

Well, how often should they revisit the numbers to make sure it's all— because at first you're really not sure. I mean, you can take from your back statements, but it still may not be—

it's a guess.

So do they need to revisit it every month or every quarter and say, hey, you know, we keep Robin from dining because we need— the kids need shoes. Should we put the clothing instead of the dining savings? Section?

I, I budget by paycheck, basically. I like to lay it out by the month, but go as, as you know, if you get paid twice a month, then you should be revisiting the numbers within reason every, you know, every 2 weeks, whatever, however often you get paid, because you can correct quicker. You can be like, oh, we way undershot on groceries. We thought we only spent $200, we spent $300 last month. So you do need to kind of keep track when you do that somehow, whether it's on your on your spreadsheet, or you, you're keeping track, what did I plan to spend and what did I spend? Because if you're consistently going over on a, on a thing you have no control over, let's say gasoline in your car, well, if you think, oh, $100 is plenty and you're spending $150, you need to up that category because you've got to get to work, right? And yet if it's dining, we planned $100 and we spent $150, we got some behavior to change. We need to throw in a pot of chili or eat leftovers or eat from our pantry kind of thing for, you know, twice a week or whatever. We need to eat out less or use coupons. Don't buy beverages at the restaurant. You know, those are, you know, big expenses. So share a meal. What can we do to get, you know, stay within what we set our boundary was? Because if we, if we keep growing with what we're used to doing, that's not a budget, that's just tracking. You know, I, I really advocate people considering it like it's driving, looking out the windshield versus the rearview mirror. If we're planning, we're looking out the windshield. If we're tracking, we're looking at the windshield, you know, or the rearview mirror. So I want people to not so much worry about what did you do in the past, but what are you going to do. But sometimes looking at the past helps you at least come up with a number, because most people don't even know what their number should be. Right? They just, just go on about their lives and track it. So, um, but yeah, so it's, it's a process, not an event. That's one of the favorite things that, um, one of my coach groups says. Then, um, we say it over and over and over again. You don't just do it one time. You're learning a process. You're practicing.

Now, you mentioned the free gift that you providing the audience, and those sheets will help them figure the numbers out and make a plan.

Yep, we called it a spending starter sheet, and it's, it's kind of the pre-budget sheet where you need to first gather those numbers. And there's, there's some helpful hints on each sheet between, you know, your, your fixed bills, your variables, your savings, your— and your debt numbers too. A lot of people don't have any clue how much debt they have. And because it's been so ugly, they don't like to look at it. And so there's like, I don't know. And when they start looking at things or pulling up statements and going, wow, look what my interest rate is, or I had a late fee 3 times last year, or, you know, I have one person who's been combing through their cell phone trying to— what can we get rid of? How many payments? How many things did we finance? How many insurances do we have that because they just don't look. They just blindly pay the bill, right? And so if you don't look at it, you can't change anything. But if you start thinking, what can we do to reduce that? Um, so that's what, yeah, my, my free giveaway is. And you've got a link to that that people can just go put their email address in there and download that and print it out and, and start, you know, gathering the numbers because that's really The first step to budgeting, then the next step is saying, okay, now that I know these numbers, what— and because there's even one that says, what was I spending and what do I want to spend? You know, what's my goal? Maybe I want to shave it by 10% or 50% or whatever. And I would caution people to not just go 100%. You know, you've got some things you're just like, okay, we need to get used to not eating out every night. We need to practice. We— what? Can we do to get there? And still, I always felt like I was like in the story of the Tortoise and the Hare. I'm definitely the tortoise, you know, just keep, you know, moving, moving, moving. I didn't, I didn't sprint, and I still feel like I crossed the finish line. And it's an ongoing process for me. I still fall down and get back up. I still learn new things. It's not that I ever act like, you know, I'm so smart and you guys don't know. It's like two heads are better than one, really. You know, what can we do to— and not to blame and shame people into behavior change, but to encourage and support them. That's really my philosophy, because there's no point in just making you embarrassed with where you are. You're not going to change anything if you're afraid to tell anybody. So being transparent with yourself or somebody else. Yeah.

Yeah, and it does, you know, it's like any other habit. It takes practice. You, you know, you set out to do it and sometimes you might not do it right and you just try again. You just, as long as you don't give up, you'll get there.

That's 100% true. You can't quit. And, you know, I don't care how old you are. I mean, obviously you have, you can make a bigger impact for the long haul the younger you are. So like I said, today's your, you're the youngest you're ever going to be. So today's the day to start.

Well, I appreciate you talking with us today. We learned a lot from it, and I encourage everyone to go to the link in the email or go to pennywisecoaching.com, and there's a lot of wonderful resources there as well to help you along the journey. But you need to start out planning your numbers and seeing what you have and what you're dealing with so you can make a plan and Thank you, Penny, so much.

You're welcome. It was my pleasure. I'm super excited to hear all the other speakers, so thanks for putting this together.

Oh, I appreciate you being here, and I thank everyone watching the videos, and I hope you learned something that will help you along your way to become more self-sufficient. Bye, everybody.

Bye.