“Budget is not a four-letter word!”
I am super excited about my amazing guest this week! I have an expert who is going to share with us all about personal budgeting.
My guest this week is Suzanne Johnson, a Dave Ramsey financial coach and the founder of G.R.A.C.E. Financial Coaching. And fun fact, she is a recent graduate of Capital Live Video, my Video course! She is going to be launching her own live show very soon!
We are tackling personal budgets this week because you can’t have your personal budget out of control and then expect to be able to get your business budget together as well.
Regardless, financial habits cross into both personal and business.
And before we dive in, Suzanne wanted to clear the air: Budget is not a four-letter word!
If you’re over the age of 13, you should have a budget.
Just the other night, Suzanne was talking to a client with a 4 year-old-son who got money for Easter. For kids, Suzanne recommends setting up three envelopes: A give envelope, a save envelope, and a spend envelope. He can take his money and divide it up into those three envelopes. Believe it or not, at age 4, kids can grasp this. That’s a budget! It’s that simple.
As adults, we could let it be that simple. The give category can be money for various charities you want to support or your church if that’s your thing. It’s important to note that the spend category is what people most associated with budgeting. It is 90% of a budget. Spending doesn’t just mean going out and buying clothes. Spending is also utilities. That’s an expense. We have to capture not only your income, but also your “out-go” = spending. The third pillar is the save category.
You also want to make sure you are paying yourself first. On the personal side of budgeting, that means saving money. You always want to live within your means and a little bit below your means because you want X% to go to savings. That percentage really depends on where you are in life.
For example, if you are 25 and have $100,000 in student loans, you want to keep the savings category smaller since you want to get rid of that debt as soon as possible.
If you are older and moving toward retirement, then the saving percentage is going to be bigger. There is no exact formula, but you always want to be living within your means and paying yourself first, which means saving.
It is one thing to create a budget, it is another thing to actually stick to it. That’s where accountability comes in. When you know you’re going to have to speak to someone like Suzanne and account for your spending, you are more likely to do it!
You can have Starbucks or Dunkin Donuts every day, or whatever it is that you love, as long as it fits in your budget. It is important to have fun money. You have to work that in there. If you don’t also include the fun stuff, you’re not going to stick with it.
If you go “scorched Earth” on budgeting (with no fun built-in), you’re going to fail your first time around. Suzanne has had clients come to her and say that they’ve tried budgeting before and it hasn’t worked for them. That’s because people have a very human reaction to budgeting of going all or nothing. There has to be a building block period to build up to completely eliminating things in your budget.
Aside from drastically restricting spending, there are a few other barriers to sticking to a budget. Convenience – When do you have more money than time? Or more time than money? You have to find the break-even point. For example, Suzanne had a client in NYC who was spending way too much on food for three people.
The client’s justification for the exorbitant food spending was that preparing food felt overwhelming during pandemic times so ordering in felt like the best solution. Suzanne had to help her clients find a balance between spending 3 hours cooking meals from scratch to spending $40-$50 a night on take-out. They settled on a meal prep company. It has saved them time and money, and they built it into the budget.
We all have barriers like that, right? What we need to do is identify our own barriers. If you don’t identify those barriers you won’t be able to overcome them. You won’t be able to find alternative solutions or compromises.
But before you get to the barriers, you should know your “why.” Why are you creating a budget in the first place? It could be you want more financial stability or more financial freedom. Or more financial independence. It doesn’t matter what you call it. Everyone Suzanne talks to wants some kind of financial stability in their lives. Creating a budget is the first step to doing that.
For your “Why,” Suzanne really wants people to get a full-sized piece of paper and get really detailed about your financial why. The more detailed you are going to get, the more you are going to attach yourself to that goal.
Don’t just say you want to buy a house, for example. Everyone wants to buy a house. Write down how many bedrooms it’s going to be. Write down how much land there will be. Write down how many garages you’ll need. Write down how many bathrooms. Write down that it needs a fireplace. Write all of these details down. Make it really visual. Then stick this up on the fridge.
Now, you have to say to yourself that you are going to cut down on this area of spending so that you can save for the down payment for the house you’ve just detailed on that piece of paper.
When the barriers come at you and you feel like you’re a little lost in the weeds, keep your why in mind. That will get you through the weeds.
Budgeting and getting your personal finances in order is a long-term endeavor. Suzanne works with her clients for a full year. During that year, she helps them build financial habits like you would build muscles by going to the gym.
It takes discipline to build healthy financial habits and set healthy boundaries with your money and with other people. There are other people who are trying to ruin your financial health, plus guilt and shame and other things like that so the why is important. It’s hard work. Don’t underestimate it. Always having the very specific why and goals at the forefront of your mind helps you drive past Dunkin Donuts every day without stopping.
The other big thing that will help you overcome barriers is having an accountability partner. That can be a financial coach or your spouse or a friend. You could say to your friend, “Hey, I’m living paycheck to paycheck, and I haven’t saved a damn thing. How about you?” The reason why Suzanne wants you to have these conversations with your friends is that in America, we talk about sex, politics, and religion, but we never talk about money. We have this weird stigma around talking about money. WHY?!?
Before the pandemic (circa 2019), 79% of people in America were living paycheck to paycheck. It’s probably worse now. Help each other out! Don’t be afraid of having these conversations with others. Find that accountability partner.
If you’re married, your spouse should be your accountability partner. If you can’t see eye to eye, that’s when Suzanne says she gets a call to help. Money touches everything, and you can’t have an amazing, rock-solid marriage if you and your spouse are on two different pages financially.
If you are single, ask a friend or Suzanne says there are a bunch of budgeting groups on Facebook. Google it!
Primarily, Suzanne works one on one with clients for 6-12 months. She prefers 12 months. She wants to see a client through the holidays, the tax season, any seasonal changes that occur financially, etc.
She also offers group coaching. Her next session starts on April 22! That’s also a great place to find an accountability partner. She pairs people off, and you’ll have an accountability partner for the 10-week coaching program. There are only 10 slots available for group coaching. You can sign up on Suzanne’s website: G.R.A.C.E. Financial Coaching.
Whether you want private coaching or group coaching, you’ll talk about your budget, your expenses, how much debt you have, your income, etc. There will be tips and tricks to bring your expenses down, but the majority of it is behavioral. It’s 80% behavioral and only 20% numbers.
What we are really doing is building a budget and creating behaviors so that in 6-12 months you don’t need Suzanne’s guidance anymore. Suzanne’s goal is to release people after a year and to say, you can do this on your own!
Suzanne is always available after the fact, and if you need one-off reminders of lessons as things come up, she will do that for you.
You can create a budget, but really, you have to look internally as to why you want to stick those numbers and commit to changing those behaviors.
And if you are really considering live video in 2021, you can check out my self-guided course to create your own Live Video Show https://capitalizesocialmedia.com/cwl/
Also, if you are a coach looking for a little more marketing support come join my private Facebook group, the Consistent Content Club! I also have another group that goes even deeper. If you’re interested in the new Tidepool group, set up a time to chat with me directly!
If you want to talk more about manifestation or if you just need some positivity right now, let’s set up a time to chat!