The Lazy Genius Podcast - #37: The Lazy Genius Budgets

Episode Date: October 30, 2017

We want to save money, have extraordinary experiences, and not stress from paycheck to paycheck. But how? I share the four pillars of a Lazy Genius budget and a peek into our personal family budget and how we put it together, so listen in and grab some ideas for your own budget. And don't forget to read specifically about budgeting during the holidays on the blog this week! This podcast is hosted by Kendra Adachi and executive produced by Kendra Adachi, Jenna Fischer and Angela Kinsey. To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

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Save the everyday with Amazon. Hi, lazy geniuses. You're listening to the lazy genius podcast. I'm Kendra, and I'm here to help you be a genius about the things that matter and lazy about the things that don't. Today's episode, episode 37, the lazy genius budgets. Dalla, Dala, bills. I'm sorry. I'm sorry. I shouldn't have done that. Never mind. In the playbook today, we're going to talk about the four pillars of a lazy genius budget and how I personally set up our family's budget. On the blog this week, I'm actually talking about budgeting for the holidays specifically. So check that out at the lazy genius collective.com slash blog slash holiday budget.

I'll put a link to that in the show notes for this episode two, which is the lazy genius collective.com slash lazy slash budget. And if you don't like having to remember links and visiting show notes and all the things, I highly, highly encourage you to join the mailing list where you'll get everything from everywhere and more. You'll never miss a beat that way. So especially during this lazy genius holiday series that we're doing, that could be a really good call for you. So feel free to check that out.

The lazy genius collective.com slash join. All right. So we're in the early weeks of our lazy genius holiday game plan. But I think it's important to talk about budgeting in general before we get into holiday budgeting specifically. By the end of this episode, I hope you'll see your money and spending with more clarity without needing to get a math degree. Because y'all, I'm not great at numbers. I'll get into the tools I use to set up my budget, and I've tried a lot because I'm not great with numbers, especially the ones that people say are the easiest.

You know, like, quicken and mint, and I'm like, nope, I do not see numbers that way. So this is very much the laziest way to be a genius about money that you can get. Before we get going, though, I want to give you a couple of clarifications about this episode. One, this is not about financial planning. We're not going to talk about retirement and investing and all that stuff. this is just about daily spending and saving. Of course, you can use some of what you save to invest, but we're not going to get into that today,

or probably ever, just FYI. And then two, this episode is for everyone who has money, no matter the amount. We're looking at new ways to see. So that's relevant no matter how big or small your bacon count is. So I hope you stick around and listen. All right, so first let's talk about the four pillars of a lazy genius budget. And this is a very necessary reminder.

I am not a financial planner. I am not a money person. I have zero training, knowledge. I have no credentials that would make me an expert on this. Okay. But what I am an expert on is seeing money in a way that works for me and has worked for me and my family for over 10 years. This way of seeing, spending and saving money, it might not resonate with you. And that's okay. This is not prescriptive at all. If this works for you, score. If it doesn't work for you, score. Spending is really personal and money is wonky to talk about anyway. So anything I say here is not at all a rule. It's just my rule.

If you want it to be your rule too, by all means take it. I am very generous my rules, but don't feel like this has to be you. Okay. So let's get to the four pillars of a lazy genius budget. Pillar one. You must have an overall financial goal. Okay, let me clarify. It can be whatever you want.

but it has to exist and it has to be honest. Why in the long run are you trying to save money at all? Why in the long run do you want to spend the way that you spend? Do you want to get rich? Do you want to retire rich? Do you want to be able to give generously at any moment? Do you want to travel all over the world? Do you want to leave your kids with a financial leg up and pay for their college

or set them up with like a big savings account so that they can have when they become an adult? what's your biggest overall financial goal? If you don't have one, you'll wander or you'll just hoard for no reason and then sort of be unhappy. It's just the way it is. So many of us think that the default is to be rich, to have more than we need. But I've been challenged lately to look at that mindset again. My family, we're rich by the world's standards, but not by America's standards. Like we're lower middle class for sure but you know what we really enjoy our life yes i don't buy as many books as i'd like and we don't take a vacation every year but we lead full rich lives without a ton of money to do it so why should retirement necessarily feel different than that you know like if you're if your overall financial

goal isn't to become rich that affects how you spend every day if you just squirrel away a ton of money and like build up this huge nest egg which is totally fine but you don't really have any desire to live in excess at any point, then your financial strategy might need to be something else. Your goal might need to be something else. So the pillar one, know your financial goal, your overall overarching financial goal. Like what does money mean to you? How do you feel about money? How much do you actually want or need? How do you really want to live? Answer those questions to help you decide what the goal really is, what your perspective on money really is. And then you can budget and save appropriately.

So no goal is the wrong goal unless you want like world domination or something. So there's no judgment if you want to live a life with splurges. Like it's totally great. Just don't assume you know what you're saving for. It might be different than you think. Don't just save money to hoard it and to have it. Really think about why in the long run. Okay, so that's pillar one.

pillar two of a lazy genius budget always be saving for something i love the saving i love the security of seeing a savings account number go up makes me feel safe but for what purpose like we might yes we might have an accident yes my husband might lose his job yes there might be any number of scenarios that could wipe our savings clean but sometimes i'm not sure i want to live my life in financial fear of what might happen i believe that we can be wise in our our saving and are spending without being money hoarders. That's what I was for a really long time. Stick everything in a savings account, watch it grow, and never do anything. We're saving, but we're not really saving for something. And here's the thing. When you're not saving for something,

when you don't have a specific financial goal, it's hard to find the motivation to not spend money on things that might not matter so much because it's easier to dip into a general savings account that you're just squirling away whenever you want to spend money on something that might be fun. It's just easy to kind of dip into that when you don't have something to measure it against. Like saving for a down payment on a house, an international family trip, tuition for grad school, any other goal that you can think of. Okay, now the way that this goal, this pillar is different from pillar one, which is more of an overall end game financial goal. This is having a specific savings

goal because it's such a great motivator to only spend money on what matters. You have something tangible and more immediate to measure your purchases against. And it can be something really small too. Like right now, we're saving for a family photo session, which is like a couple hundred Sure, it'll get paid for way quicker than buying a car, but it's still something that we can put our purchases up against. So always be saving for something. You'll spend less on mindless stuff and enjoy things that matter more quickly. So pillar one, have an overall financial goal, an overall vision of your money. Pillar two, always be saving for something, anything, the smallest thing to the biggest thing, but always be saving for something.

Pillar 3. Don't spend more than you have, right? We all know this one, but it's still worth mentioning. It's important enough to be a pillar. Just don't spend more than you have. Yes, there are absolutely exceptions. I think of trade workers, for sure, folks who get paid job by job, and those payments aren't always on time or predictable. If you live paycheck to paycheck but don't have a consistent paycheck, like sometimes your only option is to use a credit card. to pay your light bill. It's just the way it is sometimes. And there is grace and understanding in that without question. But just in general. And folks who hit walls where they just don't have money to spend would agree with us, I think. Don't spend more than you have. Just stop doing it. If that means not using credit cards because it's easy to pay minimum payments on those, if that means not mentally giving yourself

an advance and continuing to do that until you're literally hundreds of dollars in the whole, you know, it's like, oh, well, I don't actually have that money in the bank account, but it'll get there. And if you keep doing that over and over again, eventually you're not going to have enough money in the bank account. It could be just such a simple mindset shift. Don't say, I'll try to spend only what I have. Make it non-negotiable. Don't spend more than you have. A massively important pillar for a lazy genius budget. And pillar four, track everything. Okay. So, here's where some of you might get a little bit squirly. I put every single purchase into a spending app. I track it that way. I used to track it with pen and paper, but now technology,

but I track everything, everything. The $5 that my kid needs for a class fundraiser, the drive-through Starbucks treat, library finds everything. I've learned the hard way that stuff adds up really fast, like really fast. We just don't recognize how a lot of tiny spend, can make such a huge impact on our overall budget. That means track everything, which also means have a budget. A budget is, don't get scared. A budget is basically a spending filter.

You can be as detailed or broad as you want, but when you set some kind of parameter on your daily spending and actively try to stick to it, that's a budget. That's a budget. And tracking every penny in that budget is key to making it work. I had an accountant friend,

so obviously like super brainy about money. She was meeting with another friend who was in a pretty tough financial stretch. And my accountant friend asked the other friend, what if I could save you over $300 right this minute? And of course the other friend was like, yes, please. Turns out this other friend bought a large $1 sweet tea every afternoon on her way to getting her kids from school. It was a fun treat that became like an automatic choice. It was just a kind of daily tradition sort of thing.

But it was easy to make that choice because it was only a dollar, right? Like, no big deal. But if you're spending that dollar almost every day, that's a lot of dollars if you look at the entire year. Easily $300 worth of tea. Buying a tea or a cup of coffee, which costs way more than a dollar, or anything every day, it isn't bad at all at all. But we often don't realize how those little things can add up. At the very same time, we are limited.

Menting not having enough money to do X, Y, and Z. And generally X, Y, and Z are things that really matter, that we want to matter. We want to make room for in our spending. But we're too distracted and maybe just have become a little bit blind to those daily tiny things that add up that we're not tracking anywhere. Tracking, logging, whatever word you want to use, it's like a pair of spending glasses. You see what you're spending. Aw isn't something we need to travel for. It's something waiting for us in everyday life,

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Always be saving for something. Don't spend more than you have and track everything. Okay. Now I want to share some specifics. And I will use our personal family budget as an example. I use an app called Daily Budget. I'll put a link in the show notes, but if you look it up in your app search thing,

it's a white pig and a yellow square. That's the daily budget icon. I have tried over a dozen budgeting and spending apps over the years, probably more actually. And this one, it just speaks my language. It is a really simple design, but a very thorough concept. And it doesn't make you do math. Praise. And by the way, this is not an ad. Daily budget knows nothing about me. I just love this app and get really excited about it. I am very much a daily budget evangelist. It's great if you don't have a budget already or if you have trouble sticking to ones that you keep making and quitting. Okay, so here's how it works. Let me explain the app, but also

really the budget. Because I share this because this is how a lazy genius budget works. It's not so much about the app. The app just does the work for me and for you potentially. But this is really how I have been doing our budget for years and it has been fantastic. Okay. So first in the the app or on paper however you want to do. You need to know your income, right? How much money do you make every week or month or how often you get paid? Then in the app, you enter in recurring expenses, like, you know, utilities, mortgage payment, Netflix, subscription, all that. You label the bill, you set the amount. You select if that money leaves your account weekly every two weeks, monthly, by monthly, quarterly, half yearly, yearly, yearly.

Basically, however a bill might come to you, you can set when it gets paid in this app. So like car insurance, property tax, Amazon Prime, Costco membership, commitments to nonprofits, Spotify, all of it. By the way, quick note, this app, it doesn't actually pay your bills. You still have to do that part. This just helps you spend the money that's left over and it helps you see it all. Okay, so this is just your way of seeing it, but you still do need to have a situation where you actually pay. your bills. Okay, so now, now you have your income in there and you have your occurring expenses in there. What the app does, or what you can do, is you take your income, you take what you regularly

pay for your bills and stuff, then the app does that math, and it spits out a daily amount of money or a daily budget, which is the name of the app, that you can spend. What's cool is the color of the screen, it changes if you have money to spend or if you're getting near or past your limit. it's pretty simple but incredibly effective. So I have $37 to spend every day. Okay? And I have to do a major trip to Costco in three days. So what the app helps we do is I can go,

all right, maybe I can skip the fancy coffee and those clearance tea towels to make sure I have enough money in a till when I need to do a big shopping trip in three days to Costco. If you have been, if you've ever been intrigued by like the envelope system or paying with just cash or a zero-based budget. This is that, but it's digital and it's simpler. But here's my favorite thing about the app itself and about lazy genius budgeting in general.

Remember pillar two, always be saving for something. This app lets you do that. There is a tab called Big Spendings, which, that sounds like a rapper name, which lets you save a certain amount of money for a certain thing over a certain amount of time. So maybe you promised your family a trip to an amusement park next summer. But you also know that when it's time to spend, you know, 70 bucks a ticket for five people plus food and parking and all the things, that's a pricey day trip.

A price that isn't necessarily like cozy friends with your cash flow at that point, right? What you can do is you can set a big spending. You label it amusement park. You choose the amount. You set a time frame you want to save for it. So you could save for it like the two months leading up to the trip. the six months leading up to the trip or however you want to do it like you just save um you just set the time frame it's so great and then the daily budget app it amortizes it is that the right

word it splits up that amount over the number of days you're saving for it and automatically takes that amount out of your daily budget number so instead of 37 dollars a day you might have 34 a day but that's way easier to process than suddenly being out 500 in a hot second right let's say you get a birthday check from your grandma for $100 generous grandma you can add that in as extra income and either like plop it down into your total for that day that carries over from day to day by the way of course um so like if you have side note like if you have yeah $37 day and on Monday you don't spend any money the next day the app says you have what's $37 $74 all right yep $74 a day. So it does roll over, of course. But if you add something like a birthday check,

you can have the app spread that money out across the month evenly. It just, or all at once. It just comes down to how you want to see the numbers. Okay. So budgeting this way isn't complicated. That's why I love it. That's why this is the lazy genius way to budget. You don't have to have categories for groceries, household products, eating out, clothes, books, entertainment, all of those elusive categories that never really seemed to work. You just have 34 bucks a day or whatever your number is. Just spend it wisely. And you can save for bigger things, even smaller bigger things, like a family photo session, right, without the cost sneaking up on you. And as long as you log everything, pillar number four, track everything, you'll be fine. You'll spend only what you have,

pillar number three, right? And you'll have an easy way to always be saving for something. And you'll be Pillar number two. And as you get in the habit of tracking your money and seeing how you actually are content to live with less when you take the time to recognize your habits, you'll begin to see that your overall financial goal, pillow number one, you'll see it more clearly. It'll make more sense. What does money really mean to me and my family or whoever is involved with your bank account? I think a lot of us don't have budgets because it just feels too overwhelming. There are too many categories, too many places for it to go wrong, too many hours pouring over receipts. Like, oh my word. Like, if you have categories of like household products and groceries and baby things

and whatever and you go to Target, like how many times have you tried to split up that receipt? And, ugh, it's maddening and awful. Nobody needs to do that. It's so stressful. But it really doesn't have to be. You can keep things really, really simple as long as you commit to tracking it. a budget only works if you pay attention to every purchase. Otherwise, it's just going to fall apart and you'll get so frustrated. So maybe give the daily budget app a try. Again, this is how I have budgeted for years, but it was always more work than I thought it should be

because I did so much of the math on my own. Now that this app does the math for me, shut up. It is magical. It's so great. I am sharing about holiday budgets, specifically on the blog, and this week in the lazy genius newsletter, I'll share three questions to help you spend less money. There is a lot of money talk this week. And the best way to not miss any of it is to join the mailing list at the lazy genius collective.com slash join. Okay, so that is a quick discussion on budgeting. Again, if this way isn't your jam, super cool. This is not a blueprint for everyone.

it is a suggestion of tracking money. And if other ways of tracking money makes you crazy, maybe you could give this one a try. And let me know what you think. And before we close up shop for the day, of course, let's get to our lazy genius tip of the week. It's about laundry. You thought I didn't have anything left to say about laundry,

but I do. One of my favorite parts about how the lazy genius does laundry, which is a podcast episode you should absolutely go listen to, is that the loads are based on what happens to, the clothes after they come out of the dryer. Okay. You wash similar items based on type to make the putting away much easier. A way that we have made that even better in our house is having my boys sort their clothes

after they're dried, after they come out of the dryer. So I wash all their clothes together in one load, and then there's the family underwear load, too. Okay, and I talk about how those put together in the order in that episode. well my boys are about two years apart and the little one wears all the hand-me-downs so i've been looking at these clothes for seven years half the time i don't know what shirt belongs to what kid i have no idea and the labels have rubbed off on their underwear so like i'm trying to figure out the size and all of it takes super long i don't actually make them full their clothes i'm sure that will happen eventually but for now when they're home i have them sort their clothes once they're dry

they know it belongs to them way better than I do, and they do the annoying work of figuring it out. So once I'm standing in front of a pile of Sam's underwear, I just neatly pile it. There's no digging for sizes or making multiple piles of things. Same goes for shirts. You know, it's so much easier to fold a pile of shirts than it is to fold a pile of seven different things.

And we already sort of make that easier with washing and drying things based on the type of clothing. But for this kind of thing, like even sorting the laundry once it's dry, so it's like, oh, here's a pile of napkins, go. Here's a pile of kids' shirts, go. Here's a pile of my pajamas, go. And you can just sort of automatically move into how you're folding it and have the pile on it's great.

So you can do this with any of your clothes yourself, sort after the dryer. So the folding and the decision making is way, easier. And that is the lazy genius tip of the week. Okay, don't forget to head to the lazy genius collective.com slash join to get your name on the mailing list so you won't miss a single thing that happens, especially during all this holiday goodness. We have so much good stuff left to talk about in all different places here on the podcast, the blog, Instagram, and the newsletter. So please don't miss out. And thank you for listening, for leaving reviews, for sharing the show with your friends it is such a gift you have no idea what it does to um to me personally it's just such an

encouragement but like i see the lazy genius podcast um like exist in rankings because of you guys because of um not it's not just about download numbers i see those things go up once reviews go up it makes such a difference for people to see and find the show so it's just such a gift that you guys do that. So thank you so much. And until next time, be a genius about the things that matter and lazy about the things that don't. I'll see you next week. Have you ever felt like you were living just a B or B plus life? It's so dangerous to live that. More dangerous than a B minus or a C plus life? Because when you're living a B or B plus life, you don't change it. You think it's good enough. Is it? I'm Susie Welch. I host a podcast called Becoming You. People think, okay, an A plus life

is not available to me, but there is a way. We are all in the process of becoming ourselves. Listen to Becoming You wherever you get your podcasts.