Frugal Friends Podcast Episode Summary
Episode: Budget Better Bonus Series | Step 3: Plan for the Future
Release Date: December 30, 2024
Hosts: Jen Smith & Jill Sirianni
Produced by: Eric Sirianna
Introduction
In the third installment of the Budget Better Bonus Series, hosts Jen Smith and Jill Sirianni delve into Step 3: Plan for the Future. This episode focuses on creating a sustainable and flexible spending plan that aligns with personal values, ensuring financial stability and personal fulfillment.
Redefining the Budget
Jen and Jill begin by addressing the common negative perceptions surrounding budgets. Jen shares her personal struggles with traditional budgeting methods, highlighting the guilt and shame that often accompany rigid financial plans.
Jen (03:38): "I spent years making these perfect budgets and never being able to spend in the way that I budgeted. I knew what was coming in. I made the budget to dictate what was going out. And for some reason, I couldn't do the things I said I wanted to do."
Jill echoes this sentiment, emphasizing that budgeting shouldn't feel like deprivation but rather a strategic plan for allocating resources.
Jill (05:42): "It really can feel like deprivation sometimes. It can feel like the point of a budget is to get you to spend as little money as possible... We need to have the skill sets to implement that plan and know how we're spending the money."
Values-Based Spending Plan
The hosts introduce the concept of a spending plan as an alternative to traditional budgeting. This approach prioritizes personal values and ensures that spending aligns with what truly matters to individuals.
Core Values – The Four Fs:
- Family
- Faith
- Friends
- Fulfilling Work
Jill (06:24): "We really love to interchangeably call it a spending plan so that we can feel a little bit less shame and guilt about the fact that it will include spending money. That's the whole point of it."
By categorizing expenses under these core values, the spending plan becomes more flexible and meaningful. Jen explains how this method transforms budgeting by grouping expenses into broader categories, making it easier to manage and less restrictive.
Jen (08:48): "Instead of having categories like groceries, takeout, restaurants... we've got just big groups. Makes it much more flexible."
Integrating Time and Resources
A unique aspect of their spending plan is the inclusion of time budgeting alongside financial planning. Jen and Jill discuss how allocating time effectively can enhance both income generation and personal fulfillment.
Jen (19:13): "We're involving the budgeting of our time in this too. So we want to be budgeting some of our time to either be increasing our income or... creating a more balanced budget overall."
This holistic approach ensures that not only money but also time and other resources are optimally utilized to support one's values and goals.
Practical Implementation
The hosts offer actionable steps for listeners to create their own spending plans:
- Identify Core Values: Determine what the four Fs mean personally.
- Allocate Resources: Assign funds and time to each value-based category.
- Flexible Planning: Allow room for spontaneity and unexpected expenses.
- Regular Review: Continuously assess and adjust the plan to stay aligned with evolving goals.
Jill highlights the importance of incorporating tools like a 90-day transaction inventory or a 30-day no-spend challenge to better understand spending habits before crafting a spending plan.
Jill (08:48): "Where we begin is identifying how am I spending time in these four F categories, what is getting me more of that? Where can I see gaps?"
Adapting to Changes and Learning from Imperfections
Jen and Jill emphasize that financial planning is an evolving process. They encourage embracing imperfections and learning from financial setbacks to refine the spending plan over time.
Jill (20:27): "When we're planning for the future, I think we can expect as usual for it not to go perfectly. And that is okay."
This mindset fosters resilience and adaptability, allowing individuals to adjust their financial strategies as circumstances change.
Real-Life Examples
To illustrate their methods, Jen and Jill share personal anecdotes:
- Jill's Plan: Reducing the miscellaneous category to allocate more funds toward housing repairs post-hurricanes.
- Jen's Adjustment: Reallocating savings from a reduced childcare bill to bolster investing, leveraging automatic contributions to maintain financial growth.
Jen (27:12): "In March, our childcare bill will go down $50 a week and I will be changing up our budget to allocate that towards investing."
These examples demonstrate the practicality and effectiveness of a values-based spending plan in real-life scenarios.
Conclusion and Upcoming Resources
The episode wraps up with an invitation to listeners to pre-order their book, "Buy What You Love Without Going Broke," which delves deeper into the principles discussed. Additionally, a free class on creating a one-year spending plan is offered to those who pre-order by January 10.
Jen (23:12): "We're actually for everyone who pre-orders Buy What You Love Without Going Broke before January 10, we are doing a free class on how to make a one year long spending plan."
Notable Quotes
- Jen (03:38): "I spent years making these perfect budgets and never being able to spend in the way that I budgeted."
- Jill (05:42): "It really can feel like deprivation sometimes. It can feel like the point of a budget is to get you to spend as little money as possible."
- Jen (08:48): "Instead of having categories like groceries, takeout, restaurants... we've got just big groups. Makes it much more flexible."
- Jill (20:27): "When we're planning for the future, I think we can expect as usual for it not to go perfectly. And that is okay."
Takeaways
- Flexible Spending Plans: Transition from rigid budgets to flexible spending plans centered around core personal values.
- Holistic Approach: Incorporate time and other resources into financial planning to enhance overall life satisfaction.
- Embrace Imperfection: Accept that financial plans may not always go as expected and use setbacks as learning opportunities.
- Continuous Evaluation: Regularly review and adjust your spending plan to stay aligned with your evolving goals and circumstances.
This episode provides a comprehensive guide to planning for the future by aligning financial strategies with personal values, fostering both financial health and personal fulfillment.