← Frugal Friends Podcast
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- [00:00]
A
My new website's been getting a lot of attention lately, and here's my secret. I used WIX Harmony. It's one of my favorite tools because it feels like such a natural way to create and I have so much control over my website. I can just tell Aria, my AI agent, to create whatever I'm imagining in my head, or I can click anywhere on my site and change things myself. Try it for free@wix.com Harmony that's wix.com Harmony.
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B
If you're early in your career and looking for insight, inspiration and honest advice, listen to the Capital Ideas Podcast. Hear from Capital Group professionals about leaning into the differences that make you unique, making decisions that last, and what it means to lead with purpose. The Capital Ideas Podcast from Capital Group. Available wherever you listen. Published by Capital Client Group Inc.
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C
We make $7,000 a month. So why are we still broke? Listener Budget makeover.
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D
Welcome to the Frugal Friends Podcast where you'll learn to save money, embrace simplicity, and live a richer life. Here are your hosts, Jen and Jill.
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C
Welcome, Frugal Friends. I'm Jen.
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E
I'm Jill.
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C
And today we are doing something we've never done before. We asked you guys to plea to us for a budget makeover. And so we chose one of you, Miranda, to look at your budget, look at your 90 day transaction inventory, and to give you suggestions on how to refine it. And this one, I think it doesn't matter who you are, especially Miranda, but anybody listening to this is going to get something out of this episode. This situation comes up, I think, all the time and it was good for us to be reminded of it. And so I'm very excited for this episode.
- [02:11]
E
There's some really relatable things in Miranda's budget. We're going to show visuals, we're going to give our recommendations, of course, all for entertainment purposes only.
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C
Yeah.
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E
And if you like this episode, if this is the type of content that you're like, yes, please. This is so helpful. The way that we know that is by you. Subscribing views are really important, but we base what type of content people really want by how many people subscribe after
- [02:39]
C
having watched it and how many subscribers watch. Because we can see subscribers watch and unsubscribe subscribers watch.
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E
Not to mention we want to get to 10,000 subscribers for Jen's birthday. And that's just a fun goal. Jen's birthday is May 9, so help us celebrate by subscribing.
- [02:56]
C
And thank you is the best thing you can give me for free. Take your Take your partner's phone, take your child's phone, take your friend's phone and subscribe to Frugal Friends on their phone too. So everyone can get at least two subscriptions. Absolutely. I think that's no problem.
- [03:12]
E
Easy task. So, so Miranda.
- [03:16]
C
Yes, Miranda, Josh have three kids, 11, nine and two. And we are going to go through the numbers because that's helpful. But the actionable advice that we give is not going to be like, oh, you need to like cut 200 from your groceries or cut from this. That's not the kind of makeover that we are giving. We are giving a reality check and steps on how to live in that reality check. And so that's why I think it's going to be helpful for Miranda and Josh, but also for you watching. And Jill made some beautiful graphs to go along with this episode.
- [03:57]
E
Yeah. So stay tuned. But let's give a little bit of background. So we've already said Miranda and Josh, they've got the three kids, 11, nine and two. So a family of five, their monthly income is $7,300 a month. Now, Miranda does currently have a temporary job from about March to May that will earn her $5,000. We're going to talk about though, we want to talk about what we know is coming in every month and not base it on something that is temporary, short lived. We view that a little bit more like a windfall. So in essence, $7,300 a month coming in. And here's what Miranda said to us about some of the goals and the situation that they're in. She said, my husband is the sole
- [04:45]
F
provider for our family of five.
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E
We have a lot of financial goals, credit card payments, paying off vehicles, building our savings. But so much of it feels unattainable at times and we blow our spending budget monthly. I've tried different strategies but can't seem to find one that will work. My husband also likes to buy projects, which I'm okay with, but he refuses to set money aside ahead of time. And then we end up putting it on the credit card or we pull it from savings, which means our debt never decreases and our savings never increases. So from this we're hearing that Miranda, her family, they want to pay off credit card debt. They want to stop the revolving debt that ends up going on the credit cards, pay off vehicles and build up an emergency fund. She does say someplace else that they have $8,000 so far in emergency fund and want to build that to $20,000. So a lot of goals here, not to mention House projects. It sounds like they recently bought a house. So there's various things they want to do around their house. They're kind of active family.
- [05:53]
C
Yeah. So when I got this submission, I sent Miranda a intake because I wanted to know more about, you know, what are your numbers, but also what do you value? Like what do you love? What are your ultimate goals? How do you want to feel about your finances? And so that's where we got to her saying, I think what our ultimate goal is in this budget is not feeling that we are living paycheck to paycheck and having a fun money sinking fund at our disposal rather than incorporated into our general spending fun. Something that I was hearing over and over is that Miranda and Josh like to be a little impulsive, like to be a little unplanned. And I get that I am a person who I cannot plan for what I want to do. When I want to do it, I want to do it and I want to do it at that time. And so I have had to make my lifestyle one where I can afford that. And it sounds like that's exactly like Josh Marinda. But they also do have family values and other goals. So I think what we're going to focus on in getting to in this budget is a place that meets those debt payoff goals. But also, they said we recently purchased a house and have plans to add a garden, fix the fencing in our pasture, build two covered patio areas. We also enjoy being outdoors and have ATVs which need fixing monthly.
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E
Ain't that the truth? Ain't that the truth? ATVs, ATVs, boats, any of these recreational fun vehicles. If you're not in independently wealthy, which $7,000 a month is nothing to sneeze at, but that's not independently wealthy kind of money. And. And you've got all of these side things. Yeah, it's not just, oh, I get to vroom, vroom around on the weekends, it's I gotta, I gotta tinker. Yeah, constantly.
- [08:00]
C
So a family that values being together, being outdoors, enjoying their property, and that's what's at the heart. That's what Miranda's saying, but it's not what her budget is reflecting.
- [08:18]
E
I just want to say one thing here. I can understand the competing goals here. We have just listed a lot to pay off credit card debt to build. What did you say? They just purchased a house, but add in a garden, fix the fencing, add covered patio areas, do the atv, pay off the ATV and the car, do this. This is a lot of things, but I can relate to that. There's a lot of things that I want my money to be able to do for me. I have a lot of goals. One of the things I'm going to say at the jump here, unpopular opinion, life is long. We don't have to do them all at once. We'll get there.
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C
And I think that's a good piece of wisdom to take through the rest of the episode.
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E
Okay, so here's a snapshot of current spending based on what Miranda has sent to us. She did do a 90 day transaction inventory. She also did break down her monthly expenses. So kind of combining those two together, this is what we were able to pull from that. So as far as fixed expenses go, we're Talking close to $6,000 of this $7,300 income is going to the rent, the utilities, the insurance. So there's both a car that is being paid off as well as this atv. So we've also listed out kind of how much is still owed on each one. So $21,000 still owed on the car. $10,000 still owed on the ATV. Childcare. I mean, there's three of them.
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C
So. Well, some of them are in school. Only one of them is in, I would assume is in child care.
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E
Right.
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C
Based on the.
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E
That's expensive. So that really does only leave 13 to $1,400 a month for these variable expenses. And here's where that is currently going. Groceries, dining out about the same amount between the two of these things, but combined we're talking $1,300 here, which is not a lot.
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C
And I look at this and I question, can you feed a family of five that clearly has boys for thirteen hundred dollars a month?
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E
Right.
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C
I am convinced that there's more spending on food that is not being tracked.
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E
Right. Or it's somehow ending up in this miscellaneous section because Miranda did tell us that a lot of the impulse purchases are snacks. So maybe it's because you're hungry, because $1300 isn't a ton of money if
- [11:00]
C
you listen to frugal friends. You know how I feel about snacks. Snacks, we always carry snacks. ABs always be snacking. Because then you're not going to stop at the, at the gas station and buy the overpriced snacks. You're not going to stop at the drive through and get the overpriced fast food. I mean, we love a McDonald's hamburger. Don't come at me. But we don't need to be spending money on that because we are desperate and hungry. ABs always be snacking or ABPs always be packing snacks. Yeah, whatever one you like.
- [11:35]
E
Yeah. Or just increase the grocery budget, decrease the snack budget a little bit if that is a lot of this miscellaneous spending. But here we have it. This number given to us of about 1730 being spent on projects, impulse purchases. When we asked Miranda to define that a little bit more, she was like projects is the best way to define it. Whether it' whether it's tools needed to do something on the house or parts needed for the ATV or snacks. So this is a huge spending category. Everything else is really reasonable. YMCA that, that subscription was $45. That's a great one. And then just other random entertainment for a family of five.
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G
Yeah.
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E
To tally up to 125. Not huge. Transportation and gas 200. They're subscribed to Apple and Netflix for a total of $20. So the big glaring piece here is primarily that miscellaneous budget. And if we look down to the
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C
total spend 9,160 of a $7,300 budget.
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E
So it makes sense that things are being put on the credit card.
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C
Yeah.
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E
That we've got some revolving credit card debt here. And I think one of the things potentially tripping this up like why isn't this working is Miranda's part time temporary job. That does help to put it over. Like if we were to bring that back in then yeah, fine, you're not overspending that month but you also don't have anything left over. But also that temporary job is temporary.
- [13:19]
C
Right. And so, and we'll, we'll get to that. But like so here's what they're currently doing. So that, that's what they are doing. Here's what they are plan. This is their like budget, their plan, what they say they're doing. And so right now like Jill said, they have about 8,000 in emergency fund savings. They want to get up to 20,000. That's great. I would even say for a family of five it could be even more. But I would say 10, 15, I would say 30,000. Anywhere between 20 and 30 fixed expenses you can, you can see are 5,700. And I'm going to say I'm seeing a pattern of tracking that's not super specific. So I'm going to probably round and it's easier to track fixed spending but you also have to take into account other like annual expenses and break those down monthly too. So always going to give us some, a couple hundred dollars wiggle room on fixed. So I'm just going to round that up to 6000, which leaves 13 to 1400 dollars a month for variable expenses. And, and they know that. So, so what they have been doing is with the fourteen hundred dollars a month that they should have for variable expenses, they have been putting 700 towards debt and $700 towards everything else. And that's been the budget. The thing is, and the problem that Miranda wrote to us is that they always overspend on that $700. And so then they're going back into credit card debt. And what, what you're doing here is you're putting $700 towards a credit card and then putting $700 of spending back, right back onto the credit card. Because there's a disconnect between what the budget should be and like, oh, this seems like a good reasonable budget versus what the budget should be in reality, what is in reality, a budget is a reflection of what and how you spend. And something that I got, I pulled a couple quotes from Miranda that when I asked about budgeting, this is what she said. We just haven't found a budget plan that works for us. And I think the restrictive nature of them causes us to overspend because we do have those impulsive tendencies with money. We're trying different habit changes which are slowly working, but we really need a budget plan that can support our impulses purchases. And I think that right there, I think, is the core of what we are getting at, the restrictive nature of budgets. The reason budgets have this restrictive nature connotation is because we make restrictive budgets, because we've listened to gurus and influencers tell us that we need to be spending as little as possible. Beans and rice, rice and beans in order to succeed, succeed financially. And so we have this preconceived notion of what a budget should be, and that's restrictive. And so then they have a restrictive nature and that causes us to impulse bend. No, it doesn't. We are impulsive beings. We are human beings with impulsive tendencies. And the more tired, the more stress we get, the more kids we have, the more those tendencies come out. It doesn't have to do with the budget. It has to do with you being a human and having a brain that impulsive tendencies come out. And so it's not the budget's fault. And so what I think we really need to do is really get at what the real problem is. And that's the disconnect from reality.
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E
Yeah, I mean, I think there's restriction attached to budgeting not just because of how we view it, but also the very real reality that there is a limit, there is a restriction. At some point the budget does need to be based off of what we bring in. That doesn't mean that we can't change what we bring in. But before we jump to oh, I just need to bring in more, we do need to look at the spending and making sure that that is rightly ordered in a way that does allow for some of that impulsivity, some of that just being human, the fun, the entertainment, the, the tinkering, the projects that could there be a world where we could do this? But we're not going into credit card debt every month.
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H
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E
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E
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- [19:32]
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We talk a lot about having a meal rotation. Those six to 10 dinners you can make without thinking. But getting there is the part nobody talks about. You're tired midweek, you don't know what to cook, and somehow you're also supposed to plan everything out, go shopping and
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F
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C
So I don't think that a lack of discipline or budgets being restrictive or you being an impulsive person is the problem. I don't think. I mean, impulse impulsivity is not a personality trait. Like, we all have impulsive tendencies. What we need to do is figure out barriers to reduce our propensity to give in to the impulsive tendencies. Like that's what we are looking to do. I think the real problem in this budget is fantasy budgeting. And we have, when we talk about, when I say fantasy budgeting, it might lead to like, oh, I'm budgeting for fantasy things like vacations and all that. I think the fantasy here is that you can afford to pay off debt because right now with how you're spending, you can't afford to pay off debt that's not in the cards for you. So that's like probably the first thing to stop. And I know like, people are going to be like, oh my gosh, you're telling her to stop paying off debt. And I'm like, I'm saying, like, you have a wound that is like slightly gushing blood. Like, we're not going to the er, right? But we do have a wound that's bleeding and we need to stop the
- [21:58]
E
bleeding because you can't be in a debt payoff journey when you're still accumulating debt, right? And I mean, I mean, yes, you can have a house, you can purchase a house during a debt payoff journey. But I mean, the things that are going on the credit card, like, we, we can't, it's coming in one side, going out the other, and it's, it's not working. And we see that like your numbers are showing kind of what you're describing of the rub of what is going on here. I think another issue here, and this is going to sound counter to other
- [22:36]
C
things we've said, right?
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E
So now we're kind of like just pause on the, on the debt payoff goal because there's other things we've got to get in order before we can even focus on debt payoff. Yeah, that is something we're saying. Something else we've said in the past is to keep your budgeting, your spending plan categories super simple. I do still believe that, but in this particular circumstance, it's far too broad. We don't fully know, even Jen and I, after having received some of this information from Miranda, where it's all going. Because there's one huge miscellaneous budget that is bigger than any other things other than housing.
- [23:16]
C
It's $1,700 per month when you've only budgeted $1,400 for like discretionary. Discretionary. Yeah. Like groceries. Right? Right.
- [23:30]
E
Yeah, yeah. When. When your groceries in total are 1,300 and your childcare is 1400 and miscellaneous just 1700. What? What is it? So I do think specifically for you and potentially others of us who are uncertain what's happening with our spending, there might be a time frame where we do have to be a lot more specific. And the 90 day transaction inventory does help us with that. I know Miranda did do this, although we didn't see the full breakdown of the 90 day, just the summary. So I think for Miranda, for others to look through, what are these? If I could put them into three to four subcategories, what would they be? Is it primarily tools and materials? Is it primarily snacks? Is it primarily just impulse purchases? Who is the person primarily making the purchase? Is it. Is it Miranda? Is it Josh? Is it potentially prompted by the kids?
- [24:29]
F
Right.
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E
All of these different things, as we niche down a little bit more, will be more telling and will provide us a bit more clarity. So I think that's a big gaping part here is we still don't have enough clarity.
- [24:45]
C
When you are trying to figure out where your impulse spending leaks are, you need to get super granular. You need to look at every single transaction. It's not easy. You may not be able to do a 90 day transaction inventory in one day. You probably shouldn't. It should probably be something where you're doing like a month at a time over three days and then you're going back and you're looking at all 90 days together. I want to see every single discretionary expense with a note next to it being like, okay, I was. This is a gas station snack. I bought it because I was hungry. I didn't plan my eating well that day, so I. And I was out all day, so I had to, to get something. And what could I do to prevent that? Well, I could spend more money at the grocery store to buy shelf stable snacks that I can either Leave in my car. I leave a couple in my car, but not too many because I don't want the kids to eat all through them, you know, in the whole box in one drive. And I, you know, ration them out. I make sure I'm keeping snacks in my bag. I'm keeping snacks in the glove compartment, in a box in the back. Snacks are. I'm describing my own life right now. Snacks are everywhere. So that if I don't plan well on a day, I am not spending that money on snacks. And so that's just one example of things we need to get really specific. Specific in our budget so that we can fix. You can't improve what you haven't tracked.
- [26:36]
E
Yeah. And I think another big issue that we're seeing in this budget is not having any sort of system for how impulsive purchases are going to be made. Because here's the thing. Impulsive purpose spending will happen. We both impulse spend every month, every week, every single month, without fail, there is something impulsive that gets purchased. Here's the thing, we have made room for that to happen. There is a buffer. For example, when I go to the grocery store, that's a main place where a lot of us impulse spend, I tell myself I am allowed three purchases of an item that is not already on the list. So that's a. That's a strategy to allow for impulsivity. And I think without that, without that in the plan, it can feel restrictive or we just go nutso because we have no strategy for in what ways am I going to allow my human impulsivity to be able to have an outlet?
- [27:47]
C
And I think one of the things, the struggles without a budget is that there's this anxiety around money to where if you make one impulse spend, you don't know how far you've strayed from the quote unquote budget. So then it's like, okay, well then I can just make all of them because I've already deviated. So I can just go off the rails with all the impulse spending and then I'll try again next month or I'll try again later or I'm incapable.
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J
Yeah.
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C
And that's not it. We need to build a budget that is based in reality. And so the something I wrote here after reading this is your money is going to go somewhere. You can either let it go impulsively, feel the temporary dopamine and the enduring guilt, or you can tell it where to go. And nobody decides where it goes but you and Miranda and Josh and you listening like nobody no guru, no finance influencer, no one can tell you how to spend your money if you want to continue to go into debt. And you budget for that, that is a budget you can make and you have. There's freedom. When I figured out, like, in my mid-30s, like, I can literally do whatever I want. Like, I have permission to do whatever. If the bag of chips says one serving is five chips, I can eat 10 chips. I can have two servings if I want. Right. Like, that sounds silly, but it is. This kind of mindset shift. Like, a budget doesn't have to mean you pay off debt. A budget could mean you're budgeting to go more in debt. Right. A budget is an intentional way that you spend your money. And ideally, we use a budget to make better financial decisions to head in a better direction financially. But that's not the budget's responsibility. That's our responsibility and the way we make the budget.
- [29:56]
E
Yeah. So in that way, it doesn't have to be the budget that's restrictive. It can be us who is deciding what are my boundary lines, Because I do have goals and things that I value. And so how am I going to get there and not just look at this arbitrary external thing as something that is restricting us? No. We are responsible for our own selves. We can decide what is and isn't okay and choose for it not to be restrictive or depriving. But yeah, sometimes some sacrifice along the way to be able to achieve some of those goals.
- [30:33]
C
Yeah. And for Miranda and Josh specifically, I think you have these. This budget sounds like you have this idea of what a budget should and shouldn't be like, you know, $700 a month towards debt sounds reasonable. Because we're not 100% sure what we should be doing at all. And I think you, you need to really focus on reality and separating the budget from this preconceived notion.
- [31:00]
E
So here's some next steps, things that we're thinking. And before we dive in, I do just want to show what the budget would have to be in order to not go into debt every month. And this isn't. I am not saying. I am not setting your budget right. This is not a. Now just take this and go. Because we'd love to say, don't. We don't start with the math. We need to start with all these other things that we're saying. But I think to bring this into reality, it's important to see where the spending actually kind of needs to be just to break even, because we're not really Going to change any of these fixed expenses. The house was just bought. This is what the utilities are. You have to have insurance. You have to keep making the minimum payments, at least on the car and the atv. You got to care for your kids. And there it is. So there is still only 13 to 1400 dollars left over for discretionary. And if we only want to break even, this is about what we're looking at. As you can see, we are significantly trimming. I'm not sure how realistic this is, but that's kind of the point of, of where we're at. This is some of the reality check that we need here. That we cannot be spending really more than 1,000 doll, more than 70 on activities, more than 300 on miscellaneous or impulse spending, 200 on transportation just to meet that $7,300 a month. And so maybe, hopefully this kind of makes you feel like, oh, okay. That's why I feel like why isn't my budget working for me? Because it's kind of not enough.
- [32:47]
C
Yeah. And you know what you have, you are budgeting every month to not go over budget, but the practices are not supporting that. And so that's why we made this typical budget to kind of, you know, give an example, give a picture to it. But like if this was going to help, you'd already be doing it. And so I.
- [33:15]
E
Right. You can't just take this and start implementing because there's all sorts of other behaviors around this. It is worth stating just for people watching, this isn't necessarily something, Miranda, you can dive into here, but this rent, mortgage. Sorry, it's just a mortgage is pretty high given the amount of take home pay that you all have every month. So for somebody watching, this level of mortgage would not be recommended. It can be doable. Like Miranda, I don't think that you're in an an awful situation here, but this is taking up a significant portion of your money. Not to mention both the car and the ATV loans. Yeah, we both have, have had car loans in the past. We get it. That's kind of unavoidable. The ATV loan, we would qualify as more a luxury item. There's nothing bad or like wrong about this, but it is putting that fixed expense expenses into a, a place where it's going to make your variable expenses feel really pinched. It's why it feels like there's so much restriction because we've locked ourselves into such high amounts of payments. Here's the thing, you can keep that atv, but it will be a trade off. This ATV is what you are choosing is your monthly entertainment. And so that really then needs to significantly reduce. If we're not going to be bringing in any extra money, then it significantly needs to reduce how much money is being spent on the other side of the house.
- [34:57]
C
You need to be riding on or working on that ATV every weekend instead of doing the other entertainment things that have been in your budget. You know, like. But you are a family that values being outside, so that shouldn't feel restrictive. If it does, then we rethink should we be owning an ATV that is over $10,000.
- [35:22]
E
There is an option here. If rubber ever were to meet the road on this one of selling the atv, I don't know what all the numbers of that would be, whether or not there'd be a break even, whether or not you could make any money off of it. But if finances were very, very tight, this is one of those things that we would say, okay, is there a way to potentially drop this off the budget, free up that monthly income towards other things?
- [35:50]
C
Honestly, until your last child is in school and you don't have that daycare payment, there are a lot of things that we would like to buy and pay for and have plans to pay for, but we cannot do it yet because we still have a child in daycare and that has kind of been our like this money. We value childcare, we value this and we need this and we're going to pay for it. But it means we don't get to buy this or have this service. And that's okay because we know once this expense ends, then we can have that.
- [36:27]
E
And there you go. It could mean we're not able to pay off debt. If nothing else changes in our income. We can't pay off debt until our last child is in school. That might be a reality for some people. Not. Not ideal. I am not saying that that's ideal for you.
- [36:42]
C
And that's why we're doing this budget makeover, because we want to give you some next steps. So hopefully that won't be the case for you. But you have to live in reality if, if you're going to settle. Like, I'm an impulsive person and I want to make impulse spending like I want to impulse spend. Like that's the trade off. Like I want my atv, I want to also do my entertainment things. That's the trade off. If you want to do both, you can't also pay off debt because you don't have enough income for all of them.
- [37:11]
E
Always an opportunity cost. You just have to pick what it's going to be all right.
- [37:17]
C
So let's dive into these, these three steps. That would be what we would tell Miranda and Josh and then also you listening what to do next. And then also we'll deal with the $5,000 from Miranda's job. First, dive into your 90 day transaction inventory. I think you did one, but I don't think you dove into it. And that is the biggest mistake that we see with people who do a 90 day transaction inventory. They list out all of the transactions and they look at it and they will get the numbers together but they don't do that's you're making a hindsight budget, you're making a budget for the last three months and that does nothing for you. What the magic in a 90 day transaction inventory is is the depth in which you look at the data and you are looking at the reasoning for the purchases, you're looking at the solutions. Did this meet my value like I thought I would or did? Was this a surprise value you're dissecting and you don't have to do it with your fixed expenses if you don't want. I would still make notes of, you know, called to get this lowered and stuff. But we really first want to look at your impulse purchases because that's your biggest struggle. And then we can do the other purchases as we go down the line. But you really need to dive into that 90 day transaction inventory.
- [38:54]
E
The next thing that we're going to recommend, brace yourself a no spend month for a full month. We really do think that that's necessary for this particular situation. And anybody who feels similarly to Miranda in not sure where all of the leaks quite are and some money is getting put on credit cards, then we need a full month to really get our bearings. Because not only does a no spend month help us financially, but what it mostly does is teach us more about ourselves. When we are going for the credit card, when we are looking to spend to solve a problem, what types of conveniences are we reaching for, can highlight the things that we value, can force us to be creative and problem solve and it can rein in some of this impulsivity. Again, not that it's a bad thing, we can plan for it, but sometimes that impulsivity has just run rampant and we are being controlled by it rather than the other way around. And so I think being able to find that, that radical middle, it'll help us to be able to rein that in something that I think is going to be highlighted in this particular situation. With a no spend Challenge is the projects. And I cannot again relate to this enough, given that we renovated our house for something like four years.
- [40:32]
C
Same. We also renovated. We're still renovating.
- [40:35]
E
Right.
- [40:36]
C
Four years later.
- [40:37]
E
Exactly. It was an ongoing project. So I totally understand the project thing. What can happen. At least what happened for me, and I imagine I'm not that unusual in this regard, is I've opened the door. I've said, I'm going to do this project. Here's what I think it's going to cost. And I'm buying all the things. And I have now formed a habit of purchasing. I've allowed myself to do it because there is, you know, some degree of a need to close this gap, finish this project. But now I'm used to spending and now this project has led to another project and now I just keep going with the spending and there's now no end in sight. I've never given myself a parameter or a metric for when I'm going to get a pulse on it again and say, wait, have I wrapped up that project? Is it done? Do I have to start another project? How necessary is this? I realize I've just become accustomed to spending because I've opened the door to spending. So I'm just letting myself do it because once I close the door, then I'm not going to be allowed to spend anymore. And there's this weird kind of mental thing that's happening. So I think that a no spend challenge could bring this to the surface. It could help to define the enough with projects. But also it can help with creativity because I get it if you keep the ATV and it still needs fixes constantly. There are buy nothing groups for tools. There are places you can buy used parts. There are friends who would be probably willing to come over and help with some of these repairs. I think one of the specifics that was given to us was the purchase of a new tool probably for some project. And I'm thinking, ugh, you could have borrowed that. You could have gotten it for free on a buy nothing group Facebook Marketplace.
- [42:29]
C
Literally. Travis, my husband, had a plumbing issue and needed an auger and went to Facebook Marketplace. There it was. He had it the same day. So it's not. There's stuff all over, all kinds of. And you don't have to be restricted to that, but you can always check first.
- [42:52]
E
You can still be a project person. You can be a tinkering person. You just have to love the library. You've got to love no buy groups. You've got to love Facebook Marketplace. You've got to love and build relationships with your community if you want to maintain this very active lifestyle. But reduce the spending.
- [43:12]
C
Yeah. So that no spend month is going to be super integral. And you both need to participate and you need to tell your kids what you're doing. And you don't need to force it on them, but they need to understand why you're doing it. You're not doing it because you're broke. You're doing it because you want to be better. And you're going to be showing them that sometimes we do uncomfortable things and we do inconvenient things to get better. And that's a great lesson to teach kids. And they're not going to hear it, but they're going to remember it later. So I want to talk about the side job. So, Miranda, you said you had a side job paying $2,500 a month and then later said that that job ends at the end of May, so you really only have it for two months. And so we're not adding that to the budget. We are going to just treat it as a $5,000 windfall. And so we're going to go through this steps of our episode, what to do when you get extra money to figure out what you should do with that extra money. And so the first step is to realize how you got it, why you have it. Honestly, this would be a good place to evaluate your job skills, your job networking, how you got this job, yada yada. Because it would help you guys if you had more money. Either Miranda getting a part time job or Josh getting a higher paying job would really help your family. So we're thinking about that first. Next, we are knocking out high interest debt. So that is the credit card getting rid of that revolving credit card debt. Because you said your credit card is at a 25% APR, you will, you cannot get that in the stock market. Like it is going to kill you to continue to have a revolving debt with a 25% interest rate. And I can see why it makes you uncomfortable, but it really, you really have to embrace that a 25% interest rate on a credit card will kill you financially. And it is what we want to get rid of right off the top. And so 8% for the ATV for me, that's high interest. But we're going to actually roll that into the next one next step, which is fix one problem in your life. And I think the biggest problem in your life right now is that you don't have enough money every month you Want to be able to spend more money. And how do we do that? Well, we need to eliminate an expense. And the quickest way we can do that is paying down the ATV or doing something with the atv, either selling it and just cutting out, you know, breaking even, getting that $200 a month payment out, or we're using the rest, which is a good chunk. You don't have a lot of credit card debt, so paying down that ATV so that you can get that extra $200 a month for spending money, or two, pay off your car if that's what you choose. But you really, I think, do need to spend a hundred percent of the money that you're making from this side job to go towards debt. And that's because you have 8,000 in an emergency fund. Yeah, it's not fully fleshed out, but 8,000 will get you far. Right. You also, we didn't mention, but Josh has va, a monthly stipend from the VA for his service in the military,
- [46:51]
E
which is part of this number. So you didn't exclude it.
- [46:54]
C
Right. But that is income that you can count on. It's not. It's not enough. Right. It's not enough. It's not a lot. So that factors into your emergency fund savings. So that's why I think $8,000 is fine for you right now. But again, 20 to 30,000 is a good idea. Getting more monthly income is a good idea. And putting that 5,000 or any side job you get until the ATV is gone or paid off is also a good idea.
- [47:31]
E
I also want to reiterate the opportunity cost concept that with every single one of these decisions, there is a trade off. You just have to decide what you're willing for that trade off to be and how important prioritization is. Again, when we are not independently wealthy, we do not get to do all of the things all at once. But also we can't. We don't have enough time in the day to do all the things at once. So we don't need to expect the same from our money either. So it is worth listing out all of these goals so that they have a place to go to live, rather than just bouncing around in your head and feeling like, I'm not getting any of these done and I just have so much that I want to be able to do. But then prioritize it between what Jen just said. Yes, get rid of that credit card debt, then get rid of the ATV debt, then get rid of the car debt. Build the emergency fund, think about retirement, think about Children's college savings. Think about what house projects you want to do, but it has to be ordered and it has to be realistic. If nothing changes financially here, you will only be able to do one of those at a time. That's okay. There's nothing wrong with that. It will just take a long amount of time. Jen paid off her debt in two years. It took Eric and I seven years. That had to do with the opportunity costs, the trade offs, the prioritization and the amount of money that we were making. I chose to not find ways to earn more income, but to keep doing what I'm doing but make other sacrifices. You decide what your trade off and sacrifices are going to be while also pursuing these things while still getting to live a fun life with your family. Be outdoorsy, explore projects. But please know that it's not realistic, it's not typical to be able to do them all at once. I'm not just talking to you, Miranda and Josh. I'm talking to all of us. Like none of us can do five different weighty, heavy things with our money. Like one, maybe two at a time. You just decide what those things are going to be.
- [49:55]
C
The important thing is, is that you do something. You don't let the lack of not being able to do everything keep you from doing what you can do and something we can do and to help you.
- [50:09]
E
And we do it every week. And it's all, it's, it's one thing we do because it's the only thing we know how to do. The bill of the week. This is the bill of the Week.
- [50:27]
D
That's right. It's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you paid off your mortgage. Maybe your car died and you're happy to not have to pay that bill anymore. Duck Bills. Buffalo Bills. Bill Clinton. This is the Bill of the Week.
- [50:48]
J
Hello, Jen and Jill. This is Q and I have a Bill of the Week. My Bill of the Week is a subscription or a membership that I utilize as a talent during the year for commercials that I submit for. I pay approximately $30 a month for accessing my portfolio, my resume and my media. But during Black Friday, this company offers a promotion of $100 off of my membership which would normally be approximately 360, $60 for the year. But with their savings or their promotion of a hundred dollars, I save approximately $161 by taking advantage of their Black Friday promotions. And I know that we are somewhat anti Black Friday. I couldn't resist. So this provides me with the opportunity of saving as well as not having that expense for the year. So this is my bill of the week. Love your podcast. Thank you.
- [52:11]
E
This is great. Q. Yeah, honestly, we are not anti Black Friday.
- [52:16]
C
We're not anti the really good sales that do happen on Black Friday. We are anti what Black Friday has become. We nostalgia for the for the old Black Friday.
- [52:29]
E
We are pro getting a deal.
- [52:32]
C
Here's the thing, especially on something that you already use.
- [52:36]
E
We don't love consumerism. We don't love subscriptions. But we are never gonna box ourselves in because we still think this is a great deal. We love to be loosey goosey with it because there is no set black and white subscriptions as a whole. We try to avoid them. The subscriptions that we use, that help us, that keep us organized, that help us to make money. It sounds like this is for a side hustle that makes complete sense. We don't want to do the monthly or we want to do the annually, but only if we're going to fully use it for the entire year. You've proven that you do that. And so when we do spend money, we also want to look at can I get a deal on it? And you asked that question and that question was answered and the answer was yes and you did it. And saving $161 is huge. I'm so curious what you ended up doing with that money. If you end up watching us comment on the YouTube video and tell us what you did with that $161 that you saved. But this is amazing. Well done. Q. If you are listening and have a bill that you want to share if it has to do with something that we typ not spend on, but you've got the unique circumstance where it makes sense to spend on it and we're going to cheer you on. Leave it for us. If your name is Bill, call us up. Frugalfriendspodcast.com Bill, we can't wait to hear what you got for us.
- [54:04]
F
As someone who takes the frugal part of this podcast seriously, Rakuten is one I actually use. They're a web browser extension that allows you to earn cash back and rewards on purchases you're already making, like travel on Expedia or VRBO food for your pet through chewy or everyday stuff at Target or Instacart. It covers so much ground.
- [54:24]
I
And here's the part that really gets me you can stack your cash back on top of existing sales and coupons so you're not choosing between deals, you're layering them and you can redeem your cash back through a check, PayPal, gift cards, built points, or if you're an eligible AMEX cardholder, membership rewards points instead.
- [54:41]
C
Terms apply.
- [54:42]
F
Rakuten gets paid to bring shoppers to partner stores and they pass some of that revenue back to you. So it's genuinely free to join using
- [54:50]
E
your email and you're immediately earning on the things you'd buy anyway.
- [54:54]
I
Head to frugalfriendspodcast.com rakuten or download the app to join for free and start saving today. That's frugalfriendspodcast.com R A K U T E N Go for it.
- [55:06]
H
I've been doing a serious spring closet reset lately.
- [55:10]
C
Like actually looking at what I own
- [55:11]
H
and asking does this work? Is this quality? Do I actually reach for this item? And it has me thinking so differently
- [55:19]
C
about what I buy going forward.
- [55:21]
G
That's why we both love quints. They make beautiful everyday pieces using fabrics like 100 European linen, organic cotton, super soft denim, creating styles that feel elevated without the high price tags. They work directly with ethical factories and cut out the middlemen. So you're paying for the quality, not the brand markup, which is just smart spending.
- [55:44]
H
I have been living in their 100% organic cotton tanks lately. The fabric feels substantial but still so easy and comfy to wear and when I saw the price I genuinely had to double check. They also have leather bags made from 100% hand woven Italian leather that look way more expensive than they are.
- [56:03]
G
Refresh your spring wardrobe with quints. Go to quint.comfrugal for free shipping and 365 day returns. Now available in Canada too. Go to q-u I n c e.comfrugal for free Shipping and 365 day returns.
- [56:20]
E
Quince.comfrugal and now it's time for the lighting crowd.
- [56:28]
C
All right, what's a hidden strength in how Miranda and Josh are managing their money? And I saw this right off the bat is that they're both in it. They're both quote unquote impulsive, but they are both willing to be thinking about money. It's not one person carrying the budget and one person just out there impulse spending. They're both in it. They're both overspending. And so I think that if you can both come together in looking at the 90 day transaction inventory and participating in the no spend month, I think you will see some really good habit changes. And I know you said habit change they were coming slowly. So I think that's this is where we, if we want to get to our new radical middle or move the needle a little bit faster is where we visit the extremes. And that's what a no spend challenge is, is we visit an extreme so that we can move our habit formation in the right direction a little faster.
- [57:40]
E
Just based on the lifestyle that is apparent in the numbers that came to us. I see a lot of grit, creativity, problem solving, fun. Like these things exist for Miranda and Josh and their kids. They're outdoorsy, they like to do a lot of things together and projects. Yeah, that means that you're a DIYer, you know how to see something and find a solution and implement that solution. So I think there just needs to be an unlock of how to translate that into the budget, into the spending plan, because you are very well versed in identifying this needs to be fixed. Here's how we fix it with very hands on tangible things. So if you can implement that same kind of mindset here, I think you will do very well. You clearly do have the problem solving. I'm a fix it skill set. So that's a beautiful thing. And you're aware of it, you've looked at it, you've come to us, you've submitted this. So I think the ability to make some of those tweaks and changes is right there.
- [58:58]
C
Yeah, it's so close. So thank you so much for listening. I hope this was helpful. Let us know in the comments on YouTube if you found this helpful. If you'd like to see more of them, please let us know. Miranda read our book and so she had a good starting off point. And I hope if you've read our book, you've left a review on Amazon like this one from Tarek, five stars says read this book. I've had the displeasure of reading a few books in the past that guide you on how to manage money or be more smart with your money, but it always left me feeling more dejected than inspired. I can honestly say that this book left me feeling like getting control of my finances and improving my spending habits was attainable. I loved the pop culture references used throughout the book, from chapter titles to sayings sprinkled through the book. I also enjoyed the way the authors included scenarios of people they knew who had money issues, akin to the section at hand, which made it easier to digest knowing others had been there and got themselves to a better place using the tools provided in the book.
- [60:05]
E
Oh, that's a good one. Yeah, I haven't heard many people reference the stories we say throughout and I. And there are, there are because we need examples. We are always need examples. So we give them. And I'm really glad that that was helpful for you. Tarek. If you are listening and you have read the book and you haven't reviewed it yet, please do so on Amazon. That'd be the most helpful place. And if you're just listening or watching, Please subscribe to YouTube. We'd love to get to 10,000 by the time it's Jen's birthday on May 9th. Thank you. Love you. See you next time.
- [60:38]
C
Frugal Friends is produced by Eric Sirianni. I have been excited for this episode because it feels akin to the spending interventions we used to do. We did a few times but logistically those were just difficult to do.
- [61:10]
E
People I think just didn't want to attach their faces.
- [61:12]
C
Right. I love this because nobody, yeah, it can be pretty anonymous with still being very helpful and I hope it, I hope that does come across.
- [61:26]
E
I love it so much too because there's only so much I can say about my circumstances. There's only so many examples of you and I can give about what we've experienced, what we're currently experiencing and to be able to continuously put what we say into practice of is this still relevant for this person? Okay, but how would this apply in this scenario? And I think it keeps us on our feet, but I find it so helpful too. Like okay, now with a real life example, what would we say? What could be tweaked here? I hope people like it because I, I, I love digging into stuff like this.
- [62:09]
C
And this is what we're going to be doing as certified financial planners when we do pass, when we pass in July from CFPs.
- [62:20]
E
And then we can say that we are doing it not just for entertainment.
- [62:24]
C
Well, on the show it will always be for entertainment. Right. But we then can also in addition do it for non entertainment, which will be fun.
- [62:33]
E
So true.
- [62:35]
J
Okay, let's have a snack.
- [62:37]
C
Yeah.