How To Set Up Your February Budget: Bills, Spending, and Savings Buckets (Without Tracking Every Dollar) | 519

0:00It's almost Valentine's Day month. No? I know. Already. We're so excited. But listen, it's time to make your February budget. We do this every month. We're so excited to bring you this episode at the end of the month to get you set up for the upcoming month. Yeah. So today we're going to tell you exactly how to set up your February budget, what to put in it, what goals to think about, and give you some insight into what our clients are putting in their budget. So hopefully it helps you jog your memory too. We all need some help. As much help as possible. Is there anything that I forgot? And then you can listen to the episode and be like, yes, I forgot that.

0:30I forgot Valentine's Day. I forgot my husband's birthday. Yeah. Hey, don't forget your husband's birthday. No, don't do that. Pro tip. Okay. All right, let's do it. Do you make good money but have nothing to show for it? Are you tired of living paycheck to paycheck? Do you have big dreams for your financial future? Do you want to get debt free, but you don't want to live on beans and rice? Or you don't want to give up those pumpkin spice lattes? Hey, it's okay if you don't already know how to budget or if you're using credit cards to get through the month. Hey, it's okay if you want to seem like you have your finances all together or you're not on the same page with your spouse.

1:01when it comes to finances. We know what you're doing probably isn't working, but guess what? You're in the right place. We're Shana and Vanessa. We're best friends, business partners, and master financial coaches trained by Dave Ramsey. We've been in business since 2019, helping hundreds of amazing people like you create budgets, get out of debt, stop living paycheck to paycheck, and know exactly what to do with their money. In this podcast, we'll share with you everything we know plus everything we're working on with our clients so that you have the best chance at reaching your financial goals.

1:31We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on the conversation. We can help you no matter where you're at, whether you're the single mom who's never had$500 in her savings account or the millionaire who's paid off four real estate mortgages. And we're not going to shy away from the tough love. We'll tell you what you need to hear and encourage you at the same time. This is the Financial Coaching for Women podcast. All right, Vanessa. So to be very clear, the first thing that we always want people to do, and listen, if you're coming in here today, and this is your very first time making a budget, you can just pause, you can just listen to this.

2:06You don't have to worry about this. But if you've been with us for a minute, you know what we're going to say. The first thing to do before you really start and dig into your February budget is to close out this month's budget. So close out January, right? So you want to go back into your January budget before you start February. And you want to just make sure everything is checked off. Again, we're not tracking anything here. You're checking off to make sure your transfers happened into your spending accounts. And then if you want to go through and just make sure that your bills were, your bills came through your bills account, you're more than welcome to do that.

2:35It's definitely a fun feature. Yeah. And it's, you're just updating amounts. Like currently I'm just clicking for no reason other than the satisfaction of clicking. And Vanessa's thinking I'm going to have to unclick all of those, Shana, because it's just her show budget. Sorry. But the deal is you would be doing this throughout the month. As things go through, you would just click it off. So when you come to January, you're just making sure the last bit, like the last week since you looked at it maybe, is all the same. You can see everything in your bills account. So this is kind of what we have our clients do.

3:00They go in their bills account and they can see every transaction that's happened. They can see all the transfers that definitely happened and all the income, the paychecks that came in. So we just update all that and it's not a big deal and then we move on. And the reason it takes such a small amount of time, Shana, is because the bills account and your spending accounts are all separate. So when you go through your bills account and you're trying to see all the bills that came through for the month, you're looking at what, maybe 12, maybe 20 transactions all through. And it's so easy to check them off and know, yep, all those happened.

3:28The amounts that I said that we're going to drop did, and I can check it off and move on knowing that I'm starting the next month fresh. It's actually really nice. Finally, we'll feel really clear that you are, and that you know what's happening with your money. Everything actually matches and is what you planned. It's amazing. And we actually, listen, we encourage you to listen to these, budget episodes every single month. And the reason why is because we do a budget based on all different kinds of income. So January's income, we did one off$12 ,000. This is February's, we're doing it off of a$7 ,000 income budget.

3:56It's all very different. It doesn't matter, Shana. We've seen it. It doesn't matter how much money you make. It matters how you budget it. We want to show you with a budget, a proper budget, a good budget, what your money can do for you for the month. And again, we've seen it go so far with 20.

4:13We've seen going to go so far with$7 ,000 of income. And so again, we encourage you to join us every single month for these so you can see what your money can do for you. And by the way, you can follow along on the video if you go to budgetbesties.com forward slash February budget. Now, remember, February has two R's. I was just going to say that. Don't forget that extra R. Yeah, and you may not, I think my mom says February. She deliberately doesn't say that R and it's always been a thing for me, but there are two R's. Okay, so budgetbesties.com forward slash February budget, and you can watch us make this budget.

4:43Okay. So first thing is first. Remember our budget is very simple. It's very easy. You can do this. You've got this, like your brain is totally going to understand what's going on. The first column that we're going to fill out is the income. So what is income? Income is anything that you bring in during that month. So we're heading into tax season, maybe your early bird and you got all that done, right? So you have your tax return coming in. Maybe you have, I know my husband gets a dividend February 1st, commissions, bonus, all of that, make sure even yard sale money, right? That you go and you sell stuff.

5:12All of that gets counted as income. Yeah. I'm just, I was just personally laughing at when was the last time I got my tax return. And I remember when I was younger, I would always get in January and then it just has slowly pushed back and knows what's going to happen. But Hey, hopefully at least you're current on your taxes. So here we have some really fun times with this particular couple is that they are, Mike has become pay one paycheck ahead. His first paycheck of the month that he's listing for February is January 30th, right? Not second, not February something, it's January 30th, which means that he has a paycheck ahead.

5:43Good job, Mike. Sarah's doing great. She gets paid on the first. So that's really helpful for their budget. It's like almost fully funded in the beginning of the month. And if you guys got three paychecks in January because there were five weeks, then this is a chance. This is your chance to use February as your catch-up month and make this the month that you are a paycheck ahead. We had a podcast that just came out called Getting a Paycheck Ahead, and it just, I think last week. So go listen to that and you can, it's going to help you figure out how to make your budget so it's a paycheck ahead.

6:11And so for this particular couple, this was the month that they did that. And so this is really exciting. Yeah, and I had a client this month that got, she was able to get a paycheck ahead too, like immediately. It was really exciting to help her see that January she could start that. So anyway, in the income column, you're putting in your, the name of the paycheck or the name of the person earning the paycheck. You're putting the expected amount. You can update that later if it changes, but you want the expected or at least the kind of like the minimum expected you want to put in there. And then we like to have the dates in there.

6:36That way you can check them off as they come in. Oh, I like how you said that, Shana, expected minimum amount of income coming in. Because a lot of people say, my checks fluctuate. What do I put in? You put the bare minimum that you know that you're going to bring in because you want your budget to always work, right? You want to know that you're making a budget and you know it's always going to work on the bare minimum amount of money that you're going to make. So anything above that can go towards savings buckets or it can go towards your goal for the month. Maybe that's paying off debt. but you want to know that your gas and groceries, your minimum debt payments, and your bills are all covered based on the smallest amount of money that you're expected to bring in.

7:08Yeah. And that would work even with commissions, Vanessa. If you might say, okay, I know I'm at least going to get a thousand dollars every month or how it depends on how it works for you because you normally get 2000, but you just want to put a conservative number in there. We are for that. You sometimes you have, you do rely on those for your budget. They can't just be extra. We get that. So just, but we want you to have a baseline budget that you can always count on in the middle and I said that extra can actually go do extra fun things for you. Yeah, absolutely. Okay. So now that we've listed your income, the next thing we want to go to is minimum debt payments.

7:37So we go from the best number of your budget, the black number to everything else is red because it's all subtracting from that. So your minimum debt payments. Yeah. So you will put debt as anything that you owe anyone for any reason. So this is going to be your credit cards, your student loans, your medical debt, perhaps the debt that you owe your mom because you took out a loan from her, your cars, all of that kind of stuff. We don't actually put your mortgage over here. We put that in bills because the mortgage is not usually something you're super focused on paying off. We usually want to get all this little debt first paid off.

8:04So we put it separate. It is in its own column and is just the minimums. We do that for a reason. We want you to see what, like we just talked about, what's your baseline budget look like? What do you have to do every month? We want to know those numbers. And then later we can go back and put anything extra on debt that we might have left over in the budget. Yeah. If you have a car lease, that is a bill. But if you have a car payment, that is a debt. So we had a lady that I had a free call with and she said, do you count medical bills and credit card bills the same? Is all debt considered the same?

8:33And I said, we need to at least acknowledge what all your debts are. So you may decide to pay them in whatever order best serves you and your situation and what you have going on. But if you're making minimum debt payments, you need to list them here because you need to know what's happening with your money. Yeah. And it's important. We list them here because we want you to see it first front and center because debt is optional. Paying your rent, getting gas and groceries, none of that's optional, but the debt is something that can go away from your budget. Really helpful right off the bat to see, for example, this couple, they pay$1 ,700 in debt every month.

9:04Off of a$7 ,600 income. Yeah. So they've got some student loans, they've got some car loans, and they've got some credit cards. And if they can work to get those paid off, they can see very clearly. We would get$1 ,700 back in our budget a month. That's almost as much as one of the makes, you guys. So that's really exciting. And being able to see that gives you clear and clear vision. Yeah, absolutely. Okay. So after you list your minimum debt payments and your income, then we're going to list your bills. A bill is considered anything that is reoccurring that has a due date. So this also includes all of your subscriptions, your utilities, your rent, your insurance, your gym memberships, all of that.

9:42Yeah, subscriptions here. So again, we are not, other budgets are going to distinguish between fixed and variable and needs and wants. We're not doing that. A bill is a bill. It's going to Capitol Hill. No, that's a different kind of bill. I was thinking about a song. Like, how can we make this a little tune? We got to come up with a jingle. But a bill is a bill, whether you want, whether you need it or you want it, doesn't matter. We do have, sometimes we like to put the subscriptions maybe a little lower. You could skip a line and then have all your subscriptions. That way you can just see those all together and kind of make some informed decisions based on that.

10:08But either way, they're all subscriptions. In fact, we had somebody comment in the Facebook group that she was going to add getting her monthly massage, prenatal massage, to her personal spending. And I said, no, that's not what we want to do. We want to keep your bills built and we want to keep your spending separate. Right. So if we're going to sign up for a massage that is monthly reoccurring, we would put it in the bills. All right, Budget Besties, it's time for some Real Talk. You don't need another budget. You need a budget system. Our simplified budget system is what you've been looking for.

10:40It's going to allow you to be bougie on a budget. You'll be able to easily set up a system that runs automatically and shows you exactly where your money is going. And it's going to give you permission to spend. Everybody loves that. Yeah. It's straightforward, pretty, and packed with walkthrough videos that break down the exact methods we use with our clients to get out of debt, set up a bills account, separate spending, build savings buckets, and end the paycheck-to-paycheck feel. If you're new to budgeting, this is the perfect way to jump in. And if you're already a budget nerd like us, you're about to meet your new obsession.

11:13This is the upgrade to your finances that you need right now. Yeah, so head on over to budgetbesties.com forward slash budget and grab yours. Now back to today's show. So now we've got three columns of your budget listed out, right? We have your income, that's$76.80 for the month. We have your minimum debt payments, which they're paying$1 ,975. and we have their monthly reoccurring bills at$2 ,855 a month. And so now we're continuing on the next section of our budget, Shana, is our spending column. Yeah. And then just so you know, they're paying the$1 ,700 because we put that in the extra on debt.

11:49But yeah, so like Vanessa said, they have a good chunk. They have, let's see,$3 ,000 left. And that's what the beauty of our budget is that you can see it as you go. I have$3 ,000 left after I pay all my debts, after I pay all of my bills to divide up between how I want to spend my money and how I want to save my money. That's a great, that's a great amount of information to have on hand. Yeah. I think knowing what your baseline budget is and seeing what it can do for you on paper. That's why we love making a budget. Like it's just so nice. And I think it's so surprising, Shannon, every time we have a new client, we're like, this is your budget.

12:22And they're like, wow, I had a new client this month and she's had our budget system for a while, but she said, you know what? I'm doing something wrong. I need coaching. And we've had only two sessions in and it's mind blowing. Like what I'm teaching her and how to do her budget monthly is so different than what she's been interpreting and how to do it. And we've made so many changes and she's made so much progress in literally one month. Yeah. I do want to put it in a plug for coaching then right there because you guys are amazing. We really love you. We have a wonderful community. We have a wonderful community in Facebook, the podcast listeners, even people on Spotify, the people that came to the bootcamp.

12:54I was watching the video. There's people in there that I've never even seen. There was more dudes hanging out that we didn't even talk to. Oh, we only talked to the one guy. He was the only brave one. But anyway, we have a great group and you guys are trying really hard and we're so thankful to be able to help you. But what we know is when you come with your questions, we're like, we're not teaching well enough or something because there's so much that you guys don't quite get. But when we can walk you through a budget ourselves, like it's just so much different. And some of you are rock stars and you can get it on your own.

13:23But a couple of times we'll come to set up the budget because you've already started it. And like Vanessa said, there's so many epiphany moments, so much clarity that comes with coaching that you just can't get anywhere else or any other way. So I do want to put a plug in for that, budgetbestities.com forward slash coaching. You could get started in February and we will build your budgets with you. We will walk you through every little wonky thing that comes up that you're not sure how to handle. We will help you. And if you try to go book a call and there's not time, email us. We will make time for you because we know how important this is to get your budget set up for the new year.

13:51And I will say also, when I made those changes on that lady's budget and she said, this is amazing. And I said, this is what you pay for when you get private coaching. And she said, it is worth every single penny I'm ever going to spend because just for these moments like this. And so just know that the investment in coaching is it's for your specific situation. When we talk about all this, we're talking generic terms, right? But when we get to work on your budget with your life and your situations and what you have going on, it very much changes and it very much narrows down to what you need.

14:21And it's very specific. Yeah. And I think when you say personal and specific, it reminds me of my clients that I just graduated and they ended their last session. We didn't even really need the session. You guys, I love you so much. So he just, they said questions and then they just spent time talking about how lovely I was. I was like, this is silly or how lovely our system was. And they, what they said is they used to always fight about money. Basically, it was always a hard conversation, one that they weren't looking forward to, one that they were dreading. And now they're both on the same page.

14:49They're both excited. They're both going to crush it. They are so great. I'm so excited to see where they go. But this is a part of bonding for them now as part of their marriage. And that is like a complete turnaround. So when Vanessa says specific to you, like all of it is, it's not just the numbers. It's the intangibles too. Yeah, no, absolutely. Okay, back to budgeting. Sorry. We just, listen, guys, when you are our coaching client, you become family. We love them so much. It is such a fun journey. And we're so honored to be part of it. And so we just, we can't talk enough about how awesome they are.

15:19We're so thankful that God has brought us all of our coaching clients. Yes, we are. Okay, back to spending. So here's something very important for you guys to hear. Spending is what you do, is where you live in the budget. Vanessa likes to say, but we like to put spending in categories, whereas other budgets make you list everything out. I did a budget with somebody for their first budget this week, and she had every different thing that she spent money on listed. I was like, I am getting anxious. I'm anxious, girl. Let's just put this all into your... And it's good to start with. It's good to see.

15:50And then it gives you like a ballpark. But so no, we are doing categories. And the main categories that we recommend, you could add or take away from these, is gas, groceries, family fun, which may be restaurants or entertainment, that might be a different way that you say it. Personal spending for you and your spouse. And then kids is another one that's very popular. Yeah. I think this is really important to hear. A lot of people will put all of their individual line items for the entire month in this section. Don't love that. It's not the point. We are trying to remove you from this tracking era.

16:24And then I say that before, this whole tracking culture that's happening right now of feeling like all these budgeting apps for the new year, having you download this, track that. No, you don't have to do that. That is not what budgeting is about. So if you can decide in your brain that these expenses go into these categories, it's really going to free you from all of that. And it's going to allow you to have these mini budgets for these categories as you spend throughout the month. Yeah. And so how do you come up with those numbers? You can do a spending audit from like last month, last three months and just see generally how much do I spend on groceries?

16:56How much do I spend on gas? You can do that. You can make it educated guess, maybe make it a little higher. Yeah. Buffer that baby. Yeah. And then just go from there because I'm not the one that loves to go back and like track and do stuff like that. So if it was me, I'd be like, Hey, I think we do 1500. And I would just go a month and see if that works. That's what I would do. But you do you boo. But anyway, so you just put these numbers in here and it is based on your budget. There is no right or wrong number for any of the categories, gas, groceries, family, fun, personal spending, kids, none of them are right or wrong.

17:23It's based on one, how you live your life to what your budget can afford and three, what your other goals are. Right. And so for this example, they have$300 for a family fund. So So that means they maybe can go out once or twice, or they can do a lot of little stuff or whatever. The spending money, they get basically 50 bucks a week for the adults in the family, and then they have$100 set aside for kids, which is fine. That's a wonderful, amazing, super doable budget. I think their spending matches their income. So it's very conservative, which is great. And they're also able to do other things with it.

17:52I think it's just really important. And listen, guys, let me tell you, your spending money is non-negotiable. Even if you don't feel like you use it every week, will use it at some point. and do not transfer to your kid's account. Okay. Do not give it to them. Don't say, I don't use it. So I'm going to give it to all them. Don't do that. I just had a client yesterday. I had to talk her down because she said, I'm going to take mine out. I don't need it. And then 10 minutes later, she said, I never have money for mascara or if I want to get makeup. And I'm like, okay, this is why we don't remove our spending money.

18:18We don't give it to our kids. We have to hold ourselves accountable. These are guardrails. We had a lady on our podcast and she said, when you're driving down the interstate and there's a guardrail there, you're thankful that it's there. So you don't go off the road. These are your guardrails. And again, it's not, you're not going to get these numbers, right? If you've never made a budget before, how much money you should put in your family phone or your restaurant eating out account, you may not know, but we're going to start somewhere and we're going to tweak it to find the right number for you.

18:43So you don't feel deprived all the time. So it's not selling money from your other categories. The thing here is you're going to have to get used to having money. It's going to be really weird. Usually you have one account where everything is a mess and you're like hoping that you have enough and you make it, you make it probably like three weeks into the month and you're like, Oh, things are not looking good. Instead, we are going to consistently have money transferring into these specific accounts that are categories. And so you always have money for all the different things. It's going to be a new you.

19:10And that's also why it's important what Vanessa is saying is to have the personal spending is because you've got to start forming a healthy relationship with money. And this is one way to do it. Yeah. And you work hard for your money. You should have some money for yourself. Let's not just give it away to our kids all the time. They ain't working. You're working. You're giving them an allowance, which is awesome. We love that. but you also need to allow yourself some money too. Yeah. 90%. This is my favorite part that, that we probably should shout from the rooftops more, Vanessa. 90 % of your budget will be the exact same every month.