How to Simplify Your Budget With Separate Accounts, Automation and Your Bank App | Reair: Ambitious Time Management Strategies for Working Moms with Kristen Edwards | 571

0:00Hey, budget besties. We recently had this conversation on another podcast and it was too good not to share here too. Yeah. We hope you enjoy it. There is a lot of noise in the finance world. There's a lot of noise in the budget and there's a lot of shoulds. There's a lot of, you have to do it this way. There's a lot of cookie cutter budgets and percentages and stuff. None of that makes sense to the average person when they go to actually do a budget. And what do I do with my hands now? Nobody taught you how to budget. And then whatever you do try to read, is this a fixed or variable expense? I don't know.

0:28Doesn't matter. What does that even mean? Your bank can be your personal assistant. It can be doing all of this stuff for you. You can be reaching all your financial goals without you having to do anything. And so when you log on to your bank app, groceries, and you see exactly how much you have for groceries. And you know that if you go buy groceries, your bills are in this other account protected. They're not going to get messed up. You don't have to give up your pumpkin spice lattes. You can be on a budget and you can have, you can enjoy your life. Both things can be true at the same time. Do you make good money but have nothing to show for it?

0:58Are 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? If you don't already know how to budget, or if you're using credit cards to get through the money. If you want to seem like you have your finances all together, or you're not on the same page with your spouse when 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.

1:30We'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. We 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.

2:02And 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. There is a lot of noise in the finance world. There's a lot of noise in the budget and there's a lot of shoulds. There's a lot of you have to do it this way. There's a lot of cookie cutter other budgets and percentages and stuff. And none of that makes sense to the average person when they go to actually do a budget. And what do I do with my hands now? So we developed it to not only just be a really simple budget, but an automatic budget system so that everything that you set the attention with, it can happen automatically so that you can go to practice and to volleyball and do all the things that you want to do and not have to spend all this time and energy on the actual budgeting.

2:43Kristen Edwards:Yeah. And we keep talking about Fuji on a budget and the systems and what that means. I'd love for you really to unpack some of that, maybe some foundational strategies or tips that you're typically giving people as they choose to work with you. Sure. You can put numbers and words on paper and call it a budget, but unless there's something that you're doing with that, it's not helpful. So what we've come up with is the first thing as a budget, that's literally five columns. That's all we talk about is you list your income, you list your debts, your bills, your spending and your savings. And that's it.

3:15If you're thinking about how you handle your money and what do you do with your hands throughout the month, those are the five categories of how your money is handled. And so in being able to see it all on one page, it makes it easy, makes it simple, makes it so it's not scary. You can look at it. And there's other budgets out there. We tried to use them, the fix and variable and all these weird terms that nobody actually knows what that means and why they're categorized that way. You're either spending money or you're paying a bill or you're saving it. Like those are the three things that you're doing.

3:44Yeah. So that's the first step that we, we talk about is simplify and our budget is very simple and it matches what you do with your hands, with your money. And that when Vanessa was talking about, nobody taught you how to budget. And then whatever you do try to read is, is this a fixed or variable expense? I don't know. What does that even mean? Okay. A bill is anything with a due date done. Okay. And when I go to the grocery store, I'm swiping money. I'm spending money, right? When I'm going to ice cream with the kids, I'm spending money. And then obviously, like Vanessa said, the other component is saving.

4:13And that's it. It's very simple. We know exactly what we're doing with our money. And it really gives you a clear picture of what your money is, what is going on with your money. So that's the first step. And then the second one that we say is to separate your accounts. So when we were talking earlier about cash and Dave, and you used to have cash envelopes, or maybe you had tin cans, or your grandma had jars or whatever, and this money goes in this one, and this one goes in that one. Okay, what we're talking about, we're going into the modern age, right? We're using digital tools to make our lives easier.

4:43Your bank can do all of this for you. So we want you to have separate accounts. And believe us, it sounds maybe a little, we hear a little pushback, it sounds a little overwhelming, but actually it's really simple. You're gonna have separate spending accounts and separate savings accounts and your bills are gonna be in their own account. And so when you log on to your bank app, groceries, and you see exactly how much you have for groceries, and you know that if you go buy groceries, your bills are in this other account protected. They're not going to get messed up, all of that. And so you have different accounts and then separating.

5:11It's kind of like a digital version of the cash envelope. Yeah. Think about this old day where you have the cash. Now we're moving into the new day where you have everything is digital and you don't need another app. So we hear all the time, what app do I have to get to manage and track all this? The beauty about our system is that you don't need another app. You already have your bank app done. That's all you need. Okay. And having separate accounts reduces the decision anxiety or the requirement to track anything. So that's the other thing is we don't have time. We're all very busy. We're running businesses.

5:43We're moms. This idea or concept to track all of your expenses or to track everything that you're buying throughout the month, nobody wants to do that. Nobody has time. But unfortunately, to a lot of people, that is what budgeting is. They think in order to budget properly, they have to track down to the penny how much they spend on gas and groceries throughout the month. None of us care. We don't care. We just care. Did you transfer the money into those separate accounts? Great. Have a blast. Go spend all the money in those accounts because that's what they were meant. They were transferred over there to do was to spend.

6:14And then everything over here was either to save or to pay a bill. And so that's the idea of the separation part of it. And again, like Shana alluded to, some people come and hold on. You just said the word simplify. And then you said separate. How is opening more accounts simplifying it? It is. We have a lot of people who at the beginning don't understand. And then it's the husbands who come to us and say, this is the best thing ever because I did not realize how much clarity and simplification it was going to bring to our finances by just separating some money around. Yeah. Because a lot of people are using one account to do everything.

6:46And that means you have to go through and track and think and, and do math in public, like in a checkout line. Um, no, thank you. So that's why we're separating it. Cause over here, all this account, the only thing that's going to happen is my bills. And that's very easy to look. You usually have 20 bills, maybe total, right? So your income's going in there and your bills are coming out. It's very simple. And then we want you to do have those separate accounts. You have your own personal spending account. And if you have a spouse and he has his own as well. And then you guys don't have to fight about anything.

7:13Everybody has their own money. It's wonderful. You have your groceries account. You know how much is there. And then we always talk about, we want you to, and we can get into kids. We have a lot to say about kids and finances, but they, you'll have an account for them because you know what happens is your money gets stolen by them all the time. And we want you to know that you have money, the kids have money for what they need to do. And you don't have to, you don't have to try to scramble and find money in every different purchasing moment, because it's all been planned and separated. Yeah. And the very last thing, so that was that one, that was two of them.

7:42So the very last third thing that we would say is to automate. So, you know, you have just this wonderful bank that you use that allows for automatic transfers that people don't realize and they, they allow for reoccurring automatic transfers. So the idea is to make your budget and say, okay, how much do I need for gas and groceries? How much do I need for the kids? How much money do I want to spend on myself a month? How much are we saving? So you're making these decisions and then you're sitting and you're using the tools that are already readily available to you by your bank and just setting everything up automatically.

8:12For instance, my husband gets paid every Wednesday, Thursday morning, all of my transfers, everything happens. And I didn't do anything. I don't have to lift a finger because I've already set the systems in place to help me be successful. And my grocery money is always there. Replenish my pocket, my like everything, the kids is like, it's all done. Yeah.

8:30Kristen Edwards:I'm always a fan of having those three words. And so for you to simplify, to separate into those separate accounts, then automate a lot of that work also means that you're not doing it every single week. So you can go in and check it as much as you want. But once you've taken that time to set things up, you're good. And you're not thinking about how much time you can go back to watching TV or doom scrolling on Instagram or whatever it might be instead of crunching numbers. And I know by default, people are scared of numbers. It's not that bad guys, but it's when you actually take that time upfront to build a system, to have a plan in place, it also makes a lot of it less scary.

9:13Kristen Edwards:Do we have enough money to pay the mortgage and keep the lights on and still get pizza? When you have those accounts set up, you can see it pretty easily if you do or don't. As I was listening to you talk, I remember, I think it was in my early twenties, like probably my first or second job. I literally have a line item for coffee in my budget. Like I want Starbucks and Dunk. I live in the Northeast, so both Starbucks and Dunkin, but I want it all the time. And so literally carving out, here's a portion of my money that is for me to basically throw away. Yes. I know I can make coffee at home, but it was something that was important to me.

9:48Kristen Edwards:And so I love that you're saying whether it's travel sports or an actual vacation, no, they're not the same, even though it feels like it. Yes. Those are separate things, even though the hotel cost looks the same, but at the same time, if it's the spa, luxe, beautiful life. If it's spending too much money at Hobby Lobby, TJ Maxx and home goods to decorate your house every season or all the seasons in between the seasons. Your pumpkin spice latte. Can we just do it all? Let's go right now. All the things, right. But figuring out, all right, my bills are paid. Here's that, I'll call it play money that I get to go do whatever makes it fun or gives me that joy and spark in my happiness as well.

10:31Kristen Edwards:But I love that you're saying, here's this upfront system that you can put in place. And I actually appreciate that there's not a separate envelope for the light bill separate from the gas bill separate from the water heater. And like 10 other things, you're like bills, put them over here. As long as the bills are paid, then I can go see, you know, what else that looks like. 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. It's going to allow you to be bougie on a budget.

11:04You'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. 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 And if you're already a budget nerd like us, you're about to meet your new obsession. This is the upgrade to your finances that you need.

11:37Now back to today's show.

11:39Kristen Edwards:And you started to talk about kids. So I actually want to go there next. I think when kids are hearing about these budget decisions, they don't need the nitty gritty, but just high level, like we've had pizza three times this month, we're done. To understand that also teaches them levels of budget. So even if they're not working and they're not financially responsible, they're starting to learn how these decisions get made. And I honestly feel like that's why so many of us are struggling now. It's because we were like, there either was money or there wasn't. And I have no idea how it got there.

12:10Kristen Edwards:And so for these kids to actually have a heads up that by the time they're responsible for paying for their own pizza or whatever it might be, that they actually can think about these systems earlier. Yeah. Yeah. So the same thing that you said about Dunkin' or coffee or whatever you called it on your line item, you're going to have a line item for your kids and it's going to be underspending, okay? Because they're always trying to spend your money and we love them so much. And it evolves as they get older. So when we start off, generally, you're going to have one kid's line item and it's going to be a general budget for them because you, we, and we are going to teach you with savings buckets exactly how to plan for all the things that are not monthly, which are the unexpected expenses that derail your budget usually.

12:51but in general for kids we know they're going to say hey my kids my friends and i want to go get ice cream or tonight our kids my kids are going to the fear forest whatever that is they're going to come up with these ways to spend your money we're going to have a line item one line item in the budget that says that this is how much we have and like to your point once you're done with it you're done with it but it allows them the idea like we're we're budgeting 50 bucks for you to do all the things you're going to do a month when you get to decide what you want to do and that way it's on them and they can start to learn how to budget and how to manage time and money and what they want to do.

13:23But it, and it takes some of that pressure off of you, but so that's the first one. And then it evolves as they get older, but we're really big on bringing the kids in on the conversation and having that correct conversation, the correct vocabulary and the correct language of when you speak about it, because it is important. If we grew up with money baggage, we don't want our kids to grow up with money baggage, but, and we don't, so we don't want going to create another one of us, but it allows us to bring it in a healthy way to say, Hey, this is what we've budgeted. Maybe you get to decide, right?

13:51So allowing you to create whatever that budget is, and then giving the kids the ability to decide how it's spent. And so all of that pressure is taken away from you. And as they get older, my kids now have their own separate accounts because if she's at volleyball game, he's at a soccer game. They each need, they're all going out to eat afterwards, sometimes not at the same place. So she now has a debit card. He has a debit card. He works for his money. So I don't fund his, but for her, she doesn't work. She's 15. So I do fund hers, right? She gets a certain amount every month that I put in there for her to be able to use when they go to Chick-fil-A or whenever after game.

14:24But also she knows that, Hey, if she wants to go to the outlets for the girlfriend and go shopping, that's also her money. So she has, she's responsible to budget and she knows that she can't go over that. She can't, it's debit card, right? It's not going to go over. It's going to say decline. So it's just, it's a really good way to give them some guardrails.

14:40Kristen Edwards:Yeah. And I think that's the thing, right? If I want a pair of jeans, that's three trips to Chick-fil-A, then I can start to make those decisions for myself. And I love that you're saying even at a young age, they're getting that introduction. I love that you also said having these healthy conversations. It's not dumping your best drama on them, but giving them that heads up and awareness so that they are more prepared as they continue to grow. Yeah. I think so. Instead of saying we can't afford this, We have no money. It's no, like we're broke, whatever. Sometimes we don't realize the things that we're saying in the household, or we're maybe speaking to our spouse that the kids are listening because they're not dumb.

15:17They have ears. So just listen, this is what we've decided as a family. This is where our money is going. This is the budget this month. How do you want to make it work? It's just, you can change your language around that. And so that way they are not weighed down or have this money scarcity mindset. You said earlier, numbers aren't scary. And I think they seem like they are to people, but we've seen over and over when people actually look at their numbers, then they make better decisions. It's not, it's the not knowing and the ethereal and the maybe I have money and maybe I'll just spend it anyway and see what happens and I'll figure it out later.

15:48That is when you make bad decisions. But with adults and kids, what we've seen is when they're looking at their numbers, when they feel like they know, they know what's going on, then they make better decisions. And so our adults do that. They're like way more excited that their savings bucket for the trip that they're taking is building. They get really excited. The same for kids. And I've seen it. I've seen it both with our clients and our personal lives. We're going to do less of the going out to eat or less of grabbing this thing at the gas station or whatever, because I want those jeans or whatever.

16:15So they're going to, it's just really good while they're under your roof, give them some training. That's the best investment you can make in them, not buying them all of these things, not doing all of these things for them, but letting them learn to manage it and do it on their own and make the decisions while they have safety and guard and like Vanessa said guardrails and they're under your roof and if they make a mistake you can help them right because you don't want them to go out for the first time once they're in college and they have to manage everything and they have never really learned how that's that's not what we want for them so my husband if we're talking about kids I'm talking about big kid really quick he went to the grocery store on Wednesday and he said do we even have because we've we have worked at getting our grocery budget down to what we need weekly and it took some time it's not going to happen overnight so we have it down pretty packed and so he said i have to go to the store i have to grab a couple things because we need toilet paper or something and i said let me check the account to make sure we were getting replenished the next morning and i was like babe because let me tell you he loves to go to the store and buy extra things that's what i do yeah for fun i'm like i don't i'm like no that wasn't on the list right so i said babe there's 53 bucks 53 bucks in that grocery account and go have a blast as as long as you get me the three things that i need i'm good yeah because i love that with the guardrails that's great right and it wasn't to say no it wasn't to have a scarcity mindset that if you were, if you have$50 in your account the night before it replenishes, you're really good.

17:34You've budgeted the right way. So it's just knowing that money is there. And if you need a little extra stuff, like there's a little bit left to be able to help you out tomorrow. Yeah. And you can wait till tomorrow for milk. You can wait tomorrow for milk. No one's going to die. Yeah.

17:46Kristen Edwards:Yeah. No, I love that. So many great insights that you've shared. I guess, is there anything else that you wanted to highlight? I think when probably the newest, it's not new, but I think credit cards, a lot of the things that you hear from any strict financial thing is like no credit cards. I would love to hear your philosophy around that. Our philosophy is you make too much money to rely on debt. So most of them we use credit cards because we don't know our numbers. We're not being in charge of our money. We're just using, maybe using a credit card balance as a budget, which it's not, but we want you to get to the point where you're in charge of your money.

18:24You're your own bank, that's what being intentional with your money can do. You can start to save up. So a lot of times, for example, people will want to keep a credit card in case of a pet emergency or something. What if your pet savings bucket has more money in it than your credit limit? That's the goal. And you're going to borrow money from yourself because you're your own bank. That's where we're not, we're not going to shame you about credit cards, but we think that you being like credit cards is not going to build your wealth, right? We want you to work, worry more about your net worth and your credit score.

18:52And that's where we stand. Yeah, I think it's just the mindset of not knowing what's going on with your finances. So feeling like you have to use the credit card and it's just a mind game. So really it's just, Shana said at the beginning, we do not want you to rely on credit cards at all. That shouldn't be a thing. Listen, there is one that I have that I use when I go overseas because there's a zero international transaction fee. Okay, that's the one that I use. I still budget the exact amount that I'm going to use for my vacation. And I know I can't go over that, but my bank charges me a transaction fee.

19:22So I don't use that, my debit card there. So it's just, again, I'm not relying on it. I don't need it. I'm choosing to use it over my debit card in that one situation. But so there's a ton of scenarios, a ton of different situations that we can go over. But the main part is the relying on it.

19:37Kristen Edwards:Yeah, no, I think that's a really helpful way to think about it. It's like the money is still there. I'm using it to avoid the fee or for maybe the rewards or something else, but I'm not using it because I don't have the money. I'm just going to transfer and pay it off afterwards. So I do like that example. I think this is a great conversation. I think whether it is singles, married people, folks with a family, we've covered a lot of the ways to be bougie on a budget. And I definitely appreciate some of the examples that you gave in a very simple and intentional way to do it. But if people are like, all right, I need to know more about these budget besties.

20:16Kristen Edwards:This has been a great conversation. I would love to know that one thing that if they find you on social media or they actually see you in person, like what is the thing you want them to remember you by? I would say it would be to open a separate spending account. Like if there is one thing that you heard from this checking, from this, from the checking, there's one thing you heard from this episode, it would be to open up that separate account for your spending and have your bills over here doing its thing. And then you can spend freely. I think that is the one thing that I think that a lot of clients are, and people just don't, they haven't heard that concept yet before.