Why Your Budget Keeps Failing—and the Simple System That Helps You Save for Auto Insurance, Property Taxes, Big Bills and Unexpected Expenses | 448

0:00Do you have unexpected big bills that pop up here and there and what feels like randomly and ruin your monthly budget? Yes, we do have that. We do have people who come in and say, listen, I've totally forgot about this bill and I forgot about that bill. And I don't know what to do now with my monthly budget. How do I fix it? So today we're here to talk about what are these unexpected big bills that come through. We're going to label them and give them a name. And we're going to tell you how to budget for them monthly. Do you make good money but have nothing to show for it? Are you tired of living paycheck to paycheck?

0:31Do 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 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.

1:03We'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.

1:35And 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. So much of what we teach is to help you take the surprise out of the budgeting, the roller coaster, the how am I going to come up last minute with all this money? We know that's what keeps you stressed. So we want to take every opportunity we can to get rid of that feeling. And that's what we will do today. We're going to explain annual bills savings bucket. It is something that we set up with all of our clients, regardless of how many annual bills they may have.

2:07We set it up with them and help them to take out that roller coaster of having these big things pop up that you aren't sure really where you're going to get the money from. Yeah, because the reality is having a$3 ,000 auto insurance bill, even if you break that up monthly, it's still a lot of money. People want to be able to pay for these things and save on the discounts because you get a lot of discounts by paying in full and having yearly memberships or subscriptions and things, but they don't know how to budget for them and pay for them in the moment because their budget is already so tight or they think it's just spending money randomly and they don't have a system.

2:42They don't have a plan in place. Yeah. So let's define real quick. What is an annual bill? An annual bill is one of those big bills that, that is that you don't pay monthly. You might sometimes pay it quarterly. It just pops up maybe once or twice a year and it's bigger. It's not a monthly bill. But it's something that you do have to pay every year. So some examples are like auto insurance, like Vanessa said. Amazon Prime is one. Property taxes can be one. Depending on what state you live in, you can either have personal property taxes or you might have it in your escrow. Either way, all of these things.

3:13Car inspections, like your registration that you have to pay. Vehicle registration. I have a new client who has oil. She lives up north and she has to buy oil for her house. and that's how they heat their home. So it's not propane, it's literally oil. And so that is a huge expense. They have to pay$1 ,400 a year for that to be able to keep their, and they can't let it go out. If it goes out, that's a huge deal. So think about all this money. I think Shana said auto insurance. A lot of people have homeowner's insurance because they want to pay that in full because you can get a huge discount. So those are huge expenses and it's really hard to be able to budget for those in the moment if they come up, say, hey, around Christmas time.

3:48Yeah, yeah. So it's like the worst time. So if you're, if you are able to watch along, follow along looking, we're going to try to explain it visually how it looks. So we have a savings bucket and we, what we want you to do is list the name of each annual bill that you have. So you can do this by going back and looking. You can use our examples and try to jog your memory, talk to your spouse, whatever, but you want to list each one of them. And then you want to list the amount. So the annual amount, how much you pay in a year, not is, so if it's quarterly, you're going to put the times, the amount times four.

4:17if it's oil like you're going to get it filled probably twice a year you're going to list that amount times two in the budget and then this is why i started to talk about this vanessa then you're going to put when it's due because you might find out what the problem is yeah you might have all of your bills due in either july or december and you're wondering like why does it always feel chaotic in those months now yeah when you have those big expenses come out at prime times so like over the summertime when you guys are trying to take vacations there's a lot of moving parts and you have$5 ,000 worth of annual bills coming out, that's a huge deal.

4:51And then Christmas, you're trying to be giving, you're trying to buy presents and you can't because you have all these bills due. So we are trying to set up a system for you. So that way we have an account set aside for all of the annual bill expenses that you have coming up throughout the year. And we're going to add up the total. We're going to divide that by 12 and figure out if I were to save monthly for this, what does that look like? So I know consistently in my budget, I have like these annual bills covered. Yeah. So you will, so we obviously teach you to have a regular bills account where your monthly things that you pay for monthly come out of.

5:25We actually want this one to be separate so that you know that the bills account can be clean and be marked off each month and it's nice and neat. And then you have the big bills, you have money pulling up over there for whenever these big bills are going to come do, you have the money to pull and pay for it. And there's no big hurt to your monthly budget. So you're going to have a separate account. You're going to name it annual bills, and then you're going to be transferring automatically the certain amount that you come up with. Like we said, you're going to add everything up, divide it by 12.

5:50And that's how you know how that is actually going to be a savings bucket line item in your budget for annual bills. Yeah. And I want to reiterate here that if you're not at a place yet that you can add annual or you can add savings buckets to your budget, you have to be able to add this one. Like this one is a non-negotiable. Why? Because it's a bill. It has a due date, just not a monthly due date. And these things will come due. Like my client with the oil, it absolutely cannot go like that tank can't get empty. If it does, they have to buy a whole new tank, your vehicle registration. You have a car that you have to drive to work.

6:24Therefore you have to, it has to be registered so you don't get pulled over and get a ticket. Homeowners insurance. We live in Florida, lovely hurricanes. You need to be able to be current on all these bills and you can't be delinquent. So these bills are very important to put in your budget and make sure that you account for them. 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. You'll be able to easily set up a system that runs automatically and shows you exactly where your money is going.

6:58and 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. This 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.

7:31Now back to today's show. And so you're going to, like we said, you're just going to put the annual amounts and then your budget or our budget system at budgetbesties.com forward slash budget will help you figure out the amount. So in the case of this particular budget that we're looking at, they have Prime, Amazon Prime, they have Walmart Plus, they have Costco. Look, they got a lot of memberships, okay? And they want to pay for them annually because they save money. They also have oil. Like Vanessa said, they have their auto insurance, car registration, E-ZPass, which is their toll payment. So they also pay for their water twice a year.

8:04I've never heard of that before. So that's a lot of money. Yeah, that is also in there. Yeah. So they have come up with the amount of annual bills they pay is$8 ,000. And so their monthly budget is going to be$668 is what they've come up with. And so then if we go over to their budget, then we would see 668 is actually coming out of their monthly budget to go into their savings account. Yeah. And so this is saying, here is my budget with all my income, all my debt payments, and my regular bills that are getting paid out of my current bills checking account. But I'm also saving$668 every month into an annual bill savings account that all the money is pooling into.

8:42And then whenever those bills come due, you transfer the money from annual bills into your bills account and you pay the bill. Yeah. And you might be tempted to round up to 700. We would not hate you for that. We would not. We would not be mad at you. Because they always go up. You know that. Yeah. And so the other thing here to think about, though, is like Vanessa said, we do start our clients with the annual bills, but that doesn't mean they can afford to save$668 every time. so what you might need to do is figure out which ones which ones are coming due and how much you can i get enough in this account to pay when it's coming in three months from now or whatever you might have to finagle it if you don't have the perfect scenario like the perfect scenario for this would be oh i have eight thousand dollars already saved up here it is i'm going to put it in my i'm going to put it in my account and then i'll just be funding it that would be the best case scenario whatever we understand that's probably not going to happen i don't think we've ever had that i think you've had i've had several people like that i'm just saying i have I've never had any clients.

9:36Angel clients that can fund their savings buckets. It's fine. But then the other thing is you might get to, you might come in and you have three months till one of the bills is due, six months to the next. And then you're just going to, you're going to have to do a little extra math, but, and see, okay, actually I don't have 12 months for this one. I only have three. And then you're going to do that math. You're going to, you're going to set it aside. And then once that bill is paid, you can start back with a 12 month mark. Yeah. So for instance, if you have a$1 ,200 auto insurance bill coming due in three months, you need to save$400 a month.

10:05Not 100. Right. $400 a month between now and then to make that full payment. And then as soon as that payment goes through, then you can, like Shayna said, start saving just$100 a month, which will really free up your budget. Yeah. But having to save$400 a month versus$1 ,200 in that one month is really going to feel much better, I promise. So if you can, really try to get your, at least, like your first bucket that you do besides your emergency fund is get this annual bills set up and going as fast as you can. Yeah. And the only other tweak to that, and we've said it before, is if you can at least start with what you can, and if you have to fill some of that with your monthly budget, let's say you have a thousand saved up, but the payment's 1200 and you need to get 200 from your budget.

10:45Like you can do that eventually. It's still better. Yeah. It's still better. Having a thousand saved up is way better than having zero saved up. Right. So just understand like the perfect scenario is you're able to save the exact amount every month and then everything comes due and it's all already even saved up for. You might have a little tweaks in the very beginning of your budgeting process to get to that point, but it's going to be so worth it knowing all of that money is set aside. You're going to love it. And we hope that you set up your annual bill savings account, separate savings account today.

11:12Yes. And if you've loved, if you guys are there watching visually, if you've loved looking at our savings bucket tracker and our budget, go to budgetbesties.com forward slash budget and check it out. If you're tired of feeling like your finances are all over the place and you're ready for a simple set it and forget it way to budget, we have something special for you. Watch our Automate Your Budget Masterclass at budgetbesties.com forward slash automate. We'll show you step-by-step how to finally organize your money, how to set up your accounts and put your budget on autopilot. So your bills, saving and spending run like clockwork.

11:43Imagine less stress, more savings and the freedom to spend money without having to track every dollar or babysit your bank account. Go to budgetbesties.com forward slash automate to start today.