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A typical budget is an effective way to free yourself from the shackles of debt. But it comes with a steep cost:

Sacrificing your financial empire.

The truth is, a typical budget does more harm than good for your legacy.

If the answer isn’t a typical budget, then what is it?

On today’s episode, you’ll discover 4 stupid-simple budget rules to make your money work for you, take control, and get out of debt.

Listen now!

Show Highlights:

  • Jeff Bezos’s wealth building system that automatically generates cash for you (and makes your money work for you) (5:45)
  • How to escape the clutches of debt and unlock your life's potential by browsing Apple’s app store (7:44)
  • How to build a kingdom of wealth by following a 6th century Christian practice (10:22)
  • Why being repeatedly punched in the jaw opens the floodgates to wealth (14:42)
  • How you can discover untapped financial opportunities by consuming bleu cheese stilton cheese instead of cheddar (20:08)

If you’d like to see how Grandma’s timeless wealth strategies can work in your life, schedule your free 15-minute coffee chat with us by visiting www.grandmaswealthwisdom.com/call … just like Grandma would want us to do.

Get “Manage Cash Flow Like a Millionaire” here: https://www.wealthwisdomfp.com/YNAB

Read Full Transcript

(00:05): The typical budget is so helpful when it comes to getting out of debt and building up some savings. But we believe you can not budget your way to wealth using a typical budget. A typical budget might even hinder you from building wealth. Yes, we said it. A typical budget might even hinder you from building. Well, is that a reason to stop budgeting or could there be a not so typical approach to budgeting that boosts a wealth building journey? That's what we're gonna talk about today. Hey, I'm Brandon, and welcome to Wealth Wisdom Financial podcast, episode 117. Is it budget required to build wealth? That's what we're gonna talk about today.

(01:00): Hey, I'm Amanda. We're guessing you're coming to today's episode with some budgeting baggage. Maybe you've tried budgeting before and it didn't work. Maybe it even caused more stress, guilt, and shame rather than reducing it. Maybe it worked for a time and you saw some success, but it became one of those things that worked so well you stopped doing it. Perhaps you've never tried budgeting because you don't see yourself as a person who would do well with a budget. You're a rebel. You don't want anyone or anything telling you what you can and cannot do. Maybe you just never had that time for it. Maybe like us, it worked to do some things like getting outta debt, but you aren't Finding it helps you to get where you really wanna go. Now. Well, if any of those scenarios apply to you, you are in the right place for a wealth wisdom approach to creating wealth by changing up what budgeting looks like for this stage of your journey. Get ready. We believe some thought patterns are gonna flip and turn upside down with today's episode. Be sure to listen to the very end for a shortcut to implement your wealth building system faster and easier.

(02:08): Oh, I'm excited for that shortcut. Are you sick and tired of hearing the same old conventional financial advice? I mean, we feel you we're fed up with the same old truisms that Paul Flat. When you get into the unique opportunities and challenges of your specific situations, this shows is all about bringing you historic wisdom around building wealth with practical insights on how to apply it to your journey when conventional financial thinking doesn't get you to where you wanna go, you need wealth wisdom. So let's, uh, master that wealth building together. And this is a cornerstone to mastery wealth building what we share in today's episode. First, let's remember some of those reasons why people do not budget. These phrases that we're gonna share are phrases we've literally heard real people use when we ask them, What does budgeting look like for you?

(03:01): I hear this all the time. I feel like I have have them in my sleep, right? So we tried to budget, but we didn't have enough within our control to make it work. I've heard that one plenty of times. We tried to budget, but we didn't have enough within our control to make it Work. Or this one, we're super frugal and save 30%, so we don't need to budget the other 70% we can spend out however we Want. I've heard that one plenty of times. I've heard this one a lot too. We'll start budgeting when dot, dot, dot. You might have said this, We'll start budgeting when Or budget and doesn't work for me because followed by a whole list of excuses that are like belly buttons. Uh, we budgeted for a while and it helped, but it doesn't seem to be working anymore. So we stopped. Or how about this one? Probably the most common one I hear, I'm just not a budgeting person And surprise, we don't budget either. That is if you define budgeting as an estimate of income and expenditures for a set period of time, Right? And as used in phrases like keep within the household budget, right? Those are, uh, things that we do not like.

(04:16): Yeah. And those are from an online dictionary. If you just look up what is a budget, that's what you're gonna see. It's an estimate of income and expenditures for a set period of time. I used the dictionary app on my Mac to learn the origin of the word budget, and apparently it comes from old French and was derived from leather bag or sack. The word originally meant a pouch or wallet, and then it became, uh, its contents. That's what budget referred to a pouch or wallet or the contents within that pouch or wallet. In this sense, your budget and that original meaning is the funds you have available. Now, we all need funds available, thus we all need a budget. But in the 21st century, budget has taken on a whole new meeting, and rather than being a place where you store your money or the money that you have, it actually becomes a lot of baggage. Yeah. Literally. Yeah. He came from the baggage industry, right? And that's kinda where it got roots. So it's weird that we, we feel like it has some baggage associated because literally it does, uh, have some baggage associated, But we wanna get rid of the negative baggage, and I have it actually feel like something we have and have control over and is there to work for us.

(05:45): That's why we like to think of creating a wealth building system that redefines how to make our money work for us rather than us working for the budget. I, I don't know about you, I don't like working for those kind of things. Doesn't, isn't, isn't as, uh, exciting to me. But before we dig into it, we wanna ask you a very important Question. So if you've drifted off, come back here. This is the critical moment of the podcast. If you hear nothing else, and we want you to hear this, you ready for this? I'm ready. Ask yourself a question. Does Jeff Bezos billionaire extraordinaire? Does Jeff Bezos need to budget? Probably not. Right? He can afford whatever he wants. He would never needs to ask, Is this in the budget? No, he could just go buy it if he wants it. But does Jeff Bezos billionaire extraordinaire make his money work for him and keep tabs on it? And if it's making progress toward its his financial goals, I bet. So he might even have a whole team who does this for him. If it's good enough for a billionaire, don't you think there's something to it? So how do you manage cats like a billionaire when you're not one yet? And again, we hope you get there. How do you really make your money work toward your wealth building goals? You might know how budgeting works to get out of that or to build an emergency fund, but managing cash flow for wealth building has some very important differences from budgeting. And it starts with redefining budgeting.

(07:30): Now, one part of our wealth building system that helps us in this day to day, month to month side of our business and personal finances and engage with our money, make sure it's doing what we want it to do, is a tool called you need a budget. So we're going and saying, we need a budget. When we said we don't need a budget, Well, their tagline is, You've never budgeted like this before. So for a redefining budgeting, we actually love how they've already redefined it and they have a great method of using YAB to get outta debt and save more money. That's literally their tagline. Uh, get outta debt, save more money. And they have got information to show people who use YAB end up saving this or paying off this amount of debt, that kind of thing. You can take their online courses for free to learn how to do that whether you use their software or not. And today we wanna bring wealth wisdom approach to using y a to build wealth that you could use the same fit, same, uh, framework whether you use y a or not, but we just find yab really helpful to make it easier and more effective. Plus we love how they've redefined a budgeting to be just four simple rules that if you follow them, you're going to make your money work for you. You'll be taking control, getting outta debt, saving more money. Yeah. And we're gonna share how we would tweak these rules to say and build real wealth.

(08:56): So let's go through there for rules and chat about how to apply them to wealth built. So rule number one is give every dollar a job. That's their first rule. Give every dollar a job. We Love that. This rule makes you focus on what you already have. What's in your leather bag or your na sack or in the 21st century, what's in your online portal? What money do you have available? And then assign those dollars to categories within your budget. Almost like you'd put them into envelopes, but in this case, you're moving them around in their software And we love this. There's no looking back, no forecasting months in advance. We are able to see what's happening. Yeah, you work with the money you actually have. Now when you first sign up for yab, the default setup for the how those categories are listed, those envelopes are listed, is spending first and then saving. We believe if you wanna build wealth, we've found that saving first is very crucial. Yeah. So what we've done is reordered the categories, uh, those, the electronic envelopes if you will, so that when we have income money to assign, it goes first to tithing, then to savings, and then we assign it to the rest of the categories instead of saving last.

(10:22): Yeah. And so we fill our savings buckets first and we use percentages just like tithing, right to tithing as a percentage. We use percentages for those buckets to uh, put money there so that as our income varies, we're able to save the same percent and hopefully as our income goes up, we're saving more and more. Thereby we are, you know, giving every dollar a job. We just prioritize the jobs that are gonna help us build wealth versus the jobs that are just gonna keep us alive and make, you know, the day to day life experience. Good. So world number two is embrace your true expenses. That's, uh, again, a really good rule that they have Embrace your true expenses. This one's often misunderstood. What you're doing is you're taking less than monthly expenses and breaking them into monthly amounts. So you think of every December you spend X, y, or Z on a holiday. And so you break that into chunks that you save January through December so that you have it available for December or the summer vacation or the birthday gifts, all the different things you break down into monthly expenses.

(11:33): Now that's good for building some savings and staying out of debt, but could it get in the way of saving first and seeing opportunities for wealth Building? Yeah. So let's take the example of your annual car insurance payment. If you break that down into monthly amounts and you're putting money aside every single month to make sure you've got that money available for your annual car insurance payment, you might not look for a new quote or make sure you have the right coverage. It becomes just this automatic thing that flows through that. If you're not being intentional, you're not paying attention, you don't see an opportunity for building wealth. Now car insurance might not be the, the example in your case, apply that to whatever it might be. You get into this system where you're putting money aside monthly that you forget to be still be intentional about it, to still ask how could this help me build wealth? Or how could this protect my wealth? Those kind of things. Yeah. You could be setting aside so much for get giving that you forget to save for a new roof that's coming up. So those are things again that we want to think through.

(12:37): Yeah. So the key question that we like to ask when we're embracing our true expenses is what is true? And we'd remind our listeners that they want to embrace their true lifetime expenses, not just the year to year type of purchases or even the new car you get every five to 10 years. I mean, think of this question, what's the true expense of retiring one day? Whether by choice or due to an illness, your zero or a loved ones? That's a really big question. Embrace your true lifetime expenses. Yeah, I think that's a big difference. That lifetime expenses that people aren't even considering most of the time. So shifting to saving a percentages. First off, it's a good portion of these true lifetime expenses, but it can be really hard to see those piles increase. So what we do is we move them over time to another budget for medium and long term savings. So they aren't part of the month to month budget. So we actually are having two budgets there. Then we still track them and follow the four rules with those dollars. They actually have specific jobs. Like one of our categories is in case mom gets sick fund and retirement. So those are in place in our long term

(14:02): Planning. Yeah. And if those were on the regular budget, they would cause the budget to look really weird and might make us feel like we have more than we actually do for those month to month. So moving them to that other budget still helps us follow these four rules. You know, give every dollar a job, embrace our true lifetime expenses. And then the next two we're gonna get to but keeps them outside of the day to day, month to month kind of, uh, budgeting and awareness there. Yep. And we'll go into that a lot deeper in something coming up. So you'll see that rule number three is roll with the punches. Yeah. A ma loves this one. Roll with the punches. No , this has actually always been really hard for me because I'm a nonviolent person. I don't like to even use the word punch unless it's a fruity beverage that I get to drink. Um, so I like to think of forest gum and there's this scene when he's running across the country where he runs through a pile of poo and this guy asks him, Does that happen very often? He'd says something like, more than you think, and then this car runs by or something and forest gets, you know, splashed with a bunch of mud and he wipes it off his face and there's a smiley face there on this yellow T-shirt. And hence we get the creation of the smiley face. But I like to think of like, it happens, right? That rule number three for me is when it happens, you have to make adjustments. Budgets aren't meant to be static or I mobile life isn't that way. Life isn't static. Life doesn't stay the same. Life changes. So budgets have to change along with it. It's a helpful reminder for rule number three. I just wish You would have worded it differently. And folks at y a, Jesse, if you're listening, may I suggest keep rolling. Or maybe even rule number three, Forest gummit.

(16:01): Some millennials might have never actually watched Forest Gump though, so that's true. Um, that's why Forest Gummit may not work. Maybe Keep rolling. Okay, Jesse, keep working on those first principles and I'll keep listening to your show too. So, in all seriousness, when following rule number three, you have to be careful about robbing Peter to pay Paul. This is a weird term, robbing Peter to pay Paul. Yeah. So I had to look up where that came from cuz I hear all the time people say, I don't wanna rob Peter to pay Paul. And you know, this moving money around from different categories, different envelopes. They feel like they're robbing Peter to pay Paul. Yeah. I don't like robbing Peter to pay Paul . Well, this um, phrase comes from apparently the Middle Ages when, uh, their, we had St. Peter in St. Paul and their feast days, they're like Saint Festival things were on the same day. And there was this tension of do you celebrate Peter? Do you celebrate Paul? Who are you celebrating? More or less? It's really weird to me. I don't celebrate Saint days or you know, saint Festival type things. So I don't really get it, but it, that's where it comes from. It's actually like Rob Peter to pay. Paul is not celebrating equally, which is kind of weird. Yeah.

(17:19): Again, that's why we save first that money gets allocated to those categories and then rolls off the budget to a separate budget. Then we go through our monthly bills, our everyday expenses and short term funds at the very bottom of short term funds. We leave a category to catch anything left over when it happens, we look first at the very bottom line and roll those funds to fill in what's needed elsewhere. So we're not doing this robbing Peter to pay Paul or Saint State stuff. , what we're trying to say is at the very bottom of our, uh, categories is this catchall category. And it's something that if we accumulate a lot of money there, we can use those funds to increase our assets and build more wealth. It's something that we're really excited to go after if we just had the money too, right? So that deseas us from moving those funds too often. And instead it's more like, okay, we, we tie, we save first we went through all these other categories, we put this extra that was left over in this, this goal we wanna go after, but then, oops, we overspent on restaurants, we ate out too much. Or the cost of eating out went up. We overspent there. Yeah, we can take money from groceries or spending money first, you know, to try to move them within the, the categories further up the budget.

(18:50): But worst case scenario, we have this cushion at the end that we can take from our end category and roll it up into more urgent categories. Like when those categories have turned yellow or green, meaning we've overspent, we can move it from that category to make sure that they turned gray or I mean yellow or red, to make sure they turn gray or green. Where, and the cool thing is is because this is something we that's extra that we really, but is something we really wanna go after. We don't feel as much pain, but we still feel a little pain because we're rolling money out of it. Cuz we know it's reducing our lifetime joy. It's not helping us grow our assets the way we want to. Mm-hmm. . So it keeps our minds on wealth building when we could easily just give into temporary fleeting happiness. But it also helps us not feel like we're robbing Peter to pay Paul. We're not dipping into our savings or using this cushion and but before we even use this cushion, we're moving within other categories that are less important.
Yeah. So that was a lot there and I think that'll help as, as they might go through this, uh, course that's coming up that you're gonna be able to explain it even better there. So With screen share and everything. Yep.

(20:08): Yeah. Rule number four is age your money. That's the next rule that YAB loves. And I like it too. I like to age my money, like, uh, fine wine or cheese I guess. No, really as you follow the first three rules, this fourth one should naturally happen. But the idea is that you start to get a month ahead. You're spending money that you earned longer and longer ago, that the dollar you spent today is something you earned 30 days ago, or maybe it's 25 days ago. You're gonna try to aim for longer and longer times All well and good, but if you're building wealth, you're gonna have money that's going to age much longer than a month. At least. I hope so. Right? Uh, do you keep that in your budget? Do medium and long term funds need to follow these four rules. Wind have really doesn't answer these questions, right. So that's why we've modified it. Yeah. So we hinted at this earlier. We move our medium and long-term savings into a different budget and thankfully for the same subscription fee, you can create as many budgets as you like. And so that rolls them over. We can age our money in two different places. So with this medium and long-term savings budget, we don't really pay attention to the age of money. Instead we look at the net worth report to see how we're tracking against where we'd like to be and adjust accordingly. So that's a different chart that we're looking at, which is a good segue into the system we put in around y a to figure out what to adjust and when to make sure we're taking the right steps on our unique financial journey.

(21:53): So as you're starting to see, budgeting is really just engaging with your money, but engaging with your money is way more than just moving numbers around in a software and getting the reds and yellows to grays and greens. That's why NAP speak for making sure you cover any overspending and you're tracking with the targets that you set up for those categories. That's all really good. It's all really important, but there's a few things we add to it. Yeah, we do a few things before and after using yab that greatly improve our use of the software. So before we even open why now we revisit our goals, our strategy for our wealth building journey. Like we are revisiting that often. Uh, where are we going? How are we gonna get there? Anything we've learned or thought of that we'd adjust about our overall goals, hopes and dreams. These are things that we do even before we open up the budget. Anything happening in the world that we need to consider. Okay. Then after that, we get to the budget. Now we call this set your sites. It's the first letter in an acronym still S T I L L. Why not really, really, really, really, really helps with t and i and the acronym. We're gonna get to those, but we, we believe it helps most if you've done this S part, you've set your sites before you even open the app.

(23:21): Yeah. And again, if you wanna learn more still, method.com is a good resource for the T. It's track your in and out. YAB is really great at seeing your in at the top of the software as money to be assigned. Then your out becomes the categories and you're spending now and in the future. That's the T Part. Yeah. And then for the, I inspect your progress. Y m's reports are really helpful to see the overall trends and how you're doing, whether you're looking to age your money or something like the net worth report, which is also very helpful. And then of course after the T and i comes the L and the other out, we're done with Y A now, but we're not done with engaging with our money. So we need to do the two Ls. Yeah. The first L is to look for a 1% adjustment based on our S where we set our sites, our T, we're tracking our in and out and I and inspecting our progress. We likely have some ideas of what we could improve on. Could we save an extra 1%? Could we adjust this 1% from this category to this other category? Could you know something like that? We narrow it down to a small action that we can accomplish in the next month or so. The timing sometimes varies. That can help us move closer to our S. So we look for that 1% adjustment. And the second L is live deliberately. Before we're done, we go ahead and start the 1% adjustments if we can, or we put it on the calendar for a specific time to make it happen. Finally, we confirm the day and time we're gonna do this process again and engage with our money using the still method plus why now? And we do this regularly, living deliberately.

(25:17): So there you have it. A typical budget is not required to build wealth, but engaging with your money certainly is. We have the still method to confirm your goals, hopes and dreams that move your money closer to them. And we have YAB to help enter into the still method to help make more data informed decisions about what are your 1% adjustments that are gonna be most effective and help you get to where you've set your sites. We can almost hear the biggest objection now though. Who has time for this? And we could just say, well, if it's important enough, you'll make time for it, which is certainly true, but we also have a shortcut to get it done much faster and easier. Do You long to feel in control of your money? Do you want to know you're on the right track towards your financial goals and creating wealth? You can count on? Then what you need is to manage cash flow like a millionaire. This is a 10 step quest to adopt a cash flow management system using Why now? It's available at www.wealthwisdomfp.com/y app for free with your membership in the Wealth Wisdom financial community for the month of October. Then as we increase this, we're gonna build this up. It's gonna go up to a hundred bucks. So we want to make sure you see this introductory offer to this managing cashflow like a millionaire. So go to www dot wealth wisdom f p, that's financial partners.com/why now.

(27:05): Now there's another big objection to budgeting. In the beginning, it can feel like it increases stress and anxiety rather than reduces it. Or if you're going through a major transition, it feels like it's too much to handle. That's why in the next podcast episode we're gonna talk about how to budget in a way that improves mental and emotional health. So hit that subscribe buttons that you don't miss it. And don't forget to go to wealth wisdom fp.com/yab to claim your access to manage cash flow like a millionaire. Rather than having to type all that out, you can just check out the link in the show notes of the episode. So again, we want to see you break through to this amazing financial future using and managing cashflow like a millionaire. But until next time, we wanna make sure you keep growing and protecting your foundational wealth so you're ready for the next adventure. Life brings your way. We hope you live long and profit the topic's presented in this podcast for general information only and not for the purpose of providing legal, accounting, or investment advice on such matters. Please consult a professional who knows your specific situation.

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