A Financial Guide for your 20s with Greg Davis - 136

[00:00:07] Welcome to Money Talk with Skyler Fleming. Making sense of your money, one money talk at a time. Let's get talking. Welcome to today's episode of Money Talk. I'm your host Skyler Fleming and in today's episode

[00:00:19] we're talking all about how to get set up financially. While you're in your 20s, today's episode is just like the title suggests. A guide to your 20s financially.

[00:00:28] Today's episode features Greg Davis and we have a wonderful conversation all around how to get set up in your early adult years. Greg Davis is the author of Checkmate and was worked in finance for many years.

[00:00:38] We'll be exploring the usefulness of popular financial rules of them, the power of automation, and managing your finances, and the fundamental concepts that everyone needs to grasp onto early. Greg will also shed some light on some common financial mistakes we tend to make and how to avoid them.

[00:00:53] The responsible uses of credit cards and additional tips to help boost your financial health. Plus we'll discuss the importance of planning, the benefits of starting early with investments

[00:01:02] and Greg's insightful, bed for so framework. Get ready for an enlightening conversation that will set you on the right path financially for growth and the future to come. The money talking points for today's episode are rules of them useful too.

[00:01:16] How can automation play a role in your finances and three? What are some common mistakes you've also made? With the money talking points in mind, let's get talking. Hello everybody, welcome to today's interview on Money Talk with Skyler Fleming.

[00:01:37] Joining me today, I have Greg Davis and I'm excited for this interview. We're going to talk about some of the key things that you need in your early years as an adult in your 20s and maybe into your 30s.

[00:01:46] But Greg, would you go ahead and introduce yourself for everybody? Yeah, I'd be glad. I learned names, Greg Engels. I'm actually retired at 40 year career in finding accounting. So basically, the 20 year career, the 23 years of university training, working at the senior executive there. The company.

[00:02:08] And then I want to offer that anything to be in the business going on. And I'd be a good tyrant of 21. And now, I'm just going to go and talk about what we're going to talk about. Not because they're there.

[00:02:20] Yeah, so we're going to talk about like a guy at the year 20s. Like we said, in some of those topics that and tips that you've shared, but I kind of want to start out with rules of thumb. Are they actually useful?

[00:02:31] Are they good for people in their 20s to even consider? What are your thoughts on those general rules of thumb? Yeah, they're actually almost done. I really, I can talk to people when it's put yourself from, I talk around this in my book.

[00:02:46] And the real concept there for me is if you've been with hold and just be maybe a 20% in a day, you'll never see it. So it's not that you use brand, but it's a minute. When we're in our 20s, we've lots of things we want to spend on.

[00:03:02] So that's the key. I think the type yourself first is a paramount for all of those in our 20s, 30s in the middle later. But also, I mean, others people have their 20s, 50, 30, 20 rule. And I kind of like this concept.

[00:03:17] You kind of figure out what are the things you kind of think and have to really put fit and presenting to that. The ones, the things we like to handle, 30% but they even form in mind when it's the same.

[00:03:30] The sooner we start, the better we're going to grow our portfolio. And that's way percentage is going to grow dramatically. Do you think that over your 40, 45 year career? Yeah, I mean, that makes sense.

[00:03:42] Like you said, your first one is better self first and then you like to lean on the saving part of the 50, 30, 20. Do you think that automation helps in that savings aspect? Does that help make it easier? Yes, this is really pretty easy.

[00:03:58] We have all these tools out here. But we want to try and figure out some of these on to our right, and it's a little confusing. But I think people in our 20s can make this better than me. In my 60s, there's so many tools out here.

[00:04:10] I love the fact that you can automate a lot of your payment, right? When I was in my 20s, we could get a lot of money to let's be honest. So for me, I forgot to write it up at the rent check.

[00:04:23] I'm using travel or paper and over for you to make the park happy. And I get my 50s going for stack going. So my first year list is by our use automation, you're going to, There's a lot of many payments that I've do so.

[00:04:36] Doesn't offer anything to do that, typically. I just recently ran into a utility company, started me a couple of bucks to a online payment. But you've all the resources going the way that's not going to be a good customer.

[00:04:49] So in my, we've got all the stuff out there. And we've just put it to use them and try to make the way writing back to me. And I think maybe maybe one or two tracks a month if I'm lucky next year. We've come one all big.

[00:05:02] Yeah, I think I've wrote one check in my life. So yeah, I think it's like, it's because it was like a campsite that didn't accept anything. Which is weird. They weren't on the on a mission yet. Yeah, they weren't even like cash yet.

[00:05:19] I guess cash came over checks, but they were only checks. It was like some random campsite, like first come first serve. You had to get your site and then pay with a check. It was weird.

[00:05:28] I was like, I guess we have to go to our credit union and get some checks. So we had to go get like the right out like six or whatever they'll give you for free. Yeah, but yes, we can make it.

[00:05:41] And making after remember what we're going to have. That's the lead being. Yeah, balancing your checkbook is something that the principle still applies of keeping your spreadsheet and your income and expenses in order.

[00:05:52] But thankfully, we don't really have to sit down and make sure all the checks cleared and where they are. They're not on the floor. Yeah, it's a whole lot simpler now.

[00:06:02] But let's move into maybe some basic concepts that people can say, Oh, I learned that from the podcast. I'm listening to today and I want to go learn more about it. What's something someone can take and research more about to learn more? Yeah, very quick to style.

[00:06:15] There's so many financial topics out here that sometimes overwhelming people right and let's be honest with where our database and what starts to put out budget and debt reduction and investment. We were like, remind the first one in circle. What should I do first?

[00:06:32] So I think the most important thing is something that I've experienced following my book check made is budget. I actually think budgets are important for us in any way. To just stay keep us on board, right?

[00:06:46] So so easy with our wants to want to go buy a car or a runner. You know, go buy this new fancy house and we stole blocks of money. But boy, let's make sure we have a budget at least houses when we should be spending on need one.

[00:07:01] And I think that kind of tough factor, early discussion on the 50-30 20 rule. That budget keeps on track making sure following the goals and more of these ones savings type of mode. So, much is important. I also think just knowing to acknowledge a basic investment.

[00:07:18] You know, we all keep the Warren Buffett's world, but early. But I will put it, I read his newsletter right here and it may sound boring at 20-30 pages, but it's one of the most informational written on a very basic level.

[00:07:35] I don't know if I recommend any rule, it's just like I look at that. Usually, it bites in your investment standpoint and just basically like that. So I think that's something visor two things I would throw out there.

[00:07:46] I think people should just do a little bit of research and then also talk about with others. You know, it's funny in this country that we don't like to talk about money at all. Like, I've been seeking the normal one to talk about your neighbor or your friends.

[00:08:01] I find it just the opposite. I love talking money with my friends and the growl because I think it's better to have an open discussion, right? It's not having as a hush type of money that you need, but I need to have a hush type of money.

[00:08:14] Let's bring that and I would have people do, because there's lots of learn from them. Yeah, you're singing my song there with money talks. I love that. We need to talk about money more, that's what I've been preaching for years.

[00:08:25] How do you think people can start a conversation? Like let's say they do want to learn a lot a bit more about investing and they don't know where to start, but maybe they have a friend that they know is decent with money.

[00:08:35] How do you bring up that conversation? Yeah, the tricky one, but I think sometimes I've done this in families that can be a little bit uncomfortable. First, but I'll just say, I just all, uh, little something on the news.

[00:08:49] I want to think you do like January 1st, just take a look at all your automatic deduction that happened on recurring dates with example. You know, Apple TV, I'll just give you a great example of my personal sample.

[00:09:01] Back in January, I think it brings me up my thanks to events and my credit card take to see what my recurring thing for sparing. And this is something that you're on as a roebe. It's an easy 5 to 10 minute exercise.

[00:09:14] I do pull your statements the past month and go look for your payments for you. You're going to probably find cable bell obviously. You're going to probably find maybe an Apple TV or other apps that you're doing. Yeah, it goes right.

[00:09:28] And then the role key is talk to your stuff again. Are you still using them? Because at least what I've spoken to my wife back in January is we signed up Apple 2 years ago when we were so hot on this current series.

[00:09:41] So that's the rock about what we were year ago and we're still thankful. That's how you get to it. I was recurring. So bring that up as a topic here. Something I did maybe somebody else would benefit but and then that can kind of translate another topic.

[00:09:55] So hey, you know, I've got some savings up here in there. The current payments were the upload on well, and then maybe I would index on something really basic and try and get to my growing up.

[00:10:05] Yeah, and on the note of subscriptions and things like that, I've done the same thing recently. And honestly, my tactic has been to cancel it so that when it hits that renewal point, it stops and then see if you ever need it again.

[00:10:17] And honestly, there's been through my work. Yeah, there's been three or four that we've never touched again.

[00:10:22] And honestly, if I hadn't told my wife that I canceled them, we would never know like, and that's why the automatic renewal speaking of automation is such a big deal for companies because they keep that's how they keep their income coming in.

[00:10:34] And so if you can keep automation going towards savings, you can get it working in your favor. Yeah, I love that because you know, these ones are down something that is not a matter of the power. We tend to think what we did sign up for, right?

[00:10:48] So, for checking out thinking, I'm going to be like, I'm going to counting there. I like, you're wondering, you're probably doing this. So I don't really want to let me look at my statement very much to see what's going to be part of that.

[00:11:00] And we keep a budget. We use a software that I started all, why it would be, but you can probably stand for it. You need a budget. And we certainly need to divide this into two to four perfectly.

[00:11:14] But when I end up, and I get my budget, like, oh, we're still paying for that. But baby, we got to do something about that. Yeah, and all these tools and tips that we're trying to get everyone to use in their personal finances,

[00:11:27] all these companies have learned that same tool and how to master it, like automation in their favor. So, I'm going to turn my work on every order. Yeah, I'm going to be more. Yeah, exactly. So don't let the automation work against you.

[00:11:40] But let's move on to some common money mistakes. What are some of those? Like common things issues that people might have in their 20s when it comes to managing their money? Yeah, I'm going to give a example of my situation.

[00:11:52] Maybe I graduate most when I'm out in college. I think my first thing is our relationship is actually embarrassed. Number, I made 15,000 more of a year. Now, I live the moment that I'm out in the middle of the college. I thought it was a million.

[00:12:12] 15,000, but a long second, maybe anyone. And so what do I do? I work in your public accounting, maybe 15,000 plus a month or two. And there's it. We all took your 20s and I remember more support yet today, four years later. I went on a brand for its company.

[00:12:30] A 280CX, which is not even a brand name, but a model. But anyway, I took my first year of running, put it into a brand new car, and even alone on top of it, right? Well, so money, if I say about what money would be worth today,

[00:12:44] it's staggering 47 years later. So much as this is the people, if I'm in your 20s, make sure you don't get confused with the needs or is it once. I want all those parts of our, did I need one?

[00:12:57] No, I could have bought it even before I was in the end of what I spent the 20s. I'm done for hours and so I'm not sure in your 20s. Think about long-term ramifications of your spending. Well, I, I, you know, for example, 10,000 or even a huge car,

[00:13:16] think about as a 10-bit of you have to have a day. And you can currently still running fine in all the expectations of repairs. Make that real hard to speak and think about it. Don't make it, don't make a rest, just be in the way.

[00:13:29] Think about it for a day or two and then come back and think that's something really hot. Yeah. And we have my wife has a 2001 Toyota Corolla that doesn't look great, but it gets us from 0.8 to 0.20. So consider how those, those car purchases,

[00:13:44] especially nowadays can be huge because your $15,000 plus cars, people's brand new $60,000 car were there making 40,000, coming out of college and spending all of it and plus them. So the numbers line up, but even then like if you're able to take that money,

[00:14:01] like you said, get it started early automation, and interest all those sorts of terms if you don't know what they are, look them up. And I have other episodes on them, but those sort of things are what builds your portfolio and your investment assets

[00:14:13] to make it so it's easy to purchase that car later down the road. Yeah. If you say that money in the 20s, but obviously if you're going to have a maybe in your 40s, you can go by like,

[00:14:23] you have some like well for you to put up at that point. But don't do it in your 20s, maybe this wasn't as part just even on my part. Yeah. I mean, I think the hopeful thing is too is you'll, there's always time to change it.

[00:14:37] Like if you did like maybe you're listening to this in yesterday, you bought that new car and you're now listening to us say, oh no, don't do that. There's always hope I think with money, like you can always adjust and change and maybe you sell the car

[00:14:49] and then you buy it later, but I think the one thing to realize is that it's never like totally lost. Now, point, and to your point, I don't know what to make the space and we do with money as well as other owners of our lives.

[00:15:00] That's part of my book is Domain's Day, so I call a chapter where they would stay. I'll give you another group of requests to put in finances. My wife and I are 40s felt that we needed to meet each house and the other bank for their life.

[00:15:15] Now, she was at the power of just, I was a finance, finance, I had 30. We made a good salary, but did we really need a vacation home? Probably not. So we bought a woman in the house in 2005. We'd be peeking at the beach real estate market.

[00:15:32] Pay ridiculous price from the house. Sold it 12 years later, style of basic two-thirds and what we bought in the house. Those are the substantial capital loss and huge loss of value from our portfolio. So again, just come down to that news versus once.

[00:15:48] We really made a noise to be drafted in our 40s to buy that and help them pay the price taking the value of the player. Wow, yeah. If you can get clear on your needs in once early, I think that'll help everybody out. Yeah.

[00:16:02] I'm going to skip credit cards or something we were going to discuss today. But I kind of want to jump into this last couple of questions. Yeah. Credit cards are a great topic. I guess just a quick thought on them from you.

[00:16:12] Do you think there's something people should use? Should they look into a more or should they stay away from them completely? Yeah, my advice is news credit cards. We use them as quarterly in the world. Make sure if you're putting someone on credit money

[00:16:23] or you can pay it off into the month. That's my strong way to come up with never every day. I want that's how the credit cards make. It's pretty much my money on one eight by five percent interest. But if you've made it all,

[00:16:35] a mall or credit cards, that's a really good benefit to the percolate provide. Yes. Yep. That's awesome. That's what I think to a working on a credit card guide. So to tease it to the money talk audience. I'm working on it like the PDF.

[00:16:47] So I'm excited for that to come out. But I think they're great. They're paying for a lot of my wife and I was upcoming trip to Hawaii to celebrate her last year. So we need a little bit of a friend or a girlfriend. I love them.

[00:17:00] Yeah, I love telling all my friends between the different credit cards we used with like we paid 150 bucks to fly to Hawaii and they're like, how did you do that? So that's a great conversation. I think that's a great opportunity to find out how to answer your party.

[00:17:12] That's when the money talks starts happening. Awesome. Use credit cards, but be careful. They can be dangerous. Other financial tips you have other things, you have to buy the money, if you don't pay your debts from your book. Things like that.

[00:17:23] What can young adults do to think about when they want to do better with their money? Yeah, they actually had this given. One of my early chapters, I had three chapters in the book, and then I go to the finance.

[00:17:33] My first one is, basically, it's better than what the lesson that chapter is. The kid keep my little book that makes birds and chess and technology, but my lesson here as well. The guests money and life, nailing the plan, planning the plan.

[00:17:47] So my pot series used time to your van, right? If you're young in your 20s and 30s, if you start putting some money on the limit, it's $100 a week. And building up your time, you can amass a really nice requirement before you're about time you're in your 60s

[00:18:04] and hopefully you retired. Maybe at 60, I retired at 61, I retired from my wife, at 55. We couldn't do that with the start of the year. So use time to your van it and also have five real quicks I'll give you your listeners perfect.

[00:18:19] I actually do an acronym here called Bad B-E-D, the number four S-O, and four S-O. And here's what that means. B is budget element, right? We talked about that in a while here. E is emergency funds. So emergency funds are three to six month-year expenses.

[00:18:36] They don't have to go bar them. D is that P-down? P-down does pretty good as you can. That'd be a good idea. The number four S-O, and four L-K-A-M-I is maximum measure of 401 K company math. And then lastly, S-O is community equipment significant hours.

[00:18:55] My wife can do monthly budget dates hours. Now it's boring. But we do two S-O-Y-A-L-I-S-R-I-S-R-I and we talk about where we are and insulin and for some things we need to plan for. Yeah, those monthly budget meetings are cherished.

[00:19:08] Like it's the reason that we're able to only spend 150 bucks on flights to Hawaii. Right. And we're doing well. So yeah, because I will sing the song of sinking funds or buckets or whatever you want to call them forever. Because that's how we saved up for Hawaii

[00:19:21] is just slowly budgeting money. And I think the fun thing is, is once you get going, it can be a little hard at first, but once you get going, those money talks are fun. They're exciting. They're challenging. Like we had one where my wife and I were debating,

[00:19:33] I had brought up the idea of, hey, what if we borrowed from a grandparent that we know is doing well, used a credit card to pay for her tuition and then paid them back at a lower interest rate that we paid for the credit card.

[00:19:47] Because then we could have got, we didn't end up doing it. Other things came into it. That's the thing is there's more than just the numbers to it. But like things like that, you can optimize. We would have got the companion pass,

[00:19:57] a bunch of rewards and bonuses and things. So there's fun conversations you can have. And I told my wife, we ended up, I obviously wanted to do it. I'm the numbers guy. And I made sure to bring it up to my wife because she's the behavior and the,

[00:20:13] we keep aligned like that. So she's, you know, right? Right, right, you can get her an asset for the table. And I think there was budget date that I'm very, very, very, very, very, very, very, very, very, very much for these pride

[00:20:22] because a lot of the students with one party and couple of likes to partner with me or deal with money. But I think you enrich both of them being that, in that discussion, both of your more heading toward paying goals. Yeah, so she brought in the behavioral aspect.

[00:20:37] We just agreed a little bit, but by the end, I agreed a third we shouldn't do it. And I was like, wow, that was just exciting. Like that was a really deep conversation we had to have a relative relationships, feelings like all that sort of stuff.

[00:20:52] There is a lot of it. That's what I'm worried about. We're really going to be right. We'll talk about what we need to throw up things. Yeah, that was fun. So I always encourage people just start talking about money and gets easier and gets better.

[00:21:04] But we're coming to the end here, Greg. I want to talk about your book and where people can find you real quick, but our last question to get you thinking about it at the end after this is what's one thing you wish

[00:21:14] you would have known sooner when it comes to money. But first, I'll start off by how can people contact you, find your book and such? Yeah. Well first of all, I want to make a comment. I also have a really cool website. It's WDLBAA.edu.

[00:21:27] It is a comment. And I actually guess, a retirement personal finance article on that website, it has some reviews of my books and you get to learn more about me and the book check me. And I don't know if people tell you loads of books.

[00:21:41] It's not only about my experience with the talks about careers, relationships, the states we've made opportunities we've missed and things up with how can you overall increase your packing by doing some new things through my life. So it's a pretty easy 150 page reading. Yeah.

[00:21:58] Change your questions by our one thing and we show them the winner. It's the power of time in our youth. I mean, honestly, I'm like everybody else in 20th and 30th, we don't think about retirement. But I just wish I had put more money away

[00:22:12] even from my 20s and my first time job before I could even start my real career in my little 30s in Hershey. Because that money would have been so dramatic with your retirement by using the back of your retirement. And you don't have to be an aggressive investor.

[00:22:27] You can use basic index runs like more buffets, digests and bledders. And just that money will grow in a 5% range or period of 20 30 40 years. And that's when you're going to have really nice the climate savings by the time you're in your life at these early 60s.

[00:22:44] So time is up. I've used time to manage my buddies. Yeah, time has been answered that question five or six times over the last few weeks. So it's a common one that comes up. So that means if you're hearing it, that means take it seriously. Good.

[00:22:58] Yeah, start it in the next thing now. Good. Good. Awesome. Well, that's fantastic. You've time to your advantage. Use automation to your advantage. Can't see your subscriptions. Lots of great things in today's episode, Greg. Thank you so much for joining me. Thanks for coming.

[00:23:11] I'd like to do it on your list. We're going to play plans on the tips that are in my. Thank you so much to Greg Davis for coming on today's episode. That interview was great. And I know I really enjoyed it. And I hope you did as well.

[00:23:30] And that you'll share this episode of the friend. But first, I want to talk about the money talking points. The first money talking point is are rules of thumb useful. I think they are. I think they're a good starting point.

[00:23:41] But ultimately, you can't hang everything on them because you do have to learn about finances as you grow and do better with money. But a rule of thumb is a fantastic place to start. If you're trying to see a financial independence as possible,

[00:23:53] start with the 4% rule of thumb. That way, you can know 25 times where I expense as annually as this. That's what I have to get to in order to live off the 4% rule. Rules of thumb are a good place to start,

[00:24:04] if you have really no clue what you're doing. So if you're sitting here after listening to that interview, you're like, oh, all those tips are great. But I still don't really know what to do.

[00:24:11] Find a rule of thumb that can help you get started and just go with it. They're a great place to get started. The second money talking point is how can automation play a role in your finances? I think automation can play roles in a lot of people's finances.

[00:24:22] Like I've said before, it helps take the behavior out of personal finance and helps you automate the math. Things like payroll deductions for your HSA or your 401k. Those are automation. Direct deposit is even automation.

[00:24:34] Can you imagine if you had to get a check every week from work? Take it to the bank and deposit it. How boring would that be? Traffic already sucks. Can you imagine if all the traffic was trying to go to the bank at the same time?

[00:24:43] Automation can also play a role in helping you save money. Maybe your paycheck is going to two separate bank accounts because you have automation set up. And I have a great episode of Adam Co. Studies you should go listen to. It's way back, but it's about automation.

[00:24:57] It's going to be really helpful for you. The third money talking point is what are some common mistakes you've also made. This is what I want to hear from you on. Please send me an email or leave a comment on social media.

[00:25:06] What are some common money mistakes that you've made? Let's have a money talk about it on social media or send me a message and I'd love to chat about it. Up next, let's talk about the credit card corner.

[00:25:15] Alright, I know we moved right past credit cards in the interview so I want to talk about them a little bit more here. And talk about my upcoming guide, which is super exciting. But credit cards can be a great tool.

[00:25:35] Next week's episode is going to be a brand new free resource all about credit cards and the great tool that they can be. But you should also know that they can be extremely dangerous. They're often related to a chain saw.

[00:25:47] If you know how to use it well, you can do great work with a chain saw but if you don't know how to use it, it's extremely dangerous in the wrong person's hands. So next week's episode is going to be talking all about credit cards.

[00:25:56] And let's talk a little bit about them. One common myth, their own credit cards, is that you have to carry a balance. And that is busted. That is just not true. Consider that myth busted.

[00:26:05] You do not have to carry a balance on your credit card and that's one of the great insights I'm going to share in next week's episode. So be sure you're subscribed here on YouTube or on whatever podcast player you're listening to this podcast on.

[00:26:15] You do not have to carry a balance on a credit card in order to build credit in order to use the credit card or anything like that. You can pay zero interest on a credit card ever. And still have your credit improve.

[00:26:27] My wife and I have never paid interest on a credit card because we've gotten started so young. And that has allowed us to build our credit scores extremely high. We've never missed a payment. We've never paid any interest which is just saved us money.

[00:26:38] So remember that the myth of you have to carry a balance. If you ever hear someone say that, tell them they're wrong. Just kidding. Don't be rude about it but know that you do not have to carry a balance on a credit card.

[00:26:48] Next let's talk about the money talk mastery with some budgeting strategies. Alright and today's money talk mastery segment we're talking budgeting strategies and I just want to go through a couple of them to give you an idea.

[00:27:08] And the first one is going to be a 50, 30, 20 budget which is a rule of thumb. This one is commonly brought up as just a way for people to get started.

[00:27:15] It can be simple and easy but what it is it's 50% to needs 30% to wants and 20% to savings are debt paid down. I honestly worry that 20% to savings are debt paid down might be too little,

[00:27:26] especially if you're using it for debt paid down. So if you only end up saving 5% you may want to flip some of that once into your savings and debt paid down percentage to make it a whole lot easier there.

[00:27:36] Another option is the zero-based budget. This is what my wife and I do. It's making sure every dollar has a job, you'll hear Dave Ramsey talk about this one a lot but it may be too restrictive for some people

[00:27:46] and it may be too much work to set up every single category to have a job and for your money to all have a job.

[00:27:52] It's a lot to do but once you get the hang of it it's really nice to see that your money is going to specific places. Another budgeting method is the envelope system. This one can be super simple but it can also be a little bit of a pain,

[00:28:03] but it's cash first and you avoid debt altogether because you're using cash and when you run out in an envelope you will know it and you'll feel it. Because you're using cash, it can be very inconvenient but it's a good way to cut spending habits.

[00:28:14] It requires good tracking and behaviors though so this one can be a little daunting to set up but it's not that big of a deal.

[00:28:20] It's not that bad. You have envelopes for your main categories, you figure out your budget for the month you put cash in that envelope and then you spend out of that envelope

[00:28:28] And you may have to transfer between envelopes but I didn't mention that don't say I told you to do that because you should avoid it

[00:28:35] and you should try to stick to your budget really hard but sometimes things come up and you may have to take from one envelope and put it in the other and that's okay But it is a cash first, no debt kind of system so consider it.

[00:28:46] The next one is to pay yourself first or reverse budgeting and this one encourages good savings and it ensures that your savings goals are getting first dibs on your money.

[00:28:54] You do have to know exactly how much money you're bringing in and understand your cash flow in order for this one to work

[00:28:59] You got to know how much you actually need to live on because you don't want to be left with too little to live. It can be very hard to get into regularly if you're already living paycheck to paycheck.

[00:29:08] The next one is priority based budgeting. This one means list out your categories or expenses and then order them from greatest to least priority

[00:29:15] and then allocate your money in that way. This can be a great way to remove spending from things you don't truly value. It could be a good way to say your priorities and understand how you want to spend money.

[00:29:25] It may be easy to value spending, maybe you value categories that require you to spend a lot and it's possible to overspend So you need to make sure that savings is a priority with this priority based budgeting method

[00:29:35] But next I want to talk about the anti-budget which is similar to pay yourself first but it has a better name for those who don't like budgeting. You can say I'm anti-budget But this is still a good way to budget

[00:29:45] But what it is is that putting some money away and then you do not budget the rest you simply give yourself permission to spend what is left over. It's super easy

[00:29:54] So let's say you have a paycheck of $1,000 and you put $200 away there's your 20% and now you have complete permission to spend the rest of the money And that is okay, it's super easy Next is the 80% budget which is kind of why I just use that 80% number

[00:30:11] But it's the same as the anti-budget but it gives yourself a specific percentage to live on. Save 20% spend the rest You could do the same thing without a 70% budget save 30% spend the rest

[00:30:21] The goal is to get you automatically saving and your lifestyle will adjust to the amount that you have left It will I promise if you're not sure read the book the automatic millionaire

[00:30:31] It talks a lot about how your lifestyle will adjust automatically to putting more money into your 401k Putting more money into your investments and having a little less money to live on your lifestyle will be just fine

[00:30:41] The last one here is the bear bones budget and I think this one is one that everybody needs It sucks to have to use because it's a bear bones budget But you need to know what your basic life costs

[00:30:51] What if a series of emergency hits and you really need to cut back how much money do you really need When you already have it set up it makes it a whole lot easier to implement

[00:30:59] So I know the bear bones budget doesn't sound like a great thing and it really isn't because you're probably having to use it out of an necessity But it's something that you have to have figured out

[00:31:07] And here are some practical tips on creating and sticking to your budget as you're thinking through this Give it some time It will take time Don't rush yourself give it a few months Because it's going to take some time and be willing to fail

[00:31:17] I still make mistakes with our budget I put things in the wrong place And maybe that's a math error But we still make mistakes with putting too much in one category And then we have to adjust later things like that It'll all be okay Just get started

[00:31:30] Get started managing your money Start with the anti budget if you're worried about budgeting Just change up your method if you need to If you say, oh I've done the anti budget for six months

[00:31:38] And I think I'm ready to be a little bit more specific with the money that I have left over Change it up Be willing to change That's the awesome thing about finances There's always an opportunity to change and do better

[00:31:48] Next let's talk about the personal finance power up Today's power up is to cancel your subscriptions Turn off auto renewal And then see how many of them you don't need This has been a huge I'm going to call it a life hack

[00:32:08] Because it can save you a lot of money in your life And a lot of time in your life If you have subscriptions They are not trying to use and all that sort of stuff So turn off auto renewal See how many of them you do not need

[00:32:19] Because I bet there's a lot Even for my wife and I And we're pretty careful about our subscriptions We don't just sign up to anything We'll still have a few that I canceled And we didn't really notice and it's okay There's a couple that were maybe like

[00:32:31] Oh I think I'd like to bring that one back But we're going to wait till there's a need for it Then we'll purchase one month and then we'll cancel it Which is a whole lot cheaper than just Buying a year or leaving auto renewal turned on

[00:32:40] So cancel subscriptions by turning off auto renewal And see how many of them you do not need Up next is today's handy hints And they said hints with an S Because I got two of them for you today First on his automation

[00:33:01] And the second one is the 401k match Automation Just like companies make money off of you with automation You got to be sure to make money off of your money Or to make money off of better behaviors and financial habits Using automation

[00:33:14] Like we just mentioned in the power up Canceling subscriptions allows you to take control of automation And your favor because companies are using it to make money off of you A subscriptions So automation things like 401k deposit 401k matches Paycheck deposits into different accounts to save money

[00:33:29] That's a great way to set up your anti budget Put 20% into one account 80% into another and then spend all of that 80% you get And don't even look at the 20% But the other handy hint today is the 401k match And this is because it's part of grace

[00:33:42] Bed for so method in the 4 is the 401k And there's a lot of potential from the company match It's free money that they're planning to give you Anyways as part of your compensation So make sure you're taking advantage of it It's the exact place you need to start

[00:33:56] When you're looking at how much should I contribute to my 401k If you have to do less try really hard to get up to that full match amount And you can also automate your contributions to make this even easier Set it up with your HR or payroll department

[00:34:08] And automate your contributions to your 401k The maximized that match you're getting And if you can go beyond that That's great Of course, make sure your 401k is actually invested My works 401k I don't believe they actually automatically invested The money just sat there and cash

[00:34:23] And that has me worried about all the people that maybe didn't look at their account And it's just sitting there and cash doing nothing So make sure your 401k is actually invested If you're not sure what to put it in

[00:34:32] Find whatever says S&P 500 or US large cap Things like that and invest it in an index Find like that But do a little bit of research first So you understand what you're investing in But that's today's handy hints Let's wrap up today's episode next

[00:34:47] Thank you for listening to today's episode And thank you to Greg for coming on today's podcast We have a lot of clips doing really great on YouTube and social media So be sure to head over to my social media accounts and give them a follow

[00:35:06] Because there's a lot of great stuff going on over there And I appreciate everyone who subscribes to my podcast and on YouTube But to wrap today up Greg Davis provided us with some valuable insights

[00:35:17] And be sure to head over to the show and to find his contact information And his website But we talked about a lot of great things like some financial tips for everyone Automation, budgeting, subscriptions and canfilling those darn things Credit cards and my upcoming guide

[00:35:30] So be sure to subscribe for that And much much more There are a lot of great things in today's episode What did you take away from today's episode? Let me know I'd love to hear more I'm looking forward to next week's episode and you should be too

[00:35:41] My brand new credit card guide resources coming out And there's a lot of great info in it And I'm super excited for it It was actually recommended to me by a listener To create this credit card guide and talk a little bit more about credit cards

[00:35:52] So I'm super excited for my first new resource and quite a while But thank you for listening to money talk I'm your host Skylar Fleming Have a great week Thank you for listening to Money Talk with Skylar Fleming This show is provided for information and entertainment purposes

[00:36:05] And may not be specific to your unique situation Please be sure to do additional research Before making any financial decisions