Is there a preferably Budget?
Yes. There is the best budget, and we have outlined the 7+ steps to create it below. Or you could save yourself the time and hassle and accomplish so much more Sign up for the Budget Buster Bundle here.
What is a budget and why do you need one?
If the shortest distance between two points is a straight line, not only do you need to know where you want to go to create the best budget, but you also need to first know WTF you have.
Here’s how a financial snapshot can help you. Get our financial snapshot to see where your X stands here in the Budget Buster Bundle.
X marks the start of your budget
We are sci-fi nerds. When the sci-fi movies on Netflix are exhausted, we watch documentaries about space science. We may even be known to have watched an extraterrestrial conspiracy doc or two.
We are not stable geniuses when it comes to science. We are simply fascinated by space and everything that is and what could be.
Last night we watched a documentary about NASA’s Voyager program (V’Ger). The stated missions of Voyager I and Voyager II were to study Jupiter and Saturn. At least that’s what the public was told. So Jimmy Carter was told to get his Johnny Hancock.
On the DL, several NASA scientists had a secret mission: to reach the outer edge of the Milky Way.
They figured that if they planned properly over the next 30 years and maximized the alignment of the planets, they would whiz past Pluto (which was a planet then, wasn’t a planet then, and is one again now, but maybe not), to reach the outer edge of our galaxy.
Well, in 2012, Voyager I entered interstellar space, leaving the Milky Way. It will not pass any other star for the next 44,000 years – almost as long as Homo Sapiens has existed.
What’s the point of us engaging in this nerdy documentary?
There are several reasons why Voyager I is now farther from Earth than even the smartest NASA scientists expected: Voyager I’s space explorers were completely clear about their starting point. Earth, along with Jupiter, Saturn, Uranus, and Neptune, had to be perfectly aligned for there to be any hope of getting V’Ger past Neptune.
This is why it is so important to know where you stand with your money, your X. It’s about more than just a budget. It’s about knowing your complete financial picture – your financial snapshot, what the Budget Buster Bundle will do for you.
Here’s why you don’t need to create a budget:
Still want to fly Han Solo (like the space theme?) on your own budget? Follow the 7+ awesome budgeting tips below.
How to create your best budget
1. Know your income after taxes (and other things).
Now let me ask, “How much money do you make per year?” No, not the inflated, round number your boss mentioned in your annual report. How much money do you bring home after taxes and deductions?
That’s the number we want.
Realistically, we know that our quoted annual salary is nowhere near what we bring home. We know that we pay taxes before our salary arrives in our account. Don’t forget the rising healthcare costs that are being deducted from our paychecks.
However, most of us still live and spend life as if we are bringing this chubby figure home with us.
So what is the amount of money you take home every two weeks after deducting your medical, dental and other benefits, paying federal taxes, Medicare and other expenses, and deducting 401(k) contributions?
what is The Number?
This number is the number you have to live on every two weeks and is the real start of your budget.
Your current financial snapshot is more than your paycheck
Now you see the connection between NASA’s Voyager program and your salary. You will understand that in order to fully and accurately create a successful financial roadmap, you need a complete financial picture. . . the whole thing and not just what you want to see.
This starts with calculating your true take-home salary. Once you know your actual monthly net income, subtract your monthly living expenses. Below we discuss how to conduct a comprehensive analysis and spend analysis Get it here with the Budget Buster Bundle.
For now, subtract your estimated monthly expenses from your take-home pay. According to this calculation, do you have money left over each month? Are you negative or positive?
Next, add up all your debts. This includes all of your credit cards, the debts you owe to family or friends, your car loans, and any other loans you have to pay back within five years. These are your short-term liabilities. Since these are liabilities, we will soon prepare a plan to pay off these liabilities.
After you calculate your short-term liabilities, add up your long-term liabilities. This includes your mortgage, home equity lines of credit (HELOCs), student loans, and other loans that take five years or longer to repay.
Then add up your short-term and long-term liabilities to get your net liability – all the crap you owe.
Next, add all of your assets. This includes the money you have saved in your emergency savings account, your money in individual and employer-sponsored retirement accounts, and any other cash holdings or investments you have anywhere.
Finally, subtract your net liabilities from your total assets. Do you have a positive or negative balance? If you have a positive record, great! If you have a negative balance, don’t feel bad. At least you know, and . . . . “Knowing is half the battle.” It’s a GI Joe cliché, but it’s true.
If your balance is negative, don’t worry, my God. You may currently have a negative net worth, but the best way to create the best budget is, like NASA, to know where you’re starting.
Congratulations on starting!
2. Conduct a spending analysis
Others think you are fine. Your income is high and you have a good job, but you don’t feel rich. I wonder where all your money goes? You need a spending analysis.
After admitting that we were $51,000 in credit card debt and broke, we wondered how that could be. We were two financial services professionals making good money. Where did our money go and why did it feel like we never had any?
Since David is the number cruncher he is, he grabbed all of our bank statements and gained access to all of our accounts from anywhere. He got everything from every single credit card account to our 401(k)s to our tiny and frequently overdrawn checking account. He then assigned each individual expense for an entire year to multiple headings or expense categories in an Excel spreadsheet.
Everyone. Singles. Cost.
Aside from $1,600 in ATM withdrawals, we figured out why and what we spent every dollar on this year. We could make educated guesses about what we spent our ATM withdrawals on:
- Taxis to clubs
- Cash for door queens in clubs
- Entrance fees for clubs
- Partying in clubs
- Drinks in clubs
- Tips for bartenders in clubs
- Gatorade at 7-11 according to the clubs
Do you see a pattern? Based on our spending analysis, we identified a clear pattern. When every single issue was listed one by one, we were shocked. We made good money. We simply spent everything and more – unconsciously.
All this time we blamed everyone – it was our bosses’ fault, it was the president’s fault, it was everyone’s fault but ours.
Turns out they actually weren’t. It was us. We all.
For many of us, our problem is our spending, not our income. This is why spending analysis is important.
The analysis of our spending analysis
Even though we were spending $400 a week on groceries, we were still spending $400 a week on eating out. That’s $3,200 a month for food for two (formerly) skinny men. How does this happen?
Back then, I was spending $300 to $600 a month on new clothes that I wore to clubs, on trips, to dinner, or whenever I found a reason to buy more clothes.
You could say we were assholes, but we masked our pain with spending, clothes, and clubs.
When you do your own spending analysis, you will also be shocked at where all your money is going. Or make your life easier and Get a copy of our expense analysis worksheet here.
You can find all details about the spending analysis here:
After you’ve done your spending analysis, check again to see if your expenses exceed your income. If this is the case, follow step 2 below.
2. Conduct a spending reduction analysis
If you’re like us, your money problem isn’t that you’re not making enough money. It’s because you don’t manage the money you make. For an example of eye candy, look at Johnny Depp. This is where our spending reduction worksheet that helped us comes in handy.
This is also available in the Budget Buster Bundle!
Nobody gets rich by spending more money than they earn.
The only way to be financially successful is to live below your means with a financial plan, keep more of the money you earn, then save and invest it. If you’re currently spending more than you earn, reducing spending is your next step.
Follow here.
What is the Spending Reduction Worksheet?
If you have analyzed your expenses for the last 12 months. . . Okay, at least the last three months, it will open your eyes because you know exactly where all your money is going.
That’s for the better, because just like you can’t drive from New York City to Los Angeles without clear directions, you also can’t achieve your financial goals without a financial plan.
Part of a solid financial plan is knowing your financial starting point and ending point or goal. But we all know that “the more you know” is nonsense unless you do something with what you know.
It wasn’t until we knew what direction we wanted to go with our financial life and our lives in general that we went from a negative net worth of $51,000 to a positive net worth of $1,000,000.
Our financial success could be your financial success!
How do you complete the Spending Reduction Worksheet?
- Get your spending analysis, whether yours or ours
- Then choose a spending reduction strategy. Popular strategies include:
- Cut all spending by a certain percentage, for example 4%
- Choose a target percentage to reduce/save and then reduce spending categories as needed
- Cut all expenses equally by a dollar amount, say $100
- Choose a target amount to reduce/save and then reduce and trim spending categories as needed
- Then use these new goals as the basis for your budget
Why are you waiting?! This allowed us to pay off $51,000 in credit card debt in less than three years.
Then, within ten years, we amassed a net worth of over $1,000,000. Before we started, $1,000,000 seemed impossible. In hindsight, it was easier than we thought. We just had to start.
So, get started!
Watch as we give you 9 tips to help you trim your budget as quickly as possible:
3. Pay off debt
Debt anchors your future income in your past.
While the minimum monthly charges on credit cards and student loans may be affordable based on your current salary, there’s a good chance that the interest on your debt will take a significant portion of your salary off of it.
When we had $51,000 in credit card debt, we were paying $10,000 a month in high credit card interest. Yikes! What would you do with an extra $10,000 a year in spending money?
Luckily, we can offer you the fastest plan that will not only help you pay off your debt, but will also save you more money in the long run than any other system on the market and increase your credit score to over 750.
Whether you want to implement this plan 100% alone or with a group of other like-minded people is entirely up to you. Check out both options here and Sign up today!
There’s no point in giving credit card companies more of your money.
4. Assign every dollar a job
One of the biggest mistakes people make with their budget is that they only focus on paying their bills and then do nothing with the excess money they may have.
What happens then? This extra money is spent unknowingly, which represents a missed opportunity. The same people then ask, “Where did all my money go?”
Have you ever asked that? One time you had a nice little surplus in your checking account and then suddenly – phew! – it’s all gone.
Here’s the solution: assign a job to every dollar.
After all those small dollar bills have been spent to cover your bills, make sure any remaining dollars have something to do with it too. Otherwise they will run away and disappear (again).
What tasks can those extra dollars do for you? Here are some options:
- Pay off debts
- Invest in your Roth IRA
- Build emergency savings
- Become seed capital for a custodial account for your children
- Enjoy the savings of a large, sophisticated purchase – Think about a new house, a new car or new furniture
- Invest in your side business
Learn more about assigning a job to every dollar here Queer money®:
5. Automate your bill payments
We as humans no longer have to spend a few hours a month being bored writing checks to all of our billers and lenders and then listing those checks in a ledger. Why? Because it’s the 21st century and we have robots.
Long before robots took over the job of your favorite financial advisor, they made paying bills easier than ever before. This science is decided.
So set up as many of your bill payments as possible in Bill Pay or with automatic deductions from your favorite rewards credit card (pay your balance each month) and stop stressing over the little things. Then simply monitor your checking account – be the overseer – and make sure you don’t miss any bills.
Not only will this save you hours and boredom every month, but it will also improve your credit score because you’ll never be late or miss a payment again.
6. Use cash
Despite all the modern conveniences, cash is still king.
Yes, we appreciate our new robot overlords, but they have their limits. The more disconnected we are from the money we spend, especially when it comes to discretionary spending, the more unconsciously we spend.
Did you know that studies show that people who use debit and credit cards spend, on average, 12 to 18% more each?
Even Martha would say, “That’s not a good thing.”
That’s why cash was, is and will be king. So for all your expenses that are not paid for by Bill Pay, withdraw the cash from your checking account and use the envelope system. What is the transshipment system?
Obtain an envelope for each expense that is not paid for by Bill Pay or automatically deducted or remitted for you. On each of these envelopes, write the name of an issue, e.g. B. “Gasoline”, “Food” and “Social Expenses”.
You may also have “babysitters,” “lawn care,” and more. It’s entirely up to you and your needs.
Then withdraw the amount of money you need by your next payday to cover these expenses. Divide your withdrawn money into each envelope as needed to cover your respective expenses.
If you need the money for these expenses, take the cash from the appropriate envelope. If there is cash left in an envelope, leave it there and withdraw less money from your checking account for the next pay period.
This way, you won’t overspend in any category and you’ll end up with extra money to invest in the six investments we mentioned in point 4 above.
Find out more about this Queer money® why cash is king:
7. Track your progress twice a month
Back to monitoring. . . specifically with your budget. . . Monitor your progress twice a month. This takes less time than you think, ensures success with your budget, and increases your chances of long-term financial success.
In fact, this double checking is so successful that we remind our readers about it on social media To do this, join the Queer Money Facebook group twice a month.
5 ways to improve your budget
1. Avoid going over budget
It’s a sneaky little bitch. It’s intrusive and precarious. What is that?
It’s a budget crawl.
Budget creep, not to be confused with TLC or Radiohead’s “creep,” is the increase in spending beyond your budget that happens soooooooooo slowly that you don’t even notice it. It’s the answer to the question “Where the hell did my money go?”
It drains your budget and frustrates your goals, and it leaves even the most responsible among us blowing up bigger wads of cash than we have.
Budget creep is often caused by triggers that allow us to either unconsciously or consciously disregard our budget or make exceptions here and there, such as the unwise recent fling with your ex.
Know your triggers.
Triggers include stress, sadness or depression, the loss of someone or something, or even celebrating someone or something.
One of the most common symptoms of budget creep is not paying attention to your budget or your checking and savings accounts. Often the voice in your head says something like “You deserve it” or “This is the last time.”
PS: It won’t be the last time unless You really change your mind.
Learn all about budget creep (and how to avoid it):
2. Find not so expensive (NSE) alternatives
The stereotype has been embedded in our DNA for so long: gay men live fabulous lives. Sorry to burst your laughing gas bubble, but we’re not all white, upwardly mobile gays who live in modern houses and drive Audis A4s – even though we might like to be.
Once upon a time, as David’s father would say, we lived a champagne lifestyle on a beer budget. Well, Mr. Stein from Steins Law says that if something can’t go on forever, it won’t. It’s like physics or math or something.
Here’s the deal, there’s an NSE alternative for everything. These may not be alternatives you want forever, but they’ll do for now as long as you have bigger, better, and worse goals. And the more NSEs you find, the easier and longer it will be to stay debt-free.
We found NSE alternatives to watching TV, drinking wine and meeting our annual gay travel quota. If we can do it, you can too.
David shared more great NSE sauce in the video below. Take a look.
David says on the wisdom of NSE:
3. Avoid feeling (too much) guilt
We get it! Life is hard, especially these days, and the only way to get by is your guilty pleasures. But too much of anything is bad, usually for both your health and your budget.
So we developed a 3-step plan to live a FULL (yes, an L) life. Get all the details on how you too can live a FULL life and make your money stretch beyond your waistline.
Learn how to easily (not completely, but sufficiently) give up these guilty pleasures:
4. Select your milestone rewards
Use milestone rewards to reach your money goals.
Milestone bonuses are affordable rewards we give ourselves when we reach milestones in achieving financial goals. They also don’t destroy our financial goals because they are too high. Examples include going to the cinema, having an inexpensive dinner, drinking a good bottle of wine, or buying an affordable yet stylish item of clothing – perhaps a cool t-shirt.
Milestone bonuses should provide enough incentive to keep you on track toward your financial goals and not discourage you from saving and investing.
Want to learn more about milestone rewards? Of course we also have a video for you.
Reward yourself by watching this video about milestone rewards:
5. Money chunking
In this Monday Money Minute, one of our first ever videos, David shared our money chunking trick. By pooling money, today’s paycheck lasts until your next paycheck.
What is Money Chunking?
You might think the star of this video is David, but that’s not the case. It’s a waste of money. You know when you go out with the guys and say, “I’m NOT spending all my money at the club tonight,” and then you spend all your money at the club that night?
That’s a budget overrun (see above), and scraps of money are your problem.
Money chunking is the process of dividing the amount of money allocated in each category of your budget into smaller chunks that spread the money allocated in each category over longer periods of time.
This step is the final step of budgeting and will stretch your money as far as you need it.
Watch my hunk give you a dollop of money in pieces:
https://www.youtube.com/watch?v=TyKO3-ePTr
Why you don’t have to create a budget
Does the thought of creating this budget make your head spin?
Is your financial situation stressing you out now? Maybe you’re living paycheck to paycheck and worried you wouldn’t be able to cover even a simple emergency. By now you know that budgeting is the solution you need, but you don’t know where to start.
First: stop it! Don’t make a budget.
We’ve done it for you.
Below we introduce the tools included in our Plug and Play Budget Buster Package. We discuss the current statistics surrounding budgeting in the US and explain why the Budget Buster Bundle is critical to your financial success.
We’re talking about the value of a “dynamic” budget, which gives you the flexibility to live a real life and allows you to spend on the things that truly make you happy.
Hear the best reason not to create a budget:
Everything you need to know about the Budget Buster Bundle
The Budget Buster Bundle is more than just a budget planner or budget organizer. You can get this at Target.
The Budget Buster Packages a whole system.
First, we will introduce you to our spending analysis and the above-mentioned spending reduction step by step, including videos.
Then we’ll tackle the biggest spending problem for most Americans – your food budget (groceries and dining out). We’ll give you our best tips on how to curb overspending on food and still enjoy eating.
Additionally, we provide you with our exclusive shopping lists and menu templates to simplify your grocery shopping and reduce food waste, resulting in savings on grocery expenses.
Finally, we’ll show you how to create your own dynamic budget. We’ll help you decide which expenses are most important to you, then create a plan to finance those bigger pieces in your life so that your life feels more fulfilling even when you spend less.
See?! Budget is not a 4 letter word.
Oh, we lied. The actual end result with that Budget Buster Package are our 47 delicious recipes that your family is sure to love and fit within your budget. The best part is that many of the recipes can be made in your slow cooker. So you essentially cook for yourself while you have fun somewhere else.
As you can see, the Budget Buster Bundle is more than a monthly planner, more than a budget planner or a budget organizer. It’s even better than YNAB.
Why?
Because the Budget Buster Bundle covers all the areas where people struggle most with budgeting and offers full-time support from us.
See for yourself and Sign up for the Budget Buster Bundle here.
How to budget better as a couple
“How do I get my partner on the same side of money as me?” This is the most common question we get asked.
Here’s the thing. Money is an emotional issue for people and their solution is to not talk about money.
That’s not a solution.
What is the best way to start this topic? Start slowly.
By “start slowly” we mean that you and your partner should each exchange a little information. Share a little more over time. Then finally, share a little more.
Little by little something becomes a lot. Suddenly you’re both on the same page and a conversation about money hasn’t turned into an argument about your lack of money.
Hear the former CEO of Honeyfi explain why couples who talk about money have better sex. This is what makes a happy marriage.
Sam Shultz continued Queer money®:
A basic building block for success with money is a budget. Although people equate a budget with a diet, budgets don’t have to be a negative experience.
Flip the script like we did. Our budget doesn’t tell us what we can’t do. It tells us what we can do and when. This way we don’t regret our spending.
Freeing yourself from spending regrets and financial anxiety will make your new budget worth it.
And don’t worry about searching or spending days creating a budget. Just sign up and get the Budget Buster Bundle here.
Here are more ways to end financial anxiety: