Budget Better bonus series Step one, Look to the Past.

Budget Better bonus series Step one, Look to the Past.

Welcome to the Frugal Friends podcast, where you'll learn to save money, embrace simplicity, and liver your life. Here your hosts Jen and Jill.

Welcome to the Frugal Friends podcast, where you'll learn to save money, embrace simplicity, and liver your life. Here your hosts Jen and Jill.

Welcome to the Frugal Friends podcast. My name is Jen, my name is Jill, and we wanted to give you a little post holiday gift or mid holiday or mid holiday gift wherever you're at, and we wanted to help you budget better in twenty twenty five with a three part bonus series we're calling Budget Better, and today's first step is looking to the past.

Welcome to the Frugal Friends podcast. My name is Jen, my name is Jill, and we wanted to give you a little post holiday gift or mid holiday or mid holiday gift wherever you're at, and we wanted to help you budget better in twenty twenty five with a three part bonus series we're calling Budget Better, and today's first step is looking to the past.

We're also going with a little bit of a Christmas theme, Past present, future, so this is like what you can expect from it.

We're also going with a little bit of a Christmas theme, Past present, future, so this is like what you can expect from it.

Think about that.

Think about that.

Oh yeah, the ghost of Christmas past, present, in future.

Oh yeah, the ghost of Christmas past, present, in future.

It all makes sense.

It all makes sense.

So this so today we're looking to the past. We're just doing a quick twenty minute episode. Then we're going to release part two, which will be Step through, which is the present changes you can make now, and then we're going to do Step three plan for the future. So this is all happening kind of right in a row. So if you love getting content from us, keep tuning in.

So this so today we're looking to the past. We're just doing a quick twenty minute episode. Then we're going to release part two, which will be Step through, which is the present changes you can make now, and then we're going to do Step three plan for the future. So this is all happening kind of right in a row. So if you love getting content from us, keep tuning in.

Yes, okay, so as the ghost of Christmas past, I'd like to take you on a journey to your past, but not to make you feel guilty or like a bad person. We are I'm feeling like more like a muppet like now, I'm feeling like like a kermit. I want to help you. I want to encourage you and help you feel neutral about your spending. So before we get into the past, let's just set a foundation of neutrality. We are looking and we're not judging. That's really what we are doing. So let's start there, and then we are going to do a walkthrough of the last ninety days of our transactions. And yes, I understand it's the end of December. You might want to go Hey, all of my spending was really wonk you over the holidays. I'm just going to go back to like August, September, October, much more normal. And no, we really want you to go through the last ninety days. And here's why. It's because this is a more accurate depiction of your current habits now and so we'll talk about that tomorrow. But we're looking at the most recent past. So not no eletons in your closet, because when we go back to the past, past, the way back. That doesn't help us get to the now or the future. It just makes us feel sad.

Yes, okay, so as the ghost of Christmas past, I'd like to take you on a journey to your past, but not to make you feel guilty or like a bad person. We are I'm feeling like more like a muppet like now, I'm feeling like like a kermit. I want to help you. I want to encourage you and help you feel neutral about your spending. So before we get into the past, let's just set a foundation of neutrality. We are looking and we're not judging. That's really what we are doing. So let's start there, and then we are going to do a walkthrough of the last ninety days of our transactions. And yes, I understand it's the end of December. You might want to go Hey, all of my spending was really wonk you over the holidays. I'm just going to go back to like August, September, October, much more normal. And no, we really want you to go through the last ninety days. And here's why. It's because this is a more accurate depiction of your current habits now and so we'll talk about that tomorrow. But we're looking at the most recent past. So not no eletons in your closet, because when we go back to the past, past, the way back. That doesn't help us get to the now or the future. It just makes us feel sad.

Yeah, if you are a listener of the Frugal Friends podcast, you know we've talked about a ninety day transaction inventory. It's also one of the things that we go in depth on in the book by what you Love without Going Broke. And if you are a visual person, you can get a walk through video of the ninety day transaction inventory on the with the Resources page, so everyone who gets the book just gets access to that. We mention it throughout the book, so make sure you do that so you can also have a visual element and component added to this. This is one of the first steps that we recommend before even considering creating a budget, because we have to know what are our current spending habits, how do we engage with money, where are impulse spending transactions happen to even know the shifts that we need to make and what we want to be doing with our money, how we want to be allocating it. So what we're going to do is collect the last ninety days of transactions. This is going to include going back to your credit card statements, your bank statements and getting it all into one spreadsheet and and sorting it that way. But we also want to include every single transaction, so we're not excluding what we're paying for rent, what we're paying for our mortgage, some of our more fixed expenses. We want to be able to look at the whole picture of all of our spending over the last ninety days, So get that into a spreadsheet to be able to then visualize this. The cool thing about a spreadsheet as well, is we can then order it however we want. We can order it by date, we can order it by location, we can order it by spending amounts, so that there's a variety of ways that we can kind of observe ourselves. Another kind of piece that we want to add to this, and you've heard us describe this before, but the questions that we're going to then eventually ask ourselves about these transactions, we want to avoid the why question. So once we have this whole ninety days of transactions compiled, and whether you're going to work in a spreadsheet digitally or you print them out, you can do that too. If you do print it out, I would just recommend having it in order, in date order, and you can kind of look at the various components that way as well. But then what we want to be doing is having a almost journal prompt in the column to the right of each transaction, where we're able to ask ourselves questions like what came just before this purchase, how did I feel about this purchase? Did it achieve or get me what I wanted this spending to get me? Of course we're not going to remember that with every single transaction, but as much as we can looking back to it, this can also help us to understand some of the habits. We can look at, you know, kind of what is the queue that might have led to this spending, is their location, proximity, time of day, people that I'm around, and asking ourselves what led to this spending, not why did I spend so much here? That's going to be one of those ways that we can approach this ninety day transaction inventory with neutrality is by not asking ourselves inflammatory questions.

Yeah, if you are a listener of the Frugal Friends podcast, you know we've talked about a ninety day transaction inventory. It's also one of the things that we go in depth on in the book by what you Love without Going Broke. And if you are a visual person, you can get a walk through video of the ninety day transaction inventory on the with the Resources page, so everyone who gets the book just gets access to that. We mention it throughout the book, so make sure you do that so you can also have a visual element and component added to this. This is one of the first steps that we recommend before even considering creating a budget, because we have to know what are our current spending habits, how do we engage with money, where are impulse spending transactions happen to even know the shifts that we need to make and what we want to be doing with our money, how we want to be allocating it. So what we're going to do is collect the last ninety days of transactions. This is going to include going back to your credit card statements, your bank statements and getting it all into one spreadsheet and and sorting it that way. But we also want to include every single transaction, so we're not excluding what we're paying for rent, what we're paying for our mortgage, some of our more fixed expenses. We want to be able to look at the whole picture of all of our spending over the last ninety days, So get that into a spreadsheet to be able to then visualize this. The cool thing about a spreadsheet as well, is we can then order it however we want. We can order it by date, we can order it by location, we can order it by spending amounts, so that there's a variety of ways that we can kind of observe ourselves. Another kind of piece that we want to add to this, and you've heard us describe this before, but the questions that we're going to then eventually ask ourselves about these transactions, we want to avoid the why question. So once we have this whole ninety days of transactions compiled, and whether you're going to work in a spreadsheet digitally or you print them out, you can do that too. If you do print it out, I would just recommend having it in order, in date order, and you can kind of look at the various components that way as well. But then what we want to be doing is having a almost journal prompt in the column to the right of each transaction, where we're able to ask ourselves questions like what came just before this purchase, how did I feel about this purchase? Did it achieve or get me what I wanted this spending to get me? Of course we're not going to remember that with every single transaction, but as much as we can looking back to it, this can also help us to understand some of the habits. We can look at, you know, kind of what is the queue that might have led to this spending, is their location, proximity, time of day, people that I'm around, and asking ourselves what led to this spending, not why did I spend so much here? That's going to be one of those ways that we can approach this ninety day transaction inventory with neutrality is by not asking ourselves inflammatory questions.

Yeah, so if you don't want to do a spreadsheet, if that feels a little overwhelming, you can also use your budgeting app. And so this is going to work best if you're using an app that you pay for that has transactions automatically uploaded. I know with the fall of Mint, there's not a lot of if any free budgeting apps that can do that for you. But if you do payper one like wine app or Monarch, which is our favorite one right now, then this you can do this really easily. You can sort it by category, by place, by date, and it brings It's very versatile, so you can look at these patterns more easily. But otherwise a Google spreadsheet will do just fine.

Yeah, so if you don't want to do a spreadsheet, if that feels a little overwhelming, you can also use your budgeting app. And so this is going to work best if you're using an app that you pay for that has transactions automatically uploaded. I know with the fall of Mint, there's not a lot of if any free budgeting apps that can do that for you. But if you do payper one like wine app or Monarch, which is our favorite one right now, then this you can do this really easily. You can sort it by category, by place, by date, and it brings It's very versatile, so you can look at these patterns more easily. But otherwise a Google spreadsheet will do just fine.

And you can if that sounds interesting too, frugal friendspodcast dot com slash Monarch, I think that they're running a sale.

And you can if that sounds interesting too, frugal friendspodcast dot com slash Monarch, I think that they're running a sale.

Yes, if you use Frugal friendspodcast dot com slash monarch, you get thirty percent off of your first year, so that's really great.

Yes, if you use Frugal friendspodcast dot com slash monarch, you get thirty percent off of your first year, so that's really great.

So when we do this ninety day transaction inventory and we've got it all gathered in our way that feels best to us, again, whether that's paper or digitally or through an app, and we're starting to see where our spending is happening, noticing any patterns that might be coming to the surface because of these non judgmental why questions that we're asking ourselves. A couple of things that we can expect to see is patterns, patterns of spending, patterns of behavior. We will probably start to see maybe what type of impulse spender we are. Whether we are primarily making unplanned purchases out of habit, if we're making unplanned purchases because of social influence, We're making unplanned purchases because we like to shop as an activity or as the result of stress or other ranges of emotion. Maybe it's the thrill of the hunt. We are impulse spending on any deals or price reduction stickers that we may see. These are the types of things that are going to be informative for us when we do get to that point of making a spending plan, because the ways in which we shift our behaviors need to be congruent with the behaviors that need to be shifted. And so that's something that the ninety day transaction inventory can bring to the surface, is how am I even engaging in this? In what way am I spending maybe unnecessarily or in what ways do I want to be shifting? Do I not even remember some of these purchases that I made, and therefore I can say that wasn't actually that important? So I might be able to eliminate those things, so we can start to get an idea of the purchases we felt really good about, the ones we forgot kind of the easy knows, and start to kind of parse this out of what do I want to keep for the future, what feels good to me and congruent with my needs and my values, and what of this can I start to put on my easy no list. This is going to be an easy thing to throw out or at least for a time, say no to.

So when we do this ninety day transaction inventory and we've got it all gathered in our way that feels best to us, again, whether that's paper or digitally or through an app, and we're starting to see where our spending is happening, noticing any patterns that might be coming to the surface because of these non judgmental why questions that we're asking ourselves. A couple of things that we can expect to see is patterns, patterns of spending, patterns of behavior. We will probably start to see maybe what type of impulse spender we are. Whether we are primarily making unplanned purchases out of habit, if we're making unplanned purchases because of social influence, We're making unplanned purchases because we like to shop as an activity or as the result of stress or other ranges of emotion. Maybe it's the thrill of the hunt. We are impulse spending on any deals or price reduction stickers that we may see. These are the types of things that are going to be informative for us when we do get to that point of making a spending plan, because the ways in which we shift our behaviors need to be congruent with the behaviors that need to be shifted. And so that's something that the ninety day transaction inventory can bring to the surface, is how am I even engaging in this? In what way am I spending maybe unnecessarily or in what ways do I want to be shifting? Do I not even remember some of these purchases that I made, and therefore I can say that wasn't actually that important? So I might be able to eliminate those things, so we can start to get an idea of the purchases we felt really good about, the ones we forgot kind of the easy knows, and start to kind of parse this out of what do I want to keep for the future, what feels good to me and congruent with my needs and my values, and what of this can I start to put on my easy no list. This is going to be an easy thing to throw out or at least for a time, say no to.

Yeah, that no list is so important to make, and we'll go into that a little bit more in the next in tomorrow's episode, But we need to have a no list and a yes list. We need to have both lists, and they don't need to be long, especially when you're first starting out, but we need to start drawing some lines in the sand of These are the things I will not buy anymore because I don't want to buy them. And these are the things I will buy without guilt because I love to buy them regardless of what other people think or what other people want me to spend on. These are my three to four things on each list that I'm going to either buy or not buy.

Yeah, that no list is so important to make, and we'll go into that a little bit more in the next in tomorrow's episode, But we need to have a no list and a yes list. We need to have both lists, and they don't need to be long, especially when you're first starting out, but we need to start drawing some lines in the sand of These are the things I will not buy anymore because I don't want to buy them. And these are the things I will buy without guilt because I love to buy them regardless of what other people think or what other people want me to spend on. These are my three to four things on each list that I'm going to either buy or not buy.

And that's talking about some of this discretionary spending, But as we mention, all of your more so fixed expenses are also on this ninety day transaction inventory. So this is a good time to even be able to question some of those expenses. We're not saying you're going to be moving in the next month or now you automatically have to sell your car, but it is worth being able to look at these larger expenses, the things that take up the majority of our budget, and are there questions and considerations that we can be asking ourselves when it comes to housing. If you are thinking about moving soon, certainly this is a good opportunity to look at what am I currently spending on housing? What would my goal be for the next place that I live? How much of my income could I allocate here? It could also be as simple as are there ways of reducing my insurance costs on my house or rental costs at the place that I'm living? Are there things that I can do when it comes to transportation to be able to reduce those costs? And planning on buying a car soon, should I be considering what type of vehicle and what's going to be kind of within range for the money that I have and the goals that I have with my money, And again as simple as are there ways to reduce insurance costs and kind of my monthly overall expenses if I'm not planning on making a big purchase, massive money decision when it comes to these things, and of course food is a massive area of spending for a lot of us. What am I noticing specifically as it relates to my food purchases, my food habits, How might that inform the way that I want to engage with this aspect of my lifestyle. So some of these fixed expenses can still be questioned at this stage.

And that's talking about some of this discretionary spending, But as we mention, all of your more so fixed expenses are also on this ninety day transaction inventory. So this is a good time to even be able to question some of those expenses. We're not saying you're going to be moving in the next month or now you automatically have to sell your car, but it is worth being able to look at these larger expenses, the things that take up the majority of our budget, and are there questions and considerations that we can be asking ourselves when it comes to housing. If you are thinking about moving soon, certainly this is a good opportunity to look at what am I currently spending on housing? What would my goal be for the next place that I live? How much of my income could I allocate here? It could also be as simple as are there ways of reducing my insurance costs on my house or rental costs at the place that I'm living? Are there things that I can do when it comes to transportation to be able to reduce those costs? And planning on buying a car soon, should I be considering what type of vehicle and what's going to be kind of within range for the money that I have and the goals that I have with my money, And again as simple as are there ways to reduce insurance costs and kind of my monthly overall expenses if I'm not planning on making a big purchase, massive money decision when it comes to these things, and of course food is a massive area of spending for a lot of us. What am I noticing specifically as it relates to my food purchases, my food habits, How might that inform the way that I want to engage with this aspect of my lifestyle. So some of these fixed expenses can still be questioned at this stage.

It's important to look at the past because and especially not to separate housing from transportation. They are intertwined. I know, so much of the advice that we hear is you're looking at your housing and you're saying, oh, can I move maybe a little further away to save on housing, and they don't take into consideration transportation, where if you're breaking down the costs and looking on what you've spent in the past, you can maybe see maybe it is more I save more money by moving closer to my job and having higher rent, because then we can go down to one car and I save an entire car payment. So when we look at the numbers from the past instead of just blindly like following financial advice from people who don't know us, then we can make informed, mathematically accurate decisions for our situation. And it's the same with food. If we're looking at our past food spending and we are looking at these triggers that come around food, so I'll just we use the cues from atomic habits, so time of day, location, preceding event, or preceding location, other people that you're with. So this is a real These are really good ones to use for food because food tends to be a habit purchase more than anything. So looking at each of your food purchases and trying to connect them back to one of these habit cues or triggers can help you choose which one that you might want to focus on when we go into our next phase tomorrow.

It's important to look at the past because and especially not to separate housing from transportation. They are intertwined. I know, so much of the advice that we hear is you're looking at your housing and you're saying, oh, can I move maybe a little further away to save on housing, and they don't take into consideration transportation, where if you're breaking down the costs and looking on what you've spent in the past, you can maybe see maybe it is more I save more money by moving closer to my job and having higher rent, because then we can go down to one car and I save an entire car payment. So when we look at the numbers from the past instead of just blindly like following financial advice from people who don't know us, then we can make informed, mathematically accurate decisions for our situation. And it's the same with food. If we're looking at our past food spending and we are looking at these triggers that come around food, so I'll just we use the cues from atomic habits, so time of day, location, preceding event, or preceding location, other people that you're with. So this is a real These are really good ones to use for food because food tends to be a habit purchase more than anything. So looking at each of your food purchases and trying to connect them back to one of these habit cues or triggers can help you choose which one that you might want to focus on when we go into our next phase tomorrow.

Well, this leads us to one of my favorite parts of typical life.

Well, this leads us to one of my favorite parts of typical life.

We say, yeah, even in a bonus round, we can't get you can't get rid of it, the lightning round poo pew.

We say, yeah, even in a bonus round, we can't get you can't get rid of it, the lightning round poo pew.

Sorry, friends, we don't have a bill of a week in our bonus.

Sorry, friends, we don't have a bill of a week in our bonus.

I know those are special.

I know those are special.

We might have been letting you down just now, but you did get the sound effects.

We might have been letting you down just now, but you did get the sound effects.

All right, So what is something? So we recommend doing a ninety day transaction inventory once a year, no matter how long you've been budgeting, no matter where you're at. There are some things that you can do less often after you've been doing them for a while, but always to do a ninety day transaction inventory at least once a year. When you're starting out, you may do it three or four times a year. It's really beneficial to take that inventory more frequently when you are first learning this stuff. So in our last ninety day transaction inventory, we're going to share with you what's something that you noticed, and I will go first. So for me, I don't budget monthly anymore, and so I keep an eye. I do use Monarch. It's not just something that I like promote and I love the option to have a widget on my phone with my most recent transactions there. So I keep tabs on the transactions. I make sure the transactions are all ones that I have made or Travis has made. That's a big, a big reason to be continuously checking in with your spending to make sure nobody has taken your credit card information buying things without your knowledge. But so, yeah, I do that, And I look at the cash flow when we're doing our transaction inventory, and something that surprised me was the amount of excess we had each month when it felt like we were just like I knew we were breaking even, but to see month over month the amount of cash flow extra cash flow that we had was encouraging and.

All right, So what is something? So we recommend doing a ninety day transaction inventory once a year, no matter how long you've been budgeting, no matter where you're at. There are some things that you can do less often after you've been doing them for a while, but always to do a ninety day transaction inventory at least once a year. When you're starting out, you may do it three or four times a year. It's really beneficial to take that inventory more frequently when you are first learning this stuff. So in our last ninety day transaction inventory, we're going to share with you what's something that you noticed, and I will go first. So for me, I don't budget monthly anymore, and so I keep an eye. I do use Monarch. It's not just something that I like promote and I love the option to have a widget on my phone with my most recent transactions there. So I keep tabs on the transactions. I make sure the transactions are all ones that I have made or Travis has made. That's a big, a big reason to be continuously checking in with your spending to make sure nobody has taken your credit card information buying things without your knowledge. But so, yeah, I do that, And I look at the cash flow when we're doing our transaction inventory, and something that surprised me was the amount of excess we had each month when it felt like we were just like I knew we were breaking even, but to see month over month the amount of cash flow extra cash flow that we had was encouraging and.

Oh nice, like you were living kind of lower me without really putting that much intention into it. Just it's natural life.

Oh nice, like you were living kind of lower me without really putting that much intention into it. Just it's natural life.

And I knew we were doing it. I knew. It's one of those things like I knew we were doing it, but you still, like, without checking in, you can't be sure. And so that's why we also tell people when you do something like this, the anticipation is always worse than the actual end result. You always think it's going to be worse than it actually is.

And I knew we were doing it. I knew. It's one of those things like I knew we were doing it, but you still, like, without checking in, you can't be sure. And so that's why we also tell people when you do something like this, the anticipation is always worse than the actual end result. You always think it's going to be worse than it actually is.

I think, yeah, in part because even if there's big shifts that need to be changed, just pulling the veil back and looking can help to remove some of that that shame, that fear. Being able to look at something and know the realities of it can automatically dissipate some of those the mystery of it.

I think, yeah, in part because even if there's big shifts that need to be changed, just pulling the veil back and looking can help to remove some of that that shame, that fear. Being able to look at something and know the realities of it can automatically dissipate some of those the mystery of it.

Yeah, but I was happy with what all of our spending was. That's cool the year.

Yeah, but I was happy with what all of our spending was. That's cool the year.

Do you have a preferred way of arranging the transaction inventory? I like to do it by date, but do you have a preference.

Do you have a preferred way of arranging the transaction inventory? I like to do it by date, but do you have a preference.

I also like to do it by date in groups of months. Monarch makes it very easy to do that, to see it month by month, or to see all the transactions together. But there were sometimes where I forgot or maybe it was like mismarked. It was at the very end of the month, so it was put into the next month when it should have been in the last month. It was then easy to click on that transaction and see all those transactions back to back.

I also like to do it by date in groups of months. Monarch makes it very easy to do that, to see it month by month, or to see all the transactions together. But there were sometimes where I forgot or maybe it was like mismarked. It was at the very end of the month, so it was put into the next month when it should have been in the last month. It was then easy to click on that transaction and see all those transactions back to back.

Yeah.

Yeah.

So that is and that's something easy you can do in the Google sheet too, when you just sort buy out like alphabetical and you can see all of the all of one transaction type in a row. Yeah.

So that is and that's something easy you can do in the Google sheet too, when you just sort buy out like alphabetical and you can see all of the all of one transaction type in a row. Yeah.

Yeah. For me, I noticed that we spend the majority of our money on the weekends. We don't really leave the house very often during the week. We work from home. I've gotten really good at eating at home and meal planning and cooking throughout the week. But then I think because of that, just because we're human and we need to get out and we need some sort of difference in stimulation and spontaneity, that will then be when we kind of make all of our purchases, and some of them are necessary, like we're running our errands, it's when we're getting our groceries. But it kind of then spikes on the weekends and then dips during the week, And so in some ways it helped it inform are there ways that I can rearrange what I do during the on the weekends, Like, is some of this just to get me activity? Is some of this shopping as an activity? What of this is actually getting me like the things that I need and want? Where can I make shifts? So it has led to just a greater awareness of free activities both on the weekend and throughout the week, knowing I do need to get out, but I don't necessarily want that to lead to increased spending, and how can I kind of spread this out a little more so it doesn't feel like whiplash for me throughout the week. So, yeah, interesting observations.

Yeah. For me, I noticed that we spend the majority of our money on the weekends. We don't really leave the house very often during the week. We work from home. I've gotten really good at eating at home and meal planning and cooking throughout the week. But then I think because of that, just because we're human and we need to get out and we need some sort of difference in stimulation and spontaneity, that will then be when we kind of make all of our purchases, and some of them are necessary, like we're running our errands, it's when we're getting our groceries. But it kind of then spikes on the weekends and then dips during the week, And so in some ways it helped it inform are there ways that I can rearrange what I do during the on the weekends, Like, is some of this just to get me activity? Is some of this shopping as an activity? What of this is actually getting me like the things that I need and want? Where can I make shifts? So it has led to just a greater awareness of free activities both on the weekend and throughout the week, knowing I do need to get out, but I don't necessarily want that to lead to increased spending, and how can I kind of spread this out a little more so it doesn't feel like whiplash for me throughout the week. So, yeah, interesting observations.

Yeah, Well, thank you so much for joining us in step one of the budget Better Bonus series. Tomorrow we will be back with step two, which is what do we do with changes now as a result of what we've learned from our past transactions, See you then. Frugal Friends is produced by Eric Sirianni

Yeah, Well, thank you so much for joining us in step one of the budget Better Bonus series. Tomorrow we will be back with step two, which is what do we do with changes now as a result of what we've learned from our past transactions, See you then. Frugal Friends is produced by Eric Sirianni