Better Financial Health in 15 Minutes (or less!)

Transform Your Financial Health: Simplified Budgeting and Smart Saving Tips with Stacey Hyde

• Stacey Hyde • Season 1 • Episode 144

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Ever wondered how a small shift in your approach to budgeting can revolutionize your financial health? Stacey Hyde from Envision Financial Planning promises to reveal how dedicating just 10% of your income to retirement savings can pave the way to financial stability and future aspirations. In this episode of Better Financial Health, we break down your monthly income and expenses—covering essentials like rent, utilities, and debt payments, as well as discretionary spending on dining and entertainment—to find strategies that ensure you have money left over. Learn practical tips for boosting your income or trimming your expenses to allocate funds for dreams like buying a house, traveling, or purchasing a car.

But that's not all. Simplifying the budgeting process is key to long-term success. By setting up a budget annually or during significant life changes and automating your savings, you can avoid the daily grind of financial micromanagement. This system is designed to offer you financial stability without constant oversight, making your money work for you effortlessly. Tune in for practical advice on creating a sustainable budget that adapts to your evolving life circumstances. Don't forget to leave a review to help us reach more listeners and spread the good word of financial health. Thank you for joining Stacey Hyde on Better Financial Health, in 15 Minutes or Less!

Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis TN 38137. (901) 422-7526, This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Speaker 1:

Hi, I'm Stacey Hyde with Envision Financial Planning and we're back for another episode of Better Financial Health in 15 minutes or less, and today I'd like to talk about the way that we think about savings, because the way that we approach how we save, how we spend, can really sort of change our attitude toward money, and in many cases I think that's sort of what we need to do in order to have a healthier relationship with our money. A lot of people think of budget as being a bad word and a way to constrain, and in some ways it could be, but I think that there's ways to do it that take some of the pressure off and some of the negative connotations. Because if you sit down and you figure out okay, this is my paycheck. We're going to assume here and I know I'm making a big assumption that you're already putting in at least enough in your workplace savings account assuming you have one to get a total of 10% savings. So if your employer say matches three and a half percent, if you put in six percent, well, that's nine and a half. So you actually need to put in six and a half percent. So you have a total of 10. If your employer matches dollar for dollar up to six percent. Well, yes, that's 12. But don't reduce, because nobody ever gets to retirement and is like dang, I wish I hadn't saved so much. Just promise me. I work with retirees all the time and I've never heard those words. What I hear oftentimes is wow, I really wish I'd started earlier, it would have been easier.

Speaker 1:

So if you think about saving for retirement and your paycheck, what you get, I'm going to assume that you're already putting in plus what your employer puts in enough to get 10% going toward your retirement. So then you have your net check and in most cases that's going to be net of your health insurance premiums. If you've done your tax withholding correctly it should take care of all your taxes. Then that's how much you have coming in. Well, then you also need to figure out how much you have coming in. Well, then you also need to figure out it can be a little bit tricky if you get paid bi-weekly. What I think is an easier thing to do is to take that amount, multiply it by 26 and then divide by 24, so you really kind of get a monthly, even though we all know that there will be four months a year where you get an extra paycheck, which that's also another way to do it, but sometimes, I think, actually has some nice benefits in that you kind of have those bonus checks that you weren't really counting on. But so you take what's coming in on a monthly basis and you subtract from that rent or mortgage or car payments, student loans, any other debt payments, credit cards, anything like that that you owe. You subtract that.

Speaker 1:

Then you have to figure out okay, what are my utilities my cell phone, my cable, my internet, my streaming services. You have to figure out what all those are. It's usually a little bit eye-opening to see what we spend on things like that. Then you need to figure out what your household expenses are. These are things like food, target, walmart, amazon. If you have a pet, what you're spending on your pet for food and treats and doggy daycare, pet sitters, whatever that is. You take that out. Then you have the fun stuff. Like you know, what are you spending on restaurants, movie tickets, concert tickets, and you subtract that. That's going to tell you, and it should be. There should be some funds left over at the end. If not, then you need to go and look and figure out okay, I'm gonna have to free up some money here, because I've already figured out that I'm negative each month.

Speaker 1:

So if you are, then you need to go figure out what you can do to either get more income second job side hustle or what you can cut back maybe renegotiate or sign up for a new cell phone carrier, cut some of your streaming services, things, things of that nature. Change your supermarket. My big grocery hack is shopping Aldi versus Kroger can save you some money. But then look at what's left after that and what. The goal is that there's excess money and you move some of that into a savings account and that becomes what you're going to use for other goals. If you're renting and you want to purchase a house, that can help you grow into being able to purchase a home. If you love to travel, you don't care anything about buying a house because you don't want to take care of the stuff. That's fine too. But you can put some money over there for vacations.

Speaker 1:

If you need a new car, going ahead and moving that money over and not letting it sit in your checking account, because my goal for you is for the money that's coming into your checking account. My goal for you is for the money that's coming into your checking account. That's sort of designated spending money and you don't need to feel guilty about it, because if you go through this process and you say, okay, I've got this much to spend, in some weeks you may not go out to dinner or you may not go to a big concert because you know Taylor Swift isn't performing this month, so you haven't had to save up a lot of money for that particular concert ticket. Whatever it is. You want to do that.

Speaker 1:

And then you want to move the excess into savings, where it's out of sight, out of mind, and you want to automate it. The more you can automate, the less you have to worry. Am I going to be okay? Because we all get busy, we get tired and when we're tired we don't make as good a decision. So we want to set this up to where the money coming into our checking account. That's our spendable money. It's allocated to our bills, it's allocated to our sort of normal walking around, and then we're moving some additional money hopefully $40, $50, $100 a week or paycheck, however you get paid over into this other savings account. That's going to earn you interest not have any fees and that's going to help you interest, not have any fees, and that's going to help you avoid falling into the ditch and being subject to Murphy's Law where something goes wrong on your car or on your home at the time where you have no excess savings, so you start doing it here and then life just gets easier.

Speaker 1:

And as you pay off the student loans, as you pay off the car particularly a car, because you know you're going to at some point need a new one keep putting that money you were paying for a car payment over into savings. So then the next time that you need to purchase a car, you have this savings and so your monthly payment is much lower. And the goal is to get to where you can just pay cash for a car. And the other thing I would really encourage you to keep in mind when you look at cars I know there's car people and there's non-car people. I will admit I fall into the non-car people crowd, although I love my little Subaru, but for me that's about as fancy as I want to get. But cars are a depreciating asset, so the less you can spend on your transportation.

Speaker 1:

Now you want a solid, reliable car that's got the safety features, absolutely. But if you cannot pay or have a thousand dollar a month car payment, you're going to be so much better off because the value of that vehicle is going to decline over time, whereas if you have money in savings, you're going to earn interest. If you have money in investments, you're going to earn capital gains. You're going to earn dividends to earn dividends, and so what you want to do is you want to really think about investing, not in use assets like clothes or cars, but you want to invest in relationships and things that appreciate in value and will grow in value over time. So that's just a different way.

Speaker 1:

I know I've talked about it before, but I really wanted to try to bring it all together and give you a framework for how to think about budgeting. And really, if you can sit down and spend some time doing it, really you don't need to do it more than once a year. Or if you get a big raise or a promotion or change jobs, you want to make your savings automated so that you don't have to micromanage yourself on a day in, day out basis, because really that's not a lot of fun anyway. So thanks for tuning in. This has been another episode of Better Financial Health, in 15 Minutes or Less, and I would love to ask you if you're listening to this and you haven't, please leave us a review wherever you're listening to this, because it does help us reach more people and we would really appreciate it. Thanks so much. I'm Stacey Hyde. With Better Financial Health in 15 minutes or less.