Episode Transcript:

Welcome to the Meadowsweet Money podcast! I’m Mimi Cirbusova, a Certified Financial Education Instructor and shame-free money mentor. I am so glad you are here today.

One of the things I hear over and over and over again from people that consult with me for one-on-one mentoring is that they tried to budget, and it just didn’t work for them. Or that they can make a budget just fine, but can’t actually stick to it.

If you listened to Episode 2 of this podcast, we talked about the Money Mountain, and I did not use the word budget a single time in that episode. Did you notice that? While I think budgets can be a powerful tool when utilized correctly, most of the time we’re told to make a budget but never shown how to use a budget to make decisions, or how to align that budget to our goals.

Now if the idea of budgeting gives you that visceral, adverse feeling, I want to pause here and invite you to get curious about that. Where does that reaction come from? Perhaps your definition of budgeting won’t mesh with my definition of budgeting. I hope that you’ll hear me out, and give this episode a chance, because there’s going to be some nuggets that might challenge your current way of thinking and looking at budgeting, and maybe even inspire you to give budgeting another shot.

With that, let’s dive into the episode.

My parents are both really talented people. My mom is a master tailor. She not only can alter clothes – and I mean any garment – she also can draft patterns based on a person’s specific measurements. She’s retired now, so no, she’s not doing it as a job anymore. My dad can build and make just about anything out of wood, and repair all sorts of stuff.

Growing up in this kind of household meant I developed some really great fine motor skills, which I do not take for granted. Because my parents are so talented, I grew up learning how to use tools appropriately. They showed me how to safely use all sorts of craft supplies and woodworking tools when I was old enough to listen and follow their directions. And of course, they watched me the first few times I did anything.

And maybe it’s because of that experience, that it’s weird to me that so many people will say, “well, you just need to make a budget”. Because if budgeting is a tool, like a hammer or a sewing machine, you can’t just start using those things without a little bit of instruction. So why do we tell people to use the tool of budgeting without any instruction at all? Just assuming that everyone knows how to do it naturally? It makes no sense to me.

Budgeting, at least to my mind, is a tool that requires a few bits of knowledge from our journey up the Money Mountain. First, you gotta know your real numbers. I know I’ve been saying this a lot, but it’s so so true. I don’t care how good you are at the task of budgeting – if your real numbers aren’t reflected in that budget, it’s not gonna work. But you also have to understand your goals and circumstances. What is it that you’re trying to achieve with your money? What situations might you encounter that can impact what your real numbers are doing? Creating a budget without knowing your real numbers and your goals is like getting out a hammer and a wrench before ever deciding what you’re building. Are you making a birdhouse? Building a fence? Replacing a sink in the bathroom? When someone says “oh, just make a budget”, it sounds like a person that says “oh just use a hammer” when you tell them that your bathroom has flooded.

I digress. What I’m saying is, you have to get clear on foundational levels 3 and 4 of the Money Mountain before we ever start using a budget seriously.

The other thing I want to point out is that a budget is meant to be a close estimate. You don’t have to get every little expense right in your budget, but you should get within a reasonable range. The first time you make one, there’s a good chance it’s going to be off quite a bit – but you’re hopefully in the ballpark. As you practice, you’ll get better and better, and more and more accurate. 

There’s a ton of different ways to budget, and not every style of budgeting is going to work well for everyone. I knew someone that loved percentage budgeting -I mean, loved it. They put 50% towards their necessities, 20% went to savings and investments, and the other 30% is what they lived on. Cool. Great. Someone else might prefer more of the zero-based budgeting method, where you give every dollar a job, and consistently track your income and expenses. That’s great too! The point of this episode isn’t to dive into all the different budgeting methods that are out there, but instead to help you realize that you get to decide what is going to work best for you.

Now before I get too much further in this episode, I want to mention that my budgeting strategy has evolved and changed over time. And that is a very good thing. The budget you make at age 25 or 30 won’t look like, and SHOULDN’T look like the budget you made at 40 or 50. Your budget should pivot and change as you grow and change. When I first started budgeting, I was tracking every single penny (which worked really well for me), and carefully allocating for every expense. But as I got more data over time, and more practice, I loosened up a bit. I don’t track every penny anymore, but I have a very clear picture of what I am aiming to spend at any given time.

Just like there’s different tools out there, each person must choose the right way to budget for them So let’s talk about the six criteria of what makes up a good budget, regardless of what method you choose:

  1. It must be easy to use. What’s easy for one person, may be really difficult and confusing for you, so take that into consideration. You want your budget to be something that isn’t so complicated or cumbersome that you’ll never use it. By the way, apps are great for helping you keep track of your budget and making it visual. But I will strongly argue that an app can only give you the information you feed it. And if you always forget to log into it or you’re not good at updating it when it is needed, well, that app isn’t going to be much more useful than good old fashioned pen and paper.
  2. It’s genuine to who you are. We are budgeting for the life and income we actually have – not the one we wish we had. When it comes to our real numbers, we don’t have to like them to have them be useful to us. If you are making a grocery budget of $50 a week for a family of five, babes, that just ain’t gonna work. And it’s okay if you’re trying to cut back on really out of control expenses. So, start with reality, and then aim for small incremental changes as you get better at budgeting.
  3. It must be aligned with your goals and circumstances. If you know you’re going to have to replace the roof of your house in the next 7 years, your budget should reflect that – even if it is going to take you 7 years to save up 50% of that. It’s okay. And if your goal is to fly to Paris for your anniversary, your budget better have a category to reflect that. Again, the point of a budget isn’t to punish you – a good budget is a permission slip to get you closer to your goals through aligned action.
  4. It must make sense to your brain. I am a big fan of automating savings, investments, and anything else that I can. I knew someone who had set up so many automations for themselves that they had a special checking account separate from everything else that they knew all of their fun money came from. Whatever was in there each paycheck is what they had available to spend. Everything else was out of sight, out of mind, and they only checked on their automations like once a month to make sure nothing fishy was going on. So their quote-unquote “budgeting” was figuring out what was coming up between each payday and what they were willing to spend.
  5. It’s flexible and personal. Your budget categories, meaning the specific areas of spending, should make sense to you and your life. If you need a “chicken coop maintenance” budget category, then it should be in there! I personally have a skincare and haircare category in my budget that is separate from my “manicure/pedicure” category, because that is what works for me. Heck, you can have a “spontaneous fun” budget category if you want to. When it comes to your budget categories, you can be as broad or as narrow as you like, but your categories should capture at least 90% of your typical spending.
  6. It accounts for your due dates and deadlines. This is the last one because I think it’s one of the most overlooked criteria for a successful budget. Your budget isn’t just a spreadsheet of income and expenses. It should also be a timeline of when those expenses will occur. If you’re coming up short during a certain time of the month, it might be that you’re ignoring your payment due dates, or haven’t analyzed when those might be and how those dates relate to each other. Of course, there’s a lot of ways to address due dates for recurring bills, but even things like hey I’m going to be going to a friend’s birthday brunch on the 12th, but don’t get paid until the 17th. That’s helpful to have in your budget.

Those are my criteria of what makes a good budget, but once you have made a budget, how exactly do you stick with it? Everyone’s a little different, but here’s what I think can help:

Tip #1: Make budgeting a pleasurable experience. My money routine, which includes creating my budget and reviewing my expenses from the previous month, is more palatable because I make it so. I have a nice beverage, I make sure I am in my comfy clothes, I have some music playing and the lighting is good. This is like a money date – if I don’t spend a little bit of time each month with my money, we’re not going to have a very good relationship. So carving out 30 minutes a month to just open my accounts, review my expenses, double-check for anything out of the ordinary, and celebrate any progress I’ve made toward my savings and investing goals…well, I make a point to make it as enjoyable as possible means it’s not a chore. You can even enlist the help of a friend. Have a budgeting date night together over a glass of wine if that’s what you need to do. The point here is that you get to choose whether budgeting is a painful obligation or a pleasurable ritual. Personally, I choose the latter.

Tip #2: Use every tool in your arsenal. There is no reason to do math in your head if you are not good at it. I’m not good at it. When I am budgeting for the month, I have out my calculator, my agenda book, my digital calendar, and the little coloring sheets I use to track my savings and investing goals. And of course, I have all my accounts open on my computer. There’s no budgeting merit badge for trying to make a budget based on memory or doing mental math. So make it easy on yourself. 

Tip #3: Practice forgiveness and celebrate wins. As I mentioned earlier, a budget isn’t about laser precision, but about moving in the direction you intend. If you mess up your budget – please do not beat yourself up about it. For any fellow recovering perfectionists out there, my goal with my budget is 1) to stay out of debt, and 2) get at least a B+ when it comes to my savings and investing goals. That’s it. In the times where I mess up and spend money in regrettable or forgettable ways, I take a moment to sincerely forgive myself, and remember that I am a human being. And when I make any progress toward my goals, no matter how small or insignificant it might seem, I take a moment to celebrate it. To remind myself that I am capable of achieving whatever I set my mind to.

Tip #4: Make sure your reason for sticking to a budget is actually motivating. Here’s the deal my friend – you could have the most beautiful, well-laid out, accurate budget of all time. But if your reason for sticking to that budget is an external obligation or because you feel like you “should” be doing it, or because you feel guilty, or because your partner wants you too…you’re just not going to stick with it! There’s a reason that the second foundational level of the Money Mountain is mindset and values. Every level above that is made stronger or weaker based on your work in that second level. When you are motivated from a deep intrinsic place, sticking to your budget is gonna be a little bit easier. And that means working on things like regrettable and forgettable spending. That means understanding the stories you have about money. And having a very clear vision of why you want to make the necessary changes to your financial landscape. And if your vision isn’t super clear yet, if you don’t feel a deep hunger to work towards that vision, that’s okay! That doesn’t mean you’re destined to fail. But I would encourage you to really set aside time to fine tuning that vision. Think of it like going to the eye doctor and they do that thing with the lenses – which is clearer, one or two? Can you tell I’ve worn glasses for a long time? What I’m saying is, having a super clear and provoking vision for your life and how your money plays into that, well it should feel like putting on glasses for the first time. Suddenly everything is sharp and in focus. 

Obviously I am super passionate about this topic. But if you have more questions about this, or want to share any thoughts about this episode, please reach out. I’d love to hear from you. I’m on Instagram @ meadowsweetmoney. Alright my friend, let’s move on to the next segment – and my favorite part of the podcast.

Whew! Who knew for an introvert I could be so chatty? 

In the last episode I announced that I am launching a Patreon in 2024! And it’s not too late to join the waitlist – I have left a link for you in the show notes. When you sign up for the waitlist, you’ll be the first to know when my Patreon is live and get all the details on the benefits you get by becoming a patron. 

Not only will you get access to exclusive events, discounts on workshops and classes, as well as access to our private Discord, you will be directly supporting the creation of this podcast – which means I can continue to provide shame-free financial education to the world. And because patrons are the ones that will be supporting this podcast, you’ll get a special shout out during the In Case You Missed It segment of upcoming episodes!

So please head on over to the link in the show notes or go to patreon.com/MeadowsweetMoney to sign up for the waitlist. There’s no obligation – but you’ll get the first notice of when my Patreon is live and ready.

Cool? Ok, let’s get ready to get a little mindful with our money.

How are you doing my friend? Have you taken a deep breath lately? If it feels good, I invite you to gently roll your shoulders. Take another deep breath.

Today’s mindful money moment is a short one, but I think an important one. It’s about the idea of being ready. 

Being ready is a decision. It’s not an emotion or a feeling. Feelings and emotions, such as anger, sadness, joy… those are conscious mental reactions that often have a physiological connection. We smile when we’re happy. We might ball our fists or feel tightness in our shoulders when we’re angry. 

Many of us are looking to feel ready before we take action on our financial dreams. But because ready isn’t a feeling or an emotion, we will never actually feel ready. We can only decide we are ready.

So what does it take to decide? How do we know that we are ready?

Well, that’s going to be pretty unique to each person, but here’s a few clues.

Ready requires a balance of ingredients, like a good cocktail or recipe. To decide you are ready, you might need to know you have the right resources and timing to move forward, or at least a desire to seek out the resources. 

You probably need some enthusiasm, and maybe consent to take action (whether that be your own consent or someone else’s.) Readiness might require skills or capacity, or at least the willingness to learn some new skills. 

But perhaps the most important, and maybe the hardest for us to be totally honest about, is that you have to want to. Deciding that you’re ready really takes having the desire to take action. And that desire has to be strong enough to sustain beyond the first step. 

The moment I decided to tackle my debt and stop ignoring it, nothing external had changed. There was no dramatic phone call from the bank telling me to pay up. There was no one nagging me or trying to convince me this was a problem. And I certainly didn’t have any new knowledge from one day to the next. In fact, I probably could have kept right on going with my debt.

What changed was that I decided I was ready. I had a deep desire. I had a willingness to learn. And I had just enough time, energy, and motivation to really give it a go. 

So this is what I leave you with today my friend. Maybe a certain money goal has been rolling around in your head for a while but you haven’t taken action on it, or someone else has told you should be working toward a specific goal. Whatever it is, stop looking for the feeling of being ready.

Instead, I invite you to look at your goal at be able to say one of three things:

  1. I have decided that this goal isn’t right for me
  2. I have decided that I’m not ready for that goal quite yet, or
  3. I have decided that I am ready.

Declaring that you’ve made a decision is powerful, because decisions mean ownership. They mean accountability. And it’s okay if the decision is no, or not yet! What matters is that when you are ready to say yes, it’s with your full chest.

That’s all for today. Thank you for listening, and friend, I am so proud of you.