Episode Transcript
[00:00:00] Speaker A: Fellas, imagine walking into a quarterly earnings call with Warren Buffett and telling him, we made a profit, but we have no idea where the rest of the money went, and we have no plan for next quarter. That's exactly what many successful Christian dads are saying, not to Warren Buffett, but to God. So today on Abraham's wallet, why even prosperous families must budget like serious stewards and how to do it painlessly.
Run your home and your dough like a biblical boss.
[00:00:35] Speaker B: Steve, the. The intro there sounded really like a hypothetical, you know, like, who really gets to give a pitch to Warren Buffett? But you know this. But I don't know if our listener knows this, and I'm not trying to be a braggy pants here, but back in 2006 and 2007, I was working for a large publicly traded company. We were worth $55 billion at the time.
And my job there was to work with our big investors. And actually, Warren Buffett was one of those big investors to do two things, really. One was to explain our financial results, and the other was to kind of give guidance for what we projected for the future.
So I sat with the executive team and the CEO, who never learned my name, despite the fact that I worked daily with him for two years and spent hours just helping these people develop answers to any question we could imagine, know all the numbers like the back of their hand. And we would do quarterly earnings calls where the execs had to present all the results, forecast the next quarter, and answer whatever questions investors had.
These calls were so important for the stock of the company that if they screwed up, if the analysts were like, you know, he kind of stuttered when he said, it's going to be a strong quarter. Something as simple as that could have just caused the stock to drop precipitously. So everything was being scrutinized. And your scenario.
I just think about this all the time when I talk to especially wealthier families about budgeting. Imagine if those guys had shown up and said what you just said, yeah, we may made a profit. We even know how much profit we made. We made $2 a share, and we only were projecting $1.90 a share. So big win, you know, we don't know what happened to the other $27 a share of revenues that we spent on people and investments. And we don't know. We didn't track any of that. We just said, well, we're. We're making a profit, so it must be fine, or, you know, good news, everybody. We made money this quarter, but we don't really have any plans for what we're going to do next quarter. So just be happy that we're making money and let's ride this train as long it works. You know, if. If that had happened, I think the stock price would have gone darn near 0 within about two hours and every single executive at the company would have been fired by lunchtime.
And so my point in kind of using this illustration is this is exactly what we say to the Lord when we say, yeah, we just don't really budget because we don't need to, you know, and I want to talk through this today because why should we not. Why should the Lord not think like a reasonable investor, at least? Probably a lot. A lot better thinker than the average reasonable investor. But why wouldn't he at least hold us to the standard that a reasonable investor would when he bumps into a manager of wealth, you know, and take all of the resources away from somebody who is so cavalier with the management of wealth, whether that's income streams or investments or whatever it is.
And I pitched you this episode, Steve. You said, is that really. Is that like 2% of our audience that's just so rich they don't have to budget?
So I'm going to talk about why I think it matters, some tips on how to do it, and then I'm going to tell you if you're just like in the grinding it out stage and just like, I am just trying to pay for my mortgage and my groceries. Mark, what are you talking about? I'm going to try to tell you why the work you're doing now to establish good budgeting habits is going to serve your family 50 years from now.
Because these habits, once they're built and established, they don't just go away. And they aren't just for the time when things are scarce, they're forever. So that's what I want to do today is talk about kind of my cheeky tagline. I never know if my titles will make it, but I called this one Don't Trust a Man Without a Budget.
And I want to make the case, and you can kind of tell me if I've succeeded or not.
[00:04:58] Speaker A: Okay, that sounds great. Why don't you tell us why this is on your monitor?
[00:05:04] Speaker B: These days we work with families across the spectrum of wealth. We work with families across the spectrum of how they do things and even if they do things. So this didn't come out of thin air. I didn't imagine it. I just finished spring meetings, and I'll tell you this was a common refrain, was in the springtime with my clients, I usually kind of say, let's focus a little more on cash flow, day to day operations. How's things going now? And in the fall we'll focus a little more on big long term goals.
And so I always say, well, let's talk through the spending and the budget and that. And some families, again, really across all the income levels, I have families that are really, really tight and they're just super focused. Then families that have money and income coming out their ears.
It doesn't really correlate to how much money you make.
I have families at all those levels who are just diligent, diligent budgeters. And I have families who go, we don't really need to budget, Mark, because we automated our savings and we are doing giving. We're being generous with our money and the rest we just spend on what we want. We don't worry about it. It stresses us out to budget. And so this is a common, common thing I've heard. And it's not limited, like you might think, to the guy making a million dollars a year who just doesn't need to worry about it. I'll give you a couple archetypes to illustrate what I'm talking about. Let's say that a family is living below their means. And again, that could be a family making $130,000 a year. They're given 15,000, they're saving 25,000 for the long term, and they're using 80 grand to pay their annual expenses. So they've got $10,000 a year. The that is extra. Even after all of that, these people sound pretty diligent.
That's one picture. But then there's also the family that's earned it. They have a successful big business, $4 million a year, and they only need, get ready, 1.5 million a year to support their lavish lifestyle.
[00:07:16] Speaker A: Okay.
[00:07:16] Speaker B: And the, the rest is available. They're generous. They're just like, oh brother, you need a new car. We just bought a new car for our employee that doing giving. But they're not coming anywhere close to using all the extra 2.5 million that they've got. So both of these families come to these types of families. Neither of those numbers were real. I just made them up. But they come to me for financial planning. And one of the first questions I ask is, how much does it cost you to run your family for a month? Yeah.
And in my hypothetical, let's say neither family keeps any sort of budget, so they Just kind of back into what that number must be. Kind of like I just did. They go, well, we know how much we give, we know how much we put in investment accounts and we kind of have an idea of spending and there's a little leftover. So this must be it.
Sometimes these families have had fits and starts with budgeting where they tried something. Or maybe some financial planners said, you should, you should try this system or that system.
And it took a ton of time and it didn't really do anything to change their financial situation. So they kind of burned out quick and abandoned it.
Maybe best case, I can convince them, hey, could we just plug in your credit cards and your bank account to some sort of tracking tool so that we could see what the transactions are and praise God, you know, there's consequences to AI, but one of the blessings is I can just get somebody to hook up their accounts to something and pretty quickly we can see a summary of what they've spent and some idea of what it's getting spent on. It's going to be right or wrong, more or less, depending on the how correct the guess is at what you spent the $850 last month at Target on. But it's close enough. And when this happens with these families, they've given me a budget estimate. Hey, we think we spend $7,000 a month on living expenses.
Without fail, they will be blown away. Whether they're really, really high income or just getting by, they will be blown away by what they're spending in some category that's like 10 times what they self reported to me in that area.
You might say, I thought you said they were living below their means. They are, but they said, hey, we think we spend $200 a month on eating out. And that seems pretty darn reasonable for where we're at. And then I go, you spend $850 eating out. And they go, oh no, that seems totally unreasonable to us. And so that's, that's the common scenario of a family that even if they aren't overspending their means, in sum, they are not directing their money with intention. They're certainly not thinking like, what's our family vision? And are we intentionally overseeing every dollar that comes under our care? They're just kind of going, well, the outcome is good. So I guess the inputs and the specific allocations to our budget must be okay.
[00:10:15] Speaker A: I'm understanding where you're driving at. So these people feel that if you end the month in the black, then you don't really have to do any fine inspection of anything and I'm imagining a scenario where you tell them, well, the numbers actually suggest that you're spinning this or this. And I can see them kind of going like, okay, the number is four times as big as I thought it was. Okay, well, we're still in the black at the end of the month.
So I don't know what one of your conclusions are like, the reasons that you think that they must do this work. I'm sure there's long term reasons where they could be maximizing the money that's coming in, et cetera. But one of the things that's crossing my mind as you're describing this is even if you like the outcome, you think, well, we're in the black at the end of the month. Does that mean that you can then say we don't have to give God a report of any kind? Look, we're in the black so you can leave us alone. At the end of the day, we're doing it right. So what's with the fine tooth comb approach?
And it seems like a level of arrogance or laziness that I just don't, I don't want to do the work or I don't want him looking under the, under the hood to see what's going on. Which of those two things do you pick up on the most?
Do you think it's laziness or it is some kind of pride preservation? I just don't want, I don't want to be really known.
[00:11:56] Speaker B: I don't know. You know, it's hard to look at somebody who's built a, in case number two, who's built a $4 million profit per year business and go, you lazy schlub.
Oftentimes these are not lazy people.
They're really not.
And it's also, if somebody's making a lower income and they're in the black, they're doing some hard work, I promise.
So I usually don't feel like they're a lazy person. And I also am not sure that it's pride. I think, Steve, maybe it's just that they have never been challenged with kind of the, this sounds lofty, but the expectations that God has that go beyond the bottom line. You know, I've, I've been coached in golf. Don't be results oriented because you can hit a lot of good shots with a lot of bad habits, like figure out the right way to do it and that's what's going to produce continuous long term improvement. I kind of feel like this here you can get rich without doing what I'm talking about doing.
I'm not sure you can completely fulfill your obligations as a steward of assets from a biblical perspective, if you have this sort of. Well, I just kind of spend it if it's there and make sure I've put some stuff away.
And that's, that's. You can take my word for it. But I would rather we go to the Book of Books and see what God has to say about this.
[00:13:33] Speaker A: Do that, do that. And then, and then I'll give some questions or thoughts.
[00:13:37] Speaker B: Okay.
Proverbs. I was listening to Jeremy Pryor's podcast this week and he had a guest on that was talking about money. And they were like, well, you know, sometimes people just go to the Proverbs when it comes to money stuff. And I don't know, maybe we do. I'm going to go to the Proverbs. I'm not just going to go to the Proverbs.
[00:13:57] Speaker A: Yeah, they're really good on money.
[00:13:59] Speaker B: Excuse me.
[00:14:00] Speaker A: Yeah, okay.
[00:14:01] Speaker B: It did make me a little self conscious when I was writing this outline, but Proverbs 21:5, we've talked about this verse before, but maybe from a different angle. It says, the plans of the diligent lead to profit as surely as haste leads to poverty.
And I thought that was interesting because it wasn't holding up a spender and a saver and saying saving leads to profit and spending leads to poverty. It actually contrasts planned and unplanned. And so there is something wise and good about planning. And just like we go back to the quarterly earnings example, you don't just say, well, hey, somehow this profit happened. You have to plan for a profit to happen. And you can't really plan around money if you're not looking at the truth and data. What does it cost us to do what we want to do? How might that change?
You know, I think families that are just flush with income and not budgeting, they really don't. They might say they can. I promise you they cannot answer, how much of a shock financially could our family weather?
Like? We don't really know how much it costs us to run our family. We did lotto Feb, and we only spent $2,500 all month. But you know that we probably isn't sustainable. So we don't really know what a run rate looks like for our family.
That all comes through budgeting over a long period of time and being able to say, this is what we put towards each category in our lives. I'm going to get to some specifics where I'm, if you're hearing this and going, I'm not doing a 50 line mint budget, Mark, that's okay. I don't think that's the only solution. But having a sense for what comes in and what goes out somewhat by category is the only way you can really plan for the future around those categories. Unless you go, I guess we would just, just stop doing everything if the income got low enough. Maybe my most quoted proverb, so I won't spend too much time on it is Proverbs 27, 23 and 4. It says, Know well the condition of your flocks and give attention to your herds, for riches do not last forever.
So, faithful listener, you've heard me harp on this one. And you have to know what you have and you have to know what's happening to it.
And if you don't have a way of monitoring that there could be disease in your proverbial flock.
It actually, in this case, it is a proverbial flock, because we're talking about the proverbs and the flock. You could have illness sweeping through the sheep, metaphorically speaking, and you wouldn't know it until you got up and went to go cook yourself some mutton and there was no sheep left.
So what I think is really helpful is to have a way of tracking, oh, we usually save $1,200 a month into our car savings fund because we're trying to buy a new one of those fancy SUVs in two years and we can't do that anymore. What implications does that have for us? And how are we going to go back to the previous step and adjust our plans? Are we going to buy a cheaper car? Are we going to wait longer to buy a car? Do we need to go find a way to make more money?
Every single line in that budget is not only about telling, slapping my hand when I reach into the cookie jar. It's also just about, let me plan kind of big changes for our family, asset acquisitions, et cetera. And that's just as relevant to the rich family in some ways. The rich family can use a budget to make sure they don't get out over their skis in this regard because I have had many a client who said, we've had an awesome year. I've always wanted a Corvette.
And so I think I'm going to go do it, Mark. And they don't go, well, what would, okay, I can afford the car, but what is the maintenance on one of those things? And what about insurance? And what about etc. Etc. And plugging all that in goes, it's three times more expensive than I thought. And yeah, I can still afford it.
But what changes does that incorporate into the plan? And the having the budget that tracks and monitors and allows you to know the condition of your flocks really keeps you able to make really good financial decisions, whether you're managing a little or a whole lot.
[00:18:29] Speaker A: Okay, let me ask you a question on that, about awareness, because I feel I vacillate wildly on awareness.
And I think part of that has come from when I started buying stocks and investing money. I wanted to have the habit of not being an obsessive checker. Did everything go up by 0.73% today? Okay, good. Something went down by 2%. I'll sell that. You know, that whole kind of crazed, I'm checking in all the time. I think people can even do that with. I think of the, there's a dashboard that we have for clients. You know, a family can go in and get it, a snapshot, here's our net worth, et cetera.
How often do you think those kind of things should be checked in on for the sake of awareness?
[00:19:26] Speaker B: I tell people I was having this conversation with my mother in law yesterday. She says the stock market's been crazy. She's like, oh, I've been checking it all my money every day, a couple times a day. And I said, I think that's really, really bad for your heart and you should let me take care of that for you.
So I think that there is a ditch that you're describing.
A lot of times the reason this whole budgeting thing fails is because people, either because they think they have to or because it's not set up efficiently, they end up spending an hour a day at first, maybe a couple hours a week eventually. And I usually say the goal is that this monitoring stuff would take you about 30 minutes a month.
And if you've done it manually on a spreadsheet where you got on your credit card statement, tried to transfer every transaction and categorize them manually, and you're like, it takes me 14 hours a month. I go, there's the rare nerd for whom that will work in the long term. But for most people, that just leads to getting completely burnt out. I don't think it's necessary. So I think that you should. One of the goals is not just to be able to do this. I know everyone listening is capable of doing this. It's not that hard.
It's that you would be thoughtful like a Good manager, and go, I need to be able to do this efficiently. Meaning maybe it's once a month, maybe it's every couple weeks. I jump in, look at where we're at, keep it up to date enough to make real time decisions, and that's it.
[00:21:05] Speaker A: Okay.
All right. So a godly steward is planned and is aware. What else you got?
[00:21:17] Speaker B: Matthew 25, the parable of the talents. There's just so much goodness in this parable, but the master doesn't praise the guy who didn't lose it.
And I guess you could say, well, what do you mean, Mark? I'm not just not losing my money. I told you, I'm saving and I'm giving and I. Why do I need anything more than that? I think one of the points of that parable is that faithfulness includes active management and maximization of resources.
So the guy that gets praised generates maximum returns. And if you're being lackadaisical, every single person listening to this, including me, could stop right now and repent for places that we have not maximized our stewardship. I know I don't do it. There's places I just go like, ugh, I'm tired and I'm going to break this budget this month because I, I know I said I was going to spend that much on food, but I'm not going to because who cares? I have the money, it's fine.
And you know, I'm not telling you, you have to set some arbitrary budget and stick with it. But if laziness causes you to adjust from your plan, which you feel like this was the direction we set as a family, that's probably poor stewardship. And you wouldn't know it if you weren't doing something to track and follow.
Kind of how close am I to the plan that I, that I set? So I think maximization of resources is one of the points of the parable of his talent. Not just, oh, yeah, you should invest money when you can.
[00:22:58] Speaker A: Okay, I agree, I agree with, I agree with that maximizing. I'm going to make a point and let you react to it.
There's a maximizing. Okay, There is a form of maximizing. It's kind of like being aware. There's a form of maximizing that could only be described as anxious that you are literally watching every time CD rates go up half a percent. Oh, I gotta jump. I gotta make the most of that. And every time the price of washing machines goes down, oh, well, we need a washing machine machine. But I'm going to drive across Town to the laundromat until President's Day sale.
And everything has to be done with coupons.
We're talking about people who could afford groceries, but because they're thinking, I must maximize.
It's like there's this unending competition that's happening. It's like lofeb for life.
And it is, it's a kind of a fear that God will come find them and say, did you spend some of that money enjoying yourself?
Because I wanted to maximize every dollar that went through your hands. So I guess my point is that every family has to find some equilibrium. And there is no easy answer except that by prayer and letting the spirit guide you, which a lot of times just looks like, well, what does my conscience say? What does the spirit of God inside me say?
Well, we could afford first class on this.
This just happened a couple weeks ago.
My wife and daughter went to Texas for one day because my wife was going to speak at the university we graduated from. She's going to go speak one day to a class. So she's flying in. They left at 6am on their flight.
They flew in, they flew right out. It's going to be a lot of air travel. It's hectic. And there was like a, I don't know, $40 difference between when you put it all together, if you're going to fly in the main cabin and you're going to check your bag and all these add on fees versus her going first class. And my wife goes, my life would be so much simpler. I'm going to fly first class for this short one day turnaround. And I was like, that's great.
Now if God from heaven gets out his big holy magnifying glass and says, were you maximizing every dollar?
No. Okay. We could have done it for cheaper, but I think we've got to call out that there is some equilibrium that has to do with we want to live at peace.
You know, one of the things that money does is make things simpler so you don't have to be worrying all the time about small things and straining at a gnat. You know, Jesus said you strain at gnats and swallow camels.
So anyways, I just got to throw this. I mean my kind of legalistic mind. That's where my mind goes when you say maximizing. And I understand that I just have to throw out something for everybody, which is we also have to live. And your money is for living. And the Bible says, Paul said this to Timothy, everything that God made is to be enjoyed. If it is Received with gratitude and prayer so, you know, you can enjoy a nice steak. That's okay. And I know that in some regard you're not maximizing every dollar. What do you say to that?
[00:26:56] Speaker B: Yeah, I actually, I disagree with that last line. I think when I say maximizing every dollar that could be buying a fricking private jet. I mean, I, I wouldn't put any specific.
What you're describing is like minimizing every dollar of spend. And I do not, do not mean that.
[00:27:20] Speaker A: Okay.
[00:27:21] Speaker B: What I mean is like I am placing money into the spots that make my kind of assignments go.
And I mean, Steve, I was in Las Vegas for spring break, outside of Las Vegas, and we spent I think $600 on a dinner with my sister and her husband, which we paid for, which was over the top, crazy fancy. And we didn't drink one drop of alcohol. That was all food.
And so it was a pricey meal is my point.
And we were having a very serious conversation about shared family vision. And my wife and I said, we want to spend money and set this scene to be an inconsequential conversation. Now could we have done that around the Airbnb coffee table after our kids all went to bed? We could have. And we probably could have had the exact same conversation. It felt to us like this is a good use of money. And was I, was I being frugal? Absolutely not. I don't know. That was towards the top of what I've ever spent on a meal.
But I'm not saying, when I say maximize dollars, just spend as little as possible. I'm saying think about every dollar that you get as a, as a potential multiplying force and put them out there in a way that jives with the assignments that you've got to do whatever it is that you're supposed to be doing in the world. And that certainly includes spending.
[00:29:05] Speaker A: Yeah, I like maximized as our third thing. So if it's planned and you're aware of what's going on, like that meal you planned on it, you were aware of, well, here's where my money is right now. Here's what we've put aside for vacation. This makes sense. No, this is one of those moments that I want us to have a nice big spend. It'll be nice for my sister and brother in law. And under those auspices that it was both planned and you're aware of what's going on then I like what you're saying. Which is really maximized doesn't mean specifically the bottom line. It's that every dollar is pushing forward the vision and as you say, the assignment for our lives. Whether that is no, we think this is a good place for luxury. Actually, we didn't mean to like burn money in this category. So we're going to be sure that that's turned way down, et cetera. That's the kind of awareness and planning and maximizing that I think we're getting at. So I like that.
[00:30:07] Speaker B: Yeah.
Just a couple more before we get into the.
To the. What should you do?
I really liked this angle on kind of Luke 14, 28, 30. This is the illustration that Jesus gives about building a tower.
And he says, you know, he could have said, if you don't have enough money, you can skip this step. That's not what he says. He says, before you build a tower, you sit down and you count the cost beforehand.
And I think that this says something about our posture towards God's resources when if we're less careful with the resources he gives us than we would be with a construction project.
I mean, I talk to people all the time about remodeling their homes or doing a big project and everybody gets an estimate. And I always tell people, now double it and then add another 10% because it's going to be a lot. But people get an estimate, they plan, they look at line by line and go, is this reasonable? Well, again, to your point, it's not. We could have butcher block countertops and those would be cheaper. So that's the right answer. No, let's get some granite countertops. That would be part of the vision we have for this space. Great.
But I think that, you know, Jesus uses budgeting language for basic wisdom.
And yeah, I think that if we're, if we're saying we don't do that when it comes to money, we do that when it comes to maybe some other things. But with the money that we have, which is like one of our main stewardship responsibilities is our stream of income, why would we say no to this?
Yes.
So.
[00:31:59] Speaker A: All right, point well taken.
[00:32:01] Speaker B: Lastly, I do think there's a multi generational angle to this.
Unplanned wealth goes away. We've talked about this when we talked about kind of how families with multi generational wealth typically go busto before the third generation is up.
And so the family that's high income and says, oh, well, I just have all this income, so I don't need to budget.
They're heading for choppy seas whether they know it or not.
And I do think by keeping kind of the Muscles, limber that do this type of work and planning and budgeting, they've set themselves up for kind of success in the long run. And I will say it's very hard to shift back into careful budgeting mode when you've lived outside of that for a long time. We've all seen that.
And most families that live by a we don't budget because we don't need to kind of mentality, they really often have no idea how close or far they are from financial stress. Kind of like I said at the beginning, it's like, well, there's extra, so we're doing fine. I guess this means they don't know how much they should have in an emergency fund. They don't know what their options would look like if income changed or that successful business took a downturn, or, hey, I got canned and it's gonna take me nine months to find a new gig.
You know, depending on where you are in that, it may be that, yeah, I'm not gonna run out of money, but I'm gonna dramatically change outcomes for my grandkids that didn't need to be changed. So just, again, not arguing that you must go full austerity mode. I just think this has not just got impact on you between now and when you turn 67 and a half and start drawing Social Security. This is thinking long term about wealth and what it can do both inside and outside of your family.
[00:33:57] Speaker A: That's great. Well, I just have to throw this out because it's coming to mind that for our business and our home, we use the same guide that says, prepared our tax for 20 years, and we always have a meeting with him to walk through. Well, what did you find in our tax return this year and how have the numbers changed and what are the trends? And those kinds of letting other people get under the hood and then taking their input is so nutritious and helps your worldview about your family's money.
I don't know if you heard the episode that just came out this week, Mark. That was the review of the retreat.
And I was listening to you describing the. You said, I just threw this out. It's not like the magic number for everybody, but I threw it out to the guys at the retreat, all the vets. What does $3.5 million look like for you at your retirement age?
And it's just a reference to kind of start a conversation.
And we are so conditioned to think, well, if I hit something like that, I think I'm good. So whatever happens on top of that, is gravy. And, you know, if I could pass a little more on to the grandkids, that'd be great. Instead of thinking, it doesn't matter what the numbers are like in my bank account or what the forecasts say they're going to be like in 30 years. For me, responsibility to my king means this kind of sobriety regarding everything that comes through my hands, and that would include my investments and our income and how much I'm spending on my mortgage. And maybe we don't feel a pain point on my mortgage, but maybe we could refinance our mortgage and save some money.
Whether we're feeling pain or not. It's a stewardship issue. And that's what I. That's what. I don't know if you've used that word today, but it's. All of this is reiterating, like, I don't care if you're experiencing pain from your monthly spend or if you're in the black. The stewardship issue calls into question you're being planned and aware and maximized and counting and considering what the implications are to your generations that come after you. So, anyways, that came to mind, so I had to throw it in. All right, enough yelling at the people, Mark. I'm convinced. I'm convinced. So can you start telling us some tools about how we can start implementing this stuff?
[00:36:35] Speaker B: Yeah, I think the first one is, it's in your heart. It's not, here's the greatest software you can use that's going to solve this. And so, like you said, I don't think any of us.
Again, I'm including myself and you, Steve. I don't think we fully grasp this pretty fundamental idea that everything that we're managing, including every dollar that's sitting in our checking accounts and our investment accounts and the income that will come in next month, it all belongs to the Lord, and we are stewards of it.
And so if you've treated that job casually, like. Or if you've done what I am prone to do, hey, this is mine. God gave it to me. And if he.
He would really just be so proud of me if I decided to be generous and give him back a little bit.
Okay, whatever your approach has been, if you've been casual with the responsibilities of a good steward, then just resolve to track what you're doing as if you were an equity partner with the Lord, as if he was that Warren Buffett investor that was going to come and ask for an account of how you were managing his significant wealth, that he's entrusted you with.
And so you can pause the episode right now and you can just repent. That means not only I feel real sad right now because I didn't do it. So, God, I'm sorry. It means, lord, I'm going to change my behavior.
And if you do that now, you've turned the episode back on, you've repented.
Just know that the behavior must change or you did not repent. It was fake.
So.
But the good news is that's available to all of us and times of refreshing follow. And it's a good thing. So I have to do this with some regularity because I just notice either some greed or some just laziness creeps into my financial life. So that's where I would start. Start with the heart. Okay, now we have all returned to the episode. We're back on the road where I think that you can kind of focus on just some quick tips. I would say, however you want to do this, track what matters.
You know, like I said, I don't think this means you must have a budget that has 50 different categories.
I'm thinking of specific people who I've teased because they have like a $12 line item in their budget for one thing that they really like. And I'm like, yeah, that's fine. If you like having that carved out and it feels protected now, great.
But you don't have to go crazy. You know, if groceries and restaurants and kind of the food spin number is a pain point for you.
If you're looking at just, oh, gosh, we spent $4,000 a month on food the last three months, that would be worth tracking really carefully.
But you might say, you know, I've got my utility bills and my Internet and my mortgage and my home insurance and maybe my taxes. If I pay those, that's all just like regular home spend. You could put all that in one category and go just the category of keeping me in a house, fine. I don't care that I don't think what I was saying about being careful to monitor means you must know exactly what you spent on electricity and a separate line for water and a separate line for garbage and a separate line for.
No, it's. It's being thoughtful about places where you need to put attention. As a steward and a manager.
[00:40:18] Speaker A: Well, what do you think are the minimum categories that somebody should have?
[00:40:24] Speaker B: If somebody is just like, I've tried everything and I fail and fail and fail at this, I usually back way the heck up and I say, okay, let's talk about what A reasonable.
We have fixed expenses. Your mortgage, your student loan payment, your maybe your Internet bill, some of your utilities. There's some expenses every month that we could change. We could. And usually this. This exercise produces some change. Where you go, I have eight streaming subscriptions. Yeah, well, I've only watched two. Right.
Can I pause right there and just give my. My favorite dad tip on streaming? You can.
We use the Apple tv. And it's so easy to subscribe to a new streaming service. And I think they do that on purpose. You just push a button and now, oh, you're subscribed to Netflix. You're subscribed to Apple tv, You're subscribed to Peacock.
I instantly cancel the moment I subscribe to any streaming service because a month later, it's going to stop working.
Now, it's not a big deal if we want to pay $7 for Peacock because we want to watch a show. And often a month from now, we're done with that show, and we don't want to watch Peacock again. And if you cancel it 10 seconds after you subscribe, it just dies after a month. It doesn't cancel it right then.
[00:41:41] Speaker A: Nice.
[00:41:41] Speaker B: So and if I really want to keep watching it, no problem. I just push the button again and then cancel it again. So it's a free tip.
[00:41:49] Speaker A: It's a hack from Mark.
[00:41:50] Speaker B: Okay.
But, yeah, I will take fixed expenses. That's one bucket.
[00:41:56] Speaker A: Okay.
[00:41:56] Speaker B: I will take sort of saving, meaning investments, saving, emergency fund buildup, whatever you're doing on saving, make that a bucket.
I will take giving and make that a bucket. And then I will take flexible expenses. If now you do sacrifice some of that. That detail level if you're doing this. But it's better than nothing, that's for sure. And you can go, oh, it will at least force you to kind of take some estimates and go, well, if I add up restaurants and Amazon and I think my flexible spending is $3,000 a month, something's going to. There will be an alarm that sounds when you try that, and it's $6,000 in the first month. You'll go, I need to think about this.
Now, there's nothing wrong with changing budget categories.
Like, I tell everybody, you don't have a budget until you've been keeping it diligently for a year. Because you'll go, oh, I didn't realize I used $50 a month on tires because I only buy tires every two years. But they're twelve hundred dollars, you know, so there's those things. It takes time for all Those periodic expenses to get incorporated.
But so I'm, no, no stress. If you get to the end of the month and you're like, I thought it was 3,000, I spent six. But I did, I did go overboard on some stuff. I think it should be five. We'll try that the next month, see where we get.
Perfection is not required. The goal is we're trying to move towards diligence here.
If you don't want to do this kind of tracking line by line and monitoring as things roll over month to month, you could say we're going to do what's called a reverse budget.
And the kind of way that a lot of people, financial advisors especially, tell people to reverse budget, is just put all that savings money, the money you're sending me so I can get paid. Put all that into your investment accounts and then just do what you want with the rest because who cares, you're on track.
We don't think that's a good idea.
But we still can use the idea of a reverse budget, which is just to say, create some categories.
And you can use something like Ally savings accounts. They let you have one savings account with as many buckets as you want and you could pre fund those categories. So you could say, well, I'm going to my first paycheck. 1200 bucks goes into my grocery bucket and then I just spend out of that as the month goes on. Oh, I can see it going down. It's kind of like a digital way of doing the paper envelope system. And I'm not above the paper envelope system. Steve. If you go, we just can't get this under control.
Well, maybe you take a few months and put twelve hundred dollars of cash in an envelope and that's your grocery budget. It would be worth every credit card point you lost if you got your spending to match what you want your spending to be. So there's a lot of ways to do this, but with the reverse system, you kind of, it's sort of a play on the old profit first business mentality where you say, I intend to travel, I intend to spend $6,000 a year on travel for our family. So every month, 500 bucks first goes into that travel. And then when it comes time to take a vacation, we just look at what's in there and say, well, that's our travel budget.
So the reverse budgeting can give you visibility into all these categories without the pain in the butt of daily tracking. And oh, I went to 7 11, but it wasn't gas, it was a Slurpee. So that's entertainment or whatever. You don't have to do all that.
I think if all of this is still feeling like, gosh, Mark, it's overwhelming and I want to be faithful, but I don't know if I really have it in me to do all this. You could go to monarch money monarch.com and you could just sign up, plug in all your accounts and you could just use their default budget. It'll kind of try to categorize your expenses, connect your credit card, connect your bank account and it's going to pull in a bunch of data. Now, it's not going to be that helpful to you because you already said, I'm not interested in looking at this thing and categorizing.
But what you can do is there's a little tab where you can say, download all the data.
So this tool has given you the benefit of aggregating all your transactions and you can pull it all down as raw data, tens of thousands of lines and you can. Now I'm telling you, I use extremely careful security before I do anything like this. So don't go just free chatgpt and dump it all into there because it's not very safe.
But you can upload that into an AI and start asking it questions and saying, how much on average do I spend a month on X, Y or Z?
And it will tell you without you doing any real legwork. And I going back to kind of why this is on my mind. I've had so many families go, well, I think we spend maybe too much. We might spend $200 a month at Amazon. And I go, it's 1200, it's $1200 a month at Amazon.
And every time, well, that doesn't really count because there was some one time expenses. And I said, well, all expenses are kind of one time expenses. But okay, so there's a lot of ways to do this, but I do think find something that feels simple to start with. Do not hear this, get highly motivated and then try to do the most complex, perfect budget ever. Like, please resist that urge, even if that's what you're feeling. I think I've bought in now. No, please make a five category budget instead and start there and then add a little complexity as you've proven your ability to kind of sustain it.
And I think whatever system you use, the Lord will smile upon your movement in the direction of kind of diligence and planning in this area.
[00:48:09] Speaker A: I don't know if people are like me, but I'm attracted to that. The AI thing is a starting point. Like, I'm going to give you a year's worth of stuff and I'm just going to throw it all in there and then let's start talking about some conclusions because it's, obviously, it's overwhelming as a human to start digging through your, your receipts and your numbers and going, what categories are out of balance? Or what do I need to be doing better?
It would be a nice level set for starting to go forward if you go, well, this digital brain says that based on our income or what we spend on groceries, our eating out seems high. So, well, that might be something for us to keep an eye on. Even as our first month of tracking, it just, it feels like a nice place to start from. Great stuff, Mark, that servants of the King and Abrahamic family leaders are planned in their finances. Doesn't matter how much of them you have. Whether you find yourself just scraping by or you feel like you have gobs left at the end of the month, you're still planned. You're aware of what's going on. You're maximizing your dollar.
Not necessarily that we're minimizing spend and we're going to scrutinize every dollar. And no, there's not going to be any soda pops for the children at the gas station. No, you might say to yourself, that's a way to maximize this family moment that we're having. Let's all go in and get Cokes. Great. You're still maximizing counting. What's happening. I really like the idea, Mark, of starting with a heart of repentance for the family and, and starting with something as simple as, why don't we just have five categories of just. Just tracking the simplest kind of tracking? Because we want to be these kind of good stewards.
Because, guys, the Financial Review call with your investors is coming.
Except that this is not Warren Buffett. You're going to be answering to. You're going to be answering to the king who's entrusted you with life and breath and income and family.
Don't show up with the simple simpleton's line. Well, I think we made a profit. As Mark said, we know from the parable of the Minas, that's not going to satisfy the king. Show up with, here's where it went. This is why. This is what we're thinking. And here's our plan going forward. Maintaining a budget at whatever fidelity. Just some effort prepares you for that conversation. And the Bible tells us we are going to have that conversation with the master. So this is how Abrahamic leaders build multi generational impact. It starts now at whatever your income level is, at whatever your investment or savings level is. We want to track faithfully, lead diligently in God and watch God bless your line. Mark always says that that budgeting talk is like eating your vegetables. It's so good for you. It's so necessary. And very few people go, oh yay, is this the budgeting episode? But it's necessary for all of us. So run your home and your dough like a biblical boss. See you next week.
