Show 11 - Why Lesson Plans and Budgets Still Matter

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Show Transcript

Shaun Morgan

Hello fellow educators, I'm so excited to have you here today. Me and you are gonna be talking just about, creating a budget and the importance of having a budget. I realized that we talked about Uh, tracking your spending as, as the best place to start and that is the best place to start and then you know, you move on to, you know, paying yourself 1st, that's the way to start building funds in your pocket.

Shaun Morgan

That doesn't mean you don't need a budget. You know, we, we don't like the word budget, but understanding how much you have to spend on certain categories will allow you to control and plan your finances, much more effectively than just tracking your spending. But before we get to that I just want to invite uh everyone of you that if you have a financial question if you have something that you would like to talk to me about if you would like to plan for your future and just get uh a plan for how you're going to prepare for retirement whatever you need help with I am here for you so if you go to teacher money show dot com slash guest you can fill out the form there and I can have you on the show and we can have a fantastic discussion and uh we it's free coaching so I I highly encourage you to take advantage of that.

Shaun Morgan

I really appreciate it if you would take some time to this video, if you're watching on Youtube, subscribe to, the, the podcast and to leave it on a straightening and review. So that way we have, more opportunities to share this important message with other educators. All right. That being said, thank you so much for being here. Let's talk about budgets. Budgets are hard People don't like doing budgets. Well, some people do, but generally people don't like doing budgets because uh, they remind us that we are falling short.

Shaun Morgan

Usually though that's because when you do a budget you are starting with your budget you say I'm gonna spend this much money on food and then you spend twice that much money on food and you go how on earth that I spend that much money on food because you don't know how much you spend on food if you're not tracking your spending so if you've been tracking your spending uh and if you haven't listened to that episode I'm tracking your spending I highly recommend you go back and listen to that and start there uh if you're tracking your spending then you'll know oh every single month I spend six hundred dollars on food or every single month I spend fifteen hundred dollars on food whatever it is that's where you can start now you can look at those expenses and decide do I needed to spend that much money, Do I need to spend more money?

Shaun Morgan

Am I starving myself, whatever it is. And you can determine what you think your budget ought to be from there now, does that mean that you're going to get it right the very 1st month? Probably not. One of my favorite videos to show my students when I'm teaching them about budgeting. You know, because why not have the social studies teacher teach 7th graders about budgeting? Was a video of Dave Ramsay who I don't agree with everything he says, but uh, a lot of things he says are fantastic.

Shaun Morgan

He says the 1st time you do a budget, you're going to suck. And I think that that is a great description. It's going to be hard, it's to be wrong, it's going to be frustrating because you don't have it dialed in yet. That's the part of the process of you, you set these parameters and say you blow up your budget the 1st month, but you think, no, I can actually do that. And then the next month you do it great, but the month after that you blow it up again. Maybe you need to Put some more padding into those parts of your budget and try and find other ways to cut back.

Shaun Morgan

Budgeting is all about setting boundaries on your spending, but then not rigidly holding on to those as the detriment of your life. Holding on to those limits and adjusting and tweaking them as you go. So that way you figure out what the budget of your lifestyle is. So that way, instead of saying I have to stick to this restrictive format, I am creating the format that I want So if you've tracked your spending and you've identified things that you don't want to spend on anymore, you can cut those out so that way you can adjust and tweak your budget to meet your lifestyle.

Shaun Morgan

Okay with that intro. Let's talk about creating your budget. There are three steps to creating the budget. The 1st is to base your budget on your spending, which I've talked about slightly, but just want to go over each. And then the 2nd is to balance your budget. And then the 3rd is to review your budget with your partner. And we'll get to that and we'll talk about that one in depth when we get there. So the 1st step is to base your budget on your spending. Most budgets fail because they're arbitrary.

Shaun Morgan

Okay, you say I'm going to spend, you know, a hundred bucks on entertainment. I just made that number up. It doesn't mean anything, right? It doesn't reflect what I actually spend up. I'm gonna spend a hundred on clothes because that's a category that people for some reason have in their budgets. I don't spend money on clothes every single month. You might, I don't. So having a budget for clothes makes zero sense for me. You might have a budget for golfing equipment. I don't golf, okay, I have a budget for things that you don't have a budget for.

Shaun Morgan

I need to have a Home Depot budget. I go there way too much. Some people wouldn't, if you rent renting, you might not go to Home Depot as much as I go to Home Depot. It is entirely up to you, what is in your budget, don't make it arbitrary, and you needed to base it on your spending. So tracking your spending is the 1st step to budgeting. When you are doing this, you need to keep in mind that you will have two types of expenses in your budget variable expenses and fixed expenses. Okay, the fixed, fixed expenses are the same every single month, all right.

Shaun Morgan

They are, your mortgage or rent, your car payment, your You know, insurance payments, things like that, that come back again and again and again, technically a subscription is a fixed payment because it doesn't change. However, you can easily remove those payments. Variable expenses change from month to month. Utility bills, food bills, entertainment bills, those things fluctuate for month month. Pay on how much you How much you use your your electricity, and so forth.

Shaun Morgan

Generally speaking, the variable expenses are the easiest to reduce. You can cut back on food a little bit by eating out, you know, less by, you know, one time or two times a month, or you can cut down your utility Bill by turning down your thermostat a degree, during the winter and turning it up a degree in the summer. Things like that can make impacts on your spending, on your expenses in the variable expenses category pretty quickly. But the impact is actually quite small. The Big Three, which are the three biggest things that people spend on every single month are where you really needed to focus if you're going to try and drastically reduce your spending so if you realize that you are one thousand dollars or two thousand dollars over your budget and that's why you're going into debt then you need to look at the big three If you can't figure out what the problem is, So mortgage is the biggest, most people spend the majority.

Shaun Morgan

Money uh the biggest category of their money on their mortgage um I recommend not spending more than twenty five percent of your budget on your mortgage or your rent uh thirty percent is probably the high end but they let you get up to fifty or fifty five percent of your income, and that's considered within your means by by mortgage company. So please look at your housing costs as one of the big three, one of the biggest things you're gonna spend on. And while it's hard to get out of housing or to reduce your housing, you get used to your lifestyle in your house.

Shaun Morgan

That might be uh, 1st step to take if you are struggling to make ends meet. The 2nd one is your car. Car payment is usually part of this. And then we also have maintenance and gas and so forth. And insurance is also in there. Check your insurance every single month, not every single year. Make sure that you, if you just stick with the same insurance company, your rates going to and up and up and up, get it re quoted, you know, spread it out. Who can give you the best deal that will keep your insurance costs lower?

Shaun Morgan

Having a dependably used car instead of the newest and best car, that's going to reduce your expenses as well. And I know that most teachers have used cars just because that's what we can afford. But you know, paying off that car and then keeping it instead of getting, getting a new one or getting another one, that's going to keep your expenses lower. And then, you know, try not to drive if you don't have to take a walk, ride a bike, you know, things like that. Those can reduce your big three.

Shaun Morgan

And then the last one is food, which is a variable expense, but it's one that you have to, you need to spend money on food. You can't not have food, so uh, you can find cheaper alternatives. You can, you know, use coupons, eat out less. Less Starbucks on your way to work. Yeah, I know that we do that, right? The school's coffee might not taste, isn't good, but uh, it's free, you know. I swear every day teachers were, oh, I'm gonna run on my break. Go, go get a drink. May Maybe that's just here in Texas where there's a Sonic down the road everywhere and everyone always goes to Sonic for a quick drink, but it It adds up right, even if you want to keep that, but you cut it in half or cut it by 20 %.

Shaun Morgan

Anything you can do to keep your food expenses low, keep in mind that it's up to you what you do with your budget. But you need to have a budget. You need to have this plan in place of how you're gonna spend your money. So a budget is a lesson plan, all right. You need to have one before you start teaching. If you don't have a lesson plan, it's not gonna go well. You need to have something prepared. You can't just say I'm gonna wing it, not that, that that's never worked for for a teacher. Even people who don't build lesson plans have a plan, they have an idea, they have resources and things like that.

Shaun Morgan

So building lesson plan, that's what a budget is. That doesn't mean you're gonna follow it. You just needed to have one. So you can't adjust it, right? You might plan to get through a whole unit in a week and then in your lesson plan, but then you only get through half because that's where your students are at. You've adjusted the lesson plan, but thank goodness you had the lesson plan. As our president In the past, I, Eisenhower, said plans are useless, but planning is indispensable.

Shaun Morgan

So that's what budgeting is all about having that plan in place, having that plan in place beforehand, even though it's going to become useless, it isn't useless in the moment that you adjust it. All right, The 2nd step is to balance your budget, okay, so when you mess up and spend over, okay, when You are not going to stay within your budget. Every single month. It's just not gonna happen. Even people who are experienced in financial planning go over on their budget occasionally.

Shaun Morgan

When you need to balance your budget, there's two ways to do it make more money, spend less money. That's it. There's nothing else you can do to fix it. Once you've already gone over on your budget making more money. You can use a side hustle. You can, you know, sell something on Facebook Marketplace. You can, you know, have a side job if you really wanted to, whatever it is you want to make more money with. You can get like, you know, coaching after school. There's all these different things you can do to make more money, although I highly recommend side business for teachers.

Shaun Morgan

Or you can spend less money. Spending less money is less fun. But if it's a consistent problem, if you're over because you're spending too much, that might be the better thing to tackle up front because it's easier. Spend less money than it is to make more money, when your time is limited. Just keep in mind that you're not going to be perfect right away. All. You won't fix your finances overnight if you are consistently going into debt. That's That's not going to be fixed just because you listened to one podcast episode.

Shaun Morgan

It takes a lot of effort and a lot of time to, you know, to work at it and to chip away at this and balance your budget. Just do one thing at a time, right? This month you are work on getting your food budget on under, you know, under a certain amount. The next month you'll work on your, your car and, and figure out how you can reduce the expenses of your car or whatever it is. And eventually if you focus on one thing at a time, you will your spending under control. If you just sit there and look at all these issues and all these things you, you know, could be spending on but you or you are spending on but you shouldn't be spending on or, or whatever, you're gonna, you're gonna struggle.

Shaun Morgan

So uh, just focus on one thing at a time. You will make it, you will make it. Just keep in mind you have to track your spending to figure what you can spend less on because if you are not tracking your spending and you just look at the end of the month and you say oh man I spent three thousand dollars and I needed to spend two thousand dollars darn I'll do better next month that's not gonna work right you need to have that tracking going on so that we can say wow I spent way too much on gasoline I guess I needed to stop driving you know three hours to my aunt judy's house every other day or whatever you know make a make a plan to spend less next month based on your previous spending.

Shaun Morgan

Right. The 3rd step is to review your budget with your partner. Now If you don't have a partner, if you're single, then you don't need to get a partner to review necessarily. Although I highly recommend that you get somebody, who you can, be accountable with. It might feel uncomfortable at 1st, but you need to talk to somebody, talk to your mom, I don't care who you talk to, just, you know, let them know, look, look, I'm trying to improve my, my spending and this is where I'm at. If you have a partner, that's even more powerful because it's your spending together, right?

Shaun Morgan

If you review it together, then you're able to make those tweaks you need as you go. If you just make the budget track your spending and then you don't talk about it, it's never gonna change. There is power in improving one per cent every day so focus on that what's that one percent that one thing that I can do that we can do together to improve right know maybe Instead of getting the the Grandee Mocha, you can get the whatever the next size down is. I don't know what they're called so. You know, just a few pennies here, a few dollars here, it can make a difference over time at 1 % improvement.

Shaun Morgan

And that's the type of thing that you discuss with your partner. Now please do not make this. A Well, you did this and I, I didn't do that and uh, you know, how dare you, that that's not what you need to do. You, we, you just point out, you know, it looks like we're overspending in this category. What can we do, What can we do to reduce our spending here to, to cut back, so that way we are staying in our budget. Or how can we make more money so that way we can continue to live this lifestyle that we're enjoying?

Shaun Morgan

Whatever the plan is, that's what you discuss with your partner. These discussions be fun. I know that this probably Uh, it makes you, makes you nervous, but it can be fun, call it a money date, okay, get yourself, pizza, get yourself a, a nice dinner and not like, you know, Ritzy, right where you're spending more than your budget to talk about your budget, but you know, get yourself something nice, sit down, you know, play a game, talk about where you're at and you just do something fun together while you're doing it that way, it's not something that you dread, it's something that you can enjoy discussing together.

Shaun Morgan

Eventually, as you do this, over time you will make those simple improvements which will start to grow your wealth. And you won't have to make all these tweaks because you'll be in the rhythm, it'll become habit. So that is the, the, the key. Just make those tweaks and adjustments by discussing it with your partner and over time it will grow to, to, to great wealth for you. And that's the power of keeping within a budget. So, just to recap, budgeting A budget is planned on where you want your money to go.

Shaun Morgan

Your budget should be based on your spending, so you have to track your spending before you make your budget. You can balance your budget by making more or spending lesss, and small tweaks made with your partner, with your partner lead to great results. So I just want to invite you to, if you haven't tracked your spending yet, track your spending. But if you've been tracking your spending, sit down and create a budget. I recommend you do this with your partner. Then uh, after you've created it, you know, see how it goes, make a tweak, right?

Shaun Morgan

So this is the mo, the two step invitation, and the way you make that tweak is by having a money date about your budget, okay, if you're single, take yourself out, get a little ice cream, sit down and look at your budget, whatever it is, make it fun, make it something you look forward to and then, just make sure that you are keeping yourself accountable by talking to your partner or talking to someone else about your budget I hope that this is helping I hope that you understand the purpose of a budget and why we have budgets now uh once again if you have questions if you want help making your budget you can come and meet with me uh you know teacher money show dot com slash guest uh and I look forward to talking with you in the future goodbye.