How to Turn Your Finances Around in 6 Months

Brian and Bo unveil a powerful six-month plan to help you turn your financial life around - no matter where you're starting from. Whether you're overwhelmed or just want to fine-tune your money habits, they break down actionable steps month-by-month, from getting organized and setting goals to budgeting, building margin, and making your money work harder for you. It’s time to ditch procrastination and start building a brighter financial future - one step at a time. Jump start your journey with our FREE financial resources Reach your goals faster with our products Take the relationship to the next level: become a client Subscribe on YouTube for early access and go beyond the podcast Connect with us on social media for more content Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.

• 0:12Speaker 01

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 0:16Speaker 02

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web. Like restoring a vintage motorcycle from a 50-page restoration block. Or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:41Brian Preston?

  How to turn your finances around in six months or less?

• 0:50Speaker 04

  Brian, I am so excited about this because sometimes we find ourselves in our financial life going in a path that we thought, man, that's not, ah, that's not the path that I want to be going on. I need to turn. I need to shift. I need to go into a different direction. I love that we sit in the spot where we can walk you through how to do that. I also love that we sit in the spot where we release brand new content to you every single day. So if you're not subscribed to the channel, make sure you subscribe so that we can load you up with financial information.

• 1:19Brian Preston?

  Bo, this is the thing is I just want this to be the catalyst, to be the moment that actually creates change because procrastination is not your friend. It's no matter how much you think it's going to be okay to just push us off. But here's the reality, we know three out of four Americans really do feel overwhelmed with their finances.

• 1:41Speaker 04

  Yeah, it seems complicated. It seems like, man, I just wish I knew what to do and how to do it or how to actually change my circumstances. That's what I want to speak to today. If you happen to be in that 75% of folks who don't know what to do or don't know how to do it, don't know how to get your finances turned around, we want to help you. But maybe you're that one in four and you're not overwhelmed and you're thinking to yourself, okay, I feel okay about things, but I think I could be doing it better. I think I could reassess. We're going to walk you through a six Month, month by month plan of how you can redirect and shift your finances.

• 2:14Brian Preston?

  I think it's important enough. I don't care where you are, four out of four ought to watch this just so you can streamline and prove there is going to be something in today's show that can actually make you better at your finances.

• 2:26Speaker 04

  All right, so let's jump into month one, the very first month, the very first thing that you want to do if you need to reassess your financial life is you have to know where your money is. And month one frankly is going to be all about data gathering.

• 2:39Brian Preston?

  Yeah, I mean, this is, I think about we're financial planners by day. The very first thing after you start interviewing and talking to people is you gotta get your hands on the data. So don't sleep on the data. So you gotta get the numbers in so we can actually start looking at the data. But when we talk about what the numbers are, what are we talking about?

• 2:58Speaker 04

  Yeah, we want you to have an idea of what your income is. How, how much are you being paid? How much are you actually taking home of what you're being paid? Is your income variable? If it is, what does it average out to over time? So that's kind of your shovel. What's that resource? We also want you to know about your debts. How much money do you owe to other people? What are you on the line for? What are your obligations? Those are kind of the income statement items. Then there's also the balance sheet item.

• 3:25Brian Preston?

  Well, I love that because this, this brings in, there's going to be tools that we're going to talk about all throughout the day and debts, assets, both of these are components of your net worth statement or your personal balance sheet of how much you own versus what you owe. And here's the good news, we give you away, give you two options. If you just need a free resource, you can go to moneyguy.com/resources and go download and get our free net worth tool or net worth template, I should say. But if you really want to streamline this process and actually have a dashboard view to know what's good, what's bad, or better decisions you should be making with your net worth, feel free to go to learn.moneyguy and actually get the net worth tool. It's the same net worth tool that actually Bo's using, I'm using for our own personal tracking of our net worth statements.

• 4:10Speaker 04

  So getting your mind around the numbers is one part of it, but you also have to get your mind around your mindset, your unique view and thought on money because a lot of it is going to be quantitative, but some of getting your life turned around is also qualitative. So there are some questions you need to ask yourself. A great question to start with is, hey, what are my short and long-term goals? What are the goals I have around the decisions I'm making with my money?

• 4:34Brian Preston?

  All right, this is one that I talk about all the time. If you don't have your why for your financial life, it's not good enough to just say, hey, I hope I can save up $3 million, or hey, I want to have my house paid off by this date. Hey, I want to retire here. That's not enough. We want you to focus on the why. What's the purpose? What are you actually trying to get out of this tool of money? Make sure you're spending some time on that very important question.

• 4:58Speaker 04

  And when you're doing this reassessment, you should also ask the question, what do I find difficult? Or what part of money is confusing? Or maybe it's not even confusing. What's the worrisome part about money? If you can list that out and write it down at the beginning of this process, you're going to set yourself up to be able to clearly articulate and educate yourself around how to solve those problems.

• 5:18Brian Preston?

  And then don't forget, you know, we wrote in a broad term here, you say, you got to make sure, do you feel good about your financial systems? When we talk about financial systems, I'm asking, what does your budget look like? What is your automated or automatic investment plan looking like? All these things are the systems that are going to both hold you accountable, but also be a big part of the building of your future wealth.

• 5:38Speaker 04

  And when you think about your money, what are your financial priorities right now? What are the things that when you lay awake at night and you can't shut your mind down? From a financial perspective, what are those things that are top of mind for you? If you can get your mind wrapped around those things that are occupying that brain space, you can then discern, okay, should these be occupying my mind? Or is this noise that I should ultimately put out of my mind?

• 5:59Brian Preston?

  And then the last one, this is probably one of the most important ones. We could have very well ended with this one at the top too, is just, how good's your communication? And are you on the same page with your significant other or spouse? This is one, once again, we're going to be using tools when, if you dive into our content, we love the net worth tool as a communication tool. But just make sure you're actually having those important conversations of, what do each of you expect out of your financial life? What are y'all saving on the same page to when you want to retire? Or what's your life goals? And it doesn't matter if it's, you know, vacation in the future, paying down this debt. Just make sure you're actually having those conversations. And here's the good news, it doesn't have to be boring. Bo and I have talked about this every

• 6:44Brian Preston?

  Every year after we do our net worth tool, we actually do work, skip workdays to actually sit down with our spouses and kind of plan out the good and the bad of the year, including vacations, but also how we're going to tackle debt. Make this thing into a fun thing that can be part of the romantic side of your relationship as well.

• 7:04Speaker 04

  Now, you may be thinking, guys, this seems complicated. This seems nuanced. And frankly, most people, when they try to like turn their financial life around, they don't even make it past the first month. And why is month one so hard? Well, I think one of the big reasons is avoidance is the biggest barrier. It's really easy to just put things out of sight, out of mind. Yeah, I don't, I don't like my financial circumstance right now, but I don't want to focus on the reasons why. I don't want to focus on my budget. I don't want to focus on where my money's going. It's easy just to avoid it. Well, if you're constantly avoiding, having the hard realizations, it's going to be very difficult for you to actually put wheels in motion to change your circumstance.

• 7:39Brian Preston?

  Well, I don't mind. We'll talk about this in greater detail later, but it is, money is one of those things, time can either be your friend or foe. And, and if you're a person that is saying, look, I'll just get to this at some point in the future, I'll procrastinate on this, this making any type of decision or getting any movement with my finances going, guys, you're misleading yourself because the sooner you tackle this, and I don't care if you're behind the curve or what, or even if you're finding this at a later age, it is still going to be to your benefit to tackle this ASAP.

• 8:15Speaker 04

  And it's difficult though, because a lot of times the unknown can be terrifying. Well, I don't, I don't know if I'm overspending. I don't know if I'm undersaving and not knowing that can be sort of a frightening proposition, but it's much better to have the reality that, man, I need to face this frightening thing and come to terms with it instead of just avoiding it. And even worse, you may not even realize that you are avoiding this. You may use excuses like this, I'm just, I'm not good with money. It's not something that I'm good with, or, you know, I'm going to make more first and then I'll take this seriously. Or, you know what, everyone's struggling right now. Why wouldn't I be in struggling? Nobody can make ends meet. And this type of economy, I am just like everyone else. So I probably don't even really have a problem.

• 8:59Brian Preston?

  That's why, look, without a doubt, there definitely, this could be a difficult time for many out there with some of the things we've gone through from an economic standpoint, but it still doesn't create the solution. I don't care how bad your situation is. I don't care how bad you feel like your gap of knowledge is. You've still got to go ahead and take today to be the moment that you actually start building towards a solution. And here's the great news. Little steps can have huge impacts. So don't let anybody dissuade you or tell you you have to be a victim in this thing. Let's try to figure out how you can start making small steps today. So when you look back 10 years from now, go, man, it was the moment that I watched that show. Look, we have studio tours come through all the

• 9:41Brian Preston?

  time and we had a couple come by, just recently got engaged and they were sharing some of the story, Bo. And he was like, look, I found your show and this is kind of what got us going. That stuff doesn't get old, but I'm telling you, it can be that easy. You watch this show, you get motivated, start making something happen today.

• 9:58Speaker 04

  So even though this first month can be hard, it is vitally important. Why is it so important? Because you get to choose your hard. You get to choose, do I want to make the hard decision right now to recognize what's not right in my financial life and take the steps to improve it? Or do I want to avoid it? Do I want to ignore it? And later on in life, when I get further down the road, when time is not on my side, I'm going to have to make really, really hard decisions there. What hard do you want? Hard today or hard tomorrow? Because one of them is going to have to happen.

• 10:30Brian Preston?

  Well, I think you also get to choose what you can control now, because there will get a time, if you delay and procrastinate, you're kind of stuck with hard life decisions because there's just not a lot of great solutions out of it. But if you maybe can tackle this, and look, we've done a lot of research and done a lot of show content, where even people in their 40s who are finding out about personal finance for the first time, still have a lot of control on being able to pull levers of things that you can do and still have a great financial life in just a few years in the future. So don't put, don't put. This off, I want you to understand you're still in control in a lot of this, but delaying it is not going to be the answer.

• 11:09Speaker 04

  I love that. And then your future self is not going to be better with money unless your present self starts making changes today. We all say, oh, you know, I've, I've got time. I'll wait for tomorrow. I'll wait for tomorrow. I want to have more. Tomorrow will not be better unless you start making decisions today to set your future self up for success. Procrastination is not your friend when it comes to making wise financial decisions. The earlier you figure these things out, the more impactful they can be, the more they can change your financial circumstance.

• 11:43Brian Preston?

  Yeah. So let's talk about month two. We got to figure out, just like the first month was all about the data gathering. Now we got to figure out where's that money actually going? Now, look, this is hard. I'll go ahead and tell you, this is the part, I don't like it because there's a lot of accountability in this step. But this is going to be the thing that really funds your future offense when you start making your money work harder than you can.

• 12:06Speaker 04

  And at the end of the day, this is the one that frankly is going to take the most work. There's the most legwork that goes into this, but we have, we have a goal. There, there's an outcome that we want to come out of the legwork of figuring out where our money is going. And that ultimate goal is we want that money coming into our possession through our wages, through our investments, any sort of resource we have coming to us to be greater than the money that's going out. We want to be living on less than we make. If we can do that, now we're beginning to set ourselves up to make a change.

• 12:36Brian Preston?

  Well, yeah, I mean, this is, you just, everything you just said in that sentence was two, essentially two of the three ingredients of wealth creation is because, look, if you don't have the discipline to live on less than you make, you'll just never get ahead. I hate to be that blunt with it, but it's just the reality of the situation. So that's why that second ingredient, the money slash the margin, meaning you live on less than you make, which creates the margin in your life that you can actually start putting your money to work. You can't sleep on either one of those ingredients.

• 13:06Speaker 04

  It's, it's so pivotal. We've done a number of episodes in the past on like the financial planning pyramid and how you think about working through your different financial priorities. Cash flow and spending, managing that money in, money out, knowing where your money is going, is foundational. It is at the very base of the pyramid. We would argue you have to figure that out before you can figure out any other facet of your financial life because it is that key ingredient of wealth creation. So then the question becomes, okay, well, how do I do it? What's the process? How do I think about this? And most people have figured this out. The way that I figure out have more money coming in than more money going out is I have to start budgeting. I have to figure out what that actually looks like.

• 13:48Brian Preston?

  Yeah. And what I like about being proactive with this whole step is we get into budgeting and other things is, as I've already shared, a little bit goes a long way. So even if you're doing a hundred, you can find a hundred dollars a month by just doing a budget. That is going to create dramatic results for you. But here's the other thing I like is that you're going to quickly realize when you do the budget is how, you know, essentially triage, oh my gosh, I've just got to make small, minor changes in my financial life and I'll be okay. Or, oh, good Lord, I think I'm going to have to make dramatic changes. Maybe I have to change the car I drive, the area I live. This is why it's an important exercise is so you can triage how bad or how much adjustment is going to get you on the right path.

• 14:32Speaker 04

  And what's great is in either one of those scenarios, that person has to make huge adjustments, or even that person who has to make small tweaks, they can both have large outcomes down the road if you can begin to do them today. But you have to have a plan with where your money's going. So how do I plan? How do I think about this? Well, step one of creating a plan and putting a plan in place is to actually form a budget and to actually construct some goals and construct a plan around that budget.

• 15:02Brian Preston?

  Now, this is where I have to pick on those that are well intentioned, but they actually don't put pen to paper or actually open up the spreadsheet or download the app that actually lets them create the true budget is because it's not good enough. Just because you say, you know what? I think we eat out too much. So I think this month I'm going to spend two, I'm going to spend less on. Food. That's not a plan. You know what a plan is, is when you actually get to say, I'm going to spend $200 less on food because maybe this month I'm going meal prep, or this month I'm gonna eat out this many times less, or I'm gonna have frozen meals ready, I'm gonna switch to a cheaper grocery store, I'm gonna do a pantry audit to know kind of what I already have,

• 15:44Brian Preston?

  so I don't double buy things. There's all kinds of things you can do so that you actually have a plan versus just good intentions. Good intentions don't create financial independence. It's actually doing the work of creating the budget.

• 15:58Speaker 04

  So often I see people set up budgets, Brian, and they'll be like, alright, I'm gonna have this much eating out, and this much on housing, and this much on gas, and then they link up their accounts, and they link up their checking accounts, and they just categorize.

• 16:10Brian Preston?

  Yeah.

• 16:10Speaker 04

  And all they're really doing is categorizing. If you don't actually set this goal, I need to hit X number by changing Y behavior. All you're doing is tracking where your money's going, which is valuable, but you need to figure out, am I tracking it and actually moving towards my goals? And so here's a great example of how we would recommend tracking through a budget. And this does not have to be complicated, because there are tons of softwares, tons of applications you can use. But here's a really easy way to make sure that you're actually making it useful for behavioral change. List out all your expenses for the last, it doesn't have to be a month, maybe you do this every week. For the last week, what did I spend money on? Okay. Once I have all those expenses, now I'm gonna categorize them. Everything that's green,

• 16:54Speaker 04

  I'm just gonna highlight all my green ones. This is stuff I have to spend money on. I can't get out of this. This is my utility payments, this is my rent, this is my electricity, this is my grocery bill, this is car insurance. These are things that I know are fixed. Alright? Then I'm gonna have some yellow ones. These are a little more questionable. These aren't have to haves, but they're kind of nice to haves, or okay to haves. And then I want to highlight everything else in a red category. And these are the, what was I thinking? That was dumb. I was in line, and I bought the thing, and I didn't actually need the thing. Why did I get the thing? These are things that you could very easily cut out of your budget. Well, as you begin to look at this on a week by week, and then month by month basis, What you want to have happen is you want your budget to gravitate toward being all

• 17:38Speaker 04

  green, maybe some yellows depending on where you are in your financial journey, and cut out all the reds. Because if you can cut out all of the reds and most of the yellows, now you begin to establish some margin in your life.

• 17:51Brian Preston?

  Well, and that's why, you know, the next slide we had was just talking about, you know, once you go through this exercise, you're actually going to be, it's going to reflect, what do my priorities look like? What do my goals look like? But here's where I think it's even more important that. I think what Beau showed is, in the beginning, it is important, just from the sheer feedback of saying, doing the essentially red, yellow, and green, to know what's good, what's bad. But then you can even fine tune this tool even more, kind of like a business leader would, as you compare what you did last year, or it could be last month, or last quarter, to this month, and even tracking the change. All these things are going to let you assess to see, are we on track?

• 18:34Brian Preston?

  Are we making progress? And hopefully, at the end of the day, this is all going to lead to you being able to get to that adjustment phase that actually creates money that can be put to work.

• 18:44Speaker 04

  Yeah, you might have this realization, hey, my goal was to spend on X, but I'm actually spending on Y. Well, what you want is, you want the things you spend money on to align with your goals. And if you're not doing that, then you're not moving in the right direction. So you budget, and then you track it, and then you adjust accordingly. You have to figure out, okay, where are the things I need to tweak? What are the areas where I'm weak on? And now, look, this is difficult, because you have to be self-reflective. When you look at your budget, you have to line up the left and line up the right, and you say, okay, what do I really suck at? What are the things that I'm very bad at? And then what levers can I pull, or knobs can I adjust, to not be so bad at those things?

• 19:27Speaker 04

  Or to make the bad decisions hard? Here are a few very easy examples. If you impulse buy when you leave your house, leave your credit card at home. Don't take it with you unless you know you're going to need it where you're going. And don't have Apple Pay or some other payment function set up on your phone. How about this? If you find yourself on Amazon, just kind of doom scrolling and shopping, Cancel your Amazon subscription.

• 19:48Brian Preston?

  It did crack me up that Amazon got its entire own row there.

• 19:51Speaker 04

  Haven't we all been there? They make it so easy. They make it so easy. It's super frustrating. Um, how about this? Your kids add items to grocery cart when you go grocery shopping. Maybe, now this is a hot take, but I really want you to think about this because my family would fall into this camp. Maybe you order groceries online and you're saying, oh boy, that's more expensive. Have you ever gone to the grocery store and you're hungry? I guarantee if you go to the grocery store and you're hungry, you will spend more on groceries than if you sat at your computer and like added it up and ordered it. Even though this is a surcharge, you don't have kids throwing stuff in there. You're not making impulsive decisions. It may make sense to do that. Want to fight me on that?

• 20:24Brian Preston?

  Well, no, I'm not going to fight you because I know you're just, you're just doing the premium version, which is like an Instacart or something like that. There's another way because every time I go to the, the super targets or even my local grocery store, I notice all the parking spots I used to park at are now for mobile pickups.

• 20:40Speaker 04

  That's right.

• 20:40Brian Preston?

  So there is nothing that says that if you go to a specific grocery store and you know they have a mobile pickup option, maybe you could be disciplined enough, go ahead and do the order online. So that way it keeps the kids from throwing it. Oh, it's not just the kids. We're blaming it on the kids. I'm, I have the tendency to throw in so many bags of dried mangoes, even though those things are five bucks a pop and they, you know, and I can eat an entire sitting right in the car in the parking lot. So it is, it's just, you can do this in a cost effective way, even if you don't want to pay the premium is maybe your grocery store offers a pickup option. And all you do is you pull up with the kids. You just pop the trunk or you pop the hatch and you let them bring the groceries out and you save the money because you didn't add all those extra things in there.

• 21:24Speaker 04

  I love it. Maybe you're someone who you blow through your budget. Maybe you need to try a cash system or an envelope system, or maybe you have a hard time sticking with your strategy. You ought to put, and I literally mean do this, put time on your calendar to review the last week, two weeks, month, whatever it is, so that you know you have built in accountability. Or maybe you're someone who you find that I'm just influenced. I, I see other people doing other things and I want to spend money doing things other. Great. Fill your feed or your discover page with people talking about their financial journey. Stop looking at the folks whose lives you want to have and start looking at the. Folks that are giving you sound financial information like the Money Guy Show. So that that is what is filling up your feed. So you list out all of these things you're bad at and make those bad things very, very hard to do.

• 22:08Brian Preston?

  Now, look, we made a very long list of things that you're potentially bad at. Can we flip the script? I'm the eternal optimist. What are the things that you're actually good at? Because I know our saying, just like we say, make the bad habits as hard as possible. We want to make the good habits as easy as possible. What are we talking about when we say to be good?

• 22:24Speaker 04

  Maybe you're someone who gets motivated by incentives. You know, if you have a goal you're working towards, you can reward yourself that you'll do it. Do it. Plan out small celebrations. Hey, if I stick to my eating out budget this month, then next month, I'm going to go out to eat at some nice restaurant that I wouldn't go into otherwise. That's great. Or maybe you're someone who's super competitive. Find a friend or a partner or your spouse and figure out how can we challenge each other and have a little competition to see who can live the most frugal? Who can stick to the budget? Who can nail it? Or maybe if you're someone who's really good at to do lists and like checking the box and accomplishing tasks, then maybe you just do that for your finances. Here is my weekly, monthly, quarterly, biannually to do list financially. I'm going to do these things. I'm going to do these things.

• 23:06Speaker 04

  Again, make the things that are good as easy as possible. The things that are hard as hard as possible. Make the things that are bad as hard as possible.

• 23:14Brian Preston?

  Um, I love, we, I feel like the first two, two months or the two focuses we've had on today's show was about the initial planning of getting things going. And then we had all the accountability of tracking. That's a good defense.

• 23:28Speaker 00

  Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5, only at McDonald's for a limited time.

• 23:40Speaker 01

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 23:44Speaker 02

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies. 18 plus.

• 24:09Brian Preston?

  I like that by the time we get to month three, this is where we get to essentially the offense of this system. How are we going to take all that hard work you did on the planning, on the discipline of tracking your expenses? How are we actually going to now take action and start creating wealth?

• 24:26Speaker 04

  That's right. You've created margin now and the question becomes, what do I do with the margin? Really, there are three things that you do with new margin in your life. You can satisfy debt, debt that you've accumulated and paying, beginning paying that off. You can save it and we're going to use saving here to be like synonymous with like going into cash, building an emergency fund, or you can invest. You can now get those dollars working for you. And how you're going to decide on where you are is going to depend on where you are in the financial order of operations. But you have to, without knowing month one, where I'm at, and month two, where's my money going? I can't arrive at month three, how do I now deploy my extra margin in the best way possible?

• 25:07Brian Preston?

  Well, I mean, there's even ways that you can break out, because we've talked about the financial order of operations is the system we've created. If you go download your copy, moneyguy.com/resources, or even check out Millionaire Mission, of course, it's going to lay it out for you. But we want to go even deeper in that. We want to talk about, look at your, how much money you have coming in and knowing how that is being broken out or spent.

• 25:32Speaker 04

  I love it. So let's think about this. Let's say that you have a $5,000 a month income. You're making $60,000 a year. Well, you're obviously going to have taxes. You have a thousand dollars of taxes come out of that. Then you're going to have maybe insurance come out and a 401k contribution come out and the HSA contribution come out. That's just your saving and investing, pay yourself first. So now your take home pay is actually like $3,345. Okay, well, out of that $3,345, you know you've got $1,500 in fixed bills and then you want to save in your Roth IRA. That's 583 a month. And you have a $500 sinking fund, maybe for the next car, for the down payment, or for whatever might, whatever intermediate term goal you might have.

• 26:15Speaker 04

  And so then that leaves you $762 of discretionary. Spending. So then you take that $762 down and say, okay, I know that I have some fixed costs, like groceries that can be variable, or I gotta get my haircut, or whatever those things may be. And I have those, and then whatever's left over, that's my fun money. That's my going out. That's my going to the movies. That's my hobby. That's my... If you can think about your budget and your cash flow plan this way, what you're going to recognize is you're not going to squeeze out the important stuff. You already took care of the important stuff on the front end, and there wasn't money left over to waste on the non-essential stuff.

• 26:49Brian Preston?

  Well, I think it's also somewhat humbling. I know when I first got out, started making money, it seems easy, and I'll just use, I haven't used this term in a long time. I was doing what I call go-kart math, is that when you know you're coming out of school and say you're making $4,000 a month, you go, well, if I'm making $4,000 a month, it's easy to afford a $700, $800 car payment, because that seems like that's a lot less than the $4,000 I make. But isn't it interesting, when you actually do this exercise, you see how much of the money you actually have zero control over? It's because whether the taxes are coming out, whether it's the, you know, just things that are automatically have a place already. This is why it's so important to do

• 27:31Brian Preston?

  this exercise, because it will protect you, because I think as humans, we do the spending part easily, where we do the mental math, where we say, hey, I can afford this. But we never think about it in terms of going on offense and saying, no, let's take how much money I have, so I can go through this exercise and see how much of my, is going to be left, so I can put my army of dollar bills, so I don't have to do this job for the rest of my life.

• 27:55Speaker 04

  I love it. Again, if you're trying to figure out, okay, what's the, I see this cash flow example, but for me, what's the next decision I should make? What's the very best, very next best way for me to deploy my dollars? That's why we have the Financial Order of Operations. That's why you can go get your free copy at moneyguy.com/resources, to show you how to deploy your next dollar. So we've made it through the first three months. Now, Brian, now that we've done a lot of the hard part, a lot of the heavy lifting, we get into month four, and month four is all about tracking your progress. Okay, I did the thing. I know where I'm at. I know where my money's going. I know how to deploy my dollars. Now I get to look back in month four and say, how am I doing? What am I doing? Well, okay, well, how do we track our progress? Well, step one...

• 28:39Speaker 04

  Actually track it, actually look back. Did I put the money in the buckets that the money was supposed to go in? Did I pay down the debt? Did I build up the emergency fund? Did I not go over my eating out budget? Did I do X, Y, Z and did I not do not X, Y, Z?

• 28:55Brian Preston?

  You see why this is all now interconnected is because this is where the budgeting is, nobody likes the budget. I mean, I'll just, anybody tells you they like the budget, they actually enjoy it. They might like the results it's creating for them, but the actual work, there is work involved with it. But this is what's needed is to, in order to track it, this is back to now you can look at month to month changes. You can see the difference. Same thing with the net worth tool. You're going to be able to see tracking it, what the ultimate change or delta that has become from your good behavior, from your discipline, it's important. That's why these things, all those steps we're telling you, it's just like Mr. Miyagi wax on, wax off, and all the other things. It makes sense. Once you see it, you're not going to like doing it in the beginning,

• 29:38Brian Preston?

  but you're going to say, I get it now. This is why this is so important that I execute on this.

• 29:42Speaker 04

  So tracking it is the first part. And the second part is make small adjustments. How, what are the things I'm doing poorly? How can I tweak to fix that? What are the things I'm doing well? How can I do them even better? And what you're going to recognize is that as you make those small adjustments, you put yourself in the position to begin to optimize. Are there things I can do like set it on auto pay? Have all my bills be auto paid, have all my savings be auto drafted, have all this be optimized? So that I don't have to think about, I have to waste mental calories and it just sort of becomes second nature muscle memory.

• 30:15Brian Preston?

  Automatic for the people is just created so many millionaires that I know. I mean, I think about some of my clients that I don't think they'd be millionaires without me squeezing them. Hey, I saw you're making a little bit extra this year. Why don't we increase your automatic investments an extra $400 a month? They didn't realize it, but I was planting the seed of that one little behavior of making it automatic was the, probably the secret ingredient to creating their long-term success. So don't sleep on the fact, optimize and increase and automate. As much as you can.

• 30:50Speaker 04

  And then we want you to solidify the behaviors. Okay, making it through month one, that's kind of like the honeymoon phase. You're really, you're motivated, if you, if you can make it through, you feel good. Month two is exciting because there's a new thing that I can do. Month three, I'm coming up with a strategy. Month four, if you think about this sort of in weekly terms, that's where it starts to get easy to get lazy. It starts to get easy, oh, well, I did it and it's lost some of the luster and it's lost some of the honeymoon. We want you to make sure that you continue to reinforce those good behaviors. Now, you're moving from having to change a behavior to turning a behavior into a habit. How can I make the way that I'm approaching my financial decisions habitual where it becomes second nature? And once you do that, then you can begin to put in little celebrations there to celebrate the milestones.

• 31:33Speaker 04

  Hey, I was gonna pay off this debt, I was gonna knock out this credit card. I did it, now I want to celebrate. Oh, I was gonna, I wanted to get my savings account to $10,000. Oh, I did it, how can I celebrate that to give myself the motivation to keep going?

• 31:47Brian Preston?

  Well, it's also important, you've got to celebrate because, I mean, once again, back to these studio tours. We have so many people come through and it cracks, it cracks me up is that usually one of the spouses will be all into it and they watch a lot of our content or listen. And then the other one is the drag along. Let me to go ahead and tell you, you've got to do these celebrations because you might be on fire or super motivated for a lot of these financial things. But if you're not involving your spouse or significant other and even creating celebrations, you might be creating a wedge that you don't even realize. Because that's something that I've always tried to find in a healthy way. This is, we're so good at the math, we give you the math. I think that's what makes the secret sauce of the Money Guy Show work so well. We load you up on the analytics, but we're also sentimental guys enough

• 32:31Brian Preston?

  that I'm trying to give you to live your best life. So make sure you are celebrating those milestones so that you can look back, so you enjoy your twenties, you enjoy your thirties, you enjoy your forties, and you definitely look back in your fifties and go, hot dog, I can't believe we did all this. Thank goodness we made those sacrifices, but also enjoyed every one of those milestones.

• 32:51Speaker 04

  So you've made these adjustments, you've made these changes, you've made these tweaks. Now we get into month five, and month five is where I think it gets exciting. Checked out your plan. You've, you've, you've done these adjustments where you've changed the way that you spend and you've changed the way that you save and you've changed the way that you look at money in and money out. Now you get to figure out, okay, if I continue to implement this, if I continue to move along on this trajectory, where am I going to end up? What does my tomorrow actually look like?

• 33:19Brian Preston?

  Well, I mean, we're math nerds. I just said that in the previous statement is that I like that you get to actually run projections. And this is what's so cool depending upon how old you are and how long you have is those little tiny decisions can have such dramatic or huge impacts in your future. Actually go run the projections, do the math. I think you'll be surprised at how just a little bit goes a long way, whether it's a hundred dollars a month here, $500 a month here, it all adds up.

• 33:46Speaker 04

  Yeah, again, we're working towards ultimate goals here. So if you're, if you're paying off debt, punch it into a debt calculator, say, okay, if I continue doing the thing that I just came up with, when will I have that knocked out? If I'm building my emergency fund and I know that what my six month of expense number is going to be and I'm able to create some margin to save towards that, when am I going to complete it? Or if I'm investing, how do I know? Am I on the curve? Am I behind the curve? Am I ahead of the curve? If you can actually project out the behaviors that you're implementing today to see where will I be in the future? You can then use a tool like our Know Your Number course. If you go to learn.moneyguy.com to show you what that finish line is.

• 34:25Speaker 04

  Okay. Are the changes that I'm making today actually going to get me to the finish line that I ultimately want to be at one day?

• 34:32Brian Preston?

  What I like is you can use this as another one of those tools that allows you, you just, you can change scenarios. You can change, if you worried about inflation, let's hike up inflation. If you think you're going to do a better rate of return than some of the projections we show on the show, you can jack up the, the rate of return, or maybe you're scared to death that that was what happened in the past, isn't going to happen anymore. You can lower the return. And what I like, one of the, the things that we built into this tool, Beau, that I like is that if you just save a little bit more, it'll show you how much sooner you potentially, so those little adjustments can actually create just great narratives that not only you can celebrate, but also Uses a great communication tool.

• 35:11Speaker 04

  And then as we get to month six, as we begin to round out this journey, we want you to reassess and then repeat the process. And we say reassess, we want you to check both your progress and your systems. Okay, if you're not on track, you just got through step five and you projected it out and it's not going to quite hit exactly where you wanted it to hit. What other knobs can you adjust? Is your progress in line with your priorities? Is the only way you're going to hit your financial goals by sacrificing? Something else that you care deeply about and is that okay? Are you balancing life today with life in the future, Brian? This is one you see all the time that people screw up horribly.

• 35:51Brian Preston?

  Well, I think it's one of those things out. What I like about reassessing and just checking out where you are is what got you success in the beginning might not need to be what you're still doing. There's a reason I talk about in the beginning. Bedazzle your basic life, meaning I do still want you making memories, going on vacation, but maybe this is not the time to be luxurious because it's just you don't have the money because that money, that time component and what it could become for you is so valuable. What I worry about is that you continue these behaviors once you get into your later 40s, 50s and you're now you have enough army of dollars, your assets, but you're starting to create these weird dynamics within your relationship because you just come off as a miser. We want you to be a financial mutant,

• 36:32Brian Preston?

  not a financial miser. So that's why you do need to reassess your goals and even the behaviors that got you there. So you don't get trapped in those things and don't even get to live your best life. Remember, your best life, it maybe it was super disciplined in the beginning, but that doesn't mean that you need to be living like that miser in your 40s or 50s. Hopefully you get to eventually enjoy the fruit of all this hard work.

• 36:56Speaker 04

  And as you're reassessing this, one of the things we want you to do is be honest with yourself. What are the systems that you have in place that are working well for you that you're good at? And then what are the systems that you have in place? That are difficult and are there things you can do to make the difficult things easier? And are there things you can do to reinforce the good decisions? And as you begin to develop and define those, should you begin creating new goals? And now, this is not what I mean by goal. I want to hit X number, X net worth by the time I get to financial independence. That's a great long-term goal, but we're talking about the short-term, the short-cycle goals that you can aim for, like I want to hit a 25% savings rate. That's a short-term goal that you can apply this process to and you can actually hit. Or I want to max out my Roth for the first time this year.

• 37:41Speaker 04

  Or I want to pay off X dollars of debt in the next 10-month period. If you can define your goals in that way and you apply this process to those goals, then what you get to do is you get to just recycle all the way back through the system. Back to month one, back to month two, back to month three, back all the way to month six, reassess, define new goals and continue to work towards those goals on a continuous cycle till one day you wake up and you say, holy cow, I'm a financial mutant and I didn't even realize it.

• 38:11Brian Preston?

  I'm a big fan of the whole repeat process because a lot of people, I think, they think we're playing to just finish. You have a goal, you accomplish the goal, you're done. This is not necessarily only a goal. Yes, you're going to reach milestones, you are going to go by those mile markers, but you're going to find out as you reach more and more success, this is a long-term game that you're involved with, that if you do it right and you enjoy the process, you enjoy what you're doing, it doesn't have to stop. It's going to require a tool, and this is a celebration. That's not something to make you feel like, oh my God, it is daunting that this thing just goes on. No, if you're doing this right, this is something you get to celebrate, that you get to update

• 38:55Brian Preston?

  your goals, update and do life in a way that you never, ever thought was even possible.

• 39:01Speaker 04

  This is sincere. If you do this, it really can change your life. If you're in a financial situation that you don't want to be in right now, you have to be willing to do something you've never done to change that. You can follow this process. You can take the next six months and you can make decisions today and over the course of the next 180 days that can literally change your life. But you have to be willing to do it. You have to put in the time, you have to put in the work, and you have to care more about your financial future because if you don't end up owning your financial future, then your financial future will end up owning you.

• 39:41Brian Preston?

  Let me give you some quick homework things, just as a reminder that Bo covered today on the show. You gotta go check out our resource page, moneyguy.com/resources. Go get the free stuff there. But then a lot of you after this, you're gonna be motivated, you're gonna go, wanna go to learn.moneyguy.com because that's where you're gonna be able to find that net worth tool. Get to work on tracking where you're at so that you can look back in a year and have a celebration on all the debt you paid off, all the assets you built up. And then also, don't sleep on that know your number course either because that is going to be the thing that lets you know, are you behind the curve, on the curve, or ahead of the curve? And if you're ahead of the curve, this is when we get to get away from the miser life. You actually get to start celebrating so that the kids, the family members, don't

• 40:23Brian Preston?

  make fun of you and make you a punchline because you're actually adjusting because you have this great assessment tool. Guys, we load you up. This is why we're here, so you can live your best financial life. Thank you so much for letting us create this content for you, for you showing up every month. We don't take it for granted and we're gonna keep creating this. I'm your host, Brian Preston, Mr. Bo Hanson, Money Guy team, out.

• 40:46Speaker 04

  The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.

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