2 Ways To Save Money – How To Budget
Kris Krohn today on Limitless TV. We are doing a fun project, I have reached out to one of our other YouTube channel fans who talks a lot about budgeting and savings because you know what? This is something that we need to get you more information on and she’s going to be sharing from her channel some of her best information and knowledge on what is the purpose of budgeting, how do you do it to your best ability and we got all of that coming your way right now. Alright, Kristen, so excited to get to know you better and I’m excited for the opportunity that we have to collaborate on today’s video because a lot of the people on my channel specifically are looking for information about budgeting, they’re looking for information about savings and obviously with your channel, this is something that you really specialize in, so Kristen Marie, that is the name of your YouTube channel. Can you just start off by giving a little bit of a summary about what do people find, by the way, when they go to your channel, why do people subscribe? – When they first go to my channel, they see that I am a millennial and I’m a performer so I deal a lot with inconsistent income so I think what draws them in is seeing somebody that doesn’t make the same amount of money every single month but yet can still invest for the future, I just bought my very first home by myself, so I think what draws them in is the initial inconsistent income and what keeps them is, how does she make that grow? How does she make that work for her? I love that. You know, so with Limitless TV, we’re often educating people on real estate investing and growing their wealth and perhaps one of the most important foundational principles does begin with this conversation of budgeting and saving. How do you specifically educate and help people, first of all, do something most people don’t want to do which is budget and then how do you help them grow themselves once they are budgeting? I first try to get them to, like you said, sit down and make the budget, I do a lot of simple, like three-step budgets, because without that number, without knowing how much they need each month to survive, there’s no way you can invest for the future if you don’t take care of yourself today. So what I like to do is, I’ll bring them in, we’ll do the three step process of getting your numbers down, to know where you are and then from there, you can see how much you can grow in the future. I love that. Now I hope that this doesn’t come across rude in any way because I have no idea what your answers are gonna be but I just want to poke the bear a little bit. – Okay, I’m ready. – You know, when we’re budgeting and trying, the whole purpose the budgeting is to really kind of get a handle on our finances which is so important and there’s a lot of people out there that really kind of think that that is the end goal at the same time when in fact, there’s no way to budget well enough to create retirement without adding the component of investing, we’ve got to find a way to grow our finances and we know that we can’t save ourselves to retirement, there’s just not enough excess money for the average person, I believe, in a 40 year working life, to really save enough to lead to what I would call a good safe and secure retirement, so I feel like investing is an important part. Where does investing fit into your budgeting model? Because I work with so many people with different types of income, once the budget is done and we know how much money they have to work with, I try to get them to invest before they spend any money. For example, if somebody makes a thousand dollars and they need eight hundred to live, I will tell them to take 10% of what is left over and invest that money, kind of in a way you’re taxing yourself, you are taxing your future self and putting that money aside for later before you go out and spend any of your extra income. It’s like it’s built into our DNA that if there’s extra money that we have to spend it, we have to find a way to increase our lifestyle and yet the whole purpose of budgeting is to create this excess for a different purpose. What are some of your most successful ways to actually encourage people to invest the rest as opposed to just increasing their lifestyle? The way I like to do it is, if no matter how much money you make, if you make ten thousand this year but a hundred thousand next year, I try to tell everybody to invest at least ten percent and that is not what goes into your savings, saving should always be about twenty, I say, ten percent always no matter how much money you’re bringing in, so if you do get a big raise and your lifestyle is about to change, you should always have a consistent percentage of what you are putting into your investments, that way as your wealth grows, so do your investments, they grow together. Absolutely love that. So let me ask you this then, if someone is doing a successful job, budgeting and putting money in savings and setting money aside for investing, what do you think people should be investing in? Personally, I like real estate, obviously, because I just bought a home. I also like IRA’s just because I like that idea and in the event that are working, a nine-to-five job that does offer a 401k match, try to take that extra money and put as much as you can into that match because essentially that is your company giving you extra money for the future so I would say real estate, IRA and 401k match. Well, I love what you’re doing here with people, I think it’s amazing and beautiful Kristen, that you got a channel that is teaching people these amazing principles of budgeting and saving because heaven knows our world needs it and often before people are really ready to take some of the advice that I have for them, they’ve got a gain control over their finances especially when there’s not enough money left at the end of the month, it’s how do I create that gap, how do I create that margin. Last question that I want to ask you is, obviously, there’s a lot of people that are wasting money because they’re not budgeting. Is there a certain amount of money that you think you can try to help people save from cutting down on unnecessary spending or spending money where it’s not really giving them much gain or by trading out for some less expensive insurance or services, etc., or some like, is there generally like an amount that you’re able to successfully help people save that is just being lost and wasted from lack of knowledge and budgeting? Yes, I like to separate everybody’s spending into categories, like your rent and things that are always going to stay consistent and then your living expenses and then you’re going out and your lifestyle expenses. I try to start with 5%. In a month, can a client or a viewer cut down their spending by 5%. A lot of my videos will have, you know, easy ways to have dinner at home, easy ways you could have your friends over instead of going out to see the movies or a sporting event. So if you can find ways to still live your life and feel as though you’re not depriving yourself, you are more likely to save and you’ll be more likely to stay on your budget. It’s when someone feels deprived that they’re going to go off their budget, throw it out the window and say, I only live once and this is what I want to do. So you really want to find the balance where people can live the life that they want but doing it with a budget in mind and I just want to comment on this for our viewers, saving 5% may not sound like a lot, it’s a ton. If someone, for example, is living check to check or let’s even say that a person is getting ahead 10% a year, meaning there’s 10% they’re not saving, well going from 10% to 15%, that’s a 50% increase, that extra 5% is a meaningful amount especially if it’s directed the correct way, if it’s invested the correctly, it certainly has the ability to start the snowball effect of something small turning into something great with time. So I think what you’re doing with people is really awesome and super valuable, Kristen. I mean, you know, there’s so many different financial philosophies out there and I think that there are pipey differences and your philosophy, my philosophy, but this big principal picture of what you’re doing to help people starting to save money that is available to them, budgeting it appropriately, that’s providing a real service for people so I’m certainly going to encourage everyone on my channel to hop over to your channel, Kristen Marie, and subscribe so that they can get some more knowledge and education on how can I start saving that extra 5%? Exactly. Thank you so much. You’re welcome. Kristen, I want to thank you so much for being on the channel today. Huge value, great information and you know what? If you’re watching this and thinking, “Wow, I need more knowledge and information from Kristen, then I want you to click on the link, go to her channel and subscribe there because she’s got a lot more value to offer you, that’s the whole reason why we decided to collaborate and get together so I hope it helps those you that need that help getting her specific information.