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Entire Transcription of Episode 158
On the show today I am answering the question: How do I possibly save money when I’m living paycheck to paycheck, I have debt, and no matter how hard I try…I just can’t save any freaking money!? I definitely have a thing or two to say about it AND at the end of the episode you will have plan a free tool to help you create your own solution to what seems to be a never-ending problem.
Today’s episode was created from a question I receive all the time, and just recently from Stacy in Florida:”Peach, how do I save money when I’m living paycheck to paycheck?
“Well Stacy, I wish I could give you a really quick and easy answer, but it doesn’t work like that. The concept of saving money is extremely simple…but of course it gets complicated when we try to save money….therefore, we are going to bust through walls of saving money when you’re living paycheck to paycheck and create a REAL plan.
Ready or not, here we go…
A Trip Down Memory Lane…
To start off this episode, let me take you on a little trip down memory lane because I can definitely relate to anyone feeling the squeeze between living paycheck to paycheck, trying to save, and trying to pay off or just keep up with the debt payments.
My wife Andrea and I were married in March 2008. When we got married, we had a little student loan debt, a little credit card debt, and now we also had some wedding debt. Over the next few years, we both received promotions at our jobs, which meant our income went up (actually it doubled from when we were married), and we had life allllllll figured out.
Well, at least we pretended we did.
You see, while our income went up, ironically so did our debt. We were so American that we were doing what we do best – borrowing more and more money until we finally fall flat on our face. After three years of our income going up like a rocket ship, we were still living paycheck-to-paycheck and literally couldn’t keep up with the monthly payments and the lifestyle that we had created for ourselves.
Going Completely Broke
February 23rd 2011 – this is the day we went completely broke.
We had over drafted our checking account. We had maxed out the credit cards, we couldn’t make the monthly minimum payments, and we were facing $52k in consumer debt. And guess what I remember asking myself….”How in the world could I possibly save money when I’m living paycheck to paycheck, I’m completely broke, and I have all of this debt?”
The reason I share this is maybe I haven’t walked in your exact shoes but I’ve been down a similar path that you may be on right now. And I promise you – I PROMISE you there is a light at the end of the tunnel. In fact, I wouldn’t call it just a light – I would call it a LIFE you want to live. There is a life without debt, a life with savings, the ability to build wealth, and most importantly – a life where you don’t stress or worry about money.
Did you know the number two cause of divorce in North America stems from financial problems in a relationship. Number one is infidelity, but number two is directly related to money problems and money fights.
So how do you turn this around, right?
How do you stop living paycheck to paycheck? How do you save money when you’re broke or living paycheck to paycheck? How does this possibly work for someone like me?
I get it – I don’t know your circumstances right now. Maybe you’re facing a job loss, going through a divorce, or maybe you’re in just a really tough moment in life. But here’s what I do know:
The proof that something can be done is that someone else has already done it.
I was telling my son this and he said, “so like Tom Brady won 7 super bowls, so I can do that too?”
Alright, so let me tweak this a little bit….How about the proof that you can stop living paycheck to paycheck, start saving money, get rid of debt, start building wealth, and live life without financial stress is that Chris Peach and his wife Andrea have done it.
You see, we don’t have some fancy degrees in finance or a bunch of random letters next to our name. I am a firefighter and my wife was a TV news reporter. I PROMISE you if these two knuckleheads could figure it out without a real plan to start, you definitely can accomplish this with a plan in place. And I am going to give it to you right now….Are you ready for this mind-blowing tidbit:
What gets measured gets managed
Creating a Real Budget
Most people don’t live on monthly budget. And those who say they live on a budget think they’re living on a budget but what they’re really doing is adding up how much they spent at the end of the month and then saying CRAP – we overspent again!
No, no, no – a budget is telling your money where to go BEFORE you actually spend it. Let me ask you this: would you be comfortable driving across the country without a fuel gauge? You know, just kind see how far we can drive until we think we may need gas again?
Do you think a business would stay open if they just guessed….can you imagine if a restaurant just winged it and said, “yeah, go ahead and order…I don’t know…maybe 100 or 500 lbs of beef and I don’t know about the same amount of chicken, and whatever else you think we need.” NO! This restaurant would be going out of business in a heartbeat, right?
How is this any different from your your own finances. Money comes in and money goes out and we have been programmed to spend, spend, spend MORE than what comes in. Don’t believe me….you don’t think you AND I have been PROGRAMMED to spend money. Let’s play a little game here and see how you do….Tell me what TV show this is….
How did you know it was the theme from Friends and not the 1994 song I’ll be there for you by the Rembrandts?
How about this one that is literally known in every country on planet earth?
No mention at all of hamburgers and fries but we all knew that was McDonalds, right?
How about this one?
There are dozens of car insurance companies, why do we automatically know they’re talking about Geico? They didn’t say Geico but we all either thought of a Gecko, a caveman, and the Geico car insurance company.
Here’s one more….
What’s in your wallet? That would be Samuel L. Jackson reminding all of us that we better have a Capital One card in our wallet, right?
My point is YES we are programmed to spend…and spend….and spend….and all of a sudden you wake up and realize we spent more money than we had, we live paycheck to paycheck, we have too much debt, and it feels freaking impossible to save money!!
The Solution Starts Here
SOLUTION: make a freakin change!
78% of people live paycheck to paycheck, so that means you NEED stop doing normal and START being a weirdo. Weird people create a plan for their money BEFORE they spend it, they stick to THEIR plan, and they WIN. Normal people take financial advice from Samuel L. Jackson and sign up for Geico because a talking English gecko and a caveman thought is was a good idea.
Get on a plan…and I will give you a plan because I promise you it ain’t rocket science. It’s a little bit of 5th grade math and the commitment to make a change.
But don’t let anyone tell you it’s going to be easy. If you hear that – RUN for your life because you’re probably looking to get swindled. Yes the concept is simple: tell your money where to go before you actually spend it and then follow your plan. But, the follow-through is the challenge. That’s true in any change we make in life, right?
Weight loss, health habits, going sober, stop smoking, read more, work less, work more, or whatever change you’re making – the idea is simple. But the follow-through is the hard part. And this is nothing new – 3,000 years ago King Solomon said the rich rules over the poor, and the borrower is the slave of the lender.
The rich rules over the poor, and the borrower is the slave of the lender.Proverbs 22:7
Wow, fast forward 3,000 years and it’s as apparent as ever. He didn’t stop there, he also said: The wise store up choice food and olive oil, but fools gulp theirs down – meaning the wise save money for when they need it most but fools spend it all right now. Holy moley how did he know all of this way back then?
The wise store up choice food and olive oil, but fools gulp theirs downProverbs 21:20
It’s Not Rocket Science
Like I said, it’s simple 5th grade math – addition and subtraction. The formula is your income minus your expenses are greater than zero. That’s it. And whatever is greater than zero is your savings. However, when I sit down with couples and help them with this formula, we change things up a bit.
Instead of income minus your expenses are greater than zero, we change it to income – savings = expenses. Meaning whatever you have leftover after your savings is what you have to spend.
But PEACH, what about my daily Starbucks latte….how will I possibly live my life? Or what about my $700/month going out to eat habit – how will I possibly remain friends with these people? Or what about our summer vacations….how will our children survive without our annual $10,000 Disneyland trip with 4 day park hopper passes and the VIP tour to see Mickey and Buzz Lightyear in person? What will our kids do?!
Your Future Depends on It
But what about you? What is going to happen if you don’t make a change now? How are you going to retire? Who will pay for your kid’s college if they choose to go? What happens the next time the hot water heater and A/C unit goes out the same week? Things in this world cost money and it’s up to US to make sure we have a plan for that money. The govt is not coming to save you.
Oh, well that’s what socialism is for…because that’s worked out so well for Venezuela, Cuba, and Soviet Union.
Side note: did you know that 75% of Venezuelans lost on average 19lbs in weight due to nationwide food shortages under socialism structure?
Anyhow, the government – whether republican or democrat, is not coming to save you which means YOU MUST create a plan and then stick to the plan you created for your life and money.
Sorry Sam Jackson, love your movies but I don’t need to buy something I can’t afford using that thing in YOUR wallet with a 29% interest charge attached to it.
What gets measured, gets managed.
Take back your life and money. They (meaning the banks, the credit card companies, the marketing geniuses and all the businesses using Sam Jackson to try and get into your wallet) have been kicking our butts for years.
That stops today.
I know – it’s overwhelming right? Making a change in any aspect of your life is hard, ESPECIALLY when you’re making a change in something that literally touches every aspect of your life – money. But you know that everything worthwhile in life is uphill. If it were easy, everyone would be wealthy and Sam Jackson would be sticking to what he does best – screaming obscenities in movies. If you take the step today to make a change in your finances, then I’ll take that next step with you and help you get started with a plan.
I have some free budget templates you can take with you and I even put together a few videos to show you exactly how to set them up. They’re completely free and I want you to have them to start using right away.
But Peach, in the past you’ve said that nothing is really free….so how are they free?
Fair enough – Yes, this podcast is free and there are a ton of free resources I have for you at Money Peach dot com. And My hope is you just get started today by making some amazing changes in your life with the free tools and resources I have for you and maybe down the road you take that next step with me as your money coach. But, for now – take that first step and create a REAL plan for the money in your life.And if and when you’re ready, I would love to be your money coach in the future. Oh, and lastly you can grab the free budget templates and videos over at moneypeach.com/budget or by simply opening the show notes in your podcast app and clicking the link that says “Free Budget Templates”.
Alrighty my friends, Thanks so much for being here and the best way to support the show is to Subscribe to the show and if you found a ton of value in this episode (which I know you did), then please share this with someone or everyone you know!That really helps grow the show audience and allows me to keep doing these weekly podcasts!
Thanks so much for listening, God bless and take care!
Do You Have a Budget that Actually Works?
The first step to any solid financial plan is to tell your money where to go instead of wondering where it went.
Here are the same budget templates I use and I will also walk you step-by-step with how to use them.
They’re all yours now!
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Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011.
If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.