Episode 15: How Do I Make a Personal Budget?

How to create a personal budget with Mak & G
Episode 16: Opening a Bank Account

SHOW NOTES

In this episode, Mak & G start making their personal budget, they find out the importance of prioritizing what they want to buy and discuss different ways to help them to have self-control with their money.

 

Mak & G carry on their exploration into budgeting, creating their personal budgets so they can afford the expensive things they want.

 

They learn how to make a savings plan and the importance of prioritizing purchases when creating a budget.

 

Mak & G discuss why they’re saving money, how to reduce temptation spending, and how to keep your saved money safe…

 

“I want to make sure we save some money so we have some when we need it later.” – Mak

 

“Even if you don’t have a specific purchase in mind, setting aside savings is always good practice.” Ben Jones


Time Stamps:

00:22 – Our ideas on how to increase our business’s income.

01:03 – Ideas on how we can increase the amount of allowance we get given.

02:15 – What we’re saving our money for.

03:14 – Things we spend our money on.

03:33 – How much we make from our allowance and pet sitting service.

04:30 – How to start making a budget and saving plan.

06:03 – The importance of making compromises in your budget.

07:28 – How to stop yourself from spending money so you can save it for later.

08:05 – How to keep your money safe.

09:20 – How to increase your self-control and stop temptation spending.

 

Resources:

Stock Yards Banks and Trust

 

Connect with Ben Jones:

Quiz

#1 Where are higher-income families more likely to do most of their Christmas shopping, compared to lower-income families?

A) At a pet store
B) At the North Pole
C) Online
D) At a yard sale

#2 What are lower-income families more likely to use to pay for Christmas shopping?

A) Home-grown vegetables
B) Compliments to the store clerk
C) Monopoly money
D) Credit card

#3 How do 29% of Americans plan to pay off their holiday bills?

A) By doing the dishes for six months
B) By joining TikTok and hoping they go viral
C) Using their tax returns
D) With money from generous strangers

#4 How long did we calculate a typical $1500 credit card bill would take to pay off at average interest rates if you only paid the minimum amount?

A) 44 months
B) Forever
C) Ten years
D) Never

#5 Prices today are around 50% higher than 20 years ago because of what?

A) 44 months
B) Forever
C) Ten years
D) Never

TRANSCRIPT

MAK: Hey Dad, I think we’re ready to make our budgets!

 

GRANT: Yeah, we have a ton of ideas for how we can increase our income.

 

DAD: Alright, well let’s hear them!

 

GRANT: Well, it’s kinda gross, but some of our customers don’t pick up after their pets. We could offer to do that for them once a week for a little extra brown, I mean green.

 

MAK: And while we’re at it we could offer to do other small tasks, like watering their plants.

 

GRANT: We’ve also decided to up our pet grooming game. [dog bark] So we’ll do a nail trimming and bath! [bubbles or water sound]

 

DAD: Nail trimming sounds dangerous, but those are all great ways to expand your business. How about your allowance? Did you think of any ways to increase that?

 

MAK: Well, we know how much you love your coffee Dad. We could make it for you in the morning, that way you can focus on starting your day!

 

DAD: Oh really? Well, my coffee maker automatically starts at 6 am, are you going to get up that early?

 

GRANT: Ummm, probably not, maybe we think of another idea…

 

DAD: That’s what I thought. So what other ideas do you have?

 

MAK: Well, we know mom likes a clean car.

 

GRANT: You really need to get that white bird vomit off your car. Maybe we could wash the cars every other week and vacuum them out?

 

MAK: Grant, it’s not vomit!! That comes out the other end.

 

GRANT: Oh GROSS!!!

 

MAK: Ok Dad, what if we help make dinner a few times a week?

 

GRANT: Yeah Dad, you do look pretty tired after work. You should relax and let us handle it! He’ll probably fall asleep and won’t need dinner.

 

MAK: Good idea Grant.

 

DAD: Hmm, you know I think we could work with those ideas. If you both help out with dinner a couple of times a week and wash the cars every other week, I’d be willing to add on an additional $5 to your allowance.

 

MAK: Alright!

 

GRANT: Thanks Dad! Can we get started on our budgets now?

 

DAD: Sure thing! Let’s do it! Just remember a budget isn’t just about spending. It’s important you start developing good savings habits too-

 

MAK: Daaad, we already know that! Can’t you just help us make a budget?

 

GRANT: Yeah, I need to start saving now! I’ve got BIG plans for my money!

 

DAD: Oh really? What are you hoping to save for? And, let’s not forget you should at least save 10% of anything you earn to get into good habits.

 

GRANT: Well, I want to save to buy something. You know, the new Super Mario Maker 2 is coming out. I loved the first one, and it sounds like this one is great. 

 

DAD: How could I forget?

 

MAK: Yeah, you played that game all the time, you couldn’t even put it down.

 

GRANT: I want to buy the one with the bonus pack, and I’ll get a bunch of extra content.

 

DAD: It’s great that you have a clear goal in mind G, but before you can make a plan to save for it you have to know exactly how much you’re making and spending each month. So what do you currently spend your money on? Okay, now how much are you making with your allowance and pet sitting business?

 

GRANT: We both get $15 from pet sitting after all the business expenses are accounted for, of course.

 

MAK: And with the raise in our allowance we’ll be making $10, so we’re each making $25 a week.

 

GRANT: That seems like a lot of money, but will it actually pay for everything we want?

 

MAK: I don’t know, but I want to make sure we save some so we have money when we need it later.

 

GRANT: Agreed.

 

DAD: Sounds like a plan. Let’s make a budget that allows you to spend some of your money on things you enjoy, while also putting a little away. So G-man, what do you need to do to afford that new game?

 

MAK: I’m way ahead of you, Dad! Grant, if you put aside a little savings each week, you’ll have the full amount in no time!

 

DAD: That’s the spirit! Now, let’s write out these personal budgets. Alright kids, are you ready to create your budgets?

 

MAK: Yeah! We need to get saving! Hey Grant, I bet I can save more than you!

 

GRANT: No way! I’m gonna save WAY MORE! Just wait!

 

DAD: It’s great you are both so excited, but if you really want to save money you have to get into a money-saving mindset.

 

GRANT: I don’t know what that means, but I’m good with it. Let’s get started! What do we do first, sit here and think about it?

 

DAD: You do have to think about it. First, we start by establishing your savings goal. We need to know how much we’re saving, what we’re saving it for, and what date we need the full amount by.

 

GRANT: Oh, that’s all really simple: Super Mario Maker 2 (duh), it will cost $60 in total, and it comes out in about 6 weeks!

 

DAD: You’re on it G-man. How about you Mak?

 

MAK: Well, there are a ton of new movies I really want to see. [some kind of movie trailer sound] I  could go to the theater every week because there are so many!

 

GRANT: Oh! I want to go too!

 

DAD: Ok, well, first thing you’ll need to consider is the cost per movie to see if you can really go every week, and don’t forget to factor in the cost of your snacks.

 

MAK: Oh yeah, those get expensive!

 

GRANT: But the popcorn is sooo good!

 

MAK: I have an idea. Since it’s summer, we can go to the movies at noon during the week. The cost per ticket is only $5. If we each set aside $10 we could easily afford the movie and snacks if we share a drink and popcorn. We share everything, so that should be easy.

 

GRANT: Deal! But will I still have enough to save for my videogame?

 

DAD: If you want to have the full amount by release date how much do you need to save each week? Don’t forget the savings you shouldn’t touch. That’s a minimum of 10%.

 

GRANT: Let’s see. It costs $60 on release and I have 6 weeks to save, so that means I need to save $10 each week, right?

 

DAD: Correctomundo G-man! So to pay for the movie and videogame, you’ll need to budget $20 each week. And, since you’re earning $25, you need to be saving $2.50 since that’s 10%. That doesn’t seem to work, especially since you have to pay for your phone!

 

GRANT: Ah man, but I also really want to change my avatar in Fortnight. I’ve been a girl for weeks in the game, and I would love to be a boy again? A new skin costs about $12!

 

MAK: You can’t afford them all, so which one do you really want?

 

GRANT: I guess I could always push off the movies a couple weeks, wait another week to buy Super Mario Maker and stay a girl for a couple more weeks. That would give me some breathing room. This is so complicated!!

 

DAD: You’re right. Getting it down on paper helps keep it straight. Great compromise! We have to decide which purchases are most important. Sometimes we cut back, delay or cut our spending completely to stay out of trouble.

 

GRANT: Ok, no TROUBLE. That sounds like it’s going to be so hard though! How do I keep myself from spending the money now, since I need to save for later?

 

DAD: You could use a shocker on yourself. Just kidding. If you set aside your savings first, you aren’t tempted to spend it. And if you have a goal, it will keep you on track, that way you stay motivated.

 

GRANT: I have an idea! I should tape a picture of Super Mario Maker 2 to my piggy bank, that way I see it each day!

 

DAD: [winner bell] Great idea G-man, having a visual reminder of your savings goal can help you stay motivated, and lessen the temptation to spend your money elsewhere. Money motivated, BABY!!

 

MAK: What about our discretionary income? How do we manage that?

 

DAD: I’m impressed Mak. Grant got caught because he forgot about his phone bill. Just like with your savings, you have to set aside your mandatory spending. It helps you focus so you avoid dipping into your savings or spending money you need for your mandatory bills like your telephone.

 

MAK: Okay. BUT I’m worried I’ll be too tempted, and spend it at FiveBelow. You know, my favorite store. How can I keep my money safe?

 

DAD: You bet, we could open a bank account for each of you. This gives you a secure place to put your savings, and it will separate it from your spending money.

 

MAK: That sounds great!

 

GRANT: I want one too! I’m gonna be saving a lot, so I need to keep that sweet dough safe, until it’s ready to be baked!!

 

DAD: Let’s head on over to the bank and get you two set-up then. By the way, Makenna, is there anything specific you’re wanting to save for?

 

MAK: Mmh, nothing comes to mind right now, but I want to set some money aside so I have it when I do want something.

 

DAD: That’s awesome Mak. Even if you don’t have a specific purchase in mind, setting aside savings is always good practice.

 

Ben’s 2 cents:

Grant found out right away that he wants to spend more than he has coming in. And, I could tell he was forgetting to put his savings plan in place. If we “pay ourselves first”, it’s like a mandatory expense. Say it with me “10% or more”!! The kids were honest that they may have an issue with controlling their spending, if they saw the money each day. Self-control is key to making the budget work. We all make mistakes. Forgive yourself and get back on track. At first, put hurdles in place to stop the temptation. Don’t have a debit card, or cut down on your credit cards. We have to do this until we get into good habits, and feel the power of our decisions! 

 

We broke down the big savings goal for Grant’s game into 6 weeks, $10 per week, but he couldn’t make it all work. Just like us, he delayed things a bit longer, to make it work. Altogether, the plan highlighted the issues, we identified self-control as a potential issue, and we got refocused on savings.


Hey, a personal budget does change, as our income changes, and so does our spending and priorities. But, our savings should be locked at 10% AT A MINIMUM!! We can always re-evaluate the budget as things change, but keep those goals on track with a little discipline. You don’t have to use a shocker, however it may help!!!

Stay tuned for next week as Grant and Makenna go to the bank to open up their bank account…

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