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THE LOWDOWN

Welcome back to "Sex and Money with Jess." In today's episode, we continued our journey into financial empowerment by diving into the second part of my framework—getting intimate with your finances. Last week, we tackled organizing your finances, and this week, we're taking a closer look at where your money is actually going.

Understanding the flow of your money is crucial. It's about getting down to the nitty-gritty, categorizing your expenses, and really seeing the patterns in your spending. Whether it's rent, food, or those sneaky coffee runs, knowing where your money goes each month is the first step to financial intimacy.

I shared my personal experience with budgeting for recurring expenses like rent and annual costs like car registration and life insurance. It's important to be aware of the timing of these expenses to ensure you have the funds when needed and to avoid surprises.

We also discussed the importance of being proactive with your finances. By being intimate with your financial details, you can catch errors in your paycheck, prevent fraud, and make informed decisions about subscriptions and services you no longer need.

I encouraged you to take the time to review your transactions, question unfamiliar charges, and reconcile your accounts regularly. This practice not only prevents headaches down the line but also empowers you to make decisions that align with your financial goals.

Next week, we'll explore how to use this newfound financial intimacy to plan for the future. Remember, understanding where you are now is the key to getting where you want to be. So, take it slow, have fun with it, and embrace the journey to financial empowerment.

Thank you for tuning in, and I look forward to continuing this conversation next week. Don't forget to share this podcast with someone who could benefit from it, and if you're ready to dive deeper, visit lovealwaysjess.com/get-started for more resources. Have a fantastic week!

MENTIONED IN SHOW:

Website: www.lovealwaysjess.com/getstarted

Instagram: https://www.instagram.com/love.always.jess

SHOW NOTES:

Episode begins at [00:00:54]

TRANSCRIPT:

[00:00:00] Hey, welcome to today's episode. We are going to be discussing part two [00:01:00] of my framework. Last week we talked about organizing your finances and although organizing your finances can be scary because you're actually having to look at the numbers. Today's part probably for some people would be the scariest because this is actually identifying.

Where our money is going. But this is also the most important aspect of money in my opinion, because this is where you get intimate. This is where you start to dive into the details and truly understand the ins and the outs of your money flowing in, flowing out, and all of the in between. So I'm excited to dive in.

I'm excited to talk about What [00:02:00] getting intimate with your finances looks like. And I'm excited to just be here on this lovely day with all of you. So let's dive in.

As I mentioned at the start of this last week's focus was on organizing your finances. This is where you put the transactions into some type of spreadsheet, app, software, Whatever tool you decided to use, and you input them by vendor, dollar amount, date of transaction. But the most important piece of that was the category.

Because the category is what we're going to use to get intimate with our money. When I say that, what I mean is, this is the tool that you're going to use to figure out where your money goes. Where you spend most of your money. Are you [00:03:00] spending it on rent? On a mortgage? Spending it on food? Spending it on coffee?

Going out with friends? Where is your money going to?

So, now that we've got our money organized, what I want you to do is I want you to pull up that spreadsheet or open that application. And I want you to look at the summarized detail of your monthly spend. By each category, most applications, you can select like a date range or spreadsheets, depending upon how it's set up.

You should be able to select a date range as well. And then you should be able to filter on the different categories. I'm going to see what your total spend is.

If I were to pull up my transactions at the moment, one of the things that I would see is that every single month I'm [00:04:00] spending 3, 100 towards rent.

That's something to take note of because rent is obviously One of the main staples of anybody's spend, whether it's rent or a mortgage, because we need a roof over our heads. So unless you're living with somebody and getting free room and board, that's going to be a big chunk of your spend. That's going to be a number that you need to make sure you maintain enough income every single month in order to cover that.

Other transactions might be groceries versus eating out, or if you have a child, these are the expenses that go towards your child. Looking at and truly getting a feel for where your money is going. Is going to be very important so that you can put together some sort of budget and make sense of [00:05:00] the different areas that you're spending for your future.

One of the other things to kind of keep in mind when you're looking at all the different transactions and categories. is the timing of when these transactions happen. As I mentioned, I pay 3, 100 in rent every single month, so I know that that is a monthly expense. But something that I just paid for that only happens annually is my car registration.

Also, life insurance. I've got a life insurance policy that's annual, and then I've got one that's monthly. I have to make sure every single year when February March rolls around that I make sure I have enough money in my bank account in order to cover those annual expenses. Or my auto insurance, I pay once every six [00:06:00] months.

So I have to make sure every six months I've got enough money in my bank account to pay that. Could I pay it monthly? Sure. And in the past, I have done that when I haven't had enough money to pay it off front, but it's important to look at the timing of these different transactions to ensure that you are maintaining an accurate balance in your checking account to pay things out on a timely manner,

understanding where your spend is. The timing of when those things need to happen will help

prevent, I think is the right word, surprises that may come up. Obviously, surprises are going to happen. I just had to fork over a few grand to make maintenance stuff happen in my car. I had to get new tires. New belts, [00:07:00] spark plugs, brakes, shocks, all that, you know, it, it came up out of nowhere. But also it wasn't out of nowhere because my car is at 100, 000 miles.

But still, it wasn't a recurring payment that I was used to happening. But because I knew when certain transactions were happening, Within my finances, I was able to schedule my maintenance work around those timeframes. So, I made sure that at the time that my annual payments were due, that I wasn't scheduling a maintenance.

So that I wasn't paying out all of my annual payments on top of, you know, the maintenance costs, because that would have been a lot of money leaving my bank account all at once. I wanted to make sure that I had buffer zones. It allowed me to sit down and take a moment to [00:08:00] decide, do I do all the work at once or do I break it up over a few months?

In my opinion, there is nothing more nerve wracking than having an unexpected expense come up that I could have prepared for. Obviously, car maintenance happens when it needs to happen. Um, I can't really prepare for that because I don't know what's needed, when it's needed. But

I had the wiggle room and I had the understanding of the different time frames of when my recurring expenses happen to be able to break things up and create less of an impact on my car. In my personal finances, I was notified of this maintenance happening back in October and I was able to say to the service department, Hey, let's put a pause on that.

I'm not going to do it all today. I will look into things and get back to you. I was able to look into [00:09:00] different businesses, get quotes, figure out which price ranges worked for me, worked for my budget, because I knew all of the expenses that I had coming up. I also had an understanding of how my paycheck works and all the different ins and outs of pay raises.

bonuses, all the different timing, timings of my income that allowed me to also maneuver things around because I knew in March I was getting a cost of living adjustment. So I scheduled my more expensive maintenance for March so that I could pay for it then.

This is just an example of why I say it's important to be intimate with your finances. Obviously, there are multiple other reasons. One, because it's good to know what's [00:10:00] happening with your money. You don't want to be blindsided by things. I had, I've had co workers in the past come to me and say, hey, my paycheck doesn't look right.

Or this isn't what I was expecting to happen in this payment. And without looking at your finances, You may not catch incorrect payouts happening from your company. Does it happen all the time? No, but if you're expecting 1, 200 a month and then all of a sudden one day it dips down to a thousand and you're like, hey, I didn't take any vacation.

I wasn't sick without pay, whatever the case may be for the last month. Why did my pay take a dip? That raises the red flag. But if you're not intimate with your finances, if you're not looking at the transactions, if you're not looking at your bank statements or even your pay [00:11:00] slips.

At the bare minimum, look at what's coming through your bank account on a weekly, monthly basis. Just check to make sure the income you're expecting from your company matches what you are expecting. And if you want to take it a step further, which I highly encourage you do, take a look at your payslip.

But if, even if you're not doing that, at least looking at the transactions tells you that things are happening smoothly. And if things aren't,

go to corporate and say, Hey, my pay looks wrong. Can we talk about it? Can you tell me what happened here? It opens that door to be able to catch sooner rather than later when things are incorrect. Because you don't want it to be later. You don't want it to be after you've submitted your taxes for the prior year.

And then you say, Oh my goodness, I totally it's wrong. My payslips are wrong. One of the [00:12:00] biggest things that I've seen from a payroll perspective since the pandemic is people moving states, moving counties, moving different jurisdictions, not inform their employers. So their employer is still continuing to pay them their pay rate for that different state, pay their taxes for that state.

And then when that employee goes to file their tax return for the previous year, the state's like, um, hey, you owe us money that you never filed. And it opens up this whole can of worm, and then the company has to go back and correct everything. There's penalties and interest added on top of it. It's not fun to go back and correct something.

Versus, hey, this is what I was expecting. Right at the moment that you catch [00:13:00] it. And getting it fixed to save yourself a headache for down the road.

Becoming intimate with your finances allows for all these little nuances to be caught sooner rather than later. Another great example of why becoming intimate with your finances is important is because in today's day and age, we tend to rely heavily on credit card, debit card banking institutions to catch fraud.

But they don't always do it. They don't always catch something that we would flag as fraud. My dad told me the other day that he caught something on his credit card statement that the company didn't catch. And so he called the credit card company and said, Hey, something's up here. I would never have done this.

And they were able to correct it. Had he not been intimate with his finances and actually looked at his [00:14:00] statements and looked at the various transactions and also knew the transactions that he was consistently making, he may not have caught that. After my mom passed away, We were going through some of her banking information and we were like, what is this, this charge that happened to recur monthly because we needed to cancel subscriptions and for the life of us, we couldn't figure it out.

And through me Googling it, I realized it was a fraud charge. My mom looked at her statements. My mom reconciled her accounts, but she didn't catch that as fraud because it's labeled Apple. And so she assumed it was just a recurring payment for iCloud or one of the applications that she was using. Who knows?

Because it was labeled Apple. Had she understood what she, what each of her subscriptions were for, she made Said, Hey, this is actually [00:15:00] fraud and caught it and been able to stop the charge,

looking at the details of everything and cross referencing each of your charges, for instance, subscriptions against what you physically use. And if you're like, I don't know what that is. Then pause, and look into it, investigate it, ask, not just yourself, ask Google, ask friends, call the bank up and say, Hey, I don't know what this charge is for, is there any way you can get me more information?

And they'll look into it for you.

And if you do know what it is, And you're like, I don't really use that service anymore, then disconnect it, because it's not worth paying for if you're not really using it.

I think about all the different subscriptions my mom had, and how, I don't want to say it was a headache, but it did take three or [00:16:00] four. Meetings between my dad, my sister, my brother, and I, to determine what everything was, to determine whether it was an annual subscription or a monthly subscription, to determine how to log in and cancel it, going through all of that.

Was time.

It was necessary at the time because my mom passed away and we had to clean up everything from her but if it were my own stuff and I were Reconciling things at the end of the year and I was like, what is this? It would have taken way too much time and brainpower and my mind would have been like what the frick am I doing?

I don't understand and it would have stressed me out and it would have, I felt like I would have wasted my time if I was to do everything once at the end of the year, versus if I sit down on a monthly basis. When my bank statements come out, and go through, reconcile everything, [00:17:00] and question things, and say yes, that looks right.

No, that doesn't look right. I don't know what that is. Let me Google it. Hey, you know what? I see I'm still paying this. I don't think I need it anymore. Let me cancel it. Taking that time On a monthly basis, to dive into your finances saves you in the long run. It really, really does.

So now that we've got everything organized, I highly encourage you to find some time to sit down and look through the different transactions. Understand where your money is going. Question things.

Ask yourself, do I really know what this transaction is?

Ask yourself, does my income really match what I'm expecting it to be?

Beginning to open our mind to the ins and outs, to the [00:18:00] different types of spend or types of income, allow us to begin to create a story in our head of where our current financial situation is. It could be good, it could be bad, it could be everything you want it to be.

Maybe you'll surprise yourself and you'll be like, wow, I'm actually doing better than I thought. Or maybe you'll go, oh, I could probably do better in that one area. And that's where it's important to have this financial intimacy. Because it gets the wheels on our brains spinning. It gets us asking ourselves, is this where I want to be?

Is this something I want to continue? Or do I want to end it? Do I want to change things? I have a little bit of extra discretionary money. So let's plan a vacation or if you're like me, let's play around with investments, see what [00:19:00] happens. Because having an understanding of where your money is going and coming from allows you that mindset shift of, I'm afraid I don't want to walk to.

Oh, this is what's happening. Okay. I'm I'm, I'm not okay with this, but we can change it or I'm actually okay with this. And let's. Continue down this path.

It creates clarity. It creates understanding. And it creates empowerment

to truly know what is happening with our money. Because once you know, the sky's the limit. You can go anywhere from there. You can't move until you know where you're at.

It kind of reminds me of an episode that I just recently started watching. [00:20:00] I started watching The Rookie, never seen it before, and one of the TOS has the rookie with them, and he slams on the brakes of the car. And he goes, where are we? And she panics and she doesn't know because she's been distracted and he's like.

The most important thing for you to know is where you're at if you have to make a call. If I were to get injured and you had to call the paramedics and get them here so that I didn't bleed out, you need to know where we're at in order to make anything else happen. Call for backup, whatever the case is, you need to know where we're at and the same can be said for your money.

You need to know where you're at before you can make any other decisions because You might be out with a friend, and they might say, Hey, let's go on this vacation. Let's plan this trip. [00:21:00] My budget is 2, 000. Can you make it happen? And you might say, Yes, I'll make it happen. And then the trip comes, and you're like, Fuck, I don't have 2, 000, and there's no way that I'll be able to get that in the next two weeks.

But if you were intimate with your finances, you could have said to the friend, You know what? My budget's 800. Can we do something more local? Or you might be able to say to the friend, Give me a few days. Let me look at my numbers and make a decision from there. It allows you to make right decisions, Thanks.

in the moment. Whether that is a yes or no answer or a let me look at things and get back to you.

Knowing where you're at is crucial. It's also fun. It's also exciting. Because as I said earlier, once you know the [00:22:00] sky's the limit, you can go anywhere. So take the time. Now that you've got everything organized, take the time to understand what is happening. The different movements.

And again, this might be the scary part because looking at this might tell you something that you don't want to see. It might require a little bit of digging, a little bit of homework, a little bit of correcting. But at least when you're looking at it now, you can fix it now and save yourself from an even bigger impact down the road.

This is the time to get intimate with your money.

I know you can do it,

even if you don't want to. Trust me, there are months that I don't want to, but you'll be better off with it. So have fun, take it slow, do a little bit at a time, look at one account versus the other, look at them all combined. Get playful with it. Set aside time. Do what makes sense to you. I hope that helped.[00:23:00] 

Next week we will talk about how to use this knowledge for the future, for where you're going. Have a great rest of your week and I will talk to you next week. [00:24:00]