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in Budgeting Tips | Money Talk · April 16, 2021

4 Budgeting Tips I Wish I Had Known Earlier

A lot people dislike budgeting. I totally get it, I did too! The word budget itself comes with a stigma. Budgeting is often seen as restrictive and boooring!

I am not going to say budgeting is a lot of fun, but it can be. So how did I go from hating budgeting to loving it?

It took a lot of trial and error and several years for me to take budgeting seriously. Like most people, I felt that being restricted by a budget was not a way of living.

They don’t teach you about personal finance in school and we didn’t really talk about managing finances in my family.

Our family didn’t have much, but I’d like to think we weren’t poor. My dad was pretty good with money, but he was always hustling trying to get ahead. He was (still is) a great entrepreneur and has always found a way to provide for our family.

His hope for me was that I never had to live paycheck to paycheck. Being in the USA gave me opportunities he never had and I could create a legacy for myself.

Unfortunately, I started off the wrong way. Once, I began making money of my own, it felt empowering and I wanted to make my dreams come true and buy everything I always wanted. Then I discovered credit cards and that was the beginning of my financial mess.

At age 19 I was drowned in debt and was barely half way my college degree.

After graduating, I had $60k in debt. I got a decent job paying $51k a year and I promised myself I would get my life together, so I began budgeting!

So, it began…

That was my first budgeting attempt ever. I was 24 at the time. I set up the Mint App and began tracking my spending. It was not perfect, but it worked. I began paying a lot more towards my debt and slowly got rid of some of the credit debt.

While it was good progress, I still didn’t have my spending under control. I’d still go on shopping sprees and stupidly spend money and later dealt with buyer’s remorse. I got disappointed because I would be over budget each time. Eventually, I would become less consistent with my tracking and finally, stopped tracking all together.

I did this a couple of times for about 4 years.

Here are four things I would do differently if I could go back in time:

1. Take it slow

You may have heard the saying “slow and steady wins the race”

This applies to managing your finances too. I jumped from not budgeting, careless spending to extreme budgeting overnight. Sudden change is not sustainable in the long run.

What does it mean to take it slow in terms of budgeting?

Start tracking without any obligation to meet a spending limit. Get to know your spending habits first. Where is your money going?

Once you have an understanding of what you are doing with your money, then you can compromise.

Would you commit to a relationship with someone you didn’t know at all? No, right?

Then you shouldn’t commit to a budget without understanding your money habits.

2. Make it easy

If you are starting out, don’t over complicate it. Use an app that links to your bank and then track spending into the different categories.

I think Mint App is by far the most user friendly app for personal finance. It learns your spending trends, making it easier to set realistic expectations.

Just remember, don’t commit from the get go.

3. Set long term goals

Short term goals are important, but long term goals are even more important for budgeting. Why is that?

Well because if you only have short term goals then you’ll quickly lose interest. Once you pay off that credit card debt, what then?

Back when I started budgeting, it was to fix my financial issues. It was a tool to fix a specific problem. Once that problem was solved, I went back to the same habits that got me to budgeting in the first place.

However, once I aligned budgeting with my long term goal to have a healthy and sustainable relationship with my money, it changed everything. Budgeting doesn’t restrict me, it allows me to live the life I want without guilt or concern that I will be short of money.

My goal is not to spend less, my goal is to build wealth. Through budgeting I make sure that I am setting enough money to build this wealth.

So think about it, what do you really want? How can you use the extra money you can save by spending less to build sustainable wealth?

4. Make sure to make room things that matter to you

You must make room in your budget for things that matter to you. If buying a piece of clothing is important, then have a clothing expense budget item.

For me, a yearly vacation and Friday date night are important, so I make room for them in my budget. This may require increasing my income or reducing one of the other expenses in order to make it fit.

At times when situation does not allow, we find creative ways to take a vacation. This may mean staying local, a weekend getaway, taking advantage of seasonal promotions, etc. Regardless, we always get our vacation.

Budgeting does not mean you have to stop doing the things you love, it just means you take control of your spending rather than your spending controlling you.

It is worth noting that not everyone needs a budget. Some people are naturally gifted and have total control of their finances. However, even then, I know of several financially gifted people that still budget.

If you have been hesitating, give budgeting a try. Remember, you don’t have to commit 😉.

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New Blog Post 🚨 In this week’s blog post I am New Blog Post 🚨 In this week’s blog post I am going over why we bought a short-term rental, our experience so far. Plus what we did prior, during and after purchasing our first short-term rental in March 2022, a Cabin in Blue Ridge, GA.

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I can’t stress this enough. Some investors are l I can’t stress this enough. Some investors are looking to make money from day one, but that’s not always the case. It wasn’t for us and I’ve talked to a lot of rookie investors who have told me “Thank God I have my personal finance situation together.” 

This is just my opinion. Do you agree? Let me know in the comments!

Want to join a free community of like-minded individuals? Join our REI Coffee Chat Community where we talk real estate investing, personal finance and financial freedom, and much more! Link in bio @beyondjustnumbers

Want to learn more about investing in real estate? Read my blog www.beyondjustnumbers.com

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I used to think that investing in real estate was I used to think that investing in real estate was for the rich. I became in love with real estate while working for a real estate investment company that owned hundreds of units. This was back in 2011 and I was 20 years old at the time. I had less than 5 years permanently living the US, so I had no idea about anything. I grew up in Colombia and the only talk of money we ever had was the lack of it. 

The investors I worked for were a wealthy family, so naturally, I thought… Real Estate requires wealth. I don’t have wealth. Therefore, I cannot invest. 

I figured… well shit, I need become wealthy so I can invest in real estate. Eventually, after educating myself I realized how wrong I had it. You can build wealth BY INVESTING in real estate.

Took me a couple of years to figure it all out. Hence, why I didn’t start investing until 2019. I wish I had figured out earlier, but it is what it is. In just 3 years of investing in real estate, I was able to accumulate more wealth than I ever thought possible. 

Just to give you an idea…Did you know you could invest in real estate with as little at 3.5% of the purchase price? For a $150,000, that’s only $5,750. Buy a duplex that needs a little bit of work, fix it up, rent one side and live in the other. This will reduce your monthly expenses significantly, save the money and do it all over again.*

Of course it’s not that simple, but it’s also not that difficult. There are some particular steps and considerations which is  why I recommend doing further reading on the subject. 

Book Recommendation:
✅“The House Hacking Strategy” by Craig Curelop and ✅“Investing in Real Estate with No (and Low) Money Down” by Brandon Turner. 

#realestate #realestateinvesting
🚨 New Blog Post! Continuing the “Getting Star 🚨 New Blog Post! Continuing the “Getting Started in Real Estate Series” 

You’ve found a property either on your own or through a realtor, you’ve run your numbers, you’ve got a lender and now you are ready to make an offer. What’s next?

In this post I want to discuss a few items:

✅Key components of a real estate contract
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✅The main contract contingencies and how they work
✅Communicating with your realtor

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#mindset #realestate #firemovement #realestateinvesting #realestateinvestor #rentalpropertyinvestor #rentalproperty #cashflow #motivation #financialfreedom #financialindependence #financialindependenceretireearly
We see a lot of advice around hiring a real estate We see a lot of advice around hiring a real estate friendly CPA. However, when you look up  CPAs that specialize in real estate, they can be pricey.  However, that doesn’t mean that other CPAs or tax professionals aren’t good. They might not be particularly aware of certain items, but they can research and collaborate with theirs peers. Perhaps it may require you to do a little of work to compensate. Things you can do:
✅ listen to The Real Estate CPA podcast or join the Facebook group
✅follow social media accounts of the pricey Real Estate CPA and take notes of what they are saying
✅attend free educational events 
✅read BiggerPocket book on Real Estate taxes 
✅if you know anyone working with a really good Real Estate CPA firm, ask them what they are doing

Then use that to go your CPA or tax professional and be like “Hey, is this something we can do for me?” They’ll probably say, “Let me look into it”. 

If they are good, they are going to research it and/or ask their CPA peer group. (CPAs and tax preparers also have Facebook groups where they collaborate with each other).

Here is a piece of advice, if they tell you “No, we can’t use this loophole or no, you don’t qualify to use this strategy” —> Ask WHY and “How can I qualify in the future?.” This way you confirm they did their homework and aren’t just being lazy. Don’t just take no for an answer. You can then get a second opinion by asking a question in a forum or to your peers.

So don’t panic if you don’t have a real estate CPA or tax professional. 

Next video I’ll be answering the question… “Can I skip the tax professional altogether and do my own taxes?”

#realestate
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