099 | The Foundation of Your Money Plan

The ability to direct and manage your cash flow gives you the ability to achieve any money goal you have.

That ability comes from having a budget that works for you and that you will actually stick to. Your budget is the foundation for your entire money plan.

In this episode, I’m sharing the training I did on this subject last month in my pop-up Facebook group, the April Money Reset. Even if you’ve heard me speak on the topic before, listen again from a fresh perspective and apply the teachings to create a strong foundation for your own money plan.

Topics Discussed

• why your budget is the foundation of your money plan
• why and how to analyze your previous spending
• the way many lawyers manage their money that doesn’t work
• the benefits of zero-based budgeting
• how to create a zero-based budget
• budgeting for helping others

Listen to the Episode 

Resources mentioned

Budget template

Episode 17: How to Budget Using the Zero-Based Budgeting Method for Lawyers

Work with me

If you’re ready to learn the mindset and strategies to master your money, let’s schedule a call. 

Connect with me

Social media: Instagram and LinkedIn

Email: hello@rhothomas.com

Recent Episodes 

Lightly Edited Transcript

You’re listening to Wealthyesque. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey, friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. So today, we are revisiting one of my favorite topics, budgeting, I’m sharing the training I did on budgeting last month in my pop up Facebook group, the April money reset. This was one of the most important things I taught the group and one of the biggest things that I wanted them to take away from it. I cannot overstate the impact of having a good budget. Your budget truly is the foundation of your entire money plan. When you have a budget that works for you, you can achieve any money goal you have. And I know some people don’t like the word budget, if that’s you just replace budget with spending plan. But don’t let semantics keep you from hearing what I’m teaching you today. I’ve talked about creating a budget many times on the show. And I believe that hearing it multiple times, maybe in slightly different ways will help it click for you. So listen to this training. And don’t just listen, do the work to apply it to your own finances, do the exercises that I gave to the group. I’m also going to put the resources that I referenced in the training in the show notes, which you can always find by going to rho thomas.com/the Episode number. So show notes for today’s episode are at rho thomas.com/ 99. All right, let’s get into it.

Hey, there, Happy Wednesday, I hope you are doing well and having an amazing day so far. So I mentioned in my post yesterday that this week, we are talking all about budgeting when I was putting this group together, and I was thinking about what I wanted to teach you. The two main things I wanted to be sure I taught you if nothing else, were one how important your mindset is in achieving your financial goals, and to how to create a budget that actually works for you. So we talked last week, all about mindset, the way that you are thinking about yourself, like you know whether you believe that you can actually achieve your goals, whether you believe that you know how to manage your money, all of that, the way you think about money. If you think it’s complicated, if you think it’s simple. If you think that, you know, managing it is tedious, whatever it is, and then how you think about specific money skills, like paying off debt, like budgeting, like saving. So all of that is going to impact how you show up to manage your money, which then of course impacts how you actually are able to achieve or whether you’re actually able to achieve your goals. The second thing that I wanted to teach you was how to create a budget because I truly believe that budgeting is the foundation for your entire money plan. If you have a good realistic budget that you can stick to, that creates space between your income and your expenses, where you’re not spending out every single thing that you’re bringing in, then it does not matter what your financial goals are, you’re gonna be able to achieve them. And so I want to teach you about budgeting, I asked you yesterday to look back at your finances for the last one to three months so that you can get a good handle on what you’re currently spending. And I also encourage you to analyze that. So looking at what you think about where you’re spending how much you’re spending, if there are areas that surprise you if there are areas that you would like to be spending on, but you’re not spending on all of that because that data is then going to inform how you create your budget. So I talked to a lot of lawyers who are overspending, they’re buying a lot of cool things. They are spending on a lot of fun experiences, making great memories, all of that, but they don’t have anything to show for the money they’re making and all the hours are putting in at work besides their cool stuff and their fond memories. And I believe that true wealth is having control of your time but you don’t get to the The point that you have control of your time, if you’re dependent on every single dollar you bring in, and then some, right, I say all the time that wealth is built in the gap between your income and expenses. So when you have that space between the income you’re bringing in and what you’re spending out, you’re able to direct that money, the money that you’re not spending toward your savings, your investments, paying down debt, things that will increase your net worth. But there are so many people in our country who are living paycheck to paycheck, including a pretty large number of people, 25% of households that are bringing in $150,000 or more. And so that’s where budgeting comes in. Because it allows you to be intentional with how you’re using your money to make sure that you’re not spending it all out, right. We have this tendency as we go along, we get further in our careers, we’re making more money, all of that we started to think like, oh, yeah, well, I need this thing, or I need that thing. Like things that were once wants or luxuries become necessities now, right, we’ve got to spend on this thing. And so our household expenses, keep rising year after year, and often keep up with the income increases that we might be getting. So creating a budget is the key and all of that, and I teach the zero based budget, which means that every dollar you bring in each month is going to be allocated to some expense, some category. So it’s not necessarily expenses as in, it’s being spent, like on bills, it might be, you know, you’ve got a savings goal, or you’ve got a goal to pay extra on debt or to invest or whatever it is. That’s what I mean by the budget being the foundation for your entire money plan. Because it doesn’t matter what the goal is, that money that you have that’s left over, right that space between your income and your expenses, you can direct it to whatever it is that you want. So with a zero based budget, every dollar you bring in is being allocated to some category, some expense, some goal. And that way, you are not having money that kind of fall through the cracks are leaking, right, you have allocated every single dollar. And this doesn’t necessarily mean that your checking account is getting down to zero, like I teach my clients to have a buffer in their checking account so that they’re not getting down into the three figure range or overdrafting, or things like that, you’ve got that buffer in the account, you don’t have to worry about anything like that. But I want you to use the budget template, the same one that you did your look back on to get that average of what you’re spending to create a realistic budget for yourself, you’re going to look at where you’re currently spending in those categories and decide how much you want to spend, whether you want to spend on these categories at all, etc, and create a budget. The key though, as I mentioned is every dollar that you bring in should be allocated to something. So if you brought in $5,000 in the month, right, then $5,000 needs to be allocated to different goals. And when you do it that way, you are able to be very intentional with where your money is going. And you’re going to see the progress that you want to be making with your finances. One thing that I want to make sure that I tell you, if you are one of many lawyers who are maybe the first in your family to be a lawyer, or you are one of the people in your family who are making the most money, and you might be helping other people in your family out financially, I encourage you to include that in your budget, and make sure that you are setting how much you want to contribute to those things.

I tell my clients in this situation that you can’t truly take care of someone else, if you yourself are struggling, right, like you can’t take care of other people if you haven’t taken care of yourself first. And that doesn’t necessarily mean that you’ve got to pay off all your student loans first, and you have all this money in the bank and whatever else. But it does mean that you need to know what’s going on with your finances, which starts with that look back that I talked about, or yesterday and having that plan for intentionally directing your money going forward. So I want you to have in your budget, whether it’s a set amount each month or a total for the year, the amount that you are going to use toward helping family helping friends, you know, whoever it is that you might help financially, so that you make sure that yes, you’re able to still do that if you want to, but you’re not putting yourself in a bind or unable to achieve your own financial goals or keeping yourself stuck because you’re spending all of the money on other people. So that is just one thing that I wanted to make sure that I mentioned. I gave you the budget template that I personally use and that I give all of my clients. I will try to link it with this video if I can. And then I’m also going to include the podcast episode where I walk through exactly how to create a zero based budget using that budget template. And then tomorrow, I’m going to do a like walkthrough screenshare, of actually creating a budget so that you get so many different ways, so many different resources for you to create your own budget, I want you to take those resources, create your budget, drop any questions or comments that you have here in the Facebook group, or bring them to our call on Monday. All right, so I hope that all of this is helpful for you. Again, feel free to ask any questions that you may have. And I’ll talk to you later.

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I hope you enjoyed that training. As I said, your budget is the foundation of your money plan. Once you have your budget together, it’s just a matter of following through on it and intentionally directing your money to achieve your goals. It’s very simple, but not always easy. So if you’ve been unable to follow through on your budget and make the progress you want to make on your goals, I want you to reach out to me, I’ll help you create a budget that works for you that you can actually stick to and I’ll help you stay on track all the way to your goals. So all you have to do to get started is head to rho thomas.com/call and schedule your consultation. All right. So that’s it for this week’s episode. Come connect with me over on social media you can find me at I am rho Thomas on Instagram and rho Thomas on LinkedIn. Subscribe to the show and leave a review both of which help more people to find the show. And of course, sharing with a friend helps as well. So please think of a friend or two who you think would find this information useful and share this episode with them. As we close out friend, I pray that you truly recognize the key role your budget plays in your entire money plan. I pray that you take the time to apply this work and create a budget or spending plan that actually works for you to move you toward your goals. And as always, I pray that you continue to take steps to regain control of your time, build wealth, and live the life of freedom and choice you deserve. Talk to you later.