A budget is your plan on how you’re going to manage the money inflows and outflows of your household. Who budgets? Basically nobody. A lot of how we use money today is practically frictionless, and budgeting requires examining how you’re spending differently than you naturally do on a day-to-day basis. Everyone should budget by using a process that works for how they think. John encourages his financial advising clients to examine their past spending to make sure their gut feelings about line items, like Amazon or Uber Eats spending, are correct. John then verbally walks through the One Number Budget. He starts with their gross income. He backs out 20% for wealth building first, then taxes. Next, John backs out their rent or mortgage. He suggests at most 15% for the mortgage to be able to live comfortably. Lastly, he backs out any student loan payments. That, my friend, is the One Number. Can you live off that amount of money for 4 weeks? And finally, Lauren asks John to relate this process to the retirement plan. Remember, you have 60 years of living you need to pay for on 30 years of working!
If you liked this episode, you’ll also like episode 131: Budgeting for Dummies.
About John:
John Crane is a financial advisor and retirement income planner with 20+ years of experience. He has authored The One-Number Budget, in which he offers a breakthrough approach to simplify budgeting, grow wealth, and achieve financial balance by focusing on just one number. Budgeting methods in the past 30 years have led to a low median net worth of $215,000 for people in the 55-64 retirement age bracket. This is where John comes in. A family man himself, he knows and teaches families the importance of lifetime budgeting, insurance, investments, and income protection, to help them make their money lives better and futures more secure.
He is also the Founder-CEO of Crane Financial LLC and is a member of the National Association of Insurance and Financial Advisors (NAIFA), America’s top association for financial service professionals. He has also received top honors from The Million Dollar Round Table.
Connect with John:
https://www.linkedin.com/in/johncrane/
https://www.amazon.com/One-Number-Budget-Traditional-Budgets-About-ebook/dp/B0B89JC7PR
https://www.cranefinancial.com/
onenumberbudget.com
Connect with Lauren:
https://www.realadultingiseasy.com/
https://twitter.com/AdultingIsEasy
https://www.instagram.com/adultingiseasyreal/