Family Budgeting with Kumiko Love, “The Budget Mom” | HTH 021

Transcript

Aaron:
00:00
Welcome
back to another episode of the How To Home podcast. My name is Aaron Massey and
joined as always by Tracy Pendergast, and our guest today is calling in from
Washington State, Kumiko Love, The Budget Mom. She’s going to be joining us
today to talk about setting a family budget and how to stick with it, and some
of the pitfalls that a lot of people fall into.
Aaron:
00:24
And
before we dive too much into this, I just want to take a quick second and say
thank you to our founding sponsor FilterBuy for making this series in this
episode possible. FilterBuy is an HVAC filter provider that can manufacture and
ship over 600 different size filters for your units. They come on whatever
schedule you want and you can save 5% when you subscribe, so thank you very
much to FilterBuy for making this series possible.
Aaron:
00:47
And
we also want to encourage you guys to get involved in the show. Make sure
you’re following us on social media. You can find us on Instagram
@howtohome_guide, and you can always visit our website and sign up on our email
list so you never miss out on any upcoming content.
Aaron:
01:01
So
thank you very much for joining us, Kumiko.
Kumiko:
01:04
Thank
you for having me.
Aaron:
01:05
Why
don’t you give us a little bit of a background on what it is that you do as The
Budget Mom?
Kumiko:
01:10
As
The Budget Mom, I really inspire people to live on a budget that they can
afford and understand, and it really has to do with learning those
psychological and emotions behind our spending decisions and money management
in our personal lives, and that’s really why I created The Budget Mom. It’s not
really… Yes, there’s a lot of information on how to budget, but I really
wanted to do like behind-the-scenes on what it really looks like in someone’s
real life, to live on a successful budget. And so, that’s what The Budget Mom
is all about.
Aaron:
01:43
I’ve
done a family budget and I’ve done some stuff, but, like, I can always do the
budget, it’s the sticking to the budget and actually following it that’s the
hard part.
Kumiko:
01:53
Yes.
Yes. That’s why, really, I like to show behind-the-scenes because sticking to a
budget… You know, creating a budget is actually very easy. You write numbers
down on a piece of paper. It’s really learning to understand your spending
triggers and how and why you make the money choices that you do that really…
Once you have that and understand that, then sticking to it becomes a lot
easier because now you understand the underlying cause of why you may not stick
to budget or why you’re spending the money you’re spending or why it’s not
working, and so that’s why that real life, for me, is really important.
Tracy:
02:30
So,
if we just start at the very beginning, what is, in a nutshell, your budgeting
philosophy? I know you do the envelope method. Can you tell everyone a little
bit about that?
Kumiko:
02:42
Yes.
I follow what’s called the budget by paycheck method, and for a long time I was
like… a lot of my readers, you know… I tried to squeeze myself into this
box of monthly budgeting, and my mind just does not work that way. I was paying
my bills when I got paid, but I was still trying to budget my money monthly,
and for me that was a really hard process and that’s essentially why I was
failing with my budget.
Kumiko:
03:09
So,
I started listening to what worked for me, and that was budgeting my money
every single time I’m paid. That means paying certain expenses with each
paycheck even down to my variable spending like gas and clothes, would be broken
down based on my paychecks. And my budgeting method, it kind of incorporates a
bunch of different methods in one. So it’s the calendar method, it’s the cash
envelope method, and it’s the paycheck method all rolled into a step-by-step
process that really becomes easy to follow once you understand those steps.
Tracy:
03:41
So
you just hit on exactly why your method appeals to me, and Aaron’s probably the
same way. So we’re freelance, my husband’s freelance, so all of our paychecks
are never the same.
Kumiko:
03:54
Right.
Tracy:
03:55
So
if you budget by paycheck, and are you working on a percentage system?
Kumiko:
04:01
Yes.
So here’s that thing that’s really weird and kind of out of the scope of what a
lot of people do is, I don’t use dollar amounts, like pre-determined dollar
amounts or percentages with my budget.
Tracy:
04:12
Okay.
Kumiko:
04:13
So,
I don’t say to my readers, you have to save 10% of your income, or you should
save $1,000 for your emergency fund. I think it’s really important for people
to know that it’s up to you and your comfort levels, and ultimately being at
peace with your money decisions and having that confidence in the decisions
you’re making, because without it we really won’t stick to it, right?
Kumiko:
04:39
If
we’re not feeling at peace and confident and we’re not seeing signs of success,
what we know as signs of success, personally, then it’s just not going to work.
And so when you’re like a freelance and your paychecks are different, I really
do tell my readers that’s a matter of… this is when knowing everything about
your dollars is so important. It’s about going to past months, looking at what
did I make the last three months? There is your estimate. There is your
baseline. And then a matter of using estimates and working around those
estimates when you’re doing your budget, especially if you’re like, you get
paid tips, you’re a hairdresser, you’re self-employed, you’re a freelancer,
knowing and going back and analyzing what you’ve made in the past makes a huge
difference.
Aaron:
05:27
So
what’s your background? Did you go to college for financial planning? Where did
all this come about? How did you figure this out?
Kumiko:
05:36
I
actually went to school and graduated with a finance and accounting degree, I’m
a double major and I minored in economics. It’s the kind of stuff that really
interested me, and then as soon as I graduated with my finance degree, I
started working at a financial firm, and it was there that I studied to be an
investment advisor, as well as accredited financial counselor. And so that’s my
background.
Kumiko:
06:00
Working
in the financial industry on a financial advisor level really gives me a whole
range of knowledge, because not only is it the investment and portfolio and
planning side, but it’s also the counseling side, and that’s what really piqued
my interest, that emotions behind our spending, that psychological triggers
that a lot of people don’t talk about when it comes to budgeting.
Tracy:
06:24
And
what do you think those common triggers are for most people?
Kumiko:
06:27
I
think it’s different for everybody. For me it had to do with going through
college and even throughout high school, I was dealing with a lot of
self-confidence issues, you know, not really being in love with who I was, and
I also had an issue where I would compare myself to others. I would want what
they wanted. I wanted to wear what they wanted, even though I couldn’t afford
it in my life at that moment, and not loving myself made me go out and spend
money on things that made me feel all better for a while until I wasn’t feeling
good and then I would go back out and spend.
Kumiko:
07:03
And
it seems like it’s a really easy answer to figure out, but for me it took many
years to understand those spending triggers, and so I really… When my readers
are spending money and they’re spending knowing in their gut they can’t afford
to make those spending decisions, I ask them to take 30 seconds before they buy
or purchase, to really ask themselves, “Why am I spending this money? Do I
need it?” And so, that for me, I had to ask myself that every day on every
spending decision for many years until I had to admit to myself, “I don’t
love myself.” And it’s waking up every morning and say, “You are
enough.” And I had a lot of support from family that kind of helped me
figure those things out, but I really think it comes down to asking yourself
those hard questions that a lot of people just aren’t asking.
Tracy:
07:59
Yeah.
I think social media probably plays a huge role in that, especially… I mean,
I follow a bunch of home accounts and designers and decorators, that’s what
inspires me, but sometimes it can make me feel a little bit like, “Wow, I
really don’t have it together. I need to start doing these things,” and I
think being mindful is so important and I love that you’re speaking about that,
because a lot of people might look at you and say, “Wow, she’s got it all
together, like, she’s confident.” And you do have it all together, but I
think we all feel these things and these voids that we want to fill, and that’s
really brave and amazing of you to touch on.
Kumiko:
08:42
Yes.
Social media definitely plays a huge role, especially now with the way that
social media is. So for me, for instance, I’m saving up to buy my first home
with cash and I do the same thing. I follow a bunch of home accounts with these
beautiful homes and large kitchens and everything that I want in a dream home,
and here I am sitting in a 800 square foot apartment that was built in 1975
with appliance that were made from the 1980s and I think to myself, “God,
I want that so bad for myself.”
Kumiko:
09:14
But
it’s a matter of learning to be okay with your surroundings and what you have,
and just being really humble and saying, “I’m blessed for what I have, and
I know why I’m here, and that’s because I have bigger goals and plans for
myself, and so I just have to keep my mind on that.”
Tracy:
09:33
That’s
amazing. Which monthly expenses do you think every homeowner can cut back on?
Where do you see money getting sucked in that’s unnecessary?
Kumiko:
09:44
Definitely
food spending. Your food budget, and I’ve heard this for so… it’s like one of
those budget killers that’s silent and it’s deadly but it’s there and it’s a
necessity, right? And I think one of the things… When I first started, and
this all has come down to tracking your spending, once you start tracking your
dollars, you’ll start noticing right away. My readers call it “a slap in
the face” moment. It’s like, “Oh, my gosh, I just spent $150 this
month going to the coffee shop.”
Tracy:
10:15
It’s
so bad.
Kumiko:
10:16
Yeah.
It’s like-
Aaron:
10:16
Guilty.
Kumiko:
10:17

I could spend that on, you know, $150, that’s a debt payment right there.
That’s extra savings for my vacation next year. But food, definitely, food
costs as well as variable spending like house purchases. So I have a household
category in my envelope. It’s meant for like toilet paper, cleaning supplies,
but then comes all the pretty decoration-type stuff, and I think… you know,
your mind, when you’re like shopping the clearance isles at Target, right, all
the things are like, “Oh, that’s a household purchase, is it?” So, I
think, household purchases as well like home decoration goods, but definitely
your food budget. That is the number one thing that I think everybody out there
can actually really decrease in a realistic way.
Kumiko:
11:04
And
then, as well as, it’s going to sound weird, your regular expenses. So, I’m
talking about your water and utility bill. A lot of people think, “Well,
it just is what it is. I can’t have it reduced.” But there are actually a
lot of programs out there where it can become more affordable for you, so I
think it’s a matter of going line by line of your regular household expenses
and start doing the investigative work, calling, making phone calls to see if
you can get your bills decreased because a lot of the time there’s options out
there people don’t know about.
Tracy:
11:39
And
with food, are you really encouraging meal planning? Is… and preparation?
Kumiko:
11:44
Oh,
yes. [inaudible 00:11:44] Yes, meal planning is definitely what changed my food
budget for me, and planning out meals and recipes based on what I have at home
already. So I teach my readers how to do an inventory check every single month,
in the beginning of the month, before they start creating their meal plans, and
it really does help decrease those grocery runs and the cost of doing grocery
runs, but not only that, it makes you more aware of what you can use at home
rather than waiting for it to expire and throwing it out because you found it
in the back of your freezer five months later.
Tracy:
12:19
That’s
me, too.
Kumiko:
12:20
Yeah.
Aaron:
12:22
I’m
hearing all these things, and I’m like, “You’re taking away all the things
I enjoy.” Like the spontaneity of my meal planning, my coffee run, like…
I don’t want to plan meals. Like, want somebody else to do it for me. That’s my
biggest thing, is eating out and coffee runs, always blow the budget with that.
And then working on the house, obviously. My house is like a fixer-upper. So I
start a project and there’s like, “Oh, well, I’m doing this, I might as
well spend that, and then I’ve got to do this and this and this and this,”
and then it kind of snowballs. We’ve talked about that before.
Tracy:
12:54
Yeah.
Can you be a well-budgeted person and still live a life with spontaneity?
Kumiko:
12:59
Oh,
absolutely yes. This is something I’m kind of talking to my readers right now.
We were just talking about guilt, and the guilt you get when you spend money,
especially on spontaneous purchases or purchasing for yourself. It can
definitely be done, but you need to have a plan for it. And rather than just,
“Oh, I’m going to go out to dinner tonight and I’m going to use my
clothing envelope or my clothing money because I didn’t have a plan for
it.”
Kumiko:
13:30
No,
if you want to have a spontaneous purchase or spend on yourself, create an
allowance for yourself. $100 a month. Or for me, I have a fun category and with
my six-year-old things come up out of the blue all the time. He’s like,
“Mom, I want to go to the park and get ice cream.” This is why I
started budgeting in the first place, my son, and being able to pick up
opportunities and experiences with him without constantly worrying about money.
Kumiko:
13:59
And
so, I have a fun category. It’s $100 every month. That allows me to not only be
spontaneous, but spend on things that used to make me feel guilty, but don’t
now because I have a plan for it. So I definitely think planning out every
dollar of your income helps a lot.
Tracy:
14:17
It’s
funny because I actually never felt guilty spending on my kids, it’s pretty
much all I spend on is my home, food and my kids. But I find my husband and I
haven’t spent any money on ourselves in probably four years, just like,
indulging… you know, something I just want for me.
Aaron:
14:37
Date
nights.
Tracy:
14:37
Yeah.
Just… I don’t know. So, I actually feel like some freedom would comfort
parents with knowing that they have liberty to spend a little money on
themselves, too.
Kumiko:
14:49
Exactly.
And here’s the thing. I, even at 33-years-old, I have lost a lot of people in
my life and out of that tragedy one of the things that I’ve learned is life is
short and people are starting their budgeting and financial journeys for a
reason. Never forget why you started, and in the process it’s really important
not to lose yourself along the way.
Kumiko:
15:13
What
makes us happy… Because even as moms, as selfless as we are and as many times
as we put our children’s needs and wants before our own, we’re still people,
and especially with, when it comes to marriages and partnerships, it’s really
important to have that time and dedicate a little money for ourselves because
that’s what makes it worth it.
Kumiko:
15:35
And
for me, I think, we get so caught up in spending only for our children or only
saving for our financial goals or only paying off debt, and that’s how a lot of
people become depressed on their financial journeys and feeling like,
“What am I doing this for? I’m not having any fun with it. I’m not getting
any pleasure out of it because I’m here serving everyone else but myself.”
Kumiko:
15:59
And
so you do have to be a little bit selfish in a way and remember that you’re a
person, too, and you matter as well.
Tracy:
16:06
Since
we’ve just touched on the parenting thing a little bit, what inspired you to
really focus on women and mothers, empowering us?
Kumiko:
16:16
It
kind of just happened organically because here I was, I was a single divorced
mom and I was struggling with my finances, and there are times where I would
literally, you know, I’m dealing with my first child, I had no idea what I was
doing as a mom. There were nights where I’d be crying in the corner literally
listening to my son scream because I had no idea what I was doing.
Kumiko:
16:37
On
top of that, wondering and worrying about how I was going to pay my next month
bills or put food on the table. And those feelings… they’re not just scary
but they’re very overwhelming. And so I wanted to find a tribe, someone that I
could talk to as an outlet. And so, as I started searching for that tribe, they
found me as well.
Kumiko:
17:02
And
so, it was like, I was searching for them, and then they were searching for me,
and that’s why the community, the TBM community, is so wonderful, is because we
are both looking for each other and we found it, and I think that’s why I have
the relationship I do with my readers.
Tracy:
17:17
And
you actually put your savings balance on your Instagram for people to watch.
What made you choose to do that?
Kumiko:
17:24
Yes.
I really think… and that comes down to showing people what it really looks
like in real life to budget on a successful budget. That’s why I share my real
numbers. I share my real numbers debt, budgeting, savings, because I think that
it makes it more relatable. If someone can see that someone out there is really
doing it, not just giving examples, not just throwing you fake numbers, but
it’s really happening in someone’s life, then they can say to themselves,
“You know what? I can do it too, even though my numbers may be different,
I can see her thought process, her mindset, why she’s making the decision she’s
making, and I can start doing that as well.”
Aaron:
18:10
Talking
about the home, what are the major categories that people should be allotting,
budgeting for? Do you recommend having an emergency fund, or, how do you plan
for all that type of stuff?
Kumiko:
18:24
Definitely.
So, as a homeowner, now I’m not a homeowner, but I definitely know what I would
include in my budget if I did have a house. One of those, yes, is your
emergency fund. An emergency fund is number one, doesn’t matter where you are
in your life. If you’re renting an apartment, if you’re paying off debt, if you
have savings goal or you own a home, emergency fund is so important because
let’s not forget, a debt-free journey or a savings journey is not just about
making debt payments or putting in savings into our savings accounts.
Kumiko:
18:57
It’s
about managing our money, so we set ourselves up to succeed in the future, and
we can’t do that if unexpected expenses keep coming up and it’s taking away
from our financial goals. So, emergency fund is really important, but also a
maintenance fund. If you are a homeowner, having a maintenance fund is also
very important.
Kumiko:
19:18
Now
what’s the difference between emergency and say a maintenance cost? So,
maintenance cost will be, you know in five years you’re going to need a new
roof. Okay. That allows you to start, every single month, you save a little of
what you can, a little bit of money to reach that goal within five years.
Kumiko:
19:36
Emergency
is pipe burst, my basement is flooding now. Okay, it’s something we don’t
really have control over or any time to prepare, but maintenance cost is
something where we can prepare knowing our home and what needs to be fixed or
upgrades or remodels that we need to do. So emergency funds and maintenance cost
not only that. I’ll be buying my first home with cash, and a lot of people
think, “Well, that’s great because you’re not going to have any home
expenses.” But that’s not true. You have to think about property taxes, so
I do tell people, “If your property taxes aren’t included in your
mortgage,” and like in my circumstance, I won’t have a mortgage, but I’ll
owe those property taxes, call it… I would create a sinking fund. A savings
account where you save a little every single month to pay that full amount when
the bill comes due.
Aaron:
20:25
That
makes total sense and I totally agree about the emergencies fund and the
maintenance cost, because like… and it depends on the house you have, right,
because if you buy a fixer-upper, like in my case, you kind of know in advance
that your maintenance fund is going to have to be a certain level of… you
know…
Tracy:
20:45
Yes.
I feel like your maintenance fund and your fun money envelope are like the same
envelope.
Aaron:
20:48
They’re
the same. Yeah. You mix and match.
Tracy:
20:50
You
sick, sick human.
Aaron:
20:51
Yeah.
I’m a sadistic person.
Tracy:
20:54
Oh,
man. Okay. So, I’m really bad at math. I’m really bad with numbers. I totally
admit it. The fact that I actually run a business, is really… I don’t know
how, but, so, for someone like me, can anyone do this system? What do you do?
Kumiko:
21:14
Okay.
So here’s the thing. I’m a finance expert and I worked in the financial
industry for a very, very long time. I am calculator dependent. I am also not
good with math and numbers-
Tracy:
21:26
Okay.
Kumiko:
21:26

and I am here succeeding at it. But, the real truth is, doing all the budgeting
and finance work, it’s really not complicated math. It’s addition, subtraction,
but that’s what we have calculators for, and I couldn’t do it without my calculator.
I’m the type of person that, like, eight plus eight on my calculator.
Tracy:
21:51
Same.
Kumiko:
21:51
I
don’t know. I know, I’m not afraid to admit it, because, let’s face it, a lot
of people out there aren’t numbers people. But I am a numbers person when it
comes to analyzing numbers. I like seeing patterns and I like watching
progression as it happens, and that’s where I get really excited about numbers,
but as far as the day-to-day maintenance of a budget, absolutely not. Anybody
can do this. Anyone. Just get out a calculator in front of you and plug at it.
Tracy:
22:21
Okay.
Now, in terms of retirement, savings, college accounts, these large looming
concepts.
Kumiko:
22:31
Mm-hmm
(affirmative).
Tracy:
22:32
What
should every single person have in place that most people don’t? Most people,
probably including me and my husband.
Kumiko:
22:42
I
definitely think when it comes to retirement, especially with us being
self-employed, it really is up to us to make sure that’s in place, right? We
don’t have an employer who’s doing it for us. But I also think it’s really
important that once you get to that step in your financial journey of knowing,
“Hey, I want to tackle retirement,” and it’s something that I
encourage everyone to start as early as possible, finding a financial advisor
that you can trust.
Kumiko:
23:10
I
am really big on, if you don’t possess the skills necessary to make those decisions
wisely, you need to lean on someone that has them. And even for me, I still
have a financial advisor, and I think it really helps me solidify the thoughts
that I’m already making and having.
Kumiko:
23:30
So,
I don’t know if I answered your question. Did I answer your question?
Tracy:
23:34
Yeah.
So, should everyone have checking, savings, and then a retirement fund, do you
recommend?
Kumiko:
23:43
Yeah.
I really think… so, checking, savings. Now, here’s the thing with savings.
For me, personally, I am the type of person where I feel like I’m more
motivated to save if each of my savings accounts are separated and labeled for
that specific goal.
Tracy:
24:01
Yeah.
Kumiko:
24:02
Because,
here’s the thing, if you’re just setting money and I ask you, “What are
you saving for?” And you tell me, “Oh, just a rainy day,” or,
“Just because.” All of a sudden those dollars that you’re saving
don’t have a true purpose, and that’s where you lose the motivation to keep
saving. But if you’re saving and you make it specific, like, “I’m saving
for a vacation to Disneyland with my son.” Rainy day, vacation with son.
Do you see how much more important it becomes?
Tracy:
24:32
Absolutely.
Kumiko:
24:33
Yes.
And like I said, it has to do with those small psychological things that we
change. One small change can really affect your motivation and dedication to
what you’re doing. So, it’s checking, your savings accounts, your retirement
funds, and for business owners, always, always, always keep your checking and
savings separate from your personal checking and savings.
Kumiko:
24:57
For
me, I like to tell people, “If you are a business owner out there making
income, right now, you should have a checking and savings account that is
separate from your day-to-day personal life.”
Tracy:
25:08
I
have a lot of work to do. No, I actually… I have the business, the checking,
the savings, but, when you put it that way, it’s… You’re so right, because
when I dip into our savings, I don’t really feel any type of…
Aaron:
25:25
Remorse.
Tracy:
25:26

yeah. I mean, I just think like, “Well, this is what it’s here for.”
But, if it’s there for something specific, then no, like dipping into it for
something else isn’t… you know, it doesn’t make me feel as okay.
Kumiko:
25:40
Right.
Especially like the example with the vacation. I know I have a savings account
to take my son to Disneyland in February. If I already even think about pulling
that, the guilt of being mom, saying, you know, I’m pulling money away that…
a trip I promised my son.
Tracy:
25:57
Yeah.
Kumiko:
25:57
And
so that really encourages me not to spend it, but it goes down for breaking it
down specifically for any savings goal. You start to ask yourself those
questions. “Do I really need to spend this because it’s meant for
something else.”
Tracy:
26:11
Yeah.
I mean, we’ve talked about these things in so many different ways on the show.
So, composting was one thing we talked about. It’s an idea that seemed so big
and so overwhelming, but they recommended after every meal, starting to get
into the habit of just putting food in a bowl on the counter and then
eventually moving the bowl to the bin and just creating habits.
Tracy:
26:34
And
I think this is about rewiring your brain and creating really positive habits.
Do you ever have moments where you’ve… Have you had any major setbacks on
this journey? Like since you’ve publicly started sharing?
Kumiko:
26:49
Oh,
yes. Major setbacks. One of the things that I struggled with was, when my
business actually started making money. So I started with a bad habit of using
my business checking account for personal spending. I would tell myself,
“Oh, I have the money. I’m going to go to dinner at a Red Robin, it’s in
my business checking account. Swipe my business checking account card.”
Just go at it. And I found myself more and more, as the months went on, dipping
into my business money for personal reasons. And I think that nipping that
habit in the bud, from the very beginning, is what needs to happen, because you
don’t want to start those bad habits and then have it be really hard to break
later on, because that is an extremely hard habit to break as I learned.
Kumiko:
27:43
But
yes, another thing is, it also is, lifestyle inflation. As my income has
increased, learning to live off my existing budget and use that extra income to
funnel into my financial goals. But it’s really hard because you start telling
yourself, “Well, I’m making all this extra money. I deserve to go out and
get this stuff for myself.” But it comes down to, “Well, I really
don’t need it. It’s just something that I’m feeling right now.” And so
that, a lifestyle inflation, is also a setback that I had to deal with.
Kumiko:
28:19
But
those are the two only real things, and of course, there’s always things that
come up with my son. One of the setbacks that I experienced in the beginning of
my journey was learning to say “No” to my son. As a divorced mom, I
had a lot of guilt and I put a lot of blame on the divorce and how it affected
my son on myself. And so, for a while there, a period of time there, I told
myself, “I just want my son to be happy.” Right? “I just want
him to feel joy, because I just put him through this traumatic experience of a
divorce.” And so, any time when we went to the store he said, “Mom,
can I pick out a new toy?” “Absolutely,” I would say.
Kumiko:
29:00
And
it took a while, that setback of spending a lot of money on those decisions and
it involved a whole bunch of things. Guilt as a mom, and of course other
things, but that was a setback and it’s something that I had to correct as I
went along and learning to say, “You know, it’s okay to say no to my
son.” I know that sounds really weird, and some people are like,
“Well, any good mom wouldn’t go through that. Like, you have to know to
say no to your son.” And for me, it was kind of the opposite and it’s
something that I struggled with, and so that was another setback that I
experienced.
Tracy:
29:35
I
love your honesty on that, because my children have not gone through a divorce
and I struggle with that. Even at Target, there’s like the dollar bins, and
we’ve gotten [crosstalk 00:29:46] into the habit of, like, “Okay, if we’re
good for the shopping trip, we can swing through and we can grab something from
the dollar bin,” and in my head, it’s a dollar to three dollars, and it’s
no big deal.
Tracy:
29:57
But,
now there’s an expectation that any time they’re good at a store, they get a
reward and that reward is purchased, and I’ve had to work to reverse that
because that was my own doing, and I think most moms feel guilt, and, well,
parents, feel guilt in some way or another, and it’s hard to say no. And sometimes
it’s easier just [crosstalk 00:30:23] saying yes.
Kumiko:
30:26
It’s
so… it is, you know, it’s so hard to explain that to people who don’t have
kids. Where they’re like, “You should just be able to say no.” It is
so hard.
Tracy:
30:36
I
know.
Kumiko:
30:37
[inaudible
00:30:37] And so, look, where I kind of corrected was, I told my son,
“Well, if you want a new toy, you bring your piggy bank. You saved that
for the money to buy what you want, but if you use it then you can’t use it on
the new laptop that you’re saving for.” And so it’s kind of working on
teaching my son those money management habits as well at an early age using his
own type of savings, and I was able to crack my problem as well. So it was a
win-win.
Tracy:
31:04
Yeah.
That’s awesome.
Aaron:
31:05
So
we talked a little bit about some of your personal issues that you came across.
What about your audience? What are some of the common traps or pitfalls that
you see people falling into that are inhibiting their financial goals?
Kumiko:
31:20
One
of the things that I feel a lot of my readers struggle with is, they’ll say to
me, “Miko, I feel like I don’t have enough income at the end of the month
after paying my bills for my financial goals.” And so because they believe
this, and it’s the mindset they have, right, it’s really hard for them to
change that and say, “Wait a minute. I really do have more income than
what I thought,” and it allows them to start going through what they
already have, their expenses that are right there and we have them finding
dollars they didn’t know they had.
Kumiko:
31:54
So
that’s one of the things, that mindset of, “Here I am, I’m stuck
here.” Right? They feel like they can’t do anything to get themselves out
of it. Another big thing that my readers struggle with is their food budget. I
get it all the time, which is why meal planning and showing that to my readers
is so important in what I do. And I try to show a little bit every day. I could
do better, but I’m trying to show more of the meal planning.
Kumiko:
32:20
Another
thing is debt. “Miko, I have all this debt. I don’t even know where to
start. In fact, I’m so scared to look at it, I don’t even want to start but I
know I need to.” And debt is something… Because I was on a debt-free
journey for the longest time, a lot of people have come to me with debt-type
questions just because I paid off… it was about over $77,000 in eight months.
Aaron:
32:48
That’s
great.
Kumiko:
32:52
Debt
is definitely another thing that readers… And knowing where to start and
feeling the confidence and seeing the hope, really discovering the hope to
start, I think is another big issue with my readers.
Tracy:
33:05
Well,
the credit card debt is so hard because, yes, you can keep paying the minimum
payment every single month, but it just feels like it never goes away. So how
do you help people that are working with a very limited budget start making
progress on those big bills?
Kumiko:
33:31
The
number one thing I tell my readers who are in debt is to start tracking your
spending. I don’t care about anything else that you’re doing. You need to be
aware of where your dollars are going so you can start making changes to cut
spending, because really, all in all, if you want to make bigger debt payments,
you have two options. You can increase your income or you can work with what
you have now, and that’s decreasing your spending.
Kumiko:
33:59
And,
as a business owner and single mom, I always… don’t like telling my readers,
“Go out and get a second job,” because that means less time with your
family. And let’s face it, time is something that we can’t get back. You can
always earn more money but you can’t get time back with your children. And so I
always tell people to start with tracking your spending and cutting the costs
because, boy, it’s amazing when people do this and they find an extra $500 a
month to put towards debt.
Kumiko:
34:30
I
mean, I’ve seen it all the way up into the thousands, and that’s money that
people didn’t know that they had with their already existing income. That’s
strictly from just cutting down spending. And so that’s really where I tell
people to start. And once you start that, then it’s about starting that debt
payoff plan and organizing your debt in a way to manage it step-by-step to get
it paid off.
Tracy:
34:53
I
can’t tell you how many times I’ve packed my kids’ lunch and then we still buy
food. Like, I am prepared and then I’m still weak. It’s so annoying, and I am
going to start thinking about every single purchase now and really… I don’t
know, you’ve inspired me to be more honest with myself and be stricter, because
food is hard, and it’s little treats [crosstalk 00:35:22] and little coffees
and it just, it adds up.
Kumiko:
35:25
And
even to this day, if you’re on my Instagram, I share a daily video every day, I
post every day, you’ll see, even me, I still struggle with it. And my big thing
is, when I get gas, going into the gas station to get diet Cokes. I’m a
horrible addict, and the great thing about The Budget Mom community, is that’s
where accountability comes into play. Right? I tell myself, “If I go to
McDonald’s and buy a Big Mac, all 180,000 followers are going to know I went
and got a Big Mac,” and so it’s that accountability.
Kumiko:
35:59
But,
at the same time, there is one question that I ask myself before I make those
impulse purchases, and that is, “If I spend the money right now, what am I
giving up in the future to get this?” And then all of a sudden it’s like,
your why and the reason you’re doing what you’re doing with your budgeting
journey. For me, I get emotional over it, because the reason I’m on my
budgeting journey is for financial freedom and to provide a better life for my
child.
Kumiko:
36:31
Diet
Coke? Or working towards that? So it really puts things into perspective for
me, that one question has literally changed everything with my finances.
Aaron:
36:42
Yeah.
That’s…
Tracy:
36:43
Wow.
Aaron:
36:44
I
mean, it makes a lot of sense. You can just kind of weigh your purchases and
try and eliminate those impulse buys, I guess, that we’re all so guilty of
doing. I know, I’m always doing that. Every time-
Tracy:
36:54
And
the convenience. Like planning ahead and… So, how often do you sit down and
go over all of your numbers? Just when you get every paycheck, or… How does
your monthly system look?
Kumiko:
37:10
Currently,
right now, for over nine years I got paid twice a month so I was budgeting
twice a month. Now that I’m self-employed and working for my business
full-time, it’s once a month. I sit down and create my budget about five days
before I get my paycheck, but I spend 15 minutes every morning and every night
going over my bank account, the transactions, as well as tracking my spending.
Now, I do everything manually. In fact, I found on my financial journey that
using electronic programs or apps like YNAB or Mint, they didn’t really work
for me because some of the biggest ah-ha moments that I had in my journey was
because I was putting pen to paper.
Kumiko:
37:54
It
has to do with those psychological benefits of writing things down, and I am a
huge believer in it. And so I spend about 15 minutes every morning, every
night, writing out my expenses, going through the receipts that I save. Now, I
am an all cash spender, which means I never swipe my debit card, ever. Like-
Aaron:
38:14
That’s
crazy. I never carry cash.
Kumiko:
38:16
Yeah.
I could probably cut my debit card up today if it wasn’t for the fact that I
need to do online shopping. Like, seriously, I never do it. So, I save my
receipts throughout the day for my spending, and I track that on my cash
envelope and it tells me, right now, today, at this moment, this is how much I
have to spend on this category. All of a sudden, your magical numbers that you
wrote down on a piece of paper become tangible. Right? This is what makes your
budget tangible and realistic. Seeing that cash in front of you, oh, my gosh,
it’s a game changer. It really makes you start asking those really important
questions with your spending, like, “I have $20 dollars left in my food envelope.
My son is asking for a pack of Mountain Dew. I only have $20 dollars left. Is
it the Mountain Dew or is it food for the week?”
Kumiko:
39:07
So,
it’s just… it’s almost like those decisions seem so easy but when you’re just
swiping a card, it’s really hard to see the big picture of your spending, and
that’s why I’m such a firm believer in the cash envelope system.
Tracy:
39:19
Now
we’re so disconnected because I have the Amazon app, I have the DoorDash app. I
have [crosstalk 00:39:26] the debit cards and like, I can’t say I really feel
much when I’m just pushing buttons, and I hate to admit that, but you’re just
so-
Aaron:
39:36
[inaudible
00:39:36] have to pay and you just put your phone-
Tracy:
39:36

yeah, you’re so far removed from your spending, and yeah, I remember when I was
younger and after your birthday party you would be handed like, you got like
$15 or $20 and you had to go to the mall and figure out where you could spend
it. And I think that’s when it’s more, okay, I’m going to prioritize how-
Kumiko:
39:57
Right.
Tracy:
39:57

I spend this money because it’s only this much in my hands. So, if it’s a
couple, so for my husband and I, if there’s just two envelopes for… How do
you kind of split up the envelopes and make it so it’s collaborative?
Kumiko:
40:14
Here’s
the thing, and that’s one of the number one questions I get, is how do I make
the cash envelope method work with a spouse or partner. And the number one
thing the wives tell me is, “My husband, he’s been told how much he can
spend. He hates being given-
Aaron:
40:30
What?
Kumiko:
40:30

a cash allowance-
Tracy:
40:30
My
husband would love it.
Kumiko:
40:32
Oh,
really?
Tracy:
40:32
I
really think he would.
Aaron:
40:34
I
wouldn’t love it.
Kumiko:
40:35
My
audience, 98% of my followers are women, and so my brand and the cash
envelopes, everything that I do is very feminine, right? And so my readers say,
“My husband doesn’t want to carry your floral envelope in his back
pocket.” So what I recommend is you can do it, one, before anything, you
need to sit down and talk about the cash envelope method with your spouse and
how it’s going to work for you. Are they okay being handed a cash allowance?
Kumiko:
41:05
That’s
the first question because it’s going to dictate how you handle it, the method.
If they’re not okay being handed by wife a cash amount, I suggest leaving their
spending money in a checking account. Let them swipe their card all day long if
that’s what they want to do, and then you track the spending, right? You are
the one who tracks the spending, or, if you’re working on it together, he can
track spending as well.
Kumiko:
41:33
So
that’s the first option. Leaving his monthly spending in the checking account,
let him go at it. The second thing is, you have to figure out who is the spender
in your household? Are you, as the mom and the wife going to the grocery store
most often, and it’s only the husband goes to the store when you call him and
say, “Hey, honey, can you grab some milk?” Right? So then I would say
90% of your food budget, cash, goes with you, the other 10% goes with the
husband. And, not only that, with the cash envelope method I always suggest you
don’t carry your envelopes all of your cash with you at all times. You only
take the money that you need for that day, which means planning ahead.
Kumiko:
42:15
If
that’s the case, maybe you don’t need the food envelope, right, and it’s
sitting at home. Husband can then have access to it when you’re not using it.
Tracy:
42:24
Love
it.
Kumiko:
42:25
So
that’s kind of the thing…
Aaron:
42:27
So
it’s different though because in my house, like I handle most of the financial
stuff in our house because my wife is, you know, proven herself not able to do
that.
Tracy:
42:38
Well,
I handle… My husband and I are both creatives and because I’m the one home
I’m the one that deals with pretty much all of the bills and stuff, and all of
the shopping and everything. We had the Mint app for a while and you get an
alert if you go over on certain categories, and the coffee category was a huge
source of shame for both of us. Like, whoever would get that alert first, and
it was the other person, it would be like a huge hazing thing. But I really
think this would go very well at my home. Do you… You don’t think it-
Aaron:
43:15
No,
I think it… I’m sure it would work. I just have to… a lot of shuffling to
figure out in order to do it.
Kumiko:
43:23
It’s
just a definite make sure that conversation and consistent conversation about
the budgeting and finances happens, I always say, at least once a month. If you
can even do it once a week, sit down with your partner and spouse and see if
you’re both on the same page because let’s be honest, this is what causes a lot
of tension in relationships, especially marriages, and the ability to
communicate openly about your feelings, like, “Hey, I really don’t like it
when you tell me I can only spend $100 this month.” “Okay, well then,
what’s the amount that you’re comfortable with? Where can we get on the same
page?”
Kumiko:
44:04
The
conversation part of it is so important when you’re working with the cash
envelope method or any budgeting method.
Aaron:
44:10
I
think one of the biggest hurdles, and we’ve talked about in previous episodes,
when it comes to planning to buy a home even, for example, a lot of the younger
demographic we’ve talked about carries such a student loan debt these days
that, historically, people didn’t really have. How do you recommend people try
to attack that, or is there a way that you recommend people go about trying to
get rid of that sooner than later?
Kumiko:
44:37
Yes.
So, student loans, I got done paying off my last student loan back in November
of last year, and one of the things that I see with my readers, especially, is,
they can have student loans for 10 years, and by the end of that 10 years they
still don’t know what kind of student loans they have. So, are they subsidized?
Are they unsubsidized? When is the interest accruing? What is the interest
rate? And so I think the number one thing with student loans is sitting down
and figuring exactly what you have. That’s the first step, because you can’t
create a plan to pay it off until you know those things.
Kumiko:
45:17
So,
for me, believe it or not, I had 18 student loans. Okay. They totaled about
$33,000 but with 18 separate, completely different loans, and some of them were
unsubsidized, some of them were subsidized, meaning that the interest can
accrue when you get out of school or they can accrue when you actually take out
the loan. And a lot of people don’t know this, and a lot of people also don’t know
their interest rates.
Kumiko:
45:43
And
so I say, sit down, piece of paper in front of you, write down everything about
your student loans that you know. If that means you have to call the loan
company, if that means looking at a statement, get that down in front of you
and then figure out a plan to pay it off. Are you going to pay it off with the
interest rates that are the highest first? Are you going to tackle the balances
that are smallest first? You have to have a step-by-step debt pay-off plan. I
feel to really tackle it, tackle it and stay dedicated to it, rather than just
saying, “I’m going to throw all my extra dollars to this debt and to this
debt.” Just focus on one debt at a time while you make the minimum
payments on your other debts, and then just create that plan to pay it off.
Tracy:
46:27
In
terms of financial planners, I definitely feel that I would be a candidate for
one, and you recommend working with financial planners. A lot of people would
probably say, “Well, I have no money to pay for a financial planner
because I’m struggling with money.” How affordable are they and how does
it work? Is it typically like an hourly rate, or how do financial planners
work?
Kumiko:
46:52
Here’s
the thing. There are many different financial professionals, so you have
financial advisors, investment advisors, and certified financial planners,
which are known as CFPs, and then you have people like me who are an AFC, which
is an Accredited Financial Counselor. People like me… Now if you’re
struggling and you say, “I really don’t have the money to go out and get
the help I need,” look at counselors because most of the time they are in
non-profit organizations that actually won’t charge you a dime for their
service.
Tracy:
47:26
Wow.
Kumiko:
47:27
Yeah.
A lot of banks also have financial resources that doesn’t cost you a dime to go
in and get the knowledge that you need and the confidence you need to feel like
you need to move forward or make a decision. In fact, more and more credit
unions and banks are bringing in financial counselors and people who are
educated in the personal finance realm, and they don’t charge you a dime.
Kumiko:
47:55
And
so, afcpe.org is where you can actually click on find a financial counselor,
and you can literally find one in every State or where you live, and it’s
absolutely free.
Aaron:
48:07
So,
if you had, let’s say, just kind of wrapping things up a little bit, if you had
five tips maybe to recommend to the audience that would be helpful for setting
a budget and sticking with it, what do you think those tips would be?
Kumiko:
48:22
Tip
number one is discovering your why, and people always tell me all the time,
“Well, I want to start budgeting,” and I say, “Well, why do you
want start budgeting?” And they start listing out all these things. But
here’s the thing. It took me… I mean, when my son was born, it was like
automatic. I knew my why, I knew my purpose, but before that I felt like I was
kind of floating around, right? I didn’t really have a purpose. So discovering
that why, and your why should be something that you’re so passionate about, you
get emotional thinking about it or talking about it. That’s how important your
why should be.
Kumiko:
49:01
So,
discovering your why. That’s what’s going to keep you dedicated and motivated
on your financial journey.
Kumiko:
49:08
Tip
number two is track your spending right now, today. If you’re wondering what’s
the number one action step to take from this podcast, right now, today, start
tracking your spending. It doesn’t have to be pretty. Get a notebook piece of
paper out and just start writing down the dollars that you’re spending.
Kumiko:
49:29
The
next one is figuring out and looking at your recurring bills. You may think
right now that you have to spend this much money on your bills. That would be
lying to yourself. You can decrease the bills that you have in many different
ways, you just have to take action and put in the work to do so. So, decreasing
the bills the you feel like you have to spend money on every single month.
Kumiko:
49:56
The
next tip I would say would be, if you’re dealing with debt, to sit down and
write. It’s scary and it sucks and I hated every bit of it, I didn’t want to
look at the big picture of my debt, but getting it down in front of your face,
writing everything you know about your debt is the first step in being able to
tackle it.
Kumiko:
50:20
So
those would be the main tips. I think with being able… and not only that.
Figure out what kind of learner you are. Are you a visual learner? Do you learn
by analyzing numbers? What kind of learner are you? Because that’s really how
you have to set up your budget and organize your finances in order to stay motivated.
Kumiko:
50:43
Now,
I’m a visual learner, which is why on my Instagram you see all these pretty
things and all these visuals? Because that’s what keeps me motivated. So I also
think figuring out, what would keep you motivated as a learner in the very
beginning?
Tracy:
50:57
Amazing.
Aaron:
50:58
Thank
you so much for being here. I mean, I think you’ve shared some really
insightful, like a lot of information obviously, but for people who want to
find out more about your financial method or more budgeting tips and stuff,
where can people find The Budget Mom?
Kumiko:
51:13
Yeah.
The meat and bones of The Budget Mom lives on Instagram and you can just find
me on The Budget Mom, @thebudgetmom, daily videos, tutorials, my day-to-day
spending, everything is right there, as well as my website, thebudgetmom.com.
That’s also where you can find my free email course. It’s absolutely free. It
comes with over 20 printables and over 20 cash envelope designs. Everything’s
free to get you started on a cash envelope budget. And then, as well as my
YouTube at The Budget Mom where I put more of my lengthy, in-detail videos live
on YouTube.
Aaron:
51:54
Awesome.
Tracy:
51:54
Thank
you so much.
Aaron:
51:56
Yeah.
Thank you so much for being here. We really appreciate it.
Kumiko:
51:58
Thank
you so much for having me.
Aaron:
52:00
I’m
like, I’ve got so much to work on. I’m going to have to decompress after this
episode, but we’ll figure it out.
Tracy:
52:07
Lunch
is canceled.
Aaron:
52:09
That’s
right.
Tracy:
52:09
Coffee’s
canceled.
Aaron:
52:09
I’ll
get my wife on the phone, and we’re going to sort this out.
Tracy:
52:12
Take
your floral envelope to Home Depot
Aaron:
52:13
That’s
right. I’m going to take my floral envelope to Home Depot and I’m going to get
shopping.
Aaron:
52:17
We
want to also thank our founding sponsor, FilterBuy, for making this series
possible, and encourage you guys to follow us on social media @howtohome_guide,
and get involved in the show. We respond to messages and comments all the time,
and we’re constantly posting content, so be sure to follow us.
Aaron:
52:35
Anything
else?
Tracy:
52:37
No.
That’s it.
Aaron:
52:38
All
right. Well, thank you guys so much for watching, listening, and make sure you
rate us on your podcast listening app of choice, and we’ll see you guys next
time.
 

Show Notes

This week Aaron and Tracy chat with Kumiko Love about tips for jump starting your family budget and how to stick with it.

LET’S CHAT!

You can always call and leave your questions and comments on our voicemail!

978-709-1040

KUMIKO’S METHOD:

  • Kumiko does the budget by paycheck method, and also implements a calendar.
  • She doesn’t use a predetermined dollar amount or percentage.

JUMP START YOUR BUDGET:

  • Learn the emotions and triggers behind your spending.
  • When you’re a freelancer, knowing everything about your past spending is important.
  • Meal plan! Food is a budget killer.
  • Track your spending and figure out where your money is being sucked.
  • Call the companies behind your monthly bills and see if you can get your costs down.
  • Create an allowance for spontaneous purchases.
  • Homeowners should have an emergency fund and a maintenance fund.
  • Find a financial adviser you can trust, if you don’t feel comfortable making the decisions on your own.
  • Kumiko thinks you’re more motivated to save if you have savings accounts labeled as your specific goal.
  • “If I spend the money right now, what am I giving up in the future?”
  • For student loans- sit down and figure out exactly what you have.
  • There are financial counselors out there for free! Check out non-profit organizations and banks.

TOP 5 TIPS:

  • Discover your why. Why do you want to start budgeting?
  • Track your spending. It’s the number one action step.
  • Look at your recurring bills and try to get them down.
  • Sit down and look at your debt. Write it all out.
  • Figure out what kind of learner you are? That’s how you have to organize your finances to stay motivated.

COMMON PITFALLS:

  • They can’t change their mindset surrounding what they have/need.
  • They feel stuck.
  • Food! They need to meal plan.
  • Not knowing where to start with debt.

CONTACT KUMIKO:

Website | https://thebudgetmom.com

The Gram | @thebudgetmom

Youtube | @thebudgetmom

FOLLOW US on Social Media:

Website | https://www.howtohome.com/

Instagram | http://bit.ly/2WqVfSp

Twitter | http://bit.ly/2RRyYij

Facebook | http://bit.ly/2MC3Hdc

Youtube | http://bit.ly/2SifqTH

SUBSCRIBE to the How to Home Podcast:

Itunes | https://apple.co/2DL0lSp

Android | http://bit.ly/2B9k7Fm

Stitcher | http://bit.ly/2DM0W6c

Spotify | https://spoti.fi/2GcRCKo

THANK YOU TO OUR SPONSOR FILTERBUY.COM