Hi, my name is Bob Brooks and welcome to the prudent money channel. You know, there is a lot of financial stress and anxiety about money out there today. There's a lot of reasons why I mean, think about high consumer credit card debt. Think about lower wages, not enough money coming in, think about too many bills. But there's a lot of reasons. And these are the reasons that people assign to their financial stress.

But I got to tell you, those are symptoms of the real problem. The real problem is and I get I've gathered this over two decades of working with people is that people don't have a plan. They know they're unaware of their financial situation. Let me give you a couple of examples. A person who has a lot of debt, they'll come into my office sit down, want to know some solutions. First thing out of their mouth is it's just very stressful conversation.

I'm going to be in this debt for 15 to 20 years, it's going to delay everything. It's going to take me for forever to get out of debt or they're just convinced we'll never get out of debt. And so I start to ask the questions. What's your interest rate? What's your payment, what's your balance? And the most the most important question, what's your payoff date.

And they just look at me with a blank stare, because they don't know the information. They don't have a plan. And so I go through the process of putting a plan together form, show them that it's not going to take 15 to 20 years, it's going to take three to four years. And now they have hoped and then we start to build a spending plan and show them where they're going to get that money to pay extra to pay that debt off. And they leave the office with hope because they've got a plan and take the person who wants to retire, they come into my office and say, you know, I'm never going to retire. And I'll so I'll ask the question.

How do you know you're not going to retire? It just feels like I'm never going to retire. And what ends up happening is is that negative interpretation of your situation because you don't have a plan, you don't know really what shape or situation you're in. And what I found no matter where you are in your life when it comes to retirement, we can create some type of a plan, but having a plan having a knowing of what's going on, decreases your financial stress in a lot of cases, eliminate That's it. But here's the problem is there is a comfort in not knowing, you know what you don't know what hurts you. There's a lot of truth to that.

But there's a comfort of not knowing and facing your fears a lot of times is more painful than the stress. Yeah, the funny thing about the stress, we're used to it, it's kind of an old friend, we can deal with it, we carry it around with us. But, you know, maybe knowing really what our situation is, that might be a little bit more painful. So we we kind of stops us dead in our tracks. today. What I want to talk about is the downsides to not having a plan and talk about what really could be propelling your stress and creating your stress and showing you that there's maybe a way out of that in decreasing.

Let's start with the first one. downsides, not having a plan, a not working mindset, always focusing on the negative. There's a dangerous cycle when it comes to negativity. Now you first you interpret your situation as being negative. And then you start to develop that negative mindset and here's the thing about financial stress, it's so very powerful that it starts to go into other areas of your life and it's like a cancer, it starts to envelop take care of control of your entire life. And then everything's negative have a there's a person that I know that she interprets everything from a negative standpoint.

And I'll I'll start to ask them details about their financial situation. And they just don't know the details because they don't have a plan. But it comes back down to the you know, the problem with negativity is that it starts into a loop that you start develop more and more negative beliefs. And when you start to expect negative things to happen, the subconscious minds a wonderful thing, it brings it to you. So you get a break that loop but this is what not having a plan, you start interpreting everything as as negative. Another downside of not having a plan living in a state of denial, and I can illustrate this with the person with credit card debt.

They start out with a credit card, maybe they have $30,000 credit limit and they start to change on it, and they start to charge some more and they start getting comfortable building that, that credit card balance up. And they think you know what, this is not going to be a problem. I'll pay it off in a couple of years, no big deal, but they keep adding to it, their comfort level starts to expand with that credit card. Next thing you know, they're at $30,000, their credit limits at 30,000. They're maxed out, they go get another credit card, still it kind of in a state of denial that this is no big deal. And then they wake up with a debt crisis.

And what I've always said about debt is that debt is not a problem until it's a problem. When it becomes a problem. It's an overnight nightmare. You wake up and you go, look what I've done. I can't believe this. Same thing could happen with investments, you're stuck in the wrong investment strategy.

You're losing money, and you're in denial that you really need to change, make some changes, but you have hope that it's just all going to come back when you really should make some changes. So this living instead of denial, and you start to add some of that negative loop with it will keep you locked in the wrong strategy in the wrong situation. downsides to not having a plan high probability of creating debt. And I see this a lot is that we and I'll talk about intentional and non intentional spinning here in just a second. But we spend money, kind of hoping at the end of the day, that there's enough money left in the bank account to follow expenses. If you do that you know who you are.

It's it's a it's a dangerous spending pattern. But what ends up happening is that you get to the final week and you go, Wait a minute, I've got two or three bills left, and I have no money. What am I going to do? I'm going to go the credit card, and it's called survival Oh, by the credit card. In fact, today, if you look at credit card balances, we are almost at record levels of credit consumer credit card debt again, the last time we did that was right before the financial financial crisis. And if you look at consumer spending, it does not support the fact that we've had these high credit card balances, which means it looks like people are surviving on credit cards again, not a good situation.

But that is really How debt is created. If you don't have enough money, a lot of times it just goes on the card. And a good spending plan eliminates that problem. downsides to not having a plan non intentional spending, it's real interesting that you know, where you spend your money, where your money flows to what you use it for is what you value. And if you look at your credit card statements, if you look at your bank accounts, and you total up all your spending, you categorize it, that's what you value. And a lot of for a lot of people entertainment.

And a lot of people eating out is kind of up there in the hierarchy of their values. So there's nothing wrong with that. It's what you value, your values are your values, but it might be that you want to value something higher. And that's, that's what I talked about intentional spending versus non non intentional spending. You know, when our spending is broken up into two categories, there's discretionary and non discretionary, non discretionary spending is what we have to pay for month in month out if you don't pay for it, someone takes something away from For me, the discretionary spending is what's left over. And a lot of times we spend non intentionally and we spend on what feels good, eating out pleasures, entertainment, whatever, whatever it might be.

Now, if you get if you do put it, excuse me put together a plan, and you do a hierarchy of your values, you might say, you know what, I love to eat out, but I want to get out of debt before more than anything. So I'm gonna move this up the hierarchy, and I'm going to move the emphasis on on eating out in entertainment down below. And now you're intentionally spending money based on your hierarchy of values, but you can't get there without a plan. downsides not having a plan, you are more than likely wasting money. I used this illustration, and it's my own personal story, which is a little bit embarrassing, cuz you know, I should know better. Right?

And I have a I have a spending plan. Now my spending plan is kind of a global spending plan. To give you an example, we put everything on American Express and pay American Express off. So on the American Express card. I know you Just about when I'm spinning. So if I'm getting lazy what I'll do, I'll see that yeah, this amount was spent on American Express's do that's about what I spend some, okay.

What I should be doing is doing a deeper dive into the details, every see where all that money is going on the American Express and then even dive deeper into things like the at&t cell phone bill. That's that is always confusing and typically has mistakes on it, by the way that you always want to make sure that it doesn't. And so I decided this year that you know, I'm going to do a deeper dive, I'm going to change up my system, I want to get a lot more organized and with my spending. And so I went in, and I discovered that I've been paying 12 months of internet when I cancelled it 12 months ago, so wasted all that money and finally canceled the course they didn't give me that money back. I could have sworn I call them but anyway, that's beside the point. But anyway, a lot of times I think that we spend money and we go through the process of just paying the bills when we're wasting money on supplies.

Christians that we cancel subscriptions, we don't even look at it that we don't even use anymore. You name it. I went through and I went through my corporate spending, and my company, and found a lot of things that needed to be done differently. Because I wasn't doing a deeper dive. But that's what probably out of any of the plans we talked about today, the spending plan is the most important, it's the one most people don't have. downsize to not having a plan creates stress, you have no sense of control.

Obviously, this is what we're talking about. By not having stressed one of the things I wanted to point out is that if you have a plan, you have a sense of control, because at the end of the day, you can control your spending, you can control where the money goes. And it gives you that playing gives you that sense of control. By reducing that stress. downsize, not having a plan places more stress on your marriage. I see this more often than not, is that there's one spouse and it could be the husband or the wife, one spouse taking care of all the bills, taking on all the stress, not communicating With the other, the other spouse and that's other spouse really doesn't have a clue as to what's going on.

And so he or she innocently will go out and spend money comes back. And then the spouse who takes care of everything goes, why do you spend that money? It creates all of this stress when they're not on the same plan and not on a spending plan. And the fact that they're not on a spending plan creates a tremendous amount of stress anyway, on the person who's taking care of it, much less the person who just really doesn't know what's going on. It decreases stress, even in a marriage. So what's the biggest challenge with a plan?

Well, quite frankly, it's getting started. And it goes back to there's kind of comfort with that stress level that you're that you're used to dealing with. There's a little bit of comfort in not knowing, and I've worked with people. And this was just the other day I was working with somebody where we set up a plan. I spelled it all out. I said, Okay, let's get started.

You have to take the first step though. And the sense of hesitant See, and that comes from a lot of different fears, maybe a lot of different regret. But it's so very important to get started and just to know that this is going to decrease the financial stress in your life. Now, the first thing that you got to do is you have to create a mindset. And really this teaching video is just about about identifying the real, the real cause of financial stress. There's a another video, I don't believe in budgets that you can go check out they can show you how to do it from step by step by step.

But this is about creating a mindset. The first thing you got to know it's a process. Anytime I talk to people about creating a specially a spending plan, or maybe even getting out of debt plan, debt reduction plan. I tell them that it's a process. It's going to take time, you're going to have to get used to the details, working out the system, the process. So you got to show yourself some grace.

You got to be easy on yourself, but you've got to be diligent, you got to be committed to it. And it's Gonna take maybe three or four months until you have a good regular system going this easy to use. The second is find the system that works for you. There's a lot of sophisticated software systems out there. And when someone asked me what do I use to organize my spending plan, I tell them and they're they're really surprised. I use an Excel spreadsheet.

And I do that because it forces me to dive into the details of forces me to take the numbers off the sheet and put it in a in a spreadsheet. It takes a lot of time to do it. But it puts me more in touch with what I'm spending and more in touch with the details. What I found with the software systems is that it's easy to go through the motions, you set it up and runs on autopilot. You push a button, you download things, it categorizes you print out a report and what I found myself doing is just flipping through the report, check the boxes. I did my spending plan but not once again, diving into the details.

So the Excel spreadsheet works for me. In fact, I've got a Excel spreadsheet, I'm happy to send to you just go to Send me an email at Bob at prudent money comm Bob at prudent money calm, and I'll send you a free copy of it and you can fill it in for yourself commit to a time each week, your spending plan will fail miserably. If you don't commit to a time, I time that you set every maybe it's every Sunday afternoon, maybe it's every Friday, whenever it is that you're going to sit down for 30 to 45 minutes if first what's what's great is that the more you do it, the better you get at it, the less time it takes. But commit to 30 to 45 minutes to stay organized. You can't let a week go by a two weeks go by then you find yourself behind.

And this is a killer of spending plans is that you get behind a month and you go okay, I can't get this done. And so you just don't do it anymore. But you've got to commit to a time and make sure that you do it every week. Know thyself, and this is excuse me, this is very important. Because we all have our tendencies to get in the way. We all have our roadblocks that get in the way.

Maybe it's procrastination. Maybe it's not being detailed enough I have to force I can be detailed all day with people I work with when I get home. I'm tired of being detailed. So it's hard to force myself to be detailed, which is why I changed my spending pattern by my spending plan. But know yourself and know your tendencies. And when you see yourself starting to lay back into your tendencies and do things that are going to get in the way, correct yourself and get going is also a great personal growth strategy to clear up some of those tendencies.

Start changing your beliefs, this is extremely important. It's going to be a challenge. If you've been in a negative loop, but you've got to change your beliefs, you got to change your expectations. You've got to put a positive spin on it, start writing down some of the conversations you know, we all have in our minds, that doubt that pops up in your mind and don't settle for it. Here's the great thing about the subconscious mind it believes anything you tell it. So whatever you tell your subconscious mind over and over and over again and by the way, you can only hold either a A positive belief or a negative belief at one time can hold both.

So if you're feeding positive beliefs into in positive expectations into your subconscious mind, you'll start to see dramatic shifts. But it's it really is pretty tough to have a negative outlook, negativity negativity loop going, when you're trying to plan for the future and create a positive future. start changing your beliefs Don't settle for negativity anymore. I mean, that's it's just it's just imperative. I mean, it's all kind of tied together. But if you stay in that negative loop, it's going to be a roadblock.

It's going to get in the way. Now, when we talk about plans, planning, there's a lot of different plans. There's a plan to get out of debt, maybe there's a plan to fund college, maybe there's a plan for retirement spending plan out of all of them. If you don't have a solid spending plan, which most people don't, that's going to be critical to laying a foundation because with a solid spending plan, you're going to be able to determine where that money He's going to come from you know, we got the discretionary money issue, where it's going to go from that spending hierarchy of values, and how you're going to use it. So the plan to reach your goals very important to do the spinning plan most important. And if you want more information go to I don't believe in budgets.

That's a teaching course when the very first ones that I did, because I think is the most important it talks about the spending plan, and how to organize your spending, and how to get a good solid plan established. Here's the bottom line. There's so many people today that are living in financial stress and they don't need to be. I've talked to many people through the years now watch them stress about things. And then when they realize we start to develop the plan, and understand where they're going, and what they have to do. They take back control and get rid of that financial stress once and for all.