Today I’m talking about creating a Dream Budget. I think it’s important to dream and to plan for your dreams. In today’s episode I will take you through an exercise to help you create a budget that supports your dreams and goals and how to achieve them.
In this episode we will cover:
- How to Determine your current business and personal budget.
- Creating your 2023 budget
- Creating an Ultimate dream budget.
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Episode 250: Making Your 2023 Dream Budget Transcript
Andrea: [00:00:03] Welcome to the Legalpreneur podcast. I’m your host, Andrea Sager, founder and CEO of Legalpreneur Inc. As a serial entrepreneur and someone that works exclusively with small business owners legally protecting their business, I’m dedicated to covering common legal issues faced by business owners, providing you with the business knowledge you need to catapult your business’s growth and showing you just how some of the world’s most elite entrepreneurs have handled these legal and business issues themselves. In true attorney fashion, the information in this episode is not legal advice. This is for informational purposes only, and you should always consult with your attorney before implementing any of the information in the show.
Andrea: [00:00:47] Hello there. Welcome back to the podcast. I am really excited for today’s episode because we’re going to dream a little, you know? I like to dream big. Also dream bigger. Our conference love the name anyway, so we are going to dream for 2023. And this past week, on Wednesday I had our seven figure business planning session. That’s a mouthful for all of those that preordered the Legalpreneur book. It’s coming out at the end of January. I’m so excited. And if you preorder, even if you haven’t preordered, you preorder now, you can still get the recording. But this is one exercise that actually took everyone through. I got this from Chris Harder. You all know I’m a huge fan of my boy Chris, and I thought, Hey, why not take them through this for the seven figure planning session? Then I realized, like, everybody needs this because I actually do this pretty much quarterly and. If you’re driving, obviously don’t do this right now, but save this and come back to it and listen to it right now, but also come back to it because it is going to change your life. The first time I did it, I was like, Oh, wow. And what we’re going to do is. Write out our current budget. And what I mean by your current budget is. What your current expenses are. And for those that are business owners, hopefully all of you, you’re going to create a personal budget plus a business budget.
Andrea: [00:02:20] It’s your current expenses. So your current business expenses and your current personal expenses, you’re going to write down everything and I mean every last thing. How much food, how much gas, all of your utilities and don’t like, don’t be afraid to write something down. If you go through your bank accounts, take the time to write all this up, because I promise you it will be a game changer for you. What I’m going to tell you. So take some time, write it all out and I’m going to list some things. I’m pulling out my list. Listen, things that I had written down before, I don’t have my initial list. I have all of my notebooks somewhere. But because I like to move all the freaking time, I don’t have all of them currently in my possession. I think some of them are. Some are in storage. But literally write down every single expense. Go through all your bank accounts, all your credit cards. What are the recurring expenses? What do you currently spend on entertainment? What do you currently spend on shopping? What do you currently spend on your kid’s daycare? All of your personal expenses. Write those down. Then you go over to business, write down every single last expense. And this is a good way to figure out, okay, do I need to get rid of any expenses? But what you’re going to do is add it all up and then.
Andrea: [00:03:46] Total it and that should be hopefully your personal budget is less than what you’re currently bringing in from the business. But that’s what you know what your current budget is. Then it’s time to dream. It is time to dream. And we are going to create your absolute dream budget. And there’s a couple of ways you can do this. You can do this for 2023, your 2023 dream budget, or you can also do like your ultimate dream budget. I suggest doing an ultimate dream budget. And then if you really just can’t get behind those numbers for 2023, then tailor it to 2023 and kind of trim it down, but don’t trim it down too much. Trim it down to where it’s, Hey, this is a stretch for me, but it’s going to I actually believe I can hit it. So what I mean by that is. If you currently live in a tiny apartment and you want a bigger house, you want a big house, or if you’re currently at a home, but it doesn’t fulfill you and you want a nicer home or a different home, What is that mortgage going to cost? What is the down payment for that? If you’re currently saving for a home or if you want to save up a certain amount for a.
Andrea: [00:05:02] So if you’re doing this for 2023, if you’re going to save for a down payment, how much is that down payment? Divide that into 12 and put that for your 2023 dream budget for per each month. So we’re going to write this down as a monthly budget. In the way I budget. I don’t. I don’t look at what I’m bringing in, and then I can only spend this much here. I only spend this much here. I look at my budget as, okay, this is what I want to spend. This is my desire. Now I know my total and this is how much I’m going to go make. And I hope that changes your frame of mind around budgeting because. The masses are trained to look at what you bring in from your paycheck and then allow that money to go to certain buckets and you’re limited. But if you change the way you look at it, no longer are you limited. You can look, I want to spend this much here. I want to spend this much here. Now, I know the total I need to go make. Let me go do that. Completely just changing your mindset, your self concept around how you’re looking at your budget. Now, when I say dream, you guys, it’s time to dream. Dream big. Look at everything. Your mortgage, your car.
Andrea: [00:06:14] This is the time to be selfish and look at your true desires. Do you desire to have a fancy car? A big, fancy luxury car? Do you have desire to have multiple luxury cars? And if you don’t, that is perfectly fine. I actually like right now. So right now, for 2023, I’m good with my car. I like my car. I so my ultimate budget has multiple cars. My ultimate budget has some luxury cars in there. But for now, like I’m perfectly great with my car, it is like I feel. Safe taking care of in it. But I do want to design my dream car. Currently I have a gle Mercedes 350 and it’s. I used to have a GLC and it was this matte gray. It was so sexy and beautiful, but it was a lease. And then I was driving along because I was living far away and so I was driving too much. I had to buy a car, so now I have a GLE 350 but it’s black. It’s just like nothing special, like the matte gray. So eventually I want to design custom design my gle. I love the gle, but I just want a different color. But that’s my desire. Like what I’ve learned over the past couple of years. You have to own your desires. And that’s what I want you to do with this ultimate dream budget. So just remember we’re making the current your current budget.
Andrea: [00:07:41] Your 2023 budget and your ultimate budget. They are two different things. I was coming in to just do one dream budget, but I realize you need to have a 2023 budget and then an ultimate dream budget. And I’m just going to name some things to get you just dreaming. When we do this exercise and Chris Mastermind people are kind of like naming things, calling things out. It’s like, Oh yeah, I actually do desire to have that. So. If you want a down payment for a certain house. So one of my I’m just looking at like different my different desire lists, one of my desires. My dad is retired, my mom, she’s retired. They’re both retired from the post office, but she still has like her little job that she does. And she keeps saying that she’s just like over it doesn’t really want to work anymore. So my one of my desires is to retire my mom, and that would require me giving her the money that she makes from her current side job because her retirement money goes to basically the bills that they have. So either basically giving her money for to replace her current income or just covering all the bills. So I know if I want to retire my mom, that’s going to be an extra 3000 a month roundabout. I also want a motorcycle.
Andrea: [00:09:03] I’ve always wanted a motorcycle, you guys. And I was very, very close to getting one last year for my birthday, but I didn’t. So I also have, like, different personal desires and different business desires. So make sure you break those down as well. A nanny. So. And not necessarily like my kids. They’re not. Infants, but I want someone to come and do the laundry. I want someone to come and make sure all the dishes are done. Things are put away like basically a house manager. One of my friends does have a live in nanny and she shows she lives there, she cooks all their meals, does her grocery shopping. And just to give you I know this is going to vary everywhere, but she pays her nanny $4000 a month. So that’s what I had put down on. My ultimate dream budget was a nanny about $4000 a month. Obviously, that could be more or less whether I want the nanny slash house manager to live with us. Oh, retirement. Do you want to put money towards your retirement? So currently I max out my $41k and that I think it’s like $19,020 thousand a month. Do you want to put money towards a for one K Do you if you don’t have a if you’re self employed, do you have a retirement plan, Do you want to set one up, Do you? So one of my ultimate desires is also to contribute to an additional brokerage account put.
Andrea: [00:10:27] So I currently put $100 towards I have a basically a minor brokerage account, like an investment account. I didn’t want to have a 529 account, which is a college savings account for the kids because I don’t want to force them to go to college. They will have that option. But I don’t want to tell them like you have to go to college. And I feel like that 529 account, you really just you kind of get screwed if you don’t use that money for college. So I just even though 529 is a great savings tax savings account, I am fine with not having that just to give the flexibility to the kids when they are 18 to figure out, hey, did they want to start a business? Do they what do they want to do with this money? That’s their that’s going to be their choice. So my ultimate desire is to go. So this is like a kind of a separate list for me, but I want to play in the World Series of Poker, which is it’s a $10,000 buy in. And I don’t like I want to have enough money for. All the poker that I want to play. So, yes, I win money, but I also want to make sure that I am I have enough.
Andrea: [00:11:34] So my ultimate goal is to continue winning enough in poker and have my bankroll where I don’t have to personally pay $10,000 to go play in the World Series of Poker. So one of my desires is to build up a bankroll high enough to go play the World Series of Poker. But also my goal is to be able to, if I don’t win in poker, to be able to lose $4,000 a month playing poker, that doesn’t happen because I do win. But I want to be able to do that if I just I’m running bad for a while. Oh, Christmas in London, the I. And when I travel on family vacations with the kids, I bring my parents so that I know that’s going to probably be a $20 to $30000 trip. So if you have a big trip that you want to go on, make sure you have the roundabout cost and you can start planning for it. You can if you want to hire a travel planner, then you can make sure that you know the exact cost. This is my ultimate budget, you guys. This is not like my 2023 budget, not there yet, but getting there. I also want to be able to invest $100,000 per year in other businesses. So angel investing, that’s one thing that I want to get into eventually, and I want to be able to give friends, family 100,000.
Andrea: [00:12:53] That’s what I want to spend like maybe a $25,000 check here, $50,000 check here, whatever it is. I want to be able to do that. I want to acquire one rental property a year. So that’s going to probably be about $50,000 when it comes to acquiring that property. So I’m just kind of like spitballing here, just luxuries to think about like ultimate dreams and just don’t be afraid to dream come up with these budgets. And the thing is, when you come up with your ultimate budget. You’re going to total it up and come up with the. So you’re probably going to calculate it monthly and then come up with a total for each year. And you are going to be so surprised at that number every single time. People are so surprised because we come up with these huge audacious goals and normally it’s like, Oh, I need to make $1,000,000 next year. And then if you look at your actual budget for next year, it’s like. Where does that number come from? Because that actually is way more than what you need to fund your lifestyle. So I don’t want to say, hey, you don’t need to go make $1,000,000. But a lot of times people just come up with arbitrary numbers and I want this ultimate budget number to be something very practical for you to look at. Hey, actually, $1,000,000 isn’t my goal.
Andrea: [00:14:10] I don’t need to make $1,000,000. I can live lavishly, lavishly for less than $1,000,000. Or maybe it is more than a million, maybe it’s multi millions, and that’s perfectly fine. But many times we’re dreaming and we have these big dreams. Oh, I want to do this. I want to do this. But we don’t know the actual numbers. And then it’s we think it’s a lot farther than it really is. So I hope you go through this entire exercise. I know you’re going to love it just like I do. I literally do this quarterly. So I encourage you to do this. Now that we’re coming up to the end of 2023 or end of 2022 going into 2023, and you can figure out, hey, how far am I away from my dream budget? And you may realize you’re not you’re actually not that far away. And please share with me on Instagram. I want to hear about your dream budget. What is your how far are you like? Let me know. You’re actually really close and you’re realizing, Hey, I actually don’t need these huge audacious goals. Or maybe you do and you want to whatever you want. It’s perfectly fine if that’s what you desire. Yes. Please share with me. I want to hear. Was this helpful? All right, you guys have a wonderful weekend and I will see you next time. I am so excited to.
Andrea: [00:15:24] Share with you that from now until the end of the year, you can sign up for the Legalpreneur membership.
Andrea: [00:15:29] For almost half off. It is normally.
Andrea: [00:15:32] $349 a month or $3499 for the year, but from now until the end of 2022, you can sign up for $199 a month or $1999 for the year. You get all access to your own attorney, unlimited emails, 130 minute phone call, a month, document review, access to all of our contract templates, plus a discount on additional services. And once you get started, we get you rocking and rolling with a business audit, which is where we outline exactly what protection you currently have and what protections you still need. We lay it all out for you. That way you can get started working with your attorney, knowing exactly where your relationship is going. Get signed up. The link is in the show notes and we are so excited to serve you in the Legalpreneur membership. Here at Legalpreneur, we’re committed to providing a supportive legal community for all business owners. I know how scary the legal stuff can be. If you found this information helpful, I would be so grateful if you could share it with the fellow business owner. And quite frankly, it doesn’t cost anything to rate, review or subscribe to the show. Your support helps me reach more listeners, which allows me to support more business owners in their entrepreneurial journey. Have any questions or comments about the show? Feel free to drop me a line on Instagram. I promise. I read all of the messages and comments, and if you want to be a guest on the show or know someone that would make a great guest, simply fill out our application form and a team member will reach out if we think it’s a good fit. I’ll see you in the next episode.