Join us today for an episode about the reason you may want to focus on income or expenses in a budget...
Today's episode is focused on when to focus on income and when to focus on expenses...
In today’s episode about developing your influence through stewarding your treasures, I talk with you about which should you focus on income or expenses, why you may want to look at one over the other, and how to really find long term success.
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00:00:00 Thanks for joining me on episode 630 of the inspired stewardship pod Cast. I'm Dow Tippett, author of seven daily choices. I challenge you to invest in yourself, invest in others, develop your influence and impact the world by using your time, your talent and your treasures to live out your colleagues. Having the ability to make the right choices every day is key.
00:00:25 And one way to be inspired to do that is to listen to this, the inspired stewardship podcast with my friend, Scott Mader, You're going to find it hard to do it because you're going to feel guilty. You're going to feel stressed out. You're going to feel angry about it. That's why you have to look at both sides. That's why you have to think about this in a more balanced way.
00:00:55 It's not about income or expenses. It's about the balance between the two that allows you to really succeed with your money over the long term. Welcome, and thank you for joining us on the inspired stewardship podcast. If you truly desire to become the person who God wants you to be, then you must learn to use your time, your talent and your treasures for your true calling in the inspired stewardship podcast,
00:01:23 who will learn to invest in yourself, invest in others and develop your influence so that you can impact the world.
00:01:54 As we talk about stewarding your treasures, wouldn't it be great. If you could support this podcast and do it without costing yourself an extra dime, it turns out you can't. All you have to do is use inspired stewardship.com/amazon. When you're ready to make a purchase via Amazon and a small commission, we'll come back to support the show. If you enjoy the show,
00:02:17 when you're ready to buy from Amazon, just use inspired stewardship.com/amazon. When talking about budgets, we're talking about spending plans when you're looking at what you make and what you spend, and you're trying to prioritize things and make a plan that works month in and month out. One of the things that I've seen people struggle with is this idea of which is more important income or expenses.
00:02:46 Should I focus all of my energy on making more? Or should I cut my expenses? What should I do first? Which is more important, which should I focus on? And of course the truth is the answer to that question is pretty much always yes, to some degree you should focus on both. It really is both sides of the equation. You've heard about things like the latte factor.
00:03:12 If you just take $5 that you would have spent in Starbucks each and every day, and you put it in an account, then you'll retire a multimillionaire or whatever the magic formula is. And it's not false. It's not an incorrect statement from a math perspective, but the real truth is the reason that that's important is because it's about showing sustained consistent, small behaviors can come pound and last and expand to big changes.
00:03:44 The same thing can happen on the income side. If you focus on finding ways to increase your income, just a small amount each and every day, that compounds over time. But here's the problem. A lot of times when people focus on the income side of the equation, they're thinking about making more money so that they can spend more money. And in fact,
00:04:07 I've seen time and time again, where people spending actually increases faster than their income does. And so they end up in a situation where they're constantly overspending their income because they haven't focused on the underlying behaviors. They haven't thought about what are my habits that I'm doing? What am I spending my money on? What are my priorities? What are my values?
00:04:32 See, here's the interesting thing. You can think about a budget as, what do I want to eliminate, but you could also think about a budget as starting with a blank slate and what do I want to allow onto it? What do I want to add? And when you think about expenses, I like to, instead of thinking about cutting expenses,
00:04:51 I like to think about what, what do I value? What's important to me? What do I want to actually allow into my life and spend money on those things? Go on the budget first. So if savings first, a particular goal is important to me. Like maybe you're trying to save for a house that goes onto the budget. First. Giving's important that goes on the budget first.
00:05:15 This is why food should be paid before certain other things, because it becomes more important on your list. So this kind of decision making is a way of looking at your expenses in a different way. Usually when I hear about people talking about focusing on expenses, it's because they want to cut their expenses so that they can actually save some money, build up an emergency fund,
00:05:43 these sorts of things. So when is it important to look at one over the other? Well, first off, if your income is particularly low for the area of the country you live in, you're definitely going to want to pay attention to income, but usually increasing your income as a slower, more drawn out process, you can make rapid changes in your budget by identifying the things that are vital to you that are the absolute most important,
00:06:12 allowing those under the budget and cutting everything else out, saying no to things that aren't as important. That's the looking at expenses part. It often allows you to make faster changes while income tends to be slower, but not always. You might be able to sell some things to break a, a log jam situation and free up some money. You might be able to get a side job or a side hustle for a period of time and grow that over time.
00:06:39 But again, incomes usually slower. So expenses as if you need to make a rapid change, because something there's a crisis, there's an emergency something's changed in your situation. But the truth is to really find longterm success with your money. You have to pay attention to both sides of the equation. If all you do is constantly focus on income and making more money,
00:07:05 but you allow your spending and your behavior to change over time. On the other side of the equation, you're never going to have any money left. And by the same token, if all you do is pay attention to cutting expenses, to always eliminating things, then you're really going to be frustrated and miserly. And when you do have money and it's time to go ahead and spend some money on an experience or on something that's important to you,
00:07:32 you're going to find it hard to do it because you're going to feel guilty. You're going to feel stressed out. You're going to feel angry about it. That's why you have to look at both sides. That's why you have to think about this in a more balanced way. It's not about income or expenses. It's about the balance between the two that allows you to really succeed with your money over the long term.
00:07:57 Thanks for listening. Thanks so much for listening to the inspired stewardship podcast. As a subscriber and listener, we challenge you to not just sit back and passively listen, but act on what you've heard and find a way to live your calling. If you like this episode on the stewardship of treasures, you can sign up for our treasures tips by going to inspired stewardship.com/treasures
00:08:34 or text in the U S four four two two two treasures tips. And we'll send you five weeks of our best tips on stewarding your treasures until next time, invest your time, your talent and your treasures, develop your influence and impact the world.
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In today's episode, I talk with you about:
If you want to live a life that matters, don’t start when you get good; start now so you become good. – John C Maxwell
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