The Only Two Budgets You’ll Ever Need: Top-Down vs Bottom-Up with Glen James

 

 Think budgeting is complicated? Glen James says there are only two types of budgets you’ll ever need  and knowing the difference could change your financial life.

In this episode of Get Rich, host Molly Benjamin sits down with Glen James, creator of the Glen James Spending Plan and host of the My Millennial Money podcast, to break down top-down vs bottom-up budgeting in a way that’s simple, practical, and actually works in real life.

Whether you’re living week-to-week, trying to pay off debt, or saving for your first home, you’ll learn:

• The two types of budgets explained and which one works best depending on your stage of life
  
• How the bottom-up budgeting method works and why it’s perfect for people with existing expenses and commitments
  
• How to set up a weekly spending plan that covers bills, goals, and fun money (without the guilt)
  
• The 4 levers to pull when your budget isn’t working -  including how to cut costs without feeling deprived
  
• Why habits matter more than spreadsheets when it comes to sticking to a budget long-term
  
• Common budgeting mistakes and myths and how to avoid them
  

If you’ve ever searched how to budget, top-down vs bottom-up budgeting, or how to create a spending plan, this episode will give you a clear framework you can start using today.
 

This episode is brought to you by InvestorKit, Australia’s #1 Buyers Agency for 2023 and 2024. They specialise in helping investors find high-growth properties utilising industry leading AI and data driven research process across Australia. 70%+ of the properties they purchase are off-market and they have consistently outperformed national average capital growth rates by over 49%. Whether you’re looking to build your property portfolio or secure your first investment. Check them out here.

 

CHAPTERS

00:00 – Welcome & Molly’s Origin Story
00:29 – Mission to Make Women Rich and Why It Matters for the Future
01:02 – Why Budgeting is the Foundation of Every Wealth Journey
01:15 – Introducing Glen James: Host, Creator & Money Educator
01:37 – The Two Types of Budgets You Actually Need to Know
02:05 – What We’ll Cover: Habits, Levers, and Real-Life Money Systems
02:25 – Guest Welcome & Cross-Conversation on Past Episodes
02:44 – Breaking Down Top-Down vs Bottom-Up Budgeting Approaches
03:36 – Why Glen Recommends Bottom-Up First for Everyday Australians
04:43 – Student Budgets vs Adult Budgets: Choosing the Right Fit
05:12 – Practical Example: Working with a $5,000 Monthly Budget
06:04 – Inside the Glen James Spending Plan and How It Works
07:34 – Weekly Pay-Yourself Method and Automating Your Money Flow
08:12 – Treating Goals Like Bills and Building Them Into Your Budget
08:19 – Smart Account Setup: Cash Hub, Weekly Spend & Emergency Fund
09:29 – Knowing the True Cost of Waking Up Each Morning
09:52 – Guardrails for Spenders and Permission for Savers
10:53 – Creating Realistic Systems Instead of Fantasy Budgets
12:05 – Success Story: From Hot Mess to First Homeowner in Four Years
13:11 – Choose Your Hard: Short-Term Sacrifice vs Long-Term Security
14:19 – Spending Plan vs Budget: Why Language and Framing Matters
16:14 – Adjusting for Rising Bills and Inflation in Real Time
16:39 – Subscription Cull: Finding Hidden Savings in Everyday Life
16:57 – The Four Levers of Budgeting: Income, Costs, Savings & Cuts
18:07 – Why Habits and Automation Matter More Than Willpower
19:41 – Understanding Savers vs Spenders and How to Work With Both
20:49 – Creating Systems That Balance Freedom and Financial Boundaries
21:11 – Preparing for Big Annual Bills and Planning Ahead with Cashflow
22:10 – Busting Budget Myths: You Don’t Need to Be “Good at Maths”
22:28 – Red Flag Patterns That Signal a Budget is Destined to Fail
23:19 – Readiness and Rock Bottom: When People Finally Take Action
24:17 – Time Excuses: How to Start Rough and Refine as You Go
24:59 – The First Step You Can Take in the Next 24 Hours
25:47 – The Give, Save, Spend Philosophy for Sustainable Wealth
26:16 – Automating Investments, Avoiding Consumer Debt & Staying Ahead
26:54 – Revisiting the Four Levers: Practical Ways to Pull Each One
27:21 – Cutting Entire Line Items and Simplifying Money Decisions
27:46 – Pulling the Right Levers for Your Own Financial Journey
28:27 – Final Reflections, Thank You & Key Takeaways
28:45 – Links, Resources & Where to Find Glen James

 

LINKS AND RESOURCES

Get the Glen James Spending Plan - free tool to set up your own budget
Sort Your Money Out (Book) - Glen’s bestselling book on personal finance

 

CONNECT WITH GLEN JAMES

Website: https://www.sortyourmoneyout.com/
Instagram: https://www.instagram.com/moneypodcast.aus/
LinkedIn:  https://www.linkedin.com/in/glenjames/
Podcast: money money money | Podcast on Spotify

 

CONNECT WITH LADIES FINANCE CLUB

Join our free Facebook group - Ladies Finance Club Money Chat
Website: https://www.ladiesfinanceclub.com/
Instagram: https://www.instagram.com/ladiesfinanceclub/
LinkedIn: https://www.linkedin.com/company/ladies-finance-club/

 

TAKEAWAYS

• There are only two types of budgets: top-down and bottom-up.
• The bottom-up approach is often easier for those with existing expenses.
• Realistic budgeting is crucial for success.
• Creating a flexible spending plan allows for better financial management.
• It's important to automate budgeting to remove emotional decision-making.
• Budgeting should be a living document that is regularly reviewed.
• You can increase income, decrease expenses, or cut costs to improve budgeting.
• Good financial habits can lead to long-term success.
• You don't have to be smart to manage money well.
• Being ready to change your financial habits is essential for success.

 

SOUND BITES

"There are only two types of budgets."
"You need to be realistic."
"You can actually cut something out completely."

 

TRANSCRIPT

[00:00:00] Molly: Welcome to Get Rich, the podcast that helps you do just that. Get rich and stay rich. Hey, I'm Molly Benjamin. I'm the founder of Ladies Finance Club, one of Australia's largest financial education platforms for women. But before I started helping thousands of women take control with their money, I was a hot financial mess when it came to my own finances and not the fun kind of hot, more like crying in a supermarket, wondering where all my money went kind of hot.

[00:00:29] But here's the thing, if I can go from financial mess to owning a share portfolio, investing in property, and building wealth. Then you can too. My mission is simple to make women rich because when we have financial freedom, we have choices, confidence, and control over our future. Every week on Get Rich, I sit down with some of the best experts in the industry to break down how we can all start investing, growing our money, and creating long-term financial security without the jargon, boring bits or overwhelm.

[00:01:02] Because when women get rich, we don't just change our lives. We change the world. So if you're ready to start making some smart money moves, hit that subscribe button and let's get Rich together.

[00:01:15] Hello and welcome back to another episode of Get Rich, the podcast that helps you do. Just that get rich and stay rich. Now, most people think budgeting is complicated, but Glen James says There's only two types of budgets you'll ever need. And in this episode of Get Rich Glen, who is the host of Money, money, money, and the creator of the Glen James spending plan.

[00:01:37] He joins me to break down the two different types of budgets, how to pick the right one for your life stage and the exact steps to create a weekly money system that actually works. I absolutely loved recording this episode because it was so practical. Now we're also gonna cover the four levers to fix a broken budget, why habits matter more than spreadsheets, and how to set up a plan that gives savers permission to spend and spenders the boundaries they need.

[00:02:05] And I can say that being a spender myself. Now, if you ever struggled to stick to a budget or felt like your money disappears before payday, this is the episode for you. And if you are enjoying it, why not hit that subscribe button? We will give you a little long distance. High five, and let's jump in. So Glenn, welcome to the podcast.

[00:02:25] We are very excited to have you on Get Rich. I believe it's the first time we've had you on the podcast.

[00:02:31] Glen: It is the first time and you'll have to come back on my show soon.

[00:02:35] Molly: Yes, would love to. I did a great episode with you on egg freezing. So guys, definitely go check that out if you haven't listened to it and that's something you are interested in.

[00:02:44] So Glen, you've said there are only two types of budgets, no matter what your age or stage of life. Can you give us the quick elevator pitch on what are those two?

[00:02:56] Glen: Yeah, so a top down budget is basically this is the income that comes in. We know the income that comes in, then we're going to spend it. Okay.

[00:03:07] So in a business sense, we look at the profit and loss statement. At the very top of the profit and loss statement is the income, the top, and then underneath, uh, the expenses. When it comes to a bottom up budget, we list out all our expenses. We add the expenses up and we say, oh crap, we've got $10,000 more of expenses than we've got income.

[00:03:30] So whatever way you wanna look at it, there is fundamentally a top down and bottom up.

[00:03:36] Molly: Great. And in your podcast, you mentioned that you tend to teach bottom up budgeting first. Can you maybe walk us through exactly how that works for someone who is brand new to budgeting world?

[00:03:49] Glen: Yes, and I would caveat it that both methods are fine.

[00:03:54] Mm-hmm. You've gotta just work out the one that suits you. The reason that I teach a bottom up first is. Because a lot of people that rock up into my financial hospital, you know, called my podcast or the Glen Dames spending plan, they're already going to have expenses in their life. They're going to have loan repayments, they're going to have rent, they're gonna have car repayments, they're going to have life.

[00:04:15] Molly: Mm-hmm.

[00:04:16] Glen: And it's easier to go, okay, well what are we working with? Let's just list out all our expenses.

[00:04:21] Molly: Mm.

[00:04:21] Glen: Then we can. Have a look at our income and see what's left over. Yeah. Hopefully there is some leftover and then we can optimize. When I teach the top down, I think that's a, if you are listening to this and you are still in school or university and you haven't fully committed to life, and it's an easier budget to do because you can be like, here's my income.

[00:04:43] Mm-hmm. And I'm going to allocate it this way and the leftover I'll spend. So I think it's easier to do the bottom up if you have an incumbent. Life with you and the Glen James spending plan, which is my free, uh, online course spending plan. It basically does it as a bottom up. I don't want to tell people overnight.

[00:05:04] No, you have to cut that. Or you have to cut this. Yes. I want to get them to get the systems in place and then we can optimize.

[00:05:12] Molly: And so let's say we're working with a budget of like a monthly budget of $5,000 with the bottom up approach. Have you, so with your spending plan that people can download and we'll put links into where people can get that and connect with you there.

[00:05:26] So will it go through like the different categories and how much you are currently spending in those different categories? Whether it's like, you know, how much you're paying for rent or mortgage, maybe like beauty, health, beauty is always a big one for the ladies and all those different categories. And then I use,

[00:05:40] Glen: I use ASAP Skincare.

[00:05:42] Thank you.

[00:05:43] Molly: Oh, spinny. I, I'm using like quite a cheap one at the moment 'cause I'm just like, I cannot do $70 on a foundation every few months. So then you pop in, you pop in all the numbers and that's when you're saying that's where you might have the surplus.

[00:06:01] Glen: Yeah. So I'll, um, I'll basically, I'll step back one step.

[00:06:04] So the way that I teach and there isn't the right or the best or the only way to have a spending plan or system. The one that is the best for you is the one that works and the one that you stick with.

[00:06:17] Molly: Yeah.

[00:06:17] Glen: Uh, but how I teach is effectively, it's a boring old spreadsheet and I tell people to upload it to Google Docs, so it's in the cloud or you know, your Microsoft account.

[00:06:27] The first tab, we just put incomes in, so we put, if you've got a partner, it could be your income and their income, and it allows you to put in the frequencies as well, because you might get paid fortnightly. Your partner might get paid monthly, vice versa, both monthly. Then the second tab, it literally just asks you everything that you spend.

[00:06:48] Mm-hmm. So there's a list as long as your arm of different expenses and you can put that in. And if you go to the, I dunno, make something of the council rates section

[00:06:57] Molly: Yeah.

[00:06:57] Glen: You can actually put in there whether you pay it annually, monthly, yearly. So it, it does all that. And then the third page, because I, I focus more on getting the budgeting behavior.

[00:07:09] Uh, down pat first rather than, you know, in the weeds and the details. What I kind of teach is regardless of whether you're getting paid weekly, fortnightly, or monthly, I want you to look at your system potentially and set it up. 'cause this is how I do it. So we pay ourselves weekly. Mm-hmm. So what that third page does, it effectively tells you how much to put into which account each week.

[00:07:34] Molly: Hmm. Okay. That's

[00:07:36] Glen: fundamentally. Looking at the top down budget and, uh, sorry, the bottom up budget. And then it will tell you a leftover amount and then it will say you have $100, $150, whatever that is leftover per week to allocate. And then you can allocate it to fun fishing fantasies. Anything that, anything that you want.

[00:07:58] Molly: And within this bottom up approach, are you treating your goals like Bill? So are you actually putting money away, maybe like money into your savings, money into your investment account? Are you doing that or are we using the surplus as that?

[00:08:12] Glen: Yeah, so the way I've set this up is I want you to set up maybe three or four bank accounts.

[00:08:19] The first bank account is what I call the cash hub. So all income goes into the cash hub. Then I want you to set up an emergency fund account, and then I want you to set up an account that is for gifts, close holidays and Christmas. Mm-hmm. And basically when I get people to do the bottom up budget, I only ask them to put in minimum loan repayments minimum.

[00:08:42] Whatever. No savings. So we're not doing saving, we're just doing expenses. We're putting an amount that we think for close gifts, holidays throughout the year. Mm-hmm. And then there's another account that I want you to set up with a different bank account or a different bank completely. Mm-hmm. So you can transfer yourself an amount over each week automatically,

[00:09:01] Molly: just

[00:09:02] Glen: for food going out Petrol.

[00:09:06] Just your day on day stuff, and that's a weekly payment, and then the amount that we've got left, then we can choose to allocate that to future goals. To investing. Mm-hmm. To paying off debt, to build up an emergency fund, because it gets to the point where it shows you, and we've all got this amount and this figure, how much does it cost?

[00:09:29] For me to wake up of the morning.

[00:09:31] Molly: And what advice do you have? 'cause we get this a lot with some of our ladies. They do the sneaky, oh, I've run out of my allocation for the week. I'm just gonna pop into the other account, move some money across, maybe a little bit more into that fun money account. What kind of advice do you have for people who may be struggling with that?

[00:09:52] Glen: I'm Glenn. I'm a recovering spender. I get it. So the number one thing is we have to have a system that's realistic to start with. So if someone's running out of their weekly spend about each week, are you being realistic? Are you living in fantasy land? And we need to live in reality to start with. And if you are new to budgeting, I don't mind if you.

[00:10:13] If overshoot the runway a little bit and, 'cause ultimately I've got my weekly spend account set up. I pay myself weekly on a Wednesday from my cash hub. Mm-hmm. That's where the bank, where my, where my mortgages are.

[00:10:25] Molly: Yeah.

[00:10:26] Glen: Then my, uh, weekly spend account that's with, with another bank. I don't have the mortgage app on my phone.

[00:10:33] I can't put my finger in and grab money. The way I've kind of got mine set up, by the time Wednesday evening comes, I usually have 20 or $30 left.

[00:10:43] Molly: Oh wow. On

[00:10:43] Glen: Wednesday night, the money comes back. So I would say if you're just getting started, be a bit realistic. Have a little bit more. Mm-hmm. If you are one that's putting your fingers in the pot.

[00:10:53] You probably don't have a system that is realistic. Yeah. You might have access to the money, so you see it and you want it. You might not be setting up where you're paying yourself weekly. You may need to pay yourself weekly on a Friday, not a Wednesday. So in my life, if I have a big weekend and there's some extra cafe money or you go out and, oh, I didn't think I'd spend $40 on go-karting, or whatever that is.

[00:11:19] Yeah. I'm quite happy to have cereal for dinner on Tuesday night if I've got no food.

[00:11:24] Molly: Mm-hmm. Okay. So

[00:11:25] Glen: I think there's a, there's a number of things, but you just need to make sure, we need to get you into the habit first of having a system. Mm-hmm. Even if you are spending a little bit too much, but we just, because the system, you know, I had someone write into me and say, oh, Glen, my cash hub's running out of money all the time.

[00:11:44] I'm like, are you getting money out for stuff that's not allocated? And I'm like, yeah. I'm like, well, that's why

[00:11:50] Molly: needs to be in it.

[00:11:51] Glen: Yeah. So I think it's just you need to be realistic.

[00:11:55] Molly: Yeah, definitely. And I guess with this account as well, you've got so many success stories of people who've used your system.

[00:12:05] Is there anyone that kind of stands out with someone who might have like gone from a bit of a hot financial mess to like they got their shit together?

[00:12:14] Glen: Yeah, there actually was one. Her name's Mel. She lives in Brisbane. Yeah. She actually wrote in and said to me, Glen, I've, I use your spending plan. And this is the thing that a lot of people don't see.

[00:12:26] Right. So fast forward, she bought a house with her partner.

[00:12:30] Molly: Yeah.

[00:12:31] Glen: But rewind, four years ago, they were living week on week. They had debt. They didn't have a system, they didn't have savings. And she said, by being encouraged with your podcast weekly, by doing the Glen James spending plan.

[00:12:45] Molly: Yeah.

[00:12:46] Glen: It was actually got us to the the point where we could buy our first home.

[00:12:50] Molly: Amazing.

[00:12:51] Glen: And it doesn't like it's hard to save money.

[00:12:54] Molly: Mm. It's

[00:12:54] Glen: hard to buy a house. It's so hard. But I think in life we have to pick the hard that we want.

[00:13:00] Molly: Yeah.

[00:13:01] Glen: It's hard living week on week, spending all our money and not having enough. Yeah. It's also hard to save. What hard do you want both of these hards?

[00:13:09] Have some type of sacrifice.

[00:13:11] Molly: Yeah.

[00:13:12] Glen: The hard of saving up to buy a home, it's the sacrifice of maybe I can't go out that extra bit on a Saturday night, or maybe I can't do rounds of drinks. The hard on the living week on week is you are not building good financial habits and a strong financial future.

[00:13:30] Molly: Yeah. And hard to get ahead. I love that. There's always gonna be a hard, so choose your hard. I know which one I would be choosing, the one that benefits me in the future. And I love that you've broken it down a week by week. 'cause another thing is like maybe we need to start teaching the Glen J system because so many welcome

[00:13:47] Glen: to use it.

[00:13:48] And thank you. Make it pretty and pink. Ah. And call it the Molly. Benjamin?

[00:13:52] Molly: No, we'll call it a Glen James. Uh, sorry. Yeah. Glen James. Um, spending plan for sure. But it's, it seems like such a great system and I love the week by week. 'cause so many people go, oh my God, I just can't budge month by month. And I'm like, do it week by week.

[00:14:06] And they're like, oh. Like didn't know that was an option. And I think with a budget, guys, it's your budget. You know? You get to decide. You get to be your own accountant. When I say that, I get that. That doesn't excite some people. You get to be your own accountant.

[00:14:19] Glen: I don't have a budget in my life. I've got a spending plan.

[00:14:22] Yeah. So I think we need to take the scariness out of it. Like I don't exercise each week. I play pickleball a couple of times each week.

[00:14:31] Molly: Yeah.

[00:14:31] Glen: You, you know what I mean? I just think. And there is like, there are people that will be listening who run what we call a zero based budget.

[00:14:39] Molly: Yeah. Where

[00:14:39] Glen: they allocate every single dollar.

[00:14:41] Yeah. That ain't me. Life too short.

[00:14:44] Molly: Yeah.

[00:14:45] Glen: But by having a spending plan. It does two things, and particularly the one that I did because I developed it after coaching like hundreds of people face to face. Yeah. When I used to be a financial advisor. Yeah. 'cause they would come in and say, oh Glen, we need financial advice.

[00:15:00] Like, no, you don't. You need to frigging stop spending more learn and have some type of planning place. What it does, the savers having a structured spending plan. Mm-hmm. It gives the savers permission to spend guilt.

[00:15:13] Molly: Yeah.

[00:15:14] Glen: It gives the spenders. Some guardrails.

[00:15:18] Molly: Mm, some boundaries. Mm. And

[00:15:20] Glen: if you want to pay rise in your life and you have not done a a detailed spending plan for a while, give yourself a pay rise tonight.

[00:15:27] And I honestly tell people, if you set up the system, particularly that I use, or a system within three pay cycles, financial stress will be gone from your life.

[00:15:37] Molly: Yeah. And how often, like this is a living, breathing document. Yes. How often do you like Glen, review yours?

[00:15:46] Glen: Yeah, so what I do, like I've just had my incoming insurance renewal come through.

[00:15:51] So when I get the bulk bills come in, I'll go in and update that spreadsheet mm-hmm. And optimize.

[00:15:57] Molly: Yeah.

[00:15:58] Glen: So as we, it, it is a moving document. Mm-hmm. So. If you are, hopefully over time your salary increases with inflation, but the money's gotta come from somewhere. Yeah. So if I go, oh crap, my car insurance is an extra $200 this year.

[00:16:14] Yeah. I need to allocate that into the spending plan, that means it's a couple of dollars a week. That's gotta come from somewhere. Yeah. So it needs to either come from my weekly spending. Or my savings, or I say I'm getting rid of the 15 subscriptions that I've got and going back just to have Netflix and Stan or whatever.

[00:16:35] Yeah. Um, I've done a big subscription cold in my own life recently.

[00:16:39] Molly: Yeah. I'm, um, I'm just trying to use my family's subscriptions.

[00:16:43] Glen: Yeah.

[00:16:43] Molly: But on the parents', Netflix,

[00:16:45] Glen: Molly, there's only some levers that you can put Yeah. In your budget. Like there's literally four levers. Yeah. I will try and remember 'cause it's been a while since I've got them from the back archives of my brain.

[00:16:57] Molly: Yeah.

[00:16:58] Glen: The first lever that you can pull is increase your income. It could be, I am gonna apply for this extra role at work and get a pay rise. So there's the income lever?

[00:17:10] Molly: Yeah,

[00:17:10] Glen: there's the lever of, um. Decrease expenses.

[00:17:15] Molly: Yeah.

[00:17:15] Glen: Which is, okay, well I'm gonna color all my subscriptions.

[00:17:19] Molly: Mm-hmm.

[00:17:20] Glen: Another lever is you keep the status quo.

[00:17:23] So we keep the income, we keep the expenses there, but we decrease our savings for our goals. Yeah. So that's another lever as well. Mm-hmm. And the fourth one, it's in my book. Sort Your Money Out. I forget it right now. Haven't

[00:17:36] Molly: Go check out the

[00:17:37] Glen: book just to, you know what, Molly, you have encouraged me, my friend.

[00:17:41] I have not done a budget one-on-one episode on my podcast for a long time, and I need to do that because I love this stuff.

[00:17:48] Molly: Yeah, and it's so helpful because I'll speak to people and they'll have their, you know, they'll be investing, they might have a property and their budget is just all over the show, and they're feeling really stressed out, and it's like, I would say majority, it's very rare I come across people who are like, oh yeah, I've got a great system.

[00:18:07] Works super well. Like there's just there. There seems to be a lot of confusion, which is what I'm loving about this episode. It's so simple and I know human behavior. We talked a little bit before, but like why do habits matter so much when it comes to budging success? '

[00:18:22] Glen: cause it removes you from the equation.

[00:18:24] Mm-hmm. And it automates it. So the problem I've got the biggest financial issue that I've ever had in my life, and also the biggest financial success I've had in my life is due to the person that's in my mirror.

[00:18:38] Molly: Mm-hmm.

[00:18:39] Glen: And if I can control that chunk of meat, that bag of chemicals, that

[00:18:47] Molly: pile of flesh, let's come next.

[00:18:49] Glen: Yeah. If I can control that thing. In my mirror. Mm-hmm. I'll be financially successful. But I think you really need to understand your natural proclivity and or proclivity, whatever that word is. So for me, I'm naturally a spender.

[00:19:08] Molly: Mm-hmm. Me too.

[00:19:09] Glen: So I need the guardrails. Mm-hmm. I really need them. And by having an automated plan, I just know I've transferred a few hundred bucks, whatever that is a week.

[00:19:20] Molly: Yeah.

[00:19:20] Glen: Into my. Spending weekly account. I don't have to use my brain like, I'm sorry, writing down. I spent $5 80 on a coffee that is under the life's too short column for me. Yeah. But there are people that are listening who are savers, who are detailed. They're engineers, they're actuaries. They're IT people.

[00:19:41] Yeah. They're teacher teachers. They need that perfection. Mm-hmm. You can have that, but both things come with a sentence or a statement called at what cost?

[00:19:51] Molly: Yeah.

[00:19:52] Glen: So for me, at what cost is, I might not be optimizing as much as I could because I might be a bit sloppy on the other side. Being perfect at what cost?

[00:20:03] Well, you might not be actually living life.

[00:20:06] Molly: You might

[00:20:07] Glen: be, you know, chill out a bit. Yeah, spend a bit, enjoy life. So. I think it's knowing what you are, how you operate.

[00:20:14] Molly: Yeah. And

[00:20:15] Glen: having a system that allows you to flourish financially.

[00:20:18] Molly: Yeah, so true. And it, I think it's so interesting. I'll, I speak to such a range of women and some of them have great relationships with money.

[00:20:25] Some of them are really good with money, but they're not enjoying life. I'm like, when's the last time you went on a holiday? They're like, oh, got no money for that. I'm like, yes you do. Like, yeah, you don't wanna, um, be too. Too restricted. And that's why I love like this budget. It allows those natural savers, which I've never been, so I find it hard to associate, but it allows them to actually spend without the guilt.

[00:20:49] And it allows the spenders to save without the, yeah. Guilt, the with the boundaries. And just remind me again 'cause it was just a little question that came up. So when you do have, and not an emergency, 'cause obviously that's what the emergency funds for, but when you do have like that big council bill, the big car insurance, does that come out of an account or do you just allocate more money for that month?

[00:21:11] Glen: No. So what I do, I allocate the cash hub money will accrue mm-hmm. For bills throughout the year.

[00:21:17] Molly: Ah, yeah.

[00:21:18] Glen: And then we get to our, we get to the stage financially. Where we can pay all our bills annually. Yeah. Because I know your car insurance will be cheaper if you paid annually. All these things. The only, actually, I still pay my health insurance fortnightly.

[00:21:32] Mm-hmm. Because you don't save money for paying it yearly with Bupa, who I'm with. Yeah. So I'm like, oh, cashflow that.

[00:21:37] Molly: Yeah.

[00:21:38] Glen: And so you want to make an allowance, so Yeah, I might need ties on my car. We'll call it four 50 a year or something like that. Or servicing. We just need to get a system happening and moving.

[00:21:50] Molly: Yeah. And we've covered the four levers, which is great. Will and the fourth one we've covered three. Three, but um,

[00:21:55] Glen: and I don't even have a copy of my book to fact check myself.

[00:21:59] Molly: That's okay. Well, um, people can, you know, go out and buy a book to get the fourth one. But I guess what is a budgeting myth that you would love to bust?

[00:22:08] Like once and for all?

[00:22:10] Glen: You don't have to be smart to be good with money.

[00:22:12] Molly: Mm-hmm.

[00:22:13] Glen: Yeah, it was simple as that. Like. I'm just left of a doormat and I survive.

[00:22:20] Molly: And I guess, are there any red flag habits or patterns you see that you are like, yeah, that budget is gonna fail?

[00:22:28] Glen: Yeah, I, I think it does go back to you running out of money week on week.

[00:22:32] Yeah. Which is okay, you've categorically are spending too much, you need to chill the F out. And that's like, it's hard, like, you know, if you are not shielding the F out.

[00:22:43] Molly: Yeah.

[00:22:44] Glen: Like, you know, if you're spending too much

[00:22:45] Molly: Yeah.

[00:22:46] Glen: Now, if that's the case, how can you challenge yourself to say, oh, I'm just going to get one coffee of a morning at work.

[00:22:56] That's it.

[00:22:56] Molly: Yeah.

[00:22:57] Glen: Or I'm going to pack my lunch and buy lunch on Thursdays and Fridays only. Yeah, whatever that is. So there is that systematic thing, you know, you're fast and loose. And then secondly, if you are running out of money. Is your budget seated or seated, whatever that is in reality. Yeah. Now, so they're just a couple of symptoms.

[00:23:19] Sometimes we can also, I dunno. I would say you only really want to do any of these systems and get outta consumer debt and do all that stuff. Yeah. If you are ready and you are. It's that rock bottom thing.

[00:23:34] Molly: Yeah.

[00:23:34] Glen: Because a lot of people, they'll pay off their credit cards, they'll pay off their personal loans and all that.

[00:23:39] Yay, I'm debt free. Mm-hmm. Oh, I now can afford that other $200 a week, and they run back into debt.

[00:23:44] Molly: Yeah. So

[00:23:45] Glen: you need to be at rock bottom. Otherwise don't waste your time doing all this crap, you know? And try my system. Try Molly's system. Yeah. If it doesn't work, you can always go back to your system. But I know mine's had thousands and thousands of people complete it.

[00:23:59] Molly: Yeah. That's awesome. And if someone, 'cause again, like people are like, I just don't have time to do it. I'm so busy and I get that we we're all busy, but we've gotta make this a priority. If someone's sitting down to do this, like for the first time, realistically, how long do you actually think it would take them?

[00:24:17] Glen: What I would say is when you do the Glen James spending plan, or your budget, if you don't know the number, just guess for now, let's just get a straw man or steal whatever they say. Like, just to get a, a skeleton up. Yeah. And like, okay. I think, oh, he is my car re 900 or is it eight 50? Hell, let's put a thousand.

[00:24:36] Yeah. Get it going and then we'll come back and review. Because once we get the system in place, yeah, we try it for a few pay cycles, then we can start to optimize.

[00:24:45] Molly: Yeah, that's such good advice. And I guess for my final question, if someone's listening today, they don't have a budget, what is that very, very first step they can take in the next 24 hours?

[00:24:59] Glen: Ooh. Resolve within themselves that they actually want to make a change to their money.

[00:25:06] Molly: Yeah.

[00:25:06] Glen: Or they're happy just living loose and free. What I would say is, if you rock up and you've listened to this episode over the next 24 hours, I want you to just think is what is happening in my financial life?

[00:25:22] Working? Mm-hmm. Yes or no? Yep. Now, if the answer's no, do you want to change? If you can decide over the next 24 hours that you're happy or not happy with your financial situation, knock yourself out. And I was actually gonna say before Molly, overall my financial plan in my personal life is give some, save some, spend some in that order.

[00:25:47] Now the give some charitable giving and all that. Save some that's investing for future me. Mm-hmm. And then kind of spend the rest.

[00:25:54] Molly: Yeah,

[00:25:55] Glen: you could in theory. Salary sacrifice to superannuation. Mm-hmm. So above your employer contribution or automate X amount per month to investments. Mm-hmm. Be it an investment property and you have the mortgage on principle and interest share investing account, all that automated.

[00:26:16] And if you had no real budget or system but kept out of consumer debt, you. We'll still be okay financially.

[00:26:25] Molly: Yeah.

[00:26:26] Glen: Because we're keeping outta consumer debt. We don't have a system. We're sloppy.

[00:26:29] Molly: Yeah.

[00:26:30] Glen: But at least we know when we all rock up, we've spent less than what we've earned. Yeah. And we've invested the rest.

[00:26:36] Now, that's fun to say on a podcast, but the reality is sure, you might be fine, but you might still be overspending anyway. Yeah. Probably need to optimize now the four levers, increased income, we talked about that. Decrease savings. So we can do that.

[00:26:54] Molly: Yeah.

[00:26:54] Glen: The third one will be to reduce costs.

[00:26:57] Molly: Mm-hmm.

[00:26:58] Glen: So we look at a line item.

[00:27:00] Molly: Yeah.

[00:27:01] Glen: And for me, I've done this recently, subscriptions. I had flipping Apple Music, Spotify.

[00:27:07] Molly: Yeah.

[00:27:08] Glen: I literally had eight. I was already paying for YouTube. I'm like, stuff this, I'm going to YouTube music.

[00:27:12] Molly: Yeah.

[00:27:12] Glen: So I stopped, apple, stopped Spotify. Yep. So I've, I've reduced costs. Yeah. In that line item, the next lever.

[00:27:21] You can actually cut something out completely.

[00:27:24] Molly: Mm-hmm.

[00:27:25] Glen: So I'm cutting all subscriptions. I'm just using YouTube for free. I'm using SBS Yeah. App. I'm using ivu. I'm using Uncle. Yeah. Bruce's flip, Netflix, whatever. And if you can do all, if you can do the first one, increase income, reduce costs, and cut something out, we won't need to decrease savings.

[00:27:44] Mm-hmm.

[00:27:46] Molly: Great. I love that. And you know, I love as well, how you said ultimately it comes down to if you're ready to do this or not, because that's like, I see people who are like, I'm like, they're gonna change. Absolutely. They're so determined. And for me, I definitely hit that rock bottom moment. I hit that rock bottom moment in a supermarket in London where I was like, I can't afford jam.

[00:28:07] This is a real low point. Since I'm working this in a corporate job. But yeah, I absolutely love that. Like you've gotta be ready. And I speak to women, I'm like, they're ready. They're gonna do this. Yeah. But I think having a really simple system in place to follow, having that weekly amount, these are just gonna help you so much.

[00:28:27] So we'll definitely pop all the links in. And I just wanna say, Glen, thank you so much. This has been such an amazing episode.

[00:28:34] Glen: My pleasure. And we'll have you on Money, money, money very soon.

[00:28:38] Molly: Awesome, and we'll pop all the links to where you can find the Glen James spending plan and more from Glen in the show notes.

[00:28:45] All right, thanks guys.

 

KEYWORDS

budgeting, financial planning, spending plan, top-down budgeting, bottom-up budgeting, financial habits, budgeting myths, personal finance, money management, budgeting success