BOU talks Budgeting with David Weliver from

Can you give us a snapshot of your background and maybe your bio and what you’re doing these days?

My website is and I’ve been publishing it consistently for about four years now, starting in 2006.  What kind of lead about to this is, throughout college and right after college, I was terrible with money. I racked up a ton of credit card debt, just spent money on whatever I wanted to and had no sense of a budget or sense of the consequences of spending like I was.

Ironically, despite the fact that I was doing all that, my first job out of college ended up being at Smart Money magazine.  I worked there for a little over a year as an editorial assistant and actually had a lot of hands-on experience writing stories, interviewing financial professionals and writing stories about financial advice.

Meanwhile, my finances were a wreck.  And once I realized I couldn’t sustain myself on a journalist salary with all the debt that I had racked up, I left there and did some other things for a couple of years.  As I started to learn lessons about my past behavior about money, I decided I would start a blog to write about both my progress reversing my financial situation but also using some of the stuff I learned working for the magazine.

I figured that a lot of the magazines out there, like Smart Money, are writing for a totally different audience and I wanted to reach people that were my age, which was 25 at the time.  People in there 20s, people just starting out, people who may be making the same mistakes because for whatever reason they got off on the wrong foot and they want to do better and they want to turn things around and get a good financial start.  So that’s why I started the blog.  I’ve been doing it for about four years and it’s almost a full-time job to run the blog, but I also have a full-time job at a software company as kind of their web and marketing guy, so I juggle those two things.

How has been able to provide a passive income for you?

You know, there are a lot of really good, really dedicated bloggers out there, both in the financial field and just in general.  And I’ve been really lucky: (1) to have the following I have and (2) also develop it into a passive income stream that’s been instrumental in accelerating my own financial goals but also is hopefully laying the groundwork to do this full-time, I mean that is a goal of mine.

I think I’ve chosen to keep doing full-time work in addition to the blog for a number of reasons.  As I’ve learned financial lessons and written about them on the blog, a lot of “what I preach” if you will (although I try not to preach) is laying the groundwork for financial stability and independence and security.  And part of that is: if you make a big decision like going and becoming an entrepreneur or taking some risks, making sure you have some foundation, something to fall back on.  So for me, I’ve considered going full-time many times but haven’t done it because I want to be a little bit more secure before I do that, like have some savings above and beyond what might ordinarily be considered a good place to be.  And I’m working on some projects that I want to see through in my other professional life as well, so there’s a lot of potential opportunity down the road, which is exciting but I’m just being a very busy man for the moment.

As we start off in the New Year, what are some thoughts you may have for people that are kind of in your demographic – maybe they’ve got a little debt, maybe their trying to get out of debt – how should they be trying to get ahead?

Budgeting is a huge topic this time of year with the New Year coming around and whatever your financial resolutions are, it’s hard to achieve any financial goals if you don’t have a plan to get there and track your progress.  And that’s exactly what a budge does for you.

The problem I’ve always had with budgets is that I kind of equate it to counting calories, you know, if you’re trying to lose weight.  In order to make sure that you’re eating less then you’re burning on a daily basis, you need to count every calorie, right?  The same thing with budgeting, in order to see that you’re on track to spend less than you bring in every month and pay down debt or save more or whatever your goal is, you need to track every dollar and at the end of the month know that you spent $500 less than you earned and you could put that towards your debt or what not.

In theory that sounds great, but in practice, who has time to sit there and record every transaction that they do, whether that’s on a piece of paper or whether that’s on a spreadsheet, and then sit there for a couple of hours at the end of the month to go over everything – we may do it around the New Year when we set our goals, but just like counting calories and just like going to the gym, it is so easy to just stop.  So one of the things that’s been instrumental for me in terms of sticking to a budget and tracking my spending has been online budgeting tools.

What budgeting tools do for you is they add all your bank accounts and all your credit cards and aggregate them securely online, so in one place you can see several months of your spending.  What I like about it is it automates the tracking process so you don’t have to write everything down except for maybe the cash you spend on a daily basis here and there.  And it doesn’t lie, you can’t forget anything, it’s all right there and so you can see very quickly where your money’s going.  Get some sort of system in place that’ll do most of the work for you and the more you can rely on that, the better I think you’ll do.

What are some take-away points that people don’t really consider when it comes to budgeting and creating their financial map?

I’ve always been a big fan of focusing on the big things, so rather than worrying about if you’re spending money on coffee everyday or lunches out – those are often the first places we hear financial experts talk about cutting because they are so easy to cut.  It’s easy to stand here and tell someone they shouldn’t buy coffee or eat out everyday, but if that’s a part of your routine, if that’s a habit, if that’s what gets you through the day, it’s a lot harder to look at the $30-$50 a month that that’s costing you and give that up.  So maybe don’t focus on that if that’s important to you.

Instead, focus on big things that you’re spending money on and try to find a way to cut the big things.  For example, for most people, their biggest expense is their housing.  So if there’s a way that you can take on a roommate or if there’s a way that you can move to a slightly smaller place, if you have good credit and you’re in a mortgage you got several years ago at a higher rate, you can refinance to get that rate down.  Those are some big savings.  They take more work obviously to implement, but if you can make them, they can save you $100, $200, $300 a month making that one change rather than cutting out coffee, which is a tough thing for you – it might really be hard to give up that $2 coffee a day and it’ll only save you $50 a month.  Same thing with cars and transportation, which tends to be people’s second biggest expense – see if there’s a way that you could drive less, see if there’s a way you can downsize your car.

Obviously these aren’t going to work for everybody, but if you think about your financial picture and identify any one or two really big ways to save, you can focus your energy on doing those one or two things and save a lot of money and not have to worry about making all the other changes.

When you put together a savings plan, do you do a bucket system – savings, retirement, excess spending, vacation money, etc.?

I’m a big fan of creating buckets, or sub-accounts if you will, and I’ve created my savings account and have had it for about five years with ING Direct, which is really cool because they allow to actually very quickly create sub-accounts in your main savings account for things like: my categories are, beyond my emergency fund, which is just that rainy day fund should big things break around the house or God forbid we lose a source of income and need to supplement our monthly income, that’s there for that; and then we have a home improvement fund and a vacation fund under that; and then obviously retirement accounts.  That’s where I’m focusing right now.

What I recommend (people do what I’ve written about on my blog and will be writing about more this year) is, in terms of prioritizing, people should focus first on having a little bit of a buffer so they’re not living paycheck to paycheck, even if they have credit card debt or other debts they want to get rid of.  If they don’t have any cash savings in a savings account, you want $500, $800, $1000 in a little buffer fund.  And then you want to focus on paying off any credit card debt, making sure those balances are zeroed out so you’re not paying ridiculous interest on debt.  And then from there, build out a longer emergency fund, then fund your retirement accounts, and then focus on other savings’ goals.  So that’s my strategy.

What about reaching those long-term goals like vacations, cars, electronics, etc.?

For vacations and home improvements, I’ve created separate accounts for them, and I’m probably going to do the same for a car because I’m thinking that a new car is going to be in the picture in a couple of years.  I do create separate accounts for that.  Smaller things like a TV that are bigger items but not as big as a vacation or a car, I would probably just budget for a couple of months in advance and say, “Okay, I’m leaving this extra amount in my checking account so that when I go out and buy the car, it’ll be there.”  It would be just as easy to create the extra sub-account, but I haven’t personally done that.

Do you have any tips on sticking on budget and realizing your goals?

With any resolution, whether it’s financial or exercise related or professional goal related, the hardest part is sticking to your plan.  It’s easy at the first of the year to say, “I want to lose 20 pounds,” “I want to save $5000 this year,” and then how quickly that all goes away.

So the two things I found that really worked for me – and I can’t take credit for either of them because if you read any book on goal setting or making self-improvements, it kind of comes down to this so it’s out there, but if you really practice it, it’s really worked for me – and those two things are setting a time: maybe every month or every couple of weeks, you’re going to sit down and look at and revise your plan.

What I’ve done is I’ve used the Google calendar and I’ve set a reminder for myself at the end of every month to do this for an hour.  Take out a piece of paper, wherever you’ve written it down, and say, “Okay, of my financial goals, this is what I want to do by the year’s end and here’s what I’ve done this month.”  And sometimes you’ll find that you had months that have gone by and you’ll say, “Damn it, I really didn’t do very well this month.”  And then you’ll have months you’ll say, “Okay, yeah, I’ve been really on track.  This is great.  I’ve got momentum to go into next month.”  But either way, you’re forced to sit down and think about it.

And that goes along with the second piece of advice that I would give people and that is to find a way to visualize what your goal means to you and find a way to remind yourself of that on an even more regular basis, even daily basis.  So if you want to pay cash for a really amazing vacation, put a picture up of where you want to go on your cubicle wall.  If you want to get out of credit card debt, it’s a little bit harder to visualize what that’s like but in my experience, being in credit card debt, it’s like this gorilla on your back.  It’s like you feel weighed down, you feel stressed about it, there are things you want to do in life that you can’t do or shouldn’t do because you’ve got to pay of this debt first.  Try to imagine what life is going to feel like when that debt is gone and the freedom you’ll feel and experience.  And the more that you visualize that and you think about that, the more it’ll motivate you to work towards what your goals are.

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