Emma Barger:Hello!Andwelcometo CouleeBanks Podcast FinanciallyFreeGenZ. I'm Emma.
Rachel Munger: And I'm Rachel.
Emma Barger: And today is our inaugural episode of our podcast where we'll be discussing all things financing money for Gen Z.
Rachel Munger: Today we're going to be talking all about budgeting; the importance of it, some different strategies you can use. And then we're going to be sitting down with Eric Gatz, a retail banking manager at Coulee Bank to hear about his perspective and experience with budgeting. Emma, I have you ever seen one of those TikToks where it says, I know that the money will come back, but I'll never be 20 years old living in Italy sipping wine on the ocean? Have you seen those ones before?
Emma Barger: Every time I open up TikTok, yes.
Rachel Munger: Exactly. And I see them and I'm like, oh my gosh, you're so right. I need to go move to Europe, and abandon all of my finances and make reckless decisions because this is the only time that I'm young and I'm unattached, and I can do that. But I just read this article in Bloomberg, that talked a lot about this whole mindset that young people have. And it's something that we've seen for years; it's not something new, it's not something that is new with Gen Z. But it talks a lot about how you don't necessarilyhave to have this binary form of thinking, of Ican either spend all my money and enjoy my life, or I can save my money, never go out to eat and just have a boring 20s. There's a gray area, and there's somewhere in the middle. It's not like all or nothing. And you can still go and travel to Italy, you just have to be more cognizant of how that fits into your financial goals. And so I have some really good tips and information on how you can do that and how you can do that specifically through budgeting.
Emma Barger: Awesome! I was actually doing some research on spending habits and budgeting, especially for our generation. And according to the Harris Poll, young Americans are more likely
than older generations to have experienced regret about their personal spending. I wasn't really surprised by this as some 22-year-old. I definitely have spending regrets.
Rachel Munger: Yes.
Emma Barger: I would say weekly, more than weekly, but 83% of Gen Zers end of millennials say this compared to only 60% of Gen X and 49% of boomers.
Rachel Munger: Wow!
Emma Barger: Which is pretty...
Rachel Munger: Yeah, that's gastly different.
Emma Barger: That's a lot.
RachelMunger:Yeah.That's crazy.Imean,Idefinitelyexperiencethismyself,prettymuchevery time Igo to likeStarbucks orCaribou. I'm not doingnormal dairyandso Ialways get an alternative dairy, they call it; and all of a sudden, my drinks are like always $7. I'm like, geesh, that was a bad choice.
Emma Barger: Yeah. And I mean, it doesn't even have to be something like that. I know, I walk into Target, and I always stop in the little dollar section, and I find a little jar that I'm like, this would look perfect in my bathroom, or perfect in my kitchen. And you know what, it's not serving any purpose in my life, except for that it was just $3 - $5.
Rachel Munger: Exactly. And then in a few months, it ends up getting donated because you're like, huh, turns out I didn't actually need this.
Emma Barger: Right. Right. So then, yeah, more than a quarter of people say they feel this way about their spending often or always, and good to know, Rachel, you and I are part of that quarter
of Gen Zers. Another thing I feel a lot of regret around is dining out and eating out. And I'm not alone; more than half of Gen Zers feel this way.
Rachel Munger: Wow! And it's not to say that we shouldn't be dining out like there's definitely always a place for that. Ithink we just need to be smarter about budgetingand thinkingabout when we're doing it and not having it be an automatic like, oh, I'm sitting on my couch and I want Buffalo Wild Wings. But I don't want to drive to Buffalo Wild Wings, I want them to bring me Buffalo Wild Wings, and then I'm spending an extra like $10 for it to be brought to my door.
Emma Barger: A $15 meal sucks quickly turns into $30 or more. And that's where the regret comes in. I feel like dining out shouldn't be a regret if you are grateful for what you do and it's something that you're working towards.
Rachel Munger: Today, we're going to talk a lot about budgeting and different strategies for it, different times in your life that it's important. And we want to focus on why we do this. And so we're not talking about budgeting because we never want to be able to go to Starbucks again, or because we never want to go out to eat with our friends on a Friday night. Those are all things that we both love doing and plan on continuing doing, that's not going to stop because we think that we should focus on budgeting. Budgeting is a way for us to continue to do all those things but to do it in a way that is smart and supports our financial goals for the future.
Emma Barger: I think something important too is that it's aligned with our values almost, where we can splurge on the things that we really enjoy, and be a little bit more mindful of the things that don't really serve a purpose for us.
Rachel Munger: Definitely! Kind of those wasteful spending categories that we don't even realize are happening. Budgeting really allows us to develop money saving strategies, where we can minimize financial burdens that come from emergencies. So things like job loss, or car problems, or housing issues, all of these things that you don't see coming but you want to be ready for, budgeting allows you to set yourself up for that.
Emma Barger: I will second that you really never know when these are not going to pop up in your way. And in the last three months, I've had to get two new tires, I've had to get a dent taken it out of my bumper. my sunroof shattered, and all of these things. You never can foresee them. You don't know you're going to hit a nail or two.
Rachel Munger: Nope.
Emma Barger: You don't know that a rock is going to come through your sunroof.
Rachel Munger: How did rock come from the sky?
Emma Barger: Someone wants to just try to throw it over the house, I don't know.
Rachel Munger: And these things always come at the worst times too. I think I was talking to my husband about cars just a couple days ago, and I was like, I think we've spent like $15,000$17,000 in the last year on cars, and repairs, and gas and all of that stuff. And it's just such a huge expense.
Emma Barger: It's a never-ending cycle.
Rachel Munger: But youwant to beableto thinkandprepareforthatandnot haveit besomething that totally throws you off from reaching your financial goals.
Emma Barger: That can be even more damaging.
Rachel Munger: Exactly! So budgeting really does help you to meet your long-term goals, whether that be advancing your education. So say you want to go to college or you want to get your master's, those are things that cost a lot of money. And you can try to help prepare for it by budgeting. Say you want to rent an apartment where you're living or you want to buy a house, or someday you're going to want to retire. These are all things that we can start thinking about now, and preparing for our future to set us up for the best chances of success.
Emma Barger: Yeah, and I think the next thing is, is that it's super important to start off early. Definitelyin yourteen years. Ithinkthatthis is a great placeto implement thesedifferent strategies and then really just build habits from there on. One big thing that I know from my personal experience is that parents do a lot of influential things for their children. And if parents can lead that example with budgeting for example for their children, I feel like it has a greater success. And when you're younger, it might be harder to get a job, I know. Maybe not fast food is always the most appealing thing, it never really was for me. I stuck more to the babysitting route. My brother did a lot of mowing lawns, shoveling snow.
Rachel Munger: My cousin who had just turned 14 got his first job at Chick fil A, which I didn't even know, it was legal to do that kind of stuff at 14, but he's pretty excited.
Emma Barger: I was going to say, I mean, it's super fun to be younger like that, have less responsibilities and you know, be able to have spending money or saving money, kind of do your own little thing, it gives you more freedom. Another big thing I think that a lot of people don't realize can be helpful to make a little bit extra money, or just help out your community is going around to the older people in your community and offering to pick up sticks after storms. I feel like that's one thing my dad always sent me out to do. And I didn't love it. But it was helpful and you can't mow the lawn if there's sticks all over it.But while you're making moneyin your younger years, I think it's important to record your income and also your savings in a physical spot. A lot ofthingscangetoverlookeddigitally,and Iknowthatthat'skindofanoverwhelmingtrendmoving more digital. But this can also help you kind of find out where you want to spend your money, and how it's kind of going. And then there's going to be more responsibilities as you get older. In your young teen years, you don't really have much to deal with. But then you're going to hit 15 - 16, you're going to start driving, gas is pretty expensive, you're going to want to be able to fill up your gas tank if you have that luxury. So definitely never too young to start saving and start budgeting.
Rachel Munger: But the next stagethatit's reallyimportant to bebudgeting is in thecollege years. Andthiskindoftimecanlookdifferentforeverybody.Somepeoplemightnothavealot ofincome coming in during college, some people might be in unpaid internships, some people might be in
paid internships, who do have more income coming in, as well as those extra jobs on campus. So it can really look a lot different for everybody. But no matter what your stage is while you're in college, it's important to be budgeting. It's important to be recording your weekly and monthly incomeand expenses for afew weeks before youstartpreparing yourbudget,just so that youknow where you are. And this is something even today that I'm working on; my husband and I are working on tracking our spending, seeing how much we're spending so that we can get ready to build our budget.
Emma Barger: I was going to say I think that the most discouraging thing about budgeting is, if you don't know what realm your spending is, you're either going to be way, wayunder or wayover and you're not going to have an accurate or obtainable budget. So getting a good idea of what spending looks like before, I definitely agree with you is a huge, huge part of it.
Rachel Munger: And then you all of a sudden realize 50% of your income goes towards food and eating out. You're like, hmm, maybe I need to make some changes there. But when you start to budget in college, it really sets you up for your transition into adulthood. And just thinking about the things that are coming ahead of you. In college, it seems like you have a lot of expenses. And again, it looks different for everybody, you might have a lot of expenses that you need to take care of while you're in college. But Iknow for me there was certain things that I wasn't spending money on then that now that I'm out of college, it's like was a rude awakening of how much everything costs. You have your phone bills and your car insurance, which is just a lot of money. Payments for your car, your student debt repayments, your health insurance, rent, groceries, it all adds up very quickly, and you spend money when you see your money go out and it's good to be prepared for that. And so there's some helpful apps that you can use to budget while you're in college.
Emma Barger: One of the apps my mom actually introduced me to is the app called Mint. And it works by taking your debit card transactions, credit card transactions, you link up your bank accounts with it, and it will track based on the merchant where you spend your money. So it's a little bit easier to see are you spending your money on clothes? Are you spending your it on food? The things that it doesn't really pick up on are going to be those kind of in between things. So say, you're going out to eat at a restaurant, that might be one thing; but if you want to budget that more
as entertainment, it's not going to really be totally accurate. And then you think about too like, for me my rent comes right out of mybank account. And so that is not always accurate. But it's a great way to at least start tracking your expenses. And as you were talking about earlier, come up with that baseline spending habits.
Rachel Munger: Yeah. Very cool.
Emma Barger: So I think a common theme that we've come across Rachel is that, as a young adult, it's really important for us to form these habits while we're young, just to make sure that it's sustainable in the future. And another important thing I have learned is that, try your best not to spend money that you're not making. A super easy way to do this as credit cards, and then you're going to have to budget for paying those down, paying those back.
Rachel Munger: Exactly with a 26% interest rate.
Emma Barger: An insane interest rate.
Rachel Munger: It's a losing battle.
Emma Barger: Right. So I know that there's going to be things like if you decide to go to school, go to university, there's more than likely, I mean, I had to take out loans for that. And obviously, I didn't have that money beforehand, but that is a little bit more of a ...
Rachel Munger: Well, you're going to get a return on your investment with what you put into college. So say, you come out with $50,000 in loans from college, they say on average, those with a degree versus those without a degree make 15% more even in the same role. So like, you're going to get that money back. It's not the same as if I want to buy a pair of Prada shoes and put $800 on my credit card. I'm not seeing that $800 again.
Emma Barger: Right. There's that; I was thinking interest rate is much lower, too for those kinds of things. I don't know, if everyone understands. If you don't have the money to pay off your credit card in full, it's going to add up really, really quick.
Rachel Munger: Yep. It gets a lot of people in trouble. We have four popular budgeting strategies that we're going to talk about today. And these four are not all inclusive. This is not all of the budgeting strategies that exist out there. But these are four of the kind of well adopted ones that people talk about. And you really have to find what works for you ultimately. These are all great options. Some of them are not ones that I would prefer for myself, but they're ones that my roommates in college used. Different things work for everybody. And you just need to find something that you're going to be able to stick with.
Emma Barger: Yeah, so the first budgeting method would be the 50:30:20 budget. And this budget allots for 50% of needs. Think of this as your groceries, rent or mortgage payments, if you have that, utilities, that kind of thing. 30% for wants, you know you see that sweater at the store, 30% waiting for it. And then the last 20% of your income for savings and debt repayments.
Rachel Munger: But are you sure the sweaters not a need?
Emma Barger: Right, that's where you're going to have to really distinguish the categories for yourself. So for me needs, I would definitely at least in a starting budget would need to a lot for eating out because it is something I do really regularly and if have it as a want, I would have to limit myself but it's something that I'm not ready to put in that category.
Rachel Munger: Exactly. Especially when you're new in your career and you're working, sometimes you do need to do that. You might have an event or something right at work and you saw... sometimes you do need that.
Emma Barger: Or like the one dinner I'll have a week with a friend, that that's usually our time we see each other and not something I'm willing to put in the want category. So this is all definitely up to the individual, and whatever you think you need, as long as you stick to it.
Rachel Munger: Definitely. The next one is the envelope system or the cash only system. And with this budget, at the beginning of the month you withdraw cash from your bank account, and you split it up into different categories. So you're going to have an envelope for your rent or your mortgage, an envelope for your car payment, an envelope for gas, you're going to split those things into envelopes. If you pay for those things in cash, you probably don't realistically pay for rent in cash so that one might not be able to have an envelope. But say you did; you'd split those all up and so you would see the physical money. And the moneythat's in that envelope is the only money you're allowed to use during the month for each of those categories. And so this system is helpful if you tend to make a lot of impulse buying decisions. But it is also not the most convenient in terms of using your money, which is really the point of it. But I think it's one that's not one that I am interested in doing just because I don't carry any cash on me ever. And I don't want to change that in the future. But this is something that my roommate did in college, and it worked really well with her because she did a lot of online shopping for clothes and stuff. Like late at night, she'd go and blow through $200 on like clothes for fall and stuff that she didn't need. And so this cash strategy allowed her to see the money that she had, and then only use that money. So if you're trying to save, or if you're just trying to kind of do a budget reset, this can be a good option. But it may not be the most sustainable long term; it's probably not something you're going to do for your entire life.
EmmaBarger:Right.AndIthinkthatthat'ssomethingthat'ssuperimportantthatyoujustbrought up that it's probably not going to be the method, that you'll use into your 30s, 40s, 50s and, and on. But I would say if your primary income is cash, so let's say you're a server at a restaurant, this could be a good opportunity for you as well. Just remember to save and don't forget about the saving part. If all of your money comes cash in, you're still going to have to put money in the bank and put money in savings or whatever you might decide. But it also might save you a trip to the bank.
Rachel Munger: Yeah, it's good for seasons of your life. It's even I think something my mom did for maybe a year while we were a little bit younger. She was a stay-at-home mom and I think it just made things easier for her in that specific season. But it's not something she does anymore.
Emma Barger: I could definitely see implementing this method for me, personally, in little increments. So maybe for my groceries, maybe I'll start off by taking some cash out and that's just my cash for groceries. I can go a little bit overboard in the grocery store.
Rachel Munger: Groceries are so expensive right now though. Me and my husband have been doing HelloFresh for the last probably six months and that was really expensive. And so this was the first week that we were like, oh, we'll just use one of the recipes from there. We'll go buy all of our own groceries, and it was still like $90 for a week of our groceries. And the meat is so expensive. I'm like, I should just be a vegan because it's a lot of money.
Emma Barger: Yeah, it does add up really fast. And the other thing about that is if you're buying certain ingredients just for a recipe, trying to puzzle piece where you're going to use the extra so it doesn't go bad, it's like a game. It's like a brain teaser.
Rachel Munger: It's impossible. It was like you need apricot jam and I'm like, well, first off, the grocery store doesn't have apricot jam and I'm never going to use that again. So I was like, whatever, we'll just go without it. And it was fine.
Emma Barger: Alright, well, then the next budgeting strategy we have is the pay yourself first. And with this budget, you decide how much you're wanting to put in your savings and retirement accounts first. And then use the rest of us the rest of the money for bills and other costs. One thing that's super important that I don't think people realize is that if you don't have a savings account, you definitely want to start one. And it's generally recommended to have a little bit of an emergency fund, a little bit of a cushion. And think of this as 2-5 months of living expenses and necessities. And one thing about this budget is it's not the strictest budget, but it still prioritizes building up savings accounts and building up those emergency funds, and like we were talking about earlier retirement funds for the future.
Rachel Munger: This out of all of the budgets is the one that I can see myself doing the most and the one that I think my husband and I are going to try to implement, because we're trying to save
up right now for a down payment for a house. So we need to be saving a considerable amount of money each month. And so if the money goes straight direct deposit into savings, whatever chunk that I want in savings, then it just stays there and it can be a good way to be held accountable for actually saving the money and not letting it get away from you and spending it elsewhere.
Emma Barger: And I think that you again just brought up another really important thing, is that if your place of work offers direct deposit, it's a great way to use that in your budgeting and you're never going to have that desire to cash your check and keep $200 for yourself just because you went to a bank or whatever. So that's definitely something too, if you can automatically split it up between accounts, it's super helpful.
Rachel Munger: Definitely helpful when you're trying to save. The last budgeting strategy we're going to talk about today is the zero-based budget. And this one requires some very detailed planningonthefront end, andthenrequires periods ofadjustmentthroughout the yearas youbetter understand yourself and your spending. And so with this budget, you allot every dollar from your monthly income to a specific spending category, including savings. So you’re are going to decide exactly how much money you plan to spend on gas, how much you plan to spend on groceries, how much you plan; and then obviously your things that don't change as much like your rent or your utilities, things like that. And then you really just allot everything, so you have nothing left over at the end. And the idea is it's supposed to keep you from doing more wasteful spending, if everything is allotted, including your savings, you don't have wiggle room to go do other things.
Emma Barger: This one is a lot more difficult.
Rachel Munger: Likealmost impossible Ithought when Iwas researchingit. It's like, Idon't know how much I'm going to spend on gas in the month. I don't know how much gas is going to cost in two weeks.
Emma Barger: Exactly. So I think this would be great if majority of your spending is just fixed. But when it comes to those variable things, like you were saying gas. The other day I was up in
Door County and gas was over $5; and then I came back down here. So I filled it up like before I even got into the county, but it was more than a whole $1 more up there.
Rachel Munger: Why? That blows my mind because that's still in Wisconsin, right?
Emma Barger: Yeah. It was really expensive. It was crazy. I was like luckily, I filled up before I went all the way up there. But for my friends that do live up there...
Rachel Munger: That's tough.
Emma Barger: They resort to mostly walking and biking everywhere, or at least when they can. But something like that if you have an unforeseen travel expense even like gas, gas has just been crazy. It's been all over the charts.
Rachel Munger: Right now over here, it's pretty cheap. I think I was on a walk at lunch today and I saw $3.88 and I was pretty excited. That's the least I've seen it.
Emma Barger: And then you compare that to Lacrosse. I think I filled up my tank yesterday for $3.49.
Rachel Munger: Ahh! That's so exciting because that means we're moving that way.
Emma Barger: Right. So this kind of this kind of budget is very intricate and I feel like it takes a lot of effort.
Rachel Munger: If that's your personality type, and that's something you enjoy doing, then this could be a great option. But if it's not, I think it would pretty much be impossible.
Emma Barger: I was going to say the only thing I can think of if you're hoping to use all of it, is what kind of little expenses are you going to have in there just to hopefully meet your goal? But what if you come in under for a month? I don't know.
Rachel Munger: It's definitely tricky.
Emma Barger: It definitely is a little bit of a harder one but at the same time, I think it could be pretty therapeutic for some. So budgeting wise in the news, according to the US government's Consumer Price Index, inflation is currently at 8.5%. Which I don't think surprises many of us. We've all seen prices go up with everything - groceries, rent. My rent has gone up.
Rachel Munger: My rent went up too. It's very sad.
Emma Barger: Right. Gas, even eggs. I remember when eggs were like $1 and now they're like $4.
Rachel Munger: Yes. Last time we went to the grocery store, we said the same thing. We're like, wait, when did eggs get so expensive?
Emma Barger: And that's really where I realize it. Because you know, I don't eat a ton of meat, I don't really eat dairy at all, but like eggs are something I buy pretty consistently and it's shocking.
Rachel Munger: I was just going to say, and that makes it even more important to kind of choose how you want to budget and then stick to that, because as costs around us are rising, most of the time your salary isn't rising at that same rate. And so you have to be more cognizant of how you're spending and potentially make some cuts to what you're doing and what you're spending money on to allow you to kind of stay at that same standard of living.
Emma Barger: So there are a couple ways that you can help budget yourself or help maintain your budget as inflation rises, or as we live in this expensive time. And one of those is cutting out unnecessary subscriptions. So I know for me during COVID, my family really racked up those streaming services. We had nothingto do so, Netflix, Hulu, HBO, you name it, Ithink we probably had it or at least tried it. And now that life is back to fairly normal, we're back to our usual Netflix and Hulu. But all of those other ones are no longer there. But it's saving everyone money. And
another thing Ithink about too is all of the, like paid apps Ihave that Idon't even realize I'm paying for; I have like a recipe app that I just realized I'm paying $36.
Rachel Munger: Oh my gosh!
Emma Barger: Every year for.
Rachel Munger: Oh, every year! I thought you were going to say every month.
Emma Barger: Every year not every month.
Rachel Munger: I was like, that's an expensive subscription.
Emma Barger: No, no, not that long. But you know, there's subscriptions everywhere.
Rachel Munger: Yeah, Apple does a good job of if you go you can go and see like a list of all of your subscriptions and you can unsubscribe from them alright on that page.
Emma Barger: And I think this also brings us into shopping smarter at the grocery store. Rachel, you and I already kind of talked about that. But you don't just have to buy the name brand. You can buy the generic it tastes exactly the same and it saves you.
Rachel Munger: Except for Oreos. Generic Oreos do not taste the same.
Emma Barger: Well, that's important. That's important to know. And then the last thing is you can always increase your income. Imean, we mentioned earlier babysitting, mowing lawns around your neighborhood, dog walking is super easy. I did Instacart for a while. I could just pick my hours and...
Rachel Munger: There's DoorDash...
Emma Barger: DoorDash, all of these things you can use.
Rachel Munger: Istarted duringthis last year, just like reselling clothes online, that's a reallyeasy way to make some extra money to try to combat inflation and try to just keep up with it. There's a lot of easy creative ways. I know some people will do like Etsy stores. If you can graphic design at all you can sell stuff on there.
Emma Barger: Yeah, there's a ton of different ways to do it. And a lot of them are insanely time consuming, and can be fun. So definitely an option.
Rachel Munger: Yep. So next up, we are going to be speaking with a guest from Coulee Bank, and he's going to be discussing some of his personal budgeting philosophies. So joining us we have Eric Gatz; he is a retail banking manager at Coulee Bank, based in Rochester, Minnesota. Thanks for joining us Eric.
Eric Gatz: Thank you. It's been a very good day here in Rochester and I'm excited to be here sharing this podcast with you guys today.
Emma Barger: Well thanks for being here.
Eric Gatz: Yes, absolutely.
Rachel Munger: Do you want to tell us a little bit about yourself Eric?
Eric Gatz: Yeah, absolutely. Not really sure exactly where to start, but I guess a good place to start is just to give a little background about how I got into the banking business. So I have been in Rochester now for just over half my life. And I started in Rochester in the blue-collar world. You kind of name a job in the blue-collar world, I've probably done it in one shape, or form or another. In fact, Ijust was chattingwith a gentlemanwhoopenedup an account with us whotaught me how to drive school bus. So again, I've done a little bit of everything. I decided to jump into
the finance world about five years ago, in fact, it's coming up on six years now, when I decided to be a financial advisor. And during that time, I learned everything from basic budgeting to helping people to protect their future when it comes to having the proper insurances in place, to building an overall plan for them so that they can build their money and be in retirement and be successful in retirement when they get to that place where they're not wondering, how am I going to make it from day to day because I'm not working a job anymore. And I absolutely loved that job. But as of a couple, about two and a half years ago, I just found myself not being able to continue in that position. So of course, I started looking around, going well, what can I continue to do in the world of finance but not from the standpoint of a financial advisor. And I had a friend who worked here at Coulee Bank, I asked him about the bank and he raved and ranted about how great it was. And I said, okay, well, maybe I should give them a shot and see if they'll give me a shot. And that was in April of 2020, and I was hired about a month later. A little bit more about myself. I am married, been married 14 and a half years. I have two beautiful little boys; one is 10, one is six and a half. And then in the next couple of weeks here we're going to add a third boy, my wife is currently 38 weeks pregnant. So I might get the call who knows in the next few minutes for all I know
Rachel Munger: That's super exciting, three boys. That's a household.
EricGatz:Yes, it is. If youguys if youguys know ofanywherethat Icanfindashirt thatsays, Boy mom with a little three up top, you know, Boy Mom3, I’d love to get my wife a shirt like that.
Emma Barger: All I can say is that I'm sure you can find something on Etsy. They have really everything.
Eric Gatz: I have not spent a whole lot of time on Etsy, I might have to check that out.
Rachel Munger: So today, we've just been talking all about budgeting, kind of the different strategies for budgeting, whyit's important, especiallyin your younger years. So as a teenager, and then as a college student and then as a young adult coming out of college or just entering into your first job, why budgeting is important in those different parts of your life. So we were wondering if you could tell us a little bit about how you got started budgeting.
Eric Gatz: Yeah, this is a question that definitely is extremely important to me, because of how I started my adult life. I came out of high school, knowing the basics of like balancing a checkbook. But who does that these days, right. And I knew that it was important, of course, to have money in your account when you wrote a check. But the reason why finance has been so deep in my heart and in my life is I was about six to nine months on my own. I moved to Rochester three months after I turned 18. And I bounced my first three checks about nine months into living here. And I had to make those embarrassing phone calls to my mom, to my dad. And eventually, because my mom and dad couldn't help me to my grandparents. And luckily, they bailed me out helped me. But I made a promise to myself stood my ground and said, I will never make a phone call like that again. So of course, that meant Ineeded to plan. Well, myplan was just to keep an eye on mybank account and make sure that I was making smart decisions. But when I got married, all of a sudden, I got connected with another individual who had a different idea when it came to money. So we decided we needed to do that curse it word that the word, budget, so many people these days, consider that a curse word you say budget, how dare you. Where I learned my budgeting was I typed in budget tools online, and I found a lot of different budget tools. Mint.com was something that reallyhelped my wife and I. But were we Scott, some of our best advice, I'm sure you've heard of him as a man by the name of Dave Ramsey. And Dave Ramsey, has a lot of great tools out there for people who are budgeting. And one of the tools that we came across was what he calls the let me see if I can remember the exact name of it. Every dollar budget tool, okay. And that is that every dollar has a name, every dollar is going somewhere is doing something very specific, that you're not just leaving some money hanging out there. Because to me, and again, this is stealing from him. Having a budget is telling your money what to do, instead of wondering where it went. Because if you don't have a budget, you get to the end of the month, and you start to go where did all my money go, I made a lot of money this month. And you start to go, where did my money go? I don't know where it is. Versus if you have a budget, you're now telling your money, what to do at the beginning of the month, so that when you get to the end, all the money is in its proper place. And that's really what budgeting has meant to me. Because we had times in our life where I was working two or three different jobs, just to make sure that we not only were making ends meet, but we were paying off a lot of debt that we had when our marriage was started. So budgeting has
been something that's gotten us in fact, in a three-year period, we paid over $55,000 off of student loan debt, car debt and a lot of other different things because we stuck so strongly to a budget.
Rachel Munger: Yeah, that's a great just example of what can be possible if you do take those steps to budget.
Emma Barger: And how powerful it can be.
Eric Gatz: And that's the thing, when people think about budget, they think, well now I can't have any fun. But that's not true. If you build the fun into your budget, and it makes fiscal sense, then you absolutely can have fun you in fact, you give yourself permission to have fun when you build that into yourbudget. In fact, we oftenhave categories for weknow we're goingto goon avacation in a year or in two years or something like that, or you know what, my son is going to be having a birthdayand Iknow that we're goingto need to buyballoons, and we need to buycake, we're going to need to buy presents. So we have a gift category where we either save money for a gift, or we will plan ahead of time knowing that we're going to need to set aside a certain amount of money when it comes to the months that have birthdays in our family.
Emma Barger: I mean, it's super cool that you're good at this. And I feel like there's a lot that I can learn and I'm sure everyone else can learn from this. But what do you kind of do to stay on top of your budget or what kind of strategy do you use?
Eric Gatz: So when it comes to the every dollar budget, the best strategy to have is when you get to the beginning of a month, you sit down; sometime either the last couple of days of the month or the first couple days of the month, and you look at what am I going to make this month? You write that down at the top of the paper. And then you get to what are my fixed expenses. And of course, fixed expenses have everything from if you have a house, you have a mortgage, if you have an apartment, you have rent, heat, water, lights, all that kind of stuff is going to be fixed expenses. And of course, if you have things like your Netflix account, your Hulu account, your Amazon account, all that kind of stuff is going to be fixed expenses, because it's going to be something you're going to be paying for every single month, it has a fixed amount, and you know it's going
to be coming out of your bank account, once you get to the end of those expenses, then you get to your non fixed I guess would be one way to put it or your expenses that can go up and down throughout the month. So now we're talking things like food; we need to we need to go to the grocery store every single month, you maybe you plan to eat out a couple times a week, or you go to Starbucks on a regular basis. Because that's what it costs you it's five bucks, right?
Rachel Munger: More than that now?
Eric Gatz: Yes, yeah, it's more like eight bucks or something like now. How specialized do you get it right? When you have those categories, those ones take a few months. So that's one of my biggest pieces of advice. When you start a budget, don't give up on it after one month, if you failed. You need to give it three, four or five months. Because those expenses that go up and down, whether they're food eating out, things like that, that change from month to month, you need to adjust those things. So if you've put, I'm going to put an extra $100 toward my student loans this month, but you get toward the end of the month, and you need to buy some more groceries, maybe you're only going to end up putting $50 Extra toward that student loan to get your debt paid off. So you need to adjust those things as each month goes. And once you get to that third or fourth month, it reallyjust gets a lot more simple. You're looking at your budget less because you're used to what it is that you have. Then of course, if something happens, you get a raise at work, you pick up that extra job doing a little bit of DoorDash, or you start an online page and you're selling stuff online, whatever it is that you decide to do, then you can start adjusting your budget a little more often. But really, the big point on it is to stay on top of it and not give up. Oftentimes, people start a budget. And then they get six weeks, seven weeks in, they rip it all up, they get frustrated, and then they just don't know what to do and give up on it. When that's really the time for you to grind it down. Go all right. Not starting over. But what's gone well so far. And how can I adjust a few things to make sure the next budget I write fits me better than when I first started doing this?
Rachel Munger: That's great advice. That's even helpful advice from Rachel and Emma from 20 minutes ago, we were talking about this type of budget and just questioning how to something like that work. How do you expense each individual thing, but it sounds like it takes some time to get it all set and put together and get it really solid.
Eric Gatz: And almost nobody's going to have a perfect budget when they first start, you're going to write stuff down, and you're going to go, well, I think I spend $200 a month on groceries. And then you'll get two and a half weeks in and you'll go I've already spent $200 Yeah, I need some more money, what am I going to do? And that's when you have you know, if you're married, of course, you have a committee meeting with your whoever you're married with. If you're not married, you have a committee meeting with yourself, but you start to go, what needs to change, because I went over my budget when it came to food. And sometimes it might just be what it is you're purchasing. But we need food, so we can't go without it. And other times, it's Ineed to move a few things from a few categories to readjust.
Emma Barger: So question for myself, just because I'm super interested. How do you keep track of this? Do you have an Excel sheet? Do you write it down in a physical spot? I just don't know how I would... I don't know. I'm interested. I'm interested but how do I get start so I'm just I don't know how I would even get started.
Eric Gatz: Yeah, these are absolutely great questions. And everybody's a little different. So I can't say that there's a perfect answer for that. I have friends who are complete nerds, which is fine. I love them just the same. And they love Excel spreadsheets, love, love, love Excel spreadsheets. I don't mind them. I think they're a lot of fun but I don't do that all the time. When I first started, it was all about pencil and paper for me. Iactuallyhave a notebook back from, Ibelieve it was March of No, it was May of 2008. So I had just been married for two years or two months, excuse me. And that was the first time I had written a budget. And I saw what my wife and I made on a monthly basis, and I went, wow, how did we survive. But of course, now all of our expenses are just a lot higher and a lot more. So it doesn't feel like a lot has changed. But the point being is, we went from pen and paper to when we downloaded every dollar buy, that's the Dave Ramsey one. Yep, he has an app and something that works very well with the computer. So my wife and I both downloaded the apps. And we started putting things in there. And anytime that we would purchase something that fit into a category, if we remembered, we would open the app and put what we purchased in the app. Of course, if we didn't, at the end of the week, we would go through our
expenses, see what we spent in that category, and then readjust. Okay, but there's a lot of different ways that fit a lot of different people. And I feel like nowadays, the best way really is some kind of an app, we always have our phones with us, they're always in front of us. And if you can be on top of it. It's pretty easy just to go, Okay, I just spent $60 on groceries. Now I have this much left.
Rachel Munger: Last question we have for you. How would you say your values influenced the way you budget your money?
EricGatz:This is areallydeep question,because Idon't knowifthere's an absoluteperfect answer for this. But there are things in our life that we value very highly. And because of that we refuse to adjust certain categories. So one of those categories that we have is that we tithe to the church on a regular basis. And for us, that means different people, that means different things. For us specifically, that means 10% of our income that we are giving back to our church on a regular basis. So that is something that automatically comes out, we never adjust that category. A second thing is our boys go to a private school here in Rochester. And I can tell you that that is something that wetalk to eachother about regularly.Because weknowthatifweweren't spendingthatmoney at a private school, we could be going on vacations more often, we could be buying that pontoon or that boat, we can be in that RV and traveling a lot more. But our value is that our boys have a proper education. And the type of education that we really value is a high level of education. And because of that, we will cut back in certain categories and go on less vacations and eat out a little less because we value the fact that they are going to the type of school that we value and want to be a part of. So when you look at our budget, it's going to look completelydifferent than somebody else's who their kids go to a public school. And maybe they don't have a church that they give to or ties to maybe they give in a certain a different way. And so their categories are going to be a lot more spread out and a lot different. But we feel as though we scrape together money and other areas. And I will often pick up another job or volunteer to do something or where somebody will pay me 100 bucks to help them move or things like that. Because we want to make sure that we continue to do the things that are important to us and to our family. Now, of course that doesn't mean we don't go on vacations because we do and we have to plan them out further in advance. We have to budget for them for a while we have to save for them. And then of course we have a blast and we cherish every moment of it when we do those things.
Rachel Munger: Definitely. I was going to say it seems like those values and those kinds of categories that you talked about only grow and get bigger as you get older. Because currently for like Emma and I, we don't have kids or families. And so we don't have some of those things to think about or take into account. And so it's something that when you're young and you're setting yourself for budgeting, you can think of that in the future. And just be gaining those skills when you're young so that you can use them
Eric Gatz: Yes., later on in life. Yes, absolutely. And one of the things in this is, I don't know if I wanted to just say like a free bit of advice for those that are a good 10 to 20 years younger than me and that would be take advantage of the fact that you're younger and don't have all those extra things that you're attached to, don't get me wrong, I would never get up, give up my family, or my boys or anything like that. But if I saved more when I was younger, my you know, retirement accounts would look a lot better. If Isaved for specific things, Iwould probablyhave certain things paid off a lot sooner in my life and would be able to enjoy other things. But I valued going out to eat with my friends, I valued playing video games and buying video games. And listings are fun for the moment. But 20 years down the line, I look back and I didn't get a whole lot out of that. Except for entertainment.
Rachel Munger: What a convicting conversation?
Eric Gatz: Hey, and there's nothing wrong with entertainment. Like I said, when you budget for it, it's there. Yeah. But at the same time, like, one of the things that Ivalue when it comes to Coulee is the fact that they give us such a great match. And I challenge every person younger than me, which is probably half the staff. And I challenge at least make the match. So you're giving away free money if you're not getting the match. And I've met a few individuals who say, but I just can't afford it. And I'm like, no, actually you can't afford not to. Because saving at a younger stage of life is so much more important than when you get a little bit older. Not saying it's not important, it's just you can get so much more value out of your money.
Emma Barger: Definitely.
Rachel Munger: Well, thank you so much for coming on. And joining us Eric, I think you had a lot of helpful knowledge and information that is very prevalent, and I feel like Emma and I both learned a lot in the last 15 minutes.
Emma Barger: Definitely. It's crazy, I feel like I could just redo everything. I'm like, I'm knowledgeable now.
Eric Gatz: That’s excellent. And one plug, if you don't mind me doing that, I'll say here will be anybody that steps foot into my office, I offer these kinds of conversations with them. I enjoy these kinds of conversations. Since I've been here at Coulee, I've had multiple people that say they're struggling with moneyor budgeting or not sure how to do A, B, and C. And Iwill sit down, print out a budget, and I will walk through everything with them. Because that is something I value. And I believe it grows a relationship that we can have with our customers. I just believe it's important for everyone to have a good hold on their money, their expenses and what they're doing so that they don't get to the end of the month and they're just hoping that their paycheck was a few dollars more or wonderingwhat they're goingto do when it comes to being able to feed themselves or their family. It's an important conversation to have and though it doesn't really have that much to do with banking, it has a lot to do with finances. And that's the world that we're in.
Rachel Munger: Yeah. Great. Thank you so much for joining us. We were so happy to have you.
Emma Barger: Yes, thank you Eric.
Eric Gatz: Absolutely. I appreciate you guys asking me to be a part of this. And I'm very excited to be a part of it.
Rachel Munger: Thanks so much for listening.
Emma Barger: I think we can all agree that Eric offered some really great advice for us regarding his experience budgeting and some great tips and tricks for us to get started.
Rachel Munger: We hope you tune in next time and look forward to our next episode. This podcast was brought to you by Coulee Bank, Member FDIC.