Saving money doesn’t have to be difficult. If you find yourself in need of tips and tricks for budgeting and growing your personal savings, in an easy and cost-effective way, then we’ve got the perfect episode for you!
In this episode of Retire in Texas, Darry Lyons explores the practical realm of personal finance, stepping away from market-centric discussions to focus on tangible strategies that can be incorporated into everyday life.
Show highlights include:
*Darryl Lyons’ recount of the personal financial struggles he faced living beyond his means, accumulating debt, and relying on credit cards.
*A breakdown of the Envelope System, and how it aided him and his family with personal budgeting, including debt reduction and disciplined spending
* A description of the budgeting system, Monarch Money, and its features, including user interface, pricing, and functionality
*The importance of monitoring one’s net worth as a standard part of the financial process to ensure comprehensive oversight.
* An explanation of how the integration of other budgeting apps, such as Plaid, can simplify the process of gathering financial data seamlessly across accounts.
If you enjoyed today’s episode and know someone who would benefit from this information, be sure to leave a comment and hit share!
Transcript:
Hey, this is Darryl Lyons, CEO and co-founder of PAX Financial Group and you’re listening to Retire in Texas. Remember, this information is general in nature only. It’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information.
Okay. Today, you know, I like to talk about personal financial advice. I get a lot in the markets because obviously that’s the business that we’re in. But sometimes I get into just very practical things. And today I’m going to talk about budgeting software. And I’m very early in the adoption of the software. So, I’m actually giving you some information that’s pretty raw.
But I’m going to share with you the software that I’m using today so that way, you can consider it. I don’t get paid to sell software. So, this is just something that I think would be helpful for you. Now, giving you a backdrop on my story real quick. So, when I started in the industry early on, I had really, I was almost kicked out of the industry because I didn’t perform.
I wasn’t a very good salesperson and then I started to figure some things out. I had some success. I started to make good money. I was partner of the year for a big company, and then I quit. I say all that because, during the time where I was having some success, I started to do what professional athletes do and just overextend myself.
And so, I had a lot of credit cards, and I had a really cool BMW convertible, but stuff that I couldn’t really afford. And so, I was living above my means and this guy named Dave Ramsey, he wasn’t for me because I was a sophisticated financial guy. He was for the other people who didn’t know anything about money.
So, I didn’t really listen to Dave Ramsey. And then, when I quit that job and we were starting PAX, and I say we, this was me and my wife. We didn’t start PAX, but this is the time that we were dealing with this, these financial challenges. I had to unwind the mess that we had gotten into.
And the only way I knew how to unwind that, I didn’t have a formula, so I turned to the hillbilly in Tennessee, Dave Ramsey. He calls himself that. And, it was humbling, but I read his book and digested his content, and I just went all in, me and Caresse, my wife did.
We did the envelopes. We did the envelopes for 12 years. And it was erratical envelopes. I mean, everything was envelopes. It was really freeing in a lot of ways. We got out of our credit card debt. We would always put, you know, 100 or 200 bucks in an envelope for Christmas and birthdays. And man, it was unbelievable the progress that we made and really getting out of debt.
Really, really, really thankful. So, I’m a huge fan of the envelopes. And some of you guys are still doing envelopes today and go for it. There came an inflection point in our lives where envelopes just weren’t necessary anymore, and we could accept some leakage in our budgeting because we had more margin than we had in the past.
Does that language make sense? In other words, we were making more money. And so, you know, this took time. You know, after you grow a business and you have to do all the things to have a successful business, eventually you get rewarded and you’re able to have some profits from the business. And so, we were able to not have to be doing the envelopes all the time.
And so that was kind of nice to say, “uh oh we have money”. In fact, it was nice to actually go to the grocery store and say, you know, it’s okay if we spend a little extra, because there had been many years where it was down to the penny, and there was even times where if we didn’t have the cash, we would just pray that they debit card would clear.
And so, there was just so many times where we were stressed and doing the right things and living like no one else. We couldn’t live like no one else. Now we’re living like no one else. And so, I say all of that because how do you, how do you be still a good steward with your money without doing the envelopes? Like, is there a system or process and, or tools?
So, we could use different budgeting softwares in the past and I have not tried all of them. I can say, you know, I know there’s about probably less than ten that are considered high-quality budgeting softwares. I’ve used probably 4 or 5 of them, but the one I really like now, and I’ve only been using it since, probably October or November, but I really, really like it and I wanted to share it with you guys.
And that’s called Monarch Money. Monarch Money. And PAX is not adopting it. So, it’s not a technology. We have all these technology pieces we use. We call it a tech stack. So it’s not a part of our tech stack. So, if you go to your financial advisor and say, hey, I’m using Monarch Money, can you guide me, that it’s still not incorporated into our ecosystem.
So, just know that I’m giving you a tool and it’s not integrated into any of our systems at PAX. It’s just for you and your family. This Monarch Money is just for you and your family. So let me explain how it could help your family and how it’s helped me, and why I’m using it. I mean, there’s some good third-party validation.
The Wall Street Journal said it was the best budgeting app in 2024, has over 15,000 reviews. The average reviews are 4.8 stars. I really like that it doesn’t have a lot of ads. That can be completely annoying to me when I get a budgeting app, and it’s just overwhelming with ads. So, this does not have ads, but you do have to pay for it.
It’s about 100 bucks a year, $99.99 or like $8 bucks a month. So, you do have to pay for it and I’m okay with that. Love, love, love the user interface. The user interface is basically “how does it look on the screen?” And so, they’ve really done a good job making it easy on the eyes. And so, I can see everything really easy and I can see what I want to see. So, if I wanted to change up the front screen of what’s important to me, I can change those things up. So, like I like to look at my net worth and if you’ve been a client of PAX, you know, monitoring your net worth is just a really important scorecard.
I’ve always found that poor people, they think in terms of tax returns. And this has just been my experience over the years. You know, even being poor, poor people think about their tax returns. Rich people, on the other hand, people who have wealth, think about their net worth. And so, if you want to know if you’re doing well, you got to watch your net worth, which is assets minus liabilities equals your net worth.
PAX monitors everyone’s net worth. That’s part of our process. That’s what we do. But also, in this app you can also look at your net worth. And net worth, you want to look at all your assets. So, you have to link up. And it’s not terribly difficult. You use a third-party app called Plaid, and Plaid is well known in the financial space.
It’s one that I can’t give any credibility to the security behind it. You’ll have to do your own due diligence, but it’s well known in the financial space to be a helpful resource. But Plaid links up the bank account, so if you want to look at some of your assets, you’ve got to pull the data from, not only your bank accounts through Plaid, which is done all, all seamlessly in Monarch. But you pull the data from Randolph Brooks or, you know, Chase, you pull your assets. I don’t really link up my Zillow account for the value of my home, but you could if that was something you want to look at.
You can even put in your VIN numbers for your cars, and also your investment accounts, so you can get the values of your investment accounts, typically from last night’s close and all your assets, and then pull in your liabilities, your mortgages and your credit cards and look at the net worth.
And I think that’s important to keep an eye on. And then what’s nice, if you’re working with PAX, you can kind of, kind of do a quality control and look at the net worth on Monarch and look at what we have here and see if they match or if there’s data missing. So, I really like that.
That’s one of the things I like to look at. There’s also a spending tracker, that looks at, you know, this month’s spending versus previous months. It’s really easy to see on the eyes. And so that’ll you know, you usually know the story. Okay, we spent more this month because of vacation or dining out or whatever. But I just like to see that, next to each other.
I really like to look at the one of the features that I like on here is it shows it has a complete section that acknowledges recurring payments, because what happens for me, I sometimes me or the kids sign up for recurring payments for something, and maybe it’s just a trial and, then I forget about it.
And then now it’s like six months later, I’ve been paying $8.95. That may never happen to you, but it happens to me and I’m like, oh man. So, this has a tool on there that gives me a list of the recurring payments. And then it has a little calendar that shows every day of the month, and it shows when those recurring payments come out of your bank account.
So, you could do an audit to see if there’s any recurring payments that shouldn’t be there. So, I really like that piece. And then of course, it’ll show your most recent transactions. The transactions, very important. This is where some of the other budgeting tools fell short. Imagine if, like, let’s say you put in Whataburger, or it’s linked to your bank account.
So, if it pulls in Whataburger and, and then it codes it as, let’s say, it records the transaction as groceries. I’m just being silly here. But sometimes these other third parties would be that far off on describing the transaction when it should have been under dining. So, what I’d have to do is go fix all of the misnamed transactions, because it wouldn’t categorize them right.
That is a waste of time for me. I just don’t have time to do that nonsense. So, I found that Monarch Money does a good job of accurately describing the transactions. So, Whataburger is going to be dining out. That’s a very important feature for me. And so, I needed to make sure whatever budgeting app I used, I didn’t spend an enormous amount of time changing the names of transactions.
The other thing that was important to me is that I had an easy, functioning tool that said, remember this transaction going forward? So, if I had Shell Gas and that one’s a pretty easy one, it would probably recognize gas. But suppose it mis-categorized it and it put groceries, and then I had to change it to gas.
Usually that wouldn’t happen on something that’s common. But then I would put ‘remember this transaction in the future’, so I needed an easy button that would remember those transactions in the future, so I didn’t have to go back. And those are usually ones that are not as common, but remembering transactions, once they remember the transactions, you’re doing very little maintenance on the categorization, because ultimately you want your transactions to be in the proper categories.
So, when you look at your budget compared to actual, the information is accurate. I do like the alerts. I get a lot of alerts if I’m over budget and it goes to my cell phone and it just tells me if I’m over budget in a certain category, you know, dining out, obviously a challenging one. Whenever you put a budget in there and then you find yourself, you know, racing kids to sports games, and you go in and you have to dine out because you just couldn’t get home in time to eat. Right?
So, then you go over budget. And I really like those alerts. So those alerts are very helpful, and I think that you’ll find that a helpful feature to you just to kind of just say, hey, look, wake up, you need to re either rethink your budget or really stick to the discipline behind it on the investments part of it.
That’s okay. It doesn’t really do a good job of describing the investments, like some of our financial systems that are more investment oriented at PAX, you know, we’ve got our own investment management tools that properly describe the investments, but you can look at your investments when you link those over. So that’s not terribly bad, but I just wouldn’t anchor to the profile of those investments because I found them just to be a little, little off.
There’s plenty of different visuals here that I think are helpful. And my litmus test, if I can show my wife the story behind spending or assets and liabilities in a very easy visual way, and she grasps it quickly, then it’s a win. And Monarch does that. So, I can simply tell my wife, here’s what things, here’s how things look.
It’s easier on her eyes to see Monarch Money than my Excel spreadsheet. So, I really like that my spouse, Caresse, can see the story behind the spending. Links do get broken, so just that’s the case in everything, but you know that that’s part of security today. So, you just have to know that, and it’s not too burdensome. Overall, I’m really enjoying it and would encourage you to check it out as a tool for you and your family.
Whether it’s being strict with budgeting or just simply tracking your spending. Either way, I’m finding Monarch Money to be a very useful resource for me and my family. And hopefully you do too. And just as a side as and just to remind you, I don’t get paid to sell technology.
So, this is just me trying to help you be good stewards with your money. That’s all I’ve got today. I’ve certainly been excited about sharing this story with you for a few months. Give me feedback if you can shoot me an email at Darryl@paxfg.com if you have any feedback on Monarch Money, and then also want to encourage you to go to our website in the contact us space at the very top, you’ll get a 15-minute conversation with one of our advisors with the heart of a teacher.
If you want to find out if it’s a good fit to work with PAX, that’s the way you do it. And as always, I want to thank you for listening. And remember, you think different when you think long term. Have a great day.
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