Kathi Lipp (00:18.316)

Well, hey friends, welcome to Clutter-Free Academy, where our goal is to help you take small, doable steps to live every day with less clutter and more life. Tonya, we’re gonna talk about money.

This is an area that I still struggle but feel like I’m doing better every day. What are your feelings towards money?

Tonya Kubo (00:45.396)

Well, I would like to have more of it always. like, you know, money is just numbers. It doesn’t really bother me to talk about money. I just would like more of it all the time. Right. Because there’s always something to buy, Kathi. I mean, hello, we are in clutter free Academy here.

Kathi Lipp (00:48.468)

Yes, of course.

Kathi Lipp (00:55.48)

Mm-hmm. Mm-hmm.

Yes. Right. Yes, yes. And I wonder, do you feel like cluttery people? You know, I always feel like I can’t remember what movie, you know, when will it be enough? Just a little bit more. I’m trying to remember. I can’t remember what movie it is, but, you know, when will it be enough? Just a little bit more. And I feel like I can feel that way about the stuff in my house.

Tonya Kubo (01:14.896)

Mm-hmm.

Tonya Kubo (01:26.82)

Mm-hmm.

Kathi Lipp (01:27.064)

course, I also want it to be less stuff in my house. I just want the right stuff, right? But also finances. you know, this year we’re kicking off, we’re talking about habits that we can develop in our lives in order to really approach the new year empowered. And I feel like especially with financial habits, that empowering is really, really important because we can feel like victims

Tonya Kubo (01:31.919)

Right.

Kathi Lipp (01:55.624)

Our not enough or we can feel like no, I’m super clever I can figure this out we can make this work and Roger and I have a ginormous bill to pay off like like ginormous like life-altering amount of money and You know, we knew what we were doing when we did that it was to make improvements to the home and things like that and worse we don’t regret doing it but

It does feel overwhelming and we’ve had to have a lot of financial discussions about how are we going to take those numbers and aim point, point those dollar bills in a powerful way. And so I wanted to talk about five things that I feel like have been very, very helpful for us and habits that we are getting into in order to gain some of that power back.

Tonya Kubo (02:27.706)

Mm-hmm.

Tonya Kubo (02:36.772)

Yeah.

Tonya Kubo (02:50.544)

Mm-hmm.

Kathi Lipp (02:50.924)

And the first thing I’m going to talk about is something that you and I both love. We are passionate about it. It’s the book Profit First. this, yes. Okay. Let me just start off by saying this is a business financial book. So if you’re not a business financial person, you might be like, but why? But Tonya, can you talk a little bit about the principles around Profit First and how they can apply to a home?

Tonya Kubo (02:54.842)

Mm-hmm.

Tonya Kubo (02:58.659)

Yes!

Tonya Kubo (03:18.788)

Well, so for me, I mean, the biggest principle of Profit First that I think you can apply to a home is rather than taking what’s left for your family, take what you need for your family first and then alter the what’s left part. So for example, I think a lot of us are reactionary with our finances, right? Like, the power bill is twice what it was last month.

Kathi Lipp (03:28.501)

Right?

Kathi Lipp (03:34.04)

Mm-hmm.

Tonya Kubo (03:47.344)

Okay, well, I guess I’m paying twice what it was. And then at the end, right, we say, I’ve got an extra $50 left over. I guess $50 goes in savings. Whereas, you know, with profit first, when you talk about, so you need to make sure that the very first cut you take is for yourself and then make sure everything else, all your expenses align. The first cut goes to savings because you’re never going to get off the financial hamster wheel.

Kathi Lipp (03:47.629)

Mm-hmm.

Kathi Lipp (03:56.024)

Hmm

Kathi Lipp (04:04.642)

Mm-hmm.

Kathi Lipp (04:11.266)

Yeah.

Tonya Kubo (04:14.672)

if you don’t start to build that up. And I know, you there was a time in our life where all we could do was say five to $10 a month and that was a huge win. But, you know, at the end of a year, having 120 to $150 set aside was the difference between having to put something on a credit card and being able to pay cash for it.

Kathi Lipp (04:14.7)

Mm-hmm.

Kathi Lipp (04:22.968)

bright.

Kathi Lipp (04:38.028)

Yeah, there were I when we first started this there were months where we put things into savings and later that month have to take it right out and It felt like okay. This is ridiculous. But you know what it made such a difference and Here’s the other thing. It’s so funny. We just did a podcast about hiding food from our family So that they didn’t plow through it. Can we take that same principle and talk about money with?

Tonya Kubo (04:47.726)

Right back out, yeah.

Tonya Kubo (04:55.151)

Mm-hmm.

Tonya Kubo (05:03.408)

Mm-hmm.

Kathi Lipp (05:07.414)

Miss Kathi Lipp because if I see that it’s available I feel like we that’s just my brain right and I don’t want to be the wee person but one of the things that we did as a family for our business was set up different accounts so that we never saw the money that the money wasn’t there because the money had been Allotted for something different and that’s what we had to do it

Tonya Kubo (05:08.994)

Tonya Kubo (05:15.408)

Mm-hmm.

Tonya Kubo (05:24.399)

Mm-hmm.

Tonya Kubo (05:34.916)

Mm-hmm.

Kathi Lipp (05:37.142)

So you guys the book profit first is on sale right now for like 11 bucks I don’t know what it will be when we you know broadcast this but It’s not a huge investment. It’s very easy and some people are like, well, isn’t this kind of like the envelope method? It is like the envelope method But it’s you we we’ve set up a number of different accounts and we could do that for free in our with our bank

Tonya Kubo (05:46.405)

Mm-hmm.

Kathi Lipp (06:04.96)

And if we couldn’t, we might’ve switched banks. We’ve actually got some accounts that are at a totally different credit union, because that’s what makes sense for us. But you can absolutely transfer this. And guys, you’re recommending a finance book, Kathi. If finances are a struggle, I highly recommend this, because everybody I have recommended it to, they swear by it. They swear by it. It makes a lot of difference.

Tonya Kubo (06:13.264)

Mm-hmm.

Tonya Kubo (06:27.738)

Mm-hmm.

Kathi Lipp (06:32.95)

So yes, the savings first transfer. What are the other categories that you need to pay? Everybody has that weird category that other people don’t have, but you know, you can start to guess what your categories are gonna be. And Tonya, Roger and I, when we borrowed some money against our own house, I will say we were not as careful with that money as we needed to be.

Tonya Kubo (06:50.032)

Mm-hmm.

Kathi Lipp (07:02.57)

Electric bill was insane insane and we were always too busy to figure out what was going on and We knew you know after doing that for too long We sat down and we had to figure out what is going on here and we did some investigation and not only Not only did we figure out turning the heater on for moose is costing us. I’m not even joking

Tonya Kubo (07:05.818)

Mm-hmm.

Tonya Kubo (07:11.472)

Mm-hmm.

Tonya Kubo (07:20.346)

Mm-hmm.

Kathi Lipp (07:31.266)

hundreds of dollars a month. Like you guys, it was crazy. But also we found out that we qualified for a program through PG &E, our electric company, that drastically reduced our bill. And then we also qualified for another program where we’re going to get free Tesla backup batteries for our house because Roger’s on a CPAP.

Tonya Kubo (07:32.56)

Mm-hmm.

Tonya Kubo (07:41.465)

Mmm.

Tonya Kubo (07:55.13)

Mm-hmm.

Kathi Lipp (07:57.634)

Like until you start investigating these things, you don’t know. And when you’re not paying attention to your budget, it’s very easy to just keep paying, paying, paying and never get ahead. And guys, we want you to get ahead. We want this to be something that we want you to win. And so we want you to feel the squeeze. And when you start to say, okay, if I reduce this bill, I have a little bit more money to play with over here and making savings a priority.

Tonya Kubo (08:00.698)

Mm-hmm.

Tonya Kubo (08:06.672)

Mm-hmm.

Tonya Kubo (08:16.016)

Mm-hmm.

Kathi Lipp (08:27.552)

Okay, number two, weekly budget check-in. Just are you somehow checking your budget to just see what is going on? Roger and I call this Monday Monies and Munchies, where we look forward to it because we’re gonna eat something amazing, but we also, know, money is a hard subject and…

Tonya Kubo (08:44.985)

Hmm.

Tonya Kubo (08:51.055)

Mm-hmm.

Kathi Lipp (08:56.386)

You know, Roger and I don’t fight, but neither of us like dealing with the money. It’s not fun. So how do you check in on your budget, Tonya?

Tonya Kubo (09:01.274)

Yeah.

Tonya Kubo (09:05.74)

Yeah, so I’m fully responsible for the finances in our house. So while I do try to sit down with Brian, because I think it’s important that he knows what we’re spending, how much we spend and what we spend it on, he has zero desire or interest in any of it. So I have to be really short, really to the point. I have a good friend though. She and her husband do a Costco date on Fridays.

Kathi Lipp (09:09.729)

Okay.

Kathi Lipp (09:16.33)

Mm-hmm. Right.

Kathi Lipp (09:24.504)

Mm-hmm.

Tonya Kubo (09:32.176)

They just, don’t go to Costco to shop. They just go to the Costco food court. They each get hot dogs or a slice of pizza. And that’s when they do their finances. And I think that is brilliant at Costco.

Kathi Lipp (09:36.79)

Okay.

Okay. Okay.

Kathi Lipp (09:44.472)

At Costco. That’s wild. They bring their laptops? Or phones? Okay. Mm-hmm.

Tonya Kubo (09:50.616)

No, she does everything in a notebook. And so she’s in charge of the family finances. They’re a single income household. Her job is being a good steward of his paycheck. Like that’s how they do it. And so she sits down and the way she looks at it is just like if she was a CFO and she’s meeting with the CEO, like this is what I’m doing with the money and this is what I think we should do. And these are some questions I have and that’s what they do. And it works really well for them. And she says, she’s like, don’t like, he doesn’t.

Kathi Lipp (10:01.282)

Got it, okay.

Kathi Lipp (10:08.782)

Okay.

Tonya Kubo (10:20.496)

really care what I do with his paycheck, as long as there are certain things that are important to him that he gets. She’s like, I could stockpile it all the way for Christmas and he’s not going to care. But I think it’s important to check in. Yeah. So I think it’s fascinating.

Kathi Lipp (10:25.421)

Right?

Kathi Lipp (10:31.118)

But he just wants, yeah. You know, as long as Roger has his favorite brand of salsa, we’re pretty much good to go, you know? But as soon as it dips below his favorite form of salsa, we’re gonna have a deep discussion, yeah. Okay.

Tonya Kubo (10:39.748)

Mm-hmm. Yeah.

Tonya Kubo (10:50.328)

Right, right. If you’ve got to go to off-brand salsa, you might have to dig deeper.

Kathi Lipp (10:54.158)

Times are desperate, right? Okay, guys, we’re gonna take a quick break and we’re gonna come back and we’re gonna talk about something that both Tonya and I are super passionate about when it comes to finances. So you’re not gonna wanna miss this. We’ll be right back.

Okay guys, we are back. We’ve talked about two financial habits. Read Profit First or listen to it on audio. I listen to it on audio about, I would say every 18 months and it gets me excited about it again. Number two, weekly budget check-in. Make sure that you know where that money is going. Number three, we both love this. You know it. It’s Low Buy July.

Tonya Kubo (11:23.152)

Mm-hmm.

Kathi Lipp (11:37.858)

Tonya, talk a little bit about your passion behind Low by July.

Tonya Kubo (11:42.778)

Well, what I love about, I mean, for us, it started off like out of necessity, first of all, right? So I was going to, yeah. And I think what we can do is we can link a couple of episodes that are about Low Buy July in the show notes. But ultimately, the idea is to reduce your discretionary spending as much as possible. So we’re not talking about living in dark.

Kathi Lipp (11:48.288)

Right. Explain what it is. Explain what it… Okay. Okay, good. I want to make sure.

Kathi Lipp (11:57.634)

Yes. Right.

Tonya Kubo (12:10.724)

like and not turning on your lights because you’re not allowed to pay the power bill this month. We’re just talking about, can you minimize the impulse purchases? Can you spend an extra week before you go back to the grocery store? Can you fill up your tank one less time this month? you know, because you’re driving fewer places, that’s really what low by July is about. And what I, we initially started it out of necessity, like I said, because Brian didn’t used to get a paycheck in August.

Kathi Lipp (12:11.437)

Great.

Kathi Lipp (12:40.162)

Right.

Tonya Kubo (12:40.3)

And while I am an almost equal contributor to the household these days, there was a time where I was like, he was bringing in about three-fourths what I brought in, but we still needed his three-fourths a lot. So having that one check now come in was really tough. And so I needed to make July’s money stretch as long as possible. And that was how we did it. Now I like it cause it’s a reset because after Christmas,

Kathi Lipp (12:54.09)

Right? 100%. Yeah.

Kathi Lipp (13:02.017)

Mm-hmm.

Kathi Lipp (13:07.021)

Mm-hmm.

Tonya Kubo (13:07.972)

For us at least, Christmas feels like an excess. We are doing a ton of traveling. We’re very busy, so there’s a lot of eating out. And that carries over into January. We’ve got birthdays in January and then all the things. And then it’s usually around May where I’m like, whoa, whoa, whoa. Like there’s less going into savings than there used to be. Like all this stuff is happening. And so then in July, it’s an opportunity to reset. It’s an opportunity for us to go, okay, what do we really wanna be doing with our money?

Kathi Lipp (13:25.804)

Yes!

Kathi Lipp (13:30.06)

Mm-hmm.

Tonya Kubo (13:37.804)

It’s an opportunity to be looking at where the money’s going. You know, are we spending more here than we used to? If that’s the case, where can we take that from? And what should be our financial priorities moving forward? I feel like in our household, it is hard to proactively talk about financial priorities in a month where it feels like we’re doing a lot of spending. So Low Buy July for us is a great time for that. How about you?

Kathi Lipp (14:00.268)

Right.

And it may you know what I love is You know our budget has historically had enough a little bit of room that we don’t have to It we can’t we do but we don’t have to look at the sales flyers. We don’t have to plan our meals around what’s on sale and July resets that

Tonya Kubo (14:22.01)

Mm-hmm.

Tonya Kubo (14:27.888)

Mm-hmm.

Kathi Lipp (14:31.384)

for me, I get out of good habits. And you know, so in July, I take Amazon off my phone. take, you know, I’m trying to eat down what we have in our pantry, which is a really good time for us because we want to make sure that the things we stocked up on last year are not hanging around too long.

Tonya Kubo (14:39.696)

Mm.

Tonya Kubo (14:57.741)

Right.

Kathi Lipp (14:58.81)

So, you know, that’s what we want to be able to do. And I notice that we start to save a lot more money in the fall because I’m out of that impulse habit. And again, with cluttery people, impulsivity is something that we know, it’s our best asset. It also can be our biggest struggle. And so, you know, Roger loves when I say

Tonya Kubo (15:20.91)

Right?

Kathi Lipp (15:24.344)

Hey, let’s drive to town and get a Starbucks and I probably do that twice a year. So it’s fun to be impulsive, but also, you know, we need to tame that because that’s not a sustainable way of living. And at some point we’re going to retire. At some point, we’re not going to have the income that we do. And I want to be able to enjoy my life without regrets. Okay. Number four, monthly subscription audit. Okay, Tonya.

Tonya Kubo (15:28.89)

Mm-hmm.

Tonya Kubo (15:48.026)

Yeah.

Tonya Kubo (15:53.7)

Mm-hmm. Okay.

Kathi Lipp (15:53.742)

I’m very proud of myself. have gone, well, okay, I should be ashamed of how many monthly subscriptions I have let sneak into our house, our household budget, but I’m not gonna go with the shame. I’m gonna go with the victory that I, over the past two months, I’ve been auditing, like as things come up and I’m like, okay, we’re not watching Brit Box. Okay, we don’t need.

Tonya Kubo (16:04.688)

Mmm.

Tonya Kubo (16:09.487)

Right.

Tonya Kubo (16:16.89)

Mm-hmm.

Kathi Lipp (16:23.464)

Apple we don’t need an Apple TV subscription year-round You know I ours so I have been canceling monthly subscriptions or yearly subscriptions But every month I’m doing an audit and seeing you know now a lot of companies are telling you hey this subscription is renewing in a week and So I’m being very proactive to go and cancel that I’m searching through

Tonya Kubo (16:28.048)

you

Tonya Kubo (16:46.608)

Mmm.

Kathi Lipp (16:52.406)

are Wells Fargo statements and saying, is there anything else? I’m looking in places like Google Play or PayPal and saying, what’s coming out that I don’t really need for it to come out anymore. And you know, I love when there are some subscriptions I have and I love and I use, and I’m great with that.

But it’s the one that I’ve kind of fallen out of the habits on that is, it’s been great. And I just did a total. So I asked AI, here are all the subscriptions I have canceled. Tell me what my annual savings are. And for the subscriptions that I’ve canceled over the past several months, we are saving annually $670.

Tonya Kubo (17:30.661)

Mm-hmm.

Tonya Kubo (17:47.982)

Nice.

Kathi Lipp (17:49.058)

That’s not a small, it’s not an insignificant amount of money. It’s a huge amount of money. And so, like I have a Costco membership, I have a Sam’s membership. I will always pay for the, well, don’t know if I’ll always, but for now, I have no problem paying for those, because I use them enough, it makes sense. But these little things that can creep in, they make a difference when they’re all adding up. Tonya, how do you,

Tonya Kubo (18:15.822)

Mm-hmm.

Kathi Lipp (18:17.579)

Are you good about this stuff? Do you struggle? Do your kids have subscriptions?

Tonya Kubo (18:21.136)

Well, think, yeah, so I think for us, you know, as a household, like Brian is responsible for entertainment, right? So they’re like, oftentimes I’m just like, okay, so help me understand why we have Peacock and Apple and Hulu and blah, blah, blah, blah. You know, and he’ll say, well, know, Abby likes this show. It’s only on that channel. It’s only on that service, this service, that service.

Kathi Lipp (18:33.486)

Mm-hmm.

Kathi Lipp (18:42.456)

Mm-hmm.

Tonya Kubo (18:48.868)

But what I do find is the channels included with certain services change a lot. And so it’s worth always looking at that to say, hey, because I remember I cannot tell you what it is because it’s not a show I watch, but there was some show that we had a service and it was because that was the only way you could watch the show. But then that became available with like our cable subscription. And so we ended up knocking off like 30 bucks a month.

Kathi Lipp (18:55.63)

Hmm.

Kathi Lipp (19:13.911)

Right.

Tonya Kubo (19:17.98)

one year just by evaluating what services got access to which shows. And even if we decide, you know, we want to watch a show or pay to watch like a single show, it’s cheaper over the course of the year than it is to subscribe to these services. And I am, so I have to look quarterly because things sneak in. I’m like, I’m a big fan of,

Kathi Lipp (19:35.565)

Yeah.

Tonya Kubo (19:42.064)

client or a friend launches some low cost thing and it’s nine dollars a month. And that’s all I’m like, yeah, I’ll support you. But, you know, nine dollars a month times five suddenly is a forty five dollar a month thing. So I have to do that. And then this year, I’ve really been looking at my business expenses and seeing where I can cut there, because the less business expenses I have, the more profit I can take that I then put into my family’s account.

Kathi Lipp (19:52.961)

It’s so true.

Kathi Lipp (20:10.734)

100 % and we have to keep on top of those things. So do that audit. Then number five, a financial focus hour. So this is something that Roger and I are doing. Now we’ve talked about body doubling that I am much more focused when I know Roger is focusing on something adjacent to what I’m focusing on. So one thing that we’re doing now,

Tonya Kubo (20:15.62)

Mm-hmm.

Tonya Kubo (20:37.103)

Right.

Kathi Lipp (20:40.366)

is Roger is spending that hour looking at more of our high-level finances. Like, do we need to move something around? It makes it sound very, do we need to move money around? You know, we’re not that bougie, but would it make sense? He’s, you know, one of the things he’s doing this week is checking with a financial advisor through work to see what we should be doing. Well, I’m doing more of the low-level stuff, like,

What’s a loss leader at Safeway this week? Yeah, but they’re both contributing to our financial future in our home. And so is there something that you could be doing? Now you say you are primarily responsible for finances in your house. How often do you check in on your finances?

Tonya Kubo (21:11.792)

Mm-hmm.

Tonya Kubo (21:30.256)

So I check in twice a month. So I do a budget check weekly and then I’m checking in on other deeper dives about twice a month. Because there’s things that Brian subscribes to that I don’t know about and I have to ask questions and it’s just easier to ask questions when there’s two versus when there’s five.

Kathi Lipp (21:40.75)

Mm-hmm.

Kathi Lipp (21:44.692)

Right. Yeah. Yes. Right. Absolutely. And now are when you are checking in on those things, is it because, you know, Brian gets paid twice a month or is it is there a reason behind it or it just works for you?

Tonya Kubo (22:03.564)

Yeah, so for us, so Brian only gets paid once a month. And I have to tell you, I miss my university days where we both got paid the same day. And then it was just a matter of making the money last. So part of why I check in is because it helps me understand how much I need to pay myself because I pay myself like every other week. That way that that’s like groceries and stuff like that. So it helps me go, OK, so, you know, where am I at? Because I do control

Kathi Lipp (22:11.905)

yeah.

Yeah.

Kathi Lipp (22:21.955)

Yeah.

Tonya Kubo (22:32.844)

my own income so that I can save money so that I can offset lean times. But there’s sometimes, like for instance, we had a phone bill that was double what we usually spend. Actually, no, was three times what we usually spend. know, and Brian can’t just suddenly like make that up. That’s just not the nature of his line of work. So it was nice for me to be able to say, okay, well, I have that in my backup that I can then pull over.

Kathi Lipp (22:34.904)

Mm-hmm.

Kathi Lipp (22:39.137)

Right.

Kathi Lipp (22:46.85)

Wow.

Kathi Lipp (22:52.054)

Right? Yeah.

Tonya Kubo (23:00.068)

But if I wasn’t checking, if I was only checking once a month, that would have, I would not have recognized that.

Kathi Lipp (23:00.206)

Mm-hmm.

Kathi Lipp (23:06.668)

Yeah. Okay, guys, we’re gonna go over these financial habits again. Don’t try to implement everything at once, but think about what could you easily put into your lifestyle? Put it on your calendar so that it comes up and helps you. I want your financial freedom to be at the forefront of your mind because this is something we all need to be paying attention to. And I’ll tell you,

us cluttery people have a hard time with it. And I don’t want this to be a source of contention in your relationships or for you. I want you to take care of your future self. So number one, check out the book Profit First. We don’t earn commission from you doing this. We just want you to be financially healthy. Two, weekly budget check. This is to just check in, you know, do you…

Check into your accounts. Make sure you know where your money is going. Number three, join us for Low Buy July. You can do this over at Clutterfree Academy, Kathi Lipp’s Clutterfree Academy on Facebook. We do it every year. We would love to have you over there. Four, monthly subscription audit. See what you’re actually paying for over and over on repeat. They make it very easy for you to not see that being on repeat. And we want you to make the…

Tonya Kubo (24:25.232)

Mm-hmm.

Kathi Lipp (24:27.946)

Invisible visible and it will help you take care of your finances and then finally Financial focus hour is is there somebody else you’re sharing finances with where you can each take a piece of it and do a deeper dive Because it’s gonna help you save money Tonya. This has been great and it’s been very unscary, which I really like Yay And friends, thank you for being here. You’ve been listening to Clutter Free Academy. I’m Kathi lip now

Tonya Kubo (24:48.482)

Yay!

Kathi Lipp (24:57.708)

Go create the clutter free life you’ve always wanted to live.