The One Simple Budgeting Method That Changed My Life

This budgeting method I talk about in today's video really changed the way I view my own finances. It's called the P&L Method, or running your life like you would a business. Every month, I have my own personal P&L sheet, and I've also created one for you guys so you can budget on your own today too.

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Timestamps:
0:00 - Start Here
0:36 - Step 1: Being Aware
1:42 - Tracking Expenses Challenge
3:24 - Embarrassment & Finances
4:55 - 4 Things To Get Better
6:17 - THE BUDGETING METHOD
8:51 - Zero-Based Alternative
9:54 - How to Allocate Money
13:07 - Where People Get Stuck

PS: I am not a current Financial Advisor, any investment commentary are my opinions only. Some of the links in this description are affiliate links that I do receive a commission for & they help support the channel!

[Dakotarunner]

I’m the daughter of an accounting professor—I’ve been following this basic plan for years and can testify that it works

[MusicMike]

The wisest advice I’ve ever received I continue to share whenever possible: “You are the CEO of your life”

[tonysilke]

Creating wealth entails establishing positive routines, such as consistently setting aside funds at regular intervals for sound investments. Financial management is a vital subject that many avoid, often leading to future regrets.

[jill]

i absolutely love the empathy tied into this channel. a lot of investment/personal finance advice is super "macho" and tells us to get rid of our fears without any tangible steps to do so. love how open, calm, and accepting this all is!

[leeannesorto]

I did this for decades - I didn't want to add up the debts because I knew I'd be embarrassed and personally frustrated with the totals. I've always had a monthly budget, but just never tracked those incidental expenses. A sudden job closure earlier this year had me face to face with my financial stability... thankfully for a 6mo emergency fund already saved. I'm now watching finance channels, consolidating decades of prior employers' 401K accounts left behind, and using library to read good authors' finance books to learn more than the YouTube channels provide. I've decluttered entire house and feel more empowered, knowledgeable, and rolling over the "profit" each month at new job into a Roth acct and investing. It is better to know... the debts, the balances, the wasted money, than to "not know" and be a victim to your own consumerism.

[dillin]

I’ve never heard anyone else say it, but I’m glad I’m not the only one who specifically looks forward to the last day of the month! It’s so fun to have a thoughtful financial wrap up moment before closing the books and starting on the next month’s finances. It’s borderline therapeutic for my Type-A self.

[mannya_realtor]

As an Entrepreneur, the moment I starts operating my personal finances like a profitable business, my finances jumped up! This is a transformational idea!

[scp]

After following for a few months now, I can confirm that Humphrey is a VERY eligible bachelor. Ladies, where u at???!!

[Drivingbangers]

The key that hit me as I operate my finances like a business:

Monthly Retained Earnings!!

[mwedzi]

This is a great video and great method. I do zero based and the one thing I'd add is, just because every dollar is assigned, doesn't mean every dollar is spent. So just like in your example you had $782 left over to decide what to do with, in zero-based, you can also decide what to do with that $782. You can assign it to 'save for next month (rollover)', 'save for concert tickets', whatever.

[laurengreffe]

The disassociation tip is so unique and yet, makes perfect sense! I really like that tip.

[chemquests]

I find it efficient to download the csv file from my bank & credit card and import to my spreadsheet. Since I’m a nerd, I have it automatically feeding pivot charts, so I can see everything in a dashboard with very few clicks. There’s obviously more sophisticated software available but this is a cheap, accessible approach.

[benny]

I just started with my budgeting i use the zero-based method i have my roth contributions and emergency fund on automatic and whats left its for bills and essentials. Just by doing that and and checking it often aswel as my bank statements its changing the way i see my finances, it feels good when i see i have some left over just because its assigned it doesn’t mean i have to spend it. I do like how you put things in that way of looking it like a company. After every month i will turn my complete budget into a P & L and have a binder for it to check it often. Thanks Humphrey 🙏

[njw_williams]

Time to utilize the P&L method this weekend!

in 4 months I'll be getting a raise which means more net income but when I keep my expenses the same, I'll be pocketing more profits for the future. Thanks Humphrey!!

[harrycee]

I have been doing this for over a decade after trying various methods for 5 years prior. Great method to recommend to others.
The thing I found most impactful with this method is the mindset of running personal finances like a business.
The goal of a business is to make as much money as soon as possible.
The goal of my personal "business" is to grow my wealth as quickly as possible.

[TARAdactyl]

I love your videos. They have motivated me to make different money moves. You definitely make things feel more approachable. Finally trying to make my money work for me. Thanks!

[chillestplays]

Perfect. Trying to build personal PnL and translating COGS to personal life was kicking my butt. This is very insightful

[PoojaPatel-mqbd]

I’m glad I ran into this video! I learned so much. Thank you!

[aishaabdullah]

I use the Zero based budget because for me, I feel like I'd be tapping away thinking it's only $5 here, $2 there and by the end of the month it would be too polarising. I like the zero based budget as I allocate to my investment portfolio, coffee for the pay period and once the money from my cash envelope is gone then that's it. I have to wait till next pay.

[wyckedsyndicate]

Are you okay Humphrey? Mentioning being single once or twice as a joke I get but it's becoming a common trend. I care about you man and a lot of people are going through being single later in life myself included but do not let it get to you.