We are not using fake math in 2024! In today’s episode, I expose the pitfalls of using fake math (guesstimations) and how it kills your budget.
The problem with fake math isn’t about your ability to add or list out expenses. Fake math uses inaccurate numbers to estimate spending and causes you to leave money on the table. Whether it’s incorrectly guessing grocery bills or overlooking occasional costs like hair appointments, small inaccuracies add up and destroy your budget. To spend drama-free, you must eliminate fake numbers from your budget and ensure every dollar is accounted for.
Are you ready to say goodbye to fake math and take control of your budget? Listen to learn how using real numbers will help you reach your money goals!
Stay tuned to hear insights on these critical topics during this episode:
[01:00] What is fake math
[05:00] Coaching away from using fake math
[07:00] How to identify when you are using fake math and why you should avoid it
Tune into this episode of Money Files to learn how fake math kills your budget!
Are you ready to start asking for help with your finances? Apply to work with me, and let’s start working towards your financial goals.
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Transcript for “How Fake Math Is Killing Your Budget”
Intro: Hi and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Keina: Hello and welcome back to another episode of Money Files. So today we are talking about it y’all. We’re talking about fake math. If you’ve been following me or if you’re a client, you know that I’ve been talking about fake math. And today I want to talk to you about why it’s killing your budget. And let me just tell you about what fake math is. So first fake math is like the guesstimations that you do when you do go and put your numbers together. And you’re using fake math because it’s actually an attempt for you to look at your numbers. You’re not using fake math because you want to use fake math. You’re not using fake math because you can’t add. But fake math is when we’re like guesstimating at our numbers and when we guesstimate at our numbers, it’s going to kill our budget.
I’ll give you two examples from two clients that just started working with me recently and I actually did an Instagram story about this because one of the clients I was asking was a couple. And I said, hey, can you tell me what your net pay is? Like, can you look at your bank account? And I want you to actually tell me your last payday. How much money did you make? How much money went into your bank account? And he started looking up in the sky, not really looking up in the sky, but you know how you like look up at your head and you’re like, oh, I think, and so he was giving me a number. And I said, no, no, no, no. I don’t want the number from in your head. I want the number that’s on your pay stub because if we take the number that’s in your head, it could be off by several hundred dollars.
And so if you build a budget off of a number that’s off by $200 a pay period, y’all, that’s $400 a month. And now we know why your budget doesn’t work. So what ended up happening is I actually with this client, we went through their payroll system and because I was looking at the numbers, I was like, oh, this is really interesting. You have some fluctuations in your pay. Let’s get to the bottom of the fluctuations in your pay. And so we actually identified one, we saw an increase in his pay and then we also saw the federal withholding when they make over $168,000 and bonuses and with their gross pay. And so after they hit the threshold for social security, their paychecks increased.
So the paycheck for the beginning of the year was a lot lower than how their paychecks ended at the end of the year. And that was simply a matter of us making sure we were using real numbers. It’s why I didn’t want to take the number from in his head because his paycheck was literally off by probably about $500 from the end of December to the beginning of January. And imagine if we built in a whole budget that was a thousand dollars off. Can you imagine how defeated you feel when your budget is a thousand dollars off? And so we just started working together. So the plan is to actually build a budget around what we know will be lower numbers until they stop taking out social security and then we’re going to have a plan for when they stopped taking out social security. Okay, now what do you do with the “extra income?” But we’re making a plan and we’re not using guesstimations.
Another client of mine also guesstimating and she’s been listening to me talk about fake math and she’s like, oh my goodness Keina I just found some more fake math. It’s so funny. So we were actually talking about vitamins and she said, you know what, Keina, after like our first call, she said, let me actually go look and let me see how much I’m spending on vitamins. And so when she actually looked, she was off by $200 a month. And so this is just one number I’m talking about. I’m talking about the paycheck number, I’m talking about a vitamin number. But that’s one number in an entire budget. When I am working and digging in with clients, I’m finding all the fake math. I am finding like where are we not thinking about the fact that your dog goes and gets groomed every 12 weeks?
Where are we not thinking about the fact that you love to go get your hair colored two times a year and it’s $400, but in between it’s $200 when you get a cut. But if you’re just telling me about the cut and you’re not telling me about the color because the last time that you got your hair done, you just got the cut. So maybe that’s the number that you remember, it results in fake math and we’re not using what could be accurate numbers to help you actually create a plan that allows you to spend money drama free because that’s the goal. We want to be able to spend money drama free, but if we’re not using the right numbers, we’re just using fake math. And for me, when I see fake math as a coach, and when I say, listen, if I work with y’all and I tell you that that’s fake math, it’s not a slight to you at all, but I want to help you see a bigger picture because I want to help you start thinking about what are some of the things that I may not have planned for in the past, but I want to make sure that I have money for right now.
I want to make sure that you have in a personal allowance because I know that you want to spend money on things that are important to you. And so if you are going to tell me, Keina I never spend money on myself, I just know that is fundamentally not true and I can’t support you when you say that. So I have to tell you, you have fake math. Or when you tell me Keina and I spend $200 a month on groceries, girl, no you don’t because I spend about 500 a month on groceries. So I know you don’t spend 200 and these things that we have to pay attention to because they eat away at our progress in our budget. So one of the ways that I help clients actually have 25% more drama-free spending is because we get rid of fake math. We are looking at the actual numbers that need to be in their plan and we’re not killing their budget.
So if you have a budget or you’ve attempted a budget, I just want you to go through and look at like, did I use this number from my head or did I get it from someplace real? If the number ends in zero zero, I know it’s not a real number unless it’s a donation that you make. But if it’s a bill and it ends in zero zero, I know that automatically isn’t a real number. And I’ll be like tell no, me the real number. What is that? And those things add up as we look across the categories from your savings all the way down to paying off your debt, all the way down to you investing, we have to make sure that we’re looking at the actual numbers and not the fake numbers because the fake numbers will keep you broke. We don’t want to be broke this year.
We want to be spending money, we want to be outside, we want to be prepared to be outside as the spring comes and the summer comes. And so we can’t take fake math into 2024. So we’re looking at pay stubs, we’re looking at the full bill. We’re not quoting a subscription that’s 99 cents when it’s really a dollar 19 when it’s pulled out of your account, because those numbers matter. And the more that you ignore the 20 cents, the 30 cents, the 40 cents, you’re going to kill your budget. This is not the same as nickel and dimming things. We want to be as accurate as possible because the accuracy is going to give you more freedom with your spending. So please stop killing your budget in 2024 with your fake math. Thank you so much for tuning in to this short and sweet message this week.
Outro: Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment and let’s get started.
