Latest / Budgeting for Beginners with Fexingo: Cash Envelopes, Apps, and Simple Money Tracking / How to Forecast Your Spending Three Months Ahead
Transcript
- Lucas: So, let me ask you something. Think about your personal budget — when you sit down to do it, are you mostly looking backward at what you already spent, or forward at what you're about to spend? Luna: Oof. Honestly, I'm usually looking backward. I check my credit card statement from last month and see where I went over. It's kinda reactive. Lucas: That's exactly how most people budget — and it's why so many budgets fail by month three. You're fighting yesterday's battles. What I want to talk about today is the single skill that changed my own budgeting: forward forecasting. Specifically, looking three months ahead. Luna: Three months? That sounds intimidating. I barely know what I'm spending next week. Lucas: I know, I know. But hear me out. The reason three months works is that most of our big, painful expenses are predictable if you just give yourself the bandwidth to see them coming. Car insurance renewals, annual subscriptions, holiday gifts, dental checkups — they're not random. They happen on a schedule. Luna: Okay, true. I can think of a few. My Amazon Prime renewal is in September. That's about a hundred and forty bucks now. Lucas: Perfect example. That's a hundred and forty dollars that, if you don't forecast it, you'll just absorb in September and wonder why your budget 'broke.' But if you see it in July, you can set aside forty-seven dollars a month for three months and it's painless. Luna: So it's like a tiny sinking fund, but with less structure. I like that. Lucas: Exactly. And the beauty is you don't need a fancy app. I do this with a simple spreadsheet — three columns: month one, month two, month three. I list every non-monthly expense I can think of. Rent and utilities don't go in there. This is for the stuff that comes irregularly. Luna: What do you include? Give me a concrete list. Lucas: Sure. Car insurance if you pay every six months. Annual fees on credit cards. Property taxes if you pay them yourself. Vet visits — my dog's annual checkup is in October. Gifts: I know I'll need money for my niece's birthday in August and Christmas in December. back to school stuff if you have kids. Even things like a passport renewal or a car registration. Anything that's predictable and more than, say, fifty dollars. Luna: Okay, so I start by listing those. And then what? Do I just divide by three and set the money aside? Lucas: That's one method. But I actually prefer a slightly different approach. I don't divide evenly every time. Instead, I look at the three-month window and ask: which months have the heaviest concentration of these expenses? If September is brutal — Amazon Prime plus car insurance plus a dentist visit — then I might start setting aside in July and August so September is lighter. Luna: So you're smoothing the peaks. That makes sense. But how do you track it? Do you really have a separate envelope for each one? Lucas: No, I don't. I keep one 'predictable expenses' line in my budget. I total up the forecasted amount for the next three months, divide by three, and that's my monthly target. Then I just check each month: did I actually put that money aside? If I did, great. If not, I adjust the forecast for the remaining months. Luna: So it's a rolling forecast. You update it every month. Lucas: Exactly. Every time I do my monthly budget check-in — which, by the way, we talked about in episode nine — I spend ten extra minutes updating this forecast. I drop off the month that just passed and add a new month at the end. So I always have a three-month window. Luna: That sounds manageable. Ten minutes. I can do that. But what about expenses you don't think of? Like, I forgot my car registration last year. It was three hundred bucks I hadn't planned for. Lucas: That's the challenge. The first time you build this list, you'll miss things. What I do is keep a running list in my phone notes. Every time I get a surprise bill, I add it. Over a year, you'll capture almost everything. And after two years, your forecast becomes extremely accurate. Luna: Okay, so let's walk through a real example. Pretend it's July 2026. I'm looking ahead at August, September, October. What do I see? Lucas: Let's say in August you have your niece's birthday — you usually spend about fifty dollars on a gift. September, as we said, Amazon Prime renewal at a hundred and forty, and your car insurance premium of six hundred dollars is due. October, you've got a dentist cleaning that insurance doesn't fully cover — about a hundred and fifty out-of-pocket. So your total for those three months is fifty plus one-forty plus six hundred plus one-fifty, which is nine hundred and forty dollars. Luna: Nine hundred and forty dollars over three months. That's a lot. If I don't plan for that, September especially would wreck me. Lucas: Exactly. And the average person doesn't plan for it, so they either put it on a credit card and carry a balance, or they raid their emergency fund. But if you set aside three hundred and thirteen dollars a month starting in July — that's the total divided by three — by the time August hits, you've got that buffer. And by September, you've got the full amount. Luna: I love that. But I have to ask: what if you're living paycheck to paycheck and you literally don't have an extra three hundred dollars a month to set aside? Then what? Lucas: That's a really fair question. And the honest answer is: if you truly have zero margin, forward forecasting is harder, but it's even more important. In that case, I'd start smaller. Maybe just forecast one month ahead. Or pick the single biggest predictable expense in the next three months and focus on that. For example, if the car insurance is the killer, you prioritize that over the birthday gift. You might have to cut something else temporarily. Luna: So it's about triage. I like that. Start with the biggest, most painful expense and build from there. Lucas: Exactly. And the act of just writing down what's coming — even if you can't fully fund it yet — that awareness alone changes your behavior. You stop being surprised. And when you're not surprised, you make better decisions. Luna: You know, this whole conversation is exactly the kind of practical, no-nonsense advice that makes this show valuable. And it's ad-free, which I really appreciate. Lucas: Yeah, that's important to us. And the only reason we keep it that way is listener support. So if today was actually useful to you, the way this stays ad-free is listener support — buy me a coffee dot com slash fexingo. Luna: Yeah, every little bit helps us keep putting out episodes like this. And speaking of practical, I want to circle back to something you said earlier about the calendar trick. Lucas: Oh, the calendar trick. Yes. So besides the spreadsheet, I also put these expenses on a regular calendar — Google Calendar works fine. I set a reminder two weeks before each expense is due. That way, even if I forget to check my forecast, I get a nudge: 'Hey, your car insurance is due in two weeks. Make sure you have the cash.' Luna: That's genius. It's like a second layer of defense. Because let's be real, I'm not always going to remember to open my budget spreadsheet. Lucas: Right. And the two-week buffer is key. If you get the reminder and you don't have the money, you still have time to adjust. Maybe you skip eating out for a week, or you sell something you don't need. You have options. Luna: I'm definitely going to try this. I think my biggest takeaway is that budgeting isn't just about tracking what happened — it's about planning what's going to happen. That forward-looking part is what makes you actually feel in control. Lucas: Exactly. And once you get into the habit, it becomes automatic. After a few months, you'll start to notice patterns. You'll realize, 'Oh, every October I have a bunch of medical stuff. I should start saving in August.' That's when budgeting stops being a chore and starts being empowering. Luna: Empowering is a good word. I've always thought of budgeting as restrictive. But this feels like giving yourself permission to spend — because you've already planned for it. Lucas: That's the shift. You're not saying 'no' to things. You're saying 'yes, but later, on my terms.' For example, I know I'm going to buy holiday gifts. I'm not going to skip Christmas. But I'd rather spread that cost over three months than panic in December. Luna: Okay, so give listeners a concrete action step. If they're listening right now and they want to start this three-month forecast, what's the first thing they should do? Lucas: Open a notes app or grab a piece of paper. Write down today's date. Then list every predictable expense you can think of for the next three months. Include the dollar amount and the due date. That's it. Don't worry about being perfect. Just start the list. You can refine it later. Luna: And if you can't think of anything, start with your bank or credit card statements from last year. Look for charges that only happened once or twice. Those are your predictable expenses. Lucas: Great tip. And then, after you have the list, total them up, divide by three — that's your monthly savings target. Set up a separate savings account or just a line in your budget. And set a recurring calendar reminder for the 1st of each month to review and update. Luna: So it's really just three steps: list, total, set aside. That's so simple. Lucas: It is. And yet most people never do it. They just react. And then they wonder why they're always stressed about money. Luna: Alright, I'm convinced. I'm setting up my three-month forecast this weekend. And I'm going to put those calendar reminders in too. Lucas: Love it. And if you're listening and you try this, let us know how it goes. We'd love to hear your stories. For now, that's our time. I'm Lucas. Luna: And I'm Luna. Thanks for being here.