Budget Friday: Submission 6 – Weed Edition

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Budget Friday: Submission 6

Hey everyone! Welcome back to another episode of Budget Friday. This is seriously my favorite part about personal finance, the chance to help others get on a budget, get out of debt and reach their financial goals. I love showing the power of a well-thought out budget plan, and the long term results they can have.

Today’s budget is an anonymous submission. We’ll call him Michael Phelps.

Background: Michael is in a unique situation, where he has a great income and low expenses, and therefore has a great many possibilities as far as his financial future. He has some decent assets, not too much debt, and a healthy savings account. But there is something interesting about his budget…hmmm…..


  • 3 cars – 2 paid for (value est. $5,000 each) and 1 with a loan.
  • Home equity and real property est. $150,000
  • Checking account $21,000
  • Savings account $10,000

Debts (Balances):

  1. Car Loan – $20,000 left on $40,000 loan


  1. Buy another car (estimated cost: $50,000)
  2. Buy a house (around $500,000)


  • Spends $1,400 a month on weed. (yes, this was his one and only priority)

Here is their budget:






Starting Balance  $                 –    $                 –    
Total Income  $  12,667.00  $  12,667.00 WOWZA!
Total Expenses  $    6,520.00  $  12,660.00  
Projected Ending Balance  $    6,147.00  $            7.00  
Income #1  $  10,000.00  $  10,000.00  
Income #2  $    2,667.00  $    2,667.00  
Total Income  $  12,667.00  $  12,667.00  
Rent  $    1,050.00  $    1,050.00  
Electric  $        250.00  $        250.00  
Cell Phone  $        180.00  $        180.00  
Internet  $        120.00  $          60.00 Internet is fast enough at the $60 price range pretty much anywhere. I’m not sure if the $120 is a bundle, and if it is, then ignore this comment. 🙂
Water/Sewer  $          50.00  $          50.00  
Car Insurance  $        170.00  $        170.00  
Car Loan  $        700.00  $    6,300.00 Kills this loan ASAP! You’ve got the extra cash, so you can kill this loan in 4 months, tops. Then you can direct this $6,300 toward your car and house goals. This is a HUGE amount per month, so you’ll be BALLIN’ soon!
Student Loan  $        100.00  $        100.00  
Total Bills  $    2,620.00  $    8,160.00  
Food  $    1,000.00  $        700.00 Though you have the extra income to spare, I know you can save $300 a month here. We use a meal planning software called eMeals (<- affiliate link), and it saves us hundreds. It plans your meals, give your a grocery list based on store deals, gives you 7 dinners a week and instructions as well.
Gas  $        200.00  $        200.00  
Date  $                 –    $        100.00 Hey, I know you probably go out every now and then, but I always recommend ear-marking the cash for it. SPEND THIS MONEY EVERY MONTH. Never stop dating 🙂
Spending Cash  $    1,200.00  $        600.00 I’m thinking that you should be able to cut this in half to direct some of this cash toward your car loan and eventually larger goals of a new car and house. Once you reach those goals, you can look at raising this back up (if needed)
Pets  $        100.00  $        100.00  
Weed  $    1,400.00  $    1,400.00 Hmmmm. Well, since you put this as a priority, I will not remove it from the budget. What I WILL do is show you what this money COULD be doing 🙂
Total Necessities  $    3,900.00  $    3,100.00  
Savings Buckets     I’m a big advocate of using savings buckets to save for specific categories. That way, the money is already there when you need it.
Christmas    $        100.00 This is $1200 for gifts. That should tide you over as you are pursuing your larger goals.
Birthdays    $          50.00 $600 a year for birthday gifts. If you need more, you’ll have to adjust down another category.
Beauty    $          50.00 I’m sure there are some beauty expenses (haircuts, product, etc) so I threw this in here so it’s here when you need it. If not, you can delete and send the extra $50 a month towards your car loan.
Car maintenance    $        200.00 Since you have 3 cars, I put this in here to cover anything that might come up. Car repairs are expensive, so I suggest regular maintenance to get the most life out of your car.
Vacation    $        300.00 Gotta get away sometimes. This is $3,600 a year for vacations. If you use reward points as well, this will take you a LONG way.
EMERGENCY FUND    $        200.00 I would start saving for this now, because you will want a larger cash reserve when you buy a home.
Life Insurance    $        200.00 Based on your…ahem….habits, your term life insurance may be a bit more expensive, so I put in $200 a month, which should give you $1M – $1.5M of coverage. Recommended as soon as possible, especially since you are looking at buying a home soon.
Lawyer    $        300.00 Based on your…ahem….habits (see what I did there 😉 ), I recommend getting a lawyer on retainer. Unless you live in Washington state, then you’re good to go.
Total Other  $                 –    $    1,400.00  
Total Expenses  $    6,520.00  $  12,660.00  


I would say that you’re really burning through a lot of extra cash here. Somehow you’ve got over $1,000 a month that’s like PUFF!, and it’s gone…err…I mean POOF. It’s like your cash is just going up in smoke. Maybe if I light a fire under your budget….ok, ok, I’ll stop with the puns!

Debt Snowball

So, the great thing here is that you now have a $6,300 snowball to throw at your car payment that you can crush in just 4 months! Which is A-FLIPPIN-MAZING! Then you are COMPLETELY DEBT FREE! (but not for long). I would then take that $6,300 a month and start saving for your car and home, ASAP! Check out the breakdown below:


  1. Buy another car (estimated cost: $50,000)
    1. Now that you are  debt free, just put your $6,300 a month toward this car. You will be able to buy this $50,000 car straight up with cash in only 9 MONTHS!!!! Which is EPIC! Now, I have a few recommendations on vehicle purchasing. I recommend to NEVER buy a brand new car off the lot, because you are just throwing cash out the window. Get a lightly used car that’s one or two years old. Also, make sure to research the model for “common issues” to ensure you aren’t going to buy a lemon, or a car with major common issues that are not covered under warranty. If you need any suggestions on $50,000 vehicle to buy, just hit me up directly 😉
  1. Buy a house (around $500,000)
    1. Sounds like you have a price range set for your house, so let’s get to saving! At $6,300 a month, it’ll take you only 15 months to save a 20% down payment ($100,000)! I recommend 20% for the sole reason of getting rid of PMI. Also, without government assistance (FHA loans, etc..), most banks are requiring 20% down, so it’s a good idea anyways. But mostly, that stupid PMI. Based on a $400,000 mortgage at 4% on a 15 year mortgage, your monthly payments would be around $2,950. Add to that taxes and insurance, and you’re probably closer to $3,300 – $3,500 a month. Which is nothing, because you’ll still have $4,000 a month EXTRA! Now, since you’ve already hit all your other goals, imagine throwing $4,000 a month toward the principal of this house! You can turn your 15 year mortgage into a 5 year, 4 month mortgage. HOLY MOLY! Which, of course, will save you about $90,000 on interest and make you COMPLETELY DEBT FREE! Not to mention owning a $500,000 asset with zero liability attached to it.


It was not mentioned as a goal here, but investing your money for retirement is essential to building long-term wealth. Here’s what I would do with your income:

  1. Invest up to company match in your 401k plan. Assuming you have one, do this before even paying down debt. I didn’t know this amount, so just reduce your car loan payment by the net income difference and adjust payoff dates accordingly.
  2. Get a Traditional or Roth IRA. Depending on your stance on this, you can go either way. My rule of thumb is: If you expect to be in a lower tax bracket in retirement, get a Traditional, if you expect to be in a higher bracket, get a Roth. Heck, I say just get both and max ’em out. You can do this once you pay off the car, because it’s only a 9 month delay, but you should definitely get on this. With your income, the amount of tax-sheltered income you can grow over the next few decades is astounding.

As always, consult your financial planner and tax advisor to review your options on these.


So, I’ll admit; This is the first budget I’ve done that included any kind of illegal activity. Again, if you’re in Washington state, no longer illegal, lol. But since I can think of a million things I would do with this money, let’s just play hypothetical funsies (yes, I just coined that term). Say you invested that money over the next 30 years at a decent 8% return. I wonder what would happen…….???

$2,100,413.49 WOULD HAPPEN!!!! Now, I know you want to keep this in your budget, but just take that number for consideration. You are blazing through (hah! I crack me up!) over $2M over the next 30 years if you keep at it. Again, you do what you want, but just know that you could be a millionaire just off that spending if you saved all that green instead (GET IT?! AHAHAHAHAHAH!!!).

Comments: So, what do you think? Is there anything you would have changed about my proposed budget? I’d love to get some reader feedback on what you would do. I’m still not sure how to even quantify $1,400 a month in marijuana expenditures, how much weed is that?! Oh well, I guess it’s their prerogative. But I wouldn’t mind having an extra $1,400 lying around the house, that’s for sure, even if it’s flammable (LOL! Ok, I really have to stop!).

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites. 
He’s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

49 thoughts on “Budget Friday: Submission 6 – Weed Edition”

  1. Jake – Here’s the deal: I hate to be critical, but I took the liberty of rewriting your last paragraph the way you SHOULD have written it:

    DUDE! Like $2,100,413.49 WOULD TOTALLY HAPPEN!!!! Wouldn’t that blow your mind???? Now, I know you want sweet baby weeder in your budget (and I can’t blame you, bro), but just take that number for like, some consideration, know what I mean? You’re blazing through (hah! I crack me up!) over $2M over the next 30 years if you keep tokin’ it up. Again, completely up to you, bro, but just know that my head explodes, man, just thinking about how you could be a millionaire just off that spending if you saved all that green instead (GET IT?! AHAHAHAHAHAH!!!).

    I think I interpreted it at least halfway to stoner language.

    • A guy here in Florida spent $1,524 on weed in a month. That’s not out of the ordinary for weed shipped from the northern states. He buys mostly Critical+ and the various other currently trending strains. I know because I do his book keeping. If you buy (and smoke) every day, it adds up quick.

        • Critical+ is a variety of marijuana. It’s very potent (has a high THC content). Sometimes you can but you can’t do that for every month. If you do it too often, you’ll be audited because the expenses will be so high. Unless you owned a business and then you could mask it among the 100,000+ a month you’re spending on your business.

  2. Wow. $1400/month on weed? That is alarming. I’m Canadian and that even takes me aback (haha). I think (though this is not an expert opinion) that $1400 in weed would be a LOT of weed. Maybe he sells it and that’s his wholesale stock. That would explain the extra cash!

  3. Haha it is close to 3 of my mortgage payments! However, he works hard for my money I’d bet making $10,000 a month. While I don’t support illegal activity it is his choice. Oh and you might want to change the name from Michael Phelps… I could see that leading you into libel/slander problems.

  4. This budget makes me wonder where that $6k/month has been going if there are no savings. Will they miss those purchases? I don’t know if this family needed a budget so much as a prioritized financial plan for where to put their excess income (first – then the budget second). You gave them both but I wonder if it matches up with their priorities. I would build the EF up to a standard level around the time that I pay off the car loan, and well before starting to save for a house.

    And honestly, concerning the amount spent on marijuana – it’s his choice, you know? His value. It’s barely more than 10% of his income and his other expenses are so low. Once the debt is gone and the house is bought he can kick his savings up to an incredible level and why not enjoy part of his income in the present and not just in the future? The way this goes wrong is if he continues to spend that much money while not meeting his other goals like the house and (I hope) savings. That $1400 doesn’t concern me as much as where the heck the rest of the money is going. At least he’s identified it as a value!

    • A budget IS a prioritized financial plan. That’s exactly what I did here. I asked for priorities, and it was WEED, and that’s it, so I took liberty to assign the rest of the cash.

      I agree, building the EF is a priority, so I built it in. I just did the investment comparison for fun, but obviously he’ll keep spending where he wants. I’m just sayin’, if I had even his $1,400 a month extra, I would make that money WORK!

      • A budget is a snapshot of your priorities at a certain timepoint. What I meant by prioritized financial plan is something that evolves with their goals – a debt snowball is an example. Every iteration of the budget would follow that original plan, changing as the goals are accomplished. It’s like a meta-budget. You definitely mentioned some things that would change with time – working on the car debt first, then EF/investments/house/etc. I’m sure there’s a term for this that I don’t know! Anyway, since their income so far exceeds their expenses they can make major traction on their goals if they want to, like paying off the car in 4 months. So that’s why I mentioned a plan that guides them over years instead of months. Most people’s expenses are such a big portion of their income that a single goal can take many months or years to accomplish so there’s lots of time to think about goals 2 through whatever before the budget needs to be redone. I hope that clarifies what I meant!

        • Yes, that makes more sense! I agree, putting together milestones far beyond the next few years would be great. When I budget for people, I usualy don’t go more than 2 or 3 years out. The budget will change once he pays off the debt, after buying the car and after buying the home.

  5. You know Jake the biggest focus on this budget is the weed and the food as well for me. The amount of weed is high unless this is a priority as he/she turns the $1400 worth of weed into profit? It doesn’t say if it was for personal use or re-sale. Just saying. The numbers are there for the person it’s up to them what they chose to do with their life. Great post. Mr.CBB

    • Yup, that’s why I do these budgets. They are proposed, but I am not going to force choices on someone. Though I do like to follow up and see what works and what doesn’t with these folks. Hoping to have a post on that soon 🙂

  6. I would love to know what kind of job you have to smoke that much dope and still make 10K a month? Professional skateboarder? He might be my neighbor here in Colorado too and be perfectly legal so you can take out the legal fee there. At least he specified his priorities. If you’re gonna spend it, put it in the budget. I also have to think that if he could give up the pot, the grocery budget would go way down as there would be no munchies.

  7. Wow, I’m not even sure what to say about that. I guess I’d be too cheap to spend that kind of money (or any money) on weed. But I do spend money on beer and wine, and clothes, beauty products and other things that maybe he would find frivolous. To each his own, right?

  8. Cripes. I know a lot of pot smokers but $1400? Seriously?

    That’s basically a $50bag worth a day, which is A LOT. And if he’s buying in bulk and getting better value that way, well, that’s even more. Kind of impressive.

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    • Gah! Good catch. I thought I had missed something, just couldn’t put my finger on it. Good call!

      Based on the monthly payment, I’m assuming around $10,000 -ish, so I’m sure this can get knocked out in less than 2 months!

      And don’t talk about Papa Johns! I’m starving!!!

  10. You only talk about Michael, not a spouse, and while there are two incomes listed, one could easily be from a side business. If he’s not married, then he doesn’t qualify for a Roth on his income. He makes too much money.

    And it’s frustrating that we don’t know the interest rate on his car loan. If it’s low, then it makes much more sense to open up some non retirement investments, after making sure he’s taking full advantage of his retirement options (IRA/401k). It might be nice to be debt free, but with the interest rates one can take advantage of now, it makes the most sense in terms of wealth building to use someone else’s free money and let your money make you more money.

    • Ahh, yes. The second income is a fiance, so I agree, not YET qualified for the Roth, though will be once married.

      And though mathematically, you might save a few dollars playing the stock market and hanging onto the debt, I don’t play that game. I suggest killing all debt, regarless of interest rate. While I do agree he should be investing in pre-tax retirement options (like 401k up to employer match), being debt free (and very quickly, I might add), will ensure he is in the strongest financial position to invest.

  11. Pingback: Weekly Roundup: Weed, Costco, and Hidden Gold » A Budget
  12. That was probably the most entertaining budget review I’ve ever done! I review corporate budgets as part of my day job… wish I could use you to spice some of those up! haha – thanks for the good read.

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  14. Going off of Washington rates (assuming discounts are applied), that’s a little over 1/2 pound of weed a month. OMG! How does this guy function?

    Well, I guess over time, you do develop a tolerance and therefore need to increase the amount you smoke to achieve the same results. Still, that’s a lot of weed.

    Thanks for the fun post.


  15. OMG, I wonder how many times does Michael smoke if he spends $1,400 on marijuana… That’s a lot… Anyway, awesome budget planning!

  16. This particular budget can make everyone wonder where by in which $6k/month continues to be proceeding in case you’ll find absolutely no savings. Will probably they will overlook those people purchases? My spouse and i don’t recognize in case this family members necessary any budget a whole lot as being a prioritized financial arrange for where you should place their particular surplus earnings (first – then this budget second). People gave them equally nevertheless My spouse and i wonder in case the item matches upward with their focus. We would develop this EF up to and including typical stage throughout the time period that i be worthwhile the vehicle bank loan, and a long time before beginning to help save to get a house.

    As well as actually, concerning the volume allocated to pot – it’s their decision, you understand? His / her value. It’s scarcely a lot more than 10% of their earnings and their various other costs are and so low. When the credit card debt is finished and the house can be acquired he’ll end their savings approximately an amazing stage and why don’t you enjoy section of their earnings in today’s and not down the road? The way in which this is going wrong can be in case he / she continues to spend very much funds while not conference their various other goals like the house and (I hope) savings. That $1400 doesn’t worry everyone around the place that the bejesus other funds goes. A minimum of he’s identified the item as being a value!


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