Are you ready to hack your budget so you can stop stressing about money and start enjoying adulthood?
If so, you’ve come to the right place.
There’s more to life than worrying about the number at the end of your paycheck, so let’s dive in.
I bet a lot of people have thought, “me.”
It’s a common misconception that you need to make a lot of money to live a happy + successful life.
But, it isn’t as much about the amount of money you make as it is about how you use your income in a strategic way.
If you use your income strategically, you’ll live your best life because you’ll stop stressing about money.
So, recapping, to live your best life you need to;
- Understand your income
- Understand your expenses
- Strategically spend your income on your expenses
- you won’t be living paycheck to paycheck
- you will control your finances, they won’t control you
- you will have the ability to use your money for the things that are most important to you
Let’s hack that budget, shall we?!
The only resources you need to attain financial success. Steal the exact resources we used to hack our budget so we could live our best life.
Gaining a firm understanding of your income is easy. Simply figure out your average monthly income.
How to do you calculate your average monthly income? Follow these steps:
- Gather a month’s worth of paystubs
- Total your monthly earnings AFTER taxes by adding up the paystub amounts from step 1
For example, Fred has gathered his last four paystubs in the amounts of $453, $522, $687, and $554.
So, $453 + $502 + $487 + $514 = $1,956. Thus, Fred earns an average of $1,956 per month.
If you need a more precise monthly income, you can average your monthly earnings for the last six months.
Once you have an accurate average of how much money you earn each month, you can start deciding how to strategically use that income.
Before Matt + I understood our income, we would deposit all our earnings into one bank account and spend – without tracking – carelessly from that one bank account. We didn’t know how much money we made on average and we definitely didn’t know how much money we spent on average.
And then, it clicked, how on earth could you not be stressed about money when you have no understanding of your own finances? You can’t.
Eliminate the money stress from your life by taking control of your financial situation, once + for all. No more excuses or wishing that you made more money. Use the money that you do have, well.
Which expenses are crucial and which could you live without to make way for less financial burden + stress? You’ll figure that out by taking a look at your expenses.
Get your income organizing worksheet, here!
Let’s think about your expenses in two categories:
- Your fixed expenses
- Your variable expenses
Your fixed expenses are those that are due at the same time each month and for the same amount, such as your rent or mortgage.
Your variable expenses are those purchases that happen sporadically and for differing amounts, such as your groceries or transportation costs.
To use your income strategically on your expenses, you need to know your exact monthly financial burden.
To figure out your exact monthly expenses, use a financial planner to track your monthly bills and spending.
Then, list out your monthly bills and the average amounts you spend on such things as groceries and transportation so you have a clear vision of your finances.
After a month of financial tracking, you’ll be able to see exactly where all your hard earned cash is going, making it clear which expenses can stay and which ones need to go.
Once you have this knowledge, mastering your finances is easy.
Strategically spending your income is as simple as it sounds.
Spend your money strategically. Think about and plan out where your money is going to go.
I know, you’re like, duh, Michelle.
But, you wouldn’t believe how many times I’ve had this conversation:
Person: “Ugh, money sucks. Why can’t I afford XYZ”
Me: “How much did you spend on random shit at Target this month?”
Person: “Idk, a crap-ton”
Me: “Well, isn’t it a wonder why you can’t afford XYZ, lolllll.”
You cannot spend your income strategically if you don’t know what you spend your money on.
And, you don’t need to fall victim to an expensive (and stressful) lifestyle. You control what you spend your money on, not the other way around. If you don’t want to feel stressed about affording your bills, don’t buy a new car…don’t open another credit card…don’t go out to dinner every night. Self control, peeps.
See, using the information about your income + expenses from earlier, you can begin to make more educated decisions about where your money goes.
It will take a lot of hard work, though, which you’ll learn about tomorrow 😉
We place so much importance on money, ultimately letting it control our lives.
But, with some smart budgeting and frugal living, you can control your finances once and for all.
See, before me + Matt started blogging, we were two 20 year olds with a newborn, living on our own for the first time ever.
We making minimum wage and didnt know shit about budgeting.
But, then, something clicked. You don’t need more money, you just need to spend the money you have, better.
It is really that simple. Budgeting doesn’t need to be hard or stressful.
We’ll teach you how.