Because if you want to achieve any financial goal, the #1 thing you have to do is track your spending.
“But Caalleeebb, that sounds like so much worrrkkk.”
I. Don’t. Care. 🙂
Love ya.
The only way you can achieve any goal is by:
- Tracking where you are
- Knowing where you want to be, and
- Setting a plan of how to get there
Once you do this, then achieving your goals becomes a lot easier.
But don’t just track how much you’re spending.
Break it up accordingly by the 50/30/20 Rule.
This is my all-time favorite budgeting rule to follow. It’s perfect for those with bad debt in any area, like high interest rate credit cards or car loans.
Here’s how it works…
Break up your income into 3 categories:
- Needs – This consists of things you can’t really live without and need to have. Things like rent, groceries, and utility bills. This should be capped at 50% of your income, but might be higher in some cities.
- Savings – This is everything left over at the end of the month. You can put this towards your financial goal. This should be a minimum 20% of your total monies.
- Wants – This consists of things you can live without but would like to have. Things like video games, clothing, and TAQUITOS. The rest of your monies should go here, which we try to aim for 30%
So if you make $3,000 per month…
A max $1,500 goes to your needs (you can see how there’s already an income problem here…), $900 goes to your wants (we hope!), and a minimum $600 goes to your savings.
After that, you track your expenses in both “Needs” and “Wants” columns.
See where I’m going with this?
If you’re within the 50/30/20 Rule = Winner, winner, chicken dinner.
If you’re not within the rule = No chicken dinner for you 🙁
Instead, you’ll have to cut back on your expenses to meet the rule.
Start with your wants first since they’re easier to change.
(Especially when you STOP BUYING F**KING TAQUITOS)
Then if you can, start chipping away at your needs.
It’s easier to do this with your wants than your needs if you’re locked into dumb, dumb payments like an apartment or car.
If you’re locked into one, just focus on minimizing your wants and maximizing your savings.
“But Caleb, you’re like, one of the smartest people I’ve ever met with their finances. Wow so smart. I love you so much. Cuddle with me. Babe pls. Marry me. Tell me, how do you track this stuff?”
(No one actually says this, but I like to pretend they do.)
If you want to make this as simple as possible for yourself, I personally use Sofi’s Free Budget Planner and Spending Tracker.
Sofi tracks your spending each month and automatically breaks it up into categories so you can see where you’re putting your money.
On top of that, you can get 4.60% interest (APY) on your money with zero account fees + sign-up bonuses.
It’s something I take advantage of, and think you should too.
So if you sign up with my affiliate link here (which helps support the channel), you can win bonuses up to $250 when you set up direct deposits.
Anyways, this post is long enough. Time to do better with ur monies, you tit.
Taquitos,
Caleb Hammer