How to do you create a minimalist Budget that helps you Save more and spend less. Well, in this video I’m going to teach you exactly how to do that. And how to also pay back your debt. The objective of this videos is to give you a blueprint to get out of debt, to manage your money and be able to live a better life for you and not for companies.
Why is budgeting important ?:
Simple explanation:
Story: When I was 17 no one could talk to me about budgeting, I thought budgeting was dumb. I thought it would limit and prevent me from living life.
- Well two years after that I was 19, and I owed 3000 in credit card debt and had around 13k in student loan debt. All while making a whopping $60 bucks a week.
- Now 3 years later I have a very good budget, and I only have debt that makes me money, and I spend less than 5% of my money on expenses. And I still go out on weekly dates, and I have a lot of fun.
Breaking down the minimalist Budget
1. Define your goals in three categories. This is lifestyle also.
From daily( learn one new thing a day), monthly( try business) and annual goals( invest a certain amount). And have a powerful why the best way to get this why is to ask yourself why at least 7 times until you get the root answer. ( I want more money isn’t good enough)
- Health, Wealth, love and happiness
2. Step two would be an audit: take responsibility, write down all your expenses, your income. Be very specific. And categories expenses. Into 2 categories. Need and want ( be honest with yourself)
If you have debt: we will focus on eradicating all of it pretty soon in the next step
3. Time for a strategy:
- Emergency( 6months), Investments, Debt, Expenses, Fun, charity ( all this needs a powerful Why!! ( Income)
- If this doesn’t add up, it’s a sign to change things up
- How: create bank accounts 7 in total or envelopes ( the extra account is for income, it's going to go to zero every time you get paid)
- Listen carefully: you need 2 no temptation accounts ( another bank with no app, no chequebooks and anything you can only deposit, this way its hard for you to that money. Emergency, investment
4. Details with percentages and how to do it
Example: get a direct deposit, Split it across accounts and transfer what needs to be transferred according to the percentages
Emergencies: High debt 1-5% Ratio
Normal Debt 10% minimum
Cool tips
Where it goes: Into emergency Checkings then emergencies at the no temptation bank
Investments: High debt 1-5% also
Normal Debt 10-20% or more
Where it goes: Acorns or no temptation account
Debt: High Debt 45 + (you’ll have to do to 1% for all the other accounts and lower your expenses if they are over 50% of your income)
Normal debt 0-45% ( we also want to eradicate the debt unless it's paying for itself then we can take some time but still pay it off
Where it goes: send the money to pay as soon as you get it. Don’t hold it, don’t smell it, pay it out asap.
Expense: High exp: 50% cap
Low 20-30%
Where does it go: Expenses account, and prepay all your expenses from electricity to internet doesn’t matter pay it off
Fun: High exp 1-5% cap
Low: 15% cap
Where: your fun account go have fun, you earned it
Charity: High debt 1%
Low debt 1%-10%
Where: send it to the charity as soon as you get it
Tips:
- Make sure they all add up to 100%
- Pay off your smaller credit cards first, we are creatures of emotions, not really logic, this to build confidence
- Prepay expenses as soon as you get paid
- You can do this exact same process with envelopes
5. I’ve been doing this for the past 4 years. Try this for a minimum of 180 days, if it doesn’t work for you, contact me on Instagram, and I will personally give you a free 10-hour call on how to do it correctly.
Rules: never borrow money from accounts, be realistic and don’t go back to your old ways
Final thoughts:
I want you guys to feel free to comment down below or dm
your progress, I want to see how you keep growing.
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