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Not all that wander are lost

Sometimes the path does not lead us where we think we should go. Maybe this article will help:

Making Your Plan

Money!

Boom! I dropped the M word.

Before we get into the financial planning part of this session, let’s sort out your view on money.

Negative Bias

The best and easiest way to start resolving your issues with money is to change your relationship with it. Stop saying you don’t have enough money and start realizing your opportunity to make money.

Thinking you don’t have enough money creates a sense of lack. That sense of lack begins to be stories you tell yourself about not having and not being able to. Those repeated stories become sanskara, or neural pathways. These thought patterns are like trails in the woods. The more they’re traveled, the easier they are to travel. You’ve made it very easy to travel the “can’t afford it” path over years of this concept of lack in your view of money.

Money is a thing of the past. You spend it once and it don’t come back.
- Rev. Bobby Joe Smalls

You will always have opportunity to make money. It just depends on what you’re willing to put into it. Even now, right now, you have something you could sell or some service you can provide in exchange. It’s not about waiting for “enough” money. It’s about going, doing, earning money.

Sorting out the dollars

Now that we’ve changed our focus, let’s ask the dreaded question: How much?

Making your financial plan is a three-step process:
1. Determine how much you spend
2. Reduce your bills
3. Re-calculate how much you’ll need to cover expenses

I’m going to be straight here, building your financial plan and executing it can take a long time. The less of a grasp you have over your financial situation this minute, the longer it will take. I encourage you to begin as soon as your done reading this session.

Your Current Spending

The best way to grasp your current spending is to track it. Looking at your credit card statement is only part of your spending. Looking at your bills is only part of your spending. Blindly estimating what you spend is… well… foolish. Track it.

It’s daunting, but with good habits, it can be pretty fun. Take a few weeks (I suggest one month) and track what you spend in cash, on credit, and through auto-drafts. Track it on a daily basis. Use an online tool like Evernote or Dropbox that will allow you to access the track from anywhere. A little notepad and pencil can make you look like a sleuth on your daily route. That’s kinda fun.

Keep in mind that utility bills can change depending on the time of year. Also, consider bills that you know will increase, like a membership fee.

You’re spending how much?!?!?

Now that you know how much you spend, it’s time to weed out the unnecessary. You have to give up some things. Unless you’re already Frugal McGoo, there’s probably some places you can cut back.

Take a look at that month’s tracking and see what jumps out at you. When I did it, I was spending hundreds of dollars each week on “a few beers”. It was never just a beer with my buddy. It turned into a few beers + food + a cab to be safe. $20 for “a few beers” turned into hundreds quickly.

Stopping the hemorrhage

Start cutting back. I know it’s easier said than done, but easily and slowly begin to knock some of those bills and entertainment back some.

Resolve to stay in one night each weekend. Use the time on your business, or to rent a movie. You know how much cheaper a rental, home made pop-corn and a two liter of soda is? Depending on the size of your family, it’s easily $100 savings.

The key to this money thing is to figure out where you’re spending your money, find ways to cut some of it, then resolve to doing so.

Repeat this process another month and see what you’re spending is the second month around. This is a much closer estimate of your realistic spending. It’s what your business needs to generate in order to be sustainable. Remember, though, that’s net, not gross. You still have taxes on what you earn. I lean hard and consider taxes 30%

For the quitter, use that second month’s tracking as your estimated monthly spending. Multiply it by the number of months you’re comfortable having no income and that’s your number. This is the minimum you’ll need in savings to just quit your job. It’s also a good trigger for you to actually do the quitting.

The secret to becoming rich is not knowing how to save, but knowing how to spend.

Spend thrifty my friend,

Digital Nomad Stu

Quitting is for Winners GuideQuitting is for Winners – Chapter 15:
Includes the Expense calculator Bonus Tool. According to financial planners, this tool alone is worth hundreds of dollars to people who struggle with creating a budget.
The case against cable TV – Can save over $100/month.
Super-detailed ways to track, limit, and feel good about your spending.
Lots of cost-saving examples… like a programmable thermostat and turning your water heater temp down so the highest shower setting is comfortable for you.
The best advice to paying off debt including a loan amortization Bonus Tool.
Shifting from convenience based consumerism to necessity based consumerism.