How To Budget And Save Money | Money Management Tips

Are you looking for ways to stop letting money control your life?

I would like to provide you with some money management tips on how to budget and save money. Saving is very important. You have to make sure that you are putting money aside every month.

The problem is that most people do not budget or save money. In fact, most people live paycheque to paycheque.

Whatever money they earn goes directly to paying off their monthly expenses. Therefore, there is no positive cash flow that they can then use and put aside.

Watch the video below:

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If you are living paycheque to paycheque, then you are stuck in the rat race, and you are never going to be able to get ahead. Before you can even think about investing money, you need to make sure that you manage your money and set up a budget. A budget is a way of sacrificing something in your life.  When I was younger, I remember that I never wanted to make a sacrifice.

I wanted to make money and spend money, but I soon realized that living that way was at a cost to my future. You cant live for today, rather, you need to think ahead and prepare for the future. Ask yourself, “How much is my budget going to be/month?”

Make a list of all your existing expenses – credit cards, online banking, receipts, debit cards, etc. You need to go back several months in order to identify your patterns of spending.  Go through every transaction that you have and add it all up. It’s even better if you can categorize your spending. You can track this by using Microsoft Excel, a Google spreadsheet, etc.

Examples of categories could be rent/mortgage, cell phone, internet, gym membership, groceries, eating out, entertainment, car payments, gas, transportation, school fees, etc. When you look at the total number of what you are spending every month, it will be an eye opener for you, and you will realize how you are living.

Make sure that you are tracking this on a weekly basis, especially at the beginning. In addition, you need to track and add up how much you are making from your job, business, investments, passive income streams, etc. From this list, you will know what your expenses are and what your income is.

You always need to make sure that your income is higher than what your expenses are, and that you have a ‘positive cash flow’, which will allow you to save money, invest, build a business, etc. If you find that your expenses are too high then you need to set up a budget.

Ask yourself, “How much do I want to save every month?”  From there, look for ways of how you can cut down on your spending. I also highly recommend that you use a debit/visa card for all of your transactions. Doing so allows you to see where your money is going every month, and it helps you build up your credit score.

If you budget and track your spending every week, and you are ensuring that you have a positive cash flow, you will have a better sense of control of your life. It’s important to do this as early as possible. If you can’t manage a certain amount of money/month, you will be in trouble when you start making a lot of money.

Once you have a foundation and have developed strong money management skills, this will help you succeed in the future. Harv Eker said it best – “It comes down to this: Either you control money, or it controls you. To control money, you must manage it”.

Its time to master your money so that you can move forward with your life goals and experience financial freedom! The choice is yours. Are you ready?

Video transcript

Hey everyone, Stefan here from projectlifemastery.com, and in this video I'm going to talk to you a little bit about how to budget money and how to save money. Saving money is very important. You've got to make sure that you're putting money aside every single month, but the problem is that most people don't budget their money and manage their money in the first place. In fact most people they're living paycheck to paycheck where their expenses are a certain amount of money and whatever money that they're earning is going directly towards paying off those expenses.

Therefore they don't have any positive cash flow that they can then use to save and put aside. If you are living that way if you're living month to month, paycheck to paycheck and you're not saving any money, then you're stuck in what is called the rat race. The rat race basically means that you're never going to be able to get ahead because you're just repeating the same cycle. You're not taking money that you can save, that you can invest, and help users to build your financial future, to build a business, to make passive income etc.

Really the most important thing that you've got to understand before you're even in a position where you can invest money and all that sort of stuff, is you've got to make sure that you manage your money and you set up a budget. A budget is basically where you say that you're not going to spend more than X amount of money. You've got to decide what that is, what is realistic for you but a budget is a way of essentially sacrificing in some way in your life, which is a very important thing to understand. For me, I remember in my life I never wanted to make a sacrifice.

I just wanted to make money and spend that money, but then I realized by living my life that way it was at the cost of my future and that by living my life that way as time were to go by that I was taking away from my future life that I was going to have one day. When I had kids one day or a marriage or a family or whatever it is that I was going to struggle at that point in my life. You've got to think ahead for your future. You can't just live for and think about today, you've got to think ahead and prepare for the future and that means sacrificing some instant gratification. 

Make a list of all your existing current expenses

You've got to delay gratification and make a sacrifice. Budgeting you've got to decide how much is your budget going to be. That you're not going to exceed what that is. What I recommend you do before that is make a list of all your existing current expenses. Go through your credit cards or debit cards or online banking, your statements, go through your receipts, whatever you've got to go through, and go through every single transaction that you have and add it all up. Because the first place to start is you've got to know exactly where you're at.

You've got to know exactly where your monthly expenses are and how much it is that you're spending on a month to month basis. I do recommend you go back several months because you've got to see what the pattern is. It's even better if you can categorize it into different categories. A great way of doing this, you can use the software, you can use Microsoft Excel, you can use a Google spreadsheet, you can use Numbers if you're on a Mac, but actually set up a spreadsheet or track it whatever the way that you want and add it up.

Get out your calculator and add up exactly how much you spent on a month to month basis on your rent or on your mortgage. Whatever that number is, write it down, put it under a column or a category. That's exactly what your monthly rent or mortgage is. Another category is going to be putting in exactly what you spend every single month on your cell phone bill. Put exactly what that is. Again, go back several months to know exactly what that is. There might be some months you might have spent more than what your bill traditionally is but you’ve got to know exactly what that is.

You're going to look at your Internet bill, your gym membership. You're going to look at how much money you're spending on a monthly basis buying groceries, eating out, entertainment such as going to movies or playing video games or whatever that is. Again, these are all different categories. You've got to look through all your transactions or statements and add exactly what that is to know exactly where you're at. Your car payments, gas, your bus pass, transportation, taking a taxi, whatever that is, break it up into categories.

Maybe another category could be investing in yourself like books and courses, whatever. Know exactly what you're investing in every month there. It could be a coach, it could be a mentor, it could be your school tuition payments or your student loan. Whatever it is guys you've got to have a spreadsheet or something that's tracking everything. That way you can add everything up. You know exactly what you spent every single month for the last several months.

When you look at that number it's going to be an eye-opener for you. You're going to actually realize the reality of how you're living. Then what you're also going to do is going to add up and track exactly how much you're making every month as well. That's exactly what you make from your job, maybe from your business, maybe from other income streams that you might have such as investments, such as … I don't know things that you might be doing on the side, but you've got to make sure you track all of that as well and you've got to know exactly what that is.

Make sure that your income is higher than  your expenses

Basically, by doing this exercise you're going to have a list and you're going to know exactly what your expenses are and then you're also going to know exactly what your income is. You're always going to make sure that your income is higher than what your expenses are and you have what is called positive cash flow. Positive cash flow. Very important, that's what's going to allow you to save money every month. That's what's going to allow you to invest, to build a business, to do whatever it is that you want to do, and have those savings for whatever it is you want to invest in.

If you find yourself your expenses are too high, then you've got to set up the budget. You've got to decide again how much do I want to save every month? Is it one hundred bucks a month, is it a thousand bucks a month and then look at ways that you can cut down and lower your expenses. That's creating a budget. You might decide, my budget is that I'm not going to spend more than two hundred dollars a month eating out. You've got to enforce that, that's what the budget is. I'm not going to spend more than two hundred dollars a month on clothing. That's the budget.

I'm not going to spend more than X amount of money on transportation or on alcohol or whatever it might be that you're spending money on. In some cases, you might decide I've got to find a cheaper cell phone plan. I've got to sell my cell phone and get a cheaper phone. I need to get rid of my car and get a bus pass instead. Again, these are sacrifices that you might have to make so that you can save money and set yourself up for your future. Set that budget and then the other key piece is guys, you've got to make sure that you are tracking this on a weekly basis especially the start.

On a weekly basis. This means that every single week, you're going to want to go through your credit card statement, your bank statements, everything and add everything up and put them in the categories that you have set up in your spreadsheet. I recommend doing this weekly because it'll be faster if you do it weekly. If you leave it every month they'll be a lot more transactions and you're going to procrastinate you're not going to do it. Weekly helps you understand where you are at with your budget and it will help you realize hey you know what?

Use a credit card or a debit card for all your transactions

I spent a little bit too much just last week, I'm coming up close to my budget so I need to cut back a little bit. Do it every week, very important. Then the other piece is I highly recommend that you use a credit card or a debit card for all your transactions because if you're spending cash on things, it's very hard for you to track that whereas if you're buying everything on your credit card, then you're going to be able to see everything. You're going to see where your money is going and be able to go through all those transactions.

Using a credit card is beneficial because it's helping you build up your credit score which is very important especially at a young age to build your credit. If you have a problem with overspending with credit cards, then I would recommend setting a limit on the credit card. You can call your credit card company and say, “I want to have a limit of a thousand dollars, of two thousand dollars,” or whatever that limit is to ensure that you don't overspend that, but if you're doing that every week you're tracking things, you're going through your statements, you know exactly where you're at.

You have that awareness and you're ensuring that you have a positive cash flow then that's going to give you the ability to save money and you're going to have a better sense of control and confidence over your life of managing your money. It's very important that you do this as early as possible because if you can't manage what you currently have, then there's no point going out there to try to make more money because if you can't manage two thousand dollars a month, five thousand dollars a month if you make ten thousand or more if you make a million dollars a year, you're going to be in trouble if you don't know how to manage that because then you're going to get into serious financial trouble.

That's why it's better to learn how to manage what you already have. Master managing what you already have and then as things grow you'll have that foundation, these money management skills that will help you to succeed at a later point in your life as well. Thank you for watching this video. Hopefully, you enjoyed it. Check out the videos that I have on investing for beginners if you're in a position where you're able to save money and start to invest. 

If you want to learn how to build your online business and make more money online specifically passive income, then check out the link below to a free course that I have that share seven online business models that help make me an Internet millionaire that will help you get started building your online business. Thank you guys for watching this video and I'll see you in the next one.