Russ Lowry walks through the basics: list your expenses and income, track what you actually spend, cut recurring charges you don't need, and aim to spend less than you earn. Simple moves like bringing lunch and limiting dining out free up money for savings.
One more tip in the financial series. You'll hear me mention this a lot about budgets, just in case we're not clear about. What I'm talking about is a budget is when you put all of your expenses on one side, your income on the other, and you try to spend less than you make. The average American these days has less than $1,000 in their savings account. A major car repair damn near bankrupts people because no one saves their money and they live on more than they make. So they're going in debt with their credit cards. Never do that. And one reason people do that is they don't know what the hell they got going on. Like I've discussed before, all the little expenses that add up, they might have hundreds of dollars, thousand dollars or more in stupid reoccurring charges. So we're going to get rid of that and then we're also going to look at spending less than we make. So if we make $5,000 a month as a household, we try to spend three or four. And we do that in lots of ways. But first off, we have to track it. So what gets measured gets done, as we know in business. So you need to have that on paper and see what you're spending. Sounds very simple. But I can tell you that very few people when I used to be a financial planner had budgets. Very few people, my staff, even when I talk to my staff about this, my business clients quite often will talk about their budgets. Very few people do that. They get money and they spend it and they don't know what happens at the end of the month. So having a budget changes your life. Seeing what you're spending, you track your spending. You set reasonable budgets and you don't go over them. And this allows you to save money every month towards your future, save money towards vacation, save money towards a car. I like to earmark stuff like that so I have it when I want to buy a new car, which isn't very often. We pay cash in our family when we buy cars, we have a bucket of money for that. It eases that burden and often allows us to pay for it in full. Then, or depending, I can save up really hard for a few months. So set a budget, set all your expenses, look at everything you spend. Cut out a lot of them. Be reasonable on food, entertainment. I mean, you want to have a little fun. One date night a month. I mean, a week is good. Going out to eat six out of seven days, probably not good, that blows a lot of money. So. And look at things you're spending money on at lunch at work. Sometimes people are surprised when you're blowing you know, an hour's worth of time on lunch or more. So bring your lunch occasionally. Little things like that add up in the long run. Sounds simple. You think people would do it? Few people do. I preach this to you guys all the time. Riley just started his new job and I've talked to him about that bringing his lunch occasionally because just eating up, eating out adds up takes time you know and it's usually not as healthy as you can bring your own lunch. So try that budgeting expenses income spend less than you make save. Then you can go on nice vacations and pay cash for them do fun things if a car needs work if something happens at your house, kids, sports, whatever you have an expense. It doesn't break the bank. You've got it in your savings fund. You built out for that.
