Here's how I work my finances:
1) Live Simply - Example: I drove & loved my Mini Cooper until a couple of years ago. I bought it used and in full for £4000.
Why? Because living minimally allowed me to work for myself via my business, travel at will, help my family, & live life on my own terms by giving for a living.
2) I live off of less than 40% of my income - I do this with the help of my budget. It's a critical tool in my financial toolbox. I also actively search for discounts (I try to get at least 1/2 off my holidays doing this.)
After all, why overspend on one holiday when you could book two?
3) I take care of Beverley - Beverly is my 80-year-old self. I do everything to ensure she's happy in the future (that's why I save & invest 50% of my total income for retirement & investments.)
4) I give - I give away 10% of my total income to causes, people and organisations that touch my heart (this keeps me motivated to save & makes money more fulfilling.)
5) I allocate - I allocate my monthly salary & designate percentages into different areas of my finances.
Total Income Before Deductions:
- Taxes: 35% from my total income
- Donate: 10% from my total income
- Retirement: 20% from my total incomes
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- Live on the 35% from my total income
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TOTAL: 100%
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Here's what I do with my take-home pay AFTER THE ABOVE DEDUCTIONS are allocated.
(Aka, the 35% I live off of as illustrated above)
- Investing for Wealth: 20%
- Emergency Fund: 5%
- Travel Fund: 5%
- Expenses (ex. Bills): 70%
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TOTAL: 100%
You might be thinking, 'She has no fun with her money!'
But here's the thing, by spending less on the silly little thing, I can spend more on the bigger things that REALLY make a difference in life (Traveling, Homes, Family, Etc)!