Ok, are you ready?
Here we go…
If you have been following along, GREAT this blog is for you.
You haven’t read the first two yet? CLICK HERE
Now I am going to attempt to break this down in a “See, Spot, Run” basic way. So if it feels a little clunky, or oversimplified, GOOD.
Ok, in front of you assemble your list of PREDICTABLE MONTHLY EXPENSES. Remember that next to each item you want to have overestimated each of those predictable expenses by $5 – $10.
Remember the phrase–More Money Not a Problem. Less Money a Problem!
Also, get your little notebook that lists your daily in-coming money (salaries) and out-going money (expenses).
If you do not have these two things with at least a week of data from your notebook – wait a week and collect that data…
If you are thinking, “Peter, if I do not do this budgeting thing RIGHT NOW, I am never going to!!!”
Then buddy, let’s get this ship righted!
STEP ONE – Add up the amount of your PREDICTABLE MONTHLY EXPENSES and then do it again to make sure you got the correct number.
STEP TWO – Breathe.
STEP THREE – Congratulate yourself! You now know how much it costs to house and take care of your basic needs per month.
When I did this for the first time – I was baffled… I honestly never knew before. Keep in mind this number does NOT include food.
STEP FOUR – Ok, if you have a week of outgoing expense data – great – add it up. If you have more than one week, add up each separate week, and whichever week has the HIGHEST number (More Money Not a Problem. Less Money a Problem!) multiply it by 5.
Now, I realize that most months only have four weeks in it but again – More Money Not a Problem. Less Money a Problem.
You will then have the number of UNPREDICTABLE MONTHLY EXPENSES – obviously not exact, but a good idea of what they are.
STEP FIVE – Add the amount of your PREDICTABLE MONTHLY EXPENSES to the amount of your UNPREDICTABLE MONTHLY EXPENSES and then do it again, to make sure you have it correct.
STEP SIX – Breathe.
STEP SEVEN – Congratulate yourself! This amount that may (if you were like me) be causing you to hyperventilate is your MAGIC NUMBER.
This is INCREDIBLE knowledge!!!
Why call it your “MAGIC NUMBER’?
Well, my friend, it is magical because now you know how much it costs to run you a month. And THAT ultimately will be freeing. Knowing your MAGIC NUMBER is the first step to REAL HONEST-TO-GOODNESS Financial Freedom.
And that. Is. AWESOME.
So now you know it costs… let’s say $3000 to run you a month (Remember $3000 is your MAGIC NUMBER.)
With that information in hand, look at your job (or jobs), as the case probably is in this Gig Economy we live in today.
Let me give you a real-world example.
Let’s say you are a waiter, and you KNOW that you make $200 per shift AFTER TAXES. Again, it would be best if you erred on the side of too many shifts because – More Money Not a Problem. Less Money a Problem.
You would then divide 3000 by 200 and end up with 15.
Again, CONGRATULATIONS! You’ve learned that for you to make your MAGIC NUMBER; you need to work 15 “worst-case” shifts per month.
Let me tell you a little story…
I remember when I discovered that I would need to book 10 coaching clients a week to make my budget… I was like “wait, that isn’t impossible. I could do that!”
I put signs all around my apartment, saying, “10 clients a week.” I kept saying to myself “10 clients a week,” and before I knew it I was coaching ten clients a week and making my budget…
Well, that was until I stopped following the Budget System and had to start all over again… see your teacher isn’t perfect – She. Has. Been. There. In the thick of it. In the mud. Covered in blood and tears. I know it ain’t a pretty place to be.
But, this only happened to me once, and I started this process all over again. I’m telling you this because you may have missteps, mistakes, or false starts. THAT’S OKAY. It’s normal. The key is to get back on the horse again.
AND IF AT ANY POINT YOU ARE NOT GETTING IT OR THINK THERE IS SOME PROBLEM THIS SYSTEM CANNOT MANAGE – LET ME KNOW! Or reach out to Rose Marie- Acting Business Boot Camp’s Budget Coach.
I am 1000% committed to helping you do this and your questions will only help me to communicate and explain it better to others and help them to become Financially Free.
OK, back to work…
If you have two jobs, this can also be calculated… UNDERestimate the amount you make per “shift” in each job and then see how much you would need to make (in each job) to make your MAGIC NUMBER.
Now you may be thinking, “Ok, all fine and good PPR, but what about…
…if your MAGIC NUMBER is just not possible for you to make at the moment – for (insert whatever reason)… “
Well, then, go back to the list of PREDICTABLE MONTHLY EXPENSES and the list of UNPREDICTABLE MONTHLY EXPENSES and see what you can cut down.
A word of caution about doing this last bit though…
As a Coach, I STRONGLY advise you to seek ways to make more money rather than spend less money as this really contributes to stronger, healthy money mindset.
Say these phrases to yourself:
I CAN HANDLE THIS.
I CAN MAKE (INSERT YOU MAGIC NUMBER) AND MORE EVERY MONTH WITH EASE
I MAKE MY MAGIC NUMBER WITH EASE AND GRACE.
I HAVE MORE THAN ENOUGH MONEY TO TAKE CARE OF MYSELF.
These phrases encompass a strong, healthy money mindset.
Next blog I’ll be discussing how to keep track of your PREDICTABLE MONTHLY EXPENSES and UNPREDICTABLE MONTHLY EXPENSES and more tips to keep this incredible practice in your life.
In the meantime, your assignment is to start working with what you have learned and most importantly keep that little notebook tracking your DAILY incoming money and your outgoing money!!!
This data will continue to hone that MAGIC NUMBER and keep you CONSCIOUS of your Money Habits.
The first Intensive of 2020 is February 22nd and 23rd! We have a few spots left. Click HERE to find out more.