How To Do A Budget?
Subscriber Request - With A Real Life Example Using Our Own Monthly Finances
We had a subscriber ask for an example of a real life budget. We took our own paycheck and our own monthly spending for the last 3 months and summed it up for this post. We normalized the numbers for a $100k salary to 1) not income dox and 2) use round numbers.
This post will walk through how to find your ‘budgetable’ after-tax income starting with your W2. This is an often overlooked step and arguably one of the most important. If you don’t know what your actual budgetable amount is, how do you set a budget?
Once you get the number you need to use for your starting budget, we show how our current spending breaks down as a % of our income & in $ amount for a gross salary of $100k a year. (You are working till you hit a 6-figure income minimum correct Anon).
We also provide you with what a $100k salary looks like under the recommended 50/25/25 rule.
To wrap it all up, we talk about how we handle variable income (bonus & commissions) and even hop in the way back machine and re-create our split between spending & savings since we were just young lil fresh-faced F’er, right out of college and earning more money than our parents ever earned in their entire lives…(that one hurt a little thinking of all the over-priced drinks and vacations we partook in when we had a grand opportunity to save & build….).
A lot to cover this week, and also why this post is coming out a few days late.