Taking Full Control of Your Finances - Budgets, Templates, & No More Debt! | KW Professional Organizers | Skillshare

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Taking Full Control of Your Finances - Budgets, Templates, & No More Debt!

teacher avatar KW Professional Organizers, Organization | Minimalism | Self Care

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

18 Lessons (2h 16m)
    • 1. Taking Full Control of Your Finances

    • 2. Why Are You Doing This Course?

    • 3. How to Download the Template

    • 4. Becoming Aware of Your Current Situation

    • 5. Creating a Monthly Budget

    • 6. Comparing Options

    • 7. Creating Specific Budgets

    • 8. Calculating Your Net Worth

    • 9. Understanding Your Cash Flow

    • 10. How to Get Rid of Debt Fast

    • 11. Investing and Compound Interest

    • 12. Tracking Your Expenses with Paper Receipts

    • 13. Tracking Your Expenses Digitally

    • 14. The Envelope System

    • 15. Emergency Fund

    • 16. How to Organize Your Financial Life

    • 17. How to Organize Your Finances with Your Partner

    • 18. Next Steps for You

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About This Class

Break free from paycheque to paycheque. Bring clarity and confidence to your financial life.

It’s time to start making intentional decisions that will bring you closer to your dream lifestyle.

In this course, you will learn a step by step method to take full control of your finances.

You will learn:

  • How to become aware of your current situation

  • How to create a detailed budget.

  • How to integrate extra expenses like Christmas, vacation, retirement.

  • How to organize your financial life

  • How to organize your finances with your partner

  • How to understand your cashflow

  • How to compare options so that you can make confident decisions

  • How to create healthier habits around money

It's a very PRACTICAL course that you will be able to follow.

Are you ready to change your financial situation?

See you inside the course.

What you’ll learn

  • How to create an intentional budget
  • How to create healthier habits around finances
  • Understand your relationship with money
  • How to pay off debt fast
  • How to track your expenses manually and digitally
  • How to automate your financial life
  • How to organize your finances with your partner

Are there any course requirements or prerequisites?

  • Willing to dive into your personal finances
  • Ready to create a healthier financial plan to sustain your desired lifestyle

Who this course is for:

  • People who want to have a crystal clear understanding of their finances
  • People who are tired of living pay cheque to pay cheque
  • People who want to include fun stuff in their lives
  • People who want to enjoy financial freedom

If you are interested in diving deeper into other areas of your life you can find more in-depth video courses about home organization, paper management, finances, selfcare, meal planning, lifestyle design, and more on our profile https://www.skillshare.com/user/kwpo

Meet Your Teacher

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KW Professional Organizers

Organization | Minimalism | Self Care


 ... aka Emilio and Samantha.


Our most popular courses include How to Declutter & Organize Any Space, What the Heck is Bullet Journaling?, and Meal Planning for Any Diet. 


NEW course just published:

How to Stay Motivated While Decluttering & Organizing

How to Create Your Own Self Care List

How to Clean & Organize Your Fridge 



Let us know what you'd like to see from us next :)


P.S. Emilio is now available for 1 on 1 coaching. Learn more at emiliojosegarcia.com

See full profile

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1. Taking Full Control of Your Finances: Hi. Thank you so much for taking my course about personal finances. My name is Amelia Jose Gothia, and I am going to be the instructor for you. In this course. I am the co founder of a company co kw professional organizers. And together with my partner, Simon Fast. Since 2000 and 12 we have in passionate about helping others get organized in different areas off their lives. We help people create intentional lives on lives that include everything that they want to see. Personal finances is a big struggle for many on getting control off. The personal finances is ago that a lot of people have, but they don't really know how to get started, and they don't really know what steps to follow. This is why, after helping a lot of people on after, like creating other courses, we have found a very cool way off doing it. I personally have read the my Unity off the main books that you may find about personal finances. Big authors like Ramit Sethi, like David Back Dave Ramsey on Tony Robbins A lot off those. They have a brilliant right, really good books. But after reading them, I always find that people get stuck in the practicality off getting started. So they read the book, they know the steps, and then they need to follow. But they go home. And then what? How do they get start? How do they actually get started with the numbers? It's very overwhelming, very intimidating for show. That's why I felt empowered to create this course. I'm gonna share a method that I have used with clients, and it works really well. And they have created a template that has been reviewed by an accountant by a financial adviser on by many other professionals in the field so that that temperate includes everything that you need to take full control of your finances. So you're gonna be able to create a very intentional bag. Yet you're going to be able to understand your current numbers. You're going to be able to calculate your net worth to compare different lifestyle options because sometimes you may have different options that you haven't think about. But putting numbers to those options is really helpful to make really confident decisions on after that, how you create a state based their process that you can follow and maintain or not regular basis. This is what this course is all about. I hope you can join me in the course. I'm gonna get you through the process step by step. It's gonna be very simple. It's gonna be very easy for you to follow with lots of examples and you're going to learn a lot. By the end of this course, you're going to be from full control of your finances, and you're going to be able to create what you want to see in your life. You may take longer or no, depending on how much do you have. But I'm gonna show you a very practical and very intentional way off creating a financial plan to sustain the lifestyle that you want to have. If you are ready, please join me in the course. We're gonna go through the temperate and we're gonna teach you everything that you need to know. OK, so if you have any questions, we are always here on. I hope to see you inside the course 2. Why Are You Doing This Course?: So before we dive into the numbers, the first thing that I want you to do is I want you to write down. Why are you doing this? What is the motivation for you to take full control of your finances to get started with his course? This is really important. Why course? We find that when people get through the numbers on and start seeing the behaviors that they have spending, and it's not an easy person sometimes and you're seeing your life, your senior behaviors. Maybe you don't like what you're seeing. Maybe you do like them, but it's always nice to see the light at the end of the tunnel. So basically what happens is that if you lose a little bit off the motivation or things that are really hard or a truck, it's required to have a little bit of time to track those numbers, like by you know in that by the end of this process, you are going to get that thing that you want. That's what's going to motivate you to keep going, because it's gonna be worth it. So how to do that? You can use a journal just bright. It in your journal. If you used a journal, I encourage you to put it somewhere that you can see it every day. For example, in my journal, I like a vision, and it's like a drawing that looks like this. And this is what I want to see in my life. This makes sense to me on. I also have affirmations in the back of the paper on every time I open my journal, these pages in there on sometimes I also take this and then I can put it. You can put it without or not on a cold bore off somewhere where you can see it on a daily basis. This is really important because it's reminding yourself how important these processes for you. If you're not a person who likes throwing, you can also do something ideas. This is our what we call a creation. We do this every few every 3 to 6 months, more or less. It depends how we feel. But this one, for example, a minute in your life on. Then I just track the things that I want to see in my life, and I also have a little drawing here off they're before on the Andy After how I want my life to look like on every time I look at these, it's have course and reminded off the things that I want to make happened in my life. So for you, why do you wanna do this course? Why do you want to take control of your finances? And it's not just because I want to make one morning or because I want to save. I'm really sure that if you start digging deep inside, you will find the true reason. So I recommend you as yourself y five times. Okay, So why do you want to take food culture of your finances? May be your answer is because I want to get out of that. Why do you want to get out of that? Because that will allow me to travel. Why did you want to travel? Because you see, so you start asking why? Why? Why on normally when you asked five times why you find really good and strong result off why you are doing this process. So once you find that recent bright it down, put it in a place where you can see every single day put every Monday on your phone. If you are the person, try to remind yourself every day. Why do you want to do this process when we're doing the exercises where things become hard for you? If they do become hard, always look at that piece of paper or after notification on, remind yourself by the end of this process, I'm going to get these and it's gonna be so worth it. I'm gonna feel so well on my left is gonna look amazing. So do that. Please do that bright on a piece of paper on. Then don't go to the next lesson until you through this exercise, because it's really important. OK, on. If you want to share it, share it. Okay. See you in the next video. 3. How to Download the Template: So let's see how to get the template that is included in this course. So once you download the temperate Okay, this is how this is the file that you will see so you can right click here and you can select to open weave. You may have different options. In my case, I can operate without Excel. Microsoft Excel If you don't have Microsoft Excel, you can operate with that liberal office. So that's our so for that, you can find you can find right here I'm gonna show you where to find out. So you go to this website livery office dot or on you can find you can download it for free . So as this is, basically it's like a Microsoft office but is free so you can see the options. Here you can learn what's Liberty Office? And then there is like a spreadsheet that you can use her work process or that you can use . You can also do presentations like a power point. You can have a database, so it's basically like a Microsoft office, but it's free. So if you had here to download, you can say, like the program right here and then you can choose the one that you want. Okay? It's a very powerful program. And if you don't have excel and you don't want to pay for it, you can just do that. So I'm gonna I just that were quick to open the file on. Then this is what you will see. Okay, so I'm expanding these for you to see. So the document has three taps here. The temperate. So one top says budget. The other one says net worth on the other. One says, compare options. The worry too much about how this looks like we're gonna go through everything, and we're gonna use it in every lesson of this course. I just want you to be able to open it, and then you can type here file, and then you can save it with a different name. If you want, you can save us, and then you can sit back there the name that you want and the location, or you can just keep it the same. Okay? 4. Becoming Aware of Your Current Situation: Okay, so you have a really comparing reason of why you're doing the process. That's what you need in the last lesson. If you haven't done it yet, please take a few minutes to go it as yourself the Y five times until you find that strong reason. So now it's the time to get started understanding your current situation. How do we do that? We do it by looking at the real numbers that are happening in your life. I always recommend going back like one more to mourns. Six months, even a year again, you can choose how long, but at least one or two months at least, is require. We're going to use a template that temple that I have created that you will see in a few minutes. It's really powerful. I created it, and I run it through an accountant through a financial advisor through a few people that are home owners on business people. So basically, that template has bean proved my different professionals in the field on everything is included in the temperate, so you will see that you can use a temple for so many different things, and it's just one template everything is right there and he's going to be amazing. You'll see. So before you get started, I forgot to mention one thing. You need to make sure that you involve others, So if you are single or you are just yourself and you are not sharing your finances with anyone else, then you can go ahead and just do it yourself. But if you are involved in a in a household, if you have a partner that participating finances if you have a business partner again finances you saw with something that it's yourself, maybe someone else's participating, too. If that's a case, you have to make sure that you involve them in the process. You have to make sure that they understand that you are doing these on that. They have an input on that. They participate here so at least let them know what you are doing. Maybe they want to do it together with you anything. It's really, really strong to do it together because once you see the real numbers, when you're making the decisions where you are, creating that kind of attack is no can be just yourself. It's kind of yourself with the person who is going to be involved. So it's really, really important this piece. OK, so it's knife into the template. We're gonna get started by reflecting with your numbers. How do we do these? You need to access the information that you all the expenses that you have hot. You can do this in many different ways. You can log into your bank account or line if you have access to it and then access the movements that you have the expenses on the incomes, you can do it. If you have the physical receipts, you can just look at the receipt on Add them up. You can access your credit cards again. You have to know where your money saving. You have to know how many accounts you have on then just looking to those things and then make sure that you strike all the information that you need to have a realistic reflection about how much money you're spending on where your money's going. Okay, so let's type into the template. The first exercise I want you to do ese, I want you to reflect on your current numbers, so in order to do that I would recommend you go back one month. I would recommend going back as long as you can. Of course, by that let's start just doing one more. Okay, let's say that two, they say that we had in February. So you're gonna reflect about generally just one example, So you will go to generally, and then you will go back to your bank accounts on dure credit cards and just look back. And then, yes, stab writing down all the things that you have spent and really things that you on the income that you had. So let's say, for example, you come here and then that's it at this 2000 and 20 so you can write their 2000 and 20. That's the year were working on. How did I say that you are going to be reflecting on January. So in the income you will right here, whatever income. So let's say that work you made that say that you made 2500. Okay, If you have a different source of income, you can right here. If you have a banner or someone else in your household that is bringing an income and you want to account it. You can also arrive here. Let's say that you have a side hassle on that site. Household is providing $750. Okay, on let's say that that's for you. If that's the only thing and you don't need this one, you can just go here, right? Click, and you could delete it. Okay. Going. Just gonna delete it. So, as you can see, these are you only are supposed to write on the white cells Do no bright anything on the gray ones because they are formalizing here. So these former NYSE B three on a plus before, as you can see. So this is your total income for the month. Now, I want you to go back to your bunker statements or you go line into your bank account and your credit cards on. Then I want you to reflect on all the expenses that you have. Where did your money go? So let's say that you paid rent and that was $1000. Let's say that you paid water. You have utilities you have water on. Let's say that you pay $35 for the water. Let's say that you have ah electricity team. Let's say that you paid $35 to Let's say that you have grow groceries on in here. If you have several receipts for something, you can do this. You compress equal and then you can write. Let's say that you have one. Expense was 25 0.4 glass, 13.56 plus 120 plus. I don't know, 85. Let's say that that's how much you're spending groceries. You heat enter, and then it does a calculation here for you. Off course, you can use pen on paper to if you are overwhelmed with this template, you can also use paint on paper. But I can tell you that if you invested timing in, just learning this is not very difficult. It's going to be way more powerful, and you will see the examples later. But you can also do this with pen and paper to let's say that you keep going with your experiences. Let's say that you have dressed around on. Let's say that you spend $25.1 night and then you spent $35 another night, and then you spend $75 another night on $15. Okay, so that's how much you're spending restaurant. So just keep going. You may have fine activities. You may have, Uh I kind of came in. Maybe you may have. Ah clo thing. Maybe you smoke. Just try to create the categories. That makes sense for you. The reality off your lifetime right now let's say that you hear spend. You went to a concert for $45 you went to the museum for $30 on you went bowling. And that was $24. So that's how much you spent in activities. Let's say that the car payment you pay $375 a month. Let's say that cloth in you when shopping for clothing and you spend $135 and they say that you smoke on every U boat for packages and they'd say that you paid up $6 times four because you smoked once one package a week. So, as you see you start currying the expenses, let's say that you like drinking so you can categorize that and then you can guess drug that specific thing. If you run out of cells you can just do these. You can guess. Said like that. Right click you can copy, and then you can write, Select the last one here. Right click and use You go insert Copy itself. Okay. As you see, it has done the same thing. So grow thing smoke and drink is duplicated, so you can just say like these things and delete. Okay? And then you can select these and guess right? Zero. So that this number that I'm making sense, right zero here. And then you can keep going with whatever expenses you have. Once you have all the expenses listed here, this is their sale that is gonna tell you, As you see, it's this is B seven. From here to here is doing the some. Okay, just double check that. That's correct. On If it's not correct the way to do these, you guessed that you just can change. Sees You see, you can do this, and you can include the sales. That makes sense. So just make sure that this going all day, all the expenses are included here. Okay, so right now this is your income. These are your expenses. And this is how much money do you have? If it's green, it means that you have made more money than you have spent. If for any result, let's say that your NT's let's say that during his $2000. Okay, you see that these changes are dramatically on. Let's say that your restaurants are $450. Okay, so now you over spent $146.96. So you see the power off the spreadsheet like once you type a number, everything else changes automatically for you. So this is the exercise that I want you to do right now. Go back one month. If you can go back more than one month, that will be even better so you can go back out like, let's say, if you want to go back to like January, let's say like December, November on October from last year. You can do that and that would be a different year, of course, but again like let's say that we had in May. Right now, you can do April Mountain February, and then you can have the tourist numbers that's going to give you a really good overview off your current situation and you're going to see where you are standing. Okay, so I want to show you one example. This is an example. Greg's budget. OK, so, Greg, he took the time to go 2019 the whole year. So, as you can see, all the cells are completed. So basically Gris has a regular job, and then he makes $2500 consistently every month. Then he has a side hustle on. As you can see, it changes every month. And then he knows how much money he made. Every move here on this is the total annually. So you he knows that he made $30,000 on the roller job. $4000 on the side. Hustle on. This is the Torah on. Decide the expenses that he had. He has a dog named Rex and then Rex. Every now and then, he goes to the vedo. He needs to buy food for him. So the numbers are changing here, and then he has rent. He has water, hydro, Internet phone. So these are they the expenses that he's having right now? So these are all the rial numbers. This is a total on early on, then these are the expenses for January February March. This is the Torah off income, minus expenses. As you can see, if it's red, it means that he spent more money than what he made on. If it's green, it means that he made more money that he spent. So, as you can see so months his green and so months leasing the red below. Here, this is something that we will do after. So once you know how much you spend Ideally, you will have a purpose for your money. If you have extra money, you will written Decide where how you are using it. I really you will pay yourself fares and then you will plan for retirement for vacation. Maybe you want to buy a house. Maybe you want to buy a car. Whatever makes sense for you. I really once we figured the budget thing out and then you start like being able to save morning on a monthly basis. And you have paid off your depth. This will be ideally what will happen, right? As you can see Greg, for example, he plants the same body for all year retirement. He wants to put away $300 vacation, $200 on he's saving to buy a house $300 a month again, as you can see, my unity of the months he's in the red. But one month he was in the green. So once we have all this information, that's when we're going to reflect what's happening in your life. Are you clean? Are you read up and then we will look at the specifics off every expense on again. This is not to make you feel bad. This is not to. This is on a war nous tool that we need to go. If you want to take control of your finances, we need to do this. It's really powerful, and you will see why. Because we're gonna work on the monthly budget after so you will see how this information makes total sense. When you are tracking the experiences, there is something cool that you can do. Let's say that expense summer one. Let's say that this is groceries. Let's say that you do equal and then decided you spend $45 plus 45 plus 55 plus 120 for example, Let's say that you have the receipts and you want to keep track off. Where do you spend that money? So you can write clicking here and you can insert a comment so you can creaking here. Insert comment. And now here you can write whatever you want in here. So you can say you can just write the Tories that you had in there, like for the fact or after I was Spain, out at supermarket number one. Whatever name you want. The $55. What's paining supermodel market to this is really powerful. You can do the zone on every cell. Once you're done, just creek somewhere else. And then when you Khobar on top, it shows up. So this is very nice if you have. If you have different expenses that require, do you want to keep track off them or you want to know what like, for example, we have our sports. We have a sports category, and then, if we, for example, I play squash if I spent $120 enough. Sorry if I spent $120 in a new rocket on, I spent $65 in a pair of shoes, for example. And I want to remember that later I can come here and I cant inside the comment on then I could say Ah, it's quash Rocket waas Put hurt on 20 on squash shoes, Shoes Waas $65. See now, when Time process If If I finish the Shia on, I want to remember why you spend 185. I have the I have the common here on. You can use this in any cell. So this is really, really powerful on these way. Allows me to know exactly where my money went on the amount on groceries, the same thing instead of having a total here, I actually have 25 45 55 on in the comments I could actually track. Why? If you want to get rid of a common, you just right clicking here and you just see the lead comet, pull any course away you see now is not there anymore. I know that this exercise can be a little bit overwhelming and it's probably the most time consuming exercise from this course. But why it is so important to do it because when you do this? Exercise your taking the time to reflect are your current situation. The only way for you to have a clear answer about what's going on in your finances is toe. Actually look at the real numbers because we all feel emotions. We may feel stress. Women may feel anxiety. We may feel that we are not doing enough. We may have a lot of that. We don't know where to get started, but the truth is, if we don't have the really numbers, all we're doing is making emotional decisions based on not the reality. When you have those numbers and you can look at the Excel spreadsheet or if you know what I use a spreadsheet, you can even do it by hand. Following the same template and using a calculator, I recommend this pretty, but it's an option, too. So don't don't let technology stand in your way. If that's if you don't want to do it and you don't wanna land, you can also use paint on paper. Yes, four of the same temperate and just do it on a piece of paper. But when you have Daughtry and numbers, that's when you can reflect. That's when you are going to see your behaviors. You're going to see where your mornings going on. That's when my unity of the people get surprise, because when I were with people and I do this exercise, they don't realize where their money is going on. It's a load off. There are a lot of ah ha moments moments off, like, Wow, I didn't know that we were spending 1700 dressing groceries. Wow, I had no idea. I was spending $750 in restaurant while I'm spending 450 routing coffee. Coffee? That's a big one, right? It's $3 here thrillers, their $5 here for the last there on if you do it twice a day, that's the latter factor that that someone our baby back speaks about in his book The Lot of Factor. Basically, it's the name of the book, so he mentions about finding those little spending that happened on a roller basis on day add up at the end of the month. So that's what we're trying to do here. We're trying to see what's going on. Are you in the red? Are you in the green. Are you overspending? Are you saving money? Every month on now we're gonna look at at how to create a badge. It based on this information because this is the reality off your life. And now you're going to see an example of how we create a budget based on the average spending. Okay, but please, please, please do this exercise. Go back as long as you can. At least I would recommend at least three months. If you can go more than that, that's fine. That would be great to if, for any reason, you have no access to bank accounts, you have no access to like past data. And you're starting from now what you can do. You can just start tracking things right now so you can open the temperate, and then you can start tracking things from from these month curry month, moving all from them. It will take you two or three months to kind of see what's happening, but that's better than doing nothing. OK, so option number one is just the best option is going back a few months to make sure that you know exactly what's happening, where your money's going Option two is just doing one month on option three If you have no access to data, Yes, start from now on and start tracking those things. In the next lesson, we're going to see how to create a zero based budget. This is something mentioning in a book on day from C on you will see basically means whatever money you make, minus the expenses. Miners, the things you want to save or invest into equals zero. So you are making sure that you have are sustainable lifestyle under your finances are healthy, so stay tuned for the next lesson. 5. Creating a Monthly Budget: Now that you have all the information in your spreadsheet, let let's have a look at Greg's example. Okay, lets see how we're going to focus now on creating the budget this year of zero based budget that we were talking before. So we're gonna make sure that income minus expenses on my nose, the savings that you want to have in your life equals zero. So that means that you will have assigned a meaning for every dollar that you are spending . So every dollar that you're spending house a recent and you know where everything is going . So let's have a big So Greg did the whole year 2019 from January, all the way to December on all the information is in here. As you see, this is the income. Every month is different because his side hustle changes every month. So the income is different. Every move here. But on the right hand side, this is the total. This is the annual income that he had on his regular job. This is the annual income that he had in his side. Hustle on. This is the total income on this is here. This is the average. So in here is 2500 because it's always the same in here. And as you see is 332.42. This is basically taking adding up all these incomes on dividing by 12 on double, if you the average off how much he made every month. Okay, and then these are all the expenses that he had. Total expenses are here on. This is basically his in the red or in the green. This is income minus expenses and, as you see so months, he's in the green and some once he's in the red under here. The Saudi savings that he wanted to have. So he wants to save $300 every month for retirement. $200 to buy a house on $300. Sorry. $200 for vacation on $300 to buy a house on decided total savings. It's $800 every month. As you can see that total here below this is this is basically all the income minus the expenses. Miners the savings aunt. He's in the red every month except for march. So, having this information now we can reflect. We can see what going off here and how can I make my goal? These are Greg's goals, like, How can I make my savings school on be able to have a sustainable lifestyle on a regular basis? So let's go to the monthly budget here on Let's start putting in the information that we know for sure. So we know for sure that he makes $2500 here. We know for sure that last year he made an average of 332 dollars a month. So let's say that he made 332. Okay, that's where he's going to make their rent. As you see, there was an increase from May to June is 13 50 now it's always going to be 13 50 again. So I just put 15 50 here, okay, And then we have the water. The average for the water is $21 on 83 cents. I'm gonna $22 again. As you see, the water is something that changes every month on keep pace every second month. So how do you translate that into a budget by saving the same amount every month? and in this case is $22. In the case of the Hydro, it's always the same, except for December, because he pays the same fee. And in December, they check the rial like me number in the meter on. Then that's the adjustment that he had. But basically, we're gonna use $63 here. Okay, And then hydro is sorry. Internet is always $60. The phone is or was $90. The G membership is $70 groceries. It varies every month, but the average is 530 $31. So I'm gonna do $532. Okay. The restaurants. It's also something that every month is different. As you see 453 51 78 880. Because it's Christmas time in December, but the average is $370. Okay, The fun activities I'm gonna take $222 comes from this average here because every month is there friend and then Transportacion $128 gonna take that is the average here. Aan den. He has a dog. Rex ont. He needs to pay for vet on food, and it's different every month. But I gained the average works to be 46 points. 17. I'm gonna just do $47 right now. We have the income and we have the expenses. So, as you see, he's already in the red. So right now, he's no making enough money to be able to save morning here. So what do we do here? So let's input the things that he wants to do here. So he wants to say $300 for retirement. He was to save $200 for vacation, and he wants to save $300 to buy a house so below here. He's in the red, $922. So what do we do here? This is the time that you can start being intentional with your money. So right now you have a crystal clear picture off what's happening. Greg knows how much money he's making, how much money he's spending on how much money he wants to save. So how can Greg make this a reality? That's when we start playing with the budget, and that's when we start making compromises on deciding where our money is going. So let's say that let's say that drained water, hydro Internet, those things can be changed. Let's say that groceries is something that if you meal plan, if you are a little bit intentional, you can probably reduce the amount. So let's say that he compromises on spending $400. Okay, so let's say that restaurants, for sure, is something that he can compromise on. So let's say that he says, You know what I can cut on going out on. I can put my budget to $250. So right now, as you see, he's in the green here, but he's still in the red ones. You discount all the savings that he wants to have, so he still needs $670 here. Transportation is something that he needs to move. Hey, wants to get rid of the dogs of the doctors that Rex it's amassed on the rent. He can't out. So the only thing that he can do here is increase his income. He could movinto a cheaper place if he moved into a place that the steeple and this that would be an option but he's very difficult to find, so he could increase. Hiss site has all because now he knows that he needs an extra $670. He can say, I'm gonna try and work harder here, and I'm going to try and make a consistent, let's say, $600 a month. So right now it's still short $400. So realistically here he needs to make on extract 1000 and two donors. That would be the budget like this zero budget, basically the income minus the expenses. It's $800 positive miners. The savings that he wants to have. That's the $800. So it's zero. So a dean of the month, he is not overspending, and he doesn't have extra money because he's saving the money where he wants to. Another option. If this is not realistic on, let's say I can push it to $700. I don't think I will be able to make more than that on a monthly basis. He still needs to find $302. So how can he do that? He can decide. Okay, I'm going to decrease, uh, how much money I am saving for vacation to $100. I'm going to decrease my retirement to $200 and I am going to decrease my house to $200. So right now he's almost there. So let's say that he's gonna make $702. They just do that on now. As you see, this is cereal. So this is another strategy. As you see, once you have the information, you can start playing with the numbers here, and you can be very, very intentional about how you create a budget that you feel comfortable with. I know Greg is really comfortable knowing that every month he's aiming to spend $400 in Russia is no more. He has $250 for restaurants. So what's gonna happen the month go zone on? If he's invited several times for restaurants, once he reaches the $250 he can then decide I'm not gonna go, because that's gonna put me over my budget on for me. These things the savings are more important than going out to a restaurant more than $250 this month, So now he feels very confident saying no, because he knows he can't afford it because he made a decision. Same with final activities. Maybe he's invited to go to restaurants and he says, You know what? I really want to go to here, and I won't increase made by the 2 $350. So that means that I'm going to decrease my budget for fun activities. So I'm gonna try and cut down the things that cause me morning by $100. So it's gonna be instead off 222. It's gonna be 222. And yes, what's this number here? When I hit Enter, it goes to CEO. So now he's some budget. Now he has tweaked the budget to work for his neat, and you can do this on a monthly basis, depending what's going on when Christmas counts. For example, you know that restaurants maybe hire you may have an extra category here for gifts so that you may be able to sacrifice may be fun activities or maybe restaurants. Or maybe again, you can be way more intentional about what? Your morning it's going. This is how you create a syrah budget, and I invite you to do the same thing in your situation. Try to work with your income with your expenses and then try to play with these numbers until you get the serial down here. Okay, off course. If Greg decides that I don't want to save anything, my work is no going really well. Let's say that the side hustle only produces $200 right now. Then he seen the red here, let's say that $202. So in this case, he's just breaking even without you. See, he's just breaking even here, like income minus expenses equals zero. So that means that below here, maybe he needs to do this. Zero Cedo and zero on that month. He's not saving anything. That will be the priority if he is running out of money. If he has a bad month, that will be the first step that he will do. Just don't say if anything, because you don't want to get into depth to save money, right? But at least the lifestyle that he wants to have its covert, so please out play around with the numbers, create a cereal based budget that you feel comfortable wave. And of course, this number here, it doesn't have to be only for savings. If you have dept as much as you can save here, he can go towards paying your debt. First on, once you become debt free, that's when you can have fun on put that monitor or something more meaningful in your life . I hope this helps. Please take the time to do this exercise on. Let me know how it goes. So how was the exercise? You have a hard time. Wasn't easy. Did you get to that zero based budget? I hope you did. Again. This exercise is really powerful. I know it may take a little a little bit of time to do it, but you do these ones on, then every month after that, it's gonna be a breeze for you. Just imagine the amount of control that you're going to have about your life, about the decisions that you make the confidence that you will have. Now you're gonna be able to be in control of your finances. Say yes or no to things confidently on the most important thing. You're going to be able to make your dreams are reality, whatever those are. If you want to say for your house, if you wanna pay off your debt as fast as possible. If you want to buy a car, travel every year, whatever that is, you will be able to be very intentional with how you spend your money. You will be able to have a sustainable lifestyle, and you will be able to enjoy life more. So there are a few concepts that I read maturity of the main books about finances on, I guess extracted all the concepts on introducing in this course on. They are in the temperate, too. So one of them is the seer based, but this is really important. This is from Dave Ramsey book that Total money makeover. Basically, it's about understanding how the money that you make minus the expenses equals a number, and then you need to add the savings that you want to have on then that will equal cereal. That's what we saw on the temple before, and that's what's going to allow you to create a plan off attack that you can follow on a monthly basis. The other rule is the 50 25 25 or 50 30 20. So that means that if you make, let's say, $4000 50% off those $4000.2000 dollars. It's meant to cover your basics like your house, your clothes in your food. The other 25% is meant to lifestyle, like restaurants, fun activities, things like that. On the other, 25% is supposed to be saved and invested. So that's the way for you to become financially free hand to have a good retirement, to be able to buy a house and to be able to save money for your future self. So 50% will be took over your basics. 25% could be for your lifestyle. On the other, 25% can be to be saved. I'm invested, okay, some people say 50% 30% on 20%. You can play with the percent that's there, but it's a very important room. Another important rule that some people told me that help them to realize how much money they were spending on to make more confident decisions was to think about how much money you make every hour. Let's say, if you make $20 an hour and you are going to buy something that is gonna cost you $40 are you willing to work two hours to pay for that? So So people say what that was on a ha moment for me because now I think about how long it takes me to Proview's that money and I say no to a lot of things because I don't think it's worth it. So that's another thing for you to conceive there. Another thing to consider is the usage off credit cards. If you do the your CEO base budget and you notice that you are over spending a lot, try to make things not convenient. Let me repeat the some people give themselves a A rule off, like waiting, maybe one day, three days, one week before buying things. Why? Because that way they can make a confident decision on they eliminate the impulse purchasing. Sometimes it's very city just called lying. Click on by anything that you may think, but enduring ready after and then it's too late. So that makes about releasing your spending. Are those, like try to really use their how you use your credit card may be Gazal. Carry a crater with you if you are having challenges trying to make it no convenient. Like one of my clients told me that she put money in an account of what? An accessible. So if she wanted to buy something, she had to local line transfer the money and then she will be able to pay on. She told me that munity off the times. It wasn't worth it for her to spend the time to do the transfer to buy something. So she reduced the amount of things that she was by again. There are different techniques. If you have any other technique I really love to hear from you just share it, please. But these are some of the techniques that you can start applying in your life. If you are overspending in the next video, we're gonna show you I'm gonna show you how to create how to compare different lifestyles. The temperature has a tap that I'm gonna show you on. It's really cool to see how you can play with the numbers in different scenarios so that you can make confident decisions about the future. So I stayed to for the next video 6. Comparing Options: So let's look at the top comparing options in your template I have. I have create an example here for you to see. So this is where you can do. Let's go back to Greg's example. Greg. It's are currently renting a place, so he's paying $1300 for rent. Actually watch 13 50 because key code on increase. And he's considering a few options. So he's considering. He was thinking, How does he look like if I keep renting? How does it look like if I buy a house that I went to see yesterday on, it seems were interesting on how that how does it look like if I live with my parents for a little bit? So he wanted to know exactly every scenario. Financially speaking on this is what the stamp it allows you to do. So he went to the template, and then he put renting, buying, living with parents. And then, as you see the income, he's expecting a raise that weighs 3000 instead of 2500. So he's got a race, so he's making more morning. That's great. And then the side Hassell, he decided that he's gonna try to heat $400 every month in here, You see, 980 because the house that he wants to buy or is considering to buy has a basement on if he were, If he rents the basement out, he can ask for $980. So you see, it's very cool. He will have extra income. But if you look at the expenses currently he's renting. So is 13 50. The more gets, if he buys this house is gonna be 1600 Blazquez. He has to pay home insurance, property taxes and maintenance. So all these other expenses are not. He's no pain for those right now, but because he's making this income, you see that the numbers below are no ballot only are actually pretty good. So let's keep going down like water. Hydro gas loose. Kind of the same. In both situations, restaurants is the same fun activities, the same transportation will be the same. And history house Rex the dog. Okay, so basically all these expenses are going to be the same. Except for the third case, an area that is, if he goes to live with his parents for a little bit that case, as you see like he will pay $500 to his parents to be there. He won't pay any of these expenses. Internet is included, so he doesn't have to pay for that. He needs to pay for his cellphone. G membership, groceries, restaurants. All this odyssey, but below here you can see the comparison, so the expenses on renting, buying, living with parents is significantly different on then he's in the green like he's saving money, basically every month. But he wanted to. He wanted to put $300 for retirement, $200 for vacation, and then he wants to save $300 to buy a house. But if he buys a house, he doesn't need to save those $300 anymore. So as you see below, here, this is the total. And as you see if he keeps renting, it's actually worse than if he buys the house. It's very surprising because when you put the numbers together, it's Ah, it's surprising. But if he goes and lives with his parents, he's saving every month $718 after saving all these things here. So basically, if you do The math you can do this equals 718 times 12 boards. He would save, like 8000 Seefeld and $60 every year. So if he lives with his parents a couple of years, he can save $16,000 right away. Aunt, If you go through the template again, let's say that he asked his parents list that I'm trying to say for a house, What do you think if I don't pay you any ran, You are helping me and their parents are wealthy enough. They don't need the money, so they agree on that. So you put a serial here on. Then he compromises on groceries because not he's living with his parents. So instead of paying $400 he's gonna contribute $250. As you see now, the number. It's getting better and better, right? If we go to the buying the house, he's only $2 off. So basically he can say I'm just gonna spend $348 here in restaurants instead of 3 50 This one looks good. This is cereal based budget. It's zero. So everything looks out from here in this case. If he keeps renting, he needs to do something to make sure that he's heating his goals here. So in this case, he can then come back here and say, I can compromise on restaurants. I can compromise from fun activities on I can maybe compromise on, try to make more money for my side hustle. So he just needs to find a next trap. $282. So let's say that he compromises $100 in in restaurants, so he's going to spend 250. Let's say that final activities he's compromising to spend only $200. So we are on 82 on. Let's say that he's going to try on make $480. So now, as you see or still minus do so let's say that he's gonna make $482. So now, as you see, this is cereal. So he's heating his goals. He's saving for retirement, saving for vacation, of saving for a house on it. He's in good shape. He's Ciro here, so that means that he's making enough money to pay for the expenses blast savings So As you see, this is a very powerful template. You can use this if you are considering maybe car sharing their shoes or in your own car. That was our case a few years ago. So we did the the numbers on both hospice. He has to make sure that we were making the right decision. Maybe you want to, ah, moved to a different location. You can try this lifestyle comparison on typing the numbers. If you are considering maybe changing jobs, maybe you want to do something that you love. Maybe they pay you less, or maybe they pay you more, but you have to move to a more expensive area again. You type the numbers in here, and you can have a very clear understanding on how every situation looks like financially speaking on. You can then decide what you are going to do with that. So I hope this helps. Please take the time to do this. If you are for seeing any changes in your life on, we'll see you in the next video 7. Creating Specific Budgets: in this video, I'm going to show you how to create a specific budget. Let's say, for example, that Christmas is a time where you have extra expenses. You want to buy maybe some gifts for people. Or maybe you have our social events that you need to go to, and you foresee that you're gonna need extra money that month out of the ordinary, and it just once a year. Maybe you're saving for a vacation, and you need to know how much is my vacation going to coast? So I'm gonna show you how to create our A budget for those specific things so that you can include the final number in your yearly budget. So let's come to your template here. And then let's just create on the bottom here. If you click on the plus, you can create a new shit. And then, if you right click on top of the name, you can rename it. Let's say that you are going to create crease must budget heat enter, and now you can start from scratch here. But I recommend you come to the compare options Stop. I recommend you just select this to the A and the B column. And then you just right click and then just copy. And then you come to the Christmas budget and you just go on top of the A and yes, right click And then just based in this case yesterday yes, I got a do control be Contrave the victor that will based it. If not, you can select right click and then you have to select our gives you different options here to paste. It's easier if you just to control up V. Okay, so now you have this here. If you don't need the income aspect, I will just delete these things. So select that right leak on, then delete. And then if you don't need these things below here, I will just select these things. Right? Click on delete. Okay. Now you have. Yes, the expenses. You can rename this to say Christmas. Okay. And then here you can just say, Give one. Do you get the idea? You name this as you like, uh, gift to. Maybe you have, Ah, event one. And then let's say that the give one is 100 and $50 gift to its $75 on the event. It's kind of cause you, like, $125. So, as you see you keep going and then you have the daughter here, Okay? In here. You can guess. If you want to know how much money you need to safe on a monthly basis, you can just say equal. They told out the by the by, the more do you want to save? I'm gonna do 12. Let's say that every year you start. So now you know that you need to save $29.17 every month so that when Christmas comes, do you have enough money? If you add stuff here, let's say that you have give three. That is gonna be $300 so that these number here is updating automatically. Let's say that you have avocation Christmas vacation and it's gonna be is gonna cause you $500. Okay. As you see, they larger this number, the more you have to save every month. But now you can come. So, no. India's 95.83. Now you can come to the to your budget. This is our on example. And then in here you will put Christmas. And now you have that number. You can put the number here like the 95 the 95.83. So it's a very powerful way to be very, very intentional about your Padgett. Let me show you a couple more examples. So in this case, are this is just an example Template. This one is avocation budget. So this person is is going to go to Hawaii on, then decide the experiences that they foresee having. So the airport parking, the flight, the accommodation And if you go to the cells So you see that this is a one time 850 years. A one time the accommodation he did 14 times $60 a night. The restaurants he did $50 a night, times 14 so that the allowance that he had the excursions 150 times three. So, as you see, the vacations are this is the budget. So again, you can come here and you can say okay, if I need to say for a full year for this vacation, how much do I need to save every month? And you just divided by 12 and This is how much money you need to save every month to make this trip happen. So if this is our Greg, for example, the example that we show you before, So he needs to save 3 65.83 So we come to his budget and we see that he only has $200 allowance for a tree Bright. So he has two options. Option one is changing the budget here. Increase it. And then he needs to make sure that he either reduces something in the expenses or increases his income or the option to is he can then come to his budget, and then he can decide, What can I do here so that I can make my treat beat 200 or some off? Because that's the only thing I can afford. And then he can say, You know what? I'm not going to Ah, by any souvenirs, so that's gonna be zero. So that's bringing these down. I'm going, Teoh, find a cheaper recommendation that is gonna be $45 instead of 60 for example on then I am going to go to restaurants only once every second day, so as you see your start playing with the numbers here? These excursions, I'm just gonna do one excursion. So what happens if I really do one? It's getting closer to it to hand it. As you see. He's on to 73. Now on then the car. You know what? I'm just kind of run the car for 10 days instead of 14. What happens if I do that? Okay, still not enough. Okay, so see you keep playing with the numbers until your it's the budget that you want to allow yourself Here I know they're example is the Christmas. This is an early example for Christmas gift for that gift for Mom. So the daughter here is 1000 and 20 again. Let's say that you are in January and you have to have months to save, so you will do equal the total divided by 12. And this is how much money you need to save. If you only have six months left to Christmas and you still want to say for that, what you will do, you will just come here and then you will type six instead of 12. So now you need to save $170 now you will come to your budget. If this is Greg again, he will come here. And then he will add. He will. He will copy, for example, these one here. So copy on. Then he will insert it right, click and then insert Kobe. It sells, Okay. And then he would just do here of Christmas. And then he will change that number to be whatever number you have in your budget. So in this case, if it's ah, let's do that. He's saving for the whole year. So it's $85 every month. So in his case, this will look like this 85 on. Then I just drag this through the corner and I just drag it all the way here. Okay? Now all Greg's budget. If this happens, that means that you have to make this call him a little bit wider. OK, so that the number shows. But as you see, he's by. Jeff has changed, and now Christmas is reflected here. Same with the vacation. But now he has to do some work to figure out how he's gonna pay for that. So again, this is a very intentional way off budgeting things. I'm making sure that you include them in your yearly and monthly budget. 8. Calculating Your Net Worth: in this video, I'm going to show you how to calculate your net worth. So the first thing that you will do, you will come to the temperate and you will come to the net worth top down here. So you click on that and then you will see that this will show up. So as you can see, you have assets, and then you have liabilities in the assets. This is what you have. So, as you see, you have checking accounts, saving accounts any other accounts that you may have on, then you have reduced their savings plans. This is for Canada. If you are in the U. S. Or in a different country human. This may be a different name, but this is basically like maybe like retirement savings are no introducer investments, mutual fans, any investments you may have if you have any tax free savings accounts again in Canada, we have that. If you have something different, just put it here basically anything that you have invested. You can read it in here on any personal asset, like if you have a house if you have a car, if you have any other items that are, it's valuable. You will brought it here. So, for example, let's say that I have a checking account that has $2000 and then I have a saving savings account that has $1000 on. Then let's say that I have that it I have investments. Let's see that they have an iris piece off $5000. Let's say that I don't have any mutual funds. Let's say that I have a 25 100 in my tax free savings account and then nothing else here. So as you see, the daughters show up here so the cash on a coolant will be 3000 investments will be 7500 and then here. Let's say that I am renting so I don't have a house. I do have a car on the car. Value is around 2500. I don't have any other residences. And let's say that I have, like a Bollywood item off. Let's say that I have a very a very nice piece off art that is worth $5000. If I were to say OK on, then that would be what I have right now is just an example you can be more detail if you have more things. But as you say, like I have done, all my assets on my assets are up to $23,000 so you will come to your liabilities down here and then if you have a mortgage, if you're paying for a house, you will bring it here. How much more that you have left? If you have credit cards, let's say that they have our to offended of $50 on my credit card. I have a car loan off 4500. Let's say that I have a line of Create off like up 10,000. Let's say that I still have a student loan on I still or 7500. Let's say that that's pretty much it for me. So as you see, my my liabilities are 23,250 on my assets are 23,000. So basically my total network right now it's minus $250. Let's say that I pay my credit card so that zero so all the sudden my daughter network is positive $1000. This will give you a really good overview off where you are standing, especially if you have depth. You will see very clearly here on. Then how do you attack the depth? So basically whatever number you have in here, you can Vagit something on a monthly basis. Like basically, if we go back to your budget like whatever you bright in here, maybe instead off you saving for retirement instead off you saving for something that this may be, notice our priority. Maybe if your priorities getting rid of that, you can then all the extra money that you have income minus the expenses. All the extra money that you may have in here if you have any done, may go into paying your death. Okay, so this is how the net worth stop works on. This is how you can calculate it. 9. Understanding Your Cash Flow: Let's learn about cash flow. What this cash flow are. How can you calculate it? Cash flow means knowing exactly how much morning it's coming in on how much money is going out on a monthly basis. So, basically is knowing exactly when morning is going to be spent on. This is very, very important specifically for the one time payments. Maybe you have payments that you just pay once a year. Maybe life insurance could be one of them. May be, ah, like car maintenance could be like one of them is not expenses that come every month, so you don't really account for them. But you need to know when they are coming out. So let's let's come into, Ah, back into Greg's example. Let's of one thing the first thing that say that he got a race okay, and he now makes 3500. That way the numbers will look a little better. Okay, let's say the he won a race now, As you see, the cash flow means this is how much money he's making on January and February in Mart in April. As you see, it can change. This can be a projection. Imagine that keys are. He's trying to figure out how 2000 and 20 is gonna look like. So he's gonna come here and kiss. Gonna say, OK, 2000 and 20. This is what? How much I'm going to be spending. Right. So, uh, I know that my rent is 1300 another my water. All these things are gonna be pretty much the same on the things below. Here are he will decide that, but let's say that he has, for example, life insurance. So let's let at a few more Selves here. So I'm just gonna copy these, and I'm just going to right click here on insert copy. It sells. So now I have to placate it from restaurants to dog Rex. So I'm just gonna select all these and I'm just going to the leading, Okay. Ghastly. Why? Once. So that I can start, and then here I'm just going to delete the comment. So they did comment. I think he had a son of the comment. I'm just going to defeat it. Okay, so now let's say that and then just double check here. Be five to be 22. So, as you see, like is doing the math properly. Okay, so there's no managers. Princes in here, Total expenses. I don't know why that got away. But basically in here, you will do there. Let's dio this equals some on. Then I just select from here to here and I close the parentheses. Okay, so now this is the some of these. Okay, that's correct. B seven all They were to be 21 now I just select this and I just drag this formula to the right. Okay, So it's good that you are seeing these because if this happens to you now, you become very familiar How to fix it and then the store here waas be five So total income minus total expenses. Okay, so the cash flow Let's say that he pays for life insurance on Let's say that he only pays once a year and he Pacey much and he pays $180. It's a one time fee. Okay, so these will be Cedo zero and then they just copy the cereal and I will select all these things here or the certain I will do Contrave. So I will based those cells there You can guess. Put Syria's manually to okay, But now, as you see a do you see this payment is early March. So the cash flow for Marty's gonna be different here. It's gonna add that. Imagine that you have another payment that you know it's coming only once a year. Let's say that you with half Ah, a car. Lucky that's not half a God. Let's say that his heart he's joining our A so called Nick. Okay? And this is one once a year payment on. Let's say that he's kind of doing that in August, and he's gonna pay $550. So, as you say, as you see the fun and the $550 that change, the experience is so This is really good because let's say that he has a website for whatever reasons, and he pays for the host hosting on the domain name, and everything on key pays for that every year. Like Lisetta, he pays $180 on it, always in February. So, as you see, the cash flow means that every month he may have some expenses that only happened that month, so he needs to know how it's going to look like that move on. He needs to make sure that he accounted for that expense and that he's in the green here. On that. He is stealing the green here. So as you can see this more, for example, he's gonna be $238 short. So he will need to tweak these and say OK, because at this more campaign they handed an $80 for the website. It's either I save a little bit of money every month on then I have enough to pay for these or these more. I'm gonna come back to maybe restaurant or maybe try to reduce expenses somewhere else. In this case, I will say that I would just say for a little bit of money every month to make sure that that move is not a big hit. Same with here in here. He's short $642. So maybe he said, you know what? Like in August, I normally go on vacation and I don't work on my side hustle, but because he's framing is coming in, I'm going to do a little bit of work on. I'm gonna try and make $600. And that's kind of put me on minus 42. And then I'm gonna treat my restaurant bill to be 300 instead of being 3 50 Okay, sure. Now all this happened. He's in the green again, so he can spend actually $308 in restaurants to make it zero. So, as you see now, below here is zero. So this is how you can create your cash flow. And this is how you can really, really understand your finances really, really be intentional about when payments are coming in and how can you manage them on again if they are big payments like this one and you don't wanna take such a hit this month . You just have to know that you have to add a savings here that happens every month on instead of 550. Once you can do 550 divided by 12 divided by six months, or however you want to do it on, then you just put that into savings and then when the payment comes, you have enough money to pay for it, and you are not in the red. So I hope this helps. Castro is really, really important. We use it for our business and for our personal finances. Yes, to make sure that we are in control and to avoid surprises that will put us in in opposition that we may need to use credit cards or something. Or the deking two savings that we don't want to do that right. So I hope this example helps make sure that you include all day one time payments in your annual cash flow on. I will see you in the next video. 10. How to Get Rid of Debt Fast: in this video I will not talk about that. Could be credit card debt. Could be a student loan. Could be any other there that you may have. So let's look at Greg's example on. I have included here as you can see Craker one credit card to Craker, three on a student loan. So it's that scenario that he's has to pay these on a monthly basis. So he has credit card adept, and he has a student loan on these other. They quote that he needs to pay minimum everyone to be able to two. Don't be charged more right. So as you can see the situation here so Latina he's making 2500 little that he still has the side hustle. So the income is our. It's valuable every month. But as you can see, his situation is not sustainable, like my pretty off the months he's in the Red Gas to cover basic expenses, his plan off, saving for retirement, vacation Christmas and all that stuff. As you can see, he just can't afford to do that, not a single month. So in situations like these, what's happening here is that his lifestyle is not sustainable. Basically, he's spending more money than what he's making. So the priority for Greg in this case is to get rid of depth as as fast as possible. And in order to do that, there are a few steps that you need to follow that are really, really effective. Step number one is to make sure that your lifestyle it's sustainable, basically that you are living Bayonne your means so that you are not overspending. So stand in my way. I will be to stop overspending, you need to stop overspending. You need to like really be aware of where your money is going on. You need to work on this body to make sure that your expenses are less than what you are making. Once you do that, you will. Once you start tracking your expenses and where your money is going, you will become a world really quickly on things that you may not need. Maybe you have memberships to sites that you don't no longer use. Maybe you're paying for services that you don't need or they are not a priority. Maybe you can explore different ways off living different lifestyle. Maybe you can do a lifestyle change that will allow you to, like, get rid off there really fast so that you can then start fresh. So in the case of Greg, let's go back to to the comparing options. And then, as you can see here, I have added, Adapt on it as you can see, like his in the red. So he's spending more money that where he's making on these savings calls, they don't make any sense right now because the priority, as I say, is to pay that as fast as possible. So what can he do here? And this is limitations is because I think we tend to before 2 3000 But let's just say that these 2500 years to make it more really stick OK, so as you see, he needs to do something about the situation affairs before he can start paying their properly. So a few things like that off course he's not gonna by a house is it doesn't make any things right now for him living with his parents, maybe a little bit too extreme for him. He doesn't want to do that, although financially speaking is probably the best option as you can see the numbers looked really good, and then the several $118 that he will safe every month. There instead, off doing these savings plan, that money will go straight into paying depth as fast as possible. So getting rid of all the credit card they done still alone. But there is another option here that could be renting, and then he could. So again, you have to make sure that your lifetime sustainable. So ways to do this is ready. Use your expenses or increase your income, or you can do both. So let's say that that Greg lifts in his apartment. He has a spare bedroom, and maybe he can render bedroom on maybe his rent instead of being 13 50. Let's add another comb here, so I'm gonna copia these and I'm going to right click on Insert Corbett cells. Okay, let's say that this is our renting one drink. Let's say that Hiss planning on on renting one room in his current apartment. So let's see that all this had in his rent is not 13 50 anymore. It's ah, there's 30 50 divided by two. So he's sharing thing experiences with someone health on, then. Same with this. The water is No. 35. He's sharing this. So let's say that he does this. Half the Haida will be equal. 55. Anybody by two on the Internet is also shared. The phone. It's still his fund. Your membership groceries are He could talk with the new tenant and they could spread that a little bit against. But the rest is pretty much the same. OK, so as you can see, yes, my doing that change all this, having kids in there in the green here. So now he's not over spending every month, and he's making an extra $100 that he could put the worst show he still paying the minimum . But he can use this $100 to pay their faster, but I think he can still do better than that. Like when you're in a situation like this, you have to make it a priority to get out of that as fast as possible. Because the interest rate for credit cards are really high at like, 19% on. Do you need to get rid of that as fast as possible because you don't want to pay money so much money for for them. Okay, So again, I will look at all the expenses here and I will try to, like, reduce, maybe try to speak with my new like, flatten it and say, Listen, are you on board toe meal plan on baby cook together? Maybe that brings these down to $300 instead of $400. So all this hadn't he is saving way more there, right? So what else? What else can we do? Sorry, this is not This is like he's saving $100. Okay, let's say that final activities He's going to stick to $100 a month gas until he pays off the depth on Let's say that restaurants he's going to try and do 200 a month instead of 2 50 So all this hadn't he has $350 X so that he can patron for a the credit card under student loan faster. So once he praised the all the depth. That's when he will be able to start doing this again, right? But it doesn't make sense to invest because investing make it. You are, let's say, 8% return 10% if you're lucky, maybe a little bit more. But credit card interest rates are like 18 1921% sometimes. So it's really, really high. So I want to show you our website that you can check it's called financial calculator dot or on they have a lot off different cool options that you can do. But if you scroll down, there is a credit card option here if you click in debt in there. Okay, so you have here a little bit of information and you have a credit card calculator. But I want you to scroll down here, and I want you to see these these examples here. So if you have $2000 depth and you really make your minimum payments, so disease, how much interest you are going to pay and you're gonna need 58 years to pay that off and you're gonna be a lot of money in, in, in, in in interest. If you pay $200 monthly instead of yes, the minimum payment, you're still gonna pay 1000 $622 in interest. On if you pay $300 the interest goes down by a lot. As you see, you don't wanna have this kind of that. You have to get rid of it as soon as possible. So something else that you can do, For example, this is a cool credit card consolidation calculator. When you have different sources off depth, you can consolidate them into, ah, one single payment, and then you can have that payment a little bit that lower or normal earthly basis. So let's say, for example, that you have here you can add what you have. So let's say that we have a credit card, one on the policies, like $5000. And then you just put the payment here, the interest rate that you have on the annual fees. You do the same with tube with the fair on. Then the fourth will be credit a student loan. In the case of the Greg again, you put the balance, the payment interest rate. You will have all this information in your in your balance sheets from your credit cards down from your Lord. And then once you do that, you will calculate here and then you will know what you can do, and I always recommend visiting professionals. So once you are at this stage, that's when you can go to our professional person that can guide you through this process. And I always recommend going toe a couple two or three so that you hear different people with different ideas, and then you make the right choice. But before doing these, you need to have a crystal clear understanding off your numbers. And that's why I always recommend, like doing this comparison, seem what option may be best for you and really, an understanding how much extra money you can have every month. How does your life that looks like if you cut hero? If you cut their by doing this exercise off, tracking your expenses, you will become aware of all the things that you are paying for. Maybe you find things that you no longer need. Maybe you realize I'm spending a lot of clothes that I don't really need to do that. Or maybe I'm overspending in restaurants. So I'm overspending in groceries and I could do better with a meal plan again. You just become aware of everything, and you you can be intentional and you can design designed something that makes sense to you so that your life is still fun and exciting and you don't have to just be a slave of your finances. Temporarily speaking, you want to get rid of that depth as soon as possible because once you do that, life will be way better. You will feel better. You will just have a fresh start and then all the sudden you are in control off your future . Okay, so I hope this video helps You are give you some tips on how to start attacking the depth on. Make sure you visit a website because I think it's really good on. Hopefully, once you visit a couple of professional people, you can have a very, very in form and confident decision. 11. Investing and Compound Interest: let's talk about investing a little bit. So by now you are very aware of your numbers. Do you know what your situation is? If you have that, you know how much you have. And you know what kind of plan you can create to eliminate that that as soon as possible you have a tool to compare different lifestyles scenario so that you can be intentional with your decisions and you can know which one is more effective. So once you are able to pay off that debt and you have extra money that you can invest every month, I just want to show you the power off investing. Because, honestly, my parents were really good at teaching me how to save money and how to leave the euro, my means. But the truth is that until I was like 30 years old, I wasn't really aware of what investing, really? Really Waas and I wasn't a word off what compound interest can do for you. So if we could come back to the same website Financial calculator, the orc on, we just click on investing here. There are different applications that you can download on your phone that will do the same thing on other websites. So this is just one off many. Okay, this is just free. But I just want to show you how it looks like on just with real numbers. So if we scroll down here, so imagine that there is this example. Mostly deposit. You make a month of the put it off $100 and you get an interest rate of 8% okay, and you invest for 30 years, so the total deposits will be 36,000 and 400. The future value of these money will be 143,000. So basically, you will end $106,000 in interest. This is what compound interest is. This is the power of compound interest over a long period of time. This is why the sooner you start investing, the sooner you start thinking about your retirement, the sooner you can get benefits from this compound interest. So don't wait any longer, even if it's $50 a month, $100 a month. Whatever you can, you should be able to start saving these whatever you can every month. Because in the long term, you will see that it's very, very easy to have a very good somehow at the end, and you can feel way more comfortable when you retire or when you want to do something else with your life. So let's go here to compound interest calculator so that you can play around with the numbers. Depending on your specific situation. In here, you can choose to say, Okay, let's say that. Do you have any initial investment? This is optional, So if you don't have anything, you can just say OK, every month I want to invest $50. That's how much they have. Okay, enter the I don't interest rate. So this is something that your financial a vital or the penny working off investment you are choosing. It may have a different rate of return. Let's say that 8% is a pretty average one on Let's say that you want to invest. It depends how old you are, like if you are 30 years old and you're planning on retiring on 55 so you will invest for 25 years. If you are 20 and you are retiring at 50 that's 30 years. Let's say that you are investing for 20 years. Okay, so we click on Compute. So basically, what's happening here is your investing $50 every month for 20 years and you're getting 8% interest. So by the by the end of those 20 years, you will have $29,451. Let me show you the math here with a calculator. Okay, So, uh, so you say $50 a month. Okay, Times 12 12 months in one year. So that's $600 a year. Times 20 years that we have chosen here. That equals to $1000 $12,000. Plus the interest that you have in here. That is 17 for five one points here, too. Guts, that total that. You see, 2000. So I I am me. Stop. See Extraction. Yeah, I mean, a tent here. So let's just do this again. So $50 times 12 moons. Okay, so that's $600 a year times 20 years. Okay, so that's $2000. And then if we art that 17,000 451 So 17 for 51 0.2 0.2 That's going to give you the total number there that you see. Okay, that's kind of give you the 2029 4 51 So now that you know where the numbers come from, so $17,451 this is just compound into it. So this is no money that you say This is the compact, the compound interest that you are going to to gain from your money. So now you can play with the numbers here. So let's say if you have $100 instead of 50 you can do the calculation, right? And then this number like, goes up. Let's say that you invest is for 30 years so you can play with our with the time. Also, all the sudden you would have 113,000 interest, So a total of 1 49 Let's say that you start this investment with $1000 that you had saved. Okay, So as you see, this is really, really powerful. You can do you can play with the numbers here. Let's say that you have $200 a month, he said of 100. So you can see how the numbers increase really fast. So there longer on the more money you invest every month they hired this number. Let's say that you get a 10% interest instead of eight, so again you can play with different scenarios. But this is a really, really powerful to that. I hope this inspires you to take action, inspire issue to like try to get rid of your data as soon as possible, try to live beyond your means and still have fun. This is not to be a slave off your numbers, but try to make your lifestyle sustainable. I'm trying to like include our savings for your future self so that you have financial freedom and financial security in the future at the same time that you are enjoying life on putting your money to work for you. 12. Tracking Your Expenses with Paper Receipts: in this video. I want to talk about how to deal with physical receipts. If you are a tangible paper person, you most likely would have a lot of receipts that look like these are in your house, Right? So one of the things that that were we're command. If you're tracking your expenses using receipts, you need to have a system to deal with them. So the first thing that we're we're recommending is having a system that allows you to divide those receipts into the different back. It's that you have created in your itself. So when you need the exercise of tracking your expenses, you went back into your finances and then you analyze everything that you spend and you came up with specific categories. Groceries are gym eating, our dressed around gasoline for your car, whatever you have in there. So when you start paying for things, you start getting receipts. You need to be able to separate them so that you don't become overwhelmed because if you put everything together, it can take you way longer to, like find the right once and do the math. A 1,000,000,000 of them, right? So one way of doing daisies by having a full there that looks like this. The resist can fit inside very nicely on. Then you have different tops so you can name them following the same back. It's off things that you have in your excel, in your in your template, and then you can separate daughter receipts into them. You can also get a bigger size one. If you have receipts that come in bigger size, you can also use something like this. Another solution that you can use if you have a bigger size and you enjoy having like a later filing cabinet in your maybe teaching or desk is having like one of these portable solutions that you could have hanging for this and you can name them as you like on inside of the honey and father. You can have these kind of things, but bind it with specific names in here so you can customize ease to match the exact back. It's off expenses that you have in your template. Okay, another way that you can do this is a shoe box, but again, I think that if you put them all together on, then you have to then go through them and decide what is what. And that becomes a very overwhelming task on Most likely, you won't do it if you organize them us as you do it on a daily basis. When you collect the receipts, when you do, the math is gonna be way, way easier. So how do we do them off? I'm gonna show you how we do it, so maybe you feel inspired by that process. But again, assisting can look different for everybody. But I'm gonna show you how we do it. We started using assistant that looks like this like a corkboard, and then we just use masking tape. And then we just put the categories that we started having. And then we just used like I the attack has to put them in there. So as you see a very simple system, but allow that so every time we came from from the street and then if we when grocery shopping or we went to a restaurant, we will have the receding in our pocket. We will take every set out, and we were just painting in here in the right space. Okay, so this is our closer view as you see. Like we have the tickets here and we even have, like, the budget here. So groceries at that time he wants $300. Fan ticket was $100 restaurants, $100 Gargantuan iwas 100 and $50. You can customize these as you need, but from the system we evolved into the system. So now we use this and then we have, like, there specific name here and we have the same name on the core port on. Then we can hand these with the receipts on the corporal very easily. We also have, like, a scrap paper that looks like this with a pen. I'm a marketer. Why? Because sometimes we forget to us for the receipt or sometimes the resale transaction that happens. And there is no received, like someone gives us morning. Or maybe we give somewhere morning because we participate in a potluck on. Then there is no receipt, but we spend some money or we caught some money. So we use a piece of paper to, like, bright it down on. We put it in the right place. So this is how the new system looks like this crap paper is here. And then all these beans are hanging from from every specific category. And then we have the name here and here matches. So now when we come thesis groceries. This is our, like a fun activities are restaurants are gas, health utilities, So yours may look different, but this is how we do it because we have the space on the wall and we enjoy it on. Then once a month, we take all their receipts from the core board and then we close the month. We input all that information in the template that you have. So, as you see, like we have all the all the things organized. So we will take the receipt from its category, and then we will go to the template. And then we would just do it as I show you in In the previous video, this is something that works for us again. You can use another system. The important thing is that you make sure that the receipts are separated so that it becomes easy for you to close the month when you are getting started. With this, I will recommend you close. You don't close it on a monthly basis. You tried to have a look at your finances, at least on a weekly basis, if not every two or three days, because when you are trying to create a new habit, you need a bit of time and you need a warriors. If you wait a whole month to do these, most likely you may have overspending one category, and you didn't have time to see it on to react. If you do it every few days, all these once a week, you know where you are standing. You know how much money you have left on every packet on. Then you can take action on whatever you need. Maybe it's like, Oh, I I spent enough money these more for groceries, so I'm gonna try not to buy anything else on. I'm gonna try to use stuff that I already have in my country until next month. Or maybe restaurants. Wow, I thought I was over, but I still have $50 so I can treat my partner of my friend. Why can go myself out? And Andi, it's something. Or you can use that money to do something else. Like if you spend less in groceries on you want to overspend in restaurants? You can do that. You can take money from back to back it as long as you don't over Spain or needs back it. So that's the power off reflecting regularly on these. The reality is that when you do these a few times it will become automatic. Your habit will change on. It will become easier for you to keep the system up. And that's when you will need only to do it once a month because you will be very aware and we can always come here. We can always come here to the to the board. When we're pinning a receipt on, we can say, OK, I'm meaning I received for restaurant. I can have a big here and I can see how much I spent so I know where I am. So as you see, it's very flexible is very like a visual on the system helps us a lot. If you don't have the world space, you can use one of the binders, or you can use like a shoe box with like cardboard dividers. Whatever system you want to use is fine as long us. Their receipts are separated. You can also use envelopes. But just make sure that you reflect on. Make sure that it's convenient. I make sure that you do it. So you have to set reminders in your calendar, maybe, or put a note on a visual place. So that reminds you too. Oh, I have to have a become a finances. Okay, this is our recommendations matter. Combinations for, like, paper bills, paper receipts. 13. Tracking Your Expenses Digitally: If you're not a paper person, there are picketer ways. Toe. Organize your expenses, too. Okay, so you can do everything through your phone. If that's your preference, a few of the main things that you can use the software's one of them is called mean. This is free. These basically sinks with your bank account on import all the transactions, and then you can categorize them as you wish you can access from your phone you can access from the web. You can see you can set budgets. You can save gold. It's really cool. I like this kind of abs because I allows you to to see your expenses are really life at the moment that you are looking at. It requires a little bit of time, like you have to make sure that expenses are in the right back it so that they are categorized and it takes a little bit of time to set your specific integrates. But after you have set this up, it's very easy to see things. One of the things that I like from the template that I shirt in this course that I always recommend you to do first is that the template allows you to have more control on DSI. Everything in one place when you get in this kind of ups, Yes, you have reports and you have graphs. But you don't have all the power on all the options at the temperature that I give you hot . So everything that you can do with the template, you won't be able to do every single thing in here and see everything in one page. But they're really good. If you are a digital person, I strongly recommend you check them out. So I mean, it is one option. Every dollar is another option that you can explore. I'm not gonna dive deeper into these because you can just go to YouTube and you can find women information expensive. PFI is another up that you can get in your phone on money. Nobody is something that I use while traveling. You allow me to keep track off the expenses, and I we create a budget like we went to Mexico. We go to Spain, we go somewhere else, and we want to be intentional about how much money we're spending. And we have to do it on the go. I just use another like this to help me. No, If you are not on a person, you can always use a little notebook or your journal, and you can guess right down the expenses that you have. So that's another option. But doesn't matter the option that you plan on using. I always always recommend that you go to YouTube on that you type whatever. So where you are planning on using in this case, this is like meant, for example, and you just what an overview try to type means overview on. Then try to find someone that gives you like a tour off the up so that you get a sense of how it looks like. And you get a sense if that's the right thing for you, do the same for the main options that I'm sharing with you. Maybe you find all the ones before you invested timing in setting everything up. Make sure that is the right fit for you, that it feels right that you like the user experience. But basically under mean, for example, they have a lot of videos how to use things. So as he Asper. As you see, there are so many like things that you can explore. But if you just for example type I mean overview, for example. I mean up overview. You click in there and then there will be someone here that means review up 2000 and 19. The best features. I always look at the videos. I look at the length so he had these periods of three minutes and 26 seconds. So it's a pretty sure video how to body with me. So this is ah longer video again. You spend a little bit of time making sure that your tuition the right one. You can do these for every dollar for expensive PFI for money lover and then you can see how it works. You can also use your journal in this case, I just type bullet journal finances. If you don't know what bullet journaling is that we have another course about that. But you can just use a simple no book on. Basically, I just went to images here and then you just look for ideas on budget. Track it for so I clicking here and then I see what this is about and then some people do cool things. You can get ideas on how to do this on a notebook to see how many like different things you have here to choose from on. Then you can create your own one after that. So again, tracking your expenses is really, really important is this is the active action that you need to be taken on a daily basis. So to keep track on your expenses and your finances on, you have to choose the right way for you. If you are a paper person, choose one of the methods that I share. Oh, create your own one so that you can have all the receipt in place. If you are a digital person, try to choose the right up for you. But I always recommend starting with the template, having clarity about your numbers, about how you said your budget and then once everything is in place, that's when you can track your expenses properly, using the system that you choose 14. The Envelope System: So let's talk about the envelope system now that you have a bad yet now that you have all the categories that you need in your life another you know the amount of its category, Haas. A good way for some people to get on track with the expenses and be able to manage them and track them and don't overspend is by using the envelope system. So what you're seeing on the screen right now, this is our naval up system that I created with her. Our client, Judy, we have, ah, a permanent serious are on YouTube that you can watch for free on one of the episodes that we did is about money and finances, and I basically did with her, like the temperature that we have done together. And then we analyze her experiences. And then after that, she decided that she wanted to stop using the credit cards for out for a little bit until she created the new habit. This is something that I certainly recommend you. I don't see the envelope system being good or necessary for forever. But if you are getting started with this and you have a hard time containing yourself and you are overspending a lot and you want to, like, go cold turkey. Using gas cash can be very, very powerful. So the envelope system could be the solution for you, something that will have your transition. So, as you see basically the envelope system, how it works, every category that you created on your template. So if we go back to Greg's, he has water, hydro, Internet restaurants, fun activities, transportation, dog Rex. So all those categories will be an envelope in this case for you. The she had hair dresser, she had laundry. She had eating out. She had taxi or transportation. She had therapy. So these are the categories that made sense for her. On this is the total off every category. So $70 monthly, $60 monthly, $42 monthly. So when she got the paycheck every month, she will divide the morning and then put it in every envelope It sounds. Videos on it is a little bit of extra work. I'm not gonna lie to you. It is, but again if you are, if you want to take full control of your finances and you think that transitioning into doing this process, it's going to be a little bit difficult for you. Doing this will remove a lot off the barriers that you may experience. If you don't carry a credit card with you, it doesn't mean that you have to like cultural them. But if you leave them at home and you are intentional about, I don't want to overspend. I want to, like, take full control of my finances. Doing the envelope system can be the solution for you. So this is just one example. If you go line, I wanna show you, for example, Dave Ramsey. He's very, very big finances guy. He has a really good website, so he explains the envelope system really well on this website. I'm basically as you can see the envelope, but they keep, like, track off every transaction that they do. So every time you spend money from an envelope, you brought it down and then it here it says, What is the envelope system? How the envelope system works so you can read that these the different categories you are ahead of the game because you have the categories. You have the totals. You have done the work already Okay, so you figure out your budget, you have done that already, and then you create a field cash envelopes for the budget off every category, okay? And then you only spend what you have fun, every envelope. So the advantages are it keeps you on track. It forces discipline. It holds you accountable on it, makes you pretty hard to overspend. So it's very difficult to overspend if you do the system. Okay, these get street here. When you mix online payments on cash, get a little be blurring there, and it'll be more difficult. That's why in our kids we use like, a piece of paper and we will write it down with a with a marker. But again, this is something that you can give it a try in duty. For example, one of the things the challenges that she faced her is that she didn't want to carry all the cash. Like if she's gonna go toe to the head dresser, for example, and she's gonna take the bus. She didn't want to carry that $42 plus that two of the last sort of pleasant $24 here because she is really going to pay a few dollars for the bus. So she divided these by week. So instead of her putting the cash every month, he actually divided with this symbol of backs. She divided this in for some two weeks and for some every week. So instead, in the case off bus, instead of caring for the $2 she was carrying to any $1 she had another bag with $21 so you could do something like that if you don't want to carry so much cash with you. But again, this is assistant that can help you be way more intentional without with your finances. So more their ideas that you can explore is the reason up called simple baguette that you can get on your phone on. There is another one that is called a good budget. See, this is the idea. You get the cars, you put it on the envelopes again. When it comes to these APS, I will recommend go to YouTube. What an overview video. Make sure that is the right fit for you on. Just give it a try. It's ah, be curious about things. If if you think that this will be a good solution for you. It could be a temporary good solution for you. Or maybe you adopt the system and then you just don't look back again. Try something different. If it's not working for you on the envelope system can be something that you can explore on a test. Let me know how it goes. 15. Emergency Fund: you are doing great. Great progress. Congratulations on being all the way here. We have done minority of the course now, but there is still more to cover in this video. I want to talk about an emergency fund. Most likely you have heard that term before What is on emergency Fan? And it's basically a packet off money that you have for emergencies. So we have created a budget. You know where your money is going. But sometimes life will happen on something that is not accounted for with demand money, Right? Maybe something breaks in your house. Maybe your car breaks down. Maybe you have a medical like emergency, maybe a friend. It's money and you want to help him or her like life happens. And sometimes you just need extra monitor duty on account for That's why having an emergency fund only for emergencies, it's so important. So how do you create an emergency fund on How much do you need to have in there? No money If you are struggling with that and you're trying to pay everything off having like $1000 at least as an emergency fund, it's recommended get $1000 that will cover like main things like that. Your car break down like something minor happens. $1000 will be enough. But ideally, once you know how much our lifestyle is once you put on the expenses in there and you know , every month I need $1000.2000 dollars, $3000 to leave. That's just to pay your basics like like rent or more, gets up food, all the expenses that you need to sue by, Right? This is not savings. This is no overtime in the suggestive basics. Once you have that number, I really you wanna have three months, maybe worth off emergency fans. Some people aim for six months. Some people ain't for 12 months again. It depends on your situation. And it depends what you are right now. If you are struggling to pay that I will still encourage you to at least half. 500 to $1000 for the millions is just so that you don't have to go deeper in debt is if something happens on all their leftover money that you may have. I encourage you to put it towards paying off any day that you may have Remember everything that we talk about. You can increase your income. You can reviews your expenses. You can stop overspending by stop using credit cards. Be mindful about the expenses that you are having trying to wait a few days or a few weeks before buying something so that you make sure that if you buy it is because you really needed on everything goes in your budget so that you are aware of your situation. Also, use the comparison tool to make sure that you are comparing different scenarios and different lifestyles so that you can make the most off off your time on your money. Okay, so emergency fun again. I recommend having at least 500 to $1000 in a back it off money somewhere that you're let out for emergencies and you could have easily excessive. Also, this money should be invested. So where that you can't retrieve it if you need it on overtime. When you pay off your debt, you can work towards having three months or so. We're having six months. Why is important? Because if you don't have an emergency fund, you're going to be a slave off your finances, meaning if for any reason you lose your job and you have to look for something else, you won't have wiggle room to react, and you will need to grab the first thing that comes your way because you need the money right now. If you have an emergency fund that allows you to have, ah, three most period of time to look for the next step for you the next job, you will have another bit of room to be able to negotiate. To be able to wait for the right thing toe appear on you won't be desperate. And if something happens in your life and you didn't I come for that money, you will be able to reach to that money and pay that thing. We without having to use your credit card or without having to go deeper into that. That's where having an emergency fund is so important. On day one off the books I read, they call it this. Sleep well at night Factor basically allows you to relax and to sleep well at night because , you know, if something happens, you will be called. So I encourage you to include a line on your budget for the emergency fund trying to aim for, like, 500 to $1000 at the beginning. And once you get out of your depth, try to increase that into, like, 3 to 6 months off your living expenses. Okay, See you in the next video. 16. How to Organize Your Financial Life: when trying to organize your finances. One of the main things that you need to do is organized How everything looks like in your financial life. So you need to become a word off. Like how maney bank accounts you have, how many credit cards you have, how your money moves through on. Then once you know that you can optimize the process and then you can finally, like automated. So one example these are if there's one okay, you might end at this person. This is green. So this is income. So the income goes into a check into account that is here, Okay, before even they get paid. They have automated that a percentage of their salary goes there directly into investing. So this is the concept. Pay yourself first. And this is something that once you get out of that and you get control of your finances, this is something that I recommend you do normally could be a percent that some people go 5 10 15%. They hired the better. But once you do the pageant, you will figure out how much morning realistically you can put in there. So once equal, he goes into the checking account here and then from here, do you move morning to the different savings accounts that you are saving for according to the budget that you have created So it could be to buy a new car? Could be to go vacation. Could be to have an emergency fund. Do you name it? You just put it in here. Okay on. Then after that, you will pay the expenses. You will pay their credit cards that you may have, and then you will pay the rent. And it's very important with the expenses to try and time them so that when you get paid, if you get better at the beginning off the month, trying to time the expenses so that they go out like one or two days after you get paid. Because that way, the cash flow it's better. You will know how much money you have left for the end of the most easily on. You won't run into the problem off the month caused by. Maybe you overspend and you didn't pay attention to it on. There is not enough money in your bank account, and then a bill comes, so if you can It's very important that you time your expenses to go out a few days after you get paid. That would be really, really important. In my case, For example, I use a banca. A bank called Tangerine in Europe is called I N G. On. They allow me to have us many savings accounts as I want. So what I have done, We have created savings account. We have one that is for the car. So we our car is paid off. But we will eventually need a new one in the future. So we keep playing like a $375 a month feet. And we keep putting that money into that savings account on you can rename them. So we re name This is a car. This one is our vacation. This one is our even our daughter. So we have different ones according to the what we're saving for on that really, really helps to organize things injure in your financial life. In all these accounts, leave between one dash for the credit cards also there. So when we look into that bank, it's only one password and we see everything in there. It's very easy. It's very convenient on it happens automatically so you can set this automatically to say, according to the budget that you create in the template if you have $200 going to vacation every month, once you get paid. If you get paid on the second of the month, the third or the fourth off the month you create an automatic transfer off $200 from your chickens into that savings account on then $300 may go to retirement. $100 may go for the emergency fund, so you create a plan to automated and then every month it happens automatically. You can also do it by hand. On if you do that, I recommend you create a to do list with all these steps that you need to follow so that when the end of the month or the end of the week comes, you don't have to think too much about what am I supposed to do now? You made me steps on. Then the system will collapse. So trying to make it easy, convenient and simple. Another thing that I wanted to say, like this is our UN extend now investing account. In our case, we use a different service and tangerine, so the money goes there automatically on again. Do you decide? You can do it manually. You can automated. You can create a percentage of your salary that goes straight there. But paying yourself first with guarantee that that money keeps growing that your own count without mourning for your monthly expenses on the system will allow you to follow that the process that you have created the budget on there in the template. So I encourage you get some colors. You get a notebook like this or a blank piece of paper. You can also do it on the computer if you want on, create the floor that you currently have. Once you see what you have, see where you can optimize things. See if you can unify accounts if you can create savings accounts. If you can't trying to fight a bag that allows you to do that. In my case, I use tangerine. Also, I n g. I know they allow you to do that to on. Then you can create something really reversed, something simple and something that you can follow at the end of every month. Okay, so come way to see what you create 17. How to Organize Your Finances with Your Partner: So one interesting told me that I want to cover in these courses how to organize your finances involving your partner, your wife, your husband. Maybe you have a partner. It's a very tricky situation. Sometimes it's very important to get on the same base is very important to have communication, to really understand what each other wants and needs on the expectations that we have from each other from a personal experience, I have tried different approaches. When a protease, we had everything together in one account on every decision regarding off money had to go through both of us. I have to say that at that point we didn't have anything to get out. So before getting together, we were starting in our current. So we didn't have any morning. Will you have any like assets? Anything. So it was an anus, indecision, and it didn't seem complicated. But what happened after like nine years of relationship is that I felt that I lost my independence. Let me explain that I feel that by me having to ask about permission for everything that I used to do. I don't have an allowance for myself to know this is my morning. I can do whatever I want with it because my responsibilities, my on the expectations that we said together are taking care off. I never was in that situation, and I always felt nothing. Control is not bad, but that's the feeling that I had at the end of the relationship, so that relationship ended in good terms. But then in I learned a lot from that and I learned that okay, in the future, I think I would like to have some a little bit off independence. So when I move to Canada on again, I got together with Samantha. We tried a mix approach, and this approach is like we have our business together. Everything is together, but we allow ourselves so money so that if I want to go and spend money with my friends doing whatever, I don't need to ask her because it's not our money or is not her money. It's my money, but it's very clear how much I get. It's very clear when I spend it and I don't have any more. It's very clear and it's not. I'm not spending money that is supposed to be for both of us. So let me explain without this example how the method that I think it's up, it's a really good balance. Again, this is something that we look like. We look very different for every couple. So this is just one idea of how to do it. But you have to speak with your partner, get to an agreement something that you both feel comfortable with on. Then you can create a system. But in this case, as you can see, imagine that this is David and this is our the his partner. Okay, so there are two separate the income, so maybe it's personal, has different incomes, but basically, this is one person on this is the other partner. Okay, so imagine that this planet has one income, two incomes, whatever, but income in general, this goes into in tow. Are his or hers checking account from there? Same thing here income comes in on. They're not these costs into that person's taking account. So they have agreed this is the common. They have a common account. They have common expenses. They live in a house they pay for mortgage or rent. They pay for expenses. Utilities. Maybe they call vacation together. They share a car, whatever the expenses. Are you getting the template? These are the common expenses. So you will know exactly how much you need on then. You may have savings together. You may decide we want to go to Mexico unexamined for vacation. We want to bow a new house. We want to buy a new car. We want to save an emergency fund for us off six months. We want to do whatever it is that you guys want to go. So this here it is, the common expenses on the common income. So once you figure out these, you know exactly how much money you need. Let's say that you need to put a number $10,000 there, so you need you know, that it's partner needs toe put $5000 on a monthly basis. Maybe is $3000 needs put 1500 whatever the number is due divided by two. And that's how much they come on. That's how it works on. Then, for every personal case scenario, if this person wants to have specific expenses, that is just for he mohair on. They have they wanna have specific, like savings, personal goals, that is, no common goals. You just their personal opinion. Uh, they can do that. So they are still an independent person. And that's what I like because you're mixing both walls, you are taking care of yourself. You are taking care of their relationship and you are not losing your independence. What happens if for any reason the salaries are not equal? That was an interesting question, and I was reading about it on. Some people do 50%. That's a matter what some people do. Other centers off the income. So if this person is earning way more than this one, for example, if this person is ending 60% more than that, this one when they do these, maybe the special makes, let's say $10,000 a month. This person makes $6000 a month, and they need fighters under someone so this person will pay 60% off those 6000 and the special will pay for a 40% because as a percent it. So I thought that that was a cool way of doing it. But again, this is all about communication. This sort about do. Speaking with your partner. Exploring the different ideas maybe brings term in a different Grafton, these one on. Then, whatever you guys feel comfortable with, you just have to be on the same page, that's all. But for my experience, in my personal case, this is what I feel comfortable with on this is what Samantha and I are doing, and I feel that it has the best of both worlds. We are a partnership. We we have, like strong common goals that we follow. But I have the independence off being able to do whatever I want with my money on. If I decide to have a side hustle on me, just mine, it doesn't interfere with the rest. And I'm the only one making decisions about that on saying for her. If she wants to do something else, that's for her to decide that for her to do whatever she wants with it, we don't kill each other's creativity. This is their one idea. I hope that you get some ideas from this. If you have any other ideas, we will. I would like if you can share them so that other students can benefit from them on. I hope this gives you some ideas toe to take, uh, the finances off your partnership to the next level. OK, while we're seeing in the next video. 18. Next Steps for You: now that you're in good standing. Now that you have that all the process that I show you in this course, maybe you're at the right time at the right space to think about maybe bringing some help in to see what to do with the extra money that you have fun. A movie basis. So that's how you can try and find a financial adviser or someone an expert in the field that can help you create a strategy. So when that leases to you understands your situation, understands your goals on someone that can hold your hand through the process off what to do with your money went to invest your money for how long, How much you're gonna get do reviews like quarter of use year reviews, things like that. Some people are interested in this topic, and they read themselves, and they may do it themselves. Some of the people may want to hire someone. Either way. I strongly recommend you see visit a couple, two or three people to see what they have to say. I did that with my with our situation, and it was very eye opening to see how different people have different strategies, but there was always some. There was always some common ground between all of them. So once you become aware of the different strategies things that you need to look for, what you can do, how much things like that, that's when you can start picking the things that you life from each of them on. Either hire one of them or either than you do it yourself, but with the confidence of what whatever you are doing has been confirmed by someone that is an expert in the field. Okay, so he had. In Canada, for example. We have access to our tax free savings accounts, and you have a maximum amount that you can put in there every year. So that's something that if you have extra money, we can put it in there on whatever we invest the money into that it grows tax free, so we don't need to pay taxes on that morning, so that's really good. After that, we have on our species have retirement savings plan on that, something that also we put morning into that, back it in there, and then whatever we invest that money, we don't have to pay tax until we withdraw the morning by Germany's growing tax free for like 10 2030 50 whatever year sits in there. And then when you retire and you needed you start with throw in the morning, and that's when you pay taxes on that on then there are a lot of different strategies on how to move your money around. What we're to investigate. What kind of portfolio, What kind off our investment riel state. Meet your fans. It's I'm not an expert about that topic, so I'm not giving you advice on that. But I'm guiding you through a process off the next step for you. Once you are in good standing. Once you have the real numbers to understand your situation and to show your financial advisor that's when you are in good standing to see Okay, what's next for me? This is what I would like to see in my life. This is what I would like to see when I retire. They would have a calculation of how much money you may need, how much it's going toe the inflation going to be when you are retiring, how much money you may have received from the government on. Then they do the calculation, and then they come up with a number on that's gonna help, you know? Okay. Every month I need to save these mats. In order for me to be in good standing on to reach my goal, whatever you go is. So this is the next step for your congratulations in doing all these steps. Congratulations in taking full control of your finances. I'm so happy that you made it all the way here. On I come Wait to see what you go from from here. Okay? Thank you so much for taking the course on. We'll see. You know the course. Make sure you take the other ones that we offer. Okay, bye.