you
hey guys Stefan here from
as you can tell good and you look going
on right now I shaved my head a few
weeks ago for summer so not sure if you
goes for the next few months but listen
in this video blog I want to talk to you
today about how to manage your finances
and I'm going to share with you a system
or ritual if you would that I've used
every single week for the last four
years that's really transformed my life
in this area and I'm also going to have
a blog post that goes along with this
video so make sure that you go on to
project life master comm I'll have a
link to it in the description because
I'm going to give this method to you I'm
going to give you the spreadsheets the
templates everything that I've used to
really transform and manage my finances
on a weekly basis now I will say that
most people are totally clueless when it
comes to managing money in fact most
people they're so focused on making more
money and their job or their business
they're obsessed about it but they
haven't first learned how to manage what
they already have and if you can't
manage what you have now even if it's a
small amount of money then going out
there trying to make more money is not
going to make anything better in fact
you hear these crazy stories right where
people they win the lottery that went a
million dollars and then sure enough
within a few years they're right back to
where they were before and the reason is
is because the reason why they just
spent all that money and everything is
they didn't know how to manage it they
didn't have the discipline the habit the
mindset the mentality to be able to
manage that amount of money and so
developing the habit developing the
mindset around manage your money now
even if it's a small money it's not the
amount that is important by the way it's
the habit the habit is more important
than the amount but if you can learn how
to do it then you're going to set
yourself up for success and you can
actually get further ahead and a lot of
people that are making more money than
you because it's not how much money you
make is how much you keep and it's being
able to manage the money you have and
reinvest it accumulate assets and build
your net worth and financial freedom so
those are the most important things if
you want great books about this check
out Rich Dad Poor Dad Robert Kiyosaki
check out the millionaire mind intensive
which is a seminar by T Harv vector also
has a great book called secrets of the
millionaire mind it's a book called
richest man in Babylon that goes more
into managing your finances
well but really make sure that you're
learning and studying this area your
life because you know you need to have
that foundation before you're prepared
to really start making more and more
money now I'm going to share with you
guys first how to track your finances
and they go into that in a later point
in this video and just kind of show you
exactly what I do but tracking your
finances is the first place to start you
need to know exactly how much your
income is every single month and what
your expenses are I actually go over
every single week what I do is I use a
spreadsheet and I add up exactly how
much I'm making every single week from
my various income streams and that's
important because you need to be able to
check and make sure that you're making
progress you know are you making more
money this month and you were last month
are you making more money than you were
last year and you want to you know
always be setting goals for yourself so
you're making more and more progress in
that area of your life in terms of your
income you also need to track your
expenses you need to know where your
money is going most people are shocked
when they actually take the time to go
through their credit card statements and
everything them to see where their money
is going and you might be surprised to
realize like oh my god I'm spending all
this money on eating out and you know
not unless you actually tracked it on a
weekly basis you wouldn't be aware of
that and you wouldn't be able to make
any changes in that area so for example
you might realize that you're spending
all this money on eating out well now
you can make an adjustment and start
eating it you can start cooking more
food you can start going to grocery
store you can make those adjustments and
that's all possible because of the
awareness that you have when you start
to manage your money you're going to see
you know exactly where your expenses are
and I think one mistake that people make
is because they don't manage their money
they often get into debt you know I
remember for myself when I first started
the business years ago I didn't know
anything about this stuff and you know
we're making all this money but we were
spending money like crazy and we
believed that we were making money right
that's how we rationalize to herself
because we had this money coming in but
we weren't paying attention to all the
little expenses that were adding up on a
monthly basis and it wasn't until we
actually looked at her finances and she
wrote everything else we could see where
everything was
we came to the realization that we're
actually losing money every single month
and we were getting in debt and that's
where you dig yourself a hole which is
very difficult to get out of and that's
why if you start now you learn how to
manage everything now then you will
avoid some of those mistakes another big
mistake that we made is we didn't
anticipate and prepare ourselves for
taxes at the end of the year right in
the first year of business we weren't
prepared for that we weren't putting
money aside we weren't managing our
money and sure enough we got into
trouble later on and so that's part of
the reason why it's so important to be
able to track everything so that you can
actually see that you're having a profit
right you got to make sure you're having
a profit every single month you can't be
living paycheck to paycheck you're gonna
have to make some sort of adjustments so
that you're seeing a profit okay so I'm
going to go more into how to track your
finances and the spreadsheet everything
I use but the second most important
thing is learning how to allocate your
finances meaning you have a certain
amount of money that comes in right you
have a certain amount of money that
comes in every single month from your
job your business or income streams
whatever it is right you have to
allocate that money and put certain
percentages in different areas okay so
one model that I've used from T Harv
Eker he has a book called secrets of the
millionaire mind and he has a seminar
called a millionaire mind intensive
which I'll have a link to in the blog
post as well because I did a review of
it last year but what he says is that 55
percent of your income should go towards
your necessities okay so 55 percent of
your income goes towards your rent your
groceries or cell phone all your
necessities in terms of daily living now
the problem is that most people it's
like ninety or a hundred percent of
their income goes towards the
necessities and the problem with that is
you'll never be able to get ahead
because you'll never be able to save
money you'll never be able to invest
money and you'll just be living paycheck
to paycheck and not really making any
progress not building your net worth or
your financial freedom okay so this is
what he says 55 percent towards our
necessities 10% of your income should go
towards long term
leavings okay long-term savings you
don't touch this money this money is
long-term savings for something another
10% is a financial freedom account
okay so you've heard about the
philosophy of pay yourself first all the
self-help books out there talk about
this all the finance books talk about
paying yourself first 10% of your money
pay yourself first and I'm shocked to
see how few people actually do that I've
been doing it since I was 18 years old
that's always putting 10% of my income
into investments mutual funds saving it
the financial freedom account is
anything that can help build your
financial freedom
anything that can start to accumulate
passive income for yourself it could be
real estate it could be stocks and you
know mutual funds investments you know
reinvesting that into a business but you
need to have make sure that you're
putting money aside for that purpose so
that you can really get ahead you can
have your money to start working for you
okay so 10% long-term savings 10%
financial freedom another 10% is an
education account you need to be taking
10% of what you earn and invest that
into yourself book seminars coaches
programs things that can actually make
you better because you know warren
buffett said the best investment today
is in yourself it's not stocks or real
estate is in yourself and when if you're
not improving yourself and investing
into yourself to make yourself better
then again nothing is really going to
change you're not going to be able to
reach your goals and get further ahead
so you have to make sure that you're
investing in yourself also the other 10%
is towards fun account okay so you have
to be having fun you know 10% of what
you make you should be doing things that
you enjoy you know really having some
fulfillment your life because if you're
just working to save and invest money
and you're not rewarding yourself by
giving yourself any pleasure then it's
not going to it's going to be very
difficult for you to keep going with it
unless you're starting to see some sort
of pleasure and taking the time for
yourself to really enjoy life as well
and the last 5% is a give account so 5%
of what you may should be towards just
giving to charities foundations and some
form of making a difference
so that was his model of allocating your
money you know if you read the book the
richest man in Babylon they have a
somewhat similar model but you know what
it comes down to is making sure that you
have money left over every month so that
you can reinvest it and you can save
that money which is extremely important
okay so I have a blog post so go more
into detail of that and the philosophy
is there but right now when I jump over
to another video and I'm going to walk
you through the spreadsheet that I use
to manage my finances on a weekly basis
and make sure you go to the blog and you
can download everything that I use so
that you can start applying it for your
life as well okay guys so this is the
template that I use to update and manage
my finances every single week so first
you can see that it's a Google document
I prefer to host it as a Google Doc that
way I can access it from anywhere in the
world from any computer and this is just
the template that I use I modified it
you're going to want to customize it for
yourself but I'll have a link to it on
the blog where you can download this and
use it for yourself if you want and
there are other systems out there
there's more sophisticated more
elaborate um you know websites or
whatever that can do some of this stuff
for you but I prefer just to use
something simple and you know a
spreadsheet is really all you need and
I've been using it for the last four
years and its really made a difference
for me and one thing I'll say is that
you're going to want to pick a date out
of the week that you do this so for me
it's every Wednesday up to my update my
finances and the reason why you want to
do it every week is that if you leave it
to be every month then everything is
just going to be too overwhelming for
you and it's going to take a lot of time
to actually do this and I find a lot of
people won't actually do it if there's
just too much finances that you have to
go over over the last month and so for
me by doing it every week it takes me
maybe 15 minutes to go through
everything whereas if I did it every
month it might take me an hour or
sometimes more and so that's why I like
to make sure that I'm managing and
looking over everything every single
week and it really makes a difference
for me that week because it gives me a
lot of power and control over my
finances and so the first thing I'll do
are the first thing you're going to want
to do is to make sure you change these
income streams to whatever income
streams that you have so for me I have
multiple income streams actually have
way out to here because I have a
lot of websites and everything that pay
me money but if you just have a job you
know or one income stream they're just
going to want to have that here you can
get rid of these ones you know if you
have a side business or you know just
anything else that can produce income
for you you're going to want to make
sure you list it here and what I do is I
come down here to August 2013 and I'll
go through the different income streams
that I have and add up exactly how much
of generated so far that month right
here so for example one of my income
streams is through coaching through my
blog and so I make a consistent income
for coaching and I'll just have that
label is coaching and I go through here
and add up exactly what I've made so far
for August for coaching right here it
might be one of my internet businesses
and I'll go into Clickbank calm or might
go into my Amazon Kindle account and
just add up how much I've made so far
for that week or that month for August
and so I'll have all the data in numbers
here for that week so I can see exactly
how much I've made and then right here
is the total and I've already set up the
formula where if you add in the income
right here then it's automatically going
to total it right here and I'll show you
your annual income for the year as well
and this is really good to look at this
so you can actually see how much you
know you made previous to the month
before and how you're progressing their
expenses it is basically the same thing
you know here you might have your rent
you might have um you know your your
phone bill your gym membership you know
all the different expenses your
groceries business expenses you might
have gifts or books or seminars or all
the expenses you have here and what I do
is I go through my credit cards my bank
accounts online and I basically add up
everything for August that I've paid so
far that week and so I won't mention
that I avoid actually using cash a lot
just because it's very difficult to
track cash I prefer doing all my
transactions on a credit card and plus
you can generate a lot of points and
stuff like that from that so I use
credit cards for everything I make sure
every week I'm paying off those credit
cards so I'm not a queue
you know a high balance or anything like
that but I basically just kind of go
through there and my statements and I
add up exactly what my expenses were it
totals it up and I can just compare say
okay do this is what my expense was so
far this month and this is what my
income was and hopefully if you're doing
things right you're going to have money
left over and you're going to be able to
allocate that money effectively and you
can also look at your annual expenses
you know I just have a note here when I
last updated this as well but you can
modify it customize it make it more
advanced if you want make it work for
you but the important message here is is
to make sure that you're developing the
habit of managing your finances every
single week so you know exactly where
your money is going and you're using you
know they say the secret to wealth is to
spend less than you earn and invest the
difference and so as long as you're
managing your finances and you're
spending less than what you're making
and you're using that money to invest to
build your assets to build your net
worth then you're going to be okay and
you're going to be able to be
financially free so hope this video
helps you make sure to go over the blog
post to learn more about this and
download this template I'll talk to you
soon have a great day
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