How I Manage My Finances

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There are plenty of great resources out there to learn about personal finance, but it’s rare to find examples of good personal financial management in practice.
 

Start with a budget

Step one is to start with a budget. There are a ton of great apps out there for this, but for me a good ‘ol Excel spreadsheet does the job. The goal of the budget is to figure out how much money I need for each of the following categories each month:
  1. Monthly expenses: i.e. mortgage, rent, food, car payment, cell service, insurance, etc.
  1. Emergency fund: money for emergencies, job loss, medical, etc.
    1. The goal is to save up 6 months of cash in a separate account that you don’t touch unless there’s an emergency (more below).
  1. Discretionary expenses: i.e. vacations, clothing, gadgets, guitars, etc.
 
Expense
Amount / month (2022)
Mortgage
$4,500
Car Payment
$555
Food
$750
Cell
$100
Discretionary
$1000
Emergency
$1000
Total
$7905
Note: I picked a random salary of $225,000. This can be adjusted

Figure out how much you can save

Now that you know your monthly expenses,
Amount / month (2022)
Take Home (pre-tax)
$18,750
Expenses
$7905

Pay myself first

Every 2 weeks when I get a paycheck,