Budgets are bullshit. Who the hell wants to live their life budgeting like a miserable accountant only to feel like a failure every month when you go over or get a bank fee for being overdrawn?
I’m going to tell you the truth about budgets – They don’t work! Those boring accountants in grey suits preaching their budget bible tips are just regurgitating all the other “conventional wisdom” that’s already been out there for 50 years, and they themselves probably don’t even stick to a budget, let alone have one. Everyone already knows what we “should” do, so why don’t we do it?
Relying on a budget is relying on your self control, telling yourself what you can’t have and what to miss out on. Not too fun at all. Relying on self control is what noobs do, its human nature to want to buy things that make you happy and to have experiences that make life worth living, experiences like going to that new club with your friends or things like buying those new jeans you want. The future rich dont rely on self control and sacrifice, we use easy systems to make everything happen automatically.
So, we know budgeting is boring and unrealistic, however it IS important to know where your money is going, so you can make sure its going to the right places, so you know what you can spend on the things that make you happy.
Expense Mapping is the first step in Automating Your Money like a boss, so here’s what you need to do.
Simply map out your absolute fixed costs by the month:
- Loan Payments
Then your other fixed expenses
- Food Shopping (Groceries, not eating out expenses)
- Other subscription services
- Other expenses
Below is an example Expense Map for Cassidy. Cassidy lives in a sharehouse with his friend Hayley. Cassidy pays $10 a week extra rent because he has the bigger room, and they split all other household bills equally.
|Die if you dont have expenses||Week||Month|
|Rent/mortgage||$ 140||$ 560|
|Power||$ 60||$ 240|
|Water||$ 20||$ 80|
|Gas||$ 15||$ 60|
|Loan Payments||$ 50||$ 200|
|Phone||$ 13||$ 50|
|Your other fixed expenses|
|Internet||$ 6||$ 25|
|Quickflix||$ 1||$ 5|
|Gym||$ 10||$ 40|
|Foxtel||$ 6||$ 25|
|Petrol/Public transport||$ 40||$ 160|
|Food Shopping (Groceries, not eating out)||$ 50||$ 200|
|Other subscription services||$ 3||$ 10|
|Total fixed expenses (week and month)||$ 414||$ 1,655|
|Income from Job||$ 690||$ 2,760|
|Income from other sources||$ -||$ -|
|Total income (after tax)||$ 690||$ 2,760|
|After expenses||$ 276||$ 1,105|
So we can now see that Cassidy’s expenses are $414 per week, or $1655 per month. These are his fixed costs that we always know are coming.
He clears $690 a week from his job as a bartender, which is $2760 per month, which leaves $276 a week or $1105 a month. This isn’t important right now, what is important is that we know what the fixed expenses are, so now we can get ready to automate.
Action Step – Do your own Expense Map.
Use: Excel or Open Office Spreadsheet. If you don’t have that it doesn’t really matter just use Word or other text document. Save it somewhere for future use.
Were you surprised how quick and easy it was to do an Expense Map? Did you notice anything interesting about yours? Leave a comment below to let me know – aj