Bankroll Management - What are your strategies for saving cash?

[Mike Kavanagh]

I find myself having a problem with spending money that I should of re-invested to my businesses. I guess I'm a glutton for punishment.

Anyways, I'm putting myself on a strict budget for the next 3 months to see how much I can actually save.
This budget consists of removing my "safety blanket" cards out of my wallet.
How I'm going to be saving money:

• Stop eating out - I eat out 2-3 times a day. Not only is this unhealthy for my wallet, it is unhealthy for my body. I can physically feel the negative effects. I basically eating profits.
• Pay cash- I can't spend more than I have on me. I can't overdraft a $20.
• Cooking at home - Cheaper to make meals at home. $25 can get me 5-8 meals. And make me feel better too. All the girls at work love my cookin'.
• Write down all my purchases - even cash purchases. I need to see the cashflow so I can smack myself for dumb purchases before I buy them.

How I'm going to increase revenue:

• Hustling - Or picking as I learned to call it as I first started, 4 months ago. Re-invest all profits instead of eating them.
• Might have to pick up a second job till shit gets paid off. I absolutely despise this thought, gotta do what I gotta do.

To keep myself from going mad, I will include a $50 weekend tab for hanging out with friends. If I don't, it will also be re-invested. Though $50 goes fast on $7 drinks w/ 20% tip. Learning self-control I suppose.

This is just a short list of stuff that has already been put into effect.
What are some of your budgeting tips and tricks?


P.S. Budgeting to me is taking cash from somewhere(eating out) and putting them elsewhere so my money is more productive. At one point I was at a $1500 surplus from hustlin' and should of re-invested them instead of blowing it.

For lack of a better phrase, lost self-control.

What good am I to my business if I can't save the profits?

 

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[AmyQ]

Not sure if you are asking how to manage your personal finances/salary from job or your business profits or both.

For managing business profits, my husband and I pay ourselves a modest monthly salary and live off of it. We have pass through entities, so we do pay ourselves a large bonus at the end of the year, but paying ourselves modestly until the EOY gives us the cash we need to invest in our business first.

Concerning how we manage the salaries we pay ourselves, I keep fixed costs low and do percentage based budgeting. Every month, I put X percentage in an account for investing and X percentage in a separate account for spending.

 

[DeletedUser394]

Same problem. My biggest 'blow up' episode I spent well into the 5 figures and decimated my net worth. Now I'm in control more or less.

You just have to determine up front what you can spend for the month and stick to it. Every penny above that you invest in your business or save it, etc.

Right now my budget is around 50% of my monthly income. Next month it'll go up to 60% most likely. That means that I'm banking 40%-50% of my income. The other 50%, once I deduct my living expenses from, I can spend on anything I want, but I can't go over.

 

[Mike Kavanagh]

Not sure if you are asking how to manage your personal finances/salary from job or your business profits or both.

I was making mistakes with both to be honest. I should only have my paypal business card on me if I'm going to make business purchases. I should only carry my bankcard with me if I need to make personal purchases(groceries, gas).

As for fixed costs, I really only have 2 personal. Rent and cell phone. I really should open an investment only account, sounds like a great idea.

Right now my budget is around 50% of my monthly income.

As for this, does that mean fixed bills like rent/phone/car?

In my budget I'm going to be including food and gas.

 

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[DeletedUser394]

It means everything. That 50% of my income is spent on everything, from rent, to food, to clothes, to travel, etc.

 

[AmyQ]

As for fixed costs, I really only have 2 personal. Rent and cell phone. I really should open an investment only account, sounds like a great idea.

Good on you for keeping your fixed costs low. That means you have a lot of control over future spending and investing. As far as opening a savings account ear-marked for investment purposes...DO IT! I got the idea from Harvey Eker's book: "Secrets of the Millionaire Mind." My net worth doubled the first year I did it. Also, it saves me a lot of anxiety. I can spend money that is set aside for spending without guilt because I never touch money that is set aside for investing in my future.

 

[Lauryn]

I've started to pull out a designated amount from my checks and putting them in a stash in my room.
I've had to dip in it this week, however, I will replace what I used on my next check from my day job.

I'm going to start carrying cash only, and I'm going to start leaving my cards at home.

 

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[Ikke]

I just realize that with every cent I spend, I need to trade my time to regain it. In other words, I translate each purchase into time and decide whether it is worth x hours of my life. You soon realize many things aren't worth it.

 

[FastLearner]

Set a daily limit for yourself. I have a daily limit of $20.
Don't spend more than you can afford and don't spend on frivolous things, and most things ARE frivolous.
Spend your money on making money rather than spending money for temporary pleasures.

 

[FastLearner]

To keep myself from going mad, I will include a $50 weekend tab for hanging out with friends. If I don't, it will also be re-invested. Though $50 goes fast on $7 drinks w/ 20% tip. Learning self-control I suppose.

You need to drink to keep from going insane? Save that $50, that's $100 every two weekends.

 

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[Mike Kavanagh]

You need to drink to keep from going insane?

Nah from staying in the house all week. I don't go out often but if I do, I'd like to have money to do so.

 

[Darius]

I just realize that with every cent I spend, I need to trade my time to regain it. In other words, I translate each purchase into time and decide whether it is worth x hours of my life. You soon realize many things aren't worth it.

Yup this is how it's done. I used to make $7.70 an hour pushing carts for Walmart. McDonalds McNugget meal used to sound nice on my lunch break until I realized I spent an hour of my life for this un-healthy sh*t.

1 hour = 10 nuggets, fries, and a drink.....not worth it lol.

 

[EvanOkanagan]

What type of job do you have? Are you commissioned? Bonuses?

I have a base salary where I work right now and I also earn commissions and bonuses. My base salary is average and that is the only money I use for living expenses. Every commission check or bonus I get I immediately put in a dedicated account or use to pay off any debts. I also don't touch any of my money I make from investments, it just accumulates and is then used in combination with my commissions and bonuses for more investments. This compounding effect can increase exponentially over time. I'm at the point now where I'm putting away 5k+/month into this account and reinvesting when I have the right investment/enough cash saved up.

The way I GOT to this point is a bit of a different story...

AmyQ mentioned "The Secrets of the Millionaire Mind" and I used a model when I was hurting and in debt.

A lot of banks online banking will allow you to NAME accounts, and what I did (which can actually be a fun game) was to name my accounts and they still are today, and even put a certain percentage beside it. For example:

Necessities Account - 50%
Investments - 30%
Fun - 20%

Then every time I got any form of money I would deposit it, log on to my bank account, and separate the money into each account (or tell the teller to do it for me if it was open). If you do this consecutively for say, a month or two it starts to become a habit.

This strategy helped me to get from having substantial bad debts to where I'm at now ($0 bad debt, good investment income, able to deposit large chunks every month).

 

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[camski]

Here is something I did to get my "bankroll" started. It is kind of backwards to what you all are talking about. I set a certain amount that I felt I needed to start my business and then I set an amount aside every week towards it FIRST! My business became my primary focus and I just got in the mindset that I would figure out how to live on the rest. Not going to lie it was hard at first and took a tremendous amount of discipline to 1. do it and 2. dont touch it.

I know your first instinct is I have to survive and then I can thrive. But honestly and I know this sounds a little religious but I am not intending it to be, but you have to just have faith that it will all work out. By faith I mean your instinct to survive will kick in and yuou will survive and make it, you will "find a way" if you only brought home half of what you do now. Not saying you will necessarily be comfortable, in fact you wont, but you can make it.

 

[Mike Kavanagh]

Necessities Account - 50%
Investments - 30%

Set up these two this morning.

don't touch it.

Yeah I have a problem with the not touching it part. I know that is where my flaw lies.