lifemastery.com and in this video

I'm going to talk to you a little bit

about how to budget money and how to

save money. Saving money is very

important. You've got to make sure that

you're putting money aside every single

month, but the problem is that most

people they don't budget their money and

manage their money in the first place.

In fact most people they're living paycheck to

paycheck where their expenses are

a certain amount of money and whatever

money that they're earning is going

directly towards paying off those

expenses. Therefore they don't

have any positive cash flow that they

can then use to save and put aside.

If you are living that way, if you're

living month to month, paycheck to paycheck

and you're not saving any money, then

you're stuck in what is called the rat

race. The rat race basically means that

you're never going to be able to get

ahead because you're just repeating the

same cycle. You're not taking money that

you can save, that you can invest, and

help use to build your financial future,

to build a business, to make passive

income etc. Really the most

important thing that you've got to

understand before you're even in a

position where you can invest money and

all that sort of stuff, is you've got

to make sure that you manage your money

and you set up a budget. A budget is

basically where you say that you're not

going to spend more than X amount of

money. You've got to decide what that is,

what is realistic for you but

a budget is a way of essentially

sacrificing in some way in your life,

which is a very important thing to

understand. For me I remember in my life

I never wanted to make a sacrifice. I

just wanted to make money and spend that

money, but then I realized by living my

life that way it was at the cost of my

future and that by living my life that

way as time were to go by that I was taking

away from my future life that I was

going to have one day. When I had kids

one day or a marriage or a family or

whatever it is that I was going to

struggle at that point in my life.

You've got to think ahead for your future.

You can't just live for and think about

today, you've got to think ahead and

prepare for the future and that means

sacrificing some instant gratification.

You've got to

delay gratification and make a

sacrifice.

Budgeting you've got to decide how

much is your budget going to be. That

you're not going to exceed what that is.

What I recommend you do before

that is make a list of all your existing

current expenses.

Go through your credit cards or debit

cards or online banking, your statements,

go through your receipts, whatever you've

got to go through and go through every

single transaction that you have and add

it all up. Because the first place to

start is you've got to know exactly where

you're at.

You've got to know exactly where your

monthly expenses are and how much it is

that you're spending on a month to month

basis. I do recommend you go back

several months because you've got to see

what the pattern is. It's even better

if you can categorize it into different

categories. A great way of doing

this, you can use software, you can use

Microsoft Excel, you can use a Google

spreadsheet, you can use Numbers if

you're on a Mac, but actually set up a

spreadsheet or track it whatever the way

that you want and add it up. Get out your

calculator and add up exactly how much

you spent on a month to month basis on

your rent or on your mortgage.

Whatever that number is write it down,

put it under a column or a category.

That's exactly what your monthly

rent or mortgage is. Another category is

going to be putting in exactly what you

spend every single month on your cell

phone bill.

Put exactly what that is. Again, go

back several months know exactly what

that is. There might be some months you might

have spent more than what your

bill traditionally is but you’ve got to

know exactly what that is. You're going to look

at your Internet bill, your gym

membership. You're going to look at how much money

you're spending on a monthly basis

buying groceries,

eating out, entertainment such as going

to movies or playing video games or

whatever that is.

Again, these are all different categories.

You've got to look through all your

transactions or statements and add

exactly what that is to know exactly

where you're at. Your car payments,

gas, your bus pass,

transportation, taking a taxi, whatever

that is break it up in the categories.

Maybe another category could be

investing in yourself like books

and courses, whatever. Know exactly

what you're investing every month there.

It could be a coach, it could be a mentor,

it could be your school tuition

payments or your student loan.

Whatever it is guys you've got to have a

spreadsheet or something that's tracking

everything. That way you can add

everything up.

You know exactly what you spent every

single month for the last several months.

When you look at that number it's going

to be an eye opener for you. You're going

to actually realize the reality of how

you're living. Then what you're also going

to do is going to add up and

track exactly how much you're making every

month as well. That's exactly what you

make from your job, maybe from your

business, maybe from other income streams

that you might have such as investments, such

as ... I don't know things that you might be

doing on the side, but you've got to make

sure you track all of that as well and

you've got to know exactly what that is.

Basically by doing this exercise

you're going to have a list and you're

going to know exactly what your expenses are

and then you're also going to know exactly what

your income is. You're always going to

make sure that your income is higher

than what your expenses are and you have

what is called a positive cash flow.

Positive cash flow. Very important,

that's what's going to allow you to save

money every month. That's what's going to

allow you to invest, to build a business,

to do whatever it is that you want to do

and have that savings for whatever it is you

want to invest in. If

you find yourself your expenses are too

high, then you've got to set up the budget.

You've got to decide again

how much do I want to save every

month? Is it one hundred bucks a month, is it a

thousand bucks a month and then look at

ways that you can cut down and lower

your expenses. That's creating a

budget. You might decide, my

budget is that I'm not going to spend

more than two hundred dollars a month

eating out.

You've got to enforce that, that's what the

budget is. I'm not going to spend more

than two hundred dollars a

month on clothing.

That's the budget. I'm not going to

spend more than X amount of

money

on transportation or on alcohol or

whatever it might be that you're

spending money on. In some cases you might

decide

got to find a cheaper cell phone

plan. I've got to sell my cell phone and get

a cheaper phone. I need to get rid of my

car and get a bus pass instead. Again,

these are sacrifices that you might have

to make so that you can save money and

set yourself up for your future.

Set that budget and then the other key

piece is guys, you've got to make sure that you

are tracking this on a weekly basis

especially the start. On a weekly

basis. Which means that every single week,

you're going to want to go through your

credit card statement, your bank

statements, everything and add everything

up and put them in the categories

that you have set up in your spreadsheet.

I recommend doing this weekly

because it'll be faster if you do it

weekly. If you leave it every month

they'll be a lot more transactions and

you're going to procrastinate you're not

going to do it. Weekly helps you

understand where you are at with your

budget and it will help you realize hey you

know what? I spent a little bit too much

just last week, I'm coming up close to my

budget so I need to cut back a little

bit. Do it every week, very important.

Then the other piece is I highly

recommend that you use a credit card or

a debit card for all your transactions

because if you're spending cash on

things, it's very hard for you to track

that whereas if you're buying everything on

your credit card, then you're going to be

able to see everything. You're going

to see where your money

is going and be able to go through

all those transactions. Using a

credit card is beneficial because

it's helping you build up your credit score

which is very important especially at a

young age to build your credit. If you

have a problem with overspending with

credit cards, then I would recommend

setting a limit on the credit card. You

can call your credit card company and

say, "I want to have a limit of a thousand

dollars, of two thousand dollars," or

whatever that limit is to ensure that

you don't overspend that, but if

you're doing that every week you're

tracking things, you're going through your

statements,

you know exactly where you're

at. You have that awareness and you're

ensuring that you have a positive cash

flow then that's going to give you the

ability to save money

and you're going to have a better

sense of control and confidence over your

life of managing your money.

It's very important that you do this as early

as possible because if you can't manage

what you currently have,

then there's no point going out there

to try to make more money because if you

can't manage two thousand dollars a

month, five thousand dollars a month, if

you make ten thousand or more, if you make a