Living poor #4 / 30— Overseeing the numbers
First let’s start with putting some numbers on the paper.
Forget the school math many of us hated.
The math of life is much more entertaining due to its simplicity.
An amount of money aquired after substracting monthly incomes from expenses.
If possitive, you’re making enough to cover your expenses while having some extra money for example to invest.
If negative, you’re falling into a negative balance and later into debt.
Start with taking a calculator, pen and a sheet of paper and do some math about your monthly incomes and expenses.
This process is called making the money statement.
And it’s one of the absolute necessities essential for starting living the poor life.
Because when you’re living a life like that, you need to oversee the numbers on a regular basis.
Know exactly what you spend your money for.
Otherwise the numbers will oversee you.
Which usually ends up with negative cashflow.
And soon a negative balance on your bank account.
Bellow I post my monthly money statement.
Please bear in mind most number are approximate as they tend to change due to leaping prices of rent, food etc. as we currently move from one place to another quite frequently.
Freelance copywriting: ~600 $ / month
Rent: ~180 $ / month
Insurance fees: 85 $ / month
Food: ~75 $ / month
Other expenses: ~30 $ / month
Books: ~6 $ / month
TOTAL: ~370 $ / month
CASHFLOW: ~230 $ / month
Now are you suprised?
I wouldn’t be puzzled if you were.
You see my monthly income is pretty modest.
And so are my expenses.
Do you think these numbers are irrelevant? Impossible to achieve?
Well let me tell you I lived like that the last 3 years.
That’s a fact.
And apart from other factors, staying that low, doing the job I want and having even enough spare time to do the things I desire was possible mostly due the awareness of what I spend my money for.
How many people actually do this?
How many of us oversee their money on a regular basis?
If I take only people around myself I wouln’t be surprised if it was 10 % of them.
I’m quite convinced it’s even less…
Because mostly I confront people who don’t want to care about money.
People who want to be able spending their money for anything.
While always having enough savings ready in case things go wrong.
I don’t think this strategy is all wrong.
It’s deifinitely quite comfortable one.
Yet the main issue I see about it is if you want to perform it you need a lot of money.
And in order to get that money you usually have to work really hard.
Bind yourself with a 9 to 5 job.
The drill many of us hate.
Again — if you decide this is the best option for you, ok.
But I can see quite clearly most people is tired of this.
They want a change.
And it’s not impossible to achieve.
But in order to making it it’s necessary to understand two things:
First — making more money usually comes with more stress and complications.
Second — as much as can making less money buy you more time for yourself, it can also come with a feelings of unhapiness.
Theoretically all you have to do about this feeling is to arrange your priorities and decide whether time or money is more valuable to you.
Simple to say. But uneasy to do (according to my personal experience this can actually take years).
Practically there are no other options than:
1) Working hard and hoping for the better finanacialy evaluated opportunities to come
2) Overseeing the numbers by using the money statement
Now you know the key to survive with less money try giving it a chance.
Once you make a habbit out of overseeing your expenses you may soon realize the 9 to 5 job no longer binds you.
So maybe you can move towards doing something else.
Something which is much closer to what you really enjoy …