- It's typical in human psychology, when something seems a
little bit intimidating, or if something might give you
answers that you don't like, to kinda ignore it, and
pretend like it's not there. And money is one of those
things that I think some people, like, well, if I really
were to look at the money, my finances, one it might
be a little intimidating. But also, it might give me
an answer that I don't like. It might say that actually, I can't afford that fancy sports car, or I can't afford that fancy dress or that fancy suit. And I don't like that answer. I wanna be able to buy that thing. I wanna go to the fancy
restaurant with my friends. And so I'm just gonna kind of ignore it. Don't do that. That is setting yourself up for disaster. You know, in the short-term, yeah, you might enjoy that nice meal, that nice vacation, the fancy car. But in the long-term
if you're not thinking about your finances,
you're gonna have nights where you're staying up all night. It's gonna cause you stress,
it's gonna make it hard for you to engage with your
family, your friends, with work. And so, short-term gain for long-term pain is
not a good trade off. So I would encourage you,
you don't have to get a PhD in finance, or have
to do super complicated spreadsheets or anything like that. But just do basic,
back-of-the-envelope calculations. How much after tax income are
you bringing in every month? And look at the after tax income. So look at your pay stub. How much is coming in every month? And then what are your expenditures? How much you spend on rent,
how much do you have to, if you have a car, how much
are you spending on that. How much are you spending on insurance. How much are you spending on groceries, how much are you spending on eating out? How much are you spending on clothes, on vacations, on other things? And just have a general sense of this. And one, write down what
you think you're spending on these things, but then
go into your bank account. You know, you have online banking now. You can see what you actually
spent on these things, and I think you might get surprised at, hey, I thought I was only spending $100 a month on eating out. Oh wow, I'm spending $350
a month on eating out. That's a lot more than I thought. So do all of that, make
sure that at minimum, you're living in a sustainable way. That you can afford your
rent, the way you're living, your car payment, your
insurance, and all that. But ideally, and this is something that I tell to everyone who'll listen, I tell myself, I tell my children. Live below your means.
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