Hey Austin, why should you live below your Means? What does “Means” mean anyway?
Families in Austin get into financial trouble when they live above their Means. When our Austin Money Coaches talks about finanical “Means,” they are referring to your total after-tax income.
Here is an example: suppose you earn $50,000 per year, live in South Austin in a cool neighborhood, visit Barton Springs whenever you can and love the Violet Crown Cinema on 2nd Street. Your Means is $50,000, right?
Wrong!
Your $50,000 salary is your “gross income,” which is how much you earn before Federal taxes, Social Security, Medicare and any other deductions are taken out. What is left is your take-home pay, or “net income,” which is also your Means.
Therefore, while your monthly gross income would be $4,167 ($50,000/12 months) your take-home (or net income) is more like $3,125 ($4,167 minus taxes).
If your monthly Means is $3,125, you need to live below $3,125 per month. But the Austin Financial Coach at Capital Budget Strategies, LLC recommends living way below your means to ensure financial stability. Here is how to do it.
Financial automation is your friend! You only need two accounts to get started, one checking and one savings account at the same finanical institution. Have your paycheck sent directly (direct deposit) into your checking account. Then, set up an automatic transfer of $50 directly into your savings account. The money in your savings account is the beginning of your Emergency Fund.
Continuing with a $50,000 income, after the $50 is transferred, you will have $3,075 to spend each month. If you create a Household Budget to ensure you spend only $3,075 you will be living below your Means. Transfer $75 per month, and you will be living way below your Means! Congratulations, you are on the road to financial freedom!
For only $149, our Austin Financial Coach at Captial Budget Strategies, LLC will teach you how to handle your money like an adult! Working together, we will determine your true Net Worth, set up a Household Monthly Budget, an Emergency (aka, “Survival”) Fund and a Snowball Debt Repayment Plan. We will even give you an idea how well you are doing saving for retirement.
Our Austin Financial Coach can meet at your office, your home, our home office or any quiet place that has comfy chairs, coffee and a large table! We can meet you during the day, in the evening and even on weekends.
Give us approximately 4 hours of your time and begin your journey to financial security and winning your retirement. Get more information at: AustinMoneyCoach.com
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