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Hey, this is Leo for actualised.org. And in this video, I'm showing you how to manage your money by creating a budget. So let's help you to manage your personal finances. That's what I want to accomplish with this video. And it's going to be short and snappy and right to the point, I really have one tool that I've used in my own life, ever since I became financially independent, really went off on my own after college and started earning a living. And I've been doing that to this day. So when I was making that transition from not taking any more money from my parents, or my family, and just going on, on my own, and always having to worry about making ends meet. One of the things that keep that kept me sane, through that time and gave me a certain peace of mind and confidence about my own personal finances was having this budget. And what I'm gonna do in this video is I'm gonna introduce and I'm going to give you a downloadable budget worksheet for Microsoft Excel that you can download. And you can use this and I want you to use this to customize it, and then have your own personal budget. And you can use this tool literally for the rest of your life, just the way that I've been using it for the last 10 years or so. And I anticipate that I'll be using it till the rest of my life because it's such an important tool. These days, I see people having a lot of issues with money. And it's not necessarily because they don't have a good job, or because they're not earning enough, that's a matter for another video, we'll talk about how to earn more. But here, I just want to focus you in on how to manage your expenses. And to know and keep track of the money that you've got in your life, where it's coming from and where it's going, especially where it's going. That's the whole point here because this is all about your expenses. And don't think that this is going to be some sort of boring topic because actually, this is not boring at all, what I've found by using this worksheet, even though I'm not a guy who likes to crunch numbers, I don't like doing any kind of accounting stuff. In my own business i, I hate doing that stuff. But this budget worksheet in my own personal life has actually given me a sense of excitement, and something to look forward to in my life. Because I can use this and I can make kind of future projections about where I want to be with my finances. And that's something that I find exciting. So this worksheet, if you're not a numbers person, don't be afraid I'm not a numbers person, either, I think you'll find that you're actually going to like filling this out. And you're going to like working with it, not just doing it once but working on it continually throughout your life polishing it working on your budget, I think that having a budget is just crucial. Because if you don't know what is going on with your money, then you're almost guaranteed to run out of it or lose it. Not save enough of it basically have money problems. You have to know what your expenses are. And these have to be accurate estimates and calculations. They don't need to be perfect, but they need to be accurate. So within 80% 90% accurate accuracy rating. If you're in the 50% and below accuracy ratings on your monthly expenses, then you're probably going to struggle quite a bit. So like I said before, the reason you want to do this is because it can give you peace of mind and also confidence. And something that's even better than all that for me is that that vision, that vision of where I want to go with my life, and with my financial position. And finances, for me are important. Even though it's personal development. A lot of times people talk about, oh, don't worry about the money, just follow your passion, and just be spiritual, be in the present moment, all this kind of stuff, all that is great. But in the end, you want to have your finances really locked down and handled. So you've got abundant finances to go out there and one not worry so much. And to so that you can finance the things that you want to be doing in your life because living a powerful, extraordinary life does take money, it takes resources, this stuff doesn't happen on the cheap. So you want to keep an eye on that all the time. In this worksheet, which I'm gonna have a link that you can go down below the video click on this link and download this worksheet for Excel. I want you to download it and we're going to do is you're going to see several columns there. One column is going to have the current monthly expenses that you're going to be estimating for your current lifestyle. So just picture the current lifestyle you're living your house, your the insurance that you've got, how much money you're spending on entertainment, and on shopping and on food and on groceries on electronics, on magazine, subscriptions, on cable on electricity, all that kind of stuff. Think about all those potential expenses that you've got, you're gonna list them all in this one column. That's your current lifestyle. But what's really cool is I have a second column here, which is your ideal lifestyle. So if you're like most people than what you currently have, the lifestyle is probably not what you would hope to have in your dream life. I think it's important to not only take a look at your current reality, which for some of you might be good, for some of you might be kind of grim. But also take a look at where you want to be. This is the component that gives you that vision that you're gonna be shooting for. So there, you're gonna fill out well, if I was living my dream life, what kind of house or apartment would I be living in? How much would that cost me per month? And what kind of health insurance would I have? And how much money would I be spending on fine dining and my groceries? How would that affect how much money I'm spending on entertainment, on dates, on the kind of stuff and furniture I buy for my house, the kind of electronics I own, the kind of traveling I do, what kind of hotels I stay in, all this kind of stuff. So you've got both those columns. And then you've got one more column that just explains the different expense categories that I have. And I have quite a bit. So what I did in this budget is I went through and of course, I looked at my own budget, and I literally use this exact worksheet for myself. And I've been doing this for for many, many years, it's worked really well for me. But what I've also done is I've actually expanded it out and added more categories. Because all of us have different things in our lives that we spend money on. And what's important with this worksheet is that you go in there and you start customizing it. I've given you the basics. So rent, how much money you're paying for your car, and groceries and food, and household supplies, all that kind of stuff. You have to get very nitty gritty here and get very realistic, what are literally all the recurring expenses that are happening in your life. Everything, even the little stuff, like in my recurring expenses, I list stuff like contact lenses, because I wear contact lenses. So I'm spending money on that every month. And if you have prescriptions that you're paying for every month, even if it's just $5 for a prescription at Walmart every month, write that down, you have magazine subscriptions, are you spending money on Netflix or Amazon? Do you like to buy books? Do you have certain hobbies that require money to finance, maybe you're an artist, and you need to buy new paint brushes, or new watercolours. Or maybe you're someone who likes to tinker with electronics, you buy lots of electronic gadgets, maybe you'd like to decorate your home, so you buy a lot of home decor type of stuff. So all of this stuff has to be accounted for even things like toilet paper, and paper towels, just like very basic necessities that you're always gonna be spending money on probably for the rest of your life, you're always gonna need toilet paper, and you're always gonna need paper towels, you're always gonna be buying drinking water, and you're always going to be paying for electricity. So these kinds of things you want to get all of this stuff accounted for. And it takes you some time to think about this, if you haven't thought about it before, it takes you some time to sit down and ask yourself, Okay, what are all the different categories of expenses that I have in my life. So start with the ones I've got, and if some of them don't apply to you, you can either delete them or just put zeros as to how much you're spending all those per month. And then what's gonna happen is that all of those are gonna get tallied up and at the bottom, you're gonna get a number, and that number is going to be your monthly expense. And also, you're gonna get an A second number, which is your annual expense, basically, your monthly expense times 12. That's your annual expense. So that tells you basically how much you need to be earning per month and per year in order to break even. So that's like that magic number. If you're below that number, that tells you that you got to start to either prune some of your expenses cut down on them, maybe you're being way too lavish and extravagant with your expenses. Or maybe it's just that you have a bad job that's not paying you enough and and that's another problem that we're going to work on getting you a better paying job. But that that magic number is what's really important. Here's some tips for how to use this worksheets. I already told you to go through and customize all your expenses. Also, you're going to be as you're going through every expense category, you're going to be in your mind estimating how much does this cost you? Now, when you're making these estimates, it's important to be realistic. It's more to be pragmatic, and always prefer to overestimate than to underestimate. Most of us don't know exactly how much money we spend on toilet paper per month. We don't know how much money we spend on the feed the movie theater. We don't know how much we spend on groceries. We don't know how much we spend on going out eating at restaurants. Certain things are pretty easy. It's pretty easy to average out, for example, your cell phone bill over the year and you can know how much you're paying per month for your cell phone bill. It's pretty easy to know your rent your electricity to stuff you can average it out. But some of these other things will bit more difficult, especially stuff like for example, electronics, because electronic purchases, those tend to be more like one off type of purchases. So maybe you'll buy a TV once every couple of years, maybe you'll buy a new computer once every couple of years, maybe you'll buy an iPod or some other gadget like that. With those types of expenses, I still like to treat them as though their monthly expenses. And what I do is I kind of average out and I see okay, in a given year, approximately, how much money do I spend on electronics? How many TVs do I buy? How many computer keyboards do I buy? How many stereo systems? How many iPods how many keyboards, this kind of stuff. And it's a little bit tricky to make these estimates, you don't exactly know you have to make an initial guess. And what's going to happen is that over the months after you make this initial guess, over the months, and over the years, you're going to fine tune that or you're going to hold yourself accountable to it. And you're going to ask yourself, is this an accurate estimate. And then you can actually look at the receipts, and you can look at your bank account statements to to verify that this is correct. One thing that I don't like to do with with estimating my expenses is I don't like to include really big one time purchases. So for example, if you're going to be remodeling your kitchen, and it's going to cost you $5,000, you're probably only going to remodel your kitchen once every five or every 10 years. That's a pretty rare expense. And it might be very big expense. So that's something that you wouldn't really want to turn into a monthly figure. Or if you're gonna go buy a car with cash, that's also probably not something you want to turn into a monthly figure. But everything else try to turn into a monthly figure even if it's an annual expense. So for example, car registration, I live here in Las Vegas, and it cost me about $300 a year to do registration and license on my car, it's a recurring yearly payment, what I'll do is I'll break that down, I'll just divide that number by 12. And then I'll put that as a monthly monthly expense. So try to account for all the details here, you got to be detail oriented as you do this. And be realistic. Right. If you think that you're spending X amount of money on toilet paper, you're actually probably spending a little bit more than you think. That's what tends to be the case. That's why sometimes it's hard to make ends meet. And sometimes you end up with less money than you think is because your initial estimates weren't realistic. So what I want you to do is download this worksheet, go through, fill it all out, take some time to think about your ideal life, and what your ideal budget would be. And when you're thinking about this ideal budget, also be pragmatic and realistic. You don't want to sit down and say, Well, if I had an infinite amount of money, then I would live in a, you know, 15,000 square foot mansion, somewhere in the Hollywood Hills. And that would cost me let's say $20,000 a month to pay rent on that house. I mean, ask yourself, do you really need that? Do you really want that? If you do, okay, put it down, but have like a pragmatic, ideal budget, not just out of this world utopian type of ideal budget. Because there isn't an expense to going out there earning lots of money, you know, earning money, even if it's easy. If you put your life together in certain way we're earning money is easy. Still, you have to like maintain that. And a lot of people get trapped into this kind of never ending hamster in a wheel syndrome, where they create this lavish lifestyle, and then they spend the rest of their life trying to maintain it. And maintaining even an extravagant lifestyle, it usually doesn't give you fulfillment and happiness. So make sure that whatever you're putting into your ideal budget, then that's worth it to you. And maybe for you, you'd rather spend a little bit more money on entertainment and on fine dining or on travel than you do on your rent. Or you do on your car, that tends to be actually smart. Because when you're investing money in things versus experiences, that tends to be a poor investment. I mean, maybe a fee, like a car can actually hold that value better than spending money on a vacation. Actually, as far as your fulfilment goes, spending money on some nice vacation to some place in the world that you've never been to. Let's say you want to go to Southeast Asia for a vacation. That's going to give you more fulfillment spending, for example, a week in Southeast Asia, then upgrading your car. Because your car, you're gonna get used to it. Go into Southeast Asia there, you're gonna have some interesting experiences. And you'll have some revelations that will open up your mind you're going to experience new cultures. So think about that. Think about where you want to be allocating your money so that you're getting the most happiness points for the money that you're spending. So create this budget and then what you're going to do is you're going to have it and you're going to continue knew to look at it on a quarterly basis. You don't need to spend too much time. But every once in a quarter, take a look at it at the end of the quarter and see, how are you doing? How are you measuring up to this have your expenses changed, sometimes prices rise, other times certain expenses become irrelevant, sometimes new expenses get added on, so that your budget is kept up to date. And finally, and this is the real value here, if you do this final part of this exercise, you're gonna get so much value, you're gonna have this ideal budget, but then you're going to actually spend the next 60 days collecting every single receipt, and every single purchase that you make, you're gonna have like a box and collect every single receipt and put it in there, or track it electronically, through your bank account, whatever you want to do, but spend the next 60 days tracking all that stuff, just collecting receipts, collect all the receipts that at the end of those 60 days, sit down and actually categorize all the expenses that you had. use Microsoft Excel or whatever, categorize everything, so that you know how much you're spending on clothes. How much did you spend on groceries? How much did you spend on your cell phone bill, break that down into categories, and then see what the actual numbers are. And that's where the real value comes in is, if you see your actual numbers, and then you compare them to your hypotheticals that you had on on this budget that are going to do right now. And that's going to tell you how close you are, and how far you are with your estimates. Hopefully, restaurants are gonna be pretty accurate. If they're not accurate, then you're gonna retool your estimates so that they actually reflect what happened in in these 60 days. You don't need to be doing this all the time. But I find that doing it at least once this kind of 60 day exercise is going to be good because it keeps you honest, it keeps you accountable. And it also gets you have like a sanity check on whether your hypothetical budget is really real. So once you have this budget, then you're going to know exactly how much money you need. Right now, you're also going to know how much money you need going forward in the future shooting for your ideal. This will help you to know how you should be advancing in your career, maybe it'll give you an indication that need to switch careers, maybe it'll tell you that you need to start your own business. If your ideal budget is very ambitious. It might also tell you that you have some expenses that need cutting, right. So a lot of people will waste money on credit card bills, interest rate payments, or maybe you're spending a lot of time or a lot of money eating out, maybe you're spending a lot of money on dates, maybe you're spending a lot of money on liquor. So when you're actually looking at these numbers in your mind, you can say oh, wait a minute, I'm spending way too much on this thing here and this thing here. And maybe I'm not spending enough on this here and this there. So all of this is just to fine tune and optimize your budget. And in the end, I don't like worrying about money. To me money is like just a necessity that I need to run my life smoothly. So this budget thing is not about being an account of your life. It's simply that when you do this work once a quarter, what that does is that allows you for the rest of the quarter. Or even if you want to do it maybe only twice a year for half a year, it allows you just to be calm and grounded. Because you know that your money situation is handled, you don't need to worry about it. And it doesn't really take that much time, you can probably fill out this worksheet in an hour right now, spend the next 60 days collecting receipts that's a pretty easy procedure, then spend a couple of hours categorizing those receipts after 60 days. And then just at the end of the quarter, spend another hour or so reviewing your budget, and making little fine tuned adjustments. Nowadays, when I look at my budget actually excites me. Because I have ambitious goals for where I want to go with my business. I have ambitious goals where I want to go with my personal life, I have visions of me traveling to cool places and eating new types of food and going on cool dates, and spending money on new gadgets, new electronics, new books, my own education, that stuff is exciting to me. And I like looking at my finances and saying okay, I can actually make this happen. Or if I'm seeing that, well, I can't make it happen right now, then that that kind of triggers my mind to start thinking, okay, what can I do so that I can make this happen in the next couple of years. And that's a really exciting way to get your budget and your finances handled rather than the way that I see most people doing it, which is like, Oh man, I don't have enough. And it's always jumping from not enough, not enough, not enough struggling to pay the bills and always being short. Like that's not exciting, that's miserable. Instead what you want with your life is you want to be comfortable with your money and you want to have like more and one of the ways to do that is by making sure that you account for all your expenses. All right, this is Leo. I'm gonna be signing off posting your comments down below. I want We should do more videos on money topics. And I think it's very important to live an extraordinary life to account for money. And we'll cover other topics in future videos. Also, please like this video, share it with a friend, throw it on Facebook. And finally come and sign up to actualize that org sign up to my newsletter. So weekly newsletter, I release free videos, I have a lot of cool exclusive content planned in the months ahead. That's only going to be possible through actualized, Oregon, not necessarily on YouTube. So sign up. And all the topics I cover, there really talks topics about how to master your life, how to create a passionate life in all the different areas, your career, your finances. Of course, if you're starting a business, I'm really excited to shoot more videos about how to manage your business. How to find that dream business that you want to be. You want to be living and getting your finances from. Also, we talked about topics like relationships and inner mindsets, really mindsets that help you to self actualize and make the most of yourself. So sign up and you'll be all set for that it's free.